Schwab Core Equity Fund NCSRS Certified semi-annual shareholder report (management investment company)

Number of
Contracts

Notional
Amount
($)

Current Value/
Unrealized
Depreciation
($)

Futures Contracts

Russell 1000 Growth Index, e-mini, expires 06/15/18

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, 2018

Item 1: Report(s) to Shareholders.

Semiannual Report | April 30, 2018

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^® U.S. Large-Cap
Growth Index Fund

Schwab^® U.S. Large-Cap
Value Index Fund

Schwab^® U.S. Mid-Cap
Index Fund

Schwab International
Index Fund^®

Eight cost-efficient ways to tap into the power of the stock market for long-term growth potential.

In This Report

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 Condensed Portfolio Holdings are sub-categories of Sector classifications.

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Schwab Equity Index Funds

Performance at a Glance

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.schwabfunds.com/schwabfunds_prospectus.

Total Return for the 6 Months Ended April 30, 2018
Schwab S&P 500 Index Fund (Ticker Symbol: SWPPX)	3.80%
S&P 500^® Index	3.82%
Fund Category: Morningstar Large Blend¹	3.48%
Performance Details	pages 7-8

Schwab 1000 Index Fund (Ticker Symbol: SNXFX)	3.84%
Schwab 1000 Index^®	3.83%
Fund Category: Morningstar Large Blend¹	3.48%
Performance Details	pages 9-10

Schwab Small-Cap Index Fund (Ticker Symbol: SWSSX)	3.34%
Russell 2000^® Index	3.27%
Fund Category: Morningstar Small Blend¹	1.86%
Performance Details	pages 11-12

Schwab Total Stock Market Index Fund (Ticker Symbol: SWTSX)	3.76%
Dow Jones U.S. Total Stock Market Index^SM	3.81%
Fund Category: Morningstar Large Blend¹	3.48%
Performance Details	pages 13-14

Total Return for the 6 Months Ended April 30, 2018
Schwab U.S. Large-Cap Growth Index Fund (Ticker Symbol: SWLGX)	1.15% ^*
Russell 1000^® Growth Index	1.15% ^*
Fund Category: Morningstar Large Growth¹	N/A
Performance Details	pages 15-16

Schwab U.S. Large-Cap Value Index Fund (Ticker Symbol: SWLVX)	-2.23% ^*
Russell 1000^® Value Index	-2.23% ^*
Fund Category: Morningstar Large Value¹	N/A
Performance Details	pages 17-18

Schwab U.S. Mid-Cap Index Fund (Ticker Symbol: SWMCS)	-0.23% ^*
Russell Midcap^® Index	-0.22% ^*
Fund Category: Morningstar Mid-Cap Blend¹	N/A
Performance Details	pages 19-20

Schwab International Index Fund² (Ticker Symbol: SWISX)	2.87%
MSCI EAFE^® Index (Net)³	3.41%
Fund Category: Morningstar Foreign Large Blend¹	2.61%
Performance Details	pages 21-22

All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and 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.

^*	Total returns shown are since the fund’s inception date of December 20, 2017.
¹	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.
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.

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Schwab Equity Index Funds

From the President

Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.

Dear Shareholder,

Many investors grew accustomed to steady gains during the relative market calm over the past couple of years. But the smooth ride couldn’t last forever, and starting in February, stock markets began experiencing bigger swings. Ending a period of unusually low volatility, many stock prices came under pressure. No one can predict what comes next, of course, but the increased market volatility may very well continue.

Higher volatility can tempt investors to veer from their financial plans. Sudden portfolio reallocations might be tempting in the moment but can often lead to unintended results. For example, those who sold out of stocks in the midst of the global financial crisis in 2008 – arguably one of the most volatile periods in recent memory – missed out when the market returned 26% in 2009, as measured by the S&P 500 Index.

With this in mind, we believe that a period of heightened volatility can be an opportune time to check on your portfolio and evaluate whether your investments are positioned to help you achieve your financial goals. For many investors, that means having a diversified portfolio with exposure to both equities and fixed income securities. It can also mean having a mix of growth and value stocks and large and small companies to match a shareholder’s risk appetite. We know many investors increasingly rely on low-cost index funds to achieve the asset allocation they are comfortable with and as such, we’re committed to offering transparent, straightforward, and low-cost products.

We’re pleased to note that since our last shareholder report, we’ve added three new equity index funds to our lineup: the Schwab U.S. Large-Cap Growth Index Fund, the Schwab U.S. Large-Cap Value Index Fund, and the Schwab U.S. Mid-Cap Index Fund. These additions help us provide investors with even more choices for their U.S. equity allocation. The new funds, like all of the Schwab Equity Index Funds, have no investment minimums, ensuring that every investor, regardless of account size, has access to the lowest available pricing.

We know it can be difficult to stand firm when volatility spikes, but we believe a strong investment foundation can help you stay on track to reach your financial goals. We’re here to serve investors over the long-term, with funds that seek consistent, repeatable performance and are built with investors’ needs in mind.

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.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.

Sincerely,

“ We’re pleased to note that since our last shareholder report, we’ve added three new equity index funds to our lineup: the Schwab U.S. Large-Cap Growth Index Fund, the Schwab U.S. Large-Cap Value Index Fund, and the Schwab U.S. Mid-Cap Index Fund.”

Management views may have changed since the report date.

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Schwab Equity Index Funds

The Investment Environment

Over the six-month reporting period ended April 30, 2018, both U.S. and international equities generated positive returns. In the first half of the reporting period, strong corporate earnings, solid global economic growth, and generally accommodative monetary policies contributed to the continued rally in stocks, as did overall upbeat consumer sentiment. The second half of the reporting period, however, was marked by significant market volatility, driven by concerns about rising inflation, a potential trade war between the U.S. and China, and a technology industry selloff. Growth stocks continued to outperform value, while equities from the U.S. slightly outperformed those from international developed countries as a whole. For the reporting period, the S&P 500^® Index, a bellwether for the overall U.S. stock market, returned 3.82%, while the Russell 2000^® Index, a U.S. small-cap company measure, returned 3.27%. Internationally, the MSCI EAFE^® Index (Net)*, a broad measure of international developed equity performance, returned 3.41% for the same period.

Economies around the globe continued to show signs of strength over the reporting period. In the U.S., the labor market remained strong with the unemployment rate at a 17-year low, a pickup in wage gains, and 91 consecutive months of jobs expansion as of the end of April. U.S. manufacturing continued to show signs of strength amid increasing payrolls and rising orders, although the potential effects of proposed tariffs from the U.S. and China caused concerns toward the end of the reporting period. Overall, U.S. quarterly gross domestic product (GDP) numbers exceeded expectations, reinforcing a solid U.S. economic picture. In the eurozone, a recovering labor market, strong exports, and continued accommodative monetary policies contributed to strengthening GDP numbers in 2017. Consumer confidence also climbed to a near all-time high in January amid increased household spending and rising employment. Eurozone economic activity slowed toward the end of the reporting period, however, as global trade tensions rose and business survey data weakened. In Japan, increasing exports, accommodative monetary policy, and rising consumption resulted in eight straight quarters of growth by the end of the fourth quarter of 2017—Japan’s longest stretch of economic growth in 28 years. This stretch ended after the first quarter in 2018, however, due to weak consumer consumption and business investment.

Asset Class Performance Comparison % returns during the 6 months ended April 30, 2018

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.

Data source: Index provider websites and CSIM.

Nothing in this report represents a recommendation of a security by the investment adviser.

Management views 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.

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Schwab Equity Index Funds

The Investment Environment (continued)

During the six-month reporting period, central bank policies tightened slightly across the globe though remained relatively accommodative. Citing a strengthening economic outlook, the Federal Reserve (Fed) raised short-term interest rates in December and March, each time by 0.25%. The federal funds rate ended the reporting period in a target range of 1.50% to 1.75%, with market expectations for approximately two or three additional increases in 2018. The Fed also continued to slowly pare down its balance sheet by allowing securities to mature without reinvesting the proceeds. Outside the U.S., the European Central Bank scaled down its quantitative easing program by reducing the pace of bond purchases, although it extended the program through at least September 2018. The Bank of England (BOE) raised its benchmark interest rate in November for the first time in 10 years, with plans for only two more 0.25% increases by the end of 2020. However, with inflation currently above the BOE’s target of 2% and stronger-than-expected growth in the second half of the reporting period, the BOE later revised expectations slightly and signaled that rates may need to rise more quickly. Meanwhile, the Bank of Japan maintained “quantitative and qualitative monetary easing with yield curve control,” and the People’s Bank of China followed the Fed’s path and raised several key interest rates over the reporting period as part of its plan to address an overleveraged financial system without creating significant drag on growth.

In the second half of the reporting period, volatility returned to global markets. Rising inflation measurements in February contributed to fears that the Fed would raise short-term rates faster than previously expected, potentially resulting in other central banks following suit. In March, President Trump announced plans for a 25% tariff on steel imports and a 10% tariff on aluminum imports, causing threats of retaliation from countries across the globe and weighing on shares of U.S. companies dependent on these metals. Several countries eventually negotiated exemptions to these tariffs, though escalating tensions between the U.S. and China led to concerns of a potential trade war. Chinese President Xi Jinping sought to alleviate some tensions in a speech later in the reporting period, where he offered several compromises to the Trump administration’s demands, including greater protections for intellectual property and lower tariffs. Meanwhile, after leading the U.S. stock market for much of 2017, U.S. technology companies fell sharply in March amid increased attention from regulators and negative consumer sentiment. Among other events, Facebook, Inc. faced criticism after news surfaced regarding a third party’s access to millions of users’ data, President Trump voiced disapproval with Amazon.com, Inc.’s U.S. Postal Service contract, and two separate fatal accidents involving self-driving vehicles brought renewed scrutiny on Tesla, Inc. and Uber Technologies, Inc. However, many technology companies were able to bounce back by the end of the reporting period, due in part to solid earnings reports and growing customer or subscriber numbers.

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Schwab Equity Index Funds

Fund Management

Christopher Bliss, CFA, Vice President and Head of the Passive Equity Team, leads the portfolio management team for Schwab’s passive equity mutual 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).

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.

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Schwab S&P 500 Index Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab S&P 500 Index Fund (5/19/97)	3.80%	13.23%	12.86%	8.99%
S&P 500^® Index	3.82%	13.27%	12.96%	9.02%
Fund Category: Morningstar Large Blend³	3.48%	11.94%	11.42%	8.10%
Fund Expense Ratio⁴: 0.03%

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 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.

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Schwab S&P 500 Index Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	507
Weighted Average Market Cap (millions)	$200,959
Price/Earnings Ratio (P/E)	20.5
Price/Book Ratio (P/B)	3.1
Portfolio Turnover Rate²	1%

Sector Weightings % of Investments³

Top Equity Holdings % of Net Assets⁴

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁴	This list is not a recommendation of any security by the investment adviser.

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Schwab 1000 Index Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab 1000 Index Fund (4/2/91)	3.84%	13.21%	12.57%	8.86%
Schwab 1000 Index^®	3.83%	13.18%	12.79%	9.09%
Russell 1000^® Index³	3.83%	13.17%	12.84%	9.10%
S&P 500^® Index	3.82%	13.27%	12.96%	9.02%
Fund Category: Morningstar Large Blend⁴	3.48%	11.94%	11.42%	8.10%
Fund Expense Ratio⁵: 0.05%

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	Effective February 28, 2018, the fund changed its secondary benchmark index from the S&P 500^® Index to the Russell 1000^® Index. CSIM believes that the foregoing benchmark index change provides a more appropriate comparison for evaluating the fund’s performance.
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.

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Schwab 1000 Index Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	993 ²
Weighted Average Market Cap (millions)	$179,287
Price/Earnings Ratio (P/E)	20.5
Price/Book Ratio (P/B)	3.0
Portfolio Turnover Rate³	2%

Sector Weightings % of Investments⁴

Top Equity Holdings % of Net Assets⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	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.
³	Not annualized.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁵	This list is not a recommendation of any security by the investment adviser.

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Schwab Small-Cap Index Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab Small-Cap Index Fund (5/19/97)	3.34%	11.61%	11.77%	9.98%
Russell 2000^® Index	3.27%	11.54%	11.74%	9.49%
Small-Cap Spliced Index	3.27%	11.54%	11.74%	10.01%
Fund Category: Morningstar Small Blend³	1.86%	8.96%	10.54%	8.76%
Fund Expense Ratio⁴: 0.05%

The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.

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 prospectus.

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Schwab Small-Cap Index Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	1,982
Weighted Average Market Cap (millions)	$2,535
Price/Earnings Ratio (P/E)	19.6
Price/Book Ratio (P/B)	2.2
Portfolio Turnover Rate²	3%

Sector Weightings % of Investments³

Top Equity Holdings % of Net Assets⁴

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	Excludes derivatives.
²	Not annualized.
³	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁴	This list is not a recommendation of any security by the investment adviser.

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Schwab Total Stock Market Index Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab Total Stock Market Index Fund (6/1/99)	3.76%	12.97%	12.64%	9.23%
Dow Jones U.S. Total Stock Market Index^SM	3.81%	13.06%	12.69%	9.19%
Fund Category: Morningstar Large Blend³	3.48%	11.94%	11.42%	8.10%
Fund Expense Ratio⁴: 0.03%

For index definitions, please see the Glossary.

Index ownership – “Standard & Poor’s^®” and “S&P^®” 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 has been licensed for use by S& P Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by CSIM. The “Dow Jones U.S. Total Stock Market Index^SM” 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.

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Schwab Total Stock Market Index Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	2,684
Weighted Average Market Cap (millions)	$166,667
Price/Earnings Ratio (P/E)	20.2
Price/Book Ratio (P/B)	2.9
Portfolio Turnover Rate²	2%

Sector Weightings % of Investments³

Top Equity Holdings % of Net Assets⁴

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁴	This list is not a recommendation of any security by the investment adviser.

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Schwab U.S. Large-Cap Growth Index Fund

Average Annual Returns¹

Fund and Inception Date	Since Inception
Fund: Schwab U.S. Large-Cap Growth Index Fund (12/20/17)	1.15%
Russell 1000^® Growth Index	1.15%
Fund Category: Morningstar Large Growth²	N/A
Fund Expense Ratio³: 0.04%

For index definitions, please see the Glossary.

Index ownership – The Russell 1000^® Growth Index is a registered mark of the Frank Russell Company (Russell) and has been licensed for use by the Schwab U.S. Large-Cap Growth Index Fund. The Schwab U.S. Large-Cap Growth 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	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.

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Schwab U.S. Large-Cap Growth Index Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	551
Weighted Average Market Cap (millions)	$239,467
Price/Earnings Ratio (P/E)	25.3
Price/Book Ratio (P/B)	6.2
Portfolio Turnover Rate²	3%

Sector Weightings % of Investments³

Top Equity Holdings % of Net Assets⁴

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁴	This list is not a recommendation of any security by the investment adviser.

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Schwab U.S. Large-Cap Value Index Fund

Average Annual Returns¹

Fund and Inception Date	Since Inception
Fund: Schwab U.S. Large-Cap Value Index Fund (12/20/17)	-2.23%
Russell 1000^® Value Index	-2.23%
Fund Category: Morningstar Large Value²	N/A
Fund Expense Ratio³: 0.04%

For index definitions, please see the Glossary.

Index ownership – The Russell 1000^® Value Index is a registered mark of the Frank Russell Company (Russell) and has been licensed for use by the Schwab U.S. Large-Cap Value Index Fund. The Schwab U.S. Large-Cap Value 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	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.

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Schwab U.S. Large-Cap Value Index Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	711
Weighted Average Market Cap (millions)	$119,380
Price/Earnings Ratio (P/E)	16.6
Price/Book Ratio (P/B)	1.9
Portfolio Turnover Rate²	4%

Sector Weightings % of Investments³

Top Equity Holdings % of Net Assets⁴

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁴	This list is not a recommendation of any security by the investment adviser.

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Schwab U.S. Mid-Cap Index Fund

Average Annual Returns¹

Fund and Inception Date	Since Inception
Fund: Schwab U.S. Mid-Cap Index Fund (12/20/17)	-0.23%
Russell Midcap^® Index	-0.22%
Fund Category: Morningstar Mid-Cap Blend²	N/A
Fund Expense Ratio³: 0.05%

For index definitions, please see the Glossary.

Index ownership – The Russell Midcap^® Index is a registered mark of the Frank Russell Company (Russell) and has been licensed for use by the Schwab U.S. Mid-Cap Index Fund. The Schwab U.S. Mid-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	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.

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Schwab U.S. Mid-Cap Index Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	775
Weighted Average Market Cap (millions)	$15,075
Price/Earnings Ratio (P/E)	20.0
Price/Book Ratio (P/B)	2.6
Portfolio Turnover Rate²	3%

Sector Weightings % of Investments³

Top Equity Holdings % of Net Assets⁴

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁴	This list is not a recommendation of any security by the investment adviser.

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Schwab International Index Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab International Index Fund (5/19/97)	2.87%	14.11%	5.76%	2.35%
MSCI EAFE^® Index (Net)³	3.41%	14.51%	5.90%	2.43%
International Spliced Index	3.41%	14.51%	5.90%	2.46%
Fund Category: Morningstar Foreign Large Blend⁴	2.61%	13.56%	5.61%	2.21%
Fund Expense Ratio⁵: 0.06%

The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.

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 prospectus.

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Schwab International Index Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	943
Weighted Average Market Cap (millions)	$62,691
Price/Earnings Ratio (P/E)	14.6
Price/Book Ratio (P/B)	1.7
Portfolio Turnover Rate²	2%

Sector Weightings % of Investments¹

Top Equity Holdings % of Net Assets³

Top Country Weightings % of Investments⁴

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	Excludes derivatives.
²	Not annualized.
³	This list is not a recommendation of any security by the investment adviser.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.

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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.

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, 2017 and held through April 30, 2018.

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. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Expense Ratio (Annualized)¹	Beginning Account Value at 11/1/17	Ending Account Value (Net of Expenses) at 4/30/18	Expenses Paid During Period 11/1/17-4/30/18²
Schwab S&P 500 Index Fund
Actual Return	0.03%	$1,000.00	$1,038.00	$0.15
Hypothetical 5% Return	0.03%	$1,000.00	$1,024.65	$0.15
Schwab 1000 Index Fund
Actual Return	0.05%	$1,000.00	$1,038.40	$0.25
Hypothetical 5% Return	0.05%	$1,000.00	$1,024.55	$0.25
Schwab Small-Cap Index Fund
Actual Return	0.05%	$1,000.00	$1,033.40	$0.25
Hypothetical 5% Return	0.05%	$1,000.00	$1,024.55	$0.25
Schwab Total Stock Market Index Fund
Actual Return	0.03%	$1,000.00	$1,037.60	$0.15
Hypothetical 5% Return	0.03%	$1,000.00	$1,024.65	$0.15
Schwab U.S. Large-Cap Growth Index Fund^3,4,5
Actual Return	0.00%	$1,000.00	$1,011.50	$0.00
Hypothetical 5% Return	0.00%	$1,000.00	$1,024.80	$0.00
Schwab U.S. Large-Cap Value Index Fund^3,4,5
Actual Return	0.00%	$1,000.00	$ 977.70	$0.00
Hypothetical 5% Return	0.00%	$1,000.00	$1,024.80	$0.00
Schwab U.S. Mid-Cap Index Fund^3,4,5
Actual Return	0.00%	$1,000.00	$ 997.70	$0.00
Hypothetical 5% Return	0.00%	$1,000.00	$1,024.80	$0.00
Schwab International Index Fund
Actual Return	0.06%	$1,000.00	$1,028.70	$0.30
Hypothetical 5% Return	0.06%	$1,000.00	$1,024.50	$0.30

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.
³	For the period beginning with each fund’s commencement of operations through June 30, 2018, the investment adviser has voluntarily agreed to waive each fund’s management fees to 0.00%. If the investment adviser had not voluntarily agreed to waive each fund’s management fees the expense ratios would have been 0.04%, 0.04% and 0.05% for the Schwab U.S. Large-Cap Growth Index Fund, Schwab U.S. Large-Cap Value Index Fund, and Schwab U.S. Mid-Cap Index Fund, respectively. If the voluntary waiver had not been in place since commencement of operations 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 U.S. Large-Cap Growth Index Fund, $0.15 and $0.20, respectively, Schwab U.S. Large-Cap Value Index Fund, $0.14 and $0.20, respectively, and for Schwab U.S. Mid-Cap Index Fund, $0.18 and $0.25, respectively (see financial note 4).
⁴	The expense ratio provided for the fund is for the period from 12/20/17 (commencement of operations) through 4/30/18 (see financial note 4).
⁵	Actual expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 132 days of the period from commencement of operations on 12/20/17 through 4/30/18, and divided by 365 days of the fiscal year. Hypothetical 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 365 days of the fiscal year.

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Schwab S&P 500 Index Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$40.23	$33.38	$33.00	$31.99	$27.78	$22.35
Income (loss) from investment operations:
Net investment income (loss)	0.39 ¹	0.74 ¹	0.69 ¹	0.67 ¹	0.56	0.52
Net realized and unrealized gains (losses)	1.15	6.99	0.69	0.92	4.13	5.40
Total from investment operations	1.54	7.73	1.38	1.59	4.69	5.92
Less distributions:
Distributions from net investment income	(0.72)	(0.69)	(0.68)	(0.58)	(0.48)	(0.49)
Distributions from net realized gains	(0.02)	(0.19)	(0.32)	—	—	—
Total distributions	(0.74)	(0.88)	(1.00)	(0.58)	(0.48)	(0.49)
Net asset value at end of period	$41.03	$40.23	$33.38	$33.00	$31.99	$27.78
Total return	3.80% ²	23.57%	4.40%	5.10%	17.16%	27.06%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.03% ³	0.05% ⁴	0.09%	0.09%	0.09%	0.09%
Net operating expenses	N/A ⁵	0.05% ⁴	0.09%	0.09%	0.09%	0.09%
Net investment income (loss)	1.90% ³	2.01%	2.12%	2.07%	1.89%	2.10%
Portfolio turnover rate	1% ²	2%	2%	2%	2%	1%
Net assets, end of period (x 1,000,000)	$32,550	$29,999	$22,675	$21,587	$20,473	$17,121

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio.

⁵

Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated.

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Table of Contents

Schwab S&P 500 Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (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 the end of the month on the fund’s website at www.schwabfunds.com/schwabfunds_prospectus.

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.6% of net assets

Automobiles & Components 0.6%
Other Securities		0.6	194,944,183

Banks 6.5%
Bank of America Corp.	13,713,440	1.3	410,306,125
Citigroup, Inc.	3,678,598	0.8	251,137,885
JPMorgan Chase & Co.	4,922,177	1.6	535,434,414
Wells Fargo & Co.	6,294,944	1.0	327,085,290
Other Securities		1.8	577,135,667
		6.5	2,101,099,381

Capital Goods 7.1%
3M Co.	856,452	0.5	166,485,704
General Electric Co.	12,483,743	0.5	175,646,264
Honeywell International, Inc.	1,083,531	0.5	156,765,265
The Boeing Co.	794,661	0.8	265,067,123
Other Securities		4.8	1,550,918,117
		7.1	2,314,882,473

Commercial & Professional Services 0.6%
Other Securities		0.6	190,641,755

Consumer Durables & Apparel 1.2%
Other Securities		1.2	394,664,288

Consumer Services 1.9%
McDonald's Corp.	1,145,258	0.6	191,762,000
Other Securities		1.3	429,242,072
		1.9	621,004,072

Diversified Financials 5.6%
Berkshire Hathaway, Inc., Class B *	2,765,133	1.6	535,689,216
The Charles Schwab Corp. (b)	1,700,381	0.3	94,677,214
Other Securities		3.7	1,184,831,373
		5.6	1,815,197,803

Energy 6.2%
Chevron Corp.	2,744,305	1.1	343,339,999
Exxon Mobil Corp.	6,087,414	1.5	473,296,438
Other Securities		3.6	1,207,253,872
		6.2	2,023,890,309

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.4%
Walmart, Inc.	2,086,661	0.6	184,586,032
Other Securities		0.8	281,093,009
		1.4	465,679,041

Food, Beverage & Tobacco 4.0%
Altria Group, Inc.	2,731,872	0.5	153,285,338
PepsiCo, Inc.	2,046,684	0.6	206,592,283
Philip Morris International, Inc.	2,231,773	0.6	183,005,386
The Coca-Cola Co.	5,510,504	0.7	238,108,878
Other Securities		1.6	518,610,359
		4.0	1,299,602,244

Health Care Equipment & Services 6.2%
Abbott Laboratories	2,499,655	0.4	145,304,945
Medtronic plc	1,949,574	0.5	156,219,365
UnitedHealth Group, Inc.	1,391,316	1.0	328,907,102
Other Securities		4.3	1,372,908,593
		6.2	2,003,340,005

Household & Personal Products 1.5%
The Procter & Gamble Co.	3,622,613	0.8	262,059,824
Other Securities		0.7	231,639,032
		1.5	493,698,856

Insurance 2.6%
Other Securities		2.6	841,753,981

Materials 2.8%
DowDuPont, Inc.	3,366,006	0.7	212,866,219
Other Securities		2.1	711,874,388
		2.8	924,740,607

Media 2.4%
Comcast Corp., Class A	6,661,996	0.6	209,120,055
The Walt Disney Co.	2,160,747	0.7	216,787,747
Other Securities		1.1	371,609,847
		2.4	797,517,649

Pharmaceuticals, Biotechnology & Life Sciences 7.9%
AbbVie, Inc.	2,291,778	0.7	221,271,166
Amgen, Inc.	962,104	0.5	167,867,906
Johnson & Johnson	3,856,026	1.5	487,748,729
Merck & Co., Inc.	3,876,824	0.7	228,228,629

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Table of Contents

Schwab S&P 500 Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Pfizer, Inc.	8,558,167	1.0	313,314,494
Other Securities		3.5	1,160,065,766
		7.9	2,578,496,690

Real Estate 2.7%
Other Securities		2.7	891,603,182

Retailing 6.7%
Amazon.com, Inc. *	577,430	2.8	904,330,446
Booking Holdings, Inc. *	70,128	0.5	152,738,784
Netflix, Inc. *	623,900	0.6	194,943,794
The Home Depot, Inc.	1,682,313	1.0	310,891,442
Other Securities		1.8	627,271,523
		6.7	2,190,175,989

Semiconductors & Semiconductor Equipment 4.0%
Intel Corp.	6,723,922	1.1	347,088,854
NVIDIA Corp.	869,561	0.6	195,564,269
Texas Instruments, Inc.	1,413,300	0.4	143,351,019
Other Securities		1.9	607,377,835
		4.0	1,293,381,977

Software & Services 14.9%
Adobe Systems, Inc. *	705,679	0.5	156,378,466
Alphabet, Inc., Class A *	427,916	1.3	435,866,679
Alphabet, Inc., Class C *	438,135	1.4	445,727,880
Facebook, Inc., Class A *	3,442,317	1.8	592,078,524
International Business Machines Corp.	1,231,306	0.5	178,490,118
MasterCard, Inc., Class A	1,326,128	0.7	236,408,839
Microsoft Corp.	11,059,430	3.2	1,034,277,894
Oracle Corp.	4,340,536	0.6	198,232,279
Visa, Inc., Class A	2,588,862	1.0	328,474,811
Other Securities		3.9	1,248,019,060
		14.9	4,853,954,550

Technology Hardware & Equipment 5.8%
Apple, Inc.	7,287,704	3.7	1,204,365,963
Cisco Systems, Inc.	6,910,886	0.9	306,083,141
Other Securities		1.2	374,411,989
		5.8	1,884,861,093

Telecommunication Services 1.9%
AT&T, Inc.	8,823,094	0.9	288,515,174
Verizon Communications, Inc.	5,930,455	0.9	292,667,954
Other Securities		0.1	25,689,507
		1.9	606,872,635

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 2.2%
Union Pacific Corp.	1,131,241	0.5	151,167,735
Other Securities		1.7	549,772,315
		2.2	700,940,050

Utilities 2.9%
Other Securities		2.9	943,680,622
Total Common Stock
(Cost $17,046,611,311)			32,426,623,435

Other Investment Company 0.0% of net assets

Securities Lending Collateral 0.0%
Other Securities		0.0	6,295,955
Total Other Investment Company
(Cost $6,295,955)			6,295,955
Security Rate, Maturity Date	Face Amount ($)	% of Net Assets	Value ($)
Short-Term Investment 0.2% of net assets

Time Deposit 0.2%
Other Securities		0.2	64,886,359
Total Short-Term Investment
(Cost $64,886,359)			64,886,359

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 06/15/18	935	123,747,250	(1,141,188)

For the following notes, please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $6,137,856.
(b)	Issuer is affiliated with the fund’s investment adviser.
(c)	The rate shown is the 7-day yield.
(d)	The rate shown is the current daily overnight rate.

The fund owns shares of an affiliate, The Charles Schwab Corp. since that company is included in its index. Below is the summary of investment activities involving The Charles Schwab Corp. shares owned by the fund during the period ended April 30, 2018:

	Balance of Shares Held at 10/31/17	Gross Purchases	Gross Sales	Balance of Shares Held at 04/30/18	Net Change in Unrealized Appreciation (depreciation)	Realized Gains (Losses)	Dividends Received
The Charles Schwab Corp.	1,598,881	136,500	(35,000)	1,700,381	$17,448,500	$6,609	$292,979

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Table of Contents

Schwab S&P 500 Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2018 and reflects the complete schedule of portfolio holdings (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
Assets
Common Stock¹	$32,426,623,435	$—	$—	$32,426,623,435
Other Investment Company¹	6,295,955	—	—	6,295,955
Short-Term Investment¹	—	64,886,359	—	64,886,359
Liabilities
Futures Contracts²	(1,141,188)	—	—	(1,141,188)
Total	$32,431,778,202	$64,886,359	$—	$32,496,664,561

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts 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, 2018. Fund investments in underlying mutual funds are classified as Level 1, without consideration to the classification level of the investments held by the underlying mutual funds, which could be Level 1, Level 2 or Level 3.

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Table of Contents

Schwab S&P 500 Index Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investment in affiliated issuer, at value (cost $32,979,042)		$94,677,214
Investments in unaffiliated issuers, at value (cost $17,078,518,628) including securities on loan of $6,137,856		32,396,832,580
Collateral invested for securities on loan, at value (cost $6,295,955)		6,295,955
Deposit with broker for futures contracts		14,761,000
Receivables:
Fund shares sold		39,380,905
Dividends		27,907,877
Income from securities on loan		9,333
Interest	+	1,893
Total assets		32,579,866,757
Liabilities
Collateral held for securities on loan		6,295,955
Payables:
Investment adviser fees		802,305
Fund shares redeemed		21,335,635
Variation margin on futures contracts	+	1,062,338
Total liabilities		29,496,233
Net Assets
Total assets		32,579,866,757
Total liabilities	–	29,496,233
Net assets		$32,550,370,524
Net Assets by Source
Capital received from investors		17,089,605,307
Net investment income not yet distributed		189,058,562
Net realized capital losses		(107,164,281)
Net unrealized capital appreciation		15,378,870,936

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$32,550,370,524		793,326,535		$41.03

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab S&P 500 Index Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends received from affiliated issuer		$292,979
Dividends received from unaffiliated issuers		306,873,337
Interest		527,820
Securities on loan, net	+	285,448
Total investment income		307,979,584
Expenses
Investment adviser fees		4,779,671
Total expenses	–	4,779,671
Net investment income		303,199,913
Realized and Unrealized Gains (Losses)
Net realized gains on affiliated issuer		6,609
Net realized losses on unaffiliated issuers		(80,917,853)
Net realized gains on futures contracts	+	17,250,169
Net realized losses		(63,661,075)
Net change in unrealized appreciation (depreciation) on affiliated issuer		17,448,500
Net change in unrealized appreciation (depreciation) on unaffiliated issuers		872,618,580
Net change in unrealized appreciation (depreciation) on futures contracts	+	(2,248,894)
Net change in unrealized appreciation (depreciation)	+	887,818,186
Net realized and unrealized gains		824,157,111
Increase in net assets resulting from operations		$1,127,357,024

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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
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$303,199,913	$531,949,288
Net realized losses		(63,661,075)	(9,643,477)
Net change in unrealized appreciation (depreciation)	+	887,818,186	4,977,368,643
Increase in net assets from operations		1,127,357,024	5,499,674,454
Distributions to Shareholders
Distributions from net investment income		(542,341,760)	(467,541,204)
Distributions from net realized gains	+	(12,524,865)	(130,682,605)
Total distributions		($554,866,625)	($598,223,809)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		106,257,717	$4,431,046,637	179,562,912	$6,615,177,231
Shares reinvested		13,165,483	545,314,317	14,654,966	509,406,624
Shares redeemed	+	(71,790,030)	(2,997,141,329)	(127,842,782)	(4,701,911,186)
Net transactions in fund shares		47,633,170	$1,979,219,625	66,375,096	$2,422,672,669
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		745,693,365	$29,998,660,500	679,318,269	$22,674,537,186
Total increase	+	47,633,170	2,551,710,024	66,375,096	7,324,123,314
End of period		793,326,535	$32,550,370,524	745,693,365	$29,998,660,500
Net investment income not yet distributed			$189,058,562		$428,200,409

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Schwab 1000 Index Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$62.61	$52.40	$53.67	$53.63	$48.31	$40.23
Income (loss) from investment operations:
Net investment income (loss)¹	0.58	1.08	0.95	0.94	0.83	0.81
Net realized and unrealized gains (losses)	1.85	10.96	0.92	1.40	6.74	9.74
Total from investment operations	2.43	12.04	1.87	2.34	7.57	10.55
Less distributions:
Distributions from net investment income	(1.10)	(0.97)	(0.96)	(0.86)	(0.75)	(0.81)
Distributions from net realized gains	(1.55)	(0.86)	(2.18)	(1.44)	(1.50)	(1.66)
Total distributions	(2.65)	(1.83)	(3.14)	(2.30)	(2.25)	(2.47)
Net asset value at end of period	$62.39	$62.61	$52.40	$53.67	$53.63	$48.31
Total return	3.84% ²	23.52%	3.87%	4.66%	16.36%	27.85%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.05% ³	0.14% ⁴	0.33%	0.33%	0.33%	0.34%
Net operating expenses	N/A ⁵	0.12% ⁴	0.29%	0.29%	0.29%	0.29%
Net investment income (loss)	1.84% ³	1.87%	1.86%	1.77%	1.64%	1.87%
Portfolio turnover rate	2% ²	5%	3%	4%	4%	4%
Net assets, end of period (x 1,000,000)	$7,789	$7,681	$6,432	$6,550	$6,586	$5,887

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio.

⁵

Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated.

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Schwab 1000 Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.7% of net assets

Automobiles & Components 0.9%
Other Securities		0.9	69,556,987

Banks 6.5%
Bank of America Corp.	2,922,761	1.1	87,449,009
Citigroup, Inc.	785,528	0.7	53,627,997
JPMorgan Chase & Co.	1,048,378	1.5	114,042,559
Wells Fargo & Co.	1,339,934	0.9	69,622,971
Other Securities		2.3	182,080,737
		6.5	506,823,273

Capital Goods 7.3%
3M Co.	181,254	0.5	35,233,965
General Electric Co.	2,643,602	0.5	37,195,480
Honeywell International, Inc.	229,017	0.4	33,134,180
The Boeing Co.	169,098	0.7	56,404,329
Other Securities		5.2	405,511,912
		7.3	567,479,866

Commercial & Professional Services 0.8%
Other Securities		0.8	60,681,403

Consumer Durables & Apparel 1.3%
Other Securities		1.3	96,859,297

Consumer Services 2.2%
McDonald's Corp.	242,189	0.5	40,552,126
Other Securities		1.7	130,638,694
		2.2	171,190,820

Diversified Financials 5.5%
Berkshire Hathaway, Inc., Class B *	585,856	1.5	113,497,883
The Charles Schwab Corp. (b)	361,265	0.3	20,115,235
Other Securities		3.7	297,583,888
		5.5	431,197,006

Energy 6.0%
Chevron Corp.	580,537	0.9	72,630,984
Exxon Mobil Corp.	1,289,041	1.3	100,222,938
Other Securities		3.8	295,353,354
		6.0	468,207,276

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.3%
Walmart, Inc.	443,206	0.5	39,206,003
Other Securities		0.8	62,130,044
		1.3	101,336,047

Food, Beverage & Tobacco 3.7%
Altria Group, Inc.	576,305	0.4	32,336,474
PepsiCo, Inc.	431,546	0.6	43,560,253
Philip Morris International, Inc.	471,965	0.5	38,701,130
The Coca-Cola Co.	1,165,442	0.6	50,358,749
Other Securities		1.6	126,412,070
		3.7	291,368,676

Health Care Equipment & Services 5.9%
Abbott Laboratories	527,301	0.4	30,652,007
Medtronic plc	411,522	0.4	32,975,258
UnitedHealth Group, Inc.	294,026	0.9	69,507,746
Other Securities		4.2	329,719,513
		5.9	462,854,524

Household & Personal Products 1.4%
The Procter & Gamble Co.	769,263	0.7	55,648,486
Other Securities		0.7	54,546,332
		1.4	110,194,818

Insurance 2.8%
Other Securities		2.8	218,684,688

Materials 3.1%
DowDuPont, Inc.	710,241	0.6	44,915,641
Other Securities		2.5	199,708,866
		3.1	244,624,507

Media 2.5%
Comcast Corp., Class A	1,412,855	0.6	44,349,518
The Walt Disney Co.	456,340	0.6	45,784,592
Other Securities		1.3	106,071,050
		2.5	196,205,160

Pharmaceuticals, Biotechnology & Life Sciences 7.5%
AbbVie, Inc.	485,775	0.6	46,901,576
Amgen, Inc.	207,674	0.5	36,234,960
Johnson & Johnson	816,925	1.3	103,332,843
Merck & Co., Inc.	824,518	0.6	48,539,375

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Schwab 1000 Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Pfizer, Inc.	1,809,607	0.9	66,249,712
Other Securities		3.6	285,551,947
		7.5	586,810,413

Real Estate 3.4%
Other Securities		3.4	264,256,826

Retailing 6.2%
Amazon.com, Inc. *	122,491	2.5	191,836,830
Booking Holdings, Inc. *	14,846	0.4	32,334,588
Netflix, Inc. *	132,300	0.5	41,338,458
The Home Depot, Inc.	354,835	0.8	65,573,508
Other Securities		2.0	148,275,336
		6.2	479,358,720

Semiconductors & Semiconductor Equipment 3.9%
Intel Corp.	1,426,012	0.9	73,610,739
NVIDIA Corp.	184,499	0.5	41,493,825
Texas Instruments, Inc.	299,497	0.4	30,377,981
Other Securities		2.1	157,415,689
		3.9	302,898,234

Software & Services 14.9%
Adobe Systems, Inc. *	150,522	0.4	33,355,675
Alphabet, Inc., Class A *	90,774	1.2	92,460,581
Alphabet, Inc., Class C *	92,832	1.2	94,440,779
Facebook, Inc., Class A *	730,052	1.6	125,568,944
International Business Machines Corp.	260,288	0.5	37,731,348
MasterCard, Inc., Class A	281,129	0.6	50,116,867
Microsoft Corp.	2,345,844	2.8	219,383,331
Oracle Corp.	923,759	0.5	42,188,074
Visa, Inc., Class A	548,100	0.9	69,542,928
Other Securities		5.2	394,166,023
		14.9	1,158,954,550

Technology Hardware & Equipment 5.7%
Apple, Inc.	1,549,474	3.3	256,066,073
Cisco Systems, Inc.	1,472,215	0.8	65,204,402
Other Securities		1.6	120,073,166
		5.7	441,343,641

Telecommunication Services 1.8%
AT&T, Inc.	1,870,456	0.8	61,163,911
Verizon Communications, Inc.	1,256,495	0.8	62,008,028
Other Securities		0.2	14,254,912
		1.8	137,426,851

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 2.1%
Union Pacific Corp.	239,024	0.4	31,940,777
Other Securities		1.7	132,603,636
		2.1	164,544,413

Utilities 3.0%
Other Securities		3.0	230,028,342
Total Common Stock
(Cost $2,046,996,854)			7,762,886,338

Other Investment Companies 0.4% of net assets

Money Market Fund 0.2%
Other Securities		0.2	17,554,578

Securities Lending Collateral 0.2%
Other Securities		0.2	16,590,817
Total Other Investment Companies
(Cost $34,145,395)			34,145,395

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 06/15/18	192	25,411,200	(626,546)

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 $16,207,105.
(b)	Issuer is affiliated with the fund's investment adviser.
(c)	The rate shown is the 7-day yield.

REIT —

Real Estate Investment Trust

	Balance of Shares Held at 10/31/17	Gross Purchases	Gross Sales	Balance of Shares Held at 04/30/18	Net Change in Unrealized Appreciation (depreciation)	Realized Gains (Losses)	Dividends Received
The Charles Schwab Corp.	375,265	4,800	(18,800)	361,265	$3,555,940	$431,862	$65,668

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Table of Contents

Schwab 1000 Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (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
Assets
Common Stock¹	$7,762,886,338	$—	$—	$7,762,886,338
Other Investment Companies¹	34,145,395	—	—	34,145,395
Liabilities
Futures Contracts²	(626,546)	—	—	(626,546)
Total	$7,796,405,187	$—	$—	$7,796,405,187

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

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Schwab 1000 Index Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investment in affiliated issuer, at value (cost $1,941,764)		$20,115,235
Investments in unaffiliated issuers, at value (cost $2,062,609,668) including securities on loan of $16,207,105		7,760,325,681
Collateral invested for securities on loan, at value (cost $16,590,817)		16,590,817
Deposit with broker for futures contracts		1,856,000
Receivables:
Dividends		6,306,096
Fund shares sold		2,305,179
Income from securities on loan	+	38,043
Total assets		7,807,537,051
Liabilities
Collateral held for securities on loan		16,590,817
Payables:
Investment adviser fees		321,479
Fund shares redeemed		1,396,278
Variation margin on futures contracts	+	229,418
Total liabilities		18,537,992
Net Assets
Total assets		7,807,537,051
Total liabilities	–	18,537,992
Net assets		$7,788,999,059
Net Assets by Source
Capital received from investors		1,860,772,534
Net investment income not yet distributed		44,265,968
Net realized capital gains		168,697,619
Net unrealized capital appreciation		5,715,262,938

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$7,788,999,059		124,834,230		$62.39

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Schwab 1000 Index Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends received from affiliated issuer		$65,668
Dividends received from unaffiliated issuers (net of foreign withholding tax of $4,207)		74,242,853
Securities on loan, net	+	230,377
Total investment income		74,538,898
Expenses
Investment adviser fees		1,967,409
Total expenses	–	1,967,409
Net investment income		72,571,489
Realized and Unrealized Gains (Losses)
Net realized gains on affiliated issuer		431,862
Net realized gains on unaffiliated issuers		141,946,953
Net realized gains on futures contracts	+	3,513,863
Net realized gains		145,892,678
Net change in unrealized appreciation (depreciation) on affiliated issuer		3,555,940
Net change in unrealized appreciation (depreciation) on unaffiliated issuers		77,911,727
Net change in unrealized appreciation (depreciation) on futures contracts	+	(1,251,463)
Net change in unrealized appreciation (depreciation)	+	80,216,204
Net realized and unrealized gains		226,108,882
Increase in net assets resulting from operations		$298,680,371

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Schwab 1000 Index Fund

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$72,571,489	$133,035,258
Net realized gains		145,892,678	190,829,677
Net change in unrealized appreciation (depreciation)	+	80,216,204	1,158,864,872
Increase in net assets from operations		298,680,371	1,482,729,807
Distributions to Shareholders
Distributions from net investment income		(134,342,862)	(118,201,282)
Distributions from net realized gains	+	(189,924,986)	(104,593,102)
Total distributions		($324,267,848)	($222,794,384)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		4,924,058	$313,203,519	8,174,082	$469,813,117
Shares reinvested		5,120,254	322,166,360	3,447,950	186,706,519
Shares redeemed	+	(7,880,216)	(501,486,210)	(11,718,276)	(668,209,704)
Net transactions in fund shares		2,164,096	$133,883,669	(96,244)	($11,690,068)
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		122,670,134	$7,680,702,867	122,766,378	$6,432,457,512
Total increase or decrease	+	2,164,096	108,296,192	(96,244)	1,248,245,355
End of period		124,834,230	$7,788,999,059	122,670,134	$7,680,702,867
Net investment income not yet distributed			$44,265,968		$106,037,341

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Schwab Small-Cap Index Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$31.45	$25.60	$26.29	$28.13	$27.62	$21.26
Income (loss) from investment operations:
Net investment income (loss)¹	0.24	0.38	0.39	0.38	0.35	0.42
Net realized and unrealized gains (losses)	0.81	6.62	0.59	(0.34)	1.76	6.94
Total from investment operations	1.05	7.00	0.98	0.04	2.11	7.36
Less distributions:
Distributions from net investment income	(0.39)	(0.39)	(0.36)	(0.34)	(0.31)	(0.50)
Distributions from net realized gains	(1.21)	(0.76)	(1.31)	(1.54)	(1.29)	(0.50)
Total distributions	(1.60)	(1.15)	(1.67)	(1.88)	(1.60)	(1.00)
Net asset value at end of period	$30.90	$31.45	$25.60	$26.29	$28.13	$27.62
Total return	3.34% ²	27.84%	4.17%	0.36%	8.08%	36.23%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.05% ³	0.10% ⁴	0.20%	0.20%	0.21%	0.20%
Net operating expenses	N/A ⁵	0.09% ⁴	0.17%	0.17%	0.17%	0.17%
Net investment income (loss)	1.57% ³	1.31%	1.60%	1.37%	1.27%	1.76%
Portfolio turnover rate	3% ²	11%	17%	17%	12%	11%
Net assets, end of period (x 1,000,000)	$3,778	$3,531	$2,619	$2,607	$2,567	$2,351

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio.

⁵

Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated.

₃₈

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Table of Contents

Schwab Small-Cap Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.6% of net assets

Automobiles & Components 1.1%
Other Securities		1.1	40,155,056

Banks 12.5%
Hancock Holding Co.	150,426	0.2	7,348,310
Sterling Bancorp	382,930	0.2	9,094,587
Texas Capital Bancshares, Inc. *	88,400	0.2	8,720,660
Umpqua Holdings Corp.	398,388	0.2	9,386,021
Wintrust Financial Corp.	99,466	0.2	8,897,234
Other Securities		11.5	427,474,554
		12.5	470,921,366

Capital Goods 9.4%
Curtiss-Wright Corp.	78,840	0.3	10,094,674
EMCOR Group, Inc.	105,797	0.2	7,785,601
Other Securities		8.9	335,865,411
		9.4	353,745,686

Commercial & Professional Services 3.7%
ASGN, Inc. *	89,239	0.2	7,195,341
Other Securities		3.5	134,702,113
		3.7	141,897,454

Consumer Durables & Apparel 2.6%
Other Securities		2.6	98,290,183

Consumer Services 4.3%
Grand Canyon Education, Inc. *	83,975	0.2	8,732,560
Texas Roadhouse, Inc.	118,996	0.2	7,625,264
Other Securities		3.9	144,555,761
		4.3	160,913,585

Diversified Financials 3.0%
FirstCash, Inc.	83,027	0.2	7,198,441
Other Securities		2.8	108,351,054
		3.0	115,549,495

Energy 4.1%
Other Securities		4.1	157,070,872

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 0.5%
Other Securities		0.5	20,557,176

Food, Beverage & Tobacco 1.4%
Other Securities		1.4	51,555,743

Health Care Equipment & Services 7.1%
Cantel Medical Corp.	64,845	0.2	7,267,179
Chemed Corp.	28,098	0.2	8,660,366
Encompass Health Corp.	175,600	0.3	10,679,992
Haemonetics Corp. *	96,000	0.2	7,491,840
Insulet Corp. *	103,500	0.2	8,901,000
Integra LifeSciences Holdings Corp. *	114,096	0.2	7,031,736
LivaNova plc *	86,600	0.2	7,688,348
Masimo Corp. *	80,400	0.2	7,214,292
Medidata Solutions, Inc. *	100,900	0.2	7,200,224
Other Securities		5.2	198,012,762
		7.1	270,147,739

Household & Personal Products 0.4%
Other Securities		0.4	16,249,410

Insurance 2.4%
Primerica, Inc.	79,600	0.2	7,701,300
Other Securities		2.2	83,177,190
		2.4	90,878,490

Materials 4.3%
Louisiana-Pacific Corp.	258,472	0.2	7,322,512
Other Securities		4.1	155,419,516
		4.3	162,742,028

Media 1.3%
Other Securities		1.3	47,876,634

Pharmaceuticals, Biotechnology & Life Sciences 9.4%
Avexis, Inc. *	50,100	0.3	10,654,266
Bluebird Bio, Inc. *	87,200	0.4	14,837,080
Catalent, Inc. *	240,399	0.3	9,882,803
Exact Sciences Corp. *	209,762	0.3	10,490,198
Nektar Therapeutics *	268,971	0.6	22,502,114
PRA Health Sciences, Inc. *	89,400	0.2	7,345,998
Sage Therapeutics, Inc. *	75,095	0.3	10,807,672

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab Small-Cap Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Sarepta Therapeutics, Inc. *	108,900	0.2	8,315,604
Other Securities		6.8	258,859,565
		9.4	353,695,300

Real Estate 6.4%
Other Securities		6.4	241,037,493

Retailing 3.0%
Other Securities		3.0	113,187,931

Semiconductors & Semiconductor Equipment 2.9%
Entegris, Inc.	253,600	0.2	8,165,920
MKS Instruments, Inc.	96,189	0.3	9,849,753
Monolithic Power Systems, Inc.	71,400	0.2	8,360,940
Other Securities		2.2	83,900,456
		2.9	110,277,069

Software & Services 9.7%
Aspen Technology, Inc. *	130,899	0.3	11,486,387
Blackbaud, Inc.	84,769	0.2	8,897,354
EPAM Systems, Inc. *	88,983	0.3	10,175,206
Fair Isaac Corp. *	53,391	0.2	9,246,253
GrubHub, Inc. *	153,076	0.4	15,482,107
MAXIMUS, Inc.	115,517	0.2	7,812,415
Nutanix, Inc., Class A *	195,900	0.3	9,910,581
Paycom Software, Inc. *	88,107	0.3	10,062,700
Proofpoint, Inc. *	77,900	0.2	9,187,526
RingCentral, Inc., Class A *	115,868	0.2	7,768,949
Zendesk, Inc. *	177,594	0.2	8,657,707
Other Securities		6.9	256,761,807
		9.7	365,448,992

Technology Hardware & Equipment 4.6%
Littelfuse, Inc.	43,100	0.2	8,056,252
Other Securities		4.4	164,860,952
		4.6	172,917,204

Telecommunication Services 0.6%
Other Securities		0.6	23,465,670

Transportation 1.6%
Knight-Swift Transportation Holdings, Inc.	224,728	0.2	8,766,639
Other Securities		1.4	51,613,515
		1.6	60,380,154

Utilities 3.3%
IDACORP, Inc.	89,943	0.2	8,364,699
WGL Holdings, Inc.	91,833	0.2	7,814,988
Other Securities		2.9	108,384,607
		3.3	124,564,294
Total Common Stock
(Cost $2,543,913,093)			3,763,525,024

Security	Number of Shares	% of Net Assets	Value ($)
Rights 0.0% of net assets

Media 0.0%
Other Securities		0.0	14,883

Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Other Securities		0.0	780,370
Total Rights
(Cost $250,273)			795,253

Other Investment Company 2.3% of net assets

Securities Lending Collateral 2.3%
Wells Fargo Government Money Market Fund, Select Class 1.59% (c)	85,792,496	2.3	85,792,496
Total Other Investment Company
(Cost $85,792,496)			85,792,496
Security Rate, Maturity Date	Face Amount ($)	% of Net Assets	Value ($)
Short-Term Investments 0.3% of net assets

Time Deposits 0.3%
BNP Paribas 1.05%, 05/01/18 (d)	8,131,228	0.2	8,131,228
Other Securities		0.1	1,292,421
		0.3	9,423,649
Total Short-Term Investments
(Cost $9,423,649)			9,423,649

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
Russell 2000 Index, e-mini, expires 06/15/18	156	12,041,640	(179,612)

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 $82,546,944.
(b)	Fair-valued by management in accordance with procedures approved by fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.
(d)	The rate shown is the current daily overnight rate.

CVR —	Contingent Value Rights
REIT —	Real Estate Investment Trust

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab Small-Cap Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (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
Assets
Common Stock¹	$3,600,782,996	$—	$—	$3,600,782,996
Materials	162,742,028	—	— ^*	162,742,028
Rights ¹
Media	—	—	14,883	14,883
Pharmaceuticals, Biotechnology & Life Sciences	—	—	780,370 ^*	780,370
Other Investment Company¹	85,792,496	—	—	85,792,496
Short-Term Investments¹	—	9,423,649	—	9,423,649
Liabilities
Futures Contracts²	(179,612)	—	—	(179,612)
Total	$3,849,137,908	$9,423,649	$795,253	$3,859,356,810

*	Level 3 amount shown includes securities determined to have no value at April 30, 2018.
¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

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Table of Contents

Schwab Small-Cap Index Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $2,553,587,015) including securities on loan of $82,546,944		$3,773,743,926
Collateral invested for securities on loan, at value (cost $85,792,496)		85,792,496
Deposit with broker for futures contracts		1,870,000
Receivables:
Fund shares sold		4,119,534
Dividends		1,039,738
Income from securities on loan		434,092
Foreign tax reclaims		1,110
Interest	+	273
Total assets		3,867,001,169
Liabilities
Collateral held for securities on loan		85,792,496
Payables:
Investments bought		1,029,540
Investment adviser fees		155,396
Fund shares redeemed		2,267,722
Variation margin on futures contracts	+	120,021
Total liabilities		89,365,175
Net Assets
Total assets		3,867,001,169
Total liabilities	–	89,365,175
Net assets		$3,777,635,994
Net Assets by Source
Capital received from investors		2,546,112,106
Net investment income not yet distributed		14,859,619
Net realized capital losses		(3,313,030)
Net unrealized capital appreciation		1,219,977,299

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$3,777,635,994		122,267,038		$30.90

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Table of Contents

Schwab Small-Cap Index Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends (net of foreign withholding tax of $3,288)		$26,506,850
Interest		64,021
Securities on loan, net	+	3,040,964
Total investment income		29,611,835
Expenses
Investment adviser fees		914,610
Total expenses	–	914,610
Net investment income		28,697,225
Realized and Unrealized Gains (Losses)
Net realized gains on investments		7,068,437
Net realized gains on futures contracts	+	2,025,911
Net realized gains		9,094,348
Net change in unrealized appreciation (depreciation) on investments		80,306,985
Net change in unrealized appreciation (depreciation) on futures contracts	+	(197,657)
Net change in unrealized appreciation (depreciation)	+	80,109,328
Net realized and unrealized gains		89,203,676
Increase in net assets resulting from operations		$117,900,901

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

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
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$28,697,225	$41,398,028
Net realized gains		9,094,348	137,045,478
Net change in unrealized appreciation (depreciation)	+	80,109,328	563,299,358
Increase in net assets from operations		117,900,901	741,742,864
Distributions to Shareholders
Distributions from net investment income		(43,773,504)	(39,963,730)
Distributions from net realized gains	+	(137,499,367)	(77,932,853)
Total distributions		($181,272,871)	($117,896,583)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		15,455,017	$480,909,082	27,293,118	$793,122,741
Shares reinvested		5,632,305	173,981,894	3,628,372	102,973,212
Shares redeemed	+	(11,094,014)	(344,882,483)	(20,947,140)	(607,654,132)
Net transactions in fund shares		9,993,308	$310,008,493	9,974,350	$288,441,821
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		112,273,730	$3,530,999,471	102,299,380	$2,618,711,369
Total increase	+	9,993,308	246,636,523	9,974,350	912,288,102
End of period		122,267,038	$3,777,635,994	112,273,730	$3,530,999,471
Net investment income not yet distributed			$14,859,619		$29,935,898

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab Total Stock Market Index Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$46.25	$38.19	$37.69	$36.96	$32.53	$25.80
Income (loss) from investment operations:
Net investment income (loss)	0.44 ¹	0.80 ¹	0.75 ¹	0.72 ¹	0.60	0.57
Net realized and unrealized gains (losses)	1.31	8.19	0.75	0.83	4.49	6.70
Total from investment operations	1.75	8.99	1.50	1.55	5.09	7.27
Less distributions:
Distributions from net investment income	(0.76)	(0.74)	(0.70)	(0.61)	(0.51)	(0.54)
Distributions from net realized gains	(0.11)	(0.19)	(0.30)	(0.21)	(0.15)	—
Total distributions	(0.87)	(0.93)	(1.00)	(0.82)	(0.66)	(0.54)
Net asset value at end of period	$47.13	$46.25	$38.19	$37.69	$36.96	$32.53
Total return	3.76% ²	23.89%	4.19%	4.36%	15.93%	28.76%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.03% ³	0.05% ⁴	0.10%	0.11%	0.10%	0.10%
Net operating expenses	N/A ⁵	0.05% ⁴	0.09%	0.09%	0.09%	0.09%
Net investment income (loss)	1.84% ³	1.89%	2.03%	1.92%	1.79%	2.02%
Portfolio turnover rate	2% ²	2%	1%	2%	1%	2%
Net assets, end of period (x 1,000,000)	$7,762	$6,720	$4,850	$4,477	$4,049	$3,183

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio.

⁵

Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated.

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab Total Stock Market Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.8% of net assets

Automobiles & Components 0.9%
Other Securities		0.9	69,935,209

Banks 6.8%
Bank of America Corp.	2,699,863	1.0	80,779,901
Citigroup, Inc.	724,992	0.6	49,495,204
JPMorgan Chase & Co.	968,914	1.4	105,398,465
Wells Fargo & Co.	1,240,557	0.8	64,459,342
Other Securities		3.0	227,013,829
		6.8	527,146,741

Capital Goods 7.4%
3M Co.	168,251	0.4	32,706,312
General Electric Co.	2,459,976	0.4	34,611,862
Honeywell International, Inc.	212,125	0.4	30,690,245
The Boeing Co.	156,234	0.7	52,113,413
Other Securities		5.5	426,966,888
		7.4	577,088,720

Commercial & Professional Services 1.0%
Other Securities		1.0	76,912,579

Consumer Durables & Apparel 1.4%
Other Securities		1.4	108,310,338

Consumer Services 2.3%
McDonald's Corp.	224,985	0.5	37,671,488
Other Securities		1.8	140,709,200
		2.3	178,380,688

Diversified Financials 5.4%
Berkshire Hathaway, Inc., Class B *	543,352	1.4	105,263,583
The Charles Schwab Corp. (b)	334,770	0.2	18,639,994
Other Securities		3.8	297,041,343
		5.4	420,944,920

Energy 6.0%
Chevron Corp.	539,258	0.9	67,466,568
Exxon Mobil Corp.	1,196,140	1.2	92,999,885
Other Securities		3.9	303,001,170
		6.0	463,467,623

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.3%
Walmart, Inc.	409,919	0.5	36,261,435
Other Securities		0.8	62,171,390
		1.3	98,432,825

Food, Beverage & Tobacco 3.6%
Altria Group, Inc.	537,081	0.4	30,135,615
PepsiCo, Inc.	401,802	0.5	40,557,894
Philip Morris International, Inc.	438,889	0.5	35,988,898
The Coca-Cola Co.	1,083,494	0.6	46,817,776
Other Securities		1.6	126,580,071
		3.6	280,080,254

Health Care Equipment & Services 6.0%
Medtronic plc	381,820	0.4	30,595,237
UnitedHealth Group, Inc.	273,230	0.8	64,591,572
Other Securities		4.8	367,376,103
		6.0	462,562,912

Household & Personal Products 1.3%
The Procter & Gamble Co.	710,645	0.7	51,408,059
Other Securities		0.6	53,674,173
		1.3	105,082,232

Insurance 2.8%
Other Securities		2.8	217,954,688

Materials 3.3%
DowDuPont, Inc.	662,424	0.5	41,891,694
Other Securities		2.8	212,417,388
		3.3	254,309,082

Media 2.5%
Comcast Corp., Class A	1,311,334	0.5	41,162,774
The Walt Disney Co.	424,453	0.5	42,585,369
Other Securities		1.5	109,835,122
		2.5	193,583,265

Pharmaceuticals, Biotechnology & Life Sciences 7.6%
AbbVie, Inc.	451,446	0.6	43,587,111
Amgen, Inc.	188,931	0.4	32,964,681
Johnson & Johnson	758,603	1.2	95,955,694
Merck & Co., Inc.	763,489	0.6	44,946,597

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab Total Stock Market Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Pfizer, Inc.	1,682,240	0.8	61,586,806
Other Securities		4.0	315,375,999
		7.6	594,416,888

Real Estate 3.7%
Other Securities		3.7	285,418,638

Retailing 6.0%
Amazon.com, Inc. *	113,565	2.3	177,857,553
Booking Holdings, Inc. *	13,799	0.4	30,054,222
Netflix, Inc. *	122,675	0.5	38,331,031
The Home Depot, Inc.	329,852	0.8	60,956,650
Other Securities		2.0	158,972,947
		6.0	466,172,403

Semiconductors & Semiconductor Equipment 3.8%
Intel Corp.	1,323,420	0.9	68,314,940
NVIDIA Corp.	170,885	0.5	38,432,036
Other Securities		2.4	186,349,636
		3.8	293,096,612

Software & Services 14.4%
Adobe Systems, Inc. *	138,890	0.4	30,778,024
Alphabet, Inc., Class A *	84,222	1.1	85,786,845
Alphabet, Inc., Class C *	86,025	1.1	87,515,813
Facebook, Inc., Class A *	677,320	1.5	116,499,040
International Business Machines Corp.	242,084	0.5	35,092,497
MasterCard, Inc., Class A	260,093	0.6	46,366,779
Microsoft Corp.	2,175,410	2.6	203,444,343
Oracle Corp.	853,247	0.5	38,967,790
Visa, Inc., Class A	508,497	0.8	64,518,099
Other Securities		5.3	408,635,588
		14.4	1,117,604,818

Technology Hardware & Equipment 5.6%
Apple, Inc.	1,434,322	3.1	237,036,054
Cisco Systems, Inc.	1,363,559	0.8	60,392,028
Other Securities		1.7	135,987,475
		5.6	433,415,557

Telecommunication Services 1.7%
AT&T, Inc.	1,734,681	0.7	56,724,069
Verizon Communications, Inc.	1,164,058	0.7	57,446,262
Other Securities		0.3	18,104,777
		1.7	132,275,108

Transportation 2.1%
Union Pacific Corp.	222,149	0.4	29,685,771
Other Securities		1.7	131,779,870
		2.1	161,465,641

Utilities 2.9%
Other Securities		2.9	226,739,237
Total Common Stock
(Cost $4,739,076,245)			7,744,796,978

Security	Number of Shares	% of Net Assets	Value ($)
Rights 0.0% of net assets

Media 0.0%
Other Securities		0.0	1,566

Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Other Securities		0.0	87,730

Technology Hardware & Equipment 0.0%
Other Securities		0.0	—
Total Rights
(Cost $34,633)			89,296

Other Investment Company 0.4% of net assets

Securities Lending Collateral 0.4%
Wells Fargo Government Money Market Fund, Select Class 1.59% (d)	30,012,920	0.4	30,012,920
Total Other Investment Company
(Cost $30,012,920)			30,012,920
Security Rate, Maturity Date	Face Amount ($)	% of Net Assets	Value ($)
Short-Term Investment 0.5% of net assets

Time Deposit 0.5%
BNP Paribas 1.05%, 05/01/18 (e)	44,192,525	0.5	44,192,525
Total Short-Term Investment
(Cost $44,192,525)			44,192,525

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
Russell 2000 Index, e-mini, expires 06/15/18	32	2,470,080	(19,674)
S&P 500 Index, e-mini, expires 06/15/18	107	14,161,484	(22,060)
Net Unrealized Depreciation			(41,734)

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 $28,993,091.
(b)	Issuer is affiliated with the fund’s investment adviser.
(c)	Fair-valued by management in accordance with procedures approved by fund’s Board of Trustees.
(d)	The rate shown is the 7-day yield.
(e)	The rate shown is the current daily overnight rate.

CVR —	Contingent Value Rights
REIT —	Real Estate Investment Trust

₄₇

Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab Total Stock Market Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

	Balance of Shares Held at 10/31/17	Gross Purchases	Gross Sales	Balance of Shares Held at 04/30/18	Net Change in Unrealized Appreciation (depreciation)	Realized Gains (Losses)	Dividends Received
The Charles Schwab Corp.	292,470	42,300	—	334,770	$3,332,011	$—	$55,275

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$7,459,378,340	$—	$—	$7,459,378,340
Real Estate	285,418,638	—	— ^*	285,418,638
Rights ¹
Media	—	—	1,566	1,566
Pharmaceuticals, Biotechnology & Life Sciences	—	—	87,730 ^*	87,730
Technology Hardware & Equipment	—	—	— ^*	—
Other Investment Company¹	30,012,920	—	—	30,012,920
Short-Term Investment¹	—	44,192,525	—	44,192,525
Liabilities
Futures Contracts²	(41,734)	—	—	(41,734)
Total	$7,774,768,164	$44,192,525	$89,296	$7,819,049,985

*	Level 3 amount shown includes securities determined to have no value at April 30, 2018.
¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₄₈

Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab Total Stock Market Index Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investment in affiliated issuer, at value (cost $9,234,989)		$18,639,994
Investments in unaffiliated issuers, at value (cost $4,774,068,414) including securities on loan of $28,993,091		7,770,438,805
Collateral invested for securities on loan, at value (cost $30,012,920)		30,012,920
Deposit with broker for futures contracts		3,043,100
Receivables:
Fund shares sold		6,559,808
Dividends		5,960,350
Income from securities on loan		99,640
Interest		1,289
Foreign tax reclaims	+	159
Total assets		7,834,756,065
Liabilities
Collateral held for securities on loan		30,012,920
Payables:
Investments bought		39,874,514
Investment adviser fees		190,833
Fund shares redeemed		2,436,901
Variation margin on futures contracts	+	142,374
Total liabilities		72,657,542
Net Assets
Total assets		7,834,756,065
Total liabilities	–	72,657,542
Net assets		$7,762,098,523
Net Assets by Source
Capital received from investors		4,741,844,125
Net investment income not yet distributed		42,600,271
Net realized capital losses		(28,079,535)
Net unrealized capital appreciation		3,005,733,662

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$7,762,098,523		164,688,622		$47.13

₄₉

Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab Total Stock Market Index Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends received from affiliated issuer		$55,275
Dividends received from unaffiliated issuers (net of foreign withholding tax of $4,294)		68,361,748
Interest		124,870
Securities on loan, net	+	647,499
Total investment income		69,189,392
Expenses
Investment adviser fees		1,107,308
Total expenses	–	1,107,308
Net investment income		68,082,084
Realized and Unrealized Gains (Losses)
Net realized losses on unaffiliated issuers		(2,630,947)
Net realized gains on futures contracts	+	4,155,952
Net realized gains		1,525,005
Net change in unrealized appreciation (depreciation) on affiliated issuer		3,332,011
Net change in unrealized appreciation (depreciation) on unaffiliated issuers		178,934,107
Net change in unrealized appreciation (depreciation) on futures contracts	+	(120,807)
Net change in unrealized appreciation (depreciation)	+	182,145,311
Net realized and unrealized gains		183,670,316
Increase in net assets resulting from operations		$251,752,400

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Schwab Equity Index Funds | Semiannual Report

See financial notes

Table of Contents

Schwab Total Stock Market Index Fund

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$68,082,084	$110,463,299
Net realized gains		1,525,005	14,786,674
Net change in unrealized appreciation (depreciation)	+	182,145,311	1,093,607,653
Increase in net assets from operations		251,752,400	1,218,857,626
Distributions to Shareholders
Distributions from net investment income		(113,653,133)	(94,787,157)
Distributions from net realized gains	+	(15,880,875)	(24,251,175)
Total distributions		($129,534,008)	($119,038,332)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		28,202,253	$1,342,301,061	34,191,936	$1,448,154,476
Shares reinvested		2,718,455	129,126,608	2,290,335	91,911,175
Shares redeemed	+	(11,533,599)	(551,631,102)	(18,204,725)	(770,224,655)
Net transactions in fund shares		19,387,109	$919,796,567	18,277,546	$769,840,996
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		145,301,513	$6,720,083,564	127,023,967	$4,850,423,274
Total increase	+	19,387,109	1,042,014,959	18,277,546	1,869,660,290
End of period		164,688,622	$7,762,098,523	145,301,513	$6,720,083,564
Net investment income not yet distributed			$42,600,271		$88,171,320

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Growth Index Fund

Financial Statements

Financial Highlights

	12/20/17 ¹– 4/30/18*
Per-Share Data
Net asset value at beginning of period	$40.00
Income (loss) from investment operations:
Net investment income (loss)²	0.17
Net realized and unrealized gains (losses)	0.29 ³
Total from investment operations	0.46
Net asset value at end of period	$40.46
Total return	1.15% ⁴
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.04% ⁵^,⁶
Net operating expenses	— ⁵^,⁶
Net investment income (loss)	1.19% ⁵
Portfolio turnover rate	3% ⁴
Net assets, end of period (x 1,000,000)	$56

*	Unaudited.

Commencement of operations.

Calculated based on the average shares outstanding during the period.

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.

⁴

Not annualized.

⁵

Annualized.

⁶

The investment adviser voluntarily agreed to waive the fund’s management fees to 0.00% beginning with the fund’s commencement of operations through June 30, 2018 (see financial note 4).

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Growth Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.6% of net assets

Automobiles & Components 0.7%
Other Securities		0.7	412,869

Banks 0.3%
Other Securities		0.3	154,751

Capital Goods 8.3%
3M Co.	2,514	0.9	488,696
Caterpillar, Inc.	2,234	0.6	322,500
Honeywell International, Inc.	1,904	0.5	275,471
Lockheed Martin Corp.	964	0.5	309,290
The Boeing Co.	2,412	1.4	804,547
Other Securities		4.4	2,475,876
		8.3	4,676,380

Commercial & Professional Services 1.1%
Other Securities		1.1	615,761

Consumer Durables & Apparel 1.5%
NIKE, Inc., Class B	5,652	0.7	386,540
Other Securities		0.8	436,124
		1.5	822,664

Consumer Services 3.5%
McDonald's Corp.	3,457	1.0	578,840
Starbucks Corp.	5,931	0.6	341,448
Other Securities		1.9	1,054,752
		3.5	1,975,040

Diversified Financials 2.1%
The Charles Schwab Corp. (a)	4,048	0.4	225,393
Other Securities		1.7	941,178
		2.1	1,166,571

Energy 0.9%
Other Securities		0.9	504,733

Food & Staples Retailing 1.1%
Costco Wholesale Corp.	1,892	0.7	373,027
Other Securities		0.4	245,468
		1.1	618,495

Security	Number of Shares	% of Net Assets	Value ($)
Food, Beverage & Tobacco 4.1%
Altria Group, Inc.	8,265	0.8	463,749
PepsiCo, Inc.	5,380	1.0	543,057
The Coca-Cola Co.	12,432	1.0	537,187
Other Securities		1.3	744,488
		4.1	2,288,481

Health Care Equipment & Services 5.7%
Becton, Dickinson & Co.	1,145	0.5	265,491
Stryker Corp.	1,475	0.4	249,894
UnitedHealth Group, Inc.	4,154	1.7	982,006
Other Securities		3.1	1,732,669
		5.7	3,230,060

Household & Personal Products 0.9%
Other Securities		0.9	512,785

Insurance 1.1%
Other Securities		1.1	631,352

Materials 3.5%
DowDuPont, Inc.	4,842	0.5	306,208
Monsanto Co.	1,898	0.4	237,952
Other Securities		2.6	1,418,645
		3.5	1,962,805

Media 2.6%
Comcast Corp., Class A	18,613	1.0	584,262
The Walt Disney Co.	4,456	0.8	447,070
Other Securities		0.8	455,473
		2.6	1,486,805

Pharmaceuticals, Biotechnology & Life Sciences 6.8%
AbbVie, Inc.	6,903	1.2	666,485
Biogen, Inc. *	865	0.4	236,664
Celgene Corp. *	3,241	0.5	282,291
Eli Lilly & Co.	4,238	0.6	343,575
Gilead Sciences, Inc.	4,037	0.5	291,593
Other Securities		3.6	2,029,938
		6.8	3,850,546

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Growth Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Real Estate 2.3%
American Tower Corp.	1,830	0.4	249,539
Other Securities		1.9	1,063,661
		2.3	1,313,200

Retailing 10.8%
Amazon.com, Inc. *	1,743	4.8	2,729,765
Booking Holdings, Inc. *	213	0.8	463,914
Lowe's Cos., Inc.	3,617	0.5	298,149
Netflix, Inc. *	1,777	1.0	555,242
The Home Depot, Inc.	5,109	1.7	944,143
The TJX Cos., Inc.	2,761	0.4	234,271
Other Securities		1.6	825,331
		10.8	6,050,815

Semiconductors & Semiconductor Equipment 4.8%
Broadcom, Inc.	1,751	0.7	401,714
NVIDIA Corp.	2,509	1.0	564,274
Texas Instruments, Inc.	4,271	0.8	433,208
Other Securities		2.3	1,292,174
		4.8	2,691,370

Software & Services 26.1%
Accenture plc, Class A	2,683	0.7	405,670
Adobe Systems, Inc. *	2,139	0.8	474,002
Alphabet, Inc., Class A *	1,288	2.3	1,311,931
Alphabet, Inc., Class C *	1,311	2.4	1,333,720
Facebook, Inc., Class A *	10,244	3.1	1,761,968
International Business Machines Corp.	2,521	0.6	365,444
MasterCard, Inc., Class A	4,010	1.3	714,863
Microsoft Corp.	32,479	5.4	3,037,436
PayPal Holdings, Inc. *	4,905	0.6	365,962
salesforce.com, Inc. *	2,975	0.6	359,945
Visa, Inc., Class A	7,873	1.8	998,926
Other Securities		6.5	3,571,464
		26.1	14,701,331

Technology Hardware & Equipment 7.6%
Apple, Inc.	22,005	6.5	3,636,546
Other Securities		1.1	632,114
		7.6	4,268,660

Security	Number of Shares	% of Net Assets	Value ($)
Telecommunication Services 0.9%
Verizon Communications, Inc.	9,002	0.8	444,249
Other Securities		0.1	77,629
		0.9	521,878

Transportation 2.9%
FedEx Corp.	1,075	0.5	265,740
Union Pacific Corp.	3,097	0.7	413,852
United Parcel Service, Inc., Class B	2,991	0.6	339,479
Other Securities		1.1	596,087
		2.9	1,615,158

Utilities 0.0%
Other Securities		0.0	7,471
Total Common Stock
(Cost $56,941,321)			56,079,981

Other Investment Company 0.4% of net assets

Money Market Fund 0.4%
Other Securities		0.4	212,558
Total Other Investment Company
(Cost $212,558)			212,558

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)	The rate shown is the 7-day yield.

	Balance of Shares Held at 12/20/17^(a)	Gross Purchases	Gross Sales	Balance of Shares Held at 04/30/18	Net Change in Unrealized Appreciation (depreciation)	Realized Gains (Losses)	Dividends Received
The Charles Schwab Corp.	—	4,048	—	4,048	$10,330	$—	$228

^(a)	Commencement of operations.

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Growth Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (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
Assets
Common Stock¹	$56,079,981	$—	$—	$56,079,981
Other Investment Company¹	212,558	—	—	212,558
Liabilities
Futures Contracts²	(3,867)	—	—	(3,867)
Total	$56,288,672	$—	$—	$56,288,672

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₅₅

Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Growth Index Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investment in affiliated issuer, at value (cost $215,063)		$225,393
Investments in unaffiliated issuers, at value (cost $56,938,816)		56,067,146
Deposit with broker for futures contracts		11,600
Receivables:
Investments sold		40,250
Fund shares sold		1,350,452
Dividends	+	29,016
Total assets		57,723,857
Liabilities
Payables:
Investments bought		1,377,244
Fund shares redeemed		37,938
Variation margin on futures contracts	+	1,485
Total liabilities		1,416,667
Net Assets
Total assets		57,723,857
Total liabilities	–	1,416,667
Net assets		$56,307,190
Net Assets by Source
Capital received from investors		57,000,987
Net investment income not yet distributed		158,340
Net realized capital gains		13,070
Net unrealized capital depreciation		(865,207)

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$56,307,190		1,391,845		$40.46

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Growth Index Fund

Statement of Operations

For the period December 20, 2017* through April 30, 2018; unaudited

Investment Income
Dividends received from affiliated issuer		$228
Dividends received from unaffiliated issuers (net of foreign withholding tax of $6)	+	158,112
Total investment income		158,340
Expenses
Investment adviser fees		5,330
Total expenses		5,330
Expense reduction by CSIM and its affiliates	–	5,330
Net expenses	–	—
Net investment income		158,340
Realized and Unrealized Gains (Losses)
Net realized gains on investments		16,977
Net realized losses on futures contracts	+	(3,907)
Net realized gains		13,070
Net change in unrealized appreciation (depreciation) on affiliated issuer		10,330
Net change in unrealized appreciation (depreciation) on unaffiliated issuers		(871,670)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(3,867)
Net change in unrealized appreciation (depreciation)	+	(865,207)
Net realized and unrealized losses		(852,137)
Decrease in net assets resulting from operations		($693,797)

*	Commencement of operations.

₅₇

Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Growth Index Fund

Statement of Changes in Net Assets

For the current period only. Because the fund commenced operations on December 20, 2017, it has no prior report period

Figures for the current period are unaudited

Operations
	12/20/17*-4/30/18
Net investment income		$158,340
Net realized gains		13,070
Net change in unrealized appreciation (depreciation)	+	(865,207)
Decrease in net assets from operations		(693,797)

Transactions in Fund Shares
		12/20/17*-4/30/18
		SHARES	VALUE
Shares sold		1,481,951	$60,704,279
Shares redeemed	+	(90,106)	(3,703,292)
Net transactions in fund shares		1,391,845	$57,000,987
Shares Outstanding and Net Assets
		12/20/17*-4/30/18
		SHARES	NET ASSETS
Beginning of period		—	$—
Total increase	+	1,391,845	56,307,190
End of period		1,391,845	$56,307,190
Net investment income not yet distributed			$158,340

*	Commencement of operations.

₅₈

Schwab Equity Index Funds | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value Index Fund

Financial Statements

Financial Highlights

	12/20/17 ¹– 4/30/18*
Per-Share Data
Net asset value at beginning of period	$40.00
Income (loss) from investment operations:
Net investment income (loss)²	0.33
Net realized and unrealized gains (losses)	(1.22)
Total from investment operations	(0.89)
Net asset value at end of period	$39.11
Total return	(2.23%) ³
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.04% ⁴^,⁵
Net operating expenses	— ⁴^,⁵
Net investment income (loss)	2.32% ⁴
Portfolio turnover rate	4% ³
Net assets, end of period (x 1,000,000)	$49

*	Unaudited.

Commencement of operations.

Calculated based on the average shares outstanding during the period.

Not annualized.

⁴

Annualized.

⁵

The investment adviser voluntarily agreed to waive the fund’s management fees to 0.00% beginning with the fund’s commencement of operations through June 30, 2018 (see financial note 4).

₅₉

Schwab Equity Index Funds | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.6% of net assets

Automobiles & Components 1.0%
General Motors Co.	5,310	0.4	195,089
Other Securities		0.6	287,996
		1.0	483,085

Banks 12.8%
Bank of America Corp.	38,642	2.4	1,156,169
Citigroup, Inc.	10,396	1.4	709,735
JPMorgan Chase & Co.	13,957	3.1	1,518,242
The PNC Financial Services Group, Inc.	1,925	0.6	280,299
U.S. Bancorp	6,308	0.6	318,239
Wells Fargo & Co.	17,897	1.9	929,928
Other Securities		2.8	1,393,070
		12.8	6,305,682

Capital Goods 6.1%
General Electric Co.	29,077	0.8	409,113
United Technologies Corp.	3,010	0.7	361,651
Other Securities		4.6	2,220,105
		6.1	2,990,869

Commercial & Professional Services 0.5%
Other Securities		0.5	229,383

Consumer Durables & Apparel 1.1%
Other Securities		1.1	538,188

Consumer Services 0.8%
Other Securities		0.8	383,260

Diversified Financials 9.3%
American Express Co.	2,926	0.6	288,942
Berkshire Hathaway, Inc., Class B *	7,786	3.1	1,508,382
BlackRock, Inc.	503	0.5	262,314
CME Group, Inc.	1,372	0.4	216,337
Morgan Stanley	5,165	0.5	266,617
The Bank of New York Mellon Corp.	3,984	0.4	217,168
The Charles Schwab Corp. (a)	949	0.1	52,840
The Goldman Sachs Group, Inc.	1,424	0.7	339,382
Other Securities		3.0	1,432,828
		9.3	4,584,810

Security	Number of Shares	% of Net Assets	Value ($)
Energy 11.6%
Chevron Corp.	7,645	1.9	956,466
ConocoPhillips	4,774	0.6	312,697
EOG Resources, Inc.	2,120	0.5	250,520
Exxon Mobil Corp.	17,146	2.7	1,333,102
Occidental Petroleum Corp.	3,097	0.5	239,274
Phillips 66	1,716	0.4	191,008
Schlumberger Ltd.	5,609	0.8	384,553
Valero Energy Corp.	1,771	0.4	196,457
Other Securities		3.8	1,866,233
		11.6	5,730,310

Food & Staples Retailing 1.6%
Walmart, Inc.	5,803	1.0	513,333
Other Securities		0.6	276,394
		1.6	789,727

Food, Beverage & Tobacco 3.5%
Mondelez International, Inc., Class A	5,831	0.5	230,324
Philip Morris International, Inc.	5,716	1.0	468,712
Other Securities		2.0	1,004,276
		3.5	1,703,312

Health Care Equipment & Services 6.0%
Abbott Laboratories	6,842	0.8	397,726
Anthem, Inc.	1,036	0.5	244,486
CVS Health Corp.	4,122	0.6	287,839
Danaher Corp.	2,482	0.5	248,994
Medtronic plc	5,092	0.8	408,022
Other Securities		2.8	1,357,705
		6.0	2,944,772

Household & Personal Products 2.0%
The Procter & Gamble Co.	9,688	1.4	700,830
Other Securities		0.6	274,254
		2.0	975,084

Insurance 4.6%
Chubb Ltd.	1,875	0.5	254,381
Other Securities		4.1	2,014,301
		4.6	2,268,682

₆₀

Schwab Equity Index Funds | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Materials 2.9%
DowDuPont, Inc.	4,933	0.6	311,963
Other Securities		2.3	1,114,628
		2.9	1,426,591

Media 2.3%
The Walt Disney Co.	1,916	0.4	192,232
Time Warner, Inc.	3,149	0.6	298,525
Other Securities		1.3	634,386
		2.3	1,125,143

Pharmaceuticals, Biotechnology & Life Sciences 8.3%
Allergan plc	1,363	0.4	209,425
Amgen, Inc.	2,069	0.7	360,999
Johnson & Johnson	9,247	2.4	1,169,653
Merck & Co., Inc.	10,482	1.3	617,075
Pfizer, Inc.	23,956	1.8	877,029
Other Securities		1.7	828,069
		8.3	4,062,250

Real Estate 4.6%
Other Securities		4.6	2,255,646

Retailing 1.5%
Other Securities		1.5	738,617

Semiconductors & Semiconductor Equipment 3.1%
Intel Corp.	19,086	2.0	985,219
QUALCOMM, Inc.	5,964	0.6	304,224
Other Securities		0.5	226,718
		3.1	1,516,161

Software & Services 2.6%
Oracle Corp.	10,841	1.0	495,108
Other Securities		1.6	798,039
		2.6	1,293,147

Technology Hardware & Equipment 3.3%
Cisco Systems, Inc.	20,068	1.8	888,812
Other Securities		1.5	745,556
		3.3	1,634,368

Security	Number of Shares	% of Net Assets	Value ($)
Telecommunication Services 2.7%
AT&T, Inc.	24,879	1.7	813,543
Verizon Communications, Inc.	8,258	0.8	407,532
Other Securities		0.2	128,927
		2.7	1,350,002

Transportation 1.4%
Other Securities		1.4	685,264

Utilities 6.0%
Duke Energy Corp.	2,845	0.5	228,055
NextEra Energy, Inc.	1,888	0.6	309,462
Other Securities		4.9	2,395,788
		6.0	2,933,305
Total Common Stock
(Cost $50,254,689)			48,947,658

Other Investment Company 0.2% of net assets

Money Market Fund 0.2%
Other Securities		0.2	117,544
Total Other Investment Company
(Cost $117,544)			117,544

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)	The rate shown is the 7-day yield.

REIT —

Real Estate Investment Trust

	Balance of Shares Held at 12/20/17^(a)	Gross Purchases	Gross Sales	Balance of Shares Held at 04/30/18	Net Change in Unrealized Appreciation (depreciation)	Realized Gains (Losses)	Dividends Received
The Charles Schwab Corp.	—	949	—	949	$3,034	$—	$49

^(a)	Commencement of operations.

₆₁

Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Value Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (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
Assets
Common Stock¹	$48,947,658	$—	$—	$48,947,658
Other Investment Company¹	117,544	—	—	117,544
Liabilities
Futures Contracts²	(856)	—	—	(856)
Total	$49,064,346	$—	$—	$49,064,346

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₆₂

Schwab Equity Index Funds | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value Index Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investment in affiliated issuer, at value (cost $49,806)		$52,840
Investments in unaffiliated issuers, at value (cost $50,322,427)		49,012,362
Deposit with broker for futures contracts		12,000
Receivables:
Fund shares sold		347,051
Dividends	+	49,704
Total assets		49,473,957
Liabilities
Payables:
Investments bought		277,913
Fund shares redeemed		51,018
Variation margin on futures contracts	+	2,367
Total liabilities		331,298
Net Assets
Total assets		49,473,957
Total liabilities	–	331,298
Net assets		$49,142,659
Net Assets by Source
Capital received from investors		50,205,159
Net investment income not yet distributed		262,724
Net realized capital losses		(17,337)
Net unrealized capital depreciation		(1,307,887)

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$49,142,659		1,256,575		$39.11

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Table of Contents

Schwab U.S. Large-Cap Value Index Fund

Statement of Operations

For the period December 20, 2017* through April 30, 2018; unaudited

Investment Income
Dividends received from affiliated issuer		$49
Dividends received from unaffiliated issuers (net of foreign withholding tax of $10)	+	262,675
Total investment income		262,724
Expenses
Investment adviser fees		4,534
Total expenses		4,534
Expense reduction by CSIM and its affiliates	–	4,534
Net expenses	–	—
Net investment income		262,724
Realized and Unrealized Gains (Losses)
Net realized losses on unaffiliated issuers		(8,175)
Net realized losses on futures contracts	+	(9,162)
Net realized losses		(17,337)
Net change in unrealized appreciation (depreciation) on affiliated issuer		3,034
Net change in unrealized appreciation (depreciation) on unaffiliated issuers		(1,310,065)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(856)
Net change in unrealized appreciation (depreciation)	+	(1,307,887)
Net realized and unrealized losses		(1,325,224)
Decrease in net assets resulting from operations		($1,062,500)

*	Commencement of operations.

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Table of Contents

Schwab U.S. Large-Cap Value Index Fund

Statement of Changes in Net Assets

For the current period only. Because the fund commenced operations on December 20, 2017, it has no prior report period

Figures for the current period are unaudited

Operations
	12/20/17*-4/30/18
Net investment income		$262,724
Net realized losses		(17,337)
Net change in unrealized appreciation (depreciation)	+	(1,307,887)
Decrease in net assets from operations		(1,062,500)

Transactions in Fund Shares
		12/20/17*-4/30/18
		SHARES	VALUE
Shares sold		1,330,106	$53,132,919
Shares redeemed	+	(73,531)	(2,927,760)
Net transactions in fund shares		1,256,575	$50,205,159
Shares Outstanding and Net Assets
		12/20/17*-4/30/18
		SHARES	NET ASSETS
Beginning of period		—	$—
Total increase	+	1,256,575	49,142,659
End of period		1,256,575	$49,142,659
Net investment income not yet distributed			$262,724

*	Commencement of operations.

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap Index Fund

Financial Statements

Financial Highlights

	12/20/17 ¹– 4/30/18*
Per-Share Data
Net asset value at beginning of period	$40.00
Income (loss) from investment operations:
Net investment income (loss)²	0.25
Net realized and unrealized gains (losses)	(0.34)
Total from investment operations	(0.09)
Net asset value at end of period	$39.91
Total return	(0.23%) ³
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.05% ⁴^,⁵
Net operating expenses	— ⁴^,⁵
Net investment income (loss)	1.73% ⁴
Portfolio turnover rate	3% ³
Net assets, end of period (x 1,000,000)	$110

*	Unaudited.

Commencement of operations.

Calculated based on the average shares outstanding during the period.

Not annualized.

⁴

Annualized.

⁵

The investment adviser voluntarily agreed to waive the fund’s management fees to 0.00% beginning with the fund’s commencement of operations through June 30, 2018 (see financial note 4).

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Table of Contents

Schwab U.S. Mid-Cap Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.6% of net assets

Automobiles & Components 1.2%
Aptiv plc	4,194	0.3	354,728
Other Securities		0.9	956,804
		1.2	1,311,532

Banks 4.8%
Fifth Third Bancorp	10,819	0.3	358,866
M&T Bank Corp.	2,223	0.4	405,186
SunTrust Banks, Inc.	7,401	0.4	494,387
Other Securities		3.7	4,035,480
		4.8	5,293,919

Capital Goods 9.7%
Cummins, Inc.	2,466	0.4	394,215
Fortive Corp.	4,778	0.3	335,941
PACCAR, Inc.	5,333	0.3	339,552
Parker-Hannifin Corp.	2,071	0.3	340,928
Rockwell Collins, Inc.	2,541	0.3	336,784
Roper Technologies, Inc.	1,565	0.4	413,457
Stanley Black & Decker, Inc.	2,396	0.3	339,250
Other Securities		7.4	8,196,100
		9.7	10,696,227

Commercial & Professional Services 2.3%
Other Securities		2.3	2,557,875

Consumer Durables & Apparel 3.3%
VF Corp.	5,074	0.4	410,334
Other Securities		2.9	3,252,792
		3.3	3,663,126

Consumer Services 3.1%
Hilton Worldwide Holdings, Inc.	4,277	0.3	337,199
Other Securities		2.8	3,040,798
		3.1	3,377,997

Diversified Financials 5.6%
Discover Financial Services	5,636	0.4	401,565
Moody's Corp.	2,587	0.4	419,611
Northern Trust Corp.	3,264	0.3	348,432
Synchrony Financial	12,152	0.4	403,082

Security	Number of Shares	% of Net Assets	Value ($)
T. Rowe Price Group, Inc.	3,700	0.4	421,134
Other Securities		3.7	4,129,102
		5.6	6,122,926

Energy 6.0%
Andeavor	2,426	0.3	335,564
Concho Resources, Inc. *	2,294	0.3	360,640
Marathon Petroleum Corp.	7,606	0.5	569,765
ONEOK, Inc.	6,079	0.3	366,077
Other Securities		4.6	5,026,303
		6.0	6,658,349

Food & Staples Retailing 0.2%
Other Securities		0.2	244,548

Food, Beverage & Tobacco 2.9%
Dr Pepper Snapple Group, Inc.	2,808	0.3	336,848
Other Securities		2.6	2,865,843
		2.9	3,202,691

Health Care Equipment & Services 5.2%
Edwards Lifesciences Corp. *	3,258	0.4	414,939
Zimmer Biomet Holdings, Inc.	3,146	0.3	362,325
Other Securities		4.5	4,946,017
		5.2	5,723,281

Household & Personal Products 0.8%
Other Securities		0.8	823,029

Insurance 4.5%
The Progressive Corp.	9,086	0.5	547,795
Other Securities		4.0	4,454,637
		4.5	5,002,432

Materials 5.6%
Other Securities		5.6	6,207,802

Media 1.8%
Other Securities		1.8	1,977,293

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Pharmaceuticals, Biotechnology & Life Sciences 4.1%
Illumina, Inc. *	2,286	0.5	550,766
Zoetis, Inc.	7,673	0.6	640,542
Other Securities		3.0	3,340,825
		4.1	4,532,133

Real Estate 9.0%
AvalonBay Communities, Inc.	2,144	0.3	349,472
Digital Realty Trust, Inc.	3,181	0.3	336,200
Prologis, Inc.	8,266	0.5	536,546
Weyerhaeuser Co.	11,695	0.4	430,142
Other Securities		7.5	8,209,323
		9.0	9,861,683

Retailing 4.8%
Dollar General Corp.	4,279	0.4	413,052
Dollar Tree, Inc. *	3,596	0.3	344,820
Ross Stores, Inc.	5,937	0.4	480,006
Other Securities		3.7	3,994,127
		4.8	5,232,005

Semiconductors & Semiconductor Equipment 3.1%
Analog Devices, Inc.	5,808	0.5	507,329
Lam Research Corp.	2,561	0.4	473,939
Other Securities		2.2	2,414,397
		3.1	3,395,665

Software & Services 9.9%
Autodesk, Inc. *	3,263	0.4	410,812
DXC Technology Co.	4,438	0.4	457,380
Fidelity National Information Services, Inc.	5,166	0.4	490,615
Fiserv, Inc. *	6,531	0.4	462,787
Red Hat, Inc. *	2,784	0.4	453,959
ServiceNow, Inc. *	2,674	0.4	444,258
Worldpay, Inc., Class A *	4,503	0.3	365,734
Other Securities		7.2	7,833,687
		9.9	10,919,232

Technology Hardware & Equipment 3.5%
Amphenol Corp., Class A	4,653	0.4	389,503
Western Digital Corp.	4,647	0.3	366,137
Other Securities		2.8	3,098,038
		3.5	3,853,678

Security	Number of Shares	% of Net Assets	Value ($)
Telecommunication Services 0.4%
Other Securities		0.4	433,761

Transportation 2.0%
Other Securities		2.0	2,238,771

Utilities 5.8%
Consolidated Edison, Inc.	4,892	0.4	391,996
Public Service Enterprise Group, Inc.	7,907	0.4	412,350
Sempra Energy	3,925	0.4	438,815
Xcel Energy, Inc.	7,996	0.3	374,533
Other Securities		4.3	4,796,406
		5.8	6,414,100
Total Common Stock
(Cost $113,264,678)			109,744,055

Other Investment Company 0.3% of net assets

Money Market Fund 0.3%
Other Securities		0.3	315,486
Total Other Investment Company
(Cost $315,486)			315,486

For the following notes, please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	The rate shown is the 7-day yield.

REIT —

Real Estate Investment Trust

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (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
Assets
Common Stock¹	$109,744,055	$—	$—	$109,744,055
Other Investment Company¹	315,486	—	—	315,486
Liabilities
Futures Contracts²	(3,324)	—	—	(3,324)
Total	$110,056,217	$—	$—	$110,056,217

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap Index Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $113,580,164)		$110,059,541
Deposit with broker for futures contracts		37,500
Receivables:
Investments sold		135,998
Fund shares sold		553,701
Dividends	+	46,865
Total assets		110,833,605
Liabilities
Payables:
Investments bought		666,621
Fund shares redeemed		9,356
Variation margin on futures contracts	+	4,120
Total liabilities		680,097
Net Assets
Total assets		110,833,605
Total liabilities	–	680,097
Net assets		$110,153,508
Net Assets by Source
Capital received from investors		113,209,295
Net investment income not yet distributed		427,356
Net realized capital gains		40,804
Net unrealized capital depreciation		(3,523,947)

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$110,153,508		2,760,187		$39.91

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap Index Fund

Statement of Operations

For the period December 20, 2017* through April 30, 2018; unaudited

Investment Income
Dividends (net of foreign withholding tax of $66)		$427,356
Expenses
Investment adviser fees		12,380
Total expenses		12,380
Expense reduction by CSIM and its affiliates	–	12,380
Net expenses	–	—
Net investment income		427,356
Realized and Unrealized Gains (Losses)
Net realized gains on investments		48,493
Net realized losses on futures contracts	+	(7,689)
Net realized gains		40,804
Net change in unrealized appreciation (depreciation) on unaffiliated issuers		(3,520,623)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(3,324)
Net change in unrealized appreciation (depreciation)	+	(3,523,947)
Net realized and unrealized losses		(3,483,143)
Decrease in net assets resulting from operations		($3,055,787)

*	Commencement of operations.

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap Index Fund

Statement of Changes in Net Assets

For the current period only. Because the fund commenced operations on December 20, 2017, it has no prior report period

Figures for the current period are unaudited

Operations
	12/20/17*-4/30/18
Net investment income		$427,356
Net realized gains		40,804
Net change in unrealized appreciation (depreciation)	+	(3,523,947)
Decrease in net assets from operations		(3,055,787)

Transactions in Fund Shares
		12/20/17*-4/30/18
		SHARES	VALUE
Shares sold		2,825,481	$115,848,655
Shares redeemed	+	(65,294)	(2,639,360)
Net transactions in fund shares		2,760,187	$113,209,295
Shares Outstanding and Net Assets
		12/20/17*-4/30/18
		SHARES	NET ASSETS
Beginning of period		—	$—
Total increase	+	2,760,187	110,153,508
End of period		2,760,187	$110,153,508
Net investment income not yet distributed			$427,356

*	Commencement of operations.

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Schwab Equity Index Funds | ��Semiannual Report

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Table of Contents

Schwab International Index Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$21.01	$17.52	$18.49	$19.42	$19.92	$16.32
Income (loss) from investment operations:
Net investment income (loss)	0.30 ¹	0.55 ¹	0.53 ¹	0.54 ¹	0.64	0.49
Net realized and unrealized gains (losses)	0.30	3.49	(1.03)	(0.86)	(0.63)	3.69
Total from investment operations	0.60	4.04	(0.50)	(0.32)	0.01	4.18
Less distributions:
Distributions from net investment income	(0.57)	(0.55)	(0.47)	(0.61)	(0.51)	(0.58)
Net asset value at end of period	$21.04	$21.01	$17.52	$18.49	$19.42	$19.92
Total return	2.87% ²	23.76%	(2.64%)	(1.53%)	0.09%	26.40%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.06% ³	0.11% ⁴	0.23%	0.23%	0.23%	0.23%
Net operating expenses	N/A ⁵	0.10% ⁴	0.19%	0.19%	0.19%	0.19%
Net investment income (loss)	2.89% ³	2.88%	3.06%	2.82%	3.42%	2.88%
Portfolio turnover rate	2% ²	3%	4%	7%	2%	5%
Net assets, end of period (x 1,000,000)	$4,545	$4,128	$2,900	$2,844	$2,699	$2,205

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio.

⁵

Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated.

₇₃

Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab International Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 98.1% of net assets

Australia 6.5%
Australia & New Zealand Banking Group Ltd.	879,777	0.4	17,685,440
BHP Billiton Ltd.	955,969	0.5	22,302,037
Commonwealth Bank of Australia	523,009	0.6	28,161,119
National Australia Bank Ltd.	803,132	0.4	17,459,315
Westpac Banking Corp.	1,023,790	0.5	21,991,461
Other Securities		4.1	187,364,453
		6.5	294,963,825

Austria 0.3%
Other Securities		0.3	11,801,417

Belgium 1.0%
Anheuser-Busch InBev S.A./N.V.	227,489	0.5	22,597,289
Other Securities		0.5	24,940,231
		1.0	47,537,520

Denmark 1.7%
Novo Nordisk A/S, Class B	556,088	0.6	26,151,659
Other Securities		1.1	51,555,904
		1.7	77,707,563

Finland 1.0%
Other Securities		1.0	46,029,799

France 11.0%
Airbus SE	174,603	0.5	20,495,439
BNP Paribas S.A.	337,635	0.6	26,065,171
L'Oreal S.A.	75,161	0.4	18,097,990
LVMH Moet Hennessy Louis Vuitton SE	83,747	0.6	29,144,945
Sanofi (a)	341,304	0.6	26,984,266
TOTAL S.A.	719,045	1.0	45,193,191
Other Securities		7.3	335,349,897
		11.0	501,330,899

Germany 9.0%
Allianz SE	134,144	0.7	31,728,249
BASF SE	275,889	0.6	28,704,431
Bayer AG	248,103	0.7	29,653,160
Daimler AG	289,363	0.5	22,749,155
SAP SE	294,859	0.7	32,760,481

Security	Number of Shares	% of Net Assets	Value ($)
Siemens AG	229,825	0.6	29,186,590
Other Securities		5.2	233,123,359
		9.0	407,905,425

Hong Kong 3.6%
AIA Group Ltd.	3,610,800	0.7	32,270,432
Other Securities		2.9	129,502,689
		3.6	161,773,121

Ireland 0.5%
Other Securities		0.5	20,929,747

Israel 0.5%
Other Securities		0.5	23,773,918

Italy 2.5%
Other Securities		2.5	113,935,010

Japan 23.9%
Honda Motor Co., Ltd.	516,639	0.4	17,765,115
Keyence Corp.	29,100	0.4	17,744,576
Mitsubishi UFJ Financial Group, Inc.	3,554,109	0.5	23,817,300
SoftBank Group Corp.	249,300	0.4	19,048,685
Sony Corp.	380,200	0.4	17,757,658
Toyota Motor Corp.	784,103	1.1	51,415,471
Other Securities		20.7	940,971,630
		23.9	1,088,520,435

Netherlands 3.6%
ASML Holding N.V.	116,156	0.5	22,114,212
ING Groep N.V.	1,159,683	0.4	19,541,250
Unilever N.V. CVA	487,930	0.6	27,972,327
Other Securities		2.1	92,790,665
		3.6	162,418,454

New Zealand 0.2%
Other Securities		0.2	7,530,161

Norway 0.7%
Other Securities		0.7	31,052,734

Portugal 0.1%
Other Securities		0.1	6,900,760

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Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab International Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Singapore 1.4%
Other Securities		1.4	62,151,525

Spain 3.2%
Banco Santander S.A.	4,856,807	0.7	31,379,449
Other Securities		2.5	113,281,972
		3.2	144,661,421

Sweden 2.5%
Other Securities		2.5	113,982,901

Switzerland 7.4%
Nestle S.A.	932,000	1.6	72,202,111
Novartis AG	667,761	1.1	51,400,431
Roche Holding AG	210,684	1.0	46,811,321
UBS Group AG *	1,087,074	0.4	18,246,419
Other Securities		3.3	148,258,625
		7.4	336,918,907

United Kingdom 17.5%
AstraZeneca plc	378,662	0.6	26,507,213
BP plc	5,931,186	1.0	44,056,601
British American Tobacco plc	687,430	0.8	37,703,802
Diageo plc	745,304	0.6	26,588,456
GlaxoSmithKline plc	1,470,884	0.6	29,501,753
Glencore plc *	3,650,455	0.4	17,584,220
HSBC Holdings plc	5,994,654	1.3	59,682,639
Lloyds Banking Group plc	21,630,559	0.4	19,185,156
Prudential plc	776,519	0.4	19,967,428
Rio Tinto plc	364,871	0.4	19,887,619
Royal Dutch Shell plc, A Shares	1,364,806	1.0	47,483,227
Royal Dutch Shell plc, B Shares	1,117,078	0.9	39,878,377
Unilever plc	369,889	0.5	20,747,824
Vodafone Group plc	7,993,256	0.5	23,326,002
Other Securities		8.1	362,976,175
		17.5	795,076,492
Total Common Stock
(Cost $3,468,765,313)			4,456,902,034

Preferred Stock 0.6% of net assets

Germany 0.5%
Other Securities		0.5	25,240,256

Italy 0.1%
Other Securities		0.1	2,566,411
Total Preferred Stock
(Cost $22,076,297)			27,806,667

Security	Number of Shares	% of Net Assets	Value ($)
Other Investment Company 0.9% of net assets

United States 0.9%
Securities Lending Collateral 0.9%
Wells Fargo Government Money Market Fund, Select Class 1.59% (c)	42,850,311	0.9	42,850,311
Total Other Investment Company
(Cost $42,850,311)			42,850,311
Security Rate, Maturity Date	Face Amount ($)	% of Net Assets	Value ($)
Short-Term Investments 0.7% of net assets

Time Deposits 0.7%
BNP Paribas 1.05%, 05/01/18 (d)	28,136,162	0.6	28,136,162
Other Securities		0.1	4,186,051
		0.7	32,322,213
Total Short-Term Investments
(Cost $32,322,213)			32,322,213

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
MSCI EAFE Index, e-mini, expires 06/15/18	534	54,107,550	60,100

At April 30, 2018, the values of certain foreign securities held by the fund aggregating $4,430,627,402 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 $40,799,182.
(b)	Fair-valued by management in accordance with procedures approved by fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.
(d)	The rate shown is the current daily overnight rate.

ADR —	American Depositary Receipt
CVA —	Dutch Certificate
REIT —	Real Estate Investment Trust
RSP —	Risparmio (Convertible Savings Shares)
SDR —	Swedish Depositary Receipt

₇₅

Schwab Equity Index Funds | Semiannual Report

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Table of Contents

Schwab International Index Fund

Condensed Portfolio Holdings as of April 30, 2018 (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
Assets
Common Stock¹	$—	$2,299,085,655	$—	$2,299,085,655
Denmark	1,999,869	75,707,694	—	77,707,563
France	2,913,427	498,417,472	—	501,330,899
Germany	1,754,431	406,150,994	—	407,905,425
Hong Kong	6,283,670	155,489,451	—	161,773,121
Ireland	8,687,677	12,242,070	—	20,929,747
Israel	13,039,386	10,734,532	—	23,773,918
Netherlands	15,382,756	147,035,698	—	162,418,454
Portugal	—	6,900,760	— ^*	6,900,760
United Kingdom	3,971,970	791,056,409	48,113	795,076,492
Preferred Stock¹	—	27,806,667	—	27,806,667
Other Investment Company¹	42,850,311	—	—	42,850,311
Short-Term Investments¹	—	32,322,213	—	32,322,213
Futures Contracts²	60,100	—	—	60,100
Total	$96,943,597	$4,462,949,615	$48,113	$4,559,941,325

*	Level 3 amount shown includes securities determined to have no value at April 30, 2018.
¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts 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 $63,238,218 and $10,848,566 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended April 30, 2018. The transfers between Level 1 and Level 2 were primarily due to the use of international fair valuation procedures approved by the Board of Trustees. (See financial note2(a) for additional information). There were no transfers in or out of Level 3 during the period. Fund Investments in underlying mututal funds are classified as Level 1, without consideration to the classification level of the investments held by the underlying mutual funds, which could be Level 1, Level 2 or Level 3.

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Schwab International Index Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $3,523,163,823) including securities on loan of $40,799,182		$4,517,030,914
Collateral invested for securities on loan, at value (cost $42,850,311)		42,850,311
Foreign currency, at value (cost $146,440)		144,656
Deposit with broker for futures contracts		2,358,000
Receivables:
Dividends		17,999,267
Foreign tax reclaims		6,891,239
Fund shares sold		5,981,631
Income from securities on loan		234,421
Interest	+	821
Total assets		4,593,491,260
Liabilities
Collateral held for securities on loan		42,850,311
Payables:
Investments bought		546,525
Investment adviser fees		222,434
Fund shares redeemed		4,713,089
Variation margin on futures contracts	+	217,449
Total liabilities		48,549,808
Net Assets
Total assets		4,593,491,260
Total liabilities	–	48,549,808
Net assets		$4,544,941,452
Net Assets by Source
Capital received from investors		3,663,536,937
Net investment income not yet distributed		21,272,218
Net realized capital losses		(133,386,896)
Net unrealized capital appreciation		993,519,193

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$4,544,941,452		215,990,896		$21.04

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Schwab International Index Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends (net of foreign withholding tax of $6,905,237)		$63,582,421
Interest		60,438
Securities on loan, net	+	573,954
Total investment income		64,216,813
Expenses
Investment adviser fees		1,304,104
Total expenses	–	1,304,104
Net investment income		62,912,709
Realized and Unrealized Gains (Losses)
Net realized losses on investments (net of foreign capital gain tax paid of $66)		(12,417,667)
Net realized gains on futures contracts		730,719
Net realized gains on foreign currency transactions	+	260,201
Net realized losses		(11,426,747)
Net change in unrealized appreciation (depreciation) on investments		66,686,897
Net change in unrealized appreciation (depreciation) on futures contracts		(63,014)
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	(363,776)
Net change in unrealized appreciation (depreciation)	+	66,260,107
Net realized and unrealized gains		54,833,360
Increase in net assets resulting from operations		$117,746,069

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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
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$62,912,709	$99,012,739
Net realized losses		(11,426,747)	(7,708,097)
Net change in unrealized appreciation (depreciation)	+	66,260,107	643,741,968
Increase in net assets from operations		117,746,069	735,046,610
Distributions to Shareholders
Distributions from net investment income		($112,933,005)	($92,318,949)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		35,146,447	$742,527,121	67,629,186	$1,284,202,843
Shares reinvested		5,158,241	107,188,259	4,417,331	75,315,502
Shares redeemed	+	(20,768,321)	(437,354,755)	(41,099,900)	(774,927,371)
Net transactions in fund shares		19,536,367	$412,360,625	30,946,617	$584,590,974
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		196,454,529	$4,127,767,763	165,507,912	$2,900,449,128
Total increase	+	19,536,367	417,173,689	30,946,617	1,227,318,635
End of period		215,990,896	$4,544,941,452	196,454,529	$4,127,767,763
Net investment income not yet distributed			$21,272,218		$71,292,514

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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 2035 Fund
Schwab Small-Cap Index Fund	Schwab Target 2040 Fund
Schwab Total Stock Market Index Fund	Schwab Target 2045 Fund
Schwab U.S. Large-Cap Growth Index Fund	Schwab Target 2050 Fund
Schwab U.S. Large-Cap Value Index Fund	Schwab Target 2055 Fund
Schwab U.S. Mid-Cap 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 Balanced Fund™	Schwab Target 2015 Index Fund
Schwab Core Equity Fund™	Schwab Target 2020 Index Fund
Schwab Dividend Equity Fund™	Schwab Target 2025 Index Fund
Schwab Large-Cap Growth Fund™	Schwab Target 2030 Index Fund
Schwab Small-Cap Equity Fund™	Schwab Target 2035 Index Fund
Schwab Hedged Equity Fund™	Schwab Target 2040 Index Fund
Schwab Health Care Fund™	Schwab Target 2045 Index Fund
Schwab ^® International Core Equity Fund	Schwab Target 2050 Index Fund
Schwab Target 2010 Fund	Schwab Target 2055 Index Fund
Schwab Target 2015 Fund	Schwab Target 2060 Index Fund
Schwab Target 2020 Fund	Schwab^® Monthly Income Fund – Moderate Payout
Schwab Target 2025 Fund	Schwab^® Monthly Income Fund – Enhanced Payout
Schwab Target 2030 Fund	Schwab^® Monthly Income Fund – Maximum Payout

SCHWAB INVESTMENTS (ORGANIZED OCTOBER 26, 1990)
Schwab 1000 Index Fund	Schwab^® Short-Term Bond Index Fund
Schwab Intermediate-Term Bond Fund™	Schwab Tax-Free Bond Fund™
Schwab GNMA Fund™	Schwab California Tax-Free Bond Fund™
Schwab ^® Treasury Inflation Protected Securities Index Fund	Schwab Global Real Estate Fund™
Schwab ^® U.S. Aggregate Bond 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.

The Schwab U.S. Large-Cap Growth Index Fund, Schwab U.S. Large-Cap Value Index Fund and Schwab U.S. Mid-Cap Index Fund commenced operations on December 20, 2017.

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).

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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.

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.

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Schwab Equity Index Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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 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, 2018 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 agreement 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%.

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

As of April 30, 2018, 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, 2018, 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, Schwab U.S. Large-Cap Growth Fund, Schwab U.S. Large-Cap Value Index Fund and Schwab U.S. Mid-Cap 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 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.

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, in the form of cash or non-cash income such as in the form of additional securities, 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 the investment adviser. For additional details, see Affiliates and Affiliated Transactions in financial note 4, Other Affiliated Transactions.

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Schwab Equity Index Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(e) Expenses:

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, CSIM pays 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.

(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, 2018, 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’ prospectuses, 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 the index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.

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Schwab Equity Index Funds

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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.

Sampling Index Tracking Risk. To the extent a fund uses sampling techniques, the fund will not fully replicate its 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 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.

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.

Value Investing Risk. A fund may emphasize “value” style of investing, which targets undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” securities may not move in tandem with the returns on other styles of investing or the stock market in general.

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. There is a risk that investments in securities denominated in, and/or receiving revenues in, foreign currencies will decline in value relative to the U.S. dollar. To the extent a fund’s investments in a single country or a limited number of countries represent a large 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.

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.

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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’ prospectuses 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, serves as each fund’s investment adviser and administrator pursuant to an Advisory Agreement between CSIM and each trust.

For its advisory and administrative services to the funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:

Schwab S&P 500 Index Fund	Schwab 1000 Index Fund	Schwab Small-Cap Index Fund	Schwab Total Stock Market Index Fund	Schwab U.S. Large-Cap Growth Index Fund*	Schwab U.S. Large-Cap Value Index Fund*	Schwab U.S. Mid-Cap Index Fund*	Schwab International Index Fund
0.03%	0.05%	0.05%	0.03%	0.04%	0.04%	0.05%	0.06%

*The investment adviser voluntarily agreed to waive each fund’s management fees to 0.00% beginning with each fund’s commencement of operations through June 30, 2018.

Investments from Affiliates

Certain funds in the Fund Complex (for definition refer to Trustees and Officers section) may own shares of other funds in the Fund Complex. The table below reflects the percentages of shares of each fund in this report that are owned by other funds in the Fund Complex as of April 30, 2018, as applicable:

	Underlying Funds
	Schwab S&P 500 Index Fund	Schwab 1000 Index Fund	Schwab Small-Cap Index Fund	Schwab U.S. Mid-Cap Index Fund	Schwab International Index Fund
Schwab Balanced Fund	—%	—%	—%	—%	—%
Schwab MarketTrack All Equity Portfolio	0.7%	—%	3.1%	—%	2.1%
Schwab MarketTrack Balanced Portfolio	0.3%	—%	1.5%	—%	0.8%
Schwab MarketTrack Conservative Portfolio	0.1%	—%	0.4%	—%	0.3%
Schwab MarketTrack Growth Portfolio	0.7%	—%	3.0%	—%	1.6%
Schwab MarketTrack Growth Portfolio II	0.0%*	0.0%*	0.1%	—%	0.1%
Schwab Target 2010 Fund	0.0%*	—%	—%	0.4%	—%
Schwab Target 2015 Fund	0.0%*	—%	—%	0.7%	—%
Schwab Target 2020 Fund	0.2%	—%	—%	4.7%	—%
Schwab Target 2025 Fund	0.2%	—%	—%	5.7%	—%
Schwab Target 2030 Fund	0.4%	—%	—%	11.9%	—%
Schwab Target 2035 Fund	0.2%	—%	—%	6.0%	—%
Schwab Target 2040 Fund	0.5%	—%	—%	14.6%	—%
Schwab Target 2045 Fund	0.1%	—%	—%	1.9%	—%
Schwab Target 2050 Fund	0.1%	—%	—%	1.7%	—%
Schwab Target 2055 Fund	0.0%*	—%	—%	1.0%	—%
Schwab Target 2060 Fund	0.0%*	—%	—%	0.2%	—%

*	Less than 0.05%

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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 International Index Fund to the extent the fund is able to successfully recover taxes withheld in the future. As of April 30, 2018, 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.

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.

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. 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, 2018, 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	$81,770,652	($28,052,387)
Schwab 1000 Index Fund	33,204,440	6,441,124
Schwab Small-Cap Index Fund	10,279,281	(3,175,438)
Schwab Total Stock Market Index Fund	22,184,209	(4,069,057)
Schwab U.S. Large-Cap Growth Index Fund	—	—
Schwab U.S. Large-Cap Value Index Fund	—	—
Schwab U.S. Mid-Cap Index Fund	—	—
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. The funds do not pay any interested or non-interested (independent trustees) trustees. The independent trustees are paid by CSIM. 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 $605 million line of credit (the Syndicated Credit Facility), maturing on October 4, 2018. Under the terms of the Syndicated Credit Facility, in addition to CSIM paying the interest charged on any borrowings by a fund, CSIM paid a commitment fee of 0.15% per annum on its proportionate share of the unused portion of the Syndicated Credit Facility.

Effective December 1, 2017, the funds are participants with other U.S. registered investment companies managed by CSIM in a joint, unsecured, uncommitted $500 million line of credit (the Uncommitted Credit Facility), with State Street, which matures on November 30, 2018. Under the terms of the Uncommitted Credit Facility, CSIM pays interest on the amount a fund borrows. There were no borrowings from either 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 paid by CSIM. 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 current value and variation margin for futures contracts held at April 30, 2018 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, 2018, the month-end average notional amounts of futures contracts held by the funds and the month-end average number of contracts held were as follows:

	Notional Amounts	Number of Contracts
Schwab S&P 500 Index Fund	$154,816,399	1,166
Schwab 1000 Index Fund	30,109,915	225
Schwab Small-Cap Index Fund	21,990,503	287
Schwab Total Stock Market Index Fund	31,729,524	262
Schwab U.S. Large-Cap Growth Index Fund	111,226	2
Schwab U.S. Large-Cap Value Index Fund	120,602	2
Schwab U.S. Mid-Cap Index Fund	265,294	1
Schwab International Index Fund	37,394,463	366

8. Purchases and Sales of Investment Securities:

For the period ended April 30, 2018, purchases and sales of securities (excluding short-term obligations) were as follows:

	Purchases of Securities	Sales of Securities
Schwab S&P 500 Index Fund	$2,096,296,563	$273,813,556
Schwab 1000 Index Fund	177,370,664	269,535,158
Schwab Small-Cap Index Fund	318,674,308	101,745,848
Schwab Total Stock Market Index Fund	1,042,847,215	151,495,965
Schwab U.S. Large-Cap Growth Index Fund	58,097,893	1,059,383
Schwab U.S. Large-Cap Value Index Fund	51,591,170	1,267,813
Schwab U.S. Mid-Cap Index Fund	115,951,428	2,114,390
Schwab International Index Fund	423,599,976	80,446,001

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 were netted against redemption proceeds on the Statement of Changes in Net Assets. The redemption fees charged during the prior period were as follows:

	Prior Period (11/1/16-10/31/17)
Schwab S&P 500 Index Fund	$110,332
Schwab 1000 Index Fund	8,551
Schwab Small-Cap Index Fund	13,135
Schwab Total Stock Market Index Fund	35,265
Schwab International Index Fund	13,908

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Financial Notes, unaudited (continued)

10. Federal Income Taxes:

As of April 30, 2018, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:

	Schwab S&P 500 Index Fund	Schwab 1000 Index Fund	Schwab Small-Cap Index Fund	Schwab Total Stock Market Index Fund	Schwab U.S. Large-Cap Growth Index Fund
Tax cost	$17,218,466,200	$2,062,515,944	$2,656,153,105	$4,852,769,851	$57,158,601
Gross unrealized appreciation	$15,757,120,612	$5,768,555,724	$1,410,111,708	$3,095,114,212	$1,575,911
Gross unrealized depreciation	(478,922,251)	(34,666,481)	(206,908,003)	(128,834,078)	(2,445,840)
Net unrealized appreciation (depreciation)	$15,278,198,361	$5,733,889,243	$1,203,203,705	$2,966,280,134	($869,929)

	Schwab U.S. Large-Cap Value Index Fund	Schwab U.S. Mid-Cap Index Fund	Schwab International Index Fund
Tax cost	$50,394,953	$113,591,044	$3,605,935,263
Gross unrealized appreciation	$895,111	$2,562,254	$1,096,249,202
Gross unrealized depreciation	(2,225,718)	(6,097,081)	(142,243,140)
Net unrealized appreciation (depreciation)	($1,330,607)	($3,534,827)	$954,006,062

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2017, the funds had capital loss carryforwards available to offset future net capital gains 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
No expiration	$—	$—	$—	$—	$89,720,520
Total	$—	$—	$—	$—	$89,720,520

As of October 31, 2017, 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, 2017, the funds did not incur any interest or penalties.

11. Subsequent Events:

Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.

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Investment Advisory Agreement Approval

Initial Approval of Investment Advisory Agreement

The Investment Company Act of 1940 (the 1940 Act) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the Independent Trustees), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.

The Board of Trustees (the Board or the Trustees, as appropriate) called and held a meeting on September 19, 2017, in part, for the purpose of considering whether to appoint Charles Schwab Investment Management, Inc. (CSIM) as investment adviser to Schwab U.S. Large-Cap Growth Index Fund, Schwab U.S. Large-Cap Value Index Fund, and Schwab U.S. Mid-Cap Index Fund (the Funds) under the amended and restated investment advisory and administration agreement between Schwab Capital Trust (the Trust) and CSIM (the Agreement). In preparation for the meeting, the Board reviewed a variety of materials provided by CSIM with respect to the services to be provided to the Funds under the Agreement. In recognition of the fact that the Funds had not yet commenced operations, the Board also took into account the detailed information about other funds within the Trust that the Board reviews during the course of each year, including information that relates to fund operations and fund performance. The Independent Trustees receive advice from Independent Trustees’ legal counsel. In addition, the Independent Trustees met in executive session outside the presence of fund management and participated in question and answer sessions with representatives of CSIM.

At the meeting on September 19, 2017, the Board, including a majority of the Independent Trustees, approved the Agreement with respect to the Funds. The Board’s approval was based on consideration and evaluation of a variety of specific factors discussed at this meeting and/or at prior meetings of the Board, including:

1.	the nature, extent and quality of the services to be provided to the Funds under the Agreement, including the resources CSIM and its affiliates will dedicate to the Funds;
2.	CSIM’s investment performance in managing other funds having relevant investment objectives and strategies;
3.	the Funds’ estimated expenses and how those expenses compare to those of certain other comparable mutual funds;

4.	the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to management of other similar funds, including both direct and indirect benefits accruing to CSIM and its affiliates; and
5.	the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement relating to the Funds reflect those economies of scale for the benefit of Fund investors.

Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services to be provided by CSIM to each Fund and the resources CSIM and its affiliates will dedicate to the Funds. In this regard, the Trustees 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 also considered Schwab’s wide range of products, services, and channel alternatives such as investment research tools and Internet access and an array of account features that benefit the Funds and certain of their shareholders. The Trustees also considered Schwab’s reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Based on this evaluation, the Board concluded, within the context of its full deliberations that the nature, extent and quality of services to be provided by CSIM to the Funds and the resources CSIM and its affiliates will dedicate to the Funds supported approval of the Agreement with respect to the Funds.

Fund Performance. With regard to Fund performance, since the Funds had not commenced operations and therefore did not have any performance of their own, the Board considered performance of other funds advised by CSIM having comparable investment objectives in determining whether to approve the Agreement with respect to the Funds. The Trustees also considered both risk and shareholder risk expectations for the Funds. Based on this evaluation the Board concluded, within the context of its full deliberations, that the performance of CSIM supported approval of the Agreement with respect to the Funds.

Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and the Funds’ estimated net operating expense ratio in comparison to those of other comparable mutual funds. The Trustees also considered fees charged by CSIM to other mutual funds and to other types of accounts, which may include 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

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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 concluded, within the context of its full deliberations, that the expenses of the Fund are reasonable and supported approval of the Agreement with respect to the Funds.

Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates directly or indirectly. The Trustees also considered any other benefits to be derived by CSIM from its relationship with the Funds. The Trustees considered whether the compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the expected profitability of CSIM, albeit uncertain, is reasonable and supported approval of the Agreement with respect to the Funds.

Economies of Scale. Recognizing that the Funds had not yet commenced operations and had no assets, the Trustees

considered the possible development of any economies of scale through various efficiencies that may result from increases in the Funds’ assets and whether those could be expected to be passed along to the Funds’ shareholders. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds may be expected to obtain reasonable benefit from economies of scale if such economies develop.

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, unanimously approved the Agreement as it relates to the Funds and concluded that the compensation under the Agreement relating to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.

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Trustees and Officers

The tables below give information about the trustees and officers of Schwab Capital Trust and Schwab Investments, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 107 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) (investment management firm) and President, PIMCO Funds.	107	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 (public policy think tank) (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015).	107	Director, Gilead Sciences, Inc. (2005 – present)
Nancy F. Heller 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 2018)	President and Chairman, TIAA Charitable (financial services) (2014 – 2016); Senior Managing Director, TIAA (financial services) (2003 – 2016).	107	None
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).	107	None

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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
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.	107	Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present)
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios 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).	107	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).	107	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).	107	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); Co-CEO, Colgin Cellars, LLC (vineyards) (Feb. 1998 – present).	107	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 (May 2008 – present), President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; and Director, Charles Schwab Investment Management, Inc. (July 2016 – present).	107	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) (investment management firm) (Mar. 2007 – Aug. 2010).	107	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)	Chief Operating Officer (Feb. 2018 – present), Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President, Charles Schwab & Co., Inc. (July 2015 – present); Chief Financial Officer (July 2015 – Aug. 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 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc.	107	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) (investment management firm) (Mar. 2007 – Aug. 2010).

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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served³)	Principal Occupations During the Past Five Years
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).
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. (investment management firm) (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 (investment management firm) (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. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, and is a director of CSIM. Ms. Chandoha is an Interested Trustee because she owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co.
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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Glossary

asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.

asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.

Bloomberg Barclays US 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 US 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 less 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.

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 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 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.

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Russell Midcap Index An index that measures the performance of the midcap segment of the U.S. equity universe. The Russell Midcap Index is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership.

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.

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.

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Notes

Notes

Notes

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 for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.

Proxy Voting Policies, Procedures and Results

A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab Funds’ website at www.schwabfunds.com/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.schwabfunds.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.

The Schwab Funds Family^®

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

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^® U.S. Large-Cap Growth Index Fund

Schwab^® U.S. Large-Cap Value Index Fund

Schwab^® U.S. Mid-Cap Index Fund

Schwab International Index Fund^®

Asset Allocation Funds

Schwab Balanced Fund™

Schwab MarketTrack Portfolios^®

Schwab Target Funds

Schwab Target Index Funds

Schwab^® Monthly Income Funds

Bond Funds

Schwab Intermediate-Term Bond Fund™

Schwab GNMA Fund™

Schwab^® Treasury Inflation Protected Securities Index Fund

Schwab^® U.S. Aggregate Bond Index Fund

Schwab^® Short-Term Bond Index Fund

Schwab Tax-Free Bond Fund™

Schwab California Tax-Free Bond 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 Investor or Ultra fund share classes.

Investment Adviser

Charles Schwab Investment Management, Inc.

211 Main Street, San Francisco, CA 94105

Funds

Schwab Funds^®

1-877-824-5615

You could lose money by investing in the Schwab Money Funds. 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. Because the share price of Schwab Variable Share Price Money Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. 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 the Schwab Money Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Schwab Money Funds’ sponsor has no legal obligation to provide financial support to the Funds, and you should not expect that the sponsor will provide financial support to the Funds at any time.

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MFR13562-22
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Semiannual Report | April 30, 2018

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

This page is intentionally left blank.

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.

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Schwab Active Equity Funds

Performance at a Glance

Total Return for the 6 Months Ended April 30, 2018
Schwab Core Equity Fund (Ticker Symbol: SWANX)	2.85%
S&P 500^® Index	3.82%
Fund Category: Morningstar Large Blend¹	3.48%
Performance Details	pages 8-9

Schwab Dividend Equity Fund (Ticker Symbol: SWDSX)	1.18%
Russell 1000^® Value Index	1.94%
Fund Category: Morningstar Large Value¹	2.72%
Performance Details	pages 10-11

Schwab Large-Cap Growth Fund (Ticker Symbol: SWLSX)	3.54%
Russell 1000^® Growth Index	5.68%
Fund Category: Morningstar Large Growth¹	6.13%
Performance Details	pages 12-13

Schwab Small-Cap Equity Fund (Ticker Symbol: SWSCX)	2.83% ²
Russell 2000^® Index	3.27%
Fund Category: Morningstar Small Blend¹	1.86%
Performance Details	pages 14-15

Total Return for the 6 Months Ended April 30, 2018
Schwab Hedged Equity Fund (Ticker Symbol: SWHEX)	3.01%
S&P 500^® Index	3.82%
Fund Category: Morningstar Long-Short Equity¹	1.63%
Performance Details	pages 16-17

Schwab Health Care Fund³ (Ticker Symbol: SWHFX)	1.91%
Dow Jones Global Health Care Index	3.67%
Fund Category: Morningstar Health¹	4.36%
Performance Details	pages 18-19

Schwab International Core Equity Fund³ (Ticker Symbol: SICNX)	1.21%
MSCI EAFE^® Index (Net)⁴	3.41%
Fund Category: Morningstar Foreign Large Blend¹	2.61%
Performance Details	pages 20-21

Minimum Initial Investment⁵

$100

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.

¹	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.
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	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.
⁴	The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes.
⁵	Please see the funds’ prospectus for further detail and eligibility requirements.

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Schwab Active Equity Funds

From the President

Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.

Dear Shareholder,

Many investors grew accustomed to steady gains during the relative market calm over the past couple of years. But the smooth ride couldn’t last forever, and starting in February, stock markets began experiencing bigger swings. In this environment, the Schwab Active Equity Funds produced moderate returns, though they underperformed their underlying benchmarks due in part to negative contributions from stock selection.

No one can predict what comes next, of course, but the increased market volatility may very well continue. Higher volatility can tempt investors to veer from their financial plans. Sudden portfolio reallocations might be tempting in the moment but can often lead to unintended results. For example, those who sold out of stocks in the midst of the global financial crisis in 2008 – arguably one of the most volatile periods in recent memory – missed out when the market returned 26% in 2009, as measured by the S&P 500 Index.

With this in mind, we believe that a period of heightened volatility can be an opportune time to check on your portfolio and evaluate whether your investments are positioned to help you achieve your financial goals. At Charles Schwab Investment Management, we work hard to provide products that can help shareholders build better portfolios, and for many investors, that may mean including exposure to actively managed strategies.

The Schwab Active Equity Funds are focused on delivering consistent returns over the long haul. The team utilizes a dynamic process that seeks to provide long-term value by overlaying quantitative signals with deep understanding of companies, economics, and market dynamics, as well as the interactions between them.

At Charles Schwab Investment Management, we know it can be difficult to stand firm when volatility spikes, but we believe having a diversified portfolio can help give you confidence that you’re on the right track. We’re here to serve investors over the long-term—with funds that seek consistent, repeatable performance and are built with investors’ needs in mind.

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Schwab Active Equity Funds

From the President (continued)

“ The Schwab Active Equity Funds are focused on delivering consistent returns over the long haul.”

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.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.

Sincerely,

Management views may have changed since the report date.

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Schwab Active Equity Funds

The Investment Environment

Asset Class Performance Comparison % returns during the 6 months ended April 30, 2018

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 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.

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Schwab Active Equity Funds

The Investment Environment (continued)

In the second half of the reporting period, volatility returned to global markets. Rising inflation measurements in February contributed to fears that the Fed would raise short-term rates faster than previously expected, potentially resulting in other central banks following suit. In March, President Trump announced plans for a 25% tariff on steel imports and a 10% tariff on aluminum imports, causing threats of retaliation from countries across the globe and weighing on shares of U.S. companies dependent on these metals. Several countries eventually negotiated exemptions to these tariffs, though escalating tensions between the U.S. and China led to concerns of a potential trade war. Chinese President Xi Jinping sought to alleviate some tensions in a speech later in the reporting period, where he offered several compromises to the Trump administration’s demands, including greater protections for intellectual property and lower tariffs. Meanwhile, after leading the U.S. stock market for much of 2017, U.S. technology companies fell sharply in March amid increased attention from regulators and negative consumer sentiment. Among other events, Facebook, Inc. faced criticism after news surfaced regarding a third party’s access to millions of users’ data, President Trump voiced disapproval with Amazon.com, Inc.’s U.S. Postal Service contract, and two separate fatal accidents involving self-driving vehicles brought renewed scrutiny on Tesla, Inc. and Uber Technologies Inc. However, many technology companies were able to bounce back by the end of the reporting period, due in part to solid earnings reports and growing customer or subscriber numbers.

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Schwab Active Equity Funds

Fund Management

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.

Holly Emerson (formerly known as 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. Emerson 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.

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Schwab Core Equity Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab Core Equity Fund (7/1/96)	2.85%	12.65%	12.22%	8.30%
S&P 500^® Index	3.82%	13.27%	12.96%	9.02%
Fund Category: Morningstar Large Blend³	3.48%	11.94%	11.42%	8.10%
Fund Expense Ratio⁴: 0.74%

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, the Laudus U.S. MarketMasters Fund and the Schwab Premier Equity Fund, respectively, 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.

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Schwab Core Equity Fund

Performance and Fund Facts as of April 30, 2018

Statistics

Number of Holdings	154
Weighted Average Market Cap (millions)	$162,323
Price/Earnings Ratio (P/E)	18.1
Price/Book Ratio (P/B)	2.8
Portfolio Turnover Rate¹	47%

Sector Weightings % of Investments²

Top Equity Holdings % of Net Assets³

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Not annualized.
²	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
³	This list is not a recommendation of any security by the investment adviser.

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Schwab Dividend Equity Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab Dividend Equity Fund (9/2/03)	1.18%	8.31%	9.26%	7.37%
Russell 1000^® Value Index	1.94%	7.50%	10.52%	7.30%
Dividend Equity Spliced Index	1.94%	7.50%	11.21%	8.17%
S&P 500^® Index	3.82%	13.27%	12.96%	9.02%
Fund Category: Morningstar Large Value³	2.72%	9.43%	10.01%	7.26%
Fund Expense Ratio⁴: 0.88%

Yields¹

30-Day SEC Yield

1.20%

The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.

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.

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Schwab Dividend Equity Fund

Performance and Fund Facts as of April 30, 2018

Statistics

Number of Holdings	131
Weighted Average Market Cap (millions)	$98,007
Price/Earnings Ratio (P/E)	15.3
Price/Book Ratio (P/B)	2.0
Portfolio Turnover Rate¹	35%

Sector Weightings % of Investments²

Top Equity Holdings % of Net Assets³

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Not annualized.
²	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
³	This list is not a recommendation of any security by the investment adviser.

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Schwab Large-Cap Growth Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab Large-Cap Growth Fund (10/3/05)	3.54%	15.49%	13.51%	9.27%
Russell 1000^® Growth Index	5.68%	18.96%	15.13%	10.81%
Fund Category: Morningstar Large Growth³	6.13%	18.28%	13.61%	9.29%
Fund Expense Ratios⁴: Net 0.99%; Gross 1.04%

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.

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Schwab Large-Cap Growth Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	116
Weighted Average Market Cap (millions)	$231,953
Price/Earnings Ratio (P/E)	21.4
Price/Book Ratio (P/B)	4.6
Portfolio Turnover Rate²	36%

Sector Weightings % of Investments³

Top Equity Holdings % of Net Assets⁴

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁴	This list is not a recommendation of any security by the investment adviser.

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Schwab Small-Cap Equity Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab Small-Cap Equity Fund (7/1/03)	2.83% ³	10.02%	12.32%	9.95%
Russell 2000^® Index	3.27%	11.54%	11.74%	9.49%
Fund Category: Morningstar Small Blend⁴	1.86%	8.96%	10.54%	8.76%
Fund Expense Ratio⁵: 1.10%

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	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. 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.

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Schwab Small-Cap Equity Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	305
Weighted Average Market Cap (millions)	$2,134
Price/Earnings Ratio (P/E)	15.6
Price/Book Ratio (P/B)	2.1
Portfolio Turnover Rate²	55%

Sector Weightings % of Investments³

Top Equity Holdings % of Net Assets⁴

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	Excludes derivatives.
²	Not annualized.
³	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁴	This list is not a recommendation of any security by the investment adviser.

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Schwab Hedged Equity Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab Hedged Equity Fund (9/3/02)	3.01%	6.26%	7.82%	5.65%
S&P 500^® Index	3.82%	13.27%	12.96%	9.02%
Fund Category: Morningstar Long-Short Equity³	1.63%	6.03%	4.24%	4.27%
Fund Expense Ratios⁴: Net 1.64%; Gross 1.65%

For index definitions, please see the Glossary.

The Schwab Hedged Equity Fund’s long positions can decline in value at the same time the value of its shorted stocks increases, thereby increasing the potential for loss. The potential loss associated with short positions is much greater than the original value of the securities sold. The use of borrowing and short sales may cause the fund to have higher expenses than those of equity funds that do not use such techniques.

¹	Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
²	On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to September 28, 2009 is that of the fund’s former Select Shares.
³	Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
⁴	As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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.

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Schwab Hedged Equity Fund

Performance and Fund Facts as of April 30, 2018

Statistics

Number of Holdings
Long Holdings	200
Short Holdings	95
Weighted Average Market Cap (millions)
Long Holdings	$81,681
Short Holdings	$7,440
Price/Earnings Ratio (P/E)
Long Holdings	16.4
Short Holdings	16.7
Price/Book Ratio (P/B)
Long Holdings	2.4
Short Holdings	1.7
Portfolio Turnover Rate¹	93%
Portfolio Turnover Rate excluding short sales¹	59%

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.

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Schwab Health Care Fund

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab Health Care Fund (7/3/00)	1.91%	8.98%	12.17%	12.02%
Dow Jones Global Health Care Index	3.67%	11.06%	10.79%	10.64%
S&P 500^® Index	3.82%	13.27%	12.96%	9.02%
Fund Category: Morningstar Health²	4.36%	12.22%	13.70%	12.93%
Fund Expense Ratio³: 0.81%

The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.

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.

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Schwab Health Care Fund

Performance and Fund Facts as of April 30, 2018

Statistics

Number of Holdings	118
Weighted Average Market Cap (millions)	$108,098
Price/Earnings Ratio (P/E)	28.8
Price/Book Ratio (P/B)	3.9
Portfolio Turnover Rate¹	32%

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.

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Schwab International Core Equity Fund

Average Annual Total Returns^1,2

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception
Fund: Schwab International Core Equity Fund (5/30/08)	1.21%	10.52%	7.16%	3.68%
MSCI EAFE^® Index (Net)³	3.41%	14.51%	5.90%	2.41%
MSCI EAFE^® Index (Gross)	3.67%	15.07%	6.38%	2.88%
Fund Category: Morningstar Foreign Large Blend⁴	2.61%	13.56%	5.61%	N/A
Fund Expense Ratios⁵: Net 0.86%; Gross 0.90%

The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.

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.

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Schwab International Core Equity Fund

Performance and Fund Facts as of April 30, 2018

Statistics¹

Number of Holdings	171
Weighted Average Market Cap (millions)	$51,861
Price/Earnings Ratio (P/E)	13.5
Price/Book Ratio (P/B)	1.9
Portfolio Turnover Rate²	42%

Sector Weightings % of Investments¹

Top Equity Holdings % of Net Assets³

Top Country Weightings % of Investments⁴

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	Excludes derivatives.
²	Not annualized.
³	This list is not a recommendation of any security by the investment adviser.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.

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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.

	Expense Ratio (Annualized)¹	Beginning Account Value at 11/1/17	Ending Account Value (Net of Expenses) at 4/30/18	Expenses Paid During Period 11/1/17-4/30/18²
Schwab Core Equity Fund
Actual Return	0.73%	$1,000.00	$1,028.50	$3.67
Hypothetical 5% Return	0.73%	$1,000.00	$1,021.18	$3.66
Schwab Dividend Equity Fund
Actual Return	0.88%	$1,000.00	$1,011.80	$4.39
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	$1,035.40	$5.00
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	$1,027.80	$5.48
Hypothetical 5% Return	1.09%	$1,000.00	$1,019.39	$5.46
Schwab Hedged Equity Fund
Actual Return	1.63%	$1,000.00	$1,030.10	$8.20
Hypothetical 5% Return	1.63%	$1,000.00	$1,016.72	$8.15
Schwab Health Care Fund
Actual Return	0.79%	$1,000.00	$1,019.10	$3.95
Hypothetical 5% Return	0.79%	$1,000.00	$1,020.88	$3.96
Schwab International Core Equity Fund
Actual Return	0.86%	$1,000.00	$1,012.10	$4.29
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.

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Schwab Core Equity Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$24.36	$19.65	$23.10	$25.48	$23.46	$18.80
Income (loss) from investment operations:
Net investment income (loss)	0.13 ¹	0.34 ¹	0.38 ¹	0.30 ¹	0.30	0.32
Net realized and unrealized gains (losses)	0.57	4.71	(0.52)	1.05	3.60	4.51
Total from investment operations	0.70	5.05	(0.14)	1.35	3.90	4.83
Less distributions:
Distributions from net investment income	(0.34)	(0.34)	(0.36)	(0.33)	(0.22)	(0.17)
Distributions from net realized gains	(2.29)	—	(2.95)	(3.40)	(1.66)	—
Total distributions	(2.63)	(0.34)	(3.31)	(3.73)	(1.88)	(0.17)
Net asset value at end of period	$22.43	$24.36	$19.65	$23.10	$25.48	$23.46
Total return	2.85% ²	26.00%	(0.50%)	5.61%	17.88%	25.89%
Ratios/Supplemental Data
Ratios to average net assets:
Net operating expenses	0.73% ³	0.73%	0.73%	0.74%	0.72%	0.72%
Gross operating expenses	0.73% ³	0.74%	0.73%	0.74%	0.72%	0.73%
Net investment income (loss)	1.14% ³	1.53%	1.93%	1.29%	1.19%	1.51%
Portfolio turnover rate	47% ²	86%	80%	81%	63%	80%
Net assets, end of period (x 1,000,000)	$2,237	$2,353	$2,075	$2,363	$2,317	$2,247

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

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Table of Contents

Schwab Core Equity Fund

Portfolio Holdings as of April 30, 2018 (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.schwabfunds.com/schwabfunds_prospectus.

Security	Number of Shares	Value ($)
Common Stock 99.4% of net assets

Banks 6.6%
Bank of America Corp.	403,270	12,065,838
CIT Group, Inc.	186,416	9,870,727
Citigroup, Inc.	633,933	43,278,606
Citizens Financial Group, Inc.	375,813	15,592,481
Essent Group Ltd. *	198,578	6,545,131
JPMorgan Chase & Co.	114,152	12,417,455
Regions Financial Corp.	514,079	9,613,277
The PNC Financial Services Group, Inc.	144,388	21,024,337
Wells Fargo & Co.	313,032	16,265,143
		146,672,995

Capital Goods 7.9%
AGCO Corp.	265,388	16,634,520
Allison Transmission Holdings, Inc.	550,701	21,471,832
Cummins, Inc.	81,498	13,028,270
Eaton Corp. plc	54,308	4,074,729
EMCOR Group, Inc.	173,851	12,793,695
Graco, Inc.	106,735	4,695,273
Honeywell International, Inc.	58,819	8,509,933
Ingersoll-Rand plc	110,881	9,301,807
Masco Corp.	370,075	14,014,740
Owens Corning	284,153	18,609,180
PACCAR, Inc.	255,140	16,244,764
The Boeing Co.	115,380	38,486,153
		177,864,896

Commercial & Professional Services 1.3%
KAR Auction Services, Inc.	106,593	5,541,770
ManpowerGroup, Inc.	65,852	6,303,354
Robert Half International, Inc.	219,680	13,345,560
Waste Management, Inc.	53,732	4,367,874
		29,558,558

Consumer Durables & Apparel 3.2%
Carter's, Inc.	59,862	6,005,356
Deckers Outdoor Corp. *	56,125	5,234,218
Michael Kors Holdings Ltd. *	169,493	11,596,711
Polaris Industries, Inc.	43,530	4,562,815
PulteGroup, Inc.	133,934	4,066,236
Ralph Lauren Corp.	157,591	17,311,371
VF Corp.	76,606	6,195,127
Whirlpool Corp.	101,400	15,711,930
		70,683,764

Consumer Services 3.3%
Carnival Corp.	168,641	10,634,502
Extended Stay America, Inc.	423,911	8,300,177
Las Vegas Sands Corp.	430,036	31,534,540
Royal Caribbean Cruises Ltd.	41,156	4,452,668

Security	Number of Shares	Value ($)
Wyndham Worldwide Corp.	101,867	11,634,230
Wynn Resorts Ltd.	36,523	6,800,217
		73,356,334

Diversified Financials 4.7%
Affiliated Managers Group, Inc.	23,943	3,947,243
Ally Financial, Inc.	210,177	5,485,620
Ameriprise Financial, Inc.	51,459	7,215,066
Berkshire Hathaway, Inc., Class B *	27,805	5,386,662
BlackRock, Inc.	12,324	6,426,966
Capital One Financial Corp.	214,116	19,403,192
Discover Financial Services	211,055	15,037,669
Evercore, Inc., Class A	94,804	9,598,905
Morgan Stanley	252,248	13,021,042
Santander Consumer USA Holdings, Inc.	498,804	9,202,934
SEI Investments Co.	92,609	5,855,667
Synchrony Financial	133,430	4,425,873
		105,006,839

Energy 5.8%
Chevron Corp.	250,341	31,320,163
ConocoPhillips	553,379	36,246,324
Exxon Mobil Corp.	317,291	24,669,375
Halliburton Co.	188,359	9,981,143
Marathon Petroleum Corp.	105,288	7,887,124
Occidental Petroleum Corp.	87,141	6,732,514
Valero Energy Corp.	107,486	11,923,422
		128,760,065

Food & Staples Retailing 0.4%
Walmart, Inc.	110,416	9,767,399

Food, Beverage & Tobacco 4.1%
Archer-Daniels-Midland Co.	227,590	10,328,034
Bunge Ltd.	84,133	6,076,927
General Mills, Inc.	144,905	6,338,145
Ingredion, Inc.	60,980	7,384,068
Molson Coors Brewing Co., Class B	277,524	19,770,810
PepsiCo, Inc.	302,285	30,512,648
Philip Morris International, Inc.	50,630	4,151,660
The Hershey Co.	86,042	7,910,701
		92,472,993

Health Care Equipment & Services 5.5%
Abbott Laboratories	315,721	18,352,862
Anthem, Inc.	68,294	16,116,701
Baxter International, Inc.	107,315	7,458,392
Centene Corp. *	121,282	13,168,799
Cerner Corp. *	121,413	7,072,307
Danaher Corp.	83,805	8,407,318
Hill-Rom Holdings, Inc.	174,761	14,999,737

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Table of Contents

Schwab Core Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
UnitedHealth Group, Inc.	59,145	13,981,878
Varian Medical Systems, Inc. *	195,234	22,567,098
		122,125,092

Household & Personal Products 1.3%
Energizer Holdings, Inc.	227,150	13,029,324
The Procter & Gamble Co.	215,229	15,569,666
		28,598,990

Insurance 2.5%
Assured Guaranty Ltd.	125,795	4,565,101
CNA Financial Corp.	12,814	646,595
Prudential Financial, Inc.	89,023	9,464,925
The Allstate Corp.	411,759	40,278,265
		54,954,886

Materials 4.2%
Alcoa Corp. *	246,641	12,628,019
Berry Global Group, Inc. *	372,530	20,489,150
CF Industries Holdings, Inc.	142,452	5,527,138
Domtar Corp.	93,599	4,108,996
Eastman Chemical Co.	91,036	9,292,955
Freeport-McMoRan, Inc.	527,106	8,017,282
Huntsman Corp.	285,964	8,513,148
LyondellBasell Industries N.V., Class A	126,810	13,407,621
Westlake Chemical Corp.	106,748	11,418,834
		93,403,143

Media 1.6%
Comcast Corp., Class A	740,661	23,249,349
Live Nation Entertainment, Inc. *	176,483	6,965,784
The Walt Disney Co.	45,809	4,596,017
		34,811,150

Pharmaceuticals, Biotechnology & Life Sciences 7.4%
AbbVie, Inc.	152,307	14,705,241
Amgen, Inc.	206,033	35,948,638
Biogen, Inc. *	50,482	13,811,875
Celgene Corp. *	181,956	15,848,368
Eli Lilly & Co.	263,321	21,347,433
Gilead Sciences, Inc.	147,907	10,683,323
Johnson & Johnson	262,381	33,188,573
Pfizer, Inc.	559,763	20,492,923
		166,026,374

Real Estate 3.0%
American Tower Corp.	167,035	22,776,893
Equity LifeStyle Properties, Inc.	241,387	21,522,065
Realogy Holdings Corp.	370,463	9,191,187
Senior Housing Properties Trust	889,385	13,847,724
		67,337,869

Retailing 5.8%
Amazon.com, Inc. *	35,936	56,280,448
Best Buy Co., Inc.	61,702	4,722,054
Booking Holdings, Inc. *	5,382	11,721,996
Expedia Group, Inc.	79,521	9,156,048
Macy's, Inc.	354,316	11,008,598

Security	Number of Shares	Value ($)
Qurate Retail Group, Inc. QVC Group, Class A *	784,384	18,362,429
The Home Depot, Inc.	97,091	17,942,417
		129,193,990

Semiconductors & Semiconductor Equipment 2.6%
Intel Corp.	359,512	18,558,009
Lam Research Corp.	47,336	8,760,000
Micron Technology, Inc. *	339,712	15,619,958
ON Semiconductor Corp. *	687,898	15,188,788
		58,126,755

Software & Services 14.8%
Accenture plc, Class A	160,692	24,296,630
Adobe Systems, Inc. *	36,997	8,198,535
Alliance Data Systems Corp.	53,763	10,916,577
Alphabet, Inc., Class A *	40,719	41,475,559
Alphabet, Inc., Class C *	10,791	10,978,008
Broadridge Financial Solutions, Inc.	33,679	3,610,726
CACI International, Inc., Class A *	101,225	15,290,036
Cadence Design Systems, Inc. *	77,524	3,105,611
Citrix Systems, Inc. *	23,546	2,423,119
Cognizant Technology Solutions Corp., Class A	137,100	11,217,522
Dell Technologies, Inc., Class V *	89,022	6,389,109
eBay, Inc. *	393,664	14,911,992
Facebook, Inc., Class A *	166,569	28,649,868
International Business Machines Corp.	68,409	9,916,569
Intuit, Inc.	140,911	26,038,944
Microsoft Corp.	885,450	82,807,284
Total System Services, Inc.	208,259	17,506,252
Visa, Inc., Class A	107,209	13,602,678
		331,335,019

Technology Hardware & Equipment 6.7%
Apple, Inc.	419,941	69,399,450
CDW Corp.	171,457	12,223,169
Cisco Systems, Inc.	385,261	17,063,210
HP, Inc.	305,050	6,555,524
Jabil, Inc.	285,873	7,604,222
NetApp, Inc.	166,088	11,058,139
Tech Data Corp. *	78,743	6,004,154
Western Digital Corp.	261,124	20,573,960
		150,481,828

Telecommunication Services 1.2%
AT&T, Inc.	321,276	10,505,725
T-Mobile US, Inc. *	276,511	16,731,681
		27,237,406

Transportation 1.6%
Delta Air Lines, Inc.	571,802	29,859,500
Southwest Airlines Co.	119,066	6,290,257
		36,149,757

Utilities 3.9%
Consolidated Edison, Inc.	58,367	4,676,948
Exelon Corp.	381,655	15,144,070
FirstEnergy Corp.	971,550	33,421,320
PG&E Corp.	229,493	10,579,627

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Core Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
Portland General Electric Co.	219,851	9,339,271
UGI Corp.	310,619	15,030,853
		88,192,089
Total Common Stock
(Cost $1,860,265,414)		2,222,118,191

Other Investment Company 0.2% of net assets

Money Market Fund 0.2%
State Street Institutional U.S. Government Money Market Fund, Premier Class 1.63% (a)	4,981,625	4,981,625
Total Other Investment Company
(Cost $4,981,625)		4,981,625

*	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, 2018 (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
Assets
Common Stock¹	$2,222,118,191	$—	$—	$2,222,118,191
Other Investment Company¹	4,981,625	—	—	4,981,625
Total	$2,227,099,816	$—	$—	$2,227,099,816

¹	As categorized in Portfolio Holdings.

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Table of Contents

Schwab Core Equity Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $1,865,247,039)		$2,227,099,816
Deposit with broker for futures contracts		1,155,000
Receivables:
Investments sold		7,511,739
Fund shares sold		1,971,131
Dividends		1,472,529
Prepaid expenses	+	24,967
Total assets		2,239,235,182
Liabilities
Payables:
Investment adviser and administrator fees		875,327
Shareholder service fees		439,082
Independent trustees’ fees		395
Fund shares redeemed		763,232
Accrued expenses	+	123,373
Total liabilities		2,201,409
Net Assets
Total assets		2,239,235,182
Total liabilities	–	2,201,409
Net assets		$2,237,033,773
Net Assets by Source
Capital received from investors		1,696,691,046
Net investment income not yet distributed		7,031,022
Net realized capital gains		171,458,928
Net unrealized capital appreciation		361,852,777

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$2,237,033,773		99,754,139		$22.43

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Schwab Active Equity Funds | ��Semiannual Report

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Table of Contents

Schwab Core Equity Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends		$21,741,487
Securities on loan, net	+	855
Total investment income		21,742,342
Expenses
Investment adviser and administrator fees		5,468,343
Shareholder service fees		2,831,040
Shareholder reports		47,147
Portfolio accounting fees		31,809
Transfer agent fees		22,169
Professional fees		21,990
Custodian fees		19,958
Registration fees		18,733
Independent trustees’ fees		10,269
Interest expense		117
Other expenses	+	13,987
Total expenses		8,485,562
Expense reduction by CSIM and its affiliates	–	22,169
Net expenses	–	8,463,393
Net investment income		13,278,949
Realized and Unrealized Gains (Losses)
Net realized gains on investments		173,319,814
Net realized gains on futures contracts	+	269,699
Net realized gains		173,589,513
Net change in unrealized appreciation (depreciation) on investments		(115,659,161)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(195,509)
Net change in unrealized appreciation (depreciation)	+	(115,854,670)
Net realized and unrealized gains		57,734,843
Increase in net assets resulting from operations		$71,013,792

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Table of Contents

Schwab Core Equity Fund

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$13,278,949	$33,683,880
Net realized gains		173,589,513	220,321,188
Net change in unrealized appreciation (depreciation)	+	(115,854,670)	252,770,154
Increase in net assets from operations		71,013,792	506,775,222
Distributions to Shareholders
Distributions from net investment income		(32,952,725)	(35,084,460)
Distributions from net realized gains	+	(219,049,964)	—
Total distributions		($252,002,689)	($35,084,460)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		3,408,544	$78,001,911	4,988,532	$112,792,936
Shares reinvested		11,161,490	251,245,134	1,218,622	25,249,831
Shares redeemed	+	(11,405,443)	(264,341,434)	(15,242,604)	(331,861,293)
Net transactions in fund shares		3,164,591	$64,905,611	(9,035,450)	($193,818,526)
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		96,589,548	$2,353,117,059	105,624,998	$2,075,244,823
Total increase or decrease	+	3,164,591	(116,083,286)	(9,035,450)	277,872,236
End of period		99,754,139	$2,237,033,773	96,589,548	$2,353,117,059
Net investment income not yet distributed			$7,031,022		$26,704,798

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Dividend Equity Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$17.21	$14.39	$16.43	$19.17	$18.22	$14.52
Income (loss) from investment operations:
Net investment income (loss)	0.10 ¹	0.29 ¹	0.31 ¹	0.29 ¹	0.27	0.32
Net realized and unrealized gains (losses)	0.13	2.75	(0.29)	(0.21)	2.16	3.70
Total from investment operations	0.23	3.04	0.02	0.08	2.43	4.02
Less distributions:
Distributions from net investment income	(0.19)	(0.22)	(0.32)	(0.27)	(0.29)	(0.32)
Distributions from net realized gains	(1.43)	—	(1.74)	(2.55)	(1.19)	—
Total distributions	(1.62)	(0.22)	(2.06)	(2.82)	(1.48)	(0.32)
Net asset value at end of period	$15.82	$17.21	$14.39	$16.43	$19.17	$18.22
Total return	1.18% ²	21.19%	0.26%	0.12%	14.26%	27.99%
Ratios/Supplemental Data
Ratios to average net assets:
Net operating expenses	0.88% ³	0.88%	0.88%	0.88%	0.89%	0.89%
Gross operating expenses	0.88% ³	0.88%	0.89%	0.88%	0.89%	0.89%
Net investment income (loss)	1.26% ³	1.78%	2.18%	1.71%	1.47%	1.97%
Portfolio turnover rate	35% ²	70%	74%	73%	72%	64%
Net assets, end of period (x 1,000,000)	$1,356	$1,469	$1,560	$1,872	$2,053	$1,804

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

₃₀

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Dividend Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

Security	Number of Shares	Value ($)
Common Stock 99.3% of net assets

Automobiles & Components 0.7%
Dana, Inc.	212,395	5,040,133
Lear Corp.	26,686	4,989,482
		10,029,615

Banks 13.6%
Bank of America Corp.	734,768	21,984,259
CIT Group, Inc.	272,094	14,407,377
Citigroup, Inc.	666,886	45,528,307
Citizens Financial Group, Inc.	586,260	24,323,927
Essent Group Ltd. *	75,568	2,490,721
JPMorgan Chase & Co.	269,396	29,304,897
MGIC Investment Corp. *	209,410	2,098,288
Popular, Inc.	39,795	1,842,111
Regions Financial Corp.	1,393,281	26,054,355
The PNC Financial Services Group, Inc.	94,673	13,785,336
Wells Fargo & Co.	47,375	2,461,605
		184,281,183

Capital Goods 7.8%
AGCO Corp.	116,365	7,293,758
Allison Transmission Holdings, Inc.	503,946	19,648,855
Beacon Roofing Supply, Inc. *	39,196	1,918,644
Caterpillar, Inc.	63,781	9,207,425
Cummins, Inc.	4,969	794,344
EMCOR Group, Inc.	158,678	11,677,114
General Electric Co.	573,498	8,069,117
JELD-WEN Holding, Inc. *	46,047	1,294,381
Masco Corp.	91,303	3,457,645
Owens Corning	283,943	18,595,427
The Boeing Co.	67,151	22,398,888
United Rentals, Inc. *	9,323	1,398,450
		105,754,048

Consumer Durables & Apparel 2.5%
Carter's, Inc.	36,741	3,685,857
Hasbro, Inc.	14,608	1,286,819
Michael Kors Holdings Ltd. *	159,660	10,923,937
Polaris Industries, Inc.	17,926	1,879,003
Ralph Lauren Corp.	40,367	4,434,315
Whirlpool Corp.	74,656	11,567,947
		33,777,878

Consumer Services 0.0%
Las Vegas Sands Corp.	4,648	340,838

Diversified Financials 9.3%
Affiliated Managers Group, Inc.	63,139	10,409,095
Ally Financial, Inc.	101,297	2,643,852
Ameriprise Financial, Inc.	18,314	2,567,806
Berkshire Hathaway, Inc., Class B *	80,617	15,617,931

Security	Number of Shares	Value ($)
Capital One Financial Corp.	299,379	27,129,725
Discover Financial Services	238,935	17,024,119
Lazard Ltd., Class A	26,038	1,416,988
Morgan Stanley	486,811	25,129,184
Santander Consumer USA Holdings, Inc.	613,646	11,321,769
Synchrony Financial	80,355	2,665,375
The Goldman Sachs Group, Inc.	43,022	10,253,433
		126,179,277

Energy 11.6%
Chevron Corp.	298,592	37,356,845
ConocoPhillips	532,255	34,862,703
Exxon Mobil Corp.	471,964	36,695,201
Halliburton Co.	244,355	12,948,371
Marathon Petroleum Corp.	79,918	5,986,657
Valero Energy Corp.	267,291	29,650,591
		157,500,368

Food & Staples Retailing 0.6%
U.S. Foods Holding Corp. *	41,790	1,428,382
Walmart, Inc.	80,973	7,162,872
		8,591,254

Food, Beverage & Tobacco 3.9%
Archer-Daniels-Midland Co.	205,554	9,328,041
Bunge Ltd.	51,965	3,753,432
General Mills, Inc.	37,977	1,661,114
Molson Coors Brewing Co., Class B	256,652	18,283,888
PepsiCo, Inc.	188,589	19,036,174
TreeHouse Foods, Inc. *	35,855	1,380,417
		53,443,066

Health Care Equipment & Services 5.5%
Abbott Laboratories	350,125	20,352,766
Express Scripts Holding Co. *	316,369	23,949,133
Hill-Rom Holdings, Inc.	48,549	4,166,961
UnitedHealth Group, Inc.	30,917	7,308,779
Varian Medical Systems, Inc. *	164,038	18,961,152
		74,738,791

Household & Personal Products 1.8%
Edgewell Personal Care Co. *	44,962	1,980,576
Energizer Holdings, Inc.	215,636	12,368,881
The Estee Lauder Cos., Inc., Class A	30,458	4,510,525
The Procter & Gamble Co.	66,619	4,819,219
		23,679,201

Insurance 4.7%
American International Group, Inc.	50,524	2,829,344
American National Insurance Co.	11,805	1,424,509
Assured Guaranty Ltd.	195,556	7,096,727
CNA Financial Corp.	95,987	4,843,504
CNO Financial Group, Inc.	73,166	1,568,679

₃₁

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Dividend Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
FNF Group	74,194	2,732,565
Lincoln National Corp.	22,477	1,587,775
Loews Corp.	134,052	7,032,368
Prudential Financial, Inc.	32,866	3,494,313
The Allstate Corp.	313,470	30,663,636
		63,273,420

Materials 4.2%
Alcoa Corp. *	25,113	1,285,786
Berry Global Group, Inc. *	386,815	21,274,825
Huntsman Corp.	44,177	1,315,149
LyondellBasell Industries N.V., Class A	199,331	21,075,267
Platform Specialty Products Corp. *	295,234	2,973,006
PPG Industries, Inc.	44,602	4,722,460
Westlake Chemical Corp.	36,135	3,865,361
		56,511,854

Media 1.5%
Comcast Corp., Class A	321,914	10,104,881
Live Nation Entertainment, Inc. *	195,292	7,708,175
News Corp., Class A	176,846	2,825,999
		20,639,055

Pharmaceuticals, Biotechnology & Life Sciences 7.8%
Amgen, Inc.	187,018	32,630,901
Biogen, Inc. *	5,117	1,400,011
Celgene Corp. *	21,246	1,850,526
Eli Lilly & Co.	216,809	17,576,706
Johnson & Johnson	219,991	27,826,661
Pfizer, Inc.	668,439	24,471,552
		105,756,357

Real Estate 5.0%
American Tower Corp.	70,040	9,550,654
Equity LifeStyle Properties, Inc.	208,157	18,559,278
Forest City Realty Trust, Inc., Class A	68,609	1,376,297
Prologis, Inc.	72,021	4,674,883
Realogy Holdings Corp.	237,116	5,882,848
Retail Properties of America, Inc., Class A	769,163	8,876,141
Senior Housing Properties Trust	1,196,542	18,630,159
		67,550,260

Retailing 1.1%
Best Buy Co., Inc.	94,111	7,202,315
Signet Jewelers Ltd.	53,620	2,084,746
The Home Depot, Inc.	28,437	5,255,157
		14,542,218

Semiconductors & Semiconductor Equipment 2.2%
Intel Corp.	79,854	4,122,063
Micron Technology, Inc. *	311,138	14,306,125
ON Semiconductor Corp. *	520,733	11,497,785
		29,925,973

Software & Services 2.4%
Accenture plc, Class A	36,293	5,487,502
Alliance Data Systems Corp.	18,422	3,740,587

Security	Number of Shares	Value ($)
Alphabet, Inc., Class A *	3,156	3,214,638
Dell Technologies, Inc., Class V *	132,092	9,480,243
Intuit, Inc.	11,898	2,198,631
Microsoft Corp.	83,686	7,826,315
		31,947,916

Technology Hardware & Equipment 3.1%
Apple, Inc.	13,927	2,301,576
ARRIS International plc *	379	10,233
CDW Corp.	68,352	4,872,814
Cisco Systems, Inc.	124,766	5,525,886
F5 Networks, Inc. *	8,513	1,388,385
HP, Inc.	63,924	1,373,727
Jabil, Inc.	259,401	6,900,067
Tech Data Corp. *	135,593	10,338,966
Western Digital Corp.	112,768	8,884,991
		41,596,645

Telecommunication Services 1.4%
AT&T, Inc.	419,220	13,708,494
T-Mobile US, Inc. *	77,901	4,713,790
		18,422,284

Transportation 1.4%
Delta Air Lines, Inc.	350,951	18,326,661
Southwest Airlines Co.	23,851	1,260,049
		19,586,710

Utilities 7.2%
CenterPoint Energy, Inc.	738,321	18,701,671
Exelon Corp.	408,064	16,191,980
FirstEnergy Corp.	744,911	25,624,938
PG&E Corp.	349,700	16,121,170
Portland General Electric Co.	120,278	5,109,409
UGI Corp.	336,664	16,291,171
		98,040,339
Total Common Stock
(Cost $1,162,250,229)		1,346,108,550
Security Rate, Maturity Date	Face Amount ($)	Value ($)
Short-Term Investment 0.1% of net assets

Time Deposit 0.1%
BNP Paribas
1.05%, 05/01/18 (a)	1,184,229	1,184,229
Total Short-Term Investment
(Cost $1,184,229)		1,184,229

*	Non-income producing security.
(a)	The rate shown is the current daily overnight rate.

₃₂

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Dividend Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2018 (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
Assets
Common Stock¹	$1,346,108,550	$—	$—	$1,346,108,550
Short-Term Investment¹	—	1,184,229	—	1,184,229
Total	$1,346,108,550	$1,184,229	$—	$1,347,292,779

¹	As categorized in Portfolio Holdings.

₃₃

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Dividend Equity Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $1,163,434,458)		$1,347,292,779
Deposit with broker for futures contracts		562,500
Receivables:
Investments sold		8,216,330
Dividends		1,163,741
Fund shares sold		172,723
Interest		35
Prepaid expenses	+	13,610
Total assets		1,357,421,718
Liabilities
Payables:
Investment adviser and administrator fees		700,494
Shareholder service fees		265,572
Independent trustees’ fees		461
Fund shares redeemed		730,570
Accrued expenses	+	104,349
Total liabilities		1,801,446
Net Assets
Total assets		1,357,421,718
Total liabilities	–	1,801,446
Net assets		$1,355,620,272
Net Assets by Source
Capital received from investors		1,108,728,654
Net investment income not yet distributed		690,044
Net realized capital gains		62,343,253
Net unrealized capital appreciation		183,858,321

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$1,355,620,272		85,664,432		$15.82

₃₄

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Dividend Equity Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends (net of foreign withholding tax of $1,989)		$15,343,759
Interest	+	16,014
Total investment income		15,359,773
Expenses
Investment adviser and administrator fees		4,437,167
Shareholder service fees		1,733,634
Shareholder reports		37,204
Portfolio accounting fees		28,190
Professional fees		21,464
Custodian fees		18,239
Transfer agent fees		15,342
Registration fees		14,457
Independent trustees’ fees		7,975
Interest expense		1,766
Other expenses	+	9,469
Total expenses		6,324,907
Expense reduction by CSIM and its affiliates	–	15,342
Net expenses	–	6,309,565
Net investment income		9,050,208
Realized and Unrealized Gains (Losses)
Net realized gains on investments		62,022,124
Net realized gains on futures contracts	+	578,110
Net realized gains		62,600,234
Net change in unrealized appreciation (depreciation) on investments		(50,500,263)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(223,438)
Net change in unrealized appreciation (depreciation)	+	(50,723,701)
Net realized and unrealized gains		11,876,533
Increase in net assets resulting from operations		$20,926,741

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Table of Contents

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
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$9,050,208	$26,835,784
Net realized gains		62,600,234	129,829,514
Net change in unrealized appreciation (depreciation)	+	(50,723,701)	139,540,069
Increase in net assets from operations		20,926,741	296,205,367
Distributions to Shareholders
Distributions from net investment income		(16,389,185)	(20,423,777)
Distributions from net realized gains	+	(120,725,110)	—
Total distributions		($137,114,295)	($20,423,777)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		3,257,890	$53,227,993	4,020,638	$64,372,892
Shares reinvested		8,354,325	134,955,248	811,045	13,160,752
Shares redeemed	+	(11,302,494)	(185,753,307)	(27,826,825)	(443,615,673)
Net transactions in fund shares		309,721	$2,429,934	(22,995,142)	($366,082,029)
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		85,354,711	$1,469,377,892	108,349,853	$1,559,678,331
Total increase or decrease	+	309,721	(113,757,620)	(22,995,142)	(90,300,439)
End of period		85,664,432	$1,355,620,272	85,354,711	$1,469,377,892
Net investment income not yet distributed			$690,044		$8,029,021

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Table of Contents

Schwab Large-Cap Growth Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$18.65	$15.20	$17.68	$18.38	$15.66	$12.48
Income (loss) from investment operations:
Net investment income (loss)	0.03 ¹	0.08 ¹	0.20 ¹	0.13 ¹	0.11	0.14
Net realized and unrealized gains (losses)	0.62	4.04	(0.12)	1.08	2.70	3.17
Total from investment operations	0.65	4.12	0.08	1.21	2.81	3.31
Less distributions:
Distributions from net investment income	(0.07)	(0.17)	(0.20)	(0.09)	(0.09)	(0.13)
Distributions from net realized gains	(1.35)	(0.50)	(2.36)	(1.82)	—	—
Total distributions	(1.42)	(0.67)	(2.56)	(1.91)	(0.09)	(0.13)
Net asset value at end of period	$17.88	$18.65	$15.20	$17.68	$18.38	$15.66
Total return	3.54% ²	28.10%	0.54%	7.00%	18.06%	26.76%
Ratios/Supplemental Data
Ratios to average net assets:
Net operating expenses	0.99% ³	0.99%	1.00% ⁴	0.99%	0.99%	0.99%
Gross operating expenses	1.03% ³	1.04%	1.04%	1.03%	1.04%	1.05%
Net investment income (loss)	0.34% ³	0.48%	1.32%	0.75%	0.60%	1.00%
Portfolio turnover rate	36% ²	81%	84%	90%	82%	87%
Net assets, end of period (x 1,000,000)	$251	$257	$219	$251	$256	$253

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

The ratio of net operating expenses would have been 0.99%, if certain non-routine expenses had not been incurred.

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Table of Contents

Schwab Large-Cap Growth Fund

Portfolio Holdings as of April 30, 2018 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

Security	Number of Shares	Value ($)
Common Stock 98.4% of net assets

Automobiles & Components 1.0%
Lear Corp.	13,521	2,528,021

Banks 1.5%
CIT Group, Inc.	10,242	542,314
Essent Group Ltd. *	31,211	1,028,715
MGIC Investment Corp. *	24,964	250,139
The PNC Financial Services Group, Inc.	13,699	1,994,711
		3,815,879

Capital Goods 9.7%
AGCO Corp.	23,943	1,500,747
Allegion plc	8,661	668,456
Allison Transmission Holdings, Inc.	76,216	2,971,662
Caterpillar, Inc.	20,450	2,952,162
Cummins, Inc.	9,661	1,544,408
EMCOR Group, Inc.	37,937	2,791,784
Ingersoll-Rand plc	6,453	541,342
Masco Corp.	15,135	573,162
Owens Corning	43,168	2,827,072
PACCAR, Inc.	11,275	717,879
The Boeing Co.	22,026	7,346,993
		24,435,667

Commercial & Professional Services 0.9%
ManpowerGroup, Inc.	8,459	809,695
Robert Half International, Inc.	22,050	1,339,538
		2,149,233

Consumer Durables & Apparel 1.9%
Carter's, Inc.	19,576	1,963,864
Deckers Outdoor Corp. *	15,925	1,485,166
Michael Kors Holdings Ltd. *	11,390	779,304
Toll Brothers, Inc.	12,520	527,843
		4,756,177

Consumer Services 2.5%
Darden Restaurants, Inc.	12,524	1,162,979
Hilton Worldwide Holdings, Inc.	11,011	868,107
Las Vegas Sands Corp.	58,233	4,270,226
		6,301,312

Diversified Financials 2.4%
Affiliated Managers Group, Inc.	4,743	781,931
SEI Investments Co.	57,328	3,624,850
T. Rowe Price Group, Inc.	14,450	1,644,699
		6,051,480

Security	Number of Shares	Value ($)
Energy 1.0%
Chevron Corp.	5,053	632,181
Exxon Mobil Corp.	5,836	453,749
Valero Energy Corp.	12,029	1,334,377
		2,420,307

Food & Staples Retailing 1.4%
Costco Wholesale Corp.	10,060	1,983,429
Sprouts Farmers Market, Inc. *	28,998	725,820
Walmart, Inc.	10,469	926,088
		3,635,337

Food, Beverage & Tobacco 2.8%
Molson Coors Brewing Co., Class B	38,153	2,718,020
PepsiCo, Inc.	27,109	2,736,382
Philip Morris International, Inc.	9,788	802,616
TreeHouse Foods, Inc. *	18,998	731,423
		6,988,441

Health Care Equipment & Services 4.4%
Abbott Laboratories	25,519	1,483,420
Allscripts Healthcare Solutions, Inc. *	52,559	610,736
Anthem, Inc.	1,557	367,436
Baxter International, Inc.	6,844	475,658
Boston Scientific Corp. *	48,292	1,386,946
Centene Corp. *	10,032	1,089,275
Cerner Corp. *	27,073	1,577,002
Express Scripts Holding Co. *	11,639	881,072
Hill-Rom Holdings, Inc.	16,404	1,407,955
UnitedHealth Group, Inc.	7,980	1,886,472
		11,165,972

Household & Personal Products 0.5%
Energizer Holdings, Inc.	21,761	1,248,211

Insurance 0.4%
The Allstate Corp.	9,733	952,082

Materials 3.5%
Berry Global Group, Inc. *	82,280	4,525,400
LyondellBasell Industries N.V., Class A	18,003	1,903,457
Westlake Chemical Corp.	23,012	2,461,594
		8,890,451

Media 1.7%
Comcast Corp., Class A	108,576	3,408,201
Live Nation Entertainment, Inc. *	23,446	925,413
		4,333,614

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Table of Contents

Schwab Large-Cap Growth Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
Pharmaceuticals, Biotechnology & Life Sciences 6.9%
AbbVie, Inc.	38,144	3,682,803
Agilent Technologies, Inc.	31,546	2,073,834
Amgen, Inc.	22,079	3,852,344
Biogen, Inc. *	8,088	2,212,877
Celgene Corp. *	22,193	1,933,010
Eli Lilly & Co.	28,320	2,295,902
Gilead Sciences, Inc.	9,559	690,447
Thermo Fisher Scientific, Inc.	2,605	547,962
		17,289,179

Real Estate 2.7%
American Tower Corp.	20,401	2,781,880
Equity LifeStyle Properties, Inc.	16,336	1,456,518
PS Business Parks, Inc.	6,856	790,360
Retail Properties of America, Inc., Class A	70,877	817,920
Senior Housing Properties Trust	60,645	944,243
		6,790,921

Retailing 10.8%
Amazon.com, Inc. *	9,734	15,244,709
Best Buy Co., Inc.	17,690	1,353,816
Booking Holdings, Inc. *	1,127	2,454,606
Kohl's Corp.	11,114	690,402
Netflix, Inc. *	2,537	792,711
Target Corp.	3,895	282,777
The Home Depot, Inc.	33,478	6,186,734
		27,005,755

Semiconductors & Semiconductor Equipment 3.6%
Applied Materials, Inc.	34,455	1,711,380
Lam Research Corp.	14,373	2,659,867
Micron Technology, Inc. *	49,606	2,280,884
NVIDIA Corp.	3,205	720,805
ON Semiconductor Corp. *	56,027	1,237,076
Texas Instruments, Inc.	3,205	325,083
		8,935,095

Software & Services 26.5%
Accenture plc, Class A	24,527	3,708,482
Adobe Systems, Inc. *	7,479	1,657,346
Alliance Data Systems Corp.	4,483	910,273
Alphabet, Inc., Class A *	11,711	11,928,590
Cadence Design Systems, Inc. *	22,315	893,939
Citrix Systems, Inc. *	13,940	1,434,565
Cognizant Technology Solutions Corp., Class A	22,295	1,824,177
Dell Technologies, Inc., Class V *	9,831	705,571
DXC Technology Co.	38,921	4,011,198
eBay, Inc. *	22,178	840,103
Facebook, Inc., Class A *	37,065	6,375,180
First Data Corp., Class A *	73,082	1,322,784
Fortinet, Inc. *	11,184	619,146
GoDaddy, Inc., Class A *	28,967	1,870,110
International Business Machines Corp.	17,901	2,594,929
Intuit, Inc.	19,817	3,661,984

Security	Number of Shares	Value ($)
MasterCard, Inc., Class A	10,041	1,790,009
MAXIMUS, Inc.	39,401	2,664,690
Microsoft Corp.	141,082	13,193,989
Total System Services, Inc.	12,984	1,091,435
Visa, Inc., Class A	27,409	3,477,654
		66,576,154

Technology Hardware & Equipment 9.2%
Apple, Inc.	91,371	15,099,972
CDW Corp.	20,805	1,483,188
F5 Networks, Inc. *	8,024	1,308,634
HP, Inc.	40,793	876,642
NetApp, Inc.	25,052	1,667,962
Tech Data Corp. *	14,251	1,086,639
Western Digital Corp.	20,299	1,599,358
		23,122,395

Telecommunication Services 0.5%
T-Mobile US, Inc. *	22,320	1,350,583

Transportation 2.1%
American Airlines Group, Inc.	5,128	220,145
Delta Air Lines, Inc.	62,641	3,271,113
Ryder System, Inc.	7,536	508,153
Southwest Airlines Co.	22,971	1,213,558
		5,212,969

Utilities 0.5%
FirstEnergy Corp.	35,603	1,224,743
Total Common Stock
(Cost $191,347,671)		247,179,978
Security Rate, Maturity Date	Face Amount ($)	Value ($)
Short-Term Investment 0.6% of net assets

Time Deposit 0.6%
BNP Paribas
1.05%, 05/01/18 (a)	1,482,580	1,482,580
Total Short-Term Investment
(Cost $1,482,580)		1,482,580

*	Non-income producing security.
(a)	The rate shown is the current daily overnight rate.

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Large-Cap Growth Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2018 (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
Assets
Common Stock¹	$247,179,978	$—	$—	$247,179,978
Short-Term Investment¹	—	1,482,580	—	1,482,580
Liabilities
Futures Contracts²	(63,869)	—	—	(63,869)
Total	$247,116,109	$1,482,580	$—	$248,598,689

¹	As categorized in Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

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Table of Contents

Schwab Large-Cap Growth Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $192,830,251)		$248,662,558
Deposit with broker for futures contracts		198,000
Receivables:
Investments sold		2,064,307
Fund shares sold		385,981
Dividends		142,796
Interest		43
Prepaid expenses	+	10,581
Total assets		251,464,266
Liabilities
Payables:
Investment adviser and administrator fees		144,449
Shareholder service fees		50,461
Independent trustees’ fees		100
Fund shares redeemed		73,126
Variation margin on futures contracts		10,980
Accrued expenses	+	59,120
Total liabilities		338,236
Net Assets
Total assets		251,464,266
Total liabilities	–	338,236
Net assets		$251,126,030
Net Assets by Source
Capital received from investors		181,897,771
Net investment income not yet distributed		154,740
Net realized capital gains		13,305,081
Net unrealized capital appreciation		55,768,438

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$251,126,030		14,044,785		$17.88

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Table of Contents

Schwab Large-Cap Growth Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends		$1,707,784
Interest	+	9,728
Total investment income		1,717,512
Expenses
Investment adviser and administrator fees		931,966
Shareholder service fees		313,856
Portfolio accounting fees		19,248
Professional fees		16,140
Shareholder reports		15,962
Registration fees		11,995
Custodian fees		5,787
Transfer agent fees		5,243
Independent trustees’ fees		4,485
Other expenses	+	2,835
Total expenses		1,327,517
Expense reduction by CSIM and its affiliates	–	46,064
Net expenses	–	1,281,453
Net investment income		436,059
Realized and Unrealized Gains (Losses)
Net realized gains on investments		13,138,736
Net realized gains on futures contracts	+	257,435
Net realized gains		13,396,171
Net change in unrealized appreciation (depreciation) on investments		(4,447,910)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(142,072)
Net change in unrealized appreciation (depreciation)	+	(4,589,982)
Net realized and unrealized gains		8,806,189
Increase in net assets resulting from operations		$9,242,248

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

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
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$436,059	$1,138,549
Net realized gains		13,396,171	18,360,856
Net change in unrealized appreciation (depreciation)	+	(4,589,982)	38,535,029
Increase in net assets from operations		9,242,248	58,034,434
Distributions to Shareholders
Distributions from net investment income		(987,413)	(2,362,093)
Distributions from net realized gains	+	(18,471,473)	(7,123,142)
Total distributions		($19,458,886)	($9,485,235)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		1,165,771	$21,445,212	1,572,508	$26,376,506
Shares reinvested		1,090,516	19,356,659	371,671	5,649,403
Shares redeemed	+	(1,984,065)	(36,288,255)	(2,577,225)	(42,665,864)
Net transactions in fund shares		272,222	$4,513,616	(633,046)	($10,639,955)
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		13,772,563	$256,829,052	14,405,609	$218,919,808
Total increase or decrease	+	272,222	(5,703,022)	(633,046)	37,909,244
End of period		14,044,785	$251,126,030	13,772,563	$256,829,052
Net investment income not yet distributed			$154,740		$706,094

₄₃

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Small-Cap Equity Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$23.58	$18.81	$21.19	$25.11	$24.87	$17.72
Income (loss) from investment operations:
Net investment income (loss)	0.03 ¹	(0.00) ¹^,²	0.07 ¹	0.05 ¹	(0.02)	0.09
Net realized and unrealized gains (losses)	0.59	4.86	0.12	0.63	2.71	7.16
Total from investment operations	0.62	4.86	0.19	0.68	2.69	7.25
Less distributions:
Distributions from net investment income	—	(0.09)	(0.04)	(0.02)	(0.07)	(0.10)
Distributions from net realized gains	(3.04)	—	(2.53)	(4.58)	(2.38)	—
Total distributions	(3.04)	(0.09)	(2.57)	(4.60)	(2.45)	(0.10)
Net asset value at end of period	$21.16	$23.58	$18.81	$21.19	$25.11	$24.87
Total return	2.78% ³	25.87%	1.47%	3.01%	11.67%	41.10%
Ratios/Supplemental Data
Ratios to average net assets:
Net operating expenses	1.09% ⁴	1.10%	1.09%	1.09%	1.10%	1.10%
Gross operating expenses	1.09% ⁴	1.10%	1.10%	1.09%	1.10%	1.11%
Net investment income (loss)	0.24% ⁴	(0.01%)	0.37%	0.22%	(0.10%)	0.42%
Portfolio turnover rate	55% ³	99%	85%	95%	103%	84%
Net assets, end of period (x 1,000,000)	$601	$645	$571	$630	$666	$590

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Per-share amount was less than ($0.005).

Not annualized.

⁴

Annualized.

₄₄

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Small-Cap Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

Security	Number of Shares	Value ($)
Common Stock 99.3% of net assets

Automobiles & Components 2.7%
American Axle & Manufacturing Holdings, Inc. *	54,646	838,270
Dana, Inc.	301,571	7,156,280
Modine Manufacturing Co. *	14,323	246,355
Tenneco, Inc.	90,358	4,038,099
Tower International, Inc.	134,074	3,955,183
		16,234,187

Banks 11.8%
1st Source Corp.	56,913	2,959,476
BancFirst Corp.	47,884	2,736,571
BCB Bancorp, Inc.	18,421	285,525
Central Pacific Financial Corp.	97,589	2,837,888
Central Valley Community Bancorp	14,736	303,562
Century Bancorp, Inc., Class A	10,642	851,360
Customers Bancorp, Inc. *	190,648	5,494,475
Essent Group Ltd. *	156,176	5,147,561
Farmers Capital Bank Corp.	9,394	471,109
Federal Agricultural Mortgage Corp., Class C	18,868	1,613,403
Financial Institutions, Inc.	74,775	2,325,502
First BanCorp *	571,800	4,128,396
First Business Financial Services, Inc.	3,201	83,194
First Citizens BancShares, Inc., Class A	6,676	2,885,968
First Financial Corp.	30,553	1,306,141
Great Southern Bancorp, Inc.	7,295	385,541
International Bancshares Corp.	190,492	7,581,582
MGIC Investment Corp. *	706,623	7,080,362
MidSouth Bancorp, Inc.	9,325	130,084
OFG Bancorp	288,665	3,896,977
Peapack-Gladstone Financial Corp.	22,497	743,301
Preferred Bank	6,978	444,778
Radian Group, Inc.	305,196	4,364,303
Republic Bancorp, Inc., Class A	25,091	1,058,087
Sandy Spring Bancorp, Inc.	26,163	1,036,840
Shore Bancshares, Inc.	22,623	409,250
Southern Missouri Bancorp, Inc.	5,033	175,652
TCF Financial Corp.	288,335	7,159,358
The Bank of N.T. Butterfield & Son Ltd.	12,799	607,312
Timberland Bancorp, Inc.	7,071	230,868
United Community Banks, Inc.	75,941	2,424,796
		71,159,222

Capital Goods 10.4%
Applied Industrial Technologies, Inc.	19,468	1,244,979
Argan, Inc.	32,919	1,316,760
Atkore International Group, Inc. *	206,794	3,674,729
Builders FirstSource, Inc. *	116,175	2,117,870
Columbus McKinnon Corp.	39,585	1,420,310
Commercial Vehicle Group, Inc. *	39,730	266,588
Curtiss-Wright Corp.	29,756	3,809,958
EMCOR Group, Inc.	66,926	4,925,084
Foundation Building Materials, Inc. *	13,885	195,084

Security	Number of Shares	Value ($)
Generac Holdings, Inc. *	80,301	3,614,348
Global Brass & Copper Holdings, Inc.	101,803	3,054,090
GMS, Inc. *	127,828	3,983,121
Harsco Corp. *	124,944	2,555,105
Hillenbrand, Inc.	109,475	5,074,166
JELD-WEN Holding, Inc. *	79,222	2,226,930
Lydall, Inc. *	13,533	603,572
Meritor, Inc. *	328,756	6,400,879
Moog, Inc., Class A *	39,939	3,273,800
NCI Building Systems, Inc. *	88,298	1,545,215
Patrick Industries, Inc. *	11,318	643,994
Primoris Services Corp.	70,167	1,795,574
Regal Beloit Corp.	34,328	2,444,154
Sparton Corp. *	130,468	2,409,744
TPI Composites, Inc. *	67,795	1,535,557
Triumph Group, Inc.	15,845	374,734
Vectrus, Inc. *	53,808	1,937,088
		62,443,433

Commercial & Professional Services 4.2%
ACCO Brands Corp.	138,146	1,664,659
ARC Document Solutions, Inc. *	59,050	129,910
Barrett Business Services, Inc.	70,343	6,156,419
Cimpress N.V. *	4,723	679,215
Deluxe Corp.	35,659	2,444,068
Heidrick & Struggles International, Inc.	11,525	433,916
Insperity, Inc.	41,076	3,296,349
Interface, Inc.	72,194	1,588,268
Kelly Services, Inc., Class A	30,611	895,678
LSC Communications, Inc.	72,251	1,262,948
Quad Graphics, Inc.	114,172	2,821,190
RR Donnelley & Sons Co.	41,340	349,323
SP Plus Corp. *	47,656	1,675,108
TriNet Group, Inc. *	33,921	1,752,020
		25,149,071

Consumer Durables & Apparel 1.5%
Deckers Outdoor Corp. *	7,336	684,155
KB Home	123,653	3,282,987
Lifetime Brands, Inc.	14,055	167,255
MCBC Holdings, Inc. *	107,628	2,583,072
Taylor Morrison Home Corp., Class A *	49,601	1,178,520
ZAGG, Inc. *	133,685	1,497,272
		9,393,261

Consumer Services 2.7%
BJ's Restaurants, Inc.	8,730	487,571
Century Casinos, Inc. *	19,690	151,219
Dave & Buster's Entertainment, Inc. *	51,128	2,172,429
Golden Entertainment, Inc. *	26,942	720,698
K12, Inc. *	105,532	1,614,640
Penn National Gaming, Inc. *	82,808	2,509,910
Red Robin Gourmet Burgers, Inc. *	16,024	999,096
Red Rock Resorts, Inc., Class A	48,640	1,468,442

₄₅

Schwab Active Equity Funds | Semiannual Report

See financial notes

Table of Contents

Schwab Small-Cap Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
Ruth's Hospitality Group, Inc.	197,261	5,296,458
Texas Roadhouse, Inc.	9,235	591,779
		16,012,242

Diversified Financials 1.8%
Enova International, Inc. *	78,756	2,307,551
Evercore, Inc., Class A	19,512	1,975,590
Nelnet, Inc., Class A	43,876	2,317,092
Regional Management Corp. *	94,627	3,110,389
Stifel Financial Corp.	24,251	1,413,348
		11,123,970

Energy 4.1%
Basic Energy Services, Inc. *	18,196	294,411
Cloud Peak Energy, Inc. *	118,777	378,899
CVR Energy, Inc. (a)	14,621	504,425
Delek US Holdings, Inc.	90,582	4,290,869
Evolution Petroleum Corp.	100,778	937,236
Exterran Corp. *	78,261	2,292,265
Keane Group, Inc. *	128,489	1,998,004
Mammoth Energy Services, Inc. *	40,748	1,323,495
Matrix Service Co. *	40,512	623,885
Newpark Resources, Inc. *	64,448	676,704
Par Pacific Holdings, Inc. *	368,122	6,210,218
ProPetro Holding Corp. *	35,041	641,250
Renewable Energy Group, Inc. *	34,606	446,417
REX American Resources Corp. *	9,676	723,571
SilverBow Resources, Inc. *	4,458	136,638
TETRA Technologies, Inc. *	341,158	1,340,751
W&T Offshore, Inc. *	62,254	379,749
World Fuel Services Corp.	57,662	1,238,003
		24,436,790

Food, Beverage & Tobacco 3.1%
Coca-Cola Bottling Co. Consolidated	21,438	3,609,945
Dean Foods Co.	546,467	4,705,081
Fresh Del Monte Produce, Inc.	35,825	1,760,799
Sanderson Farms, Inc.	14,177	1,575,915
The Boston Beer Co., Inc., Class A *	30,707	6,882,974
		18,534,714

Health Care Equipment & Services 3.6%
Allscripts Healthcare Solutions, Inc. *	290,858	3,379,770
AngioDynamics, Inc. *	64,632	1,252,568
Cantel Medical Corp.	2,386	267,399
Computer Programs & Systems, Inc. (a)	100,249	2,992,433
Cutera, Inc. *	12,884	646,133
Haemonetics Corp. *	38,319	2,990,415
Halyard Health, Inc. *	13,069	619,079
Integer Holdings Corp. *	26,229	1,439,972
Lantheus Holdings, Inc. *	33,304	592,811
Masimo Corp. *	6,307	565,927
Merit Medical Systems, Inc. *	22,799	1,105,751
Orthofix International N.V. *	40,084	2,445,926
Quality Systems, Inc. *	170,359	2,287,921
RadNet, Inc. *	27,048	358,386
Varex Imaging Corp. *	15,302	550,719
		21,495,210

Household & Personal Products 0.4%
USANA Health Sciences, Inc. *	25,741	2,716,962

Security	Number of Shares	Value ($)
Insurance 4.4%
American Equity Investment Life Holding Co.	221,025	6,674,955
Argo Group International Holdings Ltd.	7,214	421,658
CNO Financial Group, Inc.	286,667	6,146,141
Crawford & Co., Class B	46,614	373,844
Employers Holdings, Inc.	100,588	4,114,049
Heritage Insurance Holdings, Inc. (a)	76,407	1,199,590
National Western Life Group, Inc., Class A	13,075	4,150,136
Universal Insurance Holdings, Inc.	104,763	3,399,559
		26,479,932

Materials 3.7%
Boise Cascade Co.	89,137	3,708,099
Century Aluminum Co. *	72,638	1,268,986
Chase Corp.	3,362	376,544
Ingevity Corp. *	12,447	956,303
Kraton Corp. *	23,349	1,066,349
Louisiana-Pacific Corp.	89,811	2,544,346
Materion Corp.	10,339	524,704
Myers Industries, Inc.	24,689	575,254
OMNOVA Solutions, Inc. *	220,687	2,405,488
PolyOne Corp.	65,500	2,741,175
Ryerson Holding Corp. *	15,280	153,564
Schnitzer Steel Industries, Inc., Class A	14,953	440,366
Stepan Co.	6,535	459,541
SunCoke Energy, Inc. *	177,752	2,042,371
Tredegar Corp.	26,289	462,686
Trinseo S.A.	23,567	1,719,213
Tronox Ltd., Class A	51,640	887,175
		22,332,164

Media 2.9%
AMC Networks, Inc., Class A *	92,475	4,808,700
Entravision Communications Corp., Class A	271,879	1,264,237
Gannett Co., Inc.	258,503	2,499,724
Gray Television, Inc. *	88,123	995,790
MDC Partners, Inc., Class A *	59,698	450,720
New Media Investment Group, Inc.	46,244	766,726
Sinclair Broadcast Group, Inc., Class A	177,580	5,034,393
Townsquare Media, Inc., Class A	28,599	217,924
tronc, Inc. *	96,629	1,774,108
		17,812,322

Pharmaceuticals, Biotechnology & Life Sciences 13.1%
Acorda Therapeutics, Inc. *	80,809	1,866,688
Akebia Therapeutics, Inc. *	105,917	975,496
AMAG Pharmaceuticals, Inc. *	77,115	1,584,713
ANI Pharmaceuticals, Inc. *	18,280	1,084,918
Ardelyx, Inc. *	74,770	358,896
Array BioPharma, Inc. *	47,835	648,643
BioSpecifics Technologies Corp. *	33,812	1,434,305
Calithera Biosciences, Inc. *	40,635	249,905
Cambrex Corp. *	13,783	729,810
Catalent, Inc. *	165,079	6,786,398
Conatus Pharmaceuticals, Inc. *	136,356	464,974
Concert Pharmaceuticals, Inc. *	51,066	931,954
CytomX Therapeutics, Inc. *	56,946	1,497,680
Depomed, Inc. *	62,964	395,414
Durect Corp. *	133,403	270,808
Eagle Pharmaceuticals, Inc. *	44,587	2,318,970
Emergent BioSolutions, Inc. *	78,113	4,050,940
Enanta Pharmaceuticals, Inc. *	14,359	1,336,105
Endo International plc *	59,172	339,056

₄₆

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Small-Cap Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
Exact Sciences Corp. *	27,397	1,370,124
FibroGen, Inc. *	29,518	1,341,593
Genomic Health, Inc. *	114,135	3,621,503
Halozyme Therapeutics, Inc. *	159,041	3,010,646
Horizon Pharma plc *	130,561	1,728,628
Innoviva, Inc. *	80,310	1,164,495
Intersect ENT, Inc. *	32,238	1,287,908
Lannett Co., Inc. *(a)	75,610	1,179,516
Ligand Pharmaceuticals, Inc. *	28,903	4,475,629
Loxo Oncology, Inc. *	6,351	799,654
Luminex Corp.	79,688	1,701,339
MacroGenics, Inc. *	18,148	418,493
Medpace Holdings, Inc. *	19,716	729,295
MiMedx Group, Inc. *(a)	113,552	932,262
Myriad Genetics, Inc. *	85,597	2,421,539
Nektar Therapeutics *	48,149	4,028,145
Novelion Therapeutics, Inc. *(a)	53,018	227,447
PDL BioPharma, Inc. *	603,961	1,763,566
Phibro Animal Health Corp., Class A	56,039	2,370,450
Pieris Pharmaceuticals, Inc. *	24,495	156,033
PRA Health Sciences, Inc. *	43,377	3,564,288
Prestige Brands Holdings, Inc. *	41,931	1,234,449
Protagonist Therapeutics, Inc. *	13,015	112,450
PTC Therapeutics, Inc. *	51,510	1,428,372
Puma Biotechnology, Inc. *	3,635	231,731
Recro Pharma, Inc. *	161,864	1,968,266
Retrophin, Inc. *	81,770	2,052,427
Sangamo Therapeutics, Inc. *	28,532	450,806
Spectrum Pharmaceuticals, Inc. *	34,051	542,092
Supernus Pharmaceuticals, Inc. *	46,980	2,203,362
Vanda Pharmaceuticals, Inc. *	145,180	2,025,261
Veracyte, Inc. *	121,476	736,145
		78,603,587

Real Estate 7.7%
Ashford Hospitality Trust, Inc.	142,074	977,469
CBRE Group, Inc., Class A *	18,702	847,388
Cedar Realty Trust, Inc.	961,876	3,741,698
Consolidated-Tomoka Land Co.	10,795	664,108
Cousins Properties, Inc.	232,094	2,063,316
First Industrial Realty Trust, Inc.	32,422	1,008,648
Gladstone Commercial Corp.	69,059	1,197,483
Global Net Lease, Inc.	154,564	2,876,436
Kite Realty Group Trust	132,059	1,943,908
Lexington Realty Trust	610,825	4,911,033
Marcus & Millichap, Inc. *	72,886	2,489,786
MedEquities Realty Trust, Inc.	338,882	3,453,208
National Health Investors, Inc.	51,059	3,485,798
One Liberty Properties, Inc.	8,680	206,237
Preferred Apartment Communities, Inc., Class A	54,696	804,578
PS Business Parks, Inc.	23,722	2,734,672
Retail Properties of America, Inc., Class A	431,049	4,974,305
Tier REIT, Inc.	372,114	7,073,887
Urstadt Biddle Properties, Inc., Class A	33,995	675,481
		46,129,439

Retailing 2.2%
Big Lots, Inc.	28,843	1,224,385
Liberty Expedia Holdings, Inc., Class A *	55,539	2,265,991
Office Depot, Inc.	173,063	396,314
Rent-A-Center, Inc. (a)	509,639	5,152,450
Signet Jewelers Ltd.	11,447	445,060
Sleep Number Corp. *	33,166	939,925
Tailored Brands, Inc.	48,142	1,518,880

Security	Number of Shares	Value ($)
The Children's Place, Inc.	6,041	770,530
Tilly's, Inc., Class A	55,153	618,265
		13,331,800

Semiconductors & Semiconductor Equipment 4.4%
Advanced Energy Industries, Inc. *	83,785	4,989,397
Brooks Automation, Inc.	20,899	519,967
Cirrus Logic, Inc. *	51,675	1,884,587
Cohu, Inc.	37,705	806,887
Diodes, Inc. *	57,377	1,638,113
Entegris, Inc.	95,683	3,080,993
FormFactor, Inc. *	72,198	828,472
MKS Instruments, Inc.	37,495	3,839,488
SMART Global Holdings, Inc. *	33,646	1,317,241
Ultra Clean Holdings, Inc. *	104,326	1,826,748
Xcerra Corp. *	472,511	5,707,933
		26,439,826

Software & Services 8.7%
Appfolio, Inc., Class A *	34,238	1,641,712
Apptio, Inc., Class A *	19,626	579,163
Aspen Technology, Inc. *	21,327	1,871,444
CommVault Systems, Inc. *	8,960	626,752
CSG Systems International, Inc.	23,909	1,023,066
DHI Group, Inc. *	340,225	476,315
Endurance International Group Holdings, Inc. *	395,471	2,906,712
Envestnet, Inc. *	24,874	1,350,658
Five9, Inc. *	16,476	483,900
Internap Corp. *	74,522	880,105
j2 Global, Inc.	46,491	3,690,456
MAXIMUS, Inc.	38,694	2,616,875
Paylocity Holding Corp. *	32,779	1,790,717
Pegasystems, Inc.	4,807	293,467
Progress Software Corp.	205,072	7,573,309
QuinStreet, Inc. *	23,706	266,455
Stamps.com, Inc. *	27,690	6,306,398
Syntel, Inc. *	136,904	3,953,788
Travelport Worldwide Ltd.	151,268	2,592,734
Verint Systems, Inc. *	98,141	4,131,736
Web.com Group, Inc. *	268,361	4,991,515
Zix Corp. *	463,166	2,338,988
		52,386,265

Technology Hardware & Equipment 3.9%
CalAmp Corp. *	131,300	2,593,175
Ciena Corp. *	175,419	4,517,039
Diebold Nixdorf, Inc.	59,326	910,654
Electro Scientific Industries, Inc. *	77,024	1,386,432
Extreme Networks, Inc. *	264,033	2,825,153
NETGEAR, Inc. *	41,259	2,281,623
Plantronics, Inc.	14,218	926,303
Pure Storage, Inc., Class A *	135,770	2,746,627
Tech Data Corp. *	56,288	4,291,960
Vishay Intertechnology, Inc.	42,840	756,126
		23,235,092

Telecommunication Services 0.5%
Frontier Communications Corp. (a)	36,856	305,905
Telephone & Data Systems, Inc.	66,650	1,821,545
United States Cellular Corp. *	15,527	614,403
Vonage Holdings Corp. *	31,136	348,100
		3,089,953

₄₇

Schwab Active Equity Funds | Semiannual Report

See financial notes

Table of Contents

Schwab Small-Cap Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
Transportation 0.3%
Air Transport Services Group, Inc. *	18,048	365,291
ArcBest Corp.	9,947	319,299
SkyWest, Inc.	16,270	925,763
		1,610,353

Utilities 1.2%
Atlantic Power Corp. *	647,465	1,424,423
Consolidated Water Co., Ltd.	77,624	1,098,380
Spark Energy, Inc., Class A (a)	371,898	4,630,130
		7,152,933
Total Common Stock
(Cost $551,426,102)		597,302,728

Other Investment Company 2.4% of net assets

Securities Lending Collateral 2.4%
Wells Fargo Government Money Market Fund, Select Class 1.59% (b)	14,226,143	14,226,143
Total Other Investment Company
(Cost $14,226,143)		14,226,143
Security Rate, Maturity Date	Face Amount ($)	Value ($)
Short-Term Investments 0.8% of net assets

Time Deposits 0.8%
Barclays Capital, Inc.
U.S. Dollar
1.05%, 05/01/18 (c)	4,956,224	4,956,224

Security Rate, Maturity Date	Face Amount ($)	Value ($)
Brown Brothers Harriman
Canadian Dollar
0.55%, 05/01/18 (c)	475	370
Total Short-Term Investments
(Cost $4,956,594)		4,956,594

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $13,853,197.
(b)	The rate shown is the 7-day yield.
(c)	The rate shown is the current daily overnight rate.

REIT —

Real Estate Investment Trust

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2018 (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
Assets
Common Stock¹	$597,302,728	$—	$—	$597,302,728
Other Investment Company¹	14,226,143	—	—	14,226,143
Short-Term Investments¹	—	4,956,594	—	4,956,594
Liabilities
Futures Contracts²	(115,062)	—	—	(115,062)
Total	$611,413,809	$4,956,594	$—	$616,370,403

¹	As categorized in Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₄₈

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Small-Cap Equity Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $556,382,696) including securities on loan of $13,853,197		$602,259,322
Collateral invested for securities on loan, at value (cost $14,226,143)		14,226,143
Deposit with broker for futures contracts		442,500
Receivables:
Investments sold		7,990,318
Dividends		79,501
Fund shares sold		74,617
Income from securities on loan		62,784
Interest		145
Prepaid expenses	+	6,774
Total assets		625,142,104
Liabilities
Collateral held for securities on loan		14,226,143
Payables:
Investments bought		8,000,760
Investment adviser and administrator fees		406,119
Shareholder service fees		119,234
Independent trustees’ fees		220
Fund shares redeemed		890,212
Variation margin on futures contracts		30,200
Accrued expenses	+	83,315
Total liabilities		23,756,203
Net Assets
Total assets		625,142,104
Total liabilities	–	23,756,203
Net assets		$601,385,901
Net Assets by Source
Capital received from investors		501,385,431
Net investment income not yet distributed		751,866
Net realized capital gains		53,487,040
Net unrealized capital appreciation		45,761,564

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$601,385,901		28,417,032		$21.16

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Small-Cap Equity Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends (net of foreign withholding tax of $5,235)		$3,726,041
Interest		20,023
Securities on loan, net	+	407,515
Total investment income		4,153,579
Expenses
Investment adviser and administrator fees		2,523,550
Shareholder service fees		762,945
Shareholder reports		32,056
Portfolio accounting fees		25,140
Custodian fees		17,639
Professional fees		16,684
Registration fees		12,928
Transfer agent fees		8,159
Independent trustees’ fees		5,565
Other expenses	+	5,206
Total expenses		3,409,872
Expense reduction by CSIM and its affiliates	–	8,159
Net expenses	–	3,401,713
Net investment income		751,866
Realized and Unrealized Gains (Losses)
Net realized gains on investments		54,315,868
Net realized losses on futures contracts		(185,858)
Net realized losses on foreign currency transactions	+	(29)
Net realized gains		54,129,981
Net change in unrealized appreciation (depreciation) on investments		(36,201,955)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(115,062)
Net change in unrealized appreciation (depreciation)	+	(36,317,017)
Net realized and unrealized gains		17,812,964
Increase in net assets resulting from operations		$18,564,830

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

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
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income (loss)		$751,866	($70,340)
Net realized gains		54,129,981	89,523,739
Net change in unrealized appreciation (depreciation)	+	(36,317,017)	52,242,477
Increase in net assets from operations		18,564,830	141,695,876
Distributions to Shareholders
Distributions from net investment income		—	(2,651,266)
Distributions from net realized gains	+	(82,566,358)	—
Total distributions		($82,566,358)	($2,651,266)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		1,511,610	$32,339,337	2,656,779	$58,042,781
Shares reinvested		3,905,166	81,657,028	87,796	1,920,104
Shares redeemed	+	(4,354,322)	(93,543,756)	(5,773,585)	(125,530,925)
Net transactions in fund shares		1,062,454	$20,452,609	(3,029,010)	($65,568,040)
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		27,354,578	$644,934,820	30,383,588	$571,458,250
Total increase or decrease	+	1,062,454	(43,548,919)	(3,029,010)	73,476,570
End of period		28,417,032	$601,385,901	27,354,578	$644,934,820
Net investment income not yet distributed			$751,866		$—

₅₁

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Hedged Equity Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$17.65	$16.25	$17.46	$19.02	$18.62	$16.36
Income (loss) from investment operations:
Net investment income (loss)	0.02 ¹	0.03 ¹	0.03 ¹	(0.01) ¹	(0.08)	(0.10)
Net realized and unrealized gains (losses)	0.51	1.85	0.49	0.89	1.99	2.36
Total from investment operations	0.53	1.88	0.52	0.88	1.91	2.26
Less distributions:
Distributions from net investment income	(0.01)	—	(0.12)	—	—	—
Distributions from net realized gains	(1.07)	(0.48)	(1.61)	(2.44)	(1.51)	—
Total distributions	(1.08)	(0.48)	(1.73)	(2.44)	(1.51)	—
Net asset value at end of period	$17.10	$17.65	$16.25	$17.46	$19.02	$18.62
Total return	3.01% ²	11.71%	3.55%	4.84%	11.07%	13.81%
Ratios/Supplemental Data
Ratios to average net assets:
Net operating expenses (including dividend expense on short sales)	1.63% ³	1.64%	1.85%	1.82%	1.99%	2.48%
Net operating expenses (excluding dividend expense on short sales)	1.33% ³	1.33%	1.57% ⁴	1.54% ⁴	1.52% ⁴	1.48% ⁴
Gross operating expenses	1.64% ³	1.65%	1.87%	1.84%	2.02%	2.52%
Net investment income (loss)	0.22% ³	0.16%	0.22%	(0.06%)	(0.46%)	(0.49%)
Portfolio turnover rate	93% ²	163%	142%	146%	142%	130%
Net assets, end of period (x 1,000,000)	$264	$252	$204	$212	$200	$193

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

The ratios of net operating expenses would have been 1.33%, if stock loan fees on short sales had not been incurred.

₅₂

Schwab Active Equity Funds | Semiannual Report

See financial notes

Table of Contents

Schwab Hedged Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

Security	Number of Shares	Value ($)
Common Stock 98.5% of net assets

Automobiles & Components 1.3%
BorgWarner, Inc.	12,532	613,316
Dana, Inc.	98,152	2,329,147
General Motors Co.	5,949	218,566
Modine Manufacturing Co. *	11,636	200,139
		3,361,168

Banks 5.0%
Bank of America Corp. (a)	67,709	2,025,853
BankUnited, Inc.	12,858	509,305
Citigroup, Inc. (a)	81,435	5,559,568
Citizens Financial Group, Inc.	67,175	2,787,091
Essent Group Ltd. *(a)	13,780	454,189
First BanCorp *	2,653	19,155
First Citizens BancShares, Inc., Class A	1,129	488,055
MGIC Investment Corp. *	45,154	452,443
Zions Bancorp (a)	15,983	875,069
		13,170,728

Capital Goods 8.7%
Aerojet Rocketdyne Holdings, Inc. *(a)	26,960	753,262
AGCO Corp.	16,034	1,005,011
Allison Transmission Holdings, Inc. (a)	107,451	4,189,515
Argan, Inc.	9,099	363,960
Atkore International Group, Inc. *	27,012	480,003
Cummins, Inc.	5,254	839,904
General Electric Co.	57,502	809,053
GMS, Inc. *	30,516	950,879
Harsco Corp. *	22,847	467,221
Hillenbrand, Inc. (a)	67,761	3,140,722
Masco Corp.	37,484	1,419,519
Masonite International Corp. *	7,600	461,320
Meritor, Inc. *	93,850	1,827,260
NCI Building Systems, Inc. *	52,153	912,678
Owens Corning	14,769	967,222
PACCAR, Inc.	3,806	242,328
Primoris Services Corp.	64,780	1,657,720
The Boeing Co. (a)	6,140	2,048,058
TriMas Corp. *	16,911	458,288
		22,993,923

Commercial & Professional Services 0.4%
ACCO Brands Corp.	29,257	352,547
Insperity, Inc.	2,160	173,340
TriNet Group, Inc. *	9,436	487,369
		1,013,256

Consumer Durables & Apparel 2.3%
Deckers Outdoor Corp. *	14,359	1,339,120
KB Home (a)	25,920	688,176
Michael Kors Holdings Ltd. *	2,697	184,529
PulteGroup, Inc.	23,406	710,606

Security	Number of Shares	Value ($)
Ralph Lauren Corp.	1,877	206,189
Toll Brothers, Inc.	30,924	1,303,756
Tupperware Brands Corp. (a)	7,416	330,457
VF Corp.	15,037	1,216,042
Whirlpool Corp.	958	148,442
		6,127,317

Consumer Services 2.5%
Carnival Corp.	5,594	352,758
Darden Restaurants, Inc. (a)	6,840	635,162
Las Vegas Sands Corp. (a)	57,266	4,199,316
Penn National Gaming, Inc. *	4,584	138,941
Royal Caribbean Cruises Ltd.	10,014	1,083,415
Scientific Games Corp., Class A *	3,185	169,760
		6,579,352

Diversified Financials 5.0%
Affiliated Managers Group, Inc.	11,165	1,840,662
Capital One Financial Corp.	37,059	3,358,286
Morgan Stanley	448	23,126
Santander Consumer USA Holdings, Inc. (a)	241,806	4,461,321
Synchrony Financial	104,199	3,456,281
Waddell & Reed Financial, Inc., Class A	5,912	119,659
		13,259,335

Energy 11.0%
Antero Resources Corp. *	26,958	512,202
Baker Hughes, a GE Co.	29,115	1,051,343
Cabot Oil & Gas Corp.	56,415	1,348,883
Chevron Corp.	3,478	435,132
Cimarex Energy Co.	12,161	1,223,275
ConocoPhillips (a)	40,475	2,651,112
Devon Energy Corp. (a)	76,223	2,769,182
EOG Resources, Inc.	10,380	1,226,605
Halliburton Co. (a)	106,713	5,654,722
Marathon Petroleum Corp.	52,939	3,965,660
Occidental Petroleum Corp.	41,937	3,240,053
PBF Energy, Inc., Class A	6,345	243,204
Southwestern Energy Co. *(a)	360,735	1,479,013
Valero Energy Corp. (a)	24,925	2,764,930
World Fuel Services Corp. (a)	22,140	475,346
		29,040,662

Food & Staples Retailing 0.6%
Costco Wholesale Corp.	983	193,808
Walmart, Inc. (a)	14,928	1,320,531
		1,514,339

Food, Beverage & Tobacco 3.8%
Archer-Daniels-Midland Co.	6,015	272,961
Bunge Ltd.	7,683	554,943
Coca-Cola Bottling Co. Consolidated	6,663	1,121,983
Dean Foods Co. (a)	111,052	956,158
Fresh Del Monte Produce, Inc. (a)	11,456	563,062

₅₃

Schwab Active Equity Funds | Semiannual Report

See financial notes

Table of Contents

Schwab Hedged Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
General Mills, Inc.	1,791	78,338
Molson Coors Brewing Co., Class B	16,820	1,198,257
PepsiCo, Inc. (a)	12,324	1,243,985
Philip Morris International, Inc.	9,759	800,238
Pilgrim's Pride Corp. *	42,538	918,821
Sanderson Farms, Inc.	8,977	997,883
The Hershey Co.	8,478	779,467
TreeHouse Foods, Inc. *(a)	11,588	446,138
		9,932,234

Health Care Equipment & Services 3.8%
Abbott Laboratories (a)	41,229	2,396,642
Allscripts Healthcare Solutions, Inc. *	112,904	1,311,944
AmerisourceBergen Corp.	3,098	280,617
Analogic Corp.	6,268	520,871
Baxter International, Inc.	2,232	155,124
Centene Corp. *	5,076	551,152
DaVita, Inc. *	2,039	128,029
Express Scripts Holding Co. *(a)	42,555	3,221,413
Haemonetics Corp. *	14,719	1,148,671
Integer Holdings Corp. *	7,568	415,483
		10,129,946

Household & Personal Products 2.9%
Energizer Holdings, Inc.	36,247	2,079,128
Herbalife Nutrition Ltd. *	9,918	1,048,630
The Estee Lauder Cos., Inc., Class A	8,744	1,294,899
The Procter & Gamble Co.	22,866	1,654,126
USANA Health Sciences, Inc. *(a)	15,883	1,676,451
		7,753,234

Insurance 4.6%
American Equity Investment Life Holding Co.	27,103	818,511
American National Insurance Co. (a)	22,054	2,661,256
Assured Guaranty Ltd.	33,302	1,208,529
CNA Financial Corp. (a)	9,856	497,334
CNO Financial Group, Inc.	38,023	815,213
Lincoln National Corp.	10,994	776,616
National Western Life Group, Inc., Class A	499	158,388
The Allstate Corp. (a)	52,176	5,103,856
Universal Insurance Holdings, Inc.	4,566	148,167
		12,187,870

Materials 3.5%
Alcoa Corp. *(a)	41,423	2,120,858
Berry Global Group, Inc. *(a)	87,303	4,801,665
Freeport-McMoRan, Inc.	36,463	554,602
Kraton Corp. *	24,636	1,125,126
Platform Specialty Products Corp. *	39,480	397,564
Stepan Co.	3,120	219,398
		9,219,213

Media 1.7%
Comcast Corp., Class A	47,800	1,500,442
Gray Television, Inc. *	19,354	218,700
Live Nation Entertainment, Inc. *(a)	36,378	1,435,840
News Corp., Class A	24,235	387,275
Viacom, Inc., Class B	11,732	353,837
World Wrestling Entertainment, Inc., Class A	11,077	440,754
		4,336,848

Security	Number of Shares	Value ($)
Pharmaceuticals, Biotechnology & Life Sciences 9.1%
AbbVie, Inc. (a)	28,672	2,768,282
Agilent Technologies, Inc.	8,452	555,634
Alexion Pharmaceuticals, Inc. *	1,159	136,333
Amgen, Inc. (a)	22,391	3,906,782
Biogen, Inc. *	6,332	1,732,435
Bristol-Myers Squibb Co.	25,687	1,339,063
Celgene Corp. *(a)	37,317	3,250,311
CytomX Therapeutics, Inc. *	2,728	71,746
Eli Lilly & Co. (a)	71,234	5,774,940
Gilead Sciences, Inc.	8,884	641,691
Johnson & Johnson	22,089	2,794,038
Pfizer, Inc. (a)	28,947	1,059,750
		24,031,005

Real Estate 4.6%
American Tower Corp. (a)	15,757	2,148,625
Apartment Investment & Management Co., Class A	7,365	299,019
CBRE Group, Inc., Class A *	5,989	271,362
Equity LifeStyle Properties, Inc.	5,433	484,406
Lexington Realty Trust	198,133	1,592,989
Realogy Holdings Corp.	42,927	1,065,019
Retail Properties of America, Inc., Class A (a)	315,339	3,639,012
Senior Housing Properties Trust (a)	124,691	1,941,439
The RMR Group, Inc., Class A	1,116	83,030
Ventas, Inc.	13,762	707,642
		12,232,543

Retailing 3.5%
Amazon.com, Inc. *(a)	2,223	3,481,507
Best Buy Co., Inc.	11,242	860,350
GameStop Corp., Class A	9,537	130,180
Lowe's Cos., Inc. (a)	7,802	643,119
Qurate Retail Group, Inc. QVC Group, Class A *	60,058	1,405,958
Rent-A-Center, Inc. (a)	121,412	1,227,475
Shutterfly, Inc. *(a)	1,381	111,751
Signet Jewelers Ltd.	2,851	110,847
Tailored Brands, Inc.	23,256	733,727
The Children's Place, Inc.	3,822	487,496
		9,192,410

Semiconductors & Semiconductor Equipment 1.5%
Lam Research Corp.	4,547	841,468
Micron Technology, Inc. *(a)	61,736	2,838,621
ON Semiconductor Corp. *(a)	12,367	273,063
Teradyne, Inc.	1,650	53,708
		4,006,860

Software & Services 8.8%
Accenture plc, Class A	28,183	4,261,270
Alliance Data Systems Corp. (a)	5,574	1,131,801
Alphabet, Inc., Class A *(a)	3,751	3,820,693
Cadence Design Systems, Inc. *	11,743	470,424
CDK Global, Inc.	5,426	353,992
Cognizant Technology Solutions Corp., Class A	3,610	295,370
Dell Technologies, Inc., Class V *	35,711	2,562,978
Endurance International Group Holdings, Inc. *	110,374	811,249
Envestnet, Inc. *	1,872	101,650
Fortinet, Inc. *	6,235	345,170

₅₄

Schwab Active Equity Funds | Semiannual Report

See financial notes

Table of Contents

Schwab Hedged Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
GoDaddy, Inc., Class A *	42,669	2,754,711
International Business Machines Corp.	4,285	621,154
MAXIMUS, Inc.	7,839	530,151
Microsoft Corp.	27,204	2,544,118
Progress Software Corp. (a)	29,931	1,105,352
Stamps.com, Inc. *	1,428	325,227
Verint Systems, Inc. *	17,349	730,393
Web.com Group, Inc. *(a)	22,607	420,490
		23,186,193

Technology Hardware & Equipment 9.0%
Apple, Inc. (a)	21,714	3,588,456
ARRIS International plc *(a)	103,811	2,802,897
CDW Corp.	6,272	447,131
Cisco Systems, Inc.	26,811	1,187,459
Extreme Networks, Inc. *	10,850	116,095
F5 Networks, Inc. *(a)	18,844	3,073,268
HP, Inc. (a)	16,020	344,270
Jabil, Inc.	96,162	2,557,909
Juniper Networks, Inc. (a)	123,790	3,043,996
Motorola Solutions, Inc.	5,191	570,128
OSI Systems, Inc. *	1,025	65,621
Tech Data Corp. *(a)	44,206	3,370,707
Western Digital Corp.	23,509	1,852,274
Zebra Technologies Corp., Class A *	4,652	627,229
		23,647,440

Telecommunication Services 0.5%
T-Mobile US, Inc. *	2,870	173,663
Telephone & Data Systems, Inc. (a)	40,772	1,114,299
		1,287,962

Transportation 2.4%
Alaska Air Group, Inc.	11,647	756,240
Delta Air Lines, Inc. (a)	94,176	4,917,871
Southwest Airlines Co.	10,993	580,760
		6,254,871

Utilities 2.0%
CenterPoint Energy, Inc.	3,971	100,586
CMS Energy Corp.	3,081	145,392
FirstEnergy Corp. (a)	120,754	4,153,938
PG&E Corp. (a)	16,784	773,742
		5,173,658
Total Common Stock
(Cost $244,213,935)		259,632,367

Other Investment Company 1.0% of net assets

Money Market Fund 1.0%
State Street Institutional U.S. Government Money Market Fund, Premier Class 1.63% (b)	2,763,456	2,763,456
Total Other Investment Company
(Cost $2,763,456)		2,763,456

₅₅

Schwab Active Equity Funds | Semiannual Report

See financial notes

Table of Contents

Schwab Hedged Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

In addition to the above, the fund had the following short sale positions at 04/30/18:

Security	Number of Shares	Value ($)
Short Sales (40.2%) of net assets

Automobiles & Components (1.3%)
Tesla, Inc. *	11,459	(3,367,800)

Banks (0.2%)
Flagstar Bancorp, Inc. *	12,506	(432,082)
United Bankshares, Inc.	6,641	(225,462)
		(657,544)

Capital Goods (4.9%)
AAON, Inc.	93,644	(3,183,896)
Albany International Corp., Class A	34,930	(2,066,110)
American Woodmark Corp. *	1,046	(85,981)
Chart Industries, Inc. *	10,813	(613,530)
Cubic Corp.	10,124	(625,157)
GATX Corp.	26,539	(1,731,404)
John Bean Technologies Corp.	4,042	(435,525)
Lennox International, Inc.	192	(37,127)
Mercury Systems, Inc. *	9,758	(313,037)
Mueller Industries, Inc.	17,762	(482,771)
Wabtec Corp.	37,244	(3,307,640)
		(12,882,178)

Commercial & Professional Services (0.9%)
CoStar Group, Inc. *	2,500	(916,650)
Healthcare Services Group, Inc.	39,970	(1,544,041)
		(2,460,691)

Consumer Durables & Apparel (1.6%)
iRobot Corp. *	3,935	(229,646)
Mattel, Inc.	45,365	(671,402)
Newell Brands, Inc.	100,720	(2,782,894)
Under Armour, Inc., Class A *	24,566	(436,292)
		(4,120,234)

Consumer Services (1.1%)
Caesars Entertainment Corp. *	231,027	(2,622,156)
Eldorado Resorts, Inc. *	4,830	(195,615)
		(2,817,771)

Diversified Financials (2.6%)
Credit Acceptance Corp. *	3,139	(1,038,507)
LendingClub Corp. *	243,960	(656,252)
PRA Group, Inc. *	94,317	(3,357,685)
Virtu Financial, Inc., Class A	48,387	(1,741,932)
		(6,794,376)

Energy (7.4%)
C&J Energy Services, Inc. *	3,909	(116,723)
Callon Petroleum Co. *	33,067	(459,962)
Cheniere Energy, Inc. *	14,172	(824,243)
Diamondback Energy, Inc. *	6,580	(845,201)
Ensco plc, Class A	527,154	(2,978,420)
Golar LNG Ltd.	101,891	(3,275,796)
Gulfport Energy Corp. *	76,379	(710,325)
Helmerich & Payne, Inc.	9,281	(645,494)

Security	Number of Shares	Value ($)
Nabors Industries Ltd.	307,211	(2,337,876)
Parsley Energy, Inc., Class A *	108,276	(3,251,528)
Patterson-UTI Energy, Inc.	6,625	(141,907)
QEP Resources, Inc. *	109,544	(1,334,246)
SemGroup Corp., Class A	96,609	(2,429,716)
Tellurian, Inc. *	25,000	(238,000)
		(19,589,437)

Food & Staples Retailing (0.5%)
PriceSmart, Inc.	15,268	(1,337,477)

Food, Beverage & Tobacco (0.5%)
The Kraft Heinz Co.	25,864	(1,458,212)

Health Care Equipment & Services (1.4%)
Acadia Healthcare Co., Inc. *	3,637	(129,404)
DexCom, Inc. *	1,241	(90,816)
Envision Healthcare Corp. *	16,843	(626,054)
HealthEquity, Inc. *	24,522	(1,610,360)
Integra LifeSciences Holdings Corp. *	2,458	(151,487)
Neogen Corp. *	2,211	(150,680)
Teladoc, Inc. *	4,902	(210,786)
Wright Medical Group N.V. *	38,451	(754,024)
		(3,723,611)

Household & Personal Products (0.6%)
WD-40 Co.	11,747	(1,549,429)

Insurance (1.5%)
Alleghany Corp.	239	(137,346)
Markel Corp. *	355	(401,164)
RenaissanceRe Holdings Ltd.	25,560	(3,477,183)
		(4,015,693)

Materials (2.4%)
Balchem Corp.	4,998	(441,024)
Cleveland-Cliffs, Inc. *	257,392	(1,909,849)
Martin Marietta Materials, Inc.	13,277	(2,585,961)
Sealed Air Corp.	26,424	(1,158,692)
The Mosaic Co.	6,373	(171,752)
		(6,267,278)

Media (0.7%)
Liberty Broadband Corp., Class A *	26,537	(1,870,328)

Pharmaceuticals, Biotechnology & Life Sciences (0.8%)
Bluebird Bio, Inc. *	5,039	(857,386)
MyoKardia, Inc. *	2,342	(115,695)
Syneos Health, Inc. *	9,574	(364,769)
The Medicines Co. *	7,956	(239,396)
Ultragenyx Pharmaceutical, Inc. *	10,151	(516,077)
		(2,093,323)

Real Estate (3.2%)
Acadia Realty Trust	68,401	(1,614,264)
Education Realty Trust, Inc.	12,154	(399,988)
Life Storage, Inc.	5,787	(511,802)
Terreno Realty Corp.	30,085	(1,117,658)

₅₆

Schwab Active Equity Funds | Semiannual Report

See financial notes

Table of Contents

Schwab Hedged Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
The Howard Hughes Corp. *	30,296	(4,099,049)
Urban Edge Properties	30,639	(630,244)
		(8,373,005)

Retailing (1.0%)
At Home Group, Inc. *	8,302	(292,147)
Camping World Holdings, Inc., Class A	7,992	(228,811)
CarMax, Inc. *	15,684	(980,250)
Floor & Decor Holdings, Inc., Class A *	9,110	(506,425)
Netflix, Inc. *	339	(105,924)
TripAdvisor, Inc. *	13,643	(510,521)
		(2,624,078)

Semiconductors & Semiconductor Equipment (1.2%)
Ambarella, Inc. *	17,266	(804,423)
Cree, Inc. *	25,331	(945,353)
MACOM Technology Solutions Holdings, Inc. *	27,625	(459,128)
MaxLinear, Inc. *	19,181	(428,312)
Power Integrations, Inc.	6,223	(421,919)
		(3,059,135)

Software & Services (2.4%)
2U, Inc. *	14,626	(1,177,247)
Ellie Mae, Inc. *	11,885	(1,151,300)
Gartner, Inc. *	30,312	(3,676,542)
HubSpot, Inc. *	2,274	(240,817)
		(6,245,906)

Security	Number of Shares	Value ($)
Technology Hardware & Equipment (2.6%)
Finisar Corp. *	76,129	(1,186,090)
II-VI, Inc. *	33,578	(1,279,322)
Infinera Corp. *	213,962	(2,507,635)
ViaSat, Inc. *	30,585	(1,956,828)
		(6,929,875)

Telecommunication Services (0.3%)
Iridium Communications, Inc. *	70,572	(839,807)

Transportation (0.9%)
Allegiant Travel Co.	3,280	(525,620)
Knight-Swift Transportation Holdings, Inc.	30,521	(1,190,624)
Spirit Airlines, Inc. *	17,752	(634,102)
		(2,350,346)

Utilities (0.2%)
TerraForm Power, Inc., Class A	59,903	(667,918)
Total Short Sales
(Proceeds $106,222,618)		(106,095,452)

*	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.

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2018 (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
Assets
Common Stock¹	$259,632,367	$—	$—	$259,632,367
Other Investment Company¹	2,763,456	—	—	2,763,456
Liabilities
Short Sales¹	(106,095,452)	—	—	(106,095,452)
Total	$156,300,371	$—	$—	$156,300,371

¹	As categorized in Portfolio Holdings.

₅₇

Schwab Active Equity Funds | Semiannual Report

See financial notes

Table of Contents

Schwab Hedged Equity Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $246,977,391)		$262,395,823
Deposit with broker for short sales		105,593,096
Receivables:
Investments sold		8,088,989
Rebates and fees on short sales, net		11,615
Fund shares sold		2,137,221
Dividends		172,200
Prepaid expenses	+	13,070
Total assets		378,412,014
Liabilities
Securities sold short, at value (proceeds $106,222,618)		106,095,452
Payables:
Investments bought		7,917,127
Investment adviser and administrator fees		226,405
Shareholder service fees		45,166
Independent trustees’ fees		111
Fund shares redeemed		405,663
Dividends on short sales		4,740
Accrued expenses	+	50,735
Total liabilities		114,745,399
Net Assets
Total assets		378,412,014
Total liabilities	–	114,745,399
Net assets		$263,666,615
Net Assets by Source
Capital received from investors		230,853,731
Net investment income not yet distributed		277,334
Net realized capital gains		16,989,952
Net unrealized capital appreciation		15,545,598

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$263,666,615		15,417,514		$17.10

₅₈

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Hedged Equity Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends		$2,050,805
Rebates on short sales, net of fees	+	324,300
Total investment income		2,375,105
Expenses
Investment adviser and administrator fees		1,350,537
Shareholder service fees		276,991
Dividends on short sales		391,945
Portfolio accounting fees		18,354
Professional fees		16,031
Registration fees		15,619
Custodian fees		11,691
Transfer agent fees		7,989
Shareholder reports		7,226
Independent trustees’ fees		4,486
Interest expense		1,484
Other expenses	+	2,886
Total expenses		2,105,239
Expense reduction by CSIM and its affiliates	–	7,989
Net expenses	–	2,097,250
Net investment income		277,855
Realized and Unrealized Gains (Losses)
Net realized gains on investments		26,550,824
Net realized losses on short sales	+	(9,203,449)
Net realized gains		17,347,375
Net change in unrealized appreciation (depreciation) on investments		(15,690,468)
Net change in unrealized appreciation (depreciation) on short sales	+	5,433,033
Net change in unrealized appreciation (depreciation)	+	(10,257,435)
Net realized and unrealized gains		7,089,940
Increase in net assets resulting from operations		$7,367,795

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Table of Contents

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
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$277,855	$388,179
Net realized gains		17,347,375	15,228,535
Net change in unrealized appreciation (depreciation)	+	(10,257,435)	9,797,381
Increase in net assets from operations		7,367,795	25,414,095
Distributions to Shareholders
Distributions from net investment income		(125,442)	—
Distributions from net realized gains	+	(15,117,887)	(6,371,171)
Total distributions		($15,243,329)	($6,371,171)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		2,474,730	$42,806,974	5,562,308	$94,777,684
Shares reinvested		883,040	15,099,992	311,206	5,290,506
Shares redeemed	+	(2,199,398)	(38,077,215)	(4,198,129)	(71,890,789)
Net transactions in fund shares		1,158,372	$19,829,751	1,675,385	$28,177,401
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		14,259,142	$251,712,398	12,583,757	$204,492,073
Total increase	+	1,158,372	11,954,217	1,675,385	47,220,325
End of period		15,417,514	$263,666,615	14,259,142	$251,712,398
Net investment income not yet distributed			$277,334		$124,921

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Table of Contents

Schwab Health Care Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$25.44	$21.56	$26.68	$28.19	$24.57	$20.59
Income (loss) from investment operations:
Net investment income (loss)	0.13 ¹	0.21 ¹	0.19 ¹	0.14 ¹	0.23	0.22
Net realized and unrealized gains (losses)	0.35	4.24	(1.52)	1.78	5.84	6.26
Total from investment operations	0.48	4.45	(1.33)	1.92	6.07	6.48
Less distributions:
Distributions from net investment income	(0.24)	(0.20)	(0.16)	(0.21)	(0.19)	(0.33)
Distributions from net realized gains	(1.54)	(0.37)	(3.63)	(3.22)	(2.26)	(2.17)
Total distributions	(1.78)	(0.57)	(3.79)	(3.43)	(2.45)	(2.50)
Net asset value at end of period	$24.14	$25.44	$21.56	$26.68	$28.19	$24.57
Total return	1.91% ²	21.10%	(5.78%)	7.26%	27.06%	35.46%
Ratios/Supplemental Data
Ratios to average net assets:
Net operating expenses	0.79% ³	0.81%	0.80%	0.79%	0.80%	0.82%
Gross operating expenses	0.80% ³	0.81%	0.80%	0.80%	0.81%	0.83%
Net investment income (loss)	1.07% ³	0.89%	0.82%	0.52%	0.93%	1.06%
Portfolio turnover rate	25% ²	42%	54%	75%	57%	54%
Net assets, end of period (x 1,000,000)	$804	$853	$853	$1,118	$1,064	$816

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Health Care Fund

Portfolio Holdings as of April 30, 2018 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

Security	Number of Shares	Value ($)
Common Stock 99.5% of net assets

Australia 1.5%
Ansell Ltd.	307,410	6,006,159
Cochlear Ltd.	11,283	1,642,010
CSL Ltd.	31,485	4,032,883
Estia Health Ltd.	94,000	250,517
		11,931,569

Denmark 3.1%
Bavarian Nordic A/S *	54,354	1,483,639
GN Store Nord A/S	54,500	1,914,801
H. Lundbeck A/S	104,106	6,031,030
Novo Nordisk A/S, Class B	337,614	15,877,282
		25,306,752

France 0.5%
Sanofi (a)	54,465	4,306,126

Germany 1.2%
Bayer AG	37,598	4,493,696
Evotec AG *	99,174	1,600,487
Fresenius Medical Care AG & Co. KGaA	33,157	3,364,466
		9,458,649

Hong Kong 1.1%
China Medical System Holdings Ltd.	137,000	335,482
Consun Pharmaceutical Group Ltd.	774,000	834,055
CSPC Pharmaceutical Group Ltd.	86,000	219,047
Sihuan Pharmaceutical Holdings Group Ltd.	1,792,000	433,105
Sino Biopharmaceutical Ltd.	3,352,000	7,058,671
SSY Group Ltd.	306,000	309,193
		9,189,553

Ireland 3.9%
Allergan plc	57,761	8,874,978
Medtronic plc	203,565	16,311,663
Perrigo Co., plc	74,100	5,790,174
		30,976,815

Japan 2.6%
Astellas Pharma, Inc.	481,400	7,041,069
EPS Holdings, Inc.	76,943	1,567,596
Hoya Corp.	141,000	7,532,904
Japan Lifeline Co., Ltd.	14,100	413,067
KYORIN Holdings, Inc.	21,000	410,650
Paramount Bed Holdings Co., Ltd.	8,700	432,869
Shionogi & Co., Ltd.	57,000	2,929,327
Takara Bio, Inc.	21,400	415,169
Takeda Pharmaceutical Co., Ltd.	7,300	307,403
		21,050,054

Security	Number of Shares	Value ($)
New Zealand 0.2%
a2 Milk Co., Ltd. *	173,617	1,475,499

Republic of Korea 0.9%
Celltrion, Inc. *	13,124	3,292,379
Hanall Biopharma Co., Ltd. *	7,000	198,050
Hugel, Inc. *	4,789	2,247,927
Huons Co., Ltd.	7,300	828,010
Medy-Tox, Inc.	620	402,954
Samjin Pharmaceutical Co., Ltd.	7,800	325,189
		7,294,509

Sweden 0.9%
Swedish Orphan Biovitrum AB *	308,744	6,632,449
Vitrolife AB	11,600	849,179
		7,481,628

Switzerland 5.9%
Lonza Group AG *	47,612	11,633,127
Novartis AG	215,320	16,574,105
Roche Holding AG	84,896	18,862,818
Siegfried Holding AG *	1,130	392,653
		47,462,703

Taiwan 0.2%
St. Shine Optical Co., Ltd.	57,800	1,549,637

United Kingdom 2.6%
AstraZeneca plc	22,900	1,603,053
GlaxoSmithKline plc	507,906	10,187,151
Indivior plc *	955,507	5,917,061
Shire plc	25,168	1,340,192
Smith & Nephew plc	97,182	1,861,136
		20,908,593

United States 74.9%
Abbott Laboratories	308,300	17,921,479
AbbVie, Inc.	333,099	32,160,708
Agilent Technologies, Inc.	131,200	8,625,088
Alexion Pharmaceuticals, Inc. *	77,700	9,139,851
Align Technology, Inc. *	6,200	1,549,070
Allscripts Healthcare Solutions, Inc. *	30,812	358,035
AMAG Pharmaceuticals, Inc. *	100,022	2,055,452
Amgen, Inc.	179,211	31,268,735
Analogic Corp.	17,400	1,445,940
AngioDynamics, Inc. *	25,100	486,438
Anthem, Inc.	41,900	9,887,981
Baxter International, Inc.	87,073	6,051,574
Becton, Dickinson & Co.	23,800	5,518,506
Bio-Techne Corp.	29,800	4,497,118
Biogen, Inc. *	69,314	18,964,310
Boston Scientific Corp. *	266,700	7,659,624
Bristol-Myers Squibb Co.	342,134	17,835,445

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Table of Contents

Schwab Health Care Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
Catalent, Inc. *	99,000	4,069,890
Celgene Corp. *	221,087	19,256,678
Centene Corp. *	23,526	2,554,453
Cigna Corp.	37,900	6,511,978
Danaher Corp.	127,000	12,740,640
DaVita, Inc. *	17,700	1,111,383
Edwards Lifesciences Corp. *	24,000	3,056,640
Eli Lilly & Co.	245,629	19,913,143
Emergent BioSolutions, Inc. *	153,800	7,976,068
Express Scripts Holding Co. *	160,239	12,130,092
Genomic Health, Inc. *	205,983	6,535,841
Gilead Sciences, Inc.	320,885	23,177,524
Haemonetics Corp. *	78,328	6,112,717
Halozyme Therapeutics, Inc. *	158,900	3,007,977
Halyard Health, Inc. *	71,700	3,396,429
HCA Healthcare, Inc.	40,000	3,829,600
Hill-Rom Holdings, Inc.	82,600	7,089,558
Humana, Inc.	19,300	5,677,674
IDEXX Laboratories, Inc. *	5,300	1,030,797
Illumina, Inc. *	26,740	6,442,468
Intuitive Surgical, Inc. *	17,700	7,801,806
Johnson & Johnson	536,202	67,824,191
Laboratory Corp. of America Holdings *	6,600	1,126,950
Ligand Pharmaceuticals, Inc. *	2,700	418,095
Magellan Health, Inc. *	19,000	1,593,150
McKesson Corp.	19,100	2,983,611
Merck & Co., Inc.	465,510	27,404,574
Meridian Bioscience, Inc.	124,000	1,810,400
Mettler-Toledo International, Inc. *	700	391,951
Mylan N.V. *	100,000	3,876,000
Myriad Genetics, Inc. *	50,118	1,417,838
Nektar Therapeutics *	21,800	1,823,788
Pfizer, Inc.	1,237,800	45,315,858
Prestige Brands Holdings, Inc. *	20,983	617,740
PTC Therapeutics, Inc. *	27,255	755,781
Quality Systems, Inc. *	172,400	2,315,332
Quidel Corp. *	45,900	2,602,530
Regeneron Pharmaceuticals, Inc. *	11,100	3,370,848
Sangamo Therapeutics, Inc. *	38,398	606,688
Stryker Corp.	35,600	6,031,352
Tenet Healthcare Corp. *	144,000	3,447,360
Thermo Fisher Scientific, Inc.	80,150	16,859,553
Triple-S Management Corp., Class B *	80,800	2,290,680
UnitedHealth Group, Inc.	169,591	40,091,312
Varian Medical Systems, Inc. *	41,600	4,808,544

Security	Number of Shares	Value ($)
Vertex Pharmaceuticals, Inc. *	48,300	7,397,628
Waters Corp. *	13,100	2,468,171
Zimmer Biomet Holdings, Inc.	20,668	2,380,334
Zoetis, Inc.	134,500	11,228,060
		602,107,029
Total Common Stock
(Cost $603,810,261)		800,499,116

Other Investment Company 0.6% of net assets

Securities Lending Collateral 0.6%
Wells Fargo Government Money Market Fund, Select Class 1.59% (b)	4,284,155	4,284,155
Total Other Investment Company
(Cost $4,284,155)		4,284,155
Issuer Rate, Maturity Date	Face Amount ($)	Value ($)
Short-Term Investments 0.0% of net assets

Time Deposits 0.0%
Brown Brothers Harriman
Swiss Franc
(1.45%), 05/02/18 (c)	2,826	2,851
Danish Krone
(0.80%), 05/01/18 (c)	173	29
Total Short-Term Investments
(Cost $2,880)		2,880

At April 30, 2018, the values of certain foreign securities held by the fund aggregating $167,415,272 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2(a) for additional information)

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $4,090,760.
(b)	The rate shown is the 7-day yield.
(c)	The rate shown is the current daily overnight rate.

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Health Care Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2018 (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
Assets
Common Stock¹	$633,083,844	$—	$—	$633,083,844
Australia	—	11,931,569	—	11,931,569
Denmark	—	25,306,752	—	25,306,752
France	—	4,306,126	—	4,306,126
Germany	—	9,458,649	—	9,458,649
Hong Kong	—	9,189,553	—	9,189,553
Japan	—	21,050,054	—	21,050,054
New Zealand	—	1,475,499	—	1,475,499
Republic of Korea	—	7,294,509	—	7,294,509
Sweden	—	7,481,628	—	7,481,628
Switzerland	—	47,462,703	—	47,462,703
Taiwan	—	1,549,637	—	1,549,637
United Kingdom	—	20,908,593	—	20,908,593
Other Investment Company¹	4,284,155	—	—	4,284,155
Short-Term Investments¹	—	2,880	—	2,880
Total	$637,367,999	$167,418,152	$—	$804,786,151

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, 2018. Fund Investments in underlying mututal funds are classified as Level 1, without consideration to the classification level of the investments held by the underlying mutual funds, which could be Level 1, Level 2 or Level 3.

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Health Care Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $603,813,141) including securities on loan of $4,090,760		$800,501,996
Collateral invested for securities on loan, at value (cost $4,284,155)		4,284,155
Deposit with broker for futures contracts		462,000
Receivables:
Investments sold		4,967,643
Foreign tax reclaims		915,803
Dividends		759,764
Fund shares sold		82,836
Income from securities on loan		697
Prepaid expenses	+	23,299
Total assets		811,998,193
Liabilities
Collateral held for securities on loan		4,284,155
Payables:
Investments bought		2,181,792
Investment adviser and administrator fees		354,293
Shareholder service fees		133,315
Independent trustees’ fees		249
Fund shares redeemed		452,802
Due to custodian		230,730
Accrued expenses	+	62,053
Total liabilities		7,699,389
Net Assets
Total assets		811,998,193
Total liabilities	–	7,699,389
Net assets		$804,298,804
Net Assets by Source
Capital received from investors		561,111,490
Net investment income not yet distributed		3,036,392
Net realized capital gains		43,477,394
Net unrealized capital appreciation		196,673,528

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$804,298,804		33,314,875		$24.14

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Table of Contents

Schwab Health Care Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends received from unaffiliated issuers (net of foreign withholding tax of $316,319)		$7,769,041
Interest		6,807
Securities on loan, net	+	13,363
Total investment income		7,789,211
Expenses
Investment adviser and administrator fees		2,218,778
Shareholder service fees		970,276
Shareholder reports		29,499
Portfolio accounting fees		27,619
Custodian fees		25,571
Transfer agent fees		17,972
Professional fees		15,483
Registration fees		14,289
Independent trustees’ fees		6,181
Interest expense		625
Other expenses	+	10,122
Total expenses		3,336,415
Expense reduction by CSIM and its affiliates	–	17,972
Net expenses	–	3,318,443
Net investment income		4,470,768
Realized and Unrealized Gains (Losses)
Net realized gains on investments		44,039,991
Net realized gains on futures contracts		80,834
Net realized losses on foreign currency transactions	+	(6,481)
Net realized gains		44,114,344
Net change in unrealized appreciation (depreciation) on investments		(31,596,760)
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	(10,293)
Net change in unrealized appreciation (depreciation)	+	(31,607,053)
Net realized and unrealized gains		12,507,291
Increase in net assets resulting from operations		$16,978,059

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Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab Health Care Fund

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$4,470,768	$7,623,515
Net realized gains		44,114,344	50,803,289
Net change in unrealized appreciation (depreciation)	+	(31,607,053)	103,078,127
Increase in net assets from operations		16,978,059	161,504,931
Distributions to Shareholders
Distributions from net investment income		(7,821,820)	(7,795,978)
Distributions from net realized gains	+	(50,881,568)	(13,907,780)
Total distributions		($58,703,388)	($21,703,758)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		994,938	$24,744,882	2,602,137	$61,859,539
Shares reinvested		2,439,669	58,478,872	885,124	19,145,216
Shares redeemed	+	(3,657,562)	(90,442,688)	(9,509,826)	(220,486,601)
Net transactions in fund shares		(222,955)	($7,218,934)	(6,022,565)	($139,481,846)
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		33,537,830	$853,243,067	39,560,395	$852,923,740
Total increase or decrease	+	(222,955)	(48,944,263)	(6,022,565)	319,327
End of period		33,314,875	$804,298,804	33,537,830	$853,243,067
Net investment income not yet distributed			$3,036,392		$6,387,444

₆₇

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Table of Contents

Schwab International Core Equity Fund

Financial Statements

Financial Highlights

	11/1/17– 4/30/18*	11/1/16– 10/31/17	11/1/15– 10/31/16	11/1/14– 10/31/15	11/1/13– 10/31/14	11/1/12– 10/31/13
Per-Share Data
Net asset value at beginning of period	$11.27	$9.20	$9.62	$9.77	$9.82	$7.90
Income (loss) from investment operations:
Net investment income (loss)	0.11 ¹	0.22 ¹	0.22 ¹	0.19 ¹	0.29 ¹	0.20
Net realized and unrealized gains (losses)	0.02 ²	2.08	(0.45)	(0.01)	(0.08)	1.93
Total from investment operations	0.13	2.30	(0.23)	0.18	0.21	2.13
Less distributions:
Distributions from net investment income	(0.26)	(0.23)	(0.19)	(0.15)	(0.26)	(0.21)
Distributions from net realized gains	(0.03)	—	—	(0.18)	—	—
Total distributions	(0.29)	(0.23)	(0.19)	(0.33)	(0.26)	(0.21)
Net asset value at end of period	$11.11	$11.27	$9.20	$9.62	$9.77	$9.82
Total return	1.21% ³	25.58%	(2.41%)	2.05%	2.20%	27.70%
Ratios/Supplemental Data
Ratios to average net assets:
Net operating expenses	0.86% ⁴	0.86%	0.86%	0.86%	0.86%	0.86%
Gross operating expenses	0.88% ⁴	0.90%	0.91%	0.92%	0.98%	1.10%
Net investment income (loss)	1.97% ⁴	2.15%	2.40%	2.02%	2.95%	2.40%
Portfolio turnover rate	42% ³	85%	90%	87%	90%	75%
Net assets, end of period (x 1,000,000)	$1,457	$1,227	$772	$679	$423	$147

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

⁴

Annualized.

₆₈

Schwab Active Equity Funds | Semiannual Report

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Table of Contents

Schwab International Core Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

Security	Number of Shares	Value ($)
Common Stock 97.5% of net assets

Australia 5.6%
Aristocrat Leisure Ltd.	1,469,620	29,481,420
CIMIC Group Ltd.	115,439	3,928,244
CSR Ltd.	1,282,905	5,413,072
Metcash Ltd.	1,341,574	3,621,055
National Australia Bank Ltd.	1,030,042	22,392,119
Qantas Airways Ltd.	1,634,111	7,067,167
Sandfire Resources NL	985,130	5,830,354
Telstra Corp., Ltd.	1,713,915	4,075,042
		81,808,473

Austria 0.8%
Raiffeisen Bank International AG *	350,622	11,835,615

Belgium 2.1%
bpost S.A.	221,134	4,852,141
KBC Group N.V.	163,641	14,226,948
UCB S.A.	157,755	11,881,169
		30,960,258

Canada 0.4%
Parex Resources, Inc. *	343,400	5,908,101

Denmark 1.0%
Novo Nordisk A/S, Class B	253,547	11,923,786
Vestas Wind Systems A/S	44,003	2,846,634
		14,770,420

Finland 0.7%
Fortum Oyj	182,740	4,203,528
UPM-Kymmene Oyj	175,647	6,267,366
		10,470,894

France 9.5%
Air France-KLM *	197,009	1,930,771
BNP Paribas S.A.	191,396	14,775,629
Eiffage S.A.	72,804	8,665,974
Engie S.A.	435,164	7,633,420
Faurecia S.A.	58,656	4,789,782
Gaztransport Et Technigaz S.A.	116,303	7,210,304
Hermes International	9,395	6,075,181
Ipsen S.A.	58,052	9,396,684
L'Oreal S.A.	33,864	8,154,100
LVMH Moet Hennessy Louis Vuitton SE	17,500	6,090,207
Metropole Television S.A.	190,893	4,699,942
Neopost S.A.	121,729	3,284,646
Peugeot S.A.	245,095	6,035,116
Sanofi	269,584	21,313,921

Security	Number of Shares	Value ($)
TOTAL S.A.	428,381	26,924,468
Veolia Environnement S.A.	82,544	1,952,876
		138,933,021

Germany 9.7%
adidas AG	17,580	4,320,625
Allianz SE	132,804	31,411,307
BASF SE	309,015	32,150,973
Beiersdorf AG	40,091	4,535,823
Covestro AG	271,263	24,648,264
CTS Eventim AG & Co. KGaA	64,787	3,029,846
Deutsche Lufthansa AG	302,014	8,778,101
Deutsche Pfandbriefbank AG	418,243	6,765,572
Deutz AG	525,644	5,078,279
Hugo Boss AG	120,264	11,274,231
Rheinmetall AG	38,842	5,075,922
Siltronic AG	28,664	4,589,870
		141,658,813

Greece 0.2%
Motor Oil (Hellas) Corinth Refineries S.A.	95,130	2,266,666

Hong Kong 4.0%
China Huarong Asset Management Co., Ltd., Class H (a)	10,756,000	3,704,453
China Shenhua Energy Co., Ltd., Class H (a)	1,922,000	4,714,393
CK Asset Holdings Ltd.	677,000	5,844,517
Kingboard Chemical Holdings Ltd.	884,000	3,596,368
Kingboard Laminates Holdings Ltd.	2,352,000	3,134,963
Ping An Insurance Group Co. of China Ltd., Class H (a)	1,048,500	10,245,313
Shanghai Industrial Holdings Ltd.	1,388,000	3,639,737
Sinopec Shanghai Petrochemical Co., Ltd., Class H (a)	6,019,000	3,996,669
Tencent Holdings Ltd.	171,300	8,421,602
The Wharf Holdings Ltd.	852,000	2,834,480
Weichai Power Co., Ltd., Class H (a)	7,488,000	8,668,462
		58,800,957

Italy 3.4%
Banco BPM S.p.A. *	1,156,000	4,193,206
Fiat Chrysler Automobiles N.V. *	1,205,675	26,788,614
Intesa Sanpaolo S.p.A.	560,184	2,130,914
Moncler S.p.A.	352,007	15,865,616
		48,978,350

Japan 24.6%
ANA Holdings, Inc.	109,600	4,338,415
Astellas Pharma, Inc.	1,111,700	16,259,985
Canon Marketing Japan, Inc.	66,700	1,449,454
Daiichikosho Co., Ltd.	65,000	3,410,353
Daikyonishikawa Corp.	149,602	2,688,927
Daiwa House Industry Co., Ltd.	94,200	3,444,069

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Table of Contents

Schwab International Core Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
en-Japan, Inc.	66,000	3,085,371
Fanuc Corp.	19,100	4,091,419
Fast Retailing Co., Ltd.	9,700	4,258,448
Fuji Electric Co., Ltd.	441,000	3,145,353
Haseko Corp.	786,100	12,365,047
Hitachi Ltd.	1,245,000	9,086,703
Hoya Corp.	270,000	14,424,709
Japan Airlines Co., Ltd.	271,100	10,698,813
Japan Securities Finance Co., Ltd.	672,200	4,417,076
Kanamoto Co., Ltd.	156,800	5,357,875
Kao Corp.	77,600	5,578,357
Kenedix Office Investment Corp.	1,097	6,729,367
Kenedix, Inc.	1,042,044	6,018,737
Kirin Holdings Co., Ltd.	584,300	16,400,723
Matsumotokiyoshi Holdings Co., Ltd.	131,800	5,871,180
Mitsubishi UFJ Financial Group, Inc.	1,187,300	7,956,503
Mixi, Inc.	124,300	4,085,350
Nexon Co., Ltd. *	484,600	7,051,607
Nihon Unisys Ltd.	290,052	6,020,021
Nintendo Co., Ltd.	15,000	6,302,642
Nitto Denko Corp.	32,200	2,393,903
Nomura Holdings, Inc.	917,600	5,284,965
Okumura Corp.	80,600	3,336,747
ORIX Corp.	1,063,400	18,650,810
Pigeon Corp.	66,700	3,126,498
Pola Orbis Holdings, Inc.	32,500	1,417,961
Prima Meat Packers Ltd.	646,000	3,941,338
Sankyu, Inc.	183,180	8,902,814
Seino Holdings Co., Ltd.	269,000	5,038,572
Shionogi & Co., Ltd.	361,919	18,599,632
Shiseido Co., Ltd.	103,600	6,721,671
Showa Shell Sekiyu K.K.	217,100	3,065,577
Sony Corp.	506,498	23,656,545
Suzuki Motor Corp.	89,900	4,831,930
T-Gaia Corp.	148,200	4,141,375
Taisei Corp.	62,195	3,355,168
The Kansai Electric Power Co., Inc.	681,601	9,536,798
TOKAI Holdings Corp.	1,014,500	10,276,743
Tokyo Electron Ltd.	79,100	15,191,386
Tomy Co., Ltd.	213,200	2,087,332
Toshiba TEC Corp.	1,491,000	8,533,212
Tosoh Corp.	619,000	10,949,076
Toyota Boshoku Corp.	231,000	4,849,379
Ulvac, Inc.	119,631	6,399,559
		358,825,495

Netherlands 4.4%
BE Semiconductor Industries N.V.	86,301	5,964,536
Heineken Holding N.V.	260,102	26,403,082
Koninklijke Ahold Delhaize N.V.	275,212	6,639,345
SBM Offshore N.V.	741,576	12,443,067
Unilever N.V. CVA	210,187	12,049,719
		63,499,749

Norway 1.2%
Austevoll Seafood A.S.A.	71,438	859,775
Telenor A.S.A.	773,683	17,124,620
		17,984,395

Republic of Korea 2.0%
LG Household & Health Care Ltd.	4,570	5,835,337
Samsung Electronics Co., Ltd. (b)	7,482	18,544,935
SK Holdings Co., Ltd.	15,620	4,275,647
		28,655,919

Security	Number of Shares	Value ($)
Singapore 1.0%
CapitaLand Ltd.	4,887,000	13,780,588

Spain 2.2%
Abertis Infraestructuras S.A.	305,199	6,728,688
ACS Actividades de Construccion y Servicios S.A.	349,110	14,713,145
Ence Energia y Celulosa S.A.	752,077	5,802,212
Mediaset Espana Comunicacion S.A.	140,284	1,342,540
Telefonica S.A.	378,096	3,852,980
		32,439,565

Sweden 2.6%
Atlas Copco AB, A Shares	149,460	5,844,831
Boliden AB	310,406	10,755,453
Hemfosa Fastigheter AB	144,970	1,795,763
JM AB	198,721	3,931,565
Kindred Group plc SDR	596,364	7,691,049
Sandvik AB	434,353	7,405,903
		37,424,564

Switzerland 6.3%
Adecco Group AG	176,250	11,672,189
Cembra Money Bank AG	110,169	9,338,281
GAM Holding AG *	286,133	4,567,317
Inficon Holding AG *	5,535	3,314,016
Novartis AG	127,094	9,782,971
Pargesa Holding S.A.	111,523	10,437,405
Partners Group Holding AG	20,263	14,779,226
Roche Holding AG	93,305	20,731,191
Schindler Holding AG	10,624	2,193,713
SGS S.A.	1,910	4,638,719
		91,455,028

Taiwan 0.3%
CTBC Financial Holding Co., Ltd.	2,574,000	1,835,682
HannStar Display Corp.	7,155,000	1,962,248
		3,797,930

United Kingdom 15.5%
888 Holdings plc	425,566	1,609,234
Ashtead Group plc	431,946	11,996,320
AstraZeneca plc	23,138	1,619,713
Aviva plc	1,930,955	14,029,679
BAE Systems plc	254,100	2,131,954
Carnival plc	173,643	11,285,981
Direct Line Insurance Group plc	3,604,614	18,521,530
Ferguson plc	75,687	5,793,616
GlaxoSmithKline plc	1,193,833	23,944,897
Grainger plc	323,160	1,391,740
HSBC Holdings plc	1,825,726	18,176,887
Imperial Brands plc	405,551	14,510,459
Jupiter Fund Management plc	233,710	1,461,542
Lloyds Banking Group plc	26,136,951	23,182,086
Man Group plc	567,361	1,409,126
Mondi plc	129,978	3,618,206
Moneysupermarket.com Group plc	702,726	2,894,487
Old Mutual plc	3,549,355	12,227,768
OneSavings Bank plc	98,270	534,093
Paragon Banking Group plc	1,079,153	7,736,731
Rio Tinto plc	125,642	6,848,229
Royal Dutch Shell plc, B Shares	444,105	15,854,029

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Table of Contents

Schwab International Core Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

Security	Number of Shares	Value ($)
SSE plc	212,237	4,027,958
The British Land Co., plc	480,777	4,439,929
Unilever plc	298,669	16,752,950
		225,999,144
Total Common Stock
(Cost $1,316,832,747)		1,420,253,945

Other Investment Company 2.0% of net assets

Money Market Fund 2.0%
State Street Institutional U.S. Government Money Market Fund, Premier Class 1.63% (c)	29,474,835	29,474,835
Total Other Investment Company
(Cost $29,474,835)		29,474,835

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
MSCI EAFE Index, e-mini, expires 06/15/18	190	19,251,750	72,489

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
($)

Forward Foreign Currency Exchange Contract

05/07/2018

State Street Bank & Trust Co.

USD

7,276

JPY

793,572

At April 30, 2018, the values of certain foreign securities held by the fund aggregating $1,390,948,768 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)	Represents a China based company which is listed on the Hong Kong exchange and traded in Hong Kong dollars.
(b)	Fair-valued by management in accordance with procedures approved by the fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.

CVA —	Dutch Certificate
SDR —	Swedish Depositary Receipt

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2018 (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
Assets
Common Stock¹	$—	$1,354,729,667	$—	$1,354,729,667
Belgium	4,852,141	26,108,117	—	30,960,258
Canada	5,908,101	—	—	5,908,101
Republic of Korea	—	10,110,984	18,544,935	28,655,919
Other Investment Company¹	29,474,835	—	—	29,474,835
Futures Contracts²	72,489	—	—	72,489
Forward Foreign Currency Exchange Contracts²	—	14	—	14
Total	$40,307,566	$1,390,948,782	$18,544,935	$1,449,801,283

¹	As categorized in Portfolio Holdings.
²	Futures contracts and forward foreign currency exchange contracts are valued at unrealized appreciation or depreciation.

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Table of Contents

Schwab International Core Equity Fund

Portfolio Holdings as of April 30, 2018 (Unaudited) (continued)

The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

Investments in Securities	Balance as of October 31, 2017	Realized Gains (Losses)	Change in Unrealized Appreciation (Depreciation)	Gross Purchases	Gross Sales	Gross Transfers in	Gross Transfers out	Balance as of April 30, 2018
Common Stock
Republic of Korea	$—	$80,322	$134,427	$1,247,525	($875,627)	$17,958,288	$—	$18,544,935
Total	$—	$80,322	$134,427	$1,247,525	($875,627)	$17,958,288	$—	$18,544,935

All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The net change in unrealized appreciation (depreciation) for Level 3 investments held by the fund at April 30, 2018 was $134,427.

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, 2018. The transfers in the amount of $8,373,177 and $2,122,787 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, were primarily due to the use of international fair valuation procedures approved by the Board of Trustees. (See financial note 2(a) for additional information). The transfers into Level 3 from Level 2 were the result of fair valued securities for which no quoted market price was available. Fund Investments in underlying mutual funds are classified as Level 1, without consideration to the classification level of the investments held by the underlying mutual funds, which could be Level 1, Level 2 or Level 3.

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Table of Contents

Schwab International Core Equity Fund

Statement of Assets and Liabilities

As of April 30, 2018; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $1,346,307,582)		$1,449,728,780
Foreign currency, at value (cost $5,483,513)		5,483,704
Deposit with broker for futures contracts		1,242,500
Receivables:
Investments sold		1,367,080
Dividends		7,322,903
Fund shares sold		3,138,746
Foreign tax reclaims		1,708,073
Unrealized appreciation on forward foreign currency exchange contracts		14
Prepaid expenses	+	50,690
Total assets		1,470,042,490
Liabilities
Payables:
Investments bought		10,031,779
Investment adviser and administrator fees		673,511
Shareholder service fees		284,814
Fund shares redeemed		1,503,511
Variation margin on futures contracts		78,850
Accrued expenses	+	102,982
Total liabilities		12,675,447
Net Assets
Total assets		1,470,042,490
Total liabilities	–	12,675,447
Net assets		$1,457,367,043
Net Assets by Source
Capital received from investors		1,321,560,195
Net investment income not yet distributed		4,589,775
Net realized capital gains		27,831,687
Net unrealized capital appreciation		103,385,386

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$1,457,367,043		131,195,514		$11.11

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Table of Contents

Schwab International Core Equity Fund

Statement of Operations

For the period November 1, 2017 through April 30, 2018; unaudited

Investment Income
Dividends (net of foreign withholding tax of $1,895,654)		$19,019,780
Expenses
Investment adviser and administrator fees		3,901,339
Shareholder service fees		1,606,639
Custodian fees		224,041
Portfolio accounting fees		40,431
Registration fees		37,026
Shareholder reports		31,710
Professional fees		22,904
Transfer agent fees		19,616
Independent trustees’ fees		6,937
Other expenses	+	12,393
Total expenses		5,903,036
Expense reduction by CSIM and its affiliates	–	118,292
Net expenses	–	5,784,744
Net investment income		13,235,036
Realized and Unrealized Gains (Losses)
Net realized gains on investments		29,664,910
Net realized gains on futures contracts		308,923
Net realized losses on foreign currency transactions	+	(64,491)
Net realized gains		29,909,342
Net change in unrealized appreciation (depreciation) on investments		(33,538,129)
Net change in unrealized appreciation (depreciation) on futures contracts		(131,315)
Net change in unrealized appreciation (depreciation) on foreign currency translations		(101,689)
Net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts	+	14
Net change in unrealized appreciation (depreciation)	+	(33,771,119)
Net realized and unrealized losses		(3,861,777)
Increase in net assets resulting from operations		$9,373,259

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Table of Contents

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
	11/1/17-4/30/18		11/1/16-10/31/17
Net investment income		$13,235,036	$20,043,289
Net realized gains		29,909,342	62,524,779
Net change in unrealized appreciation (depreciation)	+	(33,771,119)	122,354,781
Increase in net assets from operations		9,373,259	204,922,849
Distributions to Shareholders
Distributions from net investment income		(28,747,467)	(18,825,782)
Distributions from net realized gains	+	(3,533,705)	—
Total distributions		($32,281,172)	($18,825,782)

Transactions in Fund Shares
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	VALUE	SHARES	VALUE
Shares sold		30,691,947	$347,323,431	45,026,202	$469,685,880
Shares reinvested		2,938,618	32,030,934	1,739,337	15,723,609
Shares redeemed	+	(11,256,854)	(126,006,752)	(21,803,712)	(216,356,541)
Net transactions in fund shares		22,373,711	$253,347,613	24,961,827	$269,052,948
Shares Outstanding and Net Assets
		11/1/17-4/30/18		11/1/16-10/31/17
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		108,821,803	$1,226,927,343	83,859,976	$771,777,328
Total increase	+	22,373,711	230,439,700	24,961,827	455,150,015
End of period		131,195,514	$1,457,367,043	108,821,803	$1,226,927,343
Net investment income not yet distributed			$4,589,775		$20,102,206

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Table of Contents

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 2035 Fund
Schwab Dividend Equity Fund	Schwab Target 2040 Fund
Schwab Large-Cap Growth Fund	Schwab Target 2045 Fund
Schwab Small-Cap Equity Fund	Schwab Target 2050 Fund
Schwab Hedged Equity Fund	Schwab Target 2055 Fund
Schwab Health Care Fund	Schwab Target 2060 Fund
Schwab International Core Equity Fund	Schwab Fundamental US Large Company Index Fund
Schwab ^® S&P 500 Index Fund	Schwab Fundamental US Small Company Index Fund
Schwab Small-Cap Index Fund^®	Schwab Fundamental International Large Company Index Fund
Schwab Total Stock Market Index Fund^®	Schwab Fundamental International Small Company Index Fund
Schwab ^® U.S. Large-Cap Growth Index Fund	Schwab Fundamental Emerging Markets Large Company Index Fund
Schwab ^® U.S. Large-Cap Value Index Fund	Schwab Fundamental Global Real Estate Index Fund
Schwab ^® U.S. Mid-Cap Index Fund	Schwab Target 2010 Index Fund
Schwab International Index Fund^®	Schwab Target 2015 Index Fund
Schwab MarketTrack All Equity Portfolio™	Schwab Target 2020 Index Fund
Schwab MarketTrack Growth Portfolio™	Schwab Target 2025 Index Fund
Schwab MarketTrack Balanced Portfolio™	Schwab Target 2030 Index Fund
Schwab MarketTrack Conservative Portfolio™	Schwab Target 2035 Index Fund
Laudus Small-Cap MarketMasters Fund™	Schwab Target 2040 Index Fund
Laudus International MarketMasters Fund™	Schwab Target 2045 Index Fund
Schwab Balanced Fund™	Schwab Target 2050 Index Fund
Schwab Target 2010 Fund	Schwab Target 2055 Index Fund
Schwab Target 2015 Fund	Schwab Target 2060 Index Fund
Schwab Target 2020 Fund	Schwab^® Monthly Income Fund - Moderate Payout
Schwab Target 2025 Fund	Schwab^® Monthly Income Fund - Enhanced Payout
Schwab Target 2030 Fund	Schwab ^® Monthly Income Fund - Maximum Payout

2. Significant Accounting Policies:

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:

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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:

• 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.

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 and futures contracts. 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.

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Schwab Active Equity Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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.

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, 2018 are disclosed in the Portfolio Holdings.

(b) Accounting Policies for certain Portfolio Investments (if held):

Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the funds 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, 2018, 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, 2018, 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.

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Schwab Active Equity Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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.

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. A fund may also earn rebates as an element of the broker arrangement, which are recorded as an offset to stock loan fees on short sales transactions. The stock loan fees on short sales are recognized on the Statement of Operations. In the event that rebates exceed the stock loan fees on short sales, the net rebates are recognized as a component of investment income on the Statement of Operations.

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:

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(e) Expenses:

(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:

(h) Accounting Estimates:

(i) Federal Income Taxes:

(j) Foreign Taxes:

(k) Indemnification:

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.

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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.

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.

Exchange-Traded Fund (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.

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Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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 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.

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.

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.

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%

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Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

% 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, 2018, 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.

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.

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Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

Investments from Affiliates

	Underlying Funds
	Schwab Core Equity Fund	Schwab Dividend Equity Fund	Schwab Small-Cap Equity Fund	Schwab International Core Equity Fund
Schwab Balanced Fund	6.4%	—%	—%	—%
Schwab Monthly Income Fund - Enhanced Payout	—%	1.2%	—%	—%
Schwab Monthly Income Fund - Maximum Payout	—%	0.4%	—%	—%
Schwab Monthly Income Fund - Moderate Payout	—%	1.0%	—%	—%
Schwab Target 2010 Fund	0.1%	0.0%*	0.1%	0.2%
Schwab Target 2015 Fund	0.2%	0.0%*	0.2%	0.3%
Schwab Target 2020 Fund	1.7%	0.1%	1.6%	2.2%
Schwab Target 2025 Fund	2.3%	0.2%	2.3%	2.6%
Schwab Target 2030 Fund	4.8%	0.9%	5.3%	5.5%
Schwab Target 2035 Fund	2.4%	0.6%	2.8%	2.8%
Schwab Target 2040 Fund	5.8%	1.8%	7.2%	6.8%
Schwab Target 2045 Fund	0.8%	0.3%	1.0%	0.9%
Schwab Target 2050 Fund	0.7%	0.3%	0.9%	0.9%
Schwab Target 2055 Fund	0.4%	0.2%	0.6%	0.5%
Schwab Target 2060 Fund	0.1%	0.0%*	0.1%	0.1%

*	Less than 0.05%

Interfund Borrowing and Lending

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 $605 million line of credit (the Syndicated Credit Facility), maturing on October 4, 2018. Under the terms of the Syndicated 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 Syndicated Credit Facility.

Effective December 1, 2017, the funds are participants with other U.S. registered investment companies managed by CSIM in a joint, unsecured, uncommitted $500 million line of credit (the Uncommitted Credit Facility), with State Street, which matures on November 30, 2018. Under the terms of the Uncommitted Credit Facility, each fund pays interest on the amount a fund borrows. There were no borrowings from either line of credit during the period.

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Financial Notes, unaudited (continued)

6. Borrowing from Banks (continued):

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 of Investment Securities:

For the period ended April 30, 2018, purchases and sales of securities (excluding short-term obligations) were as follows:

	Purchases of Securities	Sales of Securities
Schwab Core Equity Fund	$1,095,185,863	$1,267,825,786
Schwab Dividend Equity Fund	497,464,532	622,579,846
Schwab Large-Cap Growth Fund	92,427,110	107,173,231
Schwab Small-Cap Equity Fund	342,411,007	401,295,396
Schwab Hedged Equity Fund*	238,858,811	240,151,712
Schwab Health Care Fund	205,698,393	269,193,473
Schwab International Core Equity Fund	783,112,103	556,354,035

*	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 current value and variation margin for futures contracts held at April 30, 2018 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, 2018, the month-end average notional amounts of futures contracts held by the funds and the month-end average number of contracts held were as follows:

	Notional Amounts	Number of Contracts
Schwab Core Equity Fund	$5,656,007	42
Schwab Dividend Equity Fund	2,913,129	22
Schwab Large-Cap Growth Fund	1,957,723	15
Schwab Small-Cap Equity Fund	2,533,071	33
Schwab Hedged Equity Fund	—	—
Schwab Health Care Fund	286,714	2
Schwab International Core Equity Fund	17,636,339	172

The Schwab International Core Equity Fund invested in forwards during the report period. The fund invested in forwards in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange rates and to manage cash. Refer to financial note 2(b) for the fund’s accounting policies with respect to forwards and

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Financial Notes, unaudited (continued)

8. Derivatives (continued):

financial note 3 for disclosures concerning the risks of investing in forwards. During the period ended April 30, 2018, the month-end average forward foreign currency notional amount and the month-end average unrealized appreciation (depreciation) were $1,039 and $2, respectively.

	Schwab International Core Equity Fund
Asset Derivatives	Fair Value
Equity Index Futures Contracts¹	$72,489
Forward Foreign Currency Exchange Contracts²	14
Liability Derivatives	Fair Value
Equity Index Futures Contracts³	$—
Forward Foreign Currency Exchange Contracts⁴	—

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 Schwab International Core Equity Fund in the Statement of Operations for the period ended April 30, 2018 were:

	Schwab International Core Equity Fund
Equity Index Futures Contracts
Realized Gains (Losses)¹	$308,923
Change in Unrealized Appreciation (Depreciation)²	(131,315)
Forward Foreign Currency Exchange Contracts
Realized Gains (Losses)¹	$—
Change in Unrealized Appreciation (Depreciation)²	14

¹	Statement of Operations location: Net realized gains (losses) on futures contracts and net realized gains (losses) on forward foreign currency exchange contracts.
²	Statement of Operations location: Net change in unrealized appreciation (depreciation) on futures contracts and net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts.

The fund’s 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 fund’s forwards, which are reported gross in the Statement of Assets and Liabilities, are presented in the table below. The following table presents the fund’s forwards, net of amounts available for offset under a master netting agreement and net of any related collateral received by the fund for assets and pledged by the fund for liabilities as of April 30, 2018.

		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.	$14	$—	$—	$14
Total	$14	$—	$—	$14

^a	Represents the net amount due from the counterparty in the event of default.

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Financial Notes, unaudited (continued)

9. Redemption Fee:

	Prior Period (11/1/16-10/31/17)
Schwab Core Equity Fund	$1,679
Schwab Dividend Equity Fund	11,570
Schwab Large-Cap Growth Fund	2,514
Schwab Small-Cap Equity Fund	4,073
Schwab Hedged Equity Fund	9,890
Schwab Health Care Fund	8,956
Schwab International Core Equity Fund	3,125

10. Federal Income Taxes:

As of April 30, 2018, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were 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
Tax cost	$1,866,856,315	$1,163,606,154	$192,921,568	$571,738,139	$247,159,497	$608,621,099	$1,347,890,847
Gross unrealized appreciation	$424,731,147	$230,670,811	$61,503,507	$85,443,701	$32,322,689	$213,253,349	$142,654,470
Gross unrealized depreciation	(64,487,646)	(46,984,186)	(5,826,386)	(40,811,437)	(17,086,363)	(17,088,297)	(40,744,034)
Net unrealized appreciation (depreciation)	$360,243,501	$183,686,625	$55,677,121	$44,632,264	$15,236,326	$196,165,052	$101,910,436

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2017, the funds had no capital loss carryforwards available to offset future net capital gains.

11. Subsequent Events:

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Trustees and Officers

The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 107 funds.

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) (investment management firm) and President, PIMCO Funds.	107	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 (public policy think tank) (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015).	107	Director, Gilead Sciences, Inc. (2005 – present)
Nancy F. Heller 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 2018)	President and Chairman, TIAA Charitable (financial services) (2014 – 2016); Senior Managing Director, TIAA (financial services) (2003 – 2016).	107	None
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).	107	None

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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
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.	107	Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present)
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios 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).	107	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).	107	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).	107	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); Co-CEO, Colgin Cellars, LLC (vineyards) (Feb. 1998 – present).	107	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 (May 2008 – present), President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; and Director, Charles Schwab Investment Management, Inc. (July 2016 – present).	107	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) (investment management firm) (Mar. 2007 – Aug. 2010).	107	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)	Chief Operating Officer (Feb. 2018 – present), Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President, Charles Schwab & Co., Inc. (July 2015 – present); Chief Financial Officer (July 2015 – Aug. 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 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc.	107	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) (investment management firm) (Mar. 2007 – Aug. 2010).

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Schwab Active Equity Funds | Semiannual Report

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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
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).
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. (investment management firm) (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 (investment management firm) (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. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, and is a director of CSIM. Ms. Chandoha is an Interested Trustee because she owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co.
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 Active Equity Funds | Semiannual Report

Table of Contents

Schwab Active Equity Funds

Glossary

asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.

asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.

cap, capitalization See “market cap.”

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.