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

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 – Schwab Fundamental Global Real Estate Index Fund

(Exact name of registrant as specified in charter)

211 Main Street, San Francisco, California 94105

(Address of principal executive offices) (Zip code)

Jonathan de St. Paer

Schwab Capital Trust – Schwab Fundamental Global Real Estate Index Fund

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: February 28

Date of reporting period: August 31, 2021

Item 1: Report(s) to Shareholders.

Semiannual Report | August 31, 2021

Schwab Fundamental Global Real Estate Index Fund

This page is intentionally left blank.

In This Report

Performance at a Glance	2
The Investment Environment	3
Fund Management	5
Performance and Fund Facts	6
Fund Expenses	8
Financial Statements and Portfolio Holdings	9
Financial Notes	19
Investment Advisory Agreement Approval	28
Trustees and Officers	31
Glossary	35

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.

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Schwab Fundamental Global Real Estate Index Fund

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.schwabassetmanagement.com/schwabfunds_prospectus.

Total Returns for the 6 Months Ended August 31, 2021
Schwab Fundamental Global Real Estate Index Fund (Ticker Symbol: SFREX)	10.66%
Russell RAFI^TM Global Select Real Estate Index (Net)¹	10.66%
FTSE EPRA Nareit Global Index (Net)¹	15.20%
Fund Category: Morningstar Global Real Estate²	17.12%
Performance Details	pages 6-7

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.

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.

Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

Index ownership – The Schwab Fundamental Global Real Estate Index Fund is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI™ Global Select Real Estate Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell^®” is a trademark of Russell. The trade names “Research Affiliates^®”, “Fundamental Index^®” and “RAFI^®” are registered trademarks of RA. CSIM has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.

¹	The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes.
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.

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Schwab Fundamental Global Real Estate Index Fund

The Investment Environment

For the six-month reporting period ended August 31, 2021, U.S. and international equity markets generated solid returns, with several key equity market indices ending the reporting period just off record highs. Despite persisting COVID-19 pandemic-driven stresses on the global economy and the emergence and rapid spread of the Delta variant during the summer, equity markets continued to rise on global economic recovery, strong earnings, ongoing fiscal stimulus measures, and optimism related to increased vaccination rates. Despite exhibiting volatility, the U.S. dollar rose over the reporting period against a basket of foreign currencies, generally reducing the returns on overseas investments in U.S. dollar terms. For the reporting period, the FTSE EPRA Nareit Global Index (Net)*, which represents general trends in eligible real estate securities worldwide, returned 15.20%, while the Dow Jones Equity All REIT Capped Index, which represents U.S. real estate investment trusts (REITs), returned 25.92%. The S&P 500^® Index, a bellwether for the overall U.S. stock market, returned 19.52% for the same period. Outside the U.S., the MSCI EAFE^® Index (Net)*, a broad measure of developed international equity performance, and the MSCI Emerging Markets Index (Net)*, returned 10.31% and -0.98%, respectively.

After falling under severe pressure early in the COVID-19 pandemic as demand fell and funding waned, U.S. REITs recovered over the reporting period, rising steadily throughout the period. The recovery was fueled by inflation concerns and low interest rates, although performance varied widely across sectors. Among REIT sub-industries in the Dow Jones Equity All REIT Capped Index, all but one posted positive, double-digit returns for the reporting period. The strongest performer was the residential REITs sub-industry. Residential REITs benefited from growing demand for apartments, which rebounded quickly beginning in the first quarter of 2021. Single-family homes and manufactured homes were similarly in high demand. The weakest sub-industry for the reporting period, and the only sub-industry to post a negative return, was the hotel & resort REITs sub-industry. Hotel & resort REITs lost ground on constrained leisure and business travel, which have been exacerbated by the spread of the Delta variant.

Real estate markets outside the U.S. experienced similar variations in performance. Among real estate securities in countries included in the FTSE EPRA Nareit Global Index, the strongest performers for the reporting period were real estate securities in Israel, Sweden, and the United Arab Emirates. Real estate securities in South Africa and Finland were also strong. Returns on real estate securities in Chile, Turkey, and the Philippines were negative for the reporting period, as were those in Indonesia and Hong Kong.

Asset Class Performance Comparison % returns during the 6 months ended August 31, 2021

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 a guarantee 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 Fundamental Global Real Estate Index Fund

The Investment Environment (continued)

Bolstered by the extensive emergency rescue and fiscal stimulus measures passed by the U.S. Congress and U.S. Federal Reserve (Fed) beginning in March 2020, the U.S. economy began to recover from the dramatic impact of the COVID-19 pandemic beginning in the third quarter of 2020. Gross domestic product (GDP) growth stabilized beginning in the fourth quarter of 2020, growing at an annualized rate of 4.3% for the fourth quarter of 2020, 6.3% for the first quarter of 2021, and 6.7% for the second quarter of 2021. Unemployment, which skyrocketed in April 2020 but began falling starting in May 2020, fell over the reporting period. Inflation, which had remained well below the Fed’s traditional 2% target until March 2021, when it jumped, continued to rise through June 2021 and remained elevated through August 2021, largely due to supply and demand imbalances in the labor market, supply chain bottlenecks, increased consumer demand, particularly for travel-related services early in the reporting period, and higher energy costs.

Outside the U.S., global economies continue to wrestle with the fallout of the COVID-19 pandemic and the emergence and spread of the Delta variant. Oil prices rose slowly but steadily through most of the reporting period before dipping in August 2021. In the eurozone, GDP growth turned positive for the second quarter of 2021 following two previous quarters of contraction. The United Kingdom was particularly hard-hit by the COVID-19 pandemic, with successive spikes in COVID-19 cases that led to recurring national lockdowns and business disruptions. After posting a loss in the first quarter of 2021, United Kingdom GDP was positive for the second quarter of 2021 as conditions improved. Japan’s economy also contracted in the first quarter of 2021 on a resurgence of COVID-19 cases and slow vaccine rollouts but posted a small gain for the second quarter of 2021. China, the only major economy to avoid contraction in the face of COVID-19 pandemic-related shocks, experienced a sharp acceleration of growth for the first quarter of 2021. China’s growth for the second quarter of 2021 was also positive. India, after plunging into one of the worst recessions of any major economy, posted a positive gain in GDP growth for the first quarter of 2021, followed by a sharp jump in growth for the second quarter of 2021.

For the most part, central banks around the world maintained the low—and for some international central banks, negative—interest rates instituted prior to, and in response to, the COVID-19 pandemic. In the U.S., despite improving economic data, the Fed reiterated several times during the reporting period its intention to continue its support of the economy for as long as is needed to achieve a full recovery, while acknowledging that it was keeping an eye on rising inflation. The Fed maintained the federal funds rate in a range of 0.00% to 0.25% throughout the reporting period. By the end of the reporting period, the Fed indicated that it would likely begin reducing its bond purchases as early as late 2021 with Fed Chair Jerome Powell noting that bond tapering should not be seen as an indication of an imminent interest rate hike. In developed international markets, most central banks were similarly accommodative. The European Central Bank held its interest rate at 0.00%, unchanged since March 2016, and confirmed it would continue its asset purchase program to help counter the economic impacts of the COVID-19 pandemic. The Bank of Japan upheld its short-term interest rate target of -0.1%, also unchanged since 2016, and maintained its ongoing program of purchasing exchange-traded funds (ETFs) and other assets. The Bank of England maintained its key official bank rate at 0.1% and also reiterated its commitment to its bond-buying program. Emerging markets were mixed. Central banks in China, India, and Pakistan maintained their low rates to help counter the ongoing effects of the COVID-19 pandemic. Indonesia and the Philippines lowered their policy rates. Mexico, Brazil, Russia, and Turkey raised their rates, citing a stronger-than-expected recovery or to counteract the impacts of inflation.

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Schwab Fundamental Global Real Estate Index Fund

Fund Management

Christopher Bliss, CFA, Managing Director and Head of Passive Equity Strategies for Schwab Asset Management, leads the portfolio management team for passive equity Schwab Funds and Schwab ETFs. He also has overall responsibility for all aspects of the management of the fund. Before joining Schwab 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 the head of the Americas institutional index team. In this role, Mr. Bliss was responsible for overseeing a team of portfolio managers managing domestic, developed international and emerging markets index strategies. 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 fund. Prior to joining Schwab 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.

Jane Qin, Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to joining Schwab 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 the risk management group as a risk analyst.

David Rios, Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to this role, Mr. Rios was an associate portfolio manager on the equity index strategies team for four years. His first role with Schwab Asset Management was as a trade operations specialist. Prior to joining Schwab in 2008, Mr. Rios was a senior fund accountant at Investors Bank & Trust (subsequently acquired by State Street Corporation).

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Schwab Fundamental Global Real Estate Index Fund

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception
Fund: Schwab Fundamental Global Real Estate Index Fund (10/22/14)	10.66%	31.62%	6.30%	6.83%
Russell RAFI^TM Global Select Real Estate Index (Net)²	10.66%	31.48%	6.00%	6.58%
FTSE EPRA Nareit Global Index (Net)²	15.20%	29.42%	5.42%	6.02%
Fund Category: Morningstar Global Real Estate³	17.12%	30.34%	7.03%	N/A
Fund Expense Ratio⁴: 0.39%

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.

Small-company stocks are subject to greater volatility than many other asset classes.

International investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Investing in emerging markets may accentuate these risks.

The fund is subject to risks associated with the direct ownership of real estate securities and an investment in the fund will be closely linked to the performance of the real estate markets.

Index ownership – The Schwab Fundamental Global Real Estate Index Fund is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI^TM Global Select Real Estate Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell^®” is a trademark of Russell. The trade names “Research Affiliates^®”, “Fundamental Index^®” and “RAFI^®” are registered trademarks of RA. CSIM has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.

¹	Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
²	The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes.
³	Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
⁴	As stated in the prospectus.

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Schwab Fundamental Global Real Estate Index Fund

Performance and Fund Facts as of August 31, 2021

Statistics¹

Number of Holdings	364
Weighted Average Market Cap (millions)	$19,917
Price/Earnings Ratio (P/E)	14.0
Price/Book Ratio (P/B)	1.1
Portfolio Turnover Rate	19% ²

Industry Weightings % of Investments¹

Top Holdings % of Net Assets⁴

Country Weightings % of Investments⁵

Portfolio holdings may have changed since the report date.

An index is a statistical composite of a specified financial market or sector. Unlike the fund, an index does not actually hold a portfolio of securities and its return is not inclusive of trading and management costs incurred by the fund.

Source of Industry Classification: S&P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Represents an aggregate of industry weightings, none of which represent more than 1.0% of investments.
⁴	This list is not a recommendation of any security by the investment adviser.
⁵	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 Fundamental Global Real Estate Index Fund

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 the fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning March 1, 2021 and held through August 31, 2021.

Actual Return line in the table below provides 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 line in the table below provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.

You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs. 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 3/1/21	Ending Account Value (Net of Expenses) at 8/31/21	Expenses Paid During Period 3/1/21-8/31/21²
Schwab Fundamental Global Real Estate Index Fund
Actual Return	0.39%	$1,000.00	$1,106.60	$2.07
Hypothetical 5% Return	0.39%	$1,000.00	$1,023.23	$1.99

¹	Based on the most recent six-month expense ratio.
²	Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year.

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Schwab Fundamental Global Real Estate Index Fund

Financial Statements

Financial Highlights

	3/1/21– 8/31/21*	3/1/20– 2/28/21	3/1/19– 2/29/20	3/1/18– 2/28/19	3/1/17– 2/28/18	3/1/16– 2/28/17
Per-Share Data
Net asset value at beginning of period	$11.05	$11.06	$11.43	$11.24	$10.73	$9.53
Income (loss) from investment operations:
Net investment income (loss)¹	0.20	0.30	0.37	0.37	0.34	0.29
Net realized and unrealized gains (losses)	0.98	0.05	(0.24)	0.38	0.59	1.42
Total from investment operations	1.18	0.35	0.13	0.75	0.93	1.71
Less distributions:
Distributions from net investment income	(0.09)	(0.34)	(0.47)	(0.44)	(0.39)	(0.43)
Distributions from net realized gains	—	(0.02)	(0.03)	(0.12)	(0.03)	(0.08)
Total distributions	(0.09)	(0.36)	(0.50)	(0.56)	(0.42)	(0.51)
Net asset value at end of period	$12.14	$11.05	$11.06	$11.43	$11.24	$10.73
Total return	10.66% ²	3.62%	0.91%	7.00%	8.69%	18.26%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.39% ³	0.39%	0.39%	0.39%	0.43% ⁴	0.91%
Net operating expenses	N/A	N/A	N/A	N/A ⁵	0.41% ⁴	0.49%
Net investment income (loss)	3.43% ³	3.17%	3.16%	3.32%	3.01%	2.72%
Portfolio turnover rate	19% ²	25%	16%	16%	13%	23%
Net assets, end of period (x 1,000,000)	$145	$157	$196	$190	$158	$93

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective June 1, 2017, the annual operating expense ratio was reduced. The ratio presented for the period ended 2/28/18 is a blended ratio.

⁵

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

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Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of August 31, 2021 (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 U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.

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

Australia 3.6%
Charter Hall Group	8,944	116,736
Charter Hall Retail REIT	28,676	79,754
Cromwell Property Group	137,939	92,716
Dexus	53,899	419,443
Goodman Group	39,652	669,727
Mirvac Group	365,586	832,581
REA Group Ltd.	818	91,549
Scentre Group	576,561	1,199,173
Shopping Centres Australasia Property Group	49,772	97,517
Stockland	253,490	854,234
The GPT Group	97,236	344,240
Vicinity Centres	375,478	474,025
		5,271,695

Austria 0.2%
CA Immobilien Anlagen AG	1,600	69,600
IMMOFINANZ AG *	5,820	148,190
S IMMO AG	3,269	80,508
		298,298

Belgium 0.2%
Befimmo S.A.	1,916	78,867
Cofinimmo S.A.	1,090	180,346
Warehouses De Pauw CVA	1,186	54,533
		313,746

Brazil 0.2%
BR Malls Participacoes S.A. *	86,822	151,621
Cyrela Brazil Realty S.A. Empreendimentos e Participacoes	28,989	113,359
Multiplan Empreendimentos Imobiliarios S.A.	18,000	73,451
		338,431

Canada 3.0%
Allied Properties Real Estate Investment Trust	5,514	189,198
Altus Group Ltd.	1,800	94,662
Artis Real Estate Investment Trust	22,830	208,639
Boardwalk Real Estate Investment Trust	4,630	172,811
Canadian Apartment Properties REIT	6,342	307,185
Chartwell Retirement Residences	18,397	187,812
Choice Properties Real Estate Investment Trust	11,824	139,828
Colliers International Group, Inc.	1,518	211,400
Cominar Real Estate Investment Trust	45,255	390,262
Crombie Real Estate Investment Trust	7,603	108,954
Dream Office Real Estate Investment Trust	11,093	205,040

Security	Number of Shares	Value ($)
First Capital Real Estate Investment Trust	17,880	255,378
FirstService Corp.	713	132,422
Granite Real Estate Investment Trust	1,645	118,754
H&R Real Estate Investment Trust	48,553	638,830
Killam Apartment Real Estate Investment Trust	2,542	43,339
NorthWest Healthcare Properties Real Estate Investment Trust	4,328	45,453
RioCan Real Estate Investment Trust	35,773	635,416
SmartCentres Real Estate Investment Trust	11,998	290,143
Tricon Residential, Inc.	3,240	41,192
		4,416,718

China 8.2%
Agile Group Holdings Ltd.	363,000	416,284
Central China Management Co., Ltd.	68,000	15,026
Central China Real Estate Ltd.	67,000	16,341
China Aoyuan Group Ltd.	174,000	104,030
China Evergrande Group (a)	638,000	358,023
China Jinmao Holdings Group Ltd.	999,000	324,777
China Merchants Shekou Industrial Zone Holdings Co., Ltd., A Shares	62,200	95,889
China Overseas Grand Oceans Group Ltd.	158,000	105,000
China Overseas Land & Investment Ltd.	774,500	1,784,205
China Resources Land Ltd.	316,000	1,173,725
China SCE Group Holdings Ltd.	350,000	140,174
China South City Holdings Ltd.	968,000	89,554
China Vanke Co., Ltd., A Shares	81,100	248,701
China Vanke Co., Ltd., H Shares	215,600	581,723
CIFI Holdings Group Co., Ltd.	324,000	217,800
Country Garden Holdings Co., Ltd.	1,058,000	1,169,407
Country Garden Services Holdings Co., Ltd.	6,400	48,837
Fantasia Holdings Group Co., Ltd. *(a)	709,500	64,624
Gemdale Corp.	20,400	32,932
Gemdale Properties & Investment Corp., Ltd.	590,000	66,166
Greenland Holdings Corp. Ltd., A Shares	47,040	32,414
Greentown China Holdings Ltd. (a)	123,000	188,677
Guangzhou R&F Properties Co., Ltd., H Shares	584,200	498,095
Hopson Development Holdings Ltd	87,600	341,279
Kaisa Group Holdings Ltd. *	344,000	114,505
KWG Group Holdings Ltd.	109,500	115,281
Logan Property Holdings Co., Ltd.	112,000	133,500
Longfor Group Holdings Ltd.	119,500	517,114
Midea Real Estate Holding Ltd	13,600	26,950
Poly Developments and Holdings Group Co., Ltd., A Shares	93,400	164,734
Poly Property Group Co., Ltd.	676,000	178,869
Powerlong Real Estate Holdings Ltd.	244,000	198,223
Red Star Macalline Group Corp. Ltd., A Shares *	21,500	33,657
Ronshine China Holdings Ltd. *	143,000	77,239
Seazen Group Ltd. *	246,000	217,879

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Portfolio Holdings as of August 31, 2021 (Unaudited) (continued)

Security	Number of Shares	Value ($)
Seazen Holdings Co. Ltd., A Shares	4,300	22,409
Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd., A Shares	35,900	63,523
Shenzhen Investment Ltd.	725,563	215,363
Shimao Group Holdings Ltd.	225,500	465,955
Sino-Ocean Group Holding Ltd.	1,584,000	325,198
Sunac China Holdings Ltd.	171,000	437,216
Times China Holdings Ltd.	123,000	127,087
Yuexiu Property Co., Ltd.	228,000	213,725
Yuzhou Properties Co., Ltd. (a)	620,409	119,655
Zhongliang Holdings Group Co. Ltd	65,500	38,691
		11,920,456

France 1.5%
Covivio	3,717	354,256
Gecina S.A.	2,116	328,927
ICADE	3,648	313,697
Klepierre S.A. *	23,949	587,135
Mercialys S.A.	14,772	173,251
Nexity S.A.	8,146	420,671
		2,177,937

Germany 2.3%
alstria Office REIT-AG	6,582	134,087
Aroundtown S.A.	31,345	240,186
Deutsche Euroshop AG	5,754	133,021
Deutsche Wohnen SE	10,995	682,494
Grand City Properties S.A.	5,835	159,985
LEG Immobilien SE	2,208	352,194
TAG Immobilien AG	6,754	228,728
Vonovia SE	20,556	1,387,753
		3,318,448

Hong Kong 8.3%
Champion REIT	56,000	31,885
CK Asset Holdings Ltd.	330,250	2,150,619
Fortune REIT	106,000	114,442
Hang Lung Group Ltd.	139,000	346,663
Hang Lung Properties Ltd.	136,000	326,595
Henderson Land Development Co., Ltd.	107,866	488,033
Hongkong Land Holdings Ltd.	128,798	540,429
Hysan Development Co., Ltd.	44,500	158,776
K Wah International Holdings Ltd.	313,000	137,248
Kerry Properties Ltd.	131,000	445,689
Link REIT	81,300	747,505
New World Development Co., Ltd.	253,460	1,192,183
Shui On Land Ltd. *	1,411,000	230,282
Sino Land Co., Ltd.	344,583	507,473
Sun Hung Kai Properties Ltd.	163,000	2,298,948
Swire Properties Ltd.	73,600	198,920
The Wharf Holdings Ltd.	367,000	1,238,650
Wharf Real Estate Investment Co., Ltd.	179,200	887,434
		12,041,774

Japan 8.2%
Advance Residence Investment Corp.	41	139,341
Aeon Mall Co., Ltd.	17,500	266,510
Daito Trust Construction Co., Ltd.	14,020	1,539,760
Daiwa House REIT Investment Corp.	36	106,323
GLP J-REIT	83	150,662
Heiwa Real Estate Co., Ltd.	2,500	96,800
Hulic Co., Ltd.	24,300	285,042
Japan Metropolitan Fund Invest	316	307,001
Japan Prime Realty Investment Corp.	30	112,055

Security	Number of Shares	Value ($)
Japan Real Estate Investment Corp.	41	253,385
Leopalace21 Corp. *	187,200	406,207
Mitsubishi Estate Co., Ltd.	97,500	1,526,496
Mitsui Fudosan Co., Ltd.	107,000	2,455,433
Nippon Building Fund, Inc.	48	311,709
Nippon Prologis REIT, Inc.	45	161,822
Nomura Real Estate Holdings, Inc.	20,800	532,672
Nomura Real Estate Master Fund, Inc.	136	209,670
Open House Co., Ltd.	4,200	204,014
Orix JREIT, Inc.	82	146,164
Relo Group, Inc.	5,600	125,217
SAMTY Co., Ltd.	1,800	37,837
Starts Corp., Inc.	5,000	129,934
Sumitomo Realty & Development Co., Ltd.	34,500	1,113,822
Takara Leben Co., Ltd.	10,700	31,126
Tokyo Tatemono Co., Ltd.	25,300	387,810
Tokyu Fudosan Holdings Corp.	122,800	710,461
United Urban Investment Corp.	110	155,380
		11,902,653

Mexico 0.4%
Fibra Uno Administracion S.A. de C.V.	328,500	373,742
Macquarie Mexico Real Estate Management S.A. de C.V.	81,600	105,636
PLA Administradora Industrial S de RL de C.V.	68,700	108,400
		587,778

Netherlands 1.8%
Eurocommercial Properties N.V. CVA	7,967	201,361
Unibail-Rodamco-Westfield *	26,401	2,313,512
Wereldhave N.V.	10,487	166,283
		2,681,156

Philippines 0.8%
Ayala Corp. (b)	22,490	358,258
Ayala Land, Inc. (b)	433,732	294,240
GT Capital Holdings, Inc. (b)	20,230	219,289
Robinsons Land Corp. (b)	95,200	31,474
SM Prime Holdings, Inc. (b)	289,600	197,565
		1,100,826

Singapore 1.6%
Ascendas Real Estate Investment Trust	116,688	263,367
Ascott Residence Trust	110,200	82,569
CapitaLand Integrated Commercial Trust	156,628	239,224
CapitaLand Ltd.	253,400	751,832
City Developments Ltd.	59,500	301,933
Mapletree Commercial Trust	70,827	106,699
Mapletree Industrial Trust	48,044	104,298
Mapletree Logistics Trust	71,744	107,922
Mapletree North Asia Commercial Trust	136,015	100,147
Suntec Real Estate Investment Trust	95,700	105,095
UOL Group Ltd.	36,780	190,880
		2,353,966

South Africa 1.2%
Fortress REIT Ltd., A Shares	47,143	52,251
Growthpoint Properties Ltd.	453,845	483,643
Hyprop Investments Ltd.	79,195	148,072
NEPI Rockcastle plc	32,195	232,471
Redefine Properties Ltd. *	1,542,098	488,333

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Table of Contents

Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of August 31, 2021 (Unaudited) (continued)

Security	Number of Shares	Value ($)
Resilient REIT Ltd.	30,020	118,189
Vukile Property Fund Ltd.	209,128	171,175
		1,694,134

Sweden 1.2%
Castellum AB	11,565	337,200
Fabege AB	8,083	146,794
Fastighets AB Balder, B Shares *	1,776	127,105
JM AB	8,809	341,268
Kungsleden AB	10,377	155,605
LE Lundbergfortagen AB, B Shares	4,432	283,172
Pandox AB *	6,760	112,147
Wallenstam AB, B Shares	5,000	85,661
Wihlborgs Fastigheter AB	5,322	129,552
		1,718,504

Switzerland 0.8%
Allreal Holding AG	980	206,327
Mobimo Holding AG *	393	138,599
PSP Swiss Property AG	1,330	178,398
Swiss Prime Site AG	5,377	575,372
		1,098,696

Taiwan 0.5%
Chong Hong Construction Co., Ltd.	35,000	100,569
Farglory Land Development Co., Ltd.	44,000	101,106
Highwealth Construction Corp.	135,470	235,619
Huaku Development Co., Ltd.	28,000	88,933
Ruentex Development Co., Ltd.	52,420	130,912
		657,139

Thailand 0.6%
AP Thailand PCL NVDR	398,961	103,900
Central Pattana PCL NVDR	117,700	195,926
Land & Houses PCL NVDR	816,600	206,302
Quality Houses PCL	928,300	63,957
Sansiri PCL NVDR	3,353,183	132,913
Supalai PCL NVDR	185,882	119,432
		822,430

United Arab Emirates 1.1%
Aldar Properties PJSC	365,000	412,180
Emaar Development PJSC *	132,010	141,825
Emaar Malls PJSC *	181,469	101,745
Emaar Properties PJSC	782,519	892,972
		1,548,722

United Kingdom 2.3%
Big Yellow Group plc	5,143	107,830
Derwent London plc	3,485	181,752
Grainger plc	29,719	130,752
Great Portland Estates plc	14,840	159,466
Hammerson plc	488,413	244,734
Intu Properties plc *(a)(b)	2,915,975	—
Land Securities Group plc	68,701	670,979
NewRiver REIT plc	28,335	30,386
Rightmove plc	16,024	154,596
Safestore Holdings plc	7,183	114,063
Savills plc	16,208	304,547
Segro plc	19,350	341,993
The British Land Co., plc	78,961	576,868
The Unite Group plc	6,440	108,241

Security	Number of Shares	Value ($)
Tritax Big Box REIT plc	14,048	45,792
Workspace Group plc	8,027	102,689
		3,274,688

United States 51.8%
Acadia Realty Trust	7,193	152,635
Alexander & Baldwin, Inc.	13,062	272,735
Alexandria Real Estate Equities, Inc.	2,929	604,458
American Assets Trust, Inc.	3,401	135,428
American Campus Communities, Inc.	10,089	513,026
American Finance Trust, Inc.	12,088	104,199
American Homes 4 Rent, Class A	7,969	334,220
American Tower Corp.	9,728	2,842,230
Americold Realty Trust	4,493	165,073
Apartment Income REIT Corp.	10,582	537,777
Apple Hospitality REIT, Inc.	36,989	546,697
AvalonBay Communities, Inc.	6,459	1,482,857
Boston Properties, Inc.	11,547	1,304,696
Brandywine Realty Trust	21,050	292,174
BrightSpire Capital, Inc.	3,655	36,623
Brixmor Property Group, Inc.	34,906	818,546
Camden Property Trust	4,654	698,286
CareTrust REIT, Inc.	1,455	31,995
CBRE Group, Inc., Class A *	23,905	2,302,051
Centerspace	1,234	124,856
Chatham Lodging Trust *	10,399	124,788
Columbia Property Trust, Inc.	15,909	265,998
CoreCivic, Inc. *	59,700	580,284
CoreSite Realty Corp.	1,167	173,148
Corporate Office Properties Trust	8,995	253,479
CoStar Group, Inc. *	2,786	236,086
Cousins Properties, Inc.	5,421	209,034
Crown Castle International Corp.	12,776	2,487,359
CubeSmart	7,749	414,571
Cushman & Wakefield plc *	7,287	132,186
CyrusOne, Inc.	3,692	284,210
DiamondRock Hospitality Co. *	36,147	326,769
Digital Realty Trust, Inc.	7,945	1,302,265
DigitalBridge Group, Inc. *	130,664	901,582
Diversified Healthcare Trust	123,068	461,505
Douglas Emmett, Inc.	9,634	318,018
Duke Realty Corp.	12,036	632,010
Easterly Government Properties, Inc.	1,637	34,983
EastGroup Properties, Inc.	966	174,131
Empire State Realty Trust, Inc., Class A	20,702	212,610
EPR Properties	6,969	353,677
Equinix, Inc.	2,099	1,770,402
Equity Commonwealth	7,196	189,543
Equity LifeStyle Properties, Inc.	5,224	444,406
Equity Residential	21,324	1,792,709
Essex Property Trust, Inc.	2,728	902,259
Extra Space Storage, Inc.	4,134	772,686
Federal Realty Investment Trust	4,375	532,744
First Industrial Realty Trust, Inc.	4,099	229,503
Gaming & Leisure Properties, Inc.	9,607	473,625
Global Net Lease, Inc.	6,631	112,727
Healthcare Realty Trust, Inc.	7,633	229,219
Healthcare Trust of America, Inc., Class A	10,718	325,077
Healthpeak Properties, Inc.	32,343	1,164,348
Hersha Hospitality Trust *	13,578	127,362
Highwoods Properties, Inc.	8,461	386,583
Host Hotels & Resorts, Inc. *	121,504	2,012,106
Hudson Pacific Properties, Inc.	10,245	270,263
Independence Realty Trust, Inc.	2,545	52,122
Industrial Logistics Properties Trust	1,754	48,112
Invitation Homes, Inc.	15,087	621,283
Iron Mountain, Inc.	33,398	1,594,754

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Table of Contents

Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of August 31, 2021 (Unaudited) (continued)

Security	Number of Shares	Value ($)
JBG SMITH Properties	6,072	182,949
Jones Lang LaSalle, Inc. *	6,921	1,677,858
Kennedy-Wilson Holdings, Inc.	10,388	228,432
Kilroy Realty Corp.	5,513	361,928
Kimco Realty Corp.	50,591	1,102,378
Kite Realty Group Trust	11,167	226,243
Lamar Advertising Co., Class A	5,965	678,996
Lexington Realty Trust	18,462	249,791
Life Storage, Inc.	3,183	396,093
LTC Properties, Inc.	2,215	76,440
Mack-Cali Realty Corp. *	11,331	202,598
Marcus & Millichap, Inc. *	2,271	89,069
Medical Properties Trust, Inc.	15,653	320,573
Mid-America Apartment Communities, Inc.	4,979	957,810
National Health Investors, Inc.	2,028	121,315
National Retail Properties, Inc.	7,150	340,412
New Senior Investment Group, Inc.	20,739	181,051
Newmark Group, Inc., Class A	11,432	155,704
Office Properties Income Trust	6,651	176,451
Omega Healthcare Investors, Inc.	12,311	412,788
Outfront Media, Inc. *	22,209	549,895
Paramount Group, Inc.	25,259	223,795
Park Hotels & Resorts, Inc. *	53,039	1,015,166
Pebblebrook Hotel Trust	14,329	315,668
Physicians Realty Trust	8,341	154,392
Piedmont Office Realty Trust, Inc., Class A	17,158	305,756
Preferred Apartment Communities, Inc., Class A	10,907	136,119
Prologis, Inc.	13,069	1,759,872
PS Business Parks, Inc.	936	147,167
Public Storage	5,005	1,619,668
QTS Realty Trust, Inc., Class A	2,035	158,689
Realogy Holdings Corp. *	53,186	933,414
Realty Income Corp.	9,725	702,339
Regency Centers Corp.	8,855	607,630
Retail Opportunity Investments Corp.	8,530	154,222
Retail Properties of America, Inc., Class A	32,794	433,537
Rexford Industrial Realty, Inc.	791	48,987
RLJ Lodging Trust	35,831	517,041
RPT Realty	13,977	180,862
Ryman Hospitality Properties, Inc. *	4,270	354,709
Sabra Health Care REIT, Inc.	12,282	196,512
SBA Communications Corp.	1,320	473,840
Seritage Growth Properties, Class A *	4,528	73,218
Service Properties Trust	63,585	726,777
Simon Property Group, Inc.	27,537	3,702,350
SITE Centers Corp.	25,813	415,847
SL Green Realty Corp.	10,520	737,242
Spirit Realty Capital, Inc.	6,638	343,649
STAG Industrial, Inc.	4,108	173,563
STORE Capital Corp.	6,550	236,259
Summit Hotel Properties, Inc. *	17,476	162,876
Sun Communities, Inc.	2,569	517,628
Sunstone Hotel Investors, Inc. *	38,209	442,842
Tanger Factory Outlet Centers, Inc.	21,491	359,330
Terreno Realty Corp.	572	38,215
The GEO Group, Inc.	50,922	394,646
The Howard Hughes Corp. *	1,857	168,114
The Macerich Co.	49,715	849,132
UDR, Inc.	12,286	663,690
Uniti Group, Inc.	34,502	450,941
Urban Edge Properties	10,761	203,813
Ventas, Inc.	36,507	2,042,202
VEREIT, Inc.	18,946	957,341
VICI Properties, Inc.	12,181	376,515
Vornado Realty Trust	18,760	785,669

Security	Number of Shares	Value ($)
Washington Real Estate Investment Trust	6,913	173,793
Welltower, Inc.	32,665	2,859,167
WP Carey, Inc.	6,886	537,934
Xenia Hotels & Resorts, Inc. *	20,386	355,124
Zillow Group, Inc., Class A *	85	8,126
Zillow Group, Inc., Class C *	233	22,314
		75,137,564
Total Common Stock
(Cost $111,640,282)		144,675,759

Investment Company 0.0% of net assets
iShares Core US REIT ETF	650	40,469
Total Investment Company
(Cost $38,478)		40,469
Security	Number of Shares/ Face Amount	Value ($)
Short-Term Investments 0.6% of net assets

Money Market Fund 0.4%
Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d)	638,976	638,976

Time Deposits 0.2%
Banco Santander
U.S. Dollar
0.01%, 09/01/21 (e)	117,919	117,919
BNP Paribas S.A.
Swiss Franc
(1.43%), 09/01/21 (e)(f)	2,605	2,845
Brown Brothers Harriman & Co.
Australian Dollar
(0.12%), 09/01/21 (e)(f)	131,418	96,139
Candian Dollar
0.01%, 09/01/21 (e)	3,776	2,993
Hong Kong Dollar
0.00%, 09/01/21 (e)	145,011	18,645
Singapore Dollar
0.01%, 09/01/21 (e)	5,695	4,236
South African Rand
3.80%, 09/01/21 (e)	43,132	2,969
Citibank NA
Euro
(0.78%), 09/01/21 (e)(f)	2,459	2,904
Pound Sterling
0.01%, 09/01/21 (e)	2,101	2,888
Skandinaviska Enskilda Banken AB
Swedish Krona
(0.25%), 09/01/21 (e)(f)	21,648	2,509
Sumitomo Mitsui Banking Corp.
Japanese Yen
(0.31%), 09/01/21 (e)(f)	397,851	3,616
		257,663
Total Short-Term Investments
(Cost $896,639)		896,639

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Table of Contents

Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of August 31, 2021 (Unaudited) (continued)

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
MSCI Emerging Markets Index, expires 09/17/21	2	129,920	2,591
MSCI EAFE Index, expires 09/17/21	1	117,575	653
Dow Jones U.S. Real Estate Index, expires 09/17/21	4	169,440	2,503
Net Unrealized Appreciation			5,747

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $482,953.
(b)	Fair-valued by management using significant unobservable inputs in accordance with procedures approved by fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.
(d)	Security purchased with cash collateral received for securities on loan.
(e)	The rate shown is the current daily overnight rate. Face amount is disclosed in local currency.
(f)	Rate is negative due to the current daily overnight rate at the central bank of the denominated currency and therefore is non-income producing.

CVA —	Dutch Certificate
ETF —	Exchange-traded fund
NVDR —	Non-Voting Depositary Receipt
REIT —	Real Estate Investment Trust

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Table of Contents

Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of August 31, 2021 (Unaudited) (continued)

The following is a summary of the inputs used to value the fund’s investments as of August 31, 2021 (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	$82,174,625	$—	$—	$82,174,625
Australia	—	5,271,695	—	5,271,695
Austria	—	298,298	—	298,298
Belgium	—	313,746	—	313,746
China	524,457	11,395,999	—	11,920,456
France	—	2,177,937	—	2,177,937
Germany	—	3,318,448	—	3,318,448
Hong Kong	158,776	11,882,998	—	12,041,774
Japan	150,662	11,751,991	—	11,902,653
Netherlands	—	2,681,156	—	2,681,156
Philippines	—	—	1,100,826	1,100,826
Singapore	—	2,353,966	—	2,353,966
Sweden	155,605	1,562,899	—	1,718,504
Switzerland	206,327	892,369	—	1,098,696
Taiwan	—	657,139	—	657,139
Thailand	—	822,430	—	822,430
United Arab Emirates	—	1,548,722	—	1,548,722
United Kingdom	463,209	2,811,479	— ^*	3,274,688
Investment Company	40,469	—	—	40,469
Short-Term Investments¹	638,976	—	—	638,976
Time Deposits	—	257,663	—	257,663
Futures Contracts²	5,747	—	—	5,747
Total	$84,518,853	$59,998,935	$1,100,826	$145,618,614

*	Level 3 amount shown includes securities determined to have no value at August 31, 2021.
¹	As categorized in the Portfolio Holdings.
²	Futures contracts are reported at the cumulative unrealized appreciation or depreciation.

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

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Table of Contents

Schwab Fundamental Global Real Estate Index Fund

Statement of Assets and Liabilities

As of August 31, 2021; unaudited

Assets
Investments in securities, at value — unaffiliated (cost $111,936,423) including securities on loan of $482,953		$144,973,891
Collateral invested for securities on loan, at value (cost $638,976)		638,976
Foreign currency, at value (cost $19,971)		20,045
Deposit with broker for futures contracts		36,865
Receivables:
Investments sold		24,741
Dividends		146,326
Foreign tax reclaims		89,937
Fund shares sold		44,325
Income from securities on loan		9,856
Variation margin on futures contracts		2,964
Prepaid expenses	+	16,149
Total assets		146,004,075
Liabilities
Collateral held for securities on loan		638,976
Payables:
Investments bought		18,558
Investment adviser fees		46,194
Fund shares redeemed	+	232,028
Total liabilities		935,756
Net Assets
Total assets		146,004,075
Total liabilities	–	935,756
Net assets		$145,068,319
Net Assets by Source
Capital received from investors		132,126,471
Total distributable earnings		12,941,848

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$145,068,319		11,950,156		$12.14

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Table of Contents

Schwab Fundamental Global Real Estate Index Fund

Statement of Operations

For the period March 1, 2021 through August 31, 2021; unaudited

Investment Income
Dividends received from securities - unaffiliated (net of foreign withholding tax of $102,865)		$2,809,349
Interest received from securities - unaffiliated		14
Securities on loan, net	+	32,673
Total investment income		2,842,036
Expenses
Investment adviser fees		290,356
Total expenses	–	290,356
Net investment income		2,551,680
Realized and Unrealized Gains (Losses)
Net realized losses on sales of securities - unaffiliated		(2,198,291)
Net realized gains on futures contracts		101,756
Net realized losses on foreign currency transactions	+	(11,717)
Net realized losses		(2,108,252)
Net change in unrealized appreciation (depreciation) on securities - unaffiliated		15,037,506
Net change in unrealized appreciation (depreciation) on futures contracts		16,103
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	1,382
Net change in unrealized appreciation (depreciation)	+	15,054,991
Net realized and unrealized gains		12,946,739
Increase in net assets resulting from operations		$15,498,419

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Table of Contents

Schwab Fundamental Global Real Estate Index Fund

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	3/1/21-8/31/21		3/1/20-2/28/21
Net investment income		$2,551,680	$4,881,835
Net realized losses		(2,108,252)	(13,175,153)
Net change in unrealized appreciation (depreciation)	+	15,054,991	9,707,498
Increase in net assets from operations		15,498,419	1,414,180
Distributions to Shareholders
Total distributions		($1,026,092)	($5,517,992)

Transactions in Fund Shares
		3/1/21-8/31/21		3/1/20-2/28/21
		SHARES	VALUE	SHARES	VALUE
Shares sold		1,726,923	$20,495,741	5,247,518	$47,285,146
Shares reinvested		59,550	716,386	427,872	4,177,814
Shares redeemed	+	(4,025,219)	(47,377,173)	(9,188,770)	(86,314,753)
Net transactions in fund shares		(2,238,746)	($26,165,046)	(3,513,380)	($34,851,793)
Shares Outstanding and Net Assets
		3/1/21-8/31/21		3/1/20-2/28/21
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		14,188,902	$156,761,038	17,702,282	$195,716,643
Total decrease	+	(2,238,746)	(11,692,719)	(3,513,380)	(38,955,605)
End of period		11,950,156	$145,068,319	14,188,902	$156,761,038

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Schwab Fundamental Global Real Estate Index Fund | Semiannual Report

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Table of Contents

Schwab Fundamental Global Real Estate Index Fund

Financial Notes, unaudited

1. Business Structure of the Fund:

Schwab Fundamental Global Real Estate Index Fund is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the fund discussed in this report, which is highlighted:

SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993)
Schwab Fundamental Global Real Estate Index Fund	Schwab Target 2015 Fund
Schwab Fundamental US Large Company Index Fund	Schwab Target 2020 Fund
Schwab Fundamental US Small Company Index Fund	Schwab Target 2025 Fund
Schwab Fundamental International Large Company Index Fund	Schwab Target 2030 Fund
Schwab Fundamental International Small Company Index Fund	Schwab Target 2035 Fund
Schwab Fundamental Emerging Markets Large Company Index Fund	Schwab Target 2040 Fund
Schwab S&P 500 Index Fund	Schwab Target 2045 Fund
Schwab Small-Cap Index Fund^®	Schwab Target 2050 Fund
Schwab Total Stock Market Index Fund^®	Schwab Target 2055 Fund
Schwab U.S. Large-Cap Growth Index Fund	Schwab Target 2060 Fund
Schwab U.S. Large-Cap Value Index Fund	Schwab Target 2065 Fund
Schwab U.S. Mid-Cap Index Fund	Schwab Monthly Income Fund — Moderate Payout
Schwab International Index Fund^®	Schwab Monthly Income Fund — Enhanced Payout
Schwab MarketTrack All Equity Portfolio™	Schwab Monthly Income Fund — Maximum Payout
Schwab MarketTrack Growth Portfolio™	Schwab Target 2010 Index Fund
Schwab MarketTrack Balanced Portfolio™	Schwab Target 2015 Index Fund
Schwab MarketTrack Conservative Portfolio™	Schwab Target 2020 Index Fund
Laudus International MarketMasters Fund™	Schwab Target 2025 Index Fund
Schwab Balanced Fund	Schwab Target 2030 Index Fund
Schwab Core Equity Fund	Schwab Target 2035 Index Fund
Schwab Dividend Equity Fund	Schwab Target 2040 Index Fund
Schwab Large-Cap Growth Fund	Schwab Target 2045 Index Fund
Schwab Small-Cap Equity Fund	Schwab Target 2050 Index Fund
Schwab Hedged Equity Fund	Schwab Target 2055 Index Fund
Schwab Health Care Fund	Schwab Target 2060 Index Fund
Schwab International Core Equity Fund	Schwab Target 2065 Index Fund
Schwab Target 2010 Fund

Schwab Fundamental Global Real Estate Index Fund offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of the fund. Each share has a par value of 1/1,000 of a cent, and the fund’s Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.

The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law.

2. Significant Accounting Policies:

The following is a summary of the significant accounting policies the fund uses in its preparation of financial statements. The fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).

The fund may invest in certain mutual funds and exchange-traded funds (ETFs) referred to as “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) and are available on the SEC’s website at www.sec.gov.

(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 value. Among other things, these procedures allow the fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

The fund values the securities in its portfolio every business day. The fund uses the following policies to value various types of securities:

• 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.

• 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 fund valuing its holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, the 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 the 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 the fund and that of its comparative index or benchmark. The Board regularly reviews fair value determinations made by the fund pursuant to these procedures.

• Futures contracts: Futures contracts are valued at their settlement prices as of the close of their exchanges.

• Mutual funds: Mutual funds are valued at their respective NAVs.

• Cash management sweep time deposits: Balances held in cash management sweep time deposits are accounted for on a cost basis, which approximates fair value.

• Securities for which no quoted value is available: The Board has adopted procedures to fair value the fund’s securities when market prices are not “readily available” or are unreliable. For example, the fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. The fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that the fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the fund pursuant to the valuation procedures.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair value of its investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the fund determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.

The three levels of the fair value hierarchy are as follows:

• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, mutual funds, 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 underlying securities 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

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2. Significant Accounting Policies (continued):

securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the fund values its 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 fund’s own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the fund uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the fund in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the fund in the absence of market information. Assumptions used by the fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the fund’s results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The levels associated with valuing the fund’s investments as of August 31, 2021 are disclosed in the Portfolio Holdings.

(b) Accounting Policies for certain Portfolio Investments (if held):

Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. The 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 the 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 value may change daily.

Securities Lending: Under the trust’s Securities Lending Program, the 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 the 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 pursuant to Rule 2a-7 under the 1940 Act. The fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the fund 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 the 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 the fund and the lending agent. The aggregate fair value of securities loaned will not at any time exceed one-third of the total assets of the fund, including collateral received from the loan. Securities lending fees paid to the unaffiliated lending agents start at 10% of gross lending revenue, with subsequent breakpoints to a low of 5%. In this context, the gross lending revenue equals the income received from the investment of cash collateral and fees paid by borrowers less any rebates paid to the borrowers. Any expenses charged by the cash collateral fund are in addition to these fees. All remaining revenue is retained by the fund, as applicable. No portion of lending revenue is paid to or retained by Charles Schwab Investment Management, Inc. (CSIM or the investment adviser) or any affiliate of CSIM.

As of August 31, 2021, the fund 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 August 31, 2021, are disclosed in the fund’s Portfolio Holdings and Statement of Assets and Liabilities.

Cash Management Transactions: The 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 fund’s cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This

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2. Significant Accounting Policies (continued):

fully automated program allows the fund to earn interest on cash balances, however, interest rates may be negative due to overnight rates at the central bank of the denominated currency. 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 fund bears 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.

Passive Foreign Investment Companies: The fund may own shares in certain foreign corporations that meet the Internal Revenue Code definition of a Passive Foreign Investment Company (PFIC). The fund may elect for tax purposes to mark-to-market annually the shares of each PFIC lot held and would be required to distribute as ordinary income to shareholders any such marked-to-market gains (as well as any gains realized on sale).

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 fund does 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 fund on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the fund records a liability based on unrealized appreciation to provide for potential non-U.S. taxes payable upon the sale of these securities.

When the 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.

The fund invests in real estate investment trusts (REITs) which report information on the source of their distributions annually. The fund’s policy is to record all REIT distributions initially as dividend income on the ex-dividend date and then re-designate them as return of capital and/or capital gain distributions at the end of the reporting period based on information provided annually by each REIT, and management estimates such re-designations when actual information has not yet been reported.

(d) Investment Income:

Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the fund records certain foreign security dividends on the date the ex-dividend is confirmed. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.

Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.

(e) Expenses:

Pursuant to an Amended and Restated Investment Advisory and Administration Agreement (Advisory Agreement) between CSIM and the fund, CSIM pays the operating expenses of the 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 the fund are charged directly to the fund.

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(f) Distributions to Shareholders:

The fund generally makes distributions from net investment income, if any, quarterly and from net realized capital gains, if any, once a year.

(g) Accounting Estimates:

The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.

(h) Federal Income Taxes:

The fund intends to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the fund distributes substantially all of its net investment income and net realized capital gains, if any, to its shareholders each year. As long as the fund meets the tax requirements, it is not required to pay federal income tax.

(i) Foreign Taxes:

The fund 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 fund invests. These foreign taxes, if any, are paid by the fund and are disclosed in the Statement of Operations. Foreign taxes accrued as of August 31, 2021, if any, are reflected in the fund’s Statement of Assets and Liabilities.

(j) Indemnification:

Under the fund’s organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business the fund enters into contracts with its vendors and others that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the fund. However, based on experience, the fund expects the risk of loss attributable to these arrangements to be remote.

3. Risk Factors:

Investing in the fund may involve certain risks, as discussed in the fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.

Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. Markets may be impacted by economic, political, regulatory and other conditions, including economic sanctions and other government actions. In addition, the occurrence of global events, such as war, terrorism, environmental disasters, natural disasters and epidemics, may also negatively affect the financial markets. As with any investment whose performance is tied to these markets, the value of an investment in the fund will fluctuate, which means that an investor could lose money over short or long periods.

Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.

Investment Style Risk. The fund is an index fund. Therefore, the fund follows the securities included in the index during upturns as well as downturns. Because of its indexing strategy, the fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the fund’s expenses, the fund’s performance may be below that of the index. Errors relating to the index may occur from time to time and may not be identified by the index provider for a period of time. In addition, market disruptions could cause delays in the index’s rebalancing schedule. Such errors and/or market disruptions may result in losses for the fund.

Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, the fund’s performance could be impacted.

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Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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.

Real Estate Investment Risk. Due to the composition of the index, the fund will concentrate its investments in real estate companies and companies related to the real estate industry. As such, the fund is subject to risks associated with the direct ownership of real estate securities and an investment in the fund will be closely linked to the performance of the real estate markets. These risks include, among others: declines in the value of real estate; risks related to general and local economic conditions; possible lack of availability of mortgage funds or other limits to accessing the credit or capital markets; defaults by borrowers or tenants, particularly during an economic downturn; and changes in interest rates.

REITs Risk. In addition to the risks associated with investing in securities of real estate companies and real estate related companies, REITs are subject to certain additional risks. Equity REITs may be affected by changes in the value of the underlying properties owned by the trusts. Further, REITs are dependent upon specialized management skills and cash flows, and may have their investments in relatively few properties, or in 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 to the fund. In addition, REITs have their own expenses, and the fund will bear a proportionate share of those expenses.

Foreign Investment Risk. The 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 the 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. Foreign securities also include American Depositary receipts (ADRs), Global Depositary receipts (GDRs) and European Depositary receipts (EDRs), which may be less liquid than the underlying shares in their primary trading market and GDRs, many of which are issued by companies in emerging markets, may be more volatile. To the extent the 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.

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, auditing, financial reporting and record keeping 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 the 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.

Sampling Index Tracking Risk. The fund may not fully replicate the index and may hold securities not included in the index. As a result, the fund is subject to the risk that the investment adviser’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. Because the 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.

Tracking Error Risk. As an index fund, the fund seeks to track the performance of the index, although it may not be successful in doing so. The divergence between the performance of the 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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Financial Notes, unaudited (continued)

3. Risk Factors (continued):

Concentration Risk. To the extent that the fund’s or the index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country, or asset class (including the real estate industry, as described above), 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.

Derivatives Risk. The fund may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right, but not the obligation, to buy or sell an instrument at a specific price on or before a specific date. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. A swap is an agreement whereby two parties agree to exchange payment streams calculated in relation to a rate, index, instrument or certain securities and a predetermined amount. The fund’s use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) could cause the fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.

The 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, leverage risk and market risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to counterparty risk, lack of availability risk, valuation risk, correlation risk and tax risk. Counterparty risk is the risk that the counterparty to a derivatives transaction may not fulfill its contractual obligations either because the financial condition of the counterparty declines, or because the counterparty is otherwise unable or unwilling to perform under the contract. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause the fund to realize higher amounts of short-term capital gains. The fund’s use of derivatives could reduce the fund’s performance, increase the fund’s volatility, and could cause the fund to lose more than the initial amount invested.

ETF Risk. The fund may purchase shares of ETFs to gain exposure to a particular portion of the market while awaiting an opportunity to purchase securities directly. When the fund invests in an ETF, in addition to directly bearing the expenses associated with its own operation, it will bear a proportionate share of the ETF’s expenses. Therefore, it may be more costly to own an ETF than to own the underlying securities directly. In addition, while the risks of owning shares of an ETF generally reflect the risks of owning the underlying securities the ETF holds, 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.

Liquidity Risk. The 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.

Leverage Risk. Certain fund transactions, such as derivatives transactions, may give rise to a form of leverage and may expose the fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of the fund’s portfolio securities. The use of leverage may cause the fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy its obligations.

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 fund’s prospectus for a more complete description of the principal risks of investing in the fund.

4. Affiliates and Affiliated Transactions:

Investment Adviser

CSIM, a wholly owned subsidiary of The Charles Schwab Corporation, serves as the fund’s investment adviser and administrator pursuant to the Advisory Agreement between CSIM and the trust.

For its advisory and administrative services to the fund, CSIM is entitled to receive an annual fee, payable monthly, equal to 0.39% of the fund’s average daily net assets.

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Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

Other Affiliated Transactions

CSIM has a licensing agreement with the Frank Russell Company to use certain Russell indices and trademarks in connection with the offering and operation of certain registered investment companies. The fund entered into a sublicense agreement with CSIM pursuant to which CSIM has agreed to sublicense certain Russell indices and trademarks to the fund. CSIM pays all applicable licensing fees for the fund.

Interfund Transactions

The fund may engage in transactions with certain other funds in the Fund Complex (for definition refer to Trustees and Officers section) in accordance with procedures adopted by the Board pursuant to Rule 17a-7 under the 1940 Act. 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 August 31, 2021, the fund’s total aggregate security transactions with other funds in the Fund Complex was $4,574,087 and includes realized losses of $140,881.

Interfund Borrowing and Lending

Pursuant to an exemptive order issued by the SEC, the fund may enter into interfund borrowing and lending transactions with other funds in the Fund Complex. All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The fund had no interfund borrowing or lending activity during the period.

5. Board of Trustees:

The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The fund does not pay any interested or non-interested (independent) 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 fund was a participant with other funds in the Fund Complex in a joint, syndicated, committed $850 million line of credit (the Syndicated Credit Facility), maturing on September 30, 2021. Under the terms of the Syndicated Credit Facility, in addition to CSIM paying the interest charged on any borrowings by the fund, CSIM paid a commitment fee of 0.15% per annum on the fund’s proportionate share of the unused portion of the Syndicated Credit Facility.

During the period, the fund was a participant with other funds in the Fund Complex in a joint, unsecured, uncommitted $400 million line of credit (the Uncommitted Credit Facility), with State Street Bank and Trust Company, maturing on September 30, 2021. Under the terms of the Uncommitted Credit Facility, CSIM pays interest on the amount the fund borrows. There were no borrowings from either line of credit during the period.

The fund also has access to custodian overdraft facilities. The fund may have utilized the overdraft facility and incurred an interest expense, which is paid by CSIM. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.

7. Derivatives:

The fund entered into equity index futures contracts during the report period. The fund invested in futures contracts to equitize available cash. The net realized gains (losses) and net change in unrealized appreciation (depreciation) on futures contracts are presented in the Statement of Operations, if any. Refer to financial note 2(b) for the fund’s 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 August 31, 2021, the month-end average notional amounts of futures contracts held by the fund was $788,063 and the month-end average number of contracts held was 15.

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Financial Notes, unaudited (continued)

8. Purchases and Sales of Investment Securities:

For the period ended August 31, 2021, purchases and sales of securities (excluding short-term obligations) were as follows:

Purchases of Securities	Sales of Securities
$27,571,920	$51,780,918

9. Federal Income Taxes:

As of August 31, 2021, the tax basis cost of the fund’s investments and gross unrealized appreciation and depreciation were as follows:

Tax cost	$125,177,596
Gross unrealized appreciation	$25,199,397
Gross unrealized depreciation	(4,758,379)
Net unrealized appreciation (depreciation)	$20,441,018

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of February 28, 2021, the fund had $4,302,310 capital loss carryforwards with no expiration available to offset future net capital gains.

The tax-basis components of distributions and components of distributable earnings on a tax basis are finalized at fiscal year-end; accordingly, tax basis balances have not been determined as of August 31, 2021. The tax-basis components of distributions paid during the fiscal year ended February 28, 2021, were as follows:

Ordinary income	$5,272,090
Long-term capital gains	245,902

As of February 28, 2021, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the fund, and has determined that no provision for income tax is required in the fund’s financial statements. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the fiscal year ended February 28, 2021, the fund did not incur any interest or penalties.

10. Subsequent Events:

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

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Investment Advisory Agreement Approval

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

The Board of Trustees (the Board or the Trustees, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory and administration agreement (the Agreement) between Schwab Capital Trust (the Trust) and Charles Schwab Investment Management, Inc. (CSIM) with respect to the existing funds in the Trust, including Schwab Fundamental Global Real Estate Index Fund (the Fund), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel, business goals and priorities, profitability, third-party oversight, corporate structure and operations. As part of the renewal process, the Independent Trustees’ legal counsel, on behalf of the Independent Trustees, sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees in the Board materials for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives data provided by an independent provider of investment company data. This information is in addition to the detailed information about the Fund that the Board reviews during the course of each year, including information that relates to the Fund’s operations and performance, legal and compliance matters, risk management, portfolio turnover, and sales and marketing activity. In considering the renewal, the Independent Trustees receive advice from Independent Trustees’ legal counsel, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees participate in question and answer sessions with representatives of CSIM and meet in executive session outside the presence of Fund management.

The Board, including a majority of the Independent Trustees, considered information specifically relating to the continuance of the Agreement with respect to the Fund at meetings held on

May 12, 2021 and June 8, 2021, and approved the renewal of the Agreement with respect to the Fund for an additional one-year term at the meeting on June 8, 2021 called for the purpose of voting on such approval.¹

The Board’s approval of the continuance of the Agreement with respect to the Fund was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:

1.	the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates dedicated to the Fund;
2.	the Fund’s investment performance and how it compared to that of certain other comparable mutual funds and benchmark data;
3.	the Fund’s expenses and how those expenses compared to those of certain other similar mutual funds;
4.	the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to the Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and
5.	the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors.

Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund. In this regard, the Trustees evaluated, among other things, CSIM’s experience, track record, compliance program, resources dedicated to hiring and retaining skilled personnel and specialized talent, and information security resources. The Trustees also considered information provided by CSIM relating to services and support provided with respect to the Fund’s portfolio management team, portfolio strategy, and internal investment guidelines, as well as trading infrastructure, liquidity management, product design and analysis, shareholder communications, securities valuation, fund accounting and custody, and vendor and risk oversight. The Trustees also considered investments CSIM has made in its infrastructure, including modernizing CSIM’s technology and use of data, increasing expertise in key areas (including portfolio management and trade operations), and improving business continuity, cybersecurity, due diligence, risk management processes, and information security programs, which are designed to provide enhanced services to the Fund and its shareholders. The Trustees considered CSIM’s effective implementation of its business continuity plan in response to the COVID-19 pandemic and government-mandated restrictions during the prior year. The Trustees also considered

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Schwab’s wide range of products, services, and channel alternatives such as investment research tools and an array of account features that benefit Fund shareholders who are brokerage clients of Schwab. The Trustees also considered Schwab’s reputation as a full service brokerage firm and its overall financial condition, including Schwab’s ability to maintain consistent operations and service levels during recent periods of remote work and market volatility. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund supported renewal of the Agreement with respect to the Fund.

Fund Performance. The Board considered the Fund’s performance in determining whether to renew the Agreement with respect to the Fund. Specifically, the Trustees considered the Fund’s performance relative to a peer category of other mutual funds and applicable indices/benchmarks, in light of portfolio yield and market trends, as well as in consideration of the Fund’s investment style and strategy attributes and disclosures. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the independent provider of investment company data who prepared the peer category analysis. In evaluating the performance of the Fund, the Trustees considered the risk profile for the Fund and the Fund’s demonstrated performance in tracking its benchmark index. The Trustees further considered the level of Fund performance in the context of their review of Fund expenses and adviser profitability discussed below and also noted that the Board and a designated committee of the Board review performance throughout the year. Although the Fund had performance that lagged that of a relevant peer group for certain periods considered, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to the Fund including that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies and that CSIM had taken steps designed to help improve performance. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Fund supported renewal of the Agreement with respect to the Fund.

Fund Expenses. With respect to the Fund’s expenses, the Trustees considered the rate of compensation called for by the Agreement and the Fund’s net operating expense ratio, in each case, in comparison to those of other similar mutual funds, such peer groups and comparisons having been selected and calculated by an independent provider of investment company data. CSIM reported to the Board, and the Board took into account, the risk assumed by CSIM in the development of the Fund and provision of services as well as the competitive marketplace for financial products. The Trustees also considered fees charged by CSIM to ETFs, other mutual funds and to other types of accounts, but, with respect to such other

types of accounts, accorded less weight to such comparisons due to the different legal, regulatory, compliance and operating features of mutual funds as compared to these other types of accounts, and any differences in the nature and scope of the services CSIM provides to these other accounts, as well as differences in the market for these types of accounts. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Fund are reasonable and supported renewal of the Agreement with respect to the Fund.

Profitability. The Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly and reviewed profitability on a pre-tax basis, without regard to distribution expenses. In this connection, the Trustees reviewed management’s profitability analyses. The Trustees also reviewed profitability of CSIM relating to the Schwab fund complex as a whole, noting the benefits to Fund shareholders of being part of the Schwab fund complex, including the allocations of certain fixed costs across the Fund and other funds in the complex. The Trustees also considered any other benefits derived by CSIM from its relationship with the Fund, such as whether, by virtue of its management of the Fund, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the compensation and profitability with respect to the Fund under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Fund by CSIM and its affiliates. The Trustees noted that CSIM continues to invest substantial sums in its business in order to provide enhanced research capabilities, services and systems to benefit the Fund. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Fund.

Economies of Scale. Although the Trustees recognized the difficulty of determining economies of scale with precision, the Trustees considered the potential existence of any economies of scale by way of the relatively low advisory fee and unitary fee structure of the Fund and whether those are passed along to the Fund’s shareholders through (i) the enhancement of services provided to the Fund in return for fees paid, including through investments by CSIM in CSIM’s infrastructure, including modernizing CSIM’s technology and use of data, increasing expertise and capabilities in key areas (including portfolio and trade operations), and improving business continuity, cybersecurity, due diligence, and information security programs, which are designed to provide enhanced services to the Fund and its shareholders; (ii) graduated investment advisory fee schedules or unitary fee structures, fee waivers, or expense caps by CSIM and its affiliates for those funds in the Schwab fund complex with such features; and (iii) pricing a fund to scale and keeping overall expenses down as the fund grows. The Trustees acknowledged that CSIM has shared any economies of scale with the Fund by investing in

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CSIM’s infrastructure, as discussed above, over time and that CSIM’s internal costs of providing investment management, technology, administrative, legal and compliance services to the Fund continue to increase as a result of regulatory or other developments. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Fund obtains reasonable benefits from economies of scale.

In the course of their deliberations, the Trustees may have accorded different weights to various factors and did not identify any particular information or factor that was all

important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Fund and concluded that the compensation under the Agreement with respect to the Fund is fair and reasonable in light of the services provided and the related expenses borne by CSIM and its affiliates and such other matters as the Trustees considered to be relevant in the exercise of their reasonable judgment.

¹	The meeting on June 8, 2021 was held by means of videoconference in reliance on exemptive relief from the in-person voting requirement under the 1940 Act as provided by the Securities and Exchange Commission.

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Trustees and Officers

The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the fund covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 102 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 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.	102	None
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 (Oct. 1979 – present), The Hoover Institution at Stanford University (public policy think tank); Senior Fellow (2000 – present), Stanford Institute for Economic Policy Research; Professor of Public Policy (1994 – 2015), Stanford University.	102	Director (2005 – 2020), Gilead Sciences, Inc.
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)	Retired. President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services).	102	None
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016)	Private Investor.	102	Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc. Director (2003 – 2019), Symantec Corporation
Jane P. Moncreiff 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 2019)	Consultant (2018 – present), Fulham Advisers LLC (management consulting); Chief Investment Officer (2009 – 2017), CareGroup Healthcare System, Inc. (healthcare).	102	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
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 (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses).	102	Director (2008 – present), KLA-Tencor Corporation
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 (2008 – present), Patmore Management Consulting (management consulting).	102	None
J. Derek Penn 1957 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021)	Head of Equity Sales and Trading (2006 – 2018), BNY Mellon (financial services).	102	None

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 (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank, SSB; Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; Director (July 2019 – present), Charles Schwab Trust Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (Oct. 2020 – present), TD Ameritrade Holding Corporation; Director (July 2016 – present), Charles Schwab Investment Management, Inc.	102	Director (2008 – present), The Charles Schwab Corporation

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Interested Trustees (continued)
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
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) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank, SSB; Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; 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.; Director (Oct. 2020 – present), TD Ameritrade Holding Corporation.	102	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
Jonathan de St. Paer 1973 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 2018)	Director (Apr. 2019 – present), President (Oct. 2018 – present), Chief Operating Officer (Jan. 2020 – present), and Chief Executive Officer (Apr. 2019 – Nov. 2019), Charles Schwab Investment Management, Inc.; Senior Vice President (June 2020 – present) and Chief Operating Officer (Jan. 2020 – present), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (Apr. 2019 – present), President (Nov. 2018 – present) and Trustee (Apr. 2019 – Dec. 2020), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.
Mark Fischer 1970 Treasurer, Chief Financial Officer and Chief Operating 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 (Jan. 2016 – present) and Chief Operating Officer (Dec. 2020 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; Chief Financial Officer (Mar. 2020 – present) and Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011 – Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005 – Mar. 2011), Massachusetts Financial Service Investment Management.
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer (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 (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009 – Apr. 2011), Financial Engines, Inc. (investment management firm); Head of Quantitative Equity (July 2004 – Jan. 2009), ING Investment Management.
Brett Wander 1961 Senior Vice President and Chief Investment Officer (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 (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Managing Director and Global Head of Active Fixed-Income Strategies (Jan. 2008 – Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006 – Jan. 2008), Loomis, Sayles & Company (investment management firm).
William P. McMahon, Jr. 1972 Senior Vice President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021)	Senior Vice President and Chief Investment Officer (Jan. 2020 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer (June 2021 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Vice President and Chief Investment Officer – ThomasPartners Strategies (Apr. 2018 – Dec. 2019), Charles Schwab Investment Advisory, Inc.; Senior Vice President and Chief Investment Officer (May 2001 – Apr. 2018), ThomasPartners, Inc.

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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
David Lekich 1964 Vice President and Assistant 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) and Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present) and Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Vice President and Assistant Secretary (Oct. 2021 – present), Secretary (Apr. 2011 – Oct. 2021) and Chief Legal Officer (Dec. 2011 – Oct. 2021), Schwab Funds; Vice President and Assistant Clerk (Apr. 2011 – present), Laudus Funds; Vice President and Assistant Secretary (Oct. 2021 – present), Secretary (May 2011 – Oct. 2021) and Chief Legal Officer (Nov. 2011 – Oct. 2021), Schwab ETFs.
Catherine MacGregor 1964 Chief Legal Officer and 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 (July 2005 – present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005 – present) and Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Chief Legal Officer and Secretary (Oct. 2021 – present), Vice President (Nov. 2005 – Oct. 2021) and Assistant Secretary (June 2007 – Oct. 2021), Schwab Funds; Chief Legal Officer and Secretary (Oct. 2021 – present), Vice President and Assistant Secretary (Oct. 2009 – Oct. 2021), Schwab ETFs.

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 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. (Schwab), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust, and is a director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of Schwab.
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.

beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500^®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.

Bloomberg US Aggregate Bond Index An index that is a broad-based benchmark measuring the performance of the U.S. investment grade, taxable bond market, including U.S. Treasuries, government-related and corporate bonds, mortgage pass-through securities, commercial mortgage-backed securities, and asset-backed securities that are publicly available for sale in the United States. To be eligible for inclusion in the index, securities must be fixed rate, non-convertible, U.S. dollar-denominated with at least $300 million or more of outstanding face value and have one or more years remaining to maturity. The index excludes certain types of securities, including tax-exempt 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. The index is market capitalization weighted and the securities in the index are updated on the last business day of each month.

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.

cap, capitalization See “market cap.”

capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.

Dow Jones Equity All REIT Capped Index A float-adjusted market cap weighted index that is designed to measure all equity real estate investment trusts (REITs) in the Dow Jones U.S. Total Stock Market Index, as defined by the S&P Dow Jones Indices REIT/RESI Industry Classification Hierarchy, that meet the minimum float market capitalization (FMC) and liquidity thresholds. The aggregate weight of all companies weighing more than 4.5% cannot exceed 22.5%, and no single company’s weight can exceed 10%. The index is reviewed daily based on each company’s capped market capitalization weight. Daily capping is only performed when the sum of companies with weights great than 5% exceeds 25%.

earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.

earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.

expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.

FTSE EPRA Nareit Global Index (Net) An index that provides a diverse representation of publicly traded equity real estate investment trusts (REITs) and listed property companies worldwide. The index constituents are free-float adjusted, and screened on liquidity, size and revenue. The index is comprised of countries in developed and emerging markets. The Net of Tax Index is calculated based on the maximum withholding tax rates applicable to dividends received by institutional investors who are not resident in the same country as the remitting company and who do not benefit from double taxation treaties.

market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.

median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.

MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.

MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.

net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.

outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.

price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.

price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.

real estate investment trust (REIT) Real estate companies that own and commonly operate income producing commercial and/or residential real estate.

real estate operating companies (REOC) Real estate companies that engage in the development, management or financing of real estate.

return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.

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Schwab Fundamental Global Real Estate Index Fund | Semiannual Report

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Schwab Fundamental Global Real Estate Index Fund

rights and warrants Rights and warrants are types of securities that entitle the holder to purchase a proportionate amount of common stock at a specified price for a specific period of time. Rights allow a shareholder to buy more shares directly from the company, usually at a price somewhat lower than the current market price of the outstanding shares. Warrants are usually issued with bonds and preferred stock. Rights and warrants can trade on the market separately from the company’s stock. The prices of rights and warrants do not necessarily move parallel to the prices of the underlying common stock. Rights usually expire within a few weeks of issuance, while warrants may not expire for several years. If a right or warrant is not exercised within the specified time period, it will become worthless and a fund will lose the purchase price it paid for the right or warrant and the right to purchase the underlying security.

Russell RAFI Global Select Real Estate Index (Net) An index that is derived from constituents of the Russell RAFI Global Index that are classified as real estate or real estate investment trusts (REITs) according to the Russell Global Sectors classification scheme. Fundamental methodology ranks and weights global real estate securities by three fundamental measures of company size adjusted sales, retained operating cash flow and dividends plus buybacks rather

than by market capitalization. Mortgage and timber REITs are excluded. Securities are ranked by each fundamental factor, and individual factor weights are averaged to determine overall fundamental weights. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis.

S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.

stock A share of ownership, or equity, in the issuing company.

total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.

weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.

yield The income paid out by an investment, expressed as a percentage of the investment’s market value.

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Schwab Fundamental Global Real Estate Index Fund | Semiannual Report

Notes

Notes

Notes

Schwab Fundamental Global Real Estate Index Fund

Charles Schwab Investment Management

With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Charles Schwab Investment Management advocates for investors of all sizes with a steadfast focus on lowering costs and reducing unnecessary complexity. 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.schwabassetmanagement.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.schwabassetmanagement.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.

Schwab Funds

Equity Funds

Schwab Core Equity Fund

Schwab Dividend Equity Fund

Schwab Large-Cap Growth Fund

Schwab Small-Cap 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 Treasury Inflation Protected Securities Index Fund

Schwab U.S. Aggregate Bond Index Fund

Schwab Short-Term Bond Index Fund

Schwab Tax-Free Bond Fund¹

Schwab California Tax-Free Bond Fund¹

Schwab Opportunistic Municipal Bond Fund

Schwab Money Funds²

Schwab provides a broad choice of taxable and tax-exempt money market funds for both retail and institutional client types.

Investment Adviser

Charles Schwab Investment Management, Inc.

211 Main Street, San Francisco, CA 94105

Funds

Schwab Funds

1-877-824-5615

State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation.

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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MFR87850-06
00264633

Item 2: Code of Ethics.

Not applicable to this semi-annual report.

Item 3: Audit Committee Financial Expert.

Not applicable to this semi-annual report.

Item 4: Principal Accountant Fees and Services.

Not applicable to this semi-annual report.

Item 5: Audit Committee of Listed Registrants.

Not applicable to this semi-annual report.

Item 6: Schedule of Investments.

The schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.

Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8: Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10: Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 11: Controls and Procedures.

(a)

Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Chief Executive Officer, Jonathan de St. Paer and Registrant’s Chief Financial Officer, Mark Fischer, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above.

(b)	During the period covered by this report, there have been no changes in Registrant’s internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrant’s internal control over financial reporting.

Item 12: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 13: Exhibits.

(a)

(1)

Code of ethics – not applicable to this semi-annual report.

(2)

Separate certifications for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached.

(3)

Not applicable.

(b)

A certification for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSRS with the Commission.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Schwab Capital Trust – Schwab Fundamental Global Real Estate Index Fund


By:		/s/ Jonathan de St. Paer
		Jonathan de St. Paer Chief Executive Officer

Date:		October 19, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By:		/s/ Jonathan de St. Paer
		Jonathan de St. Paer Chief Executive Officer

Date:		October 19, 2021


By:		/s/ Mark Fischer
		Mark Fischer Chief Financial Officer

Date:		October 19, 2021

Schwab Core Equity Fund (SWANX) N-CSRSCertified semi-annual shareholder report (management investment company)