UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-7704
Schwab Capital Trust
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
Jonathan de St. Paer
Schwab Capital Trust
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 636-7000
Date of fiscal year end: October 31
Date of reporting period: October 31, 2021
Item 1: Report(s) to Shareholders.
Annual Report | October 31, 2021
Laudus International MarketMasters Fund™
Laudus International MarketMasters Fund
In This Report
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset ManagementTM
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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Laudus International MarketMasters 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/laudusfunds_prospectus.
| Total Return for the 12 Months Ended October 31, 2021 | |
| Laudus International MarketMasters Fund1 (Ticker Symbol: SWMIX) | 33.50% |
| MSCI EAFE® Index (Net)2 | 34.18% |
| Fund Category: Morningstar Foreign Large Growth3 | 27.70% |
| Performance Details | pages 7-9 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
Foreign securities can involve risks such as political and economic instability and currency risk. These risks may be greater in emerging markets.
| 1 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations. See financial note 2 for more information. |
| 2 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 3 | 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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Laudus International MarketMasters Fund
From the President
Jonathan de St. Paer
President of Schwab Asset
Management and the fund
covered in this report.
President of Schwab Asset
Management and the fund
covered in this report.
Dear Shareholder,
During the 12-month reporting period ended October 31, 2021, global equity markets generally gained ground as economies began to recover from COVID-19 pandemic lockdowns and corporations generally posted stronger-than-expected profits. The S&P 500® Index, a bellwether for the overall U.S. stock market, rose 42.9%, reaching record territory as the period ended, while the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.2%. Emerging markets rose as well, although not to the same degree. A more complex story lay beneath those broad gains. Skyrocketing oil and gas prices propelled the energy sector ahead of other sectors, while other sectors were constrained by rising inflationary pressures, supply chain disruptions, and the spread of the Delta variant.
While there are always winners and losers among various markets, sectors, and individual stocks, today’s top performers are rarely the same as yesterday’s or tomorrow’s. At Schwab Asset Management, we believe the best defense against a shifting investment landscape is a portfolio that’s diversified across a wide variety of asset classes and geographic regions. The fund offers a multi-manager structure for investing in international stocks, each with their own focus and style, to provide diversified access to international stocks in both developed and emerging markets. With a rigorous subadviser selection process and ongoing oversight by our investment manager research team, the fund provides exposure to international developed and emerging markets, large- and small-capitalization, and growth and value stocks. Each of its subadvisers is selected based on their investment style and consistency of returns, as well as their measures for managing risk
Thank you for investing with Schwab Asset Management, and for trusting us to help you achieve your financial goals. For more information about the Laudus International MarketMasters Fund, please continue reading this report. In addition, you can find further details about the fund by visiting our website at www.schwabassetmanagement.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
“ The fund offers a multi-manager structure for investing in international stocks, each with their own focus and style, to provide diversified access to international stocks in both developed and emerging markets.”
Past performance is no guarantee of future results.
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Management views may have changed since the report date.
Schwab Asset Management is the dba name for Charles Schwab Investment Management, Inc., the investment adviser for Schwab Funds, Laudus Funds, and Schwab ETFs.
| * | 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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Laudus International MarketMasters Fund
The Investment Environment
For the 12-month reporting period ended October 31, 2021, international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 42.91%. Among international markets, the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.18% and the MSCI Emerging Markets Index (Net)* returned 16.96%.
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. Outside the United States, global economies also displayed resilience but were somewhat more constrained amid continuing struggles against COVID-19 and the emergence and spread of the Delta variant. Oil prices rose through most of the reporting period, except for a dip in July and August, on growing demand and reduced production. In the eurozone, GDP growth jumped in the third quarter of 2020, regaining much of its losses from the second quarter, but turned slightly negative for both the fourth quarter of 2020 and the first quarter of 2021. GDP growth turned positive for the second and third quarters of 2021. The United Kingdom, which was particularly hard-hit by the COVID-19 pandemic, suffered its biggest slump in more than three centuries over the course of 2020, effectively wiping out its growth over the past seven years, but posted a small positive gain in GDP for the first quarter of 2021. The United Kingdom removed many of the country’s stringent restrictions during the summer and posted a strong gain in GDP growth for the second quarter of 2021. Japan’s economy, after rebounding sharply in the third quarter of 2020, posted a positive, albeit smaller, gain in the fourth
Asset Class Performance Comparison % returns during the 12 months ended October 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 an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and Schwab Asset Management.
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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Laudus International MarketMasters Fund
The Investment Environment (continued)
quarter of 2020. Japan’s economy subsequently contracted in the first quarter of 2021 on a resurgence of COVID-19 cases and slow COVID-19 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, maintained positive GDP growth in the fourth quarter of 2020. China’s GDP growth accelerated sharply for the first quarter of 2021 before easing for the subsequent two quarters in part because of the political landscape and an emphasis on domestic consumption over globalization. India, after plunging into one of the worst recessions of any major economy, saw its first positive gain in GDP in the fourth quarter of 2020 and posted a sharp jump in GDP growth for the second quarter of 2021.
For the most part, central banks around the world, including the Fed, 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 United States, 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 needed to achieve a full recovery. The Fed maintained the federal funds rate in a range of 0.00% to 0.25% throughout the reporting period. However, as inflation continued to rise for most of 2021, the Fed tightened its stance, signaling that—due to significant progress made on its twin goals of maximum employment and price stability—it could start to reduce its bond-buying program as soon as late 2021 and could begin to raise interest rates in the next 18 months. In developed international markets, most central banks were similarly accommodative while acknowledging that conditions were changing. The European Central Bank held interest rates at 0.00%, unchanged since March 2016, but reduced the pace of its asset purchase program instituted 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—despite citing moderately improving conditions—vowed to continue to maintain stability in its financial markets through its ongoing programs. The Bank of England maintained its key official bank rate at 0.1% and continued to support its bond-buying program. Emerging markets were mixed. Central banks in China, India, and Indonesia maintained their low rates to help counter the ongoing effects of the COVID-19 pandemic. Mexico, Brazil, Russia, and Pakistan raised their rates, citing a stronger-than-expected recovery or to counteract the impacts of inflation.
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Laudus International MarketMasters Fund
Fund Management
 | Omar Aguilar, Ph.D., Managing Director and Chief Investment Officer of all investment strategies for Schwab Asset Management, is responsible for the day-to-day co-management of the fund. Mr. Aguilar has more than 20 years of broad investment management experience in the equity markets, including managing index, quantitative equity, asset allocation, and multi-manager strategies. Prior to joining Schwab in April 2011, Mr. Aguilar was with Financial Engines, where he was responsible for managing more than $40 billion in assets from leading retirement plan sponsors in the defined contribution market. Prior to that, he served as head of quantitative equity for ING Investment Management (now known as Voya Investment Management), building and developing the group and managing more than $20 billion in assets with 15 global active, index, and enhanced index strategies for pension funds, variable annuities, and mutual funds. Mr. Aguilar also served as head of quantitative research for Lehman Brothers’ alternative investment management business and as a director of quantitative research and a portfolio manager with both Merrill Lynch Investment Management and Bankers Trust. |
 | Jane Shi, CFA, Portfolio Manager, is responsible for the day-to-day co-management of the fund. Her responsibilities include performance attribution and portfolio reporting, as well as making recommendations for tactical portfolio allocations using quantitative models. Ms. Shi also collaborates with the Schwab Asset Management Investment Manager Research Team to evaluate and monitor current and new subadvisers. Ms. Shi joined Schwab in 2011 as a research analyst. Prior to that, Ms. Shi was a vice president and investment analyst at Bailard, Inc., where she developed quantitative models for domestic equity and tactical asset allocation strategies and was also responsible for performance measurement and attribution. Prior to that, she was a treasury analyst at Sun Microsystems, Inc. |
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Laudus International MarketMasters Fund
The Laudus International MarketMasters Fund (the fund) uses a multi-manager strategy. Charles Schwab Investment Management, Inc.—the fund’s investment adviser—selects investment subadvisers with strong long-term track records to manage a portion of the fund’s assets. In addition to selecting investment subadvisers and allocating assets among them, the investment adviser is responsible for monitoring and coordinating the overall management of the fund. Each subadviser’s portfolio is compared to its respective comparative index that reflects its individual process and philosophy. The subadviser comparative indices may differ from the fund’s comparative index.
Market Highlights. For the 12-month reporting period ended October 31, 2021, international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way.
Performance. For the 12-month period ended October 31, 2021, the fund returned 33.50%, underperforming the fund’s comparative index, the MSCI EAFE® Index (Net) (the index), which returned 34.18%.
Positioning and Strategies. Over the 12-month reporting period, all five of the fund’s active subadvisers posted positive returns, contributing to the fund’s total return. Two of the fund’s active subadvisers underperformed their comparative indices and three of fund’s active subadvisers outperformed their comparative indices.
Among the fund’s five active subadvisers, American Century Investment Management, Inc., which focuses on international small-cap growth, posted a positive return but underperformed its comparative index. Stock selection was weakest in the consumer discretionary and industrials sectors and strongest in the health care and consumer staples sectors. From a sector allocation perspective, an underweight to the materials and energy sectors detracted from relative performance while an underweight to the consumer staples and health care sectors contributed to relative performance. From a geographic perspective, stock selection in China and Sweden detracted from relative performance and stock selection in Israel and United Kingdom contributed to relative performance.
Mondrian Investment Partners Limited, with its international small-cap value focus, also posted a positive return but underperformed its comparative index. Mondrian’s stock selection was weakest in the utilities and energy sectors and strongest in the industrials and financials sectors. From a sector allocation perspective, Mondrian’s underweight to the financials sector and overweight to the consumer staples sector detracted from relative performance while an overweight to the industrials sector and underweight to the materials sector contributed to relative return. From a geographic perspective, stock selection in France and Germany detracted from relative performance, while stock selection in Japan, as well as an overweight to Japan, contributed to relative performance.
Baillie Gifford Overseas Limited posted a positive return and outperformed its international growth comparative index. Stock selection was strongest in the consumer discretionary and information technology sectors and weakest in the financials and consumer staples sectors. From a sector allocation perspective, an underweight to the consumer staples sector and an overweight to the health care sector contributed to relative return, while an overweight to the consumer discretionary sector and an underweight to the industrials sector detracted from relative return. From a geographic perspective, an allocation to the United States and stock selection in China contributed to relative performance and stock selection in Germany and the lack of an allocation to Switzerland detracted from relative performance.
William Blair Investment Management, LLC posted a positive total return and outperformed its international multi-cap growth comparative index. Stock selection was strongest in the consumer discretionary and health care sectors and weakest in the financials and energy sectors. From a sector allocation perspective, William Blair’s overweight to the information technology and industrials sectors contributed to relative performance, while an underweight to the materials sector detracted from relative performance. From a geographic perspective, stock selection in China and Switzerland contributed to relative performance, while an overweight to China and stock selection in India detracted from relative performance.
Harris Associates L.P. posted the strongest total return and outperformed its international growth comparative index. Stock selection was strongest in the industrials and materials sectors and weakest in the consumer discretionary and consumer staples sectors. From a sector allocation perspective, Harris’ underweight to the consumer staples sector and overweight to the financials sector contributed to relative performance, while an underweight to the energy sector and overweight to the communications services sector detracted from relative performance. From a geographic perspective, stock selection in the United Kingdom and Italy contributed to relative performance, while an overweight to China and stock selection in Australia detracted from relative performance.
Mellon Investments Corporation, the fund’s smallest subadviser allocation, was liquidated to cash on January 31, 2020. The raised funds were reallocated within the portfolio. Mellon is currently a dormant subadviser for the fund.
Management views and portfolio holdings may have changed since the report date.
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Laudus International MarketMasters Fund
Performance and Fund Facts as of October 31, 2021
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/laudusfunds_prospectus.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1,2,3
Average Annual Total Returns1,3
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Laudus International MarketMasters Fund (4/2/04)2 | 33.50% | 12.85% | 9.79% |
| MSCI EAFE® Index (Net)4 | 34.18% | 9.79% | 7.37% |
| Fund Category: Morningstar Foreign Large Growth5 | 27.70% | 13.76% | 9.74% |
| Fund Expense Ratios6: Net 1.25%; Gross 1.51% | |||
Investment Managers and Allocations7
| Investment Managers | Investment Style | % of Net Assets |
| American Century Investment Management, Inc. | International Small-Cap Growth | 28.7% |
| William Blair Investment Management, LLC | International Multi-Cap Growth | 25.6% |
| Mondrian Investment Partners Limited | International Small-Cap Value | 18.2% |
| Harris Associates L.P. | International Large-Cap Value | 18.0% |
| Baillie Gifford Overseas Limited | International Growth | 8.5% |
| Mellon Investment Corporation | International Blend | 0.0% 8 |
| Cash and other assets | 1.0% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | The fund commenced operations on October 16, 1996 which became the Laudus International MarketMasters Fund Investor Shares. The Investor Shares were consolidated into Select Shares on February 26, 2019. The performance presented is that of the former Select Shares which commenced operations on April 2, 2004. |
| 3 | The fund’s performance relative to the index may be affected by fair-value pricing. See financial note 2 for more information. |
| 4 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 5 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 6 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, refer to the financial highlights section of the financial statements. |
| 7 | For more information about each of the investment manager’s investment styles, refer to the fund’s prospectus. |
| 8 | Less than 0.05%. |
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Laudus International MarketMasters Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 457 |
| Weighted Average Market Cap (millions) | $53,536 |
| Price/Earnings Ratio (P/E) | 22.1 |
| Price/Book Ratio (P/B) | 3.0 |
| Portfolio Turnover Rate | 59% |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.
| 1 | Excludes derivatives. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
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Laudus International MarketMasters 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, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in the fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2021 and held through October 31, 2021.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for the fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs. 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 5/1/21 | ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 10/31/21 | EXPENSES PAID DURING PERIOD 5/1/21-10/31/212 | |
| Laudus International MarketMasters Fund | ||||
| Actual Return | 1.25% | $1,000.00 | $1,035.50 | $6.41 |
| Hypothetical 5% Return | 1.25% | $1,000.00 | $1,018.90 | $6.36 |
| 1 | Based on the most recent six-month expense ratio. |
| 2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
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Laudus International MarketMasters Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/191 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $24.37 | $22.89 | $22.89 | $26.96 | $21.16 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)2 | 0.01 | 0.00 3 | 0.31 | 0.24 | 0.22 | |
| Net realized and unrealized gains (losses) | 7.94 | 1.95 | 1.74 | (3.09) | 5.76 | |
| Total from investment operations | 7.95 | 1.95 | 2.05 | (2.85) | 5.98 | |
| Less distributions: | ||||||
| Distributions from net investment income | — | (0.43) | (0.29) | (0.36) | (0.18) | |
| Distributions from net realized gains | (1.72) | (0.04) | (1.76) | (0.86) | — | |
| Total distributions | (1.72) | (0.47) | (2.05) | (1.22) | (0.18) | |
| Net asset value at end of period | $30.60 | $24.37 | $22.89 | $22.89 | $26.96 | |
| Total return | 33.50% | 8.56% | 10.50% | (11.09%) | 28.52% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses | 1.25% | 1.25% | 1.25% | 1.25% | 1.25% | |
| Gross operating expenses | 1.47% | 1.51% | 1.50% | 1.51% | 1.53% | |
| Net investment income (loss) | 0.05% | 0.00% 4 | 1.43% | 0.92% | 0.92% | |
| Portfolio turnover rate | 59% | 65% | 54% | 69% | 71% | |
| Net assets, end of period (x 1,000,000) | $1,495 | $1,243 | $1,413 | $1,127 | $1,229 | |
| 1 | Effective February 26, 2019, the Investor Share class, and the Select Share class were consolidated into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares. |
| 2 | Calculated based on the average shares outstanding during the period. |
| 3 | Per-share amount was less than $0.005. |
| 4 | Less than 0.005% |
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See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/laudusfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 97.0% OF NET ASSETS | ||
| Argentina 1.0% | ||
| Globant S.A. * | 4,380 | 1,398,052 |
| MercadoLibre, Inc. * | 8,628 | 12,778,241 |
| 14,176,293 | ||
| Australia 4.0% | ||
| Altium Ltd. | 106,634 | 2,970,466 |
| Appen Ltd. | 93,507 | 761,944 |
| Aristocrat Leisure Ltd. | 63,614 | 2,256,180 |
| Atlassian Corp. plc, Class A * | 9,063 | 4,152,032 |
| Brambles Ltd. | 243,700 | 1,848,877 |
| carsales.com Ltd. | 191,873 | 3,590,738 |
| Centuria Office REIT | 1,997,966 | 3,625,910 |
| Corporate Travel Management Ltd. * | 234,755 | 4,349,385 |
| Costa Group Holdings Ltd. | 982,603 | 2,172,610 |
| IDP Education Ltd. | 197,610 | 5,590,989 |
| Inghams Group Ltd. | 1,032,577 | 2,896,451 |
| InvoCare Ltd. | 243,267 | 2,084,269 |
| Mineral Resources Ltd. | 76,612 | 2,252,262 |
| National Storage REIT | 1,305,355 | 2,363,379 |
| Netwealth Group Ltd. | 46,468 | 610,721 |
| NEXTDC Ltd. * | 372,612 | 3,326,244 |
| Orica Ltd. | 304,890 | 3,499,921 |
| OZ Minerals Ltd. | 181,883 | 3,459,752 |
| Pro Medicus Ltd. | 15,472 | 624,813 |
| Shopping Centres Australasia Property Group | 1,793,362 | 3,767,595 |
| Technology One Ltd. | 341,179 | 3,168,285 |
| 59,372,823 | ||
| Austria 0.3% | ||
| ANDRITZ AG | 85,636 | 4,863,996 |
| Belgium 0.6% | ||
| Anheuser-Busch InBev S.A./N.V. | 83,600 | 5,113,577 |
| Melexis N.V. | 22,511 | 2,596,338 |
| Warehouses De Pauw CVA | 26,315 | 1,198,293 |
| 8,908,208 | ||
| Brazil 0.7% | ||
| B3 S.A. - Brasil Bolsa Balcao | 365,200 | 770,674 |
| Locaweb Servicos de Internet S.A. * | 826,757 | 2,680,756 |
| Magazine Luiza S.A. | 271,000 | 519,067 |
| Notre Dame Intermedica Participacoes S.A. | 51,800 | 589,058 |
| Pet Center Comercio e Participacoes S.A. | 454,619 | 1,511,960 |
| Petro Rio S.A. * | 697,900 | 2,902,249 |
| Santos Brasil Participacoes S.A. * | 870,200 | 794,063 |
| 9,767,827 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Canada 6.5% | ||
| Altus Group Ltd. | 69,693 | 3,655,278 |
| Boralex, Inc., Class A | 135,479 | 4,192,668 |
| BRP, Inc. | 53,922 | 4,741,267 |
| Canada Goose Holdings, Inc. * | 22,854 | 847,883 |
| Canadian National Railway Co. | 51,357 | 6,825,468 |
| Cenovus Energy, Inc. | 37,825 | 452,335 |
| Colliers International Group, Inc. | 20,262 | 2,939,431 |
| Enghouse Systems Ltd. | 9,298 | 403,219 |
| FirstService Corp. | 14,057 | 2,803,676 |
| goeasy Ltd. | 43,034 | 6,743,709 |
| Innergex Renewable Energy, Inc. | 238,614 | 3,971,759 |
| Kinaxis, Inc. * | 35,045 | 5,439,111 |
| Linamar Corp. | 19,208 | 1,056,471 |
| Lululemon Athletica, Inc. * | 7,836 | 3,651,654 |
| Nuvei Corp. - CAD * | 18,632 | 2,239,273 |
| Nuvei Corp. - USD *(a) | 35,440 | 4,259,329 |
| Open Text Corp. | 56,200 | 2,830,889 |
| Restaurant Brands International, Inc. | 32,312 | 1,830,152 |
| Ritchie Bros. Auctioneers, Inc. | 77,528 | 5,299,041 |
| Shopify, Inc., Class A * | 2,179 | 3,196,005 |
| Spin Master Corp. * | 84,713 | 2,932,373 |
| Stantec, Inc. | 79,743 | 4,407,257 |
| TFI International, Inc. | 65,333 | 7,244,382 |
| The Descartes Systems Group, Inc. * | 68,883 | 5,625,408 |
| Toromont Industries Ltd. | 7,076 | 629,556 |
| Tricon Residential, Inc. | 249,339 | 3,628,471 |
| Whitecap Resources, Inc. | 765,178 | 4,593,788 |
| 96,439,853 | ||
| China 4.7% | ||
| 21vianet Group, Inc. ADR * | 131,712 | 2,065,244 |
| Aier Eye Hospital Group Co., Ltd., A Shares | 119,188 | 900,215 |
| Airtac International Group | 95,226 | 2,849,349 |
| Alibaba Group Holding Ltd. * | 518,212 | 10,655,816 |
| Alibaba Group Holding Ltd. ADR * | 17,365 | 2,864,183 |
| Centre Testing International Group Co. Ltd., A Shares | 212,700 | 915,682 |
| Chacha Food Co., Ltd., A Shares | 65,351 | 581,332 |
| China Lesso Group Holdings Ltd. | 787,000 | 1,216,440 |
| China Yongda Automobiles Services Holdings Ltd. | 2,047,500 | 3,257,725 |
| Country Garden Services Holdings Co., Ltd. | 127,000 | 977,707 |
| Foshan Haitian Flavouring & Food Co., Ltd., Class A | 60,048 | 1,098,120 |
| Hangzhou Tigermed Consulting Co., Ltd., A Shares | 52,400 | 1,393,123 |
| JD.com, Inc., A Shares * | 46,400 | 1,816,420 |
| Li Ning Co., Ltd. | 303,500 | 3,349,140 |
| Meituan, B Shares * | 244,800 | 8,330,204 |
| NAURA Technology Group Co., Ltd., A Shares | 25,000 | 1,448,189 |
| NIO, Inc. ADR * | 60,145 | 2,370,314 |
12
Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Ping An Insurance Group Co. of China Ltd., H Shares | 484,500 | 3,470,342 |
| Proya Cosmetics Co. Ltd., A Shares | 24,800 | 777,368 |
| Shenzhen Mindray Bio-Medical Electronics Co., Ltd. | 18,300 | 1,070,938 |
| Silergy Corp. | 5,000 | 826,026 |
| Tencent Holdings Ltd. | 160,700 | 9,775,348 |
| Trip.com Group Ltd. ADR * | 18,900 | 539,784 |
| Vipshop Holdings Ltd., ADR * | 216,141 | 2,412,134 |
| Weimob Inc. * | 210,000 | 320,746 |
| WuXi AppTec Co. Ltd., A Shares | 48,900 | 1,052,443 |
| Wuxi Biologics Cayman, Inc. * | 232,500 | 3,521,666 |
| 69,855,998 | ||
| Denmark 2.0% | ||
| ALK-Abello A/S * | 9,525 | 4,126,760 |
| Chr. Hansen Holding A/S | 10,543 | 838,853 |
| Coloplast A/S, Class B | 9,184 | 1,499,912 |
| DSV A/S | 28,272 | 6,570,899 |
| Genmab A/S * | 11,573 | 5,199,187 |
| Jyske Bank A/S * | 63,527 | 3,099,292 |
| Netcompany Group A/S | 8,049 | 916,560 |
| Orsted A/S | 13,260 | 1,872,875 |
| Royal Unibrew A/S | 43,822 | 5,443,803 |
| 29,568,141 | ||
| Finland 0.6% | ||
| Metso Outotec Oyj | 157,418 | 1,581,486 |
| Neste Oyj | 55,385 | 3,083,383 |
| QT Group Oyj * | 18,744 | 3,032,647 |
| UPM-Kymmene Oyj | 45,200 | 1,595,150 |
| 9,292,666 | ||
| France 8.3% | ||
| Accor S.A. * | 158,215 | 5,661,947 |
| Airbus SE * | 48,405 | 6,209,491 |
| Alten S.A. | 27,603 | 4,447,956 |
| APERAM S.A. | 52,557 | 3,133,638 |
| BNP Paribas S.A. | 138,203 | 9,250,923 |
| Capgemini SE | 10,400 | 2,424,893 |
| Coface S.A. | 275,048 | 3,932,581 |
| Criteo S.A., ADR * | 40,060 | 1,323,582 |
| Danone S.A. | 49,200 | 3,207,138 |
| Dassault Systemes SE | 60,636 | 3,540,984 |
| Elis S.A. * | 178,366 | 3,386,741 |
| Gaztransport Et Technigaz S.A. | 41,699 | 3,446,862 |
| Hermes International | 3,133 | 4,974,937 |
| Kering S.A. | 13,638 | 10,235,790 |
| Korian S.A. | 146,915 | 4,894,195 |
| LISI | 31,903 | 886,961 |
| L'Oreal S.A. | 11,426 | 5,226,878 |
| LVMH Moet Hennessy Louis Vuitton SE | 7,807 | 6,121,637 |
| Publicis Groupe S.A. | 63,970 | 4,294,525 |
| Rubis S.C.A. | 125,050 | 4,007,764 |
| Safran S.A. | 29,718 | 3,999,737 |
| Sartorius Stedim Biotech | 5,338 | 2,942,150 |
| SOITEC * | 16,316 | 4,344,151 |
| Teleperformance | 11,327 | 4,731,420 |
| Valeo S.A. | 127,413 | 3,743,656 |
| Verallia S.A. | 130,870 | 4,845,147 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Wendel SE | 28,945 | 3,855,750 |
| Worldline S.A. * | 78,904 | 4,601,377 |
| 123,672,811 | ||
| Germany 9.3% | ||
| AIXTRON SE | 83,003 | 1,971,300 |
| Allianz SE | 38,870 | 9,026,016 |
| Bayer AG | 179,523 | 10,117,495 |
| Bayerische Motoren Werke AG | 87,700 | 8,860,857 |
| Befesa S.A. | 40,371 | 3,003,587 |
| Carl Zeiss Meditec AG, Class B | 8,684 | 1,748,873 |
| CompuGroup Medical SE & Co. KgaA | 9,148 | 764,579 |
| Continental AG * | 67,635 | 7,951,942 |
| CTS Eventim AG & Co. KGaA * | 45,909 | 3,338,986 |
| Daimler AG | 91,394 | 9,071,989 |
| Delivery Hero SE * | 53,993 | 6,734,278 |
| Dermapharm Holding SE | 45,975 | 4,624,287 |
| Duerr AG | 76,398 | 3,462,582 |
| Eckert & Ziegler Strahlen- und Medizintechnik AG | 30,549 | 4,574,321 |
| Fielmann AG | 70,683 | 4,661,100 |
| flatexDEGIRO AG * | 5,746 | 130,524 |
| Fresenius Medical Care AG & Co. KGaA | 78,600 | 5,221,324 |
| Fresenius SE & Co. KGaA | 63,700 | 2,895,404 |
| Friedrich Vorwerk Group SE * | 69,464 | 3,089,958 |
| Gerresheimer AG | 18,824 | 1,727,152 |
| HelloFresh SE * | 21,811 | 1,767,539 |
| Henkel AG & Co. KGaA | 27,200 | 2,271,534 |
| Hypoport SE * | 1,015 | 624,867 |
| Infineon Technologies AG | 91,565 | 4,288,111 |
| JOST Werke AG | 35,209 | 2,039,150 |
| KION Group AG | 13,358 | 1,459,078 |
| MTU Aero Engines AG | 19,449 | 4,332,021 |
| Nemetschek SE | 7,769 | 892,010 |
| Norma Group SE | 63,995 | 2,749,292 |
| Novem Group S.A. * | 149,944 | 2,886,032 |
| Puma SE | 23,276 | 2,887,384 |
| S&T AG | 80,858 | 1,943,032 |
| SAP SE | 33,200 | 4,807,728 |
| Stabilus S.A. | 31,980 | 2,402,977 |
| ThyssenKrupp AG * | 419,700 | 4,368,941 |
| Vitesco Technologies Group AG * | 12,867 | 737,763 |
| Zalando SE * | 65,153 | 6,155,692 |
| 139,589,705 | ||
| Hong Kong 1.6% | ||
| AIA Group Ltd. | 515,800 | 5,780,575 |
| ASM Pacific Technology Ltd. | 241,100 | 2,608,800 |
| Cafe De Coral Holdings Ltd. | 1,910,000 | 3,485,333 |
| HKBN Ltd. | 2,827,483 | 3,387,671 |
| SUNeVision Holdings Ltd. | 4,333,000 | 3,978,307 |
| Yue Yuen Industrial Holdings Ltd. * | 1,899,500 | 4,032,090 |
| 23,272,776 | ||
| India 2.3% | ||
| Axis Bank Ltd. * | 300,224 | 2,987,516 |
| Crompton Greaves Consumer Electricals Ltd. | 120,238 | 748,545 |
| Dr Lal PathLabs Ltd. | 22,284 | 1,046,689 |
| Havells India Ltd. | 46,116 | 779,394 |
| HDFC Bank Ltd. | 178,280 | 3,776,654 |
| Indraprastha Gas Ltd. | 157,963 | 1,001,278 |
| Info Edge India Ltd. | 9,897 | 805,397 |
| InterGlobe Aviation Ltd. * | 44,242 | 1,285,171 |
13
Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Ipca Laboratories Ltd. | 16,766 | 480,702 |
| Max Healthcare Institute Ltd. * | 660,362 | 2,927,597 |
| Pidilite Industries Ltd. | 22,395 | 693,032 |
| Prestige Estates Projects Ltd. | 141,826 | 809,663 |
| Reliance Industries Ltd. | 180,483 | 6,124,719 |
| Varun Beverages Ltd. | 343,366 | 3,900,651 |
| Voltas Ltd. | 38,600 | 622,243 |
| WNS Holdings Ltd., ADR * | 66,062 | 5,866,966 |
| 33,856,217 | ||
| Indonesia 0.4% | ||
| PT Bank Central Asia Tbk | 9,060,000 | 4,790,722 |
| PT Bank Mandiri (Persero) Tbk | 3,622,900 | 1,831,636 |
| 6,622,358 | ||
| Ireland 1.1% | ||
| Glanbia plc | 222,736 | 3,637,522 |
| ICON plc * | 12,599 | 3,613,015 |
| Kingspan Group plc | 27,831 | 3,204,043 |
| Ryanair Holdings plc * | 10,000 | 196,253 |
| Ryanair Holdings plc ADR * | 55,429 | 6,291,746 |
| 16,942,579 | ||
| Israel 1.3% | ||
| Inmode Ltd. * | 65,602 | 6,215,133 |
| Kornit Digital Ltd. * | 34,481 | 5,767,982 |
| Nice Ltd. ADR * | 4,138 | 1,171,137 |
| Nova Measuring Instruments Ltd. * | 49,489 | 5,375,495 |
| Wix.com Ltd. * | 7,370 | 1,370,525 |
| 19,900,272 | ||
| Italy 1.7% | ||
| Amplifon S.p.A. | 19,755 | 1,005,297 |
| Autogrill S.p.A. * | 537,189 | 4,217,206 |
| BFF Bank S.p.A. | 210,881 | 1,888,235 |
| Brunello Cucinelli S.p.A. * | 11,615 | 704,684 |
| Esprinet S.p.A. | 88,523 | 1,149,879 |
| Ferrari N.V. | 15,738 | 3,734,421 |
| Intercos S.p.A. *(a) | 123,301 | 1,781,699 |
| Intesa Sanpaolo S.p.A. | 3,239,100 | 9,206,092 |
| Moncler S.p.A. | 14,166 | 1,019,447 |
| Tenaris S.A. | 76,219 | 848,797 |
| 25,555,757 | ||
| Japan 11.4% | ||
| Asahi Intecc Co., Ltd. | 39,900 | 1,051,738 |
| Asics Corp. | 95,900 | 2,389,965 |
| BASE, Inc. * | 37,000 | 302,348 |
| BayCurrent Consulting, Inc. | 20,700 | 8,590,911 |
| Benefit One, Inc. | 27,100 | 1,367,644 |
| Bengo4.com, Inc. * | 4,700 | 282,639 |
| Comture Corp. | 134,900 | 3,658,225 |
| Daikin Industries Ltd. | 17,300 | 3,788,955 |
| Digital Arts, Inc. | 54,400 | 4,441,840 |
| Disco Corp. | 1,700 | 458,316 |
| en-japan, Inc. | 253,400 | 10,062,996 |
| Food & Life Cos., Ltd. | 118,700 | 5,144,863 |
| GMO Financial Gate, Inc. | 11,800 | 3,064,547 |
| GMO Payment Gateway, Inc. | 6,900 | 874,204 |
| Harmonic Drive Systems, Inc. | 11,500 | 521,315 |
| Hennge KK * | 52,700 | 2,606,223 |
| Hoya Corp. | 19,100 | 2,811,682 |
| IHI Corp. | 182,200 | 4,255,793 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Infomart Corp. | 146,900 | 1,433,501 |
| Insource Co., Ltd. | 113,000 | 2,262,447 |
| Invincible Investment Corp. | 8,761 | 3,463,649 |
| IR Japan Holdings Ltd. | 10,700 | 986,760 |
| JMDC, Inc. * | 82,800 | 6,224,906 |
| JTOWER, Inc. * | 49,400 | 4,693,313 |
| Keyence Corp. | 7,500 | 4,527,110 |
| Komatsu Ltd. | 70,700 | 1,851,725 |
| Kyudenko Corp. | 128,100 | 4,063,346 |
| M3, Inc. | 107,400 | 6,329,113 |
| MatsukiyoCocokara & Co., Ltd. | 152,100 | 6,744,040 |
| Menicon Co., Ltd. | 80,600 | 3,026,066 |
| MISUMI Group, Inc. | 29,400 | 1,229,618 |
| MonotaRO Co., Ltd. | 52,600 | 1,198,847 |
| Musashi Seimitsu Industry Co., Ltd. | 133,600 | 2,514,499 |
| Nextage Co., Ltd. | 287,200 | 5,263,444 |
| Nifco, Inc. | 153,800 | 4,906,147 |
| Nihon M&A Center Holdings, Inc. | 59,800 | 1,836,122 |
| Nippon Gas Co., Ltd. | 106,500 | 1,320,982 |
| Olympus Corp. | 133,100 | 2,883,351 |
| Omron Corp. | 32,200 | 3,079,435 |
| Open House Co., Ltd. | 54,500 | 3,475,631 |
| Outsourcing, Inc. | 215,600 | 4,135,927 |
| PALTAC Corp. | 94,600 | 4,188,868 |
| Premier Anti-Aging Co., Ltd. * | 14,500 | 1,529,946 |
| Prestige International, Inc. | 132,500 | 908,593 |
| Rakus Co. Ltd. | 30,600 | 969,849 |
| Resorttrust, Inc. | 111,800 | 1,981,224 |
| SHIFT, Inc. * | 4,600 | 1,060,847 |
| SMC Corp. | 5,900 | 3,520,914 |
| Systena Corp. | 367,100 | 6,783,920 |
| TechnoPro Holdings, Inc. | 35,900 | 1,147,337 |
| TIS, Inc. | 49,100 | 1,337,625 |
| Toyo Tire Corp. | 133,000 | 2,211,579 |
| Toyota Motor Corp. | 217,500 | 3,837,604 |
| Ushio, Inc. | 153,900 | 2,753,330 |
| West Holdings Corp. | 85,000 | 4,750,798 |
| 170,106,617 | ||
| Luxembourg 0.2% | ||
| Eurofins Scientific SE | 21,803 | 2,573,079 |
| Malaysia 0.1% | ||
| CTOS Digital BHD | 4,290,700 | 2,005,010 |
| Mexico 0.4% | ||
| Controladora Vuela Cia de Aviacion S.A.B. de C.V. ADR * | 185,649 | 3,360,247 |
| Grupo Aeroportuario del Sureste S.A.B. de C.V. ADR | 3,630 | 731,989 |
| Grupo Televisa S.A.B. ADR | 253,900 | 2,569,468 |
| 6,661,704 | ||
| Netherlands 5.5% | ||
| Adyen N.V. * | 4,171 | 12,585,196 |
| Alfen Beheer BV * | 27,549 | 3,103,342 |
| Arcadis N.V. | 52,291 | 2,548,698 |
| ASM International N.V. | 4,981 | 2,254,324 |
| ASML Holding N.V. | 32,222 | 26,193,251 |
| ASR Nederland N.V. | 67,626 | 3,161,124 |
| B&S Group Sarl | 290,287 | 2,623,709 |
| Basic-Fit N.V. * | 64,349 | 3,124,519 |
| BE Semiconductor Industries N.V. | 57,136 | 5,220,273 |
| Euronext N.V. | 11,313 | 1,272,763 |
14
Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| EXOR N.V. | 63,100 | 5,952,280 |
| IMCD N.V. | 6,185 | 1,373,346 |
| Marel HF | 443,142 | 2,971,178 |
| OCI N.V. * | 86,832 | 2,461,557 |
| Prosus N.V. * | 59,731 | 5,261,284 |
| Royal Boskalis Westminster N.V. | 92,794 | 2,767,509 |
| 82,874,353 | ||
| Norway 0.7% | ||
| AutoStore Holdings Ltd. * | 88,713 | 349,637 |
| Bakkafrost P/F | 50,384 | 4,660,718 |
| Elkem A.S.A. * | 65,972 | 262,230 |
| Fjordkraft Holding A.S.A. | 558,924 | 3,327,730 |
| Pexip Holding A.S.A. * | 40,404 | 191,030 |
| Tomra Systems A.S.A. | 27,915 | 1,804,167 |
| 10,595,512 | ||
| Poland 0.1% | ||
| Allegro.eu S.A. * | 64,038 | 724,222 |
| InPost S.A. * | 38,893 | 555,306 |
| 1,279,528 | ||
| Portugal 0.0% | ||
| Banco Espirito Santo S.A. *(a) | 42,176 | 0 |
| Republic of Korea 1.5% | ||
| BGF retail Co., Ltd. | 17,121 | 2,378,447 |
| Ecopro BM Co., Ltd | 8,403 | 2,954,411 |
| Hansol Chemical Co., Ltd. | 12,552 | 3,542,282 |
| Hugel, Inc. * | 7,195 | 1,117,975 |
| Kakao Corp. | 19,384 | 2,085,416 |
| NAVER Corp. | 9,580 | 3,330,799 |
| Osstem Implant Co., Ltd. | 24,653 | 2,613,252 |
| Samsung SDI Co., Ltd. | 3,074 | 1,939,472 |
| SK Materials Co., Ltd. | 5,286 | 1,730,443 |
| 21,692,497 | ||
| Russia 0.1% | ||
| Yandex N.V., Class A * | 25,751 | 2,133,213 |
| Singapore 1.0% | ||
| ESR-REIT | 8,362,609 | 2,976,680 |
| Nanofilm Technologies International Ltd. | 920,700 | 2,584,783 |
| SATS Ltd. * | 1,026,400 | 3,192,240 |
| Sheng Siong Group Ltd. | 2,496,300 | 2,628,659 |
| SPH REIT (a) | 3,924,000 | 2,840,420 |
| 14,222,782 | ||
| South Africa 0.1% | ||
| Naspers Ltd., N Shares | 12,571 | 2,128,946 |
| Spain 0.7% | ||
| Amadeus IT Group S.A. * | 126,634 | 8,471,545 |
| EDP Renovaveis S.A. | 55,952 | 1,558,800 |
| Gestamp Automocion S.A. * | 199,060 | 890,011 |
| 10,920,356 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Sweden 5.3% | ||
| AAK AB | 90,352 | 1,976,198 |
| AddTech AB, B Shares | 209,073 | 4,677,419 |
| AFRY AB | 48,951 | 1,456,637 |
| Atlas Copco AB, A Shares | 101,028 | 6,506,070 |
| Atlas Copco AB, B Shares | 19,995 | 1,083,605 |
| Beijer Ref AB | 51,332 | 1,053,381 |
| BHG Group AB * | 29,229 | 337,035 |
| Bravida Holding AB | 252,502 | 3,797,968 |
| CELLINK AB, B * | 94,585 | 4,742,770 |
| EQT AB | 39,613 | 2,092,353 |
| Evolution AB | 19,098 | 3,100,404 |
| Fortnox AB | 40,778 | 2,886,938 |
| H & M Hennes & Mauritz AB, B Shares | 237,600 | 4,469,928 |
| Hemnet Group AB * | 27,286 | 546,006 |
| Hexagon AB, B Shares | 279,705 | 4,501,487 |
| Indutrade AB | 55,668 | 1,622,802 |
| Investment AB Latour, B Shares | 34,178 | 1,241,461 |
| Kinnevik AB, B Shares * | 36,182 | 1,420,173 |
| Lifco AB | 178,062 | 5,191,983 |
| Nibe Industrier AB, B Shares | 138,312 | 2,057,207 |
| Nolato AB, B Shares | 76,744 | 1,013,364 |
| Nordic Entertainment Group AB, B Shares * | 73,058 | 4,236,477 |
| SKF AB, B Shares | 156,966 | 3,645,565 |
| Spotify Technology S.A. * | 20,640 | 5,973,216 |
| Storytel AB * | 50,945 | 1,004,485 |
| Sweco AB, B Shares | 34,648 | 551,711 |
| Thule Group AB | 15,429 | 891,496 |
| Trelleborg AB, B Shares | 30,306 | 693,632 |
| Vitrolife AB | 56,518 | 3,678,358 |
| Volvo AB, B Shares | 144,900 | 3,378,945 |
| 79,829,074 | ||
| Switzerland 5.4% | ||
| Bachem Holding AG | 898 | 722,853 |
| Belimo Holding AG | 1,460 | 848,318 |
| Burckhardt Compression Holding AG | 9,681 | 4,070,757 |
| Cie Financiere Richemont S.A. | 8,700 | 1,076,628 |
| Comet Holding AG | 12,833 | 4,775,048 |
| Credit Suisse Group AG | 822,353 | 8,553,874 |
| Glencore plc * | 1,565,723 | 7,829,524 |
| Holcim Ltd. * | 103,764 | 5,176,014 |
| Logitech International S.A. | 6,693 | 559,889 |
| Lonza Group AG | 6,407 | 5,265,275 |
| Novartis AG | 55,300 | 4,574,012 |
| Partners Group Holding AG | 2,892 | 5,052,192 |
| PolyPeptide Group AG * | 34,719 | 4,443,393 |
| Roche Holding AG | 8,170 | 3,165,009 |
| Siegfried Holding AG * | 949 | 912,788 |
| SIG Combibloc Group AG * | 197,593 | 5,167,589 |
| Sika AG | 16,662 | 5,644,746 |
| Softwareone Holding AG * | 21,503 | 498,265 |
| Straumann Holding AG | 1,993 | 4,148,822 |
| Tecan Group AG | 2,209 | 1,353,459 |
| The Swatch Group AG - Bearer Shares | 7,390 | 2,034,057 |
| VAT Group AG | 3,682 | 1,760,109 |
| Zur Rose Group AG * | 6,784 | 2,408,038 |
| 80,040,659 | ||
15
Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Taiwan 1.9% | ||
| Advanced Wireless Semiconductor Co. | 639,000 | 3,684,781 |
| ASMedia Technology, Inc. | 10,000 | 586,137 |
| ASPEED Technology, Inc. | 55,000 | 5,517,279 |
| Chailease Holding Co., Ltd. | 503,299 | 4,820,371 |
| Globalwafers Co., Ltd. | 22,000 | 603,636 |
| MediaTek, Inc. | 116,000 | 3,817,871 |
| Merida Industry Co. Ltd. | 89,000 | 927,048 |
| momo.com, Inc. | 11,000 | 708,843 |
| Nien Made Enterprise Co., Ltd. | 67,000 | 920,783 |
| Parade Technologies Ltd. | 31,000 | 1,997,005 |
| Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 48,698 | 5,536,963 |
| 29,120,717 | ||
| Thailand 0.3% | ||
| Carabao Group plc, Class F | 111,200 | 415,544 |
| Sea Ltd. ADR * | 11,592 | 3,982,664 |
| 4,398,208 | ||
| United Kingdom 14.6% | ||
| 3i Group plc | 74,727 | 1,395,528 |
| Ashtead Group plc | 88,141 | 7,387,109 |
| Auction Technology Group plc * | 110,955 | 2,147,124 |
| Avast plc | 93,320 | 714,683 |
| AVEVA Group plc | 21,498 | 1,046,865 |
| Big Yellow Group plc | 40,155 | 812,772 |
| Bodycote plc | 364,748 | 3,995,227 |
| boohoo Group plc * | 134,903 | 335,539 |
| Bridgepoint Group plc * | 773,823 | 5,252,719 |
| Ceres Power Holdings plc * | 28,382 | 483,742 |
| Clipper Logistics plc | 285,639 | 2,804,675 |
| CNH Industrial N.V. | 419,692 | 7,229,430 |
| Coats Group plc | 4,990,011 | 4,397,929 |
| Compass Group plc * | 296,213 | 6,285,829 |
| Computacenter plc | 97,075 | 3,568,942 |
| ContourGlobal plc | 1,163,686 | 3,167,365 |
| Croda International plc | 28,118 | 3,639,328 |
| CVS Group plc * | 22,885 | 779,933 |
| Darktrace plc * | 309,408 | 3,398,110 |
| Diploma plc | 100,707 | 4,138,768 |
| Electrocomponents plc | 353,574 | 5,439,943 |
| Endava plc, ADR * | 44,975 | 7,126,738 |
| Equiniti Group plc * | 1,094,437 | 2,672,062 |
| Experian plc | 75,102 | 3,443,517 |
| Forterra plc | 995,562 | 3,528,816 |
| Future plc | 129,225 | 6,234,229 |
| Greggs plc | 106,205 | 4,439,043 |
| Halma plc | 72,536 | 2,941,574 |
| Hays plc | 1,875,584 | 4,250,543 |
| Hill & Smith Holdings plc | 135,207 | 3,393,590 |
| Howden Joinery Group plc | 336,440 | 4,235,188 |
| IMI plc | 59,436 | 1,327,317 |
| Inchcape plc | 490,447 | 5,544,125 |
| Informa plc * | 113,412 | 806,806 |
| Intermediate Capital Group plc | 251,144 | 7,533,054 |
| Intertek Group plc | 17,394 | 1,164,840 |
| John Wood Group plc * | 988,054 | 2,881,206 |
| Liberty Global plc, Class A * | 170,400 | 4,897,296 |
| Lloyds Banking Group plc | 15,251,610 | 10,437,908 |
| London Stock Exchange Group plc | 31,001 | 3,017,754 |
| Marks & Spencer Group plc * | 1,588,828 | 3,993,910 |
| Natwest Group plc | 1,071,218 | 3,229,909 |
| Ocado Group plc * | 122,160 | 3,014,981 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Prudential plc | 157,400 | 3,212,212 |
| Reckitt Benckiser Group plc | 25,500 | 2,070,161 |
| Renishaw plc | 8,571 | 589,761 |
| Rentokil Initial plc | 288,238 | 2,320,011 |
| Rolls-Royce Holdings plc * | 556,733 | 1,004,814 |
| Rotork plc | 286,165 | 1,383,351 |
| S4 Capital plc * | 416,422 | 4,135,556 |
| Schroders plc | 76,333 | 3,781,064 |
| Segro plc | 146,397 | 2,587,500 |
| Smiths Group plc | 72,000 | 1,336,899 |
| Softcat plc | 29,257 | 777,971 |
| Spectris plc | 82,763 | 4,258,333 |
| Spirax-Sarco Engineering plc | 13,104 | 2,797,303 |
| SSP Group plc * | 963,599 | 3,394,837 |
| Trainline plc * | 110,274 | 478,100 |
| Tritax Big Box REIT plc | 2,917,806 | 8,979,355 |
| Trustpilot Group plc * | 152,877 | 660,469 |
| Ultra Electronics Holdings plc | 96,773 | 4,288,169 |
| Vesuvius plc | 431,253 | 2,780,615 |
| Victrex plc | 147,564 | 4,614,402 |
| WH Smith plc * | 9,392 | 201,049 |
| WPP plc | 244,200 | 3,529,855 |
| 217,717,753 | ||
| United States 1.3% | ||
| Illumina, Inc. * | 11,372 | 4,720,062 |
| Moderna, Inc. * | 18,326 | 6,326,319 |
| NVIDIA Corp. | 5,875 | 1,502,061 |
| Tesla, Inc. * | 6,256 | 6,969,184 |
| 19,517,626 | ||
| Uruguay 0.0% | ||
| Dlocal Ltd. * | 14,258 | 691,656 |
| Total Common Stocks (Cost $1,023,570,971) | 1,450,167,570 | |
| PREFERRED STOCKS 0.3% OF NET ASSETS | ||
| Brazil 0.1% | ||
| Banco Pan S.A. | 418,100 | 984,540 |
| Germany 0.0% | ||
| Henkel AG & Co. KGaA | 5,100 | 456,896 |
| Republic of Korea 0.2% | ||
| Samsung Electronics Co., Ltd. | 46,300 | 2,543,537 |
| Total Preferred Stocks (Cost $5,000,373) | 3,984,973 | |
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Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY RATE, MATURITY DATE | FACE AMOUNT LOCAL CURRENCY | VALUE ($) |
| CORPORATE BONDS 0.0% OF NET ASSETS | ||
| Switzerland 0.0% | ||
| Credit Suisse Group (Guernsey) VII Ltd., Series A Mandatory Convertible Notes 3.00%, 11/12/21 | 400,000 | 484,819 |
| Credit Suisse Group (Guernsey) VII Ltd., Series BR Mandatory Convertible Notes 3.00%, 11/12/21 | 304,000 | 368,047 |
| Total Corporate Bonds (Cost $772,743) | 852,866 | |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| RIGHTS 0.0% OF NET ASSETS | ||
| India 0.0% | ||
| Reliance Industries Ltd. (Partly Paid Up) | ||
| expires 11/15/21 * | 7,844 | 199,930 |
| Total Rights (Cost $81,770) | 199,930 | |
| SECURITY | NUMBEROF SHARES | VALUE ($) |
| SHORT-TERM INVESTMENTS 2.1% OF NET ASSETS | ||
| Money Market Funds 2.1% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (b) | 31,253,777 | 31,253,777 |
| Total Short-Term Investments (Cost $31,253,777) | 31,253,777 | |
| Total Investments in Securities (Cost $1,060,679,634) | 1,486,459,116 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED DEPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| MSCI EAFE Index, expires 12/17/21 | 137 | 16,026,260 | (133,434) |
| SETTLEMENT DATE | COUNTERPARTY | CURRENCY TO BE RECEIVED | AMOUNT OF CURRENCY TO BE RECEIVED | CURRENCY TO BE DELIVERED | AMOUNT OF CURRENCY TO BE DELIVERED | UNREALIZED APPRECIATION ($) |
| FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||
| 12/15/21 | State Street Bank & Trust Co. | USD | 3,321,186 | CHF | 2,972,000 | 71,094 |
| * | Non-income producing security. |
| (a) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees. |
| (b) | The rate shown is the 7-day yield. |
| ADR — | American Depositary Receipt |
| CVA — | Dutch Certificate |
| REIT — | Real Estate Investment Trust |
| CHF — | Swiss Franc |
| USD — | U.S. Dollar |
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Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $— | $251,466,153 | $— | $251,466,153 |
| Argentina | 14,176,293 | — | — | 14,176,293 |
| Australia | 4,152,032 | 55,220,791 | — | 59,372,823 |
| Brazil | 9,767,827 | — | — | 9,767,827 |
| Canada | 92,180,524 | — | 4,259,329 | 96,439,853 |
| China | 10,251,659 | 59,604,339 | — | 69,855,998 |
| Denmark | 4,965,613 | 24,602,528 | — | 29,568,141 |
| France | 2,210,543 | 121,462,268 | — | 123,672,811 |
| Germany | 11,920,459 | 127,669,246 | — | 139,589,705 |
| India | 7,152,137 | 26,704,080 | — | 33,856,217 |
| Ireland | 9,904,761 | 7,037,818 | — | 16,942,579 |
| Israel | 19,900,272 | — | — | 19,900,272 |
| Italy | — | 23,774,058 | 1,781,699 | 25,555,757 |
| Mexico | 6,661,704 | — | — | 6,661,704 |
| Netherlands | 2,971,178 | 79,903,175 | — | 82,874,353 |
| Norway | 349,637 | 10,245,875 | — | 10,595,512 |
| Poland | 724,222 | 555,306 | — | 1,279,528 |
| Portugal | — | — | 0* | 0 |
| Russia | 2,133,213 | — | — | 2,133,213 |
| Singapore | 5,605,339 | 5,777,023 | 2,840,420 | 14,222,782 |
| Spain | 1,558,800 | 9,361,556 | — | 10,920,356 |
| Sweden | 10,419,524 | 69,409,550 | — | 79,829,074 |
| Switzerland | 7,327,113 | 72,713,546 | — | 80,040,659 |
| Taiwan | 5,536,963 | 23,583,754 | — | 29,120,717 |
| Thailand | 4,398,208 | — | — | 4,398,208 |
| United Kingdom | 45,142,035 | 172,575,718 | — | 217,717,753 |
| United States | 19,517,626 | — | — | 19,517,626 |
| Uruguay | 691,656 | — | — | 691,656 |
| Preferred Stocks1 | — | 3,000,433 | — | 3,000,433 |
| Brazil | 984,540 | — | — | 984,540 |
| Corporate Bonds1 | — | 852,866 | — | 852,866 |
| Rights 1 | — | 199,930 | — | 199,930 |
| Short-Term Investments1 | 31,253,777 | — | — | 31,253,777 |
| Foreign Currency Exchange Contracts2 | — | 71,094 | — | 71,094 |
| Liabilities | ||||
| Futures Contracts2 | (133,434) | — | — | (133,434) |
| Total | $331,724,221 | $1,145,791,107 | $8,881,448 | $1,486,396,776 |
| * | Level 3 amount shown includes securities determined to have no value at October 31, 2021. |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts and foreign currency contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $1,060,679,634) | $1,486,459,116 | |
| Foreign currency, at value (cost $1,712,716) | 1,712,033 | |
| Deposit with broker for futures contracts | 4,561,919 | |
| Receivables: | ||
| Investments sold | 10,665,011 | |
| Dividends | 1,281,202 | |
| Foreign tax reclaims | 758,111 | |
| Fund shares sold | 20,224 | |
| Interest | 10,829 | |
| Unrealized apppreciation on forward foreign currency contracts | 71,094 | |
| Prepaid expenses | + | 16,438 |
| Total assets | 1,505,555,977 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 7,077,524 | |
| Investment adviser and administrator fees | 1,303,806 | |
| Fund shares redeemed | 1,172,597 | |
| Foreign capital gains tax | 335,373 | |
| Shareholder service fees | 189,572 | |
| Variation margin on futures contracts | 116,191 | |
| Due to custodian | 74,039 | |
| Accrued expenses | + | 572,147 |
| Total liabilities | 10,841,249 | |
| Net assets | $1,494,714,728 | |
| Net Assets by Source | ||
| Capital received from investors | $886,508,744 | |
| Total distributable earnings | + | 608,205,984 |
| Net assets | $1,494,714,728 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $1,494,714,728 | 48,847,852 | $30.60 | ||
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Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $2,589,829) | $18,834,857 | |
| Interest received from securities - unaffiliated | + | 9,272 |
| Total investment income | 18,844,129 | |
| Expenses | ||
| Investment adviser and administrator fees | 18,500,489 | |
| Shareholder service fees | 2,268,373 | |
| Custodian fees | 281,576 | |
| Portfolio accounting fees | 139,104 | |
| Professional fees | 67,674* | |
| Shareholder reports | 59,668 | |
| Registration fees | 32,064 | |
| Independent trustees’ fees | 11,639 | |
| Transfer agent fees | 9,932 | |
| Other expenses | + | 44,225 |
| Total expenses | 21,414,744 | |
| Expense reduction by investment adviser and its affiliates | – | 3,237,566* |
| Net expenses | – | 18,177,178 |
| Net investment income | 666,951 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated (net of foreign capital gains tax paid of $99,593) | 201,600,091 | |
| Net realized gains on futures contracts | 13,415,746 | |
| Net realized losses on forward foreign currency exchange contracts | (81,115) | |
| Net realized losses on foreign currency transactions | + | (207,012) |
| Net realized gains | 214,727,710 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated (net of change in foreign capital gains tax of ($235,780)) | 187,102,503 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | 239,299 | |
| Net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts | 134,877 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (121,578) |
| Net change in unrealized appreciation (depreciation) | + | 187,355,101 |
| Net realized and unrealized gains | 402,082,811 | |
| Increase in net assets resulting from operations | $402,749,762 | |
| * | Includes professional fees of $21,839 associated with the filing of tax claims in the European Union deemed to be non-routine expenses of the fund. See financial notes 2(d) and 4 for additional information. |
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Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $666,951 | $55,632 | |
| Net realized gains | 214,727,710 | 89,185,162 | |
| Net change in unrealized appreciation (depreciation) | + | 187,355,101 | 21,758,004 |
| Increase in net assets from operations | $402,749,762 | $110,998,798 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($85,551,526) | ($27,899,553) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 2,560,644 | $74,676,320 | 4,963,270 | $95,437,857 | |
| Shares reinvested | 2,533,275 | 68,955,738 | 891,003 | 21,116,755 | |
| Shares redeemed | + | (7,230,462) | (208,820,997) | (16,594,568) | (369,846,702) |
| Net transactions in fund shares | (2,136,543) | ($65,188,939) | (10,740,295) | ($253,292,090) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 50,984,395 | $1,242,705,431 | 61,724,690 | $1,412,898,276 | |
| Total increase (decrease) | + | (2,136,543) | 252,009,297 | (10,740,295) | (170,192,845) |
| End of period | 48,847,852 | $1,494,714,728 | 50,984,395 | $1,242,705,431 | |
21
Laudus International MarketMasters Fund | Annual Report
See financial notes
Laudus International MarketMasters Fund
Financial Notes
1. Business Structure of the Fund:
Laudus International MarketMasters 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) | |
| Laudus International MarketMasters Fund | Schwab Target 2045 Fund |
| Schwab S&P 500 Index Fund | Schwab Target 2050 Fund |
| Schwab Small-Cap Index Fund® | Schwab Target 2055 Fund |
| Schwab Total Stock Market Index Fund® | Schwab Target 2060 Fund |
| Schwab U.S. Large-Cap Growth Index Fund | Schwab Target 2065 Fund |
| Schwab U.S. Large-Cap Value Index Fund | Schwab Fundamental US Large Company Index Fund |
| Schwab U.S. Mid-Cap Index Fund | Schwab Fundamental US Small Company Index Fund |
| Schwab International Index Fund® | Schwab Fundamental International Large Company Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Fundamental International Small Company Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Fundamental Global Real Estate Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Target 2010 Index Fund |
| Schwab Balanced Fund | Schwab Target 2015 Index Fund |
| Schwab Core Equity Fund | Schwab Target 2020 Index Fund |
| Schwab Dividend Equity Fund | Schwab Target 2025 Index Fund |
| Schwab Large-Cap Growth Fund | Schwab Target 2030 Index Fund |
| Schwab Small-Cap Equity Fund | Schwab Target 2035 Index Fund |
| Schwab Health Care Fund | Schwab Target 2040 Index Fund |
| Schwab International Core Equity Fund | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab Target 2065 Index Fund |
| Schwab Target 2030 Fund | Schwab Monthly Income Fund – Moderate Payout |
| Schwab Target 2035 Fund | Schwab Monthly Income Fund – Enhanced Payout |
| Schwab Target 2040 Fund | Schwab Monthly Income Fund – Maximum Payout |
The fund offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of the fund. Each share has a par value of 1/1,000 of a cent, and the fund’s Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the fund uses in its preparation of financial statements. The fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (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 mutual funds and exchange-traded funds (ETFs), which are 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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Laudus International MarketMasters Fund | Annual Report
Laudus International MarketMasters Fund
Financial Notes (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 and forward foreign currency exchange contracts (forwards): Futures contracts are valued at their settlement prices as of the close of their exchanges. Forwards are valued based on that day’s forward exchange rates or by using an interpolated forward exchange rate for contracts with interim settlement dates.
• Mutual funds: Mutual funds are valued at their respective NAVs.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value the fund’s securities when market prices are not “readily available” or are unreliable. For example, the fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. The fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that the fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the fund pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair value of its investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the fund determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1 — quoted prices in active markets for identical securities— Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, mutual funds and futures contracts. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the 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 securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and
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Laudus International MarketMasters Fund | Annual Report
Laudus International MarketMasters Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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 October 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.
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).
Forward Foreign Currency Exchange Contracts: Forwards are contracts to buy and sell a currency at a set price on a future date. The value of the forwards is accounted for as unrealized appreciation or depreciation until the contracts settle, at which time the gains or losses are realized.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The 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.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
When the fund closes out a futures contract, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends, in the form of cash or non-cash income such as in the form of additional securities, and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the fund records certain foreign security dividends on the date the ex-dividend date 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.
The fund filed claims to recover taxes previously withheld in certain European Union countries on the basis that those countries had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. These filings are subject to various administrative and judicial proceedings within these countries, and all professional fees associated with these filings have been paid by the investment adviser. For additional details see Affiliates and Affiliated Transactions in financial note 4, Other Affiliated Transactions.
(e) Expenses:
Expenses that are specific to the fund are charged directly to the fund. Expenses that are common to more than one fund in the trusts generally are allocated among those funds in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The fund makes distributions from net investment income and net realized capital gains, if any, once a year.
(g) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The 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 October 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.
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Financial Notes (continued)
| 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.
Investment Style Risk. The investment adviser may attempt to reduce the impact of the performance of any given investment style by allocating to investment managers who invest in both value and growth style stocks. But whenever value stocks fall out of favor with investors, they may underperform growth stocks, and vice versa.
Multi-Manager Risk. Although the investment adviser monitors and coordinates the overall management of the fund, each investment manager makes investment decisions independently, and it is possible that the investment styles of the investment managers may not complement one another. As a result, the fund’s exposure to a given stock, industry or investment style could unintentionally be smaller or larger than if the fund had a single manager.
Management Risk. As an actively managed mutual fund, the fund is subject to the risk that its investment adviser and investment managers will select investments or allocate assets in a manner that could cause the fund to underperform or otherwise not meet its investment objective. Poor stock selection or a focus on securities in a particular sector may cause the fund to underperform its benchmark or other funds with a similar investment objective.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, the fund’s performance could be impacted.
Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.
Mid-Cap Company Risk. Mid-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies and the value of securities issued by these companies may move sharply.
Small-Cap Company Risk. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.
Foreign Investment Risk. 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 or, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency hedged, resulting in the dollar value of the fund’s investment being adversely affected. 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 recordkeeping 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.
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Financial Notes (continued)
3. Risk Factors (continued):
Currency Risk. As a result of the fund’s investments in securities denominated in, and/or receiving revenues in, foreign currencies, the fund will be subject to currency risk. This is the risk that those currencies will decline in value relative to the U.S. dollar. If such an event occurs, the dollar value of an investment in the fund would be adversely affected.
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. A credit default swap is an agreement in which the seller agrees to make a payment to the buyer in the event of a specified credit event in exchange for a fixed payment or series of fixed payments.
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, market risk and management risk, are discussed elsewhere in this section. The fund’s use of derivatives is also subject to credit risk, leverage risk, lack of availability risk, valuation risk, correlation risk and tax risk. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately large impact on the fund. 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 its volatility, and could cause the fund to lose more than the initial amount invested. The use of derivatives, that are subject to regulation by the Commodity Futures Trading Commission (CFTC), could cause the fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.
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.
Please refer to the fund’s prospectus for a more complete description of the principal risks of investing in the fund.
4. Affiliates and Affiliated Transactions:
Investment Adviser
Charles Schwab Investment Management, Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as the fund’s investment adviser and administrator pursuant to an investment advisory and administration agreement between the investment adviser and the trust.
For its advisory and administrative services to the fund, the investment adviser is entitled to receive a graduated annual fee, payable monthly, based on a percentage of the fund’s average daily net assets as follows:
| % OF AVERAGE DAILY NET ASSETS | |
| First $500 million | 1.29% |
| $500 million to $1 billion | 1.275% |
| Over $1 billion | 1.25% |
For the period ended October 31, 2021, the aggregate advisory fees paid to the investment adviser by the fund was 1.27% as a percentage of the fund’s average daily net assets.
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the fund. The Plan enables the fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (Schwab), a broker-dealer affiliate of the investment adviser, (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the fund.
Pursuant to the Plan, the fund’s shares are subject to an annual shareholder servicing fee up to 0.20%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the fund (or, in the
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the fund), and the fund will pay no more than 0.20% of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service provider. Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.
Expense Limitation
Although these agreements specify certain fees for these services, the investment adviser and its affiliates have made an additional agreement with the fund, for so long as the investment adviser serves as the investment adviser to the fund, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses to 1.25%.
Investments from Affiliates
Certain funds in the Fund Complex (for definition refer to Trustees and Officers section) may own shares of other funds in the Fund Complex. The table below reflects the percentage of shares of the fund in this report that are owned by other funds in the Fund Complex as of October 31, 2021, as applicable:
| UNDERLYING FUND | |
| Schwab Monthly Income Fund - Enhanced Payout | 0.6% |
| Schwab Monthly Income Fund - Maximum Payout | 0.4% |
| Schwab Monthly Income Fund - Moderate Payout | 0.4% |
| Schwab Target 2010 Fund | 0.3% |
| Schwab Target 2015 Fund | 0.4% |
| Schwab Target 2020 Fund | 2.7% |
| Schwab Target 2025 Fund | 4.4% |
| Schwab Target 2030 Fund | 8.9% |
| Schwab Target 2035 Fund | 5.4% |
| Schwab Target 2040 Fund | 11.6% |
| Schwab Target 2045 Fund | 2.5% |
| Schwab Target 2050 Fund | 2.5% |
| Schwab Target 2055 Fund | 1.7% |
| Schwab Target 2060 Fund | 0.4% |
| Schwab Target 2065 Fund | 0.0%* |
| * | Less than 0.05% |
Other Affiliated Transactions
The professional fees related to foreign withholding tax claims discussed in financial note 2 were non-routine expenses. The investment adviser agreed to pay these professional fees on behalf of the fund, subject to reimbursement to the extent the fund is able to successfully recover taxes withheld in the future.
During the year ended October 31, 2021, the professional fees incurred by the fund were $21,839.
During the year ended October 31, 2021, the fund recovered previously withheld foreign taxes from Finland. The payment received by the fund amounted to $204,791 and is recorded in the fund’s Statement of Operations. The investment adviser had paid upfront professional fees associated with recovering these foreign taxes in the amount of $49,372. This amount has been reimbursed to the investment adviser by the fund.
As of October 31, 2021, the balance of professional fees related to foreign withholding tax subject to future reimbursement by the fund was $149.
No other amounts for additional tax reclaims are reflected in the financial statements due to the uncertainty surrounding the ultimate resolution of proceedings, the likelihood of receipt of these claims, and the potential timing of payment.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
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 the investment adviser 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 did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted on the fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the fund was a participant with other funds in the Fund Complex in a joint, syndicated, committed $850 million line of credit (the Syndicated Credit Facility), which matured on September 30, 2021. On September 30, 2021, the Syndicated Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Syndicated Credit Facility, in addition to the interest charged on any borrowings by the fund, the fund 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, which matured on September 30, 2021. On September 30, 2021, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Uncommitted Credit Facility, the fund pays interest on the amount it 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 disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
7. Purchases and Sales of Investment Securities:
For the period ended October 31, 2021, purchases and sales of securities (excluding short-term obligations) were as follows:
| PURCHASES OF SECURITIES | SALES OF SECURITIES |
| $808,493,003 | $921,696,036 |
8. Derivatives:
The fund entered into equity index futures contracts during the report period. The fund invested in futures contracts to equitize available cash. The value and variation margin for futures contracts held at October 31, 2021 are presented in the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized gains (losses) and net change in unrealized appreciation (depreciation) on futures contracts are presented in the Statement of Operations. 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 October 31, 2021, the month-end average notional amounts of futures contracts held by the fund and the month-end average number of contracts held were $35,122,104 and 324, respectively.
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Financial Notes (continued)
8. Derivatives (continued):
The fund invested in forwards in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange rates and to hedge exposure to certain currencies. Refer to financial note 2(b) for the fund’s accounting policies with respect to forwards and financial note 3 for disclosures concerning the risks of investing in forwards. During the period ended October 31, 2021, the month-end average forward foreign currency notional amount and the month-end average unrealized appreciation were $3,012,728 and $26,004, respectively.
As of October 31, 2021, the derivatives contracts held by the fund, categorized by primary risk exposure, were:
| ASSET DERIVATIVES | FAIR VALUE |
| Equity Index Futures Contracts1 | $— |
| Forward Foreign Currency Exchange Contracts2 | 71,094 |
| LIABILITY DERIVATIVES | FAIR VALUE |
| Equity Index Futures Contracts3 | ($133,434) |
| Forward Foreign Currency Exchange Contracts4 | — |
| 1 | Includes cumulative unrealized appreciation of futures contracts as reported in the Portfolio Holdings. Only current day’s variation margin is reported within the Statement of Assets and Liabilities. |
| 2 | Statement of Assets and Liabilities location: Unrealized appreciation on forward foreign currency exchange contracts. |
| 3 | Includes cumulative unrealized depreciation of futures contracts as reported in the Portfolio Holdings. Only current day’s variation margin is reported within the Statement of Assets and Liabilities. |
| 4 | Statement of Assets and Liabilities location: Unrealized depreciation on forward foreign currency exchange contracts. |
The effects of the derivatives held by the fund in the Statement of Operations for the period ended October 31, 2021 were:
| Equity Index Futures Contracts | |
| Realized gains1 | $13,415,746 |
| Net change in unrealized appreciation (depreciation)2 | 239,299 |
| Forward Foreign Currency Exchange Contracts | |
| Realized losses1 | ($81,115) |
| Net change in unrealized appreciation (depreciation)2 | 134,877 |
| 1 | Statement of Operations location: Net realized gains on futures contracts and net realized losses on forward foreign currency exchange contracts. |
| 2 | Statement of Operations location: Net change in unrealized appreciation (depreciation) on futures contracts and net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts. |
The fund’s forwards are entered into pursuant to International Swaps and Derivatives Association, Inc. (ISDA) agreements which govern certain terms of derivative transactions. ISDA agreements typically contain, among other things, master netting provisions in the event of a default or other termination event. Master netting provisions allow the fund and the counterparty, in the event of a default or other termination event, to offset payable and receivable amounts for each party related to derivative contracts to one net amount payable by either the fund or the counterparty. The fund’s forwards, which are reported gross in the Statement of Assets and Liabilities, are presented in the table below. The following table presents the fund’s forwards, net of amounts available for offset under a master netting agreement and net of any related collateral received by the fund for assets and pledged by the fund for liabilities as of October 31, 2021.
| COUNTERPARTY | GROSS AMOUNTS OF ASSETS PRESENTED IN THE STATEMENT OF ASSETS AND LIABILITIES | FINANCIAL INSTRUMENTS AVAILABLE FOR OFFSET | CASH COLLATERAL PLEDGED | NET AMOUNT(a) | |||
| State Street Bank & Trust Co. | $71,094 | $— | $— | $71,094 | |||
| Total | $71,094 | $— | $— | $71,094 |
| (a) | Represents the net amount due to the counterparty in the event of default. |
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Financial Notes (continued)
| 9. Federal Income Taxes: |
As of October 31, 2021, the tax basis cost of the fund’s investments and gross unrealized appreciation and depreciation were as follows:
| TAX COST | GROSS UNREALIZED APPRECIATION | GROSS UNREALIZED DEPRECIATION | NET UNREALIZED APPRECIATION (DEPRECIATION) |
| $1,092,800,126 | $465,164,035 | ($71,567,385) | $393,596,650 |
As of October 31, 2021, the components of distributable earnings on a tax basis were as follows:
| UNDISTRIBUTED ORDINARY INCOME | UNDISTRIBUTED LONG-TERM CAPITAL GAINS | NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS | NET OTHER UNREALIZED APPRECIATION (DEPRECIATION) | TOTAL |
| $57,001,007 | $157,867,816 | $393,596,650 | ($259,489) | $608,205,984 |
The primary differences between book basis and tax basis unrealized appreciation or unrealized depreciation of investments are the tax deferral of losses on wash sales, realization for tax purposes of unrealized gains (losses) on futures contracts, the realization for tax purposes of unrealized appreciation on investments in Passive Foreign Investment Companies (PFIC) and partnership investments. The tax cost of the funds’ investments, disclosed above, have been adjusted from their book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.
Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2021, the fund had no capital loss carryforwards.
The tax basis components of distributions paid during the current and prior fiscal years were as follows:
| CURRENT FISCAL YEAR END DISTRIBUTIONS | PRIOR FISCAL YEAR END DISTRIBUTIONS | |||
| ORDINARY INCOME | LONG-TERM CAPITAL GAINS | ORDINARY INCOME | LONG-TERM CAPITAL GAINS | |
| $— | $85,551,526 | $25,483,603 | $2,415,950 | |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations.
As of October 31, 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 October 31, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Schwab Capital Trust and Shareholders of Laudus International MarketMasters Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the portfolio holdings, of Laudus International MarketMasters Fund (the “Fund”), one of the funds constituting Schwab Capital Trust, as of October 31, 2021, and the related statement of operations for the year then ended, the related statement of changes in net assets and the financial highlights for the two years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of October 31, 2021, and the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America. The financial highlights for each of the three years in the period ended October 31, 2019 were audited by other auditors, whose report, dated December 16, 2019, expressed an unqualified opinion on such financial highlights.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Denver, Colorado
December 16, 2021
Denver, Colorado
December 16, 2021
We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.
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Other Federal Tax Information (unaudited)
The Laudus International MarketMasters Fund elects to pass through, under section 853 of the Internal Revenue Code, the foreign tax credit of $1,581,113 to its shareholders for the fiscal year ended October 31, 2021. The respective foreign source income on the fund is $21,255,859.
For the fiscal year ended October 31, 2021, the fund designates $457,518 of the dividend distributions as qualified dividends for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS Form 1099 of the amounts for use in preparing their 2021 income tax return.
Under section 852(b)(3)(C) of the Internal Revenue Code, the fund hereby designates $85,551,526 as long-term capital gain dividends for the fiscal year ended October 31, 2021.
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Laudus International MarketMasters Fund
Liquidity Risk Management Program (Unaudited)
The Fund has adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Fund’s Board of Trustees (the “Board”) has designated the Fund’s investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.
Under the program, the investment adviser manages a Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. The program is reasonably designed to assess and manage a Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each Fund’s investments is supported by third-party liquidity assessment vendors.
The Fund’s Board reviewed a report at its meeting held on September 20, 2021 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2020, through May 31, 2021, which included individual Fund liquidity metrics. No significant liquidity events impacting the Fund were noted in the report. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing the Fund’s liquidity risk.
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Investment Advisory and Sub-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 between Schwab Capital Trust (the Trust) and Charles Schwab Investment Management, Inc. (dba Schwab Asset Management) (the investment adviser) with respect to the existing funds in the Trust, including Laudus International MarketMasters Fund (the Fund), and the individual sub-advisory agreements between the investment adviser and American Century Investment Management, Inc., Harris Associates L.P. (Harris), Mellon Investments Corporation, Mondrian Investment Partners Limited (Mondrian) and William Blair Investment Management, LLC, relating to the Fund (each, a Sub-Adviser and collectively, the Sub-Advisers). Such investment advisory and administration agreement and sub-advisory agreements are collectively referred to herein as the Agreements. The Trustees also review certain other agreements pursuant to which the investment adviser 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 the investment adviser and the Sub-Advisers, including information about their 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 the investment adviser and the investment adviser sends an information request letter to each of the Sub-Advisers seeking certain relevant information. The responses by the investment adviser and the Sub-Advisers 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 the investment adviser and meet in executive session outside the presence of Fund management. The Board also discusses with the investment adviser the Fund’s operations and the investment adviser’s ability, consistent with the “manager of managers” structure of the Fund, to (i) identify and recommend to the Trustees sub-advisers for the Fund, (ii) monitor and oversee the performance and investment capabilities of each Sub-Adviser, and (iii) recommend the termination and/or replacement of a Sub-Adviser when appropriate.
The Board, including a majority of the Independent Trustees, considered information relating specifically to the continuance of the Agreements with respect to the Fund at meetings held on May 12, 2021 and June 8, 2021, and approved the renewal of the Agreements 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 Agreements 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 Agreements, including the resources of the investment adviser and its affiliates, and the Sub-Advisers, 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 the investment adviser and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to the Fund, including both direct and indirect benefits accruing to the investment adviser and its affiliates, as well as the profitability of the Sub-Advisers; and |
| 5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreements reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by the investment adviser to the Fund and the resources of the
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investment adviser and its affiliates dedicated to the Fund. In this regard, the Trustees evaluated, among other things, the investment adviser’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 the investment adviser and the Sub-Advisers relating to the 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 the investment adviser has made in its infrastructure, including modernizing the investment adviser’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 the investment adviser’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 Schwab’s wide range of products, services, and channel alternatives such as investment research tools and an array of account features that benefit Funds 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. The Board also considered the nature, extent and quality of the sub-advisory services provided by the Sub-Advisers to the Fund and the resources each dedicates to the Fund. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by the investment adviser and the Sub-Advisers to the Fund and the resources of the investment adviser, its affiliates, and the Sub-Advisers dedicated to the Fund supported renewal of the Agreements with respect to the Fund.
Fund Performance. The Board considered the Fund’s performance in determining whether to renew the Agreements with respect to the Fund. Specifically, the Trustees considered the Fund’s performance relative to a peer category of other mutual funds and applicable benchmark index, in light of total return, portfolio yield (if applicable) 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 addition, the Trustees considered whether irrespective of relative performance, each Sub-Adviser’s
absolute performance was consistent with expectations for such Sub-Adviser’s unique investment methodology. The Trustees further considered the level of Fund performance in the context of their review of Fund expenses and adviser and Sub-Adviser profitability discussed below and also noted that the Board and a designated committee of the Board review performance throughout the year. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Fund supported renewal of the Agreements 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. The investment adviser reported to the Board, and the Board took into account, the risk assumed by the investment adviser in the development of the Fund and provision of services as well as the competitive marketplace for financial products. The Trustees considered the effects of the investment adviser’s and Schwab’s practice of waiving certain fees to prevent total annual operating expenses of the Fund from exceeding a specified cap. The Trustees also considered the investment adviser’s contractual commitment to keep the Fund’s expense cap for so long as the investment adviser serves as the adviser to the Fund. The Trustees also considered fees charged by the investment adviser and the Sub-Advisers to 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 the investment adviser 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 the investment adviser 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 the investment adviser 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 the investment adviser from its relationship with the Fund, such as whether, by virtue of its management of the Fund, the investment adviser obtains investment information or other research resources that aid it in providing advisory services to other
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clients. The Trustees considered whether the compensation and profitability with respect to the Fund under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Fund by the investment adviser and its affiliates. The Trustees noted that the investment adviser continues to invest substantial sums in its business in order to provide enhanced research capabilities, services and systems to benefit the Fund.
In addition, the Trustees also considered the compensation received by each Sub-Adviser, directly or indirectly. The Trustees also considered any other benefits derived by each Sub-Adviser from its relationship with the Fund, such as whether, by virtue of its management of the Fund, such Sub-Adviser obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to each Sub-Adviser, the Trustees considered whether the compensation and profitability under the applicable Agreement were reasonable and justified in light of the quality of all services rendered to the Fund by such Sub-Adviser, and its affiliates. The Board also considered the profitability of each Sub-Adviser with respect to the sub-advisory services it provides to the Fund, although, when doing so, the Board took into account the fact that the Sub-Advisers are compensated by the investment adviser, and not by the Fund directly, and such compensation with respect to any Sub-Adviser reflects an arms-length negotiation between the Sub-Adviser and the investment adviser. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of the investment adviser and the Sub-Advisers is reasonable and supported renewal of the Agreements 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 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 the investment adviser in the investment adviser’s infrastructure, including modernizing the investment
adviser’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 the investment adviser 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, the investment adviser has shared any economies of scale with the Fund by investing in the investment adviser’s infrastructure, as discussed above, over time and that the investment adviser’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. The Trustees considered that the investment adviser and its affiliates may employ contractual expense caps to protect shareholders from high fees when fund assets are relatively small, for example, in the case of newer funds or funds with investment strategies that are from time to time out of favor, because, among other reasons, shareholders may benefit from the continued availability of such funds at subsidized expense levels. 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 Agreements with respect to the Fund and concluded that the compensation under the Agreements with respect to the Fund is fair and reasonable in light of the services provided and the related expenses borne by the investment adviser 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 103 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the fund’s Statement of Additional Information, which is available free by calling 1-877-824-5615.
| Independent Trustees | |||
| Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
| Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 103 | 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. | 103 | 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). | 103 | 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. | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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 and Chief Executive Officer (Oct. 2008 – present) and President (Oct. 2008 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), 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 – Oct. 2021), Charles Schwab Investment Management, Inc. | 103 | 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. | 103 | 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 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.; 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 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.; 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 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.; 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 |
| 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., the investment adviser for the trusts in the Fund Complex, and is an employee 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. 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.
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.
Bloomberg US Treasury Bills 1–3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $300 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
restricted and illiquid securities Restricted securities are securities that are subject to legal restrictions on their sale. Restricted securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933 (the 1933 Act), or in a registered public offering. Certain restricted securities, such as Section 4(a)(2) commercial paper and Rule 144A securities under the 1933 Act, may be considered to be liquid if they meet the criteria for liquidity established by the Board. Illiquid securities generally are any securities that cannot be disposed of promptly and in the ordinary course of business at approximately the amount at which a fund has valued the instruments. The liquidity of a fund’s investments is monitored under the supervision and direction of the Board. Investments currently not considered liquid include repurchase agreements not maturing within seven days and certain restricted securities.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
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.
42
Laudus International MarketMasters Fund | Annual Report
Laudus International MarketMasters Fund
Laudus Funds®
Laudus Funds offer investors access to some of the world’s leading investment managers. With a rigorous manager selection process and ongoing oversight by Schwab Asset Management, Laudus Funds offer single and multi-manager strategies as a complement to other funds managed by Schwab Asset Management. The list below shows all currently available Laudus Funds.
An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus or, if available, the summary prospectus. Please call 1-877-824-5615 for a prospectus for any Laudus Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Laudus Funds’ website at www.schwabassetmanagement.com/laudusfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Laudus Funds at 1-877-824-5615.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.schwabassetmanagement.com/laudusfunds_prospectus or the SEC’s website at www.sec.gov.
Laudus Funds®
Laudus® U.S. Large Cap Growth Fund
Laudus International MarketMasters Fund™
Investment Adviser
Charles Schwab Investment Management, Inc., dba Schwab Asset Management
211 Main Street, San Francisco, CA 94105
Fund
Laudus International MarketMasters Fund
1-877-824-5615
Printed on recycled paper.
Annual Report | October 31, 2021
Schwab Active 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
This page is intentionally left blank.
Schwab Active Equity Funds
In This Report
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset ManagementTM
Distributor: Charles Schwab & Co., Inc. (Schwab)
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of MSCI Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Schwab. The Industry classifications used in the Portfolio Holdings are sub-categories of Sector classifications.
1
Schwab Active Equity Funds | Annual Report
Schwab Active Equity Funds
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
| Total Return for the 12 Months Ended October 31, 2021 | |
| Schwab Core Equity Fund (Ticker Symbol: SWANX) | 37.62% |
| S&P 500® Index | 42.91% |
| Fund Category: Morningstar Large Blend1 | 41.27% |
| Performance Details | pages 8-10 |
| Schwab Dividend Equity Fund2 (Ticker Symbol: SWDSX) | 42.38% |
| Russell 1000® Value Index | 43.76% |
| Fund Category: Morningstar Large Value1 | 43.70% |
| Performance Details | pages 11-13 |
| Schwab Large-Cap Growth Fund (Ticker Symbol: SWLSX) | 40.41% |
| Russell 1000® Growth Index | 43.21% |
| Fund Category: Morningstar Large Growth1 | 39.55% |
| Performance Details | pages 14-16 |
| Schwab Small-Cap Equity Fund (Ticker Symbol: SWSCX) | 58.55% |
| Russell 2000® Index | 50.80% |
| Fund Category: Morningstar Small Blend1 | 54.25% |
| Performance Details | pages 17-19 |
| Schwab Health Care Fund2 (Ticker Symbol: SWHFX) | 30.02% |
| Dow Jones Global Health Care Index | 27.34% |
| Fund Category: Morningstar Health1 | 25.98% |
| Performance Details | pages 20-22 |
| Schwab International Core Equity Fund2 (Ticker Symbol: SICNX) | 28.12% |
| MSCI EAFE® Index (Net)3 | 34.18% |
| Fund Category: Morningstar Foreign Large Blend1 | 31.56% |
| Performance Details | pages 23-25 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
| 1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 2 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations. See financial note 2 for more information. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
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Schwab Active Equity Funds | Annual Report
Schwab Active Equity Funds
From the President
Jonathan de St. Paer
President of Schwab Asset
Management and the funds
covered in this report.
President of Schwab Asset
Management and the funds
covered in this report.
Dear Shareholder,
During the 12-month reporting period ended October 31, 2021, global equity markets generally gained ground as economies began to recover from COVID-19 pandemic lockdowns and corporations generally posted stronger-than-expected profits. The S&P 500® Index, a bellwether for the overall U.S. stock market, rose 42.9%, reaching record territory as the period ended, while the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.2%. A far more complex story lay beneath those broad gains. Skyrocketing oil and gas prices propelled the energy sector ahead of other sectors, while the financials sector sharply outperformed on rising interest rates. Other cyclically sensitive sectors, such as the information technology and real estate sectors, also outperformed, while more traditionally defensive sectors, such as the utilities and consumer staples sectors, trailed by comparison.
While there are always winners and losers among various markets, sectors, and individual stocks, today’s top performers are rarely the same as yesterday’s or tomorrow’s. At Schwab Asset Management, we believe the best defense against a shifting investment landscape is a portfolio that’s diversified across a wide variety of asset classes and geographic regions. One way to do this is through actively managed strategies, such as the Schwab Active Equity Funds, which take on the job of sifting through the latest market developments and researching company fundamentals, identifying trends that could impact valuations, and factoring that analysis into investment decisions. The funds seek to deliver consistent, risk-adjusted returns over the long-term through a disciplined investment process that uses both quantitative and fundamental research.
Thank you for investing with Schwab Asset Management, and for trusting us to help you achieve your financial goals. For more information about the Schwab Active Equity Funds, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.schwabassetmanagement.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
“ The funds seek to deliver consistent, risk-adjusted returns over the long-term through a disciplined investment process that uses both quantitative and fundamental research.”
Past performance is no guarantee of future results.
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Management views may have changed since the report date.
Schwab Asset Management is the dba name for Charles Schwab Investment Management, Inc., the investment adviser for Schwab Funds, Laudus Funds, and Schwab ETFs.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
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Schwab Active Equity Funds | Annual Report
Schwab Active Equity Funds
The Investment Environment
For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 42.91% with cyclically sensitive sectors, such as the energy, financials, information technology, and real estate sectors, outperforming traditionally defensive sectors, such as the utilities and consumer staples sectors. U.S. small-cap stocks outperformed U.S. large-cap stocks, with the Russell 2000® Index and the Russell 1000® Index returning 50.80% and 43.51%, respectively. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. Among international markets, the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.18% for the reporting period.
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. U.S. gross domestic product (GDP) rose at an annualized rate of 4.3% for the fourth quarter of 2020, 6.4% for the first quarter of 2021, and 6.7% for the second quarter of 2021 before falling back to 2.0% for the third quarter of 2021 amid fading government stimuli, persistent inflation, and a new surge in COVID-19 cases. Unemployment, which skyrocketed in April 2020, fell over the reporting period. Inflation, which had remained well below the Fed’s traditional 2% target until it jumped in March 2021, continued to rise through June 2021 and remained elevated through October 2021, largely due to 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.
Asset Class Performance Comparison % returns during the 12 months ended October 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 an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and Schwab Asset Management.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views may have changed since the report date.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
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Schwab Active Equity Funds | Annual Report
Schwab Active Equity Funds
The Investment Environment (continued)
Outside the United States, global economies also displayed resilience but were somewhat more constrained amid continuing struggles against COVID-19 and the emergence and spread of the Delta variant. Oil prices rose through most of the reporting period, except for a dip in July and August, on growing demand and reduced production. In the eurozone, GDP growth jumped in the third quarter of 2020, regaining much of its losses from the second quarter, but turned slightly negative for both the fourth quarter of 2020 and the first quarter of 2021. GDP growth turned positive for the second and third quarters of 2021. The United Kingdom, which was particularly hard-hit by the COVID-19 pandemic, suffered its biggest slump in more than three centuries over the course of 2020, effectively wiping out its growth over the past seven years, but posted a small positive gain in GDP for the first quarter of 2021. The United Kingdom removed many of the country’s stringent restrictions during the summer and posted a strong gain in GDP growth for the second quarter of 2021. Japan’s economy, after rebounding sharply in the third quarter of 2020, posted a positive, albeit smaller, gain in the fourth quarter of 2020. Japan’s economy subsequently contracted in the first quarter of 2021 on a resurgence of COVID-19 cases and slow COVID-19 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, maintained positive GDP growth in the fourth quarter of 2020. China’s GDP growth accelerated sharply for the first quarter of 2021 before easing for the subsequent two quarters in part because of the political landscape and an emphasis on domestic consumption over globalization. India, after plunging into one of the worst recessions of any major economy, saw its first positive gain in GDP in the fourth quarter of 2020 and posted a sharp jump in GDP growth for the second quarter of 2021.
For the most part, central banks around the world, including the Fed, 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 United States, 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 needed to achieve a full recovery. The Fed maintained the federal funds rate in a range of 0.00% to 0.25% throughout the reporting period. However, as inflation continued to rise for most of 2021, the Fed tightened its stance, signaling that—due to significant progress made on its twin goals of maximum employment and price stability—it could start to reduce its bond-buying program as soon as late 2021 and could begin to raise interest rates in the next 18 months. In developed international markets, most central banks were similarly accommodative while acknowledging that conditions were changing. The European Central Bank held interest rates at 0.00%, unchanged since March 2016, but reduced the pace of its asset purchase program instituted 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—despite citing moderately improving conditions—vowed to continue to maintain stability in its financial markets through its ongoing programs. The Bank of England maintained its key official bank rate at 0.1% and continued to support its bond-buying program.
5
Schwab Active Equity Funds | Annual Report
Schwab Active Equity Funds
Fund Management
 | Bill McMahon, CFA, Managing Director and Chief Investment Officer of Active Equity Strategies for Schwab Asset Management, is responsible for the day-to-day co-management of the Schwab Large-Cap Growth Fund, Schwab Core Equity Fund, and Schwab Dividend Equity Fund. Mr. McMahon has more than 20 years of experience in the financial services industry. Prior to his current role, Mr. McMahon was an SVP in Charles Schwab Investment Advisory, Inc. (CSIA), serving as CIO and as a member of the portfolio management team for the ThomasPartners Strategies. Mr. McMahon co-founded ThomasPartners, Inc. in 2001 and served as partner of the firm until its acquisition by the Charles Schwab Corporation in 2012 and subsequent merger with CSIA in 2018. Mr. McMahon began his career at State Street Corporation, with the latter half of his tenure with State Street Global Advisors. |
 | Iain Clayton, CFA, FRM, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Core Equity Fund, Schwab International Core Equity Fund, and Schwab Health Care Fund. Prior to joining Schwab in 2013, Mr. Clayton spent more than five years at SSI Investment Management where he was a portfolio manager and the director of quantitative research. In these roles, Mr. Clayton co-managed multiple investment strategies and developed quantitative models and valuation approaches. From 2004 to 2008, he worked as a portfolio manager and director at RCM Capital Management (now known as Allianz Global Investors) and helped manage various equity portfolios and developed fundamental-based stock selection models. Prior to that, he was a vice president at Eureka Investment Advisors for almost three years and also served as a senior quantitative analyst and assistant portfolio manager. He has also worked as a quantitative research analyst at RCM Capital Management. |
 | Holly Emerson, CFA, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Large-Cap Growth Fund. Prior to joining Schwab in 2014, Ms. Emerson spent nearly 10 years at Algert Coldiron Investors LLC (now known as Algert Global), a quantitative market-neutral hedge fund manager. She held a number of positions at Algert, including assistant portfolio manager and director of operations. In her various roles, she acted as the lead portfolio manager for the Canadian fund, conducted macroeconomic research, and managed relationships with prime brokerage investment banks. |
 | Brian Hillburn, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Core Equity Fund. Mr. Hillburn also provides fundamental equity research coverage for the ThomasPartners Strategies and the Schwab Active Equity Funds. Previously, Mr. Hillburn was a director and senior equity research analyst for the ThomasPartners Strategies at Schwab Asset Management. Prior to joining the ThomasPartners Strategies, Mr. Hillburn was an equity analyst at Rockland Trust, and earlier positions include equity research analysis roles on mutual fund teams at Wells Capital and Morgan Stanley Investment Management. |
 | Wei Li, Ph.D., CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab International Core Equity Fund, Schwab Dividend Equity Fund, Schwab Small-Cap Equity Fund, and Schwab Health Care Fund. Prior to joining Schwab in 2012, Ms. Li spent more than 10 years at Barclays Global Investors (now known as BlackRock), where she held a number of positions. From 2001 to 2009, she worked in various roles in the global advanced active group, including portfolio management and quantitative research for both U.S. and international equity markets. After 2009, she worked in the defined contribution research and product development area for almost two years. |
 | Gretchen Novak, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Large-Cap Growth Fund. Ms. Novak also provides fundamental equity research coverage of certain industry sectors for the ThomasPartners Strategies and the Schwab Active Equity Funds. Previously, Ms. Novak was a director and senior equity research analyst for the ThomasPartners Strategies at Schwab Asset Management. Prior to joining the ThomasPartners Strategies, Ms. Novak was a senior portfolio manager at Mazama Capital Management, Inc., where she oversaw the equity research and portfolio management of the firm’s consumer discretionary and staples sectors. Prior to Mazama Capital, Ms. Novak was an equity analyst at Cramer Rosenthal McGlynn, LLC. |
6
Schwab Active Equity Funds | Annual Report
Schwab Active Equity Funds
Fund Management (continued)
 | Jim Serhant, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Dividend Equity Fund and the ThomasPartners Balanced Strategies. Mr. Serhant also provides fundamental equity research coverage of certain industry sectors for the ThomasPartners Strategies and the Schwab Active Equity Funds. Prior to joining Schwab in 2016, Mr. Serhant was an executive vice president at Hartford Investment Management where he was the head of high yield and a senior portfolio manager, overseeing the credit research and portfolio management of the firm’s high yield strategies. Previously, he was a fixed income analyst at Delaware Investments and JP Morgan. |
7
Schwab Active Equity Funds | Annual Report
Schwab Core Equity Fund as of October 31, 2021
The Schwab Core Equity Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund invests primarily in U.S. stocks. Under normal circumstances, the fund pursues its goal by investing at least 80% of its net assets (including, for this purpose, any borrowings for investment purposes) in equity securities of U.S. companies. The fund typically invests in common stocks of U.S. companies that have market capitalizations of approximately $500 million or more at the time of purchase. To aid its stock selection, the fund uses Schwab Equity Ratings® and employs a research-driven, “bottom-up” approach focusing primarily on individual securities. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs.
Performance. The fund returned 37.62% for the 12-month reporting period ended October 31, 2021, underperforming the S&P 500® Index (the index), which the fund uses for performance comparisons. The index returned 42.91% for the reporting period.
Positioning and Strategies. The fund’s underweight investment in Tesla, Inc., which designs, manufactures, and sells high-performance electric vehicles and electric vehicle powertrain components, weighed on the fund’s relative performance. The fund held shares of Tesla between January 2021 and August 2021, which returned approximately -3% during that period. Tesla benefitted from strong sales growth on electric vehicle sales, particularly in China, improving financial performance, and flows into ESG funds, as well as an upgrade that praised the internet of cars market and a possible Hertz deal.
NVIDIA Corp., which designs, develops, and markets 3D graphics processors and related software, was another detractor from the fund’s relative performance over the reporting period. The fund’s underweight investment in NVIDIA returned approximately 7% for the reporting period. NVIDIA rose on strong chip sales, strong pricing due to shortages, demand from the gaming and crypto mining industries, and rebound in economic growth. The fund sold its position in NVIDIA in January 2021.
The fund’s performance relative to the index was enhanced by the fund’s Class A holdings of Alphabet, Inc., which, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products. The fund’s overweight investment in Alphabet returned approximately 83% for the reporting period. Alphabet benefited from strong advertising revenues across multiple business.
The fund’s overweight position in financial holding company Bank of America Corp. was another contributor to the fund’s relative performance as a result of financials sector stocks, particularly banks, recovering in 2021, on higher interest rates spreads, U.S. Federal Reserve policies, credit reserve releases, strong capital markets, and client merger and acquisition activity. The fund’s holdings of Bank of America returned approximately 106% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
8
Schwab Active Equity Funds | Annual Report
Schwab Core Equity Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1,2
Average Annual Total Returns1,2
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Core Equity Fund (7/1/96) | 37.62% | 15.86% | 14.01% |
| S&P 500® Index | 42.91% | 18.93% | 16.21% |
| Fund Category: Morningstar Large Blend3 | 41.27% | 17.14% | 14.63% |
| Fund Expense Ratio4: 0.73% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On September 7, 2012, the Schwab Premier Equity Fund merged into the fund. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. Reflects the total annual fund operating expenses without contractual fee waivers. For actual expense ratios during the period, refer to the financial highlights section of the financial statements. |
9
Schwab Active Equity Funds | Annual Report
Schwab Core Equity Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 69 |
| Weighted Average Market Cap (millions) | $679,829 |
| Price/Earnings Ratio (P/E) | 20.4 |
| Price/Book Ratio (P/B) | 4.3 |
| Portfolio Turnover Rate | 86% |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
10
Schwab Active Equity Funds | Annual Report
Schwab Dividend Equity Fund as of October 31, 2021
The Schwab Dividend Equity Fund (the fund) seeks current income and capital appreciation. Under normal circumstances, the fund invests at least 80% of its net assets (including, for this purpose, any borrowings for investment purposes) in dividend paying common and preferred stocks. The fund uses Schwab Equity Ratings® to aid its U.S. stock selection and Schwab Equity Ratings International® to aid its international stock selection and employs a research-driven, “bottom-up” approach focusing primarily on individual securities. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. Over the reporting period, value stocks slightly outperformed growth stocks, leading to similar performance between dividend-paying stocks and the broader stock market.
Performance. The fund returned 42.38% for the 12-month reporting period ended October 31, 2021, underperforming the Russell 1000® Value Index (the index), which the fund uses for performance comparisons. The index returned 43.76% for the reporting period.
As of October 31, 2021, the fund’s dividend yield was 1.73%, lower than the 2.16% dividend yield of the index. As of October 31, 2021, the fund’s 30-Day SEC yield was 1.73%.
Positioning and Strategies. The fund’s overweight position in Verizon Communications, Inc., a telecommunications company that provides wireless and wireline voice and data services, weighed on relative performance. The fund’s holdings of Verizon returned approximately -3% for the reporting period. Verizon shares declined as the company increased debt issuance to fund higher wireless spectrum acquisition costs and higher capital investment to upgrade its network to 5G.
Lockheed Martin Corp., a global security company that primarily researches, designs, develops, manufactures, and integrates advanced technology products and services, was another detractor from the fund’s relative performance over the reporting period. The fund’s overweight investment in Lockheed Martin returned approximately -2% for the reporting period. Deceleration in its end-market growth rate, supply chain challenges, and company-specific programmatic headwinds impacted Lockheed Martin’s performance.
The fund’s performance relative to the index was enhanced by the fund’s holdings of Morgan Stanley, a bank holding company. The fund’s investment in Morgan Stanley returned approximately 118% for the reporting period, making it the largest contributor to excess return versus the benchmark. Morgan Stanley posted strong earnings per share (EPS) growth and benefitted from a strong capital position that allowed the company to buy back shares and reduce its outstanding share count.
The fund’s position in Navient Corp., which focuses on education loan portfolio management, servicing and asset recovery, was another contributor to the fund’s relative performance as a result of strong EPS growth, share buybacks, and debt reduction were also drivers of the stock during the period. The fund’s holdings of Navient returned approximately 182% for the reporting period. Navient was a non-index stock. The fund’s position in Navient was sold prior to the end of the reporting period.
Management views and portfolio holdings may have changed since the report date.
11
Schwab Active Equity Funds | Annual Report
Schwab Dividend Equity Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1,2
Average Annual Total Returns1,2
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Dividend Equity Fund (9/2/03) | 42.38% | 10.09% | 10.34% |
| Russell 1000® Value Index | 43.76% | 12.39% | 12.85% |
| Dividend Equity Spliced Index | 43.76% | 12.39% | 12.85% |
| S&P 500® Index | 42.91% | 18.93% | 16.21% |
| Fund Category: Morningstar Large Value3 | 43.70% | 12.59% | 12.14% |
| Fund Expense Ratios4: Net 0.89%; Gross 0.90% | |||
Yields1
| 30-Day SEC Yield | 1.73% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. 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.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | The fund’s performance relative to the index may be affected by fair-value pricing. See financial note 2 for more information. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, refer to the financial highlights section of the financial statements. |
12
Schwab Active Equity Funds | Annual Report
Schwab Dividend Equity Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 93 |
| Weighted Average Market Cap (millions) | $280,071 |
| Price/Earnings Ratio (P/E) | 16.6 |
| Price/Book Ratio (P/B) | 3.0 |
| Portfolio Turnover Rate | 83% |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
13
Schwab Active Equity Funds | Annual Report
Schwab Large-Cap Growth Fund as of October 31, 2021
The Schwab Large-Cap Growth Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund invests primarily in U.S. common stocks. Under normal circumstances, the fund invests at least 80% of its net assets (including, for this purpose, any borrowings for investment purposes) in large-cap stocks of U.S. companies. To aid its stock selection, the fund uses Schwab Equity Ratings® and employs a research-driven, “bottom-up” approach focusing primarily on individual securities. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks, and among U.S. large-caps, value stocks slightly outperformed growth stocks.
Performance. The fund returned 40.41% for the 12-month reporting period ended October 31, 2021, underperforming the Russell 1000® Growth Index (the index), which the fund uses for performance comparisons. The index returned 43.21% for the reporting period.
Positioning and Strategies. The fund’s underweight position in Tesla, Inc., which designs, manufactures, and sells high-performance electric vehicles and electric vehicle powertrain components, weighed on relative performance. The fund’s holdings of Tesla returned approximately 187% for the reporting period. Tesla benefitted from strong sales growth on electric vehicle sales, particularly in China, improving financial performance, and flows into ESG funds, as well as an upgrade that praised the internet of cars market and a possible Hertz deal.
Moderna, Inc., a clinical stage biotechnology company, was a detractor from the fund’s relative performance. Moderna returned approximately 412% for the index during the reporting period, surging on vaccine prospects. The fund did not hold Moderna during the reporting period.
Zoom Video Communications, Inc., a cloud service that provides a 3-in-1 meeting platform with video conferencing, mobility, and web meetings, contributed to the fund’s relative performance. Class A shares of Zoom retuned approximately -40% for the index during the reporting period. Zoom benefitted when the COVID-19 pandemic began but reversed as effective vaccines were deployed. The fund did not hold Zoom during the reporting period.
Salesforce.com, Inc., which designs and develops enterprise software, was another contributor to the fund’s relative performance as a result of prioritizing technology spending on digital transformation. The fund’s underweight investment in Salesforce returned approximately 28% for the reporting period. The fund added to its position in Salesforce as it raised its guidance.
Management views and portfolio holdings may have changed since the report date.
14
Schwab Active Equity Funds | Annual Report
Schwab Large-Cap Growth Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Large-Cap Growth Fund (10/3/05) | 40.41% | 20.71% | 16.56% |
| Russell 1000® Growth Index | 43.21% | 25.49% | 19.42% |
| Fund Category: Morningstar Large Growth2 | 39.55% | 22.95% | 17.43% |
| Fund Expense Ratios3: Net 0.99%; Gross 1.02% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, refer to the financial highlights section of the financial statements. |
15
Schwab Active Equity Funds | Annual Report
Schwab Large-Cap Growth Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 72 |
| Weighted Average Market Cap (millions) | $996,922 |
| Price/Earnings Ratio (P/E) | 32.3 |
| Price/Book Ratio (P/B) | 10.4 |
| Portfolio Turnover Rate | 42% |
Sector Weightings % of Investments2
Top Equity Holdings % of Net Assets3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | Excludes derivatives. |
| 2 | 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. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
16
Schwab Active Equity Funds | Annual Report
Schwab Small-Cap Equity Fund as of October 31, 2021
The Schwab Small-Cap Equity Fund (the fund) seeks long-term capital growth. Under normal circumstances, the fund invests at least 80% of its net assets (including, for this purpose, any borrowings for investment purposes) in small-cap equity securities. To aid its stock selection, the fund uses Schwab Equity Ratings®. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks.
Performance. The fund returned 58.55% for the 12-month reporting period ended October 31, 2021, outperforming the Russell 2000® Index (the index), which the fund uses for performance comparisons. The index returned 50.80% for the reporting period.
Positioning and Strategies. The fund’s performance relative to the index was enhanced by the fund’s holdings of Cimarex Energy Co., which explores and produces crude oil and natural gas. The fund’s holdings of Cimarex Energy returned approximately 250% for the reporting period. Strong cash flow and controlled capital expenditure helped the performance of Cimarex in a rising oil price environment. Cimarex Energy was a non-index stock. Cimarex Energy Co. and Cabot Oil & Gas Corp. merged in October 2021 to form Coterra Energy, Inc.
The fund’s overweight position in Atkore, Inc., a manufacturer and supplier of metal products and electrical raceway solutions, was another contributor to the fund’s relative performance. Atkore gained pricing power as its competitors were hampered by supply chain disruptions due to the COVID-19 pandemic. The fund’s holdings of Atkore returned approximately 357% for the reporting period.
The fund’s position in Quidel Corp., which discovers, develops, manufactures, and markets diagnostic healthcare products and solutions, weighed on relative performance. The fund’s holdings of Quidel returned approximately -51% for the reporting period. As the COVID-19 vaccination rate picked up and cases subsided, Quidel, which is highly levered to COVID-19 test volume, disappointed in earnings. Quidel was a non-index stock.
Emergent BioSolutions, Inc., a global specialty biopharmaceutical company, was another detractor from the fund’s relative performance over the reporting period. The fund’s overweight investment in Emergent BioSolutions returned approximately -47% for the reporting period. Emergent BioSolutions halted production of the J&J COVID-19 vaccine due to manufacturing issues and continued to decrease revenue guidance.
Management views and portfolio holdings may have changed since the report date.
17
Schwab Active Equity Funds | Annual Report
Schwab Small-Cap Equity Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Small-Cap Equity Fund (7/1/03) | 58.55% | 12.79% | 13.07% |
| Russell 2000® Index | 50.80% | 15.52% | 13.50% |
| Fund Category: Morningstar Small Blend2 | 54.25% | 13.77% | 12.64% |
| Fund Expense Ratio3: 1.10% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Reflects the total annual fund operating expenses without contractual fee waivers. For actual expense ratios during the period, refer to the financial highlights section of the financial statements. |
18
Schwab Active Equity Funds | Annual Report
Schwab Small-Cap Equity Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 348 |
| Weighted Average Market Cap (millions) | $3,702 |
| Price/Earnings Ratio (P/E) | 13.8 |
| Price/Book Ratio (P/B) | 2.4 |
| Portfolio Turnover Rate | 84% |
Sector Weightings % of Investments2
Top Equity Holdings % of Net Assets3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than many other asset classes.
| 1 | Excludes derivatives. |
| 2 | 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. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
19
Schwab Active Equity Funds | Annual Report
Schwab Health Care Fund as of October 31, 2021
The Schwab Health Care Fund (the fund) seeks long-term capital growth. To pursue its goal, the fund primarily invests in equity securities issued by companies in the health care sector. The fund uses Schwab Equity Ratings® to aid its U.S. stock selection and Schwab Equity Ratings International® to aid its international stock selection. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. U.S. health care stocks performed well over the reporting period, though lagged broader global stock markets. Health care stocks underperformed the S&P 500® Index and MSCI EAFE® Index.
Performance. The fund returned 30.02% for the 12-month reporting period ended October 31, 2021, outperforming the Dow Jones Global Health Care Index (the index), which the fund uses for performance comparisons. The index returned 27.34% for the reporting period.
Positioning and Strategies. The fund’s performance relative to the index was enhanced by the fund’s holdings of Eli Lilly and Co., which discovers, develops, manufactures, and sells pharmaceutical products for humans and animals. The fund’s overweight investment in Eli Lilly returned approximately 99% for the reporting period. Eli Lilly performed well on positive clinical data for an Alzheimer’s disease drug.
The fund’s overweight position in Getinge AB, a provider of hospitals and life science institutions with products and solutions that aim to improve clinical results and optimize workflows, was another contributor to the fund’s relative performance as a result of strength of sales as well as margin improvement from operating leverage. The fund’s Class B holdings of Getinge returned approximately 131% for the reporting period.
The fund’s position in Amedisys, Inc., a multi-regional provider of alternate-site health care services, weighed on relative performance. The fund’s overweight investment in Amedisys returned approximately -35% for the reporting period. Underperformance of hospice businesses drove Amedisys’ underperformance.
Bristol-Myers Squibb Co., which develops, licenses, manufactures, markets, and sells pharmaceutical and nutritional products, was another detractor from the fund’s relative performance over the reporting period. The fund’s overweight investment in Bristol-Myers Squibb returned approximately 3% for the reporting period. Bristol-Myers Squibb underperformed as a result of concerns about generic competition in the future as well as a lack of new data on late-stage and new products.
Management views and portfolio holdings may have changed since the report date.
20
Schwab Active Equity Funds | Annual Report
Schwab Health Care Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1,2
Average Annual Total Returns1,2
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Health Care Fund (7/3/00) | 30.02% | 14.93% | 15.40% |
| Dow Jones Global Health Care Index | 27.34% | 15.41% | 14.76% |
| S&P 500® Index | 42.91% | 18.93% | 16.21% |
| Fund Category: Morningstar Health3 | 25.98% | 16.70% | 16.54% |
| Fund Expense Ratio4: 0.80% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. 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.
Since the Schwab Health Care Fund focuses its investments on companies involved in a specific sector, this fund may involve a greater degree of risk than an investment in mutual funds that do not concentrate their investments.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | The fund’s performance relative to the index may be affected by fair-value pricing. See financial note 2 for more information. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. Reflects the total annual fund operating expenses without contractual fee waivers. For actual expense ratios during the period, refer to the financial highlights section of the financial statements. |
21
Schwab Active Equity Funds | Annual Report
Schwab Health Care Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 97 |
| Weighted Average Market Cap (millions) | $162,567 |
| Price/Earnings Ratio (P/E) | 24.8 |
| Price/Book Ratio (P/B) | 5.7 |
| Portfolio Turnover Rate | 70% |
Industry Weightings % of Investments
Top Equity Holdings % of Net Assets1
Portfolio holdings may have changed since the report date.
Source of Industry Classification: S&P and MSCI.
| 1 | This list is not a recommendation of any security by the investment adviser. |
22
Schwab Active Equity Funds | Annual Report
Schwab International Core Equity Fund as of October 31, 2021
The Schwab International Core Equity Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund invests primarily in the stocks of publicly traded companies located in developed market countries excluding the United States, however, the fund may also invest in stocks issued by companies located in emerging markets. To aid its stock selection, the fund uses Schwab Equity Ratings International®. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way.
Performance. The fund returned 28.12% for the 12-month reporting period ended October 31, 2021, underperforming the MSCI EAFE® Index (Net) (the index), which the fund uses for performance comparisons. The index returned 34.18% for the reporting period.
Positioning and Strategies. The fund’s overweight position in Nintendo Co., Ltd., which develops, manufactures and sells home-use video game hardware and software in home entertainment business, weighed on the fund’s relative performance. The fund’s holdings of Nintendo returned approximately -17% for the reporting period. Nintendo underperformed as a result of concerns over the trajectory of Switch, a video game console, hardware sales, and chip shortages impacting future game development.
The fund’s underweight position in ASML Holding N.V., which develops, produces, and markets semiconductor manufacturing equipment, specifically machines for the production of chips, was another detractor from relative performance. The fund’s holdings of ASML Holding returned approximately 125% for the reporting period, benefitting from a strong demand for semiconductors that increased demand for semiconductor equipment.
The fund’s performance relative to the index was enhanced by the fund’s holdings of Compagnie de Saint-Gobain S.A., a manufacturer of glass products, high-performance materials, and construction materials. The fund’s overweight investment in Compagnie de Saint-Gobain returned approximately 81% for the reporting period, benefitting from global economic and construction recovery.
Novo Nordisk A/S, which develops, produces, and markets pharmaceutical products, was another contributor to the fund’s relative performance as a result of good trial data on a potential new drug. The fund’s overweight investment in Class B shares of Novo Nordisk A/S returned approximately 74% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
23
Schwab Active Equity Funds | Annual Report
Schwab International Core Equity Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1,2
Average Annual Total Returns1,2
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab International Core Equity Fund (5/30/08) | 28.12% | 7.29% | 7.47% |
| MSCI EAFE® Index (Net)3 | 34.18% | 9.79% | 7.37% |
| Fund Category: Morningstar Foreign Large Blend4 | 31.56% | 9.42% | 7.35% |
| Fund Expense Ratios5: Net 0.86%; Gross 0.88% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | The fund’s performance relative to the index may be affected by fair-value pricing. See financial note 2 for more information. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, refer to the financial highlights section of the financial statements. |
24
Schwab Active Equity Funds | Annual Report
Schwab International Core Equity Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 144 |
| Weighted Average Market Cap (millions) | $89,599 |
| Price/Earnings Ratio (P/E) | 14.0 |
| Price/Book Ratio (P/B) | 1.9 |
| Portfolio Turnover Rate | 103% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets1
Top Country Weightings % of Investments2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | This list is not a recommendation of any security by the investment adviser. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
25
Schwab Active Equity Funds | Annual Report
Schwab Active Equity Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2021 and held through October 31, 2021.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| EXPENSE RATIO (ANNUALIZED) 1 | BEGINNING ACCOUNT VALUE AT 5/1/21 | ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 10/31/21 | EXPENSES PAID DURING PERIOD 5/1/21-10/31/212 | |
| Schwab Core Equity Fund | ||||
| Actual Return | 0.73% | $1,000.00 | $1,086.60 | $3.84 |
| Hypothetical 5% Return | 0.73% | $1,000.00 | $1,021.53 | $3.72 |
| Schwab Dividend Equity Fund | ||||
| Actual Return | 0.89% | $1,000.00 | $1,056.40 | $4.61 |
| Hypothetical 5% Return | 0.89% | $1,000.00 | $1,020.72 | $4.53 |
| Schwab Large-Cap Growth Fund | ||||
| Actual Return | 0.99% | $1,000.00 | $1,140.60 | $5.34 |
| Hypothetical 5% Return | 0.99% | $1,000.00 | $1,020.21 | $5.04 |
| Schwab Small-Cap Equity Fund | ||||
| Actual Return | 1.08% | $1,000.00 | $1,057.40 | $5.60 |
| Hypothetical 5% Return | 1.08% | $1,000.00 | $1,019.76 | $5.50 |
| Schwab Health Care Fund | ||||
| Actual Return | 0.80% | $1,000.00 | $1,106.40 | $4.25 |
| Hypothetical 5% Return | 0.80% | $1,000.00 | $1,021.17 | $4.08 |
| Schwab International Core Equity Fund | ||||
| Actual Return | 0.86% | $1,000.00 | $1,043.40 | $4.43 |
| Hypothetical 5% Return | 0.86% | $1,000.00 | $1,020.87 | $4.38 |
| 1 | Based on the most recent six-month expense ratio. |
| 2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
26
Schwab Active Equity Funds | Annual Report
Schwab Core Equity Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $22.24 | $21.87 | $22.40 | $24.36 | $19.65 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.21 | 0.20 | 0.21 | 0.26 | 0.34 | |
| Net realized and unrealized gains (losses) | 7.90 | 0.82 | 1.99 | 0.41 | 4.71 | |
| Total from investment operations | 8.11 | 1.02 | 2.20 | 0.67 | 5.05 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.20) | (0.20) | (0.27) | (0.34) | (0.34) | |
| Distributions from net realized gains | (0.93) | (0.45) | (2.46) | (2.29) | — | |
| Total distributions | (1.13) | (0.65) | (2.73) | (2.63) | (0.34) | |
| Net asset value at end of period | $29.22 | $22.24 | $21.87 | $22.40 | $24.36 | |
| Total return | 37.62% | 4.65% | 12.02% | 2.71% | 26.00% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses | 0.73% | 0.73% | 0.73% | 0.73% | 0.73% | |
| Gross operating expenses | 0.73% | 0.73% | 0.73% | 0.73% | 0.74% | |
| Net investment income (loss) | 0.81% | 0.91% | 1.01% | 1.12% | 1.53% | |
| Portfolio turnover rate | 86% | 97% | 98% | 101% | 86% | |
| Net assets, end of period (x 1,000,000) | $1,860 | $1,957 | $2,182 | $2,138 | $2,353 | |
| 1 | Calculated based on the average shares outstanding during the period. |
27
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Core Equity Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.6% OF NET ASSETS | ||
| Banks 4.4% | ||
| Bank of America Corp. | 414,920 | 19,824,878 |
| Citizens Financial Group, Inc. | 635,755 | 30,122,072 |
| Regions Financial Corp. | 1,365,017 | 32,323,602 |
| 82,270,552 | ||
| Capital Goods 6.0% | ||
| A.O. Smith Corp. | 259,182 | 18,938,429 |
| General Dynamics Corp. | 45,415 | 9,207,891 |
| Illinois Tool Works, Inc. | 86,653 | 19,745,619 |
| Lockheed Martin Corp. | 101,656 | 33,782,322 |
| Parker-Hannifin Corp. | 100,411 | 29,780,899 |
| 111,455,160 | ||
| Consumer Durables & Apparel 3.3% | ||
| Deckers Outdoor Corp. * | 71,441 | 28,241,342 |
| LVMH Moet Hennessy Louis Vuitton SE ADR | 65,005 | 10,229,187 |
| PulteGroup, Inc. | 462,633 | 22,243,394 |
| 60,713,923 | ||
| Consumer Services 1.2% | ||
| Starbucks Corp. | 202,451 | 21,473,978 |
| Diversified Financials 4.7% | ||
| Capital One Financial Corp. | 74,490 | 11,250,225 |
| Morgan Stanley | 212,909 | 21,882,787 |
| Synchrony Financial | 300,737 | 13,969,234 |
| The Goldman Sachs Group, Inc. | 98,072 | 40,538,061 |
| 87,640,307 | ||
| Energy 3.5% | ||
| EOG Resources, Inc. | 448,195 | 41,440,110 |
| Exxon Mobil Corp. | 377,413 | 24,331,816 |
| 65,771,926 | ||
| Food & Staples Retailing 2.2% | ||
| Costco Wholesale Corp. | 26,388 | 12,970,757 |
| Walmart, Inc. | 188,952 | 28,233,208 |
| 41,203,965 | ||
| Food, Beverage & Tobacco 3.7% | ||
| Altria Group, Inc. | 371,063 | 16,367,589 |
| Constellation Brands, Inc., Class A | 106,128 | 23,009,611 |
| The Coca-Cola Co. | 518,913 | 29,251,126 |
| 68,628,326 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Health Care Equipment & Services 6.8% | ||
| Abbott Laboratories | 186,054 | 23,980,500 |
| Anthem, Inc. | 37,228 | 16,199,020 |
| Boston Scientific Corp. * | 421,563 | 18,182,012 |
| Cerner Corp. | 271,969 | 20,204,577 |
| McKesson Corp. | 79,236 | 16,471,580 |
| UnitedHealth Group, Inc. | 69,396 | 31,954,776 |
| 126,992,465 | ||
| Household & Personal Products 1.3% | ||
| The Procter & Gamble Co. | 170,943 | 24,443,140 |
| Insurance 3.2% | ||
| Aflac, Inc. | 426,555 | 22,893,207 |
| Fidelity National Financial, Inc. | 248,753 | 11,917,756 |
| The Allstate Corp. | 201,814 | 24,958,337 |
| 59,769,300 | ||
| Materials 2.1% | ||
| Linde plc | 23,368 | 7,459,065 |
| The Sherwin-Williams Co. | 101,006 | 31,979,510 |
| 39,438,575 | ||
| Media & Entertainment 8.2% | ||
| Alphabet, Inc., Class A * | 32,479 | 96,167,721 |
| Charter Communications, Inc., Class A * | 15,278 | 10,310,969 |
| Meta Platforms, Inc., Class A * | 108,523 | 35,114,787 |
| Nintendo Co., Ltd. ADR | 180,912 | 9,995,388 |
| 151,588,865 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 7.9% | ||
| Amgen, Inc. | 149,354 | 30,911,797 |
| Eli Lilly & Co. | 51,632 | 13,153,768 |
| Gilead Sciences, Inc. | 161,121 | 10,453,531 |
| Johnson & Johnson | 189,011 | 30,786,112 |
| Pfizer, Inc. | 229,837 | 10,053,070 |
| Roche Holding AG ADR | 288,704 | 13,953,064 |
| Thermo Fisher Scientific, Inc. | 32,190 | 20,378,523 |
| Zoetis, Inc. | 82,517 | 17,840,176 |
| 147,530,041 | ||
| Real Estate 1.5% | ||
| American Tower Corp. | 101,075 | 28,500,118 |
| Retailing 6.6% | ||
| Amazon.com, Inc. * | 24,037 | 81,063,100 |
| O'Reilly Automotive, Inc. * | 17,489 | 10,883,754 |
| The Home Depot, Inc. | 36,635 | 13,618,695 |
| The TJX Cos., Inc. | 255,341 | 16,722,282 |
| 122,287,831 | ||
28
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Core Equity Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Semiconductors & Semiconductor Equipment 4.0% | ||
| Applied Materials, Inc. | 98,892 | 13,513,592 |
| Broadcom, Inc. | 62,750 | 33,362,293 |
| Intel Corp. | 198,040 | 9,703,960 |
| KLA Corp. | 46,169 | 17,209,956 |
| 73,789,801 | ||
| Software & Services 16.4% | ||
| Accenture plc, Class A | 114,552 | 41,100,112 |
| Adobe, Inc. * | 70,990 | 46,169,057 |
| Fidelity National Information Services, Inc. | 217,118 | 24,043,647 |
| Mastercard, Inc., Class A | 40,919 | 13,729,143 |
| Microsoft Corp. | 434,007 | 143,925,401 |
| VeriSign, Inc. * | 49,227 | 10,961,376 |
| Visa, Inc., Class A | 121,361 | 25,700,619 |
| 305,629,355 | ||
| Technology Hardware & Equipment 7.8% | ||
| Apple Inc. | 866,457 | 129,795,259 |
| Cisco Systems, Inc. | 284,851 | 15,943,110 |
| 145,738,369 | ||
| Telecommunication Services 2.3% | ||
| Verizon Communications, Inc. | 795,451 | 42,150,948 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Transportation 1.1% | ||
| United Parcel Service, Inc., Class B | 95,449 | 20,375,498 |
| Utilities 1.4% | ||
| Duke Energy Corp. | 253,674 | 25,877,285 |
| Total Common Stocks (Cost $1,207,656,549) | 1,853,269,728 | |
| SHORT-TERM INVESTMENTS 0.9% OF NET ASSETS | ||
| Money Market Funds 0.9% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (a) | 15,728,522 | 15,728,522 |
| Total Short-Term Investments (Cost $15,728,522) | 15,728,522 | |
| Total Investments in Securities (Cost $1,223,385,071) | 1,868,998,250 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| ADR — | American Depositary Receipt |
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $1,853,269,728 | $— | $— | $1,853,269,728 |
| Short-Term Investments1 | 15,728,522 | — | — | 15,728,522 |
| Total | $1,868,998,250 | $— | $— | $1,868,998,250 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
29
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Core Equity Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $1,223,385,071) | $1,868,998,250 | |
| Deposit with broker for futures contracts | 550,000 | |
| Receivables: | ||
| Dividends | 1,559,365 | |
| Foreign tax reclaims | 386,426 | |
| Fund shares sold | 52,971 | |
| Prepaid expenses | + | 17,135 |
| Total assets | 1,871,564,147 | |
| Liabilities | ||
| Payables: | ||
| Fund shares redeemed | 10,151,689 | |
| Investment adviser and administrator fees | 727,863 | |
| Shareholder service fees | 374,182 | |
| Accrued expenses | + | 187,341 |
| Total liabilities | 11,441,075 | |
| Net assets | $1,860,123,072 | |
| Net Assets by Source | ||
| Capital received from investors | $779,901,659 | |
| Total distributable earnings | + | 1,080,221,413 |
| Net assets | $1,860,123,072 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $1,860,123,072 | 63,668,512 | $29.22 | ||
30
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Core Equity Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $174,637) | $29,897,725 | |
| Securities on loan, net | + | 3,015 |
| Total investment income | 29,900,740 | |
| Expenses | ||
| Investment adviser and administrator fees | 9,120,924 | |
| Shareholder service fees | 4,709,524 | |
| Custodian fees | 75,834 | |
| Portfolio accounting fees | 69,629 | |
| Shareholder reports | 60,576 | |
| Professional fees | 35,407 | |
| Registration fees | 32,834 | |
| Transfer agent fees | 14,710 | |
| Independent trustees’ fees | 13,340 | |
| Other expenses | + | 21,102 |
| Total expenses | 14,153,880 | |
| Expense reduction by investment adviser and its affiliates | – | 14,710 |
| Net expenses | – | 14,139,170 |
| Net investment income | 15,761,570 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 429,863,961 | |
| Net realized losses on futures contracts | + | (3,983,885) |
| Net realized gains | 425,880,076 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 181,824,785 |
| Net realized and unrealized gains | 607,704,861 | |
| Increase in net assets resulting from operations | $623,466,431 | |
31
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Core Equity Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $15,761,570 | $18,727,365 | |
| Net realized gains | 425,880,076 | 77,674,196 | |
| Net change in unrealized appreciation (depreciation) | + | 181,824,785 | (9,143,636) |
| Increase in net assets from operations | $623,466,431 | $87,257,925 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($97,998,756) | ($63,919,641) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 3,613,563 | $92,083,552 | 4,154,672 | $86,639,129 | |
| Shares reinvested | 3,088,327 | 73,440,411 | 2,083,874 | 46,553,727 | |
| Shares redeemed | + | (31,031,079) | (787,773,255) | (18,036,297) | (381,670,564) |
| Net transactions in fund shares | (24,329,189) | ($622,249,292) | (11,797,751) | ($248,477,708) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 87,997,701 | $1,956,904,689 | 99,795,452 | $2,182,044,113 | |
| Total decrease | + | (24,329,189) | (96,781,617) | (11,797,751) | (225,139,424) |
| End of period | 63,668,512 | $1,860,123,072 | 87,997,701 | $1,956,904,689 | |
32
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Dividend Equity Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $12.14 | $15.07 | $15.43 | $17.21 | $14.39 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.31 | 0.28 | 0.23 | 0.22 | 0.29 | |
| Net realized and unrealized gains (losses) | 4.80 | (2.15) | 0.93 | (0.27) | 2.75 | |
| Total from investment operations | 5.11 | (1.87) | 1.16 | (0.05) | 3.04 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.33) | (0.26) | (0.24) | (0.30) | (0.22) | |
| Distributions from net realized gains | — | (0.80) | (1.28) | (1.43) | — | |
| Total distributions | (0.33) | (1.06) | (1.52) | (1.73) | (0.22) | |
| Net asset value at end of period | $16.92 | $12.14 | $15.07 | $15.43 | $17.21 | |
| Total return | 42.38% | (13.30%) | 8.78% | (0.63%) | 21.19% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses | 0.89% | 0.89% | 0.89% | 0.88% | 0.88% | |
| Gross operating expenses | 0.90% | 0.90% | 0.89% | 0.88% | 0.88% | |
| Net investment income (loss) | 2.01% | 2.16% | 1.58% | 1.36% | 1.78% | |
| Portfolio turnover rate | 83% | 70% | 70% | 79% | 70% | |
| Net assets, end of period (x 1,000,000) | $671 | $577 | $847 | $1,249 | $1,469 | |
| 1 | Calculated based on the average shares outstanding during the period. |
33
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Dividend Equity Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.1% OF NET ASSETS | ||
| Banks 8.6% | ||
| Bank of America Corp. | 265,991 | 12,709,050 |
| Citigroup, Inc. | 87,309 | 6,038,290 |
| Citizens Financial Group, Inc. | 90,100 | 4,268,938 |
| Hancock Whitney Corp. | 44,353 | 2,194,586 |
| Huntington Bancshares, Inc. | 380,300 | 5,985,922 |
| JPMorgan Chase & Co. | 106,486 | 18,090,907 |
| Zions Bancorp NA | 128,110 | 8,069,649 |
| 57,357,342 | ||
| Capital Goods 7.2% | ||
| 3M Co. | 34,200 | 6,110,856 |
| General Dynamics Corp. | 23,451 | 4,754,690 |
| Illinois Tool Works, Inc. | 18,181 | 4,142,904 |
| Lockheed Martin Corp. | 41,878 | 13,916,897 |
| Parker-Hannifin Corp. | 18,592 | 5,514,201 |
| Raytheon Technologies Corp. | 76,725 | 6,817,784 |
| Watsco, Inc. | 23,400 | 6,776,172 |
| 48,033,504 | ||
| Commercial & Professional Services 0.2% | ||
| Republic Services, Inc. | 8,900 | 1,197,940 |
| Consumer Durables & Apparel 1.5% | ||
| NIKE, Inc., Class B | 61,900 | 10,355,251 |
| Consumer Services 2.8% | ||
| McDonald’s Corp. | 39,500 | 9,699,225 |
| Starbucks Corp. | 87,221 | 9,251,532 |
| 18,950,757 | ||
| Diversified Financials 8.1% | ||
| Capital One Financial Corp. | 29,000 | 4,379,870 |
| Evercore, Inc., Class A | 14,651 | 2,224,608 |
| Jefferies Financial Group, Inc. | 164,005 | 7,052,215 |
| Lazard Ltd., Class A | 160,546 | 7,865,149 |
| Morgan Stanley | 136,940 | 14,074,693 |
| OneMain Holdings, Inc. | 74,819 | 3,951,191 |
| T. Rowe Price Group, Inc. | 29,287 | 6,351,765 |
| The Goldman Sachs Group, Inc. | 21,000 | 8,680,350 |
| 54,579,841 | ||
| Energy 4.5% | ||
| Chevron Corp. | 115,024 | 13,169,098 |
| ConocoPhillips | 20,999 | 1,564,216 |
| Exxon Mobil Corp. | 192,277 | 12,396,098 |
| Kinder Morgan, Inc. | 199,543 | 3,342,345 |
| 30,471,757 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Food & Staples Retailing 1.6% | ||
| Walmart, Inc. | 70,003 | 10,459,848 |
| Food, Beverage & Tobacco 9.1% | ||
| Altria Group, Inc. | 166,301 | 7,335,537 |
| Diageo plc | 197,923 | 9,847,003 |
| Flowers Foods, Inc. | 158,011 | 3,910,772 |
| General Mills, Inc. | 77,812 | 4,808,782 |
| Imperial Brands plc | 128,391 | 2,709,201 |
| Philip Morris International, Inc. | 118,100 | 11,165,174 |
| Sanderson Farms, Inc. | 8,000 | 1,515,600 |
| The Coca-Cola Co. | 351,875 | 19,835,194 |
| 61,127,263 | ||
| Health Care Equipment & Services 5.5% | ||
| Abbott Laboratories | 32,828 | 4,231,201 |
| CVS Health Corp. | 78,300 | 6,990,624 |
| Hill-Rom Holdings, Inc. | 51,647 | 8,000,120 |
| Medtronic plc | 55,660 | 6,671,408 |
| UnitedHealth Group, Inc. | 23,771 | 10,945,832 |
| 36,839,185 | ||
| Household & Personal Products 1.5% | ||
| The Procter & Gamble Co. | 70,085 | 10,021,454 |
| Insurance 3.0% | ||
| American National Group, Inc. | 12,023 | 2,280,883 |
| Fidelity National Financial, Inc. | 61,095 | 2,927,062 |
| Prudential Financial, Inc. | 24,400 | 2,685,220 |
| The Allstate Corp. | 96,891 | 11,982,510 |
| 19,875,675 | ||
| Materials 2.2% | ||
| BHP Group plc | 91,371 | 2,413,252 |
| Dow, Inc. | 12,500 | 699,625 |
| PPG Industries, Inc. | 31,118 | 4,996,617 |
| The Sherwin-Williams Co. | 21,840 | 6,914,762 |
| 15,024,256 | ||
| Media & Entertainment 3.3% | ||
| Activision Blizzard, Inc. | 54,950 | 4,296,540 |
| Alphabet, Inc., Class A * | 2,115 | 6,262,346 |
| Comcast Corp., Class A | 185,621 | 9,546,488 |
| Omnicom Group, Inc. | 5,370 | 365,590 |
| The Interpublic Group of Cos., Inc. | 51,200 | 1,872,384 |
| 22,343,348 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 9.6% | ||
| Amgen, Inc. | 63,962 | 13,238,215 |
| Johnson & Johnson | 97,902 | 15,946,278 |
| Novartis AG | 11,522 | 953,016 |
34
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Dividend Equity Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Novo Nordisk A/S, Class B | 38,895 | 4,265,026 |
| Pfizer, Inc. | 330,816 | 14,469,892 |
| Roche Holding AG | 40,663 | 15,752,600 |
| 64,625,027 | ||
| Real Estate 1.8% | ||
| American Tower Corp. | 7,484 | 2,110,264 |
| Lamar Advertising Co., Class A | 24,542 | 2,778,154 |
| National Storage Affiliates Trust | 116,768 | 7,293,329 |
| 12,181,747 | ||
| Retailing 2.7% | ||
| Genuine Parts Co. | 33,100 | 4,339,741 |
| The Home Depot, Inc. | 36,940 | 13,732,076 |
| 18,071,817 | ||
| Semiconductors & Semiconductor Equipment 3.1% | ||
| Applied Materials, Inc. | 11,700 | 1,598,805 |
| Broadcom, Inc. | 18,160 | 9,655,127 |
| QUALCOMM, Inc. | 33,522 | 4,459,767 |
| Texas Instruments, Inc. | 26,600 | 4,986,968 |
| 20,700,667 | ||
| Software & Services 8.7% | ||
| Accenture plc, Class A | 39,966 | 14,339,401 |
| International Business Machines Corp. | 95,432 | 11,938,543 |
| Microsoft Corp. | 49,509 | 16,418,175 |
| Oracle Corp. | 33,800 | 3,242,772 |
| Visa, Inc., Class A | 59,000 | 12,494,430 |
| 58,433,321 | ||
| Technology Hardware & Equipment 4.4% | ||
| Apple Inc. | 43,334 | 6,491,433 |
| Cisco Systems, Inc. | 267,582 | 14,976,565 |
| HP, Inc. | 65,756 | 1,994,379 |
| Samsung Electronics Co., Ltd. | 101,612 | 6,083,827 |
| 29,546,204 | ||
| Telecommunication Services 3.7% | ||
| AT&T, Inc. | 325,057 | 8,210,940 |
| Verizon Communications, Inc. | 308,741 | 16,360,185 |
| 24,571,125 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Transportation 2.2% | ||
| Ryder System, Inc. | 72,503 | 6,159,130 |
| United Parcel Service, Inc., Class B | 39,700 | 8,474,759 |
| 14,633,889 | ||
| Utilities 3.8% | ||
| Duke Energy Corp. | 117,641 | 12,000,558 |
| Exelon Corp. | 67,158 | 3,572,134 |
| NRG Energy, Inc. | 121,295 | 4,838,458 |
| UGI Corp. | 115,893 | 5,030,915 |
| 25,442,065 | ||
| Total Common Stocks (Cost $542,605,245) | 664,843,283 | |
| ISSUER | FACE AMOUNT | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.8% OF NET ASSETS | ||
| Time Deposits 0.8% | ||
| Brown Brothers Harriman & Co. | ||
| South African Rand | ||
| 2.15%, 11/02/21 (a) | 178 | 12 |
| Citibank NA | ||
| British Pound | ||
| 0.01%, 11/01/21 (a) | 108 | 148 |
| Skandinaviska Enskilda Banken AB | ||
| U.S. Dollar | ||
| 0.01%, 11/01/21 (a) | 5,384,843 | 5,384,843 |
| 5,385,003 | ||
| Total Short-Term Investments (Cost $5,385,003) | 5,385,003 | |
| Total Investments in Securities (Cost $547,990,248) | 670,228,286 | |
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. Face amount is disclosed in local currency. |
35
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Dividend Equity Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $494,520,533 | $— | $— | $494,520,533 |
| Food, Beverage & Tobacco | 48,571,059 | 12,556,204 | — | 61,127,263 |
| Materials | 12,611,004 | 2,413,252 | — | 15,024,256 |
| Pharmaceuticals, Biotechnology & Life Sciences | 43,654,385 | 20,970,642 | — | 64,625,027 |
| Technology Hardware & Equipment | 23,462,377 | 6,083,827 | — | 29,546,204 |
| Short-Term Investments1 | — | 5,385,003 | — | 5,385,003 |
| Total | $622,819,358 | $47,408,928 | $— | $670,228,286 |
| 1 | As categorized in the Portfolio Holdings. |
36
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Dividend Equity Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $547,990,248) | $670,228,286 | |
| Deposit with broker for futures contracts | 275,000 | |
| Receivables: | ||
| Dividends | 1,111,713 | |
| Foreign tax reclaims | 180,446 | |
| Fund shares sold | 82,647 | |
| Prepaid expenses | + | 39,211 |
| Total assets | 671,917,303 | |
| Liabilities | ||
| Payables: | ||
| Fund shares redeemed | 536,938 | |
| Investment adviser and administrator fees | 340,268 | |
| Shareholder service fees | 133,730 | |
| Accrued expenses | + | 141,812 |
| Total liabilities | 1,152,748 | |
| Net assets | $670,764,555 | |
| Net Assets by Source | ||
| Capital received from investors | $461,698,916 | |
| Total distributable earnings | + | 209,065,639 |
| Net assets | $670,764,555 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $670,764,555 | 39,633,491 | $16.92 | ||
37
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Dividend Equity Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $139,767) | $18,528,920 | |
| Interest received from securities - unaffiliated | 162 | |
| Securities on loan, net | + | 6,525 |
| Total investment income | 18,535,607 | |
| Expenses | ||
| Investment adviser and administrator fees | 3,959,781 | |
| Shareholder service fees | 1,524,963 | |
| Portfolio accounting fees | 115,489 | |
| Shareholder reports | 38,689 | |
| Professional fees | 31,950 | |
| Registration fees | 29,275 | |
| Independent trustees’ fees | 9,055 | |
| Custodian fees | 7,770 | |
| Transfer agent fees | 4,088 | |
| Other expenses | + | 11,837 |
| Total expenses | 5,732,897 | |
| Expense reduction by investment adviser and its affiliates | – | 47,754 |
| Net expenses | – | 5,685,143 |
| Net investment income | 12,850,464 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 117,117,474 | |
| Net realized losses on futures contracts | (1,812,038) | |
| Net realized losses on foreign currency transactions | + | (17,731) |
| Net realized gains | 115,287,705 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 90,531,181 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (579) |
| Net change in unrealized appreciation (depreciation) | + | 90,530,602 |
| Net realized and unrealized gains | 205,818,307 | |
| Increase in net assets resulting from operations | $218,668,771 | |
38
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Dividend Equity Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $12,850,464 | $14,918,815 | |
| Net realized gains (losses) | 115,287,705 | (28,745,649) | |
| Net change in unrealized appreciation (depreciation) | + | 90,530,602 | (91,563,439) |
| Increase (decrease) in net assets from operations | $218,668,771 | ($105,390,273) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($13,599,106) | ($57,745,153) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 3,539,840 | $56,507,561 | 3,025,001 | $39,046,505 | |
| Shares reinvested | 674,614 | 10,361,404 | 3,317,070 | 46,974,063 | |
| Shares redeemed | + | (12,099,793) | (177,875,463) | (15,016,968) | (193,138,459) |
| Net transactions in fund shares | (7,885,339) | ($111,006,498) | (8,674,897) | ($107,117,891) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 47,518,830 | $576,701,388 | 56,193,727 | $846,954,705 | |
| Total increase (decrease) | + | (7,885,339) | 94,063,167 | (8,674,897) | (270,253,317) |
| End of period | 39,633,491 | $670,764,555 | 47,518,830 | $576,701,388 | |
39
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Large-Cap Growth Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $20.85 | $18.07 | $18.04 | $18.65 | $15.20 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | (0.06) | 0.00 2 | 0.06 | 0.06 | 0.08 | |
| Net realized and unrealized gains (losses) | 8.42 | 3.76 | 1.79 | 0.75 | 4.04 | |
| Total from investment operations | 8.36 | 3.76 | 1.85 | 0.81 | 4.12 | |
| Less distributions: | ||||||
| Distributions from net investment income | — | (0.03) | (0.07) | (0.07) | (0.17) | |
| Distributions from net realized gains | (0.25) | (0.95) | (1.75) | (1.35) | (0.50) | |
| Total distributions | (0.25) | (0.98) | (1.82) | (1.42) | (0.67) | |
| Net asset value at end of period | $28.96 | $20.85 | $18.07 | $18.04 | $18.65 | |
| Total return | 40.41% | 21.60% | 12.18% | 4.46% | 28.10% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses | 0.99% | 0.99% | 0.99% | 0.99% | 0.99% | |
| Gross operating expenses | 1.02% | 1.02% | 1.03% | 1.02% | 1.04% | |
| Net investment income (loss) | (0.23%) | 0.01% | 0.34% | 0.30% | 0.48% | |
| Portfolio turnover rate | 42% | 65% | 67% | 88% | 81% | |
| Net assets, end of period (x 1,000,000) | $292 | $210 | $181 | $243 | $257 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Per-share amount was less than $0.005. |
40
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Large-Cap Growth Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 96.6% OF NET ASSETS | ||
| Automobiles & Components 3.0% | ||
| Tesla, Inc. * | 7,986 | 8,896,404 |
| Banks 0.6% | ||
| Citizens Financial Group, Inc. | 38,348 | 1,816,928 |
| Capital Goods 4.3% | ||
| AGCO Corp. | 9,743 | 1,190,692 |
| Atkore, Inc. * | 25,623 | 2,422,142 |
| Illinois Tool Works, Inc. | 1,301 | 296,459 |
| Lockheed Martin Corp. | 7,652 | 2,542,913 |
| Owens Corning | 8,966 | 837,514 |
| Parker-Hannifin Corp. | 10,673 | 3,165,505 |
| Quanta Services, Inc. | 9,885 | 1,198,853 |
| Regal Rexnord Corp. | 6,097 | 928,756 |
| 12,582,834 | ||
| Consumer Durables & Apparel 3.4% | ||
| Deckers Outdoor Corp. * | 5,410 | 2,138,627 |
| Lululemon Athletica, Inc. * | 4,086 | 1,904,117 |
| NIKE, Inc., Class B | 28,300 | 4,734,307 |
| YETI Holdings, Inc. * | 11,704 | 1,150,854 |
| 9,927,905 | ||
| Consumer Services 1.8% | ||
| Starbucks Corp. | 50,583 | 5,365,339 |
| Diversified Financials 1.9% | ||
| Morgan Stanley | 17,606 | 1,809,545 |
| MSCI, Inc. | 2,815 | 1,871,637 |
| S&P Global, Inc. | 3,669 | 1,739,693 |
| 5,420,875 | ||
| Energy 1.0% | ||
| EOG Resources, Inc. | 31,449 | 2,907,774 |
| Food & Staples Retailing 0.9% | ||
| Walmart, Inc. | 18,435 | 2,754,558 |
| Food, Beverage & Tobacco 3.5% | ||
| Constellation Brands, Inc., Class A | 13,078 | 2,835,441 |
| Monster Beverage Corp. * | 17,931 | 1,524,135 |
| PepsiCo, Inc. | 18,710 | 3,023,536 |
| Philip Morris International, Inc. | 29,274 | 2,767,564 |
| 10,150,676 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Health Care Equipment & Services 5.1% | ||
| Abbott Laboratories | 28,139 | 3,626,836 |
| Hologic, Inc. * | 38,748 | 2,840,616 |
| IDEXX Laboratories, Inc. * | 3,556 | 2,368,794 |
| Merit Medical Systems, Inc. * | 25,025 | 1,683,181 |
| UnitedHealth Group, Inc. | 9,246 | 4,257,505 |
| 14,776,932 | ||
| Materials 1.0% | ||
| The Sherwin-Williams Co. | 9,307 | 2,946,689 |
| Media & Entertainment 10.8% | ||
| Alphabet, Inc., Class A * | 6,012 | 17,801,051 |
| Meta Platforms, Inc., Class A * | 32,865 | 10,634,128 |
| Netflix, Inc. * | 4,357 | 3,007,681 |
| 31,442,860 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 3.2% | ||
| Avantor, Inc. * | 50,508 | 2,039,513 |
| Eli Lilly & Co. | 10,599 | 2,700,201 |
| Pfizer, Inc. | 23,006 | 1,006,282 |
| Roche Holding AG ADR | 34,387 | 1,661,924 |
| Zoetis, Inc. | 8,745 | 1,890,669 |
| 9,298,589 | ||
| Real Estate 1.2% | ||
| American Homes 4 Rent, Class A | 22,286 | 904,812 |
| American Tower Corp. | 6,424 | 1,811,375 |
| National Storage Affiliates Trust | 12,932 | 807,733 |
| 3,523,920 | ||
| Retailing 10.1% | ||
| Amazon.com, Inc. * | 5,992 | 20,207,600 |
| Lowe’s Cos., Inc. | 11,816 | 2,762,817 |
| O'Reilly Automotive, Inc. * | 1,990 | 1,238,417 |
| The Home Depot, Inc. | 14,413 | 5,357,889 |
| 29,566,723 | ||
| Semiconductors & Semiconductor Equipment 6.6% | ||
| Applied Materials, Inc. | 24,484 | 3,345,739 |
| Broadcom, Inc. | 6,850 | 3,641,940 |
| KLA Corp. | 5,595 | 2,085,592 |
| Lam Research Corp. | 2,058 | 1,159,827 |
| Monolithic Power Systems, Inc. | 2,629 | 1,381,434 |
| NVIDIA Corp. | 24,032 | 6,144,261 |
| QUALCOMM, Inc. | 10,672 | 1,419,803 |
| 19,178,596 | ||
41
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Large-Cap Growth Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Software & Services 26.0% | ||
| Accenture plc, Class A | 14,999 | 5,381,491 |
| Adobe, Inc. * | 10,664 | 6,935,439 |
| DocuSign, Inc. * | 5,751 | 1,600,446 |
| Fortinet, Inc. * | 5,477 | 1,842,134 |
| Gartner, Inc. * | 10,838 | 3,597,241 |
| Intuit, Inc. | 4,573 | 2,862,652 |
| Mastercard, Inc., Class A | 11,969 | 4,015,839 |
| Microsoft Corp. | 99,364 | 32,951,090 |
| Palo Alto Networks, Inc. * | 3,892 | 1,981,378 |
| PayPal Holdings, Inc. * | 13,726 | 3,192,530 |
| salesforce.com, Inc. * | 7,873 | 2,359,460 |
| ServiceNow, Inc. * | 2,645 | 1,845,575 |
| Synopsys, Inc. * | 5,560 | 1,852,481 |
| Visa, Inc., Class A | 27,048 | 5,727,955 |
| 76,145,711 | ||
| Technology Hardware & Equipment 11.2% | ||
| Apple Inc. | 217,917 | 32,643,967 |
| Transportation 1.0% | ||
| United Parcel Service, Inc., Class B | 14,196 | 3,030,420 |
| Total Common Stocks (Cost $129,981,735) | 282,377,700 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 3.4% OF NET ASSETS | ||
| Time Deposits 3.4% | ||
| Barclays Capital, Inc. | ||
| 0.01%, 11/01/21 (a) | 1,354,708 | 1,354,708 |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| BNP Paribas SA | ||
| 0.01%, 11/01/21 (a) | 2,908,302 | 2,908,302 |
| DnB Bank ASA | ||
| 0.01%, 11/01/21 (a) | 2,908,302 | 2,908,302 |
| JPMorgan Chase Bank | ||
| 0.01%, 11/01/21 (a) | 2,908,302 | 2,908,302 |
| 10,079,614 | ||
| Total Short-Term Investments (Cost $10,079,614) | 10,079,614 | |
| Total Investments in Securities (Cost $140,061,349) | 292,457,314 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| S&P 500 Index, e-mini, expires 12/17/21 | 6 | 1,379,100 | 28,100 |
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. |
| ADR — | American Depositary Receipt |
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $282,377,700 | $— | $— | $282,377,700 |
| Short-Term Investments1 | — | 10,079,614 | — | 10,079,614 |
| Futures Contracts2 | 28,100 | — | — | 28,100 |
| Total | $282,405,800 | $10,079,614 | $— | $292,485,414 |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
42
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Large-Cap Growth Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $140,061,349) | $292,457,314 | |
| Deposit with broker for futures contracts | 69,000 | |
| Receivables: | ||
| Fund shares sold | 180,601 | |
| Dividends | 73,732 | |
| Foreign tax reclaims | 6,110 | |
| Variation margin on future contracts | 2,850 | |
| Prepaid expenses | + | 18,485 |
| Total assets | 292,808,092 | |
| Liabilities | ||
| Payables: | ||
| Investment adviser and administrator fees | 159,623 | |
| Fund shares redeemed | 64,233 | |
| Shareholder service fees | 56,297 | |
| Accrued expenses | + | 81,270 |
| Total liabilities | 361,423 | |
| Net assets | $292,446,669 | |
| Net Assets by Source | ||
| Capital received from investors | $117,887,951 | |
| Total distributable earnings | + | 174,558,718 |
| Net assets | $292,446,669 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $292,446,669 | 10,096,648 | $28.96 | ||
43
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Large-Cap Growth Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $19,295) | $1,922,277 | |
| Interest received from securities - unaffiliated | + | 191 |
| Total investment income | 1,922,468 | |
| Expenses | ||
| Investment adviser and administrator fees | 1,818,148 | |
| Shareholder service fees | 602,380 | |
| Portfolio accounting fees | 59,339 | |
| Professional fees | 33,380 | |
| Registration fees | 27,489 | |
| Shareholder reports | 19,551 | |
| Independent trustees’ fees | 7,818 | |
| Custodian fees | 7,710 | |
| Transfer agent fees | 1,798 | |
| Other expenses | + | 5,174 |
| Total expenses | 2,582,787 | |
| Expense reduction by investment adviser and its affiliates | – | 82,834 |
| Net expenses | – | 2,499,953 |
| Net investment loss | (577,485) | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 22,455,120 | |
| Net realized gains on futures contracts | + | 354,577 |
| Net realized gains | 22,809,697 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 61,424,566 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 103,179 |
| Net change in unrealized appreciation (depreciation) | + | 61,527,745 |
| Net realized and unrealized gains | 84,337,442 | |
| Increase in net assets resulting from operations | $83,759,957 | |
44
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Large-Cap Growth Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income (loss) | ($577,485) | $9,938 | |
| Net realized gains | 22,809,697 | 2,658,271 | |
| Net change in unrealized appreciation (depreciation) | + | 61,527,745 | 34,053,845 |
| Increase in net assets from operations | $83,759,957 | $36,722,054 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($2,530,978) | ($9,705,767) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 2,017,391 | $50,557,323 | 2,205,536 | $41,760,250 | |
| Shares reinvested | 94,152 | 2,163,612 | 459,787 | 8,322,151 | |
| Shares redeemed | + | (2,086,140) | (51,536,257) | (2,598,754) | (47,874,418) |
| Net transactions in fund shares | 25,403 | $1,184,678 | 66,569 | $2,207,983 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 10,071,245 | $210,033,012 | 10,004,676 | $180,808,742 | |
| Total increase | + | 25,403 | 82,413,657 | 66,569 | 29,224,270 |
| End of period | 10,096,648 | $292,446,669 | 10,071,245 | $210,033,012 | |
45
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Small-Cap Equity Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $15.02 | $16.68 | $20.87 | $23.58 | $18.81 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.02 | 0.03 | 0.02 | 0.01 | (0.00) 2 | |
| Net realized and unrealized gains (losses) | 8.76 | (1.67) | (0.35) 3 | 0.32 | 4.86 | |
| Total from investment operations | 8.78 | (1.64) | (0.33) | 0.33 | 4.86 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.03) | (0.02) | (0.01) | — | (0.09) | |
| Distributions from net realized gains | — | — | (3.85) | (3.04) | — | |
| Total distributions | (0.03) | (0.02) | (3.86) | (3.04) | (0.09) | |
| Net asset value at end of period | $23.77 | $15.02 | $16.68 | $20.87 | $23.58 | |
| Total return | 58.55% | (9.86%) | 0.08% | 1.37% | 25.87% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses | 1.08% | 1.09% | 1.09% | 1.09% | 1.10% | |
| Gross operating expenses | 1.08% | 1.10% | 1.09% | 1.09% | 1.10% | |
| Net investment income (loss) | 0.11% | 0.17% | 0.09% | 0.06% | (0.01%) | |
| Portfolio turnover rate | 84% | 113% | 117% | 111% | 99% | |
| Net assets, end of period (x 1,000,000) | $669 | $491 | $579 | $573 | $645 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Per-share amount was less than $0.005. |
| 3 | The per share amount does not accord with the change in aggregate gains and losses in securities during the period because of the timing of sales and repurchases of fund shares in relation to fluctuating market values. |
46
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.3% OF NET ASSETS | ||
| Automobiles & Components 2.7% | ||
| American Axle & Manufacturing Holdings, Inc. * | 423,656 | 3,846,796 |
| Dana, Inc. | 77,630 | 1,722,610 |
| Modine Manufacturing Co. * | 156,919 | 1,726,109 |
| Patrick Industries, Inc. | 55,060 | 4,289,725 |
| Tenneco, Inc., Class A * | 173,546 | 2,302,955 |
| The Goodyear Tire & Rubber Co. * | 175,082 | 3,347,568 |
| Winnebago Industries, Inc. | 16,449 | 1,113,433 |
| 18,349,196 | ||
| Banks 10.7% | ||
| Amalgamated Financial Corp. | 39,095 | 717,784 |
| American National Bankshares, Inc. | 3,839 | 142,427 |
| Associated Banc-Corp. | 65,979 | 1,470,012 |
| BankUnited, Inc. | 105,297 | 4,270,846 |
| Cathay General Bancorp | 46,013 | 1,941,288 |
| Community Trust Bancorp, Inc. | 12,652 | 552,639 |
| Customers Bancorp, Inc. * | 6,691 | 356,563 |
| CVB Financial Corp. | 24,138 | 483,243 |
| Financial Institutions, Inc. | 126,445 | 4,036,124 |
| First BanCorp | 234,900 | 3,206,385 |
| First Commonwealth Financial Corp. | 85,979 | 1,315,479 |
| Fulton Financial Corp. | 112,643 | 1,813,552 |
| Great Southern Bancorp, Inc. | 12,723 | 717,959 |
| Hancock Whitney Corp. | 153,062 | 7,573,508 |
| Hanmi Financial Corp. | 135,085 | 2,997,536 |
| Heartland Financial USA, Inc. | 45,132 | 2,262,016 |
| Hope Bancorp, Inc. | 443,711 | 6,473,743 |
| Independent Bank Corp., Michigan | 45,258 | 1,019,663 |
| International Bancshares Corp. | 181,354 | 7,689,410 |
| Mercantile Bank Corp. | 33,030 | 1,135,241 |
| Metrocity Bankshares, Inc. | 6,406 | 150,541 |
| MGIC Investment Corp. | 95,345 | 1,540,775 |
| OFG Bancorp | 21,550 | 558,145 |
| Old National Bancorp | 116,233 | 1,985,260 |
| Premier Financial Corp. | 23,548 | 750,710 |
| Radian Group, Inc. | 116,873 | 2,789,759 |
| Renasant Corp. | 24,704 | 924,177 |
| Republic Bancorp, Inc., Class A | 30,557 | 1,650,689 |
| S&T Bancorp, Inc. | 82,473 | 2,520,375 |
| Texas Capital Bancshares, Inc. * | 13,388 | 811,313 |
| The First of Long Island Corp. | 20,690 | 416,490 |
| UMB Financial Corp. | 39,896 | 3,942,523 |
| WesBanco, Inc. | 86,497 | 3,007,501 |
| Western New England Bancorp, Inc. | 44,667 | 434,610 |
| 71,658,286 | ||
| Capital Goods 11.0% | ||
| AAR Corp. * | 79,243 | 2,802,825 |
| Atkore, Inc. * | 74,016 | 6,996,732 |
| AZZ, Inc. | 23,289 | 1,237,345 |
| Boise Cascade Co. | 60,511 | 3,426,133 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Cornerstone Building Brands, Inc. * | 97,343 | 1,392,978 |
| Ducommun, Inc. * | 25,888 | 1,252,720 |
| Dycom Industries, Inc. * | 6,684 | 530,843 |
| EMCOR Group, Inc. | 32,628 | 3,963,976 |
| Encore Wire Corp. | 22,393 | 3,002,006 |
| Franklin Electric Co., Inc. | 10,295 | 889,282 |
| Generac Holdings, Inc. * | 10,083 | 5,026,980 |
| GrafTech International Ltd. | 152,813 | 1,635,099 |
| Herc Holdings, Inc. | 9,319 | 1,696,431 |
| Hillenbrand, Inc. | 76,396 | 3,472,962 |
| IES Holdings, Inc. * | 24,201 | 1,206,420 |
| Masonite International Corp. * | 39,742 | 4,769,437 |
| MasTec, Inc. * | 5,627 | 501,535 |
| Moog, Inc., Class A | 70,232 | 5,304,623 |
| Mueller Industries, Inc. | 145,749 | 7,672,227 |
| MYR Group, Inc. * | 30,138 | 3,078,597 |
| NV5 Global, Inc. * | 10,563 | 1,099,925 |
| Preformed Line Products Co. | 9,869 | 684,909 |
| REV Group, Inc. | 27,136 | 410,025 |
| SPX Corp. * | 33,326 | 1,935,907 |
| Terex Corp. | 121,184 | 5,429,043 |
| The Shyft Group, Inc. | 43,935 | 1,810,561 |
| Titan Machinery, Inc. * | 32,242 | 916,318 |
| Vectrus, Inc. * | 33,864 | 1,640,034 |
| 73,785,873 | ||
| Commercial & Professional Services 1.3% | ||
| ABM Industries, Inc. | 32,547 | 1,432,393 |
| ASGN, Inc. * | 5,862 | 701,447 |
| CACI International, Inc., Class A * | 1,257 | 361,563 |
| Heidrick & Struggles International, Inc. | 26,154 | 1,226,100 |
| Herman Miller, Inc. | 32,640 | 1,270,349 |
| HNI Corp. | 11,949 | 446,893 |
| Kforce, Inc. | 22,092 | 1,430,678 |
| Mastech Digital, Inc. * | 38,217 | 708,543 |
| Matthews International Corp., Class A | 8,419 | 289,361 |
| Pitney Bowes, Inc. | 98,649 | 684,624 |
| 8,551,951 | ||
| Consumer Durables & Apparel 3.5% | ||
| Beazer Homes USA, Inc. * | 81,355 | 1,473,339 |
| Crocs, Inc. * | 30,204 | 4,876,436 |
| Deckers Outdoor Corp. * | 18,322 | 7,242,870 |
| Ethan Allen Interiors, Inc. | 22,310 | 517,815 |
| Fossil Group, Inc. * | 38,360 | 453,415 |
| Johnson Outdoors, Inc., Class A | 4,794 | 509,027 |
| MasterCraft Boat Holdings, Inc. * | 39,341 | 1,053,552 |
| Sonos, Inc. * | 68,079 | 2,220,737 |
| Tempur Sealy International, Inc. | 76,707 | 3,411,160 |
| Tri Pointe Homes, Inc. * | 41,446 | 1,002,579 |
| Tupperware Brands Corp. * | 39,630 | 881,371 |
| 23,642,301 | ||
47
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Consumer Services 3.0% | ||
| Bloomin' Brands, Inc. * | 117,047 | 2,530,556 |
| Boyd Gaming Corp. * | 26,784 | 1,708,284 |
| Brinker International, Inc. * | 71,329 | 2,992,965 |
| Del Taco Restaurants, Inc. | 306,557 | 2,556,685 |
| Golden Entertainment, Inc. * | 32,015 | 1,663,820 |
| International Game Technology plc * | 30,111 | 887,973 |
| Perdoceo Education Corp. * | 145,806 | 1,548,460 |
| Red Rock Resorts, Inc., Class A * | 61,225 | 3,331,252 |
| Scientific Games Corp., Class A * | 8,805 | 704,840 |
| Texas Roadhouse, Inc. | 27,057 | 2,402,932 |
| 20,327,767 | ||
| Diversified Financials 2.5% | ||
| Artisan Partners Asset Management, Inc., Class A | 18,838 | 933,235 |
| Cowen, Inc., Class A | 11,738 | 442,875 |
| Enova International, Inc. * | 12,242 | 397,130 |
| OneMain Holdings, Inc. | 80,201 | 4,235,415 |
| Oppenheimer Holdings, Inc., Class A | 37,724 | 1,963,534 |
| PROG Holdings, Inc. | 16,669 | 674,261 |
| Regional Management Corp. | 40,493 | 2,068,382 |
| Stifel Financial Corp. | 33,453 | 2,437,720 |
| Virtus Investment Partners, Inc. | 11,410 | 3,651,200 |
| 16,803,752 | ||
| Energy 5.2% | ||
| Antero Resources Corp. * | 73,008 | 1,450,669 |
| ChampionX Corp. * | 119,068 | 3,123,154 |
| Comstock Resources, Inc. * | 69,851 | 689,429 |
| Coterra Energy, Inc. | 133,326 | 2,842,510 |
| CVR Energy, Inc. | 50,094 | 960,302 |
| Magnolia Oil & Gas Corp., Class A | 32,014 | 668,452 |
| Matador Resources Co. | 62,938 | 2,633,955 |
| National Energy Services Reunited Corp. * | 55,500 | 649,350 |
| Oasis Petroleum, Inc. | 10,891 | 1,313,455 |
| Oceaneering International, Inc. * | 55,734 | 757,982 |
| Oil States International, Inc. * | 100,221 | 607,339 |
| Ovintiv, Inc. | 214,048 | 8,031,081 |
| PDC Energy, Inc. | 56,858 | 2,974,242 |
| Ranger Oil Corp., Class A * | 65,043 | 2,149,021 |
| REX American Resources Corp. * | 6,210 | 546,170 |
| SFL Corp., Ltd. | 119,871 | 948,180 |
| SM Energy Co. | 46,660 | 1,601,371 |
| Southwestern Energy Co. * | 459,693 | 2,243,302 |
| Teekay Corp. * | 150,033 | 531,117 |
| 34,721,081 | ||
| Food & Staples Retailing 0.6% | ||
| BJ's Wholesale Club Holdings, Inc. * | 32,378 | 1,892,170 |
| Performance Food Group Co. * | 46,167 | 2,088,134 |
| 3,980,304 | ||
| Food, Beverage & Tobacco 2.0% | ||
| Coca-Cola Consolidated, Inc. | 15,496 | 6,220,094 |
| Darling Ingredients, Inc. * | 41,837 | 3,536,063 |
| John B. Sanfilippo & Son, Inc. | 5,589 | 472,271 |
| National Beverage Corp. | 42,690 | 2,407,716 |
| Primo Water Corp. | 41,578 | 661,090 |
| 13,297,234 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Health Care Equipment & Services 6.0% | ||
| Accuray, Inc. * | 283,668 | 1,415,503 |
| AMN Healthcare Services, Inc. * | 34,198 | 3,375,343 |
| Co-Diagnostics, Inc. *(a) | 42,974 | 352,817 |
| Electromed, Inc. * | 63,922 | 701,864 |
| Fulgent Genetics, Inc. * | 10,197 | 845,535 |
| Globus Medical, Inc., Class A * | 23,138 | 1,785,559 |
| Inari Medical, Inc. * | 14,252 | 1,290,091 |
| Integer Holdings Corp. * | 25,932 | 2,334,399 |
| LeMaitre Vascular, Inc. | 22,212 | 1,155,246 |
| LivaNova plc * | 15,129 | 1,160,697 |
| Meridian Bioscience, Inc. * | 146,266 | 2,751,263 |
| Merit Medical Systems, Inc. * | 60,473 | 4,067,414 |
| Natus Medical, Inc. * | 87,581 | 2,193,904 |
| NextGen Healthcare, Inc. * | 119,252 | 1,962,888 |
| Option Care Health, Inc. * | 43,948 | 1,201,099 |
| Ortho Clinical Diagnostics Holdings plc * | 116,472 | 2,302,651 |
| Owens & Minor, Inc. | 26,679 | 957,242 |
| Quidel Corp. * | 7,432 | 986,747 |
| Retractable Technologies, Inc. *(a) | 105,505 | 998,077 |
| Select Medical Holdings Corp. | 85,244 | 2,831,806 |
| Shockwave Medical, Inc. * | 3,814 | 815,052 |
| STAAR Surgical Co. * | 21,552 | 2,553,050 |
| Tenet Healthcare Corp. * | 17,644 | 1,264,369 |
| Utah Medical Products, Inc. | 5,768 | 558,515 |
| 39,861,131 | ||
| Household & Personal Products 0.6% | ||
| BellRing Brands, Inc., Class A * | 80,333 | 2,154,531 |
| Medifast, Inc. | 9,964 | 1,955,634 |
| 4,110,165 | ||
| Insurance 1.0% | ||
| Argo Group International Holdings Ltd. | 22,813 | 1,256,996 |
| CNO Financial Group, Inc. | 53,342 | 1,287,676 |
| Donegal Group, Inc., Class A | 11,427 | 162,835 |
| Global Indemnity Group LLC, Class A | 6,071 | 149,286 |
| Investors Title Co. | 1,858 | 360,080 |
| National Western Life Group, Inc., Class A | 5,892 | 1,266,839 |
| Safety Insurance Group, Inc. | 23,481 | 1,841,145 |
| 6,324,857 | ||
| Materials 3.9% | ||
| Advanced Emissions Solutions, Inc. * | 41,377 | 280,950 |
| AdvanSix, Inc. * | 67,312 | 3,271,363 |
| Alcoa Corp. | 32,078 | 1,473,984 |
| Constellium SE * | 68,709 | 1,264,933 |
| Greif, Inc., Class A | 39,284 | 2,540,889 |
| Hecla Mining Co. | 105,810 | 611,582 |
| Ingevity Corp. * | 22,079 | 1,720,175 |
| Koppers Holdings, Inc. * | 27,958 | 981,046 |
| Louisiana-Pacific Corp. | 111,594 | 6,576,234 |
| O-I Glass, Inc. * | 70,445 | 919,307 |
| Rayonier Advanced Materials, Inc. * | 75,632 | 543,038 |
| Schnitzer Steel Industries, Inc., Class A | 41,482 | 2,231,731 |
| Stepan Co. | 8,290 | 994,966 |
| TimkenSteel Corp. * | 61,066 | 851,871 |
| Trinseo plc | 15,770 | 884,066 |
| Tronox Holdings plc, Class A | 25,718 | 599,744 |
| 25,745,879 | ||
48
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Media & Entertainment 3.0% | ||
| Cars.com, Inc. * | 287,687 | 3,745,685 |
| Entravision Communications Corp., Class A | 227,618 | 1,814,116 |
| Gaia, Inc. * | 84,982 | 824,325 |
| Lions Gate Entertainment Corp., Class A * | 110,423 | 1,429,978 |
| QuinStreet, Inc. * | 156,325 | 2,188,550 |
| Sinclair Broadcast Group, Inc., Class A | 51,329 | 1,341,227 |
| TEGNA, Inc. | 89,487 | 1,759,314 |
| World Wrestling Entertainment, Inc., Class A | 22,088 | 1,349,356 |
| Yelp, Inc. * | 31,257 | 1,207,458 |
| Ziff Davis, Inc. * | 35,386 | 4,538,962 |
| 20,198,971 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 14.6% | ||
| Affimed N.V. * | 81,761 | 555,975 |
| Alkermes plc * | 147,972 | 4,482,072 |
| Allogene Therapeutics, Inc. * | 27,520 | 474,445 |
| Amicus Therapeutics, Inc. * | 152,254 | 1,598,667 |
| Amneal Pharmaceuticals, Inc. * | 447,489 | 2,456,715 |
| Apellis Pharmaceuticals, Inc. * | 9,965 | 306,324 |
| Arcus Biosciences, Inc. * | 21,776 | 728,189 |
| Arrowhead Pharmaceuticals, Inc. * | 34,440 | 2,197,961 |
| BioDelivery Sciences International, Inc. * | 475,683 | 1,940,787 |
| Blueprint Medicines Corp. * | 37,136 | 4,177,429 |
| Cara Therapeutics, Inc. * | 69,494 | 1,169,584 |
| CareDx, Inc. * | 28,209 | 1,438,659 |
| Catalyst Pharmaceuticals, Inc. * | 126,055 | 743,725 |
| Chimerix, Inc. * | 52,159 | 273,313 |
| Coherus Biosciences, Inc. * | 18,969 | 317,351 |
| Collegium Pharmaceutical, Inc. * | 50,267 | 986,741 |
| Corcept Therapeutics, Inc. * | 28,710 | 516,780 |
| Cytokinetics, Inc. * | 23,961 | 836,479 |
| Denali Therapeutics, Inc. * | 29,645 | 1,433,336 |
| Dicerna Pharmaceuticals, Inc. * | 34,095 | 709,517 |
| Dynavax Technologies Corp. * | 34,096 | 680,897 |
| Emergent BioSolutions, Inc. * | 71,827 | 3,423,993 |
| Evolus, Inc. * | 87,120 | 681,278 |
| Halozyme Therapeutics, Inc. * | 108,873 | 4,144,795 |
| Harmony Biosciences Holdings, Inc. * | 48,723 | 2,020,543 |
| Harrow Health, Inc. * | 112,385 | 1,133,965 |
| Harvard Bioscience, Inc. * | 111,334 | 838,345 |
| Horizon Therapeutics plc * | 26,224 | 3,144,520 |
| ImmunoGen, Inc. * | 88,879 | 535,940 |
| Innoviva, Inc. * | 116,847 | 2,038,980 |
| Inotiv, Inc. * | 20,201 | 977,526 |
| Insmed, Inc. * | 17,216 | 519,062 |
| Intellia Therapeutics, Inc. * | 2,698 | 358,780 |
| Ironwood Pharmaceuticals, Inc. * | 276,617 | 3,532,399 |
| Jounce Therapeutics, Inc. * | 57,098 | 501,320 |
| Ligand Pharmaceuticals, Inc. * | 16,718 | 2,439,825 |
| MacroGenics, Inc. * | 56,603 | 1,105,457 |
| Medpace Holdings, Inc. * | 32,177 | 7,289,699 |
| MEI Pharma, Inc. * | 452,430 | 1,275,853 |
| MiMedx Group, Inc. * | 91,031 | 623,562 |
| NGM Biopharmaceuticals, Inc. * | 27,808 | 513,614 |
| Novavax, Inc. * | 8,456 | 1,258,507 |
| OPKO Health, Inc. * | 697,748 | 2,644,465 |
| Organogenesis Holdings, Inc. * | 195,993 | 2,152,003 |
| Pacira BioSciences, Inc. * | 46,018 | 2,405,821 |
| Phibro Animal Health Corp., Class A | 49,759 | 1,091,712 |
| Precigen, Inc. * | 79,309 | 383,062 |
| Prestige Consumer Healthcare, Inc. * | 63,753 | 3,824,542 |
| Quanterix Corp. * | 21,539 | 1,090,089 |
| Radius Health, Inc. * | 71,745 | 1,549,692 |
| REGENXBIO, Inc. * | 18,638 | 660,531 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Repligen Corp. * | 4,836 | 1,404,858 |
| Rigel Pharmaceuticals, Inc. * | 407,364 | 1,368,743 |
| Syneos Health, Inc. * | 24,077 | 2,247,347 |
| Travere Therapeutics, Inc. * | 90,793 | 2,615,746 |
| Vanda Pharmaceuticals, Inc. * | 216,646 | 3,708,980 |
| Veracyte, Inc. * | 8,521 | 407,986 |
| Vericel Corp. * | 28,655 | 1,318,703 |
| Vir Biotechnology, Inc. * | 22,878 | 863,187 |
| Xencor, Inc. * | 34,439 | 1,362,407 |
| 97,482,783 | ||
| Real Estate 7.5% | ||
| American Finance Trust, Inc. | 366,779 | 3,036,930 |
| Armada Hoffler Properties, Inc. | 42,709 | 585,540 |
| Bluerock Residential Growth REIT, Inc. (a) | 41,336 | 559,276 |
| BRT Apartments Corp. | 52,369 | 1,042,143 |
| CareTrust REIT, Inc. | 106,766 | 2,215,395 |
| CorePoint Lodging, Inc. * | 80,509 | 1,387,975 |
| Corporate Office Properties Trust | 102,355 | 2,775,868 |
| Easterly Government Properties, Inc. | 40,551 | 852,788 |
| eXp World Holdings, Inc. | 36,362 | 1,876,279 |
| Healthcare Realty Trust, Inc. | 87,501 | 2,892,783 |
| National Health Investors, Inc. | 19,010 | 1,022,358 |
| National Storage Affiliates Trust | 136,457 | 8,523,104 |
| Office Properties Income Trust | 112,499 | 2,882,224 |
| Piedmont Office Realty Trust, Inc., Class A | 380,995 | 6,766,471 |
| PotlatchDeltic Corp. | 53,576 | 2,800,418 |
| PS Business Parks, Inc. | 4,068 | 722,884 |
| RE/MAX Holdings, Inc., Class A | 26,939 | 856,930 |
| Realogy Holdings Corp. * | 158,870 | 2,751,628 |
| Retail Value, Inc. | 26,265 | 164,419 |
| Sabra Health Care REIT, Inc. | 176,749 | 2,500,998 |
| Tanger Factory Outlet Centers, Inc. | 59,248 | 995,366 |
| UMH Properties, Inc. | 54,291 | 1,299,727 |
| Uniti Group, Inc. | 115,959 | 1,659,373 |
| 50,170,877 | ||
| Retailing 3.1% | ||
| 1-800-Flowers.com, Inc., Class A * | 87,445 | 2,808,733 |
| AutoNation, Inc. * | 9,919 | 1,201,389 |
| Caleres, Inc. | 81,189 | 1,872,218 |
| Duluth Holdings, Inc., Class B * | 119,269 | 1,709,125 |
| Group 1 Automotive, Inc. | 10,999 | 1,977,620 |
| Haverty Furniture Cos., Inc. | 17,659 | 506,813 |
| Hibbett, Inc. | 19,466 | 1,507,447 |
| MarineMax, Inc. * | 11,564 | 598,900 |
| OneWater Marine, Inc., Class A | 12,493 | 553,940 |
| Shutterstock, Inc. | 17,050 | 2,065,608 |
| Signet Jewelers Ltd. | 14,868 | 1,325,928 |
| Sleep Number Corp. * | 9,758 | 862,022 |
| The Aaron's Co., Inc. | 19,755 | 462,070 |
| The Buckle, Inc. | 19,762 | 822,494 |
| The Children's Place, Inc. * | 20,686 | 1,714,663 |
| Urban Outfitters, Inc. * | 29,885 | 954,228 |
| 20,943,198 | ||
| Semiconductors & Semiconductor Equipment 3.3% | ||
| Alpha & Omega Semiconductor Ltd. * | 71,153 | 2,465,452 |
| Amkor Technology, Inc. | 58,648 | 1,285,564 |
| Axcelis Technologies, Inc. * | 9,437 | 518,374 |
| Cirrus Logic, Inc. * | 40,132 | 3,243,067 |
| Cohu, Inc. * | 13,375 | 428,535 |
| Diodes, Inc. * | 18,889 | 1,815,044 |
| Kulicke & Soffa Industries, Inc. | 75,046 | 4,277,622 |
49
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| MACOM Technology Solutions Holdings, Inc. * | 15,087 | 1,053,374 |
| MaxLinear, Inc. * | 56,307 | 3,547,341 |
| Ultra Clean Holdings, Inc. * | 75,247 | 3,729,994 |
| 22,364,367 | ||
| Software & Services 8.3% | ||
| A10 Networks, Inc. * | 211,016 | 3,943,889 |
| Agilysys, Inc. * | 34,789 | 1,660,131 |
| Avaya Holdings Corp. * | 63,864 | 1,189,148 |
| BM Technologies, Inc. *(a)(b) | 13,582 | 117,438 |
| Box, Inc., Class A * | 180,460 | 4,661,282 |
| Brightcove, Inc. * | 70,541 | 699,767 |
| ChannelAdvisor Corp. * | 74,501 | 1,900,520 |
| CommVault Systems, Inc. * | 96,939 | 5,961,748 |
| Conduent, Inc. * | 389,833 | 2,631,373 |
| Consensus Cloud Solutions, Inc. * | 11,795 | 746,977 |
| Domo, Inc., Class B * | 63,522 | 5,612,169 |
| eGain Corp. * | 193,849 | 2,000,522 |
| EVERTEC, Inc. | 100,817 | 4,557,937 |
| Mimecast Ltd. * | 44,527 | 3,359,117 |
| Progress Software Corp. | 81,093 | 4,168,991 |
| Tenable Holdings, Inc. * | 126,797 | 6,751,940 |
| Unisys Corp. * | 81,176 | 2,075,670 |
| Vonage Holdings Corp. * | 33,525 | 540,423 |
| Workiva, Inc. * | 17,508 | 2,618,321 |
| 55,197,363 | ||
| Technology Hardware & Equipment 2.6% | ||
| Advanced Energy Industries, Inc. | 22,151 | 2,033,905 |
| Avid Technology, Inc. * | 57,441 | 1,645,110 |
| Calix, Inc. * | 13,042 | 816,299 |
| Cambium Networks Corp. * | 37,495 | 1,058,109 |
| Casa Systems, Inc. * | 148,234 | 938,321 |
| CommScope Holding Co., Inc. * | 103,478 | 1,108,250 |
| Extreme Networks, Inc. * | 581,918 | 5,720,254 |
| Plantronics, Inc. * | 18,449 | 493,695 |
| Vishay Intertechnology, Inc. | 178,859 | 3,437,670 |
| 17,251,613 | ||
| Telecommunication Services 0.7% | ||
| Cogent Communications Holdings, Inc. | 35,254 | 2,700,104 |
| Ooma, Inc. * | 85,864 | 1,983,458 |
| 4,683,562 | ||
| Transportation 1.2% | ||
| ArcBest Corp. | 28,024 | 2,517,956 |
| Atlas Air Worldwide Holdings, Inc. * | 20,546 | 1,666,692 |
| Matson, Inc. | 35,092 | 2,922,462 |
| Mesa Air Group, Inc. * | 56,283 | 424,374 |
| Radiant Logistics, Inc. * | 74,751 | 503,074 |
| Universal Logistics Holdings, Inc. | 9,998 | 210,758 |
| 8,245,316 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Utilities 1.0% | ||
| Avista Corp. | 15,008 | 597,468 |
| Clearway Energy, Inc., Class A | 28,909 | 953,708 |
| Consolidated Water Co., Ltd. (a) | 35,962 | 399,538 |
| Genie Energy Ltd., Class B | 105,308 | 521,274 |
| Northwest Natural Holding Co. | 12,611 | 568,630 |
| Portland General Electric Co. | 43,164 | 2,128,417 |
| Via Renewables, Inc. | 154,172 | 1,719,018 |
| 6,888,053 | ||
| Total Common Stocks (Cost $530,512,213) | 664,585,880 | |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.2% OF NET ASSETS | ||
| Money Market Funds 0.3% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 2,088,991 | 2,088,991 |
| Time Deposits 0.9% | ||
| Sumitomo Mitsui Banking Corp. | ||
| 0.01%, 11/01/21 (e) | 5,977,707 | 5,977,707 |
| Total Short-Term Investments (Cost $8,066,698) | 8,066,698 | |
| Total Investments in Securities (Cost $538,578,911) | 672,652,578 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| Russell 2000 Index, e-mini, expires 12/17/21 | 35 | 4,016,775 | 87,707 |
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $2,030,171. |
| (b) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the 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. |
| REIT — | Real Estate Investment Trust |
50
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $609,388,517 | $— | $— | $609,388,517 |
| Software & Services | 55,079,925 | — | 117,438 | 55,197,363 |
| Short-Term Investments1 | 2,088,991 | — | — | 2,088,991 |
| Time Deposits | — | 5,977,707 | — | 5,977,707 |
| Futures Contracts2 | 87,707 | — | — | 87,707 |
| Total | $666,645,140 | $5,977,707 | $117,438 | $672,740,285 |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
51
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Small-Cap Equity Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $538,578,911) including securities on loan of $2,030,171 | $672,652,578 | |
| Deposit with broker for futures contracts | 390,000 | |
| Receivables: | ||
| Investments sold | 1,975,025 | |
| Dividends | 156,740 | |
| Fund shares sold | 45,657 | |
| Income from securities on loan | 4,718 | |
| Prepaid expenses | + | 17,691 |
| Total assets | 675,242,409 | |
| Liabilities | ||
| Collateral held for securities on loan | 2,088,991 | |
| Payables: | ||
| Investments bought | 1,518,010 | |
| Fund shares redeemed | 1,448,578 | |
| Investment adviser and administrator fees | 456,298 | |
| Shareholder service fees | 138,437 | |
| Variation margin on futures contracts | 480 | |
| Accrued expenses | + | 102,398 |
| Total liabilities | 5,753,192 | |
| Net assets | $669,489,217 | |
| Net Assets by Source | ||
| Capital received from investors | $462,649,574 | |
| Total distributable earnings | + | 206,839,643 |
| Net assets | $669,489,217 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $669,489,217 | 28,163,463 | $23.77 | ||
52
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Small-Cap Equity Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $11,286) | $7,392,196 | |
| Interest received from securities - unaffiliated | 313 | |
| Securities on loan, net | + | 106,284 |
| Total investment income | 7,498,793 | |
| Expenses | ||
| Investment adviser and administrator fees | 5,098,257 | |
| Shareholder service fees | 1,548,106 | |
| Portfolio accounting fees | 56,004 | |
| Professional fees | 34,614 | |
| Registration fees | 27,719 | |
| Shareholder reports | 24,803 | |
| Custodian fees | 18,096 | |
| Independent trustees’ fees | 9,001 | |
| Transfer agent fees | 3,443 | |
| Other expenses | + | 8,057 |
| Total expenses | 6,828,100 | |
| Expense reduction by investment adviser and its affiliates | – | 3,443 |
| Net expenses | – | 6,824,657 |
| Net investment income | 674,136 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 163,487,432 | |
| Net realized losses on futures contracts | + | (76,685) |
| Net realized gains | 163,410,747 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 107,470,827 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 87,707 |
| Net change in unrealized appreciation (depreciation) | + | 107,558,534 |
| Net realized and unrealized gains | 270,969,281 | |
| Increase in net assets resulting from operations | $271,643,417 | |
53
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Small-Cap Equity Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $674,136 | $844,059 | |
| Net realized gains (losses) | 163,410,747 | (48,940,704) | |
| Net change in unrealized appreciation (depreciation) | + | 107,558,534 | (5,706,272) |
| Increase (decrease) in net assets from operations | $271,643,417 | ($53,802,917) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($1,114,839) | ($635,564) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 2,049,026 | $42,785,760 | 5,747,653 | $80,000,238 | |
| Shares reinvested | 44,417 | 820,369 | 28,552 | 496,524 | |
| Shares redeemed | + | (6,658,460) | (136,123,410) | (7,764,392) | (113,723,120) |
| Net transactions in fund shares | (4,565,017) | ($92,517,281) | (1,988,187) | ($33,226,358) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 32,728,480 | $491,477,920 | 34,716,667 | $579,142,759 | |
| Total increase (decrease) | + | (4,565,017) | 178,011,297 | (1,988,187) | (87,664,839) |
| End of period | 28,163,463 | $669,489,217 | 32,728,480 | $491,477,920 | |
54
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Health Care Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $26.27 | $25.08 | $25.85 | $25.44 | $21.56 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.21 | 0.26 | 0.26 | 0.23 | 0.21 | |
| Net realized and unrealized gains (losses) | 7.09 | 2.11 | 1.27 | 1.96 | 4.24 | |
| Total from investment operations | 7.30 | 2.37 | 1.53 | 2.19 | 4.45 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.23) | (0.29) | (0.24) | (0.24) | (0.20) | |
| Distributions from net realized gains | (2.76) | (0.89) | (2.06) | (1.54) | (0.37) | |
| Total distributions | (2.99) | (1.18) | (2.30) | (1.78) | (0.57) | |
| Net asset value at end of period | $30.58 | $26.27 | $25.08 | $25.85 | $25.44 | |
| Total return | 30.02% | 9.57% | 6.51% | 9.13% | 21.10% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses | 0.80% | 0.80% | 0.80% | 0.80% | 0.81% | |
| Gross operating expenses | 0.80% | 0.80% | 0.80% | 0.80% | 0.81% | |
| Net investment income (loss) | 0.76% | 1.01% | 1.05% | 0.91% | 0.89% | |
| Portfolio turnover rate | 70% | 73% | 45% | 45% | 42% | |
| Net assets, end of period (x 1,000,000) | $902 | $746 | $779 | $826 | $853 | |
| 1 | Calculated based on the average shares outstanding during the period. |
55
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Health Care Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.6% OF NET ASSETS | ||
| Australia 0.5% | ||
| CSL Ltd. | 6,115 | 1,391,409 |
| Sonic Healthcare Ltd. | 100,690 | 3,055,385 |
| 4,446,794 | ||
| Denmark 1.4% | ||
| Demant A/S * | 21,322 | 1,033,647 |
| Genmab A/S * | 9,832 | 4,417,040 |
| Novo Nordisk A/S, Class B | 64,781 | 7,103,551 |
| 12,554,238 | ||
| France 1.1% | ||
| Ipsen S.A. | 49,824 | 5,156,478 |
| Sanofi | 50,514 | 5,073,834 |
| 10,230,312 | ||
| Germany 0.9% | ||
| Merck KGaA | 35,967 | 8,499,892 |
| Ireland 2.8% | ||
| Alkermes plc * | 160,300 | 4,855,487 |
| Medtronic plc | 169,774 | 20,349,112 |
| 25,204,599 | ||
| Italy 0.1% | ||
| Amplifon S.p.A. | 13,358 | 679,765 |
| Japan 2.9% | ||
| Astellas Pharma, Inc. | 368,100 | 6,205,713 |
| Hoya Corp. | 93,800 | 13,808,154 |
| Olympus Corp. | 125,400 | 2,716,545 |
| Takara Bio, Inc. | 140,700 | 3,671,829 |
| 26,402,241 | ||
| Luxembourg 0.2% | ||
| Eurofins Scientific SE | 12,536 | 1,479,435 |
| Republic of Korea 0.2% | ||
| Osstem Implant Co., Ltd. | 19,116 | 2,026,322 |
| Sweden 2.4% | ||
| Arjo AB, B Shares | 175,770 | 2,397,021 |
| Getinge AB, B Shares | 375,544 | 16,806,286 |
| Vitrolife AB | 40,115 | 2,610,802 |
| 21,814,109 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Switzerland 4.7% | ||
| Lonza Group AG | 6,020 | 4,947,239 |
| Novartis AG | 221,101 | 18,287,861 |
| Roche Holding AG | 41,458 | 16,060,579 |
| Sonova Holding AG | 4,384 | 1,816,605 |
| Straumann Holding AG | 500 | 1,040,848 |
| 42,153,132 | ||
| Taiwan 0.2% | ||
| Pegavision Corp. | 109,000 | 2,139,968 |
| United Kingdom 1.3% | ||
| AstraZeneca plc | 82,802 | 10,358,638 |
| Oxford Biomedica plc * | 42,456 | 884,331 |
| 11,242,969 | ||
| United States 80.9% | ||
| Abbott Laboratories | 296,471 | 38,212,147 |
| AbbVie, Inc. | 279,336 | 32,031,459 |
| Agilent Technologies, Inc. | 121,148 | 19,079,599 |
| Amedisys, Inc. * | 21,130 | 3,578,154 |
| Amgen, Inc. | 99,953 | 20,687,272 |
| Anthem, Inc. | 19,239 | 8,371,466 |
| Avantor, Inc. * | 251,010 | 10,135,784 |
| Avid Bioservices, Inc. * | 33,774 | 1,036,186 |
| Baxter International, Inc. | 12,100 | 955,416 |
| Biogen, Inc. * | 20,909 | 5,576,012 |
| BioMarin Pharmaceutical, Inc. * | 21,505 | 1,703,841 |
| Bio-Techne Corp. | 10,049 | 5,262,159 |
| Boston Scientific Corp. * | 143,812 | 6,202,612 |
| Bristol-Myers Squibb Co. | 455,969 | 26,628,590 |
| Cerner Corp. | 72,950 | 5,419,456 |
| Chemed Corp. | 7,971 | 3,844,015 |
| Cigna Corp. | 36,492 | 7,795,056 |
| CONMED Corp. | 14,801 | 2,165,090 |
| CVS Health Corp. | 151,255 | 13,504,046 |
| Danaher Corp. | 73,420 | 22,890,153 |
| DaVita, Inc. * | 118,647 | 12,249,116 |
| Dentsply Sirona, Inc. | 59,065 | 3,379,109 |
| Eli Lilly & Co. | 128,221 | 32,665,582 |
| Gilead Sciences, Inc. | 309,480 | 20,079,062 |
| Globus Medical, Inc., Class A * | 60,697 | 4,683,988 |
| Halozyme Therapeutics, Inc. * | 167,092 | 6,361,192 |
| Harmony Biosciences Holdings, Inc. * | 55,723 | 2,310,833 |
| HCA Healthcare, Inc. | 8,318 | 2,083,326 |
| Hologic, Inc. * | 46,232 | 3,389,268 |
| IDEXX Laboratories, Inc. * | 23,153 | 15,423,139 |
| Illumina, Inc. * | 16,209 | 6,727,708 |
| Incyte Corp. * | 38,027 | 2,547,049 |
| Innoviva, Inc. * | 21,000 | 366,450 |
| Intellia Therapeutics, Inc. * | 6,329 | 841,630 |
| Intuitive Surgical, Inc. * | 36,672 | 13,243,359 |
| IQVIA Holdings, Inc. * | 35,404 | 9,255,314 |
| Ironwood Pharmaceuticals, Inc. * | 65,758 | 839,730 |
56
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Health Care Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Johnson & Johnson | 378,822 | 61,702,527 |
| Laboratory Corp. of America Holdings * | 9,324 | 2,676,175 |
| McKesson Corp. | 34,714 | 7,216,346 |
| Medpace Holdings, Inc. * | 22,801 | 5,165,567 |
| Merck & Co., Inc. | 337,452 | 29,712,649 |
| Meridian Bioscience, Inc. * | 73,739 | 1,387,031 |
| Mettler-Toledo International, Inc. * | 6,253 | 9,259,943 |
| Moderna, Inc. * | 48,391 | 16,705,057 |
| Molina Healthcare, Inc. * | 40,110 | 11,861,329 |
| Organogenesis Holdings, Inc. * | 97,449 | 1,069,990 |
| Pfizer, Inc. | 934,456 | 40,873,105 |
| Prestige Consumer Healthcare, Inc. * | 57,348 | 3,440,307 |
| Quest Diagnostics, Inc. | 5,895 | 865,268 |
| Regeneron Pharmaceuticals, Inc. * | 34,078 | 21,807,875 |
| ResMed, Inc. | 34,221 | 8,997,043 |
| Shockwave Medical, Inc. * | 10,039 | 2,145,334 |
| Stryker Corp. | 27,166 | 7,228,058 |
| Tenet Healthcare Corp. * | 33,838 | 2,424,831 |
| Thermo Fisher Scientific, Inc. | 54,469 | 34,482,690 |
| United Therapeutics Corp. * | 8,056 | 1,536,763 |
| UnitedHealth Group, Inc. | 110,235 | 50,759,910 |
| Vanda Pharmaceuticals, Inc. * | 64,287 | 1,100,593 |
| Veeva Systems, Inc., Class A * | 5,493 | 1,741,336 |
| Vertex Pharmaceuticals, Inc. * | 39,825 | 7,364,837 |
| Waters Corp. * | 19,257 | 7,077,910 |
| West Pharmaceutical Services, Inc. | 3,182 | 1,367,878 |
| Zoetis, Inc. | 83,733 | 18,103,075 |
| 729,597,795 | ||
| Total Common Stocks (Cost $564,211,774) | 898,471,571 | |
| ISSUER | FACE AMOUNT | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.2% OF NET ASSETS | ||
| Time Deposits 0.2% | ||
| BNP Paribas SA | ||
| Swiss Franc | ||
| (1.41%), 11/01/21 (a)(b) | 820,033 | 895,623 |
| Brown Brothers Harriman & Co. | ||
| Australian Dollar | ||
| (0.21%), 11/01/21 (a)(b) | 1,068,150 | 803,516 |
| Hong Kong Dollar | ||
| 0.00%, 11/01/21 (a) | 298,560 | 38,373 |
| New Zealand Dollar | ||
| 0.20%, 11/01/21 (a) | 5 | 4 |
| Sumitomo Mitsui Banking Corp. | ||
| Japanese Yen | ||
| (0.28%), 11/01/21 (a)(b) | 560 | 5 |
| 1,737,521 | ||
| Total Short-Term Investments (Cost $1,737,521) | 1,737,521 | |
| Total Investments in Securities (Cost $565,949,295) | 900,209,092 | |
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. Face amount is disclosed in local currency. |
| (b) | Rate is negative due to the current daily overnight rate at the central bank of the denominated currency and therefore is non-income producing. |
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $754,802,394 | $— | $— | $754,802,394 |
| Australia | — | 4,446,794 | — | 4,446,794 |
| Denmark | — | 12,554,238 | — | 12,554,238 |
| France | — | 10,230,312 | — | 10,230,312 |
| Germany | — | 8,499,892 | — | 8,499,892 |
| Italy | — | 679,765 | — | 679,765 |
| Japan | — | 26,402,241 | — | 26,402,241 |
| Luxembourg | — | 1,479,435 | — | 1,479,435 |
| Republic of Korea | — | 2,026,322 | — | 2,026,322 |
| Sweden | — | 21,814,109 | — | 21,814,109 |
| Switzerland | — | 42,153,132 | — | 42,153,132 |
| Taiwan | — | 2,139,968 | — | 2,139,968 |
| United Kingdom | 884,331 | 10,358,638 | — | 11,242,969 |
| Short-Term Investments1 | — | 1,737,521 | — | 1,737,521 |
| Total | $755,686,725 | $144,522,367 | $— | $900,209,092 |
| 1 | As categorized in the Portfolio Holdings. |
57
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Health Care Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $565,949,295) | $900,209,092 | |
| Foreign currency, at value (cost $62,734) | 64,185 | |
| Deposit with broker for futures contracts | 242,000 | |
| Receivables: | ||
| Investments sold | 3,870,261 | |
| Foreign tax reclaims | 1,058,324 | |
| Dividends | 917,348 | |
| Fund shares sold | 256,179 | |
| Prepaid expenses | + | 16,302 |
| Total assets | 906,633,691 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 2,680,267 | |
| Due to custodian | 1,514,151 | |
| Investment adviser and administrator fees | 392,824 | |
| Shareholder service fees | 173,326 | |
| Fund shares redeemed | 86,351 | |
| Accrued expenses | + | 149,611 |
| Total liabilities | 4,996,530 | |
| Net assets | $901,637,161 | |
| Net Assets by Source | ||
| Capital received from investors | $463,737,551 | |
| Total distributable earnings | + | 437,899,610 |
| Net assets | $901,637,161 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $901,637,161 | 29,483,860 | $30.58 | ||
58
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Health Care Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $317,014) | $13,079,949 | |
| Securities on loan, net | + | 3,892 |
| Total investment income | 13,083,841 | |
| Expenses | ||
| Investment adviser and administrator fees | 4,432,806 | |
| Shareholder service fees | 1,971,649 | |
| Portfolio accounting fees | 109,856 | |
| Custodian fees | 45,395 | |
| Shareholder reports | 39,432 | |
| Registration fees | 36,601 | |
| Professional fees | 32,388 | |
| Independent trustees’ fees | 9,701 | |
| Transfer agent fees | 7,794 | |
| Other expenses | + | 20,252 |
| Total expenses | 6,705,874 | |
| Expense reduction by investment adviser and its affiliates | – | 7,794 |
| Net expenses | – | 6,698,080 |
| Net investment income | 6,385,761 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 98,293,645 | |
| Net realized gains on futures contracts | 544,779 | |
| Net realized losses on foreign currency transactions | + | (11,068) |
| Net realized gains | 98,827,356 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 109,560,673 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (29,098) |
| Net change in unrealized appreciation (depreciation) | + | 109,531,575 |
| Net realized and unrealized gains | 208,358,931 | |
| Increase in net assets resulting from operations | $214,744,692 | |
59
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Health Care Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $6,385,761 | $7,768,310 | |
| Net realized gains | 98,827,356 | 77,524,618 | |
| Net change in unrealized appreciation (depreciation) | + | 109,531,575 | (16,756,841) |
| Increase in net assets from operations | $214,744,692 | $68,536,087 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($84,424,068) | ($35,647,551) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 2,830,876 | $80,007,562 | 2,950,067 | $75,727,246 | |
| Shares reinvested | 2,869,075 | 73,390,942 | 1,220,267 | 31,165,636 | |
| Shares redeemed | + | (4,601,633) | (127,787,260) | (6,832,001) | (172,829,403) |
| Net transactions in fund shares | 1,098,318 | $25,611,244 | (2,661,667) | ($65,936,521) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 28,385,542 | $745,705,293 | 31,047,209 | $778,753,278 | |
| Total increase (decrease) | + | 1,098,318 | 155,931,868 | (2,661,667) | (33,047,985) |
| End of period | 29,483,860 | $901,637,161 | 28,385,542 | $745,705,293 | |
60
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab International Core Equity Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $9.11 | $10.04 | $9.64 | $11.27 | $9.20 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.21 | 0.14 | 0.24 | 0.24 | 0.22 | |
| Net realized and unrealized gains (losses) | 2.34 | (0.71) | 0.41 | (1.58) | 2.08 | |
| Total from investment operations | 2.55 | (0.57) | 0.65 | (1.34) | 2.30 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.11) | (0.36) | (0.25) | (0.26) | (0.23) | |
| Distributions from net realized gains | — | — | — | (0.03) | — | |
| Total distributions | (0.11) | (0.36) | (0.25) | (0.29) | (0.23) | |
| Net asset value at end of period | $11.55 | $9.11 | $10.04 | $9.64 | $11.27 | |
| Total return | 28.12% | (6.01%) | 7.08% | (12.18%) | 25.58% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses | 0.86% | 0.86% | 0.86% | 0.86% | 0.86% | |
| Gross operating expenses | 0.86% | 0.88% | 0.87% | 0.89% | 0.90% | |
| Net investment income (loss) | 1.93% | 1.51% | 2.44% | 2.22% | 2.15% | |
| Portfolio turnover rate | 103% | 97% | 91% | 98% | 85% | |
| Net assets, end of period (x 1,000,000) | $693 | $664 | $976 | $1,166 | $1,227 | |
| 1 | Calculated based on the average shares outstanding during the period. |
61
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab International Core Equity Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.1% OF NET ASSETS | ||
| Australia 6.1% | ||
| Australia & New Zealand Banking Group Ltd. | 203,198 | 4,324,149 |
| BHP Group Ltd. | 144,043 | 3,956,426 |
| Coles Group Ltd. | 225,948 | 2,928,055 |
| James Hardie Industries plc | 177,361 | 6,967,840 |
| National Australia Bank Ltd. | 557,020 | 12,110,715 |
| Rio Tinto Ltd. | 95,755 | 6,560,437 |
| Sonic Healthcare Ltd. | 107,058 | 3,248,618 |
| Suncorp Group Ltd. | 256,744 | 2,271,887 |
| 42,368,127 | ||
| Austria 1.4% | ||
| Raiffeisen Bank International AG | 180,255 | 5,267,037 |
| Wienerberger AG | 132,505 | 4,690,753 |
| 9,957,790 | ||
| Belgium 0.2% | ||
| Bekaert S.A. | 37,603 | 1,647,076 |
| Brazil 0.6% | ||
| JBS S.A. | 550,600 | 3,809,655 |
| Canada 2.0% | ||
| Artis Real Estate Investment Trust | 187,100 | 1,771,826 |
| CGI, Inc. * | 38,509 | 3,440,171 |
| Constellation Software, Inc. | 2,287 | 4,019,233 |
| Manulife Financial Corp. | 93,629 | 1,824,010 |
| Open Text Corp. | 25,100 | 1,264,329 |
| The Bank of Nova Scotia | 21,450 | 1,406,313 |
| 13,725,882 | ||
| China 0.1% | ||
| Bank of Communications Co., Ltd., H Shares | 1,499,000 | 891,729 |
| Denmark 4.4% | ||
| AP Moller - Maersk A/S, Series B | 847 | 2,454,562 |
| Carlsberg A/S, Class B | 32,830 | 5,420,751 |
| Genmab A/S * | 1,830 | 822,130 |
| Novo Nordisk A/S, Class B | 184,786 | 20,262,683 |
| Royal Unibrew A/S | 10,984 | 1,364,491 |
| 30,324,617 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Finland 1.7% | ||
| Fortum Oyj | 175,012 | 5,204,868 |
| Nordea Bank Abp | 432,632 | 5,298,365 |
| Uponor Oyj | 51,493 | 1,257,786 |
| 11,761,019 | ||
| France 12.7% | ||
| Air Liquide S.A. | 8,611 | 1,437,673 |
| Capgemini SE | 13,025 | 3,036,946 |
| Carrefour S.A. | 182,567 | 3,305,167 |
| Cie de Saint-Gobain | 179,300 | 12,373,947 |
| Credit Agricole S.A. | 654,826 | 9,879,334 |
| Electricite de France S.A. | 352,236 | 5,191,237 |
| ICADE | 17,199 | 1,348,778 |
| Ipsen S.A. | 22,009 | 2,277,796 |
| La Francaise des Jeux SAEM | 68,672 | 3,565,822 |
| L'Oreal S.A. | 35,488 | 16,234,153 |
| LVMH Moet Hennessy Louis Vuitton SE | 25,676 | 20,133,103 |
| Pernod-Ricard S.A. | 7,950 | 1,828,978 |
| Schneider Electric SE | 13,001 | 2,241,607 |
| TotalEnergies SE | 102,245 | 5,119,913 |
| 87,974,454 | ||
| Germany 9.9% | ||
| adidas AG | 11,865 | 3,883,429 |
| Bayerische Motoren Werke AG | 51,767 | 5,230,331 |
| Brenntag SE | 61,524 | 5,853,286 |
| Daimler AG | 148,397 | 14,730,245 |
| Deutsche Post AG | 224,231 | 13,881,463 |
| Deutsche Telekom AG | 322,461 | 5,996,856 |
| E.ON SE | 54,923 | 696,413 |
| Merck KGaA | 49,283 | 11,646,792 |
| ProSiebenSat.1 Media SE | 281,594 | 4,716,907 |
| Wacker Chemie AG | 12,423 | 2,244,921 |
| 68,880,643 | ||
| Greece 0.3% | ||
| Hellenic Telecommunications Organization S.A. | 123,128 | 2,185,991 |
| Hong Kong 0.7% | ||
| China Construction Bank Corp., H Shares | 3,039,000 | 2,068,285 |
| CK Asset Holdings Ltd. | 425,000 | 2,625,248 |
| 4,693,533 | ||
| Italy 1.2% | ||
| Assicurazioni Generali S.p.A. | 79,869 | 1,739,163 |
| CNH Industrial N.V. | 118,799 | 2,046,379 |
| Eni S.p.A. | 333,454 | 4,779,210 |
| 8,564,752 | ||
62
Schwab Active Equity Funds | Annual Report
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Schwab International Core Equity Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Japan 21.0% | ||
| Astellas Pharma, Inc. | 171,800 | 2,896,336 |
| Bridgestone Corp. | 55,000 | 2,433,161 |
| Capcom Co., Ltd. | 87,700 | 2,360,481 |
| Credit Saison Co., Ltd. | 220,000 | 2,697,138 |
| CyberAgent, Inc. | 138,700 | 2,323,994 |
| Dai-ichi Life Holdings, Inc. | 264,500 | 5,564,697 |
| Fuji Corp. | 239,700 | 5,591,256 |
| Fujitsu Ltd. | 37,000 | 6,394,697 |
| Hitachi Ltd. | 132,000 | 7,606,439 |
| Hitachi Transport System Ltd. | 53,900 | 2,123,454 |
| Honda Motor Co., Ltd. | 70,400 | 2,082,282 |
| Hoya Corp. | 87,103 | 12,822,299 |
| Iida Group Holdings Co., Ltd. | 257,800 | 6,355,929 |
| Japan Tobacco, Inc. | 341,782 | 6,709,581 |
| KDDI Corp. | 149,400 | 4,568,649 |
| Kintetsu World Express, Inc. | 47,500 | 1,140,790 |
| Macnica Fuji Electronics Holdings, Inc. | 54,800 | 1,288,329 |
| Minebea Mitsumi, Inc. | 137,500 | 3,481,091 |
| Mitsubishi Electric Corp. | 292,000 | 3,921,394 |
| Nintendo Co., Ltd. | 18,100 | 7,993,991 |
| Nippon Building Fund, Inc. | 200 | 1,299,389 |
| Nippon Express Co., Ltd. | 43,000 | 2,691,562 |
| Nippon Gas Co., Ltd. | 67,000 | 831,041 |
| NIPPON REIT Investment Corp. | 894 | 3,436,722 |
| Oisix ra daichi, Inc. * | 41,500 | 1,738,172 |
| ORIX Corp. | 562,200 | 11,174,450 |
| Osaka Gas Co., Ltd. | 163,000 | 2,627,230 |
| Panasonic Corp. | 271,000 | 3,351,192 |
| Recruit Holdings Co., Ltd. | 53,700 | 3,572,070 |
| SCREEN Holdings Co., Ltd. | 61,000 | 5,669,903 |
| Senko Group Holdings Co., Ltd. | 145,000 | 1,289,722 |
| Seria Co., Ltd. | 53,400 | 1,762,930 |
| Sumitomo Mitsui Financial Group, Inc. | 80,000 | 2,595,971 |
| Tokyo Electron Ltd. | 8,000 | 3,728,263 |
| Tokyotokeiba Co., Ltd. | 59,800 | 2,369,367 |
| Yamaha Motor Co., Ltd. | 38,300 | 1,067,567 |
| ZOZO, Inc. | 194,000 | 6,227,118 |
| 145,788,657 | ||
| Netherlands 5.7% | ||
| Adyen N.V. * | 483 | 1,457,360 |
| ASML Holding N.V. | 17,338 | 14,094,053 |
| Koninklijke Ahold Delhaize N.V. | 382,969 | 12,458,921 |
| NN Group N.V. | 119,961 | 6,412,727 |
| OCI N.V. * | 61,686 | 1,748,706 |
| Wolters Kluwer N.V. | 32,044 | 3,355,597 |
| 39,527,364 | ||
| Norway 0.9% | ||
| Aker BP A.S.A. | 43,375 | 1,664,382 |
| DNO A.S.A. * | 447,027 | 651,839 |
| Equinor A.S.A. | 151,027 | 3,826,772 |
| 6,142,993 | ||
| Republic of Korea 2.4% | ||
| Osstem Implant Co., Ltd. | 22,868 | 2,424,039 |
| Samsung Electro-Mechanics Co., Ltd. | 27,238 | 3,709,455 |
| Samsung Electronics Co., Ltd. | 134,488 | 8,052,215 |
| Samsung SDI Co., Ltd. | 3,344 | 2,109,823 |
| 16,295,532 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Spain 1.2% | ||
| Banco Santander S.A. | 1,341,029 | 5,086,634 |
| Iberdrola S.A. | 117,500 | 1,387,503 |
| Telefonica S.A. | 368,013 | 1,598,523 |
| 8,072,660 | ||
| Sweden 2.2% | ||
| Axfood AB | 73,743 | 1,808,042 |
| Getinge AB, B Shares | 72,995 | 3,266,661 |
| Intrum AB | 44,977 | 1,276,649 |
| Lundin Energy AB | 119,000 | 4,699,716 |
| Sandvik AB | 152,704 | 3,872,376 |
| 14,923,444 | ||
| Switzerland 9.6% | ||
| Cie Financiere Richemont S.A. | 13,763 | 1,703,176 |
| Geberit AG | 10,412 | 8,131,278 |
| Nestle S.A. | 18,331 | 2,417,991 |
| Novartis AG | 208,607 | 17,254,449 |
| Roche Holding AG | 53,607 | 20,767,028 |
| UBS Group AG | 893,500 | 16,264,093 |
| 66,538,015 | ||
| Taiwan 0.9% | ||
| MediaTek, Inc. | 120,000 | 3,949,522 |
| Realtek Semiconductor Corp. | 128,000 | 2,302,417 |
| 6,251,939 | ||
| United Kingdom 13.9% | ||
| 888 Holdings plc | 270,369 | 1,416,412 |
| Anglo American plc | 82,605 | 3,142,544 |
| Ashtead Group plc | 57,677 | 4,833,917 |
| AstraZeneca plc | 29,030 | 3,631,691 |
| Barclays plc | 3,831,940 | 10,574,135 |
| BHP Group plc | 299,209 | 7,902,580 |
| Coca-Cola HBC AG * | 65,487 | 2,269,792 |
| Entain plc * | 287,435 | 8,054,255 |
| Ferguson plc | 44,404 | 6,681,178 |
| Greggs plc | 170,150 | 7,111,748 |
| Howden Joinery Group plc | 285,840 | 3,598,223 |
| IG Group Holdings plc | 431,421 | 4,684,995 |
| Imperial Brands plc | 233,022 | 4,917,037 |
| Kainos Group plc | 52,818 | 1,431,225 |
| Man Group plc | 698,448 | 2,224,290 |
| Rio Tinto plc | 38,742 | 2,415,620 |
| Royal Dutch Shell plc, A Shares | 504,768 | 11,563,667 |
| Royal Mail plc | 521,002 | 3,003,483 |
| Safestore Holdings plc | 296,661 | 4,880,067 |
| WPP plc | 144,835 | 2,093,557 |
| 96,430,416 | ||
| Total Common Stocks (Cost $565,005,929) | 686,756,288 | |
63
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab International Core Equity Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBEROF SHARES | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.4% OF NET ASSETS | ||
| Money Market Funds 0.4% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (a) | 2,602,275 | 2,602,274 |
| Total Short-Term Investments (Cost $2,602,274) | 2,602,274 | |
| Total Investments in Securities (Cost $567,608,203) | 689,358,562 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| REIT — | Real Estate Investment Trust |
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $— | $564,717,675 | $— | $564,717,675 |
| Brazil | 3,809,655 | — | — | 3,809,655 |
| Canada | 13,725,882 | — | — | 13,725,882 |
| Spain | 1,387,503 | 6,685,157 | — | 8,072,660 |
| United Kingdom | 14,636,989 | 81,793,427 | — | 96,430,416 |
| Short-Term Investments1 | 2,602,274 | — | — | 2,602,274 |
| Total | $36,162,303 | $653,196,259 | $— | $689,358,562 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
64
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab International Core Equity Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $567,608,203) | $689,358,562 | |
| Foreign currency, at value (cost $2,686,167) | 2,684,944 | |
| Deposit with broker for futures contracts | 427,680 | |
| Receivables: | ||
| Foreign tax reclaims | 1,359,415 | |
| Dividends | 1,228,656 | |
| Fund shares sold | 38,637 | |
| Prepaid expenses | + | 12,722 |
| Total assets | 695,110,616 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 1,589,962 | |
| Investment adviser and administrator fees | 343,419 | |
| Fund shares redeemed | 178,221 | |
| Shareholder service fees | 135,617 | |
| Accrued expenses | + | 244,279 |
| Total liabilities | 2,491,498 | |
| Net assets | $692,619,118 | |
| Net Assets by Source | ||
| Capital received from investors | $630,843,260 | |
| Total distributable earnings | + | 61,775,858 |
| Net assets | $692,619,118 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $692,619,118 | 59,946,240 | $11.55 | ||
65
Schwab Active Equity Funds | Annual Report
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Schwab International Core Equity Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $2,262,155) | $19,799,257 | |
| Securities on loan, net | + | 153,807 |
| Total investment income | 19,953,064 | |
| Expenses | ||
| Investment adviser and administrator fees | 4,140,272 | |
| Shareholder service fees | 1,746,431 | |
| Portfolio accounting fees | 109,850 | |
| Professional fees | 58,111* | |
| Custodian fees | 31,010 | |
| Registration fees | 29,806 | |
| Shareholder reports | 28,623 | |
| Transfer agent fees | 10,667 | |
| Independent trustees’ fees | 9,335 | |
| Other expenses | + | 22,781 |
| Total expenses | 6,186,886 | |
| Expense reduction by investment adviser and its affiliates | – | 45,679* |
| Net expenses | – | 6,141,207 |
| Net investment income | 13,811,857 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 108,568,600 | |
| Net realized losses on futures contracts | (89,058) | |
| Net realized gains on foreign currency transactions | + | 114,071 |
| Net realized gains | 108,593,613 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 55,510,525 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (82,549) |
| Net change in unrealized appreciation (depreciation) | + | 55,427,976 |
| Net realized and unrealized gains | 164,021,589 | |
| Increase in net assets resulting from operations | $177,833,446 | |
| * | Includes professional fees of $18,586 associated with the filing of tax claims in the European Union deemed to be non-routine expenses of the fund. See financial notes 2(d) and 4 for additional information. |
66
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab International Core Equity Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $13,811,857 | $11,945,149 | |
| Net realized gains (losses) | 108,593,613 | (49,478,718) | |
| Net change in unrealized appreciation (depreciation) | + | 55,427,976 | (22,678,303) |
| Increase (decrease) in net assets from operations | $177,833,446 | ($60,211,872) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($7,674,015) | ($34,016,026) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 4,866,510 | $53,723,390 | 10,774,447 | $93,817,527 | |
| Shares reinvested | 602,440 | 6,235,261 | 2,656,064 | 26,826,251 | |
| Shares redeemed | + | (18,494,429) | (201,985,524) | (37,617,681) | (337,440,372) |
| Net transactions in fund shares | (13,025,479) | ($142,026,873) | (24,187,170) | ($216,796,594) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 72,971,719 | $664,486,560 | 97,158,889 | $975,511,052 | |
| Total increase (decrease) | + | (13,025,479) | 28,132,558 | (24,187,170) | (311,024,492) |
| End of period | 59,946,240 | $692,619,118 | 72,971,719 | $664,486,560 | |
67
Schwab Active Equity Funds | Annual Report
See financial notes
Schwab Active Equity Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) | |
| Schwab Core Equity Fund | Schwab Target 2045 Fund |
| Schwab Dividend Equity Fund | Schwab Target 2050 Fund |
| Schwab Large-Cap Growth Fund | Schwab Target 2055 Fund |
| Schwab Small-Cap Equity Fund | Schwab Target 2060 Fund |
| Schwab Health Care Fund | Schwab Target 2065 Fund |
| Schwab International Core Equity Fund | Schwab Fundamental US Large Company Index Fund |
| Schwab S&P 500 Index Fund | Schwab Fundamental US Small Company Index Fund |
| Schwab Small-Cap Index Fund® | Schwab Fundamental International Large Company Index Fund |
| Schwab Total Stock Market Index Fund® | Schwab Fundamental International Small Company Index Fund |
| Schwab U.S. Large-Cap Growth Index Fund | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Schwab U.S. Large-Cap Value Index Fund | Schwab Fundamental Global Real Estate Index Fund |
| Schwab U.S. Mid-Cap Index Fund | Schwab Target 2010 Index Fund |
| Schwab International Index Fund® | Schwab Target 2015 Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Target 2020 Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Target 2025 Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Target 2030 Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Target 2035 Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Target 2040 Index Fund |
| Schwab Balanced Fund | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab Target 2065 Index Fund |
| Schwab Target 2030 Fund | Schwab Monthly Income Fund - Moderate Payout |
| Schwab Target 2035 Fund | Schwab Monthly Income Fund - Enhanced Payout |
| Schwab Target 2040 Fund | Schwab Monthly Income Fund - Maximum Payout |
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds’ Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (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 funds may invest in certain mutual funds and exchange-traded funds (ETFs), which are 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 funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
68
Schwab Active Equity Funds | Annual Report
Schwab Active Equity Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.
• Foreign equity security fair valuation: The Board has adopted procedures to fair value foreign equity securities that are traded in markets that close prior to the funds valuing their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the NAV of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures.
• Futures contracts: Futures contracts are valued at their settlement prices as of the close of their exchanges.
• 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 each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1 — quoted prices in active markets for identical securities— Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, mutual funds and futures contracts. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the 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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Financial Notes (continued)
2. Significant Accounting Policies (continued):
securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets.
• Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments)— Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 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. A fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their value may change daily.
Passive Foreign Investment Companies: Certain funds may own shares in certain foreign corporations that meet the Internal Revenue Code definition of a Passive Foreign Investment Company (PFIC). The funds 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).
Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating pursuant to Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the funds or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. The aggregate fair value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan. 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 the investment adviser or any of its affiliates.
As of October 31, 2021, Schwab Small-Cap Equity 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 October 31, 2021, are disclosed in the fund’s Portfolio Holdings and Statement of Assets and Liabilities.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
Cash Management Transactions: The funds may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances. Excess cash invested with deposit institutions domiciled outside of the U.S., as with any offshore deposit, may be subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. The funds bear the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Gains realized by the funds on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized appreciation to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures contract, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends, in the form of cash or non-cash income such as in the form of additional securities, and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the date the ex-dividend date 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.
The Schwab International Core Equity Fund filed claims to recover taxes previously withheld in certain European Union countries on the basis that those countries had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. These filings are subject to various administrative and judicial proceedings within these countries, and all professional fees associated with these filings have been paid by the investment adviser. For additional details see Affiliates and Affiliated Transactions in financial note 4, Other Affiliated Transactions.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to more than one fund in the trusts generally are allocated among those funds in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income, if any, once a year, with the exception of Schwab Dividend Equity Fund which typically pays quarterly distributions. The funds make distributions from net realized capital gains, if any, once a year.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(g) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(i) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes accrued as of October 31, 2021, if any, are reflected in each fund’s Statement of Assets and Liabilities.
(j) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. 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 a fund will fluctuate, which means that an investor could lose money over short or long periods.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Management Risk. The funds’ investment adviser makes investment decisions for the funds using a strategy based largely on historical information. There is no guarantee that a strategy based on historical information will produce the desired results in the future. In addition, the portfolio optimization process used by each fund to assist in constructing the fund’s portfolio does not assure successful investment. Securities selected with the assistance of the process may be negatively impacted by factors or events not foreseen in developing the process. As a result, a fund may have a lower return than if it were managed using another process or strategy.
Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, a fund’s performance could be impacted.
Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.
Mid-Cap Company Risk. Mid-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies and the value of securities issued by these companies may move sharply.
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Financial Notes (continued)
3. Risk Factors (continued):
Small-Cap Company Risk. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.
Growth Investing Risk. Growth stocks can be volatile. Growth companies usually invest a high portion of earnings in their businesses and may lack the dividends of value stocks that can cushion stock prices in a falling market. The prices of growth stocks are based largely on projections of the issuer’s future earnings and revenues. If a company’s earnings or revenues fall short of expectations, its stock price may fall dramatically. Growth stocks may also be more expensive relative to their earnings or assets compared to value or other stocks.
Dividend Paying Stock Risk. To the extent that a fund invests in dividend paying stocks, the fund’s performance will correlate with the performance of the dividend paying stock segment of the stock market, and the fund may underperform funds that do not limit their investments to dividend paying stocks. If stocks held by a fund reduce or stop paying dividends, the fund’s ability to generate income may be affected.
Derivatives Risk. The principal type of derivative used by a fund is a futures contract. A futures contract is an agreement to buy or sell a financial instrument at a specific price on a specific day. The use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC), could cause a fund to become a commodity pool, which would require the fund to comply with certain CFTC rules. A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk, market risk and management risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to lack of availability risk, counterparty risk, leverage risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Counterparty risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations either because the financial condition of the counterparty declines, or because the counterparty is otherwise unable or unwilling to perform under the contract. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause a fund to realize higher amounts of short-term capital gains. A fund’s use of derivatives could reduce the fund’s performance, increase its volatility, and could cause the fund to lose more than the initial amount invested.
Liquidity Risk. A fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.
Exchange-Traded Fund (ETF) Risk. When a fund invests in an ETF, it will bear a proportionate share of the ETF’s expenses. In addition, lack of liquidity in the market for an ETF’s shares can result in its value being more volatile than the underlying portfolio of securities.
REITs Risk. A fund’s investments in real estate investment trusts (REITs) will be subject to the risks associated with the direct ownership of real estate, including fluctuations in the value of underlying properties, defaults by borrowers or tenants, changes in interest rates and risks related to general or local economic conditions. REITs are also subject to certain additional risks; for example, REITs are dependent upon specialized management skills and cash flows, and may have their investments in relatively few properties, a small geographic area or a single property type. Failure of a company to qualify as a REIT under federal tax law may have adverse consequences on a fund. In addition, REITs have their own expenses, and a fund will bear a proportionate share of those expenses.
Foreign Investment Risk. A fund’s investments in securities of foreign issuers involve certain risks that may be greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund’s investments, and could impair the fund’s ability to meet its investment objective or invest in accordance with its investment strategy. There is a risk that investments in securities denominated in, and/or receiving revenues in, foreign currencies will decline in value relative to the U.S. dollar. Foreign securities may 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
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Financial Notes (continued)
3. Risk Factors (continued):
emerging markets, may be more volatile. To the extent a fund’s investments in a single country or a limited number of countries represent a 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 recordkeeping requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in developed countries. As a result, there may be an increased risk of illiquidity and price volatility associated with a fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar, and, at times, it may be difficult to value such investments.
Concentration Risk. The investments of certain funds are concentrated in issuers doing business in the same sector, and therefore, the companies in which a fund invests will be affected by many of the same factors, such as legislative or regulatory changes, intense competition for market share and other competitive challenges. In addition, a fund is subject to the risks that stocks of these companies may underperform other segments of the equity market or stock market as a whole and are likely to have above-average volatility.
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.
Portfolio Turnover Risk. The funds buy and sell portfolio securities actively. This may cause a fund’s portfolio turnover rate and transaction costs to rise, which may lower a fund’s performance and may increase the likelihood of capital gains distributions.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
Charles Schwab Investment Management Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement between the investment adviser and the trust.
For its advisory and administrative services to the funds, the investment adviser is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
| % OF AVERAGE DAILY NET ASSETS | SCHWAB CORE EQUITY FUND | SCHWAB DIVIDEND EQUITY FUND | SCHWAB LARGE-CAP GROWTH FUND | SCHWAB SMALL-CAP EQUITY FUND | SCHWAB INTERNATIONAL CORE EQUITY FUND |
| Flat rate | 0.47% | 0.62% | 0.72% | 0.81% | 0.58% |
| % OF AVERAGE DAILY NET ASSETS | SCHWAB HEALTH CARE FUND |
| First $500 million | 0.54% |
| $500 million to $1 billion | 0.515% |
| Over $1 billion | 0.49% |
For the period ended October 31, 2021, the aggregate advisory fee paid to the investment adviser by the Schwab Health Care Fund was 0.53%, as a percentage of the fund’s average daily net assets.
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (Schwab), a broker-dealer affiliate of the investment adviser (together, service providers), of certain shareholder services to the current shareholders of the funds.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee up to 0.25%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds), and a fund will pay no more than 0.25% of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service provider. Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.
Expense Limitation
Although these agreements specify certain fees for these services, the investment adviser and its affiliates have made an additional agreement with the funds, for so long as the investment adviser serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (expense limitation). The expense limitation as a percentage of average daily net assets is as follows:
| SCHWAB CORE EQUITY FUND | SCHWAB DIVIDEND EQUITY FUND | SCHWAB LARGE-CAP GROWTH FUND | SCHWAB SMALL-CAP EQUITY FUND | SCHWAB HEALTH CARE FUND | SCHWAB INTERNATIONAL CORE EQUITY FUND |
| 0.75% | 0.89% | 0.99% | 1.12% | 0.82% | 0.86% |
Investments from Affiliates
Certain funds in the Fund Complex (for definition refer to Trustees and Officers section) may own shares of other funds in the Fund Complex. The table below reflects the percentages of shares of each fund in this report that are owned by other funds in the Fund Complex as of October 31, 2021, as applicable:
| UNDERLYING FUNDS | ||||
| SCHWAB CORE EQUITY FUND | SCHWAB DIVIDEND EQUITY FUND | SCHWAB SMALL-CAP EQUITY FUND | SCHWAB INTERNATIONAL CORE EQUITY FUND | |
| Schwab Balanced Fund | 15.1% | —% | 12.0% | —% |
| Schwab Monthly Income Fund - Enhanced Payout | —% | 3.0% | —% | —% |
| Schwab Monthly Income Fund - Maximum Payout | —% | 1.9% | —% | —% |
| Schwab Monthly Income Fund - Moderate Payout | —% | 2.3% | —% | —% |
| Schwab Target 2010 Fund | 0.1% | —% | 0.1% | 0.3% |
| Schwab Target 2015 Fund | 0.1% | —% | 0.2% | 0.3% |
| Schwab Target 2020 Fund | 0.8% | —% | 1.2% | 2.6% |
| Schwab Target 2025 Fund | 1.7% | —% | 2.3% | 4.5% |
| Schwab Target 2030 Fund | 3.8% | —% | 5.4% | 10.5% |
| Schwab Target 2035 Fund | 2.3% | —% | 3.4% | 6.0% |
| Schwab Target 2040 Fund | 4.9% | —% | 8.1% | 13.7% |
| Schwab Target 2045 Fund | 1.1% | —% | 1.8% | 3.3% |
| Schwab Target 2050 Fund | 1.1% | —% | 1.9% | 3.3% |
| Schwab Target 2055 Fund | 0.7% | —% | 1.3% | 2.1% |
| Schwab Target 2060 Fund | 0.2% | —% | 0.3% | 0.6% |
| Schwab Target 2065 Fund | 0.0%* | —% | 0.0%* | 0.1% |
| * | Less than 0.05% |
Other Affiliated Transactions
The professional fees related to foreign withholding tax claims discussed in financial note 2 were non-routine expenses. The investment adviser agreed to pay these professional fees on behalf of the Schwab International Core Equity Fund, subject to reimbursement to the extent the fund is able to successfully recover taxes withheld in the future.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
During the year ended October 31, 2021, the professional fees incurred by the Schwab International Core Equity Fund were $18,586.
During the year ended October 31, 2021, the Schwab International Core Equity Fund recovered previously withheld foreign taxes from Finland. The payment received by the Schwab International Core Equity Fund amounted to $198,467 and is recorded in the fund’s Statement of Operations. The investment adviser had paid upfront professional fees associated with recovering these foreign taxes in the amount of $37,884. This amount has been reimbursed to the investment adviser by the Schwab International Core Equity Fund.
As of October 31, 2021, the balance of professional fees related to foreign withholding tax subject to future reimbursement by the Schwab International Core Equity Fund was $177.
No other amounts for additional tax reclaims are reflected in the financial statements due to the uncertainty surrounding the ultimate resolution of proceedings, the likelihood of receipt of these claims, and the potential timing of payment.
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex. All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
5. Board of Trustees:
The Board may include people who are officers and/or directors of the investment adviser 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 funds did not pay any of these interested persons for their services as trustees, but they did pay non-interested persons (independent trustees), as noted on each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the funds were participants with other funds in the Fund Complex in a joint, syndicated, committed $850 million line of credit (the Syndicated Credit Facility), which matured on September 30, 2021. On September 30, 2021, the Syndicated Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Syndicated Credit Facility, in addition to the interest charged on any borrowings by a fund, each fund paid a commitment fee of 0.15% per annum on the funds’ proportionate share of the unused portion of the Syndicated Credit Facility.
During the period, the funds were participants 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, which matured on September 30, 2021. On September 30, 2021, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Uncommitted Credit Facility, each fund pays interest on the amount a fund borrows. There were no borrowings from either line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
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Financial Notes (continued)
| 7. Purchases and Sales of Investment Securities: |
For the period ended October 31, 2021, purchases and sales of securities (excluding short-term obligations) were as follows:
| PURCHASES OF SECURITIES | SALES OF SECURITIES | |
| Schwab Core Equity Fund | $1,635,558,690 | $2,335,032,980 |
| Schwab Dividend Equity Fund | 522,824,275 | 639,159,083 |
| Schwab Large-Cap Growth Fund | 103,965,771 | 113,311,215 |
| Schwab Small-Cap Equity Fund | 514,760,536 | 610,459,536 |
| Schwab Health Care Fund | 579,711,687 | 630,686,086 |
| Schwab International Core Equity Fund | 720,989,588 | 858,881,699 |
8. Derivatives:
The funds entered into equity index futures contracts during the report period. The funds invested in futures contracts to equitize available cash. The value and variation margin for futures contracts held at October 31, 2021, if any, are presented in the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized gains (losses) and net change in unrealized appreciation (depreciation) on futures contracts are presented in the Statement of Operations. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended October 31, 2021, the month-end average notional amounts of futures contracts held by the funds and the month-end average number of contracts held were as follows:
| NOTIONAL AMOUNTS | NUMBER OF CONTRACTS | |
| Schwab Core Equity Fund | $41,596,350* | 215* |
| Schwab Dividend Equity Fund | 219,475 | 1 |
| Schwab Large-Cap Growth Fund | 1,031,660 | 5 |
| Schwab Small-Cap Equity Fund | 2,750,479 | 25 |
| Schwab Health Care Fund | 906,631 | 5 |
| Schwab International Core Equity Fund | 889,723 | 8 |
| * | During the period, the fund did not hold futures contracts at any month-end. The average value and number of contracts were calculated by aggregating the highest daily values held each month during the period. |
9. Federal Income Taxes:
As of October 31, 2021, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:
| TAX COST | GROSS UNREALIZED APPRECIATION | GROSS UNREALIZED DEPRECIATION | NET UNREALIZED APPRECIATION (DEPRECIATION) | |
| Schwab Core Equity Fund | $1,223,972,373 | $663,175,195 | ($18,149,318) | $645,025,877 |
| Schwab Dividend Equity Fund | 547,980,245 | 131,074,731 | (8,826,690) | 122,248,041 |
| Schwab Large-Cap Growth Fund | 140,089,818 | 153,387,827 | (992,231) | 152,395,596 |
| Schwab Small-Cap Equity Fund | 538,802,415 | 155,040,993 | (21,103,123) | 133,937,870 |
| Schwab Health Care Fund | 566,612,039 | 338,123,822 | (4,526,769) | 333,597,053 |
| Schwab International Core Equity Fund | 569,177,386 | 131,472,535 | (11,291,359) | 120,181,176 |
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Financial Notes (continued)
9. Federal Income Taxes (continued):
As of October 31, 2021, the components of distributable earnings on a tax basis were as follows:
| UNDISTRIBUTED ORDINARY INCOME | UNDISTRIBUTED LONG-TERM CAPITAL GAINS | NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS | NET OTHER UNREALIZED APPRECIATION (DEPRECIATION) | CAPITAL LOSS CARRYFORWARDS | TOTAL | |
| Schwab Core Equity Fund | $190,201,235 | $244,994,301 | $645,025,877 | $— | $— | $1,080,221,413 |
| Schwab Dividend Equity Fund | 19,055,730 | 67,753,718 | 122,248,041 | 8,150 | — | 209,065,639 |
| Schwab Large-Cap Growth Fund | 5,704,425 | 16,458,697 | 152,395,596 | — | — | 174,558,718 |
| Schwab Small-Cap Equity Fund | 288,396 | 72,613,377 | 133,937,870 | — | — | 206,839,643 |
| Schwab Health Care Fund | 28,402,175 | 75,856,974 | 333,597,053 | 43,408 | — | 437,899,610 |
| Schwab International Core Equity Fund | 16,360,499 | — | 120,181,176 | 21,986 | (74,787,803) | 61,775,858 |
The primary differences between book basis and tax basis unrealized appreciation or unrealized depreciation of investments are the tax deferral of losses on wash sales, realization for tax purposes of unrealized gains (losses) on futures contracts, the realization for tax purposes of unrealized appreciation on investments in Passive Foreign Investment Companies (PFIC) and partnership investments. The tax cost of the funds’ investments, disclosed above, have been adjusted from their book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.
Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2021, the funds had capital loss carryforwards available as follows:
| NO EXPIRATION | |
| 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 | 74,787,803 |
For the fiscal year ended October 31, 2021, the funds had capital loss carryforwards utilized as follows:
| CAPITAL LOSS CARRYFORWARDS UTILIZED | |
| Schwab Core Equity Fund | $— |
| Schwab Dividend Equity Fund | 28,724,068 |
| Schwab Large-Cap Growth Fund | — |
| Schwab Small-Cap Equity Fund | 90,389,520 |
| Schwab Health Care Fund | — |
| Schwab International Core Equity Fund | 104,623,399 |
The tax basis components of distributions paid during the current and prior fiscal years were as follows:
| CURRENT FISCAL YEAR END DISTRIBUTIONS | PRIOR FISCAL YEAR END DISTRIBUTIONS | |||
| ORDINARY INCOME | LONG-TERM CAPITAL GAINS | ORDINARY INCOME | LONG-TERM CAPITAL GAINS | |
| Schwab Core Equity Fund | $17,230,074 | $80,768,682 | $19,826,971 | $44,092,670 |
| Schwab Dividend Equity Fund | 13,599,106 | — | 13,605,187 | 44,139,966 |
| Schwab Large-Cap Growth Fund | — | 2,530,978 | 244,834 | 9,460,933 |
| Schwab Small-Cap Equity Fund | 1,114,839 | — | 635,564 | — |
| Schwab Health Care Fund | 6,419,244 | 78,004,824 | 8,653,407 | 26,994,144 |
| Schwab International Core Equity Fund | 7,674,015 | — | 34,016,026 | — |
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Financial Notes (continued)
9. Federal Income Taxes (continued):
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations.
As of October 31, 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 funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the fiscal year ended October 31, 2021, the funds 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Schwab Capital Trust and Shareholders of Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Health Care Fund, and Schwab International Core Equity Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities, including the portfolio holdings, of Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Health Care Fund, and Schwab International Core Equity Fund (the “Funds”), six of the funds constituting Schwab Capital Trust, as of October 31, 2021, and the related statements of operations for the year then ended, the related statements of changes in net assets and the financial highlights for the two years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds as of October 31, 2021, the results of their operations for the year then ended, and the changes in their net assets and the financial highlights for the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America. The financial highlights for each of the three years in the period ended October 31, 2019 were audited by other auditors, whose report, dated December 16, 2019, expressed an unqualified opinion on such financial highlights.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Denver, Colorado
December 16, 2021
Denver, Colorado
December 16, 2021
We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.
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Other Federal Tax Information (unaudited)
Schwab International Core Equity Fund elects to pass through under section 853 of the Internal Revenue Code foreign tax credit of $1,497,184 to its shareholders for the fiscal year ended October 31, 2021. The respective foreign source income on the fund is $21,906,972.
For corporate shareholders, the following percentage of the funds’ dividend distributions paid during the fiscal year ended October 31, 2021, qualify for the corporate dividends received deduction:
| PERCENTAGE | |
| Schwab Core Equity Fund | 85.58 |
| Schwab Dividend Equity Fund | 56.05 |
| Schwab Large-Cap Growth Fund | — |
| Schwab Small-Cap Equity Fund | 100.00 |
| Schwab Health Care Fund | 98.27 |
| Schwab International Core Equity Fund | — |
For the fiscal year ended October 31, 2021, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS Form 1099 of the amounts for use in preparing their 2021 income tax return.
| Schwab Core Equity Fund | $14,767,607 |
| Schwab Dividend Equity Fund | 8,325,574 |
| Schwab Large-Cap Growth Fund | — |
| Schwab Small-Cap Equity Fund | 1,114,839 |
| Schwab Health Care Fund | 6,323,944 |
| Schwab International Core Equity Fund | 14,446,271 |
Under section 852(b)(3)(C) of the Internal Revenue Code, certain funds hereby designate the following amounts as long-term capital gain dividends for the fiscal year ended October 31, 2021:
| Schwab Core Equity Fund | $80,768,682 |
| Schwab Dividend Equity Fund | — |
| Schwab Large-Cap Growth Fund | 2,530,978 |
| Schwab Small-Cap Equity Fund | — |
| Schwab Health Care Fund | 78,004,824 |
| Schwab International Core Equity Fund | — |
For the fiscal year ended October 31, 2021, the funds designate the following amounts as dividends eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amounts for use in preparing their 2021 income tax return.
| Schwab Core Equity Fund | $17,083 |
| Schwab Dividend Equity Fund | 357,973 |
| Schwab Large-Cap Growth Fund | — |
| Schwab Small-Cap Equity Fund | — |
| Schwab Health Care Fund | — |
| Schwab International Core Equity Fund | — |
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Liquidity Risk Management Program (Unaudited)
The Funds have adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Funds’ Board of Trustees (the “Board”) has designated the Funds’ investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.
Under the program, the investment adviser manages a Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. The program is reasonably designed to assess and manage a Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each Fund’s investments is supported by third-party liquidity assessment vendors.
The Funds’ Board reviewed a report at its meeting held on September 20, 2021 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2020, through May 31, 2021, which included individual Fund liquidity risk metrics. No significant liquidity events impacting any of the Funds were noted in the report. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing each Fund’s liquidity risk.
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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. (dba Schwab Asset Management) (the investment adviser) with respect to the existing funds in the Trust, including Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Health Care Fund and Schwab International Core Equity Fund (each, a Fund and collectively, the Funds), and to review certain other agreements pursuant to which the investment adviser 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 the investment adviser, including information about the investment adviser’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 the investment adviser seeking certain relevant information. The responses by the investment adviser 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 Funds that the Board reviews during the course of each year, including information that relates to the Funds’ 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 the investment adviser 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 Funds at meetings held on May 12, 2021 and June 8, 2021, and approved the renewal of the Agreement with respect to the Funds 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 Funds 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 each Fund under the Agreement, including the resources of the investment adviser and its affiliates dedicated to the Funds; |
| 2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds and benchmark data; |
| 3. | each Fund’s expenses and how those expenses compared to those of certain other similar mutual funds; |
| 4. | the profitability of the investment adviser and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to each Fund, including both direct and indirect benefits accruing to the investment adviser and its affiliates; and |
| 5. | the extent to which economies of scale would be realized as each 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 the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, the investment adviser’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 the investment adviser relating to services and support provided with respect to each 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 the investment adviser has made in its infrastructure, including
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modernizing the investment adviser’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 Funds and their shareholders. The Trustees considered the investment adviser’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 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 the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered each Fund’s performance in determining whether to renew the Agreement with respect to such Fund. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and applicable indices/benchmarks, in light of total return, portfolio yield (if applicable) and market trends, as well as in consideration of each 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. 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 Schwab Dividend Equity Fund, Schwab Health Care Fund and Schwab International Core Equity Fund each 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 each Fund, including that the underperformance was attributable, to a significant extent, to investment decisions by the investment adviser that were reasonable and consistent with each Fund’s investment objective and policies and that the investment adviser 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 each Fund supported renewal of the Agreement with respect to such Fund.
Fund Expenses. With respect to each Fund’s expenses, the Trustees considered the rate of compensation called for by the Agreement and each Fund’s net operating expense ratio, in each case, in comparison to those of other similar mutual funds, such peer groups and comparisons having been selected and calculated by an independent provider of investment company data. The investment adviser reported to the Board, and the Board took into account, the risk assumed by the investment adviser in the development of the Funds and provision of services as well as the competitive marketplace for financial products. The Trustees considered the effects of the investment adviser’s and Schwab’s practice of waiving certain fees to prevent total annual operating expenses of the Funds from exceeding a specified cap. The Trustees also considered the investment adviser’s contractual commitment to keep each Fund’s expense cap for so long as the investment adviser serves as the adviser to such Fund. The Trustees also considered fees charged by the investment adviser to 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 the investment adviser 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 each Fund are reasonable and supported renewal of the Agreement with respect to such Fund.
Profitability. The Trustees considered the compensation flowing to the investment adviser 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 the investment adviser 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 Funds and other funds in the complex. The Trustees also considered any other benefits derived by the investment adviser from its relationship with the Funds, such as whether, by virtue of its management of the Funds, the investment adviser 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 Funds under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds by the investment adviser and its affiliates. The Trustees noted that the investment adviser continues to invest substantial sums in its business in order to provide enhanced research capabilities, services, and systems to benefit the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of the
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investment adviser with respect to each Fund is reasonable and supported renewal of the Agreement with respect to such 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 and whether those are passed along to a Fund’s shareholders through (i) the enhancement of services provided to the Funds in return for fees paid, including through investments by the investment adviser in the investment adviser’s infrastructure, including modernizing the investment adviser’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 Funds and their shareholders; (ii) graduated investment advisory fee schedules or unitary fee structures, fee waivers, or expense caps by the investment adviser 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 the investment adviser has shared any economies of scale with the Funds by investing in the investment adviser’s infrastructure, as discussed above, over time and that the investment adviser’s internal costs of providing investment management, technology, administrative,
legal and compliance services to the Funds continue to increase as a result of regulatory or other developments. The Trustees considered that the investment adviser and its affiliates may employ contractual expense caps to protect shareholders from high fees when fund assets are relatively small, for example, in the case of newer funds or funds with investment strategies that are from time to time out of favor, because, among other reasons, shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that each 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 Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of the services provided and the related expenses borne by the investment adviser 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 funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 103 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| Independent Trustees | |||
| Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
| Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 103 | 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. | 103 | 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). | 103 | 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. | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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 and Chief Executive Officer (Oct. 2008 – present) and President (Oct. 2008 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), 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 – Oct. 2021), Charles Schwab Investment Management, Inc. | 103 | 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. | 103 | 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 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.; 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 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.; 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 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.; 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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Schwab Active Equity Funds
| Officers of the Trust (continued) | |
| Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
| 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., the investment adviser for the trusts in the Fund Complex, and is an employee 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. 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.
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.
Bloomberg US Treasury Bills 1–3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $300 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
Dividend Equity Spliced Index An internally calculated index, comprised of the S&P 500 Index from inception of the Schwab Dividend Equity Fund until the close of business on February 27, 2015, and the Russell 1000 Value Index thereafter.
Dow Jones Global Health Care Index An index that measures the performance of healthcare providers, researchers, and supplies producers around the world. The index is quoted in U.S. dollars.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 1000 Growth Index An index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000 Index An index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell 1000 Value Index An index that measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
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Schwab Active Equity Funds
Schwab Asset Management
With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Schwab Asset 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., dba Schwab Asset Management
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds
1-877-824-5615
© 2021 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
Member SIPC®
Printed on recycled paper.
| ¹ | State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation. |
| ² | 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. |
Annual Report | October 31, 2021
Schwab Balanced Fund
Schwab Balanced Fund
In This Report
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset ManagementTM
Distributor: Charles Schwab & Co., Inc. (Schwab)
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Schwab Balanced Fund | Annual Report
Schwab Balanced 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 Return for the 12 Months Ended October 31, 2021 | |
| Schwab Balanced Fund (Ticker Symbol: SWOBX) | 23.20% |
| Balanced Blended Index | 24.82% |
| Fund Category: Morningstar Allocation—50% to 70% Equity1 | 25.43% |
| Performance Details | pages 7-9 |
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 components that make up the composite index may vary over time. For index definition, please see the Glossary.
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
| 1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
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Schwab Balanced Fund | Annual Report
Schwab Balanced Fund
From the President
Jonathan de St. Paer
President of Schwab Asset
Management and the fund
covered in this report.
President of Schwab Asset
Management and the fund
covered in this report.
Dear Shareholder,
During the 12-month reporting period ended October 31, 2021, U.S. equity markets generally gained ground as the economy began to recover from COVID-19 pandemic lockdowns and corporations generally posted stronger-than-expected profits. The S&P 500® Index, a bellwether for the overall U.S. stock market, rose 42.9%, reaching record territory as the period ended. A far more complex story lay beneath those broad gains. Skyrocketing oil and gas prices propelled the energy sector ahead of other sectors, while the financials sector sharply outperformed on strong earnings and rising interest rates. Other cyclically sensitive sectors, such as the information technology and real estate sectors, also outperformed, while more traditionally defensive sectors, such as the utilities and consumer staples sectors, trailed by comparison. U.S. fixed-income markets produced mixed results in the face of increasing inflationary pressures, with higher returns among lower-rated bonds compared to their investment-grade counterparts and corporates over government-issued securities.
While there are always winners and losers among various markets, sectors, and individual stocks, today’s top performers are rarely the same as yesterday’s or tomorrow’s. At Schwab Asset Management, we believe the best defense against a shifting investment landscape is a portfolio that’s diversified across a wide variety of asset classes and geographic regions. The Schwab Balanced Fund provides diversified exposure to actively managed U.S. equity funds, fixed-income funds, and cash and cash equivalents in a convenient portfolio solution. As such, it can serve as a core part of a diversified investment plan. The portfolio management team balances exposures between asset classes and the fund seeks to provide investors access to the growth opportunities of stock investing along with the income opportunities of bonds and other fixed-income securities.
Thank you for investing with Schwab Asset Management, and for trusting us to help you achieve your financial goals. For more information about the Schwab Balanced Fund, please continue reading this report. In addition, you can find further details about the fund by visiting our website at www.schwabassetmanagement.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
“ The Schwab Balanced Fund provides diversified exposure to actively managed U.S. equity funds, fixed-income funds, and cash and cash equivalents in a convenient portfolio solution.”
Past performance is no guarantee of future results.
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Management views may have changed since the report date.
Schwab Asset Management is the dba name for Charles Schwab Investment Management, Inc., the investment adviser for Schwab Funds, Laudus Funds, and Schwab ETFs.
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Schwab Balanced Fund | Annual Report
Schwab Balanced Fund
The Investment Environment
For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 42.91% with cyclically sensitive sectors, such as the energy, financials, information technology, and real estate sectors, outperforming traditionally defensive sectors, such as the utilities and consumer staples sectors. U.S. small-cap stocks outperformed U.S. large-cap stocks, with the Russell 2000® Index and the Russell 1000® Index returning 50.80% and 43.51%, respectively. Among U.S. large-caps, value stocks slightly outperformed growth stocks, with the Russell 1000® Value Index and Russell 1000® Growth Index returning 43.76% and 43.21%, respectively. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. Among international markets, the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.18% and the MSCI Emerging Markets Index (Net)* returned 16.96%. The Bloomberg US Aggregate Bond Index returned -0.48% and the FTSE non-US Dollar World Government Bond Index returned -4.32%.
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. U.S. gross domestic product (GDP) rose at an annualized rate of 4.3% for the fourth quarter of 2020, 6.4% for the first quarter of 2021, and 6.7% for the second quarter of 2021 before falling back to 2.0% for the third quarter of 2021 amid fading government stimuli, persistent inflation, and a new surge in COVID-19 cases. Unemployment, which skyrocketed in April 2020, fell over the reporting period. Inflation, which had remained well below the Fed’s traditional 2% target until it jumped in March 2021, continued to rise through June 2021 and remained elevated through October 2021, largely due to 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.
Asset Class Performance Comparison % returns during the 12 months ended October 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 an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and Schwab Asset Management.
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 Balanced Fund
The Investment Environment (continued)
Outside the United States, global economies also displayed resilience but were somewhat more constrained amid continuing struggles against COVID-19 and the emergence and spread of the Delta variant. Oil prices rose through most of the reporting period, except for a dip in July and August, on growing demand and reduced production. In the eurozone, GDP growth jumped in the third quarter of 2020, regaining much of its losses from the second quarter, but turned slightly negative for both the fourth quarter of 2020 and the first quarter of 2021. GDP growth turned positive for the second and third quarters of 2021. The United Kingdom, which was particularly hard-hit by the COVID-19 pandemic, suffered its biggest slump in more than three centuries over the course of 2020, effectively wiping out its growth over the past seven years, but posted a small positive gain in GDP for the first quarter of 2021. The United Kingdom removed many of the country’s stringent restrictions during the summer and posted a strong gain in GDP growth for the second quarter of 2021. Japan’s economy, after rebounding sharply in the third quarter of 2020, posted a positive, albeit smaller, gain in the fourth quarter of 2020. Japan’s economy subsequently contracted in the first quarter of 2021 on a resurgence of COVID-19 cases and slow COVID-19 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, maintained positive GDP growth in the fourth quarter of 2020. China’s GDP growth accelerated sharply for the first quarter of 2021 before easing for the subsequent two quarters in part because of the political landscape and an emphasis on domestic consumption over globalization. India, after plunging into one of the worst recessions of any major economy, saw its first positive gain in GDP in the fourth quarter of 2020 and posted a sharp jump in GDP growth for the second quarter of 2021.
For the most part, central banks around the world, including the Fed, 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 United States, 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 needed to achieve a full recovery. The Fed maintained the federal funds rate in a range of 0.00% to 0.25% throughout the reporting period. However, as inflation continued to rise for most of 2021, the Fed tightened its stance, signaling that—due to significant progress made on its twin goals of maximum employment and price stability—it could start to reduce its bond-buying program as soon as late 2021 and could begin to raise interest rates in the next 18 months. In developed international markets, most central banks were similarly accommodative while acknowledging that conditions were changing. The European Central Bank held interest rates at 0.00%, unchanged since March 2016, but reduced the pace of its asset purchase program instituted 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—despite citing moderately improving conditions—vowed to continue to maintain stability in its financial markets through its ongoing programs. The Bank of England maintained its key official bank rate at 0.1% and continued to support its bond-buying program. Emerging markets were mixed. Central banks in China, India, and Indonesia maintained their low rates to help counter the ongoing effects of the COVID-19 pandemic. Mexico, Brazil, Russia, and Pakistan raised their rates, citing a stronger-than-expected recovery or to counteract the impacts of inflation.
U.S. bond prices drifted lower early in the reporting period, driving yields higher, in anticipation of a new fiscal aid package and hope for economic improvement in 2021. (Bond yields and bond prices typically move in opposite directions.) After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns. The yield on the 10-year U.S. Treasury, which began the reporting period at 0.88%, ended the period at 1.55%. Short-term rates, which have also remained historically low, fell further over the reporting period, with three-month U.S. Treasury yields beginning the period at 0.09% and ending it at 0.05%.
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Schwab Balanced Fund | Annual Report
Schwab Balanced Fund
Fund Management
 | Zifan Tang, Ph.D., CFA, Senior Portfolio Manager, is responsible for the co-management of the fund. Prior to joining Schwab in 2012, Ms. Tang was a product manager at Thomson Reuters and from 1997 to 2009 worked as a portfolio manager at Barclays Global Investors (now known as BlackRock). |
 | Patrick Kwok, CFA, Portfolio Manager, is responsible for the co-management of the fund. Previously, Mr. Kwok served as an associate portfolio manager from 2012 to 2016. Prior to that, he worked as a fund administration manager, where he was responsible for oversight of sub-advisers, trading, cash management, and fund administration supporting the Charles Schwab Trust Bank Collective Investment Trusts and multi-asset Schwab Funds. Prior to joining Schwab Asset Management in 2008, Mr. Kwok spent two years as an asset operations specialist at Charles Schwab Trust Company. He also worked for one year at State Street Bank & Trust as a portfolio accountant and pricing specialist. |
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Schwab Balanced Fund | Annual Report
Schwab Balanced Fund
The Schwab Balanced Fund (the fund) seeks capital growth and income. To pursue its goal, the fund generally invests in a diversified group of other affiliated Schwab and/or Laudus Funds, in accordance with its target portfolio allocation. Normally, the fund invests 55% to 65% of its assets in equity securities (including stocks and equity funds) and 35% to 45% in fixed-income securities (including bonds and fixed-income funds), and cash and cash equivalents (including money market funds). This allocation is designed to provide a mix of the growth opportunities of stock investing with the income opportunities of bonds and other fixed-income securities. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the fund returned 23.20%. The fund’s internally calculated comparative index, the Balanced Blended Index (the index), returned 24.82%.
Positioning and Strategies. Over the reporting period, the fund’s asset allocations were broadly in line with those of the index.
The fund’s U.S. large-cap equity allocations contributed to the total return of the fund. The Schwab Core Equity Fund was the largest contributor to the total return of the fund, returning approximately 38% for the reporting period. The Laudus U.S. Large Cap Growth Fund also contributed to the total return of the fund, returning approximately 37% for the reporting period. Both U.S. large-cap equity funds dragged on relative performance, with the comparative index, the S&P 500® Index, returning approximately 43% for the reporting period.
The U.S. small-cap equity allocation also contributed to the total return of the fund. The Schwab Small-Cap Equity Fund returned approximately 59% for the reporting period, outperforming its comparative index, the Russell 2000® Index, which returned approximately 51% for the reporting period.
The fund’s fixed-income allocation detracted from the total return of the fund. The Schwab U.S. Aggregate Bond Index Fund returned approximately -1% for the reporting period and generally tracked its comparative benchmark, the Bloomberg US Aggregate Bond Index.
Management views and portfolio holdings may have changed since the report date.
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Schwab Balanced Fund | Annual Report
Schwab Balanced Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Balanced Fund (11/18/96) | 23.20% | 11.93% | 10.02% |
| S&P 500® Index | 42.91% | 18.93% | 16.21% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Balanced Blended Index | 24.82% | 12.36% | 10.64% |
| Fund Category: Morningstar Allocation—50% to 70% Equity2 | 25.43% | 10.66% | 9.15% |
| Fund Expense Ratios3: Net 0.50%; Gross 0.53% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.50% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
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Schwab Balanced Fund | Annual Report
Schwab Balanced Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 6 |
| Portfolio Turnover Rate | 6% |
Asset Class Weightings % of Investments1
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
| 1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
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Schwab Balanced Fund | Annual Report
Schwab Balanced 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 transfer agent fees and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in the fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2021 and held through October 31, 2021.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for the fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs. 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)1,2 | EFFECTIVE EXPENSE RATIO (ANNUALIZED)3,4 | BEGINNING ACCOUNT VALUE AT 5/1/21 | ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 10/31/21 | EXPENSES PAID DURING PERIOD 5/1/21-10/31/212,5 | EFFECTIVE EXPENSES PAID DURING PERIOD 5/1/21-10/31/214,5 | |
| Schwab Balanced Fund | ||||||
| Actual Return | 0.00% | 0.49% | $1,000.00 | $1,058.40 | $0.00 | $2.54 |
| Hypothetical 5% Return | 0.00% | 0.49% | $1,000.00 | $1,025.21 | $0.00 | $2.50 |
| 1 | Based on the most recent six-month expense ratio. |
| 2 | Excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Based on the most recent six-month acquired fund fees and expenses and the expense ratio; may differ from the acquired fund fees and expenses and the expense ratio in the prospectus. |
| 4 | Includes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 5 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
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Schwab Balanced Fund | Annual Report
Schwab Balanced Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $16.50 | $15.99 | $15.41 | $15.60 | $14.51 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.19 | 0.20 | 0.24 | 0.23 | 0.21 | |
| Net realized and unrealized gains (losses) | 3.58 | 1.13 | 1.32 | 0.08 2 | 1.96 | |
| Total from investment operations | 3.77 | 1.33 | 1.56 | 0.31 | 2.17 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.19) | (0.22) | (0.37) | (0.48) | (0.22) | |
| Distributions from net realized gains | (0.34) | (0.60) | (0.61) | (0.02) | (0.86) | |
| Total distributions | (0.53) | (0.82) | (0.98) | (0.50) | (1.08) | |
| Net asset value at end of period | $19.74 | $16.50 | $15.99 | $15.41 | $15.60 | |
| Total return | 23.20% | 8.58% | 11.19% | 1.94% | 15.90% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses3 | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |
| Gross operating expenses3 | 0.02% | 0.03% | 0.04% | 0.04% | 0.06% | |
| Net investment income (loss) | 1.01% | 1.26% | 1.55% | 1.44% | 1.39% | |
| Portfolio turnover rate | 6% | 18% | 32% | 6% | 28% 4 | |
| Net assets, end of period (x 1,000,000) | $804 | $577 | $526 | $447 | $386 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | The per share amount does not accord with the change in aggregate gains and losses in securities during the period because of the timing of sales and repurchases of fund shares in relation to fluctuating market values. |
| 3 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 4 | The portfolio turnover rate increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, the portfolio turnover rate would have been 7% without including these transactions. There were no transaction costs associated with these transactions. |
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Schwab Balanced Fund | Annual Report
See financial notes
Schwab Balanced Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 98.7% OF NET ASSETS | ||
| U.S. Stocks 60.8% | ||
| Large-Cap 50.8% | ||
| Laudus U.S. Large Cap Growth Fund * | 3,604,815 | 127,249,981 |
| Schwab Core Equity Fund | 9,622,902 | 281,181,209 |
| 408,431,190 | ||
| Small-Cap 10.0% | ||
| Schwab Small-Cap Equity Fund | 3,374,920 | 80,221,848 |
| 488,653,038 | ||
| Fixed Income 36.2% | ||
| Intermediate-Term Bond 36.2% | ||
| Schwab U.S. Aggregate Bond Index Fund | 27,865,289 | 290,913,616 |
| Money Market Funds 1.7% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 13,715,408 | 13,719,523 |
| Total Affiliated Underlying Funds (Cost $606,354,894) | 793,286,177 | |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| UNAFFILIATED UNDERLYING FUNDS 1.3% OF NET ASSETS | ||
| Money Market Funds 1.3% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (a) | 10,525,408 | 10,525,408 |
| Total Unaffiliated Underlying Funds (Cost $10,525,408) | 10,525,408 | |
| Total Investments in Securities (Cost $616,880,302) | 803,811,585 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
Below is a summary of the fund transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 98.7% OF NET ASSETS | ||||||||
| U.S. Stocks 60.8% | ||||||||
| Large-Cap 50.8% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $89,442,175 | $21,319,223 | ($12,543,877) | $309,753 | $28,722,707 | $127,249,981 | 3,604,815 | $4,989,675 |
| Schwab Core Equity Fund | 196,093,026 | 32,787,454 | (13,395,793) | 427,728 | 65,268,794 | 281,181,209 | 9,622,902 | 10,120,075 |
| 408,431,190 | ||||||||
| Small-Cap 10.0% | ||||||||
| Schwab Small-Cap Equity Fund | 59,916,522 | 3,848,454 | (15,827,861) | 2,067,122 | 30,217,611 | 80,221,848 | 3,374,920 | 133,454 |
| 488,653,038 | ||||||||
| Fixed Income 36.2% | ||||||||
| Intermediate-Term Bond 36.2% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 214,337,213 | 83,701,449 | — | — | (7,125,046) | 290,913,616 | 27,865,289 | 5,557,383 |
| Money Market Funds 1.7% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 10,216,799 | 3,503,895 | — | — | (1,171) | 13,719,523 | 13,715,408 | 3,933 |
| Total Affiliated Underlying Funds | $570,005,735 | $145,160,475 | ($41,767,531) | $2,804,603 | $117,082,895 | $793,286,177 | $20,804,520 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
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Schwab Balanced Fund | Annual Report
See financial notes
Schwab Balanced Fund
Portfolio Holdings as of October 31, 2021 (continued)
At October 31, 2021, all of the fund’s investment securities were classified as Level 1. Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3. (See financial note 2(a) for additional information).
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Schwab Balanced Fund | Annual Report
See financial notes
Schwab Balanced Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $606,354,894) | $793,286,177 | |
| Investments in securities, at value - unaffiliated (cost $10,525,408) | 10,525,408 | |
| Receivables: | ||
| Investments sold | 2,317,531 | |
| Fund shares sold | 727,419 | |
| Dividends | 485,323 | |
| Due from investment adviser | 8,494 | |
| Prepaid expenses | + | 21,883 |
| Total assets | 807,372,235 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 3,025,094 | |
| Fund shares redeemed | 469,078 | |
| Accrued expenses | + | 66,523 |
| Total liabilities | 3,560,695 | |
| Net assets | $803,811,540 | |
| Net Assets by Source | ||
| Capital received from investors | $605,608,905 | |
| Total distributable earnings | + | 198,202,635 |
| Net assets | $803,811,540 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $803,811,540 | 40,714,102 | $19.74 | ||
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Schwab Balanced Fund | Annual Report
See financial notes
Schwab Balanced Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $7,226,344 | |
| Dividends received from securities - unaffiliated | + | 4,473 |
| Total investment income | 7,230,817 | |
| Expenses | ||
| Registration fees | 55,726 | |
| Shareholder reports | 26,949 | |
| Portfolio accounting fees | 26,787 | |
| Professional fees | 23,325 | |
| Independent trustees’ fees | 9,265 | |
| Transfer agent fees | 7,991 | |
| Custodian fees | 1,307 | |
| Other expenses | + | 8,851 |
| Total expenses | 160,201 | |
| Expense reduction by investment adviser | – | 160,201 |
| Net expenses | – | — |
| Net investment income | 7,230,817 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 13,578,176 | |
| Net realized gains on sales of securities - affiliated | + | 2,804,603 |
| Net realized gains | 16,382,779 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | + | 117,082,895 |
| Net realized and unrealized gains | 133,465,674 | |
| Increase in net assets resulting from operations | $140,696,491 | |
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Schwab Balanced Fund | Annual Report
See financial notes
Schwab Balanced Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $7,230,817 | $6,859,312 | |
| Net realized gains | 16,382,779 | 8,022,226 | |
| Net change in unrealized appreciation (depreciation) | + | 117,082,895 | 22,746,515 |
| Increase in net assets from operations | $140,696,491 | $37,628,053 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($18,699,512) | ($27,287,501) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 10,659,191 | $196,407,644 | 11,812,461 | $187,887,955 | |
| Shares reinvested | 946,955 | 16,600,121 | 1,536,645 | 24,202,165 | |
| Shares redeemed | + | (5,882,203) | (108,620,302) | (11,266,936) | (171,177,405) |
| Net transactions in fund shares | 5,723,943 | $104,387,463 | 2,082,170 | $40,912,715 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 34,990,159 | $577,427,098 | 32,907,989 | $526,173,831 | |
| Total increase | + | 5,723,943 | 226,384,442 | 2,082,170 | 51,253,267 |
| End of period | 40,714,102 | $803,811,540 | 34,990,159 | $577,427,098 | |
16
Schwab Balanced Fund | Annual Report
See financial notes
Schwab Balanced Fund
Financial Notes
1. Business Structure of the Fund:
Schwab Balanced Fund is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the fund discussed in this report, which is highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) | |
| Schwab Balanced Fund | Schwab Target 2045 Fund |
| Schwab S&P 500 Index Fund | Schwab Target 2050 Fund |
| Schwab Small-Cap Index Fund® | Schwab Target 2055 Fund |
| Schwab Total Stock Market Index Fund® | Schwab Target 2060 Fund |
| Schwab U.S. Large-Cap Growth Index Fund | Schwab Target 2065 Fund |
| Schwab U.S. Large-Cap Value Index Fund | Schwab Fundamental US Large Company Index Fund |
| Schwab U.S. Mid-Cap Index Fund | Schwab Fundamental US Small Company Index Fund |
| Schwab International Index Fund® | Schwab Fundamental International Large Company Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Fundamental International Small Company Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Fundamental Global Real Estate Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Target 2010 Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Target 2015 Index Fund |
| Schwab Core Equity Fund | Schwab Target 2020 Index Fund |
| Schwab Dividend Equity Fund | Schwab Target 2025 Index Fund |
| Schwab Large-Cap Growth Fund | Schwab Target 2030 Index Fund |
| Schwab Small-Cap Equity Fund | Schwab Target 2035 Index Fund |
| Schwab Health Care Fund | Schwab Target 2040 Index Fund |
| Schwab International Core Equity Fund | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab Target 2065 Index Fund |
| Schwab Target 2030 Fund | Schwab Monthly Income Fund – Moderate Payout |
| Schwab Target 2035 Fund | Schwab Monthly Income Fund – Enhanced Payout |
| Schwab Target 2040 Fund | Schwab Monthly Income Fund – Maximum Payout |
The Schwab Balanced Fund is a single class "fund of funds" which seeks to achieve its investment objective by investing in a diversified group of other affiliated Schwab and/or Laudus Funds (the underlying funds), but also may invest in other unaffiliated, third party mutual funds, including exchange-traded funds (ETFs). In addition, the fund may invest a portion of its assets directly in equity and fixed-income securities to maintain its allocations.
The fund offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of the fund. Each share has a par value of 1/1,000 of a cent, and the fund’s Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the fund uses in its preparation of financial statements. The fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (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 financial statements of the fund should be read in conjunction with the underlying funds’ financial statements. For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the U.S. Securities and Exchange Commission (SEC) and are available on the SEC’s website at www.sec.gov.
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Schwab Balanced Fund | Annual Report
Schwab Balanced Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair value. Among other things, these procedures allow the fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The fund values the securities in its portfolio every business day. The fund uses the following policies to value various types of securities:
• Mutual funds: Mutual funds are valued at their respective NAVs.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value the fund’s securities when market prices are not “readily available” or are unreliable. For example, the fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. The fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that the fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the fund pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair value of its investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the fund determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1 — quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the 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 securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations.
• Level 3 — significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the fund uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the fund in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the fund in the absence of market information. Assumptions used by the fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the fund’s results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
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Schwab Balanced Fund | Annual Report
Schwab Balanced Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
As disclosed in the Portfolio Holdings, as of October 31, 2021, all of the fund’s investments were classified as Level 1.
(b) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
(c) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date). Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(d) Expenses:
Expenses that are specific to the fund are charged directly to the fund. Expenses that are common to more than one fund in the trusts generally are allocated among those funds in proportion to their average daily net assets. The fund bears its share of the acquired fund fees and expenses of the underlying funds, which are indirect expenses incurred by the fund through its investments in the underlying funds. Such expenses are reflected in the net asset values of the underlying funds.
(e) Distributions to Shareholders:
The fund makes distributions from net investment income and net realized capital gains, if any, once a year.
(f) 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.
(g) 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.
(h) 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 described in the fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The fund is subject to the risk that the selection of the underlying funds and the allocation of the fund’s assets among the various asset classes and market segments may cause the fund to underperform other funds with a similar investment objective.
Conflicts of Interest Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds and ETFs may create a conflict of interest because the fees paid to it and its affiliates by some underlying funds are higher than the fees paid by other underlying funds. The investment adviser also may have an incentive to
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Financial Notes (continued)
3. Risk Factors (continued):
select an affiliated underlying fund for other reasons, including to increase assets under management or to support new investment strategies. In addition, other conflicts of interest may exist where the best interests of the affiliated underlying fund may not be aligned with those of the fund. However, the investment adviser is a fiduciary to the fund and is legally obligated to act in the fund’s best interests when selecting underlying funds.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. 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.
Direct Investment Risk. The fund may invest directly in cash, cash equivalents and equity and fixed-income securities, including money market securities, to maintain its allocations. The fund’s direct investment in these securities is subject to the same or similar risks as an underlying fund’s investment in the same securities.
Underlying Fund Investment Risk. Before investing in the fund, investors should assess the risks associated with the underlying funds in which the fund may invest, which include any combination of the risks described below.
• Investment Risk. The fund may experience losses with respect to its investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective.
• Management Risk. Generally, the underlying funds are actively managed mutual funds. Any actively managed mutual fund is subject to the risk that its investment adviser (or sub-adviser(s)) will select or allocate assets that could cause the fund to underperform or otherwise not meet its objective. An underlying fund’s adviser applies its own investment techniques and risk analyses in making investment decisions for the underlying fund, but there can be no guarantee that they will produce the desired results.
• Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
• Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, an underlying fund’s performance could be impacted.
• Growth Investing Risk. An underlying fund’s investments in growth stocks can be volatile. Growth companies usually invest a high portion of earnings in their businesses and may lack the dividends of value stocks that can cushion stock prices in a falling market. The prices of growth stocks are based largely on projections of the issuer’s future earnings and revenues. If a company’s earnings or revenues fall short of expectations, its stock price may fall dramatically. Growth stocks may also be more expensive relative to their earnings or assets compared to value or other stocks.
• Fixed-Income Risk. Interest rates rise and fall over time, which will affect an underlying fund’s yield and share price. A change in a central bank’s monetary policy or economic conditions, among other things, may result in a change in interest rates. A rise in interest rates could cause an underlying fund’s share price to fall. The credit quality of a portfolio investment could also cause an underlying fund’s share price to fall. An underlying fund could lose money if the issuer or guarantor of a portfolio investment or the counterparty to a derivatives contract fails to make timely principal or interest payments or otherwise honor its obligations. Fixed-income securities may be paid off earlier or later than expected. Either situation could cause an underlying fund to hold securities paying lower-than-market rates of interest, which could hurt an underlying fund’s yield or share price. Below investment-grade bonds (junk bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturns than investment-grade securities.
• ETF Risk. When an underlying fund invests in an ETF, it will bear a proportionate share of the ETF’s expenses. In addition, lack of liquidity in the market for an ETF’s shares can result in its value being more volatile than the underlying portfolio of securities.
• Money Market Fund Risk. The fund may invest in underlying money market funds that either seek to maintain a stable $1.00 net asset value (“stable share price money market funds”) or that have a share price that fluctuates (“variable share price money market funds”). Although an underlying stable share price money market fund seeks to maintain a stable $1.00 net asset value, it is possible to lose money by investing in such a money market fund. Because the share price of an underlying variable share price money market fund will fluctuate, when the fund sells the shares it owns they may be worth more or less
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Financial Notes (continued)
3. Risk Factors (continued):
than what the fund originally paid for them. In addition, neither type of money market fund is designed to offer capital appreciation. Certain underlying money market funds may impose a fee upon the sale of shares or may temporarily suspend the ability to sell shares if such fund’s liquidity falls below required minimums.
• Foreign Investment Risk. An underlying fund’s investments in securities of foreign issuers 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 an underlying fund’s investments, and could impair the underlying 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.
• 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 recordkeeping 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 an underlying 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.
• Derivatives Risk. An underlying fund may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right, 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. A credit default swap is an agreement in which the seller agrees to make a payment to the buyer in the event of a specified credit event in exchange for a fixed payment or series of fixed payments.
An underlying fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as leverage risk, liquidity risk, market risk and management risk, are discussed elsewhere in this section. An underlying fund’s use of derivatives is also subject to lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause an underlying fund to realize higher amounts of short-term capital gains. An underlying fund’s use of derivatives could reduce the underlying fund’s performance, increase its volatility, and could cause the underlying fund to lose more than the initial amount invested. The use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) by an underlying fund could cause the fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.
• Leverage Risk. Certain underlying fund transactions, such as derivatives transactions, short sales, reverse repurchase agreements, and mortgage dollar rolls, may give rise to a form of leverage and may expose an underlying fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of an underlying fund’s portfolio securities, which means even a small amount of leverage can have a disproportionately large impact on the underlying fund.
• Liquidity Risk. An underlying fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the underlying fund may have to sell them at a loss.
• Portfolio Turnover Risk. Certain of the underlying funds may buy and sell portfolio securities actively. If they do, their portfolio turnover rate and transaction costs will rise, which may lower the underlying fund’s performance and may increase the likelihood of capital gains distributions.
• Securities Lending Risk. An underlying fund may lend its portfolio securities to brokers, dealers, and other financial institutions. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
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Financial Notes (continued)
3. Risk Factors (continued):
• Mortgage-Backed and Mortgage Pass-Through Securities Risk. Mortgage-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to similar or greater risk of decline in market value during periods of rising interest rates. Certain of the mortgage-backed securities in which an underlying fund may invest are issued or guaranteed by agencies or instrumentalities of the U.S. government but are not backed by the full faith and credit of the U.S. government. There can be no assurance that the U.S. government would provide financial support to its agencies or instrumentalities where it was not obligated to do so which can cause an underlying fund to lose money or underperform. The risks of investing in mortgage-backed securities include, among others, interest rate risk, credit risk, prepayment risk and extension risk. Transactions in mortgage pass-through securities often occur through to-be-announced (TBA) transactions. An underlying fund could lose money or underperform if a TBA counterparty defaults or goes bankrupt.
• Mortgage Dollar Rolls Risk. Mortgage dollar rolls are transactions in which an underlying fund sells mortgage-backed securities to a dealer and simultaneously agrees to repurchase similar securities in the future at a predetermined price. An underlying fund’s mortgage dollar rolls could lose money if the price of the mortgage-backed securities sold falls below the agreed upon repurchase price, or if the counterparty is unable to honor the agreement.
Please refer to the fund’s prospectus for a more complete description of the principal risks of investing in the fund.
4. Affiliates and Affiliated Transactions:
Investment Adviser
Charles Schwab Investment Management, Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as the fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement between the investment adviser and the trust. The investment adviser does not receive a fee for the services it performs for the fund. However, the investment adviser is entitled to receive an annual management fee from each of the affiliated Schwab Funds and/or Laudus Funds that serve as underlying funds.
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the fund. The Plan enables the fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc., a broker-dealer affiliate of the investment adviser (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the fund. The fund is not subject to any fee under the Plan.
Expense Limitation
The investment adviser and its affiliates have agreed with the fund, for so long as the investment adviser serves as the investment adviser to the fund, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses, to 0.00%.
The agreement to limit the fund’s total expenses charged is limited to the fund’s direct operating expenses and, therefore, does not apply to acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in the underlying funds.
Investments in Affiliates
The fund may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the fund may invest in other related funds. As of October 31, 2021, the fund’s ownership percentages of other related funds’ shares are:
| Laudus U.S. Large Cap Growth Fund | 3.6% |
| Schwab Core Equity Fund | 15.1% |
| Schwab Small-Cap Equity Fund | 12.0% |
| Schwab U.S. Aggregate Bond Index Fund | 5.4% |
| Schwab Variable Share Price Money Fund, Ultra Shares | 0.5% |
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the fund may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The fund had no interfund borrowing or lending activity during the period.
5. Board of Trustees:
The Board may include people who are officers and/or directors of the investment adviser 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 did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted on the fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the fund was a participant with other funds in the Fund Complex in a joint, syndicated, committed $850 million line of credit (the Syndicated Credit Facility), which matured on September 30, 2021. On September 30, 2021, the Syndicated Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Syndicated Credit Facility, in addition to the interest charged on any borrowings by the fund, the fund 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, which matured on September 30, 2021. On September 30, 2021, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Uncommitted Credit Facility, the fund pays interest on the amount it 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 disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
7. Purchases and Sales of Investment Securities:
For the period ended October 31, 2021, purchases and sales of securities (excluding short-term obligations) were as follows:
| PURCHASES OF SECURITIES | SALES OF SECURITIES |
| $145,160,475 | $41,767,531 |
8. Federal Income Taxes:
As of October 31, 2021, the tax basis cost of the fund’s investments and gross unrealized appreciation and depreciation were as follows:
| TAX COST | GROSS UNREALIZED APPRECIATION | GROSS UNREALIZED DEPRECIATION | NET UNREALIZED APPRECIATION (DEPRECIATION) |
| $626,582,198 | $186,932,073 | ($9,702,686) | $177,229,387 |
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Financial Notes (continued)
8. Federal Income Taxes (continued):
As of October 31, 2021, the components of distributable earnings on a tax basis were as follows:
| UNDISTRIBUTED ORDINARY INCOME | UNDISTRIBUTED LONG-TERM CAPITAL GAINS | NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS | TOTAL |
| $5,263,771 | $15,709,477 | $177,229,387 | $198,202,635 |
The primary difference between book basis and tax basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales. The tax cost of the fund’s investments, disclosed above, has been adjusted from the book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.
Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2021, the fund had no capital loss carryforwards.
The tax basis components of distributions paid during the current and prior fiscal years were as follows:
| CURRENT FISCAL YEAR END DISTRIBUTIONS | PRIOR FISCAL YEAR END DISTRIBUTIONS | |||
| ORDINARY INCOME | LONG-TERM CAPITAL GAINS | ORDINARY INCOME | LONG-TERM CAPITAL GAINS | |
| $7,375,819 | $11,323,693 | $7,431,786 | $19,855,715 | |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations.
As of October 31, 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 October 31, 2021, the fund did not incur any interest or penalties.
9. 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Schwab Capital Trust and Shareholders of Schwab Balanced Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the portfolio holdings, of Schwab Balanced Fund (the “Fund”), one of the funds constituting Schwab Capital Trust, as of October 31, 2021, and the related statement of operations for the year then ended, the related statement of changes in net assets and the financial highlights for the two years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of October 31, 2021, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America. The financial highlights for each of the three years in the period ended October 31, 2019 were audited by other auditors, whose report, dated December 16, 2019, expressed an unqualified opinion on such financial highlights.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Denver, Colorado
December 16, 2021
Denver, Colorado
December 16, 2021
We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.
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Other Federal Tax Information (unaudited)
For corporate shareholders, 24.02% of the fund’s dividend distributions paid during the fiscal year ended October 31, 2021, qualify for the corporate dividends received deduction.
For the fiscal year ended October 31, 2021, the fund designates $1,771,832 of the dividend distributions as qualified dividends for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS Form 1099 of the amounts for use in preparing their 2021 income tax return.
Under section 852(b)(3)(C) of the Internal Revenue Code, the fund hereby designates $11,323,693 as long-term capital gain dividends for the fiscal year ended October 31, 2021.
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Liquidity Risk Management Program (Unaudited)
The Fund has adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Fund’s Board of Trustees (the “Board”) has designated the Fund’s investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.
Under the program, the investment adviser manages a Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. The program is reasonably designed to assess and manage a Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each Fund’s investments is supported by third-party liquidity assessment vendors.
The Fund’s Board reviewed a report at its meeting held on September 20, 2021 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2020, through May 31, 2021, which included individual Fund liquidity metrics. No significant liquidity events impacting the Fund were noted in the report. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing the Fund’s liquidity risk.
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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. (dba Schwab Asset Management) (the investment adviser) with respect to the existing funds in the Trust, including Schwab Balanced Fund (the Fund), and to review certain other agreements pursuant to which the investment adviser 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 the investment adviser, including information about the investment adviser’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 the investment adviser seeking certain relevant information. The responses by the investment adviser 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 the investment adviser 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 the investment adviser 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 the investment adviser and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to the Fund, including both direct and indirect benefits accruing to the investment adviser 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 the investment adviser to the Fund and the resources of the investment adviser and its affiliates dedicated to the Fund. In this regard, the Trustees evaluated, among other things, the investment adviser’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 the investment adviser 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 the investment adviser has made in its infrastructure, including modernizing the investment adviser’s technology and use of data, increasing expertise in key areas (including portfolio management and trade operations), and improving business
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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 the investment adviser’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 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 the investment adviser to the Fund and the resources of the investment adviser 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 total return, portfolio yield (if applicable) 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. 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. 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. The investment adviser reported to the Board, and the Board took into account, the risk assumed by the investment adviser in the development of the Fund and provision of services as well as the competitive marketplace for financial products. The Trustees considered the effects of the investment adviser’s and Schwab’s practice of waiving certain fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered the investment adviser’s contractual commitment to keep the Fund’s expense cap for
so long as the investment adviser serves as the adviser to the Fund. The Trustees also considered fees charged by the investment adviser to 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 the investment adviser provides to these other accounts, as well as differences in the market for these types of accounts. The Trustees noted that shareholders of the Fund indirectly pay their pro rata share of the fees and expenses of the underlying funds in which the Fund invests. 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 the investment adviser 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 the investment adviser 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 considered that the investment adviser is not charging any management fees at the Fund level; it being understood that there is a management fee at the underlying fund level. The Trustees also considered any other benefits derived by the investment adviser from its relationship with the Fund, such as whether, by virtue of its management of the Fund, the investment adviser obtains investment information or other research resources that aid it in providing advisory services to other clients. Also, because the Fund invests a portion of its assets in other funds within the Schwab fund complex, the Trustees considered whether the investment adviser indirectly benefits from the Fund’s investments in other underlying funds managed by the investment adviser. 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 the investment adviser and its affiliates. The Trustees noted that the investment adviser 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 the investment adviser 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 and whether those are passed along to the Fund’s shareholders through (i) the enhancement of services provided
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to the Fund in return for fees paid, including through investments by the investment adviser in the investment adviser’s infrastructure, including modernizing the investment adviser’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 the investment adviser 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, the investment adviser has shared any economies of scale with the Fund by investing in the investment adviser’s infrastructure, as discussed above, over time and that the investment adviser’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. The Trustees considered that the investment adviser and its affiliates may employ contractual expense caps
to protect shareholders from high fees when fund assets are relatively small, for example, in the case of newer funds or funds with investment strategies that are from time to time out of favor, because, among other reasons, shareholders may benefit from the continued availability of such funds at subsidized expense levels. 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 the investment adviser 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 103 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the fund’s Statement of Additional Information, which is available free by calling 1-877-824-5615.
| Independent Trustees | |||
| Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
| Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 103 | 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. | 103 | 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). | 103 | 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. | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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 and Chief Executive Officer (Oct. 2008 – present) and President (Oct. 2008 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), 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 – Oct. 2021), Charles Schwab Investment Management, Inc. | 103 | 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. | 103 | 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 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.; 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 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.; 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 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.; 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 |
| 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., the investment adviser for the trusts in the Fund Complex, and is an employee 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. 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.
Balanced Blended Index A custom blended index developed by Schwab Asset Management that, effective January 29, 2019, is composed of 50% S&P 500 Index, 10% Russell 2000 Index, 37% Bloomberg US Aggregate Bond Index, and 3% Bloomberg US Treasury Bills 1-3 Month Index. From August 1, 2013 through January 28, 2019, the composite was composed of 50% S&P 500 Index, 10% Russell 2000 Index, 25% Bloomberg US Aggregate Bond Index, 12% Bloomberg US Intermediate Aggregate Bond Index and 3% Bloomberg US Treasury Bills 1-3 Month Index. Prior to August 1, 2013 the Balanced Blended Index was composed of 60% S&P 500 Index and 40% Bloomberg US Aggregate Bond Index. Percentages listed may not total to 100% due to rounding.
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.
Bloomberg US Intermediate Aggregate Bond Index An index that represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
Bloomberg US Treasury Bills 1–3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $300 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
FTSE non-US Dollar World Government Bond Index A market capitalization index that measures the total rate of return performance for the government bonds of 22 countries, excluding the U.S., with a remaining maturity of at least 1 year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 1000 Growth Index An index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000 Index An index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell 1000 Value Index An index that measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.
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Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
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Schwab Asset Management
With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Schwab Asset 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., dba Schwab Asset Management
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds
1-877-824-5615
© 2021 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
Member SIPC®
Printed on recycled paper.
| ¹ | State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation. |
| ² | 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. |
Annual Report | October 31, 2021
Schwab Equity Index Funds®
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab U.S. Large-Cap Growth
Index Fund
Index Fund
Schwab U.S. Large-Cap Value
Index Fund
Index Fund
Schwab U.S. Mid-Cap Index Fund
Schwab International Index Fund®
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Eight cost-efficient ways to tap into the power of the stock market for long-term growth potential.
In This Report
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset ManagementTM
Distributor: Charles Schwab & Co., Inc. (Schwab)
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of MSCI Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Schwab. The Industry classifications used in the Portfolio Holdings are sub-categories of Sector classifications.
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Schwab Equity Index Funds | Annual Report
Schwab Equity Index Funds
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
| Total Return for the 12 Months Ended October 31, 2021 | |
| Schwab S&P 500 Index Fund (Ticker Symbol: SWPPX) | 42.89% |
| S&P 500® Index | 42.91% |
| Fund Category: Morningstar Large Blend1 | 41.27% |
| Performance Details | pages 7-9 |
| Schwab 1000 Index Fund (Ticker Symbol: SNXFX) | 43.16% |
| Schwab 1000 Index® | 43.23% |
| Russell 1000® Index | 43.51% |
| Fund Category: Morningstar Large Blend1 | 41.27% |
| Performance Details | pages 10-12 |
| Schwab Small-Cap Index Fund (Ticker Symbol: SWSSX) | 50.82% |
| Russell 2000® Index | 50.80% |
| Fund Category: Morningstar Small Blend1 | 54.25% |
| Performance Details | pages 13-15 |
| Schwab Total Stock Market Index Fund (Ticker Symbol: SWTSX) | 44.01% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% |
| Fund Category: Morningstar Large Blend1 | 41.27% |
| Performance Details | pages 16-18 |
| Total Return for the 12 Months Ended October 31, 2021 | |
| Schwab U.S. Large-Cap Growth Index Fund (Ticker Symbol: SWLGX) | 43.14% |
| Russell 1000® Growth Index | 43.21% |
| Fund Category: Morningstar Large Growth1 | 39.55% |
| Performance Details | pages 19-21 |
| Schwab U.S. Large-Cap Value Index Fund (Ticker Symbol: SWLVX) | 43.70% |
| Russell 1000® Value Index | 43.76% |
| Fund Category: Morningstar Large Value1 | 43.70% |
| Performance Details | pages 22-24 |
| Schwab U.S. Mid-Cap Index Fund (Ticker Symbol: SWMCX) | 45.35% |
| Russell Midcap® Index | 45.40% |
| Fund Category: Morningstar Mid-Cap Blend1 | 44.79% |
| Performance Details | pages 25-27 |
| Schwab International Index Fund2 (Ticker Symbol: SWISX) | 34.24% |
| MSCI EAFE® Index (Net)3 | 34.18% |
| Fund Category: Morningstar Foreign Large Blend1 | 31.56% |
| Performance Details | pages 28-30 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
| 1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 2 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations. See financial note 2 for more information. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
2
Schwab Equity Index Funds | Annual Report
Schwab Equity Index Funds
From the President
Jonathan de St. Paer
President of Schwab Asset
Management and the funds
covered in this report.
President of Schwab Asset
Management and the funds
covered in this report.
Dear Shareholder,
During the 12-month reporting period ended October 31, 2021, global equity markets generally gained ground as economies began to recover from COVID-19 pandemic lockdowns and corporations generally posted stronger-than-expected profits. Small-cap stocks tended to outpace large-cap stocks. The S&P 500® Index, a bellwether for the overall U.S. stock market, rose 42.9%, reaching record territory as the period ended, while the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.2%. A far more complex story lay beneath those broad gains. Skyrocketing oil and gas prices propelled the energy sector ahead of the pack, while the financials sector sharply outperformed on strong earnings and rising interest rates. Other cyclically sensitive sectors, such as the information technology and real estate sectors, also outperformed, while more traditionally defensive sectors, such as the utilities and consumer staples sectors, trailed by comparison.
While there are always winners and losers among various markets, sectors, and individual stocks, today’s top performers are rarely the same as yesterday’s or tomorrow’s. At Schwab Asset Management, we believe the best defense against a shifting investment landscape is a portfolio that’s diversified across a wide variety of asset classes and geographic regions. We’re committed to providing a range of foundational products that are designed to suit a variety of risk appetites to help you reach your long-term financial goals. The Schwab Equity Index Funds provide access to broad segments of the equities markets with different risk and return profiles, including small-cap, mid-cap, and large-cap stocks, those oriented toward value or growth, and equities from both U.S. and international markets. In addition, the Schwab Equity Index Funds can help investors achieve their financial goals by keeping investing costs down. The funds have among the lowest expenses in the industry, along with no investment minimums.
Thank you for investing with Schwab Asset Management, and for trusting us to help you achieve your financial goals. For more information about the Schwab Equity Index Funds, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.schwabassetmanagement.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
“ The Schwab Equity Index Funds provide access to broad segments of the equities markets with different risk and return profiles, including small-cap, mid-cap, and large-cap stocks, those oriented toward value or growth, and equities from both U.S. and international markets.”
Past performance is no guarantee of future results.
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Management views may have changed since the report date.
Schwab Asset Management is the dba name for Charles Schwab Investment Management, Inc., the investment adviser for Schwab Funds, Laudus Funds, and Schwab ETFs.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
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Schwab Equity Index Funds | Annual Report
Schwab Equity Index Funds
The Investment Environment
For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 42.91% with cyclically sensitive sectors, such as the energy, financials, information technology, and real estate sectors, outperforming traditionally defensive sectors, such as the utilities and consumer staples sectors. U.S. small-cap stocks outperformed U.S. large-cap stocks, with the Russell 2000® Index and the Russell 1000® Index returning 50.80% and 43.51%, respectively. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. Among international markets, the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.18% for the reporting period.
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. U.S. gross domestic product (GDP) rose at an annualized rate of 4.3% for the fourth quarter of 2020, 6.4% for the first quarter of 2021, and 6.7% for the second quarter of 2021 before falling back to 2.0% for the third quarter of 2021 amid fading government stimuli, persistent inflation, and a new surge in COVID-19 cases. Unemployment, which skyrocketed in April 2020, fell over the reporting period. Inflation, which had remained well below the Fed’s traditional 2% target until it jumped in March 2021, continued to rise through June 2021 and remained elevated through October 2021, largely due to 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.
Asset Class Performance Comparison % returns during the 12 months ended October 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 an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and Schwab Asset Management.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views may have changed since the report date.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
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Schwab Equity Index Funds | Annual Report
Schwab Equity Index Funds
The Investment Environment (continued)
Outside the United States, global economies also displayed resilience but were somewhat more constrained amid continuing struggles against COVID-19 and the emergence and spread of the Delta variant. Oil prices rose through most of the reporting period, except for a dip in July and August, on growing demand and reduced production. In the eurozone, GDP growth jumped in the third quarter of 2020, regaining much of its losses from the second quarter, but turned slightly negative for both the fourth quarter of 2020 and the first quarter of 2021. GDP growth turned positive for the second and third quarters of 2021. The United Kingdom, which was particularly hard-hit by the COVID-19 pandemic, suffered its biggest slump in more than three centuries over the course of 2020, effectively wiping out its growth over the past seven years, but posted a small positive gain in GDP for the first quarter of 2021. The United Kingdom removed many of the country’s stringent restrictions during the summer and posted a strong gain in GDP growth for the second quarter of 2021. Japan’s economy, after rebounding sharply in the third quarter of 2020, posted a positive, albeit smaller, gain in the fourth quarter of 2020. Japan’s economy subsequently contracted in the first quarter of 2021 on a resurgence of COVID-19 cases and slow COVID-19 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, maintained positive GDP growth in the fourth quarter of 2020. China’s GDP growth accelerated sharply for the first quarter of 2021 before easing for the subsequent two quarters in part because of the political landscape and an emphasis on domestic consumption over globalization. India, after plunging into one of the worst recessions of any major economy, saw its first positive gain in GDP in the fourth quarter of 2020 and posted a sharp jump in GDP growth for the second quarter of 2021.
For the most part, central banks around the world, including the Fed, 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 United States, 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 needed to achieve a full recovery. The Fed maintained the federal funds rate in a range of 0.00% to 0.25% throughout the reporting period. However, as inflation continued to rise for most of 2021, the Fed tightened its stance, signaling that—due to significant progress made on its twin goals of maximum employment and price stability—it could start to reduce its bond-buying program as soon as late 2021 and could begin to raise interest rates in the next 18 months. In developed international markets, most central banks were similarly accommodative while acknowledging that conditions were changing. The European Central Bank held interest rates at 0.00%, unchanged since March 2016, but reduced the pace of its asset purchase program instituted 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—despite citing moderately improving conditions—vowed to continue to maintain stability in its financial markets through its ongoing programs. The Bank of England maintained its key official bank rate at 0.1% and continued to support its bond-buying program.
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Schwab Equity Index Funds | Annual Report
Schwab Equity Index Funds
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 funds. 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. |
 | Jeremy Brown, Portfolio Manager, is responsible for the day-to-day co-management of the the funds, except for the Schwab International Index Fund. Prior to joining Schwab in 2017, Mr. Brown spent six years with ALPS Advisors, Inc. in Denver, most recently as a senior analyst on the ETF portfolio management and research team where he performed portfolio management, trading, and analytics/research functions for ALPS ETFs and passive funds. Additionally, Mr. Brown led a number of investment research, commentary, industry trend analysis, and sales and marketing support initiatives. |
 | Chuck Craig, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab International Index 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. |
 | Ferian Juwono, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the the funds, except for the Schwab International Index Fund. Prior to joining Schwab in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors) where he spent more than three years as a portfolio manager, managing equity index funds for institutional clients, and two years as a senior business analyst. Prior to that, Mr. Juwono worked for more than four years as a senior financial analyst with Union Bank of California. |
 | Jane Qin, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab International Index Fund. Prior to joining 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 Schwab International Index 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). |
 | Sabya Sinha, Portfolio Manager, is responsible for the day-to-day co-management of the the funds, except for the Schwab International Index Fund. Prior to joining Schwab in 2015, Mr. Sinha spent a year at F-Squared Investments on the product development and analytics team. Prior to F-Squared, he worked at IndexIQ Advisors as a senior index portfolio manager for three years and for Bank of America’s Columbia Management subsidiary as a portfolio manager for three years. Mr. Sinha also spent time as a software consultant at DPM Mellon, LLC and an equity trader at Jane Street Capital. |
6
Schwab Equity Index Funds | Annual Report
Schwab S&P 500 Index Fund as of October 31, 2021
The Schwab S&P 500 Index Fund’s (the fund) goal is to track the total return of the S&P 500® Index (the index). The index includes the stocks of 500 leading U.S. publicly traded companies from a broad range of industries. To pursue its goal, the fund seeks to replicate the performance of the index by giving the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. Within the index, the energy and financials sectors were the top performers, while the utilities and consumer staples sectors underperformed by comparison, although both still returned double digits.
Performance. The fund generally tracked the index for the reporting period. The fund returned 42.89% for the 12-month reporting period ended October 31, 2021, compared with the index, which returned 42.91%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Over the reporting period, no sectors detracted from the returns of the index or the fund. However, the utilities sector was the smallest contributor to the total return of the fund. Stocks in the utilities sector represented an average weight of approximately 3% of the fund’s investments and returned approximately 11% for the reporting period. One example from this sector is WEC Energy Group, Inc., an energy and natural gas company, which detracted from the total return of the fund. The fund’s holdings of WEC Energy Group, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately -8% for the reporting period.
The materials sector was another small contributor to the total return of the fund, representing an average weight of approximately 3% of the fund’s investments and returning approximately 37% for the reporting period.
The information technology sector contributed the most to the total return of the fund. Information technology stocks represented an average weight of approximately 27% of the fund’s investments and returned approximately 47% for the reporting period. One example from this sector is Microsoft Corp., which develops, manufactures, licenses, sells, and supports software products. The fund’s holdings of Microsoft Corp. represented an average weight of approximately 6% of the fund’s investments and returned approximately 65% for the reporting period.
The financials sector also contributed to the total return of the fund, representing an average weight of approximately 11% of the fund’s investments and returning approximately 72% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
7
Schwab Equity Index Funds | Annual Report
Schwab S&P 500 Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab S&P 500 Index Fund (5/19/97) | 42.89% | 18.89% | 16.14% |
| S&P 500® Index | 42.91% | 18.93% | 16.21% |
| Fund Category: Morningstar Large Blend2 | 41.27% | 17.14% | 14.63% |
| Fund Expense Ratio3: 0.02% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership – “Standard & Poor’s®,” “S&P®,” and “S&P 500®” are registered trademarks of Standard & Poor’s Financial Services LLC (S&P), and “Dow Jones®” is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones) and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by Charles Schwab Investment Management, Inc. The “S&P 500® Index” is a product of S&P Dow Jones Indices LLC or its affiliates, and has been licensed for use by Charles Schwab Investment Management, Inc. The Schwab S&P 500 Index Fund is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates, and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, nor their respective affiliates make any representation regarding the advisability of investing in the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. |
8
Schwab Equity Index Funds | Annual Report
Schwab S&P 500 Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 508 |
| Weighted Average Market Cap (millions) | $630,500 |
| Price/Earnings Ratio (P/E) | 24.5 |
| Price/Book Ratio (P/B) | 4.5 |
| Portfolio Turnover Rate | 3% |
Sector Weightings % of Investments2
Top Equity Holdings % of Net Assets3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | Excludes derivatives. |
| 2 | 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. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
9
Schwab Equity Index Funds | Annual Report
Schwab 1000 Index Fund as of October 31, 2021
The Schwab 1000 Index Fund’s (the fund) goal is to match the total return of the Schwab 1000 Index® (the index). The index includes the 1,000 largest stocks of publicly traded companies in the United States, with size being determined by market capitalization (total market value of all shares outstanding). To pursue its goal, the fund seeks to replicate the performance of the index by giving the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. Within the index, the energy and financials sectors were the top performers, while the utilities and consumer staples sectors underperformed by comparison, although both still returned double digits.
Performance. The fund generally tracked the index for the reporting period. The fund returned 43.16% for the 12-month reporting period ended October 31, 2021, compared with the index, which returned 43.23%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Over the reporting period, no sectors detracted from the returns of the index or the fund. However, the utilities sector was the smallest contributor to the total return of the fund. Stocks in the utilities sector represented an average weight of approximately 3% of the fund’s investments and returned approximately 11% for the reporting period. One example from this sector is WEC Energy Group, Inc., an energy and natural gas company, which detracted from the total return of the fund. The fund’s holdings of WEC Energy Group, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately -8% for the reporting period.
The materials sector was another small contributor to the total return of the fund, representing an average weight of approximately 3% of the fund’s investments and returning approximately 38% for the reporting period.
The information technology sector contributed the most to the total return of the fund. Information technology stocks represented an average weight of approximately 28% of the fund’s investments and returned approximately 46% for the reporting period. One example from this sector is Microsoft Corp., which develops, manufactures, licenses, sells, and supports software products. The fund’s holdings of Microsoft Corp. represented an average weight of approximately 5% of the fund’s investments and returned approximately 65% for the reporting period.
The financials sector also contributed to the total return of the fund, representing an average weight of approximately 11% of the fund’s investments and returning approximately 73% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
10
Schwab Equity Index Funds | Annual Report
Schwab 1000 Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab 1000 Index Fund (4/2/91) | 43.16% | 19.00% | 16.01% |
| Schwab 1000 Index® | 43.23% | 19.05% | 16.19% |
| Russell 1000® Index | 43.51% | 19.16% | 16.30% |
| Fund Category: Morningstar Large Blend2 | 41.27% | 17.14% | 14.63% |
| Fund Expense Ratio3: 0.05% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. |
11
Schwab Equity Index Funds | Annual Report
Schwab 1000 Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 1000 2 |
| Weighted Average Market Cap (millions) | $557,167 |
| Price/Earnings Ratio (P/E) | 24.0 |
| Price/Book Ratio (P/B) | 4.5 |
| Portfolio Turnover Rate | 5% 3 |
Sector Weightings % of Investments4
Top Equity Holdings % of Net Assets5
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | Excludes derivatives. |
| 2 | As a result of the Schwab 1000 Index®’s once per year reconstitution and the effects of certain corporate actions, the fund may hold more or less than 1,000 securities. |
| 3 | Portfolio turnover rate excludes in-kind transactions. |
| 4 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 5 | This list is not a recommendation of any security by the investment adviser. |
12
Schwab Equity Index Funds | Annual Report
Schwab Small-Cap Index Fund as of October 31, 2021
The Schwab Small-Cap Index Fund’s (the fund) goal is to track the performance of a benchmark index that measures the total return of small-capitalization U.S. stocks. To pursue its goal, the fund generally invests in stocks that are included in the Russell 2000® Index (the index). The fund seeks to replicate the performance of the index by giving the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Within the index, the energy and communication services sectors were the top performers, while the health care and utilities sectors underperformed by comparison, although both still returned double digits.
Performance. The fund generally tracked the index for the reporting period. The fund returned 50.82% for the 12-month reporting period ended October 31, 2021, compared with the index, which returned 50.80%.
Contributors and Detractors. The industrials sector contributed the most to the total return of the fund. Stocks in the industrials sector represented an average weight of approximately 15% of the fund’s investments and returned approximately 61% for the reporting period. One example from this sector is Plug Power, Inc., which designs and manufactures fuel cell systems. The fund’s holdings of Plug Power, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately 128% for the reporting period.
The financials sector also contributed to the total return of the fund, representing an average weight of approximately 15% of the fund’s investments and returning approximately 58% for the reporting period.
Over the reporting period, no sectors detracted from the returns of the index or the fund. However, the utilities sector was the smallest contributor to the total return of the fund. Stocks in the utilities sector represented an average weight of approximately 3% of the fund’s investments and returned approximately 20% for the reporting period. One example from this sector is Cadiz, Inc., a water resource company, which detracted from the total return of the fund. The fund’s holdings of Cadiz, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately -36% for the reporting period.
The consumer staples sector was another small contributor to the total return of the fund, representing an average weight of approximately 3% of the fund’s investments and returning approximately 38% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
13
Schwab Equity Index Funds | Annual Report
Schwab Small-Cap Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Small-Cap Index Fund (5/19/97) | 50.82% | 15.58% | 13.51% |
| Russell 2000® Index | 50.80% | 15.52% | 13.50% |
| Small-Cap Spliced Index | 50.80% | 15.52% | 13.45% |
| Fund Category: Morningstar Small Blend2 | 54.25% | 13.77% | 12.64% |
| Fund Expense Ratio3: 0.04% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. 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.
Index ownership – “Russell 2000®” is a registered mark of the Frank Russell Company (Russell) and has been licensed for use by the Schwab Small-Cap Index Fund. The Schwab Small-Cap Index Fund is not sponsored, endorsed, sold or promoted by Russell and Russell makes no representation regarding the advisability of investing in the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. |
14
Schwab Equity Index Funds | Annual Report
Schwab Small-Cap Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 2,029 |
| Weighted Average Market Cap (millions) | $3,562 |
| Price/Earnings Ratio (P/E) | 16.3 |
| Price/Book Ratio (P/B) | 2.5 |
| Portfolio Turnover Rate | 19% 2 |
Sector Weightings % of Investments3
Top Equity Holdings % of Net Assets4
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than many other asset classes.
| 1 | Excludes derivatives. |
| 2 | Portfolio turnover rate excludes in-kind transactions. |
| 3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 4 | This list is not a recommendation of any security by the investment adviser. |
15
Schwab Equity Index Funds | Annual Report
Schwab Total Stock Market Index Fund as of October 31, 2021
The Schwab Total Stock Market Index Fund’s (the fund) goal is to track the total return of the entire U.S. stock market, as measured by the Dow Jones U.S. Total Stock Market IndexSM (the index). The index includes all publicly traded stocks of companies headquartered in the United States for which pricing information is readily available. To pursue its goal, the fund uses a sampling investment approach that involves investing in a representative sample of securities included in the index that, when taken together, are expected to perform similarly to the index as a whole. Due to the use of representative sampling, the fund may not hold all of the securities in the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. Within the index, the energy and financials sectors were the top performers, while the utilities and consumer staples sectors underperformed by comparison, although both still returned double digits.
Performance. The fund generally tracked the index for the reporting period. The fund returned 44.01% for the 12-month reporting period ended October 31, 2021, compared with the index, which returned 44.07%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Over the reporting period, no sectors detracted from the returns of the index or the fund. However, the utilities sector was the smallest contributor to the total return of the fund. Stocks in the utilities sector represented an average weight of approximately 3% of the fund’s investments and returned approximately 12% for the reporting period. One example from this sector is WEC Energy Group, Inc., an energy and natural gas company, which detracted from the total return of the fund. The fund’s holdings of WEC Energy Group, Inc. represented an average weight of less than 1% of the fund’s holdings and returned approximately -8% for the reporting period.
The materials sector was another small contributor to the total return of the fund, representing an average weight of approximately 3% of the fund’s investments and returning approximately 40% for the reporting period.
The information technology sector contributed the most to the total return of the fund. Information technology stocks represented an average weight of approximately 27% of the fund’s investments and returned approximately 47% for the reporting period. One example from this sector is Microsoft Corp., which develops, manufactures, licenses, sells, and supports software products. The fund’s holdings of Microsoft Corp. represented an average weight of approximately 5% of the fund’s investments and returned approximately 65% for the reporting period.
The financials sector also contributed to the total return of the fund, representing an average weight of approximately 12% of the fund’s investments and returning approximately 72% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
16
Schwab Equity Index Funds | Annual Report
Schwab Total Stock Market Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Total Stock Market Index Fund (6/1/99) | 44.01% | 18.82% | 16.00% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 16.04% |
| Fund Category: Morningstar Large Blend2 | 41.27% | 17.14% | 14.63% |
| Fund Expense Ratio3: 0.03% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership – “Standard & Poor’s®” and “S&P®” are registered trademarks of Standard & Poor’s Financial Services LLC (S&P), and “Dow Jones®” is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones) and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by Charles Schwab Investment Management, Inc. The “Dow Jones U.S. Total Stock Market IndexSM” is a product of S&P Dow Jones Indices LLC or its affiliates, and has been licensed for use by Charles Schwab Investment Management, Inc. The Schwab Total Stock Market Index Fund is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates, and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, nor their respective affiliates make any representation regarding the advisability of investing in the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. |
17
Schwab Equity Index Funds | Annual Report
Schwab Total Stock Market Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 3,417 |
| Weighted Average Market Cap (millions) | $520,875 |
| Price/Earnings Ratio (P/E) | 23.3 |
| Price/Book Ratio (P/B) | 4.2 |
| Portfolio Turnover Rate | 3% |
Sector Weightings % of Investments2
Top Equity Holdings % of Net Assets3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | Excludes derivatives. |
| 2 | 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. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
18
Schwab Equity Index Funds | Annual Report
Schwab U.S. Large-Cap Growth Index Fund as of October 31, 2021
The Schwab U.S. Large-Cap Growth Index Fund’s (the fund) goal is to track the performance of a benchmark index that measures the total return of large-capitalization U.S. growth stocks. To pursue its goal, the fund generally invests in stocks that are included in the Russell 1000® Growth Index (the index). The fund seeks to replicate the performance of the index by generally giving the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. Within the index, the energy and financials sectors were the top performers, while the materials and consumer staples sectors underperformed by comparison, although both still returned double digits.
Performance. The fund generally tracked the index for the reporting period. The fund returned 43.14% during the 12-month reporting period ended October 31, 2021, compared with the index, which returned 43.21%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Over the reporting period, no sectors detracted from the returns of the index or the fund. However, the utilities sector was the smallest contributor to the total return of the fund. Stocks in the utilities sector represented an average weight of less than 1% of the fund’s investments and returned approximately 30% for the reporting period. One example from this sector is Brookfield Renewable Corp., a renewable power company. The fund’s Class A holdings of Brookfield Renewable Corp. represented an average weight of less than 1% of the fund’s investments and returned approximately 3% for the reporting period.
The energy sector was another small contributor to the total return of the fund, representing an average weight of less than 1% of the fund’s investments and returning approximately 98% for the reporting period.
The information technology sector contributed the most to the total return of the fund. Information technology stocks represented an average weight of approximately 45% of the fund’s investments and returned approximately 49% for the reporting period. One example from this sector is Microsoft Corp., which develops, manufactures, licenses, sells, and supports software products. The fund’s holdings of Microsoft Corp. represented an average weight of approximately 10% of the fund’s investments and returned approximately 65% for the reporting period.
The consumer discretionary sector also contributed to the total return of the fund, representing an average weight of approximately 17% of the fund’s investments and returning approximately 40% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
19
Schwab Equity Index Funds | Annual Report
Schwab U.S. Large-Cap Growth Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (December 20, 2017 – October 31, 2021)1
Average Annual Returns1
| Fund and Inception Date | 1 Year | 3 Years | Since Inception |
| Fund: Schwab U.S. Large-Cap Growth Index Fund (12/20/17) | 43.14% | 29.34% | 23.93% |
| Russell 1000® Growth Index | 43.21% | 29.41% | 23.99% |
| Fund Category: Morningstar Large Growth2 | 39.55% | 26.53% | N/A |
| Fund Expense Ratio3: 0.035% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership – The Russell 1000® Growth Index is a registered mark of the Frank Russell Company (Russell) and has been licensed for use by the Schwab U.S. Large-Cap Growth Index Fund. The Schwab U.S. Large-Cap Growth Index Fund is not sponsored, endorsed, sold or promoted by Russell and Russell makes no representation regarding the advisability of investing in the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. |
20
Schwab Equity Index Funds | Annual Report
Schwab U.S. Large-Cap Growth Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 503 |
| Weighted Average Market Cap (millions) | $918,292 |
| Price/Earnings Ratio (P/E) | 34.7 |
| Price/Book Ratio (P/B) | 13.4 |
| Portfolio Turnover Rate | 18% |
Sector Weightings % of Investments2
Top Equity Holdings % of Net Assets4
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | Excludes derivatives. |
| 2 | 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. |
| 3 | Less than 0.05%. |
| 4 | This list is not a recommendation of any security by the investment adviser. |
21
Schwab Equity Index Funds | Annual Report
Schwab U.S. Large-Cap Value Index Fund as of October 31, 2021
The Schwab U.S. Large-Cap Value Index Fund’s (the fund) goal is to track the performance of a benchmark index that measures the total return of large-capitalization U.S. value stocks. To pursue its goal, the fund generally invests in stocks that are included in the Russell 1000® Value Index (the index). The fund seeks to replicate the performance of the index by generally giving the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. Within the index, the energy and financials sectors were the top performers, while the utilities and consumer staples sectors underperformed by comparison, although both still returned double digits.
Performance. The fund generally tracked the index for the reporting period. The fund returned 43.70% during the 12-month reporting period ended October 31, 2021, compared with the index, which returned 43.76%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Over the reporting period, no sectors detracted from the returns of the index or the fund. However, the utilities sector was the smallest contributor to the total return of the fund. Stocks in the utilities sector represented an average weight of approximately 5% of the fund’s investments and returned approximately 11% for the reporting period. One example from this sector is WEC Energy Group, Inc., an energy and natural gas company, which detracted from the total return of the fund. The fund’s holdings of WEC Energy Group, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately -8% for the reporting period.
The consumer staples sector was another small contributor to the total return of the fund, representing an average weight of approximately 7% of the fund’s investments and returning approximately 19% for the reporting period.
The financials sector contributed the most to the total return of the fund. Financials stocks represented an average weight of approximately 21% of the fund’s investments and returned approximately 74% for the reporting period. One example from this sector is JPMorgan Chase & Co., which provides global financial services and retail banking. The fund’s holdings of JPMorgan Chase & Co. represented an average weight of approximately 2% of the fund’s investments and returned approximately 78% for the reporting period.
The industrials sector also contributed to the total return of the fund, representing an average weight of approximately 13% of the fund’s investments and returning approximately 43% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
22
Schwab Equity Index Funds | Annual Report
Schwab U.S. Large-Cap Value Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (December 20, 2017 – October 31, 2021)1
Average Annual Returns1
| Fund and Inception Date | 1 Year | 3 Years | Since Inception |
| Fund: Schwab U.S. Large-Cap Value Index Fund (12/20/17) | 43.70% | 13.79% | 10.19% |
| Russell 1000® Value Index | 43.76% | 13.90% | 10.29% |
| Fund Category: Morningstar Large Value2 | 43.70% | 13.67% | N/A |
| Fund Expense Ratio3: 0.035% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership – The Russell 1000® Value Index is a registered mark of the Frank Russell Company (Russell) and has been licensed for use by the Schwab U.S. Large-Cap Value Index Fund. The Schwab U.S. Large-Cap Value Index Fund is not sponsored, endorsed, sold or promoted by Russell and Russell makes no representation regarding the advisability of investing in the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. |
23
Schwab Equity Index Funds | Annual Report
Schwab U.S. Large-Cap Value Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 850 |
| Weighted Average Market Cap (millions) | $165,794 |
| Price/Earnings Ratio (P/E) | 17.8 |
| Price/Book Ratio (P/B) | 2.5 |
| Portfolio Turnover Rate | 20% |
Sector Weightings % of Investments2
Top Equity Holdings % of Net Assets3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | Excludes derivatives. |
| 2 | 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. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
24
Schwab Equity Index Funds | Annual Report
Schwab U.S. Mid-Cap Index Fund as of October 31, 2021
The Schwab U.S. Mid-Cap Index Fund’s (the fund) goal is to track the performance of a benchmark index that measures the total return of mid-capitalization U.S. stocks. To pursue its goal, the fund generally invests in securities that are included in the Russell Midcap® Index (the index). The fund seeks to replicate the performance of the index by generally giving the same weight to a given security as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Within the index, the energy and financials sectors were the top performers, while the utilities and consumer staples sectors underperformed by comparison, although both still returned double digits.
Performance. The fund generally tracked the index for the reporting period. The fund returned 45.35% during the 12-month reporting period ended October 31, 2021, compared with the index, which returned 45.40%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Over the reporting period, no sectors detracted from the returns of the index or the fund. However, the consumer staples sector was the smallest contributor to the total return of the fund. Consumer staples stocks represented an average weight of approximately 4% of the fund’s investments and returned approximately 11% for the reporting period. One example from this sector is The Clorox Co., a global manufacturer of household consumer products, which detracted from the total return of the fund. The fund’s holdings of The Clorox Co. represented an average weight of less than 1% of the fund’s investments and returned approximately -19% for the reporting period.
The utilities sector was another small contributor to the total return of the fund, representing an average weight of approximately 5% of the fund’s investments and returning approximately 10% for the reporting period.
The information technology sector contributed the most to the total return of the fund. Information technology stocks represented an average weight of approximately 19% of the fund’s investments and returned approximately 51% for the reporting period. One example from this sector is Palo Alto Networks, Inc., a cybersecurity company. The fund’s holdings of Palo Alto Networks, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately 130% for the reporting period.
The financials sector also contributed to the total return of the fund, representing an average weight of approximately 12% of the fund’s investments and returning approximately 71% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
25
Schwab Equity Index Funds | Annual Report
Schwab U.S. Mid-Cap Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (December 20, 2017 – October 31, 2021)1
Average Annual Returns1
| Fund and Inception Date | 1 Year | 3 Years | Since Inception |
| Fund: Schwab U.S. Mid-Cap Index Fund (12/20/17) | 45.35% | 19.77% | 14.69% |
| Russell Midcap® Index | 45.40% | 19.85% | 14.76% |
| Fund Category: Morningstar Mid-Cap Blend2 | 44.79% | 16.37% | N/A |
| Fund Expense Ratio3: 0.04% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership – The Russell Midcap® Index is a registered mark of the Frank Russell Company (Russell) and has been licensed for use by the Schwab U.S. Mid-Cap Index Fund. The Schwab U.S. Mid-Cap Index Fund is not sponsored, endorsed, sold or promoted by Russell and Russell makes no representation regarding the advisability of investing in the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. |
26
Schwab Equity Index Funds | Annual Report
Schwab U.S. Mid-Cap Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 832 |
| Weighted Average Market Cap (millions) | $25,255 |
| Price/Earnings Ratio (P/E) | 21.0 |
| Price/Book Ratio (P/B) | 3.4 |
| Portfolio Turnover Rate | 14% |
Sector Weightings % of Investments2
Top Equity Holdings % of Net Assets3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | Excludes derivatives. |
| 2 | 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. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
27
Schwab Equity Index Funds | Annual Report
Schwab International Index Fund as of October 31, 2021
The Schwab International Index Fund’s (the fund) goal is to track the performance of a benchmark index that measures the total return of large, publicly traded non-U.S. companies from countries with developed equity markets outside of the United States. To purse its goal, the fund generally invests in stocks that are included in the MSCI EAFE® Index (the index). The index includes stocks from developed markets in Europe, Australasia and the Far East. To pursue its goal, the fund seeks to replicate the performance of the index by giving the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way.
Performance. The fund generally tracked the index for the reporting period. The fund returned 34.24% for the 12-month reporting period ended October 31, 2021, compared with the index, which returned 34.18%1.
Contributors and Detractors. From a country perspective, stocks from the United Kingdom contributed the most to the total return of the fund. Stocks from the United Kingdom represented an average weight of approximately 15% of the fund’s investments and returned approximately 43% in U.S. dollar terms for the reporting period. One example from this market is BP plc, an oil and gas company. The fund’s holdings of BP plc represented an average weight of less than 1% of the fund’s investments and returned approximately 100% in U.S. dollar terms for the reporting period.
Stocks from Japan also contributed to the total return of the fund, representing an average weight of approximately 24% of the fund’s investments and returning approximately 20% in U.S. dollar terms for the reporting period.
The stock from the United States, Jackson Financial, Inc., detracted from the total return of the fund. The fund’s Class A holdings of Jackson Financial, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately -16% for the reporting period. Jackson Financial, Inc. was held by the fund for a limited time in September 2021 after it was separated from Prudential plc, an insurance company headquartered in the United Kingdom.
While there were no additional markets that detracted from the total return of the fund, the stock from South Africa, Thungela Resources Ltd., was the smallest contributor to the total return of the fund. The fund’s holdings of Thungela Resources Ltd. represented an average weight of less than 1% of the fund’s investments and returned approximately 17% in U.S. dollar terms for the reporting period. Thungela Resources Ltd. was held by the fund for a limited time in June 2021 after the South African coal business was spun off from Anglo American plc, a global mining company headquartered in the United Kingdom.
Management views and portfolio holdings may have changed since the report date.
| 1 | The total return cited for the index is calculated net of foreign withholding taxes. |
28
Schwab Equity Index Funds | Annual Report
Schwab International Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1,2
Average Annual Total Returns1,2
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab International Index Fund (5/19/97) | 34.24% | 9.92% | 7.52% |
| MSCI EAFE® Index (Net)3 | 34.18% | 9.79% | 7.37% |
| International Spliced Index | 34.18% | 9.79% | 7.42% |
| Fund Category: Morningstar Foreign Large Blend4 | 31.56% | 9.42% | 7.35% |
| Fund Expense Ratio5: 0.06% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. 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.
Index ownership – “MSCI EAFE®” is a registered mark of MSCI and has been licensed for use by the Schwab International Index Fund. The Schwab International Index Fund is not sponsored, endorsed, sold or promoted by MSCI and MSCI bears no liability with respect to the fund. The Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | The fund’s performance relative to the index may be affected by fair-value pricing. See financial note 2 for more information. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 5 | As stated in the prospectus. |
29
Schwab Equity Index Funds | Annual Report
Schwab International Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 856 |
| Weighted Average Market Cap (millions) | $83,655 |
| Price/Earnings Ratio (P/E) | 16.7 |
| Price/Book Ratio (P/B) | 1.9 |
| Portfolio Turnover Rate | 3% |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Excludes derivatives. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
30
Schwab Equity Index Funds | Annual Report
Schwab Equity Index Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2021 and held through October 31, 2021.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| EXPENSE RATIO (ANNUALIZED) 1 | BEGINNING ACCOUNT VALUE AT 5/1/21 | ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 10/31/21 | EXPENSES PAID DURING PERIOD 5/1/21-10/31/212 | |
| Schwab S&P 500 Index Fund | ||||
| Actual Return | 0.02% | $1,000.00 | $1,109.00 | $0.11 |
| Hypothetical 5% Return | 0.02% | $1,000.00 | $1,025.10 | $0.10 |
| Schwab 1000 Index Fund | ||||
| Actual Return | 0.05% | $1,000.00 | $1,104.10 | $0.27 |
| Hypothetical 5% Return | 0.05% | $1,000.00 | $1,024.95 | $0.26 |
| Schwab Small-Cap Index Fund | ||||
| Actual Return | 0.04% | $1,000.00 | $1,018.60 | $0.20 |
| Hypothetical 5% Return | 0.04% | $1,000.00 | $1,025.00 | $0.20 |
| Schwab Total Stock Market Index Fund | ||||
| Actual Return | 0.03% | $1,000.00 | $1,097.80 | $0.16 |
| Hypothetical 5% Return | 0.03% | $1,000.00 | $1,025.05 | $0.15 |
| Schwab U.S. Large-Cap Growth Index Fund | ||||
| Actual Return | 0.035% | $1,000.00 | $1,151.80 | $0.19 |
| Hypothetical 5% Return | 0.035% | $1,000.00 | $1,025.03 | $0.18 |
| Schwab U.S. Large-Cap Value Index Fund | ||||
| Actual Return | 0.035% | $1,000.00 | $1,054.40 | $0.18 |
| Hypothetical 5% Return | 0.035% | $1,000.00 | $1,025.03 | $0.18 |
| Schwab U.S. Mid-Cap Index Fund | ||||
| Actual Return | 0.04% | $1,000.00 | $1,073.10 | $0.21 |
| Hypothetical 5% Return | 0.04% | $1,000.00 | $1,025.00 | $0.20 |
| Schwab International Index Fund | ||||
| Actual Return | 0.06% | $1,000.00 | $1,044.40 | $0.31 |
| Hypothetical 5% Return | 0.06% | $1,000.00 | $1,024.90 | $0.31 |
| 1 | Based on the most recent six-month expense ratio. |
| 2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
31
Schwab Equity Index Funds | Annual Report
Schwab S&P 500 Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $50.75 | $47.17 | $42.41 | $40.23 | $33.38 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.90 | 1.02 | 0.92 | 0.80 | 0.74 | |
| Net realized and unrealized gains (losses) | 20.60 | 3.52 | 4.86 | 2.12 | 6.99 | |
| Total from investment operations | 21.50 | 4.54 | 5.78 | 2.92 | 7.73 | |
| Less distributions: | ||||||
| Distributions from net investment income | (1.04) | (0.87) | (0.84) | (0.72) | (0.69) | |
| Distributions from net realized gains | — | (0.09) | (0.18) | (0.02) | (0.19) | |
| Total distributions | (1.04) | (0.96) | (1.02) | (0.74) | (0.88) | |
| Net asset value at end of period | $71.21 | $50.75 | $47.17 | $42.41 | $40.23 | |
| Total return | 42.89% | 9.69% | 14.30% | 7.29% | 23.57% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.02% | 0.02% | 0.02% 2 | 0.03% | 0.05% 3 | |
| Net operating expenses | N/A | N/A | N/A | N/A 4 | 0.05% 3 | |
| Net investment income (loss) | 1.42% | 2.11% | 2.11% | 1.88% | 2.01% | |
| Portfolio turnover rate | 3% | 4% | 3% | 2% | 2% | |
| Net assets, end of period (x 1,000,000) | $67,401 | $44,184 | $40,232 | $34,410 | $29,999 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective December 20, 2018, the annual operating expense ratio was reduced to 0.02%. The ratio presented for period ended 10/31/19 is a blended ratio. |
| 3 | Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 4 | Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
32
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.4% OF NET ASSETS | ||
| Automobiles & Components 2.8% | ||
| Aptiv plc * | 463,124 | 80,069,508 |
| BorgWarner, Inc. | 408,839 | 18,426,374 |
| Ford Motor Co. * | 6,731,482 | 114,973,712 |
| General Motors Co. * | 2,490,120 | 135,537,232 |
| Tesla, Inc. * | 1,391,525 | 1,550,158,850 |
| 1,899,165,676 | ||
| Banks 4.4% | ||
| Bank of America Corp. | 12,698,914 | 606,754,111 |
| Citigroup, Inc. | 3,475,842 | 240,389,233 |
| Citizens Financial Group, Inc. | 728,726 | 34,527,038 |
| Comerica, Inc. | 228,886 | 19,475,910 |
| Fifth Third Bancorp | 1,186,781 | 51,660,577 |
| First Republic Bank | 301,923 | 65,315,002 |
| Huntington Bancshares, Inc. | 2,529,535 | 39,814,881 |
| JPMorgan Chase & Co. | 5,124,105 | 870,534,198 |
| KeyCorp | 1,646,948 | 38,324,480 |
| M&T Bank Corp. | 221,566 | 32,596,790 |
| People's United Financial, Inc. | 731,951 | 12,545,640 |
| Regions Financial Corp. | 1,630,548 | 38,611,377 |
| SVB Financial Group * | 100,577 | 72,153,940 |
| The PNC Financial Services Group, Inc. | 728,878 | 153,815,124 |
| Truist Financial Corp. | 2,289,409 | 145,308,789 |
| U.S. Bancorp | 2,314,218 | 139,709,341 |
| Wells Fargo & Co. | 7,042,267 | 360,282,380 |
| Zions Bancorp NA | 279,654 | 17,615,405 |
| 2,939,434,216 | ||
| Capital Goods 5.3% | ||
| 3M Co. | 992,616 | 177,360,627 |
| A.O. Smith Corp. | 228,402 | 16,689,334 |
| Allegion plc | 152,660 | 19,586,278 |
| AMETEK, Inc. | 397,285 | 52,600,534 |
| Carrier Global Corp. | 1,486,490 | 77,639,373 |
| Caterpillar, Inc. | 939,059 | 191,577,427 |
| Cummins, Inc. | 246,578 | 59,139,267 |
| Deere & Co. | 486,881 | 166,664,235 |
| Dover Corp. | 246,109 | 41,612,110 |
| Eaton Corp. plc | 684,351 | 112,753,671 |
| Emerson Electric Co. | 1,026,492 | 99,579,989 |
| Fastenal Co. | 983,894 | 56,160,669 |
| Fortive Corp. | 616,004 | 46,637,663 |
| Fortune Brands Home & Security, Inc. | 236,353 | 23,966,194 |
| Generac Holdings, Inc. * | 108,502 | 54,094,757 |
| General Dynamics Corp. | 397,537 | 80,600,627 |
| General Electric Co. | 1,882,802 | 197,449,446 |
| Honeywell International, Inc. | 1,184,111 | 258,870,347 |
| Howmet Aerospace, Inc. | 664,461 | 19,727,847 |
| Huntington Ingalls Industries, Inc. | 69,383 | 14,066,016 |
| IDEX Corp. | 131,067 | 29,171,582 |
| Illinois Tool Works, Inc. | 491,913 | 112,092,215 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Ingersoll Rand, Inc. * | 697,594 | 37,502,653 |
| Johnson Controls International plc | 1,219,463 | 89,472,000 |
| L3Harris Technologies, Inc. | 344,351 | 79,386,680 |
| Lockheed Martin Corp. | 422,535 | 140,416,831 |
| Masco Corp. | 426,645 | 27,966,580 |
| Northrop Grumman Corp. | 258,059 | 92,183,836 |
| Otis Worldwide Corp. | 732,026 | 58,789,008 |
| PACCAR, Inc. | 593,787 | 53,215,191 |
| Parker-Hannifin Corp. | 221,054 | 65,562,406 |
| Pentair plc | 285,420 | 21,112,517 |
| Quanta Services, Inc. | 238,161 | 28,884,166 |
| Raytheon Technologies Corp. | 2,584,865 | 229,691,104 |
| Rockwell Automation, Inc. | 199,235 | 63,635,659 |
| Roper Technologies, Inc. | 180,813 | 88,213,238 |
| Snap-on, Inc. | 92,166 | 18,730,896 |
| Stanley Black & Decker, Inc. | 279,909 | 50,308,045 |
| Textron, Inc. | 384,347 | 28,384,026 |
| The Boeing Co. * | 945,056 | 195,654,944 |
| Trane Technologies plc | 407,176 | 73,670,354 |
| TransDigm Group, Inc. * | 89,834 | 56,040,246 |
| United Rentals, Inc. * | 123,681 | 46,888,704 |
| W.W. Grainger, Inc. | 74,684 | 34,586,907 |
| Westinghouse Air Brake Technologies Corp. | 326,017 | 29,579,522 |
| Xylem, Inc. | 308,164 | 40,243,137 |
| 3,558,158,858 | ||
| Commercial & Professional Services 0.9% | ||
| Cintas Corp. | 150,232 | 65,065,479 |
| Copart, Inc. * | 365,628 | 56,778,372 |
| Equifax, Inc. | 208,780 | 57,921,835 |
| IHS Markit Ltd. | 683,115 | 89,296,793 |
| Jacobs Engineering Group, Inc. | 223,893 | 31,439,055 |
| Leidos Holdings, Inc. | 241,717 | 24,166,866 |
| Nielsen Holdings plc | 607,388 | 12,299,607 |
| Republic Services, Inc. | 360,916 | 48,579,294 |
| Robert Half International, Inc. | 190,545 | 21,544,923 |
| Rollins, Inc. | 386,718 | 13,624,075 |
| Verisk Analytics, Inc. | 277,167 | 58,279,905 |
| Waste Management, Inc. | 665,050 | 106,560,962 |
| 585,557,166 | ||
| Consumer Durables & Apparel 1.1% | ||
| D.R. Horton, Inc. | 559,336 | 49,931,925 |
| Garmin Ltd. | 261,148 | 37,500,853 |
| Hanesbrands, Inc. | 601,042 | 10,241,756 |
| Hasbro, Inc. | 221,016 | 21,164,492 |
| Leggett & Platt, Inc. | 230,408 | 10,794,615 |
| Lennar Corp., Class A | 469,389 | 46,906,043 |
| Mohawk Industries, Inc. * | 95,337 | 16,894,670 |
| Newell Brands, Inc. | 654,463 | 14,980,658 |
| NIKE, Inc., Class B | 2,192,032 | 366,705,033 |
| NVR, Inc. * | 5,801 | 28,394,735 |
| PulteGroup, Inc. | 442,149 | 21,258,524 |
| PVH Corp. * | 121,757 | 13,311,693 |
| Ralph Lauren Corp. | 83,507 | 10,619,585 |
33
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Tapestry, Inc. | 479,196 | 18,679,060 |
| Under Armour, Inc., Class A * | 321,714 | 7,064,839 |
| Under Armour, Inc., Class C * | 355,597 | 6,713,671 |
| VF Corp. | 559,937 | 40,808,208 |
| Whirlpool Corp. | 107,476 | 22,659,165 |
| 744,629,525 | ||
| Consumer Services 1.9% | ||
| Booking Holdings, Inc. * | 70,427 | 170,488,273 |
| Caesars Entertainment, Inc. * | 366,964 | 40,167,879 |
| Carnival Corp. * | 1,375,677 | 30,485,002 |
| Chipotle Mexican Grill, Inc. * | 48,255 | 85,847,093 |
| Darden Restaurants, Inc. | 224,444 | 32,351,358 |
| Domino’s Pizza, Inc. | 62,869 | 30,741,055 |
| Expedia Group, Inc. * | 249,806 | 41,070,605 |
| Hilton Worldwide Holdings, Inc. * | 478,345 | 68,857,763 |
| Las Vegas Sands Corp. * | 586,700 | 22,769,827 |
| Marriott International, Inc., Class A * | 468,850 | 75,025,377 |
| McDonald’s Corp. | 1,280,685 | 314,472,202 |
| MGM Resorts International | 682,565 | 32,189,765 |
| Norwegian Cruise Line Holdings Ltd. * | 634,136 | 16,309,978 |
| Penn National Gaming, Inc. * | 284,789 | 20,390,892 |
| Royal Caribbean Cruises Ltd. * | 382,499 | 32,294,391 |
| Starbucks Corp. | 2,022,241 | 214,499,103 |
| Wynn Resorts Ltd. * | 179,178 | 16,090,184 |
| Yum! Brands, Inc. | 506,812 | 63,321,091 |
| 1,307,371,838 | ||
| Diversified Financials 5.1% | ||
| American Express Co. | 1,103,455 | 191,758,410 |
| Ameriprise Financial, Inc. | 195,433 | 59,046,172 |
| Berkshire Hathaway, Inc., Class B * | 3,178,484 | 912,256,693 |
| BlackRock, Inc. | 245,333 | 231,461,872 |
| Capital One Financial Corp. | 765,474 | 115,609,538 |
| Cboe Global Markets, Inc. | 181,773 | 23,983,130 |
| CME Group, Inc. | 615,993 | 135,857,256 |
| Discover Financial Services | 513,757 | 58,218,943 |
| Franklin Resources, Inc. | 480,888 | 15,143,163 |
| Intercontinental Exchange, Inc. | 965,796 | 133,724,114 |
| Invesco Ltd. | 583,140 | 14,817,587 |
| MarketAxess Holdings, Inc. | 65,314 | 26,691,872 |
| Moody's Corp. | 278,255 | 112,456,758 |
| Morgan Stanley | 2,503,181 | 257,276,943 |
| MSCI, Inc. | 141,557 | 94,118,418 |
| Nasdaq, Inc. | 201,494 | 42,287,546 |
| Northern Trust Corp. | 357,237 | 43,954,441 |
| Raymond James Financial, Inc. | 317,923 | 31,344,029 |
| S&P Global, Inc. | 413,279 | 195,960,371 |
| State Street Corp. | 625,302 | 61,623,512 |
| Synchrony Financial | 978,815 | 45,465,957 |
| T. Rowe Price Group, Inc. | 388,716 | 84,304,726 |
| The Bank of New York Mellon Corp. | 1,362,413 | 80,654,850 |
| The Charles Schwab Corp. (a) | 2,566,596 | 210,537,870 |
| The Goldman Sachs Group, Inc. | 578,134 | 238,971,689 |
| 3,417,525,860 | ||
| Energy 2.8% | ||
| APA Corp. | 652,546 | 17,103,231 |
| Baker Hughes Co. | 1,424,653 | 35,730,297 |
| Chevron Corp. | 3,314,995 | 379,533,778 |
| ConocoPhillips | 2,295,270 | 170,974,662 |
| Coterra Energy, Inc. | 1,389,206 | 29,617,872 |
| Devon Energy Corp. | 1,080,296 | 43,298,264 |
| Diamondback Energy, Inc. | 292,552 | 31,358,649 |
| EOG Resources, Inc. | 1,002,362 | 92,678,390 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Exxon Mobil Corp. | 7,257,712 | 467,904,693 |
| Halliburton Co. | 1,518,242 | 37,940,868 |
| Hess Corp. | 473,818 | 39,123,152 |
| Kinder Morgan, Inc. | 3,345,922 | 56,044,193 |
| Marathon Oil Corp. | 1,359,362 | 22,184,788 |
| Marathon Petroleum Corp. | 1,096,300 | 72,279,059 |
| Occidental Petroleum Corp. | 1,523,147 | 51,071,119 |
| ONEOK, Inc. | 763,167 | 48,552,685 |
| Phillips 66 | 752,448 | 56,268,061 |
| Pioneer Natural Resources Co. | 388,840 | 72,705,303 |
| Schlumberger N.V. | 2,399,332 | 77,402,450 |
| The Williams Cos., Inc. | 2,082,930 | 58,509,504 |
| Valero Energy Corp. | 699,292 | 54,076,250 |
| 1,914,357,268 | ||
| Food & Staples Retailing 1.4% | ||
| Costco Wholesale Corp. | 758,137 | 372,654,661 |
| Sysco Corp. | 876,179 | 67,378,165 |
| The Kroger Co. | 1,169,077 | 46,786,462 |
| Walgreens Boots Alliance, Inc. | 1,230,788 | 57,871,652 |
| Walmart, Inc. | 2,450,391 | 366,137,423 |
| 910,828,363 | ||
| Food, Beverage & Tobacco 2.8% | ||
| Altria Group, Inc. | 3,162,663 | 139,505,065 |
| Archer-Daniels-Midland Co. | 957,633 | 61,518,344 |
| Brown-Forman Corp., Class B | 313,684 | 21,296,007 |
| Campbell Soup Co. | 350,758 | 14,012,782 |
| Conagra Brands, Inc. | 824,721 | 26,556,016 |
| Constellation Brands, Inc., Class A | 288,440 | 62,536,676 |
| General Mills, Inc. | 1,040,715 | 64,316,187 |
| Hormel Foods Corp. | 481,882 | 20,393,246 |
| Kellogg Co. | 437,242 | 26,802,935 |
| Lamb Weston Holdings, Inc. | 251,530 | 14,198,869 |
| McCormick & Co., Inc. - Non Voting Shares | 426,387 | 34,209,029 |
| Molson Coors Beverage Co., Class B | 324,246 | 14,296,006 |
| Mondelez International, Inc., Class A | 2,397,090 | 145,599,247 |
| Monster Beverage Corp. * | 644,477 | 54,780,545 |
| PepsiCo, Inc. | 2,369,874 | 382,971,638 |
| Philip Morris International, Inc. | 2,672,620 | 252,669,495 |
| The Coca-Cola Co. | 6,661,747 | 375,522,678 |
| The Hershey Co. | 249,433 | 43,738,077 |
| The JM Smucker Co. | 185,398 | 22,777,998 |
| The Kraft Heinz Co. | 1,158,509 | 41,578,888 |
| Tyson Foods, Inc., Class A | 505,919 | 40,458,342 |
| 1,859,738,070 | ||
| Health Care Equipment & Services 6.2% | ||
| Abbott Laboratories | 3,040,317 | 391,866,458 |
| ABIOMED, Inc. * | 78,129 | 25,941,953 |
| Align Technology, Inc. * | 125,839 | 78,570,096 |
| AmerisourceBergen Corp. | 255,362 | 31,159,271 |
| Anthem, Inc. | 418,242 | 181,989,641 |
| Baxter International, Inc. | 856,142 | 67,600,972 |
| Becton, Dickinson & Co. | 492,661 | 118,036,649 |
| Boston Scientific Corp. * | 2,442,735 | 105,355,161 |
| Cardinal Health, Inc. | 498,471 | 23,831,899 |
| Centene Corp. * | 1,002,366 | 71,408,554 |
| Cerner Corp. | 504,520 | 37,480,791 |
| Cigna Corp. | 583,452 | 124,631,182 |
| CVS Health Corp. | 2,263,313 | 202,068,585 |
| Danaher Corp. | 1,089,640 | 339,717,063 |
| DaVita, Inc. * | 114,445 | 11,815,302 |
| Dentsply Sirona, Inc. | 376,337 | 21,530,240 |
34
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| DexCom, Inc. * | 165,687 | 103,257,795 |
| Edwards Lifesciences Corp. * | 1,069,313 | 128,125,084 |
| HCA Healthcare, Inc. | 423,184 | 105,990,665 |
| Henry Schein, Inc. * | 237,886 | 18,162,596 |
| Hologic, Inc. * | 432,607 | 31,714,419 |
| Humana, Inc. | 220,098 | 101,940,590 |
| IDEXX Laboratories, Inc. * | 146,122 | 97,337,709 |
| Intuitive Surgical, Inc. * | 611,814 | 220,944,390 |
| Laboratory Corp. of America Holdings * | 166,205 | 47,704,159 |
| McKesson Corp. | 265,441 | 55,179,875 |
| Medtronic plc | 2,304,773 | 276,250,092 |
| Quest Diagnostics, Inc. | 208,563 | 30,612,877 |
| ResMed, Inc. | 249,098 | 65,490,355 |
| STERIS plc | 171,665 | 40,124,977 |
| Stryker Corp. | 575,648 | 153,162,663 |
| Teleflex, Inc. | 80,113 | 28,595,534 |
| The Cooper Cos., Inc. | 84,126 | 35,073,812 |
| UnitedHealth Group, Inc. | 1,617,067 | 744,610,841 |
| Universal Health Services, Inc., Class B | 129,518 | 16,073,184 |
| Zimmer Biomet Holdings, Inc. | 358,625 | 51,326,410 |
| 4,184,681,844 | ||
| Household & Personal Products 1.5% | ||
| Church & Dwight Co., Inc. | 422,617 | 36,919,821 |
| Colgate-Palmolive Co. | 1,447,721 | 110,301,863 |
| Kimberly-Clark Corp. | 576,652 | 74,670,668 |
| The Clorox Co. | 209,897 | 34,215,310 |
| The Estee Lauder Cos., Inc., Class A | 397,685 | 128,981,176 |
| The Procter & Gamble Co. | 4,162,104 | 595,139,251 |
| 980,228,089 | ||
| Insurance 1.9% | ||
| Aflac, Inc. | 1,058,490 | 56,809,158 |
| American International Group, Inc. | 1,467,464 | 86,712,448 |
| Aon plc, Class A | 387,275 | 123,897,018 |
| Arthur J. Gallagher & Co. | 355,021 | 59,526,371 |
| Assurant, Inc. | 100,396 | 16,194,879 |
| Brown & Brown, Inc. | 398,814 | 25,169,151 |
| Chubb Ltd. | 752,497 | 147,022,864 |
| Cincinnati Financial Corp. | 258,316 | 31,369,895 |
| Everest Re Group Ltd. | 68,825 | 17,997,737 |
| Globe Life, Inc. | 161,176 | 14,347,887 |
| Lincoln National Corp. | 301,411 | 21,746,804 |
| Loews Corp. | 346,432 | 19,424,442 |
| Marsh & McLennan Cos., Inc. | 868,992 | 144,947,866 |
| MetLife, Inc. | 1,247,585 | 78,348,338 |
| Principal Financial Group, Inc. | 425,576 | 28,551,894 |
| Prudential Financial, Inc. | 662,859 | 72,947,633 |
| The Allstate Corp. | 507,001 | 62,700,814 |
| The Hartford Financial Services Group, Inc. | 597,003 | 43,539,429 |
| The Progressive Corp. | 1,005,300 | 95,382,864 |
| The Travelers Cos., Inc. | 427,779 | 68,821,085 |
| W.R. Berkley Corp. | 239,577 | 19,070,329 |
| Willis Towers Watson plc | 220,627 | 53,453,510 |
| 1,287,982,416 | ||
| Materials 2.5% | ||
| Air Products & Chemicals, Inc. | 379,045 | 113,641,481 |
| Albemarle Corp. | 200,564 | 50,235,265 |
| Amcor plc | 2,646,456 | 31,942,724 |
| Avery Dennison Corp. | 141,773 | 30,866,818 |
| Ball Corp. | 558,874 | 51,125,794 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Celanese Corp. | 189,718 | 30,641,354 |
| CF Industries Holdings, Inc. | 369,200 | 20,970,560 |
| Corteva, Inc. | 1,259,018 | 54,326,627 |
| Dow, Inc. | 1,280,759 | 71,684,081 |
| DuPont de Nemours, Inc. | 897,759 | 62,484,026 |
| Eastman Chemical Co. | 233,435 | 24,284,243 |
| Ecolab, Inc. | 426,983 | 94,884,162 |
| FMC Corp. | 219,659 | 19,991,166 |
| Freeport-McMoRan, Inc. | 2,515,590 | 94,888,055 |
| International Flavors & Fragrances, Inc. | 427,285 | 63,003,173 |
| International Paper Co. | 669,182 | 33,238,270 |
| Linde plc | 885,632 | 282,693,734 |
| LyondellBasell Industries N.V., Class A | 454,316 | 42,169,611 |
| Martin Marietta Materials, Inc. | 107,263 | 42,137,197 |
| Newmont Corp. | 1,369,226 | 73,938,204 |
| Nucor Corp. | 504,610 | 56,339,706 |
| Packaging Corp. of America | 163,020 | 22,394,057 |
| PPG Industries, Inc. | 407,846 | 65,487,832 |
| Sealed Air Corp. | 255,186 | 15,137,634 |
| The Mosaic Co. | 589,301 | 24,497,243 |
| The Sherwin-Williams Co. | 415,524 | 131,559,054 |
| Vulcan Materials Co. | 227,311 | 43,216,367 |
| WestRock Co. | 460,175 | 22,134,418 |
| 1,669,912,856 | ||
| Media & Entertainment 9.5% | ||
| Activision Blizzard, Inc. | 1,334,790 | 104,367,230 |
| Alphabet, Inc., Class A * | 516,326 | 1,528,799,980 |
| Alphabet, Inc., Class C * | 483,166 | 1,432,785,288 |
| Charter Communications, Inc., Class A * | 217,504 | 146,791,275 |
| Comcast Corp., Class A | 7,854,190 | 403,940,992 |
| Discovery, Inc., Class A *(b) | 295,660 | 6,930,270 |
| Discovery, Inc., Class C * | 516,260 | 11,646,826 |
| DISH Network Corp., Class A * | 426,298 | 17,508,059 |
| Electronic Arts, Inc. | 487,907 | 68,428,957 |
| Fox Corp., Class A | 556,815 | 22,127,828 |
| Fox Corp., Class B | 253,065 | 9,353,282 |
| Live Nation Entertainment, Inc. * | 225,142 | 22,773,113 |
| Match Group, Inc. * | 474,484 | 71,542,698 |
| Meta Platforms, Inc., Class A * | 4,088,011 | 1,322,757,719 |
| Netflix, Inc. * | 759,008 | 523,950,812 |
| News Corp., Class A | 672,278 | 15,395,166 |
| News Corp., Class B | 204,487 | 4,613,227 |
| Omnicom Group, Inc. | 369,247 | 25,138,336 |
| Take-Two Interactive Software, Inc. * | 200,197 | 36,235,657 |
| The Interpublic Group of Cos., Inc. | 675,781 | 24,713,311 |
| The Walt Disney Co. * | 3,116,070 | 526,833,955 |
| Twitter, Inc. * | 1,370,267 | 73,364,095 |
| ViacomCBS, Inc., Class B | 1,040,010 | 37,669,162 |
| 6,437,667,238 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 6.7% | ||
| AbbVie, Inc. | 3,030,738 | 347,534,726 |
| Agilent Technologies, Inc. | 520,771 | 82,016,225 |
| Amgen, Inc. | 974,023 | 201,593,540 |
| Biogen, Inc. * | 255,400 | 68,110,072 |
| Bio-Rad Laboratories, Inc., Class A * | 36,880 | 29,307,798 |
| Bio-Techne Corp. | 66,734 | 34,945,259 |
| Bristol-Myers Squibb Co. | 3,810,913 | 222,557,319 |
| Catalent, Inc. * | 291,425 | 40,175,851 |
| Charles River Laboratories International, Inc. * | 86,693 | 38,897,415 |
| Eli Lilly & Co. | 1,361,596 | 346,880,197 |
35
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Gilead Sciences, Inc. | 2,151,012 | 139,557,659 |
| Illumina, Inc. * | 251,846 | 104,531,201 |
| Incyte Corp. * | 320,114 | 21,441,236 |
| IQVIA Holdings, Inc. * | 328,856 | 85,969,536 |
| Johnson & Johnson | 4,514,155 | 735,265,566 |
| Merck & Co., Inc. | 4,341,321 | 382,253,314 |
| Mettler-Toledo International, Inc. * | 39,670 | 58,746,510 |
| Moderna, Inc. * | 602,262 | 207,906,865 |
| Organon & Co. | 433,180 | 15,919,365 |
| PerkinElmer, Inc. | 192,000 | 33,962,880 |
| Pfizer, Inc. | 9,615,567 | 420,584,901 |
| Regeneron Pharmaceuticals, Inc. * | 180,410 | 115,451,575 |
| Thermo Fisher Scientific, Inc. | 674,669 | 427,112,704 |
| Vertex Pharmaceuticals, Inc. * | 444,053 | 82,118,721 |
| Viatris, Inc. | 2,080,879 | 27,779,735 |
| Waters Corp. * | 104,664 | 38,469,253 |
| West Pharmaceutical Services, Inc. | 126,736 | 54,481,272 |
| Zoetis, Inc. | 812,817 | 175,731,035 |
| 4,539,301,730 | ||
| Real Estate 2.6% | ||
| Alexandria Real Estate Equities, Inc. | 238,049 | 48,595,323 |
| American Tower Corp. | 780,323 | 220,027,676 |
| AvalonBay Communities, Inc. | 238,829 | 56,526,048 |
| Boston Properties, Inc. | 244,893 | 27,829,641 |
| CBRE Group, Inc., Class A * | 576,186 | 59,969,439 |
| Crown Castle International Corp. | 741,166 | 133,632,230 |
| Digital Realty Trust, Inc. | 484,204 | 76,412,233 |
| Duke Realty Corp. | 648,283 | 36,459,436 |
| Equinix, Inc. | 154,032 | 128,935,566 |
| Equity Residential | 584,947 | 50,539,421 |
| Essex Property Trust, Inc. | 111,961 | 38,058,903 |
| Extra Space Storage, Inc. | 229,928 | 45,380,889 |
| Federal Realty Investment Trust | 119,212 | 14,347,164 |
| Healthpeak Properties, Inc. | 920,417 | 32,684,008 |
| Host Hotels & Resorts, Inc. * | 1,225,634 | 20,627,420 |
| Iron Mountain, Inc. | 497,904 | 22,724,339 |
| Kimco Realty Corp. | 1,046,804 | 23,657,770 |
| Mid-America Apartment Communities, Inc. | 199,553 | 40,750,718 |
| Prologis, Inc. | 1,267,228 | 183,697,371 |
| Public Storage | 261,897 | 86,996,946 |
| Realty Income Corp. | 944,532 | 67,467,921 |
| Regency Centers Corp. | 260,762 | 18,360,252 |
| SBA Communications Corp. | 188,242 | 65,005,610 |
| Simon Property Group, Inc. | 563,118 | 82,541,836 |
| UDR, Inc. | 475,592 | 26,409,624 |
| Ventas, Inc. | 677,125 | 36,138,161 |
| Vornado Realty Trust | 272,982 | 11,637,223 |
| Welltower, Inc. | 724,673 | 58,263,709 |
| Weyerhaeuser Co. | 1,285,095 | 45,903,593 |
| 1,759,580,470 | ||
| Retailing 6.9% | ||
| Advance Auto Parts, Inc. | 111,614 | 25,171,189 |
| Amazon.com, Inc. * | 746,905 | 2,518,884,829 |
| AutoZone, Inc. * | 36,894 | 65,849,887 |
| Bath & Body Works, Inc. | 451,451 | 31,190,750 |
| Best Buy Co., Inc. | 387,589 | 47,378,879 |
| CarMax, Inc. * | 279,818 | 38,312,681 |
| Dollar General Corp. | 405,216 | 89,763,448 |
| Dollar Tree, Inc. * | 398,782 | 42,972,748 |
| eBay, Inc. | 1,115,389 | 85,572,644 |
| Etsy, Inc. * | 216,621 | 54,304,718 |
| Genuine Parts Co. | 246,154 | 32,273,251 |
| LKQ Corp. * | 461,671 | 25,428,839 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Lowe’s Cos., Inc. | 1,212,442 | 283,493,188 |
| O'Reilly Automotive, Inc. * | 118,146 | 73,524,619 |
| Pool Corp. | 68,538 | 35,308,036 |
| Ross Stores, Inc. | 613,147 | 69,408,240 |
| Target Corp. | 848,465 | 220,278,483 |
| The Gap, Inc. | 367,490 | 8,338,348 |
| The Home Depot, Inc. | 1,823,420 | 677,838,151 |
| The TJX Cos., Inc. | 2,070,279 | 135,582,572 |
| Tractor Supply Co. | 196,733 | 42,724,506 |
| Ulta Beauty, Inc. * | 93,685 | 34,416,122 |
| 4,638,016,128 | ||
| Semiconductors & Semiconductor Equipment 5.6% | ||
| Advanced Micro Devices, Inc. * | 2,080,502 | 250,138,755 |
| Analog Devices, Inc. | 922,894 | 160,112,880 |
| Applied Materials, Inc. | 1,567,617 | 214,214,863 |
| Broadcom, Inc. | 703,489 | 374,023,997 |
| Enphase Energy, Inc. * | 231,185 | 53,549,381 |
| Intel Corp. | 6,957,166 | 340,901,134 |
| KLA Corp. | 262,301 | 97,775,321 |
| Lam Research Corp. | 244,487 | 137,785,539 |
| Microchip Technology, Inc. | 940,585 | 69,687,943 |
| Micron Technology, Inc. | 1,931,050 | 133,435,555 |
| Monolithic Power Systems, Inc. | 73,893 | 38,827,816 |
| NVIDIA Corp. | 4,273,580 | 1,092,626,199 |
| NXP Semiconductors N.V. | 453,849 | 91,160,110 |
| Qorvo, Inc. * | 189,541 | 31,886,482 |
| QUALCOMM, Inc. | 1,934,472 | 257,362,155 |
| Skyworks Solutions, Inc. | 282,363 | 47,191,328 |
| Teradyne, Inc. | 283,998 | 39,259,883 |
| Texas Instruments, Inc. | 1,583,117 | 296,802,775 |
| Xilinx, Inc. | 424,324 | 76,378,320 |
| 3,803,120,436 | ||
| Software & Services 14.4% | ||
| Accenture plc, Class A | 1,087,273 | 390,102,680 |
| Adobe, Inc. * | 817,075 | 531,392,897 |
| Akamai Technologies, Inc. * | 280,523 | 29,583,956 |
| ANSYS, Inc. * | 149,176 | 56,624,226 |
| Autodesk, Inc. * | 377,645 | 119,943,828 |
| Automatic Data Processing, Inc. | 725,544 | 162,877,373 |
| Broadridge Financial Solutions, Inc. | 198,561 | 35,425,268 |
| Cadence Design Systems, Inc. * | 474,364 | 82,117,152 |
| Ceridian HCM Holding, Inc. * | 230,264 | 28,840,566 |
| Citrix Systems, Inc. | 212,362 | 20,117,052 |
| Cognizant Technology Solutions Corp., Class A | 902,579 | 70,482,394 |
| DXC Technology Co. * | 436,236 | 14,208,207 |
| Fidelity National Information Services, Inc. | 1,059,341 | 117,311,422 |
| Fiserv, Inc. * | 1,022,762 | 100,731,829 |
| FleetCor Technologies, Inc. * | 141,998 | 35,131,725 |
| Fortinet, Inc. * | 232,123 | 78,072,250 |
| Gartner, Inc. * | 143,783 | 47,723,016 |
| Global Payments, Inc. | 502,978 | 71,920,824 |
| International Business Machines Corp. | 1,537,077 | 192,288,333 |
| Intuit, Inc. | 468,697 | 293,399,635 |
| Jack Henry & Associates, Inc. | 126,412 | 21,045,070 |
| Mastercard, Inc., Class A | 1,493,905 | 501,235,006 |
| Microsoft Corp. | 12,887,160 | 4,273,639,999 |
| NortonLifeLock, Inc. | 990,422 | 25,206,240 |
| Oracle Corp. | 2,825,114 | 271,041,437 |
| Paychex, Inc. | 550,184 | 67,826,683 |
| Paycom Software, Inc. * | 82,668 | 45,289,664 |
| PayPal Holdings, Inc. * | 2,015,053 | 468,681,177 |
36
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| PTC, Inc. * | 181,032 | 23,054,425 |
| salesforce.com, Inc. * | 1,666,194 | 499,341,680 |
| ServiceNow, Inc. * | 339,807 | 237,103,732 |
| Synopsys, Inc. * | 261,415 | 87,098,250 |
| The Western Union Co. | 697,825 | 12,714,371 |
| Tyler Technologies, Inc. * | 70,110 | 38,085,154 |
| VeriSign, Inc. * | 166,058 | 36,976,135 |
| Visa, Inc., Class A | 2,893,997 | 612,861,745 |
| 9,699,495,401 | ||
| Technology Hardware & Equipment 7.7% | ||
| Amphenol Corp., Class A | 1,023,841 | 78,600,273 |
| Apple Inc. | 26,929,947 | 4,034,106,061 |
| Arista Networks, Inc. * | 95,616 | 39,172,919 |
| CDW Corp. | 236,292 | 44,103,902 |
| Cisco Systems, Inc. | 7,228,611 | 404,585,358 |
| Corning, Inc. | 1,320,030 | 46,953,467 |
| F5 Networks, Inc. * | 103,172 | 21,784,768 |
| Hewlett Packard Enterprise Co. | 2,245,489 | 32,896,414 |
| HP, Inc. | 2,062,982 | 62,570,244 |
| IPG Photonics Corp. * | 62,072 | 9,870,069 |
| Juniper Networks, Inc. | 551,759 | 16,287,926 |
| Keysight Technologies, Inc. * | 316,661 | 57,005,313 |
| Motorola Solutions, Inc. | 290,789 | 72,287,236 |
| NetApp, Inc. | 383,913 | 34,283,431 |
| Seagate Technology Holdings plc | 357,355 | 31,829,610 |
| TE Connectivity Ltd. | 561,773 | 82,018,858 |
| Teledyne Technologies, Inc. * | 79,653 | 35,781,721 |
| Trimble, Inc. * | 432,108 | 37,753,276 |
| Western Digital Corp. * | 527,926 | 27,605,250 |
| Zebra Technologies Corp., Class A * | 91,235 | 48,714,928 |
| 5,218,211,024 | ||
| Telecommunication Services 1.2% | ||
| AT&T, Inc. | 12,244,279 | 309,290,487 |
| Lumen Technologies, Inc. | 1,703,630 | 20,205,052 |
| T-Mobile US, Inc. * | 1,005,961 | 115,715,694 |
| Verizon Communications, Inc. | 7,099,282 | 376,190,953 |
| 821,402,186 | ||
| Transportation 1.8% | ||
| Alaska Air Group, Inc. * | 215,240 | 11,364,672 |
| American Airlines Group, Inc. * | 1,102,110 | 21,160,512 |
| C.H. Robinson Worldwide, Inc. | 227,150 | 22,031,279 |
| CSX Corp. | 3,866,905 | 139,865,954 |
| Delta Air Lines, Inc. * | 1,097,572 | 42,947,992 |
| Expeditors International of Washington, Inc. | 290,180 | 35,767,587 |
| FedEx Corp. | 421,121 | 99,186,629 |
| JB Hunt Transport Services, Inc. | 144,244 | 28,443,474 |
| Kansas City Southern | 156,337 | 48,503,554 |
| Norfolk Southern Corp. | 423,921 | 124,230,049 |
| Old Dominion Freight Line, Inc. | 161,193 | 55,023,231 |
| Southwest Airlines Co. * | 1,013,489 | 47,917,760 |
| Union Pacific Corp. | 1,118,076 | 269,903,546 |
| United Airlines Holdings, Inc. * | 557,959 | 25,744,228 |
| United Parcel Service, Inc., Class B | 1,249,195 | 266,665,657 |
| 1,238,756,124 | ||
| Utilities 2.4% | ||
| Alliant Energy Corp. | 428,806 | 24,257,555 |
| Ameren Corp. | 439,753 | 37,066,780 |
| American Electric Power Co., Inc. | 857,195 | 72,612,988 |
| American Water Works Co., Inc. | 310,601 | 54,100,482 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Atmos Energy Corp. | 225,264 | 20,751,320 |
| CenterPoint Energy, Inc. | 1,013,899 | 26,401,930 |
| CMS Energy Corp. | 496,405 | 29,958,042 |
| Consolidated Edison, Inc. | 603,845 | 45,529,913 |
| Dominion Energy, Inc. | 1,387,601 | 105,360,544 |
| DTE Energy Co. | 333,140 | 37,761,419 |
| Duke Energy Corp. | 1,319,798 | 134,632,594 |
| Edison International | 649,191 | 40,853,590 |
| Entergy Corp. | 345,433 | 35,586,508 |
| Evergy, Inc. | 391,350 | 24,948,563 |
| Eversource Energy | 588,878 | 49,995,742 |
| Exelon Corp. | 1,677,734 | 89,238,671 |
| FirstEnergy Corp. | 930,044 | 35,834,595 |
| NextEra Energy, Inc. | 3,364,335 | 287,078,706 |
| NiSource, Inc. | 676,596 | 16,691,623 |
| NRG Energy, Inc. | 421,943 | 16,831,306 |
| Pinnacle West Capital Corp. | 192,051 | 12,385,369 |
| PPL Corp. | 1,322,070 | 38,075,616 |
| Public Service Enterprise Group, Inc. | 869,175 | 55,453,365 |
| Sempra Energy | 547,905 | 69,929,115 |
| The AES Corp. | 1,137,177 | 28,577,258 |
| The Southern Co. | 1,817,452 | 113,263,609 |
| WEC Energy Group, Inc. | 540,127 | 48,643,838 |
| Xcel Energy, Inc. | 925,264 | 59,762,802 |
| 1,611,583,843 | ||
| Total Common Stocks (Cost $25,213,425,169) | 67,026,706,625 | |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.5% OF NET ASSETS | ||
| Money Market Funds 0.0% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 5,827,929 | 5,827,929 |
| Time Deposits 0.5% | ||
| Australia & New Zealand Banking Group Ltd. | ||
| 0.01%, 11/01/21 (e) | 134,528,021 | 134,528,021 |
| Skandinaviska Enskilda Banken AB | ||
| 0.01%, 11/01/21 (e) | 191,544,173 | 191,544,173 |
| 326,072,194 | ||
| Total Short-Term Investments (Cost $331,900,123) | 331,900,123 | |
| Total Investments in Securities (Cost $25,545,325,292) | 67,358,606,748 | |
37
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| S&P 500 Index, e-mini, expires 12/17/21 | 1,605 | 368,909,250 | 14,829,552 |
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund’s investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $5,481,280. |
| (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. |
Below is a summary of the fund’s transactions with affiliated issuers during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DIVIDENDS RECEIVED | |
| COMMON STOCKS 0.3% OF NET ASSETS | ||||||||
| Diversified Financials 0.3% | ||||||||
| The Charles Schwab Corp. | $98,294,462 | $12,372,647 | ($571,780) | ($35,845) | $100,478,386 | $210,537,870 | 2,566,596 | $1,768,662 |
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $67,026,706,625 | $— | $— | $67,026,706,625 |
| Short-Term Investments1 | 5,827,929 | — | — | 5,827,929 |
| Time Deposits | — | 326,072,194 | — | 326,072,194 |
| Futures Contracts2 | 14,829,552 | — | — | 14,829,552 |
| Total | $67,047,364,106 | $326,072,194 | $— | $67,373,436,300 |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
38
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab S&P 500 Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $70,735,946) | $210,537,870 | |
| Investments in securities, at value - unaffiliated (cost $25,474,589,346) including securities on loan of $5,481,280 | 67,148,068,878 | |
| Deposit with broker for futures contracts | 24,161,500 | |
| Receivables: | ||
| Dividends | 50,383,581 | |
| Fund shares sold | 36,912,795 | |
| Variation margin on future contracts | 797,405 | |
| Income from securities on loan | 2,787 | |
| Interest | + | 136 |
| Total assets | 67,470,864,952 | |
| Liabilities | ||
| Collateral held for securities on loan | 5,827,929 | |
| Payables: | ||
| Fund shares redeemed | 42,983,732 | |
| Investments bought | 19,723,894 | |
| Investment adviser fees | + | 1,103,951 |
| Total liabilities | 69,639,506 | |
| Net assets | $67,401,225,446 | |
| Net Assets by Source | ||
| Capital received from investors | $25,209,663,115 | |
| Total distributable earnings | + | 42,191,562,331 |
| Net assets | $67,401,225,446 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $67,401,225,446 | 946,517,470 | $71.21 | ||
39
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab S&P 500 Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $1,768,662 | |
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $78,868) | 829,289,109 | |
| Interest received from securities - unaffiliated | 14,651 | |
| Securities on loan, net | + | 208,192 |
| Total investment income | 831,280,614 | |
| Expenses | ||
| Investment adviser fees | + | 11,509,654 |
| Total expenses | – | 11,509,654 |
| Net investment income | 819,770,960 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on sales of securities - affiliated | (35,845) | |
| Net realized gains on sales of securities - unaffiliated | 92,243,595 | |
| Net realized gains on futures contracts | + | 79,354,858 |
| Net realized gains | 171,562,608 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 100,478,386 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 18,344,544,012 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 18,793,661 |
| Net change in unrealized appreciation (depreciation) | + | 18,463,816,059 |
| Net realized and unrealized gains | 18,635,378,667 | |
| Increase in net assets resulting from operations | $19,455,149,627 | |
40
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab S&P 500 Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $819,770,960 | $893,349,734 | |
| Net realized gains (losses) | 171,562,608 | (291,792,502) | |
| Net change in unrealized appreciation (depreciation) | + | 18,463,816,059 | 3,166,046,098 |
| Increase in net assets from operations | $19,455,149,627 | $3,767,603,330 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($913,293,066) | ($829,255,576) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 196,724,074 | $12,273,054,924 | 236,073,289 | $11,084,108,165 | |
| Shares reinvested | 13,207,873 | 748,622,260 | 13,928,557 | 685,702,860 | |
| Shares redeemed | + | (133,977,878) | (8,346,566,792) | (232,288,137) | (10,755,681,037) |
| Net transactions in fund shares | 75,954,069 | $4,675,110,392 | 17,713,709 | $1,014,129,988 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 870,563,401 | $44,184,258,493 | 852,849,692 | $40,231,780,751 | |
| Total increase | + | 75,954,069 | 23,216,966,953 | 17,713,709 | 3,952,477,742 |
| End of period | 946,517,470 | $67,401,225,446 | 870,563,401 | $44,184,258,493 | |
41
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $73.73 | $68.68 | $64.19 | $62.61 | $52.40 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 1.24 | 1.38 | 1.38 | 1.18 | 1.08 | |
| Net realized and unrealized gains (losses) | 30.02 | 5.81 | 6.73 | 3.05 | 10.96 | |
| Total from investment operations | 31.26 | 7.19 | 8.11 | 4.23 | 12.04 | |
| Less distributions: | ||||||
| Distributions from net investment income | (1.42) | (1.29) | (1.28) | (1.10) | (0.97) | |
| Distributions from net realized gains | (0.88) | (0.85) | (2.34) | (1.55) | (0.86) | |
| Total distributions | (2.30) | (2.14) | (3.62) | (2.65) | (1.83) | |
| Net asset value at end of period | $102.69 | $73.73 | $68.68 | $64.19 | $62.61 | |
| Total return | 43.16% | 10.60% | 14.20% | 6.84% | 23.52% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.05% | 0.05% | 0.05% | 0.05% | 0.14% 2 | |
| Net operating expenses | N/A | N/A | N/A | N/A 3 | 0.12% 2 | |
| Net investment income (loss) | 1.36% | 1.97% | 2.15% | 1.82% | 1.87% | |
| Portfolio turnover rate | 5% 4 | 4% | 5% | 4% | 5% | |
| Net assets, end of period (x 1,000,000) | $14,222 | $9,774 | $9,346 | $7,909 | $7,681 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 3 | Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
| 4 | Portfolio turnover rate excludes in-kind transactions. |
42
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.5% OF NET ASSETS | ||
| Automobiles & Components 2.6% | ||
| Aptiv plc * | 85,983 | 14,865,601 |
| Autoliv, Inc. | 25,375 | 2,457,569 |
| BorgWarner, Inc. | 75,450 | 3,400,532 |
| Ford Motor Co. * | 1,247,025 | 21,299,187 |
| Fox Factory Holding Corp. * | 13,489 | 2,171,055 |
| General Motors Co. * | 461,350 | 25,111,280 |
| Gentex Corp. | 75,227 | 2,662,284 |
| Harley-Davidson, Inc. | 49,364 | 1,801,292 |
| Lear Corp. | 18,984 | 3,262,400 |
| QuantumScape Corp. * | 73,707 | 2,133,081 |
| Tesla, Inc. * | 257,922 | 287,325,108 |
| Thor Industries, Inc. | 17,763 | 1,811,115 |
| 368,300,504 | ||
| Banks 4.1% | ||
| Bank of America Corp. | 2,353,774 | 112,463,322 |
| Bank OZK | 38,957 | 1,740,209 |
| BOK Financial Corp. | 9,558 | 966,983 |
| CIT Group, Inc. | 31,503 | 1,560,344 |
| Citigroup, Inc. | 644,219 | 44,554,186 |
| Citizens Financial Group, Inc. | 135,461 | 6,418,142 |
| Comerica, Inc. | 42,594 | 3,624,324 |
| Commerce Bancshares, Inc. | 34,069 | 2,402,205 |
| Cullen/Frost Bankers, Inc. | 17,711 | 2,293,575 |
| East West Bancorp, Inc. | 45,460 | 3,613,161 |
| Essent Group Ltd. | 35,671 | 1,712,208 |
| Fifth Third Bancorp | 219,577 | 9,558,187 |
| First Citizens BancShares, Inc., Class A | 2,309 | 1,879,295 |
| First Financial Bankshares, Inc. | 40,656 | 2,062,072 |
| First Horizon Corp. | 176,241 | 2,990,810 |
| First Republic Bank | 56,023 | 12,119,456 |
| Huntington Bancshares, Inc. | 468,270 | 7,370,570 |
| JPMorgan Chase & Co. | 949,887 | 161,376,302 |
| KeyCorp | 304,057 | 7,075,406 |
| M&T Bank Corp. | 40,802 | 6,002,790 |
| MGIC Investment Corp. | 107,851 | 1,742,872 |
| New York Community Bancorp, Inc. | 145,622 | 1,810,081 |
| People's United Financial, Inc. | 136,959 | 2,347,477 |
| Pinnacle Financial Partners, Inc. | 24,312 | 2,347,810 |
| Popular, Inc. | 25,655 | 2,089,343 |
| Prosperity Bancshares, Inc. | 29,802 | 2,244,389 |
| Regions Financial Corp. | 303,458 | 7,185,885 |
| Signature Bank | 19,275 | 5,740,481 |
| SVB Financial Group * | 18,648 | 13,378,075 |
| Synovus Financial Corp. | 45,745 | 2,131,260 |
| TFS Financial Corp. | 16,400 | 319,144 |
| The PNC Financial Services Group, Inc. | 135,078 | 28,505,510 |
| Truist Financial Corp. | 424,238 | 26,926,386 |
| U.S. Bancorp | 428,839 | 25,889,010 |
| Valley National Bancorp | 128,918 | 1,709,453 |
| Wells Fargo & Co. | 1,305,264 | 66,777,306 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Western Alliance Bancorp | 32,863 | 3,815,066 |
| Zions Bancorp NA | 51,373 | 3,235,985 |
| 589,979,080 | ||
| Capital Goods 5.5% | ||
| 3M Co. | 183,913 | 32,861,575 |
| A.O. Smith Corp. | 42,351 | 3,094,588 |
| Acuity Brands, Inc. | 11,363 | 2,334,301 |
| Advanced Drainage Systems, Inc. | 17,721 | 1,998,929 |
| AECOM * | 45,682 | 3,123,278 |
| AGCO Corp. | 19,730 | 2,411,203 |
| Allegion plc | 28,299 | 3,630,762 |
| AMETEK, Inc. | 73,545 | 9,737,358 |
| Axon Enterprise, Inc. * | 20,882 | 3,757,925 |
| Builders FirstSource, Inc. * | 65,453 | 3,813,946 |
| BWX Technologies, Inc. | 30,653 | 1,739,251 |
| Carlisle Cos., Inc. | 16,731 | 3,729,674 |
| Carrier Global Corp. | 275,825 | 14,406,340 |
| Caterpillar, Inc. | 174,043 | 35,506,512 |
| ChargePoint Holdings, Inc. * | 54,247 | 1,344,241 |
| Chart Industries, Inc. * | 11,309 | 2,007,574 |
| Colfax Corp. * | 41,172 | 2,125,299 |
| Crane Co. | 15,943 | 1,646,593 |
| Cummins, Inc. | 45,674 | 10,954,452 |
| Deere & Co. | 90,237 | 30,889,027 |
| Donaldson Co., Inc. | 39,490 | 2,369,795 |
| Dover Corp. | 45,771 | 7,738,961 |
| Eaton Corp. plc | 126,758 | 20,884,648 |
| EMCOR Group, Inc. | 16,939 | 2,057,919 |
| Emerson Electric Co. | 190,093 | 18,440,922 |
| Fastenal Co. | 182,729 | 10,430,171 |
| Fortive Corp. | 113,944 | 8,626,700 |
| Fortune Brands Home & Security, Inc. | 43,829 | 4,444,261 |
| Generac Holdings, Inc. * | 20,000 | 9,971,200 |
| General Dynamics Corp. | 73,901 | 14,983,428 |
| General Electric Co. | 348,907 | 36,589,877 |
| Graco, Inc. | 53,942 | 4,055,360 |
| HEICO Corp. | 13,578 | 1,892,637 |
| HEICO Corp., Class A | 23,732 | 2,982,638 |
| Honeywell International, Inc. | 219,443 | 47,974,629 |
| Howmet Aerospace, Inc. | 122,588 | 3,639,638 |
| Hubbell, Inc. | 17,387 | 3,466,446 |
| Huntington Ingalls Industries, Inc. | 12,769 | 2,588,659 |
| IDEX Corp. | 24,029 | 5,348,135 |
| Illinois Tool Works, Inc. | 91,100 | 20,758,957 |
| Ingersoll Rand, Inc. * | 128,795 | 6,924,019 |
| ITT, Inc. | 27,742 | 2,609,690 |
| Johnson Controls International plc | 226,415 | 16,612,069 |
| L3Harris Technologies, Inc. | 63,815 | 14,711,910 |
| Lennox International, Inc. | 10,966 | 3,281,904 |
| Lincoln Electric Holdings, Inc. | 19,086 | 2,717,846 |
| Lockheed Martin Corp. | 78,317 | 26,026,305 |
| Masco Corp. | 78,522 | 5,147,117 |
| MasTec, Inc. * | 18,315 | 1,632,416 |
| Nordson Corp. | 17,118 | 4,351,567 |
| Northrop Grumman Corp. | 47,816 | 17,080,831 |
| nVent Electric plc | 53,516 | 1,897,142 |
43
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Oshkosh Corp. | 21,835 | 2,336,345 |
| Otis Worldwide Corp. | 135,660 | 10,894,855 |
| Owens Corning | 32,624 | 3,047,408 |
| PACCAR, Inc. | 110,380 | 9,892,256 |
| Parker-Hannifin Corp. | 41,040 | 12,172,054 |
| Pentair plc | 52,740 | 3,901,178 |
| Plug Power, Inc. * | 163,623 | 6,261,852 |
| Quanta Services, Inc. | 44,503 | 5,397,324 |
| Raytheon Technologies Corp. | 479,184 | 42,580,290 |
| RBC Bearings, Inc. * | 9,033 | 2,113,090 |
| Regal Rexnord Corp. | 21,516 | 3,277,532 |
| Rockwell Automation, Inc. | 36,900 | 11,785,860 |
| Roper Technologies, Inc. | 33,500 | 16,343,645 |
| Sensata Technologies Holding plc * | 50,468 | 2,780,787 |
| SiteOne Landscape Supply, Inc. * | 14,071 | 3,306,122 |
| Snap-on, Inc. | 17,032 | 3,461,413 |
| Stanley Black & Decker, Inc. | 51,802 | 9,310,373 |
| Sunrun, Inc. * | 65,490 | 3,777,463 |
| Textron, Inc. | 71,176 | 5,256,348 |
| The AZEK Co., Inc. * | 35,429 | 1,299,890 |
| The Boeing Co. * | 175,150 | 36,261,304 |
| The Middleby Corp. * | 17,549 | 3,201,640 |
| The Timken Co. | 21,808 | 1,547,278 |
| The Toro Co. | 33,928 | 3,239,106 |
| Trane Technologies plc | 75,537 | 13,666,909 |
| TransDigm Group, Inc. * | 16,631 | 10,374,750 |
| Trex Co., Inc. * | 36,670 | 3,901,688 |
| United Rentals, Inc. * | 23,015 | 8,725,217 |
| Vertiv Holdings Co. | 89,688 | 2,303,188 |
| Virgin Galactic Holdings, Inc. *(a) | 56,450 | 1,058,437 |
| W.W. Grainger, Inc. | 13,906 | 6,440,008 |
| Watsco, Inc. | 10,390 | 3,008,736 |
| WESCO International, Inc. * | 14,091 | 1,825,630 |
| Westinghouse Air Brake Technologies Corp. | 60,083 | 5,451,331 |
| WillScot Mobile Mini Holdings Corp. * | 71,124 | 2,471,559 |
| Woodward, Inc. | 20,220 | 2,283,849 |
| Xylem, Inc. | 57,253 | 7,476,669 |
| Zurn Water Solutions Corp. | 38,335 | 1,390,794 |
| 777,174,803 | ||
| Commercial & Professional Services 1.1% | ||
| ADT, Inc. | 48,281 | 403,146 |
| ASGN, Inc. * | 17,098 | 2,045,947 |
| Booz Allen Hamilton Holding Corp. | 42,909 | 3,727,076 |
| CACI International, Inc., Class A * | 7,538 | 2,168,230 |
| Cintas Corp. | 27,817 | 12,047,543 |
| Clarivate plc * | 118,217 | 2,772,189 |
| Clean Harbors, Inc. * | 15,849 | 1,783,647 |
| Copart, Inc. * | 67,658 | 10,506,611 |
| CoStar Group, Inc. * | 125,501 | 10,799,361 |
| Dun & Bradstreet Holdings, Inc. * | 47,785 | 900,269 |
| Equifax, Inc. | 38,712 | 10,739,870 |
| Exponent, Inc. | 16,491 | 1,893,167 |
| IAA, Inc. * | 43,379 | 2,587,557 |
| IHS Markit Ltd. | 126,652 | 16,555,949 |
| Jacobs Engineering Group, Inc. | 41,365 | 5,808,473 |
| KBR, Inc. | 44,663 | 1,895,498 |
| Leidos Holdings, Inc. | 44,945 | 4,493,601 |
| ManpowerGroup, Inc. | 17,414 | 1,683,063 |
| MSA Safety, Inc. | 11,664 | 1,784,942 |
| Nielsen Holdings plc | 115,046 | 2,329,682 |
| Republic Services, Inc. | 66,684 | 8,975,666 |
| Robert Half International, Inc. | 35,552 | 4,019,865 |
| Rollins, Inc. | 71,954 | 2,534,939 |
| Stericycle, Inc. * | 29,291 | 1,960,154 |
| Tetra Tech, Inc. | 17,303 | 3,039,445 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| TransUnion | 60,813 | 7,011,131 |
| TriNet Group, Inc. * | 12,768 | 1,292,760 |
| Upwork, Inc. * | 38,137 | 1,797,015 |
| Verisk Analytics, Inc. | 51,246 | 10,775,496 |
| Waste Management, Inc. | 123,056 | 19,717,263 |
| 158,049,555 | ||
| Consumer Durables & Apparel 1.4% | ||
| Brunswick Corp. | 24,806 | 2,309,191 |
| Callaway Golf Co. * | 37,239 | 1,007,315 |
| Capri Holdings Ltd. * | 48,244 | 2,568,511 |
| Columbia Sportswear Co. | 11,162 | 1,159,062 |
| Crocs, Inc. * | 19,846 | 3,204,137 |
| D.R. Horton, Inc. | 103,602 | 9,248,551 |
| Deckers Outdoor Corp. * | 8,804 | 3,480,309 |
| Garmin Ltd. | 48,283 | 6,933,439 |
| Hanesbrands, Inc. | 109,279 | 1,862,114 |
| Hasbro, Inc. | 40,945 | 3,920,893 |
| Helen of Troy Ltd. * | 7,655 | 1,721,992 |
| Leggett & Platt, Inc. | 42,925 | 2,011,036 |
| Lennar Corp., Class A | 87,303 | 8,724,189 |
| Lululemon Athletica, Inc. * | 37,659 | 17,549,471 |
| Mattel, Inc. * | 111,642 | 2,434,912 |
| Mohawk Industries, Inc. * | 17,762 | 3,147,604 |
| Newell Brands, Inc. | 119,864 | 2,743,687 |
| NIKE, Inc., Class B | 406,300 | 67,969,927 |
| NVR, Inc. * | 1,068 | 5,227,646 |
| Peloton Interactive, Inc., Class A * | 85,436 | 7,812,268 |
| Polaris, Inc. | 18,058 | 2,075,767 |
| PulteGroup, Inc. | 82,479 | 3,965,590 |
| PVH Corp. * | 22,653 | 2,476,653 |
| Ralph Lauren Corp. | 15,438 | 1,963,250 |
| Skechers U.S.A., Inc., Class A * | 42,714 | 1,973,814 |
| Tapestry, Inc. | 89,131 | 3,474,326 |
| Tempur Sealy International, Inc. | 62,440 | 2,776,707 |
| Toll Brothers, Inc. | 36,424 | 2,191,632 |
| TopBuild Corp. * | 10,524 | 2,704,352 |
| VF Corp. | 103,484 | 7,541,914 |
| Whirlpool Corp. | 20,068 | 4,230,936 |
| YETI Holdings, Inc. * | 27,798 | 2,733,377 |
| 193,144,572 | ||
| Consumer Services 2.1% | ||
| Airbnb, Inc., Class A * | 106,988 | 18,258,572 |
| Aramark | 81,526 | 2,974,068 |
| Booking Holdings, Inc. * | 13,052 | 31,596,021 |
| Boyd Gaming Corp. * | 25,658 | 1,636,467 |
| Bright Horizons Family Solutions, Inc. * | 19,026 | 3,158,316 |
| Caesars Entertainment, Inc. * | 67,865 | 7,428,503 |
| Carnival Corp. * | 252,542 | 5,596,331 |
| Chegg, Inc. * | 44,731 | 2,658,811 |
| Chipotle Mexican Grill, Inc. * | 8,931 | 15,888,517 |
| Choice Hotels International, Inc. | 10,397 | 1,462,026 |
| Churchill Downs, Inc. | 10,997 | 2,529,310 |
| Coursera, Inc. * | 25,494 | 889,996 |
| Darden Restaurants, Inc. | 41,444 | 5,973,738 |
| Domino’s Pizza, Inc. | 11,714 | 5,727,795 |
| DraftKings, Inc., Class A * | 104,683 | 4,877,181 |
| Expedia Group, Inc. * | 46,201 | 7,595,906 |
| Hilton Grand Vacations, Inc. * | 28,146 | 1,415,181 |
| Hilton Worldwide Holdings, Inc. * | 88,593 | 12,752,962 |
| Las Vegas Sands Corp. * | 109,330 | 4,243,097 |
| Marriott International, Inc., Class A * | 86,955 | 13,914,539 |
| Marriott Vacations Worldwide Corp. | 13,667 | 2,148,726 |
| McDonald’s Corp. | 237,375 | 58,287,431 |
44
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| MGM Resorts International | 127,186 | 5,998,092 |
| Norwegian Cruise Line Holdings Ltd. * | 118,357 | 3,044,142 |
| Penn National Gaming, Inc. * | 52,786 | 3,779,478 |
| Planet Fitness, Inc., Class A * | 26,332 | 2,094,711 |
| Royal Caribbean Cruises Ltd. * | 71,271 | 6,017,410 |
| Scientific Games Corp., Class A * | 30,643 | 2,452,972 |
| Service Corp. International | 53,650 | 3,674,488 |
| Starbucks Corp. | 374,800 | 39,755,036 |
| Terminix Global Holdings, Inc. * | 39,494 | 1,598,717 |
| Texas Roadhouse, Inc. | 22,213 | 1,972,737 |
| The Wendy's Co. | 57,183 | 1,275,181 |
| Vail Resorts, Inc. | 12,915 | 4,451,930 |
| Wingstop, Inc. | 9,454 | 1,630,531 |
| Wyndham Hotels & Resorts, Inc. | 29,581 | 2,498,707 |
| Wynn Resorts Ltd. * | 33,264 | 2,987,107 |
| Yum! Brands, Inc. | 93,978 | 11,741,611 |
| 305,986,344 | ||
| Diversified Financials 5.3% | ||
| Affiliated Managers Group, Inc. | 13,098 | 2,198,892 |
| AGNC Investment Corp. | 166,321 | 2,647,830 |
| Ally Financial, Inc. | 114,626 | 5,472,245 |
| American Express Co. | 204,558 | 35,548,089 |
| Ameriprise Financial, Inc. | 36,179 | 10,930,761 |
| Annaly Capital Management, Inc. | 461,124 | 3,901,109 |
| Apollo Global Management, Inc. | 66,355 | 5,106,017 |
| Ares Management Corp., Class A | 51,951 | 4,402,328 |
| Berkshire Hathaway, Inc., Class B * | 589,194 | 169,104,570 |
| BlackRock, Inc. | 45,481 | 42,909,504 |
| Blackstone, Inc. | 218,051 | 30,182,619 |
| Capital One Financial Corp. | 141,806 | 21,416,960 |
| Cboe Global Markets, Inc. | 34,146 | 4,505,223 |
| CME Group, Inc. | 114,161 | 25,178,209 |
| Coinbase Global, Inc., Class A * | 9,123 | 2,914,069 |
| Credit Acceptance Corp. * | 2,839 | 1,698,318 |
| Discover Financial Services | 95,196 | 10,787,611 |
| Equitable Holdings, Inc. | 121,939 | 4,084,956 |
| Evercore, Inc., Class A | 12,622 | 1,916,524 |
| FactSet Research Systems, Inc. | 12,007 | 5,329,787 |
| Franklin Resources, Inc. | 89,557 | 2,820,150 |
| Interactive Brokers Group, Inc., Class A | 27,761 | 1,966,867 |
| Intercontinental Exchange, Inc. | 179,011 | 24,785,863 |
| Invesco Ltd. | 108,590 | 2,759,272 |
| Janus Henderson Group plc | 54,453 | 2,532,065 |
| Jefferies Financial Group, Inc. | 63,527 | 2,731,661 |
| KKR & Co., Inc. | 185,328 | 14,765,082 |
| Lazard Ltd., Class A | 35,189 | 1,723,909 |
| LPL Financial Holdings, Inc. | 25,425 | 4,170,208 |
| MarketAxess Holdings, Inc. | 12,016 | 4,910,579 |
| Moody's Corp. | 51,483 | 20,806,854 |
| Morgan Stanley | 463,984 | 47,688,276 |
| Morningstar, Inc. | 7,522 | 2,382,594 |
| MSCI, Inc. | 26,203 | 17,421,851 |
| Nasdaq, Inc. | 37,211 | 7,809,473 |
| New Residential Investment Corp. | 148,720 | 1,689,459 |
| Northern Trust Corp. | 66,135 | 8,137,250 |
| OneMain Holdings, Inc. | 35,170 | 1,857,328 |
| Raymond James Financial, Inc. | 58,797 | 5,796,796 |
| S&P Global, Inc. | 76,613 | 36,326,820 |
| SEI Investments Co. | 34,070 | 2,147,773 |
| SLM Corp. | 97,253 | 1,784,593 |
| Starwood Property Trust, Inc. | 91,257 | 2,324,316 |
| State Street Corp. | 116,196 | 11,451,116 |
| Stifel Financial Corp. | 33,014 | 2,405,730 |
| Synchrony Financial | 181,181 | 8,415,857 |
| T. Rowe Price Group, Inc. | 72,151 | 15,648,109 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| The Bank of New York Mellon Corp. | 252,453 | 14,945,218 |
| The Carlyle Group, Inc. | 43,969 | 2,468,859 |
| The Charles Schwab Corp. (b) | 475,697 | 39,021,425 |
| The Goldman Sachs Group, Inc. | 107,154 | 44,292,106 |
| Tradeweb Markets, Inc., Class A | 33,466 | 2,981,821 |
| Upstart Holdings, Inc. * | 14,668 | 4,723,683 |
| Voya Financial, Inc. | 36,070 | 2,516,604 |
| 758,445,188 | ||
| Energy 2.6% | ||
| APA Corp. | 118,875 | 3,115,714 |
| Baker Hughes Co. | 263,134 | 6,599,401 |
| Cheniere Energy, Inc. * | 75,266 | 7,782,504 |
| Chesapeake Energy Corp. | 31,132 | 1,984,354 |
| Chevron Corp. | 614,791 | 70,387,422 |
| ConocoPhillips | 425,727 | 31,712,404 |
| Continental Resources, Inc. | 18,238 | 890,197 |
| Coterra Energy, Inc. | 257,329 | 5,486,254 |
| Devon Energy Corp. | 200,206 | 8,024,256 |
| Diamondback Energy, Inc. | 54,115 | 5,800,587 |
| EOG Resources, Inc. | 185,618 | 17,162,240 |
| EQT Corp. * | 95,956 | 1,910,484 |
| Exxon Mobil Corp. | 1,345,830 | 86,765,660 |
| Halliburton Co. | 284,209 | 7,102,383 |
| Hess Corp. | 87,547 | 7,228,756 |
| Kinder Morgan, Inc. | 619,750 | 10,380,813 |
| Marathon Oil Corp. | 247,961 | 4,046,724 |
| Marathon Petroleum Corp. | 202,922 | 13,378,647 |
| New Fortress Energy, Inc. | 13,143 | 394,290 |
| Occidental Petroleum Corp. | 282,035 | 9,456,634 |
| ONEOK, Inc. | 141,735 | 9,017,181 |
| Ovintiv, Inc. | 82,493 | 3,095,137 |
| Phillips 66 | 139,099 | 10,401,823 |
| Pioneer Natural Resources Co. | 72,126 | 13,486,120 |
| Schlumberger N.V. | 444,216 | 14,330,408 |
| Targa Resources Corp. | 73,044 | 3,993,315 |
| Texas Pacific Land Corp. | 1,972 | 2,511,677 |
| The Williams Cos., Inc. | 386,347 | 10,852,487 |
| Valero Energy Corp. | 130,006 | 10,053,364 |
| 377,351,236 | ||
| Food & Staples Retailing 1.3% | ||
| Albertsons Cos., Inc., Class A (a) | 31,076 | 961,802 |
| BJ's Wholesale Club Holdings, Inc. * | 43,664 | 2,551,724 |
| Casey's General Stores, Inc. | 11,925 | 2,284,114 |
| Costco Wholesale Corp. | 140,509 | 69,065,794 |
| Performance Food Group Co. * | 49,387 | 2,233,774 |
| Sysco Corp. | 162,554 | 12,500,402 |
| The Kroger Co. | 216,094 | 8,648,082 |
| U.S. Foods Holding Corp. * | 70,940 | 2,459,490 |
| Walgreens Boots Alliance, Inc. | 228,182 | 10,729,118 |
| Walmart, Inc. | 454,166 | 67,861,484 |
| 179,295,784 | ||
| Food, Beverage & Tobacco 2.6% | ||
| Altria Group, Inc. | 586,205 | 25,857,503 |
| Archer-Daniels-Midland Co. | 177,820 | 11,423,157 |
| Beyond Meat, Inc. *(a) | 19,109 | 1,891,409 |
| Brown-Forman Corp., Class B | 57,624 | 3,912,093 |
| Bunge Ltd. | 44,732 | 4,143,973 |
| Campbell Soup Co. | 64,114 | 2,561,354 |
| Celsius Holdings, Inc. * | 12,079 | 1,165,865 |
| Conagra Brands, Inc. | 152,766 | 4,919,065 |
| Constellation Brands, Inc., Class A | 53,492 | 11,597,601 |
| Darling Ingredients, Inc. * | 51,441 | 4,347,793 |
45
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Freshpet, Inc. * | 13,951 | 2,175,100 |
| General Mills, Inc. | 192,837 | 11,917,327 |
| Hormel Foods Corp. | 90,360 | 3,824,035 |
| Ingredion, Inc. | 20,927 | 1,992,878 |
| Kellogg Co. | 81,204 | 4,977,805 |
| Keurig Dr Pepper, Inc. | 234,274 | 8,454,949 |
| Lamb Weston Holdings, Inc. | 45,939 | 2,593,257 |
| McCormick & Co., Inc. - Non Voting Shares | 78,813 | 6,323,167 |
| Molson Coors Beverage Co., Class B | 60,438 | 2,664,711 |
| Mondelez International, Inc., Class A | 444,385 | 26,991,945 |
| Monster Beverage Corp. * | 119,376 | 10,146,960 |
| PepsiCo, Inc. | 439,337 | 70,996,859 |
| Philip Morris International, Inc. | 495,395 | 46,834,643 |
| Pilgrim's Pride Corp. * | 16,389 | 461,514 |
| Post Holdings, Inc. * | 18,802 | 1,908,027 |
| The Boston Beer Co., Inc., Class A * | 2,954 | 1,454,786 |
| The Coca-Cola Co. | 1,234,943 | 69,613,737 |
| The Hershey Co. | 46,234 | 8,107,132 |
| The JM Smucker Co. | 34,349 | 4,220,118 |
| The Kraft Heinz Co. | 213,869 | 7,675,758 |
| Tyson Foods, Inc., Class A | 93,714 | 7,494,309 |
| 372,648,830 | ||
| Health Care Equipment & Services 6.1% | ||
| Abbott Laboratories | 563,519 | 72,631,964 |
| ABIOMED, Inc. * | 14,331 | 4,758,465 |
| Acadia Healthcare Co., Inc. * | 28,223 | 1,749,826 |
| agilon health, Inc. * | 14,930 | 365,785 |
| Align Technology, Inc. * | 23,360 | 14,585,283 |
| Amedisys, Inc. * | 10,197 | 1,726,760 |
| AmerisourceBergen Corp. | 47,776 | 5,829,628 |
| AMN Healthcare Services, Inc. * | 15,038 | 1,484,251 |
| Anthem, Inc. | 77,511 | 33,727,361 |
| Baxter International, Inc. | 158,929 | 12,549,034 |
| Becton, Dickinson & Co. | 91,292 | 21,872,650 |
| Boston Scientific Corp. * | 452,616 | 19,521,328 |
| Cardinal Health, Inc. | 91,904 | 4,393,930 |
| Centene Corp. * | 185,352 | 13,204,476 |
| Cerner Corp. | 93,984 | 6,982,071 |
| Certara, Inc. * | 29,505 | 1,218,852 |
| Change Healthcare, Inc. * | 78,391 | 1,687,758 |
| Chemed Corp. | 5,006 | 2,414,143 |
| Cigna Corp. | 108,124 | 23,096,368 |
| CVS Health Corp. | 419,483 | 37,451,442 |
| Danaher Corp. | 201,969 | 62,967,875 |
| DaVita, Inc. * | 21,328 | 2,201,903 |
| Dentsply Sirona, Inc. | 69,400 | 3,970,374 |
| DexCom, Inc. * | 30,755 | 19,166,824 |
| Edwards Lifesciences Corp. * | 198,162 | 23,743,771 |
| Encompass Health Corp. | 31,317 | 1,990,509 |
| Envista Holdings Corp. * | 50,853 | 1,988,352 |
| Globus Medical, Inc., Class A * | 25,267 | 1,949,854 |
| Guardant Health, Inc. * | 32,211 | 3,761,923 |
| HCA Healthcare, Inc. | 78,368 | 19,628,049 |
| HealthEquity, Inc. * | 26,878 | 1,778,786 |
| Henry Schein, Inc. * | 44,425 | 3,391,849 |
| Hill-Rom Holdings, Inc. | 20,764 | 3,216,344 |
| Hologic, Inc. * | 80,580 | 5,907,320 |
| Humana, Inc. | 40,858 | 18,923,791 |
| IDEXX Laboratories, Inc. * | 27,044 | 18,015,090 |
| Inspire Medical Systems, Inc. * | 8,557 | 2,306,796 |
| Insulet Corp. * | 21,894 | 6,787,578 |
| Integra LifeSciences Holdings Corp. * | 22,791 | 1,514,690 |
| Intuitive Surgical, Inc. * | 113,394 | 40,949,975 |
| Laboratory Corp. of America Holdings * | 30,746 | 8,824,717 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| LHC Group, Inc. * | 10,032 | 1,350,207 |
| Masimo Corp. * | 16,070 | 4,556,488 |
| McKesson Corp. | 49,188 | 10,225,201 |
| Medtronic plc | 427,193 | 51,203,353 |
| Molina Healthcare, Inc. * | 18,472 | 5,462,540 |
| Novocure Ltd. * | 28,338 | 2,906,629 |
| Oak Street Health, Inc. * | 44,425 | 2,098,193 |
| Omnicell, Inc. * | 13,935 | 2,482,520 |
| Penumbra, Inc. * | 10,978 | 3,035,966 |
| Quest Diagnostics, Inc. | 38,857 | 5,703,430 |
| Quidel Corp. * | 12,046 | 1,599,347 |
| R1 RCM, Inc. * | 42,577 | 923,921 |
| ResMed, Inc. | 46,257 | 12,161,428 |
| Shockwave Medical, Inc. * | 11,177 | 2,388,525 |
| STAAR Surgical Co. * | 15,070 | 1,785,192 |
| STERIS plc | 31,831 | 7,440,178 |
| Stryker Corp. | 106,686 | 28,385,944 |
| Tandem Diabetes Care, Inc. * | 19,929 | 2,716,921 |
| Teladoc Health, Inc. * | 50,633 | 7,574,190 |
| Teleflex, Inc. | 14,881 | 5,311,624 |
| Tenet Healthcare Corp. * | 34,039 | 2,439,235 |
| The Cooper Cos., Inc. | 15,655 | 6,526,883 |
| UnitedHealth Group, Inc. | 299,734 | 138,018,515 |
| Universal Health Services, Inc., Class B | 24,136 | 2,995,278 |
| Veeva Systems, Inc., Class A * | 43,921 | 13,923,396 |
| Zimmer Biomet Holdings, Inc. | 66,397 | 9,502,739 |
| 866,955,588 | ||
| Household & Personal Products 1.3% | ||
| Church & Dwight Co., Inc. | 77,818 | 6,798,180 |
| Colgate-Palmolive Co. | 268,051 | 20,422,806 |
| Coty, Inc., Class A * | 106,337 | 901,738 |
| Herbalife Nutrition Ltd. * | 32,305 | 1,498,952 |
| Kimberly-Clark Corp. | 107,028 | 13,859,056 |
| Reynolds Consumer Products, Inc. | 17,599 | 474,821 |
| The Clorox Co. | 39,063 | 6,367,659 |
| The Estee Lauder Cos., Inc., Class A | 73,703 | 23,904,094 |
| The Procter & Gamble Co. | 771,600 | 110,331,084 |
| 184,558,390 | ||
| Insurance 2.0% | ||
| Aflac, Inc. | 196,096 | 10,524,472 |
| Alleghany Corp. * | 4,448 | 2,897,338 |
| American Financial Group, Inc. | 21,006 | 2,857,656 |
| American International Group, Inc. | 271,796 | 16,060,426 |
| American National Group, Inc. | 4,093 | 776,483 |
| Aon plc, Class A | 71,763 | 22,958,419 |
| Arch Capital Group Ltd. * | 125,784 | 5,260,287 |
| Arthur J. Gallagher & Co. | 65,939 | 11,055,992 |
| Assurant, Inc. | 18,685 | 3,014,077 |
| Athene Holding Ltd., Class A * | 41,459 | 3,607,348 |
| Brown & Brown, Inc. | 74,226 | 4,684,403 |
| Chubb Ltd. | 139,455 | 27,246,718 |
| Cincinnati Financial Corp. | 47,507 | 5,769,250 |
| CNA Financial Corp. | 8,422 | 377,811 |
| Erie Indemnity Co., Class A | 7,915 | 1,628,986 |
| Everest Re Group Ltd. | 12,644 | 3,306,406 |
| Fidelity National Financial, Inc. | 90,713 | 4,346,060 |
| First American Financial Corp. | 35,382 | 2,587,840 |
| Globe Life, Inc. | 29,671 | 2,641,312 |
| Lincoln National Corp. | 56,130 | 4,049,780 |
| Loews Corp. | 64,374 | 3,609,450 |
| Markel Corp. * | 4,357 | 5,721,307 |
| Marsh & McLennan Cos., Inc. | 161,033 | 26,860,304 |
| MetLife, Inc. | 231,521 | 14,539,519 |
46
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Old Republic International Corp. | 89,629 | 2,315,117 |
| Primerica, Inc. | 12,550 | 2,111,412 |
| Principal Financial Group, Inc. | 79,342 | 5,323,055 |
| Prudential Financial, Inc. | 122,917 | 13,527,016 |
| Reinsurance Group of America, Inc. | 21,339 | 2,519,709 |
| RenaissanceRe Holdings Ltd. | 14,960 | 2,121,328 |
| The Allstate Corp. | 93,995 | 11,624,362 |
| The Hartford Financial Services Group, Inc. | 110,355 | 8,048,190 |
| The Progressive Corp. | 186,002 | 17,647,870 |
| The Travelers Cos., Inc. | 79,293 | 12,756,658 |
| Unum Group | 66,203 | 1,686,190 |
| W.R. Berkley Corp. | 44,593 | 3,549,603 |
| Willis Towers Watson plc | 41,028 | 9,940,264 |
| 279,552,418 | ||
| Materials 2.6% | ||
| Air Products & Chemicals, Inc. | 70,369 | 21,097,330 |
| Albemarle Corp. | 37,107 | 9,294,190 |
| Alcoa Corp. | 59,778 | 2,746,799 |
| Amcor plc | 490,137 | 5,915,954 |
| AptarGroup, Inc. | 20,939 | 2,529,012 |
| Ashland Global Holdings, Inc. | 18,074 | 1,735,285 |
| Avery Dennison Corp. | 26,345 | 5,735,833 |
| Axalta Coating Systems Ltd. * | 68,801 | 2,145,903 |
| Ball Corp. | 103,824 | 9,497,820 |
| Berry Global Group, Inc. * | 42,814 | 2,806,030 |
| Celanese Corp. | 35,340 | 5,707,763 |
| CF Industries Holdings, Inc. | 67,780 | 3,849,904 |
| Cleveland-Cliffs, Inc. * | 144,575 | 3,485,703 |
| Corteva, Inc. | 233,356 | 10,069,311 |
| Crown Holdings, Inc. | 41,755 | 4,342,102 |
| Diversey Holdings Ltd. * | 14,326 | 249,272 |
| Dow, Inc. | 237,157 | 13,273,677 |
| DuPont de Nemours, Inc. | 166,272 | 11,572,531 |
| Eagle Materials, Inc. | 13,089 | 1,941,884 |
| Eastman Chemical Co. | 43,182 | 4,492,223 |
| Ecolab, Inc. | 79,126 | 17,583,380 |
| Element Solutions, Inc. | 69,280 | 1,573,349 |
| FMC Corp. | 41,171 | 3,746,973 |
| Freeport-McMoRan, Inc. | 466,640 | 17,601,661 |
| Graphic Packaging Holding Co. | 90,185 | 1,797,387 |
| Huntsman Corp. | 65,851 | 2,145,426 |
| International Flavors & Fragrances, Inc. | 79,166 | 11,673,027 |
| International Paper Co. | 124,290 | 6,173,484 |
| Linde plc | 164,152 | 52,397,318 |
| Louisiana-Pacific Corp. | 30,264 | 1,783,458 |
| LyondellBasell Industries N.V., Class A | 84,058 | 7,802,264 |
| Martin Marietta Materials, Inc. | 19,786 | 7,772,732 |
| MP Materials Corp. * | 23,731 | 803,294 |
| Newmont Corp. | 253,985 | 13,715,190 |
| Nucor Corp. | 93,349 | 10,422,416 |
| Olin Corp. | 45,927 | 2,616,920 |
| Packaging Corp. of America | 29,986 | 4,119,177 |
| PPG Industries, Inc. | 75,459 | 12,116,452 |
| Reliance Steel & Aluminum Co. | 20,052 | 2,930,800 |
| Royal Gold, Inc. | 20,934 | 2,072,885 |
| RPM International, Inc. | 41,281 | 3,599,703 |
| Sealed Air Corp. | 47,599 | 2,823,573 |
| Sonoco Products Co. | 31,224 | 1,809,431 |
| Steel Dynamics, Inc. | 61,614 | 4,071,453 |
| Sylvamo Corp. * | 11,299 | 318,180 |
| The Chemours Co. | 52,531 | 1,471,919 |
| The Mosaic Co. | 110,707 | 4,602,090 |
| The Scotts Miracle-Gro Co. | 12,918 | 1,917,806 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| The Sherwin-Williams Co. | 77,022 | 24,385,935 |
| United States Steel Corp. | 85,974 | 2,268,854 |
| Valvoline, Inc. | 57,461 | 1,951,376 |
| Vulcan Materials Co. | 42,330 | 8,047,780 |
| Westlake Chemical Corp. | 10,358 | 1,008,248 |
| WestRock Co. | 85,555 | 4,115,195 |
| 365,727,662 | ||
| Media & Entertainment 9.0% | ||
| Activision Blizzard, Inc. | 247,182 | 19,327,161 |
| Alphabet, Inc., Class A * | 95,712 | 283,395,575 |
| Alphabet, Inc., Class C * | 89,550 | 265,552,466 |
| Altice USA, Inc., Class A * | 73,704 | 1,201,375 |
| AMC Entertainment Holdings, Inc., Class A *(a) | 163,168 | 5,771,252 |
| Bumble, Inc., Class A * | 22,502 | 1,181,805 |
| Cable One, Inc. | 1,570 | 2,686,600 |
| Charter Communications, Inc., Class A * | 40,308 | 27,203,466 |
| Comcast Corp., Class A | 1,455,613 | 74,862,177 |
| Discovery, Inc., Class C * | 97,793 | 2,206,210 |
| DISH Network Corp., Class A * | 79,868 | 3,280,179 |
| Electronic Arts, Inc. | 90,433 | 12,683,228 |
| Endeavor Group Holdings, Inc., Class A *(a) | 6,502 | 174,774 |
| Fox Corp., Class A | 103,209 | 4,101,526 |
| Fox Corp., Class B | 46,486 | 1,718,123 |
| IAC/InterActiveCorp. * | 26,509 | 4,039,176 |
| Liberty Broadband Corp., Class C * | 46,058 | 7,482,122 |
| Liberty Media Corp. - Liberty Formula One, Class C * | 65,233 | 3,640,001 |
| Liberty Media Corp. - Liberty SiriusXM, Class C * | 50,579 | 2,494,556 |
| Live Nation Entertainment, Inc. * | 41,823 | 4,230,396 |
| Match Group, Inc. * | 87,980 | 13,265,624 |
| Meta Platforms, Inc., Class A * | 757,713 | 245,173,195 |
| Netflix, Inc. * | 140,684 | 97,115,572 |
| News Corp., Class A | 124,961 | 2,861,607 |
| Nexstar Media Group, Inc., Class A | 13,230 | 1,983,574 |
| Omnicom Group, Inc. | 68,022 | 4,630,938 |
| Pinterest, Inc., Class A * | 175,841 | 7,849,542 |
| Playtika Holding Corp. * | 32,468 | 918,195 |
| ROBLOX Corp., Class A * | 13,133 | 1,103,435 |
| Roku, Inc. * | 36,992 | 11,278,861 |
| Sirius XM Holdings, Inc. (a) | 294,747 | 1,795,009 |
| Snap, Inc., Class A * | 332,932 | 17,505,565 |
| Take-Two Interactive Software, Inc. * | 37,242 | 6,740,802 |
| The Interpublic Group of Cos., Inc. | 125,758 | 4,598,970 |
| The New York Times Co., Class A | 53,007 | 2,893,652 |
| The Walt Disney Co. * | 577,531 | 97,643,166 |
| Twitter, Inc. * | 253,637 | 13,579,725 |
| ViacomCBS, Inc., Class B | 192,528 | 6,973,364 |
| Vimeo, Inc. * | 49,561 | 1,671,693 |
| Ziff Davis, Inc. * | 15,297 | 1,962,146 |
| ZoomInfo Technologies, Inc., Class A * | 57,784 | 3,884,240 |
| Zynga, Inc., Class A * | 323,361 | 2,386,404 |
| 1,275,047,447 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 6.8% | ||
| 10X Genomics, Inc., Class A * | 28,807 | 4,645,705 |
| AbbVie, Inc. | 561,692 | 64,409,222 |
| Acceleron Pharma, Inc. * | 17,288 | 3,011,224 |
| Adaptive Biotechnologies Corp. * | 34,467 | 1,151,542 |
| Agilent Technologies, Inc. | 96,457 | 15,191,013 |
| Alnylam Pharmaceuticals, Inc. * | 37,708 | 6,016,688 |
47
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Amgen, Inc. | 180,483 | 37,354,567 |
| Apellis Pharmaceuticals, Inc. * | 22,678 | 697,122 |
| Arrowhead Pharmaceuticals, Inc. * | 33,545 | 2,140,842 |
| Avantor, Inc. * | 185,675 | 7,497,557 |
| Beam Therapeutics, Inc. * | 13,921 | 1,235,767 |
| Biogen, Inc. * | 47,369 | 12,632,365 |
| Biohaven Pharmaceutical Holding Co., Ltd. * | 18,408 | 2,619,827 |
| BioMarin Pharmaceutical, Inc. * | 58,484 | 4,633,687 |
| Bio-Rad Laboratories, Inc., Class A * | 6,830 | 5,427,664 |
| Bio-Techne Corp. | 12,365 | 6,474,932 |
| Blueprint Medicines Corp. * | 18,476 | 2,078,365 |
| Bridgebio Pharma, Inc. * | 34,725 | 1,714,721 |
| Bristol-Myers Squibb Co. | 706,397 | 41,253,585 |
| Bruker Corp. | 32,140 | 2,580,842 |
| Catalent, Inc. * | 54,136 | 7,463,189 |
| Charles River Laboratories International, Inc. * | 16,018 | 7,186,956 |
| Denali Therapeutics, Inc. * | 29,377 | 1,420,378 |
| Elanco Animal Health, Inc. * | 149,658 | 4,920,755 |
| Eli Lilly & Co. | 252,374 | 64,294,800 |
| Exact Sciences Corp. * | 54,886 | 5,226,245 |
| Exelixis, Inc. * | 100,412 | 2,159,862 |
| Fate Therapeutics, Inc. * | 25,409 | 1,367,004 |
| Gilead Sciences, Inc. | 398,506 | 25,855,069 |
| Halozyme Therapeutics, Inc. * | 45,186 | 1,720,231 |
| Horizon Therapeutics plc * | 71,788 | 8,608,099 |
| Illumina, Inc. * | 46,631 | 19,354,663 |
| Incyte Corp. * | 59,846 | 4,008,485 |
| Intellia Therapeutics, Inc. * | 21,727 | 2,889,256 |
| Invitae Corp. * | 63,550 | 1,684,075 |
| Ionis Pharmaceuticals, Inc. * | 44,590 | 1,421,083 |
| IQVIA Holdings, Inc. * | 60,899 | 15,920,217 |
| Jazz Pharmaceuticals plc * | 19,201 | 2,554,501 |
| Johnson & Johnson | 836,779 | 136,294,564 |
| Maravai LifeSciences Holdings, Inc., Class A * | 34,665 | 1,465,983 |
| Medpace Holdings, Inc. * | 9,166 | 2,076,557 |
| Merck & Co., Inc. | 804,704 | 70,854,187 |
| Mettler-Toledo International, Inc. * | 7,346 | 10,878,544 |
| Mirati Therapeutics, Inc. * | 14,561 | 2,752,320 |
| Moderna, Inc. * | 111,624 | 38,533,721 |
| Natera, Inc. * | 27,723 | 3,176,224 |
| NeoGenomics, Inc. * | 39,039 | 1,795,794 |
| Neurocrine Biosciences, Inc. * | 30,228 | 3,186,333 |
| Novavax, Inc. * | 23,677 | 3,523,848 |
| Organon & Co. | 80,826 | 2,970,356 |
| Pacific Biosciences of California, Inc. * | 63,628 | 1,684,869 |
| PerkinElmer, Inc. | 35,636 | 6,303,652 |
| Perrigo Co., plc | 42,834 | 1,933,955 |
| Pfizer, Inc. | 1,782,248 | 77,955,528 |
| PPD, Inc. * | 37,917 | 1,788,545 |
| Regeneron Pharmaceuticals, Inc. * | 33,404 | 21,376,556 |
| Repligen Corp. * | 16,253 | 4,721,497 |
| Royalty Pharma plc, Class A | 112,685 | 4,454,438 |
| Sarepta Therapeutics, Inc. * | 27,341 | 2,163,493 |
| Seagen, Inc. * | 42,204 | 7,441,831 |
| Sotera Health Co. * | 31,432 | 776,370 |
| Syneos Health, Inc. * | 32,794 | 3,060,992 |
| Thermo Fisher Scientific, Inc. | 125,057 | 79,169,835 |
| Twist Bioscience Corp. * | 15,543 | 1,846,508 |
| Ultragenyx Pharmaceutical, Inc. * | 21,559 | 1,809,231 |
| United Therapeutics Corp. * | 14,168 | 2,702,688 |
| Vertex Pharmaceuticals, Inc. * | 82,450 | 15,247,479 |
| Viatris, Inc. | 382,410 | 5,105,174 |
| Vir Biotechnology, Inc. * | 23,248 | 877,147 |
| Waters Corp. * | 19,497 | 7,166,122 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| West Pharmaceutical Services, Inc. | 23,512 | 10,107,339 |
| Zoetis, Inc. | 150,653 | 32,571,179 |
| 968,594,964 | ||
| Real Estate 3.1% | ||
| Alexandria Real Estate Equities, Inc. | 44,070 | 8,996,450 |
| American Campus Communities, Inc. | 44,609 | 2,396,395 |
| American Homes 4 Rent, Class A | 86,486 | 3,511,332 |
| American Tower Corp. | 144,660 | 40,789,780 |
| Americold Realty Trust | 83,001 | 2,446,039 |
| Apartment Income REIT Corp. | 49,961 | 2,678,409 |
| AvalonBay Communities, Inc. | 44,390 | 10,506,225 |
| Boston Properties, Inc. | 44,924 | 5,105,163 |
| Brixmor Property Group, Inc. | 93,339 | 2,187,866 |
| Camden Property Trust | 31,979 | 5,215,775 |
| CBRE Group, Inc., Class A * | 106,680 | 11,103,254 |
| Compass, Inc., Class A * | 8,684 | 113,760 |
| CoreSite Realty Corp. | 13,994 | 1,993,585 |
| Cousins Properties, Inc. | 47,237 | 1,871,058 |
| Crown Castle International Corp. | 137,382 | 24,769,975 |
| CubeSmart | 63,559 | 3,496,381 |
| CyrusOne, Inc. | 39,187 | 3,214,118 |
| Digital Realty Trust, Inc. | 89,832 | 14,176,388 |
| Douglas Emmett, Inc. | 55,778 | 1,822,825 |
| Duke Realty Corp. | 119,629 | 6,727,935 |
| EastGroup Properties, Inc. | 12,718 | 2,515,366 |
| Equinix, Inc. | 28,530 | 23,881,607 |
| Equity LifeStyle Properties, Inc. | 54,650 | 4,618,471 |
| Equity Residential | 108,344 | 9,360,922 |
| Essex Property Trust, Inc. | 20,678 | 7,029,072 |
| eXp World Holdings, Inc. | 20,945 | 1,080,762 |
| Extra Space Storage, Inc. | 42,543 | 8,396,712 |
| Federal Realty Investment Trust | 22,481 | 2,705,588 |
| First Industrial Realty Trust, Inc. | 41,572 | 2,420,738 |
| Gaming & Leisure Properties, Inc. | 70,087 | 3,398,519 |
| Healthcare Trust of America, Inc., Class A | 68,788 | 2,296,831 |
| Healthpeak Properties, Inc. | 171,171 | 6,078,282 |
| Host Hotels & Resorts, Inc. * | 227,907 | 3,835,675 |
| Innovative Industrial Properties, Inc. | 7,611 | 2,002,378 |
| Invitation Homes, Inc. | 183,836 | 7,583,235 |
| Iron Mountain, Inc. | 91,825 | 4,190,893 |
| Jones Lang LaSalle, Inc. * | 16,108 | 4,159,569 |
| Kilroy Realty Corp. | 33,199 | 2,236,949 |
| Kimco Realty Corp. | 196,282 | 4,435,973 |
| Lamar Advertising Co., Class A | 27,843 | 3,151,828 |
| Life Storage, Inc. | 25,168 | 3,367,730 |
| Medical Properties Trust, Inc. | 190,697 | 4,067,567 |
| Mid-America Apartment Communities, Inc. | 36,706 | 7,495,732 |
| National Retail Properties, Inc. | 56,375 | 2,557,170 |
| Omega Healthcare Investors, Inc. | 75,332 | 2,211,747 |
| Opendoor Technologies, Inc. * | 121,101 | 2,871,305 |
| Prologis, Inc. | 234,981 | 34,062,846 |
| Public Storage | 48,465 | 16,099,104 |
| Rayonier, Inc. | 44,937 | 1,677,498 |
| Realty Income Corp. | 123,899 | 8,850,106 |
| Redfin Corp. * | 33,626 | 1,726,359 |
| Regency Centers Corp. | 48,608 | 3,422,489 |
| Rexford Industrial Realty, Inc. | 43,544 | 2,926,157 |
| SBA Communications Corp. | 34,809 | 12,020,592 |
| Simon Property Group, Inc. | 104,472 | 15,313,506 |
| Spirit Realty Capital, Inc. | 37,890 | 1,853,958 |
| STAG Industrial, Inc. | 51,520 | 2,242,666 |
| STORE Capital Corp. | 78,202 | 2,684,675 |
| Sun Communities, Inc. | 36,838 | 7,219,511 |
| UDR, Inc. | 88,735 | 4,927,455 |
48
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Ventas, Inc. | 125,067 | 6,674,826 |
| VEREIT, Inc. | 72,724 | 3,658,017 |
| VICI Properties, Inc. | 195,110 | 5,726,478 |
| Vornado Realty Trust | 50,165 | 2,138,534 |
| Welltower, Inc. | 134,090 | 10,780,836 |
| Weyerhaeuser Co. | 238,361 | 8,514,255 |
| WP Carey, Inc. | 58,601 | 4,518,723 |
| Zillow Group, Inc., Class A * | 11,796 | 1,247,073 |
| Zillow Group, Inc., Class C * | 53,705 | 5,565,449 |
| 444,924,447 | ||
| Retailing 6.5% | ||
| Advance Auto Parts, Inc. | 20,826 | 4,696,680 |
| Amazon.com, Inc. * | 138,440 | 466,879,209 |
| AutoNation, Inc. * | 13,928 | 1,686,959 |
| AutoZone, Inc. * | 6,854 | 12,233,293 |
| Bath & Body Works, Inc. | 83,777 | 5,788,153 |
| Best Buy Co., Inc. | 71,422 | 8,730,625 |
| Burlington Stores, Inc. * | 21,177 | 5,850,993 |
| CarMax, Inc. * | 51,817 | 7,094,784 |
| Carvana Co. * | 26,866 | 8,145,234 |
| Chewy, Inc., Class A * | 27,632 | 2,094,506 |
| Dick's Sporting Goods, Inc. | 20,860 | 2,591,021 |
| Dollar General Corp. | 75,126 | 16,641,912 |
| Dollar Tree, Inc. * | 73,523 | 7,922,838 |
| DoorDash, Inc., Class A * | 48,692 | 9,485,202 |
| eBay, Inc. | 206,628 | 15,852,500 |
| Etsy, Inc. * | 40,235 | 10,086,512 |
| Five Below, Inc. * | 17,637 | 3,479,780 |
| Floor & Decor Holdings, Inc., Class A * | 33,540 | 4,558,757 |
| Foot Locker, Inc. | 28,744 | 1,370,226 |
| GameStop Corp., Class A * | 19,778 | 3,629,461 |
| Genuine Parts Co. | 45,539 | 5,970,618 |
| Kohl's Corp. | 49,508 | 2,402,623 |
| Lithia Motors, Inc. | 9,609 | 3,067,385 |
| LKQ Corp. * | 85,930 | 4,733,024 |
| Lowe’s Cos., Inc. | 224,735 | 52,547,538 |
| Macy's, Inc. | 99,248 | 2,627,095 |
| O'Reilly Automotive, Inc. * | 21,928 | 13,646,233 |
| Penske Automotive Group, Inc. | 10,012 | 1,061,773 |
| Pool Corp. | 12,747 | 6,566,745 |
| RH * | 5,382 | 3,550,129 |
| Ross Stores, Inc. | 113,597 | 12,859,180 |
| Target Corp. | 157,290 | 40,835,630 |
| The Gap, Inc. | 67,326 | 1,527,627 |
| The Home Depot, Inc. | 338,005 | 125,649,979 |
| The TJX Cos., Inc. | 383,650 | 25,125,238 |
| Tractor Supply Co. | 36,379 | 7,900,427 |
| Ulta Beauty, Inc. * | 17,342 | 6,370,757 |
| Victoria's Secret & Co. * | 23,889 | 1,205,678 |
| Wayfair, Inc., Class A * | 24,581 | 6,123,127 |
| Williams-Sonoma, Inc. | 23,895 | 4,438,018 |
| 927,027,469 | ||
| Semiconductors & Semiconductor Equipment 5.4% | ||
| Advanced Micro Devices, Inc. * | 385,554 | 46,355,157 |
| Allegro MicroSystems, Inc. * | 17,422 | 581,198 |
| Amkor Technology, Inc. | 31,733 | 695,587 |
| Analog Devices, Inc. | 170,942 | 29,656,728 |
| Applied Materials, Inc. | 290,490 | 39,695,459 |
| Broadcom, Inc. | 130,381 | 69,319,666 |
| Brooks Automation, Inc. | 23,498 | 2,736,342 |
| Enphase Energy, Inc. * | 42,787 | 9,910,753 |
| Entegris, Inc. | 43,333 | 6,100,420 |
| First Solar, Inc. * | 31,416 | 3,757,039 |
| Intel Corp. | 1,289,494 | 63,185,206 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| KLA Corp. | 48,610 | 18,119,864 |
| Lam Research Corp. | 45,290 | 25,524,085 |
| Lattice Semiconductor Corp. * | 43,302 | 3,006,891 |
| Marvell Technology, Inc. | 260,425 | 17,839,113 |
| Microchip Technology, Inc. | 174,108 | 12,899,662 |
| Micron Technology, Inc. | 357,801 | 24,724,049 |
| MKS Instruments, Inc. | 17,685 | 2,653,634 |
| Monolithic Power Systems, Inc. | 13,707 | 7,202,480 |
| NVIDIA Corp. | 792,135 | 202,525,155 |
| NXP Semiconductors N.V. | 84,249 | 16,922,254 |
| ON Semiconductor Corp. * | 136,795 | 6,575,736 |
| Power Integrations, Inc. | 19,121 | 1,973,478 |
| Qorvo, Inc. * | 35,290 | 5,936,837 |
| QUALCOMM, Inc. | 358,510 | 47,696,170 |
| Silicon Laboratories, Inc. * | 13,051 | 2,463,507 |
| Skyworks Solutions, Inc. | 52,474 | 8,769,980 |
| SolarEdge Technologies, Inc. * | 16,738 | 5,936,634 |
| Synaptics, Inc. * | 11,174 | 2,174,125 |
| Teradyne, Inc. | 52,402 | 7,244,053 |
| Texas Instruments, Inc. | 293,375 | 55,001,945 |
| Universal Display Corp. | 13,786 | 2,525,595 |
| Wolfspeed, Inc. * | 36,537 | 4,388,459 |
| Xilinx, Inc. | 78,830 | 14,189,400 |
| 768,286,661 | ||
| Software & Services 15.7% | ||
| Accenture plc, Class A | 201,527 | 72,305,872 |
| Adobe, Inc. * | 151,432 | 98,485,316 |
| Affirm Holdings, Inc. * | 29,554 | 4,802,525 |
| Akamai Technologies, Inc. * | 51,664 | 5,448,485 |
| Amdocs Ltd. | 40,786 | 3,174,782 |
| Anaplan, Inc. * | 46,000 | 2,999,660 |
| ANSYS, Inc. * | 27,720 | 10,521,958 |
| AppLovin Corp., Class A * | 8,558 | 840,824 |
| Asana, Inc., Class A * | 24,817 | 3,370,149 |
| Aspen Technology, Inc. * | 21,830 | 3,420,543 |
| Autodesk, Inc. * | 69,924 | 22,208,562 |
| Automatic Data Processing, Inc. | 134,446 | 30,181,783 |
| Avalara, Inc. * | 27,337 | 4,910,819 |
| Bentley Systems, Inc., Class B | 58,355 | 3,451,698 |
| Bill.com Holdings, Inc. * | 28,060 | 8,258,339 |
| Black Knight, Inc. * | 49,700 | 3,484,467 |
| Blackline, Inc. * | 16,864 | 2,139,536 |
| Broadridge Financial Solutions, Inc. | 36,847 | 6,573,873 |
| C3.ai, Inc., Class A * | 22,237 | 1,003,333 |
| Cadence Design Systems, Inc. * | 87,973 | 15,229,006 |
| Ceridian HCM Holding, Inc. * | 42,846 | 5,366,462 |
| Citrix Systems, Inc. | 39,683 | 3,759,171 |
| Cloudflare, Inc., Class A * | 83,734 | 16,304,684 |
| Cognizant Technology Solutions Corp., Class A | 166,991 | 13,040,327 |
| Concentrix Corp. | 13,803 | 2,452,517 |
| Consensus Cloud Solutions, Inc. * | 5,099 | 322,919 |
| Coupa Software, Inc. * | 23,513 | 5,353,910 |
| Crowdstrike Holdings, Inc., Class A * | 63,333 | 17,847,239 |
| Datadog, Inc., Class A * | 76,200 | 12,729,210 |
| Digital Turbine, Inc. * | 27,802 | 2,392,640 |
| DigitalOcean Holdings, Inc. * | 5,458 | 532,646 |
| DocuSign, Inc. * | 61,929 | 17,234,221 |
| Dolby Laboratories, Inc., Class A | 20,661 | 1,825,399 |
| DoubleVerify Holdings, Inc. * | 4,498 | 177,806 |
| Dropbox, Inc., Class A * | 91,212 | 2,781,054 |
| Duck Creek Technologies, Inc. * | 23,835 | 750,803 |
| DXC Technology Co. * | 79,190 | 2,579,218 |
| Dynatrace, Inc. * | 62,321 | 4,674,075 |
| Elastic N.V. * | 22,681 | 3,935,380 |
| EPAM Systems, Inc. * | 17,993 | 12,113,607 |
49
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Euronet Worldwide, Inc. * | 17,044 | 1,912,166 |
| Everbridge, Inc. * | 12,102 | 1,927,970 |
| Fair Isaac Corp. * | 9,014 | 3,589,375 |
| Fastly, Inc., Class A * | 33,729 | 1,707,025 |
| Fidelity National Information Services, Inc. | 196,298 | 21,738,041 |
| Fiserv, Inc. * | 189,374 | 18,651,445 |
| Five9, Inc. * | 21,618 | 3,415,860 |
| FleetCor Technologies, Inc. * | 26,241 | 6,492,286 |
| Fortinet, Inc. * | 43,080 | 14,489,527 |
| Gartner, Inc. * | 26,576 | 8,820,840 |
| Genpact Ltd. | 54,713 | 2,700,087 |
| Global Payments, Inc. | 93,352 | 13,348,402 |
| GoDaddy, Inc., Class A * | 53,855 | 3,725,150 |
| Guidewire Software, Inc. * | 26,397 | 3,318,895 |
| HubSpot, Inc. * | 14,193 | 11,499,594 |
| International Business Machines Corp. | 284,875 | 35,637,862 |
| Intuit, Inc. | 86,857 | 54,371,613 |
| Jack Henry & Associates, Inc. | 23,748 | 3,953,567 |
| Manhattan Associates, Inc. * | 20,137 | 3,655,671 |
| Mastercard, Inc., Class A | 276,890 | 92,902,133 |
| Maximus, Inc. | 19,808 | 1,675,163 |
| Microsoft Corp. | 2,388,770 | 792,163,907 |
| MicroStrategy, Inc., Class A *(a) | 2,474 | 1,769,058 |
| MongoDB, Inc. * | 20,545 | 10,709,903 |
| nCino, Inc. * | 17,889 | 1,299,815 |
| NCR Corp. * | 42,402 | 1,676,575 |
| NortonLifeLock, Inc. | 184,708 | 4,700,819 |
| Nuance Communications, Inc. * | 90,547 | 4,984,612 |
| Nutanix, Inc., Class A * | 65,508 | 2,247,579 |
| Okta, Inc. * | 39,748 | 9,824,911 |
| Oracle Corp. | 523,596 | 50,233,800 |
| Palantir Technologies, Inc., Class A * | 498,235 | 12,894,322 |
| Palo Alto Networks, Inc. * | 30,954 | 15,758,372 |
| Paychex, Inc. | 101,708 | 12,538,562 |
| Paycom Software, Inc. * | 15,277 | 8,369,504 |
| Paylocity Holding Corp. * | 12,487 | 3,810,283 |
| PayPal Holdings, Inc. * | 373,488 | 86,869,574 |
| Pegasystems, Inc. | 12,737 | 1,512,137 |
| PTC, Inc. * | 33,736 | 4,296,280 |
| Rapid7, Inc. * | 17,643 | 2,271,536 |
| RingCentral, Inc., Class A * | 25,939 | 6,323,409 |
| salesforce.com, Inc. * | 308,798 | 92,543,673 |
| ServiceNow, Inc. * | 62,962 | 43,932,365 |
| Smartsheet, Inc., Class A * | 39,759 | 2,743,769 |
| Snowflake, Inc., Class A * | 72,478 | 25,645,616 |
| Splunk, Inc. * | 52,028 | 8,575,255 |
| Sprout Social, Inc., Class A * | 14,327 | 1,829,271 |
| Square, Inc., Class A * | 126,426 | 32,175,417 |
| SS&C Technologies Holdings, Inc. | 70,490 | 5,601,840 |
| Synopsys, Inc. * | 48,483 | 16,153,566 |
| Teradata Corp. * | 34,670 | 1,960,935 |
| The Trade Desk, Inc., Class A * | 137,920 | 10,331,587 |
| The Western Union Co. | 130,451 | 2,376,817 |
| Twilio, Inc., Class A * | 53,059 | 15,459,270 |
| Tyler Technologies, Inc. * | 12,955 | 7,037,415 |
| UiPath, Inc., Class A * | 81,318 | 4,086,230 |
| Unity Software, Inc. * | 50,289 | 7,609,229 |
| Varonis Systems, Inc. * | 34,107 | 2,208,087 |
| VeriSign, Inc. * | 30,884 | 6,876,940 |
| Visa, Inc., Class A | 536,401 | 113,593,640 |
| VMware, Inc., Class A *(a) | 25,342 | 3,844,381 |
| WEX, Inc. * | 14,404 | 2,156,279 |
| Workday, Inc., Class A * | 60,067 | 17,418,229 |
| Workiva, Inc. * | 13,661 | 2,043,003 |
| Zendesk, Inc. * | 37,986 | 3,866,975 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Zoom Video Communications, Inc., Class A * | 68,810 | 18,898,667 |
| Zscaler, Inc. * | 24,816 | 7,912,830 |
| 2,229,653,734 | ||
| Technology Hardware & Equipment 7.1% | ||
| Amphenol Corp., Class A | 189,988 | 14,585,379 |
| Apple Inc. | 4,991,730 | 747,761,154 |
| Arista Networks, Inc. * | 17,874 | 7,322,799 |
| Arrow Electronics, Inc. * | 22,748 | 2,633,081 |
| CDW Corp. | 43,676 | 8,152,125 |
| Ciena Corp. * | 49,100 | 2,665,639 |
| Cisco Systems, Inc. | 1,339,504 | 74,972,039 |
| Cognex Corp. | 56,126 | 4,916,076 |
| Coherent, Inc. * | 7,793 | 1,982,539 |
| Corning, Inc. | 244,245 | 8,687,795 |
| Dell Technologies, Inc., Class C * | 88,130 | 9,693,419 |
| F5 Networks, Inc. * | 19,078 | 4,028,320 |
| Hewlett Packard Enterprise Co. | 417,205 | 6,112,053 |
| HP, Inc. | 381,602 | 11,573,989 |
| II-VI, Inc. * | 33,796 | 2,044,996 |
| IPG Photonics Corp. * | 11,535 | 1,834,180 |
| Jabil, Inc. | 46,264 | 2,773,989 |
| Juniper Networks, Inc. | 102,862 | 3,036,486 |
| Keysight Technologies, Inc. * | 58,525 | 10,535,670 |
| Littelfuse, Inc. | 7,876 | 2,319,876 |
| Lumentum Holdings, Inc. * | 24,456 | 2,019,576 |
| Motorola Solutions, Inc. | 53,781 | 13,369,419 |
| National Instruments Corp. | 41,806 | 1,775,501 |
| NetApp, Inc. | 71,125 | 6,351,462 |
| Novanta, Inc. * | 11,214 | 1,935,088 |
| Pure Storage, Inc., Class A * | 84,751 | 2,276,412 |
| Seagate Technology Holdings plc | 66,526 | 5,925,471 |
| SYNNEX Corp. | 13,180 | 1,383,900 |
| TE Connectivity Ltd. | 104,219 | 15,215,974 |
| Teledyne Technologies, Inc. * | 14,805 | 6,650,702 |
| Trimble, Inc. * | 79,928 | 6,983,309 |
| Ubiquiti, Inc. | 1,986 | 606,783 |
| Vontier Corp. | 54,184 | 1,833,045 |
| Western Digital Corp. * | 97,207 | 5,082,954 |
| Zebra Technologies Corp., Class A * | 16,968 | 9,060,064 |
| 1,008,101,264 | ||
| Telecommunication Services 1.1% | ||
| AT&T, Inc. | 2,269,353 | 57,323,857 |
| Frontier Communications Parent, Inc. * | 65,961 | 2,042,153 |
| Iridium Communications, Inc. * | 41,910 | 1,699,450 |
| Liberty Global plc, Class C * | 110,348 | 3,182,436 |
| Lumen Technologies, Inc. | 317,046 | 3,760,166 |
| T-Mobile US, Inc. * | 186,355 | 21,436,416 |
| Verizon Communications, Inc. | 1,315,774 | 69,722,864 |
| 159,167,342 | ||
| Transportation 1.9% | ||
| Alaska Air Group, Inc. * | 40,258 | 2,125,622 |
| AMERCO | 3,110 | 2,292,039 |
| American Airlines Group, Inc. * | 205,783 | 3,951,034 |
| Avis Budget Group, Inc. * | 15,024 | 2,603,809 |
| C.H. Robinson Worldwide, Inc. | 41,643 | 4,038,955 |
| CSX Corp. | 716,528 | 25,916,818 |
| Delta Air Lines, Inc. * | 202,985 | 7,942,803 |
| Expeditors International of Washington, Inc. | 53,832 | 6,635,332 |
| FedEx Corp. | 78,204 | 18,419,388 |
50
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| GXO Logistics, Inc. * | 31,339 | 2,782,903 |
| JB Hunt Transport Services, Inc. | 26,828 | 5,290,213 |
| Kansas City Southern | 28,915 | 8,970,879 |
| Knight-Swift Transportation Holdings, Inc. | 52,718 | 2,988,583 |
| Landstar System, Inc. | 12,380 | 2,176,528 |
| Lyft, Inc., Class A * | 92,380 | 4,237,471 |
| Norfolk Southern Corp. | 78,496 | 23,003,253 |
| Old Dominion Freight Line, Inc. | 29,810 | 10,175,644 |
| Saia, Inc. * | 8,339 | 2,607,105 |
| Southwest Airlines Co. * | 187,801 | 8,879,231 |
| TuSimple Holdings, Inc., Class A * | 10,592 | 414,359 |
| Uber Technologies, Inc. * | 515,152 | 22,573,961 |
| Union Pacific Corp. | 207,276 | 50,036,426 |
| United Airlines Holdings, Inc. * | 103,248 | 4,763,863 |
| United Parcel Service, Inc., Class B | 231,505 | 49,419,372 |
| XPO Logistics, Inc. * | 31,338 | 2,688,800 |
| 274,934,391 | ||
| Utilities 2.3% | ||
| Alliant Energy Corp. | 80,085 | 4,530,408 |
| Ameren Corp. | 81,379 | 6,859,436 |
| American Electric Power Co., Inc. | 159,111 | 13,478,293 |
| American Water Works Co., Inc. | 57,742 | 10,057,502 |
| Atmos Energy Corp. | 41,945 | 3,863,973 |
| Avangrid, Inc. | 22,070 | 1,163,089 |
| CenterPoint Energy, Inc. | 188,462 | 4,907,551 |
| CMS Energy Corp. | 92,067 | 5,556,243 |
| Consolidated Edison, Inc. | 112,323 | 8,469,154 |
| Dominion Energy, Inc. | 257,000 | 19,514,010 |
| DTE Energy Co. | 61,587 | 6,980,886 |
| Duke Energy Corp. | 244,592 | 24,950,830 |
| Edison International | 120,775 | 7,600,371 |
| Entergy Corp. | 63,667 | 6,558,974 |
| Essential Utilities, Inc. | 71,172 | 3,350,066 |
| Evergy, Inc. | 72,700 | 4,634,625 |
| Eversource Energy | 109,282 | 9,278,042 |
| Exelon Corp. | 310,905 | 16,537,037 |
| FirstEnergy Corp. | 172,347 | 6,640,530 |
| IDACORP, Inc. | 16,060 | 1,675,379 |
| MDU Resources Group, Inc. | 65,040 | 1,998,679 |
| NextEra Energy, Inc. | 623,617 | 53,213,239 |
| NiSource, Inc. | 125,076 | 3,085,625 |
| NRG Energy, Inc. | 77,658 | 3,097,778 |
| OGE Energy Corp. | 62,742 | 2,137,620 |
| PG&E Corp. * | 478,621 | 5,552,004 |
| Pinnacle West Capital Corp. | 36,199 | 2,334,474 |
| PPL Corp. | 244,237 | 7,034,026 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Public Service Enterprise Group, Inc. | 160,698 | 10,252,532 |
| Sempra Energy | 101,613 | 12,968,867 |
| The AES Corp. | 210,544 | 5,290,971 |
| The Southern Co. | 336,754 | 20,986,509 |
| UGI Corp. | 66,266 | 2,876,607 |
| Vistra Corp. | 151,772 | 2,973,213 |
| WEC Energy Group, Inc. | 100,236 | 9,027,254 |
| Xcel Energy, Inc. | 171,244 | 11,060,650 |
| 320,496,447 | ||
| Total Common Stocks (Cost $3,024,070,647) | 14,153,404,120 | |
| SHORT-TERM INVESTMENTS 0.4% OF NET ASSETS | ||
| Money Market Funds 0.4% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (c) | 47,164,568 | 47,164,568 |
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 11,178,669 | 11,178,669 |
| 58,343,237 | ||
| Total Short-Term Investments (Cost $58,343,237) | 58,343,237 | |
| Total Investments in Securities (Cost $3,082,413,884) | 14,211,747,357 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| S&P 500 Index, e-mini, expires 12/17/21 | 279 | 64,128,150 | 2,092,641 |
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $10,928,190. |
| (b) | Issuer is affiliated with the fund’s investment adviser. |
| (c) | The rate shown is the 7-day yield. |
| (d) | Security purchased with cash collateral received for securities on loan. |
| REIT — | Real Estate Investment Trust |
Below is a summary of the fund’s transactions with affiliated issuers during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DIVIDENDS RECEIVED | |
| COMMON STOCKS 0.3% OF NET ASSETS | ||||||||
| Diversified Financials 0.3% | ||||||||
| The Charles Schwab Corp. | $19,174,156 | $1,215,400 | ($675,035) | $6,770 | $19,300,134 | $39,021,425 | 475,697 | $341,029 |
51
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $14,153,404,120 | $— | $— | $14,153,404,120 |
| Short-Term Investments1 | 58,343,237 | — | — | 58,343,237 |
| Futures Contracts2 | 2,092,641 | — | — | 2,092,641 |
| Total | $14,213,839,998 | $— | $— | $14,213,839,998 |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
52
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $3,841,180) | $39,021,425 | |
| Investments in securities, at value - unaffiliated (cost $3,078,572,704) including securities on loan of $10,928,190 | 14,172,725,932 | |
| Cash | 1,264,902 | |
| Deposit with broker for futures contracts | 7,256,500 | |
| Receivables: | ||
| Dividends | 9,826,333 | |
| Fund shares sold | 6,102,520 | |
| Variation margin on future contracts | 127,789 | |
| Income from securities on loan | + | 20,208 |
| Total assets | 14,236,345,609 | |
| Liabilities | ||
| Collateral held for securities on loan | 11,178,669 | |
| Payables: | ||
| Fund shares redeemed | 2,367,788 | |
| Investment adviser fees | + | 584,296 |
| Total liabilities | 14,130,753 | |
| Net assets | $14,222,214,856 | |
| Net Assets by Source | ||
| Capital received from investors | $2,864,705,120 | |
| Total distributable earnings | + | 11,357,509,736 |
| Net assets | $14,222,214,856 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $14,222,214,856 | 138,499,688 | $102.69 | ||
53
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $341,029 | |
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $26,950) | 176,905,959 | |
| Securities on loan, net | + | 122,456 |
| Total investment income | 177,369,444 | |
| Expenses | ||
| Investment adviser fees | + | 6,273,096 |
| Total expenses | – | 6,273,096 |
| Net investment income | 171,096,348 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - affiliated | 6,770 | |
| Net realized gains on sales of securities - unaffiliated | 141,317,673 | |
| Net realized gains on futures contracts | + | 17,125,245 |
| Net realized gains | 158,449,688 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 19,300,134 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 3,909,553,724 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 3,416,294 |
| Net change in unrealized appreciation (depreciation) | + | 3,932,270,152 |
| Net realized and unrealized gains | 4,090,719,840 | |
| Increase in net assets resulting from operations | $4,261,816,188 | |
54
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab 1000 Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $171,096,348 | $187,130,898 | |
| Net realized gains | 158,449,688 | 117,738,056 | |
| Net change in unrealized appreciation (depreciation) | + | 3,932,270,152 | 641,934,662 |
| Increase in net assets from operations | $4,261,816,188 | $946,803,616 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($306,286,999) | ($290,754,043) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 15,568,422 | $1,394,601,301 | 13,800,508 | $925,426,862 | |
| Shares reinvested | 3,026,807 | 250,256,414 | 3,367,064 | 238,859,473 | |
| Shares redeemed | + | (12,663,564) | (1,152,112,463) | (20,677,471) | (1,392,525,764) |
| Net transactions in fund shares | 5,931,665 | $492,745,252 | (3,509,899) | ($228,239,429) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 132,568,023 | $9,773,940,415 | 136,077,922 | $9,346,130,271 | |
| Total increase (decrease) | + | 5,931,665 | 4,448,274,441 | (3,509,899) | 427,810,144 |
| End of period | 138,499,688 | $14,222,214,856 | 132,568,023 | $9,773,940,415 | |
55
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $27.18 | $28.84 | $30.48 | $31.45 | $25.60 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.37 | 0.35 | 0.40 | 0.43 | 0.38 | |
| Net realized and unrealized gains (losses) | 13.29 | (0.23) | 0.54 | 0.20 | 6.62 | |
| Total from investment operations | 13.66 | 0.12 | 0.94 | 0.63 | 7.00 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.38) | (0.42) | (0.40) | (0.39) | (0.39) | |
| Distributions from net realized gains | (0.49) | (1.36) | (2.18) | (1.21) | (0.76) | |
| Total distributions | (0.87) | (1.78) | (2.58) | (1.60) | (1.15) | |
| Net asset value at end of period | $39.97 | $27.18 | $28.84 | $30.48 | $31.45 | |
| Total return | 50.82% | 0.00% | 4.95% | 1.93% | 27.84% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.04% | 0.04% | 0.04% 2 | 0.05% | 0.10% 3 | |
| Net operating expenses | N/A | N/A | N/A | N/A 4 | 0.09% 3 | |
| Net investment income (loss) | 0.98% | 1.31% | 1.43% | 1.33% | 1.31% | |
| Portfolio turnover rate | 19% 5 | 21% | 14% | 17% | 11% | |
| Net assets, end of period (x 1,000,000) | $6,587 | $3,988 | $4,187 | $3,874 | $3,531 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective December 20, 2018, the annual operating expense ratio was reduced to 0.04%. The ratio presented for period ended 10/31/19 is a blended ratio. |
| 3 | Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 4 | Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
| 5 | Portfolio turnover rate excludes in-kind transactions. |
56
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.5% OF NET ASSETS | ||
| Automobiles & Components 1.5% | ||
| Adient plc * | 204,063 | 8,493,102 |
| American Axle & Manufacturing Holdings, Inc. * | 243,568 | 2,211,598 |
| Arcimoto, Inc. *(a) | 59,465 | 694,551 |
| Canoo, Inc. *(a) | 229,658 | 1,841,857 |
| Cooper-Standard Holdings, Inc. * | 36,757 | 953,477 |
| Dana, Inc. | 314,223 | 6,972,608 |
| Dorman Products, Inc. * | 57,700 | 6,022,726 |
| Fisker, Inc. *(a) | 351,843 | 5,647,080 |
| Fox Factory Holding Corp. * | 91,145 | 14,669,788 |
| Gentherm, Inc. * | 71,749 | 5,282,879 |
| LCI Industries | 53,460 | 7,465,154 |
| Lordstown Motors Corp., Class A *(a) | 205,279 | 1,061,292 |
| Modine Manufacturing Co. * | 107,952 | 1,187,472 |
| Motorcar Parts of America, Inc. * | 41,063 | 776,912 |
| Patrick Industries, Inc. | 49,199 | 3,833,094 |
| Standard Motor Products, Inc. | 45,127 | 2,161,583 |
| Stoneridge, Inc. * | 56,946 | 1,080,835 |
| Tenneco, Inc., Class A * | 147,429 | 1,956,383 |
| The Goodyear Tire & Rubber Co. * | 597,039 | 11,415,386 |
| Visteon Corp. * | 60,077 | 6,799,515 |
| Winnebago Industries, Inc. | 69,969 | 4,736,202 |
| Workhorse Group, Inc. *(a) | 262,205 | 1,764,640 |
| XL Fleet Corp. *(a) | 75,386 | 413,115 |
| XPEL, Inc. * | 38,671 | 2,935,129 |
| 100,376,378 | ||
| Banks 9.7% | ||
| 1st Source Corp. | 36,695 | 1,771,635 |
| Allegiance Bancshares, Inc. | 41,022 | 1,606,832 |
| Amalgamated Financial Corp. | 29,248 | 536,993 |
| Amerant Bancorp, Inc. * | 44,713 | 1,187,130 |
| American National Bankshares, Inc. | 22,654 | 840,463 |
| Ameris Bancorp | 143,941 | 7,541,069 |
| Arrow Financial Corp. | 30,185 | 1,082,132 |
| Associated Banc-Corp. | 326,616 | 7,277,004 |
| Atlantic Capital Bancshares, Inc. * | 42,560 | 1,170,826 |
| Atlantic Union Bankshares Corp. | 165,571 | 5,939,032 |
| Axos Financial, Inc. * | 123,011 | 6,519,583 |
| Banc of California, Inc. | 117,998 | 2,398,899 |
| BancFirst Corp. | 37,114 | 2,412,781 |
| Bank First Corp. | 14,599 | 1,036,383 |
| Bank of Marin Bancorp | 34,456 | 1,313,118 |
| BankUnited, Inc. | 201,551 | 8,174,909 |
| Banner Corp. | 75,035 | 4,334,022 |
| Bar Harbor Bankshares | 32,187 | 955,954 |
| Berkshire Hills Bancorp, Inc. | 105,624 | 2,867,692 |
| Blue Foundry Bancorp * | 60,684 | 853,824 |
| Blue Ridge Bankshares, Inc. (a) | 36,751 | 674,381 |
| Bridgewater Bancshares, Inc. * | 44,576 | 806,380 |
| Brookline Bancorp, Inc. | 165,573 | 2,657,447 |
| Bryn Mawr Bank Corp. | 43,017 | 1,993,408 |
| Business First Bancshares, Inc. | 40,720 | 1,086,410 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Byline Bancorp, Inc. | 53,228 | 1,371,153 |
| Cadence Bank | 407,444 | 11,824,036 |
| Cambridge Bancorp | 14,811 | 1,359,798 |
| Camden National Corp. | 31,849 | 1,516,012 |
| Capital Bancorp, Inc. | 16,337 | 415,777 |
| Capital City Bank Group, Inc. | 28,530 | 766,601 |
| Capitol Federal Financial, Inc. | 279,486 | 3,390,165 |
| Capstar Financial Holdings, Inc. | 44,605 | 979,972 |
| Carter Bankshares, Inc. * | 55,367 | 829,398 |
| Cathay General Bancorp | 161,922 | 6,831,489 |
| CBTX, Inc. | 39,428 | 1,072,442 |
| Central Pacific Financial Corp. | 60,212 | 1,655,228 |
| Century Bancorp, Inc., Class A | 6,010 | 692,052 |
| CIT Group, Inc. | 214,319 | 10,615,220 |
| Citizens & Northern Corp. | 34,104 | 869,993 |
| City Holding Co. | 32,737 | 2,605,210 |
| Civista Bancshares, Inc. | 31,559 | 759,310 |
| CNB Financial Corp. | 35,074 | 900,350 |
| Coastal Financial Corp. * | 20,415 | 776,791 |
| Columbia Banking System, Inc. | 168,928 | 5,765,513 |
| Columbia Financial, Inc. * | 85,608 | 1,594,021 |
| Community Bank System, Inc. | 115,523 | 8,279,533 |
| Community Trust Bancorp, Inc. | 33,584 | 1,466,949 |
| ConnectOne Bancorp, Inc. | 80,706 | 2,722,213 |
| CrossFirst Bankshares, Inc. * | 99,602 | 1,417,336 |
| Customers Bancorp, Inc. * | 64,536 | 3,439,123 |
| CVB Financial Corp. | 279,634 | 5,598,273 |
| Dime Community Bancshares, Inc. | 74,799 | 2,668,828 |
| Eagle Bancorp, Inc. | 68,515 | 3,877,264 |
| Eastern Bankshares, Inc. | 371,899 | 7,724,342 |
| Enterprise Bancorp, Inc. | 19,872 | 738,245 |
| Enterprise Financial Services Corp. | 76,815 | 3,611,841 |
| Equity Bancshares, Inc., Class A | 29,400 | 983,724 |
| Essent Group Ltd. | 238,841 | 11,464,368 |
| Farmers National Banc Corp. | 66,741 | 1,189,325 |
| FB Financial Corp. | 71,592 | 3,245,265 |
| Federal Agricultural Mortgage Corp., Class C | 19,754 | 2,490,782 |
| Fidelity D&D Bancorp, Inc. | 8,679 | 439,071 |
| Finance Of America Cos., Inc., Class A *(a) | 77,115 | 369,381 |
| Financial Institutions, Inc. | 34,236 | 1,092,813 |
| First BanCorp | 445,181 | 6,076,721 |
| First BanCorp (North Carolina) | 73,942 | 3,580,272 |
| First Bank | 33,073 | 497,418 |
| First Busey Corp. | 109,161 | 2,782,514 |
| First Commonwealth Financial Corp. | 205,698 | 3,147,179 |
| First Community Bankshares, Inc. | 36,036 | 1,168,287 |
| First Financial Bancorp | 204,669 | 4,867,029 |
| First Financial Bankshares, Inc. | 280,359 | 14,219,808 |
| First Financial Corp. | 24,759 | 1,060,923 |
| First Foundation, Inc. | 85,584 | 2,277,390 |
| First Internet Bancorp | 19,727 | 671,507 |
| First Interstate BancSystem, Inc., Class A | 88,775 | 3,690,377 |
| First Merchants Corp. | 116,870 | 4,859,455 |
| First Mid Bancshares, Inc. | 35,983 | 1,550,148 |
| First Midwest Bancorp, Inc. | 246,005 | 4,735,596 |
57
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Five Star Bancorp | 11,223 | 307,735 |
| Flagstar Bancorp, Inc. | 112,304 | 5,299,626 |
| Flushing Financial Corp. | 64,007 | 1,537,448 |
| FS Bancorp, Inc. | 15,574 | 536,680 |
| Fulton Financial Corp. | 343,151 | 5,524,731 |
| German American Bancorp, Inc. | 53,210 | 2,097,538 |
| Glacier Bancorp, Inc. | 238,007 | 13,159,407 |
| Great Southern Bancorp, Inc. | 22,876 | 1,290,893 |
| Great Western Bancorp, Inc. | 119,812 | 4,079,599 |
| Guaranty Bancshares, Inc. | 17,539 | 658,414 |
| Hancock Whitney Corp. | 186,867 | 9,246,179 |
| Hanmi Financial Corp. | 66,530 | 1,476,301 |
| HarborOne Bancorp, Inc. | 107,950 | 1,551,242 |
| HBT Financial, Inc. | 21,177 | 381,821 |
| Heartland Financial USA, Inc. | 86,965 | 4,358,686 |
| Heritage Commerce Corp. | 127,442 | 1,528,030 |
| Heritage Financial Corp. | 76,570 | 1,901,999 |
| Hilltop Holdings, Inc. | 137,440 | 4,870,874 |
| Home Bancorp, Inc. | 16,260 | 678,855 |
| Home BancShares, Inc. | 328,965 | 7,816,208 |
| Home Point Capital, Inc. (a) | 15,618 | 71,452 |
| HomeStreet, Inc. | 44,001 | 2,075,087 |
| HomeTrust Bancshares, Inc. | 33,332 | 1,013,293 |
| Hope Bancorp, Inc. | 257,449 | 3,756,181 |
| Horizon Bancorp, Inc. | 92,612 | 1,766,111 |
| Howard Bancorp, Inc. * | 28,923 | 598,995 |
| Independent Bank Corp. | 71,127 | 6,010,231 |
| Independent Bank Corp., Michigan | 43,892 | 988,887 |
| Independent Bank Group, Inc. | 81,193 | 5,869,442 |
| International Bancshares Corp. | 116,382 | 4,934,597 |
| Investors Bancorp, Inc. | 493,426 | 7,549,418 |
| Kearny Financial Corp. | 158,414 | 2,125,916 |
| Lakeland Bancorp, Inc. | 105,786 | 1,902,032 |
| Lakeland Financial Corp. | 52,539 | 3,775,978 |
| Live Oak Bancshares, Inc. | 68,226 | 6,084,395 |
| Luther Burbank Corp. | 32,974 | 478,453 |
| Macatawa Bank Corp. | 54,959 | 461,656 |
| Mercantile Bank Corp. | 33,138 | 1,138,953 |
| Merchants Bancorp | 21,136 | 939,072 |
| Meridian Bancorp, Inc. | 101,408 | 2,352,666 |
| Meta Financial Group, Inc. | 67,738 | 3,755,395 |
| Metrocity Bankshares, Inc. | 41,309 | 970,762 |
| Metropolitan Bank Holding Corp. * | 16,414 | 1,491,376 |
| Mid Penn Bancorp, Inc. | 20,847 | 584,133 |
| Midland States Bancorp, Inc. | 47,013 | 1,206,354 |
| MidWestOne Financial Group, Inc. | 30,878 | 968,025 |
| Mr Cooper Group, Inc. * | 153,148 | 6,714,008 |
| MVB Financial Corp. | 21,312 | 909,809 |
| National Bank Holdings Corp., Class A | 63,702 | 2,762,756 |
| NBT Bancorp, Inc. | 90,644 | 3,325,728 |
| Nicolet Bankshares, Inc. * | 23,345 | 1,678,272 |
| NMI Holdings, Inc., Class A * | 181,997 | 4,418,887 |
| Northfield Bancorp, Inc. | 97,830 | 1,716,917 |
| Northrim BanCorp, Inc. | 12,856 | 571,064 |
| Northwest Bancshares, Inc. | 265,005 | 3,657,069 |
| OceanFirst Financial Corp. | 127,342 | 2,823,172 |
| Ocwen Financial Corp. * | 17,335 | 544,492 |
| OFG Bancorp | 109,650 | 2,839,935 |
| Old National Bancorp | 356,403 | 6,087,363 |
| Old Second Bancorp, Inc. | 58,989 | 798,711 |
| Origin Bancorp, Inc. | 47,986 | 2,140,176 |
| Orrstown Financial Services, Inc. | 23,415 | 555,170 |
| Pacific Premier Bancorp, Inc. | 202,292 | 8,494,241 |
| Park National Corp. | 30,968 | 3,982,175 |
| PCSB Financial Corp. | 28,840 | 551,132 |
| Peapack-Gladstone Financial Corp. | 38,680 | 1,297,714 |
| PennyMac Financial Services, Inc. | 70,874 | 4,398,440 |
| Peoples Bancorp, Inc. | 54,542 | 1,743,162 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Peoples Financial Services Corp. | 15,235 | 697,458 |
| Pioneer Bancorp, Inc. * | 24,794 | 313,892 |
| Preferred Bank | 29,720 | 2,037,900 |
| Premier Financial Corp. | 80,098 | 2,553,524 |
| Primis Financial Corp. | 52,614 | 797,102 |
| Provident Bancorp, Inc. | 33,473 | 603,183 |
| Provident Financial Services, Inc. | 164,451 | 4,071,807 |
| QCR Holdings, Inc. | 33,322 | 1,837,375 |
| Radian Group, Inc. | 402,763 | 9,613,953 |
| RBB Bancorp | 29,973 | 769,407 |
| Red River Bancshares, Inc. | 9,603 | 503,005 |
| Reliant Bancorp, Inc. | 33,012 | 1,118,447 |
| Renasant Corp. | 119,560 | 4,472,740 |
| Republic Bancorp, Inc., Class A | 20,525 | 1,108,761 |
| Republic First Bancorp, Inc. * | 97,048 | 300,849 |
| S&T Bancorp, Inc. | 83,491 | 2,551,485 |
| Sandy Spring Bancorp, Inc. | 100,216 | 4,756,251 |
| Seacoast Banking Corp. of Florida | 117,490 | 4,280,161 |
| ServisFirst Bancshares, Inc. | 107,991 | 8,672,757 |
| Sierra Bancorp | 29,721 | 741,836 |
| Silvergate Capital Corp., Class A * | 52,902 | 8,285,511 |
| Simmons First National Corp., Class A | 231,718 | 6,926,051 |
| SmartFinancial, Inc. | 30,226 | 785,574 |
| South Plains Financial, Inc. | 23,187 | 604,253 |
| Southern First Bancshares, Inc. * | 16,160 | 870,539 |
| Southern Missouri Bancorp, Inc. | 16,403 | 892,323 |
| Southside Bancshares, Inc. | 67,149 | 2,774,597 |
| SouthState Corp. | 150,983 | 11,790,262 |
| Spirit of Texas Bancshares, Inc. | 27,173 | 661,119 |
| Stock Yards Bancorp, Inc. | 52,152 | 3,194,310 |
| Summit Financial Group, Inc. | 24,809 | 623,450 |
| Texas Capital Bancshares, Inc. * | 109,310 | 6,624,186 |
| The Bancorp, Inc. * | 112,875 | 3,448,331 |
| The Bank of N.T. Butterfield & Son Ltd. | 108,596 | 3,898,596 |
| The First BanCorp, Inc. | 22,671 | 672,649 |
| The First Bancshares, Inc. | 43,760 | 1,761,340 |
| The First of Long Island Corp. | 49,902 | 1,004,527 |
| The Hingham Institution For Savings | 3,150 | 1,137,906 |
| Tompkins Financial Corp. | 30,466 | 2,501,563 |
| Towne Bank | 145,043 | 4,571,755 |
| TriCo Bancshares | 59,386 | 2,602,888 |
| TriState Capital Holdings, Inc. * | 62,520 | 1,878,726 |
| Triumph Bancorp, Inc. * | 50,755 | 5,953,562 |
| TrustCo Bank Corp. | 40,256 | 1,350,991 |
| Trustmark Corp. | 134,407 | 4,275,487 |
| UMB Financial Corp. | 94,685 | 9,356,772 |
| United Bankshares, Inc. | 270,374 | 10,001,134 |
| United Community Banks, Inc. | 187,739 | 6,540,827 |
| Univest Financial Corp. | 61,853 | 1,775,181 |
| Valley National Bancorp | 864,652 | 11,465,286 |
| Velocity Financial, Inc. * | 18,197 | 233,831 |
| Veritex Holdings, Inc. | 102,972 | 4,216,703 |
| Walker & Dunlop, Inc. | 63,264 | 8,228,748 |
| Washington Federal, Inc. | 146,043 | 5,164,080 |
| Washington Trust Bancorp, Inc. | 36,936 | 2,018,922 |
| Waterstone Financial, Inc. | 47,047 | 972,461 |
| WesBanco, Inc. | 136,766 | 4,755,354 |
| West Bancorp, Inc. | 35,103 | 1,112,765 |
| Westamerica Bancorp | 56,495 | 3,150,161 |
| WSFS Financial Corp. | 101,729 | 5,270,579 |
| 639,968,850 | ||
| Capital Goods 9.5% | ||
| AAON, Inc. | 90,476 | 6,482,605 |
| AAR Corp. * | 73,474 | 2,598,775 |
| Advent Technologies Holdings, Inc. *(a) | 32,317 | 309,920 |
| Aerojet Rocketdyne Holdings, Inc. | 161,464 | 7,106,031 |
58
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AeroVironment, Inc. * | 48,628 | 4,333,241 |
| AerSale Corp. *(a) | 19,181 | 428,887 |
| AgEagle Aerial Systems, Inc. *(a) | 141,510 | 406,134 |
| Alamo Group, Inc. | 21,367 | 3,230,690 |
| Albany International Corp., Class A | 66,458 | 5,359,838 |
| Allied Motion Technologies, Inc. | 24,752 | 870,033 |
| Alta Equipment Group, Inc. * | 41,241 | 595,108 |
| Altra Industrial Motion Corp. | 139,733 | 7,287,076 |
| Ameresco, Inc., Class A * | 66,847 | 5,490,144 |
| American Superconductor Corp. * | 60,019 | 1,103,149 |
| American Woodmark Corp. * | 36,269 | 2,493,131 |
| API Group Corp. * | 428,471 | 9,332,098 |
| Apogee Enterprises, Inc. | 54,819 | 2,298,561 |
| Applied Industrial Technologies, Inc. | 83,657 | 8,154,884 |
| Arcosa, Inc. | 104,473 | 5,404,388 |
| Argan, Inc. | 32,286 | 1,332,120 |
| Array Technologies, Inc. * | 276,580 | 5,904,983 |
| Astec Industries, Inc. | 49,022 | 2,616,794 |
| Astronics Corp. * | 52,077 | 671,793 |
| Atkore, Inc. * | 99,661 | 9,420,954 |
| AZZ, Inc. | 53,635 | 2,849,628 |
| Babcock & Wilcox Enterprises, Inc. * | 121,470 | 829,640 |
| Barnes Group, Inc. | 102,108 | 4,282,410 |
| Beacon Roofing Supply, Inc. * | 120,642 | 6,378,343 |
| Beam Global *(a) | 18,650 | 587,475 |
| Blink Charging Co. *(a) | 78,940 | 2,510,292 |
| Bloom Energy Corp., Class A * | 300,270 | 9,386,440 |
| Blue Bird Corp. * | 34,553 | 677,584 |
| BlueLinx Holdings, Inc. * | 20,083 | 956,553 |
| Boise Cascade Co. | 84,954 | 4,810,096 |
| Byrna Technologies, Inc. *(a) | 40,393 | 680,622 |
| Caesarstone Ltd. | 49,252 | 614,665 |
| CAI International, Inc. | 35,212 | 1,969,407 |
| Chart Industries, Inc. * | 78,876 | 14,002,068 |
| CIRCOR International, Inc. * | 39,274 | 1,120,880 |
| Columbus McKinnon Corp. | 59,954 | 2,834,026 |
| Comfort Systems USA, Inc. | 77,063 | 7,048,953 |
| Commercial Vehicle Group, Inc. * | 67,805 | 680,762 |
| Concrete Pumping Holdings, Inc. * | 56,380 | 484,868 |
| Construction Partners, Inc., Class A * | 62,394 | 2,221,850 |
| Cornerstone Building Brands, Inc. * | 119,098 | 1,704,292 |
| CSW Industrials, Inc. | 31,954 | 4,429,464 |
| Custom Truck One Source, Inc. *(a) | 99,937 | 904,430 |
| Desktop Metal, Inc., Class A * | 323,659 | 2,262,376 |
| Douglas Dynamics, Inc. | 49,161 | 2,079,510 |
| Ducommun, Inc. * | 23,183 | 1,121,825 |
| DXP Enterprises, Inc. * | 38,627 | 1,273,146 |
| Dycom Industries, Inc. * | 64,742 | 5,141,810 |
| EMCOR Group, Inc. | 115,005 | 13,971,958 |
| Encore Wire Corp. | 43,490 | 5,830,269 |
| Energy Recovery, Inc. * | 91,806 | 1,865,498 |
| Enerpac Tool Group Corp. | 130,169 | 2,719,230 |
| EnerSys | 92,646 | 7,415,386 |
| EnPro Industries, Inc. | 44,690 | 4,006,905 |
| Eos Energy Enterprises, Inc. *(a) | 93,330 | 984,632 |
| ESCO Technologies, Inc. | 55,209 | 4,668,473 |
| EVI Industries, Inc. * | 12,419 | 391,199 |
| Evoqua Water Technologies Corp. * | 249,886 | 10,452,731 |
| Federal Signal Corp. | 129,779 | 5,555,839 |
| Fluor Corp. * | 307,514 | 5,978,072 |
| Franklin Electric Co., Inc. | 100,206 | 8,655,794 |
| FTC Solar, Inc. * | 40,350 | 384,939 |
| FuelCell Energy, Inc. * | 703,369 | 5,619,918 |
| GATX Corp. | 76,199 | 7,227,475 |
| Gibraltar Industries, Inc. * | 70,890 | 4,619,192 |
| Global Industrial Co. | 27,141 | 1,101,382 |
| GMS, Inc. * | 92,449 | 4,578,999 |
| GrafTech International Ltd. | 438,716 | 4,694,261 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Granite Construction, Inc. | 98,352 | 3,650,826 |
| Great Lakes Dredge & Dock Corp. * | 140,292 | 2,135,244 |
| Griffon Corp. | 100,451 | 2,660,947 |
| H&E Equipment Services, Inc. | 69,375 | 3,127,425 |
| Helios Technologies, Inc. | 69,787 | 6,354,106 |
| Herc Holdings, Inc. | 53,936 | 9,818,510 |
| Hillenbrand, Inc. | 157,516 | 7,160,677 |
| Hydrofarm Holdings Group, Inc. * | 84,204 | 2,776,206 |
| Hyliion Holdings Corp. *(a) | 254,557 | 2,059,366 |
| Hyster-Yale Materials Handling, Inc. | 21,646 | 1,039,874 |
| Ideanomics, Inc. * | 891,896 | 1,765,954 |
| IES Holdings, Inc. * | 18,839 | 939,124 |
| Infrastructure and Energy Alternatives, Inc. * | 59,575 | 659,495 |
| INNOVATE Corp. * | 105,875 | 418,206 |
| Insteel Industries, Inc. | 40,424 | 1,644,044 |
| JELD-WEN Holding, Inc. * | 181,570 | 4,976,834 |
| John Bean Technologies Corp. | 67,807 | 10,018,484 |
| Kadant, Inc. | 24,877 | 5,525,679 |
| Kaman Corp. | 60,002 | 2,147,472 |
| Karat Packaging, Inc. * | 9,697 | 220,510 |
| Kennametal, Inc. | 180,176 | 7,161,996 |
| Kratos Defense & Security Solutions, Inc. * | 265,330 | 5,675,409 |
| Lawson Products, Inc. * | 10,203 | 517,292 |
| Lindsay Corp. | 23,412 | 3,410,426 |
| Luxfer Holdings plc | 58,785 | 1,182,166 |
| Masonite International Corp. * | 52,089 | 6,251,201 |
| Matrix Service Co. * | 55,216 | 564,860 |
| Maxar Technologies, Inc. | 155,168 | 4,119,710 |
| Mayville Engineering Co., Inc. * | 19,009 | 337,600 |
| McGrath RentCorp | 52,198 | 3,765,564 |
| Meritor, Inc. * | 145,858 | 3,550,184 |
| Miller Industries, Inc. | 24,036 | 868,661 |
| Moog, Inc., Class A | 62,635 | 4,730,822 |
| MRC Global, Inc. * | 175,526 | 1,456,866 |
| Mueller Industries, Inc. | 121,535 | 6,397,602 |
| Mueller Water Products, Inc., Class A | 339,242 | 5,566,961 |
| MYR Group, Inc. * | 35,503 | 3,626,632 |
| National Presto Industries, Inc. | 11,078 | 921,136 |
| Nikola Corp. *(a) | 484,981 | 5,722,776 |
| NN, Inc. * | 93,135 | 464,744 |
| Northwest Pipe Co. * | 21,061 | 500,409 |
| NOW, Inc. * | 239,682 | 1,730,504 |
| NV5 Global, Inc. * | 28,386 | 2,955,834 |
| Omega Flex, Inc. | 6,788 | 982,631 |
| PAE, Inc. * | 150,605 | 1,494,002 |
| Park Aerospace Corp. | 41,495 | 543,170 |
| Park-Ohio Holdings Corp. | 18,049 | 420,903 |
| Parsons Corp. * | 57,004 | 1,974,619 |
| PGT Innovations, Inc. * | 124,682 | 2,661,961 |
| Powell Industries, Inc. | 19,982 | 516,735 |
| Preformed Line Products Co. | 6,579 | 456,583 |
| Primoris Services Corp. | 115,218 | 3,105,125 |
| Proto Labs, Inc. * | 60,137 | 3,596,794 |
| Quanex Building Products Corp. | 72,376 | 1,499,631 |
| Raven Industries, Inc. * | 77,056 | 4,455,378 |
| RBC Bearings, Inc. * | 60,385 | 14,125,863 |
| Resideo Technologies, Inc. * | 311,706 | 7,686,670 |
| REV Group, Inc. | 62,302 | 941,383 |
| Romeo Power, Inc. *(a) | 272,173 | 1,181,231 |
| Rush Enterprises, Inc., Class A | 91,188 | 4,749,071 |
| Rush Enterprises, Inc., Class B | 13,906 | 719,079 |
| Simpson Manufacturing Co., Inc. | 94,082 | 9,981,159 |
| SPX Corp. * | 94,432 | 5,485,555 |
| SPX FLOW, Inc. | 89,776 | 6,707,165 |
| Standex International Corp. | 26,049 | 2,898,472 |
| Stem, Inc. * | 104,837 | 2,485,685 |
59
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Sterling Construction Co., Inc. * | 60,431 | 1,452,761 |
| Tennant Co. | 39,665 | 3,151,781 |
| Terex Corp. | 148,171 | 6,638,061 |
| Textainer Group Holdings Ltd. * | 103,066 | 4,049,463 |
| The ExOne Co. * | 36,115 | 831,367 |
| The Gorman-Rupp Co. | 49,211 | 2,092,452 |
| The Greenbrier Cos., Inc. | 68,832 | 2,823,489 |
| The Manitowoc Co., Inc. * | 74,268 | 1,591,563 |
| The Shyft Group, Inc. | 74,562 | 3,072,700 |
| Thermon Group Holdings, Inc. * | 71,754 | 1,239,909 |
| Titan International, Inc. * | 110,023 | 794,366 |
| Titan Machinery, Inc. * | 42,119 | 1,197,022 |
| TPI Composites, Inc. * | 78,187 | 2,629,429 |
| Transcat, Inc. * | 15,446 | 1,156,597 |
| Trinity Industries, Inc. | 170,491 | 4,782,273 |
| Triton International Ltd. | 143,941 | 8,951,691 |
| Triumph Group, Inc. * | 136,991 | 2,801,466 |
| Tutor Perini Corp. * | 89,926 | 1,224,792 |
| UFP Industries, Inc. | 130,035 | 10,640,764 |
| Vectrus, Inc. * | 24,921 | 1,206,924 |
| Veritiv Corp. * | 31,585 | 3,388,123 |
| Vicor Corp. * | 45,498 | 6,897,042 |
| View, Inc. *(a) | 213,230 | 1,138,648 |
| Wabash National Corp. | 109,144 | 1,695,006 |
| Watts Water Technologies, Inc., Class A | 59,367 | 11,280,917 |
| Welbilt, Inc. * | 282,373 | 6,680,945 |
| WESCO International, Inc. * | 96,072 | 12,447,088 |
| Willis Lease Finance Corp. * | 5,808 | 235,282 |
| WillScot Mobile Mini Holdings Corp. * | 451,125 | 15,676,594 |
| Zurn Water Solutions Corp. | 261,958 | 9,503,836 |
| 628,316,458 | ||
| Commercial & Professional Services 3.5% | ||
| ABM Industries, Inc. | 145,716 | 6,412,961 |
| Acacia Research Corp. * | 102,953 | 589,921 |
| ACCO Brands Corp. | 201,583 | 1,667,091 |
| ASGN, Inc. * | 112,066 | 13,409,818 |
| Atlas Technical Consultants, Inc. * | 28,564 | 291,067 |
| Barrett Business Services, Inc. | 16,277 | 1,334,714 |
| Brady Corp., Class A | 101,624 | 5,293,594 |
| BrightView Holdings, Inc. * | 88,925 | 1,410,350 |
| Casella Waste Systems, Inc., Class A * | 106,383 | 9,225,534 |
| CBIZ, Inc. * | 108,403 | 3,979,474 |
| CECO Environmental Corp. * | 68,968 | 474,500 |
| Cimpress plc * | 36,313 | 3,243,477 |
| CompX International, Inc. | 3,395 | 73,332 |
| CoreCivic, Inc. * | 259,456 | 2,233,916 |
| Covanta Holding Corp. | 258,148 | 5,209,427 |
| CRA International, Inc. | 15,410 | 1,692,326 |
| Deluxe Corp. | 90,601 | 3,231,738 |
| Ennis, Inc. | 54,995 | 1,041,605 |
| Exponent, Inc. | 112,004 | 12,858,059 |
| First Advantage Corp. * | 63,619 | 1,189,675 |
| Forrester Research, Inc. * | 24,515 | 1,305,424 |
| Franklin Covey Co. * | 27,109 | 1,145,355 |
| Harsco Corp. * | 168,801 | 2,886,497 |
| Healthcare Services Group, Inc. | 161,077 | 3,091,068 |
| Heidrick & Struggles International, Inc. | 41,685 | 1,954,193 |
| Heritage-Crystal Clean, Inc. * | 34,014 | 1,179,265 |
| Herman Miller, Inc. | 161,035 | 6,267,482 |
| HireQuest, Inc. | 10,796 | 194,328 |
| HNI Corp. | 93,653 | 3,502,622 |
| Huron Consulting Group, Inc. * | 48,317 | 2,423,581 |
| ICF International, Inc. | 39,754 | 3,994,879 |
| Insperity, Inc. | 78,508 | 9,813,500 |
| Interface, Inc. | 125,317 | 1,799,552 |
| KAR Auction Services, Inc. * | 257,439 | 3,776,630 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| KBR, Inc. | 304,889 | 12,939,489 |
| Kelly Services, Inc., Class A | 76,480 | 1,378,934 |
| Kforce, Inc. | 43,715 | 2,830,983 |
| Kimball International, Inc., Class B | 76,410 | 830,577 |
| Korn Ferry | 118,892 | 9,179,651 |
| ManTech International Corp., Class A | 59,262 | 5,109,570 |
| Matthews International Corp., Class A | 66,885 | 2,298,837 |
| Mistras Group, Inc. * | 44,154 | 433,592 |
| Montrose Environmental Group, Inc. * | 49,883 | 3,419,480 |
| NL Industries, Inc. | 18,784 | 108,384 |
| Pitney Bowes, Inc. | 379,236 | 2,631,898 |
| Resources Connection, Inc. | 67,607 | 1,177,038 |
| RR Donnelley & Sons Co. * | 154,593 | 989,395 |
| SP Plus Corp. * | 50,171 | 1,618,015 |
| Steelcase, Inc., Class A | 191,373 | 2,277,339 |
| Team, Inc. * | 55,916 | 135,317 |
| Tetra Tech, Inc. | 116,319 | 20,432,596 |
| The Brink's Co. | 104,989 | 7,231,642 |
| TriNet Group, Inc. * | 87,603 | 8,869,804 |
| TrueBlue, Inc. * | 75,563 | 2,104,430 |
| U.S. Ecology, Inc. * | 68,188 | 2,194,972 |
| UniFirst Corp. | 32,524 | 6,438,451 |
| Upwork, Inc. * | 254,938 | 12,012,679 |
| Viad Corp. * | 43,462 | 1,928,409 |
| VSE Corp. | 22,810 | 1,267,096 |
| Willdan Group, Inc. * | 23,612 | 789,349 |
| 228,824,882 | ||
| Consumer Durables & Apparel 3.1% | ||
| Acushnet Holdings Corp. | 74,176 | 3,778,525 |
| American Outdoor Brands, Inc. * | 30,359 | 691,578 |
| AMMO, Inc. *(a) | 187,083 | 1,129,981 |
| Aterian, Inc. * | 55,162 | 352,485 |
| Bassett Furniture Industries, Inc. | 19,743 | 333,459 |
| Beazer Homes USA, Inc. * | 62,538 | 1,132,563 |
| Callaway Golf Co. * | 249,704 | 6,754,493 |
| Casper Sleep, Inc. * | 61,542 | 224,013 |
| Cavco Industries, Inc. * | 19,967 | 4,799,667 |
| Century Communities, Inc. | 64,986 | 4,357,961 |
| Clarus Corp. | 52,326 | 1,443,151 |
| Crocs, Inc. * | 133,385 | 21,535,008 |
| Escalade, Inc. | 21,438 | 401,105 |
| Ethan Allen Interiors, Inc. | 48,972 | 1,136,640 |
| Flexsteel Industries, Inc. | 14,083 | 394,324 |
| Fossil Group, Inc. * | 102,096 | 1,206,775 |
| Genius Brands International, Inc. *(a) | 619,073 | 860,512 |
| G-III Apparel Group Ltd. * | 95,309 | 2,731,556 |
| GoPro, Inc., Class A * | 272,501 | 2,346,234 |
| Green Brick Partners, Inc. * | 66,626 | 1,735,607 |
| Hamilton Beach Brands Holding Co., Class A | 15,673 | 235,095 |
| Helen of Troy Ltd. * | 52,029 | 11,703,924 |
| Hooker Furnishings Corp. | 25,585 | 644,998 |
| Hovnanian Enterprises, Inc., Class A * | 10,885 | 917,170 |
| Installed Building Products, Inc. | 51,192 | 6,503,944 |
| iRobot Corp. * | 60,474 | 5,044,741 |
| Johnson Outdoors, Inc., Class A | 11,356 | 1,205,780 |
| KB Home | 180,369 | 7,241,815 |
| Kontoor Brands, Inc. | 111,720 | 5,921,160 |
| Landsea Homes Corp. * | 24,769 | 224,159 |
| Latham Group, Inc. * | 50,256 | 773,942 |
| La-Z-Boy, Inc. | 96,713 | 3,214,740 |
| Legacy Housing Corp. * | 17,890 | 317,548 |
| LGI Homes, Inc. * | 47,245 | 7,053,679 |
| Lifetime Brands, Inc. | 27,293 | 462,889 |
| M.D.C. Holdings, Inc. | 123,185 | 6,033,601 |
| M/I Homes, Inc. * | 61,428 | 3,517,367 |
60
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Malibu Boats, Inc., Class A * | 44,657 | 3,153,231 |
| Marine Products Corp. | 17,587 | 222,827 |
| MasterCraft Boat Holdings, Inc. * | 40,977 | 1,097,364 |
| Meritage Homes Corp. * | 81,081 | 8,814,316 |
| Movado Group, Inc. | 34,371 | 1,144,554 |
| Nautilus, Inc. * | 65,129 | 666,270 |
| Oxford Industries, Inc. | 34,566 | 3,204,960 |
| PLBY Group, Inc. *(a) | 51,239 | 1,438,791 |
| Purple Innovation, Inc. * | 123,696 | 2,387,333 |
| Rocky Brands, Inc. | 15,022 | 819,450 |
| Skyline Champion Corp. * | 113,271 | 7,172,320 |
| Smith & Wesson Brands, Inc. | 103,722 | 2,230,023 |
| Snap One Holdings Corp. * | 29,140 | 425,444 |
| Sonos, Inc. * | 260,033 | 8,482,276 |
| Steven Madden Ltd. | 176,875 | 7,977,063 |
| Sturm, Ruger & Co., Inc. | 37,038 | 2,921,557 |
| Superior Group of Cos., Inc. | 25,024 | 650,374 |
| Taylor Morrison Home Corp. * | 263,116 | 8,032,932 |
| The Lovesac Co. * | 27,472 | 2,143,091 |
| Traeger, Inc. * | 48,651 | 919,017 |
| Tri Pointe Homes, Inc. * | 243,894 | 5,899,796 |
| Tupperware Brands Corp. * | 107,102 | 2,381,949 |
| Unifi, Inc. * | 28,032 | 673,329 |
| Universal Electronics, Inc. * | 28,602 | 1,177,830 |
| Vera Bradley, Inc. * | 54,581 | 535,440 |
| Vista Outdoor, Inc. * | 124,158 | 5,194,771 |
| VOXX International Corp. * | 33,000 | 373,230 |
| Vuzix Corp. *(a) | 125,185 | 1,338,228 |
| Weber, Inc., Class A *(a) | 37,043 | 617,136 |
| Wolverine World Wide, Inc. | 176,061 | 5,839,943 |
| 206,297,034 | ||
| Consumer Services 3.0% | ||
| 2U, Inc. * | 155,129 | 4,582,511 |
| Accel Entertainment, Inc. * | 121,862 | 1,484,279 |
| Adtalem Global Education, Inc. * | 106,467 | 3,931,826 |
| American Public Education, Inc. * | 40,580 | 1,014,094 |
| Bally's Corp. * | 70,813 | 3,243,944 |
| Biglari Holdings, Inc., Class B * | 1,721 | 286,082 |
| BJ's Restaurants, Inc. * | 48,189 | 1,605,657 |
| Bloomin' Brands, Inc. * | 191,515 | 4,140,554 |
| Bluegreen Vacations Holding Corp. * | 32,915 | 842,953 |
| Brinker International, Inc. * | 98,472 | 4,131,885 |
| Carriage Services, Inc. | 35,246 | 1,813,407 |
| Carrols Restaurant Group, Inc. | 70,899 | 260,199 |
| Century Casinos, Inc. * | 57,940 | 857,512 |
| Chuy's Holdings, Inc. * | 43,234 | 1,260,703 |
| Coursera, Inc. * | 124,592 | 4,349,507 |
| Cracker Barrel Old Country Store, Inc. | 51,096 | 6,804,454 |
| Dave & Buster's Entertainment, Inc. * | 93,001 | 3,453,127 |
| Del Taco Restaurants, Inc. | 64,793 | 540,374 |
| Denny's Corp. * | 135,825 | 2,159,617 |
| Dine Brands Global, Inc. * | 35,134 | 2,969,174 |
| Drive Shack, Inc. * | 175,225 | 455,585 |
| El Pollo Loco Holdings, Inc. * | 40,299 | 592,395 |
| Esports Technologies, Inc. *(a) | 24,435 | 686,624 |
| European Wax Center, Inc., Class A * | 21,600 | 688,608 |
| Everi Holdings, Inc. * | 185,024 | 4,440,576 |
| F45 Training Holdings, Inc. *(a) | 44,583 | 612,125 |
| Fiesta Restaurant Group, Inc. * | 38,818 | 409,142 |
| Full House Resorts, Inc. * | 69,397 | 690,500 |
| GAN Ltd. * | 87,042 | 1,242,960 |
| Golden Entertainment, Inc. * | 37,225 | 1,934,583 |
| Golden Nugget Online Gaming, Inc. * | 85,938 | 1,449,774 |
| Graham Holdings Co., Class B | 8,373 | 4,905,322 |
| Hall of Fame Resort & Entertainment Co. *(a) | 116,585 | 268,146 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Hilton Grand Vacations, Inc. * | 184,790 | 9,291,241 |
| Houghton Mifflin Harcourt Co. * | 275,517 | 3,909,586 |
| International Game Technology plc * | 215,670 | 6,360,108 |
| Jack in the Box, Inc. | 47,160 | 4,666,482 |
| Krispy Kreme, Inc. (a) | 47,599 | 606,887 |
| Kura Sushi USA, Inc., Class A * | 8,368 | 356,309 |
| Laureate Education, Inc., Class A * | 213,827 | 3,703,484 |
| Lindblad Expeditions Holdings, Inc. * | 66,779 | 998,346 |
| Monarch Casino & Resort, Inc. * | 28,064 | 2,026,782 |
| Nathan's Famous, Inc. | 6,312 | 394,500 |
| NEOGAMES S.A. * | 11,830 | 439,485 |
| Noodles & Co. * | 88,778 | 1,078,653 |
| OneSpaWorld Holdings Ltd. * | 115,012 | 1,242,130 |
| Papa John's International, Inc. | 71,465 | 8,867,377 |
| Perdoceo Education Corp. * | 151,643 | 1,610,449 |
| PlayAGS, Inc. * | 60,009 | 529,279 |
| PowerSchool Holdings, Inc., Class A * | 93,496 | 2,160,693 |
| RCI Hospitality Holdings, Inc. | 18,204 | 1,234,231 |
| Red Robin Gourmet Burgers, Inc. * | 33,207 | 659,823 |
| Red Rock Resorts, Inc., Class A * | 132,835 | 7,227,552 |
| Regis Corp. * | 51,564 | 139,223 |
| Rush Street Interactive, Inc. * | 116,051 | 2,336,107 |
| Ruth's Hospitality Group, Inc. * | 72,767 | 1,407,314 |
| Scientific Games Corp., Class A * | 207,734 | 16,629,107 |
| SeaWorld Entertainment, Inc. * | 111,074 | 7,053,199 |
| Shake Shack, Inc., Class A * | 80,738 | 5,584,647 |
| StoneMor, Inc. * | 68,246 | 176,757 |
| Strategic Education, Inc. | 52,460 | 3,578,297 |
| Stride, Inc. * | 86,942 | 3,086,441 |
| Target Hospitality Corp. * | 52,913 | 219,060 |
| Texas Roadhouse, Inc. | 151,155 | 13,424,076 |
| The Cheesecake Factory, Inc. * | 99,806 | 4,056,116 |
| The ONE Group Hospitality, Inc. * | 44,542 | 588,845 |
| Vivint Smart Home, Inc. * | 199,971 | 1,813,737 |
| Wingstop, Inc. | 64,419 | 11,110,345 |
| WW International, Inc. * | 113,990 | 1,978,866 |
| Xponential Fitness, Inc., Class A * | 21,050 | 355,745 |
| 199,009,478 | ||
| Diversified Financials 4.0% | ||
| AFC Gamma, Inc. | 18,881 | 442,948 |
| Alerus Financial Corp. | 32,717 | 1,027,314 |
| A-Mark Precious Metals, Inc. | 18,843 | 1,413,037 |
| Angel Oak Mortgage, Inc. (a) | 16,299 | 289,144 |
| Apollo Commercial Real Estate Finance, Inc. | 303,235 | 4,590,978 |
| Arbor Realty Trust, Inc. | 293,304 | 5,898,343 |
| Ares Commercial Real Estate Corp. | 95,190 | 1,486,868 |
| ARMOUR Residential REIT, Inc. | 177,533 | 1,867,647 |
| Artisan Partners Asset Management, Inc., Class A | 126,482 | 6,265,918 |
| Assetmark Financial Holdings, Inc. * | 39,243 | 1,006,191 |
| Associated Capital Group, Inc., Class A | 3,528 | 128,243 |
| Atlanticus Holdings Corp. * | 11,710 | 907,408 |
| B. Riley Financial, Inc. | 43,591 | 3,123,731 |
| Banco Latinoamericano de Comercio Exterior, S.A., Class E | 67,446 | 1,223,470 |
| BGC Partners, Inc., Class A | 718,650 | 3,859,150 |
| Blackstone Mortgage Trust, Inc., Class A | 318,853 | 10,490,264 |
| Blucora, Inc. * | 104,895 | 1,732,865 |
| Brightsphere Investment Group, Inc. | 125,732 | 3,769,445 |
| BrightSpire Capital, Inc. | 182,501 | 1,790,335 |
| Broadmark Realty Capital, Inc. | 278,437 | 2,873,470 |
| Cannae Holdings, Inc. * | 183,349 | 6,252,201 |
| Chimera Investment Corp. | 508,846 | 7,943,086 |
| Cohen & Steers, Inc. | 53,630 | 5,088,951 |
| Cowen, Inc., Class A | 60,306 | 2,275,345 |
61
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Curo Group Holdings Corp. | 46,089 | 791,809 |
| Diamond Hill Investment Group, Inc. | 6,628 | 1,437,348 |
| Donnelley Financial Solutions, Inc. * | 63,698 | 2,440,907 |
| Dynex Capital, Inc. | 73,987 | 1,294,772 |
| Ellington Financial, Inc. | 100,973 | 1,835,689 |
| Encore Capital Group, Inc. * | 65,447 | 3,535,447 |
| Enova International, Inc. * | 78,088 | 2,533,175 |
| EZCORP, Inc., Class A * | 105,205 | 784,829 |
| Federated Hermes, Inc. | 204,118 | 6,799,171 |
| FirstCash, Inc. | 85,660 | 7,578,340 |
| Focus Financial Partners, Inc., Class A * | 128,833 | 8,098,442 |
| Franklin BSP Realty Trust, Inc. * | 67,023 | 1,099,847 |
| GAMCO Investors, Inc., Class A | 10,971 | 290,183 |
| GCM Grosvenor, Inc., Class A | 91,802 | 1,051,133 |
| Granite Point Mortgage Trust, Inc. | 118,293 | 1,585,126 |
| Great Ajax Corp. | 47,614 | 674,214 |
| Green Dot Corp., Class A * | 115,415 | 4,888,979 |
| Greenhill & Co., Inc. | 30,062 | 472,575 |
| Hamilton Lane, Inc., Class A | 73,352 | 7,666,018 |
| Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 165,692 | 10,007,797 |
| Houlihan Lokey, Inc. | 110,206 | 12,351,888 |
| Invesco Mortgage Capital, Inc. | 630,347 | 1,979,290 |
| KKR Real Estate Finance Trust, Inc. | 69,939 | 1,518,376 |
| Ladder Capital Corp. REIT | 244,825 | 2,937,900 |
| LendingClub Corp. * | 210,942 | 9,694,894 |
| LendingTree, Inc. * | 25,001 | 4,034,911 |
| Marlin Business Services Corp. | 17,948 | 411,368 |
| MFA Financial, Inc. | 953,362 | 4,299,663 |
| Moelis & Co., Class A | 132,204 | 9,616,519 |
| Navient Corp. | 355,071 | 6,994,899 |
| Nelnet, Inc., Class A | 36,720 | 3,034,174 |
| New York Mortgage Trust, Inc. | 815,589 | 3,580,436 |
| Open Lending Corp., Class A * | 224,785 | 7,085,223 |
| Oportun Financial Corp. * | 45,261 | 1,051,413 |
| Oppenheimer Holdings, Inc., Class A | 20,182 | 1,050,473 |
| Orchid Island Capital, Inc. (a) | 268,595 | 1,332,231 |
| PennyMac Mortgage Investment Trust | 211,984 | 4,271,478 |
| Piper Sandler Cos. | 37,743 | 6,215,895 |
| PJT Partners, Inc., Class A | 52,026 | 4,255,207 |
| PRA Group, Inc. * | 98,254 | 4,213,132 |
| PROG Holdings, Inc. | 143,454 | 5,802,714 |
| Pzena Investment Management, Inc., Class A | 35,451 | 385,707 |
| Ready Capital Corp. | 125,481 | 1,941,191 |
| Redwood Trust, Inc. | 243,114 | 3,296,626 |
| Regional Management Corp. | 16,978 | 867,236 |
| Sculptor Capital Management, Inc. | 47,059 | 1,247,063 |
| StepStone Group, Inc., Class A | 87,502 | 4,110,844 |
| StoneX Group, Inc. * | 36,172 | 2,499,847 |
| TPG RE Finance Trust, Inc. | 129,481 | 1,692,317 |
| Two Harbors Investment Corp. | 675,976 | 4,339,766 |
| Value Line, Inc. | 2,468 | 85,023 |
| Virtus Investment Partners, Inc. | 15,748 | 5,039,360 |
| WisdomTree Investments, Inc. | 287,894 | 1,839,643 |
| World Acceptance Corp. * | 9,437 | 1,749,525 |
| 265,438,385 | ||
| Energy 4.7% | ||
| Aemetis, Inc. *(a) | 58,853 | 1,171,175 |
| Alto Ingredients, Inc. * | 156,298 | 831,505 |
| Altus Midstream Co., Class A | 6,914 | 427,423 |
| Antero Resources Corp. * | 618,251 | 12,284,647 |
| Arch Resources, Inc. * | 32,585 | 2,967,842 |
| Archrock, Inc. | 290,547 | 2,379,580 |
| Aspen Aerogels, Inc. * | 47,566 | 2,590,444 |
| Berry Corp. | 144,533 | 1,388,962 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Brigham Minerals, Inc., Class A | 94,771 | 2,196,792 |
| Bristow Group, Inc. * | 51,084 | 1,767,506 |
| Cactus, Inc., Class A | 118,098 | 5,137,263 |
| California Resources Corp. * | 178,193 | 8,220,043 |
| Callon Petroleum Co. * | 86,347 | 4,466,730 |
| Centennial Resource Development, Inc., Class A * | 390,972 | 2,814,998 |
| Centrus Energy Corp., Class A * | 20,884 | 1,183,496 |
| ChampionX Corp. * | 438,347 | 11,497,842 |
| Chesapeake Energy Corp. | 213,179 | 13,588,029 |
| Civitas Resources, Inc. | 66,527 | 3,734,826 |
| Clean Energy Fuels Corp. * | 336,618 | 3,103,618 |
| CNX Resources Corp. * | 466,725 | 6,818,852 |
| Comstock Resources, Inc. * | 198,742 | 1,961,584 |
| CONSOL Energy, Inc. * | 74,031 | 2,036,593 |
| Contango Oil & Gas Co. * | 318,228 | 1,314,282 |
| CVR Energy, Inc. | 64,281 | 1,232,267 |
| Delek US Holdings, Inc. * | 141,820 | 2,758,399 |
| Denbury, Inc. * | 109,096 | 9,236,067 |
| DHT Holdings, Inc. | 307,407 | 2,001,220 |
| DMC Global, Inc. * | 39,774 | 1,661,758 |
| Dorian LPG Ltd. | 67,957 | 823,639 |
| Dril-Quip, Inc. * | 75,142 | 1,770,346 |
| Earthstone Energy, Inc., Class A * | 50,385 | 511,408 |
| Energy Fuels, Inc. * | 317,207 | 2,486,903 |
| Equitrans Midstream Corp. | 883,628 | 9,110,205 |
| Expro Group Holdings N.V. * | 60,749 | 1,041,845 |
| Extraction Oil & Gas, Inc. * | 33,719 | 2,246,697 |
| Falcon Minerals Corp. | 84,378 | 496,143 |
| Frontline Ltd. *(a) | 258,433 | 2,276,795 |
| FTS International, Inc., Class A * | 18,844 | 499,366 |
| Gevo, Inc. * | 420,843 | 3,042,695 |
| Golar LNG Ltd. * | 221,649 | 2,888,086 |
| Green Plains, Inc. * | 103,140 | 3,914,163 |
| Helix Energy Solutions Group, Inc. * | 309,421 | 1,169,611 |
| Helmerich & Payne, Inc. | 227,892 | 7,073,768 |
| HighPeak Energy, Inc. (a) | 10,561 | 149,227 |
| International Seaways, Inc. | 99,124 | 1,739,626 |
| Kosmos Energy Ltd. * | 874,766 | 3,149,158 |
| Laredo Petroleum, Inc. * | 27,070 | 2,041,078 |
| Liberty Oilfield Services, Inc., Class A * | 195,729 | 2,528,819 |
| Magnolia Oil & Gas Corp., Class A | 300,264 | 6,269,512 |
| Matador Resources Co. | 239,317 | 10,015,416 |
| Murphy Oil Corp. | 317,077 | 8,824,253 |
| Nabors Industries Ltd. * | 15,229 | 1,560,972 |
| National Energy Services Reunited Corp. * | 82,598 | 966,397 |
| Newpark Resources, Inc. * | 197,138 | 670,269 |
| NexTier Oilfield Solutions, Inc. * | 375,965 | 1,676,804 |
| Nordic American Tankers Ltd. | 328,477 | 771,921 |
| Northern Oil and Gas, Inc. | 112,740 | 2,611,058 |
| Oasis Petroleum, Inc. | 43,585 | 5,256,351 |
| Oceaneering International, Inc. * | 214,698 | 2,919,893 |
| Oil States International, Inc. * | 132,113 | 800,605 |
| Ovintiv, Inc. | 566,231 | 21,244,987 |
| Par Pacific Holdings, Inc. * | 96,867 | 1,497,564 |
| Patterson-UTI Energy, Inc. | 402,414 | 3,444,664 |
| PBF Energy, Inc., Class A * | 207,846 | 3,036,630 |
| PDC Energy, Inc. | 214,812 | 11,236,816 |
| Peabody Energy Corp. * | 173,127 | 2,058,480 |
| ProPetro Holding Corp. * | 183,874 | 1,763,352 |
| Range Resources Corp. * | 516,604 | 12,047,205 |
| Ranger Oil Corp., Class A * | 32,941 | 1,088,371 |
| Renewable Energy Group, Inc. * | 96,662 | 6,186,368 |
| REX American Resources Corp. * | 11,631 | 1,022,946 |
| Riley Exploration Permian, Inc. | 4,853 | 128,750 |
| RPC, Inc. * | 143,159 | 771,627 |
| Scorpio Tankers, Inc. | 105,780 | 1,694,596 |
62
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Select Energy Services, Inc., Class A * | 135,576 | 814,812 |
| SFL Corp., Ltd. | 225,743 | 1,785,627 |
| SM Energy Co. | 259,311 | 8,899,554 |
| Solaris Oilfield Infrastructure, Inc., Class A | 66,238 | 502,746 |
| Southwestern Energy Co. * | 1,460,476 | 7,127,123 |
| Talos Energy, Inc. * | 78,524 | 1,018,456 |
| Teekay Corp. * | 147,266 | 521,322 |
| Teekay Tankers Ltd., Class A * | 50,574 | 701,967 |
| Tellurian, Inc. * | 774,034 | 3,034,213 |
| TETRA Technologies, Inc. * | 267,118 | 862,791 |
| Tidewater, Inc. * | 88,326 | 1,071,394 |
| Uranium Energy Corp. * | 498,855 | 1,855,741 |
| Ur-Energy, Inc. * | 383,722 | 667,676 |
| US Silica Holdings, Inc. * | 158,418 | 1,533,486 |
| Vine Energy, Inc., Class A * | 54,462 | 929,666 |
| W&T Offshore, Inc. * | 205,002 | 842,558 |
| Whiting Petroleum Corp. * | 84,979 | 5,534,682 |
| World Fuel Services Corp. | 134,798 | 4,115,383 |
| 311,118,325 | ||
| Food & Staples Retailing 0.9% | ||
| BJ's Wholesale Club Holdings, Inc. * | 295,928 | 17,294,032 |
| HF Foods Group, Inc. * | 77,262 | 545,470 |
| Ingles Markets, Inc., Class A | 30,455 | 2,107,182 |
| MedAvail Holdings, Inc. * | 24,837 | 63,086 |
| Natural Grocers by Vitamin Cottage, Inc. | 19,294 | 235,001 |
| Performance Food Group Co. * | 327,659 | 14,820,017 |
| PriceSmart, Inc. | 50,360 | 3,623,402 |
| Rite Aid Corp. * | 119,682 | 1,626,478 |
| SpartanNash, Co. | 77,282 | 1,788,306 |
| Sprouts Farmers Market, Inc. * | 248,127 | 5,493,532 |
| The Andersons, Inc. | 68,172 | 2,321,938 |
| The Chefs' Warehouse, Inc. * | 68,066 | 2,373,461 |
| United Natural Foods, Inc. * | 120,560 | 5,231,098 |
| Village Super Market, Inc., Class A | 18,142 | 404,022 |
| Weis Markets, Inc. | 35,638 | 2,006,776 |
| 59,933,801 | ||
| Food, Beverage & Tobacco 1.5% | ||
| 22nd Century Group, Inc. * | 351,473 | 963,036 |
| AppHarvest, Inc. *(a) | 152,805 | 919,886 |
| B&G Foods, Inc. (a) | 137,706 | 4,054,065 |
| Calavo Growers, Inc. | 36,980 | 1,486,596 |
| Cal-Maine Foods, Inc. | 77,176 | 2,782,967 |
| Celsius Holdings, Inc. * | 116,509 | 11,245,449 |
| Coca-Cola Consolidated, Inc. | 10,110 | 4,058,154 |
| Fresh Del Monte Produce, Inc. | 72,391 | 2,424,375 |
| Hostess Brands, Inc. * | 283,029 | 5,352,078 |
| J&J Snack Foods Corp. | 31,793 | 4,691,057 |
| John B. Sanfilippo & Son, Inc. | 19,156 | 1,618,682 |
| Laird Superfood, Inc. *(a) | 13,138 | 229,389 |
| Lancaster Colony Corp. | 41,041 | 6,976,970 |
| Landec Corp. * | 57,264 | 556,606 |
| Limoneira Co. | 34,097 | 549,985 |
| MGP Ingredients, Inc. | 30,302 | 1,945,691 |
| Mission Produce, Inc. * | 80,315 | 1,525,182 |
| National Beverage Corp. | 50,670 | 2,857,788 |
| NewAge, Inc. * | 282,333 | 417,853 |
| Primo Water Corp. | 338,650 | 5,384,535 |
| Sanderson Farms, Inc. | 43,930 | 8,322,539 |
| Seneca Foods Corp., Class A * | 13,492 | 696,592 |
| Tattooed Chef, Inc. *(a) | 102,486 | 1,841,673 |
| The Duckhorn Portfolio, Inc. * | 42,794 | 827,636 |
| The Simply Good Foods Co. * | 183,577 | 7,278,828 |
| Tootsie Roll Industries, Inc. | 33,880 | 1,072,302 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| TreeHouse Foods, Inc. * | 111,752 | 4,038,717 |
| Turning Point Brands, Inc. | 31,578 | 1,205,332 |
| Universal Corp. | 52,339 | 2,459,933 |
| Utz Brands, Inc. | 122,178 | 1,904,755 |
| Vector Group Ltd. | 310,834 | 4,121,659 |
| Vital Farms, Inc. * | 52,017 | 854,119 |
| Whole Earth Brands, Inc. * | 78,920 | 957,300 |
| Zevia PBC, Class A * | 23,065 | 258,097 |
| 95,879,826 | ||
| Health Care Equipment & Services 7.7% | ||
| 1Life Healthcare, Inc. * | 252,321 | 5,465,273 |
| Accelerate Diagnostics, Inc. *(a) | 71,070 | 419,313 |
| Accolade, Inc. * | 108,959 | 4,335,479 |
| Accuray, Inc. * | 199,781 | 996,907 |
| Acutus Medical, Inc. * | 39,813 | 312,134 |
| AdaptHealth Corp. * | 154,105 | 4,199,361 |
| Addus HomeCare Corp. * | 33,279 | 3,111,586 |
| Agiliti, Inc. * | 50,751 | 1,144,435 |
| Alignment Healthcare, Inc. * | 57,306 | 1,138,097 |
| Allscripts Healthcare Solutions, Inc. * | 267,637 | 3,688,038 |
| Alphatec Holdings, Inc. * | 153,158 | 1,796,543 |
| American Well Corp., Class A * | 394,149 | 3,547,341 |
| AMN Healthcare Services, Inc. * | 101,884 | 10,055,951 |
| AngioDynamics, Inc. * | 80,205 | 2,293,863 |
| Apollo Medical Holdings, Inc. * | 81,530 | 5,595,404 |
| Apria, Inc. * | 32,674 | 1,222,988 |
| Apyx Medical Corp. * | 68,287 | 976,504 |
| Asensus Surgical, Inc. * | 511,054 | 863,681 |
| Aspira Women's Health, Inc. *(a) | 159,741 | 535,132 |
| AtriCure, Inc. * | 96,640 | 7,253,798 |
| Atrion Corp. | 3,022 | 2,200,016 |
| Avanos Medical, Inc. * | 103,650 | 3,269,121 |
| Aveanna Healthcare Holdings, Inc. * | 84,562 | 652,819 |
| AxoGen, Inc. * | 82,727 | 1,256,623 |
| Axonics, Inc. * | 98,822 | 7,248,594 |
| Biodesix, Inc. * | 26,044 | 196,372 |
| BioLife Solutions, Inc. * | 52,952 | 2,814,399 |
| Bioventus, Inc., Class A * | 35,459 | 535,431 |
| Brookdale Senior Living, Inc. * | 399,753 | 2,598,394 |
| Butterfly Network, Inc. *(a) | 394,018 | 4,066,266 |
| Cardiovascular Systems, Inc. * | 85,025 | 2,982,677 |
| Castle Biosciences, Inc. * | 45,903 | 2,862,052 |
| Castlight Health, Inc., Class B * | 272,252 | 490,054 |
| Cerus Corp. * | 364,597 | 2,406,340 |
| ClearPoint Neuro, Inc. * | 41,049 | 686,750 |
| Community Health Systems, Inc. * | 267,689 | 3,506,726 |
| Computer Programs & Systems, Inc. * | 30,696 | 1,108,126 |
| CONMED Corp. | 62,780 | 9,183,458 |
| Convey Holding Parent, Inc. * | 30,663 | 226,906 |
| CorVel Corp. * | 19,000 | 3,481,180 |
| Covetrus, Inc. * | 224,047 | 4,523,509 |
| Cross Country Healthcare, Inc. * | 78,241 | 1,621,936 |
| CryoLife, Inc. * | 81,192 | 1,675,803 |
| CryoPort, Inc. * | 87,647 | 7,146,736 |
| Cutera, Inc. * | 38,028 | 1,635,204 |
| CVRx, Inc. * | 18,391 | 310,992 |
| CytoSorbents Corp. * | 86,884 | 511,747 |
| DarioHealth Corp. * | 28,587 | 467,397 |
| Eargo, Inc. *(a) | 41,807 | 367,902 |
| Evolent Health, Inc., Class A * | 167,556 | 4,904,364 |
| Forian, Inc. *(a) | 41,374 | 419,532 |
| Fulgent Genetics, Inc. * | 44,489 | 3,689,028 |
| Glaukos Corp. * | 97,268 | 4,446,120 |
| Haemonetics Corp. * | 108,726 | 7,470,563 |
| Hanger, Inc. * | 79,972 | 1,493,877 |
| Health Catalyst, Inc. * | 108,535 | 5,713,282 |
63
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| HealthEquity, Inc. * | 176,717 | 11,695,131 |
| HealthStream, Inc. * | 55,020 | 1,464,082 |
| Heska Corp. * | 21,147 | 4,726,989 |
| ICAD, Inc. * | 46,436 | 489,900 |
| Inari Medical, Inc. * | 73,333 | 6,638,103 |
| InfuSystem Holdings, Inc. * | 39,278 | 653,193 |
| Innovage Holding Corp. * | 38,854 | 257,213 |
| Inogen, Inc. * | 42,419 | 1,681,913 |
| Inovalon Holdings, Inc., Class A * | 162,861 | 6,643,100 |
| Inspire Medical Systems, Inc. * | 58,111 | 15,665,563 |
| Integer Holdings Corp. * | 70,852 | 6,378,097 |
| Intersect ENT, Inc. * | 72,349 | 1,951,253 |
| Invacare Corp. * | 69,958 | 345,593 |
| iRadimed Corp. * | 13,585 | 506,992 |
| iRhythm Technologies, Inc. * | 63,845 | 4,478,088 |
| Lantheus Holdings, Inc. * | 144,943 | 3,390,217 |
| LeMaitre Vascular, Inc. | 40,670 | 2,115,247 |
| LHC Group, Inc. * | 65,820 | 8,858,714 |
| LifeStance Health Group, Inc. * | 98,700 | 1,182,426 |
| LivaNova plc * | 115,216 | 8,839,372 |
| Magellan Health, Inc. * | 51,341 | 4,868,667 |
| MEDNAX, Inc. * | 164,685 | 4,484,373 |
| Meridian Bioscience, Inc. * | 92,798 | 1,745,530 |
| Merit Medical Systems, Inc. * | 111,007 | 7,466,331 |
| Mesa Laboratories, Inc. | 10,688 | 3,267,322 |
| Misonix, Inc. *(b) | 26,613 | 702,365 |
| ModivCare, Inc. * | 26,876 | 4,374,607 |
| Multiplan Corp. * | 490,332 | 2,113,331 |
| NantHealth, Inc. * | 58,065 | 91,162 |
| National HealthCare Corp. | 27,236 | 1,904,886 |
| National Research Corp. | 30,418 | 1,317,099 |
| Natus Medical, Inc. * | 72,745 | 1,822,262 |
| Neogen Corp. * | 232,658 | 9,843,760 |
| Neuronetics, Inc. * | 52,959 | 275,387 |
| NeuroPace, Inc. *(a) | 14,764 | 223,822 |
| Nevro Corp. * | 74,547 | 8,478,976 |
| NextGen Healthcare, Inc. * | 120,183 | 1,978,212 |
| NuVasive, Inc. * | 111,717 | 5,961,219 |
| Omnicell, Inc. * | 92,842 | 16,539,802 |
| Ontrak, Inc. * | 19,112 | 164,363 |
| OptimizeRx Corp. * | 37,242 | 3,601,301 |
| Option Care Health, Inc. * | 322,690 | 8,819,118 |
| OraSure Technologies, Inc. * | 154,902 | 1,652,804 |
| Ortho Clinical Diagnostics Holdings plc * | 238,589 | 4,716,905 |
| Orthofix Medical, Inc. * | 41,062 | 1,477,411 |
| OrthoPediatrics Corp. * | 30,074 | 2,140,367 |
| Outset Medical, Inc. * | 98,979 | 5,272,611 |
| Owens & Minor, Inc. | 156,720 | 5,623,114 |
| Patterson Cos., Inc. | 185,061 | 5,785,007 |
| PAVmed, Inc. * | 155,922 | 846,656 |
| PetIQ, Inc. * | 58,231 | 1,458,687 |
| Phreesia, Inc. * | 105,413 | 7,435,833 |
| Privia Health Group, Inc. * | 43,611 | 1,120,803 |
| Progyny, Inc. * | 135,972 | 8,352,760 |
| Pulmonx Corp. * | 56,245 | 2,189,618 |
| Pulse Biosciences, Inc. *(a) | 30,780 | 649,150 |
| Quotient Ltd. * | 166,354 | 420,876 |
| R1 RCM, Inc. * | 256,353 | 5,562,860 |
| RadNet, Inc. * | 97,649 | 3,035,907 |
| Retractable Technologies, Inc. *(a) | 36,762 | 347,769 |
| RxSight, Inc. *(a) | 16,841 | 201,755 |
| Schrodinger, Inc. * | 98,080 | 5,353,206 |
| SeaSpine Holdings Corp. * | 69,118 | 1,034,005 |
| Select Medical Holdings Corp. | 238,101 | 7,909,715 |
| Senseonics Holdings, Inc. * | 929,109 | 3,251,881 |
| Sharps Compliance Corp. * | 30,750 | 253,688 |
| Shockwave Medical, Inc. * | 72,874 | 15,573,174 |
| SI-BONE, Inc. * | 70,543 | 1,590,745 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Sientra, Inc. * | 125,206 | 733,707 |
| Sight Sciences, Inc. *(a) | 24,333 | 656,261 |
| Silk Road Medical, Inc. * | 73,484 | 4,314,246 |
| Simulations Plus, Inc. | 33,117 | 1,672,409 |
| SOC Telemed, Inc. *(a) | 125,275 | 275,605 |
| Soliton, Inc. * | 25,441 | 523,830 |
| STAAR Surgical Co. * | 102,654 | 12,160,393 |
| Stereotaxis, Inc. * | 108,594 | 640,705 |
| Surgery Partners, Inc. * | 68,441 | 2,815,663 |
| Surmodics, Inc. * | 29,272 | 1,629,280 |
| Tabula Rasa HealthCare, Inc. * | 48,116 | 1,306,349 |
| Tactile Systems Technology, Inc. * | 41,752 | 1,440,026 |
| Talis Biomedical Corp. *(a) | 31,324 | 167,583 |
| Tenet Healthcare Corp. * | 229,040 | 16,413,006 |
| The Ensign Group, Inc. | 113,692 | 8,869,113 |
| The Joint Corp. * | 29,714 | 2,599,381 |
| The Pennant Group, Inc. * | 54,749 | 1,399,932 |
| Tivity Health, Inc. * | 95,052 | 2,378,201 |
| TransMedics Group, Inc. * | 56,524 | 1,550,453 |
| Treace Medical Concepts, Inc. * | 24,329 | 561,027 |
| Triple-S Management Corp., Class B * | 49,438 | 1,744,667 |
| U.S. Physical Therapy, Inc. | 27,533 | 2,969,709 |
| Utah Medical Products, Inc. | 7,425 | 718,963 |
| Vapotherm, Inc. * | 48,481 | 1,108,760 |
| Varex Imaging Corp. * | 83,010 | 2,228,818 |
| Viemed Healthcare, Inc. * | 78,035 | 447,141 |
| ViewRay, Inc. * | 298,767 | 2,183,987 |
| Vocera Communications, Inc. * | 74,163 | 4,196,143 |
| Zynex, Inc. *(a) | 42,194 | 528,691 |
| 506,618,561 | ||
| Household & Personal Products 0.8% | ||
| BellRing Brands, Inc., Class A * | 86,136 | 2,310,168 |
| Central Garden & Pet Co. * | 21,503 | 1,109,125 |
| Central Garden & Pet Co., Class A * | 87,234 | 4,030,211 |
| Edgewell Personal Care Co. | 117,481 | 4,110,660 |
| elf Beauty, Inc. * | 104,217 | 3,367,251 |
| Energizer Holdings, Inc. | 147,289 | 5,371,630 |
| Inter Parfums, Inc. | 38,508 | 3,557,369 |
| Medifast, Inc. | 25,115 | 4,929,321 |
| Nature's Sunshine Products, Inc. | 25,169 | 397,419 |
| Nu Skin Enterprises, Inc., Class A | 107,528 | 4,317,249 |
| Oil-Dri Corp. of America | 11,364 | 395,695 |
| Revlon, Inc., Class A *(a) | 14,442 | 149,619 |
| The Beauty Health Co. * | 188,141 | 5,168,233 |
| The Honest Co., Inc. * | 54,480 | 498,492 |
| USANA Health Sciences, Inc. * | 26,885 | 2,609,458 |
| Veru, Inc. * | 138,267 | 1,129,641 |
| WD-40 Co. | 29,475 | 6,690,825 |
| 50,142,366 | ||
| Insurance 1.9% | ||
| Ambac Financial Group, Inc. * | 98,432 | 1,664,485 |
| American Equity Investment Life Holding Co. | 179,038 | 5,705,941 |
| American National Group, Inc. | 16,053 | 3,045,415 |
| AMERISAFE, Inc. | 41,522 | 2,461,839 |
| Argo Group International Holdings Ltd. | 68,138 | 3,754,404 |
| Bright Health Group, Inc. *(a) | 113,000 | 988,750 |
| BRP Group, Inc., Class A * | 100,626 | 3,672,849 |
| Citizens, Inc. * | 109,091 | 702,546 |
| CNO Financial Group, Inc. | 276,011 | 6,662,906 |
| Crawford & Co., Class A | 34,321 | 296,533 |
| Donegal Group, Inc., Class A | 30,976 | 441,408 |
| eHealth, Inc. * | 52,735 | 2,338,797 |
| Employers Holdings, Inc. | 61,601 | 2,377,799 |
64
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Enstar Group Ltd. * | 26,790 | 6,182,596 |
| Genworth Financial, Inc., Class A * | 1,095,575 | 4,502,813 |
| Goosehead Insurance, Inc., Class A | 38,201 | 5,512,404 |
| Greenlight Capital Re Ltd., Class A * | 57,682 | 428,577 |
| HCI Group, Inc. | 12,316 | 1,650,467 |
| Heritage Insurance Holdings, Inc. | 55,133 | 360,570 |
| Horace Mann Educators Corp. | 90,470 | 3,544,615 |
| Independence Holding Co. | 9,097 | 446,208 |
| Investors Title Co. | 2,770 | 536,826 |
| James River Group Holdings Ltd. | 78,606 | 2,511,462 |
| Kinsale Capital Group, Inc. | 46,390 | 8,681,889 |
| Maiden Holdings Ltd. * | 147,564 | 481,059 |
| MBIA, Inc. * | 104,044 | 1,616,844 |
| MetroMile, Inc. * | 85,506 | 262,503 |
| National Western Life Group, Inc., Class A | 5,591 | 1,202,121 |
| NI Holdings, Inc. * | 19,098 | 379,668 |
| Palomar Holdings, Inc. * | 53,167 | 4,862,122 |
| ProAssurance Corp. | 116,049 | 2,658,683 |
| RLI Corp. | 86,067 | 9,321,917 |
| Safety Insurance Group, Inc. | 31,218 | 2,447,803 |
| Selective Insurance Group, Inc. | 128,177 | 10,045,231 |
| Selectquote, Inc. * | 290,491 | 3,860,625 |
| SiriusPoint Ltd. * | 190,888 | 1,794,347 |
| State Auto Financial Corp. | 38,200 | 1,960,042 |
| Stewart Information Services Corp. | 57,739 | 4,109,285 |
| Tiptree, Inc. | 50,442 | 787,400 |
| Trean Insurance Group, Inc. * | 37,421 | 351,757 |
| Trupanion, Inc. * | 82,327 | 8,430,285 |
| United Fire Group, Inc. | 45,852 | 936,756 |
| United Insurance Holdings Corp. | 46,934 | 179,288 |
| Universal Insurance Holdings, Inc. | 58,932 | 870,426 |
| 125,030,261 | ||
| Materials 3.8% | ||
| AdvanSix, Inc. * | 58,913 | 2,863,172 |
| Allegheny Technologies, Inc. * | 275,708 | 4,438,899 |
| American Vanguard Corp. | 62,507 | 973,859 |
| Amyris, Inc. * | 368,125 | 5,455,612 |
| Arconic Corp. * | 238,050 | 7,003,431 |
| Avient Corp. | 196,516 | 10,588,282 |
| Balchem Corp. | 69,541 | 10,646,032 |
| Cabot Corp. | 121,076 | 6,459,405 |
| Carpenter Technology Corp. | 102,469 | 3,164,243 |
| Century Aluminum Co. * | 111,236 | 1,469,428 |
| Chase Corp. | 16,062 | 1,541,952 |
| Clearwater Paper Corp. * | 35,795 | 1,497,305 |
| Coeur Mining, Inc. * | 552,630 | 3,498,148 |
| Commercial Metals Co. | 259,740 | 8,358,433 |
| Compass Minerals International, Inc. | 73,687 | 4,833,867 |
| Constellium SE * | 264,477 | 4,869,022 |
| Danimer Scientific, Inc. * | 144,191 | 2,128,259 |
| Domtar Corp. * | 108,066 | 5,899,323 |
| Ecovyst, Inc. | 111,008 | 1,296,573 |
| Ferro Corp. * | 177,918 | 3,739,836 |
| Ferroglobe Representation and Warranty Insurance Trust *(b) | 108,500 | 0 |
| Forterra, Inc. * | 62,616 | 1,491,513 |
| FutureFuel Corp. | 57,419 | 405,378 |
| Gatos Silver, Inc. * | 100,841 | 1,220,176 |
| GCP Applied Technologies, Inc. * | 106,392 | 2,405,523 |
| Glatfelter Corp. | 94,903 | 1,559,256 |
| Greif, Inc., Class A | 55,535 | 3,592,004 |
| Greif, Inc., Class B | 12,900 | 841,854 |
| H.B. Fuller Co. | 112,474 | 7,930,542 |
| Hawkins, Inc. | 41,762 | 1,531,413 |
| Haynes International, Inc. | 27,215 | 1,092,138 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Hecla Mining Co. | 1,146,240 | 6,625,267 |
| Ingevity Corp. * | 85,675 | 6,674,939 |
| Innospec, Inc. | 52,951 | 4,797,890 |
| Intrepid Potash, Inc. * | 21,623 | 1,053,256 |
| Kaiser Aluminum Corp. | 34,281 | 3,330,056 |
| Koppers Holdings, Inc. * | 44,997 | 1,578,945 |
| Kraton Corp. * | 67,695 | 3,090,277 |
| Kronos Worldwide, Inc. | 47,089 | 613,570 |
| Livent Corp. * | 350,406 | 9,888,457 |
| Marrone Bio Innovations, Inc. * | 212,325 | 186,018 |
| Materion Corp. | 44,233 | 3,192,738 |
| Minerals Technologies, Inc. | 72,510 | 5,143,859 |
| MP Materials Corp. * | 157,442 | 5,329,412 |
| Myers Industries, Inc. | 78,057 | 1,606,413 |
| Neenah, Inc. | 36,549 | 1,847,186 |
| Novagold Resources, Inc. * | 514,080 | 3,757,925 |
| O-I Glass, Inc. * | 341,405 | 4,455,335 |
| Olympic Steel, Inc. | 20,485 | 552,480 |
| Orion Engineered Carbons S.A. * | 131,045 | 2,463,646 |
| Pactiv Evergreen, Inc. | 93,356 | 1,298,582 |
| Perpetua Resources Corp. * | 56,806 | 270,397 |
| PolyMet Mining Corp. * | 61,184 | 204,966 |
| PureCycle Technologies, Inc. *(a) | 71,713 | 960,237 |
| Quaker Chemical Corp. | 29,188 | 7,175,578 |
| Ranpak Holdings Corp. * | 80,762 | 2,783,059 |
| Rayonier Advanced Materials, Inc. * | 135,574 | 973,421 |
| Ryerson Holding Corp. | 35,671 | 940,288 |
| Schnitzer Steel Industries, Inc., Class A | 55,881 | 3,006,398 |
| Schweitzer-Mauduit International, Inc. | 67,591 | 2,354,870 |
| Sensient Technologies Corp. | 91,346 | 8,732,678 |
| Stepan Co. | 46,676 | 5,602,053 |
| Summit Materials, Inc., Class A * | 256,389 | 9,140,268 |
| SunCoke Energy, Inc. | 181,090 | 1,307,470 |
| TimkenSteel Corp. * | 98,680 | 1,376,586 |
| Tredegar Corp. | 56,465 | 680,968 |
| TriMas Corp. * | 93,127 | 3,105,785 |
| Trinseo plc | 84,132 | 4,716,440 |
| Tronox Holdings plc, Class A | 247,241 | 5,765,660 |
| UFP Technologies, Inc. * | 14,880 | 920,923 |
| United States Lime & Minerals, Inc. | 4,493 | 554,796 |
| Valhi, Inc. | 5,111 | 118,371 |
| Verso Corp., Class A | 57,647 | 1,272,846 |
| Warrior Met Coal, Inc. | 110,913 | 2,658,585 |
| Worthington Industries, Inc. | 73,036 | 3,967,315 |
| Zymergen, Inc. * | 40,560 | 429,936 |
| 249,301,023 | ||
| Media & Entertainment 2.7% | ||
| Advantage Solutions, Inc. * | 165,268 | 1,411,389 |
| AMC Entertainment Holdings, Inc., Class A * | 1,114,658 | 39,425,453 |
| AMC Networks, Inc., Class A * | 62,701 | 2,494,873 |
| Boston Omaha Corp., Class A * | 37,933 | 1,344,725 |
| Cardlytics, Inc. * | 69,024 | 5,429,428 |
| Cargurus, Inc. * | 204,045 | 6,843,669 |
| Cars.com, Inc. * | 148,389 | 1,932,025 |
| Chicken Soup For The Soul Entertainment, Inc. * | 15,413 | 301,324 |
| Cinemark Holdings, Inc. * | 234,284 | 4,404,539 |
| Clear Channel Outdoor Holdings, Inc. * | 787,383 | 2,283,411 |
| comScore, Inc. * | 154,350 | 603,508 |
| CuriosityStream, Inc. *(a) | 54,785 | 546,206 |
| Daily Journal Corp. * | 2,559 | 878,300 |
| Digital Media Solutions, Inc., Class A *(a) | 6,386 | 38,188 |
| Emerald Holding, Inc. * | 53,276 | 215,768 |
| Entercom Communications Corp. * | 256,680 | 829,076 |
65
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Entravision Communications Corp., Class A | 129,623 | 1,033,095 |
| Eros STX Global Corp. * | 673,559 | 550,634 |
| Eventbrite, Inc., Class A * | 161,793 | 3,274,690 |
| EverQuote, Inc., Class A * | 41,094 | 566,686 |
| Fluent, Inc. * | 88,752 | 211,230 |
| fuboTV, Inc. * | 283,407 | 8,448,363 |
| Gannett Co., Inc. * | 304,998 | 1,768,988 |
| Gray Television, Inc. | 184,934 | 4,334,853 |
| Hemisphere Media Group, Inc. * | 34,931 | 385,988 |
| iHeartMedia, Inc., Class A * | 241,999 | 4,689,941 |
| IMAX Corp. * | 107,615 | 2,028,543 |
| Integral Ad Science Holding Corp. * | 36,000 | 884,520 |
| John Wiley & Sons, Inc., Class A | 93,308 | 5,054,494 |
| Liberty Media Corp. - Liberty Braves, Class A * | 21,816 | 666,915 |
| Liberty Media Corp. - Liberty Braves, Class C * | 78,707 | 2,339,172 |
| Liberty TripAdvisor Holdings, Inc., Class A * | 156,320 | 483,029 |
| Lions Gate Entertainment Corp., Class A * | 125,870 | 1,630,016 |
| Lions Gate Entertainment Corp., Class B * | 254,256 | 2,878,178 |
| LiveOne, Inc. * | 126,087 | 288,739 |
| Loral Space & Communications, Inc. | 27,804 | 1,385,195 |
| Madison Square Garden Entertainment Corp. * | 56,576 | 3,986,911 |
| Magnite, Inc. * | 279,741 | 7,561,399 |
| MediaAlpha, Inc., Class A * | 46,422 | 813,778 |
| Meredith Corp. * | 86,204 | 5,020,521 |
| National CineMedia, Inc. | 133,998 | 426,114 |
| Outbrain, Inc. * | 18,087 | 306,394 |
| QuinStreet, Inc. * | 107,556 | 1,505,784 |
| Scholastic Corp. | 57,126 | 2,067,390 |
| Sinclair Broadcast Group, Inc., Class A | 98,880 | 2,583,734 |
| Stagwell, Inc. * | 131,974 | 1,145,534 |
| TechTarget, Inc. * | 55,173 | 5,203,366 |
| TEGNA, Inc. | 478,029 | 9,398,050 |
| The E.W. Scripps Co., Class A | 123,976 | 2,305,954 |
| The Marcus Corp. * | 48,986 | 909,670 |
| Thryv Holdings, Inc. * | 16,974 | 537,567 |
| TrueCar, Inc. * | 204,336 | 856,168 |
| WideOpenWest, Inc. * | 113,411 | 2,160,480 |
| Yelp, Inc. * | 154,577 | 5,971,310 |
| Ziff Davis, Inc. * | 93,801 | 12,031,854 |
| 176,677,129 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 11.7% | ||
| 4D Molecular Therapeutics, Inc. * | 45,245 | 1,087,237 |
| 89bio, Inc. * | 20,663 | 363,669 |
| 9 Meters Biopharma, Inc. * | 475,380 | 603,733 |
| Absci Corp. *(a) | 28,919 | 424,242 |
| ACADIA Pharmaceuticals, Inc. * | 257,490 | 4,621,945 |
| Aclaris Therapeutics, Inc. * | 109,865 | 1,906,158 |
| Acumen Pharmaceuticals, Inc. * | 19,674 | 276,420 |
| Adagio Therapeutics, Inc. *(a) | 45,333 | 1,325,537 |
| Adicet Bio, Inc. * | 44,333 | 381,264 |
| Adverum Biotechnologies, Inc. * | 184,139 | 417,996 |
| Aeglea BioTherapeutics, Inc. * | 86,254 | 631,379 |
| Aerie Pharmaceuticals, Inc. * | 92,353 | 981,712 |
| Aerovate Therapeutics, Inc. *(a) | 21,073 | 335,693 |
| Affimed N.V. * | 252,371 | 1,716,123 |
| Agenus, Inc. * | 443,889 | 1,704,534 |
| Agios Pharmaceuticals, Inc. * | 127,597 | 5,997,059 |
| Akebia Therapeutics, Inc. * | 379,024 | 1,087,799 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Akero Therapeutics, Inc. * | 56,742 | 1,219,386 |
| Akouos, Inc. * | 50,417 | 469,886 |
| Akoya Biosciences, Inc. * | 16,185 | 214,451 |
| Albireo Pharma, Inc. * | 35,909 | 1,049,261 |
| Aldeyra Therapeutics, Inc. * | 106,184 | 966,274 |
| Alector, Inc. * | 125,782 | 2,734,501 |
| Aligos Therapeutics, Inc. * | 46,578 | 741,988 |
| Alkermes plc * | 346,714 | 10,501,967 |
| Allakos, Inc. * | 75,393 | 7,583,028 |
| Allogene Therapeutics, Inc. * | 147,285 | 2,539,193 |
| Allovir, Inc. * | 64,170 | 1,540,722 |
| Alpha Teknova, Inc. * | 15,570 | 357,954 |
| Alpine Immune Sciences, Inc. *(a) | 24,623 | 311,481 |
| Altimmune, Inc. * | 86,464 | 933,811 |
| ALX Oncology Holdings, Inc. * | 38,350 | 2,149,134 |
| Amicus Therapeutics, Inc. * | 569,682 | 5,981,661 |
| Amneal Pharmaceuticals, Inc. * | 216,817 | 1,190,325 |
| Amphastar Pharmaceuticals, Inc. * | 79,869 | 1,491,953 |
| Ampio Pharmaceuticals, Inc. * | 423,148 | 660,111 |
| AnaptysBio, Inc. * | 42,017 | 1,382,359 |
| Anavex Life Sciences Corp. * | 138,072 | 2,587,469 |
| Angion Biomedica Corp. *(a) | 45,754 | 190,794 |
| ANI Pharmaceuticals, Inc. * | 20,696 | 773,616 |
| Anika Therapeutics, Inc. * | 31,079 | 1,294,440 |
| Annexon, Inc. * | 67,531 | 1,101,431 |
| Antares Pharma, Inc. * | 361,744 | 1,352,923 |
| Apellis Pharmaceuticals, Inc. * | 140,642 | 4,323,335 |
| Applied Molecular Transport, Inc. * | 53,899 | 1,213,805 |
| Applied Therapeutics, Inc. * | 38,968 | 571,661 |
| AquaBounty Technologies, Inc. * | 111,256 | 443,911 |
| Arbutus Biopharma Corp. * | 173,023 | 697,283 |
| Arcturus Therapeutics Holdings, Inc. * | 45,731 | 2,055,608 |
| Arcus Biosciences, Inc. * | 97,642 | 3,265,148 |
| Arcutis Biotherapeutics, Inc. * | 59,868 | 1,268,004 |
| Ardelyx, Inc. * | 183,262 | 221,747 |
| Arena Pharmaceuticals, Inc. * | 132,523 | 7,605,495 |
| Arrowhead Pharmaceuticals, Inc. * | 219,110 | 13,983,600 |
| Arvinas, Inc. * | 94,050 | 8,142,849 |
| Atara Biotherapeutics, Inc. * | 180,131 | 2,788,428 |
| Atea Pharmaceuticals, Inc. * | 139,378 | 1,622,360 |
| Athenex, Inc. * | 180,803 | 459,240 |
| Athersys, Inc. *(a) | 445,971 | 521,786 |
| Athira Pharma, Inc. * | 70,693 | 923,958 |
| Atossa Therapeutics, Inc. * | 253,469 | 651,415 |
| Atreca, Inc., Class A * | 55,074 | 285,283 |
| Avalo Therapeutics, Inc. * | 112,304 | 262,791 |
| Avid Bioservices, Inc. * | 130,234 | 3,995,579 |
| Avidity Biosciences, Inc. * | 81,222 | 1,827,495 |
| Avita Medical, Inc. * | 52,188 | 859,536 |
| Avrobio, Inc. * | 84,117 | 472,738 |
| Axsome Therapeutics, Inc. * | 60,055 | 2,312,117 |
| Beam Therapeutics, Inc. * | 107,717 | 9,562,038 |
| Berkeley Lights, Inc. * | 105,351 | 2,449,411 |
| Beyondspring, Inc. *(a) | 47,373 | 654,695 |
| BioAtla, Inc. * | 33,831 | 988,880 |
| BioCryst Pharmaceuticals, Inc. * | 384,215 | 5,736,330 |
| BioDelivery Sciences International, Inc. * | 203,982 | 832,247 |
| Biohaven Pharmaceutical Holding Co., Ltd. * | 120,347 | 17,127,785 |
| Biomea Fusion, Inc. *(a) | 18,284 | 196,370 |
| BioNano Genomics, Inc. *(a) | 605,748 | 3,077,200 |
| Bioxcel Therapeutics, Inc. * | 37,577 | 1,094,994 |
| Black Diamond Therapeutics, Inc. * | 48,287 | 369,878 |
| Bluebird Bio, Inc. * | 146,831 | 3,437,314 |
| Blueprint Medicines Corp. * | 126,401 | 14,218,848 |
| Bolt Biotherapeutics, Inc. *(a) | 48,208 | 631,043 |
| Bridgebio Pharma, Inc. * | 232,654 | 11,488,455 |
| Brooklyn ImmunoTherapeutics, Inc. * | 63,090 | 537,527 |
66
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| C4 Therapeutics, Inc. * | 83,528 | 3,710,314 |
| Cara Therapeutics, Inc. * | 96,797 | 1,629,094 |
| Cardiff Oncology, Inc. * | 81,364 | 477,607 |
| CareDx, Inc. * | 109,099 | 5,564,049 |
| Caribou Biosciences, Inc. * | 41,991 | 928,421 |
| Cassava Sciences, Inc. *(a) | 82,799 | 3,571,121 |
| Catalyst Pharmaceuticals, Inc. * | 210,555 | 1,242,274 |
| Celcuity, Inc. * | 20,361 | 368,534 |
| Celldex Therapeutics, Inc. * | 98,925 | 4,208,269 |
| CEL-SCI Corp. *(a) | 78,009 | 873,701 |
| Century Therapeutics, Inc. *(a) | 24,753 | 556,200 |
| Cerevel Therapeutics Holdings, Inc. * | 86,789 | 3,527,973 |
| ChemoCentryx, Inc. * | 116,221 | 4,045,653 |
| Chimerix, Inc. * | 159,170 | 834,051 |
| Chinook Therapeutics, Inc. * | 71,269 | 765,429 |
| ChromaDex Corp. * | 102,969 | 637,378 |
| Citius Pharmaceuticals, Inc. *(a) | 240,757 | 450,216 |
| Clene, Inc. *(a) | 42,414 | 230,308 |
| Clovis Oncology, Inc. *(a) | 244,627 | 1,059,235 |
| Codex DNA, Inc. * | 15,605 | 144,190 |
| Codexis, Inc. * | 129,545 | 4,504,280 |
| Codiak Biosciences, Inc. * | 34,389 | 495,545 |
| Cogent Biosciences, Inc. * | 78,700 | 667,376 |
| Coherus Biosciences, Inc. * | 137,441 | 2,299,388 |
| Collegium Pharmaceutical, Inc. * | 76,422 | 1,500,164 |
| Corcept Therapeutics, Inc. * | 207,922 | 3,742,596 |
| CorMedix, Inc. * | 80,341 | 390,457 |
| Cortexyme, Inc. * | 42,870 | 565,884 |
| Crinetics Pharmaceuticals, Inc. * | 80,170 | 1,998,638 |
| Cue Biopharma, Inc. * | 65,578 | 800,707 |
| Cullinan Oncology, Inc. * | 56,105 | 1,246,653 |
| Curis, Inc. * | 188,384 | 1,224,496 |
| Cymabay Therapeutics, Inc. * | 146,993 | 573,273 |
| Cyteir Therapeutics, Inc. *(a) | 17,189 | 307,855 |
| Cytek Biosciences, Inc. * | 35,112 | 800,905 |
| Cytokinetics, Inc. * | 171,048 | 5,971,286 |
| CytomX Therapeutics, Inc. * | 139,455 | 826,968 |
| Day One Biopharmaceuticals, Inc. *(a) | 24,171 | 590,739 |
| Deciphera Pharmaceuticals, Inc. * | 85,720 | 2,862,191 |
| Denali Therapeutics, Inc. * | 196,702 | 9,510,542 |
| DermTech, Inc. * | 52,106 | 1,425,099 |
| Design Therapeutics, Inc. *(a) | 30,653 | 480,639 |
| Dicerna Pharmaceuticals, Inc. * | 150,083 | 3,123,227 |
| Durect Corp. * | 493,659 | 631,884 |
| Dynavax Technologies Corp. * | 233,277 | 4,658,542 |
| Dyne Therapeutics, Inc. * | 65,329 | 947,924 |
| Eagle Pharmaceuticals, Inc. * | 25,314 | 1,325,694 |
| Edgewise Therapeutics, Inc. *(a) | 28,522 | 470,613 |
| Editas Medicine, Inc. * | 147,899 | 5,430,851 |
| Eiger BioPharmaceuticals, Inc. * | 70,281 | 473,694 |
| Eliem Therapeutics, Inc. * | 14,707 | 256,196 |
| Emergent BioSolutions, Inc. * | 106,009 | 5,053,449 |
| Enanta Pharmaceuticals, Inc. * | 41,719 | 3,581,576 |
| Endo International plc * | 494,344 | 2,100,962 |
| Epizyme, Inc. * | 194,374 | 816,371 |
| Erasca, Inc. *(a) | 43,900 | 868,342 |
| Esperion Therapeutics, Inc. *(a) | 57,413 | 513,272 |
| Evelo Biosciences, Inc. *(a) | 67,517 | 597,525 |
| Evolus, Inc. * | 70,578 | 551,920 |
| Exagen, Inc. * | 22,979 | 267,016 |
| EyePoint Pharmaceuticals, Inc. * | 44,796 | 513,810 |
| Fate Therapeutics, Inc. * | 175,488 | 9,441,254 |
| FibroGen, Inc. * | 187,305 | 2,082,832 |
| Finch Therapeutics Group, Inc. * | 16,035 | 214,869 |
| Flexion Therapeutics, Inc. * | 103,026 | 952,990 |
| Fluidigm Corp. * | 164,338 | 846,341 |
| Foghorn Therapeutics, Inc. * | 41,457 | 526,089 |
| Forma Therapeutics Holdings, Inc. * | 73,379 | 1,361,914 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Forte Biosciences, Inc. *(a) | 24,801 | 67,211 |
| Fortress Biotech, Inc. * | 156,542 | 510,327 |
| Frequency Therapeutics, Inc. * | 67,821 | 425,916 |
| Fulcrum Therapeutics, Inc. * | 57,690 | 1,277,257 |
| G1 Therapeutics, Inc. *(a) | 84,622 | 1,226,173 |
| Gemini Therapeutics, Inc. * | 46,453 | 176,521 |
| Generation Bio Co. * | 94,938 | 1,989,900 |
| Geron Corp. * | 648,158 | 998,163 |
| Global Blood Therapeutics, Inc. * | 129,190 | 4,718,019 |
| Gossamer Bio, Inc. * | 132,792 | 1,649,277 |
| Graphite Bio, Inc. *(a) | 33,983 | 432,943 |
| Greenwich Lifesciences, Inc. * | 8,560 | 302,682 |
| Gritstone bio, Inc. * | 86,470 | 950,305 |
| GT Biopharma, Inc. * | 38,229 | 246,959 |
| Halozyme Therapeutics, Inc. * | 304,245 | 11,582,607 |
| Harmony Biosciences Holdings, Inc. * | 48,416 | 2,007,812 |
| Harpoon Therapeutics, Inc. * | 39,649 | 248,203 |
| Harvard Bioscience, Inc. * | 84,263 | 634,500 |
| Heron Therapeutics, Inc. * | 197,968 | 2,179,628 |
| Homology Medicines, Inc. * | 90,086 | 516,193 |
| Hookipa Pharma, Inc. * | 40,694 | 198,180 |
| Humanigen, Inc. * | 96,951 | 696,108 |
| iBio, Inc. * | 458,140 | 357,349 |
| Icosavax, Inc. * | 29,099 | 761,230 |
| Ideaya Biosciences, Inc. * | 70,506 | 1,511,649 |
| IGM Biosciences, Inc. * | 17,549 | 823,399 |
| Ikena Oncology, Inc. *(a) | 21,763 | 233,952 |
| Imago Biosciences, Inc. * | 21,689 | 577,361 |
| Immuneering Corp., Class A * | 17,239 | 467,177 |
| Immunic, Inc. * | 38,866 | 362,231 |
| ImmunityBio, Inc. *(a) | 147,539 | 1,155,230 |
| ImmunoGen, Inc. * | 430,414 | 2,595,396 |
| Immunovant, Inc. * | 87,438 | 703,002 |
| Impel Neuropharma Inc. *(a) | 11,413 | 122,005 |
| Infinity Pharmaceuticals, Inc. * | 185,502 | 471,175 |
| Inhibrx, Inc. * | 60,214 | 2,420,001 |
| Innoviva, Inc. * | 92,935 | 1,621,716 |
| Inotiv, Inc. * | 28,293 | 1,369,098 |
| Inovio Pharmaceuticals, Inc. *(a) | 445,764 | 3,182,755 |
| Inozyme Pharma, Inc. * | 30,497 | 284,842 |
| Insmed, Inc. * | 248,018 | 7,477,743 |
| Instil Bio, Inc. * | 38,719 | 788,706 |
| Intellia Therapeutics, Inc. * | 148,774 | 19,783,967 |
| Intercept Pharmaceuticals, Inc. * | 61,214 | 1,032,068 |
| Intra-Cellular Therapies, Inc. * | 152,940 | 6,587,126 |
| Invitae Corp. * | 433,181 | 11,479,296 |
| Ironwood Pharmaceuticals, Inc. * | 312,344 | 3,988,633 |
| iTeos Therapeutics, Inc. * | 43,449 | 1,162,261 |
| IVERIC bio, Inc. * | 225,487 | 3,991,120 |
| Janux Therapeutics, Inc. * | 29,138 | 709,510 |
| Jounce Therapeutics, Inc. * | 69,888 | 613,617 |
| Kadmon Holdings, Inc. * | 373,979 | 3,534,102 |
| Kala Pharmaceuticals, Inc. *(a) | 102,520 | 178,385 |
| Kaleido Biosciences, Inc. *(a) | 41,084 | 176,661 |
| KalVista Pharmaceuticals, Inc. * | 43,246 | 777,563 |
| Karuna Therapeutics, Inc. * | 48,091 | 6,751,015 |
| Karyopharm Therapeutics, Inc. * | 155,675 | 849,986 |
| KemPharm, Inc. *(a) | 60,593 | 575,634 |
| Keros Therapeutics, Inc. * | 33,923 | 1,415,268 |
| Kezar Life Sciences, Inc. * | 72,051 | 576,408 |
| Kiniksa Pharmaceuticals Ltd., Class A * | 61,469 | 638,663 |
| Kinnate Biopharma, Inc. * | 55,815 | 1,326,723 |
| Kodiak Sciences, Inc. * | 72,205 | 8,454,483 |
| Kronos Bio, Inc. * | 83,940 | 1,381,652 |
| Krystal Biotech, Inc. * | 39,049 | 1,955,964 |
| Kura Oncology, Inc. * | 137,571 | 2,258,916 |
| Kymera Therapeutics, Inc. * | 74,088 | 4,362,301 |
| Landos Biopharma, Inc. * | 10,349 | 139,298 |
67
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Lexicon Pharmaceuticals, Inc. * | 143,871 | 761,078 |
| Ligand Pharmaceuticals, Inc. * | 32,647 | 4,764,503 |
| Lineage Cell Therapeutics, Inc. * | 269,809 | 615,165 |
| Lyell Immunopharma, Inc. *(a) | 51,828 | 722,482 |
| MacroGenics, Inc. * | 129,249 | 2,524,233 |
| Madrigal Pharmaceuticals, Inc. * | 24,403 | 1,897,333 |
| Magenta Therapeutics, Inc. * | 63,421 | 405,894 |
| MannKind Corp. * | 532,743 | 2,509,220 |
| Marinus Pharmaceuticals, Inc. * | 79,957 | 919,506 |
| MaxCyte, Inc. * | 34,337 | 385,948 |
| Medpace Holdings, Inc. * | 62,619 | 14,186,334 |
| MEI Pharma, Inc. * | 238,565 | 672,753 |
| MeiraGTx Holdings plc * | 65,107 | 1,399,800 |
| Mersana Therapeutics, Inc. * | 154,649 | 1,323,795 |
| MiMedx Group, Inc. * | 240,999 | 1,650,843 |
| Mind Medicine MindMed, Inc. *(a) | 751,282 | 1,893,231 |
| Mirum Pharmaceuticals, Inc. * | 7,627 | 121,117 |
| Molecular Templates, Inc. * | 78,363 | 409,055 |
| Monte Rosa Therapeutics, Inc. *(a) | 25,547 | 599,077 |
| Morphic Holding, Inc. * | 44,833 | 2,577,897 |
| Mustang Bio, Inc. * | 147,567 | 330,550 |
| Myriad Genetics, Inc. * | 167,761 | 5,162,006 |
| NanoString Technologies, Inc. * | 98,203 | 4,743,205 |
| NeoGenomics, Inc. * | 245,020 | 11,270,920 |
| Neoleukin Therapeutics, Inc. * | 74,907 | 549,068 |
| NexImmune, Inc. * | 37,133 | 422,574 |
| NGM Biopharmaceuticals, Inc. * | 68,625 | 1,267,504 |
| Nkarta, Inc. * | 29,754 | 466,543 |
| Nurix Therapeutics, Inc. * | 67,911 | 2,271,623 |
| Nuvalent, Inc., Class A *(a) | 22,484 | 549,284 |
| Nuvation Bio, Inc. * | 144,402 | 1,324,166 |
| Ocugen, Inc. *(a) | 398,008 | 4,712,415 |
| Ocular Therapeutix, Inc. * | 163,908 | 1,088,349 |
| Olema Pharmaceuticals, Inc. * | 54,396 | 1,468,692 |
| Omega Therapeutics, Inc. * | 16,485 | 484,329 |
| Omeros Corp. *(a) | 129,200 | 810,084 |
| Oncocyte Corp. * | 129,596 | 425,075 |
| Oncorus, Inc. * | 43,295 | 461,525 |
| Oncternal Therapeutics, Inc. * | 93,824 | 344,334 |
| OPKO Health, Inc. * | 859,301 | 3,256,751 |
| Oramed Pharmaceuticals, Inc. *(a) | 65,707 | 1,538,201 |
| Organogenesis Holdings, Inc. * | 80,752 | 886,657 |
| ORIC Pharmaceuticals, Inc. * | 68,579 | 1,003,997 |
| Outlook Therapeutics, Inc. *(a) | 185,630 | 384,254 |
| Oyster Point Pharma, Inc. * | 23,540 | 277,301 |
| Pacific Biosciences of California, Inc. * | 420,136 | 11,125,201 |
| Pacira BioSciences, Inc. * | 94,375 | 4,933,925 |
| Paratek Pharmaceuticals, Inc. * | 105,248 | 528,345 |
| Passage Bio, Inc. * | 81,217 | 708,212 |
| Personalis, Inc. * | 76,850 | 1,507,797 |
| Phathom Pharmaceuticals, Inc. * | 43,863 | 1,032,096 |
| Phibro Animal Health Corp., Class A | 43,153 | 946,777 |
| Pliant Therapeutics, Inc. * | 52,481 | 836,022 |
| PMV Pharmaceuticals, Inc. * | 56,537 | 1,335,404 |
| Portage Biotech, Inc. * | 10,411 | 212,384 |
| Poseida Therapeutics, Inc. * | 60,968 | 390,805 |
| Praxis Precision Medicines, Inc. * | 70,239 | 1,460,971 |
| Precigen, Inc. * | 201,156 | 971,583 |
| Precision BioSciences, Inc. * | 105,675 | 1,002,856 |
| Prelude Therapeutics, Inc. * | 22,765 | 400,209 |
| Prestige Consumer Healthcare, Inc. * | 108,025 | 6,480,420 |
| Prometheus Biosciences, Inc. * | 23,959 | 763,334 |
| Protagonist Therapeutics, Inc. * | 96,581 | 3,009,464 |
| Prothena Corp. plc * | 75,586 | 4,183,685 |
| Provention Bio, Inc. * | 117,331 | 734,492 |
| PTC Therapeutics, Inc. * | 150,421 | 5,705,469 |
| Puma Biotechnology, Inc. * | 68,591 | 349,814 |
| Quanterix Corp. * | 66,484 | 3,364,755 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Radius Health, Inc. * | 101,456 | 2,191,450 |
| Rain Therapeutics, Inc. * | 15,731 | 245,089 |
| Rallybio Corp. * | 16,076 | 286,957 |
| Rapid Micro Biosystems, Inc., Class A * | 17,991 | 366,836 |
| RAPT Therapeutics, Inc. * | 45,851 | 1,447,975 |
| Reata Pharmaceuticals, Inc., Class A * | 59,414 | 5,704,338 |
| Recursion Pharmaceuticals, Inc., Class A *(a) | 61,180 | 1,171,597 |
| REGENXBIO, Inc. * | 85,242 | 3,020,976 |
| Relay Therapeutics, Inc. * | 129,673 | 4,311,627 |
| Relmada Therapeutics, Inc. * | 33,433 | 784,673 |
| Reneo Pharmaceuticals, Inc. * | 13,371 | 87,714 |
| Replimune Group, Inc. * | 64,073 | 1,890,794 |
| Revance Therapeutics, Inc. * | 151,822 | 2,087,552 |
| REVOLUTION Medicines, Inc. * | 127,927 | 3,764,892 |
| Rhythm Pharmaceuticals, Inc. * | 94,956 | 1,092,944 |
| Rigel Pharmaceuticals, Inc. * | 370,445 | 1,244,695 |
| Rocket Pharmaceuticals, Inc. * | 88,114 | 2,617,867 |
| Rubius Therapeutics, Inc. * | 98,391 | 1,398,136 |
| Sana Biotechnology, Inc. * | 186,397 | 3,865,874 |
| Sangamo Therapeutics, Inc. * | 256,037 | 2,079,020 |
| Scholar Rock Holding Corp. * | 60,352 | 1,587,258 |
| Seelos Therapeutics, Inc. * | 206,531 | 446,107 |
| Seer, Inc. * | 90,187 | 3,329,704 |
| Selecta Biosciences, Inc. * | 195,893 | 703,256 |
| Sensei Biotherapeutics, Inc. * | 43,865 | 381,187 |
| Sera Prognostics, Inc., Class A * | 9,084 | 93,838 |
| Seres Therapeutics, Inc. * | 150,490 | 914,979 |
| Sesen Bio, Inc. * | 417,650 | 505,357 |
| Shattuck Labs, Inc. * | 57,564 | 1,110,985 |
| SIGA Technologies, Inc. * | 105,432 | 760,165 |
| Sigilon Therapeutics, Inc. * | 31,572 | 170,173 |
| Silverback Therapeutics, Inc. *(a) | 43,225 | 373,032 |
| Singular Genomics Systems, Inc. * | 24,563 | 340,198 |
| Solid Biosciences, Inc. * | 126,405 | 256,602 |
| Sorrento Therapeutics, Inc. *(a) | 602,248 | 4,131,421 |
| Spectrum Pharmaceuticals, Inc. * | 351,111 | 642,533 |
| Spero Therapeutics, Inc. * | 51,466 | 903,743 |
| SpringWorks Therapeutics, Inc. * | 62,835 | 4,213,715 |
| Spruce Biosciences, Inc. * | 18,417 | 87,665 |
| SQZ Biotechnologies Co. * | 48,387 | 647,902 |
| Stoke Therapeutics, Inc. * | 41,939 | 957,467 |
| Summit Therapeutics, Inc. * | 55,033 | 283,970 |
| Supernus Pharmaceuticals, Inc. * | 105,948 | 3,162,548 |
| Surface Oncology, Inc. * | 75,782 | 562,302 |
| Sutro Biopharma, Inc. * | 93,725 | 1,889,496 |
| Syndax Pharmaceuticals, Inc. * | 97,333 | 1,893,127 |
| Syros Pharmaceuticals, Inc. * | 122,044 | 504,042 |
| Talaris Therapeutics, Inc. * | 18,871 | 318,731 |
| Tarsus Pharmaceuticals, Inc. * | 17,875 | 496,210 |
| Taysha Gene Therapies, Inc. * | 47,172 | 737,770 |
| TCR2 Therapeutics, Inc. * | 64,928 | 409,046 |
| Tenaya Therapeutics, Inc. *(a) | 30,606 | 786,880 |
| Terns Pharmaceuticals, Inc. * | 28,746 | 273,087 |
| TG Therapeutics, Inc. * | 276,305 | 8,626,242 |
| TherapeuticsMD, Inc. * | 858,241 | 624,799 |
| Theravance Biopharma, Inc. * | 129,978 | 1,009,929 |
| Tonix Pharmaceuticals Holding Corp. * | 755,462 | 417,015 |
| Travere Therapeutics, Inc. * | 125,891 | 3,626,920 |
| Trevena, Inc. * | 346,677 | 350,144 |
| Trillium Therapeutics, Inc. * | 215,191 | 3,897,109 |
| Turning Point Therapeutics, Inc. * | 99,730 | 4,146,773 |
| Twist Bioscience Corp. * | 102,074 | 12,126,391 |
| UroGen Pharma Ltd. *(a) | 42,689 | 734,251 |
| Vanda Pharmaceuticals, Inc. * | 117,261 | 2,007,508 |
| Vaxart, Inc. *(a) | 259,408 | 1,740,628 |
| Vaxcyte, Inc. * | 87,210 | 2,040,714 |
| VBI Vaccines, Inc. * | 396,853 | 1,150,874 |
68
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Vera Therapeutics, Inc. * | 14,894 | 288,199 |
| Veracyte, Inc. * | 145,580 | 6,970,370 |
| Verastem, Inc. * | 374,134 | 972,748 |
| Vericel Corp. * | 100,530 | 4,626,391 |
| Verrica Pharmaceuticals, Inc. *(a) | 29,378 | 369,869 |
| Verve Therapeutics, Inc. * | 34,172 | 1,585,239 |
| Viking Therapeutics, Inc. * | 145,414 | 846,309 |
| Vincerx Pharma, Inc. * | 27,089 | 378,433 |
| Vir Biotechnology, Inc. * | 129,990 | 4,904,523 |
| Viracta Therapeutics, Inc. * | 79,118 | 465,214 |
| VistaGen Therapeutics, Inc. * | 416,355 | 953,453 |
| Vor BioPharma, Inc. * | 40,040 | 629,829 |
| WaVe Life Sciences Ltd. * | 79,526 | 365,024 |
| Werewolf Therapeutics, Inc. * | 16,038 | 251,315 |
| XBiotech, Inc. | 33,292 | 488,061 |
| Xencor, Inc. * | 121,812 | 4,818,883 |
| XOMA Corp. *(a) | 12,952 | 323,800 |
| Y-mAbs Therapeutics, Inc. * | 76,181 | 1,871,005 |
| Zentalis Pharmaceuticals, Inc. * | 77,405 | 6,226,458 |
| ZIOPHARM Oncology, Inc. * | 457,567 | 686,351 |
| Zogenix, Inc. * | 120,456 | 1,846,590 |
| 772,326,736 | ||
| Real Estate 7.0% | ||
| Acadia Realty Trust | 187,422 | 4,007,082 |
| Agree Realty Corp. | 146,769 | 10,429,405 |
| Alexander & Baldwin, Inc. | 155,800 | 3,821,774 |
| Alexander's, Inc. | 4,673 | 1,302,739 |
| American Assets Trust, Inc. | 108,005 | 4,085,829 |
| American Finance Trust, Inc. | 254,403 | 2,106,457 |
| Apartment Investment & Management Co., Class A | 322,499 | 2,444,542 |
| Apple Hospitality REIT, Inc. | 463,734 | 7,285,261 |
| Armada Hoffler Properties, Inc. | 130,900 | 1,794,639 |
| Ashford Hospitality Trust, Inc. * | 36,073 | 509,711 |
| Braemar Hotels & Resorts, Inc. * | 117,260 | 595,681 |
| Brandywine Realty Trust | 366,316 | 4,853,687 |
| Broadstone Net Lease, Inc. | 334,613 | 8,897,360 |
| BRT Apartments Corp. | 25,149 | 500,465 |
| CareTrust REIT, Inc. | 209,178 | 4,340,443 |
| CatchMark Timber Trust, Inc., Class A | 104,096 | 891,062 |
| Centerspace | 30,240 | 3,061,498 |
| Chatham Lodging Trust * | 102,715 | 1,303,453 |
| City Office REIT, Inc. | 92,839 | 1,761,156 |
| Clipper Realty, Inc. | 25,900 | 222,222 |
| Columbia Property Trust, Inc. | 247,787 | 4,750,077 |
| Community Healthcare Trust, Inc. | 51,177 | 2,448,308 |
| CorePoint Lodging, Inc. * | 85,648 | 1,476,572 |
| Corporate Office Properties Trust | 243,592 | 6,606,215 |
| CTO Realty Growth, Inc. | 12,997 | 696,769 |
| Cushman & Wakefield plc * | 300,095 | 5,518,747 |
| DiamondRock Hospitality Co. * | 450,071 | 4,068,642 |
| DigitalBridge Group, Inc. * | 1,046,734 | 7,013,118 |
| Diversified Healthcare Trust | 518,762 | 1,888,294 |
| Easterly Government Properties, Inc. | 182,484 | 3,837,639 |
| EastGroup Properties, Inc. | 85,660 | 16,941,835 |
| Empire State Realty Trust, Inc., Class A | 307,998 | 2,981,421 |
| Equity Commonwealth * | 253,450 | 6,571,958 |
| Essential Properties Realty Trust, Inc. | 252,242 | 7,514,289 |
| eXp World Holdings, Inc. | 135,426 | 6,987,982 |
| Farmland Partners, Inc. | 60,794 | 683,325 |
| Fathom Holdings, Inc. *(a) | 11,486 | 290,481 |
| Forestar Group, Inc. * | 36,757 | 719,334 |
| Four Corners Property Trust, Inc. | 164,415 | 4,768,035 |
| Franklin Street Properties Corp. | 219,341 | 987,034 |
| FRP Holdings, Inc. * | 14,335 | 819,962 |
| Getty Realty Corp. | 86,123 | 2,766,271 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Gladstone Commercial Corp. | 77,880 | 1,702,457 |
| Gladstone Land Corp. | 62,154 | 1,376,090 |
| Global Medical REIT, Inc. | 128,860 | 2,136,499 |
| Global Net Lease, Inc. | 217,661 | 3,486,929 |
| Healthcare Realty Trust, Inc. | 314,403 | 10,394,163 |
| Hersha Hospitality Trust * | 68,563 | 612,268 |
| Independence Realty Trust, Inc. | 227,354 | 5,372,375 |
| Indus Realty Trust, Inc. | 9,249 | 644,655 |
| Industrial Logistics Properties Trust | 140,599 | 3,949,426 |
| Innovative Industrial Properties, Inc. | 51,187 | 13,466,788 |
| iStar, Inc. | 149,081 | 3,762,804 |
| Kennedy-Wilson Holdings, Inc. | 258,854 | 5,790,564 |
| Kite Realty Group Trust | 467,963 | 9,499,649 |
| Lexington Realty Trust | 593,039 | 8,640,578 |
| LTC Properties, Inc. | 83,971 | 2,675,316 |
| Mack-Cali Realty Corp. * | 189,764 | 3,451,807 |
| Marcus & Millichap, Inc. * | 51,356 | 2,418,868 |
| Monmouth Real Estate Investment Corp. | 205,933 | 3,881,837 |
| National Health Investors, Inc. | 94,867 | 5,101,947 |
| National Storage Affiliates Trust | 175,267 | 10,947,177 |
| NETSTREIT Corp. | 84,969 | 2,059,649 |
| Newmark Group, Inc., Class A | 322,586 | 4,800,080 |
| NexPoint Residential Trust, Inc. | 48,094 | 3,406,017 |
| Office Properties Income Trust | 103,267 | 2,645,701 |
| One Liberty Properties, Inc. | 34,630 | 1,082,534 |
| Outfront Media, Inc. | 313,660 | 7,806,997 |
| Paramount Group, Inc. | 401,587 | 3,405,458 |
| Pebblebrook Hotel Trust | 281,528 | 6,323,119 |
| Phillips Edison & Co., Inc. | 40,337 | 1,215,757 |
| Physicians Realty Trust | 466,138 | 8,861,283 |
| Piedmont Office Realty Trust, Inc., Class A | 268,621 | 4,770,709 |
| Plymouth Industrial REIT, Inc. | 63,447 | 1,621,705 |
| Postal Realty Trust, Inc., Class A | 26,872 | 522,123 |
| PotlatchDeltic Corp. | 142,385 | 7,442,464 |
| Preferred Apartment Communities, Inc., Class A | 111,499 | 1,406,002 |
| PS Business Parks, Inc. | 43,328 | 7,699,386 |
| Rafael Holdings, Inc., Class B * | 21,013 | 158,858 |
| RE/MAX Holdings, Inc., Class A | 40,332 | 1,282,961 |
| Realogy Holdings Corp. * | 249,166 | 4,315,555 |
| Redfin Corp. * | 220,035 | 11,296,597 |
| Retail Opportunity Investments Corp. | 256,921 | 4,565,486 |
| Retail Value, Inc. | 37,186 | 232,784 |
| RLJ Lodging Trust | 358,733 | 5,172,930 |
| RPT Realty | 172,319 | 2,290,119 |
| Ryman Hospitality Properties, Inc. * | 116,363 | 9,953,691 |
| Sabra Health Care REIT, Inc. | 475,946 | 6,734,636 |
| Safehold, Inc. | 38,636 | 2,886,109 |
| Saul Centers, Inc. | 25,740 | 1,194,336 |
| Seritage Growth Properties, Class A * | 81,895 | 1,261,183 |
| Service Properties Trust | 353,224 | 3,804,222 |
| SITE Centers Corp. | 373,992 | 5,942,733 |
| STAG Industrial, Inc. | 352,124 | 15,327,958 |
| Summit Hotel Properties, Inc. * | 226,293 | 2,262,930 |
| Sunstone Hotel Investors, Inc. * | 471,124 | 5,813,670 |
| Tanger Factory Outlet Centers, Inc. | 219,935 | 3,694,908 |
| Tejon Ranch Co. * | 44,204 | 804,955 |
| Terreno Realty Corp. | 149,629 | 10,942,369 |
| The GEO Group, Inc. | 254,075 | 2,078,333 |
| The Macerich Co. | 462,757 | 8,371,274 |
| The RMR Group, Inc., Class A | 33,029 | 1,149,079 |
| The St. Joe Co. | 71,809 | 3,376,459 |
| UMH Properties, Inc. | 91,469 | 2,189,768 |
| Uniti Group, Inc. | 419,708 | 6,006,021 |
| Universal Health Realty Income Trust | 27,727 | 1,579,607 |
| Urban Edge Properties | 250,375 | 4,389,074 |
| Urstadt Biddle Properties, Inc., Class A | 64,483 | 1,266,446 |
69
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Washington Real Estate Investment Trust | 183,292 | 4,646,452 |
| Whitestone REIT | 94,971 | 871,834 |
| Xenia Hotels & Resorts, Inc. * | 244,921 | 4,359,594 |
| 459,154,886 | ||
| Retailing 3.5% | ||
| 1-800-Flowers.com, Inc., Class A * | 57,915 | 1,860,230 |
| 1stdibs.com, Inc. *(a) | 13,824 | 236,943 |
| Abercrombie & Fitch Co., Class A * | 132,742 | 5,248,619 |
| Academy Sports & Outdoors, Inc. * | 167,763 | 7,176,901 |
| American Eagle Outfitters, Inc. | 328,167 | 7,790,685 |
| America's Car-Mart, Inc. * | 13,427 | 1,604,392 |
| Arko Corp. * | 259,356 | 2,487,224 |
| Asbury Automotive Group, Inc. * | 41,860 | 8,192,421 |
| Barnes & Noble Education, Inc. * | 82,162 | 852,842 |
| Bed Bath & Beyond, Inc. * | 226,137 | 3,174,963 |
| Big 5 Sporting Goods Corp. | 44,241 | 1,069,747 |
| Big Lots, Inc. | 73,806 | 3,265,915 |
| Boot Barn Holdings, Inc. * | 62,991 | 6,581,930 |
| Caleres, Inc. | 80,198 | 1,849,366 |
| Camping World Holdings, Inc., Class A | 92,517 | 3,446,258 |
| CarLotz, Inc. *(a) | 158,021 | 568,876 |
| CarParts.com, Inc. * | 106,246 | 1,618,127 |
| Chico's FAS, Inc. * | 261,533 | 1,427,970 |
| Citi Trends, Inc. * | 18,786 | 1,453,285 |
| Conn's, Inc. * | 39,060 | 869,866 |
| Designer Brands, Inc., Class A * | 128,373 | 1,736,887 |
| Dillard’s, Inc., Class A | 12,991 | 3,002,740 |
| Duluth Holdings, Inc., Class B * | 25,945 | 371,792 |
| Franchise Group, Inc. | 61,293 | 2,255,582 |
| Funko, Inc., Class A * | 57,932 | 949,505 |
| Genesco, Inc. * | 31,828 | 1,928,459 |
| Greenlane Holdings, Inc., Class A * | 34,625 | 59,209 |
| Group 1 Automotive, Inc. | 37,978 | 6,828,444 |
| Groupon, Inc. * | 51,441 | 1,091,578 |
| GrowGeneration Corp. * | 116,581 | 2,457,527 |
| Guess?, Inc. | 87,542 | 1,812,995 |
| Haverty Furniture Cos., Inc. | 35,700 | 1,024,590 |
| Hibbett, Inc. | 34,645 | 2,682,909 |
| JOANN, Inc. | 24,610 | 251,514 |
| Kirkland's, Inc. *(a) | 29,723 | 668,173 |
| Lands' End, Inc. * | 31,155 | 818,753 |
| Lazydays Holdings, Inc. * | 15,585 | 328,688 |
| Liquidity Services, Inc. * | 57,952 | 1,279,580 |
| Lumber Liquidators Holdings, Inc. * | 62,500 | 1,130,000 |
| Macy's, Inc. | 678,646 | 17,963,760 |
| MarineMax, Inc. * | 45,693 | 2,366,440 |
| Monro, Inc. | 71,328 | 4,405,217 |
| Murphy USA, Inc. | 52,274 | 8,518,048 |
| National Vision Holdings, Inc. * | 176,282 | 10,866,022 |
| OneWater Marine, Inc., Class A | 21,996 | 975,303 |
| Overstock.com, Inc. * | 92,711 | 8,828,869 |
| Party City Holdco, Inc. * | 239,820 | 1,743,491 |
| PetMed Express, Inc. (a) | 42,888 | 1,219,306 |
| Porch Group, Inc. * | 167,013 | 3,512,283 |
| Quotient Technology, Inc. * | 191,394 | 1,232,577 |
| Rent-A-Center, Inc. | 142,160 | 7,571,442 |
| Revolve Group, Inc. * | 77,576 | 5,821,303 |
| Sally Beauty Holdings, Inc. * | 244,062 | 3,724,386 |
| Shift Technologies, Inc. *(a) | 131,513 | 898,234 |
| Shoe Carnival, Inc. | 38,423 | 1,301,387 |
| Shutterstock, Inc. | 50,506 | 6,118,802 |
| Signet Jewelers Ltd. | 112,675 | 10,048,356 |
| Sleep Number Corp. * | 49,997 | 4,416,735 |
| Sonic Automotive, Inc., Class A | 47,200 | 2,333,096 |
| Sportsman's Warehouse Holdings, Inc. * | 93,985 | 1,622,181 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Stitch Fix, Inc., Class A * | 127,846 | 4,423,472 |
| The Aaron's Co., Inc. | 70,347 | 1,645,416 |
| The Buckle, Inc. | 64,335 | 2,677,623 |
| The Cato Corp., Class A | 41,869 | 738,150 |
| The Children's Place, Inc. * | 30,383 | 2,518,447 |
| The Container Store Group, Inc. * | 69,729 | 771,203 |
| The ODP Corp. * | 103,144 | 4,466,135 |
| The RealReall, Inc. * | 170,400 | 2,220,312 |
| Tilly's, Inc., Class A | 48,828 | 677,733 |
| Torrid Holdings, Inc. * | 26,522 | 398,891 |
| TravelCenters of America, Inc. * | 26,969 | 1,453,899 |
| Urban Outfitters, Inc. * | 148,514 | 4,742,052 |
| Winmark Corp. | 7,521 | 1,751,039 |
| Xometry, Inc., Class A *(a) | 17,383 | 938,682 |
| Zumiez, Inc. * | 47,631 | 1,938,582 |
| 228,304,359 | ||
| Semiconductors & Semiconductor Equipment 3.2% | ||
| Alpha & Omega Semiconductor Ltd. * | 45,867 | 1,589,292 |
| Ambarella, Inc. * | 75,499 | 14,029,979 |
| Amkor Technology, Inc. | 219,888 | 4,819,945 |
| Atomera, Inc. *(a) | 44,225 | 955,702 |
| Axcelis Technologies, Inc. * | 71,682 | 3,937,492 |
| AXT, Inc. * | 85,696 | 700,136 |
| CEVA, Inc. * | 48,808 | 2,226,133 |
| CMC Materials, Inc. | 62,998 | 8,087,053 |
| Cohu, Inc. * | 103,156 | 3,305,118 |
| Diodes, Inc. * | 93,969 | 9,029,481 |
| DSP Group, Inc. * | 49,280 | 1,082,682 |
| FormFactor, Inc. * | 167,907 | 6,679,340 |
| Ichor Holdings Ltd. * | 59,967 | 2,621,757 |
| Impinj, Inc. * | 40,461 | 2,820,941 |
| Kopin Corp. * | 170,176 | 891,722 |
| Kulicke & Soffa Industries, Inc. | 132,332 | 7,542,924 |
| Lattice Semiconductor Corp. * | 292,983 | 20,344,740 |
| MACOM Technology Solutions Holdings, Inc. * | 105,070 | 7,335,987 |
| MaxLinear, Inc. * | 153,305 | 9,658,215 |
| Meta Materials, Inc. *(a) | 472,428 | 2,220,412 |
| NeoPhotonics Corp. * | 112,186 | 1,135,322 |
| NVE Corp. | 10,099 | 686,429 |
| Onto Innovation, Inc. * | 105,045 | 8,320,614 |
| PDF Solutions, Inc. * | 64,635 | 1,520,862 |
| Photronics, Inc. * | 128,634 | 1,670,956 |
| Power Integrations, Inc. | 130,384 | 13,456,933 |
| Rambus, Inc. * | 234,371 | 5,453,813 |
| Semtech Corp. * | 139,771 | 11,884,728 |
| Silicon Laboratories, Inc. * | 95,866 | 18,095,666 |
| SiTime Corp. * | 28,102 | 7,443,939 |
| SkyWater Technology, Inc. * | 17,702 | 606,117 |
| SMART Global Holdings, Inc. * | 37,768 | 2,019,077 |
| SunPower Corp. * | 172,992 | 5,822,911 |
| Synaptics, Inc. * | 76,170 | 14,820,397 |
| Ultra Clean Holdings, Inc. * | 95,782 | 4,747,914 |
| Veeco Instruments, Inc. * | 107,677 | 2,615,474 |
| 210,180,203 | ||
| Software & Services 7.8% | ||
| 8x8, Inc. * | 239,858 | 5,435,182 |
| A10 Networks, Inc. * | 130,427 | 2,437,681 |
| ACI Worldwide, Inc. * | 254,366 | 7,803,949 |
| Agilysys, Inc. * | 42,758 | 2,040,412 |
| Alarm.com Holdings, Inc. * | 102,243 | 8,614,995 |
| Alkami Technology, Inc. * | 15,936 | 478,080 |
| Altair Engineering, Inc., Class A * | 100,021 | 7,780,634 |
| American Software, Inc., Class A | 67,531 | 1,953,672 |
70
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Appfolio, Inc., Class A * | 40,484 | 5,331,338 |
| Appian Corp. * | 84,790 | 8,428,974 |
| Asana, Inc., Class A * | 159,733 | 21,691,741 |
| Avaya Holdings Corp. * | 177,577 | 3,306,484 |
| Benefitfocus, Inc. * | 52,277 | 572,956 |
| BigCommerce Holdings, Inc. * | 104,248 | 4,817,300 |
| Blackbaud, Inc. * | 104,283 | 7,405,136 |
| Blackline, Inc. * | 115,705 | 14,679,493 |
| BM Technologies, Inc. *(a)(b) | 9,231 | 79,816 |
| Bottomline Technologies (DE), Inc. * | 95,281 | 4,411,510 |
| Box, Inc., Class A * | 308,274 | 7,962,717 |
| Brightcove, Inc. * | 87,679 | 869,776 |
| BTRS Holdings, Inc. * | 140,657 | 1,208,244 |
| Cantaloupe, Inc. * | 126,288 | 1,578,600 |
| Cass Information Systems, Inc. | 30,939 | 1,268,190 |
| Cerence, Inc. * | 81,615 | 8,580,185 |
| ChannelAdvisor Corp. * | 63,103 | 1,609,758 |
| Cleanspark, Inc. *(a) | 71,577 | 1,450,150 |
| CommVault Systems, Inc. * | 98,748 | 6,073,002 |
| Conduent, Inc. * | 361,998 | 2,443,486 |
| Consensus Cloud Solutions, Inc. * | 31,420 | 1,989,829 |
| Couchbase, Inc. *(a) | 21,252 | 856,881 |
| CS Disco, Inc. * | 28,053 | 1,608,840 |
| CSG Systems International, Inc. | 70,519 | 3,529,476 |
| Digimarc Corp. *(a) | 27,636 | 1,396,447 |
| Digital Turbine, Inc. * | 196,137 | 16,879,550 |
| DigitalOcean Holdings, Inc. * | 107,046 | 10,446,619 |
| Domo, Inc., Class B * | 59,514 | 5,258,062 |
| E2open Parent Holdings, Inc. * | 351,257 | 4,390,712 |
| Ebix, Inc. | 57,235 | 1,877,880 |
| eGain Corp. * | 43,312 | 446,980 |
| Envestnet, Inc. * | 117,333 | 9,797,305 |
| EverCommerce, Inc. *(a) | 36,267 | 750,002 |
| EVERTEC, Inc. | 130,488 | 5,899,362 |
| Evo Payments, Inc., Class A * | 101,552 | 2,201,647 |
| ExlService Holdings, Inc. * | 71,003 | 8,707,098 |
| Flywire Corp. *(a) | 26,060 | 1,236,286 |
| GreenBox POS *(a) | 40,092 | 325,547 |
| GreenSky, Inc., Class A * | 154,968 | 1,896,808 |
| Grid Dynamics Holdings, Inc. * | 91,426 | 2,628,497 |
| GTY Technology Holdings, Inc. * | 68,240 | 518,624 |
| I3 Verticals, Inc., Class A * | 45,966 | 1,029,179 |
| IBEX Holdings Ltd. * | 12,767 | 207,464 |
| Instructure Holdings, Inc. * | 26,113 | 658,570 |
| Intapp, Inc. * | 21,924 | 591,948 |
| Intelligent Systems Corp. * | 15,396 | 651,713 |
| InterDigital, Inc. | 66,925 | 4,480,629 |
| International Money Express, Inc. * | 69,512 | 1,163,631 |
| JFrog Ltd. * | 114,651 | 3,747,941 |
| Kaltura, Inc. * | 38,284 | 361,401 |
| Limelight Networks, Inc. * | 268,789 | 800,991 |
| LivePerson, Inc. * | 139,669 | 7,194,350 |
| LiveRamp Holdings, Inc. * | 142,442 | 7,622,071 |
| Marathon Digital Holdings, Inc. * | 206,298 | 10,777,008 |
| Maximus, Inc. | 132,225 | 11,182,268 |
| MeridianLink, Inc. * | 27,557 | 665,502 |
| MicroStrategy, Inc., Class A * | 16,954 | 12,123,127 |
| Mimecast Ltd. * | 131,616 | 9,929,111 |
| Mitek Systems, Inc. * | 91,956 | 1,731,531 |
| Model N, Inc. * | 76,380 | 2,475,476 |
| Momentive Global, Inc. * | 279,792 | 6,412,833 |
| MoneyGram International, Inc. * | 193,775 | 1,156,837 |
| ON24, Inc. * | 58,276 | 1,114,820 |
| OneSpan, Inc. * | 75,905 | 1,549,980 |
| PagerDuty, Inc. * | 174,038 | 7,266,086 |
| Paya Holdings, Inc. * | 176,025 | 1,603,588 |
| Perficient, Inc. * | 70,376 | 8,698,474 |
| Ping Identity Holding Corp. * | 107,270 | 3,038,959 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Priority Technology Holdings, Inc. * | 21,956 | 115,928 |
| Progress Software Corp. | 95,054 | 4,886,726 |
| PROS Holdings, Inc. * | 86,620 | 2,598,600 |
| Q2 Holdings, Inc. * | 118,143 | 9,269,500 |
| QAD, Inc., Class A | 26,188 | 2,295,116 |
| Qualys, Inc. * | 73,466 | 9,145,048 |
| Rackspace Technology, Inc. * | 117,842 | 1,566,120 |
| Rapid7, Inc. * | 119,877 | 15,434,164 |
| Rekor Systems, Inc. * | 66,587 | 905,583 |
| Repay Holdings Corp. * | 186,369 | 3,915,613 |
| Rimini Street, Inc. * | 96,154 | 1,000,963 |
| Riot Blockchain, Inc. * | 182,148 | 4,958,069 |
| SailPoint Technologies Holding, Inc. * | 197,808 | 9,490,828 |
| Sapiens International Corp. N.V. | 66,672 | 2,328,853 |
| SecureWorks Corp., Class A * | 21,266 | 391,720 |
| ShotSpotter, Inc. * | 17,961 | 698,863 |
| Smith Micro Software, Inc. * | 101,655 | 579,433 |
| Sprout Social, Inc., Class A * | 96,656 | 12,341,038 |
| SPS Commerce, Inc. * | 77,867 | 11,892,627 |
| StarTek, Inc. * | 37,837 | 208,103 |
| Sumo Logic, Inc. * | 185,528 | 3,204,069 |
| Telos Corp. * | 86,722 | 2,246,967 |
| Tenable Holdings, Inc. * | 196,082 | 10,441,366 |
| The Hackett Group, Inc. | 52,389 | 1,107,503 |
| TTEC Holdings, Inc. | 40,070 | 3,782,207 |
| Tucows, Inc., Class A * | 21,165 | 1,741,879 |
| Unisys Corp. * | 141,708 | 3,623,474 |
| Upland Software, Inc. * | 62,527 | 2,086,526 |
| Varonis Systems, Inc. * | 228,750 | 14,809,275 |
| Verint Systems, Inc. * | 139,281 | 6,490,495 |
| Veritone, Inc. * | 61,734 | 1,846,464 |
| Verra Mobility Corp. * | 290,217 | 4,318,429 |
| Viant Technology, Inc., Class A * | 25,249 | 296,676 |
| VirnetX Holding Corp. * | 136,102 | 523,993 |
| Vonage Holdings Corp. * | 521,026 | 8,398,939 |
| Workiva, Inc. * | 92,416 | 13,820,813 |
| Xperi Holding Corp. | 227,300 | 4,073,216 |
| Yext, Inc. * | 240,048 | 3,022,204 |
| Zix Corp. * | 116,635 | 987,898 |
| Zuora, Inc., Class A * | 240,342 | 5,253,876 |
| 517,290,565 | ||
| Technology Hardware & Equipment 3.1% | ||
| 3D Systems Corp. * | 262,387 | 7,388,818 |
| 908 Devices, Inc. * | 27,966 | 920,081 |
| ADTRAN, Inc. | 104,912 | 1,938,774 |
| Advanced Energy Industries, Inc. | 82,965 | 7,617,846 |
| Aeva Technologies, Inc. *(a) | 165,798 | 1,286,592 |
| Akoustis Technologies, Inc. * | 92,265 | 693,833 |
| Arlo Technologies, Inc. * | 180,244 | 1,243,684 |
| Aviat Networks, Inc. * | 20,369 | 582,553 |
| Avid Technology, Inc. * | 78,176 | 2,238,961 |
| Badger Meter, Inc. | 62,984 | 6,440,114 |
| Belden, Inc. | 95,538 | 5,752,343 |
| Benchmark Electronics, Inc. | 77,520 | 1,806,991 |
| CalAmp Corp. * | 76,775 | 738,576 |
| Calix, Inc. * | 119,029 | 7,450,025 |
| Cambium Networks Corp. * | 22,608 | 637,998 |
| Casa Systems, Inc. * | 65,617 | 415,356 |
| Clearfield, Inc. * | 24,731 | 1,397,054 |
| Comtech Telecommunications Corp. | 54,342 | 1,172,157 |
| Corsair Gaming, Inc. *(a) | 59,260 | 1,448,907 |
| CTS Corp. | 68,379 | 2,435,660 |
| Daktronics, Inc. * | 77,915 | 432,428 |
| Diebold Nixdorf, Inc. * | 156,280 | 1,406,520 |
| Digi International, Inc. * | 73,273 | 1,579,033 |
| DZS, Inc. * | 35,674 | 388,847 |
71
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Eastman Kodak Co. *(a) | 95,056 | 645,430 |
| EMCORE Corp. * | 77,507 | 579,752 |
| ePlus, Inc. * | 28,669 | 3,169,931 |
| Extreme Networks, Inc. * | 266,658 | 2,621,248 |
| Fabrinet * | 79,694 | 7,650,624 |
| FARO Technologies, Inc. * | 39,297 | 2,891,080 |
| Harmonic, Inc. * | 193,411 | 1,754,238 |
| Identiv, Inc. * | 45,280 | 867,565 |
| II-VI, Inc. * | 225,914 | 13,670,056 |
| Infinera Corp. * | 389,347 | 2,955,144 |
| Inseego Corp. * | 181,138 | 1,123,056 |
| Insight Enterprises, Inc. * | 74,418 | 7,047,385 |
| Iteris, Inc. * | 88,739 | 475,641 |
| Itron, Inc. * | 97,549 | 7,586,386 |
| Kimball Electronics, Inc. * | 52,103 | 1,497,961 |
| Knowles Corp. * | 192,700 | 4,015,868 |
| KVH Industries, Inc. * | 32,243 | 330,813 |
| Luna Innovations, Inc. * | 65,176 | 634,814 |
| Methode Electronics, Inc. | 82,103 | 3,454,073 |
| MicroVision, Inc. * | 356,491 | 2,712,897 |
| Napco Security Technologies, Inc. * | 31,363 | 1,504,169 |
| NETGEAR, Inc. * | 65,511 | 1,888,682 |
| NetScout Systems, Inc. * | 152,161 | 4,117,477 |
| nLight, Inc. * | 91,990 | 2,586,759 |
| Novanta, Inc. * | 76,208 | 13,150,452 |
| OSI Systems, Inc. * | 36,498 | 3,398,329 |
| Ouster, Inc. *(a) | 61,578 | 379,320 |
| PAR Technology Corp. * | 52,857 | 3,320,477 |
| PC Connection, Inc. | 24,113 | 1,110,404 |
| Plantronics, Inc. * | 91,119 | 2,438,344 |
| Plexus Corp. * | 60,365 | 5,271,072 |
| Quantum Corp. * | 122,458 | 699,235 |
| Ribbon Communications, Inc. * | 152,373 | 833,480 |
| Rogers Corp. * | 40,371 | 8,119,416 |
| Sanmina Corp. * | 139,139 | 5,252,497 |
| ScanSource, Inc. * | 54,523 | 1,950,833 |
| Super Micro Computer, Inc. * | 92,817 | 3,284,794 |
| TTM Technologies, Inc. * | 232,959 | 3,084,377 |
| Turtle Beach Corp. * | 33,406 | 960,757 |
| Velodyne Lidar, Inc. *(a) | 164,365 | 1,002,626 |
| Viavi Solutions, Inc. * | 492,985 | 7,591,969 |
| Vishay Intertechnology, Inc. | 288,771 | 5,550,179 |
| Vishay Precision Group, Inc. * | 27,071 | 922,850 |
| 201,515,611 | ||
| Telecommunication Services 0.8% | ||
| Anterix, Inc. * | 24,755 | 1,586,796 |
| ATN International, Inc. | 24,287 | 990,424 |
| Bandwidth, Inc., Class A * | 49,662 | 4,235,175 |
| Cogent Communications Holdings, Inc. | 92,107 | 7,054,475 |
| Consolidated Communications Holdings, Inc. * | 158,197 | 1,170,658 |
| EchoStar Corp., Class A * | 85,588 | 2,007,895 |
| Globalstar, Inc. * | 1,312,650 | 2,165,873 |
| Gogo, Inc. * | 127,731 | 2,076,906 |
| IDT Corp., Class B * | 43,319 | 2,095,340 |
| Iridium Communications, Inc. * | 255,289 | 10,351,969 |
| Liberty Latin America Ltd., Class A * | 90,416 | 1,086,800 |
| Liberty Latin America Ltd., Class C * | 334,415 | 4,023,012 |
| Ooma, Inc. * | 46,701 | 1,078,793 |
| Radius Global Infrastructure, Inc., Class A * | 126,672 | 2,195,226 |
| Shenandoah Telecommunications Co. | 104,019 | 2,875,085 |
| Telephone & Data Systems, Inc. | 218,969 | 4,103,479 |
| United States Cellular Corp. * | 33,255 | 1,016,605 |
| 50,114,511 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Transportation 1.7% | ||
| Air Transport Services Group, Inc. * | 126,940 | 3,159,537 |
| Allegiant Travel Co. * | 33,171 | 5,813,881 |
| ArcBest Corp. | 54,749 | 4,919,198 |
| Atlas Air Worldwide Holdings, Inc. * | 62,067 | 5,034,875 |
| Avis Budget Group, Inc. * | 105,243 | 18,239,664 |
| Costamare, Inc. | 114,704 | 1,538,181 |
| Covenant Logistics Group, Inc. * | 25,632 | 727,949 |
| Daseke, Inc. * | 85,773 | 810,555 |
| Eagle Bulk Shipping, Inc. * | 18,927 | 814,807 |
| Echo Global Logistics, Inc. * | 56,816 | 2,740,236 |
| Forward Air Corp. | 58,817 | 5,914,638 |
| Frontier Group Holdings, Inc. * | 75,651 | 1,183,938 |
| Genco Shipping & Trading Ltd. | 68,321 | 1,173,072 |
| Hawaiian Holdings, Inc. * | 108,235 | 2,094,347 |
| Heartland Express, Inc. | 102,878 | 1,679,998 |
| Hub Group, Inc., Class A * | 71,528 | 5,619,955 |
| HyreCar, Inc. * | 37,170 | 252,384 |
| Marten Transport Ltd. | 129,187 | 2,148,380 |
| Matson, Inc. | 92,684 | 7,718,723 |
| Mesa Air Group, Inc. * | 74,937 | 565,025 |
| P.A.M. Transportation Services, Inc. * | 8,066 | 498,640 |
| Radiant Logistics, Inc. * | 86,187 | 580,038 |
| Safe Bulkers, Inc. * | 132,199 | 589,608 |
| Saia, Inc. * | 57,280 | 17,908,019 |
| SkyWest, Inc. * | 107,505 | 4,625,940 |
| Spirit Airlines, Inc. * | 212,312 | 4,639,017 |
| Sun Country Airlines Holdings, Inc. * | 55,729 | 1,687,474 |
| Universal Logistics Holdings, Inc. | 16,120 | 339,810 |
| US Xpress Enterprises, Inc., Class A * | 57,053 | 431,891 |
| Werner Enterprises, Inc. | 135,410 | 6,136,781 |
| Yellow Corp. * | 110,170 | 963,987 |
| 110,550,548 | ||
| Utilities 2.4% | ||
| ALLETE, Inc. | 113,345 | 6,975,251 |
| American States Water Co. | 79,635 | 7,234,043 |
| Artesian Resources Corp., Class A | 17,654 | 710,044 |
| Avista Corp. | 149,509 | 5,951,953 |
| Black Hills Corp. | 136,160 | 9,038,301 |
| Brookfield Infrastructure Corp., Class A | 115,958 | 7,031,693 |
| Cadiz, Inc. *(a) | 46,823 | 284,216 |
| California Water Service Group | 111,155 | 6,767,116 |
| Chesapeake Utilities Corp. | 37,235 | 4,880,392 |
| Clearway Energy, Inc., Class A | 75,655 | 2,495,858 |
| Clearway Energy, Inc., Class C | 177,065 | 6,282,266 |
| Global Water Resources, Inc. | 27,990 | 529,571 |
| MGE Energy, Inc. | 78,480 | 5,955,847 |
| Middlesex Water Co. | 37,267 | 4,103,842 |
| New Jersey Resources Corp. | 209,069 | 7,904,899 |
| Northwest Natural Holding Co. | 65,736 | 2,964,036 |
| NorthWestern Corp. | 111,506 | 6,340,231 |
| ONE Gas, Inc. | 114,014 | 7,673,142 |
| Ormat Technologies, Inc. | 97,645 | 7,062,663 |
| Otter Tail Corp. | 88,853 | 5,509,775 |
| PNM Resources, Inc. | 184,901 | 9,198,825 |
| Portland General Electric Co. | 194,600 | 9,595,726 |
| Pure Cycle Corp. * | 42,288 | 663,499 |
| SJW Group | 59,861 | 3,946,037 |
| South Jersey Industries, Inc. | 222,428 | 5,062,461 |
| Southwest Gas Holdings, Inc. | 127,934 | 8,859,430 |
| Spire, Inc. | 109,310 | 6,860,296 |
| Sunnova Energy International, Inc. * | 185,552 | 8,268,197 |
| The York Water Co. | 28,330 | 1,357,574 |
72
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Unitil Corp. | 33,664 | 1,405,472 |
| Via Renewables, Inc. | 24,823 | 276,776 |
| 161,189,432 | ||
| Total Common Stocks (Cost $4,193,657,035) | 6,553,559,608 | |
| SECURITY RATE, MATURITY DATE | FACE AMOUNT ($) | VALUE ($) |
| CORPORATE BONDS 0.0% OF NET ASSETS | ||
| Diversified Financials 0.0% | ||
| GAMCO Investors, Inc. | ||
| 4.00%, 06/15/23 | 24,000 | 23,937 |
| Total Corporate Bonds (Cost $24,000) | 23,937 | |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| RIGHTS 0.0% OF NET ASSETS | ||
| Media & Entertainment 0.0% | ||
| Media General, Inc. CVR *(b) | 174,886 | 14,883 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||
| Aduro Biotech, Inc. CVR *(b) | 27,867 | 57,810 |
| Omthera Pharmaceuticals, Inc. CVR *(b) | 8,400 | 0 |
| Oncternal Therapeutics, Inc. CVR *(a)(b) | 1,506 | 3,087 |
| Tobira Therapeutics, Inc. CVR *(b) | 14,029 | 167,575 |
| 228,472 | ||
| Total Rights (Cost $3,929) | 243,355 | |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 2.0% OF NET ASSETS | ||
| Money Market Funds 1.5% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 100,904,650 | 100,904,650 |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT ($) | VALUE ($) |
| Time Deposits 0.5% | ||
| BNP Paribas SA | ||
| 0.01%, 11/01/21 (e) | 28,701,235 | 28,701,235 |
| Total Short-Term Investments (Cost $129,605,885) | 129,605,885 | |
| Total Investments in Securities (Cost $4,323,290,849) | 6,683,432,785 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| Russell 2000 Index, e-mini, expires 12/17/21 | 278 | 31,904,670 | 456,167 |
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $99,129,002. |
| (b) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the 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. |
| CVR — | Contingent Value Rights |
| REIT — | Real Estate Investment Trust |
73
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $5,280,349,459 | $— | $— | $5,280,349,459 |
| Health Care Equipment & Services | 505,916,196 | — | 702,365 | 506,618,561 |
| Materials | 249,301,023 | — | 0* | 249,301,023 |
| Software & Services | 517,210,749 | — | 79,816 | 517,290,565 |
| Corporate Bonds1 | — | 23,937 | — | 23,937 |
| Rights 1 | ||||
| Media & Entertainment | — | — | 14,883 | 14,883 |
| Pharmaceuticals, Biotechnology & Life Sciences | — | — | 228,472* | 228,472 |
| Short-Term Investments1 | 100,904,650 | — | — | 100,904,650 |
| Time Deposits | — | 28,701,235 | — | 28,701,235 |
| Futures Contracts2 | 456,167 | — | — | 456,167 |
| Total | $6,654,138,244 | $28,725,172 | $1,025,536 | $6,683,888,952 |
| * | Level 3 amount shown includes securities determined to have no value at October 31, 2021. |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
74
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $4,323,290,849) including securities on loan of $99,129,002 | $6,683,432,785 | |
| Deposit with broker for futures contracts | 3,737,500 | |
| Receivables: | ||
| Fund shares sold | 3,811,615 | |
| Dividends | 1,437,981 | |
| Income from securities on loan | 218,682 | |
| Variation margin on future contracts | 3,226 | |
| Interest | + | 376 |
| Total assets | 6,692,642,165 | |
| Liabilities | ||
| Collateral held for securities on loan | 100,904,650 | |
| Payables: | ||
| Fund shares redeemed | 2,014,189 | |
| Deferred dividend income | 1,498,927 | |
| Investments bought | 1,008,946 | |
| Investment adviser fees | + | 219,474 |
| Total liabilities | 105,646,186 | |
| Net assets | $6,586,995,979 | |
| Net Assets by Source | ||
| Capital received from investors | $3,880,062,044 | |
| Total distributable earnings | + | 2,706,933,935 |
| Net assets | $6,586,995,979 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $6,586,995,979 | 164,800,880 | $39.97 | ||
75
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $115,316) | $58,365,340 | |
| Interest received from securities - unaffiliated | 2,136 | |
| Securities on loan, net | + | 2,774,762 |
| Total investment income | 61,142,238 | |
| Expenses | ||
| Investment adviser fees | + | 2,388,536 |
| Total expenses | – | 2,388,536 |
| Net investment income | 58,753,702 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 418,343,367 | |
| Net realized gains on futures contracts | + | 9,813,387 |
| Net realized gains | 428,156,754 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 1,574,155,445 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 970,576 |
| Net change in unrealized appreciation (depreciation) | + | 1,575,126,021 |
| Net realized and unrealized gains | 2,003,282,775 | |
| Increase in net assets resulting from operations | $2,062,036,477 | |
76
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Small-Cap Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $58,753,702 | $52,110,703 | |
| Net realized gains | 428,156,754 | 16,309,735 | |
| Net change in unrealized appreciation (depreciation) | + | 1,575,126,021 | (66,209,739) |
| Increase in net assets from operations | $2,062,036,477 | $2,210,699 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($129,889,789) | ($258,984,423) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 42,300,482 | $1,579,406,837 | 42,497,497 | $1,056,026,388 | |
| Shares reinvested | 3,127,037 | 106,319,237 | 7,453,061 | 217,331,235 | |
| Shares redeemed | + | (27,339,753) | (1,019,048,338) | (48,388,038) | (1,215,269,449) |
| Net transactions in fund shares | 18,087,766 | $666,677,736 | 1,562,520 | $58,088,174 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 146,713,114 | $3,988,171,555 | 145,150,594 | $4,186,857,105 | |
| Total increase (decrease) | + | 18,087,766 | 2,598,824,424 | 1,562,520 | (198,685,550) |
| End of period | 164,800,880 | $6,586,995,979 | 146,713,114 | $3,988,171,555 | |
77
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $57.62 | $53.42 | $48.38 | $46.25 | $38.19 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 1.00 | 1.07 | 0.99 | 0.88 | 0.80 | |
| Net realized and unrealized gains (losses) | 24.10 | 4.21 | 5.18 | 2.12 | 8.19 | |
| Total from investment operations | 25.10 | 5.28 | 6.17 | 3.00 | 8.99 | |
| Less distributions: | ||||||
| Distributions from net investment income | (1.08) | (0.94) | (0.90) | (0.76) | (0.74) | |
| Distributions from net realized gains | — | (0.14) | (0.23) | (0.11) | (0.19) | |
| Total distributions | (1.08) | (1.08) | (1.13) | (0.87) | (0.93) | |
| Net asset value at end of period | $81.64 | $57.62 | $53.42 | $48.38 | $46.25 | |
| Total return | 44.01% | 9.94% | 13.37% | 6.51% | 23.89% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.03% | 0.03% | 0.03% | 0.03% | 0.05% 2 | |
| Net operating expenses | N/A | N/A | N/A | N/A 3 | 0.05% 2 | |
| Net investment income (loss) | 1.37% | 1.96% | 1.99% | 1.80% | 1.89% | |
| Portfolio turnover rate | 3% | 4% | 3% | 4% | 2% | |
| Net assets, end of period (x 1,000,000) | $18,232 | $11,487 | $10,220 | $8,410 | $6,720 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 3 | Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
78
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.4% OF NET ASSETS | ||
| Automobiles & Components 2.6% | ||
| Adient plc * | 35,326 | 1,470,268 |
| American Axle & Manufacturing Holdings, Inc. * | 41,671 | 378,373 |
| Aptiv plc * | 102,704 | 17,756,495 |
| Arcimoto, Inc. *(a) | 8,847 | 103,333 |
| Autoliv, Inc. | 29,710 | 2,877,413 |
| AYRO, Inc. * | 8,928 | 26,338 |
| BorgWarner, Inc. | 90,680 | 4,086,948 |
| Canoo, Inc. *(a) | 52,776 | 423,263 |
| Cooper-Standard Holdings, Inc. * | 6,229 | 161,580 |
| Dana, Inc. | 54,187 | 1,202,409 |
| Dorman Products, Inc. * | 10,730 | 1,119,997 |
| Electric Last Mile Solutions I *(a) | 22,316 | 197,943 |
| Faraday Future Intelligent Electric, Inc. *(a) | 64,500 | 553,410 |
| Fisker, Inc. *(a) | 53,842 | 864,164 |
| Ford Motor Co. * | 1,496,055 | 25,552,619 |
| Fox Factory Holding Corp. * | 15,962 | 2,569,084 |
| Garrett Motion, Inc. * | 22,121 | 149,096 |
| General Motors Co. * | 552,405 | 30,067,404 |
| Gentex Corp. | 90,804 | 3,213,554 |
| Gentherm, Inc. * | 12,508 | 920,964 |
| Harley-Davidson, Inc. | 58,357 | 2,129,447 |
| Holley, Inc. *(a) | 14,621 | 159,369 |
| Horizon Global Corp. * | 7,908 | 58,677 |
| LCI Industries | 9,951 | 1,389,558 |
| Lear Corp. | 22,702 | 3,901,339 |
| Lordstown Motors Corp., Class A *(a) | 40,359 | 208,656 |
| Lucid Group, Inc. * | 209,811 | 7,760,909 |
| Luminar Technologies, Inc. * | 81,688 | 1,338,866 |
| Modine Manufacturing Co. * | 20,348 | 223,828 |
| Motorcar Parts of America, Inc. * | 7,218 | 136,565 |
| NII Holdings, Inc. Escrow *(b) | 28,127 | 14,063 |
| Patrick Industries, Inc. | 8,335 | 649,380 |
| QuantumScape Corp. * | 87,296 | 2,526,346 |
| Standard Motor Products, Inc. | 7,798 | 373,524 |
| Stoneridge, Inc. * | 10,196 | 193,520 |
| Strattec Security Corp. * | 1,500 | 52,005 |
| Superior Industries International, Inc. * | 10,350 | 60,340 |
| Tenneco, Inc., Class A * | 29,155 | 386,887 |
| Tesla, Inc. * | 308,675 | 343,863,950 |
| The Goodyear Tire & Rubber Co. * | 109,700 | 2,097,464 |
| Thor Industries, Inc. | 20,883 | 2,129,231 |
| Veoneer, Inc. * | 38,055 | 1,339,536 |
| Visteon Corp. * | 11,122 | 1,258,788 |
| Winnebago Industries, Inc. | 12,549 | 849,442 |
| Workhorse Group, Inc. *(a) | 45,862 | 308,651 |
| XL Fleet Corp. *(a) | 41,341 | 226,549 |
| XPEL, Inc. * | 6,154 | 467,089 |
| 467,798,634 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Banks 4.6% | ||
| 1st Constitution Bancorp | 4,287 | 101,945 |
| 1st Source Corp. | 6,601 | 318,696 |
| ACNB Corp. | 3,797 | 105,367 |
| Allegiance Bancshares, Inc. | 8,531 | 334,159 |
| Amalgamated Financial Corp. | 7,518 | 138,030 |
| Amerant Bancorp, Inc. * | 8,788 | 233,321 |
| Amerant Bancorp, Inc., Class B * | 2,215 | 55,065 |
| American National Bankshares, Inc. | 4,310 | 159,901 |
| Ameris Bancorp | 25,015 | 1,310,536 |
| Ames National Corp. | 4,056 | 100,264 |
| Arrow Financial Corp. | 6,563 | 235,284 |
| Associated Banc-Corp. | 57,902 | 1,290,057 |
| Atlantic Capital Bancshares, Inc. * | 7,985 | 219,667 |
| Atlantic Union Bankshares Corp. | 28,947 | 1,038,329 |
| Axos Financial, Inc. * | 20,608 | 1,092,224 |
| Banc of California, Inc. | 20,253 | 411,743 |
| BancFirst Corp. | 6,788 | 441,288 |
| Bank First Corp. | 2,265 | 160,792 |
| Bank of America Corp. | 2,815,823 | 134,540,023 |
| Bank of Hawaii Corp. | 15,480 | 1,308,060 |
| Bank of Marin Bancorp | 6,982 | 266,084 |
| Bank OZK | 46,239 | 2,065,496 |
| BankUnited, Inc. | 34,952 | 1,417,653 |
| Bankwell Financial Group, Inc. | 3,867 | 114,850 |
| Banner Corp. | 12,659 | 731,184 |
| Bar Harbor Bankshares | 5,502 | 163,409 |
| Baycom Corp. * | 4,870 | 91,994 |
| BCB Bancorp, Inc. | 7,033 | 106,339 |
| Berkshire Hills Bancorp, Inc. | 19,410 | 526,981 |
| Blue Foundry Bancorp * | 11,584 | 162,987 |
| Blue Ridge Bankshares, Inc. (a) | 5,700 | 104,595 |
| BOK Financial Corp. | 11,470 | 1,160,420 |
| Bridgewater Bancshares, Inc. * | 9,163 | 165,759 |
| Broadway Financial Corp. * | 15,181 | 45,239 |
| Brookline Bancorp, Inc. | 29,876 | 479,510 |
| Bryn Mawr Bank Corp. | 8,542 | 395,836 |
| Business First Bancshares, Inc. | 7,335 | 195,698 |
| Byline Bancorp, Inc. | 10,064 | 259,249 |
| C&F Financial Corp. | 1,200 | 61,404 |
| Cadence Bank | 74,400 | 2,159,094 |
| California BanCorp * | 2,455 | 43,699 |
| Cambridge Bancorp | 2,775 | 254,773 |
| Camden National Corp. | 5,912 | 281,411 |
| Capital Bancorp, Inc. | 2,904 | 73,907 |
| Capital City Bank Group, Inc. | 5,225 | 140,396 |
| Capitol Federal Financial, Inc. | 48,563 | 589,069 |
| Capstar Financial Holdings, Inc. | 7,423 | 163,083 |
| Carter Bankshares, Inc. * | 12,867 | 192,748 |
| Cathay General Bancorp | 29,945 | 1,263,380 |
| CBTX, Inc. | 7,451 | 202,667 |
| Central Pacific Financial Corp. | 10,865 | 298,679 |
| Central Valley Community Bancorp | 3,755 | 80,094 |
| Century Bancorp, Inc., Class A | 1,223 | 140,828 |
| Chemung Financial Corp. | 968 | 44,770 |
| ChoiceOne Financial Services, Inc. | 2,484 | 62,746 |
| CIT Group, Inc. | 37,490 | 1,856,880 |
79
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Citigroup, Inc. | 770,284 | 53,272,841 |
| Citizens & Northern Corp. | 5,947 | 151,708 |
| Citizens Financial Group, Inc. | 161,382 | 7,646,279 |
| City Holding Co. | 5,897 | 469,283 |
| Civista Bancshares, Inc. | 5,755 | 138,465 |
| CNB Financial Corp. | 7,060 | 181,230 |
| Coastal Financial Corp. * | 4,819 | 183,363 |
| Codorus Valley Bancorp, Inc. | 2,828 | 61,905 |
| Colony Bankcorp, Inc. | 3,982 | 74,862 |
| Columbia Banking System, Inc. | 30,223 | 1,031,511 |
| Columbia Financial, Inc. * | 17,088 | 318,179 |
| Comerica, Inc. | 51,182 | 4,355,076 |
| Commerce Bancshares, Inc. | 40,629 | 2,864,751 |
| Community Bank System, Inc. | 20,575 | 1,474,610 |
| Community Bankers Trust Corp. | 11,817 | 137,786 |
| Community Trust Bancorp, Inc. | 6,513 | 284,488 |
| ConnectOne Bancorp, Inc. | 13,027 | 439,401 |
| County Bancorp, Inc. | 1,760 | 62,304 |
| CrossFirst Bankshares, Inc. * | 17,386 | 247,403 |
| Cullen/Frost Bankers, Inc. | 21,261 | 2,753,299 |
| Customers Bancorp, Inc. * | 12,503 | 666,285 |
| CVB Financial Corp. | 48,291 | 966,786 |
| Dime Community Bancshares, Inc. | 13,235 | 472,225 |
| Eagle Bancorp, Inc. | 12,531 | 709,129 |
| East West Bancorp, Inc. | 54,105 | 4,300,265 |
| Eastern Bankshares, Inc. | 65,438 | 1,359,147 |
| Enterprise Bancorp, Inc. | 4,403 | 163,571 |
| Enterprise Financial Services Corp. | 14,212 | 668,248 |
| Equity Bancshares, Inc., Class A | 5,288 | 176,936 |
| Esquire Financial Holdings, Inc. * | 3,488 | 111,546 |
| ESSA Bancorp, Inc. | 5,910 | 96,038 |
| Essent Group Ltd. | 42,386 | 2,034,528 |
| Evans Bancorp, Inc. | 2,622 | 104,749 |
| F.N.B. Corp. | 118,931 | 1,385,546 |
| Farmers & Merchants Bancorp, Inc. | 4,577 | 116,164 |
| Farmers National Banc Corp. | 9,537 | 169,949 |
| FB Financial Corp. | 13,299 | 602,844 |
| Federal Agricultural Mortgage Corp., Class C | 3,582 | 451,654 |
| Fidelity D&D Bancorp, Inc. | 1,520 | 76,897 |
| Fifth Third Bancorp | 262,017 | 11,405,600 |
| Financial Institutions, Inc. | 6,134 | 195,797 |
| First BanCorp | 79,325 | 1,082,786 |
| First BanCorp (North Carolina) | 12,525 | 606,460 |
| First Bank | 6,451 | 97,023 |
| First Busey Corp. | 18,639 | 475,108 |
| First Business Financial Services, Inc. | 2,369 | 69,175 |
| First Capital, Inc. | 1,074 | 43,261 |
| First Citizens BancShares, Inc., Class A | 2,734 | 2,225,203 |
| First Commonwealth Financial Corp. | 36,503 | 558,496 |
| First Community Bankshares, Inc. | 6,431 | 208,493 |
| First Community Corp. | 4,537 | 91,284 |
| First Financial Bancorp | 37,574 | 893,510 |
| First Financial Bankshares, Inc. | 48,233 | 2,446,378 |
| First Financial Corp. | 4,975 | 213,179 |
| First Financial Northwest, Inc. | 5,913 | 97,565 |
| First Foundation, Inc. | 14,350 | 381,853 |
| First Hawaiian, Inc. | 48,711 | 1,343,936 |
| First Horizon Corp. | 208,746 | 3,542,420 |
| First Internet Bancorp | 3,435 | 116,927 |
| First Interstate BancSystem, Inc., Class A | 14,266 | 593,038 |
| First Merchants Corp. | 19,863 | 825,904 |
| First Mid Bancshares, Inc. | 7,244 | 312,072 |
| First Midwest Bancorp, Inc. | 42,502 | 818,163 |
| First Northwest Bancorp | 3,416 | 61,659 |
| First Republic Bank | 66,917 | 14,476,155 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| First Savings Financial Group, Inc. | 2,580 | 71,672 |
| First Western Financial, Inc. * | 2,700 | 78,354 |
| Five Star Bancorp | 2,089 | 57,280 |
| Flagstar Bancorp, Inc. | 20,153 | 951,020 |
| Flushing Financial Corp. | 11,960 | 287,279 |
| FNCB Bancorp, Inc. | 8,643 | 74,071 |
| FS Bancorp, Inc. | 3,250 | 111,995 |
| Fulton Financial Corp. | 59,859 | 963,730 |
| FVCBankcorp, Inc. * | 5,939 | 121,750 |
| German American Bancorp, Inc. | 10,374 | 408,943 |
| Glacier Bancorp, Inc. | 41,058 | 2,270,097 |
| Great Southern Bancorp, Inc. | 4,382 | 247,276 |
| Great Western Bancorp, Inc. | 20,561 | 700,102 |
| Guaranty Bancshares, Inc. | 4,636 | 174,035 |
| Hancock Whitney Corp. | 32,927 | 1,629,228 |
| Hanmi Financial Corp. | 13,526 | 300,142 |
| HarborOne Bancorp, Inc. | 21,144 | 303,839 |
| Hawthorn Bancshares, Inc. | 3,858 | 92,476 |
| HBT Financial, Inc. | 4,303 | 77,583 |
| Heartland Financial USA, Inc. | 15,629 | 783,325 |
| Heritage Commerce Corp. | 22,589 | 270,842 |
| Heritage Financial Corp. | 15,566 | 386,659 |
| Hilltop Holdings, Inc. | 24,267 | 860,022 |
| Home Bancorp, Inc. | 3,387 | 141,407 |
| Home BancShares, Inc. | 56,470 | 1,341,727 |
| HomeStreet, Inc. | 8,248 | 388,976 |
| HomeTrust Bancshares, Inc. | 6,004 | 182,522 |
| Hope Bancorp, Inc. | 44,555 | 650,057 |
| Horizon Bancorp, Inc. | 14,268 | 272,091 |
| Howard Bancorp, Inc. * | 4,800 | 99,408 |
| Huntington Bancshares, Inc. | 562,495 | 8,853,671 |
| Independent Bank Corp. | 12,865 | 1,087,092 |
| Independent Bank Corp., Michigan | 7,335 | 165,258 |
| Independent Bank Group, Inc. | 14,400 | 1,040,976 |
| International Bancshares Corp. | 20,561 | 871,786 |
| Investar Holding Corp. | 3,327 | 62,215 |
| Investors Bancorp, Inc. | 88,032 | 1,346,890 |
| JPMorgan Chase & Co. | 1,136,419 | 193,066,224 |
| Kearny Financial Corp. | 32,908 | 441,625 |
| KeyCorp | 363,600 | 8,460,972 |
| Lakeland Bancorp, Inc. | 20,073 | 360,913 |
| Lakeland Financial Corp. | 9,340 | 671,266 |
| LCNB Corp. | 4,536 | 77,339 |
| Live Oak Bancshares, Inc. | 12,040 | 1,073,727 |
| loanDepot, Inc., Class A | 7,348 | 48,203 |
| Luther Burbank Corp. | 6,821 | 98,973 |
| M&T Bank Corp. | 49,019 | 7,211,675 |
| Macatawa Bank Corp. | 11,932 | 100,229 |
| MainStreet Bancshares, Inc. * | 3,000 | 75,000 |
| Mercantile Bank Corp. | 5,614 | 192,953 |
| Merchants Bancorp | 7,072 | 314,209 |
| Meridian Bancorp, Inc. | 20,586 | 477,595 |
| Meta Financial Group, Inc. | 11,933 | 661,566 |
| Metrocity Bankshares, Inc. | 7,254 | 170,469 |
| Metropolitan Bank Holding Corp. * | 4,109 | 373,344 |
| MGIC Investment Corp. | 130,318 | 2,105,939 |
| Mid Penn Bancorp, Inc. | 3,532 | 98,967 |
| Middlefield Banc Corp. | 1,808 | 45,200 |
| Midland States Bancorp, Inc. | 9,792 | 251,263 |
| MidWestOne Financial Group, Inc. | 5,588 | 175,184 |
| Mr Cooper Group, Inc. * | 32,070 | 1,405,949 |
| MVB Financial Corp. | 4,658 | 198,850 |
| National Bank Holdings Corp., Class A | 11,252 | 487,999 |
| National Bankshares, Inc. | 2,688 | 100,128 |
| NBT Bancorp, Inc. | 16,164 | 593,057 |
| New York Community Bancorp, Inc. | 180,085 | 2,238,457 |
| Nicolet Bankshares, Inc. * | 4,155 | 298,703 |
80
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| NMI Holdings, Inc., Class A * | 32,776 | 795,801 |
| Northeast Bank | 3,473 | 114,956 |
| Northeast Community Bancorp, Inc. | 7,802 | 85,510 |
| Northfield Bancorp, Inc. | 19,213 | 337,188 |
| Northrim BanCorp, Inc. | 2,596 | 115,314 |
| Northwest Bancshares, Inc. | 50,360 | 694,968 |
| Norwood Financial Corp. | 3,216 | 84,163 |
| OceanFirst Financial Corp. | 22,818 | 505,875 |
| Ocwen Financial Corp. * | 4,590 | 144,172 |
| OFG Bancorp | 20,772 | 537,995 |
| Ohio Valley Banc Corp. | 2,640 | 73,550 |
| Old National Bancorp | 64,990 | 1,110,029 |
| Old Second Bancorp, Inc. | 10,602 | 143,551 |
| Origin Bancorp, Inc. | 9,138 | 407,555 |
| Orrstown Financial Services, Inc. | 4,618 | 109,493 |
| Pacific Premier Bancorp, Inc. | 35,380 | 1,485,606 |
| PacWest Bancorp | 43,750 | 2,076,812 |
| Park National Corp. | 5,879 | 755,981 |
| Parke Bancorp, Inc. | 4,518 | 100,164 |
| PCB Bancorp | 6,102 | 129,973 |
| PCSB Financial Corp. | 6,385 | 122,017 |
| Peapack-Gladstone Financial Corp. | 6,653 | 223,208 |
| Penns Woods Bancorp, Inc. | 2,250 | 53,550 |
| PennyMac Financial Services, Inc. | 12,693 | 787,728 |
| Peoples Bancorp, Inc. | 9,923 | 317,139 |
| Peoples Financial Services Corp. | 2,448 | 112,069 |
| People's United Financial, Inc. | 163,176 | 2,796,837 |
| Pinnacle Financial Partners, Inc. | 28,798 | 2,781,023 |
| Pioneer Bancorp, Inc. * | 1,161 | 14,698 |
| Popular, Inc. | 30,803 | 2,508,596 |
| Preferred Bank | 5,001 | 342,919 |
| Premier Financial Corp. | 13,975 | 445,523 |
| Primis Financial Corp. | 6,730 | 101,960 |
| Professional Holding Corp., Class A * | 5,294 | 99,263 |
| Prosperity Bancshares, Inc. | 35,124 | 2,645,188 |
| Provident Bancorp, Inc. | 9,235 | 166,415 |
| Provident Financial Services, Inc. | 31,084 | 769,640 |
| QCR Holdings, Inc. | 5,706 | 314,629 |
| Radian Group, Inc. | 70,023 | 1,671,449 |
| RBB Bancorp | 6,159 | 158,102 |
| Red River Bancshares, Inc. | 1,976 | 103,503 |
| Regions Financial Corp. | 362,846 | 8,592,193 |
| Reliant Bancorp, Inc. | 7,066 | 239,396 |
| Renasant Corp. | 21,908 | 819,578 |
| Republic Bancorp, Inc., Class A | 3,903 | 210,840 |
| Republic First Bancorp, Inc. * | 17,184 | 53,270 |
| Richmond Mutual BanCorp., Inc. | 4,348 | 69,133 |
| Riverview Bancorp, Inc. | 11,437 | 84,519 |
| Rocket Cos., Inc., Class A | 50,904 | 838,898 |
| S&T Bancorp, Inc. | 15,960 | 487,738 |
| Sandy Spring Bancorp, Inc. | 17,363 | 824,048 |
| Seacoast Banking Corp. of Florida | 21,410 | 779,966 |
| ServisFirst Bancshares, Inc. | 18,465 | 1,482,924 |
| Shore Bancshares, Inc. | 4,629 | 85,544 |
| Sierra Bancorp | 5,893 | 147,089 |
| Signature Bank | 22,946 | 6,833,778 |
| Silvergate Capital Corp., Class A * | 9,986 | 1,564,007 |
| Simmons First National Corp., Class A | 41,619 | 1,243,992 |
| SmartFinancial, Inc. | 5,999 | 155,914 |
| South Plains Financial, Inc. | 6,076 | 158,341 |
| Southern First Bancshares, Inc. * | 2,701 | 145,503 |
| Southern Missouri Bancorp, Inc. | 3,020 | 164,288 |
| Southside Bancshares, Inc. | 13,664 | 564,596 |
| SouthState Corp. | 26,556 | 2,073,758 |
| Spirit of Texas Bancshares, Inc. | 5,614 | 136,589 |
| Sterling Bancorp | 73,077 | 1,859,810 |
| Stock Yards Bancorp, Inc. | 9,696 | 593,880 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Summit Financial Group, Inc. | 3,433 | 86,271 |
| SVB Financial Group * | 22,330 | 16,019,542 |
| Synovus Financial Corp. | 55,075 | 2,565,944 |
| Territorial Bancorp, Inc. | 4,386 | 110,045 |
| Texas Capital Bancshares, Inc. * | 19,288 | 1,168,853 |
| TFS Financial Corp. | 19,389 | 377,310 |
| The Bancorp, Inc. * | 21,989 | 671,764 |
| The Bank of Princeton | 1,521 | 46,056 |
| The Community Financial Corp. | 1,951 | 74,372 |
| The First BanCorp, Inc. | 3,885 | 115,268 |
| The First Bancshares, Inc. | 7,804 | 314,111 |
| The First of Long Island Corp. | 9,143 | 184,049 |
| The Hingham Institution For Savings | 701 | 253,229 |
| The PNC Financial Services Group, Inc. | 161,417 | 34,063,830 |
| Timberland Bancorp, Inc. | 4,336 | 120,324 |
| Tompkins Financial Corp. | 4,546 | 373,272 |
| Towne Bank | 26,093 | 822,451 |
| TriCo Bancshares | 11,458 | 502,204 |
| TriState Capital Holdings, Inc. * | 10,371 | 311,649 |
| Triumph Bancorp, Inc. * | 9,306 | 1,091,594 |
| Truist Financial Corp. | 506,925 | 32,174,530 |
| TrustCo Bank Corp. | 7,340 | 246,330 |
| Trustmark Corp. | 23,087 | 734,397 |
| U.S. Bancorp | 512,408 | 30,934,071 |
| UMB Financial Corp. | 16,558 | 1,636,262 |
| Umpqua Holdings Corp. | 86,319 | 1,765,224 |
| Union Bankshares, Inc. | 1,200 | 38,400 |
| United Bankshares, Inc. | 49,264 | 1,822,275 |
| United Community Banks, Inc. | 34,512 | 1,202,398 |
| Univest Financial Corp. | 11,205 | 321,584 |
| UWM Holdings Corp. (a) | 36,026 | 244,977 |
| Valley National Bancorp | 157,900 | 2,093,754 |
| Velocity Financial, Inc. * | 3,730 | 47,931 |
| Veritex Holdings, Inc. | 20,134 | 824,487 |
| Virginia National Bankshares Corp. | 2,875 | 101,603 |
| Walker & Dunlop, Inc. | 11,239 | 1,461,857 |
| Washington Federal, Inc. | 26,538 | 938,384 |
| Washington Trust Bancorp, Inc. | 6,472 | 353,760 |
| Waterstone Financial, Inc. | 11,467 | 237,023 |
| Webster Financial Corp. | 33,810 | 1,892,008 |
| Wells Fargo & Co. | 1,561,464 | 79,884,498 |
| WesBanco, Inc. | 25,094 | 872,518 |
| West Bancorp, Inc. | 6,313 | 200,122 |
| Westamerica Bancorp | 10,218 | 569,756 |
| Western Alliance Bancorp | 39,753 | 4,614,926 |
| Western New England Bancorp, Inc. | 10,349 | 100,696 |
| Wintrust Financial Corp. | 21,625 | 1,913,812 |
| WSFS Financial Corp. | 18,015 | 933,357 |
| Zions Bancorp NA | 61,675 | 3,884,908 |
| 831,393,822 | ||
| Capital Goods 5.8% | ||
| 3M Co. | 220,245 | 39,353,377 |
| A.O. Smith Corp. | 51,040 | 3,729,493 |
| AAON, Inc. | 15,628 | 1,119,746 |
| AAR Corp. * | 12,256 | 433,495 |
| Acuity Brands, Inc. | 13,595 | 2,792,821 |
| Advanced Drainage Systems, Inc. | 21,372 | 2,410,762 |
| Advent Technologies Holdings, Inc. * | 14,101 | 135,229 |
| AECOM * | 54,937 | 3,756,043 |
| Aerojet Rocketdyne Holdings, Inc. | 28,656 | 1,261,151 |
| AeroVironment, Inc. * | 8,555 | 762,336 |
| AGCO Corp. | 23,601 | 2,884,278 |
| AgEagle Aerial Systems, Inc. *(a) | 34,491 | 98,989 |
| Agrify Corp. * | 6,729 | 107,664 |
| Air Lease Corp. | 41,667 | 1,668,763 |
81
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Alamo Group, Inc. | 3,646 | 551,275 |
| Albany International Corp., Class A | 12,501 | 1,008,206 |
| Allegion plc | 34,027 | 4,365,664 |
| Allied Motion Technologies, Inc. | 5,231 | 183,870 |
| Allison Transmission Holdings, Inc. | 39,464 | 1,316,519 |
| Alpha Pro Tech Ltd. *(a) | 4,213 | 25,362 |
| Alta Equipment Group, Inc. * | 12,019 | 173,434 |
| Altra Industrial Motion Corp. | 24,666 | 1,286,332 |
| Ameresco, Inc., Class A * | 12,448 | 1,022,354 |
| American Superconductor Corp. * | 9,332 | 171,522 |
| American Woodmark Corp. * | 6,339 | 435,743 |
| AMETEK, Inc. | 87,913 | 11,639,681 |
| API Group Corp. * | 73,536 | 1,601,614 |
| Apogee Enterprises, Inc. | 9,481 | 397,538 |
| Applied Industrial Technologies, Inc. | 15,114 | 1,473,313 |
| Arcosa, Inc. | 18,167 | 939,779 |
| Argan, Inc. | 6,506 | 268,438 |
| Armstrong Flooring, Inc. * | 7,547 | 21,433 |
| Armstrong World Industries, Inc. | 18,004 | 1,902,123 |
| Array Technologies, Inc. * | 46,922 | 1,001,785 |
| Astec Industries, Inc. | 9,069 | 484,103 |
| Astra Space, Inc. *(a) | 47,686 | 464,462 |
| Astronics Corp. * | 9,549 | 123,182 |
| Atkore, Inc. * | 17,950 | 1,696,813 |
| Ault Global Holdings, Inc. * | 11,756 | 27,274 |
| Axon Enterprise, Inc. * | 24,985 | 4,496,301 |
| AZZ, Inc. | 10,075 | 535,285 |
| Babcock & Wilcox Enterprises, Inc. * | 19,797 | 135,214 |
| Barnes Group, Inc. | 17,834 | 747,958 |
| Beacon Roofing Supply, Inc. * | 20,705 | 1,094,673 |
| Beam Global *(a) | 3,328 | 104,832 |
| Berkshire Grey, Inc. *(a) | 16,368 | 112,939 |
| Blink Charging Co. *(a) | 13,796 | 438,713 |
| Bloom Energy Corp., Class A * | 57,743 | 1,805,046 |
| Blue Bird Corp. * | 6,024 | 118,131 |
| BlueLinx Holdings, Inc. * | 3,850 | 183,376 |
| Boise Cascade Co. | 14,885 | 842,789 |
| Builders FirstSource, Inc. * | 78,729 | 4,587,539 |
| BWX Technologies, Inc. | 36,670 | 2,080,656 |
| Byrna Technologies, Inc. *(a) | 5,967 | 100,544 |
| CAI International, Inc. | 5,777 | 323,108 |
| Carlisle Cos., Inc. | 19,798 | 4,413,370 |
| Carrier Global Corp. | 329,997 | 17,235,743 |
| Caterpillar, Inc. | 208,209 | 42,476,718 |
| ChargePoint Holdings, Inc. * | 64,611 | 1,601,061 |
| Chart Industries, Inc. * | 13,627 | 2,419,065 |
| CIRCOR International, Inc. * | 7,526 | 214,792 |
| Colfax Corp. * | 49,665 | 2,563,707 |
| Columbus McKinnon Corp. | 10,997 | 519,828 |
| Comfort Systems USA, Inc. | 13,501 | 1,234,936 |
| Commercial Vehicle Group, Inc. * | 13,417 | 134,707 |
| Concrete Pumping Holdings, Inc. * | 13,082 | 112,505 |
| Construction Partners, Inc., Class A * | 14,158 | 504,166 |
| Core & Main, Inc., Class A * | 13,471 | 368,567 |
| Cornerstone Building Brands, Inc. * | 21,134 | 302,428 |
| Crane Co. | 19,520 | 2,016,026 |
| CSW Industrials, Inc. | 6,027 | 835,463 |
| Cummins, Inc. | 54,703 | 13,119,968 |
| Curtiss-Wright Corp. | 15,330 | 1,957,334 |
| Custom Truck One Source, Inc. *(a) | 20,729 | 187,597 |
| Deere & Co. | 107,893 | 36,932,853 |
| Desktop Metal, Inc., Class A * | 55,362 | 386,980 |
| Donaldson Co., Inc. | 47,524 | 2,851,915 |
| Douglas Dynamics, Inc. | 8,714 | 368,602 |
| Dover Corp. | 54,663 | 9,242,420 |
| Ducommun, Inc. * | 4,035 | 195,254 |
| DXP Enterprises, Inc. * | 8,428 | 277,787 |
| Dycom Industries, Inc. * | 11,639 | 924,369 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Eaton Corp. plc | 151,475 | 24,957,021 |
| EMCOR Group, Inc. | 20,130 | 2,445,594 |
| Emerson Electric Co. | 227,225 | 22,043,097 |
| Encore Wire Corp. | 7,614 | 1,020,733 |
| Energous Corp. *(a) | 37,690 | 72,365 |
| Energy Recovery, Inc. * | 14,554 | 295,737 |
| Enerpac Tool Group Corp. | 24,373 | 509,152 |
| EnerSys | 16,219 | 1,298,169 |
| Enovix Corp. * | 37,066 | 978,542 |
| EnPro Industries, Inc. | 7,650 | 685,899 |
| Eos Energy Enterprises, Inc. *(a) | 16,536 | 174,455 |
| ESCO Technologies, Inc. | 10,544 | 891,601 |
| Evoqua Water Technologies Corp. * | 46,148 | 1,930,371 |
| Fastenal Co. | 218,368 | 12,464,445 |
| Federal Signal Corp. | 23,693 | 1,014,297 |
| Flowserve Corp. | 49,131 | 1,651,784 |
| Fluor Corp. * | 53,794 | 1,045,755 |
| Fortive Corp. | 136,517 | 10,335,702 |
| Fortune Brands Home & Security, Inc. | 52,427 | 5,316,098 |
| Franklin Electric Co., Inc. | 15,234 | 1,315,913 |
| FTC Solar, Inc. * | 7,870 | 75,080 |
| FuelCell Energy, Inc. * | 125,068 | 999,293 |
| Gates Industrial Corp. plc * | 35,231 | 579,198 |
| GATX Corp. | 13,363 | 1,267,481 |
| Generac Holdings, Inc. * | 23,975 | 11,952,976 |
| General Dynamics Corp. | 88,019 | 17,845,852 |
| General Electric Co. | 418,074 | 43,843,420 |
| Gibraltar Industries, Inc. * | 12,898 | 840,434 |
| Global Industrial Co. | 5,824 | 236,338 |
| GMS, Inc. * | 16,618 | 823,090 |
| Graco, Inc. | 64,773 | 4,869,634 |
| GrafTech International Ltd. | 81,844 | 875,731 |
| Granite Construction, Inc. | 17,068 | 633,564 |
| Great Lakes Dredge & Dock Corp. * | 25,323 | 385,416 |
| Griffon Corp. | 19,214 | 508,979 |
| H&E Equipment Services, Inc. | 11,492 | 518,059 |
| HEICO Corp. | 15,992 | 2,229,125 |
| HEICO Corp., Class A | 28,553 | 3,588,541 |
| Helios Technologies, Inc. | 12,397 | 1,128,747 |
| Herc Holdings, Inc. | 9,347 | 1,701,528 |
| Hexcel Corp. * | 31,786 | 1,803,538 |
| Hillenbrand, Inc. | 28,396 | 1,290,882 |
| Hillman Solutions Corp. * | 38,631 | 423,782 |
| Honeywell International, Inc. | 262,398 | 57,365,451 |
| Howmet Aerospace, Inc. | 145,882 | 4,331,237 |
| Hubbell, Inc. | 20,821 | 4,151,083 |
| Huntington Ingalls Industries, Inc. | 15,221 | 3,085,753 |
| Hurco Cos., Inc. | 3,214 | 104,294 |
| Huttig Building Products, Inc. * | 8,502 | 60,789 |
| Hydrofarm Holdings Group, Inc. * | 13,508 | 445,359 |
| Hyliion Holdings Corp. *(a) | 43,572 | 352,497 |
| Hyster-Yale Materials Handling, Inc. | 3,600 | 172,944 |
| Hyzon Motors, Inc. *(a) | 34,280 | 178,599 |
| Ideal Power, Inc. * | 3,238 | 45,008 |
| IDEX Corp. | 28,904 | 6,433,163 |
| IES Holdings, Inc. * | 3,807 | 189,779 |
| Illinois Tool Works, Inc. | 108,794 | 24,790,889 |
| Infrastructure and Energy Alternatives, Inc. * | 11,142 | 123,342 |
| Ingersoll Rand, Inc. * | 154,307 | 8,295,544 |
| INNOVATE Corp. * | 23,119 | 91,320 |
| Insteel Industries, Inc. | 7,172 | 291,685 |
| ITT, Inc. | 32,393 | 3,047,210 |
| Janus International Group, Inc. * | 21,097 | 294,725 |
| JELD-WEN Holding, Inc. * | 34,891 | 956,362 |
| John Bean Technologies Corp. | 12,015 | 1,775,216 |
| Johnson Controls International plc | 270,416 | 19,840,422 |
| Kadant, Inc. | 4,434 | 984,880 |
82
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Kaman Corp. | 10,367 | 371,035 |
| Kennametal, Inc. | 32,058 | 1,274,305 |
| Kratos Defense & Security Solutions, Inc. * | 49,013 | 1,048,388 |
| KULR Technology Group, Inc. *(a) | 32,998 | 98,004 |
| L.B. Foster Co., Class A * | 3,200 | 50,976 |
| L3Harris Technologies, Inc. | 76,400 | 17,613,256 |
| Lawson Products, Inc. * | 4,091 | 207,414 |
| Lennox International, Inc. | 13,034 | 3,900,816 |
| Lightning eMotors, Inc. *(a) | 12,049 | 99,163 |
| Lincoln Electric Holdings, Inc. | 22,474 | 3,200,298 |
| Lindsay Corp. | 4,022 | 585,885 |
| LiqTech International, Inc. * | 5,399 | 28,561 |
| Lockheed Martin Corp. | 93,613 | 31,109,472 |
| LSI Industries, Inc. | 8,731 | 64,959 |
| Markforged Holding Corp. *(a) | 26,794 | 176,572 |
| Masco Corp. | 93,617 | 6,136,594 |
| Masonite International Corp. * | 9,341 | 1,121,013 |
| MasTec, Inc. * | 21,462 | 1,912,908 |
| Matrix Service Co. * | 10,847 | 110,965 |
| Maxar Technologies, Inc. | 27,274 | 724,125 |
| Mayville Engineering Co., Inc. * | 3,327 | 59,088 |
| McGrath RentCorp | 9,056 | 653,300 |
| Mercury Systems, Inc. * | 21,381 | 1,101,977 |
| Meritor, Inc. * | 27,423 | 667,476 |
| Microvast Holdings, Inc. *(a) | 89,000 | 752,940 |
| Miller Industries, Inc. | 4,490 | 162,269 |
| Momentus, Inc. *(a) | 21,399 | 230,895 |
| Moog, Inc., Class A | 11,760 | 888,233 |
| MRC Global, Inc. * | 22,113 | 183,538 |
| MSC Industrial Direct Co., Inc., Class A | 17,553 | 1,475,681 |
| Mueller Industries, Inc. | 22,783 | 1,199,297 |
| Mueller Water Products, Inc., Class A | 58,841 | 965,581 |
| MYR Group, Inc. * | 6,529 | 666,937 |
| National Presto Industries, Inc. | 2,089 | 173,700 |
| Nikola Corp. *(a) | 77,188 | 910,818 |
| NN, Inc. * | 15,065 | 75,174 |
| Nordson Corp. | 20,464 | 5,202,153 |
| Northrop Grumman Corp. | 57,269 | 20,457,632 |
| Northwest Pipe Co. * | 4,179 | 99,293 |
| NOW, Inc. * | 46,130 | 333,059 |
| Nuvve Holding Corp. *(a) | 5,571 | 67,910 |
| NV5 Global, Inc. * | 4,333 | 451,195 |
| nVent Electric plc | 64,729 | 2,294,643 |
| Ocean Power Technologies, Inc. *(a) | 12,445 | 26,508 |
| Omega Flex, Inc. | 1,422 | 205,849 |
| Orbital Energy Group, Inc. *(a) | 25,895 | 69,140 |
| Orion Energy Systems, Inc. * | 9,048 | 37,006 |
| Orion Group Holdings, Inc. * | 8,139 | 36,219 |
| Oshkosh Corp. | 25,912 | 2,772,584 |
| Otis Worldwide Corp. | 161,985 | 13,009,015 |
| Owens Corning | 39,293 | 3,670,359 |
| PACCAR, Inc. | 131,947 | 11,825,090 |
| PAE, Inc. * | 24,377 | 241,820 |
| Park Aerospace Corp. | 10,896 | 142,629 |
| Parker-Hannifin Corp. | 49,029 | 14,541,511 |
| Park-Ohio Holdings Corp. | 3,600 | 83,952 |
| Parsons Corp. * | 10,826 | 375,013 |
| Pentair plc | 62,824 | 4,647,091 |
| PGT Innovations, Inc. * | 21,819 | 465,836 |
| Plug Power, Inc. * | 197,180 | 7,546,079 |
| Powell Industries, Inc. | 4,706 | 121,697 |
| Preformed Line Products Co. | 1,000 | 69,400 |
| Primoris Services Corp. | 21,195 | 571,205 |
| Proterra, Inc. * | 68,674 | 769,836 |
| Proto Labs, Inc. * | 10,595 | 633,687 |
| Quanex Building Products Corp. | 12,035 | 249,365 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Quanta Services, Inc. | 52,918 | 6,417,895 |
| Raven Industries, Inc. * | 13,429 | 776,465 |
| Raytheon Technologies Corp. | 573,044 | 50,920,690 |
| RBC Bearings, Inc. * | 10,688 | 2,500,244 |
| Regal Rexnord Corp. | 25,555 | 3,892,793 |
| Resideo Technologies, Inc. * | 54,047 | 1,332,799 |
| REV Group, Inc. | 13,252 | 200,238 |
| Rockwell Automation, Inc. | 44,081 | 14,079,471 |
| Romeo Power, Inc. *(a) | 33,185 | 144,023 |
| Roper Technologies, Inc. | 40,064 | 19,546,024 |
| Rush Enterprises, Inc., Class A | 16,089 | 837,915 |
| Rush Enterprises, Inc., Class B | 2,625 | 135,739 |
| Sensata Technologies Holding plc * | 60,546 | 3,336,085 |
| Shoals Technologies Group, Inc., Class A * | 38,571 | 1,195,315 |
| Simpson Manufacturing Co., Inc. | 16,307 | 1,730,010 |
| SiteOne Landscape Supply, Inc. * | 17,044 | 4,004,658 |
| Snap-on, Inc. | 20,554 | 4,177,189 |
| Spirit AeroSystems Holdings, Inc., Class A | 41,220 | 1,701,974 |
| SPX Corp. * | 18,132 | 1,053,288 |
| SPX FLOW, Inc. | 16,139 | 1,205,745 |
| Standex International Corp. | 4,538 | 504,943 |
| Stanley Black & Decker, Inc. | 61,981 | 11,139,845 |
| Stem, Inc. * | 43,717 | 1,036,530 |
| Sterling Construction Co., Inc. * | 11,440 | 275,018 |
| Sunrun, Inc. * | 78,921 | 4,552,163 |
| Sunworks, Inc. *(a) | 8,821 | 53,543 |
| Tecnoglass, Inc. | 7,327 | 211,604 |
| Tennant Co. | 7,027 | 558,365 |
| Terex Corp. | 26,345 | 1,180,256 |
| Textron, Inc. | 85,173 | 6,290,026 |
| The AZEK Co., Inc. * | 42,325 | 1,552,904 |
| The Boeing Co. * | 209,723 | 43,418,953 |
| The Eastern Co. | 3,338 | 80,212 |
| The ExOne Co. * | 7,048 | 162,245 |
| The Gorman-Rupp Co. | 9,748 | 414,485 |
| The Greenbrier Cos., Inc. | 12,151 | 498,434 |
| The Manitowoc Co., Inc. * | 12,331 | 264,253 |
| The Middleby Corp. * | 21,172 | 3,862,620 |
| The Shyft Group, Inc. | 11,994 | 494,273 |
| The Timken Co. | 26,972 | 1,913,663 |
| The Toro Co. | 40,639 | 3,879,805 |
| Thermon Group Holdings, Inc. * | 14,218 | 245,687 |
| Titan International, Inc. * | 18,640 | 134,581 |
| Titan Machinery, Inc. * | 7,620 | 216,560 |
| TPI Composites, Inc. * | 14,248 | 479,160 |
| Trane Technologies plc | 90,410 | 16,357,881 |
| Transcat, Inc. * | 2,925 | 219,024 |
| TransDigm Group, Inc. * | 19,893 | 12,409,651 |
| Trex Co., Inc. * | 43,790 | 4,659,256 |
| Trinity Industries, Inc. | 32,522 | 912,242 |
| Triton International Ltd. | 25,976 | 1,615,447 |
| Triumph Group, Inc. * | 27,104 | 554,277 |
| Tutor Perini Corp. * | 16,006 | 218,002 |
| Twin Disc, Inc. * | 3,405 | 46,240 |
| UFP Industries, Inc. | 23,015 | 1,883,317 |
| United Rentals, Inc. * | 27,497 | 10,424,388 |
| Univar Solutions, Inc. * | 66,123 | 1,691,426 |
| Valmont Industries, Inc. | 7,930 | 1,894,953 |
| Vectrus, Inc. * | 4,452 | 215,610 |
| Veritiv Corp. * | 5,354 | 574,324 |
| Vertiv Holdings Co. | 106,259 | 2,728,731 |
| Vicor Corp. * | 8,076 | 1,224,241 |
| View, Inc. *(a) | 23,483 | 125,399 |
| Virgin Galactic Holdings, Inc. *(a) | 67,006 | 1,256,362 |
| W.W. Grainger, Inc. | 16,571 | 7,674,196 |
| Wabash National Corp. | 19,725 | 306,329 |
83
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Watsco, Inc. | 12,606 | 3,650,445 |
| Watts Water Technologies, Inc., Class A | 10,468 | 1,989,129 |
| Welbilt, Inc. * | 48,791 | 1,154,395 |
| WESCO International, Inc. * | 16,917 | 2,191,767 |
| Westinghouse Air Brake Technologies Corp. | 71,965 | 6,529,384 |
| Westwater Resources, Inc. * | 9,561 | 30,308 |
| Williams Industrial Services Group, Inc. * | 7,962 | 35,112 |
| WillScot Mobile Mini Holdings Corp. * | 86,044 | 2,990,029 |
| Woodward, Inc. | 24,456 | 2,762,305 |
| Xylem, Inc. | 68,445 | 8,938,233 |
| Zurn Water Solutions Corp. | 45,482 | 1,650,087 |
| 1,053,015,767 | ||
| Commercial & Professional Services 1.2% | ||
| ABM Industries, Inc. | 25,627 | 1,127,844 |
| Acacia Research Corp. * | 22,984 | 131,698 |
| ACCO Brands Corp. | 34,735 | 287,258 |
| ACV Auctions, Inc., Class A * | 17,855 | 347,637 |
| ADT, Inc. | 54,846 | 457,964 |
| Alight, Inc., Class A * | 93,659 | 1,019,010 |
| Aqua Metals, Inc. * | 23,651 | 41,153 |
| ARC Document Solutions, Inc. | 19,042 | 57,697 |
| ASGN, Inc. * | 20,267 | 2,425,149 |
| Atlas Technical Consultants, Inc. * | 9,570 | 97,518 |
| Barrett Business Services, Inc. | 3,084 | 252,888 |
| BGSF, Inc. | 5,301 | 63,771 |
| Booz Allen Hamilton Holding Corp. | 51,509 | 4,474,072 |
| Brady Corp., Class A | 18,031 | 939,235 |
| BrightView Holdings, Inc. * | 21,214 | 336,454 |
| CACI International, Inc., Class A * | 9,014 | 2,592,787 |
| Casella Waste Systems, Inc., Class A * | 19,326 | 1,675,951 |
| CBIZ, Inc. * | 21,051 | 772,782 |
| CECO Environmental Corp. * | 14,190 | 97,627 |
| Charah Solutions, Inc. *(a) | 11,089 | 52,451 |
| Cimpress plc * | 7,264 | 648,820 |
| Cintas Corp. | 33,284 | 14,415,300 |
| Clarivate plc * | 142,521 | 3,342,117 |
| Clean Harbors, Inc. * | 18,853 | 2,121,717 |
| Copart, Inc. * | 81,064 | 12,588,429 |
| CoreCivic, Inc. * | 45,253 | 389,628 |
| CoStar Group, Inc. * | 150,469 | 12,947,857 |
| Covanta Holding Corp. | 44,230 | 892,561 |
| CRA International, Inc. | 2,770 | 304,201 |
| Deluxe Corp. | 16,881 | 602,145 |
| DLH Holdings Corp. * | 3,968 | 60,393 |
| Driven Brands Holdings, Inc. * | 21,293 | 691,384 |
| Dun & Bradstreet Holdings, Inc. * | 57,481 | 1,082,942 |
| Ennis, Inc. | 10,997 | 208,283 |
| Equifax, Inc. | 46,354 | 12,859,990 |
| Exponent, Inc. | 19,984 | 2,294,163 |
| First Advantage Corp. * | 10,014 | 187,262 |
| Forrester Research, Inc. * | 4,362 | 232,277 |
| Franklin Covey Co. * | 4,428 | 187,083 |
| FTI Consulting, Inc. * | 12,929 | 1,860,742 |
| Harsco Corp. * | 30,582 | 522,952 |
| Healthcare Services Group, Inc. | 30,421 | 583,779 |
| Heidrick & Struggles International, Inc. | 7,278 | 341,193 |
| Heritage-Crystal Clean, Inc. * | 7,053 | 244,528 |
| Herman Miller, Inc. | 29,203 | 1,136,581 |
| Hill International, Inc. * | 27,687 | 56,481 |
| HNI Corp. | 16,462 | 615,679 |
| Huron Consulting Group, Inc. * | 8,402 | 421,444 |
| IAA, Inc. * | 51,746 | 3,086,649 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| ICF International, Inc. | 6,209 | 623,942 |
| IHS Markit Ltd. | 151,308 | 19,778,982 |
| Insperity, Inc. | 13,518 | 1,689,750 |
| Interface, Inc. | 23,118 | 331,974 |
| Jacobs Engineering Group, Inc. | 49,598 | 6,964,551 |
| KAR Auction Services, Inc. * | 45,455 | 666,825 |
| KBR, Inc. | 53,502 | 2,270,625 |
| Kelly Services, Inc., Class A | 16,321 | 294,268 |
| Kforce, Inc. | 8,027 | 519,829 |
| Kimball International, Inc., Class B | 14,978 | 162,811 |
| Korn Ferry | 21,209 | 1,637,547 |
| LegalZoom.com, Inc. *(a) | 7,386 | 207,103 |
| Leidos Holdings, Inc. | 54,115 | 5,410,418 |
| ManpowerGroup, Inc. | 20,369 | 1,968,664 |
| ManTech International Corp., Class A | 11,118 | 958,594 |
| Matthews International Corp., Class A | 11,787 | 405,119 |
| Mistras Group, Inc. * | 7,028 | 69,015 |
| Montrose Environmental Group, Inc. * | 10,253 | 702,843 |
| MSA Safety, Inc. | 13,794 | 2,110,896 |
| Nielsen Holdings plc | 135,618 | 2,746,265 |
| Performant Financial Corp. * | 14,263 | 42,932 |
| Pitney Bowes, Inc. | 64,043 | 444,458 |
| Quad Graphics, Inc. * | 9,800 | 38,612 |
| Red Violet, Inc. *(a) | 3,264 | 103,958 |
| Republic Services, Inc. | 79,773 | 10,737,446 |
| Resources Connection, Inc. | 11,300 | 196,733 |
| Robert Half International, Inc. | 42,446 | 4,799,369 |
| Rollins, Inc. | 86,634 | 3,052,116 |
| RR Donnelley & Sons Co. * | 28,845 | 184,608 |
| Science Applications International Corp. | 22,398 | 2,010,892 |
| Skillsoft Corp. *(a) | 26,828 | 325,424 |
| SP Plus Corp. * | 8,482 | 273,545 |
| Steelcase, Inc., Class A | 35,546 | 422,997 |
| Stericycle, Inc. * | 35,268 | 2,360,135 |
| Team, Inc. * | 12,824 | 31,034 |
| Tetra Tech, Inc. | 20,703 | 3,636,689 |
| The Brink's Co. | 18,746 | 1,291,225 |
| TransUnion | 72,621 | 8,372,475 |
| TriNet Group, Inc. * | 15,420 | 1,561,275 |
| TrueBlue, Inc. * | 12,955 | 360,797 |
| U.S. Ecology, Inc. * | 11,833 | 380,904 |
| UniFirst Corp. | 5,851 | 1,158,264 |
| Upwork, Inc. * | 45,140 | 2,126,997 |
| Verisk Analytics, Inc. | 61,387 | 12,907,845 |
| Viad Corp. * | 8,115 | 360,063 |
| Vidler Water Resouces, Inc. * | 7,559 | 93,429 |
| VSE Corp. | 3,786 | 210,312 |
| Waste Management, Inc. | 147,043 | 23,560,700 |
| Willdan Group, Inc. * | 4,309 | 144,050 |
| 222,886,831 | ||
| Consumer Durables & Apparel 1.5% | ||
| Acushnet Holdings Corp. | 13,529 | 689,167 |
| American Outdoor Brands, Inc. * | 6,310 | 143,742 |
| AMMO, Inc. *(a) | 29,714 | 179,473 |
| Aterian, Inc. *(a) | 10,569 | 67,536 |
| Bassett Furniture Industries, Inc. | 3,697 | 62,442 |
| Beazer Homes USA, Inc. * | 12,288 | 222,536 |
| Brunswick Corp. | 29,281 | 2,725,768 |
| Callaway Golf Co. * | 44,908 | 1,214,761 |
| Capri Holdings Ltd. * | 58,515 | 3,115,339 |
| Carter's, Inc. | 17,146 | 1,689,224 |
| Casper Sleep, Inc. * | 8,500 | 30,940 |
| Cavco Industries, Inc. * | 3,173 | 762,726 |
| Century Communities, Inc. | 10,858 | 728,137 |
| Clarus Corp. | 9,942 | 274,200 |
84
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Columbia Sportswear Co. | 13,200 | 1,370,688 |
| Cricut, Inc., Class A * | 9,353 | 264,970 |
| Crocs, Inc. * | 23,854 | 3,851,228 |
| D.R. Horton, Inc. | 123,695 | 11,042,253 |
| Deckers Outdoor Corp. * | 10,542 | 4,167,358 |
| Delta Apparel, Inc. * | 1,907 | 51,203 |
| Dream Finders Homes, Inc., Class A *(a) | 7,252 | 115,089 |
| Escalade, Inc. | 3,955 | 73,998 |
| Ethan Allen Interiors, Inc. | 8,881 | 206,128 |
| Flexsteel Industries, Inc. | 2,656 | 74,368 |
| Fossil Group, Inc. * | 18,877 | 223,126 |
| Garmin Ltd. | 57,755 | 8,293,618 |
| Genius Brands International, Inc. *(a) | 106,285 | 147,736 |
| G-III Apparel Group Ltd. * | 16,742 | 479,826 |
| GoPro, Inc., Class A * | 47,986 | 413,159 |
| Green Brick Partners, Inc. * | 18,657 | 486,015 |
| Hanesbrands, Inc. | 132,414 | 2,256,335 |
| Hasbro, Inc. | 49,214 | 4,712,733 |
| Hayward Holdings, Inc. * | 15,316 | 355,178 |
| Helen of Troy Ltd. * | 9,203 | 2,070,215 |
| Hooker Furnishings Corp. | 5,242 | 132,151 |
| Hovnanian Enterprises, Inc., Class A * | 1,584 | 133,468 |
| Installed Building Products, Inc. | 8,891 | 1,129,602 |
| iRobot Corp. * | 10,794 | 900,435 |
| JAKKS Pacific, Inc. * | 3,907 | 40,984 |
| Johnson Outdoors, Inc., Class A | 2,877 | 305,480 |
| KB Home | 33,928 | 1,362,209 |
| Kontoor Brands, Inc. | 19,047 | 1,009,491 |
| Koss Corp. * | 1,602 | 25,920 |
| Lakeland Industries, Inc. * | 3,608 | 75,443 |
| Latham Group, Inc. * | 7,587 | 116,840 |
| La-Z-Boy, Inc. | 18,743 | 623,017 |
| Legacy Housing Corp. * | 5,786 | 102,702 |
| Leggett & Platt, Inc. | 51,147 | 2,396,237 |
| Lennar Corp., Class A | 109,425 | 10,934,840 |
| Levi Strauss & Co., Class A | 34,851 | 912,399 |
| LGI Homes, Inc. * | 8,373 | 1,250,089 |
| Lifetime Brands, Inc. | 5,000 | 84,800 |
| Lululemon Athletica, Inc. * | 45,059 | 20,997,945 |
| M.D.C. Holdings, Inc. | 21,303 | 1,043,421 |
| M/I Homes, Inc. * | 10,732 | 614,514 |
| Malibu Boats, Inc., Class A * | 7,676 | 542,002 |
| MasterCraft Boat Holdings, Inc. * | 6,845 | 183,309 |
| Mattel, Inc. * | 132,460 | 2,888,953 |
| Meritage Homes Corp. * | 14,308 | 1,555,423 |
| Mohawk Industries, Inc. * | 21,035 | 3,727,612 |
| Movado Group, Inc. | 6,936 | 230,969 |
| Nautilus, Inc. * | 11,457 | 117,205 |
| Newell Brands, Inc. | 143,266 | 3,279,359 |
| NIKE, Inc., Class B | 485,873 | 81,281,694 |
| NVR, Inc. * | 1,273 | 6,231,080 |
| Oxford Industries, Inc. | 5,889 | 546,028 |
| Peloton Interactive, Inc., Class A * | 102,215 | 9,346,540 |
| PLBY Group, Inc. *(a) | 8,521 | 239,270 |
| Polaris, Inc. | 21,821 | 2,508,324 |
| PulteGroup, Inc. | 98,438 | 4,732,899 |
| Purple Innovation, Inc. * | 21,057 | 406,400 |
| PVH Corp. * | 27,417 | 2,997,501 |
| Ralph Lauren Corp. | 18,549 | 2,358,876 |
| Rocky Brands, Inc. | 2,734 | 149,140 |
| Skechers U.S.A., Inc., Class A * | 51,101 | 2,361,377 |
| Skyline Champion Corp. * | 19,567 | 1,238,982 |
| Smith & Wesson Brands, Inc. | 17,363 | 373,304 |
| Snap One Holdings Corp. *(a) | 5,366 | 78,344 |
| Sonos, Inc. * | 46,876 | 1,529,095 |
| Steven Madden Ltd. | 29,122 | 1,313,402 |
| Sturm, Ruger & Co., Inc. | 6,545 | 516,270 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Superior Group of Cos., Inc. | 5,398 | 140,294 |
| Tapestry, Inc. | 106,776 | 4,162,128 |
| Taylor Morrison Home Corp. * | 47,220 | 1,441,627 |
| Tempur Sealy International, Inc. | 75,020 | 3,336,139 |
| The Lovesac Co. * | 5,293 | 412,907 |
| Toll Brothers, Inc. | 43,656 | 2,626,782 |
| TopBuild Corp. * | 12,471 | 3,204,673 |
| Traeger, Inc. *(a) | 8,943 | 168,933 |
| Tri Pointe Homes, Inc. * | 43,642 | 1,055,700 |
| Tupperware Brands Corp. * | 19,332 | 429,944 |
| Under Armour, Inc., Class A * | 72,470 | 1,591,441 |
| Under Armour, Inc., Class C * | 77,033 | 1,454,383 |
| Unifi, Inc. * | 5,771 | 138,619 |
| Universal Electronics, Inc. * | 5,443 | 224,143 |
| Vera Bradley, Inc. * | 9,821 | 96,344 |
| VF Corp. | 123,728 | 9,017,297 |
| Vinco Ventures, Inc. *(a) | 20,200 | 102,414 |
| Vista Outdoor, Inc. * | 21,140 | 884,498 |
| Vizio Holding Corp., Class A *(a) | 4,623 | 94,956 |
| VOXX International Corp. * | 5,522 | 62,454 |
| Vuzix Corp. *(a) | 21,146 | 226,051 |
| Weber, Inc., Class A *(a) | 6,753 | 112,505 |
| Whirlpool Corp. | 23,719 | 5,000,677 |
| Wolverine World Wide, Inc. | 31,260 | 1,036,894 |
| YETI Holdings, Inc. * | 33,387 | 3,282,944 |
| 267,791,307 | ||
| Consumer Services 2.2% | ||
| 2U, Inc. * | 28,274 | 835,214 |
| Accel Entertainment, Inc. * | 23,774 | 289,567 |
| Adtalem Global Education, Inc. * | 20,221 | 746,762 |
| Airbnb, Inc., Class A * | 128,223 | 21,882,537 |
| American Public Education, Inc. * | 7,053 | 176,254 |
| Aramark | 97,906 | 3,571,611 |
| Aspen Group, Inc. * | 11,561 | 54,915 |
| Bally's Corp. * | 11,571 | 530,068 |
| BBQ Holdings, Inc. * | 3,893 | 51,388 |
| BJ's Restaurants, Inc. * | 8,683 | 289,318 |
| Bloomin' Brands, Inc. * | 30,396 | 657,162 |
| Bluegreen Vacations Holding Corp. * | 5,011 | 128,332 |
| Booking Holdings, Inc. * | 15,603 | 37,771,430 |
| Boyd Gaming Corp. * | 31,220 | 1,991,212 |
| Bright Horizons Family Solutions, Inc. * | 23,206 | 3,852,196 |
| Brinker International, Inc. * | 17,379 | 729,223 |
| BurgerFi International, Inc. *(a) | 5,891 | 48,306 |
| Caesars Entertainment, Inc. * | 81,035 | 8,870,091 |
| Carnival Corp. * | 304,480 | 6,747,277 |
| Carriage Services, Inc. | 5,675 | 291,979 |
| Century Casinos, Inc. * | 9,063 | 134,132 |
| Chegg, Inc. * | 54,348 | 3,230,445 |
| Chipotle Mexican Grill, Inc. * | 10,669 | 18,980,471 |
| Choice Hotels International, Inc. | 12,562 | 1,766,468 |
| Churchill Downs, Inc. | 13,080 | 3,008,400 |
| Chuy's Holdings, Inc. * | 7,554 | 220,275 |
| Coursera, Inc. * | 30,121 | 1,051,524 |
| Cracker Barrel Old Country Store, Inc. | 8,939 | 1,190,407 |
| Darden Restaurants, Inc. | 49,615 | 7,151,506 |
| Dave & Buster's Entertainment, Inc. * | 15,091 | 560,329 |
| Del Taco Restaurants, Inc. | 16,474 | 137,393 |
| Denny's Corp. * | 23,398 | 372,028 |
| Dine Brands Global, Inc. * | 6,593 | 557,174 |
| Domino’s Pizza, Inc. | 14,044 | 6,867,095 |
| DraftKings, Inc., Class A * | 125,470 | 5,845,647 |
| Drive Shack, Inc. * | 31,442 | 81,749 |
| Duolingo, Inc. *(a) | 2,167 | 376,386 |
| El Pollo Loco Holdings, Inc. * | 9,086 | 133,564 |
85
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Esports Entertainment Group, Inc. * | 4,741 | 25,412 |
| European Wax Center, Inc., Class A *(a) | 4,141 | 132,015 |
| Everi Holdings, Inc. * | 36,286 | 870,864 |
| Expedia Group, Inc. * | 55,204 | 9,076,090 |
| F45 Training Holdings, Inc. *(a) | 8,104 | 111,268 |
| Fiesta Restaurant Group, Inc. * | 9,485 | 99,972 |
| Frontdoor, Inc. * | 32,190 | 1,200,043 |
| Full House Resorts, Inc. * | 15,255 | 151,787 |
| GAN Ltd. * | 15,594 | 222,682 |
| Golden Entertainment, Inc. * | 8,135 | 422,776 |
| Golden Nugget Online Gaming, Inc. * | 16,581 | 279,721 |
| Graham Holdings Co., Class B | 1,566 | 917,441 |
| Grand Canyon Education, Inc. * | 17,160 | 1,367,652 |
| H&R Block, Inc. | 67,889 | 1,566,199 |
| Hall of Fame Resort & Entertainment Co. *(a) | 18,399 | 42,318 |
| Hilton Grand Vacations, Inc. * | 33,398 | 1,679,251 |
| Hilton Worldwide Holdings, Inc. * | 105,971 | 15,254,525 |
| Houghton Mifflin Harcourt Co. * | 48,721 | 691,351 |
| Hyatt Hotels Corp., Class A * | 18,765 | 1,598,778 |
| Inspired Entertainment, Inc. * | 10,938 | 150,397 |
| Jack in the Box, Inc. | 8,383 | 829,498 |
| Krispy Kreme, Inc. (a) | 11,318 | 144,305 |
| Kura Sushi USA, Inc., Class A * | 1,489 | 63,402 |
| Las Vegas Sands Corp. * | 131,445 | 5,101,380 |
| Laureate Education, Inc., Class A * | 38,696 | 670,215 |
| Lincoln Educational Services Corp. * | 10,364 | 74,621 |
| Lindblad Expeditions Holdings, Inc. * | 13,166 | 196,832 |
| Marriott International, Inc., Class A * | 103,932 | 16,631,199 |
| Marriott Vacations Worldwide Corp. | 16,219 | 2,549,951 |
| McDonald’s Corp. | 283,881 | 69,706,980 |
| Membership Collective Group, Inc., Class A * | 11,814 | 124,165 |
| MGM Resorts International | 152,399 | 7,187,137 |
| Mister Car Wash, Inc. *(a) | 14,706 | 269,708 |
| Monarch Casino & Resort, Inc. * | 4,966 | 358,645 |
| Nathan's Famous, Inc. | 1,549 | 96,813 |
| Noodles & Co. * | 16,309 | 198,154 |
| Norwegian Cruise Line Holdings Ltd. * | 140,076 | 3,602,755 |
| OneSpaWorld Holdings Ltd. * | 21,793 | 235,364 |
| Papa John's International, Inc. | 12,277 | 1,523,330 |
| Penn National Gaming, Inc. * | 63,166 | 4,522,686 |
| Perdoceo Education Corp. * | 25,565 | 271,500 |
| Planet Fitness, Inc., Class A * | 31,918 | 2,539,077 |
| Playa Hotels & Resorts N.V. * | 53,100 | 451,881 |
| PlayAGS, Inc. * | 8,698 | 76,716 |
| Potbelly Corp. * | 7,813 | 47,034 |
| PowerSchool Holdings, Inc., Class A * | 14,983 | 346,257 |
| RCI Hospitality Holdings, Inc. | 3,130 | 212,214 |
| Red Robin Gourmet Burgers, Inc. * | 5,262 | 104,556 |
| Red Rock Resorts, Inc., Class A * | 23,047 | 1,253,987 |
| Regis Corp. * | 10,203 | 27,548 |
| Rover Group, Inc. *(a) | 28,892 | 341,215 |
| Royal Caribbean Cruises Ltd. * | 85,470 | 7,216,232 |
| Rush Street Interactive, Inc. * | 20,546 | 413,591 |
| Ruth's Hospitality Group, Inc. * | 11,323 | 218,987 |
| Scientific Games Corp., Class A * | 36,287 | 2,904,774 |
| SeaWorld Entertainment, Inc. * | 19,316 | 1,226,566 |
| Service Corp. International | 63,630 | 4,358,019 |
| Shake Shack, Inc., Class A * | 15,229 | 1,053,390 |
| Six Flags Entertainment Corp. * | 28,901 | 1,188,698 |
| Starbucks Corp. | 448,080 | 47,527,846 |
| StoneMor, Inc. * | 42,000 | 108,780 |
| Strategic Education, Inc. | 9,128 | 622,621 |
| Stride, Inc. * | 15,727 | 558,308 |
| Target Hospitality Corp. * | 11,875 | 49,163 |
| Terminix Global Holdings, Inc. * | 47,113 | 1,907,134 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Texas Roadhouse, Inc. | 26,881 | 2,387,302 |
| The Beachbody Co., Inc. * | 37,405 | 196,750 |
| The Cheesecake Factory, Inc. * | 18,539 | 753,425 |
| The ONE Group Hospitality, Inc. * | 8,160 | 107,875 |
| The Wendy's Co. | 68,908 | 1,536,648 |
| Travel & Leisure Co. | 33,728 | 1,832,780 |
| Universal Technical Institute, Inc. * | 13,059 | 91,935 |
| Vail Resorts, Inc. | 15,262 | 5,260,964 |
| Vivint Smart Home, Inc. * | 14,807 | 134,299 |
| Wingstop, Inc. | 11,183 | 1,928,732 |
| WW International, Inc. * | 20,206 | 350,776 |
| Wyndham Hotels & Resorts, Inc. | 35,768 | 3,021,323 |
| Wynn Resorts Ltd. * | 40,401 | 3,628,010 |
| Xponential Fitness, Inc., Class A * | 4,864 | 82,202 |
| XpresSpa Group, Inc. *(a) | 36,286 | 48,260 |
| Yum! Brands, Inc. | 112,219 | 14,020,642 |
| 401,535,534 | ||
| Diversified Financials 5.3% | ||
| ACRES Commercial Realty Corp. * | 3,144 | 49,361 |
| AFC Gamma, Inc. | 5,156 | 120,960 |
| Affiliated Managers Group, Inc. | 15,503 | 2,602,644 |
| AG Mortgage Investment Trust, Inc. | 4,795 | 55,478 |
| AGNC Investment Corp. | 197,286 | 3,140,793 |
| Alerus Financial Corp. | 5,969 | 187,427 |
| Ally Financial, Inc. | 137,372 | 6,558,139 |
| A-Mark Precious Metals, Inc. | 3,214 | 241,018 |
| American Express Co. | 244,488 | 42,487,125 |
| Ameriprise Financial, Inc. | 43,343 | 13,095,221 |
| Annaly Capital Management, Inc. | 548,921 | 4,643,872 |
| Apollo Commercial Real Estate Finance, Inc. | 52,283 | 791,565 |
| Apollo Global Management, Inc. | 79,670 | 6,130,606 |
| Arbor Realty Trust, Inc. | 54,178 | 1,089,520 |
| Ares Commercial Real Estate Corp. | 19,753 | 308,542 |
| Ares Management Corp., Class A | 62,637 | 5,307,859 |
| Arlington Asset Investment Corp., Class A * | 11,092 | 42,593 |
| ARMOUR Residential REIT, Inc. | 31,901 | 335,599 |
| Artisan Partners Asset Management, Inc., Class A | 25,404 | 1,258,514 |
| Assetmark Financial Holdings, Inc. * | 8,457 | 216,837 |
| Atlanticus Holdings Corp. * | 2,113 | 163,736 |
| B. Riley Financial, Inc. | 6,796 | 487,001 |
| Berkshire Hathaway, Inc., Class B * | 704,978 | 202,335,736 |
| BGC Partners, Inc., Class A | 130,024 | 698,229 |
| BlackRock, Inc. | 54,364 | 51,290,259 |
| Blackstone Mortgage Trust, Inc., Class A | 59,239 | 1,948,963 |
| Blackstone, Inc. | 260,872 | 36,109,902 |
| Blucora, Inc. * | 18,439 | 304,612 |
| Blue Owl Capital, Inc. | 103,855 | 1,790,460 |
| Bridge Investment Group Holdings, Inc., Class A * | 7,606 | 144,134 |
| Brightsphere Investment Group, Inc. | 23,258 | 697,275 |
| BrightSpire Capital, Inc. | 37,342 | 366,325 |
| Broadmark Realty Capital, Inc. | 52,655 | 543,400 |
| Cannae Holdings, Inc. * | 31,180 | 1,063,238 |
| Capital One Financial Corp. | 169,508 | 25,600,793 |
| Cboe Global Markets, Inc. | 40,653 | 5,363,757 |
| Cherry Hill Mortgage Investment Corp. | 7,830 | 71,410 |
| Chimera Investment Corp. | 86,432 | 1,349,204 |
| CME Group, Inc. | 136,523 | 30,110,148 |
| Cohen & Steers, Inc. | 10,004 | 949,280 |
| Coinbase Global, Inc., Class A * | 11,043 | 3,527,355 |
86
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Cowen, Inc., Class A | 11,322 | 427,179 |
| Credit Acceptance Corp. * | 3,373 | 2,017,762 |
| Curo Group Holdings Corp. | 9,738 | 167,299 |
| Diamond Hill Investment Group, Inc. | 1,364 | 295,797 |
| Discover Financial Services | 114,079 | 12,927,432 |
| Donnelley Financial Solutions, Inc. * | 11,301 | 433,054 |
| Dynex Capital, Inc. | 12,576 | 220,080 |
| Ellington Financial, Inc. | 16,863 | 306,569 |
| Ellington Residential Mortgage REIT | 8,886 | 107,876 |
| Encore Capital Group, Inc. * | 11,491 | 620,744 |
| Enova International, Inc. * | 14,721 | 477,549 |
| Equitable Holdings, Inc. | 145,868 | 4,886,578 |
| Evercore, Inc., Class A | 14,937 | 2,268,034 |
| EZCORP, Inc., Class A * | 20,871 | 155,698 |
| FactSet Research Systems, Inc. | 14,372 | 6,379,587 |
| Federated Hermes, Inc. | 36,529 | 1,216,781 |
| FirstCash, Inc. | 15,662 | 1,385,617 |
| Focus Financial Partners, Inc., Class A * | 19,998 | 1,257,074 |
| Franklin BSP Realty Trust, Inc. * | 13,178 | 216,251 |
| Franklin Resources, Inc. | 107,371 | 3,381,113 |
| GAMCO Investors, Inc., Class A | 2,160 | 57,132 |
| GCM Grosvenor, Inc., Class A | 12,933 | 148,083 |
| Granite Point Mortgage Trust, Inc. | 19,886 | 266,472 |
| Great Ajax Corp. | 8,694 | 123,107 |
| Green Dot Corp., Class A * | 20,479 | 867,490 |
| Greenhill & Co., Inc. | 6,539 | 102,793 |
| Hamilton Lane, Inc., Class A | 13,048 | 1,363,646 |
| Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 29,393 | 1,775,337 |
| Houlihan Lokey, Inc. | 19,469 | 2,182,085 |
| Interactive Brokers Group, Inc., Class A | 33,506 | 2,373,900 |
| Intercontinental Exchange, Inc. | 213,829 | 29,606,763 |
| Invesco Ltd. | 128,579 | 3,267,192 |
| Invesco Mortgage Capital, Inc. | 120,067 | 377,010 |
| Janus Henderson Group plc | 65,588 | 3,049,842 |
| Jefferies Financial Group, Inc. | 74,770 | 3,215,110 |
| Katapult Holdings, Inc. *(a) | 22,914 | 101,051 |
| KKR & Co., Inc. | 221,551 | 17,650,968 |
| KKR Real Estate Finance Trust, Inc. | 17,074 | 370,677 |
| Ladder Capital Corp. REIT | 46,980 | 563,760 |
| Lazard Ltd., Class A | 42,493 | 2,081,732 |
| LendingClub Corp. * | 38,149 | 1,753,328 |
| LendingTree, Inc. * | 4,249 | 685,746 |
| LPL Financial Holdings, Inc. | 30,506 | 5,003,594 |
| Manning & Napier, Inc. | 6,198 | 59,811 |
| MarketAxess Holdings, Inc. | 14,445 | 5,903,238 |
| MarketWise, Inc. *(a) | 11,705 | 81,818 |
| Marlin Business Services Corp. | 4,000 | 91,680 |
| Medallion Financial Corp. * | 10,486 | 89,865 |
| MFA Financial, Inc. | 154,792 | 698,112 |
| Moelis & Co., Class A | 23,136 | 1,682,913 |
| Moody's Corp. | 61,482 | 24,847,950 |
| Morgan Stanley | 554,747 | 57,016,897 |
| Morningstar, Inc. | 9,101 | 2,882,742 |
| MSCI, Inc. | 31,317 | 20,822,047 |
| Nasdaq, Inc. | 44,335 | 9,304,586 |
| Navient Corp. | 63,178 | 1,244,607 |
| Nelnet, Inc., Class A | 7,909 | 653,521 |
| New Residential Investment Corp. | 176,550 | 2,005,608 |
| New York Mortgage Trust, Inc. | 139,831 | 613,858 |
| Nexpoint Real Estate Finance, Inc. | 2,499 | 51,804 |
| Northern Trust Corp. | 79,253 | 9,751,289 |
| OneMain Holdings, Inc. | 42,086 | 2,222,562 |
| Open Lending Corp., Class A * | 38,701 | 1,219,856 |
| Oportun Financial Corp. * | 7,448 | 173,017 |
| Oppenheimer Holdings, Inc., Class A | 3,500 | 182,175 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| OppFi, Inc. *(a) | 6,366 | 40,742 |
| Orchid Island Capital, Inc. (a) | 57,080 | 283,117 |
| PennyMac Mortgage Investment Trust | 37,370 | 753,005 |
| Perella Weinberg Partners (a) | 14,490 | 203,440 |
| Piper Sandler Cos. | 5,479 | 902,336 |
| PJT Partners, Inc., Class A | 9,433 | 771,525 |
| PRA Group, Inc. * | 17,335 | 743,325 |
| PROG Holdings, Inc. | 25,034 | 1,012,625 |
| Pzena Investment Management, Inc., Class A | 8,825 | 96,016 |
| Raymond James Financial, Inc. | 70,545 | 6,955,032 |
| Ready Capital Corp. | 21,462 | 332,017 |
| Redwood Trust, Inc. | 42,844 | 580,965 |
| Regional Management Corp. | 3,295 | 168,309 |
| S&P Global, Inc. | 91,560 | 43,414,090 |
| Safeguard Scientifics, Inc. * | 7,000 | 58,730 |
| Sculptor Capital Management, Inc. | 7,668 | 203,202 |
| SEI Investments Co. | 40,269 | 2,538,558 |
| Silvercrest Asset Management Group, Inc., Class A | 3,213 | 51,408 |
| SLM Corp. | 118,318 | 2,171,135 |
| SoFi Technologies, Inc. * | 225,425 | 4,528,788 |
| Starwood Property Trust, Inc. | 107,682 | 2,742,661 |
| State Street Corp. | 138,850 | 13,683,667 |
| StepStone Group, Inc., Class A | 15,426 | 724,713 |
| Stifel Financial Corp. | 39,560 | 2,882,737 |
| StoneX Group, Inc. * | 6,843 | 472,920 |
| Sunlight Financial Holdings, Inc. *(a) | 16,772 | 99,123 |
| SWK Holdings Corp. * | 4,879 | 92,603 |
| Synchrony Financial | 215,739 | 10,021,077 |
| T. Rowe Price Group, Inc. | 86,210 | 18,697,225 |
| The Bank of New York Mellon Corp. | 302,734 | 17,921,853 |
| The Carlyle Group, Inc. | 52,407 | 2,942,653 |
| The Charles Schwab Corp. (c) | 568,503 | 46,634,301 |
| The Goldman Sachs Group, Inc. | 128,103 | 52,951,375 |
| TPG RE Finance Trust, Inc. | 24,373 | 318,555 |
| Tradeweb Markets, Inc., Class A | 40,272 | 3,588,235 |
| Two Harbors Investment Corp. | 125,384 | 804,965 |
| Upstart Holdings, Inc. * | 17,593 | 5,665,650 |
| Victory Capital Holdings, Inc., Class A | 6,857 | 259,880 |
| Virtu Financial, Inc., Class A | 34,334 | 854,230 |
| Virtus Investment Partners, Inc. | 2,899 | 927,680 |
| Voya Financial, Inc. | 42,844 | 2,989,226 |
| Western Asset Mortgage Capital Corp. | 23,070 | 58,136 |
| Westwood Holdings Group, Inc. | 2,653 | 46,162 |
| WisdomTree Investments, Inc. | 44,030 | 281,352 |
| World Acceptance Corp. * | 1,763 | 326,843 |
| 963,109,925 | ||
| Energy 2.8% | ||
| Aemetis, Inc. * | 9,772 | 194,463 |
| Alto Ingredients, Inc. * | 33,727 | 179,428 |
| Altus Midstream Co., Class A | 894 | 55,267 |
| American Resources Corp. *(a) | 17,208 | 40,267 |
| Amplify Energy Corp. * | 11,998 | 40,913 |
| Antero Midstream Corp. | 123,318 | 1,312,104 |
| Antero Resources Corp. * | 108,077 | 2,147,490 |
| APA Corp. | 142,203 | 3,727,141 |
| Arch Resources, Inc. * | 6,166 | 561,599 |
| Archrock, Inc. | 55,359 | 453,390 |
| Aspen Aerogels, Inc. * | 9,429 | 513,503 |
| Baker Hughes Co. | 315,954 | 7,924,126 |
| Berry Corp. | 29,940 | 287,723 |
| Brigham Minerals, Inc., Class A | 18,048 | 418,353 |
| Bristow Group, Inc. * | 9,727 | 336,554 |
| Cactus, Inc., Class A | 22,187 | 965,135 |
87
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| California Resources Corp. * | 30,680 | 1,415,268 |
| Callon Petroleum Co. * | 15,293 | 791,107 |
| Camber Energy, Inc. *(a) | 54,285 | 70,571 |
| Centennial Resource Development, Inc., Class A * | 71,408 | 514,138 |
| Centrus Energy Corp., Class A * | 4,789 | 271,393 |
| ChampionX Corp. * | 76,507 | 2,006,779 |
| Cheniere Energy, Inc. * | 89,567 | 9,261,228 |
| Chesapeake Energy Corp. | 37,206 | 2,371,510 |
| Chevron Corp. | 735,211 | 84,174,307 |
| Civitas Resources, Inc. | 11,977 | 672,389 |
| Clean Energy Fuels Corp. * | 64,008 | 590,154 |
| CNX Resources Corp. * | 83,486 | 1,219,730 |
| Comstock Resources, Inc. * | 36,508 | 360,334 |
| ConocoPhillips | 508,701 | 37,893,137 |
| CONSOL Energy, Inc. * | 12,234 | 336,557 |
| Contango Oil & Gas Co. * | 51,964 | 214,611 |
| Continental Resources, Inc. | 22,569 | 1,101,593 |
| Core Laboratories N.V. | 19,266 | 501,109 |
| Coterra Energy, Inc. | 307,887 | 6,564,151 |
| CVR Energy, Inc. | 10,411 | 199,579 |
| Delek US Holdings, Inc. * | 30,037 | 584,220 |
| Denbury, Inc. * | 19,675 | 1,665,686 |
| Devon Energy Corp. | 238,499 | 9,559,040 |
| Diamondback Energy, Inc. | 64,859 | 6,952,236 |
| DMC Global, Inc. * | 7,222 | 301,735 |
| Dorian LPG Ltd. | 10,750 | 130,290 |
| Dril-Quip, Inc. * | 13,780 | 324,657 |
| DTE Midstream LLC * | 37,159 | 1,782,146 |
| Earthstone Energy, Inc., Class A * | 8,956 | 90,903 |
| Ecoark Holdings, Inc. * | 10,671 | 43,004 |
| EOG Resources, Inc. | 221,893 | 20,516,227 |
| Epsilon Energy Ltd. * | 12,479 | 67,761 |
| EQT Corp. * | 116,784 | 2,325,169 |
| Equitrans Midstream Corp. | 154,412 | 1,591,988 |
| Expro Group Holdings N.V. * | 11,947 | 204,891 |
| Extraction Oil & Gas, Inc. * | 5,726 | 381,523 |
| Exxon Mobil Corp. | 1,609,667 | 103,775,231 |
| Falcon Minerals Corp. | 13,000 | 76,440 |
| Forum Energy Technologies, Inc. * | 1,677 | 37,749 |
| FTS International, Inc., Class A * | 3,100 | 82,150 |
| Geospace Technologies Corp. * | 1,910 | 18,164 |
| Gevo, Inc. * | 76,813 | 555,358 |
| Goodrich Petroleum Corp. * | 5,280 | 107,818 |
| Green Plains, Inc. * | 20,312 | 770,840 |
| Gulfport Energy Operating Corp. * | 4,413 | 362,043 |
| Halliburton Co. | 339,226 | 8,477,258 |
| Helix Energy Solutions Group, Inc. * | 52,600 | 198,828 |
| Helmerich & Payne, Inc. | 41,949 | 1,302,097 |
| Hess Corp. | 104,855 | 8,657,877 |
| HollyFrontier Corp. | 56,114 | 1,896,653 |
| International Seaways, Inc. | 15,176 | 266,339 |
| Kinder Morgan, Inc. | 741,705 | 12,423,559 |
| Kosmos Energy Ltd. * | 152,905 | 550,458 |
| Laredo Petroleum, Inc. * | 5,226 | 394,040 |
| Liberty Oilfield Services, Inc., Class A * | 41,592 | 537,369 |
| Magnolia Oil & Gas Corp., Class A | 54,834 | 1,144,934 |
| Mammoth Energy Services, Inc. * | 15,843 | 54,341 |
| Marathon Oil Corp. | 302,021 | 4,928,983 |
| Marathon Petroleum Corp. | 241,988 | 15,954,269 |
| Matador Resources Co. | 41,591 | 1,740,583 |
| Murphy Oil Corp. | 56,470 | 1,571,560 |
| Nabors Industries Ltd. * | 3,275 | 335,688 |
| Natural Gas Services Group, Inc. * | 4,213 | 47,902 |
| New Fortress Energy, Inc. | 15,931 | 477,930 |
| Newpark Resources, Inc. * | 39,958 | 135,857 |
| NextDecade Corp. * | 47,025 | 172,582 |
| NexTier Oilfield Solutions, Inc. * | 59,533 | 265,517 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Noble Corp. * | 22,896 | 576,063 |
| Northern Oil and Gas, Inc. | 20,821 | 482,214 |
| NOV, Inc. * | 148,226 | 2,078,129 |
| Oasis Petroleum, Inc. | 6,790 | 818,874 |
| Occidental Petroleum Corp. | 338,835 | 11,361,138 |
| Oceaneering International, Inc. * | 38,405 | 522,308 |
| Oil States International, Inc. * | 23,526 | 142,568 |
| ONEOK, Inc. | 169,349 | 10,773,983 |
| Overseas Shipholding Group, Inc., Class A * | 35,882 | 71,405 |
| Ovintiv, Inc. | 100,439 | 3,768,471 |
| Par Pacific Holdings, Inc. * | 18,182 | 281,094 |
| Patterson-UTI Energy, Inc. | 71,523 | 612,237 |
| PBF Energy, Inc., Class A * | 37,469 | 547,422 |
| PDC Energy, Inc. | 37,707 | 1,972,453 |
| Peabody Energy Corp. * | 32,005 | 380,539 |
| Phillips 66 | 166,148 | 12,424,547 |
| Pioneer Natural Resources Co. | 86,203 | 16,118,237 |
| ProPetro Holding Corp. * | 31,609 | 303,130 |
| Range Resources Corp. * | 100,305 | 2,339,113 |
| Ranger Oil Corp., Class A * | 6,227 | 205,740 |
| Renewable Energy Group, Inc. * | 18,981 | 1,214,784 |
| REX American Resources Corp. * | 2,050 | 180,298 |
| Riley Exploration Permian, Inc. | 2,575 | 68,315 |
| Ring Energy, Inc. * | 39,328 | 147,873 |
| RPC, Inc. * | 37,541 | 202,346 |
| SandRidge Energy, Inc. * | 14,791 | 189,325 |
| Schlumberger N.V. | 531,280 | 17,139,093 |
| Select Energy Services, Inc., Class A * | 23,759 | 142,792 |
| SM Energy Co. | 45,996 | 1,578,583 |
| Solaris Oilfield Infrastructure, Inc., Class A | 12,245 | 92,940 |
| Southwestern Energy Co. * | 258,528 | 1,261,617 |
| Talos Energy, Inc. * | 17,511 | 227,118 |
| Targa Resources Corp. | 86,587 | 4,733,711 |
| TechnipFMC plc * | 158,220 | 1,166,081 |
| Tellurian, Inc. * | 144,270 | 565,538 |
| TETRA Technologies, Inc. * | 48,014 | 155,085 |
| Texas Pacific Land Corp. | 2,373 | 3,022,419 |
| The Williams Cos., Inc. | 461,975 | 12,976,878 |
| Tidewater, Inc. * | 15,672 | 190,101 |
| Transocean Ltd. * | 222,670 | 786,025 |
| Uranium Energy Corp. * | 92,553 | 344,297 |
| US Silica Holdings, Inc. * | 28,760 | 278,397 |
| VAALCO Energy, Inc. * | 20,055 | 62,772 |
| Valaris Ltd. * | 24,500 | 862,890 |
| Valero Energy Corp. | 155,113 | 11,994,888 |
| Vertex Energy, Inc. *(a) | 17,703 | 86,568 |
| Vine Energy, Inc., Class A * | 9,100 | 155,337 |
| W&T Offshore, Inc. * | 35,738 | 146,883 |
| Weatherford International plc * | 26,691 | 775,640 |
| Whiting Petroleum Corp. * | 14,719 | 958,648 |
| World Fuel Services Corp. | 23,821 | 727,255 |
| 511,743,156 | ||
| Food & Staples Retailing 1.2% | ||
| Albertsons Cos., Inc., Class A (a) | 37,162 | 1,150,164 |
| BJ's Wholesale Club Holdings, Inc. * | 51,849 | 3,030,056 |
| Blue Apron Holdings, Inc., Class A *(a) | 9,121 | 83,457 |
| Casey's General Stores, Inc. | 14,213 | 2,722,358 |
| Costco Wholesale Corp. | 168,054 | 82,605,263 |
| Grocery Outlet Holding Corp. * | 34,090 | 756,457 |
| HF Foods Group, Inc. *(a) | 16,494 | 116,448 |
| Ingles Markets, Inc., Class A | 5,868 | 406,007 |
| Performance Food Group Co. * | 57,983 | 2,622,571 |
| PriceSmart, Inc. | 9,307 | 669,639 |
| Rite Aid Corp. * | 22,587 | 306,957 |
88
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| SpartanNash, Co. | 13,213 | 305,749 |
| Sprouts Farmers Market, Inc. * | 44,039 | 975,023 |
| Sysco Corp. | 195,086 | 15,002,113 |
| The Andersons, Inc. | 11,831 | 402,964 |
| The Chefs' Warehouse, Inc. * | 12,583 | 438,769 |
| The Kroger Co. | 258,888 | 10,360,698 |
| U.S. Foods Holding Corp. * | 85,110 | 2,950,764 |
| United Natural Foods, Inc. * | 21,599 | 937,181 |
| Village Super Market, Inc., Class A | 3,931 | 87,543 |
| Walgreens Boots Alliance, Inc. | 273,943 | 12,880,800 |
| Walmart, Inc. | 543,276 | 81,176,300 |
| Weis Markets, Inc. | 7,027 | 395,690 |
| 220,382,971 | ||
| Food, Beverage & Tobacco 2.5% | ||
| 22nd Century Group, Inc. * | 63,189 | 173,138 |
| Alico, Inc. | 2,213 | 78,783 |
| Altria Group, Inc. | 700,880 | 30,915,817 |
| AppHarvest, Inc. * | 22,343 | 134,505 |
| Archer-Daniels-Midland Co. | 213,075 | 13,687,938 |
| B&G Foods, Inc. (a) | 24,514 | 721,692 |
| Beyond Meat, Inc. *(a) | 22,688 | 2,245,658 |
| Brown-Forman Corp., Class A | 20,775 | 1,330,223 |
| Brown-Forman Corp., Class B | 70,064 | 4,756,645 |
| Bunge Ltd. | 53,865 | 4,990,054 |
| Calavo Growers, Inc. | 7,291 | 293,098 |
| Cal-Maine Foods, Inc. | 14,423 | 520,093 |
| Campbell Soup Co. | 76,675 | 3,063,166 |
| Celsius Holdings, Inc. * | 14,332 | 1,383,325 |
| Coca-Cola Consolidated, Inc. | 1,818 | 729,745 |
| Conagra Brands, Inc. | 182,690 | 5,882,618 |
| Constellation Brands, Inc., Class A | 63,947 | 13,864,349 |
| Darling Ingredients, Inc. * | 61,731 | 5,217,504 |
| Farmer Brothers Co. * | 4,500 | 33,975 |
| Flowers Foods, Inc. | 77,336 | 1,914,066 |
| Fresh Del Monte Produce, Inc. | 14,255 | 477,400 |
| Freshpet, Inc. * | 16,310 | 2,542,892 |
| General Mills, Inc. | 230,541 | 14,247,434 |
| Hormel Foods Corp. | 106,633 | 4,512,709 |
| Hostess Brands, Inc. * | 48,698 | 920,879 |
| Ingredion, Inc. | 25,673 | 2,444,840 |
| J&J Snack Foods Corp. | 5,741 | 847,084 |
| John B. Sanfilippo & Son, Inc. | 3,277 | 276,906 |
| Kellogg Co. | 97,663 | 5,986,742 |
| Keurig Dr Pepper, Inc. | 280,344 | 10,117,615 |
| Laird Superfood, Inc. *(a) | 1,284 | 22,419 |
| Lamb Weston Holdings, Inc. | 55,486 | 3,132,185 |
| Lancaster Colony Corp. | 7,363 | 1,251,710 |
| Landec Corp. * | 9,100 | 88,452 |
| Limoneira Co. | 7,226 | 116,555 |
| McCormick & Co., Inc. - Non Voting Shares | 94,417 | 7,575,076 |
| MGP Ingredients, Inc. | 4,943 | 317,390 |
| Mission Produce, Inc. * | 13,494 | 256,251 |
| Molson Coors Beverage Co., Class B | 72,438 | 3,193,791 |
| Mondelez International, Inc., Class A | 530,889 | 32,246,198 |
| Monster Beverage Corp. * | 142,771 | 12,135,535 |
| National Beverage Corp. | 8,887 | 501,227 |
| NewAge, Inc. * | 43,967 | 65,071 |
| PepsiCo, Inc. | 525,450 | 84,912,720 |
| Philip Morris International, Inc. | 592,367 | 56,002,376 |
| Pilgrim's Pride Corp. * | 17,681 | 497,897 |
| Post Holdings, Inc. * | 22,228 | 2,255,697 |
| Reed's, Inc. * | 48,081 | 30,777 |
| Sanderson Farms, Inc. | 7,977 | 1,511,243 |
| Seaboard Corp. | 95 | 365,752 |
| Seneca Foods Corp., Class A * | 2,612 | 134,858 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Tattooed Chef, Inc. *(a) | 17,444 | 313,469 |
| The Alkaline Water Co., Inc. * | 39,797 | 67,655 |
| The Boston Beer Co., Inc., Class A * | 3,620 | 1,782,778 |
| The Coca-Cola Co. | 1,476,943 | 83,255,277 |
| The Duckhorn Portfolio, Inc. * | 11,750 | 227,245 |
| The Hain Celestial Group, Inc. * | 32,106 | 1,440,596 |
| The Hershey Co. | 55,277 | 9,692,822 |
| The JM Smucker Co. | 41,584 | 5,109,010 |
| The Kraft Heinz Co. | 256,406 | 9,202,411 |
| The Simply Good Foods Co. * | 31,972 | 1,267,690 |
| Tootsie Roll Industries, Inc. | 8,093 | 256,143 |
| TreeHouse Foods, Inc. * | 21,605 | 780,805 |
| Turning Point Brands, Inc. | 5,916 | 225,814 |
| Tyson Foods, Inc., Class A | 112,113 | 8,965,677 |
| Universal Corp. | 10,277 | 483,019 |
| Utz Brands, Inc. | 24,426 | 380,801 |
| Vector Group Ltd. | 47,512 | 630,009 |
| Vintage Wine Estates, Inc. * | 13,061 | 134,006 |
| Vital Farms, Inc. * | 10,185 | 167,238 |
| Whole Earth Brands, Inc. * | 13,486 | 163,585 |
| Zevia PBC, Class A * | 4,438 | 49,661 |
| 465,519,784 | ||
| Health Care Equipment & Services 6.1% | ||
| 1Life Healthcare, Inc. * | 44,085 | 954,881 |
| Abbott Laboratories | 674,138 | 86,889,647 |
| ABIOMED, Inc. * | 17,314 | 5,748,941 |
| Acadia Healthcare Co., Inc. * | 34,154 | 2,117,548 |
| Accelerate Diagnostics, Inc. * | 15,905 | 93,840 |
| Accolade, Inc. * | 21,796 | 867,263 |
| Accuray, Inc. * | 36,635 | 182,809 |
| Acutus Medical, Inc. * | 9,308 | 72,975 |
| AdaptHealth Corp. * | 35,908 | 978,493 |
| Addus HomeCare Corp. * | 5,955 | 556,792 |
| Aethlon Medical, Inc. *(a) | 7,557 | 27,130 |
| Agiliti, Inc. * | 10,454 | 235,738 |
| agilon health, Inc. * | 17,604 | 431,298 |
| Align Technology, Inc. * | 27,981 | 17,470,497 |
| Alignment Healthcare, Inc. * | 10,759 | 213,674 |
| Allscripts Healthcare Solutions, Inc. * | 48,493 | 668,234 |
| Alphatec Holdings, Inc. * | 27,056 | 317,367 |
| Amedisys, Inc. * | 12,298 | 2,082,543 |
| American Well Corp., Class A * | 68,886 | 619,974 |
| AmerisourceBergen Corp. | 56,958 | 6,950,015 |
| AMN Healthcare Services, Inc. * | 17,920 | 1,768,704 |
| AngioDynamics, Inc. * | 14,651 | 419,019 |
| Anthem, Inc. | 92,762 | 40,363,529 |
| Apollo Endosurgery, Inc. * | 6,287 | 60,041 |
| Apollo Medical Holdings, Inc. * | 14,246 | 977,703 |
| Apria, Inc. * | 3,005 | 112,477 |
| Apyx Medical Corp. * | 12,488 | 178,578 |
| Asensus Surgical, Inc. * | 88,226 | 149,102 |
| Aspira Women's Health, Inc. *(a) | 21,808 | 73,057 |
| ATI Physical Therapy, Inc. *(a) | 22,162 | 63,605 |
| AtriCure, Inc. * | 17,256 | 1,295,235 |
| Atrion Corp. | 528 | 384,384 |
| Avanos Medical, Inc. * | 18,399 | 580,304 |
| Aveanna Healthcare Holdings, Inc. * | 14,959 | 115,483 |
| Avinger, Inc. * | 36,388 | 25,617 |
| AxoGen, Inc. * | 16,795 | 255,116 |
| Axonics, Inc. * | 17,653 | 1,294,848 |
| Baxter International, Inc. | 190,433 | 15,036,590 |
| Becton, Dickinson & Co. | 109,226 | 26,169,457 |
| Beyond Air, Inc. *(a) | 6,238 | 64,064 |
| Biodesix, Inc. * | 5,346 | 40,309 |
| Biolase, Inc. * | 58,873 | 32,969 |
| BioLife Solutions, Inc. * | 11,285 | 599,798 |
89
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| BioSig Technologies, Inc. *(a) | 8,008 | 21,622 |
| Boston Scientific Corp. * | 541,829 | 23,369,085 |
| Brookdale Senior Living, Inc. * | 69,175 | 449,638 |
| Butterfly Network, Inc. *(a) | 48,771 | 503,317 |
| Cano Health, Inc. * | 63,831 | 701,503 |
| Capital Senior Living Corp. * | 1,478 | 41,709 |
| Cardinal Health, Inc. | 109,869 | 5,252,837 |
| Cardiovascular Systems, Inc. * | 15,854 | 556,158 |
| CareMax, Inc. *(a) | 24,231 | 224,621 |
| Castle Biosciences, Inc. * | 8,938 | 557,284 |
| Castlight Health, Inc., Class B * | 44,317 | 79,771 |
| Centene Corp. * | 222,560 | 15,855,174 |
| Cerner Corp. | 112,357 | 8,347,002 |
| Certara, Inc. * | 35,031 | 1,447,131 |
| Cerus Corp. * | 68,190 | 450,054 |
| Change Healthcare, Inc. * | 94,580 | 2,036,307 |
| Chemed Corp. | 5,931 | 2,860,225 |
| Cigna Corp. | 129,288 | 27,617,210 |
| ClearPoint Neuro, Inc. * | 6,306 | 105,499 |
| Clover Health Investments Corp. *(a) | 75,992 | 569,940 |
| Co-Diagnostics, Inc. *(a) | 11,070 | 90,885 |
| Community Health Systems, Inc. * | 46,819 | 613,329 |
| Computer Programs & Systems, Inc. * | 6,539 | 236,058 |
| Conformis, Inc. * | 77,113 | 94,849 |
| CONMED Corp. | 10,960 | 1,603,229 |
| Convey Holding Parent, Inc. * | 6,021 | 44,555 |
| CorVel Corp. * | 3,725 | 682,494 |
| Covetrus, Inc. * | 41,479 | 837,461 |
| Cross Country Healthcare, Inc. * | 12,613 | 261,467 |
| CryoLife, Inc. * | 14,283 | 294,801 |
| CryoPort, Inc. * | 17,449 | 1,422,791 |
| Cutera, Inc. * | 6,934 | 298,162 |
| CVRx, Inc. *(a) | 3,405 | 57,579 |
| CVS Health Corp. | 501,678 | 44,789,812 |
| CytoSorbents Corp. * | 15,994 | 94,205 |
| Danaher Corp. | 241,597 | 75,322,697 |
| DarioHealth Corp. * | 5,649 | 92,361 |
| DaVita, Inc. * | 25,718 | 2,655,126 |
| Dentsply Sirona, Inc. | 83,601 | 4,782,813 |
| DexCom, Inc. * | 36,849 | 22,964,665 |
| Doximity, Inc., Class A *(a) | 18,399 | 1,278,363 |
| Eargo, Inc. * | 9,015 | 79,332 |
| Edwards Lifesciences Corp. * | 237,093 | 28,408,483 |
| Encompass Health Corp. | 37,609 | 2,390,428 |
| Envista Holdings Corp. * | 62,218 | 2,432,724 |
| Enzo Biochem, Inc. * | 13,471 | 46,340 |
| Evolent Health, Inc., Class A * | 29,477 | 862,792 |
| Figs, Inc., Class A *(a) | 13,366 | 449,231 |
| Five Star Senior Living, Inc. * | 5,708 | 23,460 |
| Forian, Inc. *(a) | 7,513 | 76,182 |
| Fulgent Genetics, Inc. * | 7,530 | 624,388 |
| Glaukos Corp. * | 17,443 | 797,320 |
| Globus Medical, Inc., Class A * | 29,537 | 2,279,370 |
| GoodRx Holdings, Inc., Class A * | 25,035 | 1,116,561 |
| Guardant Health, Inc. * | 38,865 | 4,539,043 |
| Haemonetics Corp. * | 19,377 | 1,331,394 |
| Hanger, Inc. * | 13,820 | 258,158 |
| HCA Healthcare, Inc. | 93,722 | 23,473,612 |
| Health Catalyst, Inc. * | 19,675 | 1,035,692 |
| HealthEquity, Inc. * | 32,353 | 2,141,122 |
| HealthStream, Inc. * | 9,595 | 255,323 |
| Henry Schein, Inc. * | 53,242 | 4,065,027 |
| Heska Corp. * | 4,184 | 935,250 |
| Hill-Rom Holdings, Inc. | 25,157 | 3,896,819 |
| Hims & Hers Health, Inc. * | 47,200 | 368,160 |
| Hologic, Inc. * | 96,781 | 7,095,015 |
| Humana, Inc. | 48,909 | 22,652,692 |
| ICAD, Inc. * | 9,349 | 98,632 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| ICU Medical, Inc. * | 7,703 | 1,803,503 |
| IDEXX Laboratories, Inc. * | 32,338 | 21,541,635 |
| Inari Medical, Inc. * | 12,060 | 1,091,671 |
| InfuSystem Holdings, Inc. * | 7,155 | 118,988 |
| Innovage Holding Corp. * | 7,015 | 46,439 |
| Inogen, Inc. * | 7,993 | 316,922 |
| Inovalon Holdings, Inc., Class A * | 29,186 | 1,190,497 |
| Inspire Medical Systems, Inc. * | 10,547 | 2,843,260 |
| Insulet Corp. * | 26,208 | 8,125,004 |
| Integer Holdings Corp. * | 12,344 | 1,111,207 |
| Integra LifeSciences Holdings Corp. * | 27,935 | 1,856,560 |
| Intersect ENT, Inc. * | 12,050 | 324,989 |
| IntriCon Corp. * | 2,619 | 44,523 |
| Intuitive Surgical, Inc. * | 135,624 | 48,977,895 |
| Invacare Corp. * | 17,363 | 85,773 |
| iRadimed Corp. * | 3,278 | 122,335 |
| iRhythm Technologies, Inc. * | 11,299 | 792,512 |
| IRIDEX Corp. * | 7,177 | 55,048 |
| Laboratory Corp. of America Holdings * | 36,710 | 10,536,504 |
| Lantheus Holdings, Inc. * | 26,207 | 612,982 |
| LeMaitre Vascular, Inc. | 7,713 | 401,153 |
| LHC Group, Inc. * | 12,327 | 1,659,091 |
| LifeStance Health Group, Inc. *(a) | 15,000 | 179,700 |
| LivaNova plc * | 20,709 | 1,588,794 |
| Lucira Health, Inc. * | 6,050 | 35,272 |
| Magellan Health, Inc. * | 9,178 | 870,350 |
| Masimo Corp. * | 19,296 | 5,471,188 |
| McKesson Corp. | 58,745 | 12,211,911 |
| MEDNAX, Inc. * | 32,861 | 894,805 |
| Medtronic plc | 510,820 | 61,226,885 |
| Meridian Bioscience, Inc. * | 16,420 | 308,860 |
| Merit Medical Systems, Inc. * | 19,299 | 1,298,051 |
| Mesa Laboratories, Inc. | 2,027 | 619,654 |
| Milestone Scientific, Inc. *(a) | 24,916 | 51,327 |
| Misonix, Inc. *(b) | 4,709 | 124,279 |
| ModivCare, Inc. * | 4,538 | 738,650 |
| Molina Healthcare, Inc. * | 22,263 | 6,583,614 |
| Multiplan Corp. * | 95,617 | 412,109 |
| National HealthCare Corp. | 5,164 | 361,170 |
| National Research Corp. | 5,356 | 231,915 |
| Natus Medical, Inc. * | 13,282 | 332,714 |
| Nemaura Medical, Inc. *(a) | 3,832 | 24,333 |
| Neogen Corp. * | 40,638 | 1,719,394 |
| Neuronetics, Inc. * | 13,837 | 71,952 |
| NeuroPace, Inc. *(a) | 2,684 | 40,689 |
| Nevro Corp. * | 13,525 | 1,538,333 |
| NextGen Healthcare, Inc. * | 20,592 | 338,944 |
| Novocure Ltd. * | 33,984 | 3,485,739 |
| NuVasive, Inc. * | 19,837 | 1,058,502 |
| Oak Street Health, Inc. * | 52,729 | 2,490,391 |
| Omnicell, Inc. * | 16,523 | 2,943,572 |
| Ontrak, Inc. * | 2,607 | 22,420 |
| OptimizeRx Corp. * | 6,885 | 665,779 |
| Option Care Health, Inc. * | 52,252 | 1,428,047 |
| OraSure Technologies, Inc. * | 30,500 | 325,435 |
| Ortho Clinical Diagnostics Holdings plc * | 42,581 | 841,826 |
| Orthofix Medical, Inc. * | 7,486 | 269,346 |
| OrthoPediatrics Corp. * | 5,687 | 404,744 |
| Outset Medical, Inc. * | 15,526 | 827,070 |
| Owens & Minor, Inc. | 28,289 | 1,015,009 |
| Owlet, Inc. * | 28,926 | 103,555 |
| Patterson Cos., Inc. | 32,475 | 1,015,168 |
| PAVmed, Inc. * | 28,787 | 156,313 |
| Penumbra, Inc. * | 13,256 | 3,665,947 |
| PetIQ, Inc. * | 9,670 | 242,234 |
| Phreesia, Inc. * | 19,137 | 1,349,924 |
90
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Premier, Inc., Class A | 46,344 | 1,805,099 |
| Privia Health Group, Inc. * | 7,627 | 196,014 |
| Pro-Dex, Inc. * | 376 | 9,126 |
| Progyny, Inc. * | 25,944 | 1,593,740 |
| Pulmonx Corp. * | 13,338 | 519,248 |
| Pulse Biosciences, Inc. *(a) | 5,314 | 112,072 |
| Quest Diagnostics, Inc. | 46,625 | 6,843,617 |
| Quidel Corp. * | 14,339 | 1,903,789 |
| Quotient Ltd. * | 33,853 | 85,648 |
| R1 RCM, Inc. * | 50,409 | 1,093,875 |
| RadNet, Inc. * | 15,988 | 497,067 |
| ResMed, Inc. | 55,499 | 14,591,242 |
| Retractable Technologies, Inc. *(a) | 5,101 | 48,255 |
| RxSight, Inc. *(a) | 3,337 | 39,977 |
| Schrodinger, Inc. * | 17,610 | 961,154 |
| SeaSpine Holdings Corp. * | 11,635 | 174,060 |
| Second Sight Medical Products, Inc. * | 5,017 | 13,747 |
| Select Medical Holdings Corp. | 40,348 | 1,340,361 |
| Sema4 Holdings Corp. *(a) | 48,350 | 390,185 |
| Senseonics Holdings, Inc. * | 155,427 | 543,995 |
| Sharecare, Inc. *(a) | 108,448 | 804,684 |
| Sharps Compliance Corp. * | 4,490 | 37,043 |
| Shockwave Medical, Inc. * | 13,264 | 2,834,517 |
| SI-BONE, Inc. * | 10,042 | 226,447 |
| Sientra, Inc. * | 21,118 | 123,751 |
| Sight Sciences, Inc. *(a) | 4,175 | 112,600 |
| Signify Health, Inc., Class A * | 8,648 | 138,973 |
| Silk Road Medical, Inc. * | 13,242 | 777,438 |
| Simulations Plus, Inc. | 5,879 | 296,890 |
| SmileDirectClub, Inc. *(a) | 41,846 | 215,507 |
| SOC Telemed, Inc. *(a) | 25,093 | 55,205 |
| Soliton, Inc. *(a) | 4,273 | 87,981 |
| STAAR Surgical Co. * | 17,858 | 2,115,459 |
| Stereotaxis, Inc. * | 22,696 | 133,906 |
| STERIS plc | 38,057 | 8,895,443 |
| Stryker Corp. | 127,471 | 33,916,209 |
| Surgalign Holdings, Inc. * | 41,383 | 39,781 |
| Surgery Partners, Inc. * | 11,462 | 471,547 |
| Surmodics, Inc. * | 5,273 | 293,495 |
| Tabula Rasa HealthCare, Inc. * | 8,992 | 244,133 |
| Tactile Systems Technology, Inc. * | 7,843 | 270,505 |
| Talis Biomedical Corp. * | 5,390 | 28,837 |
| Talkspace, Inc. *(a) | 38,082 | 131,002 |
| Tandem Diabetes Care, Inc. * | 24,292 | 3,311,728 |
| Teladoc Health, Inc. * | 60,713 | 9,082,060 |
| Teleflex, Inc. | 17,805 | 6,355,317 |
| Tenet Healthcare Corp. * | 40,372 | 2,893,058 |
| The Cooper Cos., Inc. | 18,744 | 7,814,748 |
| The Ensign Group, Inc. | 19,930 | 1,554,739 |
| The Joint Corp. * | 5,490 | 480,265 |
| The Pennant Group, Inc. * | 10,680 | 273,088 |
| Tivity Health, Inc. * | 18,109 | 453,087 |
| TransMedics Group, Inc. * | 10,182 | 279,292 |
| Treace Medical Concepts, Inc. * | 4,498 | 103,724 |
| Triple-S Management Corp., Class B * | 9,507 | 335,502 |
| U.S. Physical Therapy, Inc. | 4,950 | 533,907 |
| UnitedHealth Group, Inc. | 358,572 | 165,111,649 |
| Universal Health Services, Inc., Class B | 28,905 | 3,587,110 |
| Utah Medical Products, Inc. | 1,365 | 132,173 |
| Vapotherm, Inc. * | 9,450 | 216,122 |
| Varex Imaging Corp. * | 14,217 | 381,726 |
| Veeva Systems, Inc., Class A * | 52,729 | 16,715,620 |
| ViewRay, Inc. * | 56,425 | 412,467 |
| Vivos Therapeutics, Inc. *(a) | 9,382 | 34,057 |
| Vocera Communications, Inc. * | 13,502 | 763,943 |
| VolitionRX Ltd. *(a) | 15,384 | 51,229 |
| Zimmer Biomet Holdings, Inc. | 79,570 | 11,388,058 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Zomedica Corp. *(a) | 343,967 | 175,561 |
| Zynex, Inc. *(a) | 6,859 | 85,943 |
| 1,119,620,189 | ||
| Household & Personal Products 1.3% | ||
| BellRing Brands, Inc., Class A * | 13,888 | 372,476 |
| Better Choice Co., Inc. * | 12,821 | 49,746 |
| Central Garden & Pet Co. * | 4,564 | 235,411 |
| Central Garden & Pet Co., Class A * | 16,032 | 740,678 |
| Church & Dwight Co., Inc. | 94,025 | 8,214,024 |
| Colgate-Palmolive Co. | 320,206 | 24,396,495 |
| Coty, Inc., Class A * | 126,242 | 1,070,532 |
| Edgewell Personal Care Co. | 22,028 | 770,760 |
| elf Beauty, Inc. * | 18,790 | 607,105 |
| Energizer Holdings, Inc. | 23,968 | 874,113 |
| Herbalife Nutrition Ltd. * | 38,341 | 1,779,022 |
| Inter Parfums, Inc. | 7,409 | 684,444 |
| Kimberly-Clark Corp. | 128,028 | 16,578,346 |
| LifeMD, Inc. * | 6,495 | 32,410 |
| Medifast, Inc. | 4,479 | 879,093 |
| Nature's Sunshine Products, Inc. | 4,741 | 74,860 |
| Nu Skin Enterprises, Inc., Class A | 18,845 | 756,627 |
| Oil-Dri Corp. of America | 2,782 | 96,869 |
| Reynolds Consumer Products, Inc. | 20,311 | 547,991 |
| Spectrum Brands Holdings, Inc. | 16,321 | 1,530,094 |
| The Beauty Health Co. * | 32,856 | 902,554 |
| The Clorox Co. | 47,043 | 7,668,480 |
| The Estee Lauder Cos., Inc., Class A | 88,052 | 28,557,905 |
| The Honest Co., Inc. *(a) | 9,882 | 90,420 |
| The Procter & Gamble Co. | 923,067 | 131,989,350 |
| USANA Health Sciences, Inc. * | 4,815 | 467,344 |
| Veru, Inc. * | 22,412 | 183,106 |
| WD-40 Co. | 5,334 | 1,210,818 |
| 231,361,073 | ||
| Insurance 2.0% | ||
| Aflac, Inc. | 234,041 | 12,560,980 |
| Alleghany Corp. * | 5,328 | 3,470,553 |
| Ambac Financial Group, Inc. * | 18,028 | 304,853 |
| American Equity Investment Life Holding Co. | 31,509 | 1,004,192 |
| American Financial Group, Inc. | 25,277 | 3,438,683 |
| American International Group, Inc. | 324,875 | 19,196,864 |
| American National Group, Inc. | 4,908 | 931,097 |
| AMERISAFE, Inc. | 7,229 | 428,607 |
| Aon plc, Class A | 85,792 | 27,446,577 |
| Arch Capital Group Ltd. * | 150,692 | 6,301,939 |
| Argo Group International Holdings Ltd. | 13,686 | 754,099 |
| Arthur J. Gallagher & Co. | 78,632 | 13,184,227 |
| Assurant, Inc. | 22,509 | 3,630,927 |
| Assured Guaranty Ltd. | 27,852 | 1,548,014 |
| Athene Holding Ltd., Class A * | 49,451 | 4,302,732 |
| Axis Capital Holdings Ltd. | 30,084 | 1,566,474 |
| Brighthouse Financial, Inc. * | 31,840 | 1,599,323 |
| Brown & Brown, Inc. | 88,821 | 5,605,493 |
| BRP Group, Inc., Class A * | 19,557 | 713,831 |
| Chubb Ltd. | 166,620 | 32,554,216 |
| Cincinnati Financial Corp. | 56,830 | 6,901,435 |
| Citizens, Inc. * | 24,606 | 158,463 |
| CNA Financial Corp. | 10,724 | 481,079 |
| CNO Financial Group, Inc. | 49,726 | 1,200,386 |
| Crawford & Co., Class A | 11,524 | 99,567 |
| Donegal Group, Inc., Class A | 5,782 | 82,394 |
| eHealth, Inc. * | 9,733 | 431,659 |
| Employers Holdings, Inc. | 10,575 | 408,195 |
91
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Enstar Group Ltd. * | 4,684 | 1,080,974 |
| Erie Indemnity Co., Class A | 9,596 | 1,974,953 |
| Everest Re Group Ltd. | 15,129 | 3,956,233 |
| Fidelity National Financial, Inc. | 108,085 | 5,178,352 |
| First American Financial Corp. | 41,849 | 3,060,836 |
| Genworth Financial, Inc., Class A * | 187,366 | 770,074 |
| Globe Life, Inc. | 35,922 | 3,197,776 |
| GoHealth, Inc., Class A * | 30,731 | 165,947 |
| Goosehead Insurance, Inc., Class A | 7,360 | 1,062,048 |
| Greenlight Capital Re Ltd., Class A * | 12,115 | 90,014 |
| HCI Group, Inc. | 2,337 | 313,181 |
| Heritage Insurance Holdings, Inc. | 9,756 | 63,804 |
| Hippo Holdings, Inc. * | 139,619 | 593,381 |
| Horace Mann Educators Corp. | 16,852 | 660,261 |
| Independence Holding Co. | 2,414 | 118,407 |
| Investors Title Co. | 697 | 135,079 |
| James River Group Holdings Ltd. | 14,221 | 454,361 |
| Kemper Corp. | 22,713 | 1,441,821 |
| Kinsale Capital Group, Inc. | 8,045 | 1,505,622 |
| Lemonade, Inc. *(a) | 14,359 | 892,555 |
| Lincoln National Corp. | 67,844 | 4,894,945 |
| Loews Corp. | 77,497 | 4,345,257 |
| Maiden Holdings Ltd. * | 32,952 | 107,424 |
| Markel Corp. * | 5,222 | 6,857,165 |
| Marsh & McLennan Cos., Inc. | 192,399 | 32,092,153 |
| MBIA, Inc. * | 19,104 | 296,876 |
| Mercury General Corp. | 10,059 | 548,115 |
| MetLife, Inc. | 276,735 | 17,378,958 |
| MetroMile, Inc. *(a) | 26,555 | 81,524 |
| National Western Life Group, Inc., Class A | 895 | 192,434 |
| Old Republic International Corp. | 107,238 | 2,769,958 |
| Oscar Health, Inc., Class A * | 14,534 | 251,148 |
| Palomar Holdings, Inc. * | 9,248 | 845,730 |
| Primerica, Inc. | 15,152 | 2,549,172 |
| Principal Financial Group, Inc. | 95,106 | 6,380,662 |
| ProAssurance Corp. | 20,514 | 469,976 |
| Prudential Financial, Inc. | 146,821 | 16,157,651 |
| Reinsurance Group of America, Inc. | 26,125 | 3,084,840 |
| RenaissanceRe Holdings Ltd. | 17,864 | 2,533,115 |
| RLI Corp. | 14,962 | 1,620,534 |
| Root, Inc., Class A * | 34,536 | 160,247 |
| Ryan Specialty Group Holdings, Inc., Class A * | 21,000 | 793,590 |
| Safety Insurance Group, Inc. | 5,451 | 427,413 |
| Selective Insurance Group, Inc. | 22,517 | 1,764,657 |
| Selectquote, Inc. * | 47,065 | 625,494 |
| SiriusPoint Ltd. * | 34,448 | 323,811 |
| State Auto Financial Corp. | 6,604 | 338,851 |
| Stewart Information Services Corp. | 10,208 | 726,503 |
| The Allstate Corp. | 112,097 | 13,863,036 |
| The Hanover Insurance Group, Inc. | 13,580 | 1,711,080 |
| The Hartford Financial Services Group, Inc. | 131,946 | 9,622,822 |
| The Progressive Corp. | 222,116 | 21,074,366 |
| The Travelers Cos., Inc. | 94,714 | 15,237,588 |
| Tiptree, Inc. | 7,504 | 117,137 |
| Trean Insurance Group, Inc. * | 9,030 | 84,882 |
| Trupanion, Inc. * | 13,411 | 1,373,286 |
| United Fire Group, Inc. | 7,779 | 158,925 |
| United Insurance Holdings Corp. | 6,439 | 24,597 |
| Universal Insurance Holdings, Inc. | 12,847 | 189,750 |
| Unum Group | 78,295 | 1,994,174 |
| W.R. Berkley Corp. | 53,069 | 4,224,292 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| White Mountains Insurance Group Ltd. | 1,198 | 1,263,878 |
| Willis Towers Watson plc | 49,140 | 11,905,639 |
| 368,486,193 | ||
| Materials 2.6% | ||
| Advanced Emissions Solutions, Inc. * | 5,901 | 40,068 |
| AdvanSix, Inc. * | 10,189 | 495,185 |
| Air Products & Chemicals, Inc. | 84,026 | 25,191,835 |
| Albemarle Corp. | 44,450 | 11,133,392 |
| Alcoa Corp. | 71,160 | 3,269,802 |
| Allegheny Technologies, Inc. * | 48,560 | 781,816 |
| Alpha Metallurgical Resources, Inc. * | 6,988 | 431,789 |
| Amcor plc | 587,970 | 7,096,798 |
| American Vanguard Corp. | 9,646 | 150,285 |
| Amyris, Inc. * | 69,906 | 1,036,007 |
| AptarGroup, Inc. | 24,973 | 3,016,239 |
| Arconic Corp. * | 41,487 | 1,220,548 |
| Ashland Global Holdings, Inc. | 21,298 | 2,044,821 |
| Avery Dennison Corp. | 31,294 | 6,813,330 |
| Avient Corp. | 34,375 | 1,852,125 |
| Axalta Coating Systems Ltd. * | 82,839 | 2,583,748 |
| Balchem Corp. | 12,286 | 1,880,864 |
| Ball Corp. | 124,028 | 11,346,081 |
| Berry Global Group, Inc. * | 51,368 | 3,366,659 |
| Cabot Corp. | 21,554 | 1,149,906 |
| Carpenter Technology Corp. | 18,146 | 560,348 |
| Celanese Corp. | 42,182 | 6,812,815 |
| Century Aluminum Co. * | 18,069 | 238,691 |
| CF Industries Holdings, Inc. | 82,361 | 4,678,105 |
| Chase Corp. | 3,124 | 299,904 |
| Clearwater Paper Corp. * | 6,468 | 270,556 |
| Cleveland-Cliffs, Inc. * | 173,448 | 4,181,831 |
| Coeur Mining, Inc. * | 96,888 | 613,301 |
| Commercial Metals Co. | 45,746 | 1,472,106 |
| Compass Minerals International, Inc. | 13,325 | 874,120 |
| Comstock Mining, Inc. *(a) | 14,983 | 33,412 |
| Corteva, Inc. | 279,678 | 12,068,106 |
| Crown Holdings, Inc. | 49,947 | 5,193,989 |
| Danimer Scientific, Inc. * | 27,828 | 410,741 |
| Diversey Holdings Ltd. * | 17,241 | 299,993 |
| Domtar Corp. * | 18,771 | 1,024,709 |
| Dow, Inc. | 283,953 | 15,892,849 |
| DuPont de Nemours, Inc. | 199,262 | 13,868,635 |
| Eagle Materials, Inc. | 16,027 | 2,377,766 |
| Eastman Chemical Co. | 52,054 | 5,415,178 |
| Ecolab, Inc. | 94,441 | 20,986,679 |
| Ecovyst, Inc. | 20,989 | 245,152 |
| Element Solutions, Inc. | 84,020 | 1,908,094 |
| Ferro Corp. * | 32,638 | 686,051 |
| FMC Corp. | 49,030 | 4,462,220 |
| Forterra, Inc. * | 12,648 | 301,275 |
| Freeport-McMoRan, Inc. | 558,447 | 21,064,621 |
| FutureFuel Corp. | 9,399 | 66,357 |
| Gatos Silver, Inc. * | 17,898 | 216,566 |
| GCP Applied Technologies, Inc. * | 21,333 | 482,339 |
| Glatfelter Corp. | 18,834 | 309,443 |
| Graphic Packaging Holding Co. | 106,042 | 2,113,417 |
| Greif, Inc., Class A | 12,564 | 812,640 |
| H.B. Fuller Co. | 20,256 | 1,428,251 |
| Hawkins, Inc. | 7,358 | 269,818 |
| Haynes International, Inc. | 5,389 | 216,261 |
| Hecla Mining Co. | 207,625 | 1,200,073 |
| Huntsman Corp. | 81,561 | 2,657,257 |
| Hycroft Mining Holding Corp. *(a) | 14,727 | 24,447 |
| Ingevity Corp. * | 15,178 | 1,182,518 |
| Innospec, Inc. | 9,229 | 836,240 |
92
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| International Flavors & Fragrances, Inc. | 94,736 | 13,968,823 |
| International Paper Co. | 148,641 | 7,382,998 |
| Intrepid Potash, Inc. * | 3,965 | 193,135 |
| Kaiser Aluminum Corp. | 6,085 | 591,097 |
| Koppers Holdings, Inc. * | 7,565 | 265,456 |
| Kraton Corp. * | 12,976 | 592,354 |
| Kronos Worldwide, Inc. | 9,190 | 119,746 |
| Linde plc | 196,279 | 62,652,257 |
| Livent Corp. * | 60,661 | 1,711,853 |
| Loop Industries, Inc. *(a) | 5,609 | 88,117 |
| Louisiana-Pacific Corp. | 35,724 | 2,105,215 |
| LSB Industries, Inc. * | 15,524 | 138,629 |
| LyondellBasell Industries N.V., Class A | 100,651 | 9,342,426 |
| Martin Marietta Materials, Inc. | 23,620 | 9,278,881 |
| Materion Corp. | 7,950 | 573,831 |
| McEwen Mining, Inc. * | 171,993 | 189,192 |
| Mercer International, Inc. | 14,607 | 157,317 |
| Minerals Technologies, Inc. | 12,391 | 879,018 |
| MP Materials Corp. * | 28,139 | 952,505 |
| Myers Industries, Inc. | 14,310 | 294,500 |
| Neenah, Inc. | 6,513 | 329,167 |
| NewMarket Corp. | 2,823 | 959,848 |
| Newmont Corp. | 303,788 | 16,404,552 |
| Nucor Corp. | 111,886 | 12,492,072 |
| O-I Glass, Inc. * | 60,785 | 793,244 |
| Olin Corp. | 55,279 | 3,149,797 |
| Olympic Steel, Inc. | 4,090 | 110,307 |
| Origin Materials, Inc. *(a) | 46,093 | 296,839 |
| Orion Engineered Carbons S.A. * | 24,535 | 461,258 |
| Packaging Corp. of America | 36,008 | 4,946,419 |
| Pactiv Evergreen, Inc. | 17,554 | 244,176 |
| PPG Industries, Inc. | 90,199 | 14,483,253 |
| PureCycle Technologies, Inc. *(a) | 27,778 | 371,947 |
| Quaker Chemical Corp. | 5,141 | 1,263,863 |
| Ramaco Resources, Inc. * | 4,615 | 85,793 |
| Ranpak Holdings Corp. * | 15,372 | 529,719 |
| Rayonier Advanced Materials, Inc. * | 21,499 | 154,363 |
| Reliance Steel & Aluminum Co. | 24,109 | 3,523,771 |
| Resolute Forest Products, Inc. | 28,247 | 332,185 |
| Royal Gold, Inc. | 25,285 | 2,503,721 |
| RPM International, Inc. | 49,449 | 4,311,953 |
| Ryerson Holding Corp. | 7,270 | 191,637 |
| Schnitzer Steel Industries, Inc., Class A | 10,249 | 551,396 |
| Schweitzer-Mauduit International, Inc. | 11,854 | 412,993 |
| Sealed Air Corp. | 57,233 | 3,395,062 |
| Sensient Technologies Corp. | 15,941 | 1,523,960 |
| Silgan Holdings, Inc. | 32,171 | 1,293,274 |
| Sonoco Products Co. | 37,265 | 2,159,507 |
| Steel Dynamics, Inc. | 73,909 | 4,883,907 |
| Stepan Co. | 8,266 | 992,085 |
| Summit Materials, Inc., Class A * | 45,701 | 1,629,241 |
| SunCoke Energy, Inc. | 29,816 | 215,272 |
| Sylvamo Corp. * | 13,376 | 376,668 |
| The Chemours Co. | 62,529 | 1,752,063 |
| The Mosaic Co. | 131,878 | 5,482,168 |
| The Scotts Miracle-Gro Co. | 15,479 | 2,298,012 |
| The Sherwin-Williams Co. | 91,972 | 29,119,255 |
| TimkenSteel Corp. * | 14,771 | 206,055 |
| Trecora Resources * | 10,224 | 79,543 |
| Tredegar Corp. | 10,770 | 129,886 |
| TriMas Corp. * | 17,122 | 571,019 |
| Trinseo plc | 14,912 | 835,967 |
| Tronox Holdings plc, Class A | 41,994 | 979,300 |
| UFP Technologies, Inc. * | 2,382 | 147,422 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| United States Lime & Minerals, Inc. | 712 | 87,918 |
| United States Steel Corp. | 102,104 | 2,694,525 |
| US Antimony Corp. *(a) | 55,952 | 49,159 |
| Valvoline, Inc. | 69,243 | 2,351,492 |
| Verso Corp., Class A | 9,935 | 219,365 |
| Vulcan Materials Co. | 50,602 | 9,620,452 |
| Warrior Met Coal, Inc. | 20,726 | 496,802 |
| Westlake Chemical Corp. | 12,387 | 1,205,751 |
| WestRock Co. | 101,644 | 4,889,076 |
| Worthington Industries, Inc. | 12,435 | 675,469 |
| Zymergen, Inc. * | 6,056 | 64,194 |
| 483,763,664 | ||
| Media & Entertainment 8.6% | ||
| Activision Blizzard, Inc. | 295,934 | 23,139,079 |
| Advantage Solutions, Inc. * | 41,561 | 354,931 |
| Alphabet, Inc., Class A * | 114,519 | 339,081,598 |
| Alphabet, Inc., Class C * | 107,163 | 317,782,232 |
| Altice USA, Inc., Class A * | 87,766 | 1,430,586 |
| AMC Entertainment Holdings, Inc., Class A * | 194,652 | 6,884,841 |
| AMC Networks, Inc., Class A * | 11,743 | 467,254 |
| Angi, Inc. * | 31,682 | 396,975 |
| Boston Omaha Corp., Class A * | 6,182 | 219,152 |
| Bumble, Inc., Class A * | 26,715 | 1,403,072 |
| Cable One, Inc. | 1,897 | 3,246,165 |
| Cardlytics, Inc. * | 12,282 | 966,102 |
| Cargurus, Inc. * | 33,159 | 1,112,153 |
| Cars.com, Inc. * | 24,524 | 319,302 |
| Charter Communications, Inc., Class A * | 48,234 | 32,552,644 |
| Chicken Soup For The Soul Entertainment, Inc. *(a) | 2,657 | 51,944 |
| Cinedigm Corp., Class A * | 54,801 | 129,330 |
| Cinemark Holdings, Inc. * | 41,667 | 783,340 |
| Clear Channel Outdoor Holdings, Inc. * | 176,155 | 510,850 |
| Comcast Corp., Class A | 1,741,785 | 89,580,003 |
| comScore, Inc. * | 29,328 | 114,672 |
| Cumulus Media, Inc., Class A * | 6,971 | 86,580 |
| CuriosityStream, Inc. *(a) | 12,194 | 121,574 |
| Daily Journal Corp. * | 289 | 99,191 |
| DHI Group, Inc. * | 17,016 | 79,975 |
| Discovery, Inc., Class A *(a) | 63,952 | 1,499,035 |
| Discovery, Inc., Class C * | 116,638 | 2,631,353 |
| DISH Network Corp., Class A * | 94,972 | 3,900,500 |
| Dolphin Entertainment, Inc. * | 4,149 | 46,718 |
| Electronic Arts, Inc. | 108,325 | 15,192,581 |
| Entercom Communications Corp. * | 44,339 | 143,215 |
| Entravision Communications Corp., Class A | 23,831 | 189,933 |
| Eventbrite, Inc., Class A * | 28,630 | 579,471 |
| EverQuote, Inc., Class A * | 8,283 | 114,223 |
| Fox Corp., Class A | 123,914 | 4,924,342 |
| Fox Corp., Class B | 56,970 | 2,105,611 |
| fuboTV, Inc. * | 53,539 | 1,595,998 |
| Gannett Co., Inc. * | 56,389 | 327,056 |
| Gray Television, Inc. | 33,015 | 773,872 |
| Hemisphere Media Group, Inc. * | 8,047 | 88,919 |
| IAC/InterActiveCorp. * | 31,971 | 4,871,421 |
| iHeartMedia, Inc., Class A * | 40,907 | 792,778 |
| Integral Ad Science Holding Corp. * | 6,256 | 153,710 |
| IZEA Worldwide, Inc. * | 19,013 | 38,787 |
| John Wiley & Sons, Inc., Class A | 16,679 | 903,501 |
| Lee Enterprises, Inc. * | 1,545 | 32,368 |
| Liberty Broadband Corp., Class A * | 9,251 | 1,487,283 |
93
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Liberty Broadband Corp., Class C * | 55,256 | 8,976,337 |
| Liberty Media Corp. - Liberty Braves, Class A * | 2,953 | 90,273 |
| Liberty Media Corp. - Liberty Braves, Class C * | 15,081 | 448,207 |
| Liberty Media Corp. - Liberty Formula One, Class A * | 9,926 | 517,641 |
| Liberty Media Corp. - Liberty Formula One, Class C * | 76,960 | 4,294,368 |
| Liberty Media Corp. - Liberty SiriusXM, Class A * | 30,508 | 1,518,688 |
| Liberty Media Corp. - Liberty SiriusXM, Class C * | 60,866 | 3,001,911 |
| Liberty TripAdvisor Holdings, Inc., Class A * | 24,773 | 76,549 |
| Lions Gate Entertainment Corp., Class A * | 25,145 | 325,628 |
| Lions Gate Entertainment Corp., Class B * | 46,804 | 529,821 |
| Live Nation Entertainment, Inc. * | 50,590 | 5,117,179 |
| LiveOne, Inc. *(a) | 23,394 | 53,572 |
| Loral Space & Communications, Inc. | 4,480 | 223,194 |
| Madison Square Garden Entertainment Corp. * | 9,730 | 685,673 |
| Madison Square Garden Sports Corp. * | 6,626 | 1,255,693 |
| Magnite, Inc. * | 43,092 | 1,164,777 |
| Marchex, Inc., Class B * | 22,111 | 72,524 |
| Match Group, Inc. * | 105,500 | 15,907,290 |
| MediaAlpha, Inc., Class A * | 8,473 | 148,532 |
| Meredith Corp. * | 15,467 | 900,798 |
| Meta Platforms, Inc., Class A * | 906,689 | 293,377,360 |
| National CineMedia, Inc. | 26,005 | 82,696 |
| Netflix, Inc. * | 168,348 | 116,212,308 |
| News Corp., Class A | 151,007 | 3,458,060 |
| News Corp., Class B | 44,936 | 1,013,756 |
| Nexstar Media Group, Inc., Class A | 15,769 | 2,364,246 |
| Omnicom Group, Inc. | 81,365 | 5,539,329 |
| Outbrain, Inc. *(a) | 3,577 | 60,594 |
| Pinterest, Inc., Class A * | 211,708 | 9,450,645 |
| Playstudios, Inc. *(a) | 32,347 | 139,092 |
| Playtika Holding Corp. * | 38,697 | 1,094,351 |
| PubMatic, Inc., Class A *(a) | 7,674 | 219,323 |
| QuinStreet, Inc. * | 18,824 | 263,536 |
| Reservoir Media, Inc. *(a) | 14,047 | 120,523 |
| Roku, Inc. * | 44,378 | 13,530,852 |
| Scholastic Corp. | 11,997 | 434,171 |
| Sciplay Corp., Class A * | 8,602 | 173,846 |
| Sinclair Broadcast Group, Inc., Class A | 19,082 | 498,613 |
| Sirius XM Holdings, Inc. (a) | 354,629 | 2,159,691 |
| Skillz, Inc. *(a) | 98,235 | 1,098,267 |
| Snap, Inc., Class A * | 398,687 | 20,962,962 |
| Stagwell, Inc. * | 22,872 | 198,529 |
| Super League Gaming, Inc. * | 8,293 | 26,040 |
| Take-Two Interactive Software, Inc. * | 44,263 | 8,011,603 |
| TechTarget, Inc. * | 9,480 | 894,059 |
| TEGNA, Inc. | 82,936 | 1,630,522 |
| The E.W. Scripps Co., Class A | 20,761 | 386,155 |
| The Interpublic Group of Cos., Inc. | 149,910 | 5,482,209 |
| The Marcus Corp. * | 9,696 | 180,055 |
| The New York Times Co., Class A | 64,141 | 3,501,457 |
| The Walt Disney Co. * | 691,068 | 116,838,867 |
| Thryv Holdings, Inc. * | 6,486 | 205,412 |
| Townsquare Media, Inc., Class A * | 1,801 | 23,989 |
| TripAdvisor, Inc. * | 38,069 | 1,255,135 |
| TrueCar, Inc. * | 41,115 | 172,272 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Twitter, Inc. * | 304,014 | 16,276,910 |
| Urban One, Inc. * | 12,502 | 88,389 |
| ViacomCBS, Inc., Class B | 233,436 | 8,455,052 |
| Vimeo, Inc. * | 59,092 | 1,993,173 |
| Warner Music Group Corp., Class A | 36,970 | 1,829,645 |
| WideOpenWest, Inc. * | 18,912 | 360,274 |
| World Wrestling Entertainment, Inc., Class A | 17,363 | 1,060,706 |
| Yelp, Inc. * | 26,302 | 1,016,046 |
| Zedge, Inc., Class B * | 4,350 | 50,156 |
| Ziff Davis, Inc. * | 18,447 | 2,366,197 |
| ZipRecruiter, Inc., Class A * | 4,850 | 134,733 |
| ZoomInfo Technologies, Inc., Class A * | 69,587 | 4,677,638 |
| Zynga, Inc., Class A * | 393,847 | 2,906,591 |
| 1,560,890,910 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 7.0% | ||
| 10X Genomics, Inc., Class A * | 34,788 | 5,610,261 |
| 180 Life Sciences Corp. *(a) | 7,214 | 36,575 |
| 23andMe Holding Co., Class A *(a) | 33,318 | 386,156 |
| 4D Molecular Therapeutics, Inc. * | 8,190 | 196,806 |
| 89bio, Inc. * | 4,146 | 72,970 |
| 9 Meters Biopharma, Inc. *(a) | 107,754 | 136,848 |
| AbbVie, Inc. | 672,024 | 77,060,992 |
| Abeona Therapeutics, Inc. * | 35,285 | 28,662 |
| Absci Corp. *(a) | 5,148 | 75,521 |
| ACADIA Pharmaceuticals, Inc. * | 44,402 | 797,016 |
| Acceleron Pharma, Inc. * | 20,488 | 3,568,600 |
| AcelRx Pharmaceuticals, Inc. * | 48,560 | 42,733 |
| Aclaris Therapeutics, Inc. * | 18,878 | 327,533 |
| Actinium Pharmaceuticals, Inc. *(a) | 7,539 | 59,181 |
| Acumen Pharmaceuticals, Inc. * | 4,363 | 61,300 |
| Adagio Therapeutics, Inc. *(a) | 7,019 | 205,236 |
| Adamas Pharmaceuticals, Inc. * | 17,873 | 144,950 |
| Adamis Pharmaceuticals Corp. * | 56,257 | 59,070 |
| Adaptive Biotechnologies Corp. * | 41,252 | 1,378,229 |
| Adial Pharmaceuticals, Inc. * | 11,609 | 37,265 |
| Adicet Bio, Inc. * | 5,227 | 44,952 |
| Adverum Biotechnologies, Inc. * | 32,000 | 72,640 |
| Aeglea BioTherapeutics, Inc. * | 13,223 | 96,792 |
| Aerie Pharmaceuticals, Inc. * | 20,408 | 216,937 |
| Aerovate Therapeutics, Inc. *(a) | 3,663 | 58,352 |
| Agenus, Inc. * | 82,801 | 317,956 |
| Agilent Technologies, Inc. | 115,090 | 18,125,524 |
| Agios Pharmaceuticals, Inc. * | 22,582 | 1,061,354 |
| AIkido Pharma, Inc. * | 37,539 | 33,466 |
| Akebia Therapeutics, Inc. * | 64,934 | 186,361 |
| Akero Therapeutics, Inc. * | 10,173 | 218,618 |
| Akouos, Inc. * | 10,685 | 99,584 |
| Albireo Pharma, Inc. * | 8,505 | 248,516 |
| Aldeyra Therapeutics, Inc. * | 22,201 | 202,029 |
| Alector, Inc. * | 22,141 | 481,345 |
| Aligos Therapeutics, Inc. * | 7,665 | 122,103 |
| Alkermes plc * | 60,591 | 1,835,301 |
| Allakos, Inc. * | 13,389 | 1,346,666 |
| Allogene Therapeutics, Inc. * | 28,714 | 495,029 |
| Allovir, Inc. * | 10,910 | 261,949 |
| Alnylam Pharmaceuticals, Inc. * | 45,150 | 7,204,134 |
| Alpha Teknova, Inc. * | 2,787 | 64,073 |
| Altimmune, Inc. * | 14,356 | 155,045 |
| ALX Oncology Holdings, Inc. * | 7,977 | 447,031 |
| Amgen, Inc. | 216,018 | 44,709,245 |
| Amicus Therapeutics, Inc. * | 92,562 | 971,901 |
| Amneal Pharmaceuticals, Inc. * | 43,587 | 239,293 |
| Amphastar Pharmaceuticals, Inc. * | 14,857 | 277,529 |
| Ampio Pharmaceuticals, Inc. * | 73,284 | 114,323 |
| AnaptysBio, Inc. * | 7,720 | 253,988 |
94
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Anavex Life Sciences Corp. * | 27,304 | 511,677 |
| ANI Pharmaceuticals, Inc. * | 3,733 | 139,540 |
| Anika Therapeutics, Inc. * | 5,811 | 242,028 |
| Anixa Biosciences, Inc. * | 9,149 | 43,641 |
| Annexon, Inc. * | 10,658 | 173,832 |
| Annovis Bio, Inc. *(a) | 2,061 | 54,658 |
| Antares Pharma, Inc. * | 63,488 | 237,445 |
| Apellis Pharmaceuticals, Inc. * | 27,024 | 830,718 |
| Applied Genetic Technologies Corp. * | 12,820 | 33,204 |
| Applied Molecular Transport, Inc. * | 6,743 | 151,852 |
| Applied Therapeutics, Inc. * | 6,111 | 89,648 |
| Aptevo Therapeutics, Inc. * | 1,654 | 25,207 |
| AquaBounty Technologies, Inc. *(a) | 21,009 | 83,826 |
| Arbutus Biopharma Corp. * | 36,352 | 146,499 |
| Arcturus Therapeutics Holdings, Inc. * | 8,656 | 389,087 |
| Arcus Biosciences, Inc. * | 17,923 | 599,345 |
| Arcutis Biotherapeutics, Inc. * | 11,246 | 238,190 |
| Arena Pharmaceuticals, Inc. * | 23,175 | 1,330,013 |
| Arrowhead Pharmaceuticals, Inc. * | 40,227 | 2,567,287 |
| Arvinas, Inc. * | 16,386 | 1,418,700 |
| Atara Biotherapeutics, Inc. * | 30,986 | 479,663 |
| Atea Pharmaceuticals, Inc. * | 20,179 | 234,884 |
| Athenex, Inc. * | 26,881 | 68,278 |
| Athersys, Inc. *(a) | 99,317 | 116,201 |
| Athira Pharma, Inc. * | 13,857 | 181,111 |
| Atossa Therapeutics, Inc. * | 45,962 | 118,122 |
| Atreca, Inc., Class A * | 11,123 | 57,617 |
| Avalo Therapeutics, Inc. * | 20,410 | 47,759 |
| Avantor, Inc. * | 222,296 | 8,976,312 |
| AVEO Pharmaceuticals, Inc. *(a) | 17,180 | 116,652 |
| Avid Bioservices, Inc. * | 22,759 | 698,246 |
| Avidity Biosciences, Inc. * | 16,590 | 373,275 |
| Avita Medical, Inc. * | 10,054 | 165,589 |
| Avrobio, Inc. * | 13,368 | 75,128 |
| Axsome Therapeutics, Inc. * | 11,957 | 460,344 |
| Aytu BioPharma, Inc. * | 8,368 | 20,836 |
| Beam Therapeutics, Inc. * | 16,493 | 1,464,084 |
| Berkeley Lights, Inc. * | 15,991 | 371,791 |
| BioAtla, Inc. * | 6,429 | 187,920 |
| BioCryst Pharmaceuticals, Inc. * | 68,448 | 1,021,929 |
| BioDelivery Sciences International, Inc. * | 35,519 | 144,918 |
| Biogen, Inc. * | 56,827 | 15,154,624 |
| Biohaven Pharmaceutical Holding Co., Ltd. * | 21,895 | 3,116,096 |
| BioMarin Pharmaceutical, Inc. * | 69,608 | 5,515,042 |
| Biomea Fusion, Inc. *(a) | 3,656 | 39,265 |
| BioNano Genomics, Inc. *(a) | 104,367 | 530,184 |
| Bio-Rad Laboratories, Inc., Class A * | 8,200 | 6,516,376 |
| Bio-Techne Corp. | 14,742 | 7,719,648 |
| Bioxcel Therapeutics, Inc. * | 7,800 | 227,292 |
| Black Diamond Therapeutics, Inc. * | 12,026 | 92,119 |
| Bluebird Bio, Inc. * | 25,155 | 588,879 |
| Blueprint Medicines Corp. * | 22,739 | 2,557,910 |
| Bolt Biotherapeutics, Inc. *(a) | 4,158 | 54,428 |
| BrainStorm Cell Therapeutics, Inc. * | 11,287 | 32,676 |
| Bridgebio Pharma, Inc. * | 41,473 | 2,047,937 |
| Bristol-Myers Squibb Co. | 845,434 | 49,373,346 |
| Brooklyn ImmunoTherapeutics, Inc. * | 12,246 | 104,336 |
| Bruker Corp. | 38,707 | 3,108,172 |
| C4 Therapeutics, Inc. * | 14,106 | 626,589 |
| Cabaletta Bio, Inc. *(a) | 4,700 | 64,249 |
| Calithera Biosciences, Inc. * | 46,356 | 89,467 |
| Capricor Therapeutics, Inc. * | 5,921 | 22,026 |
| Cara Therapeutics, Inc. * | 16,617 | 279,664 |
| Cardiff Oncology, Inc. * | 16,399 | 96,262 |
| CareDx, Inc. * | 20,646 | 1,052,946 |
| Caribou Biosciences, Inc. *(a) | 7,373 | 163,017 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| CASI Pharmaceuticals, Inc. * | 54,063 | 58,388 |
| Cassava Sciences, Inc. *(a) | 13,970 | 602,526 |
| Catalent, Inc. * | 64,742 | 8,925,332 |
| Catalyst Pharmaceuticals, Inc. * | 39,688 | 234,159 |
| cbdMD, Inc. * | 14,316 | 25,339 |
| Celcuity, Inc. * | 4,926 | 89,161 |
| Celldex Therapeutics, Inc. * | 18,028 | 766,911 |
| CEL-SCI Corp. *(a) | 16,481 | 184,587 |
| Century Therapeutics, Inc. *(a) | 4,176 | 93,835 |
| Cerevel Therapeutics Holdings, Inc. * | 20,950 | 851,617 |
| Charles River Laboratories International, Inc. * | 19,101 | 8,570,237 |
| Checkpoint Therapeutics, Inc. *(a) | 33,712 | 118,329 |
| ChemoCentryx, Inc. * | 18,466 | 642,801 |
| Chimerix, Inc. * | 25,859 | 135,501 |
| Chinook Therapeutics, Inc. * | 13,331 | 143,175 |
| ChromaDex Corp. * | 24,667 | 152,689 |
| Citius Pharmaceuticals, Inc. *(a) | 43,030 | 80,466 |
| Clearside Biomedical, Inc. *(a) | 20,216 | 110,379 |
| Clene, Inc. *(a) | 7,741 | 42,034 |
| Clever Leaves Holdings, Inc. * | 6,434 | 42,979 |
| Clovis Oncology, Inc. *(a) | 52,002 | 225,169 |
| Codexis, Inc. * | 22,641 | 787,228 |
| Codiak Biosciences, Inc. * | 6,438 | 92,772 |
| Cogent Biosciences, Inc. *(a) | 15,191 | 128,820 |
| Coherus Biosciences, Inc. * | 26,548 | 444,148 |
| Collegium Pharmaceutical, Inc. * | 14,056 | 275,919 |
| ContraFect Corp. * | 19,650 | 74,081 |
| Corbus Pharmaceuticals Holdings, Inc. * | 44,959 | 44,959 |
| Corcept Therapeutics, Inc. * | 40,131 | 722,358 |
| CorMedix, Inc. * | 13,948 | 67,787 |
| Cortexyme, Inc. *(a) | 6,428 | 84,850 |
| Corvus Pharmaceuticals, Inc. * | 11,217 | 50,813 |
| Crinetics Pharmaceuticals, Inc. * | 11,636 | 290,085 |
| CTI BioPharma Corp. *(a) | 37,496 | 97,115 |
| Cue Biopharma, Inc. * | 12,652 | 154,481 |
| Cullinan Oncology, Inc. * | 9,384 | 208,512 |
| Curis, Inc. * | 29,432 | 191,308 |
| Cyclerion Therapeutics, Inc. * | 15,496 | 39,670 |
| Cymabay Therapeutics, Inc. * | 26,966 | 105,167 |
| Cyteir Therapeutics, Inc. *(a) | 3,380 | 60,536 |
| Cytek Biosciences, Inc. * | 5,624 | 128,283 |
| Cytokinetics, Inc. * | 32,339 | 1,128,954 |
| CytomX Therapeutics, Inc. * | 24,803 | 147,082 |
| Dare Bioscience, Inc. *(a) | 30,532 | 44,577 |
| Day One Biopharmaceuticals, Inc. *(a) | 4,457 | 108,929 |
| Deciphera Pharmaceuticals, Inc. * | 16,532 | 552,003 |
| Denali Therapeutics, Inc. * | 34,863 | 1,685,626 |
| DermTech, Inc. * | 10,214 | 279,353 |
| Design Therapeutics, Inc. *(a) | 4,758 | 74,605 |
| DiaMedica Therapeutics, Inc. * | 6,742 | 26,631 |
| Dicerna Pharmaceuticals, Inc. * | 25,660 | 533,985 |
| Durect Corp. * | 100,516 | 128,660 |
| Dynavax Technologies Corp. * | 41,140 | 821,566 |
| Dyne Therapeutics, Inc. * | 10,151 | 147,291 |
| Eagle Pharmaceuticals, Inc. * | 5,375 | 281,489 |
| Edgewise Therapeutics, Inc. *(a) | 4,640 | 76,560 |
| Editas Medicine, Inc. * | 25,820 | 948,110 |
| Eiger BioPharmaceuticals, Inc. * | 16,477 | 111,055 |
| Elanco Animal Health, Inc. * | 180,094 | 5,921,491 |
| Eledon Pharmaceuticals, Inc. * | 5,554 | 27,770 |
| Eli Lilly & Co. | 302,157 | 76,977,517 |
| Eliem Therapeutics, Inc. * | 2,517 | 43,846 |
| Emergent BioSolutions, Inc. * | 18,203 | 867,737 |
| Enanta Pharmaceuticals, Inc. * | 6,913 | 593,481 |
| Endo International plc * | 90,744 | 385,662 |
| Enochian Biosciences, Inc. *(a) | 7,537 | 70,245 |
95
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Epizyme, Inc. * | 35,924 | 150,881 |
| Equillium, Inc. * | 6,993 | 44,126 |
| Erasca, Inc. *(a) | 7,423 | 146,827 |
| Esperion Therapeutics, Inc. *(a) | 10,670 | 95,390 |
| Eton Pharmaceuticals, Inc. * | 5,755 | 33,149 |
| Evelo Biosciences, Inc. *(a) | 10,700 | 94,695 |
| Evofem Biosciences, Inc. * | 67,642 | 46,511 |
| Evolus, Inc. * | 13,267 | 103,748 |
| Exact Sciences Corp. * | 65,525 | 6,239,290 |
| Exagen, Inc. * | 4,095 | 47,584 |
| Exelixis, Inc. * | 122,266 | 2,629,942 |
| EyePoint Pharmaceuticals, Inc. * | 7,477 | 85,761 |
| Fate Therapeutics, Inc. * | 30,480 | 1,639,824 |
| FibroGen, Inc. * | 32,119 | 357,163 |
| Finch Therapeutics Group, Inc. *(a) | 3,679 | 49,299 |
| Flexion Therapeutics, Inc. * | 17,854 | 165,149 |
| Fluidigm Corp. * | 27,127 | 139,704 |
| Foghorn Therapeutics, Inc. *(a) | 8,501 | 107,878 |
| Forma Therapeutics Holdings, Inc. * | 12,637 | 234,543 |
| Forte Biosciences, Inc. *(a) | 3,571 | 9,677 |
| Fortress Biotech, Inc. * | 29,965 | 97,686 |
| Frequency Therapeutics, Inc. *(a) | 11,156 | 70,060 |
| F-star Therapeutics, Inc. * | 7,715 | 52,076 |
| Fulcrum Therapeutics, Inc. * | 10,895 | 241,215 |
| G1 Therapeutics, Inc. * | 15,530 | 225,030 |
| Galectin Therapeutics, Inc. *(a) | 17,413 | 55,199 |
| Gemini Therapeutics, Inc. * | 11,283 | 42,875 |
| Generation Bio Co. * | 16,915 | 354,538 |
| Geron Corp. * | 124,831 | 192,240 |
| Gilead Sciences, Inc. | 477,058 | 30,951,523 |
| Global Blood Therapeutics, Inc. * | 21,135 | 771,850 |
| GlycoMimetics, Inc. * | 34,903 | 66,665 |
| Gossamer Bio, Inc. * | 19,746 | 245,245 |
| Graphite Bio, Inc. *(a) | 5,814 | 74,070 |
| Greenwich Lifesciences, Inc. * | 1,259 | 44,518 |
| Gritstone bio, Inc. * | 15,900 | 174,741 |
| GT Biopharma, Inc. * | 7,435 | 48,030 |
| Halozyme Therapeutics, Inc. * | 53,368 | 2,031,720 |
| Harmony Biosciences Holdings, Inc. * | 8,727 | 361,909 |
| Harpoon Therapeutics, Inc. * | 10,228 | 64,027 |
| Harrow Health, Inc. * | 12,577 | 126,902 |
| Harvard Bioscience, Inc. * | 14,274 | 107,483 |
| Heat Biologics, Inc. *(a) | 9,763 | 52,134 |
| Hepion Pharmaceuticals, Inc. *(a) | 31,535 | 45,095 |
| Heron Therapeutics, Inc. * | 40,824 | 449,472 |
| Homology Medicines, Inc. * | 19,308 | 110,635 |
| Hookipa Pharma, Inc. * | 7,000 | 34,090 |
| Horizon Therapeutics plc * | 85,617 | 10,266,334 |
| Humanigen, Inc. *(a) | 17,832 | 128,034 |
| iBio, Inc. * | 74,003 | 57,722 |
| Icosavax, Inc. * | 4,633 | 121,199 |
| Ideaya Biosciences, Inc. * | 12,679 | 271,838 |
| IGM Biosciences, Inc. * | 3,210 | 150,613 |
| Ikena Oncology, Inc. *(a) | 3,541 | 38,066 |
| Illumina, Inc. * | 55,866 | 23,187,742 |
| Imago Biosciences, Inc. * | 3,499 | 93,143 |
| Immuneering Corp., Class A * | 2,997 | 81,219 |
| Immunic, Inc. * | 6,574 | 61,270 |
| ImmunityBio, Inc. *(a) | 25,226 | 197,520 |
| ImmunoGen, Inc. * | 73,335 | 442,210 |
| Immunome, Inc. *(a) | 4,032 | 94,510 |
| Immunovant, Inc. * | 17,821 | 143,281 |
| Impel Neuropharma Inc. *(a) | 2,871 | 30,691 |
| Incyte Corp. * | 71,241 | 4,771,722 |
| Infinity Pharmaceuticals, Inc. * | 29,948 | 76,068 |
| Inhibrx, Inc. * | 7,931 | 318,747 |
| Inmune Bio, Inc. *(a) | 5,159 | 94,874 |
| Innoviva, Inc. * | 23,087 | 402,868 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Inotiv, Inc. * | 6,479 | 313,519 |
| Inovio Pharmaceuticals, Inc. *(a) | 81,574 | 582,438 |
| Inozyme Pharma, Inc. * | 5,930 | 55,386 |
| Insmed, Inc. * | 44,300 | 1,335,645 |
| Instil Bio, Inc. * | 6,618 | 134,809 |
| Intellia Therapeutics, Inc. * | 25,920 | 3,446,842 |
| Intercept Pharmaceuticals, Inc. * | 11,183 | 188,545 |
| Intra-Cellular Therapies, Inc. * | 28,771 | 1,239,167 |
| Invitae Corp. * | 75,519 | 2,001,253 |
| Ionis Pharmaceuticals, Inc. * | 53,081 | 1,691,691 |
| Iovance Biotherapeutics, Inc. * | 51,664 | 1,255,952 |
| IQVIA Holdings, Inc. * | 72,796 | 19,030,330 |
| Ironwood Pharmaceuticals, Inc. * | 61,992 | 791,638 |
| IsoRay, Inc. * | 55,471 | 33,560 |
| iTeos Therapeutics, Inc. * | 7,943 | 212,475 |
| IVERIC bio, Inc. * | 40,191 | 711,381 |
| Jaguar Health, Inc. * | 13,784 | 29,360 |
| Janux Therapeutics, Inc. * | 4,808 | 117,075 |
| Jazz Pharmaceuticals plc * | 23,482 | 3,124,045 |
| Johnson & Johnson | 1,001,112 | 163,061,123 |
| Jounce Therapeutics, Inc. * | 16,599 | 145,739 |
| Kadmon Holdings, Inc. * | 64,612 | 610,583 |
| Kala Pharmaceuticals, Inc. *(a) | 16,458 | 28,637 |
| Kaleido Biosciences, Inc. * | 8,510 | 36,593 |
| KalVista Pharmaceuticals, Inc. * | 8,852 | 159,159 |
| Karuna Therapeutics, Inc. * | 8,344 | 1,171,331 |
| Karyopharm Therapeutics, Inc. * | 32,474 | 177,308 |
| KemPharm, Inc. *(a) | 11,139 | 105,821 |
| Keros Therapeutics, Inc. * | 5,425 | 226,331 |
| Kezar Life Sciences, Inc. * | 13,060 | 104,480 |
| Kiniksa Pharmaceuticals Ltd., Class A * | 12,701 | 131,963 |
| Kinnate Biopharma, Inc. * | 6,937 | 164,892 |
| Kodiak Sciences, Inc. * | 13,152 | 1,539,968 |
| Kronos Bio, Inc. * | 16,223 | 267,031 |
| Krystal Biotech, Inc. * | 7,641 | 382,738 |
| Kura Oncology, Inc. * | 24,322 | 399,367 |
| Kymera Therapeutics, Inc. * | 13,328 | 784,753 |
| La Jolla Pharmaceutical Co. * | 2,011 | 8,084 |
| Landos Biopharma, Inc. * | 3,611 | 48,604 |
| Lannett Co., Inc. * | 15,487 | 42,280 |
| Larimar Therapeutics, Inc. * | 4,106 | 49,067 |
| Lexicon Pharmaceuticals, Inc. * | 24,980 | 132,144 |
| Ligand Pharmaceuticals, Inc. * | 6,449 | 941,167 |
| Lineage Cell Therapeutics, Inc. *(a) | 45,545 | 103,843 |
| Liquidia Corp. *(a) | 20,793 | 77,974 |
| LogicBio Therapeutics, Inc. * | 11,498 | 41,968 |
| Lyell Immunopharma, Inc. *(a) | 9,978 | 139,093 |
| MacroGenics, Inc. * | 20,462 | 399,623 |
| Madrigal Pharmaceuticals, Inc. * | 5,052 | 392,793 |
| Magenta Therapeutics, Inc. * | 19,635 | 125,664 |
| MannKind Corp. * | 94,496 | 445,076 |
| Maravai LifeSciences Holdings, Inc., Class A * | 41,154 | 1,740,403 |
| Marinus Pharmaceuticals, Inc. * | 12,809 | 147,304 |
| Marker Therapeutics, Inc. * | 26,562 | 39,046 |
| Matinas BioPharma Holdings, Inc. * | 78,387 | 87,010 |
| MediciNova, Inc. *(a) | 17,843 | 59,952 |
| Medpace Holdings, Inc. * | 11,010 | 2,494,315 |
| MEI Pharma, Inc. * | 50,519 | 142,464 |
| Merck & Co., Inc. | 963,259 | 84,814,955 |
| Mersana Therapeutics, Inc. * | 26,564 | 227,388 |
| Mettler-Toledo International, Inc. * | 8,792 | 13,019,897 |
| MiMedx Group, Inc. * | 31,423 | 215,248 |
| Mirati Therapeutics, Inc. * | 17,780 | 3,360,776 |
| Mirum Pharmaceuticals, Inc. * | 7,069 | 112,256 |
| Moderna, Inc. * | 133,646 | 46,135,936 |
| Molecular Templates, Inc. * | 15,226 | 79,480 |
96
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Moleculin Biotech, Inc. *(a) | 20,198 | 53,323 |
| Monte Rosa Therapeutics, Inc. *(a) | 4,528 | 106,182 |
| Morphic Holding, Inc. * | 9,959 | 572,642 |
| Mustang Bio, Inc. * | 31,286 | 70,081 |
| MyMD Pharmaceuticals, Inc. * | 13,965 | 133,785 |
| Myovant Sciences Ltd. * | 16,843 | 368,525 |
| Myriad Genetics, Inc. * | 28,958 | 891,038 |
| NanoString Technologies, Inc. * | 17,203 | 830,905 |
| Natera, Inc. * | 33,560 | 3,844,969 |
| Nautilus Biotechnology, Inc. * | 22,256 | 118,847 |
| Nektar Therapeutics * | 69,754 | 1,057,471 |
| NeoGenomics, Inc. * | 46,417 | 2,135,182 |
| Neoleukin Therapeutics, Inc. * | 13,687 | 100,326 |
| Neurocrine Biosciences, Inc. * | 36,158 | 3,811,415 |
| NexImmune, Inc. * | 2,427 | 27,619 |
| NGM Biopharmaceuticals, Inc. * | 15,070 | 278,343 |
| Nkarta, Inc. * | 5,850 | 91,728 |
| Novan, Inc. *(a) | 4,674 | 31,176 |
| Novavax, Inc. * | 28,264 | 4,206,531 |
| Nurix Therapeutics, Inc. * | 15,286 | 511,317 |
| Nuvalent, Inc., Class A *(a) | 3,544 | 86,580 |
| Nuvation Bio, Inc. * | 43,071 | 394,961 |
| Ocugen, Inc. *(a) | 76,012 | 899,982 |
| Ocular Therapeutix, Inc. * | 27,841 | 184,864 |
| Odonate Therapeutics, Inc. * | 19,636 | 60,283 |
| Olema Pharmaceuticals, Inc. * | 11,384 | 307,368 |
| Omega Therapeutics, Inc. * | 3,087 | 90,696 |
| Omeros Corp. * | 23,071 | 144,655 |
| Oncocyte Corp. * | 30,590 | 100,335 |
| Onconova Therapeutics, Inc. * | 7,111 | 24,604 |
| OncoSec Medical, Inc. * | 9,259 | 15,277 |
| Oncternal Therapeutics, Inc. * | 15,853 | 58,181 |
| OpGen, Inc. *(a) | 22,600 | 40,454 |
| OPKO Health, Inc. * | 159,773 | 605,540 |
| Organogenesis Holdings, Inc. * | 24,711 | 271,327 |
| Organon & Co. | 95,960 | 3,526,530 |
| Orgenesis, Inc. * | 9,467 | 45,536 |
| ORIC Pharmaceuticals, Inc. * | 12,565 | 183,952 |
| Otonomy, Inc. * | 16,843 | 35,370 |
| Outlook Therapeutics, Inc. *(a) | 34,436 | 71,283 |
| Ovid therapeutics, Inc. * | 19,452 | 66,137 |
| Oyster Point Pharma, Inc. * | 4,006 | 47,191 |
| Pacific Biosciences of California, Inc. * | 76,628 | 2,029,109 |
| Pacira BioSciences, Inc. * | 17,348 | 906,953 |
| Palatin Technologies, Inc. * | 56,900 | 23,215 |
| Paratek Pharmaceuticals, Inc. * | 17,405 | 87,373 |
| Passage Bio, Inc. * | 14,850 | 129,492 |
| PDS Biotechnology Corp. *(a) | 7,907 | 95,200 |
| PerkinElmer, Inc. | 42,669 | 7,547,719 |
| Perrigo Co., plc | 51,662 | 2,332,539 |
| Personalis, Inc. * | 14,193 | 278,467 |
| Pfizer, Inc. | 2,133,839 | 93,334,118 |
| Phathom Pharmaceuticals, Inc. * | 6,778 | 159,486 |
| Phibro Animal Health Corp., Class A | 8,185 | 179,579 |
| Pieris Pharmaceuticals, Inc. * | 19,437 | 89,021 |
| Pliant Therapeutics, Inc. * | 9,246 | 147,289 |
| PLx Pharma, Inc. * | 8,708 | 107,195 |
| PMV Pharmaceuticals, Inc. * | 10,467 | 247,231 |
| Point Biopharma Global, Inc. *(a) | 29,078 | 232,042 |
| Poseida Therapeutics, Inc. * | 13,528 | 86,714 |
| PPD, Inc. * | 45,369 | 2,140,056 |
| Praxis Precision Medicines, Inc. * | 13,673 | 284,398 |
| Precigen, Inc. * | 33,799 | 163,249 |
| Precision BioSciences, Inc. * | 19,968 | 189,496 |
| Prelude Therapeutics, Inc. *(a) | 5,389 | 94,739 |
| Prestige Consumer Healthcare, Inc. * | 18,817 | 1,128,832 |
| Prometheus Biosciences, Inc. * | 4,232 | 134,832 |
| Protagonist Therapeutics, Inc. * | 16,399 | 510,993 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Prothena Corp. plc * | 13,117 | 726,026 |
| Provention Bio, Inc. * | 21,027 | 131,629 |
| PTC Therapeutics, Inc. * | 26,778 | 1,015,690 |
| Puma Biotechnology, Inc. * | 12,061 | 61,511 |
| Quanterix Corp. * | 12,834 | 649,529 |
| Quantum-Si, Inc. *(a) | 32,018 | 258,065 |
| Radius Health, Inc. * | 17,803 | 384,545 |
| Rain Therapeutics, Inc. * | 3,166 | 49,326 |
| Rani Therapeutics Holdings, Inc., Class A *(a) | 2,793 | 64,239 |
| Rapid Micro Biosystems, Inc., Class A * | 3,428 | 69,897 |
| RAPT Therapeutics, Inc. * | 7,603 | 240,103 |
| Reata Pharmaceuticals, Inc., Class A * | 10,548 | 1,012,713 |
| Recro Pharma, Inc. * | 5,876 | 11,458 |
| Recursion Pharmaceuticals, Inc., Class A *(a) | 9,451 | 180,987 |
| Regeneron Pharmaceuticals, Inc. * | 40,010 | 25,603,999 |
| REGENXBIO, Inc. * | 14,834 | 525,717 |
| Relay Therapeutics, Inc. * | 28,482 | 947,026 |
| Relmada Therapeutics, Inc. * | 7,824 | 183,629 |
| Repligen Corp. * | 19,428 | 5,643,834 |
| Replimune Group, Inc. * | 11,714 | 345,680 |
| Revance Therapeutics, Inc. * | 25,241 | 347,064 |
| REVOLUTION Medicines, Inc. * | 23,823 | 701,111 |
| Rhythm Pharmaceuticals, Inc. * | 16,923 | 194,784 |
| Rigel Pharmaceuticals, Inc. * | 65,122 | 218,810 |
| Rocket Pharmaceuticals, Inc. * | 16,917 | 502,604 |
| Royalty Pharma plc, Class A | 135,150 | 5,342,479 |
| Rubius Therapeutics, Inc. * | 15,779 | 224,220 |
| Sage Therapeutics, Inc. * | 19,723 | 796,020 |
| Sana Biotechnology, Inc. * | 30,790 | 638,585 |
| Sangamo Therapeutics, Inc. * | 46,627 | 378,611 |
| Sarepta Therapeutics, Inc. * | 32,718 | 2,588,975 |
| Satsuma Pharmaceuticals, Inc. * | 12,319 | 71,450 |
| Savara, Inc. * | 42,882 | 49,743 |
| Scholar Rock Holding Corp. * | 9,673 | 254,400 |
| SCYNEXIS, Inc. * | 8,875 | 44,464 |
| Seagen, Inc. * | 50,478 | 8,900,786 |
| Seelos Therapeutics, Inc. *(a) | 39,148 | 84,560 |
| Seer, Inc. * | 13,439 | 496,168 |
| Selecta Biosciences, Inc. * | 33,810 | 121,378 |
| SELLAS Life Sciences Group, Inc. * | 4,570 | 39,713 |
| Sensei Biotherapeutics, Inc. * | 2,714 | 23,585 |
| Seres Therapeutics, Inc. * | 22,004 | 133,784 |
| Sesen Bio, Inc. * | 67,895 | 82,153 |
| Shattuck Labs, Inc. * | 11,210 | 216,353 |
| SIGA Technologies, Inc. * | 17,097 | 123,269 |
| Sigilon Therapeutics, Inc. * | 8,164 | 44,004 |
| Silverback Therapeutics, Inc. *(a) | 8,898 | 76,790 |
| Singular Genomics Systems, Inc. * | 4,713 | 65,275 |
| Sio Gene Therapies, Inc. * | 20,023 | 38,244 |
| Solid Biosciences, Inc. * | 24,532 | 49,800 |
| Sorrento Therapeutics, Inc. *(a) | 113,396 | 777,897 |
| Sotera Health Co. * | 37,665 | 930,325 |
| Spectrum Pharmaceuticals, Inc. * | 58,461 | 106,984 |
| Spero Therapeutics, Inc. * | 12,120 | 212,827 |
| SpringWorks Therapeutics, Inc. * | 9,517 | 638,210 |
| SQZ Biotechnologies Co. * | 7,793 | 104,348 |
| Statera Biopharma, Inc. * | 12,170 | 46,368 |
| Stoke Therapeutics, Inc. * | 9,346 | 213,369 |
| Supernus Pharmaceuticals, Inc. * | 20,133 | 600,970 |
| Surface Oncology, Inc. * | 12,172 | 90,316 |
| Surrozen, Inc. *(a) | 8,548 | 59,836 |
| Sutro Biopharma, Inc. * | 15,860 | 319,738 |
| Syndax Pharmaceuticals, Inc. * | 17,199 | 334,521 |
| Syneos Health, Inc. * | 39,681 | 3,703,825 |
| Syros Pharmaceuticals, Inc. * | 20,746 | 85,681 |
97
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| T2 Biosystems, Inc. * | 47,515 | 36,800 |
| Talaris Therapeutics, Inc. * | 3,539 | 59,774 |
| Tango Therapeutics, Inc. * | 24,311 | 312,153 |
| Tarsus Pharmaceuticals, Inc. * | 2,363 | 65,597 |
| Taysha Gene Therapies, Inc. * | 9,484 | 148,330 |
| TCR2 Therapeutics, Inc. * | 13,931 | 87,765 |
| Tempest Therapeutics, Inc. * | 3,628 | 42,520 |
| Tenaya Therapeutics, Inc. *(a) | 4,937 | 126,930 |
| Terns Pharmaceuticals, Inc. * | 2,797 | 26,572 |
| TFF Pharmaceuticals, Inc. * | 11,966 | 92,258 |
| TG Therapeutics, Inc. * | 50,356 | 1,572,114 |
| TherapeuticsMD, Inc. * | 137,891 | 100,385 |
| Theravance Biopharma, Inc. * | 19,208 | 149,246 |
| Thermo Fisher Scientific, Inc. | 149,629 | 94,725,631 |
| Tonix Pharmaceuticals Holding Corp. * | 126,272 | 69,702 |
| Tracon Pharmaceuticals, Inc. * | 6,423 | 23,765 |
| Travere Therapeutics, Inc. * | 20,515 | 591,037 |
| Trevena, Inc. * | 93,743 | 94,680 |
| Tricida, Inc. * | 9,420 | 43,049 |
| Turning Point Therapeutics, Inc. * | 18,818 | 782,452 |
| Twist Bioscience Corp. * | 18,874 | 2,242,231 |
| Tyme Technologies, Inc. * | 42,998 | 40,977 |
| Ultragenyx Pharmaceutical, Inc. * | 26,130 | 2,192,830 |
| uniQure N.V. * | 14,271 | 434,837 |
| United Therapeutics Corp. * | 16,934 | 3,230,330 |
| UNITY Biotechnology, Inc. * | 12,594 | 30,100 |
| Vanda Pharmaceuticals, Inc. * | 20,728 | 354,863 |
| Vaxart, Inc. *(a) | 46,126 | 309,505 |
| Vaxcyte, Inc. * | 12,360 | 289,224 |
| VBI Vaccines, Inc. * | 95,399 | 276,657 |
| Vera Therapeutics, Inc. * | 2,054 | 39,745 |
| Veracyte, Inc. * | 26,797 | 1,283,040 |
| Verastem, Inc. * | 75,269 | 195,699 |
| Vericel Corp. * | 17,509 | 805,764 |
| Verrica Pharmaceuticals, Inc. *(a) | 4,072 | 51,266 |
| Vertex Pharmaceuticals, Inc. * | 98,812 | 18,273,303 |
| Verve Therapeutics, Inc. * | 5,474 | 253,939 |
| Viatris, Inc. | 461,868 | 6,165,938 |
| Viking Therapeutics, Inc. * | 26,681 | 155,283 |
| Vincerx Pharma, Inc. * | 4,112 | 57,445 |
| Vir Biotechnology, Inc. * | 27,642 | 1,042,933 |
| Viracta Therapeutics, Inc. * | 6,942 | 40,819 |
| VistaGen Therapeutics, Inc. * | 68,749 | 157,435 |
| Vor BioPharma, Inc. *(a) | 3,785 | 59,538 |
| Voyager Therapeutics, Inc. * | 7,809 | 28,269 |
| Waters Corp. * | 23,352 | 8,583,028 |
| WaVe Life Sciences Ltd. * | 13,973 | 64,136 |
| Werewolf Therapeutics, Inc. *(a) | 3,384 | 53,027 |
| West Pharmaceutical Services, Inc. | 28,188 | 12,117,457 |
| XBiotech, Inc. | 5,316 | 77,933 |
| Xencor, Inc. * | 22,478 | 889,230 |
| Xeris Biopharma Holdings, Inc. * | 22,478 | 41,809 |
| XOMA Corp. *(a) | 4,338 | 108,450 |
| Y-mAbs Therapeutics, Inc. * | 13,495 | 331,437 |
| Zentalis Pharmaceuticals, Inc. * | 13,915 | 1,119,323 |
| ZIOPHARM Oncology, Inc. * | 82,975 | 124,463 |
| Zoetis, Inc. | 180,322 | 38,985,616 |
| Zogenix, Inc. * | 20,875 | 320,014 |
| Zynerba Pharmaceuticals, Inc. * | 18,093 | 69,296 |
| 1,272,584,652 | ||
| Real Estate 3.4% | ||
| Acadia Realty Trust | 32,413 | 692,990 |
| Agree Realty Corp. | 26,097 | 1,854,453 |
| Alexander & Baldwin, Inc. | 28,776 | 705,875 |
| Alexander's, Inc. | 799 | 222,745 |
| Alexandria Real Estate Equities, Inc. | 52,680 | 10,754,095 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Alpine Income Property Trust, Inc. | 4,623 | 85,248 |
| Altisource Portfolio Solutions S.A. * | 4,891 | 63,583 |
| American Assets Trust, Inc. | 20,223 | 765,036 |
| American Campus Communities, Inc. | 52,550 | 2,822,986 |
| American Finance Trust, Inc. | 44,640 | 369,619 |
| American Homes 4 Rent, Class A | 103,746 | 4,212,088 |
| American Tower Corp. | 172,947 | 48,765,866 |
| Americold Realty Trust | 99,689 | 2,937,835 |
| Apartment Income REIT Corp. | 59,315 | 3,179,877 |
| Apartment Investment & Management Co., Class A | 58,899 | 446,454 |
| Apple Hospitality REIT, Inc. | 82,304 | 1,292,996 |
| Armada Hoffler Properties, Inc. | 23,407 | 320,910 |
| Ashford Hospitality Trust, Inc. *(a) | 10,863 | 153,494 |
| AvalonBay Communities, Inc. | 53,016 | 12,547,827 |
| Bluerock Residential Growth REIT, Inc. | 12,401 | 167,786 |
| Boston Properties, Inc. | 53,843 | 6,118,719 |
| Braemar Hotels & Resorts, Inc. * | 18,407 | 93,508 |
| Brandywine Realty Trust | 62,660 | 830,245 |
| Brixmor Property Group, Inc. | 112,061 | 2,626,710 |
| Broadstone Net Lease, Inc. | 60,940 | 1,620,395 |
| BRT Apartments Corp. | 5,530 | 110,047 |
| Camden Property Trust | 38,171 | 6,225,690 |
| CareTrust REIT, Inc. | 38,237 | 793,418 |
| CatchMark Timber Trust, Inc., Class A | 18,210 | 155,878 |
| CBRE Group, Inc., Class A * | 127,616 | 13,282,273 |
| Cedar Realty Trust, Inc. | 4,511 | 100,460 |
| Centerspace | 5,650 | 572,006 |
| Chatham Lodging Trust * | 18,505 | 234,828 |
| City Office REIT, Inc. | 16,407 | 311,241 |
| Clipper Realty, Inc. | 10,564 | 90,639 |
| Columbia Property Trust, Inc. | 44,547 | 853,966 |
| Community Healthcare Trust, Inc. | 9,015 | 431,278 |
| CorePoint Lodging, Inc. * | 15,847 | 273,202 |
| CoreSite Realty Corp. | 16,792 | 2,392,188 |
| Corporate Office Properties Trust | 42,489 | 1,152,302 |
| Cousins Properties, Inc. | 56,876 | 2,252,858 |
| Crown Castle International Corp. | 164,130 | 29,592,639 |
| CTO Realty Growth, Inc. | 2,566 | 137,563 |
| CubeSmart | 76,400 | 4,202,764 |
| Cushman & Wakefield plc * | 56,483 | 1,038,722 |
| CyrusOne, Inc. | 47,082 | 3,861,666 |
| DiamondRock Hospitality Co. * | 81,438 | 736,200 |
| Digital Realty Trust, Inc. | 107,684 | 16,993,612 |
| DigitalBridge Group, Inc. * | 194,099 | 1,300,463 |
| Diversified Healthcare Trust | 96,357 | 350,739 |
| Doma Holdings, Inc. *(a) | 67,354 | 439,822 |
| Douglas Emmett, Inc. | 66,250 | 2,165,050 |
| Duke Realty Corp. | 143,414 | 8,065,603 |
| Easterly Government Properties, Inc. | 31,042 | 652,813 |
| EastGroup Properties, Inc. | 15,320 | 3,029,990 |
| Empire State Realty Trust, Inc., Class A | 51,702 | 500,475 |
| EPR Properties | 28,638 | 1,437,914 |
| Equinix, Inc. | 34,147 | 28,583,429 |
| Equity Commonwealth * | 46,995 | 1,218,580 |
| Equity LifeStyle Properties, Inc. | 64,759 | 5,472,783 |
| Equity Residential | 129,434 | 11,183,098 |
| Essential Properties Realty Trust, Inc. | 44,305 | 1,319,846 |
| Essex Property Trust, Inc. | 24,731 | 8,406,809 |
| eXp World Holdings, Inc. | 24,748 | 1,276,997 |
| Extra Space Storage, Inc. | 50,894 | 10,044,949 |
| Farmland Partners, Inc. | 11,255 | 126,506 |
| Fathom Holdings, Inc. *(a) | 1,327 | 33,560 |
| Federal Realty Investment Trust | 26,580 | 3,198,903 |
| First Industrial Realty Trust, Inc. | 49,018 | 2,854,318 |
| Forestar Group, Inc. * | 6,845 | 133,957 |
98
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Four Corners Property Trust, Inc. | 28,253 | 819,337 |
| Franklin Street Properties Corp. | 36,290 | 163,305 |
| FRP Holdings, Inc. * | 2,400 | 137,280 |
| Gaming & Leisure Properties, Inc. | 84,003 | 4,073,305 |
| Getty Realty Corp. | 15,982 | 513,342 |
| Gladstone Commercial Corp. | 14,107 | 308,379 |
| Gladstone Land Corp. | 12,206 | 270,241 |
| Global Medical REIT, Inc. | 21,402 | 354,845 |
| Global Net Lease, Inc. | 40,979 | 656,484 |
| Healthcare Realty Trust, Inc. | 55,109 | 1,821,904 |
| Healthcare Trust of America, Inc., Class A | 83,607 | 2,791,638 |
| Healthpeak Properties, Inc. | 205,141 | 7,284,557 |
| Hersha Hospitality Trust * | 15,131 | 135,120 |
| Highwoods Properties, Inc. | 38,838 | 1,741,496 |
| Host Hotels & Resorts, Inc. * | 271,612 | 4,571,230 |
| Hudson Pacific Properties, Inc. | 56,996 | 1,467,647 |
| Independence Realty Trust, Inc. | 40,917 | 966,869 |
| Indus Realty Trust, Inc. | 2,101 | 146,440 |
| Industrial Logistics Properties Trust | 24,598 | 690,958 |
| Innovative Industrial Properties, Inc. | 9,036 | 2,377,281 |
| Invitation Homes, Inc. | 219,289 | 9,045,671 |
| Iron Mountain, Inc. | 110,176 | 5,028,433 |
| iStar, Inc. | 26,743 | 674,993 |
| JBG SMITH Properties | 44,378 | 1,280,749 |
| Jones Lang LaSalle, Inc. * | 19,290 | 4,981,257 |
| Kennedy-Wilson Holdings, Inc. | 47,300 | 1,058,101 |
| Kilroy Realty Corp. | 40,122 | 2,703,420 |
| Kimco Realty Corp. | 232,820 | 5,261,732 |
| Kite Realty Group Trust | 83,743 | 1,699,983 |
| Lamar Advertising Co., Class A | 33,016 | 3,737,411 |
| Lexington Realty Trust | 106,137 | 1,546,416 |
| Life Storage, Inc. | 29,971 | 4,010,420 |
| LTC Properties, Inc. | 15,488 | 493,448 |
| Mack-Cali Realty Corp. * | 32,057 | 583,117 |
| Marcus & Millichap, Inc. * | 10,209 | 480,844 |
| Medical Properties Trust, Inc. | 225,921 | 4,818,895 |
| Mid-America Apartment Communities, Inc. | 44,042 | 8,993,817 |
| Monmouth Real Estate Investment Corp. | 36,583 | 689,590 |
| National Health Investors, Inc. | 17,531 | 942,817 |
| National Retail Properties, Inc. | 66,479 | 3,015,487 |
| National Storage Affiliates Trust | 30,656 | 1,914,774 |
| NETSTREIT Corp. | 16,031 | 388,591 |
| New Century Financial Corp. *(b) | 3,600 | 0 |
| Newmark Group, Inc., Class A | 63,798 | 949,314 |
| NexPoint Residential Trust, Inc. | 8,413 | 595,809 |
| Office Properties Income Trust | 20,035 | 513,297 |
| Omega Healthcare Investors, Inc. | 91,558 | 2,688,143 |
| One Liberty Properties, Inc. | 6,163 | 192,655 |
| Opendoor Technologies, Inc. * | 145,641 | 3,453,148 |
| Outfront Media, Inc. | 56,745 | 1,412,383 |
| Paramount Group, Inc. | 65,064 | 551,743 |
| Park Hotels & Resorts, Inc. * | 92,751 | 1,718,676 |
| Pebblebrook Hotel Trust | 49,185 | 1,104,695 |
| Pennsylvania Real Estate Investment Trust * | 28,232 | 47,994 |
| Phillips Edison & Co., Inc. | 7,413 | 223,428 |
| Physicians Realty Trust | 85,018 | 1,616,192 |
| Piedmont Office Realty Trust, Inc., Class A | 49,325 | 876,012 |
| Plymouth Industrial REIT, Inc. | 13,548 | 346,287 |
| Postal Realty Trust, Inc., Class A | 7,337 | 142,558 |
| PotlatchDeltic Corp. | 25,116 | 1,312,813 |
| Power REIT * | 1,195 | 58,435 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Preferred Apartment Communities, Inc., Class A | 20,935 | 263,990 |
| Prologis, Inc. | 280,836 | 40,709,987 |
| PS Business Parks, Inc. | 7,924 | 1,408,095 |
| Public Storage | 57,830 | 19,209,969 |
| Rafael Holdings, Inc., Class B *(a) | 4,182 | 31,616 |
| Rayonier, Inc. | 53,161 | 1,984,500 |
| RE/MAX Holdings, Inc., Class A | 7,179 | 228,364 |
| Realogy Holdings Corp. * | 44,831 | 776,473 |
| Realty Income Corp. | 148,003 | 10,571,854 |
| Redfin Corp. * | 39,957 | 2,051,392 |
| Regency Centers Corp. | 58,292 | 4,104,340 |
| Retail Opportunity Investments Corp. | 46,959 | 834,461 |
| Retail Value, Inc. | 7,532 | 47,150 |
| Rexford Industrial Realty, Inc. | 52,273 | 3,512,746 |
| RLJ Lodging Trust | 63,153 | 910,666 |
| RPT Realty | 29,352 | 390,088 |
| Ryman Hospitality Properties, Inc. * | 20,625 | 1,764,262 |
| Sabra Health Care REIT, Inc. | 85,094 | 1,204,080 |
| Safehold, Inc. | 5,455 | 407,488 |
| Saul Centers, Inc. | 4,700 | 218,080 |
| SBA Communications Corp. | 41,614 | 14,370,563 |
| Seritage Growth Properties, Class A *(a) | 15,766 | 242,796 |
| Service Properties Trust | 62,489 | 673,007 |
| Simon Property Group, Inc. | 124,943 | 18,314,145 |
| SITE Centers Corp. | 68,421 | 1,087,210 |
| SL Green Realty Corp. | 25,361 | 1,777,045 |
| Spirit Realty Capital, Inc. | 44,856 | 2,194,804 |
| STAG Industrial, Inc. | 61,796 | 2,689,980 |
| STORE Capital Corp. | 93,280 | 3,202,302 |
| Stratus Properties, Inc. * | 3,398 | 115,804 |
| Summit Hotel Properties, Inc. * | 40,223 | 402,230 |
| Sun Communities, Inc. | 43,887 | 8,600,974 |
| Sunstone Hotel Investors, Inc. * | 82,232 | 1,014,743 |
| Tanger Factory Outlet Centers, Inc. | 38,458 | 646,094 |
| Tejon Ranch Co. * | 11,108 | 202,277 |
| Terreno Realty Corp. | 26,682 | 1,951,255 |
| The GEO Group, Inc. | 45,206 | 369,785 |
| The Howard Hughes Corp. * | 15,677 | 1,365,937 |
| The Macerich Co. | 80,806 | 1,461,781 |
| The RMR Group, Inc., Class A | 6,145 | 213,785 |
| The St. Joe Co. | 13,049 | 613,564 |
| UDR, Inc. | 105,934 | 5,882,515 |
| UMH Properties, Inc. | 17,821 | 426,635 |
| Uniti Group, Inc. | 87,499 | 1,252,111 |
| Universal Health Realty Income Trust | 4,654 | 265,138 |
| Urban Edge Properties | 42,354 | 742,466 |
| Urstadt Biddle Properties, Inc., Class A | 13,328 | 261,762 |
| Ventas, Inc. | 149,847 | 7,997,334 |
| VEREIT, Inc. | 86,863 | 4,369,209 |
| VICI Properties, Inc. | 233,374 | 6,849,527 |
| Vornado Realty Trust | 61,410 | 2,617,908 |
| Washington Real Estate Investment Trust | 32,207 | 816,447 |
| Welltower, Inc. | 160,768 | 12,925,747 |
| Weyerhaeuser Co. | 284,710 | 10,169,841 |
| Whitestone REIT | 16,023 | 147,091 |
| WP Carey, Inc. | 70,199 | 5,413,045 |
| Xenia Hotels & Resorts, Inc. * | 43,106 | 767,287 |
| Zillow Group, Inc., Class A * | 13,967 | 1,476,591 |
| Zillow Group, Inc., Class C * | 64,599 | 6,694,394 |
| 614,903,320 | ||
99
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Retailing 6.3% | ||
| 1-800-Flowers.com, Inc., Class A * | 9,456 | 303,727 |
| 1847 Goedeker, Inc. *(a) | 39,276 | 122,934 |
| 1stdibs.com, Inc. *(a) | 3,091 | 52,980 |
| Abercrombie & Fitch Co., Class A * | 23,160 | 915,746 |
| Academy Sports & Outdoors, Inc. * | 32,723 | 1,399,890 |
| Advance Auto Parts, Inc. | 24,884 | 5,611,840 |
| Amazon.com, Inc. * | 165,670 | 558,710,478 |
| American Eagle Outfitters, Inc. | 58,840 | 1,396,862 |
| America's Car-Mart, Inc. * | 2,260 | 270,047 |
| Arko Corp. * | 25,063 | 240,354 |
| Asbury Automotive Group, Inc. * | 7,213 | 1,411,656 |
| AutoNation, Inc. * | 16,432 | 1,990,244 |
| AutoZone, Inc. * | 8,194 | 14,624,979 |
| Barnes & Noble Education, Inc. * | 11,885 | 123,366 |
| Bath & Body Works, Inc. | 100,175 | 6,921,091 |
| Bed Bath & Beyond, Inc. * | 39,977 | 561,277 |
| Best Buy Co., Inc. | 85,901 | 10,500,538 |
| Big 5 Sporting Goods Corp. (a) | 7,723 | 186,742 |
| Big Lots, Inc. | 13,487 | 596,800 |
| Boot Barn Holdings, Inc. * | 11,614 | 1,213,547 |
| Build-A-Bear Workshop, Inc. * | 6,224 | 97,592 |
| Burlington Stores, Inc. * | 25,312 | 6,993,452 |
| Caleres, Inc. | 14,847 | 342,372 |
| Camping World Holdings, Inc., Class A | 15,322 | 570,744 |
| CarLotz, Inc. *(a) | 25,975 | 93,510 |
| CarMax, Inc. * | 61,869 | 8,471,103 |
| CarParts.com, Inc. * | 17,830 | 271,551 |
| Carvana Co. * | 32,186 | 9,758,151 |
| Chewy, Inc., Class A * | 32,623 | 2,472,823 |
| Chico's FAS, Inc. * | 43,544 | 237,750 |
| Citi Trends, Inc. * | 3,328 | 257,454 |
| Conn's, Inc. * | 9,331 | 207,801 |
| ContextLogic, Inc., Class A * | 123,007 | 627,336 |
| Designer Brands, Inc., Class A * | 25,158 | 340,388 |
| Dick's Sporting Goods, Inc. | 25,096 | 3,117,174 |
| Dillard’s, Inc., Class A | 1,694 | 391,551 |
| Dollar General Corp. | 89,758 | 19,883,192 |
| Dollar Tree, Inc. * | 88,142 | 9,498,182 |
| DoorDash, Inc., Class A * | 58,423 | 11,380,800 |
| Duluth Holdings, Inc., Class B * | 5,854 | 83,888 |
| eBay, Inc. | 247,688 | 19,002,623 |
| Etsy, Inc. * | 48,108 | 12,060,194 |
| EVgo, Inc. *(a) | 27,046 | 252,069 |
| Express, Inc. *(a) | 28,996 | 111,345 |
| Five Below, Inc. * | 21,146 | 4,172,106 |
| Floor & Decor Holdings, Inc., Class A * | 40,112 | 5,452,023 |
| Foot Locker, Inc. | 33,987 | 1,620,160 |
| Franchise Group, Inc. | 10,289 | 378,635 |
| Funko, Inc., Class A * | 9,162 | 150,165 |
| GameStop Corp., Class A * | 23,680 | 4,345,517 |
| Genesco, Inc. * | 5,125 | 310,524 |
| Genuine Parts Co. | 54,528 | 7,149,166 |
| Group 1 Automotive, Inc. | 7,096 | 1,275,861 |
| Groupon, Inc. * | 8,149 | 172,922 |
| GrowGeneration Corp. * | 19,042 | 401,405 |
| Guess?, Inc. | 14,344 | 297,064 |
| Haverty Furniture Cos., Inc. | 6,681 | 191,745 |
| Hibbett, Inc. | 6,401 | 495,693 |
| iMedia Brands, Inc. * | 5,763 | 35,039 |
| Kirkland's, Inc. *(a) | 5,229 | 117,548 |
| Kohl's Corp. | 58,799 | 2,853,515 |
| Lands' End, Inc. * | 4,426 | 116,315 |
| Lazydays Holdings, Inc. * | 2,659 | 56,078 |
| Leslie's, Inc. * | 49,291 | 1,019,338 |
| Liquidity Services, Inc. * | 10,485 | 231,509 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Lithia Motors, Inc. | 11,496 | 3,669,753 |
| LKQ Corp. * | 103,532 | 5,702,543 |
| LMP Automotive Holdings, Inc. *(a) | 1,114 | 15,841 |
| Lowe’s Cos., Inc. | 268,672 | 62,820,887 |
| Lumber Liquidators Holdings, Inc. * | 10,644 | 192,444 |
| Macy's, Inc. | 117,465 | 3,109,299 |
| MarineMax, Inc. * | 9,246 | 478,850 |
| Monro, Inc. | 13,330 | 823,261 |
| Murphy USA, Inc. | 9,083 | 1,480,075 |
| National Vision Holdings, Inc. * | 30,758 | 1,895,923 |
| Nordstrom, Inc. * | 42,533 | 1,221,973 |
| Ollie's Bargain Outlet Holdings, Inc. * | 22,984 | 1,555,097 |
| OneWater Marine, Inc., Class A | 4,097 | 181,661 |
| O'Reilly Automotive, Inc. * | 26,146 | 16,271,179 |
| Overstock.com, Inc. * | 16,371 | 1,559,010 |
| Party City Holdco, Inc. * | 42,981 | 312,472 |
| Penske Automotive Group, Inc. | 12,397 | 1,314,702 |
| Petco Health & Wellness Co., Inc. * | 32,819 | 811,614 |
| PetMed Express, Inc. (a) | 8,051 | 228,890 |
| Pool Corp. | 15,199 | 7,829,917 |
| Porch Group, Inc. * | 28,391 | 597,063 |
| Poshmark, Inc., Class A * | 5,422 | 131,917 |
| Quotient Technology, Inc. * | 36,556 | 235,421 |
| Qurate Retail, Inc., Class A | 138,319 | 1,444,050 |
| Remark Holdings, Inc. *(a) | 29,048 | 61,291 |
| Rent-A-Center, Inc. | 23,615 | 1,257,735 |
| Revolve Group, Inc. * | 14,364 | 1,077,875 |
| RH * | 6,493 | 4,282,978 |
| Ross Stores, Inc. | 135,864 | 15,379,805 |
| Sally Beauty Holdings, Inc. * | 43,214 | 659,446 |
| Shift Technologies, Inc. *(a) | 28,940 | 197,660 |
| Shoe Carnival, Inc. | 6,398 | 216,700 |
| Shutterstock, Inc. | 9,075 | 1,099,436 |
| Signet Jewelers Ltd. | 19,690 | 1,755,954 |
| Sleep Number Corp. * | 9,204 | 813,081 |
| Sonic Automotive, Inc., Class A | 8,473 | 418,820 |
| Sportsman's Warehouse Holdings, Inc. * | 17,402 | 300,359 |
| Stitch Fix, Inc., Class A * | 27,183 | 940,532 |
| Target Corp. | 188,047 | 48,820,762 |
| The Aaron's Co., Inc. | 12,581 | 294,270 |
| The Buckle, Inc. | 11,696 | 486,788 |
| The Cato Corp., Class A | 7,100 | 125,173 |
| The Children's Place, Inc. * | 5,345 | 443,047 |
| The Container Store Group, Inc. * | 13,492 | 149,222 |
| The Gap, Inc. | 83,444 | 1,893,344 |
| The Home Depot, Inc. | 404,327 | 150,304,519 |
| The ODP Corp. * | 18,046 | 781,392 |
| The Original BARK Co. *(a) | 31,805 | 234,085 |
| The RealReall, Inc. * | 31,331 | 408,243 |
| The TJX Cos., Inc. | 458,592 | 30,033,190 |
| ThredUp, Inc., Class A *(a) | 8,903 | 192,661 |
| Tile Shop Holdings, Inc. * | 15,152 | 126,368 |
| Tilly's, Inc., Class A | 8,425 | 116,939 |
| Torrid Holdings, Inc. * | 4,414 | 66,387 |
| Tractor Supply Co. | 43,527 | 9,452,759 |
| TravelCenters of America, Inc. * | 4,602 | 248,094 |
| Tuesday Morning Corp. *(a) | 29,118 | 66,098 |
| Ulta Beauty, Inc. * | 20,834 | 7,653,578 |
| Urban Outfitters, Inc. * | 24,567 | 784,424 |
| Victoria's Secret & Co. * | 28,260 | 1,426,282 |
| Vroom, Inc. * | 48,066 | 919,503 |
| Waitr Holdings, Inc. * | 40,686 | 78,931 |
| Wayfair, Inc., Class A * | 29,381 | 7,318,807 |
| Weyco Group, Inc. | 3,066 | 69,966 |
| Williams-Sonoma, Inc. | 28,581 | 5,308,349 |
| Winmark Corp. | 1,106 | 257,499 |
100
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Xometry, Inc., Class A *(a) | 2,753 | 148,662 |
| Zumiez, Inc. * | 7,807 | 317,745 |
| 1,155,393,072 | ||
| Semiconductors & Semiconductor Equipment 5.2% | ||
| ACM Research, Inc., Class A * | 4,656 | 494,328 |
| Advanced Micro Devices, Inc. * | 461,457 | 55,480,975 |
| Aehr Test Systems * | 7,568 | 171,188 |
| Allegro MicroSystems, Inc. * | 20,735 | 691,720 |
| Alpha & Omega Semiconductor Ltd. * | 7,776 | 269,438 |
| Ambarella, Inc. * | 14,046 | 2,610,168 |
| Amkor Technology, Inc. | 37,745 | 827,370 |
| Amtech Systems, Inc. * | 6,347 | 95,332 |
| Analog Devices, Inc. | 204,594 | 35,495,013 |
| Applied Materials, Inc. | 347,671 | 47,509,242 |
| Atomera, Inc. *(a) | 8,289 | 179,125 |
| Axcelis Technologies, Inc. * | 12,536 | 688,603 |
| AXT, Inc. * | 15,887 | 129,797 |
| Broadcom, Inc. | 155,963 | 82,920,848 |
| Brooks Automation, Inc. | 28,059 | 3,267,471 |
| CEVA, Inc. * | 9,184 | 418,882 |
| Cirrus Logic, Inc. * | 21,945 | 1,773,376 |
| CMC Materials, Inc. | 11,082 | 1,422,596 |
| Cohu, Inc. * | 18,563 | 594,759 |
| CyberOptics Corp. * | 3,541 | 147,872 |
| Diodes, Inc. * | 17,090 | 1,642,178 |
| DSP Group, Inc. * | 10,322 | 226,774 |
| eMagin Corp. *(a) | 21,824 | 52,378 |
| Enphase Energy, Inc. * | 51,173 | 11,853,202 |
| Entegris, Inc. | 51,609 | 7,265,515 |
| Everspin Technologies, Inc. * | 8,179 | 49,728 |
| First Solar, Inc. * | 37,842 | 4,525,525 |
| FormFactor, Inc. * | 29,130 | 1,158,791 |
| Ichor Holdings Ltd. * | 10,335 | 451,846 |
| Impinj, Inc. * | 7,370 | 513,836 |
| indie Semiconductor, Inc., Class A *(a) | 20,931 | 275,452 |
| Intel Corp. | 1,542,452 | 75,580,148 |
| inTEST Corp. * | 4,563 | 50,512 |
| KLA Corp. | 58,190 | 21,690,904 |
| Kopin Corp. * | 25,275 | 132,441 |
| Kulicke & Soffa Industries, Inc. | 23,288 | 1,327,416 |
| Lam Research Corp. | 54,211 | 30,551,693 |
| Lattice Semiconductor Corp. * | 52,415 | 3,639,698 |
| MACOM Technology Solutions Holdings, Inc. * | 18,529 | 1,293,695 |
| Marvell Technology, Inc. | 312,039 | 21,374,672 |
| MaxLinear, Inc. * | 26,899 | 1,694,637 |
| Meta Materials, Inc. *(a) | 89,040 | 418,488 |
| Microchip Technology, Inc. | 208,839 | 15,472,882 |
| Micron Technology, Inc. | 428,254 | 29,592,351 |
| MKS Instruments, Inc. | 21,044 | 3,157,652 |
| Monolithic Power Systems, Inc. | 16,425 | 8,630,681 |
| NeoPhotonics Corp. * | 23,028 | 233,043 |
| NVE Corp. | 1,664 | 113,102 |
| NVIDIA Corp. | 947,930 | 242,357,263 |
| NXP Semiconductors N.V. | 100,903 | 20,267,377 |
| ON Semiconductor Corp. * | 163,157 | 7,842,957 |
| Onto Innovation, Inc. * | 19,218 | 1,522,258 |
| PDF Solutions, Inc. * | 12,413 | 292,078 |
| Photronics, Inc. * | 24,990 | 324,620 |
| Pixelworks, Inc. * | 21,959 | 89,812 |
| Power Integrations, Inc. | 22,913 | 2,364,851 |
| Qorvo, Inc. * | 42,130 | 7,087,530 |
| QUALCOMM, Inc. | 428,695 | 57,033,583 |
| Rambus, Inc. * | 41,592 | 967,846 |
| Semtech Corp. * | 24,455 | 2,079,409 |
| Silicon Laboratories, Inc. * | 15,415 | 2,909,735 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| SiTime Corp. * | 4,853 | 1,285,511 |
| SkyWater Technology, Inc. *(a) | 2,749 | 94,126 |
| Skyworks Solutions, Inc. | 62,706 | 10,480,054 |
| SMART Global Holdings, Inc. * | 8,952 | 478,574 |
| SolarEdge Technologies, Inc. * | 19,893 | 7,055,649 |
| SunPower Corp. * | 31,058 | 1,045,412 |
| Synaptics, Inc. * | 13,556 | 2,637,591 |
| Teradyne, Inc. | 62,601 | 8,653,962 |
| Texas Instruments, Inc. | 350,927 | 65,791,794 |
| Ultra Clean Holdings, Inc. * | 17,381 | 861,576 |
| Universal Display Corp. | 16,495 | 3,021,884 |
| Veeco Instruments, Inc. * | 18,947 | 460,223 |
| Wolfspeed, Inc. * | 44,302 | 5,321,113 |
| Xilinx, Inc. | 94,366 | 16,985,880 |
| 947,470,011 | ||
| Software & Services 15.1% | ||
| 8x8, Inc. * | 44,389 | 1,005,855 |
| A10 Networks, Inc. * | 23,800 | 444,822 |
| Accenture plc, Class A | 241,079 | 86,496,734 |
| ACI Worldwide, Inc. * | 44,063 | 1,351,853 |
| Adobe, Inc. * | 181,142 | 117,807,511 |
| Affirm Holdings, Inc. * | 35,464 | 5,762,900 |
| Agilysys, Inc. * | 7,381 | 352,221 |
| Akamai Technologies, Inc. * | 62,160 | 6,555,394 |
| Alarm.com Holdings, Inc. * | 17,809 | 1,500,586 |
| Alliance Data Systems Corp. | 18,759 | 1,599,205 |
| Altair Engineering, Inc., Class A * | 17,826 | 1,386,685 |
| Alteryx, Inc., Class A * | 22,530 | 1,648,971 |
| American Software, Inc., Class A | 11,319 | 327,459 |
| Anaplan, Inc. * | 54,806 | 3,573,899 |
| ANSYS, Inc. * | 33,215 | 12,607,750 |
| Appfolio, Inc., Class A * | 7,204 | 948,695 |
| Appian Corp. * | 14,941 | 1,485,285 |
| AppLovin Corp., Class A * | 10,399 | 1,021,702 |
| Asana, Inc., Class A * | 29,941 | 4,065,988 |
| Aspen Technology, Inc. * | 25,916 | 4,060,778 |
| Asure Software, Inc. * | 7,413 | 71,610 |
| AudioEye, Inc. * | 2,093 | 20,804 |
| Autodesk, Inc. * | 83,640 | 26,564,900 |
| Automatic Data Processing, Inc. | 160,840 | 36,106,972 |
| Avalara, Inc. * | 32,924 | 5,914,467 |
| Avaya Holdings Corp. * | 32,667 | 608,260 |
| AvePoint, Inc. * | 34,675 | 323,171 |
| Benefitfocus, Inc. * | 12,031 | 131,860 |
| Bentley Systems, Inc., Class B | 69,871 | 4,132,870 |
| BigCommerce Holdings, Inc. * | 22,336 | 1,032,147 |
| Bill.com Holdings, Inc. * | 33,669 | 9,909,123 |
| Black Knight, Inc. * | 59,461 | 4,168,811 |
| Blackbaud, Inc. * | 16,145 | 1,146,456 |
| Blackline, Inc. * | 20,164 | 2,558,207 |
| Blend Labs, Inc., Class A *(a) | 8,162 | 118,349 |
| BM Technologies, Inc. *(a)(b) | 1,617 | 13,982 |
| Bottomline Technologies (DE), Inc. * | 16,259 | 752,792 |
| Box, Inc., Class A * | 58,148 | 1,501,963 |
| Brightcove, Inc. * | 15,409 | 152,857 |
| Broadridge Financial Solutions, Inc. | 44,252 | 7,894,999 |
| BTRS Holdings, Inc. * | 25,894 | 222,429 |
| C3.ai, Inc., Class A * | 26,426 | 1,192,341 |
| Cadence Design Systems, Inc. * | 105,120 | 18,197,323 |
| Cantaloupe, Inc. * | 24,663 | 308,287 |
| Cass Information Systems, Inc. | 4,677 | 191,710 |
| CCC Intelligent Solutions Holdings, Inc. * | 23,206 | 278,008 |
| CDK Global, Inc. | 46,627 | 2,029,207 |
| Cerence, Inc. * | 14,274 | 1,500,626 |
| Ceridian HCM Holding, Inc. * | 51,439 | 6,442,735 |
101
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| ChannelAdvisor Corp. * | 10,971 | 279,870 |
| Citrix Systems, Inc. | 47,047 | 4,456,762 |
| Cleanspark, Inc. *(a) | 12,567 | 254,607 |
| Clear Secure, Inc., Class A *(a) | 5,091 | 227,517 |
| Cloudflare, Inc., Class A * | 100,353 | 19,540,736 |
| Cognizant Technology Solutions Corp., Class A | 199,620 | 15,588,326 |
| CommVault Systems, Inc. * | 17,338 | 1,066,287 |
| Concentrix Corp. | 16,265 | 2,889,965 |
| Conduent, Inc. * | 59,134 | 399,154 |
| Confluent, Inc., Class A *(a) | 10,451 | 710,145 |
| Consensus Cloud Solutions, Inc. * | 6,148 | 389,353 |
| Couchbase, Inc. *(a) | 3,231 | 130,274 |
| Coupa Software, Inc. * | 27,960 | 6,366,492 |
| Crowdstrike Holdings, Inc., Class A * | 75,910 | 21,391,438 |
| CS Disco, Inc. * | 4,679 | 268,341 |
| CSG Systems International, Inc. | 12,177 | 609,459 |
| Cyxtera Technologies, Inc. * | 14,196 | 141,108 |
| Datadog, Inc., Class A * | 91,335 | 15,257,512 |
| Datto Holding Corp. * | 10,720 | 256,208 |
| Digimarc Corp. *(a) | 5,752 | 290,649 |
| Digital Turbine, Inc. * | 33,527 | 2,885,334 |
| DigitalOcean Holdings, Inc. * | 6,558 | 639,995 |
| DocuSign, Inc. * | 74,197 | 20,648,283 |
| Dolby Laboratories, Inc., Class A | 24,956 | 2,204,863 |
| Domo, Inc., Class B * | 10,711 | 946,317 |
| Dropbox, Inc., Class A * | 109,851 | 3,349,357 |
| Duck Creek Technologies, Inc. * | 28,481 | 897,151 |
| DXC Technology Co. * | 96,536 | 3,144,178 |
| Dynatrace, Inc. * | 74,234 | 5,567,550 |
| E2open Parent Holdings, Inc. * | 66,961 | 837,012 |
| Ebix, Inc. | 8,770 | 287,744 |
| eGain Corp. * | 7,634 | 78,783 |
| Elastic N.V. * | 27,169 | 4,714,093 |
| Envestnet, Inc. * | 20,903 | 1,745,400 |
| EPAM Systems, Inc. * | 21,553 | 14,510,342 |
| Euronet Worldwide, Inc. * | 20,017 | 2,245,707 |
| Everbridge, Inc. * | 14,500 | 2,309,995 |
| EverCommerce, Inc. *(a) | 7,505 | 155,203 |
| EVERTEC, Inc. | 22,929 | 1,036,620 |
| Evo Payments, Inc., Class A * | 19,138 | 414,912 |
| Exela Technologies, Inc. *(a) | 48,903 | 91,938 |
| ExlService Holdings, Inc. * | 12,613 | 1,546,732 |
| Fair Isaac Corp. * | 10,790 | 4,296,578 |
| Fastly, Inc., Class A * | 40,107 | 2,029,815 |
| Fidelity National Information Services, Inc. | 234,839 | 26,006,071 |
| Fiserv, Inc. * | 226,647 | 22,322,463 |
| Five9, Inc. * | 25,794 | 4,075,710 |
| FleetCor Technologies, Inc. * | 31,476 | 7,787,477 |
| Flywire Corp. *(a) | 4,307 | 204,324 |
| Fortinet, Inc. * | 51,607 | 17,357,498 |
| Gartner, Inc. * | 31,802 | 10,555,402 |
| Genpact Ltd. | 65,897 | 3,252,017 |
| Global Payments, Inc. | 111,788 | 15,984,566 |
| GoDaddy, Inc., Class A * | 64,209 | 4,441,337 |
| GreenBox POS *(a) | 7,269 | 59,024 |
| Greenidge Generation Holdings, Inc. * | 254 | 6,906 |
| GreenSky, Inc., Class A * | 28,039 | 343,197 |
| Grid Dynamics Holdings, Inc. * | 16,671 | 479,291 |
| GTY Technology Holdings, Inc. * | 16,630 | 126,388 |
| Guidewire Software, Inc. * | 31,695 | 3,985,012 |
| HubSpot, Inc. * | 17,018 | 13,788,494 |
| I3 Verticals, Inc., Class A * | 8,999 | 201,488 |
| Information Services Group, Inc. | 16,112 | 131,313 |
| Innodata, Inc. * | 7,993 | 84,886 |
| Intapp, Inc. * | 4,153 | 112,131 |
| Intelligent Systems Corp. * | 2,218 | 93,888 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| InterDigital, Inc. | 11,415 | 764,234 |
| International Business Machines Corp. | 340,712 | 42,623,071 |
| International Money Express, Inc. * | 13,887 | 232,468 |
| Intrusion, Inc. * | 4,921 | 19,389 |
| Intuit, Inc. | 103,855 | 65,012,191 |
| Jack Henry & Associates, Inc. | 28,279 | 4,707,888 |
| Jamf Holding Corp. * | 20,926 | 997,124 |
| Kaltura, Inc. *(a) | 6,083 | 57,424 |
| KnowBe4, Inc., Class A *(a) | 8,369 | 195,667 |
| Latch, Inc. *(a) | 34,810 | 309,461 |
| Limelight Networks, Inc. * | 46,809 | 139,491 |
| LivePerson, Inc. * | 24,848 | 1,279,920 |
| LiveRamp Holdings, Inc. * | 25,614 | 1,370,605 |
| LiveVox Holdings, Inc. *(a) | 11,916 | 72,568 |
| Mandiant, Inc. * | 90,381 | 1,576,245 |
| Manhattan Associates, Inc. * | 24,135 | 4,381,468 |
| Marathon Digital Holdings, Inc. * | 37,437 | 1,955,709 |
| Marin Software, Inc. *(a) | 8,505 | 53,582 |
| Marqeta, Inc., Class A *(a) | 30,065 | 919,989 |
| Mastercard, Inc., Class A | 331,250 | 111,141,000 |
| Matterport, Inc. * | 69,576 | 1,561,981 |
| Maximus, Inc. | 23,502 | 1,987,564 |
| McAfee Corp., Class A | 27,631 | 590,474 |
| MeridianLink, Inc. * | 5,337 | 128,889 |
| Microsoft Corp. | 2,858,396 | 947,901,282 |
| MicroStrategy, Inc., Class A * | 2,984 | 2,133,739 |
| Mimecast Ltd. * | 23,581 | 1,778,951 |
| Mitek Systems, Inc. * | 17,884 | 336,756 |
| Model N, Inc. * | 13,056 | 423,145 |
| Momentive Global, Inc. * | 48,840 | 1,119,413 |
| MoneyGram International, Inc. * | 34,767 | 207,559 |
| MongoDB, Inc. * | 24,650 | 12,849,798 |
| N-Able, Inc. * | 25,933 | 344,909 |
| nCino, Inc. * | 21,287 | 1,546,713 |
| NCR Corp. * | 49,470 | 1,956,044 |
| New Relic, Inc. * | 22,132 | 1,796,233 |
| NortonLifeLock, Inc. | 220,499 | 5,611,700 |
| Nuance Communications, Inc. * | 108,487 | 5,972,209 |
| Nutanix, Inc., Class A * | 77,061 | 2,643,963 |
| Okta, Inc. * | 47,693 | 11,788,756 |
| Olo, Inc., Class A * | 10,669 | 290,410 |
| ON24, Inc. * | 3,135 | 59,973 |
| OneSpan, Inc. * | 12,589 | 257,067 |
| Oracle Corp. | 626,351 | 60,092,115 |
| PagerDuty, Inc. * | 28,217 | 1,178,060 |
| Palantir Technologies, Inc., Class A * | 596,844 | 15,446,323 |
| Palo Alto Networks, Inc. * | 37,053 | 18,863,312 |
| Paya Holdings, Inc. * | 32,804 | 298,844 |
| Paychex, Inc. | 121,705 | 15,003,792 |
| Paycom Software, Inc. * | 18,337 | 10,045,925 |
| Paycor HCM, Inc. * | 11,920 | 386,685 |
| Paylocity Holding Corp. * | 14,954 | 4,563,064 |
| Paymentus Holdings, Inc., Class A * | 4,651 | 119,066 |
| Payoneer Global, Inc. * | 74,139 | 559,749 |
| PayPal Holdings, Inc. * | 446,818 | 103,925,399 |
| Pegasystems, Inc. | 15,465 | 1,836,005 |
| Perficient, Inc. * | 12,554 | 1,551,674 |
| PFSweb, Inc. * | 6,123 | 79,599 |
| Phunware, Inc. * | 26,099 | 111,965 |
| Ping Identity Holding Corp. * | 19,040 | 539,403 |
| Progress Software Corp. | 16,934 | 870,577 |
| PROS Holdings, Inc. * | 15,941 | 478,230 |
| PTC, Inc. * | 40,011 | 5,095,401 |
| Q2 Holdings, Inc. * | 21,323 | 1,673,003 |
| QAD, Inc., Class A | 4,467 | 391,488 |
| Qualtrics International, Inc., Class A * | 24,034 | 1,113,255 |
| Qualys, Inc. * | 12,697 | 1,580,523 |
102
Schwab Equity Index Funds | Annual Report
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Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Quantum Computing, Inc. *(a) | 9,386 | 58,662 |
| Rackspace Technology, Inc. * | 24,535 | 326,070 |
| Rapid7, Inc. * | 21,188 | 2,727,955 |
| Rekor Systems, Inc. * | 11,734 | 159,582 |
| Repay Holdings Corp. * | 28,452 | 597,777 |
| Rimini Street, Inc. * | 10,222 | 106,411 |
| RingCentral, Inc., Class A * | 30,932 | 7,540,603 |
| Riot Blockchain, Inc. * | 31,410 | 854,980 |
| Sabre Corp. * | 126,525 | 1,313,329 |
| SailPoint Technologies Holding, Inc. * | 36,354 | 1,744,265 |
| salesforce.com, Inc. * | 369,500 | 110,735,455 |
| SecureWorks Corp., Class A * | 4,602 | 84,769 |
| SEMrush Holdings, Inc., Class A * | 4,363 | 106,414 |
| SentinelOne, Inc., Class A * | 13,769 | 914,262 |
| ServiceNow, Inc. * | 75,336 | 52,566,447 |
| ServiceSource International, Inc. * | 26,733 | 34,753 |
| Shift4 Payments, Inc., Class A * | 17,858 | 1,127,376 |
| ShotSpotter, Inc. * | 3,910 | 152,138 |
| Smartsheet, Inc., Class A * | 48,194 | 3,325,868 |
| Smith Micro Software, Inc. * | 24,721 | 140,910 |
| Snowflake, Inc., Class A * | 86,799 | 30,712,958 |
| SolarWinds Corp. | 17,754 | 285,839 |
| Splunk, Inc. * | 62,445 | 10,292,185 |
| Sprinklr, Inc., Class A * | 6,661 | 128,557 |
| Sprout Social, Inc., Class A * | 16,994 | 2,169,794 |
| SPS Commerce, Inc. * | 13,866 | 2,117,754 |
| Square, Inc., Class A * | 151,235 | 38,489,307 |
| Squarespace, Inc., Class A *(a) | 10,840 | 422,110 |
| SRAX, Inc. * | 9,789 | 59,419 |
| SS&C Technologies Holdings, Inc. | 84,695 | 6,730,712 |
| Sumo Logic, Inc. * | 32,781 | 566,128 |
| Switch, Inc., Class A | 47,277 | 1,195,163 |
| Synchronoss Technologies, Inc. * | 15,860 | 41,870 |
| Synopsys, Inc. * | 57,913 | 19,295,453 |
| TaskUS, Inc., Class A *(a) | 10,367 | 600,249 |
| Telos Corp. * | 20,118 | 521,257 |
| Tenable Holdings, Inc. * | 34,414 | 1,832,545 |
| Teradata Corp. * | 41,188 | 2,329,593 |
| The Hackett Group, Inc. | 11,302 | 238,924 |
| The Trade Desk, Inc., Class A * | 165,517 | 12,398,878 |
| The Western Union Co. | 154,103 | 2,807,757 |
| TTEC Holdings, Inc. | 6,911 | 652,329 |
| Tucows, Inc., Class A * | 3,871 | 318,583 |
| Twilio, Inc., Class A * | 63,625 | 18,537,780 |
| Tyler Technologies, Inc. * | 15,560 | 8,452,503 |
| UiPath, Inc., Class A * | 97,445 | 4,896,611 |
| Unisys Corp. * | 25,248 | 645,591 |
| Unity Software, Inc. * | 60,118 | 9,096,455 |
| Upland Software, Inc. * | 9,814 | 327,493 |
| Usio, Inc. * | 7,533 | 47,835 |
| Varonis Systems, Inc. * | 40,457 | 2,619,186 |
| Verb Technology Co., Inc. *(a) | 19,826 | 41,040 |
| Verint Systems, Inc. * | 24,785 | 1,154,981 |
| VeriSign, Inc. * | 36,887 | 8,213,628 |
| Veritone, Inc. * | 11,260 | 336,787 |
| Verra Mobility Corp. * | 51,812 | 770,963 |
| Vertex, Inc., Class A * | 11,875 | 247,237 |
| Viant Technology, Inc., Class A * | 3,698 | 43,452 |
| VirnetX Holding Corp. * | 26,091 | 100,450 |
| Visa, Inc., Class A | 641,773 | 135,908,268 |
| VMware, Inc., Class A *(a) | 30,516 | 4,629,277 |
| Vonage Holdings Corp. * | 95,496 | 1,539,396 |
| WEX, Inc. * | 17,117 | 2,562,415 |
| WM Technology, Inc. *(a) | 18,000 | 220,320 |
| Workday, Inc., Class A * | 71,815 | 20,824,914 |
| Workiva, Inc. * | 16,207 | 2,423,757 |
| Xperi Holding Corp. | 39,156 | 701,676 |
| Yext, Inc. * | 44,378 | 558,719 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Zendesk, Inc. * | 45,678 | 4,650,020 |
| Zeta Global Holdings Corp., Class A *(a) | 9,472 | 78,239 |
| Zix Corp. * | 19,522 | 165,351 |
| Zoom Video Communications, Inc., Class A * | 82,328 | 22,611,385 |
| Zscaler, Inc. * | 29,723 | 9,477,476 |
| Zuora, Inc., Class A * | 45,113 | 986,170 |
| 2,754,583,791 | ||
| Technology Hardware & Equipment 6.8% | ||
| 3D Systems Corp. * | 47,175 | 1,328,448 |
| 908 Devices, Inc. * | 5,331 | 175,390 |
| ADTRAN, Inc. | 18,881 | 348,921 |
| Advanced Energy Industries, Inc. | 14,506 | 1,331,941 |
| Aeva Technologies, Inc. *(a) | 37,597 | 291,753 |
| Airgain, Inc. * | 3,401 | 38,193 |
| Akoustis Technologies, Inc. * | 18,746 | 140,970 |
| Amphenol Corp., Class A | 226,864 | 17,416,349 |
| Apple Inc. | 5,973,156 | 894,778,769 |
| Applied Optoelectronics, Inc. * | 10,991 | 84,081 |
| Arista Networks, Inc. * | 21,375 | 8,757,124 |
| Arlo Technologies, Inc. * | 31,084 | 214,480 |
| Arrow Electronics, Inc. * | 27,485 | 3,181,389 |
| AstroNova, Inc. * | 4,559 | 75,224 |
| Aviat Networks, Inc. * | 3,200 | 91,520 |
| Avid Technology, Inc. * | 13,429 | 384,607 |
| Avnet, Inc. | 37,329 | 1,422,608 |
| Badger Meter, Inc. | 10,938 | 1,118,411 |
| Bel Fuse, Inc., Class B | 5,450 | 75,864 |
| Belden, Inc. | 17,801 | 1,071,798 |
| Benchmark Electronics, Inc. | 13,708 | 319,533 |
| Boxlight Corp., Class A * | 18,333 | 40,883 |
| CalAmp Corp. * | 14,173 | 136,344 |
| Calix, Inc. * | 20,834 | 1,304,000 |
| Cambium Networks Corp. * | 4,423 | 124,817 |
| Casa Systems, Inc. * | 13,736 | 86,949 |
| CDW Corp. | 52,167 | 9,736,971 |
| Ciena Corp. * | 58,444 | 3,172,925 |
| Cisco Systems, Inc. | 1,602,202 | 89,675,246 |
| Clearfield, Inc. * | 4,153 | 234,603 |
| ClearSign Technologies Corp. * | 12,073 | 19,558 |
| Cognex Corp. | 67,060 | 5,873,785 |
| Coherent, Inc. * | 9,329 | 2,373,298 |
| CommScope Holding Co., Inc. * | 76,178 | 815,866 |
| ComSovereign Holding Corp. * | 15,123 | 21,021 |
| Comtech Telecommunications Corp. | 11,209 | 241,778 |
| Corning, Inc. | 292,793 | 10,414,647 |
| Corsair Gaming, Inc. *(a) | 12,529 | 306,334 |
| CPI Card Group, Inc. * | 1,664 | 47,457 |
| CTS Corp. | 12,607 | 449,061 |
| Daktronics, Inc. * | 14,170 | 78,644 |
| Dell Technologies, Inc., Class C * | 105,503 | 11,604,275 |
| Diebold Nixdorf, Inc. * | 28,307 | 254,763 |
| Digi International, Inc. * | 12,746 | 274,676 |
| DZS, Inc. * | 6,832 | 74,469 |
| Eastman Kodak Co. *(a) | 24,148 | 163,965 |
| EMCORE Corp. * | 11,147 | 83,380 |
| ePlus, Inc. * | 5,027 | 555,835 |
| Evolv Technologies Holdings, Inc. *(a) | 21,918 | 124,713 |
| Extreme Networks, Inc. * | 46,911 | 461,135 |
| F5 Networks, Inc. * | 23,040 | 4,864,896 |
| Fabrinet * | 14,038 | 1,347,648 |
| FARO Technologies, Inc. * | 7,447 | 547,876 |
| Genasys, Inc. * | 20,918 | 106,263 |
| Harmonic, Inc. * | 38,407 | 348,352 |
| Hewlett Packard Enterprise Co. | 496,758 | 7,277,505 |
103
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| HP, Inc. | 458,272 | 13,899,390 |
| Identiv, Inc. * | 8,288 | 158,798 |
| II-VI, Inc. * | 39,730 | 2,404,062 |
| Immersion Corp. * | 13,101 | 104,677 |
| Infinera Corp. * | 81,710 | 620,179 |
| Inseego Corp. *(a) | 33,215 | 205,933 |
| Insight Enterprises, Inc. * | 13,386 | 1,267,654 |
| IPG Photonics Corp. * | 13,691 | 2,177,006 |
| Iteris, Inc. * | 14,737 | 78,990 |
| Itron, Inc. * | 17,014 | 1,323,179 |
| Jabil, Inc. | 55,371 | 3,320,045 |
| Juniper Networks, Inc. | 123,100 | 3,633,912 |
| Keysight Technologies, Inc. * | 70,150 | 12,628,403 |
| Kimball Electronics, Inc. * | 9,413 | 270,624 |
| Knowles Corp. * | 35,698 | 743,946 |
| KVH Industries, Inc. * | 10,362 | 106,314 |
| Littelfuse, Inc. | 9,497 | 2,797,341 |
| Lumentum Holdings, Inc. * | 28,859 | 2,383,176 |
| Luna Innovations, Inc. * | 11,699 | 113,948 |
| Mechanical Technology, Inc. *(a) | 5,346 | 62,602 |
| Methode Electronics, Inc. | 14,387 | 605,261 |
| MicroVision, Inc. * | 62,655 | 476,805 |
| MICT, Inc. *(a) | 40,861 | 56,388 |
| Motorola Solutions, Inc. | 64,374 | 16,002,733 |
| Napco Security Technologies, Inc. * | 6,221 | 298,359 |
| National Instruments Corp. | 50,488 | 2,144,225 |
| NetApp, Inc. | 85,285 | 7,615,951 |
| NETGEAR, Inc. * | 11,235 | 323,905 |
| NetScout Systems, Inc. * | 28,483 | 770,750 |
| nLight, Inc. * | 17,442 | 490,469 |
| Novanta, Inc. * | 13,825 | 2,385,642 |
| Ondas Holdings, Inc. *(a) | 14,133 | 121,120 |
| OSI Systems, Inc. * | 6,907 | 643,111 |
| Ouster, Inc. *(a) | 26,558 | 163,597 |
| PAR Technology Corp. * | 9,071 | 569,840 |
| PC Connection, Inc. | 4,382 | 201,791 |
| Plantronics, Inc. * | 16,257 | 435,037 |
| Plexus Corp. * | 10,855 | 947,859 |
| Powerfleet, Inc. * | 18,212 | 126,027 |
| Pure Storage, Inc., Class A * | 100,542 | 2,700,558 |
| Quantum Corp. * | 25,215 | 143,978 |
| Resonant, Inc. * | 15,910 | 35,638 |
| Ribbon Communications, Inc. * | 43,357 | 237,163 |
| Rogers Corp. * | 7,137 | 1,435,393 |
| Sanmina Corp. * | 25,510 | 963,003 |
| ScanSource, Inc. * | 10,049 | 359,553 |
| Seagate Technology Holdings plc | 79,923 | 7,118,742 |
| Super Micro Computer, Inc. * | 17,581 | 622,192 |
| SYNNEX Corp. | 15,921 | 1,671,705 |
| TE Connectivity Ltd. | 124,578 | 18,188,388 |
| Teledyne Technologies, Inc. * | 17,780 | 7,987,132 |
| TransAct Technologies, Inc. * | 3,819 | 53,924 |
| Trimble, Inc. * | 95,850 | 8,374,415 |
| TTM Technologies, Inc. * | 40,856 | 540,933 |
| Turtle Beach Corp. * | 6,086 | 175,033 |
| Ubiquiti, Inc. | 2,406 | 735,105 |
| Velodyne Lidar, Inc. *(a) | 38,198 | 233,008 |
| ViaSat, Inc. * | 27,960 | 1,668,932 |
| Viavi Solutions, Inc. * | 86,780 | 1,336,412 |
| Vishay Intertechnology, Inc. | 53,158 | 1,021,697 |
| Vishay Precision Group, Inc. * | 5,394 | 183,881 |
| Vislink Technologies, Inc. *(a) | 17,989 | 31,301 |
| Vontier Corp. | 64,858 | 2,194,146 |
| Wayside Technology Group, Inc. | 2,333 | 62,034 |
| Western Digital Corp. * | 116,743 | 6,104,491 |
| Wrap Technologies, Inc. *(a) | 10,465 | 59,651 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Xerox Holdings Corp. | 53,776 | 957,213 |
| Zebra Technologies Corp., Class A * | 20,320 | 10,849,864 |
| 1,244,615,845 | ||
| Telecommunication Services 1.1% | ||
| Anterix, Inc. * | 7,049 | 451,841 |
| AST SpaceMobile, Inc. *(a) | 15,424 | 172,595 |
| AT&T, Inc. | 2,714,784 | 68,575,444 |
| ATN International, Inc. | 4,776 | 194,765 |
| Bandwidth, Inc., Class A * | 8,762 | 747,223 |
| Cogent Communications Holdings, Inc. | 16,072 | 1,230,954 |
| Consolidated Communications Holdings, Inc. * | 28,849 | 213,483 |
| EchoStar Corp., Class A * | 16,776 | 393,565 |
| Frontier Communications Parent, Inc. * | 77,846 | 2,410,112 |
| Globalstar, Inc. * | 252,155 | 416,056 |
| Gogo, Inc. * | 25,883 | 420,858 |
| IDT Corp., Class B * | 6,600 | 319,242 |
| Iridium Communications, Inc. * | 50,946 | 2,065,860 |
| Liberty Global plc, Class A * | 66,642 | 1,915,291 |
| Liberty Global plc, Class C * | 130,539 | 3,764,745 |
| Liberty Latin America Ltd., Class A * | 19,100 | 229,582 |
| Liberty Latin America Ltd., Class C * | 61,828 | 743,791 |
| Lumen Technologies, Inc. | 382,679 | 4,538,573 |
| Ooma, Inc. * | 9,017 | 208,293 |
| Radius Global Infrastructure, Inc., Class A * | 21,757 | 377,049 |
| Shenandoah Telecommunications Co. | 19,247 | 531,987 |
| Spok Holdings, Inc. | 9,091 | 93,546 |
| Telephone & Data Systems, Inc. | 38,447 | 720,497 |
| T-Mobile US, Inc. * | 222,935 | 25,644,213 |
| United States Cellular Corp. * | 5,400 | 165,078 |
| Verizon Communications, Inc. | 1,573,957 | 83,403,981 |
| 199,948,624 | ||
| Transportation 1.9% | ||
| Air T, Inc. * | 1,364 | 36,405 |
| Air Transport Services Group, Inc. * | 22,220 | 553,056 |
| Alaska Air Group, Inc. * | 48,176 | 2,543,693 |
| Allegiant Travel Co. * | 5,816 | 1,019,370 |
| AMERCO | 3,769 | 2,777,715 |
| American Airlines Group, Inc. * | 247,706 | 4,755,955 |
| ArcBest Corp. | 10,126 | 909,821 |
| Atlas Air Worldwide Holdings, Inc. * | 10,362 | 840,565 |
| Avis Budget Group, Inc. * | 17,870 | 3,097,050 |
| Blade Air Mobility, Inc. *(a) | 18,079 | 171,208 |
| C.H. Robinson Worldwide, Inc. | 50,149 | 4,863,952 |
| Covenant Logistics Group, Inc. * | 5,112 | 145,181 |
| CSX Corp. | 856,054 | 30,963,473 |
| Daseke, Inc. * | 21,096 | 199,357 |
| Delta Air Lines, Inc. * | 244,695 | 9,574,915 |
| Eagle Bulk Shipping, Inc. * | 4,815 | 207,286 |
| Echo Global Logistics, Inc. * | 10,195 | 491,705 |
| Expeditors International of Washington, Inc. | 64,848 | 7,993,165 |
| FedEx Corp. | 93,611 | 22,048,199 |
| Forward Air Corp. | 10,091 | 1,014,751 |
| Frontier Group Holdings, Inc. * | 11,140 | 174,341 |
| Genco Shipping & Trading Ltd. | 14,965 | 256,949 |
| GXO Logistics, Inc. * | 37,808 | 3,357,350 |
| Hawaiian Holdings, Inc. * | 20,177 | 390,425 |
| Heartland Express, Inc. | 18,164 | 296,618 |
| Hub Group, Inc., Class A * | 12,798 | 1,005,539 |
104
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| HyreCar, Inc. * | 6,951 | 47,197 |
| JB Hunt Transport Services, Inc. | 31,947 | 6,299,629 |
| JetBlue Airways Corp. * | 118,914 | 1,668,363 |
| Joby Aviation, Inc. *(a) | 99,912 | 867,236 |
| Kansas City Southern | 34,559 | 10,721,930 |
| Kirby Corp. * | 22,767 | 1,193,218 |
| Knight-Swift Transportation Holdings, Inc. | 63,629 | 3,607,128 |
| Landstar System, Inc. | 14,704 | 2,585,110 |
| Lyft, Inc., Class A * | 110,648 | 5,075,424 |
| Marten Transport Ltd. | 22,339 | 371,498 |
| Matson, Inc. | 16,723 | 1,392,691 |
| Mesa Air Group, Inc. * | 10,446 | 78,763 |
| Norfolk Southern Corp. | 93,754 | 27,474,610 |
| Old Dominion Freight Line, Inc. | 35,562 | 12,139,089 |
| Pangaea Logistics Solutions Ltd. | 11,475 | 51,867 |
| Radiant Logistics, Inc. * | 16,850 | 113,401 |
| Ryder System, Inc. | 20,467 | 1,738,672 |
| Saia, Inc. * | 10,062 | 3,145,784 |
| Schneider National, Inc., Class B | 14,302 | 356,692 |
| SkyWest, Inc. * | 19,151 | 824,068 |
| Southwest Airlines Co. * | 224,807 | 10,628,875 |
| Spirit Airlines, Inc. * | 41,085 | 897,707 |
| Sun Country Airlines Holdings, Inc. * | 11,739 | 355,457 |
| TuSimple Holdings, Inc., Class A * | 12,484 | 488,374 |
| Uber Technologies, Inc. * | 616,578 | 27,018,448 |
| Union Pacific Corp. | 247,838 | 59,828,093 |
| United Airlines Holdings, Inc. * | 124,188 | 5,730,034 |
| United Parcel Service, Inc., Class B | 276,802 | 59,088,923 |
| Universal Logistics Holdings, Inc. | 3,300 | 69,564 |
| US Xpress Enterprises, Inc., Class A * | 8,327 | 63,035 |
| USA Truck, Inc. * | 3,572 | 68,832 |
| Werner Enterprises, Inc. | 23,764 | 1,076,985 |
| Wheels Up Experience, Inc. *(a) | 67,393 | 472,425 |
| XPO Logistics, Inc. * | 37,163 | 3,188,585 |
| Yellow Corp. * | 17,799 | 155,741 |
| 348,571,492 | ||
| Utilities 2.3% | ||
| ALLETE, Inc. | 19,789 | 1,217,815 |
| Alliant Energy Corp. | 95,916 | 5,425,968 |
| Ameren Corp. | 98,312 | 8,286,718 |
| American Electric Power Co., Inc. | 189,745 | 16,073,299 |
| American States Water Co. | 13,666 | 1,241,419 |
| American Water Works Co., Inc. | 68,845 | 11,991,422 |
| Artesian Resources Corp., Class A | 3,837 | 154,324 |
| Atmos Energy Corp. | 49,540 | 4,563,625 |
| Avangrid, Inc. | 27,027 | 1,424,323 |
| Avista Corp. | 26,813 | 1,067,426 |
| Black Hills Corp. | 23,760 | 1,577,189 |
| Cadiz, Inc. *(a) | 12,851 | 78,006 |
| California Water Service Group | 19,523 | 1,188,560 |
| CenterPoint Energy, Inc. | 225,732 | 5,878,061 |
| Chesapeake Utilities Corp. | 6,642 | 870,567 |
| Clearway Energy, Inc., Class A | 12,928 | 426,495 |
| Clearway Energy, Inc., Class C | 30,513 | 1,082,601 |
| CMS Energy Corp. | 110,448 | 6,665,537 |
| Consolidated Edison, Inc. | 134,800 | 10,163,920 |
| Dominion Energy, Inc. | 307,354 | 23,337,389 |
| DTE Energy Co. | 73,732 | 8,357,522 |
| Duke Energy Corp. | 292,154 | 29,802,630 |
| Edison International | 145,364 | 9,147,757 |
| Entergy Corp. | 76,514 | 7,882,472 |
| Essential Utilities, Inc. | 85,560 | 4,027,309 |
| Evergy, Inc. | 87,223 | 5,560,466 |
| Eversource Energy | 130,816 | 11,106,278 |
| Exelon Corp. | 370,930 | 19,729,767 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| FirstEnergy Corp. | 206,813 | 7,968,505 |
| Genie Energy Ltd., Class B | 11,877 | 58,791 |
| Global Water Resources, Inc. | 4,694 | 88,810 |
| Hawaiian Electric Industries, Inc. | 41,238 | 1,672,613 |
| IDACORP, Inc. | 19,472 | 2,031,319 |
| MDU Resources Group, Inc. | 77,549 | 2,383,081 |
| MGE Energy, Inc. | 13,779 | 1,045,688 |
| Middlesex Water Co. | 6,534 | 719,524 |
| Montauk Renewables, Inc. * | 23,000 | 256,450 |
| National Fuel Gas Co. | 34,344 | 1,972,376 |
| New Jersey Resources Corp. | 37,868 | 1,431,789 |
| NextEra Energy, Inc. | 745,638 | 63,625,291 |
| NiSource, Inc. | 150,073 | 3,702,301 |
| Northwest Natural Holding Co. | 11,336 | 511,140 |
| NorthWestern Corp. | 20,059 | 1,140,555 |
| NRG Energy, Inc. | 93,036 | 3,711,206 |
| OGE Energy Corp. | 75,725 | 2,579,951 |
| ONE Gas, Inc. | 20,122 | 1,354,211 |
| Ormat Technologies, Inc. | 17,702 | 1,280,386 |
| Otter Tail Corp. | 15,277 | 947,327 |
| PG&E Corp. * | 574,209 | 6,660,824 |
| Pinnacle West Capital Corp. | 42,698 | 2,753,594 |
| PNM Resources, Inc. | 33,239 | 1,653,640 |
| Portland General Electric Co. | 34,344 | 1,693,503 |
| PPL Corp. | 292,714 | 8,430,163 |
| Public Service Enterprise Group, Inc. | 192,107 | 12,256,427 |
| Pure Cycle Corp. * | 8,000 | 125,520 |
| RGC Resources, Inc. | 3,883 | 85,892 |
| Sempra Energy | 121,472 | 15,503,471 |
| SJW Group | 10,924 | 720,110 |
| South Jersey Industries, Inc. | 41,802 | 951,414 |
| Southwest Gas Holdings, Inc. | 23,277 | 1,611,932 |
| Spire, Inc. | 19,339 | 1,213,716 |
| Sunnova Energy International, Inc. * | 35,218 | 1,569,314 |
| The AES Corp. | 251,684 | 6,324,819 |
| The Southern Co. | 401,967 | 25,050,583 |
| The York Water Co. | 4,611 | 220,959 |
| UGI Corp. | 79,110 | 3,434,165 |
| Unitil Corp. | 6,060 | 253,005 |
| Vistra Corp. | 183,289 | 3,590,632 |
| WEC Energy Group, Inc. | 120,577 | 10,859,165 |
| Xcel Energy, Inc. | 204,787 | 13,227,192 |
| 415,000,219 | ||
| Total Common Stocks (Cost $8,163,985,853) | 18,122,370,786 | |
| PREFERRED STOCKS 0.0% OF NET ASSETS | ||
| Semiconductors & Semiconductor Equipment 0.0% | ||
| Meta Materials, Inc. *(b) | 48,543 | 62,135 |
| Software & Services 0.0% | ||
| SRAX, Inc. *(b) | 9,789 | 588 |
| Total Preferred Stocks (Cost $14,265) | 62,723 | |
| RIGHTS 0.0% OF NET ASSETS | ||
| Consumer Durables & Apparel 0.0% | ||
| ZAGG, Inc. CVR *(b) | 8,000 | 720 |
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See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Food & Staples Retailing 0.0% | ||
| Blue Apron Holdings, Inc., Class A *(b) | 3,119 | 4,664 |
| Media & Entertainment 0.0% | ||
| Media General, Inc. CVR *(b) | 18,400 | 1,566 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||
| Adicet Bio, Inc. CVR *(b) | 780 | 0 |
| Aduro Biotech, Inc. CVR *(b) | 5,747 | 11,922 |
| Elanco Animal Health, Inc. CVR *(b) | 16,000 | 97 |
| F-star Therapeutics, Inc. Agonist CVR *(b) | 975 | 395 |
| F-star Therapeutics, Inc. Antagonist CVR *(b) | 975 | 395 |
| 12,809 | ||
| Total Rights (Cost $1,123) | 19,759 | |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.8% OF NET ASSETS | ||
| Money Market Funds 0.3% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (d)(e) | 51,473,181 | 51,473,181 |
| Time Deposits 0.5% | ||
| Barclays Capital, Inc. | ||
| 0.01%, 11/01/21 (f) | 85,369,599 | 85,369,598 |
| Total Short-Term Investments (Cost $136,842,779) | 136,842,779 | |
| Total Investments in Securities (Cost $8,300,844,020) | 18,259,296,047 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| Russell 2000 Index, e-mini, expires 12/17/21 | 137 | 15,722,805 | 242,864 |
| S&P 500 Index, e-mini, expires 12/17/21 | 390 | 89,641,500 | 3,002,215 |
| Net Unrealized Appreciation | 3,245,079 | ||
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $49,923,975. |
| (b) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees. |
| (c) | Issuer is affiliated with the fund’s investment adviser. |
| (d) | The rate shown is the 7-day yield. |
| (e) | Security purchased with cash collateral received for securities on loan. |
| (f) | The rate shown is the current daily overnight rate. |
| CVR — | Contingent Value Rights |
| REIT — | Real Estate Investment Trust |
Below is a summary of the fund’s transactions with affiliated issuers during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DIVIDENDS RECEIVED | |
| COMMON STOCKS 0.3% OF NET ASSETS | ||||||||
| Diversified Financials 0.3% | ||||||||
| The Charles Schwab Corp. | $21,138,598 | $3,891,224 | ($422,548) | ($22,588) | $22,049,615 | $46,634,301 | 568,503 | $389,161 |
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Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $13,165,464,852 | $— | $— | $13,165,464,852 |
| Automobiles & Components | 467,784,571 | — | 14,063 | 467,798,634 |
| Health Care Equipment & Services | 1,119,495,910 | — | 124,279 | 1,119,620,189 |
| Real Estate | 614,903,320 | — | 0* | 614,903,320 |
| Software & Services | 2,754,569,809 | — | 13,982 | 2,754,583,791 |
| Preferred Stocks1 | — | — | 62,723 | 62,723 |
| Rights 1 | ||||
| Consumer Durables & Apparel | — | — | 720 | 720 |
| Food & Staples Retailing | — | — | 4,664 | 4,664 |
| Media & Entertainment | — | — | 1,566 | 1,566 |
| Pharmaceuticals, Biotechnology & Life Sciences | — | — | 12,809* | 12,809 |
| Short-Term Investments1 | 51,473,181 | — | — | 51,473,181 |
| Time Deposits | — | 85,369,598 | — | 85,369,598 |
| Futures Contracts2 | 3,245,079 | — | — | 3,245,079 |
| Total | $18,176,936,722 | $85,369,598 | $234,806 | $18,262,541,126 |
| * | Level 3 amount shown includes securities determined to have no value at October 31, 2021. |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments and are valued at the unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Total Stock Market Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $19,058,434) | $46,634,301 | |
| Investments in securities, at value - unaffiliated (cost $8,281,785,586) including securities on loan of $49,923,975 | 18,212,661,746 | |
| Deposit with broker for futures contracts | 7,522,000 | |
| Receivables: | ||
| Dividends | 12,051,210 | |
| Fund shares sold | 7,745,504 | |
| Income from securities on loan | 229,279 | |
| Variation margin on future contracts | + | 176,604 |
| Total assets | 18,287,020,644 | |
| Liabilities | ||
| Collateral held for securities on loan | 51,473,181 | |
| Payables: | ||
| Fund shares redeemed | 2,947,372 | |
| Investment adviser fees | 448,634 | |
| Deferred dividend income | 271,259 | |
| Investments bought | + | 202,273 |
| Total liabilities | 55,342,719 | |
| Net assets | $18,231,677,925 | |
| Net Assets by Source | ||
| Capital received from investors | $8,159,853,528 | |
| Total distributable earnings | + | 10,071,824,397 |
| Net assets | $18,231,677,925 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $18,231,677,925 | 223,321,346 | $81.64 | ||
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Schwab Equity Index Funds | Annual Report
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Schwab Total Stock Market Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $389,161 | |
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $43,469) | 215,891,044 | |
| Interest received from securities - unaffiliated | 6,340 | |
| Securities on loan, net | + | 1,484,306 |
| Total investment income | 217,770,851 | |
| Expenses | ||
| Investment adviser fees | + | 4,674,020 |
| Total expenses | – | 4,674,020 |
| Net investment income | 213,096,831 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on sales of securities - affiliated | (22,588) | |
| Net realized gains on sales of securities - unaffiliated | 10,430,171 | |
| Net realized gains on futures contracts | + | 24,325,338 |
| Net realized gains | 34,732,921 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 22,049,615 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 4,982,683,800 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 4,764,584 |
| Net change in unrealized appreciation (depreciation) | + | 5,009,497,999 |
| Net realized and unrealized gains | 5,044,230,920 | |
| Increase in net assets resulting from operations | $5,257,327,751 | |
109
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab Total Stock Market Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $213,096,831 | $212,497,929 | |
| Net realized gains (losses) | 34,732,921 | (25,404,301) | |
| Net change in unrealized appreciation (depreciation) | + | 5,009,497,999 | 847,687,149 |
| Increase in net assets from operations | $5,257,327,751 | $1,034,780,777 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($218,157,695) | ($207,148,798) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 45,495,323 | $3,270,028,626 | 47,954,413 | $2,507,068,155 | |
| Shares reinvested | 2,374,705 | 156,303,072 | 2,723,498 | 151,971,124 | |
| Shares redeemed | + | (23,925,141) | (1,721,261,599) | (42,603,146) | (2,219,143,615) |
| Net transactions in fund shares | 23,944,887 | $1,705,070,099 | 8,074,765 | $439,895,664 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 199,376,459 | $11,487,437,770 | 191,301,694 | $10,219,910,127 | |
| Total increase | + | 23,944,887 | 6,744,240,155 | 8,074,765 | 1,267,527,643 |
| End of period | 223,321,346 | $18,231,677,925 | 199,376,459 | $11,487,437,770 | |
110
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 12/20/17 1– 10/31/18 | |||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $62.76 | $49.06 | $42.37 | $40.00 | ||
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)2 | 0.56 | 0.55 | 0.57 | 0.46 | ||
| Net realized and unrealized gains (losses) | 26.39 | 13.65 | 6.52 | 1.91 3 | ||
| Total from investment operations | 26.95 | 14.20 | 7.09 | 2.37 | ||
| Less distributions: | ||||||
| Distributions from net investment income | (0.48) | (0.50) | (0.40) | — | ||
| Net asset value at end of period | $89.23 | $62.76 | $49.06 | $42.37 | ||
| Total return | 43.14% | 29.16% | 17.04% | 5.93% 4 | ||
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.035% | 0.035% | 0.035% 5 | 0.040% 6,7 | ||
| Net operating expenses | N/A | N/A | N/A | 0.02% 6,7 | ||
| Net investment income (loss) | 0.73% | 0.97% | 1.27% | 1.23% 6 | ||
| Portfolio turnover rate | 18% | 41% | 46% | 23% 4 | ||
| Net assets, end of period (x 1,000,000) | $881 | $487 | $166 | $93 | ||
| 1 | Commencement of operations. |
| 2 | Calculated based on the average shares outstanding during the period. |
| 3 | The per share amount does not accord with the change in aggregate gains and losses in securities during the period because of the timing of sales and repurchases of fund shares in relation to fluctuating market values. |
| 4 | Not annualized. |
| 5 | Effective December 20, 2018, the annual operating expense ratio was reduced to 0.035%. The ratio presented for period ended 10/31/19 is a blended ratio. |
| 6 | Annualized. |
| 7 | The investment adviser voluntarily agreed to waive the fund’s management fees to 0.00% beginning with the fund’s commencement of operations through June 30, 2018. The ratio presented for period ended 10/31/18 is a blended ratio. |
111
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.5% OF NET ASSETS | ||
| Automobiles & Components 3.9% | ||
| Aptiv plc * | 1,867 | 322,786 |
| QuantumScape Corp. * | 5,550 | 160,617 |
| Tesla, Inc. * | 30,158 | 33,596,012 |
| Thor Industries, Inc. | 825 | 84,117 |
| 34,163,532 | ||
| Banks 0.1% | ||
| Citizens Financial Group, Inc. | 2,805 | 132,901 |
| Rocket Cos., Inc., Class A | 5,274 | 86,916 |
| Sterling Bancorp | 531 | 13,514 |
| Synovus Financial Corp. | 385 | 17,937 |
| UWM Holdings Corp. | 1,611 | 10,955 |
| Western Alliance Bancorp | 2,012 | 233,573 |
| 495,796 | ||
| Capital Goods 3.0% | ||
| 3M Co. | 3,190 | 569,989 |
| Advanced Drainage Systems, Inc. | 2,284 | 257,635 |
| AGCO Corp. | 237 | 28,964 |
| Allegion plc | 2,584 | 331,527 |
| Allison Transmission Holdings, Inc. | 3,030 | 101,081 |
| Armstrong World Industries, Inc. | 875 | 92,444 |
| Axon Enterprise, Inc. * | 2,449 | 440,722 |
| BWX Technologies, Inc. | 2,693 | 152,801 |
| Carlisle Cos., Inc. | 748 | 166,744 |
| Carrier Global Corp. | 15,369 | 802,723 |
| Caterpillar, Inc. | 17,866 | 3,644,843 |
| Core & Main, Inc., Class A * | 674 | 18,441 |
| Deere & Co. | 10,663 | 3,650,051 |
| Donaldson Co., Inc. | 615 | 36,906 |
| Fastenal Co. | 19,231 | 1,097,705 |
| Fortune Brands Home & Security, Inc. | 1,334 | 135,268 |
| Generac Holdings, Inc. * | 2,317 | 1,155,163 |
| Graco, Inc. | 3,949 | 296,886 |
| HEICO Corp. | 555 | 77,361 |
| HEICO Corp., Class A | 956 | 120,150 |
| Honeywell International, Inc. | 5,678 | 1,241,324 |
| Howmet Aerospace, Inc. | 1,028 | 30,521 |
| Illinois Tool Works, Inc. | 10,672 | 2,431,829 |
| Lincoln Electric Holdings, Inc. | 2,162 | 307,869 |
| Lockheed Martin Corp. | 8,190 | 2,721,701 |
| Nordson Corp. | 378 | 96,091 |
| Northrop Grumman Corp. | 498 | 177,896 |
| Parker-Hannifin Corp. | 805 | 238,755 |
| Plug Power, Inc. * | 19,344 | 740,295 |
| Regal Rexnord Corp. | 531 | 80,887 |
| Rockwell Automation, Inc. | 2,662 | 850,243 |
| SiteOne Landscape Supply, Inc. * | 867 | 203,710 |
| Spirit AeroSystems Holdings, Inc., Class A | 1,168 | 48,227 |
| The AZEK Co., Inc. * | 2,337 | 85,745 |
| The Middleby Corp. * | 622 | 113,478 |
| The Toro Co. | 3,828 | 365,459 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Trane Technologies plc | 4,394 | 795,006 |
| TransDigm Group, Inc. * | 562 | 350,587 |
| Trex Co., Inc. * | 4,377 | 465,713 |
| United Rentals, Inc. * | 945 | 358,259 |
| Vertiv Holdings Co. | 10,645 | 273,364 |
| Virgin Galactic Holdings, Inc. *(a) | 6,242 | 117,037 |
| W.W. Grainger, Inc. | 1,454 | 673,362 |
| Xylem, Inc. | 4,455 | 581,778 |
| 26,526,540 | ||
| Commercial & Professional Services 0.8% | ||
| Booz Allen Hamilton Holding Corp. | 5,029 | 436,819 |
| Cintas Corp. | 3,092 | 1,339,145 |
| Copart, Inc. * | 7,896 | 1,226,170 |
| CoStar Group, Inc. * | 11,485 | 988,284 |
| Equifax, Inc. | 1,750 | 485,502 |
| IAA, Inc. * | 5,099 | 304,155 |
| LegalZoom.com, Inc. * | 422 | 11,833 |
| MSA Safety, Inc. | 394 | 60,294 |
| Robert Half International, Inc. | 3,636 | 411,123 |
| Rollins, Inc. | 7,947 | 279,973 |
| TransUnion | 4,948 | 570,455 |
| Verisk Analytics, Inc. | 3,819 | 803,021 |
| Waste Management, Inc. | 2,535 | 406,183 |
| 7,322,957 | ||
| Consumer Durables & Apparel 1.6% | ||
| Brunswick Corp. | 388 | 36,119 |
| Columbia Sportswear Co. | 87 | 9,034 |
| D.R. Horton, Inc. | 5,182 | 462,597 |
| Deckers Outdoor Corp. * | 143 | 56,529 |
| Hanesbrands, Inc. | 7,832 | 133,457 |
| Lululemon Athletica, Inc. * | 4,311 | 2,008,969 |
| Mattel, Inc. * | 13,154 | 286,889 |
| NIKE, Inc., Class B | 46,868 | 7,840,548 |
| NVR, Inc. * | 82 | 401,374 |
| Peloton Interactive, Inc., Class A * | 9,975 | 912,114 |
| Polaris, Inc. | 1,495 | 171,850 |
| PulteGroup, Inc. | 2,815 | 135,345 |
| Skechers U.S.A., Inc., Class A * | 521 | 24,075 |
| Tapestry, Inc. | 1,083 | 42,215 |
| Tempur Sealy International, Inc. | 6,863 | 305,198 |
| Toll Brothers, Inc. | 1,721 | 103,553 |
| TopBuild Corp. * | 1,036 | 266,221 |
| VF Corp. | 7,854 | 572,400 |
| YETI Holdings, Inc. * | 3,231 | 317,704 |
| 14,086,191 | ||
| Consumer Services 2.4% | ||
| Booking Holdings, Inc. * | 1,551 | 3,754,630 |
| Boyd Gaming Corp. * | 673 | 42,924 |
| Bright Horizons Family Solutions, Inc. * | 1,837 | 304,942 |
| Caesars Entertainment, Inc. * | 4,776 | 522,781 |
| Chegg, Inc. * | 4,100 | 243,704 |
| Chipotle Mexican Grill, Inc. * | 1,061 | 1,887,551 |
112
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Choice Hotels International, Inc. | 1,314 | 184,775 |
| Churchill Downs, Inc. | 1,393 | 320,390 |
| Darden Restaurants, Inc. | 3,338 | 481,139 |
| Domino’s Pizza, Inc. | 944 | 461,588 |
| DraftKings, Inc., Class A * | 11,473 | 534,527 |
| Expedia Group, Inc. * | 5,482 | 901,296 |
| Frontdoor, Inc. * | 2,217 | 82,650 |
| H&R Block, Inc. | 5,412 | 124,855 |
| Hilton Worldwide Holdings, Inc. * | 6,939 | 998,869 |
| Las Vegas Sands Corp. * | 12,498 | 485,047 |
| Marriott International, Inc., Class A * | 10,281 | 1,645,166 |
| McDonald’s Corp. | 5,031 | 1,235,362 |
| Mister Car Wash, Inc. * | 1,224 | 22,448 |
| Penn National Gaming, Inc. * | 389 | 27,852 |
| Planet Fitness, Inc., Class A * | 2,163 | 172,067 |
| Six Flags Entertainment Corp. * | 1,127 | 46,353 |
| Starbucks Corp. | 44,576 | 4,728,176 |
| The Wendy's Co. | 6,769 | 150,949 |
| Travel & Leisure Co. | 2,106 | 114,440 |
| Vail Resorts, Inc. | 1,508 | 519,823 |
| Wyndham Hotels & Resorts, Inc. | 2,184 | 184,482 |
| Wynn Resorts Ltd. * | 3,977 | 357,134 |
| Yum China Holdings, Inc. | 1,222 | 69,752 |
| Yum! Brands, Inc. | 968 | 120,942 |
| 20,726,614 | ||
| Diversified Financials 2.2% | ||
| American Express Co. | 15,503 | 2,694,111 |
| Ameriprise Financial, Inc. | 2,398 | 724,508 |
| Apollo Global Management, Inc. | 6,843 | 526,569 |
| Ares Management Corp., Class A | 4,577 | 387,855 |
| Blackstone, Inc. | 25,750 | 3,564,315 |
| Credit Acceptance Corp. * | 24 | 14,357 |
| Discover Financial Services | 6,218 | 704,624 |
| FactSet Research Systems, Inc. | 1,233 | 547,316 |
| LPL Financial Holdings, Inc. | 3,006 | 493,044 |
| MarketAxess Holdings, Inc. | 1,412 | 577,042 |
| Moody's Corp. | 5,816 | 2,350,536 |
| Morningstar, Inc. | 801 | 253,717 |
| MSCI, Inc. | 2,148 | 1,428,162 |
| Raymond James Financial, Inc. | 376 | 37,070 |
| S&P Global, Inc. | 6,447 | 3,056,910 |
| Synchrony Financial | 4,029 | 187,147 |
| T. Rowe Price Group, Inc. | 2,818 | 611,168 |
| The Goldman Sachs Group, Inc. | 689 | 284,798 |
| Upstart Holdings, Inc. * | 1,706 | 549,400 |
| 18,992,649 | ||
| Energy 0.3% | ||
| Cheniere Energy, Inc. * | 8,857 | 915,814 |
| Continental Resources, Inc. | 237 | 11,568 |
| Coterra Energy, Inc. | 4,761 | 101,505 |
| Diamondback Energy, Inc. | 3,239 | 347,189 |
| EOG Resources, Inc. | 2,609 | 241,228 |
| Halliburton Co. | 1,871 | 46,756 |
| Hess Corp. | 725 | 59,863 |
| New Fortress Energy, Inc. | 1,023 | 30,690 |
| Occidental Petroleum Corp. | 4,044 | 135,595 |
| Pioneer Natural Resources Co. | 3,639 | 680,420 |
| Texas Pacific Land Corp. | 223 | 284,028 |
| 2,854,656 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Food & Staples Retailing 1.0% | ||
| Costco Wholesale Corp. | 15,637 | 7,686,211 |
| Sysco Corp. | 18,427 | 1,417,036 |
| 9,103,247 | ||
| Food, Beverage & Tobacco 2.0% | ||
| Altria Group, Inc. | 38,940 | 1,717,643 |
| Beyond Meat, Inc. *(a) | 1,901 | 188,161 |
| Brown-Forman Corp., Class A | 816 | 52,248 |
| Brown-Forman Corp., Class B | 3,466 | 235,307 |
| Darling Ingredients, Inc. * | 334 | 28,230 |
| Freshpet, Inc. * | 1,544 | 240,725 |
| Kellogg Co. | 4,234 | 259,544 |
| Lamb Weston Holdings, Inc. | 1,618 | 91,336 |
| Monster Beverage Corp. * | 13,025 | 1,107,125 |
| PepsiCo, Inc. | 43,383 | 7,010,693 |
| Pilgrim's Pride Corp. * | 688 | 19,374 |
| The Boston Beer Co., Inc., Class A * | 354 | 174,338 |
| The Coca-Cola Co. | 103,704 | 5,845,795 |
| The Hershey Co. | 4,747 | 832,386 |
| 17,802,905 | ||
| Health Care Equipment & Services 3.6% | ||
| Abbott Laboratories | 32,854 | 4,234,552 |
| ABIOMED, Inc. * | 1,672 | 555,171 |
| agilon health, Inc. * | 2,361 | 57,844 |
| Align Technology, Inc. * | 2,975 | 1,857,501 |
| Amedisys, Inc. * | 1,077 | 182,379 |
| Cardinal Health, Inc. | 6,492 | 310,382 |
| Certara, Inc. * | 1,748 | 72,210 |
| Chemed Corp. | 154 | 74,266 |
| Danaher Corp. | 1,245 | 388,154 |
| DaVita, Inc. * | 1,823 | 188,206 |
| DexCom, Inc. * | 3,643 | 2,270,354 |
| Edwards Lifesciences Corp. * | 23,367 | 2,799,834 |
| Encompass Health Corp. | 2,105 | 133,794 |
| Figs, Inc., Class A * | 352 | 11,831 |
| Globus Medical, Inc., Class A * | 139 | 10,727 |
| Guardant Health, Inc. * | 3,400 | 397,086 |
| HCA Healthcare, Inc. | 9,526 | 2,385,882 |
| IDEXX Laboratories, Inc. * | 3,198 | 2,130,316 |
| Insulet Corp. * | 2,501 | 775,360 |
| Intuitive Surgical, Inc. * | 13,401 | 4,839,503 |
| Masimo Corp. * | 1,367 | 387,599 |
| McKesson Corp. | 843 | 175,243 |
| Molina Healthcare, Inc. * | 334 | 98,770 |
| Novocure Ltd. * | 3,878 | 397,766 |
| Oak Street Health, Inc. * | 3,382 | 159,732 |
| Penumbra, Inc. * | 1,278 | 353,431 |
| ResMed, Inc. | 4,894 | 1,286,682 |
| STERIS plc | 444 | 103,781 |
| Stryker Corp. | 5,630 | 1,497,974 |
| Tandem Diabetes Care, Inc. * | 2,160 | 294,473 |
| Teleflex, Inc. | 311 | 111,008 |
| UnitedHealth Group, Inc. | 2,453 | 1,129,533 |
| Veeva Systems, Inc., Class A * | 5,177 | 1,641,161 |
| 31,312,505 | ||
| Household & Personal Products 0.6% | ||
| Church & Dwight Co., Inc. | 492 | 42,981 |
| Colgate-Palmolive Co. | 16,737 | 1,275,192 |
| Herbalife Nutrition Ltd. * | 683 | 31,691 |
| Kimberly-Clark Corp. | 6,413 | 830,420 |
113
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See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| The Clorox Co. | 3,755 | 612,103 |
| The Estee Lauder Cos., Inc., Class A | 8,655 | 2,807,076 |
| 5,599,463 | ||
| Insurance 0.3% | ||
| Alleghany Corp. * | 57 | 37,129 |
| Aon plc, Class A | 4,982 | 1,593,841 |
| Arch Capital Group Ltd. * | 3,445 | 144,070 |
| Brown & Brown, Inc. | 541 | 34,143 |
| Erie Indemnity Co., Class A | 650 | 133,776 |
| Everest Re Group Ltd. | 343 | 89,694 |
| GoHealth, Inc., Class A * | 1,453 | 7,846 |
| Lemonade, Inc. * | 141 | 8,765 |
| Lincoln National Corp. | 1,070 | 77,201 |
| Markel Corp. * | 86 | 112,929 |
| Marsh & McLennan Cos., Inc. | 2,277 | 379,804 |
| RenaissanceRe Holdings Ltd. | 783 | 111,029 |
| 2,730,227 | ||
| Materials 1.0% | ||
| Avery Dennison Corp. | 1,661 | 361,633 |
| Axalta Coating Systems Ltd. * | 1,391 | 43,385 |
| Ball Corp. | 3,583 | 327,773 |
| Celanese Corp. | 1,533 | 247,595 |
| Crown Holdings, Inc. | 590 | 61,354 |
| Diversey Holdings Ltd. * | 1,401 | 24,377 |
| Dow, Inc. | 2,053 | 114,906 |
| Ecolab, Inc. | 8,289 | 1,841,982 |
| FMC Corp. | 1,219 | 110,941 |
| Freeport-McMoRan, Inc. | 16,179 | 610,272 |
| Graphic Packaging Holding Co. | 2,978 | 59,352 |
| Louisiana-Pacific Corp. | 263 | 15,499 |
| LyondellBasell Industries N.V., Class A | 1,214 | 112,683 |
| Olin Corp. | 432 | 24,615 |
| PPG Industries, Inc. | 3,773 | 605,831 |
| RPM International, Inc. | 2,809 | 244,945 |
| Sealed Air Corp. | 3,075 | 182,409 |
| Southern Copper Corp. | 2,911 | 174,631 |
| Steel Dynamics, Inc. | 1,394 | 92,116 |
| The Chemours Co. | 3,214 | 90,056 |
| The Scotts Miracle-Gro Co. | 1,553 | 230,558 |
| The Sherwin-Williams Co. | 9,222 | 2,919,777 |
| Westlake Chemical Corp. | 235 | 22,875 |
| 8,519,565 | ||
| Media & Entertainment 12.2% | ||
| Alphabet, Inc., Class A * | 9,794 | 28,999,250 |
| Alphabet, Inc., Class C * | 9,138 | 27,097,917 |
| Altice USA, Inc., Class A * | 5,599 | 91,264 |
| Cable One, Inc. | 108 | 184,811 |
| Charter Communications, Inc., Class A * | 4,589 | 3,097,070 |
| Live Nation Entertainment, Inc. * | 1,939 | 196,130 |
| Madison Square Garden Sports Corp. * | 277 | 52,494 |
| Match Group, Inc. * | 10,442 | 1,574,445 |
| Meta Platforms, Inc., Class A * | 90,532 | 29,293,439 |
| Netflix, Inc. * | 16,338 | 11,278,285 |
| Nexstar Media Group, Inc., Class A | 99 | 14,843 |
| Pinterest, Inc., Class A * | 20,957 | 935,520 |
| Playtika Holding Corp. * | 3,956 | 111,876 |
| Roku, Inc. * | 4,400 | 1,341,560 |
| Skillz, Inc. *(a) | 11,068 | 123,740 |
| Spotify Technology S.A. * | 5,164 | 1,494,462 |
| Take-Two Interactive Software, Inc. * | 871 | 157,651 |
| The Walt Disney Co. * | 3,504 | 592,421 |
| TripAdvisor, Inc. * | 2,244 | 73,985 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Twitter, Inc. * | 3,074 | 164,582 |
| Vimeo, Inc. * | 5,049 | 170,303 |
| World Wrestling Entertainment, Inc., Class A | 1,458 | 89,069 |
| Zynga, Inc., Class A * | 17,875 | 131,917 |
| 107,267,034 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 5.2% | ||
| 10X Genomics, Inc., Class A * | 3,157 | 509,129 |
| AbbVie, Inc. | 66,822 | 7,662,479 |
| Acceleron Pharma, Inc. * | 1,996 | 347,663 |
| Adaptive Biotechnologies Corp. * | 3,694 | 123,417 |
| Agilent Technologies, Inc. | 10,301 | 1,622,304 |
| Alnylam Pharmaceuticals, Inc. * | 4,485 | 715,627 |
| Amgen, Inc. | 17,677 | 3,658,609 |
| Avantor, Inc. * | 21,924 | 885,291 |
| Bio-Techne Corp. | 1,461 | 765,053 |
| Bruker Corp. | 3,855 | 309,556 |
| Catalent, Inc. * | 1,446 | 199,346 |
| Charles River Laboratories International, Inc. * | 1,763 | 791,023 |
| CureVac N.V. * | 1,975 | 79,138 |
| Eli Lilly & Co. | 25,330 | 6,453,071 |
| Exact Sciences Corp. * | 5,967 | 568,178 |
| Exelixis, Inc. * | 10,031 | 215,767 |
| Horizon Therapeutics plc * | 1,541 | 184,781 |
| Illumina, Inc. * | 5,516 | 2,289,471 |
| Incyte Corp. * | 5,976 | 400,272 |
| Ionis Pharmaceuticals, Inc. * | 4,904 | 156,290 |
| Iovance Biotherapeutics, Inc. * | 1,736 | 42,202 |
| IQVIA Holdings, Inc. * | 3,564 | 931,701 |
| Maravai LifeSciences Holdings, Inc., Class A * | 3,871 | 163,705 |
| Mettler-Toledo International, Inc. * | 867 | 1,283,923 |
| Mirati Therapeutics, Inc. * | 1,235 | 233,440 |
| Moderna, Inc. * | 12,796 | 4,417,307 |
| Natera, Inc. * | 2,943 | 337,179 |
| Neurocrine Biosciences, Inc. * | 3,539 | 373,046 |
| Novavax, Inc. * | 2,791 | 415,385 |
| PPD, Inc. * | 2,456 | 115,850 |
| Regeneron Pharmaceuticals, Inc. * | 406 | 259,816 |
| Repligen Corp. * | 1,946 | 565,313 |
| Royalty Pharma plc, Class A | 7,287 | 288,055 |
| Sarepta Therapeutics, Inc. * | 3,116 | 246,569 |
| Seagen, Inc. * | 4,507 | 794,719 |
| Sotera Health Co. * | 3,784 | 93,465 |
| Syneos Health, Inc. * | 499 | 46,577 |
| Thermo Fisher Scientific, Inc. | 1,336 | 845,781 |
| Ultragenyx Pharmaceutical, Inc. * | 1,813 | 152,147 |
| Vertex Pharmaceuticals, Inc. * | 3,921 | 725,111 |
| Waters Corp. * | 2,150 | 790,232 |
| West Pharmaceutical Services, Inc. | 2,777 | 1,193,777 |
| Zoetis, Inc. | 17,022 | 3,680,156 |
| 45,931,921 | ||
| Real Estate 1.7% | ||
| American Tower Corp. | 17,071 | 4,813,510 |
| CBRE Group, Inc., Class A * | 668 | 69,526 |
| CoreSite Realty Corp. | 1,290 | 183,773 |
| Crown Castle International Corp. | 16,293 | 2,937,628 |
| Equinix, Inc. | 2,399 | 2,008,131 |
| Equity LifeStyle Properties, Inc. | 3,470 | 293,250 |
| Extra Space Storage, Inc. | 436 | 86,053 |
| Iron Mountain, Inc. | 7,624 | 347,959 |
| Lamar Advertising Co., Class A | 2,834 | 320,809 |
| Opendoor Technologies, Inc. * | 3,461 | 82,060 |
114
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See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Public Storage | 4,355 | 1,446,644 |
| SBA Communications Corp. | 683 | 235,860 |
| Simon Property Group, Inc. | 10,713 | 1,570,312 |
| Zillow Group, Inc., Class A * | 2,240 | 236,813 |
| Zillow Group, Inc., Class C * | 6,400 | 663,232 |
| 15,295,560 | ||
| Retailing 11.0% | ||
| Amazon.com, Inc. * | 16,416 | 55,361,811 |
| AutoZone, Inc. * | 174 | 310,562 |
| Bath & Body Works, Inc. | 5,329 | 368,181 |
| Best Buy Co., Inc. | 2,167 | 264,894 |
| Burlington Stores, Inc. * | 2,357 | 651,216 |
| CarMax, Inc. * | 525 | 71,883 |
| Carvana Co. * | 2,913 | 883,163 |
| Dollar General Corp. | 3,818 | 845,763 |
| DoorDash, Inc., Class A * | 4,795 | 934,066 |
| eBay, Inc. | 24,574 | 1,885,317 |
| Etsy, Inc. * | 4,787 | 1,200,053 |
| Five Below, Inc. * | 2,081 | 410,581 |
| Floor & Decor Holdings, Inc., Class A * | 3,843 | 522,341 |
| GameStop Corp., Class A * | 2,429 | 445,746 |
| Leslie's, Inc. * | 4,497 | 92,998 |
| Lithia Motors, Inc. | 105 | 33,518 |
| Lowe’s Cos., Inc. | 26,759 | 6,256,789 |
| Nordstrom, Inc. * | 3,469 | 99,664 |
| O'Reilly Automotive, Inc. * | 786 | 489,144 |
| Petco Health & Wellness Co., Inc. * | 167 | 4,130 |
| Pool Corp. | 1,471 | 757,800 |
| RH * | 648 | 427,440 |
| Ross Stores, Inc. | 13,240 | 1,498,768 |
| Target Corp. | 8,428 | 2,188,077 |
| The Home Depot, Inc. | 40,228 | 14,954,357 |
| The TJX Cos., Inc. | 45,620 | 2,987,654 |
| Tractor Supply Co. | 4,345 | 943,604 |
| Ulta Beauty, Inc. * | 2,010 | 738,394 |
| Victoria's Secret & Co. * | 1,680 | 84,790 |
| Vroom, Inc. * | 1,018 | 19,474 |
| Wayfair, Inc., Class A * | 1,580 | 393,578 |
| Williams-Sonoma, Inc. | 2,150 | 399,319 |
| 96,525,075 | ||
| Semiconductors & Semiconductor Equipment 7.6% | ||
| Advanced Micro Devices, Inc. * | 45,781 | 5,504,250 |
| Allegro MicroSystems, Inc. * | 1,488 | 49,640 |
| Analog Devices, Inc. | 8,083 | 1,402,320 |
| Applied Materials, Inc. | 34,627 | 4,731,779 |
| Broadcom, Inc. | 15,102 | 8,029,280 |
| Brooks Automation, Inc. | 2,287 | 266,321 |
| Enphase Energy, Inc. * | 4,983 | 1,154,212 |
| Entegris, Inc. | 5,083 | 715,585 |
| KLA Corp. | 5,797 | 2,160,890 |
| Lam Research Corp. | 5,388 | 3,036,515 |
| Microchip Technology, Inc. | 17,122 | 1,268,569 |
| Micron Technology, Inc. | 5,858 | 404,788 |
| MKS Instruments, Inc. | 1,761 | 264,238 |
| Monolithic Power Systems, Inc. | 1,691 | 888,553 |
| NVIDIA Corp. | 90,501 | 23,138,391 |
| NXP Semiconductors N.V. | 3,076 | 617,845 |
| ON Semiconductor Corp. * | 8,663 | 416,430 |
| QUALCOMM, Inc. | 42,674 | 5,677,349 |
| Skyworks Solutions, Inc. | 2,942 | 491,696 |
| Teradyne, Inc. | 6,279 | 868,009 |
| Texas Instruments, Inc. | 21,664 | 4,061,567 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Universal Display Corp. | 1,640 | 300,448 |
| Xilinx, Inc. | 9,295 | 1,673,100 |
| 67,121,775 | ||
| Software & Services 26.0% | ||
| Accenture plc, Class A | 19,342 | 6,939,716 |
| Adobe, Inc. * | 18,061 | 11,746,152 |
| Alteryx, Inc., Class A * | 2,200 | 161,018 |
| Anaplan, Inc. * | 5,295 | 345,287 |
| ANSYS, Inc. * | 1,370 | 520,025 |
| Aspen Technology, Inc. * | 2,566 | 402,067 |
| Atlassian Corp. plc, Class A * | 5,151 | 2,359,828 |
| Autodesk, Inc. * | 8,326 | 2,644,421 |
| Automatic Data Processing, Inc. | 14,801 | 3,322,676 |
| Avalara, Inc. * | 3,198 | 574,489 |
| Bentley Systems, Inc., Class B | 5,230 | 309,355 |
| Bill.com Holdings, Inc. * | 2,981 | 877,338 |
| Broadridge Financial Solutions, Inc. | 3,970 | 708,288 |
| C3.ai, Inc., Class A * | 334 | 15,070 |
| Cadence Design Systems, Inc. * | 10,385 | 1,797,747 |
| CDK Global, Inc. | 756 | 32,901 |
| Citrix Systems, Inc. | 1,653 | 156,589 |
| Cloudflare, Inc., Class A * | 9,206 | 1,792,592 |
| Coupa Software, Inc. * | 2,769 | 630,501 |
| Crowdstrike Holdings, Inc., Class A * | 7,448 | 2,098,846 |
| Datadog, Inc., Class A * | 8,775 | 1,465,864 |
| DocuSign, Inc. * | 7,208 | 2,005,914 |
| DoubleVerify Holdings, Inc. * | 605 | 23,916 |
| Dropbox, Inc., Class A * | 11,483 | 350,117 |
| Duck Creek Technologies, Inc. * | 564 | 17,766 |
| Dynatrace, Inc. * | 6,988 | 524,100 |
| Elastic N.V. * | 2,628 | 455,984 |
| EPAM Systems, Inc. * | 2,033 | 1,368,697 |
| Euronet Worldwide, Inc. * | 1,361 | 152,691 |
| Everbridge, Inc. * | 1,455 | 231,796 |
| Fair Isaac Corp. * | 1,041 | 414,526 |
| Fiserv, Inc. * | 1,535 | 151,182 |
| Five9, Inc. * | 2,525 | 398,975 |
| FleetCor Technologies, Inc. * | 700 | 173,187 |
| Fortinet, Inc. * | 5,060 | 1,701,880 |
| Gartner, Inc. * | 3,074 | 1,020,291 |
| Genpact Ltd. | 366 | 18,062 |
| Globant S.A. * | 1,527 | 487,403 |
| GoDaddy, Inc., Class A * | 651 | 45,030 |
| HubSpot, Inc. * | 1,684 | 1,364,427 |
| Intuit, Inc. | 9,654 | 6,043,307 |
| Jack Henry & Associates, Inc. | 732 | 121,863 |
| Jamf Holding Corp. * | 1,702 | 81,100 |
| Mandiant, Inc. * | 2,546 | 44,402 |
| Manhattan Associates, Inc. * | 1,275 | 231,464 |
| Mastercard, Inc., Class A | 33,100 | 11,105,712 |
| McAfee Corp., Class A | 1,922 | 41,073 |
| Microsoft Corp. | 285,059 | 94,531,266 |
| MongoDB, Inc. * | 2,341 | 1,220,340 |
| nCino, Inc. * | 2,135 | 155,129 |
| NCR Corp. * | 1,622 | 64,134 |
| New Relic, Inc. * | 1,967 | 159,642 |
| NortonLifeLock, Inc. | 5,522 | 140,535 |
| Nuance Communications, Inc. * | 4,106 | 226,035 |
| Nutanix, Inc., Class A * | 7,272 | 249,502 |
| Okta, Inc. * | 4,693 | 1,160,016 |
| Oracle Corp. | 59,423 | 5,701,043 |
| Palantir Technologies, Inc., Class A * | 61,389 | 1,588,747 |
| Palo Alto Networks, Inc. * | 3,601 | 1,833,233 |
| Paychex, Inc. | 10,616 | 1,308,740 |
| Paycom Software, Inc. * | 1,916 | 1,049,681 |
| Paycor HCM, Inc. * | 879 | 28,515 |
115
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Paylocity Holding Corp. * | 1,418 | 432,689 |
| PayPal Holdings, Inc. * | 44,450 | 10,338,625 |
| Pegasystems, Inc. | 1,459 | 173,212 |
| Procore Technologies, Inc. * | 269 | 24,600 |
| PTC, Inc. * | 3,982 | 507,108 |
| RingCentral, Inc., Class A * | 3,039 | 740,847 |
| Sabre Corp. * | 12,035 | 124,923 |
| salesforce.com, Inc. * | 6,713 | 2,011,819 |
| ServiceNow, Inc. * | 7,455 | 5,201,801 |
| Shift4 Payments, Inc., Class A * | 1,629 | 102,839 |
| Smartsheet, Inc., Class A * | 4,523 | 312,132 |
| Snowflake, Inc., Class A * | 6,960 | 2,462,726 |
| Splunk, Inc. * | 6,197 | 1,021,390 |
| Square, Inc., Class A * | 14,974 | 3,810,883 |
| StoneCo Ltd., Class A * | 7,770 | 263,092 |
| Switch, Inc., Class A | 4,343 | 109,791 |
| Synopsys, Inc. * | 3,635 | 1,211,109 |
| Teradata Corp. * | 3,513 | 198,695 |
| The Trade Desk, Inc., Class A * | 16,189 | 1,212,718 |
| The Western Union Co. | 3,854 | 70,220 |
| Twilio, Inc., Class A * | 1,771 | 515,999 |
| Tyler Technologies, Inc. * | 1,317 | 715,421 |
| Unity Software, Inc. * | 5,623 | 850,816 |
| Visa, Inc., Class A | 64,034 | 13,560,480 |
| VMware, Inc., Class A *(a) | 1,134 | 172,028 |
| WEX, Inc. * | 1,137 | 170,209 |
| Wix.com Ltd. * | 2,007 | 373,222 |
| Workday, Inc., Class A * | 7,099 | 2,058,568 |
| Zendesk, Inc. * | 4,486 | 456,675 |
| Zoom Video Communications, Inc., Class A * | 8,072 | 2,216,975 |
| Zscaler, Inc. * | 2,923 | 932,028 |
| 229,245,833 | ||
| Technology Hardware & Equipment 11.0% | ||
| Amphenol Corp., Class A | 15,698 | 1,205,135 |
| Apple Inc. | 593,848 | 88,958,430 |
| Arista Networks, Inc. * | 2,032 | 832,490 |
| CDW Corp. | 5,190 | 968,714 |
| Cognex Corp. | 6,451 | 565,043 |
| Coherent, Inc. * | 832 | 211,661 |
| CommScope Holding Co., Inc. * | 7,472 | 80,025 |
| Corning, Inc. | 9,715 | 345,563 |
| Dell Technologies, Inc., Class C * | 4,990 | 548,850 |
| HP, Inc. | 15,791 | 478,941 |
| IPG Photonics Corp. * | 98 | 15,583 |
| Jabil, Inc. | 4,248 | 254,710 |
| Keysight Technologies, Inc. * | 3,077 | 553,922 |
| NetApp, Inc. | 5,561 | 496,597 |
| Pure Storage, Inc., Class A * | 9,475 | 254,499 |
| Ubiquiti, Inc. | 219 | 66,911 |
| Vontier Corp. | 3,424 | 115,834 |
| Zebra Technologies Corp., Class A * | 2,012 | 1,074,307 |
| 97,027,215 | ||
| Transportation 2.0% | ||
| C.H. Robinson Worldwide, Inc. | 988 | 95,826 |
| Delta Air Lines, Inc. * | 24,125 | 944,011 |
| Expeditors International of Washington, Inc. | 4,637 | 571,557 |
| FedEx Corp. | 4,028 | 948,715 |
| GXO Logistics, Inc. * | 3,144 | 279,187 |
| JB Hunt Transport Services, Inc. | 2,819 | 555,879 |
| Kansas City Southern | 910 | 282,327 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Landstar System, Inc. | 1,284 | 225,740 |
| Lyft, Inc., Class A * | 10,762 | 493,653 |
| Old Dominion Freight Line, Inc. | 3,558 | 1,214,523 |
| TuSimple Holdings, Inc., Class A * | 147 | 5,751 |
| Uber Technologies, Inc. * | 52,239 | 2,289,113 |
| Union Pacific Corp. | 15,594 | 3,764,392 |
| United Parcel Service, Inc., Class B | 27,379 | 5,844,595 |
| XPO Logistics, Inc. * | 3,138 | 269,240 |
| 17,784,509 | ||
| Utilities 0.0% | ||
| Brookfield Renewable Corp., Class A | 1,242 | 51,431 |
| NRG Energy, Inc. | 4,196 | 167,379 |
| 218,810 | ||
| Total Common Stocks (Cost $538,172,676) | 876,654,579 | |
| INVESTMENT COMPANIES 0.1% OF NET ASSETS | ||
| Equity Funds 0.1% | ||
| iShares Russell 1000 Growth ETF | 3,000 | 894,000 |
| Total Investment Companies (Cost $849,313) | 894,000 | |
| SHORT-TERM INVESTMENTS 0.7% OF NET ASSETS | ||
| Money Market Funds 0.7% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (b) | 6,118,353 | 6,118,353 |
| Wells Fargo Government Money Market Fund, Select Class 0.03% (b)(c) | 550,140 | 550,140 |
| 6,668,493 | ||
| Total Short-Term Investments (Cost $6,668,493) | 6,668,493 | |
| Total Investments in Securities (Cost $545,690,482) | 884,217,072 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| Russell 1000 Growth Index, e-mini, expires 12/17/21 | 18 | 2,695,680 | 18,544 |
| S&P 500 Index, e-mini, expires 12/17/21 | 1 | 229,850 | 8,685 |
| Net Unrealized Appreciation | 27,229 | ||
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $531,933. |
| (b) | The rate shown is the 7-day yield. |
| (c) | Security purchased with cash collateral received for securities on loan. |
| ETF — | Exchange traded fund |
116
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See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $876,654,579 | $— | $— | $876,654,579 |
| Investment Companies1 | 894,000 | — | — | 894,000 |
| Short-Term Investments1 | 6,668,493 | — | — | 6,668,493 |
| Futures Contracts2 | 27,229 | — | — | 27,229 |
| Total | $884,244,301 | $— | $— | $884,244,301 |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at 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 underlying mutual funds and ETFs, which could be Level 1, Level 2 or Level 3.
117
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See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $545,690,482) including securities on loan of $531,933 | $884,217,072 | |
| Cash | 74,596 | |
| Deposit with broker for futures contracts | 299,500 | |
| Receivables: | ||
| Fund shares sold | 1,443,868 | |
| Dividends | 304,548 | |
| Variation margin on future contracts | 32,289 | |
| Income from securities on loan | + | 1,212 |
| Total assets | 886,373,085 | |
| Liabilities | ||
| Collateral held for securities on loan | 550,140 | |
| Payables: | ||
| Investments bought | 2,962,222 | |
| Fund shares redeemed | 1,676,722 | |
| Investment adviser fees | + | 24,792 |
| Total liabilities | 5,213,876 | |
| Net assets | $881,159,209 | |
| Net Assets by Source | ||
| Capital received from investors | $537,206,569 | |
| Total distributable earnings | + | 343,952,640 |
| Net assets | $881,159,209 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $881,159,209 | 9,875,471 | $89.23 | ||
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Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $318) | $5,260,336 | |
| Securities on loan, net | + | 10,703 |
| Total investment income | 5,271,039 | |
| Expenses | ||
| Investment adviser fees | + | 241,082 |
| Total expenses | – | 241,082 |
| Net investment income | 5,029,957 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 15,153,174 | |
| Net realized gains on futures contracts | + | 1,139,724 |
| Net realized gains | 16,292,898 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 214,436,537 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 90,764 |
| Net change in unrealized appreciation (depreciation) | + | 214,527,301 |
| Net realized and unrealized gains | 230,820,199 | |
| Increase in net assets resulting from operations | $235,850,156 | |
119
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Growth Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $5,029,957 | $3,272,535 | |
| Net realized gains (losses) | 16,292,898 | (10,491,785) | |
| Net change in unrealized appreciation (depreciation) | + | 214,527,301 | 98,464,618 |
| Increase in net assets from operations | $235,850,156 | $91,245,368 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($3,820,481) | ($1,890,344) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 4,598,477 | $352,197,876 | 8,242,661 | $434,758,920 | |
| Shares reinvested | 45,814 | 3,263,376 | 30,207 | 1,571,983 | |
| Shares redeemed | + | (2,532,061) | (193,536,712) | (3,889,701) | (204,300,295) |
| Net transactions in fund shares | 2,112,230 | $161,924,540 | 4,383,167 | $232,030,608 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 7,763,241 | $487,204,994 | 3,380,074 | $165,819,362 | |
| Total increase | + | 2,112,230 | 393,954,215 | 4,383,167 | 321,385,632 |
| End of period | 9,875,471 | $881,159,209 | 7,763,241 | $487,204,994 | |
120
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 12/20/17 1– 10/31/18 | |||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $38.09 | $43.06 | $39.51 | $40.00 | ||
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)2 | 0.97 | 1.00 | 1.13 | 0.82 | ||
| Net realized and unrealized gains (losses) | 15.47 | (4.07) | 3.10 | (1.31) | ||
| Total from investment operations | 16.44 | (3.07) | 4.23 | (0.49) | ||
| Less distributions: | ||||||
| Distributions from net investment income | (0.88) | (1.06) | (0.62) | — | ||
| Distributions from net realized gains | — | (0.84) | (0.06) | — | ||
| Total distributions | (0.88) | (1.90) | (0.68) | — | ||
| Net asset value at end of period | $53.65 | $38.09 | $43.06 | $39.51 | ||
| Total return | 43.70% | (7.69%) | 11.08% | (1.23%) 3 | ||
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.035% | 0.035% | 0.035% 4 | 0.040% 5,6 | ||
| Net operating expenses | N/A | N/A | N/A | 0.02% 5,6 | ||
| Net investment income (loss) | 1.97% | 2.57% | 2.79% | 2.36% 5 | ||
| Portfolio turnover rate | 20% | 50% | 22% | 22% 3 | ||
| Net assets, end of period (x 1,000,000) | $576 | $331 | $212 | $70 | ||
| 1 | Commencement of operations. |
| 2 | Calculated based on the average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Effective December 20, 2018, the annual operating expense ratio was reduced to 0.035%. The ratio presented for period ended 10/31/19 is a blended ratio. |
| 5 | Annualized. |
| 6 | The investment adviser voluntarily agreed to waive the fund’s management fees to 0.00% beginning with the fund’s commencement of operations through June 30, 2018. The ratio presented for period ended 10/31/18 is a blended ratio. |
121
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.3% OF NET ASSETS | ||
| Automobiles & Components 1.0% | ||
| Aptiv plc * | 6,078 | 1,050,825 |
| BorgWarner, Inc. | 6,612 | 298,003 |
| Ford Motor Co. * | 107,915 | 1,843,188 |
| General Motors Co. * | 37,916 | 2,063,768 |
| Gentex Corp. | 6,573 | 232,618 |
| Harley-Davidson, Inc. | 4,206 | 153,477 |
| Lear Corp. | 1,656 | 284,584 |
| QuantumScape Corp. * | 1,601 | 46,333 |
| Thor Industries, Inc. | 861 | 87,788 |
| 6,060,584 | ||
| Banks 8.9% | ||
| Bank of America Corp. | 204,223 | 9,757,775 |
| Bank of Hawaii Corp. | 1,109 | 93,711 |
| Bank OZK | 3,415 | 152,548 |
| BOK Financial Corp. | 836 | 84,578 |
| Citigroup, Inc. | 55,885 | 3,865,007 |
| Citizens Financial Group, Inc. | 9,643 | 456,885 |
| Comerica, Inc. | 3,670 | 312,280 |
| Commerce Bancshares, Inc. | 2,926 | 206,312 |
| Cullen/Frost Bankers, Inc. | 1,582 | 204,869 |
| East West Bancorp, Inc. | 3,896 | 309,654 |
| F.N.B. Corp. | 8,651 | 100,784 |
| Fifth Third Bancorp | 18,977 | 826,069 |
| First Citizens BancShares, Inc., Class A | 166 | 135,107 |
| First Hawaiian, Inc. | 3,619 | 99,848 |
| First Horizon Corp. | 15,004 | 254,618 |
| First Republic Bank | 4,907 | 1,061,531 |
| Huntington Bancshares, Inc. | 40,410 | 636,053 |
| JPMorgan Chase & Co. | 81,877 | 13,910,084 |
| KeyCorp | 26,280 | 611,536 |
| M&T Bank Corp. | 3,536 | 520,216 |
| MGIC Investment Corp. | 9,390 | 151,742 |
| New York Community Bancorp, Inc. | 12,427 | 154,468 |
| PacWest Bancorp | 3,178 | 150,860 |
| People's United Financial, Inc. | 11,650 | 199,681 |
| Pinnacle Financial Partners, Inc. | 2,062 | 199,127 |
| Popular, Inc. | 2,184 | 177,865 |
| Prosperity Bancshares, Inc. | 2,450 | 184,510 |
| Regions Financial Corp. | 26,509 | 627,733 |
| Signature Bank | 1,634 | 486,638 |
| Sterling Bancorp | 4,805 | 122,287 |
| SVB Financial Group * | 1,560 | 1,119,144 |
| Synovus Financial Corp. | 3,698 | 172,290 |
| TFS Financial Corp. | 1,335 | 25,979 |
| The PNC Financial Services Group, Inc. | 11,699 | 2,468,840 |
| Truist Financial Corp. | 37,043 | 2,351,119 |
| U.S. Bancorp | 37,012 | 2,234,415 |
| Umpqua Holdings Corp. | 6,048 | 123,682 |
| UWM Holdings Corp. | 1,322 | 8,990 |
| Webster Financial Corp. | 2,466 | 137,997 |
| Wells Fargo & Co. | 114,086 | 5,836,640 |
| Western Alliance Bancorp | 1,321 | 153,355 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Wintrust Financial Corp. | 1,570 | 138,945 |
| Zions Bancorp NA | 4,381 | 275,959 |
| 51,101,731 | ||
| Capital Goods 8.4% | ||
| 3M Co. | 13,621 | 2,433,800 |
| A.O. Smith Corp. | 3,636 | 265,683 |
| Acuity Brands, Inc. | 972 | 199,678 |
| AECOM * | 3,745 | 256,046 |
| AGCO Corp. | 1,559 | 190,525 |
| Air Lease Corp. | 2,943 | 117,867 |
| Allegion plc | 589 | 75,569 |
| Allison Transmission Holdings, Inc. | 697 | 23,252 |
| AMETEK, Inc. | 6,352 | 841,005 |
| Armstrong World Industries, Inc. | 680 | 71,842 |
| Builders FirstSource, Inc. * | 5,662 | 329,925 |
| BWX Technologies, Inc. | 623 | 35,349 |
| Carlisle Cos., Inc. | 868 | 193,495 |
| Carrier Global Corp. | 12,757 | 666,298 |
| Caterpillar, Inc. | 2,087 | 425,769 |
| ChargePoint Holdings, Inc. * | 2,856 | 70,772 |
| Colfax Corp. * | 3,230 | 166,733 |
| Core & Main, Inc., Class A * | 461 | 12,613 |
| Crane Co. | 1,354 | 139,841 |
| Cummins, Inc. | 3,956 | 948,807 |
| Curtiss-Wright Corp. | 1,127 | 143,895 |
| Donaldson Co., Inc. | 3,069 | 184,171 |
| Dover Corp. | 3,954 | 668,542 |
| Eaton Corp. plc | 10,976 | 1,808,406 |
| Emerson Electric Co. | 16,450 | 1,595,814 |
| Fastenal Co. | 1,770 | 101,032 |
| Flowserve Corp. | 3,561 | 119,721 |
| Fortive Corp. | 9,002 | 681,541 |
| Fortune Brands Home & Security, Inc. | 2,825 | 286,455 |
| Gates Industrial Corp. plc * | 2,560 | 42,086 |
| General Dynamics Corp. | 6,855 | 1,389,851 |
| General Electric Co. | 30,121 | 3,158,789 |
| Graco, Inc. | 1,761 | 132,392 |
| HEICO Corp. | 838 | 116,809 |
| HEICO Corp., Class A | 1,473 | 185,127 |
| Hexcel Corp. * | 2,315 | 131,353 |
| Honeywell International, Inc. | 15,026 | 3,284,984 |
| Howmet Aerospace, Inc. | 9,823 | 291,645 |
| Hubbell, Inc. | 1,494 | 297,859 |
| Huntington Ingalls Industries, Inc. | 1,087 | 220,368 |
| IDEX Corp. | 2,093 | 465,839 |
| Illinois Tool Works, Inc. | 893 | 203,488 |
| Ingersoll Rand, Inc. * | 11,179 | 600,983 |
| ITT, Inc. | 2,379 | 223,793 |
| Johnson Controls International plc | 19,741 | 1,448,397 |
| L3Harris Technologies, Inc. | 5,522 | 1,273,042 |
| Lennox International, Inc. | 919 | 275,038 |
| Lockheed Martin Corp. | 862 | 286,460 |
| Masco Corp. | 6,796 | 445,478 |
| MasTec, Inc. * | 1,553 | 138,419 |
| Mercury Systems, Inc. * | 1,525 | 78,598 |
| MSC Industrial Direct Co., Inc., Class A | 1,224 | 102,902 |
122
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Nordson Corp. | 1,326 | 337,082 |
| Northrop Grumman Corp. | 3,798 | 1,356,722 |
| nVent Electric plc | 4,591 | 162,751 |
| Oshkosh Corp. | 1,869 | 199,983 |
| Otis Worldwide Corp. | 11,843 | 951,111 |
| Owens Corning | 2,823 | 263,696 |
| PACCAR, Inc. | 9,392 | 841,711 |
| Parker-Hannifin Corp. | 2,958 | 877,313 |
| Pentair plc | 4,574 | 338,339 |
| Quanta Services, Inc. | 3,815 | 462,683 |
| Raytheon Technologies Corp. | 41,785 | 3,713,015 |
| Regal Rexnord Corp. | 1,476 | 224,839 |
| Rockwell Automation, Inc. | 1,259 | 402,125 |
| Roper Technologies, Inc. | 2,891 | 1,410,432 |
| Sensata Technologies Holding plc * | 4,304 | 237,150 |
| Shoals Technologies Group, Inc., Class A * | 2,787 | 86,369 |
| SiteOne Landscape Supply, Inc. * | 588 | 138,156 |
| Snap-on, Inc. | 1,471 | 298,951 |
| Spirit AeroSystems Holdings, Inc., Class A | 2,045 | 84,438 |
| Stanley Black & Decker, Inc. | 4,449 | 799,619 |
| Sunrun, Inc. * | 5,474 | 315,740 |
| Textron, Inc. | 6,224 | 459,642 |
| The AZEK Co., Inc. * | 1,392 | 51,072 |
| The Boeing Co. * | 14,771 | 3,058,040 |
| The Middleby Corp. * | 1,053 | 192,109 |
| The Timken Co. | 1,757 | 124,659 |
| The Toro Co. | 153 | 14,607 |
| Trane Technologies plc | 3,378 | 611,182 |
| TransDigm Group, Inc. * | 1,015 | 633,177 |
| United Rentals, Inc. * | 1,303 | 493,980 |
| Univar Solutions, Inc. * | 4,577 | 117,080 |
| Valmont Industries, Inc. | 576 | 137,641 |
| Virgin Galactic Holdings, Inc. * | 404 | 7,575 |
| W.W. Grainger, Inc. | 215 | 99,569 |
| Watsco, Inc. | 896 | 259,464 |
| Westinghouse Air Brake Technologies Corp. | 5,000 | 453,650 |
| Woodward, Inc. | 1,569 | 177,219 |
| Xylem, Inc. | 1,685 | 220,044 |
| 48,461,081 | ||
| Commercial & Professional Services 1.3% | ||
| ADT, Inc. | 4,263 | 35,596 |
| CACI International, Inc., Class A * | 638 | 183,514 |
| Cintas Corp. | 149 | 64,532 |
| Clarivate plc * | 11,938 | 279,946 |
| Clean Harbors, Inc. * | 1,397 | 157,218 |
| CoStar Group, Inc. * | 2,422 | 208,413 |
| Driven Brands Holdings, Inc. * | 1,463 | 47,504 |
| Dun & Bradstreet Holdings, Inc. * | 4,403 | 82,953 |
| Equifax, Inc. | 2,064 | 572,616 |
| FTI Consulting, Inc. * | 930 | 133,846 |
| IHS Markit Ltd. | 10,288 | 1,344,847 |
| Jacobs Engineering Group, Inc. | 3,563 | 500,316 |
| LegalZoom.com, Inc. * | 208 | 5,832 |
| Leidos Holdings, Inc. | 3,891 | 389,022 |
| ManpowerGroup, Inc. | 1,491 | 144,105 |
| MSA Safety, Inc. | 729 | 111,559 |
| Nielsen Holdings plc | 9,863 | 199,726 |
| Republic Services, Inc. | 5,789 | 779,199 |
| Robert Half International, Inc. | 359 | 40,592 |
| Rollins, Inc. | 423 | 14,902 |
| Science Applications International Corp. | 1,602 | 143,828 |
| Stericycle, Inc. * | 2,505 | 167,635 |
| TransUnion | 1,681 | 193,802 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Verisk Analytics, Inc. | 1,588 | 333,909 |
| Waste Management, Inc. | 9,786 | 1,568,011 |
| 7,703,423 | ||
| Consumer Durables & Apparel 1.0% | ||
| Brunswick Corp. | 1,856 | 172,775 |
| Capri Holdings Ltd. * | 4,081 | 217,272 |
| Carter's, Inc. | 1,173 | 115,564 |
| Columbia Sportswear Co. | 1,022 | 106,124 |
| D.R. Horton, Inc. | 5,392 | 481,344 |
| Deckers Outdoor Corp. * | 650 | 256,952 |
| Garmin Ltd. | 4,173 | 599,243 |
| Hanesbrands, Inc. | 3,855 | 65,689 |
| Hasbro, Inc. | 3,530 | 338,033 |
| Hayward Holdings, Inc. * | 1,016 | 23,561 |
| Leggett & Platt, Inc. | 3,641 | 170,581 |
| Lennar Corp., Class A | 7,485 | 747,976 |
| Lennar Corp., Class B | 421 | 34,556 |
| Mohawk Industries, Inc. * | 1,561 | 276,625 |
| Newell Brands, Inc. | 10,449 | 239,178 |
| NVR, Inc. * | 30 | 146,844 |
| Polaris, Inc. | 490 | 56,326 |
| PulteGroup, Inc. | 5,030 | 241,842 |
| PVH Corp. * | 1,967 | 215,052 |
| Ralph Lauren Corp. | 1,300 | 165,321 |
| Skechers U.S.A., Inc., Class A * | 3,224 | 148,981 |
| Tapestry, Inc. | 6,884 | 268,338 |
| Toll Brothers, Inc. | 1,825 | 109,810 |
| TopBuild Corp. * | 151 | 38,802 |
| Under Armour, Inc., Class A * | 5,210 | 114,412 |
| Under Armour, Inc., Class C * | 5,366 | 101,310 |
| VF Corp. | 3,198 | 233,070 |
| Whirlpool Corp. | 1,693 | 356,935 |
| 6,042,516 | ||
| Consumer Services 1.8% | ||
| Aramark | 6,297 | 229,715 |
| Boyd Gaming Corp. * | 1,762 | 112,380 |
| Bright Horizons Family Solutions, Inc. * | 344 | 57,104 |
| Caesars Entertainment, Inc. * | 2,133 | 233,478 |
| Carnival Corp. * | 23,493 | 520,605 |
| Chegg, Inc. * | 921 | 54,744 |
| Darden Restaurants, Inc. | 1,148 | 165,473 |
| Domino’s Pizza, Inc. | 326 | 159,404 |
| Frontdoor, Inc. * | 721 | 26,879 |
| Grand Canyon Education, Inc. * | 1,218 | 97,075 |
| H&R Block, Inc. | 942 | 21,732 |
| Hilton Worldwide Holdings, Inc. * | 2,494 | 359,011 |
| Hyatt Hotels Corp., Class A * | 1,307 | 111,356 |
| Marriott Vacations Worldwide Corp. | 1,141 | 179,388 |
| McDonald’s Corp. | 16,929 | 4,156,916 |
| MGM Resorts International | 11,053 | 521,259 |
| Mister Car Wash, Inc. * | 231 | 4,236 |
| Norwegian Cruise Line Holdings Ltd. * | 10,121 | 260,312 |
| Penn National Gaming, Inc. * | 4,258 | 304,873 |
| Planet Fitness, Inc., Class A * | 724 | 57,594 |
| Royal Caribbean Cruises Ltd. * | 6,046 | 510,464 |
| Service Corp. International | 4,486 | 307,246 |
| Six Flags Entertainment Corp. * | 1,328 | 54,621 |
| Terminix Global Holdings, Inc. * | 3,464 | 140,223 |
| Travel & Leisure Co. | 755 | 41,027 |
| Wyndham Hotels & Resorts, Inc. | 938 | 79,233 |
| Yum China Holdings, Inc. | 10,692 | 610,299 |
| Yum! Brands, Inc. | 7,521 | 939,674 |
| 10,316,321 | ||
123
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Schwab U.S. Large-Cap Value Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Diversified Financials 8.9% | ||
| Affiliated Managers Group, Inc. | 1,138 | 191,047 |
| AGNC Investment Corp. | 14,438 | 229,853 |
| Ally Financial, Inc. | 9,925 | 473,819 |
| American Express Co. | 6,470 | 1,124,357 |
| Ameriprise Financial, Inc. | 1,386 | 418,752 |
| Annaly Capital Management, Inc. | 38,649 | 326,971 |
| Ares Management Corp., Class A | 444 | 37,625 |
| Berkshire Hathaway, Inc., Class B * | 51,199 | 14,694,625 |
| BlackRock, Inc. | 3,942 | 3,719,119 |
| Capital One Financial Corp. | 12,210 | 1,844,076 |
| Cboe Global Markets, Inc. | 2,937 | 387,508 |
| CME Group, Inc. | 9,885 | 2,180,137 |
| Credit Acceptance Corp. * | 224 | 133,999 |
| Discover Financial Services | 3,711 | 420,530 |
| Equitable Holdings, Inc. | 10,134 | 339,489 |
| Evercore, Inc., Class A | 1,070 | 162,469 |
| FactSet Research Systems, Inc. | 147 | 65,252 |
| Franklin Resources, Inc. | 7,949 | 250,314 |
| Interactive Brokers Group, Inc., Class A | 2,216 | 157,004 |
| Intercontinental Exchange, Inc. | 15,330 | 2,122,592 |
| Invesco Ltd. | 9,208 | 233,975 |
| Janus Henderson Group plc | 4,734 | 220,131 |
| Jefferies Financial Group, Inc. | 6,033 | 259,419 |
| KKR & Co., Inc. | 15,331 | 1,221,421 |
| Lazard Ltd., Class A | 2,755 | 134,967 |
| Moody's Corp. | 231 | 93,359 |
| Morgan Stanley | 37,549 | 3,859,286 |
| Morningstar, Inc. | 59 | 18,688 |
| MSCI, Inc. | 643 | 427,518 |
| Nasdaq, Inc. | 3,205 | 672,633 |
| New Residential Investment Corp. | 12,019 | 136,536 |
| Northern Trust Corp. | 5,660 | 696,406 |
| OneMain Holdings, Inc. | 2,844 | 150,192 |
| Raymond James Financial, Inc. | 4,833 | 476,485 |
| S&P Global, Inc. | 1,938 | 918,922 |
| Santander Consumer USA Holdings, Inc. | 1,664 | 69,389 |
| SEI Investments Co. | 2,999 | 189,057 |
| SLM Corp. | 8,429 | 154,672 |
| Starwood Property Trust, Inc. | 7,611 | 193,852 |
| State Street Corp. | 10,061 | 991,512 |
| Stifel Financial Corp. | 2,794 | 203,599 |
| Synchrony Financial | 12,737 | 591,634 |
| T. Rowe Price Group, Inc. | 4,154 | 900,919 |
| The Bank of New York Mellon Corp. | 21,798 | 1,290,442 |
| The Carlyle Group, Inc. | 4,477 | 251,384 |
| The Charles Schwab Corp. (a) | 41,418 | 3,397,519 |
| The Goldman Sachs Group, Inc. | 8,600 | 3,554,810 |
| Tradeweb Markets, Inc., Class A | 2,885 | 257,053 |
| Virtu Financial, Inc., Class A | 2,480 | 61,702 |
| Voya Financial, Inc. | 3,104 | 216,566 |
| 51,123,586 | ||
| Energy 5.3% | ||
| Antero Midstream Corp. | 9,151 | 97,367 |
| APA Corp. | 10,409 | 272,820 |
| Baker Hughes Co. | 20,335 | 510,002 |
| Chevron Corp. | 53,349 | 6,107,927 |
| ConocoPhillips | 37,226 | 2,772,965 |
| Continental Resources, Inc. | 1,613 | 78,730 |
| Coterra Energy, Inc. | 18,435 | 393,034 |
| Devon Energy Corp. | 18,578 | 744,606 |
| Diamondback Energy, Inc. | 2,618 | 280,623 |
| DTE Midstream LLC * | 2,634 | 126,327 |
| EOG Resources, Inc. | 14,165 | 1,309,696 |
| EQT Corp. * | 8,382 | 166,886 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Exxon Mobil Corp. | 116,790 | 7,529,451 |
| Halliburton Co. | 23,132 | 578,069 |
| Hess Corp. | 7,124 | 588,229 |
| HollyFrontier Corp. | 4,155 | 140,439 |
| Kinder Morgan, Inc. | 53,624 | 898,202 |
| Marathon Oil Corp. | 21,648 | 353,295 |
| Marathon Petroleum Corp. | 17,567 | 1,158,192 |
| NOV, Inc. * | 10,681 | 149,748 |
| Occidental Petroleum Corp. | 20,339 | 681,967 |
| ONEOK, Inc. | 12,223 | 777,627 |
| Phillips 66 | 12,068 | 902,445 |
| Pioneer Natural Resources Co. | 3,295 | 616,099 |
| Schlumberger N.V. | 38,574 | 1,244,397 |
| Targa Resources Corp. | 6,220 | 340,047 |
| The Williams Cos., Inc. | 33,485 | 940,594 |
| Valero Energy Corp. | 11,253 | 870,194 |
| 30,629,978 | ||
| Food & Staples Retailing 1.5% | ||
| Albertsons Cos., Inc., Class A | 4,316 | 133,580 |
| Casey's General Stores, Inc. | 1,023 | 195,945 |
| Costco Wholesale Corp. | 790 | 388,317 |
| Grocery Outlet Holding Corp. * | 2,450 | 54,366 |
| The Kroger Co. | 20,607 | 824,692 |
| U.S. Foods Holding Corp. * | 6,064 | 210,239 |
| Walgreens Boots Alliance, Inc. | 19,779 | 930,009 |
| Walmart, Inc. | 39,558 | 5,910,756 |
| 8,647,904 | ||
| Food, Beverage & Tobacco 3.4% | ||
| Altria Group, Inc. | 22,682 | 1,000,503 |
| Archer-Daniels-Midland Co. | 15,350 | 986,084 |
| Beyond Meat, Inc. * | 188 | 18,608 |
| Brown-Forman Corp., Class A | 610 | 39,058 |
| Brown-Forman Corp., Class B | 2,546 | 172,848 |
| Bunge Ltd. | 3,776 | 349,809 |
| Campbell Soup Co. | 5,384 | 215,091 |
| Conagra Brands, Inc. | 12,919 | 415,992 |
| Constellation Brands, Inc., Class A | 4,407 | 955,482 |
| Darling Ingredients, Inc. * | 4,219 | 356,590 |
| Flowers Foods, Inc. | 5,203 | 128,774 |
| General Mills, Inc. | 16,830 | 1,040,094 |
| Hormel Foods Corp. | 7,800 | 330,096 |
| Ingredion, Inc. | 1,842 | 175,414 |
| Kellogg Co. | 3,847 | 235,821 |
| Keurig Dr Pepper, Inc. | 19,266 | 695,310 |
| Lamb Weston Holdings, Inc. | 2,809 | 158,568 |
| McCormick & Co., Inc. - Non Voting Shares | 6,880 | 551,982 |
| Molson Coors Beverage Co., Class B | 4,888 | 215,512 |
| Mondelez International, Inc., Class A | 38,452 | 2,335,574 |
| Monster Beverage Corp. * | 741 | 62,985 |
| PepsiCo, Inc. | 6,471 | 1,045,714 |
| Philip Morris International, Inc. | 42,948 | 4,060,304 |
| Pilgrim's Pride Corp. * | 743 | 20,923 |
| Post Holdings, Inc. * | 1,618 | 164,195 |
| Seaboard Corp. | 7 | 26,950 |
| The Coca-Cola Co. | 31,468 | 1,773,851 |
| The Hain Celestial Group, Inc. * | 2,279 | 102,259 |
| The Hershey Co. | 565 | 99,073 |
| The JM Smucker Co. | 2,900 | 356,294 |
| The Kraft Heinz Co. | 18,295 | 656,607 |
| Tyson Foods, Inc., Class A | 7,914 | 632,882 |
| 19,379,247 | ||
124
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Health Care Equipment & Services 8.8% | ||
| Abbott Laboratories | 23,951 | 3,087,044 |
| Acadia Healthcare Co., Inc. * | 2,448 | 151,776 |
| agilon health, Inc. * | 82 | 2,009 |
| Amedisys, Inc. * | 99 | 16,765 |
| AmerisourceBergen Corp. | 4,094 | 499,550 |
| Anthem, Inc. | 6,755 | 2,939,303 |
| Baxter International, Inc. | 13,858 | 1,094,228 |
| Becton, Dickinson & Co. | 7,869 | 1,885,334 |
| Boston Scientific Corp. * | 39,119 | 1,687,202 |
| Cardinal Health, Inc. | 3,252 | 155,478 |
| Centene Corp. * | 15,950 | 1,136,278 |
| Cerner Corp. | 8,148 | 605,315 |
| Certara, Inc. * | 974 | 40,236 |
| Change Healthcare, Inc. * | 6,937 | 149,354 |
| Chemed Corp. | 311 | 149,980 |
| Cigna Corp. | 9,210 | 1,967,348 |
| CVS Health Corp. | 36,300 | 3,240,864 |
| Danaher Corp. | 16,577 | 5,168,211 |
| DaVita, Inc. * | 577 | 59,569 |
| Dentsply Sirona, Inc. | 6,002 | 343,374 |
| Encompass Health Corp. | 1,142 | 72,586 |
| Envista Holdings Corp. * | 4,460 | 174,386 |
| Figs, Inc., Class A * | 770 | 25,880 |
| Globus Medical, Inc., Class A * | 2,016 | 155,575 |
| Henry Schein, Inc. * | 3,884 | 296,543 |
| Hill-Rom Holdings, Inc. | 1,823 | 282,383 |
| Hologic, Inc. * | 6,913 | 506,792 |
| Humana, Inc. | 3,556 | 1,646,997 |
| ICU Medical, Inc. * | 543 | 127,133 |
| Integra LifeSciences Holdings Corp. * | 2,005 | 133,252 |
| Laboratory Corp. of America Holdings * | 2,657 | 762,612 |
| Masimo Corp. * | 376 | 106,611 |
| McKesson Corp. | 3,658 | 760,425 |
| Medtronic plc | 37,027 | 4,438,056 |
| Molina Healthcare, Inc. * | 1,352 | 399,813 |
| Oak Street Health, Inc. * | 265 | 12,516 |
| Premier, Inc., Class A | 3,339 | 130,054 |
| Quest Diagnostics, Inc. | 3,359 | 493,034 |
| Quidel Corp. * | 1,019 | 135,293 |
| ResMed, Inc. | 392 | 103,061 |
| Signify Health, Inc., Class A * | 1,718 | 27,608 |
| STERIS plc | 2,030 | 474,492 |
| Stryker Corp. | 5,509 | 1,465,780 |
| Tandem Diabetes Care, Inc. * | 98 | 13,360 |
| Teladoc Health, Inc. * | 4,167 | 623,342 |
| Teleflex, Inc. | 1,061 | 378,713 |
| The Cooper Cos., Inc. | 1,333 | 555,754 |
| UnitedHealth Group, Inc. | 24,155 | 11,122,653 |
| Universal Health Services, Inc., Class B | 2,023 | 251,054 |
| Zimmer Biomet Holdings, Inc. | 5,754 | 823,513 |
| 50,878,489 | ||
| Household & Personal Products 2.1% | ||
| Church & Dwight Co., Inc. | 6,410 | 559,978 |
| Colgate-Palmolive Co. | 10,819 | 824,300 |
| Coty, Inc., Class A * | 9,250 | 78,440 |
| Herbalife Nutrition Ltd. * | 2,438 | 113,123 |
| Kimberly-Clark Corp. | 4,619 | 598,114 |
| Reynolds Consumer Products, Inc. | 1,443 | 38,932 |
| Spectrum Brands Holdings, Inc. | 1,157 | 108,469 |
| The Clorox Co. | 646 | 105,304 |
| The Procter & Gamble Co. | 67,145 | 9,601,064 |
| 12,027,724 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Insurance 4.0% | ||
| Aflac, Inc. | 18,250 | 979,478 |
| Alleghany Corp. * | 331 | 215,607 |
| American Financial Group, Inc. | 1,863 | 253,443 |
| American International Group, Inc. | 23,672 | 1,398,779 |
| Aon plc, Class A | 2,535 | 810,997 |
| Arch Capital Group Ltd. * | 8,021 | 335,438 |
| Arthur J. Gallagher & Co. | 5,644 | 946,329 |
| Assurant, Inc. | 1,610 | 259,709 |
| Assured Guaranty Ltd. | 1,911 | 106,213 |
| Athene Holding Ltd., Class A * | 3,182 | 276,866 |
| Axis Capital Holdings Ltd. | 2,151 | 112,003 |
| Brighthouse Financial, Inc. * | 2,253 | 113,168 |
| Brown & Brown, Inc. | 6,086 | 384,087 |
| Chubb Ltd. | 12,042 | 2,352,766 |
| Cincinnati Financial Corp. | 4,127 | 501,183 |
| CNA Financial Corp. | 797 | 35,753 |
| Erie Indemnity Co., Class A | 219 | 45,072 |
| Everest Re Group Ltd. | 847 | 221,491 |
| Fidelity National Financial, Inc. | 7,524 | 360,475 |
| First American Financial Corp. | 2,947 | 215,544 |
| Globe Life, Inc. | 2,752 | 244,983 |
| GoHealth, Inc., Class A * | 183 | 988 |
| Kemper Corp. | 1,658 | 105,250 |
| Lemonade, Inc. * | 922 | 57,312 |
| Lincoln National Corp. | 4,385 | 316,378 |
| Loews Corp. | 5,983 | 335,467 |
| Markel Corp. * | 311 | 408,383 |
| Marsh & McLennan Cos., Inc. | 12,352 | 2,060,314 |
| Mercury General Corp. | 728 | 39,669 |
| MetLife, Inc. | 19,998 | 1,255,874 |
| Old Republic International Corp. | 7,670 | 198,116 |
| Primerica, Inc. | 1,077 | 181,194 |
| Principal Financial Group, Inc. | 7,310 | 490,428 |
| Prudential Financial, Inc. | 10,642 | 1,171,152 |
| Reinsurance Group of America, Inc. | 1,872 | 221,046 |
| RenaissanceRe Holdings Ltd. | 708 | 100,394 |
| The Allstate Corp. | 8,125 | 1,004,819 |
| The Hanover Insurance Group, Inc. | 991 | 124,866 |
| The Hartford Financial Services Group, Inc. | 9,551 | 696,554 |
| The Progressive Corp. | 16,105 | 1,528,042 |
| The Travelers Cos., Inc. | 6,924 | 1,113,933 |
| Unum Group | 5,620 | 143,141 |
| W.R. Berkley Corp. | 3,791 | 301,764 |
| White Mountains Insurance Group Ltd. | 82 | 86,509 |
| Willis Towers Watson plc | 3,540 | 857,671 |
| 22,968,648 | ||
| Materials 3.7% | ||
| Air Products & Chemicals, Inc. | 6,095 | 1,827,342 |
| Albemarle Corp. | 3,204 | 802,506 |
| Alcoa Corp. | 5,147 | 236,505 |
| Amcor plc | 42,432 | 512,154 |
| AptarGroup, Inc. | 1,813 | 218,974 |
| Ardagh Metal Packaging S.A. * | 1,068 | 10,520 |
| Ashland Global Holdings, Inc. | 1,506 | 144,591 |
| Avery Dennison Corp. | 1,069 | 232,743 |
| Axalta Coating Systems Ltd. * | 4,662 | 145,408 |
| Ball Corp. | 6,233 | 570,195 |
| Berry Global Group, Inc. * | 3,714 | 243,416 |
| Celanese Corp. | 1,955 | 315,752 |
| CF Industries Holdings, Inc. | 5,893 | 334,722 |
| Cleveland-Cliffs, Inc. * | 12,491 | 301,158 |
| Corteva, Inc. | 20,340 | 877,671 |
| Crown Holdings, Inc. | 3,063 | 318,521 |
| Diversey Holdings Ltd. * | 312 | 5,429 |
125
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Dow, Inc. | 19,130 | 1,070,706 |
| DuPont de Nemours, Inc. | 14,435 | 1,004,676 |
| Eagle Materials, Inc. | 1,131 | 167,795 |
| Eastman Chemical Co. | 3,745 | 389,592 |
| Ecolab, Inc. | 842 | 187,109 |
| Element Solutions, Inc. | 6,385 | 145,003 |
| FMC Corp. | 2,643 | 240,540 |
| Freeport-McMoRan, Inc. | 28,526 | 1,076,001 |
| Graphic Packaging Holding Co. | 5,525 | 110,113 |
| Huntsman Corp. | 5,799 | 188,932 |
| International Flavors & Fragrances, Inc. | 6,863 | 1,011,949 |
| International Paper Co. | 10,778 | 535,343 |
| Louisiana-Pacific Corp. | 2,432 | 143,318 |
| LyondellBasell Industries N.V., Class A | 6,355 | 589,871 |
| Martin Marietta Materials, Inc. | 1,714 | 673,328 |
| NewMarket Corp. | 186 | 63,242 |
| Newmont Corp. | 22,102 | 1,193,508 |
| Nucor Corp. | 8,098 | 904,142 |
| Olin Corp. | 3,645 | 207,692 |
| Packaging Corp. of America | 2,588 | 355,514 |
| PPG Industries, Inc. | 3,770 | 605,349 |
| Reliance Steel & Aluminum Co. | 1,755 | 256,511 |
| Royal Gold, Inc. | 1,816 | 179,820 |
| RPM International, Inc. | 1,476 | 128,707 |
| Sealed Air Corp. | 1,895 | 112,411 |
| Silgan Holdings, Inc. | 2,287 | 91,937 |
| Sonoco Products Co. | 2,707 | 156,871 |
| Southern Copper Corp. | 196 | 11,758 |
| Steel Dynamics, Inc. | 4,324 | 285,730 |
| Sylvamo Corp. * | 970 | 27,315 |
| The Chemours Co. | 2,210 | 61,924 |
| The Mosaic Co. | 9,520 | 395,746 |
| United States Steel Corp. | 7,337 | 193,624 |
| Valvoline, Inc. | 4,954 | 168,238 |
| Vulcan Materials Co. | 3,645 | 692,987 |
| Westlake Chemical Corp. | 736 | 71,642 |
| WestRock Co. | 7,278 | 350,072 |
| 21,146,623 | ||
| Media & Entertainment 5.4% | ||
| Activision Blizzard, Inc. | 21,295 | 1,665,056 |
| Alphabet, Inc., Class A * | 1,153 | 3,413,941 |
| Alphabet, Inc., Class C * | 1,076 | 3,190,781 |
| Altice USA, Inc., Class A * | 1,705 | 27,791 |
| Cable One, Inc. | 69 | 118,073 |
| Charter Communications, Inc., Class A * | 185 | 124,855 |
| Comcast Corp., Class A | 125,778 | 6,468,763 |
| Discovery, Inc., Class A *(b) | 4,518 | 105,902 |
| Discovery, Inc., Class C * | 8,708 | 196,452 |
| DISH Network Corp., Class A * | 6,852 | 281,412 |
| Electronic Arts, Inc. | 7,816 | 1,096,194 |
| Fox Corp., Class A | 8,784 | 349,076 |
| Fox Corp., Class B | 4,184 | 154,641 |
| IAC/InterActiveCorp. * | 2,109 | 321,348 |
| Liberty Broadband Corp., Class A * | 678 | 109,002 |
| Liberty Broadband Corp., Class C * | 3,990 | 648,175 |
| Liberty Media Corp. - Liberty Formula One, Class A * | 674 | 35,149 |
| Liberty Media Corp. - Liberty Formula One, Class C * | 5,468 | 305,114 |
| Liberty Media Corp. - Liberty SiriusXM, Class A * | 2,212 | 110,113 |
| Liberty Media Corp. - Liberty SiriusXM, Class C * | 4,467 | 220,312 |
| Live Nation Entertainment, Inc. * | 2,267 | 229,307 |
| Madison Square Garden Sports Corp. * | 323 | 61,212 |
| News Corp., Class A | 10,699 | 245,007 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| News Corp., Class B | 3,380 | 76,253 |
| Nexstar Media Group, Inc., Class A | 1,037 | 155,477 |
| Omnicom Group, Inc. | 5,875 | 399,970 |
| Sirius XM Holdings, Inc. (b) | 24,797 | 151,014 |
| Take-Two Interactive Software, Inc. * | 2,550 | 461,550 |
| The Interpublic Group of Cos., Inc. | 10,820 | 395,687 |
| The New York Times Co., Class A | 4,557 | 248,767 |
| The Walt Disney Co. * | 47,522 | 8,034,545 |
| TripAdvisor, Inc. * | 1,012 | 33,366 |
| Twitter, Inc. * | 19,240 | 1,030,110 |
| ViacomCBS, Inc., Class A | 220 | 8,565 |
| ViacomCBS, Inc., Class B | 16,063 | 581,802 |
| Vimeo, Inc. * | 346 | 11,671 |
| World Wrestling Entertainment, Inc., Class A | 161 | 9,835 |
| Zynga, Inc., Class A * | 14,541 | 107,313 |
| 31,183,601 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 8.4% | ||
| Adaptive Biotechnologies Corp. * | 316 | 10,558 |
| Agilent Technologies, Inc. | 877 | 138,119 |
| Amgen, Inc. | 2,773 | 573,928 |
| Biogen, Inc. * | 4,090 | 1,090,721 |
| BioMarin Pharmaceutical, Inc. * | 5,033 | 398,765 |
| Bio-Rad Laboratories, Inc., Class A * | 586 | 465,682 |
| Bristol-Myers Squibb Co. | 61,609 | 3,597,966 |
| Catalent, Inc. * | 3,425 | 472,171 |
| Charles River Laboratories International, Inc. * | 84 | 37,689 |
| Elanco Animal Health, Inc. * | 12,267 | 403,339 |
| Eli Lilly & Co. | 4,909 | 1,250,617 |
| Exact Sciences Corp. * | 340 | 32,375 |
| Exelixis, Inc. * | 1,183 | 25,446 |
| Gilead Sciences, Inc. | 34,622 | 2,246,275 |
| Horizon Therapeutics plc * | 4,891 | 586,480 |
| Incyte Corp. * | 747 | 50,034 |
| Ionis Pharmaceuticals, Inc. * | 295 | 9,402 |
| Iovance Biotherapeutics, Inc. * | 2,800 | 68,068 |
| IQVIA Holdings, Inc. * | 2,660 | 695,377 |
| Jazz Pharmaceuticals plc * | 1,631 | 216,988 |
| Johnson & Johnson | 72,663 | 11,835,349 |
| Merck & Co., Inc. | 69,870 | 6,152,054 |
| Mirati Therapeutics, Inc. * | 174 | 32,889 |
| Natera, Inc. * | 165 | 18,904 |
| Nektar Therapeutics * | 4,865 | 73,753 |
| Organon & Co. | 6,992 | 256,956 |
| PerkinElmer, Inc. | 3,087 | 546,059 |
| Perrigo Co., plc | 3,667 | 165,565 |
| Pfizer, Inc. | 153,964 | 6,734,385 |
| PPD, Inc. * | 2,576 | 121,510 |
| QIAGEN N.V. * | 6,254 | 348,723 |
| Regeneron Pharmaceuticals, Inc. * | 2,468 | 1,579,372 |
| Repligen Corp. * | 85 | 24,693 |
| Royalty Pharma plc, Class A | 3,677 | 145,352 |
| Sage Therapeutics, Inc. * | 1,426 | 57,553 |
| Seagen, Inc. * | 395 | 69,650 |
| Syneos Health, Inc. * | 2,448 | 228,496 |
| Thermo Fisher Scientific, Inc. | 9,860 | 6,242,070 |
| Ultragenyx Pharmaceutical, Inc. * | 438 | 36,757 |
| United Therapeutics Corp. * | 1,217 | 232,155 |
| Vertex Pharmaceuticals, Inc. * | 4,287 | 792,795 |
| Viatris, Inc. | 33,314 | 444,742 |
| Waters Corp. * | 122 | 44,841 |
| Zoetis, Inc. | 683 | 147,665 |
| 48,702,288 | ||
126
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Real Estate 4.8% | ||
| Alexandria Real Estate Equities, Inc. | 4,249 | 867,391 |
| American Campus Communities, Inc. | 3,744 | 201,128 |
| American Homes 4 Rent, Class A | 7,757 | 314,934 |
| Americold Realty Trust | 7,189 | 211,860 |
| Apartment Income REIT Corp. | 4,310 | 231,059 |
| AvalonBay Communities, Inc. | 3,839 | 908,615 |
| Boston Properties, Inc. | 4,302 | 488,879 |
| Brixmor Property Group, Inc. | 8,175 | 191,622 |
| Camden Property Trust | 2,682 | 437,434 |
| CBRE Group, Inc., Class A * | 8,713 | 906,849 |
| CoreSite Realty Corp. | 264 | 37,609 |
| Cousins Properties, Inc. | 4,108 | 162,718 |
| CubeSmart | 5,546 | 305,085 |
| CyrusOne, Inc. | 3,405 | 279,278 |
| Digital Realty Trust, Inc. | 7,734 | 1,220,503 |
| Douglas Emmett, Inc. | 4,623 | 151,080 |
| Duke Realty Corp. | 10,309 | 579,778 |
| EPR Properties | 2,036 | 102,228 |
| Equinix, Inc. | 715 | 598,505 |
| Equity LifeStyle Properties, Inc. | 2,244 | 189,640 |
| Equity Residential | 10,151 | 877,046 |
| Essex Property Trust, Inc. | 1,785 | 606,775 |
| Extra Space Storage, Inc. | 3,291 | 649,545 |
| Federal Realty Investment Trust | 2,119 | 255,022 |
| First Industrial Realty Trust, Inc. | 3,547 | 206,542 |
| Gaming & Leisure Properties, Inc. | 6,060 | 293,849 |
| Healthcare Trust of America, Inc., Class A | 5,956 | 198,871 |
| Healthpeak Properties, Inc. | 14,848 | 527,253 |
| Highwoods Properties, Inc. | 2,814 | 126,180 |
| Host Hotels & Resorts, Inc. * | 19,554 | 329,094 |
| Hudson Pacific Properties, Inc. | 4,098 | 105,524 |
| Invitation Homes, Inc. | 15,883 | 655,174 |
| Iron Mountain, Inc. | 2,311 | 105,474 |
| JBG SMITH Properties | 3,411 | 98,441 |
| Jones Lang LaSalle, Inc. * | 1,393 | 359,714 |
| Kilroy Realty Corp. | 3,206 | 216,020 |
| Kimco Realty Corp. | 16,015 | 361,939 |
| Lamar Advertising Co., Class A | 288 | 32,602 |
| Life Storage, Inc. | 2,136 | 285,818 |
| Medical Properties Trust, Inc. | 16,326 | 348,234 |
| Mid-America Apartment Communities, Inc. | 3,177 | 648,775 |
| National Retail Properties, Inc. | 4,799 | 217,683 |
| Omega Healthcare Investors, Inc. | 6,585 | 193,336 |
| Opendoor Technologies, Inc. * | 9,896 | 234,634 |
| Park Hotels & Resorts, Inc. * | 6,503 | 120,501 |
| Prologis, Inc. | 20,324 | 2,946,167 |
| Public Storage | 981 | 325,869 |
| Rayonier, Inc. | 3,892 | 145,288 |
| Realty Income Corp. | 10,733 | 766,658 |
| Regency Centers Corp. | 4,652 | 327,547 |
| Rexford Industrial Realty, Inc. | 3,801 | 255,427 |
| SBA Communications Corp. | 2,486 | 858,490 |
| Simon Property Group, Inc. | 1,178 | 172,671 |
| SL Green Realty Corp. | 1,859 | 130,260 |
| Spirit Realty Capital, Inc. | 3,280 | 160,490 |
| STORE Capital Corp. | 6,739 | 231,350 |
| Sun Communities, Inc. | 3,155 | 618,317 |
| The Howard Hughes Corp. * | 1,133 | 98,718 |
| UDR, Inc. | 8,131 | 451,514 |
| Ventas, Inc. | 10,821 | 577,517 |
| VEREIT, Inc. | 6,305 | 317,142 |
| VICI Properties, Inc. | 16,182 | 474,942 |
| Vornado Realty Trust | 4,849 | 206,713 |
| Welltower, Inc. | 11,648 | 936,499 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Weyerhaeuser Co. | 20,649 | 737,582 |
| WP Carey, Inc. | 5,037 | 388,403 |
| 27,567,805 | ||
| Retailing 1.7% | ||
| Advance Auto Parts, Inc. | 1,804 | 406,838 |
| AutoNation, Inc. * | 1,250 | 151,400 |
| AutoZone, Inc. * | 466 | 831,735 |
| Bath & Body Works, Inc. | 2,846 | 196,630 |
| Best Buy Co., Inc. | 5,308 | 648,850 |
| Burlington Stores, Inc. * | 102 | 28,182 |
| CarMax, Inc. * | 4,109 | 562,604 |
| Dick's Sporting Goods, Inc. | 1,733 | 215,256 |
| Dollar General Corp. | 3,726 | 825,384 |
| Dollar Tree, Inc. * | 6,386 | 688,155 |
| DoorDash, Inc., Class A * | 471 | 91,751 |
| Foot Locker, Inc. | 2,493 | 118,841 |
| Genuine Parts Co. | 3,895 | 510,673 |
| Kohl's Corp. | 4,323 | 209,795 |
| Leslie's, Inc. * | 456 | 9,430 |
| Lithia Motors, Inc. | 735 | 234,627 |
| LKQ Corp. * | 7,508 | 413,541 |
| Nordstrom, Inc. * | 463 | 13,302 |
| Ollie's Bargain Outlet Holdings, Inc. * | 1,806 | 122,194 |
| O'Reilly Automotive, Inc. * | 1,306 | 812,750 |
| Penske Automotive Group, Inc. | 868 | 92,051 |
| Petco Health & Wellness Co., Inc. * | 1,415 | 34,993 |
| Qurate Retail, Inc., Class A | 10,115 | 105,601 |
| Target Corp. | 7,568 | 1,964,804 |
| The Gap, Inc. | 5,554 | 126,020 |
| Victoria's Secret & Co. * | 883 | 44,565 |
| Vroom, Inc. * | 2,408 | 46,065 |
| Wayfair, Inc., Class A * | 921 | 229,421 |
| Williams-Sonoma, Inc. | 494 | 91,751 |
| 9,827,209 | ||
| Semiconductors & Semiconductor Equipment 2.7% | ||
| Analog Devices, Inc. | 8,904 | 1,544,755 |
| Brooks Automation, Inc. | 343 | 39,942 |
| Cirrus Logic, Inc. * | 1,609 | 130,023 |
| First Solar, Inc. * | 2,929 | 350,279 |
| Intel Corp. | 111,472 | 5,462,128 |
| Marvell Technology, Inc. | 22,574 | 1,546,319 |
| Microchip Technology, Inc. | 2,356 | 174,556 |
| Micron Technology, Inc. | 26,635 | 1,840,479 |
| MKS Instruments, Inc. | 229 | 34,361 |
| NXP Semiconductors N.V. | 5,064 | 1,017,155 |
| ON Semiconductor Corp. * | 5,345 | 256,934 |
| Qorvo, Inc. * | 3,056 | 514,111 |
| Skyworks Solutions, Inc. | 2,400 | 401,112 |
| Texas Instruments, Inc. | 9,677 | 1,814,244 |
| Wolfspeed, Inc. * | 3,187 | 382,791 |
| 15,509,189 | ||
| Software & Services 4.5% | ||
| Accenture plc, Class A | 3,435 | 1,232,444 |
| Akamai Technologies, Inc. * | 4,428 | 466,977 |
| Alliance Data Systems Corp. | 1,382 | 117,815 |
| Amdocs Ltd. | 3,575 | 278,278 |
| ANSYS, Inc. * | 1,402 | 532,171 |
| Automatic Data Processing, Inc. | 932 | 209,225 |
| Black Knight, Inc. * | 4,192 | 293,901 |
| Broadridge Financial Solutions, Inc. | 299 | 53,345 |
| C3.ai, Inc., Class A * | 684 | 30,862 |
| CDK Global, Inc. | 2,859 | 124,424 |
127
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See financial notes
Schwab U.S. Large-Cap Value Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Ceridian HCM Holding, Inc. * | 3,560 | 445,890 |
| Citrix Systems, Inc. | 2,193 | 207,743 |
| Cloudflare, Inc., Class A * | 402 | 78,277 |
| Cognizant Technology Solutions Corp., Class A | 14,518 | 1,133,711 |
| Concentrix Corp. | 1,157 | 205,576 |
| Datto Holding Corp. * | 630 | 15,057 |
| Dolby Laboratories, Inc., Class A | 1,762 | 155,673 |
| Duck Creek Technologies, Inc. * | 1,536 | 48,384 |
| DXC Technology Co. * | 6,887 | 224,310 |
| Dynatrace, Inc. * | 327 | 24,525 |
| Euronet Worldwide, Inc. * | 414 | 46,447 |
| Fastly, Inc., Class A * | 2,932 | 148,389 |
| Fidelity National Information Services, Inc. | 17,085 | 1,891,993 |
| Fiserv, Inc. * | 15,372 | 1,513,988 |
| FleetCor Technologies, Inc. * | 1,732 | 428,514 |
| Genpact Ltd. | 4,792 | 236,485 |
| Global Payments, Inc. | 8,086 | 1,156,217 |
| GoDaddy, Inc., Class A * | 4,155 | 287,401 |
| Guidewire Software, Inc. * | 2,321 | 291,819 |
| International Business Machines Corp. | 24,644 | 3,082,964 |
| Jack Henry & Associates, Inc. | 1,499 | 249,554 |
| Jamf Holding Corp. * | 214 | 10,197 |
| Mandiant, Inc. * | 4,554 | 79,422 |
| Manhattan Associates, Inc. * | 819 | 148,681 |
| McAfee Corp., Class A | 439 | 9,381 |
| N-Able, Inc. * | 1,127 | 14,989 |
| NCR Corp. * | 2,304 | 91,100 |
| NortonLifeLock, Inc. | 11,154 | 283,869 |
| Nuance Communications, Inc. * | 4,843 | 266,607 |
| Oracle Corp. | 3,174 | 304,514 |
| Paychex, Inc. | 1,142 | 140,786 |
| Paycor HCM, Inc. * | 248 | 8,045 |
| Paysafe Ltd * | 11,324 | 88,327 |
| Pegasystems, Inc. | 61 | 7,242 |
| Procore Technologies, Inc. * | 77 | 7,042 |
| salesforce.com, Inc. * | 20,593 | 6,171,516 |
| Snowflake, Inc., Class A * | 322 | 113,936 |
| SolarWinds Corp. | 924 | 14,876 |
| SS&C Technologies Holdings, Inc. | 6,173 | 490,568 |
| StoneCo Ltd., Class A * | 406 | 13,747 |
| Synopsys, Inc. * | 1,531 | 510,099 |
| Teradata Corp. * | 423 | 23,925 |
| The Western Union Co. | 8,403 | 153,103 |
| Twilio, Inc., Class A * | 3,300 | 961,488 |
| Tyler Technologies, Inc. * | 149 | 80,940 |
| VeriSign, Inc. * | 2,715 | 604,549 |
| VMware, Inc., Class A * | 1,397 | 211,925 |
| WEX, Inc. * | 407 | 60,928 |
| 26,084,161 | ||
| Technology Hardware & Equipment 2.6% | ||
| Amphenol Corp., Class A | 4,654 | 357,288 |
| Arista Networks, Inc. * | 178 | 72,925 |
| Arrow Electronics, Inc. * | 1,964 | 227,333 |
| Avnet, Inc. | 2,701 | 102,935 |
| Ciena Corp. * | 4,235 | 229,918 |
| Cisco Systems, Inc. | 116,546 | 6,523,080 |
| Coherent, Inc. * | 67 | 17,045 |
| Corning, Inc. | 13,892 | 494,138 |
| Dell Technologies, Inc., Class C * | 3,833 | 421,592 |
| F5 Networks, Inc. * | 1,665 | 351,565 |
| Hewlett Packard Enterprise Co. | 35,852 | 525,232 |
| HP, Inc. | 21,639 | 656,311 |
| IPG Photonics Corp. * | 923 | 146,766 |
| Jabil, Inc. | 799 | 47,908 |
| Juniper Networks, Inc. | 8,945 | 264,056 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Keysight Technologies, Inc. * | 2,867 | 516,117 |
| Littelfuse, Inc. | 665 | 195,876 |
| Lumentum Holdings, Inc. * | 2,074 | 171,271 |
| Motorola Solutions, Inc. | 4,580 | 1,138,542 |
| National Instruments Corp. | 3,644 | 154,761 |
| NetApp, Inc. | 2,058 | 183,779 |
| Pure Storage, Inc., Class A * | 459 | 12,329 |
| SYNNEX Corp. | 1,136 | 119,280 |
| Teledyne Technologies, Inc. * | 1,266 | 568,712 |
| Trimble, Inc. * | 6,905 | 603,290 |
| Ubiquiti, Inc. | 19 | 5,805 |
| ViaSat, Inc. * | 1,892 | 112,933 |
| Vontier Corp. | 2,136 | 72,261 |
| Western Digital Corp. * | 8,471 | 442,949 |
| Xerox Holdings Corp. | 3,864 | 68,779 |
| 14,804,776 | ||
| Telecommunication Services 2.3% | ||
| AT&T, Inc. | 196,999 | 4,976,195 |
| Lumen Technologies, Inc. | 30,378 | 360,283 |
| T-Mobile US, Inc. * | 16,247 | 1,868,893 |
| Verizon Communications, Inc. | 114,269 | 6,055,114 |
| 13,260,485 | ||
| Transportation 1.9% | ||
| Alaska Air Group, Inc. * | 3,378 | 178,358 |
| AMERCO | 247 | 182,036 |
| American Airlines Group, Inc. * | 17,612 | 338,150 |
| C.H. Robinson Worldwide, Inc. | 2,936 | 284,763 |
| Copa Holdings S.A., Class A * | 854 | 63,162 |
| CSX Corp. | 62,446 | 2,258,672 |
| Expeditors International of Washington, Inc. | 1,256 | 154,815 |
| FedEx Corp. | 3,823 | 900,431 |
| GXO Logistics, Inc. * | 370 | 32,856 |
| JB Hunt Transport Services, Inc. | 265 | 52,255 |
| JetBlue Airways Corp. * | 8,707 | 122,159 |
| Kansas City Southern | 1,831 | 568,068 |
| Kirby Corp. * | 1,619 | 84,852 |
| Knight-Swift Transportation Holdings, Inc. | 4,433 | 251,307 |
| Landstar System, Inc. | 115 | 20,218 |
| Norfolk Southern Corp. | 6,796 | 1,991,568 |
| Old Dominion Freight Line, Inc. | 224 | 76,462 |
| Ryder System, Inc. | 1,447 | 122,923 |
| Schneider National, Inc., Class B | 1,370 | 34,168 |
| Southwest Airlines Co. * | 16,282 | 769,813 |
| TuSimple Holdings, Inc., Class A * | 773 | 30,240 |
| Uber Technologies, Inc. * | 6,426 | 281,587 |
| Union Pacific Corp. | 6,617 | 1,597,344 |
| United Airlines Holdings, Inc. * | 8,923 | 411,707 |
| XPO Logistics, Inc. * | 370 | 31,746 |
| 10,839,660 | ||
| Utilities 4.9% | ||
| Alliant Energy Corp. | 6,894 | 389,994 |
| Ameren Corp. | 7,014 | 591,210 |
| American Electric Power Co., Inc. | 13,792 | 1,168,320 |
| American Water Works Co., Inc. | 4,999 | 870,726 |
| Atmos Energy Corp. | 3,574 | 329,237 |
| Avangrid, Inc. | 1,566 | 82,528 |
| Brookfield Renewable Corp., Class A | 2,607 | 107,956 |
| CenterPoint Energy, Inc. | 16,353 | 425,832 |
| CMS Energy Corp. | 7,968 | 480,869 |
| Consolidated Edison, Inc. | 9,756 | 735,602 |
| Dominion Energy, Inc. | 22,215 | 1,686,785 |
128
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See financial notes
Schwab U.S. Large-Cap Value Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| DTE Energy Co. | 5,316 | 602,569 |
| Duke Energy Corp. | 21,210 | 2,163,632 |
| Edison International | 10,281 | 646,983 |
| Entergy Corp. | 5,526 | 569,288 |
| Essential Utilities, Inc. | 6,200 | 291,834 |
| Evergy, Inc. | 6,299 | 401,561 |
| Eversource Energy | 9,463 | 803,409 |
| Exelon Corp. | 26,910 | 1,431,343 |
| FirstEnergy Corp. | 14,995 | 577,757 |
| Hawaiian Electric Industries, Inc. | 2,932 | 118,922 |
| IDACORP, Inc. | 1,386 | 144,588 |
| MDU Resources Group, Inc. | 5,470 | 168,093 |
| National Fuel Gas Co. | 2,417 | 138,808 |
| NextEra Energy, Inc. | 54,082 | 4,614,817 |
| NiSource, Inc. | 10,739 | 264,931 |
| NRG Energy, Inc. | 3,665 | 146,197 |
| OGE Energy Corp. | 5,462 | 186,090 |
| PG&E Corp. * | 41,631 | 482,920 |
| Pinnacle West Capital Corp. | 3,099 | 199,854 |
| PPL Corp. | 21,229 | 611,395 |
| Public Service Enterprise Group, Inc. | 13,900 | 886,820 |
| Sempra Energy | 8,817 | 1,125,314 |
| The AES Corp. | 18,213 | 457,693 |
| The Southern Co. | 29,157 | 1,817,064 |
| UGI Corp. | 5,710 | 247,871 |
| Vistra Corp. | 13,208 | 258,745 |
| WEC Energy Group, Inc. | 8,699 | 783,432 |
| Xcel Energy, Inc. | 14,840 | 958,516 |
| 27,969,505 | ||
| Total Common Stocks (Cost $424,822,508) | 572,236,534 | |
| INVESTMENT COMPANIES 0.1% OF NET ASSETS | ||
| Equity Funds 0.1% | ||
| iShares Russell 1000 Value ETF | 3,000 | 493,620 |
| Total Investment Companies (Cost $457,229) | 493,620 | |
| SECURITY | NUMBEROF SHARES | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.6% OF NET ASSETS | ||
| Money Market Funds 0.6% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (c) | 3,160,930 | 3,160,930 |
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 241,115 | 241,115 |
| 3,402,045 | ||
| Total Short-Term Investments (Cost $3,402,045) | 3,402,045 | |
| Total Investments in Securities (Cost $428,681,782) | 576,132,199 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| Russell 1000 Value Index, e-mini, expires 12/17/21 | 38 | 3,071,730 | 10,070 |
| S&P 500 Index, e-mini, expires 12/17/21 | 1 | 229,850 | 6,048 |
| Net Unrealized Appreciation | 16,118 | ||
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund’s investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $232,187. |
| (c) | The rate shown is the 7-day yield. |
| (d) | Security purchased with cash collateral received for securities on loan. |
| ETF — | Exchange traded fund |
| REIT — | Real Estate Investment Trust |
Below is a summary of the fund’s transactions with affiliated issuers during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DIVIDENDS RECEIVED | |
| COMMON STOCKS 0.6% OF NET ASSETS | ||||||||
| Diversified Financials 0.6% | ||||||||
| The Charles Schwab Corp. | $1,329,909 | $904,113 | ($251,103) | $3,895 | $1,410,705 | $3,397,519 | 41,418 | $25,665 |
129
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $572,236,534 | $— | $— | $572,236,534 |
| Investment Companies1 | 493,620 | — | — | 493,620 |
| Short-Term Investments1 | 3,402,045 | — | — | 3,402,045 |
| Futures Contracts2 | 16,118 | — | — | 16,118 |
| Total | $576,148,317 | $— | $— | $576,148,317 |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at 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 underlying mutual funds and ETFs, which could be Level 1, Level 2 or Level 3.
130
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $1,761,440) | $3,397,519 | |
| Investments in securities, at value - unaffiliated (cost $426,920,342) including securities on loan of $232,187 | 572,734,680 | |
| Cash | 45,118 | |
| Deposit with broker for futures contracts | 243,500 | |
| Receivables: | ||
| Dividends | 625,917 | |
| Fund shares sold | 462,360 | |
| Income from securities on loan | + | 727 |
| Total assets | 577,509,821 | |
| Liabilities | ||
| Collateral held for securities on loan | 241,115 | |
| Payables: | ||
| Fund shares redeemed | 1,277,410 | |
| Investment adviser fees | 16,728 | |
| Variation margin on futures contracts | + | 2,435 |
| Total liabilities | 1,537,688 | |
| Net assets | $575,972,133 | |
| Net Assets by Source | ||
| Capital received from investors | $428,518,841 | |
| Total distributable earnings | + | 147,453,292 |
| Net assets | $575,972,133 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $575,972,133 | 10,734,901 | $53.65 | ||
131
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $25,665 | |
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $1,049) | 9,690,901 | |
| Securities on loan, net | + | 7,609 |
| Total investment income | 9,724,175 | |
| Expenses | ||
| Investment adviser fees | + | 169,611 |
| Total expenses | – | 169,611 |
| Net investment income | 9,554,564 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - affiliated | 3,895 | |
| Net realized gains on sales of securities - unaffiliated | 17,892,497 | |
| Net realized gains on futures contracts | + | 800,021 |
| Net realized gains | 18,696,413 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 1,410,705 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 124,113,290 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 74,542 |
| Net change in unrealized appreciation (depreciation) | + | 125,598,537 |
| Net realized and unrealized gains | 144,294,950 | |
| Increase in net assets resulting from operations | $153,849,514 | |
132
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Large-Cap Value Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $9,554,564 | $6,981,568 | |
| Net realized gains (losses) | 18,696,413 | (24,790,374) | |
| Net change in unrealized appreciation (depreciation) | + | 125,598,537 | 7,157,519 |
| Increase (decrease) in net assets from operations | $153,849,514 | ($10,651,287) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($7,759,956) | ($9,633,049) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 3,972,069 | $193,635,977 | 7,976,599 | $290,627,433 | |
| Shares reinvested | 129,214 | 5,614,330 | 182,880 | 7,979,022 | |
| Shares redeemed | + | (2,064,619) | (100,690,119) | (4,389,206) | (159,213,048) |
| Net transactions in fund shares | 2,036,664 | $98,560,188 | 3,770,273 | $139,393,407 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 8,698,237 | $331,322,387 | 4,927,964 | $212,213,316 | |
| Total increase | + | 2,036,664 | 244,649,746 | 3,770,273 | 119,109,071 |
| End of period | 10,734,901 | $575,972,133 | 8,698,237 | $331,322,387 | |
133
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Mid-Cap Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 12/20/17 1– 10/31/18 | |||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $44.98 | $44.29 | $39.55 | $40.00 | ||
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)2 | 0.69 | 0.72 | 0.70 | 0.59 | ||
| Net realized and unrealized gains (losses) | 19.54 | 1.09 | 4.54 | (1.04) | ||
| Total from investment operations | 20.23 | 1.81 | 5.24 | (0.45) | ||
| Less distributions: | ||||||
| Distributions from net investment income | (0.77) | (0.64) | (0.42) | — | ||
| Distributions from net realized gains | — | (0.48) | (0.08) | — | ||
| Total distributions | (0.77) | (1.12) | (0.50) | — | ||
| Net asset value at end of period | $64.44 | $44.98 | $44.29 | $39.55 | ||
| Total return | 45.35% | 4.04% | 13.61% | (1.13%) 3 | ||
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.04% | 0.04% | 0.04% 4 | 0.05% 5,6 | ||
| Net operating expenses | N/A | N/A | N/A | 0.03% 5,6 | ||
| Net investment income (loss) | 1.19% | 1.69% | 1.67% | 1.65% 5 | ||
| Portfolio turnover rate | 14% | 29% | 21% | 15% 3 | ||
| Net assets, end of period (x 1,000,000) | $891 | $483 | $357 | $171 | ||
| 1 | Commencement of operations. |
| 2 | Calculated based on the average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Effective December 20, 2018, the annual operating expense ratio was reduced to 0.04%. The ratio presented for period ended 10/31/19 is a blended ratio. |
| 5 | Annualized. |
| 6 | The investment adviser voluntarily agreed to waive the fund’s management fees to 0.00% beginning with the fund’s commencement of operations through June 30, 2018. The ratio presented for period ended 10/31/18 is a blended ratio. |
134
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Mid-Cap Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.3% OF NET ASSETS | ||
| Automobiles & Components 0.8% | ||
| Aptiv plc * | 20,482 | 3,541,133 |
| BorgWarner, Inc. | 18,168 | 818,832 |
| Gentex Corp. | 18,133 | 641,727 |
| Harley-Davidson, Inc. | 11,637 | 424,634 |
| Lear Corp. | 4,551 | 782,089 |
| QuantumScape Corp. * | 15,616 | 451,927 |
| Thor Industries, Inc. | 4,046 | 412,530 |
| 7,072,872 | ||
| Banks 3.4% | ||
| Bank of Hawaii Corp. | 3,012 | 254,514 |
| Bank OZK | 9,341 | 417,262 |
| BOK Financial Corp. | 2,323 | 235,018 |
| Citizens Financial Group, Inc. | 32,233 | 1,527,200 |
| Comerica, Inc. | 10,150 | 863,664 |
| Commerce Bancshares, Inc. | 8,067 | 568,804 |
| Cullen/Frost Bankers, Inc. | 4,329 | 560,606 |
| East West Bancorp, Inc. | 10,706 | 850,913 |
| F.N.B. Corp. | 24,039 | 280,054 |
| Fifth Third Bancorp | 52,255 | 2,274,660 |
| First Citizens BancShares, Inc., Class A | 459 | 373,580 |
| First Hawaiian, Inc. | 9,833 | 271,292 |
| First Horizon Corp. | 41,565 | 705,358 |
| First Republic Bank | 13,517 | 2,924,133 |
| Huntington Bancshares, Inc. | 111,230 | 1,750,760 |
| KeyCorp | 72,326 | 1,683,026 |
| M&T Bank Corp. | 9,733 | 1,431,919 |
| MGIC Investment Corp. | 25,677 | 414,940 |
| New York Community Bancorp, Inc. | 34,283 | 426,138 |
| PacWest Bancorp | 8,794 | 417,451 |
| People's United Financial, Inc. | 32,318 | 553,931 |
| Pinnacle Financial Partners, Inc. | 5,636 | 544,269 |
| Popular, Inc. | 6,014 | 489,780 |
| Prosperity Bancshares, Inc. | 6,781 | 510,677 |
| Regions Financial Corp. | 72,944 | 1,727,314 |
| Rocket Cos., Inc., Class A | 10,499 | 173,024 |
| Signature Bank | 4,501 | 1,340,488 |
| Sterling Bancorp | 14,452 | 367,803 |
| SVB Financial Group * | 4,296 | 3,081,950 |
| Synovus Financial Corp. | 11,024 | 513,608 |
| TFS Financial Corp. | 3,757 | 73,111 |
| Umpqua Holdings Corp. | 16,740 | 342,333 |
| UWM Holdings Corp. | 6,964 | 47,355 |
| Webster Financial Corp. | 6,823 | 381,815 |
| Western Alliance Bancorp | 7,648 | 887,856 |
| Wintrust Financial Corp. | 4,304 | 380,904 |
| Zions Bancorp NA | 12,108 | 762,683 |
| 30,410,193 | ||
| Capital Goods 9.4% | ||
| A.O. Smith Corp. | 10,038 | 733,477 |
| Acuity Brands, Inc. | 2,682 | 550,963 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Advanced Drainage Systems, Inc. | 4,592 | 517,978 |
| AECOM * | 10,344 | 707,219 |
| AGCO Corp. | 4,743 | 579,642 |
| Air Lease Corp. | 8,130 | 325,607 |
| Allegion plc | 6,811 | 873,851 |
| Allison Transmission Holdings, Inc. | 7,939 | 264,845 |
| AMETEK, Inc. | 17,498 | 2,316,735 |
| Armstrong World Industries, Inc. | 3,615 | 381,925 |
| Axon Enterprise, Inc. * | 4,922 | 885,763 |
| Builders FirstSource, Inc. * | 15,546 | 905,865 |
| BWX Technologies, Inc. | 7,224 | 409,890 |
| Carlisle Cos., Inc. | 3,897 | 868,719 |
| Carrier Global Corp. | 66,008 | 3,447,598 |
| ChargePoint Holdings, Inc. * | 7,972 | 197,546 |
| Colfax Corp. * | 8,871 | 457,921 |
| Core & Main, Inc., Class A * | 2,661 | 72,805 |
| Crane Co. | 3,752 | 387,507 |
| Cummins, Inc. | 10,892 | 2,612,337 |
| Curtiss-Wright Corp. | 3,095 | 395,170 |
| Donaldson Co., Inc. | 9,559 | 573,636 |
| Dover Corp. | 10,892 | 1,841,619 |
| Fastenal Co. | 43,553 | 2,486,005 |
| Flowserve Corp. | 9,893 | 332,603 |
| Fortive Corp. | 24,797 | 1,877,381 |
| Fortune Brands Home & Security, Inc. | 10,482 | 1,062,875 |
| Gates Industrial Corp. plc * | 7,144 | 117,447 |
| Generac Holdings, Inc. * | 4,654 | 2,320,298 |
| Graco, Inc. | 12,737 | 957,568 |
| HEICO Corp. | 3,407 | 474,902 |
| HEICO Corp., Class A | 5,957 | 748,676 |
| Hexcel Corp. * | 6,355 | 360,583 |
| Howmet Aerospace, Inc. | 29,348 | 871,342 |
| Hubbell, Inc. | 4,105 | 818,414 |
| Huntington Ingalls Industries, Inc. | 2,993 | 606,771 |
| IDEX Corp. | 5,762 | 1,282,448 |
| Ingersoll Rand, Inc. * | 30,774 | 1,654,410 |
| ITT, Inc. | 6,547 | 615,876 |
| Lennox International, Inc. | 2,542 | 760,770 |
| Lincoln Electric Holdings, Inc. | 4,361 | 621,006 |
| Masco Corp. | 18,694 | 1,225,392 |
| MasTec, Inc. * | 4,245 | 378,357 |
| Mercury Systems, Inc. * | 4,174 | 215,128 |
| MSC Industrial Direct Co., Inc., Class A | 3,417 | 287,267 |
| Nordson Corp. | 4,404 | 1,119,541 |
| nVent Electric plc | 12,662 | 448,868 |
| Oshkosh Corp. | 5,185 | 554,795 |
| Otis Worldwide Corp. | 32,627 | 2,620,274 |
| Owens Corning | 7,803 | 728,878 |
| PACCAR, Inc. | 25,864 | 2,317,932 |
| Parker-Hannifin Corp. | 9,765 | 2,896,201 |
| Pentair plc | 12,541 | 927,658 |
| Plug Power, Inc. * | 38,826 | 1,485,871 |
| Quanta Services, Inc. | 10,498 | 1,273,197 |
| Regal Rexnord Corp. | 5,115 | 779,168 |
| Rockwell Automation, Inc. | 8,810 | 2,813,914 |
| Sensata Technologies Holding plc * | 11,801 | 650,235 |
| Shoals Technologies Group, Inc., Class A * | 7,768 | 240,730 |
| SiteOne Landscape Supply, Inc. * | 3,345 | 785,941 |
135
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Mid-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Snap-on, Inc. | 4,050 | 823,081 |
| Spirit AeroSystems Holdings, Inc., Class A | 7,967 | 328,957 |
| Stanley Black & Decker, Inc. | 12,251 | 2,201,872 |
| Sunrun, Inc. * | 15,124 | 872,352 |
| Textron, Inc. | 17,116 | 1,264,017 |
| The AZEK Co., Inc. * | 8,483 | 311,241 |
| The Middleby Corp. * | 4,179 | 762,417 |
| The Timken Co. | 4,855 | 344,462 |
| The Toro Co. | 8,150 | 778,080 |
| Trane Technologies plc | 18,118 | 3,278,090 |
| TransDigm Group, Inc. * | 3,923 | 2,447,246 |
| Trex Co., Inc. * | 8,779 | 934,086 |
| United Rentals, Inc. * | 5,488 | 2,080,556 |
| Univar Solutions, Inc. * | 12,653 | 323,664 |
| Valmont Industries, Inc. | 1,583 | 378,274 |
| Vertiv Holdings Co. | 21,347 | 548,191 |
| Virgin Galactic Holdings, Inc. *(a) | 13,521 | 253,519 |
| W.W. Grainger, Inc. | 3,526 | 1,632,926 |
| Watsco, Inc. | 2,478 | 717,579 |
| Westinghouse Air Brake Technologies Corp. | 13,761 | 1,248,536 |
| Woodward, Inc. | 4,360 | 492,462 |
| Xylem, Inc. | 13,587 | 1,774,326 |
| 83,823,274 | ||
| Commercial & Professional Services 3.5% | ||
| ADT, Inc. | 11,856 | 98,998 |
| Booz Allen Hamilton Holding Corp. | 10,105 | 877,720 |
| CACI International, Inc., Class A * | 1,765 | 507,685 |
| Cintas Corp. | 6,631 | 2,871,886 |
| Clarivate plc * | 32,981 | 773,404 |
| Clean Harbors, Inc. * | 3,831 | 431,141 |
| Copart, Inc. * | 15,867 | 2,463,986 |
| CoStar Group, Inc. * | 29,731 | 2,558,353 |
| Driven Brands Holdings, Inc. * | 4,030 | 130,854 |
| Dun & Bradstreet Holdings, Inc. * | 12,146 | 228,831 |
| Equifax, Inc. | 9,196 | 2,551,246 |
| FTI Consulting, Inc. * | 2,536 | 364,981 |
| IAA, Inc. * | 10,229 | 610,160 |
| IHS Markit Ltd. | 28,340 | 3,704,605 |
| Jacobs Engineering Group, Inc. | 9,807 | 1,377,099 |
| LegalZoom.com, Inc. * | 1,439 | 40,350 |
| Leidos Holdings, Inc. | 10,710 | 1,070,786 |
| ManpowerGroup, Inc. | 4,127 | 398,875 |
| MSA Safety, Inc. | 2,784 | 426,035 |
| Nielsen Holdings plc | 27,123 | 549,241 |
| Republic Services, Inc. | 15,951 | 2,147,005 |
| Robert Half International, Inc. | 8,334 | 942,325 |
| Rollins, Inc. | 17,209 | 606,273 |
| Science Applications International Corp. | 4,403 | 395,301 |
| Stericycle, Inc. * | 6,947 | 464,893 |
| TransUnion | 14,526 | 1,674,702 |
| Verisk Analytics, Inc. | 12,048 | 2,533,333 |
| 30,800,068 | ||
| Consumer Durables & Apparel 3.3% | ||
| Brunswick Corp. | 5,904 | 549,603 |
| Capri Holdings Ltd. * | 11,204 | 596,501 |
| Carter's, Inc. | 3,254 | 320,584 |
| Columbia Sportswear Co. | 3,023 | 313,908 |
| D.R. Horton, Inc. | 25,244 | 2,253,532 |
| Deckers Outdoor Corp. * | 2,078 | 821,454 |
| Garmin Ltd. | 11,489 | 1,649,820 |
| Hanesbrands, Inc. | 26,358 | 449,140 |
| Hasbro, Inc. | 9,705 | 929,351 |
| Hayward Holdings, Inc. * | 2,949 | 68,387 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Leggett & Platt, Inc. | 10,081 | 472,295 |
| Lennar Corp., Class A | 20,618 | 2,060,357 |
| Lennar Corp., Class B | 1,165 | 95,623 |
| Lululemon Athletica, Inc. * | 8,657 | 4,034,249 |
| Mattel, Inc. * | 26,453 | 576,940 |
| Mohawk Industries, Inc. * | 4,291 | 760,408 |
| Newell Brands, Inc. | 28,864 | 660,697 |
| NVR, Inc. * | 245 | 1,199,226 |
| Peloton Interactive, Inc., Class A * | 20,038 | 1,832,275 |
| Polaris, Inc. | 4,330 | 497,733 |
| PulteGroup, Inc. | 19,612 | 942,945 |
| PVH Corp. * | 5,385 | 588,742 |
| Ralph Lauren Corp. | 3,596 | 457,303 |
| Skechers U.S.A., Inc., Class A * | 10,008 | 462,470 |
| Tapestry, Inc. | 21,174 | 825,362 |
| Tempur Sealy International, Inc. | 13,823 | 614,709 |
| Toll Brothers, Inc. | 8,527 | 513,070 |
| TopBuild Corp. * | 2,503 | 643,196 |
| Under Armour, Inc., Class A * | 14,281 | 313,611 |
| Under Armour, Inc., Class C * | 15,037 | 283,899 |
| VF Corp. | 24,578 | 1,791,245 |
| Whirlpool Corp. | 4,649 | 980,149 |
| YETI Holdings, Inc. * | 6,476 | 636,785 |
| 29,195,569 | ||
| Consumer Services 3.9% | ||
| Aramark | 17,404 | 634,898 |
| Boyd Gaming Corp. * | 6,232 | 397,477 |
| Bright Horizons Family Solutions, Inc. * | 4,610 | 765,260 |
| Caesars Entertainment, Inc. * | 15,475 | 1,693,894 |
| Carnival Corp. * | 64,642 | 1,432,467 |
| Chegg, Inc. * | 10,852 | 645,043 |
| Chipotle Mexican Grill, Inc. * | 2,130 | 3,789,334 |
| Choice Hotels International, Inc. | 2,649 | 372,502 |
| Churchill Downs, Inc. | 2,797 | 643,310 |
| Darden Restaurants, Inc. | 9,868 | 1,422,374 |
| Domino’s Pizza, Inc. | 2,786 | 1,362,270 |
| DraftKings, Inc., Class A * | 23,043 | 1,073,573 |
| Expedia Group, Inc. * | 11,005 | 1,809,332 |
| Frontdoor, Inc. * | 6,498 | 242,245 |
| Grand Canyon Education, Inc. * | 3,378 | 269,227 |
| H&R Block, Inc. | 13,483 | 311,053 |
| Hilton Worldwide Holdings, Inc. * | 20,796 | 2,993,584 |
| Hyatt Hotels Corp., Class A * | 3,576 | 304,675 |
| Marriott Vacations Worldwide Corp. | 3,161 | 496,972 |
| MGM Resorts International | 30,422 | 1,434,702 |
| Mister Car Wash, Inc. * | 3,069 | 56,286 |
| Norwegian Cruise Line Holdings Ltd. * | 28,013 | 720,494 |
| Penn National Gaming, Inc. * | 12,492 | 894,427 |
| Planet Fitness, Inc., Class A * | 6,323 | 502,995 |
| Royal Caribbean Cruises Ltd. * | 16,632 | 1,404,240 |
| Service Corp. International | 12,417 | 850,440 |
| Six Flags Entertainment Corp. * | 5,843 | 240,323 |
| Terminix Global Holdings, Inc. * | 9,478 | 383,669 |
| The Wendy's Co. | 13,567 | 302,544 |
| Travel & Leisure Co. | 6,403 | 347,939 |
| Vail Resorts, Inc. | 3,028 | 1,043,782 |
| Wyndham Hotels & Resorts, Inc. | 6,955 | 587,489 |
| Wynn Resorts Ltd. * | 8,023 | 720,465 |
| Yum China Holdings, Inc. | 31,943 | 1,823,307 |
| Yum! Brands, Inc. | 22,644 | 2,829,141 |
| 34,801,733 | ||
| Diversified Financials 5.4% | ||
| Affiliated Managers Group, Inc. | 3,118 | 523,450 |
| AGNC Investment Corp. | 39,807 | 633,727 |
136
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Mid-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Ally Financial, Inc. | 27,340 | 1,305,212 |
| Ameriprise Financial, Inc. | 8,631 | 2,607,684 |
| Annaly Capital Management, Inc. | 105,926 | 896,134 |
| Apollo Global Management, Inc. | 13,752 | 1,058,216 |
| Ares Management Corp., Class A | 10,434 | 884,177 |
| Cboe Global Markets, Inc. | 8,069 | 1,064,624 |
| Credit Acceptance Corp. * | 662 | 396,015 |
| Discover Financial Services | 22,716 | 2,574,177 |
| Equitable Holdings, Inc. | 28,013 | 938,435 |
| Evercore, Inc., Class A | 2,931 | 445,043 |
| FactSet Research Systems, Inc. | 2,877 | 1,277,072 |
| Franklin Resources, Inc. | 21,935 | 690,733 |
| Interactive Brokers Group, Inc., Class A | 6,090 | 431,477 |
| Invesco Ltd. | 25,334 | 643,737 |
| Janus Henderson Group plc | 12,958 | 602,547 |
| Jefferies Financial Group, Inc. | 16,596 | 713,628 |
| KKR & Co., Inc. | 42,226 | 3,364,145 |
| Lazard Ltd., Class A | 7,604 | 372,520 |
| LPL Financial Holdings, Inc. | 6,040 | 990,681 |
| MarketAxess Holdings, Inc. | 2,835 | 1,158,579 |
| Morningstar, Inc. | 1,776 | 562,548 |
| MSCI, Inc. | 6,087 | 4,047,125 |
| Nasdaq, Inc. | 8,832 | 1,853,572 |
| New Residential Investment Corp. | 32,823 | 372,869 |
| Northern Trust Corp. | 15,581 | 1,917,086 |
| OneMain Holdings, Inc. | 7,877 | 415,984 |
| Raymond James Financial, Inc. | 14,013 | 1,381,542 |
| Santander Consumer USA Holdings, Inc. | 4,552 | 189,818 |
| SEI Investments Co. | 8,215 | 517,874 |
| SLM Corp. | 23,137 | 424,564 |
| Starwood Property Trust, Inc. | 20,829 | 530,515 |
| State Street Corp. | 27,705 | 2,730,328 |
| Stifel Financial Corp. | 7,741 | 564,087 |
| Synchrony Financial | 43,140 | 2,003,853 |
| T. Rowe Price Group, Inc. | 17,102 | 3,709,082 |
| The Carlyle Group, Inc. | 12,321 | 691,824 |
| Tradeweb Markets, Inc., Class A | 7,964 | 709,592 |
| Upstart Holdings, Inc. * | 3,421 | 1,101,699 |
| Virtu Financial, Inc., Class A | 6,938 | 172,617 |
| Voya Financial, Inc. | 8,547 | 596,324 |
| 48,064,916 | ||
| Energy 3.9% | ||
| Antero Midstream Corp. | 25,257 | 268,734 |
| APA Corp. | 28,620 | 750,130 |
| Baker Hughes Co. | 55,937 | 1,402,900 |
| Cheniere Energy, Inc. * | 17,781 | 1,838,555 |
| Continental Resources, Inc. | 4,913 | 239,804 |
| Coterra Energy, Inc. | 60,411 | 1,287,963 |
| Devon Energy Corp. | 51,174 | 2,051,054 |
| Diamondback Energy, Inc. | 13,708 | 1,469,360 |
| DTE Midstream LLC * | 7,301 | 350,156 |
| EQT Corp. * | 23,113 | 460,180 |
| Halliburton Co. | 67,248 | 1,680,527 |
| Hess Corp. | 21,052 | 1,738,264 |
| HollyFrontier Corp. | 11,378 | 384,576 |
| Marathon Oil Corp. | 59,498 | 971,007 |
| Marathon Petroleum Corp. | 48,401 | 3,191,078 |
| New Fortress Energy, Inc. | 1,972 | 59,160 |
| NOV, Inc. * | 29,601 | 415,006 |
| Occidental Petroleum Corp. | 64,152 | 2,151,017 |
| ONEOK, Inc. | 33,678 | 2,142,594 |
| Phillips 66 | 33,242 | 2,485,837 |
| Pioneer Natural Resources Co. | 16,385 | 3,063,667 |
| Targa Resources Corp. | 17,101 | 934,912 |
| Texas Pacific Land Corp. | 446 | 568,057 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| The Williams Cos., Inc. | 92,295 | 2,592,567 |
| Valero Energy Corp. | 30,996 | 2,396,921 |
| 34,894,026 | ||
| Food & Staples Retailing 0.4% | ||
| Albertsons Cos., Inc., Class A | 11,817 | 365,736 |
| Casey's General Stores, Inc. | 2,800 | 536,312 |
| Grocery Outlet Holding Corp. * | 6,630 | 147,120 |
| The Kroger Co. | 56,750 | 2,271,135 |
| U.S. Foods Holding Corp. * | 16,750 | 580,722 |
| 3,901,025 | ||
| Food, Beverage & Tobacco 2.3% | ||
| Archer-Daniels-Midland Co. | 42,266 | 2,715,168 |
| Beyond Meat, Inc. *(a) | 4,351 | 430,662 |
| Brown-Forman Corp., Class A | 3,457 | 221,352 |
| Brown-Forman Corp., Class B | 13,911 | 944,418 |
| Bunge Ltd. | 10,425 | 965,772 |
| Campbell Soup Co. | 14,836 | 592,698 |
| Conagra Brands, Inc. | 35,535 | 1,144,227 |
| Darling Ingredients, Inc. * | 12,259 | 1,036,131 |
| Flowers Foods, Inc. | 14,240 | 352,440 |
| Freshpet, Inc. * | 3,099 | 483,165 |
| Hormel Foods Corp. | 21,459 | 908,145 |
| Ingredion, Inc. | 5,096 | 485,292 |
| Kellogg Co. | 19,097 | 1,170,646 |
| Lamb Weston Holdings, Inc. | 11,083 | 625,635 |
| McCormick & Co., Inc. - Non Voting Shares | 18,934 | 1,519,075 |
| Molson Coors Beverage Co., Class B | 13,573 | 598,434 |
| Pilgrim's Pride Corp. * | 3,578 | 100,756 |
| Post Holdings, Inc. * | 4,479 | 454,529 |
| Seaboard Corp. | 19 | 73,150 |
| The Boston Beer Co., Inc., Class A * | 709 | 349,168 |
| The Hain Celestial Group, Inc. * | 6,333 | 284,162 |
| The Hershey Co. | 11,106 | 1,947,437 |
| The JM Smucker Co. | 7,957 | 977,597 |
| Tyson Foods, Inc., Class A | 21,799 | 1,743,266 |
| 20,123,325 | ||
| Health Care Equipment & Services 5.8% | ||
| ABIOMED, Inc. * | 3,362 | 1,116,318 |
| Acadia Healthcare Co., Inc. * | 6,728 | 417,136 |
| agilon health, Inc. * | 5,200 | 127,400 |
| Amedisys, Inc. * | 2,431 | 411,666 |
| AmerisourceBergen Corp. | 11,269 | 1,375,043 |
| Cardinal Health, Inc. | 22,035 | 1,053,493 |
| Cerner Corp. | 22,438 | 1,666,919 |
| Certara, Inc. * | 6,305 | 260,460 |
| Change Healthcare, Inc. * | 19,039 | 409,910 |
| Chemed Corp. | 1,167 | 562,786 |
| DaVita, Inc. * | 5,256 | 542,629 |
| Dentsply Sirona, Inc. | 16,488 | 943,278 |
| DexCom, Inc. * | 7,317 | 4,560,028 |
| Encompass Health Corp. | 7,412 | 471,107 |
| Envista Holdings Corp. * | 12,218 | 477,724 |
| Figs, Inc., Class A * | 2,847 | 95,688 |
| Globus Medical, Inc., Class A * | 5,871 | 453,065 |
| Guardant Health, Inc. * | 6,813 | 795,690 |
| Henry Schein, Inc. * | 10,684 | 815,723 |
| Hill-Rom Holdings, Inc. | 5,046 | 781,625 |
| Hologic, Inc. * | 19,039 | 1,395,749 |
| ICU Medical, Inc. * | 1,514 | 354,473 |
| IDEXX Laboratories, Inc. * | 6,423 | 4,278,617 |
| Insulet Corp. * | 5,017 | 1,555,370 |
137
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Mid-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Integra LifeSciences Holdings Corp. * | 5,480 | 364,201 |
| Laboratory Corp. of America Holdings * | 7,318 | 2,100,412 |
| Masimo Corp. * | 3,796 | 1,076,318 |
| McKesson Corp. | 11,761 | 2,444,877 |
| Molina Healthcare, Inc. * | 4,375 | 1,293,775 |
| Novocure Ltd. * | 7,766 | 796,559 |
| Oak Street Health, Inc. * | 7,467 | 352,666 |
| Penumbra, Inc. * | 2,562 | 708,521 |
| Premier, Inc., Class A | 9,244 | 360,054 |
| Quest Diagnostics, Inc. | 9,251 | 1,357,862 |
| Quidel Corp. * | 2,793 | 370,827 |
| ResMed, Inc. | 10,921 | 2,871,240 |
| Signify Health, Inc., Class A * | 4,723 | 75,899 |
| STERIS plc | 6,475 | 1,513,467 |
| Tandem Diabetes Care, Inc. * | 4,629 | 631,072 |
| Teladoc Health, Inc. * | 11,464 | 1,714,900 |
| Teleflex, Inc. | 3,546 | 1,265,709 |
| The Cooper Cos., Inc. | 3,673 | 1,531,347 |
| Universal Health Services, Inc., Class B | 5,594 | 694,215 |
| Veeva Systems, Inc., Class A * | 10,397 | 3,295,953 |
| Zimmer Biomet Holdings, Inc. | 15,844 | 2,267,593 |
| 52,009,364 | ||
| Household & Personal Products 0.5% | ||
| Church & Dwight Co., Inc. | 18,614 | 1,626,119 |
| Coty, Inc., Class A * | 25,774 | 218,563 |
| Herbalife Nutrition Ltd. * | 7,982 | 370,365 |
| Reynolds Consumer Products, Inc. | 4,156 | 112,129 |
| Spectrum Brands Holdings, Inc. | 3,189 | 298,969 |
| The Clorox Co. | 9,321 | 1,519,416 |
| 4,145,561 | ||
| Insurance 3.7% | ||
| Aflac, Inc. | 50,306 | 2,699,923 |
| Alleghany Corp. * | 1,024 | 667,013 |
| American Financial Group, Inc. | 5,147 | 700,198 |
| Arch Capital Group Ltd. * | 28,929 | 1,209,811 |
| Arthur J. Gallagher & Co. | 15,547 | 2,606,766 |
| Assurant, Inc. | 4,449 | 717,668 |
| Assured Guaranty Ltd. | 5,359 | 297,853 |
| Athene Holding Ltd., Class A * | 8,759 | 762,121 |
| Axis Capital Holdings Ltd. | 5,895 | 306,953 |
| Brighthouse Financial, Inc. * | 6,297 | 316,298 |
| Brown & Brown, Inc. | 17,783 | 1,122,285 |
| Cincinnati Financial Corp. | 11,367 | 1,380,409 |
| CNA Financial Corp. | 2,069 | 92,815 |
| Erie Indemnity Co., Class A | 1,908 | 392,685 |
| Everest Re Group Ltd. | 3,007 | 786,331 |
| Fidelity National Financial, Inc. | 20,691 | 991,306 |
| First American Financial Corp. | 8,075 | 590,606 |
| Globe Life, Inc. | 7,595 | 676,107 |
| GoHealth, Inc., Class A * | 3,811 | 20,579 |
| Kemper Corp. | 4,555 | 289,151 |
| Lemonade, Inc. *(a) | 2,912 | 181,010 |
| Lincoln National Corp. | 14,188 | 1,023,664 |
| Loews Corp. | 16,444 | 922,015 |
| Markel Corp. * | 1,026 | 1,347,271 |
| Mercury General Corp. | 2,034 | 110,833 |
| Old Republic International Corp. | 21,237 | 548,552 |
| Primerica, Inc. | 2,978 | 501,019 |
| Principal Financial Group, Inc. | 20,112 | 1,349,314 |
| Prudential Financial, Inc. | 29,328 | 3,227,546 |
| Reinsurance Group of America, Inc. | 5,156 | 608,820 |
| RenaissanceRe Holdings Ltd. | 3,537 | 501,547 |
| The Hanover Insurance Group, Inc. | 2,715 | 342,090 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| The Hartford Financial Services Group, Inc. | 26,315 | 1,919,153 |
| Unum Group | 15,432 | 393,053 |
| W.R. Berkley Corp. | 10,470 | 833,412 |
| White Mountains Insurance Group Ltd. | 229 | 241,593 |
| Willis Towers Watson plc | 9,748 | 2,361,745 |
| 33,039,515 | ||
| Materials 5.2% | ||
| Albemarle Corp. | 8,822 | 2,209,646 |
| Alcoa Corp. | 14,176 | 651,387 |
| Amcor plc | 116,934 | 1,411,393 |
| AptarGroup, Inc. | 4,988 | 602,451 |
| Ardagh Metal Packaging S.A. * | 2,913 | 28,693 |
| Ashland Global Holdings, Inc. | 4,175 | 400,842 |
| Avery Dennison Corp. | 6,281 | 1,367,499 |
| Axalta Coating Systems Ltd. * | 15,657 | 488,342 |
| Ball Corp. | 24,398 | 2,231,929 |
| Berry Global Group, Inc. * | 10,246 | 671,523 |
| Celanese Corp. | 8,432 | 1,361,852 |
| CF Industries Holdings, Inc. | 16,223 | 921,466 |
| Cleveland-Cliffs, Inc. * | 34,567 | 833,410 |
| Corteva, Inc. | 56,026 | 2,417,522 |
| Crown Holdings, Inc. | 9,583 | 996,536 |
| Diversey Holdings Ltd. * | 3,799 | 66,103 |
| Eagle Materials, Inc. | 3,115 | 462,141 |
| Eastman Chemical Co. | 10,298 | 1,071,301 |
| Element Solutions, Inc. | 17,606 | 399,832 |
| FMC Corp. | 9,774 | 889,532 |
| Graphic Packaging Holding Co. | 21,454 | 427,578 |
| Huntsman Corp. | 16,000 | 521,280 |
| International Flavors & Fragrances, Inc. | 18,905 | 2,787,542 |
| International Paper Co. | 29,704 | 1,475,398 |
| Louisiana-Pacific Corp. | 7,215 | 425,180 |
| LyondellBasell Industries N.V., Class A | 19,948 | 1,851,573 |
| Martin Marietta Materials, Inc. | 4,721 | 1,854,598 |
| NewMarket Corp. | 507 | 172,385 |
| Nucor Corp. | 22,300 | 2,489,795 |
| Olin Corp. | 10,906 | 621,424 |
| Packaging Corp. of America | 7,111 | 976,838 |
| PPG Industries, Inc. | 17,968 | 2,885,122 |
| Reliance Steel & Aluminum Co. | 4,810 | 703,030 |
| Royal Gold, Inc. | 4,957 | 490,842 |
| RPM International, Inc. | 9,683 | 844,358 |
| Sealed Air Corp. | 11,363 | 674,053 |
| Silgan Holdings, Inc. | 6,324 | 254,225 |
| Sonoco Products Co. | 7,439 | 431,090 |
| Steel Dynamics, Inc. | 14,713 | 972,235 |
| Sylvamo Corp. * | 2,736 | 77,046 |
| The Chemours Co. | 12,526 | 350,979 |
| The Mosaic Co. | 26,210 | 1,089,550 |
| The Scotts Miracle-Gro Co. | 3,118 | 462,898 |
| United States Steel Corp. | 20,284 | 535,295 |
| Valvoline, Inc. | 13,751 | 466,984 |
| Vulcan Materials Co. | 10,037 | 1,908,235 |
| Westlake Chemical Corp. | 2,507 | 244,031 |
| WestRock Co. | 20,012 | 962,577 |
| 46,439,541 | ||
| Media & Entertainment 3.8% | ||
| Altice USA, Inc., Class A * | 16,296 | 265,625 |
| Cable One, Inc. | 410 | 701,596 |
| Discovery, Inc., Class A *(a) | 12,560 | 294,406 |
| Discovery, Inc., Class C * | 23,896 | 539,094 |
| DISH Network Corp., Class A * | 18,852 | 774,252 |
| Fox Corp., Class A | 24,245 | 963,496 |
138
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Mid-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Fox Corp., Class B | 11,485 | 424,486 |
| IAC/InterActiveCorp. * | 5,800 | 883,746 |
| Liberty Broadband Corp., Class A * | 1,869 | 300,479 |
| Liberty Broadband Corp., Class C * | 10,990 | 1,785,326 |
| Liberty Media Corp. - Liberty Formula One, Class A * | 1,923 | 100,285 |
| Liberty Media Corp. - Liberty Formula One, Class C * | 15,015 | 837,837 |
| Liberty Media Corp. - Liberty SiriusXM, Class A * | 6,053 | 301,318 |
| Liberty Media Corp. - Liberty SiriusXM, Class C * | 12,315 | 607,376 |
| Live Nation Entertainment, Inc. * | 10,187 | 1,030,415 |
| Madison Square Garden Sports Corp. * | 1,426 | 270,241 |
| Match Group, Inc. * | 20,973 | 3,162,309 |
| News Corp., Class A | 29,647 | 678,916 |
| News Corp., Class B | 9,114 | 205,612 |
| Nexstar Media Group, Inc., Class A | 3,056 | 458,186 |
| Omnicom Group, Inc. | 16,167 | 1,100,649 |
| Pinterest, Inc., Class A * | 42,088 | 1,878,808 |
| Playtika Holding Corp. * | 7,910 | 223,695 |
| Roku, Inc. * | 8,838 | 2,694,706 |
| Sirius XM Holdings, Inc. (a) | 68,441 | 416,806 |
| Skillz, Inc. *(a) | 22,282 | 249,113 |
| Spotify Technology S.A. * | 10,372 | 3,001,657 |
| Take-Two Interactive Software, Inc. * | 8,765 | 1,586,465 |
| The Interpublic Group of Cos., Inc. | 29,740 | 1,087,592 |
| The New York Times Co., Class A | 12,519 | 683,412 |
| TripAdvisor, Inc. * | 7,444 | 245,429 |
| Twitter, Inc. * | 59,210 | 3,170,103 |
| ViacomCBS, Inc., Class A | 594 | 23,124 |
| ViacomCBS, Inc., Class B | 44,278 | 1,603,749 |
| Vimeo, Inc. * | 10,929 | 368,635 |
| World Wrestling Entertainment, Inc., Class A | 3,370 | 205,873 |
| Zynga, Inc., Class A * | 75,766 | 559,153 |
| 33,683,970 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 5.6% | ||
| 10X Genomics, Inc., Class A * | 6,345 | 1,023,258 |
| Acceleron Pharma, Inc. * | 4,002 | 697,068 |
| Adaptive Biotechnologies Corp. * | 8,226 | 274,831 |
| Agilent Technologies, Inc. | 23,097 | 3,637,547 |
| Alnylam Pharmaceuticals, Inc. * | 9,000 | 1,436,040 |
| Avantor, Inc. * | 43,996 | 1,776,558 |
| BioMarin Pharmaceutical, Inc. * | 13,842 | 1,096,702 |
| Bio-Rad Laboratories, Inc., Class A * | 1,610 | 1,279,435 |
| Bio-Techne Corp. | 2,937 | 1,537,960 |
| Bruker Corp. | 7,775 | 624,332 |
| Catalent, Inc. * | 12,326 | 1,699,262 |
| Charles River Laboratories International, Inc. * | 3,781 | 1,696,459 |
| CureVac N.V. * | 4,063 | 162,804 |
| Elanco Animal Health, Inc. * | 33,776 | 1,110,555 |
| Exact Sciences Corp. * | 12,955 | 1,233,575 |
| Exelixis, Inc. * | 23,482 | 505,098 |
| Horizon Therapeutics plc * | 16,567 | 1,986,549 |
| Incyte Corp. * | 14,019 | 938,993 |
| Ionis Pharmaceuticals, Inc. * | 10,623 | 338,555 |
| Iovance Biotherapeutics, Inc. * | 11,124 | 270,424 |
| IQVIA Holdings, Inc. * | 14,478 | 3,784,839 |
| Jazz Pharmaceuticals plc * | 4,502 | 598,946 |
| Maravai LifeSciences Holdings, Inc., Class A * | 7,735 | 327,113 |
| Mettler-Toledo International, Inc. * | 1,742 | 2,579,693 |
| Mirati Therapeutics, Inc. * | 2,978 | 562,902 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Natera, Inc. * | 6,336 | 725,916 |
| Nektar Therapeutics * | 13,446 | 203,841 |
| Neurocrine Biosciences, Inc. * | 7,099 | 748,306 |
| Novavax, Inc. * | 5,603 | 833,894 |
| Organon & Co. | 19,247 | 707,327 |
| PerkinElmer, Inc. | 8,499 | 1,503,388 |
| Perrigo Co., plc | 10,108 | 456,376 |
| PPD, Inc. * | 12,156 | 573,399 |
| QIAGEN N.V. * | 17,218 | 960,076 |
| Repligen Corp. * | 4,152 | 1,206,156 |
| Royalty Pharma plc, Class A | 24,675 | 975,403 |
| Sage Therapeutics, Inc. * | 3,887 | 156,879 |
| Sarepta Therapeutics, Inc. * | 6,237 | 493,534 |
| Seagen, Inc. * | 10,125 | 1,785,341 |
| Sotera Health Co. * | 7,529 | 185,966 |
| Syneos Health, Inc. * | 7,728 | 721,332 |
| Ultragenyx Pharmaceutical, Inc. * | 4,889 | 410,285 |
| United Therapeutics Corp. * | 3,348 | 638,664 |
| Viatris, Inc. | 91,715 | 1,224,395 |
| Waters Corp. * | 4,640 | 1,705,432 |
| West Pharmaceutical Services, Inc. | 5,578 | 2,397,871 |
| 49,793,279 | ||
| Real Estate 7.9% | ||
| Alexandria Real Estate Equities, Inc. | 11,708 | 2,390,071 |
| American Campus Communities, Inc. | 10,386 | 557,936 |
| American Homes 4 Rent, Class A | 21,454 | 871,032 |
| Americold Realty Trust | 19,795 | 583,359 |
| Apartment Income REIT Corp. | 11,876 | 636,672 |
| AvalonBay Communities, Inc. | 10,581 | 2,504,311 |
| Boston Properties, Inc. | 11,845 | 1,346,066 |
| Brixmor Property Group, Inc. | 22,463 | 526,533 |
| Camden Property Trust | 7,379 | 1,203,515 |
| CBRE Group, Inc., Class A * | 25,341 | 2,637,491 |
| CoreSite Realty Corp. | 3,323 | 473,395 |
| Cousins Properties, Inc. | 11,236 | 445,058 |
| CubeSmart | 15,226 | 837,582 |
| CyrusOne, Inc. | 9,401 | 771,070 |
| Douglas Emmett, Inc. | 12,641 | 413,108 |
| Duke Realty Corp. | 28,400 | 1,597,216 |
| EPR Properties | 5,638 | 283,084 |
| Equity LifeStyle Properties, Inc. | 13,181 | 1,113,926 |
| Equity Residential | 27,976 | 2,417,126 |
| Essex Property Trust, Inc. | 4,918 | 1,671,776 |
| Extra Space Storage, Inc. | 9,952 | 1,964,226 |
| Federal Realty Investment Trust | 5,861 | 705,371 |
| First Industrial Realty Trust, Inc. | 9,752 | 567,859 |
| Gaming & Leisure Properties, Inc. | 16,721 | 810,801 |
| Healthcare Trust of America, Inc., Class A | 16,507 | 551,169 |
| Healthpeak Properties, Inc. | 40,902 | 1,452,430 |
| Highwoods Properties, Inc. | 7,814 | 350,380 |
| Host Hotels & Resorts, Inc. * | 53,637 | 902,711 |
| Hudson Pacific Properties, Inc. | 11,191 | 288,168 |
| Invitation Homes, Inc. | 43,755 | 1,804,894 |
| Iron Mountain, Inc. | 21,735 | 991,985 |
| JBG SMITH Properties | 9,400 | 271,284 |
| Jones Lang LaSalle, Inc. * | 3,831 | 989,279 |
| Kilroy Realty Corp. | 8,823 | 594,494 |
| Kimco Realty Corp. | 44,067 | 995,914 |
| Lamar Advertising Co., Class A | 6,536 | 739,875 |
| Life Storage, Inc. | 5,901 | 789,613 |
| Medical Properties Trust, Inc. | 44,821 | 956,032 |
| Mid-America Apartment Communities, Inc. | 8,756 | 1,788,063 |
| National Retail Properties, Inc. | 13,274 | 602,109 |
| Omega Healthcare Investors, Inc. | 18,102 | 531,475 |
| Opendoor Technologies, Inc. * | 34,103 | 808,582 |
139
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Mid-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Park Hotels & Resorts, Inc. * | 17,853 | 330,816 |
| Rayonier, Inc. | 10,668 | 398,237 |
| Realty Income Corp. | 29,563 | 2,111,685 |
| Regency Centers Corp. | 12,808 | 901,811 |
| Rexford Industrial Realty, Inc. | 10,456 | 702,643 |
| SBA Communications Corp. | 8,222 | 2,839,303 |
| Simon Property Group, Inc. | 24,758 | 3,629,028 |
| SL Green Realty Corp. | 5,060 | 354,554 |
| Spirit Realty Capital, Inc. | 9,019 | 441,300 |
| STORE Capital Corp. | 18,536 | 636,341 |
| Sun Communities, Inc. | 8,693 | 1,703,654 |
| The Howard Hughes Corp. * | 3,160 | 275,331 |
| UDR, Inc. | 22,405 | 1,244,150 |
| Ventas, Inc. | 29,806 | 1,590,746 |
| VEREIT, Inc. | 17,359 | 873,158 |
| VICI Properties, Inc. | 44,539 | 1,307,220 |
| Vornado Realty Trust | 13,305 | 567,192 |
| Welltower, Inc. | 32,088 | 2,579,875 |
| Weyerhaeuser Co. | 56,870 | 2,031,396 |
| WP Carey, Inc. | 13,859 | 1,068,668 |
| Zillow Group, Inc., Class A * | 4,495 | 475,211 |
| Zillow Group, Inc., Class C * | 12,859 | 1,332,578 |
| 70,131,938 | ||
| Retailing 4.5% | ||
| Advance Auto Parts, Inc. | 4,962 | 1,119,030 |
| AutoNation, Inc. * | 3,426 | 414,957 |
| AutoZone, Inc. * | 1,634 | 2,916,429 |
| Bath & Body Works, Inc. | 18,511 | 1,278,925 |
| Best Buy Co., Inc. | 18,977 | 2,319,748 |
| Burlington Stores, Inc. * | 5,035 | 1,391,120 |
| CarMax, Inc. * | 12,377 | 1,694,659 |
| Carvana Co. * | 5,852 | 1,774,209 |
| Dick's Sporting Goods, Inc. | 4,769 | 592,358 |
| Dollar Tree, Inc. * | 17,583 | 1,894,744 |
| DoorDash, Inc., Class A * | 10,941 | 2,131,307 |
| Etsy, Inc. * | 9,611 | 2,409,382 |
| Five Below, Inc. * | 4,180 | 824,714 |
| Floor & Decor Holdings, Inc., Class A * | 7,722 | 1,049,574 |
| Foot Locker, Inc. | 6,833 | 325,729 |
| GameStop Corp., Class A * | 4,873 | 894,244 |
| Genuine Parts Co. | 10,722 | 1,405,761 |
| Kohl's Corp. | 11,875 | 576,294 |
| Leslie's, Inc. * | 10,077 | 208,392 |
| Lithia Motors, Inc. | 2,231 | 712,180 |
| LKQ Corp. * | 20,642 | 1,136,961 |
| Nordstrom, Inc. * | 8,375 | 240,614 |
| Ollie's Bargain Outlet Holdings, Inc. * | 4,966 | 336,000 |
| O'Reilly Automotive, Inc. * | 5,175 | 3,220,506 |
| Penske Automotive Group, Inc. | 2,406 | 255,156 |
| Petco Health & Wellness Co., Inc. * | 4,195 | 103,742 |
| Pool Corp. | 2,954 | 1,521,783 |
| Qurate Retail, Inc., Class A | 28,323 | 295,692 |
| RH * | 1,302 | 858,838 |
| The Gap, Inc. | 15,224 | 345,433 |
| Tractor Supply Co. | 8,727 | 1,895,243 |
| Ulta Beauty, Inc. * | 4,037 | 1,483,032 |
| Victoria's Secret & Co. * | 5,851 | 295,300 |
| Vroom, Inc. * | 8,734 | 167,081 |
| Wayfair, Inc., Class A * | 5,718 | 1,424,354 |
| Williams-Sonoma, Inc. | 5,682 | 1,055,318 |
| 40,568,809 | ||
| Semiconductors & Semiconductor Equipment 3.1% | ||
| Allegro MicroSystems, Inc. * | 3,034 | 101,214 |
| Brooks Automation, Inc. | 5,562 | 647,695 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Cirrus Logic, Inc. * | 4,398 | 355,402 |
| Enphase Energy, Inc. * | 10,008 | 2,318,153 |
| Entegris, Inc. | 10,213 | 1,437,786 |
| First Solar, Inc. * | 8,041 | 961,623 |
| Marvell Technology, Inc. | 62,174 | 4,258,919 |
| Microchip Technology, Inc. | 40,848 | 3,026,428 |
| MKS Instruments, Inc. | 4,193 | 629,160 |
| Monolithic Power Systems, Inc. | 3,401 | 1,787,090 |
| ON Semiconductor Corp. * | 32,125 | 1,544,249 |
| Qorvo, Inc. * | 8,413 | 1,415,319 |
| Skyworks Solutions, Inc. | 12,517 | 2,091,966 |
| Teradyne, Inc. | 12,610 | 1,743,207 |
| Universal Display Corp. | 3,290 | 602,728 |
| Wolfspeed, Inc. * | 8,749 | 1,050,842 |
| Xilinx, Inc. | 18,668 | 3,360,240 |
| 27,332,021 | ||
| Software & Services 12.0% | ||
| Akamai Technologies, Inc. * | 12,199 | 1,286,507 |
| Alliance Data Systems Corp. | 3,786 | 322,756 |
| Alteryx, Inc., Class A * | 4,452 | 325,842 |
| Amdocs Ltd. | 9,812 | 763,766 |
| Anaplan, Inc. * | 10,652 | 694,617 |
| ANSYS, Inc. * | 6,611 | 2,509,403 |
| Aspen Technology, Inc. * | 5,152 | 807,267 |
| Avalara, Inc. * | 6,426 | 1,154,367 |
| Bentley Systems, Inc., Class B | 10,482 | 620,010 |
| Bill.com Holdings, Inc. * | 5,994 | 1,764,094 |
| Black Knight, Inc. * | 11,530 | 808,368 |
| Broadridge Financial Solutions, Inc. | 8,775 | 1,565,548 |
| C3.ai, Inc., Class A * | 2,617 | 118,079 |
| Cadence Design Systems, Inc. * | 20,861 | 3,611,248 |
| CDK Global, Inc. | 9,271 | 403,474 |
| Ceridian HCM Holding, Inc. * | 9,799 | 1,227,325 |
| Citrix Systems, Inc. | 9,396 | 890,083 |
| Cloudflare, Inc., Class A * | 19,608 | 3,818,070 |
| Concentrix Corp. | 3,195 | 567,688 |
| Coupa Software, Inc. * | 5,552 | 1,264,190 |
| Crowdstrike Holdings, Inc., Class A * | 14,959 | 4,215,446 |
| Datadog, Inc., Class A * | 17,625 | 2,944,256 |
| Datto Holding Corp. * | 1,798 | 42,972 |
| DocuSign, Inc. * | 14,478 | 4,029,083 |
| Dolby Laboratories, Inc., Class A | 4,878 | 430,971 |
| DoubleVerify Holdings, Inc. * | 1,138 | 44,985 |
| Dropbox, Inc., Class A * | 23,125 | 705,081 |
| Duck Creek Technologies, Inc. * | 5,451 | 171,706 |
| DXC Technology Co. * | 19,047 | 620,361 |
| Dynatrace, Inc. * | 14,930 | 1,119,750 |
| Elastic N.V. * | 5,282 | 916,480 |
| EPAM Systems, Inc. * | 4,084 | 2,749,512 |
| Euronet Worldwide, Inc. * | 3,846 | 431,483 |
| Everbridge, Inc. * | 2,912 | 463,911 |
| Fair Isaac Corp. * | 2,087 | 831,043 |
| Fastly, Inc., Class A * | 8,038 | 406,803 |
| Five9, Inc. * | 5,066 | 800,479 |
| FleetCor Technologies, Inc. * | 6,187 | 1,530,726 |
| Fortinet, Inc. * | 10,165 | 3,418,896 |
| Gartner, Inc. * | 6,175 | 2,049,544 |
| Genpact Ltd. | 13,891 | 685,521 |
| Globant S.A. * | 3,066 | 978,637 |
| GoDaddy, Inc., Class A * | 12,737 | 881,018 |
| Guidewire Software, Inc. * | 6,364 | 800,146 |
| HubSpot, Inc. * | 3,382 | 2,740,198 |
| Jack Henry & Associates, Inc. | 5,602 | 932,621 |
| Jamf Holding Corp. * | 4,023 | 191,696 |
| Mandiant, Inc. * | 17,845 | 311,217 |
| Manhattan Associates, Inc. * | 4,801 | 871,574 |
140
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab U.S. Mid-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| McAfee Corp., Class A | 5,144 | 109,927 |
| MongoDB, Inc. * | 4,703 | 2,451,627 |
| N-Able, Inc. * | 3,056 | 40,645 |
| nCino, Inc. * | 4,237 | 307,860 |
| NCR Corp. * | 9,692 | 383,222 |
| New Relic, Inc. * | 3,895 | 316,118 |
| NortonLifeLock, Inc. | 41,704 | 1,061,367 |
| Nuance Communications, Inc. * | 21,624 | 1,190,401 |
| Nutanix, Inc., Class A * | 14,620 | 501,612 |
| Okta, Inc. * | 9,426 | 2,329,919 |
| Palantir Technologies, Inc., Class A * | 123,298 | 3,190,952 |
| Palo Alto Networks, Inc. * | 7,234 | 3,682,757 |
| Paychex, Inc. | 24,448 | 3,013,949 |
| Paycom Software, Inc. * | 3,848 | 2,108,127 |
| Paycor HCM, Inc. * | 2,434 | 78,959 |
| Paylocity Holding Corp. * | 2,843 | 867,513 |
| Paysafe Ltd * | 31,546 | 246,059 |
| Pegasystems, Inc. | 3,094 | 367,320 |
| Procore Technologies, Inc. * | 770 | 70,416 |
| PTC, Inc. * | 7,997 | 1,018,418 |
| RingCentral, Inc., Class A * | 6,097 | 1,486,327 |
| Sabre Corp. * | 23,988 | 248,995 |
| Shift4 Payments, Inc., Class A * | 3,249 | 205,109 |
| Smartsheet, Inc., Class A * | 9,117 | 629,164 |
| SolarWinds Corp. | 2,671 | 43,003 |
| Splunk, Inc. * | 12,432 | 2,049,042 |
| SS&C Technologies Holdings, Inc. | 17,007 | 1,351,546 |
| StoneCo Ltd., Class A * | 16,792 | 568,577 |
| Switch, Inc., Class A | 8,689 | 219,658 |
| Synopsys, Inc. * | 11,517 | 3,837,234 |
| Teradata Corp. * | 8,268 | 467,638 |
| The Trade Desk, Inc., Class A * | 32,516 | 2,435,774 |
| The Western Union Co. | 31,031 | 565,385 |
| Tyler Technologies, Inc. * | 3,055 | 1,659,537 |
| Unity Software, Inc. * | 11,294 | 1,708,895 |
| VeriSign, Inc. * | 7,483 | 1,666,240 |
| WEX, Inc. * | 3,392 | 507,782 |
| Wix.com Ltd. * | 4,045 | 752,208 |
| Zendesk, Inc. * | 9,027 | 918,949 |
| Zscaler, Inc. * | 5,866 | 1,870,433 |
| 107,367,482 | ||
| Technology Hardware & Equipment 4.1% | ||
| Amphenol Corp., Class A | 44,326 | 3,402,907 |
| Arista Networks, Inc. * | 4,569 | 1,871,874 |
| Arrow Electronics, Inc. * | 5,419 | 627,249 |
| Avnet, Inc. | 7,528 | 286,892 |
| CDW Corp. | 10,415 | 1,943,960 |
| Ciena Corp. * | 11,711 | 635,790 |
| Cognex Corp. | 12,970 | 1,136,042 |
| Coherent, Inc. * | 1,856 | 472,166 |
| CommScope Holding Co., Inc. * | 15,253 | 163,360 |
| Corning, Inc. | 57,753 | 2,054,274 |
| F5 Networks, Inc. * | 4,569 | 964,744 |
| Hewlett Packard Enterprise Co. | 98,644 | 1,445,135 |
| HP, Inc. | 91,234 | 2,767,127 |
| IPG Photonics Corp. * | 2,751 | 437,437 |
| Jabil, Inc. | 10,779 | 646,309 |
| Juniper Networks, Inc. | 24,627 | 726,989 |
| Keysight Technologies, Inc. * | 14,071 | 2,533,061 |
| Littelfuse, Inc. | 1,817 | 535,197 |
| Lumentum Holdings, Inc. * | 5,743 | 474,257 |
| Motorola Solutions, Inc. | 12,613 | 3,135,466 |
| National Instruments Corp. | 10,079 | 428,055 |
| NetApp, Inc. | 16,886 | 1,507,920 |
| Pure Storage, Inc., Class A * | 20,229 | 543,351 |
| SYNNEX Corp. | 3,168 | 332,640 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Teledyne Technologies, Inc. * | 3,486 | 1,565,981 |
| Trimble, Inc. * | 19,004 | 1,660,380 |
| Ubiquiti, Inc. | 499 | 152,459 |
| ViaSat, Inc. * | 5,257 | 313,790 |
| Vontier Corp. | 12,820 | 433,701 |
| Western Digital Corp. * | 23,290 | 1,217,834 |
| Xerox Holdings Corp. | 10,742 | 191,208 |
| Zebra Technologies Corp., Class A * | 4,040 | 2,157,158 |
| 36,764,713 | ||
| Telecommunication Services 0.1% | ||
| Lumen Technologies, Inc. | 83,529 | 990,654 |
| Transportation 2.3% | ||
| Alaska Air Group, Inc. * | 9,271 | 489,509 |
| AMERCO | 677 | 498,942 |
| American Airlines Group, Inc. * | 48,430 | 929,856 |
| C.H. Robinson Worldwide, Inc. | 10,016 | 971,452 |
| Copa Holdings S.A., Class A * | 2,387 | 176,543 |
| Delta Air Lines, Inc. * | 48,495 | 1,897,609 |
| Expeditors International of Washington, Inc. | 12,769 | 1,573,907 |
| GXO Logistics, Inc. * | 7,356 | 653,213 |
| JB Hunt Transport Services, Inc. | 6,379 | 1,257,875 |
| JetBlue Airways Corp. * | 24,090 | 337,983 |
| Kansas City Southern | 6,879 | 2,134,210 |
| Kirby Corp. * | 4,502 | 235,950 |
| Knight-Swift Transportation Holdings, Inc. | 12,208 | 692,071 |
| Landstar System, Inc. | 2,900 | 509,849 |
| Lyft, Inc., Class A * | 21,671 | 994,049 |
| Old Dominion Freight Line, Inc. | 7,760 | 2,648,876 |
| Ryder System, Inc. | 3,966 | 336,912 |
| Schneider National, Inc., Class B | 3,893 | 97,091 |
| Southwest Airlines Co. * | 44,837 | 2,119,893 |
| TuSimple Holdings, Inc., Class A * | 2,516 | 98,426 |
| United Airlines Holdings, Inc. * | 24,521 | 1,131,399 |
| XPO Logistics, Inc. * | 7,344 | 630,115 |
| 20,415,730 | ||
| Utilities 4.4% | ||
| Alliant Energy Corp. | 18,982 | 1,073,812 |
| Ameren Corp. | 19,322 | 1,628,651 |
| American Water Works Co., Inc. | 13,783 | 2,400,723 |
| Atmos Energy Corp. | 9,815 | 904,158 |
| Avangrid, Inc. | 4,345 | 228,982 |
| Brookfield Renewable Corp., Class A | 9,689 | 401,221 |
| CenterPoint Energy, Inc. | 45,031 | 1,172,607 |
| CMS Energy Corp. | 21,931 | 1,323,536 |
| Consolidated Edison, Inc. | 26,873 | 2,026,224 |
| DTE Energy Co. | 14,649 | 1,660,464 |
| Edison International | 28,304 | 1,781,171 |
| Entergy Corp. | 15,210 | 1,566,934 |
| Essential Utilities, Inc. | 16,994 | 799,908 |
| Evergy, Inc. | 17,351 | 1,106,126 |
| Eversource Energy | 26,055 | 2,212,069 |
| FirstEnergy Corp. | 41,290 | 1,590,904 |
| Hawaiian Electric Industries, Inc. | 8,010 | 324,886 |
| IDACORP, Inc. | 3,805 | 396,938 |
| MDU Resources Group, Inc. | 15,145 | 465,406 |
| National Fuel Gas Co. | 6,596 | 378,808 |
| NiSource, Inc. | 29,721 | 733,217 |
| NRG Energy, Inc. | 18,458 | 736,290 |
| OGE Energy Corp. | 15,152 | 516,229 |
| PG&E Corp. * | 114,612 | 1,329,499 |
| Pinnacle West Capital Corp. | 8,565 | 552,357 |
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Schwab U.S. Mid-Cap Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| PPL Corp. | 58,494 | 1,684,627 |
| Public Service Enterprise Group, Inc. | 38,289 | 2,442,838 |
| The AES Corp. | 50,127 | 1,259,692 |
| UGI Corp. | 15,793 | 685,574 |
| Vistra Corp. | 36,336 | 711,822 |
| WEC Energy Group, Inc. | 23,956 | 2,157,477 |
| Xcel Energy, Inc. | 40,873 | 2,639,987 |
| 38,893,137 | ||
| Total Common Stocks (Cost $629,697,400) | 884,662,715 | |
| INVESTMENT COMPANIES 0.1% OF NET ASSETS | ||
| Equity Funds 0.1% | ||
| iShares Russell Mid-Cap ETF (a) | 9,400 | 779,730 |
| Total Investment Companies (Cost $733,934) | 779,730 | |
| SHORT-TERM INVESTMENTS 1.0% OF NET ASSETS | ||
| Money Market Funds 1.0% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (b) | 7,004,684 | 7,004,684 |
| Wells Fargo Government Money Market Fund, Select Class 0.03% (b)(c) | 2,165,900 | 2,165,900 |
| 9,170,584 | ||
| Total Short-Term Investments (Cost $9,170,584) | 9,170,584 | |
| Total Investments in Securities (Cost $639,601,918) | 894,613,029 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| S&P 400 Mid-Cap Index, e-mini, expires 12/17/21 | 18 | 5,020,920 | 1 |
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $2,094,861. |
| (b) | The rate shown is the 7-day yield. |
| (c) | Security purchased with cash collateral received for securities on loan. |
| ETF — | Exchange traded fund |
| REIT — | Real Estate Investment Trust |
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $884,662,715 | $— | $— | $884,662,715 |
| Investment Companies1 | 779,730 | — | — | 779,730 |
| Short-Term Investments1 | 9,170,584 | — | — | 9,170,584 |
| Futures Contracts2 | 1 | — | — | 1 |
| Total | $894,613,030 | $— | $— | $894,613,030 |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at 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 underlying mutual funds and ETFs, which could be Level 1, Level 2 or Level 3.
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Schwab U.S. Mid-Cap Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $639,601,918) including securities on loan of $2,094,861 | $894,613,029 | |
| Cash | 271,320 | |
| Deposit with broker for futures contracts | 324,000 | |
| Receivables: | ||
| Fund shares sold | 1,706,981 | |
| Dividends | 293,107 | |
| Income from securities on loan | 1,615 | |
| Variation margin on future contracts | + | 1,580 |
| Total assets | 897,211,632 | |
| Liabilities | ||
| Collateral held for securities on loan | 2,165,900 | |
| Payables: | ||
| Investments bought | 4,051,836 | |
| Fund shares redeemed | 267,773 | |
| Investment adviser fees | + | 29,174 |
| Total liabilities | 6,514,683 | |
| Net assets | $890,696,949 | |
| Net Assets by Source | ||
| Capital received from investors | $626,651,339 | |
| Total distributable earnings | + | 264,045,610 |
| Net assets | $890,696,949 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $890,696,949 | 13,821,666 | $64.44 | ||
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Schwab U.S. Mid-Cap Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $1,749) | $8,721,367 | |
| Securities on loan, net | + | 30,207 |
| Total investment income | 8,751,574 | |
| Expenses | ||
| Investment adviser fees | + | 284,565 |
| Total expenses | – | 284,565 |
| Net investment income | 8,467,009 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 16,681,193 | |
| Net realized gains on futures contracts | + | 1,191,756 |
| Net realized gains | 17,872,949 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 208,363,004 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 107,775 |
| Net change in unrealized appreciation (depreciation) | + | 208,470,779 |
| Net realized and unrealized gains | 226,343,728 | |
| Increase in net assets resulting from operations | $234,810,737 | |
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Schwab U.S. Mid-Cap Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $8,467,009 | $7,639,807 | |
| Net realized gains (losses) | 17,872,949 | (9,791,653) | |
| Net change in unrealized appreciation (depreciation) | + | 208,470,779 | 20,394,860 |
| Increase in net assets from operations | $234,810,737 | $18,243,014 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($8,319,433) | ($9,582,557) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 5,533,289 | $322,845,672 | 7,486,752 | $310,557,071 | |
| Shares reinvested | 134,151 | 7,065,741 | 166,927 | 7,635,275 | |
| Shares redeemed | + | (2,583,256) | (148,682,619) | (4,967,958) | (200,471,749) |
| Net transactions in fund shares | 3,084,184 | $181,228,794 | 2,685,721 | $117,720,597 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 10,737,482 | $482,976,851 | 8,051,761 | $356,595,797 | |
| Total increase | + | 3,084,184 | 407,720,098 | 2,685,721 | 126,381,054 |
| End of period | 13,821,666 | $890,696,949 | 10,737,482 | $482,976,851 | |
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Schwab International Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $18.56 | $20.48 | $19.00 | $21.01 | $17.52 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.64 | 0.47 | 0.64 | 0.62 | 0.55 | |
| Net realized and unrealized gains (losses) | 5.66 | (1.75) | 1.39 | (2.06) | 3.49 | |
| Total from investment operations | 6.30 | (1.28) | 2.03 | (1.44) | 4.04 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.41) | (0.64) | (0.55) | (0.57) | (0.55) | |
| Net asset value at end of period | $24.45 | $18.56 | $20.48 | $19.00 | $21.01 | |
| Total return | 34.24% | (6.56%) | 11.27% | (7.11%) | 23.76% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.06% | 0.06% | 0.06% | 0.06% | 0.11% 2 | |
| Net operating expenses | N/A | N/A | N/A | N/A 3 | 0.10% 2 | |
| Net investment income (loss) | 2.76% | 2.47% | 3.32% | 2.99% | 2.88% | |
| Portfolio turnover rate | 3% | 7% | 5% | 5% | 3% | |
| Net assets, end of period (x 1,000,000) | $8,781 | $5,937 | $5,443 | $4,314 | $4,128 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 3 | Effective March 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
146
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Schwab International Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 98.5% OF NET ASSETS | ||
| Australia 7.0% | ||
| Afterpay Ltd. * | 109,564 | 10,149,941 |
| AGL Energy Ltd. | 357,994 | 1,543,895 |
| Ampol Ltd. | 115,943 | 2,681,908 |
| APA Group | 593,220 | 3,680,721 |
| Aristocrat Leisure Ltd. | 301,322 | 10,686,901 |
| ASX Ltd. | 98,220 | 6,176,838 |
| Aurizon Holdings Ltd. | 948,118 | 2,417,190 |
| AusNet Services Ltd. | 986,271 | 1,834,119 |
| Australia & New Zealand Banking Group Ltd. | 1,433,848 | 30,512,958 |
| BHP Group Ltd. | 1,488,993 | 40,898,144 |
| BlueScope Steel Ltd. | 253,220 | 3,956,842 |
| Brambles Ltd. | 736,816 | 5,589,996 |
| Cochlear Ltd. | 33,596 | 5,619,337 |
| Coles Group Ltd. | 674,224 | 8,737,253 |
| Commonwealth Bank of Australia | 894,656 | 70,912,400 |
| Computershare Ltd. | 271,107 | 3,857,682 |
| Crown Resorts Ltd. * | 208,944 | 1,575,020 |
| CSL Ltd. | 229,559 | 52,233,921 |
| Dexus | 527,908 | 4,330,314 |
| Domino's Pizza Enterprises Ltd. | 29,521 | 3,028,207 |
| Endeavour Group Ltd. | 655,364 | 3,367,567 |
| Evolution Mining Ltd. | 892,996 | 2,424,430 |
| Fortescue Metals Group Ltd. | 848,230 | 8,838,588 |
| Goodman Group | 840,492 | 13,915,925 |
| Insurance Australia Group Ltd. | 1,233,965 | 4,471,241 |
| James Hardie Industries plc | 226,052 | 8,880,725 |
| Lendlease Corp. Ltd. | 349,467 | 2,768,550 |
| Macquarie Group Ltd. (a) | 172,901 | 25,400,863 |
| Magellan Financial Group Ltd. | 71,415 | 1,878,649 |
| Medibank Pvt Ltd. | 1,395,180 | 3,506,268 |
| Mirvac Group | 1,972,168 | 4,208,931 |
| National Australia Bank Ltd. | 1,662,616 | 36,148,556 |
| Newcrest Mining Ltd. | 415,920 | 7,792,613 |
| Northern Star Resources Ltd. | 558,041 | 3,863,226 |
| Oil Search Ltd. | 1,025,832 | 3,323,288 |
| Orica Ltd. | 210,650 | 2,418,112 |
| Origin Energy Ltd. | 872,486 | 3,341,603 |
| Qantas Airways Ltd. * | 481,743 | 1,951,077 |
| QBE Insurance Group Ltd. | 747,141 | 6,689,475 |
| Ramsay Health Care Ltd. | 90,973 | 4,862,151 |
| REA Group Ltd. | 26,184 | 3,177,918 |
| Reece Ltd. | 154,892 | 2,348,665 |
| Rio Tinto Ltd. | 187,923 | 12,875,118 |
| Santos Ltd. | 932,423 | 4,896,217 |
| Scentre Group | 2,579,535 | 5,883,623 |
| SEEK Ltd. | 169,193 | 4,204,933 |
| Sonic Healthcare Ltd. | 226,481 | 6,872,446 |
| South32 Ltd. | 2,364,590 | 6,378,677 |
| Stockland | 1,226,336 | 4,227,107 |
| Suncorp Group Ltd. | 658,765 | 5,829,308 |
| Sydney Airport * | 664,155 | 4,118,715 |
| Tabcorp Holdings Ltd. | 1,135,007 | 4,273,702 |
| Telstra Corp. Ltd. | 2,119,118 | 6,125,263 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| The GPT Group | 949,805 | 3,708,082 |
| Transurban Group | 1,524,847 | 15,536,899 |
| Treasury Wine Estates Ltd. | 366,050 | 3,193,979 |
| Vicinity Centres | 2,008,544 | 2,623,126 |
| Washington H Soul Pattinson & Co., Ltd. | 114,075 | 2,809,290 |
| Wesfarmers Ltd. | 569,532 | 24,641,211 |
| Westpac Banking Corp. | 1,849,188 | 35,976,188 |
| WiseTech Global Ltd. | 73,112 | 2,849,453 |
| Woodside Petroleum Ltd. | 483,723 | 8,456,239 |
| Woolworths Group Ltd. | 641,741 | 18,485,229 |
| Xero Ltd * | 66,092 | 7,535,995 |
| 617,502,808 | ||
| Austria 0.2% | ||
| Erste Group Bank AG | 143,149 | 6,139,046 |
| OMV AG | 74,033 | 4,482,203 |
| Raiffeisen Bank International AG | 74,043 | 2,163,531 |
| Verbund AG | 33,678 | 3,510,670 |
| Voestalpine AG | 58,393 | 2,217,829 |
| 18,513,279 | ||
| Belgium 0.9% | ||
| Ageas S.A./N.V. | 87,242 | 4,244,122 |
| Anheuser-Busch InBev S.A./N.V. | 384,118 | 23,495,416 |
| Argenx SE * | 23,438 | 7,056,220 |
| Elia Group S.A./N.V. | 16,074 | 1,875,249 |
| Etablissements Franz Colruyt N.V. | 26,060 | 1,279,490 |
| Groupe Bruxelles Lambert S.A. | 56,556 | 6,562,259 |
| KBC Group N.V. | 126,099 | 11,742,714 |
| Proximus SADP | 81,555 | 1,535,808 |
| Sofina S.A. | 7,543 | 3,337,817 |
| Solvay S.A. | 37,386 | 4,444,152 |
| UCB S.A. | 63,852 | 7,631,951 |
| Umicore S.A. | 99,180 | 5,686,632 |
| 78,891,830 | ||
| Denmark 2.7% | ||
| Ambu A/S, Class B | 82,002 | 2,334,345 |
| AP Moller - Maersk A/S, Series A | 1,572 | 4,316,176 |
| AP Moller - Maersk A/S, Series B | 2,924 | 8,473,599 |
| Carlsberg A/S, Class B | 50,668 | 8,366,087 |
| Chr. Hansen Holding A/S | 53,932 | 4,291,093 |
| Coloplast A/S, Class B | 60,270 | 9,843,174 |
| Danske Bank A/S | 353,879 | 5,988,207 |
| Demant A/S * | 53,030 | 2,570,786 |
| DSV A/S | 101,834 | 23,667,973 |
| Genmab A/S * | 33,012 | 14,830,689 |
| GN Store Nord A/S | 62,367 | 3,789,868 |
| Novo Nordisk A/S, Class B | 849,556 | 93,157,943 |
| Novozymes A/S, Class B | 102,897 | 7,568,981 |
| Orsted A/S | 94,612 | 13,363,233 |
| Pandora A/S | 50,703 | 7,095,152 |
| Rockwool International A/S, B Shares | 4,397 | 2,010,816 |
147
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Schwab International Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Tryg A/S | 183,123 | 4,346,077 |
| Vestas Wind Systems A/S | 506,737 | 21,906,044 |
| 237,920,243 | ||
| Finland 1.0% | ||
| Elisa Oyj | 72,549 | 4,378,349 |
| Fortum Oyj | 222,709 | 6,623,380 |
| Kesko Oyj, B Shares | 141,046 | 4,590,269 |
| Kone Oyj, Class B | 172,152 | 11,740,604 |
| Neste Oyj | 211,456 | 11,772,139 |
| Nokia Oyj * | 2,717,076 | 15,594,670 |
| Orion Oyj, Class B | 52,870 | 2,289,461 |
| Sampo Oyj, A Shares | 251,323 | 13,360,662 |
| Stora Enso Oyj, R Shares | 289,867 | 4,823,247 |
| UPM-Kymmene Oyj | 267,417 | 9,437,393 |
| Wartsila Oyj Abp | 231,107 | 3,205,045 |
| 87,815,219 | ||
| France 11.4% | ||
| Accor S.A. * | 86,593 | 3,098,853 |
| Aeroports de Paris * | 14,660 | 1,956,001 |
| Air Liquide S.A. | 238,889 | 39,884,354 |
| Airbus SE * | 297,130 | 38,116,437 |
| Alstom S.A. | 161,067 | 5,740,072 |
| Amundi S.A. | 31,788 | 2,832,220 |
| ArcelorMittal S.A. | 362,508 | 12,260,069 |
| Arkema S.A. | 30,083 | 4,115,174 |
| Atos SE | 51,834 | 2,704,318 |
| AXA S.A. | 975,638 | 28,384,221 |
| BioMerieux | 21,387 | 2,724,031 |
| BNP Paribas S.A. | 566,437 | 37,915,713 |
| Bollore S.A. | 456,144 | 2,651,200 |
| Bouygues S.A. | 117,156 | 4,746,611 |
| Bureau Veritas S.A. | 146,354 | 4,651,865 |
| Capgemini SE | 80,679 | 18,811,344 |
| Carrefour S.A. | 314,308 | 5,690,186 |
| Cie de Saint-Gobain | 256,490 | 17,701,024 |
| CNP Assurances | 94,659 | 2,371,696 |
| Compagnie Generale des Etablissements Michelin S.C.A. | 85,777 | 13,485,640 |
| Covivio | 25,565 | 2,214,284 |
| Credit Agricole S.A. | 594,914 | 8,975,444 |
| Danone S.A. | 329,037 | 21,448,518 |
| Dassault Aviation S.A. | 12,150 | 1,269,722 |
| Dassault Systemes SE | 336,402 | 19,645,000 |
| Edenred | 124,873 | 6,757,028 |
| Eiffage S.A. | 43,713 | 4,499,168 |
| Electricite de France S.A. | 241,261 | 3,555,693 |
| Engie S.A. | 915,835 | 13,027,888 |
| EssilorLuxottica S.A. | 144,088 | 29,811,419 |
| Eurazeo SE | 20,990 | 1,967,472 |
| Eurofins Scientific SE | 66,763 | 7,879,030 |
| Faurecia SE | 59,822 | 3,124,383 |
| Gecina S.A. | 22,259 | 3,114,895 |
| Getlink SE | 225,858 | 3,476,208 |
| Hermes International | 15,977 | 25,370,114 |
| Ipsen S.A. | 19,571 | 2,025,478 |
| Kering S.A. | 37,849 | 28,406,981 |
| Klepierre S.A. * | 109,347 | 2,603,143 |
| La Francaise des Jeux SAEM | 49,350 | 2,562,519 |
| Legrand S.A. | 135,054 | 14,733,044 |
| L'Oreal S.A. | 127,155 | 58,167,656 |
| LVMH Moet Hennessy Louis Vuitton SE | 140,040 | 109,808,374 |
| Orange S.A. | 1,005,659 | 10,966,660 |
| Orpea S.A. | 25,844 | 2,699,509 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Pernod-Ricard S.A. | 105,664 | 24,309,070 |
| Publicis Groupe S.A. | 111,635 | 7,494,439 |
| Remy Cointreau S.A. | 11,559 | 2,335,028 |
| Renault S.A. * | 99,733 | 3,593,787 |
| Safran S.A. | 172,033 | 23,153,874 |
| Sanofi | 571,492 | 57,403,003 |
| Sartorius Stedim Biotech | 13,773 | 7,591,276 |
| Schneider Electric SE | 271,771 | 46,858,232 |
| SCOR SE | 83,411 | 2,808,042 |
| SEB S.A. | 13,572 | 2,126,587 |
| Societe Generale S.A. | 405,688 | 13,551,571 |
| Sodexo S.A. * | 43,759 | 4,257,281 |
| STMicroelectronics N.V. | 344,751 | 16,368,360 |
| Suez S.A. | 177,236 | 4,033,157 |
| Teleperformance | 29,437 | 12,296,178 |
| Thales S.A. | 53,101 | 4,900,080 |
| TotalEnergies SE | 1,260,182 | 63,103,550 |
| UbiSoft Entertainment S.A. * | 49,047 | 2,568,286 |
| Unibail-Rodamco-Westfield * | 62,736 | 4,479,645 |
| Valeo S.A. | 116,771 | 3,430,972 |
| Veolia Environnement S.A. | 332,241 | 10,850,649 |
| Vinci S.A. | 268,113 | 28,664,012 |
| Vivendi SE | 355,736 | 4,582,791 |
| Wendel SE | 13,353 | 1,778,747 |
| Worldline S.A. * | 120,071 | 7,002,078 |
| 997,491,354 | ||
| Germany 8.3% | ||
| adidas AG | 96,064 | 31,441,864 |
| Allianz SE | 207,803 | 48,254,006 |
| Aroundtown S.A. | 511,497 | 3,554,654 |
| BASF SE | 463,393 | 33,352,081 |
| Bayer AG | 495,819 | 27,943,195 |
| Bayerische Motoren Werke AG | 167,391 | 16,912,517 |
| Bechtle AG | 40,387 | 3,029,580 |
| Beiersdorf AG | 49,702 | 5,284,982 |
| Brenntag SE | 78,531 | 7,471,303 |
| Carl Zeiss Meditec AG, Class B | 21,053 | 4,239,868 |
| Commerzbank AG * | 504,378 | 3,683,411 |
| Continental AG * | 55,665 | 6,544,612 |
| Covestro AG | 96,893 | 6,204,893 |
| Daimler AG | 431,425 | 42,824,288 |
| Delivery Hero SE * | 81,585 | 10,175,690 |
| Deutsche Bank AG * | 1,045,302 | 13,427,226 |
| Deutsche Boerse AG | 95,830 | 15,908,456 |
| Deutsche Lufthansa AG * | 299,130 | 1,977,403 |
| Deutsche Post AG | 500,055 | 30,956,893 |
| Deutsche Telekom AG | 1,681,293 | 31,267,259 |
| E.ON SE | 1,137,805 | 14,427,139 |
| Evonik Industries AG | 107,674 | 3,488,724 |
| Fresenius Medical Care AG & Co. KGaA | 102,603 | 6,815,821 |
| Fresenius SE & Co. KGaA | 211,586 | 9,617,376 |
| GEA Group AG | 75,783 | 3,732,401 |
| Hannover Rueck SE | 30,050 | 5,486,645 |
| HeidelbergCement AG | 74,578 | 5,616,090 |
| HelloFresh SE * | 84,286 | 6,830,442 |
| Henkel AG & Co. KGaA | 51,743 | 4,321,176 |
| Infineon Technologies AG | 659,437 | 30,882,314 |
| KION Group AG | 35,590 | 3,887,451 |
| Knorr-Bremse AG | 36,146 | 3,814,921 |
| LANXESS AG | 43,683 | 2,943,464 |
| LEG Immobilien SE | 36,229 | 5,388,811 |
| Merck KGaA | 64,793 | 15,312,189 |
| MTU Aero Engines AG | 27,158 | 6,049,104 |
148
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Schwab International Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | 70,790 | 20,959,950 |
| Nemetschek SE | 29,220 | 3,354,941 |
| Puma SE | 52,694 | 6,536,682 |
| QIAGEN N.V. * | 116,216 | 6,393,511 |
| Rational AG | 2,675 | 2,655,063 |
| RWE AG | 324,143 | 12,476,800 |
| SAP SE | 526,661 | 76,266,352 |
| Scout24 AG | 45,386 | 3,160,955 |
| Siemens AG | 385,933 | 62,745,713 |
| Siemens Energy AG * | 200,124 | 5,743,675 |
| Siemens Healthineers AG | 140,765 | 9,361,706 |
| Symrise AG | 64,416 | 8,910,156 |
| Teamviewer AG * | 81,479 | 1,216,096 |
| Telefonica Deutschland Holding AG | 523,411 | 1,363,704 |
| Uniper SE | 45,650 | 2,018,032 |
| United Internet AG | 51,210 | 1,889,668 |
| Volkswagen AG | 16,181 | 5,260,408 |
| Vonovia SE | 275,994 | 16,742,567 |
| Zalando SE * | 111,295 | 10,515,214 |
| 730,639,442 | ||
| Hong Kong 2.9% | ||
| AIA Group Ltd. | 6,100,800 | 68,371,719 |
| BOC Hong Kong (Holdings) Ltd. | 1,845,090 | 5,846,803 |
| Budweiser Brewing Co. APAC Ltd. | 887,100 | 2,433,139 |
| Chow Tai Fook Jewellery Group Ltd. * | 971,200 | 1,980,859 |
| CK Asset Holdings Ltd. | 1,021,211 | 6,308,076 |
| CK Hutchison Holdings Ltd. | 1,356,025 | 9,091,361 |
| CK Infrastructure Holdings Ltd. | 320,500 | 1,932,292 |
| CLP Holdings Ltd. | 832,426 | 8,150,216 |
| ESR Cayman Ltd. * | 972,134 | 3,145,695 |
| Futu Holdings Ltd., ADR *(b) | 27,568 | 1,475,439 |
| Galaxy Entertainment Group Ltd. * | 1,081,000 | 5,816,560 |
| Hang Lung Properties Ltd. | 1,037,000 | 2,406,725 |
| Hang Seng Bank Ltd. | 388,840 | 7,389,099 |
| Henderson Land Development Co., Ltd. | 728,735 | 3,051,345 |
| HK Electric Investments & HK Electric Investments Ltd. | 1,480,604 | 1,474,800 |
| HKT Trust & HKT Ltd. | 1,991,000 | 2,701,852 |
| Hong Kong & China Gas Co., Ltd. | 5,667,696 | 8,804,940 |
| Hong Kong Exchanges & Clearing Ltd. | 607,565 | 36,600,752 |
| Hongkong Land Holdings Ltd. | 589,501 | 3,255,384 |
| Jardine Matheson Holdings Ltd. | 108,517 | 6,303,005 |
| Link REIT | 1,055,600 | 9,352,023 |
| Melco Resorts & Entertainment Ltd. ADR * | 106,083 | 1,148,879 |
| MTR Corp., Ltd. | 796,091 | 4,342,766 |
| New World Development Co., Ltd. | 743,778 | 3,226,084 |
| Power Assets Holdings Ltd. | 686,938 | 4,198,085 |
| Sands China Ltd. * | 1,218,000 | 2,776,034 |
| Sino Land Co., Ltd. | 1,619,806 | 2,129,048 |
| SITC International Holdings Co., Ltd. | 667,000 | 2,254,354 |
| SJM Holdings Ltd. * | 993,864 | 739,156 |
| Sun Hung Kai Properties Ltd. | 662,604 | 8,785,018 |
| Swire Pacific Ltd., A Shares | 248,590 | 1,562,783 |
| Swire Properties Ltd. | 553,200 | 1,483,111 |
| Techtronic Industries Co., Ltd. | 695,000 | 14,278,949 |
| WH Group Ltd. | 4,484,289 | 3,143,549 |
| Wharf Real Estate Investment Co., Ltd. | 828,188 | 4,677,819 |
| Wynn Macau Ltd. *(b) | 806,000 | 720,783 |
| Xinyi Glass Holdings Ltd. | 916,000 | 2,581,238 |
| 253,939,740 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Ireland 0.7% | ||
| CRH plc | 396,598 | 18,978,730 |
| Flutter Entertainment plc * | 84,121 | 15,924,655 |
| Kerry Group plc, Class A | 80,329 | 10,781,083 |
| Kingspan Group plc | 77,023 | 8,867,270 |
| Smurfit Kappa Group plc | 123,004 | 6,447,451 |
| 60,999,189 | ||
| Israel 0.6% | ||
| Azrieli Group Ltd. | 20,634 | 1,929,761 |
| Bank Hapoalim B.M. | 567,187 | 5,586,202 |
| Bank Leumi Le-Israel B.M. | 740,383 | 7,073,890 |
| Check Point Software Technologies Ltd. * | 55,607 | 6,650,597 |
| CyberArk Software Ltd. * | 19,757 | 3,558,433 |
| Elbit Systems Ltd. | 13,698 | 2,159,236 |
| ICL Group Ltd. | 353,641 | 3,030,702 |
| Israel Discount Bank Ltd., Class A * | 593,425 | 3,585,609 |
| Mizrahi Tefahot Bank Ltd. | 69,011 | 2,510,965 |
| Nice Ltd. * | 32,094 | 9,072,949 |
| Teva Pharmaceutical Industries Ltd. ADR * | 547,898 | 4,788,629 |
| Wix.com Ltd. * | 28,078 | 5,221,385 |
| 55,168,358 | ||
| Italy 2.5% | ||
| Amplifon S.p.A. | 62,725 | 3,191,965 |
| Assicurazioni Generali S.p.A. | 556,488 | 12,117,633 |
| Atlantia S.p.A. * | 251,635 | 4,863,696 |
| CNH Industrial N.V. | 513,833 | 8,851,061 |
| Davide Campari-Milano N.V. | 269,574 | 3,829,070 |
| DiaSorin S.p.A. | 13,118 | 2,965,507 |
| Enel S.p.A. | 4,095,899 | 34,289,975 |
| Eni S.p.A. | 1,272,861 | 18,243,204 |
| EXOR N.V. | 53,417 | 5,038,874 |
| Ferrari N.V. | 63,682 | 15,110,902 |
| FinecoBank Banca Fineco S.p.A. * | 309,225 | 5,905,514 |
| Infrastrutture Wireless Italiane S.p.A. | 176,791 | 1,953,205 |
| Intesa Sanpaolo S.p.A. | 8,308,692 | 23,614,765 |
| Mediobanca Banca di Credito Finanziario S.p.A. * | 313,320 | 3,738,761 |
| Moncler S.p.A. | 104,187 | 7,497,754 |
| Nexi S.p.A. * | 221,011 | 3,842,752 |
| Poste Italiane S.p.A | 267,668 | 3,822,788 |
| Prysmian S.p.A. | 128,937 | 4,874,987 |
| Recordati Industria Chimica e Farmaceutica S.p.A. | 54,635 | 3,423,261 |
| Snam S.p.A. | 1,006,721 | 5,701,855 |
| Stellantis N.V. | 1,023,224 | 20,428,103 |
| Telecom Italia S.p.A. | 5,280,338 | 1,883,759 |
| Tenaris S.A. | 228,286 | 2,542,258 |
| Terna - Rete Elettrica Nazionale | 716,064 | 5,335,245 |
| UniCredit S.p.A. | 1,074,039 | 14,198,194 |
| 217,265,088 | ||
| Japan 22.7% | ||
| ABC-Mart, Inc. | 17,380 | 835,352 |
| Acom Co., Ltd. | 199,800 | 666,358 |
| Advantest Corp. | 102,098 | 8,370,803 |
| Aeon Co., Ltd. | 326,400 | 7,508,713 |
| AGC, Inc. | 96,893 | 4,824,841 |
| Aisin Corp. | 72,000 | 2,634,679 |
| Ajinomoto Co., Inc. | 232,800 | 6,970,189 |
| ANA Holdings, Inc. * | 77,800 | 1,812,820 |
149
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Schwab International Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Asahi Group Holdings Ltd. | 229,200 | 10,401,152 |
| Asahi Intecc Co., Ltd. | 102,000 | 2,688,655 |
| Asahi Kasei Corp. | 624,000 | 6,555,338 |
| Astellas Pharma, Inc. | 942,750 | 15,893,604 |
| Azbil Corp. | 64,400 | 2,745,553 |
| Bandai Namco Holdings, Inc. | 101,100 | 7,725,915 |
| Bridgestone Corp. | 286,357 | 12,668,229 |
| Brother Industries Ltd. | 124,100 | 2,399,341 |
| Canon, Inc. | 506,495 | 11,517,377 |
| Capcom Co., Ltd. | 91,200 | 2,454,685 |
| Casio Computer Co., Ltd. | 94,300 | 1,334,449 |
| Central Japan Railway Co. | 72,800 | 10,799,192 |
| Chubu Electric Power Co., Inc. | 320,600 | 3,318,572 |
| Chugai Pharmaceutical Co., Ltd. | 336,500 | 12,581,520 |
| Concordia Financial Group Ltd. | 536,600 | 2,132,808 |
| Cosmos Pharmaceutical Corp. | 10,400 | 1,589,298 |
| CyberAgent, Inc. | 207,200 | 3,471,748 |
| Dai Nippon Printing Co., Ltd. | 115,448 | 2,860,232 |
| Daifuku Co., Ltd. | 51,030 | 4,697,791 |
| Dai-ichi Life Holdings, Inc. | 514,200 | 10,818,023 |
| Daiichi Sankyo Co., Ltd. | 881,400 | 22,239,808 |
| Daikin Industries Ltd. | 125,500 | 27,486,351 |
| Daito Trust Construction Co., Ltd. | 34,000 | 4,215,458 |
| Daiwa House Industry Co., Ltd. | 286,200 | 9,441,787 |
| Daiwa House REIT Investment Corp. | 1,133 | 3,251,294 |
| Daiwa Securities Group, Inc. | 742,100 | 4,169,229 |
| Denso Corp. | 218,600 | 15,847,440 |
| Dentsu Group, Inc. | 107,500 | 3,928,447 |
| Disco Corp. | 14,500 | 3,909,165 |
| East Japan Railway Co. | 153,060 | 9,533,566 |
| Eisai Co., Ltd. | 120,300 | 8,523,993 |
| ENEOS Holdings, Inc. | 1,533,200 | 6,182,245 |
| FANUC Corp. | 96,700 | 19,109,959 |
| Fast Retailing Co., Ltd. | 29,400 | 19,516,236 |
| Fuji Electric Co., Ltd. | 66,900 | 3,271,250 |
| FUJIFILM Holdings Corp. | 181,911 | 14,057,604 |
| Fujitsu Ltd. | 99,200 | 17,144,702 |
| GLP J-REIT | 2,111 | 3,443,166 |
| GMO Payment Gateway, Inc. | 20,100 | 2,546,594 |
| Hakuhodo DY Holdings, Inc. | 122,200 | 1,992,300 |
| Hamamatsu Photonics K.K. | 69,200 | 4,107,185 |
| Hankyu Hanshin Holdings, Inc. | 114,300 | 3,543,935 |
| Harmonic Drive Systems, Inc. | 21,707 | 984,015 |
| Hikari Tsushin, Inc. | 9,893 | 1,525,046 |
| Hino Motors Ltd. | 158,800 | 1,502,197 |
| Hirose Electric Co., Ltd. | 16,664 | 2,786,734 |
| Hisamitsu Pharmaceutical Co., Inc. | 26,100 | 890,443 |
| Hitachi Construction Machinery Co., Ltd. | 52,453 | 1,673,563 |
| Hitachi Ltd. | 487,315 | 28,081,302 |
| Hitachi Metals Ltd. * | 107,800 | 2,040,724 |
| Honda Motor Co., Ltd. | 820,639 | 24,272,748 |
| Hoshizaki Corp. | 26,500 | 2,228,410 |
| Hoya Corp. | 186,707 | 27,484,851 |
| Hulic Co., Ltd. | 189,600 | 1,823,098 |
| Ibiden Co., Ltd. | 53,600 | 3,220,605 |
| Idemitsu Kosan Co., Ltd. | 103,203 | 2,818,711 |
| Iida Group Holdings Co., Ltd. | 78,600 | 1,937,843 |
| Inpex Corp. | 531,100 | 4,429,013 |
| Isuzu Motors Ltd. | 299,600 | 4,030,458 |
| Ito En Ltd. | 27,100 | 1,805,015 |
| ITOCHU Corp. | 600,100 | 17,115,373 |
| Itochu Techno-Solutions Corp. | 50,787 | 1,604,324 |
| Japan Airlines Co., Ltd. * | 73,000 | 1,571,062 |
| Japan Exchange Group, Inc. | 252,900 | 5,988,181 |
| Japan Metropolitan Fund Invest | 3,606 | 3,312,180 |
| Japan Post Bank Co., Ltd. | 215,700 | 1,682,895 |
| Japan Post Holdings Co., Ltd. | 1,234,800 | 9,488,081 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Japan Post Insurance Co., Ltd. | 116,600 | 1,891,798 |
| Japan Real Estate Investment Corp. | 635 | 3,892,063 |
| Japan Tobacco, Inc. | 604,600 | 11,869,006 |
| JFE Holdings, Inc. | 241,600 | 3,691,754 |
| JSR Corp. | 102,300 | 3,710,375 |
| Kajima Corp. | 231,700 | 2,852,865 |
| Kakaku.com, Inc. | 69,600 | 2,309,670 |
| Kansai Paint Co., Ltd. | 88,000 | 2,037,727 |
| Kao Corp. | 242,619 | 13,724,479 |
| KDDI Corp. | 813,300 | 24,870,700 |
| Keio Corp. | 52,600 | 2,655,127 |
| Keisei Electric Railway Co., Ltd. | 67,356 | 2,167,570 |
| Keyence Corp. | 98,100 | 59,214,605 |
| Kikkoman Corp. | 73,577 | 6,017,867 |
| Kintetsu Group Holdings Co., Ltd. * | 85,900 | 2,703,961 |
| Kirin Holdings Co., Ltd. | 410,300 | 7,141,617 |
| Kobayashi Pharmaceutical Co., Ltd. | 28,300 | 2,265,868 |
| Kobe Bussan Co., Ltd. | 71,500 | 2,462,937 |
| Koei Tecmo Holdings Co., Ltd. | 30,700 | 1,429,030 |
| Koito Manufacturing Co., Ltd. | 52,700 | 2,990,101 |
| Komatsu Ltd. | 441,509 | 11,563,694 |
| Konami Holdings Corp. | 49,100 | 2,702,000 |
| Kose Corp. | 16,600 | 1,927,689 |
| Kubota Corp. | 518,900 | 11,054,124 |
| Kurita Water Industries Ltd. | 51,100 | 2,523,907 |
| Kyocera Corp. | 159,800 | 9,355,803 |
| Kyowa Kirin Co., Ltd. | 133,000 | 4,374,110 |
| Lasertec Corp. | 38,300 | 8,307,868 |
| Lawson, Inc. | 24,500 | 1,184,810 |
| Lion Corp. | 120,400 | 2,005,188 |
| Lixil Corp. | 132,387 | 3,401,005 |
| M3, Inc. | 222,700 | 13,123,775 |
| Makita Corp. | 112,600 | 5,225,983 |
| Marubeni Corp. | 783,400 | 6,647,399 |
| Mazda Motor Corp. * | 284,700 | 2,560,669 |
| McDonald's Holdings Co., Japan Ltd. | 38,400 | 1,716,156 |
| Medipal Holdings Corp. | 89,800 | 1,624,682 |
| MEIJI Holdings Co., Ltd. | 60,200 | 3,799,146 |
| Mercari, Inc. * | 53,196 | 2,878,405 |
| Minebea Mitsumi, Inc. | 186,300 | 4,716,562 |
| MISUMI Group, Inc. | 142,500 | 5,959,881 |
| Mitsubishi Chemical Holdings Corp. | 646,500 | 5,351,354 |
| Mitsubishi Corp. | 639,200 | 20,325,256 |
| Mitsubishi Electric Corp. | 916,800 | 12,312,104 |
| Mitsubishi Estate Co., Ltd. | 600,602 | 9,127,340 |
| Mitsubishi Gas Chemical Co., Inc. | 83,600 | 1,682,553 |
| Mitsubishi HC Capital, Inc. | 312,338 | 1,566,125 |
| Mitsubishi Heavy Industries Ltd. | 161,400 | 4,127,460 |
| Mitsubishi UFJ Financial Group, Inc. | 6,157,409 | 33,764,118 |
| Mitsui & Co., Ltd. | 765,900 | 17,527,247 |
| Mitsui Chemicals, Inc. | 90,300 | 2,684,965 |
| Mitsui Fudosan Co., Ltd. | 461,177 | 10,544,275 |
| Miura Co., Ltd. | 44,700 | 1,719,405 |
| Mizuho Financial Group, Inc. | 1,215,113 | 16,037,023 |
| MonotaRO Co., Ltd. | 121,600 | 2,771,478 |
| MS&AD Insurance Group Holdings, Inc. | 224,962 | 7,267,924 |
| Murata Manufacturing Co., Ltd. | 289,600 | 21,482,108 |
| Nabtesco Corp. | 56,300 | 1,827,136 |
| NEC Corp. | 123,500 | 6,323,448 |
| Nexon Co., Ltd. | 244,700 | 4,165,074 |
| NGK Insulators Ltd. | 131,600 | 2,191,291 |
| NH Foods Ltd. | 41,900 | 1,473,526 |
| Nidec Corp. | 225,600 | 24,986,966 |
| Nihon M&A Center Holdings, Inc. | 156,600 | 4,808,307 |
| Nintendo Co., Ltd. | 56,439 | 24,926,676 |
| Nippon Building Fund, Inc. | 766 | 4,976,659 |
| Nippon Express Co., Ltd. | 37,500 | 2,347,293 |
150
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Schwab International Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Nippon Paint Holdings Co., Ltd. | 357,100 | 3,820,910 |
| Nippon Prologis REIT, Inc. | 1,051 | 3,510,376 |
| Nippon Sanso Holdings Corp. | 75,900 | 1,791,890 |
| Nippon Shinyaku Co., Ltd. | 24,800 | 1,986,886 |
| Nippon Steel Corp. | 426,341 | 7,474,935 |
| Nippon Telegraph & Telephone Corp. | 649,012 | 18,184,624 |
| Nippon Yusen K.K. | 80,000 | 5,764,582 |
| Nissan Chemical Corp. | 60,200 | 3,350,649 |
| Nissan Motor Co., Ltd. * | 1,157,196 | 5,889,964 |
| Nisshin Seifun Group, Inc. | 96,300 | 1,520,635 |
| Nissin Foods Holdings Co., Ltd. | 31,700 | 2,423,143 |
| Nitori Holdings Co., Ltd. | 40,900 | 7,513,758 |
| Nitto Denko Corp. | 71,800 | 5,610,459 |
| Nomura Holdings, Inc. | 1,540,400 | 7,336,178 |
| Nomura Real Estate Holdings, Inc. | 59,300 | 1,445,697 |
| Nomura Real Estate Master Fund, Inc. | 2,124 | 3,180,618 |
| Nomura Research Institute Ltd. | 169,800 | 6,797,783 |
| NSK Ltd. | 188,900 | 1,269,305 |
| NTT Data Corp. | 318,600 | 6,391,376 |
| Obayashi Corp. | 320,000 | 2,701,515 |
| Obic Co., Ltd. | 35,200 | 6,509,311 |
| Odakyu Electric Railway Co., Ltd. | 146,700 | 3,180,370 |
| Oji Holdings Corp. | 403,800 | 2,001,531 |
| Olympus Corp. | 585,800 | 12,690,211 |
| Omron Corp. | 92,700 | 8,865,331 |
| Ono Pharmaceutical Co., Ltd. | 189,200 | 3,969,742 |
| Oracle Corp., Japan | 18,300 | 1,731,627 |
| Oriental Land Co., Ltd. | 101,400 | 16,015,084 |
| ORIX Corp. | 615,800 | 12,239,819 |
| Orix JREIT, Inc. | 1,354 | 2,246,428 |
| Osaka Gas Co., Ltd. | 185,200 | 2,985,049 |
| Otsuka Corp. | 55,800 | 2,748,513 |
| Otsuka Holdings Co., Ltd. | 200,000 | 7,909,850 |
| Pan Pacific International Holdings Corp. | 206,600 | 4,337,956 |
| Panasonic Corp. | 1,120,412 | 13,855,041 |
| PeptiDream, Inc. * | 47,400 | 1,145,762 |
| Persol Holdings Co., Ltd. | 93,400 | 2,510,465 |
| Pigeon Corp. | 59,100 | 1,368,530 |
| Pola Orbis Holdings, Inc. | 48,800 | 1,041,965 |
| Rakuten Group, Inc. | 446,620 | 4,889,607 |
| Recruit Holdings Co., Ltd. | 684,100 | 45,505,647 |
| Renesas Electronics Corp. * | 625,300 | 7,692,080 |
| Resona Holdings, Inc. | 1,059,985 | 3,981,938 |
| Ricoh Co., Ltd. | 335,900 | 3,270,939 |
| Rinnai Corp. | 17,500 | 1,796,768 |
| Rohm Co., Ltd. | 44,600 | 4,078,114 |
| Ryohin Keikaku Co., Ltd. | 125,902 | 2,481,055 |
| Santen Pharmaceutical Co., Ltd. | 177,300 | 2,499,035 |
| SBI Holdings, Inc. | 119,290 | 3,091,933 |
| SCSK Corp. | 82,800 | 1,675,630 |
| Secom Co., Ltd. | 107,800 | 7,348,991 |
| Seiko Epson Corp. | 139,000 | 2,475,043 |
| Sekisui Chemical Co., Ltd. | 186,600 | 3,065,600 |
| Sekisui House Ltd. | 307,200 | 6,386,925 |
| Seven & i Holdings Co., Ltd. | 379,903 | 15,950,138 |
| SG Holdings Co., Ltd. | 163,428 | 4,103,854 |
| Sharp Corp. | 112,100 | 1,322,241 |
| Shimadzu Corp. | 123,100 | 5,001,211 |
| Shimano, Inc. | 37,500 | 10,463,003 |
| Shimizu Corp. | 277,300 | 2,031,733 |
| Shin-Etsu Chemical Co., Ltd. | 178,760 | 31,878,813 |
| Shionogi & Co., Ltd. | 134,200 | 8,749,874 |
| Shiseido Co., Ltd. | 202,000 | 13,478,839 |
| SMC Corp. | 28,900 | 17,246,510 |
| Softbank Corp. | 1,448,800 | 19,775,651 |
| SoftBank Group Corp. | 608,100 | 32,920,929 |
| Sohgo Security Services Co., Ltd. | 34,800 | 1,488,872 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Sompo Holdings, Inc. | 162,500 | 7,047,111 |
| Sony Group Corp. | 636,000 | 73,646,438 |
| Square Enix Holdings Co., Ltd. | 41,900 | 2,295,284 |
| Stanley Electric Co., Ltd. | 66,247 | 1,669,768 |
| Subaru Corp. | 310,100 | 6,082,545 |
| Sumco Corp. | 167,000 | 3,191,138 |
| Sumitomo Chemical Co., Ltd. | 734,800 | 3,619,856 |
| Sumitomo Corp. | 559,400 | 7,971,260 |
| Sumitomo Dainippon Pharma Co., Ltd. | 98,500 | 1,392,943 |
| Sumitomo Electric Industries Ltd. | 378,900 | 5,029,088 |
| Sumitomo Metal Mining Co., Ltd. | 123,900 | 4,806,364 |
| Sumitomo Mitsui Financial Group, Inc. | 660,146 | 21,421,496 |
| Sumitomo Mitsui Trust Holdings, Inc. | 170,700 | 5,614,977 |
| Sumitomo Realty & Development Co., Ltd. | 156,400 | 5,652,282 |
| Suntory Beverage & Food Ltd. | 70,100 | 2,720,049 |
| Suzuki Motor Corp. | 185,400 | 8,268,258 |
| Sysmex Corp. | 85,000 | 10,539,218 |
| T&D Holdings, Inc. | 270,800 | 3,473,188 |
| Taisei Corp. | 96,800 | 3,037,500 |
| Taisho Pharmaceutical Holdings Co., Ltd. | 20,300 | 1,089,319 |
| Takeda Pharmaceutical Co., Ltd. | 795,490 | 22,326,072 |
| TDK Corp. | 194,400 | 7,067,021 |
| Terumo Corp. | 324,700 | 14,324,394 |
| The Chiba Bank Ltd. | 257,900 | 1,598,519 |
| The Kansai Electric Power Co., Inc. | 365,900 | 3,368,881 |
| The Shizuoka Bank Ltd. | 219,900 | 1,770,719 |
| THK Co., Ltd. | 61,542 | 1,323,376 |
| TIS, Inc. | 110,500 | 3,010,337 |
| Tobu Railway Co., Ltd. | 96,700 | 2,407,600 |
| Toho Co., Ltd. | 57,208 | 2,687,869 |
| Toho Gas Co., Ltd. | 38,460 | 1,139,279 |
| Tohoku Electric Power Co., Inc. | 226,600 | 1,470,211 |
| Tokio Marine Holdings, Inc. | 315,899 | 16,638,398 |
| Tokyo Century Corp. | 18,077 | 1,035,014 |
| Tokyo Electric Power Co. Holdings, Inc. * | 746,390 | 2,067,502 |
| Tokyo Electron Ltd. | 75,300 | 35,092,277 |
| Tokyo Gas Co., Ltd. | 191,240 | 3,318,575 |
| Tokyu Corp. | 254,000 | 3,580,944 |
| Toppan, Inc. | 136,300 | 2,200,172 |
| Toray Industries, Inc. | 714,600 | 4,453,041 |
| Toshiba Corp. | 208,017 | 8,972,218 |
| Tosoh Corp. | 133,700 | 2,251,644 |
| TOTO Ltd. | 71,300 | 3,444,809 |
| Toyo Suisan Kaisha Ltd. | 43,600 | 1,878,685 |
| Toyota Industries Corp. | 75,100 | 6,384,445 |
| Toyota Motor Corp. | 5,347,815 | 94,357,676 |
| Toyota Tsusho Corp. | 109,869 | 4,765,697 |
| Trend Micro, Inc. | 69,000 | 3,899,905 |
| Tsuruha Holdings, Inc. | 19,400 | 2,392,896 |
| Unicharm Corp. | 204,800 | 8,282,685 |
| United Urban Investment Corp. | 1,428 | 1,780,086 |
| USS Co., Ltd. | 112,500 | 1,813,308 |
| Welcia Holdings Co., Ltd. | 48,800 | 1,821,773 |
| West Japan Railway Co. | 110,732 | 5,227,176 |
| Yakult Honsha Co., Ltd. | 62,800 | 3,173,169 |
| Yamada Holdings Co., Ltd. | 344,200 | 1,315,291 |
| Yamaha Corp. | 66,100 | 4,176,071 |
| Yamaha Motor Co., Ltd. | 151,500 | 4,222,881 |
| Yamato Holdings Co., Ltd. | 145,700 | 3,581,771 |
| Yaskawa Electric Corp. | 118,500 | 5,132,479 |
| Yokogawa Electric Corp. | 119,000 | 2,377,886 |
151
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See financial notes
Schwab International Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Z Holdings Corp. | 1,333,900 | 8,280,875 |
| ZOZO, Inc. | 61,100 | 1,961,221 |
| 1,997,816,681 | ||
| Netherlands 5.0% | ||
| ABN AMRO Bank N.V. CVA | 221,732 | 3,261,170 |
| Adyen N.V. * | 9,970 | 30,082,572 |
| Aegon N.V. | 921,549 | 4,674,362 |
| Akzo Nobel N.V. | 96,981 | 11,144,764 |
| ASM International N.V. | 23,628 | 10,693,669 |
| ASML Holding N.V. | 211,647 | 172,047,762 |
| Coca-Cola Europacific Partners plc | 103,974 | 5,474,231 |
| Heineken Holding N.V. | 57,386 | 5,318,249 |
| Heineken N.V. | 129,961 | 14,385,258 |
| ING Groep N.V. | 1,966,489 | 29,829,479 |
| InPost S.A. * | 97,365 | 1,390,156 |
| JDE Peet's N.V. | 37,481 | 1,091,404 |
| Just Eat Takeaway.com N.V * | 91,828 | 6,596,489 |
| Koninklijke Ahold Delhaize N.V. | 526,624 | 17,132,371 |
| Koninklijke DSM N.V. | 88,350 | 19,302,547 |
| Koninklijke KPN N.V. | 1,683,669 | 5,030,691 |
| Koninklijke Philips N.V. | 459,735 | 21,688,076 |
| Koninklijke Vopak N.V. | 35,769 | 1,423,531 |
| NN Group N.V. | 133,586 | 7,141,075 |
| Prosus N.V. * | 470,209 | 41,417,410 |
| Randstad N.V. | 59,428 | 4,269,747 |
| Universal Music Group NV | 363,777 | 10,561,515 |
| Wolters Kluwer N.V. | 135,828 | 14,223,694 |
| 438,180,222 | ||
| New Zealand 0.2% | ||
| Auckland International Airport Ltd. * | 650,383 | 3,727,917 |
| Fisher & Paykel Healthcare Corp., Ltd. | 289,780 | 6,492,087 |
| Mercury NZ Ltd. | 327,399 | 1,439,854 |
| Meridian Energy Ltd. | 668,072 | 2,393,230 |
| Ryman Healthcare Ltd. | 216,390 | 2,239,468 |
| Spark New Zealand Ltd. | 898,471 | 2,941,300 |
| The a2 Milk Co., Ltd. * | 390,775 | 1,840,725 |
| 21,074,581 | ||
| Norway 0.7% | ||
| Adevinta A.S.A. * | 143,473 | 2,369,922 |
| Dnb Bank Asa | 470,115 | 11,187,173 |
| Equinor A.S.A. | 491,694 | 12,458,704 |
| Gjensidige Forsikring A.S.A. | 101,362 | 2,523,776 |
| Mowi A.S.A. | 223,338 | 6,476,170 |
| Norsk Hydro A.S.A. | 672,147 | 4,937,233 |
| Orkla A.S.A. | 379,827 | 3,694,352 |
| Schibsted A.S.A., A Shares | 39,224 | 2,026,514 |
| Schibsted A.S.A., B Shares | 47,409 | 2,140,389 |
| Telenor A.S.A. | 343,366 | 5,425,356 |
| Yara International A.S.A. | 88,176 | 4,608,330 |
| 57,847,919 | ||
| Portugal 0.2% | ||
| Banco Espirito Santo S.A. *(a) | 470,491 | 0 |
| EDP - Energias de Portugal S.A. | 1,409,027 | 7,950,632 |
| EDP Renovaveis S.A. | 141,975 | 3,955,366 |
| Galp Energia, SGPS, S.A. | 256,928 | 2,668,953 |
| Jeronimo Martins, SGPS, S.A. | 126,838 | 2,873,845 |
| 17,448,796 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Singapore 1.2% | ||
| Ascendas Real Estate Investment Trust | 1,671,295 | 3,827,986 |
| CapitaLand Integrated Commercial Trust | 2,416,610 | 3,848,343 |
| Capitaland Investment Ltd. * | 1,356,214 | 3,459,678 |
| City Developments Ltd. | 230,800 | 1,252,888 |
| DBS Group Holdings Ltd. | 913,693 | 21,351,047 |
| Genting Singapore Ltd. | 3,265,700 | 1,888,236 |
| Keppel Corp., Ltd. | 724,600 | 2,891,580 |
| Mapletree Commercial Trust | 1,018,600 | 1,647,608 |
| Mapletree Logistics Trust | 1,513,914 | 2,270,165 |
| Oversea-Chinese Banking Corp., Ltd. | 1,695,701 | 14,823,524 |
| Sea Ltd. ADR * | 34,500 | 11,853,165 |
| Singapore Airlines Ltd. * | 671,850 | 2,587,999 |
| Singapore Exchange Ltd. | 392,700 | 2,818,294 |
| Singapore Technologies Engineering Ltd. | 786,249 | 2,232,810 |
| Singapore Telecommunications Ltd. | 4,132,137 | 7,666,087 |
| United Overseas Bank Ltd. | 596,533 | 11,858,082 |
| UOL Group Ltd. | 235,272 | 1,261,864 |
| Venture Corp., Ltd. | 133,300 | 1,861,975 |
| Wilmar International Ltd. | 967,934 | 3,094,623 |
| 102,495,954 | ||
| Spain 2.4% | ||
| ACS Actividades de Construccion y Servicios S.A. | 127,279 | 3,335,934 |
| Aena SME S.A. * | 37,345 | 6,133,412 |
| Amadeus IT Group S.A. * | 227,597 | 15,225,754 |
| Banco Bilbao Vizcaya Argentaria S.A. | 3,360,160 | 23,514,823 |
| Banco Santander S.A. | 8,733,870 | 33,128,293 |
| CaixaBank S.A. | 2,212,679 | 6,360,709 |
| Cellnex Telecom S.A. | 256,702 | 15,787,091 |
| Enagas S.A. | 131,202 | 2,944,103 |
| Endesa S.A. | 165,414 | 3,814,895 |
| Ferrovial S.A. | 237,041 | 7,482,922 |
| Grifols S.A. | 149,867 | 3,429,409 |
| Iberdrola S.A. | 2,984,240 | 35,239,513 |
| Industria de Diseno Textil S.A. | 551,431 | 19,975,164 |
| Naturgy Energy Group S.A. (b) | 97,375 | 2,558,614 |
| Red Electrica Corp. S.A. | 216,179 | 4,501,224 |
| Repsol S.A. | 733,794 | 9,398,824 |
| Siemens Gamesa Renewable Energy S.A. * | 116,240 | 3,154,241 |
| Telefonica S.A. | 2,586,507 | 11,234,902 |
| 207,219,827 | ||
| Sweden 3.7% | ||
| Alfa Laval AB | 157,799 | 6,768,758 |
| Assa Abloy AB, B Shares | 507,488 | 14,891,044 |
| Atlas Copco AB, A Shares | 339,402 | 21,857,042 |
| Atlas Copco AB, B Shares | 197,121 | 10,682,738 |
| Boliden AB | 137,166 | 4,835,678 |
| Electrolux AB, B Shares | 110,550 | 2,508,872 |
| Embracer Group AB * | 229,078 | 2,136,530 |
| Epiroc AB, A Shares | 331,803 | 8,255,746 |
| Epiroc AB, B Shares | 198,521 | 4,217,349 |
| EQT AB | 146,998 | 7,764,414 |
| Essity AB, B Shares | 308,819 | 10,003,166 |
| Evolution AB | 85,985 | 13,958,960 |
| Fastighets AB Balder, B Shares * | 51,228 | 3,714,438 |
| H & M Hennes & Mauritz AB, B Shares (b) | 373,868 | 7,033,514 |
| Hexagon AB, B Shares | 996,586 | 16,038,752 |
| Husqvarna AB, B Shares | 215,297 | 3,068,179 |
152
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Schwab International Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| ICA Gruppen AB | 53,133 | 2,746,979 |
| Industrivarden AB, A Shares | 65,191 | 2,150,535 |
| Industrivarden AB, C Shares | 82,193 | 2,673,621 |
| Investment AB Latour, B Shares | 74,723 | 2,714,193 |
| Investor AB, B Shares | 916,102 | 21,138,067 |
| Kinnevik AB, B Shares * | 121,154 | 4,755,393 |
| LE Lundbergfortagen AB, B Shares | 38,219 | 2,203,448 |
| Lundin Energy AB | 102,699 | 4,055,934 |
| Nibe Industrier AB, B Shares | 712,335 | 10,595,034 |
| Nordea Bank Abp | 1,639,425 | 20,077,739 |
| Sandvik AB | 570,022 | 14,455,021 |
| Securitas AB, B Shares | 153,399 | 2,541,312 |
| Sinch AB * | 253,616 | 4,827,523 |
| Skandinaviska Enskilda Banken AB, A Shares | 819,995 | 12,822,940 |
| Skanska AB, B Shares | 172,370 | 4,382,660 |
| SKF AB, B Shares | 193,848 | 4,502,156 |
| Svenska Cellulosa AB, S.C.A., B Shares | 299,272 | 4,676,143 |
| Svenska Handelsbanken AB, A Shares | 727,399 | 8,337,691 |
| Swedbank AB, A Shares | 459,535 | 9,966,716 |
| Swedish Match Ab | 796,225 | 7,020,473 |
| Tele2 AB, B Shares | 249,139 | 3,521,171 |
| Telefonaktiebolaget LM Ericsson, B Shares | 1,472,054 | 16,068,066 |
| Telia Co. AB | 1,335,396 | 5,259,918 |
| Volvo AB, A Shares | 102,412 | 2,421,135 |
| Volvo AB, B Shares | 721,443 | 16,823,438 |
| 328,472,486 | ||
| Switzerland 9.8% | ||
| ABB Ltd. | 876,596 | 29,000,621 |
| Adecco Group AG | 76,141 | 3,835,986 |
| Alcon, Inc. | 250,993 | 20,811,967 |
| Baloise Holding AG | 22,837 | 3,639,306 |
| Banque Cantonale Vaudoise | 16,333 | 1,315,008 |
| Barry Callebaut AG | 1,775 | 4,110,640 |
| Chocoladefabriken Lindt & Spruengli AG | 54 | 6,481,651 |
| Chocoladefabriken Lindt & Spruengli AG - Participation Certificates | 536 | 6,316,558 |
| Cie Financiere Richemont S.A. | 263,780 | 32,642,874 |
| Clariant AG * | 106,213 | 2,236,052 |
| Credit Suisse Group AG | 1,292,939 | 13,448,771 |
| EMS-Chemie Holding AG | 3,451 | 3,423,131 |
| Geberit AG | 18,676 | 14,585,070 |
| Givaudan S.A. | 4,656 | 21,938,773 |
| Holcim Ltd. * | 264,566 | 13,197,229 |
| Julius Baer Group Ltd. | 113,210 | 8,188,715 |
| Kuehne + Nagel International AG | 27,776 | 8,748,063 |
| Logitech International S.A. | 86,371 | 7,225,189 |
| Lonza Group AG | 37,594 | 30,894,765 |
| Nestle S.A. | 1,453,678 | 191,750,558 |
| Novartis AG | 1,120,171 | 92,652,371 |
| Partners Group Holding AG | 11,460 | 20,020,095 |
| Roche Holding AG | 354,458 | 137,314,889 |
| Roche Holding AG - Bearer Shares | 16,074 | 6,913,797 |
| Schindler Holding AG | 10,545 | 2,707,183 |
| Schindler Holding AG - Participation Certificates | 20,157 | 5,248,631 |
| SGS S.A. | 3,077 | 9,109,517 |
| Sika AG | 71,581 | 24,250,184 |
| Sonova Holding AG | 27,365 | 11,339,277 |
| Straumann Holding AG | 5,231 | 10,889,357 |
| Swiss Life Holding AG | 15,964 | 8,757,312 |
| Swiss Prime Site AG | 39,292 | 3,994,672 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Swiss Re AG | 151,273 | 14,654,648 |
| Swisscom AG | 13,104 | 7,135,447 |
| Temenos AG | 34,078 | 5,217,222 |
| The Swatch Group AG | 24,720 | 1,315,085 |
| The Swatch Group AG - Bearer Shares | 14,537 | 4,001,230 |
| UBS Group AG | 1,847,249 | 33,624,879 |
| Vifor Pharma AG | 25,129 | 3,244,801 |
| Zurich Insurance Group AG | 75,835 | 33,611,630 |
| 859,793,154 | ||
| United Kingdom 14.4% | ||
| 3i Group plc | 486,044 | 9,076,881 |
| abrdn plc | 1,116,507 | 3,881,087 |
| Admiral Group plc | 99,336 | 3,902,132 |
| Anglo American plc | 653,787 | 24,872,034 |
| Antofagasta plc | 204,223 | 3,983,418 |
| Ashtead Group plc | 226,603 | 18,991,627 |
| Associated British Foods plc | 178,664 | 4,369,382 |
| AstraZeneca plc | 781,189 | 97,727,763 |
| Auto Trader Group plc | 481,803 | 3,994,357 |
| AVEVA Group plc | 59,040 | 2,875,006 |
| Aviva plc | 1,976,862 | 10,666,982 |
| BAE Systems plc | 1,642,606 | 12,385,515 |
| Barclays plc | 8,557,001 | 23,612,814 |
| Barratt Developments plc | 518,490 | 4,706,890 |
| Berkeley Group Holdings plc | 55,544 | 3,313,122 |
| BHP Group plc | 1,067,555 | 28,195,805 |
| BP plc | 10,213,239 | 48,930,612 |
| British American Tobacco plc | 1,099,167 | 38,233,883 |
| BT Group plc * | 4,499,268 | 8,547,840 |
| Bunzl plc | 174,074 | 6,433,790 |
| Burberry Group plc | 202,229 | 5,344,724 |
| Coca-Cola HBC AG * | 101,567 | 3,520,331 |
| Compass Group plc * | 895,232 | 18,997,395 |
| Croda International plc | 69,797 | 9,033,863 |
| DCC plc | 50,200 | 4,188,706 |
| Diageo plc | 1,179,391 | 58,676,694 |
| Direct Line Insurance Group plc | 678,602 | 2,712,306 |
| Entain plc * | 296,161 | 8,298,767 |
| Evraz plc | 260,036 | 2,208,745 |
| Experian plc | 465,406 | 21,339,422 |
| Ferguson plc | 112,305 | 16,897,795 |
| GlaxoSmithKline plc | 2,536,341 | 52,656,543 |
| Glencore plc * | 5,049,913 | 25,252,495 |
| Halma plc | 194,620 | 7,892,482 |
| Hargreaves Lansdown plc | 182,680 | 3,844,127 |
| Hikma Pharmaceuticals plc | 84,141 | 2,773,447 |
| HSBC Holdings plc | 10,295,658 | 62,033,108 |
| Imperial Brands plc | 472,890 | 9,978,534 |
| Informa plc * | 765,170 | 5,443,372 |
| InterContinental Hotels Group plc * | 91,088 | 6,380,452 |
| Intertek Group plc | 80,397 | 5,384,019 |
| J. Sainsbury plc | 851,782 | 3,488,779 |
| JD Sports Fashion plc | 253,281 | 3,775,124 |
| Johnson Matthey plc | 100,741 | 3,765,248 |
| Kingfisher plc | 1,058,893 | 4,859,886 |
| Land Securities Group plc | 361,040 | 3,391,782 |
| Legal & General Group plc | 3,014,216 | 11,887,413 |
| Lloyds Banking Group plc | 35,873,915 | 24,551,416 |
| London Stock Exchange Group plc | 165,961 | 16,155,266 |
| M&G plc | 1,358,445 | 3,711,407 |
| Melrose Industries plc | 2,232,592 | 4,816,917 |
| Mondi plc | 249,210 | 6,223,709 |
| National Grid plc | 1,782,872 | 22,827,110 |
| Natwest Group plc | 2,924,786 | 8,818,740 |
| Next plc | 67,458 | 7,352,208 |
| NMC Health plc *(a) | 48,950 | 11,429 |
153
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab International Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Ocado Group plc * | 247,104 | 6,098,674 |
| Pearson plc | 382,350 | 3,146,215 |
| Persimmon plc | 157,425 | 5,865,387 |
| Phoenix Group Holdings plc | 336,656 | 3,022,675 |
| Prudential plc | 1,320,813 | 26,955,089 |
| Reckitt Benckiser Group plc | 359,295 | 29,168,573 |
| RELX plc | 977,814 | 30,319,451 |
| Rentokil Initial plc | 947,714 | 7,628,096 |
| Rio Tinto plc | 565,540 | 35,262,247 |
| Rolls-Royce Holdings plc * | 4,217,775 | 7,612,406 |
| Royal Dutch Shell plc, A Shares | 2,073,236 | 47,495,504 |
| Royal Dutch Shell plc, B Shares | 1,865,794 | 42,817,587 |
| Schroders plc | 63,460 | 3,143,415 |
| Segro plc | 597,147 | 10,554,301 |
| Severn Trent plc | 122,489 | 4,587,489 |
| Smith & Nephew plc | 446,170 | 7,705,386 |
| Smiths Group plc | 195,480 | 3,629,682 |
| Spirax-Sarco Engineering plc | 37,683 | 8,044,169 |
| SSE plc | 526,885 | 11,865,236 |
| St. James's Place plc | 276,945 | 5,982,797 |
| Standard Chartered plc | 1,325,242 | 8,962,611 |
| Taylor Wimpey plc | 1,901,250 | 4,022,683 |
| Tesco plc | 3,915,465 | 14,456,940 |
| The British Land Co., plc | 448,543 | 3,028,550 |
| The Sage Group plc | 537,645 | 5,228,876 |
| Unilever plc | 1,321,277 | 70,743,653 |
| United Utilities Group plc | 350,356 | 4,979,658 |
| Vodafone Group plc | 14,078,504 | 20,749,619 |
| Whitbread plc * | 99,153 | 4,435,885 |
| WPP plc | 605,961 | 8,759,027 |
| 1,263,466,582 | ||
| Total Common Stocks (Cost $6,118,330,037) | 8,649,962,752 | |
| PREFERRED STOCKS 0.6% OF NET ASSETS | ||
| Germany 0.6% | ||
| Bayerische Motoren Werke AG | 29,441 | 2,509,601 |
| FUCHS PETROLUB SE | 34,883 | 1,671,057 |
| Henkel AG & Co. KGaA | 91,034 | 8,155,509 |
| Porsche Automobil Holding SE | 77,512 | 8,067,172 |
| Sartorius AG | 13,344 | 8,643,409 |
| Volkswagen AG | 93,916 | 21,077,701 |
| 50,124,449 | ||
| Italy 0.0% | ||
| Telecom Italia S.p.A. - RSP | 2,930,066 | 1,113,934 |
| Total Preferred Stocks (Cost $36,423,254) | 51,238,383 | |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.5% OF NET ASSETS | ||
| Money Market Funds 0.2% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 12,521,971 | 12,521,971 |
| Time Deposits 0.3% | ||
| BNP Paribas S.A. | ||
| Swiss Franc | ||
| (1.41%), 11/01/21 (e)(f) | 82,228 | 89,808 |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT | VALUE ($) |
| Brown Brothers Harriman & Co. | ||
| Australian Dollar | ||
| (0.21%), 11/01/21 (e)(f) | 134,639 | 101,282 |
| Canadian Dollar | ||
| 0.01%, 11/01/21 (e) | 104,287 | 84,266 |
| Danish Krone | ||
| (0.61%), 11/01/21 (e)(f) | 474,268 | 73,701 |
| Hong Kong Dollar | ||
| 0.00%, 11/01/21 (e) | 487,215 | 62,620 |
| New Zealand Dollar | ||
| 0.20%, 11/01/21 (e) | 106,883 | 76,592 |
| Norwegian Krone | ||
| 0.01%, 11/01/21 (e) | 1,648,899 | 195,185 |
| Singapore Dollar | ||
| 0.01%, 11/01/21 (e) | 137,783 | 102,175 |
| Swedish Krona | ||
| (0.35%), 11/01/21 (e)(f) | 2,758,406 | 321,193 |
| Citibank NA | ||
| Euro | ||
| (0.79%), 11/01/21 (e)(f) | 72,115 | 83,365 |
| U.S. Dollar | ||
| 0.01%, 11/01/21 (e) | 28,580,766 | 28,580,766 |
| Sumitomo Mitsui Banking Corp. | ||
| Japanese Yen | ||
| (0.28%), 11/01/21 (e)(f) | 14,384,725 | 126,209 |
| 29,897,162 | ||
| Total Short-Term Investments (Cost $42,419,133) | 42,419,133 | |
| Total Investments in Securities (Cost $6,197,172,424) | 8,743,620,268 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| MSCI EAFE Index, expires 12/17/21 | 648 | 75,803,040 | 545,990 |
| * | Non-income producing security. |
| (a) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $11,191,681. |
| (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. |
| ADR — | American Depositary Receipt |
| CVA — | Dutch Certificate |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
154
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab International Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $— | $423,559,997 | $— | $423,559,997 |
| Australia | — | 592,101,945 | 25,400,863 | 617,502,808 |
| Denmark | 4,291,093 | 233,629,150 | — | 237,920,243 |
| France | 4,033,157 | 993,458,197 | — | 997,491,354 |
| Germany | 6,393,511 | 724,245,931 | — | 730,639,442 |
| Hong Kong | 4,099,118 | 249,840,622 | — | 253,939,740 |
| Ireland | 10,781,083 | 50,218,106 | — | 60,999,189 |
| Israel | 20,219,044 | 34,949,314 | — | 55,168,358 |
| Japan | 3,443,166 | 1,994,373,515 | — | 1,997,816,681 |
| Netherlands | 16,035,746 | 422,144,476 | — | 438,180,222 |
| Norway | 2,140,389 | 55,707,530 | — | 57,847,919 |
| Portugal | 6,829,211 | 10,619,585 | 0* | 17,448,796 |
| Singapore | 15,312,843 | 87,183,111 | — | 102,495,954 |
| Spain | 41,227,536 | 165,992,291 | — | 207,219,827 |
| Sweden | 5,255,851 | 323,216,635 | — | 328,472,486 |
| Switzerland | 12,798,209 | 846,994,945 | — | 859,793,154 |
| United Kingdom | — | 1,263,455,153 | 11,429 | 1,263,466,582 |
| Preferred Stocks1 | — | 1,113,934 | — | 1,113,934 |
| Germany | 1,671,057 | 48,453,392 | — | 50,124,449 |
| Short-Term Investments1 | — | 29,897,162 | — | 29,897,162 |
| Money Market Funds | 12,521,971 | — | — | 12,521,971 |
| Futures Contracts2 | 545,990 | — | — | 545,990 |
| Total | $167,598,975 | $8,551,154,991 | $25,412,292 | $8,744,166,258 |
| * | Level 3 amount shown includes securities determined to have no value at October 31, 2021. |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments and are valued at the unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
155
Schwab Equity Index Funds | Annual Report
See financial notes
Schwab International Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $6,197,172,424) including securities on loan of $11,191,681 | $8,743,620,268 | |
| Deposit with broker for futures contracts | 4,775,760 | |
| Receivables: | ||
| Dividends | 17,847,604 | |
| Foreign tax reclaims | 16,484,380 | |
| Investments sold | 14,691,213 | |
| Fund shares sold | 8,123,626 | |
| Income from securities on loan | + | 14,504 |
| Total assets | 8,805,557,355 | |
| Liabilities | ||
| Collateral held for securities on loan | 12,521,971 | |
| Payables: | ||
| Due to custodian | 4,570,058 | |
| Investments bought | 3,314,730 | |
| Fund shares redeemed | 2,824,796 | |
| Investment adviser fees | 650,396 | |
| Variation margin on futures contracts | + | 453,332 |
| Total liabilities | 24,335,283 | |
| Net assets | $8,781,222,072 | |
| Net Assets by Source | ||
| Capital received from investors | $6,476,697,686 | |
| Total distributable earnings | + | 2,304,524,386 |
| Net assets | $8,781,222,072 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $8,781,222,072 | 359,215,458 | $24.45 | ||
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See financial notes
Schwab International Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $22,310,697) | $224,523,724 | |
| Interest received from securities - unaffiliated | 1,044 | |
| Securities on loan, net | + | 559,727 |
| Total investment income | 225,084,495 | |
| Expenses | ||
| Investment adviser fees | 4,776,024 | |
| Professional fees | + | 54,079* |
| Total expenses | 4,830,103 | |
| Expense reduction by investment adviser | – | 54,079* |
| Net expenses | – | 4,776,024 |
| Net investment income | 220,308,471 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on sales of securities - unaffiliated | (22,681,512) | |
| Net realized gains on futures contracts | 10,352,281 | |
| Net realized losses on foreign currency transactions | + | (150,814) |
| Net realized losses | (12,480,045) | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 1,868,529,412 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | 2,251,228 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (596,471) |
| Net change in unrealized appreciation (depreciation) | + | 1,870,184,169 |
| Net realized and unrealized gains | 1,857,704,124 | |
| Increase in net assets resulting from operations | $2,078,012,595 | |
| * | Professional fees associated with the filing of tax claims in the European Union deemed to be non-routine expenses of the fund. See financial notes 2 (d) and 4 for additional information. |
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Schwab International Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $220,308,471 | $140,255,519 | |
| Net realized losses | (12,480,045) | (171,714,124) | |
| Net change in unrealized appreciation (depreciation) | + | 1,870,184,169 | (261,951,352) |
| Increase (decrease) in net assets from operations | $2,078,012,595 | ($293,409,957) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($134,266,147) | ($172,919,468) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 84,577,903 | $1,955,546,476 | 137,962,023 | $2,458,528,501 | |
| Shares reinvested | 4,139,456 | 90,364,312 | 6,184,493 | 127,647,953 | |
| Shares redeemed | + | (49,400,102) | (1,145,927,182) | (90,042,895) | (1,625,600,717) |
| Net transactions in fund shares | 39,317,257 | $899,983,606 | 54,103,621 | $960,575,737 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 319,898,201 | $5,937,492,018 | 265,794,580 | $5,443,245,706 | |
| Total increase | + | 39,317,257 | 2,843,730,054 | 54,103,621 | 494,246,312 |
| End of period | 359,215,458 | $8,781,222,072 | 319,898,201 | $5,937,492,018 | |
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Schwab Equity Index Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust, except Schwab 1000 Index Fund, which is a series of Schwab Investments. Both Schwab Capital Trust and Schwab Investments (the trusts) are no-load, open-end management investment companies. Each trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trusts as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) | |
| Schwab S&P 500 Index Fund | Schwab Target 2045 Fund |
| Schwab Small-Cap Index Fund | Schwab Target 2050 Fund |
| Schwab Total Stock Market Index Fund | Schwab Target 2055 Fund |
| Schwab 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 Fundamental US Large Company Index Fund |
| Schwab International Index Fund | Schwab Fundamental US Small Company Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Fundamental International Large Company Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Fundamental International Small Company Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Fundamental Global Real Estate Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Target 2010 Index Fund |
| Schwab Balanced Fund | Schwab Target 2015 Index Fund |
| Schwab Core Equity Fund | Schwab Target 2020 Index Fund |
| Schwab Dividend Equity Fund | Schwab Target 2025 Index Fund |
| Schwab Large-Cap Growth Fund | Schwab Target 2030 Index Fund |
| Schwab Small-Cap Equity Fund | Schwab Target 2035 Index Fund |
| Schwab Health Care Fund | Schwab Target 2040 Index Fund |
| Schwab International Core Equity Fund | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab Target 2065 Index Fund |
| Schwab Target 2030 Fund | Schwab Monthly Income Fund – Moderate Payout |
| Schwab Target 2035 Fund | Schwab Monthly Income Fund – Enhanced Payout |
| Schwab Target 2040 Fund | Schwab Monthly Income Fund – Maximum Payout |
| SCHWAB INVESTMENTS (ORGANIZED OCTOBER 26, 1990) | |
| Schwab 1000 Index Fund | Schwab Tax-Free Bond Fund |
| Schwab Treasury Inflation Protected Securities Index Fund | Schwab California Tax-Free Bond Fund |
| Schwab U.S. Aggregate Bond Index Fund | Schwab Opportunistic Municipal Bond Fund |
| Schwab Short-Term Bond Index Fund | Schwab Global Real Estate Fund |
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds’ Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (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 funds 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.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.
• Foreign equity security fair valuation: The Board has adopted procedures to fair value foreign equity securities that are traded in markets that close prior to the funds valuing their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the NAV of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures.
• Futures contracts: Futures contracts are valued at their settlement prices as of the close of their exchanges.
• 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 each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
The three levels of the fair value hierarchy are as follows:
• Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, 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 securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets.
• Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 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. A fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their value may change daily.
Passive Foreign Investment Companies: Certain funds may own shares in certain foreign corporations that meet the Internal Revenue Code definition of a Passive Foreign Investment Company (PFIC). The funds 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).
Securities Lending: Under the trusts’ Securities Lending Program, a fund (lender), may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating pursuant to Rule 2a-7 under the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the funds or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. The aggregate fair value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan. 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 the investment adviser or any of its affiliates.
As of October 31, 2021, 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 and Schwab International Index Fund had securities on loan, all of which were classified as common stocks, investment companies and rights. The value of the securities on loan and the related collateral as of October 31, 2021, if any, are disclosed in each fund’s Portfolio Holdings and Statement of Assets and Liabilities.
Cash Management Transactions: The funds, except for Schwab 1000 Index Fund, Schwab U.S. Large-Cap Growth Index Fund, Schwab U.S. Large-Cap Value Index Fund and Schwab U.S. Mid-Cap Index Fund may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances, 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 funds bear the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Gains realized by the funds on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized appreciation to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures contract, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends, in the form of cash or non-cash income such as in the form of additional securities, and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the date the ex-dividend date is confirmed. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. In the Schwab Small-Cap Index Fund and Schwab Total Stock Market Index Fund a non-recurring dividend with a payable date of October 29, 2021 and an ex-date of November 1, 2021 is presented in the Statement of Assets and Liabilities as Deferred dividend income payable.
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Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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.
The Schwab International Index Fund filed claims to recover taxes previously withheld in certain European Union countries on the basis that those countries had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. These filings are subject to various administrative and judicial proceedings within these countries, and all professional fees associated with these filings have been paid by the investment adviser. For additional details see Affiliates and Affiliated Transactions in financial note 4, Other Affiliated Transactions.
(e) Expenses:
Pursuant to an Amended and Restated Investment Advisory and Administration Agreement (Advisory Agreement) between the investment adviser and each trust, the investment adviser pays the operating expenses of each fund, excluding acquired fund fees and expenses, taxes, any brokerage expenses, and extraordinary or non-routine expenses. Taxes, any brokerage expenses and extraordinary or non-routine expenses that are specific to a fund are charged directly to the fund.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(g) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(i) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes accrued as of October 31, 2021, if any, are reflected in each fund’s Statement of Assets and Liabilities.
(j) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectuses, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
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Financial Notes (continued)
3. Risk Factors (continued):
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 a fund will fluctuate, which means that an investor could lose money over short or long periods.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Tracking Error Risk. As an index fund, each fund seeks to track the performance of its respective index, although it may not be successful in doing so. The divergence between the performance of a fund and the index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.
Investment Style Risk. The funds are index funds. Therefore, each fund follows the securities included in its respective index during upturns as well as downturns. Because of its indexing strategy, a fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of a fund’s expenses, a fund’s performance may be below that of the index. 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 an index’s rebalancing schedule. Such errors and/or market disruptions may result in losses for a fund.
Sampling Index Tracking Risk. To the extent a fund uses sampling techniques, a fund will not fully replicate its index and may hold securities not included in the index. As a result, a fund will be subject to the risk that the investment adviser’s investment strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. If a fund utilizes a sampling approach, it may not track the return of the index as well as it would if the fund purchased all of the securities in the index.
Concentration Risk. To the extent that a fund’s or its respective index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector, country or asset class.
Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, a fund’s performance could be impacted.
Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.
Mid-Cap Company Risk. Mid-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies and the value of securities issued by these companies may move sharply.
Small-Cap Company Risk. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.
Growth Investing Risk. Growth stocks can be volatile. Growth companies usually invest a high portion of earnings in their businesses and may lack the dividends of value stocks that can cushion stock prices in a falling market. The prices of growth stocks are based largely on projections of the issuer’s future earnings and revenues. If a company’s earnings or revenues fall short of expectations, its stock price may fall dramatically. Growth stocks may also be more expensive relative to their earnings or assets compared to value or other stocks.
Value Investing Risk. A fund may emphasize “value” style of investing, which targets undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” securities may not move in tandem with the returns on other styles of investing or the stock market in general.
Foreign Investment Risk. A fund’s investments in securities of foreign issuers involve certain risks that may be greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund’s investments, and could impair the fund’s ability to meet its investment objective or invest in accordance with its investment strategy. There is a risk that investments in securities denominated
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Financial Notes (continued)
3. Risk Factors (continued):
in, and/or receiving revenues in, foreign currencies will decline in value relative to the U.S. dollar. To the extent a fund’s investments in a single country or a limited number of countries represent a large percentage of the fund’s assets, the fund’s performance may be adversely affected by the economic, political, regulatory and social conditions in those countries, and the fund’s price may be more volatile than the price of a fund that is geographically diversified.
Derivatives Risk. A fund may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are futures and options on futures. An option is the right to buy or sell an instrument at a specific price before a specific date. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. The 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.
A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk and market risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to lack of availability risk, credit risk, leverage risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause a fund to realize higher amounts of short-term capital gains. A fund’s use of derivatives could reduce the fund’s performance, increase its volatility, and could cause the fund to lose more than the initial amount invested.
Liquidity Risk. A fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
Charles Schwab Investment Management Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Advisory Agreement between the investment adviser and each trust.
For its advisory and administrative services to the funds, the investment adviser is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
| SCHWAB S&P 500 INDEX FUND | SCHWAB 1000 INDEX FUND | SCHWAB SMALL-CAP INDEX FUND | SCHWAB TOTAL STOCK MARKET INDEX FUND | SCHWAB U.S. LARGE-CAP GROWTH INDEX FUND | SCHWAB U.S. LARGE-CAP VALUE INDEX FUND | SCHWAB U.S. MID-CAP INDEX FUND | SCHWAB INTERNATIONAL INDEX FUND |
| 0.02% | 0.05% | 0.04% | 0.03% | 0.035% | 0.035% | 0.04% | 0.06% |
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Investments from Affiliates
Certain funds in the Fund Complex (for definition refer to Trustees and Officers section) may own shares of other funds in the Fund Complex. The table below reflects the percentages of shares of each fund in this report that are owned by other funds in the Fund Complex as of October 31, 2021, as applicable:
| UNDERLYING FUNDS | |||||
| SCHWAB S&P 500 INDEX FUND | SCHWAB SMALL-CAP INDEX FUND | SCHWAB U.S. LARGE-CAP GROWTH INDEX FUND | SCHWAB U.S. MID-CAP INDEX FUND | SCHWAB INTERNATIONAL INDEX FUND | |
| Schwab MarketTrack All Equity Portfolio | 0.4% | 1.3% | 5.0% | —% | 1.3% |
| Schwab MarketTrack Balanced Portfolio | 0.2% | 0.6% | 2.3% | —% | 0.5% |
| Schwab MarketTrack Conservative Portfolio | 0.1% | 0.2% | 0.8% | —% | 0.2% |
| Schwab MarketTrack Growth Portfolio | 0.4% | 1.3% | 3.8% | —% | 1.0% |
| Schwab Target 2010 Fund | 0.0%* | —% | —% | 0.1% | —% |
| Schwab Target 2015 Fund | 0.0%* | —% | —% | 0.1% | —% |
| Schwab Target 2020 Fund | 0.1% | —% | —% | 0.5% | —% |
| Schwab Target 2025 Fund | 0.2% | —% | —% | 0.8% | —% |
| Schwab Target 2030 Fund | 0.3% | —% | —% | 1.7% | —% |
| Schwab Target 2035 Fund | 0.2% | —% | —% | 1.0% | —% |
| Schwab Target 2040 Fund | 0.4% | —% | —% | 2.1% | —% |
| Schwab Target 2045 Fund | 0.1% | —% | —% | 0.5% | —% |
| Schwab Target 2050 Fund | 0.1% | —% | —% | 0.4% | —% |
| Schwab Target 2055 Fund | 0.0%* | —% | —% | 0.3% | —% |
| Schwab Target 2060 Fund | 0.0%* | —% | —% | 0.1% | —% |
| Schwab Target 2065 Fund | 0.0%* | —% | —% | 0.0%* | —% |
| * | Less than 0.05% |
Other Affiliated Transactions
The professional fees related to foreign withholding tax claims discussed in financial note 2 were non-routine expenses. The investment adviser agreed to pay these professional fees on behalf of the Schwab International Index Fund, subject to reimbursement to the extent the fund is able to successfully recover taxes withheld in the future.
During the year ended October 31, 2021, the professional fees incurred by the Schwab International Index Fund and paid by the investment adviser were $54,079.
During the year ended October 31, 2021, the Schwab International Index Fund received a positive judgment of previously withheld foreign taxes from Finland. The Schwab International Index Fund has recorded $435,984 (including $5,289 in interest) in income and receivable while awaiting payment from Finland. In addition, the Schwab International Index Fund recorded a payable of $212,425 due to the investment adviser for professional fees that were subject to reimbursement. The above amounts are reflected in the Schwab International Index Fund’s Statement of Assets and Liabilities and Statement of Operations. Amounts recorded as receivable and payable will be extinguished upon receipt of payment from Finland.
As of October 31, 2021, there are no additional professional fees related to foreign withholding tax subject to future reimbursement to the investment adviser for the Schwab International Index Fund.
No other amounts for additional tax reclaims are reflected in the financial statements due to the uncertainty surrounding the ultimate resolution of proceedings, the likelihood of receipt of these claims, and the potential timing of payment.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex. All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
Interfund Transactions
The funds may engage in transactions with certain other funds in the Fund Complex 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 October 31, 2021, each fund’s total aggregate security transactions with other funds in the Fund Complex as well as any realized gains (losses) were as follows:
| TOTAL AGGREGATE TRANSACTIONS | REALIZED GAINS (LOSSES) | |
| Schwab S&P 500 Index Fund | $458,054,898 | ($68,942,655) |
| Schwab 1000 Index Fund | 299,299,178 | 8,402,967 |
| Schwab Small-Cap Index Fund | 133,638,791 | 840,279 |
| Schwab Total Stock Market Index Fund | 223,479,599 | (17,409,015) |
| Schwab U.S. Large-Cap Growth Index Fund | 136,098,894 | 12,449,829 |
| Schwab U.S. Large-Cap Value Index Fund | 127,791,256 | 15,504,820 |
| Schwab U.S. Mid-Cap Index Fund | 54,449,291 | (883,145) |
| Schwab International Index Fund | 3,309,144 | (1,460,192) |
5. Board of Trustees:
The Board may include people who are officers and/or directors of the investment adviser or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trusts were in compliance with these limitations throughout the report period. The funds do not pay any interested or non-interested (independent trustees) trustees. The independent trustees are paid by the investment adviser. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the funds were participants with other funds in the Fund Complex in a joint, syndicated, committed $850 million line of credit (the Syndicated Credit Facility), which matured on September 30, 2021. On September 30, 2021, the Syndicated Credit Facility was amended to run for a new 364 day period with a line of credit amount unchanged, maturing on September 29, 2022. Under the terms of the Syndicated Credit Facility, in addition to the investment adviser paying the interest charged on any borrowings by a fund, the investment adviser paid a commitment fee of 0.15% per annum on the funds’ proportionate share of the unused portion of the Syndicated Credit Facility.
During the period, the funds were participants 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, which matured on September 30, 2021. On September 30, 2021, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Uncommitted Credit Facility, the investment adviser pays interest on the amount a fund borrows. There were no borrowings from either line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is paid by the investment adviser. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
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Financial Notes (continued)
| 7. Derivatives: |
The funds entered into equity index futures contracts during the report period. The funds invested in futures contracts to equitize available cash. The value and variation margin for futures contracts held at October 31, 2021 are presented in the Portfolio Holdings and Statement of Assets and Liabilities, respectively. 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 funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended October 31, 2021, the month-end average notional amounts of futures contracts held by the funds and the month-end average number of contracts held were as follows:
| NOTIONAL AMOUNTS | NUMBER OF CONTRACTS | |
| Schwab S&P 500 Index Fund | $324,756,509 | 1,599 |
| Schwab 1000 Index Fund | 62,136,132 | 308 |
| Schwab Small-Cap Index Fund | 36,813,319 | 345 |
| Schwab Total Stock Market Index Fund | 88,610,666 | 500 |
| Schwab U.S. Large-Cap Growth Index Fund | 3,605,722 | 27 |
| Schwab U.S. Large-Cap Value Index Fund | 2,618,843 | 33 |
| Schwab U.S. Mid-Cap Index Fund | 3,934,010 | 15 |
| Schwab International Index Fund | 48,288,097 | 437 |
8. Purchases and Sales of Investment Securities:
For the period ended October 31, 2021, purchases and sales of securities (excluding in-kind transactions and short-term obligations) were as follows:
| PURCHASES OF SECURITIES | SALES OF SECURITIES | |
| Schwab S&P 500 Index Fund | $6,042,732,900 | $1,447,739,853 |
| Schwab 1000 Index Fund | 1,067,208,625 | 594,519,135 |
| Schwab Small-Cap Index Fund | 1,936,612,633 | 1,132,682,238 |
| Schwab Total Stock Market Index Fund | 2,301,383,977 | 522,850,444 |
| Schwab U.S. Large-Cap Growth Index Fund | 289,982,450 | 125,724,696 |
| Schwab U.S. Large-Cap Value Index Fund | 196,005,703 | 95,479,094 |
| Schwab U.S. Mid-Cap Index Fund | 288,137,462 | 101,284,254 |
| Schwab International Index Fund | 1,212,482,620 | 270,896,999 |
During the period ended October 31, 2021, the Schwab 1000 Index Fund and the Schwab Small-Cap Index Fund sold securities in connection with in-kind redemptions in the amounts of $91,849,845 and $1,099,026, respectively, resulting in realized gains of $88,311,953 and $966,519, respectively. The realized gains on sales of securities — unaffiliated are included in the Statement of Operations.
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Financial Notes (continued)
| 9. Federal Income Taxes: |
As of October 31, 2021, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:
| TAX COST | GROSS UNREALIZED APPRECIATION | GROSS UNREALIZED DEPRECIATION | NET UNREALIZED APPRECIATION (DEPRECIATION) | |
| Schwab S&P 500 Index Fund | $25,892,017,233 | $42,338,767,081 | ($857,348,014) | $41,481,419,067 |
| Schwab 1000 Index Fund | 3,071,060,075 | 11,238,309,815 | (95,529,892) | 11,142,779,923 |
| Schwab Small-Cap Index Fund | 4,482,210,996 | 2,742,624,165 | (540,946,209) | 2,201,677,956 |
| Schwab Total Stock Market Index Fund | 8,412,722,738 | 10,213,348,726 | (363,530,338) | 9,849,818,388 |
| Schwab U.S. Large-Cap Growth Index Fund | 555,272,985 | 343,472,548 | (14,501,232) | 328,971,316 |
| Schwab U.S. Large-Cap Value Index Fund | 454,112,613 | 152,120,392 | (30,084,688) | 122,035,704 |
| Schwab U.S. Mid-Cap Index Fund | 654,270,834 | 269,164,856 | (28,822,660) | 240,342,196 |
| Schwab International Index Fund | 6,490,515,608 | 2,839,724,868 | (586,074,218) | 2,253,650,650 |
As of October 31, 2021, the components of distributable earnings on a tax basis were as follows:
| UNDISTRIBUTED ORDINARY INCOME | UNDISTRIBUTED LONG-TERM CAPITAL GAINS | NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS | NET OTHER UNREALIZED APPRECIATION (DEPRECIATION) | CAPITAL LOSS CARRYFORWARDS | TOTAL | |
| Schwab S&P 500 Index Fund | $644,685,725 | $65,457,539 | $41,481,419,067 | $— | $— | $42,191,562,331 |
| Schwab 1000 Index Fund | 134,827,631 | 79,902,182 | 11,142,779,923 | — | — | 11,357,509,736 |
| Schwab Small-Cap Index Fund | 105,554,077 | 399,701,902 | 2,201,677,956 | — | — | 2,706,933,935 |
| Schwab Total Stock Market Index Fund | 176,420,096 | 45,585,913 | 9,849,818,388 | — | — | 10,071,824,397 |
| Schwab U.S. Large-Cap Growth Index Fund | 5,075,378 | 9,905,946 | 328,971,316 | — | — | 343,952,640 |
| Schwab U.S. Large-Cap Value Index Fund | 15,173,515 | 10,244,073 | 122,035,704 | — | — | 147,453,292 |
| Schwab U.S. Mid-Cap Index Fund | 8,975,434 | 14,727,980 | 240,342,196 | — | — | 264,045,610 |
| Schwab International Index Fund | 260,131,523 | — | 2,253,650,650 | (22,817) | (209,234,970) | 2,304,524,386 |
The primary differences between book basis and tax basis unrealized appreciation or unrealized depreciation of investments are the tax deferral of losses on wash sales, realization for tax purposes of unrealized gains (losses) on futures contracts, the realization for tax purposes of unrealized appreciation on investments in Passive Foreign Investment Companies (PFIC) and partnership investments. The tax cost of the funds’ investments, disclosed above, have been adjusted from their book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.
Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2021, the funds had capital loss carryforwards available as follows:
| NO EXPIRATION | |
| 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 | 209,234,970 |
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Financial Notes (continued)
9. Federal Income Taxes (continued):
For the fiscal year ended October 31, 2021, the funds had capital loss carryforwards utilized as follows:
| CAPITAL LOSS CARRYFORWARDS UTILIZED | |
| Schwab S&P 500 Index Fund | $177,404,555 |
| Schwab 1000 Index Fund | — |
| Schwab Small-Cap Index Fund | — |
| Schwab Total Stock Market Index Fund | 21,117,724 |
| Schwab U.S. Large-Cap Growth Index Fund | 5,572,385 |
| Schwab U.S. Large-Cap Value Index Fund | 1,090,145 |
| Schwab U.S. Mid-Cap Index Fund | 3,129,145 |
| Schwab International Index Fund | — |
The tax basis components of distributions paid during the current and prior fiscal years were as follows:
| CURRENT FISCAL YEAR END DISTRIBUTIONS | PRIOR FISCAL YEAR END DISTRIBUTIONS | |||
| ORDINARY INCOME | LONG-TERM CAPITAL GAINS | ORDINARY INCOME | LONG-TERM CAPITAL GAINS | |
| Schwab S&P 500 Index Fund | $913,293,066 | $— | $752,543,848 | $76,711,728 |
| Schwab 1000 Index Fund | 189,179,998 | 117,107,001 | 175,073,765 | 115,680,278 |
| Schwab Small-Cap Index Fund | 57,108,519 | 72,781,270 | 71,467,544 | 187,516,879 |
| Schwab Total Stock Market Index Fund | 218,157,695 | — | 180,871,651 | 26,277,147 |
| Schwab U.S. Large-Cap Growth Index Fund | 3,820,481 | — | 1,890,344 | — |
| Schwab U.S. Large-Cap Value Index Fund | 7,759,956 | — | 7,613,944 | 2,019,105 |
| Schwab U.S. Mid-Cap Index Fund | 8,319,433 | — | 7,422,021 | 2,160,536 |
| Schwab International Index Fund | 134,266,147 | — | 172,919,468 | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations.
As of October 31, 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 funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the fiscal year ended October 31, 2021, the funds 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Schwab Investments and Schwab Capital Trust and Shareholders of Schwab 1000 Index Fund, Schwab S&P 500 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, and Schwab International Index Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities, including the portfolio holdings, of Schwab 1000® Index Fund, one of the funds constituting Schwab Investments, and Schwab S&P 500 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, and Schwab International Index Fund (the “Funds”), seven of the funds constituting Schwab Capital Trust, as of October 31, 2021, and the related statements of operations for the year then ended, the related statements of changes in net assets and the financial highlights for the two years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds as of October 31, 2021, the results of their operations for the year then ended, and the changes in their net assets and the financial highlights for the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America. The financial highlights for each of the three years in the period ended October 31, 2019 were audited by other auditors, whose report, dated December 16, 2019, expressed an unqualified opinion on such financial highlights.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Denver, Colorado
December 16, 2021
Denver, Colorado
December 16, 2021
We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.
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Other Federal Tax Information (unaudited)
Schwab International Index Fund may elect to pass on the benefits of the foreign tax credit of $16,287,923 to its shareholders for the fiscal year ended October 31, 2021. The respective foreign source income on the fund is $246,640,588.
For corporate shareholders, the following percentage of the funds’ dividend distributions paid during the fiscal year ended October 31, 2021, qualify for the corporate dividends received deduction:
| PERCENTAGE | |
| Schwab S&P 500 Index Fund | 85.17 |
| Schwab 1000 Index Fund | 85.79 |
| Schwab Small-Cap Index Fund | 58.34 |
| Schwab Total Stock Market Index Fund | 83.67 |
| Schwab U.S. Large-Cap Growth Index Fund | 90.71 |
| Schwab U.S. Large-Cap Value Index Fund | 81.07 |
| Schwab U.S. Mid-Cap Index Fund | 78.96 |
| Schwab International Index Fund | — |
For the fiscal year ended October 31, 2021, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amounts for use in preparing their 2021 income tax return.
| Schwab S&P 500 Index Fund | $913,293,066 |
| Schwab 1000 Index Fund | 183,962,574 |
| Schwab Small-Cap Index Fund | 33,684,436 |
| Schwab Total Stock Market Index Fund | 205,791,857 |
| Schwab U.S. Large-Cap Growth Index Fund | 3,527,530 |
| Schwab U.S. Large-Cap Value Index Fund | 6,455,964 |
| Schwab U.S. Mid-Cap Index Fund | 7,640,090 |
| Schwab International Index Fund | 138,381,927 |
Under section 852(b)(3)(C) of the Internal Revenue Code, the funds hereby designate the following amounts as long-term capital gain dividends for the fiscal year ended October 31, 2021:
| Schwab S&P 500 Index Fund | $— |
| Schwab 1000 Index Fund | 117,107,001 |
| Schwab Small-Cap Index Fund | 72,781,270 |
| 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 | — |
For the fiscal year ended October 31, 2021, the funds designate the following amounts as dividends eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amounts for use in preparing their 2021 income tax return.
| Schwab S&P 500 Index Fund | $— |
| Schwab 1000 Index Fund | 1,745,086 |
| Schwab Small-Cap Index Fund | 1,207,370 |
| Schwab Total Stock Market Index Fund | 2,075,457 |
| Schwab U.S. Large-Cap Growth Index Fund | 28,211 |
| Schwab U.S. Large-Cap Value Index Fund | 44,960 |
| Schwab U.S. Mid-Cap Index Fund | 218,899 |
| Schwab International Index Fund | — |
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Liquidity Risk Management Program (Unaudited)
The Funds have adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Funds’ Board of Trustees (the “Board”) has designated the Funds’ investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.
Under the program, the investment adviser manages a Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. The program is reasonably designed to assess and manage a Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each Fund’s investments is supported by third-party liquidity assessment vendors.
The Funds’ Board reviewed a report at its meeting held on September 20, 2021 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2020, through May 31, 2021, which included individual Fund liquidity risk metrics. No significant liquidity events impacting any of the Funds were noted in the report. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing each Fund’s liquidity risk.
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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 amended and restated investment advisory and administration agreements (the Agreements) between Schwab Capital Trust and Schwab Investments (collectively, the Trusts) and Charles Schwab Investment Management, Inc. (dba Schwab Asset Management) (the investment adviser) with respect to the existing funds in the Trusts, including Schwab S&P 500 Index Fund, Schwab 1000 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund, Schwab International Index Fund, Schwab U.S. Large-Cap Growth Index Fund, Schwab U.S. Large-Cap Value Index Fund, and Schwab U.S. Mid-Cap Index Fund (each, a Fund and collectively, the Funds), and to review certain other agreements pursuant to which the investment adviser 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 the investment adviser, including information about the investment adviser’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 the investment adviser seeking certain relevant information. The responses by the investment adviser 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 Funds that the Board reviews during the course of each year, including information that relates to the Funds’ 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 the investment adviser 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 Agreements with respect to the Funds at meetings held on May 12, 2021 and June 8, 2021, and approved the renewal of the Agreements with respect to the Funds 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 Agreements with respect to the Funds 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 each Fund under the Agreements, including the resources of the investment adviser and its affiliates dedicated to the Funds; |
| 2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds and benchmark data; |
| 3. | each Fund’s expenses and how those expenses compared to those of certain other similar mutual funds; |
| 4. | the profitability of the investment adviser and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to each Fund, including both direct and indirect benefits accruing to the investment adviser and its affiliates; and |
| 5. | the extent to which economies of scale would be realized as each Fund grows and whether fee levels in the Agreements reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, the investment adviser’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 the investment adviser relating to services and support provided with respect to each 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
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oversight. The Trustees also considered investments the investment adviser has made in its infrastructure, including modernizing the investment adviser’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 Funds and their shareholders. The Trustees considered the investment adviser’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 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 the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds supported renewal of the Agreements with respect to the Funds.
Fund Performance. The Board considered each Fund’s performance in determining whether to renew the Agreements with respect to such Fund. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and applicable indices/benchmarks, in light of total return, portfolio yield (if applicable) and market trends, as well as in consideration of each 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 each Fund, the Trustees considered the risk profile for such Fund and such 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. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of each Fund supported renewal of the Agreements with respect to such Fund.
Fund Expenses. With respect to each Fund’s expenses, the Trustees considered the rate of compensation called for by the Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of other similar mutual funds, such peer groups and comparisons having been selected and calculated by an independent provider of
investment company data. The investment adviser reported to the Board, and the Board took into account, the risk assumed by the investment adviser in the development of the Funds and provision of services as well as the competitive marketplace for financial products. The Trustees also considered fees charged by the investment adviser 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 the investment adviser 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 each Fund are reasonable and supported renewal of the Agreements with respect to such Fund.
Profitability. The Trustees considered the compensation flowing to the investment adviser 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 the investment adviser 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 Funds and other funds in the complex. The Trustees also considered any other benefits derived by the investment adviser from its relationship with the Funds, such as whether, by virtue of its management of the Funds, the investment adviser 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 Funds under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds by the investment adviser and its affiliates. The Trustees noted that the investment adviser continues to invest substantial sums in its business in order to provide enhanced research capabilities, services and systems to benefit the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of the investment adviser with respect to each Fund is reasonable and supported renewal of the Agreements with respect to such 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 and whether those are passed along to a Fund’s shareholders by way of the relatively low advisory fee and unitary fee structure of the Funds through (i) the enhancement of services provided to the Funds in return for fees paid, including through investments by the investment adviser in the investment adviser’s infrastructure, including modernizing the investment adviser’s technology and use of data, increasing
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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 Funds and their shareholders; (ii) graduated investment advisory fee schedules or unitary fee structures, fee waivers, or expense caps by the investment adviser 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 the investment adviser has shared any economies of scale with the Funds by investing in the investment adviser’s infrastructure, as discussed above, over time and that the investment adviser’s internal costs of providing investment management, technology, administrative, legal and compliance services to the Funds continue to increase as a result of regulatory or other developments. The Trustees considered that the investment adviser and its affiliates may employ contractual expense caps to protect shareholders from high fees when fund assets are relatively small, for example, in the case of
newer funds or funds with investment strategies that are from time to time out of favor, because, among other reasons, shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that each 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 Agreements with respect to the Funds and concluded that the compensation under the Agreements with respect to the Funds is fair and reasonable in light of the services provided and the related expenses borne by the investment adviser 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 and Schwab Investments, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 103 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| Independent Trustees | |||
| Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
| Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 103 | 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. | 103 | 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). | 103 | 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. | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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 and Chief Executive Officer (Oct. 2008 – present) and President (Oct. 2008 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), 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 – Oct. 2021), Charles Schwab Investment Management, Inc. | 103 | 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. | 103 | 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 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.; 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 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.; 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 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.; 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 |
| 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., the investment adviser for the trusts in the Fund Complex, and is an employee 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. 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.
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.
Bloomberg US Treasury Bills 1–3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $300 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
Dow Jones U.S. Total Stock Market Index An index which includes all U.S. equity issues with readily available prices. The index is a float-adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
International Spliced Index An internally calculated index comprised of the Schwab International Index from inception of the Schwab International Index Fund until the close of business on December 20, 2011, the MSCI EAFE Index from December 21, 2011 until the close of business on February 28, 2013, and the MSCI EAFE Index (Net) from March 1, 2013 forward.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
restricted and illiquid securities Restricted securities are securities that are subject to legal restrictions on their sale. Restricted securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933 (the 1933 Act), or in a registered public offering. Certain restricted securities, such as Section 4(a)(2) commercial paper and Rule 144A securities under the 1933 Act, may be considered to be liquid if they meet the criteria for liquidity established by the Board. Illiquid securities generally are any securities that cannot be disposed of promptly and in the ordinary course of business at approximately the amount at which a fund has valued the instruments. The liquidity of a fund’s investments is monitored under the supervision and direction of the Board. Investments currently not considered liquid include repurchase agreements not maturing within seven days and certain restricted securities.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 1000 Growth Index An index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000 Index An index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell 1000 Value Index An index that measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.
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Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell Midcap Index An index that measures the performance of the mid-cap segment of the U.S. equity universe. The Russell Midcap Index is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
Schwab 1000 Index A float-adjusted market capitalization weighted index developed by Charles Schwab & Co., Inc. that represents the performance of the largest 1,000 publicly traded companies in the United States. As a result of corporate actions, the index may be comprised of more or less than 1,000 securities.
Small-Cap Spliced Index An internally calculated index comprised of the Schwab Small-Cap Index from inception of the Schwab Small-Cap Index Fund until the close of business on December 14, 2011, and the Russell 2000 Index from December 15, 2011 forward.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
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Schwab Equity Index Funds
Schwab Asset Management
With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Schwab Asset 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
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Schwab Small-Cap Equity Fund
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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
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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., dba Schwab Asset Management
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds
1-877-824-5615
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Member SIPC®
Printed on recycled paper.
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| ¹ | State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation. |
| ² | 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. |
Annual Report | October 31, 2021
Schwab Fundamental Index* Funds
Schwab Fundamental
US Large Company Index Fund
US Large Company Index Fund
Schwab Fundamental
US Small Company Index Fund
US Small Company Index Fund
Schwab Fundamental International
Large Company Index Fund
Large Company Index Fund
Schwab Fundamental International
Small Company Index Fund
Small Company Index Fund
Schwab Fundamental Emerging Markets
Large Company Index Fund
Large Company Index Fund
| * | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC. |
This page is intentionally left blank.
Schwab Fundamental Index Funds
In This Report
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset ManagementTM
Distributor: Charles Schwab & Co., Inc. (Schwab)
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of MSCI Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Schwab. The Industry classifications used in the Portfolio Holdings are sub-categories of Sector classifications.
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Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental Index Funds
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
| Total Return for the 12 Months Ended October 31, 2021 | |
| Schwab Fundamental US Large Company Index Fund (Ticker Symbol: SFLNX) | 51.33% |
| Russell RAFITM US Large Company Index | 51.71% |
| Russell 1000® Index | 43.51% |
| Fund Category: Morningstar Large Value1 | 43.70% |
| Performance Details | pages 7-9 |
| Schwab Fundamental US Small Company Index Fund (Ticker Symbol: SFSNX) | 63.73% |
| Russell RAFITM US Small Company Index | 64.10% |
| Russell 2000® Index | 50.80% |
| Fund Category: Morningstar Small Blend1 | 54.25% |
| Performance Details | pages 10-12 |
| Schwab Fundamental International Large Company Index Fund2 (Ticker Symbol: SFNNX) | 44.03% |
| Russell RAFITM Developed ex US Large Company Index (Net)3 | 44.65% |
| MSCI EAFE® Index (Net)3 | 34.18% |
| Fund Category: Morningstar Foreign Large Value1 | 36.44% |
| Performance Details | pages 13-15 |
| Total Return for the 12 Months Ended October 31, 2021 | |
| Schwab Fundamental International Small Company Index Fund2 (Ticker Symbol: SFILX) | 37.25% |
| Russell RAFITM Developed ex US Small Company Index (Net)3 | 37.75% |
| S&P Developed ex-U.S. Small Cap Index (Net)3 | 36.39% |
| Fund Category: Morningstar Foreign Small/Mid Value1 | 43.61% |
| Performance Details | pages 16-18 |
| Schwab Fundamental Emerging Markets Large Company Index Fund2 (Ticker Symbol: SFENX) | 40.58% 4 |
| Russell RAFITM Emerging Markets Large Company Index (Net)3 | 42.09% |
| MSCI Emerging Markets Index (Net)3 | 16.96% |
| Fund Category: Morningstar Diversified Emerging Markets1 | 21.15% |
| Performance Details | pages 19-21 |
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 each 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 funds are 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 RAFITM Index Series (the Indices) or otherwise. The Indices are 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 Indices 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. Charles Schwab Investment Management, Inc. has obtained full license from Russell to use the Indices. For full disclaimer please see the funds’ statement of additional information.
| 1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 2 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations. See financial note 2 for more information. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
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Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental Index Funds
From the President
Jonathan de St. Paer
President of Schwab Asset
Management and the funds
covered in this report.
President of Schwab Asset
Management and the funds
covered in this report.
Dear Shareholder,
During the 12-month reporting period ended October 31, 2021, global equity markets generally gained ground as economies began to recover from COVID-19 pandemic lockdowns and corporations generally posted stronger-than-expected profits. The S&P 500® Index, a bellwether for the overall U.S. stock market, rose 42.9%, reaching record territory as the period ended, while the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.2%. Emerging markets rose as well, although not to the same degree. A far more complex story lay beneath those broad gains. Skyrocketing oil and gas prices propelled the energy sector ahead of other sectors, while the financials sector sharply outperformed on strong earnings and rising interest rates. Other cyclically sensitive sectors, such as the information technology and real estate sectors, also outperformed, while more traditionally defensive sectors, such as the utilities and consumer staples sectors, trailed by comparison.
While there are always winners and losers among various markets, sectors, and individual stocks, today’s top performers are rarely the same as yesterday’s or tomorrow’s. At Schwab Asset Management, we believe the best defense against a shifting investment landscape is a portfolio that’s diversified across a wide variety of asset classes and geographic regions. The Schwab Fundamental Index Funds play a role in our goal to provide investors with a diverse variety of investment choices. The funds weight their holdings based on objective financial measures of company size—adjusted sales, retained operating cash flow, and dividends plus buybacks. Because this can result in a different risk profile than market-cap index funds that use market capitalization to weight the same set of stocks, the Schwab Fundamental Index Funds can complement traditional market-cap index and actively managed strategies, helping to create the potential for more attractive risk-adjusted portfolios.
Thank you for investing with Schwab Asset Management, and for trusting us to help you achieve your financial goals. For more information about the Schwab Fundamental Index Funds, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.schwabassetmanagement.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
“ The funds weight their holdings based on objective financial measures of company size—adjusted sales, retained operating cash flow, and dividends plus buybacks.”
Past performance is no guarantee of future results.
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Management views may have changed since the report date.
Schwab Asset Management is the dba name for Charles Schwab Investment Management, Inc., the investment adviser for Schwab Funds, Laudus Funds, and Schwab ETFs.
| * | 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 Index Funds | Annual Report
Schwab Fundamental Index Funds
The Investment Environment
For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 42.91% with cyclically sensitive sectors, such as the energy, financials, information technology, and real estate sectors, outperforming traditionally defensive sectors, such as the utilities and consumer staples sectors. U.S. small-cap stocks outperformed U.S. large-cap stocks, with the Russell 2000® Index and the Russell 1000® Index returning 50.80% and 43.51%, respectively. Among U.S. large-caps, value stocks slightly outperformed growth stocks, with the Russell 1000® Value Index and Russell 1000® Growth Index returning 43.76% and 43.21%, respectively. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. Among international markets, the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.18% and the MSCI Emerging Markets Index (Net)* returned 16.96%.
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. U.S. gross domestic product (GDP) rose at an annualized rate of 4.3% for the fourth quarter of 2020, 6.4% for the first quarter of 2021, and 6.7% for the second quarter of 2021 before falling back to 2.0% for the third quarter of 2021 amid fading government stimuli, persistent inflation, and a new surge in COVID-19 cases. Unemployment, which skyrocketed in April 2020, fell over the reporting period. Inflation, which had remained well below the Fed’s traditional 2% target until it jumped in March 2021, continued to rise through June 2021 and remained elevated through October 2021, largely due to 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.
Asset Class Performance Comparison % returns during the 12 months ended October 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 an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and Schwab Asset Management.
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 Index Funds | Annual Report
Schwab Fundamental Index Funds
The Investment Environment (continued)
Outside the United States, global economies also displayed resilience but were somewhat more constrained amid continuing struggles against COVID-19 and the emergence and spread of the Delta variant. Oil prices rose through most of the reporting period, except for a dip in July and August, on growing demand and reduced production. In the eurozone, GDP growth jumped in the third quarter of 2020, regaining much of its losses from the second quarter, but turned slightly negative for both the fourth quarter of 2020 and the first quarter of 2021. GDP growth turned positive for the second and third quarters of 2021. The United Kingdom, which was particularly hard-hit by the COVID-19 pandemic, suffered its biggest slump in more than three centuries over the course of 2020, effectively wiping out its growth over the past seven years, but posted a small positive gain in GDP for the first quarter of 2021. The United Kingdom removed many of the country’s stringent restrictions during the summer and posted a strong gain in GDP growth for the second quarter of 2021. Japan’s economy, after rebounding sharply in the third quarter of 2020, posted a positive, albeit smaller, gain in the fourth quarter of 2020. Japan’s economy subsequently contracted in the first quarter of 2021 on a resurgence of COVID-19 cases and slow COVID-19 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, maintained positive GDP growth in the fourth quarter of 2020. China’s GDP growth accelerated sharply for the first quarter of 2021 before easing for the subsequent two quarters in part because of the political landscape and an emphasis on domestic consumption over globalization. India, after plunging into one of the worst recessions of any major economy, saw its first positive gain in GDP in the fourth quarter of 2020 and posted a sharp jump in GDP growth for the second quarter of 2021.
For the most part, central banks around the world, including the Fed, 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 United States, 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 needed to achieve a full recovery. The Fed maintained the federal funds rate in a range of 0.00% to 0.25% throughout the reporting period. However, as inflation continued to rise for most of 2021, the Fed tightened its stance, signaling that—due to significant progress made on its twin goals of maximum employment and price stability—it could start to reduce its bond-buying program as soon as late 2021 and could begin to raise interest rates in the next 18 months. In developed international markets, most central banks were similarly accommodative while acknowledging that conditions were changing. The European Central Bank held interest rates at 0.00%, unchanged since March 2016, but reduced the pace of its asset purchase program instituted 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—despite citing moderately improving conditions—vowed to continue to maintain stability in its financial markets through its ongoing programs. The Bank of England maintained its key official bank rate at 0.1% and continued to support its bond-buying program. Emerging markets were mixed. Central banks in China, India, and Indonesia maintained their low rates to help counter the ongoing effects of the COVID-19 pandemic. Mexico, Brazil, Russia, and Pakistan raised their rates, citing a stronger-than-expected recovery or to counteract the impacts of inflation.
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Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental Index Funds
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 funds. 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. |
 | Jeremy Brown, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental US Large Company Index Fund and Schwab Fundamental US Small Company Index Fund. Prior to joining Schwab in 2017, Mr. Brown spent six years with ALPS Advisors, Inc. in Denver, most recently as a senior analyst on the ETF portfolio management and research team where he performed portfolio management, trading, and analytics/research functions for ALPS ETFs and passive funds. Additionally, Mr. Brown led a number of investment research, commentary, industry trend analysis, and sales and marketing support initiatives. |
 | Chuck Craig, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund. Prior to joining 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. |
 | Ferian Juwono, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental US Large Company Index Fund and Schwab Fundamental US Small Company Index Fund. Prior to joining Schwab in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors) where he spent more than three years as a portfolio manager, managing equity index funds for institutional clients, and two years as a senior business analyst. Prior to that, Mr. Juwono worked for more than four years as a senior financial analyst with Union Bank of California. |
 | Jane Qin, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund. Prior to joining 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 Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund. Prior to 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). |
 | Sabya Sinha, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental US Large Company Index Fund and Schwab Fundamental US Small Company Index Fund. Prior to joining Schwab in 2015, Mr. Sinha spent a year at F-Squared Investments on the product development and analytics team. Prior to F-Squared, he worked at IndexIQ Advisors as a senior index portfolio manager for three years and for Bank of America’s Columbia Management subsidiary as a portfolio manager for three years. Mr. Sinha also spent time as a software consultant at DPM Mellon, LLC and an equity trader at Jane Street Capital. |
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Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental US Large Company Index Fund as of October 31, 2021
The Schwab Fundamental US Large Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell RAFITM US Large Company Index (the index). The index measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the U.S. companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks.
Performance. The fund generally tracked the index for the reporting period. The fund returned 51.33% for the 12-month reporting period ended October 31, 2021, while the index returned 51.71%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Over the reporting period, no sectors detracted from the returns of the index or the fund. However, the utilities sector was the smallest contributor to the total return of the fund. Stocks in the utilities sector represented an average weight of approximately 3% of the fund’s investments and returned approximately 13% for the reporting period. One example from this sector is American Electric Power Co., Inc., which generates, transmits, and distributes electric energy, which detracted from the total return of the fund. The fund’s holdings of American Electric Power Co., Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately -3% for the reporting period.
The real estate sector was another small contributor to the total return of the fund, representing an average weight of approximately 2% of the fund’s investments and returning approximately 57% for the reporting period.
The financials sector contributed the most to the total return of the fund. Financials stocks represented an average weight of approximately 16% of the fund’s investments and returned approximately 79% for the reporting period. One example from this sector is Wells Fargo & Co., a diversified financial services company. The fund’s holdings of Wells Fargo & Co. represented an average weight of approximately 1% of the fund’s holdings and returned approximately 142% for the reporting period.
The information technology sector also contributed to the total return of the fund, representing an average weight of approximately 17% of the fund’s investments and returning approximately 43% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
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Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental US Large Company Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Fundamental US Large Company Index Fund (4/2/07) | 51.33% | 15.88% | 14.50% |
| Russell RAFITM US Large Company Index | 51.71% | 16.14% | 14.89% |
| Fundamental U.S. Large Company Spliced Index | 51.71% | 16.14% | 14.85% |
| Russell 1000® Index | 43.51% | 19.16% | 16.30% |
| Fund Category: Morningstar Large Value2 | 43.70% | 12.59% | 12.14% |
| Fund Expense Ratio3: 0.25% | |||
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.
Index ownership—The Schwab Fundamental US Large Company 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 RAFITM US Large Company 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. Charles Schwab Investment Management, Inc. 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 the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. |
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Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental US Large Company Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 723 |
| Weighted Average Market Cap (millions) | $334,640 |
| Price/Earnings Ratio (P/E) | 16.9 |
| Price/Book Ratio (P/B) | 2.6 |
| Portfolio Turnover Rate | 16% 2 |
Sector Weightings % of Investments3
Top Equity Holdings % of Net Assets4
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
| 1 | Excludes derivatives. |
| 2 | Portfolio turnover rate excludes in-kind transactions. |
| 3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 4 | This list is not a recommendation of any security by the investment adviser. |
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Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental US Small Company Index Fund as of October 31, 2021
The Schwab Fundamental US Small Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell RAFITM US Small Company Index (the index). The index measures the performance of the small company size segment by fundamental overall company scores, which are created using as the universe the U.S. companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks.
Performance. The fund generally tracked the index for the reporting period. The fund returned 63.73% for the 12-month reporting period ended October 31, 2021, while the index returned 64.10%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Over the reporting period, no sectors detracted from the returns of the index or the fund. However, the utilities sector was the smallest contributor to the total return of the fund. Stocks in the utilities sector represented an average weight of approximately 3% of the fund’s investments and returned approximately 22% for the reporting period. One example from this sector is PNM Resources, Inc., an energy holding company focused on providing electricity and electric services. The fund’s holdings of PNM Resources, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately 2% for the reporting period.
The consumer staples sector was another small contributor to the total return of the fund, representing an average weight of approximately 4% of the fund’s investments and returning approximately 28% for the reporting period.
The consumer discretionary sector contributed the most to the total return of the fund. Consumer discretionary stocks represented an average weight of approximately 17% of the fund’s investments and returned approximately 79% for the reporting period. One example from this sector is Dillard’s, Inc. The fund’s Class A holdings of Dillard’s, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately 420% for the reporting period.
The industrials sector also contributed to the total return of the fund, representing an average weight of approximately 19% of the fund’s investments and returning approximately 56% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
10
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental US Small Company Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Fundamental US Small Company Index Fund (4/2/07) | 63.73% | 14.29% | 13.44% |
| Russell RAFITM US Small Company Index | 64.10% | 14.48% | 13.80% |
| Fundamental U.S. Small Company Spliced Index | 64.10% | 14.48% | 13.69% |
| Russell 2000® Index | 50.80% | 15.52% | 13.50% |
| Fund Category: Morningstar Small Blend2 | 54.25% | 13.77% | 12.64% |
| Fund Expense Ratio3: 0.25% | |||
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.
Index ownership—The Schwab Fundamental US Small Company 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 RAFITM US Small Company 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. Charles Schwab Investment Management, Inc. 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 the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. |
11
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental US Small Company Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 923 |
| Weighted Average Market Cap (millions) | $6,419 |
| Price/Earnings Ratio (P/E) | 16.2 |
| Price/Book Ratio (P/B) | 2.1 |
| Portfolio Turnover Rate | 36% 2 |
Sector Weightings % of Investments3
Top Equity Holdings % of Net Assets4
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than many other asset classes.
| 1 | Excludes derivatives. |
| 2 | Portfolio turnover rate excludes in-kind transactions. |
| 3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 4 | This list is not a recommendation of any security by the investment adviser. |
12
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental International Large Company Index Fund as of October 31, 2021
The Schwab Fundamental International Large Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell RAFITM Developed ex US Large Company Index (the index). The index measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the developed ex U.S. companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way.
Performance. The fund generally tracked the index for the reporting period. The fund returned 44.03% for the 12-month reporting period ended October 31, 2021, while the index returned 44.65%1. Timing differences in foreign exchange calculations and fair valuation of the fund’s holdings detracted from the fund’s relative performance.2 Differences between the return of the fund and the return of the index may also be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. The stock from the United States, Jackson Financial, Inc., detracted from the total return of the fund. The fund’s Class A holdings of Jackson Financial, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately -16% for the reporting period. Jackson Financial, Inc. was held by the fund for a limited time in September 2021 after it was separated from Prudential plc, an insurance company headquartered in the United Kingdom.
While there were no additional markets that detracted from the total return of the fund, the stock from South Africa, Thungela Resources Ltd., was the smallest contributor to the total return of the fund, representing an average weight of less than 1% of the fund’s investments and returning approximately 13% in U.S. dollar terms for the reporting period. Thungela Resources Ltd. was held by the fund for a limited time in June 2021 after the South African coal business was spun off from Anglo American plc, a global mining company headquartered in the United Kingdom.
Stocks from the United Kingdom contributed the most to the total return of the fund. Stocks from the United Kingdom represented an average weight of approximately 16% of the fund’s investments and returned approximately 61% in U.S. dollar terms for the reporting period. One example from this market is Royal Dutch Shell plc, an oil and gas company. The fund’s Class A holdings of Royal Dutch Shell plc represented an average weight of approximately 1% of the fund’s investments and returned approximately 92% in U.S. dollar terms for the reporting period.
Stocks from Japan also contributed to the total return of the fund, representing an average weight of approximately 24% of the fund’s investments and returning approximately 28% in U.S. dollar terms for the reporting period.
Management views and portfolio holdings may have changed since the report date.
| 1 | The total return cited for the index is calculated net of foreign withholding taxes. |
| 2 | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST). Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. |
13
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental International Large Company Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1,2,3
Average Annual Total Returns1,3
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Fundamental International Large Company Index Fund (4/2/07) | 44.03% | 9.12% | 7.09% |
| Russell RAFITM Developed ex US Large Company Index (Net)2 | 44.65% | 9.17% | 7.11% |
| Fundamental Developed ex-U.S. Large Company Spliced Index | 44.65% | 9.17% | 7.14% |
| MSCI EAFE® Index (Net)2 | 34.18% | 9.79% | 7.37% |
| Fund Category: Morningstar Foreign Large Value4 | 36.44% | 7.12% | 5.76% |
| Fund Expense Ratio5: 0.25% | |||
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.
Index ownership—The Schwab Fundamental International Large Company 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 RAFITM Developed ex US Large Company 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. Charles Schwab Investment Management, Inc. 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 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 | The fund’s performance relative to the index may be affected by fair-value pricing. See financial note 2 for more information. |
| 4 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 5 | As stated in the prospectus. |
14
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental International Large Company Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 944 |
| Weighted Average Market Cap (millions) | $69,086 |
| Price/Earnings Ratio (P/E) | 12.1 |
| Price/Book Ratio (P/B) | 1.2 |
| Portfolio Turnover Rate | 21% |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Excludes derivatives. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
15
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental International Small Company Index Fund as of October 31, 2021
The Schwab Fundamental International Small Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell RAFITM Developed ex US Small Company Index (the index). The index measures the performance of the small company size segment by fundamental overall company scores, which are created using as the universe the developed ex U.S. companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way.
Performance. The fund generally tracked the index for the reporting period. The fund returned 37.25% for the 12-month reporting period ended October 31, 2021, while the index returned 37.75%1. Timing differences in foreign exchange calculations slightly contributed to, and fair valuation of the fund’s holdings detracted from, the fund’s relative performance.2 Differences between the return of the fund and the return of the index may also be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Over the reporting period, no markets detracted from the returns of the index or the fund. However, stocks from Portugal were the smallest contributor to the total return of the fund. Stocks from Portugal represented an average weight of less than 1% of the fund’s investments and returned approximately 66% in U.S. dollar terms for the reporting period. One example from this market is Mota-Engil SGPS, S.A., a construction company. The fund’s holdings of Mota-Engil SGPS, S.A. represented an average weight of less than 1% of the fund’s investments and returned approximately 22% in U.S. dollar terms for the reporting period.
Stocks from Ireland were another small contributor to the total return of the fund, representing an average weight of less than 1% of the fund’s investments and returning approximately 51% in U.S. dollar terms for the reporting period.
Stocks from the United Kingdom contributed to the total return of the fund. Stocks from the United Kingdom represented an average weight of approximately 11% of the fund’s investments and returned approximately 55% in U.S. dollar terms for the reporting period. One example from this market is Grafton Group plc, a building supply company. The fund’s holdings of Grafton Group plc represented an average weight of less than 1% of the fund’s investments and returned approximately 119% in U.S. dollar terms for the reporting period.
Stocks from Canada also contributed to the total return of the fund, representing an average weight of approximately 8% of the fund’s investments and returning approximately 81% in U.S. dollar terms for the reporting period.
Management views and portfolio holdings may have changed since the report date.
| 1 | The total return cited for the index is calculated net of foreign withholding taxes. |
| 2 | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST). Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. |
16
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental International Small Company Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1,2,3
Average Annual Total Returns1,3
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Fundamental International Small Company Index Fund (1/31/08) | 37.25% | 8.85% | 8.59% |
| Russell RAFITM Developed ex US Small Company Index (Net)2 | 37.75% | 9.08% | 9.16% |
| Fundamental Developed ex-U.S. Small Company Spliced Index | 37.75% | 9.08% | 8.86% |
| S&P Developed ex-U.S. Small Cap Index (Net)2 | 36.39% | 11.01% | 9.30% |
| Fund Category: Morningstar Foreign Small/Mid Value4 | 43.61% | 8.67% | 8.12% |
| Fund Expense Ratio5: 0.39% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. 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.
Index ownership—The Schwab Fundamental International Small Company 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 RAFITM Developed ex US Small Company 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. Charles Schwab Investment Management, Inc. 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 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 | The fund’s performance relative to the index may be affected by fair-value pricing. See financial note 2 for more information. |
| 4 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 5 | As stated in the prospectus. |
17
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental International Small Company Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 1,660 |
| Weighted Average Market Cap (millions) | $4,349 |
| Price/Earnings Ratio (P/E) | 12.6 |
| Price/Book Ratio (P/B) | 1.2 |
| Portfolio Turnover Rate | 35% |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Excludes derivatives. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
18
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental Emerging Markets Large Company Index Fund as of October 31, 2021
The Schwab Fundamental Emerging Markets Large Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell RAFITM Emerging Markets Large Company Index (the index). The index measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the emerging markets companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund invests in a representative sample of securities included in the index which, when taken together, are expected to perform similarly to the index as a whole. Due to the use of sampling techniques, the fund may not hold all of the securities in the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way.
Performance. The fund generally tracked the index for the reporting period. The fund returned 40.58%1 for the 12-month reporting period ended October 31, 2021, while the index returned 42.09%2. Timing differences in foreign exchange calculations and fair valuation of the fund’s holdings detracted from, the fund’s relative performance.3 Differences between the return of the fund and the return of the index may also be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Contributors and Detractors. Stocks from the Philippines detracted from the total return of the fund. Stocks from the Philippines represented an average weight of less than 1% of the fund’s investments and returned approximately -7% in U.S. dollar terms for the reporting period. One example from this market is PLDT, Inc., a telecommunications company. The fund’s holdings of PLDT, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately -8% in U.S. dollar terms for the reporting period. The fund’s position in PLDT, Inc. was sold prior to the end of the reporting period.
While there were no additional markets that detracted from the total return of the fund over the reporting period, Egyptian stocks were the smallest contributor to the total return of the fund, representing an average weight of less than 1% of the fund’s investments and returning approximately 7% in U.S. dollar terms for the reporting period.
Stocks from Russia contributed to the total return of the fund. Russian stocks represented an average weight of approximately 12% of the fund’s investments and returned approximately 99% in U.S. dollar terms for the reporting period. One example from this market is Gazprom PJSC, a natural gas company. The fund’s holdings of Gazprom PJSC represented an average weight of approximately 3% of the fund’s investments and returned approximately 165% in U.S. dollar terms for the reporting period.
Taiwanese stocks also contributed to the total return of the fund, representing an average weight of approximately 19% of the fund’s investments and returning approximately 46% in U.S. dollar terms for the reporting period.
Management views and portfolio holdings may have changed since the report date.
| 1 | Total return for the report period above differs from the return in the Financial Highlights. The total return presented above is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
| 2 | The total return cited for the index is calculated net of foreign withholding taxes. |
| 3 | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST). Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. |
19
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1,2,3
Average Annual Total Returns1,3
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Fundamental Emerging Markets Large Company Index Fund (1/31/08) | 40.58% 4 | 8.47% | 4.13% |
| Russell RAFITM Emerging Markets Large Company Index (Net)2 | 42.09% | 9.17% | 5.07% |
| Fundamental Emerging Markets Large Company Spliced Index | 42.09% | 9.17% | 4.90% |
| MSCI Emerging Markets Index (Net)2 | 16.96% | 9.39% | 4.88% |
| Fund Category: Morningstar Diversified Emerging Markets5 | 21.15% | 9.37% | 5.27% |
| Fund Expense Ratio6: 0.39% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. 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.
Index ownership—The Schwab Fundamental Emerging Markets Large Company 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 RAFITM Emerging Markets Large Company 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. Charles Schwab Investment Management, Inc. 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 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 | The fund’s performance relative to the index may be affected by fair-value pricing. See financial note 2 for more information. |
| 4 | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
| 5 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 6 | As stated in the prospectus. |
20
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics1
| Number of Holdings | 334 |
| Weighted Average Market Cap (millions) | $83,467 |
| Price/Earnings Ratio (P/E) | 7.9 |
| Price/Book Ratio (P/B) | 1.2 |
| Portfolio Turnover Rate | 32% |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.
| 1 | Excludes derivatives. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
21
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental Index Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2021 and held through October 31, 2021.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| EXPENSE RATIO (ANNUALIZED) 1 | BEGINNING ACCOUNT VALUE AT 5/1/21 | ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 10/31/21 | EXPENSES PAID DURING PERIOD 5/1/21-10/31/212 | |
| Schwab Fundamental US Large Company Index Fund | ||||
| Actual Return | 0.25% | $1,000.00 | $1,067.70 | $1.30 |
| Hypothetical 5% Return | 0.25% | $1,000.00 | $1,023.95 | $1.28 |
| Schwab Fundamental US Small Company Index Fund | ||||
| Actual Return | 0.25% | $1,000.00 | $1,058.60 | $1.30 |
| Hypothetical 5% Return | 0.25% | $1,000.00 | $1,023.95 | $1.28 |
| Schwab Fundamental International Large Company Index Fund | ||||
| Actual Return | 0.25% | $1,000.00 | $1,033.30 | $1.28 |
| Hypothetical 5% Return | 0.25% | $1,000.00 | $1,023.95 | $1.28 |
| Schwab Fundamental International Small Company Index Fund | ||||
| Actual Return | 0.39% | $1,000.00 | $1,019.80 | $1.99 |
| Hypothetical 5% Return | 0.39% | $1,000.00 | $1,023.24 | $1.99 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | ||||
| Actual Return | 0.39% | $1,000.00 | $1,037.50 | $2.00 |
| Hypothetical 5% Return | 0.39% | $1,000.00 | $1,023.24 | $1.99 |
| 1 | Based on the most recent six-month expense ratio. |
| 2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
22
Schwab Fundamental Index Funds | Annual Report
Schwab Fundamental US Large Company Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $16.28 | $17.56 | $17.47 | $16.89 | $15.12 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.39 | 0.42 | 0.42 | 0.38 | 0.35 | |
| Net realized and unrealized gains (losses) | 7.64 | (0.75) | 1.08 | 0.76 | 2.52 | |
| Total from investment operations | 8.03 | (0.33) | 1.50 | 1.14 | 2.87 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.44) | (0.43) | (0.42) | (0.36) | (0.34) | |
| Distributions from net realized gains | (0.68) | (0.52) | (0.99) | (0.20) | (0.76) | |
| Total distributions | (1.12) | (0.95) | (1.41) | (0.56) | (1.10) | |
| Net asset value at end of period | $23.19 | $16.28 | $17.56 | $17.47 | $16.89 | |
| Total return | 51.33% | (2.33%) | 10.56% | 6.83% | 19.69% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.25% | 0.25% | 0.25% | 0.25% | 0.31% 2 | |
| Net operating expenses | N/A | N/A | N/A | N/A 3 | 0.30% 2 | |
| Net investment income (loss) | 1.87% | 2.57% | 2.53% | 2.17% | 2.19% | |
| Portfolio turnover rate | 16% 4 | 13% | 20% | 10% | 15% | |
| Net assets, end of period (x 1,000,000) | $6,821 | $4,547 | $5,237 | $4,887 | $5,367 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective May 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 3 | Effective May 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
| 4 | Portfolio turnover rate excludes in-kind transactions. |
23
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.6% OF NET ASSETS | ||
| Automobiles & Components 1.9% | ||
| Adient plc * | 64,196 | 2,671,837 |
| Aptiv plc * | 42,147 | 7,286,795 |
| Autoliv, Inc. | 28,188 | 2,730,008 |
| BorgWarner, Inc. | 105,963 | 4,775,752 |
| Dana, Inc. | 76,829 | 1,704,835 |
| Ford Motor Co. * | 2,784,515 | 47,559,516 |
| General Motors Co. * | 719,785 | 39,177,898 |
| Gentex Corp. | 64,227 | 2,272,993 |
| Harley-Davidson, Inc. | 61,382 | 2,239,829 |
| Lear Corp. | 35,503 | 6,101,191 |
| Tesla, Inc. * | 2,234 | 2,488,676 |
| The Goodyear Tire & Rubber Co. * | 393,098 | 7,516,034 |
| Thor Industries, Inc. | 20,174 | 2,056,941 |
| Visteon Corp. * | 21,103 | 2,388,438 |
| 130,970,743 | ||
| Banks 7.5% | ||
| Bank of America Corp. | 1,840,216 | 87,925,521 |
| CIT Group, Inc. | 55,263 | 2,737,176 |
| Citigroup, Inc. | 1,074,429 | 74,307,510 |
| Citizens Financial Group, Inc. | 131,435 | 6,227,390 |
| Comerica, Inc. | 52,320 | 4,451,909 |
| Credicorp Ltd. | 23,661 | 3,067,885 |
| East West Bancorp, Inc. | 20,734 | 1,647,938 |
| Fifth Third Bancorp | 213,916 | 9,311,764 |
| First Republic Bank | 9,543 | 2,064,437 |
| Huntington Bancshares, Inc. | 270,022 | 4,250,146 |
| JPMorgan Chase & Co. | 713,925 | 121,288,718 |
| KeyCorp | 213,976 | 4,979,222 |
| M&T Bank Corp. | 44,204 | 6,503,293 |
| New York Community Bancorp, Inc. | 134,452 | 1,671,238 |
| PacWest Bancorp | 38,349 | 1,820,427 |
| People's United Financial, Inc. | 80,447 | 1,378,862 |
| Popular, Inc. | 20,255 | 1,649,567 |
| Regions Financial Corp. | 218,493 | 5,173,914 |
| SVB Financial Group * | 3,436 | 2,464,986 |
| The PNC Financial Services Group, Inc. | 104,085 | 21,965,058 |
| Truist Financial Corp. | 177,405 | 11,259,895 |
| U.S. Bancorp | 395,158 | 23,855,689 |
| Wells Fargo & Co. | 2,164,470 | 110,734,285 |
| Zions Bancorp NA | 44,899 | 2,828,188 |
| 513,565,018 | ||
| Capital Goods 7.1% | ||
| 3M Co. | 134,528 | 24,037,463 |
| A.O. Smith Corp. | 25,389 | 1,855,174 |
| Acuity Brands, Inc. | 12,985 | 2,667,509 |
| AECOM * | 51,909 | 3,549,018 |
| AerCap Holdings N.V. * | 72,761 | 4,295,809 |
| AGCO Corp. | 19,624 | 2,398,249 |
| Allegion plc | 9,834 | 1,261,702 |
| Allison Transmission Holdings, Inc. | 58,988 | 1,967,840 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AMETEK, Inc. | 24,391 | 3,229,368 |
| Carlisle Cos., Inc. | 13,527 | 3,015,439 |
| Carrier Global Corp. | 187,145 | 9,774,583 |
| Caterpillar, Inc. | 102,640 | 20,939,586 |
| Cummins, Inc. | 43,447 | 10,420,329 |
| Curtiss-Wright Corp. | 10,976 | 1,401,416 |
| Deere & Co. | 41,388 | 14,167,526 |
| Donaldson Co., Inc. | 24,383 | 1,463,224 |
| Dover Corp. | 25,355 | 4,287,023 |
| Eaton Corp. plc | 96,722 | 15,935,917 |
| EMCOR Group, Inc. | 21,080 | 2,561,009 |
| Emerson Electric Co. | 142,380 | 13,812,284 |
| Fastenal Co. | 74,443 | 4,249,206 |
| Flowserve Corp. | 41,869 | 1,407,636 |
| Fluor Corp. * | 197,276 | 3,835,045 |
| Fortive Corp. | 32,466 | 2,458,001 |
| Fortune Brands Home & Security, Inc. | 29,176 | 2,958,446 |
| GATX Corp. | 14,612 | 1,385,948 |
| General Dynamics Corp. | 82,336 | 16,693,624 |
| General Electric Co. | 420,286 | 44,075,393 |
| Graco, Inc. | 17,050 | 1,281,819 |
| Hexcel Corp. * | 27,800 | 1,577,372 |
| Honeywell International, Inc. | 112,699 | 24,638,255 |
| Howmet Aerospace, Inc. | 106,605 | 3,165,102 |
| Hubbell, Inc. | 11,160 | 2,224,969 |
| Huntington Ingalls Industries, Inc. | 15,604 | 3,163,399 |
| IDEX Corp. | 8,459 | 1,882,720 |
| Illinois Tool Works, Inc. | 55,207 | 12,580,019 |
| ITT, Inc. | 15,571 | 1,464,764 |
| Johnson Controls International plc | 163,115 | 11,967,748 |
| L3Harris Technologies, Inc. | 22,904 | 5,280,288 |
| Lennox International, Inc. | 4,277 | 1,280,021 |
| Lincoln Electric Holdings, Inc. | 12,967 | 1,846,501 |
| Lockheed Martin Corp. | 46,845 | 15,567,530 |
| Masco Corp. | 49,530 | 3,246,692 |
| MasTec, Inc. * | 15,695 | 1,398,895 |
| MSC Industrial Direct Co., Inc., Class A | 16,521 | 1,388,921 |
| Nordson Corp. | 6,727 | 1,710,071 |
| Northrop Grumman Corp. | 35,561 | 12,703,100 |
| nVent Electric plc | 44,392 | 1,573,696 |
| Oshkosh Corp. | 23,130 | 2,474,910 |
| Otis Worldwide Corp. | 54,550 | 4,380,911 |
| Owens Corning | 35,437 | 3,310,170 |
| PACCAR, Inc. | 103,135 | 9,242,959 |
| Parker-Hannifin Corp. | 22,834 | 6,772,336 |
| Pentair plc | 31,074 | 2,298,544 |
| Quanta Services, Inc. | 37,517 | 4,550,062 |
| Raytheon Technologies Corp. | 273,565 | 24,308,986 |
| Regal Rexnord Corp. | 15,262 | 2,324,861 |
| Rockwell Automation, Inc. | 17,306 | 5,527,536 |
| Roper Technologies, Inc. | 7,550 | 3,683,419 |
| Sensata Technologies Holding plc * | 29,879 | 1,646,333 |
| Snap-on, Inc. | 13,899 | 2,824,694 |
| Spirit AeroSystems Holdings, Inc., Class A | 74,360 | 3,070,324 |
| Stanley Black & Decker, Inc. | 26,958 | 4,845,161 |
| Textron, Inc. | 80,249 | 5,926,389 |
| The Boeing Co. * | 147,434 | 30,523,261 |
24
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| The Toro Co. | 13,114 | 1,251,994 |
| Trane Technologies plc | 33,067 | 5,982,812 |
| TransDigm Group, Inc. * | 6,213 | 3,875,794 |
| UFP Industries, Inc. | 21,896 | 1,791,750 |
| United Rentals, Inc. * | 19,454 | 7,375,206 |
| Univar Solutions, Inc. * | 69,640 | 1,781,391 |
| W.W. Grainger, Inc. | 10,840 | 5,020,112 |
| Watsco, Inc. | 6,529 | 1,890,668 |
| WESCO International, Inc. * | 31,604 | 4,094,614 |
| Westinghouse Air Brake Technologies Corp. | 23,701 | 2,150,392 |
| Xylem, Inc. | 18,814 | 2,456,920 |
| 485,428,158 | ||
| Commercial & Professional Services 0.9% | ||
| ABM Industries, Inc. | 31,407 | 1,382,222 |
| Booz Allen Hamilton Holding Corp. | 20,841 | 1,810,249 |
| CACI International, Inc., Class A * | 5,597 | 1,609,921 |
| Cintas Corp. | 9,310 | 4,032,161 |
| Copart, Inc. * | 10,614 | 1,648,248 |
| CoreCivic, Inc. * | 168,895 | 1,454,186 |
| Equifax, Inc. | 10,035 | 2,784,010 |
| IHS Markit Ltd. | 26,838 | 3,508,263 |
| Jacobs Engineering Group, Inc. | 30,341 | 4,260,483 |
| KBR, Inc. | 36,372 | 1,543,628 |
| Kelly Services, Inc., Class A | 55,460 | 999,944 |
| Leidos Holdings, Inc. | 35,239 | 3,523,195 |
| ManpowerGroup, Inc. | 47,930 | 4,632,435 |
| Nielsen Holdings plc | 169,493 | 3,432,233 |
| Republic Services, Inc. | 38,528 | 5,185,869 |
| Robert Half International, Inc. | 35,209 | 3,981,082 |
| Science Applications International Corp. | 16,526 | 1,483,704 |
| Verisk Analytics, Inc. | 9,384 | 1,973,174 |
| Waste Management, Inc. | 73,188 | 11,726,913 |
| 60,971,920 | ||
| Consumer Durables & Apparel 1.4% | ||
| Brunswick Corp. | 19,437 | 1,809,390 |
| Capri Holdings Ltd. * | 64,838 | 3,451,975 |
| Carter's, Inc. | 17,344 | 1,708,731 |
| D.R. Horton, Inc. | 70,026 | 6,251,221 |
| Garmin Ltd. | 17,464 | 2,507,830 |
| Hanesbrands, Inc. | 135,849 | 2,314,867 |
| Hasbro, Inc. | 24,531 | 2,349,089 |
| Leggett & Platt, Inc. | 42,174 | 1,975,852 |
| Lennar Corp., Class A | 59,878 | 5,983,608 |
| Lululemon Athletica, Inc. * | 5,661 | 2,638,083 |
| Mattel, Inc. * | 77,674 | 1,694,070 |
| Mohawk Industries, Inc. * | 20,678 | 3,664,348 |
| Newell Brands, Inc. | 102,264 | 2,340,823 |
| NIKE, Inc., Class B | 114,266 | 19,115,559 |
| NVR, Inc. * | 714 | 3,494,887 |
| Polaris, Inc. | 17,220 | 1,979,439 |
| PulteGroup, Inc. | 91,161 | 4,383,021 |
| PVH Corp. * | 38,108 | 4,166,348 |
| Ralph Lauren Corp. | 21,752 | 2,766,202 |
| Skechers U.S.A., Inc., Class A * | 34,423 | 1,590,687 |
| Tapestry, Inc. | 84,542 | 3,295,447 |
| Taylor Morrison Home Corp. * | 46,629 | 1,423,583 |
| Toll Brothers, Inc. | 38,451 | 2,313,597 |
| Tri Pointe Homes, Inc. * | 59,511 | 1,439,571 |
| Under Armour, Inc., Class A * | 32,199 | 707,090 |
| Under Armour, Inc., Class C * | 34,715 | 655,419 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| VF Corp. | 68,452 | 4,988,782 |
| Whirlpool Corp. | 25,396 | 5,354,239 |
| 96,363,758 | ||
| Consumer Services 2.1% | ||
| Aramark | 87,437 | 3,189,702 |
| Booking Holdings, Inc. * | 6,789 | 16,434,675 |
| Carnival Corp. * | 327,633 | 7,260,347 |
| Chipotle Mexican Grill, Inc. * | 1,674 | 2,978,096 |
| Cracker Barrel Old Country Store, Inc. | 9,314 | 1,240,345 |
| Darden Restaurants, Inc. | 23,004 | 3,315,797 |
| Domino’s Pizza, Inc. | 5,801 | 2,836,515 |
| Expedia Group, Inc. * | 24,708 | 4,062,242 |
| H&R Block, Inc. | 71,198 | 1,642,538 |
| Hilton Worldwide Holdings, Inc. * | 31,737 | 4,568,541 |
| Las Vegas Sands Corp. * | 106,344 | 4,127,211 |
| Marriott International, Inc., Class A * | 38,865 | 6,219,177 |
| Marriott Vacations Worldwide Corp. | 8,093 | 1,272,382 |
| McDonald’s Corp. | 122,956 | 30,191,846 |
| MGM Resorts International | 126,141 | 5,948,810 |
| Norwegian Cruise Line Holdings Ltd. * | 122,866 | 3,160,114 |
| Royal Caribbean Cruises Ltd. * | 64,096 | 5,411,625 |
| Service Corp. International | 26,139 | 1,790,260 |
| Six Flags Entertainment Corp. * | 35,411 | 1,456,455 |
| Starbucks Corp. | 179,517 | 19,041,368 |
| The Wendy's Co. | 58,729 | 1,309,657 |
| Travel & Leisure Co. | 30,124 | 1,636,938 |
| Vail Resorts, Inc. | 4,403 | 1,517,758 |
| Wynn Resorts Ltd. * | 21,846 | 1,961,771 |
| Yum China Holdings, Inc. | 55,292 | 3,156,067 |
| Yum! Brands, Inc. | 56,629 | 7,075,227 |
| 142,805,464 | ||
| Diversified Financials 6.1% | ||
| Affiliated Managers Group, Inc. | 14,709 | 2,469,347 |
| AGNC Investment Corp. | 89,792 | 1,429,489 |
| Ally Financial, Inc. | 177,636 | 8,480,343 |
| American Express Co. | 157,805 | 27,423,353 |
| Ameriprise Financial, Inc. | 34,777 | 10,507,175 |
| Annaly Capital Management, Inc. | 237,018 | 2,005,172 |
| Berkshire Hathaway, Inc., Class A * | 74 | 32,034,748 |
| Berkshire Hathaway, Inc., Class B * | 251,442 | 72,166,368 |
| BlackRock, Inc. | 15,647 | 14,762,319 |
| Capital One Financial Corp. | 186,036 | 28,097,017 |
| Cboe Global Markets, Inc. | 11,995 | 1,582,620 |
| CME Group, Inc. | 28,135 | 6,205,174 |
| Discover Financial Services | 127,364 | 14,432,888 |
| Equitable Holdings, Inc. | 83,567 | 2,799,494 |
| Evercore, Inc., Class A | 11,153 | 1,693,472 |
| Franklin Resources, Inc. | 187,529 | 5,905,288 |
| Intercontinental Exchange, Inc. | 46,910 | 6,495,159 |
| Invesco Ltd. | 154,894 | 3,935,857 |
| Jackson Financial, Inc., Class A * | 10,650 | 288,296 |
| Janus Henderson Group plc | 38,511 | 1,790,761 |
| Jefferies Financial Group, Inc. | 59,854 | 2,573,722 |
| KKR & Co., Inc. | 45,416 | 3,618,293 |
| Lazard Ltd., Class A | 36,604 | 1,793,230 |
| LPL Financial Holdings, Inc. | 15,024 | 2,464,236 |
| Moody's Corp. | 11,370 | 4,595,185 |
| Morgan Stanley | 248,982 | 25,590,370 |
| MSCI, Inc. | 3,407 | 2,265,246 |
| Nasdaq, Inc. | 10,572 | 2,218,746 |
| Navient Corp. | 219,476 | 4,323,677 |
| New Residential Investment Corp. | 218,121 | 2,477,855 |
| Northern Trust Corp. | 37,143 | 4,570,075 |
| OneMain Holdings, Inc. | 24,695 | 1,304,143 |
25
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| PROG Holdings, Inc. | 24,734 | 1,000,490 |
| Raymond James Financial, Inc. | 28,138 | 2,774,125 |
| S&P Global, Inc. | 18,306 | 8,679,973 |
| SEI Investments Co. | 25,411 | 1,601,909 |
| Starwood Property Trust, Inc. | 64,283 | 1,637,288 |
| State Street Corp. | 85,441 | 8,420,211 |
| Synchrony Financial | 341,749 | 15,874,241 |
| T. Rowe Price Group, Inc. | 42,936 | 9,311,960 |
| The Bank of New York Mellon Corp. | 286,830 | 16,980,336 |
| The Charles Schwab Corp. (a) | 87,020 | 7,138,251 |
| The Goldman Sachs Group, Inc. | 85,952 | 35,528,259 |
| Voya Financial, Inc. | 37,743 | 2,633,329 |
| 413,879,490 | ||
| Energy 8.9% | ||
| Antero Resources Corp. * | 219,897 | 4,369,353 |
| APA Corp. | 159,850 | 4,189,668 |
| Baker Hughes Co. | 393,570 | 9,870,736 |
| Cheniere Energy, Inc. * | 19,794 | 2,046,700 |
| Chevron Corp. | 888,938 | 101,774,512 |
| ConocoPhillips | 506,306 | 37,714,734 |
| Coterra Energy, Inc. | 151,670 | 3,233,604 |
| Delek US Holdings, Inc. * | 91,701 | 1,783,584 |
| Devon Energy Corp. | 137,481 | 5,510,238 |
| Diamondback Energy, Inc. | 34,350 | 3,681,977 |
| DTE Midstream LLC * | 22,398 | 1,074,208 |
| EOG Resources, Inc. | 139,866 | 12,932,010 |
| Exxon Mobil Corp. | 2,650,758 | 170,894,368 |
| Halliburton Co. | 324,147 | 8,100,434 |
| Helmerich & Payne, Inc. | 89,177 | 2,768,054 |
| Hess Corp. | 46,058 | 3,803,009 |
| HollyFrontier Corp. | 191,231 | 6,463,608 |
| Kinder Morgan, Inc. | 764,116 | 12,798,943 |
| Marathon Oil Corp. | 492,900 | 8,044,128 |
| Marathon Petroleum Corp. | 504,098 | 33,235,181 |
| Murphy Oil Corp. | 127,266 | 3,541,813 |
| Nabors Industries Ltd. * | 19,453 | 1,993,933 |
| NOV, Inc. * | 402,357 | 5,641,045 |
| Occidental Petroleum Corp. | 552,422 | 18,522,710 |
| ONEOK, Inc. | 126,040 | 8,018,665 |
| Ovintiv, Inc. | 51,148 | 1,919,073 |
| Patterson-UTI Energy, Inc. | 209,284 | 1,791,471 |
| PBF Energy, Inc., Class A * | 342,211 | 4,999,703 |
| Peabody Energy Corp. * | 421,962 | 5,017,128 |
| Phillips 66 | 420,208 | 31,423,154 |
| Pioneer Natural Resources Co. | 31,645 | 5,916,982 |
| Schlumberger N.V. | 680,132 | 21,941,058 |
| Targa Resources Corp. | 106,997 | 5,849,526 |
| The Williams Cos., Inc. | 314,822 | 8,843,350 |
| Transocean Ltd. * | 655,720 | 2,314,692 |
| Valero Energy Corp. | 481,693 | 37,249,320 |
| World Fuel Services Corp. | 168,706 | 5,150,594 |
| 604,423,266 | ||
| Food & Staples Retailing 2.9% | ||
| Casey's General Stores, Inc. | 11,877 | 2,274,920 |
| Costco Wholesale Corp. | 80,402 | 39,520,799 |
| Performance Food Group Co. * | 87,793 | 3,970,877 |
| Rite Aid Corp. * | 124,894 | 1,697,309 |
| SpartanNash, Co. | 76,776 | 1,776,597 |
| Sprouts Farmers Market, Inc. * | 59,521 | 1,317,795 |
| Sysco Corp. | 125,881 | 9,680,249 |
| The Kroger Co. | 571,586 | 22,874,872 |
| U.S. Foods Holding Corp. * | 139,598 | 4,839,863 |
| United Natural Foods, Inc. * | 90,581 | 3,930,310 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Walgreens Boots Alliance, Inc. | 703,256 | 33,067,097 |
| Walmart, Inc. | 493,964 | 73,808,101 |
| 198,758,789 | ||
| Food, Beverage & Tobacco 3.8% | ||
| Altria Group, Inc. | 577,234 | 25,461,792 |
| Archer-Daniels-Midland Co. | 357,990 | 22,997,278 |
| Bunge Ltd. | 110,765 | 10,261,270 |
| Campbell Soup Co. | 44,915 | 1,794,354 |
| Coca-Cola Europacific Partners plc | 65,392 | 3,442,889 |
| Conagra Brands, Inc. | 103,211 | 3,323,394 |
| Constellation Brands, Inc., Class A | 21,677 | 4,699,790 |
| Darling Ingredients, Inc. * | 21,684 | 1,832,732 |
| Flowers Foods, Inc. | 62,057 | 1,535,911 |
| General Mills, Inc. | 142,768 | 8,823,062 |
| Hormel Foods Corp. | 60,559 | 2,562,857 |
| Ingredion, Inc. | 34,164 | 3,253,438 |
| Kellogg Co. | 62,610 | 3,837,993 |
| Keurig Dr Pepper, Inc. | 57,975 | 2,092,318 |
| McCormick & Co., Inc. - Non Voting Shares | 24,239 | 1,944,695 |
| Molson Coors Beverage Co., Class B | 86,186 | 3,799,941 |
| Mondelez International, Inc., Class A | 316,267 | 19,210,057 |
| Monster Beverage Corp. * | 32,820 | 2,789,700 |
| PepsiCo, Inc. | 242,797 | 39,235,995 |
| Philip Morris International, Inc. | 330,627 | 31,257,476 |
| Post Holdings, Inc. * | 13,225 | 1,342,073 |
| Sanderson Farms, Inc. | 9,978 | 1,890,332 |
| The Coca-Cola Co. | 568,286 | 32,034,282 |
| The Hershey Co. | 18,418 | 3,229,596 |
| The JM Smucker Co. | 36,825 | 4,524,319 |
| The Kraft Heinz Co. | 215,419 | 7,731,388 |
| Tyson Foods, Inc., Class A | 158,810 | 12,700,036 |
| 257,608,968 | ||
| Health Care Equipment & Services 6.0% | ||
| Abbott Laboratories | 141,293 | 18,211,255 |
| Align Technology, Inc. * | 2,084 | 1,301,187 |
| AmerisourceBergen Corp. | 58,901 | 7,187,100 |
| Anthem, Inc. | 85,279 | 37,107,451 |
| Baxter International, Inc. | 83,607 | 6,601,609 |
| Becton, Dickinson & Co. | 27,789 | 6,657,967 |
| Boston Scientific Corp. * | 96,053 | 4,142,766 |
| Cardinal Health, Inc. | 253,054 | 12,098,512 |
| Centene Corp. * | 139,014 | 9,903,357 |
| Cerner Corp. | 58,438 | 4,341,359 |
| Cigna Corp. | 63,649 | 13,596,063 |
| CVS Health Corp. | 610,082 | 54,468,121 |
| Danaher Corp. | 32,728 | 10,203,609 |
| DaVita, Inc. * | 36,725 | 3,791,489 |
| Dentsply Sirona, Inc. | 39,284 | 2,247,438 |
| Edwards Lifesciences Corp. * | 22,276 | 2,669,110 |
| Encompass Health Corp. | 19,537 | 1,241,772 |
| Envista Holdings Corp. * | 27,251 | 1,065,514 |
| HCA Healthcare, Inc. | 63,185 | 15,825,315 |
| Henry Schein, Inc. * | 43,962 | 3,356,499 |
| Hologic, Inc. * | 26,039 | 1,908,919 |
| Humana, Inc. | 42,710 | 19,781,564 |
| Intuitive Surgical, Inc. * | 11,344 | 4,096,659 |
| Laboratory Corp. of America Holdings * | 16,816 | 4,826,528 |
| Magellan Health, Inc. * | 16,181 | 1,534,444 |
| McKesson Corp. | 91,358 | 18,991,501 |
| Medtronic plc | 229,379 | 27,493,367 |
| Molina Healthcare, Inc. * | 11,081 | 3,276,873 |
| Patterson Cos., Inc. | 48,252 | 1,508,358 |
| Quest Diagnostics, Inc. | 35,592 | 5,224,194 |
26
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| ResMed, Inc. | 7,832 | 2,059,111 |
| STERIS plc | 10,688 | 2,498,213 |
| Stryker Corp. | 29,491 | 7,846,670 |
| Tenet Healthcare Corp. * | 47,725 | 3,419,973 |
| The Cooper Cos., Inc. | 3,395 | 1,415,443 |
| UnitedHealth Group, Inc. | 167,486 | 77,122,278 |
| Universal Health Services, Inc., Class B | 31,803 | 3,946,752 |
| Zimmer Biomet Holdings, Inc. | 26,072 | 3,731,425 |
| 406,699,765 | ||
| Household & Personal Products 1.2% | ||
| Church & Dwight Co., Inc. | 33,186 | 2,899,129 |
| Colgate-Palmolive Co. | 121,987 | 9,294,190 |
| Kimberly-Clark Corp. | 53,612 | 6,942,218 |
| Nu Skin Enterprises, Inc., Class A | 24,533 | 985,000 |
| The Clorox Co. | 17,745 | 2,892,612 |
| The Estee Lauder Cos., Inc., Class A | 15,936 | 5,168,523 |
| The Procter & Gamble Co. | 385,098 | 55,065,163 |
| 83,246,835 | ||
| Insurance 3.7% | ||
| Aflac, Inc. | 224,957 | 12,073,442 |
| Alleghany Corp. * | 3,546 | 2,309,793 |
| American Financial Group, Inc. | 16,016 | 2,178,817 |
| American International Group, Inc. | 624,995 | 36,930,955 |
| Aon plc, Class A | 34,113 | 10,913,431 |
| Arch Capital Group Ltd. * | 55,563 | 2,323,645 |
| Arthur J. Gallagher & Co. | 19,252 | 3,227,983 |
| Assurant, Inc. | 10,632 | 1,715,048 |
| Assured Guaranty Ltd. | 56,278 | 3,127,931 |
| Athene Holding Ltd., Class A * | 24,792 | 2,157,152 |
| Axis Capital Holdings Ltd. | 26,332 | 1,371,107 |
| Brown & Brown, Inc. | 24,483 | 1,545,122 |
| Chubb Ltd. | 82,082 | 16,037,181 |
| Cincinnati Financial Corp. | 29,092 | 3,532,933 |
| CNO Financial Group, Inc. | 68,477 | 1,653,035 |
| Everest Re Group Ltd. | 11,104 | 2,903,696 |
| Fidelity National Financial, Inc. | 79,529 | 3,810,234 |
| First American Financial Corp. | 34,993 | 2,559,388 |
| Genworth Financial, Inc., Class A * | 473,682 | 1,946,833 |
| Globe Life, Inc. | 25,471 | 2,267,428 |
| Lincoln National Corp. | 80,279 | 5,792,130 |
| Loews Corp. | 90,576 | 5,078,596 |
| Markel Corp. * | 1,962 | 2,576,361 |
| Marsh & McLennan Cos., Inc. | 67,062 | 11,185,942 |
| MetLife, Inc. | 271,336 | 17,039,901 |
| Old Republic International Corp. | 100,960 | 2,607,797 |
| Primerica, Inc. | 9,029 | 1,519,039 |
| Principal Financial Group, Inc. | 81,401 | 5,461,193 |
| Prudential Financial, Inc. | 176,897 | 19,467,515 |
| Reinsurance Group of America, Inc. | 23,604 | 2,787,160 |
| The Allstate Corp. | 115,675 | 14,305,527 |
| The Hanover Insurance Group, Inc. | 11,233 | 1,415,358 |
| The Hartford Financial Services Group, Inc. | 120,819 | 8,811,330 |
| The Progressive Corp. | 89,115 | 8,455,231 |
| The Travelers Cos., Inc. | 133,053 | 21,405,567 |
| Unum Group | 137,807 | 3,509,944 |
| W.R. Berkley Corp. | 29,637 | 2,359,105 |
| Willis Towers Watson plc | 14,305 | 3,465,815 |
| 251,828,665 | ||
| Materials 3.3% | ||
| Air Products & Chemicals, Inc. | 25,032 | 7,504,844 |
| Albemarle Corp. | 13,728 | 3,438,452 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Alcoa Corp. | 123,176 | 5,659,937 |
| AptarGroup, Inc. | 9,484 | 1,145,477 |
| Arconic Corp. * | 62,316 | 1,833,337 |
| Ashland Global Holdings, Inc. | 15,295 | 1,468,473 |
| Avery Dennison Corp. | 12,829 | 2,793,130 |
| Axalta Coating Systems Ltd. * | 41,243 | 1,286,369 |
| Ball Corp. | 29,710 | 2,717,871 |
| Berry Global Group, Inc. * | 29,414 | 1,927,793 |
| Celanese Corp. | 28,043 | 4,529,225 |
| CF Industries Holdings, Inc. | 71,057 | 4,036,038 |
| Commercial Metals Co. | 58,731 | 1,889,964 |
| Corteva, Inc. | 103,729 | 4,475,906 |
| Crown Holdings, Inc. | 18,404 | 1,913,832 |
| Domtar Corp. * | 52,122 | 2,845,340 |
| Dow, Inc. | 157,982 | 8,842,252 |
| DuPont de Nemours, Inc. | 220,115 | 15,320,004 |
| Eastman Chemical Co. | 46,904 | 4,879,423 |
| Ecolab, Inc. | 33,057 | 7,345,926 |
| FMC Corp. | 11,345 | 1,032,508 |
| Freeport-McMoRan, Inc. | 111,404 | 4,202,159 |
| Graphic Packaging Holding Co. | 107,875 | 2,149,949 |
| Huntsman Corp. | 94,533 | 3,079,885 |
| International Flavors & Fragrances, Inc. | 16,124 | 2,377,484 |
| International Paper Co. | 155,380 | 7,717,725 |
| Linde plc | 65,459 | 20,894,513 |
| LyondellBasell Industries N.V., Class A | 127,996 | 11,880,589 |
| Martin Marietta Materials, Inc. | 8,501 | 3,339,533 |
| Newmont Corp. | 86,669 | 4,680,126 |
| Nucor Corp. | 130,314 | 14,549,558 |
| O-I Glass, Inc. * | 128,614 | 1,678,413 |
| Olin Corp. | 54,850 | 3,125,353 |
| Packaging Corp. of America | 23,797 | 3,268,994 |
| PPG Industries, Inc. | 52,801 | 8,478,257 |
| Reliance Steel & Aluminum Co. | 32,375 | 4,731,930 |
| RPM International, Inc. | 21,330 | 1,859,976 |
| Sealed Air Corp. | 50,139 | 2,974,245 |
| Sonoco Products Co. | 32,002 | 1,854,516 |
| Steel Dynamics, Inc. | 84,598 | 5,590,236 |
| Sylvamo Corp. * | 14,183 | 399,393 |
| The Chemours Co. | 63,772 | 1,786,891 |
| The Mosaic Co. | 160,489 | 6,671,528 |
| The Sherwin-Williams Co. | 18,987 | 6,011,474 |
| United States Steel Corp. | 161,917 | 4,272,990 |
| Vulcan Materials Co. | 15,292 | 2,907,315 |
| WestRock Co. | 138,631 | 6,668,151 |
| 224,037,284 | ||
| Media & Entertainment 4.6% | ||
| Activision Blizzard, Inc. | 59,722 | 4,669,663 |
| Alphabet, Inc., Class A * | 18,726 | 55,446,188 |
| Alphabet, Inc., Class C * | 18,206 | 53,988,254 |
| Altice USA, Inc., Class A * | 87,645 | 1,428,613 |
| Charter Communications, Inc., Class A * | 23,437 | 15,817,397 |
| Cinemark Holdings, Inc. * | 71,642 | 1,346,870 |
| Comcast Corp., Class A | 973,106 | 50,046,842 |
| Discovery, Inc., Class A *(b) | 41,172 | 965,072 |
| Discovery, Inc., Class C * | 79,859 | 1,801,619 |
| DISH Network Corp., Class A * | 66,408 | 2,727,377 |
| Electronic Arts, Inc. | 35,934 | 5,039,743 |
| Fox Corp., Class A | 97,589 | 3,878,187 |
| Fox Corp., Class B | 46,460 | 1,717,162 |
| Liberty Media Corp. - Liberty SiriusXM, Class A * | 39,336 | 1,958,146 |
| Liberty Media Corp. - Liberty SiriusXM, Class C * | 81,647 | 4,026,830 |
| Match Group, Inc. * | 6,618 | 997,862 |
| Meta Platforms, Inc., Class A * | 129,090 | 41,769,651 |
27
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Netflix, Inc. * | 4,726 | 3,262,405 |
| News Corp., Class A | 101,891 | 2,333,304 |
| News Corp., Class B | 32,213 | 726,725 |
| Omnicom Group, Inc. | 65,760 | 4,476,941 |
| The Interpublic Group of Cos., Inc. | 92,919 | 3,398,048 |
| The Walt Disney Co. * | 247,361 | 41,821,324 |
| Twitter, Inc. * | 21,149 | 1,132,317 |
| ViacomCBS, Inc., Class B | 170,927 | 6,190,976 |
| 310,967,516 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 5.7% | ||
| AbbVie, Inc. | 304,961 | 34,969,878 |
| Agilent Technologies, Inc. | 25,243 | 3,975,520 |
| Amgen, Inc. | 133,922 | 27,717,836 |
| Biogen, Inc. * | 36,438 | 9,717,286 |
| Bristol-Myers Squibb Co. | 284,480 | 16,613,632 |
| Eli Lilly & Co. | 57,033 | 14,529,727 |
| Gilead Sciences, Inc. | 572,117 | 37,118,951 |
| ICON plc * | 9,051 | 2,595,555 |
| Illumina, Inc. * | 5,373 | 2,230,117 |
| IQVIA Holdings, Inc. * | 25,105 | 6,562,949 |
| Jazz Pharmaceuticals plc * | 10,844 | 1,442,686 |
| Johnson & Johnson | 444,170 | 72,346,410 |
| Merck & Co., Inc. | 533,739 | 46,995,719 |
| Mettler-Toledo International, Inc. * | 1,646 | 2,437,529 |
| Organon & Co. | 55,805 | 2,050,834 |
| Perrigo Co., plc | 47,852 | 2,160,518 |
| Pfizer, Inc. | 1,579,684 | 69,095,378 |
| Regeneron Pharmaceuticals, Inc. * | 7,281 | 4,659,403 |
| Thermo Fisher Scientific, Inc. | 25,967 | 16,438,929 |
| United Therapeutics Corp. * | 10,907 | 2,080,619 |
| Vertex Pharmaceuticals, Inc. * | 5,338 | 987,156 |
| Viatris, Inc. | 335,649 | 4,480,914 |
| Waters Corp. * | 8,562 | 3,146,963 |
| Zoetis, Inc. | 22,820 | 4,933,684 |
| 389,288,193 | ||
| Real Estate 2.1% | ||
| Alexandria Real Estate Equities, Inc. | 8,288 | 1,691,912 |
| American Tower Corp. | 27,056 | 7,628,980 |
| Apartment Income REIT Corp. | 28,011 | 1,501,670 |
| Apple Hospitality REIT, Inc. | 95,133 | 1,494,539 |
| AvalonBay Communities, Inc. | 16,885 | 3,996,342 |
| Boston Properties, Inc. | 29,927 | 3,400,904 |
| Brixmor Property Group, Inc. | 83,102 | 1,947,911 |
| Camden Property Trust | 11,729 | 1,913,000 |
| CBRE Group, Inc., Class A * | 59,367 | 6,178,917 |
| Crown Castle International Corp. | 34,641 | 6,245,772 |
| Digital Realty Trust, Inc. | 22,169 | 3,498,490 |
| DigitalBridge Group, Inc. * | 292,455 | 1,959,449 |
| Diversified Healthcare Trust | 363,584 | 1,323,446 |
| Duke Realty Corp. | 31,484 | 1,770,660 |
| Equinix, Inc. | 6,021 | 5,039,999 |
| Equity Residential | 54,538 | 4,712,083 |
| Essex Property Trust, Inc. | 6,964 | 2,367,273 |
| Extra Space Storage, Inc. | 10,442 | 2,060,938 |
| Healthpeak Properties, Inc. | 87,302 | 3,100,094 |
| Host Hotels & Resorts, Inc. * | 320,623 | 5,396,085 |
| Invitation Homes, Inc. | 41,931 | 1,729,654 |
| Iron Mountain, Inc. | 85,036 | 3,881,043 |
| Jones Lang LaSalle, Inc. * | 16,544 | 4,272,157 |
| Kimco Realty Corp. | 122,332 | 2,764,703 |
| Lamar Advertising Co., Class A | 15,160 | 1,716,112 |
| Mid-America Apartment Communities, Inc. | 12,802 | 2,614,296 |
| Omega Healthcare Investors, Inc. | 35,029 | 1,028,451 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Park Hotels & Resorts, Inc. * | 123,413 | 2,286,843 |
| Prologis, Inc. | 35,387 | 5,129,700 |
| Public Storage | 12,877 | 4,277,482 |
| Realogy Holdings Corp. * | 130,320 | 2,257,142 |
| Realty Income Corp. | 26,879 | 1,919,967 |
| Regency Centers Corp. | 22,916 | 1,613,516 |
| RLJ Lodging Trust | 94,905 | 1,368,530 |
| Service Properties Trust | 164,343 | 1,769,974 |
| Simon Property Group, Inc. | 65,176 | 9,553,498 |
| SL Green Realty Corp. | 26,740 | 1,873,672 |
| The Macerich Co. | 114,188 | 2,065,661 |
| UDR, Inc. | 31,572 | 1,753,193 |
| Ventas, Inc. | 105,026 | 5,605,238 |
| VEREIT, Inc. | 48,176 | 2,423,253 |
| Vornado Realty Trust | 52,982 | 2,258,623 |
| Welltower, Inc. | 84,826 | 6,820,010 |
| Weyerhaeuser Co. | 191,395 | 6,836,629 |
| WP Carey, Inc. | 19,485 | 1,502,488 |
| 146,550,299 | ||
| Retailing 5.0% | ||
| Advance Auto Parts, Inc. | 17,294 | 3,900,143 |
| Amazon.com, Inc. * | 11,858 | 39,990,275 |
| American Eagle Outfitters, Inc. (b) | 69,139 | 1,641,360 |
| Asbury Automotive Group, Inc. * | 8,142 | 1,593,471 |
| AutoNation, Inc. * | 29,435 | 3,565,167 |
| AutoZone, Inc. * | 2,314 | 4,130,120 |
| Bath & Body Works, Inc. | 66,466 | 4,592,136 |
| Bed Bath & Beyond, Inc. * | 176,255 | 2,474,620 |
| Best Buy Co., Inc. | 84,973 | 10,387,100 |
| Big Lots, Inc. | 28,477 | 1,260,107 |
| Burlington Stores, Inc. * | 5,322 | 1,470,415 |
| CarMax, Inc. * | 40,010 | 5,478,169 |
| Dick's Sporting Goods, Inc. | 27,216 | 3,380,499 |
| Dollar General Corp. | 48,391 | 10,719,574 |
| Dollar Tree, Inc. * | 53,032 | 5,714,728 |
| eBay, Inc. | 170,621 | 13,090,043 |
| Foot Locker, Inc. | 66,042 | 3,148,222 |
| GameStop Corp., Class A * | 62,209 | 11,415,974 |
| Genuine Parts Co. | 41,951 | 5,500,196 |
| Group 1 Automotive, Inc. | 11,915 | 2,142,317 |
| Kohl's Corp. | 183,658 | 8,912,923 |
| Lithia Motors, Inc. | 5,299 | 1,691,547 |
| LKQ Corp. * | 75,177 | 4,140,749 |
| Lowe’s Cos., Inc. | 123,127 | 28,789,555 |
| Macy's, Inc. | 540,182 | 14,298,618 |
| Murphy USA, Inc. | 18,455 | 3,007,242 |
| Nordstrom, Inc. * | 100,533 | 2,888,313 |
| O'Reilly Automotive, Inc. * | 11,479 | 7,143,611 |
| Penske Automotive Group, Inc. | 19,367 | 2,053,870 |
| Qurate Retail, Inc., Class A | 393,310 | 4,106,156 |
| Ross Stores, Inc. | 52,446 | 5,936,887 |
| Signet Jewelers Ltd. | 33,594 | 2,995,913 |
| Target Corp. | 123,924 | 32,173,149 |
| The Gap, Inc. | 122,812 | 2,786,604 |
| The Home Depot, Inc. | 152,681 | 56,757,635 |
| The ODP Corp. * | 62,202 | 2,693,347 |
| The TJX Cos., Inc. | 237,474 | 15,552,172 |
| Tractor Supply Co. | 20,401 | 4,430,485 |
| Ulta Beauty, Inc. * | 7,308 | 2,684,667 |
| Urban Outfitters, Inc. * | 41,879 | 1,337,197 |
| Victoria's Secret & Co. * | 21,984 | 1,109,533 |
| Williams-Sonoma, Inc. | 14,541 | 2,700,700 |
| 343,785,509 | ||
28
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Semiconductors & Semiconductor Equipment 3.4% | ||
| Advanced Micro Devices, Inc. * | 12,466 | 1,498,787 |
| Analog Devices, Inc. | 49,664 | 8,616,207 |
| Applied Materials, Inc. | 113,826 | 15,554,323 |
| Broadcom, Inc. | 37,726 | 20,057,782 |
| Intel Corp. | 1,363,745 | 66,823,505 |
| KLA Corp. | 14,275 | 5,321,149 |
| Lam Research Corp. | 12,793 | 7,209,751 |
| Marvell Technology, Inc. | 36,545 | 2,503,333 |
| Microchip Technology, Inc. | 36,372 | 2,694,801 |
| Micron Technology, Inc. | 251,140 | 17,353,774 |
| NVIDIA Corp. | 50,181 | 12,829,776 |
| NXP Semiconductors N.V. | 37,479 | 7,528,032 |
| ON Semiconductor Corp. * | 60,496 | 2,908,043 |
| Qorvo, Inc. * | 17,767 | 2,988,942 |
| QUALCOMM, Inc. | 186,090 | 24,757,414 |
| Skyworks Solutions, Inc. | 27,292 | 4,561,312 |
| Teradyne, Inc. | 14,111 | 1,950,705 |
| Texas Instruments, Inc. | 118,524 | 22,220,880 |
| Xilinx, Inc. | 25,261 | 4,546,980 |
| 231,925,496 | ||
| Software & Services 6.2% | ||
| Accenture plc, Class A | 66,482 | 23,853,077 |
| Adobe, Inc. * | 14,130 | 9,189,587 |
| Akamai Technologies, Inc. * | 21,790 | 2,297,973 |
| Alliance Data Systems Corp. | 43,683 | 3,723,976 |
| Amdocs Ltd. | 40,124 | 3,123,252 |
| ANSYS, Inc. * | 3,987 | 1,513,385 |
| Autodesk, Inc. * | 4,640 | 1,473,710 |
| Automatic Data Processing, Inc. | 45,969 | 10,319,581 |
| Broadridge Financial Solutions, Inc. | 13,929 | 2,485,073 |
| Cadence Design Systems, Inc. * | 12,607 | 2,182,398 |
| CDK Global, Inc. | 35,983 | 1,565,980 |
| Check Point Software Technologies Ltd. * | 17,632 | 2,108,787 |
| Citrix Systems, Inc. | 24,895 | 2,358,303 |
| Cognizant Technology Solutions Corp., Class A | 145,832 | 11,388,021 |
| DXC Technology Co. * | 179,906 | 5,859,538 |
| Fidelity National Information Services, Inc. | 45,239 | 5,009,767 |
| Fiserv, Inc. * | 32,894 | 3,239,730 |
| FleetCor Technologies, Inc. * | 8,648 | 2,139,602 |
| Genpact Ltd. | 34,338 | 1,694,580 |
| Global Payments, Inc. | 13,551 | 1,937,657 |
| International Business Machines Corp. | 363,541 | 45,478,979 |
| Intuit, Inc. | 14,001 | 8,764,486 |
| Jack Henry & Associates, Inc. | 8,997 | 1,497,821 |
| Mastercard, Inc., Class A | 43,713 | 14,666,586 |
| Maximus, Inc. | 16,902 | 1,429,402 |
| Microsoft Corp. | 471,376 | 156,317,709 |
| NCR Corp. * | 46,579 | 1,841,734 |
| NortonLifeLock, Inc. | 164,688 | 4,191,310 |
| Oracle Corp. | 434,617 | 41,697,155 |
| Paychex, Inc. | 36,846 | 4,542,375 |
| PayPal Holdings, Inc. * | 32,680 | 7,601,041 |
| Sabre Corp. * | 141,038 | 1,463,974 |
| salesforce.com, Inc. * | 16,927 | 5,072,853 |
| SS&C Technologies Holdings, Inc. | 16,708 | 1,327,785 |
| Synopsys, Inc. * | 6,592 | 2,196,323 |
| Teradata Corp. * | 39,797 | 2,250,918 |
| The Western Union Co. | 134,665 | 2,453,596 |
| VeriSign, Inc. * | 6,271 | 1,396,364 |
| Visa, Inc., Class A | 93,215 | 19,740,141 |
| 421,394,529 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Technology Hardware & Equipment 7.0% | ||
| Amphenol Corp., Class A | 59,896 | 4,598,216 |
| Apple Inc. | 1,896,095 | 284,035,031 |
| Arrow Electronics, Inc. * | 49,655 | 5,747,566 |
| Avnet, Inc. | 171,631 | 6,540,857 |
| CDW Corp. | 21,401 | 3,994,497 |
| Cisco Systems, Inc. | 1,180,311 | 66,062,007 |
| Corning, Inc. | 303,918 | 10,810,363 |
| Dell Technologies, Inc., Class C * | 22,901 | 2,518,881 |
| F5 Networks, Inc. * | 12,935 | 2,731,225 |
| Flex Ltd. * | 219,919 | 3,716,631 |
| Hewlett Packard Enterprise Co. | 1,099,617 | 16,109,389 |
| HP, Inc. | 389,373 | 11,809,683 |
| Insight Enterprises, Inc. * | 14,649 | 1,387,260 |
| Jabil, Inc. | 75,238 | 4,511,271 |
| Juniper Networks, Inc. | 173,534 | 5,122,724 |
| Keysight Technologies, Inc. * | 8,910 | 1,603,978 |
| Motorola Solutions, Inc. | 24,892 | 6,187,902 |
| NetApp, Inc. | 70,471 | 6,293,060 |
| Sanmina Corp. * | 50,640 | 1,911,660 |
| Seagate Technology Holdings plc | 83,065 | 7,398,600 |
| SYNNEX Corp. | 13,640 | 1,432,200 |
| TE Connectivity Ltd. | 59,044 | 8,620,424 |
| Teledyne Technologies, Inc. * | 5,585 | 2,508,894 |
| Trimble, Inc. * | 19,380 | 1,693,231 |
| Western Digital Corp. * | 137,776 | 7,204,307 |
| Xerox Holdings Corp. | 139,567 | 2,484,293 |
| Zebra Technologies Corp., Class A * | 2,614 | 1,395,745 |
| 478,429,895 | ||
| Telecommunication Services 3.1% | ||
| AT&T, Inc. | 3,939,104 | 99,501,767 |
| Liberty Global plc, Class A * | 94,556 | 2,717,540 |
| Liberty Global plc, Class C * | 202,567 | 5,842,032 |
| Lumen Technologies, Inc. | 1,063,736 | 12,615,909 |
| Telephone & Data Systems, Inc. | 106,668 | 1,998,958 |
| T-Mobile US, Inc. * | 64,097 | 7,373,078 |
| Verizon Communications, Inc. | 1,558,116 | 82,564,567 |
| 212,613,851 | ||
| Transportation 2.3% | ||
| American Airlines Group, Inc. * | 172,597 | 3,313,862 |
| Avis Budget Group, Inc. * | 52,226 | 9,051,288 |
| C.H. Robinson Worldwide, Inc. | 48,747 | 4,727,971 |
| CSX Corp. | 455,951 | 16,491,748 |
| Delta Air Lines, Inc. * | 96,132 | 3,761,645 |
| Expeditors International of Washington, Inc. | 38,462 | 4,740,826 |
| FedEx Corp. | 66,928 | 15,763,552 |
| GXO Logistics, Inc. * | 23,015 | 2,043,732 |
| JB Hunt Transport Services, Inc. | 17,783 | 3,506,630 |
| Kansas City Southern | 12,781 | 3,965,305 |
| Kirby Corp. * | 21,687 | 1,136,616 |
| Knight-Swift Transportation Holdings, Inc. | 33,730 | 1,912,154 |
| Landstar System, Inc. | 10,062 | 1,769,000 |
| Norfolk Southern Corp. | 47,716 | 13,983,174 |
| Old Dominion Freight Line, Inc. | 8,848 | 3,020,265 |
| Ryder System, Inc. | 45,153 | 3,835,747 |
| Southwest Airlines Co. * | 64,823 | 3,064,831 |
| Union Pacific Corp. | 139,653 | 33,712,234 |
| United Airlines Holdings, Inc. * | 62,869 | 2,900,776 |
29
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| United Parcel Service, Inc., Class B | 87,830 | 18,749,070 |
| XPO Logistics, Inc. * | 23,037 | 1,976,575 |
| 153,427,001 | ||
| Utilities 3.4% | ||
| Alliant Energy Corp. | 45,276 | 2,561,263 |
| Ameren Corp. | 56,464 | 4,759,351 |
| American Electric Power Co., Inc. | 127,090 | 10,765,794 |
| American Water Works Co., Inc. | 19,127 | 3,331,541 |
| Atmos Energy Corp. | 23,505 | 2,165,281 |
| CenterPoint Energy, Inc. | 177,994 | 4,634,964 |
| CMS Energy Corp. | 64,930 | 3,918,525 |
| Consolidated Edison, Inc. | 113,902 | 8,588,211 |
| Dominion Energy, Inc. | 167,409 | 12,711,365 |
| DTE Energy Co. | 45,041 | 5,105,397 |
| Duke Energy Corp. | 207,869 | 21,204,717 |
| Edison International | 109,761 | 6,907,260 |
| Entergy Corp. | 52,746 | 5,433,893 |
| Evergy, Inc. | 94,118 | 6,000,022 |
| Eversource Energy | 66,951 | 5,684,140 |
| Exelon Corp. | 406,235 | 21,607,640 |
| FirstEnergy Corp. | 209,918 | 8,088,140 |
| MDU Resources Group, Inc. | 61,745 | 1,897,424 |
| NextEra Energy, Inc. | 216,405 | 18,465,839 |
| NiSource, Inc. | 105,829 | 2,610,801 |
| NRG Energy, Inc. | 63,276 | 2,524,080 |
| OGE Energy Corp. | 57,990 | 1,975,719 |
| PG&E Corp. * | 261,467 | 3,033,017 |
| Pinnacle West Capital Corp. | 35,701 | 2,302,357 |
| Portland General Electric Co. | 30,136 | 1,486,006 |
| PPL Corp. | 277,172 | 7,982,554 |
| Public Service Enterprise Group, Inc. | 128,857 | 8,221,077 |
| Sempra Energy | 57,558 | 7,346,128 |
| Southwest Gas Holdings, Inc. | 19,634 | 1,359,654 |
| The AES Corp. | 229,457 | 5,766,254 |
| The Southern Co. | 259,132 | 16,149,106 |
| UGI Corp. | 70,475 | 3,059,320 |
| Vistra Corp. | 241,080 | 4,722,757 |
| WEC Energy Group, Inc. | 57,383 | 5,167,913 |
| Xcel Energy, Inc. | 111,601 | 7,208,309 |
| 234,745,819 | ||
| Total Common Stocks (Cost $3,490,020,428) | 6,793,716,231 | |
| SECURITY | NUMBEROF SHARES | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.3% OF NET ASSETS | ||
| Money Market Funds 0.3% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (c) | 18,087,019 | 18,087,019 |
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 1,262,655 | 1,262,655 |
| 19,349,674 | ||
| Total Short-Term Investments (Cost $19,349,674) | 19,349,674 | |
| Total Investments in Securities (Cost $3,509,370,102) | 6,813,065,905 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| S&P 500 Index, e-mini, expires 12/17/21 | 112 | 25,743,200 | 405,904 |
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund’s investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $1,196,660. |
| (c) | The rate shown is the 7-day yield. |
| (d) | Security purchased with cash collateral received for securities on loan. |
| REIT — | Real Estate Investment Trust |
Below is a summary of the fund’s transactions with affiliated issuers during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DIVIDENDS RECEIVED | |
| COMMON STOCKS 0.1% OF NET ASSETS | ||||||||
| Diversified Financials 0.1% | ||||||||
| The Charles Schwab Corp. | $5,308,534 | $699,785 | ($3,623,019) | $1,395,752 | $3,357,199 | $7,138,251 | 87,020 | $88,292 |
30
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $6,793,716,231 | $— | $— | $6,793,716,231 |
| Short-Term Investments1 | 19,349,674 | — | — | 19,349,674 |
| Futures Contracts2 | 405,904 | — | — | 405,904 |
| Total | $6,813,471,809 | $— | $— | $6,813,471,809 |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
31
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $1,899,530) | $7,138,251 | |
| Investments in securities, at value - unaffiliated (cost $3,507,470,572) including securities on loan of $1,196,660 | 6,805,927,654 | |
| Deposit with broker for futures contracts | 2,564,500 | |
| Receivables: | ||
| Dividends | 8,382,634 | |
| Fund shares sold | 5,149,151 | |
| Variation margin on future contracts | 59,197 | |
| Income from securities on loan | + | 1,193 |
| Total assets | 6,829,222,580 | |
| Liabilities | ||
| Collateral held for securities on loan | 1,262,655 | |
| Payables: | ||
| Fund shares redeemed | 5,999,868 | |
| Investment adviser fees | 1,431,605 | |
| Due to custodian | + | 675 |
| Total liabilities | 8,694,803 | |
| Net assets | $6,820,527,777 | |
| Net Assets by Source | ||
| Capital received from investors | $3,353,925,532 | |
| Total distributable earnings | + | 3,466,602,245 |
| Net assets | $6,820,527,777 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $6,820,527,777 | 294,062,329 | $23.19 | ||
32
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $88,292 | |
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $15,454) | 128,891,294 | |
| Securities on loan, net | + | 768,854 |
| Total investment income | 129,748,440 | |
| Expenses | ||
| Investment adviser fees | + | 15,292,884 |
| Total expenses | – | 15,292,884 |
| Net investment income | 114,455,556 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - affiliated | 1,395,752 | |
| Net realized gains on sales of securities - unaffiliated | 307,145,078 | |
| Net realized gains on futures contracts | + | 9,733,998 |
| Net realized gains | 318,274,828 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 3,357,199 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 1,861,069,669 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 947,227 |
| Net change in unrealized appreciation (depreciation) | + | 1,865,374,095 |
| Net realized and unrealized gains | 2,183,648,923 | |
| Increase in net assets resulting from operations | $2,298,104,479 | |
33
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Large Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $114,455,556 | $123,535,000 | |
| Net realized gains | 318,274,828 | 121,884,194 | |
| Net change in unrealized appreciation (depreciation) | + | 1,865,374,095 | (397,289,802) |
| Increase (decrease) in net assets from operations | $2,298,104,479 | ($151,870,608) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($308,556,282) | ($280,720,286) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 81,564,828 | $1,719,788,331 | 65,360,142 | $1,034,311,318 | |
| Shares reinvested | 10,503,858 | 189,909,742 | 9,908,434 | 175,775,620 | |
| Shares redeemed | + | (77,335,254) | (1,626,034,240) | (94,170,173) | (1,467,566,455) |
| Net transactions in fund shares | 14,733,432 | $283,663,833 | (18,901,597) | ($257,479,517) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 279,328,897 | $4,547,315,747 | 298,230,494 | $5,237,386,158 | |
| Total increase (decrease) | + | 14,733,432 | 2,273,212,030 | (18,901,597) | (690,070,411) |
| End of period | 294,062,329 | $6,820,527,777 | 279,328,897 | $4,547,315,747 | |
34
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $11.97 | $13.85 | $14.68 | $15.32 | $12.69 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.18 | 0.17 | 0.20 | 0.22 | 0.21 | |
| Net realized and unrealized gains (losses) | 7.38 | (1.53) | 0.32 | 0.17 | 2.68 | |
| Total from investment operations | 7.56 | (1.36) | 0.52 | 0.39 | 2.89 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.21) | (0.20) | (0.22) | (0.21) | (0.17) | |
| Distributions from net realized gains | — | (0.32) | (1.13) | (0.82) | (0.09) | |
| Total distributions | (0.21) | (0.52) | (1.35) | (1.03) | (0.26) | |
| Net asset value at end of period | $19.32 | $11.97 | $13.85 | $14.68 | $15.32 | |
| Total return | 63.73% | (10.42%) | 5.61% | 2.40% | 22.94% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.25% | 0.25% | 0.25% | 0.25% | 0.33% 2 | |
| Net operating expenses | N/A | N/A | N/A | N/A 3 | 0.30% 2 | |
| Net investment income (loss) | 1.02% | 1.43% | 1.50% | 1.42% | 1.43% | |
| Portfolio turnover rate | 36% 4 | 28% | 34% | 30% | 27% | |
| Net assets, end of period (x 1,000,000) | $1,945 | $1,394 | $1,908 | $1,782 | $1,727 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective May 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 3 | Effective May 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
| 4 | Portfolio turnover rate excludes in-kind transactions. |
35
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 99.7% OF NET ASSETS | ||
| Automobiles & Components 1.4% | ||
| American Axle & Manufacturing Holdings, Inc. * | 441,224 | 4,006,314 |
| Cooper-Standard Holdings, Inc. * | 108,067 | 2,803,258 |
| Dorman Products, Inc. * | 18,101 | 1,889,382 |
| Fox Factory Holding Corp. * | 6,703 | 1,078,848 |
| Gentherm, Inc. * | 24,678 | 1,817,041 |
| LCI Industries | 20,638 | 2,881,890 |
| Modine Manufacturing Co. * | 104,088 | 1,144,968 |
| Patrick Industries, Inc. | 18,555 | 1,445,620 |
| Standard Motor Products, Inc. | 33,541 | 1,606,614 |
| Stoneridge, Inc. * | 32,771 | 621,994 |
| Tenneco, Inc., Class A * | 290,569 | 3,855,851 |
| Veoneer, Inc. * | 52,041 | 1,831,843 |
| Winnebago Industries, Inc. | 26,486 | 1,792,837 |
| 26,776,460 | ||
| Banks 8.5% | ||
| Ameris Bancorp | 11,994 | 628,366 |
| Associated Banc-Corp. | 138,462 | 3,084,933 |
| Atlantic Union Bankshares Corp. | 30,992 | 1,111,683 |
| Axos Financial, Inc. * | 21,458 | 1,137,274 |
| Bank of Hawaii Corp. | 27,663 | 2,337,523 |
| Bank OZK | 68,089 | 3,041,536 |
| BankUnited, Inc. | 81,262 | 3,295,987 |
| Banner Corp. | 25,271 | 1,459,653 |
| Berkshire Hills Bancorp, Inc. | 34,319 | 931,761 |
| BOK Financial Corp. | 19,648 | 1,987,788 |
| Brookline Bancorp, Inc. | 51,681 | 829,480 |
| Cadence Bank | 105,084 | 3,049,549 |
| Capitol Federal Financial, Inc. | 102,623 | 1,244,817 |
| Cathay General Bancorp | 51,993 | 2,193,585 |
| Central Pacific Financial Corp. | 36,090 | 992,114 |
| City Holding Co. | 6,109 | 486,154 |
| Columbia Banking System, Inc. | 41,653 | 1,421,617 |
| Commerce Bancshares, Inc. | 39,488 | 2,784,299 |
| Community Bank System, Inc. | 19,559 | 1,401,794 |
| Cullen/Frost Bankers, Inc. | 29,365 | 3,802,767 |
| CVB Financial Corp. | 58,652 | 1,174,213 |
| Eagle Bancorp, Inc. | 15,995 | 905,157 |
| Essent Group Ltd. | 39,856 | 1,913,088 |
| F.N.B. Corp. | 270,458 | 3,150,836 |
| Federal Agricultural Mortgage Corp., Class C | 9,826 | 1,238,960 |
| First BanCorp | 114,696 | 1,565,600 |
| First Busey Corp. | 22,468 | 572,709 |
| First Citizens BancShares, Inc., Class A | 3,030 | 2,466,117 |
| First Commonwealth Financial Corp. | 66,368 | 1,015,430 |
| First Financial Bancorp | 57,378 | 1,364,449 |
| First Financial Bankshares, Inc. | 24,099 | 1,222,301 |
| First Hawaiian, Inc. | 102,500 | 2,827,975 |
| First Horizon Corp. | 253,331 | 4,299,027 |
| First Interstate BancSystem, Inc., Class A | 19,544 | 812,444 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| First Merchants Corp. | 22,817 | 948,731 |
| First Midwest Bancorp, Inc. | 73,781 | 1,420,284 |
| Flagstar Bancorp, Inc. | 31,482 | 1,485,636 |
| Fulton Financial Corp. | 143,850 | 2,315,985 |
| Glacier Bancorp, Inc. | 32,272 | 1,784,319 |
| Great Western Bancorp, Inc. | 60,896 | 2,073,509 |
| Hancock Whitney Corp. | 61,936 | 3,064,593 |
| Hanmi Financial Corp. | 24,250 | 538,108 |
| Heartland Financial USA, Inc. | 16,603 | 832,142 |
| Hilltop Holdings, Inc. | 40,833 | 1,447,122 |
| Home BancShares, Inc. | 85,926 | 2,041,602 |
| Hope Bancorp, Inc. | 118,643 | 1,731,001 |
| Independent Bank Corp. | 12,575 | 1,062,588 |
| Independent Bank Group, Inc. | 7,516 | 543,332 |
| International Bancshares Corp. | 36,625 | 1,552,900 |
| Investors Bancorp, Inc. | 218,377 | 3,341,168 |
| MGIC Investment Corp. | 288,969 | 4,669,739 |
| National Bank Holdings Corp., Class A | 18,842 | 817,178 |
| NBT Bancorp, Inc. | 29,521 | 1,083,125 |
| Northwest Bancshares, Inc. | 81,789 | 1,128,688 |
| OFG Bancorp | 45,745 | 1,184,796 |
| Old National Bancorp | 108,973 | 1,861,259 |
| Pacific Premier Bancorp, Inc. | 13,077 | 549,103 |
| Park National Corp. | 8,235 | 1,058,939 |
| PennyMac Financial Services, Inc. | 11,443 | 710,153 |
| Pinnacle Financial Partners, Inc. | 21,301 | 2,057,038 |
| Prosperity Bancshares, Inc. | 38,801 | 2,922,103 |
| Provident Financial Services, Inc. | 50,438 | 1,248,845 |
| Radian Group, Inc. | 176,577 | 4,214,893 |
| Renasant Corp. | 27,140 | 1,015,307 |
| S&T Bancorp, Inc. | 28,475 | 870,196 |
| Sandy Spring Bancorp, Inc. | 20,610 | 978,151 |
| ServisFirst Bancshares, Inc. | 8,845 | 710,342 |
| Signature Bank | 18,223 | 5,427,174 |
| Simmons First National Corp., Class A | 51,174 | 1,529,591 |
| Southside Bancshares, Inc. | 12,217 | 504,806 |
| SouthState Corp. | 20,280 | 1,583,665 |
| Sterling Bancorp | 90,706 | 2,308,468 |
| Synovus Financial Corp. | 98,663 | 4,596,709 |
| Texas Capital Bancshares, Inc. * | 26,441 | 1,602,325 |
| The Bank of N.T. Butterfield & Son Ltd. | 33,697 | 1,209,722 |
| Tompkins Financial Corp. | 6,226 | 511,217 |
| Towne Bank | 33,681 | 1,061,625 |
| Trustmark Corp. | 52,365 | 1,665,731 |
| UMB Financial Corp. | 19,282 | 1,905,447 |
| Umpqua Holdings Corp. | 202,547 | 4,142,086 |
| United Bankshares, Inc. | 61,341 | 2,269,004 |
| United Community Banks, Inc. | 35,895 | 1,250,582 |
| Valley National Bancorp | 193,574 | 2,566,791 |
| Walker & Dunlop, Inc. | 18,714 | 2,434,130 |
| Washington Federal, Inc. | 84,369 | 2,983,288 |
| Webster Financial Corp. | 56,438 | 3,158,270 |
| WesBanco, Inc. | 33,586 | 1,167,785 |
| Westamerica Bancorp | 11,826 | 659,418 |
| Western Alliance Bancorp | 23,578 | 2,737,170 |
36
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Wintrust Financial Corp. | 33,815 | 2,992,627 |
| WSFS Financial Corp. | 17,241 | 893,256 |
| 166,174,748 | ||
| Capital Goods 11.5% | ||
| AAON, Inc. | 12,724 | 911,675 |
| AAR Corp. * | 59,328 | 2,098,431 |
| Advanced Drainage Systems, Inc. | 8,450 | 953,160 |
| Aerojet Rocketdyne Holdings, Inc. | 31,043 | 1,366,202 |
| Air Lease Corp. | 87,622 | 3,509,261 |
| Alamo Group, Inc. | 7,481 | 1,131,127 |
| Albany International Corp., Class A | 18,063 | 1,456,781 |
| Altra Industrial Motion Corp. | 25,187 | 1,313,502 |
| American Woodmark Corp. * | 17,655 | 1,213,605 |
| API Group Corp. * | 55,013 | 1,198,183 |
| Apogee Enterprises, Inc. | 49,601 | 2,079,770 |
| Applied Industrial Technologies, Inc. | 36,659 | 3,573,519 |
| Arcosa, Inc. | 53,957 | 2,791,196 |
| Argan, Inc. | 20,263 | 836,051 |
| Armstrong World Industries, Inc. | 25,900 | 2,736,335 |
| Astec Industries, Inc. | 25,521 | 1,362,311 |
| Astronics Corp. * | 51,181 | 660,235 |
| Atkore, Inc. * | 21,762 | 2,057,162 |
| AZZ, Inc. | 30,134 | 1,601,019 |
| Barnes Group, Inc. | 52,134 | 2,186,500 |
| Beacon Roofing Supply, Inc. * | 64,399 | 3,404,775 |
| Boise Cascade Co. | 72,193 | 4,087,568 |
| Builders FirstSource, Inc. * | 98,936 | 5,765,001 |
| BWX Technologies, Inc. | 50,592 | 2,870,590 |
| CAI International, Inc. | 17,774 | 994,100 |
| Chart Industries, Inc. * | 7,675 | 1,362,466 |
| CIRCOR International, Inc. * | 20,568 | 587,011 |
| Colfax Corp. * | 78,705 | 4,062,752 |
| Columbus McKinnon Corp. | 18,715 | 884,658 |
| Comfort Systems USA, Inc. | 31,339 | 2,866,578 |
| Crane Co. | 39,971 | 4,128,205 |
| CSW Industrials, Inc. | 3,910 | 542,004 |
| Douglas Dynamics, Inc. | 19,803 | 837,667 |
| Dycom Industries, Inc. * | 42,240 | 3,354,701 |
| Encore Wire Corp. | 27,701 | 3,713,596 |
| Enerpac Tool Group Corp. | 45,245 | 945,168 |
| EnerSys | 39,568 | 3,167,023 |
| EnPro Industries, Inc. | 19,025 | 1,705,781 |
| ESCO Technologies, Inc. | 11,674 | 987,153 |
| Evoqua Water Technologies Corp. * | 17,800 | 744,574 |
| Federal Signal Corp. | 38,886 | 1,664,710 |
| Franklin Electric Co., Inc. | 25,926 | 2,239,488 |
| Generac Holdings, Inc. * | 8,316 | 4,146,025 |
| Gibraltar Industries, Inc. * | 17,588 | 1,146,034 |
| GMS, Inc. * | 48,130 | 2,383,879 |
| GrafTech International Ltd. | 39,201 | 419,451 |
| Granite Construction, Inc. | 93,373 | 3,466,006 |
| Great Lakes Dredge & Dock Corp. * | 34,366 | 523,051 |
| Griffon Corp. | 57,290 | 1,517,612 |
| H&E Equipment Services, Inc. | 55,868 | 2,518,529 |
| HEICO Corp. | 8,106 | 1,129,895 |
| HEICO Corp., Class A | 13,906 | 1,747,706 |
| Helios Technologies, Inc. | 7,457 | 678,960 |
| Herc Holdings, Inc. | 22,755 | 4,142,320 |
| Hillenbrand, Inc. | 55,990 | 2,545,305 |
| Hyster-Yale Materials Handling, Inc. | 17,082 | 820,619 |
| Ingersoll Rand, Inc. * | 44,588 | 2,397,051 |
| JELD-WEN Holding, Inc. * | 74,843 | 2,051,447 |
| John Bean Technologies Corp. | 11,778 | 1,740,199 |
| Kadant, Inc. | 4,875 | 1,082,835 |
| Kaman Corp. | 36,421 | 1,303,508 |
| Kennametal, Inc. | 74,195 | 2,949,251 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Kratos Defense & Security Solutions, Inc. * | 18,342 | 392,335 |
| Lindsay Corp. | 6,755 | 984,001 |
| Masonite International Corp. * | 23,293 | 2,795,393 |
| Matrix Service Co. * | 112,464 | 1,150,507 |
| Maxar Technologies, Inc. | 44,548 | 1,182,749 |
| McGrath RentCorp | 18,567 | 1,339,423 |
| Mercury Systems, Inc. * | 10,154 | 523,337 |
| Meritor, Inc. * | 86,643 | 2,108,891 |
| Moog, Inc., Class A | 43,032 | 3,250,207 |
| MRC Global, Inc. * | 244,169 | 2,026,603 |
| Mueller Industries, Inc. | 77,647 | 4,087,338 |
| Mueller Water Products, Inc., Class A | 113,559 | 1,863,503 |
| MYR Group, Inc. * | 20,046 | 2,047,699 |
| National Presto Industries, Inc. | 7,774 | 646,408 |
| NOW, Inc. * | 381,766 | 2,756,351 |
| Parsons Corp. * | 13,442 | 465,631 |
| PGT Innovations, Inc. * | 24,660 | 526,491 |
| Primoris Services Corp. | 78,007 | 2,102,289 |
| Proto Labs, Inc. * | 8,577 | 512,990 |
| Quanex Building Products Corp. | 46,830 | 970,318 |
| Raven Industries, Inc. * | 23,484 | 1,357,845 |
| RBC Bearings, Inc. * | 7,534 | 1,762,429 |
| Resideo Technologies, Inc. * | 145,704 | 3,593,061 |
| Rush Enterprises, Inc., Class A | 86,414 | 4,500,441 |
| Simpson Manufacturing Co., Inc. | 22,912 | 2,430,734 |
| SiteOne Landscape Supply, Inc. * | 7,824 | 1,838,327 |
| SPX Corp. * | 20,949 | 1,216,927 |
| SPX FLOW, Inc. | 23,889 | 1,784,747 |
| Standex International Corp. | 11,686 | 1,300,301 |
| Tennant Co. | 13,674 | 1,086,536 |
| Terex Corp. | 79,979 | 3,583,059 |
| Textainer Group Holdings Ltd. * | 42,331 | 1,663,185 |
| The Greenbrier Cos., Inc. | 86,317 | 3,540,723 |
| The Manitowoc Co., Inc. * | 52,607 | 1,127,368 |
| The Middleby Corp. * | 24,765 | 4,518,127 |
| The Timken Co. | 53,924 | 3,825,908 |
| Trex Co., Inc. * | 15,987 | 1,701,017 |
| Trinity Industries, Inc. | 138,255 | 3,878,053 |
| Triton International Ltd. | 55,009 | 3,421,010 |
| Tutor Perini Corp. * | 180,171 | 2,453,929 |
| Valmont Industries, Inc. | 18,275 | 4,366,994 |
| Vectrus, Inc. * | 18,457 | 893,873 |
| Wabash National Corp. | 150,128 | 2,331,488 |
| Watts Water Technologies, Inc., Class A | 14,520 | 2,759,090 |
| Welbilt, Inc. * | 74,680 | 1,766,929 |
| Woodward, Inc. | 28,095 | 3,173,330 |
| Zurn Water Solutions Corp. | 51,035 | 1,851,550 |
| 224,120,722 | ||
| Commercial & Professional Services 5.0% | ||
| ACCO Brands Corp. | 206,428 | 1,707,160 |
| ADT, Inc. | 188,139 | 1,570,961 |
| ASGN, Inc. * | 33,614 | 4,022,251 |
| Brady Corp., Class A | 39,415 | 2,053,127 |
| BrightView Holdings, Inc. * | 46,307 | 734,429 |
| CBIZ, Inc. * | 34,976 | 1,283,969 |
| Cimpress plc * | 11,628 | 1,038,613 |
| Clean Harbors, Inc. * | 39,729 | 4,471,102 |
| CoStar Group, Inc. * | 28,168 | 2,423,856 |
| Covanta Holding Corp. | 156,623 | 3,160,652 |
| Deluxe Corp. | 102,486 | 3,655,676 |
| Exponent, Inc. | 10,453 | 1,200,004 |
| FTI Consulting, Inc. * | 24,809 | 3,570,511 |
| Harsco Corp. * | 88,954 | 1,521,113 |
| Healthcare Services Group, Inc. | 95,624 | 1,835,025 |
| Heidrick & Struggles International, Inc. | 12,170 | 570,530 |
37
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Herman Miller, Inc. | 97,226 | 3,784,036 |
| HNI Corp. | 71,875 | 2,688,125 |
| Huron Consulting Group, Inc. * | 19,148 | 960,464 |
| IAA, Inc. * | 30,729 | 1,832,985 |
| ICF International, Inc. | 17,484 | 1,756,967 |
| Insperity, Inc. | 16,514 | 2,064,250 |
| Interface, Inc. | 114,221 | 1,640,214 |
| KAR Auction Services, Inc. * | 166,207 | 2,438,257 |
| Kforce, Inc. | 29,303 | 1,897,662 |
| Korn Ferry | 44,092 | 3,404,343 |
| ManTech International Corp., Class A | 24,501 | 2,112,476 |
| Matthews International Corp., Class A | 50,604 | 1,739,259 |
| MSA Safety, Inc. | 10,962 | 1,677,515 |
| Pitney Bowes, Inc. | 541,562 | 3,758,440 |
| Resources Connection, Inc. | 78,429 | 1,365,449 |
| Rollins, Inc. | 47,543 | 1,674,940 |
| SP Plus Corp. * | 39,435 | 1,271,779 |
| Steelcase, Inc., Class A | 203,478 | 2,421,388 |
| Stericycle, Inc. * | 49,608 | 3,319,767 |
| Tetra Tech, Inc. | 23,769 | 4,175,262 |
| The Brink's Co. | 25,014 | 1,722,964 |
| TransUnion | 37,778 | 4,355,426 |
| TriNet Group, Inc. * | 15,221 | 1,541,126 |
| TrueBlue, Inc. * | 117,887 | 3,283,153 |
| U.S. Ecology, Inc. * | 23,782 | 765,543 |
| UniFirst Corp. | 12,447 | 2,464,008 |
| Viad Corp. * | 35,153 | 1,559,739 |
| 96,494,516 | ||
| Consumer Durables & Apparel 3.7% | ||
| Acushnet Holdings Corp. | 23,273 | 1,185,527 |
| Beazer Homes USA, Inc. * | 58,590 | 1,061,065 |
| Callaway Golf Co. * | 52,082 | 1,408,818 |
| Cavco Industries, Inc. * | 5,812 | 1,397,089 |
| Century Communities, Inc. | 18,947 | 1,270,586 |
| Columbia Sportswear Co. | 22,741 | 2,361,425 |
| Crocs, Inc. * | 12,173 | 1,965,331 |
| Deckers Outdoor Corp. * | 12,376 | 4,892,357 |
| Ethan Allen Interiors, Inc. | 58,572 | 1,359,456 |
| Fossil Group, Inc. * | 183,524 | 2,169,254 |
| G-III Apparel Group Ltd. * | 101,901 | 2,920,483 |
| Helen of Troy Ltd. * | 13,693 | 3,080,240 |
| Installed Building Products, Inc. | 4,972 | 631,693 |
| iRobot Corp. * | 16,830 | 1,403,959 |
| KB Home | 84,871 | 3,407,571 |
| Kontoor Brands, Inc. | 61,869 | 3,279,057 |
| La-Z-Boy, Inc. | 63,431 | 2,108,446 |
| LGI Homes, Inc. * | 9,731 | 1,452,838 |
| M.D.C. Holdings, Inc. | 52,786 | 2,585,458 |
| M/I Homes, Inc. * | 33,528 | 1,919,813 |
| Meritage Homes Corp. * | 39,299 | 4,272,194 |
| Movado Group, Inc. | 32,783 | 1,091,674 |
| Oxford Industries, Inc. | 21,285 | 1,973,545 |
| Skyline Champion Corp. * | 10,340 | 654,729 |
| Smith & Wesson Brands, Inc. | 48,563 | 1,044,104 |
| Steven Madden Ltd. | 86,707 | 3,910,486 |
| Sturm, Ruger & Co., Inc. | 19,490 | 1,537,371 |
| Tempur Sealy International, Inc. | 76,919 | 3,420,588 |
| TopBuild Corp. * | 12,816 | 3,293,328 |
| Tupperware Brands Corp. * | 79,655 | 1,771,527 |
| Universal Electronics, Inc. * | 16,595 | 683,382 |
| Vista Outdoor, Inc. * | 58,638 | 2,453,414 |
| Wolverine World Wide, Inc. | 96,179 | 3,190,257 |
| 71,157,065 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Consumer Services 5.0% | ||
| Adtalem Global Education, Inc. * | 85,132 | 3,143,925 |
| American Public Education, Inc. * | 25,096 | 627,149 |
| Arcos Dorados Holdings, Inc., Class A * | 243,159 | 1,159,868 |
| Bally's Corp. * | 9,655 | 442,296 |
| BJ's Restaurants, Inc. * | 34,913 | 1,163,301 |
| Bloomin' Brands, Inc. * | 137,223 | 2,966,761 |
| Boyd Gaming Corp. * | 46,497 | 2,965,579 |
| Bright Horizons Family Solutions, Inc. * | 18,229 | 3,026,014 |
| Brinker International, Inc. * | 64,237 | 2,695,385 |
| Caesars Entertainment, Inc. * | 33,212 | 3,635,385 |
| Choice Hotels International, Inc. | 10,672 | 1,500,697 |
| Churchill Downs, Inc. | 14,596 | 3,357,080 |
| Dave & Buster's Entertainment, Inc. * | 56,878 | 2,111,880 |
| Denny's Corp. * | 61,259 | 974,018 |
| Dine Brands Global, Inc. * | 15,786 | 1,334,075 |
| Everi Holdings, Inc. * | 180,311 | 4,327,464 |
| Frontdoor, Inc. * | 20,006 | 745,824 |
| Graham Holdings Co., Class B | 6,019 | 3,526,231 |
| Grand Canyon Education, Inc. * | 26,176 | 2,086,227 |
| Hilton Grand Vacations, Inc. * | 71,816 | 3,610,908 |
| Houghton Mifflin Harcourt Co. * | 267,203 | 3,791,611 |
| Hyatt Hotels Corp., Class A * | 49,397 | 4,208,624 |
| International Game Technology plc * | 194,455 | 5,734,478 |
| Jack in the Box, Inc. | 35,714 | 3,533,900 |
| Laureate Education, Inc., Class A * | 155,898 | 2,700,153 |
| Papa John's International, Inc. | 13,045 | 1,618,624 |
| Penn National Gaming, Inc. * | 45,830 | 3,281,428 |
| Perdoceo Education Corp. * | 72,818 | 773,327 |
| Planet Fitness, Inc., Class A * | 18,534 | 1,474,380 |
| Red Robin Gourmet Burgers, Inc. * | 53,623 | 1,065,489 |
| Red Rock Resorts, Inc., Class A * | 44,302 | 2,410,472 |
| Regis Corp. * | 149,706 | 404,206 |
| Ruth's Hospitality Group, Inc. * | 34,077 | 659,049 |
| Scientific Games Corp., Class A * | 34,120 | 2,731,306 |
| SeaWorld Entertainment, Inc. * | 29,521 | 1,874,583 |
| Strategic Education, Inc. | 14,508 | 989,591 |
| Stride, Inc. * | 58,386 | 2,072,703 |
| Terminix Global Holdings, Inc. * | 50,306 | 2,036,387 |
| Texas Roadhouse, Inc. | 39,185 | 3,480,020 |
| The Cheesecake Factory, Inc. * | 65,784 | 2,673,462 |
| WW International, Inc. * | 31,367 | 544,531 |
| Wyndham Hotels & Resorts, Inc. | 43,104 | 3,640,995 |
| 97,099,386 | ||
| Diversified Financials 4.6% | ||
| Apollo Commercial Real Estate Finance, Inc. | 108,206 | 1,638,239 |
| Apollo Global Management, Inc. | 35,118 | 2,702,330 |
| Arbor Realty Trust, Inc. | 34,117 | 686,093 |
| Ares Management Corp., Class A | 9,150 | 775,371 |
| Artisan Partners Asset Management, Inc., Class A | 33,623 | 1,665,683 |
| BGC Partners, Inc., Class A | 307,131 | 1,649,293 |
| Blackstone Mortgage Trust, Inc., Class A | 78,655 | 2,587,750 |
| Blucora, Inc. * | 32,461 | 536,256 |
| Brightsphere Investment Group, Inc. | 56,651 | 1,698,397 |
| BrightSpire Capital, Inc. | 52,785 | 517,821 |
| Cannae Holdings, Inc. * | 54,405 | 1,855,211 |
| Chimera Investment Corp. | 300,702 | 4,693,958 |
| Cohen & Steers, Inc. | 12,056 | 1,143,994 |
| Compass Diversified Holdings | 73,117 | 2,182,542 |
| Credit Acceptance Corp. * | 5,566 | 3,329,637 |
| Donnelley Financial Solutions, Inc. * | 41,025 | 1,572,078 |
| Encore Capital Group, Inc. * | 27,094 | 1,463,618 |
| Enova International, Inc. * | 37,644 | 1,221,171 |
38
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| FactSet Research Systems, Inc. | 9,114 | 4,045,613 |
| Federated Hermes, Inc. | 108,765 | 3,622,962 |
| FirstCash, Inc. | 35,724 | 3,160,502 |
| Green Dot Corp., Class A * | 27,586 | 1,168,543 |
| Houlihan Lokey, Inc. | 20,398 | 2,286,208 |
| Interactive Brokers Group, Inc., Class A | 7,839 | 555,393 |
| Invesco Mortgage Capital, Inc. | 565,814 | 1,776,656 |
| Ladder Capital Corp. REIT | 146,505 | 1,758,060 |
| MarketAxess Holdings, Inc. | 3,556 | 1,453,231 |
| MFA Financial, Inc. | 528,699 | 2,384,433 |
| Moelis & Co., Class A | 29,176 | 2,122,262 |
| Morningstar, Inc. | 5,395 | 1,708,866 |
| Nelnet, Inc., Class A | 17,296 | 1,429,168 |
| New York Mortgage Trust, Inc. | 315,212 | 1,383,781 |
| PennyMac Mortgage Investment Trust | 88,594 | 1,785,169 |
| Piper Sandler Cos. | 9,413 | 1,550,227 |
| PRA Group, Inc. * | 38,149 | 1,635,829 |
| Redwood Trust, Inc. | 129,911 | 1,761,593 |
| Santander Consumer USA Holdings, Inc. | 142,254 | 5,931,992 |
| SLM Corp. | 226,940 | 4,164,349 |
| Stifel Financial Corp. | 41,300 | 3,009,531 |
| The Carlyle Group, Inc. | 26,206 | 1,471,467 |
| TPG RE Finance Trust, Inc. | 45,630 | 596,384 |
| Tradeweb Markets, Inc., Class A | 7,929 | 706,474 |
| Two Harbors Investment Corp. | 394,854 | 2,534,963 |
| Virtu Financial, Inc., Class A | 16,808 | 418,183 |
| Virtus Investment Partners, Inc. | 3,361 | 1,075,520 |
| WisdomTree Investments, Inc. | 141,916 | 906,843 |
| World Acceptance Corp. * | 8,518 | 1,579,152 |
| 89,902,796 | ||
| Energy 5.3% | ||
| Alto Ingredients, Inc. * | 196,168 | 1,043,614 |
| Arch Resources, Inc. * | 66,014 | 6,012,555 |
| Archrock, Inc. | 179,973 | 1,473,979 |
| Callon Petroleum Co. * | 48,981 | 2,533,787 |
| Centennial Resource Development, Inc., Class A * | 471,836 | 3,397,219 |
| ChampionX Corp. * | 89,898 | 2,358,025 |
| CNX Resources Corp. * | 298,242 | 4,357,316 |
| CONSOL Energy, Inc. * | 186,724 | 5,136,777 |
| Continental Resources, Inc. | 82,122 | 4,008,375 |
| Core Laboratories N.V. | 54,440 | 1,415,984 |
| CVR Energy, Inc. | 116,192 | 2,227,401 |
| DHT Holdings, Inc. | 113,564 | 739,302 |
| Dril-Quip, Inc. * | 51,015 | 1,201,913 |
| EQT Corp. * | 172,351 | 3,431,508 |
| Equitrans Midstream Corp. | 393,396 | 4,055,913 |
| Golar LNG Ltd. * | 52,238 | 680,661 |
| Green Plains, Inc. * | 109,487 | 4,155,032 |
| Helix Energy Solutions Group, Inc. * | 224,457 | 848,448 |
| International Seaways, Inc. | 76,067 | 1,334,976 |
| Kosmos Energy Ltd. * | 660,956 | 2,379,442 |
| Liberty Oilfield Services, Inc., Class A * | 62,884 | 812,461 |
| Magnolia Oil & Gas Corp., Class A | 93,831 | 1,959,191 |
| Matador Resources Co. | 53,174 | 2,225,332 |
| NexTier Oilfield Solutions, Inc. * | 300,955 | 1,342,259 |
| Nordic American Tankers Ltd. | 335,028 | 787,316 |
| Oceaneering International, Inc. * | 369,847 | 5,029,919 |
| Oil States International, Inc. * | 308,180 | 1,867,571 |
| Par Pacific Holdings, Inc. * | 89,752 | 1,387,566 |
| PDC Energy, Inc. | 79,882 | 4,178,627 |
| ProPetro Holding Corp. * | 162,158 | 1,555,095 |
| Range Resources Corp. * | 187,129 | 4,363,848 |
| Renewable Energy Group, Inc. * | 43,178 | 2,763,392 |
| Scorpio Tankers, Inc. | 87,094 | 1,395,246 |
| SFL Corp., Ltd. | 190,280 | 1,505,115 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| SM Energy Co. | 424,023 | 14,552,469 |
| Southwestern Energy Co. * | 448,610 | 2,189,217 |
| Teekay Tankers Ltd., Class A * | 72,756 | 1,009,853 |
| US Silica Holdings, Inc. * | 135,388 | 1,310,556 |
| 103,027,260 | ||
| Food & Staples Retailing 0.7% | ||
| BJ's Wholesale Club Holdings, Inc. * | 34,877 | 2,038,212 |
| Grocery Outlet Holding Corp. * | 26,678 | 591,985 |
| Ingles Markets, Inc., Class A | 43,035 | 2,977,592 |
| PriceSmart, Inc. | 32,423 | 2,332,835 |
| The Andersons, Inc. | 92,474 | 3,149,664 |
| The Chefs' Warehouse, Inc. * | 30,044 | 1,047,634 |
| Weis Markets, Inc. | 29,504 | 1,661,370 |
| 13,799,292 | ||
| Food, Beverage & Tobacco 2.1% | ||
| B&G Foods, Inc. (a) | 89,168 | 2,625,106 |
| Brown-Forman Corp., Class B | 57,941 | 3,933,614 |
| Calavo Growers, Inc. | 21,789 | 875,918 |
| Cal-Maine Foods, Inc. | 54,936 | 1,980,992 |
| Coca-Cola Consolidated, Inc. | 2,829 | 1,135,561 |
| Fresh Del Monte Produce, Inc. | 116,446 | 3,899,777 |
| Hostess Brands, Inc. * | 66,213 | 1,252,088 |
| J&J Snack Foods Corp. | 11,080 | 1,634,854 |
| John B. Sanfilippo & Son, Inc. | 12,081 | 1,020,845 |
| Lamb Weston Holdings, Inc. | 47,249 | 2,667,206 |
| Lancaster Colony Corp. | 11,362 | 1,931,540 |
| Nomad Foods Ltd. * | 72,685 | 1,979,213 |
| Pilgrim's Pride Corp. * | 104,378 | 2,939,284 |
| The Boston Beer Co., Inc., Class A * | 2,021 | 995,302 |
| The Hain Celestial Group, Inc. * | 61,004 | 2,737,249 |
| TreeHouse Foods, Inc. * | 89,369 | 3,229,796 |
| Universal Corp. | 70,525 | 3,314,675 |
| Vector Group Ltd. | 158,767 | 2,105,250 |
| 40,258,270 | ||
| Health Care Equipment & Services 4.1% | ||
| ABIOMED, Inc. * | 4,673 | 1,551,623 |
| Acadia Healthcare Co., Inc. * | 55,344 | 3,431,328 |
| Addus HomeCare Corp. * | 4,851 | 453,569 |
| Allscripts Healthcare Solutions, Inc. * | 111,232 | 1,532,777 |
| Amedisys, Inc. * | 7,767 | 1,315,264 |
| AMN Healthcare Services, Inc. * | 27,413 | 2,705,663 |
| Avanos Medical, Inc. * | 23,196 | 731,602 |
| Brookdale Senior Living, Inc. * | 428,785 | 2,787,102 |
| Change Healthcare, Inc. * | 76,335 | 1,643,493 |
| Chemed Corp. | 6,805 | 3,281,711 |
| Community Health Systems, Inc. * | 209,775 | 2,748,052 |
| CONMED Corp. | 9,366 | 1,370,058 |
| Covetrus, Inc. * | 111,808 | 2,257,404 |
| Globus Medical, Inc., Class A * | 19,868 | 1,533,214 |
| Haemonetics Corp. * | 22,644 | 1,555,869 |
| Hill-Rom Holdings, Inc. | 31,927 | 4,945,492 |
| ICU Medical, Inc. * | 7,134 | 1,670,283 |
| IDEXX Laboratories, Inc. * | 4,033 | 2,686,543 |
| Integer Holdings Corp. * | 17,860 | 1,607,757 |
| Integra LifeSciences Holdings Corp. * | 18,901 | 1,256,160 |
| LHC Group, Inc. * | 8,860 | 1,192,467 |
| LivaNova plc * | 13,772 | 1,056,588 |
| Masimo Corp. * | 8,134 | 2,306,314 |
| MEDNAX, Inc. * | 180,733 | 4,921,360 |
| Merit Medical Systems, Inc. * | 16,558 | 1,113,691 |
| ModivCare, Inc. * | 8,881 | 1,445,560 |
| National HealthCare Corp. | 18,568 | 1,298,646 |
39
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Natus Medical, Inc. * | 17,736 | 444,287 |
| Neogen Corp. * | 20,696 | 875,648 |
| NextGen Healthcare, Inc. * | 41,690 | 686,217 |
| NuVasive, Inc. * | 28,524 | 1,522,041 |
| Omnicell, Inc. * | 7,944 | 1,415,224 |
| Orthofix Medical, Inc. * | 15,122 | 544,090 |
| Owens & Minor, Inc. | 116,366 | 4,175,212 |
| Premier, Inc., Class A | 78,065 | 3,040,632 |
| Select Medical Holdings Corp. | 84,099 | 2,793,769 |
| Teleflex, Inc. | 10,259 | 3,661,847 |
| The Ensign Group, Inc. | 18,206 | 1,420,250 |
| Triple-S Management Corp., Class B * | 75,263 | 2,656,031 |
| U.S. Physical Therapy, Inc. | 3,859 | 416,232 |
| Varex Imaging Corp. * | 41,062 | 1,102,515 |
| Veeva Systems, Inc., Class A * | 4,743 | 1,503,578 |
| 80,657,163 | ||
| Household & Personal Products 1.0% | ||
| Central Garden & Pet Co., Class A * | 30,972 | 1,430,906 |
| Coty, Inc., Class A * | 406,361 | 3,445,941 |
| Edgewell Personal Care Co. | 82,476 | 2,885,835 |
| Energizer Holdings, Inc. | 36,919 | 1,346,436 |
| Herbalife Nutrition Ltd. * | 53,280 | 2,472,192 |
| Inter Parfums, Inc. | 6,219 | 574,511 |
| Medifast, Inc. | 3,182 | 624,531 |
| Spectrum Brands Holdings, Inc. | 42,290 | 3,964,688 |
| USANA Health Sciences, Inc. * | 14,760 | 1,432,606 |
| WD-40 Co. | 4,003 | 908,681 |
| 19,086,327 | ||
| Insurance 2.3% | ||
| Ambac Financial Group, Inc. * | 80,337 | 1,358,499 |
| American Equity Investment Life Holding Co. | 125,552 | 4,001,342 |
| American National Group, Inc. | 7,370 | 1,398,163 |
| AMERISAFE, Inc. | 19,184 | 1,137,419 |
| Argo Group International Holdings Ltd. | 31,449 | 1,732,840 |
| Brighthouse Financial, Inc. * | 30,771 | 1,545,627 |
| CNA Financial Corp. | 35,864 | 1,608,859 |
| Employers Holdings, Inc. | 32,097 | 1,238,944 |
| Enstar Group Ltd. * | 4,539 | 1,047,510 |
| Horace Mann Educators Corp. | 29,029 | 1,137,356 |
| James River Group Holdings Ltd. | 32,757 | 1,046,586 |
| Kemper Corp. | 43,219 | 2,743,542 |
| MBIA, Inc. * | 182,873 | 2,841,846 |
| Mercury General Corp. | 30,013 | 1,635,408 |
| ProAssurance Corp. | 141,749 | 3,247,470 |
| RenaissanceRe Holdings Ltd. | 24,116 | 3,419,649 |
| RLI Corp. | 14,660 | 1,587,825 |
| Safety Insurance Group, Inc. | 14,594 | 1,144,316 |
| Selective Insurance Group, Inc. | 34,388 | 2,694,988 |
| SiriusPoint Ltd. * | 52,609 | 494,525 |
| Stewart Information Services Corp. | 38,114 | 2,712,573 |
| United Fire Group, Inc. | 31,964 | 653,025 |
| Universal Insurance Holdings, Inc. | 81,210 | 1,199,472 |
| White Mountains Insurance Group Ltd. | 2,976 | 3,139,650 |
| 44,767,434 | ||
| Materials 6.1% | ||
| AdvanSix, Inc. * | 51,609 | 2,508,197 |
| Allegheny Technologies, Inc. * | 150,094 | 2,416,513 |
| Avient Corp. | 78,424 | 4,225,485 |
| Balchem Corp. | 10,687 | 1,636,073 |
| Cabot Corp. | 66,015 | 3,521,900 |
| Carpenter Technology Corp. | 89,737 | 2,771,078 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Century Aluminum Co. * | 71,448 | 943,828 |
| Clearwater Paper Corp. * | 45,624 | 1,908,452 |
| Cleveland-Cliffs, Inc. * | 172,399 | 4,156,540 |
| Compass Minerals International, Inc. | 35,926 | 2,356,746 |
| Constellium SE * | 88,121 | 1,622,308 |
| Eagle Materials, Inc. | 26,003 | 3,857,805 |
| Element Solutions, Inc. | 106,696 | 2,423,066 |
| Ferro Corp. * | 59,086 | 1,241,988 |
| GCP Applied Technologies, Inc. * | 42,385 | 958,325 |
| Glatfelter Corp. | 77,431 | 1,272,191 |
| Greif, Inc., Class A | 38,707 | 2,503,569 |
| H.B. Fuller Co. | 41,426 | 2,920,947 |
| Hawkins, Inc. | 14,755 | 541,066 |
| Hecla Mining Co. | 189,711 | 1,096,529 |
| Ingevity Corp. * | 19,656 | 1,531,399 |
| Innospec, Inc. | 21,267 | 1,927,003 |
| Kaiser Aluminum Corp. | 20,135 | 1,955,914 |
| Koppers Holdings, Inc. * | 23,656 | 830,089 |
| Kraton Corp. * | 48,015 | 2,191,885 |
| Livent Corp. * | 41,699 | 1,176,746 |
| Louisiana-Pacific Corp. | 83,317 | 4,909,871 |
| Materion Corp. | 23,861 | 1,722,287 |
| Minerals Technologies, Inc. | 35,671 | 2,530,501 |
| Myers Industries, Inc. | 36,174 | 744,461 |
| Neenah, Inc. | 27,967 | 1,413,452 |
| NewMarket Corp. | 7,174 | 2,439,232 |
| Orion Engineered Carbons S.A. * | 91,370 | 1,717,756 |
| Quaker Chemical Corp. | 3,496 | 859,457 |
| Royal Gold, Inc. | 15,240 | 1,509,065 |
| Schnitzer Steel Industries, Inc., Class A | 57,563 | 3,096,889 |
| Schweitzer-Mauduit International, Inc. | 41,169 | 1,434,328 |
| Sensient Technologies Corp. | 29,172 | 2,788,843 |
| Silgan Holdings, Inc. | 80,109 | 3,220,382 |
| Southern Copper Corp. | 35,780 | 2,146,442 |
| Stepan Co. | 20,241 | 2,429,325 |
| Summit Materials, Inc., Class A * | 90,518 | 3,226,967 |
| SunCoke Energy, Inc. | 215,412 | 1,555,275 |
| The Scotts Miracle-Gro Co. | 16,330 | 2,424,352 |
| Tredegar Corp. | 46,220 | 557,413 |
| TriMas Corp. * | 34,886 | 1,163,448 |
| Trinseo plc | 69,829 | 3,914,614 |
| Tronox Holdings plc, Class A | 77,123 | 1,798,508 |
| Valvoline, Inc. | 72,830 | 2,473,307 |
| Verso Corp., Class A | 182,101 | 4,020,790 |
| Warrior Met Coal, Inc. | 202,325 | 4,849,730 |
| Westlake Chemical Corp. | 36,940 | 3,595,739 |
| Worthington Industries, Inc. | 43,094 | 2,340,866 |
| 119,378,942 | ||
| Media & Entertainment 4.2% | ||
| AMC Entertainment Holdings, Inc., Class A *(a) | 192,303 | 6,801,757 |
| AMC Networks, Inc., Class A * | 80,428 | 3,200,230 |
| Cable One, Inc. | 1,133 | 1,938,801 |
| Cars.com, Inc. * | 109,030 | 1,419,571 |
| Gannett Co., Inc. * | 387,781 | 2,249,130 |
| Gray Television, Inc. | 85,012 | 1,992,681 |
| iHeartMedia, Inc., Class A * | 137,401 | 2,662,831 |
| IMAX Corp. * | 27,985 | 527,517 |
| John Wiley & Sons, Inc., Class A | 50,171 | 2,717,763 |
| Liberty Media Corp. - Liberty Formula One, Class A * | 5,820 | 303,513 |
| Liberty Media Corp. - Liberty Formula One, Class C * | 45,232 | 2,523,946 |
| Liberty TripAdvisor Holdings, Inc., Class A * | 204,078 | 630,601 |
40
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Lions Gate Entertainment Corp., Class A * | 59,916 | 775,912 |
| Lions Gate Entertainment Corp., Class B * | 120,893 | 1,368,509 |
| Live Nation Entertainment, Inc. * | 32,936 | 3,331,476 |
| Madison Square Garden Entertainment Corp. * | 21,045 | 1,483,041 |
| Madison Square Garden Sports Corp. * | 6,109 | 1,157,717 |
| Meredith Corp. * | 74,112 | 4,316,283 |
| National CineMedia, Inc. | 263,239 | 837,100 |
| Nexstar Media Group, Inc., Class A | 27,727 | 4,157,109 |
| Scholastic Corp. | 63,903 | 2,312,650 |
| Sinclair Broadcast Group, Inc., Class A | 98,226 | 2,566,645 |
| Sirius XM Holdings, Inc. (a) | 560,128 | 3,411,179 |
| Spotify Technology S.A. * | 8,007 | 2,317,226 |
| Take-Two Interactive Software, Inc. * | 21,254 | 3,846,974 |
| TEGNA, Inc. | 235,113 | 4,622,322 |
| The E.W. Scripps Co., Class A | 44,225 | 822,585 |
| The Marcus Corp. * | 50,931 | 945,789 |
| The New York Times Co., Class A | 50,245 | 2,742,875 |
| TripAdvisor, Inc. * | 72,118 | 2,377,730 |
| World Wrestling Entertainment, Inc., Class A | 10,826 | 661,360 |
| Yandex N.V., Class A * | 46,671 | 3,866,226 |
| Yelp, Inc. * | 52,984 | 2,046,772 |
| Ziff Davis, Inc. * | 24,209 | 3,105,288 |
| Zynga, Inc., Class A * | 159,831 | 1,179,553 |
| 81,220,662 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 2.4% | ||
| Alkermes plc * | 40,219 | 1,218,234 |
| Avantor, Inc. * | 35,306 | 1,425,656 |
| BioMarin Pharmaceutical, Inc. * | 16,992 | 1,346,276 |
| Bio-Rad Laboratories, Inc., Class A * | 3,861 | 3,068,259 |
| Bio-Techne Corp. | 4,436 | 2,322,911 |
| Bruker Corp. | 30,567 | 2,454,530 |
| Catalent, Inc. * | 23,031 | 3,175,054 |
| Charles River Laboratories International, Inc. * | 8,825 | 3,959,601 |
| Elanco Animal Health, Inc. * | 118,638 | 3,900,817 |
| Emergent BioSolutions, Inc. * | 13,980 | 666,427 |
| Exelixis, Inc. * | 49,123 | 1,056,636 |
| Horizon Therapeutics plc * | 12,119 | 1,453,189 |
| Incyte Corp. * | 22,858 | 1,531,029 |
| Ligand Pharmaceuticals, Inc. * | 3,701 | 540,124 |
| Medpace Holdings, Inc. * | 3,558 | 806,065 |
| Myriad Genetics, Inc. * | 74,637 | 2,296,581 |
| PerkinElmer, Inc. | 27,613 | 4,884,464 |
| PPD, Inc. * | 30,852 | 1,455,289 |
| Prestige Consumer Healthcare, Inc. * | 33,955 | 2,036,960 |
| Royalty Pharma plc, Class A | 11,143 | 440,483 |
| Syneos Health, Inc. * | 29,260 | 2,731,128 |
| West Pharmaceutical Services, Inc. | 10,399 | 4,470,322 |
| 47,240,035 | ||
| Real Estate 10.0% | ||
| Acadia Realty Trust | 60,138 | 1,285,750 |
| Alexander & Baldwin, Inc. | 110,397 | 2,708,038 |
| American Assets Trust, Inc. | 29,930 | 1,132,252 |
| American Campus Communities, Inc. | 88,053 | 4,730,207 |
| American Finance Trust, Inc. | 109,569 | 907,231 |
| American Homes 4 Rent, Class A | 73,284 | 2,975,330 |
| Americold Realty Trust | 46,156 | 1,360,217 |
| Brandywine Realty Trust | 194,417 | 2,576,025 |
| CareTrust REIT, Inc. | 21,785 | 452,039 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Centerspace | 10,687 | 1,081,952 |
| Chatham Lodging Trust * | 86,850 | 1,102,127 |
| Columbia Property Trust, Inc. | 134,759 | 2,583,330 |
| CoreSite Realty Corp. | 11,240 | 1,601,250 |
| Corporate Office Properties Trust | 83,574 | 2,266,527 |
| Cousins Properties, Inc. | 51,341 | 2,033,617 |
| CubeSmart | 67,923 | 3,736,444 |
| Cushman & Wakefield plc * | 69,906 | 1,285,571 |
| CyrusOne, Inc. | 37,509 | 3,076,488 |
| DiamondRock Hospitality Co. * | 301,552 | 2,726,030 |
| Douglas Emmett, Inc. | 90,777 | 2,966,592 |
| Easterly Government Properties, Inc. | 24,028 | 505,309 |
| EastGroup Properties, Inc. | 8,803 | 1,741,057 |
| Empire State Realty Trust, Inc., Class A | 173,673 | 1,681,155 |
| EPR Properties | 60,511 | 3,038,257 |
| Equity Commonwealth * | 68,340 | 1,772,056 |
| Equity LifeStyle Properties, Inc. | 48,830 | 4,126,623 |
| Federal Realty Investment Trust | 38,417 | 4,623,486 |
| First Industrial Realty Trust, Inc. | 37,378 | 2,176,521 |
| Gaming & Leisure Properties, Inc. | 88,061 | 4,270,078 |
| Global Net Lease, Inc. | 66,197 | 1,060,476 |
| Healthcare Realty Trust, Inc. | 72,402 | 2,393,610 |
| Healthcare Trust of America, Inc., Class A | 101,352 | 3,384,143 |
| Hersha Hospitality Trust * | 118,749 | 1,060,429 |
| Highwoods Properties, Inc. | 77,460 | 3,473,306 |
| HomeBanc Corp. *(b) | 6,875 | 0 |
| Hudson Pacific Properties, Inc. | 99,416 | 2,559,962 |
| Independence Realty Trust, Inc. | 34,984 | 826,672 |
| Industrial Logistics Properties Trust | 26,021 | 730,930 |
| iStar, Inc. | 70,680 | 1,783,963 |
| JBG SMITH Properties | 57,765 | 1,667,098 |
| Kennedy-Wilson Holdings, Inc. | 92,531 | 2,069,918 |
| Kilroy Realty Corp. | 52,024 | 3,505,377 |
| Kite Realty Group Trust | 254,027 | 5,156,752 |
| Lexington Realty Trust | 168,608 | 2,456,619 |
| Life Storage, Inc. | 27,165 | 3,634,949 |
| LTC Properties, Inc. | 21,302 | 678,682 |
| Mack-Cali Realty Corp. * | 97,657 | 1,776,381 |
| Marcus & Millichap, Inc. * | 20,095 | 946,475 |
| Medical Properties Trust, Inc. | 154,974 | 3,305,595 |
| National Health Investors, Inc. | 20,071 | 1,079,418 |
| National Retail Properties, Inc. | 65,387 | 2,965,954 |
| Newmark Group, Inc., Class A | 83,144 | 1,237,183 |
| Office Properties Income Trust | 65,902 | 1,688,409 |
| Outfront Media, Inc. | 182,466 | 4,541,579 |
| Paramount Group, Inc. | 240,547 | 2,039,839 |
| Pebblebrook Hotel Trust | 130,504 | 2,931,120 |
| Physicians Realty Trust | 83,767 | 1,592,411 |
| Piedmont Office Realty Trust, Inc., Class A | 158,320 | 2,811,763 |
| PotlatchDeltic Corp. | 34,085 | 1,781,623 |
| Preferred Apartment Communities, Inc., Class A | 97,074 | 1,224,103 |
| PS Business Parks, Inc. | 8,410 | 1,494,457 |
| Rayonier, Inc. | 82,768 | 3,089,729 |
| Retail Opportunity Investments Corp. | 74,726 | 1,327,881 |
| Rexford Industrial Realty, Inc. | 11,103 | 746,122 |
| RPT Realty | 110,577 | 1,469,568 |
| Ryman Hospitality Properties, Inc. * | 34,853 | 2,981,326 |
| Sabra Health Care REIT, Inc. | 123,404 | 1,746,167 |
| SBA Communications Corp. | 12,337 | 4,260,336 |
| Seritage Growth Properties, Class A * | 42,857 | 659,998 |
| SITE Centers Corp. | 199,295 | 3,166,798 |
| Spirit Realty Capital, Inc. | 58,416 | 2,858,295 |
| STAG Industrial, Inc. | 39,047 | 1,699,716 |
| STORE Capital Corp. | 61,897 | 2,124,924 |
| Summit Hotel Properties, Inc. * | 150,958 | 1,509,580 |
41
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Sun Communities, Inc. | 24,043 | 4,711,947 |
| Sunstone Hotel Investors, Inc. * | 336,738 | 4,155,347 |
| Tanger Factory Outlet Centers, Inc. | 150,412 | 2,526,922 |
| Terreno Realty Corp. | 8,213 | 600,617 |
| The GEO Group, Inc. (a) | 527,559 | 4,315,433 |
| The Howard Hughes Corp. * | 14,670 | 1,278,197 |
| Uniti Group, Inc. | 298,010 | 4,264,523 |
| Urban Edge Properties | 93,103 | 1,632,096 |
| VICI Properties, Inc. | 114,594 | 3,363,334 |
| Washington Real Estate Investment Trust | 64,534 | 1,635,937 |
| Xenia Hotels & Resorts, Inc. * | 164,321 | 2,924,914 |
| Zillow Group, Inc., Class A * | 1,575 | 166,509 |
| Zillow Group, Inc., Class C * | 3,716 | 385,089 |
| 193,982,060 | ||
| Retailing 4.6% | ||
| Abercrombie & Fitch Co., Class A * | 135,300 | 5,349,762 |
| America's Car-Mart, Inc. * | 3,430 | 409,851 |
| Big 5 Sporting Goods Corp. (a) | 114,077 | 2,758,382 |
| Boot Barn Holdings, Inc. * | 7,161 | 748,253 |
| Caleres, Inc. | 125,939 | 2,904,153 |
| Chico's FAS, Inc. * | 1,241,396 | 6,778,022 |
| Citi Trends, Inc. * | 17,522 | 1,355,502 |
| Conn's, Inc. * | 61,706 | 1,374,193 |
| Designer Brands, Inc., Class A * | 285,426 | 3,861,814 |
| Dillard’s, Inc., Class A | 38,887 | 8,988,341 |
| Etsy, Inc. * | 2,660 | 666,835 |
| Express, Inc. * | 927,769 | 3,562,633 |
| Five Below, Inc. * | 9,307 | 1,836,271 |
| Floor & Decor Holdings, Inc., Class A * | 11,969 | 1,626,827 |
| Genesco, Inc. * | 58,865 | 3,566,630 |
| Groupon, Inc. * | 63,737 | 1,352,499 |
| Guess?, Inc. | 88,522 | 1,833,291 |
| Haverty Furniture Cos., Inc. | 32,842 | 942,565 |
| Hibbett, Inc. | 25,358 | 1,963,724 |
| MarineMax, Inc. * | 24,125 | 1,249,434 |
| MercadoLibre, Inc. * | 667 | 987,840 |
| Monro, Inc. | 28,917 | 1,785,914 |
| National Vision Holdings, Inc. * | 27,672 | 1,705,702 |
| Ollie's Bargain Outlet Holdings, Inc. * | 17,377 | 1,175,728 |
| Overstock.com, Inc. * | 37,365 | 3,558,269 |
| Party City Holdco, Inc. * | 217,174 | 1,578,855 |
| PetMed Express, Inc. (a) | 16,388 | 465,911 |
| Pool Corp. | 8,960 | 4,615,834 |
| Rent-A-Center, Inc. | 23,621 | 1,258,054 |
| RH * | 1,700 | 1,121,371 |
| Sally Beauty Holdings, Inc. * | 237,121 | 3,618,466 |
| Shoe Carnival, Inc. | 38,270 | 1,296,205 |
| Sleep Number Corp. * | 18,415 | 1,626,781 |
| Sonic Automotive, Inc., Class A | 61,780 | 3,053,785 |
| Stitch Fix, Inc., Class A * | 9,964 | 344,754 |
| The Buckle, Inc. | 41,321 | 1,719,780 |
| The Children's Place, Inc. * | 27,896 | 2,312,299 |
| TravelCenters of America, Inc. * | 46,667 | 2,515,818 |
| Zumiez, Inc. * | 27,458 | 1,117,541 |
| 88,987,889 | ||
| Semiconductors & Semiconductor Equipment 2.3% | ||
| Ambarella, Inc. * | 7,455 | 1,385,363 |
| Amkor Technology, Inc. | 120,639 | 2,644,407 |
| Brooks Automation, Inc. | 13,264 | 1,544,593 |
| Cirrus Logic, Inc. * | 44,616 | 3,605,419 |
| CMC Materials, Inc. | 8,626 | 1,107,320 |
| Diodes, Inc. * | 19,300 | 1,854,537 |
| Entegris, Inc. | 22,546 | 3,174,026 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| First Solar, Inc. * | 44,929 | 5,373,059 |
| FormFactor, Inc. * | 15,640 | 622,159 |
| Kulicke & Soffa Industries, Inc. | 36,581 | 2,085,117 |
| MKS Instruments, Inc. | 22,086 | 3,314,004 |
| Monolithic Power Systems, Inc. | 3,384 | 1,778,157 |
| Photronics, Inc. * | 87,274 | 1,133,689 |
| Power Integrations, Inc. | 15,145 | 1,563,115 |
| Semtech Corp. * | 18,629 | 1,584,024 |
| Silicon Laboratories, Inc. * | 10,261 | 1,936,866 |
| SolarEdge Technologies, Inc. * | 2,995 | 1,062,267 |
| Synaptics, Inc. * | 21,281 | 4,140,644 |
| Ultra Clean Holdings, Inc. * | 19,327 | 958,039 |
| Universal Display Corp. | 2,767 | 506,914 |
| Wolfspeed, Inc. * | 31,562 | 3,790,912 |
| 45,164,631 | ||
| Software & Services 4.6% | ||
| ACI Worldwide, Inc. * | 50,285 | 1,542,744 |
| Aspen Technology, Inc. * | 16,516 | 2,587,892 |
| Avaya Holdings Corp. * | 65,639 | 1,222,198 |
| Black Knight, Inc. * | 37,861 | 2,654,435 |
| Blackbaud, Inc. * | 14,324 | 1,017,147 |
| Cerence, Inc. * | 11,968 | 1,258,196 |
| Cognyte Software Ltd. * | 24,319 | 484,191 |
| CommVault Systems, Inc. * | 17,863 | 1,098,575 |
| Concentrix Corp. | 25,833 | 4,590,008 |
| Conduent, Inc. * | 614,815 | 4,150,001 |
| Consensus Cloud Solutions, Inc. * | 8,040 | 509,173 |
| CSG Systems International, Inc. | 31,420 | 1,572,571 |
| Dolby Laboratories, Inc., Class A | 24,021 | 2,122,255 |
| Dropbox, Inc., Class A * | 29,379 | 895,766 |
| Ebix, Inc. | 32,332 | 1,060,813 |
| Envestnet, Inc. * | 7,727 | 645,205 |
| EPAM Systems, Inc. * | 5,735 | 3,861,031 |
| Euronet Worldwide, Inc. * | 21,812 | 2,447,088 |
| EVERTEC, Inc. | 25,555 | 1,155,342 |
| ExlService Holdings, Inc. * | 13,747 | 1,685,795 |
| Fair Isaac Corp. * | 5,137 | 2,045,553 |
| Fortinet, Inc. * | 10,979 | 3,692,677 |
| Gartner, Inc. * | 18,291 | 6,070,966 |
| Globant S.A. * | 2,377 | 758,715 |
| GoDaddy, Inc., Class A * | 19,577 | 1,354,141 |
| Guidewire Software, Inc. * | 5,051 | 635,062 |
| InterDigital, Inc. | 32,420 | 2,170,519 |
| LiveRamp Holdings, Inc. * | 46,588 | 2,492,924 |
| Manhattan Associates, Inc. * | 16,638 | 3,020,463 |
| MicroStrategy, Inc., Class A *(a) | 1,847 | 1,320,716 |
| Nuance Communications, Inc. * | 35,357 | 1,946,403 |
| Pagseguro Digital Ltd., Class A * | 13,055 | 472,591 |
| Palo Alto Networks, Inc. * | 4,714 | 2,399,850 |
| Paycom Software, Inc. * | 2,471 | 1,353,737 |
| Pegasystems, Inc. | 5,578 | 662,220 |
| Perficient, Inc. * | 13,509 | 1,669,712 |
| Progress Software Corp. | 28,458 | 1,463,026 |
| PTC, Inc. * | 12,976 | 1,652,494 |
| ServiceNow, Inc. * | 1,504 | 1,049,431 |
| Splunk, Inc. * | 7,467 | 1,230,711 |
| Square, Inc., Class A * | 4,804 | 1,222,618 |
| StoneCo Ltd., Class A * | 7,033 | 238,137 |
| Tyler Technologies, Inc. * | 3,883 | 2,109,323 |
| Unisys Corp. * | 47,588 | 1,216,825 |
| Verint Systems, Inc. * | 23,257 | 1,083,776 |
| VMware, Inc., Class A *(a) | 24,235 | 3,676,450 |
| Vonage Holdings Corp. * | 85,551 | 1,379,082 |
| WEX, Inc. * | 11,972 | 1,792,208 |
42
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Workday, Inc., Class A * | 2,904 | 842,102 |
| Xperi Holding Corp. | 77,595 | 1,390,502 |
| 88,973,360 | ||
| Technology Hardware & Equipment 4.1% | ||
| 3D Systems Corp. * | 39,072 | 1,100,267 |
| ADTRAN, Inc. | 67,008 | 1,238,308 |
| Advanced Energy Industries, Inc. | 14,740 | 1,353,427 |
| Arista Networks, Inc. * | 7,959 | 3,260,723 |
| Badger Meter, Inc. | 9,460 | 967,285 |
| Belden, Inc. | 57,817 | 3,481,162 |
| Benchmark Electronics, Inc. | 126,844 | 2,956,734 |
| Ciena Corp. * | 74,790 | 4,060,349 |
| Cognex Corp. | 28,505 | 2,496,753 |
| Coherent, Inc. * | 12,948 | 3,293,971 |
| CommScope Holding Co., Inc. * | 284,440 | 3,046,352 |
| Comtech Telecommunications Corp. | 34,179 | 737,241 |
| CTS Corp. | 23,740 | 845,619 |
| ePlus, Inc. * | 18,212 | 2,013,701 |
| Fabrinet * | 20,481 | 1,966,176 |
| II-VI, Inc. * | 23,796 | 1,439,896 |
| IPG Photonics Corp. * | 12,807 | 2,036,441 |
| Itron, Inc. * | 18,515 | 1,439,912 |
| Knowles Corp. * | 75,005 | 1,563,104 |
| Littelfuse, Inc. | 9,357 | 2,756,104 |
| Lumentum Holdings, Inc. * | 16,431 | 1,356,872 |
| Methode Electronics, Inc. | 36,315 | 1,527,772 |
| National Instruments Corp. | 80,610 | 3,423,507 |
| NETGEAR, Inc. * | 34,641 | 998,700 |
| NetScout Systems, Inc. * | 113,341 | 3,067,007 |
| Novanta, Inc. * | 3,818 | 658,834 |
| OSI Systems, Inc. * | 14,681 | 1,366,948 |
| PC Connection, Inc. | 28,807 | 1,326,562 |
| Plantronics, Inc. * | 48,456 | 1,296,683 |
| Plexus Corp. * | 35,772 | 3,123,611 |
| Rogers Corp. * | 8,072 | 1,623,441 |
| ScanSource, Inc. * | 110,441 | 3,951,579 |
| Stratasys Ltd. * | 39,996 | 1,261,474 |
| Super Micro Computer, Inc. * | 66,760 | 2,362,636 |
| TTM Technologies, Inc. * | 183,287 | 2,426,720 |
| ViaSat, Inc. * | 45,516 | 2,716,850 |
| Viavi Solutions, Inc. * | 63,288 | 974,635 |
| Vishay Intertechnology, Inc. | 167,040 | 3,210,509 |
| 78,727,865 | ||
| Telecommunication Services 0.6% | ||
| ATN International, Inc. | 16,494 | 672,625 |
| Cogent Communications Holdings, Inc. | 18,298 | 1,401,444 |
| Consolidated Communications Holdings, Inc. * | 303,745 | 2,247,713 |
| EchoStar Corp., Class A * | 75,769 | 1,777,541 |
| Iridium Communications, Inc. * | 27,050 | 1,096,877 |
| Liberty Latin America Ltd., Class A * | 66,629 | 800,881 |
| Liberty Latin America Ltd., Class C * | 205,436 | 2,471,395 |
| Shenandoah Telecommunications Co. | 28,324 | 782,875 |
| United States Cellular Corp. * | 32,945 | 1,007,129 |
| 12,258,480 | ||
| Transportation 2.5% | ||
| Air Transport Services Group, Inc. * | 52,267 | 1,300,926 |
| Alaska Air Group, Inc. * | 50,576 | 2,670,413 |
| Allegiant Travel Co. * | 4,065 | 712,472 |
| AMERCO | 6,142 | 4,526,592 |
| ArcBest Corp. | 52,127 | 4,683,611 |
| Atlas Air Worldwide Holdings, Inc. * | 28,641 | 2,323,358 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Atlas Corp. (a) | 91,394 | 1,279,516 |
| Copa Holdings S.A., Class A * | 11,200 | 828,352 |
| Costamare, Inc. | 69,875 | 937,024 |
| Echo Global Logistics, Inc. * | 51,029 | 2,461,129 |
| Forward Air Corp. | 25,051 | 2,519,128 |
| Hawaiian Holdings, Inc. * | 42,895 | 830,018 |
| Heartland Express, Inc. | 58,755 | 959,469 |
| Hub Group, Inc., Class A * | 57,028 | 4,480,690 |
| JetBlue Airways Corp. * | 180,845 | 2,537,255 |
| Marten Transport Ltd. | 68,170 | 1,133,667 |
| Mesa Air Group, Inc. * | 54,602 | 411,699 |
| Saia, Inc. * | 10,220 | 3,195,181 |
| Schneider National, Inc., Class B | 94,029 | 2,345,083 |
| SkyWest, Inc. * | 23,198 | 998,210 |
| Spirit Airlines, Inc. * | 36,036 | 787,387 |
| Uber Technologies, Inc. * | 60,730 | 2,661,189 |
| Werner Enterprises, Inc. | 77,921 | 3,531,380 |
| Yellow Corp. * | 130,055 | 1,137,981 |
| 49,251,730 | ||
| Utilities 3.1% | ||
| ALLETE, Inc. | 51,477 | 3,167,895 |
| American States Water Co. | 15,981 | 1,451,714 |
| Atlantica Sustainable Infrastructure plc | 47,529 | 1,870,266 |
| Avangrid, Inc. | 51,853 | 2,732,653 |
| Avista Corp. | 77,156 | 3,071,580 |
| Black Hills Corp. | 53,936 | 3,580,272 |
| California Water Service Group | 23,104 | 1,406,572 |
| Chesapeake Utilities Corp. | 8,333 | 1,092,206 |
| Clearway Energy, Inc., Class A | 13,900 | 458,561 |
| Clearway Energy, Inc., Class C | 31,935 | 1,133,054 |
| Essential Utilities, Inc. | 70,143 | 3,301,631 |
| Hawaiian Electric Industries, Inc. | 100,273 | 4,067,073 |
| IDACORP, Inc. | 35,928 | 3,748,009 |
| MGE Energy, Inc. | 19,232 | 1,459,516 |
| National Fuel Gas Co. | 69,823 | 4,009,935 |
| New Jersey Resources Corp. | 79,115 | 2,991,338 |
| Northwest Natural Holding Co. | 27,982 | 1,261,708 |
| NorthWestern Corp. | 51,564 | 2,931,929 |
| ONE Gas, Inc. | 44,375 | 2,986,437 |
| Ormat Technologies, Inc. | 18,092 | 1,308,594 |
| Otter Tail Corp. | 35,321 | 2,190,255 |
| PNM Resources, Inc. | 60,193 | 2,994,602 |
| SJW Group | 12,854 | 847,336 |
| South Jersey Industries, Inc. | 84,314 | 1,918,987 |
| Spire, Inc. | 48,960 | 3,072,730 |
| Unitil Corp. | 17,328 | 723,444 |
| 59,778,297 | ||
| Total Common Stocks (Cost $1,153,485,392) | 1,938,285,390 | |
43
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBEROF SHARES | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.0% OF NET ASSETS | ||
| Money Market Funds 1.0% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (c) | 5,601,660 | 5,601,660 |
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 14,270,925 | 14,270,925 |
| 19,872,585 | ||
| Total Short-Term Investments (Cost $19,872,585) | 19,872,585 | |
| Total Investments in Securities (Cost $1,173,357,977) | 1,958,157,975 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| Russell 2000 Index, e-mini, expires 12/17/21 | 58 | 6,656,370 | 105,847 |
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $13,932,735. |
| (b) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the 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. |
| REIT — | Real Estate Investment Trust |
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $1,744,303,330 | $— | $— | $1,744,303,330 |
| Real Estate | 193,982,060 | — | 0* | 193,982,060 |
| Short-Term Investments1 | 19,872,585 | — | — | 19,872,585 |
| Futures Contracts2 | 105,847 | — | — | 105,847 |
| Total | $1,958,263,822 | $— | $0* | $1,958,263,822 |
| * | Level 3 amount shown includes securities determined to have no value at October 31, 2021. |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
44
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $1,173,357,977) including securities on loan of $13,932,735 | $1,958,157,975 | |
| Cash | 1,090,492 | |
| Foreign currency, at value (cost $34) | 26 | |
| Deposit with broker for futures contracts | 851,510 | |
| Receivables: | ||
| Fund shares sold | 2,427,399 | |
| Dividends | 489,277 | |
| Income from securities on loan | 26,635 | |
| Variation margin on future contracts | + | 618 |
| Total assets | 1,963,043,932 | |
| Liabilities | ||
| Collateral held for securities on loan | 14,270,925 | |
| Payables: | ||
| Fund shares redeemed | 1,795,825 | |
| Deferred dividend income | 1,092,845 | |
| Investment adviser fees | + | 409,434 |
| Total liabilities | 17,569,029 | |
| Net assets | $1,945,474,903 | |
| Net Assets by Source | ||
| Capital received from investors | $1,039,591,819 | |
| Total distributable earnings | + | 905,883,084 |
| Net assets | $1,945,474,903 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $1,945,474,903 | 100,687,402 | $19.32 | ||
45
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $17,727) | $23,580,766 | |
| Securities on loan, net | + | 856,439 |
| Total investment income | 24,437,205 | |
| Expenses | ||
| Investment adviser fees | + | 4,793,960 |
| Total expenses | – | 4,793,960 |
| Net investment income | 19,643,245 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 310,215,395 | |
| Net realized gains on futures contracts | + | 2,412,008 |
| Net realized gains | 312,627,403 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 540,230,229 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 434,903 |
| Net change in unrealized appreciation (depreciation) | + | 540,665,132 |
| Net realized and unrealized gains | 853,292,535 | |
| Increase in net assets resulting from operations | $872,935,780 | |
46
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental US Small Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $19,643,245 | $22,776,781 | |
| Net realized gains (losses) | 312,627,403 | (97,028,386) | |
| Net change in unrealized appreciation (depreciation) | + | 540,665,132 | (123,034,280) |
| Increase (decrease) in net assets from operations | $872,935,780 | ($197,285,885) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($24,462,415) | ($70,795,483) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 33,185,229 | $573,288,196 | 37,437,204 | $412,136,335 | |
| Shares reinvested | 1,157,934 | 17,218,482 | 3,614,741 | 50,967,840 | |
| Shares redeemed | + | (50,160,481) | (887,504,519) | (62,280,936) | (708,695,318) |
| Net transactions in fund shares | (15,817,318) | ($296,997,841) | (21,228,991) | ($245,591,143) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 116,504,720 | $1,393,999,379 | 137,733,711 | $1,907,671,890 | |
| Total increase (decrease) | + | (15,817,318) | 551,475,524 | (21,228,991) | (513,672,511) |
| End of period | 100,687,402 | $1,945,474,903 | 116,504,720 | $1,393,999,379 | |
47
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $7.51 | $8.98 | $8.69 | $9.55 | $7.96 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.31 | 0.21 | 0.30 | 0.29 | 0.25 | |
| Net realized and unrealized gains (losses) | 2.96 | (1.35) | 0.27 | (0.89) | 1.59 | |
| Total from investment operations | 3.27 | (1.14) | 0.57 | (0.60) | 1.84 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.22) | (0.33) | (0.28) | (0.26) | (0.25) | |
| Net asset value at end of period | $10.56 | $7.51 | $8.98 | $8.69 | $9.55 | |
| Total return | 44.03% | (13.29%) | 7.04% | (6.53%) | 23.83% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.25% | 0.25% | 0.25% | 0.25% | 0.34% 2 | |
| Net operating expenses | N/A | N/A | N/A | N/A 3 | 0.29% 2 | |
| Net investment income (loss) | 3.10% | 2.60% | 3.51% | 3.10% | 2.92% | |
| Portfolio turnover rate | 21% | 14% | 28% | 13% | 11% | |
| Net assets, end of period (x 1,000,000) | $1,406 | $966 | $1,327 | $1,349 | $1,372 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective May 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 3 | Effective May 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
48
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 98.2% OF NET ASSETS | ||
| Australia 5.2% | ||
| AGL Energy Ltd. | 173,863 | 749,807 |
| Amcor plc | 70,380 | 851,816 |
| AMP Ltd. * | 817,965 | 669,218 |
| Ampol Ltd. | 52,508 | 1,214,576 |
| APA Group | 62,222 | 386,066 |
| Aristocrat Leisure Ltd. | 13,070 | 463,550 |
| Aurizon Holdings Ltd. | 217,512 | 554,538 |
| Australia & New Zealand Banking Group Ltd. | 240,457 | 5,117,038 |
| Bendigo & Adelaide Bank Ltd. | 46,764 | 327,531 |
| BGP Holdings plc (a) | 453,854 | 853 |
| BHP Group Ltd. | 208,044 | 5,714,341 |
| BlueScope Steel Ltd. | 59,124 | 923,878 |
| Boral Ltd. * | 55,547 | 267,994 |
| Brambles Ltd. | 100,553 | 762,865 |
| Coles Group Ltd. | 111,004 | 1,438,498 |
| Commonwealth Bank of Australia | 97,193 | 7,703,731 |
| Computershare Ltd. | 28,377 | 403,787 |
| Crown Resorts Ltd. * | 48,343 | 364,410 |
| CSL Ltd. | 6,870 | 1,563,202 |
| Downer EDI Ltd. | 106,646 | 509,891 |
| Endeavour Group Ltd. | 114,028 | 585,929 |
| Fortescue Metals Group Ltd. | 64,570 | 672,822 |
| Goodman Group | 26,056 | 431,406 |
| Incitec Pivot Ltd. | 210,494 | 476,261 |
| Insurance Australia Group Ltd. | 222,649 | 806,763 |
| James Hardie Industries plc | 8,769 | 344,501 |
| JB Hi-Fi Ltd. | 8,300 | 316,889 |
| Lendlease Corp. Ltd. | 89,243 | 707,002 |
| Macquarie Group Ltd. (a) | 13,985 | 2,054,534 |
| Medibank Pvt Ltd. | 240,605 | 604,671 |
| Metcash Ltd. | 175,501 | 540,888 |
| Mirvac Group | 229,886 | 490,615 |
| National Australia Bank Ltd. | 239,872 | 5,215,291 |
| Newcrest Mining Ltd. | 32,256 | 604,343 |
| Oil Search Ltd. | 127,804 | 414,034 |
| Orica Ltd. | 34,248 | 393,143 |
| Origin Energy Ltd. | 251,594 | 963,600 |
| Qantas Airways Ltd. * | 98,014 | 396,960 |
| QBE Insurance Group Ltd. | 111,056 | 994,332 |
| Ramsay Health Care Ltd. | 8,200 | 438,258 |
| Rio Tinto Ltd. | 30,181 | 2,067,783 |
| Santos Ltd. | 63,578 | 333,852 |
| Scentre Group | 355,768 | 811,466 |
| Sims Ltd. | 36,104 | 393,030 |
| Sonic Healthcare Ltd. | 21,202 | 643,363 |
| South32 Ltd. | 452,264 | 1,220,019 |
| Stockland | 161,347 | 556,153 |
| Suncorp Group Ltd. | 168,192 | 1,488,304 |
| Tabcorp Holdings Ltd. | 102,481 | 385,877 |
| Telstra Corp. Ltd. | 630,806 | 1,823,331 |
| Transurban Group | 64,680 | 659,034 |
| Treasury Wine Estates Ltd. | 35,690 | 311,414 |
| Viva Energy Group Ltd. | 268,075 | 472,303 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Wesfarmers Ltd. | 83,179 | 3,598,799 |
| Westpac Banking Corp. | 322,613 | 6,276,477 |
| Woodside Petroleum Ltd. | 95,640 | 1,671,938 |
| Woolworths Group Ltd. | 113,185 | 3,260,273 |
| 73,413,248 | ||
| Austria 0.3% | ||
| Erste Group Bank AG | 26,107 | 1,119,617 |
| OMV AG | 21,313 | 1,290,360 |
| Raiffeisen Bank International AG | 18,040 | 527,127 |
| Voestalpine AG | 19,980 | 758,862 |
| Wienerberger AG | 9,986 | 353,510 |
| 4,049,476 | ||
| Belgium 0.8% | ||
| Ageas S.A./N.V. | 16,552 | 805,216 |
| Anheuser-Busch InBev S.A./N.V. | 62,678 | 3,833,837 |
| Etablissements Franz Colruyt N.V. | 6,227 | 305,732 |
| Groupe Bruxelles Lambert S.A. | 9,672 | 1,122,254 |
| KBC Group N.V. | 18,743 | 1,745,404 |
| Proximus SADP | 22,992 | 432,975 |
| Solvay S.A. | 7,663 | 910,917 |
| UCB S.A. | 5,349 | 639,343 |
| Umicore S.A. | 13,673 | 783,962 |
| 10,579,640 | ||
| Canada 7.8% | ||
| Agnico-Eagle Mines Ltd. | 6,794 | 360,616 |
| Air Canada * | 21,825 | 391,319 |
| Alimentation Couche-Tard, Inc., Class B | 65,168 | 2,444,327 |
| AltaGas Ltd. | 17,987 | 372,355 |
| ARC Resources Ltd. | 100,493 | 963,843 |
| Atco Ltd., Class I | 11,390 | 386,538 |
| Bank of Montreal (b) | 34,409 | 3,735,890 |
| Barrick Gold Corp. | 68,980 | 1,265,785 |
| Bausch Health Cos., Inc. * | 27,676 | 775,760 |
| BCE, Inc. | 26,615 | 1,370,105 |
| Brookfield Asset Management Reinsurance Partners Ltd. * | 407 | 25,072 |
| Brookfield Asset Management, Inc., Class A | 62,620 | 3,780,677 |
| Canadian Imperial Bank of Commerce | 25,662 | 3,113,819 |
| Canadian National Railway Co. | 30,411 | 4,041,695 |
| Canadian Natural Resources Ltd. | 99,860 | 4,244,211 |
| Canadian Pacific Railway Ltd. | 22,879 | 1,770,830 |
| Canadian Tire Corp., Ltd., Class A (b) | 5,926 | 841,687 |
| CCL Industries, Inc., Class B | 6,281 | 343,334 |
| Cenovus Energy, Inc. | 159,997 | 1,913,345 |
| CGI, Inc. * | 13,828 | 1,235,313 |
| CI Financial Corp. | 30,526 | 696,060 |
| Crescent Point Energy Corp. | 221,311 | 1,112,277 |
| Dollarama, Inc. | 10,295 | 465,338 |
| Emera, Inc. (b) | 14,502 | 674,713 |
| Empire Co., Ltd., Class A | 19,680 | 588,365 |
| Enbridge, Inc. | 113,789 | 4,766,339 |
49
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Fairfax Financial Holdings Ltd. | 2,136 | 865,118 |
| Finning International, Inc. | 16,082 | 476,119 |
| First Quantum Minerals Ltd. | 21,971 | 520,160 |
| Fortis, Inc. | 26,398 | 1,175,069 |
| George Weston Ltd. | 10,993 | 1,187,770 |
| Gildan Activewear, Inc. | 16,413 | 602,889 |
| Great-West Lifeco, Inc. (b) | 18,409 | 541,590 |
| H&R Real Estate Investment Trust | 29,600 | 406,833 |
| Hydro One Ltd. | 20,208 | 482,830 |
| iA Financial Corp., Inc. | 6,100 | 360,844 |
| Imperial Oil Ltd. | 34,497 | 1,167,925 |
| Intact Financial Corp. | 4,593 | 615,728 |
| Inter Pipeline Ltd. | 9,657 | 147,009 |
| Keyera Corp. | 18,172 | 465,753 |
| Kinross Gold Corp. | 66,894 | 402,142 |
| Linamar Corp. | 6,875 | 378,136 |
| Loblaw Cos., Ltd. | 19,781 | 1,487,731 |
| Magna International, Inc. | 43,911 | 3,571,849 |
| Manulife Financial Corp. | 115,481 | 2,249,715 |
| Methanex Corp. | 10,202 | 457,013 |
| Metro, Inc. | 19,182 | 965,145 |
| National Bank of Canada | 15,008 | 1,242,501 |
| Nutrien Ltd. | 48,724 | 3,405,483 |
| Onex Corp. | 10,090 | 751,940 |
| Open Text Corp. | 8,342 | 420,201 |
| Parkland Corp. | 12,988 | 377,907 |
| Pembina Pipeline Corp. | 31,795 | 1,052,554 |
| Power Corp. of Canada | 47,845 | 1,593,545 |
| Quebecor, Inc., Class B | 10,783 | 274,803 |
| Restaurant Brands International, Inc. | 7,390 | 418,404 |
| RioCan Real Estate Investment Trust | 21,900 | 394,434 |
| Rogers Communications, Inc., Class B | 28,987 | 1,348,167 |
| Royal Bank of Canada | 66,922 | 6,965,814 |
| Saputo, Inc. | 18,140 | 433,273 |
| Shaw Communications, Inc., Class B | 36,239 | 1,043,599 |
| SNC-Lavalin Group, Inc. | 19,439 | 522,886 |
| Sun Life Financial, Inc. | 30,045 | 1,712,245 |
| Suncor Energy, Inc. | 248,076 | 6,524,623 |
| TC Energy Corp. | 49,791 | 2,693,526 |
| Teck Resources Ltd., Class B | 58,909 | 1,644,083 |
| TELUS Corp. | 28,002 | 642,354 |
| TFI International, Inc. | 4,392 | 487,002 |
| The Bank of Nova Scotia | 81,532 | 5,345,432 |
| The Toronto-Dominion Bank | 86,842 | 6,304,044 |
| Thomson Reuters Corp. | 9,028 | 1,085,972 |
| Vermilion Energy, Inc. * | 52,327 | 567,411 |
| Waste Connections, Inc. | 5,657 | 769,747 |
| West Fraser Timber Co., Ltd. | 7,021 | 562,145 |
| WSP Global, Inc. | 4,338 | 588,098 |
| 109,379,174 | ||
| Denmark 1.0% | ||
| AP Moller - Maersk A/S, Series A | 333 | 914,304 |
| AP Moller - Maersk A/S, Series B | 509 | 1,475,055 |
| Carlsberg A/S, Class B | 4,407 | 727,665 |
| Coloplast A/S, Class B | 2,328 | 380,204 |
| Danske Bank A/S | 76,415 | 1,293,066 |
| DSV A/S | 3,568 | 829,265 |
| ISS A/S * | 31,852 | 635,596 |
| Novo Nordisk A/S, Class B | 40,646 | 4,457,031 |
| Novozymes A/S, Class B | 6,770 | 497,993 |
| Orsted A/S | 4,235 | 598,162 |
| Pandora A/S | 5,033 | 704,296 |
| Vestas Wind Systems A/S | 28,692 | 1,240,344 |
| 13,752,981 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Finland 1.0% | ||
| Elisa Oyj | 6,497 | 392,096 |
| Fortum Oyj | 24,810 | 737,851 |
| Kesko Oyj, B Shares | 16,215 | 527,709 |
| Kone Oyj, Class B | 12,030 | 820,435 |
| Neste Oyj | 15,487 | 862,189 |
| Nokia Oyj * | 440,084 | 2,525,864 |
| Nokian Renkaat Oyj | 11,439 | 429,559 |
| Nordea Bank Abp | 262,868 | 3,216,205 |
| Outokumpu Oyj * | 84,778 | 528,073 |
| Sampo Oyj, A Shares | 28,174 | 1,497,767 |
| Stora Enso Oyj, R Shares | 52,172 | 868,117 |
| UPM-Kymmene Oyj | 49,059 | 1,731,337 |
| Wartsila Oyj Abp | 43,519 | 603,531 |
| 14,740,733 | ||
| France 8.7% | ||
| Accor S.A. * | 10,973 | 392,684 |
| Air France-KLM *(b) | 115,621 | 544,565 |
| Air Liquide S.A. | 19,405 | 3,239,814 |
| Airbus SE * | 17,693 | 2,269,694 |
| Alstom S.A. | 18,652 | 664,716 |
| APERAM S.A. | 6,807 | 405,858 |
| Arkema S.A. | 7,278 | 995,587 |
| Atos SE | 7,777 | 405,747 |
| AXA S.A. | 168,673 | 4,907,201 |
| BNP Paribas S.A. | 116,686 | 7,810,635 |
| Bollore S.A. | 75,105 | 436,525 |
| Bouygues S.A. | 34,627 | 1,402,923 |
| Bureau Veritas S.A. | 12,236 | 388,922 |
| Capgemini SE | 7,570 | 1,765,043 |
| Carrefour S.A. | 131,279 | 2,376,656 |
| Casino Guichard Perrachon S.A. * | 22,279 | 555,546 |
| Cie de Saint-Gobain | 57,642 | 3,978,020 |
| CNP Assurances | 18,983 | 475,622 |
| Compagnie Generale des Etablissements Michelin S.C.A. | 19,478 | 3,062,281 |
| Credit Agricole S.A. | 100,487 | 1,516,043 |
| Danone S.A. | 39,935 | 2,603,192 |
| Dassault Systemes SE | 7,180 | 419,293 |
| Eiffage S.A. | 9,057 | 932,193 |
| Electricite de France S.A. | 100,321 | 1,478,526 |
| Elis S.A. * | 20,272 | 384,916 |
| Engie S.A. | 231,059 | 3,286,848 |
| EssilorLuxottica S.A. | 7,463 | 1,544,075 |
| Eurazeo SE | 3,773 | 353,658 |
| Eutelsat Communications S.A. | 32,278 | 458,772 |
| Faurecia SE | 17,505 | 914,251 |
| Hermes International | 373 | 592,292 |
| Kering S.A. | 1,744 | 1,308,932 |
| Klepierre S.A. * | 14,316 | 340,810 |
| Lagardere S.C.A. * | 17,284 | 456,939 |
| Legrand S.A. | 9,492 | 1,035,483 |
| L'Oreal S.A. | 5,672 | 2,594,683 |
| LVMH Moet Hennessy Louis Vuitton SE | 5,271 | 4,133,104 |
| Orange S.A. | 377,030 | 4,111,493 |
| Pernod-Ricard S.A. | 6,832 | 1,571,771 |
| Publicis Groupe S.A. | 17,861 | 1,199,070 |
| Renault S.A. * | 73,324 | 2,642,163 |
| Rexel S.A. * | 56,630 | 1,125,589 |
| Rubis S.C.A. | 8,914 | 285,687 |
| Safran S.A. | 12,360 | 1,663,529 |
| Sanofi | 66,169 | 6,646,286 |
| Schneider Electric SE | 23,385 | 4,031,997 |
| SCOR SE | 18,219 | 613,345 |
| SES S.A. | 66,638 | 598,490 |
50
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Societe Generale S.A. | 184,679 | 6,169,003 |
| Sodexo S.A. * | 8,781 | 854,297 |
| STMicroelectronics N.V. | 19,734 | 936,946 |
| Suez S.A. | 34,443 | 783,780 |
| Technip Energies NV * | 15,087 | 232,195 |
| TechnipFMC plc * | 78,279 | 582,483 |
| Teleperformance | 1,237 | 516,709 |
| Thales S.A. | 5,597 | 516,483 |
| TotalEnergies SE | 371,380 | 18,596,835 |
| Valeo S.A. | 43,585 | 1,280,617 |
| Veolia Environnement S.A. | 57,283 | 1,870,804 |
| Vinci S.A. | 33,416 | 3,572,511 |
| Vivendi SE | 38,658 | 498,014 |
| Wendel SE | 3,206 | 427,070 |
| 121,759,216 | ||
| Germany 7.4% | ||
| adidas AG | 6,572 | 2,151,023 |
| Allianz SE | 30,881 | 7,170,888 |
| Aurubis AG | 9,165 | 789,747 |
| BASF SE | 111,093 | 7,995,768 |
| Bayer AG | 103,576 | 5,837,300 |
| Bayerische Motoren Werke AG | 57,219 | 5,781,179 |
| Beiersdorf AG | 3,568 | 379,397 |
| Brenntag SE | 11,524 | 1,096,373 |
| Commerzbank AG * | 176,248 | 1,287,118 |
| Continental AG * | 18,157 | 2,134,744 |
| Covestro AG | 25,688 | 1,645,024 |
| Daimler AG | 114,723 | 11,387,682 |
| Deutsche Bank AG * | 132,688 | 1,704,418 |
| Deutsche Boerse AG | 4,264 | 707,854 |
| Deutsche Lufthansa AG * | 156,594 | 1,035,166 |
| Deutsche Post AG | 68,208 | 4,222,551 |
| Deutsche Telekom AG | 388,788 | 7,230,349 |
| Deutsche Wohnen SE | 1,309 | 67,052 |
| E.ON SE | 182,268 | 2,311,122 |
| Evonik Industries AG | 21,180 | 686,249 |
| Freenet AG | 15,598 | 401,730 |
| Fresenius Medical Care AG & Co. KGaA | 18,573 | 1,233,787 |
| Fresenius SE & Co. KGaA | 48,245 | 2,192,916 |
| GEA Group AG | 12,694 | 625,194 |
| Hannover Rueck SE | 3,563 | 650,546 |
| HeidelbergCement AG | 18,778 | 1,414,076 |
| Henkel AG & Co. KGaA | 6,645 | 554,939 |
| Hugo Boss AG | 9,258 | 579,710 |
| Infineon Technologies AG | 32,960 | 1,543,561 |
| K&S AG * | 45,794 | 789,135 |
| KION Group AG | 4,309 | 470,667 |
| Knorr-Bremse AG | 2,724 | 287,496 |
| LANXESS AG | 8,466 | 570,459 |
| Merck KGaA | 3,962 | 936,319 |
| METRO AG | 45,481 | 574,931 |
| MTU Aero Engines AG | 1,864 | 415,183 |
| Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | 9,296 | 2,752,418 |
| ProSiebenSat.1 Media SE | 22,768 | 381,381 |
| Rheinmetall AG | 4,665 | 452,630 |
| RWE AG | 44,311 | 1,705,604 |
| Salzgitter AG * | 13,341 | 489,481 |
| SAP SE | 32,247 | 4,669,723 |
| Siemens AG | 44,678 | 7,263,833 |
| Siemens Energy AG * | 25,132 | 721,303 |
| Siemens Healthineers AG | 6,752 | 449,048 |
| Symrise AG | 2,983 | 412,615 |
| Telefonica Deutschland Holding AG | 118,650 | 309,133 |
| ThyssenKrupp AG * | 79,682 | 829,464 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Uniper SE | 27,253 | 1,204,763 |
| United Internet AG | 10,210 | 376,753 |
| Vitesco Technologies Group AG * | 3,665 | 210,142 |
| Volkswagen AG | 4,515 | 1,467,817 |
| Vonovia SE | 14,298 | 867,357 |
| 103,425,118 | ||
| Hong Kong 1.6% | ||
| AAC Technologies Holdings, Inc. | 53,500 | 231,239 |
| AIA Group Ltd. | 265,200 | 2,972,099 |
| BOC Hong Kong (Holdings) Ltd. | 262,500 | 831,822 |
| CK Asset Holdings Ltd. | 215,500 | 1,331,155 |
| CK Hutchison Holdings Ltd. | 408,500 | 2,738,755 |
| CLP Holdings Ltd. | 135,000 | 1,321,774 |
| Galaxy Entertainment Group Ltd. * | 80,000 | 430,458 |
| Hang Seng Bank Ltd. | 39,900 | 758,217 |
| Henderson Land Development Co., Ltd. | 73,300 | 306,920 |
| Hong Kong & China Gas Co., Ltd. | 360,676 | 560,321 |
| Hong Kong Exchanges & Clearing Ltd. | 8,321 | 501,271 |
| Hongkong Land Holdings Ltd. | 85,911 | 474,424 |
| Jardine Matheson Holdings Ltd. | 18,746 | 1,088,826 |
| Lenovo Group Ltd. | 754,000 | 818,820 |
| Link REIT | 51,900 | 459,805 |
| MTR Corp., Ltd. | 89,364 | 487,491 |
| New World Development Co., Ltd. | 180,422 | 782,568 |
| Noble Group Ltd. *(a) | 18,617,693 | 207,093 |
| PCCW Ltd. | 635,000 | 326,917 |
| Samsonite International S.A. * | 172,800 | 371,694 |
| Sands China Ltd. * | 156,800 | 357,374 |
| Sino Land Co., Ltd. | 215,350 | 283,053 |
| Sun Hung Kai Properties Ltd. | 108,000 | 1,431,899 |
| Swire Pacific Ltd., A Shares | 129,800 | 815,999 |
| Techtronic Industries Co., Ltd. | 25,500 | 523,904 |
| The Wharf Holdings Ltd. | 200,000 | 695,354 |
| WH Group Ltd. | 1,411,499 | 989,480 |
| Wharf Real Estate Investment Co., Ltd. | 103,000 | 581,770 |
| Yue Yuen Industrial Holdings Ltd. * | 199,500 | 423,481 |
| 23,103,983 | ||
| Ireland 0.1% | ||
| Bank of Ireland Group plc * | 86,875 | 517,531 |
| Kerry Group plc, Class A | 4,719 | 633,344 |
| Kingspan Group plc | 3,636 | 418,594 |
| 1,569,469 | ||
| Israel 0.2% | ||
| Bank Hapoalim B.M. | 60,871 | 599,516 |
| Bank Leumi Le-Israel B.M. | 89,481 | 854,934 |
| ICL Group Ltd. | 66,333 | 568,474 |
| Teva Pharmaceutical Industries Ltd. * | 94,065 | 829,485 |
| 2,852,409 | ||
| Italy 3.1% | ||
| A2A S.p.A. | 168,867 | 355,355 |
| Assicurazioni Generali S.p.A. | 119,291 | 2,597,584 |
| Atlantia S.p.A. * | 49,286 | 952,618 |
| Banco BPM S.p.A. | 166,590 | 518,060 |
| CNH Industrial N.V. | 83,892 | 1,445,087 |
| Enel S.p.A. | 663,176 | 5,551,965 |
| Eni S.p.A. | 597,927 | 8,569,753 |
| EXOR N.V. | 34,981 | 3,299,790 |
| Ferrari N.V. | 1,748 | 414,778 |
| Intesa Sanpaolo S.p.A. | 1,559,704 | 4,432,953 |
| Leonardo S.p.A. * | 68,237 | 500,694 |
51
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Mediobanca Banca di Credito Finanziario S.p.A. * | 44,067 | 525,839 |
| Pirelli & C S.p.A. | 56,700 | 348,724 |
| Poste Italiane S.p.A | 28,763 | 410,788 |
| Prysmian S.p.A. | 13,562 | 512,767 |
| Saras S.p.A. * | 437,130 | 324,525 |
| Snam S.p.A. | 111,056 | 628,998 |
| Stellantis N.V. | 310,503 | 6,199,021 |
| Telecom Italia S.p.A. | 3,578,096 | 1,276,485 |
| Tenaris S.A. | 53,117 | 591,526 |
| Terna - Rete Elettrica Nazionale | 61,386 | 457,374 |
| UniCredit S.p.A. | 274,322 | 3,626,383 |
| Unipol Gruppo S.p.A. | 70,792 | 406,586 |
| 43,947,653 | ||
| Japan 24.2% | ||
| Advantest Corp. | 3,400 | 278,759 |
| Aeon Co., Ltd. | 62,100 | 1,428,588 |
| AGC, Inc. | 30,200 | 1,503,826 |
| Air Water, Inc. | 21,900 | 335,072 |
| Aisin Corp. | 43,200 | 1,580,807 |
| Ajinomoto Co., Inc. | 33,400 | 1,000,019 |
| Alfresa Holdings Corp. | 45,000 | 634,364 |
| Alps Alpine Co., Ltd. | 53,700 | 524,706 |
| Amada Co., Ltd. | 37,900 | 374,432 |
| ANA Holdings, Inc. * | 22,900 | 533,594 |
| Asahi Group Holdings Ltd. | 29,600 | 1,343,255 |
| Asahi Kasei Corp. | 171,200 | 1,798,516 |
| Astellas Pharma, Inc. | 124,800 | 2,103,974 |
| Bandai Namco Holdings, Inc. | 9,800 | 748,902 |
| Bic Camera, Inc. | 28,600 | 246,662 |
| Bridgestone Corp. | 89,900 | 3,977,112 |
| Brother Industries Ltd. | 31,800 | 614,819 |
| Canon, Inc. | 155,800 | 3,542,794 |
| Casio Computer Co., Ltd. | 17,200 | 243,399 |
| Central Japan Railway Co. | 18,900 | 2,803,636 |
| Chubu Electric Power Co., Inc. | 157,800 | 1,633,408 |
| Chugai Pharmaceutical Co., Ltd. | 9,100 | 340,243 |
| Coca-Cola Bottlers Japan Holdings, Inc. | 27,300 | 375,691 |
| COMSYS Holdings Corp. | 11,100 | 274,847 |
| Concordia Financial Group Ltd. | 92,300 | 366,862 |
| Cosmo Energy Holdings Co., Ltd. | 25,600 | 523,331 |
| Dai Nippon Printing Co., Ltd. | 50,600 | 1,253,618 |
| Daicel Corp. | 59,400 | 444,744 |
| Daido Steel Co., Ltd. | 6,900 | 264,358 |
| Dai-ichi Life Holdings, Inc. | 93,400 | 1,965,001 |
| Daiichi Sankyo Co., Ltd. | 44,400 | 1,120,317 |
| Daikin Industries Ltd. | 9,600 | 2,102,542 |
| Daito Trust Construction Co., Ltd. | 8,900 | 1,103,458 |
| Daiwa House Industry Co., Ltd. | 87,300 | 2,880,042 |
| Daiwa Securities Group, Inc. | 124,000 | 696,651 |
| Denka Co., Ltd. | 11,000 | 360,131 |
| Denso Corp. | 48,700 | 3,530,514 |
| Dentsu Group, Inc. | 19,101 | 698,021 |
| DIC Corp. | 18,200 | 481,877 |
| East Japan Railway Co. | 50,018 | 3,115,444 |
| Ebara Corp. | 9,600 | 523,842 |
| EDION Corp. | 33,000 | 313,192 |
| Eisai Co., Ltd. | 10,600 | 751,075 |
| Electric Power Development Co., Ltd. | 44,300 | 585,628 |
| ENEOS Holdings, Inc. | 964,150 | 3,887,693 |
| FANUC Corp. | 6,600 | 1,304,299 |
| Fast Retailing Co., Ltd. | 1,100 | 730,199 |
| Fuji Electric Co., Ltd. | 12,300 | 601,441 |
| FUJIFILM Holdings Corp. | 29,100 | 2,248,772 |
| Fujikura Ltd. * | 76,900 | 414,787 |
| Fujitsu Ltd. | 16,100 | 2,782,557 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Furukawa Electric Co., Ltd. | 16,500 | 361,038 |
| H2O Retailing Corp. | 46,400 | 370,559 |
| Hakuhodo DY Holdings, Inc. | 25,900 | 422,263 |
| Hankyu Hanshin Holdings, Inc. | 21,200 | 657,318 |
| Hanwa Co., Ltd. | 16,000 | 480,617 |
| Haseko Corp. | 50,000 | 651,052 |
| Hino Motors Ltd. | 63,800 | 603,528 |
| Hitachi Construction Machinery Co., Ltd. | 12,050 | 384,467 |
| Hitachi Ltd. | 119,400 | 6,880,370 |
| Hitachi Metals Ltd. * | 22,800 | 431,619 |
| Hokkaido Electric Power Co., Inc. | 74,800 | 310,858 |
| Honda Motor Co., Ltd. | 362,200 | 10,713,102 |
| Hoya Corp. | 7,450 | 1,096,703 |
| Idemitsu Kosan Co., Ltd. | 59,169 | 1,616,041 |
| IHI Corp. | 29,600 | 691,391 |
| Iida Group Holdings Co., Ltd. | 21,500 | 530,072 |
| Inpex Corp. | 200,200 | 1,669,532 |
| Isetan Mitsukoshi Holdings Ltd. | 106,000 | 774,960 |
| Isuzu Motors Ltd. | 94,900 | 1,276,671 |
| ITOCHU Corp. | 111,500 | 3,180,077 |
| J. Front Retailing Co., Ltd. | 48,400 | 448,615 |
| Japan Airlines Co., Ltd. * | 27,500 | 591,839 |
| Japan Exchange Group, Inc. | 12,500 | 295,976 |
| Japan Post Holdings Co., Ltd. | 182,800 | 1,404,617 |
| Japan Post Insurance Co., Ltd. | 17,300 | 280,687 |
| Japan Tobacco, Inc. | 125,100 | 2,455,860 |
| JFE Holdings, Inc. | 172,300 | 2,632,820 |
| JGC Holdings Corp. | 44,300 | 416,301 |
| JSR Corp. | 12,400 | 449,742 |
| JTEKT Corp. | 69,800 | 617,843 |
| Kajima Corp. | 79,300 | 976,401 |
| Kaneka Corp. | 11,300 | 433,343 |
| Kao Corp. | 25,300 | 1,431,171 |
| Kawasaki Heavy Industries Ltd. | 33,600 | 681,826 |
| KDDI Corp. | 177,400 | 5,424,889 |
| Keio Corp. | 5,400 | 272,580 |
| Kewpie Corp. | 15,100 | 331,209 |
| Keyence Corp. | 1,692 | 1,021,316 |
| Kikkoman Corp. | 6,800 | 556,172 |
| Kinden Corp. | 17,200 | 282,263 |
| Kintetsu Group Holdings Co., Ltd. * | 14,300 | 450,135 |
| Kirin Holdings Co., Ltd. | 74,000 | 1,288,032 |
| Kobe Steel Ltd. | 138,800 | 815,504 |
| Koito Manufacturing Co., Ltd. | 9,900 | 561,708 |
| Komatsu Ltd. | 89,400 | 2,341,502 |
| Konica Minolta, Inc. | 166,800 | 825,608 |
| K's Holdings Corp. | 33,300 | 343,746 |
| Kubota Corp. | 68,600 | 1,461,385 |
| Kuraray Co., Ltd. | 64,100 | 580,044 |
| Kyocera Corp. | 26,100 | 1,528,075 |
| Kyushu Electric Power Co., Inc. | 125,000 | 880,548 |
| Kyushu Railway Co. | 19,500 | 436,499 |
| Lixil Corp. | 26,300 | 675,644 |
| Makita Corp. | 12,200 | 566,225 |
| Marubeni Corp. | 293,100 | 2,487,047 |
| MatsukiyoCocokara & Co., Ltd. | 13,100 | 580,848 |
| Mazda Motor Corp. * | 254,100 | 2,285,445 |
| Medipal Holdings Corp. | 34,900 | 631,419 |
| MEIJI Holdings Co., Ltd. | 15,300 | 965,564 |
| Minebea Mitsumi, Inc. | 29,500 | 746,852 |
| MISUMI Group, Inc. | 10,500 | 439,149 |
| Mitsubishi Chemical Holdings Corp. | 270,600 | 2,239,871 |
| Mitsubishi Corp. | 168,500 | 5,357,956 |
| Mitsubishi Electric Corp. | 254,700 | 3,420,477 |
| Mitsubishi Estate Co., Ltd. | 68,200 | 1,036,434 |
| Mitsubishi Gas Chemical Co., Inc. | 23,900 | 481,017 |
| Mitsubishi Heavy Industries Ltd. | 69,200 | 1,769,642 |
| Mitsubishi Materials Corp. | 37,500 | 727,979 |
52
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Mitsubishi Motors Corp. * | 250,800 | 802,691 |
| Mitsubishi UFJ Financial Group, Inc. | 1,159,734 | 6,359,395 |
| Mitsui & Co., Ltd. | 169,500 | 3,878,925 |
| Mitsui Chemicals, Inc. | 27,300 | 811,734 |
| Mitsui Fudosan Co., Ltd. | 69,400 | 1,586,750 |
| Mitsui Mining & Smelting Co., Ltd. | 10,100 | 289,821 |
| Mitsui O.S.K. Lines Ltd. | 17,000 | 1,071,875 |
| Mizuho Financial Group, Inc. | 236,421 | 3,120,277 |
| MS&AD Insurance Group Holdings, Inc. | 51,690 | 1,669,966 |
| Murata Manufacturing Co., Ltd. | 22,900 | 1,698,689 |
| Nagase & Co., Ltd. | 30,600 | 517,929 |
| Nagoya Railroad Co., Ltd. * | 21,100 | 348,629 |
| NEC Corp. | 25,500 | 1,305,651 |
| NGK Insulators Ltd. | 29,100 | 484,548 |
| NGK Spark Plug Co., Ltd. | 29,700 | 474,457 |
| NH Foods Ltd. | 20,800 | 731,488 |
| NHK Spring Co., Ltd. | 48,800 | 368,136 |
| Nichirei Corp. | 11,800 | 287,394 |
| Nidec Corp. | 9,200 | 1,018,972 |
| Nikon Corp. | 66,600 | 734,315 |
| Nintendo Co., Ltd. | 2,180 | 962,812 |
| Nippon Electric Glass Co., Ltd. | 14,400 | 367,674 |
| Nippon Express Co., Ltd. | 11,200 | 701,058 |
| Nippon Light Metal Holdings Co., Ltd. | 17,020 | 282,485 |
| Nippon Paper Industries Co., Ltd. | 35,300 | 361,835 |
| Nippon Shokubai Co., Ltd. | 5,500 | 287,346 |
| Nippon Steel Corp. | 206,100 | 3,613,502 |
| Nippon Steel Trading Corp. | 7,900 | 357,236 |
| Nippon Telegraph & Telephone Corp. | 179,916 | 5,041,054 |
| Nippon Yusen K.K. | 24,500 | 1,765,403 |
| Nissan Motor Co., Ltd. * | 690,900 | 3,516,583 |
| Nisshin Seifun Group, Inc. | 28,730 | 453,664 |
| Nissin Foods Holdings Co., Ltd. | 3,700 | 282,827 |
| Nitori Holdings Co., Ltd. | 2,600 | 477,647 |
| Nitto Denko Corp. | 13,000 | 1,015,821 |
| NOK Corp. | 34,000 | 394,664 |
| Nomura Holdings, Inc. | 208,400 | 992,508 |
| Nomura Real Estate Holdings, Inc. | 12,900 | 314,494 |
| NSK Ltd. | 83,800 | 563,090 |
| NTN Corp. * | 122,800 | 266,295 |
| NTT Data Corp. | 45,700 | 916,779 |
| Obayashi Corp. | 126,700 | 1,069,631 |
| Odakyu Electric Railway Co., Ltd. | 13,600 | 294,840 |
| Oji Holdings Corp. | 153,800 | 762,346 |
| Olympus Corp. | 29,000 | 628,228 |
| Omron Corp. | 9,900 | 946,783 |
| Ono Pharmaceutical Co., Ltd. | 14,900 | 312,628 |
| Oriental Land Co., Ltd. | 2,900 | 458,025 |
| ORIX Corp. | 105,200 | 2,090,986 |
| Osaka Gas Co., Ltd. | 60,300 | 971,914 |
| Otsuka Corp. | 6,300 | 310,316 |
| Otsuka Holdings Co., Ltd. | 30,200 | 1,194,387 |
| PALTAC Corp. | 5,400 | 239,111 |
| Pan Pacific International Holdings Corp. | 16,800 | 352,748 |
| Panasonic Corp. | 329,650 | 4,076,459 |
| Persol Holdings Co., Ltd. | 16,200 | 435,434 |
| Rakuten Group, Inc. | 29,900 | 327,346 |
| Recruit Holdings Co., Ltd. | 32,300 | 2,148,564 |
| Renesas Electronics Corp. * | 32,100 | 394,876 |
| Resona Holdings, Inc. | 201,858 | 758,300 |
| Ricoh Co., Ltd. | 125,700 | 1,224,046 |
| Rohm Co., Ltd. | 5,900 | 539,481 |
| Ryohin Keikaku Co., Ltd. | 16,500 | 325,153 |
| Sankyu, Inc. | 7,100 | 320,542 |
| Santen Pharmaceutical Co., Ltd. | 21,600 | 304,451 |
| SBI Holdings, Inc. | 12,700 | 329,177 |
| Secom Co., Ltd. | 12,000 | 818,069 |
| Seibu Holdings, Inc. * | 26,100 | 285,104 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Seiko Epson Corp. | 39,200 | 697,998 |
| Seino Holdings Co., Ltd. | 25,700 | 311,379 |
| Sekisui Chemical Co., Ltd. | 44,600 | 732,721 |
| Sekisui House Ltd. | 77,600 | 1,613,364 |
| Seven & i Holdings Co., Ltd. | 92,400 | 3,879,392 |
| SG Holdings Co., Ltd. | 19,700 | 494,688 |
| Shikoku Electric Power Co., Inc. | 42,700 | 278,096 |
| Shimadzu Corp. | 9,900 | 402,210 |
| Shimamura Co., Ltd. | 3,900 | 330,222 |
| Shimano, Inc. | 2,100 | 585,928 |
| Shimizu Corp. | 99,000 | 725,357 |
| Shin-Etsu Chemical Co., Ltd. | 15,200 | 2,710,662 |
| Shionogi & Co., Ltd. | 12,800 | 834,563 |
| Shiseido Co., Ltd. | 10,800 | 720,651 |
| Showa Denko K.K. | 28,900 | 724,813 |
| SMC Corp. | 1,500 | 895,148 |
| Softbank Corp. | 227,900 | 3,110,761 |
| SoftBank Group Corp. | 85,700 | 4,639,572 |
| Sojitz Corp. | 54,460 | 898,538 |
| Sompo Holdings, Inc. | 31,600 | 1,370,392 |
| Sony Group Corp. | 41,300 | 4,782,387 |
| Stanley Electric Co., Ltd. | 15,400 | 388,160 |
| Subaru Corp. | 142,300 | 2,791,184 |
| Sumco Corp. | 14,700 | 280,897 |
| Sumitomo Chemical Co., Ltd. | 289,500 | 1,426,168 |
| Sumitomo Corp. | 173,300 | 2,469,466 |
| Sumitomo Electric Industries Ltd. | 175,800 | 2,333,369 |
| Sumitomo Forestry Co., Ltd. | 22,200 | 424,041 |
| Sumitomo Heavy Industries Ltd. | 22,100 | 568,975 |
| Sumitomo Metal Mining Co., Ltd. | 18,500 | 717,657 |
| Sumitomo Mitsui Financial Group, Inc. | 132,110 | 4,286,921 |
| Sumitomo Mitsui Trust Holdings, Inc. | 31,200 | 1,026,288 |
| Sumitomo Realty & Development Co., Ltd. | 23,100 | 834,832 |
| Sumitomo Rubber Industries Ltd. | 45,100 | 555,815 |
| Suntory Beverage & Food Ltd. | 12,900 | 500,551 |
| Suzuken Co., Ltd. | 19,330 | 538,107 |
| Suzuki Motor Corp. | 56,200 | 2,506,344 |
| Sysmex Corp. | 4,100 | 508,362 |
| T&D Holdings, Inc. | 43,750 | 561,122 |
| Taiheiyo Cement Corp. | 25,800 | 548,153 |
| Taisei Corp. | 31,200 | 979,029 |
| Taiyo Yuden Co., Ltd. | 6,100 | 309,187 |
| Takashimaya Co., Ltd. | 41,700 | 386,113 |
| Takeda Pharmaceutical Co., Ltd. | 79,221 | 2,223,402 |
| TDK Corp. | 26,700 | 970,625 |
| Teijin Ltd. | 38,300 | 514,091 |
| Terumo Corp. | 17,400 | 767,615 |
| The Chugoku Electric Power Co., Inc. | 49,900 | 413,913 |
| The Kansai Electric Power Co., Inc. | 177,800 | 1,637,024 |
| The Yokohama Rubber Co., Ltd. | 19,500 | 329,963 |
| TIS, Inc. | 16,200 | 441,334 |
| Tobu Railway Co., Ltd. | 17,600 | 438,198 |
| Toho Gas Co., Ltd. | 6,700 | 198,470 |
| Toho Holdings Co., Ltd. | 18,600 | 301,133 |
| Tohoku Electric Power Co., Inc. | 152,400 | 988,791 |
| Tokio Marine Holdings, Inc. | 50,300 | 2,649,301 |
| Tokyo Electric Power Co. Holdings, Inc. * | 1,018,500 | 2,821,247 |
| Tokyo Electron Ltd. | 4,100 | 1,910,735 |
| Tokyo Gas Co., Ltd. | 76,700 | 1,330,970 |
| Tokyu Corp. | 50,200 | 707,730 |
| Tokyu Fudosan Holdings Corp. | 79,000 | 457,759 |
| Toppan, Inc. | 58,100 | 937,857 |
| Toray Industries, Inc. | 255,300 | 1,590,906 |
| Toshiba Corp. | 43,900 | 1,893,501 |
| Tosoh Corp. | 45,100 | 759,530 |
| TOTO Ltd. | 8,600 | 415,503 |
| Toyo Seikan Group Holdings Ltd. | 42,100 | 499,897 |
53
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Toyo Suisan Kaisha Ltd. | 8,000 | 344,713 |
| Toyoda Gosei Co., Ltd. | 14,500 | 296,704 |
| Toyota Industries Corp. | 12,200 | 1,037,153 |
| Toyota Motor Corp. | 1,271,490 | 22,434,366 |
| Toyota Tsusho Corp. | 40,100 | 1,739,384 |
| TS Tech Co., Ltd. | 24,000 | 321,121 |
| Tsuruha Holdings, Inc. | 3,000 | 370,035 |
| Ube Industries Ltd. | 26,500 | 493,731 |
| Unicharm Corp. | 10,600 | 428,694 |
| West Japan Railway Co. | 27,263 | 1,286,968 |
| Yakult Honsha Co., Ltd. | 6,300 | 318,327 |
| Yamada Holdings Co., Ltd. | 166,900 | 637,775 |
| Yamaha Corp. | 8,300 | 524,378 |
| Yamaha Motor Co., Ltd. | 45,600 | 1,271,045 |
| Yamato Holdings Co., Ltd. | 37,800 | 929,245 |
| Yamazaki Baking Co., Ltd. | 22,600 | 343,312 |
| Yaskawa Electric Corp. | 8,600 | 372,484 |
| Yokogawa Electric Corp. | 21,700 | 433,615 |
| Z Holdings Corp. | 105,200 | 653,083 |
| 340,854,459 | ||
| Netherlands 2.6% | ||
| Aalberts N.V. | 6,033 | 333,918 |
| ABN AMRO Bank N.V. CVA | 76,741 | 1,128,684 |
| Aegon N.V. | 264,953 | 1,343,918 |
| Akzo Nobel N.V. | 15,748 | 1,809,713 |
| ArcelorMittal S.A. | 131,123 | 4,434,597 |
| ASML Holding N.V. | 3,327 | 2,704,517 |
| ASR Nederland N.V. | 14,709 | 687,560 |
| Heineken Holding N.V. | 8,990 | 833,149 |
| Heineken N.V. | 11,671 | 1,291,852 |
| ING Groep N.V. | 383,152 | 5,811,995 |
| Koninklijke Ahold Delhaize N.V. | 164,409 | 5,348,628 |
| Koninklijke DSM N.V. | 6,925 | 1,512,961 |
| Koninklijke KPN N.V. | 299,841 | 895,905 |
| Koninklijke Philips N.V. | 45,195 | 2,132,082 |
| NN Group N.V. | 31,526 | 1,685,278 |
| Randstad N.V. | 15,682 | 1,126,711 |
| Signify N.V. | 15,596 | 755,726 |
| SNS Reaal N.V. *(a) | 124,822 | 0 |
| Unibail-Rodamco-Westfield * | 15,060 | 1,075,355 |
| Universal Music Group NV | 38,658 | 1,122,355 |
| Wolters Kluwer N.V. | 8,136 | 851,989 |
| 36,886,893 | ||
| New Zealand 0.1% | ||
| Contact Energy Ltd. | 59,636 | 349,934 |
| Fletcher Building Ltd. | 117,740 | 605,573 |
| Spark New Zealand Ltd. | 142,524 | 466,577 |
| 1,422,084 | ||
| Norway 0.8% | ||
| Dnb Bank Asa | 63,995 | 1,522,868 |
| Equinor A.S.A. | 156,289 | 3,960,102 |
| Mowi A.S.A. | 28,504 | 826,535 |
| Norsk Hydro A.S.A. | 179,149 | 1,315,933 |
| Orkla A.S.A. | 54,786 | 532,871 |
| Subsea 7 S.A. | 52,118 | 467,837 |
| Telenor A.S.A. | 71,682 | 1,132,612 |
| Yara International A.S.A. | 20,780 | 1,086,023 |
| 10,844,781 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Poland 0.4% | ||
| Bank Polska Kasa Opieki S.A. | 17,330 | 572,584 |
| Grupa Lotos S.A. * | 30,373 | 472,149 |
| KGHM Polska Miedz S.A. | 9,404 | 361,614 |
| PGE Polska Grupa Energetyczna S.A. * | 163,047 | 401,222 |
| Polski Koncern Naftowy ORLEN S.A. | 102,830 | 2,217,721 |
| Polskie Gornictwo Naftowe i Gazownictwo S.A. | 270,116 | 407,287 |
| Powszechna Kasa Oszczednosci Bank Polski S.A. * | 48,926 | 599,044 |
| Powszechny Zaklad Ubezpieczen S.A. | 62,262 | 622,932 |
| 5,654,553 | ||
| Portugal 0.2% | ||
| EDP - Energias de Portugal S.A. | 259,657 | 1,465,151 |
| Galp Energia, SGPS, S.A. | 85,247 | 885,541 |
| Jeronimo Martins, SGPS, S.A. | 20,509 | 464,685 |
| 2,815,377 | ||
| Republic of Korea 5.3% | ||
| Amorepacific Corp. | 1,606 | 249,912 |
| BNK Financial Group, Inc. | 55,062 | 415,114 |
| CJ CheilJedang Corp. | 1,080 | 351,004 |
| CJ Corp. | 5,201 | 427,602 |
| Coway Co., Ltd. | 4,730 | 320,717 |
| DB Insurance Co., Ltd. | 10,402 | 528,627 |
| E-MART, Inc. | 4,926 | 709,108 |
| GS Engineering & Construction Corp. | 10,204 | 362,078 |
| GS Holdings Corp. | 18,176 | 658,235 |
| Hana Financial Group, Inc. | 34,006 | 1,311,265 |
| Hankook Tire & Technology Co., Ltd. | 12,494 | 442,679 |
| Hanwha Corp. | 18,227 | 524,698 |
| Hanwha Solutions Corp. * | 7,533 | 264,279 |
| Hyundai Engineering & Construction Co., Ltd. | 16,550 | 715,459 |
| Hyundai Glovis Co., Ltd. | 3,043 | 438,223 |
| Hyundai Heavy Industries Holdings Co. Ltd | 16,417 | 890,042 |
| Hyundai Marine & Fire Insurance Co., Ltd. | 18,048 | 405,894 |
| Hyundai Mobis Co., Ltd. | 10,053 | 2,173,147 |
| Hyundai Motor Co. | 19,514 | 3,490,185 |
| Hyundai Steel Co. | 25,040 | 957,097 |
| Industrial Bank of Korea | 45,798 | 433,461 |
| KB Financial Group, Inc. | 36,347 | 1,759,336 |
| Kia Motors Corp. | 37,735 | 2,753,611 |
| Korea Electric Power Corp. | 122,759 | 2,378,465 |
| Korea Gas Corp. * | 12,386 | 470,538 |
| Korea Shipbuilding & Offshore Engineering Co., Ltd. * | 5,766 | 509,799 |
| Korea Zinc Co., Ltd. | 1,134 | 522,116 |
| Korean Air Lines Co., Ltd. * | 17,168 | 447,612 |
| KT&G Corp. | 11,082 | 769,742 |
| LG Chem Ltd. | 2,005 | 1,438,698 |
| LG Corp. | 5,827 | 455,540 |
| LG Display Co., Ltd. * | 77,329 | 1,306,889 |
| LG Electronics, Inc. | 16,472 | 1,704,092 |
| LG Household & Health Care Ltd. | 306 | 306,271 |
| LG Uplus Corp. | 49,941 | 614,632 |
| Lotte Chemical Corp. | 3,016 | 580,102 |
| Lotte Shopping Co., Ltd. | 4,982 | 448,398 |
| LX Holdings Corp. * | 2,658 | 20,150 |
| NAVER Corp. | 1,433 | 498,229 |
| POSCO | 16,962 | 4,302,100 |
| Posco International Corp. | 20,054 | 373,651 |
54
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Samsung C&T Corp. | 6,361 | 622,827 |
| Samsung Electro-Mechanics Co., Ltd. | 3,623 | 493,405 |
| Samsung Electronics Co., Ltd. | 363,204 | 21,746,155 |
| Samsung Fire & Marine Insurance Co., Ltd. | 4,957 | 982,589 |
| Samsung Life Insurance Co., Ltd. | 7,987 | 462,018 |
| Samsung SDI Co., Ltd. | 897 | 565,942 |
| Samsung SDS Co., Ltd. | 2,524 | 331,763 |
| Shinhan Financial Group Co., Ltd. | 56,978 | 1,860,156 |
| SK Holdings Co., Ltd. | 6,841 | 1,427,629 |
| SK Hynix, Inc. | 41,644 | 3,670,942 |
| SK Innovation Co., Ltd. * | 10,704 | 2,232,319 |
| SK Telecom Co., Ltd. (a) | 3,193 | 845,464 |
| S-Oil Corp. | 6,469 | 566,022 |
| Woori Financial Group, Inc. | 81,720 | 929,005 |
| 74,465,033 | ||
| Singapore 0.8% | ||
| CapitaLand Integrated Commercial Trust | 1 | 2 |
| Capitaland Investment Ltd. * | 280,486 | 715,515 |
| ComfortDelGro Corp., Ltd. | 330,300 | 382,814 |
| DBS Group Holdings Ltd. | 89,544 | 2,092,451 |
| Jardine Cycle & Carriage Ltd. | 21,100 | 352,733 |
| Keppel Corp., Ltd. | 153,800 | 613,752 |
| Oversea-Chinese Banking Corp., Ltd. | 194,944 | 1,704,167 |
| Singapore Airlines Ltd. * | 149,170 | 574,610 |
| Singapore Telecommunications Ltd. | 789,586 | 1,464,868 |
| United Overseas Bank Ltd. | 76,552 | 1,521,726 |
| Venture Corp., Ltd. | 21,900 | 305,906 |
| Wilmar International Ltd. | 249,566 | 797,898 |
| 10,526,442 | ||
| Spain 3.2% | ||
| Acciona S.A. | 2,070 | 397,529 |
| ACS Actividades de Construccion y Servicios S.A. | 36,162 | 947,792 |
| Aena SME S.A. * | 3,552 | 583,368 |
| Amadeus IT Group S.A. * | 14,361 | 960,720 |
| Banco Bilbao Vizcaya Argentaria S.A. | 906,801 | 6,345,908 |
| Banco De Sabadell S.A. * | 1,806,929 | 1,454,211 |
| Banco Santander S.A. | 3,064,869 | 11,625,303 |
| Bankinter S.A. | 47,014 | 258,860 |
| CaixaBank S.A. | 370,029 | 1,063,709 |
| Enagas S.A. | 17,895 | 401,554 |
| Endesa S.A. | 31,233 | 720,318 |
| Ferrovial S.A. | 19,439 | 613,651 |
| Grifols S.A. | 14,316 | 327,593 |
| Iberdrola S.A. | 385,268 | 4,549,452 |
| Industria de Diseno Textil S.A. | 48,312 | 1,750,065 |
| Linea Directa Aseguradora SA Cia de Seguros y Reaseguros | 52,055 | 104,507 |
| Mapfre S.A. | 173,473 | 367,293 |
| Naturgy Energy Group S.A. (b) | 35,867 | 942,437 |
| Red Electrica Corp. S.A. | 26,933 | 560,792 |
| Repsol S.A. | 351,855 | 4,506,746 |
| Telefonica S.A. | 1,448,042 | 6,289,799 |
| 44,771,607 | ||
| Sweden 1.9% | ||
| Alfa Laval AB | 12,402 | 531,981 |
| Assa Abloy AB, B Shares | 32,829 | 963,290 |
| Atlas Copco AB, A Shares | 17,742 | 1,142,561 |
| Atlas Copco AB, B Shares | 10,183 | 551,856 |
| Boliden AB | 23,346 | 823,045 |
| Electrolux AB, B Shares | 19,578 | 444,312 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Epiroc AB, A Shares | 13,966 | 347,495 |
| Epiroc AB, B Shares | 8,801 | 186,967 |
| Essity AB, B Shares | 34,377 | 1,113,529 |
| H & M Hennes & Mauritz AB, B Shares (b) | 80,066 | 1,506,268 |
| Hexagon AB, B Shares | 37,744 | 607,440 |
| Husqvarna AB, B Shares | 26,431 | 376,666 |
| ICA Gruppen AB | 7,152 | 369,759 |
| Industrivarden AB, A Shares | 6,923 | 228,377 |
| Industrivarden AB, C Shares | 5,103 | 165,993 |
| Investor AB, A Shares | 20,350 | 470,809 |
| Investor AB, B Shares | 69,884 | 1,612,498 |
| Lundin Energy AB | 9,503 | 375,306 |
| Sandvik AB | 49,883 | 1,264,968 |
| Securitas AB, B Shares | 36,541 | 605,363 |
| Skandinaviska Enskilda Banken AB, A Shares | 81,554 | 1,275,327 |
| Skanska AB, B Shares | 30,905 | 785,787 |
| SKF AB, B Shares | 30,876 | 717,101 |
| SSAB AB, A Shares * | 47,816 | 272,472 |
| SSAB AB, B Shares * | 105,023 | 524,922 |
| Svenska Cellulosa AB, S.C.A., B Shares | 20,100 | 314,064 |
| Svenska Handelsbanken AB, A Shares | 100,510 | 1,152,079 |
| Swedbank AB, A Shares (b) | 83,508 | 1,811,180 |
| Swedish Match Ab | 51,219 | 451,608 |
| Tele2 AB, B Shares | 32,029 | 452,677 |
| Telefonaktiebolaget LM Ericsson, B Shares | 123,556 | 1,348,664 |
| Telia Co. AB (b) | 308,737 | 1,216,067 |
| Trelleborg AB, B Shares | 16,342 | 374,030 |
| Volvo AB, A Shares | 16,556 | 391,402 |
| Volvo AB, B Shares | 98,643 | 2,300,271 |
| 27,076,134 | ||
| Switzerland 4.8% | ||
| ABB Ltd. | 81,697 | 2,702,800 |
| Adecco Group AG | 25,608 | 1,290,132 |
| Alcon, Inc. | 13,654 | 1,132,169 |
| Baloise Holding AG | 2,571 | 409,715 |
| Barry Callebaut AG | 132 | 305,693 |
| Chocoladefabriken Lindt & Spruengli AG | 3 | 360,092 |
| Chocoladefabriken Lindt & Spruengli AG - Participation Certificates | 27 | 318,185 |
| Cie Financiere Richemont S.A. | 20,784 | 2,572,028 |
| Clariant AG * | 16,118 | 339,325 |
| Credit Suisse Group AG | 115,585 | 1,202,281 |
| DKSH Holding AG | 4,476 | 358,772 |
| Dufry AG * | 6,303 | 333,720 |
| Geberit AG | 944 | 737,219 |
| Georg Fischer AG | 272 | 411,550 |
| Givaudan S.A. | 196 | 923,539 |
| Holcim Ltd. * | 48,441 | 2,416,361 |
| Julius Baer Group Ltd. | 7,016 | 507,482 |
| Kuehne + Nagel International AG | 1,994 | 628,011 |
| Lonza Group AG | 973 | 799,612 |
| Nestle S.A. | 117,683 | 15,523,232 |
| Novartis AG | 82,608 | 6,832,731 |
| Partners Group Holding AG | 274 | 478,665 |
| Roche Holding AG | 27,349 | 10,594,837 |
| Roche Holding AG - Bearer Shares | 1,096 | 471,415 |
| Schindler Holding AG | 644 | 165,332 |
| Schindler Holding AG - Participation Certificates | 1,359 | 353,867 |
| SGS S.A. | 217 | 642,433 |
| Sika AG | 2,284 | 773,773 |
| Sonova Holding AG | 1,146 | 474,870 |
55
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Swiss Life Holding AG | 2,087 | 1,144,858 |
| Swiss Prime Site AG | 3,655 | 371,590 |
| Swiss Re AG | 24,326 | 2,356,593 |
| Swisscom AG | 2,143 | 1,166,916 |
| The Swatch Group AG | 4,209 | 223,915 |
| The Swatch Group AG - Bearer Shares | 2,907 | 800,136 |
| UBS Group AG | 204,944 | 3,730,530 |
| Zurich Insurance Group AG | 9,069 | 4,019,567 |
| 67,873,946 | ||
| United Kingdom 16.7% | ||
| 3i Group plc | 37,039 | 691,704 |
| abrdn plc | 277,745 | 965,469 |
| Admiral Group plc | 7,248 | 284,717 |
| Anglo American plc | 75,902 | 2,887,542 |
| Antofagasta plc | 15,737 | 306,954 |
| Ashtead Group plc | 16,441 | 1,377,922 |
| Associated British Foods plc | 36,424 | 890,780 |
| AstraZeneca plc | 46,188 | 5,778,179 |
| Aviva plc | 363,013 | 1,958,788 |
| BAE Systems plc | 262,001 | 1,975,530 |
| Balfour Beatty plc | 85,665 | 297,824 |
| Barclays plc | 1,526,469 | 4,212,250 |
| Barratt Developments plc | 106,611 | 967,822 |
| Bellway plc | 13,515 | 613,228 |
| Berkeley Group Holdings plc | 9,246 | 551,511 |
| BHP Group plc | 135,984 | 3,591,551 |
| BP plc | 4,867,154 | 23,318,051 |
| British American Tobacco plc | 187,793 | 6,532,270 |
| BT Group plc * | 1,931,835 | 3,670,156 |
| Bunzl plc | 20,522 | 758,495 |
| Burberry Group plc | 24,412 | 645,186 |
| Carnival plc * | 23,574 | 475,857 |
| Centrica plc * | 2,511,740 | 2,073,407 |
| Coca-Cola HBC AG * | 12,455 | 431,693 |
| Compass Group plc * | 110,240 | 2,339,363 |
| CRH plc | 59,033 | 2,824,002 |
| Croda International plc | 3,558 | 460,514 |
| Currys plc | 392,017 | 651,828 |
| DCC plc | 10,979 | 916,092 |
| Diageo plc | 73,115 | 3,637,595 |
| Direct Line Insurance Group plc | 178,876 | 714,950 |
| Drax Group plc | 65,721 | 477,977 |
| DS Smith plc | 109,291 | 573,305 |
| easyJet plc * | 42,575 | 362,914 |
| Evraz plc | 61,767 | 524,649 |
| Experian plc | 21,953 | 1,006,571 |
| Ferguson plc | 14,291 | 2,150,273 |
| FirstGroup plc * | 389,584 | 537,431 |
| GlaxoSmithKline plc | 344,644 | 7,155,095 |
| Glencore plc * | 2,474,049 | 12,371,681 |
| Hays plc | 208,517 | 472,552 |
| HSBC Holdings plc | 1,994,603 | 12,017,826 |
| Imperial Brands plc | 142,301 | 3,002,718 |
| Inchcape plc | 59,279 | 670,103 |
| Informa plc * | 62,309 | 443,262 |
| InterContinental Hotels Group plc * | 6,887 | 482,414 |
| International Consolidated Airlines Group S.A. * | 228,479 | 511,711 |
| Intertek Group plc | 4,811 | 322,183 |
| ITV plc * | 443,414 | 652,616 |
| J. Sainsbury plc | 388,624 | 1,591,749 |
| John Wood Group plc * | 125,328 | 365,462 |
| Johnson Matthey plc | 28,963 | 1,082,507 |
| Kingfisher plc | 348,185 | 1,598,027 |
| Land Securities Group plc | 41,332 | 388,293 |
| Legal & General Group plc | 410,530 | 1,619,041 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Lloyds Banking Group plc | 7,936,147 | 5,431,346 |
| London Stock Exchange Group plc | 3,176 | 309,164 |
| M&G plc | 602,680 | 1,646,582 |
| Marks & Spencer Group plc * | 561,057 | 1,410,355 |
| Meggitt plc * | 64,891 | 666,223 |
| Melrose Industries plc | 151,134 | 326,078 |
| Micro Focus International plc | 72,164 | 353,637 |
| Mondi plc | 46,132 | 1,152,089 |
| National Grid plc | 324,566 | 4,155,601 |
| Natwest Group plc | 172,396 | 519,804 |
| Next plc | 6,207 | 676,497 |
| Pearson plc | 67,729 | 557,316 |
| Pennon Group plc | 16,842 | 268,639 |
| Persimmon plc | 28,372 | 1,057,092 |
| Polymetal International plc | 13,768 | 254,514 |
| Prudential plc | 102,036 | 2,082,346 |
| Reckitt Benckiser Group plc | 26,064 | 2,115,948 |
| RELX plc | 61,218 | 1,898,210 |
| Rentokil Initial plc | 49,050 | 394,801 |
| Rio Tinto plc | 86,805 | 5,412,419 |
| Rolls-Royce Holdings plc * | 439,526 | 793,274 |
| Royal Dutch Shell plc, A Shares | 1,006,791 | 23,064,449 |
| Royal Dutch Shell plc, B Shares | 908,624 | 20,851,759 |
| Royal Mail plc | 199,485 | 1,149,995 |
| Severn Trent plc | 15,695 | 587,813 |
| Smith & Nephew plc | 41,203 | 711,579 |
| Smiths Group plc | 26,128 | 485,146 |
| Smurfit Kappa Group plc | 17,663 | 926,293 |
| SSE plc | 107,501 | 2,420,879 |
| Standard Chartered plc | 228,932 | 1,548,267 |
| Tate & Lyle plc | 45,597 | 404,488 |
| Taylor Wimpey plc | 387,832 | 820,579 |
| Tesco plc | 1,063,361 | 3,926,212 |
| The Sage Group plc | 44,280 | 430,646 |
| Travis Perkins PLC | 28,059 | 593,191 |
| TUI AG *(b) | 209,018 | 699,956 |
| Unilever plc | 123,534 | 6,614,242 |
| United Utilities Group plc | 46,599 | 662,318 |
| Vodafone Group plc | 5,303,491 | 7,816,556 |
| Whitbread plc * | 14,215 | 635,947 |
| Wickes Group PLC | 33,172 | 97,332 |
| WPP plc | 162,327 | 2,346,400 |
| 235,457,572 | ||
| Total Common Stocks (Cost $1,062,669,636) | 1,381,221,981 | |
| PREFERRED STOCKS 1.0% OF NET ASSETS | ||
| Germany 0.6% | ||
| Bayerische Motoren Werke AG | 10,224 | 871,511 |
| FUCHS PETROLUB SE | 6,597 | 316,027 |
| Henkel AG & Co. KGaA | 12,932 | 1,158,546 |
| Volkswagen AG | 28,718 | 6,445,221 |
| 8,791,305 | ||
| Italy 0.1% | ||
| Telecom Italia S.p.A. - RSP | 1,975,144 | 750,898 |
| Republic of Korea 0.3% | ||
| Amorepacific Corp. | 434 | 26,733 |
| Hyundai Motor Co., Ltd. | 3,780 | 316,313 |
| Hyundai Motor Co., Ltd. 2nd | 4,937 | 414,789 |
| LG Chem Ltd. | 514 | 168,838 |
| LG Electronics, Inc. | 3,305 | 181,897 |
56
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| LG Household & Health Care Ltd | 87 | 44,667 |
| Samsung Electronics Co., Ltd. | 61,744 | 3,391,968 |
| Samsung SDI Co. Ltd | 6 | 1,945 |
| 4,547,150 | ||
| Total Preferred Stocks (Cost $10,344,550) | 14,089,353 | |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.0% OF NET ASSETS | ||
| Money Market Funds 0.9% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 12,169,078 | 12,169,078 |
| Time Deposits 0.1% | ||
| BNP Paribas SA | ||
| Swiss Franc | ||
| (1.41%), 11/01/21 (e)(f) | 1,304 | 1,425 |
| Brown Brothers Harriman & Co. | ||
| Australian Dollar | ||
| (0.21%), 11/01/21 (e)(f) | 42,379 | 31,880 |
| Canadian Dollar | ||
| 0.01%, 11/01/21 (e) | 78,035 | 63,053 |
| Danish Krone | ||
| (0.61%), 11/01/21 (e)(f) | 217,488 | 33,798 |
| Hong Kong Dollar | ||
| 0.00%, 11/01/21 (e) | 10,734 | 1,380 |
| New Zealand Dollar | ||
| 0.20%, 11/01/21 (e) | 24,563 | 17,602 |
| Norwegian Krone | ||
| 0.01%, 11/01/21 (e) | 479,638 | 56,776 |
| Singapore Dollar | ||
| 0.01%, 11/01/21 (e) | 1,757 | 1,303 |
| Swedish Krona | ||
| (0.35%), 11/01/21 (e)(f) | 103,910 | 12,099 |
| Citibank NA | ||
| Euro | ||
| (0.79%), 11/01/21 (e)(f) | 273,140 | 315,749 |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT | VALUE ($) |
| U.S. Dollar | ||
| 0.01%, 11/01/21 (e) | 882,848 | 882,848 |
| Sumitomo Mitsui Banking Corp. | ||
| Japanese Yen | ||
| (0.28%), 11/01/21 (e)(f) | 1,375,372 | 12,067 |
| 1,429,980 | ||
| Total Short-Term Investments (Cost $13,599,058) | 13,599,058 | |
| Total Investments in Securities (Cost $1,086,613,244) | 1,408,910,392 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| MSCI EAFE Index, expires 12/17/21 | 81 | 9,475,380 | 102,020 |
| * | Non-income producing security. |
| (a) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $11,277,902. |
| (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 |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
57
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $— | $448,698,769 | $— | $448,698,769 |
| Australia | — | 71,357,861 | 2,055,387 | 73,413,248 |
| Canada | 109,379,174 | — | — | 109,379,174 |
| France | 783,780 | 120,975,436 | — | 121,759,216 |
| Germany | 210,142 | 103,214,976 | — | 103,425,118 |
| Hong Kong | — | 22,896,890 | 207,093 | 23,103,983 |
| Ireland | 633,344 | 936,125 | — | 1,569,469 |
| Netherlands | 1,122,355 | 35,764,538 | 0* | 36,886,893 |
| Portugal | 464,685 | 2,350,692 | — | 2,815,377 |
| Republic of Korea | — | 73,619,569 | 845,464 | 74,465,033 |
| Singapore | 715,515 | 9,810,927 | — | 10,526,442 |
| Spain | 5,819,482 | 38,952,125 | — | 44,771,607 |
| Sweden | 814,071 | 26,262,063 | — | 27,076,134 |
| Switzerland | 678,277 | 67,195,669 | — | 67,873,946 |
| United Kingdom | 1,709,354 | 233,748,218 | — | 235,457,572 |
| Preferred Stocks1 | — | 5,298,048 | — | 5,298,048 |
| Germany | 316,027 | 8,475,278 | — | 8,791,305 |
| Short-Term Investments1 | — | 1,429,980 | — | 1,429,980 |
| Money Market Funds | 12,169,078 | — | — | 12,169,078 |
| Futures Contracts2 | 102,020 | — | — | 102,020 |
| Total | $134,917,304 | $1,270,987,164 | $3,107,944 | $1,409,012,412 |
| * | Level 3 amount shown includes securities determined to have no value at October 31, 2021. |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
58
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $1,086,613,244) including securities on loan of $11,277,902 | $1,408,910,392 | |
| Deposit with broker for futures contracts | 660,431 | |
| Receivables: | ||
| Dividends | 4,325,028 | |
| Foreign tax reclaims | 2,673,042 | |
| Fund shares sold | 2,604,062 | |
| Investments sold | 2,238,725 | |
| Income from securities on loan | + | 17,403 |
| Total assets | 1,421,429,083 | |
| Liabilities | ||
| Collateral held for securities on loan | 12,169,078 | |
| Payables: | ||
| Due to custodian | 2,115,158 | |
| Investment adviser fees | 295,282 | |
| Fund shares redeemed | 279,538 | |
| Investments bought | 258,719 | |
| Variation margin on futures contracts | + | 47,705 |
| Total liabilities | 15,165,480 | |
| Net assets | $1,406,263,603 | |
| Net Assets by Source | ||
| Capital received from investors | $1,189,619,478 | |
| Total distributable earnings | + | 216,644,125 |
| Net assets | $1,406,263,603 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $1,406,263,603 | 133,183,347 | $10.56 | ||
59
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $4,795,107) | $42,518,659 | |
| Securities on loan, net | + | 406,537 |
| Total investment income | 42,925,196 | |
| Expenses | ||
| Investment adviser fees | 3,193,549 | |
| Professional fees | + | 12,454* |
| Total expenses | 3,206,003 | |
| Expense reduction by investment adviser | – | 12,454* |
| Net expenses | – | 3,193,549 |
| Net investment income | 39,731,647 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 13,787,561 | |
| Net realized gains on futures contracts | 2,327,465 | |
| Net realized losses on foreign currency transactions | + | (57,122) |
| Net realized gains | 16,057,904 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 360,979,367 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | 189,771 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (110,331) |
| Net change in unrealized appreciation (depreciation) | + | 361,058,807 |
| Net realized and unrealized gains | 377,116,711 | |
| Increase in net assets resulting from operations | $416,848,358 | |
| * | Professional fees associated with the filing of tax claims in the European Union deemed to be non-routine expenses of the fund. See financial notes 2 (d) and 4 for additional information. |
60
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Large Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $39,731,647 | $29,339,381 | |
| Net realized gains (losses) | 16,057,904 | (57,340,321) | |
| Net change in unrealized appreciation (depreciation) | + | 361,058,807 | (138,729,812) |
| Increase (decrease) in net assets from operations | $416,848,358 | ($166,730,752) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($28,299,152) | ($48,541,581) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 38,348,007 | $385,853,692 | 46,294,520 | $338,877,413 | |
| Shares reinvested | 1,660,561 | 15,210,744 | 2,997,596 | 27,038,314 | |
| Shares redeemed | + | (35,535,906) | (349,380,700) | (68,317,340) | (511,865,550) |
| Net transactions in fund shares | 4,472,662 | $51,683,736 | (19,025,224) | ($145,949,823) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 128,710,685 | $966,030,661 | 147,735,909 | $1,327,252,817 | |
| Total increase (decrease) | + | 4,472,662 | 440,232,942 | (19,025,224) | (361,222,156) |
| End of period | 133,183,347 | $1,406,263,603 | 128,710,685 | $966,030,661 | |
61
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $11.46 | $12.57 | $12.67 | $14.58 | $11.93 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.27 | 0.22 | 0.29 | 0.33 | 0.27 | |
| Net realized and unrealized gains (losses) | 3.96 | (0.97) | 0.25 | (1.70) | 2.67 | |
| Total from investment operations | 4.23 | (0.75) | 0.54 | (1.37) | 2.94 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.27) | (0.36) | (0.30) | (0.34) | (0.29) | |
| Distributions from net realized gains | — | — | (0.34) | (0.20) | — | |
| Total distributions | (0.27) | (0.36) | (0.64) | (0.54) | (0.29) | |
| Net asset value at end of period | $15.42 | $11.46 | $12.57 | $12.67 | $14.58 | |
| Total return | 37.25% | (6.28%) | 5.13% | (9.79%) | 25.23% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.39% | 0.39% | 0.39% | 0.39% | 0.48% 2 | |
| Net operating expenses | N/A | N/A | N/A | N/A 3 | 0.43% 2 | |
| Net investment income (loss) | 1.84% | 1.89% | 2.44% | 2.30% | 2.04% | |
| Portfolio turnover rate | 35% | 25% | 38% | 26% | 21% | |
| Net assets, end of period (x 1,000,000) | $708 | $577 | $775 | $763 | $749 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective May 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 3 | Effective May 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
62
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 98.7% OF NET ASSETS | ||
| Australia 5.2% | ||
| Adbri Ltd. | 193,114 | 434,692 |
| ALS Ltd. | 50,561 | 507,116 |
| Ansell Ltd. | 25,039 | 599,500 |
| ARB Corp Ltd. | 3,598 | 132,517 |
| ASX Ltd. | 11,365 | 714,720 |
| AusNet Services Ltd. | 444,546 | 826,700 |
| Austal Ltd. | 120,824 | 171,726 |
| Bank of Queensland Ltd. | 135,238 | 900,404 |
| Bapcor Ltd. | 43,222 | 260,700 |
| Beach Energy Ltd. | 303,273 | 318,590 |
| Bega Cheese Ltd. | 63,578 | 260,414 |
| Blackmores Ltd. | 2,948 | 210,404 |
| Breville Group Ltd. | 11,242 | 250,223 |
| carsales.com Ltd. | 17,081 | 319,656 |
| Challenger Ltd. | 147,517 | 774,881 |
| Charter Hall Group | 18,864 | 247,494 |
| Charter Hall Retail REIT | 71,511 | 221,853 |
| CIMIC Group Ltd. | 44,680 | 673,274 |
| Cleanaway Waste Management Ltd. | 189,268 | 384,925 |
| Cochlear Ltd. | 3,487 | 583,243 |
| Collins Foods Ltd. | 19,842 | 192,638 |
| Coronado Global Resources, Inc. * | 292,783 | 301,710 |
| Costa Group Holdings Ltd. | 66,389 | 146,791 |
| Cromwell Property Group | 260,915 | 159,677 |
| CSR Ltd. | 189,314 | 849,868 |
| Dexus | 113,163 | 928,251 |
| Domino's Pizza Enterprises Ltd. | 2,919 | 299,425 |
| Eagers Automotive Ltd | 35,847 | 402,752 |
| Eclipx Group Ltd. * | 173,526 | 327,423 |
| Elders Ltd. | 26,296 | 238,891 |
| Event Hospitality & Entertainment Ltd. * | 31,585 | 390,980 |
| Evolution Mining Ltd. | 191,226 | 519,167 |
| Flight Centre Travel Group Ltd. * | 50,358 | 762,019 |
| G.U.D. Holdings Ltd. | 18,330 | 169,652 |
| G8 Education Ltd. * | 419,526 | 348,676 |
| Genworth Mortgage Insurance Australia Ltd. | 109,873 | 190,876 |
| GrainCorp Ltd., Class A | 133,487 | 634,411 |
| GWA Group Ltd. | 84,582 | 173,628 |
| Harvey Norman Holdings Ltd. | 145,841 | 547,138 |
| Healius Ltd. | 138,927 | 508,707 |
| Humm Group Ltd. * | 166,606 | 111,168 |
| IGO Ltd. | 49,273 | 360,817 |
| Iluka Resources Ltd. | 38,898 | 277,514 |
| Inghams Group Ltd. | 84,362 | 236,641 |
| InvoCare Ltd. | 21,100 | 180,781 |
| IOOF Holdings Ltd. | 175,546 | 543,329 |
| IRESS Ltd. | 29,465 | 268,613 |
| Link Administration Holdings Ltd. | 96,961 | 319,251 |
| Magellan Financial Group Ltd. | 8,325 | 218,998 |
| McMillan Shakespeare Ltd. | 21,840 | 225,984 |
| Mineral Resources Ltd. | 14,743 | 433,419 |
| Monadelphous Group Ltd. | 47,873 | 365,146 |
| Myer Holdings Ltd. * | 1,651,810 | 673,719 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| nib Holdings Ltd. | 105,579 | 531,636 |
| Nine Entertainment Co. Holdings Ltd. | 195,519 | 409,468 |
| Northern Star Resources Ltd. | 60,892 | 421,545 |
| NRW Holdings Ltd. | 252,035 | 349,542 |
| Nufarm Ltd. * | 134,705 | 443,616 |
| Orora Ltd. | 393,640 | 984,749 |
| OZ Minerals Ltd. | 42,298 | 804,587 |
| Pendal Group Ltd. | 72,995 | 369,209 |
| Perenti Global Ltd. | 349,068 | 270,236 |
| Perpetual Ltd. | 14,734 | 421,135 |
| Platinum Asset Management Ltd. | 57,844 | 133,578 |
| Premier Investments Ltd. | 12,298 | 285,414 |
| Qube Holdings Ltd. | 200,854 | 485,079 |
| REA Group Ltd. | 1,693 | 205,477 |
| Reece Ltd. | 17,123 | 259,640 |
| Regis Resources Ltd. | 156,234 | 234,296 |
| Reliance Worldwide Corp. Ltd. | 81,314 | 357,547 |
| Sandfire Resources Ltd. | 81,020 | 341,288 |
| SEEK Ltd. | 29,999 | 745,562 |
| Seven Group Holdings Ltd. | 15,537 | 253,755 |
| Shopping Centres Australasia Property Group | 109,516 | 230,077 |
| Southern Cross Media Group Ltd. | 122,381 | 214,757 |
| St. Barbara Ltd. | 239,505 | 263,360 |
| Steadfast Group Ltd. | 63,422 | 223,137 |
| Super Retail Group Ltd. | 51,641 | 506,617 |
| Sydney Airport * | 109,994 | 682,121 |
| Tassal Group Ltd. | 69,894 | 187,229 |
| The GPT Group | 201,555 | 786,880 |
| The Star Entertainment Grp Ltd. * | 310,016 | 861,516 |
| TPG Telecom Ltd. | 41,522 | 211,967 |
| Vicinity Centres | 815,420 | 1,064,925 |
| Virgin Australia International Holdings (a) | 176,214 | 0 |
| Washington H Soul Pattinson & Co., Ltd. | 8,686 | 213,907 |
| Whitehaven Coal Ltd. * | 614,538 | 1,216,167 |
| Worley Ltd. | 94,546 | 776,810 |
| 36,847,921 | ||
| Austria 0.8% | ||
| ANDRITZ AG | 18,722 | 1,063,382 |
| Austria Technologie & Systemtechnik AG | 7,555 | 289,891 |
| BAWAG Group AG | 15,069 | 947,768 |
| CA Immobilien Anlagen AG | 4,190 | 179,789 |
| EVN AG | 10,331 | 291,400 |
| IMMOFINANZ AG | 12,346 | 295,715 |
| Lenzing AG * | 4,587 | 553,151 |
| Mayr-Melnhof Karton AG | 1,713 | 337,035 |
| Oesterreichische Post AG | 10,970 | 462,868 |
| S IMMO AG | 7,463 | 176,858 |
| UNIQA Insurance Group AG | 39,517 | 367,869 |
| Verbund AG | 4,480 | 467,005 |
| Vienna Insurance Group AG Wiener Versicherung Gruppe | 11,757 | 343,175 |
| 5,775,906 | ||
63
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Belgium 1.2% | ||
| Ackermans & van Haaren N.V. | 5,442 | 935,839 |
| AGFA-Gevaert N.V. * | 63,065 | 274,116 |
| Barco N.V. | 13,723 | 309,310 |
| Befimmo S.A. | 4,380 | 179,240 |
| Bekaert S.A. | 16,829 | 737,139 |
| bpost S.A. * | 59,268 | 507,769 |
| Cie d'Entreprises CFE | 3,103 | 317,243 |
| Cofinimmo S.A. | 2,413 | 389,299 |
| D'ieteren Group | 7,091 | 1,222,660 |
| Elia Group S.A./N.V. | 3,813 | 444,838 |
| Euronav N.V. | 60,639 | 645,295 |
| KBC Ancora | 4,372 | 227,941 |
| Melexis N.V. | 2,168 | 250,049 |
| Ontex Group N.V. * | 54,290 | 511,936 |
| Orange Belgium S.A. | 8,973 | 203,721 |
| Sofina S.A. | 916 | 405,335 |
| Telenet Group Holding N.V. | 17,577 | 631,471 |
| Tessenderlo Group S.A. * | 7,111 | 259,509 |
| Warehouses De Pauw CVA | 3,524 | 160,471 |
| 8,613,181 | ||
| Canada 8.4% | ||
| Aecon Group, Inc. | 28,585 | 426,373 |
| Ag Growth International, Inc. | 6,460 | 141,978 |
| Alamos Gold, Inc., Class A | 27,844 | 206,535 |
| Algonquin Power & Utilities Corp. | 20 | 288 |
| Allied Properties Real Estate Investment Trust | 12,007 | 414,948 |
| Altus Group Ltd. | 3,617 | 189,705 |
| Artis Real Estate Investment Trust | 44,864 | 424,859 |
| ATS Automation Tooling Systems, Inc. * | 8,580 | 291,939 |
| AutoCanada, Inc. *(b) | 9,069 | 326,751 |
| B2Gold Corp. | 101,980 | 421,071 |
| Badger Infrastructure Solutions Ltd. | 6,882 | 189,900 |
| Baytex Energy Corp. *(b) | 414,443 | 1,389,737 |
| Birchcliff Energy Ltd. | 110,260 | 592,460 |
| BlackBerry Ltd. * | 46,346 | 500,684 |
| Boardwalk Real Estate Investment Trust (b) | 8,855 | 382,004 |
| Boralex, Inc., Class A | 4,317 | 133,598 |
| Boyd Group Services, Inc. | 1,743 | 338,291 |
| Brookfield Infrastructure Corp., Class A | 7,991 | 484,393 |
| BRP, Inc. | 4,656 | 409,394 |
| CAE, Inc. * | 32,870 | 996,777 |
| Cameco Corp. | 59,518 | 1,446,110 |
| Canadian Apartment Properties REIT | 13,515 | 659,916 |
| Canadian Utilities Ltd., Class A | 35,272 | 1,021,737 |
| Canadian Western Bank | 16,171 | 517,300 |
| Canfor Corp. * | 28,647 | 593,495 |
| Capital Power Corp. | 23,101 | 758,772 |
| Cascades, Inc. | 55,750 | 645,972 |
| Celestica Inc. * | 107,962 | 1,064,267 |
| Centerra Gold, Inc. | 50,745 | 380,505 |
| Chartwell Retirement Residences | 38,545 | 371,871 |
| Chemtrade Logistics Income Fund (b) | 80,976 | 517,550 |
| Choice Properties Real Estate Investment Trust | 25,425 | 305,897 |
| Chorus Aviation, Inc. * | 103,187 | 300,156 |
| Cineplex, Inc. *(b) | 48,659 | 521,346 |
| Cogeco Communications, Inc. | 2,583 | 221,838 |
| Cogeco, Inc. | 6,097 | 405,843 |
| Colliers International Group, Inc. | 2,755 | 399,671 |
| Cominar Real Estate Investment Trust | 84,581 | 789,359 |
| Constellation Software, Inc. | 649 | 1,140,569 |
| Corus Entertainment, Inc., B Shares | 161,091 | 730,220 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Crombie Real Estate Investment Trust | 15,111 | 225,639 |
| Dorel Industries, Inc., Class B * | 33,120 | 596,781 |
| Dream Office Real Estate Investment Trust | 21,280 | 401,493 |
| ECN Capital Corp. | 16,491 | 143,377 |
| Element Fleet Management Corp. | 37,612 | 408,760 |
| Enerflex Ltd. | 72,604 | 618,917 |
| Enerplus Corp. | 141,987 | 1,344,609 |
| Exchange Income Corp. (b) | 10,011 | 344,593 |
| Extendicare, Inc. (b) | 26,560 | 155,377 |
| First Capital Real Estate Investment Trust | 41,277 | 589,671 |
| FirstService Corp. | 1,420 | 283,220 |
| Franco-Nevada Corp. | 5,905 | 842,569 |
| Gibson Energy, Inc. | 52,065 | 1,049,209 |
| Granite Real Estate Investment Trust | 3,463 | 280,711 |
| Home Capital Group, Inc. * | 14,109 | 457,836 |
| Hudbay Minerals, Inc. | 67,522 | 470,843 |
| IAMGOLD Corp. * | 141,237 | 389,155 |
| IGM Financial, Inc. | 21,083 | 837,119 |
| Innergex Renewable Energy, Inc. | 12,076 | 201,006 |
| Interfor Corp. | 23,782 | 544,588 |
| Intertape Polymer Group, Inc. | 12,252 | 278,383 |
| Just Energy Group, Inc. *(b) | 16,771 | 17,752 |
| Killam Apartment Real Estate Investment Trust | 8,365 | 153,701 |
| Kirkland Lake Gold Ltd. | 14,277 | 601,835 |
| Laurentian Bank of Canada | 12,471 | 419,899 |
| LifeWorks, Inc. | 8,085 | 208,984 |
| Lundin Mining Corp. | 98,140 | 854,046 |
| Maple Leaf Foods, Inc. | 27,483 | 599,137 |
| Martinrea International, Inc. | 68,552 | 636,443 |
| MEG Energy Corp. * | 143,604 | 1,286,820 |
| Mullen Group Ltd. | 43,587 | 450,803 |
| NFI Group, Inc. | 27,774 | 562,841 |
| Northland Power, Inc. | 17,495 | 562,481 |
| NorthWest Healthcare Properties Real Estate Investment Trust | 14,915 | 160,045 |
| NuVista Energy Ltd. * | 102,820 | 509,281 |
| OceanaGold Corp. * | 301,496 | 562,747 |
| Pan American Silver Corp. | 14,622 | 374,175 |
| Parex Resources, Inc. | 32,809 | 637,040 |
| Pason Systems, Inc. | 30,744 | 228,543 |
| Peyto Exploration & Development Corp. | 149,215 | 1,176,744 |
| PrairieSky Royalty Ltd. | 27,373 | 336,854 |
| Precision Drilling Corp. *(b) | 17,166 | 759,959 |
| Premium Brands Holdings Corp. | 3,839 | 414,889 |
| Primo Water Corp. | 34,435 | 548,133 |
| Richelieu Hardware Ltd. | 9,767 | 344,797 |
| Ritchie Bros. Auctioneers, Inc. | 7,766 | 530,806 |
| Russel Metals, Inc. | 34,378 | 906,395 |
| Secure Energy Services, Inc. | 178,928 | 828,424 |
| ShawCor Ltd. * | 115,084 | 495,635 |
| Shopify, Inc., Class A * | 129 | 188,353 |
| Sienna Senior Living, Inc. (b) | 15,916 | 182,489 |
| Sleep Country Canada Holdings, Inc. | 7,519 | 211,001 |
| SmartCentres Real Estate Investment Trust | 23,601 | 594,792 |
| SSR Mining, Inc. | 14,316 | 225,799 |
| Stantec, Inc. | 18,915 | 1,045,399 |
| Stelco Holdings, Inc. | 4,463 | 154,957 |
| Stella-Jones, Inc. | 14,897 | 534,804 |
| Superior Plus Corp. | 50,734 | 564,485 |
| The Descartes Systems Group, Inc. * | 1,794 | 146,509 |
| The North West Co., Inc. | 13,712 | 372,604 |
| TMX Group Ltd. | 4,196 | 454,284 |
| Torex Gold Resources, Inc. * | 13,374 | 155,504 |
| Toromont Industries Ltd. | 8,592 | 764,435 |
| Tourmaline Oil Corp. | 44,243 | 1,599,054 |
| TransAlta Corp. | 115,151 | 1,291,448 |
64
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Transat AT, Inc. *(b) | 81,555 | 289,291 |
| Transcontinental, Inc., Class A | 35,024 | 554,679 |
| Tricon Residential, Inc. | 10,489 | 152,640 |
| Turquoise Hill Resources Ltd. * | 22,101 | 280,013 |
| Westshore Terminals Investment Corp. | 14,191 | 306,959 |
| Wheaton Precious Metals Corp. | 19,846 | 801,152 |
| Whitecap Resources, Inc. | 184,955 | 1,110,388 |
| Winpak Ltd. | 7,741 | 242,250 |
| Yamana Gold, Inc. | 90,125 | 353,917 |
| 59,264,350 | ||
| Denmark 1.3% | ||
| Chr. Hansen Holding A/S | 7,181 | 571,356 |
| D/S Norden A/S | 12,174 | 293,803 |
| Demant A/S * | 9,180 | 445,028 |
| Dfds A/S * | 8,694 | 449,899 |
| Drilling Co. of 1972 A/S * | 7,802 | 279,665 |
| FLSmidth & Co. A/S | 20,426 | 776,602 |
| Genmab A/S * | 712 | 319,867 |
| GN Store Nord A/S | 7,185 | 436,612 |
| H. Lundbeck A/S | 10,889 | 303,252 |
| Jyske Bank A/S * | 16,268 | 793,667 |
| Matas A/S | 13,770 | 269,408 |
| NKT A/S * | 6,113 | 294,678 |
| Per Aarsleff Holding A/S | 6,973 | 300,701 |
| Ringkjoebing Landbobank A/S | 1,804 | 229,039 |
| Rockwool International A/S, B Shares | 961 | 439,480 |
| Royal Unibrew A/S | 4,682 | 581,623 |
| Scandinavian Tobacco Group A/S | 19,051 | 428,093 |
| Schouw & Co. A/S | 3,710 | 360,852 |
| SimCorp A/S | 2,135 | 258,536 |
| Sydbank A/S | 23,314 | 801,188 |
| Topdanmark A/S | 5,394 | 286,265 |
| Tryg A/S | 23,872 | 566,557 |
| 9,486,171 | ||
| Finland 1.1% | ||
| Aktia Bank Oyj | 14,670 | 210,023 |
| Cargotec Oyj, B Shares | 15,249 | 789,661 |
| Finnair Oyj *(b) | 346,125 | 264,417 |
| Huhtamaki Oyj | 18,618 | 811,802 |
| Kemira Oyj | 33,939 | 521,231 |
| Kojamo Oyj | 13,840 | 310,079 |
| Konecranes Oyj | 18,411 | 765,799 |
| Metsa Board Oyj | 38,863 | 359,680 |
| Neles Oyj | 19,873 | 297,799 |
| Orion Oyj, Class B | 17,801 | 770,847 |
| Sanoma Oyj | 16,862 | 262,485 |
| TietoEVRY Oyj | 16,765 | 514,137 |
| Tokmanni Group Corp. | 8,096 | 184,207 |
| Uponor Oyj | 11,707 | 285,959 |
| Valmet Oyj | 22,464 | 911,949 |
| Yit Oyj | 61,988 | 365,340 |
| 7,625,415 | ||
| France 3.9% | ||
| Aeroports de Paris * | 6,292 | 839,506 |
| Albioma S.A. | 4,335 | 170,535 |
| Alten S.A. | 5,251 | 846,148 |
| Amundi S.A. | 7,889 | 702,887 |
| Beneteau S.A. * | 13,698 | 209,116 |
| BioMerieux | 3,118 | 397,135 |
| CGG S.A. * | 480,505 | 347,499 |
| Cie Plastic Omnium S.A. | 22,799 | 632,942 |
| Coface S.A. | 23,724 | 339,201 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Covivio | 7,779 | 673,769 |
| Dassault Aviation S.A. | 3,390 | 354,268 |
| Derichebourg S.A. * | 48,509 | 552,046 |
| Edenred | 16,337 | 884,015 |
| Elior Group S.A. * | 108,437 | 857,931 |
| Eramet S.A. * | 4,004 | 334,615 |
| Eurofins Scientific SE | 5,561 | 656,281 |
| Euronext N.V. | 5,147 | 579,060 |
| Fnac Darty S.A. | 9,762 | 633,773 |
| Gaztransport Et Technigaz S.A. | 2,248 | 185,821 |
| Gecina S.A. | 4,560 | 638,120 |
| Getlink SE | 49,788 | 766,293 |
| ICADE | 7,472 | 585,968 |
| Imerys S.A. | 16,398 | 710,777 |
| Ipsen S.A. | 4,271 | 442,022 |
| IPSOS | 14,396 | 674,705 |
| JCDecaux S.A. * | 22,182 | 578,735 |
| Kaufman & Broad S.A. | 6,622 | 265,672 |
| Korian S.A. | 16,642 | 554,397 |
| La Francaise des Jeux SAEM | 5,059 | 262,691 |
| Maisons du Monde S.A. | 17,180 | 389,756 |
| Mercialys S.A. | 26,770 | 290,807 |
| Mersen S.A. | 6,407 | 240,354 |
| Metropole Television S.A. | 24,594 | 541,888 |
| Nexans S.A. | 8,932 | 896,179 |
| Nexity S.A. | 16,467 | 752,825 |
| Orpea S.A. | 6,305 | 658,582 |
| Quadient S.A. | 25,658 | 613,402 |
| Remy Cointreau S.A. | 1,694 | 342,204 |
| Sartorius Stedim Biotech | 416 | 229,287 |
| SEB S.A. | 5,356 | 839,228 |
| Societe BIC S.A. | 12,581 | 730,818 |
| Sopra Steria Group SACA | 3,804 | 747,934 |
| SPIE S.A. | 36,685 | 892,071 |
| Tarkett S.A. * | 8,268 | 190,538 |
| Technicolor S.A. * | 127,775 | 409,567 |
| Television Francaise | 59,003 | 631,678 |
| Trigano S.A. | 1,380 | 259,044 |
| UbiSoft Entertainment S.A. * | 11,085 | 580,453 |
| Vallourec S.A. * | 32,987 | 263,699 |
| Verallia S.A. | 5,260 | 194,739 |
| Vicat S.A. | 8,291 | 353,849 |
| Virbac S.A. | 329 | 166,754 |
| Worldline S.A. * | 8,929 | 520,705 |
| 27,412,289 | ||
| Germany 4.0% | ||
| 1&1 AG | 14,876 | 432,966 |
| Aareal Bank AG | 31,517 | 1,007,453 |
| ADVA Optical Networking SE * | 8,662 | 114,839 |
| Alstria Office REIT AG | 14,277 | 266,863 |
| Aroundtown S.A. | 69,305 | 481,636 |
| Bechtle AG | 9,607 | 720,657 |
| Befesa S.A. | 4,258 | 316,794 |
| Bilfinger SE | 15,665 | 550,545 |
| Borussia Dortmund GmbH & Co. KGaA * | 16,487 | 90,980 |
| CANCOM SE | 5,510 | 380,933 |
| Carl Zeiss Meditec AG, Class B | 1,656 | 333,502 |
| CECONOMY AG * | 120,142 | 586,166 |
| Cewe Stiftung & Co. KGaA | 1,391 | 194,246 |
| CTS Eventim AG & Co. KGaA * | 4,443 | 323,142 |
| Deutsche Euroshop AG | 11,142 | 226,786 |
| Deutsche Pfandbriefbank AG | 88,722 | 1,100,850 |
| Deutz AG * | 66,380 | 556,367 |
| Duerr AG | 15,969 | 723,762 |
| DWS Group GmbH & Co. KGaA | 7,817 | 338,128 |
| ElringKlinger AG * | 15,315 | 216,363 |
65
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Fielmann AG | 3,802 | 250,718 |
| Fraport AG Frankfurt Airport Services Worldwide * | 12,118 | 867,303 |
| Gerresheimer AG | 5,295 | 485,830 |
| Grand City Properties S.A. | 13,160 | 337,076 |
| GRENKE AG (b) | 4,413 | 172,072 |
| Hamburger Hafen und Logistik AG | 8,933 | 200,232 |
| Hella GmbH & Co. KGaA | 15,328 | 1,065,609 |
| HelloFresh SE * | 1,422 | 115,237 |
| HOCHTIEF AG | 7,707 | 594,597 |
| Hornbach Holding AG & Co. KGaA | 5,333 | 674,397 |
| Hornback Baumarkt Aktiengesellschaft | 3,696 | 165,990 |
| Jenoptik AG | 9,615 | 368,043 |
| JOST Werke AG | 3,656 | 211,739 |
| Kloeckner & Co. SE * | 84,538 | 1,135,815 |
| Krones AG | 5,653 | 582,568 |
| KWS Saat SE & Co. KGaA | 1,246 | 106,300 |
| LEG Immobilien SE | 4,818 | 716,644 |
| Leoni AG *(b) | 68,642 | 1,063,292 |
| Nordex SE * | 12,737 | 234,072 |
| Norma Group SE | 8,764 | 376,511 |
| Pfeiffer Vacuum Technology AG | 982 | 245,201 |
| Puma SE | 7,336 | 910,029 |
| QIAGEN N.V. * | 11,172 | 614,617 |
| Rational AG | 190 | 188,584 |
| RTL Group S.A. | 16,566 | 956,823 |
| S&T AG (b) | 4,662 | 112,029 |
| SAF-Holland SE * | 20,465 | 283,890 |
| Scout24 AG | 4,805 | 334,649 |
| Siltronic AG | 2,434 | 384,358 |
| Siltronic AG - Tender Offer | 880 | 137,289 |
| Sixt SE * | 3,361 | 579,477 |
| Software AG | 8,845 | 363,781 |
| Stabilus S.A. | 4,173 | 313,559 |
| Stroeer SE & Co. KGaA | 3,258 | 276,308 |
| Suedzucker AG | 38,961 | 618,082 |
| TAG Immobilien AG | 14,713 | 446,997 |
| Takkt AG | 20,428 | 333,811 |
| Talanx AG * | 17,683 | 850,379 |
| Wacker Chemie AG | 4,329 | 782,280 |
| Wacker Neuson SE | 10,492 | 344,404 |
| Zalando SE * | 7,986 | 754,522 |
| zooplus AG * | 339 | 187,477 |
| 28,705,569 | ||
| Greece 0.0% | ||
| TT Hellenic Postbank S.A. (a) | 24,275 | 0 |
| Hong Kong 3.4% | ||
| Asia Cement China Holdings Corp. | 241,000 | 183,642 |
| ASM Pacific Technology Ltd. | 59,800 | 647,060 |
| BOC Aviation Ltd. | 34,900 | 305,402 |
| Brightoil Petroleum Holdings Ltd. (a) | 1,150,000 | 0 |
| Budweiser Brewing Co. APAC Ltd. | 141,700 | 388,655 |
| Cafe De Coral Holdings Ltd. | 124,000 | 226,273 |
| Cathay Pacific Airways Ltd. * | 585,363 | 540,030 |
| Champion REIT | 195,000 | 102,283 |
| Chow Sang Sang Holdings International Ltd. | 205,000 | 291,239 |
| Chow Tai Fook Jewellery Group Ltd. * | 349,200 | 712,228 |
| CITIC Telecom International Holdings Ltd. | 688,000 | 243,743 |
| CK Infrastructure Holdings Ltd. | 41,000 | 247,189 |
| Cowell e Holdings, Inc. *(b) | 316,000 | 245,725 |
| Dairy Farm International Holdings Ltd. | 110,920 | 396,297 |
| FIH Mobile Ltd. * | 3,521,000 | 547,717 |
| FIT Hon Teng Ltd. * | 436,000 | 87,425 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Fortune REIT | 232,000 | 240,642 |
| Haitong International Securities Group Ltd. | 887,904 | 204,098 |
| Hang Lung Group Ltd. | 300,000 | 702,465 |
| Hang Lung Properties Ltd. | 297,000 | 689,293 |
| HKBN Ltd. | 147,000 | 176,124 |
| Huabao International Holdings Ltd. | 190,000 | 355,407 |
| Hysan Development Co., Ltd. | 95,000 | 330,281 |
| IGG, Inc. | 262,900 | 244,437 |
| Johnson Electric Holdings Ltd. | 175,188 | 387,771 |
| JS Global Lifestyle Co., Ltd. | 41,500 | 76,853 |
| K Wah International Holdings Ltd. | 738,000 | 295,210 |
| Kerry Logistics Network Ltd. | 70,000 | 169,736 |
| Kerry Properties Ltd. | 279,000 | 788,649 |
| Lee & Man Paper Manufacturing Ltd. | 582,000 | 437,434 |
| Luk Fook Holdings International Ltd. | 185,000 | 504,196 |
| Man Wah Holdings Ltd. | 126,000 | 195,003 |
| Melco International Development Ltd. * | 390,000 | 506,535 |
| MGM China Holdings Ltd. * | 142,800 | 104,775 |
| Minth Group Ltd. | 123,500 | 490,843 |
| MMG Ltd. * | 780,000 | 360,284 |
| NagaCorp Ltd. | 342,000 | 313,900 |
| Nexteer Automotive Group Ltd. | 374,000 | 461,586 |
| NWS Holdings Ltd. | 771,000 | 765,631 |
| Pacific Basin Shipping Ltd. | 1,390,000 | 641,494 |
| Pacific Textile Holdings Ltd. | 283,000 | 141,333 |
| Power Assets Holdings Ltd. | 27,143 | 165,879 |
| Powerlong Real Estate Holdings Ltd. | 566,000 | 387,750 |
| Prada S.p.A. | 74,800 | 471,469 |
| Shangri-La Asia Ltd. * | 328,000 | 267,273 |
| Shui On Land Ltd. | 3,122,000 | 461,449 |
| Shun Tak Holdings Ltd. * | 1,030,000 | 281,572 |
| SITC International Holdings Co., Ltd. | 117,000 | 395,441 |
| SJM Holdings Ltd. * | 555,000 | 412,764 |
| Stella International Holdings Ltd. | 340,500 | 405,685 |
| Swire Properties Ltd. | 162,200 | 434,853 |
| The Bank of East Asia Ltd. | 385,667 | 633,369 |
| Tingyi Holding Corp. | 482,000 | 899,645 |
| Towngas China Co., Ltd. | 317,470 | 217,949 |
| Truly International Holdings Ltd. | 1,548,000 | 504,688 |
| Uni-President China Holdings Ltd. | 328,000 | 279,551 |
| Value Partners Group Ltd. | 294,000 | 150,503 |
| Vitasoy International Holdings Ltd. | 78,000 | 188,016 |
| VSTECS Holdings Ltd. | 392,000 | 369,929 |
| VTech Holdings Ltd. | 67,300 | 518,241 |
| Want Want China Holdings Ltd. | 1,235,000 | 957,798 |
| Wynn Macau Ltd. *(b) | 352,400 | 315,141 |
| Xinyi Glass Holdings Ltd. | 213,000 | 600,222 |
| 24,068,075 | ||
| Ireland 0.2% | ||
| AIB Group plc * | 269,429 | 729,203 |
| Dalata Hotel Group plc * | 30,813 | 131,794 |
| Glanbia plc | 51,738 | 844,938 |
| Irish Continental Group plc * | 35,021 | 172,058 |
| 1,877,993 | ||
| Israel 1.7% | ||
| Arad Investment & Industrial Development Ltd. | 1,155 | 130,827 |
| Azrieli Group Ltd. | 2,970 | 277,764 |
| Bezeq The Israeli Telecommunication Corp., Ltd. * | 950,717 | 1,192,543 |
| Cellcom Israel Ltd. * | 48,541 | 183,679 |
| Clal Insurance Enterprise Holdings Ltd. * | 9,581 | 236,727 |
| Delek Group Ltd. * | 9,085 | 756,629 |
66
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| El Al Israel Airlines * | 141,998 | 159,376 |
| Elbit Systems Ltd. | 3,780 | 595,847 |
| Equital Ltd. * | 5,280 | 162,120 |
| First International Bank of Israel Ltd. | 8,805 | 353,108 |
| Gazit-Globe Ltd. | 39,298 | 318,480 |
| Harel Insurance Investments & Finances Service Ltd. | 24,991 | 279,405 |
| Isracard Ltd. | 39,145 | 157,346 |
| Israel Discount Bank Ltd., Class A * | 212,336 | 1,282,983 |
| Mizrahi Tefahot Bank Ltd. | 17,013 | 619,018 |
| Nice Ltd. * | 2,606 | 736,714 |
| Norstar Holdings, Inc. | 15,370 | 132,066 |
| Oil Refineries Ltd. * | 2,582,376 | 698,746 |
| Partner Communications Co., Ltd. * | 36,456 | 184,340 |
| Paz Oil Co., Ltd. * | 7,650 | 975,022 |
| Shikun & Binui Ltd. * | 32,115 | 191,014 |
| Shufersal Ltd. | 30,957 | 256,387 |
| Strauss Group Ltd. | 4,297 | 126,301 |
| The Israel Corp., Ltd. * | 3,059 | 1,128,703 |
| The Phoenix Holdings Ltd. | 21,462 | 271,278 |
| Tower Semiconductor Ltd. * | 23,018 | 753,652 |
| 12,160,075 | ||
| Italy 2.7% | ||
| ACEA S.p.A. | 13,160 | 285,395 |
| Alitalia - Linee Aeree Italiane S.p.A. (a) | 14,782 | 0 |
| Amplifon S.p.A. | 4,989 | 253,881 |
| Anima Holding S.p.A. | 81,598 | 433,566 |
| Autogrill S.p.A. * | 80,101 | 628,833 |
| Azimut Holding S.p.A. | 23,726 | 683,268 |
| Banca Generali S.p.A. * | 7,843 | 368,972 |
| Banca IFIS S.p.A. | 17,612 | 325,675 |
| Banca Mediolanum S.p.A. | 44,222 | 445,630 |
| Banca Monte dei Paschi di Siena S.p.A. * | 224,751 | 268,566 |
| Banca Popolare Di Sondrio Scarl | 183,423 | 797,068 |
| BFF Bank S.p.A. | 30,204 | 270,448 |
| BPER Banca | 400,837 | 878,862 |
| Brembo S.p.A. | 35,701 | 468,920 |
| Buzzi Unicem S.p.A. | 22,932 | 534,853 |
| Cerved Group S.p.A. * | 7,430 | 89,197 |
| Davide Campari-Milano N.V. | 33,094 | 470,072 |
| De'Longhi S.p.A. | 9,813 | 383,884 |
| DiaSorin S.p.A. | 1,135 | 256,583 |
| Enav S.p.A. * | 73,820 | 323,939 |
| ERG S.p.A. | 11,371 | 410,765 |
| Esprinet S.p.A. | 17,313 | 224,889 |
| Fincantieri S.p.A. *(b) | 201,192 | 158,208 |
| FinecoBank Banca Fineco S.p.A. * | 38,127 | 728,141 |
| Hera S.p.A. | 233,914 | 956,998 |
| Infrastrutture Wireless Italiane S.p.A. | 16,730 | 184,835 |
| Interpump Group S.p.A. | 8,231 | 606,312 |
| Iren S.p.A. | 240,655 | 747,880 |
| Italgas S.p.A. | 114,189 | 725,498 |
| Maire Tecnimont S.p.A. | 63,777 | 274,819 |
| MARR S.p.A. | 9,264 | 218,285 |
| Mediaset NV | 183,457 | 515,356 |
| Moncler S.p.A. | 11,573 | 832,844 |
| Nexi S.p.A. * | 7,415 | 128,926 |
| OVS S.p.A. * | 215,518 | 619,080 |
| Piaggio & C. S.p.A. | 50,212 | 168,328 |
| Recordati Industria Chimica e Farmaceutica S.p.A. | 8,701 | 545,178 |
| Reply S.p.A. | 1,510 | 293,096 |
| Saipem S.p.A. *(b) | 401,097 | 878,793 |
| Salvatore Ferragamo S.p.A. * | 15,443 | 328,598 |
| Societa Cattolica Di Assicurazione S.p.A. * | 49,364 | 375,486 |
| Technogym S.p.A. | 9,197 | 96,667 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Tod's S.p.A. * | 4,482 | 247,219 |
| UnipolSai Assicurazioni S.p.A. | 153,689 | 445,037 |
| Webuild S.p.A. | 96,471 | 238,826 |
| 19,117,676 | ||
| Japan 31.3% | ||
| ABC-Mart, Inc. | 7,400 | 355,673 |
| Achilles Corp. | 10,500 | 120,992 |
| Acom Co., Ltd. | 61,100 | 203,776 |
| Adastria Co., Ltd. | 21,280 | 394,748 |
| ADEKA Corp. | 42,400 | 943,203 |
| Advance Residence Investment Corp. | 71 | 232,981 |
| Aeon Delight Co., Ltd. | 8,500 | 261,051 |
| AEON Financial Service Co., Ltd. | 47,700 | 606,034 |
| Aeon Mall Co., Ltd. | 37,930 | 555,663 |
| Aica Kogyo Co., Ltd. | 14,300 | 438,306 |
| Aichi Steel Corp. | 13,000 | 302,857 |
| Aida Engineering Ltd. | 27,100 | 246,012 |
| Aiful Corp. | 39,100 | 130,263 |
| Ain Holdings, Inc. | 8,500 | 501,708 |
| Alpen Co., Ltd. | 7,700 | 187,822 |
| Amano Corp. | 20,300 | 502,337 |
| Anritsu Corp. (b) | 18,400 | 305,117 |
| AOKI Holdings, Inc. | 50,100 | 305,883 |
| Aoyama Trading Co., Ltd. * | 113,300 | 779,075 |
| Aozora Bank Ltd. | 38,200 | 873,824 |
| Arata Corp. | 15,200 | 538,057 |
| Arcland Sakamoto Co., Ltd. | 17,500 | 261,763 |
| Arcs Co., Ltd. | 36,600 | 703,352 |
| Ariake Japan Co., Ltd. | 2,100 | 136,727 |
| As One Corp. | 840 | 115,149 |
| Asahi Holdings, Inc. | 15,900 | 283,785 |
| Asahi Intecc Co., Ltd. | 6,300 | 166,064 |
| Asanuma Corp. | 4,500 | 179,963 |
| Asics Corp. | 49,800 | 1,241,087 |
| ASKUL Corp. | 11,900 | 161,635 |
| Autobacs Seven Co., Ltd. | 34,600 | 447,497 |
| Avex, Inc. | 18,700 | 255,326 |
| Axial Retailing, Inc. | 9,100 | 289,433 |
| Azbil Corp. | 20,600 | 878,236 |
| Belc Co., Ltd. | 4,200 | 207,339 |
| Belluna Co., Ltd. | 21,100 | 148,167 |
| Benesse Holdings, Inc. | 28,400 | 649,740 |
| BML, Inc. | 5,400 | 189,809 |
| Bunka Shutter Co., Ltd. | 28,400 | 276,834 |
| Calbee, Inc. | 22,100 | 569,417 |
| Canon Electronics, Inc. | 11,500 | 158,293 |
| Canon Marketing Japan, Inc. | 26,200 | 519,031 |
| Capcom Co., Ltd. | 10,700 | 287,995 |
| Cawachi Ltd. | 10,400 | 202,858 |
| Central Glass Co., Ltd. | 28,300 | 526,992 |
| Chudenko Corp. | 12,400 | 242,799 |
| Chugoku Marine Paints Ltd. | 22,800 | 176,488 |
| Citizen Watch Co., Ltd. | 259,400 | 1,131,259 |
| CKD Corp. | 13,700 | 271,605 |
| Colowide Co., Ltd. (b) | 10,600 | 153,238 |
| Cosmos Pharmaceutical Corp. | 3,270 | 499,712 |
| Create SD Holdings Co., Ltd. | 6,800 | 209,046 |
| Credit Saison Co., Ltd. | 77,200 | 946,450 |
| CyberAgent, Inc. | 36,600 | 613,253 |
| Daifuku Co., Ltd. | 9,100 | 837,740 |
| Daihen Corp. | 6,300 | 262,971 |
| Daiho Corp. | 7,500 | 252,643 |
| Daiichikosho Co., Ltd. | 15,000 | 544,641 |
| Daikyonishikawa Corp. | 61,200 | 367,771 |
| Daio Paper Corp. | 25,000 | 439,914 |
| Daiseki Co., Ltd. | 7,460 | 348,209 |
67
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Daishi Hokuetsu Financial Group, Inc. | 11,300 | 253,068 |
| Daiwa House REIT Investment Corp. | 72 | 206,614 |
| Daiwabo Holdings Co., Ltd. | 55,000 | 968,273 |
| DCM Holdings Co., Ltd. | 60,300 | 587,932 |
| Dena Co., Ltd. | 23,586 | 435,685 |
| Descente Ltd. * | 11,100 | 420,746 |
| Dexerials Corp. | 12,700 | 256,911 |
| Disco Corp. | 2,575 | 694,214 |
| DMG Mori Co., Ltd. | 30,000 | 516,624 |
| Doshisha Co., Ltd. | 13,100 | 205,258 |
| Doutor Nichires Holdings Co., Ltd. | 19,100 | 273,976 |
| Dowa Holdings Co., Ltd. | 24,600 | 1,027,392 |
| DTS Corp. | 11,500 | 255,170 |
| Duskin Co., Ltd. | 18,200 | 438,435 |
| DyDo Group Holdings, Inc. | 4,700 | 223,939 |
| Eagle Industry Co., Ltd. | 22,700 | 242,473 |
| Earth Corp. | 3,500 | 214,779 |
| Eizo Corp. | 6,950 | 265,795 |
| Elecom Co., Ltd. | 6,800 | 104,010 |
| Exedy Corp. | 41,900 | 624,133 |
| Ezaki Glico Co., Ltd. | 18,500 | 671,429 |
| F.C.C. Co., Ltd. | 26,500 | 366,887 |
| Fancl Corp. | 7,000 | 212,226 |
| Food & Life Cos., Ltd. | 8,900 | 385,756 |
| Foster Electric Co., Ltd. | 35,100 | 250,218 |
| FP Corp. | 7,260 | 246,528 |
| Fuji Co., Ltd. | 17,300 | 304,878 |
| Fuji Corp. | 19,738 | 460,410 |
| Fuji Media Holdings, Inc. | 32,000 | 331,696 |
| Fuji Oil Holdings, Inc. | 15,400 | 361,406 |
| Fuji Seal International, Inc. | 17,000 | 373,855 |
| Fuji Soft, Inc. | 5,800 | 295,357 |
| Fujibo Holdings, Inc. | 2,900 | 105,180 |
| Fujimori Kogyo Co., Ltd. | 6,400 | 263,152 |
| Fujitec Co., Ltd. | 20,000 | 454,312 |
| Fujitsu General Ltd. | 13,800 | 338,404 |
| Fukuoka Financial Group, Inc. | 40,300 | 724,003 |
| Fukuyama Transporting Co., Ltd. | 11,100 | 442,168 |
| Furukawa Co., Ltd. | 25,200 | 278,862 |
| Furuno Electric Co., Ltd. | 11,300 | 120,919 |
| Futaba Industrial Co., Ltd. | 90,900 | 355,873 |
| Fuyo General Lease Co., Ltd. | 3,500 | 227,470 |
| Geo Holdings Corp. | 43,600 | 463,205 |
| Glory Ltd. | 34,500 | 742,621 |
| GLP J-REIT | 134 | 218,562 |
| GMO Internet, Inc. | 4,200 | 115,980 |
| Godo Steel Ltd. | 10,100 | 133,540 |
| Goldwin, Inc. | 2,400 | 145,222 |
| Gree, Inc. | 27,500 | 231,931 |
| GS Yuasa Corp. | 36,700 | 798,946 |
| GungHo Online Entertainment, Inc. | 17,450 | 327,377 |
| Gunze Ltd. | 9,500 | 366,151 |
| H.I.S. Co., Ltd. * | 16,800 | 377,780 |
| H.U. Group Holdings, Inc. | 23,700 | 584,472 |
| Hamakyorex Co., Ltd. | 8,100 | 224,567 |
| Hamamatsu Photonics K.K. | 9,900 | 587,589 |
| Hazama Ando Corp. | 112,200 | 759,785 |
| Heiwa Corp. | 24,500 | 436,861 |
| Heiwa Real Estate Co., Ltd. | 5,200 | 164,169 |
| Heiwado Co., Ltd. | 24,300 | 420,637 |
| Hikari Tsushin, Inc. | 2,950 | 454,754 |
| Hirata Corp. | 2,000 | 121,943 |
| Hirose Electric Co., Ltd. | 5,039 | 842,676 |
| Hisamitsu Pharmaceutical Co., Inc. | 12,700 | 433,281 |
| Hitachi Transport System Ltd. | 11,700 | 460,935 |
| Hitachi Zosen Corp. | 94,900 | 744,104 |
| Hogy Medical Co., Ltd. | 5,400 | 148,051 |
| Hokkoku Financial Holdings, Inc. | 8,500 | 148,146 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Hokuetsu Corp. | 111,100 | 734,093 |
| Hokuhoku Financial Group, Inc. | 56,300 | 402,756 |
| Hokuriku Electric Power Co. | 158,300 | 753,788 |
| Horiba Ltd. | 10,000 | 655,611 |
| Hoshizaki Corp. | 8,300 | 697,955 |
| Hosiden Corp. | 52,400 | 552,479 |
| House Foods Group, Inc. | 19,800 | 568,098 |
| Hulic Co., Ltd. | 52,400 | 503,852 |
| Ibiden Co., Ltd. | 17,900 | 1,075,538 |
| Ichikoh Industries Ltd. | 17,500 | 86,817 |
| IDOM, Inc. | 26,200 | 179,449 |
| Iino Kaiun Kaisha Ltd. | 49,100 | 236,804 |
| Inaba Denki Sangyo Co., Ltd. | 28,200 | 676,450 |
| Inabata & Co., Ltd. | 48,500 | 717,981 |
| Inageya Co., Ltd. | 11,700 | 141,410 |
| INFRONEER Holdings, Inc. | 127,284 | 1,054,232 |
| Internet Initiative Japan, Inc. | 10,700 | 374,375 |
| Iriso Electronics Co., Ltd. | 4,200 | 192,950 |
| Ishihara Sangyo Kaisha Ltd. | 30,400 | 335,191 |
| Ito En Ltd. | 10,200 | 679,378 |
| Itochu Enex Co., Ltd. | 51,800 | 457,053 |
| Itochu Techno-Solutions Corp. | 17,000 | 537,017 |
| Itoham Yonekyu Holdings, Inc. | 130,000 | 792,684 |
| Iwatani Corp. | 17,100 | 1,010,018 |
| Izumi Co., Ltd. | 22,800 | 691,267 |
| Jaccs Co., Ltd. | 13,500 | 360,050 |
| JAFCO Group Co., Ltd. | 4,200 | 266,100 |
| Japan Airport Terminal Co., Ltd. * | 6,900 | 342,292 |
| Japan Aviation Electronics Industry Ltd. | 27,300 | 452,656 |
| Japan Display, Inc. *(b) | 847,500 | 253,681 |
| Japan Lifeline Co., Ltd. | 9,200 | 99,067 |
| Japan Metropolitan Fund Invest | 518 | 475,793 |
| Japan Petroleum Exploration Co., Ltd. | 23,200 | 422,186 |
| Japan Post Bank Co., Ltd. | 81,800 | 638,205 |
| Japan Prime Realty Investment Corp. | 53 | 194,399 |
| Japan Real Estate Investment Corp. | 73 | 447,434 |
| JEOL Ltd. | 2,400 | 181,892 |
| J-Oil Mills, Inc. | 14,800 | 238,548 |
| Joshin Denki Co., Ltd. | 18,700 | 389,229 |
| Joyful Honda Co., Ltd. | 30,300 | 416,720 |
| Juki Corp. | 30,800 | 229,931 |
| Juroku Financial Group, Inc. | 10,900 | 197,966 |
| JVCKenwood Corp. | 236,700 | 408,359 |
| Kadokawa Corp. | 7,000 | 369,604 |
| Kaga Electronics Co., Ltd. | 13,400 | 368,326 |
| Kagome Co., Ltd. | 15,700 | 398,400 |
| Kakaku.com, Inc. | 9,000 | 298,664 |
| Kaken Pharmaceutical Co., Ltd. | 11,100 | 437,826 |
| Kameda Seika Co., Ltd. | 4,000 | 156,442 |
| Kamigumi Co., Ltd. | 44,100 | 887,951 |
| Kanamoto Co., Ltd. | 18,900 | 404,853 |
| Kandenko Co., Ltd. | 74,300 | 575,961 |
| Kanematsu Corp. | 64,500 | 749,050 |
| Kansai Paint Co., Ltd. | 30,900 | 715,520 |
| Kanto Denka Kogyo Co., Ltd. | 14,200 | 130,615 |
| Kato Sangyo Co., Ltd. | 20,600 | 580,810 |
| Kawasaki Kisen Kaisha Ltd. * | 31,700 | 1,527,952 |
| Keihan Holdings Co., Ltd. | 22,900 | 602,421 |
| Keikyu Corp. | 56,500 | 637,682 |
| Keisei Electric Railway Co., Ltd. | 23,100 | 743,377 |
| Keiyo Co., Ltd. | 26,400 | 192,268 |
| KH Neochem Co., Ltd. | 9,800 | 251,868 |
| Kintetsu World Express, Inc. | 16,700 | 401,078 |
| Kissei Pharmaceutical Co., Ltd. | 9,300 | 186,031 |
| Kitz Corp. | 53,700 | 359,243 |
| Kobayashi Pharmaceutical Co., Ltd. | 5,900 | 472,389 |
| Koei Tecmo Holdings Co., Ltd. | 2,480 | 115,440 |
| Kohnan Shoji Co., Ltd. | 14,600 | 456,591 |
68
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Kokuyo Co., Ltd. | 40,800 | 620,930 |
| Komeri Co., Ltd. | 16,900 | 390,276 |
| Konami Holdings Corp. | 13,400 | 737,409 |
| Kose Corp. | 4,000 | 464,503 |
| Kumagai Gumi Co., Ltd. | 22,300 | 551,957 |
| Kumiai Chemical Industry Co., Ltd. | 20,900 | 155,850 |
| Kura Sushi, Inc. | 5,000 | 161,779 |
| Kurabo Industries Ltd. | 17,800 | 296,566 |
| Kureha Corp. | 7,900 | 513,404 |
| Kurita Water Industries Ltd. | 22,300 | 1,101,431 |
| Kusuri no Aoki Holdings Co., Ltd. | 2,800 | 186,383 |
| KYB Corp. | 14,700 | 393,384 |
| Kyoei Steel Ltd. | 19,600 | 241,843 |
| KYORIN Holdings, Inc. | 17,500 | 268,816 |
| Kyoritsu Maintenance Co., Ltd. | 6,600 | 247,311 |
| Kyowa Exeo Corp. | 36,500 | 843,664 |
| Kyowa Kirin Co., Ltd. | 29,700 | 976,775 |
| Kyudenko Corp. | 17,600 | 558,274 |
| Kyushu Financial Group, Inc. | 85,600 | 288,264 |
| Lawson, Inc. | 16,300 | 788,261 |
| Leopalace21 Corp. * | 325,100 | 700,327 |
| Life Corp. | 9,600 | 315,114 |
| Lintec Corp. | 24,400 | 544,692 |
| Lion Corp. | 45,300 | 754,444 |
| M3, Inc. | 4,600 | 271,079 |
| Mabuchi Motor Co., Ltd. | 15,100 | 520,622 |
| Macnica Fuji Electronics Holdings, Inc. | 30,700 | 721,746 |
| Makino Milling Machine Co., Ltd. | 11,650 | 419,145 |
| Mandom Corp. | 14,800 | 215,145 |
| Maruha Nichiro Corp. | 32,300 | 728,712 |
| Marui Group Co., Ltd. | 40,900 | 802,610 |
| Maruichi Steel Tube Ltd. | 20,800 | 472,612 |
| Max Co., Ltd. | 14,400 | 229,337 |
| Maxell Holdings Ltd. | 28,900 | 347,761 |
| MCJ Co., Ltd. | 22,200 | 249,943 |
| Mebuki Financial Group, Inc. | 276,100 | 565,319 |
| Megmilk Snow Brand Co., Ltd. | 35,300 | 683,051 |
| Meidensha Corp. | 19,900 | 418,881 |
| Meitec Corp. | 5,600 | 336,826 |
| Menicon Co., Ltd. | 3,400 | 127,650 |
| Ministop Co., Ltd. | 11,400 | 138,950 |
| Mirait Holdings Corp. | 39,400 | 757,769 |
| Mitsubishi HC Capital, Inc. | 144,500 | 724,552 |
| Mitsubishi Logisnext Co., Ltd. | 31,000 | 285,085 |
| Mitsubishi Logistics Corp. | 18,400 | 513,828 |
| Mitsui E&S Holdings Co., Ltd. * | 90,700 | 462,551 |
| Mitsui-Soko Holdings Co., Ltd. | 12,600 | 252,722 |
| Miura Co., Ltd. | 7,600 | 292,337 |
| Mixi, Inc. | 25,800 | 591,189 |
| Mizuho Leasing Co., Ltd. | 7,000 | 216,277 |
| Mizuno Corp. | 16,600 | 386,335 |
| Modec, Inc. | 10,400 | 178,881 |
| MonotaRO Co., Ltd. | 4,700 | 107,121 |
| Morinaga & Co., Ltd. | 13,000 | 459,403 |
| Morinaga Milk Industry Co., Ltd. | 17,700 | 1,037,303 |
| MOS Food Services, Inc. | 6,400 | 178,460 |
| Musashi Seimitsu Industry Co., Ltd. | 21,200 | 399,007 |
| Nabtesco Corp. | 20,500 | 665,298 |
| Nachi-Fujikoshi Corp. | 10,700 | 405,318 |
| Nankai Electric Railway Co., Ltd. | 30,900 | 613,265 |
| NEC Networks & System Integration Corp. | 16,200 | 260,666 |
| NET One Systems Co., Ltd. | 12,300 | 403,358 |
| Nexon Co., Ltd. | 28,322 | 482,073 |
| Nichias Corp. | 22,300 | 546,015 |
| Nichicon Corp. | 23,800 | 225,231 |
| Nichiha Corp. | 11,300 | 324,838 |
| Nichi-iko Pharmaceutical Co., Ltd. | 29,200 | 221,680 |
| Nichireki Co., Ltd. | 8,700 | 103,235 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Nifco, Inc. | 23,200 | 740,069 |
| Nihon Kohden Corp. | 17,500 | 556,837 |
| Nihon M&A Center Holdings, Inc. | 4,500 | 138,170 |
| Nihon Parkerizing Co., Ltd. | 33,200 | 331,248 |
| Nihon Unisys Ltd. | 16,200 | 455,168 |
| Nikkiso Co., Ltd. | 26,900 | 238,201 |
| Nikkon Holdings Co., Ltd. | 26,600 | 519,693 |
| Nippn Corp. | 31,900 | 457,086 |
| Nippo Corp. | 21,300 | 753,507 |
| Nippon Building Fund, Inc. | 82 | 532,749 |
| Nippon Chemi-Con Corp. * | 11,900 | 223,628 |
| Nippon Denko Co., Ltd. | 62,100 | 200,450 |
| Nippon Densetsu Kogyo Co., Ltd. | 17,400 | 268,202 |
| Nippon Gas Co., Ltd. | 23,900 | 296,446 |
| Nippon Kayaku Co., Ltd. | 79,000 | 832,034 |
| Nippon Koei Co., Ltd. | 7,200 | 218,677 |
| Nippon Paint Holdings Co., Ltd. | 38,600 | 413,013 |
| Nippon Prologis REIT, Inc. | 73 | 243,822 |
| Nippon Sanso Holdings Corp. | 28,100 | 663,401 |
| Nippon Sheet Glass Co., Ltd. * | 130,900 | 731,540 |
| Nippon Shinyaku Co., Ltd. | 5,200 | 416,605 |
| Nippon Signal Co., Ltd. | 27,800 | 240,399 |
| Nippon Soda Co., Ltd. | 13,800 | 414,631 |
| Nippon Suisan Kaisha Ltd. | 190,100 | 1,080,396 |
| Nippon Television Holdings, Inc. | 12,700 | 136,825 |
| Nippon Thompson Co., Ltd. | 20,400 | 104,961 |
| Nippon Yakin Kogyo Co., Ltd. | 10,510 | 253,927 |
| Nipro Corp. | 49,000 | 497,922 |
| Nishimatsu Construction Co., Ltd. | 28,100 | 810,549 |
| Nishimatsuya Chain Co., Ltd. | 16,300 | 207,977 |
| Nishi-Nippon Financial Holdings, Inc. | 59,700 | 348,107 |
| Nishi-Nippon Railroad Co., Ltd. | 26,100 | 642,929 |
| Nishio Rent All Co., Ltd. | 11,500 | 284,370 |
| Nissan Chemical Corp. | 16,300 | 907,236 |
| Nissha Co., Ltd. | 19,900 | 326,004 |
| Nisshinbo Holdings, Inc. | 110,200 | 850,581 |
| Nissin Electric Co., Ltd. | 17,300 | 214,401 |
| Nitta Corp. | 7,700 | 176,524 |
| Nittetsu Mining Co., Ltd. | 5,100 | 293,760 |
| Nitto Boseki Co., Ltd. | 6,200 | 198,726 |
| Nitto Kogyo Corp. | 13,800 | 205,336 |
| Noevir Holdings Co., Ltd | 2,300 | 112,504 |
| NOF Corp. | 12,300 | 617,295 |
| Nojima Corp. | 17,600 | 385,986 |
| Nomura Co., Ltd. | 26,000 | 256,345 |
| Nomura Real Estate Master Fund, Inc. | 258 | 386,346 |
| Nomura Research Institute Ltd. | 25,380 | 1,016,064 |
| North Pacific Bank Ltd. | 85,800 | 177,569 |
| NS Solutions Corp. | 9,100 | 305,881 |
| NSD Co., Ltd. | 12,200 | 232,465 |
| Obic Co., Ltd. | 2,300 | 425,324 |
| Ohsho Food Service Corp. | 2,700 | 141,784 |
| Okamoto Industries, Inc. | 5,800 | 203,533 |
| Okamura Corp. | 41,400 | 546,351 |
| Okasan Securities Group, Inc. | 59,800 | 204,536 |
| Oki Electric Industry Co., Ltd. | 75,800 | 622,631 |
| OKUMA Corp. | 11,900 | 567,018 |
| Okumura Corp. | 20,900 | 539,732 |
| Okuwa Co., Ltd. | 23,800 | 228,652 |
| Onward Holdings Co., Ltd. | 163,600 | 483,860 |
| Open House Co., Ltd. | 9,700 | 618,599 |
| Oracle Corp., Japan | 3,300 | 312,261 |
| Orient Corp. | 193,800 | 265,959 |
| Orix JREIT, Inc. | 149 | 247,207 |
| Osaka Soda Co., Ltd. | 9,800 | 249,048 |
| OSG Corp. | 26,800 | 445,870 |
| Outsourcing, Inc. | 17,200 | 329,953 |
| Pacific Industrial Co., Ltd. | 28,300 | 288,250 |
69
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Paramount Bed Holdings Co., Ltd. | 12,500 | 233,239 |
| Park24 Co., Ltd. * | 31,000 | 474,851 |
| Pasona Group, Inc. | 5,800 | 161,969 |
| Penta-Ocean Construction Co., Ltd. | 126,100 | 868,946 |
| Pigeon Corp. | 13,500 | 312,608 |
| Pilot Corp. | 12,100 | 443,753 |
| Piolax, Inc. | 13,603 | 195,685 |
| Plenus Co., Ltd. | 13,800 | 234,926 |
| Pola Orbis Holdings, Inc. | 17,400 | 371,520 |
| Press Kogyo Co., Ltd. | 139,700 | 407,051 |
| Prima Meat Packers Ltd. | 15,300 | 359,603 |
| Qol Holdings Co., Ltd. | 13,600 | 202,027 |
| Raito Kogyo Co., Ltd. | 15,800 | 280,958 |
| Raiznext Corp. | 23,700 | 256,158 |
| Relia, Inc. | 17,400 | 178,304 |
| Relo Group, Inc. | 12,300 | 255,838 |
| Rengo Co., Ltd. | 112,500 | 853,102 |
| Resorttrust, Inc. | 18,000 | 318,981 |
| Restar Holdings Corp. | 17,000 | 284,141 |
| Retail Partners Co., Ltd. | 21,900 | 228,932 |
| Rinnai Corp. | 8,400 | 862,449 |
| Rohto Pharmaceutical Co., Ltd. | 18,300 | 559,132 |
| Round One Corp. | 23,100 | 277,956 |
| Royal Holdings Co., Ltd. * | 11,800 | 214,195 |
| Ryobi Ltd. | 39,300 | 411,997 |
| Ryosan Co., Ltd. | 28,300 | 583,401 |
| Ryoyo Electro Corp. | 6,500 | 135,356 |
| S Foods, Inc. | 11,400 | 330,111 |
| Saibu Gas Co., Ltd. | 8,000 | 163,354 |
| Saizeriya Co., Ltd. | 12,600 | 340,119 |
| Sakata INX Corp. | 26,100 | 252,131 |
| Sakata Seed Corp. | 5,200 | 156,884 |
| SAMTY Co., Ltd. | 6,000 | 133,425 |
| San-A Co., Ltd. | 8,800 | 317,094 |
| Sanden Holdings Corp. * | 56,100 | 138,340 |
| Sangetsu Corp. | 27,600 | 379,789 |
| Sanken Electric Co., Ltd. | 6,700 | 352,247 |
| Sanki Engineering Co., Ltd. | 27,300 | 343,854 |
| Sankyo Co., Ltd. | 15,800 | 383,496 |
| Sanoh Industrial Co., Ltd. | 17,900 | 158,556 |
| Sanrio Co., Ltd. | 11,100 | 248,703 |
| Sanwa Holdings Corp. | 73,300 | 854,946 |
| Sanyo Chemical Industries Ltd. | 5,250 | 259,952 |
| Sanyo Denki Co., Ltd. | 3,200 | 183,841 |
| Sanyo Special Steel Co., Ltd. | 14,600 | 240,770 |
| Sapporo Holdings Ltd. | 33,700 | 731,194 |
| Sato Holdings Corp. | 9,500 | 218,972 |
| Sawai Group Holdings Co., Ltd. | 12,940 | 570,838 |
| SCREEN Holdings Co., Ltd. | 8,800 | 817,953 |
| SCSK Corp. | 25,428 | 514,588 |
| Sega Sammy Holdings, Inc. | 67,900 | 965,567 |
| Seiko Holdings Corp. | 20,600 | 434,437 |
| Seiren Co., Ltd. | 15,500 | 312,825 |
| Sekisui Jushi Corp. | 8,700 | 162,078 |
| Senko Group Holdings Co., Ltd. | 63,900 | 568,367 |
| Senshu Ikeda Holdings, Inc. | 132,900 | 186,717 |
| Seven Bank Ltd. | 184,500 | 390,023 |
| Sharp Corp. | 36,100 | 425,806 |
| Shibaura Machine Co., Ltd. | 10,200 | 237,772 |
| Shibuya Corp. | 5,900 | 155,871 |
| Shima Seiki Manufacturing Ltd. | 11,000 | 211,514 |
| Shindengen Electric Manufacturing Co., Ltd. * | 6,200 | 220,766 |
| Shinko Electric Industries Co., Ltd. | 11,100 | 447,187 |
| Shinmaywa Industries Ltd. | 48,400 | 395,577 |
| Shinsei Bank Ltd. | 37,200 | 614,346 |
| Ship Healthcare Holdings, Inc. | 22,000 | 577,860 |
| SHO-BOND Holdings Co., Ltd. | 5,000 | 209,447 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Shochiku Co., Ltd. * | 1,450 | 157,778 |
| Shoei Foods Corp. | 4,900 | 168,925 |
| Showa Sangyo Co., Ltd. | 14,200 | 353,255 |
| Siix Corp. | 21,000 | 232,637 |
| SKY Perfect JSAT Holdings, Inc. | 76,300 | 286,146 |
| Skylark Holdings Co., Ltd. * | 64,700 | 876,659 |
| Sodick Co., Ltd. | 13,000 | 100,215 |
| Sohgo Security Services Co., Ltd. | 17,600 | 752,993 |
| Sotetsu Holdings, Inc. | 25,000 | 483,571 |
| Square Enix Holdings Co., Ltd. | 12,100 | 662,839 |
| St. Marc Holdings Co., Ltd. | 12,100 | 162,685 |
| Star Micronics Co., Ltd. | 11,900 | 156,183 |
| Starts Corp., Inc. | 10,800 | 259,532 |
| Sugi Holdings Co., Ltd. | 10,100 | 723,173 |
| Sumitomo Bakelite Co., Ltd. | 11,500 | 516,841 |
| Sumitomo Dainippon Pharma Co., Ltd. | 40,300 | 569,905 |
| Sumitomo Densetsu Co., Ltd. | 5,400 | 103,656 |
| Sumitomo Mitsui Construction Co., Ltd. | 145,380 | 616,940 |
| Sumitomo Osaka Cement Co., Ltd. | 27,300 | 764,970 |
| Sundrug Co., Ltd. | 26,300 | 769,698 |
| Suruga Bank Ltd. | 136,200 | 499,637 |
| Swcc Showa Holdings Co., Ltd. | 10,800 | 210,437 |
| Tadano Ltd. | 59,200 | 646,468 |
| Taikisha Ltd. | 14,900 | 425,553 |
| Taisho Pharmaceutical Holdings Co., Ltd. | 10,900 | 584,905 |
| Taiyo Holdings Co., Ltd. | 6,200 | 165,753 |
| Takara Holdings, Inc. | 46,500 | 636,039 |
| Takara Leben Co., Ltd. | 38,800 | 105,735 |
| Takara Standard Co., Ltd. | 26,100 | 346,987 |
| Takasago Thermal Engineering Co., Ltd. | 32,700 | 598,205 |
| Takeuchi Manufacturing Co., Ltd. | 11,500 | 295,255 |
| Takuma Co., Ltd. | 17,200 | 225,000 |
| Tamura Corp. (b) | 37,000 | 254,248 |
| Tanseisha Co., Ltd. | 14,200 | 116,447 |
| TBS Holdings, Inc. | 14,600 | 230,936 |
| TechnoPro Holdings, Inc. | 12,200 | 389,903 |
| T-Gaia Corp. | 14,700 | 261,926 |
| The 77 Bank Ltd. | 21,500 | 219,333 |
| The Awa Bank Ltd. | 9,300 | 173,235 |
| The Bank of Kyoto Ltd. | 8,000 | 359,786 |
| The Chiba Bank Ltd. | 120,000 | 743,785 |
| The Chugoku Bank Ltd. | 43,400 | 314,831 |
| The Gunma Bank Ltd. | 143,500 | 443,026 |
| The Hachijuni Bank Ltd. | 131,400 | 439,164 |
| The Hyakugo Bank Ltd. | 53,200 | 154,216 |
| The Iyo Bank Ltd. | 63,700 | 311,654 |
| The Japan Steel Works Ltd. | 19,400 | 569,919 |
| The Japan Wool Textile Co., Ltd. | 27,800 | 222,021 |
| The Kiyo Bank Ltd. | 15,400 | 202,234 |
| The Musashino Bank Ltd. | 13,700 | 215,197 |
| The Nanto Bank Ltd. | 11,400 | 196,530 |
| The Nisshin Oillio Group Ltd. | 18,000 | 477,146 |
| The Ogaki Kyoritsu Bank Ltd. | 10,300 | 171,166 |
| The Okinawa Electric Power Co., Inc. | 33,182 | 407,090 |
| The San-in Godo Bank Ltd. | 49,200 | 240,782 |
| The Shiga Bank Ltd. | 11,900 | 192,559 |
| The Shizuoka Bank Ltd. | 95,800 | 771,418 |
| The Sumitomo Warehouse Co., Ltd. | 24,400 | 392,272 |
| THK Co., Ltd. | 30,100 | 647,259 |
| TKC Corp. | 6,400 | 196,200 |
| Toa Corp. (b) | 10,200 | 223,846 |
| Toagosei Co., Ltd. | 52,500 | 586,744 |
| Tocalo Co., Ltd. | 8,600 | 105,460 |
| Toda Corp. | 102,400 | 645,084 |
| Toei Co., Ltd. | 1,100 | 215,778 |
| Toho Co., Ltd. | 19,300 | 906,794 |
| Toho Zinc Co., Ltd. | 12,800 | 349,880 |
| Tokai Carbon Co., Ltd. | 41,800 | 546,775 |
70
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| TOKAI Holdings Corp. | 48,400 | 367,516 |
| Tokai Rika Co., Ltd. | 50,100 | 701,284 |
| Tokai Tokyo Financial Holdings, Inc. | 65,100 | 225,682 |
| Token Corp. | 4,450 | 362,856 |
| Tokuyama Corp. | 40,400 | 691,824 |
| Tokyo Century Corp. | 8,500 | 486,675 |
| Tokyo Ohka Kogyo Co., Ltd. | 6,100 | 387,804 |
| Tokyo Seimitsu Co., Ltd. | 8,400 | 342,015 |
| Tokyo Steel Manufacturing Co., Ltd. | 39,900 | 443,997 |
| Tokyo Tatemono Co., Ltd. | 54,900 | 806,942 |
| Tokyu Construction Co., Ltd. | 67,900 | 480,114 |
| Tomy Co., Ltd. | 46,000 | 436,597 |
| Topcon Corp. | 27,300 | 486,732 |
| Toppan Forms Co., Ltd. | 29,600 | 284,570 |
| Topre Corp. | 39,500 | 456,898 |
| Toshiba TEC Corp. | 9,200 | 362,217 |
| Totetsu Kogyo Co., Ltd. | 13,900 | 302,429 |
| Towa Pharmaceutical Co., Ltd. | 9,000 | 231,379 |
| Toyo Construction Co., Ltd. | 49,500 | 247,780 |
| Toyo Ink SC Holdings Co., Ltd. | 30,000 | 528,334 |
| Toyo Tire Corp. | 44,000 | 731,650 |
| Toyobo Co., Ltd. | 62,200 | 746,856 |
| Toyota Boshoku Corp. | 53,900 | 1,036,338 |
| TPR Co., Ltd. | 31,100 | 396,297 |
| Trancom Co., Ltd. | 2,900 | 203,478 |
| Transcosmos, Inc. | 11,300 | 340,719 |
| Trend Micro, Inc. | 15,300 | 864,762 |
| Trusco Nakayama Corp. | 14,100 | 340,937 |
| TSI Holdings Co., Ltd. * | 130,500 | 395,766 |
| Tsubaki Nakashima Co., Ltd. | 15,800 | 221,247 |
| Tsubakimoto Chain Co. | 24,700 | 729,819 |
| Tsumura & Co. | 14,200 | 442,549 |
| TV Asahi Holdings Corp. | 12,000 | 182,102 |
| UACJ Corp. * | 26,230 | 607,939 |
| Uchida Yoko Co., Ltd. | 4,100 | 173,447 |
| Ulvac, Inc. | 14,200 | 796,691 |
| Unipres Corp. | 84,800 | 691,858 |
| United Arrows Ltd. | 23,400 | 468,725 |
| United Super Markets Holdings, Inc. | 59,900 | 546,758 |
| United Urban Investment Corp. | 211 | 263,024 |
| Unitika Ltd. * | 31,000 | 99,026 |
| Ushio, Inc. | 36,900 | 660,155 |
| USS Co., Ltd. | 26,500 | 427,135 |
| V Technology Co., Ltd. | 2,300 | 86,735 |
| Valor Holdings Co., Ltd. | 30,800 | 652,314 |
| Valqua Ltd. | 5,500 | 110,994 |
| VT Holdings Co., Ltd. | 54,900 | 245,649 |
| Wacoal Holdings Corp. | 28,900 | 578,759 |
| Wacom Co., Ltd. | 26,300 | 170,136 |
| Wakita & Co., Ltd. | 23,000 | 208,105 |
| Warabeya Nichiyo Holdings Co., Ltd. | 20,000 | 392,520 |
| Welcia Holdings Co., Ltd. | 18,900 | 705,564 |
| World Co., Ltd. * | 19,600 | 240,568 |
| Xebio Holdings Co., Ltd. | 33,800 | 314,113 |
| Yamabiko Corp. | 19,700 | 214,685 |
| Yamaguchi Financial Group, Inc. | 73,100 | 408,082 |
| Yamato Kogyo Co., Ltd. | 12,100 | 405,717 |
| Yamazen Corp. | 58,100 | 538,310 |
| Yaoko Co., Ltd. | 6,500 | 386,902 |
| Yellow Hat Ltd. | 15,200 | 247,651 |
| Yokogawa Bridge Holdings Corp. | 12,800 | 258,000 |
| Yokohama Reito Co., Ltd. | 26,600 | 203,404 |
| Yondoshi Holdings, Inc. | 11,100 | 168,384 |
| Yoshinoya Holdings Co., Ltd. | 19,000 | 370,469 |
| Yuasa Trading Co., Ltd. | 16,700 | 446,315 |
| Zenkoku Hosho Co., Ltd. | 4,700 | 227,126 |
| Zenrin Co., Ltd. | 14,300 | 131,851 |
| Zensho Holdings Co., Ltd. | 18,700 | 431,907 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Zeon Corp. | 51,300 | 608,622 |
| ZERIA Pharmaceutical Co., Ltd. | 9,200 | 164,701 |
| Zojirushi Corp. | 11,800 | 163,667 |
| ZOZO, Inc. | 5,600 | 179,752 |
| 221,592,942 | ||
| Luxembourg 0.0% | ||
| Espirito Santo Financial Group S.A. *(a) | 69,773 | 0 |
| Netherlands 1.7% | ||
| Accell Group N.V. * | 5,537 | 228,280 |
| Adyen N.V. * | 107 | 322,852 |
| AMG Advanced Metallurgical Group N.V. | 5,869 | 173,107 |
| Arcadis N.V. | 17,159 | 836,341 |
| ASM International N.V. | 2,640 | 1,194,823 |
| BE Semiconductor Industries N.V. | 6,130 | 560,072 |
| Corbion N.V. | 8,905 | 422,831 |
| Eurocommercial Properties N.V. CVA * | 13,532 | 315,832 |
| Flow Traders | 4,255 | 144,415 |
| Fugro NV * | 31,190 | 264,351 |
| GrandVision N.V. * | 7,814 | 256,537 |
| Heijmans N.V. CVA | 7,379 | 102,722 |
| IMCD N.V. | 4,054 | 900,169 |
| Intertrust N.V. * | 19,761 | 298,796 |
| JDE Peet's N.V. | 6,749 | 196,523 |
| Koninklijke BAM Groep N.V * | 208,972 | 606,530 |
| Koninklijke Vopak N.V. | 13,642 | 542,923 |
| OCI N.V. * | 14,720 | 417,290 |
| PostNL N.V. | 112,269 | 487,261 |
| Royal Boskalis Westminster N.V. | 33,991 | 1,013,755 |
| SBM Offshore N.V. | 47,695 | 753,022 |
| Sligro Food Group N.V. * | 20,905 | 560,023 |
| TKH Group N.V. | 11,053 | 629,657 |
| TomTom N.V. * | 19,730 | 169,552 |
| Van Lanschot Kempen N.V. CVA | 7,359 | 204,168 |
| Wereldhave N.V. | 18,662 | 289,691 |
| 11,891,523 | ||
| New Zealand 0.9% | ||
| Air New Zealand Ltd. * | 564,000 | 675,467 |
| Auckland International Airport Ltd. * | 85,161 | 488,133 |
| Chorus Ltd. | 90,404 | 412,840 |
| EBOS Group Ltd. | 26,444 | 687,481 |
| Fisher & Paykel Healthcare Corp., Ltd. | 22,269 | 498,904 |
| Freightways Ltd. | 25,447 | 236,147 |
| Genesis Energy Ltd. | 148,385 | 346,644 |
| Infratil Ltd. | 63,621 | 377,492 |
| Mercury NZ Ltd. | 99,138 | 435,995 |
| Meridian Energy Ltd. | 186,306 | 667,403 |
| Ryman Healthcare Ltd. | 16,878 | 174,674 |
| SKYCITY Entertainment Group Ltd. | 211,721 | 485,501 |
| The a2 Milk Co., Ltd. * | 35,496 | 167,202 |
| Z Energy Ltd. | 269,289 | 694,701 |
| 6,348,584 | ||
| Norway 1.7% | ||
| Aker A.S.A., A Shares | 6,374 | 587,495 |
| Aker BP A.S.A. | 21,493 | 824,727 |
| Aker Solutions A.S.A. * | 150,484 | 427,036 |
| Austevoll Seafood A.S.A. | 34,946 | 473,120 |
| Bakkafrost P/F | 4,490 | 415,343 |
| Bank Norwegian ASA | 22,253 | 275,532 |
| Borregaard A.S.A. | 15,233 | 369,910 |
| BW LPG Ltd. | 41,207 | 220,229 |
71
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| BW Offshore Ltd. | 51,788 | 168,651 |
| DNO A.S.A. * | 221,155 | 322,481 |
| Elkem A.S.A. * | 93,430 | 371,372 |
| Entra A.S.A. | 14,502 | 361,868 |
| Europris A.S.A. | 35,163 | 260,381 |
| Fjordkraft Holding A.S.A. | 16,799 | 100,018 |
| Frontline Ltd/Bermuda | 28,357 | 252,053 |
| Gjensidige Forsikring A.S.A. | 25,929 | 645,597 |
| Grieg Seafood A.S.A. * | 13,078 | 145,287 |
| Kongsberg Automotive A.S.A. * | 760,816 | 271,895 |
| Kongsberg Gruppen A.S.A. | 11,441 | 375,460 |
| Leroy Seafood Group A.S.A. | 56,768 | 516,117 |
| PGS A.S.A. * | 788,190 | 321,972 |
| Salmar A.S.A. | 7,019 | 535,483 |
| Schibsted A.S.A., A Shares | 3,944 | 203,767 |
| Schibsted A.S.A., B Shares | 5,571 | 251,516 |
| SpareBank 1 Nord Norge | 33,467 | 405,810 |
| SpareBank 1 SMN | 30,463 | 507,402 |
| SpareBank 1 SR Bank A.S.A. | 30,834 | 472,892 |
| Storebrand A.S.A. | 67,654 | 725,598 |
| TGS A.S.A. | 43,059 | 397,117 |
| Tomra Systems A.S.A. | 6,603 | 426,757 |
| Veidekke A.S.A. | 34,131 | 491,285 |
| XXL A.S.A. | 80,307 | 132,896 |
| 12,257,067 | ||
| Poland 1.0% | ||
| Alior Bank S.A. * | 56,221 | 887,214 |
| Asseco Poland S.A. | 29,595 | 728,815 |
| Bank Millennium S.A. * | 175,183 | 401,771 |
| Cyfrowy Polsat S.A. | 79,645 | 712,276 |
| Enea S.A. * | 281,930 | 715,714 |
| Eurocash S.A. | 72,714 | 179,523 |
| Jastrzebska Spolka Weglowa S.A. * | 45,106 | 586,973 |
| LPP S.A. | 102 | 366,363 |
| mBank S.A. * | 3,138 | 444,111 |
| Orange Polska S.A. * | 359,980 | 702,429 |
| Santander Bank Polska S.A. | 6,966 | 646,900 |
| Tauron Polska Energia S.A. * | 1,089,802 | 898,775 |
| 7,270,864 | ||
| Portugal 0.4% | ||
| Banco Espirito Santo S.A. *(a) | 320,558 | 0 |
| CTT-Correios de Portugal S.A. | 67,668 | 371,871 |
| EDP Renovaveis S.A. | 11,500 | 320,385 |
| Mota-Engil SGPS, S.A. * | 108,842 | 169,907 |
| NOS SGPS, S.A. | 129,147 | 503,718 |
| Redes Energeticas Nacionais SGPS, S.A. | 119,843 | 365,049 |
| Sonae SGPS, S.A. | 609,841 | 671,303 |
| The Navigator Co., S.A. | 133,474 | 521,691 |
| 2,923,924 | ||
| Republic of Korea 7.7% | ||
| AJ Networks Co., Ltd. | 25,670 | 123,204 |
| AK Holdings, Inc. | 8,452 | 192,103 |
| AMOREPACIFIC Group | 11,099 | 472,402 |
| Asiana Airlines, Inc. * | 22,950 | 443,335 |
| BGF retail Co., Ltd. | 2,634 | 365,915 |
| Binggrae Co., Ltd. | 2,919 | 139,186 |
| Celltrion, Inc. * | 1,706 | 293,705 |
| Cheil Worldwide, Inc. | 22,054 | 450,646 |
| Chong Kun Dang Pharmaceutical Corp. | 1,017 | 102,143 |
| CJ CGV Co., Ltd. * | 5,236 | 143,141 |
| CJ ENM Co., Ltd. | 3,401 | 514,407 |
| CJ Logistics Corp. * | 2,559 | 311,151 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Com2uS Corp. | 2,036 | 224,302 |
| Daehan Flour Mill Co., Ltd. | 892 | 125,320 |
| Daesang Corp. | 13,689 | 280,048 |
| Daewoo Engineering & Construction Co., Ltd. * | 107,208 | 573,983 |
| Daewoo Shipbuilding & Marine Engineering Co., Ltd. * | 23,158 | 514,362 |
| Daou Technology Inc. | 8,857 | 177,197 |
| DB HiTek Co., Ltd. | 5,934 | 293,307 |
| DGB Financial Group, Inc. | 84,071 | 744,938 |
| DL Holdings Co., Ltd. | 8,208 | 462,776 |
| Dongkuk Steel Mill Co., Ltd. | 56,988 | 831,772 |
| Dongwon Industries Co., Ltd. | 767 | 149,681 |
| Doosan Bobcat, Inc. * | 8,851 | 289,274 |
| Doosan Co., Ltd. | 7,950 | 703,406 |
| Doosan Heavy Industries & Construction Co., Ltd. * | 102,139 | 2,136,637 |
| Doosan Infracore Co., Ltd. * | 33,612 | 302,543 |
| Easy Holdings Co., Ltd. | 26,242 | 100,874 |
| Fila Holdings Corp. | 9,020 | 287,385 |
| Global & Yuasa Battery Co., Ltd. | 2,109 | 148,273 |
| Green Cross Corp. | 528 | 124,222 |
| Green Cross Holdings Corp. | 4,921 | 123,526 |
| GS Global Corp. * | 54,859 | 121,367 |
| GS Retail Co., Ltd. | 23,195 | 640,386 |
| Halla Holdings Corp. | 4,605 | 201,142 |
| Handsome Co., Ltd. | 5,964 | 215,494 |
| Hanjin Transportation Co., Ltd. | 7,229 | 215,147 |
| Hanmi Pharm Co., Ltd. | 445 | 100,590 |
| Hanon Systems | 31,555 | 390,906 |
| Hansol Chemical Co., Ltd. | 478 | 134,896 |
| Hansol Paper Co., Ltd. | 18,098 | 223,551 |
| Hanssem Co., Ltd. | 2,336 | 203,399 |
| Hanwha Aerospace Co., Ltd. | 11,599 | 448,006 |
| Hanwha General Insurance Co., Ltd. * | 135,507 | 524,974 |
| Hanwha Life Insurance Co., Ltd. | 302,419 | 901,130 |
| Harim Holdings Co., Ltd. | 35,454 | 294,086 |
| HDC Holdings Co., Ltd. | 23,232 | 210,223 |
| HDC Hyundai Development Co-Engineering & Construction, Class E | 22,931 | 502,861 |
| Hite Jinro Co., Ltd. | 7,297 | 217,761 |
| HMM Co., Ltd. * | 16,188 | 370,386 |
| Hotel Shilla Co., Ltd. | 6,885 | 515,735 |
| HS Industries Co., Ltd. | 19,132 | 110,227 |
| Huchems Fine Chemical Corp. | 8,370 | 189,707 |
| Hyosung Advanced Materials Corp. * | 1,287 | 786,091 |
| Hyosung Chemical Corp. * | 1,113 | 275,651 |
| Hyosung Corp. | 3,443 | 304,833 |
| Hyosung Heavy Industries Corp. * | 4,996 | 288,934 |
| Hyosung TNC Co., Ltd. | 1,106 | 568,613 |
| Hyundai Construction Equipment Co., Ltd. * | 12,287 | 425,284 |
| Hyundai Corp. | 15,986 | 252,311 |
| Hyundai Department Store Co., Ltd. | 7,544 | 535,655 |
| Hyundai Elevator Co., Ltd. | 5,400 | 224,239 |
| Hyundai Greenfood Co., Ltd. | 40,451 | 336,329 |
| Hyundai Home Shopping Network Corp. | 2,993 | 179,663 |
| Hyundai Mipo Dockyard Co., Ltd. * | 6,768 | 440,156 |
| Hyundai Wia Corp. | 14,597 | 1,054,134 |
| Innocean Worldwide, Inc. | 2,203 | 110,894 |
| Interpark Holdings Corp. | 66,634 | 382,299 |
| INTOPS Co., Ltd. | 4,102 | 81,819 |
| IS Dongseo Co., Ltd. | 4,852 | 188,134 |
| JB Financial Group Co., Ltd. | 70,489 | 535,857 |
| Kakao Corp. | 4,063 | 437,115 |
| Kangwon Land, Inc. * | 29,198 | 694,752 |
72
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| KCC Corp. | 2,250 | 643,268 |
| KEPCO Plant Service & Engineering Co., Ltd. | 9,468 | 338,905 |
| KIWOOM Securities Co., Ltd. | 1,075 | 96,913 |
| Kolon Corp. | 8,358 | 253,748 |
| Kolon Industries, Inc. | 12,953 | 991,104 |
| Korea Aerospace Industries Ltd. | 12,789 | 336,024 |
| Korea Electric Terminal Co., Ltd. | 3,124 | 202,161 |
| Korea Investment Holdings Co., Ltd. | 6,012 | 449,646 |
| Korea Petrochemical Ind Co., Ltd. | 1,660 | 263,866 |
| Korean Reinsurance Co. | 55,046 | 455,834 |
| Kumho Petrochemical Co., Ltd. | 4,242 | 624,156 |
| Kumho Tire Co., Inc. * | 59,164 | 270,512 |
| KUMHOE&C Co., Ltd. | 11,954 | 123,562 |
| Kwang Dong Pharmaceutical Co., Ltd. | 14,950 | 99,486 |
| LF Corp. | 19,597 | 307,103 |
| LG Hausys Ltd. | 5,315 | 316,919 |
| LG HelloVision Co., Ltd. | 37,872 | 224,516 |
| LG Innotek Co., Ltd. | 5,151 | 925,926 |
| Lotte Chilsung Beverage Co., Ltd. | 1,604 | 200,282 |
| Lotte Corp. | 6,801 | 190,495 |
| LOTTE Fine Chemical Co., Ltd. | 6,696 | 488,861 |
| Lotte Food Co., Ltd. | 293 | 95,755 |
| LOTTE Himart Co., Ltd. | 17,954 | 426,721 |
| LS Corp. | 13,881 | 744,225 |
| LS Electric Co., Ltd. | 6,607 | 334,385 |
| LX International Corp. | 30,667 | 714,836 |
| Mando Corp. * | 14,362 | 770,896 |
| Meritz Financial Group, Inc. | 18,044 | 516,117 |
| Meritz Fire & Marine Insurance Co., Ltd. | 41,082 | 976,508 |
| Meritz Securities Co., Ltd. | 79,794 | 318,847 |
| Mirae Asset Daewoo Co., Ltd. | 39,356 | 293,617 |
| NCSoft Corp. | 919 | 493,786 |
| Netmarble Corp. | 1,007 | 106,635 |
| Nexen Tire Corp. | 32,497 | 210,685 |
| NH Investment & Securities Co., Ltd. | 29,180 | 329,581 |
| NHN Corp. * | 1,731 | 118,607 |
| NICE Holdings Co., Ltd. | 7,923 | 114,712 |
| NongShim Co., Ltd. | 1,476 | 357,890 |
| OCI Co., Ltd. * | 7,891 | 874,271 |
| Orion Corp/Republic of Korea | 4,035 | 408,075 |
| Ottogi Corp. | 444 | 182,895 |
| Pan Ocean Co., Ltd. | 51,875 | 268,422 |
| Partron Co., Ltd. | 22,562 | 181,180 |
| Poongsan Corp. | 15,800 | 447,660 |
| S&T Motiv Co., Ltd. | 3,395 | 146,587 |
| S-1 Corp. | 5,987 | 426,850 |
| Samsung Card Co., Ltd. | 14,041 | 412,269 |
| Samsung Engineering Co., Ltd. * | 28,661 | 609,591 |
| Samsung Heavy Industries Co., Ltd. * | 155,944 | 852,204 |
| Samsung Securities Co., Ltd. | 10,124 | 411,576 |
| SAMT Co., Ltd. | 39,059 | 175,604 |
| Samyang Corp. | 2,229 | 130,425 |
| Samyang Holding Corp. | 4,299 | 378,970 |
| Seah Besteel Corp. | 13,562 | 251,624 |
| Seohan Co., Ltd. | 80,744 | 133,426 |
| Seoul Semiconductor Co., Ltd. | 13,226 | 169,368 |
| Seoyon Co., Ltd. | 11,302 | 152,182 |
| Seoyon E-Hwa Co., Ltd. | 28,533 | 189,066 |
| SFA Engineering Corp. | 6,183 | 186,999 |
| Shinsegae, Inc. | 2,914 | 619,843 |
| SK Chemicals Co., Ltd. | 1,194 | 184,481 |
| SK Dicovery Co., Ltd. | 4,821 | 196,783 |
| SK Gas Ltd. | 3,088 | 365,072 |
| SK Materials Co., Ltd. | 389 | 127,344 |
| SK Networks Co., Ltd. | 218,326 | 951,047 |
| SKC Co., Ltd. | 3,121 | 479,829 |
| SL Corp. | 7,659 | 215,800 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| SSANGYONG C&E Co., Ltd. | 31,049 | 209,275 |
| Sungwoo Hitech Co., Ltd. | 71,073 | 367,721 |
| Taekwang Industrial Co., Ltd. | 601 | 514,480 |
| Tongyang, Inc. | 147,067 | 211,029 |
| Unid Co., Ltd. | 1,513 | 151,299 |
| WONIK IPS Co., Ltd. | 4,811 | 166,974 |
| Young Poong Corp. | 413 | 242,506 |
| Youngone Corp. | 12,145 | 464,850 |
| Yuhan Corp. | 5,664 | 290,575 |
| 54,455,143 | ||
| Singapore 1.5% | ||
| Ascendas Real Estate Investment Trust | 262,121 | 600,370 |
| Ascott Residence Trust | 280,200 | 214,257 |
| CapitaLand Integrated Commercial Trust | 398,301 | 634,277 |
| City Developments Ltd. | 134,900 | 732,299 |
| First Resources Ltd. | 136,700 | 180,332 |
| Genting Singapore Ltd. | 1,329,500 | 768,720 |
| Golden Agri-Resources Ltd. | 6,523,200 | 1,279,360 |
| Keppel Infrastructure Trust | 712,700 | 280,112 |
| Mapletree Commercial Trust | 155,392 | 251,350 |
| Mapletree Industrial Trust | 106,966 | 218,357 |
| Mapletree Logistics Trust | 159,530 | 239,221 |
| Mapletree North Asia Commercial Trust | 294,162 | 222,894 |
| NetLink NBN Trust | 215,200 | 162,709 |
| SATS Ltd. * | 140,449 | 436,815 |
| Sembcorp Industries Ltd. | 426,700 | 636,840 |
| Sembcorp Marine Ltd. * | 2,983,860 | 174,909 |
| Singapore Exchange Ltd. | 74,800 | 536,818 |
| Singapore Press Holdings Ltd. (a) | 711,700 | 1,053,679 |
| Singapore Technologies Engineering Ltd. | 279,200 | 792,879 |
| StarHub Ltd. | 334,700 | 307,933 |
| Suntec Real Estate Investment Trust | 207,900 | 230,174 |
| UOL Group Ltd. | 82,401 | 441,952 |
| 10,396,257 | ||
| Spain 1.4% | ||
| Abengoa S.A., B Shares *(a) | 66,135,341 | 0 |
| Acerinox S.A. | 75,459 | 1,050,564 |
| Almirall S.A. | 10,798 | 160,574 |
| Applus Services S.A. | 51,215 | 463,572 |
| Atresmedia Corp de Medios de Comunicaion S.A. * | 28,081 | 114,465 |
| Caja de Ahorros del Mediterraneo *(a) | 5,382 | 0 |
| Cellnex Telecom S.A. | 6,165 | 379,146 |
| Cia de Distribucion Integral Logista Holdings S.A. | 17,469 | 372,311 |
| Cie Automotive S.A. | 11,295 | 307,448 |
| Construcciones y Auxiliar de Ferrocarriles S.A. * | 4,657 | 205,151 |
| Ebro Foods S.A. | 26,067 | 517,090 |
| Ence Energia y Celulosa S.A. * | 53,319 | 137,080 |
| FAES FARMA S.A. | 47,987 | 195,709 |
| Gestamp Automocion S.A. * | 98,106 | 438,639 |
| Grupo Catalana Occidente S.A. | 10,798 | 383,836 |
| Indra Sistemas S.A. * | 25,096 | 303,519 |
| Inmobiliaria Colonial Socimi S.A. | 22,046 | 214,330 |
| Mediaset Espana Comunicacion S.A. * | 93,115 | 484,384 |
| Melia Hotels International S.A. * | 42,691 | 315,129 |
| Merlin Properties Socimi S.A. | 37,778 | 409,124 |
| Obrascon Huarte Lain S.A. * | 319,685 | 260,167 |
| Prosegur Cash S.A. | 171,787 | 117,994 |
| Prosegur Cia de Seguridad S.A. | 157,878 | 448,012 |
| Sacyr S.A. | 145,320 | 414,226 |
| Siemens Gamesa Renewable Energy S.A. * | 19,105 | 518,425 |
| Tecnicas Reunidas S.A. *(b) | 18,374 | 166,165 |
73
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Unicaja Banco S.A. | 569,609 | 609,463 |
| Viscofan S.A. | 7,065 | 483,086 |
| Zardoya Otis S.A. | 36,169 | 290,826 |
| 9,760,435 | ||
| Sweden 3.4% | ||
| AAK AB | 25,115 | 549,320 |
| AddTech AB, B Shares | 12,419 | 277,840 |
| AFRY AB | 13,769 | 409,725 |
| Arjo AB, B Shares | 29,238 | 398,726 |
| Attendo AB * | 39,138 | 168,164 |
| Axfood AB | 23,993 | 588,264 |
| Beijer Ref AB | 13,166 | 270,179 |
| Betsson AB, Class B | 36,451 | 254,429 |
| Bilia AB, A Shares | 24,792 | 440,838 |
| BillerudKorsnas AB | 46,726 | 978,721 |
| Bonava AB, B Shares | 33,625 | 332,188 |
| Bravida Holding AB | 31,833 | 478,811 |
| Castellum AB | 24,763 | 660,024 |
| Clas Ohlson AB, B Shares | 19,825 | 213,450 |
| Cloetta AB, B Shares | 67,876 | 215,613 |
| Concentric AB | 8,182 | 240,809 |
| Coor Service Management Holding AB | 27,490 | 267,057 |
| Dometic Group AB | 44,628 | 650,920 |
| Dustin Group AB | 11,057 | 135,316 |
| Electrolux Professional AB, B Shares * | 42,910 | 331,524 |
| Elekta AB, B Shares | 33,525 | 390,380 |
| Evolution AB | 786 | 127,601 |
| Fabege AB | 16,955 | 286,989 |
| Fastighets AB Balder, B Shares * | 3,555 | 257,766 |
| Fingerprint Cards AB, Class B * | 37,213 | 89,133 |
| Getinge AB, B Shares | 26,672 | 1,193,621 |
| Granges AB | 27,077 | 295,326 |
| Hexpol AB | 47,975 | 561,435 |
| Holmen AB, B Shares | 14,322 | 635,841 |
| Indutrade AB | 18,601 | 542,246 |
| International Petroleum Corp. * | 36,511 | 203,908 |
| Intrum AB | 12,524 | 355,487 |
| Inwido AB | 12,612 | 231,226 |
| JM AB | 18,160 | 735,781 |
| Kinnevik AB, B Shares * | 16,865 | 661,965 |
| Kungsleden AB | 19,822 | 272,356 |
| LE Lundbergfortagen AB, B Shares | 9,136 | 526,720 |
| Lifco AB | 11,467 | 334,358 |
| Lindab International AB | 12,213 | 400,132 |
| Loomis AB | 26,083 | 704,314 |
| Mekonomen AB * | 11,994 | 247,198 |
| Modern Times Group MTG AB, B Shares * | 11,385 | 130,550 |
| Mycronic AB | 4,272 | 99,136 |
| NCC AB, B Shares | 29,283 | 507,368 |
| Nibe Industrier AB, B Shares | 49,329 | 733,703 |
| Nobia AB | 51,150 | 315,259 |
| Nolato AB, B Shares | 18,542 | 244,837 |
| Nordic Entertainment Group AB, B Shares * | 4,268 | 247,492 |
| Pandox AB * | 13,300 | 234,469 |
| Peab AB, Class B | 64,585 | 811,810 |
| Ratos AB, B Shares | 86,786 | 499,645 |
| Resurs Holding AB | 38,769 | 208,923 |
| Saab AB, B Shares | 23,249 | 648,140 |
| SAS AB * | 1,633,969 | 284,346 |
| Scandic Hotels Group AB *(b) | 79,073 | 382,475 |
| Sweco AB, B Shares | 19,137 | 304,725 |
| Swedish Orphan Biovitrum AB * | 13,106 | 356,160 |
| Tethys Oil AB | 17,374 | 126,493 |
| Thule Group AB | 8,405 | 485,645 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Wallenstam AB | 10,753 | 188,729 |
| Wihlborgs Fastigheter AB | 11,125 | 263,754 |
| 23,989,360 | ||
| Switzerland 3.1% | ||
| Allreal Holding AG | 2,184 | 461,798 |
| ALSO Holding AG | 942 | 279,552 |
| ams AG * | 21,119 | 418,121 |
| Arbonia AG | 14,264 | 310,125 |
| Aryzta AG * | 629,700 | 823,406 |
| Autoneum Holding AG * | 1,692 | 264,860 |
| Banque Cantonale Vaudoise | 3,229 | 259,974 |
| Belimo Holding AG | 690 | 400,917 |
| BKW AG | 3,306 | 438,002 |
| Bobst Group S.A. * | 2,474 | 201,573 |
| Bucher Industries AG | 1,271 | 641,463 |
| Burckhardt Compression Holding AG | 482 | 202,676 |
| Bystronic AG | 283 | 389,121 |
| Cembra Money Bank AG | 4,339 | 289,648 |
| Daetwyler Holding AG | 783 | 304,616 |
| dormakaba Holding AG | 566 | 419,521 |
| Emmi AG | 390 | 406,570 |
| EMS-Chemie Holding AG | 605 | 600,114 |
| Flughafen Zuerich AG * | 3,341 | 603,341 |
| Forbo Holding AG | 179 | 348,243 |
| Galenica AG | 12,667 | 927,818 |
| GAM Holding AG * | 198,956 | 320,511 |
| Helvetia Holding AG | 8,110 | 965,016 |
| Huber & Suhner AG | 4,155 | 369,394 |
| Implenia AG * | 11,856 | 241,885 |
| Inficon Holding AG | 186 | 238,658 |
| Interroll Holding AG | 30 | 145,545 |
| Komax Holding AG * | 713 | 181,599 |
| Landis+Gyr Group AG | 7,298 | 501,720 |
| Logitech International S.A. | 8,819 | 737,735 |
| Medmix AG * | 4,734 | 226,333 |
| Mobimo Holding AG | 813 | 273,930 |
| OC Oerlikon Corp. AG | 50,165 | 510,765 |
| PSP Swiss Property AG | 2,909 | 363,642 |
| Rieter Holding AG * | 1,431 | 297,044 |
| Schweiter Technologies AG | 196 | 281,284 |
| SFS Group AG | 2,978 | 401,120 |
| Siegfried Holding AG * | 306 | 294,324 |
| SIG Combibloc Group AG * | 34,257 | 895,913 |
| Softwareone Holding AG * | 8,265 | 191,516 |
| St. Galler Kantonalbank AG | 359 | 165,463 |
| Stadler Rail AG (b) | 6,156 | 270,283 |
| Straumann Holding AG | 311 | 647,408 |
| Sulzer AG | 4,734 | 465,376 |
| Tecan Group AG | 552 | 338,212 |
| Temenos AG | 2,445 | 374,321 |
| u-blox Holding AG * | 2,677 | 195,892 |
| Valiant Holding AG | 2,645 | 261,808 |
| Valora Holding AG * | 2,069 | 393,750 |
| VAT Group AG | 1,314 | 628,132 |
| Vetropack Holding AG | 3,208 | 197,457 |
| Vifor Pharma AG | 6,772 | 874,440 |
| Vontobel Holding AG | 3,588 | 332,281 |
| Zehnder Group AG | 3,150 | 339,063 |
| Zur Rose Group AG * | 413 | 146,598 |
| 22,059,877 | ||
| United Kingdom 10.7% | ||
| 4imprint Group plc | 3,414 | 133,626 |
| 888 Holdings plc | 38,395 | 201,144 |
| AG Barr plc | 22,762 | 154,664 |
74
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Airtel Africa plc | 361,963 | 542,920 |
| Ascential plc * | 40,248 | 222,245 |
| Ashmore Group plc | 53,452 | 246,966 |
| Auto Trader Group plc | 40,708 | 337,487 |
| Avast plc | 30,564 | 234,072 |
| AVEVA Group plc | 6,718 | 327,139 |
| B&M European Value Retail S.A. | 118,287 | 1,024,806 |
| Babcock International Group plc * | 226,561 | 989,435 |
| Bank of Georgia Group plc | 11,485 | 238,341 |
| Beazley plc * | 133,495 | 712,509 |
| Biffa plc * | 66,014 | 359,567 |
| Big Yellow Group plc | 10,492 | 212,367 |
| Bodycote plc | 51,972 | 569,270 |
| Brewin Dolphin Holdings plc | 57,302 | 295,254 |
| Britvic plc | 49,750 | 604,598 |
| C&C Group plc * | 98,103 | 347,999 |
| Capita plc * | 913,891 | 593,170 |
| Card Factory plc * | 517,449 | 335,311 |
| Centamin plc | 406,752 | 519,675 |
| Chemring Group plc | 58,553 | 233,474 |
| Cineworld Group plc *(b) | 794,962 | 665,721 |
| Clarkson plc | 4,305 | 235,664 |
| Close Brothers Group plc | 33,886 | 667,796 |
| Coats Group plc | 359,975 | 317,263 |
| Computacenter plc | 13,506 | 496,545 |
| ConvaTec Group plc | 212,978 | 623,165 |
| Costain Group plc *(b) | 352,397 | 258,016 |
| Countryside Properties plc * | 71,852 | 462,521 |
| Cranswick plc | 12,701 | 601,416 |
| Crest Nicholson Holdings plc | 128,727 | 627,163 |
| De La Rue plc * | 102,756 | 235,675 |
| Dechra Pharmaceuticals plc | 3,434 | 240,620 |
| Derwent London plc | 7,139 | 330,220 |
| Diploma plc | 8,364 | 343,736 |
| Domino's Pizza Group plc | 44,103 | 233,634 |
| Dunelm Group plc | 15,119 | 264,639 |
| Electrocomponents plc | 51,727 | 795,850 |
| Elementis plc * | 200,180 | 382,169 |
| Endeavour Mining plc | 7,707 | 195,087 |
| Entain plc * | 36,942 | 1,035,157 |
| Equiniti Group plc * | 109,816 | 268,115 |
| Essentra plc | 116,730 | 464,912 |
| Euromoney Institutional Investor plc | 22,952 | 328,288 |
| Ferrexpo plc | 89,752 | 382,873 |
| Flutter Entertainment plc * | 5,974 | 1,127,336 |
| Forterra plc | 54,904 | 194,610 |
| Frasers Group plc * | 55,381 | 488,161 |
| Fresnillo plc | 29,886 | 351,715 |
| Games Workshop Group plc | 1,590 | 209,875 |
| Genuit Group plc | 29,102 | 264,060 |
| Genus plc | 3,383 | 256,539 |
| Grafton Group plc | 66,255 | 1,216,939 |
| Grainger plc | 64,025 | 269,279 |
| Great Portland Estates plc | 30,885 | 308,833 |
| Greencore Group plc * | 221,710 | 392,020 |
| Greggs plc | 17,343 | 724,884 |
| Halfords Group plc | 109,302 | 398,495 |
| Halma plc | 21,811 | 884,508 |
| Hammerson plc (b) | 738,579 | 324,292 |
| Harbour Energy plc * | 115,434 | 552,507 |
| Hargreaves Lansdown plc | 22,792 | 479,611 |
| Hikma Pharmaceuticals plc | 20,157 | 664,413 |
| Hill & Smith Holdings plc | 14,105 | 354,024 |
| Hilton Food Group plc | 15,803 | 252,606 |
| Hiscox Ltd. | 55,531 | 631,798 |
| Hochschild Mining plc | 75,118 | 146,597 |
| HomeServe plc | 33,217 | 388,676 |
| Howden Joinery Group plc | 90,021 | 1,133,206 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Hunting plc | 83,672 | 193,979 |
| Ibstock plc | 115,583 | 315,678 |
| IG Group Holdings plc | 72,430 | 786,550 |
| IMI plc | 50,093 | 1,118,670 |
| Indivior plc * | 179,972 | 599,004 |
| Intermediate Capital Group plc | 23,189 | 695,553 |
| Intu Properties plc *(a)(b) | 4,024,942 | 0 |
| Investec plc | 116,597 | 529,450 |
| IWG plc * | 151,941 | 644,439 |
| J.D. Wetherspoon plc * | 22,439 | 314,932 |
| JD Sports Fashion plc | 40,309 | 600,801 |
| John Menzies plc * | 41,568 | 169,440 |
| Jupiter Fund Management plc | 147,825 | 506,309 |
| Just Group plc * | 459,730 | 575,217 |
| Kier Group plc * | 519,487 | 759,289 |
| Lancashire Holdings Ltd. | 45,362 | 314,126 |
| Man Group plc | 435,143 | 1,385,764 |
| Mapeley Ltd. (a) | 2,199 | 0 |
| Marshalls plc | 26,278 | 254,796 |
| Marston's plc * | 408,703 | 444,668 |
| Mediclinic International plc * | 130,617 | 597,615 |
| Mitchells & Butlers plc * | 124,570 | 431,656 |
| Moneysupermarket.com Group plc | 104,713 | 304,007 |
| Morgan Advanced Materials plc | 88,372 | 418,458 |
| Morgan Sindall Group plc | 16,883 | 523,059 |
| National Express Group plc * | 223,081 | 698,075 |
| NewRiver REIT plc | 104,620 | 111,535 |
| Ocado Group plc * | 8,620 | 212,747 |
| OSB Group plc | 44,802 | 309,635 |
| Oxford Instruments plc | 4,053 | 127,522 |
| Pagegroup plc | 94,166 | 855,703 |
| Paragon Banking Group plc | 50,349 | 377,945 |
| PayPoint plc | 22,914 | 216,377 |
| Petrofac Ltd. *(b) | 279,641 | 495,600 |
| Petropavlovsk plc * | 653,625 | 211,786 |
| Pets at Home Group plc | 84,959 | 560,890 |
| Phoenix Group Holdings plc | 70,547 | 633,408 |
| Playtech plc * | 121,957 | 1,161,654 |
| Plus500 Ltd. | 25,810 | 464,659 |
| Premier Foods plc | 288,538 | 433,577 |
| Provident Financial plc * | 172,343 | 870,670 |
| PZ Cussons plc | 51,201 | 150,422 |
| QinetiQ Group plc | 129,369 | 477,364 |
| Quilter plc | 121,653 | 259,015 |
| Rathbone Brothers plc | 8,105 | 217,914 |
| Reach plc | 133,215 | 577,736 |
| Redde Northgate plc | 126,922 | 691,323 |
| Redrow plc | 81,680 | 719,171 |
| Renishaw plc | 3,061 | 210,624 |
| Rhi Magnesita N.V. | 6,153 | 282,767 |
| Rightmove plc | 34,354 | 324,733 |
| Rotork plc | 115,350 | 557,614 |
| Sabre Insurance Group plc | 41,212 | 110,391 |
| Safestore Holdings plc | 14,467 | 237,982 |
| Saga plc * | 115,961 | 493,487 |
| Savills plc | 30,821 | 598,114 |
| Schroders plc | 15,794 | 782,337 |
| Segro plc | 39,976 | 706,558 |
| Senior plc * | 356,015 | 780,534 |
| Serco Group plc | 255,441 | 441,252 |
| SIG plc * | 676,518 | 480,979 |
| Softcat plc | 8,647 | 229,932 |
| Spectris plc | 21,526 | 1,107,559 |
| Spirax-Sarco Engineering plc | 4,173 | 890,808 |
| Spirent Communications plc | 64,221 | 253,122 |
| SSP Group plc * | 193,732 | 682,533 |
| St. James's Place plc | 50,314 | 1,086,925 |
| Stagecoach Group plc * | 362,223 | 394,841 |
75
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Sthree plc | 51,656 | 416,387 |
| Superdry plc * | 56,443 | 223,238 |
| Synthomer plc | 64,364 | 446,153 |
| TBC Bank Group plc | 7,914 | 170,042 |
| Ted Baker plc * | 83,119 | 153,566 |
| Telecom Plus plc | 16,961 | 289,686 |
| The British Land Co., plc | 149,452 | 1,009,096 |
| The Go-Ahead Group plc * | 45,857 | 492,647 |
| The Restaurant Group plc * | 217,640 | 263,003 |
| The Unite Group plc | 13,319 | 198,863 |
| The Weir Group plc | 37,683 | 893,869 |
| TP ICAP Group plc | 152,079 | 323,223 |
| Tritax Big Box REIT plc | 45,666 | 140,534 |
| Tullow Oil plc * | 401,338 | 252,036 |
| Tyman plc | 52,478 | 268,243 |
| Ultra Electronics Holdings plc | 12,921 | 572,550 |
| Vesuvius plc | 81,540 | 525,750 |
| Victrex plc | 14,100 | 440,914 |
| Virgin Money UK plc * | 260,839 | 724,691 |
| Vistry Group plc | 52,083 | 872,167 |
| WH Smith plc * | 27,565 | 590,067 |
| Wizz Air Holdings plc * | 3,925 | 248,229 |
| Workspace Group plc | 15,507 | 174,446 |
| 75,567,948 | ||
| Total Common Stocks (Cost $498,910,901) | 699,468,545 | |
| PREFERRED STOCKS 0.4% OF NET ASSETS | ||
| Germany 0.3% | ||
| Draegerwerk AG & Co. KGaA | 5,247 | 413,063 |
| Jungheinrich AG | 10,642 | 539,683 |
| Sartorius AG | 570 | 369,210 |
| Schaeffler AG | 62,425 | 496,038 |
| Sixt SE | 4,139 | 410,089 |
| 2,228,083 | ||
| Italy 0.1% | ||
| Danieli & C Officine Meccaniche S.p.A. | 23,720 | 512,211 |
| Republic of Korea 0.0% | ||
| Mirae Asset Securities Co., Ltd. | 7,252 | 30,083 |
| Total Preferred Stocks (Cost $1,714,210) | 2,770,377 | |
| RIGHTS 0.0% OF NET ASSETS | ||
| United Kingdom 0.0% | ||
| Petrofac Ltd. | ||
| expires 11/15/21, strike GBP 1.15 (a) | 87,797 | 17,423 |
| Total Rights (Cost $0) | 17,423 | |
| WARRANTS 0.0% OF NET ASSETS | ||
| Italy 0.0% | ||
| Webuild S.p.A. | ||
| expires 08/02/30 (a)(b) | 9,323 | 23,080 |
| Total Warrants (Cost $0) | 23,080 | |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.5% OF NET ASSETS | ||
| Money Market Funds 1.4% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 9,698,730 | 9,698,730 |
| Time Deposits 0.1% | ||
| BNP Paribas SA | ||
| Swiss Franc | ||
| (1.41%), 11/01/21 (e)(f) | 12,466 | 13,615 |
| U.S. Dollar | ||
| 0.01%, 11/01/21 (e) | 600,610 | 600,610 |
| Brown Brothers Harriman & Co. | ||
| Australian Dollar | ||
| (0.21%), 11/01/21 (e)(f) | 24,610 | 18,513 |
| Canadian Dollar | ||
| 0.01%, 11/01/21 (e) | 47,386 | 38,289 |
| Danish Krone | ||
| (0.61%), 11/01/21 (e)(f) | 188,024 | 29,219 |
| Hong Kong Dollar | ||
| 0.00%, 11/01/21 (e) | 156,151 | 20,069 |
| New Zealand Dollar | ||
| 0.20%, 11/01/21 (e) | 899 | 644 |
| Norwegian Krone | ||
| 0.01%, 11/01/21 (e) | 4,557 | 539 |
| Singapore Dollar | ||
| 0.01%, 11/01/21 (e) | 20,957 | 15,541 |
| Swedish Krona | ||
| (0.35%), 11/01/21 (e)(f) | 122,747 | 14,293 |
| Citibank NA | ||
| British Pound | ||
| 0.01%, 11/01/21 (e) | 31,867 | 43,611 |
| Euro | ||
| (0.79%), 11/01/21 (e)(f) | 30,472 | 35,226 |
| Sumitomo Mitsui Banking Corp. | ||
| Japanese Yen | ||
| (0.28%), 11/01/21 (e)(f) | 2,657,069 | 23,313 |
| 853,482 | ||
| Total Short-Term Investments (Cost $10,552,212) | 10,552,212 | |
| Total Investments in Securities (Cost $511,177,323) | 712,831,637 | |
76
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED APPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| MSCI EAFE Index, expires 12/17/21 | 42 | 4,913,160 | 89,858 |
| * | Non-income producing security. |
| (a) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $8,743,701. |
| (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 |
| REIT — | Real Estate Investment Trust |
| GBP — | British Pound |
77
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $— | $62,080,558 | $— | $62,080,558 |
| Australia | — | 36,847,921 | 0* | 36,847,921 |
| Austria | 1,907,051 | 3,868,855 | — | 5,775,906 |
| Belgium | 657,077 | 7,956,104 | — | 8,613,181 |
| Canada | 59,264,350 | — | — | 59,264,350 |
| Denmark | 2,836,977 | 6,649,194 | — | 9,486,171 |
| France | 1,272,706 | 26,139,583 | — | 27,412,289 |
| Germany | 3,586,543 | 25,119,026 | — | 28,705,569 |
| Greece | — | — | 0* | 0 |
| Hong Kong | 1,464,688 | 22,603,387 | 0* | 24,068,075 |
| Ireland | 303,852 | 1,574,141 | — | 1,877,993 |
| Israel | 162,120 | 11,997,955 | — | 12,160,075 |
| Italy | 660,881 | 18,456,795 | 0* | 19,117,676 |
| Japan | 1,505,775 | 220,087,167 | — | 221,592,942 |
| Luxembourg | — | — | 0* | 0 |
| Netherlands | 1,219,748 | 10,671,775 | — | 11,891,523 |
| New Zealand | 2,140,485 | 4,208,099 | — | 6,348,584 |
| Norway | 1,658,384 | 10,598,683 | — | 12,257,067 |
| Poland | 3,896,476 | 3,374,388 | — | 7,270,864 |
| Portugal | 1,189,152 | 1,734,772 | 0* | 2,923,924 |
| Singapore | 280,112 | 9,062,466 | 1,053,679 | 10,396,257 |
| Spain | 3,139,254 | 6,621,181 | 0* | 9,760,435 |
| Sweden | 2,380,133 | 21,609,227 | — | 23,989,360 |
| Switzerland | 4,346,706 | 17,713,171 | — | 22,059,877 |
| United Kingdom | 28,767,844 | 46,800,104 | 0* | 75,567,948 |
| Preferred Stocks1 | — | 30,083 | — | 30,083 |
| Germany | 413,063 | 1,815,020 | — | 2,228,083 |
| Italy | 512,211 | — | — | 512,211 |
| Rights 1 | — | — | 17,423 | 17,423 |
| Warrants 1 | — | — | 23,080 | 23,080 |
| Short-Term Investments1 | — | 853,482 | — | 853,482 |
| Money Market Funds | 9,698,730 | — | — | 9,698,730 |
| Futures Contracts2 | 89,858 | — | — | 89,858 |
| Total | $133,354,176 | $578,473,137 | $1,094,182 | $712,921,495 |
| * | Level 3 amount shown includes securities determined to have no value at October 31, 2021. |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
78
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $511,177,323) including securities on loan of $8,743,701 | $712,831,637 | |
| Foreign currency, at value (cost $62,464) | 62,818 | |
| Deposit with broker for futures contracts | 199,955 | |
| Receivables: | ||
| Dividends | 1,708,199 | |
| Fund shares sold | 1,639,387 | |
| Foreign tax reclaims | 1,081,490 | |
| Investments sold | 975,441 | |
| Income from securities on loan | + | 16,650 |
| Total assets | 718,515,577 | |
| Liabilities | ||
| Collateral held for securities on loan | 9,698,730 | |
| Payables: | ||
| Investment adviser fees | 236,642 | |
| Fund shares redeemed | 209,956 | |
| Variation margin on futures contracts | + | 21,300 |
| Total liabilities | 10,166,628 | |
| Net assets | $708,348,949 | |
| Net Assets by Source | ||
| Capital received from investors | $522,013,305 | |
| Total distributable earnings | + | 186,335,644 |
| Net assets | $708,348,949 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $708,348,949 | 45,931,717 | $15.42 | ||
79
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $2,197,640) | $15,509,760 | |
| Securities on loan, net | + | 577,106 |
| Total investment income | 16,086,866 | |
| Expenses | ||
| Investment adviser fees | 2,803,590 | |
| Professional fees | + | 3,769* |
| Total expenses | 2,807,359 | |
| Expense reduction by investment adviser | – | 3,769* |
| Net expenses | – | 2,803,590 |
| Net investment income | 13,283,276 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated | 50,823,483 | |
| Net realized gains on futures contracts | 964,576 | |
| Net realized gains on foreign currency transactions | + | 79,515 |
| Net realized gains | 51,867,574 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | 149,164,663 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | 228,345 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (59,583) |
| Net change in unrealized appreciation (depreciation) | + | 149,333,425 |
| Net realized and unrealized gains | 201,200,999 | |
| Increase in net assets resulting from operations | $214,484,275 | |
| * | Professional fees associated with the filing of tax claims in the European Union deemed to be non-routine expenses of the fund. See financial notes 2 (d) and 4 for additional information. |
80
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental International Small Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $13,283,276 | $12,343,035 | |
| Net realized gains (losses) | 51,867,574 | (48,515,613) | |
| Net change in unrealized appreciation (depreciation) | + | 149,333,425 | (13,051,655) |
| Increase (decrease) in net assets from operations | $214,484,275 | ($49,224,233) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($13,332,524) | ($21,815,081) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 11,598,667 | $168,880,238 | 18,584,362 | $193,918,636 | |
| Shares reinvested | 772,628 | 10,453,657 | 1,327,830 | 17,115,730 | |
| Shares redeemed | + | (16,773,053) | (249,085,119) | (31,234,955) | (338,304,616) |
| Net transactions in fund shares | (4,401,758) | ($69,751,224) | (11,322,763) | ($127,270,250) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 50,333,475 | $576,948,422 | 61,656,238 | $775,257,986 | |
| Total increase (decrease) | + | (4,401,758) | 131,400,527 | (11,322,763) | (198,309,564) |
| End of period | 45,931,717 | $708,348,949 | 50,333,475 | $576,948,422 | |
81
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental Emerging Markets Large Company Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $7.51 | $9.25 | $8.60 | $9.38 | $7.86 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.36 | 0.27 | 0.35 | 0.27 | 0.22 | |
| Net realized and unrealized gains (losses) | 2.63 | (1.65) | 0.54 | (0.83) | 1.47 | |
| Total from investment operations | 2.99 | (1.38) | 0.89 | (0.56) | 1.69 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.26) | (0.36) | (0.24) | (0.22) | (0.17) | |
| Net asset value at end of period | $10.24 | $7.51 | $9.25 | $8.60 | $9.38 | |
| Total return | 40.39% | (15.68%) | 10.73% | (6.09%) | 21.96% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.39% | 0.39% | 0.39% | 0.39% | 0.57% 2 | |
| Net operating expenses | N/A | N/A | N/A | N/A 3 | 0.43% 2 | |
| Net investment income (loss) | 3.75% | 3.32% | 3.93% | 2.92% | 2.62% | |
| Portfolio turnover rate | 32% | 32% | 38% | 19% | 18% | |
| Net assets, end of period (x 1,000,000) | $708 | $550 | $671 | $548 | $554 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Effective May 1, 2017, the annual operating expense ratio was reduced. The ratio presented for period ended 10/31/17 is a blended ratio. |
| 3 | Effective May 1, 2017, the fund instituted a new fee structure and the contractual expense limitation was terminated. |
82
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| COMMON STOCKS 94.8% OF NET ASSETS | ||
| Brazil 5.2% | ||
| Ambev S.A. | 846,950 | 2,549,644 |
| B3 S.A. - Brasil Bolsa Balcao | 298,599 | 630,128 |
| Banco Bradesco S.A. | 407,450 | 1,227,303 |
| Banco do Brasil S.A. | 548,615 | 2,770,390 |
| BRF S.A. * | 236,818 | 974,748 |
| CCR S.A. | 359,700 | 728,476 |
| Centrais Eletricas Brasileiras S.A. | 106,616 | 639,076 |
| Cia Brasileira de Distribuicao | 59,099 | 267,337 |
| Cia Energetica de Minas Gerais | 69,126 | 203,565 |
| Cielo S.A. | 1,134,734 | 440,318 |
| Cogna Educacao * | 1,079,600 | 474,398 |
| Companhia de Saneamento Basico do Estado de Sao Paulo | 121,610 | 758,473 |
| Embraer S.A. * | 348,451 | 1,353,969 |
| IRB Brasil Resseguros S.A. * | 755,811 | 628,079 |
| Itau Unibanco Holding S.A. | 165,600 | 617,061 |
| JBS S.A. | 443,200 | 3,066,544 |
| Petroleo Brasileiro S.A. | 1,434,765 | 7,034,258 |
| Sendas Distribuidora S.A. | 203,195 | 550,489 |
| Suzano S.A. * | 66,700 | 581,814 |
| Telefonica Brasil S.A. | 146,072 | 1,178,142 |
| TIM S.A. | 326,047 | 648,189 |
| Ultrapar Participacoes S.A. | 630,928 | 1,458,877 |
| Vale S.A. | 483,698 | 6,137,301 |
| Vibra Energia S.A. | 443,400 | 1,648,275 |
| 36,566,854 | ||
| Chile 0.7% | ||
| Banco de Chile | 8,159,356 | 707,790 |
| Cencosud S.A. | 687,837 | 1,006,178 |
| Empresas CMPC S.A. | 299,515 | 552,639 |
| Empresas Copec S.A. | 158,582 | 1,247,603 |
| Enel Americas S.A. | 6,584,759 | 749,314 |
| Falabella S.A. | 195,804 | 541,464 |
| 4,804,988 | ||
| China 24.3% | ||
| Agile Group Holdings Ltd. | 636,000 | 498,588 |
| Agricultural Bank of China Ltd., A Shares | 2,963,000 | 1,358,844 |
| Agricultural Bank of China Ltd., H Shares | 9,388,600 | 3,190,314 |
| Alibaba Group Holding Ltd. * | 341,292 | 7,017,871 |
| Anhui Conch Cement Co., Ltd., A Shares | 49,400 | 292,661 |
| Anhui Conch Cement Co., Ltd., H Shares | 207,000 | 1,023,595 |
| BAIC Motor Corp., Ltd., H Shares | 2,806,000 | 929,487 |
| Baidu, Inc. ADR * | 18,759 | 3,043,460 |
| Bank of China Ltd., A Shares | 1,886,400 | 897,460 |
| Bank of China Ltd., H Shares | 25,955,234 | 9,185,598 |
| Bank of Communications Co., Ltd., A Shares | 1,091,200 | 769,442 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Bank of Communications Co., Ltd., H Shares | 2,775,000 | 1,650,800 |
| Beijing Enterprises Holdings Ltd. | 210,500 | 809,139 |
| BYD Co., Ltd., A Shares | 4,100 | 200,129 |
| BYD Co., Ltd., H Shares | 22,500 | 860,571 |
| China Cinda Asset Management Co., Ltd., H Shares | 4,426,000 | 738,903 |
| China CITIC Bank Corp., Ltd., A Shares | 276,700 | 196,009 |
| China CITIC Bank Corp., Ltd., H Shares | 3,783,000 | 1,659,411 |
| China Communications Services Corp., Ltd., H Shares | 1,574,000 | 870,138 |
| China Construction Bank Corp., A Shares | 225,300 | 208,535 |
| China Construction Bank Corp., H Shares | 30,671,960 | 20,874,743 |
| China Everbright Bank Co., Ltd., A Shares | 950,800 | 510,447 |
| China Everbright Bank Co., Ltd., H Shares | 967,000 | 340,056 |
| China Evergrande Group | 1,911,000 | 567,088 |
| China Gas Holdings Ltd. | 226,000 | 564,100 |
| China Hongqiao Group Ltd. | 734,500 | 816,067 |
| China Huarong Asset Management Co., Ltd., H Shares *(a) | 11,177,000 | 732,635 |
| China Jinmao Holdings Group Ltd. | 1,988,000 | 580,791 |
| China Life Insurance Co., Ltd., A Shares | 23,200 | 107,483 |
| China Life Insurance Co., Ltd., H Shares | 547,000 | 950,286 |
| China Longyuan Power Group Corp., Ltd., H Shares | 522,000 | 1,220,977 |
| China Mengniu Dairy Co., Ltd. * | 180,000 | 1,145,261 |
| China Merchants Bank Co., Ltd., A Shares | 158,100 | 1,329,966 |
| China Merchants Bank Co., Ltd., H Shares | 393,150 | 3,294,651 |
| China Minsheng Banking Corp., Ltd., A Shares | 1,133,800 | 687,718 |
| China Minsheng Banking Corp., Ltd., H Shares | 3,146,300 | 1,247,497 |
| China National Building Material Co., Ltd., H Shares | 1,598,000 | 2,002,762 |
| China Oriental Group Co., Ltd. | 2,852,000 | 802,682 |
| China Overseas Land & Investment Ltd. | 1,363,500 | 3,007,275 |
| China Pacific Insurance Group Co., Ltd., A Shares | 43,200 | 184,289 |
| China Pacific Insurance Group Co., Ltd., H Shares | 238,000 | 727,774 |
| China Petroleum & Chemical Corp., A Shares | 2,120,100 | 1,406,825 |
| China Petroleum & Chemical Corp., H Shares | 23,798,400 | 11,595,359 |
| China Railway Group Ltd., A Shares | 491,500 | 402,585 |
| China Railway Group Ltd., H Shares | 1,702,000 | 831,419 |
| China Resources Land Ltd. | 573,000 | 2,226,373 |
| China Resources Power Holdings Co., Ltd. | 1,102,000 | 2,852,221 |
| China Shenhua Energy Co., Ltd., A Shares | 177,000 | 550,284 |
83
Schwab Fundamental Index Funds | Annual Report
See financial notes
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| China Shenhua Energy Co., Ltd., H Shares | 1,163,500 | 2,501,868 |
| China State Construction Engineering Corp., Ltd., A Shares | 1,303,400 | 947,036 |
| China Taiping Insurance Holdings Co., Ltd. | 430,400 | 654,936 |
| China Tower Corp., Ltd., H Shares | 7,688,000 | 996,355 |
| China Vanke Co., Ltd., A Shares | 141,600 | 402,080 |
| China Vanke Co., Ltd., H Shares | 394,900 | 922,656 |
| CITIC Ltd. | 2,982,000 | 2,987,354 |
| Country Garden Holdings Co., Ltd. | 1,960,114 | 1,844,481 |
| Dongfeng Motor Group Co., Ltd., H Shares | 1,043,000 | 971,405 |
| ENN Energy Holdings Ltd. | 57,500 | 990,637 |
| Fosun International Ltd. | 683,000 | 800,215 |
| Geely Automobile Holdings Ltd. | 498,000 | 1,728,379 |
| Guangzhou R&F Properties Co., Ltd., H Shares (b) | 1,208,000 | 755,669 |
| Hengan International Group Co., Ltd. | 130,000 | 679,371 |
| Huaneng Power International, Inc., A Shares | 289,700 | 349,017 |
| Huaneng Power International, Inc., H Shares | 2,528,000 | 1,308,388 |
| Industrial & Commercial Bank of China Ltd., A Shares | 1,504,900 | 1,097,267 |
| Industrial & Commercial Bank of China Ltd., H Shares | 22,679,172 | 12,431,862 |
| Industrial Bank Co., Ltd., A Shares | 318,900 | 926,892 |
| JD.com, Inc., A Shares * | 64,800 | 2,536,725 |
| Jiangxi Copper Co., Ltd., A Shares | 60,400 | 219,782 |
| Jiangxi Copper Co., Ltd., H Shares | 520,000 | 908,086 |
| Kingboard Holdings Ltd. | 248,500 | 1,082,914 |
| Kunlun Energy Co., Ltd. | 1,140,000 | 1,038,289 |
| Legend Holdings Corp., H Shares | 483,000 | 848,956 |
| Longfor Group Holdings Ltd. | 217,000 | 1,049,828 |
| Meituan, B Shares * | 17,200 | 585,292 |
| NetEase, Inc. | 87,343 | 1,694,252 |
| PetroChina Co., Ltd., H Shares | 12,546,000 | 6,049,022 |
| PICC Property & Casualty Co., Ltd., H Shares | 2,580,000 | 2,401,839 |
| Ping An Insurance Group Co. of China Ltd., A Shares | 97,500 | 752,157 |
| Ping An Insurance Group Co. of China Ltd., H Shares | 736,000 | 5,271,769 |
| Postal Savings Bank of China Co., Ltd., H Shares | 1,570,000 | 1,141,065 |
| SAIC Motor Corp., Ltd., A Shares | 279,700 | 886,469 |
| Shanghai Pudong Development Bank Co., Ltd., A Shares | 693,100 | 966,780 |
| Shenzhou International Group Holdings Ltd. | 32,200 | 693,723 |
| Shimao Group Holdings Ltd. | 470,000 | 737,280 |
| Sinopec Shanghai Petrochemical Co., Ltd., A Shares | 283,700 | 172,669 |
| Sinopec Shanghai Petrochemical Co., Ltd., H Shares | 2,590,000 | 604,339 |
| Sinopharm Group Co., Ltd., H Shares | 595,600 | 1,414,260 |
| Sunac China Holdings Ltd. | 383,000 | 819,055 |
| Tencent Holdings Ltd. | 127,700 | 7,767,965 |
| Vipshop Holdings Ltd., ADR * | 43,715 | 487,859 |
| Weichai Power Co., Ltd., A Shares | 55,400 | 130,620 |
| Weichai Power Co., Ltd., H Shares | 271,000 | 485,081 |
| Yanzhou Coal Mining Co., Ltd., A Shares | 28,900 | 102,425 |
| Yanzhou Coal Mining Co., Ltd., H Shares | 618,000 | 916,653 |
| 172,021,591 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Colombia 0.3% | ||
| Bancolombia S.A. | 84,417 | 755,009 |
| Ecopetrol S.A. | 1,622,175 | 1,226,409 |
| 1,981,418 | ||
| Czech Republic 0.2% | ||
| CEZ A/S | 40,694 | 1,343,411 |
| Egypt 0.1% | ||
| Commercial International Bank Egypt S.A.E. GDR * | 267,317 | 828,683 |
| Greece 0.5% | ||
| Alpha Services and Holdings S.A. * | 1,087,494 | 1,386,404 |
| Hellenic Telecommunications Organization S.A. | 49,194 | 873,381 |
| Motor Oil Hellas Corinth Refineries S.A. | 51,523 | 874,553 |
| 3,134,338 | ||
| Hungary 0.5% | ||
| MOL Hungarian Oil & Gas plc | 234,208 | 2,001,382 |
| OTP Bank Nyrt * | 25,182 | 1,513,121 |
| 3,514,503 | ||
| India 9.8% | ||
| Axis Bank Ltd. * | 157,077 | 1,563,067 |
| Bharat Petroleum Corp., Ltd. | 364,028 | 2,035,143 |
| Bharti Airtel Ltd. * | 185,803 | 1,704,434 |
| Coal India Ltd. | 689,005 | 1,516,317 |
| GAIL India Ltd. | 453,518 | 902,409 |
| Grasim Industries Ltd. | 55,803 | 1,285,656 |
| HCL Technologies Ltd. | 103,735 | 1,588,406 |
| Hero MotoCorp Ltd. | 22,501 | 799,948 |
| Hindalco Industries Ltd. | 330,254 | 2,035,079 |
| Hindustan Petroleum Corp., Ltd. | 504,225 | 2,092,724 |
| Hindustan Unilever Ltd. | 24,695 | 790,416 |
| Housing Development Finance Corp., Ltd. | 73,987 | 2,820,877 |
| ICICI Bank Ltd. | 81,239 | 874,709 |
| Indian Oil Corp., Ltd. | 1,929,422 | 3,303,134 |
| Infosys Ltd. | 294,081 | 6,581,184 |
| ITC Ltd. | 396,141 | 1,182,784 |
| JSW Steel Ltd. | 149,277 | 1,337,000 |
| Larsen & Toubro Ltd. | 50,302 | 1,191,568 |
| Mahindra & Mahindra Ltd. | 102,095 | 1,209,624 |
| Maruti Suzuki India Ltd. | 15,322 | 1,534,156 |
| NTPC Ltd. | 954,463 | 1,694,580 |
| Oil & Natural Gas Corp., Ltd. | 2,292,380 | 4,561,688 |
| Power Grid Corp. of India Ltd. | 312,236 | 773,418 |
| Reliance Industries Ltd. | 246,230 | 8,355,854 |
| State Bank of India | 319,412 | 2,149,034 |
| Sun Pharmaceutical Industries Ltd. | 96,684 | 1,028,098 |
| Tata Consultancy Services Ltd. | 68,752 | 3,125,087 |
| Tata Motors Ltd. * | 618,285 | 3,977,435 |
| Tata Motors Ltd., Class A * | 178,290 | 589,474 |
| Tata Steel Ltd. | 122,830 | 2,165,593 |
| Tech Mahindra Ltd. | 54,439 | 1,077,570 |
| Vedanta Ltd. | 603,861 | 2,457,408 |
| Wipro Ltd. | 134,746 | 1,166,839 |
| 69,470,713 | ||
84
Schwab Fundamental Index Funds | Annual Report
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Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Indonesia 1.5% | ||
| PT Astra International Tbk | 5,190,100 | 2,210,529 |
| PT Bank Central Asia Tbk | 2,198,000 | 1,162,252 |
| PT Bank Mandiri (Persero) Tbk | 3,039,600 | 1,536,736 |
| PT Bank Rakyat Indonesia (Persero) Tbk | 6,060,396 | 1,819,232 |
| PT Telkom Indonesia (Persero) Tbk | 11,144,200 | 2,978,684 |
| PT United Tractors Tbk | 457,800 | 761,555 |
| 10,468,988 | ||
| Kuwait 0.6% | ||
| Kuwait Finance House KSCP | 357,854 | 989,022 |
| Mobile Telecommunications Co. KSCP | 509,987 | 1,010,003 |
| National Bank of Kuwait SAKP | 742,541 | 2,441,532 |
| 4,440,557 | ||
| Malaysia 1.7% | ||
| Axiata Group Berhad | 1,222,413 | 1,166,030 |
| CIMB Group Holdings Berhad | 1,584,571 | 1,999,306 |
| Genting Berhad | 931,300 | 1,164,969 |
| Malayan Banking Berhad | 1,111,997 | 2,161,694 |
| Petronas Chemicals Group Berhad | 460,700 | 966,791 |
| Public Bank Berhad | 1,754,325 | 1,766,611 |
| Tenaga Nasional Berhad | 1,310,500 | 3,057,196 |
| 12,282,597 | ||
| Mexico 3.8% | ||
| Alfa S.A.B. de C.V., Class A | 2,061,500 | 1,492,955 |
| America Movil S.A.B. de C.V., Series L | 8,860,319 | 7,897,166 |
| Cemex S.A.B. de C.V., Series CPO * | 4,498,156 | 2,892,733 |
| Coca-Cola Femsa S.A.B. de C.V. | 148,650 | 801,084 |
| Fomento Economico Mexicano S.A.B. de C.V. | 402,815 | 3,311,661 |
| Grupo Bimbo S.A.B. de C.V., Series A | 525,900 | 1,556,652 |
| Grupo Financiero Banorte S.A.B. de C.V., Class O | 475,800 | 3,012,460 |
| Grupo Mexico S.A.B. de C.V., Series B | 480,736 | 2,108,999 |
| Grupo Televisa S.A.B., Series CPO | 482,917 | 980,471 |
| Wal-Mart de Mexico S.A.B. de C.V. | 837,237 | 2,920,244 |
| 26,974,425 | ||
| Philippines 0.1% | ||
| SM Investments Corp. (a) | 39,275 | 751,842 |
| Qatar 0.5% | ||
| Ooredoo QPSC | 444,324 | 844,472 |
| Qatar National Bank QPSC | 475,296 | 2,676,069 |
| 3,520,541 | ||
| Russia 13.4% | ||
| Alrosa PJSC | 751,250 | 1,326,351 |
| Gazprom PJSC | 6,369,060 | 31,382,485 |
| Inter RAO UES PJSC | 20,360,701 | 1,380,303 |
| LUKOIL PJSC | 228,315 | 23,299,970 |
| Magnit PJSC | 31,080 | 2,836,411 |
| MMC Norilsk Nickel PJSC | 7,414 | 2,314,404 |
| Mobile TeleSystems PJSC | 364,352 | 1,596,546 |
| Novatek PJSC | 121,334 | 3,080,842 |
| Novolipetsk Steel PJSC | 304,220 | 960,353 |
| Rosneft Oil Co. PJSC | 642,852 | 5,775,446 |
| ROSSETI PJSC | 37,186,000 | 730,733 |
| Sberbank of Russia PJSC | 2,061,300 | 10,369,970 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Severstal PAO | 54,557 | 1,239,857 |
| Sistema PJSFC | 1,704,000 | 648,450 |
| Surgutneftegas PJSC | 3,267,805 | 1,572,332 |
| Tatneft PJSC | 602,358 | 4,602,890 |
| VTB Bank PJSC | 1,999,810,000 | 1,493,789 |
| 94,611,132 | ||
| Saudi Arabia 2.9% | ||
| Al Rajhi Bank | 70,567 | 2,607,531 |
| Banque Saudi Fransi | 57,327 | 645,729 |
| Riyad Bank | 155,399 | 1,224,250 |
| Saudi Arabian Oil Co. | 161,374 | 1,624,109 |
| Saudi Basic Industries Corp. | 191,422 | 6,597,636 |
| Saudi Electricity Co. | 174,788 | 1,329,702 |
| Saudi Telecom Co. | 81,946 | 2,559,882 |
| The Saudi British Bank | 73,960 | 653,605 |
| The Saudi National Bank | 198,185 | 3,481,935 |
| 20,724,379 | ||
| South Africa 6.2% | ||
| Absa Group Ltd. | 267,376 | 2,445,852 |
| AngloGold Ashanti Ltd. | 65,282 | 1,204,370 |
| Aspen Pharmacare Holdings Ltd. | 73,122 | 1,164,447 |
| Barloworld Ltd. | 164,935 | 1,385,238 |
| Bid Corp., Ltd. | 76,543 | 1,642,806 |
| FirstRand Ltd. | 852,575 | 3,238,654 |
| Gold Fields Ltd. | 129,036 | 1,199,032 |
| MTN Group Ltd. * | 843,890 | 7,567,269 |
| MultiChoice Group | 106,712 | 848,596 |
| Naspers Ltd., N Shares | 8,151 | 1,380,403 |
| Nedbank Group Ltd. | 144,433 | 1,645,820 |
| Old Mutual Ltd. | 1,470,886 | 1,501,218 |
| Sanlam Ltd. | 282,062 | 1,158,716 |
| Sappi Ltd. * | 439,506 | 1,350,072 |
| Sasol Ltd. * | 395,432 | 6,641,663 |
| Shoprite Holdings Ltd. | 142,475 | 1,692,818 |
| Sibanye Stillwater Ltd. | 186,875 | 654,016 |
| Standard Bank Group Ltd. | 370,109 | 3,279,692 |
| The Bidvest Group Ltd. | 81,326 | 1,018,298 |
| The SPAR Group Ltd. | 52,578 | 671,140 |
| Thungela Resources Ltd. * | 28,634 | 136,300 |
| Vodacom Group Ltd. | 138,380 | 1,228,253 |
| Woolworths Holdings Ltd. | 283,826 | 999,076 |
| 44,053,749 | ||
| Taiwan 17.0% | ||
| Acer, Inc. | 966,496 | 904,622 |
| ASE Technology Holding Co., Ltd. | 685,000 | 2,450,256 |
| Asustek Computer, Inc. | 243,041 | 3,089,978 |
| AU Optronics Corp. | 4,405,800 | 3,027,767 |
| Catcher Technology Co., Ltd. | 237,000 | 1,374,223 |
| Cathay Financial Holding Co., Ltd. | 1,145,599 | 2,387,992 |
| Cheng Shin Rubber Industry Co., Ltd. | 479,000 | 587,896 |
| China Steel Corp. | 2,449,198 | 2,952,891 |
| Chunghwa Telecom Co., Ltd. | 598,906 | 2,376,610 |
| Compal Electronics, Inc. | 3,208,305 | 2,823,499 |
| CTBC Financial Holding Co., Ltd. | 2,504,201 | 2,091,156 |
| Delta Electronics, Inc. | 191,590 | 1,691,237 |
| E.Sun Financial Holding Co., Ltd. | 859,261 | 821,043 |
| Far Eastern New Century Corp. | 1,276,817 | 1,337,269 |
| Far EasTone Telecommunications Co., Ltd. | 339,622 | 747,314 |
| First Financial Holding Co., Ltd. | 1,131,312 | 931,427 |
| Formosa Chemicals & Fibre Corp. | 844,442 | 2,450,305 |
| Formosa Petrochemical Corp. | 351,330 | 1,264,894 |
85
Schwab Fundamental Index Funds | Annual Report
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Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Formosa Plastics Corp. | 708,732 | 2,745,245 |
| Foxconn Technology Co., Ltd. | 384,317 | 954,225 |
| Fubon Financial Holding Co., Ltd. | 1,350,749 | 3,570,600 |
| Hon Hai Precision Industry Co., Ltd. | 5,211,572 | 20,118,430 |
| Innolux Corp. | 5,093,357 | 3,063,811 |
| Inventec Corp. | 1,544,639 | 1,477,304 |
| Largan Precision Co., Ltd. | 9,050 | 674,399 |
| Lite-On Technology Corp. | 551,167 | 1,216,304 |
| MediaTek, Inc. | 79,838 | 2,627,683 |
| Mega Financial Holding Co., Ltd. | 1,236,340 | 1,485,758 |
| Nan Ya Plastics Corp. | 1,027,622 | 3,153,628 |
| Pegatron Corp. | 1,301,264 | 3,185,545 |
| Pou Chen Corp. | 1,140,267 | 1,398,444 |
| President Chain Store Corp. | 77,000 | 778,242 |
| Quanta Computer, Inc. | 695,500 | 1,954,008 |
| Synnex Technology International Corp. | 572,850 | 1,109,924 |
| Taiwan Cement Corp. | 777,452 | 1,349,055 |
| Taiwan Mobile Co., Ltd. | 236,334 | 833,592 |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 1,140,803 | 24,208,170 |
| Uni-President Enterprises Corp. | 880,678 | 2,112,678 |
| United Microelectronics Corp. | 1,261,965 | 2,619,806 |
| Walsin Lihwa Corp. | 1,322,000 | 1,234,948 |
| Wistron Corp. | 1,780,682 | 1,871,408 |
| WPG Holdings Ltd. | 879,880 | 1,643,721 |
| Yageo Corp. | 47,000 | 735,631 |
| Yuanta Financial Holding Co., Ltd. | 1,085,840 | 965,185 |
| 120,398,123 | ||
| Thailand 3.1% | ||
| Advanced Info Service PCL NVDR | 188,075 | 1,072,565 |
| Bangkok Bank PCL NVDR | 260,700 | 964,776 |
| Charoen Pokphand Foods PCL NVDR | 1,057,200 | 804,871 |
| CP ALL PCL NVDR | 621,500 | 1,200,772 |
| IRPC PCL | 5,962,300 | 772,457 |
| Kasikornbank PCL NVDR | 239,900 | 1,022,724 |
| Krung Thai Bank PCL NVDR | 2,495,700 | 866,260 |
| PTT Exploration & Production PCL NVDR | 322,400 | 1,140,442 |
| PTT Global Chemical PCL NVDR | 877,200 | 1,660,114 |
| PTT PCL NVDR | 5,738,570 | 6,570,478 |
| Thai Oil PCL NVDR | 601,400 | 1,009,198 |
| The Siam Cement PCL NVDR | 218,300 | 2,598,598 |
| The Siam Commercial Bank PCL NVDR | 611,300 | 2,324,265 |
| 22,007,520 | ||
| Turkey 1.4% | ||
| Akbank T.A.S. | 1,652,793 | 1,007,423 |
| BIM Birlesik Magazalar A/S | 86,182 | 557,126 |
| Eregli Demir ve Celik Fabrikalari T.A.S. | 478,431 | 998,963 |
| Haci Omer Sabanci Holding A/S | 660,320 | 768,727 |
| KOC Holding A/S | 474,171 | 1,162,986 |
| Turk Hava Yollari AO * | 553,769 | 843,972 |
| Turkcell Iletisim Hizmetleri A/S | 559,163 | 889,287 |
| Turkiye Garanti Bankasi A/S | 1,225,189 | 1,255,264 |
| Turkiye Is Bankasi A/S, Class C | 1,080,069 | 633,609 |
| Turkiye Petrol Rafinerileri A/S * | 100,298 | 1,443,391 |
| 9,560,748 | ||
| United Arab Emirates 1.0% | ||
| Abu Dhabi Commercial Bank PJSC | 462,542 | 1,045,179 |
| Emaar Properties PJSC | 1,164,006 | 1,274,272 |
| Emirates NBD Bank PJSC | 290,512 | 1,103,315 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Emirates Telecommunications Group Co. PJSC | 265,543 | 1,852,276 |
| First Abu Dhabi Bank PJSC | 381,998 | 1,854,082 |
| 7,129,124 | ||
| Total Common Stocks (Cost $493,707,401) | 670,590,224 | |
| PREFERRED STOCKS 4.8% OF NET ASSETS | ||
| Brazil 3.3% | ||
| Banco Bradesco S.A. | 1,407,816 | 4,963,950 |
| Centrais Eletricas Brasileiras S.A., Class B | 67,620 | 405,447 |
| Cia Energetica de Minas Gerais | 441,133 | 1,006,733 |
| Gerdau S.A. | 310,606 | 1,480,439 |
| Itau Unibanco Holding S.A. | 1,677,579 | 6,928,730 |
| Petroleo Brasileiro S.A. | 1,801,454 | 8,697,973 |
| 23,483,272 | ||
| Colombia 0.2% | ||
| Bancolombia S.A. | 141,223 | 1,267,571 |
| Russia 1.3% | ||
| Surgutneftegas PJSC | 3,186,700 | 1,736,116 |
| Tatneft PJSC | 62,167 | 428,023 |
| Transneft PJSC | 3,177 | 6,817,762 |
| 8,981,901 | ||
| Total Preferred Stocks (Cost $31,801,636) | 33,732,744 | |
| RIGHTS 0.0% OF NET ASSETS | ||
| Brazil 0.0% | ||
| Ultrapar Participacoes S.A. | ||
| expires 11/03/21 *(a) | 38,547 | 0 |
| India 0.0% | ||
| Reliance Industries Ltd. (Partly Paid Up) | ||
| expires 11/15/21 * | 9,054 | 230,771 |
| Total Rights (Cost $204,021) | 230,771 | |
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.6% OF NET ASSETS | ||
| Money Market Funds 0.1% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c)(d) | 757,337 | 757,337 |
| Time Deposits 0.5% | ||
| Brown Brothers Harriman & Co. | ||
| Hong Kong Dollar | ||
| 0.00%, 11/01/21 (e) | 2,383,995 | 306,407 |
| South African Rand | ||
| 2.15%, 11/02/21 (e) | 618,074 | 40,463 |
| Citibank NA | ||
| Euro | ||
| (0.79%), 11/01/21 (e)(f) | 6,389 | 7,386 |
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See financial notes
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
| SECURITY | NUMBER OF SHARES/ FACE AMOUNT | VALUE ($) |
| Royal Bank of Canada | ||
| U.S. Dollar | ||
| 0.01%, 11/01/21 (e) | 3,341,690 | 3,341,690 |
| 3,695,946 | ||
| Total Short-Term Investments (Cost $4,453,283) | 4,453,283 | |
| Total Investments in Securities (Cost $530,166,341) | 709,007,022 | |
| NUMBER OF CONTRACTS | NOTIONAL AMOUNT ($) | CURRENT VALUE/ UNREALIZED DEPRECIATION ($) | |
| FUTURES CONTRACTS | |||
| Long | |||
| MSCI Emerging Markets Index, expires 12/17/21 | 40 | 2,524,000 | (15,698) |
| * | Non-income producing security. |
| (a) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $717,811. |
| (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. |
| ADR — | American Depositary Receipt |
| GDR — | Global Depositary Receipt |
| NVDR — | Non-Voting Depositary Receipt |
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Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 Stocks1 | $— | $328,045,874 | $— | $328,045,874 |
| Brazil | 36,566,854 | — | — | 36,566,854 |
| Chile | 3,347,884 | 1,457,104 | — | 4,804,988 |
| China | 3,531,319 | 167,757,637 | 732,635 | 172,021,591 |
| Colombia | 1,981,418 | — | — | 1,981,418 |
| Czech Republic | 1,343,411 | — | — | 1,343,411 |
| Egypt | 828,683 | — | — | 828,683 |
| Malaysia | 7,226,095 | 5,056,502 | — | 12,282,597 |
| Mexico | 26,974,425 | — | — | 26,974,425 |
| Philippines | — | — | 751,842 | 751,842 |
| Qatar | 3,520,541 | — | — | 3,520,541 |
| Saudi Arabia | 9,583,554 | 11,140,825 | — | 20,724,379 |
| South Africa | 11,429,532 | 32,624,217 | — | 44,053,749 |
| Turkey | 4,872,086 | 4,688,662 | — | 9,560,748 |
| United Arab Emirates | 2,148,494 | 4,980,630 | — | 7,129,124 |
| Preferred Stocks1 | — | — | — | — |
| Brazil | 23,483,272 | — | — | 23,483,272 |
| Colombia | 1,267,571 | — | — | 1,267,571 |
| Russia | 1,736,116 | 7,245,785 | — | 8,981,901 |
| Rights 1 | — | 230,771 | — | 230,771 |
| Brazil | — | — | 0* | 0 |
| Short-Term Investments1 | — | 3,695,946 | — | 3,695,946 |
| Money Market Funds | 757,337 | — | — | 757,337 |
| Liabilities | ||||
| Futures Contracts2 | (15,698) | — | — | (15,698) |
| Total | $140,582,894 | $566,923,953 | $1,484,477 | $708,991,324 |
| * | Level 3 amount shown includes securities determined to have no value at October 31, 2021. |
| 1 | As categorized in the Portfolio Holdings. |
| 2 | Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $530,166,341) including securities on loan of $717,811 | $709,007,022 | |
| Foreign currency, at value (cost $767,832) | 767,064 | |
| Deposit with broker for futures contracts | 390,443 | |
| Receivables: | ||
| Fund shares sold | 1,369,832 | |
| Dividends | 620,718 | |
| Investments sold | 48,059 | |
| Income from securities on loan | + | 5,983 |
| Total assets | 712,209,121 | |
| Liabilities | ||
| Collateral held for securities on loan | 757,337 | |
| Payables: | ||
| Foreign capital gains tax | 3,392,759 | |
| Investment adviser fees | 238,369 | |
| Fund shares redeemed | 142,988 | |
| Variation margin on futures contracts | + | 25,865 |
| Total liabilities | 4,557,318 | |
| Net assets | $707,651,803 | |
| Net Assets by Source | ||
| Capital received from investors | $617,356,908 | |
| Total distributable earnings | + | 90,294,895 |
| Net assets | $707,651,803 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $707,651,803 | 69,096,118 | $10.24 | ||
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Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $3,608,321) | $29,158,489 | |
| Interest received from securities - unaffiliated | 1,176 | |
| Securities on loan, net | + | 66,535 |
| Total investment income | 29,226,200 | |
| Expenses | ||
| Investment adviser fees | + | 2,744,178 |
| Total expenses | – | 2,744,178 |
| Net investment income | 26,482,022 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized gains on sales of securities - unaffiliated (net of foreign capital gains tax paid of $806,009) | 11,562,634 | |
| Net realized losses on futures contracts | (390,608) | |
| Net realized losses on foreign currency transactions | + | (178,319) |
| Net realized gains | 10,993,707 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated (net of change in foreign capital gains tax of ($3,081,675)) | 184,427,045 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | 17,283 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 27,016 |
| Net change in unrealized appreciation (depreciation) | + | 184,471,344 |
| Net realized and unrealized gains | 195,465,051 | |
| Increase in net assets resulting from operations | $221,947,073 | |
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Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $26,482,022 | $19,610,903 | |
| Net realized gains (losses) | 10,993,707 | (42,020,057) | |
| Net change in unrealized appreciation (depreciation) | + | 184,471,344 | (86,035,304) |
| Increase (decrease) in net assets from operations | $221,947,073 | ($108,444,458) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($18,875,238) | ($26,542,518) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 19,964,352 | $189,960,789 | 36,046,335 | $278,152,407 | |
| Shares reinvested | 1,622,720 | 14,425,984 | 2,049,543 | 19,245,216 | |
| Shares redeemed | + | (25,791,975) | (249,940,985) | (37,357,533) | (283,186,415) |
| Net transactions in fund shares | (4,204,903) | ($45,554,212) | 738,345 | $14,211,208 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 73,301,021 | $550,134,180 | 72,562,676 | $670,909,948 | |
| Total increase (decrease) | + | (4,204,903) | 157,517,623 | 738,345 | (120,775,768) |
| End of period | 69,096,118 | $707,651,803 | 73,301,021 | $550,134,180 | |
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Schwab Fundamental Index Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) | |
| Schwab Fundamental US Large Company Index Fund | Schwab Target 2015 Fund |
| Schwab Fundamental US Small Company Index Fund | Schwab Target 2020 Fund |
| Schwab Fundamental International Large Company Index Fund | Schwab Target 2025 Fund |
| Schwab Fundamental International Small Company Index Fund | Schwab Target 2030 Fund |
| Schwab Fundamental Emerging Markets Large Company Index Fund | Schwab Target 2035 Fund |
| Schwab Fundamental Global Real Estate Index Fund | Schwab Target 2040 Fund |
| Schwab S&P 500 Index Fund | Schwab Target 2045 Fund |
| Schwab Small-Cap Index Fund® | Schwab Target 2050 Fund |
| Schwab U.S. Large-Cap Growth Index Fund | Schwab Target 2055 Fund |
| Schwab U.S. Large-Cap Value Index Fund | Schwab Target 2060 Fund |
| Schwab U.S. Mid-Cap Index Fund | Schwab Target 2065 Fund |
| Schwab Total Stock Market Index Fund® | Schwab Target 2010 Index Fund |
| Schwab International Index Fund® | Schwab Target 2015 Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Target 2020 Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Target 2025 Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Target 2030 Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Target 2035 Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Target 2040 Index Fund |
| Schwab Balanced Fund | Schwab Target 2045 Index Fund |
| Schwab Core Equity Fund | Schwab Target 2050 Index Fund |
| Schwab Dividend Equity Fund | Schwab Target 2055 Index Fund |
| Schwab Large-Cap Growth Fund | Schwab Target 2060 Index Fund |
| Schwab Small-Cap Equity Fund | Schwab Target 2065 Index Fund |
| Schwab Health Care Fund | Schwab Monthly Income Fund - Moderate Payout |
| Schwab International Core Equity Fund | Schwab Monthly Income Fund - Enhanced Payout |
| Schwab Target 2010 Fund | Schwab Monthly Income Fund - Maximum Payout |
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds’ Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (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 funds 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 funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
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Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.
• Foreign equity security fair valuation: The Board has adopted procedures to fair value foreign equity securities that are traded in markets that close prior to the funds valuing their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the NAV of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures.
• Futures contracts: Futures contracts are valued at their settlement prices as of the close of their exchanges.
• 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 each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1 — quoted prices in active markets for identical securities— Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, mutual funds, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the 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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Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value 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 funds’ own assumptions in determining the fair value of investments)— Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 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. A fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their value may change daily.
Passive Foreign Investment Companies: Certain funds may own shares in certain foreign corporations that meet the Internal Revenue Code definition of a Passive Foreign Investment Company (PFIC). The funds 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).
Securities Lending: Under the trust’s Securities Lending Program, a fund (lender), may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating pursuant to Rule 2a-7 under the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the funds or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. The aggregate fair value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan. 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 the investment adviser or any of its affiliates.
As of October 31, 2021, Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund had securities on loan, all of which were classified as
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
common stocks and rights. The value of the securities on loan and the related collateral as of October 31, 2021, if any, are disclosed in each fund’s Portfolio Holdings. The value of the securities on loan and the investment of cash collateral are disclosed in each fund’s Statement of Assets and Liabilities.
Cash Management Transactions: The funds may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances, 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 funds bear the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Gains realized by the funds on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized appreciation to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures contract position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends, in the form of cash or non-cash income such as in the form of additional securities, and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the date the ex-dividend date is confirmed. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. A non-recurring dividend with a payable date of October 29, 2021 and an ex-date of November 1, 2021 is presented in the Statements of Assets and Liabilities as Deferred dividend income payable.
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.
The Schwab Fundamental International Large Company Index Fund and Schwab Fundamental International Small Company Index Fund filed claims to recover taxes previously withheld in certain European Union countries on the basis that those countries had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. These filings are subject to various administrative and judicial proceedings within these countries, and all professional fees associated with these filings have been paid by the investment adviser. For additional details see Affiliates and Affiliated Transactions in financial note 4, Other Affiliated Transactions.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(e) Expenses:
Pursuant to an Amended and Restated Investment Advisory and Administration Agreement (Advisory Agreement) between the investment adviser and the trust, the investment adviser pays the operating expenses of each fund, excluding acquired fund fees and expenses, taxes, any brokerage expenses, and extraordinary or non-routine expenses. Taxes, any brokerage expenses and extraordinary or non-routine expenses that are specific to a fund are charged directly to the fund.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(g) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(i) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes accrued as of October 31, 2021, if any, are reflected in each fund’s Statement of Assets and Liabilities.
(j) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. 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 a fund will fluctuate, which means that an investor could lose money over short or long periods.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Tracking Error Risk. As an index fund, each fund seeks to track the performance of its respective index, although it may not be successful in doing so. The divergence between the performance of a fund and the index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.
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Financial Notes (continued)
3. Risk Factors (continued):
Investment Style Risk. The funds are index funds. Therefore, each fund follows the securities included in its respective index during upturns as well as downturns. Because of its indexing strategy, a fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of a fund’s expenses, a fund’s performance may be below that of the index. 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 an index’s rebalancing schedule. Such errors and/or market disruptions may result in losses for a fund.
Sampling Index Tracking Risk. To the extent a fund uses a sampling method, the fund may not fully replicate its respective index and may hold securities not included in the index. As a result, the fund is subject to the risk that the investment adviser’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. If a fund utilizes a sampling approach, it may not track the return of the index as well as it would if the fund purchased all of the securities in the index.
Concentration Risk. To the extent that a fund’s or its respective index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector, country or asset class.
Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, a fund’s performance could be impacted.
Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.
Small-Cap Company Risk. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.
Foreign Investment Risk. A fund’s investments in securities of foreign issuers involve certain risks that may be greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund’s investments, and could impair the fund’s ability to meet its investment objective or invest in accordance with its investment strategy. 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 may also include American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs) and European Depositary Receipts (EDRs), which may be less liquid than the underlying shares in their primary trading market and GDRs, many of which are issued by companies in emerging markets, may be more volatile. To the extent a fund’s investments in a single country or a limited number of countries represent a 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 and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in developed countries. As a result, there may be an increased risk of illiquidity and price volatility associated with a fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar, and, at times, it may be difficult to value such investments.
ETF Risk. Certain funds may purchase shares of ETFs to gain exposure to a particular portion of the market while awaiting an opportunity to purchase securities directly. When a fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a proportionate share of the ETF’s expenses. Therefore, it may be more costly to own an ETF than to own the underlying securities directly. In addition, while the risks of owning shares of an ETF generally reflect the risks of owning the underlying securities the ETF holds, lack of liquidity in the market for an ETF’s shares can result in its value being more volatile than the underlying portfolio securities.
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Financial Notes (continued)
3. Risk Factors (continued):
Derivatives Risk. Each fund may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right to buy or sell an instrument at a specific price before a specific date. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. A swap is an agreement whereby two parties agree to exchange payment streams calculated in relation to a rate, index, instrument or certain securities and a predetermined amount. A 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.
A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk and market risk, are discussed elsewhere. A fund’s use of derivatives is also subject to lack of availability risk, credit risk, leverage risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately large impact on the fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause the fund to realize higher amounts of short-term capital gains. A fund’s use of derivatives could reduce the fund’s performance, increase the fund’s volatility, and could cause the fund to lose more than the initial amount invested.
Liquidity Risk. A fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
Charles Schwab Investment Management, Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Advisory Agreement between it and the trust.
For its advisory services to the funds, the investment adviser is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
| SCHWAB FUNDAMENTAL US LARGE COMPANY INDEX FUND | SCHWAB FUNDAMENTAL US SMALL COMPANY INDEX FUND | SCHWAB FUNDAMENTAL INTERNATIONAL LARGE COMPANY INDEX FUND | SCHWAB FUNDAMENTAL INTERNATIONAL SMALL COMPANY INDEX FUND | SCHWAB FUNDAMENTAL EMERGING MARKETS LARGE COMPANY INDEX FUND |
| 0.25% | 0.25% | 0.25% | 0.39% | 0.39% |
The investment adviser has a licensing agreement with the Frank Russell Company to use certain Russell indices and trademarks in connection with the offering and operation of certain registered investment companies. The funds have entered into a sub-license agreement with the investment adviser pursuant to which the investment adviser has agreed to sub-license certain Russell indices and trademarks to the funds. The investment adviser pays all applicable licensing fees.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Investments from Affiliates
Certain funds in the Fund Complex (for definition refer to Trustees and Officers section) may own shares of other funds in the Fund Complex. The table below reflects the percentages of shares of each fund in this report that are owned by other funds in the Fund Complex as of October 31, 2021, as applicable:
| UNDERLYING FUNDS | |||||
| SCHWAB FUNDAMENTAL US LARGE COMPANY INDEX FUND | SCHWAB FUNDAMENTAL US SMALL COMPANY INDEX FUND | SCHWAB FUNDAMENTAL INTERNATIONAL LARGE COMPANY INDEX FUND | SCHWAB FUNDAMENTAL INTERNATIONAL SMALL COMPANY INDEX FUND | SCHWAB FUNDAMENTAL EMERGING MARKETS LARGE COMPANY INDEX FUND | |
| Schwab MarketTrack All Equity Portfolio | 1.7% | 2.0% | 3.6% | 6.0% | 6.0% |
| Schwab MarketTrack Balanced Portfolio | 0.9% | 0.9% | 1.4% | 2.3% | 2.2% |
| Schwab MarketTrack Conservative Portfolio | 0.3% | 0.3% | 0.5% | 0.8% | 0.8% |
| Schwab MarketTrack Growth Portfolio | 1.7% | 1.9% | 2.8% | 4.5% | 4.7% |
| Schwab Target 2010 Fund | 0.0%* | —% | —% | —% | —% |
| Schwab Target 2015 Fund | 0.0%* | —% | —% | —% | —% |
| Schwab Target 2020 Fund | 0.0%* | —% | —% | —% | —% |
| Schwab Target 2025 Fund | 0.0%* | —% | —% | —% | —% |
| Schwab Target 2030 Fund | 0.1% | —% | —% | —% | —% |
| Schwab Target 2035 Fund | 0.1% | —% | —% | —% | —% |
| Schwab Target 2040 Fund | 0.3% | —% | —% | —% | —% |
| Schwab Target 2045 Fund | 0.1% | —% | —% | —% | —% |
| Schwab Target 2050 Fund | 0.1% | —% | —% | —% | —% |
| Schwab Target 2055 Fund | 0.1% | —% | —% | —% | —% |
| Schwab Target 2060 Fund | 0.0%* | —% | —% | —% | —% |
| Schwab Target 2065 Fund | 0.0%* | —% | —% | —% | —% |
| * | Less than 0.05% |
Other Affiliated Transactions
The professional fees related to foreign withholding tax claims discussed in financial note 2 were non-routine expenses. The investment adviser agreed to pay these professional fees, on behalf of the funds, subject to reimbursement by the funds to the extent the funds are able to successfully recover taxes withheld in the future.
During the year ended October 31, 2021, the professional fees incurred by the Schwab Fundamental International Large Company Index Fund and Schwab Fundamental International Small Company Index Fund and paid by the investment adviser were $12,454 and $3,769, respectively.
During the year ended October 31, 2021, the Schwab Fundamental International Small Company Index Fund received a positive judgment of previously withheld foreign taxes from Finland. The Schwab Fundamental International Small Company Index Fund has recorded $141,664 (including $1,891 in interest) in income and receivable while awaiting payment from Finland. In addition, the Schwab Fundamental International Small Company Index Fund recorded a payable of $3,769 due to the investment adviser for professional fees that were subject to reimbursement. The above amounts are reflected in the Schwab Fundamental International Small Company Index Fund’s Statement of Assets and Liabilities and Statement of Operations. Amounts recorded as receivable and payable will be extinguished upon receipt of payment from Finland.
As of October 31, 2021, there are no additional professional fees related to foreign withholding tax subject to future reimbursement to the investment adviser for the Schwab Fundamental International Small Company Index Fund. The balance of professional fees related to foreign withholding tax subject to future reimbursement by the Schwab Fundamental International Large Company Index Fund is $82,994.
No other amounts for additional tax reclaims are reflected in the financial statements due to the uncertainty surrounding the ultimate resolution of proceedings, the likelihood of receipt of these claims, and the potential timing of payment.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex. All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
Interfund Transactions
The funds may engage in transactions with certain other funds in the Fund Complex 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 October 31, 2021, each fund’s total aggregate security transactions with other funds in the Fund Complex as well as any realized gains (losses) were as follows:
| TOTAL AGGREGATE TRANSACTIONS | REALIZED GAINS (LOSSES) | |
| Schwab Fundamental US Large Company Index Fund | $512,803,821 | $43,176,409 |
| Schwab Fundamental US Small Company Index Fund | 404,569,359 | 68,757,266 |
| Schwab Fundamental International Large Company Index Fund | 68,443,512 | 2,519,920 |
| Schwab Fundamental International Small Company Index Fund | 103,986,072 | 17,585,226 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 25,810,848 | 2,688,602 |
5. Board of Trustees:
The Board may include people who are officers and/or directors of the investment adviser 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 funds do not pay any interested or non-interested (independent trustees) trustees. The independent trustees are paid by the investment adviser. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the funds were participants with other funds in the Fund Complex in a joint, syndicated, committed $850 million line of credit (the Syndicated Credit Facility), which matured on September 30, 2021. On September 30, 2021, the Syndicated Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Syndicated Credit Facility, in addition to the investment adviser paying the interest charged on any borrowings by a fund, the investment adviser paid a commitment fee of 0.15% per annum on the funds’ proportionate share of the unused portion of the Syndicated Credit Facility.
During the period, the funds were participants 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, which matured on September 30, 2021. On September 30, 2021, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Uncommitted Credit Facility, the investment adviser pays interest on the amount a fund borrows. There were no borrowings from either line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is paid by the investment adviser. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
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Financial Notes (continued)
| 7. Derivatives: |
The funds entered into equity index futures contracts during the report period. The funds invested in futures contracts to equitize available cash. The value and variation margin for futures contracts held at October 31, 2021 are presented in the Portfolio Holdings and Statement of Assets and Liabilities, respectively. 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 funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended October 31, 2021, the month-end average notional amounts of futures contracts held by the funds and the month-end average number of contracts held were as follows:
| NOTIONAL AMOUNTS | NUMBER OF CONTRACTS | |
| Schwab Fundamental US Large Company Index Fund | $33,988,055 | 167 |
| Schwab Fundamental US Small Company Index Fund | 9,383,113 | 88 |
| Schwab Fundamental International Large Company Index Fund | 8,305,481 | 75 |
| Schwab Fundamental International Small Company Index Fund | 4,133,060 | 37 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 3,082,090 | 48 |
8. Purchases and Sales of Investment Securities:
For the period ended October 31, 2021, purchases and sales of securities (excluding in-kind transactions and short-term obligations) were as follows:
| PURCHASES OF SECURITIES | SALES OF SECURITIES | |
| Schwab Fundamental US Large Company Index Fund | $1,191,974,664 | $957,139,479 |
| Schwab Fundamental US Small Company Index Fund | 666,889,330 | 793,998,506 |
| Schwab Fundamental International Large Company Index Fund | 320,911,262 | 262,921,735 |
| Schwab Fundamental International Small Company Index Fund | 245,489,306 | 314,549,393 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 222,334,788 | 267,707,653 |
During the period ended October 31, 2021, the Schwab Fundamental US Large Company Index Fund and the Schwab Fundamental US Small Company Index Fund sold securities in connection with in-kind redemptions in the amounts of $136,957,846 and $111,293,679, respectively, resulting in realized gains of $122,294,000 and $88,127,743, respectively. The realized gains on sales of securities — unaffiliated are included in the Statement of Operations.
9. Federal Income Taxes:
As of October 31, 2021, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:
| TAX COST | GROSS UNREALIZED APPRECIATION | GROSS UNREALIZED DEPRECIATION | NET UNREALIZED APPRECIATION (DEPRECIATION) | |
| Schwab Fundamental US Large Company Index Fund | $3,645,594,426 | $3,349,221,565 | ($181,344,182) | $3,167,877,383 |
| Schwab Fundamental US Small Company Index Fund | 1,249,085,572 | 812,250,648 | (103,072,398) | 709,178,250 |
| Schwab Fundamental International Large Company Index Fund | 1,207,890,590 | 368,370,700 | (167,248,878) | 201,121,822 |
| Schwab Fundamental International Small Company Index Fund | 564,268,105 | 235,483,653 | (86,830,263) | 148,653,390 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 582,816,349 | 211,507,088 | (85,332,113) | 126,174,975 |
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Financial Notes (continued)
9. Federal Income Taxes (continued):
As of October 31, 2021, the components of distributable earnings on a tax basis were as follows:
| UNDISTRIBUTED ORDINARY INCOME | UNDISTRIBUTED LONG-TERM CAPITAL GAINS | NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS | NET OTHER UNREALIZED APPRECIATION (DEPRECIATION) | CAPITAL LOSS CARRYFORWARDS | TOTAL | |
| Schwab Fundamental US Large Company Index Fund | $110,946,354 | $187,778,508 | $3,167,877,383 | $— | $— | $3,466,602,245 |
| Schwab Fundamental US Small Company Index Fund | 41,271,208 | 155,433,634 | 709,178,250 | (8) | — | 905,883,084 |
| Schwab Fundamental International Large Company Index Fund | 44,691,528 | — | 201,121,822 | 18,631 | (29,187,856) | 216,644,125 |
| Schwab Fundamental International Small Company Index Fund | 18,160,118 | 19,542,009 | 148,653,390 | (19,873) | — | 186,335,644 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 25,185,156 | — | 126,174,975 | (3,396,661) | (57,668,575) | 90,294,895 |
The primary differences between book basis and tax basis unrealized appreciation or unrealized depreciation of investments are the tax deferral of losses on wash sales, realization for tax purposes of unrealized gains (losses) on futures contracts, the realization for tax purposes of unrealized appreciation on investments in Passive Foreign Investment Companies (PFIC) and partnership investments. The tax cost of the funds’ investments, disclosed above, have been adjusted from their book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.
Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2021, the funds had capital loss carryforwards available as follows:
| NO EXPIRATION | |
| Schwab Fundamental US Large Company Index Fund | $— |
| Schwab Fundamental US Small Company Index Fund | — |
| Schwab Fundamental International Large Company Index Fund | 29,187,856 |
| Schwab Fundamental International Small Company Index Fund | — |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 57,668,575 |
For the fiscal year ended October 31, 2021, the funds had capital loss carryforwards utilized as follows:
| CAPITAL LOSS CARRYFORWARDS UTILIZED | |
| Schwab Fundamental US Large Company Index Fund | $— |
| Schwab Fundamental US Small Company Index Fund | 30,790,317 |
| Schwab Fundamental International Large Company Index Fund | 26,611,717 |
| Schwab Fundamental International Small Company Index Fund | 29,274,468 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 14,166,883 |
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Financial Notes (continued)
9. Federal Income Taxes (continued):
The tax basis components of distributions paid during the current and prior fiscal years were as follows:
| CURRENT FISCAL YEAR END DISTRIBUTIONS | PRIOR FISCAL YEAR END DISTRIBUTIONS | |||
| ORDINARY INCOME | LONG-TERM CAPITAL GAINS | ORDINARY INCOME | LONG-TERM CAPITAL GAINS | |
| Schwab Fundamental US Large Company Index Fund | $121,671,839 | $186,884,443 | $135,286,528 | $145,433,758 |
| Schwab Fundamental US Small Company Index Fund | 24,462,415 | — | 27,292,972 | 43,502,511 |
| Schwab Fundamental International Large Company Index Fund | 28,299,152 | — | 48,541,581 | — |
| Schwab Fundamental International Small Company Index Fund | 13,332,524 | — | 21,815,081 | — |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 18,875,238 | — | 26,542,518 | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations.
As of October 31, 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 funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the fiscal year ended October 31, 2021, the funds 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Schwab Capital Trust and Shareholders of Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities, including the portfolio holdings, of Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund (the “Funds”), five of the funds constituting Schwab Capital Trust, as of October 31, 2021, and the related statements of operations for the year then ended, the related statements of changes in net assets and the financial highlights for the two years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds as of October 31, 2021, the results of their operations for the year then ended, and the changes in their net assets and the financial highlights for the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America. The financial highlights for each of the three years in the period ended October 31, 2019 were audited by other auditors, whose report, dated December 16, 2019, expressed an unqualified opinion on such financial highlights.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Denver, Colorado
December 16, 2021
Denver, Colorado
December 16, 2021
We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.
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Other Federal Tax Information (unaudited)
The funds elect to pass through under section 853 of the Internal Revenue Code foreign tax credit to its shareholders for the fiscal year ended October 31, 2021, and the respective foreign source income on the funds as follows.
| FOREIGN TAX CREDIT | FOREIGN SOURCE INCOME | |
| Schwab Fundamental US Large Company Index Fund | $— | $— |
| Schwab Fundamental US Small Company Index Fund | — | — |
| Schwab Fundamental International Large Company Index Fund | 3,811,448 | 47,314,015 |
| Schwab Fundamental International Small Company Index Fund | 1,824,604 | 17,566,253 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 4,377,852 | 32,748,108 |
For corporate shareholders, the following percentage of the funds’ dividend distributions paid during the fiscal year ended October 31, 2021, qualify for the corporate dividends received deduction:
| PERCENTAGE | |
| Schwab Fundamental US Large Company Index Fund | 95.18 |
| Schwab Fundamental US Small Company Index Fund | 66.55 |
| Schwab Fundamental International Large Company Index Fund | — |
| Schwab Fundamental International Small Company Index Fund | — |
| Schwab Fundamental Emerging Markets Large Company Index Fund | — |
For the fiscal year ended October 31, 2021, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS Form 1099 of the amounts for use in preparing their 2021 income tax return.
| Schwab Fundamental US Large Company Index Fund | $120,504,610 |
| Schwab Fundamental US Small Company Index Fund | 16,826,848 |
| Schwab Fundamental International Large Company Index Fund | 30,538,514 |
| Schwab Fundamental International Small Company Index Fund | 11,790,597 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 15,458,756 |
Under section 852(b)(3)(C) of the Internal Revenue Code, certain funds hereby designate the following amounts as long-term capital gain dividends for the fiscal year ended October 31, 2021:
| Schwab Fundamental US Large Company Index Fund | $186,884,443 |
| 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 | — |
For the fiscal year ended October 31, 2021, the funds designate the following amounts as dividends eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amounts for use in preparing their 2021 income tax return.
| Schwab Fundamental US Large Company Index Fund | $321,633 |
| Schwab Fundamental US Small Company Index Fund | 716,434 |
| Schwab Fundamental International Large Company Index Fund | — |
| Schwab Fundamental International Small Company Index Fund | — |
| Schwab Fundamental Emerging Markets Large Company Index Fund | — |
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Liquidity Risk Management Program (Unaudited)
The Funds have adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Funds’ Board of Trustees (the “Board”) has designated the Funds’ investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.
Under the program, the investment adviser manages a Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. The program is reasonably designed to assess and manage a Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each Fund’s investments is supported by third-party liquidity assessment vendors.
The Funds’ Board reviewed a report at its meeting held on September 20, 2021 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2020, through May 31, 2021, which included individual Fund liquidity risk metrics. No significant liquidity events impacting any of the Funds were noted in the report. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing each Fund’s liquidity risk.
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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. (dba Schwab Asset Management) (the investment adviser) with respect to the existing funds in the Trust, including Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund (each, a Fund and collectively, the Funds), and to review certain other agreements pursuant to which the investment adviser 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 the investment adviser, including information about the investment adviser’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 the investment adviser seeking certain relevant information. The responses by the investment adviser 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 Funds that the Board reviews during the course of each year, including information that relates to the Funds’ 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 the investment adviser 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 Funds at meetings held on May 12, 2021 and June 8, 2021, and approved the renewal of the Agreement with respect to the Funds 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 Funds 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 each Fund under the Agreement, including the resources of the investment adviser and its affiliates dedicated to the Funds; |
| 2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds and benchmark data; |
| 3. | each Fund’s expenses and how those expenses compared to those of certain other similar mutual funds; |
| 4. | the profitability of the investment adviser and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to each Fund, including both direct and indirect benefits accruing to the investment adviser and its affiliates; and |
| 5. | the extent to which economies of scale would be realized as each 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 the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, the investment adviser’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 the investment adviser relating to services and support provided with respect to each 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
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oversight. The Trustees also considered investments the investment adviser has made in its infrastructure, including modernizing the investment adviser’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 Funds and their shareholders. The Trustees considered the investment adviser’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 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 the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered each Fund’s performance in determining whether to renew the Agreement with respect to such Fund. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and applicable indices/benchmarks, in light of total return, portfolio yield (if applicable) and market trends, as well as in consideration of each 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 each Fund, the Trustees considered the risk profile for such Fund and such 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 Schwab Fundamental Emerging Markets Large Company Index 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 the investment adviser that were reasonable and consistent with the Fund’s investment objective and policies and that the investment adviser 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 each Fund supported renewal of the Agreement with respect to such Fund.
Fund Expenses. With respect to each Fund’s expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of other similar mutual funds, such peer groups and comparisons having been selected and calculated by an independent provider of investment company data. The investment adviser reported to the Board, and the Board took into account, the risk assumed by the investment adviser in the development of the Funds and provision of services as well as the competitive marketplace for financial products. The Trustees also considered fees charged by the investment adviser 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 the investment adviser 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 each Fund are reasonable and supported renewal of the Agreement with respect to such Fund.
Profitability. The Trustees considered the compensation flowing to the investment adviser 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 the investment adviser 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 Funds and other funds in the complex. The Trustees also considered any other benefits derived by the investment adviser from its relationship with the Funds, such as whether, by virtue of its management of the Funds, the investment adviser 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 Funds under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds by the investment adviser and its affiliates. The Trustees noted that the investment adviser continues to invest substantial sums in its business in order to provide enhanced research capabilities, services and systems to benefit the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of the investment adviser with respect to each Fund is reasonable and supported renewal of the Agreement with respect to such Fund.
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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 and whether those are passed along to a Fund’s shareholders by way of the relatively low advisory fee and unitary fee structure of the Funds through (i) the enhancement of services provided to the Funds in return for fees paid, including through investments by the investment adviser in the investment adviser’s infrastructure, including modernizing the investment adviser’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 Funds and their shareholders; (ii) graduated investment advisory fee schedules or unitary fee structures, fee waivers, or expense caps by the investment adviser 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 the investment adviser has shared any economies of scale with the Funds by investing in the investment adviser’s infrastructure, as discussed above, over time and that the investment adviser’s internal costs of providing investment management, technology, administrative, legal and compliance services to
the Funds continue to increase as a result of regulatory or other developments. The Trustees considered that the investment adviser and its affiliates may employ contractual expense caps to protect shareholders from high fees when fund assets are relatively small, for example, in the case of newer funds or funds with investment strategies that are from time to time out of favor, because, among other reasons, shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that each 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 Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of the services provided and the related expenses borne by the investment adviser 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 funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 103 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| Independent Trustees | |||
| Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
| Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 103 | 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. | 103 | 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). | 103 | 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. | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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 and Chief Executive Officer (Oct. 2008 – present) and President (Oct. 2008 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), 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 – Oct. 2021), Charles Schwab Investment Management, Inc. | 103 | 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. | 103 | 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 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.; 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 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.; 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 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.; 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 |
| 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., the investment adviser for the trusts in the Fund Complex, and is an employee 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. 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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Schwab Fundamental Index Funds
Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
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.
Bloomberg US Treasury Bills 1–3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $300 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
Fundamental Developed ex-U.S. Large Company Spliced Index An internally calculated index comprised of the FTSE RAFI Developed ex-US 1000 Index from inception of the Schwab Fundamental International Large Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI Developed ex US Large Company Index (Net) from October 19, 2012 forward, when the Fund began tracking the index. The FTSE RAFI Developed ex-US 1000 Index
is composed of the largest 1,000 listed companies incorporated outside the United States, ranked by four fundamental financial measures of size: sales, cash flows, book value and dividends. The index is rebalanced and reconstituted annually.
Fundamental Developed ex-U.S. Small Company Spliced Index An internally calculated index comprised of the FTSE RAFI Developed ex US Mid Small 1500 Index from inception of the Schwab Fundamental International Small Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI Developed ex US Small Company Index (Net) from October 19, 2012 forward, when the Fund began tracking the index. The FTSE RAFI Developed ex US Mid Small 1500 Index is designed to track the performance of small- and mid-capitalization equities of companies domiciled in developed international markets (excluding the U.S.), selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.
Fundamental Emerging Markets Large Company Spliced Index An internally calculated index comprised of the FTSE RAFI Emerging Index from inception of the Schwab Fundamental Emerging Markets Large Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI Emerging Markets Large Company Index (Net) from October 19, 2012 forward, when the Fund began tracking the index. The FTSE RAFI Emerging Index is designed to track the performance of the largest emerging market equities, selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.
Fundamental U.S. Large Company Spliced Index An internally calculated index comprised of the FTSE RAFI US 1000 Index from inception of the Schwab Fundamental US Large Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI US Large Company Index from October 19, 2012 forward, when the Fund began tracking the index. The FTSE RAFI US 1000 Index is designed to track the performance of the largest U.S. equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The 1,000 equities with the highest fundamental strength are weighted by their fundamental scale. The fundamentally weighted portfolio is rebalanced and reconstituted annually.
Fundamental U.S. Small Company Spliced Index An internally calculated index comprised of the FTSE RAFI US Mid Small 1500 Index from inception of the Schwab Fundamental US Small Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI US Small Company Index from October 19, 2012 forward, when the Fund began tracking the index. The FTSE RAFI US Mid Small 1500 Index is composed of approximately 1,500 listed small and medium sized companies incorporated in the United States, ranked by fundamental value. The fundamentally weighted portfolio is rebalanced and reconstituted annually.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
restricted and illiquid securities Restricted securities are securities that are subject to legal restrictions on their sale. Restricted securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933 (the 1933 Act), or in a registered public offering. Certain restricted securities, such as Section 4(a)(2) commercial paper and Rule 144A securities under the 1933 Act, may be considered to be liquid if they meet the criteria for liquidity established by the Board. Illiquid securities generally are any securities that cannot be disposed of promptly and in the ordinary course of business at approximately the amount at which a fund has valued the instruments. The liquidity of a fund’s investments is monitored under the supervision and direction of the Board. Investments currently not considered liquid include repurchase agreements not maturing within seven days and certain restricted securities.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 1000 Growth Index An index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000 Index An index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell 1000 Value Index An index that measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell RAFI Developed ex US Large Company Index (Net) An index that ranks developed ex-U.S. companies in the FTSE Global Total Cap Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5%. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net
series reduces index performance by adjusting for local taxes. Selecting the developed ex-U.S. companies in the FTSE Global Total Cap Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Developed ex US Small Company Index (Net) An index that ranks developed ex-U.S. companies in the FTSE Global Total Cap Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores rank below the 87.5% threshold. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. Selecting the developed ex-U.S. companies in the FTSE Global Total Cap Index measures the performance of the smallest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Emerging Markets Large Company Index (Net) An index that ranks emerging market companies in the FTSE Global Total Cap Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5%. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. Selecting the emerging companies in the FTSE Global Total Cap Index measures the performance of the investable securities in emerging countries globally.
Russell RAFI US Large Company Index An index that ranks U.S. companies in the FTSE Global Total Cap Index. The Russell RAFI US Large Company Index includes only those securities that are members of the U.S. portion whose fundamental scores are in the top 87.5%. 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.
Russell RAFI US Small Company Index An index that ranks U.S. companies in the FTSE Global Total Cap Index. The Russell RAFI US Small Company Index includes only those securities that are members of the U.S. portion and rank below the 87.5% fundamental score threshold. 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.
S&P Developed ex-U.S. Small Cap Index (Net) An index composed of the stocks representing the lowest 15% of float-adjusted market cap in each developed market country, excluding the U.S. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
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Schwab Fundamental Index Funds
Schwab Asset Management
With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Schwab Asset 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., dba Schwab Asset Management
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds
1-877-824-5615
© 2021 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
Member SIPC®
Printed on recycled paper.
| ¹ | State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation. |
| ² | 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. |
Annual Report | October 31, 2021
Schwab MarketTrack Portfolios®
Schwab MarketTrack
All Equity Portfolio™
All Equity Portfolio™
Schwab MarketTrack
Growth Portfolio™
Growth Portfolio™
Schwab MarketTrack
Balanced Portfolio™
Balanced Portfolio™
Schwab MarketTrack
Conservative Portfolio™
Conservative Portfolio™
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Schwab MarketTrack Portfolios
In This Report
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset ManagementTM
Distributor: Charles Schwab & Co., Inc. (Schwab)
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Portfolios
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 Return for the 12 Months Ended October 31, 2021 | |
| Schwab MarketTrack All Equity Portfolio (Ticker Symbol: SWEGX) | 43.90% |
| All Equity Composite Index | 44.56% |
| Fund Category: Morningstar Allocation—85%+ Equity1 | 38.54% |
| Performance Details | pages 7-9 |
| Schwab MarketTrack Growth Portfolio (Ticker Symbol: SWHGX) | 34.32% |
| Growth Composite Index | 35.01% |
| Fund Category: Morningstar Allocation—70% to 85% Equity1 | 31.63% |
| Performance Details | pages 10-12 |
| Schwab MarketTrack Balanced Portfolio (Ticker Symbol: SWBGX) | 24.66% |
| Balanced Composite Index | 25.26% |
| Fund Category: Morningstar Allocation—50% to 70% Equity1 | 25.43% |
| Performance Details | pages 13-15 |
| Schwab MarketTrack Conservative Portfolio (Ticker Symbol: SWCGX) | 15.50% |
| Conservative Composite Index | 16.15% |
| Fund Category: Morningstar Allocation—30% to 50% Equity1 | 16.46% |
| Performance Details | pages 16-18 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
The components that make up each of the composite indices may vary over time. For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
| 1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Portfolios
From the President
Jonathan de St. Paer
President of Schwab Asset
Management and the funds
covered in this report.
President of Schwab Asset
Management and the funds
covered in this report.
Dear Shareholder,
During the 12-month reporting period ended October 31, 2021, global equity markets generally gained ground as economies began to recover from COVID-19 pandemic lockdowns and corporations generally posted stronger-than-expected profits. The S&P 500® Index, a bellwether for the overall U.S. stock market, rose 42.9%, reaching record territory as the period ended, while the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.2%. A far more complex story lay beneath those broad gains. Skyrocketing oil and gas prices propelled the energy sector ahead of other sectors, while the financials sector sharply outperformed on strong earnings and rising interest rates. Other cyclically sensitive sectors, such as the information technology and real estate sectors, also outperformed, while more traditionally defensive sectors, such as the utilities and consumer staples sectors, trailed by comparison. U.S. fixed-income markets produced mixed results in the face of inflationary pressures, with high returns among lower-rated bonds compared to their investment-grade counterparts and corporates over government-issued securities.
While there are always winners and losers among various markets, sectors, and individual stocks, today’s top performers are rarely the same as yesterday’s or tomorrow’s. At Schwab Asset Management, we believe the best defense against a shifting investment landscape is a portfolio that’s diversified across a wide variety of asset classes and geographical regions. The Schwab MarketTrack Portfolios offer a convenient way of implementing a diversified, long-term plan based on your risk tolerance and investment goals, combining investments in Schwab Fundamental Index Funds, which select and weight stocks based on fundamental measures of company size rather than market capitalization, traditional market-cap index strategies, and bond funds. In addition, all four funds invest solely in passive strategies, which keeps costs down. For those with a longer time horizon and a greater tolerance for volatility, the Schwab MarketTrack All Equity Portfolio provides a diversified all-stock solution. At the other end of the risk spectrum, the Schwab MarketTrack Conservative Portfolio has a larger allocation to bond holdings for investors who are more risk averse or seeking short-term stability of their investment. The Schwab MarketTrack Growth Portfolio and the Schwab MarketTrack Balanced Portfolio fill out the offerings in between.
Thank you for investing with Schwab Asset Management, and for trusting us to help you achieve your financial goals. For more information about the Schwab MarketTrack Portfolios, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.schwabassetmanagement.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
“ At Schwab Asset Management, we believe the best defense against a shifting investment landscape is a portfolio that’s diversified across a wide variety of asset classes and geographical regions.”
Fundamental Index is a registered trademark of Research Affiliates LLC.
Past performance is no guarantee of future results.
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Management views may have changed since the report date.
Schwab Asset Management is the dba name for Charles Schwab Investment Management, Inc., the investment adviser for Schwab Funds, Laudus Funds, and Schwab ETFs.
| * | 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 MarketTrack Portfolios | Annual Report
Schwab MarketTrack Portfolios
The Investment Environment
For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 42.91% with cyclically sensitive sectors, such as the energy, financials, information technology, and real estate sectors outperforming traditionally defensive sectors, such as the utilities and consumer staples sectors. U.S. small-cap stocks outperformed U.S. large-cap stocks, with the Russell 2000® Index and the Russell 1000® Index returning 50.80% and 43.51%, respectively. Among U.S. large-caps, value stocks slightly outperformed growth stocks, with the Russell 1000® Value Index and Russell 1000® Growth Index returning 43.76% and 43.21%, respectively. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. Among international markets, the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.18% and the MSCI Emerging Markets Index (Net)* returned 16.96%. The Bloomberg US Aggregate Bond Index returned -0.48% and the FTSE non-US Dollar World Government Bond Index returned -4.32%.
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. U.S. gross domestic product (GDP) rose at an annualized rate of 4.3% for the fourth quarter of 2020, 6.4% for the first quarter of 2021, and 6.7% for the second quarter of 2021 before falling back to 2.0% for the third quarter of 2021 amid fading government stimuli, persistent inflation, and a new surge in COVID-19 cases. Unemployment, which skyrocketed in April 2020, fell over the reporting period. Inflation, which had remained well below the Fed’s traditional 2% target until it jumped in March 2021, continued to rise through June 2021 and remained elevated through October 2021, largely due to 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.
Asset Class Performance Comparison % returns during the 12 months ended October 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 an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and Schwab Asset Management.
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 MarketTrack Portfolios | Annual Report
Schwab MarketTrack Portfolios
The Investment Environment (continued)
Outside the United States, global economies also displayed resilience but were somewhat more constrained amid continuing struggles against COVID-19 and the emergence and spread of the Delta variant. Oil prices rose through most of the reporting period, except for a dip in July and August, on growing demand and reduced production. In the eurozone, GDP growth jumped in the third quarter of 2020, regaining much of its losses from the second quarter, but turned slightly negative for both the fourth quarter of 2020 and the first quarter of 2021. GDP growth turned positive for the second and third quarters of 2021. The United Kingdom, which was particularly hard-hit by the COVID-19 pandemic, suffered its biggest slump in more than three centuries over the course of 2020, effectively wiping out its growth over the past seven years, but posted a small positive gain in GDP for the first quarter of 2021. The United Kingdom removed many of the country’s stringent restrictions during the summer and posted a strong gain in GDP growth for the second quarter of 2021. Japan’s economy, after rebounding sharply in the third quarter of 2020, posted a positive, albeit smaller, gain in the fourth quarter of 2020. Japan’s economy subsequently contracted in the first quarter of 2021 on a resurgence of COVID-19 cases and slow COVID-19 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, maintained positive GDP growth in the fourth quarter of 2020. China’s GDP growth accelerated sharply for the first quarter of 2021 before easing for the subsequent two quarters in part because of the political landscape and an emphasis on domestic consumption over globalization. India, after plunging into one of the worst recessions of any major economy, saw its first positive gain in GDP in the fourth quarter of 2020 and posted a sharp jump in GDP growth for the second quarter of 2021.
For the most part, central banks around the world, including the Fed, 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 United States, 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 needed to achieve a full recovery. The Fed maintained the federal funds rate in a range of 0.00% to 0.25% throughout the reporting period. However, as inflation continued to rise for most of 2021, the Fed tightened its stance, signaling that—due to significant progress made on its twin goals of maximum employment and price stability—it could start to reduce its bond-buying program as soon as late 2021 and could begin to raise interest rates in the next 18 months. In developed international markets, most central banks were similarly accommodative while acknowledging that conditions were changing. The European Central Bank held interest rates at 0.00%, unchanged since March 2016, but reduced the pace of its asset purchase program instituted 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—despite citing moderately improving conditions—vowed to continue to maintain stability in its financial markets through its ongoing programs. The Bank of England maintained its key official bank rate at 0.1% and continued to support its bond-buying program. Emerging markets were mixed. Central banks in China, India, and Indonesia maintained their low rates to help counter the ongoing effects of the COVID-19 pandemic. Mexico, Brazil, Russia, and Pakistan raised their rates, citing a stronger-than-expected recovery or to counteract the impacts of inflation.
U.S. bond prices drifted lower early in the reporting period, driving yields higher, in anticipation of a new fiscal aid package and hope for economic improvement in 2021. (Bond yields and bond prices typically move in opposite directions.) After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns. The yield on the 10-year U.S. Treasury, which began the reporting period at 0.88%, ended the period at 1.55%. Short-term rates, which have also remained historically low, fell further over the reporting period, with three-month U.S. Treasury yields beginning the period at 0.09% and ending it at 0.05%.
5
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Portfolios
Fund Management
 | Zifan Tang, Ph.D., CFA, Senior Portfolio Manager, is responsible for the co-management of the funds. Prior to joining Schwab in 2012, Ms. Tang was a product manager at Thomson Reuters and from 1997 to 2009 worked as a portfolio manager at Barclays Global Investors (now known as BlackRock). |
 | Patrick Kwok, CFA, Portfolio Manager, is responsible for the co-management of the funds. Previously, Mr. Kwok served as an associate portfolio manager from 2012 to 2016. Prior to that, he worked as a fund administration manager, where he was responsible for oversight of sub-advisers, trading, cash management, and fund administration supporting the Charles Schwab Trust Bank Collective Investment Trusts and multi-asset Schwab Funds. Prior to joining Schwab Asset Management in 2008, Mr. Kwok spent two years as an asset operations specialist at Charles Schwab Trust Company. He also worked for one year at State Street Bank & Trust as a portfolio accountant and pricing specialist. |
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack All Equity Portfolio as of October 31, 2021
The Schwab MarketTrack All Equity Portfolio (the fund) seeks high capital growth through an all-stock portfolio. To pursue its goal, the fund maintains a defined asset allocation. The fund’s target allocation is 100% in stock investments, with certain percentages for different segments of the stock market. For the 12-month reporting period ended October 31, 2021, the fund remained close to the target allocations of 50% in U.S. large-cap, 30% in international, and 15% in U.S. small cap-stocks. The fund invests mainly in other affiliated Schwab Funds, including index funds and exchange-traded funds (ETFs), which seek to track or replicate the total returns of various market indices. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way.
Performance. For the 12-month reporting period ended October 31, 2021, the fund returned 43.90%. The fund’s custom blended comparative index, the All Equity Composite Index (the composite index), returned 44.56%.
Positioning and Strategies. Over the reporting period, the fund’s asset allocations were broadly in line with those of the composite index.
The fund’s U.S. equity allocations contributed the most to the total return of the fund. The Schwab S&P 500 Index Fund contributed to the total return of the fund, returning approximately 43% for the reporting period. The Schwab S&P 500 Index Fund was the largest contributor to the total return of the fund, largely due to the Schwab S&P 500 Index Fund’s large position within the fund. The Schwab Fundamental US Large Company Index Fund also contributed to the total return of the fund, returning approximately 51% for the reporting period. The Schwab Small-Cap Index Fund and Schwab Fundamental US Small Company Index Fund also contributed to the total return of the fund, returning approximately 51% and 64%, respectively, for the reporting period. The Schwab U.S. Large-Cap Growth Index Fund also contributed to the total return of the fund, returning approximately 43% for the reporting period.
The fund’s international equity allocations also contributed to the total return of the fund, with the Schwab International Index Fund returning approximately 34% for the reporting period. The Schwab Fundamental International Large Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund also contributed to the total return of the fund, returning approximately 44% and 41%, respectively, for the reporting period, but both detracted from the relative performance of the fund. The Schwab Fundamental International Small Company Index Fund also contributed to the total return of the fund, returning approximately 37% for the reporting period.
The fund’s real estate allocation, Schwab U.S. REIT ETF, also contributed to the total return of the fund, returning approximately 46% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
7
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack All Equity Portfolio
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab MarketTrack All Equity Portfolio (5/19/98) | 43.90% | 14.17% | 12.15% |
| S&P 500® Index | 42.91% | 18.93% | 16.21% |
| All Equity Composite Index | 44.56% | 14.70% | 12.69% |
| Fund Category: Morningstar Allocation—85%+ Equity2 | 38.54% | 13.79% | 11.74% |
| Fund Expense Ratio3: 0.53% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.13% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Reflects the total annual fund operating expenses without contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
8
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack All Equity Portfolio
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 11 |
| Portfolio Turnover Rate | 6% |
Asset Class Weightings % of Investments1
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Growth Portfolio as of October 31, 2021
The Schwab MarketTrack Growth Portfolio (the fund) seeks high capital growth with less volatility than an all-stock portfolio. To pursue its goal, the fund maintains a defined asset allocation. The fund’s target allocation includes stock, bond, and cash investments. For the 12-month reporting period ended October 31, 2021, the fund remained close to the target allocations of 80% equity, 16% fixed income, and 4% cash and cash equivalents (including money market funds). The fund invests mainly in other affiliated Schwab Funds, including index funds and exchange-traded funds (ETFs), which seek to track or replicate the total returns of various market indices. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the fund returned 34.32%. The fund’s custom blended comparative index, the Growth Composite Index (the composite index), returned 35.01%.
Positioning and Strategies. Over the reporting period, the fund’s asset allocations were broadly in line with those of the composite index.
The fund’s U.S. equity allocations contributed the most to the total return of the fund. The Schwab S&P 500 Index Fund contributed to the total return of the fund, returning approximately 43% for the reporting period. The Schwab S&P 500 Index Fund was the largest contributor to the total return of the fund, largely due to the Schwab S&P 500 Index Fund’s large position within the fund. The Schwab Fundamental US Large Company Index Fund also contributed to the total return of the fund, returning approximately 51% for the reporting period. The Schwab Small-Cap Index Fund and Schwab Fundamental US Small Company Index Fund also contributed to the total return of the fund, returning approximately 51% and 64%, respectively, for the reporting period. The Schwab U.S. Large-Cap Growth Index Fund also contributed to the total return of the fund, returning approximately 43% for the reporting period.
The fund’s international equity allocations also contributed to the total return of the fund, with the Schwab International Index Fund returning approximately 34% for the reporting period. The Schwab Fundamental International Large Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund also contributed to the total return of the fund, returning approximately 44% and 41%, respectively, for the reporting period, but both detracted from the relative performance of the fund. The Schwab Fundamental International Small Company Index Fund also contributed to the total return of the fund, returning approximately 37% for the reporting period.
The fund’s real estate allocation, Schwab U.S. REIT ETF, also contributed to the total return of the fund, returning approximately 46% for the reporting period.
The fund’s fixed-income allocation, Schwab U.S. Aggregate Bond Index Fund, detracted from the total return of the fund, returning approximately -1% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Growth Portfolio
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab MarketTrack Growth Portfolio (11/20/95) | 34.32% | 12.28% | 10.56% |
| S&P 500® Index | 42.91% | 18.93% | 16.21% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Growth Composite Index | 35.01% | 12.79% | 11.07% |
| Fund Category: Morningstar Allocation—70% to 85% Equity2 | 31.63% | 11.72% | 9.88% |
| Fund Expense Ratio3: 0.51% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.11% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Reflects the total annual fund operating expenses without contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
11
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Growth Portfolio
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 14 |
| Portfolio Turnover Rate | 8% |
Asset Class Weightings % of Investments1
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Balanced Portfolio as of October 31, 2021
The Schwab MarketTrack Balanced Portfolio (the fund) seeks both capital growth and income. To pursue its goal, the fund maintains a defined asset allocation. The fund’s target allocation includes bond, stock and cash investments. For the 12-month reporting period ended October 31, 2021, the fund remained close to the target allocations of 60% equity, 36% fixed income, and 4% cash and cash equivalents (including money market funds). The fund invests mainly in other affiliated Schwab Funds, including index funds and exchange-traded funds (ETFs), which seek to track or replicate the total returns of various market indices. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the fund returned 24.66%. The fund’s custom blended comparative index, the Balanced Composite Index (the composite index), returned 25.26%.
Positioning and Strategies. Over the reporting period, the fund’s asset allocations were broadly in line with those of the composite index.
The fund’s U.S. equity allocations contributed the most to the total return of the fund. The Schwab S&P 500 Index Fund contributed to the total return of the fund, returning approximately 43% for the reporting period. The Schwab S&P 500 Index Fund was the largest contributor to the total return of the fund, largely due to the Schwab S&P 500 Index Fund’s large position within the fund. The Schwab Fundamental US Large Company Index Fund also contributed to the total return of the fund, returning approximately 51% for the reporting period. The Schwab Small-Cap Index Fund and Schwab Fundamental US Small Company Index Fund also contributed to the total return of the fund, returning approximately 51% and 64%, respectively, for the reporting period. The Schwab U.S. Large-Cap Growth Index Fund also contributed to the total return of the fund, returning approximately 43% for the reporting period.
The fund’s international equity allocations also contributed to the total return of the fund, with the Schwab International Index Fund returning approximately 34% for the reporting period. The Schwab Fundamental International Large Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund also contributed to the total return of the fund, returning approximately 44% and 41%, respectively, for the reporting period, but both detracted from the relative performance of the fund. The Schwab Fundamental International Small Company Index Fund also contributed to the total return of the fund, returning approximately 37% for the reporting period.
The fund’s real estate allocation, Schwab U.S. REIT ETF, also contributed to the total return of the fund, returning approximately 46% for the reporting period.
The fund’s fixed-income allocation detracted from the total return of the fund. The Schwab U.S. Aggregate Bond Index Fund returned approximately -1% for the reporting period and was the largest detractor from the total return of the fund. The Schwab Short-Term Bond Index Fund also detracted from the total return of the fund, returning approximately -1% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
13
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Balanced Portfolio
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab MarketTrack Balanced Portfolio (11/20/95) | 24.66% | 9.93% | 8.57% |
| S&P 500® Index | 42.91% | 18.93% | 16.21% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Balanced Composite Index | 25.26% | 10.45% | 9.11% |
| Fund Category: Morningstar Allocation—50% to 70% Equity2 | 25.43% | 10.66% | 9.15% |
| Fund Expense Ratio3: 0.49% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.09% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Reflects the total annual fund operating expenses without contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
14
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Balanced Portfolio
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 15 |
| Portfolio Turnover Rate | 10% |
Asset Class Weightings % of Investments1
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
15
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Conservative Portfolio as of October 31, 2021
The Schwab MarketTrack Conservative Portfolio (the fund) seeks income and more growth potential than an all-bond portfolio. To pursue its goal, the fund maintains a defined asset allocation. The fund’s target allocation includes bond, stock and cash investments. For the 12-month reporting period ended October 31, 2021, the fund remained close to the target allocations of 56% fixed income, 40% equity, and 4% cash and cash equivalents (including money market funds). The fund invests mainly in other affiliated Schwab Funds, including index funds and exchange-traded funds (ETFs), which seek to track or replicate the total returns of various market indices. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the fund returned 15.50%. The fund’s custom blended comparative index, the Conservative Composite Index (the composite index), returned 16.15%.
Positioning and Strategies. Over the reporting period, the fund’s asset allocations were broadly in line with those of the composite index.
The fund’s U.S. equity allocations contributed the most to the total return of the fund. The Schwab S&P 500 Index Fund contributed to the total return of the fund, returning approximately 43% for the reporting period. The Schwab S&P 500 Index Fund was the largest contributor to the total return of the fund, largely due to the Schwab S&P 500 Index Fund’s large position within the fund. The Schwab Fundamental US Large Company Index Fund also contributed to the total return of the fund, returning approximately 51% for the reporting period. The Schwab Small-Cap Index Fund and Schwab Fundamental US Small Company Index Fund also contributed to the total return of the fund, returning approximately 51% and 64%, respectively, for the reporting period. The Schwab U.S. Large-Cap Growth Index Fund also contributed to the total return of the fund, returning approximately 43% for the reporting period.
The fund’s international equity allocations also contributed to the total return of the fund, with the Schwab International Index Fund returning approximately 34% for the reporting period. The Schwab Fundamental International Large Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund also contributed to the total return of the fund, returning approximately 44% and 41%, respectively, for the reporting period, but both detracted from the relative performance of the fund. The Schwab Fundamental International Small Company Index Fund also contributed to the total return of the fund, returning approximately 37% for the reporting period.
The fund’s real estate allocation, Schwab U.S. REIT ETF, also contributed to the total return of the fund, returning approximately 46% for the reporting period.
The fund’s fixed-income allocation detracted from the total return of the fund. The Schwab U.S. Aggregate Bond Index Fund returned approximately -1% for the reporting period and was the largest detractor from the total return of the fund. The Schwab Short-Term Bond Index Fund also detracted from the total return of the fund, returning approximately -1% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
16
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Conservative Portfolio
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab MarketTrack Conservative Portfolio (11/20/95) | 15.50% | 7.45% | 6.47% |
| S&P 500® Index | 42.91% | 18.93% | 16.21% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Conservative Composite Index | 16.15% | 8.03% | 7.08% |
| Fund Category: Morningstar Allocation—30% to 50% Equity2 | 16.46% | 7.43% | 6.59% |
| Fund Expense Ratio3: 0.50% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.08% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Reflects the total annual fund operating expenses without contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
17
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Conservative Portfolio
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 15 |
| Portfolio Turnover Rate | 13% |
Asset Class Weightings % of Investments1
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
18
Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Portfolios
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2021 and held through October 31, 2021.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| EXPENSE RATIO (ANNUALIZED)1,2 | EFFECTIVE EXPENSE RATIO (ANNUALIZED)3,4 | BEGINNING ACCOUNT VALUE AT 5/1/21 | ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 10/31/21 | EXPENSES PAID DURING PERIOD 5/1/21-10/31/212,5 | EFFECTIVE EXPENSES PAID DURING PERIOD 5/1/21-10/31/214,5 | |
| Schwab MarketTrack All Equity Portfolio | ||||||
| Actual Return | 0.38% | 0.50% | $1,000.00 | $1,070.30 | $1.98 | $2.61 |
| Hypothetical 5% Return | 0.38% | 0.50% | $1,000.00 | $1,023.29 | $1.94 | $2.55 |
| Schwab MarketTrack Growth Portfolio | ||||||
| Actual Return | 0.38% | 0.48% | $1,000.00 | $1,058.60 | $1.97 | $2.49 |
| Hypothetical 5% Return | 0.38% | 0.48% | $1,000.00 | $1,023.29 | $1.94 | $2.45 |
| Schwab MarketTrack Balanced Portfolio | ||||||
| Actual Return | 0.39% | 0.48% | $1,000.00 | $1,046.70 | $2.01 | $2.48 |
| Hypothetical 5% Return | 0.39% | 0.48% | $1,000.00 | $1,023.24 | $1.99 | $2.45 |
| Schwab MarketTrack Conservative Portfolio | ||||||
| Actual Return | 0.40% | 0.47% | $1,000.00 | $1,033.40 | $2.05 | $2.41 |
| Hypothetical 5% Return | 0.40% | 0.47% | $1,000.00 | $1,023.19 | $2.04 | $2.40 |
| 1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. |
| 2 | Excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Based on the most recent six-month acquired fund fees and expenses and the expense ratio; may differ from the acquired fund fees and expenses and the expense ratio in the prospectus. |
| 4 | Includes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 5 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack All Equity Portfolio
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $17.73 | $19.15 | $18.33 | $18.76 | $15.90 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.29 | 0.37 | 0.31 | 0.28 | 0.27 | |
| Net realized and unrealized gains (losses) | 7.21 | (0.54) | 1.30 | (0.05) | 3.33 | |
| Total from investment operations | 7.50 | (0.17) | 1.61 | 0.23 | 3.60 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.21) | (0.53) | (0.36) | (0.33) | (0.30) | |
| Distributions from net realized gains | (1.13) | (0.72) | (0.43) | (0.33) | (0.44) | |
| Total distributions | (1.34) | (1.25) | (0.79) | (0.66) | (0.74) | |
| Net asset value at end of period | $23.89 | $17.73 | $19.15 | $18.33 | $18.76 | |
| Total return | 43.90% | (1.35%) | 9.58% | 1.10% | 23.33% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.38% | 0.40% | 0.40% | 0.39% | 0.40% | |
| Gross operating expenses2 | 0.38% | 0.40% | 0.40% | 0.39% | 0.40% | |
| Net investment income (loss) | 1.33% | 2.08% | 1.72% | 1.46% | 1.56% | |
| Portfolio turnover rate | 6% | 18% | 6% | 5% | 5% | |
| Net assets, end of period (x 1,000,000) | $861 | $623 | $691 | $660 | $662 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
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Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack All Equity Portfolio
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 99.6% OF NET ASSETS | ||
| U.S. Stocks 65.0% | ||
| Large-Cap 50.3% | ||
| Schwab Fundamental US Large Company Index Fund | 5,034,773 | 116,756,387 |
| Schwab S&P 500 Index Fund | 3,824,107 | 272,314,653 |
| Schwab U.S. Large-Cap Growth Index Fund | 489,481 | 43,676,384 |
| 432,747,424 | ||
| Small-Cap 14.7% | ||
| Schwab Fundamental US Small Company Index Fund | 1,998,504 | 38,611,103 |
| Schwab Small-Cap Index Fund | 2,207,906 | 88,250,003 |
| 126,861,106 | ||
| 559,608,530 | ||
| International Stocks 29.6% | ||
| Developed Markets 24.6% | ||
| Schwab Fundamental International Large Company Index Fund | 4,842,648 | 51,138,365 |
| Schwab Fundamental International Small Company Index Fund | 2,740,475 | 42,258,117 |
| Schwab International Index Fund | 4,846,368 | 118,493,690 |
| 211,890,172 | ||
| Emerging Markets 5.0% | ||
| Schwab Fundamental Emerging Markets Large Company Index Fund | 4,151,170 | 42,507,983 |
| 254,398,155 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Real Estate 5.0% | ||
| U.S. REITs 5.0% | ||
| Schwab U.S. REIT ETF | 885,552 | 43,312,349 |
| Total Affiliated Underlying Funds (Cost $423,956,518) | 857,319,034 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.3% OF NET ASSETS | ||
| Time Deposits 0.3% | ||
| Citibank NA | ||
| 0.01%, 11/01/21 (a) | 2,909,552 | 2,909,552 |
| Total Short-Term Investments (Cost $2,909,552) | 2,909,552 | |
| Total Investments in Securities (Cost $426,866,070) | 860,228,586 | |
| (a) | The rate shown is the current daily overnight rate. |
| ETF — | Exchange traded fund |
| REIT — | Real Estate Investment Trust |
21
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack All Equity Portfolio
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 99.6% OF NET ASSETS | ||||||||
| U.S. Stocks 65.0% | ||||||||
| Large-Cap 50.3% | ||||||||
| Schwab Fundamental US Large Company Index Fund | $83,840,241 | $5,809,078 | ($9,023,034) | $1,497,534 | $34,632,568 | $116,756,387 | 5,034,773 | $5,809,078 |
| Schwab S&P 500 Index Fund | 194,769,310 | 11,458,503 | (14,513,290) | 2,795,951 | 77,804,179 | 272,314,653 | 3,824,107 | 4,038,503 |
| Schwab U.S. Large-Cap Growth Index Fund | 31,408,980 | 691,223 | (1,818,224) | 579,278 | 12,815,127 | 43,676,384 | 489,481 | 241,223 |
| 432,747,424 | ||||||||
| Small-Cap 14.7% | ||||||||
| Schwab Fundamental US Small Company Index Fund | 29,146,693 | 483,721 | (7,360,000) | 1,306,868 | 15,033,821 | 38,611,103 | 1,998,504 | 483,721 |
| Schwab Small-Cap Index Fund | 64,874,595 | 6,894,039 | (12,432,294) | 5,444,986 | 23,468,677 | 88,250,003 | 2,207,906 | 1,985,899 |
| 126,861,106 | ||||||||
| 559,608,530 | ||||||||
| International Stocks 29.6% | ||||||||
| Developed Markets 24.6% | ||||||||
| Schwab Fundamental International Large Company Index Fund | 37,247,617 | 3,890,964 | (4,890,810) | 307,658 | 14,582,936 | 51,138,365 | 4,842,648 | 1,066,811 |
| Schwab Fundamental International Small Company Index Fund | 31,385,635 | 1,852,182 | (1,713,277) | 44,891 | 10,688,686 | 42,258,117 | 2,740,475 | 735,350 |
| Schwab International Index Fund | 84,989,194 | 10,570,346 | (4,540,700) | 141,418 | 27,333,432 | 118,493,690 | 4,846,368 | 1,897,604 |
| 211,890,172 | ||||||||
| Emerging Markets 5.0% | ||||||||
| Schwab Fundamental Emerging Markets Large Company Index Fund | 31,985,158 | 2,019,621 | (2,870,000) | (84,839) | 11,458,043 | 42,507,983 | 4,151,170 | 1,095,412 |
| 254,398,155 | ||||||||
| Real Estate 5.0% | ||||||||
| U.S. REITs 5.0% | ||||||||
| Schwab U.S. REIT ETF | 30,585,050 | 2,213,138 | (3,095,984) | 286,380 | 13,323,765 | 43,312,349 | 885,552 | 864,725 |
| Total Affiliated Underlying Funds | $620,232,473 | $45,882,815 | ($62,257,613) | $12,320,125 | $241,141,234 | $857,319,034 | $18,218,326 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $857,319,034 | $— | $— | $857,319,034 |
| Short-Term Investments1 | — | 2,909,552 | — | 2,909,552 |
| Total | $857,319,034 | $2,909,552 | $— | $860,228,586 |
| 1 | As categorized in the Portfolio Holdings. |
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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Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack All Equity Portfolio
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $423,956,518) | $857,319,034 | |
| Investments in securities, at value - unaffiliated (cost $2,909,552) | 2,909,552 | |
| Receivables: | ||
| Investments sold | 6,127,869 | |
| Fund shares sold | 287,018 | |
| Prepaid expenses | + | 15,663 |
| Total assets | 866,659,136 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 4,866,075 | |
| Fund shares redeemed | 189,877 | |
| Shareholder service fees | 170,296 | |
| Investment adviser and administrator fees | 93,308 | |
| Accrued expenses | + | 72,367 |
| Total liabilities | 5,391,923 | |
| Net assets | $861,267,213 | |
| Net Assets by Source | ||
| Capital received from investors | $421,662,211 | |
| Total distributable earnings | + | 439,605,002 |
| Net assets | $861,267,213 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $861,267,213 | 36,054,376 | $23.89 | ||
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Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack All Equity Portfolio
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $13,587,159 | |
| Interest received from securities - unaffiliated | + | 1,249 |
| Total investment income | 13,588,408 | |
| Expenses | ||
| Shareholder service fees | 1,886,223 | |
| Investment adviser and administrator fees | 1,029,414 | |
| Registration fees | 32,012 | |
| Portfolio accounting fees | 27,730 | |
| Shareholder reports | 27,172 | |
| Professional fees | 21,290 | |
| Independent trustees’ fees | 9,514 | |
| Transfer agent fees | 6,599 | |
| Other expenses | + | 9,439 |
| Total expenses | 3,049,393 | |
| Expense reduction by investment adviser and its affiliates | – | 6,599 |
| Net expenses | – | 3,042,794 |
| Net investment income | 10,545,614 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 4,631,167 | |
| Net realized gains on sales of securities - affiliated | + | 12,320,125 |
| Net realized gains | 16,951,292 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | + | 241,141,234 |
| Net realized and unrealized gains | 258,092,526 | |
| Increase in net assets resulting from operations | $268,638,140 | |
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Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack All Equity Portfolio
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $10,545,614 | $13,459,757 | |
| Net realized gains | 16,951,292 | 40,017,288 | |
| Net change in unrealized appreciation (depreciation) | + | 241,141,234 | (65,160,116) |
| Increase (decrease) in net assets from operations | $268,638,140 | ($11,683,071) | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($46,815,289) | ($44,690,295) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 3,230,265 | $70,646,900 | 4,011,146 | $68,570,719 | |
| Shares reinvested | 2,118,421 | 41,923,540 | 2,115,919 | 40,244,771 | |
| Shares redeemed | + | (4,430,219) | (96,220,989) | (7,060,916) | (120,148,036) |
| Net transactions in fund shares | 918,467 | $16,349,451 | (933,851) | ($11,332,546) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 35,135,909 | $623,094,911 | 36,069,760 | $690,800,823 | |
| Total increase (decrease) | + | 918,467 | 238,172,302 | (933,851) | (67,705,912) |
| End of period | 36,054,376 | $861,267,213 | 35,135,909 | $623,094,911 | |
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Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Growth Portfolio
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $22.42 | $23.54 | $22.67 | $23.47 | $20.54 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.35 | 0.43 | 0.41 | 0.37 | 0.34 | |
| Net realized and unrealized gains (losses) | 7.03 | (0.20) | 1.62 | (0.04) | 3.37 | |
| Total from investment operations | 7.38 | 0.23 | 2.03 | 0.33 | 3.71 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.39) | (0.47) | (0.45) | (0.40) | (0.36) | |
| Distributions from net realized gains | (1.57) | (0.88) | (0.71) | (0.73) | (0.42) | |
| Total distributions | (1.96) | (1.35) | (1.16) | (1.13) | (0.78) | |
| Net asset value at end of period | $27.84 | $22.42 | $23.54 | $22.67 | $23.47 | |
| Total return | 34.32% | 0.74% | 9.86% | 1.28% | 18.52% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.39% | 0.39% | 0.40% | 0.39% | 0.40% | |
| Gross operating expenses2 | 0.39% | 0.40% | 0.40% | 0.39% | 0.40% | |
| Net investment income (loss) | 1.33% | 1.92% | 1.82% | 1.59% | 1.57% | |
| Portfolio turnover rate | 8% | 19% | 7% | 7% | 20% 3 | |
| Net assets, end of period (x 1,000,000) | $982 | $748 | $817 | $783 | $804 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | The portfolio turnover rate increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, the portfolio turnover rate would have been 6% without including these transactions. There were no transaction costs associated with these transactions. |
26
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Growth Portfolio
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 98.5% OF NET ASSETS | ||
| U.S. Stocks 56.4% | ||
| Large-Cap 43.7% | ||
| Schwab Fundamental US Large Company Index Fund | 5,090,233 | 118,042,501 |
| Schwab S&P 500 Index Fund | 3,896,924 | 277,499,962 |
| Schwab U.S. Large-Cap Growth Index Fund | 371,182 | 33,120,533 |
| 428,662,996 | ||
| Small-Cap 12.7% | ||
| Schwab Fundamental US Small Company Index Fund | 1,945,207 | 37,581,408 |
| Schwab Small-Cap Index Fund | 2,184,857 | 87,328,739 |
| 124,910,147 | ||
| 553,573,143 | ||
| International Stocks 19.7% | ||
| Developed Markets 16.4% | ||
| Schwab Fundamental International Large Company Index Fund | 3,693,588 | 39,004,287 |
| Schwab Fundamental International Small Company Index Fund | 2,083,766 | 32,131,665 |
| Schwab International Index Fund | 3,673,839 | 89,825,363 |
| 160,961,315 | ||
| Emerging Markets 3.3% | ||
| Schwab Fundamental Emerging Markets Large Company Index Fund | 3,227,899 | 33,053,688 |
| 194,015,003 | ||
| Real Estate 4.1% | ||
| U.S. REITs 4.1% | ||
| Schwab U.S. REIT ETF | 822,870 | 40,246,572 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Fixed Income 15.8% | ||
| Intermediate-Term Bond 15.8% | ||
| Schwab U.S. Aggregate Bond Index Fund | 14,886,314 | 155,413,117 |
| Money Market Funds 2.5% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 24,565,322 | 24,572,691 |
| Total Affiliated Underlying Funds (Cost $517,809,496) | 967,820,526 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.3% OF NET ASSETS | ||
| Time Deposits 1.3% | ||
| Barclays Capital, Inc. | ||
| 0.01%, 11/01/21 (b) | 2,319,235 | 2,319,235 |
| Royal Bank of Canada | ||
| 0.01%, 11/01/21 (b) | 9,841,779 | 9,841,779 |
| Total Short-Term Investments (Cost $12,161,014) | 12,161,014 | |
| Total Investments in Securities (Cost $529,970,510) | 979,981,540 | |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
| ETF — | Exchange traded fund |
| REIT — | Real Estate Investment Trust |
27
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Growth Portfolio
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 98.5% OF NET ASSETS | ||||||||
| U.S. Stocks 56.4% | ||||||||
| Large-Cap 43.7% | ||||||||
| Schwab Fundamental US Large Company Index Fund | $89,154,595 | $6,035,161 | ($14,473,030) | $2,565,609 | $34,760,166 | $118,042,501 | 5,090,233 | $6,035,161 |
| Schwab S&P 500 Index Fund | 208,797,893 | 4,769,428 | (19,882,484) | 12,247,085 | 71,568,040 | 277,499,962 | 3,896,924 | 4,269,428 |
| Schwab U.S. Large-Cap Growth Index Fund | 25,481,188 | 195,697 | (3,115,000) | 1,182,062 | 9,376,586 | 33,120,533 | 371,182 | 195,697 |
| 428,662,996 | ||||||||
| Small-Cap 12.7% | ||||||||
| Schwab Fundamental US Small Company Index Fund | 29,234,040 | 482,019 | (8,190,000) | 1,365,390 | 14,689,959 | 37,581,408 | 1,945,207 | 482,019 |
| Schwab Small-Cap Index Fund | 67,813,605 | 7,394,969 | (17,475,000) | 9,067,968 | 20,527,197 | 87,328,739 | 2,184,857 | 1,994,969 |
| 124,910,147 | ||||||||
| 553,573,143 | ||||||||
| International Stocks 19.7% | ||||||||
| Developed Markets 16.4% | ||||||||
| Schwab Fundamental International Large Company Index Fund | 30,102,153 | 1,561,877 | (4,320,001) | 250,380 | 11,409,878 | 39,004,287 | 3,693,588 | 831,876 |
| Schwab Fundamental International Small Company Index Fund | 25,073,791 | 575,777 | (1,970,000) | 163,242 | 8,288,855 | 32,131,665 | 2,083,766 | 575,777 |
| Schwab International Index Fund | 69,700,927 | 3,524,557 | (5,300,000) | 669,751 | 21,230,128 | 89,825,363 | 3,673,839 | 1,504,558 |
| 160,961,315 | ||||||||
| Emerging Markets 3.3% | ||||||||
| Schwab Fundamental Emerging Markets Large Company Index Fund | 24,569,478 | 1,108,894 | (1,545,000) | (278) | 8,920,594 | 33,053,688 | 3,227,899 | 848,893 |
| 194,015,003 | ||||||||
| Real Estate 4.1% | ||||||||
| U.S. REITs 4.1% | ||||||||
| Schwab U.S. REIT ETF | 27,689,578 | 1,682,639 | (1,439,682) | 162,649 | 12,151,388 | 40,246,572 | 822,870 | 784,661 |
| Fixed Income 15.8% | ||||||||
| Intermediate-Term Bond 15.8% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 121,379,029 | 39,769,374 | (1,800,000) | (18,453) | (3,916,833) | 155,413,117 | 14,886,314 | 3,082,091 |
| Money Market Funds 2.5% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 19,567,411 | 5,007,237 | — | — | (1,957) | 24,572,691 | 24,565,322 | 7,287 |
| Total Affiliated Underlying Funds | $738,563,688 | $72,107,629 | ($79,510,197) | $27,655,405 | $209,004,001 | $967,820,526 | $20,612,417 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
28
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Growth Portfolio
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $967,820,526 | $— | $— | $967,820,526 |
| Short-Term Investments1 | — | 12,161,014 | — | 12,161,014 |
| Total | $967,820,526 | $12,161,014 | $— | $979,981,540 |
| 1 | As categorized in the Portfolio Holdings. |
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.
29
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Growth Portfolio
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $517,809,496) | $967,820,526 | |
| Investments in securities, at value - unaffiliated (cost $12,161,014) | 12,161,014 | |
| Receivables: | ||
| Investments sold | 5,717,749 | |
| Fund shares sold | 307,422 | |
| Dividends | 258,596 | |
| Prepaid expenses | + | 24,088 |
| Total assets | 986,289,395 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 3,259,098 | |
| Fund shares redeemed | 405,158 | |
| Shareholder service fees | 197,977 | |
| Investment adviser and administrator fees | 106,638 | |
| Accrued expenses | + | 74,642 |
| Total liabilities | 4,043,513 | |
| Net assets | $982,245,882 | |
| Net Assets by Source | ||
| Capital received from investors | $501,453,349 | |
| Total distributable earnings | + | 480,792,533 |
| Net assets | $982,245,882 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $982,245,882 | 35,275,579 | $27.84 | ||
30
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Growth Portfolio
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $15,696,180 | |
| Interest received from securities - unaffiliated | + | 1,881 |
| Total investment income | 15,698,061 | |
| Expenses | ||
| Shareholder service fees | 2,200,153 | |
| Investment adviser and administrator fees | 1,183,320 | |
| Registration fees | 35,322 | |
| Portfolio accounting fees | 28,947 | |
| Shareholder reports | 26,407 | |
| Professional fees | 21,547 | |
| Independent trustees’ fees | 9,898 | |
| Transfer agent fees | 6,236 | |
| Custodian fees | 66 | |
| Other expenses | + | 10,548 |
| Total expenses | 3,522,444 | |
| Expense reduction by investment adviser and its affiliates | – | 6,236 |
| Net expenses | – | 3,516,208 |
| Net investment income | 12,181,853 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 4,916,237 | |
| Net realized gains on sales of securities - affiliated | + | 27,655,405 |
| Net realized gains | 32,571,642 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | + | 209,004,001 |
| Net realized and unrealized gains | 241,575,643 | |
| Increase in net assets resulting from operations | $253,757,496 | |
31
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Growth Portfolio
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $12,181,853 | $14,877,513 | |
| Net realized gains | 32,571,642 | 51,128,856 | |
| Net change in unrealized appreciation (depreciation) | + | 209,004,001 | (62,556,859) |
| Increase in net assets from operations | $253,757,496 | $3,449,510 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($64,608,050) | ($46,215,156) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 3,644,847 | $94,749,475 | 3,194,314 | $69,920,922 | |
| Shares reinvested | 2,487,105 | 59,466,671 | 1,816,570 | 42,344,247 | |
| Shares redeemed | + | (4,239,705) | (109,611,696) | (6,318,253) | (137,539,154) |
| Net transactions in fund shares | 1,892,247 | $44,604,450 | (1,307,369) | ($25,273,985) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 33,383,332 | $748,491,986 | 34,690,701 | $816,531,617 | |
| Total increase (decrease) | + | 1,892,247 | 233,753,896 | (1,307,369) | (68,039,631) |
| End of period | 35,275,579 | $982,245,882 | 33,383,332 | $748,491,986 | |
32
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Balanced Portfolio
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $18.38 | $18.75 | $18.24 | $19.12 | $17.35 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.28 | 0.35 | 0.36 | 0.34 | 0.30 | |
| Net realized and unrealized gains (losses) | 4.11 | 0.10 | 1.32 | (0.24) | 2.02 | |
| Total from investment operations | 4.39 | 0.45 | 1.68 | 0.10 | 2.32 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.32) | (0.39) | (0.39) | (0.33) | (0.30) | |
| Distributions from net realized gains | (0.92) | (0.43) | (0.78) | (0.65) | (0.25) | |
| Total distributions | (1.24) | (0.82) | (1.17) | (0.98) | (0.55) | |
| Net asset value at end of period | $21.53 | $18.38 | $18.75 | $18.24 | $19.12 | |
| Total return | 24.66% | 2.37% | 10.14% | 0.44% | 13.71% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.39% | 0.40% | 0.40% | 0.40% | 0.40% | |
| Gross operating expenses2 | 0.39% | 0.40% | 0.40% | 0.40% | 0.40% | |
| Net investment income (loss) | 1.39% | 1.91% | 1.99% | 1.79% | 1.67% | |
| Portfolio turnover rate | 10% | 22% | 11% | 8% | 46% 3 | |
| Net assets, end of period (x 1,000,000) | $655 | $518 | $545 | $515 | $551 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | The portfolio turnover rate increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, the portfolio turnover rate would have been 10% without including these transactions. There were no transaction costs associated with these transactions. |
33
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 98.6% OF NET ASSETS | ||
| U.S. Stocks 42.3% | ||
| Large-Cap 33.3% | ||
| Schwab Fundamental US Large Company Index Fund | 2,547,903 | 59,085,860 |
| Schwab S&P 500 Index Fund | 1,955,041 | 139,218,494 |
| Schwab U.S. Large-Cap Growth Index Fund | 222,559 | 19,858,952 |
| 218,163,306 | ||
| Small-Cap 9.0% | ||
| Schwab Fundamental US Small Company Index Fund | 943,019 | 18,219,135 |
| Schwab Small-Cap Index Fund | 1,017,190 | 40,657,077 |
| 58,876,212 | ||
| 277,039,518 | ||
| International Stocks 14.8% | ||
| Developed Markets 12.4% | ||
| Schwab Fundamental International Large Company Index Fund | 1,899,784 | 20,061,722 |
| Schwab Fundamental International Small Company Index Fund | 1,034,050 | 15,945,045 |
| Schwab International Index Fund | 1,842,192 | 45,041,593 |
| 81,048,360 | ||
| Emerging Markets 2.4% | ||
| Schwab Fundamental Emerging Markets Large Company Index Fund | 1,554,074 | 15,913,718 |
| 96,962,078 | ||
| Real Estate 3.1% | ||
| U.S. REITs 3.1% | ||
| Schwab U.S. REIT ETF | 414,670 | 20,281,510 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Fixed Income 35.8% | ||
| Intermediate-Term Bond 34.9% | ||
| Schwab U.S. Aggregate Bond Index Fund | 21,871,439 | 228,337,823 |
| Short-Term Bond 0.9% | ||
| Schwab Short-Term Bond Index Fund | 607,755 | 6,193,020 |
| 234,530,843 | ||
| Money Market Funds 2.6% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 16,766,005 | 16,771,034 |
| Total Affiliated Underlying Funds (Cost $412,716,247) | 645,584,983 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.4% OF NET ASSETS | ||
| Time Deposits 1.4% | ||
| JPMorgan Chase Bank NA | ||
| 0.01%, 11/01/21 (b) | 6,553,618 | 6,553,618 |
| Skandinaviska Enskilda Banken AB | ||
| 0.01%, 11/01/21 (b) | 2,572,500 | 2,572,500 |
| Total Short-Term Investments (Cost $9,126,118) | 9,126,118 | |
| Total Investments in Securities (Cost $421,842,365) | 654,711,101 | |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
| ETF — | Exchange traded fund |
| REIT — | Real Estate Investment Trust |
34
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 98.6% OF NET ASSETS | ||||||||
| U.S. Stocks 42.3% | ||||||||
| Large-Cap 33.3% | ||||||||
| Schwab Fundamental US Large Company Index Fund | $46,214,451 | $3,052,690 | ($9,150,224) | $1,606,224 | $17,362,719 | $59,085,860 | 2,547,903 | $3,052,690 |
| Schwab S&P 500 Index Fund | 108,431,681 | 5,685,618 | (17,638,660) | 8,798,840 | 33,941,015 | 139,218,494 | 1,955,041 | 2,185,619 |
| Schwab U.S. Large-Cap Growth Index Fund | 16,142,289 | 117,843 | (2,919,139) | 1,073,078 | 5,444,881 | 19,858,952 | 222,559 | 117,843 |
| 218,163,306 | ||||||||
| Small-Cap 9.0% | ||||||||
| Schwab Fundamental US Small Company Index Fund | 14,419,988 | 229,901 | (4,260,000) | 691,344 | 7,137,902 | 18,219,135 | 943,019 | 229,901 |
| Schwab Small-Cap Index Fund | 33,339,271 | 2,396,832 | (9,430,000) | 5,256,327 | 9,094,647 | 40,657,077 | 1,017,190 | 966,833 |
| 58,876,212 | ||||||||
| 277,039,518 | ||||||||
| International Stocks 14.8% | ||||||||
| Developed Markets 12.4% | ||||||||
| Schwab Fundamental International Large Company Index Fund | 15,545,027 | 1,544,291 | (2,970,000) | 267,766 | 5,674,638 | 20,061,722 | 1,899,784 | 424,291 |
| Schwab Fundamental International Small Company Index Fund | 13,085,236 | 558,030 | (2,040,060) | 429,631 | 3,912,208 | 15,945,045 | 1,034,050 | 288,030 |
| Schwab International Index Fund | 35,858,755 | 2,447,304 | (4,413,757) | 536,458 | 10,612,833 | 45,041,593 | 1,842,192 | 767,029 |
| 81,048,360 | ||||||||
| Emerging Markets 2.4% | ||||||||
| Schwab Fundamental Emerging Markets Large Company Index Fund | 12,691,376 | 477,486 | (1,830,000) | 302,450 | 4,272,406 | 15,913,718 | 1,554,074 | 427,486 |
| 96,962,078 | ||||||||
| Real Estate 3.1% | ||||||||
| U.S. REITs 3.1% | ||||||||
| Schwab U.S. REIT ETF | 13,880,515 | 1,943,511 | (1,907,942) | 132,241 | 6,233,185 | 20,281,510 | 414,670 | 406,407 |
| Fixed Income 35.8% | ||||||||
| Intermediate-Term Bond 34.9% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 182,212,199 | 58,294,764 | (6,220,000) | (184,273) | (5,764,867) | 228,337,823 | 21,871,439 | 4,584,041 |
| Short-Term Bond 0.9% | ||||||||
| Schwab Short-Term Bond Index Fund | 5,403,247 | 889,040 | — | — | (99,267) | 6,193,020 | 607,755 | 69,052 |
| 234,530,843 | ||||||||
| Money Market Funds 2.6% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 13,767,457 | 3,004,953 | — | — | (1,376) | 16,771,034 | 16,766,005 | 4,981 |
| Total Affiliated Underlying Funds | $510,991,492 | $80,642,263 | ($62,779,782) | $18,910,086 | $97,820,924 | $645,584,983 | $13,524,203 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
35
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $645,584,983 | $— | $— | $645,584,983 |
| Short-Term Investments1 | — | 9,126,118 | — | 9,126,118 |
| Total | $645,584,983 | $9,126,118 | $— | $654,711,101 |
| 1 | As categorized in the Portfolio Holdings. |
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 underlying mutual funds and ETFs, which could be Level 1, Level 2 or Level 3.
36
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Balanced Portfolio
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $412,716,247) | $645,584,983 | |
| Investments in securities, at value - unaffiliated (cost $9,126,118) | 9,126,118 | |
| Receivables: | ||
| Investments sold | 6,363,746 | |
| Dividends | 384,121 | |
| Fund shares sold | 111,995 | |
| Prepaid expenses | + | 20,924 |
| Total assets | 661,591,887 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 6,342,109 | |
| Shareholder service fees | 133,284 | |
| Fund shares redeemed | 110,772 | |
| Investment adviser and administrator fees | 71,348 | |
| Accrued expenses | + | 58,331 |
| Total liabilities | 6,715,844 | |
| Net assets | $654,876,043 | |
| Net Assets by Source | ||
| Capital received from investors | $402,686,535 | |
| Total distributable earnings | + | 252,189,508 |
| Net assets | $654,876,043 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $654,876,043 | 30,416,020 | $21.53 | ||
37
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Balanced Portfolio
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $10,904,235 | |
| Interest received from securities - unaffiliated | + | 1,261 |
| Total investment income | 10,905,496 | |
| Expenses | ||
| Shareholder service fees | 1,484,127 | |
| Investment adviser and administrator fees | 794,727 | |
| Registration fees | 34,803 | |
| Portfolio accounting fees | 25,972 | |
| Professional fees | 20,944 | |
| Shareholder reports | 15,028 | |
| Independent trustees’ fees | 8,960 | |
| Transfer agent fees | 4,654 | |
| Other expenses | + | 8,221 |
| Total expenses | 2,397,436 | |
| Expense reduction by investment adviser and its affiliates | – | 4,654 |
| Net expenses | – | 2,392,782 |
| Net investment income | 8,512,714 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 2,619,968 | |
| Net realized gains on sales of securities - affiliated | + | 18,910,086 |
| Net realized gains | 21,530,054 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | + | 97,820,924 |
| Net realized and unrealized gains | 119,350,978 | |
| Increase in net assets resulting from operations | $127,863,692 | |
38
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Balanced Portfolio
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $8,512,714 | $10,037,628 | |
| Net realized gains | 21,530,054 | 25,599,831 | |
| Net change in unrealized appreciation (depreciation) | + | 97,820,924 | (23,944,151) |
| Increase in net assets from operations | $127,863,692 | $11,693,308 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($34,781,810) | ($23,741,670) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 4,679,194 | $95,523,630 | 3,534,438 | $63,437,613 | |
| Shares reinvested | 1,640,068 | 31,604,119 | 1,162,605 | 21,612,831 | |
| Shares redeemed | + | (4,058,104) | (82,952,722) | (5,586,534) | (99,936,630) |
| Net transactions in fund shares | 2,261,158 | $44,175,027 | (889,491) | ($14,886,186) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 28,154,862 | $517,619,134 | 29,044,353 | $544,553,682 | |
| Total increase (decrease) | + | 2,261,158 | 137,256,909 | (889,491) | (26,934,548) |
| End of period | 30,416,020 | $654,876,043 | 28,154,862 | $517,619,134 | |
39
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Conservative Portfolio
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $16.50 | $16.43 | $15.63 | $16.27 | $15.31 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.26 | 0.30 | 0.35 | 0.31 | 0.27 | |
| Net realized and unrealized gains (losses) | 2.27 | 0.27 | 1.18 | (0.38) | 1.09 | |
| Total from investment operations | 2.53 | 0.57 | 1.53 | (0.07) | 1.36 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.27) | (0.31) | (0.36) | (0.32) | (0.28) | |
| Distributions from net realized gains | (0.29) | (0.19) | (0.37) | (0.25) | (0.12) | |
| Total distributions | (0.56) | (0.50) | (0.73) | (0.57) | (0.40) | |
| Net asset value at end of period | $18.47 | $16.50 | $16.43 | $15.63 | $16.27 | |
| Total return | 15.50% | 3.57% | 10.31% | (0.49%) | 9.07% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.41% | 0.42% | 0.43% | 0.41% | 0.42% | |
| Gross operating expenses2 | 0.41% | 0.42% | 0.43% | 0.41% | 0.42% | |
| Net investment income (loss) | 1.45% | 1.84% | 2.19% | 1.93% | 1.71% | |
| Portfolio turnover rate | 13% | 35% | 26% | 9% | 74% 3 | |
| Net assets, end of period (x 1,000,000) | $335 | $279 | $263 | $239 | $251 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | The portfolio turnover rate increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, the portfolio turnover rate would have been 23% without including these transactions. There were no transaction costs associated with these transactions. |
40
Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 98.8% OF NET ASSETS | ||
| U.S. Stocks 28.2% | ||
| Large-Cap 22.2% | ||
| Schwab Fundamental US Large Company Index Fund | 864,566 | 20,049,297 |
| Schwab S&P 500 Index Fund | 665,701 | 47,404,594 |
| Schwab U.S. Large-Cap Growth Index Fund | 77,981 | 6,958,268 |
| 74,412,159 | ||
| Small-Cap 6.0% | ||
| Schwab Fundamental US Small Company Index Fund | 306,249 | 5,916,724 |
| Schwab Small-Cap Index Fund | 355,706 | 14,217,551 |
| 20,134,275 | ||
| 94,546,434 | ||
| International Stocks 9.9% | ||
| Developed Markets 8.3% | ||
| Schwab Fundamental International Large Company Index Fund | 633,584 | 6,690,648 |
| Schwab Fundamental International Small Company Index Fund | 372,511 | 5,744,117 |
| Schwab International Index Fund | 636,685 | 15,566,944 |
| 28,001,709 | ||
| Emerging Markets 1.6% | ||
| Schwab Fundamental Emerging Markets Large Company Index Fund | 520,385 | 5,328,747 |
| 33,330,456 | ||
| Real Estate 2.1% | ||
| U.S. REITs 2.1% | ||
| Schwab U.S. REIT ETF | 141,329 | 6,912,401 |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Fixed Income 55.8% | ||
| Intermediate-Term Bond 54.9% | ||
| Schwab U.S. Aggregate Bond Index Fund | 17,615,000 | 183,900,598 |
| Short-Term Bond 0.9% | ||
| Schwab Short-Term Bond Index Fund | 312,258 | 3,181,909 |
| 187,082,507 | ||
| Money Market Funds 2.8% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 9,218,067 | 9,220,832 |
| Total Affiliated Underlying Funds (Cost $249,460,306) | 331,092,630 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.3% OF NET ASSETS | ||
| Time Deposits 1.3% | ||
| Barclays Bank PLC | ||
| 0.01%, 11/01/21 (b) | 919,551 | 919,551 |
| Citibank NA | ||
| 0.01%, 11/01/21 (b) | 3,347,646 | 3,347,646 |
| Total Short-Term Investments (Cost $4,267,197) | 4,267,197 | |
| Total Investments in Securities (Cost $253,727,503) | 335,359,827 | |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
| ETF — | Exchange traded fund |
| REIT — | Real Estate Investment Trust |
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Schwab MarketTrack Portfolios | Annual Report
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Schwab MarketTrack Conservative Portfolio
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 98.8% OF NET ASSETS | ||||||||
| U.S. Stocks 28.2% | ||||||||
| Large-Cap 22.2% | ||||||||
| Schwab Fundamental US Large Company Index Fund | $16,751,890 | $1,945,348 | ($5,129,236) | $718,411 | $5,762,884 | $20,049,297 | 864,566 | $1,050,414 |
| Schwab S&P 500 Index Fund | 39,174,699 | 5,407,255 | (11,802,513) | 5,662,573 | 8,962,580 | 47,404,594 | 665,701 | 742,125 |
| Schwab U.S. Large-Cap Growth Index Fund | 5,642,623 | 40,130 | (941,452) | 306,418 | 1,910,549 | 6,958,268 | 77,981 | 40,130 |
| 74,412,159 | ||||||||
| Small-Cap 6.0% | ||||||||
| Schwab Fundamental US Small Company Index Fund | 4,832,284 | 499,002 | (2,056,929) | 431,574 | 2,210,793 | 5,916,724 | 306,249 | 79,002 |
| Schwab Small-Cap Index Fund | 11,934,226 | 1,266,909 | (3,924,616) | 2,164,787 | 2,776,245 | 14,217,551 | 355,706 | 326,907 |
| 20,134,275 | ||||||||
| 94,546,434 | ||||||||
| International Stocks 9.9% | ||||||||
| Developed Markets 8.3% | ||||||||
| Schwab Fundamental International Large Company Index Fund | 5,488,699 | 735,584 | (1,610,000) | 238,321 | 1,838,044 | 6,690,648 | 633,584 | 145,584 |
| Schwab Fundamental International Small Company Index Fund | 4,866,268 | 738,092 | (1,340,000) | 199,904 | 1,279,853 | 5,744,117 | 372,511 | 98,092 |
| Schwab International Index Fund | 12,901,329 | 861,112 | (1,987,433) | 217,584 | 3,574,352 | 15,566,944 | 636,685 | 261,112 |
| 28,001,709 | ||||||||
| Emerging Markets 1.6% | ||||||||
| Schwab Fundamental Emerging Markets Large Company Index Fund | 4,603,691 | 151,585 | (1,033,458) | 174,532 | 1,432,397 | 5,328,747 | 520,385 | 151,585 |
| 33,330,456 | ||||||||
| Real Estate 2.1% | ||||||||
| U.S. REITs 2.1% | ||||||||
| Schwab U.S. REIT ETF | 5,577,477 | 174,795 | (1,030,561) | (94,305) | 2,284,995 | 6,912,401 | 141,329 | 137,693 |
| Fixed Income 55.8% | ||||||||
| Intermediate-Term Bond 54.9% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 153,199,010 | 45,136,539 | (9,772,590) | (93,771) | (4,568,590) | 183,900,598 | 17,615,000 | 3,657,325 |
| Short-Term Bond 0.9% | ||||||||
| Schwab Short-Term Bond Index Fund | 2,968,009 | 265,013 | — | — | (51,113) | 3,181,909 | 312,258 | 36,019 |
| 187,082,507 | ||||||||
| Money Market Funds 2.8% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 9,218,973 | 2,780 | — | — | (921) | 9,220,832 | 9,218,067 | 2,772 |
| Total Affiliated Underlying Funds | $277,159,178 | $57,224,144 | ($40,628,788) | $9,926,028 | $27,412,068 | $331,092,630 | $6,728,760 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
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Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $331,092,630 | $— | $— | $331,092,630 |
| Short-Term Investments1 | — | 4,267,197 | — | 4,267,197 |
| Total | $331,092,630 | $4,267,197 | $— | $335,359,827 |
| 1 | As categorized in the Portfolio Holdings. |
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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Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Conservative Portfolio
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $249,460,306) | $331,092,630 | |
| Investments in securities, at value - unaffiliated (cost $4,267,197) | 4,267,197 | |
| Receivables: | ||
| Investments sold | 2,399,573 | |
| Fund shares sold | 604,756 | |
| Dividends | 303,546 | |
| Prepaid expenses | + | 18,411 |
| Total assets | 338,686,113 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 3,333,414 | |
| Fund shares redeemed | 90,985 | |
| Shareholder service fees | 67,485 | |
| Investment adviser and administrator fees | 35,851 | |
| Accrued expenses | + | 48,572 |
| Total liabilities | 3,576,307 | |
| Net assets | $335,109,806 | |
| Net Assets by Source | ||
| Capital received from investors | $245,706,471 | |
| Total distributable earnings | + | 89,403,335 |
| Net assets | $335,109,806 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $335,109,806 | 18,138,912 | $18.47 | ||
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Schwab MarketTrack Portfolios | Annual Report
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Schwab MarketTrack Conservative Portfolio
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $5,728,339 | |
| Interest received from securities - unaffiliated | + | 575 |
| Total investment income | 5,728,914 | |
| Expenses | ||
| Shareholder service fees | 754,640 | |
| Investment adviser and administrator fees | 401,039 | |
| Registration fees | 34,467 | |
| Portfolio accounting fees | 23,163 | |
| Professional fees | 20,335 | |
| Independent trustees’ fees | 8,002 | |
| Shareholder reports | 7,837 | |
| Transfer agent fees | 2,804 | |
| Custodian fees | 471 | |
| Other expenses | + | 5,853 |
| Total expenses | 1,258,611 | |
| Expense reduction by investment adviser and its affiliates | – | 2,804 |
| Net expenses | – | 1,255,807 |
| Net investment income | 4,473,107 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 1,000,421 | |
| Net realized gains on sales of securities - affiliated | + | 9,926,028 |
| Net realized gains | 10,926,449 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | + | 27,412,068 |
| Net realized and unrealized gains | 38,338,517 | |
| Increase in net assets resulting from operations | $42,811,624 | |
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Schwab MarketTrack Portfolios | Annual Report
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Schwab MarketTrack Conservative Portfolio
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $4,473,107 | $5,082,111 | |
| Net realized gains | 10,926,449 | 4,125,240 | |
| Net change in unrealized appreciation (depreciation) | + | 27,412,068 | (555,553) |
| Increase in net assets from operations | $42,811,624 | $8,651,798 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($9,242,129) | ($8,266,008) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 4,868,387 | $87,446,661 | 5,944,934 | $97,316,710 | |
| Shares reinvested | 450,769 | 7,876,623 | 435,195 | 7,084,017 | |
| Shares redeemed | + | (4,084,996) | (72,665,622) | (5,509,526) | (89,276,819) |
| Net transactions in fund shares | 1,234,160 | $22,657,662 | 870,603 | $15,123,908 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 16,904,752 | $278,882,649 | 16,034,149 | $263,372,951 | |
| Total increase | + | 1,234,160 | 56,227,157 | 870,603 | 15,509,698 |
| End of period | 18,138,912 | $335,109,806 | 16,904,752 | $278,882,649 | |
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Schwab MarketTrack Portfolios | Annual Report
See financial notes
Schwab MarketTrack Portfolios
Financial Notes
1. Business Structure of the Funds:
Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio, and Schwab MarketTrack Conservative Portfolio (the funds) are each a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) | |
| Schwab MarketTrack All Equity Portfolio | Schwab Target 2045 Fund |
| Schwab MarketTrack Growth Portfolio | Schwab Target 2050 Fund |
| Schwab MarketTrack Balanced Portfolio | Schwab Target 2055 Fund |
| Schwab MarketTrack Conservative Portfolio | Schwab Target 2060 Fund |
| Schwab S&P 500 Index Fund | Schwab Target 2065 Fund |
| Schwab Small-Cap Index Fund® | Schwab Fundamental US Large Company Index Fund |
| Schwab Total Stock Market Index Fund® | Schwab Fundamental US Small Company Index Fund |
| Schwab U.S. Large-Cap Growth Index Fund | Schwab Fundamental International Large Company Index Fund |
| Schwab U.S. Large-Cap Value Index Fund | Schwab Fundamental International Small Company Index Fund |
| Schwab U.S. Mid-Cap Index Fund | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Schwab International Index Fund® | Schwab Fundamental Global Real Estate Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Target 2010 Index Fund |
| Schwab Balanced Fund | Schwab Target 2015 Index Fund |
| Schwab Core Equity Fund | Schwab Target 2020 Index Fund |
| Schwab Dividend Equity Fund | Schwab Target 2025 Index Fund |
| Schwab Large-Cap Growth Fund | Schwab Target 2030 Index Fund |
| Schwab Small-Cap Equity Fund | Schwab Target 2035 Index Fund |
| Schwab Health Care Fund | Schwab Target 2040 Index Fund |
| Schwab International Core Equity Fund | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab Target 2065 Index Fund |
| Schwab Target 2030 Fund | Schwab Monthly Income Fund - Moderate Payout |
| Schwab Target 2035 Fund | Schwab Monthly Income Fund - Enhanced Payout |
| Schwab Target 2040 Fund | Schwab Monthly Income Fund - Maximum Payout |
The Schwab MarketTrack Portfolios are primarily “funds of funds.” Each of the funds seeks to achieve its investment objective by investing mainly in a combination of other Schwab Funds (underlying funds) in accordance with its target portfolio allocation. The funds may also invest directly in equity or fixed-income securities, other mutual funds, exchange-traded funds (ETFs) and cash equivalents, including money market securities, to achieve their investment objectives.
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds’ Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (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 financial statements of the funds should be read in conjunction with the underlying funds’ financial statements. For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the U.S. Securities and Exchange Commission (SEC) and are available on the SEC’s website at www.sec.gov.
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Portfolios
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes.
• Cash management sweep time deposits: Balances held in cash management sweep time deposits are accounted for on a cost basis, which approximates fair value.
• Mutual funds: Mutual funds are valued at their respective NAVs.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, mututal funds and ETFs. 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 securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations.
• Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Portfolios
Financial Notes (continued)
2. Significant Accounting Policies (continued):
Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 31, 2021 are disclosed in the Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Cash Management Transactions: The funds may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances. Excess cash invested with deposit institutions domiciled outside of the U.S., as with any offshore deposit, may be subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. The funds bear the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date). Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to more than one fund in the trusts generally are allocated among those funds in proportion to their average daily net assets. Each fund bears its share of the acquired fund fees and expenses of the underlying funds, which are indirect expenses incurred by the fund through its investments in the underlying funds. Such expenses are reflected in the net asset values of the underlying funds.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year, except for the Schwab MarketTrack Conservative Portfolio, which makes distributions from net investment income quarterly.
(g) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
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Schwab MarketTrack Portfolios
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(i) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The funds are subject to the risk that the selection of the underlying funds and the allocation of a fund’s assets among the various asset classes and market segments may cause the fund to underperform other funds with a similar investment objective.
Conflicts of Interest Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds and ETFs may create a conflict of interest because the fees paid to it and its affiliates by some underlying funds are higher than the fees paid by other underlying funds. The investment adviser also may have an incentive to select an affiliated underlying fund for other reasons, including to increase assets under management or to support new investment strategies. In addition, other conflicts of interest may exist where the best interests of the affiliated underlying fund may not be aligned with those of a fund. However, the investment adviser is a fiduciary to each fund and is legally obligated to act in each fund’s best interests when selecting underlying funds.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. 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 a fund will fluctuate, which means that an investor could lose money over short or long periods.
Exchange-Traded Fund (ETF) Risk. When a fund invests in an ETF, it will bear a proportionate share of the ETF’s expenses. In addition, lack of liquidity in the market for an ETF’s shares can result in its value being more volatile than the underlying portfolio of securities.
Direct Investment Risk. The funds may invest directly in cash, cash equivalents and equity and fixed-income securities, including money market securities, to maintain their allocations. A fund’s direct investment in these securities is subject to the same or similar risks as an underlying fund’s investment in the same securities.
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.
Underlying Fund Investment Risk. Before investing in the funds, investors should assess the risks associated with the underlying funds in which the funds may invest, which include any combination of the risks described below.
• Investment Risk. The funds may experience losses with respect to their investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective.
• Investment Style Risk. Certain underlying funds seek to track the performance of various segments of the stock market, as measured by their respective indices. Such underlying funds follow these stocks during upturns as well as downturns. Because of their indexing strategy, these underlying funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of an underlying fund’s expenses, the underlying fund’s performance is normally below that of the index. Errors relating to an index may occur from time to time and may not be identified by the underlying fund’s index provider for a period of time. In addition, market disruptions could cause delays in an underlying fund’s index’s rebalancing schedule. Such errors and/or market disruptions may result in losses for an underlying fund.
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Financial Notes (continued)
3. Risk Factors (continued):
• Tracking Error Risk. Each underlying index fund seeks to track the performance of its respective index, although it may not be successful in doing so. The divergence between the performance of an underlying fund and its index, positive or negative, is called "tracking error." Tracking error can be caused by many factors and it may be significant. If an underlying fund utilizes a sampling approach, it may not track the return of the index as well as it would if the underlying fund purchased all of the securities in the index.
• 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.
• Fixed-Income Risk. Interest rates rise and fall over time, which will affect an underlying fund’s yield and share price. A change in a central bank’s monetary policy or economic conditions, among other things, may result in a change in interest rates. A rise in interest rates could cause an underlying fund’s share price to fall. The credit quality of a portfolio investment could also cause an underlying fund’s share price to fall. An underlying fund could lose money if the issuer or guarantor of a portfolio investment or the counterparty to a derivatives contract fails to make timely principal or interest payments or otherwise honor its obligations. Fixed-income securities may be paid off earlier or later than expected. Either situation could cause an underlying fund to hold securities paying lower-than-market rates of interest, which could hurt an underlying fund’s yield or share price. Below investment-grade bonds (junk bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturns than investment-grade securities.
• 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, an underlying fund’s performance could be impacted.
• Real Estate Investment Risk. An underlying fund that has a policy of concentrating its investments in real estate companies and companies related to the real estate industry is subject to risks associated with the direct ownership of real estate securities. 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.
• Money Market Fund Risk. The funds may invest in underlying money market funds that either seek to maintain a stable $1.00 net asset value (“stable share price money market funds”) or that have a share price that fluctuates (“variable share price money market funds”). Although an underlying stable share price money market fund seeks to maintain a stable $1.00 net asset value, it is possible to lose money by investing in such a money market fund. Because the share price of an underlying variable share price money market fund will fluctuate, when a fund sells the shares it owns they may be worth more or less than what the fund originally paid for them. In addition, neither type of money market fund is designed to offer capital appreciation. Certain underlying money market funds may impose a fee upon the sale of shares or may temporarily suspend the ability to sell shares if such fund’s liquidity falls below required minimums.
• Concentration Risk. To the extent that an underlying fund’s or the index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country or asset class, the underlying fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political, or regulatory occurrences affecting that market, industry, group of industries, sector, country or asset class.
• Foreign Investment Risk. An underlying fund’s investments in securities of foreign issuers 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 an underlying fund’s investments, and could impair the underlying 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.
• 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 recordkeeping 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
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Financial Notes (continued)
3. Risk Factors (continued):
precarious than in developed countries. As a result, there may be an increased risk of illiquidity and price volatility associated with an underlying 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.
• Derivatives Risk. An underlying fund may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right, 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. A credit default swap is an agreement in which the seller agrees to make a payment to the buyer in the event of a specified credit event in exchange for a fixed payment or series of fixed payments.
An underlying fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as leverage risk, liquidity risk and market risk are discussed elsewhere in this section. An underlying fund’s use of derivatives is also subject to lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause an underlying fund to realize higher amounts of short-term capital gains. An underlying fund’s use of derivatives could reduce the underlying fund’s performance, increase its volatility, and could cause the underlying fund to lose more than the initial amount invested. The use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) by an underlying fund could cause a fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.
• Leverage Risk. Certain underlying fund transactions, such as derivatives transactions, short sales, reverse repurchase agreements, and mortgage dollar rolls, may give rise to a form of leverage and may expose an underlying fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of an underlying fund’s portfolio securities, which means even a small amount of leverage can have a disproportionately large impact on the underlying fund.
• Liquidity Risk. An underlying fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the underlying fund may have to sell them at a loss.
• Portfolio Turnover Risk. Certain of the underlying funds may buy and sell portfolio securities actively. If they do, their portfolio turnover rate and transaction costs will rise, which may lower the underlying fund’s performance and may increase the likelihood of capital gains distributions.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
Charles Schwab Investment Management, Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement between it and the trust.
For its advisory and administrative services to the funds, the investment adviser is entitled to receive an annual fee of 0.13%, payable monthly, based on a percentage of each fund’s average daily net assets.
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (Schwab), a broker-dealer affiliate of the investment adviser, (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee of up to 0.25%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds). Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.
Expense Limitation
Although these agreements specify certain fees for these services, the investment adviser and its affiliates have agreed with the funds, for so long as the investment adviser serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses as a percentage of average daily net assets as follows:
| SCHWAB MARKETTRACK ALL EQUITY PORTFOLIO | SCHWAB MARKETTRACK GROWTH PORTFOLIO | SCHWAB MARKETTRACK BALANCED PORTFOLIO | SCHWAB MARKETTRACK CONSERVATIVE PORTFOLIO |
| 0.50% | 0.50% | 0.50% | 0.50% |
The agreement to limit the funds’ total expenses charged is limited to each fund’s direct operating expenses and, therefore, does not apply to acquired fund fees and expenses, which are indirect expenses incurred by each fund through its investments in the underlying funds.
Investments in Affiliates
The funds may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the funds may invest in other related funds. As of October 31, 2021, each Schwab MarketTrack Portfolio’s ownership percentages of other related funds’ shares are:
| UNDERLYING FUNDS | SCHWAB MARKETTRACK ALL EQUITY PORTFOLIO | SCHWAB MARKETTRACK GROWTH PORTFOLIO | SCHWAB MARKETTRACK BALANCED PORTFOLIO | SCHWAB MARKETTRACK CONSERVATIVE PORTFOLIO |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 6.0% | 4.7% | 2.2% | 0.8% |
| Schwab Fundamental International Large Company Index Fund | 3.6% | 2.8% | 1.4% | 0.5% |
| Schwab Fundamental International Small Company Index Fund | 6.0% | 4.5% | 2.3% | 0.8% |
| Schwab Fundamental US Large Company Index Fund | 1.7% | 1.7% | 0.9% | 0.3% |
| Schwab Fundamental US Small Company Index Fund | 2.0% | 1.9% | 0.9% | 0.3% |
| Schwab International Index Fund | 1.3% | 1.0% | 0.5% | 0.2% |
| Schwab S&P 500 Index Fund | 0.4% | 0.4% | 0.2% | 0.1% |
| Schwab Short-Term Bond Index Fund | —% | —% | 0.3% | 0.1% |
| Schwab Small-Cap Index Fund | 1.3% | 1.3% | 0.6% | 0.2% |
| Schwab U.S. Aggregate Bond Index Fund | —% | 2.9% | 4.2% | 3.4% |
| Schwab U.S. Large-Cap Growth Index Fund | 5.0% | 3.8% | 2.3% | 0.8% |
| Schwab U.S. REIT ETF | 0.6% | 0.6% | 0.3% | 0.1% |
| Schwab Variable Share Price Money Fund, Ultra Shares | —% | 0.9% | 0.6% | 0.3% |
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
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Financial Notes (continued)
| 5. Board of Trustees: |
The Board may include people who are officers and/or directors of the investment adviser 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 funds did not pay any of these interested persons for their services as trustees, but they did pay non-interested persons (independent trustees), as noted on each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the funds were participants with other funds in the Fund Complex in a joint, syndicated, committed $850 million line of credit (the Syndicated Credit Facility), which matured on September 30, 2021. On September 30, 2021, the Syndicated Credit Facility was amended to run for a new 364 day period with a line of credit remaining unchanged, maturing on September 29, 2022. Under the terms of the Syndicated Credit Facility, in addition to the interest charged on any borrowings by a fund, each fund paid a commitment fee of 0.15% per annum on the funds’ proportionate share of the unused portion of the Syndicated Credit Facility.
During the period, the funds were participants 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, which matured on September 30, 2021. On September 30, 2021, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Uncommitted Credit Facility, each fund pays interest on the amount a fund borrows. There were no borrowings from either line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on each fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
7. Purchases and Sales of Investment Securities:
For the period ended October 31, 2021, purchases and sales of securities (excluding short-term obligations) were as follows:
| PURCHASES OF SECURITIES | SALES OF SECURITIES | |
| Schwab MarketTrack All Equity Portfolio | $45,882,815 | $62,257,613 |
| Schwab MarketTrack Growth Portfolio | 72,107,629 | 79,510,197 |
| Schwab MarketTrack Balanced Portfolio | 80,642,263 | 62,779,782 |
| Schwab MarketTrack Conservative Portfolio | 57,224,144 | 40,628,788 |
8. Federal Income Taxes:
As of October 31, 2021, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:
| TAX COST | GROSS UNREALIZED APPRECIATION | GROSS UNREALIZED DEPRECIATION | NET UNREALIZED APPRECIATION (DEPRECIATION) | |
| Schwab MarketTrack All Equity Portfolio | $438,801,066 | $433,362,516 | ($11,934,996) | $421,427,520 |
| Schwab MarketTrack Growth Portfolio | 531,679,019 | 450,011,030 | (1,708,509) | 448,302,521 |
| Schwab MarketTrack Balanced Portfolio | 426,097,199 | 232,896,380 | (4,282,478) | 228,613,902 |
| Schwab MarketTrack Conservative Portfolio | 256,761,888 | 81,648,103 | (3,050,164) | 78,597,939 |
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Financial Notes (continued)
8. Federal Income Taxes (continued):
As of October 31, 2021, the components of distributable earnings on a tax basis were as follows:
| UNDISTRIBUTED ORDINARY INCOME | UNDISTRIBUTED LONG-TERM CAPITAL GAINS | NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS | TOTAL | |
| Schwab MarketTrack All Equity Portfolio | $4,418,108 | $13,759,374 | $421,427,520 | $439,605,002 |
| Schwab MarketTrack Growth Portfolio | 1,204,288 | 31,285,724 | 448,302,521 | 480,792,533 |
| Schwab MarketTrack Balanced Portfolio | 3,127,120 | 20,448,486 | 228,613,902 | 252,189,508 |
| Schwab MarketTrack Conservative Portfolio | 431,778 | 10,373,618 | 78,597,939 | 89,403,335 |
The primary difference between book basis and tax basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales. The tax cost of the funds’ investments, disclosed above, have been adjusted from their book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.
Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2021, the funds had no capital loss carryforwards.
The tax basis components of distributions paid during the current and prior fiscal years were as follows:
| CURRENT FISCAL YEAR END DISTRIBUTIONS | PRIOR FISCAL YEAR END DISTRIBUTIONS | |||
| ORDINARY INCOME | LONG-TERM CAPITAL GAINS | ORDINARY INCOME | LONG-TERM CAPITAL GAINS | |
| Schwab MarketTrack All Equity Portfolio | $7,460,784 | $39,354,505 | $19,507,535 | $25,182,760 |
| Schwab MarketTrack Growth Portfolio | 12,895,152 | 51,712,898 | 16,953,005 | 29,262,151 |
| Schwab MarketTrack Balanced Portfolio | 9,583,547 | 25,198,263 | 12,876,300 | 10,865,370 |
| Schwab MarketTrack Conservative Portfolio | 5,222,343 | 4,019,786 | 5,723,865 | 2,542,143 |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations.
As of October 31, 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 funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the fiscal year ended October 31, 2021, the funds did not incur any interest or penalties.
9. 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Schwab Capital Trust and Shareholders of Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio, and Schwab MarketTrack Conservative Portfolio:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities, including the portfolio holdings, of Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio, and Schwab MarketTrack Conservative Portfolio (the “Funds”), four of the funds constituting Schwab Capital Trust, as of October 31, 2021, and the related statements of operations for the year then ended, the related statements of changes in net assets and the financial highlights for the two years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds as of October 31, 2021, and the results of their operations for the year then ended, and the changes in their net assets and the financial highlights for the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America. The financial highlights for each of the three years in the period ended October 31, 2019 were audited by other auditors, whose report, dated December 16, 2019, expressed an unqualified opinion on such financial highlights.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Denver, Colorado
December 16, 2021
Denver, Colorado
December 16, 2021
We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.
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Other Federal Tax Information (unaudited)
The funds may elect to pass on the benefits of the foreign tax credit to their shareholders for the fiscal year ended October 31, 2021. The foreign tax credit and the foreign source income amounts are as follows:
| FOREIGN TAX CREDIT | FOREIGN SOURCE INCOME | |
| Schwab MarketTrack All Equity Portfolio | $590,127 | $4,767,644 |
| Schwab MarketTrack Growth Portfolio | 462,090 | 3,739,535 |
| Schwab MarketTrack Balanced Portfolio | 234,115 | 1,896,037 |
| Schwab MarketTrack Conservative Portfolio | 80,841 | 652,694 |
For corporate shareholders, the following percentage of the funds’ dividend distributions paid during the fiscal year ended October 31, 2021, qualify for the corporate dividends received deduction:
| PERCENTAGE | |
| Schwab MarketTrack All Equity Portfolio | 53.65 |
| Schwab MarketTrack Growth Portfolio | 49.65 |
| Schwab MarketTrack Balanced Portfolio | 35.24 |
| Schwab MarketTrack Conservative Portfolio | 24.51 |
For the fiscal year ended October 31, 2021, the fund designates the following amounts of the dividend distributions as qualified dividends for the purposes of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS Form 1099 of the amounts for use in preparing their 2021 income tax return.
| Schwab MarketTrack All Equity Portfolio | $7,769,771 |
| Schwab MarketTrack Growth Portfolio | 10,836,488 |
| Schwab MarketTrack Balanced Portfolio | 5,686,566 |
| Schwab MarketTrack Conservative Portfolio | 2,131,127 |
Under section 852(b)(3)(C) of the Internal Revenue Code, certain funds hereby designate the following amounts as long-term capital gain dividends for the fiscal year ended October 31, 2021:
| Schwab MarketTrack All Equity Portfolio | $39,354,505 |
| Schwab MarketTrack Growth Portfolio | 51,712,898 |
| Schwab MarketTrack Balanced Portfolio | 25,198,263 |
| Schwab MarketTrack Conservative Portfolio | 4,019,786 |
For the fiscal year ended October 31, 2021, the funds designate the following amounts as dividends eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amounts for use in preparing their 2021 income tax return.
| Schwab MarketTrack All Equity Portfolio | $281,140 |
| Schwab MarketTrack Growth Portfolio | 500,698 |
| Schwab MarketTrack Balanced Portfolio | 200,416 |
| Schwab MarketTrack Conservative Portfolio | 87,834 |
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Liquidity Risk Management Program (Unaudited)
The Funds have adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Funds’ Board of Trustees (the “Board”) has designated the Funds’ investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.
Under the program, the investment adviser manages a Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. The program is reasonably designed to assess and manage a Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each Fund’s investments is supported by third-party liquidity assessment vendors.
The Funds’ Board reviewed a report at its meeting held on September 20, 2021 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2020, through May 31, 2021, which included individual Fund liquidity risk metrics. No significant liquidity events impacting any of the Funds were noted in the report. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing each Fund’s liquidity risk.
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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. (dba Schwab Asset Management) (the investment adviser) with respect to the existing funds in the Trust, including Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio and Schwab MarketTrack Conservative Portfolio (each, a Fund and collectively, the Funds), and to review certain other agreements pursuant to which the investment adviser 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 the investment adviser, including information about the investment adviser’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 the investment adviser seeking certain relevant information. The responses by the investment adviser 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 Funds that the Board reviews during the course of each year, including information that relates to the Funds’ 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 the investment adviser 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 Funds at meetings held on May 12, 2021 and June 8, 2021, and approved the renewal of the Agreement with respect to the Funds 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 Funds 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 each Fund under the Agreement, including the resources of the investment adviser and its affiliates dedicated to the Funds; |
| 2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds and benchmark data; |
| 3. | each Fund’s expenses and how those expenses compared to those of certain other similar mutual funds; |
| 4. | the profitability of the investment adviser and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to each Fund, including both direct and indirect benefits accruing to the investment adviser and its affiliates; and |
| 5. | the extent to which economies of scale would be realized as each 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 the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, the investment adviser’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 the investment adviser relating to services and support provided with respect to each 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 the investment adviser has made in its infrastructure, including
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modernizing the investment adviser’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 Funds and their shareholders. The Trustees considered the investment adviser’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 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 the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered each Fund’s performance in determining whether to renew the Agreement with respect to such Fund. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and applicable indices/benchmarks, in light of total return, portfolio yield (if applicable) and market trends, as well as in consideration of each 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. 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 Schwab MarketTrack All Equity Portfolio 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 the investment adviser that were reasonable and consistent with the Fund’s investment objective and policies and that the investment adviser 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 each Fund supported renewal of the Agreement with respect to such Fund.
Fund Expenses. With respect to each Fund’s expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of other similar mutual funds, such peer groups and comparisons having been selected and calculated by an independent provider of investment company data. The investment adviser reported to the Board, and the Board took into account, the risk assumed by the investment adviser in the development of the Funds and provision of services as well as the competitive marketplace for financial products. The Trustees also considered fees charged by the investment adviser to 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 the investment adviser provides to these other accounts, as well as differences in the market for these types of accounts. The Trustees noted that shareholders of the Funds indirectly pay their pro rata share of the fees and expenses of the underlying funds in which the Funds invest. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of each Fund are reasonable and supported renewal of the Agreement with respect to such Fund.
Profitability. The Trustees considered the compensation flowing to the investment adviser 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 the investment adviser 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 Funds and other funds in the complex. The Trustees also considered any other benefits derived by the investment adviser from its relationship with the Funds, such as whether, by virtue of its management of the Funds, the investment adviser obtains investment information or other research resources that aid it in providing advisory services to other clients. Also, because each Fund invests a portion of its assets in other funds within the Schwab fund complex, the Trustees considered the indirect benefits from such Fund’s investments in other underlying funds managed by the investment adviser. The Trustees considered whether the compensation and profitability with respect to the Funds under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds by the investment adviser and its affiliates. The Trustees noted that the investment adviser continues to invest substantial sums in its business in order to provide enhanced research capabilities, services and systems to benefit the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of the investment adviser
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with respect to each Fund is reasonable and supported renewal of the Agreement with respect to such 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 and whether those are passed along to a Fund’s shareholders through (i) the enhancement of services provided to the Funds in return for fees paid, including through investments by the investment adviser in the investment adviser’s infrastructure, including modernizing the investment adviser’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 Funds and their shareholders; (ii) graduated investment advisory fee schedules or unitary fee structures, fee waivers, or expense caps by the investment adviser 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 the investment adviser has shared any economies of scale with the Funds by investing in the investment adviser’s infrastructure, as discussed above, over time and that the investment adviser’s internal costs of providing investment management, technology, administrative,
legal and compliance services to the Funds continue to increase as a result of regulatory or other developments. The Trustees considered that the investment adviser and its affiliates may employ contractual expense caps to protect shareholders from high fees when fund assets are relatively small, for example, in the case of newer funds or funds with investment strategies that are from time to time out of favor, because, among other reasons, shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that each 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 Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of the services provided and the related expenses borne by the investment adviser 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 funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 103 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| Independent Trustees | |||
| Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
| Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 103 | 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. | 103 | 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). | 103 | 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. | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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 and Chief Executive Officer (Oct. 2008 – present) and President (Oct. 2008 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), 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 – Oct. 2021), Charles Schwab Investment Management, Inc. | 103 | 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. | 103 | 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 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.; 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 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.; 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 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.; 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 |
| 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., the investment adviser for the trusts in the Fund Complex, and is an employee 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. 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
All Equity Composite Index A custom blended index developed by Schwab Asset Management based on a comparable portfolio asset allocation. Effective July 1, 2020, the index is composed of 31.33% S&P 500 Index, 5.0% Russell 1000 Growth Index, 13.5% Russell RAFI US Large Company Index, 10.33% Russell 2000 Index, 4.5% Russell RAFI US Small Company Index, 13.83% MSCI EAFE Index (Net), 6.0% Russell RAFI Developed ex US Large Company Index (Net), 5.0% Russell RAFI Developed ex US Small Company Index (Net), 5.0% Russell RAFI Emerging Markets Large Company Index (Net), 5.0% Dow Jones Equity All REIT Capped Index, and 0.5% Bloomberg US Treasury Bills 1-3 Month Index. From February 28, 2020 through June 30, 2020, the index was composed of 31.33% S&P 500 Index, 5.0% Russell 1000 Growth Index, 13.5% Russell RAFI US Large Company Index, 10.33% Russell 2000 Index, 4.5% Russell RAFI US Small Company Index, 13.83% MSCI EAFE Index (Net), 6.0% Russell RAFI Developed ex US Large Company Index (Net), 5.0% Russell RAFI Developed ex US Small Company Index (Net), 5.0% Russell RAFI Emerging Markets Large Company Index (Net), 5.0% Dow Jones U.S. Select REIT Index, and 0.5% Bloomberg US Treasury Bills 1-3 Month Index. From December 1, 2014 through February 27, 2020, the index was composed of 31.33% S&P 500 Index, 17.33% Russell 2000 Index, 13.50% Russell RAFI US Large Company Index, 7.50% Russell RAFI US Small Company Index, 13.83% MSCI EAFE Index (Net), 6% Russell RAFI Developed ex US Large Company Index (Net), 5% Russell RAFI Developed ex US Small Company Index (Net), 5% Russell RAFI Emerging Markets Large Company Index (Net), and 0.5% Bloomberg US Treasury Bills 1-3 Month Index. From March 1, 2014 through November 30, 2014, the index was composed of 45% S&P 500 Index, 25% Russell 2000 Index and 30% MSCI EAFE Index (Net). On March 1, 2014, the combination of the S&P 500 Index and Russell 2000 Index replaced the Dow Jones U.S. Total Stock Market Index in the custom index. Prior to March 1, 2014, the index was composed of 70% Dow Jones U.S. Total Stock Market Index and 30% MSCI EAFE Index (Net). Percentages listed may not total to 100% due to rounding.
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Balanced Composite Index A custom blended index developed by Schwab Asset Management based on a comparable portfolio asset allocation. Effective July 1, 2020 the index is composed of 21.0% S&P 500 Index, 3.0% Russell 1000 Growth Index, 9.0% Russell RAFI US Large Company Index, 6.3% Russell 2000 Index, 2.7% Russell RAFI US Small Company Index, 7.0% MSCI EAFE Index (Net), 3.0% Russell RAFI Developed ex US Large Company Index (Net), 2.5% Russell RAFI Developed ex US Small Company Index (Net), 2.5% Russell RAFI Emerging Markets Large Company Index (Net), 3.0% Dow Jones Equity All REIT Capped Index, 35.0% Bloomberg US Aggregate Bond Index, 1.0% Bloomberg US Government/Credit 1-5 Year Index, and 4.0% Bloomberg US Treasury Bills 1-3 Month Index. From February 28, 2020 through June 30, 2020, the index was composed of 21% S&P 500 Index, 3.0% Russell 1000 Growth Index, 9.0% Russell RAFI US Large Company Index, 6.3% Russell 2000 Index, 2.7% Russell RAFI US Small Company Index, 7.0% MSCI EAFE Index (Net), 3.0% Russell RAFI Developed ex US Large Company Index (Net), 2.5% Russell RAFI Developed ex US Small Company Index (Net), 2.5% Russell RAFI Emerging Markets Large Company Index (Net), 3.0% Dow Jones U.S. Select REIT Index, 35.0% Bloomberg US Aggregate Bond Index, 1.0% Bloomberg US Government/Credit 1-5 Year Index, and 4.0% Bloomberg US Treasury Bills 1-3 Month Index. From December 1, 2014
through February 27, 2020, the Balanced Composite Index was composed of 21% S&P 500 Index, 10.5% Russell 2000 Index, 9% Russell RAFI US Large Company Index, 4.5% Russell RAFI US Small Company Index, 7% MSCI EAFE Index (Net), 3% Russell RAFI Developed ex US Large Company Index (Net), 2.5% Russell RAFI Developed ex US Small Company Index (Net), 2.5% Russell RAFI Emerging Markets Large Company Index (Net), 35% Bloomberg US Aggregate Bond Index, and 5% Bloomberg US Treasury Bills 1-3 Month Index. From March 1, 2014 through November 30, 2014, the index was composed of 30% S&P 500 Index, 15% Russell 2000 Index, 15% MSCI EAFE Index (Net), 35% Bloomberg US Aggregate Bond Index, and 5% Bloomberg US Treasury Bills 1-3 Month Index. On March 1, 2014, the combination of the S&P 500 Index and Russell 2000 Index replaced the Dow Jones U.S. Total Stock Market Index in the custom index. Prior to March 1, 2014, the index was composed of 45% Dow Jones U.S. Total Stock Market Index, 15% MSCI EAFE Index (Net), 35% Bloomberg US Aggregate Bond Index, and 5% Bloomberg US Treasury Bills 1-3 Month Index. Percentages listed may not total to 100% due to rounding.
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.
Bloomberg US Government/Credit 1–5 Year Index An index that is a broad-based benchmark measuring the performance of U.S. dollar-denominated U.S. Treasury bonds, government related bonds (i.e., U.S. and non-U.S. agencies, sovereign, quasi-sovereign, supranational and local authority debt) and investment grade U.S. corporate bonds that have a remaining maturity of greater than or equal to one year and less than five years. 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 a remaining maturity greater than or equal to one year and less than five years. The index excludes certain types of securities, including, bonds with equity type features (e.g., warrants, convertibles and preferreds), tax-exempt municipal securities, inflation-linked bonds, floating rate issues, strips, private placements, U.S. dollar-denominated 25 and 50 par retail bonds, structured notes and pass-through certificates. The index is market capitalization weighted and the securities in the index are updated on the last business day of each month.
Bloomberg US Treasury Bills 1–3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $300 million or more of outstanding face value. It excludes zero-coupon STRIPS.
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bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
Conservative Composite Index A custom blended index developed by Schwab Asset Management based on a comparable portfolio asset allocation. Effective July 1, 2020, the index is composed of 14.0% S&P 500 Index, 2.0% Russell 1000 Growth Index, 6.0% Russell RAFI US Large Company Index, 4.67% MSCI EAFE Index (Net), 4.2% Russell 2000 Index, 1.8% Russell RAFI US Small Company Index, 2.0% Russell RAFI Developed ex US Large Company Index (Net), 1.67% Russell RAFI Developed ex US Small Company Index (Net), 1.67% Russell RAFI Emerging Markets Large Company Index (Net), 2.0% Dow Jones Equity All REIT Capped Index, 55.0% Bloomberg US Aggregate Bond Index, 1.0% Bloomberg US Government/Credit 1-5 Year Index, and 4.0% Bloomberg US Treasury Bills 1-3 Month Index. From February 28, 2020 through June 30, 2020, the index was composed of 14.0% S&P 500 Index, 2.0% Russell 1000 Growth Index, 6.0% Russell RAFI US Large Company Index, 4.67% MSCI EAFE Index (Net), 4.2% Russell 2000 Index, 1.8% Russell RAFI US Small Company Index, 2.0% Russell RAFI Developed ex US Large Company Index (Net), 1.67% Russell RAFI Developed ex US Small Company Index (Net), 1.67% Russell RAFI Emerging Markets Large Company Index (Net), 2.0% Dow Jones U.S. Select REIT Index, 55.0% Bloomberg US Aggregate Bond Index, 1.0% Bloomberg US Government/Credit 1-5 Year Index, and 4.0% Bloomberg US Treasury Bills 1-3 Month Index. From December 1, 2014, through February 27, 2020, the index was composed of 14.0% S&P 500 Index, 7.0% Russell 2000 Index, 6.0% Russell RAFI US Large Company Index, 3.0% Russell RAFI US Small Company Index, 4.67% MSCI EAFE Index (Net), 2.0% Russell RAFI Developed ex US Large Company Index (Net), 1.67% Russell RAFI Developed ex US Small Company Index (Net), 1.67% Russell RAFI Emerging Markets Large Company Index (Net), 55.0% Bloomberg US Aggregate Bond Index, and 5.0% Bloomberg US Treasury Bills 1-3 Month Index. From March 1, 2014 through November 30, 2014, the index was composed of 20% S&P 500 Index, 10% Russell 2000 Index, 10% MSCI EAFE Index (Net), 55% Bloomberg US Aggregate Bond Index, and 5% Bloomberg US Treasury Bills 1-3 Month Index. On March 1, 2014, the combination of the S&P 500 Index and Russell 2000 Index replaced the Dow Jones U.S. Total Stock Market Index in the custom index. Prior to March 1, 2014, the index was composed of 30% Dow Jones U.S. Total Stock Market Index, 10% MSCI EAFE Index (Net), 55% Bloomberg US Aggregate Bond Index, and 5% Bloomberg US Treasury Bills 1-3 Month Index. Percentages listed may not total to 100% due to rounding.
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%.
Dow Jones U.S. Select REIT Index An index that is a float-adjusted market-capitalization weighted index comprised of income-producing commercial and/or residential real estate investment trusts (REITs). The index excludes mortgage REITs, net-lease REITs, real estate finance companies, mortgage brokers and bankers, commercial and residential real estate brokers and estate agents, homebuilders, large landowners and sub-dividers of unimproved land, hybrid REITs, timber REITs and companies that have more than 25% of their assets in direct mortgage investments.
Dow Jones U.S. Total Stock Market Index An index which includes all U.S. equity issues with readily available prices. The index is a float-adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
FTSE non-US Dollar World Government Bond Index A market capitalization index that measures the total rate of return performance for the government bonds of 22 countries, excluding the U.S., with a remaining maturity of at least 1 year.
Growth Composite Index A custom blended index developed by Schwab Asset Management based on a comparable portfolio asset allocation. Effective July 1, 2020 the index is composed of 28.0% S&P 500 Index, 3.3% Russell 1000 Growth Index, 12.0% Russell RAFI US Large Company Index, 8.9% Russell 2000 Index, 3.8% Russell RAFI US Small Company Index, 9.33% MSCI EAFE Index (Net), 4.0% Russell RAFI Developed ex US Large Company Index (Net), 3.33% Russell RAFI Developed ex US Small Company Index (Net), 3.33% Russell RAFI Emerging Markets Large Company Index (Net), 4.0% Dow Jones Equity All REIT Capped Index, 16.0% Bloomberg US Aggregate Bond Index, and 4.0% Bloomberg US Treasury Bills 1-3 Month Index. From February 28, 2020 through June 30, 2020, the index was composed of 28.0% S&P 500 Index, 3.3% Russell 1000 Growth Index, 12.0% Russell RAFI US Large Company Index, 8.9% Russell 2000 Index, 3.8% Russell RAFI US Small Company Index, 9.33% MSCI EAFE Index (Net), 4.0% Russell RAFI Developed ex US Large Company Index (Net), 3.33% Russell RAFI Developed ex US Small Company Index (Net), 3.33% Russell RAFI Emerging Markets Large Company Index (Net), 4.0% Dow Jones U.S. Select REIT Index, 16.0% Bloomberg US Aggregate Bond Index, and 4.0% Bloomberg US Treasury Bills 1-3 Month Index. From December 1, 2014 through February 27, 2020, the Growth Composite Index was composed of 28% S&P 500 Index, 14% Russell 2000 Index, 12% Russell RAFI US Large Company Index, 6% Russell RAFI US Small Company Index, 9.33% MSCI EAFE Index (Net), 4% Russell RAFI Developed ex US Large Company Index (Net), 3.33% Russell RAFI Developed ex US Small Company Index (Net), 3.33% Russell RAFI Emerging Markets Large Company Index (Net), 15% Bloomberg US Aggregate Bond Index, and 5% Bloomberg US Treasury Bills 1-3 Month Index. From March 1, 2014 through November 30, 2014, the index was composed of 40% S&P 500 Index, 20% Russell 2000 Index, 20% MSCI EAFE Index (Net), 15% Bloomberg US Aggregate Bond Index, and 5% Bloomberg US Treasury Bills 1-3 Month Index. On March 1, 2014, the
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Schwab MarketTrack Portfolios | Annual Report
Schwab MarketTrack Portfolios
combination of the S&P 500 Index and Russell 2000 Index replaced the Dow Jones U.S. Total Stock Market Index in the custom index. Prior to March 1, 2014 the index was composed of 60% Dow Jones U.S. Total Stock Market Index, 20% MSCI EAFE Index (Net), 15% Bloomberg US Aggregate Bond Index, and 5% Bloomberg US Treasury Bills 1-3 Month Index. Percentages listed may not total to 100% due to rounding.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 1000 Growth Index An index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000 Index An index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell 1000 Value Index An index that measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell RAFI Developed ex US Large Company Index (Net) An index that ranks developed ex-U.S. companies in the FTSE Global Total Cap Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5%. The index uses a partial quarterly reconstitution methodology in which the
index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. Selecting the developed ex-U.S. companies in the FTSE Global Total Cap Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Developed ex US Small Company Index (Net) An index that ranks developed ex-U.S. companies in the FTSE Global Total Cap Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores rank below the 87.5% threshold. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. Selecting the developed ex-U.S. companies in the FTSE Global Total Cap Index measures the performance of the smallest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Emerging Markets Large Company Index (Net) An index that ranks emerging market companies in the FTSE Global Total Cap Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5%. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. Selecting the emerging companies in the FTSE Global Total Cap Index measures the performance of the investable securities in emerging countries globally.
Russell RAFI US Large Company Index An index that ranks U.S. companies in the FTSE Global Total Cap Index. The Russell RAFI US Large Company Index includes only those securities that are members of the U.S. portion whose fundamental scores are in the top 87.5%. 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.
Russell RAFI US Small Company Index An index that ranks U.S. companies in the FTSE Global Total Cap Index. The Russell RAFI US Small Company Index includes only those securities that are members of the U.S. portion and rank below the 87.5% fundamental score threshold. 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 MarketTrack Portfolios
Schwab Asset Management
With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Schwab Asset 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., dba Schwab Asset Management
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds
1-877-824-5615
© 2021 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
Member SIPC®
Printed on recycled paper.
| ¹ | State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation. |
| ² | 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. |
Annual Report | October 31, 2021
Schwab Target Funds
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 Fund
Schwab Target 2060 Fund
Schwab Target 2065 Fund
This page is intentionally left blank.
Schwab Target Funds
In This Report
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset ManagementTM
Distributor: Charles Schwab & Co., Inc. (Schwab)
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Schwab Target Funds | Annual Report
Schwab Target Funds
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
| Total Return for the 12 Months Ended October 31, 2021 | |
| Schwab Target 2010 Fund (Ticker Symbol: SWBRX) | 13.46% |
| Target 2010 Composite Index | 13.22% |
| Fund Category: Morningstar Target-Date 2000-20101 | 13.51% |
| Performance Details | pages 8-10 |
| Schwab Target 2015 Fund (Ticker Symbol: SWGRX) | 14.54% |
| Target 2015 Composite Index | 14.34% |
| Fund Category: Morningstar Target-Date 20151 | 15.87% |
| Performance Details | pages 11-13 |
| Schwab Target 2020 Fund (Ticker Symbol: SWCRX) | 15.27% |
| Target 2020 Composite Index | 15.10% |
| Fund Category: Morningstar Target-Date 20201 | 17.49% |
| Performance Details | pages 14-16 |
| Schwab Target 2025 Fund (Ticker Symbol: SWHRX) | 20.25% |
| Target 2025 Composite Index | 20.08% |
| Fund Category: Morningstar Target-Date 20251 | 20.05% |
| Performance Details | pages 17-19 |
| Schwab Target 2030 Fund (Ticker Symbol: SWDRX) | 24.38% |
| Target 2030 Composite Index | 24.32% |
| Fund Category: Morningstar Target-Date 20301 | 23.89% |
| Performance Details | pages 20-22 |
| Schwab Target 2035 Fund (Ticker Symbol: SWIRX) | 27.76% |
| Target 2035 Composite Index | 27.66% |
| Fund Category: Morningstar Target-Date 20351 | 28.05% |
| Performance Details | pages 23-25 |
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 components that make up each of the composite indices may vary over time. For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
| 1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
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Schwab Target Funds | Annual Report
Schwab Target Funds
Performance at a Glance (continued)
| Total Return for the 12 Months Ended October 31, 2021 | |
| Schwab Target 2040 Fund (Ticker Symbol: SWERX) | 30.57% |
| Target 2040 Composite Index | 30.55% |
| Fund Category: Morningstar Target-Date 20401 | 31.45% |
| Performance Details | pages 26-28 |
| Schwab Target 2045 Fund (Ticker Symbol: SWMRX) | 33.13% |
| Target 2045 Composite Index | 33.27% |
| Fund Category: Morningstar Target-Date 20451 | 33.77% |
| Performance Details | pages 29-31 |
| Schwab Target 2050 Fund (Ticker Symbol: SWNRX) | 34.83% |
| Target 2050 Composite Index | 34.85% |
| Fund Category: Morningstar Target-Date 20501 | 34.78% |
| Performance Details | pages 32-34 |
| Schwab Target 2055 Fund (Ticker Symbol: SWORX) | 35.79% |
| Target 2055 Composite Index | 35.90% |
| Fund Category: Morningstar Target-Date 20551 | 35.28% |
| Performance Details | pages 35-37 |
| Schwab Target 2060 Fund (Ticker Symbol: SWPRX) | 36.89% |
| Target 2060 Composite Index | 36.95% |
| Fund Category: Morningstar Target-Date 20601 | 35.67% |
| Performance Details | pages 38-40 |
| Schwab Target 2065 Fund (Ticker Symbol: SWQRX) | 13.30% 2 |
| Target 2065 Composite Index | 12.73% 2 |
| Fund Category: Morningstar Target-Date 2065+1 | N/A |
| Performance Details | pages 41-43 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
The components that make up each of the composite indices may vary over time. For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
| 1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 2 | Total returns shown are since the fund’s inception date of February 25, 2021. |
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Schwab Target Funds | Annual Report
Schwab Target Funds
From the President
Jonathan de St. Paer
President of Schwab Asset
Management and the funds
covered in this report.
President of Schwab Asset
Management and the funds
covered in this report.
Dear Shareholder,
During the 12-month reporting period ended October 31, 2021, global equity markets generally gained ground as economies began to recover from COVID-19 pandemic lockdowns and corporations generally posted stronger-than-expected profits. The S&P 500® Index, a bellwether for the overall U.S. stock market, rose 42.9%, reaching record territory as the period ended, while the MSCI EAFE® Index (Net)*, a broad measure of developed individual equity performance, returned 34.2%. A far more complex story lay beneath those broad gains. Skyrocketing oil and gas prices propelled the energy sector ahead of other sectors, while the financials sector sharply outperformed on strong earnings and rising interest rates. Other cyclically sensitive sectors, such as the information technology and real estate sectors, also outperformed, while more traditionally defensive sectors, such as the utilities and consumer staples sectors, trailed by comparison. U.S. fixed-income markets produced mixed results in the face of increasing inflationary pressures, with higher returns for lower-rated bonds compared to their investment-grade counterparts and corporates over government-issued securities.
While there are always winners and losers among various markets, sectors, and individual stocks, today’s top performers are rarely the same as yesterday’s or tomorrow’s. At Schwab Asset Management, we believe the best defense against a shifting investment landscape is a portfolio that’s diversified across a wide variety of asset classes and geographical areas. For investors who don’t have the time or desire to take on managing ongoing asset allocation and diversification decisions—and making changes as they approach retirement—the Schwab Target Funds offer an all-in-one portfolio solution. Each of the funds—including the Schwab Target 2065 Fund, which launched on February 25, 2021—is designed to reflect an investor’s risk tolerance and investment goals as they change over time. As your target retirement date approaches, allocations shift from equity funds to fixed-income funds and from actively managed strategies to index strategies. The funds can help you maintain a diversified portfolio that reflects your evolving risk appetite at every stage of your investment lifecycle up to and through retirement.
Thank you for investing with Schwab Asset Management. For more information about the Schwab Target Funds, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.schwabassetmanagement.com . We are also happy to hear from you at 1-877-824-5615.
Sincerely,
“ For investors who don’t have the time or desire to take on managing ongoing asset allocation and diversification decisions—and making changes as they approach retirement—the Schwab Target Funds offer an all-in-one portfolio solution.”
Past performance is no guarantee of future results.
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Management views may have changed since the report date.
Schwab Asset Management is the dba name for Charles Schwab Investment Management, Inc., the investment adviser for Schwab Funds, Laudus Funds, and Schwab ETFs.
| * | 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 Target Funds | Annual Report
Schwab Target Funds
The Investment Environment
For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 42.91% with cyclically sensitive sectors, such as the energy, financials, information technology, and real estate sectors, outperforming traditionally defensive sectors, such as the utilities and consumer staples sectors. U.S. small-cap stocks outperformed U.S. large-cap stocks, with the Russell 2000® Index and the Russell 1000® Index returning 50.80% and 43.51%, respectively. Among U.S. large-caps, value stocks slightly outperformed growth stocks, with the Russell 1000® Value Index and Russell 1000® Growth Index returning 43.76% and 43.21%, respectively. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. Among international markets, the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 34.18% and the MSCI Emerging Markets Index (Net)* returned 16.96%. The Bloomberg US Aggregate Bond Index returned -0.48% and the FTSE non-US Dollar World Government Bond Index returned -4.32%.
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. U.S. gross domestic product (GDP) rose at an annualized rate of 4.3% for the fourth quarter of 2020, 6.4% for the first quarter of 2021, and 6.7% for the second quarter of 2021 before falling back to 2.0% for the third quarter of 2021 amid fading government stimuli, persistent inflation, and a new surge in COVID-19 cases. Unemployment, which skyrocketed in April 2020, fell over the reporting period. Inflation, which had remained well below the Fed’s traditional 2% target until it jumped in March 2021, continued to rise through June 2021 and remained elevated through October 2021, largely due to 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.
Asset Class Performance Comparison % returns during the 12 months ended October 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 an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and Schwab Asset Management.
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 Target Funds | Annual Report
Schwab Target Funds
The Investment Environment (continued)
Outside the United States, global economies also displayed resilience but were somewhat more constrained amid continuing struggles against COVID-19 and the emergence and spread of the Delta variant. Oil prices rose through most of the reporting period, except for a dip in July and August, on growing demand and reduced production. In the eurozone, GDP growth jumped in the third quarter of 2020, regaining much of its losses from the second quarter, but turned slightly negative for both the fourth quarter of 2020 and the first quarter of 2021. GDP growth turned positive for the second and third quarters of 2021. The United Kingdom, which was particularly hard-hit by the COVID-19 pandemic, suffered its biggest slump in more than three centuries over the course of 2020, effectively wiping out its growth over the past seven years, but posted a small positive gain in GDP for the first quarter of 2021. The United Kingdom removed many of the country’s stringent restrictions during the summer and posted a strong gain in GDP growth for the second quarter of 2021. Japan’s economy, after rebounding sharply in the third quarter of 2020, posted a positive, albeit smaller, gain in the fourth quarter of 2020. Japan’s economy subsequently contracted in the first quarter of 2021 on a resurgence of COVID-19 cases and slow COVID-19 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, maintained positive GDP growth in the fourth quarter of 2020. China’s GDP growth accelerated sharply for the first quarter of 2021 before easing for the subsequent two quarters in part because of the political landscape and an emphasis on domestic consumption over globalization. India, after plunging into one of the worst recessions of any major economy, saw its first positive gain in GDP in the fourth quarter of 2020 and posted a sharp jump in GDP growth for the second quarter of 2021.
For the most part, central banks around the world, including the Fed, 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 United States, 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 needed to achieve a full recovery. The Fed maintained the federal funds rate in a range of 0.00% to 0.25% throughout the reporting period. However, as inflation continued to rise for most of 2021, the Fed tightened its stance, signaling that—due to significant progress made on its twin goals of maximum employment and price stability—it could start to reduce its bond-buying program as soon as late 2021 and could begin to raise interest rates in the next 18 months. In developed international markets, most central banks were similarly accommodative while acknowledging that conditions were changing. The European Central Bank held interest rates at 0.00%, unchanged since March 2016, but reduced the pace of its asset purchase program instituted 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—despite citing moderately improving conditions—vowed to continue to maintain stability in its financial markets through its ongoing programs. The Bank of England maintained its key official bank rate at 0.1% and continued to support its bond-buying program. Emerging markets were mixed. Central banks in China, India, and Indonesia maintained their low rates to help counter the ongoing effects of the COVID-19 pandemic. Mexico, Brazil, Russia, and Pakistan raised their rates, citing a stronger-than-expected recovery or to counteract the impacts of inflation.
U.S. bond prices drifted lower early in the reporting period, driving yields higher, in anticipation of a new fiscal aid package and hope for economic improvement in 2021. (Bond yields and bond prices typically move in opposite directions.) After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns. The yield on the 10-year U.S. Treasury, which began the reporting period at 0.88%, ended the period at 1.55%. Short-term rates, which have also remained historically low, fell further over the reporting period, with three-month U.S. Treasury yields beginning the period at 0.09% and ending it at 0.05%.
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Schwab Target Funds | Annual Report
Schwab Target Funds
Fund Management
 | Zifan Tang, Ph.D., CFA, Senior Portfolio Manager, is responsible for the co-management of the funds. Prior to joining Schwab in 2012, Ms. Tang was a product manager at Thomson Reuters and from 1997 to 2009 worked as a portfolio manager at Barclays Global Investors (now known as BlackRock). |
 | Patrick Kwok, CFA, Portfolio Manager, is responsible for the co-management of the funds. Previously, Mr. Kwok served as an associate portfolio manager from 2012 to 2016. Prior to that, he worked as a fund administration manager, where he was responsible for oversight of sub-advisers, trading, cash management, and fund administration supporting the Charles Schwab Trust Bank Collective Investment Trusts and multi-asset Schwab Funds. Prior to joining Schwab Asset Management in 2008, Mr. Kwok spent two years as an asset operations specialist at Charles Schwab Trust Company. He also worked for one year at State Street Bank & Trust as a portfolio accountant and pricing specialist. |
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Schwab Target Funds | Annual Report
Schwab Target 2010 Fund as of October 31, 2021
The Schwab Target 2010 Fund (the 2010 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2010 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2010 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2010 Fund’s asset allocation was approximately 34.6% equity securities, 60.7% fixed-income securities, and 4.7% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2010 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2010 Fund returned 13.46%. The 2010 Fund’s internally calculated comparative index, the Target 2010 Composite Index (the composite index), returned 13.22%.
Positioning and Strategies. The 2010 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2010 Fund’s U.S. equity allocations, particularly the 2010 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2010 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2010 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2010 Fund’s international equity allocations also contributed to the total return of the 2010 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2010 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2010 Fund’s real estate allocation also contributed to the total return of the 2010 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2010 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2010 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2010 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The Schwab Short-Term Bond Index Fund also detracted from the total return of the 2010 Fund and generally tracked its comparative index, the Bloomberg US Government/Credit 1-5 Year Index.
Management views and portfolio holdings may have changed since the report date.
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Schwab Target Funds | Annual Report
Schwab Target 2010 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2010 Fund (7/1/05) | 13.46% | 7.67% | 6.62% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 16.04% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Target 2010 Composite Index | 13.22% | 7.62% | 6.67% |
| Fund Category: Morningstar Target-Date 2000-20102 | 13.51% | 7.52% | 6.53% |
| Fund Expense Ratios3: Net 0.32%; Gross 0.46% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.32% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
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Schwab Target Funds | Annual Report
Schwab Target 2010 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 21 |
| Portfolio Turnover Rate | 21% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
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Schwab Target Funds | Annual Report
Schwab Target 2015 Fund as of October 31, 2021
The Schwab Target 2015 Fund (the 2015 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2015 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2015 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2015 Fund’s asset allocation was approximately 37.6% equity securities, 58.1% fixed-income securities and 4.3% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2015 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2015 Fund returned 14.54%. The 2015 Fund’s internally calculated comparative index, the Target 2015 Composite Index (the composite index), returned 14.34%.
Positioning and Strategies. The 2015 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2015 Fund’s U.S. equity allocations, particularly the 2015 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2015 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2015 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2015 Fund’s international equity allocations also contributed to the total return of the 2015 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2015 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2015 Fund’s real estate allocation also contributed to the total return of the 2015 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2015 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2015 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2015 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The Schwab Short-Term Bond Index Fund also detracted from the total return of the 2015 Fund and generally tracked its comparative index, the Bloomberg US Government/Credit 1-5 Year Index.
Management views and portfolio holdings may have changed since the report date.
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Schwab Target Funds | Annual Report
Schwab Target 2015 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2015 Fund (3/12/08) | 14.54% | 7.99% | 7.12% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 16.04% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Target 2015 Composite Index | 14.34% | 7.93% | 7.17% |
| Fund Category: Morningstar Target-Date 20152 | 15.87% | 8.31% | 7.41% |
| Fund Expense Ratios3: Net 0.33%; Gross 0.43% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.33% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
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Schwab Target Funds | Annual Report
Schwab Target 2015 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 21 |
| Portfolio Turnover Rate | 14% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
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Schwab Target Funds | Annual Report
Schwab Target 2020 Fund as of October 31, 2021
The Schwab Target 2020 Fund (the 2020 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2020 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2020 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2020 Fund’s asset allocation was approximately 39.7% equity securities, 56.3% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2020 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2020 Fund returned 15.27%. The 2020 Fund’s internally calculated comparative index, the Target 2020 Composite Index (the composite index), returned 15.10%.
Positioning and Strategies. The 2020 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2020 Fund’s U.S. equity allocations, particularly the 2020 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2020 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2020 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2020 Fund’s international equity allocations also contributed to the total return of the 2020 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2020 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2020 Fund’s real estate allocation also contributed to the total return of the 2020 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2020 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2020 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2020 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The Schwab Short-Term Bond Index Fund also detracted from the total return of the 2020 Fund and generally tracked its comparative index, the Bloomberg US Government/Credit 1-5 Year Index.
Management views and portfolio holdings may have changed since the report date.
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Schwab Target Funds | Annual Report
Schwab Target 2020 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2020 Fund (7/1/05) | 15.27% | 8.69% | 8.01% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 16.04% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Target 2020 Composite Index | 15.10% | 8.67% | 8.10% |
| Fund Category: Morningstar Target-Date 20202 | 17.49% | 8.85% | 7.97% |
| Fund Expense Ratios3: Net 0.35%; Gross 0.37% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.35% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
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Schwab Target Funds | Annual Report
Schwab Target 2020 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 20 |
| Portfolio Turnover Rate | 10% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
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Schwab Target Funds | Annual Report
Schwab Target 2025 Fund as of October 31, 2021
The Schwab Target 2025 Fund (the 2025 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2025 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2025 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2025 Fund’s asset allocation was approximately 51.9% equity securities, 44.9% fixed-income securities, and 3.2% cash and cash equivalents (including money market funds). At its target date, the 2025 Fund’s allocation will be approximately 40.0% equity securities, 56.0% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2025 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2025 Fund returned 20.25%. The 2025 Fund’s internally calculated comparative index, the Target 2025 Composite Index (the composite index), returned 20.08%.
Positioning and Strategies. The 2025 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2025 Fund’s U.S. equity allocations, particularly the 2025 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2025 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2025 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2025 Fund’s international equity allocations also contributed to the total return of the 2025 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2025 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2025 Fund’s real estate allocation also contributed to the total return of the 2025 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2025 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2025 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2025 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The Schwab Short-Term Bond Index Fund also detracted from the total return of the 2025 Fund and generally tracked its comparative index, the Bloomberg US Government/Credit 1-5 Year Index.
Management views and portfolio holdings may have changed since the report date.
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Schwab Target Funds | Annual Report
Schwab Target 2025 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2025 Fund (3/12/08) | 20.25% | 10.09% | 9.11% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 16.04% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Target 2025 Composite Index | 20.08% | 10.14% | 9.25% |
| Fund Category: Morningstar Target-Date 20252 | 20.05% | 9.82% | 8.58% |
| Fund Expense Ratios3: Net 0.46%; Gross 0.48% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.46% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
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Schwab Target Funds | Annual Report
Schwab Target 2025 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 23 |
| Portfolio Turnover Rate | 16% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
19
Schwab Target Funds | Annual Report
Schwab Target 2030 Fund as of October 31, 2021
The Schwab Target 2030 Fund (the 2030 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2030 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2030 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2030 Fund’s asset allocation was approximately 63.1% equity securities, 34.3% fixed-income securities, and 2.5% cash and cash equivalents (including money market funds).1 At its target date, the 2030 Fund’s allocation will be approximately 40.0% equity securities, 56.0% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2030 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2030 Fund returned 24.38%. The 2030 Fund’s internally calculated comparative index, the Target 2030 Composite Index (the composite index), returned 24.32%.
Positioning and Strategies. The 2030 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2030 Fund’s U.S. equity allocations, particularly the 2030 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2030 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2030 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2030 Fund’s international equity allocations also contributed to the total return of the 2030 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2030 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2030 Fund’s real estate allocation also contributed to the total return of the 2030 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2030 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2030 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2030 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The PIMCO International Bond Fund (U.S. Dollar-Hedged) also detracted from the total return of the 2030 Fund but contributed to relative return, outperforming its comparative index, the Bloomberg Global Aggregate ex-USD (USD Hedged) Index.
Management views and portfolio holdings may have changed since the report date.
| 1 | Percentages may not add up to 100% due to rounding. |
20
Schwab Target Funds | Annual Report
Schwab Target 2030 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2030 Fund (7/1/05) | 24.38% | 11.23% | 9.95% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 16.04% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Target 2030 Composite Index | 24.32% | 11.28% | 10.13% |
| Fund Category: Morningstar Target-Date 20302 | 23.89% | 11.11% | 9.43% |
| Fund Expense Ratios3: Net 0.53%; Gross 0.55% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.53% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
21
Schwab Target Funds | Annual Report
Schwab Target 2030 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 23 |
| Portfolio Turnover Rate | 14% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
22
Schwab Target Funds | Annual Report
Schwab Target 2035 Fund as of October 31, 2021
The Schwab Target 2035 Fund (the 2035 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2035 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2035 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2035 Fund’s asset allocation was approximately 71.6% equity securities, 26.4% fixed-income securities, and 2.0% cash and cash equivalents (including money market funds). At its target date, the 2035 Fund’s allocation will be approximately 40.0% equity securities, 56.0% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2035 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2035 Fund returned 27.76%. The 2035 Fund’s internally calculated comparative index, the Target 2035 Composite Index (the composite index), returned 27.66%.
Positioning and Strategies. The 2035 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2035 Fund’s U.S. equity allocations, particularly the 2035 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2035 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2035 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2035 Fund’s international equity allocations also contributed to the total return of the 2035 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2035 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2035 Fund’s real estate allocation also contributed to the total return of the 2035 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2035 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2035 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2035 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The PIMCO International Bond Fund (U.S. Dollar-Hedged) also detracted from the total return of the 2035 Fund but contributed to relative return, outperforming its comparative index, the Bloomberg Global Aggregate ex-USD (USD Hedged) Index.
Management views and portfolio holdings may have changed since the report date.
23
Schwab Target Funds | Annual Report
Schwab Target 2035 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2035 Fund (3/12/08) | 27.76% | 12.05% | 10.64% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 16.04% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Target 2035 Composite Index | 27.66% | 12.18% | 10.87% |
| Fund Category: Morningstar Target-Date 20352 | 28.05% | 12.25% | 10.27% |
| Fund Expense Ratios3: Net 0.59%; Gross 0.62% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.59% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
24
Schwab Target Funds | Annual Report
Schwab Target 2035 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 21 |
| Portfolio Turnover Rate | 14% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
25
Schwab Target Funds | Annual Report
Schwab Target 2040 Fund as of October 31, 2021
The Schwab Target 2040 Fund (the 2040 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2040 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2040 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2040 Fund’s asset allocation was approximately 78.7% equity securities, 19.7% fixed-income securities, and 1.5% cash and cash equivalents including money market funds).1 At its target date, the 2040 Fund’s allocation will be approximately 40.0% equity securities, 56.0% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2040 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2040 Fund returned 30.57%. The 2040 Fund’s internally calculated comparative index, the Target 2040 Composite Index (the composite index), returned 30.55%.
Positioning and Strategies. The 2040 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2040 Fund’s U.S. equity allocations, particularly the 2040 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2040 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2040 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2040 Fund’s international equity allocations also contributed to the total return of the 2040 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2040 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2040 Fund’s real estate allocation also contributed to the total return of the 2040 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2040 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2040 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2040 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The PIMCO International Bond Fund (U.S. Dollar-Hedged) also detracted from the total return of the 2040 Fund but contributed to relative return, outperforming its comparative index, the Bloomberg Global Aggregate ex-USD (USD Hedged) Index.
Management views and portfolio holdings may have changed since the report date.
| 1 | Percentages may not add up to 100% due to rounding. |
26
Schwab Target Funds | Annual Report
Schwab Target 2040 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (October 31, 2011 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2040 Fund (7/1/05) | 30.57% | 12.77% | 11.21% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 16.04% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 3.00% |
| Target 2040 Composite Index | 30.55% | 12.96% | 11.45% |
| Fund Category: Morningstar Target-Date 20402 | 31.45% | 13.04% | 10.83% |
| Fund Expense Ratios3: Net 0.64%; Gross 0.66% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.64% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
27
Schwab Target Funds | Annual Report
Schwab Target 2040 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 22 |
| Portfolio Turnover Rate | 14% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
28
Schwab Target Funds | Annual Report
Schwab Target 2045 Fund as of October 31, 2021
The Schwab Target 2045 Fund (the 2045 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2045 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2045 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2045 Fund’s asset allocation was approximately 85.4% equity securities, 13.5% fixed-income securities, and 1.1% cash and cash equivalents (including money market funds). At its target date, the 2045 Fund’s allocation will be approximately 40.0% equity securities, 56.0% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2045 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2045 Fund returned 33.13%. The 2045 Fund’s internally calculated comparative index, the Target 2045 Composite Index (the composite index), returned 33.27%.
Positioning and Strategies. The 2045 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2045 Fund’s U.S. equity allocations, particularly the 2045 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2045 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2045 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2045 Fund’s international equity allocations also contributed to the total return of the 2045 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2045 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2045 Fund’s real estate allocation also contributed to the total return of the 2045 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2045 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2045 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2045 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The PIMCO International Bond Fund (U.S. Dollar-Hedged) also detracted from the total return of the 2045 Fund but contributed to relative return, outperforming its comparative index, the Bloomberg Global Aggregate ex-USD (USD Hedged) Index.
Management views and portfolio holdings may have changed since the report date.
29
Schwab Target Funds | Annual Report
Schwab Target 2045 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (January 23, 2013 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception |
| Fund: Schwab Target 2045 Fund (1/23/13) | 33.13% | 13.31% | 10.98% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 15.74% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 2.84% |
| Target 2045 Composite Index | 33.27% | 13.56% | 11.34% |
| Fund Category: Morningstar Target-Date 20452 | 33.77% | 13.61% | N/A |
| Fund Expense Ratios3: Net 0.68%; Gross 0.73% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.68% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
30
Schwab Target Funds | Annual Report
Schwab Target 2045 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 22 |
| Portfolio Turnover Rate | 12% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
31
Schwab Target Funds | Annual Report
Schwab Target 2050 Fund as of October 31, 2021
The Schwab Target 2050 Fund (the 2050 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2050 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2050 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2050 Fund’s asset allocation was approximately 89.4% equity securities, 9.7% fixed-income securities, and 0.9% cash and cash equivalents (including money market funds). At its target date, the 2050 Fund’s allocation will be approximately 40.0% equity securities, 56.0% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2050 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2050 Fund returned 34.83%. The 2050 Fund’s internally calculated comparative index, the Target 2050 Composite Index (the composite index), returned 34.85%.
Positioning and Strategies. The 2050 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2050 Fund’s U.S. equity allocations, particularly the 2050 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2050 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2050 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2050 Fund’s international equity allocations also contributed to the total return of the 2050 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2050 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2050 Fund’s real estate allocation also contributed to the total return of the 2050 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2050 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2050 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2050 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The PIMCO International Bond Fund (U.S. Dollar-Hedged) also detracted from the total return of the 2050 Fund but contributed to relative return, outperforming its comparative index, the Bloomberg Global Aggregate ex-USD (USD Hedged) Index.
Management views and portfolio holdings may have changed since the report date.
32
Schwab Target Funds | Annual Report
Schwab Target 2050 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (January 23, 2013 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception |
| Fund: Schwab Target 2050 Fund (1/23/13) | 34.83% | 13.65% | 11.25% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 15.74% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 2.84% |
| Target 2050 Composite Index | 34.85% | 13.90% | 11.60% |
| Fund Category: Morningstar Target-Date 20502 | 34.78% | 13.78% | N/A |
| Fund Expense Ratios3: Net 0.70%; Gross 0.76% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.70% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
33
Schwab Target Funds | Annual Report
Schwab Target 2050 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 21 |
| Portfolio Turnover Rate | 19% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
34
Schwab Target Funds | Annual Report
Schwab Target 2055 Fund as of October 31, 2021
The Schwab Target 2055 Fund (the 2055 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2055 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2055 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2055 Fund’s asset allocation was approximately 92.0% equity securities, 7.3% fixed-income securities, and 0.7% cash and cash equivalents (including money market funds). At its target date, the 2055 Fund’s allocation will be approximately 40.0% equity securities, 56.0% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2055 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2055 Fund returned 35.79%. The 2055 Fund’s internally calculated comparative index, the Target 2055 Composite Index (the composite index), returned 35.90%.
Positioning and Strategies. The 2055 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2055 Fund’s U.S. equity allocations, particularly the 2055 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2055 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2055 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2055 Fund’s international equity allocations also contributed to the total return of the 2055 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2055 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2055 Fund’s real estate allocation also contributed to the total return of the 2055 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2055 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2055 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2055 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The PIMCO International Bond Fund (U.S. Dollar-Hedged) also detracted from the total return of the 2055 Fund but contributed to relative return, outperforming its comparative index, the Bloomberg Global Aggregate ex-USD (USD Hedged) Index.
Management views and portfolio holdings may have changed since the report date.
35
Schwab Target Funds | Annual Report
Schwab Target 2055 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (January 23, 2013 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception |
| Fund: Schwab Target 2055 Fund (1/23/13) | 35.79% | 13.89% | 11.40% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 15.74% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 2.84% |
| Target 2055 Composite Index | 35.90% | 14.17% | 11.79% |
| Fund Category: Morningstar Target-Date 20552 | 35.28% | 13.94% | N/A |
| Fund Expense Ratios3: Net 0.72%; Gross 0.81% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.72% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
36
Schwab Target Funds | Annual Report
Schwab Target 2055 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 20 |
| Portfolio Turnover Rate | 11% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
37
Schwab Target Funds | Annual Report
Schwab Target 2060 Fund as of October 31, 2021
The Schwab Target 2060 Fund (the 2060 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2060 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2060 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment at the beginning of February 2021, the 2060 Fund’s asset allocation was approximately 94.5% equity securities, 5.0% fixed-income securities, and 0.5% cash and cash equivalents (including money market funds). At its target date, the 2060 Fund’s allocation will be approximately 40.0% equity securities, 56.0% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2060 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the 12-month reporting period ended October 31, 2021, U.S. and international equity markets generated solid returns. 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 rose through most of the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. small-cap stocks outperformed U.S. large-cap stocks. Among U.S. large-caps, value stocks slightly outperformed growth stocks. The U.S. dollar, as measured against a basket of foreign currencies, ended the reporting period essentially where it began, despite exhibiting volatility along the way. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the 12-month reporting period ended October 31, 2021, the 2060 Fund returned 36.89%. The 2060 Fund’s internally calculated comparative index, the Target 2060 Composite Index (the composite index), returned 36.95%.
Positioning and Strategies. The 2060 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2060 Fund’s U.S. equity allocations, particularly the 2060 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2060 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2060 Fund, returning approximately 43% for the reporting period and generally tracking its comparative index, the S&P 500® Index.
The 2060 Fund’s international equity allocations also contributed to the total return of the 2060 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2060 Fund, returning approximately 34% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net).
The 2060 Fund’s real estate allocation also contributed to the total return of the 2060 Fund. The Schwab Global Real Estate Fund returned approximately 38% for the reporting period, slightly outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 37% for the reporting period.
The 2060 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2060 Fund. The Schwab U.S. Aggregate Bond Index Fund was the largest detractor from the total return of the 2060 Fund and returned approximately -1% for the reporting period, generally tracking its comparative index, the Bloomberg US Aggregate Bond Index. The PIMCO International Bond Fund (U.S. Dollar-Hedged) also detracted from the total return of the 2060 Fund but contributed to relative return, outperforming its comparative index, the Bloomberg Global Aggregate ex-USD (USD Hedged) Index.
Management views and portfolio holdings may have changed since the report date.
38
Schwab Target Funds | Annual Report
Schwab Target 2060 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (August 25, 2016 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception |
| Fund: Schwab Target 2060 Fund (8/25/16) | 36.89% | 14.08% | 13.18% |
| Dow Jones U.S. Total Stock Market IndexSM | 44.07% | 18.87% | 17.68% |
| Bloomberg US Aggregate Bond Index | -0.48% | 3.10% | 2.83% |
| Target 2060 Composite Index | 36.95% | 14.34 | 13.34% |
| Fund Category: Morningstar Target-Date 20602 | 35.67% | 14.01% | N/A |
| Fund Expense Ratios3: Net 0.74%; Gross 1.15% | |||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.74% of acquired fund fees and expenses (AFFE), which are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
39
Schwab Target Funds | Annual Report
Schwab Target 2060 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 20 |
| Portfolio Turnover Rate | 11% |
Asset Class Weightings % of Investments1,2
Top Holdings % of Net Assets1,3,4
Portfolio holdings may have changed since the report date.
| 1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
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Schwab Target Funds | Annual Report
Schwab Target 2065 Fund as of October 31, 2021
The Schwab Target 2065 Fund (the 2065 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation. The 2065 Fund seeks to achieve its investment objective by investing primarily in a combination of other affiliated Schwab Funds and Laudus Funds. The 2065 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; at the fund’s inception, February 25, 2021, the 2065 Fund’s asset allocation was approximately 95.0% equity securities, 4.5% fixed-income securities, and 0.5% cash and cash equivalents (including money market funds). At its target date, the 2065 Fund’s allocation will be approximately 40.0% equity securities, 56.0% fixed-income securities, and 4.0% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2065 Fund’s Portfolio Holdings included in this report.)
Market Highlights. For the reporting period of fund inception, February 25, 2021, to October 31, 2021, U.S. and international equity markets generated solid returns. Despite persisting COVID-19 pandemic-driven stresses on the global economy and the emergence and rapid spread of the Delta variant during the summer, many equity markets rose through the period on strong earnings, ongoing fiscal stimulus measures, and optimism related to increased COVID-19 vaccination rates. In September, global equities weakened amid growing evidence of a slowing economy and concerns that higher inflation may be more persistent than previously anticipated, but they regained momentum in October to end the reporting period at or near record highs. U.S. large-cap stocks outperformed U.S. small-cap stocks. Among U.S. large-caps, growth stocks outperformed value stocks. The U.S. dollar, as measured against a basket of foreign currencies, rose over the reporting period, generally reducing the return of overseas investments in U.S. dollar terms. After hitting a 12-month low in mid-March 2021, bond prices rose during the summer but slid again over the final three months of the reporting period on tepid employment reports and growing inflation concerns.
Performance. For the reporting period of fund inception of February 25, 2021 through October 31, 2021, the 2065 Fund returned 13.30%. The 2065 Fund’s internally calculated comparative index, the Target 2065 Composite Index (the composite index), returned 12.73%.
Positioning and Strategies. The 2065 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
The 2065 Fund’s U.S. equity allocations, particularly the 2065 Fund’s U.S. large-cap equity allocations, provided the largest contribution to the total return of the 2065 Fund. The Schwab S&P 500 Index Fund was the top contributor to the total return of the 2065 Fund, returning approximately 21% for the reporting period and generally tracking its comparative index, the S&P 500® Index. The Schwab Core Equity Fund also contributed to the total return of the 2065 Fund, returning approximately 20% for the reporting period.
The 2065 Fund’s international equity allocations also contributed to the total return of the 2065 Fund but detracted from relative performance. The Laudus International MarketMasters Fund contributed to the total return of the 2065 Fund, returning approximately 7% for the reporting period and slightly underperforming its comparative index, the MSCI EAFE® Index (Net). The Goldman Sachs Emerging Markets Equity Insights Fund was the largest detractor from total return of the 2065 Fund, returning approximately -6% for the reporting period.
The 2065 Fund’s real estate allocation also contributed to the total return of the 2065 Fund. The Schwab Global Real Estate Fund returned approximately 15% for the reporting period, outperforming its comparative index, the FTSE EPRA Nareit Global Index (Net), which returned approximately 12% for the reporting period.
The 2065 Fund’s fixed-income allocations provided the smallest contribution to the total return of the 2065 Fund. The PIMCO International Bond Fund (U.S. Dollar-Hedged) detracted slightly from the total return of the 2065 Fund, returning approximately -1% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
41
Schwab Target Funds | Annual Report
Schwab Target 2065 Fund
Performance and Fund Facts as of October 31, 2021
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.
Performance of Hypothetical $10,000 Investment (February 25, 2021 – October 31, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | Since Inception |
| Fund: Schwab Target 2065 Fund (2/25/21) | 13.30% |
| Dow Jones U.S. Total Stock Market IndexSM | 19.07% |
| Bloomberg US Aggregate Bond Index | 1.42% |
| Target 2065 Composite Index | 12.73% |
| Fund Category: Morningstar Target-Date 2065+2 | N/A |
| Fund Expense Ratios3: Net 0.69%; Gross 3.18% | |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes 0.69% of acquired fund fees and expenses (AFFE), which are based on estimated amounts for the current fiscal year and are indirect expenses incurred by the fund through its investments in the underlying funds. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as Schwab Asset Management serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers and is estimated based on the expenses the fund expects to incur for its first full fiscal year. For actual expense ratios during the period, not including AFFE, refer to the financial highlights section of the financial statements. |
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Schwab Target Funds | Annual Report
Schwab Target 2065 Fund
Performance and Fund Facts as of October 31, 2021 (continued)
Statistics
| Number of Holdings | 20 |
| Portfolio Turnover Rate | 34% 1 |
Asset Class Weightings % of Investments2,3
Top Holdings % of Net Assets2,4,5
Portfolio holdings may have changed since the report date.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed-income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
| 4 | This list is not a recommendation of any security by the investment adviser. |
| 5 | The holdings listed exclude any temporary liquidity investments. |
43
Schwab Target Funds | Annual Report
Schwab Target Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including transfer agent fees and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2021 and held through October 31, 2021.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| EXPENSE RATIO (ANNUALIZED)1,2 | EFFECTIVE EXPENSE RATIO (ANNUALIZED)3,4 | BEGINNING ACCOUNT VALUE AT 5/1/21 | ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 10/31/212 | EXPENSES PAID DURING PERIOD 5/1/21-10/31/212,5 | EFFECTIVE EXPENSES PAID DURING PERIOD 5/1/21-10/31/214,5 | |
| Schwab Target 2010 Fund | ||||||
| Actual Return | 0.00% | 0.30% | $1,000.00 | $1,034.70 | $0.00 | $1.54 |
| Hypothetical 5% Return | 0.00% | 0.30% | $1,000.00 | $1,025.21 | $0.00 | $1.53 |
| Schwab Target 2015 Fund | ||||||
| Actual Return | 0.00% | 0.32% | $1,000.00 | $1,037.30 | $0.00 | $1.64 |
| Hypothetical 5% Return | 0.00% | 0.32% | $1,000.00 | $1,025.21 | $0.00 | $1.63 |
| Schwab Target 2020 Fund | ||||||
| Actual Return | 0.00% | 0.33% | $1,000.00 | $1,037.90 | $0.00 | $1.70 |
| Hypothetical 5% Return | 0.00% | 0.33% | $1,000.00 | $1,025.21 | $0.00 | $1.68 |
| Schwab Target 2025 Fund | ||||||
| Actual Return | 0.00% | 0.42% | $1,000.00 | $1,044.10 | $0.00 | $2.16 |
| Hypothetical 5% Return | 0.00% | 0.42% | $1,000.00 | $1,025.21 | $0.00 | $2.14 |
| Schwab Target 2030 Fund | ||||||
| Actual Return | 0.00% | 0.49% | $1,000.00 | $1,048.90 | $0.00 | $2.53 |
| Hypothetical 5% Return | 0.00% | 0.49% | $1,000.00 | $1,025.21 | $0.00 | $2.50 |
| Schwab Target 2035 Fund | ||||||
| Actual Return | 0.00% | 0.54% | $1,000.00 | $1,053.10 | $0.00 | $2.79 |
| Hypothetical 5% Return | 0.00% | 0.54% | $1,000.00 | $1,025.21 | $0.00 | $2.75 |
| Schwab Target 2040 Fund | ||||||
| Actual Return | 0.00% | 0.59% | $1,000.00 | $1,056.60 | $0.00 | $3.06 |
| Hypothetical 5% Return | 0.00% | 0.59% | $1,000.00 | $1,025.21 | $0.00 | $3.01 |
| Schwab Target 2045 Fund | ||||||
| Actual Return | 0.00% | 0.63% | $1,000.00 | $1,059.60 | $0.00 | $3.27 |
| Hypothetical 5% Return | 0.00% | 0.63% | $1,000.00 | $1,025.21 | $0.00 | $3.21 |
| Schwab Target 2050 Fund | ||||||
| Actual Return | 0.00% | 0.65% | $1,000.00 | $1,061.50 | $0.00 | $3.38 |
| Hypothetical 5% Return | 0.00% | 0.65% | $1,000.00 | $1,025.21 | $0.00 | $3.31 |
| Schwab Target 2055 Fund | ||||||
| Actual Return | 0.00% | 0.67% | $1,000.00 | $1,062.40 | $0.00 | $3.48 |
| Hypothetical 5% Return | 0.00% | 0.67% | $1,000.00 | $1,025.21 | $0.00 | $3.41 |
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Schwab Target Funds | Annual Report
Schwab Target Funds
Fund Expenses (Unaudited) (continued)
| EXPENSE RATIO (ANNUALIZED)1,2 | EFFECTIVE EXPENSE RATIO (ANNUALIZED)3,4 | BEGINNING ACCOUNT VALUE AT 5/1/21 | ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 10/31/212 | EXPENSES PAID DURING PERIOD 5/1/21-10/31/212,5 | EFFECTIVE EXPENSES PAID DURING PERIOD 5/1/21-10/31/214,5 | |
| Schwab Target 2060 Fund | ||||||
| Actual Return | 0.00% | 0.68% | $1,000.00 | $1,063.50 | $0.00 | $3.54 |
| Hypothetical 5% Return | 0.00% | 0.68% | $1,000.00 | $1,025.21 | $0.00 | $3.47 |
| Schwab Target 2065 Fund | ||||||
| Actual Return | 0.00% | 0.68% | $1,000.00 | $1,062.90 | $0.00 | $3.54 |
| Hypothetical 5% Return | 0.00% | 0.68% | $1,000.00 | $1,025.21 | $0.00 | $3.47 |
| 1 | Based on the most recent six-month expense ratio. |
| 2 | Excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Based on the most recent six-month acquired fund fees and expenses and the expense ratio; may differ from the acquired fund fees and expenses and the expense ratio in the prospectus. |
| 4 | Includes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 5 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
45
Schwab Target Funds | Annual Report
Schwab Target 2010 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $13.76 | $13.57 | $13.06 | $13.42 | $12.52 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.22 | 0.27 | 0.30 | 0.29 | 0.22 | |
| Net realized and unrealized gains (losses) | 1.61 | 0.57 | 0.97 | (0.35) | 0.90 | |
| Total from investment operations | 1.83 | 0.84 | 1.27 | (0.06) | 1.12 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.27) | (0.34) | (0.34) | (0.30) | (0.22) | |
| Distributions from net realized gains | (0.11) | (0.31) | (0.42) | — | — | |
| Total distributions | (0.38) | (0.65) | (0.76) | (0.30) | (0.22) | |
| Net asset value at end of period | $15.21 | $13.76 | $13.57 | $13.06 | $13.42 | |
| Total return | 13.46% | 6.38% | 10.42% | (0.52%) | 9.11% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% 3 | 0.00% | |
| Gross operating expenses2 | 0.12% | 0.14% | 0.17% | 0.12% | 0.14% | |
| Net investment income (loss) | 1.50% | 2.03% | 2.33% | 2.15% | 1.75% | |
| Portfolio turnover rate | 21% | 27% | 13% | 16% | 51% 4 | |
| Net assets, end of period (x 1,000,000) | $65 | $56 | $51 | $52 | $59 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred. |
| 4 | The portfolio turnover rate increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, the portfolio turnover rate would have been 30% without including these transactions. There were no transaction costs associated with these transactions. |
46
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2010 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 73.9% OF NET ASSETS | ||
| U.S. Stocks 17.3% | ||
| Large-Cap 15.4% | ||
| Schwab Core Equity Fund | 53,695 | 1,568,956 |
| Schwab Fundamental US Large Company Index Fund | 5,931 | 137,540 |
| Schwab S&P 500 Index Fund | 117,730 | 8,383,553 |
| 10,090,049 | ||
| Mid-Cap 0.7% | ||
| Schwab U.S. Mid-Cap Index Fund | 7,201 | 464,029 |
| Small-Cap 1.2% | ||
| Schwab Small-Cap Equity Fund | 32,885 | 781,673 |
| 11,335,751 | ||
| International Stocks 8.9% | ||
| Developed Markets 8.9% | ||
| Laudus International MarketMasters Fund * | 125,492 | 3,840,054 |
| Schwab International Core Equity Fund | 171,710 | 1,983,253 |
| 5,823,307 | ||
| Real Estate 2.1% | ||
| Global Real Estate 2.1% | ||
| Schwab Global Real Estate Fund | 166,893 | 1,350,166 |
| Fixed Income 42.5% | ||
| Inflation-Protected Bond 6.7% | ||
| Schwab Treasury Inflation Protected Securities Index Fund | 346,772 | 4,365,856 |
| Intermediate-Term Bond 25.9% | ||
| Schwab U.S. Aggregate Bond Index Fund | 1,622,934 | 16,943,429 |
| Short-Term Bond 9.9% | ||
| Schwab Short-Term Bond Index Fund | 637,872 | 6,499,915 |
| 27,809,200 | ||
| Money Market Funds 3.1% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 2,040,481 | 2,041,093 |
| Total Affiliated Underlying Funds (Cost $38,586,562) | 48,359,517 | |
| UNAFFILIATED UNDERLYING FUNDS 24.5% OF NET ASSETS | ||
| U.S. Stocks 7.1% | ||
| Large-Cap 6.3% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 26,042 | 2,128,655 |
| Dodge & Cox Stock Fund | 7,945 | 1,958,914 |
| 4,087,569 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 0.8% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 8,966 | 540,220 |
| 4,627,789 | ||
| Fixed Income 17.4% | ||
| Intermediate-Term Bond 15.4% | ||
| Baird Aggregate Bond Fund, Institutional Class | 316,753 | 3,617,321 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 57,255 | 656,147 |
| Metropolitan West Total Return Bond Fund, Class I | 534,765 | 5,850,327 |
| 10,123,795 | ||
| International Bond 2.0% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 122,061 | 1,310,931 |
| 11,434,726 | ||
| Total Unaffiliated Underlying Funds (Cost $14,266,502) | 16,062,515 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.5% OF NET ASSETS | ||
| Time Deposits 1.5% | ||
| BNP Paribas SA | ||
| 0.01%, 11/01/21 (b) | 655,045 | 655,045 |
| Skandinaviska Enskilda Banken AB | ||
| 0.01%, 11/01/21 (b) | 335,469 | 335,469 |
| Total Short-Term Investments (Cost $990,514) | 990,514 | |
| Total Investments in Securities (Cost $53,843,578) | 65,412,546 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
47
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2010 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 73.9% OF NET ASSETS | ||||||||
| U.S. Stocks 17.3% | ||||||||
| Large-Cap 15.4% | ||||||||
| Schwab Core Equity Fund | $2,540,417 | $188,494 | ($1,759,736) | $404,793 | $194,988 | $1,568,956 | 53,695 | $108,495 |
| Schwab Dividend Equity Fund | 76,027 | — | (90,894) | (9,881) | 24,748 | — | — | 557 |
| Schwab Fundamental US Large Company Index Fund | — | 125,000 | — | — | 12,540 | 137,540 | 5,931 | — |
| Schwab S&P 500 Index Fund | 5,731,755 | 1,730,356 | (1,356,000) | 170,901 | 2,106,541 | 8,383,553 | 117,730 | 116,356 |
| 10,090,049 | ||||||||
| Mid-Cap 0.7% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 406,110 | 6,933 | (108,999) | 25,904 | 134,081 | 464,029 | 7,201 | 6,933 |
| Small-Cap 1.2% | ||||||||
| Schwab Small-Cap Equity Fund | 608,229 | 1,413 | (164,000) | 13,174 | 322,857 | 781,673 | 32,885 | 1,413 |
| 11,335,751 | ||||||||
| International Stocks 8.9% | ||||||||
| Developed Markets 8.9% | ||||||||
| Laudus International MarketMasters Fund | 3,453,864 | 293,769 | (777,000) | 101,446 | 767,975 | 3,840,054 | 125,492 | 243,769 |
| Schwab International Core Equity Fund | 1,781,129 | 790,393 | (1,016,000) | 30,111 | 397,620 | 1,983,253 | 171,710 | 20,392 |
| 5,823,307 | ||||||||
| Real Estate 2.1% | ||||||||
| Global Real Estate 2.1% | ||||||||
| Schwab Global Real Estate Fund | 847,973 | 228,644 | — | — | 273,549 | 1,350,166 | 166,893 | 50,644 |
| Fixed Income 42.5% | ||||||||
| Inflation-Protected Bond 6.7% | ||||||||
| Schwab Treasury Inflation Protected Securities Index Fund | 3,472,960 | 935,176 | (170,000) | (2,301) | 130,021 | 4,365,856 | 346,772 | 129,176 |
| Intermediate-Term Bond 25.9% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 14,401,866 | 5,419,953 | (2,416,925) | (59,645) | (401,820) | 16,943,429 | 1,622,934 | 336,776 |
| Short-Term Bond 9.9% | ||||||||
| Schwab Short-Term Bond Index Fund | 5,538,328 | 1,451,224 | (386,962) | (2,992) | (99,683) | 6,499,915 | 637,872 | 70,236 |
| 27,809,200 | ||||||||
| Money Market Funds 3.1% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 2,040,684 | 600,613 | (600,000) | 38 | (242) | 2,041,093 | 2,040,481 | 611 |
| Total Affiliated Underlying Funds | $40,899,342 | $11,771,968 | ($8,846,516) | $671,548 | $3,863,175 | $48,359,517 | $1,085,358 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
48
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2010 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $48,359,517 | $— | $— | $48,359,517 |
| Unaffiliated Underlying Funds1 | 16,062,515 | — | — | 16,062,515 |
| Short-Term Investments1 | — | 990,514 | — | 990,514 |
| Total | $64,422,032 | $990,514 | $— | $65,412,546 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
49
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2010 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $38,586,562) | $48,359,517 | |
| Investments in securities, at value - unaffiliated (cost $15,257,016) | 17,053,029 | |
| Receivables: | ||
| Investments sold | 544,176 | |
| Dividends | 41,088 | |
| Fund shares sold | 13,177 | |
| Due from investment adviser | 6,252 | |
| Prepaid expenses | + | 11,450 |
| Total assets | 66,028,689 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 517,611 | |
| Accrued expenses | + | 33,691 |
| Total liabilities | 551,302 | |
| Net assets | $65,477,387 | |
| Net Assets by Source | ||
| Capital received from investors | $51,891,085 | |
| Total distributable earnings | + | 13,586,302 |
| Net assets | $65,477,387 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $65,477,387 | 4,304,687 | $15.21 | ||
50
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2010 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $699,209 | |
| Dividends received from securities - unaffiliated | 199,656 | |
| Interest received from securities - unaffiliated | + | 45 |
| Total investment income | 898,910 | |
| Expenses | ||
| Professional fees | 21,745 | |
| Registration fees | 21,550 | |
| Portfolio accounting fees | 11,911 | |
| Independent trustees’ fees | 7,216 | |
| Shareholder reports | 2,210 | |
| Transfer agent fees | 1,047 | |
| Custodian fees | 198 | |
| Other expenses | + | 3,785 |
| Total expenses | 69,662 | |
| Expense reduction by investment adviser | – | 69,662 |
| Net expenses | – | — |
| Net investment income | 898,910 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 386,149 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 540,290 | |
| Net realized gains on sales of securities - affiliated | 671,548 | |
| Net realized gains on sales of securities - unaffiliated | + | 367,381 |
| Net realized gains | 1,965,368 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 3,863,175 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 614,458 |
| Net change in unrealized appreciation (depreciation) | + | 4,477,633 |
| Net realized and unrealized gains | 6,443,001 | |
| Increase in net assets resulting from operations | $7,341,911 | |
51
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2010 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $898,910 | $1,088,288 | |
| Net realized gains | 1,965,368 | 391,654 | |
| Net change in unrealized appreciation (depreciation) | + | 4,477,633 | 1,752,405 |
| Increase in net assets from operations | $7,341,911 | $3,232,347 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($1,544,083) | ($2,519,058) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 1,210,571 | $17,923,236 | 1,235,019 | $16,620,379 | |
| Shares reinvested | 94,692 | 1,353,144 | 172,129 | 2,273,818 | |
| Shares redeemed | + | (1,035,698) | (15,103,593) | (1,139,051) | (15,206,801) |
| Net transactions in fund shares | 269,565 | $4,172,787 | 268,097 | $3,687,396 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 4,035,122 | $55,506,772 | 3,767,025 | $51,106,087 | |
| Total increase | + | 269,565 | 9,970,615 | 268,097 | 4,400,685 |
| End of period | 4,304,687 | $65,477,387 | 4,035,122 | $55,506,772 | |
52
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2015 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $12.18 | $12.07 | $11.49 | $12.21 | $11.72 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.19 | 0.25 | 0.27 | 0.25 | 0.20 | |
| Net realized and unrealized gains (losses) | 1.54 | 0.50 | 0.86 | (0.30) | 0.88 | |
| Total from investment operations | 1.73 | 0.75 | 1.13 | (0.05) | 1.08 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.24) | (0.31) | (0.30) | (0.27) | (0.22) | |
| Distributions from net realized gains | (0.31) | (0.33) | (0.25) | (0.40) | (0.37) | |
| Total distributions | (0.55) | (0.64) | (0.55) | (0.67) | (0.59) | |
| Net asset value at end of period | $13.36 | $12.18 | $12.07 | $11.49 | $12.21 | |
| Total return | 14.54% | 6.41% | 10.48% | (0.57%) | 9.67% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% 3 | 0.00% | |
| Gross operating expenses2 | 0.08% | 0.10% | 0.11% | 0.07% | 0.09% | |
| Net investment income (loss) | 1.47% | 2.07% | 2.35% | 2.12% | 1.74% | |
| Portfolio turnover rate | 14% | 15% | 10% | 14% | 52% 4 | |
| Net assets, end of period (x 1,000,000) | $81 | $77 | $81 | $90 | $103 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred. |
| 4 | The portfolio turnover rate increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, the portfolio turnover rate would have been 33% without including these transactions. There were no transaction costs associated with these transactions. |
53
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2015 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 74.3% OF NET ASSETS | ||
| U.S. Stocks 18.7% | ||
| Large-Cap 16.5% | ||
| Schwab Core Equity Fund | 77,929 | 2,277,077 |
| Schwab Fundamental US Large Company Index Fund | 3,623 | 84,013 |
| Schwab S&P 500 Index Fund | 155,775 | 11,092,729 |
| 13,453,819 | ||
| Mid-Cap 0.9% | ||
| Schwab U.S. Mid-Cap Index Fund | 10,762 | 693,518 |
| Small-Cap 1.3% | ||
| Schwab Small-Cap Equity Fund | 45,943 | 1,092,075 |
| 15,239,412 | ||
| International Stocks 10.1% | ||
| Developed Markets 10.1% | ||
| Laudus International MarketMasters Fund * | 196,705 | 6,019,167 |
| Schwab International Core Equity Fund | 188,550 | 2,177,755 |
| 8,196,922 | ||
| Real Estate 2.2% | ||
| Global Real Estate 2.2% | ||
| Schwab Global Real Estate Fund | 216,114 | 1,748,366 |
| Fixed Income 40.1% | ||
| Inflation-Protected Bond 6.3% | ||
| Schwab Treasury Inflation Protected Securities Index Fund | 406,581 | 5,118,855 |
| Intermediate-Term Bond 24.5% | ||
| Schwab U.S. Aggregate Bond Index Fund | 1,915,309 | 19,995,824 |
| Short-Term Bond 9.3% | ||
| Schwab Short-Term Bond Index Fund | 741,970 | 7,560,669 |
| 32,675,348 | ||
| Money Market Funds 3.2% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 2,589,665 | 2,590,441 |
| Total Affiliated Underlying Funds (Cost $44,980,491) | 60,450,489 | |
| UNAFFILIATED UNDERLYING FUNDS 24.6% OF NET ASSETS | ||
| U.S. Stocks 7.4% | ||
| Large-Cap 6.6% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 34,255 | 2,799,999 |
| Dodge & Cox Stock Fund | 10,414 | 2,567,698 |
| 5,367,697 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 0.8% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 11,462 | 690,605 |
| 6,058,302 | ||
| Fixed Income 17.2% | ||
| Intermediate-Term Bond 15.1% | ||
| Baird Aggregate Bond Fund, Institutional Class | 342,832 | 3,915,142 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 95,653 | 1,096,180 |
| Metropolitan West Total Return Bond Fund, Class I | 660,818 | 7,229,352 |
| 12,240,674 | ||
| International Bond 2.1% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 160,237 | 1,720,949 |
| 13,961,623 | ||
| Total Unaffiliated Underlying Funds (Cost $17,366,057) | 20,019,925 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.0% OF NET ASSETS | ||
| Time Deposits 1.0% | ||
| Australia & New Zealand Banking Group Ltd. | ||
| 0.01%, 11/01/21 (b) | 35,063 | 35,063 |
| BNP Paribas SA | ||
| 0.01%, 11/01/21 (b) | 814,804 | 814,804 |
| Total Short-Term Investments (Cost $849,867) | 849,867 | |
| Total Investments in Securities (Cost $63,196,415) | 81,320,281 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
54
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2015 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 74.3% OF NET ASSETS | ||||||||
| U.S. Stocks 18.7% | ||||||||
| Large-Cap 16.5% | ||||||||
| Schwab Core Equity Fund | $3,737,720 | $162,388 | ($2,514,000) | $1,033,450 | ($142,481) | $2,277,077 | 77,929 | $162,388 |
| Schwab Dividend Equity Fund | 89,000 | — | (102,487) | 22,866 | (9,379) | — | — | 652 |
| Schwab Fundamental US Large Company Index Fund | — | 68,000 | — | — | 16,013 | 84,013 | 3,623 | — |
| Schwab S&P 500 Index Fund | 8,418,126 | 874,772 | (1,582,588) | 438,914 | 2,943,505 | 11,092,729 | 155,775 | 169,065 |
| 13,453,819 | ||||||||
| Mid-Cap 0.9% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 608,622 | 10,392 | (165,000) | 39,235 | 200,269 | 693,518 | 10,762 | 10,392 |
| Small-Cap 1.3% | ||||||||
| Schwab Small-Cap Equity Fund | 1,003,720 | 2,332 | (450,000) | 136,784 | 399,239 | 1,092,075 | 45,943 | 2,332 |
| 15,239,412 | ||||||||
| International Stocks 10.1% | ||||||||
| Developed Markets 10.1% | ||||||||
| Laudus International MarketMasters Fund | 5,392,510 | 761,965 | (1,492,000) | 164,857 | 1,191,835 | 6,019,167 | 196,705 | 366,965 |
| Schwab International Core Equity Fund | 2,755,151 | 30,691 | (1,286,000) | 157,527 | 520,386 | 2,177,755 | 188,550 | 30,691 |
| 8,196,922 | ||||||||
| Real Estate 2.2% | ||||||||
| Global Real Estate 2.2% | ||||||||
| Schwab Global Real Estate Fund | 1,318,093 | 134,117 | (114,000) | 12,729 | 397,427 | 1,748,366 | 216,114 | 74,116 |
| Fixed Income 40.1% | ||||||||
| Inflation-Protected Bond 6.3% | ||||||||
| Schwab Treasury Inflation Protected Securities Index Fund | 4,745,389 | 455,791 | (260,000) | 5,220 | 172,455 | 5,118,855 | 406,581 | 163,791 |
| Intermediate-Term Bond 24.5% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 19,039,900 | 3,486,403 | (1,981,431) | (44,611) | (504,437) | 19,995,824 | 1,915,309 | 433,050 |
| Short-Term Bond 9.3% | ||||||||
| Schwab Short-Term Bond Index Fund | 7,265,534 | 773,551 | (354,128) | (1,677) | (122,611) | 7,560,669 | 741,970 | 89,559 |
| 32,675,348 | ||||||||
| Money Market Funds 3.2% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 2,289,929 | 300,771 | — | — | (259) | 2,590,441 | 2,589,665 | 774 |
| Total Affiliated Underlying Funds | $56,663,694 | $7,061,173 | ($10,301,634) | $1,965,294 | $5,061,962 | $60,450,489 | $1,503,775 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
55
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2015 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $60,450,489 | $— | $— | $60,450,489 |
| Unaffiliated Underlying Funds1 | 20,019,925 | — | — | 20,019,925 |
| Short-Term Investments1 | — | 849,867 | — | 849,867 |
| Total | $80,470,414 | $849,867 | $— | $81,320,281 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
56
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2015 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $44,980,491) | $60,450,489 | |
| Investments in securities, at value - unaffiliated (cost $18,215,924) | 20,869,792 | |
| Receivables: | ||
| Investments sold | 627,898 | |
| Dividends | 48,999 | |
| Fund shares sold | 21,276 | |
| Due from investment adviser | 6,002 | |
| Prepaid expenses | + | 4,650 |
| Total assets | 82,029,106 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 596,144 | |
| Accrued expenses | + | 34,278 |
| Total liabilities | 630,422 | |
| Net assets | $81,398,684 | |
| Net Assets by Source | ||
| Capital received from investors | $59,533,419 | |
| Total distributable earnings | + | 21,865,265 |
| Net assets | $81,398,684 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $81,398,684 | 6,092,558 | $13.36 | ||
57
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2015 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $929,862 | |
| Dividends received from securities - unaffiliated | 270,399 | |
| Interest received from securities - unaffiliated | + | 54 |
| Total investment income | 1,200,315 | |
| Expenses | ||
| Professional fees | 21,740 | |
| Registration fees | 20,071 | |
| Portfolio accounting fees | 12,122 | |
| Independent trustees’ fees | 7,288 | |
| Shareholder reports | 2,321 | |
| Transfer agent fees | 1,431 | |
| Other expenses | + | 3,952 |
| Total expenses | 68,925 | |
| Expense reduction by investment adviser | – | 68,925 |
| Net expenses | – | — |
| Net investment income | 1,200,315 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 573,913 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 752,439 | |
| Net realized gains on sales of securities - affiliated | 1,965,294 | |
| Net realized gains on sales of securities - unaffiliated | + | 510,795 |
| Net realized gains | 3,802,441 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 5,061,962 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 956,315 |
| Net change in unrealized appreciation (depreciation) | + | 6,018,277 |
| Net realized and unrealized gains | 9,820,718 | |
| Increase in net assets resulting from operations | $11,021,033 | |
58
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2015 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $1,200,315 | $1,605,087 | |
| Net realized gains | 3,802,441 | 1,910,607 | |
| Net change in unrealized appreciation (depreciation) | + | 6,018,277 | 1,251,931 |
| Increase in net assets from operations | $11,021,033 | $4,767,625 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($3,467,726) | ($4,189,125) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 645,653 | $8,261,663 | 767,274 | $9,075,200 | |
| Shares reinvested | 263,836 | 3,295,303 | 335,649 | 3,930,448 | |
| Shares redeemed | + | (1,161,720) | (14,985,882) | (1,481,051) | (17,448,525) |
| Net transactions in fund shares | (252,231) | ($3,428,916) | (378,128) | ($4,442,877) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 6,344,789 | $77,274,293 | 6,722,917 | $81,138,670 | |
| Total increase (decrease) | + | (252,231) | 4,124,391 | (378,128) | (3,864,377) |
| End of period | 6,092,558 | $81,398,684 | 6,344,789 | $77,274,293 | |
59
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2020 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $14.55 | $14.46 | $13.87 | $14.71 | $13.84 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.23 | 0.30 | 0.32 | 0.30 | 0.23 | |
| Net realized and unrealized gains (losses) | 1.94 | 0.58 | 1.04 | (0.33) | 1.39 | |
| Total from investment operations | 2.17 | 0.88 | 1.36 | (0.03) | 1.62 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.29) | (0.36) | (0.35) | (0.33) | (0.24) | |
| Distributions from net realized gains | (0.29) | (0.43) | (0.42) | (0.48) | (0.51) | |
| Total distributions | (0.58) | (0.79) | (0.77) | (0.81) | (0.75) | |
| Net asset value at end of period | $16.14 | $14.55 | $14.46 | $13.87 | $14.71 | |
| Total return | 15.27% | 6.33% | 10.58% | (0.32%) | 12.28% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |
| Gross operating expenses2 | 0.02% | 0.02% | 0.03% | 0.02% | 0.03% | |
| Net investment income (loss) | 1.47% | 2.13% | 2.28% | 2.07% | 1.67% | |
| Portfolio turnover rate | 10% | 17% | 14% | 18% | 47% 3 | |
| Net assets, end of period (x 1,000,000) | $531 | $525 | $549 | $542 | $579 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | The portfolio turnover rate increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, the portfolio turnover rate would have been 31% without including these transactions. There were no transaction costs associated with these transactions. |
60
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2020 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 74.4% OF NET ASSETS | ||
| U.S. Stocks 19.5% | ||
| Large-Cap 17.1% | ||
| Schwab Core Equity Fund | 516,779 | 15,100,292 |
| Schwab Fundamental US Large Company Index Fund | 27,171 | 630,096 |
| Schwab S&P 500 Index Fund | 1,054,062 | 75,059,726 |
| 90,790,114 | ||
| Mid-Cap 0.8% | ||
| Schwab U.S. Mid-Cap Index Fund | 69,229 | 4,461,137 |
| Small-Cap 1.6% | ||
| Schwab Small-Cap Equity Fund | 346,183 | 8,228,779 |
| 103,480,030 | ||
| International Stocks 11.0% | ||
| Developed Markets 11.0% | ||
| Laudus International MarketMasters Fund * | 1,333,393 | 40,801,835 |
| Schwab International Core Equity Fund | 1,533,477 | 17,711,654 |
| 58,513,489 | ||
| Real Estate 2.3% | ||
| Global Real Estate 2.3% | ||
| Schwab Global Real Estate Fund | 1,507,016 | 12,191,759 |
| Fixed Income 38.6% | ||
| Inflation-Protected Bond 6.2% | ||
| Schwab Treasury Inflation Protected Securities Index Fund | 2,604,447 | 32,789,992 |
| Intermediate-Term Bond 23.6% | ||
| Schwab U.S. Aggregate Bond Index Fund | 12,002,635 | 125,307,510 |
| Short-Term Bond 8.8% | ||
| Schwab Short-Term Bond Index Fund | 4,586,263 | 46,734,024 |
| 204,831,526 | ||
| Money Market Funds 3.0% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 15,946,819 | 15,951,603 |
| Total Affiliated Underlying Funds (Cost $287,535,320) | 394,968,407 | |
| UNAFFILIATED UNDERLYING FUNDS 24.5% OF NET ASSETS | ||
| U.S. Stocks 7.6% | ||
| Large-Cap 6.9% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 229,758 | 18,780,433 |
| Dodge & Cox Stock Fund | 72,517 | 17,880,599 |
| 36,661,032 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 0.7% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 63,847 | 3,846,774 |
| 40,507,806 | ||
| Fixed Income 16.9% | ||
| Intermediate-Term Bond 14.7% | ||
| Baird Aggregate Bond Fund, Institutional Class | 2,131,824 | 24,345,431 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 653,765 | 7,492,149 |
| Metropolitan West Total Return Bond Fund, Class I | 4,241,871 | 46,406,068 |
| 78,243,648 | ||
| International Bond 2.2% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 1,075,849 | 11,554,619 |
| 89,798,267 | ||
| Total Unaffiliated Underlying Funds (Cost $112,669,369) | 130,306,073 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.7% OF NET ASSETS | ||
| Time Deposits 0.7% | ||
| Sumitomo Mitsui Banking Corp. | ||
| 0.01%, 11/01/21 (b) | 3,762,370 | 3,762,370 |
| Total Short-Term Investments (Cost $3,762,370) | 3,762,370 | |
| Total Investments in Securities (Cost $403,967,059) | 529,036,850 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
61
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2020 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 74.4% OF NET ASSETS | ||||||||
| U.S. Stocks 19.5% | ||||||||
| Large-Cap 17.1% | ||||||||
| Schwab Core Equity Fund | $26,819,643 | $1,271,702 | ($19,117,999) | $7,066,384 | ($939,438) | $15,100,292 | 516,779 | $1,271,702 |
| Schwab Dividend Equity Fund | 494,768 | — | (569,758) | 128,535 | (53,545) | — | — | 3,627 |
| Schwab Fundamental US Large Company Index Fund | — | 510,000 | — | — | 120,096 | 630,096 | 27,171 | — |
| Schwab S&P 500 Index Fund | 60,049,369 | 3,290,415 | (11,710,699) | 3,929,265 | 19,501,376 | 75,059,726 | 1,054,062 | 1,180,417 |
| 90,790,114 | ||||||||
| Mid-Cap 0.8% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 4,522,092 | 65,662 | (1,770,000) | 399,805 | 1,243,578 | 4,461,137 | 69,229 | 65,662 |
| Small-Cap 1.6% | ||||||||
| Schwab Small-Cap Equity Fund | 7,030,894 | 15,715 | (2,547,504) | 600,735 | 3,128,939 | 8,228,779 | 346,183 | 15,715 |
| 103,480,030 | ||||||||
| International Stocks 11.0% | ||||||||
| Developed Markets 11.0% | ||||||||
| Laudus International MarketMasters Fund | 40,299,521 | 2,654,741 | (12,027,943) | 2,077,390 | 7,798,126 | 40,801,835 | 1,333,393 | 2,654,741 |
| Schwab International Core Equity Fund | 20,415,732 | 226,200 | (7,913,000) | 808,767 | 4,173,955 | 17,711,654 | 1,533,477 | 226,200 |
| 58,513,489 | ||||||||
| Real Estate 2.3% | ||||||||
| Global Real Estate 2.3% | ||||||||
| Schwab Global Real Estate Fund | 9,469,280 | 526,744 | (730,000) | (54,303) | 2,980,038 | 12,191,759 | 1,507,016 | 526,744 |
| Fixed Income 38.6% | ||||||||
| Inflation-Protected Bond 6.2% | ||||||||
| Schwab Treasury Inflation Protected Securities Index Fund | 30,768,451 | 2,969,051 | (2,063,330) | 4,432 | 1,111,388 | 32,789,992 | 2,604,447 | 1,049,050 |
| Intermediate-Term Bond 23.6% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 125,652,527 | 19,795,768 | (16,556,724) | (347,675) | (3,236,386) | 125,307,510 | 12,002,635 | 2,747,610 |
| Short-Term Bond 8.8% | ||||||||
| Schwab Short-Term Bond Index Fund | 47,708,605 | 3,062,107 | (3,250,000) | (25,117) | (761,571) | 46,734,024 | 4,586,263 | 570,180 |
| 204,831,526 | ||||||||
| Money Market Funds 3.0% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 14,748,426 | 1,204,771 | — | — | (1,594) | 15,951,603 | 15,946,819 | 4,772 |
| Total Affiliated Underlying Funds | $387,979,308 | $35,592,876 | ($78,256,957) | $14,588,218 | $35,064,962 | $394,968,407 | $10,316,420 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
62
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2020 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $394,968,407 | $— | $— | $394,968,407 |
| Unaffiliated Underlying Funds1 | 130,306,073 | — | — | 130,306,073 |
| Short-Term Investments1 | — | 3,762,370 | — | 3,762,370 |
| Total | $525,274,480 | $3,762,370 | $— | $529,036,850 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
63
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2020 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $287,535,320) | $394,968,407 | |
| Investments in securities, at value - unaffiliated (cost $116,431,739) | 134,068,443 | |
| Receivables: | ||
| Investments sold | 3,916,832 | |
| Fund shares sold | 409,064 | |
| Dividends | 309,969 | |
| Due from investment adviser | 7,265 | |
| Prepaid expenses | + | 16,699 |
| Total assets | 533,696,679 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 2,472,633 | |
| Fund shares redeemed | 159,385 | |
| Accrued expenses | + | 52,899 |
| Total liabilities | 2,684,917 | |
| Net assets | $531,011,762 | |
| Net Assets by Source | ||
| Capital received from investors | $377,208,242 | |
| Total distributable earnings | + | 153,803,520 |
| Net assets | $531,011,762 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $531,011,762 | 32,890,315 | $16.14 | ||
64
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2020 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $6,120,144 | |
| Dividends received from securities - unaffiliated | 1,779,354 | |
| Interest received from securities - unaffiliated | + | 310 |
| Total investment income | 7,899,808 | |
| Expenses | ||
| Registration fees | 33,175 | |
| Portfolio accounting fees | 25,678 | |
| Professional fees | 22,546 | |
| Shareholder reports | 9,741 | |
| Independent trustees’ fees | 8,757 | |
| Transfer agent fees | 4,521 | |
| Custodian fees | 10 | |
| Other expenses | + | 7,874 |
| Total expenses | 112,302 | |
| Expense reduction by investment adviser | – | 112,302 |
| Net expenses | – | — |
| Net investment income | 7,899,808 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 4,196,276 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 5,149,139 | |
| Net realized gains on sales of securities - affiliated | 14,588,218 | |
| Net realized gains on sales of securities - unaffiliated | + | 3,893,370 |
| Net realized gains | 27,827,003 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 35,064,962 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 5,815,992 |
| Net change in unrealized appreciation (depreciation) | + | 40,880,954 |
| Net realized and unrealized gains | 68,707,957 | |
| Increase in net assets resulting from operations | $76,607,765 | |
65
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2020 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $7,899,808 | $11,277,294 | |
| Net realized gains | 27,827,003 | 10,062,566 | |
| Net change in unrealized appreciation (depreciation) | + | 40,880,954 | 9,049,897 |
| Increase in net assets from operations | $76,607,765 | $30,389,757 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($20,699,693) | ($29,966,408) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 3,640,033 | $56,415,138 | 5,736,654 | $81,673,353 | |
| Shares reinvested | 1,291,646 | 19,426,353 | 1,985,761 | 27,880,086 | |
| Shares redeemed | + | (8,142,847) | (126,181,394) | (9,574,984) | (133,223,621) |
| Net transactions in fund shares | (3,211,168) | ($50,339,903) | (1,852,569) | ($23,670,182) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 36,101,483 | $525,443,593 | 37,954,052 | $548,690,426 | |
| Total increase (decrease) | + | (3,211,168) | 5,568,169 | (1,852,569) | (23,246,833) |
| End of period | 32,890,315 | $531,011,762 | 36,101,483 | $525,443,593 | |
66
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2025 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $14.81 | $14.74 | $14.10 | $14.71 | $13.45 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.22 | 0.31 | 0.30 | 0.28 | 0.22 | |
| Net realized and unrealized gains (losses) | 2.74 | 0.55 | 1.10 | (0.34) | 1.73 | |
| Total from investment operations | 2.96 | 0.86 | 1.40 | (0.06) | 1.95 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.28) | (0.35) | (0.34) | (0.34) | (0.23) | |
| Distributions from net realized gains | (0.19) | (0.44) | (0.42) | (0.21) | (0.46) | |
| Total distributions | (0.47) | (0.79) | (0.76) | (0.55) | (0.69) | |
| Net asset value at end of period | $17.30 | $14.81 | $14.74 | $14.10 | $14.71 | |
| Total return | 20.25% | 5.98% | 10.79% | (0.53%) | 15.17% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |
| Gross operating expenses2 | 0.02% | 0.02% | 0.03% | 0.02% | 0.03% | |
| Net investment income (loss) | 1.33% | 2.14% | 2.10% | 1.88% | 1.59% | |
| Portfolio turnover rate | 16% | 16% | 15% | 13% | 36% 3 | |
| Net assets, end of period (x 1,000,000) | $662 | $572 | $577 | $531 | $521 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | The portfolio turnover rate increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, the portfolio turnover rate would have been 26% without including these transactions. There were no transaction costs associated with these transactions. |
67
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2025 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 72.3% OF NET ASSETS | ||
| U.S. Stocks 26.0% | ||
| Large-Cap 22.6% | ||
| Laudus U.S. Large Cap Growth Fund * | 154,193 | 5,443,022 |
| Schwab Core Equity Fund | 1,054,445 | 30,810,897 |
| Schwab Fundamental US Large Company Index Fund | 49,307 | 1,143,426 |
| Schwab S&P 500 Index Fund | 1,576,116 | 112,235,211 |
| 149,632,556 | ||
| Mid-Cap 1.1% | ||
| Schwab U.S. Mid-Cap Index Fund | 109,795 | 7,075,174 |
| Small-Cap 2.3% | ||
| Schwab Small-Cap Equity Fund | 638,447 | 15,175,891 |
| 171,883,621 | ||
| International Stocks 14.6% | ||
| Developed Markets 14.6% | ||
| Laudus International MarketMasters Fund * | 2,147,013 | 65,698,592 |
| Schwab International Core Equity Fund | 2,678,831 | 30,940,500 |
| 96,639,092 | ||
| Real Estate 2.9% | ||
| Global Real Estate 2.9% | ||
| Schwab Global Real Estate Fund | 2,390,689 | 19,340,678 |
| Fixed Income 26.9% | ||
| Inflation-Protected Bond 2.9% | ||
| Schwab Treasury Inflation Protected Securities Index Fund | 1,514,442 | 19,066,823 |
| Intermediate-Term Bond 17.6% | ||
| Schwab U.S. Aggregate Bond Index Fund | 11,160,840 | 116,519,168 |
| Short-Term Bond 6.4% | ||
| Schwab Short-Term Bond Index Fund | 4,183,625 | 42,631,137 |
| 178,217,128 | ||
| Money Market Funds 1.9% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 12,649,578 | 12,653,373 |
| Total Affiliated Underlying Funds (Cost $345,737,386) | 478,733,892 | |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| UNAFFILIATED UNDERLYING FUNDS 26.4% OF NET ASSETS | ||
| U.S. Stocks 8.7% | ||
| Large-Cap 7.7% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 283,165 | 23,145,909 |
| Dodge & Cox Stock Fund | 114,407 | 28,209,235 |
| 51,355,144 | ||
| Small-Cap 1.0% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 107,133 | 6,454,792 |
| 57,809,936 | ||
| International Stocks 0.5% | ||
| Emerging Markets 0.5% | ||
| Goldman Sachs Emerging Markets Equity Insights Fund, Institutional Class | 256,102 | 3,034,803 |
| Fixed Income 17.2% | ||
| Intermediate-Term Bond 13.3% | ||
| Baird Aggregate Bond Fund, Institutional Class | 1,651,344 | 18,858,351 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 1,325,740 | 15,192,979 |
| Metropolitan West Total Return Bond Fund, Class I | 4,911,783 | 53,734,911 |
| 87,786,241 | ||
| International Bond 3.9% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 2,418,775 | 25,977,638 |
| 113,763,879 | ||
| Total Unaffiliated Underlying Funds (Cost $151,131,714) | 174,608,618 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.2% OF NET ASSETS | ||
| Time Deposits 1.2% | ||
| Australia & New Zealand Banking Group Ltd. | ||
| 0.01%, 11/01/21 (b) | 6,635,222 | 6,635,222 |
68
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2025 Fund
Portfolio Holdings as of October 31, 2021 (continued)
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| JPMorgan Chase Bank | ||
| 0.01%, 11/01/21 (b) | 1,399,224 | 1,399,224 |
| Total Short-Term Investments (Cost $8,034,446) | 8,034,446 | |
| Total Investments in Securities (Cost $504,903,546) | 661,376,956 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
69
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2025 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 72.3% OF NET ASSETS | ||||||||
| U.S. Stocks 26.0% | ||||||||
| Large-Cap 22.6% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $7,470,645 | $383,139 | ($3,920,000) | $1,974,880 | ($465,642) | $5,443,022 | 154,193 | $383,139 |
| Schwab Core Equity Fund | 46,480,332 | 2,304,654 | (28,877,649) | 5,710,875 | 5,192,685 | 30,810,897 | 1,054,445 | 2,304,654 |
| Schwab Dividend Equity Fund | 930,257 | — | (1,071,251) | 303,691 | (162,697) | — | — | 6,820 |
| Schwab Fundamental US Large Company Index Fund | — | 970,000 | — | — | 173,426 | 1,143,426 | 49,307 | — |
| Schwab S&P 500 Index Fund | 77,105,046 | 11,094,640 | (8,210,000) | 703,539 | 31,541,986 | 112,235,211 | 1,576,116 | 1,554,640 |
| 149,632,556 | ||||||||
| Mid-Cap 1.1% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 6,590,860 | 97,533 | (2,059,998) | 417,514 | 2,029,265 | 7,075,174 | 109,795 | 97,533 |
| Small-Cap 2.3% | ||||||||
| Schwab Small-Cap Equity Fund | 12,279,447 | 28,532 | (3,720,000) | 485,154 | 6,102,758 | 15,175,891 | 638,447 | 28,532 |
| 171,883,621 | ||||||||
| International Stocks 14.6% | ||||||||
| Developed Markets 14.6% | ||||||||
| Laudus International MarketMasters Fund | 57,737,488 | 6,947,890 | (13,416,000) | 1,471,251 | 12,957,963 | 65,698,592 | 2,147,013 | 3,897,890 |
| Schwab International Core Equity Fund | 32,272,214 | 1,623,533 | (10,804,000) | 511,299 | 7,337,454 | 30,940,500 | 2,678,831 | 363,532 |
| 96,639,092 | ||||||||
| Real Estate 2.9% | ||||||||
| Global Real Estate 2.9% | ||||||||
| Schwab Global Real Estate Fund | 14,248,053 | 1,897,884 | (1,170,000) | (89,234) | 4,453,975 | 19,340,678 | 2,390,689 | 797,886 |
| Fixed Income 26.9% | ||||||||
| Inflation-Protected Bond 2.9% | ||||||||
| Schwab Treasury Inflation Protected Securities Index Fund | 12,560,445 | 5,911,997 | — | — | 594,381 | 19,066,823 | 1,514,442 | 553,995 |
| Intermediate-Term Bond 17.6% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 93,421,065 | 31,090,903 | (4,900,000) | (140,943) | (2,951,857) | 116,519,168 | 11,160,840 | 2,356,430 |
| Short-Term Bond 6.4% | ||||||||
| Schwab Short-Term Bond Index Fund | 36,034,341 | 8,968,911 | (1,700,000) | (12,552) | (659,563) | 42,631,137 | 4,183,625 | 468,514 |
| 178,217,128 | ||||||||
| Money Market Funds 1.9% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 10,650,887 | 2,003,751 | — | — | (1,265) | 12,653,373 | 12,649,578 | 3,767 |
| Total Affiliated Underlying Funds | $407,781,080 | $73,323,367 | ($79,848,898) | $11,335,474 | $66,142,869 | $478,733,892 | $12,817,332 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
70
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2025 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $478,733,892 | $— | $— | $478,733,892 |
| Unaffiliated Underlying Funds1 | 174,608,618 | — | — | 174,608,618 |
| Short-Term Investments1 | — | 8,034,446 | — | 8,034,446 |
| Total | $653,342,510 | $8,034,446 | $— | $661,376,956 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
71
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2025 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $345,737,386) | $478,733,892 | |
| Investments in securities, at value - unaffiliated (cost $159,166,160) | 182,643,064 | |
| Receivables: | ||
| Investments sold | 3,621,913 | |
| Dividends | 316,796 | |
| Fund shares sold | 214,953 | |
| Due from investment adviser | 7,620 | |
| Prepaid expenses | + | 13,376 |
| Total assets | 665,551,614 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 2,981,935 | |
| Fund shares redeemed | 279,733 | |
| Accrued expenses | + | 54,170 |
| Total liabilities | 3,315,838 | |
| Net assets | $662,235,776 | |
| Net Assets by Source | ||
| Capital received from investors | $478,969,957 | |
| Total distributable earnings | + | 183,265,819 |
| Net assets | $662,235,776 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $662,235,776 | 38,289,713 | $17.30 | ||
72
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2025 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $6,119,535 | |
| Dividends received from securities - unaffiliated | 2,345,972 | |
| Interest received from securities - unaffiliated | + | 469 |
| Total investment income | 8,465,976 | |
| Expenses | ||
| Registration fees | 35,815 | |
| Portfolio accounting fees | 26,556 | |
| Professional fees | 22,987 | |
| Shareholder reports | 11,424 | |
| Independent trustees’ fees | 9,041 | |
| Transfer agent fees | 6,379 | |
| Other expenses | + | 8,507 |
| Total expenses | 120,709 | |
| Expense reduction by investment adviser | – | 120,709 |
| Net expenses | – | — |
| Net investment income | 8,465,976 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 6,697,797 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 6,003,462 | |
| Net realized gains on sales of securities - affiliated | 11,335,474 | |
| Net realized gains on sales of securities - unaffiliated | + | 3,651,132 |
| Net realized gains | 27,687,865 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 66,142,869 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 11,487,253 |
| Net change in unrealized appreciation (depreciation) | + | 77,630,122 |
| Net realized and unrealized gains | 105,317,987 | |
| Increase in net assets resulting from operations | $113,783,963 | |
73
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2025 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $8,465,976 | $12,235,811 | |
| Net realized gains | 27,687,865 | 6,167,034 | |
| Net change in unrealized appreciation (depreciation) | + | 77,630,122 | 11,665,987 |
| Increase in net assets from operations | $113,783,963 | $30,068,832 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($17,910,599) | ($31,204,773) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 6,926,067 | $114,143,701 | 6,665,930 | $96,099,310 | |
| Shares reinvested | 1,088,638 | 17,189,589 | 2,073,359 | 29,960,039 | |
| Shares redeemed | + | (8,322,542) | (136,708,712) | (9,291,366) | (130,280,378) |
| Net transactions in fund shares | (307,837) | ($5,375,422) | (552,077) | ($4,221,029) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 38,597,550 | $571,737,834 | 39,149,627 | $577,094,804 | |
| Total increase (decrease) | + | (307,837) | 90,497,942 | (552,077) | (5,356,970) |
| End of period | 38,289,713 | $662,235,776 | 38,597,550 | $571,737,834 | |
74
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2030 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $15.67 | $15.79 | $15.24 | $16.10 | $14.51 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.22 | 0.33 | 0.30 | 0.29 | 0.23 | |
| Net realized and unrealized gains (losses) | 3.54 | 0.57 | 1.21 | (0.38) | 2.18 | |
| Total from investment operations | 3.76 | 0.90 | 1.51 | (0.09) | 2.41 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.27) | (0.37) | (0.37) | (0.39) | (0.24) | |
| Distributions from net realized gains | (0.28) | (0.65) | (0.59) | (0.38) | (0.58) | |
| Total distributions | (0.55) | (1.02) | (0.96) | (0.77) | (0.82) | |
| Net asset value at end of period | $18.88 | $15.67 | $15.79 | $15.24 | $16.10 | |
| Total return | 24.38% | 5.81% | 10.94% | (0.75%) | 17.47% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |
| Gross operating expenses2 | 0.01% | 0.02% | 0.02% | 0.02% | 0.02% | |
| Net investment income (loss) | 1.21% | 2.15% | 2.00% | 1.79% | 1.53% | |
| Portfolio turnover rate | 14% | 13% | 17% | 14% | 30% | |
| Net assets, end of period (x 1,000,000) | $1,166 | $965 | $999 | $958 | $966 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
75
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2030 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 71.5% OF NET ASSETS | ||
| U.S. Stocks 31.7% | ||
| Large-Cap 27.3% | ||
| Laudus U.S. Large Cap Growth Fund * | 668,100 | 23,583,922 |
| Schwab Core Equity Fund | 2,426,768 | 70,910,149 |
| Schwab Fundamental US Large Company Index Fund | 254,129 | 5,893,250 |
| Schwab S&P 500 Index Fund | 3,056,999 | 217,688,882 |
| 318,076,203 | ||
| Mid-Cap 1.3% | ||
| Schwab U.S. Mid-Cap Index Fund | 232,696 | 14,994,937 |
| Small-Cap 3.1% | ||
| Schwab Small-Cap Equity Fund | 1,526,551 | 36,286,126 |
| 369,357,266 | ||
| International Stocks 17.6% | ||
| Developed Markets 17.6% | ||
| Laudus International MarketMasters Fund * | 4,352,439 | 133,184,630 |
| Schwab International Core Equity Fund | 6,267,155 | 72,385,637 |
| 205,570,267 | ||
| Real Estate 3.3% | ||
| Global Real Estate 3.3% | ||
| Schwab Global Real Estate Fund | 4,789,369 | 38,745,994 |
| Fixed Income 17.7% | ||
| Inflation-Protected Bond 0.8% | ||
| Schwab Treasury Inflation Protected Securities Index Fund | 711,917 | 8,963,030 |
| Intermediate-Term Bond 12.4% | ||
| Schwab U.S. Aggregate Bond Index Fund | 13,890,043 | 145,012,045 |
| Short-Term Bond 4.5% | ||
| Schwab Short-Term Bond Index Fund | 5,117,734 | 52,149,714 |
| 206,124,789 | ||
| Money Market Funds 1.2% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 14,655,204 | 14,659,600 |
| Total Affiliated Underlying Funds (Cost $535,539,611) | 834,457,916 | |
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| UNAFFILIATED UNDERLYING FUNDS 27.2% OF NET ASSETS | ||
| U.S. Stocks 10.0% | ||
| Large-Cap 8.8% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 536,888 | 43,885,249 |
| Dodge & Cox Stock Fund | 236,516 | 58,317,755 |
| 102,203,004 | ||
| Small-Cap 1.2% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 239,494 | 14,429,524 |
| 116,632,528 | ||
| International Stocks 1.3% | ||
| Emerging Markets 1.3% | ||
| Goldman Sachs Emerging Markets Equity Insights Fund, Institutional Class | 1,263,429 | 14,971,636 |
| Fixed Income 15.9% | ||
| Intermediate-Term Bond 11.4% | ||
| Baird Aggregate Bond Fund, Institutional Class | 1,940,242 | 22,157,568 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 2,894,674 | 33,172,967 |
| Metropolitan West Total Return Bond Fund, Class I | 7,041,455 | 77,033,520 |
| 132,364,055 | ||
| International Bond 4.5% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 4,932,277 | 52,972,651 |
| 185,336,706 | ||
| Total Unaffiliated Underlying Funds (Cost $270,051,034) | 316,940,870 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.2% OF NET ASSETS | ||
| Time Deposits 1.2% | ||
| BNP Paribas SA | ||
| 0.01%, 11/01/21 (b) | 11,687,717 | 11,687,717 |
76
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2030 Fund
Portfolio Holdings as of October 31, 2021 (continued)
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| Citibank NA | ||
| 0.01%, 11/01/21 (b) | 1,815,176 | 1,815,176 |
| Total Short-Term Investments (Cost $13,502,893) | 13,502,893 | |
| Total Investments in Securities (Cost $819,093,538) | 1,164,901,679 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
77
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2030 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 71.5% OF NET ASSETS | ||||||||
| U.S. Stocks 31.7% | ||||||||
| Large-Cap 27.3% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $23,072,141 | $1,298,085 | ($6,600,000) | $3,712,958 | $2,100,738 | $23,583,922 | 668,100 | $1,298,085 |
| Schwab Core Equity Fund | 92,635,966 | 4,671,441 | (48,880,431) | 11,824,336 | 10,658,837 | 70,910,149 | 2,426,768 | 4,671,441 |
| Schwab Dividend Equity Fund | 7,754,406 | — | (8,910,071) | 1,860,615 | (704,950) | — | — | 52,968 |
| Schwab Fundamental US Large Company Index Fund | — | 4,770,000 | — | — | 1,123,250 | 5,893,250 | 254,129 | — |
| Schwab S&P 500 Index Fund | 142,592,653 | 26,363,956 | (12,980,000) | 1,398,787 | 60,313,486 | 217,688,882 | 3,056,999 | 2,843,956 |
| 318,076,203 | ||||||||
| Mid-Cap 1.3% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 11,503,681 | 196,417 | (1,490,000) | 332,885 | 4,451,954 | 14,994,937 | 232,696 | 196,417 |
| Small-Cap 3.1% | ||||||||
| Schwab Small-Cap Equity Fund | 28,900,959 | 65,408 | (7,921,601) | 1,255,243 | 13,986,117 | 36,286,126 | 1,526,551 | 65,408 |
| 369,357,266 | ||||||||
| International Stocks 17.6% | ||||||||
| Developed Markets 17.6% | ||||||||
| Laudus International MarketMasters Fund | 112,996,078 | 7,775,592 | (16,124,000) | 1,632,463 | 26,904,497 | 133,184,630 | 4,352,439 | 7,775,592 |
| Schwab International Core Equity Fund | 66,512,210 | 741,111 | (11,581,000) | 88,930 | 16,624,386 | 72,385,637 | 6,267,155 | 741,111 |
| 205,570,267 | ||||||||
| Real Estate 3.3% | ||||||||
| Global Real Estate 3.3% | ||||||||
| Schwab Global Real Estate Fund | 28,896,417 | 1,649,288 | (920,000) | (85,831) | 9,206,120 | 38,745,994 | 4,789,369 | 1,649,288 |
| Fixed Income 17.7% | ||||||||
| Inflation-Protected Bond 0.8% | ||||||||
| Schwab Treasury Inflation Protected Securities Index Fund | 4,607,974 | 4,786,411 | (702,353) | (10,965) | 281,963 | 8,963,030 | 711,917 | 246,411 |
| Intermediate-Term Bond 12.4% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 112,389,577 | 41,152,410 | (4,771,835) | (120,895) | (3,637,212) | 145,012,045 | 13,890,043 | 2,910,330 |
| Short-Term Bond 4.5% | ||||||||
| Schwab Short-Term Bond Index Fund | 43,172,563 | 9,799,457 | — | — | (822,306) | 52,149,714 | 5,117,734 | 569,554 |
| 206,124,789 | ||||||||
| Money Market Funds 1.2% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 12,656,711 | 2,004,354 | — | — | (1,465) | 14,659,600 | 14,655,204 | 4,370 |
| Total Affiliated Underlying Funds | $687,691,336 | $105,273,930 | ($120,881,291) | $21,888,526 | $140,485,415 | $834,457,916 | $23,024,931 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
78
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2030 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $834,457,916 | $— | $— | $834,457,916 |
| Unaffiliated Underlying Funds1 | 316,940,870 | — | — | 316,940,870 |
| Short-Term Investments1 | — | 13,502,893 | — | 13,502,893 |
| Total | $1,151,398,786 | $13,502,893 | $— | $1,164,901,679 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
79
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2030 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $535,539,611) | $834,457,916 | |
| Investments in securities, at value - unaffiliated (cost $283,553,927) | 330,443,763 | |
| Receivables: | ||
| Investments sold | 5,480,221 | |
| Fund shares sold | 486,399 | |
| Dividends | 429,027 | |
| Due from investment adviser | 8,369 | |
| Prepaid expenses | + | 23,103 |
| Total assets | 1,171,328,798 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 4,438,954 | |
| Fund shares redeemed | 431,050 | |
| Accrued expenses | + | 69,114 |
| Total liabilities | 4,939,118 | |
| Net assets | $1,166,389,680 | |
| Net Assets by Source | ||
| Capital received from investors | $771,966,272 | |
| Total distributable earnings | + | 394,423,408 |
| Net assets | $1,166,389,680 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $1,166,389,680 | 61,773,307 | $18.88 | ||
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Schwab Target Funds | Annual Report
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Schwab Target 2030 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $9,243,084 | |
| Dividends received from securities - unaffiliated | 4,128,288 | |
| Interest received from securities - unaffiliated | + | 754 |
| Total investment income | 13,372,126 | |
| Expenses | ||
| Registration fees | 37,448 | |
| Portfolio accounting fees | 31,313 | |
| Professional fees | 23,816 | |
| Shareholder reports | 20,100 | |
| Independent trustees’ fees | 10,538 | |
| Transfer agent fees | 6,870 | |
| Other expenses | + | 12,395 |
| Total expenses | 142,480 | |
| Expense reduction by investment adviser | – | 142,480 |
| Net expenses | – | — |
| Net investment income | 13,372,126 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 13,781,847 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 10,186,371 | |
| Net realized gains on sales of securities - affiliated | 21,888,526 | |
| Net realized gains on sales of securities - unaffiliated | + | 5,545,910 |
| Net realized gains | 51,402,654 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 140,485,415 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 27,833,660 |
| Net change in unrealized appreciation (depreciation) | + | 168,319,075 |
| Net realized and unrealized gains | 219,721,729 | |
| Increase in net assets resulting from operations | $233,093,855 | |
81
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2030 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $13,372,126 | $20,928,995 | |
| Net realized gains | 51,402,654 | 16,570,661 | |
| Net change in unrealized appreciation (depreciation) | + | 168,319,075 | 11,397,857 |
| Increase in net assets from operations | $233,093,855 | $48,897,513 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($33,685,506) | ($64,665,015) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 8,679,574 | $154,456,722 | 8,331,450 | $126,649,806 | |
| Shares reinvested | 1,918,145 | 32,455,024 | 4,044,928 | 62,251,430 | |
| Shares redeemed | + | (10,436,498) | (185,218,592) | (14,016,675) | (206,526,474) |
| Net transactions in fund shares | 161,221 | $1,693,154 | (1,640,297) | ($17,625,238) | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 61,612,086 | $965,288,177 | 63,252,383 | $998,680,917 | |
| Total increase (decrease) | + | 161,221 | 201,101,503 | (1,640,297) | (33,392,740) |
| End of period | 61,773,307 | $1,166,389,680 | 61,612,086 | $965,288,177 | |
82
Schwab Target Funds | Annual Report
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Schwab Target 2035 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $15.34 | $15.46 | $14.94 | $15.58 | $13.82 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.20 | 0.31 | 0.28 | 0.27 | 0.21 | |
| Net realized and unrealized gains (losses) | 3.99 | 0.53 | 1.19 | (0.38) | 2.32 | |
| Total from investment operations | 4.19 | 0.84 | 1.47 | (0.11) | 2.53 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.24) | (0.34) | (0.36) | (0.39) | (0.22) | |
| Distributions from net realized gains | (0.24) | (0.62) | (0.59) | (0.14) | (0.55) | |
| Total distributions | (0.48) | (0.96) | (0.95) | (0.53) | (0.77) | |
| Net asset value at end of period | $19.05 | $15.34 | $15.46 | $14.94 | $15.58 | |
| Total return | 27.76% | 5.51% | 10.90% | (0.88%) | 19.19% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% 3 | 0.00% | |
| Gross operating expenses2 | 0.02% | 0.03% | 0.03% | 0.03% | 0.04% | |
| Net investment income (loss) | 1.11% | 2.06% | 1.87% | 1.70% | 1.48% | |
| Portfolio turnover rate | 14% | 12% | 15% | 14% | 24% | |
| Net assets, end of period (x 1,000,000) | $612 | $477 | $483 | $447 | $440 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred. |
83
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2035 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 72.7% OF NET ASSETS | ||
| U.S. Stocks 35.9% | ||
| Large-Cap 30.7% | ||
| Laudus U.S. Large Cap Growth Fund * | 574,129 | 20,266,768 |
| Schwab Core Equity Fund | 1,433,759 | 41,894,424 |
| Schwab Fundamental US Large Company Index Fund | 311,135 | 7,215,216 |
| Schwab S&P 500 Index Fund | 1,666,858 | 118,696,941 |
| 188,073,349 | ||
| Mid-Cap 1.5% | ||
| Schwab U.S. Mid-Cap Index Fund | 140,455 | 9,050,934 |
| Small-Cap 3.7% | ||
| Schwab Small-Cap Equity Fund | 952,940 | 22,651,391 |
| 219,775,674 | ||
| International Stocks 19.9% | ||
| Developed Markets 19.9% | ||
| Laudus International MarketMasters Fund * | 2,619,975 | 80,171,247 |
| Schwab International Core Equity Fund | 3,593,900 | 41,509,544 |
| 121,680,791 | ||
| Real Estate 3.8% | ||
| Global Real Estate 3.8% | ||
| Schwab Global Real Estate Fund | 2,868,159 | 23,203,409 |
| Fixed Income 12.1% | ||
| Intermediate-Term Bond 9.0% | ||
| Schwab U.S. Aggregate Bond Index Fund | 5,286,264 | 55,188,599 |
| Short-Term Bond 3.1% | ||
| Schwab Short-Term Bond Index Fund | 1,866,094 | 19,015,497 |
| 74,204,096 | ||
| Money Market Funds 1.0% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 6,014,702 | 6,016,506 |
| Total Affiliated Underlying Funds (Cost $295,029,890) | 444,880,476 | |
| UNAFFILIATED UNDERLYING FUNDS 26.3% OF NET ASSETS | ||
| U.S. Stocks 10.7% | ||
| Large-Cap 9.2% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 279,382 | 22,836,688 |
| Dodge & Cox Stock Fund | 136,734 | 33,714,610 |
| 56,551,298 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 1.5% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 151,417 | 9,122,858 |
| 65,674,156 | ||
| International Stocks 2.1% | ||
| Emerging Markets 2.1% | ||
| Goldman Sachs Emerging Markets Equity Insights Fund, Institutional Class | 1,084,737 | 12,854,140 |
| Fixed Income 13.5% | ||
| Intermediate-Term Bond 9.6% | ||
| Baird Aggregate Bond Fund, Institutional Class | 698,983 | 7,982,391 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 1,583,359 | 18,145,299 |
| Metropolitan West Total Return Bond Fund, Class I | 2,985,964 | 32,666,444 |
| 58,794,134 | ||
| International Bond 3.9% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 2,215,800 | 23,797,696 |
| 82,591,830 | ||
| Total Unaffiliated Underlying Funds (Cost $135,091,636) | 161,120,126 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.9% OF NET ASSETS | ||
| Time Deposits 0.9% | ||
| BNP Paribas SA | ||
| 0.01%, 11/01/21 (b) | 5,759,593 | 5,759,593 |
| Total Short-Term Investments (Cost $5,759,593) | 5,759,593 | |
| Total Investments in Securities (Cost $435,881,119) | 611,760,195 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
84
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2035 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 72.7% OF NET ASSETS | ||||||||
| U.S. Stocks 35.9% | ||||||||
| Large-Cap 30.7% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $16,683,899 | $938,670 | ($2,230,001) | $763,290 | $4,110,910 | $20,266,768 | 574,129 | $938,670 |
| Schwab Core Equity Fund | 51,276,494 | 3,259,778 | (25,310,000) | 3,443,927 | 9,224,225 | 41,894,424 | 1,433,759 | 2,582,087 |
| Schwab Dividend Equity Fund | 7,043,705 | — | (8,111,279) | 738,519 | 329,055 | — | — | 51,638 |
| Schwab Fundamental US Large Company Index Fund | — | 5,840,000 | — | — | 1,375,216 | 7,215,216 | 311,135 | — |
| Schwab S&P 500 Index Fund | 71,231,322 | 18,935,736 | (4,210,001) | 235,257 | 32,504,627 | 118,696,941 | 1,666,858 | 1,460,277 |
| 188,073,349 | ||||||||
| Mid-Cap 1.5% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 7,118,767 | 121,549 | (1,060,001) | 180,921 | 2,689,698 | 9,050,934 | 140,455 | 121,549 |
| Small-Cap 3.7% | ||||||||
| Schwab Small-Cap Equity Fund | 17,736,031 | 449,881 | (4,930,000) | (242,007) | 9,637,486 | 22,651,391 | 952,940 | 39,882 |
| 219,775,674 | ||||||||
| International Stocks 19.9% | ||||||||
| Developed Markets 19.9% | ||||||||
| Laudus International MarketMasters Fund | 63,600,010 | 8,630,508 | (8,580,000) | 586,171 | 15,934,558 | 80,171,247 | 2,619,975 | 4,321,507 |
| Schwab International Core Equity Fund | 36,326,402 | 3,507,886 | (7,820,001) | 133,247 | 9,362,010 | 41,509,544 | 3,593,900 | 427,886 |
| 121,680,791 | ||||||||
| Real Estate 3.8% | ||||||||
| Global Real Estate 3.8% | ||||||||
| Schwab Global Real Estate Fund | 16,026,608 | 1,898,373 | — | — | 5,278,428 | 23,203,409 | 2,868,159 | 968,372 |
| Fixed Income 12.1% | ||||||||
| Intermediate-Term Bond 9.0% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 40,060,770 | 18,318,702 | (1,800,000) | (40,602) | (1,350,271) | 55,188,599 | 5,286,264 | 1,089,938 |
| Short-Term Bond 3.1% | ||||||||
| Schwab Short-Term Bond Index Fund | 15,108,866 | 4,205,074 | — | — | (298,443) | 19,015,497 | 1,866,094 | 205,111 |
| 74,204,096 | ||||||||
| Money Market Funds 1.0% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 4,015,524 | 2,001,583 | — | — | (601) | 6,016,506 | 6,014,702 | 1,607 |
| Total Affiliated Underlying Funds | $346,228,398 | $68,107,740 | ($64,051,283) | $5,798,723 | $88,796,898 | $444,880,476 | $12,208,524 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
85
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2035 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $444,880,476 | $— | $— | $444,880,476 |
| Unaffiliated Underlying Funds1 | 161,120,126 | — | — | 161,120,126 |
| Short-Term Investments1 | — | 5,759,593 | — | 5,759,593 |
| Total | $606,000,602 | $5,759,593 | $— | $611,760,195 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
86
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2035 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $295,029,890) | $444,880,476 | |
| Investments in securities, at value - unaffiliated (cost $140,851,229) | 166,879,719 | |
| Receivables: | ||
| Fund shares sold | 1,430,004 | |
| Investments sold | 1,175,429 | |
| Dividends | 170,214 | |
| Due from investment adviser | 6,625 | |
| Prepaid expenses | + | 9,379 |
| Total assets | 614,551,846 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 2,284,861 | |
| Fund shares redeemed | 18,010 | |
| Accrued expenses | + | 54,465 |
| Total liabilities | 2,357,336 | |
| Net assets | $612,194,510 | |
| Net Assets by Source | ||
| Capital received from investors | $416,933,766 | |
| Total distributable earnings | + | 195,260,744 |
| Net assets | $612,194,510 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $612,194,510 | 32,129,899 | $19.05 | ||
87
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2035 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $4,385,996 | |
| Dividends received from securities - unaffiliated | 1,979,068 | |
| Interest received from securities - unaffiliated | + | 362 |
| Total investment income | 6,365,426 | |
| Expenses | ||
| Registration fees | 30,467 | |
| Portfolio accounting fees | 25,781 | |
| Professional fees | 22,869 | |
| Shareholder reports | 12,067 | |
| Independent trustees’ fees | 8,836 | |
| Transfer agent fees | 5,323 | |
| Other expenses | + | 7,598 |
| Total expenses | 112,941 | |
| Expense reduction by investment adviser | – | 112,941 |
| Net expenses | – | — |
| Net investment income | 6,365,426 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 7,822,528 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 4,907,393 | |
| Net realized gains on sales of securities - affiliated | 5,798,723 | |
| Net realized gains on sales of securities - unaffiliated | + | 1,795,719 |
| Net realized gains | 20,324,363 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 88,796,898 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 17,594,264 |
| Net change in unrealized appreciation (depreciation) | + | 106,391,162 |
| Net realized and unrealized gains | 126,715,525 | |
| Increase in net assets resulting from operations | $133,080,951 | |
88
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2035 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $6,365,426 | $9,814,349 | |
| Net realized gains | 20,324,363 | 7,393,258 | |
| Net change in unrealized appreciation (depreciation) | + | 106,391,162 | 5,898,345 |
| Increase in net assets from operations | $133,080,951 | $23,105,952 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($15,121,800) | ($30,104,205) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 5,580,980 | $98,912,959 | 4,950,446 | $73,475,207 | |
| Shares reinvested | 875,675 | 14,737,609 | 1,911,963 | 29,023,597 | |
| Shares redeemed | + | (5,406,863) | (96,325,760) | (7,041,886) | (101,780,856) |
| Net transactions in fund shares | 1,049,792 | $17,324,808 | (179,477) | $717,948 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 31,080,107 | $476,910,551 | 31,259,584 | $483,190,856 | |
| Total increase (decrease) | + | 1,049,792 | 135,283,959 | (179,477) | (6,280,305) |
| End of period | 32,129,899 | $612,194,510 | 31,080,107 | $476,910,551 | |
89
Schwab Target Funds | Annual Report
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Schwab Target 2040 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $16.24 | $16.61 | $16.27 | $17.14 | $15.12 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.20 | 0.32 | 0.28 | 0.28 | 0.23 | |
| Net realized and unrealized gains (losses) | 4.68 | 0.56 | 1.28 | (0.45) | 2.78 | |
| Total from investment operations | 4.88 | 0.88 | 1.56 | (0.17) | 3.01 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.24) | (0.35) | (0.39) | (0.44) | (0.24) | |
| Distributions from net realized gains | (0.36) | (0.90) | (0.83) | (0.26) | (0.75) | |
| Total distributions | (0.60) | (1.25) | (1.22) | (0.70) | (0.99) | |
| Net asset value at end of period | $20.52 | $16.24 | $16.61 | $16.27 | $17.14 | |
| Total return | 30.57% | 5.31% | 10.90% | (1.17%) | 21.02% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% 3 | 0.00% | |
| Gross operating expenses2 | 0.01% | 0.02% | 0.02% | 0.02% | 0.02% | |
| Net investment income (loss) | 1.05% | 2.01% | 1.78% | 1.65% | 1.44% | |
| Portfolio turnover rate | 14% | 10% | 15% | 17% | 21% | |
| Net assets, end of period (x 1,000,000) | $1,236 | $985 | $1,012 | $962 | $998 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred. |
90
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2040 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 74.4% OF NET ASSETS | ||
| U.S. Stocks 39.7% | ||
| Large-Cap 33.8% | ||
| Laudus U.S. Large Cap Growth Fund * | 1,664,634 | 58,761,596 |
| Schwab Core Equity Fund | 3,123,257 | 91,261,565 |
| Schwab Fundamental US Large Company Index Fund | 940,181 | 21,802,800 |
| Schwab S&P 500 Index Fund | 3,457,138 | 246,182,829 |
| 418,008,790 | ||
| Mid-Cap 1.5% | ||
| Schwab U.S. Mid-Cap Index Fund | 294,308 | 18,965,177 |
| Small-Cap 4.4% | ||
| Schwab Small-Cap Equity Fund | 2,269,490 | 53,945,780 |
| 490,919,747 | ||
| International Stocks 21.8% | ||
| Developed Markets 21.8% | ||
| Laudus International MarketMasters Fund * | 5,688,732 | 174,075,204 |
| Schwab International Core Equity Fund | 8,227,830 | 95,031,438 |
| 269,106,642 | ||
| Real Estate 4.2% | ||
| Global Real Estate 4.2% | ||
| Schwab Global Real Estate Fund | 6,388,313 | 51,681,449 |
| Fixed Income 8.3% | ||
| Intermediate-Term Bond 6.1% | ||
| Schwab U.S. Aggregate Bond Index Fund | 7,250,743 | 75,697,757 |
| Short-Term Bond 2.2% | ||
| Schwab Short-Term Bond Index Fund | 2,603,435 | 26,529,002 |
| 102,226,759 | ||
| Money Market Funds 0.4% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 4,876,634 | 4,878,097 |
| Total Affiliated Underlying Funds (Cost $547,860,278) | 918,812,694 | |
| UNAFFILIATED UNDERLYING FUNDS 24.5% OF NET ASSETS | ||
| U.S. Stocks 10.9% | ||
| Large-Cap 9.2% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 513,475 | 41,971,410 |
| Dodge & Cox Stock Fund | 292,127 | 72,029,631 |
| 114,001,041 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 1.7% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 340,962 | 20,542,976 |
| 134,544,017 | ||
| International Stocks 2.9% | ||
| Emerging Markets 2.9% | ||
| Goldman Sachs Emerging Markets Equity Insights Fund, Institutional Class | 3,039,727 | 36,020,760 |
| Fixed Income 10.7% | ||
| Intermediate-Term Bond 7.8% | ||
| Baird Aggregate Bond Fund, Institutional Class | 943,906 | 10,779,410 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 3,011,255 | 34,508,986 |
| Metropolitan West Total Return Bond Fund, Class I | 4,609,183 | 50,424,466 |
| 95,712,862 | ||
| International Bond 2.9% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 3,389,428 | 36,402,458 |
| 132,115,320 | ||
| Total Unaffiliated Underlying Funds (Cost $248,308,990) | 302,680,097 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.0% OF NET ASSETS | ||
| Time Deposits 1.0% | ||
| BNP Paribas SA | ||
| 0.01%, 11/01/21 (b) | 12,395,303 | 12,395,303 |
| Skandinaviska Enskilda Banken AB | ||
| 0.01%, 11/01/21 (b) | 17,589 | 17,589 |
| Total Short-Term Investments (Cost $12,412,892) | 12,412,892 | |
| Total Investments in Securities (Cost $808,582,160) | 1,233,905,683 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
91
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2040 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 74.4% OF NET ASSETS | ||||||||
| U.S. Stocks 39.7% | ||||||||
| Large-Cap 33.8% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $45,866,279 | $3,737,247 | ($4,690,001) | $646,097 | $13,201,974 | $58,761,596 | 1,664,634 | $2,637,247 |
| Schwab Core Equity Fund | 114,355,888 | 5,759,619 | (56,925,455) | 11,792,894 | 16,278,619 | 91,261,565 | 3,123,257 | 5,759,619 |
| Schwab Dividend Equity Fund | 19,513,656 | — | (22,554,863) | 2,216,161 | 825,046 | — | — | 143,057 |
| Schwab Fundamental US Large Company Index Fund | — | 18,520,000 | (910,000) | 37,200 | 4,155,600 | 21,802,800 | 940,181 | — |
| Schwab S&P 500 Index Fund | 148,784,034 | 38,660,146 | (9,525,000) | 721,875 | 67,541,774 | 246,182,829 | 3,457,138 | 3,050,146 |
| 418,008,790 | ||||||||
| Mid-Cap 1.5% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 15,436,223 | 263,561 | (2,890,000) | 556,563 | 5,598,830 | 18,965,177 | 294,308 | 263,561 |
| Small-Cap 4.4% | ||||||||
| Schwab Small-Cap Equity Fund | 42,629,978 | 94,900 | (11,260,000) | 1,178,477 | 21,302,425 | 53,945,780 | 2,269,490 | 94,900 |
| 490,919,747 | ||||||||
| International Stocks 21.8% | ||||||||
| Developed Markets 21.8% | ||||||||
| Laudus International MarketMasters Fund | 139,977,655 | 15,921,427 | (18,210,000) | 1,755,658 | 34,630,464 | 174,075,204 | 5,688,732 | 9,721,427 |
| Schwab International Core Equity Fund | 83,622,077 | 969,793 | (11,100,001) | (390,864) | 21,930,433 | 95,031,438 | 8,227,830 | 969,793 |
| 269,106,642 | ||||||||
| Real Estate 4.2% | ||||||||
| Global Real Estate 4.2% | ||||||||
| Schwab Global Real Estate Fund | 36,808,630 | 2,914,080 | — | — | 11,958,739 | 51,681,449 | 6,388,313 | 2,164,081 |
| Fixed Income 8.3% | ||||||||
| Intermediate-Term Bond 6.1% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 58,368,806 | 22,601,587 | (3,300,000) | (123,181) | (1,849,455) | 75,697,757 | 7,250,743 | 1,538,435 |
| Short-Term Bond 2.2% | ||||||||
| Schwab Short-Term Bond Index Fund | 21,554,981 | 5,379,345 | — | — | (405,324) | 26,529,002 | 2,603,435 | 285,214 |
| 102,226,759 | ||||||||
| Money Market Funds 0.4% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 4,877,113 | 1,472 | — | — | (488) | 4,878,097 | 4,876,634 | 1,466 |
| Total Affiliated Underlying Funds | $731,795,320 | $114,823,177 | ($141,365,320) | $18,390,880 | $195,168,637 | $918,812,694 | $26,628,946 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
92
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2040 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $918,812,694 | $— | $— | $918,812,694 |
| Unaffiliated Underlying Funds1 | 302,680,097 | — | — | 302,680,097 |
| Short-Term Investments1 | — | 12,412,892 | — | 12,412,892 |
| Total | $1,221,492,791 | $12,412,892 | $— | $1,233,905,683 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
93
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2040 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $547,860,278) | $918,812,694 | |
| Investments in securities, at value - unaffiliated (cost $260,721,882) | 315,092,989 | |
| Receivables: | ||
| Investments sold | 5,793,044 | |
| Fund shares sold | 161,063 | |
| Interest | 146,240 | |
| Dividends | 98,918 | |
| Due from investment adviser | 7,532 | |
| Prepaid expenses | + | 19,691 |
| Total assets | 1,240,132,171 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 4,132,632 | |
| Fund shares redeemed | 382,259 | |
| Accrued expenses | + | 79,088 |
| Total liabilities | 4,593,979 | |
| Net assets | $1,235,538,192 | |
| Net Assets by Source | ||
| Capital received from investors | $764,420,825 | |
| Total distributable earnings | + | 471,117,367 |
| Net assets | $1,235,538,192 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $1,235,538,192 | 60,221,295 | $20.52 | ||
94
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2040 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $8,630,781 | |
| Dividends received from securities - unaffiliated | 3,652,849 | |
| Interest received from securities - unaffiliated | + | 712 |
| Total investment income | 12,284,342 | |
| Expenses | ||
| Registration fees | 35,720 | |
| Portfolio accounting fees | 31,947 | |
| Shareholder reports | 28,005 | |
| Professional fees | 23,994 | |
| Independent trustees’ fees | 10,711 | |
| Transfer agent fees | 8,372 | |
| Other expenses | + | 12,713 |
| Total expenses | 151,462 | |
| Expense reduction by investment adviser | – | 151,462 |
| Net expenses | – | — |
| Net investment income | 12,284,342 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 17,998,165 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 9,789,923 | |
| Net realized gains on sales of securities - affiliated | 18,390,880 | |
| Net realized gains on sales of securities - unaffiliated | + | 5,218,021 |
| Net realized gains | 51,396,989 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 195,168,637 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 38,889,787 |
| Net change in unrealized appreciation (depreciation) | + | 234,058,424 |
| Net realized and unrealized gains | 285,455,413 | |
| Increase in net assets resulting from operations | $297,739,755 | |
95
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2040 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $12,284,342 | $19,809,310 | |
| Net realized gains | 51,396,989 | 20,142,431 | |
| Net change in unrealized appreciation (depreciation) | + | 234,058,424 | 7,925,275 |
| Increase in net assets from operations | $297,739,755 | $47,877,016 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($36,450,563) | ($75,661,959) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 7,151,395 | $135,282,209 | 7,287,918 | $111,975,602 | |
| Shares reinvested | 1,997,627 | 35,757,521 | 4,584,013 | 74,123,497 | |
| Shares redeemed | + | (9,615,839) | (182,116,086) | (12,097,184) | (184,546,752) |
| Net transactions in fund shares | (466,817) | ($11,076,356) | (225,253) | $1,552,347 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 60,688,112 | $985,325,356 | 60,913,365 | $1,011,557,952 | |
| Total increase (decrease) | + | (466,817) | 250,212,836 | (225,253) | (26,232,596) |
| End of period | 60,221,295 | $1,235,538,192 | 60,688,112 | $985,325,356 | |
96
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2045 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $13.83 | $13.88 | $13.35 | $13.92 | $12.00 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.16 | 0.25 | 0.22 | 0.21 | 0.17 | |
| Net realized and unrealized gains (losses) | 4.36 | 0.46 | 1.09 | (0.39) | 2.37 | |
| Total from investment operations | 4.52 | 0.71 | 1.31 | (0.18) | 2.54 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.18) | (0.28) | (0.31) | (0.36) | (0.18) | |
| Distributions from net realized gains | (0.20) | (0.48) | (0.47) | (0.03) | (0.44) | |
| Total distributions | (0.38) | (0.76) | (0.78) | (0.39) | (0.62) | |
| Net asset value at end of period | $17.97 | $13.83 | $13.88 | $13.35 | $13.92 | |
| Total return | 33.13% | 5.10% | 10.91% | (1.43%) | 22.11% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% 3 | 0.00% | |
| Gross operating expenses2 | 0.04% | 0.05% | 0.08% | 0.06% | 0.10% | |
| Net investment income (loss) | 0.96% | 1.87% | 1.65% | 1.52% | 1.31% | |
| Portfolio turnover rate | 12% | 6% | 8% | 12% | 11% | |
| Net assets, end of period (x 1,000,000) | $252 | $178 | $162 | $139 | $121 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred. |
97
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2045 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 76.6% OF NET ASSETS | ||
| U.S. Stocks 43.0% | ||
| Large-Cap 36.5% | ||
| Laudus U.S. Large Cap Growth Fund * | 425,759 | 15,029,286 |
| Schwab Core Equity Fund | 681,534 | 19,914,426 |
| Schwab Fundamental US Large Company Index Fund | 288,561 | 6,691,733 |
| Schwab S&P 500 Index Fund | 710,160 | 50,570,503 |
| 92,205,948 | ||
| Mid-Cap 1.7% | ||
| Schwab U.S. Mid-Cap Index Fund | 65,038 | 4,191,025 |
| Small-Cap 4.8% | ||
| Schwab Small-Cap Equity Fund | 508,293 | 12,082,130 |
| 108,479,103 | ||
| International Stocks 23.8% | ||
| Developed Markets 23.8% | ||
| Laudus International MarketMasters Fund * | 1,222,267 | 37,401,355 |
| Schwab International Core Equity Fund | 1,965,842 | 22,705,478 |
| 60,106,833 | ||
| Real Estate 4.5% | ||
| Global Real Estate 4.5% | ||
| Schwab Global Real Estate Fund | 1,406,482 | 11,378,442 |
| Fixed Income 5.1% | ||
| Intermediate-Term Bond 3.8% | ||
| Schwab U.S. Aggregate Bond Index Fund | 914,577 | 9,548,183 |
| Short-Term Bond 1.3% | ||
| Schwab Short-Term Bond Index Fund | 318,816 | 3,248,739 |
| 12,796,922 | ||
| Money Market Funds 0.2% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 425,289 | 425,417 |
| Total Affiliated Underlying Funds (Cost $137,556,799) | 193,186,717 | |
| UNAFFILIATED UNDERLYING FUNDS 22.4% OF NET ASSETS | ||
| U.S. Stocks 11.0% | ||
| Large-Cap 9.1% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 91,036 | 7,441,250 |
| Dodge & Cox Stock Fund | 62,835 | 15,493,133 |
| 22,934,383 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 1.9% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 81,629 | 4,918,162 |
| 27,852,545 | ||
| International Stocks 3.8% | ||
| Emerging Markets 3.8% | ||
| Goldman Sachs Emerging Markets Equity Insights Fund, Institutional Class | 799,662 | 9,475,993 |
| Fixed Income 7.6% | ||
| Intermediate-Term Bond 5.6% | ||
| Baird Aggregate Bond Fund, Institutional Class | 130,504 | 1,490,358 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 517,299 | 5,928,252 |
| Metropolitan West Total Return Bond Fund, Class I | 626,716 | 6,856,269 |
| 14,274,879 | ||
| International Bond 2.0% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 460,270 | 4,943,305 |
| 19,218,184 | ||
| Total Unaffiliated Underlying Funds (Cost $45,789,114) | 56,546,722 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 1.0% OF NET ASSETS | ||
| Time Deposits 1.0% | ||
| Skandinaviska Enskilda Banken AB | ||
| 0.01%, 11/01/21 (b) | 138,467 | 138,467 |
| Sumitomo Mitsui Banking Corp. | ||
| 0.01%, 11/01/21 (b) | 2,528,126 | 2,528,126 |
| Total Short-Term Investments (Cost $2,666,593) | 2,666,593 | |
| Total Investments in Securities (Cost $186,012,506) | 252,400,032 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
98
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2045 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 76.6% OF NET ASSETS | ||||||||
| U.S. Stocks 43.0% | ||||||||
| Large-Cap 36.5% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $10,802,694 | $1,755,333 | ($1,000,000) | $28,679 | $3,442,580 | $15,029,286 | 425,759 | $609,923 |
| Schwab Core Equity Fund | 22,076,096 | 1,503,552 | (9,294,682) | 638,881 | 4,990,579 | 19,914,426 | 681,534 | 1,120,680 |
| Schwab Dividend Equity Fund | 3,996,168 | — | (4,601,847) | (391,953) | 997,632 | — | — | 29,295 |
| Schwab Fundamental US Large Company Index Fund | — | 5,540,000 | — | — | 1,151,733 | 6,691,733 | 288,561 | — |
| Schwab S&P 500 Index Fund | 27,015,854 | 11,929,027 | (1,510,000) | 59,074 | 13,076,548 | 50,570,503 | 710,160 | 577,624 |
| 92,205,948 | ||||||||
| Mid-Cap 1.7% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 2,782,886 | 447,515 | (239,999) | 45,373 | 1,155,250 | 4,191,025 | 65,038 | 47,516 |
| Small-Cap 4.8% | ||||||||
| Schwab Small-Cap Equity Fund | 8,281,447 | 458,836 | (1,249,999) | (141,252) | 4,733,098 | 12,082,130 | 508,293 | 18,836 |
| 108,479,103 | ||||||||
| International Stocks 23.8% | ||||||||
| Developed Markets 23.8% | ||||||||
| Laudus International MarketMasters Fund | 27,175,788 | 4,941,715 | (1,979,998) | 114,568 | 7,149,282 | 37,401,355 | 1,222,267 | 1,909,428 |
| Schwab International Core Equity Fund | 16,458,791 | 4,715,552 | (2,880,000) | (65,730) | 4,476,865 | 22,705,478 | 1,965,842 | 191,831 |
| 60,106,833 | ||||||||
| Real Estate 4.5% | ||||||||
| Global Real Estate 4.5% | ||||||||
| Schwab Global Real Estate Fund | 7,063,252 | 1,925,452 | — | — | 2,389,738 | 11,378,442 | 1,406,482 | 446,000 |
| Fixed Income 5.1% | ||||||||
| Intermediate-Term Bond 3.8% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 6,574,580 | 3,410,100 | (200,000) | (4,292) | (232,205) | 9,548,183 | 914,577 | 178,619 |
| Short-Term Bond 1.3% | ||||||||
| Schwab Short-Term Bond Index Fund | 2,462,881 | 833,846 | — | — | (47,988) | 3,248,739 | 318,816 | 32,585 |
| 12,796,922 | ||||||||
| Money Market Funds 0.2% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 425,331 | 129 | — | — | (43) | 425,417 | 425,289 | 129 |
| Total Affiliated Underlying Funds | $135,115,768 | $37,461,057 | ($22,956,525) | $283,348 | $43,283,069 | $193,186,717 | $5,162,466 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
99
Schwab Target Funds | Annual Report
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Schwab Target 2045 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $193,186,717 | $— | $— | $193,186,717 |
| Unaffiliated Underlying Funds1 | 56,546,722 | — | — | 56,546,722 |
| Short-Term Investments1 | — | 2,666,593 | — | 2,666,593 |
| Total | $249,733,439 | $2,666,593 | $— | $252,400,032 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Target 2045 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $137,556,799) | $193,186,717 | |
| Investments in securities, at value - unaffiliated (cost $48,455,707) | 59,213,315 | |
| Receivables: | ||
| Investments sold | 514,682 | |
| Fund shares sold | 268,879 | |
| Dividends | 31,622 | |
| Due from investment adviser | 9,615 | |
| Prepaid expenses | + | 6,715 |
| Total assets | 253,231,545 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 721,118 | |
| Fund shares redeemed | 169,609 | |
| Accrued expenses | + | 46,878 |
| Total liabilities | 937,605 | |
| Net assets | $252,293,940 | |
| Net Assets by Source | ||
| Capital received from investors | $179,922,192 | |
| Total distributable earnings | + | 72,371,748 |
| Net assets | $252,293,940 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $252,293,940 | 14,038,771 | $17.97 | ||
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Schwab Target 2045 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $1,553,626 | |
| Dividends received from securities - unaffiliated | 610,545 | |
| Interest received from securities - unaffiliated | + | 121 |
| Total investment income | 2,164,292 | |
| Expenses | ||
| Registration fees | 24,865 | |
| Professional fees | 22,203 | |
| Portfolio accounting fees | 21,632 | |
| Shareholder reports | 8,127 | |
| Independent trustees’ fees | 7,732 | |
| Transfer agent fees | 2,655 | |
| Other expenses | + | 4,964 |
| Total expenses | 92,178 | |
| Expense reduction by investment adviser | – | 92,178 |
| Net expenses | – | — |
| Net investment income | 2,164,292 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 3,608,840 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 1,655,948 | |
| Net realized gains on sales of securities - affiliated | 283,348 | |
| Net realized gains on sales of securities - unaffiliated | + | 429,784 |
| Net realized gains | 5,977,920 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 43,283,069 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 8,646,037 |
| Net change in unrealized appreciation (depreciation) | + | 51,929,106 |
| Net realized and unrealized gains | 57,907,026 | |
| Increase in net assets resulting from operations | $60,071,318 | |
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Schwab Target Funds | Annual Report
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Schwab Target 2045 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $2,164,292 | $3,165,797 | |
| Net realized gains | 5,977,920 | 2,612,624 | |
| Net change in unrealized appreciation (depreciation) | + | 51,929,106 | 2,859,982 |
| Increase in net assets from operations | $60,071,318 | $8,638,403 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($4,963,016) | ($8,999,527) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 3,403,163 | $56,732,083 | 2,950,192 | $38,924,237 | |
| Shares reinvested | 312,568 | 4,851,051 | 634,950 | 8,781,363 | |
| Shares redeemed | + | (2,547,667) | (42,389,208) | (2,390,959) | (31,369,522) |
| Net transactions in fund shares | 1,168,064 | $19,193,926 | 1,194,183 | $16,336,078 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 12,870,707 | $177,991,712 | 11,676,524 | $162,016,758 | |
| Total increase | + | 1,168,064 | 74,302,228 | 1,194,183 | 15,974,954 |
| End of period | 14,038,771 | $252,293,940 | 12,870,707 | $177,991,712 | |
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Schwab Target 2050 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $14.03 | $14.03 | $13.49 | $14.07 | $12.08 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.16 | 0.25 | 0.21 | 0.21 | 0.16 | |
| Net realized and unrealized gains (losses) | 4.66 | 0.45 | 1.11 | (0.41) | 2.47 | |
| Total from investment operations | 4.82 | 0.70 | 1.32 | (0.20) | 2.63 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.17) | (0.27) | (0.31) | (0.36) | (0.18) | |
| Distributions from net realized gains | (0.20) | (0.43) | (0.47) | (0.02) | (0.46) | |
| Total distributions | (0.37) | (0.70) | (0.78) | (0.38) | (0.64) | |
| Net asset value at end of period | $18.48 | $14.03 | $14.03 | $13.49 | $14.07 | |
| Total return | 34.83% | 4.96% | 10.87% | (1.50%) | 22.68% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% 3 | 0.00% | |
| Gross operating expenses2 | 0.04% | 0.06% | 0.08% | 0.07% | 0.11% | |
| Net investment income (loss) | 0.93% | 1.83% | 1.54% | 1.45% | 1.27% | |
| Portfolio turnover rate | 19% | 5% | 7% | 10% | 10% | |
| Net assets, end of period (x 1,000,000) | $245 | $181 | $161 | $122 | $104 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred. |
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Schwab Target Funds | Annual Report
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Schwab Target 2050 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 78.2% OF NET ASSETS | ||
| U.S. Stocks 45.5% | ||
| Large-Cap 38.6% | ||
| Laudus U.S. Large Cap Growth Fund * | 477,680 | 16,862,105 |
| Schwab Core Equity Fund | 708,902 | 20,714,110 |
| Schwab Fundamental US Large Company Index Fund | 323,467 | 7,501,204 |
| Schwab S&P 500 Index Fund | 696,335 | 49,586,015 |
| 94,663,434 | ||
| Mid-Cap 1.6% | ||
| Schwab U.S. Mid-Cap Index Fund | 61,485 | 3,962,121 |
| Small-Cap 5.3% | ||
| Schwab Small-Cap Equity Fund | 539,520 | 12,824,393 |
| 111,449,948 | ||
| International Stocks 24.8% | ||
| Developed Markets 24.8% | ||
| Laudus International MarketMasters Fund * | 1,244,860 | 38,092,718 |
| Schwab International Core Equity Fund | 1,956,479 | 22,597,338 |
| 60,690,056 | ||
| Real Estate 4.7% | ||
| Global Real Estate 4.7% | ||
| Schwab Global Real Estate Fund | 1,431,364 | 11,579,737 |
| Fixed Income 3.2% | ||
| Intermediate-Term Bond 2.4% | ||
| Schwab U.S. Aggregate Bond Index Fund | 576,451 | 6,018,149 |
| Short-Term Bond 0.8% | ||
| Schwab Short-Term Bond Index Fund | 188,456 | 1,920,368 |
| 7,938,517 | ||
| Money Market Funds 0.0% | ||
| Schwab Variable Share Price Money Fund, Ultra Shares 0.03% (a) | 28,047 | 28,055 |
| Total Affiliated Underlying Funds (Cost $135,595,667) | 191,686,313 | |
| UNAFFILIATED UNDERLYING FUNDS 21.0% OF NET ASSETS | ||
| U.S. Stocks 11.0% | ||
| Large-Cap 9.0% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 82,982 | 6,782,984 |
| Dodge & Cox Stock Fund | 61,891 | 15,260,554 |
| 22,043,538 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 2.0% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 80,621 | 4,857,389 |
| 26,900,927 | ||
| International Stocks 4.3% | ||
| Emerging Markets 4.3% | ||
| Goldman Sachs Emerging Markets Equity Insights Fund, Institutional Class | 896,358 | 10,621,843 |
| Fixed Income 5.7% | ||
| Intermediate-Term Bond 4.3% | ||
| Baird Aggregate Bond Fund, Institutional Class | 83,732 | 956,222 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 422,703 | 4,844,179 |
| Metropolitan West Total Return Bond Fund, Class I | 430,210 | 4,706,496 |
| 10,506,897 | ||
| International Bond 1.4% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 309,531 | 3,324,366 |
| 13,831,263 | ||
| Total Unaffiliated Underlying Funds (Cost $40,796,969) | 51,354,033 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.8% OF NET ASSETS | ||
| Time Deposits 0.8% | ||
| Citibank NA | ||
| 0.01%, 11/01/21 (b) | 1,980,121 | 1,980,121 |
| Total Short-Term Investments (Cost $1,980,121) | 1,980,121 | |
| Total Investments in Securities (Cost $178,372,757) | 245,020,467 | |
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | The rate shown is the current daily overnight rate. |
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Schwab Target 2050 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 78.2% OF NET ASSETS | ||||||||
| U.S. Stocks 45.5% | ||||||||
| Large-Cap 38.6% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $12,216,880 | $3,159,689 | ($2,400,000) | $272,646 | $3,612,890 | $16,862,105 | 477,680 | $724,098 |
| Schwab Core Equity Fund | 23,187,335 | 1,177,090 | (9,449,998) | 581,786 | 5,217,897 | 20,714,110 | 708,902 | 1,177,090 |
| Schwab Dividend Equity Fund | 4,987,939 | — | (5,743,936) | (316,062) | 1,072,059 | — | — | 36,567 |
| Schwab Fundamental US Large Company Index Fund | — | 6,140,000 | — | — | 1,361,204 | 7,501,204 | 323,467 | — |
| Schwab S&P 500 Index Fund | 27,248,154 | 13,533,636 | (4,165,002) | 229,497 | 12,739,730 | 49,586,015 | 696,335 | 573,635 |
| 94,663,434 | ||||||||
| Mid-Cap 1.6% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 3,036,218 | 51,841 | (399,999) | 86,118 | 1,187,943 | 3,962,121 | 61,485 | 51,841 |
| Small-Cap 5.3% | ||||||||
| Schwab Small-Cap Equity Fund | 9,203,031 | 471,385 | (1,950,000) | (132,490) | 5,232,467 | 12,824,393 | 539,520 | 21,384 |
| 111,449,948 | ||||||||
| International Stocks 24.8% | ||||||||
| Developed Markets 24.8% | ||||||||
| Laudus International MarketMasters Fund | 29,200,634 | 6,267,718 | (5,200,000) | 567,773 | 7,256,593 | 38,092,718 | 1,244,860 | 2,060,939 |
| Schwab International Core Equity Fund | 17,195,358 | 4,115,467 | (3,310,000) | (56,166) | 4,652,679 | 22,597,338 | 1,956,479 | 205,552 |
| 60,690,056 | ||||||||
| Real Estate 4.7% | ||||||||
| Global Real Estate 4.7% | ||||||||
| Schwab Global Real Estate Fund | 7,584,737 | 2,243,739 | (740,000) | (89,243) | 2,580,504 | 11,579,737 | 1,431,364 | 453,739 |
| Fixed Income 3.2% | ||||||||
| Intermediate-Term Bond 2.4% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 4,740,365 | 1,414,178 | — | — | (136,394) | 6,018,149 | 576,451 | 114,220 |
| Short-Term Bond 0.8% | ||||||||
| Schwab Short-Term Bond Index Fund | 1,709,365 | 241,069 | — | — | (30,066) | 1,920,368 | 188,456 | 21,072 |
| 7,938,517 | ||||||||
| Money Market Funds 0.0% | ||||||||
| Schwab Variable Share Price Money Fund, Ultra Shares | 28,050 | 8 | — | — | (3) | 28,055 | 28,047 | 6 |
| Total Affiliated Underlying Funds | $140,338,066 | $38,815,820 | ($33,358,935) | $1,143,859 | $44,747,503 | $191,686,313 | $5,440,143 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
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Schwab Target Funds ��| Annual Report
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Schwab Target 2050 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $191,686,313 | $— | $— | $191,686,313 |
| Unaffiliated Underlying Funds1 | 51,354,033 | — | — | 51,354,033 |
| Short-Term Investments1 | — | 1,980,121 | — | 1,980,121 |
| Total | $243,040,346 | $1,980,121 | $— | $245,020,467 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Target Funds | Annual Report
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Schwab Target 2050 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $135,595,667) | $191,686,313 | |
| Investments in securities, at value - unaffiliated (cost $42,777,090) | 53,334,154 | |
| Receivables: | ||
| Fund shares sold | 173,188 | |
| Dividends | 20,569 | |
| Due from investment adviser | 9,175 | |
| Prepaid expenses | + | 7,719 |
| Total assets | 245,231,118 | |
| Liabilities | ||
| Payables: | ||
| Fund shares redeemed | 108,975 | |
| Investments bought | 15,162 | |
| Accrued expenses | + | 48,244 |
| Total liabilities | 172,381 | |
| Net assets | $245,058,737 | |
| Net Assets by Source | ||
| Capital received from investors | $171,259,323 | |
| Total distributable earnings | + | 73,799,414 |
| Net assets | $245,058,737 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $245,058,737 | 13,261,388 | $18.48 | ||
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Schwab Target 2050 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $1,518,341 | |
| Dividends received from securities - unaffiliated | 535,565 | |
| Interest received from securities - unaffiliated | + | 120 |
| Total investment income | 2,054,026 | |
| Expenses | ||
| Registration fees | 24,425 | |
| Professional fees | 22,262 | |
| Portfolio accounting fees | 21,708 | |
| Shareholder reports | 9,751 | |
| Independent trustees’ fees | 7,720 | |
| Transfer agent fees | 2,996 | |
| Other expenses | + | 4,952 |
| Total expenses | 93,814 | |
| Expense reduction by investment adviser | – | 93,814 |
| Net expenses | – | — |
| Net investment income | 2,054,026 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 3,921,802 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 1,558,744 | |
| Net realized gains on sales of securities - affiliated | 1,143,859 | |
| Net realized gains on sales of securities - unaffiliated | + | 765,161 |
| Net realized gains | 7,389,566 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 44,747,503 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 8,771,760 |
| Net change in unrealized appreciation (depreciation) | + | 53,519,263 |
| Net realized and unrealized gains | 60,908,829 | |
| Increase in net assets resulting from operations | $62,962,855 | |
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Schwab Target 2050 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $2,054,026 | $3,085,100 | |
| Net realized gains | 7,389,566 | 2,499,877 | |
| Net change in unrealized appreciation (depreciation) | + | 53,519,263 | 2,239,611 |
| Increase in net assets from operations | $62,962,855 | $7,824,588 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($4,905,042) | ($8,146,453) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 3,400,099 | $58,030,659 | 3,278,640 | $44,358,522 | |
| Shares reinvested | 302,276 | 4,791,072 | 564,445 | 7,947,390 | |
| Shares redeemed | + | (3,366,800) | (57,211,988) | (2,395,025) | (31,595,800) |
| Net transactions in fund shares | 335,575 | $5,609,743 | 1,448,060 | $20,710,112 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 12,925,813 | $181,391,181 | 11,477,753 | $161,002,934 | |
| Total increase | + | 335,575 | 63,667,556 | 1,448,060 | 20,388,247 |
| End of period | 13,261,388 | $245,058,737 | 12,925,813 | $181,391,181 | |
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Schwab Target 2055 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $14.11 | $14.15 | $13.60 | $14.18 | $12.09 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.15 | 0.24 | 0.21 | 0.20 | 0.16 | |
| Net realized and unrealized gains (losses) | 4.83 | 0.45 | 1.10 | (0.39) | 2.55 | |
| Total from investment operations | 4.98 | 0.69 | 1.31 | (0.19) | 2.71 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.16) | (0.27) | (0.31) | (0.37) | (0.17) | |
| Distributions from net realized gains | (0.19) | (0.46) | (0.45) | (0.02) | (0.45) | |
| Total distributions | (0.35) | (0.73) | (0.76) | (0.39) | (0.62) | |
| Net asset value at end of period | $18.74 | $14.11 | $14.15 | $13.60 | $14.18 | |
| Total return | 35.79% | 4.86% | 10.73% | (1.49%) | 23.35% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% 3 | 0.00% | |
| Gross operating expenses2 | 0.06% | 0.09% | 0.13% | 0.11% | 0.19% | |
| Net investment income (loss) | 0.88% | 1.78% | 1.53% | 1.41% | 1.24% | |
| Portfolio turnover rate | 11% | 6% | 6% | 10% | 9% | |
| Net assets, end of period (x 1,000,000) | $158 | $107 | $94 | $73 | $60 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 3 | Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred. |
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Schwab Target 2055 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 79.2% OF NET ASSETS | ||
| U.S. Stocks 46.8% | ||
| Large-Cap 39.5% | ||
| Laudus U.S. Large Cap Growth Fund * | 341,613 | 12,058,925 |
| Schwab Core Equity Fund | 452,719 | 13,228,444 |
| Schwab Fundamental US Large Company Index Fund | 232,746 | 5,397,376 |
| Schwab S&P 500 Index Fund | 446,044 | 31,762,806 |
| 62,447,551 | ||
| Mid-Cap 1.7% | ||
| Schwab U.S. Mid-Cap Index Fund | 42,588 | 2,744,354 |
| Small-Cap 5.6% | ||
| Schwab Small-Cap Equity Fund | 372,688 | 8,858,802 |
| 74,050,707 | ||
| International Stocks 25.3% | ||
| Developed Markets 25.3% | ||
| Laudus International MarketMasters Fund * | 828,184 | 25,342,418 |
| Schwab International Core Equity Fund | 1,267,473 | 14,639,313 |
| 39,981,731 | ||
| Real Estate 4.9% | ||
| Global Real Estate 4.9% | ||
| Schwab Global Real Estate Fund | 963,590 | 7,795,440 |
| Fixed Income 2.2% | ||
| Intermediate-Term Bond 1.6% | ||
| Schwab U.S. Aggregate Bond Index Fund | 245,690 | 2,564,999 |
| Short-Term Bond 0.6% | ||
| Schwab Short-Term Bond Index Fund | 85,915 | 875,475 |
| 3,440,474 | ||
| Total Affiliated Underlying Funds (Cost $89,281,215) | 125,268,352 | |
| UNAFFILIATED UNDERLYING FUNDS 20.1% OF NET ASSETS | ||
| U.S. Stocks 11.0% | ||
| Large-Cap 8.9% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 46,521 | 3,802,660 |
| Dodge & Cox Stock Fund | 41,979 | 10,350,739 |
| 14,153,399 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 2.1% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 54,854 | 3,304,980 |
| 17,458,379 | ||
| International Stocks 4.8% | ||
| Emerging Markets 4.8% | ||
| Goldman Sachs Emerging Markets Equity Insights Fund, Institutional Class | 645,976 | 7,654,815 |
| Fixed Income 4.3% | ||
| Intermediate-Term Bond 3.3% | ||
| Baird Aggregate Bond Fund, Institutional Class | 41,089 | 469,232 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 209,077 | 2,396,027 |
| Metropolitan West Total Return Bond Fund, Class I | 212,295 | 2,322,509 |
| 5,187,768 | ||
| International Bond 1.0% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 146,043 | 1,568,504 |
| 6,756,272 | ||
| Total Unaffiliated Underlying Funds (Cost $24,992,823) | 31,869,466 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.8% OF NET ASSETS | ||
| Time Deposits 0.8% | ||
| DnB Bank ASA | ||
| 0.01%, 11/01/21 (a) | 1,286,013 | 1,286,013 |
| Total Short-Term Investments (Cost $1,286,013) | 1,286,013 | |
| Total Investments in Securities (Cost $115,560,051) | 158,423,831 | |
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. |
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Schwab Target 2055 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 79.2% OF NET ASSETS | ||||||||
| U.S. Stocks 46.8% | ||||||||
| Large-Cap 39.5% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $8,126,767 | $1,807,229 | ($621,290) | $30,954 | $2,715,265 | $12,058,925 | 341,613 | $457,228 |
| Schwab Core Equity Fund | 13,835,514 | 702,351 | (4,959,999) | 331,787 | 3,318,791 | 13,228,444 | 452,719 | 702,351 |
| Schwab Dividend Equity Fund | 3,126,027 | — | (3,599,823) | (234,162) | 707,958 | — | — | 22,917 |
| Schwab Fundamental US Large Company Index Fund | — | 4,470,000 | — | — | 927,376 | 5,397,376 | 232,746 | — |
| Schwab S&P 500 Index Fund | 16,166,175 | 7,978,612 | (516,273) | 11,990 | 8,122,302 | 31,762,806 | 446,044 | 347,611 |
| 62,447,551 | ||||||||
| Mid-Cap 1.7% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 1,888,066 | 32,237 | — | — | 824,051 | 2,744,354 | 42,588 | 32,237 |
| Small-Cap 5.6% | ||||||||
| Schwab Small-Cap Equity Fund | 5,575,641 | 813,955 | (730,000) | (55,514) | 3,254,720 | 8,858,802 | 372,688 | 12,956 |
| 74,050,707 | ||||||||
| International Stocks 25.3% | ||||||||
| Developed Markets 25.3% | ||||||||
| Laudus International MarketMasters Fund | 17,531,912 | 4,284,004 | (1,300,000) | 138,830 | 4,687,672 | 25,342,418 | 828,184 | 1,237,377 |
| Schwab International Core Equity Fund | 10,523,299 | 1,990,064 | (750,000) | 6,941 | 2,869,009 | 14,639,313 | 1,267,473 | 125,794 |
| 39,981,731 | ||||||||
| Real Estate 4.9% | ||||||||
| Global Real Estate 4.9% | ||||||||
| Schwab Global Real Estate Fund | 4,687,042 | 1,490,981 | — | — | 1,617,417 | 7,795,440 | 963,590 | 300,982 |
| Fixed Income 2.2% | ||||||||
| Intermediate-Term Bond 1.6% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 1,909,309 | 920,016 | (200,000) | (4,154) | (60,172) | 2,564,999 | 245,690 | 50,033 |
| Short-Term Bond 0.6% | ||||||||
| Schwab Short-Term Bond Index Fund | 729,579 | 159,431 | — | — | (13,535) | 875,475 | 85,915 | 9,431 |
| 3,440,474 | ||||||||
| Total Affiliated Underlying Funds | $84,099,331 | $24,648,880 | ($12,677,385) | $226,672 | $28,970,854 | $125,268,352 | $3,298,917 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
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Schwab Target 2055 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $125,268,352 | $— | $— | $125,268,352 |
| Unaffiliated Underlying Funds1 | 31,869,466 | — | — | 31,869,466 |
| Short-Term Investments1 | — | 1,286,013 | — | 1,286,013 |
| Total | $157,137,818 | $1,286,013 | $— | $158,423,831 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Target 2055 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $89,281,215) | $125,268,352 | |
| Investments in securities, at value - unaffiliated (cost $26,278,836) | 33,155,479 | |
| Receivables: | ||
| Fund shares sold | 94,076 | |
| Dividends | 9,208 | |
| Due from investment adviser | 7,507 | |
| Prepaid expenses | + | 6,291 |
| Total assets | 158,540,913 | |
| Liabilities | ||
| Payables: | ||
| Fund shares redeemed | 151,415 | |
| Investments bought | 126,543 | |
| Accrued expenses | + | 39,664 |
| Total liabilities | 317,622 | |
| Net assets | $158,223,291 | |
| Net Assets by Source | ||
| Capital received from investors | $112,064,941 | |
| Total distributable earnings | + | 46,158,350 |
| Net assets | $158,223,291 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $158,223,291 | 8,444,175 | $18.74 | ||
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Schwab Target 2055 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $920,420 | |
| Dividends received from securities - unaffiliated | 316,928 | |
| Interest received from securities - unaffiliated | + | 61 |
| Total investment income | 1,237,409 | |
| Expenses | ||
| Registration fees | 22,781 | |
| Professional fees | 22,025 | |
| Portfolio accounting fees | 12,668 | |
| Shareholder reports | 10,518 | |
| Independent trustees’ fees | 7,465 | |
| Transfer agent fees | 2,095 | |
| Other expenses | + | 4,343 |
| Total expenses | 81,895 | |
| Expense reduction by investment adviser | – | 81,895 |
| Net expenses | – | — |
| Net investment income | 1,237,409 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 2,378,497 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 899,150 | |
| Net realized gains on sales of securities - affiliated | 226,672 | |
| Net realized gains on sales of securities - unaffiliated | + | 175,164 |
| Net realized gains | 3,679,483 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 28,970,854 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 5,768,762 |
| Net change in unrealized appreciation (depreciation) | + | 34,739,616 |
| Net realized and unrealized gains | 38,419,099 | |
| Increase in net assets resulting from operations | $39,656,508 | |
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Schwab Target 2055 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $1,237,409 | $1,785,195 | |
| Net realized gains | 3,679,483 | 1,028,863 | |
| Net change in unrealized appreciation (depreciation) | + | 34,739,616 | 2,151,448 |
| Increase in net assets from operations | $39,656,508 | $4,965,506 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($2,778,154) | ($4,969,426) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 2,415,853 | $41,626,853 | 2,219,735 | $29,888,670 | |
| Shares reinvested | 169,303 | 2,710,532 | 340,618 | 4,836,775 | |
| Shares redeemed | + | (1,750,620) | (30,393,721) | (1,576,305) | (21,062,762) |
| Net transactions in fund shares | 834,536 | $13,943,664 | 984,048 | $13,662,683 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 7,609,639 | $107,401,273 | 6,625,591 | $93,742,510 | |
| Total increase | + | 834,536 | 50,822,018 | 984,048 | 13,658,763 |
| End of period | 8,444,175 | $158,223,291 | 7,609,639 | $107,401,273 | |
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Schwab Target 2060 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 11/1/20– 10/31/21 | 11/1/19– 10/31/20 | 11/1/18– 10/31/19 | 11/1/17– 10/31/18 | 11/1/16– 10/31/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $12.21 | $12.16 | $11.53 | $12.02 | $9.83 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.12 | 0.20 | 0.16 | 0.14 | 0.08 | |
| Net realized and unrealized gains (losses) | 4.34 | 0.38 | 0.99 | (0.32) | 2.22 | |
| Total from investment operations | 4.46 | 0.58 | 1.15 | (0.18) | 2.30 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.13) | (0.22) | (0.26) | (0.29) | (0.11) | |
| Distributions from net realized gains | (0.12) | (0.31) | (0.26) | (0.02) | — | |
| Total distributions | (0.25) | (0.53) | (0.52) | (0.31) | (0.11) | |
| Net asset value at end of period | $16.42 | $12.21 | $12.16 | $11.53 | $12.02 | |
| Total return | 36.89% | 4.73% | 10.85% | (1.64%) | 23.63% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses2 | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |
| Gross operating expenses2 | 0.22% | 0.41% | 0.67% | 0.73% | 1.89% | |
| Net investment income (loss) | 0.80% | 1.67% | 1.42% | 1.18% | 0.75% | |
| Portfolio turnover rate | 11% | 8% | 13% | 22% | 7% | |
| Net assets, end of period (x 1,000,000) | $40 | $22 | $16 | $10 | $6 | |
| 1 | Calculated based on the average shares outstanding during the period. |
| 2 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
118
Schwab Target Funds | Annual Report
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Schwab Target 2060 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 80.1% OF NET ASSETS | ||
| U.S. Stocks 47.7% | ||
| Large-Cap 40.4% | ||
| Laudus U.S. Large Cap Growth Fund * | 94,124 | 3,322,582 |
| Schwab Core Equity Fund | 111,529 | 3,258,883 |
| Schwab Fundamental US Large Company Index Fund | 63,600 | 1,474,879 |
| Schwab S&P 500 Index Fund | 114,186 | 8,131,219 |
| 16,187,563 | ||
| Mid-Cap 1.7% | ||
| Schwab U.S. Mid-Cap Index Fund | 10,613 | 683,890 |
| Small-Cap 5.6% | ||
| Schwab Small-Cap Equity Fund | 94,291 | 2,241,296 |
| 19,112,749 | ||
| International Stocks 26.2% | ||
| Developed Markets 26.2% | ||
| Laudus International MarketMasters Fund * | 204,887 | 6,269,552 |
| Schwab International Core Equity Fund | 365,547 | 4,222,062 |
| 10,491,614 | ||
| Real Estate 5.0% | ||
| Global Real Estate 5.0% | ||
| Schwab Global Real Estate Fund | 251,159 | 2,031,876 |
| Fixed Income 1.2% | ||
| Intermediate-Term Bond 0.9% | ||
| Schwab U.S. Aggregate Bond Index Fund | 35,603 | 371,694 |
| Short-Term Bond 0.3% | ||
| Schwab Short-Term Bond Index Fund | 10,577 | 107,781 |
| 479,475 | ||
| Total Affiliated Underlying Funds (Cost $24,836,055) | 32,115,714 | |
| UNAFFILIATED UNDERLYING FUNDS 19.4% OF NET ASSETS | ||
| U.S. Stocks 10.9% | ||
| Large-Cap 8.6% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 10,341 | 845,244 |
| Dodge & Cox Stock Fund | 10,616 | 2,617,552 |
| 3,462,796 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 2.3% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 15,150 | 912,782 |
| 4,375,578 | ||
| International Stocks 5.5% | ||
| Emerging Markets 5.5% | ||
| Goldman Sachs Emerging Markets Equity Insights Fund, Institutional Class | 185,541 | 2,198,658 |
| Fixed Income 3.0% | ||
| Intermediate-Term Bond 2.4% | ||
| Baird Aggregate Bond Fund, Institutional Class | 12,729 | 145,363 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 38,946 | 446,316 |
| Metropolitan West Total Return Bond Fund, Class I | 32,545 | 356,039 |
| 947,718 | ||
| International Bond 0.6% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 22,464 | 241,261 |
| 1,188,979 | ||
| Total Unaffiliated Underlying Funds (Cost $6,298,095) | 7,763,215 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.5% OF NET ASSETS | ||
| Time Deposits 0.5% | ||
| Citibank NA | ||
| 0.01%, 11/01/21 (a) | 216,616 | 216,616 |
| Total Short-Term Investments (Cost $216,616) | 216,616 | |
| Total Investments in Securities (Cost $31,350,766) | 40,095,545 | |
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. |
119
Schwab Target Funds | Annual Report
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Schwab Target 2060 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 10/31/20 | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 80.1% OF NET ASSETS | ||||||||
| U.S. Stocks 47.7% | ||||||||
| Large-Cap 40.4% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $1,763,036 | $1,051,080 | ($170,000) | $5,722 | $672,744 | $3,322,582 | 94,124 | $102,187 |
| Schwab Core Equity Fund | 2,819,014 | 327,364 | (690,000) | 25,463 | 777,042 | 3,258,883 | 111,529 | 143,106 |
| Schwab Dividend Equity Fund | 677,221 | — | (785,181) | (19,295) | 127,255 | — | — | 4,965 |
| Schwab Fundamental US Large Company Index Fund | — | 1,300,000 | (50,000) | 331 | 224,548 | 1,474,879 | 63,600 | — |
| Schwab S&P 500 Index Fund | 3,253,286 | 3,484,231 | (431,000) | 10,160 | 1,814,542 | 8,131,219 | 114,186 | 70,978 |
| 16,187,563 | ||||||||
| Mid-Cap 1.7% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | 377,955 | 131,453 | — | — | 174,482 | 683,890 | 10,613 | 6,453 |
| Small-Cap 5.6% | ||||||||
| Schwab Small-Cap Equity Fund | 1,201,420 | 401,792 | (80,000) | (880) | 718,964 | 2,241,296 | 94,291 | 2,791 |
| 19,112,749 | ||||||||
| International Stocks 26.2% | ||||||||
| Developed Markets 26.2% | ||||||||
| Laudus International MarketMasters Fund | 3,562,611 | 2,080,573 | (421,000) | 30,272 | 1,017,096 | 6,269,552 | 204,887 | 257,246 |
| Schwab International Core Equity Fund | 2,127,378 | 1,670,272 | (194,998) | (5,430) | 624,840 | 4,222,062 | 365,547 | 26,168 |
| 10,491,614 | ||||||||
| Real Estate 5.0% | ||||||||
| Global Real Estate 5.0% | ||||||||
| Schwab Global Real Estate Fund | 944,042 | 773,645 | (40,000) | (6,298) | 360,487 | 2,031,876 | 251,159 | 69,197 |
| Fixed Income 1.2% | ||||||||
| Intermediate-Term Bond 0.9% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | 232,349 | 237,105 | (90,000) | (1,436) | (6,324) | 371,694 | 35,603 | 6,108 |
| Short-Term Bond 0.3% | ||||||||
| Schwab Short-Term Bond Index Fund | 78,241 | 30,952 | — | — | (1,412) | 107,781 | 10,577 | 951 |
| 479,475 | ||||||||
| Total Affiliated Underlying Funds | $17,036,553 | $11,488,467 | ($2,952,179) | $38,609 | $6,504,264 | $32,115,714 | $690,150 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
120
Schwab Target Funds | Annual Report
See financial notes
Schwab Target 2060 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $32,115,714 | $— | $— | $32,115,714 |
| Unaffiliated Underlying Funds1 | 7,763,215 | — | — | 7,763,215 |
| Short-Term Investments1 | — | 216,616 | — | 216,616 |
| Total | $39,878,929 | $216,616 | $— | $40,095,545 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
121
Schwab Target Funds | Annual Report
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Schwab Target 2060 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $24,836,055) | $32,115,714 | |
| Investments in securities, at value - unaffiliated (cost $6,514,711) | 7,979,831 | |
| Receivables: | ||
| Fund shares sold | 10,466 | |
| Due from investment adviser | 5,941 | |
| Dividends | 1,380 | |
| Prepaid expenses | + | 11,117 |
| Total assets | 40,124,449 | |
| Liabilities | ||
| Payables: | ||
| Fund shares redeemed | 10,893 | |
| Investments bought | 971 | |
| Accrued expenses | + | 35,959 |
| Total liabilities | 47,823 | |
| Net assets | $40,076,626 | |
| Net Assets by Source | ||
| Capital received from investors | $30,792,808 | |
| Total distributable earnings | + | 9,283,818 |
| Net assets | $40,076,626 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $40,076,626 | 2,440,778 | $16.42 | ||
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Schwab Target 2060 Fund
Statement of Operations
| For the period November 1, 2020 through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $191,110 | |
| Dividends received from securities - unaffiliated | 63,324 | |
| Interest received from securities - unaffiliated | + | 10 |
| Total investment income | 254,444 | |
| Expenses | ||
| Professional fees | 21,654 | |
| Registration fees | 20,296 | |
| Portfolio accounting fees | 11,571 | |
| Independent trustees’ fees | 7,122 | |
| Shareholder reports | 5,114 | |
| Transfer agent fees | 817 | |
| Custodian fees | 259 | |
| Other expenses | + | 3,531 |
| Total expenses | 70,364 | |
| Expense reduction by investment adviser | – | 70,364 |
| Net expenses | – | — |
| Net investment income | 254,444 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - affiliated | 499,040 | |
| Realized capital gain distributions received from underlying funds - unaffiliated | 170,008 | |
| Net realized gains on sales of securities - affiliated | 38,609 | |
| Net realized gains on sales of securities - unaffiliated | + | 24,599 |
| Net realized gains | 732,256 | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 6,504,264 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 1,274,277 |
| Net change in unrealized appreciation (depreciation) | + | 7,778,541 |
| Net realized and unrealized gains | 8,510,797 | |
| Increase in net assets resulting from operations | $8,765,241 | |
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Schwab Target 2060 Fund
Statement of Changes in Net Assets
For the current and prior report periods
| OPERATIONS | |||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||
| Net investment income | $254,444 | $303,465 | |
| Net realized gains | 732,256 | 84,396 | |
| Net change in unrealized appreciation (depreciation) | + | 7,778,541 | 471,488 |
| Increase in net assets from operations | $8,765,241 | $859,349 | |
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions | ($458,337) | ($715,136) | |
| TRANSACTIONS IN FUND SHARES | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | VALUE | SHARES | VALUE | ||
| Shares sold | 1,163,081 | $17,567,794 | 930,416 | $10,935,135 | |
| Shares reinvested | 31,814 | 444,437 | 55,993 | 689,274 | |
| Shares redeemed | + | (515,554) | (7,751,420) | (521,878) | (6,024,879) |
| Net transactions in fund shares | 679,341 | $10,260,811 | 464,531 | $5,599,530 | |
| SHARES OUTSTANDING AND NET ASSETS | |||||
| 11/1/20-10/31/21 | 11/1/19-10/31/20 | ||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | ||
| Beginning of period | 1,761,437 | $21,508,911 | 1,296,906 | $15,765,168 | |
| Total increase | + | 679,341 | 18,567,715 | 464,531 | 5,743,743 |
| End of period | 2,440,778 | $40,076,626 | 1,761,437 | $21,508,911 | |
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Schwab Target 2065 Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| 2/26/21 1– 10/31/21 | ||||||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $10.00 | |||||
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)2 | 0.03 | |||||
| Net realized and unrealized gains (losses) | 1.30 | |||||
| Total from investment operations | 1.33 | |||||
| Net asset value at end of period | $11.33 | |||||
| Total return | 13.30% 3 | |||||
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Net operating expenses4 | 0.00% 5 | |||||
| Gross operating expenses4 | 1.90% 5 | |||||
| Net investment income (loss)4 | 0.35% 5 | |||||
| Portfolio turnover rate | 34% 3 | |||||
| Net assets, end of period (x 1,000,000) | $4 | |||||
| 1 | Commencement of operations. |
| 2 | Calculated based on the average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Ratio excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
| 5 | Annualized. |
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Schwab Target 2065 Fund
Portfolio Holdings as of October 31, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| AFFILIATED UNDERLYING FUNDS 80.2% OF NET ASSETS | ||
| U.S. Stocks 48.0% | ||
| Large-Cap 40.7% | ||
| Laudus U.S. Large Cap Growth Fund * | 10,633 | 375,362 |
| Schwab Core Equity Fund | 12,392 | 362,105 |
| Schwab Fundamental US Large Company Index Fund | 7,167 | 166,209 |
| Schwab S&P 500 Index Fund | 12,988 | 924,860 |
| 1,828,536 | ||
| Mid-Cap 1.7% | ||
| Schwab U.S. Mid-Cap Index Fund | 1,199 | 77,292 |
| Small-Cap 5.6% | ||
| Schwab Small-Cap Equity Fund | 10,524 | 250,158 |
| 2,155,986 | ||
| International Stocks 26.2% | ||
| Developed Markets 26.2% | ||
| Laudus International MarketMasters Fund * | 21,084 | 645,158 |
| Schwab International Core Equity Fund | 46,025 | 531,592 |
| 1,176,750 | ||
| Real Estate 5.0% | ||
| Global Real Estate 5.0% | ||
| Schwab Global Real Estate Fund | 27,629 | 223,516 |
| Fixed Income 1.0% | ||
| Intermediate-Term Bond 0.7% | ||
| Schwab U.S. Aggregate Bond Index Fund | 2,939 | 30,682 |
| Short-Term Bond 0.3% | ||
| Schwab Short-Term Bond Index Fund | 1,474 | 15,020 |
| 45,702 | ||
| Total Affiliated Underlying Funds (Cost $3,379,640) | 3,601,954 | |
| UNAFFILIATED UNDERLYING FUNDS 19.1% OF NET ASSETS | ||
| U.S. Stocks 11.1% | ||
| Large-Cap 8.7% | ||
| ClearBridge Large Cap Growth Fund, Class IS | 1,105 | 90,303 |
| Dodge & Cox Stock Fund | 1,214 | 299,287 |
| 389,590 | ||
| SECURITY | NUMBER OF SHARES | VALUE ($) |
| Small-Cap 2.4% | ||
| ClearBridge Small Cap Growth Fund, Class IS * | 1,835 | 110,555 |
| 500,145 | ||
| International Stocks 5.5% | ||
| Emerging Markets 5.5% | ||
| Goldman Sachs Emerging Markets Equity Insights Fund, Institutional Class | 20,686 | 245,129 |
| Fixed Income 2.5% | ||
| Intermediate-Term Bond 2.1% | ||
| Baird Aggregate Bond Fund, Institutional Class | 793 | 9,053 |
| Loomis Sayles Investment Grade Bond Fund, Class Y | 4,172 | 47,816 |
| Metropolitan West Total Return Bond Fund, Class I | 3,305 | 36,160 |
| 93,029 | ||
| International Bond 0.4% | ||
| PIMCO International Bond Fund (U.S. Dollar-Hedged), Institutional Class | 1,778 | 19,091 |
| 112,120 | ||
| Total Unaffiliated Underlying Funds (Cost $836,822) | 857,394 | |
| ISSUER | FACE AMOUNT ($) | VALUE ($) |
| SHORT-TERM INVESTMENTS 0.9% OF NET ASSETS | ||
| Time Deposits 0.9% | ||
| DnB Bank ASA | ||
| 0.01%, 11/01/21 (a) | 40,394 | 40,394 |
| Total Short-Term Investments (Cost $40,394) | 40,394 | |
| Total Investments in Securities (Cost $4,256,856) | 4,499,742 | |
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. |
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Schwab Target 2065 Fund
Portfolio Holdings as of October 31, 2021 (continued)
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2021:
| VALUE AT 2/26/21(a) | PURCHASES | SALES | REALIZED GAINS (LOSSES) | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | VALUE AT 10/31/21 | BALANCE OF SHARES HELD AT 10/31/21 | DISTRIBUTIONS RECEIVED* | |
| AFFILIATED UNDERLYING FUNDS 80.2% OF NET ASSETS | ||||||||
| U.S. Stocks 48.0% | ||||||||
| Large-Cap 40.7% | ||||||||
| Laudus U.S. Large Cap Growth Fund | $— | $348,198 | ($11,462) | $120 | $38,506 | $375,362 | 10,633 | $— |
| Schwab Core Equity Fund | — | 350,272 | (17,164) | 199 | 28,798 | 362,105 | 12,392 | — |
| Schwab Fundamental US Large Company Index Fund | — | 156,062 | — | — | 10,147 | 166,209 | 7,167 | — |
| Schwab S&P 500 Index Fund | — | 943,549 | (102,841) | 541 | 83,611 | 924,860 | 12,988 | — |
| Schwab U.S. Large-Cap ETF | — | 341,250 | (338,083) | (3,167) | — | — | — | — |
| 1,828,536 | ||||||||
| Mid-Cap 1.7% | ||||||||
| Schwab U.S. Mid-Cap Index Fund | — | 71,704 | — | — | 5,588 | 77,292 | 1,199 | — |
| Small-Cap 5.6% | ||||||||
| Schwab Small-Cap Equity Fund | — | 248,124 | (12,617) | 84 | 14,567 | 250,158 | 10,524 | — |
| Schwab U.S. Small-Cap ETF | — | 51,887 | (51,638) | (249) | — | — | — | — |
| 250,158 | ||||||||
| 2,155,986 | ||||||||
| International Stocks 26.2% | ||||||||
| Developed Markets 26.2% | ||||||||
| Laudus International MarketMasters Fund | — | 664,385 | (40,090) | (67) | 20,930 | 645,158 | 21,084 | — |
| Schwab International Core Equity Fund | — | 559,248 | (38,330) | (142) | 10,816 | 531,592 | 46,025 | — |
| Schwab International Equity ETF | — | 173,354 | (173,063) | (291) | — | — | — | — |
| 1,176,750 | ||||||||
| Emerging Markets 0.0% | ||||||||
| Schwab Emerging Markets Equity ETF | — | 30,976 | (30,976) | — | — | — | — | — |
| 1,176,750 | ||||||||
| Real Estate 5.0% | ||||||||
| Global Real Estate 5.0% | ||||||||
| Schwab Global Real Estate Fund | — | 221,392 | (7,409) | (81) | 9,614 | 223,516 | 27,629 | 3,405 |
| Fixed Income 1.0% | ||||||||
| Intermediate-Term Bond 0.7% | ||||||||
| Schwab U.S. Aggregate Bond Index Fund | — | 30,824 | — | — | (142) | 30,682 | 2,939 | 244 |
| Short-Term Bond 0.3% | ||||||||
| Schwab Short-Term Bond Index Fund | — | 15,141 | — | — | (121) | 15,020 | 1,474 | 38 |
| 45,702 | ||||||||
| Total Affiliated Underlying Funds | $— | $4,206,366 | ($823,673) | ($3,053) | $222,314 | $3,601,954 | $3,687 | |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
| (a) | Commencement of operations. |
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Schwab Target 2065 Fund
Portfolio Holdings as of October 31, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of October 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 | ||||
| Affiliated Underlying Funds1 | $3,601,954 | $— | $— | $3,601,954 |
| Unaffiliated Underlying Funds1 | 857,394 | — | — | 857,394 |
| Short-Term Investments1 | — | 40,394 | — | 40,394 |
| Total | $4,459,348 | $40,394 | $— | $4,499,742 |
| 1 | As categorized in the Portfolio Holdings. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Target 2065 Fund
Statement of Assets and Liabilities
As of October 31, 2021
| Assets | ||
| Investments in securities, at value - affiliated (cost $3,379,640) | $3,601,954 | |
| Investments in securities, at value - unaffiliated (cost $877,216) | 897,788 | |
| Receivables: | ||
| Fund shares sold | 6,931 | |
| Due from investment adviser | 4,059 | |
| Dividends | + | 125 |
| Total assets | 4,510,857 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 84 | |
| Accrued expenses | + | 21,638 |
| Total liabilities | 21,722 | |
| Net assets | $4,489,135 | |
| Net Assets by Source | ||
| Capital received from investors | $4,242,783 | |
| Total distributable earnings | + | 246,352 |
| Net assets | $4,489,135 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $4,489,135 | 396,121 | $11.33 | ||
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Schwab Target 2065 Fund
Statement of Operations
| For the period February 26, 2021* through October 31, 2021 | ||
| Investment Income | ||
| Dividends received from securities - affiliated | $3,687 | |
| Dividends received from securities - unaffiliated | + | 2,194 |
| Total investment income | 5,881 | |
| Expenses | ||
| Professional fees | 10,754 | |
| Portfolio accounting fees | 8,127 | |
| Independent trustees’ fees | 5,395 | |
| Custodian fees | 2,594 | |
| Registration fees | 1,408 | |
| Shareholder reports | 1,045 | |
| Transfer agent fees | 403 | |
| Other expenses | + | 2,286 |
| Total expenses | 32,012 | |
| Expense reduction by investment adviser | – | 32,012 |
| Net expenses | – | — |
| Net investment income | 5,881 | |
| Realized and Unrealized Gains (Losses) | ||
| Realized capital gain distributions received from underlying funds - unaffiliated | 380 | |
| Net realized losses on sales of securities - affiliated | (3,053) | |
| Net realized gains on sales of securities - unaffiliated | + | 258 |
| Net realized losses | (2,415) | |
| Net change in unrealized appreciation (depreciation) on securities - affiliated | 222,314 | |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated | + | 20,572 |
| Net change in unrealized appreciation (depreciation) | + | 242,886 |
| Net realized and unrealized gains | 240,471 | |
| Increase in net assets resulting from operations | $246,352 | |
| * | Commencement of operations. |
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Schwab Target 2065 Fund
Statement of Changes in Net Assets
For the current period only
| OPERATIONS | ||
| 2/26/21*-10/31/21 | ||
| Net investment income | 5,881 | |
| Net realized losses | (2,415) | |
| Net change in unrealized appreciation (depreciation) | + | 242,886 |
| Increase in net assets from operations | $246,352 | |
| TRANSACTIONS IN FUND SHARES | |||
| 2/26/21*-10/31/21 | |||
| SHARES | VALUE | ||
| Shares sold | $438,998 | $4,713,650 | |
| Shares redeemed | + | (42,877) | (470,867) |
| Net transactions in fund shares | 396,121 | $4,242,783 | |
| SHARES OUTSTANDING AND NET ASSETS | |||
| 2/26/21*-10/31/21 | |||
| SHARES | NET ASSETS | ||
| Beginning of period | — | — | |
| Total increase or decrease | + | 396,121 | 4,489,135 |
| End of period | 396,121 | $4,489,135 | |
| * | Commencement of operations. |
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Schwab Target Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) | |
| Schwab Target 2010 Fund | Schwab Dividend Equity Fund |
| Schwab Target 2015 Fund | Schwab Large-Cap Growth Fund |
| Schwab Target 2020 Fund | Schwab Small-Cap Equity Fund |
| Schwab Target 2025 Fund | Schwab Health Care Fund |
| Schwab Target 2030 Fund | Schwab International Core Equity Fund |
| Schwab Target 2035 Fund | Schwab Fundamental US Large Company Index Fund |
| Schwab Target 2040 Fund | Schwab Fundamental US Small Company Index Fund |
| Schwab Target 2045 Fund | Schwab Fundamental International Large Company Index Fund |
| Schwab Target 2050 Fund | Schwab Fundamental International Small Company Index Fund |
| Schwab Target 2055 Fund | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Schwab Target 2060 Fund | Schwab Fundamental Global Real Estate Index Fund |
| Schwab Target 2065 Fund | Schwab Target 2010 Index Fund |
| Schwab S&P 500 Index Fund | Schwab Target 2015 Index Fund |
| Schwab Small-Cap Index Fund® | Schwab Target 2020 Index Fund |
| Schwab Total Stock Market Index Fund® | Schwab Target 2025 Index Fund |
| Schwab U.S. Large-Cap Growth Index Fund | Schwab Target 2030 Index Fund |
| Schwab U.S. Large-Cap Value Index Fund | Schwab Target 2035 Index Fund |
| Schwab U.S. Mid-Cap Index Fund | Schwab Target 2040 Index Fund |
| Schwab International Index Fund® | Schwab Target 2045 Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Target 2050 Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Target 2055 Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Target 2060 Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Target 2065 Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Monthly Income Fund - Moderate Payout |
| Schwab Balanced Fund | Schwab Monthly Income Fund - Enhanced Payout |
| Schwab Core Equity Fund | Schwab Monthly Income Fund - Maximum Payout |
The Schwab Target Funds are "funds of funds." Each of the funds seeks to achieve its investment objective by investing in a combination of other affiliated Schwab and/or Laudus Funds and other unaffiliated, third-party mutual funds, (all such mutual funds referred to as “underlying funds”), in accordance with its target portfolio allocation. Each fund may also invest directly in equity and fixed-income securities, exchange-traded funds (ETFs), and cash and cash equivalents, including money market securities.
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds’ Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
The Schwab Target 2065 Fund commenced operations on February 26, 2021.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (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 financial statements of the funds should be read in conjunction with the underlying funds’ financial statements. For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the U.S. Securities and Exchange Commission (SEC) and are available on the SEC’s website at www.sec.gov.
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Schwab Target Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes.
• 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 each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities and mutual funds. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the 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 securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations.
• Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets,
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Schwab Target Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 31, 2021 are disclosed in the Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Cash Management Transactions: The funds may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances. Excess cash invested with deposit institutions domiciled outside of the U.S., as with any offshore deposit, may be subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. The funds bear the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date). Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(e) Expenses:
Expenses that are specific to the fund are charged directly to the fund. Expenses that are common to more than one fund in the trusts generally are allocated among those funds in proportion to their average daily net assets. The fund bears its share of the acquired fund fees and expenses of the underlying funds, which are indirect expenses incurred by the fund through its investments in the underlying funds. Such expenses are reflected in the net asset values of the underlying funds.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(g) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
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Schwab Target Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(i) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The funds are subject to the risk that the selection of the underlying funds and the allocation of a fund’s assets among the various asset classes and market segments may cause the fund to underperform other funds with a similar investment objective.
Conflicts of Interest Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds and ETFs may create a conflict of interest because the fees paid to it and its affiliates by some underlying funds are higher than the fees paid by other underlying funds. The investment adviser also may have an incentive to select an affiliated underlying fund for other reasons, including to increase assets under management or to support new investment strategies. In addition, other conflicts of interest may exist where the best interests of the affiliated underlying fund may not be aligned with those of a fund. However, the investment adviser is a fiduciary to each fund and is legally obligated to act in each fund’s best interests when selecting underlying funds.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. 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 a fund will fluctuate, which means that an investor could lose money over short or long periods.
Direct Investment Risk. The funds may invest directly in cash, cash equivalents and equity and fixed-income securities, including money market securities, to maintain their allocations. A fund’s direct investment in these securities is subject to the same or similar risks as an underlying fund’s investment in the same securities.
Underlying Fund Investment Risk. Before investing in the funds, investors should assess the risks associated with the underlying funds in which the funds may invest, which include any combination of the risks described below.
• Investment Risk. The funds may experience losses with respect to their investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective.
• Management Risk. Generally, the underlying funds are actively managed mutual funds. Any actively managed mutual fund is subject to the risk that its investment adviser (or sub-adviser(s)) will make poor security selections. An underlying fund’s adviser applies its own investment techniques and risk analyses in making investment decisions for the underlying fund, but there can be no guarantee that they will produce the desired results.
• Fixed-Income Risk. Interest rates rise and fall over time, which will affect an underlying fund’s yield and share price. A change in a central bank’s monetary policy or economic conditions, among other things, may result in a change in interest rates. A rise in interest rates could cause an underlying fund’s share price to fall. The credit quality of a portfolio investment could also cause an underlying fund’s share price to fall. An underlying fund could lose money if the issuer or guarantor of a portfolio investment or the counterparty to a derivatives contract fails to make timely principal or interest payments or otherwise honor its obligations. Fixed-income securities may be paid off earlier or later than expected. Either situation could cause an underlying fund to hold securities paying lower-than-market rates of interest, which could hurt an underlying fund’s yield or share price. Below investment-grade bonds (junk bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturns than investment-grade securities.
• Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
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Financial Notes (continued)
3. Risk Factors (continued):
• 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, an underlying fund’s performance could be impacted.
• Money Market Fund Risk. The funds may invest in underlying money market funds that either seek to maintain a stable $1.00 net asset value (“stable share price money market funds”) or that have a share price that fluctuates (“variable share price money market funds”). Although an underlying stable share price money market fund seeks to maintain a stable $1.00 net asset value, it is possible to lose money by investing in such a money market fund. Because the share price of an underlying variable share price money market fund will fluctuate, when a fund sells the shares it owns they may be worth more or less than what the fund originally paid for them. In addition, neither type of money market fund is designed to offer capital appreciation. Certain underlying money market funds may impose a fee upon the sale of shares or may temporarily suspend the ability to sell shares if such fund’s liquidity falls below required minimums.
• ETF Risk. When an underlying fund invests in an ETF, it will bear a proportionate share of the ETF’s expenses. In addition, lack of liquidity in the market for an ETF’s shares can result in its value being more volatile than the underlying portfolio of securities.
• Foreign Investment Risk. An underlying 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 an underlying fund’s investments, and could impair the underlying 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.
• 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 recording 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 an underlying 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.
• Derivatives Risk. An underlying fund may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right, 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. A credit default swap is an agreement in which the seller agrees to make a payment to the buyer in the event of a specified credit event in exchange for a fixed payment or series of fixed payments.
An underlying fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as leverage risk, liquidity risk, market risk and management risk, are discussed elsewhere in this section. An underlying fund’s use of derivatives is also subject to lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause an underlying fund to realize higher amounts of short-term capital gains. An underlying fund’s use of derivatives could reduce the underlying fund’s performance, increase its volatility, and could cause the underlying fund to lose more than the initial amount invested. The use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) by an underlying fund could cause a fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.
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Financial Notes (continued)
3. Risk Factors (continued):
• Leverage Risk. Certain underlying fund transactions, such as derivatives transactions, short sales, reverse repurchase agreements, and mortgage dollar rolls, may give rise to a form of leverage and may expose an underlying fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of an underlying fund’s portfolio securities, which means even a small amount of leverage can have a disproportionately large impact on the underlying fund.
• Liquidity Risk. An underlying fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the underlying fund may have to sell them at a loss.
• Portfolio Turnover Risk. Certain of the underlying funds may buy and sell portfolio securities actively. If they do, their portfolio turnover rate and transaction costs will rise, which may lower the underlying fund’s performance and may increase the likelihood of capital gains distributions.
• Securities Lending Risk. An underlying fund may lend its portfolio securities to brokers, dealers, and other financial institutions. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
Charles Schwab Investment Management, Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement between it and the trust. The investment adviser does not receive a fee for the services it performs for the funds. However, the investment adviser is entitled to receive an annual management fee from each of the affiliated Schwab Funds and/or Laudus Funds that serve as underlying funds.
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc., a broker-dealer affiliate of the investment adviser (together, service providers), of certain shareholder services to the current shareholders of the funds. The funds are not subject to any fee under the Plan.
Expense Limitation
The investment adviser and its affiliates have agreed with the funds, for so long as the investment adviser serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses to 0.00%.
The agreement to limit the funds’ total expenses charged is limited to each fund’s direct operating expenses and, therefore, does not apply to acquired fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Investments in Affiliates
The funds may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the funds may invest in other related funds. As of October 31, 2021, each Schwab Target Fund’s ownership percentages of other related funds’ shares are:
| UNDERLYING FUNDS | SCHWAB TARGET 2010 FUND | SCHWAB TARGET 2015 FUND | SCHWAB TARGET 2020 FUND | SCHWAB TARGET 2025 FUND | SCHWAB TARGET 2030 FUND | SCHWAB TARGET 2035 FUND | SCHWAB TARGET 2040 FUND | SCHWAB TARGET 2045 FUND | SCHWAB TARGET 2050 FUND | SCHWAB TARGET 2055 FUND | SCHWAB TARGET 2060 FUND | SCHWAB TARGET 2065 FUND |
| Laudus International MarketMasters Fund | 0.3% | 0.4% | 2.7% | 4.4% | 8.9% | 5.4% | 11.6% | 2.5% | 2.5% | 1.7% | 0.4% | 0.0%* |
| Laudus U.S. Large Cap Growth Fund | —% | —% | —% | 0.2% | 0.7% | 0.6% | 1.7% | 0.4% | 0.5% | 0.3% | 0.1% | 0.0%* |
| Schwab Core Equity Fund | 0.1% | 0.1% | 0.8% | 1.7% | 3.8% | 2.3% | 4.9% | 1.1% | 1.1% | 0.7% | 0.2% | 0.0%* |
| Schwab Fundamental US Large Company Index Fund | 0.0%* | 0.0%* | 0.0%* | 0.0%* | 0.1% | 0.1% | 0.3% | 0.1% | 0.1% | 0.1% | 0.0%* | 0.0%* |
| Schwab Global Real Estate Fund | 0.4% | 0.5% | 3.7% | 5.9% | 11.8% | 7.1% | 15.7% | 3.5% | 3.5% | 2.4% | 0.6% | 0.1% |
| Schwab International Core Equity Fund | 0.3% | 0.3% | 2.6% | 4.5% | 10.5% | 6.0% | 13.7% | 3.3% | 3.3% | 2.1% | 0.6% | 0.1% |
| Schwab S&P 500 Index Fund | 0.0%* | 0.0%* | 0.1% | 0.2% | 0.3% | 0.2% | 0.4% | 0.1% | 0.1% | 0.0%* | 0.0%* | 0.0%* |
| Schwab Short-Term Bond Index Fund | 0.3% | 0.3% | 2.1% | 1.9% | 2.3% | 0.8% | 1.2% | 0.1% | 0.1% | 0.0%* | 0.0%* | 0.0%* |
| Schwab Small-Cap Equity Fund | 0.1% | 0.2% | 1.2% | 2.3% | 5.4% | 3.4% | 8.1% | 1.8% | 1.9% | 1.3% | 0.3% | 0.0%* |
| Schwab Treasury Inflation Protected Securities Index Fund | 0.2% | 0.2% | 1.3% | 0.7% | 0.3% | —% | —% | —% | —% | —% | —% | —% |
| Schwab U.S. Aggregate Bond Index Fund | 0.3% | 0.4% | 2.3% | 2.1% | 2.7% | 1.0% | 1.4% | 0.2% | 0.1% | 0.0%* | 0.0%* | 0.0%* |
| Schwab U.S. Mid Cap Index Fund | 0.1% | 0.1% | 0.5% | 0.8% | 1.7% | 1.0% | 2.1% | 0.5% | 0.4% | 0.3% | 0.1% | 0.0%* |
| Schwab Variable Share Price Money Fund, Ultra Shares | 0.1% | 0.1% | 0.6% | 0.5% | 0.6% | 0.2% | 0.2% | 0.0%* | 0.0%* | —% | —% | —% |
| * | Less than 0.05% |
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
5. Board of Trustees:
The Board may include people who are officers and/or directors of the investment adviser or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trusts were in compliance with these limitations throughout the report period. The funds did not pay any of these interested persons for their services as trustees, but they did pay non-interested persons (independent trustees), as noted on each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
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Financial Notes (continued)
| 6. Borrowing from Banks: |
During the period, the funds were participants with other funds in the Fund Complex in a joint, syndicated, committed $850 million line of credit (the Syndicated Credit Facility), which matured on September 30, 2021. On September 30, 2021, the Syndicated Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Syndicated Credit Facility, in addition to CSIM paying the interest charged on any borrowings by a fund, CSIM paid a commitment fee of 0.15% per annum on the funds’ proportionate share of the unused portion of the Syndicated Credit Facility.
During the period, the funds were participants 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, which matured on September 30, 2021. On September 30, 2021, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 29, 2022. Under the terms of the Uncommitted Credit Facility, CSIM pays interest on the amount a fund borrows. There were no borrowings from either line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
7. Purchases and Sales of Investment Securities:
For the period ended October 31, 2021, purchases and sales of securities (excluding short-term obligations) were as follows:
| PURCHASES OF SECURITIES | SALES OF SECURITIES | |
| Schwab Target 2010 Fund | $16,630,428 | $12,703,276 |
| Schwab Target 2015 Fund | 10,900,029 | 15,209,278 |
| Schwab Target 2020 Fund | 50,641,203 | 103,922,137 |
| Schwab Target 2025 Fund | 100,857,309 | 104,806,159 |
| Schwab Target 2030 Fund | 154,617,308 | 153,754,496 |
| Schwab Target 2035 Fund | 98,329,752 | 78,546,707 |
| Schwab Target 2040 Fund | 161,037,059 | 173,482,903 |
| Schwab Target 2045 Fund | 47,746,515 | 27,236,521 |
| Schwab Target 2050 Fund | 48,925,738 | 41,233,935 |
| Schwab Target 2055 Fund | 30,166,139 | 14,841,559 |
| Schwab Target 2060 Fund | 13,959,846 | 3,327,178 |
| Schwab Target 2065 Fund | 5,076,576 | 857,329 |
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Financial Notes (continued)
| 8. Federal Income Taxes: |
As of October 31, 2021, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:
| TAX COST | GROSS UNREALIZED APPRECIATION | GROSS UNREALIZED DEPRECIATION | NET UNREALIZED APPRECIATION (DEPRECIATION) | |
| Schwab Target 2010 Fund | $54,202,827 | $11,576,286 | ($366,567) | $11,209,719 |
| Schwab Target 2015 Fund | 63,728,563 | 18,134,620 | (542,902) | 17,591,718 |
| Schwab Target 2020 Fund | 406,293,457 | 125,172,044 | (2,428,651) | 122,743,393 |
| Schwab Target 2025 Fund | 508,372,891 | 156,721,216 | (3,717,151) | 153,004,065 |
| Schwab Target 2030 Fund | 825,573,394 | 346,215,320 | (6,887,035) | 339,328,285 |
| Schwab Target 2035 Fund | 438,293,670 | 176,049,706 | (2,583,181) | 173,466,525 |
| Schwab Target 2040 Fund | 816,533,844 | 425,644,764 | (8,272,925) | 417,371,839 |
| Schwab Target 2045 Fund | 186,549,119 | 66,436,368 | (585,455) | 65,850,913 |
| Schwab Target 2050 Fund | 179,009,851 | 66,683,855 | (673,239) | 66,010,616 |
| Schwab Target 2055 Fund | 116,239,136 | 42,885,170 | (700,475) | 42,184,695 |
| Schwab Target 2060 Fund | 31,599,622 | 8,749,372 | (253,449) | 8,495,923 |
| Schwab Target 2065 Fund | 4,257,483 | 257,744 | (15,485) | 242,259 |
As of October 31, 2021, the components of distributable earnings on a tax basis were as follows:
| UNDISTRIBUTED ORDINARY INCOME | UNDISTRIBUTED LONG-TERM CAPITAL GAINS | NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS | CAPITAL LOSS CARRYFORWARDS | TOTAL | |
| Schwab Target 2010 Fund | $637,140 | $1,739,443 | $11,209,719 | $— | $13,586,302 |
| Schwab Target 2015 Fund | 835,811 | 3,437,736 | 17,591,718 | — | 21,865,265 |
| Schwab Target 2020 Fund | 5,506,414 | 25,553,713 | 122,743,393 | — | 153,803,520 |
| Schwab Target 2025 Fund | 5,928,180 | 24,333,574 | 153,004,065 | — | 183,265,819 |
| Schwab Target 2030 Fund | 8,586,443 | 46,508,680 | 339,328,285 | — | 394,423,408 |
| Schwab Target 2035 Fund | 3,963,724 | 17,830,495 | 173,466,525 | — | 195,260,744 |
| Schwab Target 2040 Fund | 6,975,431 | 46,770,097 | 417,371,839 | — | 471,117,367 |
| Schwab Target 2045 Fund | 1,052,953 | 5,467,882 | 65,850,913 | — | 72,371,748 |
| Schwab Target 2050 Fund | 1,161,532 | 6,627,266 | 66,010,616 | — | 73,799,414 |
| Schwab Target 2055 Fund | 546,377 | 3,427,278 | 42,184,695 | — | 46,158,350 |
| Schwab Target 2060 Fund | 144,363 | 643,532 | 8,495,923 | — | 9,283,818 |
| Schwab Target 2065 Fund | 5,900 | — | 242,259 | (1,807) | 246,352 |
The primary difference between book basis and tax basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales. The tax cost of the funds’ investments, disclosed above, have been adjusted from their book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.
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Financial Notes (continued)
8. Federal Income Taxes (continued):
Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2021, the fund had capital loss carryforwards available as follows:
| NO EXPIRATION | |
| Schwab Target 2010 Fund | $— |
| Schwab Target 2015 Fund | — |
| Schwab Target 2020 Fund | — |
| Schwab Target 2025 Fund | — |
| Schwab Target 2030 Fund | — |
| Schwab Target 2035 Fund | — |
| Schwab Target 2040 Fund | — |
| Schwab Target 2045 Fund | — |
| Schwab Target 2050 Fund | — |
| Schwab Target 2055 Fund | — |
| Schwab Target 2060 Fund | — |
| Schwab Target 2065 Fund | 1,807 |
The tax basis components of distributions paid during the current and prior fiscal years were as follows:
| CURRENT FISCAL YEAR END DISTRIBUTIONS | PRIOR FISCAL YEAR END DISTRIBUTIONS | |||
| ORDINARY INCOME | LONG-TERM CAPITAL GAINS | ORDINARY INCOME | LONG-TERM CAPITAL GAINS | |
| Schwab Target 2010 Fund | $1,158,878 | $385,205 | $1,314,831 | $1,204,227 |
| Schwab Target 2015 Fund | 1,603,533 | 1,864,193 | 2,018,665 | 2,170,460 |
| Schwab Target 2020 Fund | 10,442,930 | 10,256,763 | 13,636,822 | 16,329,586 |
| Schwab Target 2025 Fund | 10,641,524 | 7,269,075 | 13,898,587 | 17,306,186 |
| Schwab Target 2030 Fund | 16,741,235 | 16,944,271 | 23,515,128 | 41,149,887 |
| Schwab Target 2035 Fund | 7,639,008 | 7,482,792 | 10,709,488 | 19,394,717 |
| Schwab Target 2040 Fund | 14,499,604 | 21,950,959 | 21,322,805 | 54,339,154 |
| Schwab Target 2045 Fund | 2,368,978 | 2,594,038 | 3,301,292 | 5,698,235 |
| Schwab Target 2050 Fund | 2,230,995 | 2,674,047 | 3,187,945 | 4,958,508 |
| Schwab Target 2055 Fund | 1,270,190 | 1,507,964 | 1,817,735 | 3,151,691 |
| Schwab Target 2060 Fund | 239,872 | 218,465 | 302,277 | 412,859 |
| Schwab Target 2065 Fund | — | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations.
As of October 31, 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 funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the fiscal year ended October 31, 2021, the funds did not incur any interest or penalties.
9. 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Schwab Capital Trust and Shareholders of Schwab Target 2010 Fund, Schwab Target 2015 Fund, Schwab Target 2020 Fund, Schwab Target 2025 Fund, Schwab Target 2030 Fund, Schwab Target 2035 Fund, Schwab Target 2040 Fund, Schwab Target 2045 Fund, Schwab Target 2050 Fund, Schwab Target 2055 Fund, Schwab Target 2060 Fund, and Schwab Target 2065 Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities, including the portfolio holdings, of Schwab Target 2010 Fund, Schwab Target 2015 Fund, Schwab Target 2020 Fund, Schwab Target 2025 Fund, Schwab Target 2030 Fund, Schwab Target 2035 Fund, Schwab Target 2040 Fund, Schwab Target 2045 Fund, Schwab Target 2050 Fund, Schwab Target 2055 Fund, Schwab Target 2060 Fund, and Schwab Target 2065 Fund (the “Funds”), twelve of the funds constituting Schwab Capital Trust, as of October 31, 2021, the related statements of operations for the year then ended, the related statements of changes in net assets and the financial highlights for the two years in the period then ended (excluding Schwab Target 2065 Fund); the related statement of operations, statement of changes in net assets, and the financial highlights for the period from February 26, 2021 (commencement of operations) through October 31, 2021 for Schwab Target 2065 Fund; and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds (excluding Schwab Target 2065 Fund) as of October 31, 2021, and the results of their operations, the changes in their net assets, and the financial highlights for the year then ended in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of Schwab Target 2065 Fund as of October 31, 2021, and the results of its operations, changes in net assets, and financial highlights for the period from February 26, 2021 (commencement of operations) through October 31, 2021 in conformity with accounting principles generally accepted in the United States of America. For each of the Funds (excluding Schwab Target 2065 Fund), the financial highlights for each of the three years in the period ended October 31, 2019 were audited by other auditors, whose report, dated December 16, 2019, expressed an unqualified opinion on such financial highlights.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Denver, Colorado
December 16, 2021
Denver, Colorado
December 16, 2021
We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.
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Other Federal Tax Information (unaudited)
The funds may elect to pass on the benefits of the foreign tax credit to its shareholders for the fiscal year ended October 31, 2021, and the respective foreign source income on the funds as follows:
| FOREIGN TAX CREDIT | FOREIGN SOURCE INCOME | |
| Schwab Target 2010 Fund | $11,872 | $287,409 |
| Schwab Target 2015 Fund | 18,019 | 431,529 |
| Schwab Target 2020 Fund | 131,135 | 3,121,000 |
| Schwab Target 2025 Fund | 217,935 | 4,700,401 |
| Schwab Target 2030 Fund | 458,778 | 9,505,082 |
| Schwab Target 2035 Fund | 269,929 | 5,367,668 |
| Schwab Target 2040 Fund | 628,100 | 12,165,942 |
| Schwab Target 2045 Fund | 127,386 | 2,416,881 |
| Schwab Target 2050 Fund | 137,058 | 2,597,345 |
| Schwab Target 2055 Fund | 85,795 | 1,584,889 |
| Schwab Target 2060 Fund | 18,085 | 333,894 |
| Schwab Target 2065 Fund | — | — |
For corporate shareholders, the following percentage of the funds’ dividend distributions paid during the fiscal year ended October 31, 2021, qualify for the corporate dividends received deduction:
| PERCENTAGE | |
| Schwab Target 2010 Fund | 16.63 |
| Schwab Target 2015 Fund | 18.13 |
| Schwab Target 2020 Fund | 19.04 |
| Schwab Target 2025 Fund | 22.74 |
| Schwab Target 2030 Fund | 26.30 |
| Schwab Target 2035 Fund | 28.90 |
| Schwab Target 2040 Fund | 31.40 |
| Schwab Target 2045 Fund | 34.34 |
| Schwab Target 2050 Fund | 34.05 |
| Schwab Target 2055 Fund | 36.88 |
| Schwab Target 2060 Fund | 34.77 |
| Schwab Target 2065 Fund | — |
For the fiscal year ended October 31, 2021, the funds designated the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amount for use in preparing their 2021 income tax return.
| Schwab Target 2010 Fund | $305,635 |
| Schwab Target 2015 Fund | 466,632 |
| Schwab Target 2020 Fund | 3,277,417 |
| Schwab Target 2025 Fund | 4,136,469 |
| Schwab Target 2030 Fund | 7,672,433 |
| Schwab Target 2035 Fund | 3,905,971 |
| Schwab Target 2040 Fund | 8,166,816 |
| Schwab Target 2045 Fund | 1,457,330 |
| Schwab Target 2050 Fund | 1,370,748 |
| Schwab Target 2055 Fund | 841,686 |
| Schwab Target 2060 Fund | 149,597 |
| Schwab Target 2065 Fund | — |
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Other Federal Tax Information (unaudited) (continued)
Under section 852(b)(3)(C) of the Internal Revenue Code, the fund hereby designates the following amounts as long term capital gain dividends for the fiscal year ended October 31, 2021.
| Schwab Target 2010 Fund | $385,205 |
| Schwab Target 2015 Fund | 1,864,193 |
| Schwab Target 2020 Fund | 10,256,763 |
| Schwab Target 2025 Fund | 7,269,075 |
| Schwab Target 2030 Fund | 16,944,271 |
| Schwab Target 2035 Fund | 7,482,792 |
| Schwab Target 2040 Fund | 21,950,959 |
| Schwab Target 2045 Fund | 2,594,038 |
| Schwab Target 2050 Fund | 2,674,047 |
| Schwab Target 2055 Fund | 1,507,964 |
| Schwab Target 2060 Fund | 218,465 |
| Schwab Target 2065 Fund | — |
For the fiscal year ended October 31, 2021, the funds designate the following amounts as dividends eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amounts for use in preparing their 2021 income tax return.
| Schwab Target 2010 Fund | $11,029 |
| Schwab Target 2015 Fund | 16,894 |
| Schwab Target 2020 Fund | 122,837 |
| Schwab Target 2025 Fund | 195,100 |
| Schwab Target 2030 Fund | 436,297 |
| Schwab Target 2035 Fund | 264,337 |
| Schwab Target 2040 Fund | 629,303 |
| Schwab Target 2045 Fund | 138,684 |
| Schwab Target 2050 Fund | 135,070 |
| Schwab Target 2055 Fund | 97,993 |
| Schwab Target 2060 Fund | 20,098 |
| Schwab Target 2065 Fund | — |
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Liquidity Risk Management Program (Unaudited)
The Funds have adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Funds’ Board of Trustees (the “Board”) has designated the Funds’ investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.
Under the program, the investment adviser manages a Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. The program is reasonably designed to assess and manage a Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each Fund’s investments is supported by third-party liquidity assessment vendors.
The Funds’ Board reviewed a report at its meeting held on September 20, 2021 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2020, through May 31, 2021, which included individual Fund liquidity risk metrics. No significant liquidity events impacting any of the Funds were noted in the report. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing each Fund’s liquidity risk.
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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. (dba Schwab Asset Management) (the investment adviser) with respect to the existing funds in the Trust, including Schwab Target 2010 Fund, Schwab Target 2015 Fund, Schwab Target 2020 Fund, Schwab Target 2025 Fund, Schwab Target 2030 Fund, Schwab Target 2035 Fund, Schwab Target 2040 Fund, Schwab Target 2045 Fund, Schwab Target 2050 Fund, Schwab Target 2055 Fund, Schwab Target 2060 Fund and Schwab Target 2065 Fund (the Funds), and to review certain other agreements pursuant to which the investment adviser 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 the investment adviser, including information about the investment adviser’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 the investment adviser seeking certain relevant information. The responses by the investment adviser 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 Funds that the Board reviews during the course of each year, including information that relates to the Funds’ 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 the investment adviser 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 Funds at meetings held on May 12, 2021 and June 8, 2021, and approved the renewal of the Agreement with respect to the Funds 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 Funds 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 each Fund under the Agreement, including the resources of the investment adviser and its affiliates dedicated to the Funds; |
| 2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds and benchmark data; |
| 3. | each Fund’s expenses and how those expenses compared to those of certain other similar mutual funds; |
| 4. | the profitability of the investment adviser and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to each Fund, including both direct and indirect benefits accruing to the investment adviser and its affiliates; and |
| 5. | the extent to which economies of scale would be realized as each 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 the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, the investment adviser’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 the investment adviser relating to services and support provided with respect to each 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
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oversight. The Trustees also considered investments the investment adviser has made in its infrastructure, including modernizing the investment adviser’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 Funds and their shareholders. The Trustees considered the investment adviser’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 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 the investment adviser to the Funds and the resources of the investment adviser and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered each Fund’s performance in determining whether to renew the Agreement with respect to such Fund. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and applicable indices/benchmarks, in light of total return, portfolio yield (if applicable) and market trends, as well as in consideration of each 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 each Fund, the Trustees considered the risk profile for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees 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 Schwab Target 2040 Fund and Schwab Target 2045 Fund each 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 each Fund including that the underperformance was attributable, to a significant extent, to investment decisions by the investment adviser that were reasonable and consistent with each Fund’s investment objectives and policies and that the investment adviser 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 each Fund supported renewal of the Agreement with respect to such Fund.
Fund Expenses. With respect to each Fund’s expenses, the Trustees considered the rate of compensation called for by the Agreement and each Fund’s net operating expense ratio, in each case, in comparison to those of other similar mutual funds, such peer groups and comparisons having been selected and calculated by an independent provider of investment company data. The investment adviser reported to the Board, and the Board took into account, the risk assumed by the investment adviser in the development of the Funds and provision of services as well as the competitive marketplace for financial products. The Trustees considered the effects of the investment adviser’s and Schwab’s practice of waiving certain fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered the investment adviser’s contractual commitment to keep each Fund’s expense cap for so long as the investment adviser serves as the adviser to such Fund. The Trustees also considered fees charged by the investment adviser to 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 the investment adviser provides to these other accounts, as well as differences in the market for these types of accounts. The Trustees noted that shareholders of the Funds indirectly pay their pro rata share of the fees and expenses of the underlying funds in which the Funds invest. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of each Fund are reasonable and supported renewal of the Agreement with respect to such Fund.
Profitability. The Trustees considered the compensation flowing to the investment adviser 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 the investment adviser 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 Funds and other funds in the complex. The Trustees also considered any other benefits derived by the investment adviser from its relationship with the Funds, such as whether, by virtue of its management of the Funds, the investment adviser obtains investment information or other research resources that aid it in providing advisory services to other clients. Also, because each Fund invests a portion of its assets in other funds within the Schwab fund complex, the Trustees considered the indirect benefits to the investment adviser from such Fund’s investments in other underlying funds managed by the investment adviser. The Trustees considered whether the compensation and profitability with respect to the Funds
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under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds by the investment adviser and its affiliates. The Trustees noted that the investment adviser continues to invest substantial sums in its business in order to provide enhanced research capabilities, services and systems to benefit the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of the investment adviser with respect to each Fund is reasonable and supported renewal of the Agreement with respect to such 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 and whether those are passed along to a Fund’s shareholders through (i) the enhancement of services provided to the Funds in return for fees paid, including through investments by the investment adviser in the investment adviser’s infrastructure, including modernizing the investment adviser’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 Funds and their shareholders; (ii) graduated investment advisory fee schedules or unitary fee structures, fee waivers, or expense caps by the investment adviser 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 the investment adviser
has shared any economies of scale with the Funds by investing in the investment adviser’s infrastructure, as discussed above, over time and that the investment adviser’s internal costs of providing investment management, technology, administrative, legal and compliance services to the Funds continue to increase as a result of regulatory or other developments. The Trustees considered that the investment adviser and its affiliates may employ contractual expense caps to protect shareholders from high fees when fund assets are relatively small, for example, in the case of newer funds or funds with investment strategies that are from time to time out of favor, because, among other reasons, shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that each 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 Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of the services provided and the related expenses borne by the investment adviser 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 funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 103 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| Independent Trustees | |||
| Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
| Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 103 | 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. | 103 | 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). | 103 | 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. | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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). | 103 | 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 and Chief Executive Officer (Oct. 2008 – present) and President (Oct. 2008 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), 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 – Oct. 2021), Charles Schwab Investment Management, Inc. | 103 | 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. | 103 | 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 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.; 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 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.; 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 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.; 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 |
| 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., the investment adviser for the trusts in the Fund Complex, and is an employee 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. 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.
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.
Bloomberg US Government/Credit 1–5 Year Index An index that is a broad-based benchmark measuring the performance of U.S. dollar-denominated U.S. Treasury bonds, government related bonds (i.e., U.S. and non-U.S. agencies, sovereign, quasi-sovereign, supranational and local authority debt) and investment grade U.S. corporate bonds that have a remaining maturity of greater than or equal to one year and less than five years. 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 a remaining maturity greater than or equal to one year and less than five years. The index excludes certain types of securities, including, bonds with equity type features (e.g., warrants, convertibles and preferreds), tax-exempt municipal securities, inflation-linked bonds, floating rate issues, strips, private placements, U.S. dollar-denominated 25 and 50 par retail bonds, structured notes and pass-through certificates. The index is market capitalization weighted and the securities in the index are updated on the last business day of each month.
Bloomberg US Treasury Bills 1–3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $300 million or more of outstanding face value. It excludes zero-coupon STRIPS.
Bloomberg US Treasury Inflation-Linked Bond Index (Series-L) An index which includes all publicly-issued U.S. Treasury Inflation-Protected Securities (TIPS) that have at least one year remaining to maturity, are rated investment grade and have $500 million or more of outstanding face value. The TIPS in the index must be denominated in U.S. dollars and must be fixed-rate and non-convertible. The index is market capitalization weighted and the TIPS in the index are updated on the last business day of each month. TIPS are publicly issued, dollar denominated U.S. Government securities issued by the U.S. Treasury that have principal and interest payments linked to an official inflation measure (as measured by the Consumer Price Index, or CPI) and their payments are supported by the full faith and credit of the United States.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
Dow Jones U.S. Total Stock Market Index An index which includes all U.S. equity issues with readily available prices. The index is a float-adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
FTSE EPRA Nareit Global Index (Net) An index that provides a diverse representation of publicly traded equity real estate investment trusts (REITs) and listed property companies worldwide. The index constituents are free-float adjusted, and screened on liquidity, size and revenue. The index is comprised of countries in developed and emerging markets. The Net of Tax Index is calculated based on the maximum withholding tax rates applicable to dividends received by institutional investors who are not resident in the same country as the remitting company and who do not benefit from double taxation treaties.
FTSE non-US Dollar World Government Bond Index A market capitalization index that measures the total rate of return performance for the government bonds of 22 countries, excluding the U.S., with a remaining maturity of at least 1 year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
Russell 1000 Growth Index An index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000 Index An index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell 1000 Value Index An index that measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell Midcap Index An index that measures the performance of the mid-cap segment of the U.S. equity universe. The Russell Midcap Index is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
stock A share of ownership, or equity, in the issuing company.
Target 2010 Composite Index A custom blended index developed by Schwab Asset Management based on the 2010 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 21.1% S&P 500 Index, 0.7% Russell Midcap Index, 1.9% Russell 2000 Index, 9.1% MSCI EAFE Index (Net), 40.8% Bloomberg US Aggregate Bond Index, 1.7% FTSE EPRA Nareit Global Index (Net), 6.5% Bloomberg US Treasury Inflation-Linked Bond Index (Series-L), 2.3% Bloomberg Global Aggregate ex-US Hedged Index, 0.9% Bloomberg US Government/Credit Index, 10.2% Bloomberg US Government/Credit 1-5 Year Index, and 4.7% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2015 Composite Index A custom blended index developed by Schwab Asset Management based on the 2015 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index
was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 22.7% S&P 500 Index, 0.8% Russell Midcap Index, 2.0% Russell 2000 Index, 10.2% MSCI EAFE Index (Net), 38.8% Bloomberg US Aggregate Bond Index, 1.9% FTSE EPRA Nareit Global Index (Net), 6.2% Bloomberg US Treasury Inflation-Linked Bond Index (Series-L), 2.3% Bloomberg Global Aggregate ex-US Hedged Index, 1.2% Bloomberg US Government/Credit Index, 9.6% Bloomberg US Government/Credit 1-5 Year Index, and 4.3% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2020 Composite Index A custom blended index developed by Schwab Asset Management based on the 2020 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 23.6% S&P 500 Index, 0.8% Russell Midcap Index, 2.1% Russell 2000 Index, 11.1% MSCI EAFE Index (Net), 37.4% Bloomberg US Aggregate Bond Index, 2.0% FTSE EPRA Nareit Global Index (Net), 6.0% Bloomberg US Treasury Inflation-Linked Bond Index (Series-L), 2.4% Bloomberg Global Aggregate ex-US Hedged Index, 1.3% Bloomberg US Government/Credit Index, 9.1% Bloomberg US Government/Credit 1-5 Year Index, and 4.0% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2025 Composite Index A custom blended index developed by Schwab Asset Management based on the 2025 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000® Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 29.8% S&P 500 Index, 1.0% Russell Midcap Index, 3.1% Russell 2000 Index, 14.8% MSCI EAFE Index (Net), 29% Bloomberg US Aggregate Bond Index, 2.6% FTSE EPRA Nareit Global Index (Net), 0.6% MSCI Emerging Markets Index (Net), 2.9% Bloomberg US Treasury Inflation-Linked Bond Index (Series-L), 4.1% Bloomberg Global Aggregate ex-US Hedged Index, 2.2% Bloomberg US Government/Credit Index, 6.7% Bloomberg US Government/Credit 1-5 Year Index, and 3.2% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2030 Composite Index A custom blended index developed by Schwab Asset Management based on the 2030 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 35.2% S&P 500 Index, 1.2% Russell Midcap Index, 4.2% Russell 2000 Index, 17.9% MSCI EAFE Index (Net), 21.3% Bloomberg US Aggregate Bond Index,
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3.2% FTSE EPRA Nareit Global Index (Net), 1.5% MSCI Emerging Markets Index (Net), 0.8% Bloomberg US Treasury Inflation-Linked Bond Index (Series L), 4.7% Bloomberg Global Aggregate ex-US Hedged Index, 2.7% Bloomberg US Government/Credit Index, 4.8% Bloomberg US Government/Credit 1-5 Year Index, and 2.5% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2035 Composite Index A custom blended index developed by Schwab Asset Management based on the 2035 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 39.0% S&P 500 Index, 1.4% Russell Midcap Index, 5.1% Russell 2000 Index, 20.2% MSCI EAFE Index (Net), 16.0% Bloomberg US Aggregate Bond Index, 3.6% FTSE EPRA Nareit Global Index (Net), 2.3% MSCI Emerging Markets Index (Net), 4.1% Bloomberg Global Aggregate ex-US Hedged Index, 2.9% Bloomberg US Government/Credit Index, 3.4% Bloomberg US Government/Credit 1-5 Year Index, and 2.0% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2040 Composite Index A custom blended index developed by Schwab Asset Management based on the 2040 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 42.1% S&P 500 Index, 1.5% Russell Midcap Index, 5.9% Russell 2000 Index, 22.2% MSCI EAFE Index (Net), 11.5% Bloomberg US Aggregate Bond Index, 3.9% FTSE EPRA Nareit Global Index (Net), 3.2% MSCI Emerging Markets Index (Net), 3.1% Bloomberg Global Aggregate ex-US Hedged Index, 2.7% Bloomberg US Government/Credit Index, 2.4% Bloomberg US Government/Credit 1-5 Year Index, and 1.5% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2045 Composite Index A custom blended index developed by Schwab Asset Management based on the 2045 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 44.7% S&P 500 Index, 1.6% Russell Midcap Index, 6.6% Russell 2000 Index, 24.0% MSCI EAFE Index (Net), 7.5% Bloomberg US Aggregate Bond Index, 4.3% FTSE EPRA Nareit Global Index (Net), 4.2% MSCI Emerging Markets Index (Net), 2.1% Bloomberg Global Aggregate ex-US Hedged Index, 2.2% Bloomberg US Government/Credit Index, 1.6% Bloomberg
US Government/Credit 1-5 Year Index, and 1.1% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2050 Composite Index A custom blended index developed by Schwab Asset Management based on the 2050 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 46.3% S&P 500 Index, 1.7% Russell Midcap Index, 7.1% Russell 2000 Index, 25.1% MSCI EAFE Index (Net), 5.2% Bloomberg US Aggregate Bond Index, 4.5% FTSE EPRA Nareit Global Index (Net), 4.8% MSCI Emerging Markets Index (Net), 1.6% Bloomberg Global Aggregate ex-US Hedged Index, 1.8% Bloomberg US Government/Credit Index, 1.1% Bloomberg US Government/Credit 1-5 Year Index, and 0.9% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2055 Composite Index A custom blended index developed by Schwab Asset Management based on the 2055 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 47.2% S&P 500 Index, 1.7% Russell Midcap Index, 7.4% Russell 2000 Index, 25.8% MSCI EAFE Index (Net), 3.8% Bloomberg US Aggregate Bond Index, 4.6% FTSE EPRA Nareit Global Index (Net), 5.3% MSCI Emerging Markets Index (Net), 1.2% Bloomberg Global Aggregate ex-US Hedged Index, 1.5% Bloomberg US Government/Credit Index, 0.8% Bloomberg US Government/Credit 1-5 Year Index, and 0.7% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2060 Composite Index: A custom blended index developed by Schwab Asset Management based on the 2060 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective August 24, 2018, the FTSE non-US Dollar World Government Bond Index was replaced by the Bloomberg Global Aggregate ex-US Hedged Index. Effective February 1, 2021, the composite is derived using the following portion allocations: 48.1% S&P 500 Index, 1.7% Russell Midcap Index, 7.7% Russell 2000 Index, 26.5% MSCI EAFE Index (Net), 2.5% Bloomberg US Aggregate Bond Index, 4.7% FTSE EPRA Nareit Global Index (Net), 5.7% MSCI Emerging Markets Index (Net), 0.8% Bloomberg Global Aggregate ex-US Hedged Index, 1.1% Bloomberg US Government/Credit Index, 0.6% Bloomberg US Government/Credit 1-5 Year Index, and 0.5% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
Target 2065 Composite Index: A custom blended index developed by Schwab Asset Management based on the 2065 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective February 25, 2021, the composite is derived using the
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following portion allocations: 48.3% S&P 500 Index, 1.7% Russell Midcap Index, 7.8% Russell 2000 Index, 26.6% MSCI EAFE Index (Net), 2.3% Bloomberg US Aggregate Bond Index, 4.8% FTSE EPRA Nareit Global Index (Net), 5.8% MSCI Emerging Markets Index (Net), 0.8% Bloomberg Global Aggregate ex-US Hedged Index, 1.0% Bloomberg US Government/Credit Index, 0.5% Bloomberg US Government/Credit 1-5 Year Index, and 0.5% Bloomberg US Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2021. Percentages listed may not total to 100% due to rounding.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
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Schwab Asset Management
With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Schwab Asset 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., dba Schwab Asset Management
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds
1-877-824-5615
© 2021 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
Member SIPC®
Printed on recycled paper.
| ¹ | State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation. |
| ² | 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. |
Item 2: Code of Ethics.
| (a) | Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, and any other persons who perform a similar function, regardless of whether these individuals are employed by Registrant or a third party. |
| (c) | During the period covered by the report, no amendments were made to the provisions of this code of ethics. |
| (d) | During the period covered by the report, Registrant did not grant any waivers, including implicit waivers, from the provisions of this code of ethics. |
| (f)(1) | Registrant has filed this code of ethics as an exhibit pursuant to Item 13(a)(1) of Form N-CSR. |
Item 3: Audit Committee Financial Expert.
Registrant’s Board of Trustees has determined that Kiran M. Patel, Kimberly S. Patmore and J. Derek Penn, each currently serving on its audit, compliance and valuation committee, are each an “audit committee financial expert,” as such term is defined in Item 3 of Form N-CSR. Each member of Registrant’s audit, compliance and valuation committee is “independent” under the standards set forth in Item 3 of Form N-CSR.
The designation of each of Mr. Patel, Ms. Patmore and Mr. Penn as an “audit committee financial expert” pursuant to Item 3 of Form N-CSR does not (i) impose upon such individual any duties, obligations, or liability that are greater than the duties, obligations and liability imposed upon such individual as a member of Registrant’s audit, compliance and valuation committee or Board of Trustees in the absence of such designation; and (ii) affect the duties, obligations or liability of any other member of Registrant’s audit, compliance and valuation committee or Board of Trustees.
Item 4: Principal Accountant Fees and Services.
Registrant is composed of fifty-two operational series. Thirty-six series have a fiscal year-end of October 31, whose annual financial statements are reported in Item 1, three series have a fiscal year-end of December 31, twelve series have a fiscal year-end of March 31, and one series has a fiscal year-end of the last day of February. Principal accountant fees disclosed in Items 4(a)-(d) and 4(g) include fees billed for services rendered to the fifty-two operational series during 2021/2022 and the fifty-one operational series during 2020/2021, based on their respective 2021/2022 and 2020/2021 fiscal years, as applicable.
The following table presents fees billed by the principal accountant in each of the last two fiscal years for the services rendered to the Funds:
| (a) Audit Fees | (b) Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees | |||||||||||||||||||||||||||
| Fiscal Year 2021/2022 | Fiscal Year 2020/2021 | Fiscal Year 2021/2022 | Fiscal Year 2020/2021 | Fiscal Year 2021/2022 | Fiscal Year 2020/2021 | Fiscal Year 2021/2022 | Fiscal Year 2020/2021 | |||||||||||||||||||||||
| $ | 1,187,075 | $ | 1,203,450 | $ | 96,000 | $ | 90,000 | $ | 161,200 | $ | 158,100 | $ | 0 | $ | 0 | |||||||||||||||
| 1 | The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees. |
| 2 | The nature of the services includes tax compliance, tax advice and tax planning. |
| (e) (1) | Registrant’s audit, compliance and valuation committee does not have pre-approval policies and procedures as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
| (2) | There were no services described in each of paragraphs (b) through (d) above (including services required to be approved by Registrant’s audit, compliance and valuation committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by Registrant’s audit, compliance and valuation committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
| (f) | Not applicable. |
| (g) | Below are the aggregate non-audit fees billed in each of the last two fiscal years by Registrant’s principal accountant for services rendered to Registrant, to Registrant’s investment adviser, and to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant. |
| 2020/2021: $3,309,631 | 2019/2020: $3,570,594 |
| (h) | During the past fiscal year, all non-audit services provided by Registrant’s principal accountant to either Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant were pre-approved. Included in the audit, compliance and valuation committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence. |
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
The schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.
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) |
| (2) |
| (3) | Not applicable. |
| (b) |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Capital Trust
| By: | /s/ Jonathan de St. Paer | |
Jonathan de St. Paer Chief Executive Officer | ||
| Date: | December 16, 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: | December 16, 2021 | |
| By: | /s/ Mark Fischer | |
Mark Fischer Chief Financial Officer | ||
| Date: | December 16, 2021 | |