N-CSR

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: 811-22311

Schwab Strategic Trust – Schwab U.S. REIT ETF and Schwab Fundamental Index ETFs

(Exact name of registrant as specified in charter)

211 Main Street, San Francisco, California 94105

(Address of principal executive offices) (Zip code)

Omar Aguilar

Schwab Strategic Trust – Schwab U.S. REIT ETF and Schwab Fundamental Index ETFs

211 Main Street, San Francisco, California 94105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (415) 636-7000

Date of fiscal year end: February 28

Date of reporting period: February 29, 2024

Item 1: Report(s) to Shareholders.

Annual Report | February 29, 2024

Schwab U.S. REIT ETF

Ticker Symbol SCHH

No Action Required – Notice Regarding Shareholder Report Delivery

Beginning on July 24, 2024, fund shareholder reports will be streamlined to highlight key information deemed important for investors to assess

and monitor their fund investments. Other information, including financial statements, will not appear in the streamlined shareholder reports

but will available online and delivered free of charge upon request.

• If you already receive the full shareholder reports, you will receive the streamlined shareholder reports in the same way that you currently

receive the full shareholder reports (either in paper or electronically).

• If you currently receive a notification when a shareholder report is available on a fund’s website, beginning July 24, 2024, you will begin to

receive the streamlined shareholder report (in paper).

This page is intentionally left blank.

In This Report

Performance at a Glance	2
The Investment Environment	3
Fund Management	5
Performance and Fund Facts	6
Fund Expenses	9
Financial Statements and Portfolio Holdings	10
Financial Notes	17
Report of Independent Registered Public Accounting Firm	27
Other Federal Tax Information	28
Liquidity Risk Management Program	29
Trustees and Officers	30
Glossary	33

Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset Management®

Distributor: SEI Investments Distribution Co. (SIDCO)

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 Charles Schwab & Co., Inc. The Industry classifications used in the Portfolio Holdings are sub-categories of Sector classifications.

Schwab U.S. REIT ETF | Annual Report1

Schwab U.S. REIT ETF

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, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabetfs_prospectus.

Total Returns for the 12 Months Ended February 29, 2024
Schwab U.S. REIT ETF (Ticker Symbol: SCHH)
Market Price Return1	3.95%
NAV Return1	4.06%
Dow Jones Equity All REIT Capped Index	4.12%
ETF Category: Morningstar Real Estate2	3.80%
Performance Details	pages 6-8

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.

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

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

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

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

Index ownership — Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). The Dow Jones Equity All REIT Capped Index (the Index) is a product of S&P Dow Jones Indices LLC, and the trademark and Index have been licensed for use by Charles Schwab Investment Management, Inc. The Schwab U.S. REIT ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, or any of their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, nor any of their respective affiliates make any representation regarding the advisability of investing in such product.

ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the fair value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.

Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs and mutual funds within the category as of the report date.

2Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

The Investment Environment

For the 12-month reporting period ended February 29, 2024, U.S. equities rose, posting strong gains despite inflation remaining elevated, the U.S. Federal Reserve (Fed) continuing to raise interest rates through July 2023, and three U.S. regional banks failing between early March and early May raising concerns about the stability of the banking sector. However, as the year wore on and inflation began to ease, as did the likelihood of further interest rate increases, stocks staged a strong upsurge—particularly in the last four months of the reporting period. Outside the United States, the ongoing war between Russia and Ukraine and the Israel-Hamas war that broke out following Hamas’ attack on Israel in early October weighed on global activity. For the reporting period, the Dow Jones Equity All REIT Capped Index, which represents U.S. real estate investment trusts (REITs), returned 4.12%. The FTSE EPRA Nareit Global Index (Net)*, which represents general trends in eligible real estate securities worldwide, returned 0.01%. Over the same period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 30.45%.

Early in the reporting period, as inflation continued to rise and the Fed continued raising interest rates, U.S. REITs exhibited weakness as demand remained constrained. The U.S. banking crisis, though short-lived, also dragged on REITs, as did continuing recession concerns. U.S. REITs hit a low for the reporting period in late October 2023 but rallied through December 2023 before weakening again during the final two months of the reporting period as expectations for interest rate cuts pushed further into 2024. Among REIT sub-industries in the Dow Jones Equity All REIT Capped Index, hotel & resort REITs were the strongest performer by a large margin, as consumers continued to spend on travel and leisure. In contrast, real estate development was the weakest sub-industry, as high mortgage rates constrained demand by homebuyers and investors alike, office vacancy rates remained high, and concerns about the health of the U.S. corporate real estate market remained.

The U.S. economy continued to show unexpected resilience over the reporting period. Surprisingly robust job growth and strong consumer spending helped propel U.S. gross domestic product (GDP) to a 4.9% annualized growth rate for the third quarter of 2023, up from roughly 2% for the prior two quarters, but GDP fell to 3.4% for the fourth quarter. Inflation remained above the Fed’s historical 2% target over the reporting period but generally declined as rents and wage growth eased, profit margins declined, and monetary policy remained restrictive. The unemployment rate remained low throughout the reporting period though ticked up slightly over the second half of the reporting period.

Asset Class Performance Comparison % returns during the 12 months ended February 29, 2024

Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not a guarantee of future results.

For index definitions, please see the Glossary.

Data source: Index provider websites and 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.

Schwab U.S. REIT ETF | Annual Report3

Schwab U.S. REIT ETF

The Investment Environment (continued)

4Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Fund Management

Christopher Bliss, CFA, Managing Director and Head of Passive Equity Strategies for Schwab Asset

Management, is responsible for overseeing the investment process and portfolio management of investment

strategies for passive equity Schwab Funds and Schwab ETFs, and Schwab Personalized Indexing™ separately

managed accounts. 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, CFA, Senior Portfolio Manager for Schwab Asset Management, is responsible for the

day-to-day co-management of the 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.

Ferian Juwono, CFA, Senior Portfolio Manager for Schwab Asset Management, is responsible for the

oversight and day-to-day co-management of the 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.

Agnes Zau, CFA, Portfolio Manager for Schwab Asset Management, is responsible for the day-to-day

co-management of the fund. Prior to joining Schwab in 2018, Ms. Zau was at BlackRock for three years, most

recently as a multi-asset portfolio investment consultant where she advised institutional clients on asset

allocation and strategy, constructed risk decomposition and portfolio optimization, and conducted scenario

analyses for the core multi-asset target risk strategies. She spent the preceding three years as a derivatives

specialist at Mellon Capital.

Schwab U.S. REIT ETF | Annual Report5

Schwab U.S. REIT ETF as of February 29, 2024

The Schwab U.S. REIT ETF’s (the fund) goal is to track as closely as possible, before fees and expenses, the total return of an index composed of U.S. real estate investment trusts (REITs) classified as equities. To pursue its goal, the fund generally invests in securities that are included in the Dow Jones Equity All REIT Capped Index (the index). The index is a float-adjusted market capitalization weighted index that is subject to capping constraints at each quarterly rebalancing. The index generally includes all publicly traded equity REITs with a minimum float-adjusted market capitalization of $200 million and a three-month median daily value traded of at least $5 million. 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 February 29, 2024, U.S. equities rose, posting strong gains despite inflation remaining elevated, the U.S. Federal Reserve (Fed) continuing to raise interest rates through July 2023, and three U.S. regional banks failing between early March and early May raising concerns about the stability of the banking sector. However, as the year wore on and inflation began to ease, as did the likelihood of further interest rate increases, stocks staged a strong upsurge—particularly in the last four months of the reporting period. Outside the United States, the ongoing war between Russia and Ukraine and the Israel-Hamas war that broke out following Hamas’ attack on Israel in early October weighed on global activity. Early in the reporting period, as inflation continued to rise and the Fed continued raising interest rates, U.S. REITs exhibited weakness as demand remained constrained. The U.S. banking crisis, though short-lived, also dragged on REITs, as did continuing recession concerns. U.S. REITs hit a low for the reporting period in late October 2023 but rallied through December 2023 before weakening again during the final two months of the reporting period as expectations for interest rate cuts pushed further into 2024.

Performance. For the 12-month reporting period ended February 29, 2024, the fund’s market price return was 3.95% and its NAV return was 4.06% (for an explanation of the market price and NAV returns, please refer to footnote 3 on the following page). The index returned 4.12% during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.

Contributors and Detractors. The diversified REITs sub-industry detracted the most from the total return of the fund. Diversified REITs represented an average weight of approximately 2% of the fund’s investments and returned approximately -18% for the reporting period. One example from this sub-industry is WP Carey, Inc., a global net-lease REIT that provides long-term sale-leaseback and build-to-suit financing solutions for companies worldwide. The fund’s holdings of WP Carey, Inc. represented an average weight of approximately 1% of the fund’s investments and returned approximately -25% for the reporting period.

The residential REITs sub-industry also detracted from the total return of the fund, representing an average weight of approximately 15% of the fund’s investments and returning approximately -2% for the reporting period.

The specialized REITs sub-industry contributed the most to the total return of the fund. Specialized REITs represented an average weight of approximately 39% of the fund’s investments and returned approximately 7% for the reporting period. One example from this sub-industry is Equinix, Inc., a real estate investment trust that invests in interconnected data centers. The fund’s holdings of Equinix, Inc. represented an average weight of approximately 6% of the fund’s investments and returned approximately 32% for the reporting period.

The industrial REITs sub-industry also contributed to the total return of the fund, representing an average weight of approximately 14% of the fund’s investments and returning approximately 8% for the reporting period.

Management views and portfolio holdings may have changed since the report date.

6Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Performance and Fund Facts as of February 29, 2024

Performance of Hypothetical $10,000 Investment (February 28, 2014 – February 29, 2024)1,2

Average Annual Total Returns1

Fund and Inception Date	1 Year	5 Years	10 Years
Fund: Schwab U.S. REIT ETF (1/13/11)
Market Price Return3	3.95%	1.17%	4.73%
NAV Return3	4.06%	1.20%	4.74%
Dow Jones Equity All REIT Capped Index2	4.12%	N/A	N/A
REIT Spliced Index	4.12%	1.24%	4.81%
ETF Category: Morningstar Real Estate4	3.80%	3.76%	5.66%
Fund Expense Ratio5: 0.07%

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.

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

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

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

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

The inception date of the Dow Jones Equity All REIT Capped Index is April 13, 2020. The fund began tracking the index on June 22, 2020.

ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the fair value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.

Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs and mutual funds within the category as of the report date.

As stated in the prospectus.

Schwab U.S. REIT ETF | Annual Report7

Schwab U.S. REIT ETF

Performance and Fund Facts as of February 29, 2024 (continued)

Statistics1

Number of Holdings	120
Weighted Average Market Cap (millions)	$42,646
Price/Earnings Ratio (P/E)	33.6
Price/Book Ratio (P/B)	2.3
Portfolio Turnover Rate	6% 2

Industry Weightings % of Investments3

Top Equity Holdings % of Net Assets4

Portfolio holdings may have changed since the report date.

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

Source of Industry Classification: S&P and MSCI.

Excludes derivatives.

Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.

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.

This list is not a recommendation of any security by the investment adviser.

8Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Fund Expenses (Unaudited)

Examples for a $1,000 Investment

As a fund shareholder, you may incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares; and, (2) ongoing costs, including management fees.

The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in the fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning September 1, 2023 and held through February 29, 2024.

The Actual Return line in the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for the fund under the heading entitled “Expenses Paid During Period.”

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

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, including any brokerage commissions you may pay when purchasing or selling shares of a fund. Therefore, the hypothetical return line of the table is 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 9/1/23	ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 2/29/24	EXPENSES PAID DURING PERIOD 9/1/23-2/29/24 2
Schwab U.S. REIT ETF
Actual Return	0.07%	$1,000.00	$1,062.60	$0.36
Hypothetical 5% Return	0.07%	$1,000.00	$1,024.52	$0.35

1	Based on the most recent six-month expense ratio.
2	Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days in the period, and divided by 366 days in the fiscal year.

Schwab U.S. REIT ETF | Annual Report9

Schwab U.S. REIT ETF

Financial Statements

FINANCIAL HIGHLIGHTS

	3/1/23– 2/29/24	3/1/22– 2/28/231	3/1/21– 2/28/221	3/1/20– 2/28/211	3/1/19– 2/29/201
Per-Share Data
Net asset value at beginning of period	$19.96	$23.30	$19.48	$21.15	$21.65
Income (loss) from investment operations:
Net investment income (loss)2	0.64	0.60	0.43	0.42	0.66
Net realized and unrealized gains (losses)	0.12	(3.45 )	3.79	(1.54 )	(0.50 )
Total from investment operations	0.76	(2.85 )	4.22	(1.12 )	0.16
Less distributions:
Distributions from net investment income	(0.67 )	(0.49 )	(0.40 )	(0.55 )	(0.66 )
Net asset value at end of period	$20.05	$19.96	$23.30	$19.48	$21.15
Total return	4.06 %	(12.22 %)	21.56 %	(4.98 %)	0.59 %
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.07 %	0.07 %3	0.07 %	0.07 %	0.07 %
Net investment income (loss)	3.34 %	2.82 %3	1.81 %	2.33 %	2.88 %
Portfolio turnover rate4	6 %	6 %	5 %	59 %	6 %
Net assets, end of period (x 1,000,000)	$6,361	$5,780	$6,648	$4,892	$5,717

1	Per-Share Data has been retroactively adjusted to reflect a 2-for-1 share split effective after market close on March 10, 2022. (see financial note 12 for additional information).
2	Calculated based on the average shares outstanding during the period.
3	Ratio includes less than 0.005% of non-routine proxy expenses.
4	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.

See financial notes

10Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Portfolio Holdings as of February 29, 2024

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/schwabetfs_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 on a daily basis on the fund’s website.

SECURITY	NUMBER OF SHARES	VALUE ($)
COMMON STOCKS 99.8% OF NET ASSETS

Data Center REITs 9.3%
Digital Realty Trust, Inc.	1,569,809	230,463,659
Equinix, Inc.	408,930	363,465,163
		593,928,822

Diversified REITs 2.0%
Alexander & Baldwin, Inc.	375,502	6,105,662
American Assets Trust, Inc.	251,977	5,435,144
Armada Hoffler Properties, Inc.	349,653	3,559,468
Broadstone Net Lease, Inc.	970,456	14,469,499
Empire State Realty Trust, Inc., Class A	676,534	6,745,044
Essential Properties Realty Trust, Inc.	809,198	19,331,740
Global Net Lease, Inc.	1,015,535	7,322,007
WP Carey, Inc.	1,133,457	63,847,633
		126,816,197

Health Care REITs 8.6%
CareTrust REIT, Inc.	617,283	13,925,905
Global Medical REIT, Inc.	319,464	2,859,203
Healthcare Realty Trust, Inc.	1,975,012	27,215,666
Healthpeak Properties, Inc.	2,835,707	47,498,092
LTC Properties, Inc.	214,717	6,754,997
Medical Properties Trust, Inc. (a)	3,107,082	13,080,815
National Health Investors, Inc.	225,007	12,931,152
Omega Healthcare Investors, Inc.	1,269,936	39,520,408
Physicians Realty Trust	1,236,110	13,881,515
Sabra Health Care REIT, Inc.	1,198,308	16,632,515
Ventas, Inc.	2,085,703	88,204,380
Welltower, Inc.	2,868,881	264,396,073
		546,900,721

Hotel & Resort REITs 3.3%
Apple Hospitality REIT, Inc.	1,102,936	17,746,240
DiamondRock Hospitality Co.	1,087,593	10,223,374
Host Hotels & Resorts, Inc.	3,656,597	75,837,822
Park Hotels & Resorts, Inc.	1,087,893	18,059,024
Pebblebrook Hotel Trust	625,305	9,904,831
RLJ Lodging Trust	808,305	9,594,581
Ryman Hospitality Properties, Inc.	309,516	36,671,456
Service Properties Trust	859,434	5,844,151
Summit Hotel Properties, Inc.	556,629	3,573,558
Sunstone Hotel Investors, Inc.	1,064,131	11,907,626
Xenia Hotels & Resorts, Inc.	549,439	8,428,394
		207,791,057

Industrial REITs 14.0%
Americold Realty Trust, Inc.	1,381,482	34,951,495
EastGroup Properties, Inc.	240,120	42,186,683
First Industrial Realty Trust, Inc.	685,666	36,340,298
Innovative Industrial Properties, Inc.	145,317	14,239,613

SECURITY	NUMBER OF SHARES	VALUE ($)
LXP Industrial Trust	1,517,861	13,144,676
Plymouth Industrial REIT, Inc.	189,698	4,091,786
Prologis, Inc.	4,730,011	630,368,566
Rexford Industrial Realty, Inc.	1,094,198	55,672,794
STAG Industrial, Inc.	941,277	34,959,028
Terreno Realty Corp.	434,931	27,966,063
		893,921,002

Multi-Family Residential REITs 8.9%
Apartment Income REIT Corp.	761,598	23,091,651
Apartment Investment & Management Co., Class A *	695,090	5,129,764
AvalonBay Communities, Inc.	736,094	130,310,721
Camden Property Trust	553,436	52,288,633
Centerspace	77,907	4,330,850
Elme Communities	455,554	5,867,536
Equity Residential	1,791,135	107,844,238
Essex Property Trust, Inc.	332,686	76,983,541
Independence Realty Trust, Inc.	1,164,141	17,043,024
Mid-America Apartment Communities, Inc.	604,837	76,015,914
NexPoint Residential Trust, Inc.	118,682	3,466,701
UDR, Inc.	1,568,579	55,684,555
Veris Residential, Inc.	416,214	6,076,725
		564,133,853

Office REITs 4.9%
Alexandria Real Estate Equities, Inc.	810,654	101,112,873
Boston Properties, Inc.	748,380	48,435,154
Brandywine Realty Trust	889,763	3,825,981
COPT Defense Properties	582,810	14,121,486
Cousins Properties, Inc.	786,067	17,930,188
Douglas Emmett, Inc.	864,711	11,431,479
Easterly Government Properties, Inc.	493,016	5,817,589
Equity Commonwealth *	553,115	10,415,156
Highwoods Properties, Inc.	547,372	13,383,245
Hudson Pacific Properties, Inc.	656,988	4,165,304
JBG SMITH Properties	451,997	7,494,110
Kilroy Realty Corp.	553,248	20,962,567
NET Lease Office Properties	75,953	1,852,494
Office Properties Income Trust	253,675	677,312
Paramount Group, Inc.	857,393	3,798,251
Peakstone Realty Trust (a)	186,735	2,571,341
Piedmont Office Realty Trust, Inc., Class A	639,588	4,010,217
SL Green Realty Corp. (a)	333,975	16,191,108
Vornado Realty Trust	828,839	21,798,466
		309,994,321

Other Specialized REITs 7.0%
EPR Properties	390,194	16,029,170
Farmland Partners, Inc.	226,467	2,672,311
Four Corners Property Trust, Inc.	469,679	11,356,838
Gaming & Leisure Properties, Inc.	1,384,062	62,947,140

See financial notes

Schwab U.S. REIT ETF | Annual Report11

Schwab U.S. REIT ETF

Portfolio Holdings as of February 29, 2024 (continued)

SECURITY	NUMBER OF SHARES	VALUE ($)
Iron Mountain, Inc.	1,513,502	119,021,797
Lamar Advertising Co., Class A	453,939	50,182,956
Outfront Media, Inc.	753,484	10,827,565
Safehold, Inc.	232,106	4,669,973
Uniti Group, Inc.	1,237,506	7,251,785
VICI Properties, Inc.	5,362,455	160,498,278
		445,457,813

Retail REITs 13.8%
Acadia Realty Trust	493,449	8,087,629
Agree Realty Corp.	520,796	28,617,740
Brixmor Property Group, Inc.	1,558,315	35,233,502
Federal Realty Investment Trust	380,779	38,401,562
Getty Realty Corp.	248,876	6,560,371
InvenTrust Properties Corp.	349,504	8,824,976
Kimco Realty Corp.	3,447,018	68,113,076
Kite Realty Group Trust	1,137,175	24,346,917
Macerich Co.	1,116,069	18,314,692
NETSTREIT Corp.	356,737	5,996,749
NNN REIT, Inc.	945,706	38,480,777
Phillips Edison & Co., Inc.	620,108	22,150,258
Realty Income Corp.	4,310,650	224,627,972
Regency Centers Corp.	851,518	52,751,540
Retail Opportunity Investments Corp.	651,944	8,429,636
Simon Property Group, Inc.	1,691,031	250,509,332
SITE Centers Corp.	932,162	12,658,760
Tanger, Inc.	546,327	15,739,681
Urban Edge Properties	609,733	10,371,558
		878,216,728

Self Storage REITs 7.1%
CubeSmart	1,165,535	50,828,981
Extra Space Storage, Inc.	1,095,131	154,380,617
National Storage Affiliates Trust	400,572	14,344,483
Public Storage	820,286	232,854,587
		452,408,668

Single-Family Residential REITs 5.0%
American Homes 4 Rent, Class A	1,648,575	61,013,761
Equity LifeStyle Properties, Inc.	966,152	65,041,353
Invitation Homes, Inc.	2,981,707	101,586,757
Sun Communities, Inc.	645,033	86,279,614
UMH Properties, Inc.	323,922	4,988,399
		318,909,884

Telecom Tower REITs 13.2%
American Tower Corp.	2,386,405	474,560,498
Crown Castle, Inc.	2,249,605	247,321,574

SECURITY	NUMBER OF SHARES	VALUE ($)
SBA Communications Corp.	559,224	117,006,437
		838,888,509

Timber REITs 2.7%
PotlatchDeltic Corp.	411,328	18,596,139
Rayonier, Inc.	707,308	24,352,614
Weyerhaeuser Co.	3,783,921	130,091,205
		173,039,958
Total Common Stocks (Cost $6,460,904,760)		6,350,407,533


SHORT-TERM INVESTMENTS 0.4% OF NET ASSETS

Money Market Funds 0.4%
State Street Institutional U.S. Government Money Market Fund, Premier Class 5.28% (b)	3,724,027	3,724,027
State Street Institutional U.S. Government Money Market Fund, Premier Class 5.28% (b)(c)	18,130,960	18,130,960
		21,854,987
Total Short-Term Investments (Cost $21,854,987)		21,854,987
Total Investments in Securities (Cost $6,482,759,747)		6,372,262,520

	NUMBER OF CONTRACTS	NOTIONAL AMOUNT ($)	CURRENT VALUE/ UNREALIZED APPRECIATION ($)
FUTURES CONTRACTS
Long
Dow Jones U.S. Real Estate Index, expires 03/15/24	305	10,437,100	102,466

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $17,496,702.
(b)	The rate shown is the annualized 7-day yield.
(c)	Security purchased with cash collateral received for securities on loan.

REIT —

Real Estate Investment Trust

See financial notes

12Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Portfolio Holdings as of February 29, 2024 (continued)

The following is a summary of the inputs used to value the fund’s investments as of February 29, 2024 (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
Asset
Common Stocks1	$6,350,407,533	$—	$—	$6,350,407,533
Short-Term Investments1	21,854,987	—	—	21,854,987
Futures Contracts2	102,466	—	—	102,466
Total	$6,372,364,986	$—	$—	$6,372,364,986

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

See financial notes

Schwab U.S. REIT ETF | Annual Report13

Schwab U.S. REIT ETF

Statement of Assets and Liabilities

As of February 29, 2024

Assets
Investments in securities, at value - unaffiliated (cost $6,482,759,747) including securities on loan of $17,496,702		$6,372,262,520
Deposit with broker for futures contracts		556,500
Receivables:
Fund shares sold		19,000,986
Dividends		6,711,721
Variation margin on future contracts		88,375
Income from securities on loan	+	12,374
Total assets		6,398,632,476

Liabilities
Collateral held for securities on loan		18,130,960
Payables:
Fund shares redeemed		14,033,468
Investments bought		4,946,241
Management fees	+	346,544
Total liabilities		37,457,213
Net assets		$6,361,175,263

Net Assets by Source
Capital received from investors		$7,467,823,181
Total distributable loss	+	(1,106,647,918 )
Net assets		$6,361,175,263

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$6,361,175,263		317,300,000		$20.05

See financial notes

14Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Statement of Operations

For the period March 1, 2023 through February 29, 2024
Investment Income
Dividends received from securities - unaffiliated		$199,434,012
Interest received from securities - unaffiliated		74,309
Securities on loan, net	+	174,986
Total investment income		199,683,307

Expenses
Management fees		4,101,201
Total expenses	–	4,101,201
Net investment income		195,582,106

REALIZED AND UNREALIZED GAINS (LOSSES)
Net realized losses on sales of securities - unaffiliated		(99,988,265 )
Net realized gains on sales of in-kind redemptions - unaffiliated		183,423,581
Net realized losses on futures contracts	+	(3,088,952 )
Net realized gains		80,346,364
Net change in unrealized appreciation (depreciation) on securities - unaffiliated		(5,048,378 )
Net change in unrealized appreciation (depreciation) on futures contracts	+	504,353
Net change in unrealized appreciation (depreciation)	+	(4,544,025 )
Net realized and unrealized gains		75,802,339
Increase in net assets resulting from operations		$271,384,445

See financial notes

Schwab U.S. REIT ETF | Annual Report15

Schwab U.S. REIT ETF

Statement of Changes in Net Assets

For the current and prior report periods

OPERATIONS
	3/1/23-2/29/24		3/1/22-2/28/23
Net investment income		$195,582,106	$170,738,808
Net realized gains		80,346,364	167,043,543
Net change in unrealized appreciation (depreciation)	+	(4,544,025 )	(1,108,350,266 )
Increase (decrease) in net assets resulting from operations		$271,384,445	($770,567,915 )

DISTRIBUTIONS TO SHAREHOLDERS
Total distributions		($203,691,040 )	($139,086,455 )

TRANSACTIONS IN FUND SHARES1
	3/1/23-2/29/24			3/1/22-2/28/23
		SHARES	VALUE	SHARES	VALUE
Shares sold		78,200,000	$1,485,104,716	42,700,000	$901,472,496
Shares redeemed	+	(50,450,000 )	(971,438,472 )	(38,550,000 )	(860,477,105 )
Net transactions in fund shares		27,750,000	$513,666,244	4,150,000	$40,995,391

SHARES OUTSTANDING AND NET ASSETS1
	3/1/23-2/29/24			3/1/22-2/28/23
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		289,550,000	$5,779,815,614	285,400,000	$6,648,474,593
Total increase (decrease)	+	27,750,000	581,359,649	4,150,000	(868,658,979 )
End of period		317,300,000	$6,361,175,263	289,550,000	$5,779,815,614

For the period ended February 28, 2023, transactions in fund shares have been retroactively adjusted to reflect a 2-for-1 share split effective after market close on March 10,

2022. The retroactive adjustment of the share split does not change the transaction in fund share values (see financial note 12 for additional information).

See financial notes

16Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Financial Notes

1. Business Structure of the Fund:

Schwab U.S. REIT ETF is a series of Schwab Strategic Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the operational funds in the trust as of the end of the period, including the fund discussed in this report, which is highlighted:

SCHWAB STRATEGIC TRUST
Schwab U.S. REIT ETF	Schwab Short-Term U.S. Treasury ETF
Schwab U.S. Broad Market ETF	Schwab Intermediate-Term U.S. Treasury ETF
Schwab 1000 Index® ETF	Schwab Long-Term U.S. Treasury ETF
Schwab U.S. Large-Cap ETF	Schwab U.S. Aggregate Bond ETF
Schwab U.S. Large-Cap Growth ETF	Schwab 1-5 Year Corporate Bond ETF
Schwab U.S. Large-Cap Value ETF	Schwab 5-10 Year Corporate Bond ETF
Schwab U.S. Mid-Cap ETF	Schwab Fundamental U.S. Broad Market Index ETF
Schwab U.S. Small-Cap ETF	Schwab Fundamental U.S. Large Company Index ETF
Schwab U.S. Dividend Equity ETF	Schwab Fundamental U.S. Small Company Index ETF
Schwab International Dividend Equity ETF	Schwab Fundamental International Large Company Index ETF
Schwab International Equity ETF	Schwab Fundamental International Small Company Index ETF
Schwab International Small-Cap Equity ETF	Schwab Fundamental Emerging Markets Large Company Index ETF
Schwab Emerging Markets Equity ETF	Schwab Ariel ESG ETF
Schwab U.S. TIPS ETF	Schwab Crypto Thematic ETF
Schwab Municipal Bond ETF	Schwab High Yield Bond ETF

The fund issues and redeems shares at its net asset value per share (NAV) only in large blocks of shares (Creation Units). These transactions are usually in exchange for a basket of securities and/or an amount of cash. As a practical matter, only institutional investors who have entered into an authorized participant agreement purchase or redeem Creation Units. Except when aggregated in Creation Units, shares of the fund are not redeemable securities.

Individual shares of the fund trade on national securities exchanges and elsewhere during the trading day and can only be bought and sold at market prices throughout the trading day through a broker-dealer. Because fund shares trade at market prices rather than NAV, shares may trade at a price greater than NAV (premium) or less than NAV (discount). A chart showing the frequency at which the fund’s daily closing market price was at a discount or premium to the fund’s NAV can be found at www.schwabassetmanagement.com.

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. The "Fund Complex" includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust.

2. Significant Accounting Policies:

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

The fund may invest in certain mutual funds 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

Pursuant to Rule 2a-5 under the 1940 Act, the Board of Trustees (the Board) has designated authority to a Valuation Designee, the fund’s investment adviser, to make fair valuation determinations under adopted procedures, subject to Board oversight. The investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and liabilities as well as to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair value. The Valuation Designee may utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

Schwab U.S. REIT ETF | Annual Report17

Schwab U.S. REIT ETF

Financial Notes (continued)

2. Significant Accounting Policies (continued):

Securities held in the fund’s portfolio are valued every business day. The following valuation policies and procedures are used by the Valuation Designee 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.

• 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.

• Securities for which no quoted value is available: The Valuation Designee has adopted procedures to fair value the fund’s securities when market prices are not “readily available” or are unreliable. For example, a security may be fair valued when it’s 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. Fair value determinations are made in good faith in accordance with adopted valuation procedures. The Valuation Designee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Valuation Designee may employ methods 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. 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.

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 methods 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 it is determined 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 the Valuation Designee’s 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 investments — Investments whose values are based on quoted market prices in active markets. These generally include active listed equities, mutual funds, exchage-traded funds (ETFs) and futures contracts. Mutual funds and ETFs are classified as Level 1 prices, without consideration to the classification level of the underlying securities held which could be Level 1, Level 2 or Level 3 in the fair value hierarchy.

• 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 Valuation Designee’s 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 readily available for these securities, one or more valuation methods are used for which sufficient and reliable data is available. The inputs used 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 in the absence of market information. Assumptions used due to the lack of observable inputs may significantly impact the resulting fair value and therefore a 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.

18Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Financial Notes (continued)

2. Significant Accounting Policies (continued):

The levels associated with valuing the fund’s investments as of February 29, 2024, are disclosed in the fund’s Portfolio Holdings.

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

Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. The fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by the fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their value may change daily.

Securities Lending: Under the trust’s Securities Lending Program, the fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides the fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating pursuant to Rule 2a-7 under the 1940 Act. The fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the fund or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreements. Securities lending income, as disclosed in the fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between the fund and the lending agent. The aggregate fair value of securities loaned will not at any time exceed one-third of the total assets of the fund, including collateral received from the loan. Securities lending fees paid to the unaffiliated lending agents start at 9% 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 February 29, 2024, the fund had securities on loan, all of which were classified as common stocks. The value of the securities on loan and the related collateral as of February 29, 2024, are disclosed in the fund’s Portfolio Holdings and Statement of Assets and Liabilities.

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.

When the fund closes out a futures contract position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.

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

(d) Investment Income:

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

Schwab U.S. REIT ETF | Annual Report19

Schwab U.S. REIT ETF

Financial Notes (continued)

2. Significant Accounting Policies (continued):

(e) Expenses:

Pursuant to the Amended and Restated Advisory Agreement (Advisory Agreement) between the investment adviser and the trust, the investment adviser will pay the operating expenses of the fund, excluding taxes, any brokerage expenses, and extraordinary or non-routine expenses. Taxes, any brokerage expenses and extraordinary or non-routine expenses that are specific to the fund are charged directly to the fund. The Advisory Agreement excludes paying acquired fund fees and expenses, which are indirect expenses incurred by a fund through its investments in underlying funds.

(f) Distributions to Shareholders:

The fund makes distributions from net investment income, if any, quarterly, and from net realized capital gains, if any, once a year. To receive a distribution, you must be a registered shareholder on the record date. Distributions are paid to shareholders on the payable date.

(g) Accounting Estimates:

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

(h) Federal Income Taxes:

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

(i) Indemnification:

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

(j) Regulatory Update:

Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these rule and form amendment changes on the content of the current shareholder report and the newly created annual and semiannual streamlined shareholder reports.

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.

20Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Financial Notes (continued)

3. Risk Factors (continued):

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

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.

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

REITs Risk. In addition to the risks associated with investing in securities of real estate companies and real estate related companies, REITs are subject to certain additional risks. Equity REITs may be affected by changes in the value of the underlying properties owned by the trusts. Further, REITs are dependent upon specialized management skills and cash flows, and may have their investments in relatively few properties, or in a small geographic area or a single property type. Failure of a company to qualify as a REIT under federal tax law may have adverse consequences to the fund. In addition, REITs have their own expenses, and the fund will bear a proportionate share of those expenses. The value of a REIT may be affected by changes in interest rates.

Tracking Error Risk. As an index fund, the fund seeks to track the performance of its index, although it may not be successful in doing so. The divergence between the performance of the fund and the index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.

Derivatives Risk. The principal types of derivatives used by the fund are futures contracts. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. The fund’s use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) could cause the fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.

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

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Financial Notes (continued)

3. Risk Factors (continued):

create a risk of counterparty default under certain transactions, risks that the fund would need to liquidate portfolio positions when it may not be advantageous to do so in order to meet margin and payment obligations, and legal risks relating to insufficient documentation, insufficient capacity or authority of a counterparty, or legality or enforceability of a contract.

Concentration Risk. To the extent that the fund’s or the index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class (including the real estate industry, as described above), the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.

Liquidity Risk. The fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.

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

Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.

Market Trading Risk. Although fund shares are listed on national securities exchanges, there can be no assurance that an active trading market for fund shares will develop or be maintained. If an active market is not maintained, investors may find it difficult to buy or sell fund shares.

Shares of the Fund May Trade at Prices Other Than NAV. Fund shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of the shares of the fund will approximate the fund’s NAV, there may be times when the market price and the NAV vary significantly. An investor may pay more than NAV when buying shares of the fund in the secondary market, and an investor may receive less than NAV when selling those shares in the secondary market. The market price of fund shares may deviate, sometimes significantly, from NAV during periods of market volatility or market disruption, or as a result of other factors impacting foreign securities, including liquidity, irregular trading activity and timing differences between foreign markets where securities trade and the secondary market where fund shares are sold.

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 pursuant to the Advisory Agreement between the investment adviser and the trust.

For its advisory services to the fund, the investment adviser is entitled to receive an annual management fee, payable monthly, equal to 0.07% of the fund’s average daily net assets.

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Financial Notes (continued)

4. Affiliates and Affiliated Transactions (continued):

Investment from Affiliates

Certain funds in the Fund Complex may own shares of other funds in the Fund Complex. The table below reflects the percentage of shares of the fund that are owned by other funds in the Fund Complex as of February 29, 2024, as applicable:

Schwab MarketTrack All Equity Portfolio	0.7 %
Schwab MarketTrack Balanced Portfolio	0.3 %
Schwab MarketTrack Conservative Portfolio	0.1 %
Schwab MarketTrack Growth Portfolio	0.6 %
Schwab Target 2010 Index Fund	0.0 %*
Schwab Target 2015 Index Fund	0.0 %*
Schwab Target 2020 Index Fund	0.1 %
Schwab Target 2025 Index Fund	0.3 %
Schwab Target 2030 Index Fund	0.7 %
Schwab Target 2035 Index Fund	0.6 %
Schwab Target 2040 Index Fund	0.8 %
Schwab Target 2045 Index Fund	0.6 %
Schwab Target 2050 Index Fund	0.8 %
Schwab Target 2055 Index Fund	0.5 %
Schwab Target 2060 Index Fund	0.6 %
Schwab Target 2065 Index Fund	0.1 %
Schwab VIT Balanced Portfolio	0.0 %*
Schwab VIT Balanced with Growth Portfolio	0.1 %
Schwab VIT Growth Portfolio	0.2 %

*	Less than 0.05%

Interfund Transactions

The fund may engage in direct 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 February 29, 2024, the fund’s purchases and sales of securities with other funds in the Fund Complex was $13,873,054 and $50,967,977, respectively, and includes realized losses of $25,314,557.

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 of the Board. The fund had no interfund borrowing or lending activity during the period.

5. Other Service Providers:

SEI Investments Distribution Co. is the principal underwriter and distributor of shares of the fund.

State Street Bank and Trust Company (State Street) serves as the fund’s transfer agent. As part of these services, the transfer agent maintains records pertaining to the sale, redemption and transfer of the fund’s shares. The transfer agent is also responsible for the order-taking function for the fund’s shares.

State Street also serves as custodian and accountant for the fund. The custodian is responsible for the daily safekeeping of securities and cash held by the fund. The fund’s accountant maintains all books and records related to the fund’s transactions.

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Financial Notes (continued)

6. 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 interested persons or non-interested persons (independent 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.

7. Borrowing from Banks:

During the period, the fund was a participant with other funds in the Fund Complex in a joint, syndicated, committed $1 billion line of credit (the Syndicated Credit Facility), which matured on September 28, 2023. On September 28, 2023, 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 26, 2024. Under the terms of the Syndicated Credit Facility, in addition to the investment adviser paying the interest charged on any borrowings by the fund, the investment adviser 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, which matured on September 28, 2023. On September 28, 2023, 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 26, 2024. Under the terms of the Uncommitted Credit Facility, the investment adviser pays interest on the amount the fund borrows. There were no borrowings by the fund from either line of credit during the period.

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

8. Derivatives:

The fund entered into futures contracts during the report period to equitize available cash. 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.

As of February 29, 2024, the Statement of Assets and Liabilities included the following financial derivative instrument fair values held at period end:

	EQUITY CONTRACTS	TOTAL
Asset Derivatives
Futures Contracts1	$102,466	$102,466


1	Includes cumulative unrealized appreciation of futures contracts as reported in the fund’s Portfolio Holdings. Only current day’s variation margin on futures contracts is reported within the Statement of Assets and Liabilities.

The effects of the derivative contracts in the Statement of Operations for the period ended February 29, 2024, were:

	EQUITY CONTRACTS	TOTAL
Net Realized Gains (Losses)
Futures Contracts1	($3,088,952 )	($3,088,952 )
Net Change in Unrealized Appreciation (Depreciation)
Futures Contracts2	$504,353	$504,353


1	Statement of Operations location: Net realized gains (losses) on futures contracts.
2	Statement of Operations location: Net change in unrealized appreciation (depreciation) on futures contracts.

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Financial Notes (continued)

8. Derivatives (continued):

During the period ended February 29, 2024, the month-end average notional amounts of futures contracts held by the fund and the month-end average number of contracts held were as follows:

Notional Amount	Number of Contracts
$14,172,162	427

9. Purchases and Sales of Investment Securities:

For the period ended February 29, 2024, purchases and sales of securities (excluding in-kind transactions and short-term obligations) were as follows:

PURCHASES OF SECURITIES	SALES OF SECURITIES
$423,861,339	$380,341,229

10. In-Kind Transactions:

The consideration for the purchase of Creation Units of the fund often consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the securities involved in the relevant fund’s underlying index, and an amount of cash. Investors purchasing and redeeming Creation Units are subject to a standard creation transaction fee and a standard redemption transaction fee paid to the custodian to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units. Purchasers and redeemers of Creation Units for cash are subject to an additional variable charge paid to the fund that will offset the transaction costs to the fund of buying or selling portfolio securities. Variable charges paid to the fund generally have no effect on net asset value per share. In addition, purchasers and redeemers of shares in Creation Units are responsible for payment of the costs of transferring securities to or out of the fund. From time to time, the investment adviser may cover the cost of any transaction fees when believed to be in the best interests of the fund.

The in-kind transactions for the period ended February 29, 2024, were as follows:

IN-KIND PURCHASES OF SECURITIES	IN-KIND SALES OF SECURITIES
$1,352,913,522	$843,340,165

For the period ended February 29, 2024, the fund may realize net capital gains or losses resulting from in-kind redemptions of Creation Units. Because such gains or losses are not taxable to the fund and are not distributed to existing fund shareholders, the gains or losses are reclassified from accumulated net realized gains or losses to capital received from investors at the end of the fund’s tax year. These reclassifications have no effect on net assets or net asset value per share. The net realized gains or losses on sales of in-kind redemptions for the period ended February 29, 2024, are disclosed in the fund’s Statement of Operations, if any.

11. Federal Income Taxes:

As of February 29, 2024, 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)
$6,616,814,467	$630,032,276	($874,481,757 )	($244,449,481 )

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Financial Notes (continued)

11. Federal Income Taxes (continued):

As of February 29, 2024, the components of distributable earnings on a tax basis were as follows:

UNDISTRIBUTED ORDINARY INCOME	NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS	CAPITAL LOSS CARRYFORWARDS AND OTHER LOSSES	TOTAL
$20,301,260	($244,449,481 )	($882,499,697 )	($1,106,647,918 )

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 and realization for tax purposes of unrealized appreciation or depreciation on futures contracts. The tax cost of the fund’s investments, disclosed above, have been adjusted from its 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 February 29, 2024, the fund had capital loss carryforwards of $882,499,697.

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	ORDINARY INCOME
	$203,691,040	$139,086,455

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 in the financial statements. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments have no impact on net assets or the results of operations.

As of February 29, 2024, 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 fund’s Statement of Operations. During the period ended February 29, 2024, the fund did not incur any interest or penalties.

12. Share Splits:

The Board authorized a 2-for-1 share split for the Schwab U.S. REIT ETF which applied to shareholders of record as of the close of markets on March 8, 2022, and paid after the close of markets on March 10, 2022. Shares began trading at their post-split price on March 11, 2022. The share split increased the number of shares outstanding and decreased the NAV per share. The share split did not change the total value of a shareholder’s investment. The Financial Highlights and Statement of Changes in Net Assets for the fund have been retroactively adjusted for the period ended February 28, 2023, to reflect the above share split.

13. 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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Schwab U.S. REIT ETF

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Schwab Strategic Trust and Shareholders of Schwab U.S. REIT ETF:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities, including the portfolio holdings, of Schwab U.S. REIT ETF (the “Fund”), one of the funds constituting Schwab Strategic Trust, as of February 29, 2024, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the four 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 February 29, 2024, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended in conformity with accounting principles generally accepted in the United States of America. The financial highlights for the year ended February 29, 2020 were audited by other auditors, whose report, dated April 16, 2020, 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 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 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 February 29, 2024 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
April 16, 2024

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 the fiscal year ended February 29, 2024, the fund designates $3,786,874 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 2025 via IRS Form 1099 of the amounts for use in preparing their 2024 income tax return.

For the fiscal year ended February 29, 2024, the fund designates $199,904,166 as dividends eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code. Shareholders will be notified in January 2025 via IRS Form 1099 of the amounts for use in preparing their 2024 income tax return.

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Schwab U.S. REIT ETF

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 19, 2023 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2022, through May 31, 2023, which included individual fund liquidity metrics. The report summarized the operation of the program and the information and factors considered by the investment adviser in assessing whether the program has been adequately and effectively implemented with respect to a fund. 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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Trustees and Officers

The tables below give information about the trustees and officers of Schwab Strategic 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 106 funds.

The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-877-824-5615.

Independent Trustees
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
Michael J. Beer 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 2022)	Retired. Director, President and Chief Executive Officer (Dec. 2016 – Sept. 2019), Principal Funds (investment management).	106	Director (2016 – 2019), Principal Funds, Inc.
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.	106	None
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.	106	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.	106	Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – 2021), 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).	106	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
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).	106	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).	106	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)	Co-Chairman of the Board (July 2022 – present), Director and Chief Executive Officer (Oct. 2008 – present) and President (Feb. 2007 – 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.; Co-Chairman of the Board (July 2022 – present) and Director (Apr. 2006 – present), Charles Schwab Bank, SSB; Co-Chairman of the Board (July 2022 – present) and Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; Co-Chairman of the Board (July 2022 – present) and Director (July 2019 – present), Charles Schwab Trust Bank; Director (May 2008 – present), Chief Executive Officer (Aug. 2017 – present) and President (Aug. 2017 – Nov. 2021), Schwab Holdings, Inc.; Manager (Sept. 2023 – present), TD Ameritrade Holding LLC; Director (Oct. 2020 – Aug. 2023), TD Ameritrade Holding Corporation; Director (July 2016 – Oct. 2021), Charles Schwab Investment Management, Inc.	106	Director (2008 – present), The Charles Schwab Corporation
Richard A. Wurster2 1973 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2022)	President (Oct. 2021 – present) and Executive Vice President – Schwab Asset Management Solutions (Apr. 2019 – Oct. 2021), The Charles Schwab Corporation; President, Director (Oct. 2021 – present), Executive Vice President – Schwab Asset Management Solutions (July 2019 – Oct. 2021) and Senior Vice President – Advisory (May 2016 – July 2019), Charles Schwab & Co., Inc.; President (Nov. 2021 – present), Schwab Holdings, Inc.; Director (Oct. 2021 – present) and Chief Executive Officer (Nov. 2019 – Jan. 2022), Charles Schwab Investment Management, Inc.; Director, Chief Executive Officer and President (Mar. 2018 – Oct. 2022), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (July 2016 – Apr. 2018) and President (Mar. 2017 – Apr. 2018), ThomasPartners, Inc.; Chief Executive Officer (July 2016 – Apr. 2018), Windhaven Investment Management, Inc.	106	None

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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
Omar Aguilar 1970 Chief Executive Officer, 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)	Chief Executive Officer (Jan. 2022 – present), President (Oct. 2023 – present), (Chief Investment Officer (Apr. 2011 – present) and Senior Vice President (Apr. 2011 – Jan. 2022), Charles Schwab Investment Management, Inc.; Director, Chief Executive Officer and President (Oct. 2022 – present), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (Sept. 2023 – present), President (Oct. 2023 – present), Chief Investment Officer (June 2011 – present) and Vice President (June 2011 – Sept. 2023), Schwab Funds, Laudus Trust and Schwab ETFs.
Mark Fischer 1970 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)	Chief Operating Officer (Dec. 2020 – present) and Treasurer and Chief Financial Officer (Jan. 2016 – Dec. 2022), Schwab Funds, Laudus Trust and Schwab ETFs; Chief Financial Officer (Mar. 2020 – present), Chief Operating Officer (Oct. 2023 – present), Managing Director (Mar. 2023 – present) and Vice President (Oct. 2013 – Mar. 2023), Charles Schwab Investment Management, Inc.
Dana Smith 1965 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2023)	Treasurer and Chief Financial Officer (Jan. 2023 – present) and Assistant Treasurer (Dec. 2015 – Dec. 2022), Schwab Funds, Laudus Trust and Schwab ETFs; Managing Director (Mar. 2023 – present), Vice President (Mar. 2022 – Mar. 2023) and Director (Oct. 2015 – Mar. 2022), Charles Schwab Investment Management, Inc.; Managing Director (May 2022 – present) and Vice President (Apr. 2022 – May 2022), Charles Schwab & Co., Inc.
Patrick Cassidy 1964 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 2018)	Chief Investment Officer (Oct. 2023 – present) and Vice President (Feb. 2018 – present), Schwab Funds, Laudus Trust and Schwab ETFs; Managing Director (Mar. 2023 – present), Chief Investment Officer (Oct. 2023 – present), and Senior Vice President (Oct. 2012 – Mar. 2023), Charles Schwab Investment Management, Inc.
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)	Managing Director (Mar. 2023 – present), Senior Vice President (Jan. 2020 – Mar. 2023) and Chief Investment Officer (Jan. 2020 – present) Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer (June 2021 – present), Schwab Funds, Laudus Trust 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.
Catherine MacGregor 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Trust (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)	Chief Legal Officer (Mar. 2022 – present), Managing Director (Mar. 2023 – present) and Vice President (Sept. 2005 – Mar. 2023), Charles Schwab Investment Management, Inc.; Managing Director (May 2022 – present) and Vice President (Aug. 2005 – May 2022), Charles Schwab & Co., Inc.; Vice President (Dec. 2005 – present) and Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Trust; 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.

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.

Mr. Bettinger and Mr. Wurster are Interested Trustees. Mr. Bettinger and Mr. Wurster are Interested Trustees because each 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.

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.

32Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Glossary

ask See “offer.”

asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage to help offset risks and rewards, based on your goals, time horizon and risk tolerance.

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

authorized participant (AP) A large institutional investor that places orders for creation units with the funds’ distributor.

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

bid The highest price at which someone is willing to buy a security.

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.

cap, capitalization See “market cap.”

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

commencement of operations The date that the first NAV was calculated.

creation unit (C.U.) A basket of securities that is delivered by an authorized participant (AP) to the fund equal to the current holdings of the ETF, plus a designated cash component. In return, the APs receive a large block of ETF shares (typically 50,000 shares), which investors can then buy and sell in the secondary market.

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 greater 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.

exchange A marketplace, or any organization or group that provides or maintains a marketplace for trading securities, options, futures, or commodities.

expense ratio The amount that is taken from the fund’s assets each year to cover the 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.

inception date The date that the shares began trading in the secondary market.

indicative optimized portfolio value (IOPV) A calculation disseminated by the stock exchange that approximates the fund’s NAV every 15 seconds throughout the trading day.

liquidity The ability to convert a security or asset quickly into cash.

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

market price return The return based on the change in market price per share of the fund over a given time period. Market price returns assume that dividends and capital gain distributions have been reinvested in the fund at market price.

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

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

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

Schwab U.S. REIT ETF | Annual Report33

Schwab U.S. REIT ETF

NAV return The return based on the change in NAV of the fund over a given time period. NAV returns assume that dividends and capital gain distributions have been reinvested in the fund.

offer (ask) The lowest price at which an individual is willing to sell a security.

open The price at which a security opened for trading on a given day.

outstanding shares, shares outstanding When speaking of the 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.

primary market The market that deals with the issuance of new securities.

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

REIT Spliced Index An internally calculated index, comprised of the Dow Jones U.S. Select REIT Index from the inception of the Schwab U.S. REIT ETF until the close of business on June 19, 2020, and the Dow Jones Equity All REIT Capped Index thereafter. The REIT Spliced Index is published with the permission of S&P Dow Jones Indices LLC, but is not calculated, sponsored or endorsed by S&P Dow Jones Indices LLC.

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

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.

sampling If a fund uses a sampling method, the fund will not fully replicate the benchmark index and may hold securities not included in the index. A fund that utilizes a sampling approach may not track the return of the index.

secondary market The market in which investors purchase securities from other investors rather than directly from the issuing companies. Organized exchanges facilitate the trading of securities in the secondary market.

spread The gap between bid and ask prices of a security.

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.

tracking error The difference between the performance of the fund and its benchmark index, positive or negative.

34Schwab U.S. REIT ETF | Annual Report

Schwab U.S. REIT ETF

Schwab ETFs

Schwab ETFs are designed to serve as simple low-cost core investment products for a diversified portfolio. These ETFs seek to provide consistent, repeatable performance through a variety of investment strategies that span the equity and fixed income spectrum. The list below shows all currently available Schwab ETFs.

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 ETF. 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 ETFs’ website at www.schwabassetmanagement.com/schwabetfs_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab ETFs 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/schwabetfs_prospectus or the SEC’s website at www.sec.gov.

Schwab ETFs

U.S. ETFs

Schwab U.S. Broad Market ETF

Schwab 1000 Index® ETF

Schwab U.S. Large-Cap ETF

Schwab U.S. Large-Cap Growth ETF

Schwab U.S. Large-Cap Value ETF

Schwab U.S. Mid-Cap ETF

Schwab U.S. Small-Cap ETF

Schwab U.S. Dividend Equity ETF

Schwab U.S. REIT ETF

International ETFs

Schwab International Dividend Equity ETF

Schwab International Equity ETF

Schwab International Small-Cap Equity ETF

Schwab Emerging Markets Equity ETF

Fixed-Income ETFs

Schwab U.S. TIPS ETF

Schwab Short-Term U.S. Treasury ETF

Schwab Intermediate-Term U.S. Treasury ETF

Schwab Long-Term U.S. Treasury ETF

Schwab U.S. Aggregate Bond ETF

Schwab 1-5 Year Corporate Bond ETF

Schwab 5-10 Year Corporate Bond ETF

Schwab Municipal Bond ETF

Schwab High Yield Bond ETF

Fundamental Index* ETFs

Schwab Fundamental U.S. Broad Market Index ETF

Schwab Fundamental U.S. Large Company Index ETF

Schwab Fundamental U.S. Small Company Index ETF

Schwab Fundamental International Large Company Index ETF

Schwab Fundamental International Small Company Index ETF

Schwab Fundamental Emerging Markets Large Company
Index ETF

Active, Semi-Transparent (Also Known As Non-Transparent) ETF

Schwab Ariel ESG ETF

Thematic ETFs

Schwab Crypto Thematic ETF

Investment Adviser

Charles Schwab Investment Management, Inc., dba Schwab Asset Management

211 Main Street, San Francisco, CA 94105

Schwab ETFs

1-877-824-5615

© 2024 Charles Schwab Investment Management, Inc., dba Schwab Asset Management. All rights reserved.
Printed on recycled paper.

FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC.

The Schwab Ariel ESG ETF is different from traditional ETFs. Traditional ETFs tell the public what assets they hold each day. This fund will not. This may create additional risks for your investment. For example:

•

You may have to pay more money to trade the fund’s shares. This fund will provide less information to traders, who tend to charge more for trades when they have less information.

•

The price you pay to buy fund shares on an exchange may not match the value of the fund’s portfolio. The same is true when you sell shares. These price differences may be greater for this fund compared to other ETFs because it provides less information to traders.

•

These additional risks may be even greater in bad or uncertain market conditions.

•

The ETF will publish on its website each day a “Proxy Portfolio” designed to help trading in shares of the ETF. While the Proxy Portfolio includes some of the ETF’s holdings, it is not the ETF’s actual portfolio.

The differences between this fund and other ETFs may also have advantages. By keeping certain information about the fund secret, this fund may face less risk that other traders can predict or copy its investment strategy. This may improve the fund’s performance. If other traders are able to copy or predict the fund’s investment strategy, however, this may hurt the fund’s performance.

For additional information regarding the unique attributes and risks of the fund, see Proxy Portfolio Risk, Premium/Discount Risk, Trading Halt Risk, Authorized Participant Concentration Risk, Tracking Error Risk and Shares of the Fund May Trade at Prices Other Than NAV in the Principal Risks and Proxy Portfolio and Proxy Overlap sections of the prospectus and/or the Statement of Additional Information. These risks are discussed on the next page.

Schwab U.S. REIT ETF

Active semi-transparent (also referred to as non-transparent) ETFs operate differently from other exchange-traded funds (ETFs). Unlike other ETFs, an active semi-transparent ETF does not publicly disclose its entire portfolio composition each business day, which may affect the price at which shares of the ETF trade in the secondary market. Active semi-transparent ETFs have limited public trading history. There can be no assurance that an active trading market will develop, be maintained or operate as intended. There is a risk that the market price of an active semi-transparent ETF may vary significantly from the ETF’s net asset value and that its shares may trade at a wider bid/ask spread and, therefore, cost investors more to trade than shares of other ETFs. These risks are heightened during periods of market disruption or volatility.

Proxy Portfolio Risk: Unlike traditional ETFs, this fund does not disclose its portfolio holdings (Actual Portfolio) daily. The fund instead posts a Proxy Portfolio on its website each day. The Proxy Portfolio is designed to reflect the economic exposures and risk characteristics of the fund’s actual holdings on each trading day, but it is not the same as the fund’s Actual Portfolio. Although the Proxy Portfolio is intended to provide investors with enough information to allow for an effective arbitrage mechanism that will keep the market price of the Fund at or close to the underlying NAV per Share of the Fund, there is a risk (which may increase during periods of market disruption or volatility) that market prices will vary significantly from the underlying NAV of the fund. ETF trading on the basis of a published Proxy Portfolio may trade at a wider bid/ask spread than ETFs that publish their portfolios on a daily basis, especially during periods of market disruption or volatility, and therefore may cost investors more to trade. Also, while the Fund seeks to benefit from keeping its portfolio information secret, market participants may attempt to use the Proxy Portfolio to identify a Fund’s trading strategy, which if successful, could result in such market participants engaging in certain predatory trading practices that may have the potential to harm the Fund and its shareholders.

Proxy Portfolio Construction: The Proxy Portfolio is designed to recreate the daily performance of the Actual Portfolio. This is achieved by performing a “Factor Model” analysis of the Actual Portfolio. The Factor Model is comprised of three sets of factors or analytical metrics: market-based factors, fundamental factors, and industry/sector factors. The fund uses a “Model Universe” to generate its Proxy Portfolio. The Model Universe is comprised of securities that the fund can purchase and will be a financial index or stated portfolio of securities from which fund investments will be selected. The results of the Factor Model analysis are then applied to the Model Universe. The Proxy Portfolio is then generated as a result of this Model Universe analysis with the Proxy Portfolio being a small sub-set of the Model Universe. The Factor Model is applied to both the Actual Portfolio and the Model Universe to construct the fund’s Proxy Portfolio that performs in a manner substantially identical to the performance of its Actual Portfolio. The Proxy Portfolio will only include investments the fund is permitted to hold. The fund’s SAI contains more information on the Proxy Portfolio and its construction.

Proxy Portfolio and Proxy Overlap Information regarding the contents of the Proxy Portfolio, and the percentage weight overlap between the holdings of the Proxy Portfolio and the fund’s Actual Portfolio holdings that formed the basis for its calculation of NAV at the end of the prior Business Day (the Portfolio Overlap), is available by visiting the fund’s website www.schwabassetmanagement.com.

Because environmental, social and governance (ESG) strategies exclude some securities, ESG-focused products may not be able to take advantage of the same opportunities or market trends as products that do not use such strategies. Additionally, the criteria used to select companies for investment may result in investing in securities, industries or sectors that underperform the market as a whole.

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MFR60994-13

00297770

Annual Report | February 29, 2024

Schwab Fundamental Index* ETFs

Schwab Fundamental U.S. Broad Market Index ETF	FNDB
Schwab Fundamental U.S. Large Company Index ETF	FNDX
Schwab Fundamental U.S. Small Company Index ETF	FNDA
Schwab Fundamental International Large Company Index ETF	FNDF
Schwab Fundamental International Small Company Index ETF	FNDC
Schwab Fundamental Emerging Markets Large Company Index ETF	FNDE

SCHWAB is a registered trademark of Charles Schwab & Co., Inc.
FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC.

No Action Required – Notice Regarding Shareholder Report Delivery

Beginning on July 24, 2024, fund shareholder reports will be streamlined to highlight key information deemed important for investors to assess

and monitor their fund investments. Other information, including financial statements, will not appear in the streamlined shareholder reports

but will available online and delivered free of charge upon request.

• If you already receive the full shareholder reports, you will receive the streamlined shareholder reports in the same way that you currently

receive the full shareholder reports (either in paper or electronically).

• If you currently receive a notification when a shareholder report is available on a fund’s website, beginning July 24, 2024, you will begin to

receive the streamlined shareholder report (in paper).

This page is intentionally left blank.

In This Report

Performance at a Glance	2
The Investment Environment	3
Fund Management	5
Performance and Fund Facts
Schwab Fundamental U.S. Broad Market Index ETF	6
Schwab Fundamental U.S. Large Company Index ETF	9
Schwab Fundamental U.S. Small Company Index ETF	12
Schwab Fundamental International Large Company Index ETF	15
Schwab Fundamental International Small Company Index ETF	18
Schwab Fundamental Emerging Markets Large Company Index ETF	21
Fund Expenses	24
Financial Statements and Portfolio Holdings
Schwab Fundamental U.S. Broad Market Index ETF	25
Schwab Fundamental U.S. Large Company Index ETF	44
Schwab Fundamental U.S. Small Company Index ETF	56
Schwab Fundamental International Large Company Index ETF	69
Schwab Fundamental International Small Company Index ETF	83
Schwab Fundamental Emerging Markets Large Company Index ETF	103
Financial Notes	112
Report of Independent Registered Public Accounting Firm	126
Other Federal Tax Information	127
Liquidity Risk Management Program	128
Trustees and Officers	129
Glossary	132

Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset Management®

Distributor: SEI Investments Distribution Co. (SIDCO)

Schwab Fundamental Index ETFs | Annual Report1

Schwab Fundamental Index ETFs

Performance at a Glance

Total Returns for the 12 Months Ended February 29, 2024
Schwab Fundamental U.S. Broad Market Index ETF (Ticker Symbol: FNDB)
Market Price Return1	19.08%
NAV Return1	19.24%
Russell RAFITM US Index	19.48%
Russell 3000® Index	28.60%
ETF Category: Morningstar Large Value2	13.91%
Performance Details	pages 6-8

Schwab Fundamental U.S. Large Company Index ETF (Ticker Symbol: FNDX)
Market Price Return1	20.04%
NAV Return1	20.06%
Russell RAFITM US Large Company Index	20.31%
Russell 1000® Index	29.81%
ETF Category: Morningstar Large Value2	13.91%
Performance Details	pages 9-11

Schwab Fundamental U.S. Small Company Index ETF (Ticker Symbol: FNDA)
Market Price Return1	9.69%
NAV Return1	9.64% 3
Russell RAFITM US Small Company Index	9.83%
Russell 2000® Index	10.05%
ETF Category: Morningstar Small Blend2	9.66%
Performance Details	pages 12-14

Total Returns for the 12 Months Ended February 29, 2024
Schwab Fundamental International Large Company Index ETF (Ticker Symbol: FNDF)
Market Price Return1	14.43%
NAV Return1	14.06%
Russell RAFITM Developed ex US Large Company Index (Net)*	14.07%
MSCI EAFE® Index (Net)*	14.41%
ETF Category: Morningstar Foreign Large Value2	11.32%
Performance Details	pages 15-17

Schwab Fundamental International Small Company Index ETF (Ticker Symbol: FNDC)
Market Price Return1	8.53%
NAV Return1	8.23%
Russell RAFITM Developed ex US Small Company Index (Net)*	8.46%
S&P Developed ex-U.S. Small Cap Index (Net)*	4.58%
ETF Category: Morningstar Foreign Small/Mid Value2	10.23%
Performance Details	pages 18-20

Schwab Fundamental Emerging Markets Large Company Index ETF (Ticker Symbol: FNDE)
Market Price Return1	12.52%
NAV Return1	13.17%
Russell RAFITM Emerging Markets Large Company Index (Net)*	14.39%
MSCI Emerging Markets Index (Net)*	8.73%
ETF Category: Morningstar Diversified Emerging Markets2	10.99%
Performance Details	pages 21-23

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 or sale of fund shares.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

Index ownership — The Schwab Fundamental Index ETFs 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 RAFI™ 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.

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

Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs and mutual funds within the category as of the report date.

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 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.

2Schwab Fundamental Index ETFs | Annual Report

Schwab Fundamental Index ETFs

The Investment Environment

For the 12-month reporting period ended February 29, 2024, U.S. and international equities rose. U.S. stocks posted strong gains despite inflation remaining elevated, the U.S. Federal Reserve (Fed) continuing to raise interest rates through July 2023, and three U.S. regional banks failing between early March and early May raising concerns about the stability of the banking sector. However, as the year wore on and inflation began to ease, as did the likelihood of further interest rate increases, stocks staged a strong upsurge—particularly in the last four months of the reporting period. International stocks, despite exhibiting higher volatility, followed the same trajectory for the most part. Outside the United States, the ongoing war between Russia and Ukraine and the Israel-Hamas war that broke out following Hamas’ attack on Israel in early October weighed on global activity. The U.S. dollar, as measured against a basket of international currencies, was volatile during the reporting period but ended the reporting period close to where it began. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 30.45%. Among U.S. stocks, large-cap stocks outperformed small-cap stocks, with the Russell 1000® Index and the Russell RAFI™ US Large Company Index returning 29.81% and 20.31%, respectively, and the Russell 2000® Index and Russell RAFI™ US Small Company Index returning 10.05% and 9.83%, respectively. U.S. growth stocks outperformed U.S. value stocks. The performance of traditional market-cap indices was largely driven by a few stocks which contributed to the deviation in performance between traditional market-cap indices and fundamental indices. Among international markets, the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, and the Russell RAFI™ Developed ex US Large Company Index (Net)* returned 14.41% and 14.07%, respectively, and the MSCI Emerging Markets Index (Net)* and the Russell RAFI™ Emerging Markets Large Company Index (Net)* returned 8.73% and 14.39%, respectively.

Economies around the world grew out of sync as they wrestled with record levels of government debt, rising geopolitical tensions, and weak productivity gains that stifled economic growth. The U.S. economy continued to show unexpected resilience over the reporting period. Surprisingly robust job growth and strong consumer spending helped propel U.S. gross domestic product (GDP) to a 4.9% annualized growth rate for the third quarter of 2023, up from roughly 2% for the prior two quarters, but GDP fell to 3.4% for the fourth quarter. Inflation remained above the Fed’s

Asset Class Performance Comparison % returns during the 12 months ended February 29, 2024

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.

Schwab Fundamental Index ETFs | Annual Report3

Schwab Fundamental Index ETFs

The Investment Environment (continued)

historical 2% target over the reporting period but generally declined as rents and wage growth eased, profit margins declined, and monetary policy remained restrictive. The unemployment rate remained low throughout the reporting period though ticked up slightly over the second half of the reporting period.

Oil prices were volatile during the reporting period but ended just slightly higher than where they began. Eurozone GDP expanded slightly for the first and second quarters of 2023 as inflationary pressures eased, contracted slightly for the third quarter of 2023 as financing conditions remained tight, and was flat for the fourth quarter of 2023. The United Kingdom posted a small gain in GDP growth for the first quarter of 2023, was flat for the second quarter of 2023, but contracted by small—but growing—percentages for the third and fourth quarters of 2023 amid a broad-based decline in services as well as a drop in household spending. In Japan, GDP rose for the first two quarters, primarily on rising exports and falling imports, contracted in the third quarter, and rose slightly for the fourth quarter amid elevated cost pressures and mounting global headwinds along with declines in private consumption. Among emerging markets, China’s GDP remained positive throughout 2023 as the government’s various policies seeking to help the economy have offset the impact of a prolonged property crisis and weak trade. India’s GDP also grew for all four quarters of 2023, driven primarily by robust performance in services, manufacturing, construction, finance and real estate, and utilities.

In its efforts to lower inflation, the Fed raised interest rates in March, May, and July 2023, increasing the federal funds rate from a range of 4.50% to 4.75% to a range of 5.25% to 5.50%. At its meetings in June, September, October, and December 2023, and January 2024, the Fed maintained the then current rates citing robust economic activity, strong—though moderating—job gains, and low unemployment while acknowledging tighter financial and credit conditions for households and businesses. The Fed also maintained its program to reduce the assets held on its balance sheet, though its balance sheet temporarily spiked in March when the Fed supported banks after the failure of two U.S. regional banks (a third U.S. regional bank failed in early May). Despite that spike, the Fed’s balance sheet assets declined over the reporting period. Central banks outside the United States also battled with persistently high, albeit waning, inflation. After raising rates five times between March and September, the European Central Bank held its rate steady since October as inflation and pricing pressures showed signs of continued easing. Similarly, the Bank of England raised its key interest rate four times between March and August, then held its rate steady through the remainder of the reporting period, leaving borrowing costs at a 15-year high. In contrast, despite inflationary pressures, the Bank of Japan continued to uphold its short-term interest rate target of -0.1%, unchanged since 2016, but maintained its pledge to ramp up stimulus “without hesitation” if needed. Monetary policy in emerging markets varied. Some central banks, including in Russia, raised their rates one or more times over the reporting period, some, including in India, held interest rates unchanged over the reporting period, and some, including in the People’s Bank of China, cut rates over the reporting period.

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