-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NPlc6aZs88jgZ/RK/AfXAHWKu/V3AEgJz1XuKLXXUk/sD/lEf26US6O8VV+BPG4p ArbPDGCs/A6TxFSffLEoTA== 0001047469-98-008868.txt : 19980309 0001047469-98-008868.hdr.sgml : 19980309 ACCESSION NUMBER: 0001047469-98-008868 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980306 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHWAB CHARLES CORP CENTRAL INDEX KEY: 0000316709 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 943025021 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 001-09700 FILM NUMBER: 98558989 BUSINESS ADDRESS: STREET 1: 101 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 4156277000 MAIL ADDRESS: STREET 1: 101 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94104 N-30D 1 N-30D SchwabFunds SCHWAB MUNICIPAL MONEY FUNDS - - SCHWAB MUNICIPAL MONEY FUND - - SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - - SCHWAB NEW YORK MUNICIPAL MONEY FUND Annual Report December 31, 1997 [Photo] Dear Shareholder, With the support of investors like you, SchwabFunds-Registered Trademark- continues to be among the largest and fastest-growing mutual fund families in the nation. Charles Schwab Investment Management, Inc. (CSIM) now manages over $56 billion in assets for nearly 3 million SchwabFunds shareholders and offers 31 funds spanning a spectrum of financial markets and investing styles. MAINTAINING A LONG-TERM PERSPECTIVE The recent volatility in both domestic and international markets reminds us that investments can move in both directions, down as well as up, especially in the short term. For this reason, it is extremely important that you develop and stick with a long-term investment plan that is appropriate for your personal goals, time horizon and tolerance for risk. While it's a good idea to periodically review your portfolio, I would encourage you to avoid making changes merely in response to short-term market movements. If you have any questions about your own investment plan or need help getting started, contact your local Schwab branch to set up a free consultation with one of our representatives. Additionally, I encourage you to visit our Web site at WWW.SCHWAB.COM/SCHWABFUNDS, where you'll find online resources and tools to help you evaluate or develop your investment plan. NEW INVESTMENT OPPORTUNITIES As a strong proponent of indexing as an investment strategy, we've expanded our indexing offering to include bond index funds. SchwabFunds is happy to introduce the Short-Term Bond Market Index Fund and the Total Bond Market Index Fund.(1) Each Fund is broad-based and diversified and seeks to track an index representing a broad spectrum of the bond market. These Funds are straightforward choices for your bond holdings and can represent the core component of your bond portfolio. In addition, we introduced two new municipal money funds in early February. The Schwab New Jersey Municipal Money Fund and the Schwab Pennsylvania Municipal Money Fund are designed to offer taxpayers in those states opportunities for additional tax savings.(2) For a free prospectus on the Schwab Bond Index Funds, the Schwab New Jersey Municipal Money Fund, the Schwab Pennsylvania Municipal Money Fund or any other SchwabFund, please call us toll-free at 1-800-435-4000. The prospectus contains more information, including fees and expenses. Please be sure to read the prospectus before investing. Thank you for placing your trust in SchwabFunds. We will continue to explore new strategies to help meet your investment needs and to provide you with timely information on SchwabFunds. /s/ Charles R. Schwab Charles R. Schwab (1) Formerly the Schwab Short/Intermediate Government Bond Fund and the Schwab Long-Term Government Bond Fund, respectively. (2) Income may be subject to the alternative minimum tax (AMT). TABLE OF CONTENTS
Page ---- A Word from SchwabFunds-Registered Trademark-............... 2 Schwab Municipal Money Fund................................. 3 Schwab California Municipal Money Fund...................... 5 Schwab New York Municipal Money Fund........................ 7 The Portfolio Management Team............................... 9 Market Overview............................................. 10 Questions to the Portfolio Management Team.................. 15 Glossary of Terms........................................... 19 Portfolio Summaries......................................... 20 Financial Statements and Notes.............................. 23
1 A WORD FROM SCHWABFUNDS-REGISTERED TRADEMARK- We're pleased to report on the performance of the three Schwab Municipal Money Funds listed below (the Funds) for the year ended December 31, 1997: - Schwab Municipal Money Fund - Schwab California Municipal Money Fund - Schwab New York Municipal Money Fund During the reporting period, the Funds continued to provide current tax-exempt income combined with capital stability and liquidity.(1) The following pages contain additional information on the Funds' performances during the reporting period and on their portfolios. Please remember that while the Funds seek to maintain a stable $1.00 share price to protect your principal, as with all money funds, there can be no assurance that the Funds will be able to maintain a $1.00 net asset value per share. It also is important to understand that your investment in the Funds is not insured or guaranteed by the U.S. Government. Each Fund has two classes of shares, Sweep Shares and Value Advantage Shares-TM-, which are both presented in this annual report. These two classes were designed for different purposes as explained in the following paragraphs. Depending on your cash needs and investment profile, either or both classes of the Funds may have a place in your investment plan. (1) Income from all of the Funds may be subject to alternative minimum tax (AMT) and income from the Schwab Municipal Money Fund may be subject to state and local income taxes. SWEEP SHARES Sweep Shares are designed for frequent access--such as your short-term daily cash needs. They can be linked to your Schwab account and contain a feature that automatically "sweeps" your uninvested cash balances into the Sweep Shares class of the fund you designate, according to the terms and conditions of your account. Likewise, your Sweep Shares balances can also be used to settle trades and automatically cover other day-to-day transactions, such as margin calls. VALUE ADVANTAGE SHARES Value Advantage Shares are designed to be longer-term money market investment vehicles for cash balances that do not require frequent access, and may help fill the cash equivalent sector in your asset allocation plan. There are higher minimum investment and balance requirements and other transaction restrictions associated with an investment in Value Advantage Shares that do not apply to Sweep Shares. Also, unlike the Sweep Shares, the Value Advantage Shares are not designed to automatically cover negative balances in your Schwab account. These policies can help to lower costs and provide higher yields. If you would like more information on either the Sweep Shares or the Value Advantage Shares of the Funds, or on other Schwab Money Funds, please call our toll-free number, 1-800-435-4000, and request a free prospectus which contains more information, including fees and expenses. Be sure to read the prospectus carefully before investing. 2 SCHWAB MUNICIPAL MONEY FUND PERFORMANCE REVIEW The table below presents 7-day yields as of the end of the reporting period for both the Sweep Shares and Value Advantage Shares-TM-. Please remember that money market fund yields fluctuate and past performance is no guarantee of future results. YIELD SUMMARY AS OF 12/31/97(2)
Sweep Value Advantage Shares Shares - ----------------------------------------------------------------------------------------- 7-Day Yield 3.37% 3.58% - ----------------------------------------------------------------------------------------- 7-Day Effective Yield 3.43% 3.65% - ----------------------------------------------------------------------------------------- 7-Day Taxable Equivalent Effective Yield(3) 5.68% 6.03% - -----------------------------------------------------------------------------------------
THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS If you're in a high tax bracket, the federal tax-exempt income which may be paid by the Schwab Municipal Money Fund can provide you with higher yields than those of taxable money funds on a taxable equivalent basis.(4) In fact, as shown below, compared with the average 5.20% 7-day effective yield for first-tier taxable money funds, the Sweep Shares and the Value Advantage Shares offered a yield advantage of 0.51% and 0.86%, respectively, on a taxable equivalent basis.(5) YIELDS AS OF 12/30/97
Sweep Value Advantage Shares Shares - ----------------------------------------------------------------------------------------- 7-Day Taxable Equivalent Effective Yield(3) 5.71% 6.06% - -----------------------------------------------------------------------------------------
(2) A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 12/31/97, the 7-day, 7-day effective and 7-day taxable equivalent effective yields for the Sweep Shares would have been, respectively: 3.14%, 3.19% and 5.28%. For the Value Advantage Shares, as of 12/31/97, the 7-day, 7-day effective and 7-day taxable equivalent effective yields would have been, respectively: 3.34%, 3.40% and 5.63%. (3) Taxable equivalent effective yield assumes a 1997 maximum federal regular income tax rate of 39.60%. (4) Income may be subject to state and local taxes and AMT. (5) Source: IBC Financial Data, Inc.'s weekly average 7-day effective yield for the 286 funds in the first-tier category of taxable money funds, as of 12/30/97. Past performance is no guarantee of future results. A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 12/30/97, the 7-day taxable equivalent effective yields for the Sweep Shares and the Value Advantage Shares would have been 5.31% and 5.65%, respectively. 3 SCHWAB MUNICIPAL MONEY FUND (continued) PORTFOLIO COMPOSITION The Fund invests in a diversified portfolio of high-quality, short-term municipal securities issued by or on behalf of states, territories, and possessions of the United States and their political subdivisions, agencies, and instrumentalities. The chart below illustrates the composition of the Fund's portfolio as of December 31, 1997 and is not indicative of holdings after that date. A complete listing of the securities in the Fund's portfolio as of December 31, 1997 is provided in the Schedule of Investments later in this report. SCHWAB MUNICIPAL MONEY FUND Portfolio Composition as of December 31, 1997 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Variable Rate Obligations 64% Tax-Exempt Commercial Paper 9% Anticipation Notes 10% Tender Option Bonds 4% Revenue Bonds 3% Mandatory & Optional Put Bonds 8% Other 2%
4 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND PERFORMANCE REVIEW The table below presents 7-day yields as of the end of the reporting period for both the Sweep Shares and Value Advantage Shares-TM-. Please remember that money market fund yields fluctuate and past performance is no guarantee of future results. YIELD SUMMARY AS OF 12/31/97(6)
Sweep Value Advantage Shares Shares - ----------------------------------------------------------------------------------------- 7-Day Yield 3.18% 3.38% - ----------------------------------------------------------------------------------------- 7-Day Effective Yield 3.23% 3.44% - ----------------------------------------------------------------------------------------- 7-Day Taxable Equivalent Effective Yield(7) 5.90% 6.26% - -----------------------------------------------------------------------------------------
THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS If you're in a high tax bracket, the double tax-exempt income which may be paid by the Schwab California Municipal Money Fund can provide you with higher yields than those of taxable money funds on a taxable equivalent basis.(8) In fact, as shown below, compared with the average 5.20% 7-day effective yield for first-tier taxable money funds, the Sweep Shares and the Value Advantage Shares offered a yield advantage of 0.73% and 1.10%, respectively, on a taxable equivalent basis.(9) YIELDS AS OF 12/30/97
Sweep Value Advantage Shares Shares - ----------------------------------------------------------------------------------------- 7-Day Taxable Equivalent Effective Yield(7) 5.93% 6.30% - -----------------------------------------------------------------------------------------
(6) A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 12/31/97, the 7-day, 7-day effective and 7-day taxable equivalent effective yields for the Sweep Shares would have been, respectively: 2.93%, 2.97% and 5.42%. For the Value Advantage Shares, as of 12/31/97, the 7-day, 7-day effective and 7-day taxable equivalent effective yields would have been, respectively: 3.13%, 3.18% and 5.81%. (7) Taxable equivalent effective yield assumes a 1997 maximum combined federal regular income tax and California state personal income tax rate of 45.22%. (8) Income may be subject to AMT. (9) Source: IBC Financial Data, Inc.'s weekly average 7-day effective yield for the 286 funds in the first-tier category of taxable money funds, as of 12/30/97. Past performance is no guarantee of future results. A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 12/30/97, the 7-day taxable equivalent effective yields for the Sweep Shares and the Value Advantage Shares would have been 5.46% and 5.84%, respectively. 5 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND (continued) PORTFOLIO COMPOSITION The Fund invests in a portfolio of high-quality, short-term municipal securities issued by the state of California, its agencies and instrumentalities. The chart below illustrates the composition of the Fund's portfolio as of December 31, 1997 and is not indicative of holdings after that date. A complete listing of the securities in the Fund's portfolio as of December 31, 1997 is provided in the Schedule of Investments later in this report. SCHWAB CALIFORNIA MUNICIPAL MONEY FUND Portfolio Composition as of December 31, 1997 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Variable Rate Obligations 59% Tax-Exempt Commercial Paper 20% Anticipation Notes 16% Other 3% General Obligations 2%
6 SCHWAB NEW YORK MUNICIPAL MONEY FUND PERFORMANCE REVIEW The table below presents 7-day yields as of the end of the reporting period for both the Sweep Shares and Value Advantage Shares-TM-. Please remember that money market fund yields fluctuate and past performance is no guarantee of future results. YIELD SUMMARY AS OF 12/31/97(10)
Sweep Value Advantage Shares Shares - --------------------------------------------------------------------------------------------- 7-Day Yield 3.23% 3.47% - --------------------------------------------------------------------------------------------- 7-Day Effective Yield 3.28% 3.53% - --------------------------------------------------------------------------------------------- 7-Day Taxable Equivalent Effective Yield(11) 6.12% 6.59% - ---------------------------------------------------------------------------------------------
THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS If you're in a high tax bracket, the triple tax-exempt income which may be paid by the Schwab New York Municipal Money Fund can provide you with higher yields than those of taxable money funds on a taxable equivalent basis.(12) In fact, as shown below, compared with the average 5.20% 7-day effective yield for first-tier taxable money funds, the Sweep Shares and the Value Advantage Shares offered a yield advantage of 0.98% and 1.43%, respectively, on a taxable equivalent basis.(13) YIELDS AS OF 12/30/97
Sweep Value Advantage Shares Shares - --------------------------------------------------------------------------------------------- 7-Day Taxable Equivalent Effective Yield(11) 6.18% 6.63% - ---------------------------------------------------------------------------------------------
(10) A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 12/31/97, the 7-day, 7-day effective and 7-day taxable equivalent effective yields for the Sweep Shares would have been, respectively: 2.93%, 2.97% and 5.54%. For the Value Advantage Shares, as of 12/31/97, the 7-day, 7-day effective and 7-day taxable equivalent effective yields would have been, respectively: 3.11%, 3.16% and 5.90%. (11) Taxable equivalent effective yield assumes a 1997 maximum combined federal regular income tax and New York state and New York City personal income tax rate of 46.43%. (12) Income may be subject to AMT. (13) Source: IBC Financial Data, Inc.'s weekly average 7-day effective yield for the 286 funds in the first-tier category of taxable money funds, as of 12/30/97. Past performance is no guarantee of future results. A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 12/30/97, the 7-day taxable equivalent effective yields for the Sweep Shares and the Value Advantage Shares would have been 5.58% and 5.95%, respectively. 7 SCHWAB NEW YORK MUNICIPAL MONEY FUND (continued) PORTFOLIO COMPOSITION The Fund invests in a portfolio of high-quality, short-term municipal securities issued by the state of New York, its agencies and instrumentalities. The chart below illustrates the composition of the Fund's portfolio as of December 31, 1997 and is not indicative of holdings after that date. A complete listing of the securities in the Fund's portfolio as of December 31, 1997 is provided in the Schedule of Investments later in this report. SCHWAB NEW YORK MUNICIPAL MONEY FUND Portfolio Composition as of December 31, 1997 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Variable Rate Obligations 56% Tax-Exempt Commercial Paper 13% Anticipation Notes 21% Other 4% Variable Rate Tender Option Bonds 3% Revenue Bonds 3%
8 THE PORTFOLIO MANAGEMENT TEAM STEPHEN B. WARD--Senior Vice President and Chief Investment Officer--has overall responsibility for the management of the Funds' portfolios. Steve joined Charles Schwab Investment Management, Inc. (CSIM) as Vice President and Portfolio Manager in April 1991 and was promoted to his current position in August 1993. Prior to joining CSIM, Steve was Vice President and Portfolio Manager at Federated Investors. WALTER BEVERIDGE--Portfolio Manager-- has managed the Schwab Municipal Money Fund since its inception in 1992 when he joined CSIM; the Schwab California Municipal Money Fund since its inception in 1992 until December 1997; and the Schwab New York Municipal Money Fund from its inception in 1995 until December 1997. During 1998, Walter also will be responsible for the management of the Schwab Pennsylvania Municipal Money Fund. Prior to joining CSIM, Walter was Portfolio Manager for the Benham Group. CHARLES SOULIS--Portfolio Manager-- began managing the Schwab California Municipal Money Fund and the Schwab New York Municipal Money Fund in December 1997. Prior to joining CSIM, Charles was Portfolio Manager for Wells Capital Management. During 1998, Charles also will be responsible for management of the Schwab New Jersey Municipal Money Fund. THE FOLLOWING MARKET OVERVIEW AND ANSWERS TO QUESTIONS ARE PROVIDED BY THE PORTFOLIO MANAGEMENT TEAM. A GLOSSARY OF TERMS IS PROVIDED FOR YOUR REFERENCE ON PAGE 19. 9 MARKET OVERVIEW EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
QUARTERLY GDP GROWTH RATE Q1 1990 3.9% Q2 1990 1.2% Q3 1990 -1.9% Q4 1990 -4.0% Q1 1991 -2.1% Q2 1991 1.8% Q3 1991 1.0% Q4 1991 1.0% Q1 1992 4.7% Q2 1992 2.5% Q3 1992 3.0% Q4 1992 4.3% Q1 1993 0.1% Q2 1993 2.0% Q3 1993 2.1% Q4 1993 5.3% Q1 1994 3.0% Q2 1994 4.7% Q3 1994 1.8% Q4 1994 3.6% Q1 1995 0.9% Q2 1995 0.3% Q3 1995 3.0% Q4 1995 2.2% Q1 1996 1.8% Q2 1996 6.0% Q3 1996 1.0% Q4 1996 4.3% Q1 1997 4.9% Q2 1997 3.3% Q3 1997 3.1% Q4 1997 4.3% Source: Bloomberg L.P.
- - The real GDP growth rate was 3.2% for 1996 and 3.8% for 1997--healthy rates of growth for the economy, well in excess of the Federal Reserve's projected non-inflationary growth rate of 2.2%. - - The direct impact of the economic problems of Pacific Rim countries on 1998 U.S. GDP growth is anticipated to be relatively minor. Estimates range from a reduction of 0.25% (as estimated by the Federal Reserve's Chairman Alan Greenspan) to 1%. At the time of this writing, the economy appears poised for continued growth, further extending the current economic expansion that began in 1991. - - Prior to the fourth quarter onset of the "Asian Flu," the strength of the economy and tight labor markets continued to lead to speculation of a potential acceleration in both wage and price inflation and whether a more restrictive Federal Reserve policy was imminent. Throughout most of the reporting period, the Federal Reserve was "on alert" for signs of accelerating inflation, whether caused by tight labor markets or consumer spending fueled by a strong stock market. With the onset of the economic problems in Pacific Rim countries and their potential impact on the U.S. economy, sentiment has shifted--there is no clear consensus whether the Federal Reserve's next move will be to raise or lower short-term rates. 10 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S. UNEMPLOYMENT RATE Jan-90 5.4% Feb-90 5.3% Mar-90 5.2% Apr-90 5.4% May-90 5.4% Jun-90 5.2% Jul-90 5.5% Aug-90 5.7% Sep-90 5.9% Oct-90 5.9% Nov-90 6.2% Dec-90 6.3% Jan-91 6.4% Feb-91 6.6% Mar-91 6.8% Apr-91 6.7% May-91 6.9% Jun-91 6.9% Jul-91 6.8% Aug-91 6.9% Sep-91 6.9% Oct-91 7.0% Nov-91 7.0% Dec-91 7.3% Jan-92 7.3% Feb-92 7.4% Mar-92 7.4% Apr-92 7.4% May-92 7.6% Jun-92 7.8% Jul-92 7.7% Aug-92 7.6% Sep-92 7.6% Oct-92 7.3% Nov-92 7.4% Dec-92 7.4% Jan-93 7.3% Feb-93 7.1% Mar-93 7.0% Apr-93 7.1% May-93 7.1% Jun-93 7.0% Jul-93 6.9% Aug-93 6.8% Sep-93 6.7% Oct-93 6.8% Nov-93 6.6% Dec-93 6.5% Jan-94 6.7% Feb-94 6.6% Mar-94 6.5% Apr-94 6.4% May-94 6.0% Jun-94 6.1% Jul-94 6.1% Aug-94 6.1% Sep-94 5.9% Oct-94 5.8% Nov-94 5.6% Dec-94 5.4% Jan-95 5.6% Feb-95 5.5% Mar-95 5.4% Apr-95 5.7% May-95 5.6% Jun-95 5.6% Jul-95 5.7% Aug-95 5.7% Sep-95 5.7% Oct-95 5.5% Nov-95 5.6% Dec-95 5.6% Jan-96 5.7% Feb-96 5.5% Mar-96 5.5% Apr-96 5.5% May-96 5.5% Jun-96 5.3% Jul-96 5.4% Aug-96 5.2% Sep-96 5.2% Oct-96 5.2% Nov-96 5.3% Dec-96 5.3% Jan-97 5.4% Feb-97 5.3% Mar-97 5.2% Apr-97 4.9% May-97 4.8% Jun-97 5.0% Jul-97 4.8% Aug-97 4.9% Sep-97 4.9% Oct-97 4.7% Nov-97 4.6% Dec-97 4.7% Source: Bloomberg L.P.
- - Job growth has remained robust and the unemployment rate reached a new low for this decade during the reporting period. In fact, the monthly fourth quarter rates of 4.7%, 4.6% and 4.7% for October, November and December, respectively, represent the lowest unemployment rates in 24 years. - - Although inflation has been well contained, the combination of a tight labor market (as evidenced by low unemployment rates) and strong economic growth typically leads to inflationary pressures on wages and, ultimately, prices. In this environment, productivity growth becomes particularly important. Strong productivity gains, such as we experienced in the second and third quarters, allow manufacturers to keep a lid on prices in the face of rising wages without trimming profit margins. 11 MARKET OVERVIEW (continued) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MEASURES OF INFLATION Monthly Consumer Price Index Quarterly Employment Cost Index Jan-90 5.2% 5.3% Feb-90 5.3% 5.3% Mar-90 5.2% 5.3% Apr-90 4.7% 5.4% May-90 4.4% 5.4% Jun-90 4.7% 5.4% Jul-90 4.8% 5.1% Aug-90 5.6% 5.1% Sep-90 6.2% 5.1% Oct-90 6.3% 4.8% Nov-90 6.3% 4.8% Dec-90 6.1% 4.8% Jan-91 5.7% 4.6% Feb-91 5.3% 4.6% Mar-91 4.9% 4.6% Apr-91 4.9% 4.5% May-91 5.0% 4.5% Jun-91 4.7% 4.5% Jul-91 4.4% 4.3% Aug-91 3.8% 4.3% Sep-91 3.4% 4.3% Oct-91 2.9% 4.2% Nov-91 3.0% 4.2% Dec-91 3.1% 4.2% Jan-92 2.6% 4.1% Feb-92 2.8% 4.1% Mar-92 3.2% 4.1% Apr-92 3.2% 3.5% May-92 3.0% 3.5% Jun-92 3.1% 3.5% Jul-92 3.2% 3.4% Aug-92 3.1% 3.4% Sep-92 3.0% 3.4% Oct-92 3.2% 3.5% Nov-92 3.0% 3.5% Dec-92 2.9% 3.5% Jan-93 3.3% 3.4% Feb-93 3.2% 3.4% Mar-93 3.1% 3.4% Apr-93 3.2% 3.6% May-93 3.2% 3.6% Jun-93 3.0% 3.6% Jul-93 2.8% 3.6% Aug-93 2.8% 3.6% Sep-93 2.7% 3.6% Oct-93 2.8% 3.4% Nov-93 2.7% 3.4% Dec-93 2.7% 3.4% Jan-94 2.5% 3.2% Feb-94 2.5% 3.2% Mar-94 2.5% 3.2% Apr-94 2.4% 3.1% May-94 2.3% 3.1% Jun-94 2.5% 3.1% Jul-94 2.8% 3.1% Aug-94 2.9% 3.1% Sep-94 3.0% 3.1% Oct-94 2.6% 3.0% Nov-94 2.7% 3.0% Dec-94 2.7% 3.0% Jan-95 2.8% 3.0% Feb-95 2.9% 3.0% Mar-95 2.9% 3.0% Apr-95 3.1% 3.0% May-95 3.2% 3.0% Jun-95 3.0% 3.0% Jul-95 2.8% 2.8% Aug-95 2.6% 2.8% Sep-95 2.5% 2.8% Oct-95 2.8% 2.8% Nov-95 2.6% 2.8% Dec-95 2.5% 2.8% Jan-96 2.7% 2.9% Feb-96 2.7% 2.9% Mar-96 2.8% 2.9% Apr-96 2.9% 2.9% May-96 2.9% 2.9% Jun-96 2.8% 2.9% Jul-96 3.0% 2.9% Aug-96 2.9% 2.9% Sep-96 3.0% 2.9% Oct-96 3.0% 3.0% Nov-96 3.3% 3.0% Dec-96 3.3% 3.0% Jan-97 3.0% 2.8% Feb-97 3.0% 2.8% Mar-97 2.8% 2.8% Apr-97 2.5% 2.8% May-97 2.2% 2.8% Jun-97 2.3% 2.8% Jul-97 2.2% 3.0% Aug-97 2.2% 3.0% Sep-97 2.2% 3.0% Oct-97 2.1% 3.2% Nov-97 1.8% 3.2% Dec-97 1.7% 3.2%
- - Both the Employment Cost Index and Consumer Price Index (CPI) remained in check throughout 1997, reflecting continued low levels of inflation. - - The CPI rose 1.7% during 1997--the lowest rate of increase since 1986. Its core rate (which excludes the more volatile food and energy components) rose 2.2%--the lowest rate of increase since 1965. - - Even though current levels of inflation are very low, the Federal Reserve indicated throughout most of the reporting period that the economy remains in the zone where inflation risks are increasing, and that it is poised to act preemptively by raising interest rates if necessary. The Federal Reserve did take action earlier this year in March, increasing the Federal Funds Rate by 0.25% to 5.50%. At the end of the reporting period, however, sentiment was mixed regarding the direction and timing of the Federal Reserve's next action. 12 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
YIELDS ON 90-DAY COMMERCIAL PAPER AND 3-MONTH TREASURY BILLS FOR THE PERIOD 1/2/97 - 12/31/97 3 Month Treasury Bill 90 Day Commercial Paper 1/2/97 5.18% 5.30% 1/3/97 5.16% 5.29% 1/6/97 5.17% 5.32% 1/7/97 5.15% 5.32% 1/8/97 5.15% 5.29% 1/9/97 5.12% 5.30% 1/10/97 5.16% 5.30% 1/13/97 5.17% 5.34% 1/14/97 5.16% 5.29% 1/15/97 5.14% 5.31% 1/16/97 5.16% 5.29% 1/17/97 5.15% 5.30% 1/20/97 5.15% 5.30% 1/21/97 5.15% 5.29% 1/22/97 5.16% 5.30% 1/23/97 5.16% 5.27% 1/24/97 5.16% 5.32% 1/27/97 5.19% 5.32% 1/28/97 5.19% 5.32% 1/29/97 5.17% 5.31% 1/30/97 5.17% 5.28% 1/31/97 5.15% 5.30% 2/3/97 5.11% 5.30% 2/4/97 5.13% 5.28% 2/5/97 5.12% 5.28% 2/6/97 5.13% 5.30% 2/7/97 5.12% 5.27% 2/10/97 5.13% 5.26% 2/11/97 5.14% 5.29% 2/12/97 5.14% 5.29% 2/13/97 5.12% 5.27% 2/14/97 5.08% 5.26% 2/17/97 5.09% 5.26% 2/18/97 5.09% 5.25% 2/19/97 5.10% 5.25% 2/20/97 5.08% 5.26% 2/21/97 5.09% 5.20% 2/24/97 5.11% 5.22% 2/25/97 5.15% 5.24% 2/26/97 5.18% 5.23% 2/27/97 5.20% 5.38% 2/28/97 5.22% 5.35% 3/3/97 5.23% 5.37% 3/4/97 5.23% 5.29% 3/5/97 5.19% 5.30% 3/6/97 5.21% 5.29% 3/7/97 5.21% 5.29% 3/10/97 5.19% 5.29% 3/11/97 5.17% 5.30% 3/12/97 5.19% 5.30% 3/13/97 5.23% 5.30% 3/14/97 5.23% 5.32% 3/17/97 5.25% 5.34% 3/18/97 5.29% 5.37% 3/19/97 5.29% 5.38% 3/20/97 5.34% 5.39% 3/21/97 5.40% 5.50% 3/24/97 5.38% 5.50% 3/25/97 5.39% 5.52% 3/26/97 5.34% 5.53% 3/27/97 5.37% 5.54% 3/28/97 5.37% 5.54% 3/31/97 5.32% 5.55% 4/1/97 5.30% 5.53% 4/2/97 5.29% 5.58% 4/3/97 5.25% 5.55% 4/4/97 5.27% 5.54% 4/7/97 5.27% 5.61% 4/8/97 5.23% 5.59% 4/9/97 5.22% 5.58% 4/10/97 5.29% 5.53% 4/11/97 5.28% 5.52% 4/14/97 5.29% 5.58% 4/15/97 5.29% 5.56% 4/16/97 5.29% 5.58% 4/17/97 5.29% 5.58% 4/18/97 5.28% 5.57% 4/21/97 5.26% 5.60% 4/22/97 5.32% 5.60% 4/23/97 5.34% 5.62% 4/24/97 5.30% 5.57% 4/25/97 5.31% 5.54% 4/28/97 5.30% 5.61% 4/29/97 5.26% 5.56% 4/30/97 5.23% 5.57% 5/1/97 5.21% 5.60% 5/2/97 5.22% 5.57% 5/5/97 5.11% 5.60% 5/6/97 5.17% 5.56% 5/7/97 5.22% 5.59% 5/8/97 5.21% 5.63% 5/9/97 5.16% 5.55% 5/12/97 5.15% 5.59% 5/13/97 5.20% 5.57% 5/14/97 5.16% 5.57% 5/15/97 5.11% 5.58% 5/16/97 5.18% 5.58% 5/19/97 5.30% 5.56% 5/20/97 5.20% 5.59% 5/21/97 5.12% 5.59% 5/22/97 5.17% 5.59% 5/23/97 5.16% 5.54% 5/26/97 5.16% 5.54% 5/27/97 5.11% 5.56% 5/28/97 5.13% 5.53% 5/29/97 5.01% 5.57% 5/30/97 4.94% 5.54% 6/2/97 4.84% 5.59% 6/3/97 5.07% 5.57% 6/4/97 5.07% 5.56% 6/5/97 5.11% 5.52% 6/6/97 5.04% 5.54% 6/9/97 5.03% 5.54% 6/10/97 5.03% 5.53% 6/11/97 4.96% 5.55% 6/12/97 4.95% 5.52% 6/13/97 4.96% 5.53% 6/16/97 4.97% 5.54% 6/17/97 5.04% 5.54% 6/18/97 5.07% 5.54% 6/19/97 5.07% 5.52% 6/20/97 5.06% 5.53% 6/23/97 5.15% 5.54% 6/24/97 5.18% 5.54% 6/25/97 5.10% 5.52% 6/26/97 5.12% 5.51% 6/27/97 5.14% 5.53% 6/30/97 5.17% 5.56% 7/1/97 5.23% 5.52% 7/2/97 5.22% 5.56% 7/3/97 5.14% 5.52% 7/4/97 5.13% 5.52% 7/7/97 5.07% 5.52% 7/8/97 5.11% 5.51% 7/9/97 5.10% 5.49% 7/10/97 5.15% 5.47% 7/11/97 5.13% 5.49% 7/14/97 5.14% 5.50% 7/15/97 5.19% 5.50% 7/16/97 5.18% 5.50% 7/17/97 5.21% 5.48% 7/18/97 5.24% 5.47% 7/21/97 5.27% 5.48% 7/22/97 5.23% 5.50% 7/23/97 5.19% 5.44% 7/24/97 5.21% 5.45% 7/25/97 5.22% 5.47% 7/28/97 5.23% 5.48% 7/29/97 5.24% 5.45% 7/30/97 5.23% 5.47% 7/31/97 5.23% 5.45% 8/1/97 5.27% 5.48% 8/4/97 5.26% 5.48% 8/5/97 5.29% 5.47% 8/6/97 5.29% 5.48% 8/7/97 5.30% 5.46% 8/8/97 5.28% 5.49% 8/11/97 5.29% 5.48% 8/12/97 5.32% 5.51% 8/13/97 5.31% 5.49% 8/14/97 5.33% 5.49% 8/15/97 5.24% 5.49% 8/18/97 5.27% 5.50% 8/19/97 5.22% 5.48% 8/20/97 5.23% 5.49% 8/21/97 5.24% 5.49% 8/22/97 5.23% 5.45% 8/25/97 5.28% 5.46% 8/26/97 5.27% 5.50% 8/27/97 5.28% 5.49% 8/28/97 5.21% 5.46% 8/29/97 5.22% 5.48% 9/1/97 5.22% 5.48% 9/2/97 5.19% 5.52% 9/3/97 5.13% 5.48% 9/4/97 5.14% 5.51% 9/5/97 5.15% 5.50% 9/8/97 5.14% 5.49% 9/9/97 5.12% 5.50% 9/10/97 5.09% 5.48% 9/11/97 5.13% 5.47% 9/12/97 5.09% 5.48% 9/15/97 5.13% 5.49% 9/16/97 5.08% 5.49% 9/17/97 5.09% 5.48% 9/18/97 5.08% 5.48% 9/19/97 5.04% 5.45% 9/22/97 5.02% 5.48% 9/23/97 4.98% 5.49% 9/24/97 4.92% 5.45% 9/25/97 4.91% 5.46% 9/26/97 4.98% 5.48% 9/29/97 4.99% 5.50% 9/30/97 5.10% 5.48% 10/1/97 5.10% 5.46% 10/2/97 5.06% 5.49% 10/3/97 5.01% 5.47% 10/6/97 4.97% 5.47% 10/7/97 5.05% 5.46% 10/8/97 5.09% 5.47% 10/9/97 5.11% 5.48% 10/10/97 5.12% 5.50% 10/13/97 5.12% 5.50% 10/14/97 5.07% 5.49% 10/15/97 5.04% 5.51% 10/16/97 5.06% 5.48% 10/17/97 5.04% 5.54% 10/20/97 5.03% 5.54% 10/21/97 5.10% 5.54% 10/22/97 5.15% 5.52% 10/23/97 5.12% 5.54% 10/24/97 5.13% 5.54% 10/27/97 5.03% 5.55% 10/28/97 5.26% 5.49% 10/29/97 5.14% 5.54% 10/30/97 5.14% 5.53% 10/31/97 5.20% 5.56% 11/3/97 5.23% 5.54% 11/4/97 5.25% 5.53% 11/5/97 5.24% 5.54% 11/6/97 5.31% 5.53% 11/7/97 5.29% 5.55% 11/10/97 5.33% 5.54% 11/11/97 5.31% 5.54% 11/12/97 5.26% 5.62% 11/13/97 5.26% 5.59% 11/14/97 5.25% 5.67% 11/17/97 5.30% 5.63% 11/18/97 5.29% 5.62% 11/19/97 5.27% 5.61% 11/20/97 5.27% 5.64% 11/21/97 5.24% 5.61% 11/24/97 5.27% 5.63% 11/25/97 5.29% 5.65% 11/26/97 5.21% 5.63% 11/27/97 5.22% 5.63% 11/28/97 5.20% 5.63% 12/1/97 5.23% 5.64% 12/2/97 5.25% 5.67% 12/3/97 5.23% 5.67% 12/4/97 5.25% 5.67% 12/5/97 5.31% 5.69% 12/8/97 5.32% 5.67% 12/9/97 5.23% 5.72% 12/10/97 5.18% 5.69% 12/11/97 5.17% 5.68% 12/12/97 5.17% 5.68% 12/15/97 5.22% 5.70% 12/16/97 5.20% 5.69% 12/17/97 5.24% 5.66% 12/18/97 5.23% 5.64% 12/19/97 5.38% 5.62% 12/22/97 5.43% 5.67% 12/23/97 5.47% 5.64% 12/24/97 5.37% 5.69% 12/25/97 5.37% 5.69% 12/26/97 5.33% 5.67% 12/29/97 5.39% 5.65% 12/30/97 5.38% 5.65% 12/31/97 5.37% 5.57% Source: Bloomberg L.P.
- - Commercial paper rates experienced a moderate increase in the second quarter (following the March Federal Funds Rate hike) and again in the fourth quarter. Throughout most of the reporting period, however, rates remained relatively stable, as illustrated by the 90-day commercial paper yields in the above chart. More notably, the spread between commercial paper and U.S. Treasury bill yields widened significantly during the second quarter and continued to exhibit volatility during the remainder of the reporting period. - - Initially, the widening of the spread between U.S. Treasury bill and commercial paper yields, which made U.S. Treasury bills relatively less attractive than commercial paper, resulted from a reduced supply of U.S. Treasury bills. This reduction in supply was caused by unexpectedly large federal tax receipts collected in April, which led to lower government financing needs. In other words, the spread widening was the result of supply and demand conditions in the U.S. Treasury bill market, not the result of credit concerns in the commercial paper market. - - During September, the spread again widened. This time, however, it was primarily a result of what is typically referred to as a "flight to quality." Investors, concerned about the volatility in the foreign equity markets, sought refuge in U.S. Treasury securities, thereby driving down their yields relative to those of commercial paper. 13 MARKET OVERVIEW (continued) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
90-DAY MUNICIPAL COMMERCIAL PAPER FOR THE PERIOD 1/7/97 - 12/30/97 1/7/97 3.25% 1/14/97 3.45% 1/21/97 3.45% 1/28/97 3.55% 2/4/97 3.40% 2/11/97 3.45% 2/18/97 3.35% 2/25/97 3.40% 3/4/97 3.35% 3/11/97 3.30% 3/18/97 3.40% 3/25/97 3.50% 4/1/97 3.45% 4/8/97 3.65% 4/15/97 3.60% 4/22/97 3.70% 4/29/97 3.70% 5/6/97 3.65% 5/13/97 3.75% 5/20/97 3.70% 5/27/97 3.70% 6/3/97 3.65% 6/10/97 3.70% 6/17/97 3.75% 6/24/97 3.70% 7/1/97 3.60% 7/8/97 3.60% 7/16/97 3.65% 7/23/97 3.65% 7/30/97 3.65% 8/6/97 3.60% 8/13/97 3.60% 8/20/97 3.60% 8/27/97 3.65% 9/3/97 3.70% 9/10/97 3.80% 9/17/97 3.80% 9/24/97 3.80% 10/1/97 3.65% 10/8/97 3.65% 10/15/97 3.75% 10/22/97 3.75% 10/29/97 3.75% 11/5/97 3.70% 11/12/97 3.75% 11/19/97 3.75% 11/26/97 3.80% 12/3/97 3.60% 12/10/97 3.60% 12/17/97 3.75% 12/23/97 3.75% 12/30/97 3.75% Source: Lehman Brothers, Inc.
- - Municipal commercial paper yields increased slightly during the weeks following the Federal Funds Rate hike in March but then remained relatively stable throughout the remainder of the reporting period, as illustrated in the above chart. In fact, municipal commercial paper yields exhibited a pattern similar to that of taxable commercial paper yields during the reporting period, as shown in the chart on page 13. 14 QUESTIONS TO THE PORTFOLIO MANAGEMENT TEAM Q HOW HAS THE PORTFOLIO MANAGEMENT TEAM ADJUSTED THE FUNDS' PORTFOLIOS TO RESPOND TO CHANGES IN INTEREST RATES? A We managed the dollar-weighted average maturity (DWAM) for all three Funds' portfolios to capitalize on the seasonal cycles typical of short-term municipal securities markets. Anticipating lower rates for demand notes issued in early 1998, we extended the maturities of the Funds' portfolios at the end of the reporting period, locking in higher rates and insulating the Funds from the lower rates typical of demand notes issued in January. Throughout much of the reporting period, all three Funds maintained a DWAM that was comparable to those of other funds with similar investment objectives. During the reporting period we took several opportunities to extend the DWAM of the Funds for other reasons: 1) Our expectation that the Federal Reserve would not raise the Federal Funds Rate any further after the 0.25% increase on March 25, 1997. 2) A plentiful supply of municipal money market instruments during note season (in June). This period is usually followed by a decline in rates as the supply of municipal securities dwindles. The following table shows the DWAM for each of the three Funds at the beginning, middle and end of the reporting period:
Schwab Schwab Schwab California New York Municipal Municipal Municipal Money Fund Money Fund Money Fund ------------ ------------ ------------ 12/31/96 50 Days 47 Days 51 Days 6/30/97 64 Days 53 Days 52 Days 12/31/97 48 Days 51 Days 63 Days
Q WHAT IMPACT HAVE THE ECONOMIC PROBLEMS IN THE PACIFIC RIM HAD ON THE MANAGEMENT OF THE FUNDS' PORTFOLIOS? A Beginning in the fourth quarter of 1997, many Asian countries experienced economic problems and severe currency devaluations--collectively referred to as the "Asian Flu." Although it is a serious global problem, and will no doubt have a credit impact on issuers of securities in those countries and their economies, it has not had a significant effect on issuers of what typically are considered money market-eligible securities. Nevertheless, we continue, as always, to carefully monitor the creditworthiness of any issuers of securities considered for investment in the Schwab Municipal Money Funds. As we have discussed in previous reports, all three Schwab Municipal Money Funds frequently own municipal securities that are insured or backed by a letter of credit issued by a first-tier financial institution, which may be foreign-based. These arrangements are referred to as "credit enhancements" because they provide incremental levels of creditworthiness. During the reporting period, all three Schwab Municipal Money Funds did, as a precaution, reduce their exposure to Japanese issuers of credit enhancements. The 15 QUESTIONS TO THE PORTFOLIO MANAGEMENT TEAM (continued) following table shows the Funds' holdings of securities with Japanese credit enhancements as of December 31, 1997 (expressed as a percentage of each Fund's net assets). As part of our regular credit review process, we continually monitor the credit quality of both the enhancement providers and the issuers of the Funds' portfolio securities.
12/31/97 ------------ Schwab Municipal Money Fund 0.90% Schwab California Municipal Money Fund 4.49% Schwab New York Municipal Money Fund 2.90%
There has been a great deal of speculation as to what impact the "Asian Flu" will have on U.S. economic growth, future inflation, and Federal Reserve policy. U.S. manufacturers of goods exported to Pacific Rim countries may be affected. At this time, the range of projections for the potential reduction in 1998 GDP growth is generally between 0.25% and 1% while expectations for 1998 earnings growth of the S&P 500 have been pared back from between 10% and 14% to forecasts between 5.5% and 10%. Expectations that the Federal Reserve will raise short-term rates have shifted to expectations that it may instead actually lower short-term rates. Q WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN CALIFORNIA? A California appears to be embarking on its fifth year of economic recovery. As noted in the Governor's Budget Highlights, 1997 was the best year in this decade for the state's economy, with employment growth exceeding 3%, personal income up by more than 7%, and a seven-year low in the unemployment rate. Looking forward, it is anticipated that California could see continued moderate growth across most industry sectors, with some, such as those heavily dependent on exporting goods and services to Asia, growing at a much slower pace. As noted in the Governor's 1998-99 Budget Proposal, the effect on California of the economic weakness in Asia may be somewhat offset by strong export growth to Mexico and increasing exports to Europe. The state's continued economic improvement has allowed for an accumulation of budget reserves and an easing of some of the spending restrictions imposed during the last recession. For the 1997-98 budget year, the Governor projects budget reserves of more than 1% of total expenditures. However, as in prior years, budget adjustments may be necessary to keep spending in line with revenues. Lawmakers will continue to address the challenge of balancing mandated spending requirements for education and public safety against the need for maintaining and upgrading public infrastructure. Therefore, the state's financial position may be somewhat static over the next 12 months. We are satisfied that the California securities held by the Fund represent minimal credit risk and we will, as always, continue to monitor the state's economic situation closely. California's current credit ratings are A1 from Moody's Investor Service, A+ from Standard & Poor's Corporation and AA- from Fitch IBCA, Inc., three well-known rating agencies. 16 Q WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN NEW YORK? A A diverse economic base and the central role New York City continues to play in international finance, tourism and other service-related businesses support New York State's satisfactory credit quality. Although the state entered the 1990 recession earlier than others, its recovery has been slower and less robust. For the 1997-98 fiscal year the state predicts a 1.4% increase in employment, which marks the highest level of job growth since 1988, the year prior to the last recession. Economic growth may continue to be constrained by ongoing structural changes in the economy, such as corporate downsizing or relocation and cutbacks in defense spending. In spite of reported budgetary surpluses in 1993, 1994 and 1996, New York still faces the challenge of resolving persistent general fund imbalances. In early August 1997, after the longest delay in the state's history, Governor George Pataki and the legislature agreed on a 1998 budget that will result in slightly higher New York state spending than in 1997. The success of this budget will depend largely on the state's ability to achieve projected economic growth levels and implement its budget strategies in a smooth and timely fashion. Continued major delays in adoption of the budget and other administrative roadblocks, however, might make it difficult for the state to implement many of the new policies. Therefore, while the state may see higher revenues over the next 12 months, it may not be able to make a significant improvement in its general fund reserves. We are satisfied that the New York securities held by the Fund represent minimal credit risk and we will continue to monitor the state's economic situation closely. New York's current credit ratings are A2 from Moody's Investor Service, A from Standard & Poor's Corporation and A+ from Fitch IBCA, Inc., three well-known rating agencies. Q WHAT FACTORS SHOULD I CONSIDER WHEN SELECTING MONEY FUNDS AT SCHWAB? A Schwab offers two types of money funds, Sweep Investments-TM- and Value Advantage Investments-Registered Trademark-, both of which offer taxable and tax-advantaged alternatives. Depending on your investment objectives and risk tolerance, either or both types of funds may have a place in your investment plan. The Schwab Municipal Money Funds, which are included in this report, offer both alternatives to investors. Sweep Investments can be linked to your Schwab account to help keep your money invested and working for you. These Funds automatically invest or "sweep" uninvested cash balances from your Schwab account into the sweep money fund you select, according to the terms and conditions of your account. Sweep Investments are available to settle trades and cover other day-to-day transactions. It's a smart, convenient way to manage your short-term cash. Value Advantage Investments offer the advantage of higher yields to investors with larger cash balances that don't require frequent access and may help fulfill the cash equivalent sector of your asset allocation 17 QUESTIONS TO THE PORTFOLIO MANAGEMENT TEAM (continued) plan. With higher minimum investment and account balance requirements and other transaction restrictions designed to minimize operating expenses, Value Advantage Investments can offer the potential of higher yields to investors. It also is important to note that, unlike Sweep Investments, the Value Advantage Investments are not designed to automatically cover negative balances in your Schwab account. In addition to the Schwab Municipal Money Funds, we offer the Schwab Value Advantage Money Fund and three taxable sweep money funds as follows: - - SCHWAB MONEY MARKET FUND invests in money market securities, including high- quality commercial paper and certificates of deposit. - - SCHWAB GOVERNMENT MONEY FUND invests exclusively in obligations issued or guaranteed by the U.S. Government, its agencies and instrumentalities, and repurchase agreements. - - SCHWAB U.S. TREASURY MONEY FUND invests exclusively in U.S. Treasury notes, bills or other direct obligations of the U.S. Government, and pays income free from state and local taxes in the vast majority of states. If you would like more information on any of the Schwab Money Funds, please call our toll-free number, 1-800-435-4000, and request a free prospectus which contains more information, including fees and expenses. Please be sure to read the prospectus carefully before investing. 18 GLOSSARY OF TERMS COMMERCIAL PAPER--Short-term, interest-paying obligations issued by banks, corporations and other borrowers. CREDIT ENHANCEMENTS--A bank letter of credit, purchase agreement, insurance, line of credit or other instrument that provides an additional level of financial support for debt securities to supplement the creditworthiness of the issuer. DOLLAR-WEIGHTED AVERAGE MATURITY (DWAM)--A measure of the average maturity of a mutual fund's entire portfolio, weighted by the value of its individual holdings. FEDERAL FUNDS RATE--A key interest rate charged by banks when lending money to other banks overnight. FEDERAL RESERVE--The central bank of the United States that establishes policies on bank reserves and regulations, determines the discount rate and tightens or loosens the availability of credit. FIRST-TIER SECURITY--A security rated in the highest credit rating category. MATURITY--The length of time remaining until the issuer of a debt security must repay the principal amount. REAL GDP--The national Gross Domestic Product (GDP)--the total value of all goods and services produced in the United States over a specific period of time and adjusted for the rate of inflation to allow meaningful year-to-year comparisons. YIELD--The actual income earned on an investment over a stated period of time and annualized (assumed to be generated over a one-year period). An EFFECTIVE YIELD assumes that the income earned is reinvested. ALTERNATIVE MINIMUM TAX (AMT)--A tax on income in addition to regular income taxes designed to ensure that very wealthy individuals and corporations pay at least some income tax each year. TAXABLE EQUIVALENT YIELD--The return you would have to realize on a fully taxable investment in order to equal a specified tax-exempt yield; this hypothetical yield varies according to your income tax bracket. 19 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- PORTFOLIO SUMMARY ASSET GROWTH
Total Total Percentage Net Assets Net Assets Growth Over as of 12/31/97 as of 12/31/96 Reporting (000s) (000s) Period - ----------------------------------------------------- $5,509,070 $4,476,999 23% - -----------------------------------------------------
AVERAGE YIELDS FOR THE YEAR ENDED DECEMBER 31, 1997* SWEEP SHARES
Last Last Last Seven Days Three Months Twelve Months - ---------------------------------------------------- 3.37% 3.17% 3.06% - ----------------------------------------------------
VALUE ADVANTAGE SHARES-TM-
Last Last Last Seven Days Three Months Twelve Months - ---------------------------------------------------- 3.58% 3.38% 3.27% - ----------------------------------------------------
MATURITY SCHEDULE PERCENT OF TOTAL INVESTMENTS
Maturity Range 3/31/97 6/30/97 9/30/97 12/31/97 - --------------------------------------------------------------------- 0 - 15 Days 71.5% 68.5% 73.3% 69.6% 16 - 30 Days 2.0 3.5 1.7 0.0 31 - 60 Days 9.7 4.0 2.3 7.4 61 - 90 Days 3.7 5.3 4.3 4.2 91 - 120 Days 3.6 0.2 0.6 0.7 Over 120 Days 9.5 18.5 17.8 18.1 Weighted Average 37 Days 64 Days 53 Days 48 Days - ---------------------------------------------------------------------
*A portion of the Fund's expenses were reduced during the periods. Had these expenses not been reduced, yields would have been lower. - -------------------------------------------------------------------------------- 20 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- PORTFOLIO SUMMARY ASSET GROWTH
Total Total Percentage Net Assets Net Assets Growth Over as of 12/31/97 as of 12/31/96 Reporting (000s) (000s) Period - ----------------------------------------------------- $3,091,337 $2,323,598 33% - -----------------------------------------------------
AVERAGE YIELDS FOR THE YEAR ENDED DECEMBER 31, 1997* SWEEP SHARES
Last Last Last Seven Days Three Months Twelve Months - ---------------------------------------------------- 3.18% 3.00% 2.91% - ----------------------------------------------------
VALUE ADVANTAGE SHARES-TM-
Last Last Last Seven Days Three Months Twelve Months - ---------------------------------------------------- 3.38% 3.20% 3.11% - ----------------------------------------------------
MATURITY SCHEDULE PERCENT OF TOTAL INVESTMENTS
Maturity Range 3/31/97 6/30/97 9/30/97 12/31/97 - --------------------------------------------------------------------- 0 - 15 Days 74.2% 69.7% 69.6% 61.9% 16 - 30 Days 0.0 1.9 4.7 0.2 31 - 60 Days 7.0 9.8 4.3 14.1 61 - 90 Days 5.0 5.5 5.9 4.1 91 - 120 Days 7.3 1.0 0.8 0.3 Over 120 Days 6.5 12.1 14.7 19.4 Weighted Average 31 Days 53 Days 53 Days 51 Days - ---------------------------------------------------------------------
*A portion of the Fund's expenses were reduced during the periods. Had these expenses not been reduced, yields would have been lower. - -------------------------------------------------------------------------------- 21 SCHWAB NEW YORK MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- PORTFOLIO SUMMARY ASSET GROWTH
Total Total Percentage Net Assets Net Assets Growth Over as of 12/31/97 as of 12/31/96 Reporting (000s) (000s) Period - ---------------------------------------------------- $482,758 $337,295 43% - ----------------------------------------------------
AVERAGE YIELDS FOR THE YEAR ENDED DECEMBER 31, 1997* SWEEP SHARES
Last Last Last Seven Days Three Months Twelve Months - ---------------------------------------------------- 3.23% 3.05% 2.92% - ----------------------------------------------------
VALUE ADVANTAGE SHARES-TM-
Last Last Last Seven Days Three Months Twelve Months - ---------------------------------------------------- 3.47% 3.29% 3.16% - ----------------------------------------------------
MATURITY SCHEDULE PERCENT OF TOTAL INVESTMENTS
Maturity Range 3/31/97 6/30/97 9/30/97 12/31/97 - --------------------------------------------------------------------- 0 - 15 Days 63.8% 69.9% 71.0% 61.0% 16 - 30 Days 2.7 1.5 5.2 0.0 31 - 60 Days 6.5 6.6 4.5 11.5 61 - 90 Days 4.9 1.2 2.6 1.9 91 - 120 Days 6.7 2.0 1.2 3.3 Over 120 Days 15.4 18.8 15.5 22.3 Weighted Average 50 Days 52 Days 50 Days 63 Days - ---------------------------------------------------------------------
*A portion of the Fund's expenses were reduced during the periods. Had these expenses not been reduced, yields would have been lower. - -------------------------------------------------------------------------------- 22 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- VARIABLE RATE OBLIGATIONS--64.6%(a) ALABAMA--1.5% Birmingham, Alabama Unlimited General Obligation Refunding Bonds Series 1995 / (First Alabama Bank LOC) 4.15%, 01/07/98 $ 4,000 $ 4,000 Birmingham, Alabama Variable Rate General Obligation Bonds Series 1992A / (Regions Bank LOC) 3.75%, 01/07/98 5,600 5,600 Citronelle, Alabama Industrial Development Board Pollution Control Revenue Refunding Bonds (AKZO Chemicals, Inc. Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 1,100 1,100 Decatur, Alabama Industrial Development Board Solid Waste Disposal Revenue Bonds (Trico Steel Project) Series 1997 / (Chase Manhattan LOC) 3.80%, 01/07/98 5,700 5,700 Dothan, Alabama Industrial Development Board Industrial Revenue Bonds (Baxley Blowpipe Project) / (Regions Bank LOC) 4.30%, 01/07/98 900 900 Fort Payne, Alabama Industrial Development Base Tax Exempt Adjustable Mode Industrial Development Revenue Bonds (Charleston Hosiery Project) Series 1997 / (Wachovia Bank LOC) 4.30%, 01/07/98 2,000 2,000 McIntoch, Alabama Industrial Development Board Solid Waste Bonds (Ciba-Geigy Corp. Project) / (Union Bank of Switzerland LOC) 3.70%, 01/07/98 24,500 24,500 Mobile County, Alabama Industrial Development Board Pollution Control Revenue Refunding Bonds (Ultraform Co. Project) Series 1995A / (Bayerische Landesbank Girozentrale LOC) 4.20%, 01/07/98 7,480 7,480 Par Value ------- ---------- Mobile County, Alabama Industrial Development Board Revenue Bonds (Ultraform Co. Project) Series B / (Bayerische Landesbank Girozentrale LOC) 4.20%, 01/07/98 $ 1,000 $ 1,000 Mobile, Alabama Development Pollution Control Revenue Bonds (Alabama Power Project B) 4.20%, 01/07/98 10,000 10,000 Mobile, Alabama Industrial Development Board Pollution Control Revenue Bonds (Alabama Power Co. Project) Series 1993C 4.20%, 01/07/98 12,000 12,000 Montgomery, Alabama Special Care Facility Financing Authority Revenue Bonds (Baptist Medical Center VHA) Series 1985C / (AMBAC Insurance & FNB Chicago SBPA) 3.70%, 01/07/98 2,000 2,000 Opelika, Alabama Industrial Development Board Revenue Bonds (Power Guard Project) Series 1994 / (SouthTrust Bank of Alabama LOC) 4.50%, 01/07/98 2,595 2,595 Scottsboro, Alabama General Obligation Bonds / (Regions Bank LOC) 4.20%, 01/07/98 5,000 5,000 ---------- 83,875 ---------- ALASKA--0.2% Alaska Industrial Development & Export Authority (Revolving Fund) Series 1996B / (Bank of America LOC) 3.70%, 01/07/98 12,600 12,600 ---------- ARIZONA--1.6% Arizona Educational Loan Marketing Corp. Education Loan Revenue Bonds Series A / (MBIA Insurance & State Street Bank & Trust SBPA) 3.80%, 01/07/98 12,605 12,605
- -------------------------------------------------------------------------------- 23 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Arizona Health Facilities Authority Hospital System Revenue Bonds (Northern Arizona Health Care ) Series 1996B / (MBIA Insurance) 4.10%, 01/07/98 $16,650 $ 16,650 Arizona Health Facilities Authority Revenue Adjustable Rate Notes (Arizona Volunteer Hospital Federation) Series 1985A / (FGIC Insurance) 4.10%, 01/07/98 3,170 3,170 Arizona Health Facilities Authority Revenue Adjustable Rate Notes (Arizona Volunteer Hospital Federation) Series 1985B / (FGIC Insurance) 4.10%, 01/07/98 7,840 7,840 Arizona Health Facilities Revenue Bonds (Samcor Project) 1986 Loan Pool / (FGIC Insurance & Chase Manhattan SPA) 4.10%, 01/07/98 11,840 11,840 Phoenix, Arizona Civic Improvement Excise Tax Revenue Bonds (Airport Improvements) / (Landesbank Hessen-Thuringen Girozentrale LOC) 3.80%, 01/07/98 1,000 1,000 Phoenix, Arizona Industrial Development Authority Multi-Family Housing Revenue Bonds (Crossroads Apartments ) Series 1997A / (FNMA LOC) 3.85%, 01/07/98 6,000 6,000 Phoenix, Arizona Industrial Development Authority Vaw America Inc. / (Nationsbank NA South LOC) 4.15%, 01/07/98 3,000 3,000 Pima County, Arizona Industrial Development Authority Multi-Family Housing Revenue Bonds (Housing Surgauro Crest Apartments ) Series 1995A / (FNMA LOC) 4.20%, 01/07/98 6,000 6,000 Par Value ------- ---------- Yavapai County, Arizona Industrial Development Authority Revenue Bonds (First Health Care Corp. Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 $ 4,230 $ 4,230 Yavapai County, Arizona Industrial Development Revenue Bonds (Yavapia Regional Medical Center) / (Credit Local de France SBPA & FSA Insurance) 4.10%, 01/07/98 12,600 12,600 Yuma County, Arizona Industrial Development Authority Adjustable Rate Revenue Bonds (Meadowcraft, Inc. Project) Series 1997 / (NationsBank N.A. LOC) 4.40%, 01/01/98 1,000 1,000 Yuma County, Arizona Industrial Development Authority Multi-Family Housing Revenue Bonds (El Encanto Apartments) Series A / (Citibank LOC) 3.95%, 01/07/98 2,915 2,915 ---------- 88,850 ---------- ARKANSAS--0.5% Independence County, Arkansas Industrial Development Revenue Bonds (Ideal Baking Project) / (NationsBank South N.A. LOC) 4.40%, 01/07/98 7,000 7,000 Independence County, Arkansas Industrial Development Revenue Bonds (Townsends of Arkansas, Inc. Project) / (Rabobank Nederland N.V. SPA) 4.25%, 01/07/98 9,000 9,000 North Little Rock, Arkansas Health Facilities Board Revenue Bonds (Baptist Health) Series 1996B / (MBIA Insurance & Credit Suisse SPA) 4.20%, 01/07/98 12,000 12,000
- -------------------------------------------------------------------------------- 24 - --------------------------------------------------------------------------------
Par Value ------- ---------- Warren Park, Arkansas Solid Waste Disposal Revenue Bonds (Potlatch Corp. Project) / (Credit Suisse LOC) 3.90%, 01/07/98 $ 1,000 $ 1,000 ---------- 29,000 ---------- CALIFORNIA--0.5% California Health Facilities Financing Authority Revenue Bonds (Catholic Health Care) Series 1996B / (MBIA Insurance & Rabobank Nederland N.V. SBPA) 3.90%, 01/07/98 500 500 California Health Facilities Financing Authority Revenue Bonds (Scripps Memorial Hospital) Series 1991A / (MBIA Insurance & Morgan Guaranty Trust Co.--New York SBPA) 3.80%, 01/07/98 800 800 California Higher Education Loan Authority Student Loan Refunding Bonds Series E1 / (SLMA LOC) 3.75%, 01/07/98 5,000 5,000 California Pollution Control Financing Authority Pollution Control Refunding Revenue Bonds (Pacific Gas & Electric Company) Series 1996C / (Bank of America LOC) 4.90%, 01/01/98 1,300 1,300 California Pollution Control Financing Authority Resource Recovery Revenue Bonds (OMS Equity of Stanislaus) / (Swiss Bank LOC) 5.05%, 01/01/98 1,700 1,700 California Pollution Control Financing Authority Revenue Bonds (Southern California Edison) Series 1986A 4.20%, 01/01/98 1,600 1,600 California Pollution Control Financing Authority Revenue Bonds (Southern California Edison) Series 1986C 4.20%, 01/01/98 2,400 2,400 Par Value ------- ---------- California Pollution Control Financing Authority Revenue Bonds (Southern California Edison) Series 1986D 4.20%, 01/01/98 $ 100 $ 100 California State Economic Development Financing Authority Industrial Development Revenue Bonds (Serra Microchassis Project) 4.90%, 01/01/98 600 600 California Statewide Community Development Authority Certificates of Participation (California Retired Officers) / (Dresdner Bank LOC) 4.85%, 01/01/98 700 700 California Statewide Community Development Authority Revenue Bonds Certificates of Participation (Sutter Health Obligations Group) / (AMBAC Insurance & Industrial Bank of Japan SBPA) 5.10%, 01/01/98 1,900 1,900 Irvine Ranch Water District Consolidated Revenue Refunding Bonds Series 1985A-3 / (Landesbank Hessen-Thuringen Girozentrale LOC) 5.00%, 01/01/98 200 200 Los Angeles County, California Housing Authority Multi-Family Housing Revenue Bonds (Sand Canyon Villas Project) Series 1989A / (Industrial Bank of Japan LOC) 4.50%, 01/07/98 5,000 5,000 Orange County, California Sanitation District Certificates of Participation (Districts 1, 2, 3, 6, 7 & 11) Series 1992C / (FGIC Insurance & FGIC SPA) 4.75%, 01/01/98 3,700 3,700 Orange County, California Sanitation District Certificates of Participation (Sanitation Districts 1, 2, 3, 5, 6, 7 & 11) Series 1992 / (AMBAC Insurance & Barclays Bank SBPA) 3.85%, 01/07/98 1,000 1,000
- -------------------------------------------------------------------------------- 25 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Orange County, California Sanitation District Certificates of Participation (Sanitation Districts 1, 2, 3, 5, 6, 7 & 11) Series 1992B / (AMBAC Insurance) 5.00%, 01/01/98 $ 2,100 $ 2,100 ---------- 28,600 ---------- COLORADO--4.3% Adams County, Colorado Industrial Development Revenue Bonds (City View Park Project) Series 1985 / (Barclays Bank LOC) 3.70%, 01/07/98 5,200 5,200 Arapahoe County, Colorado Industrial Development Revenue Refunding Bonds (Denver Jet Center Project) Series 1997 / (U.S. Bank N.A. LOC) 4.00%, 01/07/98 1,000 1,000 Central City, Colorado Multi-Family Housing Revenue Bonds (Gold Mountain Apartment Project) / (PNC Bank N.A. LOC) 4.40%, 01/07/98 8,250 8,250 Colorado Health Facilities Authority Revenue Bonds (North Colorado Medical Center) / (MBIA Insurance & Credit Suisse SPA) 4.10%, 01/07/98 3,400 3,400 Colorado Student Loan Revenue Bonds Series 1997D / (SLMA LOC) 3.75%, 01/07/98 1,200 1,200 Colorado Student Obligation Bond Authority Student Loan Revenue Bonds (Colorado University) Series 1989A / (SLMA LOC) 3.75%, 01/07/98 10,300 10,300 Colorado Student Obligation Bond Authority Student Loan Revenue Bonds (Colorado University) Series 1990A / (SLMA LOC) 3.75%, 01/07/98 23,355 23,355 Par Value ------- ---------- Colorado Student Obligation Bond Authority Student Loan Revenue Bonds (Colorado University) Series 1993B / (SLMA LOC) 3.75%, 01/07/98 $10,700 $ 10,700 Denver City and County Airport System Revenue Bonds (Robinson Dairy Project) / (Wells Fargo Bank LOC) 4.20%, 01/07/98 4,435 4,435 Denver, Colorado City & County Airport System Revenue Bonds Series 1992D / (Morgan Guaranty Trust Co.--New York LOC) 4.35%, 01/07/98 48,900 48,900 Denver, Colorado City & County Airport System Revenue Bonds Series 1992E / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.70%, 01/07/98 30,000 30,000 Denver, Colorado City & County Airport System Revenue Bonds Series 1992F / (Bank of Montreal LOC) 4.35%, 01/07/98 16,000 16,000 Denver, Colorado City & County Airport System Revenue Bonds Series 1992G / (Credit Local de France LOC) 4.35%, 01/07/98 20,000 20,000 Denver, Colorado City & County Airport System Revenue Bonds Series 1997B / (Westdeutsche Landesbank LOC) 4.00%, 01/07/98 1,700 1,700 Denver, Colorado City & County Airport System Revenue Bonds Series 1997C / (Credit Local de France LOC) 3.95%, 01/07/98 35,000 35,000 El Paso County, Colorado Adjustable Rate Revenue Bonds (Colorado Springs World Arena) / (Bank One LOC) 4.15%, 01/07/98 15,000 15,000
- -------------------------------------------------------------------------------- 26 - --------------------------------------------------------------------------------
Par Value ------- ---------- Smith Creek, Colorado Metropolitan District Revenue Bonds Series 1997 / (NationsBank of Texas N.A. LOC) 4.20%, 01/07/98 $ 2,250 $ 2,250 Westminster, Colorado Economic Development Authority Tax Increment Revenue Bonds (Westminster Plaza Urban Renewal Project) / (Union Bank of California LOC) 4.25%, 01/07/98 2,100 2,100 ---------- 238,790 ---------- CONNECTICUT--0.4% Connecticut Development Authority Pollution Control Revenue Bonds Connecticut Light & Power Series 1985 / (AMBAC Insurance & Societe Generale LOC) 4.05%, 01/07/98 16,200 16,200 Connecticut Development Authority Pollution Control Revenue Bonds Connecticut Light & Power Series 1993B / (Union Bank of Switzerland LOC) 3.65%, 01/07/98 6,900 6,900 ---------- 23,100 ---------- DELAWARE--0.8% Delaware Economic Development Authority Revenue Bonds (Hospital Billing and Collection Project) Series C / (MBIA Insurance & Morgan Stanley SBPA) 4.00%, 01/07/98 25,000 25,000 Delaware Economic Development Authority Revenue Bonds (Hospital Billing and Collection Service) Series 1985A / (MBIA Insurance) 3.65%, 01/07/98 20,000 20,000 Par Value ------- ---------- Sussex County, Delaware Revenue Bonds (Baywood LLC Project) Series A / (Wilmington Trust Company LOC) 4.20%, 01/07/98 $ 2,400 $ 2,400 ---------- 47,400 ---------- DISTRICT OF COLUMBIA--0.1% District of Columbia Revenue Bonds Adjustable Convertible Extendable Securities (Georgetown University) Series 1988D / (Bayerische Landesbank Girozentrale LOC) 3.80%, 01/07/98 4,200 4,200 ---------- FLORIDA--1.8% Dade County, Florida Industrial Development Authority Revenue Bonds (Michael-Ann Russell Jewish Community Center Project) Series 1997 / (Suntrust Bank N.A. LOC) 4.20%, 01/07/98 5,000 5,000 Florida Capital Financing Authority Revenue Bonds (Capital Project Loan Program Project) Series 1997A 4.15%, 01/07/98 38,000 38,000 Florida Housing Finance Agency Housing Revenue Bonds (Ashley Lake Park II) Series 1989J / (Barclays Bank PLC LOC) 3.95%, 01/07/98 6,000 6,000 Florida Housing Finance Agency Variable Rate Housing Revenue Bonds (Tiffany Club Project) Series 1996P / (Nationsbank LOC) 3.80%, 01/07/98 2,875 2,875 Manatee County, Florida Industrial Development Revenue Bonds (Trielectron Industries Project) Series 1997A / (First Union Bank of North Carolina LOC) 4.30%, 01/07/98 2,000 2,000
- -------------------------------------------------------------------------------- 27 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Orange County, Florida Housing Finance Authority Multi-Family Housing Revenue Bonds (Rio Vista Project) / (First Union Bank of North Carolina LOC) 4.20%, 01/07/98 $ 3,775 $ 3,775 Palm Beach County, Florida Health Facilities Authority Revenue Refunding Bonds (Joseph L. Morse Geriatric Center) / (Sun Bank LOC) 3.90%, 01/07/98 12,155 12,155 Palm Beach County, Florida Housing Finance Authority Multi-Family Housing Revenue Bonds (Crystal II Project) / (Citibank LOC) 3.80%, 01/07/98 1,750 1,750 Pasco County, Florida School Board Certificates of Participation / (AMBAC Insurance & Bayerische Landesbank Girozentrale SPA) 4.05%, 01/07/98 27,870 27,870 Tampa, Florida Health Care Facilities Revenue Bonds (Lifelink Foundation Inc., Project) / (Suntrust Bank Atlanta LOC) 4.20%, 01/07/98 3,500 3,500 ---------- 102,925 ---------- GEORGIA--5.1% Athens, Clarke, Jackson & Morgan Counties, Georgia Industrial Development Bonds (Mayfield Dairy) / (Wachovia Bank LOC) 4.20%, 01/07/98 4,500 4,500 Bartow County, Georgia Industrial Development Revenue Bonds (Matthew Contracting Project) / (Nationsbank N.A. LOC) 4.35%, 01/07/98 5,600 5,600 Burke County, Georgia Development Authority Pollution Control Revenue Bonds (Oglethorpe Power Corp. Project) Series 1993A / (Canadian Imperial Bank of Commerce & FGIC Insurance) 3.65%, 01/07/98 30,600 30,600 Par Value ------- ---------- Cherokee County, Georgia Development Authority Revenue Industrial Development (Universal Alloy) / (Wachovia Bank LOC) 4.20%, 01/07/98 $ 5,500 $ 5,500 Cobb County, Georgia Housing Finance Authority Multi-Family Housing Revenue Bonds (Walton Green Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 13,500 13,500 Cobb County, Georgia Housing Finance Authority Multi-Family Housing Revenue Bonds (Williamstown Apartment Project) / (Wachovia Bank LOC) 4.10%, 01/07/98 2,000 2,000 Decatur County, Georgia Industrial Development Revenue Bonds (Alabama Farmers Corp) / (Nationsbank N.A. LOC) 3.90%, 01/07/98 2,900 2,900 Dekalb County, Georgia Development Authority Industrial Development Revenue Bonds (Park North Business Center Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 5,140 5,140 Dekalb County, Georgia Development Authority Industrial Development Revenue Bonds (Siemens Energy, Inc. Project) / (Siemens AG Guaranty) 4.25%, 01/07/98 3,750 3,750 Dekalb County, Georgia Development Authority Industrial Development Revenue Bonds (Truman Properties Ltd. Liability Corp. Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 3,000 3,000 Dekalb County, Georgia Development Authority Revenue Bonds (American Cancer Society) / (Trust Company Bank LOC) 3.95%, 01/07/98 7,475 7,475
- -------------------------------------------------------------------------------- 28 - --------------------------------------------------------------------------------
Par Value ------- ---------- Dekalb County, Georgia Housing Authority Multi-Family Housing Revenue Bonds (Wood Hills Apartment Project) / (Bank of Montreal LOC) 3.75%, 01/07/98 $ 5,250 $ 5,250 Douglas County, Georgia Development Authority Industrial Development Revenue Refunding Bonds (Mima Inc. Project) / (Wachovia Bank LOC) 4.30%, 01/07/98 4,300 4,300 Fayette County, Georgia Industrial Development Revenue Bonds (Norman W Paschell Company Project) / (Suntrust Bank Atlanta LOC) 4.35%, 01/07/98 1,200 1,200 Fulton County, Georgia Development Authority Revenue Bonds (Atlanta International School Project) / (Suntrust Bank Atlanta LOC) 4.20%, 01/07/98 3,000 3,000 Fulton County, Georgia Development Authority Revenue Bonds (Woodruff Arts Center) / (Wachovia Bank LOC) 4.20%, 01/07/98 22,500 22,500 Georgia Municipal Gas Authority Revenue Bonds (Gas Portfolio II Project) Series B 3.65%, 01/07/98 2,000 2,000 Georgia Municipal Gas Authority Revenue Bonds (Gas Portfolio II Project) Series C / (Multiple Credit Enhancements) 3.65%, 01/07/98 40,000 40,000 Hart County, Georgia Industrial Building Authority Revenue Bonds (Dundee Mills Project) / (Suntrust Bank Atlanta LOC) 4.05%, 01/07/98 2,000 2,000 Jefferson County, Georgia Development Authority Industrial Development Revenue Bonds (Grove River Mills) Series 1997 / (Wachovia Bank LOC) 4.20%, 01/07/98 3,500 3,500 Par Value ------- ---------- Laurens County, Georgia Development Authority Solid Waste Disposal Revenue Bonds (Southeast Paper Co. Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 $25,000 $ 25,000 Laurens County, Georgia Development Authority Solid Waste Disposal Revenue Bonds (Southeast Paper Co. Manufacturing Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 25,000 25,000 Richmond County, Georgia Industrial Development Authority Revenue Bonds (BOK Group Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 5,000 5,000 Rockmart, Georgia Development Authority Industrial Development Revenue Bonds (CW Matthews Contracting) / (Wachovia Bank LOC) 4.20%, 01/07/98 1,000 1,000 Roswell, Georgia Housing Authority Multi-Family Housing Revenue Bonds (Gables Realty Wood Crossing Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 11,650 11,650 Savannah, Georgia Economic Development Authority Revenue (Home Depot Project) Series 1995B / (Trust Company Bank LOC) 4.25%, 01/07/98 5,000 5,000 Savannah, Georgia Economic Development Authority Revenue Bonds (Kaolin Inc.Project) / (Nationsbank South N.A.LOC) 4.35%, 01/07/98 11,000 11,000 Savannah, Georgia Housing Authority Adjustable Rate Multi-Family Housing Revenue Bonds (Chatham Gardens Project) Series 1997 / (Sun Trust Bank Atlanta LOC) 4.30%, 01/07/98 2,995 2,995
- -------------------------------------------------------------------------------- 29 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Smyrna, Georgia Housing Authority Multi-Family Housing Revenue Bonds (Walton Park LP) / (Wachovia Bank LOC) 4.20%, 01/07/98 $ 8,000 $ 8,000 Smyrna, Georgia Housing Authority Multi-Family Housing Revenue Bonds (Walton Park Phase 2 Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 13,500 13,500 Summerville, Georgia Development Authority Revenue Bonds (Image Ind's Project) Series 1997 / (First Union National Bank LOC) 4.35%, 01/01/98 9,000 9,000 Villa Rica, Georgia Industrial Development Revenue Bonds (Lowes Home Centers, Inc. Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 500 500 Worth County, Georgia Industrial Development Authority Revenue Refunding Bonds (Seabrook Project) Series 1996B / (Sun Bank LOC) 4.30%, 01/07/98 1,400 1,400 ---------- 286,760 ---------- HAWAII--0.5% Hawaii Department of Budget & Finance Special Purpose Mortgage Revenue Bonds (Adventist Health System West) / (Union Bank of California LOC) 3.65%, 01/07/98 7,600 7,600 Hawaii Student Loan Revenue Bonds (Secondary Market Services Corp.) Series 1995-II / (National Westminster Bank PLC LOC) 3.75%, 01/07/98 8,100 8,100 Honolulu, Hawaii City & County Multi-Family Housing Revenue Bonds (HaleKua Gardens Project) Series A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.30%, 01/07/98 4,984 4,984 Par Value ------- ---------- Honolulu, Hawaii City & County Multi-Family Housing Revenue Bonds (Iolani Regents Project) Series 1990A / (Bank of Hawaii LOC) 4.20%, 01/07/98 $ 9,150 $ 9,150 ---------- 29,834 ---------- IDAHO--0.4% Custer County, Idaho Industrial Development Corp. Solid Waste Disposal Revenue Bonds (Hecla Mining Company Project) / (Nationsbank N.A. South LOC) 4.40%, 01/07/98 4,500 4,500 Idaho Student Loan Revenue Bonds Series A / (First Security Bank of Utah N.A. LOC) 3.65%, 01/07/98 16,000 16,000 ---------- 20,500 ---------- ILLINOIS--7.4% Aurora, Kane, & Dupage Counties, Illinois Industrial Development Revenue Bonds (North American Plastics Corporation) / (First of America Bank Illinois N.A. LOC) 4.30%, 01/07/98 5,400 5,400 Bartlett, Illinois Multi-Family Housing Revenue Bonds (Bartlett Square Apartments) Series 1995A / (LaSalle National Bank LOC) 4.20%, 01/07/98 2,100 2,100 Batavia, Illinois Development Revenue Bonds (American Industrial Technologies) / (Northern Trust LOC) 4.35%, 01/07/98 2,200 2,200 Carol Stream, Illinois Multi-Family Housing Revenue Refunding Bonds (St. Charles Square) / (FNMA LOC) 4.10%, 01/07/98 4,415 4,415
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Par Value ------- ---------- Centralia, Illinois Industrial Development Authority Revenue Bonds (Consolidated Foods Corp. / Hollywood Brands, Inc. Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 $ 4,500 $ 4,500 Chicago, Illinois Industrial Development Revenue Bonds (Morse Automotive) Series 1995 / (American National Bank & Trust Co. LOC) 4.34%, 01/07/98 2,600 2,600 Chicago, Illinois O'Hare International Airport Revenue Bonds (Adjustable Convertible Extendable Securities General Airport Second Lien) Series B-1 / (Bayerische Landesbank Girozentrale LOC) 3.95%, 01/07/98 26,100 26,100 Chicago, Illinois O'Hare International Airport Revenue Bonds (Adjustable Convertible Extendable Securities General Airport Second Lien) Series B-2 / (Bayerische Landesbank Girozentrale LOC) 3.95%, 01/07/98 9,600 9,600 Chicago, Illinois O'Hare International Airport Revenue Bonds (General Airport Second Lien) Series 1994C / (Societe Generale Bank LOC) 3.75%, 01/07/98 11,900 11,900 Elmhurst, Illinois Industrial Development Revenue Bond (ELM Machining Corp. Project) / (American National Bank & Trust Co. LOC) 4.33%, 01/07/98 3,500 3,500 Illinois Development Authority Industrial Development Bonds (Camcraft, Inc. Project) / (American National Bank & Trust Co. LOC) 4.20%, 01/07/98 1,000 1,000 Illinois Development Authority Revenue Bonds (Cloverhill Pastry) / (American National Bank & Trust Co. LOC) 4.20%, 01/07/98 6,260 6,260 Par Value ------- ---------- Illinois Development Finance Authority Adjustable Rate Bonds (Profile Plastics Project) Series 1994 / (American National Bank & Trust Co. LOC) 4.20%, 01/07/98 $ 2,665 $ 2,665 Illinois Development Finance Authority Hospital Revenue Bonds (Palos Community Hospital) Series 1994-1 / (Credit Suisse LOC) 3.95%, 01/07/98 33,700 33,700 Illinois Development Finance Authority Hospital Revenue Bonds (Palos Community Hospital) Series 1994-2 / (Credit Suisse LOC) 3.95%, 01/07/98 13,900 13,900 Illinois Development Finance Authority Industrial Development Revenue Bonds (Catholic Charities) / (Allied Irish Banks PLC LOC) 4.05%, 01/07/98 2,655 2,655 Illinois Development Finance Authority Industrial Development Revenue Bonds (Chicago Corrugated Box Company) Series 6 / (American National Bank & Trust Co. LOC) 4.38%, 01/07/98 1,350 1,350 Illinois Development Finance Authority Industrial Development Revenue Bonds (Knead Dough Baking Co.) / (Bank of America LOC) 4.15%, 01/07/98 7,610 7,610 Illinois Development Finance Authority Industrial Development Revenue Bonds (Perkin Paperboard Co. LP) Series 1994 / (Northern Trust LOC) 4.25%, 01/07/98 5,500 5,500 Illinois Development Finance Authority Industrial Development Revenue Bonds (Plano Molding Project) / (Northern Trust LOC) 4.25%, 01/07/98 1,950 1,950
- -------------------------------------------------------------------------------- 31 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Illinois Development Finance Authority Industrial Development Revenue Bonds (Presbyterian Home Lake) Series 1996A / (LaSalle National Bank LOC) 4.00%, 01/07/98 $46,800 $ 46,797 Illinois Development Finance Authority Industrial Development Revenue Bonds (Radiological Society Project) Series 1997 / (American National Bank & Trust Company LOC) 4.19%, 01/07/98 4,900 4,900 Illinois Development Finance Authority Industrial Development Revenue Bonds (River Graphics Corp. Project) Series 1996 / (American National Bank & Trust Company LOC) 4.38%, 01/07/98 3,200 3,200 Illinois Development Finance Authority Industrial Development Revenue Bonds (SMF, Inc. Project) Series A / (First of America LOC) 4.30%, 01/07/98 2,215 2,215 Illinois Development Finance Authority Residential Rental Revenue Bonds (F.C. Harris Pavillion Project) Series 1994 / (FNMA Collateral Investment Agreement) 4.25%, 01/07/98 27,510 27,510 Illinois Development Finance Authority Residential Rental Revenue Bonds (River Oak Project) / (Swiss Bank LOC) 3.80%, 01/07/98 32,000 32,000 Illinois Development Finance Authority Revenue Bonds (Catholic Charities Housing Project) Series 1993A / (Allied Irish Banks PLC LOC) 3.95%, 01/07/98 10,060 10,060 Par Value ------- ---------- Illinois Development Finance Authority Revenue Bonds (Chicago Academy of Science Project) / (American National Bank & Trust Co. LOC) 4.10%, 01/07/98 $ 4,915 $ 4,915 Illinois Development Finance Authority Revenue Bonds (St. Ignatius College Prep) / (Northern Trust LOC) 4.00%, 01/07/98 2,200 2,200 Illinois Development Finance Authority Revenue Bonds (Variable Rest Haven Illiana Christian) / (FHLB LOC) 4.00%, 01/07/98 16,030 16,030 Illinois Development Finance Authority Revenue Bonds (Village Oak Park Residence) / (First Star Bank LOC) 4.10%, 01/07/98 2,260 2,260 Illinois Educational Facility Authority Revenue Bonds (Chicago Historical Society) / (Bank of Tokyo-Mitsubishi Ltd. LOC) 3.80%, 01/07/98 8,200 8,200 Illinois Educational Facility Authority Revenue Bonds (Chicago Zoological Society Brookfield Zoo) Series B / (Chemical Bank LOC) 4.00%, 01/07/98 2,600 2,600 Illinois Educational Facility Authority Revenue Bonds (Northwestern University) / (FNB Chicago LOC) 3.85%, 01/07/98 22,200 22,200 Illinois Health Facility Authority Revenue Bonds (Bensenville Home Society) Series 1989A / (American National Bank & Trust Co. LOC) 3.70%, 01/07/98 2,400 2,400 Illinois Health Facility Authority Revenue Bonds (Ingalls Memorial Hospital) Series 1985C / (LaSalle National Bank LOC) 3.75%, 01/07/98 1,100 1,100
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Par Value ------- ---------- Illinois Health Facility Authority Revenue Bonds (Washington & Jane Smith Home) Series 1991 / (Comerica Bank LOC) 3.85%, 01/07/98 $ 2,800 $ 2,800 Illinois Housing Development Authority Multi-Family Housing Revenue Bonds (Camelot Project) Series 1997 / (FNB Chicago & MBIA Insurance) 4.00%, 01/07/98 14,170 14,170 Illinois Student Assistance Commission Student Loan Revenue Bonds Series 1996A / (Bank of America LOC) 3.75%, 01/07/98 8,400 8,400 Kane County, Illinois Revenue Bonds (Glenwood School For Boys) / (Harris Trust & Savings Bank LOC) 3.80%, 01/07/98 9,000 9,000 Lombard, Illinois Industrial Development Revenue Refunding Bonds (B & H Partnership Project) / (Comerica Bank LOC) 4.53%, 01/07/98 1,850 1,850 McHenry County, Illinois Industrial Development Authority Revenue Refunding Bonds (Dean Foods Co. Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 2,675 2,675 New Lenox, Illinois Industrial Development Revenue Bonds (Panduit Corp. Project) / (Commerzbank AG LOC) 3.90%, 01/07/98 4,400 4,400 Richton Park, Illinois Industrial Development Revenue Bonds (Avatar Corp. Project) / (American National Bank & Trust Co. LOC) 4.15%, 01/07/98 2,000 2,000 Rockford, Illinois Industrial Development Revenue Bonds (Industrial Welding Supply, Inc. Project) / (American National Bank & Trust Co. LOC) 4.38%, 01/07/98 2,000 2,000 Par Value ------- ---------- Tinley Park, Illinois Industrial Development Authority Revenue Bonds (Beverly Manufacturing Company Project) Series 1997A / (Nationsbank South N.A. LOC) 4.35%, 01/01/98 $ 2,640 $ 2,640 Upper Illinois River Valley Development Authority Variable Rate Bonds (Exolon Esk Co.) / (Chase Manhattan LOC) 4.30%, 01/07/98 4,405 4,405 Wheeling, Illinois Manufacturing Refunding Revenue Bonds (Woodland Creek II) Series 1990 / (FSA Insurance) 4.20%, 01/07/98 17,655 17,655 Woodstock, Illinois Multi-Family Housing Revenue Bonds (Prairie Trail) Series 1996A / (LaSalle National Bank LOC) 4.35%, 01/07/98 3,425 3,425 Woodstock, Illinois Multi-Family Revenue Bonds (Prairie View Limited) / (American National Bank & Trust Company LOC) 4.35%, 01/07/98 2,035 2,035 Yorkville, Illinois Industrial Development Revenue Bonds (F.E. Wheaton & Co. Inc. Project) Series 1996 / (American National Bank & Trust Co. LOC) 4.38%, 01/07/98 1,600 1,600 ---------- 416,547 ---------- INDIANA--0.8% City of Gary, Indiana Economic Development Authority Revenue Refunding Bonds (Tinplate Partnership Project ) Series 1997A / (LaSalle National Bank LOC) 4.25%, 01/07/98 3,500 3,500 Crawfordsville, Indiana Industrial Development Revenue Bonds (National Service Industries, Inc. Project) / (Wachovia Bank LOC) 4.00%, 01/07/98 4,000 4,000
- -------------------------------------------------------------------------------- 33 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Gary, Indiana Economic Development Authority Revenue Refunding Bonds (Miller Partners Home Improvement Project ) Series 1996A / (Royal Bank of Scotland PLC LOC) 4.20%, 01/07/98 $20,540 $ 20,540 Hammond, Indiana Economic Development Revenue Bonds (Lear Seating Corp. Project) Series 1994 / (Chemical Bank LOC) 4.15%, 01/07/98 8,700 8,700 Indianapolis, Indiana Economic Development Authority Revenue Bonds (Herff-Jones, Inc. Project) / (Wachovia Bank LOC) 4.35%, 01/07/98 4,100 4,100 St. Joseph College, Indiana Economic Development Revenue Bonds Series 1997B / (FHLB LOC) 4.30%, 01/07/98 3,675 3,675 ---------- 44,515 ---------- IOWA--0.7% Iowa Higher Education Loan Authority Revenue Bonds (Adjustable Convertible Extendable Securities Education Loan Private College Facility) / (MBIA Insurance) 3.70%, 01/07/98 6,600 6,600 Iowa State Financing Authority Solid Waste Disposal Revenue Bonds (Cedar River Paper Project) Series 1995A 5.10%, 01/01/98 1,600 1,600 Iowa State Financing Authority Solid Waste Disposal Revenue Bonds (Daily Cedar River Paper) / (Swiss Bank LOC) 5.10%, 01/01/98 2,500 2,500 Par Value ------- ---------- Iowa Student Loan Liquidity Corp. Student Loan Revenue Bonds Series B / (AMBAC Insurance & Norwest Bank N.A. LOC) 3.75%, 01/07/98 $28,000 $ 28,000 ---------- 38,700 ---------- KANSAS--0.2% Kansas City, Kansas Industrial Revenue Bonds (Owen Industries, Inc. Project) Series 1987 / (Sanwa Bank LOC) 3.95%, 01/07/98 1,200 1,200 Kansas State Development Finance Authority Multi-Family Housing Revenue Bonds (1st Kansas Project) Series 1995A / (Boatmen's First National Bank of Kansas City LOC) 4.30%, 01/07/98 2,000 2,000 Kansas State Development Finance Authority Multi-Family Housing Revenue Bonds (1st Kansas Project) Series 1995C-2 / (Boatmen's First National Bank of Kansas City LOC) 4.30%, 01/07/98 650 650 Olathe, Kansas Industrial Development Revenue Bonds (Garmin International Inc. Project) Series 1995 / (Boatmen's First National Bank of Kansas City LOC) 4.30%, 01/07/98 1,700 1,700 Wichita, Kansas Airport Facilities Revenue Bonds (Flightsafety International, Inc.) / (Wachovia Bank LOC) 4.30%, 01/07/98 3,000 3,000 Wichita, Kansas Airport Facility Refunding Revenue Bonds (Cessna Service Center Project) / (Westdeutsche Landesbank LOC) 4.25%, 01/07/98 3,750 3,750 ---------- 12,300 ----------
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Par Value ------- ---------- KENTUCKY--1.6% Henderson County, Kentucky Solid Waste Disposal Revenue Bonds (Hudson Foods, Inc. Project) / (Rabobank Nederland N.V. LOC) 3.75%, 01/07/98 $10,300 $ 10,300 Jefferson County, Kentucky Sports Stadium Revenue Adjusting Bonds (University of Louisville Athletic Department) / (Bank One Kentucky, N.A. LOC) 4.15%, 01/07/98 10,000 10,000 Kentucky Higher Education Student Loan Corp. Insured Student Loan Revenue Bonds Series 1991E / (AMBAC Insurance & Credit Suisse LOC) 3.70%, 01/07/98 5,000 5,000 Kentucky Higher Education Student Loan Corp. Revenue Bonds Series 1996A / (MBIA Insurance & Landesbank Hessen--Thuringen Girozentrale SPA) 3.70%, 01/07/98 17,000 17,000 Lebanon, Kentucky Industrial Development Revenue Bonds (Wallace Computer Services, Inc.) / (Wachovia Bank LOC) 3.95%, 01/07/98 5,000 5,000 Mayfield, Kentucky Multi-City Lease Revenue Bonds / (PNC Bank N.A. LOC) 3.90%, 01/07/98 18,000 18,000 Maysville, Kentucky Industrial Building Revenue Bonds (Green Tokai Building) / (Bank of America LOC) 4.25%, 01/07/98 5,740 5,740 Murray, Kentucky Industrial Development Authority Revenue Refunding Bonds (Dean Foods Co.) / (Wachovia Bank LOC) 4.30%, 01/07/98 6,000 6,000 Par Value ------- ---------- Owensboro, Kentucky Limited Obligation Revenue Bonds (Dart Polymers, Inc. Project) Series 1985A / (National Westminster Bank PLC LOC) 4.10%, 01/07/98 $ 1,900 $ 1,900 Richmond, Kentucky Industrial Building Revenue Bonds (Mikron Project) / (Bank of America LOC) 4.10%, 01/07/98 9,500 9,500 Wilson County, Kentucky Industrial Development Board Revenue Bonds (Perma Pipe Project) / (Harris Trust & Savings Bank LOC) 4.45%, 01/07/98 3,150 3,150 ---------- 91,590 ---------- LOUISIANA--0.8% De Soto Parish, Louisiana Pollution Control Financing Authority Revenue Refunding Bonds (Central Louisiana Electric Co.) Series 1991A / (Swiss Bank LOC) 3.60%, 01/07/98 400 400 Louisiana Public Facility Authority Hospital Revenue Bonds (Willis Knighton Medical Project) / (AMBAC Insurance & Mellon Bank SBPA) 3.70%, 01/07/98 17,670 17,670 Louisiana Public Finance Authority Hospital Revenue Bonds (Willis Knighton Medical Center Project) Series 1997 / (AMBAC Insurance) 3.65%, 01/07/98 15,000 15,000 New Orleans, Louisiana Aviation Board Revenue Bonds (Passenger Facility Charge Projects) / (Banque Paribas & Canadian Imperial Bank of Commerce LOC) 4.00%, 01/07/98 5,100 5,100 South Louisiana, Port Commission Revenue Bonds (Holnam Project) / (ABN-Amro Bank N.V. LOC) 3.95%, 01/07/98 7,500 7,500 ---------- 45,670 ----------
- -------------------------------------------------------------------------------- 35 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- MAINE--1.1% Maine Education Loan Marketing Corp. Student Loan Revenue Bonds Series 1997A-1 / (AMBAC Insurance) 3.75%, 01/07/98 $ 5,700 $ 5,700 Maine Education Loan Marketing Corp. Student Loan Revenue Bonds Series 1997A-2 / (AMBAC Insurance) 3.75%, 01/07/98 25,500 25,500 Maine Regional Waste System Solid Waste Recovery Bonds Series 1990K / (Midland Bank LOC) 3.75%, 01/07/98 17,550 17,550 Maine Regional Waste System Solid Waste Resource Recovery Revenue Bonds Series 1993-M / (Midland Bank LOC) 3.75%, 01/07/98 4,075 4,075 Maine Regional Waste System Solid Waste Resource Recovery Revenue Bonds Series 1995O / (Midland Bank LOC) 3.75%, 01/07/98 5,000 5,000 Maine State Housing Authority Multi-Family Revenue Bonds (Park Village Apartments Project) / (General Electric Capital Corp. LOC) 3.80%, 01/07/98 6,000 6,000 ---------- 63,825 ---------- MARYLAND--0.9% Howard County, Maryland Multi-Family Housing Revenue Bonds (Avalon Meadows Project) / (FNMA LOC) 3.60%, 01/07/98 4,900 4,900 Maryland State Health & Higher Education Facility Authority Pooled Revenue Bonds (Kennedy Krieger) Series 1993D / (FNB Maryland LOC) 3.85%, 01/07/98 2,000 2,000 Par Value ------- ---------- Maryland State Health & Higher Education Facility Authority Pooled Revenue Bonds (Pooled Loan Program) Series A / (FNB Chicago LOC) 3.70%, 01/07/98 $ 9,700 $ 9,700 Maryland State Health & Higher Education Facility Authority Pooled Revenue Bonds (Pooled Loan Program) Series 1985B / (FNB Chicago LOC) 3.75%, 01/07/98 16,100 16,100 Montgomery County, Maryland Housing Opportunity Commission Housing Revenue Bonds (Draper Lane) Series 1991I / (FGIC Insurance & Barclays Bank PLC SPA) 3.95%, 01/07/98 16,600 16,600 ---------- 49,300 ---------- MASSACHUSETTS--0.1% Massachusetts State Health and Education Facilities Authority Revenue Bonds (Williams College Project) Series E 3.60%, 01/07/98 7,193 7,193 Massachusetts State Industrial Finance Agency Resource Recovery Authority Revenue Bonds (Ogden Haverhill Project) Series 1992A / (Union Bank of Switzerland LOC) 3.50%, 01/07/98 500 500 ---------- 7,693 ---------- MICHIGAN--1.3% Grand Rapids, Michigan Economic Development Corp. Revenue Refunding Bonds (Amway Hotel Corp. Project) Series 1991A / (ABN- Amro Bank N.V. LOC) 3.80%, 01/07/98 8,000 8,000 Michigan State Hospital Finance Authority Revenue Bonds (Martin Luther Memorial Home Inc.) / (Bank One Indiana, N.A. LOC) 4.00%, 01/07/98 8,520 8,520
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Par Value ------- ---------- Michigan State Strategic Fund Ltd. Obligation Revenue Bonds (Dean Foods Co. Project) / (Wachovia Bank LOC) 4.30%, 01/07/98 $ 3,500 $ 3,500 Michigan State Strategic Fund Ltd. Obligation Revenue Bonds (EPI Printers Inc. Project) / (Comerica Bank LOC) 4.30%, 01/07/98 5,200 5,200 Michigan State Strategic Fund Ltd. Obligation Revenue Bonds (John Widdicomb Company Project) 4.35%, 01/07/98 2,915 2,915 Michigan State Strategic Fund Ltd. Obligation Variable Rate Revenue Bonds Manufacturers Project Series 1991 / (Comerica Bank LOC) 4.35%, 01/07/98 1,885 1,885 Michigan State Strategic Fund Ltd. Obligation Variable Rate Revenue Bonds (Autocam Corp. Project) / (Comerica Bank LOC) 4.10%, 01/07/98 2,500 2,500 Wayne Charter County, Michigan Airport Revenue Bonds (Detroit Metropolitan County ) Series 1996A / (Bayerische Landesbank Girozentrale LOC) 3.75%, 01/07/98 6,500 6,500 Wayne Charter County, Michigan Airport Revenue Bonds Series B / (Bayerische Landesbank Girozentrale LOC) 3.75%, 01/07/98 31,810 31,810 ---------- 70,830 ---------- MINNESOTA--0.7% Bloomington, Minnesota Port Authority Special Tax Revenue Bonds (Mall of America Project) Series 1996B / (FSA Insurance & Credit Local de France SBPA) 4.20%, 01/07/98 6,500 6,500 Par Value ------- ---------- Bloomington, Minnesota Port Authority Tax Increment Revenue Refunding Bonds (Mall of America) Series 1995A / (Credit Local de France SBPA & FSA Insurance) 4.20%, 01/07/98 $ 6,000 $ 6,000 Dakota County, Minnesota Housing & Redevelopment Authority Multi-Family Mortgage Revenue Bonds / (Northwestern Mutual Guaranty) 4.20%, 01/07/98 13,955 13,955 Hennepin County, Minnesota Unlimited General Obligation Bonds Series 1995C 4.10%, 01/07/98 2,400 2,400 Hennepin County, Minnesota Unlimited General Obligation Bonds Series 1996C 4.25%, 01/07/98 5,350 5,350 Minnesota Agriculture & Economic Development Revenue Bonds (Evangelical Lutheran Project) / (Rabobank Nederland N.V. LOC) 4.20%, 01/07/98 5,500 5,500 ---------- 39,705 ---------- MISSISSIPPI--0.2% Canton, Mississippi Industrial Development Revenue Bonds (McCarty Farms Inc. Project) / (Suntrust Bank Atlanta LOC) 4.30%, 01/07/98 2,000 2,000 Jackson County, Mississippi Pollution Control Revenue Bonds (Chevron, U.S.A. Inc. Project) 5.00%, 01/01/98 1,000 1,000 Mississippi Business Financial Corp. Industrial Development Revenue Bonds (Omega Motion) Series 1996 / (Wachovia Bank LOC) 4.30%, 01/07/98 6,800 6,800 ---------- 9,800 ----------
- -------------------------------------------------------------------------------- 37 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- MISSOURI--1.0% Independence, Missouri Industrial Development Authority Revenue Bonds (Resthaven Project) / (Credit Local De France LOC) 4.00%, 01/07/98 $ 8,850 $ 8,850 Mexico, Missouri Industrial Development Authority Revenue Bonds (ADP Midwest Manufacturing Co. Project) Series 1995 / (Royal Bank of Scotland PLC LOC) 3.90%, 01/07/98 7,000 7,000 Missouri Higher Education Loan Authority Student Loan Revenue Bonds Series 1988A / (National Westminster Bank PLC LOC) 3.75%, 01/07/98 19,900 19,900 Missouri State Development Board Revenue Bonds (Milbank Manufacturing Co. Project) / (Boatmen's First National Bank of Kansas City LOC) 4.30%, 01/07/98 3,000 3,000 Missouri State Development Finance Board Industrial Development Revenue Bonds (H.R. Williams Mill Supply Project) Series 1995 / (Union Bank of Switzerland LOC) 3.85%, 01/07/98 3,100 3,100 St. Charles, Missouri Industrial Development Authority Revenue Bonds (Land Development Co. Project) / (Commerce Bank of St. Louis LOC) 4.35%, 01/07/98 3,550 3,550 St. Clair, Missouri Industrial Development Authority Revenue Bonds (Private Dynaquip) / (Nationsbank N.A. LOC) 4.30%, 01/01/98 2,300 2,300 St. Joseph, Missouri Industrial Development Revenue Bonds (Altec Industries Inc. Project) / (Wachovia Bank LOC) 4.00%, 01/07/98 4,000 4,000 Par Value ------- ---------- St. Louis, Missouri Industrial Development Authority Revenue Bonds (Kessler Container Project) / (Nationsbank N.A. LOC) 4.35%, 01/01/98 $ 2,500 $ 2,500 Washington, Missouri Industrial Development Authority Revenue Bonds (Pauwels Transformer Project) / (Generale Bank LOC) 4.50%, 01/07/98 3,800 3,800 ---------- 58,000 ---------- MONTANA--0.2% Montana State Health Facility Authority Revenue Bonds (Health Care Pooled Loan Program) Series 1985A / (FGIC Insurance & Norwest Bank of Minnesota N.A. LOC) 4.10%, 01/07/98 13,695 13,695 ---------- NEBRASKA--0.8% Dodge County, Nebraska Industrial Development Revenue Bonds (Oilgear Project) / (Marshall & Ilsley Bank LOC) 4.35%, 01/07/98 2,000 2,000 Nebraska Higher Education Loan Program Revenue Bonds (Student Loan Project) Series 1988C / (SLMA LOC) 3.75%, 01/07/98 31,150 31,150 Stanton County, Nebraska Industrial Development Revenue Bonds Series 1996 3.80%, 01/07/98 10,500 10,500 ---------- 43,650 ---------- NEVADA--0.1% Clark County, Nevada Airport Improvement Revenue Bonds System Subordinate Lien Series 1995A--2 / (Union Bank of Switzerland LOC) 3.95%, 01/07/98 1,330 1,330
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Par Value ------- ---------- Nevada Housing Division Multi-Family Housing Revenue Bonds Series 1989A / (FNMA LOC) 3.70%, 01/07/98 $ 4,000 $ 4,000 ---------- 5,330 ---------- NEW HAMPSHIRE--0.2% New Hampshire Higher Education & Health Facilities Authority Revenue Bonds (VHA New England, Inc.) Series 1985B / (AMBAC Insurance & FNB Chicago SBPA) 3.70%, 01/07/98 1,000 1,000 New Hampshire State Business Finance Authority Pollution Control Revenue Bonds (Public Services New Hampshire Project) Series 1992D / (Barclays Bank PLC LOC) 3.80%, 01/07/98 1,000 1,000 New Hampshire State Housing Finance Authority Multi-Family Housing Revenue Bonds (Fairways Project) Series 1994-1 / (General Electric Capital Corp. LOC) 3.95%, 01/07/98 7,000 7,000 ---------- 9,000 ---------- NEW JERSEY--0.5% New Jersey Economic Development Authority Revenue Bonds (Hoffman Laroche Inc. Project) Series 1993 / (Bayerische Landesbank Girozentrale LOC) 4.10%, 01/07/98 400 400 New Jersey Economic Development Authority Thermal Energy Facilities Revenue Bonds (Thermal Energy Ltd. Partnership I Project) Series 1997 / (FNB Chicago LOC) 3.55%, 01/07/98 12,900 12,900 Par Value ------- ---------- New Jersey Sports and Exposition Authority Revenue Bonds Series 1992C / (Barclays Bank LOC) 3.80%, 01/07/98 $ 7,000 $ 7,000 New Jersey State Turnpike Authority Revenue Bonds Series 1991D / (FGIC Insurance & Societe Generale LOC) 3.45%, 01/07/98 3,000 3,000 Union City, New Jersey Industrial Pollution Control Financing Authority Pollution Control Revenue Bonds (Exxon Project) 4.70%, 01/01/98 3,000 3,000 ---------- 26,300 ---------- NEW MEXICO--1.5% Albuquerque, New Mexico Airport Revenue Bonds Subordinated Lien Series 1996A / (Bayerische Landesbank Girozentrale LOC) 3.75%, 01/07/98 20,600 20,600 Albuquerque, New Mexico Gross Receipts Tax General Obligation Bonds / (Canadian Imperial Bank of Commerce LOC) 3.70%, 01/07/98 2,000 2,000 Albuquerque, New Mexico Variable Rate Demand Note (Karsten Project A) / (Bank One Milwaukee LOC) 4.30%, 01/07/98 1,930 1,930 Albuquerque, New Mexico Variable Rate Demand Note (Karsten Project B) / (Bank One Milwaukee LOC) 4.30%, 01/07/98 780 780 Belen, New Mexico Industrial Development Revenue Bonds (Solo Cup, Inc. Project) / (Wachovia Bank LOC) 4.30%, 01/07/98 3,250 3,250
- -------------------------------------------------------------------------------- 39 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- New Mexico State Highway Commercial Revenue Subordinated Lien Bonds Series 1996 / (FSA Insurance & Canadian Imperial Bank of Commerce SPA) 3.70%, 01/07/98 $57,400 $ 57,400 ---------- 85,960 ---------- NEW YORK--2.3% Albany, New York Industrial Development Agency Revenue Refunding Bonds (United Cerebral Palsy Association Project) / (Key Bank N.A. LOC) 3.85%, 01/07/98 13,200 13,200 Albany-Dougherty County, New York Hospital Authority Revenue Bonds (Phoebe Putney Memorial Hospital) Series 1996 / (AMBAC Insurance) 3.75%, 01/07/98 11,400 11,400 New York City, New York General Obligation Bonds Series 1993 Subseries A-8 / (Morgan Guaranty Trust Co.--New York LOC) 5.10%, 01/01/98 15 15 New York City, New York Health & Hospital Corp. Health System Revenue Bonds Series 1997A / (Morgan Guaranty Trust Co--New York LOC) 3.50%, 01/07/98 3,700 3,700 New York City, New York Housing Development Corp. Multi-Family Housing Mortgage Revenue Bonds (Parkgate Tower Project) / (Citibank LOC) 3.60%, 01/07/98 770 770 New York City, New York Industrial Development Agency Revenue Bonds (Brooklyn Navy Yard Co.) Series 1995A / (Bank of America LOC) 4.25%, 01/07/98 5,600 5,600 Par Value ------- ---------- New York City, New York Industrial Development Agency Revenue Bonds (Brooklyn Navy Yard Co.) Series 1995B / (Bank of America LOC) 4.35%, 01/07/98 $ 3,000 $ 3,000 New York City, New York Industrial Development Authority Special Facility Revenue Bonds (Korean Airlines Co. Project) Series 1997A / (Bankers Trust LOC) 3.60%, 01/07/98 11,800 11,800 New York City, New York Industrial Development Special Facility Revenue Bonds (Korean Airlines Co. Project) Series 1997C / (Bankers Trust LOC) 3.60%, 01/07/98 9,400 9,400 New York City, New York Industrial Development Special Facility Revenue Bonds (Korean Airlines Co. Project) Series 1997B / (Bankers Trust LOC) 3.65%, 01/07/98 9,100 9,100 New York State Energy Research & Development Authority Pollution Control Revenue Refunding Bonds (Orange & Rockland Utilities, Inc. Project) Series 1994A / (FGIC Insurance & Societe Generale SBPA) 3.55%, 01/07/98 4,100 4,100 New York State Housing Finance Agency Multi-Family Housing Revenue Bonds (Tribeca Park Housing Project) Series 1997A / (Bayerische Hypotheken Und Wechsel Bank LOC) 4.10%, 12/31/97 8,700 8,700 New York State Housing Finance Agency Revenue Bonds (West 50 Street Project) Series 1997A / (Fleet Bank of New York LOC) 3.60%, 01/07/98 28,100 28,100
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Par Value ------- ---------- New York State Local Government Assistance Corp. Revenue Bonds Series 1994B / (Credit Suisse & Swiss Bank LOC) 3.50%, 01/07/98 $ 1,000 $ 1,000 New York State Local Government Assistance Corp. Revenue Bonds Series 1995B / (Bank of Nova Scotia LOC) 3.55%, 01/07/98 6,800 6,800 Port Authority of New York and New Jersey Special Obligation Revenue Bonds (Versatile Structure Obligation-6 project) / (Bank of Nova Scotia LOC) 5.10%, 01/01/98 10,000 10,000 Yonkers, New York Industrial Development Agency Civic Facilities Revenue Bonds (Consumers Union Facility Project) Series 1994 / (AMBAC Insurance & Credit Local de France SBPA) 3.50%, 01/07/98 500 500 ---------- 127,185 ---------- NORTH CAROLINA--0.1% Guilford County, North Carolina Industrial Facilities & Pollution Control Financing Authority Revenue Bonds (Culp Inc. Project) / (Wachovia Bank LOC) 4.25%, 01/07/98 3,825 3,825 Guilford County, North Carolina Industrial Facilities & Pollution Control Financing Authority Revenue Bonds (Camco Manufacturing Project) Series 1996 / (Wachovia Bank LOC) 4.25%, 01/07/98 2,700 2,700 Par Value ------- ---------- Union County, North Carolina Industrial Facilities & Pollution Control Financing Authority Revenue Bonds (Rock-Tenn Converting County Project) / (Suntrust Bank Atlanta LOC) 4.30%, 01/07/98 $ 1,750 $ 1,750 ---------- 8,275 ---------- NORTH DAKOTA--0.4% Mercer County, North Dakota National Rural Utility Pollution Control Revenue Bonds (Basin Electric Power Cooperative Antelope Project) Series 1984C / (N.R.U.--C.F.C. Guaranty LOC) 3.85%, 01/07/98 7,800 7,800 Richland County, North Dakota Industrial Development Revenue Bonds (Minn-Dak Farmers Co-op) Series 1986B / (Norwest Bank LOC) 4.50%, 01/07/98 1,000 1,000 Richland County, North Dakota Solid Waste Disposal Revenue Bonds (Minn-Dak Farmers Co-op) Series 1996A / (Norwest Bank LOC) 4.50%, 01/07/98 11,000 11,000 ---------- 19,800 ---------- OHIO--0.7% Cleveland, Ohio Airport System Revenue Bonds Series 1997D / (Toronto-Dominion Bank LOC) 3.75%, 01/07/98 13,530 13,530 Columbus, Ohio Electric System Revenue Bonds Series 1984 / (Union Bank of Switzerland LOC) 3.70%, 01/07/98 6,380 6,380 Ohio Air Quality Development Authority Revenue Bonds (JMG Funding, LP) Series 1994A / (Societe Generale LOC) 3.90%, 01/07/98 2,900 2,900
- -------------------------------------------------------------------------------- 41 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Ohio Air Quality Development Authority Revenue Bonds (Limited Partnership Project) Series 1994B / (Societe Generale LOC) 3.65%, 01/07/98 $14,400 $ 14,400 Ohio Housing Finance Agency Multi-Family Housing Revenue Bonds (Kenwood Congregate Retirement Community) Series 1985 / (Morgan Guaranty Trust Co.--New York LOC) 3.80%, 01/07/98 2,000 2,000 ---------- 39,210 ---------- OKLAHOMA--0.7% Garfield County, Oklahoma Industrial Development Adjusting Revenue Bonds (Bank of Commerce Group Inc. Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 7,265 7,265 Muldrow, Oklahoma Public Works Authority Industrial Development Revenue Bonds (Oklahoma Foods Project) / (Rabobank Nederland N.V. LOC) 3.90%, 01/07/98 8,500 8,500 Oklahoma Development Financing Authority Revenue Bonds (Shawnee Funding Ltd.) / (Bank of Nova Scotia LOC) 4.30%, 01/07/98 4,000 4,000 Oklahoma State Student Loan Authority Revenue Bonds Series A / (MBIA Insurance & SLMA LOC) 3.75%, 01/07/98 2,000 2,000 Oklahoma State Student Loan Authority Revenue Bonds Student Loan Series 1996A / (MBIA Insurance & SLMA LOC) 3.75%, 01/07/98 18,000 18,000 Par Value ------- ---------- Tulsa, Oklahoma Industrial Development Authority Revenue Bonds (Thomas & Betts Project) Series 1991 / (Wachovia Bank LOC) 4.30%, 01/07/98 $ 700 $ 700 ---------- 40,465 ---------- OREGON--0.4% Oregon State Economic Development Commission Economic & Industrial Development Revenue Bonds / (Wachovia Bank LOC) 4.20%, 01/07/98 4,100 4,100 Oregon State General Obligation Notes Series 1973H / (Bank of Tokyo LOC) 3.65%, 01/07/98 9,900 9,900 Port of Portland, Oregon Industrial Development Revenue Bonds (Schnitzer Steel Project) / (Comerica Bank LOC) 3.65%, 01/07/98 5,000 5,000 Port of Portland, Oregon Special Obligation Revenue Bonds (Portland Bulk Terminals Ltd. Liability Corp. Project) / (Canadian Imperial Bank of Commerce LOC) 4.25%, 01/07/98 5,000 5,000 ---------- 24,000 ---------- PENNSYLVANIA--5.8% Allegheny County, Pennsylvania Industrial Development Authority Economic Development Revenue Bonds (Sauereisen Project) / (Mellon LOC) 4.10%, 01/07/98 1,600 1,600 Bucks County, Pennsylvania Industrial Development Authority Variable Rate Demand Notes (Klearfold Project) / (Mellon LOC) 4.20%, 01/07/98 3,000 3,000
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Par Value ------- ---------- Bucks County, Pennsylvania St. Mary Hospital Authority Variable Rate Demand Obligation (Catholic Healthcare Project) Series 1997B 3.60%, 01/07/98 $10,000 $ 10,000 Chester County, Pennsylvania Industrial Development Authority Revenue Bonds (Devault Manufacturing Facilities Project) / (Corestates Bank N.A. LOC) 4.11%, 01/07/98 2,600 2,600 Dauphin County, Pennsylvania General Authority Revenue Bonds (All Health Pooled Financing Program) / (Credit Suisse First Boston & FSA LOC) 3.75%, 01/07/98 30,000 30,000 Emmaus, Pennsylvania General Authority Revenue Bonds / (FSA Insurance & Credit Suisse SPA) 4.00%, 01/07/98 15,560 15,560 Montgomery County, Pennsylvania Industrial Development Authority Revenue Bonds (Seton Medical Supply Co. Project) / (First Union National Bank LOC) 3.65%, 01/07/98 5,500 5,500 Montgomery County, Pennsylvania Redevelopment Authority Multi- Family Housing Revenue Refunding Bonds (Glenmore Association Project) Series A / (FNMA LOC) 4.10%, 01/07/98 3,950 3,950 Northampton County, Pennsylvania Industrial Development Authority Revenue Bonds (Binney and Smith-B) / (FNB Chicago LOC) 4.11%, 01/07/98 1,000 1,000 Northampton County, Pennsylvania Industrial Development Authority Revenue Bonds (Binney and Smith-A) / (FNB Chicago LOC) 4.11%, 01/07/98 3,250 3,250 Par Value ------- ---------- Pennsylvania Economic Development Finance Authority Exempt Facility Revenue Bonds (National Gypsum Co.) Series 1997B / (NCNB LOC) 3.60%, 01/07/98 $ 5,000 $ 5,000 Pennsylvania Economic Development Finance Authority Exempt Facility Revenue Bonds (National Gypsum Co., Shipping Port Project) Series 1997A / (NCNB LOC) 3.75%, 01/07/98 10,000 10,000 Pennsylvania Energy Development Authority (Clarion Corp.-Piney Creek Project Apartments) Series 1986C / (Swiss Bank LOC) 3.75%, 01/07/98 1,155 1,155 Pennsylvania Energy Development Authority Energy Development Revenue Bonds (B & W Ebensberg Project) Series 1986 / (Swiss Bank LOC) 3.75%, 01/07/98 9,475 9,475 Pennsylvania Higher Education Assistance Agency Student Loan Revenue Bonds Series 1988A / (SLMA LOC) 3.75%, 01/07/98 15,100 15,100 Pennsylvania Higher Education Assistance Agency Student Loan Revenue Bonds Series 1988B / (SLMA LOC) 3.75%, 01/07/98 55,000 55,000 Pennsylvania Higher Education Assistance Agency Student Loan Revenue Bonds Series 1988C / (SLMA LOC) 3.75%, 01/07/98 42,100 42,100 Pennsylvania Higher Education Assistance Agency Student Loan Revenue Bonds Series 1994A / (SLMA LOC) 3.75%, 01/07/98 9,000 9,000
- -------------------------------------------------------------------------------- 43 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Pennsylvania Higher Education Assistance Agency Student Loan Revenue Bonds Series 1995A / (SLMA LOC) 3.75%, 01/07/98 $ 2,000 $ 2,000 Pennsylvania Higher Education Assistance Agency Student Loan Revenue Bonds Series 1997A / (SLMA LOC) 3.95%, 01/07/98 21,000 21,000 Pennsylvania State Higher Education Facilities Revenue Bonds (University of Pennsylvania Health Services Project) Series C / (Credit Suisse First Boston LOC) 3.60%, 01/07/98 40,700 40,700 Sayre, Pennsylvania Health Care Facilities Authority Revenue Bonds (VHA Capital Finance Revenue) Series 1985F / (AMBAC Insurance & FNB Chicago SBPA) 3.65%, 01/07/98 4,100 4,100 York, Pennsylvania General Authority Pooled Financing Revenue Bonds Series 1996 / (First Union Bank of North Carolina LOC) 4.20%, 01/07/98 29,825 29,825 ---------- 320,915 ---------- RHODE ISLAND--0.6% Rhode Island State Student Loan Authority Higher Education Revenue Bonds Series 1995-1 / (National Westminster Bank PLC LOC) 3.80%, 01/07/98 12,300 12,300 Rhode Island State Student Loan Authority Higher Education Revenue Bonds Series 1996-2 / (National Westminster Bank PLC LOC) 3.80%, 01/07/98 5,000 5,000 Par Value ------- ---------- Rhode Island State Student Loan Authority Higher Education Revenue Bonds Series 1996-3 / (National Westminster Bank PLC LOC) 3.80%, 01/07/98 $15,400 $ 15,400 ---------- 32,700 ---------- SOUTH CAROLINA--0.4% Dorchester County, South Carolina Pollution Control Revenue Bonds (BOC Group Inc.) / (Wachovia Bank LOC) 4.20%, 01/07/98 2,000 2,000 Greenville, South Carolina County and City Industrial Development Revenue Bonds (Stevens Aviation Technology Services Project) / (First Union National Bank LOC) 4.30%, 01/07/98 3,000 3,000 South Carolina Economic Development Authority Hospital Facility Revenue Bonds (Sanders Brothers Construction) / (Wachovia Bank LOC) 4.30%, 01/07/98 3,150 3,150 South Carolina Jobs Economic Development Authority Economic Development Revenue Bonds (Thomas and Betts Corp. Project) / (Wachovia Bank, N.A. LOC) 4.30%, 01/07/98 2,100 2,100 South Carolina Jobs Economic Development Authority Industrial Development Revenue Bonds (Electric City Printing Project) / (Wachovia Bank of North Carolina LOC) 4.30%, 01/07/98 3,000 3,000 South Carolina State Port Authority Revenue Bonds (Junior Lien) / (South Carolina National Bank LOC) 3.95%, 01/07/98 3,300 3,300
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Par Value ------- ---------- Spartanburg County, South Carolina Industrial Development Authority Revenue Bonds (Bemis, Inc.) / (Wachovia Bank LOC) 4.15%, 01/07/98 $ 4,750 $ 4,750 ---------- 21,300 ---------- SOUTH DAKOTA--0.3% South Dakota State Health & Educational Facilities Authority Revenue Bonds (McKenna Hospital) Series 1994 / (MBIA Insurance & Banque Paribas SBPA) 4.20%, 01/07/98 15,930 15,930 ---------- TENNESSEE--3.1% Chattanooga Industrial Development Board Industrial Development Revenue Bonds (National Print Group Inc. Project) / (Suntrust Bank Nashville N.A. LOC) 4.35%, 01/07/98 2,600 2,600 Chattanooga, Tennessee Health Education & Housing Facility Board Revenue Bonds (Baylor School Project) / (Sun Bank LOC) 4.20%, 01/07/98 1,700 1,700 Franklin County, Tennessee Industrial Development Board Industrial Development Revenue Bonds (Hi-Tech Porject) Series 1997 / (Regions Bank LOC) 3.95%, 01/07/98 7,000 7,000 Jackson County, Tennessee Industrial Development Board Solid Waste Facilities Revenue Bonds (Ameristeel Corp.) / (NationsBank N.A. LOC) 4.35%, 01/01/98 5,000 5,000 Par Value ------- ---------- Knox County, Tennessee Health Education & Housing Facilities Revenue Bonds (Web School Knoxville Project) / (Suntrust Bank Nashville N.A. LOC) 4.20%, 01/07/98 $ 5,000 $ 5,000 Metropolitan Government of Nashville Davidson County, Tennessee Industrial Development Revenue Bonds (Bind Technologies Inc.) / (NationsBank of Tennessee, N.A. LOC) 4.40%, 01/07/98 3,750 3,750 Metropolitan Nashville & Davidson County, Tennessee Health & Education Facility Board Revenue Bonds Series A / (FGIC Insurance & Barclays Bank PLC LOC) 3.70%, 01/07/98 1,200 1,200 Metropolitan Nashville & Davidson County, Tennessee Industrial Development Multi-Family Housing Revenue Bonds (Arbor Crest) Series 1985B / (Wachovia Bank LOC) 4.20%, 01/07/98 4,000 4,000 Metropolitan Nashville & Davidson County, Tennessee Industrial Development Multi-Family Housing Revenue Bonds (Arbor Knoll) Series 1985A / (Wachovia Bank LOC) 4.20%, 01/07/98 1,000 1,000 Montgomery County, Tennessee Public Building Authority Pooled Revenue Bonds Financing County Loans / (NationsBank LOC) 4.20%, 01/07/98 28,400 28,400 Montgomery County, Tennessee Public Building Authority Pooled Financing Revenue Bonds (County Loan Project) / (NationsBank South N.A. LOC) 4.20%, 01/07/98 36,000 36,000
- -------------------------------------------------------------------------------- 45 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Sevier County, Tennessee Public Building Authority Local Government Public Bonds Series G / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 $ 7,000 $ 7,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1995C-1 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.10%, 01/07/98 4,000 4,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1995C-2 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 4,395 4,395 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1995C-3 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 10,000 10,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1995E-3 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 3,000 3,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996D-1 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 3,430 3,430 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996E-1 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 6,835 6,835 Par Value ------- ---------- Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996E-4 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 $ 3,000 $ 3,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996E-5 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 1,750 1,750 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996F1 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 9,000 9,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996F2 / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 9,000 9,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series II-C / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 1,100 1,100 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996A / (AMBAC Insurance & Kredietbank, N.V. SPA) 4.15%, 01/07/98 7,000 7,000
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Par Value ------- ---------- Volunteer State Variable Rate Student Loan Funding Bonds Series 1987 / (Hong Kong Shang Hai Bank LOC) 3.90%, 01/07/98 $10,600 $ 10,600 ---------- 175,760 ---------- TEXAS--5.6% Amarillo, Texas Health Facilities Corp. Revenue Refunding Bonds / (Rabobank Nederland N.V. LOC) 3.90%, 01/07/98 3,155 3,155 Amarillo, Texas Health Facility Corp. Hospital Revenue Bonds (High Plains Baptist Hospital) Series 1985 / (Banque Paribas LOC) 3.90%, 01/07/98 3,100 3,100 Bexar County, Texas Health Facilities Development Corp. Revenue Bonds (Chandler Memorial Home Project) Series 1995 / (Bank One LOC) 4.15%, 01/07/98 5,170 5,170 Brazos River Authority, Texas Pollution Control Revenue Refunding Bonds (Utilities Electric-B Project)/(Union Bank of Switzerland LOC) 4.60%, 01/01/98 2,500 2,500 Brazos River, Texas Higher Education Authority Revenue Bonds Series 1993B-1 / (SLMA LOC) 3.75%, 01/07/98 30,300 30,300 Brownsville County Texas Industrial Development Corp. Revenue Refunding Bonds (Rich Seapak Corp. Project) / (Suntrust Bank Atlanta LOC) 4.30%, 01/07/98 1,250 1,250 Capital Health Facilities Development Corp. Revenue Bonds (Island on Lake Travis Ltd. Project) / (Credit Suisse First Boston LOC) 4.15%, 01/07/98 8,500 8,500 Par Value ------- ---------- Central Waco, Texas Development Corp. Industrial Development Revenue Bonds (H.E. Butt Grocery) / (Texas Commerce Bank, N.A. LOC) 3.70%, 01/07/98 $ 3,650 $ 3,650 Collin County, Texas Housing Finance Corp. Multi-Family Housing Revenue Bonds (Huntington Apartments Project) / (Fleet Bank, N.A. LOC) 4.10%, 01/07/98 6,150 6,150 Euless, Texas Industrial Development Authority Revenue Bonds (Ferguson Enterprises, Inc. Project) / (Wachovia Bank LOC) 4.20%, 01/07/98 4,850 4,850 Grand Prairie, Texas Industrial Development Authority Industrial Development Revenue Bonds (NTA Leasing Co. Project) Series 1994 / (Texas Commerce Bank, N.A. LOC) 3.85%, 01/07/98 2,140 2,140 Hays, Texas Memorial Health Facilities Development Corp. Hospital Revenue Bonds (AHS / Sunbelt Central Texas Medical Center Project) Series 1990A / (Swiss Bank LOC) 4.25%, 01/07/98 8,500 8,500 Hays, Texas Memorial Health Facilities Development Corp. Hospital Revenue Bonds (AHS / Sunbelt Central Texas Medical Center Project) Series 1990B / (Swiss Bank LOC) 4.25%, 01/07/98 15,300 15,300 Lavaca-Navidad River Authority, Texas Water Supply System Contract Revenue Bonds (Formosa Plastics Corp. Project) / (Canadian Imperial Bank of Commerce LOC) 3.95%, 01/07/98 13,600 13,600
- -------------------------------------------------------------------------------- 47 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Lower Neches Valley Authority, Texas Industrial Development Corp. Pollution Control Revenue Bonds (Mobil Corp. Neches River Treatment Project) 3.70%, 01/07/98 $12,000 $ 12,000 North Texas Higher Education Authority Income Tax Student Loan Revenue Refunding Bonds Series 1996B / (AMBAC Insurance & SLMA SBPA) 3.75%, 01/07/98 4,000 4,000 North Texas Higher Education Authority Income Tax Student Loan Revenue Refunding Bonds Series 1996D / (AMBAC Insurance & SLMA SBPA) 3.75%, 01/07/98 4,000 4,000 North Texas Higher Education Authority Student Loan Revenue Refunding Bonds Series 1987A / (Credit Communal de Belgique LOC) 3.75%, 01/07/98 86,750 86,750 Panhandle Plains, Texas Higher Education Authority Student Loan Revenue Bonds Series 1992A-1 / (SLMA LOC) 3.75%, 01/07/98 2,400 2,400 Panhandle Plains, Texas Higher Education Authority Student Loan Revenue Bonds Series 1993A / (SLMA LOC) 3.75%, 01/07/98 13,300 13,300 Panhandle Plains, Texas Higher Education Authority Student Loan Revenue Bonds Series 1997X / (SLMA LOC) 3.75%, 01/07/98 14,000 14,000 Panhandle Plains, Texas Higher Education Authority Student Loan Revenue Bonds Series 1991A / (SLMA LOC) 3.75%, 01/07/98 7,400 7,400 Par Value ------- ---------- Panhandle Plains, Texas Higher Education Authority Student Loan Revenue Bonds Series 1992A / (SLMA LOC) 3.75%, 01/07/98 $10,500 $ 10,500 Panhandle Plains, Texas Higher Education Authority Student Loan Revenue Bonds Series 1995A / (SLMA LOC) 3.75%, 01/07/98 13,000 13,000 Robertson County, Texas Industrial Development Corp. Industrial Development Revenue Bonds (Sanderson Farms Project) Series 1995 / (Harris Trust & Savings Bank LOC) 3.90%, 01/07/98 4,300 4,300 Silsbee, Texas Health Facilities Development Revenue Bonds (Silsbee Doctor's Hospital) / (HEI Guaranty & Citibank LOC) 3.70%, 01/07/98 6,000 6,000 South Texas Higher Education Authority Student Loan Revenue Bonds Series 1997Z / (MBIA Insurance & SLMA SBPA) 4.00%, 01/07/98 7,000 7,000 Texas Health Facilities Development Corp. Adjustable Convertible Extendable Securities Revenue Bonds (North Texas Pooled Health) Series 1985B / (Banque Paribas LOC) 3.90%, 01/07/98 19,000 19,000 Trinity River Authority, Texas Pollution Control Revenue Bonds (Lafarge Corp. Project) / (Banque Nationale de Paris LOC) 4.40%, 01/07/98 3,100 3,100 ---------- 314,915 ---------- UTAH--0.8% Salt Lake City, Utah Airport Revenue Bonds Series 1994A / (Credit Suisse LOC) 3.75%, 01/07/98 4,300 4,300
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Par Value ------- ---------- Salt Lake City, Utah Airport Revenue Bonds Series 1996A / (Union Bank of Switzerland LOC) 4.20%, 01/07/98 $ 2,000 $ 2,000 Utah State Board of Regents Student Loan Revenue Bonds Series 1995L / (AMBAC Insurance & Barclays Bank PLC LOC) 3.75%, 01/07/98 3,000 3,000 Utah State Board of Regents Student Loan Revenue Bonds Series 1997R / (AMBAC Insurance & Barclays Bank PLC LOC) 3.75%, 01/07/98 34,255 34,255 ---------- 43,555 ---------- VERMONT--0.1% Vermont Education & Health Buildings Financing Agency (VHA New England) Series 1985G / (AMBAC Insurance & FNB Chicago SBPA) 3.70%, 01/07/98 4,240 4,240 ---------- VIRGINIA--0.2% Chesterfield County, Virginia Industrial Development Authority Industrial Development Revenue Bonds (Erni Components Inc. Project) / (First Union National Bank LOC) 4.30%, 01/07/98 3,000 3,000 King George County, Virginia Industrial Development Authority Solid Waste Disposal Facility (Garnet of Virginia Project) Series 1996 / (Morgan Guaranty Trust--New York LOC) 4.15%, 01/07/98 3,700 3,700 Par Value ------- ---------- Lynchburg, Virginia Industrial Development Authority Hospital Facility Revenue Bonds (First Mortgage VHA Mid-Atlantic States, Inc.) Series 1985B / (AMBAC Insurance & Mellon Bank SBPA) 3.70%, 01/07/98 $ 400 $ 400 Lynchburg, Virginia Industrial Development Authority Hospital Facility Revenue Bonds (First Mortgage VHA Mid-Atlantic States, Inc.) Series 1985C / (AMBAC Insurance & Mellon Bank SBPA) 3.70%, 01/07/98 600 600 Lynchburg, Virginia Industrial Development Authority Hospital Facility Revenue Bonds (First Mortgate VHA Mid-Atlantic States, Inc.) Series 1985A / (AMBAC Insurance & Mellon Bank SBPA) 3.70%, 01/07/98 500 500 Staunton, Virginia Industrial Development Authority Industrial Development Revenue Bonds (Diebold Inc. Staunton Project) Series 1997 / (Bank One, Akron LOC) 4.25%, 01/07/98 2,500 2,500 Virginia Small Business Finance Authority Industrial Development Revenue Bonds (Dong Sung America) / (First Union National Bank of North Carolina LOC) 3.80%, 01/07/98 2,380 2,380 ---------- 13,080 ---------- WASHINGTON--4.1% Everett, Washington Industrial Development Revenue Bonds (Partners Trust / Synsor Project)/ (Bank of America LOC) 4.10%, 01/07/98 5,300 5,300
- -------------------------------------------------------------------------------- 49 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- King County, Washington Economic Enterprise Corp. Revenue Bonds (Sunrise Project) Series 1997 / (Bank of America NT & SA LOC) 4.00%, 01/07/98 $ 4,100 $ 4,100 King County, Washington Housing Authority Variable Rate Multi- Family Housing Revenue Bonds (Auburn County Apartments) / (U.S. Bank N.A. LOC) 4.00%, 01/07/98 3,500 3,500 Metropolitan Washington District of Columbia Airports Authority System Revenue Refunding Bonds Series 1997C / (Union Bank of Switzerland LOC) 3.65%, 01/07/98 40,000 40,000 Pierce County, Washington Economic Development Bonds (McFarland Cascade Project) / (U.S. Bank of Washington LOC) 4.40%, 01/07/98 2,000 2,000 Pierce County, Washington Economic Development Corp. Revenue Bonds (Flex-A-Lite Consolidated Project) / (Bank of America LOC) 4.10%, 01/07/98 3,000 3,000 Pierce County, Washington Economic Development Corp. Revenue bonds (K & M Holdings II Project) Series 1997 / (Wells Fargo Bank LOC) 4.15%, 01/07/98 1,820 1,820 Port Moses Lake, Washington Public Corp. Revenue Bonds (Moses Lake Industrial Project) Series 1995 / (Bank of America LOC) 4.10%, 01/07/98 3,000 3,000 Port Moses Lake, Washington Public Corp. Revenue Bonds (National Frozen Foods Corporation) / (Bank of America NT & SA LOC) 4.10%, 01/07/98 7,500 7,500 Par Value ------- ---------- Port of Seattle, Washington Subordinate Lien Revenue Bonds Series 1997 / (Canadian Imperial Bank of Commerce LOC) 3.85%, 01/07/98 $81,530 $ 81,530 Seattle, Washington Housing Authority Revenue Bonds (CASA Pacifica Apartments Project) Series 1997 / (Bank of America NT & SA LOC) 4.00%, 01/07/98 3,350 3,350 Seattle, Washington Housing Authority Revenue Bonds (Holly Park Project) / (Bank of America NT & SA LOC) 4.00%, 01/07/98 9,000 9,000 Spokane County, Washington Industrial Development Corp. Metal Sales Manufacturing Corp. / (Star Bank LOC) 4.25%, 01/07/98 2,835 2,835 Washington Health Care Facilities Authority Revenue Bonds (Yakima Valley Farm Workers Clinic) Series 1997DN / (Bank of America NT & SA LOC) 4.20%, 01/07/98 3,900 3,900 Washington State Development Authority Revenue Bonds (Hunter Douglas Project) Series 1997A / (ABN-Amro Bank N.V. LOC) 4.30%, 01/07/98 3,500 3,500 Washington State Economic Development Finance Authority Industrial Development Revenue Bonds (Tonkin Building) Series 1997A / (U.S. Bank of Washington LOC) 4.40%, 01/07/98 1,000 1,000 Washington State Health Care Facilities Authority Revenue Refunding Bonds (Sisters of St. Joseph of Peace) Series 1993 / (MBIA Insurance & U.S. Bank of Washington SBPA) 4.15%, 01/07/98 12,400 12,400
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Par Value ------- ---------- Washington State Housing Finance Authority Multi-Family Housing Revenue Bonds (Merrill Gardens Project) Series 1997A / (U.S. Bank of Washington LOC) 4.30%, 01/07/98 $ 2,000 $ 2,000 Washington State Housing Finance Commission Multi-Family Housing Mortgage Revenue Bonds (Meridian Court Apartments) Series 1996 / (Bank of America LOC) 4.00%, 01/07/98 8,000 8,000 Washington State Housing Finance Commission Multi-Family Housing Mortgage Revenue Bonds (Canyon Lake II) Series 1993A / (U.S. Bank of Washington LOC) 4.35%, 01/07/98 4,565 4,565 Washington State Housing Finance Commission Multi-Family Housing Mortgage Revenue Bonds (Lake Washington Apartments) Series 1996DN / (Bank of America LOC) 4.25%, 01/07/98 8,750 8,750 Yakama, Washington Confederated Tribes and Bands Variable Rate Demand Obligation (Yakama Forests Products Project) / (Bank of America NT & SA LOC) 4.10%, 01/07/98 8,300 8,300 Yakima County, Washington Public Corp. Revenue Bonds (Hi Country Foods Project) / (Bank of America LOC) 4.10%, 01/07/98 6,800 6,800 Yakima County, Washington Public Corp. Revenue Bonds (Printing Press Project) / (Bank of America LOC) 4.10%, 01/07/98 3,000 3,000 ---------- 229,150 ---------- Par Value ------- ---------- WEST VIRGINIA--0.3% Marion County West Virginia Solid Waste Disposal Facilities Revenue Bonds (Grant Town Project) Series D / (National Westminster Bank PLC LOC) 3.75%, 01/07/98 $ 4,300 $ 4,300 Marion County, West Virginia County Commission Solid Waste Disposal Facility Revenue Bonds (Grant Town Project) Series B / (National Westminster Bank PLC LOC) 3.75%, 01/07/98 11,000 11,000 West Virginia State Hospital Finance Authority Hospital Revenue Bonds (St. Joseph's Hospital Project) Series 1987 / (Bank of Tokyo-Mitsubishi Ltd. LOC) 3.75%, 01/07/98 2,000 2,000 ---------- 17,300 ---------- WISCONSIN--0.9% Carlton, Wisconsin Pollution Control Revenue Bonds (Power & Light Project) 3.80%, 01/07/98 5,800 5,800 Chilton, Wisconsin Industrial Development Revenue Bonds (Kaytee Products, Inc. Project) Series 1995 / (Bank One Milwaukee LOC) 4.25%, 01/07/98 1,485 1,485 Colburn, Wisconsin Industrial Development Revenue Bonds (Heartland Farms Project) Series 1994 / (Marshall & Ilsley Bank LOC) 4.35%, 01/07/98 6,900 6,900 Fairwater, Wisconsin Industrial Development Revenue Bonds (Dean Foods Co. Project) Series 1990 / (Wachovia Bank LOC) 4.20%, 01/07/98 1,450 1,450
- -------------------------------------------------------------------------------- 51 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Grafton, Wisconsin Industrial Development Revenue Bonds (Milwaukee Sign Co. Project) / (Marshall & Ilsley Bank LOC) 4.35%, 01/07/98 $ 1,975 $ 1,975 Kenosha, Wisconsin Industrial Development Revenue Bonds (Asyst Tech. Ltd. Liability Corp. Project) / (LaSalle National Bank LOC) 4.10%, 01/07/98 5,000 5,000 Lac Du Flambeau Band of Lake Superior, Wisconsin Chippewa Indians Special Obligation Bonds (Simpson Electric Co. Project) Series 1985 / (Barclays Bank PLC LOC) 3.70%, 01/07/98 4,400 4,400 Milwaukee, Wisconsin Redevelopment Authority Industrial Development Revenue Bonds (Field Container Corp. LP) Series 1994 / (Northern Trust LOC) 4.25%, 01/07/98 5,000 5,000 Prentice, Wisconsin Industrial Development Refunding Revenue Bonds (Blount, Inc.) Series 1992 / (Morgan Guaranty Trust Co.-- New York LOC) 4.15%, 01/07/98 1,688 1,688 Rhinelander, Wisconsin Industrial Development Adjustable Rate Revenue Bonds (Lake Shore Inc. Project) / (Australia & New Zealand Bank Group LOC) 4.40%, 01/07/98 2,290 2,290 Wisconsin Housing & Economic Development Authority Variable Rate Revenue Bonds (Ultratec Inc. Project ) Series 7 / (Marshall & Ilsley Bank LOC) 4.35%, 01/01/98 3,240 3,240 Par Value ------- ---------- Wisconsin State Health & Education Facilities Authority Revenue Bonds (Sinai Samaritan) Series 1994A / (Marshall & Ilsley Bank LOC) 4.05%, 01/07/98 $12,950 $ 12,950 ---------- 52,178 ---------- WYOMING--0.0% Unita County, Wyoming Pollution Control Financing Authority Pollution Control Revenue Bonds (Chevron USA, Inc. Project) Series 1992 5.00%, 01/01/98 300 300 ---------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $3,629,102) 3,629,102 ---------- TAX-EXEMPT COMMERCIAL PAPER--9.3%(b) ARIZONA--1.6% Maricopa County, Arizona Pollution Control Revenue Authority Revenue Refunding Bonds (Southern California Palo Alto Verde Project) Series 1985B 3.75%, 03/11/98 7,250 7,250 Maricopa County, Arizona Pollution Control Revenue Authority Revenue Refunding Bonds (Southern California Palo Alto Verde Project) Series 1985C 3.75%, 02/10/98 4,000 4,000 3.75%, 02/12/98 16,250 16,250 Maricopa County, Arizona Pollution Control Revenue Authority Revenue Refunding Bonds (Southern California Palo Alto Verde Project) Series 1985G 3.75%, 02/12/98 16,900 16,900 Maricopa County, Arizona Pollution Control Revenue Refunding Bonds (Southern California Edison Palo Alto Verde Project) Series 1985D 3.75%, 03/13/98 7,550 7,550
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Par Value ------- ---------- Maricopa County, Arizona Pollution Control Revenue Refunding Bonds (Southern California Edison Palo Alto Verde Project) Series 1985E 3.75%, 03/13/98 $12,030 $ 12,030 Salt River Project, Arizona Agricultural Improvement Program / (Multiple Credit Enhancements LOC) 3.75%, 03/13/98 15,400 15,400 Salt River Project, Arizona Agricultural Improvement Program / (Multiple Credit Enhancements) 3.80%, 02/25/98 10,000 10,000 ---------- 89,380 ---------- FLORIDA--0.0% Orange County, Florida Commercial Paper Notes Series A / (Nationsbank N.A. LOC) 3.65%, 03/11/98 2,750 2,750 ---------- KANSAS--0.2% Burlington, Kansas Pollution Control Revenue Refunding Bonds (Kansas Power & Light Co. Project) Series 1987A / (Toronto-Dominion Bank LOC) 3.75%, 02/12/98 6,100 6,100 Burlington, Kansas Pollution Control Revenue Refunding Bonds (Kansas Power & Light Co. Project) Series 1987B / (Deutsche Bank LOC) 3.75%, 02/18/98 2,000 2,000 3.75%, 03/11/98 1,200 1,200 ---------- 9,300 ---------- KENTUCKY--0.3% Trimble County, Kentucky Pollution Control Revenue Bonds (Louisville G&E Project) Series 1997A 3.85%, 02/13/98 15,000 15,000 ---------- Par Value ------- ---------- LOUISIANA--1.5% Louisiana Adjustable Tender General Obligation Refunding Bonds Series 1991A / (Credit Local De France LOC) 3.75%, 02/12/98 $10,150 $ 10,150 3.70%, 02/18/98 13,950 13,950 Louisiana State Pollution Control Revenue Refunding Bonds (St. James Parish/ Texaco Project) Series 1988B 3.70%, 01/14/98 61,030 61,030 ---------- 85,130 ---------- MICHIGAN--1.4% Michigan State Building Authority Commercial Paper Notes Series 1 / (Canadian Imperial Bank of Commerce LOC) 3.75%, 03/02/98 80,000 80,000 ---------- MINNESOTA--0.7% Rochester, Minnesota Health Care Facilities Revenue Bonds (Mayo Foundation/Mayo Medical Center) Series 1988E / (Credit Suisse SBPA) 3.75%, 03/11/98 9,100 9,100 Rochester, Minnesota Health Care Facilities Revenue Bonds (Mayo Foundation/Mayo Medical Center) Series 1988F / (Credit Suisse SBPA) 3.75%, 02/10/98 1,800 1,800 3.75%, 03/11/98 6,600 6,600 Rochester, Minnesota Health Care Facilities Revenue Bonds (Mayo Foundation/Mayo Medical Center) Series 1992A 3.75%, 02/18/98 3,500 3,500 3.75%, 03/11/98 2,000 2,000 Rochester, Minnesota Health Care Facilities Revenue Bonds (Mayo Foundation/Mayo Medical Center) Series 1992B 3.75%, 03/11/98 3,100 3,100
- -------------------------------------------------------------------------------- 53 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Rochester, Minnesota Health Care Facilities Revenue Bonds (Mayo Foundation/Mayo Medical Center) Series 1992C 3.75%, 02/18/98 $ 8,600 $ 8,600 3.75%, 03/11/98 4,800 4,800 ---------- 39,500 ---------- NEW YORK--0.2% New York City, New York Muni Assistance Corp. Tax-Exempt Commercial Paper Notes Series 1997K-3 / (Landesbank Hessen-Thuringen Girozentrale LOC) 3.70%, 02/25/98 1,000 1,000 New York State Power Authority Tax-Exempt Commercial Paper Notes Series 2 / (Multiple Credit Enhancements) 3.70%, 02/10/98 10,000 10,000 ---------- 11,000 ---------- NORTH CAROLINA--1.8% North Carolina Eastern Municipal Power Agency Power System Revenue Bonds / (Multiple Credit Enhancements) 3.75%, 02/10/98 45,435 45,435 3.75%, 02/18/98 15,000 15,000 3.75%, 02/18/98 2,000 2,000 3.70%, 02/19/98 4,200 4,200 3.80%, 02/25/98 2,075 2,075 North Carolina Eastern Municipal Power Agency Tax-Exempt Commercial Paper Notes / (Canadian Imperial Bank of Commerce LOC) 3.70%, 02/18/98 32,500 32,500 ---------- 101,210 ---------- TEXAS--1.5% Lower Colorado River Authority Tax-Exempt Commercial Paper Notes Series D / (Morgan Guaranty Trust Co--New York SBPA LOC) 3.75%, 02/02/98 8,000 8,000 3.75%, 02/02/98 7,000 7,000 Par Value ------- ---------- Texas Municipal Power Agency / (Multiple Credit Enhancements) 3.75%, 02/27/98 $27,675 $ 27,675 3.70%, 02/27/98 30,000 30,000 Texas State Tax and Revenue Anticipation Commercial Paper Notes Series 1997B 3.75%, 01/15/98 3,300 3,300 3.75%, 03/06/98 10,000 10,000 ---------- 85,975 ---------- WYOMING--0.1% Lincoln County, Wyoming Pollution Control Revenue Refunding Bonds (Pacificorp Project) / (Union Bank of Switzerland LOC) 3.80%, 02/25/98 3,400 3,400 ---------- TOTAL TAX-EXEMPT COMMERCIAL PAPER (Cost $522,645) 522,645 ---------- MANDATORY PUT BONDS--6.9%(b) COLORADO--0.1% Douglas County, Colorado Multi-Family Housing Revenue Bonds (Parker Hilltop Apartments Project) Series 1997 / (FGIC Capital Markets LOC) 4.00%, 09/01/98 8,015 8,015 ---------- FLORIDA--0.1% Orange County, Florida Industrial Development Authority Revenue Bonds (General Accident Insurance Co. of America Project) 3.80%, 06/01/98 3,500 3,500 Pinnellas County, Florida Housing Finance Authority Single Family Revenue Bonds (Multi-Residence/ Multi-County Project) Series 1997B / (Deutsche Bank LOC) 3.80%, 02/01/98 2,835 2,835 ---------- 6,335 ----------
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Par Value ------- ---------- GEORGIA--0.2% Fulton County, Georgia Housing Authority Single & Multi-Family Housing Revenue Bonds Series 1996B / (GNMA LOC) 3.85%, 03/01/98 $ 9,000 $ 9,005 ---------- HAWAII--0.1% Hawaii State Housing Finance & Development Corp. Multi-Family Housing Revenue Bonds (Nani Mauna Loa Project) Series 1995A / (Citibank LOC) 4.00%, 01/02/98 3,900 3,900 ---------- ILLINOIS--0.1% Illinois Development Financing Authority Revenue Bonds 3.85%, 03/01/98 6,800 6,800 ---------- NEW JERSEY--0.1% New Jersey Economic Development Authority Revenue Bonds (Newark Recycling Center Project) 3.95%, 12/15/98 7,500 7,500 ---------- NEW MEXICO--0.0% Sandoval County, New Mexico Multi-Family Housing Revenue Bonds (Meadowlank Apartment Project) Series 1997A / (FGIC Capital Markets Services LOC) 3.90%, 08/01/98 1,500 1,500 ---------- OHIO--0.7% Ohio Housing Finance Authority Residential Mortgage Revenue Bonds Series A-2 / (AIG Matched Funding Corp. LOC) 3.65%, 03/02/98 40,000 40,000 ---------- Par Value ------- ---------- OREGON--0.1% Oregon State Veteran Affairs General Obligation Bonds 4.04%, 02/02/98 $ 4,000 $ 4,000 ---------- PENNSYLVANIA--0.1% Philadelphia Water & Waste Water Revenue Bonds Series 1997B 3.82%, 08/05/98 4,000 4,000 ---------- RHODE ISLAND--0.3% Rhode Island Student Loan Authority Revenue Put Bonds Series 1996-1 / (National Westminster Bank PLC LOC) 3.95%, 06/01/98 19,000 19,000 ---------- TENNESSEE--0.9% Metropolitan Nashville & Davidson County, Tennessee Industrial Development Board Revenue Bonds (General Accident Insurance) Series 1986 3.95%, 05/01/98 5,700 5,700 Tennessee Housing Development Agency Home Ownership Program Series 1997-1 (Escrowed to Maturity with Government Securities) 3.75%, 02/19/98 12,385 12,385 Tennessee Housing Development Agency Home Ownership Program Series 1997-2 3.99%, 06/04/98 28,500 28,501 ---------- 46,586 ---------- TEXAS--2.7% Greater East Texas Higher Education Authority Student Loan Revenue Bonds Series 1992A / (SLMA LOC) 3.90%, 09/01/98 32,500 32,500 Greater East Texas Higher Education Authority Student Loan Revenue Bonds Series 1992B / (SLMA LOC) 4.00%, 07/01/98 14,000 14,000
- -------------------------------------------------------------------------------- 55 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Greater East Texas Higher Education Authority Student Loan Revenue Bonds Series 1993A / (SLMA LOC) 4.10%, 05/01/98 $48,150 $ 48,150 Greater East Texas Higher Education Authority Student Loan Revenue Bonds Series 1993B / (SLMA LOC) 4.10%, 05/01/98 40,000 40,000 Greater East Texas Higher Education Authority Student Loan Revenue Bonds Series 1993B-2 / (SLMA LOC) 4.05%, 06/01/98 6,500 6,500 Greater East Texas Higher Education Authority Student Loan Revenue Bonds Series 1996A / (SLMA LOC) 3.57%, 03/01/98 7,000 7,000 ---------- 148,150 ---------- VIRGINIA--0.5% Virginia State Housing Development Authority Commonwealth Mortgage Bonds Series B Subseries B 3.88%, 06/10/98 29,700 29,700 ---------- WASHINGTON--0.2% Washington State Housing Finance Commission Alternative Minimum Tax Bonds (Single Family Program) Series 1991A-S / (FGIC Insurance) 3.94%, 04/01/98 3,655 3,655 Washington State Housing Finance Committee Variable Rate Single Family Program Series 5A-S / (Bayerische Landesbank Girozentrale LOC) 3.90%, 12/15/98 7,800 7,800 ---------- 11,455 ---------- Par Value ------- ---------- WISCONSIN--0.7% Wisconsin Housing & Economic Development Authority Home Ownership Alternative Minimum Tax Home Ownership Revenue Bonds Series 1996G / (Bayerische Landesbank Girozentrale LOC) 4.05%, 06/01/98 $41,000 $ 41,013 ---------- TOTAL MANDATORY PUT BONDS (Cost $386,959) 386,959 ---------- TAX AND REVENUE ANTICIPATION NOTES--6.1%(B) CALIFORNIA--1.8% Alameda County, California Tax & Revenue Anticipation Notes 3.90%, 07/22/98 25,000 25,080 California School Cash Reserve Program Authority Pooled Tax & Revenue Anticipation Notes / (AMBAC Insurance) 3.85%, 07/02/98 38,285 38,449 3.80%, 07/02/98 12,000 12,052 3.74%, 07/02/98 4,090 4,109 San Bernardino County, California Tax & Revenue Anticipation Notes 3.85%, 06/30/98 20,000 20,062 ---------- 99,752 ---------- DISTRICT OF COLUMBIA--0.5% District of Columbia Tax and Revenue Anticipation Notes Series B / (Multiple Credit Enhancements) 3.87%, 09/30/98 30,000 30,135 ----------
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Par Value ------- ---------- IOWA--0.8% Iowa State School Cash Anticipation Program (Iowa Corp. Waste Certificates) Series 1997A / (FSA Insurance) 3.80%, 06/26/98 $37,000 $ 37,120 3.75%, 06/26/98 7,000 7,024 ---------- 44,144 ---------- NEW MEXICO--2.0% New Mexico State Tax and Revenue Anticipation Notes Series 1997A 3.84%, 06/30/98 115,000 115,368 ---------- PUERTO RICO--1.0% Puerto Rico Commonwealth Tax & Revenue Anticipation Notes Series 1 3.75%, 07/30/98 53,355 53,580 ---------- TOTAL TAX AND REVENUE ANTICIPATION NOTES (Cost $342,979) 342,979 ---------- REVENUE BONDS--2.8%(B) DELAWARE--0.1% Delaware Transportation Authority System Revenue Bonds / (AMBAC Insurance) 3.85%, 07/01/98 3,645 3,656 ---------- FLORIDA--0.0% Village Center Community Development District Florida Recreational Revenue Refunding Bonds Series 1998A / (MBIA Insurance) 3.75%, 11/01/98 1,910 1,914 ---------- Par Value ------- ---------- ILLINOIS--0.2% Illinois Development Finance Authority Revenue Refunding Bonds (Environmental WMX, Inc.) / (MBIA Insurance) 3.85%, 02/01/98 $ 8,500 $ 8,505 ---------- IOWA--0.0% Iowa Finance Authority Health Care Facilities Revenue Bonds (Genesis Medical Center) / (MBIA Insurance) 3.84%, 07/01/98 375 377 Iowa Finance Authority Health Care Facilities Revenue Refunding Bonds (Nebraska Methodist Health System Project) / (MBIA Insurance) 3.90%, 11/01/98 510 512 ---------- 889 ---------- LOUISIANA--0.0% Baton Rouge, Louisiana Sales and Use Tax Public Improvement Revenue Bonds / (FGIC Insurance) 3.85%, 08/01/98 1,370 1,402 ---------- MARYLAND--0.1% Maryland State Community Development Administration Department of Housing and Community Development Revenue Bonds 3.84%, 04/01/98 2,740 2,740 ---------- MICHIGAN--0.1% Royal Oak, Michigan Hospital Finance Authority Hospital Revenue Bonds (William Beaumont Hospital Project) Series C / (Escrowed to Maturity with Government Securities) 3.82%, 01/01/99 3,000 3,161 3.82%, 01/01/99 2,500 2,631 ---------- 5,792 ----------
- -------------------------------------------------------------------------------- 57 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- NEBRASKA--0.0% Nebraska Investment Finance Authority Health Care Facilities Revenue Refunding Bonds (Nebraska Methodist Health System Project) / (MBIA Insurance) 3.91%, 11/01/98 $ 1,475 $ 1,479 ---------- NEW HAMPSHIRE--0.0% New Hampshire Municipal Bond Bank Revenue Bonds Series 1995A / (AMBAC Insurance) 3.80%, 08/15/98 2,500 2,522 ---------- NEW JERSEY--0.3% New Jersey Health Care Facilities Financing Authority Refunding Revenue Bonds (Atlantic City Medical Center) Series B / (Escrowed to Maturity with Government Securities) 4.01%, 02/01/98 17,325 17,638 New Jersey Transportation Fund Transportation System Revenue Bonds Series A / (Escrowed to Maturity with Government Securities) 2.88%, 06/15/98 1,000 1,008 ---------- 18,646 ---------- NEW MEXICO--0.5% New Mexico State Severance Tax Revenue Bonds Series 1996A 3.80%, 07/01/98 4,800 4,836 New Mexico State Severance Tax Revenue Refunding Bonds Series 1997A 3.90%, 07/01/98 22,178 22,241 ---------- 27,077 ---------- Par Value ------- ---------- NORTH CAROLINA--0.1% North Carolina Municipal Power Agency #1 Catawba Electric Revenue Refunding Bonds / (FGIC Insurance) 3.85%, 01/01/99 $ 2,885 $ 2,920 ---------- OREGON--0.3% Oregon State Housing and Community Services Department Mortgage Revenue Bonds (Single Family Mortgage Program) Series 1997K 3.88%, 12/03/98 18,950 18,950 ---------- PENNSYLVANIA--0.3% Allegheny County, Pennsylvania Airport Revenue Refunding Bonds (Pittsburgh International Airport Project) Series 1997A / (MBIA Insurance) 3.81%, 01/01/99 5,200 5,259 Pennsylvania Housing Financing Authority Single Family Mortgage Revenue Bonds Series 49 4.00%, 10/01/98 300 301 Pennsylvania State Higher Education Facilities Authority Revenue Bonds (Allegheny General Hospital Project) Series A 4.00%, 09/01/98 1,000 1,015 Pennsylvania State Industrial Development Authority Revenue Bonds (Economic Development Project) / (AMBAC Insurance) 3.79%, 07/01/98 1,230 1,234 3.82%, 01/01/99 3,000 3,063 Pennsylvania Turnpike Revenue Bonds Series O / (FGIC Insurance) 3.78%, 12/01/98 2,000 2,017 Philadelphia Water & Sewer Refunding Revenue Bonds / (MBIA Insurance) 3.83%, 10/01/98 1,000 1,022
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Par Value ------- ---------- Philadelphia, Pennsylvania Airport Revenue Refunding Bonds (Philadelphia Airport System Project) Series 1997A / (FGIC Insurance) 3.77%, 06/15/98 $ 4,000 $ 4,022 Pittsburgh and Allegheny County, Pennsylvania Revenue Refunding Bonds series 1991A / (AMBAC Insurance) 3.80%, 07/15/98 500 505 ---------- 18,438 ---------- SOUTH CAROLINA--0.1% Piedmont South Carolina Municipal Power Agency Electric Revenue Bonds Series 1985B / (FGIC Insurance) 3.80%, 01/01/99 2,570 2,620 ---------- SOUTH DAKOTA--0.3% South Dakota Housing Development Authority Homeowners Mortgage Bonds Series 1997C 3.85%, 03/26/98 9,180 9,180 South Dakota Housing Development Authority Homeownership Mortgage Bonds Series 1997D / (Escrowed to Maturity with Government Securities) 3.85%, 03/26/98 5,815 5,815 ---------- 14,995 ---------- TEXAS--0.0% Houston Housing Financial Corp. Single Family Mortgage Revenue Refunding Bonds Series 1993A / (FSA LOC) 3.33%, 06/01/98 1,140 1,143 ---------- Par Value ------- ---------- VIRGINIA--0.0% Virginia College Building Authority Educational Facilities Revenue Bonds (Equipment Leasing Program) Series 1995 3.80%, 08/01/98 $ 2,000 $ 2,014 ---------- WASHINGTON--0.5% Grays Harbor County, Washington Public Utility #001 Electric Revenue Refunding Bonds / (AMBAC Insurance) 3.83%, 01/01/99 1,030 1,037 Washington Public Power Supply System Revenue Refunding Bonds (Nuclear Project #2) Series 1997A 3.90%, 07/01/98 14,005 14,045 Washington Public Power Supply System Revenue Refunding Bonds (Nuclear Project #2) Series B 3.90%, 07/01/98 2,275 2,282 Washington State Public Power Supply System Revenue Refunding Bonds (Nuclear Project #2) Series A 4.00%, 07/01/98 3,000 3,009 ---------- 20,373 ---------- TOTAL REVENUE BONDS (Cost $156,075) 156,075 ---------- BOND ANTICIPATION NOTES--2.3%(b) IOWA--0.0% Coralville, Iowa Bond Anticipation Notes Series 1997D 4.05%, 05/01/98 1,700 1,702 ---------- NEW JERSEY--1.7% Atlantic City, New Jersey Bond Anticipation Notes 3.89%, 08/27/98 11,350 11,376 Bordentown County, New Jersey Bond Anticipation Notes 3.75%, 01/15/98 2,645 2,646
- -------------------------------------------------------------------------------- 59 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Bridgeton, New Jersey Bond Anticipation Notes 3.90%, 09/11/98 $ 2,234 $ 2,239 Delanco Township, New Jersey Bond Anticipation Notes 3.90%, 12/09/98 900 901 East Brunswick Township, New Jersey General Obligation Bond Anticipation Notes 3.90%, 04/15/98 13,735 13,753 Fairfield Township, New Jersey Bond Anticipation Notes 3.65%, 03/24/98 2,700 2,702 Lacey Township, New Jersey Bond Anticipation Notes 3.80%, 04/30/98 570 571 Monroe Township, New Jersey Middlesex County Bonds Anticipation Notes Series 1997-1998 4.00%, 07/30/98 2,220 2,225 North Bergen Township, New Jersey Board of Education Promissory Notes Series 1997-1998 3.75%, 03/13/98 2,410 2,411 Princeton, New Jersey Borough Bonds Anticipation Notes 3.75%, 08/07/98 4,082 4,094 Rahway Township, New Jersey Bond Anticipation Notes 3.80%, 12/23/98 3,195 3,208 Roxbury Township, New Jersey Bond Anticipation Notes Series 1997-1998 3.65%, 02/13/98 13,984 13,990 South Orange Village Township, New Jersey Bond Anticipation Notes 3.83%, 05/01/98 4,892 4,894 Stafford Township, New Jersey Bond Anticipation Notes 3.80%, 05/15/98 2,100 2,102 Trenton, New Jersey Bond Anticipation Notes 3.85%, 03/11/98 12,270 12,278 Par Value ------- ---------- Vernon Township, New Jersey School District Bond Anticipation Notes 3.85%, 12/04/98 $ 5,000 $ 5,018 Vineland, New Jersey Bonds Anticipation Notes Series 1997-1998 3.82%, 08/14/98 3,955 3,965 West Deptford Township, New Jersey Bond Anticipation Notes 3.80%, 06/23/98 2,000 2,002 ---------- 90,375 ---------- OHIO--0.1% Ottawa Hills, Ohio Local School District Bonds Anticipation Notes 3.80%, 08/05/98 5,000 5,013 ---------- WISCONSIN--0.5% Lake Geneva, Wisconsin Joint School District #01 Bond Anticipation Notes 3.87%, 10/30/98 10,000 10,010 Lake Geneve Genoa City, Wisconsin Unified High School District Bond Anticipation Notes 3.87%, 10/30/98 10,000 10,011 Manitowoc, Wisconsin Public School District Bond Anticipation Notes 3.89%, 10/01/98 10,000 10,008 ---------- 30,029 ---------- TOTAL BOND ANTICIPATION NOTES (Cost $127,119) 127,119 ---------- VARIABLE RATE TENDER OPTION BONDS--2.2%(a)(c) FLORIDA--0.3% Florida State General Obligation Tender Option Bond Partnership (BTP-247) / (Bankers Trust Tender Option) 4.28%, 01/09/98 9,885 9,885
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Par Value ------- ---------- Florida State General Obligation Tender Option Bond Partnership (BTP-248) / (Bankers Trust Tender Option) 4.25%, 01/09/98 $ 9,300 $ 9,300 ---------- 19,185 ---------- HAWAII--0.4% Hawaii State Housing Finance & Development Corp.Tender Option Bond Partnership / (Bank of America LOC) 4.25%, 01/09/98 24,995 24,995 ---------- ILLINOIS--0.2% Chicago, Illinois Metropolitan Water Reclamation District Greater Chicago General Obligation Tender Option Bond Partnership (Cook County) (BTP-71) / (Automatic Data Processing, Inc. Tender Option) 4.35%, 01/09/98 9,870 9,870 ---------- MINNESOTA--0.1% Minnesota State Various Purpose General Obligation Sports Health Club Tax Tender Option Bond Partnership (BTP-65) / (Automatic Data Processing, Inc. Tender Option & Escrowed to Maturity with Government Securities) 4.10%, 01/09/98 4,455 4,455 ---------- MISSISSIPPI--0.2% Mississippi Home Corp. Single Family Variable Rate Certificates Series 1997G / (Bank of America LOC) 4.25%, 01/09/98 12,495 12,495 ---------- Par Value ------- ---------- NEW YORK--0.6% New York City, New York General Obligation Tender Option Bonds Partnership (Corestates Merlot Program) Series 1997C / (Corestates Bank N.A. & MBIA Insurance) 4.20%, 01/09/98 $28,825 $ 28,825 ---------- PENNSYLVANIA--0.2% Philadelphia, Pennsylvania Water and Waste Water Revenue Tender Option Partnership Series 1993 (PT-151) / (Capital Guaranty Insurance Co. & Bayerische Hypotheken LOC) 4.25%, 01/09/98 9,670 9,670 Southeast Pennsylvania Transportation Authority Special Revenue Tender Option Bond Partnership (PA-314) / (FGIC Insurance & Merrill Lynch Capital Services LOC) 4.25%, 01/09/98 2,700 2,700 ---------- 12,370 ---------- WASHINGTON--0.1% King County, Washington Unlimited Tax General Obligation Tender Option Bond Partnership Series 1993C (BTP-56) / (Automatic Data Processing, Inc. Tender Option) 4.17%, 01/09/98 6,365 6,365 ---------- WISCONSIN--0.1% Wisconsin State Public Improvement General Obligation Tender Option Bond Partnership (BTP-62) / (Automatic Data Processing, Inc. Tender Option & Escrowed to Maturity with Government Securities) 4.09%, 01/09/98 4,500 4,500 ----------
- -------------------------------------------------------------------------------- 61 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- TOTAL VARIABLE RATE TENDER OPTION BONDS (Cost $123,060) $ 123,060 ---------- OPTIONAL PUT BONDS--1.8%(B) CALIFORNIA--0.2% California Higher Education Loan Authority Student Loan Revenue Bonds Series 1995E-5 / (SLMA LOC) 3.95%, 06/01/98 $10,000 10,000 ---------- MISSOURI--0.7% Missouri State Environmental Improvement & Energy Resources Authority Pollution Control Revenue Bonds (Union Electric Co.) Series 1985A / (Swiss Bank LOC) 3.95%, 06/01/98 41,890 41,890 ---------- NEW HAMPSHIRE--0.1% New Hampshire Higher Education & Health Facilities Authority Revenue Bonds (Dartmouth College) Series 1985A-G 3.95%, 06/01/98 5,000 5,000 ---------- TEXAS--0.8% Grapevine, Texas Industrial Development Corp. Airport Revenue Bonds (Singer County Project) / (Bank of Montreal LOC) 3.90%, 04/01/98 18,975 18,975 Greater East Texas Higher Education Authority Student Loan Revenue Bonds Series 1992B / (SLMA LOC) 3.95%, 09/01/98 6,000 6,000 Greater East Texas Higher Education Authority Student Loan Revenue Bonds Series 1993B 3.90%, 02/01/98 11,000 11,000 Par Value ------- ---------- Greater East Texas Higher Education Authority Student Loan Revenue Bonds Series 1995B / (SLMA LOC) 4.00%, 07/01/98 $10,000 $ 10,000 ---------- 45,975 ---------- TOTAL OPTIONAL PUT BONDS (Cost $102,865) 102,865 ---------- FIXED RATE TENDER OPTION BONDS--1.3%(b)(e) CONNECTICUT--0.1% Connecticut State General Obligation General Purpose Tender Option Bond Partnership Series 1991A (BTP-151) / (Bankers Trust Tender Option) 3.70%, 01/14/98 7,365 7,365 ---------- GEORGIA--0.3% Georgia State Public Improvement General Obligation Tender Option Bond Partnership Series 1993B & 1993C (BTP-135) / (Bankers Trust Tender Option) 3.75%, 01/14/98 3,865 3,865 Georgia State Public Improvement General Obligation Tender Option Bond Partnership Series 1993B & 1993C (BTP-140) / (Bankers Trust Tender Option) 3.75%, 01/14/98 4,575 4,575 Georgia State Public Improvement General Obligation Tender Option Bond Partnership Series 1994B (BTP-148) / (Bankers Trust Tender Option & Escrowed to Maturity with Government Securities) 3.75%, 01/14/98 7,100 7,100 ---------- 15,540 ----------
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Par Value ------- ---------- SOUTH CAROLINA--0.1% South Carolina State Capital Improvement Revenue Refunding Tender Option Bond Partnership Series 1992B (BTP-147) / (Bankers Trust Tender Option) 3.75%, 01/14/98 $ 5,370 $ 5,370 ---------- TEXAS--0.7% Regents of the University of Texas Permanent University Fund Revenue Tender Option Bond Partnership Series 1992A (BTP-143) / (Escrowed to Maturity with Government Securities, Permanent University Fund Guaranty & Bankers Trust Tender Option) 3.75%, 01/14/98 10,685 10,685 Texas State Public Finance Authority General Obligation Tender Option Bond Partnership Series 1994A (BTP-127) / (Bankers Trust Tender Option) 3.75%, 01/14/98 14,980 14,980 Texas State Public Financing Authority General Obligation Tender Option Bond Partnership Series 1993B (BTP-116) / (Bankers Trust Tender Option) 3.75%, 01/14/98 10,170 10,170 ---------- 35,835 ---------- WASHINGTON--0.1% Washington State Public Power Supply System Nuclear Project #2 Revenue Refunding Tender Option Bond Partnership Series 1993B (BTP-137) / (Bankers Trust Tender Option) 3.75%, 01/14/98 6,685 6,685 ---------- TOTAL FIXED RATE TENDER OPTION BONDS (Cost $70,795) 70,795 ---------- Par Value ------- ---------- REVENUE ANTICIPATION NOTES--1.2%(B) CALIFORNIA--0.2% California State Revenue Anticipation Notes Series 1997 - 1998 3.63%, 06/30/98 $ 400 $ 402 3.62%, 06/30/98 10,000 10,040 ---------- 10,442 ---------- MASSACHUSETTS--0.3% Massachusetts Bay Transit Authority Revenue Anticipation Notes Series 1997A 3.82%, 02/27/98 14,000 14,007 3.75%, 02/27/98 4,700 4,703 ---------- 18,710 ---------- NEW YORK--0.7% New York City, New York Revenue Anticipation Notes / (Multiple Credit Enhancements) 3.73%, 06/30/98 19,500 19,571 3.60%, 06/30/98 20,000 20,083 ---------- 39,654 ---------- TOTAL REVENUE ANTICIPATION NOTES (Cost $68,806) 68,806 ---------- TAX ANTICIPATION NOTES--0.8%(B) NEW JERSEY--0.4% Fort Lee, New Jersey Tax Anticipation Notes 3.90%, 02/02/98 6,500 6,502 Trenton, New Jersey School District Notes 3.90%, 10/01/98 3,149 3,157 Trenton, New Jersey Tax Anticipation Notes 3.90%, 10/01/98 15,700 15,739 ---------- 25,398 ----------
- -------------------------------------------------------------------------------- 63 SCHWAB MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- NEW YORK--0.4% Suffolk County, New York Tax Anticipation Notes Series 1998I / (Multiple Credit Enhancements)(d) 3.64%, 08/13/98 $20,000 $ 20,074 ---------- TOTAL TAX ANTICIPATION NOTES (Cost $45,472) 45,472 ---------- GENERAL OBLIGATION BONDS--0.7%(B) ARIZONA--0.1% Maricopa County, Arizona School District 210 General Obligation Bonds Series 1995B 3.85%, 07/01/98 3,500 3,570 ---------- CONNECTICUT--0.0% Connecticut State General Obligation Bonds 3.78%, 12/15/98 1,500 1,517 ---------- GEORGIA--0.0% Fulton County, Georgia Revenue Refunding Bonds 3.83%, 01/01/99 2,160 2,170 ---------- ILLINOIS--0.1% Bolingbrook Park District, Illinois General Obligation Bonds / (MBIA Insurance) 3.80%, 01/01/99 1,650 1,653 Chicago Park, Illinois District General Obligation Refunding Bonds / (FGIC Insurance) 3.83%, 01/01/99 2,000 2,032 Chicago. Illinois General Obligation Bonds Series 1995B / (FGIC Insurance) 3.90%, 01/01/98 1,595 1,595 ---------- 5,280 ---------- Par Value ------- ---------- MARYLAND--0.0% Anne Arundel County, Maryland General Obligation Bonds 3.55%, 09/01/98 $ 2,110 $ 2,123 MASSACHUSETTS--0.0% Massachusetts General Obligation Bonds / (FGIC Insurance) 3.75%, 06/01/98 1,000 1,005 ---------- NEVADA--0.0% Clark County, Nevada General Obligation Bonds / (FGIC Insurance) 3.90%, 06/01/98 2,460 2,481 ---------- NEW JERSEY--0.1% Hamilton Township, New Jersey General Obligation Bonds / (MBIA Insurance) 3.75%, 08/01/98 1,500 1,507 ---------- New Jersey General Obligation Bonds 3.90%, 01/15/99 1,000 1,025 ---------- New Jersey Unlimited General Obligation Bonds 3.82%, 01/01/99 1,000 1,012 ---------- 3,544 ---------- NEW MEXICO--0.1% Albuquerque, New Mexico General Obligation Bonds Series 1992B(d) 3.65%, 07/01/98 4,000 4,020 ---------- OKLAHOMA--0.0% Tulsa, Oklahoma General Obligation Refunding Bonds Series 1992B 3.70%, 12/01/98 2,390 2,434 ---------- PENNSYLVANIA--0.2% Allegheny County, Georgia Unlimited General Obligation Bonds Series C-43 / (MBIA Insurance) 3.74%, 09/15/98 600 604
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Par Value ------- ---------- Philadelphia, Pennsylvania School District Refunding General Obligation Bonds Series 1993A / (MBIA Insurance) 3.82%, 07/01/98 $ 5,000 $ 5,016 ---------- 5,620 ---------- TENNESSEE--0.0% Shelby County, Tennessee General Obligation Revenue Refunding Bonds Series A 4.00%, 08/01/98 655 660 ---------- TEXAS--0.1% Texas State General Obligation Bonds 3.77%, 10/01/98 3,000 3,092 Travis County, Texas Limited Tax Certificate of Obligation Bonds 3.63%, 03/01/98 1,300 1,303 ---------- 4,395 ---------- Par Value ------- ---------- WASHINGTON--0.0% Thurston County, Washington General Obligation Refunding Bonds / (MBIA Insurance) 3.70%, 08/01/98 $ 2,260 $ 2,273 ---------- TOTAL GENERAL OBLIGATION BONDS (Cost $41,092) 41,092 ---------- CERTIFICATES OF PARTICIPATION--0.0%(b) GEORGIA--0.0% Atlanta, Georgia Certificates of Participation (Atlanta Pretrial Detention Center Project) / (MBIA Insurance) 3.70%, 12/01/98 1,630 1,649 ---------- TOTAL CERTIFICATES OF PARTICIPATION (Cost $1,649) 1,649 ---------- TOTAL INVESTMENTS--100% (Cost $5,618,618) $5,618,618 ---------- ----------
SEE ACCOMPANYING NOTES TO SCHEDULE OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 65 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- VARIABLE RATE OBLIGATIONS--59.4%(a) ABAG Financing Authority for Non-Profit Organization Certificates of Participation (Bentley School) / (Banque Nationale de Paris LOC) 3.85%, 01/07/98 $ 4,000 $ 4,000 ABAG Financing Authority for Non-Profit Organization Certificates of Participation (Lucile Salter Packard Project) / (AMBAC Insurance & Bayerische Landesbank SBPA) 3.35%, 01/07/98 6,050 6,050 ABAG Financing Authority Variable Rate Multi Family Housing Revenue Bonds (Mountain View Apartments) Series 1997A / (Comerica Bank LOC) 4.10%, 01/07/98 1,750 1,750 Alameda County, California Industrial Development Authority Industrial Revenue Bonds (Aitchison Family Project) Series 1993A / (Wells Fargo Bank LOC) 3.70%, 01/07/98 2,840 2,840 Alameda County, California Industrial Development Authority Industrial Revenue Bonds (Scientific Technology Project) Series 1994A / (Banque Nationale de Paris LOC) 3.70%, 01/07/98 3,000 3,000 Alameda-Contra Costa, California School Financial Authority Certificates of Participation Capital Improvement Finance Project / (Canadian Imperial Bank of Commerce LOC) 3.90%, 01/07/98 850 850 Anaheim, California Certificates of Participation (Anaheim Memorial Hospital Assoc. Project) / (AMBAC Insurance & ABN-Amro SPA) 3.35%, 01/07/98 1,070 1,070 Anaheim, California Certificates of Participation (Police Facility Financing Project) / (AMBAC Insurance & Industrial Bank of Japan SPA) 3.35%, 01/07/98 750 750 Par Value ------- ---------- Anaheim, California Housing Authority Multi-Family Housing Revenue Bonds (Casa Grande Apartments) Series 1997A / (FNMA LOC) 4.15%, 01/07/98 $ 3,795 $ 3,795 Anaheim, California Housing Authority Multi-Family Housing Revenue Bonds (Heritage Village Apartments Project) Series 1992A / (Multiple Credit Enhancements) 3.80%, 01/07/98 3,385 3,385 Anaheim, California Housing Authority Multi-Family Housing Revenue Bonds (Port Trinidad Apartments) Series 1997C / (FNMA LOC) 4.15%, 01/07/98 2,140 2,140 Auburn, California Unified School District Certificates of Participation 3.85%, 01/07/98 10,750 10,750 Big Bear Lake, California Industrial Development Revenue Certificates of Participation (Southwest Gas Corp. Project) Series A / (Union Bank of Switzerland LOC) 3.40%, 01/07/98 27,800 27,800 California Alternative Energy Source Financing Authority GE Capital Corp. Arroyo Series 1993B 3.40%, 01/07/98 4,860 4,860 California Department of Water Resources / (Corestates Bank N.A. LOC) 4.10%, 06/01/98 21,915 21,915 California Economic Development Financing Authority Industrial Development Revenue Bonds (Calco Project) / (Wells Fargo Bank LOC) 4.10%, 01/07/98 1,100 1,100 California Health Facilities Financing Authority Catholic Health Care / (Multiple Credit Enhancements) 3.35%, 01/07/98 20,700 20,700
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Par Value ------- ---------- California Health Facilities Financing Authority Revenue Bonds (Adventist Health System--Sutter Health) Series 1991A / (Toronto-Dominion Bank LOC) 3.80%, 01/07/98 $ 9,800 $ 9,800 California Health Facilities Financing Authority Revenue Bonds (Catholic Health Care) Series 1995C / (MBIA Insurance & Rabobank Nederland N.V. SPA) 3.90%, 01/07/98 16,500 16,500 California Health Facilities Financing Authority Revenue Bonds (Catholic Health Care) Series 1996B / (MBIA Insurance & Rabobank Nederland N.V. SBPA) 3.90%, 01/07/98 12,500 12,500 California Health Facilities Financing Authority Revenue Bonds (Catholic Health Care) Series 1996D / (MBIA Insurance & Rabobank Nederland N.V. SBPA LOC) 3.90%, 01/07/98 2,400 2,400 California Health Facilities Financing Authority Revenue Bonds (Catholic Healthcare) Series 1988B / (MBIA Insurance & Morgan Guaranty Trust Co.--New York SBPA) 3.90%, 01/07/98 8,900 8,900 California Health Facilities Financing Authority Revenue Bonds (Children's Hospital Project) Series 1991 / (MBIA Insurance & Swiss Bank SBPA) 3.85%, 01/07/98 6,400 6,400 California Health Facilities Financing Authority Revenue Bonds (Kaiser Permanente Medical Center) Series 1993A 3.45%, 01/07/98 8,200 8,200 California Health Facilities Financing Authority Revenue Bonds (Kaiser Permanente Medical Center) Series 1993B 3.45%, 01/07/98 1,600 1,600 Par Value ------- ---------- California Health Facilities Financing Authority Revenue Bonds (Scripps Memorial Hospital) Series 1985B / (MBIA Insurance & Morgan Guaranty Trust Co.--New York SBPA) 3.80%, 01/07/98 $15,120 $ 15,120 California Health Facilities Financing Authority Revenue Bonds (Scripps Memorial Hospital) Series 1991A / (MBIA Insurance & Morgan Guaranty Trust Co.--New York SBPA) 3.80%, 01/07/98 11,180 11,180 California Health Facilities Financing Authority Revenue Bonds (St. Francis Hospital) Series 1995E / (MBIA Insurance & Rabobank Nederland N.V. SBPA) 3.90%, 01/07/98 4,800 4,800 California Health Facilities Financing Authority Revenue Bonds (St. Francis Hospital) Series 1995F / (MBIA Insurance & Rabobank Nederland N.V. SBPA) 3.90%, 01/07/98 30,000 30,000 California Housing Finance Authority Revenue Bonds (Multi-Family Housing III) Series 1997B / (Multiple Credit Enhancements) 3.65%, 01/07/98 14,600 14,600 California Pollution Control Finance Authority Solid Waste Disposal / (Union Bank of California LOC) 3.50%, 01/07/98 9,520 9,520 California Pollution Control Financing Authority Pollution Control Refunding Revenue Bonds (Pacific Gas & Electric Company) Series 1996C / (Bank of America LOC) 4.90%, 01/01/98 6,200 6,200 California Pollution Control Financing Authority Pollution Control Revenue Bonds (Shell Oil Corporation) Series 1991A 4.90%, 01/01/98 100 100
- -------------------------------------------------------------------------------- 67 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- California Pollution Control Financing Authority Pollution Control Revenue Bonds (Shell Oil Project) Series A 4.90%, 01/01/98 $ 800 $ 800 California Pollution Control Financing Authority Resource Recovery Revenue Bonds (Arco Project) Series 1994A 5.00%, 01/01/98 1,900 1,900 California Pollution Control Financing Authority Resource Recovery Revenue Bonds (OMS Equity of Stanislaus) / (Swiss Bank LOC) 5.05%, 01/01/98 2,945 2,945 California Pollution Control Financing Authority Resource Recovery Revenue Bonds (Sanger Project) Series 1990A / (Credit Suisse LOC) 3.40%, 01/07/98 2,800 2,800 California Pollution Control Financing Authority Revenue Bonds (Green Team of San Jose Project) / (Wells Fargo Bank LOC) 3.50%, 01/07/98 5,000 5,000 California Pollution Control Financing Authority Revenue Bonds (Pacific Gas & Electric Company, Project) / (Swiss Bank LOC) 3.45%, 01/07/98 112,100 112,100 California Pollution Control Financing Authority Revenue Bonds (Pacific Gas & Electric Company, Project) Series 1996B / (Rabobank Nederland N.V. LOC) 3.55%, 01/07/98 110,500 110,500 California Pollution Control Financing Authority Revenue Bonds (Reynolds Metals Co. Project) Series 1985 / (National Westminster Bank PLC LOC) 3.45%, 01/07/98 1,300 1,300 California Pollution Control Financing Authority Revenue Bonds (Southdown, Inc. Project) Series B / (Societe Generale LOC) 3.80%, 01/07/98 3,900 3,900 Par Value ------- ---------- California Pollution Control Financing Authority Revenue Bonds (Southern California Edison) Series 1986A 4.20%, 01/01/98 $ 1,100 $ 1,100 California Pollution Control Financing Authority Revenue Bonds (Southern California Edison) Series 1986B 3.90%, 01/01/98 1,300 1,300 California Pollution Control Financing Authority Revenue Bonds (Southern California Edison) Series 1986C 4.20%, 01/01/98 8,400 8,400 California Pollution Control Financing Authority Revenue Bonds (Southern California Edison) Series 1986D 4.20%, 01/01/98 1,400 1,400 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Athens Disposal Co. Project) Series 1995A / (Wells Fargo Bank LOC) 3.50%, 01/07/98 9,900 9,900 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Burrtec Waste Industries Project) Series 1995A / (Union Bank LOC) 3.50%, 01/07/98 3,010 3,010 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Colmac Energy Project) Series 1990A / (Swiss Bank LOC) 3.40%, 01/07/98 12,900 12,900 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Colmac Energy Project) Series 1990B / (Swiss Bank LOC) 3.40%, 01/07/98 17,915 17,915 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Colmac Energy Project) Series 1990C / (Swiss Bank LOC) 3.40%, 01/07/98 2,490 2,490
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Par Value ------- ---------- California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Contra Costa Services) Series 1995A / (Bank of America LOC) 3.45%, 01/07/98 $ 4,200 $ 4,200 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Edco Disposal Corp. Project) Series 1996A / (Wells Fargo Bank LOC) 3.50%, 01/07/98 9,900 9,900 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Shell Oil Company Martinez) Series 1996B / (Shell Corp. Guaranty) 3.40%, 01/07/98 42,800 42,800 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Shell Oil Company Project) Series 1994B 4.90%, 01/01/98 6,000 6,000 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Solag Disposal Project) Series 1997A / (Wells Fargo Bank LOC) 3.50%, 01/07/98 4,000 4,000 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Talco Plastics) Series 1997A / (Wells Fargo Bank LOC) 4.00%, 01/07/98 4,300 4,300 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Taormina Industries Project) Series 1994B / (Sanwa Bank LOC) 4.00%, 01/07/98 12,000 12,000 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Taormina Industries Project) Series 1996A / (Sanwa Bank LOC) 4.00%, 01/07/98 6,850 6,850 Par Value ------- ---------- California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Various California Waste Recovery) Series 1996A / (Wells Fargo Bank LOC) 3.50%, 01/07/98 $ 1,815 $ 1,815 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (West Valley Project) Series 1997A / (Union Bank of California LOC) 3.50%, 01/07/98 9,500 9,500 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Western Waste Industrial) Series 1994A / (Union Bank of California LOC) 4.30%, 01/07/98 6,000 6,000 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds / (Union Bank of California LOC) 3.50%, 01/07/98 2,150 2,150 California State Economic Development Financial Authority Revenue Bonds (Costa Macoroni Project) / (Wells Fargo Bank LOC) 4.10%, 01/07/98 3,710 3,710 California State Economic Development Financing Authority Industrial Development Revenue Bonds (Gaiser Tool Project) / (Bank of America LOC) 3.70%, 01/07/98 3,385 3,385 California State Economic Development Financing Authority Industrial Development Revenue Bonds (Serra Microchassis Project) 4.90%, 01/01/98 500 500 California State Economic Development Financing Authority Industrial Development Revenue Bonds (Serra Mission Project) Series 1997A / (Dresdner Bank AG LOC) 4.90%, 01/01/98 2,900 2,900
- -------------------------------------------------------------------------------- 69 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- California State Economic Development Financing Authority Revenue Bonds (Boyd Furniture) / (Chase Manhattan LOC) 4.00%, 01/07/98 $ 8,000 $ 8,000 California State Economic Development Financing Authority Revenue Bonds (Bucks Center for Aging Project) / (California State Teachers Retirement & Canadian Imperial Bank of Commerce LOC) 3.35%, 01/07/98 42,500 42,500 California State Economic Development Financing Authority Revenue Bonds (Killion Industry's Project) / (Union Bank of California LOC) 4.00%, 01/07/98 6,500 6,500 California Statewide Communities Development Corp. Industrial Development Revenue Bonds (Drip in Irrigation Co.) / (Bank of America NT & SA LOC) 3.80%, 01/07/98 3,600 3,600 California Statewide Community Development Assoc. Multi-Family Housing Revenue Bonds (Kimberly Woods Project) Series 1995B / (FNMA Collateral Agreement) 3.50%, 01/07/98 11,400 11,400 California Statewide Community Development Authority Apartment Development Revenue Bonds Series 1995A-3 / (FNMA Collateral Agreement) 3.45%, 01/07/98 45,460 45,460 California Statewide Community Development Authority Industrial Development Revenue Bonds Series 1997B (Biocol Investments LP) / (Union Bank LOC) 4.05%, 01/07/98 1,500 1,500 California Statewide Community Development Authority Multi-Family Housing (Plaza Club Apartments) Series 1997A / (Comerica Bank LOC) 3.95%, 01/07/98 8,900 8,900 Par Value ------- ---------- California Statewide Community Development Authority Revenue Bonds Certificates of Participation (Kaiser Foundation Hospitals) 3.45%, 01/07/98 $12,200 $ 12,200 California Statewide Community Development Authority Revenue Refunding Bonds Certificates of Participation (St. Joseph Health System) 3.30%, 01/01/98 18,950 18,950 California Statewide Community Development Authority Series 1995-A7 / (FNMA Collateral Agreement) 4.50%, 01/07/98 2,000 2,000 California Statewide Community Development Corp. Industrial Development Revenue Bonds (13th I Associates Project) / (Union Bank LOC) 4.00%, 01/07/98 5,315 5,315 California Statewide Community Development Corp. Industrial Development Revenue Bonds (Aerostar Properties Project) / (Union Bank of California LOC) 3.85%, 01/07/98 4,645 4,645 California Statewide Community Development Corp. Industrial Development Revenue Bonds (Agricultural Products, Inc. Project) / (Union Bank of California LOC) 4.05%, 01/07/98 1,400 1,400 California Statewide Community Development Corp. Industrial Development Revenue Bonds (Arm Inc. Project) Series 1994A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.05%, 01/07/98 1,050 1,050 California Statewide Community Development Corp. Industrial Development Revenue Bonds (Cowden Metal Stamping) / (Union Bank of California LOC) 4.05%, 01/07/98 2,165 2,165
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Par Value ------- ---------- California Statewide Community Development Corp. Industrial Development Revenue Bonds (D.V. Industries) Series 1994A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.05%, 01/07/98 $ 1,315 $ 1,315 California Statewide Community Development Corp. Industrial Development Revenue Bonds (Flambeau Airmold Project) / (Norwest Bank Minnesota N.A. LOC) 3.80%, 01/07/98 2,850 2,850 California Statewide Community Development Corp. Industrial Development Revenue Bonds (Industrial Dynamics, Co. Project) / (Union Bank of California LOC) 4.05%, 01/07/98 4,650 4,650 California Statewide Community Development Corp. Industrial Development Revenue Bonds (Pacific Handy Cutter Products Project) / (Union Bank of California LOC) 4.05%, 01/07/98 900 900 California Statewide Community Development Corp. Industrial Development Revenue Bonds (Packaging Innovation Project) Series 1994A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.05%, 01/07/98 2,875 2,875 California Statewide Community Development Corp. Industrial Development Revenue Bonds (The Diamond Foods Project) Series 1991 / (Union Bank of California LOC) 4.05%, 01/07/98 1,415 1,415 California Statewide Community Development Corp. Industrial Development Revenue Bonds (Z-Nix Co. Inc. Project) / (Union Bank of California LOC) 4.05%, 01/07/98 760 760 Par Value ------- ---------- California Statewide Community Development Corp. Industrial Development Revenue Bonds / (California State Teachers Retirement System LOC) 3.80%, 01/07/98 $ 1,000 $ 1,000 California Statewide Multi-Family Housing Authority Revenue Bonds (Woodsong Apartments) Series 1997B / (FNMA LOC) 4.15%, 01/07/98 3,427 3,427 California Statewide Multi-Family Housing Authority Variable Security (Sunrise of Moraga) Series 1997G / (Heller Financial Inc. LOC) 4.05%, 01/07/98 2,400 2,400 Carlsbad, California Multi-Family Housing Revenue Refunding Bonds Certificates of Participation (La Costa Apartment Project) Series 1993A / (Bank of America LOC) 3.90%, 01/07/98 11,720 11,720 Concord, California Multi-Family Housing Mortgage Revenue Bonds (Bel Air Apartments Project) Series 1986A / (Bank of America LOC) 3.80%, 01/07/98 3,000 3,000 Concord, California Multi-Family Housing Revenue Bonds (Cal Hill Apartments) Series 1989A / (U.S. Bank of Washington LOC) 3.75%, 01/07/98 2,600 2,600 Contra Costa County, California Multi-Family Housing Mortgage Revenue Bonds (El Cerrito Project) Series A / (Bank of America LOC) 3.80%, 01/07/98 980 980 Duarte, California Redevelopment Agency Certificates of Participation (Johnson Duarte Partners Project) Series 1984B / (Bank of America LOC) 3.90%, 01/07/98 1,600 1,600
- -------------------------------------------------------------------------------- 71 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Duarte, California Redevelopment Agency Certificates of Participation (Piken Duarte Partners Project) Series 1984A / (Bank of America LOC) 3.90%, 01/07/98 $ 4,250 $ 4,250 Eastern California Municipal Water District Water & Sewer Revenue Certificates of Participation Series 1993B / (FGIC Insurance & Industrial Bank of Japan SPA) 3.85%, 01/07/98 15,700 15,700 El Cajon, California Multi-Family Housing Revenue Bonds (Pinewood Apartments) / (FHLB LOC) 4.00%, 01/07/98 1,450 1,450 Encinitas, California Multi-Family Housing Revenue Refunding Bonds (Torrey Pines Project) Series A / (Bank of America LOC) 3.65%, 01/07/98 8,100 8,100 Foothill, California Eastern Transportation Corridor Agency Toll Road Revenue Bonds Series 1995B / (Morgan Guaranty Trust Co.--New York LOC) 3.85%, 01/07/98 7,200 7,200 Foothill, California Eastern Transportation Corridor Agency Toll Road Revenue Bonds Series 1995C / (Credit Suisse LOC) 3.35%, 01/07/98 1,500 1,500 Foothill, California Eastern Transportation Corridor Agency Toll Road Revenue Bonds Series 1995D / (Industrial Bank of Japan LOC) 4.15%, 01/07/98 10,000 10,000 Fremont, California Multi-Family Housing Revenue Refunding Certificates of Participation (Amber Court Apartments Project) Series 1990A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 3.60%, 01/07/98 10,000 10,000 Par Value ------- ---------- Fresno, California Industrial Development Authority Variable Security (Keiser Corporation) / (Comerica Bank LOC) 4.00%, 01/07/98 $ 2,295 $ 2,295 Fresno, California Multi-Family Housing Variable Rate Revenue Refunding Bonds (Heron Pointe Apartments) Series 1996A / (First Interstate Bank of California LOC) 3.65%, 01/07/98 10,300 10,300 Glenn, California Industrial Development Authority Revenue Bonds (Land O' Lakes Project) / (Sanwa Bank LOC) 4.60%, 01/07/98 1,900 1,900 Grand Terrace, California Community Redevelopment Agency Multi-Family Housing Revenue Bonds (Mount Vernon Villas Project) Series 1985A / (Industrial Bank of Japan LOC) 4.20%, 01/07/98 8,485 8,485 Independence City, California Lease Finance Authority Revenue Bonds (Pooled Project) Series 1988 / (National Westminster Bank PLC LOC) 3.40%, 01/07/98 540 540 Indio, California Multi-Family Redevelopment Bonds Refunding Housing Mortgages (Carreon Apartments ) Series 1996A / (Redlands Bank & FHLB LOC) 3.90%, 01/07/98 3,950 3,950 Irvine Ranch Water District Capital Improvement Revenue Bonds Series 1986 / (Toronto-Dominion Bank LOC) 5.00%, 01/01/98 200 200 Irvine Ranch Water District Consolidated Revenue Refunding Bonds (Districts 102, 103, 105 & 106) / (Commerzbank AG LOC) 5.00%, 01/01/98 190 190
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Par Value ------- ---------- Irvine Ranch, California Public Facilities & Infrastructure Authority Lease Revenue Capital Improvement Bonds Series 1987 / (National Westminster Bank PLC LOC) 3.80%, 01/07/98 $ 1,600 $ 1,600 Irvine Ranch, California Water District Consolidated District Numbers 140, 240, 105, 250 / (Bank of America LOC) 5.00%, 01/01/98 1,000 1,000 Irvine Ranch, California Water District Consolidated Revenue Refunding Bonds Series 1993A / (Bank of America LOC) 4.85%, 01/01/98 400 400 Irvine Ranch-Orange County, California Water District General Obligation Bonds (Districts 105, 140, 240, 250) Series 1985B / (Bank of America LOC) 5.00%, 01/01/98 1,500 1,500 Irvine, California Improvement Bond Act 1915 Revenue Bonds (Assessment District) / (Canadian Imperial Bank of Commerce LOC) 3.55%, 01/07/98 2,000 2,000 Irvine, California Improvement Bonds Act 1915 / (Societe Generale LOC) 5.00%, 01/01/98 14,800 14,800 Kern County, California Certificates of Participation (Kern Public Facilities Project) Series 1986C / (Union Bank of Switzerland LOC) 3.35%, 01/07/98 11,200 11,200 Kern County, California Certificates of Participation (Kern Public Facilities Project) Series A / (Union Bank of Switzerland LOC) 3.35%, 01/07/98 5,200 5,200 Lancaster, California Redevelopment Agency Multi-Family Revenue Bonds (Woodcreek Garden Apartments Project) Series 1985J / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.05%, 01/07/98 9,800 9,800 Par Value ------- ---------- Livermore, California Certificates of Participation (Reverse Osmosis Project / (National Westminster Bank PLC LOC) 4.00%, 01/01/98 $ 1,900 $ 1,900 Livermore, California Multi-Family Housing Revenue Refunding Bonds (Arbors Apartment Project) Series 1991A / (Bank of Tokyo- Mitsubishi Ltd. LOC) 4.30%, 01/07/98 9,005 9,005 Livermore, California Multi-Family Housing Revenue Refunding Bonds (Diablo Vista Apartments Project) Series 1990A / (Union Bank LOC) 3.80%, 01/07/98 6,950 6,950 Los Angeles County, California Certificates of Participation Adjustable Convertible Extendable Securities (Los Angeles County Museum of Art Project) Series 1985A / (Bank of America LOC) 3.50%, 01/07/98 3,300 3,300 Los Angeles County, California Certificates of Participation Adjustable Convertible Extendable Securities (Los Angeles County Museum of Art Project) Series 1985B / (Bank of America LOC) 3.50%, 01/07/98 3,500 3,500 Los Angeles County, California Housing Authority Multi-Family Housing Revenue Bonds (Sand Canyon Villas Project) Series 1989A / (Industrial Bank of Japan LOC) 4.50%, 01/07/98 5,800 5,800 Los Angeles County, California Metropolitan Transportation Authority Proposition C Second Senior Sales Tax Revenue Refunding Bonds Series A / (MBIA Insurance & Credit Local De France SBPA) 3.70%, 01/07/98 38,750 38,750
- -------------------------------------------------------------------------------- 73 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Los Angeles County, California Multi-Family Housing Revenue Bonds (Lucas Studios Project) Series 1991D / (Bank of America LOC) 4.10%, 01/07/98 $ 3,000 $ 3,000 Los Angeles County, California Multi-Family Mortgage Revenue Refunding Bonds (Casden Community Complex) Series 1991C / (FHLB LOC) 3.45%, 01/07/98 3,200 3,200 Los Angeles County, California Multi-Family Mortgage Revenue Refunding Bonds (Valencia Village Project) Series 1984C / (Industrial Bank of Japan LOC) 4.50%, 01/07/98 900 900 Los Angeles County, California Pension Revenue Refunding Bonds Series 1996A / (AMBAC Insurance & Natwest Bank N.A. SBPA) 3.35%, 01/07/98 34,000 34,000 Los Angeles County, California Pension Revenue Refunding Bonds Series 1996C / (Bank of Nova Scotia LOC) 3.35%, 01/07/98 1,200 1,200 Los Angeles County, California Transportation Commission Sales Tax Revenue Refunding Bonds Series 1992A / (FGIC Insurance & Bayerische Landesbank SBPA) 3.35%, 01/07/98 12,100 12,100 Los Angeles, California Community Redevelopment Agency Certificates of Participation (Baldwin Hills Public Parking Project) Series B / (Wells Fargo Bank LOC) 3.70%, 01/07/98 27,300 27,300 Los Angeles, California Community Redevelopment Agency Certificates of Participation (Broadway Springs Center Project) Series 1987 / (Bank of America LOC) 3.40%, 01/07/98 10,200 10,200 Par Value ------- ---------- Los Angeles, California Community Redevelopment Community Agency Housing Revenue Bonds / (Barclays Bank PLC LOC) 4.00%, 01/07/98 $26,900 $ 26,900 Los Angeles, California Department Water and Power Electric Plant Revenue Bonds Series 1 / (Multiple Credit Enhancements LOC) 4.10%, 06/19/98 19,995 19,995 Los Angeles, California Multi-Family Housing Revenue Bonds (Beverly Park Apartments) / (Chase Manhattan LOC) 4.00%, 01/07/98 15,100 15,100 Los Angeles, United School District Variable Rate Certificate of Participation (Belmont Learning Complex) Series 1997A / (Commerzbank AG LOC) 3.60%, 01/01/98 22,000 22,000 Madera, California Public Financing Lease Revenue Municipal Golf Course Revenue Refinancing Authority / (Union Bank of California LOC) 4.30%, 01/07/98 1,950 1,950 Metropolitan Water District of Southern California Revenue Refunding Bonds Series 1996A / (ABN-Amro Bank N.V. SBPA) 3.85%, 01/07/98 3,100 3,100 Modesto, California High School District & Modesto City School District Certificates of Participation (Capital Facilities Project) Series 1991 / (Bank of Tokyo-Mitsubishi Ltd. LOC) 3.50%, 01/07/98 4,775 4,775 Moorpark, California Multi-Family Housing Revenue Refunding Bonds (Le Club Apartments Project) Series A / (Citibank LOC) 3.90%, 01/07/98 6,000 6,000
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Par Value ------- ---------- MSR Public Power Agency Subordinate Lien (San Juan Project) Series 1997D / (MBIA Insurance & National Westminster Bank PLC LOC) 3.85%, 01/07/98 $ 1,500 $ 1,500 Northern California Power Agency Public Power Refunding Revenue Bonds (Geothermal Project 3A) / (AMBAC Insurance & Bank of Nova Scotia LOC) 3.35%, 01/07/98 1,450 1,450 Orange County, California Apartment Development Revenue Bonds Series 1985U / (Chase Manhattan LOC) 3.40%, 01/07/98 9,300 9,300 Orange County, California Apartment Development Revenue Bonds Series 1985V / (MetLife Guaranty & Bank of America LOC) 3.95%, 01/07/98 15,150 15,150 Orange County, California Apartment Development Revenue Refunding Bonds (Jess L. Frost Project) Series 1985B / (Wells Fargo Bank LOC) 3.35%, 01/07/98 8,200 8,200 Orange County, California Apartment Development Revenue Refunding Bonds (The Lakes Project #185) Series 1991A / (Citibank LOC) 4.00%, 01/07/98 32,050 32,050 Orange County, California Certificates of Participation (Florence Crittenton Services Project) Series 1990 / (Swiss Bank LOC) 3.45%, 01/07/98 6,500 6,500 Orange County, California Sanitation District Certificates of Participation (Districts 1, 2, 3, 6, 7 & 11) Series 1992C / (FGIC Insurance & FGIC SPA) 4.75%, 01/01/98 1,600 1,600 Par Value ------- ---------- Orange County, California Sanitation District Certificates of Participation (Sanitation Districts 1, 2, 3, 5, 6, 7 & 11) Series 1992 / (AMBAC Insurance & Barclays Bank SBPA) 3.85%, 01/07/98 $24,970 $ 24,970 Orange County, California Water District Improvement Bond Act 1915 Revenue Bonds (Irvine Coast Assessment District) Number 88-1 / (Kredietbank, N.V. & Societe Generale LOC) 4.80%, 01/01/98 5,302 5,302 Panama Buena Vista, California Unified School District Certificates of Participation (1994 Capital Improvement Financing Project) / (Union Bank of California LOC) 4.35%, 01/07/98 4,000 4,000 Petaluma, California Community Multi-Family Housing Authority (Oakmont at Petaluma) / (U.S. Bank N.A. LOC) 4.05%, 01/07/98 1,100 1,100 Pleasant Hill, California Multi-Family Housing Revenue Bonds (Brookside Apartments Project) / (FNMA LOC) 3.35%, 01/07/98 5,400 5,400 Redlands, California Certificates of Participation (Water Treatment Facilities Project) / (FGIC Insurance & FGIC SPA) 3.40%, 01/07/98 6,575 6,575 Riverside County, California Certificates of Participation (Riverside County Public Facility Project) Series 1985C / (Norwest Bank & CommerceBank LOC) 4.00%, 01/07/98 10,000 10,000 Riverside County, California Community Facilities District #88-4 (Winchester Ranch) / (Kredietbank, N.V. LOC) 3.40%, 01/07/98 16,300 16,300
- -------------------------------------------------------------------------------- 75 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Riverside County, California Housing Authority Multi-Family Housing Revenue Bonds (Briarwood Apartment Project) Series 1985C / (FHLB LOC) 3.35%, 01/07/98 $ 4,500 $ 4,500 Riverside County, California Industrial Development Authority Revenue Bonds (Calmold Inc Project) / (Union Bank of California LOC) 3.65%, 01/07/98 2,900 2,900 Riverside County, California Industrial Development Revenue Bonds (Cryogenic Project) Series 1989B-1 / (Rabobank Nederland N.V. LOC) 3.90%, 01/07/98 4,100 4,100 Riverside County, California Multi-Family Housing Revenue Bonds (Ambergate Apartments) Series 1992A / (Union Bank of California LOC) 4.15%, 01/07/98 3,000 3,000 Sacramento County, California Certificates of Participation (Administration Center & Court House Project) / (Union Bank of Switzerland LOC) 3.80%, 01/07/98 18,400 18,400 Sacramento County, California Housing Authority Multi-Family Housing Revenue Bonds Series 1997A (Chesapeake Commons) / (Bank One LOC) 4.00%, 01/07/98 20,000 20,000 Salinas, California Apartment Development Multi-Family Housing Revenue Bonds (Mariner Villa Project) Series 1985B / (Bank of America LOC) 3.65%, 01/07/98 2,725 2,725 San Bernardino County, California Certificates of Participation (Glen Helen Blockbuster Pavilion Project) Series 1994C / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.15%, 01/07/98 6,990 6,990 Par Value ------- ---------- San Bernardino County, California Housing Authority Multi-Family Housing (Mountclair Heritage) Series 1993A / (FHLB & California Federal Bank LOC) 4.05%, 01/07/98 $ 4,620 $ 4,620 San Bernardino County, California Housing Authority Multi-Family Housing (Rialto Heritage) Series 1993A / (FHLB LOC) 4.05%, 01/01/98 4,330 4,330 San Bernardino County, California Multi-Family Housing Revenue Bonds (Western Properties Project IV) Series 1985 / (Bank of America LOC) 3.65%, 01/07/98 4,100 4,100 San Diego, California Housing Authority Multi-Family Housing Revenue Bonds (La Cima) Series 1985K / (Citibank LOC) 3.90%, 01/07/98 4,005 4,005 San Francisco, California City & County Housing Authority Multi- Family Housing Revenue Bonds (737 Post Project) Series 1985D / (Banque Nationale de Paris LOC) 3.65%, 01/07/98 16,800 16,800 San Francisco, California City & County Redevelopment Agency Multi-Family Housing Revenue Bonds (Fillmore Center Project) Series A-1 / (Citibank LOC) 3.35%, 01/07/98 26,500 26,500 San Francisco, California City & County Redevelopment Agency Multi-Family Housing Revenue Bonds (Fillmore Center Project) Series A-2 / (Citibank LOC) 3.40%, 01/07/98 3,750 3,750 San Francisco, California City & County Redevelopment Agency Multi-Family Housing Revenue Bonds (Rincon Center Apartments) Series 1985B / (Citibank LOC) 3.35%, 01/07/98 8,805 8,805
- -------------------------------------------------------------------------------- 76 - --------------------------------------------------------------------------------
Par Value ------- ---------- San Jose, California Multi-Family Housing Revenue Authority (Almeden Lake Apartments) Series 1997A / (Bank of America LOC) 3.60%, 01/07/98 $ 6,500 $ 6,500 San Jose, California Multi-Family Housing Revenue Bonds (Sienna At Renaissance) Series 1996A / (Bank One Arizona LOC) 3.60%, 01/07/98 10,500 10,500 San Jose, California Redevelopment Agency Merged Area Redevelopment Project Revenue Bonds / (Morgan Guaranty Trust Co.--New York LOC) 3.40%, 01/07/98 5,000 5,000 San Jose, California Redevelopment Agency Merged Area Redevelopment Project Series 96A / (Morgan Guaranty Trust Co.--New York LOC) 3.50%, 01/07/98 10,600 10,600 San Lorenzo, California Unified School District Certificates of Participation (Capital Improvement Financing Project) / (Banque Nationale de Paris LOC) 4.15%, 01/07/98 17,000 17,000 Santa Ana, California Unified School District Certificates of Participation (Land Acquisition Project) / (Banque Nationale Paris LOC) 3.35%, 01/07/98 4,400 4,400 Santa Clara County, California Hospital Facility Authority Revenue Bonds (El Camino Hospital District-Valley Medical Center Project) Series 1985B / (National Westminster Bank PLC LOC) 3.50%, 01/07/98 7,800 7,800 Santa Clara County, California Multi-Family Housing Refunding Revenue Bonds (Brairwood Apartments) Series 1996B / (FNMA LOC) 3.95%, 01/07/98 7,800 7,800 Par Value ------- ---------- Santa Clara County, California Multi-Family Housing Revenue Bonds (Grove Garden Apartments) Series 1997A / (FNMA LOC) 3.95%, 01/07/98 $14,000 $ 14,000 Santa Clara, California Electric Revenue Bonds Series 1985A / (National Westminster Bank PLC LOC) 3.40%, 01/07/98 12,300 12,300 Santa Clara, California Electric Revenue Bonds Series 1985B / (National Westminster Bank PLC LOC) 3.40%, 01/07/98 11,200 11,200 Santa Clara, California Electric Revenue Bonds Series 1985C / (National Westminster Bank PLC LOC) 3.40%, 01/07/98 8,100 8,100 Santa Cruz County, California Housing Authority Multi-Family Housing Revenue Bonds (Paloma Del Mar Apartments Project) Series 1992A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.05%, 01/07/98 7,700 7,700 Santa Fe Springs, California Industrial Development Authority Revenue Bonds / (Wells Fargo Bank LOC) 3.85%, 01/30/98 4,000 4,000 Santa Rosa, California Multi-Family Housing Revenue Bonds (Quail Run Apartments) Series 1997A / (U.S. Bank of Washington LOC) 4.05%, 01/07/98 3,000 3,000 South San Francisco, California Multi-Family Revenue Bonds (Magnolia Plaza Apartments Project) Series A / (Wells Fargo Bank LOC) 3.40%, 01/07/98 4,500 4,500
- -------------------------------------------------------------------------------- 77 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- Southern California Public Power Authority Refunding Revenue Bonds (Palos Verdes Project) Series 1996B / (AMBAC Insurance & Morgan Guaranty Trust Co.--New York LOC) 3.35%, 01/07/98 $ 1,800 $ 1,800 Southern California Public Power Authority Refunding Revenue Bonds Series C / (AMBAC Insurance & Morgan Guaranty LOC) 3.35%, 01/07/98 1,050 1,050 Southern California Public Power Authority Revenue Bonds (Southern Transmission Project) Series 1991 / (AMBAC Insurance & Swiss Bank LOC) 3.35%, 01/07/98 13,900 13,900 Southern California Public Power Authority Revenue Refunding Bonds (Southdown Transmission Project) Series 1996B / (FSA Insurance & Morgan Guaranty Trust Co.--New York SPA) 3.35%, 01/07/98 37,500 37,500 Turlock, California Irrigation District Certificates of Participation (Transmission Project, Municipal Utilities--Water & Sewer) Series 1996A / (Societe Generale LOC) 3.50%, 01/07/98 2,200 2,200 Union City, California Multi-Family Housing Revenue Bonds (Greenhaven Apartments) Series 1997A / (FNMA LOC) 3.95%, 01/07/98 10,975 10,975 Victor Valley, California Community College District Certificates of Participation / (Multiple Credit Enhancements) 4.00%, 01/07/98 42,450 42,450 West Sacramento California Special Tax Revenue Bonds / (Wells Fargo Bank LOC) 4.00%, 01/07/98 3,500 3,500 Par Value ------- ---------- West Sacramento, California Special Class Tax Community Facilities District #6 / (Union Bank of California LOC) 3.95%, 01/07/98 $ 4,250 $ 4,250 Westminster, California Redevelopment Agency Tax Allocation Community Redevelopment Project / (AMBAC Insurance & ABN-Amro SPA) 3.85%, 01/07/98 7,250 7,250 ---------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $1,850,004) 1,850,004 ---------- TAX-EXEMPT COMMERCIAL PAPER--20.4%(b) Anaheim, California Tax-Exempt Commercial Paper / (Multiple Credit Enhancements) 3.60%, 01/14/98 9,950 9,950 California Pollution Control Financing Authority Pollution Control Revenue Bonds (California Edition) Series 1996D / (Union Bank of Switzerland LOC) 3.65%, 02/25/98 17,000 17,000 California Pollution Control Financing Authority Pollution Control Revenue Bonds (Southern California Edison) Series 1985A 3.55%, 02/05/98 12,000 12,000 3.55%, 02/17/98 6,500 6,500 3.55%, 03/11/98 4,900 4,900 California Pollution Control Financing Authority Pollution Control Revenue Bonds (Southern California Edison) Series 1985B 3.55%, 02/17/98 2,200 2,200 3.55%, 03/11/98 2,100 2,100 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Calsan Inc. Project) Series 1996A / (Wells Fargo Bank LOC) 3.50%, 01/07/98 12,000 12,000
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Par Value ------- ---------- California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (Thermal Energy Development) Series 1988A / (National Westminster Bank PLC LOC) 3.70%, 02/10/98 $24,700 $ 24,700 East Bay Municipal Utility District Tax-Exempt Commercial Paper / (Westdeutsche Landesbank LOC) 3.80%, 01/16/98 2,000 2,000 3.65%, 02/09/98 10,000 10,000 3.60%, 02/09/98 500 500 3.75%, 02/18/98 3,500 3,500 3.60%, 02/18/98 30,850 30,850 3.65%, 03/06/98 16,700 16,700 Long Beach, California Harbor Tax-Exempt Commercial Paper / (Multiple Credit Enhancements LOC) 3.70%, 02/15/98 32,100 32,100 3.65%, 03/11/98 4,500 4,500 Los Angeles County Capital Asset Leasing Corp Lease Revenue Tax- Exempt Commercial Paper / (Multiple Credit Enhancements) 3.70%, 02/10/98 15,000 15,000 Los Angeles, California Wastewater System Commercial Paper Revenue Notes / (Morgan Guaranty Trust Co.--New York SBPA LOC) 3.75%, 02/12/98 34,500 34,500 Metropolitan Water District of Southern California Tax-Exempt Commercial Paper Program 3.60%, 02/25/98 10,000 10,000 Orange County, California Local Transportation Authority Sales Tax Revenue Commercial Paper Notes / (Union Bank of Switzerland LOC) 3.65%, 03/05/98 51,000 51,000 Riverside County, California Public Financing Authority Revenue Bonds / (Westdeutsche Landesbank LOC) 3.55%, 02/17/98 28,537 28,537 Par Value ------- ---------- San Diego Company Teeter Obligation Tax-Exempt Commercial Paper Notes Series B / (Industrial Bank of Japan LOC) 4.70%, 01/05/98 $28,450 $ 28,450 San Diego County Teeter Obligation Tax-Exempt Commercial Paper Series B / (Industrial Bank of Japan LOC) 3.75%, 01/14/98 24,813 24,813 San Joaquin County Transportation Authority Revenue Bonds / (Westdeutsche Landesbank LOC) 3.65%, 01/15/98 3,000 3,000 State of California Commercial Paper / (Multiple Credit Enhancement) 3.60%, 02/25/98 13,000 13,000 State of California Commercial Paper / (Multiple Credit Enhancements) 3.55%, 02/11/98 10,000 10,000 3.50%, 02/19/98 15,475 15,475 3.65%, 03/05/98 18,800 18,800 3.70%, 03/09/98 18,500 18,500 State of California General Obligation Tax-Exempt Commercial Paper Notes / (Multiple Credit Enhancements) 3.50%, 02/10/98 60,000 60,000 3.65%, 03/09/98 10,900 10,900 University of California Board of Regents Tax-Exempt Commercial Paper Notes / (Multiple Credit Enhancements) 3.50%, 02/09/98 19,000 19,000 3.55%, 02/11/98 27,000 27,000 3.55%, 02/19/98 35,555 35,555 University of California Board of Regents Tax-Exempt Commercial Paper Notes Series 1996A / (Multiple Credit Enhancements) 3.55%, 02/11/98 20,000 20,000 ---------- TOTAL TAX-EXEMPT COMMERCIAL PAPER (Cost $635,030) 635,030 ----------
- -------------------------------------------------------------------------------- 79 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- TAX AND REVENUE ANTICIPATION NOTES--12.9%(b) Acalanes, California Unified High School District Tax & Revenue Anticipation Notes 3.79%, 06/30/98 $ 6,000 $ 6,020 Alameda County, California Tax & Revenue Anticipation Notes 3.90%, 07/22/98 25,000 25,080 California School Cash Reserve Program Authority Pooled Tax & Revenue Anticipation Notes / (AMBAC Insurance) 3.85%, 07/02/98 50,000 50,216 3.81%, 07/02/98 20,000 20,086 3.76%, 07/02/98 8,100 8,136 California Statewide Community Development Authority Tax & Revenue Anticipation Notes Series A / (FSA Insurance) 3.80%, 06/30/98 102,000 102,339 Contra Costa County, California Tax & Revenue Anticipation Notes Series A 3.77%, 07/01/98 2,425 2,433 Desert Sands, California Unified School District Tax & Revenue Anticipation Notes 3.80%, 07/07/98 9,200 9,202 Hunting Beach, California Tax & Revenue Anticipation Notes 3.83%, 09/30/98 18,325 18,413 Los Angeles City, California Tax & Revenue Anticipation Notes Series 1997--1998 3.89%, 06/30/98 15,000 15,043 Orange County, California Fire Authority Tax & Revenue Anticipation Notes Series 1997-- 1998 3.90%, 09/17/98 4,500 4,511 Pleasanton, California Unified School District Tax & Revenue Anticipation Notes 3.79%, 06/30/98 5,300 5,318 Par Value ------- ---------- Puerto Rico Commonwealth Tax & Revenue Anticipation Notes Series 1 3.75%, 07/30/98 $35,000 $ 35,148 Sacramento County California Tax & Revenue Anticipation Notes Series 1997--1998 3.84%, 09/30/98 2,500 2,512 San Bernardino County, California Tax & Revenue Anticipation Notes 3.85%, 06/30/98 50,000 50,154 3.77%, 06/30/98 7,000 7,023 San Diego County, California Tax & Revenue Anticipation Notes Series 1997--1998 (Multiple Credit Enhancements) 3.76%, 09/30/98 3,000 3,016 San Francisco, California Unified School District Tax and Revenue Anticipation Notes 3.87%, 10/30/98 2,000 2,010 Sunnyvale, California Tax & Revenue Anticipation Notes 3.80%, 06/30/98 5,000 5,017 Sutter County, California Office of Education Tax & Revenue Anticipation Notes 3.83%, 10/29/98 7,120 7,158 Ventura County, California Tax & Revenue Anticipation Notes 3.85%, 06/30/98 12,000 12,023 West Contra Costa County, California Unified School District Tax & Revenue Anticipation Notes 3.85%, 06/30/98 10,000 10,019 ---------- TOTAL TAX AND REVENUE ANTICIPATION NOTES (Cost $400,877) 400,877 ---------- REVENUE ANTICIPATION NOTES--2.6%(b) California State Revenue Anticipation Notes Series 1997-1998 3.83%, 06/30/98 50,000 50,160 3.70%, 06/30/98 1,000 1,004 3.61%, 06/30/98 30,000 30,122 ---------- TOTAL REVENUE ANTICIPATION NOTES (Cost $81,286) 81,286 ----------
- -------------------------------------------------------------------------------- 80 - --------------------------------------------------------------------------------
Par Value ------- ---------- GENERAL OBLIGATION BONDS--1.6%(b) California State General Obligation Bonds Series 1996 3.92%, 06/01/98 $13,430 $ 13,704 California State General Obligation Bonds Series 97 3.76%, 10/01/98 36,570 36,766 ---------- TOTAL GENERAL OBLIGATION BONDS (Cost $50,470) 50,470 ---------- REVENUE BONDS--1.3%(b) Metropolitan Water District of Southern California Revenue Bonds Series 1997A 3.78%, 07/01/98 7,440 7,448 Modesto California Irrigation District Series A / (MBIA Insurance) 3.58%, 10/01/98 4,305 4,320 Norco Real Estate Development Authority / (Escrowed in U.S. Treasuries) 3.88%, 03/01/98 5,175 5,312 3.76%, 03/01/98 5,870 6,027 Orange County, California Apartment Revenue Bonds / (MBIA Insurance) 3.88%, 07/01/98 1,500 1,508 Orange County, California Transportation Authority Sales Tax Revenue Bonds 3.70%, 02/15/98 1,105 1,107 Puerto Rico Commonwealth Aqueduct & Sewer / (Escrowed in U.S. Treasuries) 3.75%, 07/01/98 10,150 10,553 Sacramento, California Municipal Utilities District Electric Revenue Bonds Series V / (Escrowed to Maturity with Government Securities) 3.80%, 08/15/98 2,000 2,044 Sacramento, California Municipal Utility District Electric Revenue Bonds Series 1988V / (Escrowed Inc. U.S. Treasuries) 3.75%, 08/15/98 2,000 2,089 Par Value ------- ---------- Santa Rosa, California Waste Water Project A / (FGIC Insurance) 3.54%, 09/01/98 $ 1,065 $ 1,066 ---------- TOTAL REVENUE BONDS (Cost $41,474) 41,474 ---------- FIXED RATE TENDER OPTION BONDS--1.2%(b)(e) California State Department of Water Resources Revenue Bonds (Central Valley Project) Series J3 Tender Option Bond Partnership (BTP-141) / (Bankers Trust Tender Option) 3.70%, 01/14/98 5,155 5,155 Los Angeles County, California Transportation Commission Sales Tax Revenue Bonds Tender Option Bond Partnership (BTP-146) / (Bankers Trust Tender Option & Escrowed to Maturity with Government Securities) 3.70%, 01/14/98 23,078 23,078 Metropolitan Water District of Southern California General Obligation Revenue Refunding Bonds Series 1993A-1 & 1993A-2 Tender Option Bond Partnership (BTP-115) / (Bankers Trust Tender Option) 3.70%, 01/14/98 10,145 10,145 ---------- TOTAL FIXED RATE TENDER OPTION BONDS (Cost $38,378) 38,378 ---------- MANDATORY PUT BONDS--0.3%(b) California Health Facilities Financing Authority Single Family Mortgage Revenue Bonds / (Morgan Guaranty Trust Co.--New York LOC) 3.70%, 04/01/98 8,610 8,610 ---------- TOTAL MANDATORY PUT BONDS (Cost $8,610) 8,610 ----------
- -------------------------------------------------------------------------------- 81 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- VARIABLE RATE TENDER OPTION BONDS--0.3%(a)(c) Los Angeles, California Department of Water & Power Electric Plant Revenue Refunding Bonds Series 1994 Tender Option Bond Partnership (BTP-68) / (Automatic Data Processing, Inc. Tender Option) 4.30%, 01/07/98 $ 5,195 $ 5,195 Metropolitan Water District of Southern California Revenue Bonds Tender Option Bond Partnership (JPM-32B) / (Morgan Guaranty Trust Tender Option) 4.05%, 01/07/98 3,000 3,000 ---------- TOTAL VARIABLE RATE TENDER OPTION BONDS (Cost $8,195) 8,195 ---------- TOTAL INVESTMENTS--100% (Cost $3,114,324) $3,114,324 ---------- ----------
SEE ACCOMPANYING NOTES TO SCHEDULE OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 82 SCHWAB NEW YORK MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- VARIABLE RATE OBLIGATIONS--56.6%(a) Albany, New York Industrial Development Agency Adjustable Rate Revenue Bonds (Newkirk Products, Inc.) Series 1995A / (Fleet Bank of New York LOC) 4.25%, 01/07/98 $ 1,000 $ 1,000 Babylon, New York Industrial Development Authority Revenue Bonds (General Microwave) / (National Westminster Bank PLC LOC) 3.60%, 01/07/98 1,100 1,100 Cortland County, New York Industrial Development Agency Revenue Bonds (General Signal Corp. Project) Series 1983 / (Wachovia Bank LOC) 4.00%, 01/07/98 1,750 1,750 Erie County, New York Water Authority Water Revenue Bonds Series 1993B / (National Australia Bank LOC) 3.55%, 01/07/98 3,500 3,500 Franklin County, New York Industrial Development Agency Revenue Bonds (Kes Chateaugay LP Project) Series A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.25%, 01/07/98 14,300 14,300 Monroe County, New York Industrial Development Agency Revenue Bonds (ENBI Corp. Lease Rent Project) Series 1988 / (ABN-Amro Bank N.V. LOC) 3.55%, 01/07/98 2,000 2,000 New York City Housing Development Corp Series A-2 / (Bayerische Hypotheken Und Wechsel Bank LOC) 4.10%, 01/01/98 14,000 14,000 New York City Industrial Development Authority Revenue Bonds (Allway Tools Incorporated Project) / (Citibank LOC) 4.15%, 01/07/98 1,970 1,970 Par Value ------- ---------- New York City, New York Cultural Trust Resource Revenue Adjustable Bonds (Solomon R. Guggenheim Project) Series 1990B / (Swiss Bank LOC) 4.75%, 01/07/98 $ 500 $ 500 New York City, New York General Obligation Bonds Series 1993A9 / (Morgan Guaranty Trust Co.--New York LOC) 3.70%, 01/01/98 1,000 1,000 New York City, New York General Obligation Bonds Series 1994B Subseries B2 / (Bank Austria Aktiengesellschaft SBPA & MBIA Insurance) 5.10%, 01/01/98 600 600 New York City, New York General Obligation Bonds Series 1995B Subseries B-10 / (Union Bank of Switzerland LOC) 3.50%, 01/07/98 4,600 4,600 New York City, New York General Obligation Bonds Series 1995B Subseries B-8 / (Bayerische Landesbank Girozentrale LOC) 3.50%, 01/07/98 7,400 7,400 New York City, New York Health & Hospital Corp. Health System Revenue Bonds Series 1997A / (Morgan Guaranty Trust Co--New York LOC) 3.50%, 01/01/98 2,000 2,000 New York City, New York Health & Hospital Corp. Health System Revenue Bonds Series 1997C / (Toronto-Dominion Bank LOC) 3.55%, 01/07/98 6,000 6,000 New York City, New York Housing Development Corp. Multi-Family Housing Mortgage Revenue Bonds (Columbus Gardens Project) Series 1993A / (Citibank LOC) 4.05%, 01/07/98 3,165 3,165
- -------------------------------------------------------------------------------- 83 SCHWAB NEW YORK MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- New York City, New York Housing Development Corp. Multi-Family Housing Mortgage Revenue Bonds (Parkgate Tower Project) / (Citibank LOC) 3.60%, 01/07/98 $17,470 $ 17,470 New York City, New York Industrial Development Agency Floating Rate Revenue Bonds (White Plains Auto) / (Societe Generale LOC) 3.65%, 01/07/98 200 200 New York City, New York Industrial Development Agency Revenue Bonds (Brooklyn Navy Yard Co.) Series 1995A / (Bank of America LOC) 4.25%, 01/07/98 14,600 14,600 New York City, New York Industrial Development Agency Revenue Bonds (Brooklyn Navy Yard Co.) Series 1995B / (Bank of America LOC) 4.35%, 01/07/98 7,300 7,300 New York City, New York Industrial Development Authority Special Facility Revenue Bonds (Korean Airlines Co. Project) Series 1997A / (Bankers Trust LOC) 3.60%, 01/07/98 20,900 20,900 New York City, New York Multi-Family Rental Housing Revenue Bonds (Tribeca Tower Project) Series 1997A / (FNMA LOC) 3.55%, 12/31/97 9,000 9,000 New York City, New York Municipal Water Finance Authority Water & Sewer System Revenue Bonds Series 1992C / (FGIC Insurance & FGIC SPA) 5.10%, 01/01/98 680 680 New York City, New York Municipal Water Finance Authority Water & Sewer System Revenue Bonds Series 1994C / (FGIC Insurance & FGIC SBPA) 5.10%, 01/02/98 900 900 Par Value ------- ---------- New York City, New York Municipal Water Finance Authority Water & Sewer System Revenue Bonds Series 1995A / (FGIC Insurance) 4.15%, 01/01/98 $ 1,000 $ 1,000 New York State Dormatory Authority Revenue Bonds (New York Foundling Charitable) / (Allied Irish Bank PLC LOC) 3.60%, 01/07/98 1,000 1,000 New York State Dormitory Authority Revenue Bonds (Masonic Hall Asylum) / (AMBAC Insurance & Credit Local de France SBPA) 3.55%, 01/07/98 3,600 3,600 New York State Dormitory Authority Revenue Bonds (New York Public Library) Series 1992B / (Canadian Imperial Bank of Commerce LOC) 3.50%, 01/07/98 1,500 1,500 New York State Energy Research & Development Authority Electric Facilities Adjustable Rate Revenue Bonds (Long Island Lighting Co. Project) Series 1993A / (Toronto-Dominion Bank LOC) 3.85%, 01/07/98 3,000 3,000 New York State Energy Research & Development Authority Electric Facilities Adjustable Rate Revenue Bonds (Long Island Lighting Co. Project) Series 1993B / (Toronto-Dominion Bank LOC) 3.85%, 01/07/98 6,000 6,000 New York State Energy Research & Development Authority Electric Facilities Adjustable Rate Revenue Bonds (Long Island Lighting Co. Project) Series 1994A / (Union Bank of Switzerland LOC) 3.80%, 01/07/98 5,000 5,000
- -------------------------------------------------------------------------------- 84 - --------------------------------------------------------------------------------
Par Value ------- ---------- New York State Energy Research & Development Authority Pollution Control Revenue Bonds (Central Hudson Gas & Electric Corp. Project) Series 1985A / (Morgan Guaranty Trust Co.--New York LOC) 4.00%, 01/07/98 $10,000 $ 10,000 New York State Energy Research & Development Authority Pollution Control Revenue Refunding Bonds (New York Electric & Gas) / (Union Bank of Switzerland LOC) 5.00%, 01/01/98 800 800 New York State Energy Research & Development Authority Pollution Control Revenue Refunding Bonds (Niagara Mohawk Power) Series 1985A / (Toronto-Dominion Bank LOC) 4.50%, 01/01/98 1,700 1,700 New York State Energy Research & Development Authority Pollution Control Revenue Refunding Bonds (Orange & Rockland Utilities, Inc. Project) Series 1994A / (FGIC Insurance & Societe Generale SBPA) 3.55%, 01/07/98 11,300 11,300 New York State Energy Research and Development Authority Pollution Control Revenue Bonds (Rochester Gas and Electric Corp.) / (MBIA Insurance) 3.55%, 12/31/97 1,800 1,800 New York State Environmental Facility Corp. Adjustable Rate Tender Resource Recovery Revenue Bonds (OFS Equity of Huntington Inc. Project) / (Union Bank of Switzerland LOC) 5.20%, 01/07/98 1,500 1,500 Par Value ------- ---------- New York State Housing Finance Agency Multi-Family Housing Revenue Bonds (Tribeca Park Housing Project) Series 1997A / (Bayerische Hypotheken Und Wechsel Bank LOC) 3.90%, 01/07/98 $ 6,300 $ 6,300 New York State Housing Finance Agency Revenue Bonds (East 84th Street Project) Series 1995A / (Fleet Bank of New York LOC) 3.60%, 01/07/98 3,700 3,700 New York State Housing Finance Agency Revenue Bonds (Mount Sinai School of Medicine) Series 1984A / (Sanwa Bank LOC) 3.90%, 01/07/98 9,200 9,200 New York State Housing Finance Agency Revenue Bonds (Normandie Court II) Series 1987A / (Bankers Trust Co. LOC) 4.00%, 01/07/98 5,800 5,800 New York State Housing Finance Agency Revenue Bonds (Union Square South Housing) / (Bayerische Hypotheken Und Wechsel Bank LOC) 3.55%, 01/07/98 18,000 18,000 New York State Housing Finance Agency Revenue Bonds (West 50 Street Project) Series 1997A / (Fleet Bank of New York LOC) 3.60%, 01/07/98 10,400 10,400 New York State Local Government Assistance Corp. Revenue Bonds Series 1993A / (Union Bank of Switzerland & Credit Suisse LOC) 3.50%, 01/07/98 4,300 4,300 New York State Local Government Assistance Corp. Revenue Bonds Series 1994B / (Credit Suisse & Swiss Bank LOC) 3.50%, 01/07/98 400 400 New York State Local Government Assistance Corp. Revenue Bonds Series 1995B / (Bank of Nova Scotia LOC) 3.55%, 01/07/98 4,800 4,800
- -------------------------------------------------------------------------------- 85 SCHWAB NEW YORK MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- New York State Local Government Assistance Corp. Revenue Bonds Series 1995G / (National Westminster Bank PLC LOC) 3.55%, 01/07/98 $ 5,400 $ 5,400 New York State Medical Care Facilities Financing Agency Revenue Pooled Equipment Loan Program Series 1 / (Chemical Bank LOC) 3.70%, 01/07/98 2,200 2,200 Niagara County, New York Industrial Development Agency Revenue Bonds (Allegheny Ludlum Steel Co.) Series 1984 / (PNC Bank LOC) 4.10%, 01/07/98 3,500 3,500 Niagara Falls, New York Bridge Commission Revenue Bonds Series 1993A / (FGIC Insurance & Credit Local de France SPA) 3.55%, 01/07/98 6,400 6,400 Schenectady, New York Industrial Development Agency Revenue Bonds (Fortitech Holding Corp. Project) Series A / (Fleet Bank of New York LOC) 4.25%, 01/07/98 1,400 1,400 St. Lawrence County, New York Industrial Development Agency Environmental Improvement Revenue Bonds (Reynolds Metals Project) Series 1995 / (Royal Bank of Canada LOC) 3.75%, 01/07/98 4,000 4,000 Suffolk County Water Authority Variable Rate Ban Series 1997 / (Bank of Nova Scotia LOC) 4.05%, 01/07/98 5,000 5,000 Town of Islip, New York Industrial Development Revenue Magnum Realty (Creative Bath Products) / (Chemical Bank LOC) 3.55%, 01/07/98 3,320 3,320 Par Value ------- ---------- Triborough Bridge & Tunnel Authority, New York Special Obligation Bridge Revenue Bonds Series 1994 / (FGIC Insurance & FGIC SPA) 3.55%, 01/07/98 $ 2,900 $ 2,900 Yonkers, New York Industrial Development Agency Civic Facilities Revenue Bonds (Consumers Union Facility Project) Series 1989 / (Industrial Bank of Japan LOC) 3.50%, 01/07/98 1,500 1,500 Yonkers, New York Industrial Development Agency Civic Facilities Revenue Bonds (Consumers Union Facility Project) Series 1991 / (Industrial Bank of Japan LOC) 3.50%, 01/07/98 700 700 Yonkers, New York Industrial Development Agency Civic Facilities Revenue Bonds (Consumers Union Facility Project) Series 1994 / (AMBAC Insurance & Credit Local de France SBPA) 3.50%, 01/07/98 1,900 1,900 ---------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $285,255) 285,255 ---------- TAX-EXEMPT COMMERCIAL PAPER--13.0%(b) Monroe County, New York Unlimited Tax Public Improvement General Obligation Bonds / (Bank of Nova Scotia LOC) 3.65%, 03/10/98 4,500 4,500 New York City General Obligation Bonds Fiscal Series 1994H (FSA LOC & State Street SPA) 3.75%, 02/10/98 1,500 1,500 New York City, New York Muni Assistance Corp. Tax-Exempt Commercial Paper Notes Series 1997K-3 / (Landesbank Hessen-Thuringen Girozentrale LOC) 3.70%, 02/25/98 16,800 16,800
- -------------------------------------------------------------------------------- 86 - --------------------------------------------------------------------------------
Par Value ------- ---------- New York City, New York Municipal Water Finance Authority Commercial Paper / (Credit Suisse LOC) 3.80%, 04/07/98 $10,000 $ 10,000 New York State Environmental Quality 86 Variable Rate General Obligation Bonds Series 1997A / (Bayerische Landesbank & Landesbank Hessen-Thurigen Girozentrale LOC) 3.70%, 03/05/98 5,000 5,000 New York State Environmental Quality Assurance Bonds / (Bayerische Landesbank & Landesbank Hessen-Thuringen Girozentrale LOC) 3.65%, 02/12/98 7,400 7,400 New York State Power Authority Tax-Exempt Commercial Paper Notes 3.80%, 02/12/98 5,000 5,000 New York State Power Authority Tax-Exempt Commercial Paper Notes Series 2 / (Multiple Credit Enhancements) 3.70%, 02/10/98 15,000 15,000 ---------- TOTAL TAX-EXEMPT COMMERCIAL PAPER (Cost $65,200) 65,200 ---------- TAX ANTICIPATION NOTES--11.8%(b) Central Islip, New York Unified School District Tax Anticipation Notes 3.90%, 06/30/98 17,000 17,048 Nassau County, New York Tax Anticipation Note Series B 3.78%, 08/31/98 10,000 10,030 Patchogue-Medford, New York Unified School District Tax Anticipation Notes 3.80%, 06/25/98 5,000 5,010 Suffolk County, New York Tax Anticipation Notes Series 1998I / (Multiple Credit Enhancements)(d) 3.64%, 08/13/98 20,000 20,075 Par Value ------- ---------- Western Islip, New York Union Free School District Tax Anticipation Notes 3.87%, 06/30/98 $ 7,000 $ 7,011 ---------- TOTAL TAX ANTICIPATION NOTES (Cost $59,174) 59,174 ---------- BOND ANTICIPATION NOTES--8.1%(b) Byram Hills, New York Central School District Bond Anticipation Notes 3.75%, 05/08/98 2,500 2,504 Campbell-Savona, New York Consolidated Bond Anticipation Notes Series 1997-98 3.95%, 09/03/98 9,000 9,017 Colonie, New York Bond Anticipation Notes Series B 3.75%, 04/17/98 2,052 2,055 East Hampton Township, New York Bond Anticipation Notes Series 1997B 3.96%, 04/16/98 4,519 4,526 Islip, New York Bond Anticipation Notes Series 1997-1998 3.85%, 07/24/98 5,350 5,362 Niagara-Wheatfield, New York Central School District Bond Anticipation Notes 3.80%, 12/30/98 5,000 5,022 Queensbury, New York Unified School District (Warren County) Bond Anticipation Notes 3.85%, 08/07/98 8,000 8,018 Union-Endicott County, New York School District Bond Anticipation Notes 3.80%, 12/29/98 4,300 4,318 ---------- TOTAL BOND ANTICIPATION NOTES (Cost $40,822) 40,822 ----------
- -------------------------------------------------------------------------------- 87 SCHWAB NEW YORK MUNICIPAL MONEY FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in thousands) December 31, 1997
Par Value ------- ---------- VARIABLE RATE TENDER OPTION BONDS-- 3.0%(a)(c) New York City, New York General Obligation Tender Option Bonds Partnership (Corestates Merlot Program) Series 1997C / (Corestates Bank N.A. & MBIA Insurance) 3.70%, 01/09/98 $15,000 $ 15,000 ---------- TOTAL VARIABLE RATE TENDER OPTION BONDS (Cost $15,000) 15,000 ---------- REVENUE BONDS--2.5%(b) New York City, New York General Obligation Bonds Series 1994B-B7 / (AMBAC Insurance & Escrowed to Maturity with Government Securities) 5.10%, 01/01/98 1,100 1,100 New York State Environmental Facilities Corporation Pollution Control Center State Water New York State Muni Water 3.19%, 06/15/98 6,270 6,299 New York State Thruway Authority General Revenue Bonds Series 1997D 3.85%, 01/01/98 5,180 5,180 ---------- TOTAL REVENUE BONDS (Cost $12,579) 12,579 ---------- OPTIONAL PUT BONDS--2.4%(b) New York State Energy Research & Development Agency Pollution Control Revenue Bonds (Long Island Lighting Co. Project) Series 1985B / (Deutsche Bank LOC) 3.60%, 03/01/98 12,000 12,000 ---------- TOTAL OPTIONAL PUT BONDS (Cost $12,000) 12,000 ----------
Par Value ------- ---------- GENERAL OBLIGATION BONDS--1.6%(b) Long Beach County, New York School District General Obligation Bonds / (FGIC Insurance) 3.84%, 11/15/98 $ 430 $ 432 Montgomery County, New York General Obligation Bonds / (FGIC Insurance) 3.89%, 06/15/98 400 402 Nassau County, New York General Improvement Revenue Bonds Series 1995Q / (FGIC Insurance) 3.37%, 08/01/98 3,990 4,018 Phelps-Clifton Springs, New York Consolidated School District General Obligation Revenue Bonds / (AMBAC Insurance & Escrowed to Maturity with Government Securities) 3.78%, 06/15/98 1,025 1,033 Spencerport County, New York School District General Obligation Bond / (FSA LOC) 3.84%, 11/15/98 545 550 Suffolk County Public Improvement Revenue Bonds Series 1996D / (FGIC Insurance) 3.57%, 08/01/98 1,425 1,434 ---------- TOTAL GENERAL OBLIGATION BONDS (Cost $7,869) 7,869 ---------- TAX AND REVENUE ANTICIPATION NOTES-- 1.0%(b) Puerto Rico Commonwealth Tax & Revenue Anticipation Notes Series 1 3.76%, 07/30/98 5,000 5,021 ---------- TOTAL TAX AND REVENUE ANTICIPATION NOTES (Cost $5,021) 5,021 ---------- TOTAL INVESTMENTS--100% (Cost $502,920) $ 502,920 ---------- ----------
SEE ACCOMPANYING NOTES TO SCHEDULE OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 88 - -------------------------------------------------------------------------------- NOTES TO SCHEDULE OF INVESTMENTS Year ended December 31, 1997 For each security, cost (for financial reporting and federal income tax purposes) and carrying value are the same. (a) Variable rate securities. Interest rates vary periodically based on current market rates. Rates shown are the effective rates as of the report date. Dates shown represent the latter of the demand date or next interest rate change date, which is considered the maturity date for financial reporting purposes. For variable rate securities without demand features, the next interest reset date is shown. (b) Interest rates represent effective yield to put or call date at time of purchase. (c) Certain securities purchased by the Fund are private placement securities exempt from registration by Section 4(2) of the Securities Act of 1933. These securities generally are issued to institutional investors, such as the Schwab Municipal Money Fund, Schwab California Municipal Money Fund, and Schwab New York Municipal Money Fund. Any resale by the Fund must be in an exempt transaction, normally to a qualified institutional buyer. At December 31, 1997, the aggregate values of private placement securities held by the Schwab Municipal Money Fund, Schwab California Municipal Money Fund, and Schwab New York Municipal Money Fund were $123,060,000, $8,195,000 and $15,000,000, respectively, which represented 2.23%, 0.27% and 3.11%, respectively, of the net assets of each Fund. All of these private placement investments were determined by the Investment Manager to be liquid in accordance with procedures adopted by the Board of Trustees. (d) Security traded on a delayed-delivery basis. Payment and delivery is scheduled for a future time, generally within two weeks of entering into the transaction. The transaction is subject to market fluctuation and to the risk that the value may be more or less than the purchase price when the transaction was initiated. The Fund has set aside sufficient investment securities as collateral for securities purchased on a delayed-delivery basis. (e) Certain securities cannot be resold to the general public without prior registration under the Securities Act of 1933. If the security is subsequently registered and resold, the issuers would typically bear the expense of all registrations at no cost to the fund. At December 31, 1997, the aggregate value of the restricted securities held by Schwab Municipal Money Fund and Schwab California Municipal Money Fund were $70,795,000 and $38,378,000, respectively, which represented 1.29% and 1.24%, respectively, of the net assets of each Fund. All of these restricted investments were determined by the Investment Manager to be illiquid in accordance with procedures adopted by the Board of Trustees. - -------------------------------------------------------------------------------- 89 - -------------------------------------------------------------------------------- NOTES TO SCHEDULE OF INVESTMENTS (continued)
Abbreviations - ------------- FGIC Financial Guaranty Insurance Company FHLB Federal Home Loan Bank FNMA Federal National Mortgage Association FNB First National Bank FSA Financial Security Assurance GNMA Government National Mortgage Association LOC Letter of Credit MBIA Municipal Bond Investors Assurance Corporation NCNB North Carolina NationsBank N.R.U.-C.F.C. National Rural Utilities Cooperative Financing Corporation SBPA Standby Purchase Agreement SLMA Student Loan Marketing Association SPA Securities Purchase Agreement
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 90 - ------------------------------------------------------------------------------ STATEMENTS OF ASSETS AND LIABILITIES (in thousands) December 31, 1997
Schwab Schwab Schwab California New York Municipal Municipal Municipal Money Money Money Fund Fund Fund ---------- ---------- ----------- ASSETS Investments, at value (Cost: $5,618,618 $3,114,324 and $502,920, respectively) $5,618,618 $3,114,324 $ 502,920 Cash 77 214 114 Receivables: Interest 35,177 20,363 3,016 Investments sold 2,564 -- -- Fund shares sold 25,049 7,194 269 Deferred organization costs -- -- 12 Prepaid expenses 270 26 14 ---------- ---------- ----------- Total assets 5,681,755 3,142,121 506,345 ---------- ---------- ----------- LIABILITIES Payables: Dividends 21,131 11,407 1,796 Investments purchased 146,228 30,551 20,073 Fund shares redeemed 4,057 8,185 1,589 Investment advisory fees 263 138 20 Transfer agency and shareholder service fees 551 293 46 Other liabilities 455 210 63 ---------- ---------- ----------- Total liabilities 172,685 50,784 23,587 ---------- ---------- ----------- Net assets applicable to outstanding shares $5,509,070 $3,091,337 $ 482,758 ---------- ---------- ----------- ---------- ---------- ----------- NET ASSETS CONSIST OF: Paid-in-capital $5,511,910 $3,092,113 $ 482,772 Accumulated net realized loss on investments sold (2,840) (776) (14) ---------- ---------- ----------- $5,509,070 $3,091,337 $ 482,758 ---------- ---------- ----------- ---------- ---------- ----------- PRICING OF SHARES $0.00001 par value (unlimited shares authorized) Outstanding Sweep Shares 4,426,564 2,155,276 357,233 Outstanding Value Advantage Shares-TM- 1,085,346 936,837 125,539 ---------- ---------- ----------- 5,511,910 3,092,113 482,772 Net asset value, offering and redemption price per each Sweep and Value Advantage Share-TM- $1.00 $1.00 $1.00
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 91 - ------------------------------------------------------------------------------ STATEMENTS OF OPERATIONS (in thousands) Year ended December 31, 1997
Schwab Schwab Schwab California New York Municipal Municipal Municipal Money Money Money Fund Fund Fund ----------- ----------- ----------- Interest income $ 183,178 $ 95,236 $ 14,760 ----------- ----------- ----------- Expenses: Investment advisory and administration fees 20,308 11,372 1,867 Transfer agency and shareholder service fees: Sweep Shares 18,463 8,702 1,401 Value Advantage Shares-TM- 1,998 1,835 237 Custodian fees 490 347 199 Registration fees 396 117 103 Professional fees 75 28 16 Shareholder reports 328 197 52 Trustees' fees 24 18 13 Amortization of deferred organization costs -- -- 5 Insurance and other expenses 615 257 70 ----------- ----------- ----------- 42,697 22,873 3,963 Less: expenses reduced and absorbed (see Note 4) (11,459) (6,774) (1,333) ----------- ----------- ----------- Total expenses incurred by Fund 31,238 16,099 2,630 ----------- ----------- ----------- Net investment income 151,940 79,137 12,130 Net realized gain (loss) on investments sold (515) (44) 1 ----------- ----------- ----------- Increase in net assets resulting from operations $ 151,425 $ 79,093 $ 12,131 ----------- ----------- ----------- ----------- ----------- -----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 92 - ------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
Schwab Municipal Schwab California Municipal Schwab New York Municipal Money Fund Money Fund Money Fund ---------------------------- ---------------------------- ---------------------------- Year ended December 31, Year ended December 31, Year ended December 31, ---------------------------- ---------------------------- ---------------------------- 1997 1996 1997 1996 1997 1996 ------------- ------------- ------------- ------------- ------------- ------------- Operations: Net investment income $ 151,940 $ 116,741 $ 79,137 $ 55,047 $ 12,130 $ 7,339 Net realized gain (loss) on investments sold (515) (477) (44) (68) 1 (9) ------------- ------------- ------------- ------------- ------------- ------------- Increase in net assets resulting from operations 151,425 116,264 79,093 54,979 12,131 7,330 ------------- ------------- ------------- ------------- ------------- ------------- Dividends to shareholders from net investment income: Sweep Shares (125,666) (104,911) (56,234) (45,951) (9,121) (6,338) Value Advantage Shares-TM- (26,274) (11,830) (22,903) (9,096) (3,009) (1,001) ------------- ------------- ------------- ------------- ------------- ------------- Total dividends to shareholders (151,940) (116,741) (79,137) (55,047) (12,130) (7,339) ------------- ------------- ------------- ------------- ------------- ------------- Capital share transactions (at $1.00 per share): Proceeds from shares sold 17,267,233 13,705,095 8,685,116 6,230,933 1,365,492 979,381 Net asset value of shares issued in reinvestment of dividends 143,585 112,199 74,380 52,112 11,240 6,854 Less payments for shares redeemed (16,378,232) (12,904,337) (7,991,713) (5,645,082) (1,231,270) (868,937) ------------- ------------- ------------- ------------- ------------- ------------- Increase in net assets from capital share transactions 1,032,586 912,957 767,783 637,963 145,462 117,298 ------------- ------------- ------------- ------------- ------------- ------------- Total increase in net assets 1,032,071 912,480 767,739 637,895 145,463 117,289 Net assets: Beginning of period 4,476,999 3,564,519 2,323,598 1,685,703 337,295 220,006 ------------- ------------- ------------- ------------- ------------- ------------- End of period $ 5,509,070 $ 4,476,999 $ 3,091,337 $ 2,323,598 $ 482,758 $ 337,295 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 93 - ------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
Schwab Municipal Money Fund Sweep Shares ------------------------------------------------------------------ Year ended December 31, ------------------------------------------------------------------ 1997 1996 1995 1994 1993 ---------- ---------- ---------- ---------- ---------- Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income 0.03 0.03 0.03 0.02 0.02 Net realized and unrealized gain (loss) on investments -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- Total from investment operations 0.03 0.03 0.03 0.02 0.02 LESS DISTRIBUTIONS Dividends from net investment income (0.03) (0.03) (0.03) (0.02) (0.02) ---------- ---------- ---------- ---------- ---------- Total distributions (0.03) (0.03) (0.03) (0.02) (0.02) ---------- ---------- ---------- ---------- ---------- Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- TOTAL RETURN (not annualized) 3.11% 2.92% 3.30% 2.32% 1.93% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000s) $4,423,841 $3,868,919 $3,403,837 $3,015,951 $2,423,317 Ratio of expenses to average net assets+ 0.66%++ 0.66% 0.66% 0.65% 0.63% Ratio of net investment income to average net assets+ 3.06% 2.89% 3.25% 2.31% 1.92%
- --------------- + The information contained in the above table is based on actual expenses for the periods, after giving effect to the portion of expenses reduced and absorbed by the Investment Manager and Schwab. Had these expenses not been reduced and absorbed, the Fund's expense and net investment income ratios would have been: Ratio of expenses to average net assets 0.90% 0.90% 0.91% 0.91% 0.93% Ratio of net investment income to average net assets 2.83% 2.65% 3.00% 2.05% 1.62%
++ This expense ratio excludes interest expenses, extraordinary expenses and taxes. Had these expenses been included, the expense ratio would have been 0.67%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 94 - --------------------------------------------------------------------------------
Schwab Municipal Money Fund Value Advantage Shares-TM- -------------------------------------- Year ended Period ended December 31, December 31, ---------------------- ------------ 1997 1996 1995(1) ---------- -------- ------------ Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 ---------- -------- ------------ INCOME FROM INVESTMENT OPERATIONS Net investment income 0.03 0.03 0.02 Net realized and unrealized gain (loss) on investments -- -- -- ---------- -------- ------------ Total from investment operations 0.03 0.03 0.02 LESS DISTRIBUTIONS Dividends from net investment income (0.03) (0.03) (0.02) ---------- -------- ------------ Total distributions (0.03) (0.03) (0.02) ---------- -------- ------------ Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 ---------- -------- ------------ ---------- -------- ------------ TOTAL RETURN (not annualized) 3.32% 3.14% 1.68% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000s) $1,085,229 $608,080 $160,682 Ratio of expenses to average net assets+ 0.45%++ 0.45% 0.45%* Ratio of net investment income to average net assets+ 3.29% 3.10% 3.50%*
- --------------- + The information contained in the above table is based on actual expenses for the periods, after giving effect to the portion of expenses reduced and absorbed by the Investment Manager and Schwab. Had these expenses not been reduced and absorbed, the Fund's expense and net investment income ratios would have been: Ratio of expenses to average net assets 0.72% 0.75% 0.95%* Ratio of net investment income to average net assets 3.03% 2.80% 3.00%*
++ This expense ratio excludes interest expenses, extraordinary expenses and taxes. Had these expenses been included, the expense ratio would have been 0.46%. (1) Period from July 7, 1995 (commencement of operations) to December 31, 1995. * Annualized SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 95 - ------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
Schwab California Municipal Money Fund Sweep Shares ------------------------------------------------------------------ Year ended December 31, ------------------------------------------------------------------ 1997 1996 1995 1994 1993 ---------- ---------- ---------- ---------- ---------- Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income 0.03 0.03 0.03 0.02 0.02 Net realized and unrealized gain (loss) on investments -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- Total from investment operations 0.03 0.03 0.03 0.02 0.02 LESS DISTRIBUTIONS Dividends from net investment income (0.03) (0.03) (0.03) (0.02) (0.02) ---------- ---------- ---------- ---------- ---------- Total distributions (0.03) (0.03) (0.03) (0.02) (0.02) ---------- ---------- ---------- ---------- ---------- Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- TOTAL RETURN (not annualized) 2.95% 2.80% 3.20% 2.26% 1.91% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000s) $2,154,522 $1,816,112 $1,577,695 $1,293,883 $1,062,042 Ratio of expenses to average net assets+ 0.65%++ 0.65% 0.65% 0.64% 0.63% Ratio of net investment income to average net assets+ 2.91% 2.77% 3.15% 2.25% 1.89%
- --------------- + The information contained in the above table is based on actual expenses for the periods, after giving effect to the portion of expenses reduced and absorbed by the Investment Manager and Schwab. Had these expenses not been reduced and absorbed, the Fund's expense and net investment income ratios would have been: Ratio of expenses to average net assets 0.91% 0.92% 0.94% 0.94% 0.96% Ratio of net investment income to average net assets 2.66% 2.50% 2.86% 1.95% 1.56%
++ This expense ratio excludes interest expenses, extraordinary expenses and taxes. Had these expenses been included, the expense ratio would have been 0.66%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 96 - --------------------------------------------------------------------------------
Schwab California Municipal Money Fund Value Advantage Shares-TM- ------------------------------------ Year ended December 31, Period ended -------------------- December 31, 1997 1996 1995(1) -------- -------- ------------ Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 -------- -------- ------------ INCOME FROM INVESTMENT OPERATIONS Net investment income 0.03 0.03 0.01 Net realized and unrealized gain (loss) on investments -- -- -- -------- -------- ------------ Total from investment operations 0.03 0.03 0.01 LESS DISTRIBUTIONS Dividends from net investment income (0.03) (0.03) (0.01) -------- -------- ------------ Total distributions (0.03) (0.03) (0.01) -------- -------- ------------ Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 -------- -------- ------------ -------- -------- ------------ TOTAL RETURN (not annualized) 3.15% 3.01% 0.84% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000s) $936,815 $507,486 $108,008 Ratio of expenses to average net assets+ 0.45%++ 0.45% 0.45%* Ratio of net investment income to average net assets+ 3.12% 2.98% 3.48%*
- --------------- + The information contained in the above table is based on actual expenses for the periods, after giving effect to the portion of expenses reduced and absorbed by the Investment Manager and Schwab. Had these expenses not been reduced and absorbed, the Fund's expense and net investment income ratios would have been: Ratio of expenses to average net assets 0.72% 0.77% 1.04%* Ratio of net investment income to average net assets 2.86% 2.66% 2.89%*
++ This expense ratio excludes interest expenses, extraordinary expenses and taxes. Had these expenses been included, the expense ratio would have been 0.46%. (1) Period from October 3, 1995 (commencement of operations) to December 31, 1995. * Annualized SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 97 - ------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
Schwab New York Municipal Money Fund Sweep Shares ------------------------------------ Year ended December 31, Period ended -------------------- December 31, 1997 1996 1995(1) -------- -------- ------------ Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 -------- -------- ------------ INCOME FROM INVESTMENT OPERATIONS Net investment income 0.03 0.03 0.03 Net realized and unrealized gain (loss) on investments -- -- -- -------- -------- ------------ Total from investment operations 0.03 0.03 0.03 LESS DISTRIBUTIONS Dividends from net investment income (0.03) (0.03) (0.03) -------- -------- ------------ Total distributions (0.03) (0.03) (0.03) -------- -------- ------------ Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 -------- -------- ------------ -------- -------- ------------ TOTAL RETURN (not annualized) 2.96% 2.74% 2.75% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000s) $357,221 $270,612 $204,863 Ratio of expenses to average net assets+ 0.69%++ 0.69% 0.63%* Ratio of net investment income to average net assets+ 2.93% 2.71% 3.20%*
- --------------- + The information contained in the above table is based on actual expenses for the periods, after giving effect to the portion of expenses reduced and absorbed by the Investment Manager and Schwab. Had these expenses not been reduced and absorbed, the Fund's expense and net investment income ratios would have been: Ratio of expenses to average net assets 1.02% 1.04% 1.04%* Ratio of net investment income to average net assets 2.62% 2.36% 2.79%*
++ This expense ratio excludes interest expenses, extraordinary expenses and taxes. Had these expenses been included, the expense ratio would have been 0.70%. (1) Period from February 27, 1995 (commencement of operations) to December 31, 1995. * Annualized SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 98 - --------------------------------------------------------------------------------
Schwab New York Municipal Money Fund Value Advantage Shares-TM- ----------------------------------- Year ended December 31, Period ended ------------------- December 31, 1997 1996 1995(1) -------- ------- ------------ Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 -------- ------- ------------ INCOME FROM INVESTMENT OPERATIONS Net investment income 0.03 0.03 0.02 Net realized and unrealized gain (loss) on investments -- -- -- -------- ------- ------------ Total from investment operations 0.03 0.03 0.02 LESS DISTRIBUTIONS Dividends from net investment Income (0.03) (0.03) (0.02) -------- ------- ------------ Total distributions (0.03) (0.03) (0.02) -------- ------- ------------ Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 -------- ------- ------------ -------- ------- ------------ TOTAL RETURN (not annualized) 3.21% 2.99% 1.62% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000s) $125,537 $66,683 $15,143 Ratio of expenses to average net assets+ 0.45%++ 0.45% 0.45%* Ratio of net investment income to average net assets+ 3.18% 2.98% 3.42%*
- --------------- + The information contained in the above table is based on actual expenses for the periods, after giving effect to the portion of expenses reduced and absorbed by the Investment Manager and Schwab. Had these expenses not been reduced and absorbed, the Fund's expense and net investment income ratios would have been: Ratio of expenses to average net assets 0.85% 1.01% 1.81%* Ratio of net investment income to average net assets 2.80% 2.42% 2.06%*
++ This expense ratio excludes interest expenses, extraordinary expenses and taxes. Had these expenses been included, the expense ratio would have been 0.46%. (1) Period from July 7, 1995 (commencement of operations) to December 31, 1995. * Annualized SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 99 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Year ended December 31, 1997 1. DESCRIPTION OF THE FUND The Schwab Municipal Money Fund, Schwab California Municipal Money Fund and Schwab New York Municipal Money Fund (the "Funds"), are series of The Charles Schwab Family of Funds (the "Trust"), a no-load, open-end investment management company organized as a Massachusetts business trust on October 20, 1989 and registered under the Investment Company Act of 1940, as amended. The Funds offer multiple classes of shares--the Sweep Shares and the Value Advantage Shares-TM-. Both classes represent interests in the same portfolio of investments of the respective Fund and are substantially the same in all respects, except that the classes are subject to different transfer agency and shareholder service fees (see Note 3), investment minimums and certain other expenses. In addition to the three Funds described above, the Trust also offers--Schwab Money Market Fund, Schwab Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Value Advantage Money Fund-Registered Trademark-, Schwab Institutional Advantage Money Fund-Registered Trademark-, Schwab Retirement Money Fund-Registered Trademark- and Schwab Government Cash Reserves. (The Schwab Government Cash Reserves was effective on October 20, 1997. However, the Fund has not commenced operations.) The assets of each series are segregated and accounted for separately. 2. SIGNIFICANT ACCOUNTING POLICIES The following significant accounting policies are in conformity with generally accepted accounting principles for investment companies. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. SECURITY VALUATION--Investments are stated at amortized cost which approximates market value. SECURITY TRANSACTIONS, INTEREST INCOME AND REALIZED GAINS (LOSSES)--Security transactions are accounted for on a trade date basis (date the order to buy or sell is executed). Interest income is accrued daily and includes amortization of premium on investments. Realized gains and losses from security transactions are determined on an identified cost basis. Income and realized gains (losses) are allocated daily to each class of shares of a Fund based on the value of settled shares outstanding of each respective class. - -------------------------------------------------------------------------------- 100 - -------------------------------------------------------------------------------- DEFERRED ORGANIZATION COSTS--Costs incurred in connection with the organization of the Funds are amortized on a straight-line basis over a five-year period from each Funds' commencement of operations. DIVIDENDS TO SHAREHOLDERS--Each Fund declares a daily dividend, equal to its net investment income for that day, payable monthly. Dividends paid by a Fund with respect to each class of shares are calculated in the same manner, at the same time, and will be in the same amount except for the effect of expenses that may be applied differently, as described below. EXPENSES--Expenses arising in connection with a Fund are charged directly to that Fund. Expenses common to all series of the Trust are generally allocated to each series in proportion to their relative net assets. Expenses attributable to both classes of shares of a Fund are allocated daily to each class of that Fund based on the value of settled shares outstanding of each respective class. Transfer agency, shareholder service fees and certain other expenses which are class specific are calculated daily at the class level. FEDERAL INCOME TAXES--It is each Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net investment income and realized net capital gains, if any, to shareholders. Therefore, no federal income tax provision is required. Each Fund is considered a separate entity for tax purposes. All distributions paid by the Schwab Municipal Money Fund, Schwab California Municipal Money Fund, and Schwab New York Municipal Money Fund for the year ended December 31, 1997 qualify as exempt interest dividends for federal tax purposes. 3. TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS--The Trust has investment advisory and administration agreements with Charles Schwab Investment Management, Inc. (the "Investment Manager"). For advisory services and facilities furnished, each Fund pays an annual fee, payable monthly, of 0.46% of the first $1 billion of average daily net assets, 0.41% of the next $1 billion and 0.40% of such assets in excess of $2 billion. The Investment Manager has reduced a portion of its fee for the year ended December 31, 1997 (see Note 4). TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS--The Trust has transfer agency and shareholder service agreements with Charles Schwab & Co., Inc. ("Schwab"). For services provided under these agreements, Schwab receives an annual fee, payable monthly, of 0.45% and 0.25% of each Fund's average daily net assets of the Sweep Shares and Value Advantage Shares, respectively. Schwab has reduced a portion of its fee for the year ended December 31, 1997 (see Note 4). - -------------------------------------------------------------------------------- 101 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (continued) OFFICERS AND TRUSTEES--Certain officers and trustees of the Trust are also officers and/or directors of the Investment Manager and/or Schwab. During the year ended December 31, 1997, the Trust made no direct payments to its officers or trustees who are "interested persons" within the meaning of the Investment Company Act of 1940, as amended. The Schwab Municipal Money Fund, Schwab California Municipal Money Fund and Schwab New York Municipal Money Fund incurred fees aggregating $55,000, related to the Trust's unaffiliated trustees. 4. EXPENSES REDUCED AND ABSORBED BY THE INVESTMENT MANAGER AND SCHWAB The Investment Manager and Schwab guarantee that, through at least April 30, 1998, total operating expenses of each class of shares will not exceed the percentages of the average daily net assets of that class shares, after waivers and reimbursement, as shown below. For purposes of this guarantee, operating expenses do not include interest expenses, extraordinary expenses, and taxes.
Sweep Value Advantage Shares Shares-TM- - ----------------------------------------------------------------------------- Schwab Municipal Money Fund 0.66% 0.45% - ----------------------------------------------------------------------------- Schwab California Municipal Money Fund 0.65% 0.45% - ----------------------------------------------------------------------------- Schwab New York Municipal Money Fund 0.69% 0.45% - -----------------------------------------------------------------------------
For the year ended December 31, 1997, the total of such fees reduced by the Investment Manager were $10,977,000, 6,548,000 and $1,192,000 for the Schwab Municipal Money Fund, Schwab California Municipal Money Fund and Schwab New York Municipal Money Fund, respectively, and the total of such fees reduced by Schwab were $482,000, $226,000 and $141,000 for the Schwab Municipal Money Fund, Schwab California Municipal Money Fund and Schwab New York Municipal Money Fund, respectively. - -------------------------------------------------------------------------------- 102 - -------------------------------------------------------------------------------- 5. CAPITAL SHARE TRANSACTIONS Each Fund offers two classes of shares: Sweep Shares and Value Advantage Shares-TM-. Shares of each class represent interests in the same portfolio of investments of the Fund. Transactions in capital shares were as follows, (in thousands):
Schwab Municipal Schwab California Schwab New York Money Fund Municipal Money Fund Municipal Money Fund ------------------------------ -------------------------- ------------------------- Year ended December 31, Year ended December 31, Year ended December 31, ------------------------------ -------------------------- ------------------------- 1997 1996 1997 1996 1997 1996 -------------- -------------- ------------ ------------ ------------ ----------- Proceeds from shares sold: Sweep Shares $ 15,493,142 $ 12,710,212 $ 7,203,514 $ 5,448,674 $ 1,167,590 $ 868,824 Value Advantage Shares-TM- 1,774,091 994,883 1,481,602 782,259 197,902 110,557 -------------- -------------- ------------ ------------ ------------ ----------- Total 17,267,233 13,705,095 8,685,116 6,230,933 1,365,492 979,381 -------------- -------------- ------------ ------------ ------------ ----------- Net asset value of shares issued in reinvestment of dividends: Sweep Shares 120,622 102,508 53,926 44,907 8,549 6,081 Value Advantage Shares-TM- 22,963 9,691 20,454 7,205 2,691 773 -------------- -------------- ------------ ------------ ------------ ----------- Total 143,585 112,199 74,380 52,112 11,240 6,854 -------------- -------------- ------------ ------------ ------------ ----------- Less payments for shares redeemed: Sweep Shares (15,058,403) (12,347,201) (6,918,999) (5,255,105) (1,089,531) (809,149) Value Advantage Shares-TM- (1,319,829) (557,136) (1,072,714) (389,977) (141,739) (59,788) -------------- -------------- ------------ ------------ ------------ ----------- Total (16,378,232) (12,904,337) (7,991,713) (5,645,082) (1,231,270) (868,937) -------------- -------------- ------------ ------------ ------------ ----------- Total increase in net assets from capital share transactions $ 1,032,586 $ 912,957 $ 767,783 $ 637,963 $ 145,462 $ 117,298 -------------- -------------- ------------ ------------ ------------ ----------- -------------- -------------- ------------ ------------ ------------ -----------
- -------------------------------------------------------------------------------- 103 - -------------------------------------------------------------------------------- To the Trustees and Shareholders of Schwab Municipal Money Fund, Schwab California Municipal Money Fund, and Schwab New York Municipal Money Fund In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Municipal Money Fund, Schwab California Municipal Money Fund, and Schwab New York Municipal Money Fund (three series constituting part of The Charles Schwab Family of Funds, hereafter referred to as the "Trust") at December 31, 1997, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 1997 by correspondence with the custodian and brokers, and the application of alternative auditing procedures where confirmations from brokers were not received, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP San Francisco, California January 30, 1998 - -------------------------------------------------------------------------------- 104 THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS. A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU. SCHWABFUNDS FAMILY-Registered Trademark- The SchwabFunds Family includes a variety of funds to help meet your investment needs. You can diversify your portfolio in a single step with our asset allocation funds. Or you can customize your portfolio with a combination of our stock funds as well as our taxable and tax-advantaged bond and money funds. SCHWAB ASSET ALLOCATION FUNDS Schwab Asset Director-Registered Trademark--High Growth Fund Schwab Asset Director--Balanced Growth Fund Schwab Asset Director--Conservative Growth Fund Schwab OneSource Portfolios--Growth Allocation Schwab OneSource Portfolio--Balanced Allocation SCHWAB STOCK FUNDS Schwab 1000 Fund-Registered Trademark- Schwab S&P 500 Fund Schwab Analytics Fund-Registered Trademark- Schwab Small-Cap Index Fund-Registered Trademark- Schwab OneSource Portfolios--Small Company Schwab International Index Fund-Registered Trademark- Schwab OneSource Portfolios--International SCHWAB BOND FUNDS Schwab Bond Index Funds--Total and Short-Term Bond Market Index Funds-Registered Trademark- Schwab Tax-Free Bond Funds--Long-Term and Short/Intermediate Schwab California Tax-Free Bond Funds--Long-Term and Short/Intermediate SCHWAB MONEY FUNDS Schwab offers an array of money funds that seek high current income with safety and liquidity.(1) Choose from taxable or tax-advantaged alternatives. Many can be linked to your Schwab account to "sweep" cash balances automatically when you're between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments.-Registered Trademark- Please call 1-800-435-4000 for a free prospectus and brochure for any of the SchwabFunds.-Registered Trademark- EACH PROSPECTUS PROVIDES MORE COMPLETE INFORMATION, INCLUDING FEES AND EXPENSES. PLEASE READ IT CAREFULLY BEFORE INVESTING. This report must be preceded or accompanied by a current prospectus. (1) Formerly known as the Schwab Government Bond Funds--Long-Term and Short/Intermediate. (2) Investments in money market funds are neither insured nor guaranteed by the U.S. government, and there is no assurance that the funds will be able to maintain a stable share price of $1. SCHWABFUNDS ============== F A M I L Y -Registered Trademark- BULK RATE U.S. POSTAGE 101 Montgomery Street PAID San Francisco, California 94104 CHARLES SCHWAB ============== INVESTMENT ADVISOR Charles Schwab Investment Management, Inc. 101 Montgomery Street, San Francisco, CA 94104 DISTRIBUTOR Charles Schwab & Co., Inc. 101 Montgomery Street, San Francisco, CA 94104 This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus. - -C- 1996 Charles Schwab & Co., Inc. All rights reserved. Member SPCNYSE. Printed on recycled paper. CRS 20176 (0098-1082) TF5457(2/98) FOLD -----END PRIVACY-ENHANCED MESSAGE-----