-----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, MCFmgbVNyTH402Tw2RmEFZ5DVNPNFw7zsBpJEbveU1mepPjZtRwJGqypEbrSRjiB CHizxxJMg4swBQgRRnVp4g== 0000935069-98-000144.txt : 19980828 0000935069-98-000144.hdr.sgml : 19980828 ACCESSION NUMBER: 0000935069-98-000144 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980827 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHWAB CHARLES FAMILY OF FUNDS CENTRAL INDEX KEY: 0000857156 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05954 FILM NUMBER: 98699104 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 SCHWAB MUNICIPAL MONEY FUND SCHWAB MUNICIPAL MONEY FUNDS We're pleased to bring you this semiannual report for the following funds (the Funds) for the six-month period ended June 30, 1998: - Schwab Municipal Money Fund - Schwab California Municipal Money Fund - Schwab New York Municipal Money Fund - Schwab New Jersey Municipal Money Fund - Schwab Pennsylvania Municipal Money Fund - Schwab Florida Municipal Money Fund During the reporting period, the Funds provided current tax-exempt income combined with capital stability and liquidity.(1) Please remember that while each Fund seeks to maintain a stable $1.00 share price to protect your principal, as with all money funds there can be no assurance that the Fund will be able to maintain a $1.00 net asset value. It is also important to understand that investments in any of the Funds are neither insured nor guaranteed by the U.S. government. Three of the Funds--the Schwab Municipal Money Fund, the Schwab California Municipal Money Fund and the Schwab New York Municipal Money Fund--offer two classes of shares, Sweep Shares-TM- and Value Advantage Shares-TM-, both of which are presented in this report. These two classes were designed for different purposes, as explained on page 3. Depending on your cash needs and investment profile, either or both classes of the Funds may have a place in your investment plan. CONTENTS - ------------------------------------------------ A Message from the Chairman 1 - ------------------------------------------------ What Money Fund Investors Should Know 2 - ------------------------------------------------ Market Overview 4 - ------------------------------------------------ Portfolio Management 7 - ------------------------------------------------ Schwab Municipal Money Fund 8 - ------------------------------------------------ Schwab California Municipal Money Fund 9 - ------------------------------------------------ Schwab New York Municipal Money Fund 10 - ------------------------------------------------ Schwab New Jersey Municipal Money Fund 11 - ------------------------------------------------ Schwab Pennsylvania Municipal Money Fund 12 - ------------------------------------------------ Schwab Florida Municipal Money Fund 13 - ------------------------------------------------ Fund Discussion 14 - ------------------------------------------------ Glossary of Terms 19 - ------------------------------------------------ Portfolio Highlights 20 - ------------------------------------------------ Financial Statements and Notes 23 - ------------------------------------------------
(1)Income from all of the Funds may be subject to the federal alternative minimum tax (AMT), and income from the Schwab Municipal Money Fund may be subject to state and local income taxes. A MESSAGE FROM THE CHAIRMAN Dear Shareholder, The U.S. stock market rallied strongly over most of the six-month period ended June 30, 1998, as did many European markets. And despite investors' concerns about Asia's financial crisis last autumn, economic conditions continued to provide a solid underpinning for U.S. business activity. The U.S. economy, as measured by gross domestic product (GDP), grew at a strong real rate in the first half of 1998, and it appears poised for continued growth. Inflation has remained in check despite the lowest unemployment levels in decades, and short-term interest rates remained in a relatively narrow range due, in part, to widespread expectations that the Federal Reserve would make no [PHOTO] changes to interest rates in the near term. This combination of strong growth and tight labor markets, offset by low inflation and uncertainty generated by continued turmoil in Asian markets, resulted in a relatively calm short-term interest rate environment with no clear trend during the six-month reporting period. Regardless of short-term market trends, however, our philosophy has always been that REGULAR INVESTING is the best strategy over the long term. Your investment in a money fund may play an important role in your asset allocation. Because of this, we've included some guidelines in the following pages about what to look for in a money market fund. You might find that more than one kind of money fund may be appropriate for you, depending on your goals and financial situation. As always, feel free to contact us if you have any questions. The support of investors like you has helped Charles Schwab Investment Management, Inc. (CSIM) become one of the largest and fastest-growing mutual fund families in the nation. CSIM now manages more than $66 billion in assets on behalf of more than 3.5 million SchwabFunds-Registered Trademark- shareholders. We offer a full spectrum of 35 mutual funds for investors with varying financial situations and goals. Once again, thank you for your investment in SchwabFunds. We continue to do everything we can to warrant the trust you have placed in us. Sincerely, /s/ Charles R. Schwab Charles R. Schwab June 30, 1998 1 WHAT MONEY FUND INVESTORS SHOULD KNOW WHY ASSET ALLOCATION MATTERS As most investors know, one of the most compelling reasons to invest in a mutual fund is diversification. By allocating your assets across many different securities, a fund helps to reduce the risk that you might otherwise encounter by owning just a few stocks or bonds. Don't forget, however, that diversification across your portfolio is just as important as diversification within one of the mutual funds you own. As you probably know, stocks have historically offered much higher returns over the long term than other asset classes, such as bonds or cash, but those returns have come at the price of higher volatility. To help mitigate some of that risk, many investors often include at least some bonds and cash in their portfolio. CHOOSING A MONEY MARKET FUND Many investors may believe that there is no good reason to shop around for a money market fund. This may be partially due to the fact that 20 years ago practically the only feature that differentiated one money market fund from another was whether it allowed investors to write checks against it. Things have changed since then, and today investors can choose from a wide variety of options and features offered by the more than 1,000 money market funds currently available.(1) You can help assure yourself that you've chosen the right money market fund by considering how it will be used and what role it will play in your investment portfolio. Here are some things to consider when making or reviewing your money market fund choice. EXPENSES: Because expenses are one of the key factors that determines a money market mutual fund's performance, investors are wise to seek out funds with low operating expense ratios. Also, beware of those that have temporary expense waivers that waive expenses to zero, because expenses can't stay at zero forever, and fees will undoubtedly eventually rise. Also beware of 12b-1 fees, which some money market funds include in their expense ratios to pay for marketing costs. These fees can reduce yield--in some cases by a full percentage point. A recent survey by a money market trade publication found that more than 40% of taxable money market funds available to individual investors charge these fees. When comparing money market fund choices, you may want to avoid funds that carry these unnecessary fees. YIELDS: Look for competitive yields--but don't stop there. Many institutions advertise their money market funds on the basis of yield.(2) Although getting a competitive yield is important, other features--such as how you access your investment--are also important considerations. Furthermore, stretching for an additional 10 or 20 basis points in yield (0.10% to 0.20%) may not be worth the time, effort or added risk. For example, a $10,000 investment in a money fund that yields 0.10% more amounts to only an additional $10 over a year-long period. SWEEP FEATURES: If you're looking for a convenient way to link your money market fund with your brokerage account, consider an account that has a "sweep" feature. Money market funds with this feature "sweep" uninvested cash balances into your money fund. The upshot: It keeps cash working. This convenience may be well worth the small additional cost. LARGER CASH BALANCES: You may earn a higher yield for larger cash balances. If you don't need frequent access to the money in your money market fund, consider one designed to pay higher yields for a higher cash balance. Because the account balances are higher, these money market funds normally incur lower expenses and, therefore, may be able to post higher yields, all else being equal. TAXES: Don't forget to consider your tax situation. If you're in a high tax-bracket, investing in tax-free or municipal money market funds may help take a bite out of your tax bill.(3) And, if you live in a state with a high personal state income or other personal tax, you may be best served by choosing a state tax-free fund that provides income free from federal and state and, in some cases, local income taxes.(3) (1)Money market funds are managed to maintain a stable $1 share price. Investments in these funds are neither insured nor guaranteed by the U.S. government, and there can be no assurance that a fund will be able to maintain a stable net asset value of $1 per share. (2)Yields may vary. (3)This may not be true for investors subject to the federal alternative minumum tax (AMT); consult your tax advisor. 2 MONEY FUNDS AT SCHWAB 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 the role that cash and cash-equivalent investments play in your investment plan, either or both may have a place in your investment plan. SWEEP INVESTMENTS-TM- are designed for cash balances requiring frequent access--such as your short-term and even daily cash needs. These shares can be linked to your Schwab brokerage account and contain a feature that automatically "sweeps" uninvested cash balances into the Sweep Shares class of the Fund you designate, according to the terms and conditions of your Schwab account. Sweep Shares also may be used to settle trades and automatically cover other day-to-day transactions, such as margin calls. VALUE ADVANTAGE INVESTMENTS-REGISTERED TRADEMARK- are designed to serve as longer-term money market investment vehicles for larger balances that do not require frequent access. These funds may help fill the cash-equivalent sector in your asset allocation plan. With higher minimum investment and balance requirements and other transaction restrictions designed to minimize fund operating expenses, Value Advantage Investments can offer the potential of higher yields to investors. It is important to note that, unlike Sweep Investments, Value Advantage Investments are not designed to automatically cover negative balances in your Schwab account. TAXABLE MONEY MARKET FUNDS Schwab offers the following taxable money market Sweep investments. If you are selecting from among them, you should consider your attitude toward risk and return, as well as your income-tax bracket. SCHWAB MONEY MARKET FUND invests in high-quality money market securities, including 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. TAX-ADVANTAGED MONEY FUNDS The SCHWAB MUNICIPAL MONEY FUNDS may provide you with higher returns after taxes, especially if you're in a high tax bracket.(4) The SCHWAB MUNICIPAL MONEY FUND Sweep Shares-TM- invests in municipal obligations that generate income free from federal income tax. And for investors in California, New York, New Jersey, Pennsylvania and Florida, Schwab offers Sweep Investments that can also provide income free from state and, in some instances, local taxes. Consult your tax advisor for specific guidance on your tax situation before investing. If you would like more information on any of these funds, please call us toll-free at 1-800-435-4000 and request a free prospectus that contains more information, including fees and expenses. Please read the prospectus before investing. WE MAKE IT EASY TO INVEST We try to make it easy and convenient for you to invest in our SchwabFunds-Registered Trademark-. In addition to our automated methods that allow you to invest or transfer money to your Schwab account on a regular basis, you can also invest in person at any of our nationwide branches, through our Web site at WWW.SCHWAB.COM and through our automated touch-tone telephone service, TeleBroker-Registered Trademark-, by calling 1-800-272-4922. KEEPING YOU INFORMED One of our top priorities at Charles Schwab is to keep you informed about your investments and potential opportunities in the marketplace. A wealth of information about our investment philosophy and funds, as well as the market and economic environment, can be found at our Web site: WWW.SCHWAB.COM/SCHWABFUNDS (4)Income from all of the Funds may be subject to the alternative minimum tax (AMT), and income from the Schwab Municipal Money Fund may be subject to state and local taxes. 3 MARKET OVERVIEW U.S. GROWTH RATE Although somewhat dampened during the second quarter, THE U.S. ECONOMY, AS MEASURED BY THE GROSS DOMESTIC PRODUCT (GDP), GREW AT A STRONG REAL RATE OF 3.5% for the first half of 1998--well in excess of the Federal Reserve's estimated noninflationary growth rate of 2.0% to 2.75%. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
REAL GDP GROWTH RATE QUARTERLY PERCENTAGE CHANGE (ANNUALIZED 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 3.7% Q1 1998 5.5% Q2 1998 1.4% Source: Bloomberg L.P.
At the time of this writing, THE U.S. ECONOMY APPEARS POISED FOR CONTINUED GROWTH, further extending the current economic expansion that began in 1991. This expansion is fueled by high levels of consumer confidence, rising real wages and strong year-to-date gains in stock prices. Although most economists believe that the brunt of Asia's economic crisis will hit the United States in the next six months, they feel that it is unlikely to cause even a temporary pause in U.S. economic growth; it may help slow the GDP growth rate nearer to the Federal Reserve's estimated non-inflationary levels, however. UNEMPLOYMENT THE U.S. UNEMPLOYMENT RATE STOOD AT 4.5% IN JUNE AFTER FALLING TO 4.3% IN APRIL AND MAY--THE LOWEST LEVELS IN 28 YEARS. Labor markets have become extremely tight; growth in the labor force has slowed, and wage increases are beginning to put more pressure on labor costs (refer to Employment Cost Index at right). 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 6.6% 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 5.4% 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 5.6% 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 5.5% Aug-96 5.2% Sep-96 5.2% Oct-96 5.3% Nov-96 5.4% Dec-96 5.3% Jan-97 5.3% Feb-97 5.3% Mar-97 5.2% Apr-97 5.0% May-97 4.8% Jun-97 5.0% Jul-97 4.9% Aug-97 4.9% Sep-97 4.9% Oct-97 4.8% Nov-97 4.6% Dec-97 4.7% Jan-98 4.7% Feb-98 4.6% Mar-98 4.7% Apr-98 4.3% May-98 4.3% Jun-98 4.5% Source: Bloomberg L.P.
4 INFLATION BOTH THE EMPLOYMENT COST INDEX (ECI) AND CONSUMER PRICE INDEX (CPI) REMAINED IN CHECK during the first half of 1998, reflecting continued low inflation. THE CPI ROSE just 1.7% for the year ended June 1998-- reaching levels during the reporting period that were the lowest since January 1987. Its core rate (which excludes the more volatile food and energy components) rose 2.2%--the lowest rate of increase since 1965. The Employment Cost Index includes two components--BENEFITS, which has been well contained (up only 2.4% for the year ended Q2 1998), and WAGES AND SALARIES, which has increased 3.8% for the same period. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MEASURES OF INFLATION MONTHLY CONSUMER PRICE INDEX QUARTERLY EMPLOYMENT COST INDEX Jan-90 5.2% 5.5% Feb-90 5.3% 5.5% Mar-90 5.2% 5.5% Apr-90 4.7% 5.4% May-90 4.4% 5.4% Jun-90 4.7% 5.4% Jul-90 4.8% 5.2% Aug-90 5.6% 5.2% Sep-90 6.2% 5.2% Oct-90 6.3% 4.9% Nov-90 6.3% 4.9% Dec-90 6.1% 4.9% Jan-91 5.7% 4.6% Feb-91 5.3% 4.6% Mar-91 4.9% 4.6% Apr-91 4.9% 4.6% May-91 5.0% 4.6% Jun-91 4.7% 4.6% Jul-91 4.4% 4.3% Aug-91 3.8% 4.3% Sep-91 3.4% 4.3% Oct-91 2.9% 4.3% Nov-91 3.0% 4.3% Dec-91 3.1% 4.3% Jan-92 2.6% 4.0% Feb-92 2.8% 4.0% Mar-92 3.2% 4.0% Apr-92 3.2% 3.6% May-92 3.0% 3.6% Jun-92 3.1% 3.6% Jul-92 3.2% 3.5% Aug-92 3.1% 3.5% Sep-92 3.0% 3.5% Oct-92 3.2% 3.5% Nov-92 3.0% 3.5% Dec-92 2.9% 3.5% Jan-93 3.3% 3.5% Feb-93 3.2% 3.5% Mar-93 3.1% 3.5% 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% 3.5% Nov-93 2.7% 3.5% Dec-93 2.7% 3.5% Jan-94 2.5% 3.2% Feb-94 2.5% 3.2% Mar-94 2.5% 3.2% Apr-94 2.4% 3.2% May-94 2.3% 3.2% Jun-94 2.5% 3.2% Jul-94 2.8% 3.2% Aug-94 2.9% 3.2% Sep-94 3.0% 3.2% Oct-94 2.6% 3.0% Nov-94 2.7% 3.0% Dec-94 2.7% 3.0% Jan-95 2.8% 2.9% Feb-95 2.9% 2.9% Mar-95 2.9% 2.9% Apr-95 3.1% 2.9% May-95 3.2% 2.9% Jun-95 3.0% 2.9% Jul-95 2.8% 2.7% Aug-95 2.6% 2.7% Sep-95 2.5% 2.7% Oct-95 2.8% 2.7% Nov-95 2.6% 2.7% Dec-95 2.5% 2.7% Jan-96 2.7% 2.8% Feb-96 2.7% 2.8% Mar-96 2.8% 2.8% Apr-96 2.9% 2.9% May-96 2.9% 2.9% Jun-96 2.8% 2.9% Jul-96 3.0% 2.8% Aug-96 2.9% 2.8% Sep-96 3.0% 2.8% Oct-96 3.0% 2.9% Nov-96 3.3% 2.9% Dec-96 3.3% 2.9% Jan-97 3.0% 2.9% Feb-97 3.0% 2.9% Mar-97 2.8% 2.9% 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% 3.3% Nov-97 1.8% 3.3% Dec-97 1.7% 3.3% Jan-98 1.6% 3.3% Feb-98 1.4% 3.3% Mar-98 1.4% 3.3% Apr-98 1.4% 3.5% May-98 1.7% 3.5% Jun-98 1.7% 3.5% Source: Bloomberg L.P. and Bureau of Labor Statistics
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 those achieved in 1997, allow manufacturers and other businesses to limit price increases in the face of rising wages without sacrificing profit margins. SHORT-TERM INTEREST RATE ENVIRONMENT SHORT-TERM INTEREST RATES REMAINED IN A NARROW RANGE throughout the reporting period due to widespread expectations that there would be no changes to the Federal Reserve's interest rate policy. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
YIELDS ON 90-DAY COMMERCIAL PAPER AND THREE-MONTH TREASURY BILLS: 1/1/98 THROUGH 6/30/98 3-MONTH 90-DAY COMMERCIAL TREASURY BILL PAPER 1/1/98 5.35% 5.54% 1/2/98 5.29% 5.54% 1/5/98 5.23% 5.56% 1/6/98 5.20% 5.47% 1/7/98 5.20% 5.45% 1/8/98 5.10% 5.44% 1/9/98 5.01% 5.42% 1/12/98 5.02% 5.36% 1/13/98 5.19% 5.38% 1/14/98 5.15% 5.37% 1/15/98 5.11% 5.37% 1/16/98 5.15% 5.41% 1/19/98 5.15% 5.41% 1/20/98 5.15% 5.41% 1/21/98 5.11% 5.39% 1/22/98 5.13% 5.40% 1/23/98 5.17% 5.40% 1/26/98 5.12% 5.40% 1/27/98 5.25% 5.40% 1/28/98 5.21% 5.39% 1/29/98 5.19% 5.40% 1/30/98 5.18% 5.42% 2/2/98 5.22% 5.40% 2/3/98 5.23% 5.40% 2/4/98 5.11% 5.42% 2/5/98 5.15% 5.38% 2/6/98 5.17% 5.43% 2/9/98 5.13% 5.41% 2/10/98 5.21% 5.42% 2/11/98 5.20% 5.42% 2/12/98 5.21% 5.43% 2/13/98 5.15% 5.39% 2/16/98 5.21% 5.39% 2/17/98 5.18% 5.40% 2/18/98 5.17% 5.41% 2/19/98 5.19% 5.43% 2/20/98 5.20% 5.44% 2/23/98 5.24% 5.43% 2/24/98 5.32% 5.44% 2/25/98 5.30% 5.42% 2/26/98 5.34% 5.45% 2/27/98 5.31% 5.48% 3/2/98 5.30% 5.42% 3/3/98 5.17% 5.45% 3/4/98 5.15% 5.47% 3/5/98 5.16% 5.47% 3/6/98 5.15% 5.47% 3/9/98 5.09% 5.49% 3/10/98 5.08% 5.47% 3/11/98 5.08% 5.45% 3/12/98 5.08% 5.46% 3/13/98 5.09% 5.48% 3/16/98 5.10% 5.49% 3/17/98 5.14% 5.45% 3/18/98 5.15% 5.46% 3/19/98 5.17% 5.46% 3/20/98 5.17% 5.46% 3/23/98 5.14% 5.45% 3/24/98 5.14% 5.47% 3/25/98 5.17% 5.45% 3/26/98 5.20% 5.45% 3/27/98 5.21% 5.46% 3/30/98 5.21% 5.44% 3/31/98 5.12% 5.47% 4/1/98 5.11% 5.46% 4/2/98 5.09% 5.48% 4/3/98 5.08% 5.47% 4/6/98 5.08% 5.45% 4/7/98 5.04% 5.46% 4/8/98 5.05% 5.45% 4/9/98 5.05% 5.46% 4/10/98 5.05% 5.46% 4/13/98 5.16% 5.43% 4/14/98 5.11% 5.46% 4/15/98 5.07% 5.46% 4/16/98 5.05% 5.47% 4/17/98 5.04% 5.45% 4/20/98 5.02% 5.47% 4/21/98 5.07% 5.44% 4/22/98 5.08% 5.46% 4/23/98 5.08% 5.44% 4/24/98 5.06% 5.45% 4/27/98 5.05% 5.51% 4/28/98 5.06% 5.49% 4/29/98 5.06% 5.49% 4/30/98 4.97% 5.49% 5/1/98 5.00% 5.46% 5/4/98 5.02% 5.47% 5/5/98 5.11% 5.46% 5/6/98 5.10% 5.49% 5/7/98 5.10% 5.46% 5/8/98 5.12% 5.47% 5/11/98 5.12% 5.48% 5/12/98 5.13% 5.47% 5/13/98 5.12% 5.48% 5/14/98 5.16% 5.49% 5/15/98 5.16% 5.49% 5/18/98 5.17% 5.50% 5/19/98 5.20% 5.50% 5/20/98 5.18% 5.48% 5/21/98 5.23% 5.48% 5/22/98 5.21% 5.48% 5/25/98 5.21% 5.48% 5/26/98 5.10% 5.48% 5/27/98 5.09% 5.49% 5/28/98 5.05% 5.48% 5/29/98 5.01% 5.47% 6/1/98 4.97% 5.49% 6/2/98 5.20% 5.46% 6/3/98 5.11% 5.48% 6/4/98 5.11% 5.48% 6/5/98 5.11% 5.48% 6/8/98 5.12% 5.49% 6/9/98 5.14% 5.48% 6/10/98 5.13% 5.49% 6/11/98 5.09% 5.48% 6/12/98 5.11% 5.49% 6/15/98 5.11% 5.47% 6/16/98 5.16% 5.47% 6/17/98 5.21% 5.48% 6/18/98 5.18% 5.49% 6/19/98 5.15% 5.48% 6/22/98 5.12% 5.49% 6/23/98 5.07% 5.48% 6/24/98 5.04% 5.50% 6/25/98 5.00% 5.48% 6/26/98 4.99% 5.49% 6/29/98 5.00% 5.50% 6/30/98 4.99% 5.47%
The combination of strong first-quarter growth and tight labor markets, offset by continued low inflation and uncertainty regarding Asia, resulted in a relatively calm short-term interest rate environment with no clear direction over the period. 5 MARKET OVERVIEW (continued) SHORT-TERM MUNICIPAL RATES SHORT-TERM MUNICIPAL COMMERCIAL PAPER RATES exhibited a pattern similar to those of taxable commercial paper yields, demonstrating relatively minimal volatility and no clear direction during the period. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
90-DAY MUNICIPAL COMMERCIAL PAPER YIELD 1/7/98 3.50% 1/14/98 3.40% 1/21/98 3.50% 1/28/98 3.55% 2/4/98 3.45% 2/11/98 3.25% 2/18/98 3.40% 2/25/98 3.45% 3/4/98 3.40% 3/11/98 3.35% 3/18/98 3.50% 3/25/98 3.60% 4/1/98 3.60% 4/8/98 3.60% 4/15/98 3.70% 4/22/98 3.80% 4/29/98 3.70% 5/6/98 3.75% 5/13/98 3.70% 5/20/98 3.70% 5/27/98 3.65% 6/3/98 3.60% 6/10/98 3.60% 6/17/98 3.55% 6/24/98 3.55% 7/1/98 3.40%
As Federal Reserve Chairman Alan Greenspan said in his February congressional testimony, "The key question going forward is whether the restraint building from the turmoil in Asia will be sufficient to check inflationary tendencies that might otherwise result from the strength of domestic spending and tightening labor markets." Although many economists believe that the Federal Reserve has a longer-term bias toward more-restrictive monetary policy, they also anticipate a slowing of the GDP growth rate for the remainder of the year. Therefore, they do not expect that the Federal Reserve will, over the near term, implement any restrictive policy changes (increases to the federal funds rate) unless more-meaningful signs of inflation appear. Since the last federal funds rate increase to 5.5% in March 1997, the rate of inflation--as measured by the year-over-year change in the CPI--has dropped from 2.8% to 1.7%. Thus the real (inflation-adjusted) federal funds rate has increased from 2.7% in March 1997 to 3.8% in June 1998. In his June 1998 testimony to Congress, Chairman Greenspan commented on the following statement by Senator Paul S. Sarbanes: "By holding the federal funds rate constant at a time when inflation has been dropping, in effect the Federal Reserve has raised real interest rates. Monetary policy has tightened even though you have not raised the rate." Chairman Greenspan's response: "That is correct." NOTE: THIS MARKET OVERVIEW HAS BEEN PROVIDED BY THE PORTFOLIO MANAGEMENT TEAM. 6 PORTFOLIO MANAGEMENT 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 April 1992, when he joined CSIM; the Schwab Pennsylvania Municipal Money Fund since its inception in February 1998; and the Schwab Florida Municipal Money Fund since its inception in March 1998. Walter also managed the Schwab California Municipal Money Fund from April 1992 through November 1997 and the Schwab New York Municipal Money Fund from its inception in February 1995 through November 1997. Prior to joining CSIM, Walter was Portfolio Manager for the Benham Group. CHARLES SOULIS, Portfolio Manager, has managed the Schwab California Municipal Money Fund and the Schwab New York Municipal Money Fund since he joined CSIM in December 1997, and the Schwab New Jersey Municipal Money Fund since its inception in February 1998. Prior to joining CSIM, Charles was Portfolio Manager for Wells Capital Management. 7 SCHWAB MUNICIPAL MONEY FUND FUND PERFORMANCE AND PORTFOLIO COMPOSITION YIELD SUMMARY AS OF 6/30/98(1)
Sweep Value Advantage Shares-TM- Shares-TM- - --------------------------------------------------------------------------------------------- Seven-Day Yield 2.95% 3.16% - --------------------------------------------------------------------------------------------- Seven-Day Effective Yield 2.99% 3.21% - --------------------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield(2) 4.96% 5.32% - ---------------------------------------------------------------------------------------------
Please remember that money market fund yields fluctuate and that past performance is no guarantee of future results. THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS If you're in a high tax bracket, the federal tax-exempt income paid by the Schwab Municipal Money Fund may provide you with higher yields than those of taxable money funds on a taxable-equivalent basis.(3) The figures below illustrate the yield differential on a taxable-equivalent basis of both classes of the Fund's shares compared with the average seven-day effective yield as of 6/30/98 for first-tier taxable money funds of 5.06%(4):
Sweep Shares Value Advantage Shares - --------------------------------------------------------------------------------------------- Yield differential over average taxable money fund: (0.10%) 0.26% - ---------------------------------------------------------------------------------------------
Represents seven-day period ended 6/30/98. This relationship was not consistent throughout the reporting period. (1)A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 6/30/98, the seven-day, seven-day effective and seven-day taxable-equivalent yields would have been 2.73%, 2.77% and 4.59%, respectively, for the Sweep Shares, and 2.93%, 2.97% and 4.92%, respectively, for the Value Advantage Shares. (2)Taxable-equivalent effective yield assumes a 1998 maximum federal income tax rate of 39.60%. (3)Income may be subject to state and local taxes and the alternative minimum tax (AMT). (4)Source: IBC Financial Data, Inc.'s weekly average seven-day effective yield for the 286 funds in the first-tier category of taxable money funds, as of 6/30/98. Past performance is no guarantee of future results. (5)These percentages do not take into account other assets and liabilities. PORTFOLIO COMPOSITION The Schwab Municipal Money Fund invests in a diversified portfolio of high-quality, short-term municipal securities issued by or on behalf of a state, including its counties, municipalities and other subdivisions, or the territories and possessions of the United States and the District of Columbia, including their political subdivisions, agencies and instrumentalities. The chart at the right illustrates the composition of the Fund's portfolio as of 6/30/98 and is not indicative of its holdings after that date. A complete list of the securities in the Fund's portfolio as of 6/30/98 is provided in the Statement of Net Assets later in this report. PORTFOLIO COMPOSITION AS A PERCENTAGE OF FUND INVESTMENTS(5) as of 6/30/98 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Variable-Rate Obligations 62.5% Tax-Exempt Commercial Paper 10.2% Anticipation Notes 8.7% Variable and Fixed-Rate Tender Option Bonds 5.9% Mandatory Put Bonds 5.6% Revenue Bonds 4.5% General Obligations 1.3% Optional Put Bonds 1.2% Certificates of Participation 0.1%
8 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND FUND PERFORMANCE AND PORTFOLIO COMPOSITION YIELD SUMMARY AS OF 6/30/98(1)
Sweep Value Advantage Shares-TM- Shares-TM- - --------------------------------------------------------------------------------------------- Seven-Day Yield 2.77% 2.97% - --------------------------------------------------------------------------------------------- Seven-Day Effective Yield 2.81% 3.01% - --------------------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield(2) 5.13% 5.50% - ---------------------------------------------------------------------------------------------
Please remember that money market fund yields fluctuate and that past performance is no guarantee of future results. THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS If you're in a high tax bracket, the federal and California state tax-exempt income paid by the Schwab California Municipal Money Fund may provide you with higher yields than those of taxable money funds on a taxable-equivalent basis.(3) The figures below illustrate the yield advantage on a taxable-equivalent basis of both classes of these shares compared with the average seven-day effective yield as of 6/30/98 for first-tier taxable money funds of 5.06%(4):
Sweep Shares Value Advantage Shares - --------------------------------------------------------------------------------------------- Yield advantage over average taxable money fund: 0.07% 0.44% - ---------------------------------------------------------------------------------------------
Represents seven-day period ended 6/30/98. This relationship was not consistent throughout the reporting period. (1)A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 6/30/98, the seven-day, seven-day effective and seven-day taxable-equivalent yields would have been 2.53%, 2.56% and 4.67%, respectively, for the Sweep Shares, and 2.73%, 2.77% and 5.06%, respectively, for the Value Advantage Shares. (2)Taxable-equivalent effective yield assumes a 1998 maximum combined federal regular income tax and California state personal income tax rate of 45.22%. (3)Income may be subject to the alternative minimum tax (AMT). (4)Source: IBC Financial Data, Inc.'s weekly average seven-day effective yield for the 286 funds in the first-tier category of taxable money funds, as of 6/30/98. Past performance is no guarantee of future results. (5)These percentages do not take into account other assets and liabilities. PORTFOLIO COMPOSITION The Schwab California Municipal Money Fund invests in a portfolio of high-quality, short-term municipal securities issued by the State of California, including its counties, municipalities and other subdivisions. The chart at right illustrates the composition of the Fund's portfolio as of 6/30/98 and is not indicative of its holdings after that date. A complete list of the securities in the Fund's portfolio as of 6/30/98 is provided in the Statement of Net Assets later in this report. PORTFOLIO COMPOSITION AS A PERCENTAGE OF FUND INVESTMENTS(5) as of 6/30/98 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Variable-Rate Obligations 54.9% Tax-Exempt Commercial Paper 24.8% Anticipation Notes 11.4% Variable and Fixed-Rate Tender Option Bonds 4.8% Mandatory Put Bonds 1.8% Revenue Bonds 1.1% General Obligations 1.1% Certificates of Participation 0.1%
9 SCHWAB NEW YORK MUNICIPAL MONEY FUND FUND PERFORMANCE AND PORTFOLIO COMPOSITION YIELD SUMMARY AS OF 6/30/98(1)
Sweep Value Advantage Shares-TM- Shares-TM- - --------------------------------------------------------------------------------------------- Seven-Day Yield 2.86% 3.10% - --------------------------------------------------------------------------------------------- Seven-Day Effective Yield 2.90% 3.15% - --------------------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield(2) 5.42% 5.88% - ---------------------------------------------------------------------------------------------
Please remember that money market fund yields fluctuate and that past performance is no guarantee of future results. THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS If you're in a high tax bracket, the federal, New York state and New York local tax-exempt income paid by the Schwab New York Municipal Money Fund may provide you with higher yields than those of taxable money funds on a taxable-equivalent basis.(3) The figures below illustrate the yield advantage on a taxable-equivalent basis of both classes of the Fund's shares compared with the average seven-day effective yield as of 6/30/98 for first-tier taxable money funds of 5.06%(4):
Sweep Shares Value Advantage Shares - --------------------------------------------------------------------------------------------- Yield advantage over average taxable money fund: 0.36% 0.82% - ---------------------------------------------------------------------------------------------
Represents seven-day period ended 6/30/98. This relationship was not consistent throughout the reporting period. (1)A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 6/30/98, the seven-day, seven-day effective and seven-day taxable-equivalent yields would have been 2.57%, 2.60% and 4.85%, respectively, for the Sweep Shares, and 2.76%, 2.80% and 5.23%, respectively, for the Value Advantage Shares. (2)Taxable equivalent effective yield assumes a 1998 maximum combined federal income tax and New York state and New York City personal income tax rate of 46.43%. (3)Income may be subject to the alternative minimum tax (AMT). (4)Source: IBC Financial Data, Inc.'s weekly average seven-day effective yield for the 286 funds in the first-tier category of taxable money funds, as of 6/30/98. Past performance is no guarantee of future results. (5)These percentages do not take into account other assets and liabilities. PORTFOLIO COMPOSITION The Schwab New York Municipal Money Fund invests in a portfolio of high-quality, short-term municipal securities issued by the State of New York, including its counties, municipalities and other subdivisions. The chart at right illustrates the composition of the Fund's portfolio as of 6/30/98 and is not indicative of its holdings after that date. A complete list of the securities in the Fund's portfolio as of 6/30/98 is provided in the Statement of Net Assets later in this report. PORTFOLIO COMPOSITION AS A PERCENTAGE OF FUND INVESTMENTS(5) as of 6/30/98 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Variable-Rate Obligations 49.4% Tax-Exempt Commercial Paper 21.7% Anticipation Notes 15.6% Variable-Rate Tender Option Bonds 10.7% Revenue Bonds 1.4% General Obligations 1.2%
10 SCHWAB NEW JERSEY MUNICIPAL MONEY FUND FUND PERFORMANCE AND PORTFOLIO COMPOSITION YIELD SUMMARY AS OF 6/30/98(1)
Sweep Shares-TM- - ---------------------------------------------------------------------------------------------- Seven-Day Yield 2.89% - ---------------------------------------------------------------------------------------------- Seven-Day Effective Yield 2.93% - ---------------------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield(2) 5.18% - ----------------------------------------------------------------------------------------------
Please remember that money market fund yields fluctuate and that past performance is no guarantee of future results. THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS If you're in a high tax bracket, the federal and New Jersey state tax-exempt income paid by the Schwab New Jersey Municipal Money Fund may provide you with higher yields than those of taxable money funds on a taxable-equivalent basis.(3) The figures below illustrate the yield advantage on a taxable-equivalent basis of the Fund's shares compared with the average seven-day effective yield as of 6/30/98 for first-tier taxable money funds of 5.06%(4):
Sweep Shares - ---------------------------------------------------------------------------------------------- Yield advantage over average taxable money fund: 0.12% - ----------------------------------------------------------------------------------------------
Represents seven-day period ended 6/30/98. This relationship was not consistent throughout the reporting period. (1)A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 6/30/98, the seven-day, seven-day effective and seven-day taxable-equivalent yields would have been 2.37%, 2.40% and 4.24%, respectively, for the Sweep Shares. (2)Taxable-equivalent effective yield assumes a 1998 maximum combined federal regular income tax and New Jersey personal income tax rate of 43.45%. (3)Income may be subject to the alternative minimum tax (AMT). (4)Source: IBC Financial Data, Inc.'s weekly average seven-day effective yield for the 286 funds in the first-tier category of taxable money funds, as of 6/30/98. Past performance is no guarantee of future results. (5)These percentages do not take into account other assets and liabilities. PORTFOLIO COMPOSITION The Schwab New Jersey Municipal Money Fund invests in a portfolio of high-quality, short-term municipal securities issued by the State of New Jersey, including its counties, municipalities and other subdivisions. The chart at right illustrates the composition of the Fund's portfolio as of 6/30/98 and is not indicative of its holdings after that date. A complete list of the securities in the Fund's portfolio as of 6/30/98 is provided in the Statement of Net Assets later in this report. PORTFOLIO COMPOSITION AS A PERCENTAGE OF FUND INVESTMENTS(5) as of 6/30/98 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Variable-Rate Obligations 39.2% Anticipation Notes 20.2% Revenue Bonds 13.6% Variable-Rate Tender Option Bonds 11.1% Tax-Exempt Commercial Paper 6.3% Mandatory Put Bonds 4.7% General Obligations 4.4% Certificates of Participation 0.5%
11 SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND FUND PERFORMANCE AND PORTFOLIO COMPOSITION YIELD SUMMARY AS OF 6/30/98(1)
Sweep Shares-TM- - ---------------------------------------------------------------------------------------------- Seven-Day Yield 2.99% - ---------------------------------------------------------------------------------------------- Seven-Day Effective Yield 3.03% - ---------------------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield(2) 5.16% - ----------------------------------------------------------------------------------------------
Please remember that money market fund yields fluctuate and that past performance is no guarantee of future results. THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS If you're in a high tax bracket, the federal and Pennsylvania state tax-exempt income paid by the Schwab Pennsylvania Municipal Money Fund may provide you with higher yields than those of taxable money funds on a taxable-equivalent basis.(3) The figures below illustrate the yield advantage on a taxable- equivalent basis of the Fund's shares compared with the average seven-day effective yield as of 6/30/98 for first-tier taxable money funds of 5.06%(4):
Sweep Shares - ---------------------------------------------------------------------------------------------- Yield advantage over average taxable money fund: 0.10% - ----------------------------------------------------------------------------------------------
Represents seven-day period ended 6/30/98. This relationship was not consistent throughout the reporting period. (1)A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 6/30/98, the seven-day, seven-day effective and seven-day taxable-equivalent yields would have been 2.43%, 2.46% and 4.19%, respectively, for the Sweep Shares. (2)Taxable-equivalent effective yield assumes a 1998 maximum combined federal income tax and Pennsylvania personal income tax rate of 41.29%. (3)Income may be subject to the alternative minimum tax (AMT). (4)Source: IBC Financial Data, Inc.'s weekly average seven-day effective yield for the 286 funds in the first-tier category of taxable money funds, as of 6/30/98. Past performance is no guarantee of future results. (5)These percentages do not take into account other assets and liabilities. PORTFOLIO COMPOSITION The Schwab Pennsylvania Municipal Money Fund invests in a portfolio of high-quality, short-term municipal securities issued by the Commonwealth of Pennsylvania, including its counties, municipalities and other subdivisions. The chart at right illustrates the composition of the Fund's portfolio as of 6/30/98 and is not indicative of its holdings after that date. A complete list of the securities in the Fund's portfolio as of 6/30/98 is provided in the Statement of Net Assets later in this report. PORTFOLIO COMPOSITION AS A PERCENTAGE OF FUND INVESTMENTS(5) as of 6/30/98 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Variable-Rate Obligations 57.8% Revenue Bonds 13.6% Variable-Rate Tender Option Bonds 11.4% General Obligations 5.3% Tax-Exempt Commercial Paper 5.1% Tax and Revenue Anticipation Notes 5.0% Certificates of Participation 1.5% Option Put Bonds 0.3%
12 SCHWAB FLORIDA MUNICIPAL MONEY FUND FUND PERFORMANCE AND PORTFOLIO COMPOSITION YIELD SUMMARY AS OF 6/30/98(1)
Sweep Shares - ----------------------------------------------------------------------------------------------- Seven-Day Yield 3.02% - ----------------------------------------------------------------------------------------------- Seven-Day Effective Yield 3.07% - ----------------------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield(2) 5.07% - -----------------------------------------------------------------------------------------------
Please remember that money market fund yields fluctuate and that past performance is no guarantee of future results. THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS If you're in a high tax bracket, the tax-exempt income paid by the Schwab Florida Municipal Money Fund may provide you with higher yields than those of taxable money funds on a taxable-equivalent basis.(3) The figures below illustrate the yield advantage on a taxable-equivalent basis of the Fund's shares compared with the average seven-day effective yield as of 6/30/98 for first-tier taxable money funds of 5.06%(4). The Fund also seeks to invest so that its shares are exempt from the Florida intangible tax.
Sweep Shares - ----------------------------------------------------------------------------------------------- Yield advantage over average taxable money fund: 0.01% - -----------------------------------------------------------------------------------------------
Represents seven-day period ended 6/30/98. This relationship was not consistent throughout the reporting period. (1)A portion of the Fund's expenses were reduced during the reporting period. Without these reductions, as of 6/30/98, the seven-day, seven-day effective and seven-day taxable-equivalent yields would have been 2.57%, 2.60% and 4.30%, respectively, for the Sweep Shares. (2)Taxable-equivalent effective yield assumes a 1998 maximum federal income tax rate of 39.6%. (3)Income may be subject to the alternative minimum tax (AMT). (4)Source: IBC Financial Data, Inc.'s weekly average seven-day effective yield for the 286 funds in the first-tier category of taxable money funds, as of 6/30/98. Past performance is no guarantee of future results. (5)These percentages do not take into account other assets and liabilities. PORTFOLIO COMPOSITION The Schwab Florida Municipal Money Fund invests in a portfolio of high-quality, short-term municipal securities issued by the State of Florida, including its counties, municipalities and other subdivisions. The chart at right illustrates the composition of the Fund's portfolio as of 6/30/98, and is not indicative of its holdings after that date. A complete list of the securities in the Fund's portfolio as of 6/30/98, is provided in the Statement of Net Assets later in this report. PORTFOLIO COMPOSITION AS A PERCENTAGE OF FUND INVESTMENTS(5) as of 6/30/98 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Variable-Rate Obligations 60.6% Variable-Rate Tender Option Bonds 13.7% Anticipation Notes 11.9% Revenue Bonds 5.6% Tax-Exempt Commercial Paper 3.6% General Obligation Bonds 3.5% Mandatory Put Bonds 0.8% Special Assessment Bonds 0.3%
13 FUND DISCUSSION QUESTIONS TO THE PORTFOLIO MANAGEMENT TEAM Q. HOW HAS THE PORTFOLIO MANAGEMENT TEAM ADJUSTED EACH FUND'S PORTFOLIO TO RESPOND TO THE INTEREST RATE ENVIRONMENT? A. We managed the dollar-weighted average maturity (DWAM) for the portfolios of all six Funds to capitalize on the seasonal cycles typical of short-term municipal securities markets. In anticipation of lower rates for demand notes issued in early 1998, the portfolio managers took the opportunity to extend the maturities of the Funds at the end of December 1997. This allowed the Funds to lock in higher rates and to be insulated from the lower rates typical of notes issued in January. Due to the relatively stable interest rate and supply/demand environment in the municipal securities market throughout much of the reporting period, the Funds maintained a somewhat neutral strategy, with DWAMs comparable to those of other funds with similar investment objectives. The following table shows the DWAM for each Fund at the beginning and end of the reporting period (or since a Fund's inception, if less than six months old).
CALIFORNIA NEW YORK MUNICIPAL MUNICIPAL MUNICIPAL MONEY FUND MONEY FUND MONEY FUND - ---------------------------------------------------------------------------------- 12/31/97 48 days 51 days 63 days - ---------------------------------------------------------------------------------- 6/30/98 56 days 44 days 35 days - ---------------------------------------------------------------------------------- NEW JERSEY PENNSYLVANIA FLORIDA MUNICIPAL MUNICIPAL MUNICIPAL MONEY FUND MONEY FUND MONEY FUND - ---------------------------------------------------------------------------------- At inception* 49 days 43 days 27 days - ---------------------------------------------------------------------------------- 6/30/98 42 days 60 days 52 days - ----------------------------------------------------------------------------------
*Inception for the New Jersey and Pennsylvania Funds was 2/2/98. The inception date for the Florida Fund was 3/18/98. 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 economies experienced economic problems and severe currency devaluations--collectively referred to as the "Asian Flu." These problems are expected by many to continue through 1998. Although it is a serious global problem that 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. As we have discussed in previous reports, all of the 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 14 creditworthiness. During the reporting period, the Schwab Municipal Money Funds reduced their exposure to Japanese issuers of credit enhancements. The following table shows the Funds' holdings of securities with Japanese credit enhancements as of June 30, 1998 (expressed as a percentage of each Fund's net assets). As part of our regular credit review process, we continuously monitor the credit quality of both the enhancement providers and the issuers of the Funds' portfolio securities. - ------------------------------------------------- Schwab Municipal Money Fund 0.17% - ------------------------------------------------- Schwab California Municipal Money Fund 1.62% - ------------------------------------------------- Schwab New York Municipal Money Fund 2.50% - ------------------------------------------------- Schwab New Jersey Municipal Money Fund 0.00% - ------------------------------------------------- Schwab Pennsylvania Municipal Money Fund 0.00% - ------------------------------------------------- Schwab Florida Municipal Money Fund 0.00% - -------------------------------------------------
EACH OF THE FOLLOWING QUESTIONS IS SPECIFIC TO A SINGLE-STATE FUND: CALIFORNIA MUNICIPAL MONEY FUND Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN CALIFORNIA? A. California is 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 for the unemployment rate. Looking forward, it is anticipated that California will see continued moderate growth across most industry sectors, with some growing at a much slower pace, such as those heavily dependent on exporting goods and services to Asia. As noted in the Governor's 1998/99 Budget Proposal, the effect on California of the economic weakness in Asia is expected to be somewhat offset by the effects of California's strong export growth to Mexico and increasing exports to Europe. The continued economic improvement in the state has allowed for a buildup of budget reserves and an easing of some of the spending restrictions imposed during the last recession. At the end of the 1997/98 budget year, the state had a budget surplus of approximately $1 billion. While the budget surplus was a welcomed event, it has delayed the adoption of the final 1998/99 budget as lawmakers try to reach a consensus on how to handle the surplus. Even after the final 1998/99 budget is adopted, 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. As a result, 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 closely monitor the state's economic situation. 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. 15 FUND DISCUSSION (continued) NEW YORK MUNICIPAL MONEY FUND 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 continue to support New York State's satisfactory credit quality. The state entered the 1990 recession earlier than others, and its recovery has been slower and less robust. For the 1997/98 fiscal year, the state predicted a 1.4% increase in employment, which marked 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 and relocation and cutbacks in defense spending. In spite of budgetary surpluses in five of the past six years, New York still faces the challenge of resolving longstanding general fund imbalances. The 1999 budget, adopted in May 1998 with a focus on educational spending, maintained previously enacted tax reductions. As in prior years, spending is projected to be higher, with economic growth covering the 7% increase in expenditures. Therefore, although 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. Further, while the state's economic projections are reasonable and in line with those of independent institutions, much of the growth is reliant on continued strength in the financial services sector. This reliance is viewed as a potential weakness given the uncertainty of the financial services sector's ability to perform as strongly as it has over the past three years. 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. NEW JERSEY MUNICIPAL MONEY FUND Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN NEW JERSEY? A. New Jersey's above-average credit quality is derived from its diversified economy, high personal income levels (second only to Connecticut) and strong control of its finances. Just like much of the Northeast region, New Jersey was severely impacted by the recession of the early 1990s. Recovery came slowly, with annual increases in non-farm employment from 1991 to 1996 registering less than half the national rate. A spike in job growth in 1997 finally returned the state to its pre-recession level of total employment. Continued economic growth may, however, be constrained by ongoing structural changes in the economy, such as corporate downsizing and relocation. Over the past few years, increasing tax revenues, use of non recurring financial resources and spending controls have resulted in excess revenues or lower expenses that provided the state a financial cushion equal to approximately 6% of its annual expenditures. The state's 1999 budget was adopted on June 30, 1998, and generally follows the track of prior years with no new taxes and a focus on educational and environmental spending. As in prior years, higher spending is expected to be offset by a 4.2% increase in total 16 revenue. Therefore, although 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. Further, while the state's economic projections are reasonable and in line with those of independent institutions, much of the growth is reliant on continued strength in the financial services sector. This reliance is viewed as a potential weakness given the uncertainty of the financial services sector's ability to perform as strongly as it has over the past three years. We are satisfied that the New Jersey securities held by the Fund represent minimal credit risk and we will continue to monitor the state's economic situation closely. New Jersey's current credit ratings are Aa1 from Moody's Investor Service, AA+ from Standard & Poor's Corporation and AA+ from Fitch IBCA, Inc., three well-known rating agencies. PENNSYLVANIA MUNICIPAL MONEY FUND Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN PENNSYLVANIA? A. Pennsylvania's above-average credit quality is derived from its conservative financial management, slow-but-improving job growth, economic diversification and moderate debt levels. Just like much of the region, Pennsylvania was severely impacted by the recession of the early 1990s. Recovery came slowly, with annual increases in non-farm employment from 1991 to 1996 registering less than half the national rate. This slow-but-steady pace of job growth from 1991 to 1996 coupled with a somewhat higher rate in 1997 brought the state's total employment to 7% above the prerecession peak. Continued economic growth may, however, be constrained by ongoing structural changes in the economy, especially in the manufacturing sector. In each of the past six years, Pennsylvania has generated operating surpluses. This has allowed the state to make contributions to its budget reserve, which now totals more than $400 million, or approximately 2.4% of 1998 revenues. The state's 1999 budget was adopted prior to the start of its new fiscal year on July 1, 1997. It generally follows the governor's proposal of additional tax relief for both corporations and individuals and, as expected, uses most of the accumulated general fund surplus. Given its historically conservative revenue growth projections, the state is not expected to make a significant draw on its reserves in fiscal 1999. However, it is possible that future economic growth will be slower than projected and cause budgetary constraints leading to spending reductions and possible depletions of accumulated reserves. We are satisfied that the Pennsylvania securities held by the Fund represent minimal credit risk and we will continue to monitor the state's economic situation closely. Pennsylvania's current credit ratings are Aa3 from Moody's Investor Service, AA- from Standard & Poor's Corporation and AA from Fitch IBCA, Inc., three well-known rating agencies. FLORIDA MUNICIPAL MONEY FUND Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN FLORIDA? A. Sustained rapid growth has helped Florida become the fourth-largest state in the nation. The state continues to see its economy diversify into trade, services, finance and exports, greatly reducing its 17 FUND DISCUSSION (continued) previous dependence on agriculture and tourism. This economic diversification, along with moderate debt levels and successful financial operations, has contributed to Florida's above-average credit quality. As the state has grown, it has successfully met the challenges of funding the growth and maintaining a balanced budget during periods of economic weakness using a combination of budgetary control and management restraint. With sales tax revenues accounting for approximately 70% of total revenues, Florida has taken steps to increase its financial reserves by adding the Budget Stabilization Fund. In fact, through the end of fiscal 1997, this fund has grown to about 2.8% of general fund revenues and seems to be on track to reach the state's goal of 5% by the end of 1999. Because of the state's significant dependence on sales tax revenues, which are inherently volatile, however, it may not reach its reserve goal even with continued growth in the economy. We are satisfied that the Florida securities held by the Fund represent minimal credit risk and we will continue to monitor the state's economic situation closely. Florida's current credit ratings are Aa2 from Moody's Investor Service, AA+ from Standard & Poor's Corporation and AA from Fitch IBCA, Inc., three well-known rating agencies. 18 GLOSSARY OF TERMS ALTERNATIVE MINIMUM TAX (AMT)--A federal tax on income, in addition to regular income taxes, designed to ensure that corporations and very wealthy individuals pay at least some income tax each year. 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 strength 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, which establishes policies on bank reserves and regulations, determines the discount rate and the federal funds rate, and tightens or loosens the availability of credit. FIRST-TIER SECURITY--A security rated in the highest credit-rating category by a requisite number of nationally recognized statistical rating organizations such as Moody's, Standard & Poor's-Registered Trademark-, Duff or Fitch. 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--adjusted for the rate of inflation to allow meaningful year-to-year comparisons. TAXABLE-EQUIVALENT YIELD--The return an individual would have to realize on a fully taxable investment in order to equal a specified tax-exempt yield; this hypothetical yield varies according to an individual's income-tax bracket. YIELD--The actual annualized income earned on an investment over a stated period of time (assumed to be generated over a one-year period). An EFFECTIVE YIELD assumes that the income earned is reinvested. 19 PORTFOLIO HIGHLIGHTS SCHWAB MUNICIPAL MONEY FUND AVERAGE YIELDS FOR THE SIX-MONTH PERIOD ENDED 6/30/98(1)
SWEEP VALUE ADVANTAGE SHARES-REGISTERED TRADEMARK- SHARES-REGISTERED TRADEMARK- - ------------------------------------------------------------------------------- Last seven days: 2.95% 3.16% - ------------------------------------------------------------------------------- Last three months: 3.17% 3.38% - ------------------------------------------------------------------------------- Last 12 months: 3.05% 3.26% - -------------------------------------------------------------------------------
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
MATURITY RANGE 3/31/98 6/30/98 - ----------------------------------------------------- 0-15 days 76.1% 74.6% - ----------------------------------------------------- 16-30 days 0.0% 2.0% - ----------------------------------------------------- 31-60 days 4.7% 4.5% - ----------------------------------------------------- 61-90 days 5.9% 1.1% - ----------------------------------------------------- 91-120 days 4.7% 1.8% - ----------------------------------------------------- More than 120 days 8.6% 16.0% - ----------------------------------------------------- Weighted average 35 days 56 days - -----------------------------------------------------
(1)A portion of the Fund's expenses was reduced during the periods. Had these expenses not been reduced, yields would have been lower. SCHWAB CALIFORNIA MUNICIPAL MONEY FUND AVERAGE YIELDS FOR THE SIX-MONTH PERIOD ENDED 6/30/98(1)
SWEEP VALUE ADVANTAGE SHARES SHARES - ----------------------------------------------------- Last seven days: 2.77% 2.97% - ----------------------------------------------------- Last three months: 3.01% 3.21% - ----------------------------------------------------- Last 12 months: 2.87% 3.07% - -----------------------------------------------------
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
MATURITY RANGE 3/31/98 6/30/98 - ----------------------------------------------------- 0-15 days 67.9% 66.2% - ----------------------------------------------------- 16-30 days 2.4% 5.5% - ----------------------------------------------------- 31-60 days 3.7% 12.7% - ----------------------------------------------------- 61-90 days 6.3% 3.3% - ----------------------------------------------------- 91-120 days 14.1% 3.8% - ----------------------------------------------------- More than 120 days 5.6% 8.5% - ----------------------------------------------------- Weighted average 37 days 44 days - -----------------------------------------------------
20 PORTFOLIO HIGHLIGHTS SCHWAB NEW YORK MUNICIPAL MONEY FUND AVERAGE YIELDS FOR THE SIX-MONTH PERIOD ENDED 6/30/98(1)
SWEEP VALUE ADVANTAGE SHARES-REGISTERED TRADEMARK- SHARES-REGISTERED TRADEMARK- - ------------------------------------------------------------------------------- Last seven days: 2.86% 3.10% - ------------------------------------------------------------------------------- Last three months: 3.07% 3.31% - ------------------------------------------------------------------------------- Last 12 months: 2.93% 3.17% - -------------------------------------------------------------------------------
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
MATURITY RANGE 3/31/98 6/30/98 - ---------------------------------------------------------- 0-15 days 72.4% 70.3% - ---------------------------------------------------------- 16-30 days 1.1% 1.2% - ---------------------------------------------------------- 31-60 days 3.6% 18.6% - ---------------------------------------------------------- 61-90 days 3.1% 2.8% - ---------------------------------------------------------- 91-120 days 6.5% 0.0% - ---------------------------------------------------------- More than 120 days 13.3% 7.1% - ---------------------------------------------------------- Weighted average 36 days 34 days - ----------------------------------------------------------
(1)A portion of the Fund's expenses was reduced during the periods. Had these expenses not been reduced, yields would have been lower. SCHWAB NEW JERSEY MUNICIPAL MONEY FUND AVERAGE YIELDS FOR THE SIX-MONTH PERIOD ENDED 6/30/98(1)
SWEEP SHARES - ----------------------------------------------------------- Last seven days: 2.89% - ----------------------------------------------------------- Last three months: 3.00% - -----------------------------------------------------------
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
MATURITY RANGE 3/31/98 6/30/98 - ---------------------------------------------------------- 0-15 days 51.8% 65.1% - ---------------------------------------------------------- 16-30 days 4.5% 4.3% - ---------------------------------------------------------- 31-60 days 4.3% 7.0% - ---------------------------------------------------------- 61-90 days 9.9% 8.5% - ---------------------------------------------------------- 91-120 days 13.5% 3.3% - ---------------------------------------------------------- More than 120 days 16.0% 11.8% - ---------------------------------------------------------- Weighted average 49 days 41 days - ----------------------------------------------------------
21 PORTFOLIO HIGHLIGHTS SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND AVERAGE YIELDS FOR THE SIX-MONTH PERIOD ENDED 6/30/98(1)
SWEEP SHARES-REGISTERED TRADEMARK- - ------------------------------------------------------------- Last seven days: 2.99% - ------------------------------------------------------------- Last three months: 2.58% - -------------------------------------------------------------
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
MATURITY RANGE 3/31/98 6/30/98 - ----------------------------------------------------- 0-15 days 70.4% 72.5% - ----------------------------------------------------- 16-30 days 29.0% 0.8% - ----------------------------------------------------- 31-60 days 0.0% 3.0% - ----------------------------------------------------- 61-90 days 4.7% 1.4% - ----------------------------------------------------- 91-120 days 1.8% 0.8% - ----------------------------------------------------- More than 120 days 20.2% 21.5% - ----------------------------------------------------- Weighted average 56 days 60 days - -----------------------------------------------------
(1)A portion of the Fund's expenses was reduced during the periods. Had these expenses not been reduced, yields would have been lower. SCHWAB FLORIDA MUNICIPAL MONEY FUND AVERAGE YIELDS FOR THE SIX-MONTH PERIOD ENDED 6/30/98(1)
SWEEP SHARES - ----------------------------------------- Last seven days: 3.02% - ----------------------------------------- Last three months: 3.24% - -----------------------------------------
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
MATURITY RANGE 3/31/98 6/30/98 - ----------------------------------------------------- 0-15 days 88.8% 75.9% - ----------------------------------------------------- 16-30 days 0.6% 2.6% - ----------------------------------------------------- 31-60 days 0.0% 0.0% - ----------------------------------------------------- 61-90 days 0.7% 2.7% - ----------------------------------------------------- 91-120 days 0.0% 2.8% - ----------------------------------------------------- More than 120 days 9.9% 16.0% - ----------------------------------------------------- Weighted average 27 days 52 days - -----------------------------------------------------
22 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) June 30, 1998 (Unaudited) Par Value ------- -------- VARIABLE RATE OBLIGATIONS -- 63.3% (a) ALABAMA -- 1.0% Alabama State IDA (Cash Value Project) / (Regions Bank LOC) 3.50%, 07/07/98 $ 3,150 $ 3,150 Birmingham, Alabama GO Series 1992A / (Regions Bank LOC) 3.55%, 07/07/98 5,600 5,600 Birmingham, Alabama Unlimited GO Refunding Bonds Series 1995 / (First Alabama Bank LOC) 3.50%, 07/07/98 4,000 4,000 Citronelle, Alabama IDB Pollution Control Revenue Refunding Bonds (AKZO Chemicals, Inc. Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 1,100 1,100 Decatur, Alabama IDB Solid Waste Disposal RB (Trico Steel Project) Series 1997 / (Chase Manhattan LOC) 3.65%, 07/07/98 5,700 5,700 Dothan, Alabama IDB RB (Baxley Blowpipe Project) / (Regions Bank LOC) 3.70%, 07/07/98 900 900 Mcintoch, Alabama IDB Solid Waste Bonds (Ciba-Geigy Corp. Project) / (Union Bank of Switzerland LOC) 3.60%, 07/07/98 24,500 24,500 Mobile County, Alabama IDB Pollution Control Revenue Refunding Bonds (Ultraform Co. Project) Series 1995A / (Bayerische Landesbank Girozentrale LOC) 3.63%, 07/07/98 7,480 7,480 Mobile County, Alabama IDB RB (Ultraform Co. Project) Series B / (Bayerische Landesbank Girozentrale LOC) 3.63%, 07/07/98 1,000 1,000 Montgomery, Alabama Special Care Facility Financing Authority RB (Baptist Medical Center VHA) Series 1985C / (AMBAC Insurance & Mellon Bank SBPA) 3.50%, 07/07/98 2,000 2,000 Par Value ------- -------- Scottsboro, Alabama GO Bonds / (Regions Bank LOC) 3.55%, 07/07/98 $ 5,000 $ 5,000 Tuscaloosa, Alabama IDRB (Knight Special Project) / (Regions Bank LOC) 3.70%, 07/07/98 1,200 1,200 -------- 61,630 -------- ALASKA -- 0.4% Alaska Industrial Development & Export Authority (Revolving Fund) Series 1996B / (Bank of America NT & SA LOC) 3.45%, 07/07/98 17,600 17,600 Valdez, Alaska Marine Terminal Revenue Refunding Bonds (Exxon Pipeline Co. Project) Series 1993A / (Exxon Corp. LOC) 3.70%, 07/01/98 800 800 Valdez, Alaska Marine Terminal Revenue Refunding Bonds (Exxon Pipeline Co. Project) Series 1993C / (Exxon Corp. LOC) 3.70%, 07/01/98 6,600 6,600 -------- 25,000 -------- ARIZONA -- 1.4% Arizona Educational Loan Marketing Corp. Education Loan RB Series A / (MBIA Insurance & State Street Bank & Trust LOC) 3.65%, 07/07/98 12,605 12,605 Arizona Health Facilities Authority Hospital System RB (Northern Arizona Health Care) Series 1996B / (MBIA Insurance) 3.55%, 07/07/98 17,650 17,650 Arizona Health Facilities Authority Revenue Adjustable Rate Notes (Arizona Volunteer Hospital Federation) Series 1985A / (FGIC Insurance) 3.55%, 07/07/98 3,170 3,170 Arizona Health Facilities Authority Revenue Adjustable Rate Notes (Arizona Volunteer Hospital Federation) Series 1985B / (FGIC Insurance) 3.55%, 07/07/98 7,940 7,940 23 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Arizona Health Facilities RB (Samcor Project) 1986 Loan Pool / (FGIC Insurance & Chase Manhattan SPA) 3.55%, 07/07/98 $10,540 $ 10,540 Phoenix, Arizona Civic Improvement Excise Tax RB (Airport Improvements) / (Landesbank Hessen-Thuringen Girozentrale LOC) 3.65%, 07/07/98 1,000 1,000 Phoenix, Arizona IDA M/F Housing RB (Crossroads Apartments) Series 1984 (FNMA LOC) 3.65%, 07/07/98 6,000 6,000 Phoenix, Arizona IDA RB (Vaw America Inc. Project) / (NationsBank NA South LOC) 3.75%, 07/07/98 3,000 3,000 Pima County, Arizona IDA M/F Housing RB (Housing Surgauro Crest Apartments) Series 1995A / (FNMA LOC) 3.65%, 07/07/98 6,000 6,000 Yavapai County, Arizona IDRB (Yavapai Regional Medical Center) / (Credit Local de France SBPA & FSA Insurance) 3.55%, 07/07/98 12,600 12,600 Yuma, Arizona IDA M/F Housing RB (El Encanto Apartments) Series A / (Citibank LOC) 3.60%, 07/07/98 2,915 2,915 Yuma County, Arizona IDA RB (Meadowcraft, Inc. Project) Series 1997 / (NationsBank NA LOC) 3.75%, 07/02/98 1,000 1,000 -------- 84,420 -------- ARKANSAS -- 0.3% Independence County, Arkansas IDRB (Ideal Baking Project) / (NationsBank NA LOC) 3.75%, 07/07/98 7,000 7,000 Independance County, Arkansas IDRB (Townsends of Arkansas, Inc. Project) / (Rabobank Nederland N.V. SPA) 3.65%, 07/07/98 9,000 9,000 Par Value ------- -------- Warren Park, Arizona Solid Waste Disposal RB (Potlatch Corp. Project) / (Credit Suisse LOC) 3.60%, 07/07/98 $ 1,000 $ 1,000 -------- 17,000 -------- CALIFORNIA -- 0.5% California Health Facilities Financing Authority RB (Scripps Memorial Hospital Project) Series 1985A / (MBIA Insurance & Morgan Guaranty Trust Co. SBPA) 3.20%, 07/07/98 700 700 California Higher Education Loan Authority Student Loan Revenue Refunding Bonds Series 1987C1 / (SLMA LOC) 3.65%, 07/07/98 13,900 13,900 California Higher Education Loan Authority Student Loan Revenue Refunding Bonds Series 1987 E1 / (SLMA LOC) 3.50%, 07/07/98 5,000 5,000 California Pollution Control Finance Authority RB (Pacific Gas & Electric Company) / (Bank of America LOC) 3.35%, 07/01/98 600 600 California Pollution Control Financing Authority RB (Pacific Gas & Electric) Series 1997C / (Kredietbank N.V. LOC) 3.60%, 07/01/98 200 200 Chula Vista, California IDRB (San Diego Gas & Electric Co. Project) Series A 3.35%, 07/01/98 1,100 1,100 Irvine Ranch, California Improvement Board RB (District Number 97-16) / (Societe Generale LOC) 3.30%, 07/01/98 200 200 Irvine Ranch, California Water District COP (Capital Improvement Project) / (Toronto Dominion LOC) 3.50%, 07/01/98 100 100 Irvine Ranch, California Water District Consolidated Refunding Bonds Series 1993A / (Bank of America LOC) 3.25%, 07/01/98 40 40 24 Par Value ------- -------- Kern County, California COP (Kern Public Facilities Project) Series A / (Union Bank of Switzerland LOC) 3.00%, 07/07/98 $ 5,200 $ 5,200 Orange County, California COP (Florence Crittenton Project) / (Union Bank of Switzerland LOC) 3.20%, 07/07/98 2,000 2,000 Orange County, California Sanitation District COP (Sanitation Districts #1, 2, 3) / (AMBAC Insurance & Barclays Bank, New York Liquidity) 3.00%, 07/07/98 2,400 2,400 -------- 31,440 -------- COLORADO -- 4.2% Adams County, Colorado Economic Development Authority Tax Increment RB (Westminster Plaza Urban Renewal Project) / (Union Bank of California LOC) 3.55%, 07/07/98 4,445 4,445 Adams County, Colorado IDRB (City View Park Project) Series 1985 / (Barclays Bank LOC) 3.60%, 07/07/98 5,700 5,700 Arapahoe County, Colorado Industrial Development Revenue Refunding Bonds (Denver Jet Center Project) Series 1997 / (U.S. Bank NA LOC) 3.90%, 07/07/98 1,000 1,000 Central City, Colorado M/F Housing RB (Gold Mountain Apartment Project) / (PNC Bank NA LOC) 3.75%, 07/07/98 8,250 8,250 Colorado Health Facilities Authority RB (National Benevolent Assoc.) 3.55%, 07/07/98 2,400 2,400 Colorado Health Facilities Authority RB (North Colorado Medical Center Project) / (MBIA Insurance / Credit Suisse SPA) 3.40%, 07/07/98 3,400 3,400 Colorado Student Obligation Bond Authority Student Loan RB (Colorado University) Series 1993B / (SLMA LOC) 3.50%, 07/07/98 10,700 10,700 Par Value ------- -------- Colorado Student Obligation Bond Authority Student Loan RB Series 1989A / (SLMA LOC) 3.50%, 07/07/98 $26,000 $ 26,000 Colorado Student Obligation Bond Authority Student Loan RB Series 1997D / (SLMA LOC) 3.10%, 07/07/98 18,100 18,100 Denver, Colorado City & County Airport System RB (Robinson Dairy Project) / (Wells Fargo Bank LOC) 3.65%, 07/07/98 4,435 4,435 Denver, Colorado City & County Airport System RB Series 1992D / (Morgan Guaranty Trust Co.-New York LOC) 3.65%, 07/07/98 49,400 49,400 Denver, Colorado City & County Airport System RB Series 1992E / (Morgan Guaranty LOC) 3.65%, 07/07/98 16,100 16,100 Denver, Colorado City & County Airport System RB Series 1992F / (Credit Local de France LOC) 3.65%, 07/07/98 16,000 16,000 Denver, Colorado City & County Airport System RB Series 1992G / (Credit Local de France LOC) 3.65%, 07/07/98 20,000 20,000 Denver, Colorado City & County Airport System RB Series 1997B / (Westdeutsche Landesbank LOC) 3.50%, 07/07/98 6,700 6,700 Denver, Colorado City & County Airport System RB Series 1997C / (Credit Local de France LOC) 3.55%, 07/07/98 44,000 44,000 El Paso County, Colorado Adjustable Rate RB (Colorado Springs World Arena) / (Bank One LOC) 3.60%, 07/07/98 7,900 7,900 Smith Creek, Colorado Metropolitan District RB Series 1997 / (NationsBank of Texas NA LOC) 3.60%, 07/07/98 2,250 2,250 Wheatridge County, Colorado IDRB (Leaf Inc. Project) / (Wachovia Bank NA LOC) 3.65%, 07/07/98 4,000 4,000 -------- 250,780 -------- 25 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- CONNECTICUT -- 0.4% Connecticut Development Authority Pollution Control RB (Connecticut Light & Power) Series 1985 / (AMBAC Insurance & Societe Generale LOC) 3.45%, 07/07/98 $16,200 $ 16,200 Connecticut Development Authority Pollution Control RB (Connecticut Light & Power) Series 1993B / (Union Bank of Switzerland LOC) 3.45%, 07/07/98 6,900 6,900 -------- 23,100 -------- DELAWARE -- 0.0% Sussex County, Delaware RB (Baywood LLC Project) Series A / (Wilmington Trust Co. LOC) 4.05%, 07/07/98 2,400 2,400 -------- DISTRICT OF COLUMBIA -- 0.7% Metropolitan Washington District of Columbia Airports Authority System Revenue Refunding Bonds Series 1997C / (Union Bank of Switzerland SBPA) 3.45%, 07/07/98 43,300 43,300 -------- FLORIDA -- 5.8% Bradford County, Florida Health Facilities Authority RB (Shands Teaching Hospital Clinic Project) Series 1996 / (MBIA Insurance & Suntrust Bank Central Florida LOC) 3.50%, 07/07/98 6,500 6,500 Broward County, Florida HFA M/F Housing RB (Harbour Town of Jacaranda Project) Series 1995B / (Southtrust Bank NA LOC) 3.60%, 07/07/98 5,400 5,400 Broward County, Florida Port Facilities Revenue Refunding Bonds (Sub Port Everglades Project) / (AMBAC Insurance & Bank of Nova Scotia LOC) 3.45%, 07/07/98 22,000 22,000 Citrus Park, Florida Community Development District Capital Improvement Bonds Series 1996 / (Dresdner Bank AG LOC) 3.50%, 07/07/98 1,300 1,300 Par Value ------- -------- Collier County, Florida HFA M/F Housing RB (River Beach Project) Series 1985 / (Morgan Guaranty Trust Co. - New York SBPA) 3.55%, 07/07/98 $ 4,000 $ 4,000 Dade County, Florida Aviation Series 1984A / (Morgan Guaranty Trust Co. - New York LOC) 3.50%, 07/07/98 1,100 1,100 Dade County, Florida IDA RB Series 1997 (Micheal-Ann Russell Jewish Community Center Project) / (Suntrust Bank LOC) 3.60%, 07/07/98 4,500 4,500 Duval County, Florida HFA M/F Housing RB Lakes Mayport Apartment Series 1985 / (Suntrust Banks Inc. LOC) 3.60%, 07/07/98 1,800 1,800 Florida Capital Financing Authority RB (Capital Project Loan Program Project) Series 1997A 3.55%, 07/07/98 47,260 47,260 Florida Housing Facility Agency M/F Housing RB (Cornerstone Imaging Project) Series 1985B / (NationsBank NA LOC) 3.35%, 07/07/98 13,400 13,400 Florida Municipal Power Agency Revenue Refunding Bonds (Stanton II Project) Series 1997 / (AMBAC Insurance & First Union National Bank South LOC) 3.50%, 07/07/98 18,000 18,000 Florida State Capital Projects Finance Authority (Florida Hospital Association - Capital Projects Loan Program) Series 1998A / (Credit Suisse SBPA & FSA Insurance) 4.00%, 07/07/98 7,500 7,500 Gulf Breeze, Florida RB (Local Government Loan Program) Series C / (FGIC Insurance & Credit Local de France) 3.55%, 07/07/98 265 265 Gulf Breeze, Florida RB (Local Government Loan Program) Series 1985B / (Credit Local de France SBPA & FGIC Insurance) 3.55%, 07/07/98 15,360 15,360 26 Par Value ------- -------- Highlands County, Florida Health Facilities Authority RB (Adventist Health Systems Project) Series 1996B / (Canadian Imperial Bank of Commerce & MBIA Insurance) 3.55%, 07/07/98 $ 4,300 $ 4,300 Highlands County, Florida Health Facilities Authority RB (Adventist Health Systems Project) Series 1997A / (Suntrust Bank Central Florida NA LOC) 3.55%, 07/07/98 13,650 13,650 Hillsborough County, Florida M/F Housing RB (Brandon Crossing) / (Amsouth Bank of Alabama LOC) 3.75%, 07/07/98 500 500 Indian Trace, Florida Community Development District (Broward County Florida Basin 1 Water) / (MBIA Insurance & Swiss Bank SBPA) 3.40%, 07/07/98 1,950 1,950 Jacksonville, Florida RB (Capital Project) / (Multiple Credit Enhancements & AMBAC Insurance) 3.35%, 07/07/98 9,000 9,000 Lake Shore, Florida Hospital Authority Health Facilities RB (Lakeshore Hospital Project) Series 1991 / (Kredietbank, N.V. LOC) 3.50%, 07/07/98 3,700 3,700 Marion County, Florida HFA M/F Housing RB (Paddock Project) Series 1985F / (Suntrust Bank Atlanta LOC) 3.60%, 07/07/98 1,100 1,100 Miami-Dade County, Florida IDRB (Airbus Service Co. Project) Series 1998A / (First Union National Bank of North Carolina LOC) 3.65%, 07/07/98 300 300 Orange County, Florida Health Facilites Authority RB (Mayflower Retirement Community Project) / (Rabobank Nederland N.V. LOC) 3.50%, 07/07/98 9,805 9,805 Orange County, Florida HFA M/F Housing RB (Andover Place Apartments) / (NationsBank NA LOC) 3.55%, 07/07/98 3,400 3,400 Par Value ------- -------- Orange County, Florida HFA M/F Housing RB (Rio Vista Project) / (First Union Bank of North Carolina LOC) 3.60%, 07/07/98 $ 2,750 $ 2,750 Orlando Special Assessment RB, Republic Drive Interchange / (Morgan Guaranty LOC) 3.35%, 07/07/98 16,600 16,600 Palm Beach County, Florida Health Facilities Authority Revenue Refunding Bonds (Boca Raton Community Hospital Project) / (First Union National Bank LOC) 3.50%, 07/07/98 15,000 15,000 Palm Beach County, Florida Health Facilities Authority Revenue Refunding Bonds (Joseph L. Morse Geriatric Center) / (Sun Bank LOC) 3.55%, 07/07/98 12,155 12,155 Pasco County, Florida COP / (AMBAC Insurance & Landesbank SBPA) 3.55%, 07/07/98 55,370 55,370 Plant City, Florida Hospital RB (Southern Florida Baptist Hospital Project) / (Barnett Bank NA LOC) 3.60%, 07/07/98 8,600 8,600 Polk County, Florida IDA RB (Pavermodule Inc. Project) / (Suntrust Bank South Florida NA LOC) 3.70%, 07/07/98 1,510 1,510 SouthEast Volusia, Florida Hospital District RB (Bert Fish Medical Center Project) Series 1995 / (Southtrust Bank NA LOC) 3.55%, 07/07/98 11,305 11,305 St. Petersburg, Florida Capital Improvement RB (Airport & Golf Course) Series B / (Suntrust Bank Miami NA LOC) 3.60%, 07/07/98 2,000 2,000 Suwannee County, Florida Health Facilities Authority RB (Shands Teaching Hospital Clinic Project) Series 1996 / (MBIA Insurance & Suntrust Bank Central Florida LOC) 3.50%, 07/07/98 4,500 4,500 27 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Tallahassee-Leon County, Florida Civic Center Authority Capital Improvement RB Series A / (Suntrust Bank Central Florida NA LOC) 3.60%, 07/07/98 $ 6,000 $ 6,000 Tampa, Florida Health Care Facilities RB (Lifelink Foundation Inc., Project) / (Suntrust Bank Atlanta LOC) 3.60%, 07/07/98 5,500 5,500 Tampa, Florida Occupational License Tax RB Series 1996A / (FGIC Insurance) 3.50%, 07/07/98 10,600 10,600 -------- 347,980 -------- GEORGIA -- 3.7% Athens-Clarke Jackson Morgan Counties, Georgia IDRB (Mayfield Dairy) / (Wachovia Bank LOC) 3.65%, 07/07/98 6,850 6,850 Bartow County Georgia IDRB (Bartow Paving Co. Project) / (Wachovia Bank NA LOC) 3.65%, 07/07/98 3,000 3,000 Bartow County, Georgia IDRB (Matthew Contracting Project) / (NationsBank NA LOC) 3.70%, 07/07/98 5,600 5,600 Cherokee County, Georgia IDRB (Universal Alloy) / (Wachovia Bank LOC) 3.65%, 07/07/98 5,500 5,500 Cobb County, Georgia HFA M/F Housing RB (Walton Green Project) / (Wachovia Bank NA LOC) 3.65%, 07/07/98 3,500 3,500 Cobb County, Georgia HFA M/F Housing RB (Williamstown Apartment Project) / (Wachovia Bank NA LOC) 3.65%, 07/07/98 2,000 2,000 Decatur, Georgia IDRB (Alabama Farmers Corp.) / (NationsBank NA LOC) 3.75%, 07/07/98 2,900 2,900 Dekalb County, Georgia Development Authority IDRB (Park North Business Center Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 5,140 5,140 Par Value ------- -------- Dekalb County, Georgia Development Authority IDRB (Siemens Energy, Inc. Project) / (Siemens AG Guaranty LOC) 3.60%, 07/07/98 $ 3,750 $ 3,750 Dekalb County, Georgia Development Authority IDRB (Truman Properties Ltd. Liability Corp. Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 3,000 3,000 Dekalb County, Georgia Development Authority RB (Arbor Montessori School Project) / (Suntrust Bank Atlanta LOC) 3.60%, 07/07/98 1,100 1,100 Dekalb County, Georgia HFA M/F Housing RB (Wood Hills Apartment Project) / (Bank of Montreal LOC) 3.60%, 07/07/98 5,250 5,250 Douglas County, Georgia Authority Industrial Development Revenue Refunding Bonds (Mima Inc. Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 4,300 4,300 Douglas County, Georgia IDA RB (Blue Circle Project) / (Den Danske Bank LOC) 3.70%, 07/07/98 3,800 3,800 Fayette County, Georgia IDRB (Norman W. Paschell Co. Project) / (Suntrust Bank Atlanta LOC) 3.65%, 07/07/98 1,200 1,200 Fulton County, Georgia Development Authority RB (Atlanta International School Project) / (Suntrust Bank Atlanta LOC) 3.60%, 07/07/98 3,000 3,000 Fulton County, Georgia Development Authority RB (Woodruff Arts Center Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 10,000 10,000 Georgia Municipal Gas Authority RB (Gas Portfolio II Project) Series B 3.40%, 07/07/98 2,000 2,000 Gwinnett County, Georgia HFA M/F Housing RB / (Suntrust Bank Atlanta LOC) 3.60%, 07/07/98 5,000 5,000 28 Par Value ------- -------- Hart County, Georgia Industrial Building Authority RB (Dundee Mills Project) / (Suntrust Bank Atlanta LOC) 3.70%, 07/07/98 $ 1,800 $ 1,800 Jefferson County, Georgia Development Authority IDRB (Grove River Mills Project) Series 1997 / (Wachovia Bank LOC) 3.65%, 07/07/98 3,500 3,500 Lafayette, Georgia Development Authority RB (Dixie Group Project) / (Suntrust Bank Atlanta LOC) 3.70%, 07/07/98 2,000 2,000 Laurens County, Georgia Development Authority Solid Waste Disposal RB (Southeast Paper Manufacturing Co. Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 51,000 51,000 Richmond County, Georgia IDA RB (BOK Group Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 5,000 5,000 Roswell, Georgia HFA M/F Housing RB (Gables Realty Wood Crossing Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 11,650 11,650 Savannah, Georgia Economic Development Authority RB (Georgia Kaolin Inc.) / (NationsBank LOC) 3.70%, 07/07/98 11,000 11,000 Savannah, Georgia Economic Development Authority RB (Home Depot Project) Series 1995B / (Trust Co. Bank LOC) 3.65%, 07/07/98 5,000 5,000 Savannah, Georgia HFA M/F Housing RB (Chatham Gardens Project) Series 1997 / (Sun Trust Bank Atlanta LOC) 3.70%, 07/07/98 2,995 2,995 Smyrna, Georgia HFA M/F Housing RB (Walton Park LP) / (Wachovia Bank LOC) 3.65%, 07/07/98 8,000 8,000 Smyrna, Georgia HFA M/F Housing RB (Walton Park Phase 2 Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 13,500 13,500 Par Value ------- -------- Sugar Hill, Georgia HFA M/F Housing RB (Level Creek Apartments Project) / (Amsouth Bank of Alabama LOC) 3.75%, 07/07/98 $12,790 $ 12,790 Summerville, Georgia Development Authority RB (Image Industry Project) Series 1997 / (First Union National Bank LOC) 3.70%, 07/07/98 9,000 9,000 Villa Rica, Georgia IDRB (Lowes Home Centers, Inc. Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 500 500 Winder-Barrow, Georgia Industrial Building Authority, Georgia IDRB (The Concrete Co.) 3.80%, 07/07/98 4,800 4,800 Worth County, Georgia IDA Revenue Refunding Bonds (Seabrook Project) Series 1996B / (Sun Bank LOC) 3.70%, 07/07/98 1,400 1,400 -------- 220,825 -------- HAWAII -- 0.5% Hawaii Department of Budget & Finance Special Purpose Mortgage RB (Adventist Health System West) / (Union Bank of California LOC) 3.50%, 07/07/98 7,600 7,600 Hawaii Student Loan RB (Secondary Market Services Corp.) Series 1995-II / (National Westminster Bank PLC LOC) 3.50%, 07/07/98 8,100 8,100 Honolulu, Hawaii City & County M/F Housing RB (HaleKua Gardens Project) Series A (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.20%, 07/07/98 4,984 4,984 Honolulu, Hawaii City & County M/F Housing RB (Iolani Regents Project) Series 1990A / (Bank of Hawaii LOC) 3.75%, 07/07/98 9,050 9,050 -------- 29,734 -------- 29 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- IDAHO -- 0.4% Idaho HFA Housing RB (Assisted Living Concepts Project) / (U.S. Bank NA LOC) 3.65%, 07/07/98 $ 1,875 $ 1,875 Idaho Student Loan RB Series A / (First Security Bank of Utah NA LOC) 3.80%, 07/07/98 19,200 19,200 -------- 21,075 -------- ILLINOIS -- 6.7% Aurora, Kane, & Dupage Counties, Illinois IDRB (North American Plastics Corp. Project) / (First of America Bank Illinois NA LOC) 3.70%, 07/07/98 5,400 5,400 Bartlett, Illinois M/F Housing RB (Bartlett Square Apartments) Series 1995A / (LaSalle National Bank LOC) 3.60%, 07/07/98 2,100 2,100 Batavia, Illinois Development RB (American Industrial Technologies) / (Northern Trust LOC) 3.80%, 07/07/98 2,200 2,200 Carol Stream, Illinois M/F Housing Revenue Refunding Bonds (St. Charles Square Project) / (FNMA LOC) 3.65%, 07/07/98 4,415 4,415 Centralia, Illinois IDA RB (Consolidated Foods Corp. Hollywood Brands, Inc. Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 4,500 4,500 Chicago, Illinois IDRB (Morse Automotive) Series 1995 / (American National Bank & Trust Co. LOC) 3.75%, 07/07/98 2,600 2,600 Chicago, Illinois O'Hare International Airport RB (ACES General Airport Second Lien) Series B1 / (Bayerische Landesbank Girozentrale LOC) 3.65%, 07/07/98 25,600 25,600 Chicago, Illinois O'Hare International Airport RB (ACES General Airport Second Lien) Series B2 / (Bayerische Landesbank Girozentrale LOC) 3.65%, 07/07/98 9,400 9,400 Par Value ------- -------- Chicago, Illinois O'Hare International Airport Special Facility RB / (Societe Generale LOC) 3.65%, 07/07/98 $25,300 $ 25,300 East Dundee, Kane and Cook Counties, Illinois IDRB (Otto Engine Project) / (Lasalle National Bank LOC) 3.70%, 07/07/98 2,500 2,500 Elmhurst, Illinois IDRB (ELM Machining Corp. Project) / (American National Bank & Trust Co. LOC) 3.80%, 07/07/98 3,500 3,500 Hampshire, Illinois IDRB (Poli-Film America Project) Series 1998A / (Bank of America NT & SA LOC) 3.60%, 07/07/98 615 615 Illinois Development Authority IDRB (Camcraft Inc. Project) / (American National Bank & Trust Co. LOC) 3.75%, 07/07/98 2,600 2,600 Illinois Development Authority RB (Cloverhill Pastry) / (American National Bank & Trust Co. LOC) 3.75%, 07/07/98 5,970 5,970 Illinois Development Finance Authority Hospital RB (Palos Community Hospital) Series 1994-1 / (Credit Suisse SBPA) 3.50%, 07/07/98 33,700 33,700 Illinois Development Finance Authority Hospital RB (Palos Community Hospital) Series 1994-2 / (Credit Suisse SBPA) 3.50%, 07/07/98 13,900 13,900 Illinois Development Finance Authority IDRB (Catholic Charities) / (Allied Irish Bank PLC LOC) 3.55%, 07/07/98 2,655 2,655 Illinois Development Finance Authority IDRB (Chicago Corrugated Box Company) Series 6 / (American National Bank & Trust Co. LOC) 3.80%, 07/07/98 1,150 1,150 Illinois Development Finance Authority IDRB (Knead Dough Baking Co.) / (Bank of America LOC) 3.55%, 07/07/98 7,295 7,295 30 Par Value ------- -------- Illinois Development Finance Authority IDRB (MCL Inc. Project) / (American National Bank & Trust Co. LOC) 3.80%, 07/07/98 $ 2,050 $ 2,050 Illinois Development Finance Authority IDRB (Molding Project) / (Northern Trust LOC) 3.70%, 07/07/98 1,950 1,950 Illinois Development Finance Authority IDRB (Perkin Paperboard Co. LP) Series 1994 / (Northern Trust LOC) 3.70%, 07/07/98 5,500 5,500 Illinois Development Finance Authority IDRB (Presbyterian Home Lake) Series 1996A / (LaSalle National Bank LOC) 3.55%, 07/07/98 48,400 48,400 Illinois Development Finance Authority IDRB (Radiological Society Project) Series 1997 / (American National Bank & Trust Co. LOC) 3.60%, 07/07/98 4,900 4,900 Illinois Development Finance Authority IDRB (River Graphics Corp. Project) Series 1996 / (American National Bank & Trust Co. LOC) 3.80%, 07/07/98 3,200 3,200 Illinois Development Finance Authority IDRB (SMF Inc. Project) Series A / (First of America LOC) 3.70%, 07/07/98 2,170 2,170 Illinois Development Finance Authority RB (Catholic Charities Housing Project) Series 1993A / (Allied Irish Banks PLC LOC) 3.60%, 07/07/98 10,060 10,060 Illinois Development Finance Authority RB (Chicago Academy of Science Project) / (American National Bank & Trust Co. LOC) 3.55%, 07/07/98 4,715 4,715 Illinois Development Finance Authority RB (Korex Corp. Project) / (Lasalle National Bank LOC) 3.70%, 07/07/98 4,000 4,000 Par Value ------- -------- Illinois Development Finance Authority RB (Profile Plastics Project) Series 1994 / (American National Bank & Trust Co. LOC) 3.75%, 07/07/98 $ 2,665 $ 2,665 Illinois Development Finance Authority RB (St. Ignatius College Prep Project) / (Northern Trust LOC) 3.55%, 07/07/98 2,200 2,200 Illinois Development Finance Authority RB (Variable Rest Haven Illiana Christian) / (FHLB LOC) 4.05%, 07/07/98 10,030 10,030 Illinois Development Finance Authority RB (Village Oak Park Residence) / (First Star Bank NA LOC) 3.65%, 07/07/98 2,165 2,165 Illinois Development Finance Authority Residential Rental RB (F.C. Harris Pavillion Project) Series 1994 / (FNMA Collateral Agreement) 3.50%, 07/07/98 27,510 27,510 Illinois Development Finance Authority Residential Rental RB (River Oak Project) / (Swiss Bank LOC) 3.65%, 07/07/98 22,000 22,000 Illinois Development Finance Authority Revenue Refunding Bonds (Rich Products Corp. Project) / (Suntrust Bank Atlanta LOC) 3.70%, 07/07/98 1,525 1,525 Illinois Educational Facility Authority RB (Chicago Historical Society) / (Northern Trust LOC) 3.50%, 07/07/98 8,200 8,200 Illinois Educational Facility Authority RB (Chicago Zoological Society Brookfield Zoo) Series B / (Chemical Bank LOC) 3.55%, 07/07/98 2,600 2,600 Illinois Health Facility Authority RB (Bensenville Home Society Project) Series 1989A / (American National Bank & Trust Co. LOC) 3.50%, 07/07/98 2,350 2,350 31 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Illinois Health Facility Authority RB (Ingalls Memorial Hospital) Series 1985C / (Lasalle National Bank LOC) 3.60%, 07/07/98 $ 1,100 $ 1,100 Illinois Health Facility Authority RB (Washington & Jane Smith Home) Series 1991 / (Comerica Bank LOC) 3.55%, 07/07/98 2,800 2,800 Illinois HFA M/F Housing RB (Camelot Project) Series 1997 / (FNB of Chicago SPA & MBIA Insurance) 3.65%, 07/07/98 14,170 14,170 Illinois Student Assistance Commission Student Loan RB Series 1996A / (Bank of America LOC) 3.65%, 07/07/98 8,400 8,400 Lombard, Illinois Industrial Development Revenue Refunding Bonds/(B & H Partnership Project) / (Comerica Bank LOC) 3.85%, 07/07/98 1,850 1,850 McHenry County, Illinois IDA Revenue Refunding Bonds (Dean Foods Co. Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 2,675 2,675 New Lenox, Illinois IDRB (Panduit Corp. Project) / (Commerzbank AG LOC) 3.60%, 07/07/98 4,400 4,400 Richton Park, Illinois IDRB (Avatar Corp. Project) / (American National Bank & Trust Co. LOC) 3.70%, 07/07/98 2,000 2,000 Rockford, Illinois IDRB (Industrial Welding Supply, Inc. Project) / (American National Bank & Trust Co. LOC) 3.80%, 07/07/98 2,000 2,000 Rockford, Illinois IDRB (Ring Can Corp. Project) / (Suntrust Bank Nashville NA LOC) 3.75%, 07/07/98 2,000 2,000 Tinley Park, Illinois IDA RB (Beverly Manufacturing Co. Project) Series 1997A / (NationsBank NA South LOC) 3.70%, 07/02/98 2,640 2,640 Par Value ------- -------- Tremont, Illinois IDRB (Hanna Steel Project) / (NationsBank NA LOC) 4.00%, 07/07/98 $ 9,500 $ 9,500 Upper Illinois River Valley Development Authority Bonds (Exolon Esk Co. Project) Series A / (Chemical Bank LOC) 3.70%, 07/07/98 4,405 4,405 Wheeling, Illinois Manufacturing Revenue Refunding Bonds (Woodland Creek II Housing Project) Series 1990 / (FSA Insurance) 3.60%, 07/07/98 17,655 17,655 Woodstock, Illinois M/F Housing RB (Prairie Trail) Series 1996A / (LaSalle National Bank LOC) 3.70%, 07/07/98 3,425 3,425 Woodstock, Illinois M/F Housing RB (Prairie View Ltd.) / (American National Bank & Trust Co. LOC) 3.70%, 07/07/98 2,035 2,035 Yorkville, Illinois IDRB (F.E. Wheaton & Co. Inc. Project) Series 1996 / (American National Bank & Trust Co. LOC) 3.80%, 07/07/98 1,600 1,600 -------- 406,245 -------- INDIANA -- 1.0% Crawfordsville, Indiana IDRB (National Service Industries, Inc. Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 4,000 4,000 Gary, Indiana Economic Development Authority Revenue Refunding Bonds (Miller Partners Home Improvement Project) Series 1996A / (Royal Bank of Scotland PLC LOC) 3.60%, 07/07/98 10,540 10,540 Gary, Indiana Economic Development Authority Revenue Refunding Bonds (Tinplate Partnership Project ) Series 1997A / (LaSalle National Bank LOC) 3.65%, 07/07/98 3,500 3,500 Hammond, Indiana Economic Development RB (Lear Seating Corp. Project) Series 1994 / (Chemical Bank LOC) 4.05%, 07/07/98 9,200 9,200 32 Par Value ------- -------- Indiana Secondary Market Educational Loans Inc. Student Loan RB Series B / (AMBAC Insurance & SLMA LOC) 3.50%, 07/07/98 $27,000 $ 27,000 Indianapolis, Indiana Economic Development Authority RB (Herff-Jones, Inc. Project) / (Wachovia Bank LOC) 3.70%, 07/07/98 4,100 4,100 St. Joseph College, Indiana Economic Development RB Series 1997B / (FHLB LOC) 3.65%, 07/07/98 3,675 3,675 -------- 62,015 -------- IOWA -- 0.5% Iowa Student Loan Liquidity Corp. Student Loan RB Series B / (AMBAC Insurance & Norwest Bank NA LOC) 3.55%, 07/07/98 28,000 28,000 -------- KANSAS -- 0.2% Kansas City, Kansas IDRB (Owen Industries, Inc. Project) Series 1987 / (Mellon Bank LOC) 3.75%, 07/07/98 600 600 Kansas State HFA M/F Housing RB (First Kansas State Partnership) Series 1995A / (Boatmen's First National Bank of Kansas City LOC) 3.90%, 07/07/98 2,000 2,000 Kansas State HFA M/F Housing RB (First Kansas State Partnership) Series 1995C2 / (Boatmen's First National Bank of Kansas City LOC) 3.90%, 07/07/98 650 650 Olathe, Kansas IDRB (Garmin International Inc. Project) Series 1995 / (Boatmen's First National Bank of Kansas City LOC) 3.90%, 07/07/98 1,700 1,700 Wichita, Kansas Airport Facilities Revenue Refunding Bonds (Cessna Service Center Project) / (Westdeutsche Landesbank LOC) 3.80%, 07/07/98 4,985 4,985 Par Value ------- -------- Wichita, Kansas Airport Facilities Revenue Refunding Bonds (Flightsafety International, Inc.) / (Wachovia Bank LOC) 3.65%, 07/07/98 $ 3,000 $ 3,000 -------- 12,935 -------- KENTUCKY -- 1.4% Elizabethtown, Kentucky IDRB (Aztec Project) / (Wachovia Bank NA LOC) 3.65%, 07/07/98 3,000 3,000 Henderson County, Kentucky Solid Waste Disposal RB (Hudson Foods, Inc. Project) / (Rabobank Nederland N.V. LOC) 3.60%, 07/07/98 10,300 10,300 Jefferson County, Kentucky Sports Stadium Revenue Adjusting Bonds (University of Louisville Athletic Department) / (Bank One Kentucky NA LOC) 3.60%, 07/07/98 10,000 10,000 Kentucky Higher Education Student Loan Corp. Insured Student Loan RB Series 1991E / (AMBAC Insurance & Credit Suisse LOC) 3.45%, 07/07/98 20,450 20,450 Kentucky Higher Education Student Loan Corp. Insured Student Loan RB Series 1996A / (MBIA Insurance & Landesbank Hessen-Thuringen Girozentrale SPA) 3.45%, 07/07/98 14,900 14,900 Lebanon, Kentucky IDRB (Wallace Computer Services, Inc.) / (Wachovia Bank LOC) 3.65%, 07/07/98 5,000 5,000 Murray, Kentucky IDA Revenue Refunding Bonds (Dean Foods Co. Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 6,000 6,000 Owensboro, Kentucky Limited Obligation RB (Dart Polymers, Inc. Project) Series 1985A / (National Westminster Bank PLC LOC) 4.00%, 07/07/98 1,900 1,900 Richmond, Kentucky IDRB (Mikron Project) / (Bank of America LOC) 3.75%, 07/07/98 9,500 9,500 33 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Wilson County, Kentucky IDB RB (Perma Pipe Project) / (Harris Trust & Savings Bank LOC) 3.85%, 07/07/98 $ 3,150 $ 3,150 -------- 84,200 -------- LOUISIANA -- 0.6% Lafayette Parish, Louisiana IDRB (Westwood Village Project) / (Texas Commerce Bank NA LOC) 3.60%, 07/07/98 1,800 1,800 Louisiana Public Facilities Authority Hospital RB (Willis-Knighton Medical Center Project) Series 1993 / (AMBAC Insurance & Credit Local de France SPA) 3.50%, 07/07/98 12,370 12,370 Louisiana State Public Facilities Authority Hospital RB (Willis- Knighton Medical Center Project / (AMBAC Insurance & Credit Local de France SPA) 3.50%, 07/07/98 8,000 8,000 New Orleans, Louisiana Aviation Board RB (Passenger Facility Charge Projects) / (Banque Paribas & Canadian Imperial Bank of Commerce LOC) 4.25%, 07/07/98 5,100 5,100 Parish of Desota, Louisiana Pollution Control RB (Central Louisiana Electric Company Project) / (West Deutsche Landesbank LOC) 3.35%, 07/07/98 400 400 South Louisianna, Port Commission RB (Holnam Project) / (ABN-Amro Bank N.V. LOC) 3.65%, 07/07/98 7,500 7,500 -------- 35,170 -------- MAINE -- 1.4% Maine Education Loan Marketing Corp. Student Loan RB Series 1997A1 / (AMBAC Insurance) 3.55%, 07/07/98 37,500 37,500 Maine Education Loan Marketing Corp. Student Loan RB Series 1997A2 / (AMBAC Insurance) 3.55%, 07/01/98 15,500 15,500 Par Value ------- -------- Maine Regional Waste System Solid Waste Recovery RB Series 1990K / (Midland Bank LOC) 3.65%, 07/07/98 $17,550 $ 17,550 Maine Regional Waste System Solid Waste Recovery RB Series 1993M / (Midland Bank LOC) 3.65%, 07/07/98 4,075 4,075 Maine Regional Waste System Solid Waste Recovery RB Series 1995O / (Midland Bank LOC) 3.65%, 07/07/98 5,000 5,000 Maine State HFA M/F Housing RB (Park Village Apartments Project) / (General Electric Capital Corp. LOC) 3.55%, 07/07/98 6,000 6,000 -------- 85,625 -------- MARYLAND -- 0.6% Howard County, Maryland M/F Housing RB (Avalon Meadows Project) / (FNMA LOC) 3.35%, 07/07/98 4,900 4,900 Maryland State Economic Development Corp. IDRB (Dixon Valve Project) / (CoreStates Bank NA LOC) 3.80%, 07/07/98 4,000 4,000 Maryland State Health & Higher Education Facility Authority Pooled RB (Kennedy Krieger Project) Series 1993D / (First National Bank Maryland LOC) 3.65%, 07/07/98 2,000 2,000 Maryland State Health & Higher Education Facility Authority Pooled RB (Pooled Loan Program) Series 1985A / (FNB Chicago LOC) 3.50%, 07/07/98 9,700 9,700 Montgomery County, Maryland Housing Opportunity Commission RB (Draper Lane Project) Series 1991I / (FGIC Insurance & Barclays Bank PLC SPA) 3.65%, 07/07/98 16,600 16,600 -------- 37,200 -------- 34 Par Value ------- -------- MASSACHUSETTS -- 0.0% Massachusetts State Industrial Finance Agency Resource Recovery Authority RB (Ogden Haverhill Project) Series 1992A / (Union Bank of Switzerland LOC) 3.40%, 07/07/98 $ 500 $ 500 -------- MICHIGAN -- 1.3% Michigan Higher Education Student Loan RB Series XII 3.55%, 07/07/98 5,000 5,000 Michigan State Hospital Finance Authority RB (Martin Luther Memorial Home Inc. Project) / (Bank One Indiana NA LOC) 4.05%, 07/07/98 8,520 8,520 Michigan State Strategic Fund Ltd. Obligation RB (Autocam Corp. Project) / (Comerica Bank LOC) 3.70%, 07/07/98 2,500 2,500 Michigan State Strategic Fund Ltd. Obligation RB (Dean Foods Co. Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 3,500 3,500 Michigan State Strategic Fund Ltd. Obligation RB (EPI Printers Inc. Project) / (Comerica Bank LOC) 3.70%, 07/07/98 5,200 5,200 Michigan State Strategic Fund Ltd. Obligation RB (John Widdicomb Co. Project) / (Michigan National Bank LOC) 3.70%, 07/07/98 2,735 2,735 Michigan State Strategic Fund Ltd. Obligation RB (Manufacturer's Project) Series 1991 / (Comerica Bank LOC) 3.70%, 07/07/98 1,885 1,885 Michigan State Strategic Fund Ltd. Obligation RB Series 1998 / (Comerica Bank LOC) 3.70%, 07/07/98 4,600 4,600 Michigan State Strategic Fund Ltd. Obligation RB Series B / (Comerica Bank LOC) 4.00%, 07/07/98 2,000 2,000 Par Value ------- -------- Wayne Charter County, Michigan Airport RB (Detroit Metropolitan County Project) Series 1996A / (Bayerische Landesbank Girozentrale LOC) 3.60%, 07/07/98 $ 6,500 $ 6,500 Wayne Charter County, Michigan Airport RB (Detroit Metropolitan County Project) Series B / (Bayerische Landesbank Girozentrale LOC) 3.50%, 07/07/98 31,810 31,810 -------- 74,250 -------- MINNESOTA -- 0.5% Bloomington, Minnesota Port Authority Special Tax RB (Mall of America Project) Series 1996B / (FSA Insurance & Credit Local de France SBPA) 3.60%, 07/07/98 6,200 6,200 Bloomington, Minnesota Port Authority Tax Increment Revenue Refunding Bonds (Mall of America Project) Series 1995A / (Credit Local de France SBPA & FSA Insurance) 3.60%, 07/07/98 6,000 6,000 Hennepin County, Minnesota Unlimited GO Series 1995C 3.55%, 07/07/98 2,400 2,400 Hennepin County, Minnesota Unlimited GO Series 1996C 3.70%, 07/07/98 5,350 5,350 Minnesota Agriculture & Economic Development RB (Evangelical Lutheran Project) / (Rabobank Nederland N.V. LOC) 3.60%, 07/07/98 5,500 5,500 Minnesota State Higher Education Facilities Authority RB (University of St. Thomas Project) / (Allied Irish Banks PLC LOC) 3.55%, 07/07/98 4,500 4,500 -------- 29,950 -------- MISSISSIPPI -- 0.2% Canton, Mississippi IDRB (McCarty Farms Inc. Project) / (Suntrust Bank Atlanta LOC) 3.70%, 07/07/98 2,000 2,000 35 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Jackson County, Mississippi Pollution Control RB (Chevron Project) 3.75%, 07/01/98 $ 2,200 $ 2,200 Mississippi Business Financial Corp. IDRB (Omega Motion Project) Series 1996 / (Wachovia Bank LOC) 3.65%, 07/07/98 6,800 6,800 -------- 11,000 -------- MISSOURI -- 0.7% Missouri Higher Education Loan Authority Student Loan RB Series 1988A / (National Westminster Bank PLC LOC) 3.50%, 07/07/98 19,900 19,900 Missouri State Development Finance Board IDRB (H.R. Williams Mill Supply Project) Series 1995 / (Union Bank of Switzerland LOC) 3.65%, 07/07/98 3,100 3,100 Missouri State Development Finance Board IDRB (Milbank Manufacturing Co. Project) / (Boatmen's First National Bank of Kansas City LOC) 3.90%, 07/07/98 3,000 3,000 St. Charles, Missouri IDA RB (Land Development Co. Project) / (Commerce Bank of St. Louis LOC) 3.90%, 07/07/98 3,550 3,550 St. Clair, Missouri IDA RB (Private Dynaquip) / (NationsBank NA LOC) 3.60%, 07/02/98 2,300 2,300 St. Joseph, Missouri IDRB (Altec Industries Inc. Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 4,000 4,000 St. Louis, Missouri IDA RB (Kessler Container Project) / (NationsBank NA LOC) 3.70%, 07/02/98 2,500 2,500 Washington, Missouri IDA RB (Pauwels Transformer Project) / (Societe Generale LOC) 3.90%, 07/07/98 3,700 3,700 -------- 42,050 -------- Par Value ------- -------- MONTANA -- 0.0% Montana State Health Facility Authority RB (Health Care Pooled Loan Program Project) Series 1985A / (FGIC Insurance & Norwest Bank of Minnesota NA LOC) 3.50%, 07/07/98 $ 1,500 $ 1,500 -------- NEBRASKA -- 0.7% Dodge County, Nebraska IDRB (Oilgear Project) / (Marshall & Ilsley Bank LOC) 3.70%, 07/07/98 2,000 2,000 Nebraska Higher Education Loan Program RB (Nebhelp Inc. Student Loan Project) Series 1988C / (SLMA LOC) 3.65%, 07/01/98 31,150 31,150 Stanton County, Nebraska IDRB (Nucor Corp. Project) Series 1996 3.65%, 07/07/98 10,500 10,500 -------- 43,650 -------- NEVADA -- 0.1% Clark County, Nevada Airport Improvement RB (System Subordinate Lien) Series 1995A2 / (Union Bank of Switzerland LOC) 3.65%, 07/07/98 1,330 1,330 Nevada Housing Division M/F Housing RB Series 1989A / (FNMA LOC) 3.45%, 07/07/98 5,800 5,800 -------- 7,130 -------- NEW HAMPSHIRE -- 0.1% New Hampshire Health Facilities Authority RB (VHA New England) / (AMBAC Insurance) 3.60%, 07/07/98 1,000 1,000 New Hampshire State HFA M/F Housing RB (Fairways PJ-1) / (General Electric Corp. LOC) 3.65%, 07/07/98 7,000 7,000 -------- 8,000 -------- 36 Par Value ------- -------- NEW JERSEY -- 0.6% Essex County Public Improvement Authority RB (County Asset Sale Project) Series 1995 / (Morgan Guaranty Trust Co. - New York LOC & AMBAC Insurance) 3.45%, 07/07/98 $ 5,550 $ 5,550 New Jersey Economic Development Authority Natural Gas Facilities RB (New Jersey Natural Gas Co.) / (AMBAC Insurance & Bank of New York LOC) 3.50%, 07/07/98 1,400 1,400 New Jersey Economic Development Authority Natural Gas Facilities RB (New Jersey Natural Gas Co.) Series 1998B / (Bank of New York LOC & AMBAC Insurance) 3.35%, 07/07/98 1,500 1,500 New Jersey Economic Development Authority Natural Gas Facilities RB (New Jersey Natural Gas Co.) Series 1998C / (Bank of New York LOC & AMBAC Insurance) 3.35%, 07/07/98 1,000 1,000 New Jersey Economic Development Authority Natural Gas Facilitites RB (Nui Corp. Project) / (AMBAC Insurance & Bank of New York LOC) 3.75%, 07/01/98 2,000 2,000 New Jersey Economic Development Authority RB (Job Haines Home Project) / (PNC Bank LOC) 3.10%, 07/07/98 1,300 1,300 New Jersey Economic Development Authority RB (Public Service Electric & Gas Company Project) Series 1995A (Swiss Bank LOC) 3.15%, 07/07/98 4,100 4,100 New Jersey Economic Development Authority RB (Toys R Us Inc. Project) Series 1984 / Chase Manhattan Bank LOC) 3.60%, 07/07/98 3,000 3,000 New Jersey Economic Development Authority Thermal Energy Facilities RB (Thermal Energy Ltd. Partnership I Project) Series 1997 / (First National Bank of Chicago LOC) 3.45%, 07/07/98 10,050 10,050 Par Value ------- -------- New Jersey Health Care Facility Financing Authority Revenue Refunding Bonds (Christian Health Project) Series 1998B / (Valley National Bank LOC) 3.25%, 07/07/98 $ 800 $ 800 New Jersey Sports & Exposition Authority RB Series 1992C (Barclays Bank LOC) 3.15%, 07/07/98 3,400 3,400 New Jersey State Economic Development Authority Revenue Refunding Bonds (Stolthaven Project) Series 1998A / (Citibank LOC) 4.00%, 07/01/98 600 600 New Jersey State Turnpike Authority RB Series 1991D / (Societe Generale LOC) 3.30%, 07/07/98 1,425 1,425 Union City, New Jersey Industrial Pollution Control Financing Authority RB (Exxon Project) 3.30%, 07/01/98 300 300 -------- 36,425 -------- NEW MEXICO -- 1.5% Albuquerque, New Mexico Airport RB (Subordinated Lien) Series 1996A / (Bayerische Landesbank Girozentrale LOC) 3.55%, 07/07/98 11,100 11,100 Albuquerque, New Mexico Gross Receipts Tax GO Bonds / (Canadian Imperial Bank of Commerce LOC) 3.55%, 07/07/98 3,000 3,000 Albuquerque, New Mexico (Karsten Project A) / (Bank One Milwaukee LOC) 3.90%, 07/01/98 1,550 1,550 Albuquerque, New Mexico (Karsten Project B) / (Bank One Milwaukee LOC) 3.90%, 07/01/98 780 780 Belen, New Mexico IDRB (Solo Cup, Inc. Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 3,250 3,250 37 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Farmington, New Mexico Pollution Control Revenue Refunding Bonds (Arizona Public Service Company) Series 1994A / (Barclays Bank New York LOC) 3.80%, 07/01/98 $ 1,200 $ 1,200 New Mexico State Highway Commission RB (Subordinate Lein) / (FSA Insurance) 3.55%, 07/07/98 65,750 65,750 Sandoval County, New Mexico M/F RB (Arrowhead Ridge Apartments Project) / (Union Bank of California LOC) 4.50%, 07/07/98 5,715 5,715 -------- 92,345 -------- NEW YORK -- 2.1% Albany-Dougherty County, New York Hospital Authority RB (Phoebe Putney Memorial Hospital Project) Series 1996 / (AMBAC Insurance) 3.60%, 07/07/98 11,400 11,400 Babylon, New York IDA Resource Recovery (Ogden Martin Project) Series 1998 / (FSA Insurance) 3.25%, 07/07/98 1,400 1,400 New York City, New York GO Series 1993 Subseries A8 / (Morgan Guaranty Trust Co. - New York LOC) 4.00%, 07/01/98 15 15 New York City, New York GO Series B Subseries B-7 4.00%, 07/01/98 1,000 1,000 New York City, New York Health & Hospitals Health System RB Series 1997A / (Morgan Guaranty Trust Co. - New York LOC) 3.20%, 07/07/98 100 100 New York City, New York Housing Development Corp. Mortgage RB (Parkgate Tower Project) / (Citibank LOC) 3.20%, 07/07/98 9,470 9,470 New York City, New York IDA Special Facility RB (Korean Airlines Co. Project) Series 1997B / (Bankers Trust LOC) 3.50%, 07/07/98 9,100 9,100 Par Value ------- -------- New York City, New York IDA Special Facility RB (Korean Airlines Co. Project) Series 1997C / (Bankers Trust LOC) 3.60%, 07/07/98 $ 3,700 $ 3,700 New York City, New York M/F Rental Housing RB (Tribeca Tower Project) Series 1997A / (FNMA LOC) 3.25%, 07/07/98 22,100 22,100 New York City, New York Special Facility RB (Korean Airlines Co. Project) Series 1997A / (Bankers Trust LOC) 3.35%, 07/07/98 6,100 6,100 New York State Energy Research & Development Authority Electric Facilities Adjustable Rate RB (Long Island Lighting Co. Project) Series 1994A / (Union Bank of Switzerland LOC) 3.55%, 07/07/98 4,000 4,000 New York State Energy Research & Development Authority Pollution Control Revenue Refunding Bonds (Orange & Rockland Utilities, Inc. Project) Series 1994A / (FGIC Insurance & Societe Generale LOC) 3.25%, 07/07/98 900 900 New York State HFA (Mount Sinai School Of Medicine) Series A / (Chase Manhattan Bank LOC) 3.40%, 07/07/98 5,600 5,600 New York State HFA M/F RB (Tribeca Park Housing Project) Series A / (Bayerische Landesbank Girozentrale LOC) 3.30%, 07/07/98 16,700 16,700 New York State HFA RB (East 84th Street Housing) Series 1995A / (Fleet Bank LOC) 3.30%, 07/07/98 1,100 1,100 New York State HFA RB (West 50th Street Project) Series 1997A / (Fleet Bank LOC) 3.30%, 07/07/98 23,700 23,700 New York State Local Government Assistance Corp. RB / (Toronto Dominion LOC) 3.15%, 07/07/98 600 600 38 Par Value ------- -------- New York State Local Government Assistance Corp. RB / (Union Bank of Switzerland LOC) 3.20%, 07/07/98 $ 4,795 $ 4,795 New York State Local Government Assistance Corp. RB Series 1994B / (Kredietbank LOC) 3.15%, 07/07/98 4,415 4,415 Triborough Bridge & Tunnel Authority / (FGIC Insurance) 3.20%, 07/07/98 2,000 2,000 Yonkers, New York IDA Civic Facilities RB (Consumers Union Facility Project) / (AMBAC Insurance & Credit Local de France SBPA) 3.45%, 07/07/98 500 500 -------- 128,695 -------- NORTH CAROLINA -- 0.6% Charlotte, North Carolina Airport Revenue Refunding Bonds Series 1993A / (Commerzbank SPA) 3.40%, 07/07/98 7,450 7,450 Forsyth County, North Carolina Industrial Facilities & Pollution Control Financing Authority RB (Plymouth Printing Project) / (CoreStates Bank NA LOC) 3.75%, 07/07/98 2,550 2,550 Guilford County, North Carolina Industrial Facilities & Pollution Control Financing Authority RB (Camco Manufacturing Project) Series 1996 / (Wachovia Bank LOC) 3.60%, 07/07/98 2,400 2,400 Guilford County, North Carolina Industrial Facilities & Pollution Control Financing Authority RB (Culp Inc. Project) / (Wachovia Bank LOC) 3.60%, 07/07/98 3,825 3,825 Guilford County, North Carolina Industrial Facilities & Pollution Control Financing Authority RB (Neal Manufacturing Project) / (NationsBank NA LOC) 3.75%, 07/07/98 3,000 3,000 Par Value ------- -------- Johnston County, North Carolina Industrial Facilities & Pollution Control Financing Authority RB(Flanders Corp. Project) / (Suntrust Bank Tampa Bay LOC) 3.70%, 07/07/98 $ 4,500 $ 4,500 North Carolina Educational Facilities Finance Agency RB (High Point University Project) / (Wachovia Bank LOC) 3.50%, 07/07/98 4,900 4,900 North Carolina Medical Care Commission Hospital RB (Pooled Equipment Financing Project) Series 1985 / (Kredietbank LOC) 3.25%, 07/07/98 4,250 4,250 Union County, North Carolina Industrial Facilities & Pollution Control Financing Authority RB (Rock-Tenn Converting County Project) Series 1997 / (Suntrust Bank LOC) 3.70%, 07/07/98 1,750 1,750 -------- 34,625 -------- NORTH DAKOTA -- 0.3% Mercer County, North Dakota National Rural Utility Pollution Control RB (Basin Electric Power Cooperative Antelope Project) Series 1984C / (N.R.U. - C.F.C. Guaranty LOC) 3.65%, 07/07/98 7,800 7,800 Richland County, North Dakota IDRB (Minn-Dak Farmers Co-Op) Series 1986B / (Norwest Bank LOC) 3.90%, 07/07/98 1,000 1,000 Richland County, North Dakota Solid Waste Disposal RB (Minn-Dak Farmers Co-Op) Series 1996A / (Norwest Bank LOC) 3.90%, 07/07/98 11,000 11,000 -------- 19,800 -------- 39 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- OHIO -- 0.7% Cleveland, Ohio Airport System RB Series 1997D / (Toronto Dominion Bank LOC) 3.60%, 07/07/98 $13,530 $ 13,530 Columbus, Ohio Electric System RB Series 1984 / (Union Bank of Switzerland LOC) 3.60%, 07/07/98 6,380 6,380 Ohio Air Quality Development Authority RB (JMG Funding, LP) Series 1994A / (Societe Generale LOC) 3.60%, 07/07/98 2,900 2,900 Ohio Air Quality Development Authority RB (Ltd. Partnership Project) Series 1994B / (Societe Generale LOC) 3.65%, 07/07/98 14,400 14,400 Ohio HFA M/F Housing RB (Kenwood Congregate Retirement Community Project) Series 1985 / (Morgan Guaranty Trust Co.-New York LOC) 3.75%, 07/07/98 2,000 2,000 -------- 39,210 -------- OKLAHOMA -- 0.9% Creek County, Oklahoma Industrial Authority Tax-Exempt IDRB (Henry Vogt Mach Project) Series 1990 / (Wachovia Bank LOC) 3.70%, 07/07/98 2,000 2,000 Garfield County, Oklahoma IDRB (Bank of Commerce Group Inc. Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 7,265 7,265 Muldrow, Oklahoma Public Works Authority IDRB (Oklahoma Foods Project) / (Rabobank Nederland N.V. LOC) 4.05%, 07/07/98 8,000 8,000 Oklahoma Development Finance Authority RB (Shawnee Funding Ltd.) / (Bank of Nova Scotia LOC) 3.70%, 07/07/98 4,000 4,000 Oklahoma State Student Loan Authority RB Student Loan Series 1996A / (SLMA LOC) 3.65%, 07/07/98 20,000 20,000 Par Value ------- -------- Oklahoma State Student Loan Authority RB Student Loan Series A / (MBIA Insurance & SLMA LOC) 3.65%, 07/07/98 $15,100 $ 15,100 Tulsa, Oklahoma IDA RB (Thomas & Betts Project) Series 1991 / (Wachovia Bank LOC) 3.65%, 07/07/98 700 700 -------- 57,065 -------- OREGON -- 0.8% Oregon State Economic Development Authority RB (Pendleton Flour Mills Project) Series 1982 / (Bank of America NT & SA LOC) 3.75%, 07/07/98 7,500 7,500 Oregon State Economic Development Commission Economic & IDRB / (Wachovia Bank LOC) 3.55%, 07/07/98 4,100 4,100 Oregon State Health Housing Educational & Cultural Facilities Authority RB (Quatama Crossing Housing Project) / (U.S. Bank NA LOC) 3.55%, 07/07/98 13,000 13,000 Port of Portland, Oregon IDRB (Schnitzer Steel Project) / (Comerica Bank LOC) 3.20%, 07/07/98 5,000 5,000 Port of Portland, Oregon Special Obligation RB (Portland Bulk Terminals Limited Liability Corp. Project) / (Canadian Imperial Bank of Commerce LOC) 3.60%, 07/07/98 18,100 18,100 -------- 47,700 -------- PENNSYLVANIA -- 4.8% Allegheny County, Pennsylvania IDA Economic Development RB (Saureisen Project) / (Mellon Bank LOC) 3.80%, 07/07/98 485 485 Allegheny County, Pennsylvania IDA RB (Longwood at Oakmont) / (Dresdner Bank LOC) 4.00%, 07/01/98 425 425 40 Par Value ------- -------- Bucks County, Pennsylvania IDA (Klearfold Project) / (Mellon Bank LOC) 3.80%, 07/07/98 $ 2,250 $ 2,250 Bucks County, Pennsylvania IDA RB (Schuman and Sons Project) / (CoreStates Bank NA LOC) 3.65%, 07/07/98 3,405 3,405 Bucks County, Pennsylvania St. Mary Hospital Authority RB (Catholic Healthcare Project) Series 1997B 3.30%, 07/07/98 8,205 8,205 Cambria County, Pennsylvania IDA Resource Recovery RB (Cambria Cogen Co. Project) Series 1989V-2 / (ABN-Amro LOC) 3.65%, 07/07/98 3,400 3,400 Chester County, Pennsylvania IDA RB (Manufacturing Facilities Devault Project) / (CoreStates Bank NA LOC) 3.85%, 07/07/98 1,100 1,100 Dauphin County, Pennsylvania General Authority RB (All Health Pooled Financing Program) / (FSA Insurance & Credit Suisse LOC) 3.60%, 07/07/98 9,270 9,270 Emmaus, Pennsylvania General Authority RB Pooled Loan Series 1996 / (FSA Insurance & Credit Suisse LOC) 3.55%, 07/07/98 8,550 8,550 Montgomery County, Pennsylvania IDA RB (Seton Medical Co.) / (First Union National Bank LOC) 3.30%, 07/07/98 3,100 3,100 Montgomery County, Pennsylvania Redevelopment Authority M/F Housing Revenue Refunding Bonds (Glenmore Assoc. Project) Series A / (FNMA LOC) 3.65%, 07/07/98 1,345 1,345 Northampton County, Pennsylvania IDA RB (Binney & Smith) Series A / (First National Bank of Chicago LOC) 3.80%, 07/07/98 670 670 Northampton County, Pennsylvania IDA RB (Binney & Smith) Series B / (First National Bank of Chicago LOC) 3.80%, 07/07/98 1,000 1,000 Par Value ------- -------- Pennsylvania Economic Development Finance Authority Tax Exempt Facility RB (National Gypsum Co. Shipping Port Project) Series 1997A / (Nationsbank LOC) 3.65%, 07/07/98 $ 8,400 $ 8,400 Pennsylvania Economic Development Finance Authority Tax Exempt Facility RB (National Gypsum Co.) Series 1997B / (Nationsbank LOC) 3.65%, 07/07/98 16,715 16,715 Pennsylvania Energy Development Authority RB (B&W Ebensburg Project) Series 1986 / (Swiss Bank LOC) 3.55%, 07/07/98 19,975 19,975 Pennsylvania Higher Education Assistance Agency Student Loan RB Series 1988A / (SLMA LOC) 3.50%, 07/07/98 15,100 15,100 Pennsylvania Higher Education Assistance Agency Student Loan RB Series 1988B / (SLMA LOC) 3.50%, 07/07/98 54,430 54,430 Pennsylvania Higher Education Assistance Agency Student Loan RB Series 1988C / (SLMA LOC) 3.50%, 07/07/98 40,215 40,215 Pennsylvania Higher Education Assistance Agency Student Loan RB Series 1994A / (SLMA LOC) 3.50%, 07/07/98 21,000 21,000 Pennsylvania Higher Education Assistance Agency Student Loan RB Series 1995A / (SLMA LOC) 3.50%, 07/07/98 2,000 2,000 Pennsylvania Higher Education Assistance Agency Student Loan RB Series 1997A / (SLMA LOC) 3.70%, 07/07/98 37,625 37,625 Pennsylvania State Higher Education Facilities RB (University of Pennsylvania Health Services Project) Series C / (Credit Suisse First Boston LOC ) 3.50%, 07/07/98 10,000 10,000 41 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Sayre, Pennsylvania Health Care Facilities Authority RB (VHA Capital Financing Project) Series 1985F (AMBAC Insurance) 3.50%, 07/07/98 $ 4,100 $ 4,100 Washington County, Pennsylvania Authority Lease Revenue Municipal Facilities Series B1 / (CoreStates LOC) 3.75%, 07/07/98 6,700 6,700 West Cornwall Township, Pennsylvania Municipal Authority RB (Lebanon Valley Crethren) / (CoreStates Bank NA LOC) 3.70%, 07/07/98 745 745 York, Pennsylvania General Authority Pooled Financing RB Series 1996 / (First Union Bank of North Carolina LOC) 3.60%, 07/07/98 6,715 6,715 -------- 286,925 -------- PUERTO RICO -- 0.0% Puerto Rico Commonwealth Highway & Transportation Authority Highway Series 1998A / (AMBAC Insurance & Bank of Nova Scotia SPA) 3.50%, 07/07/98 2,000 2,000 -------- RHODE ISLAND -- 0.5% Rhode Island State Student Loan Authority Higher Education Loan RB Series 1995-1 / (National Westminster Bank PLC LOC) 3.55%, 07/07/98 12,300 12,300 Rhode Island State Student Loan Authority Higher Education Loan RB Series 1996-2 / (National Westminster Bank PLC LOC) 3.55%, 07/07/98 5,000 5,000 Rhode Island State Student Loan Authority Higher Education Loan RB Series 1996-3 / (National Westminster Bank PLC LOC) 3.55%, 07/07/98 15,400 15,400 -------- 32,700 -------- Par Value ------- -------- SOUTH CAROLINA -- 0.5% Dorchester County, South Carolina Pollution Control RB (BOC Group Inc. Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 $ 2,000 $ 2,000 Greenville, South Carolina County & City IDRB (Stevens Aviation Technologty Services Project) / (First Union National Bank LOC) 3.70%, 07/07/98 3,000 3,000 South Carolina Economic Development Authority Hospital Facility RB (Sanders Brothers Construction Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 2,800 2,800 South Carolina Economical Development Authority RB (Advanced Automation Project) Series 1998 / (Wachovia Bank NA LOC) 3.65%, 07/07/98 4,000 4,000 South Carolina Jobs Economic Development Authority IDRB (Electric City Printing Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 3,000 3,000 South Carolina Jobs Economic Development Authority RB / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.30%, 07/07/98 5,500 5,500 South Carolina Jobs Economic Development Authority RB (Thomas & Betts Corp. Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 2,100 2,100 South Carolina State Port Authority RB (Junior Lien) / (South Carolina National Bank LOC) 3.75%, 07/07/98 3,300 3,300 Spartanburg County, South Carolina IDA RB (Bemis, Inc.) / (Wachovia Bank LOC) 3.55%, 07/07/98 4,750 4,750 -------- 30,450 -------- 42 Par Value ------- -------- SOUTH DAKOTA -- 0.3% South Dakota State Health & Educational Facilities Authority RB (Mckenna Hospital) Series 1994 / (MBIA Insurance & Banque Paribas SBPA) 3.60%, 07/07/98 $15,930 $ 15,930 -------- TENNESSEE -- 1.8% Chattanooga, Tennessee Health Education & Housing Facility Board RB (Baylor School Project) / (Suntrust Bank Nashville LOC) 3.60%, 07/07/98 2,195 2,195 Chattanooga, Tennesse IDB RB (National Print Group Inc. Project) / (Suntrust Bank Nashville NA LOC) 3.65%, 07/07/98 2,500 2,500 Franklin County, Tennessee IDB RB (Hi-Tech Project) Series 1997 / (Regions Bank LOC) 3.65%, 07/07/98 7,000 7,000 Jackson County, Tennessee IDB Solid Waste Facilities RB (Ameristeel Corp.) / (NationsBank NA LOC) 3.70%, 07/07/98 5,000 5,000 Knox County, Tennesse Health Education & Housing Facilities RB (Web School of Knoxville Project) Series 1997 / (Trust Co. Bank of Atlanta LOC) 3.60%, 07/07/98 5,000 5,000 Metropolitan Nashville & Davidson County, Tennessee Health & Education Facility Board RB Series A / (FGIC Insurance & Barclays Bank PLC LOC) 3.50%, 07/07/98 1,200 1,200 Metropolitan Nashville & Davidson County, Tennessee IDRB (Bind Technologies Inc.) / (NationsBank of Tennessee NA LOC) 3.75%, 07/07/98 3,750 3,750 Metropolitan Nashville & Davidson County, Tennessee M/F Housing IDRB (Arbor Crest) Series 1985B / (Wachovia Bank LOC) 3.55%, 07/07/98 4,000 4,000 Par Value ------- -------- Metropolitan Nashville & Davidson County, Tennessee M/F Housing IDRB (Arbor Knoll) Series 1985A / (Wachovia Bank LOC) 3.55%, 07/07/98 $ 1,000 $ 1,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1995C1 / (AMBAC Insurance & Kredietbank, N.V. SPA) 3.55%, 07/07/98 5,750 5,750 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1995C2 / (AMBAC Insurance & Kredietbank, N.V. SPA) 3.55%, 07/07/98 4,180 4,180 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1995C3 / (AMBAC Insurance & Kredietbank, N.V. SPA) 3.55%, 07/07/98 10,000 10,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1995E3 / (AMBAC Insurance & Kredietbank, N.V. SPA) 3.55%, 07/07/98 3,000 3,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996A / (AMBAC Insurance & Kredietbank N.V. SPA) 3.55%, 07/07/98 7,000 7,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996D1 / (AMBAC Insurance & Kredietbank N.V. SPA) 3.55%, 07/07/98 3,215 3,215 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996E1 / (AMBAC Insurance & Kredietbank, N.V. SPA) 3.55%, 07/07/98 6,505 6,505 43 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996E4 / (AMBAC Insurance & Kredietbank, N.V. SPA) 3.55%, 07/07/98 $ 3,000 $ 3,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996F1 / (AMBAC Insurance & Kredietbank, N.V. SPA) 3.55%, 07/07/98 9,000 9,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996F2 / (AMBAC Insurance & Kredietbank, N.V. SPA) 3.55%, 07/07/98 9,000 9,000 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series 1996G / (AMBAC Insurance & Kredietbank N.V. SPA) 3.55%, 07/07/98 6,775 6,775 Sevier County, Tennessee Public Building Authority Local Government Public Improvement Bonds Series II-C / (AMBAC Insurance & Kredietbank N.V. SPA) 3.55%, 07/07/98 1,065 1,065 Volunteer State Student Loan Funding Bonds Series 1987 / (Hong Kong & Shang Hai Bank LOC & Marine Midland LOC) 3.95%, 07/07/98 10,600 10,600 -------- 110,735 -------- TEXAS -- 6.3% Amarillo, Texas Health Facilities Corp. Hospital RB (High Plains Baptist Hospital) Series 1985 / (Banque Paribas LOC) 3.75%, 07/07/98 3,100 3,100 Amarillo, Texas Health Facilities Corp. Revenue Refunding Bonds / (Rabobank Nederland N.V. LOC) 3.60%, 07/07/98 3,155 3,155 Par Value ------- -------- Bexar County, Texas Health Facilities Development Corp. RB (Chandler Memorial Home Project) Series 1995 / (Bank One LOC) 3.60%, 07/07/98 $ 4,990 $ 4,990 Brazos River, Texas Higher Education Authority RB Series 1993B1 / (SLMA LOC) 3.50%, 07/07/98 32,800 32,800 Brownsville County, Texas Industrial Development Corp. Revenue Refunding Bonds (Rich Seapak Corp. Project) / (Suntrust Bank Atlanta LOC) 3.70%, 07/07/98 1,250 1,250 Capital Health Facilities Development Corp. RB (Island On Lake Travis Ltd. Project) / (Credit Suisse First Boston LOC) 3.55%, 07/07/98 8,500 8,500 Central Waco, Texas Development Corp. IDRB (H.E. Butt Grocery) / (Texas Commerce Bank, N.A. LOC) 3.55%, 07/07/98 3,050 3,050 Collin County, Texas HFA M/F Housing RB (Huntington Apartments Project) / (Fleet Bank, N.A. LOC) 3.73%, 07/07/98 6,150 6,150 Euless, Texas IDA RB (Ferguson Enterprises, Inc. Project) / (Wachovia Bank LOC) 3.55%, 07/07/98 4,850 4,850 Grand Prairie, Texas IDA IDRB (NTA Leasing Co. Project) Series 1994 / (Texas Commerce Bank, N.A. LOC) 3.70%, 07/07/98 2,040 2,040 Hays, Texas Memorial Health Facilities Development Corp. Hospital RB (AHS Sunbelt Central Texas Medical Center Project) Series 1990A / (Swiss Bank LOC) 3.65%, 07/07/98 8,500 8,500 Hays, Texas Memorial Health Facilities Development Corp. Hospital RB (AHS Sunbelt Central Texas Medical Center Project) Series 1990B / (Swiss Bank LOC) 3.65%, 07/07/98 15,300 15,300 44 Par Value ------- -------- Lavaca-Navidad River Authority, Texas Water Supply System Contract RB (Formosa Plastics Corp. Project) / (Canadian Imperial Bank of Commerce LOC) 3.70%, 07/07/98 $13,600 $ 13,600 North Texas Higher Education Authority Income Tax Student Loan Revenue Refunding Bonds (Texas Student Loan Project) / (Credit Communal de Belgique LOC) 3.45%, 07/07/98 12,300 12,300 North Texas Higher Education Authority Income Tax Student Loan Revenue Refunding Bonds Series 1987A / (Credit Communal de Belgique LOC) 3.50%, 07/07/98 87,750 87,750 North Texas Higher Education Authority Income Tax Student Loan Revenue Refunding Bonds Series 1996B / (AMBAC Insurance & SLMA SBPA) 3.50%, 07/07/98 4,000 4,000 North Texas Higher Education Authority Income Tax Student Loan Revenue Refunding Bonds Series 1996D / (AMBAC Insurance & SLMA SBPA) 3.50%, 07/07/98 4,000 4,000 Panhandle Plains, Texas Higher Education Authority Student Loan RB Series 1991A / (SLMA LOC) 3.50%, 07/07/98 11,500 11,500 Panhandle Plains, Texas Higher Education Authority Student Loan RB Series 1992A1 / (SLMA LOC) 3.50%, 07/07/98 2,400 2,400 Panhandle Plains, Texas Higher Education Authority Student Loan RB Series 1993A / (SLMA LOC) 3.50%, 07/07/98 13,300 13,300 Panhandle Plains, Texas Higher Education Authority Student Loan RB Series 1995A / (SLMA LOC) 3.50%, 07/07/98 18,300 18,300 Par Value ------- -------- Panhandle Plains, Texas Higher Education Authority Student Loan RB Series 1997X / (SLMA LOC) 3.50%, 07/07/98 $14,000 $ 14,000 Robertson County, Texas Industrial Development Corp. IDRB (Sanderson Farms Project) Series 1995 / (Harris Trust & Savings Bank LOC) 3.80%, 07/07/98 4,300 4,300 Silsbee, Texas Health Facilities Development RB (Silsbee Doctor's Hospital) / (Citibank LOC) 3.55%, 07/07/98 6,000 6,000 South Texas Higher Education Authority Student Loan RB / (MBIA Insurance) 3.55%, 07/07/98 65,300 65,300 South Texas Higher Education Authority Student Loan RB Series 1997Z / (MBIA Insurance & SLMA SBPA LOC) 3.55%, 07/07/98 7,000 7,000 Tarrant County, Texas IDRB (Mortex Products Inc. Project) / (Comerica Bank LOC) 3.80%, 07/07/98 4,000 4,000 Texas Health Facilities Development Corp. ACES RB (North Texas Pooled Health) Series 1985B / (Banque Paribas LOC) 3.85%, 07/07/98 18,200 18,200 Trinity River Authority, Texas Pollution Control RB (Lafarge Corp. Project) / (Banque Nationale de Paris LOC) 3.75%, 07/07/98 3,100 3,100 -------- 382,735 -------- UTAH -- 0.9% Salt Lake City, Utah Airport RB Series 1996A / (Union Bank of Switzerland LOC) 3.55%, 07/07/98 2,000 2,000 Utah State Board of Regents Student Loan RB Series 1995L / (AMBAC Insurance & Barclays Bank PLC LOC) 3.50%, 07/07/98 7,975 7,975 45 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Utah State Board of Regents Student Loan RB Series 1996Q / (AMBAC Insurance & Barclays Bank PLC LOC) 3.50%, 07/07/98 $ 8,000 $ 8,000 Utah State Board of Regents Student Loan RB Series 1997R / (AMBAC Insurance & Barclays Bank PLC LOC) 3.50%, 07/07/98 34,255 34,255 -------- 52,230 -------- VERMONT -- 0.1% Vermont Education & Health Buildings Financing Agency (VHA New England) Series 1985G / (AMBAC Insurance & FNB Chicago SBPA) 3.60%, 07/07/98 4,240 4,240 -------- VIRGINIA -- 0.2% Chesterfield County, Virginia IDA IDRB (Erni Components Inc. Project) / (First Union National Bank LOC) 3.70%, 07/07/98 3,000 3,000 King George County, Virgina IDA Solid Waste Disposal Facility (Garnet of Virginia Project) Series 1996 (Morgan Guaranty Trust Co.-New York LOC) 3.55%, 07/07/98 3,700 3,700 Lynchburg, Virginia IDA Hospital Facility RB (First Mortgage VHA Mid-Atlantic States, Inc.) Series 1985A / (AMBAC Insurance & Mellon Bank SBPA) 3.60%, 07/07/98 500 500 Lynchburg, Virgina IDA Hospital Facilities RB (First Mortgage VHA Mid-Atlantic States, Inc.) Series 1985B / (AMBAC Insurance) 3.60%, 07/07/98 400 400 Lynchburg, Virgina IDA Hospital Facilities RB (First Mortgage VHA Mid-Atlantic States, Inc.) Series 1985C / (AMBAC Insurance) 3.60%, 07/07/98 600 600 Staunton, Virginia IDA RB (Diebold Inc.- Staunton Project) Series 1997 3.60%, 07/07/98 2,500 2,500 -------- 10,700 -------- Par Value ------- -------- WASHINGTON -- 3.9% Algona, Washington Economic Development Corp. IDRB (Aitchison Family Partnership Project) / (Wells Fargo Bank LOC) 3.65%, 07/07/98 $ 2,650 $ 2,650 Everett, Washington IDA RB Series 1996 (Partners Trust/Synsor Project) / (Bank of America LOC) 3.75%, 07/07/98 5,000 5,000 King County, Washington Economic Enterprise Corp. RB (Pacific System Project) / (Bank of America NT & SA LOC) 3.65%, 07/07/98 5,000 5,000 King County, Washington Economic Enterprise Corp. RB (Sunrise Project) Series 1997 / (Bank of America NT & SA LOC) 3.75%, 07/07/98 4,100 4,100 King County, Washington HFA M/F Housing RB (Auburn County Apartments) / (U.S. Bank N.A. LOC) 3.80%, 07/01/98 9,150 9,150 Pierce County, Washington Economic Development Corp. RB (Flex-A-Lite Consolidated Project) / (Bank of America LOC) 3.75%, 07/07/98 3,000 3,000 Pierce County, Washington Economic Development Corp. RB (K & M Holdings II Project) Series 1997 / (Wells Fargo Bank LOC) 4.00%, 07/07/98 1,820 1,820 Pierce County, Washington Economic Development Corp. RB (McFarland Cascade Project) / (U.S. Bank of Washington LOC) 3.75%, 07/07/98 2,000 2,000 Port Moses Lake, Washington Public Corp. RB (Moses Lake Industrial Project) Series 1995 / (Bank of America LOC) 3.75%, 07/07/98 3,000 3,000 Port Moses Lake, Washington Public Corp. RB (National Frozen Foods Corporation) / (Bank of America NT & SA LOC) 3.65%, 07/07/98 7,500 7,500 46 Par Value ------- -------- Port of Seattle, Washington Subordinate Lien RB Series 1997 / (Canadian Imperial Bank of Commerce LOC) 3.65%, 07/07/98 $81,530 $ 81,530 Seattle, Washington HDA RB (Capitol Hill Housing Improvement & HRG Project) / (Bank of America NT & SA LOC) 3.75%, 07/07/98 6,420 6,420 Seattle, Washington HDA RB (Casa Pacifica Apartments Project) Series 1997 / (Bank of America NT & SA LOC) 3.75%, 07/07/98 3,350 3,350 Seattle, Washington HDA RB (Holly Park Project) / (Bank of America NT & SA LOC) 3.75%, 07/07/98 7,000 7,000 Spokane County, Washington Industrial Development Corp. (Metal Sales Manufacturing Corp. Project) / (Star Bank LOC) 3.70%, 07/07/98 2,835 2,835 Tacoma, Washington HDA (Keybank Location) / (Key Bank NA LOC) 3.75%, 07/07/98 3,400 3,400 Washington Health Care Facilities Authority RB (Yakima Valley Farm Workers Clinic) Series 1997 / (Bank of America NT & SA LOC) 3.75%, 07/07/98 3,800 3,800 Washington State Economic Development Finance Authority IDRB (Tonkin Building) Series 1997A / (U.S. Bank of Washington LOC) 3.75%, 07/07/98 1,000 1,000 Washington State Economic Development Finance Authority RB (Hamilton Materials Project) / (Bank of America NT & SA LOC) 3.75%, 07/07/98 5,000 5,000 Washington State Economic Development Finance Authority RB (Hunter Douglas Project) Series 1997A / (ABN-Amro Bank N.V. LOC) 3.70%, 07/07/98 3,500 3,500 Par Value ------- -------- 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) 3.55%, 07/07/98 $13,200 $ 13,200 Washington State HFA M/F Housing Mortgage RB (Canyon Lake II) Series 1993A / (U.S. Bank of Washington LOC) 3.75%, 07/07/98 4,565 4,565 Washington State HFA M/F Housing Mortgage RB (Lake Washington Apartments Project) Series 1996 / (Bank of America LOC) 3.75%, 07/07/98 8,750 8,750 Washington State HFA M/F Housing Mortgage RB (Meridian Court Apartments) Series 1996 / (Bank of America LOC) 3.75%, 07/07/98 7,000 7,000 Washington State HFA M/F Housing Mortgage RB (Merrill Gardens Project) Series 1997A / (U.S. Bank of Washington LOC) 3.75%, 07/07/98 2,600 2,600 Washington State HFA M/F Housing Mortgage RB (Rosecreek Apartments Project) / (U.S. Bank NA LOC) 3.75%, 07/07/98 3,570 3,570 Washington State Public Power Supply System Nuclear Project #2 Electric RB / (Credit Suisse First Boston & MBIA Insurance ) 3.50%, 07/07/98 13,735 13,735 Yakama Indian Nation, Washington Confederated Tribes & Bands Demand Obligation (Yakama Forests Products Project) / (Bank of America NT & SA LOC) 3.75%, 07/07/98 9,300 9,300 Yakima County, Washington Public Corp. RB (Hi-Country Foods Project) / (Bank of America LOC) 3.75%, 07/07/98 6,700 6,700 47 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Yakima County, Washington Public Corp. RB (Michaelson Packaging Project) / (Bank of America NT & SA LOC) 3.75%, 07/07/98 $ 4,200 $ 4,200 Yakima County, Washington Public Corp. RB (Printing Press Project) / (Bank of America LOC) 3.75%, 07/07/98 2,700 2,700 -------- 237,375 -------- WEST VIRGINIA -- 0.3% Marion County, West Virginia Solid Waste Disposal Facilities RB (Grant Town Project) Series B / (National Westminster Bank PLC LOC) 3.50%, 07/07/98 11,000 11,000 Marion County, West Virginia Solid Waste Disposal Facilities RB (Grant Town Project) Series D / (National Westminster Bank PLC LOC) 3.50%, 07/07/98 4,300 4,300 West Virginia State Hospital Finance Authority RB (St. Joseph's Hospital Project) Series 1987 / (Bank of West Virginia LOC) 3.60%, 07/07/98 2,000 2,000 -------- 17,300 -------- WISCONSIN -- 0.9% Carlton, Wisconsin Pollution Control RB (Power & Light Co.) 3.65%, 07/07/98 5,800 5,800 Chilton, Wisconsin IDRB (Kaytee Products, Inc. Project) Series 1995 / (Bank One Milwaukee LOC) 3.70%, 07/07/98 1,485 1,485 Colburn, Wisconsin IDRB (Heartland Farms Project) Series 1994 / (Marshall & Ilsley Bank LOC) 3.70%, 07/07/98 6,900 6,900 Fairwater, Wisconsin IDRB (Dean Foods Co. Project) Series 1990 / (Wachovia Bank LOC) 3.55%, 07/07/98 1,450 1,450 Grafton, Wisconsin IDRB (Milwaukee Sign Co. Project) / (Marshall & Ilsley Bank LOC) 3.70%, 07/07/98 1,975 1,975 Par Value ------- -------- Kenosha, Wisconsin IDRB (Asyst Tech. Ltd. Liability Corp. Project) / (LaSalle National Bank LOC) 3.70%, 07/07/98 $ 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) 3.50%, 07/07/98 4,400 4,400 Milwaukee, Wisconsin Redevelopment Authority IDRB (Field Container Corp. LP) Series 1994 / (Northern Trust LOC) 3.70%, 07/07/98 5,000 5,000 Prentice, Wisconsin Industrial Development Revenue Refunding Bonds (Blount, Inc.) Series 1992 / (Morgan Guaranty Trust Co. New York LOC) 3.68%, 07/07/98 1,688 1,688 Rhinelander, Wisconsin IDRB (Lake Shore Inc. Project) / (Australia & New Zealand Bank Group LOC) 3.75%, 07/07/98 2,290 2,290 Wisconsin Housing & Economic Development Authority RB (Ultratec Inc. Project) Series 7 / (Marshall & Ilsley Bank LOC) 3.70%, 07/02/98 3,520 3,520 Wisconsin State Health & Education Facilities Authority RB (Sinai Samaritan) Series 1994A / (Marshall & Ilsley Bank LOC) 3.60%, 07/07/98 12,950 12,950 ---------- 52,458 ---------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $3,819,747) 3,819,747 ---------- TAX-EXEMPT COMMERCIAL PAPER -- 10.3% (b) ARIZONA -- 1.1% Maricopa County, Arizona Pollution Control Authority Revenue Refunding Bonds TECP (Southern California Palo Alto Verde Project) Series 1985G 3.40%, 07/07/98 7,250 7,250 3.60%, 07/08/98 4,000 4,000 3.70%, 07/13/98 33,150 33,150 48 Par Value ------- -------- Maricopa County, Arizona Pollution Control Revenue Refunding Bonds TECP (Southern California Edison Palo Alto Verde Project) Series D 3.65%, 08/11/98 $ 7,550 $ 7,550 Maricopa County, Arizona Pollution Control Revenue Refunding Bonds TECP (Southern California Edison Palo Alto Verde Project) Series E 3.65%, 08/11/98 12,030 12,030 -------- 63,980 -------- FLORIDA -- 0.6% Florida Local Government Finance Commission Pooled TECP Series A / (First Union National Bank LOC) 3.60%, 07/09/98 5,292 5,292 Orange County, Florida HFA Pooled Hospital Loan TECP / (MBIA Insurance & Suntrust Bank SBPA) Put Bond 3.60%, 07/13/98 6,800 6,800 Pinellas County, Florida Educational Facilities / (MBIA Insurance & Credit Suisse SBPA) 3.60%, 07/13/98 12,700 12,700 Sunshine State Governmental Finance Commission TECP / (Multiple Credit Enhancements) 3.60%, 08/10/98 10,000 10,000 -------- 34,792 -------- KANSAS -- 0.2% Burlington, Kansas Pollution Control Revenue Refunding Bonds TECP (Kansas Power & Light Co. Project) Series 1987A / (Toronto-Dominion Bank LOC) 3.70%, 07/13/98 6,100 6,100 Burlington, Kansas Pollution Control Revenue Refunding Bonds TECP (Kansas Power & Light Co. Project) Series 1987B / (Deutsche Bank LOC) 3.40%, 07/07/98 1,200 1,200 3.70%, 07/13/98 5,000 5,000 -------- 12,300 -------- Par Value ------- -------- KENTUCKY -- 0.2% Trimble County, Kentucky Pollution Control Revenue TECP (Louisville G&E Project) Series 1997A 3.65%, 07/09/98 $15,000 $ 15,000 -------- LOUISIANA -- 1.7% Louisiana Adjustable Tender GO Refunding Bonds TECP Series 1991A / (Credit Local de France LOC) 3.85%, 07/01/98 7,530 7,530 3.70%, 07/13/98 10,150 10,150 3.65%, 07/23/98 4,000 4,000 3.70%, 08/11/98 8,420 8,420 Louisiana State Pollution Control Revenue Refunding Bonds TECP (St. James Parish / Texaco Project) Series 1988A 3.50%, 07/21/98 10,000 10,000 Louisiana State Pollution Control Revenue Refunding Bonds TECP (St. James Parish / Texaco Project) Series 1988B 3.50%, 07/21/98 61,030 61,030 -------- 101,130 -------- MINNESOTA -- 0.2% Rochester, Minnesota Health Care Facilities RB TECP (Mayo Foundation / Mayo Medical Center) Series 1992A 3.40%, 07/07/98 2,000 2,000 3.70%, 07/13/98 3,500 3,500 Rochester, Minnesota Health Care Facilities RB TECP (Mayo Foundation / Mayo Medical Center) Series 1992B 3.40%, 07/07/98 3,100 3,100 3.70%, 07/07/98 1,300 1,300 Rochester, Minnesota Health Care Facilities RB TECP (Mayo Foundation / Mayo Medical Center) Series 1992C 3.40%, 07/07/98 4,800 4,800 -------- 14,700 -------- 49 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- NEW YORK -- 2.1% New York City, New York Municipal Assistance Corp. TECP Series 1997K-3 / (Landesbank Hessen-Thuringen Girozentrale LOC) 3.70%, 08/26/98 $ 1,000 $ 1,000 New York State Dormitory Authority RB TECP (Memorial Sloan Kettering Project) Series 1989C / (Chase Manhattan LOC) 3.55%, 07/09/98 11,435 11,435 New York State Environmental TECP / (Multiple Credit Enhancements) 3.65%, 07/07/98 41,100 41,100 3.65%, 07/20/98 20,000 20,000 3.60%, 09/03/98 13,400 13,400 New York State Power Authority TECP Series 2 / (Multiple Credit Enhancements) 3.60%, 08/13/98 5,000 5,000 3.65%, 08/19/98 2,300 2,300 New York State Short Term Series TECP / (Westdeutsche Landesbank LOC) 3.55%, 07/09/98 30,000 30,000 -------- 124,235 -------- NORTH CAROLINA -- 0.4% North Carolina Eastern Municipal Power Agency TECP / (Canadian Imperial Bank of Commerce LOC) 3.50%, 07/14/98 4,700 4,700 North Carolina Eastern Municipal Power Agency System RB / (Multiple Credit Enhancements) 3.50%, 07/15/98 18,400 18,400 3.70%, 08/18/98 2,900 2,900 -------- 26,000 -------- OKLAHOMA -- 0.2% Oklahoma City Industrial & Cultural Trust RB TECP (SSM Health Care) Series B / (MBIA Insurance & Nationsbank LOC) 3.70%, 08/25/98 13,495 13,495 -------- Par Value ------- -------- PENNSYLVANIA -- 0.3% Commonwealth of Pennsylvania GO BAN TECP Series 1997A / (Bayerische Landesbank Girozentrale LOC) 3.65%, 08/20/98 $ 1,600 $ 1,600 Commonwealth of Pennsylvania TECP Series 1997A / (Bayerische Landesbank Girozentrale LOC) 3.55%, 07/13/98 5,500 5,500 Montgomery County, Pennsylvania IDA Pollution Control RB / (Deutsche Bank LOC) 3.70%, 07/08/98 13,010 13,010 -------- 20,110 -------- PUERTO RICO -- 0.3% Goverment Development Bank for Puerto Rico TECP 3.75%, 07/14/98 836 836 3.65%, 07/16/98 15,694 15,694 -------- 16,530 -------- TEXAS -- 2.2% Corpus Christi, Texas Utility System TECP / (Westdeutsche Landesbank LOC) 3.75%, 08/13/98 5,055 5,055 Houston, Texas Water & Sewer TECP Series A / (Swiss Bank & Westdeutsche Landesbank Revolving Credit Agreement) 3.60%, 07/09/98 22,000 22,000 3.65%, 07/15/98 20,800 20,800 3.75%, 07/16/98 11,000 11,000 3.70%, 08/11/98 15,000 15,000 Texas State TECP Series 1997B 3.50%, 08/12/98 21,000 21,000 3.55%, 08/12/98 15,000 15,000 Texas State TRAN TECP Series 1997B 3.65%, 08/12/98 20,000 20,000 -------- 129,855 -------- 50 Par Value ------- -------- UTAH -- 0.8% Utah State GO Highway TECP Series 1998B / (Toronto-Dominion Bank Liquidity) 3.65%, 08/06/98 $50,000 $ 50,000 -------- TOTAL TAX-EXEMPT COMMERCIAL PAPER (Cost $622,127) 622,127 -------- MANDATORY PUT BONDS -- 5.7% (b) DISTRICT OF COLUMBIA -- 0.3% Washington D.C. HFA S/F Put Bond / (AIG Financial Products Corp. LOC) 3.80%, 06/23/99 16,500 16,500 -------- OHIO -- 0.2% Butler County, Ohio M/F RB Put Bond (Wyndtree Apartments Project) / (FGIC Insurance) 3.90%, 01/01/99 5,000 5,000 Franklin County, Ohio M/F Put Bond (Jefferson Place Apartments Project) / (FGIC Insurance & Fifth 3rd Bank LOC) 3.85%, 12/01/98 4,500 4,500 -------- 9,500 -------- RHODE ISLAND -- 0.3% Rhode Island State Student Loan Authority RB Put Bond / (National Westminster LOC) 3.80%, 05/31/99 19,000 19,000 -------- TENNESSEE -- 1.6% Metropolitan Nashville & Davidson County, Tennessee IDRB Put Bonds (Insurance Co. America Project) 3.80%, 11/01/98 5,700 5,700 Tennessee HDA RB Put Bonds (Homeownership Program) Series 1997 3.74%, 06/17/99 40,000 40,000 Tennessee HDA RB Put Bonds (Homeownership Program) Series 1997-2 3.69%, 03/04/99 50,000 50,000 -------- 95,700 -------- Par Value ------- -------- TEXAS -- 2.9% Greater East Texas Higher Education Authority Student Loan RB Put Bonds Series 1992A / (SLMA LOC) 3.90%, 09/01/98 $32,500 $ 32,500 Greater East Texas Higher Education Authority Student Loan RB Put Bonds Series 1992B / (SLMA LOC) 4.00%, 07/01/98 14,000 14,000 Greater East Texas Higher Education Authority Student Loan RB Put Bonds Series 1993A / (SLMA LOC) 3.80%, 05/01/99 48,150 48,150 Greater East Texas Higher Education Authority Student Loan RB Put Bonds Series 1993B2 / (SLMA LOC) 3.80%, 06/01/99 6,500 6,500 Greater East Texas Higher Education Authority Student Loan RB Put Bonds Series 1995 / (SLMA LOC) 3.80%, 05/01/99 27,500 27,500 Greater East Texas Higher Education Authority Student Loan RB Put Bonds Series 1995A / (SLMA LOC) 3.80%, 05/01/99 46,700 46,700 -------- 175,350 -------- WASHINGTON -- 0.1% Washington State Housing Finance Committee S/F Program Put Bonds Series 5A-S / (Bayerische Landesbank Girozentrale LOC) 3.90%, 07/01/98 7,515 7,515 -------- WYOMING -- 0.3% Wyoming Community HDA RB Put Bonds 3.74%, 08/27/98 8,000 8,005 3.78%, 08/27/98 13,500 13,507 -------- 21,512 -------- TOTAL MANDATORY PUT BONDS (Cost $345,077) 345,077 -------- 51 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- -------- TAX AND REVENUE ANTICIPATION NOTES -- 5.6% (b) CALIFORNIA -- 5.1% California School Cash Reserve Program Authority Pooled TRAN / (10% AMBAC Insurance) 3.74%, 07/02/98 $ 90 $ 90 3.80%, 07/02/98 31,000 31,001 3.81%, 07/02/98 20,000 20,000 3.85%, 07/02/98 2,410 2,410 California School Cash Reserve Program Authority Pooled TRAN Series 1997A / (10% AMBAC Insurance (d) 2.98%, 07/02/99 250,000 251,830 -------- 305,331 -------- PENNSYLVANIA -- 0.0% Philadelphia Transportation TRAN Series 1998B (d) 3.63%, 06/30/99 2,500 2,515 -------- DISTRICT OF COLUMBIA -- 0.5% District of Columbia TRAN Series B / (Multiple Credit Enhancements) 3.87%, 09/30/98 30,000 30,045 -------- TOTAL TAX AND REVENUE ANTICIPATION NOTES (Cost $337,891) 337,891 -------- REVENUE BONDS -- 4.5% (b) ALABAMA -- 0.1% Alabama State Public Schools College Authority Capital Improvement RB 3.26%, 11/01/98 5,000 5,014 -------- ARIZONA -- 0.3% Phoenix, Arizona IDA S/F Mortgage RB / (FGIC Insurance LOC) 3.75%, 10/01/98 18,000 18,000 -------- CALIFORNIA -- 0.2% California Higher Education Loan Authority Student Loan RB Series 1995E5 / (SLMA LOC) 3.80%, 06/01/99 10,000 10,000 -------- Par Value -------- -------- DELAWARE -- 0.1% Delaware Transportation Authority System RB / (AMBAC Insurance) 3.84%, 07/01/98 $ 3,645 $ 3,645 -------- FLORIDA -- 0.5% Dade County, Florida Aviation RB / (FSA Insurance) 3.60%, 10/01/98 1,000 1,002 Dade County, Florida Solid Waste System RB / (AMBAC Insurance) 3.72%, 10/01/98 3,000 3,006 Hillsborough County, Florida School Board Sales Tax RB / (AMBAC Insurance) 3.48%, 10/01/98 4,975 4,994 Inland Protection Financing Corp., Florida Special Obligation RB / (FSA Insurance) 3.56%, 07/01/98 9,250 9,250 Orange County, Florida IDA RB (General Accident Insurance Co. of America Project) 3.73%, 11/01/98 3,500 3,500 Osceola County, Florida Capital Improvement RB / (MBIA Insurance) 3.45%, 09/01/98 4,765 4,767 Pinellas County, Florida Resolution Recovery RB Series A / (MBIA Insurance) 3.55%, 10/01/98 1,900 1,913 St. Petersburg, Florida Excise Tax Revenue Refunding Bonds Series 1993 / (FGIC Insurance) 3.50%, 10/01/98 1,300 1,301 Village Center Community Development District Florida Recreational Revenue Refunding Bonds Series 1998A / (MBIA Insurance) 4.00%, 11/01/98 1,910 1,912 -------- 31,645 -------- 52 Par Value -------- -------- GEORGIA -- 0.1% Fulton County, Georgia Revenue Refunding Bonds 3.83%, 01/01/99 $ 2,160 $ 2,165 Georgia Municipal Electric Authority Power RB Series S 3.73%, 01/01/99 1,000 1,011 -------- 3,176 -------- HAWAII -- 0.1% Hawaii State Housing Financing & Development Corp. M/F Housing RB (Nani Mauna Loa Project) Series 1995A / (Citibank LOC) 3.70%, 07/01/98 3,900 3,900 -------- IDAHO -- 0.2% Custer County, Idaho Pollution Control RB (Amoco Project) Series 1983 3.60%, 10/01/98 12,000 12,000 -------- ILLINOIS -- 0.2% Illinois Development Financing Authority RB 3.55%, 09/02/98 6,800 6,800 Illinois Municipal Electric Agency Power Supply System RB / (FSA Insurance) 3.64%, 02/01/99 5,065 5,082 -------- 11,882 -------- IOWA -- 0.0% Iowa Finance Authority Health Care Facilities RB (Genesis Medical Center) / (MBIA Insurance) 3.84%, 07/01/98 375 375 Iowa Finance Authority Health Care Facilities Revenue Refunding Bonds (Nebraska Methodist Health System Project) / (MBIA Insurance) 3.90%, 11/01/98 510 511 -------- 886 -------- KENTUCKY -- 0.1% Maysville, Kentucky Industrial Building RB (Green Tokai Building) / (Bank of America LOC) 3.70%, 07/07/98 5,740 5,740 -------- Par Value -------- -------- LOUISIANA -- 0.0% Baton Rouge, Louisiana Sales & Use Tax Public Improvement RB / (FGIC Insurance) 3.85%, 08/01/98 $ 1,370 $ 1,375 -------- MARYLAND -- 0.0% Maryland State Department of Transportation Authority Construction Transportation Revenue Refunding Bonds 3.67%, 09/01/98 1,520 1,522 -------- MISSOURI -- 0.4% Missouri State Environmental Improvement & Energy Resources Authority Pollution Control RB (Union Electric Co.) Series 1985A / (Swiss Bank LOC) 3.75%, 06/01/99 23,570 23,570 -------- NEBRASKA -- 0.0% Nebraska Investment Finance Authority Health Care Facilities Revenue Refunding Bonds (Nebraska Methodist Health System Project) / (MBIA Insurance) 3.90%, 11/01/98 1,475 1,477 -------- NEW HAMPSHIRE -- 0.0% New Hampshire Municipal Bond Bank RB Series 1995A / (AMBAC Insurance) 3.80%, 08/15/98 2,500 2,504 -------- NEW JERSEY -- 0.2% New Jersey Economic Development Authority RB (Newark Recycling Center Project) 3.95%, 12/15/98 4,600 4,600 New Jersey Health Care Facilities Financing Authority RB (Community Medical Center/Kimball) / (FSA Insurance) 3.50%, 07/01/98 2,445 2,445 3.62%, 07/01/99 1,000 1,008 New Jersey State HFA M/F Housing RB Series 1996A / (AMBAC Insurance) 3.75%, 05/01/99 1,275 1,284 53 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- -------- New Jersey State Transportation Authority RB Series A 3.70%, 12/15/98 $ 2,425 $ 2,439 Port Authority of New York & New Jersey RB Series 106 3.50%, 07/01/98 660 660 Sussex County, New Jersey Municipal Utilities Solid Waste Disposal RB / (MBIA Insurance) 3.68%, 12/01/98 1,000 1,037 -------- 13,473 -------- NEW MEXICO -- 0.4% New Mexico State Severence Tax Revenue Refunding Bonds Series 1997A 3.90%, 07/01/98 22,178 22,178 Sandoval County, New Mexico M/F Housing RB (Meadowlank Apartment Project) Series 1997A / (FGIC Insurance) 3.90%, 08/01/98 1,500 1,500 -------- 23,678 -------- NORTH CAROLINA -- 0.2% North Carolina Eastern Municipal Power Agency System RB 3.80%, 01/01/99 7,830 8,130 -------- OHIO -- 0.1% Cuyahoga County, Ohio Hospital RB (Metro Health System Project) / (MBIA Insurance) 3.70%, 02/15/99 500 504 Ohio State Public Facilities Commission RB (Higher Education Capital Facilities Project) Series II-B 3.50%, 11/01/98 5,200 5,226 -------- 5,730 -------- OREGON -- 0.3% Oregon State Housing & Community Services Department Mortgage RB (S/F Mortgage Program) Series 1997K 3.87%, 12/03/98 18,950 18,950 -------- Par Value -------- -------- PENNSYLVANIA -- 0.3% Allegheny County, Pennsylvania Airport Revenue Refunding Bonds (Pittsburgh International Airport Project) Series 1997A / (MBIA Insurance) 3.65%, 01/01/99 $ 4,150 $ 4,174 Pennsylvania State IDA RB (Economic Development Project) / (AMBAC Insurance) 3.78%, 07/01/98 1,130 1,130 3.82%, 01/01/99 3,000 3,032 Pennsylvania Turnpike RB Series O / (FGIC Insurance) 3.78%, 12/01/98 700 703 Philadelphia, Pennsylvania Parking Authority RB / (AMBAC Insurance) 3.49%, 09/01/98 1,000 1,001 Philadelphia, Pennsylvania Water & Waste RB Series 1997B 3.82%, 08/05/98 3,800 3,800 Philadelphia, Pennsylvania Water & Sewer Revenue Refunding Bonds 15th Series / (MBIA Insurance) 3.83%, 10/01/98 800 806 Union County, Pennsylvania Higher Education Facility Financing Authortiy RB (Bucknell University Project) / (MBIA Insurance) 3.75%, 04/01/99 450 456 University of Pittsburgh, Pennsylvania Revenue Refunding Bonds Series 1997B / (MBIA Insurance) 3.85%, 06/01/99 800 800 -------- 15,902 -------- SOUTH CAROLINA -- 0.0% Piedmont, South Carolina Municipal Power Agency Electric RB Series 1985B / (FGIC Insurance) 3.80%, 01/01/99 2,570 2,595 -------- SOUTH DAKOTA -- 0.0% South Dakota Health & Education Facilty Authority Revenue Refunding Bonds (Rapid City Health & Education Project) / (MBIA Insurance) 3.66%, 09/01/98 1,000 1,001 -------- 54 Par Value -------- -------- TEXAS -- 0.1% San Antonia, Texas Water RB / (Escrowed to Maturity with Government Securities) 3.70%, 05/01/99 $ 4,000 $ 4,169 Texas State Public Finance Authority Building RB / (MBIA Insurance) 3.70%, 02/01/99 2,975 3,022 -------- 7,191 -------- VIRGINIA -- 0.1% Virginia College Building Authority, Virginia Educational Facilities RB (Equipment Leasing Program) 3.75%, 02/01/99 5,950 5,958 Virginia College Building Authority, Virginia Educational Facilities RB (Equipment Leasing Program) Series 1995 3.80%, 08/01/98 2,000 2,002 -------- 7,960 -------- WASHINGTON -- 0.4% Grays Harbor County, Washington Public Utility #001 Electric Revenue Refunding Bonds / (AMBAC Insurance) 3.83%, 01/01/99 1,030 1,033 Washington State Public Power Supply System Revenue Refunding Bonds (Nuclear Project #2) Series 1997A 3.90%, 07/01/98 14,005 14,005 3.70%, 07/01/99 2,500 2,526 Washington State Public Power Supply System Revenue Refunding Bonds (Nuclear Project #2) Series A 4.00%, 07/01/98 3,000 3,000 3.70%, 07/01/99 1,000 1,024 Washington State Public Power Supply System Revenue Refunding Bonds (Nuclear Project #2) Series B 3.90%, 07/01/98 2,275 2,275 -------- 23,863 -------- Par Value -------- -------- WYOMING -- 0.1% Uinta County, Wyoming Hospital Facilities RB (IHC Hospitals Project) 3.70%, 02/15/99 $ 7,350 $ 7,652 -------- TOTAL REVENUE BONDS (Cost $272,461) 272,461 -------- VARIABLE RATE TENDER OPTION BONDS -- 4.2% (a) (c) FLORIDA -- 0.0% Escambia County, Florida HFA S/F Housing TOB / (Merrill Lynch Capital Services LOC) 3.75%, 07/07/98 2,245 2,245 -------- GEORGIA -- 0.1% State of Georgia TOB/(Bankers Trust LOC) 3.67%, 07/07/98 4,000 4,000 -------- HAWAII -- 0.5% Hawaii State Housing Finance & Development Corp. TOBP / (Bank of America LOC) 3.68%, 07/07/98 22,980 22,980 State of Hawaii GO TOB / (Bankers Trust LOC) 3.70%, 07/07/98 7,400 7,400 -------- 30,380 -------- ILLINOIS -- 0.2% Chicago, Illinois Metropolitan Water Reclamation District Greater Chicago GO TOBP (Cook County) (BTP-71) / (Automatic Data Processing, Inc. Tender Offer) 3.70%, 07/07/98 9,870 9,870 -------- MASSACHUSETTS -- 0.3% Massachusetts Water Resources Authority General Revenue Refunding TOB Series 1998B / (CoreStates Bank NA & FSA Insurance) 3.65%, 07/07/98 20,045 20,045 -------- 55 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- -------- MICHIGAN -- 0.1% Monroe County, Michigan Pollution Control TOB (Detroit Edison Co. Project) / (FGIC Insurance & Merrill Lynch Capital Services LOC) 3.73%, 07/07/98 $ 7,455 $ 7,455 -------- MINNESOTA -- 0.1% Minnesota State Various Purpose GO (Sports Health Club Tax) TOBP (BTP-65) / (Automatic Data Processing Inc. LOC) 3.70%, 07/07/98 4,455 4,455 -------- MISSISSIPPI -- 0.2% Mississippi S/F TOB (Home Corp.) Series 1997G / (Bank of America LOC) 3.68%, 07/07/98 12,495 12,495 -------- NEW HAMPSHIRE -- 0.3% New Hampshire State Housing Financing Authority S/F Revenue TOB Series G / (AMBAC Insurance & Bank of America NT & SA LOC) 3.65%, 07/07/98 20,865 20,865 -------- NEW JERSEY -- 0.2% New Jersey Building Authority TOBP (PA-320 Project) / (Merrill Lynch Capital Services LOC) 3.58%, 07/07/98 845 845 New Jersey State GO TOB / (Merrill Lynch Capital Services LOC) 3.58%, 07/07/98 605 605 New Jersey State Transportation Authority TOB / (MBIA Insurance) 3.58%, 07/07/98 4,495 4,495 New Jersey Transportation Authority TOBP (PT-200) / (Bayerische Vereinsbank LOC) 3.58%, 07/07/98 3,675 3,675 -------- 9,620 -------- NEW YORK -- 1.0% New York City, New York GO TOBP (CoreStates Merlot Program) Series 1997C / (CoreStates Bank NA & MBIA Insurance) 3.56%, 07/07/98 28,825 28,825 Par Value -------- -------- New York City, New York Municipal Assistance Corp. TOB / (Merrill Lynch Capital Services LOC) 3.68%, 07/07/98 $ 10,000 $ 10,000 New York City, New York Municipal Assistance Corp. TOBP (BTP-225) 3.60%, 07/07/98 19,800 19,800 -------- 58,625 -------- PENNSYLVANIA -- 0.3% Allegheny County, Pennsylvania Airport TOBP / (MBIA Insurance) 3.68%, 07/07/98 3,645 3,645 Allegheny County, Pennsylvania Airport TOBP (PT-176) / (Bayerische Hypotheken Und Wechsel Bank & MBIA Insurance) 3.68%, 07/07/98 2,930 2,930 Chester County, Pennsylvania Health and Education TOB / (AMBAC Insurance) 3.68%, 07/07/98 1,305 1,305 Philadelphia, Pennsylvania Water & Waste Revenue TOBP (PT-151) Series 1993 / (FSA Insurance) 3.68%, 07/07/98 8,190 8,190 -------- 16,070 -------- PUERTO RICO -- 0.2% Puerto Rico Commonwealth TOB / (FSA Insurance & Merrill Lynch Capital Services LOC) 3.58%, 07/07/98 4,645 4,645 Puerto Rico Commonwealth TOBP (PT 181) / (Bayerische Hypotheken Und Wechsel Bank & MBIA Insurance) 3.58%, 07/07/98 7,325 7,325 -------- 11,970 -------- TEXAS -- 0.6% El Paso Water & Sewer Revenue TOB Series 9 / (Multiple Credit Enhancements LOC) 3.68%, 07/07/98 15,450 15,450 State of Texas GO TOB / (Bankers Trust LOC) 3.70%, 07/07/98 12,205 12,205 56 Par Value -------- -------- Texas State GO General Purpose Public Improvement TOBP (BTP-116) Series 1993B / (Bankers Trust Tender Option LOC) 3.66%, 07/07/98 $10,170 $ 10,170 -------- 37,825 -------- WASHINGTON -- 0.1% Washington State Public Power Supply System Nuclear Project Number 2 Revenue Refunding TOBP (BTP-137) Series 1993B / (Bankers Trust Tender Option LOC) 3.73%, 07/07/98 6,685 6,685 -------- TOTAL VARIABLE RATE TENDER OPTION BONDS (Cost $252,605) 252,605 -------- BOND ANTICIPATION NOTES -- 1.9% (b) KANSAS -- 0.1% Shawnee County, Kansas BAN 3.98%, 05/01/99 2,305 2,307 -------- MASSACHUSETTS -- 0.0% Massachusetts State Turnpike BAN / (Escrowed To Maturity With Government Securities) 3.75%, 06/01/99 2,000 2,022 -------- NEW JERSEY -- 1.7% Atlantic City, New Jersey BAN 3.89%, 08/27/98 9,350 9,355 Delanco Township, New Jersey BAN 3.90%, 12/09/98 900 901 Florence Township, New Jersey BAN Series B 3.85%, 02/12/99 1,618 1,618 Jersey City, New Jersey BAN 3.79%, 01/15/99 10,000 10,011 3.63%, 03/05/99 2,000 2,005 Jersey City, New Jersey School BAN 3.60%, 03/05/99 17,000 17,033 Peapack Gladstone, New Jersey BAN 3.75%, 05/13/99 2,300 2,307 Princeton, New Jersey Borough BAN 3.75%, 08/07/98 4,082 4,084 Rahway Township, New Jersey BAN 3.80%, 12/23/98 3,195 3,202 Par Value -------- -------- Roxbury Township, New Jersey BAN 3.48%, 08/13/98 $15,752 $ 15,757 Seaside Heights, New Jersey BAN Series A 3.75%, 02/19/99 2,330 2,337 Trenton, New Jersey School District BAN 3.90%, 10/01/98 16,849 16,863 Vernon Township, New Jersey Board of Education BAN 3.68%, 12/04/98 8,000 8,011 Vernon Township, New Jersey School District BAN 3.85%, 12/04/98 5,000 5,008 Vineland, New Jersey BAN Series 1997-1998 3.82%, 08/14/98 2,455 2,456 West Windsor-Plainsboro, New Jersey Regional School District BAN 3.58%, 01/27/99 2,000 2,005 -------- 102,953 -------- OHIO -- 0.1% Ottawa Hills, Ohio Local School District BAN 3.80%, 08/05/98 5,000 5,002 -------- SOUTH CAROLINA -- 0.0% Spartanburg, South Carolina County School District BAN 3.75%, 06/22/99 1,400 1,403 -------- TOTAL BOND ANTICIPATION NOTES (Cost $113,687) 113,687 -------- FIXED RATE TENDER OPTION BONDS -- 1.8% (b) (e) CONNECTICUT -- 0.1% Connecticut State GO TOBP Series 1991A (BTP-151) / (Bankers Trust Tender Option) 3.60%, 03/17/99 7,365 7,365 -------- GEORGIA -- 0.3% Georgia State Public Improvement GO TOBP Series 1993B & 1993C (BTP-135) / (Bankers Trust Tender Option) 3.62%, 03/17/99 3,865 3,865 57 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- -------- Georgia State Public Improvement GO TOBP Series 1993B & 1993C (BTP-140) / (Bankers Trust Tender Option) 3.62%, 03/17/99 $ 4,575 $ 4,575 Georgia State Public Improvement GO TOBP Series 1994B (BTP-148) / (Bankers Trust Tender Option & Escrowed to Maturity with Government Securities) 3.62%, 03/17/99 7,100 7,100 -------- 15,540 -------- PENNSYLVANIA -- 0.0% Pennsylvania State University Revenue Refunding Bonds TOB Series 2 / (Rabobank Nederland N.V. LOC) 3.75%, 01/14/99 3,245 3,245 -------- SOUTH CAROLINA -- 0.1% South Carolina State Capital Improvement Revenue Refunding TOBP (BTP-147) Series 1992B / (Bankers Trust Tender Option) 3.62%, 03/17/99 5,370 5,370 -------- TEXAS -- 0.7% Regents of the University of Texas (Permanent University Fund) Revenue TOBP (BTP-143) Series 1993A / (Escrowed to Maturity with Government Securities) 3.65%, 03/17/99 10,685 10,685 Southeast Texas Housing Finance Corp. TOBP (PT-193) / (Banco Santander SA LOC) 3.85%, 05/13/99 13,270 13,270 Texas State Public Finance Authority GO TOBP Series 1994A (BTP-127) / (Bankers Trust Tender Option) 3.62%, 03/17/99 14,980 14,980 -------- 38,935 -------- VIRGINIA -- 0.3% Virginia State Public School Authority School Equipment Financing Notes TOB Series 5 / (Bankers Trust LOC) 3.64%, 02/10/99 19,685 19,685 -------- Par Value -------- -------- WISCONSIN -- 0.3% Wisconsin Housing & Economic Development Authority Home Ownership TOBP (PT-194) / (Banco Santander SA LOC) 3.84%, 05/13/99 $ 15,610 $ 15,610 -------- TOTAL FIXED RATE TENDER OPTION BONDS (Cost $105,750) 105,750 -------- GENERAL OBLIGATIONS -- 1.3% (b) ALABAMA -- 0.1% Alabama State GO 3.58%, 03/01/99 3,000 3,045 -------- ARIZONA -- 0.1% Maricopa County, Arizona GO (School District 210) Series 1995B 3.85%, 07/01/98 3,500 3,500 Pima County Arizona GO / (MBIA Insurance) 3.73%, 07/01/99 3,380 3,414 -------- 6,914 -------- CONNECTICUT -- 0.0% Connecticut State GO 3.78%, 12/15/98 1,500 1,508 -------- DELAWARE -- 0.1% Wilmington, Delaware GO / (MBIA Insurance) 3.54%, 10/01/98 4,455 4,471 -------- FLORIDA -- 0.1% Dade County, Florida School District GO / (MBIA Insurance) 3.50%, 08/01/98 3,985 3,993 -------- GEORGIA -- 0.2% Cherokee County, Georgia School System GO 3.78%, 02/01/99 7,330 7,330 Georgia State GO Series D 3.55%, 11/01/98 1,175 1,188 -------- 8,518 -------- HAWAII -- 0.0% Hawaii County, Hawaii GO Series A / (Escrowed To Maturity & FGIC Insurance) 3.80%, 06/01/99 1,000 1,028 -------- 58 Par Value -------- -------- ILLINOIS -- 0.1% Arlington Heights, Illinois Parking District GO (FGIC Insurance) 3.65%, 12/01/98 $ 1,430 $ 1,432 Bolingbrook Park District, Illinois GO / (MBIA Insurance) 3.80%, 01/01/99 1,650 1,652 Chicago Park, Illinois District GO Refunding Bonds / (FGIC Insurance) 3.83%, 01/01/99 2,000 2,016 Chicago, Illinois School Financing Authority Refunding GO Series 1992A / (FGIC Insurance) 3.75%, 06/01/99 500 509 -------- 5,609 -------- IOWA -- 0.0% Cedar Rapids, Iowa GO 3.80%, 06/01/99 1,445 1,450 -------- MARYLAND -- 0.0% Anne Arundel County, Maryland GO 3.55%, 09/01/98 2,110 2,113 -------- NEVADA -- 0.1% Washoe County, Nevada School District GO / (MBIA Insurance) 3.65%, 08/01/98 3,270 3,273 -------- NEW JERSEY -- 0.0% Hamilton Township, New Jersey GO / (MBIA Insurance) 3.75%, 08/01/98 1,500 1,501 Middletown Township, New Jersey Board of Education GO / (MBIA Insurance) 3.51%, 08/01/98 500 501 -------- 2,002 -------- NEW MEXICO -- 0.1% Albequerque, New Mexico GO Series 1992B 3.65%, 07/01/98 4,000 4,000 -------- NEW YORK -- 0.0% Islip, New York GO / (MBIA Insurance) 3.55%, 08/15/98 1,000 1,002 -------- Par Value -------- -------- OKLAHOMA -- 0.0% Tulsa, Oklahoma GO Refunding Bonds Series 1992B 3.70%, 12/01/98 $ 2,390 $ 2,410 -------- PENNSYLVANIA -- 0.2% Berks County, Pennsylvania GO / (FGIC Insurance) 3.70%, 11/15/98 1,000 1,015 Pennsylvania State GO / (FGIC Insurance) 3.75%, 11/15/98 7,675 7,717 Philadelphia, Pennsylvania School District Refunding GO Series 1993A / (MBIA Insurance) 3.82%, 07/01/98 5,000 5,000 -------- 13,732 -------- SOUTH CAROLINA -- 0.0% Chester County, South Carolina School District GO Refunding Bonds / (AMBAC Insurance) 3.78%, 02/01/99 1,010 1,026 -------- TENNESSEE -- 0.0% Shelby County, Tennessee GO Revenue Refunding Bonds Series A 4.00%, 08/01/98 655 656 -------- TEXAS -- 0.1% Port Neches-Groves, Texas Independent School District GO / (Texas Permanent School Fund LOC) 3.70%, 02/15/99 1,000 1,020 Texas State GO 3.77%, 10/01/98 3,000 3,031 -------- 4,051 -------- WASHINGTON -- 0.1% Thurston County, Washington GO Refunding Bonds / (MBIA Insurance) 3.70%, 08/01/98 2,260 2,262 Washington State Motor Vehicle Tax GO / (Escrowed To Maturity With Government Securities LOC) 3.77%, 03/01/99 1,975 2,016 -------- 4,278 -------- 59 SCHWAB MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- -------- WISCONSIN -- 0.0% Wisconsin State GO 3.75%, 05/01/99 $ 2,000 $ 2,016 ---------- TOTAL GENERAL OBLIGATIONS (Cost $77,095) 77,095 ---------- REVENUE ANTICIPATION NOTES -- 1.2% (b) MASSACHUSETTS -- 1.2% Massachusetts Bay Transportation Authority RAN Series 1998S 3.60%, 02/26/99 75,000 75,309 ---------- TOTAL REVENUE ANTICIPATION NOTES (Cost $75,309) 75,309 ---------- OPTIONAL PUT BONDS -- 1.2% (b) ILLINOIS -- 0.2% Chicago, Illinois GO Put Bond 3.51%, 10/29/98 13,100 13,100 Illinois State GO Put Bond 3.77%, 02/01/99 1,305 1,310 ---------- 14,410 ---------- TEXAS -- 0.8% Grapevine, Texas Industrial Development Corp. Airport RB Put Bonds (Singer County Project) / (Bank of Montreal LOC) 3.90%, 04/01/99 18,975 18,975 Greater East Texas Higher Education Authority Student Loan RB Put Bonds Series 1992B / (SLMA LOC) 3.95%, 09/01/98 6,000 6,000 Greater East Texas Higher Education Authority Student Loan RB Put Bonds Series 1993B-1 / (SLMA LOC) 3.70%, 07/01/98 11,000 11,000 Greater East Texas Higher Education Authority Student Loan RB Put Bonds Series 1995B / (SLMA LOC) 4.00%, 07/01/98 10,000 10,000 ---------- 45,975 ---------- Par Value -------- ---------- WYOMING -- 0.2% Lincoln County, Wyoming Pollution Control RB (Amoco Project) Series 1983 3.59%, 10/01/98 $14,350 $ 14,353 ---------- TOTAL OPTIONAL PUT BONDS (Cost $74,738) 74,738 ---------- CERTIFICATES OF PARTICIPATION -- 0.2% (b) FLORIDA -- 0.0% Seminole County, Florida School Board COP / (MBIA Insurance) 3.53%, 07/01/98 2,315 2,315 ---------- GEORGIA -- 0.0% Atlanta, Georgia COP (Atlanta Pretrial Detention Center Project) / (MBIA Insurance) 3.70%, 12/01/98 1,630 1,639 ---------- OREGON -- 0.2% Multnomah County, Oregon COP 3.55%, 08/01/98 3,840 3,841 ---------- PENNSYLVANIA -- 0.0% Pennsylvania State COP / (FSA Insurance) 3.78%, 05/01/99 1,080 1,099 ---------- TOTAL CERTIFICATES OF PARTICIPATION (Cost $8,894) 8,894 ---------- TAX ANTICIPATION NOTES -- 0.1% (b) KANSAS -- 0.1% Hutchinson, Kansas GO 3.78%, 04/01/99 3,160 3,160 Wichita, Kansas TAN 3.70%, 04/29/99 3,655 3,664 ---------- 6,824 ---------- TOTAL TAX ANTICIPATION NOTES (Cost $6,824) 6,824 ---------- TOTAL INVESTMENTS -- 101.3% (Cost $6,112,205) 6,112,205 ---------- OTHER ASSETS AND LIABILITIES -- (1.3%) Other Assets 212,216 Liabilities (289,709) ---------- (77,493) ---------- NET ASSETS -- 100.0% $6,034,712 ========== SEE ACCOMPANYING NOTES TO STATEMENTS OF NET ASSETS AND NOTES TO FINANCIAL STATEMENTS. 60 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) June 30, 1998 (Unaudited) Par Value ------- -------- VARIABLE RATE OBLIGATIONS -- 56.8% (a) CALIFORNIA -- 56.8% ABAG Financing Authority for Non-Profit Organizations COP (Bentley School) / (Banque Nationale de Paris LOC) 3.70%, 07/07/98 $ 5,230 $ 5,230 ABAG Financing Authority for Non-Profit Organizations COP (Harker School Project) / (First Trust NA LOC) 3.15%, 07/07/98 5,630 5,630 ABAG Financing Authority M/F Housing RB (Mountain View Apartments) Series 1997A / (Comerica Bank LOC) 3.60%, 07/07/98 3,500 3,500 Alameda-Contra Costa, California School Financial Authority COP (Capital Improvement Finance Project) / (Canadian Imperial Bank of Commerce LOC) 3.20%, 07/07/98 850 850 Alameda County, California IDRB (Aitchison Family Project) Series 1993A / (Wells Fargo Bank LOC) 3.55%, 07/07/98 2,840 2,840 Alameda County, California IDRB (Association Heat & Control Project) / (Wells Fargo Bank LOC) 3.55%, 07/07/98 845 845 Alameda County, California IDRB (JMS Family Partners) Series A / (Wells Fargo Bank LOC) 3.55%, 07/01/98 1,400 1,400 Alameda County, California IDRB (Scientific Technology Project) Series 1994A / (Banque Nationale de Paris LOC) 3.55%, 07/07/98 2,840 2,840 Anaheim, California COP (Anaheim Memorial Hospital Assoc. Project) / (AMBAC Insurance & ABN-Amro SPA) 3.10%, 07/07/98 1,070 1,070 Anaheim, California COP (Police Facility Financing Project) / (AMBAC Insurance & ABN AMRO SPA) 3.10%, 07/07/98 750 750 Par Value -------- ---------- Anaheim, California Housing Authority M/F Housing RB (Casa Grande Apartments) Series 1997A / (FNMA Collateral Agreement) 3.40%, 07/07/98 $ 3,795 $ 3,795 Anaheim, California Housing Authority M/F Housing RB (Heritage Village Apartments Project) Series 1992A / (Multiple Credit Enhancements) 3.25%, 07/07/98 3,185 3,185 Anaheim, California Housing Authority M/F Housing RB (Port Trinidad Apartments) Series 1997C / (FNMA Collateral Agreement) 3.40%, 07/07/98 2,140 2,140 Auburn, California Unified School District COP / (Banque Nationale Paris LOC) 3.15%, 07/07/98 10,750 10,750 Avalon, California Community Improvement Agency Tax Allocation RB / (Union Bank of California LOC) 3.90%, 07/07/98 10,225 10,225 Basset, California COP (Union School District Capital Improvement Project) / (Union Bank of California LOC) 4.10%, 07/02/98 6,435 6,435 Big Bear Lake, California IDRB COP (Southwest Gas Corp. Project) Series A / (Union Bank of Switzerland LOC) 3.15%, 07/07/98 27,800 27,800 Burbank, California Redevelopment Agency M/F Housing RB / (FHLB Collateral Agreement) 2.75%, 07/07/98 6,800 6,800 California Alternative Energy Source Financing Authority (GE Capital Corp. Arroyo) Series 1993B 3.05%, 07/07/98 4,860 4,860 California Eastern Water Municipal District Water & Sewer Revenue COP Series 1993B / (FGIC Insurance & Rabobank SPA) 3.00%, 07/07/98 17,000 17,000 California Economic Development Financing Authority (Lion Raisin Project) / (Bank of America NT & SA LOC) 3.60%, 07/07/98 1,000 1,000 61 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- --------- California Finance Authority Pollution Control RB (Pacific Gas & Electric Company) / (Bank of America LOC) 3.35%, 07/01/98 $ 4,000 $ 4,000 California Health Facilities Financing Authority RB (Adventist Health) Series A / (MBIA Insurance & California State Teacher Retirement SPA) 3.50%, 07/07/98 4,000 4,000 California Health Facilities Financing Authority RB (Catholic Health Care) / (MBIA Insurance & Rabobank Nederland Liquidity) 3.00%, 07/07/98 12,400 12,400 California Health Facilities Financing Authority RB (Catholic Health Care) Series 1988C / (MBIA Insurance & Morgan Guaranty Trust SPA) 3.00%, 07/07/98 1,100 1,100 California Health Facilities Financing Authority RB (Catholic Health Care) Series 1996B / (MBIA Insurance & Rabobank Nederland SPA) 3.00%, 07/07/98 10,600 10,600 California Health Facilities Financing Authority RB (Catholic Health Care) Series 1996D / (MBIA Insurance & Rabobank Nederland N.V. SPA) 3.00%, 07/07/98 2,400 2,400 California Health Facilities Financing Authority RB (Catholic Health Care) Series A / (MBIA Insurance & Morgan Guaranty Trust SPA) 3.00%, 07/07/98 1,400 1,400 California Health Facilities Financing Authority RB (Children's Hospital Project) Series 1991 / (MBIA Insurance & Swiss Bank SBPA) 3.00%, 07/07/98 10,150 10,150 California Health Facilities Financing Authority RB (Kaiser Permanente Medical Center) Series 1993A 3.50%, 07/07/98 18,400 18,400 California Health Facilities Financing Authority RB (Kaiser Permanente Medical Center) Series 1993B 3.50%, 07/07/98 19,900 19,900 Par Value -------- ---------- California Health Facilities Financing Authority RB (M/F Housing III) Series 1997B / (Multiple Credit Enhancements) 3.25%, 07/07/98 $ 14,600 $ 14,600 California Health Facilities Financing Authority RB (Scripps Memorial Hospital) Series 1985B / (MBIA Insurance & Morgan Guaranty Trust Co.-New York LOC) 3.20%, 07/07/98 15,120 15,120 California Health Facilities Financing Authority RB (Scripps Memorial Hospital) Series 1991A / (MBIA Insurance & Morgan Guaranty Trust Co.-New York LOC) 3.20%, 07/07/98 1,200 1,200 California Health Facilities Financing Authority RB (Scripps Memorial Hospital) Series 1991B / (MBIA Insurance & Swiss Bank SBPA) 3.20%, 07/07/98 400 400 California Health Facilities Financing Authority RB (St. Francis Hospital) Series 1995E / (MBIA Insurance & Rabobank Nederland N.V. SBPA) 3.00%, 07/07/98 4,800 4,800 California Health Facilities Financing Authority RB (St. Francis Hospital) Series 1995F / (MBIA Insurance & Rabobank Nederland N.V. SBPA) 3.15%, 07/07/98 30,000 30,000 California Health Facilities Financing Authority RB (Sutter Health Project) Series 1990A / (Morgan Guaranty Trust Co.-New York LOC) 3.30%, 07/01/98 1,700 1,700 California Pollution Control Financing Authority RB(Green Team of San Jose Project) / (Wells Fargo Bank LOC) 3.25%, 07/07/98 5,000 5,000 California Pollution Control Financing Authority RB (Pacific Gas & Electric Co. Project) Series 1996B / (Rabobank Nederland N.V. LOC) 3.25%, 07/07/98 119,700 119,700 62 Par Value -------- ---------- California Pollution Control Financing Authority RB (Pacific Gas & Electric) Series A / (Swiss Bank LOC) 3.15%, 07/07/98 $143,000 $ 143,000 California Pollution Control Financing Authority RB (Pacific Gas & Electric) Series B / (Deutsche Bank LOC) 3.40%, 07/01/98 1,000 1,000 California Pollution Control Financing Authority RB (Pacific Gas & Electric) Series C / (North Kredietbank LOC) 3.60%, 07/01/98 7,500 7,500 California Pollution Control Financing Authority RB (Pacific Gas & Electric) Series D 3.35%, 07/01/98 11,400 11,400 California Pollution Control Financing Authority RB (Reynolds Metals Co. Project) Series 1985 / (National Westminster Bank PLC LOC) 3.30%, 07/07/98 1,300 1,300 California Pollution Control Financing Authority RB (Shell Oil Project) Series 1991C 3.25%, 07/01/98 300 300 California Pollution Control Financing Authority RB (Southern California Edison) Series 1986A 3.45%, 07/01/98 6,200 6,200 California Pollution Control Financing Authority RB (Southern California Edison) Series D 3.45%, 07/01/98 400 400 California Pollution Control Financing Authority Resource Recovery RB (Sanger Project) Series 1990A / (Credit Suisse LOC) 3.15%, 07/07/98 2,800 2,800 California Pollution Control Financing Authority Solid Waste Disposal RB (West Valley Project) Series 1997A / (Union Bank of California LOC) 3.25%, 07/07/98 9,400 9,400 California Pollution Control Financing Authority Solid Waste Disposal RB / (Union Bank of California LOC) 3.25%, 07/07/98 13,670 13,670 Par Value -------- ---------- California Pollution Control Financing Authority Solid Waste Disposal RB (Athens Disposal Co. Project) Series 1995A / (Wells Fargo Bank LOC) 3.25%, 07/07/98 $ 19,335 $ 19,335 California Pollution Control Financing Authority Solid Waste Disposal RB (BLT Enterprises Project) Series 1995A / (Wells Fargo Bank LOC) 3.25%, 07/01/98 4,200 4,200 California Pollution Control Financing Authority Solid Waste Disposal RB (Burrtec Waste Industries Project) Series 1995A / (Union Bank of California LOC) 3.25%, 07/07/98 5,010 5,010 California Pollution Control Financing Authority Solid Waste Disposal RB (Colmac Energy Project) Series 1990A / (Swiss Bank LOC) 3.15%, 07/07/98 12,900 12,900 California Pollution Control Financing Authority Solid Waste Disposal RB (Colmac Energy Project) Series 1990B / (Swiss Bank LOC) 3.15%, 07/07/98 11,590 11,590 California Pollution Control Financing Authority Solid Waste Disposal RB (Colmac Energy Project) Series 1990C / (Swiss Bank LOC) 3.15%, 07/07/98 2,490 2,490 California Pollution Control Financing Authority Solid Waste Disposal RB (Contra Costa Services) Series 1995A / (Bank of America LOC) 3.20%, 07/07/98 4,200 4,200 California Pollution Control Financing Authority Solid Waste Disposal RB (Edco Disposal Corp. Project) Series 1996A / (Wells Fargo Bank LOC) 3.25%, 07/01/98 17,400 17,400 California Pollution Control Financing Authority Solid Waste Disposal RB (Equity Stanislaus Project) / (Swiss Bank LOC) 3.70%, 07/01/98 7,000 7,000 63 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- ---------- California Pollution Control Financing Authority Solid Waste Disposal RB (Madera Disposable) Series A / (Bank Boston LOC) 3.35%, 07/07/98 $ 1,800 $ 1,800 California Pollution Control Financing Authority Solid Waste Disposal RB (New United Motor Manufacturing) Series A / (Bank of Tokyo LOC) 4.15%, 07/07/98 4,500 4,500 California Pollution Control Financing Authority Solid Waste Disposal RB (Santa Clara) / (Comerica Bank LOC) 3.20%, 07/07/98 4,495 4,495 California Pollution Control Financing Authority Solid Waste Disposal RB (Santa Clara) / (Wells Fargo Bank LOC) 3.25%, 07/07/98 11,700 11,700 California Pollution Control Financing Authority Solid Waste Disposal RB (Shell Martinez Refining) Series A 3.40%, 07/07/98 10,100 10,100 California Pollution Control Financing Authority Solid Waste Disposal RB (Shell Oil Co. Project) Series 1994A 3.35%, 07/01/98 5,600 5,600 California Pollution Control Financing Authority Solid Waste Disposal RB (Shell Oil Co. Project) Series 1994B 3.35%, 07/01/98 7,800 7,800 California Pollution Control Financing Authority Solid Waste Disposal RB (Shell Oil Co. Martinez Project) Series 1996B / (Shell Corp. Guaranty) 3.35%, 07/01/98 47,800 47,800 California Pollution Control Financing Authority Solid Waste Disposal RB (Solag Disposal Project) Series 1997A / (Wells Fargo Bank LOC) 3.25%, 07/07/98 4,000 4,000 California Pollution Control Financing Authority Solid Waste Disposal RB (Sun Valley Paper) / (Bank of America NT & SA LOC) 3.20%, 07/07/98 1,500 1,500 Par Value -------- ---------- California Pollution Control Financing Authority Solid Waste Disposal RB (Talco Plastics) Series 1997A / (Wells Fargo Bank LOC) 3.55%, 07/07/98 $ 4,300 $ 4,300 California Pollution Control Financing Authority Solid Waste Disposal RB (Tri Community Recycle) / (Comerica Bank LOC) 3.55%, 07/07/98 2,455 2,455 California Pollution Control Financing Authority Solid Waste Disposal RB (Various California Waste Recovery) Series 1996A / (Wells Fargo Bank LOC) 3.25%, 07/07/98 1,810 1,810 California Pollution Control Financing Authority Solid Waste Disposal RB (Western Waste Industrial) Series 1994A / (Union Bank of California LOC) 3.70%, 07/07/98 6,000 6,000 California Pollution Control Financing Authority Solid Waste Disposal RB Series A / (Texas Commerce Bank NA LOC) 3.25%, 07/07/98 10,000 10,000 California State Economic Development Financing Authority (Mannesmann Dematic Corp.) / (Bayerische Landesbank Girozentrale LOC) 3.55%, 07/07/98 3,200 3,200 California State Economic Development Financing Authority IDRB (Calco Project) / (Wells Fargo LOC) 3.85%, 07/07/98 995 995 California State Economic Development Financing Authority IDRB (Gaiser Tool Project) / (Bank of America LOC) 3.55%, 07/07/98 3,270 3,270 California State Economic Development Financing Authority IDRB (Mercury Air Group) / (Bank Boston LOC) 3.30%, 07/02/98 5,000 5,000 California State Economic Development Financing Authority IDRB (Serra Microchassis Project) 3.35%, 07/01/98 1,800 1,800 64 Par Value -------- ---------- California State Economic Development Financing Authority IDRB (Serra Microchassis Project) Series 1997A / (Dresdner Bank AG LOC) 3.35%, 07/01/98 $ 1,900 $ 1,900 California State Economic Development Financing Authority RB (Boyd Furniture) / (Chemical Bank LOC) 3.50%, 07/07/98 8,000 8,000 California State Economic Development Financing Authority RB (Bucks Center for Aging Project) / (California State Teachers Retirement & Canadian Imperial Bank of Commerce LOC) 3.10%, 07/07/98 43,500 43,500 California State Economic Development Financing Authority RB (Costa Macoroni Project) / (Wells Fargo Bank LOC) 3.55%, 07/07/98 3,710 3,710 California State Economic Development Financing Authority RB (Killion Industry's Project) / (Union Bank of California LOC) 4.10%, 07/07/98 6,500 6,500 California Statewide Community Development Authority COP / (Union Bank of California LOC) 4.00%, 07/07/98 2,485 2,485 California Statewide Community Development Authority IDRB (Biocol Investments LP) Series 1997B / (Union Bank LOC) 3.75%, 07/07/98 1,500 1,500 California Statewide Community Development Authority M/F Housing RB (Brookhollow Project) Series H / (Chase Bank of Texas NA LOC) 3.65%, 07/02/98 5,000 5,000 California Statewide Community Development Authority M/F Housing RB (Casa la Palma Project) Series G / (Chase Bank of Texas NA LOC) 3.65%, 07/02/98 7,000 7,000 California Statewide Community Development Authority M/F Housing RB / (Key Bank NA LOC) 3.35%, 07/01/98 2,450 2,450 Par Value -------- ---------- California Statewide Community Development Authority M/F Housing RB (Kimberly Woods Project) Series 1995B / (FNMA Collateral Agreement) 3.35%, 07/07/98 $ 11,400 $ 11,400 California Statewide Community Development Authority M/F Housing RB (Plaza Club Apartments) Series 1997A / (Comerica Bank LOC) 3.75%, 07/07/98 9,000 9,000 California Statewide Community Development Authority RB COP (Kaiser Foundation Hospitals) / Guaranty Agreement Kaiser Foundation Health Plan, Inc.) 3.50%, 07/07/98 19,000 19,000 California Statewide Community Development Authority Revenue Refunding COP (St. Joseph Health System) 3.20%, 07/07/98 8,200 8,200 California Statewide Community Development Corp. IDRB / (California State Teachers Retirement System LOC) 3.55%, 07/07/98 1,000 1,000 California Statewide Community Development Corp. IDRB Series 1998C / (Mellon Bank LOC) 3.55%, 07/07/98 2,250 2,250 California Statewide Community Development Corp. IDRB (13th I Associates Project) / (Union Bank LOC) 3.70%, 07/07/98 5,185 5,185 California Statewide Community Development Corp. IDRB (Aerostar Properties Project) / (Union Bank of California LOC) 3.40%, 07/07/98 4,395 4,395 California Statewide Community Development Corp. IDRB (Agricultural Products, Inc. Project) / (Union Bank of California LOC) 3.75%, 07/07/98 1,400 1,400 65 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- ---------- California Statewide Community Development Corp. IDRB (Arm Inc. Project) Series 1994A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 3.85%, 07/07/98 $ 900 $ 900 California Statewide Community Development Corp. IDRB (Cowden Metal Stamping) / (Union Bank of California LOC) 3.75%, 07/07/98 2,055 2,055 California Statewide Community Development Corp. IDRB (Drip In Irrigation Co.) / (Bank of America NT & SA LOC) 3.55%, 07/07/98 3,600 3,600 California Statewide Community Development Corp. IDRB (D.V. Industries) Series 1994A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 3.85%, 07/07/98 1,315 1,315 California Statewide Community Development Corp. IDRB (Flambeau Airmold Project) / (Norwest Bank Minnesota NA LOC) 3.55%, 07/07/98 2,700 2,700 California Statewide Community Development Corp. IDRB (Industrial Dynamics, Co. Project) / (Union Bank of California LOC) 3.75%, 07/07/98 4,380 4,380 California Statewide Community Development Corp. IDRB (Pacific Handy Cutter Products Project) / (Union Bank of California LOC) 3.75%, 07/07/98 900 900 California Statewide Community Development Corp. IDRB (Packaging Innovation Project) Series 1994A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 3.85%, 07/07/98 2,775 2,775 California Statewide Community Development Corp. IDRB (The Diamond Foods Project) Series 1991 / (Union Bank of California LOC) 3.75%, 07/07/98 1,415 1,415 California Statewide Community Development M/F Housing RB (Rio Vista Apartment Project) Series F / (Chase Bank of Texas NA LOC) 3.65%, 07/07/98 4,000 4,000 Par Value -------- ---------- California Statewide Community Industrial Development Revenue Refunding Bonds (Golden Valley Project) Series A / (Bank of America NT & SA LOC) 3.55%, 07/07/98 $ 2,100 $ 2,100 California Statewide M/F Housing Authority (Sunrise of Moraga) Series 1997G / (Heller Financial Inc. LOC) 3.45%, 07/07/98 3,600 3,600 California Statewide M/F Housing Authority RB (Woodsong Apartments) Series 1997B / (FNMA LOC) 3.40%, 07/07/98 3,427 3,427 California Water Resource Finance Authority / (Credit Suisse First Boston & FSA Insurance) 3.40%, 07/01/98 26,600 26,600 Carlsbad, California M/F Housing Revenue Refunding Bonds COP (La Costa Apartment Project) Series 1993A / (Bank of America LOC) 3.05%, 07/07/98 11,720 11,720 Chula Vista, California IDRB (San Diego Gas & Electric Project) Series 1993A / (Bank of America LOC) 3.25%, 07/07/98 11,800 11,800 Concord, California M/F Housing Mortgage RB (Bel Air Apartments Project) Series 1986A / (Bank of America LOC) 3.30%, 07/07/98 3,000 3,000 Concord, California M/F Housing Authority RB (California Hill Apartments) Series 1989A / (U.S. Bank of Washington LOC) 3.85%, 07/07/98 5,450 5,450 Contra Costa County, California M/F Housing Mortgage RB (El Cerrito Project) Series A / (Bank of America LOC) 3.30%, 07/07/98 980 980 Duarte, California Redevelopment Agency COP (Johnson Duarte Partners Project) Series 1984B / (Bank of America LOC) 3.15%, 07/07/98 1,600 1,600 66 Par Value -------- ---------- Duarte, California Redevelopment Agency COP (Piken Duarte Partners Project) Series 1984A / (Bank of America LOC) 3.15%, 07/07/98 $ 4,250 $ 4,250 Dublin, California Housing Authority M/F Housing RB (Park Siera) Series A / (Kredietbank N.V. LOC) 3.15%, 07/01/98 5,800 5,800 El Cajon, California M/F Housing RB (Pinewood Apartments) / (FHLB LOC) 3.35%, 07/07/98 1,450 1,450 El Cajon, California Redevelopment Bonds M/F Housing RB (Mollison & Madison) / (FHLB LOC) 3.35%, 07/02/98 5,400 5,400 Encinitas, California M/F Housing Revenue Refunding Bonds (Torrey Pines Project) Series A / (Bank of America LOC) 3.00%, 07/07/98 8,100 8,100 Foothill, California Eastern Transportation Corridor Agency Toll Road RB Series 1995B / (Morgan Guaranty Trust Co.-New York LOC) 3.00%, 07/07/98 15,600 15,600 Foothill, California Eastern Transportation Corridor Agency Toll Road RB Series 1995C / (Credit Suisse LOC) 3.10%, 07/07/98 1,500 1,500 Fremont, California M/F Housing Revenue Refunding COP (Amber Court Apartments Project) Series 1990A / (U.S. Bank of California LOC) 3.60%, 07/07/98 10,000 10,000 Fresno, California IDA (Keiser Corp.) / (Comerica Bank LOC) 3.55%, 07/07/98 2,295 2,295 Hayward, California M/F Housing RB (Timbers Apartments) Series A / (Chase Manhattan Bank LOC) 3.10%, 07/01/98 3,700 3,700 Par Value -------- ---------- Indio, California M/F Redevelopment Bonds Refunding Housing Mortgages (Carreon Apartments ) Series 1996A / (Redlands Bank & FHLB LOC) 3.25%, 07/07/98 $ 3,950 $ 3,950 Irvine Ranch, California Improvement Bond Act 1915 RB (Assessment District) / (Canadian Imperial Bank of Commerce LOC) 3.20%, 07/07/98 2,000 2,000 Irvine Ranch, California Improvement Bond Act 1915 RB(Assessment District) / (Canadian Imperial Bank of Commerce LOC) 3.30%, 07/01/98 500 500 Irvine Ranch, California Improvement Bond Act 1915 RB (Assessment District) / (Societe Generale LOC) 3.30%, 07/01/98 9,000 9,000 Irvine Ranch, California Public Facilities & Infrastructure Authority Lease Revenue Capital Improvement Bonds Series 1987 / (National Westminster Bank PLC LOC) 3.20%, 07/07/98 1,600 1,600 Irvine Ranch, California Water District Consolidated District Numbers 140, 240, 105, 250 RB Series 1985B / (Bank of America LOC) 3.30%, 07/01/98 4,900 4,900 Irvine Ranch, California Water District Consolidated Revenue Refunding Bonds Series 1985A1 / (Landesbank Hessen LOC) 3.30%, 07/01/98 400 400 Irvine Ranch, California Water District Consolidated Revenue Refunding Bonds Series 1993A / (Bank of America LOC) 3.25%, 07/01/98 2,500 2,500 Irvine Ranch, California Water District Improvement Bond Limited Obligation No. 97-17 / (Bayerische Vereinsbank LOC) 3.30%, 07/01/98 11,900 11,900 Lancaster, California Redevelopment Agency M/F RB (Woodcreek Garden Apartments Project) Series 1985J / (Bank of Tokyo-Mitsubishi Ltd. LOC) 3.70%, 07/07/98 9,800 9,800 67 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- ---------- Livermore, California COP (Reverse Osmosis Project) / (National Westminster Bank PLC LOC) 3.45%, 07/01/98 $ 1,900 $ 1,900 Livermore, California M/F Housing Revenue Refunding Bonds (Arbors Apartment Project) Series 1991A / (U.S. Bank of Washington LOC) 3.55%, 07/07/98 9,005 9,005 Livermore, California M/F Housing Revenue Refunding Bonds (Diablo Vista Apartments Project) Series 1990A / (Union Bank LOC) 3.55%, 07/07/98 6,950 6,950 Long Beach, California Housing Authority M/F Housing RB (Channel Point Apartments) / (FNMA Collateral Agreement) 3.20%, 07/07/98 6,250 6,250 Los Angeles, California Community Redevelopment Agency (Grand Promenade Project) / (Bank of America LOC) 3.00%, 07/07/98 26,700 26,700 Los Angeles, California Community Redevelopment Agency COP (Baldwin Hills Public Parking Project) Series B / (Wells Fargo Bank LOC) 3.30%, 07/07/98 20,600 20,600 Los Angeles, California Community Redevelopment Agency COP (Broadway Springs Center Project) Series 1987 / (Bank of America LOC) 3.15%, 07/07/98 10,200 10,200 Los Angeles, California M/F Housing RB (Beverly Park Apartments) / (Chemical Bank LOC) 3.15%, 07/07/98 23,100 23,100 Los Angeles, California M/F Housing RB (Lucas Studios Project) Series 1991D / (Bank of America LOC) 3.40%, 07/07/98 3,000 3,000 Los Angeles County, California COP ACES (Los Angeles County Museum of Art Project) Series 1985A / (Bank of America LOC) 3.00%, 07/07/98 3,300 3,300 Par Value -------- ---------- Los Angeles County, California COP ACES (Los Angeles County Museum of Art Project) Series 1985B / (Bank of America LOC) 3.00%, 07/07/98 $ 3,500 $ 3,500 Los Angeles County, California Housing Authority M/F Mortgage RB / (Coast Federal Bank LOC) 3.05%, 07/06/98 1,100 1,100 Los Angeles County, California Housing Authority M/F Housing RB (Malibu Canyon Apartments Project) Series B / (FHLB LOC) 3.05%, 07/07/98 43,600 43,600 Los Angeles County, California Housing Authority M/F Housing RB (Park Sierra Project) / (Citibank LOC) 3.25%, 07/07/98 30,500 30,500 Los Angeles County, California Metropolitan Transportation Authority Revenue Refunding Bonds Series 1993A / (MBIA Insurance & Credit Local de France SPA) 3.00%, 07/07/98 15,000 15,000 Los Angeles County, California M/F Mortgage Revenue Refunding Bonds (Casden Community Complex) Series 1991C / (FHLB LOC) 2.90%, 07/07/98 3,200 3,200 Los Angeles County, California Pension Revenue Refunding Bond Series 1996A / (AMBAC Insurance & Natwest Bank NA SBPA) 3.10%, 07/07/98 4,900 4,900 Los Angeles County, California Pension Revenue Refunding Bonds Series 1996A / (AMBAC Insurance & Bank of Nova Scotia SPA) 3.10%, 07/07/98 1,200 1,200 Madera, California Public Financing Municipal Golf Course Revenue Refinancing Authority / (Union Bank of California LOC) 3.90%, 07/07/98 1,950 1,950 68 Par Value -------- ---------- Metropolitan Water District of Southern California Revenue Refunding Bonds Series 1996A / (ABN-Amro Bank N.V. SBPA & AMBAC Insurance) 3.00%, 07/07/98 $ 7,430 $ 7,430 Metropolitan Water District of Southern California Revenue Refunding Bonds Series 1997C / (Bank of America NT & SA LOC) 2.90%, 07/07/98 5,000 5,000 Modesto, California High School District & Modesto City School District COP (Capital Facilities Project) Series 1991 / (Bank of Tokyo-Mitsubishi Ltd. LOC) 3.15%, 07/07/98 4,775 4,775 Moorpark, California M/F Housing Revenue Refunding Bonds (Le Club Apartments Project) Series A / (Citibank LOC) 3.05%, 07/07/98 6,000 6,000 MSR Public Power Agency Subordinate Lien (San Juan Project) Series 1997D / (MBIA Insurance & NatWest LOC) 3.15%, 07/07/98 1,500 1,500 Northern California Power Agency Public Power Revenue Refunding Bonds (Geothermal Project 3A) / (AMBAC Insurance & Bank of Nova Scotia LOC) 3.10%, 07/07/98 9,945 9,945 Orange County, California Apartment Development RB Series 1985U / (Chemical Bank LOC) 3.20%, 07/07/98 9,200 9,200 Orange County, California Apartment Development RB Series 1985V / (Metropolitan Life Insurance Co. Guarantee) 3.10%, 07/07/98 15,150 15,150 Orange County, California Apartment Development RB Series 1985V / (Wells Fargo Bank LOC) 3.50%, 07/07/98 12,050 12,050 Orange County, California Apartment Development Revenue Refunding Bonds (Jess L. Frost Project) Series 1985B / (Wells Fargo Bank LOC) 3.40%, 07/07/98 8,200 8,200 Par Value -------- ---------- Orange County, California Apartment Development Revenue Refunding Bonds (The Lakes Project #185) Series 1991A / (Citibank LOC) 3.40%, 07/07/98 $ 32,050 $ 32,050 Orange County, California COP (Florence Crittenton Services Project) Series 1990 / (Swiss Bank LOC) 3.20%, 07/07/98 4,300 4,300 Orange County, California M/F Housing RB (Lantern Pines) / (Bank of America NT & SA LOC) 3.00%, 07/07/98 3,500 3,500 Orange County, California Sanitation District COP (Sanitation Districts 1, 2, 3, 5, 6, 7 & 11) Series 1992C / (AMBAC Insurance & Industrial Bank of Japan SBPA) 3.00%, 07/07/98 12,270 12,270 Orange County, California Sanitation District COP (Sanitation Districts 1, 2, 3, 5, 6, 7 & 11) Series C / (FGIC Insurance & FGIC SPA) 3.50%, 07/01/98 3,800 3,800 Panama Buena Vista, California Unified School District COP (1994 Capital Improvement Financing Project) / (Union Bank of California LOC) 4.10%, 07/07/98 4,000 4,000 Petaluma, California Community M/F Housing Authority (Oakmont At Petaluma) / (U.S. Bank NA LOC) 3.55%, 07/07/98 2,550 2,550 Pinole, California Redevelopment Agency M/F Housing RB (East Bluff Apartments Project) / (Comerica Bank LOC) 3.60%, 07/07/98 2,559 2,559 Pleasant Hill, California M/F Housing RB (Brookside Apartments Project) / (FNMA LOC) 3.00%, 07/07/98 5,300 5,300 Pleasant Hill, California Redevelopment Agency M/F Housing (Chateau III Project) Series A / (Commerzbank AG LOC) 3.45%, 07/07/98 1,060 1,060 69 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- ---------- Riverside County, California Community Facilities District #88-4 (Winchester Ranch) / (Kredietbank N.V. LOC) 3.05%, 07/07/98 $ 18,100 $ 18,100 Riverside County, California Housing Authority M/F Housing RB (Briarwood Apartment Project) Series 1985C / (FHLB LOC) 3.40%, 07/07/98 4,500 4,500 Riverside County, California Housing Authority M/F Housing RB (Victoria Springs Apartments Project) / (Bank of America NT & SA LOC) 3.40%, 07/07/98 9,300 9,300 Riverside County, California IDA RB (Calmold Inc Project) / (Union Bank of California LOC) 3.45%, 07/07/98 2,800 2,800 Riverside County, California IDA RB (Cryogenic Project) Series B / (Rabobank Nederland LOC) 3.15%, 07/07/98 4,100 4,100 Riverside County, California M/F Housing RB (Ambergate Apartments) Series 1992A / (Union Bank of California LOC) 3.25%, 07/07/98 3,000 3,000 Riverside County, California M/F Housing RB (Tyler Village Project) / (Chase Manhattan LOC) 3.40%, 07/07/98 7,860 7,860 Sacramento County, California COP (Administration Center & Court House Project) / (Union Bank of Switzerland LOC) 3.15%, 07/07/98 18,100 18,100 Sacramento County, California Housing Authority M/F Housing RB (Chesapeake Commons) Series 1997A / (Bank One LOC) 3.35%, 07/07/98 20,000 20,000 Salinas, California Apartment Development M/F Housing RB (Mariner Villa Project) Series 1985B / (Bank of America LOC) 3.00%, 07/07/98 2,725 2,725 Par Value -------- ---------- San Bernardino County, California COP (Glen Helen Blockbuster Pavilion Project) Series 1994C / (Bank of Tokyo-Mitsubishi Bank LOC) 3.90%, 07/07/98 $ 6,845 $ 6,845 San Bernardino County, California Housing Authority M/F Housing RB (Montclair Heritage) Series 1993A / (FHLB LOC) 3.30%, 07/07/98 4,620 4,620 San Bernardino County, California Housing Authority M/F Housing RB (Rialto Heritage) Series 1993A / (FHLB LOC) 3.30%, 07/02/98 4,330 4,330 San Bernardino County, California M/F Housing RB (Western Properties Project IV) Series 1985 / (Bank of America LOC) 3.00%, 07/07/98 4,100 4,100 San Diego, California Housing Authority M/F Housing RB (La Cima) Series 1985K / (Citibank LOC) 3.05%, 07/07/98 4,005 4,005 San Francisco, California City & County Redevelopment Agency M/F Housing RB (Fillmore Center Project) Series A1 / (Citibank LOC) 3.40%, 07/07/98 26,500 26,500 San Francisco, California City & County Redevelopment Agency M/F Housing RB (Fillmore Center Project) Series A2 / (Citibank LOC) 3.45%, 07/07/98 3,750 3,750 San Francisco, California City & County Redevelopment Agency M/F Housing RB (Rincon Center Apartments) Series 1985B / (Citibank LOC) 3.20%, 07/07/98 8,805 8,805 San Francisco, California Housing Authority M/F Housing RB (Magnolia Plaza) Series A / (Wells Fargo Bank LOC) 3.40%, 07/07/98 4,500 4,500 70 Par Value -------- ---------- San Jose, California M/F Housing RB (Carlton Plaza) Series A / (Commerzbank AG LOC) 3.50%, 07/02/98 $ 5,000 $ 5,000 San Jose, California M/F Housing Revenue Authority (Almaden Lake Apartments) Series 1997A / (Bank of America LOC) 3.40%, 07/07/98 6,500 6,500 San Jose, California M/F Housing RB (Seinna at Renaissance Project) Series 1996A / (Key Bank NA LOC) 3.40%, 07/07/98 12,500 12,500 San Jose, California Redevelopment Agency RB (Merged Area Redevelopment Project) / (Morgan Guaranty Trust Co.-New York LOC) 3.00%, 07/01/98 5,000 5,000 San Jose, California Redevelopment Agency RB (Merged Area Redevelopment Project) Series 1996A / (Morgan Guaranty Trust Co.-New York LOC) 3.20%, 07/07/98 10,600 10,600 San Jose, California Redevelopment M/F Housing (101 San Fernando Apartments) Series A / (Bank One LOC) 3.30%, 07/01/98 28,000 28,000 San Leandro, California M/F Housing RB (Carlton Plaza Project) Series A / (Commerzbank AG LOC) 3.45%, 07/02/98 1,900 1,900 San Lorenzo, California Unified School District COP (Capital Improvement Financing Project) / (Banque Nationale de Paris LOC) 3.60%, 07/07/98 17,000 17,000 Santa Ana, California Unified School District COP (Land Acquisition Project) / (Banque Nationale de Paris LOC) 3.10%, 07/07/98 4,400 4,400 Santa Clara County, California Hospital Facility Authority RB (El Camino Hospital District-Valley Medical Center Project) Series 1985B / (Bayerische Vereinsbank LOC) 3.00%, 07/07/98 7,800 7,800 Par Value -------- ---------- Santa Clara County, California M/F Housing Revenue Refunding Bonds (Brairwood Apartments) Series 1996B / (FNMA LOC) 3.20%, 07/07/98 $ 7,800 $ 7,800 Santa Clara County, California M/F Housing Revenue Refunding Bonds (Grove Garden Apartments) Series 1997A / (FNMA LOC) 3.20%, 07/07/98 14,000 14,000 Santa Cruz County, California Housing Authority M/F Housing RB (Paloma Del Mar Apartments Project) Series 1992A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.15%, 07/07/98 7,700 7,700 Santa Fe Springs, California IDA RB / (Wells Fargo Bank LOC) 3.85%, 07/30/98 4,000 4,000 Santa Rosa, California M/F Housing RB (Quail Run Apartments) Series 1997A / (U.S. Bank of Washington LOC) 3.55%, 07/07/98 4,850 4,850 Southern California Pubic Power Authority RB (Southern Transmission Project) Series 1991 / (AMBAC Insurance & Barclays LOC) 3.10%, 07/07/98 6,100 6,100 Southern California Pubic Power Authority Revenue Refunding Bonds (Palos Verdes Project) Series 1996B / (AMBAC Insurance & Morgan Guaranty SPA) 3.10%, 07/07/98 1,800 1,800 Southern California Pubic Power Authority Revenue Refunding Bonds Series C / (AMBAC Insurance/Morgan Guaranty SPA) 3.10%, 07/07/98 5,400 5,400 Turlock, California Irrigation District COP (Transmission Project, Municipal Utilities - Water & Sewer) Series 1996A / (Societe Generale LOC) 3.20%, 07/07/98 2,100 2,100 Union City, California M/F Housing RB (Greenhaven Apartments) Series 1997A / (FNMA LOC) 3.20%, 07/07/98 10,975 10,975 71 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- ---------- Vallecitos, California Water District (Twin Oaks Reservoir Project) / (Credit Local de France LOC) 3.00%, 07/07/98 $ 2,700 $ 2,700 Victor Valley, California Community College District COP / (Multiple Credit Enhancements) 3.10%, 07/07/98 45,450 45,450 West Sacramento, California Special Class Tax Community Facilities District #6 / (Union Bank of California LOC) 3.20%, 07/07/98 4,250 4,250 West Sacramento, California Special Tax RB / (Wells Fargo Bank LOC) 3.20%, 07/07/98 3,500 3,500 Westminster, California Redevelopment Agency Tax Allocation Community Redevelopment Project / (AMBAC Insurance & Landesbank Hessan SPA) 3.35%, 07/07/98 8,250 8,250 Windsor, California M/F (Oakmont At Windsor) / (Banque Paribas LOC) 3.75%, 07/01/98 700 700 ---------- 1,910,681 ---------- PUERTO RICO -- 0.0% Puerto Rico Commonwealth Highway & Transportation Authority Highway Series 1998A / (AMBAC Insurance & Bank of Nova Scotia SPA) 3.00%, 07/07/98 1,500 1,500 ---------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $1,912,181) 1,912,181 ---------- TAX-EXEMPT COMMERCIAL PAPER -- 25.7% (b) Anaheim, California Electric Revenue TECP / (Bank of America & Morgan Guaranty Trust Co.-New York LOC) 3.40%, 07/31/98 8,500 8,500 California Pollution Control Financing Authority RB TECP (California Edison) Series 1996D / (Union Bank of Switzerland LOC) 3.55%, 08/11/98 7,000 7,000 3.65%, 08/12/98 17,000 17,000 Par Value -------- ---------- California Pollution Control Financing Authority RB TECP (Southern California Edison) Series 1985A 3.55%, 08/19/98 $ 5,400 $ 5,400 3.50%, 08/24/98 12,000 12,000 California Pollution Control Financing Authority RB TECP (Southern California Edison) Series 1985B 3.55%, 08/19/98 2,100 2,100 California Pollution Control Financing Authority Solid Waste Disposal RB TECP (Thermal Energy Development) Series 1988A / (National Westminster Bank PLC LOC) 3.35%, 07/08/98 24,700 24,700 California State GO TECP 3.85%, 07/15/98 40,000 40,000 California State GO TECP / (Multiple Credit Enhancements) 3.60%, 07/07/98 10,000 10,000 3.85%, 07/17/98 47,400 47,400 3.50%, 07/23/98 33,900 33,900 3.50%, 08/10/98 17,500 17,500 East Bay, California Municipal Utility District TECP / (Deutsche Bank LOC) 3.60%, 07/09/98 12,500 12,500 East Bay, California Municipal Utility District TECP / (Westdeutsche Landesbank LOC) 3.65%, 08/12/98 16,700 16,700 3.65%, 09/01/98 34,350 34,350 Long Beach, California Harbor TECP Series 1994A / (Multiple Credit Enhancements) 3.55%, 07/07/98 4,500 4,500 3.65%, 09/01/98 36,350 36,350 Los Angeles, California Waste Water System TECP / (Morgan Guaranty Trust Co.- New York LOC) 3.50%, 07/06/98 34,500 34,500 Los Angeles, California Waste Water System TECP / (Union Bank of Switzerland LOC) 3.60%, 10/07/98 11,900 11,900 72 Par Value -------- ---------- Los Angeles County, California Capital Asset Leasing Corp. Lease Revenue TECP / (Multiple Credit Enhancements) 3.50%, 07/23/98 $ 5,000 $ 5,000 3.55%, 07/31/98 10,250 10,250 Metropolitan Water District of Southern California TECP 3.35%, 07/29/98 10,000 10,000 Orange County, California Local Transportation Authority TECP / (Union Bank of Switzerland LOC) 3.65%, 08/12/98 51,000 51,000 3.60%, 08/25/98 4,600 4,600 Riverside County, California TECP (Teeter Obligation) Series B 3.50%, 08/24/98 28,537 28,537 Sacramento, California Municipal Utility District Electric RB TECP / (Bayerische Landesbank Girozentrale LOC) 3.35%, 08/03/98 55,237 55,237 San Diego County, California TECP (Teeter Obligation) Series B 3.35%, 07/31/98 13,500 13,500 San Francisco, California City & County International Airport TECP Series A / (Bayerische Landesbank Girozentrale LOC) 3.85%, 07/07/98 10,365 10,365 3.50%, 08/25/98 5,170 5,170 San Joaquin County Transportation Authority RB TECP / (Westdeutsche Landesbank LOC) 3.50%, 07/06/98 6,000 6,000 State of California GO TECP / (Multiple Credit Enhancements) 3.35%, 07/31/98 8,000 8,000 3.40%, 07/31/98 15,475 15,475 3.40%, 08/03/98 112,900 112,900 3.45%, 08/03/98 14,900 14,900 3.50%, 08/19/98 20,000 20,000 3.45%, 08/21/98 9,600 9,600 Par Value -------- ---------- University of California Board of Regents TECP Series 1996A / (Multiple Credit Enhancements) 3.25%, 07/08/98 $ 24,000 $ 24,000 3.65%, 09/01/98 35,555 35,555 3.45%, 10/01/98 47,000 47,000 ---------- TOTAL TAX-EXEMPT COMMERCIAL PAPER (Cost $863,389) 863,389 ---------- TAX AND REVENUE ANTICIPATION NOTES -- 11.9% (b) CALIFORNIA -- 10.7% Alameda County, California TRAN 3.50%, 07/22/98 5,000 5,002 3.76%, 07/22/98 20,000 20,007 3.90%, 07/23/98 25,000 25,009 Alameda County, California Transportation Authority TRAN (d) 3.60%, 07/07/99 15,000 15,130 California HFA S/F TRAN / (FSA Insurance) 3.60%, 04/01/99 13,500 13,500 California School Cash Reserve Program Authority Pooled TRAN / (AMBAC Insurance) 3.76%, 07/02/98 8,100 8,100 3.77%, 07/02/98 300 300 3.81%, 07/02/98 20,000 20,000 3.85%, 07/02/98 40,000 40,001 3.86%, 07/02/98 11,400 11,400 3.74%, 07/02/99 (d) 75,000 75,549 Contra Costa County, California Board of Education RB TRANS 3.60%, 06/30/99 (d) 28,358 29,013 Contra Costa County, California TRAN Series A 3.77%, 07/01/98 2,425 2,425 Desert Sands, California Unified School District TRAN 3.80%, 07/07/98 9,200 9,200 Hunting Beach, California TRAN 3.83%, 09/30/98 18,325 18,354 Los Angeles County, California TRAN (d) 3.67%, 06/30/99 30,000 30,239 Orange County, California Fire Authority TRAN Series 1997-1998 3.90%, 09/17/98 4,500 4,503 73 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value -------- ---------- Sacramento County, California TRAN 1997-1998 3.84%, 09/30/98 $ 2,500 $ 2,504 San Diego County, California TRAN Series 1997-1998 / (Multiple Credit Enhancements) 4.49%, 09/30/98 8,500 8,517 San Francisco, California Unified School District TRAN 3.65%, 10/30/98 4,000 4,010 San Joaquin County, California Transportation TRAN 3.40%, 01/15/99 7,000 7,038 Santa Cruz County, California Office of Education TRAN 3.54%, 07/30/98 2,000 2,001 Sutter County, California Office of Education TRAN 3.83%, 10/29/98 7,120 7,135 ---------- 358,937 ---------- PUERTO RICO -- 1.2% Puerto Rico Commonwealth TRAN Series 1997A 3.70%, 07/30/98 5,000 5,003 3.75%, 07/30/98 35,000 35,020 ---------- 40,023 ---------- TOTAL TAX AND REVENUE ANTICIPATION NOTES (Cost $398,960) 398,960 ---------- VARIABLE RATE TENDER OPTION BONDS -- 3.8% (a) (c) California State GO TOB / (MBIA Insurance & Merrill Lynch Capital Services Liquidity) 3.60%, 07/07/98 40,105 40,105 California State GO TOBP (PT-153) / (Banco Santander SA & FSA Insurance) 3.60%, 07/07/98 12,840 12,840 Central Coast, California Water Authority TOBP (PA-326) / (AMBAC Insurance & Merrill Lynch Capital Services Liquidity) 3.58%, 07/07/98 2,250 2,250 Par Value -------- ---------- Contra Costa County, California Public Facilities TOB (Merrithew Memorial Hospital) / (Banco Santander SA LOC) 3.63%, 07/07/98 $ 13,680 $ 13,680 Los Angeles, California Department Water & Power Electric Plant Revenue Refunding Bonds Series 1994 TOBP (BTP-68) / (Automatic Data Processing, Inc. Tender Opion) 3.65%, 07/07/98 5,195 5,195 Los Angeles County, California Metropolitan Transit Authority TOB / (CoreStates Bank NA LOC) 3.60%, 07/07/98 23,830 23,830 Los Angeles, California TOB (Dwap Electric Power Plant) Series 1 / (Multiple Credit Enhancements) 3.60%, 07/07/98 19,995 19,995 Metropolitan Water District of Southern California Revenue Refunding Bonds TOB Series 1996A / (Morgan Guaranty Trust Co. - New York LOC) 3.55%, 07/07/98 3,000 3,000 San Francisco, California Public Utilities Water TOB / (Bayerische Hypotheken Und Wechsel Bank LOC) 3.58%, 07/02/98 7,265 7,265 ---------- TOTAL VARIABLE RATE TENDER OPTION BONDS (Cost $128,160) 128,160 ---------- MANDATORY PUT BONDS -- 1.9% (b) California HFA RB Put Bond Series C / (FGIC Insurance) 3.55%, 02/01/99 5,430 5,430 California HFA RB Put Bond Series E 3.55%, 03/12/99 50,000 49,982 California Pollution Control Financing Authority RB Put Bond 3.65%, 05/15/99 7,515 7,515 California Statewide Community Development Authority M/F Housing RB Put Bond (Octillo Apartments) / (FGIC GIC) 3.90%, 06/01/99 1,000 1,000 ---------- TOTAL MANDATORY PUT BONDS (Cost $63,927) 63,927 ---------- 74 Par Value -------- ---------- FIXED RATE TENDER OPTION BONDS -- 1.1% (b) (e) California State Department Water Resources RB TOBP (BTP-141) (Central Valley Project) Series J3 / (Bankers Trust Tender Option) 3.18%, 06/10/99 $ 5,155 $ 5,155 Los Angeles County, California Transportation Commission Sales Tax RB TOBP (BTP-146) / (Bankers Trust Tender Option & Escrowed to Maturity with Government Securities) 3.60%, 06/10/99 23,078 23,078 Metropolitan Water District Southern California GO Revenue Refunding Bonds TOBP (BTP-115) Series 1993A-1 & 1993A-2 / (Bankers Trust Tender Option) 3.60%, 06/10/99 10,145 10,145 ---------- TOTAL FIXED RATE TENDER OPTION BONDS (Cost $38,378) 38,378 ---------- REVENUE BONDS -- 1.1% (b) CALIFORNIA -- 1.0% California Health Facilities Financing Authority Pre-Refunding RB / (AMBAC Insurance/Escrowed to maturity with Government Securities) 3.50%, 10/01/98 4,000 4,120 California State Public Works RB (Various California State University Projects) 2.62%, 09/01/98 2,000 2,007 Los Angeles, California Airport RB (LAX) Series A 3.69%, 05/15/99 10,000 10,026 Metropolitan Water District of Southern California RB Series 1997A 3.78%, 07/01/98 7,440 7,440 Modesto, California Irrigation District RB Series A / (MBIA Insurance) 3.58%, 10/01/98 4,305 4,310 Orange County, California Apartment RB / (MBIA Insurance) 3.88%, 07/01/98 1,500 1,500 Sacramento, California Municipal Utility District Electric RB Series 1988V / (Escrowed to Maturity with U.S. Treasuries) 3.75%, 08/15/98 2,000 2,050 Par Value -------- ---------- Sacramento, California Municipal Utility District Electric RB Series V / (Escrowed to Maturity with Government Securities) 3.80%, 08/15/98 $ 2,000 $ 2,009 Santa Rosa, California Waste Water Project A / (FGIC Insurance) 3.54%, 09/01/98 1,065 1,065 ---------- 34,527 ---------- PUERTO RICO -- 0.1% Puerto Rico Commonwealth Aqueduct & Sewer RB / (Escrowed to Maturity with U.S. Treasuries) 3.50%, 07/01/98 2,190 2,234 Puerto Rico Commonwealth Highway Authority RB Series P / (Escrowed to Maturity with Government Securities) 3.40%, 07/01/98 550 561 ---------- 2,795 ---------- TOTAL REVENUE BONDS (Cost $37,322) 37,322 ---------- GENERAL OBLIGATIONS -- 1.1% (b) California State GO Series 1997 3.76%, 10/01/98 36,570 36,636 ---------- TOTAL GENERAL OBLIGATIONS (Cost $36,636) 36,636 ---------- CERTIFICATES OF PARTICIPATION -- 0.1% (b) Elsinore Valley, California Municipal Water District COP / (MBIA Insurance) 4.24%, 08/01/98 4,000 4,093 ---------- TOTAL CERTIFICATES OF PARTICIPATION (Cost $4,093) 4,093 ---------- TOTAL INVESTMENTS -- 103.5% (Cost $3,483,046) 3,483,046 ---------- OTHER ASSETS AND LIABILITIES -- (3.5%) Other Assets 40,979 Liabilities (160,260) ---------- (119,281) ---------- NET ASSETS -- 100.0% $3,363,765 ========== SEE ACCOMPANYING NOTES TO STATEMENTS OF NET ASSETS AND NOTES TO FINANCIAL STATEMENTS. 75 SCHWAB NEW YORK MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) June 30, 1998 (Unaudited) Par Value ------- -------- VARIABLE RATE OBLIGATIONS -- 48.9% (a) Albany, New York IDA Adjustable Rate RB (Newkirk Products, Inc.) Series 1995A / (Fleet Bank of New York LOC) 3.55%, 07/07/98 $ 1,000 $ 1,000 Babylon, New York IDA RB (General Microwave) / (National Westminster Bank PLC LOC) 3.45%, 07/07/98 1,100 1,100 Babylon, New York IDA Resource Recovery (Ogden Martin Project) Series 1998 / (FSA Insurance & Chase SBPA) 3.25%, 07/07/98 4,000 4,000 Cortland County, New York IDA RB (General Signal Corp. Project) Series 1983 / (Wachovia Bank LOC) 3.45%, 07/07/98 1,750 1,750 Dutchess County, New York IDA (Trinity Pawling School Corp.) / (Allied Irish Bank PLC LOC) 3.60%, 07/07/98 5,800 5,800 Erie County, New York IDA (Episcopal Life Care Facilities) / (Banque Paribas LOC) 3.35%, 07/07/98 5,000 5,000 Erie County, New York Water Authority Series B / (AMBAC Insurance & National Australia Bank SPA) 3.25%, 07/07/98 3,500 3,500 Franklin County, New York IDA RB (Kes Chateaugay LP Project) Series A / (Bank of Tokyo-Mitsubishi Ltd. LOC) 4.05%, 07/07/98 14,300 14,300 Monroe County, New York IDA RB (ENBI Corp. Lease Rent Project) Series 1988 / (ABN-Amro Bank N.V. LOC) 3.35%, 07/07/98 2,000 2,000 New York City, New York GO Series 1993A9 / (Morgan Guaranty Trust Co.-New York LOC) 3.45%, 07/07/98 1,000 1,000 New York City, New York Health & Hospitals Health System RB Series 1997A / (Morgan Guaranty Trust Co.-New York LOC) 3.20%, 07/07/98 9,100 9,100 Par Value ------- -------- New York City, New York Health & Hospitals Health System RB Series 1997C / (Toronto-Dominion Bank LOC) 3.30%, 07/07/98 $ 5,900 $ 5,900 New York City, New York Housing Development Corp. Series A2 / (Bayerische Hypotheken Und Wechsel Bank LOC) 3.50%, 07/07/98 14,000 14,000 New York City, New York Housing Development Corp. M/F Housing Mortgage RB (Columbus Gardens Project) Series 1993A / (Citibank LOC) 3.35%, 07/07/98 3,165 3,165 New York City, New York Housing Development Corp. M/F Housing Mortgage RB (Parkgate Tower Project) / (Citibank LOC) 3.20%, 07/07/98 8,770 8,770 New York City, New York IDA RB (Allway Tools Inc. Project) / (Citibank LOC) 3.55%, 07/07/98 1,970 1,970 New York City, New York IDA Special Facility RB (Korean Airlines Co. Project) Series 1997A / (Bankers Trust Co. LOC) 3.35%, 07/07/98 19,100 19,100 New York City, New York IDA Special Facility RB (Korean Airlines Co. Project) Series 1997C / (Bankers Trust Co. LOC) 3.60%, 07/07/98 5,700 5,700 New York City, New York M/F Rental Housing RB (Tribeca Tower Project) Series 1997A / (FNMA Collateral Agreement) 3.25%, 07/07/98 18,600 18,600 New York City, New York Municipal Water Finance Authority Water & Sewer System RB Series 1992C / (FGIC Insurance & FGIC SPA) 4.00%, 07/01/98 600 600 New York City, New York Municipal Water Finance Authority Water & Sewer System RB Series C / (FGIC Insurance & FGIC SPA) 4.00%, 07/06/98 4,550 4,550 76 Par Value ------- -------- New York State Dormitory Authority RB (New York Foundling Charitable) / (Allied Irish Bank PLC LOC) 3.35%, 07/07/98 $ 1,000 $ 1,000 New York State Dormitory Authority RB (New York Public Library) Series 1992B / (Canadian Imperial Bank of Commerce LOC) 3.20%, 07/07/98 1,500 1,500 New York State Economic Development Authority / (MBIA Insurance & Credit Suisse SPA) 3.20%, 07/07/98 4,200 4,200 New York State Energy Research & Development Authority Electric Facilities Adjustable Rate RB (Long Island Lighting Co. Project) Series 1993A / (Toronto- Dominion Bank LOC) 3.60%, 07/07/98 3,000 3,000 New York State Energy Research & Development Authority Electric Facilities Adjustable Rate RB (Long Island Lighting Co. Project) Series 1993B / (Toronto Dominion LOC) 3.60%, 07/07/98 6,000 6,000 New York State Energy Research & Development Authority Electric Facilities Adjustable Rate RB (Long Island Lighting Co. Project) Series 1994A / (Union Bank of Switzerland LOC) 3.55%, 07/07/98 1,000 1,000 New York State Energy Research & Development Authority Pollution Control RB (Central Hudson Gas & Electric) Series 1985A / (JP Morgan, Delaware LOC) 3.40%, 07/07/98 10,000 10,000 New York State Energy Research & Development Authority Pollution Control Revenue Refunding Bonds (Orange & Rockland Utilities, Inc. Project) Series 1994A / (FGIC Insurance & Societe Generale LOC) 3.25%, 07/07/98 2,500 2,500 Par Value ------- -------- New York State HFA Housing RB (East 84th Street Project) Series 1995A / (Fleet Bank of New York LOC) 3.30%, 07/07/98 $ 2,600 $ 2,600 New York State HFA Housing RB (Mount Sinai School Of Medicine) Series 1984A / (Chase Bank LOC) 3.40%, 07/07/98 3,600 3,600 New York State HFA Housing RB (Normandie Court II) Series 1987A / (Fleet Bank LOC) 3.20%, 07/07/98 14,400 14,400 New York State HFA Housing RB (Tribeca Landing Project) Series A / (Fleet Bank of New York LOC) 3.25%, 07/07/98 14,000 14,000 New York State HFA M/F Housing RB (Tribeca Park Housing Project) Series 1997A / (Bayerische Hypotheneken Und Wechsel Bank LOC) 3.30%, 07/07/98 12,300 12,300 New York State HFA Housing RB (Union Square South Housing) / (Bayerische Hypotheken Und Wechsel Bank LOC) 3.30%, 07/07/98 18,000 18,000 New York State HFA Housing RB (West 50th Street Project) Series 1997A / (Fleet Bank of New York LOC) 3.30%, 07/07/98 14,800 14,800 New York State Local Government Assistance Corp. RB Series 1993A / (Union Bank of Switzerland LOC & Credit Suisse LOC) 3.20%, 07/07/98 1,795 1,795 New York State Local Government Assistance Corp. RB Series 1994B / (Kredictbank LOC) 3.15%, 07/07/98 1,685 1,685 New York State Local Government Assistance Corp. RB Series 1995B / (Bank of Nova Scotia LOC) 3.15%, 07/07/98 6,800 6,800 New York State Local Government Assistance Corp. RB Series 1995F / (Toronto Dominion LOC) 3.15%, 07/07/98 2,800 2,800 77 SCHWAB NEW YORK MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- New York State Medical Care Facilities Financing Agency Revenue Pooled Equipment Loan Program Series 1 / (Chase Bank LOC) 3.10%, 07/07/98 $ 2,200 $ 2,200 Niagara Falls, New York Bridge Commission RB Series 1993A / (FGIC Insurance & Credit Local de France LOC) 3.25%, 07/07/98 1,400 1,400 Schenectady, New York IDA RB (Fortitech Holding Corp. Project) Series A / (Fleet Bank of New York LOC) 3.55%, 07/07/98 1,300 1,300 St. Lawrence County, New York IDA Environmental Improvement RB (Reynolds Metals Project) / (Royal Bank of Canada LOC) 3.50%, 07/07/98 4,000 4,000 Suffolk County, New York IDA (Episcopal Health Services) Series 1998A / (Banque Paribas LOC) 3.40%, 07/07/98 5,000 5,000 Suffolk County, New York IDA Adjustable Rate IDRB (Nissequogue Cogen) Series 1994 / (Toronto Dominion LOC) 3.40%, 07/07/98 4,600 4,600 Town of Islip, New York Industrial Revenue Magnum Realty (Creative Bath Products) / (Chase Bank LOC) 3.25%, 07/07/98 2,650 2,650 Triborough Bridge & Tunnel Authority, New York Special Obligation Bridge RB Series 1994 / (FGIC Insurance & FGIC SPA) 3.20%, 07/07/98 800 800 Yonkers, New York IDA Civic Facilities RB (Consumers Union Facility Project) Series 1989 / (Credit Local de France LOC) 3.45%, 07/07/98 1,500 1,500 Yonkers, New York IDA Civic Facilities RB (Consumers Union Facility Project) Series 1991 / (Credit Local de France LOC) 3.45%, 07/07/98 700 700 Par Value ------- -------- Yonkers, New York IDA Civic Facilities RB (Consumers Union Facility Project) Series 1994 / (AMBAC Insurance & Credit Local de France SBPA) 3.45%, 07/07/98 $ 1,900 $ 1,900 -------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $278,935) 278,935 -------- TAX-EXEMPT COMMERCIAL PAPER -- 21.5% (b) Long Island, New York Power Authority Electric Systems TECP / (Bayerische Landbank Girozole & Westdeutsche Landesbank LOC) 3.30%, 07/31/98 8,000 8,000 Long Island, New York Power Authority Electric Systems TECP Series 3 / (Bayerische Landesbank Girozentrale & Westdeutsche Landesbank LOC) 3.75%, 08/19/98 14,000 14,000 New York City, New York GO Bonds TECP Series 1994H3 / (FSA LOC & State Street SPA) 3.45%, 07/16/98 1,500 1,500 New York City, New York Municipal Acceptance Corp. TECP Series 1997K3 / (Landesbank Hessen-Thuringen Girozentrale LOC) 3.65%, 08/19/98 3,800 3,800 3.65%, 08/26/98 18,300 18,300 New York City, New York Municipal Water Finance Authority TECP / (Credit Suisse First Boston LOC) 3.60%, 07/15/98 4,000 4,000 New York City, New York Municipal Water Financing Authority TECP Series 3 / (Bank of Nova Scotia LOC) 3.60%, 07/15/98 2,000 2,000 New York State, Enviromental Quality 86 GO TECP Series 1997A / (Bayerische Landesbank & Landesbank Hessen-Thurigen Giro LOC) 3.60%, 07/15/98 5,000 5,000 78 Par Value ------- -------- New York State Environmental Quality 86 Variable Rate GO TECP Series 1997A / (Bayerische Landesbank & Landesbank Hessen-Thurigen Girozentrale LOC) 3.75%, 07/09/98 $ 7,400 $ 7,400 New York State Environmental TECP 3.55%, 07/07/98 12,500 12,500 New York State Power Authority TECP / (Multiple Credit Enhancements) 3.75%, 07/07/98 10,900 10,900 New York State Power Authority TECP Series 2 / (Multiple Credit Enhancements LOC) 3.65%, 08/19/98 17,300 17,300 State of New York Short Term Series GO BAN TECP / (Westdeutsche Landesbank LOC) 3.70%, 07/08/98 7,000 7,000 3.75%, 07/08/98 2,000 2,000 3.75%, 08/07/98 2,200 2,200 New York State Short Term Series TECP / (Westdeutsche Landesbank LOC) 3.55%, 07/09/98 6,700 6,700 -------- TOTAL TAX-EXEMPT COMMERCIAL PAPER (Cost $122,600) 122,600 -------- VARIABLE RATE TENDER OPTION BONDS -- 10.6% (a) (c) Metropolitain Transportation Authority, New York TOBP (PT-177) / (AMBAC Insurance & Bayerische Hypotheken Und Wechsel Bank LOC) 3.68%, 07/07/98 9,265 9,265 New York City, New York GO TOBP (CoreStates Merlot Program) Series 1997C / (CoreStates Bank NA LOC & MBIA Insurance) 3.65%, 07/07/98 15,000 15,000 New York City, New York Municipal Acceptance Corp. TOB / (Merrill Lynch Capital Services Liquidity & Merrill Lynch & Co. Guarantee) 3.68%, 07/07/98 10,700 10,700 Par Value ------- -------- New York City, New York Municipal Water Financing Authority Water & Sewer System Revenue TOB / (Merrill Lynch Capital Services Liquidity & MBIA Insurance) 3.70%, 07/07/98 $ 4,995 $ 4,995 New York City, New York TOBP (BTP-234) / (Bankers Trust Co. Liquidity) 3.60%, 07/07/98 9,590 9,590 New York State Dormitory Authority TOB / (MBIA Insurance / Merrill Lynch Capital Services Liquidity) 3.68%, 07/07/98 2,820 2,820 New York State Medical Care Facility TOB (PT-154) / (FSA Insurance & Banco Santander Liquidity) 3.68%, 07/02/98 3,175 3,175 New York State Metropolitian Transportation Authority TOBP (PT-356) / (MBIA Insurance / Merrill Lynch Capital Services Liquidity) 3.68%, 07/07/98 5,000 5,000 -------- TOTAL VARIABLE RATE TENDER OPTION BONDS (Cost $60,545) 60,545 -------- BOND ANTICIPATION NOTES -- 9.2% (b) Broome County, New York BAN 3.60%, 04/14/99 15,988 16,037 Campbell-Savona, New York Consolidated BAN Series 1997-98 3.95%, 09/03/98 9,000 9,005 Islip, New York BAN Series 1997-1998 3.85%, 07/24/98 5,350 5,351 Niagara-Wheatfield, New York Central School District BAN 3.80%, 12/30/98 5,000 5,011 Oswego County, New York BAN 3.82%, 05/06/99 5,000 5,007 Queensbury, New York Unified School District (Warren County) BAN 3.85%, 08/07/98 8,000 8,003 Union-Endicott County, New York School District BAN 3.80%, 12/29/98 4,300 4,309 -------- TOTAL BOND ANTICIPATION NOTES (Cost $52,723) 52,723 -------- 79 SCHWAB NEW YORK MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- TAX ANTICIPATION NOTES -- 6.2% (b) Nassau County, New York TAN Series B 3.78%, 08/31/98 $ 7,000 $ 7,005 Suffolk County, New York TAN Series 1998I / (Multiple Credit Enhancements) 3.64%, 08/13/98 18,000 18,013 3.65%, 08/13/98 10,000 10,007 -------- TOTAL TAX ANTICIPATION NOTES (Cost $35,025) 35,025 -------- REVENUE BONDS -- 1.4% (b) New York City, New York Municipal Assistance Corp RB Series J 3.70%, 07/01/99 7,000 7,122 New York State Thruway Highway Authority RB (Construction & Reconstruction) Series A / (FSA Insurance) 3.71%, 03/01/99 500 507 -------- TOTAL REVENUE BONDS (Cost $7,629) 7,629 -------- GENERAL OBLIGATIONS -- 1.2% (b) Long Beach County, New York School District GO / (FGIC Insurance) 3.84%, 11/15/98 430 431 Nassau County, New York General Improvement GO Series 1995Q / (FGIC Insurance) 3.37%, 08/01/98 3,990 3,994 Rush-Hennrietta New York Central School District GO / (FSA Insurance) 3.67%, 06/15/99 650 654 Spencerport County, New York School District GO / (FSA Insurance) 3.84%, 11/15/98 545 547 Suffolk County, New York Public Improvement GO Series 1996D / (FGIC Insurance) 3.57%, 08/01/98 1,425 1,426 -------- TOTAL GENERAL OBLIGATIONS (Cost $7,052) 7,052 -------- Value -------- TOTAL INVESTMENTS -- 99.0% (Cost $564,509) $564,509 -------- OTHER ASSETS AND LIABILITIES -- 1.0% Other Assets 7,813 Liabilities (1,998) -------- 5,815 -------- NET ASSETS -- 100.0% $570,324 ======== SEE ACCOMPANYING NOTES TO STATEMENTS OF NET ASSETS AND NOTES TO FINANCIAL STATEMENTS. 80 SCHWAB NEW JERSEY MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) June 30, 1998 (Unaudited) Par Value ------ ------- VARIABLE RATE OBLIGATIONS -- 38.7% (a) Essex County, New Jersey Public Improvement Authority RB (County Asset Sale Project) Series 1995 / (Morgan Guaranty Trust SPA & AMBAC Insurance) 3.45%, 07/07/98 $2,450 $ 2,450 New Jersey Economic Development Authority (Natural Gas Co. Project) / (AMBAC Insurance) 3.50%, 07/07/98 600 600 New Jersey Economic Development Authority (St. James Prep & Social Service Project) Series 1998 / (First Union National Bank of North Carolina LOC) 3.40%, 07/07/98 590 590 New Jersey Economic Development Authority (Wechsler Coffee Corp. Project) Series 1998 / (First Union National Bank of North Carolina LOC) 3.50%, 07/07/98 1,580 1,580 New Jersey Economic Development Authority Natural Gas Facilities RB (New Jersey Natural Gas Company) Series 1998C / (AMBAC Insurance & Bank of New York SPA) 3.35%, 07/07/98 1,000 1,000 New Jersey Economic Development Authority RB (Hoffman Laroche Inc. Project) Series 1993 / (Bayerische Landesbank Girozentrale LOC) 4.00%, 07/07/98 400 400 New Jersey Economic Development Authority RB (Job Haines Home Project) / (PNC Bank LOC) 3.10%, 07/07/98 2,700 2,700 New Jersey Economic Development Authority RB (Public Service Electric & Gas Company Project) Series 1995A / (Swiss Bank LOC & MBIA Insurance) 3.15%, 07/07/98 400 400 New Jersey Economic Development Authority Thermal Energy Facilities RB (Thermal Energy Ltd. Partnership I Project) Series 1997 / (FNB of Chicago LOC) 3.45%, 07/07/98 2,850 2,850 Par Value ------ ------- New Jersey Health Care Facilities Authority (Carrier Foundation) Series C / (Banque Paribas & FGIC Insurance) 3.65%, 07/07/98 $1,340 $ 1,340 New Jersey Health Care Facility Financing Authority Revenue Refunding Bonds (Christian Health Project) Series 1998B / (Valley National Bank LOC) 3.25%, 07/07/98 2,900 2,900 New Jersey State Economic Development Authority Revenue Refunding Bonds (Stolthaven Project) Series 1998A / (Citibank LOC) 4.00%, 07/01/98 2,000 2,000 New Jersey Turnpike Authority RB Series 1991D / (Societe Generale LOC & FGIC Insurance) 3.30%, 07/07/98 1,575 1,575 Salem County, New Jersey Pollution Control Financing Authority RB (Public Service Electric & Gas Project) Series 1997 / (MBIA Insurance & Swiss Bank SPA) 3.30%, 07/07/98 2,000 2,000 Union City, New Jersey Industrial Pollution Control Financing Authority RB / (Exxon Corp. LOC) 3.30%, 07/01/98 1,700 1,700 ------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $24,085) 24,085 ------- BOND ANTICIPATION NOTES -- 19.2% (b) Atlantic City, New Jersey BAN 3.77%, 08/27/98 2,000 2,002 Bridgeton, New Jersey BAN 4.13%, 09/11/98 2,234 2,236 Monroe Township, New Jersey Middlesex County BAN Series 1997-1998 3.54%, 07/30/98 800 801 3.83%, 07/30/98 1,420 1,420 Trenton, New Jersey BAN 3.80%, 10/01/98 2,000 2,002 Vernon Township, New Jersey Board of Education BAN 3.87%, 12/04/98 2,000 2,001 81 SCHWAB NEW JERSEY MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------ ------- Vineland, New Jersey BAN Series 1997-1998 3.66%, 08/14/98 $1,500 $ 1,501 ------- TOTAL BOND ANTICIPATION NOTES (Cost $11,963) 11,963 ------- REVENUE BONDS -- 13.4% (b) NEW JERSEY -- 7.7% New Jersey Health Care Facilities Financing Authority (Community Medical Center/ Kimball) / (FSA Insurance) 4.02%, 07/01/98 1,700 1,700 3.62%, 07/01/99 1,000 1,009 New Jersey State Education Facilities Authority Higher Education Series A / (AMBAC Insurance) 3.70%, 09/01/98 500 501 Port Authority of New York & New Jersey RB Series 106 3.50%, 07/01/98 850 850 Rutgers State University New Jersey Pre-Refunded / (Escrowed with Government Securities) 6.70%, 05/01/99 685 715 ------- 4,775 ------- PUERTO RICO -- 5.7% Puerto Rico Commonwealth Aqueduct & Sewer RB / (Escrowed in U.S. Treasuries) 3.48%, 07/01/98 2,300 2,346 Puerto Rico Commonwealth Highway Authority RB Series P / (Escrowed with Government Securities) 3.63%, 07/01/98 1,200 1,224 ------- 3,570 ------- TOTAL REVENUE BONDS (Cost $8,345) 8,345 ------- Par Value ------ ------- VARIABLE RATE TENDER OPTION BONDS -- 10.9% (a) (c) New Jersey Building Authority TOB (PA-320) / (Merrill Lynch Capital Services Liquidity & Merrill Lynch & Co. Guarantee) 3.58%, 07/02/98 $1,400 $ 1,400 New Jersey State Transportation Authority TOB / (MBIA Insurance & Merrill Lynch Capital Services Liquidity) 3.58%, 07/07/98 2,400 2,400 New Jersey Transportation Authority TOB (PT-200) / (Bayerische Vereinsbank AG Liquidity) 3.58%, 07/02/98 3,000 3,000 ------- TOTAL VARIABLE RATE TENDER OPTION BONDS (Cost $6,800) 6,800 ------- TAX-EXEMPT COMMERCIAL PAPER -- 6.2% (b) NEW JERSEY -- 3.8% New Jersey Education Facilities Authority (Princeton University) TECP Series 1997 3.60%, 07/09/98 1,500 1,500 Port Authority of New York & New Jersey TECP / (Bank of Nova Scotia Revolving Credit Agreement) 3.50%, 09/01/98 890 890 ------- 2,390 ------- PUERTO RICO -- 2.4% Goverment Development Bank for Puerto Rico TECP 3.75%, 07/14/98 1,500 1,500 ------- TOTAL TAX-EXEMPT COMMERCIAL PAPER (Cost $3,890) 3,890 ------- MANDATORY PUT BONDS -- 4.7% (b) New Jersey Economic Development Authority RB (Newark Recycling Center Project) 3.70%, 12/15/98 2,900 2,902 ------- TOTAL MANDATORY PUT BONDS (Cost $2,902) 2,902 ------- 82 Par Value ------ ------- GENERAL OBLIGATIONS -- 4.3% (b) Lower Township, New Jersey GO Bonds 3.65%, 02/01/99 $ 340 $ 341 Middletown Township, New Jersey Board of Education GO / (MBIA Insurance) 3.50%, 08/01/98 500 501 Ocean County, New Jersey GO 3.04%, 09/01/98 500 501 Paterson, New Jersey GO Bonds / (FSA Insurance) 3.55%, 08/15/98 300 300 Somerset County, New Jersey GO Bonds 3.59%, 09/01/98 1,065 1,067 ------- TOTAL GENERAL OBLIGATIONS (Cost $2,710) 2,710 ------- TAX AND REVENUE ANTICIPATION NOTES -- 0.7% (b) PUERTO RICO -- 0.7% Puerto Rico Commonwealth TRAN Series 1997A 3.83%, 07/30/98 450 450 ------- TOTAL TAX AND REVENUE ANTICIPATION NOTES (Cost $450) 450 ------- CERTIFICATES OF PARTICIPATION -- 0.5% (b) Absecon, New Jersey Board of Education COP / (MBIA Insurance & Escrowed to Maturity in Government Securities) 3.75%, 12/15/98 305 309 ------- TOTAL CERTIFICATES OF PARTICIPATION (Cost $309) 309 ------- TOTAL INVESTMENTS -- 98.6% (Cost $61,454) 61,454 ------- OTHER ASSETS AND LIABILITIES -- 1.4% Other Assets 965 Liabilities (117) ------- 848 ------- NET ASSETS -- 100.0% $62,302 ======= SEE ACCOMPANYING NOTES TO STATEMENTS OF NET ASSETS AND NOTES TO FINANCIAL STATEMENTS. 83 SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) June 30, 1998 (Unaudited) Par Value ------- ------- VARIABLE RATE OBLIGATIONS -- 60.3% (a) Allegheny County, Pennsylvania IDA RB (Longwood at Oakmont) / (Dresdner Bank LOC) 4.00%, 07/01/98 $ 275 $ 275 Allegheny County, Pennsylvania IDA RB (Saureisen Project) / (Mellon Bank LOC) 3.80%, 07/07/98 1,115 1,115 Bucks County, Pennsylvania IDA (Klearfold Project) / (Mellon Bank LOC) 3.80%, 07/07/98 1,750 1,750 Bucks County, Pennsylvania, St. Mary Hospital Authority RB, (Catholic Healthcare) Series 1997B / (Morgan Guaranty SPA) 3.00%, 07/07/98 1,795 1,795 Cambria County, Pennsylvania IDA Resource Recovery RB (Cambria Cogen Co. Project) Series 1989V-2 / (ABN-Amro LOC) 3.65%, 07/07/98 2,600 2,600 Chester County, Pennsylvania IDA RB (Manufacturing Facilities Devault Project) / (CoreStates Bank NA LOC) 3.85%, 07/07/98 1,500 1,500 Dauphin County, Pennsylvania RB (All Health Pooled Financing Project) / (FSA Insurance & Credit Suisse SPA) 3.60%, 07/07/98 1,030 1,030 Emmaus General Authority RB Pooled Loan Series 1996 / (FSA Insurance & Credit Suisse SPA) 3.55%, 07/07/98 1,140 1,140 Montgomery County, Pennsylvania IDA (Seton Medical Co.) / (First Union National Bank LOC) 3.30%, 07/07/98 2,400 2,400 Montgomery County, Pennsylvania M/F Housing RB (Glenmore Assoc.) Series A / (FNMA LOC) 3.65%, 07/07/98 2,605 2,605 North Hampton County, Pennsylvania IDA RB (Binney & Smith) Series A / (FNB of Chicago LOC) 3.80%, 07/07/98 2,580 2,580 Par Value ------- ------- Pennsylvania Economic Development Finance Authority Exempt Facility RB (National Gypsum Co.) Series 1997B / (Nationsbank LOC) 3.65%, 07/07/98 $ 1,285 $ 1,285 Pennsylvania Economic Development Financing Authority RB (National Gypsum Co., Shippingport Project) Series 1997A / (NationsBank LOC) 3.65%, 07/07/98 1,600 1,600 Pennsylvania Energy Development Authority RB (B&W Ebensburg Project) Series 1986 / (Swiss Bank LOC) 3.55%, 07/07/98 2,500 2,500 Pennsylvania Energy Development Authority RB (Piney Creek Project) Series 1986C / (Landesbank Hessen - Thuringen Girozentrale LOC) 3.60%, 07/07/98 1,155 1,155 Pennsylvania Higher Education Assistance Agency Student Loan Adjustable Rate RB Series 1997A / (SLMA LOC) 3.70%, 07/07/98 1,175 1,175 Pennsylvania Higher Education Assistance Agency Student Loan RB Series 1988B / (SLMA LOC) 3.50%, 07/07/98 2,070 2,070 Pennsylvania Higher Education Assistance Agency Student Loan RB Series 1988C / (SLMA LOC) 3.50%, 07/07/98 1,885 1,885 West Cornwall Township, Pennsylvania Municipal Authority RB (Lebanon Valley Crethren) / (CoreStates Bank NA LOC) 3.70%, 07/07/98 1,200 1,200 York County, Pennsylvania General Authority Pooled Financing RB Series 1996 / (First Union National Bank of North Carolina LOC) 3.60%, 07/07/98 2,600 2,600 ------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $34,260) 34,260 ------- 84 Par Value ------- ------- REVENUE BONDS -- 14.2% (b) Allegheny County, Pennsylvania Airport Revenue Refunding Bonds (Pittsburgh International Airport Project) Series 1997A / (MBIA Insurance) 4.10%, 01/01/99 $ 2,050 $ 2,062 Dover Township, Pennsylvania Sewer Authority RB / (MBIA Insurance) 3.70%, 11/01/98 110 110 Gettysburg, Pennsylvania Municipal Authority Guaranteed Hospital RB (Gettysburg Hospital Project) Series 1994 / (MBIA Insurance) 3.69%, 01/01/99 250 250 Lehigh County, Pennsylvania General Purpose Authority Revenue Refunding Bonds (Good Shephard Rehabilitation Hospital Project) / (AMBAC Insurance) 3.68%, 11/15/98 150 150 Pennsylvania State HFA S/F & M/F Housing RB Series 49 4.11%, 10/01/98 300 300 Pennsylvania State Higher Education Facility RB (Medical College Project) / (Escrowed with Government Securities) 3.68%, 03/01/99 1,000 1,050 Pennsylvania State IDA RB (Economic Development Project) / (AMBAC Insurance) 4.06%, 07/01/98 100 100 3.75%, 01/01/99 500 506 Pennsylvania Turnpike RB Series C / (Escrowed with Government Securities & FGIC Insurance) 3.65%, 12/01/98 1,500 1,554 Pennsylvania Turnpike RB Series O / (FGIC Insurance) 3.63%, 12/01/98 1,300 1,306 Philadelphia, Pennsylvania Water & Sewer Revenue Refunding Bonds 15th Series / (MBIA Insurance) 3.65%, 10/01/98 200 202 Par Value ------- ------- Pittsburgh & Allegheny County, Pennsylvania Revenue Refunding Bonds Series 1991A / (AMBAC Insurance) 4.09%, 07/15/98 $ 500 $ 500 ------- TOTAL REVENUE BONDS (Cost $8,090) 8,090 ------- VARIABLE RATE TENDER OPTION BONDS -- 11.8% (a) (c) Allegheny County, Pennsylvania Airport Revenue TOBP (PA-329) / (MBIA Insurance & Merrill Lynch Capital Services Liquidity) 3.68%, 07/07/98 1,850 1,850 Altoona, Pennsylvania Water Authority Revenue TOBP (PA-321) / (Merrill Lynch Capital Services Liquidity & FGIC Insurance) 3.68%, 07/07/98 1,700 1,700 Chester County, Pennsylvania Health & Education Revenue TOBP (PA-327) / (AMBAC Insurance & Merrill Lynch Capital Services Liquidity) 3.68%, 07/07/98 1,700 1,700 Philadelphia, Pennsylvania Water & Waste Revenue TOBP (PT-151) Series 1993 / (FSA Insurance & Merrill Lynch Capital Services Liquidity) 3.68%, 07/07/98 1,480 1,480 ------- TOTAL VARIABLE RATE TENDER OPTION BONDS (Cost $6,730) 6,730 ------- GENERAL OBLIGATIONS -- 5.5% (b) Allegheny County, Pennsylvania Unlimited GO Series C-43 / (MBIA Insurance) 3.58%, 09/15/98 600 601 Central Dauphin School District GO 2.77%, 06/01/99 1,000 1,018 Donegal, Pennsylvania School District / (FSA Insurance)(d) 3.79%, 04/01/99 250 250 Pennsylvania State GO / (FGIC Insurance) 3.75%, 11/15/98 1,000 1,005 85 SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- ------- Pennsylvania State GO Third Series 3.13%, 09/01/98 $ 250 $ 250 ------- TOTAL GENERAL OBLIGATIONS (Cost $3,124) 3,124 ------- TAX-EXEMPT COMMERCIAL PAPER -- 5.4% (b) PENNSYLVANIA -- 3.7% Commonwealth of Pennsylvania TECP Series 1997A (Bayerische Landesbank Revolving Credit Agreement) 3.65%, 08/20/98 1,600 1,600 Montgomery County, Pennsylvania IDA Pollution Control RB TECP / (Deutsche Bank LOC) 3.70%, 07/08/98 500 500 ------- 2,100 ------- PUERTO RICO -- 1.7% Government Development Bank for Puerto Rico TECP 3.75%, 07/14/98 940 940 ------- TOTAL TAX-EXEMPT COMMERCIAL PAPER (Cost $3,040) 3,040 ------- TAX AND REVENUE ANTICIPATION NOTES -- 5.2% (b) PENNSYLVANIA -- 4.4% Philadelphia, Pennsylvania TRAN Series A (d) 3.64%, 06/30/99 2,500 2,515 ------- PUERTO RICO -- 0.8% Puerto Rico Commonwealth TRAN Series 1997A 3.48%, 07/30/98 450 450 ------- TOTAL TAX AND REVENUE ANTICIPATION NOTES (Cost $2,965) 2,965 ------- Par Value ------- ------- CERTIFICATES OF PARTICIPATION -- 1.6% (b) Pennsylvania State COP Series A (AMBAC Insurance / Commerzbank SBPA) 3.73%, 07/01/99 $ 900 $ 906 ------- TOTAL CERTIFICATES OF PARTICIPATION (Cost $906) 906 ------- OPTIONAL PUT BONDS -- 0.4% (b) Philadelphia, Pennsylvania Water & Waste Variable Rate RB Series 1997B / (AMBAC Insurance & Commerzbank SPA) 3.74%, 08/05/98 200 203 ------- TOTAL OPTIONAL PUT BONDS (Cost $203) 203 ------- TOTAL INVESTMENTS -- 104.4% (Cost $59,318) 59,318 ------- OTHER ASSETS AND LIABILITIES -- (4.4%) Other Assets 404 Liabilities (2,880) ------- (2,476) ------- NET ASSETS -- 100.0% $56,842 ======= SEE ACCOMPANYING NOTES TO STATEMENTS OF NET ASSETS AND NOTES TO FINANCIAL STATEMENTS. 86 SCHWAB FLORIDA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) June 30, 1998 (Unaudited) Par Value ------- -------- VARIABLE RATE OBLIGATIONS -- 60.4% (a) FLORIDA -- 39.9% Alachua County, Florida Health Facilities Authority RB (Shands Teaching Hospital Clinic Project) Series 1996 / (MBIA Insurance / Suntrust Bank Central Florida LOC) 3.50%, 07/07/98 $ 5,900 $ 5,900 Arcadia, Florida Hospital RB (Desoto Memorial Hospital Project) / (First Union National Bank LOC) 3.60%, 07/07/98 3,775 3,775 Broward County, Florida HFA M/F Housing RB (Harbor Town of Jacaranda Project) Series 1995B / (Southtrust Bank NA LOC) 3.60%, 07/07/98 3,000 3,000 Broward County, Florida Indian Trace Community Development (Basin 1 Water Project) / (MBIA Insurance & Swiss Bank Corp. LOC) 3.40%, 07/07/98 2,400 2,400 Broward County, Florida Suburban Port Facilities Series 1998 (Port Everglades) / (AMBAC Insurance / Bank of Nova Scotia LOC) 3.45%, 07/07/98 10,000 10,000 Citrus Park, Florida Community Development District Capital Improvement Bonds Series 1996 / (Dresdner Bank AG LOC) 3.50%, 07/07/98 1,700 1,700 Collier County, Florida HFA M/F Housing RB (River Beach Project) Series 1985 / (Morgan Guaranty Trust Co.-New York LOC) 3.55%, 07/07/98 300 300 Dade County, Florida Aviation Series 1984A / (Morgan Guaranty Trust Co.-New York LOC) 3.50%, 07/07/98 2,240 2,240 Dade County, Florida Health Facilities Authority Hospital RB (Miami Children's Hospital) Series 1995 / (AMBAC Insurance / Suntrust Bank Central Florida SBPA) 3.40%, 07/07/98 450 450 Par Value ------- -------- Dade County, Florida IDA RB (Dolphins Stadium Project) Series 1985C / (Societe Generale LOC) 3.55%, 07/07/98 $ 1,050 $ 1,050 Dade County, Florida IDA RB (June Leasing Corp.) Series 1995 / (First Union National Bank LOC) 3.70%, 07/07/98 1,175 1,175 Dade County, Florida IDA RB (Micheal-Ann Russell Jewish Community Center Project) Series 1997 3.60%, 07/07/98 300 300 Duval County, Florida HFA M/F Housing RB (Lakes Mayport Apartment) Series 1985 / (Suntrust Banks Inc. LOC) 3.60%, 07/07/98 1,200 1,200 Florida Capital Financing Authority RB (Capital Project Loan Program Project) Series 1997A / (FSA Insurance) 3.55%, 07/07/98 5,700 5,700 Florida Development Finance Corp. IDRB (Pioneer Ram Project) Series 1998A3 / (Suntrust Bank Central Florida NA LOC) 3.65%, 07/07/98 1,500 1,500 Florida HFA Housing RB (Ashley Lake II Project) Series 1989J / (Barclays Bank LOC) 3.65%, 07/07/98 10,700 10,700 Florida HFA Housing RB (Heron Park Project) Series 1996U / (NationsBank LOC) 3.65%, 07/07/98 3,300 3,300 Florida HFA Housing RB (Tiffany Club Project) Series 1996P / (NationsBank LOC) 3.65%, 07/07/98 2,875 2,875 Florida HFA M/F Housing RB (Cornerstone Imaging) Series 1985BB / (NationsBank LOC) 3.35%, 07/07/98 535 535 Florida Municipal Power Agency Revenue Refunding Bonds (Stanton II Project) Series 1997 / (AMBAC Insurance) 3.50%, 07/07/98 200 200 87 SCHWAB FLORIDA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- Florida Ocean Highway & Port Authority RB Series 1990 / (ABN-Amro Bank N.V. LOC) 3.55%, 07/07/98 $ 9,000 $ 9,000 Gainesville, Florida IDA (Exactech Inc. Project) / (Suntrust Bank Atlanta LOC) 3.70%, 07/07/98 1,900 1,900 Gulf Breeze, Florida Local Government Loan Program Series 1985C / (Credit Local de France & FGIC Insurance) 3.55%, 07/07/98 11,210 11,210 Highlands County, Florida Health Facility Authority RB (Adventist Health Systems) Series 1996B / (Canadian Imperial Bank of Commerce & MBIA Insurance) 3.55%, 07/07/98 9,500 9,500 Highlands County, Florida Health Facility Authority RB (Adventist Health Systems) Series 1997A / (Suntrust Bank Central Florida NA LOC) 3.55%, 07/07/98 7,185 7,185 Hillsborough County, Florida Housing M/F (Brandon Crossing) / (AmSouth Bank of Alabama LOC) 3.75%, 07/07/98 2,300 2,300 Jacksonville, Florida Health Facility Authority RB (River Garden Project) Series 1994 / (First Union National Bank LOC) 3.55%, 07/07/98 2,805 2,805 Jacksonville, Florida Industrial Development Revenue Refunding Bonds (Pavilion Associates) / (Barnett Bank NA LOC) 3.60%, 07/07/98 5,250 5,250 Jacksonville, Florida Industrial Development Revenue Refunding Bonds (St. John's Medical Investors Ltd. Project) / (Barnett Bank NA LOC) 3.60%, 07/07/98 2,030 2,030 Manatee County, Florida HFA M/F Housing RB (Hampton McGuire) Series 1989A / (First Union National Bank LOC) 3.55%, 07/07/98 6,065 6,065 Par Value ------- -------- Manatee County, Florida IDRB (Trilectron Industries Project) Series 1997 A / (First Union National Bank LOC) 3.70%, 07/07/98 $ 2,000 $ 2,000 Marion County, Florida HFA M/F Housing RB (Paddock Place Project) Series 1985F / (Suntrust Bank Atlanta LOC) 3.60%, 07/07/98 1,000 1,000 Miami & Dade County, Florida IDRB (Airbus Service Co. Project) Series 1998A / (First Union National Bank of North Carolina LOC) 3.65%, 07/07/98 4,700 4,700 Miami, Florida Health Facilities Authority RB (Jewish Home for the Aged, Inc. Project) Series 1996 / (Suntrust Bank of Miami / Bank of Atlanta LOC) 3.60%, 07/07/98 3,000 3,000 Orange County, Florida HFA Housing (Rio Vista Project) Series A / (First Union National Bank LOC) 3.60%, 07/07/98 1,025 1,025 Orange County, Florida M/F Housing RB (Smokewood Project) Series A #207 / (Citibank LOC) 3.55%, 07/07/98 6,000 6,000 Orlando, Florida Special Assessment RB (Republic Drive Interchange) / (Morgan Guaranty Trust Co.-New York LOC) 3.35%, 07/07/98 1,000 1,000 Palm Beach County, Florida HDA Corp. M/F Revenue Refunding Bonds (Spinnaker Landing Project) / (FNMA LOC) 3.70%, 07/07/98 3,145 3,145 Palm Beach County, Florida HFA M/F Housing RB (Lake Crystal Apartments Project, Phase 11) Series 1998 / (Citibank LOC) 3.60%, 07/07/98 1,750 1,750 Palm Beach County, Florida RB (Norton Gallery Art School Project) Series 1995 / (Northern Trust Co. LOC) 3.45%, 07/07/98 2,300 2,300 88 Par Value ------- -------- Polk County, Florida IDA RB (Young Florida Project) Series 1996 / (First Union National Bank LOC) 3.65%, 07/07/98 $ 1,000 $ 1,000 Riviera Beach, Florida IDRB (Sunshine Farms Poultry Project) / (Suntrust Bank Atlanta LOC) 3.70%, 07/07/98 2,600 2,600 SouthEast Volusia, Florida Hospital District RB (Bert Fish Medical Centerproject) Series 1995 / (Southtrust Bank NA LOC) 3.55%, 07/07/98 1,785 1,785 St. Petersburg, Florida Capital Improvement RB (Airport & Golf Course Project) Series B / (Suntrust Bank Atlanta LOC) 3.60%, 07/07/98 1,000 1,000 Volusia County, Florida Health Facilities Authority RB (South West Volusia Health Project) Series 1994A / (First Union National Bank of North Carolina LOC) 3.50%, 07/07/98 4,655 4,655 -------- 152,505 -------- ALABAMA -- 0.5% Fort Payne, Alabama IDA Base Tax Exempt Adjustable Mode IDRB (Charleston Hosiery Project) Series 1997 / (Wachovia Bank LOC) 3.65%, 07/07/98 2,000 2,000 -------- COLORADO -- 3.6% Denver, Colorado Airport System Subordinate RB Series 1992E / (Morgan Guaranty LOC) 3.65%, 07/07/98 13,900 13,900 -------- GEORGIA -- 2.6% Cobb County, Georgia HFA M/F Housing RB (Walton Green Project) / (Wachovia Bank LOC) 3.65%, 07/07/98 10,000 10,000 -------- Par Value ------- -------- IDAHO -- 1.2% Custer County, Idaho IDRB Solid Waste Disposal (Hecla Mining Co. Project) / (NationsBank of Texas LOC) 3.75%, 07/07/98 $ 4,500 $ 4,500 -------- ILLINOIS -- 7.6% Chicago, Illinois O'Hare International Airport Special Facility RB / (Societe Generale LOC) 3.65%, 07/07/98 12,600 12,600 Hampshire, Illinois IDRB (Poli-Film America Project) Series 1998A / (Bank of America LOC) 3.60%, 07/07/98 6,385 6,385 Illinois Development Finance Authority Adjusting Rate RB (Residential Rental River Oak Project) / (Bancone LOC) 3.65%, 07/07/98 10,000 10,000 -------- 28,985 -------- INDIANA -- 2.6% Gary, Indiana Economical Development Revenue Refunding Bonds (Miller Partners) Series 1996A / (Royal Bank of Scotland LOC) 3.60%, 07/07/98 10,000 10,000 -------- NEW MEXICO -- 2.4% Albuquerque, New Mexico Airport RB Subordinate Lien Series 1996A / (Bayerische Landesbank Girozentrale LOC) 3.55%, 07/07/98 9,000 9,000 -------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $230,890) 230,890 -------- 89 SCHWAB FLORIDA MUNICIPAL MONEY FUND STATEMENT OF NET ASSETS (in thousands) (continued) June 30, 1998 (Unaudited) Par Value ------- -------- VARIABLE RATE TENDER OPTION BONDS -- 13.7% (a) (c) Escambia County, Florida HFA S/F Housing TOBP (PT-1017) / (Merrill Lynch Capital Services LOC) 3.75%, 07/02/98 $ 5,500 $ 5,500 Florida Department of Environmental Protection TOBP (PT-166) / (FSA Insurance) 3.68%, 07/02/98 13,230 13,230 Florida State Educational Capital Outlay TOBP (PT-339) / (Merrill Lynch Capital Services LOC) 3.68%, 07/02/98 9,850 9,850 Florida State GO Short Mode TOB / (Bankers Trust Co. LOC) 3.63%, 07/02/98 19,185 19,185 Jacksonville, Florida Electric Authority RB TOBP (PT-317) 3.68%, 07/02/98 4,500 4,500 -------- TOTAL VARIABLE RATE TENDER OPTION BONDS (Cost $52,265) 52,265 -------- REVENUE ANTICIPATION NOTES -- 7.9% (b) Brevard County, Florida School Board RAN Series 98 3.69%, 05/06/99 16,000 16,040 Broward County, Florida School District RAN Series B 3.68%, 04/20/99 3,655 3,664 Broward County, Florida School District RAN Series C 3.68%, 04/20/99 10,540 10,567 -------- TOTAL REVENUE ANTICIPATION NOTES (Cost $30,271) 30,271 -------- REVENUE BONDS -- 5.5% (b) FLORIDA -- 5.4% Dade County, Florida Aviation Revenue Refunding Bonds Series 1995D / (AMBAC Insurance) 3.28%, 10/01/98 500 501 Escambia County, Florida Sales Tax RB / (FGIC Insurance) 3.60%, 01/01/99 1,960 1,992 Par Value ------- -------- Fort Lauderdale, Florida Water & Sewer RB / (Escrowed To Maturity With Government Securities) 3.70%, 09/01/98 $ 2,645 $ 2,655 Hillsborough County, Florida School Board Sales Tax RB / (AMBAC Insurance) 3.50%, 10/01/98 1,000 1,004 Kissimmee, Florida Utility Authority Electric System RB / (AMBAC Insurance) 3.65%, 10/01/98 1,040 1,040 Pasco County, Florida Solid Waste Disposal Resource Recovery System RB / (AMBAC Insurance) 3.92%, 04/01/99 4,200 4,233 Pinellas County, Florida Resolution Recovery RB Series A / (MBIA Insurance) 3.68%, 10/01/98 2,565 2,582 Tampa, Florida Health Systems RB Catholic Health Services 1998A1 / (MBIA Insurance) 3.60%, 11/15/98 6,660 6,682 -------- 20,689 -------- UTAH -- 0.1% Utah Water Finance Agency RB / (MBIA Insurance) 3.85%, 10/01/98 500 500 -------- TOTAL REVENUE BONDS (Cost $21,189) 21,189 -------- TAX-EXEMPT COMMERCIAL PAPER -- 3.6% (b) Florida Local Government Finance Commission Pooled TECP Series A / (First Union National Bank LOC) 3.55%, 09/08/98 7,768 7,768 Orange County, Florida TECP Series A 3.50%, 07/07/98 4,509 4,509 Puerto Rico Government Development Bank TECP 3.75%, 07/14/98 1,500 1,500 -------- TOTAL TAX-EXEMPT COMMERCIAL PAPER (Cost $13,777) 13,777 -------- 90 Par Value ------- -------- GENERAL OBLIGATIONS -- 3.6% (b) Broward County, Florida School District GO 3.62%, 01/01/99 $ 1,620 $ 1,633 3.68%, 02/15/99 4,500 4,682 Florida Board of Education Capital Outlay RB Series 1998A 3.58%, 01/01/99 7,175 7,190 -------- TOTAL GENERAL OBLIGATIONS (Cost $13,505) 13,505 -------- TAX AND REVENUE ANTICIPATION NOTES -- 2.6% (b) Puerto Rico Commonwealth TRAN Series 1997A 3.57%, 07/30/98 10,000 10,007 -------- TOTAL TAX AND REVENUE ANTICIPATION NOTES (Cost $10,007) 10,007 -------- TAX ANTICIPATION NOTES -- 1.3% (b) Palm Beach County, Florida TAN 3.50%, 10/13/98 5,000 5,013 -------- TOTAL TAX ANTICIPATION NOTES (Cost $5,013) 5,013 -------- Par Value ------- -------- MANDATORY PUT BONDS -- 0.8% (b) Palm Beach County, Florida HFA Put Bond / (FGIC Insurance) 3.75%, 07/01/99 $ 3,000 $ 3,000 -------- TOTAL MANDATORY PUT BONDS (Cost $3,000) 3,000 -------- SPECIAL ASSESSMENT BONDS -- 0.3% (b) Cape Coral, Florida Special Obligation Revenue Refunding Bonds Waste Water (Assignment Green Area) / (FSA Insurance) 2.73%, 07/01/99 1,000 1,018 -------- TOTAL SPECIAL ASSESSMENT BONDS (Cost $1,018) 1,018 -------- TOTAL INVESTMENTS -- 99.7% (Cost $380,935) 380,935 -------- OTHER ASSETS AND LIABILITIES -- 0.3% Other Assets 2,736 Liabilities (1,600) -------- 1,136 -------- NET ASSETS -- 100.0% $382,071 ======== SEE ACCOMPANYING NOTES TO STATEMENTS OF NET ASSETS AND NOTES TO FINANCIAL STATEMENTS. 91 NOTES TO STATEMENTS OF NET ASSETS June 30, 1998 (Unaudited) For each security, cost (for financial reporting and federal income tax purposes) and carrying value are the same. (a) Variable rate obligations -- Interest rates vary periodically based on current market rates. Rates shown are the effective rates as of the report date. Dates shown for securities with scheduled maturities within 397 days or less represent the earlier of the demand date or next interest rate change date. Dates shown for securities with scheduled maturities greater than 397 days represent the later of the demand date or next interest rate change date. For variable rate obligations without demand features, the next interest reset date is shown. All dates shown are considered the maturity date for financial reporting purposes. (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, Schwab New York Municipal Money Fund, Schwab New Jersey MunicipalMoney Fund,Schwab Pennsylvania Municipal Money Fund, and Schwab Florida Municipal Money Fund. Any resale by the Fund must be in an exempt transaction, normally to a qualified institutional buyer. At June 30, 1998, the aggregate values of private placement securities held by the Schwab Municipal Money Fund, Schwab California Municipal Money Fund, Schwab New York Municipal Money Fund, Schwab New Jersey MunicipalMoney Fund,Schwab Pennsylvania Municipal Money Fund, and Schwab Florida Municipal Money Fund were $252,605,000, $128,160,000, $60,545,000, $6,800,000, $6,730,000 and $52,265,000, respectively, which represented 4.2%, 3.8%, 10.6%, 10.9%, 11.8% and 13.7% 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 June 30, 1998, the aggregate value of the restricted securities held by Schwab Municipal Money Fund and Schwab California Municipal Money Fund were $105,750,000 and $38,378,000, respectively, which represented 1.8% and 1.1%, 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. 92 Portfolio Abbreviations - ----------------------- ACES Adjustable Convertible Extendable Securities AMBAC American Municipal Bond Assurance Company BAN Bond Anticipation Note CP Commercial Paper COP Certificates of Participation FGIC Financial Guaranty Insurance Company FHLB Federal Home Loan Bank FNMA Federal National Mortgage Association FNB First National Bank FSA Financial Security Assurance GIC Guaranteed Investment Contract GNMA Government National Mortgage Association GO General Obligation HDA Housing Development Authority HFA Housing Finance Agency IDA Industrial Development Authority IDB Industrial Development Board IDRB Industrial Development Revenue Bond LOC Letter of Credit MBIA Municipal Bond Investors Assurance Corporation M/F Multi-Family NCNB North Carolina NationsBank N.R.U.-C.F.C. National Rural Utilities Cooperative Financing Corporation RAN Revenue Anticipation Note RB Revenue Bond SBPA Standby Purchase Agreement S/F Single Family SLMA Student Loan Marketing Association SPA Securities Purchase Agreement TAN Tax Anticipation Note TECP Tax-Exempt Commercial Paper TOB Tender Option Bond TOBP Tender Option Bond Partnership TRAN Tax and Revenue Anticipation Notes SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 93 STATEMENTS OF ASSETS AND LIABILITIES (in thousands) June 30, 1998 (Unaudited)
Schwab Schwab Schwab California New York Municipal Municipal Municipal Money Fund Money Fund Money Fund ---------- ---------- ---------- ASSETS Investments, at value (Cost: $6,112,205, $3,483,046 and $564,509 respectively) $6,112,205 $3,483,046 $564,509 Cash 285 245 57 Receivables: Interest 37,226 21,923 4,328 Investments sold 162,564 12,208 2,401 Fund shares sold 11,746 6,403 979 Prepaid expenses 395 200 48 ---------- ---------- -------- Total assets 6,324,421 3,524,025 572,322 ---------- ---------- -------- LIABILITIES Payables: Dividends 7,632 3,979 700 Investments purchased 267,381 149,931 -- Fund shares redeemed 13,810 5,833 1,124 Investment advisory and administration fees 188 101 16 Transfer agency and shareholder service fees 371 210 35 Other liabilities 327 206 123 ---------- ---------- -------- Total liabilities 289,709 160,260 1,998 ---------- ---------- -------- Net assets applicable to outstanding shares $6,034,712 $3,363,765 $570,324 ========== ========== ======== NET ASSETS CONSIST OF: Paid-in-capital $6,037,468 $3,364,621 $570,343 Accumulated net realized loss on investments sold (2,756) (856) (19) ---------- ---------- -------- $6,034,712 $3,363,765 $570,324 ========== ========== ======== PRICING OF SHARES $0.00001 par value (unlimited shares authorized) Outstanding Sweep Shares 4,447,208 2,181,913 390,170 Outstanding Value Advantage Shares(TRADE MARK) 1,590,529 1,182,807 180,236 ---------- ---------- -------- 6,037,737 3,364,720 570,406 Net asset value, offering and redemption price per each Sweep and Value Advantage Share(TRADE MARK) $1.00 $1.00 $1.00
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 94 STATEMENTS OF ASSETS AND LIABILITIES (in thousands) June 30, 1998 (Unaudited)
Schwab Schwab Schwab New Jersey Pennsylvania Florida Municipal Municipal Municipal Money Fund Money Fund Money Fund ---------- ------------ ---------- ASSETS Investments, at value (Cost: $61,454, $59,318 and $380,935 respectively) $61,454 $59,318 $380,935 Cash 76 13 45 Receivables: Interest 862 365 2,673 Prepaid expenses 27 26 18 ------- ------- -------- Total assets 62,419 59,722 383,671 ------- ------- -------- LIABILITIES Payables: Dividends 74 71 486 Investments purchased -- 2,765 1,000 Investment advisory and administration fees -- -- 1 Transfer agency and shareholder service fees 4 3 28 Other liabilities 39 41 85 ------- ------- -------- Total liabilities 117 2,880 1,600 ------- ------- -------- Net assets applicable to outstanding shares $62,302 $56,842 $382,071 ======= ======= ======== NET ASSETS CONSIST OF: Paid-in-capital $62,302 $56,844 $382,071 Accumulated net realized loss on investments sold -- (2) -- ------- ------- -------- $62,302 $56,842 $382,071 ======= ======= ======== PRICING OF SHARES $0.00001 par value (unlimited shares authorized) Outstanding Sweep Shares 62,302 56,844 382,071 Net asset value, offering and redemption price per share $1.00 $1.00 $1.00
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 95 STATEMENTS OF OPERATIONS (in thousands) For the six months ended June 30, 1998 (Unaudited)
Schwab Schwab Schwab Schwab Schwab Schwab California New York New Jersey Pennsylvania Florida Municipal Municipal Municipal Municipal Municipal Municipal Money Fund Money Fund Money Fund Money Fund 1 Money Fund 1 Money Fund 2 ---------- ---------- ---------- ------------ ------------- ------------ Interest income $106,625 $55,711 $9,753 $ 663 $ 554 $4,223 -------- ------- ------ ----- ----- ------ Expenses: Investment advisory and administration fees 12,036 6,803 1,259 86 69 513 Transfer agency and shareholder service fees: Sweep Shares 10,215 4,904 882 84 67 501 Value Advantage Shares(TRADE MARK) 1,630 1,311 194 -- -- -- Custodian and portfolio accounting fees 245 165 88 7 5 6 Registration fees 3 4 10 17 20 64 Professional fees 64 42 16 9 9 8 Shareholder reports 138 64 32 4 5 5 Trustees' fees 13 11 9 5 5 5 Offering fees -- -- -- 11 11 9 Insurance and other expenses 212 53 49 2 2 3 -------- ------- ------ ----- ----- ------ 24,556 13,357 2,539 225 193 1,114 Less: expenses reduced (see Note 4) (6,639) (3,915) (837) (104) (96) (457) -------- ------- ------ ----- ----- ------ Total expenses incurred by Fund 17,917 9,442 1,702 121 97 657 -------- ------- ------ ----- ----- ------ Net investment income 88,708 46,269 8,051 542 457 3,566 Net realized gain (loss) on investments sold 84 (80) (5) -- (2) -- -------- ------- ------ ----- ----- ------ Increase in net assets resulting from operations $ 88,792 $46,189 $8,046 $ 542 $ 455 $3,566 ======== ======= ====== ===== ===== ====== 1 For the period from February 2, 1998 (commencement of operations) to June 30, 1998. 2 For the period from March 18, 1998 (commencement of operations) to June 30, 1998.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 96 STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
Schwab Schwab California Schwab New York Municipal Money Fund Municipal Money Fund Municipal Money Fund ---------------------------- ---------------------------- ---------------------------- Six months Six months Six months ended Year ended ended Year ended ended Year ended June 30, 1998 December 31, June 30, 1998 December 31, June 30, 1998 December 31, (Unaudited) 1997 (Unaudited) 1997 (Unaudited) 1997 ------------- ------------ ------------- ------------ ------------- ------------ Operations: Net investment income $ 88,708 $ 151,940 $ 46,269 $ 79,137 $ 8,051 $ 12,130 Net realized gain (loss) on investments sold 84 (515) (80) (44) (5) 1 ------------ ------------ ----------- ----------- --------- ----------- Increase in net assets resulting from operations 88,792 151,425 46,189 79,093 8,046 12,131 ------------ ------------ ----------- ----------- --------- ----------- Dividends to shareholders from net investment income (See Note 2): Sweep Shares (68,036) (125,666) (30,601) (56,234) (5,664) (9,121) Value Advantage Shares(TRADE MARK) (20,941) (26,274) (15,767) (22,903) (2,438) (3,009) ------------ ------------ ----------- ----------- --------- ----------- (88,977) (151,940) (46,368) (79,137) (8,102) (12,130) Capital share transactions (at $1.00 per share): Proceeds from shares sold 11,710,126 17,267,233 5,512,716 8,685,116 1,026,822 1,365,492 Net asset value of shares issued in reinvestment of dividends 98,937 143,585 52,148 74,380 8,945 11,240 Less payments for shares redeemed (11,283,236) (16,378,232) (5,292,257) (7,991,713) (948,145) (1,231,270) ------------ ------------ ----------- ----------- --------- ----------- Increase in net assets from capital share transactions 525,827 1,032,586 272,607 767,783 87,622 145,462 ------------ ------------ ----------- ----------- --------- ----------- Total increase in net assets 525,642 1,032,071 272,428 767,739 87,566 145,463 Net assets: Beginning of period 5,509,070 4,476,999 3,091,337 2,323,598 482,758 337,295 ------------ ------------ ----------- ----------- --------- ----------- End of period $ 6,034,712 $ 5,509,070 $ 3,363,765 $ 3,091,337 $ 570,324 $ 482,758 ============ ============ =========== =========== ========= ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 97 STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
Schwab New Jersey Schwab Pennsylvania Schwab Florida Municipal Money Fund Municipal Money Fund Municipal Money Fund -------------------- -------------------- -------------------- Period ended Period ended Period ended June 30, 1998 1 June 30, 1998 1 June 30, 1998 2 (Unaudited) (Unaudited) (Unaudited) --------------- --------------- --------------- Operations: Net investment income $ 542 $ 457 $ 3,566 Net realized loss on investments sold -- (2) -- -------- -------- --------- Increase in net assets resulting from operations 542 455 3,566 -------- -------- --------- Dividends to shareholders from net investment income: Sweep Shares (542) (457) (3,566) -------- -------- --------- Capital share transactions (at $1.00 per share): Proceeds from shares sold 140,895 121,144 778,449 Net asset value of shares issued in reinvestment of dividends 460 378 3,016 Less payments for shares redeemed (79,053) (64,678) (399,394) -------- -------- --------- Increase in net assets from capital share transactions 62,302 56,844 382,071 -------- -------- --------- Total increase in net assets 62,302 56,842 382,071 Net assets: Beginning of period -- -- -- -------- -------- --------- End of period $ 62,302 $ 56,842 $ 382,071 ======== ======== ========= 1 For the period from February 2, 1998 (commencement of operations) to June 30, 1998. 2 For the period from March 18, 1998 (commencement of operations) to June 30, 1998.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 98 THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS. A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU. FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
Income from Investment Operations Less Distributions --------------------------------------- -------------------------- Net Fiscal Net Asset Realized & Total Dividends Net Asset Period Value At Net Unrealized from from Net Value at Ended Beginning Investment Gain (Loss) on Investment Investment Total End of December 31, of Period Income Investments Operations Income Distributions Period - ------------ --------- ---------- -------------- ---------- ---------- ------------- --------- SCHWAB MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 $1.00 $0.02 $-- $0.02 $(0.02)4 $(0.02) $1.00 1997 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1996 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1995 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1994 $1.00 $0.02 $-- $0.02 $(0.02) $(0.02) $1.00 1993 $1.00 $0.02 $-- $0.02 $(0.02) $(0.02) $1.00 SCHWAB MUNICIPAL MONEY FUND--VALUE ADVANTAGE SHARES(TRADE MARK) 1998 1 $1.00 $0.02 $-- $0.02 $(0.02)4 $(0.02) $1.00 1997 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1996 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1995 2 $1.00 $0.02 $-- $0.02 $(0.02) $(0.02) $1.00 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 $1.00 $0.02 $-- $0.02 $(0.02)4 $(0.02) $1.00 1997 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1996 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1995 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1994 $1.00 $0.02 $-- $0.02 $(0.02) $(0.02) $1.00 1993 $1.00 $0.02 $-- $0.02 $(0.02) $(0.02) $1.00 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND--VALUE ADVANTAGE SHARES(TRADE MARK) 1998 1 $1.00 $0.02 $-- $0.02 $(0.02)4 $(0.02) $1.00 1997 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1996 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1995 3 $1.00 $0.01 $-- $0.01 $(0.01) $(0.01) $1.00 (DAGGER) The information contained in the above table is based on actual expenses for the periods, after giving effect to the portion of expenses reduced by the Investment Manager and Schwab. Had these expenses not been reduced, the Fund's expense and net investment income ratios would have been: SCHWAB MUNICIPAL MONEY FUND -- SWEEP SHARES - ------------------------------------------------------------- Ratio of Net Fiscal Period Ratio of Expenses Investment Income Ended to Average Net Assets to Average Net Assets December 31, (%) (%) - ------------- --------------------- --------------------- 1998 1 0.88* 2.76* 1997 0.90 2.83 1996 0.90 2.65 1995 0.91 3.00 1994 0.91 2.05 1993 0.93 1.62 SCHWAB MUNICIPAL MONEY FUND -- VALUE ADVANTAGE SHARES(TRADE MARK) - ----------------------------------------------------------------- Ratio of Net Fiscal Period Ratio of Expenses Investment Income Ended to Average Net Assets to Average Net Assets December 31, (%) (%) - ------------- --------------------- --------------------- 1998 1 0.69* 2.96* 1997 0.72 3.03 1996 0.75 2.80 1995 2 0.95* 3.00* 1 For the six months ended June 30, 1998 (Unaudited). 2 For the period from July 7, 1995 (commencement of operations) to December 31, 1995. 3 For the period from October 3, 1995 (commencement of operations) to December 31, 1995. 4 The amounts shown include certain reclassifications related to book to tax differences (see Note 2 of Notes to Financial Statements).
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 100
Ratios/Supplemental Data - ---------------------------------------------------------------------------------------- Ratio of Net Ratio of Investment Fiscal Total Expenses Income Period Return Net Assets to Average to Average Ended (not annualized) End of Period Net Assets(DAGGER) Net Assets(DAGGER) December 31, (%) (000's) (%) (%) - ------------ ---------------- ------------- ------------------ ------------------ SCHWAB MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 1.50 $4,444,340 0.66* 2.99* 1997 3.11 $4,423,841 0.66 5 3.06 1996 2.92 $3,868,919 0.66 2.89 1995 3.30 $3,403,837 0.66 3.25 1994 2.32 $3,015,951 0.65 2.31 1993 1.93 $2,423,317 0.63 1.92 SCHWAB MUNICIPAL MONEY FUND--VALUE ADVANTAGE SHARES(TRADE MARK) 1998 1 1.60 $1,590,372 0.45* 3.20* 1997 3.32 $1,085,229 0.45 6 3.29 1996 3.14 $ 608,080 0.45 3.10 1995 2 1.68 $ 160,682 0.45* 3.50* SCHWAB CALIFORNIA MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 1.40 $2,181,039 0.65* 2.80* 1997 2.95 $2,154,522 0.65 7 2.91 1996 2.80 $1,816,112 0.65 2.77 1995 3.20 $1,577,695 0.65 3.15 1994 2.26 $1,293,883 0.64 2.25 1993 1.91 $1,062,042 0.63 1.89 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND--VALUE ADVANTAGE SHARES(TRADE MARK) 1998 1 1.50 $1,182,726 0.45* 3.00* 1997 3.15 $ 936,815 0.45 6 3.12 1996 3.01 $ 507,486 0.45 2.98 1995 3 0.84 $ 108,008 0.45* 3.48* SCHWAB CALIFORNIA MUNICIPAL MONEY FUND -- SWEEP SHARES - ------------------------------------------------------------- Ratio of Net Fiscal Period Ratio of Expenses Investment Income Ended to Average Net Assets to Average Net Assets December 31, (%) (%) - ------------- --------------------- --------------------- 1998 1 0.89* 2.56* 1997 0.91 2.66 1996 0.92 2.50 1995 0.94 2.86 1994 0.94 1.95 1993 0.96 1.56 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND -- VALUE ADVANTAGE SHARES(TRADE MARK) - ---------------------------------------------------------------------------- Ratio of Net Fiscal Period Ratio of Expenses Investment Income Ended to Average Net Assets to Average Net Assets December 31, (%) (%) - ------------- --------------------- --------------------- 1998 1 0.69* 2.76* 1997 0.72 2.86 1996 0.77 2.66 1995 3 1.04* 2.89* 5 This expense ratio excludes extraordinary expenses. Had these expenses been included, the expense ratio would have been 0.67%. 6 This expense ratio excludes extraordinary expenses. Had these expenses been included, the expense ratio would have been 0.46%. 7 This expense ratio excludes extraordinary expenses. Had these expenses been included, the expense ratio would have been 0.66%. * Annualized.
101 FINANCIAL HIGHLIGHTS (continued) For a share outstanding throughout each period:
Income from Investment Operations Less Distributions --------------------------------------- -------------------------- Net Fiscal Net Asset Realized & Total Dividends Net Asset Period Value At Net Unrealized from from Net Value at Ended Beginning Investment Gain (Loss) on Investment Investment Total End of December 31, of Period Income Investments Operations Income Distributions Period - ------------ --------- ---------- -------------- ---------- ---------- ------------- --------- SCHWAB NEW YORK MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 $1.00 $0.02 $-- $0.02 $(0.02)4 $(0.02) $1.00 1997 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1996 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1995 2 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 SCHWAB NEW YORK MUNICIPAL MONEY FUND--VALUE ADVANTAGE SHARES(TRADE MARK) 1998 1 $1.00 $0.02 $-- $0.02 $(0.02)4 $(0.02) $1.00 1997 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1996 $1.00 $0.03 $-- $0.03 $(0.03) $(0.03) $1.00 1995 3 $1.00 $0.02 $-- $0.02 $(0.02) $(0.02) $1.00 (DAGGER) The information contained in the above table is based on actual expenses for the periods, after giving effect to the portion of expenses reduced by the Investment Manager and Schwab. Had these expenses not been reduced, the Fund's expense and net investment income ratios would have been: SCHWAB NEW YORK MUNICIPAL MONEY FUND -- SWEEP SHARES - ------------------------------------------------------------- Ratio of Net Fiscal Period Ratio of Expenses Investment Income Ended to Average Net Assets to Average Net Assets December 31, (%) (%) - ------------- --------------------- --------------------- 1998 1 0.98* 2.58* 1997 1.02 2.62 1996 1.04 2.36 1995 4 1.04* 2.79* SCHWAB NEW YORK MUNICIPAL MONEY FUND -- VALUE ADVANTAGE SHARES(TRADE MARK) - -------------------------------------------------------------------------- Ratio of Net Fiscal Period Ratio of Expenses Investment Income Ended to Average Net Assets to Average Net Assets December 31, (%) (%) - ------------- --------------------- --------------------- 1998 1 0.79* 2.78* 1997 0.85 2.80 1996 1.01 2.42 1995 2 1.81* 2.06* 1 For the six months ended June 30, 1998 (Unaudited). 2 For the period from February 27, 1995 (commencement of operations) to December 31, 1995. 3 For the period from July 7, 1995 (commencement of operations) to December 31, 1995. 4 The amounts shown include certain reclassifications related to book to tax differences (see Note 2 of Notes to Financial Statements). 5 This expense ratio excludes extraordinary expenses. Had these expenses been included, the expense ratio would have been 0.70%. 6 This expense ratio excludes extraordinary expenses. Had these expenses been included, the expense ratio would have been 0.46%. * Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 102
Ratios/Supplemental Data - ---------------------------------------------------------------------------------------- Ratio of Net Ratio of Investment Fiscal Total Expenses Income Period Return Net Assets to Average to Average Ended (not annualized) End of Period Net Assets(DAGGER) Net Assets(DAGGER) December 31, (%) (000's) (%) (%) - ------------ ---------------- ------------- ------------------ ------------------ SCHWAB NEW YORK MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 1.44 $ 390,104 0.69* 2.87* 1997 2.96 $ 357,221 0.69 5 2.93 1996 2.74 $ 270,612 0.69 2.71 1995 2 2.75 $ 204,863 0.63* 3.20* SCHWAB NEW YORK MUNICIPAL MONEY FUND--VALUE ADVANTAGE SHARES(TRADE MARK) 1998 1 1.56 $ 180,220 0.45* 3.12* 1997 3.21 $ 125,537 0.45 6 3.18 1996 2.99 $ 66,683 0.45 2.98 1995 3 1.62 $ 15,143 0.45* 3.42*
103 FINANCIAL HIGHLIGHTS (continued) For a share outstanding throughout each period:
Income from Investment Operations Less Distributions --------------------------------------- -------------------------- Net Fiscal Net Asset Realized & Total Dividends Net Asset Period Value At Net Unrealized from from Net Value at Ended Beginning Investment Gain (Loss) on Investment Investment Total End of December 31, of Period Income Investments Operations Income Distributions Period - ------------ --------- ---------- -------------- ---------- ---------- ------------- --------- SCHWAB NEW JERSEY MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 $1.00 $0.01 $-- $0.01 $(0.01) $(0.01) $1.00 SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 $1.00 $0.01 $-- $0.01 $(0.01) $(0.01) $1.00 SCHWAB FLORIDA MUNICIPAL MONEY FUND--SWEEP SHARES 1998 2 $1.00 $0.01 $-- $0.01 $(0.01) $(0.01) $1.00 (DAGGER) The information contained in the above table is based on actual expenses for the periods, after giving effect to the portion of expenses reduced by the Investment Manager and Schwab. Had these expenses not been reduced, the Fund's expense and net investment income ratios would have been: SCHWAB NEW JERSEY MUNICIPAL MONEY FUND SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND SWEEP SHARES SWEEP SHARES - --------------------------------------- ---------------------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Expenses Income to Expenses Income to Fiscal Period to Average Average Fiscal Period to Average Average Ended Net Assets Net Assets Ended Net Assets Net Assets December 31, (%) (%) December 31, (%) (%) - ------------- ---------- ------------ ------------- ----------- ----------- 1998 1 1.24* 2.32* 1998 1 1.33* 2.38* SCHWAB FLORIDA MUNICIPAL MONEY FUND SWEEP SHARES - ------------------------------------------ Ratio of Net Ratio of Investment Expenses Income to Fiscal Period to Average Average Ended Net Assets Net Assets December 31, (%) (%) - ------------- ----------- ------------ 1998 2 1.03* 2.76* 1 For the period from February 2, 1998 (commencement of operations) to June 30, 1998 (Unaudited). 2 For the period from March 18, 1998 (commencement of operations) to June 30, 1998 (Unaudited). * Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 104
Ratios/Supplemental Data - ---------------------------------------------------------------------------------------- Ratio of Net Ratio of Investment Fiscal Total Expenses Income Period Return Net Assets to Average to Average Ended (not annualized) End of Period Net Assets(DAGGER) Net Assets(DAGGER) December 31, (%) (000's) (%) (%) - ------------ ---------------- ------------- ------------------ ------------------ SCHWAB NEW JERSEY MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 1.18 $ 62,302 0.65* 2.91* SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND--SWEEP SHARES 1998 1 1.24 $ 56,842 0.65* 3.06* SCHWAB FLORIDA MUNICIPAL MONEY FUND--SWEEP SHARES 1998 2 0.92 $382,071 0.59* 3.20*
105 NOTES TO FINANCIAL STATEMENTS For the six months ended June 30, 1998 (Unaudited) 1. DESCRIPTION OF THE FUNDS The Schwab Municipal Money Fund, Schwab California Municipal Money Fund, Schwab New York Municipal Money Fund, Schwab New Jersey Municipal Money Fund, Schwab Pennsylvania Municipal Money Fund and Schwab Florida 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. All Funds offer Sweep shares, and the Schwab Municipal Money Fund, Schwab California Municipal Money Fund and Schwab New York Municipal Money Fund offer an additional class of shares -- Value Advantage Shares(TRADE MARK). 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 six 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(REGISTRATION MARK), Schwab Institutional Advantage Money Fund(REGISTRATION MARK), Schwab Retirement Money Fund(REGISTRATION MARK) and Schwab Government Cash Reserves. 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. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Each Fund declares a daily dividend, equal to its net investment income for that day, payable monthly. Net realized capital gains, if any, are normally distributed annually. 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. 106 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 Funds for the six months ended June 30, 1998 qualify as exempt interest dividends for federal tax purposes. As of December 31, 1997, the unused capital loss carryforwards, for federal income tax purposes with expiration dates, were as follows: Schwab Schwab Schwab California New York Municipal Municipal Municipal Expiring in: Money Fund Money Fund Money Fund ----------- ---------- ---------- ---------- 12/31/99 $ 13,000 $ -- $ -- 12/31/00 -- 1,000 -- 12/31/01 220,000 56,000 -- 12/31/02 1,580,000 583,000 -- 12/31/03 36,000 -- 6,000 12/31/04 465,000 93,000 9,000 12/31/05 523,000 35,000 -- ---------- -------- ------- Total capital loss carryforwards $2,837,000 $768,000 $15,000 ========== ======== ======= RECLASSIFICATION -- Generally accepted accounting principles require that certain components of net assets be reclassified to reflect permanent differences between financial and tax reporting. Accordingly, permanent book/tax differences of $269,000, $99,000, $51,000 for the Schwab Municipal Money Fund, Schwab California Money Fund and Schwab New York Municipal Money Fund, respectively, were reclassified from paid-in-capital to undistributed net investment income. These reclassifications have no effect on net assets or net asset values per share. 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 six months ended June 30, 1998 (see Note 4). 107 NOTES TO FINANCIAL STATEMENTS (continued) TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The Trust has transfer agency and shareholder service agreements with Charles Schwab & Co., Inc. ("Schwab"). For transfer agency services provided, Schwab receives an annual fee, payable monthly, of 0.25% of average daily net assets of the Sweep Shares and 0.05% for Value AdvantageShares. For shareholder services provided, Schwab receives 0.20% of each Fund's average daily net assets. Schwab has reduced a portion of its fee for the six months ended June 30, 1998 (see Note 4). 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 six months ended June 30, 1998, 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 Funds incurred fees aggregating $48,000, related to the Trust's unaffiliated trustees. 4. EXPENSES REDUCED BY THE INVESTMENT MANAGER AND SCHWAB The Investment Manager and Schwab guarantee that, through at least April 30, 1999, for Schwab Municipal MoneyFund, Schwab California Municipal MoneyFund and New York Municipal Money Fund, and through at least February 28, 1999 for New Jersey Municipal Money Fund,Pennsylvania Municipal Money Fund and Florida Municipal Money Fund, respectively, total operating expenses of each class of shares will not exceed certain percentages of average daily net assets of that class shares, after reductions, as shown below. For purposes of this guarantee, operating expenses do not include interest expenses, extraordinary expenses and taxes. Sweep Value Advantage Shares Shares(TRADE MARK) - -------------------------------------------------------------------------------- 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% - -------------------------------------------------------------------------------- Schwab New Jersey Municipal Money Fund 0.65% -- - -------------------------------------------------------------------------------- Schwab Pennsylvania Municipal Money Fund 0.65% -- - -------------------------------------------------------------------------------- Schwab Florida Municipal Money Fund 0.59% -- - -------------------------------------------------------------------------------- For the six months ended June 30, 1998, the total of such fees reduced by the Investment Manager and Schwab were: Fees Reduced by the Fees Reduced by Investment Manager Schwab - -------------------------------------------------------------------------------- Schwab Municipal Money Fund $6,532,000 $107,000 - -------------------------------------------------------------------------------- Schwab California Municipal Money Fund $3,901,000 $ 14,000 - -------------------------------------------------------------------------------- Schwab New York Municipal Money Fund $ 796,000 $ 41,000 - -------------------------------------------------------------------------------- Schwab New Jersey Municipal Money Fund $ 86,000 $ 18,000 - -------------------------------------------------------------------------------- Schwab Pennsylvania Municipal Money Fund $ 70,000 $ 26,000 - -------------------------------------------------------------------------------- Schwab Florida Municipal Money Fund $ 457,000 -- - -------------------------------------------------------------------------------- 108 5. CAPITAL SHARE TRANSACTIONS Transactions in capital shares, for the six-month period ended June 30, 1998 and the year ended December 31, 1997 (at $1.00 per share), were as follows, (in thousands):
Schwab Municipal Schwab California Municipal Schwab New York Municipal Money Fund Money Fund Money Fund ----------------------------- ---------------------------- ----------------------------- Six months For the Six months For the Six months For the ended Year ended ended Year ended ended Year ended June 30, 1998 December 31, June 30, 1998 December 31, June 30, 1998 December 31, (Unaudited) 1997 (Unaudited) 1997 (Unaudited) 1997 ------------- ------------ ------------- ------------ ------------- ------------ Proceeds from shares sold: Sweep Shares $ 10,021,986 $ 15,493,142 $ 4,517,313 $ 7,203,514 $ 867,263 $ 1,167,590 Value Advantage Shares(TRADE MARK) 1,688,140 1,774,091 995,403 1,481,602 159,559 197,902 ------------ ------------ ----------- ----------- ---------- ----------- Total 11,710,126 17,267,233 5,512,716 8,685,116 1,026,822 1,365,492 ------------ ------------ ----------- ----------- ---------- ----------- Net asset value of shares issued in reinvestment of dividends: Sweep Shares 77,240 120,622 35,009 53,926 6,343 8,549 Value Advantage Shares(TRADE MARK) 21,697 22,963 17,139 20,454 2,602 2,691 ------------ ------------ ----------- ----------- ---------- ----------- Total 98,937 143,585 52,148 74,380 8,945 11,240 ------------ ------------ ----------- ----------- ---------- ----------- Less payments for shares redeemed: Sweep Shares (10,078,582) (15,058,403) (4,525,685) (6,918,999) (840,681) (1,089,531) Value Advantage Shares(TRADE MARK) (1,204,654) (1,319,829) (766,572) (1,072,714) (107,464) (141,739) ------------ ------------ ----------- ----------- ---------- ----------- Total (11,283,236) (16,378,232) (5,292,257) (7,991,713) (948,145) (1,231,270) ------------ ------------ ----------- ----------- ---------- ----------- Total increase in net assets from capital share transactions $ 525,827 $ 1,032,586 $ 272,607 $ 767,783 $ 87,622 $ 145,462 ============ ============ =========== =========== ========== ===========
109 THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS. A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU. THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS. A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU. THE SCHWABFUNDS FAMILY-REGISTERED TRADEMARK- The SchwabFunds Family includes a variety of funds to help you meet your investment goals. 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 market funds. Please call 1-800-435-4000 for a free prospectus and brochure for any of these SchwabFunds. This report must be preceded or accompanied by a current prospectus. SCHWAB ASSET ALLOCATION FUNDS Schwab MarketTrack All Equity Portfolio(1) Schwab MarketTrack Growth Portfolio(1) Schwab MarketTrack Balanced Portfolio(1) Schwab MarketTrack Conservative Portfolio(1) Schwab MarketManager Growth Portfolio(2) Schwab MarketManager Balanced Portfolio(2) 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 MarketManager Small Cap Portfolio(2) Schwab International Index Fund-Registered Trademark- Schwab MarketManager International Portfolio(2) SCHWAB BOND FUNDS Schwab Total Bond Market Index Fund(3) Schwab Short-Term Bond Market Index Fund(3) Schwab Long-Term Tax-Free Bond Fund Schwab Short/Intermediate Tax-Free Bond Fund Schwab California Long-Term Tax-Free Bond Fund Schwab California Short/Intermediate Tax-Free Fund SCHWAB MONEY MARKET FUNDS Schwab offers an array of money market funds(4) that seek high current income with safety and liquidity. 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-. (1)Formerly the Schwab Asset Director Funds. (2)Formerly the Schwab OneSource-TM- Portfolios. (3)Formerly the Schwab Government Bond Funds. (4)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. -----END PRIVACY-ENHANCED MESSAGE-----