-----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, QTY8tQJVJvW68rUS2Xk8eFXwSPxY+JGyJdSE4lCFqLF1t2vfaTczxUGYXg+FxXVl F176g1cqBEnpA1M2VgqGDg== 0000935069-99-000169.txt : 19990831 0000935069-99-000169.hdr.sgml : 19990831 ACCESSION NUMBER: 0000935069-99-000169 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990830 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: 99702220 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 INST. ADVANTAGE AND RETIREMENT MONEY SCHWABFUNDS(REGISTRATION MARK) [GRAPHIC OMITTED] SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK) SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK) Semiannual Report June 30, 1999 Dear Shareholder: We're pleased to bring you this semiannual report on the performance for the Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab Retirement Money Fund(REGISTRATION MARK) for the six-month period ended June 30, 1999. During the reporting period, the funds continued to provide investors with current income consistent with the preservation of capital. By the end of the six-month period, the Schwab Institutional Advantage Money Fund's net assets were more than $435 million and the Schwab Retirement Money Fund's net assets were more than $245 million. FUND PERFORMANCE SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK) YIELD SUMMARY AS OF 6/30/99 1 - ------------------------------------------------------------------- Seven-Day Current Yield 4.58% - ------------------------------------------------------------------- Seven-Day Effective Yield 4.68% - ------------------------------------------------------------------- SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK) YIELD SUMMARY AS OF 6/30/99 - ------------------------------------------------------------------- Seven-Day Current Yield 4.37% - ------------------------------------------------------------------- Seven-Day Effective Yield 4.47% - ------------------------------------------------------------------- Please remember that an investment in the funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although the funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the funds. This report contains a complete list of holdings for both the Schwab Institutional Advantage Money Fund and the Schwab Retirement Money Fund as of June 30, 1999. We appreciate your confidence in SchwabFunds(REGISTRATION MARK) and look forward to continuing to help you achieve your financial goals in the future. Sincerely, /S/CHARLES R. SCHWAB Charles R. Schwab Chairman The Charles Schwab Family of Funds 1 A portion of the fund's expenses was reduced during the reporting period. Without this reduction, as of 6/30/99, the seven-day current yield would have been 4.41%, and the seven-day effective yield would have been 4.51%. PORTFOLIO HIGHLIGHTS SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK) AVERAGE YIELDS FOR THE PERIOD ENDED 6/30/99 2 - ---------------------------------------------------- Last seven days 4.58% - ---------------------------------------------------- Last three months 4.52% - ---------------------------------------------------- Last 12 months 4.82% - ---------------------------------------------------- MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS MATURITY RANGE 3/31/99 6/30/99 - -------------------------------------------------------------------------------- 0-15 days 28.7% 24.1% - -------------------------------------------------------------------------------- 16-30 days 9.3% 20.6% - -------------------------------------------------------------------------------- 31-60 days 12.3% 22.3% - -------------------------------------------------------------------------------- 61-90 days 21.2% 16.4% - -------------------------------------------------------------------------------- 91-120 days 14.6% 3.4% - -------------------------------------------------------------------------------- More than 120 days 13.9% 13.2% - -------------------------------------------------------------------------------- Weighted average 65 days 67 days - -------------------------------------------------------------------------------- PORTFOLIO QUALITY SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 6/30/99 - ----------------------------------------------------------------------- Tier 1 100.0% - ----------------------------------------------------------------------- 2 A portion of the fund's expenses was reduced during the periods. Without this reduction, yields would have been lower. PORTFOLIO HIGHLIGHTS SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK) AVERAGE YIELDS FOR THE PERIOD ENDED 6/30/99 - ---------------------------------------------- Last seven days 4.37% - ---------------------------------------------- Last three months 4.31%3 - ---------------------------------------------- Last 12 months 4.60%3 - ---------------------------------------------- MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS MATURITY RANGE 3/31/99 6/30/99 - -------------------------------------------------------------------------------- 0-15 days 27.9% 26.0% - -------------------------------------------------------------------------------- 16-30 days 9.4% 21.2% - -------------------------------------------------------------------------------- 31-60 days 4.3% 21.0% - -------------------------------------------------------------------------------- 61-90 days 26.5% 17.8% - -------------------------------------------------------------------------------- 91-120 days 16.0% 1.3% - -------------------------------------------------------------------------------- More than 120 days 15.9% 12.7% - -------------------------------------------------------------------------------- Weighted average 70 days 67 days - -------------------------------------------------------------------------------- PORTFOLIO QUALITY SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 6/30/99 - -------------------------------------------------------------------------------- Tier 1 100.0% - -------------------------------------------------------------------------------- 3 A portion of the fund's expenses was reduced during the periods. Without this reduction, yields would have been lower. SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK) SCHEDULE OF INVESTMENTS (IN THOUSANDS) JUNE 30, 1999 (unaudited) Par Value ------- ------- COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS -- 76.1% BANKING - BELGIUM -- 6.4% (a) BBL North America 4.88%, 07/21/99 $19,000 $18,949 Generale Funding L.L.C 5.21%, 12/10/99 9,000 8,795 ------- 27,744 ------- BANKING - DOMESTIC -- 5.9% BankAmerica Corp. 4.91%, 08/05/99 5,000 4,977 Intrepid Funding Master Trust (a)(d) 4.92%, 07/09/99 1,000 999 5.24%, 10/05/99 10,000 9,862 Kitty Hawk Funding Corp. (a)(d) 4.98%, 08/16/99 10,000 9,938 ------- 25,776 ------- BANKING - FRANCE -- 1.4% Societe Generale North America 4.93%, 07/08/99 5,980 5,974 ------- Banking - Germany -- 6.2% (a) (d) Bavaria TRR Corp. 4.90%, 07/19/99 12,000 11,971 Giro US Funding Corp. 4.94%, 08/17/99 10,000 9,937 5.24%, 10/05/99 5,000 4,931 ------- 26,839 ------- BANKING - NETHERLANDS -- 4.1% (d) Atlantis One Funding Corp. 4.93%, 08/18/99 5,098 5,065 4.97%, 08/24/99 3,000 2,978 4.97%, 08/26/99 7,518 7,461 4.90%, 09/01/99 2,500 2,480 ------- 17,984 ------- BANKING - NORWAY -- 3.4% (a) Christiania Capital Corp. 4.90%, 08/10/99 15,000 14,920 ------- BANKING - SWEDEN -- 5.7% AB Spintab 4.93%, 07/26/99 6,000 5,980 4.92%, 07/27/99 1,000 997 5.05%, 09/10/99 8,000 7,922 Nordbanken of North America, Inc. 4.92%, 07/12/99 10,000 9,985 ------- 24,884 ------- 1 SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK) SCHEDULE OF INVESTMENTS (IN THOUSANDS) JUNE 30, 1999 (UNAUDITED) Par Value ------- ------- COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS -- (Continued) BANKING - UNITED KINGDOM -- 5.2% Abbey National Treasury Services PLC 5.20%, 05/04/00 $10,000 $ 9,994 Banco Nacional de Mexico S.A. (d) 4.99%, 09/14/99 10,000 9,898 Repeat Offering Securitization Entity, Inc. (a) (d) 4.90%, 07/22/99 2,593 2,586 ------- 22,478 ------- CREDIT CARD RECEIVABLES -- 6.3% (a) (e) Dakota Certificates Program SCCMT-1 4.91%, 07/07/99 10,000 9,992 5.17%, 09/24/99 11,000 10,867 Providian Department Master Trust Series 1993-3 4.91%, 07/16/99 6,500 6,487 ------- 27,346 ------- DIVERSIFIED FINANCIAL ASSETs -- 12.7% (a) (e) Ace Overseas Corp. 4.89%, 08/02/99 7,000 6,970 ------- Bavaria Universal Funding Corp. 4.90%, 07/16/99 7,000 6,986 CC (USA), Inc. 4.90%, 08/02/99 5,000 4,979 Concord Minutemen Capital Co., LLC Series A 5.10%, 08/20/99 7,000 6,951 Lexington Parker Capital Corp. 5.19%, 09/07/99 13,000 12,874 Moriarty L.L.C 4.90%, 07/12/99 3,000 2,996 Sigma Finance, Inc. 5.01%, 07/15/99 5,000 4,990 4.90%, 08/10/99 3,000 2,984 5.01%, 11/17/99 1,000 981 Stellar Funding Group, Inc. 4.92%, 07/06/99 1,000 999 4.89%, 07/22/99 3,893 3,882 ------- 55,592 ------- FINANCE - COMMERCIAL -- 7.2% General Electric Capital Corp. 5.63%, 07/01/99 19,566 19,566 Heller Financial, Inc. 5.00%, 07/16/99 2,000 1,996 5.00%, 07/30/99 10,000 9,960 ------- 31,522 ------- FINANCE - CONSUMER -- 3.2% Associates First Capital Corp. 5.04%, 09/15/99 14,000 13,853 ------- 2 SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK) SCHEDULE OF INVESTMENTS (IN THOUSANDS) JUNE 30, 1999 (UNAUDITED) Par Value ------- ------- COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS -- (CONTINUED) SECURITIES BROKERAGE - DEALER -- 2.5% Bear Stearns Companies, Inc. 4.93%, 07/14/99 $ 1,000 $ 998 JP Morgan & Co. 4.98%, 09/23/99 10,000 9,886 ------- 10,884 ------- TRADE RECEIVABLES -- 5.9% (a) (e) Apreco, Inc. 4.90%, 08/09/99 4,000 3,979 Asset Securitization Cooperative Corp. 5.19%, 07/21/99 12,000 11,965 Clipper Receivables Corp. 5.02%, 09/13/99 4,000 3,959 Wood Street Funding Corp. 4.90%, 08/04/99 6,000 5,973 ------- 25,876 ------- TOTAL COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS (Cost $331,672) 331,672 ------- CERTIFICATES OF DEPOSIT -- 18.8% BANKING - CANADA -- 6.7% Canadian Imperial Bank of Commerce 5.05%, 02/07/00 5,000 4,999 5.45%, 06/01/00 6,000 5,997 Royal Bank of Canada 5.71%, 07/12/99 10,000 10,000 Toronto-Dominion Bank 4.94%, 07/08/99 8,000 8,001 ------- 28,997 ------- BANKING - DOMESTIC -- 4.6% Bankers Trust Co. 4.94%, 07/02/99 10,000 10,000 Chase Manhattan Bank (USA), N.A 4.90%, 08/03/99 10,000 10,000 ------- 20,000 ------- BANKING - SWITZERLAND -- 3.4% UBS AG 5.70%, 07/09/99 6,000 6,000 5.11%, 01/13/00 1,000 1,000 5.10%, 04/12/00 5,000 4,999 5.17%, 05/10/00 3,000 2,999 ------- 14,998 ------- 3 SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK) SCHEDULE OF INVESTMENTS (IN THOUSANDS) JUNE 30, 1999 (UNAUDITED) Par Value ------ --------- CERTIFICATES OF DEPOSIT -- (CONTINUED) BANKING - UNITED KINGDOM -- 4.1% Barclays Bank PLC 5.35%, 05/22/00 $5,000 $ 5,000 5.66%, 06/14/00 6,000 5,997 National Westminster Bank PLC 5.06%, 01/10/00 7,000 6,997 ------- 17,994 ------- TOTAL CERTIFICATES OF DEPOSIT (Cost $81,989) 81,989 ------- VARIABLE RATE OBLIGATIONS -- 5.2% (b) BANKING - DOMESTIC -- 2.5% (d) Asset Partners, Inc. Project RB Series 1997 5.19%, 07/07/99 2,685 2,685 BMC Special Care Facilities Financing Authority of the City of Montgomery, Alabama Taxable RB (Montgomery Baptist Outreach Services Corp. Project) 1997B 5.11%, 07/07/99 2,200 2,200 City of Aurora, Kane, Dupage, Will & Kendall Counties, Illinois Taxable IDRB (North American Plastics Corp. Project) Series 1996B 5.14%, 07/07/99 775 775 Illinois Development Finance Authority Taxable Adjustable Rate IDRB (Maples & Sprowl Steel, Ltd. Project) Series 1996B (a) 5.14%, 07/07/99 383 383 MoviePlex Realty Leasing, L.L.C. Adjustable Rate Tender Securities (Carmike Cinemas, Inc.) Series 1997B3 5.08%, 07/07/99 2,675 2,675 New York City IDA Taxable Industrial Revenue Refunding Bonds (1997 Allway Tools, Inc. Project) 5.44%, 07/07/99 195 195 Upper Illinois River Valley Development Authority Taxable Solid Waste Disposal RB (Exolon - ESK Co. Project) Series 1996B 5.19%, 07/07/99 2,000 2,000 -------- 10,913 -------- SECURITIES BROKERAGE - DEALER -- 2.7% (a) (c) Lehman Commercial Paper, Inc. 5.17%, 07/01/99 1,400 1,400 5.18%, 07/01/99 2,400 2,400 5.27%, 07/20/99 8,000 8,000 -------- 11,800 -------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $22,713 22,713 -------- TOTAL INVESTMENTS-- 100.1% (Cost $436,374) 436,374 -------- OTHER ASSETS AND LIABILITIES -- (0.1%) Other assets 4,710 Liabilities (5,181) -------- (471) -------- TOTAL NET ASSETS-- 100.0% $435,903 ======== See accompanying Notes to Schedule of Investments and Notes to Financial Statements 4 SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK) SCHEDULE OF INVESTMENTS (IN THOUSANDS) JUNE 30, 1999 (UNAUDITED) Par Value ------- ------- COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS -- 72.7% AUTOMOTIVE -- 2.0% Daimler Chrysler N.A. Holdings 4.91%, 07/30/99 $ 5,000 $ 4,981 BANKING - BELGIUM -- 6.1% (a) BBL North America 4.88%, 07/21/99 4,000 3,989 Generale Funding, L.L.C 4.93%, 08/11/99 9,000 8,951 5.21%, 12/10/99 2,000 1,954 ------- 14,894 ------- BANKING - DOMESTIC 2.8% (a) (d) Enterprise Funding Corp. 5.15%, 09/24/99 2,000 1,976 Kitty Hawk Funding Corp. 4.98%, 08/16/99 5,000 4,969 ------- 6,945 ------- BANKING - FRANCE -- 2.0% Societe Generale North America 4.93%, 07/08/99 5,000 4,995 ------- BANKING - GERMANY -- 4.1% (a) (d) Bavaria TRR Corp. 4.90%, 07/19/99 10,000 9,976 ------- BANKING - NETHERLANDS -- 3.7% (d) Atlantis One Funding Corp. 4.91%, 08/13/99 7,000 6,960 4.97%, 08/24/99 2,000 1,985 ------- 8,945 ------- BANKING - NORWAY -- 2.0% (a) Christiania Capital Corp. 4.90%, 08/10/99 5,000 4,973 ------- BANKING - SWEDEN -- 4.7% AB Spintab 5.05%, 09/10/99 3,000 2,971 Nordbanken of North America, Inc. 4.92%, 07/12/99 5,000 4,993 4.95%, 08/10/99 2,500 2,486 Swedbank, Inc. 4.90%, 07/06/99 1,000 999 ------- 11,449 ------- BANKING - UNITED KINGDOM -- 5.6% Abbey National Treasury Services PLC 5.20%, 05/04/00 3,000 2,998 Repeat Offering Securitization Entity, Inc. (a) (d) 4.90%, 07/22/99 4,000 3,989 5 SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK) SCHEDULE OF INVESTMENTS (IN THOUSANDS) JUNE 30, 1999 (UNAUDITED) Par Value ------- ------- COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS -- (CONTINUED) BANKING - UNITED KINGDOM -- (CONTINUED) Yorkshire Building Society 5.10%, 07/19/99 $ 6,829 $ 6,812 ------- 13,799 ------- CREDIT CARD RECEIVABLES -- 2.0% (a) (e) Dakota Certificates Program SCCMT-1 4.91%, 07/07/99 5,000 4,996 ------- DIVERSIFIED FINANCIAL ASSETS -- 14.1% (a) (e) Ace Overseas Corp. 4.89%, 08/02/99 3,000 2,987 CC (USA), Inc. 4.90%, 08/02/99 3,000 2,987 5.30%, 09/28/99 1,000 987 Concord Minutemen Capital Co., L.L.C. Series A 5.10%, 08/20/99 6,000 5,958 International Securitization Corp. 5.17%, 09/17/99 10,000 9,890 Lexington Parker Capital Corp. 4.98%, 08/20/99 3,000 2,980 5.13%, 09/02/99 3,868 3,834 Moriarty L.L.C 5.18%, 09/22/99 1,000 988 Sigma Finance, Inc. 5.00%, 07/15/99 4,000 3,992 ------- 34,603 ------- ELECTRICAL & ELECTRONICS -- 4.5% General Electric Co. 5.63%, 07/01/99 11,000 11,000 ------- FINANCE - COMMERCIAL -- 5.6% General Electric Capital Corp. 5.63%, 07/01/99 2,776 2,776 4.91%, 07/29/99 5,000 4,981 Heller Financial, Inc. 5.00%, 07/30/99 6,000 5,976 ------- 13,733 ------- FINANCE - CONSUMER -- 4.4% Associates First Capital Corp. 5.04%, 09/15/99 11,000 10,885 ------- TRADE RECEIVABLES -- 9.1%(a) (e) Barton Capital Corp. 5.03%, 09/02/99 5,000 4,957 5.11%, 10/05/99 3,473 3,427 Clipper Receivables Corp. 5.02%, 09/13/99 3,000 2,969 6 SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK) SCHEDULE OF INVESTMENTS (IN THOUSANDS) JUNE 30, 1999 (UNAUDITED) Par Value -------- -------- COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS -- (CONTINUED) TRADE RECEIVABLES -- (CONTINUED) Edison Asset Securitization Corp., L.L.C 4.90%, 07/19/99 $ 5,000 $ 4,988 Windmill Funding Corp. 5.55%, 07/01/99 6,000 6,000 -------- 22,341 -------- TOTAL COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS (Cost $178,515) 178,515 -------- CERTIFICATES OF DEPOSIT -- 18.2% BANKING - CANADA -- 5.1% Canadian Imperial Bank of Commerce 5.35%, 03/03/00 4,000 3,998 5.45%, 06/01/00 4,000 3,998 Toronto-Dominion Bank 4.94%, 07/08/99 4,600 4,601 -------- 12,597 -------- BANKING - DOMESTIC -- 2.5% Chase Manhattan Bank (U.S.A.) N.A 4.90%, 08/03/99 6,000 6,000 -------- BANKING - FINLAND -- 1.6% Merita Bank Ltd. 5.03%, 09/14/99 4,000 4,000 -------- BANKING - SWITZERLAND -- 3.7% UBS AG 5.70%, 07/09/99 4,000 4,000 5.10%, 04/12/00 3,000 3,000 5.26%, 05/10/00 2,000 1,999 -------- 8,999 -------- BANKING - UNITED KINGDOM -- 5.3% Barclays Bank PLC 5.35%, 05/22/00 5,000 5,000 5.66%, 06/14/00 5,000 4,997 National Westminster Bank PLC 5.06%, 01/10/00 3,000 2,999 -------- 12,996 -------- TOTAL CERTIFICATES OF DEPOSIT (Cost $44,592) 44,592 -------- VARIABLE RATE OBLIGATIONS -- 8.6% (b) BANKING - DOMESTIC -- 5.2% (d) California Pollution Control Financing Authority Solid Waste Disposable RB (Burr Properties Project) Series 1998 5.43%, 07/07/99 2,200 2,200 7 SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK) SCHEDULE OF INVESTMENTS (IN THOUSANDS) JUNE 30, 1999 (UNAUDITED) Par Value --------- --------- VARIABLE RATE OBLIGATIONS -- (CONTINUED) BANKING - DOMESTIC -- (CONTINUED) Eagle County, Colorado Taxable Housing Facilities RB (BC Housing, L.L.C Project) Series 1997B 5.09%, 07/07/99 $ 1,500 $ 1,500 MoviePlex Realty Leasing, L.L.C. Adjustable Rate Tender Securities (Carmike Cinemas, Inc.) Series 1997B2 5.08%, 07/07/99 2,675 2,675 Trap Rock Industries, Inc. VRD RB Series 1997 (a) 5.30%, 07/07/99 2,350 2,350 Upper Illinois River Valley Development Authority Solid Waste Disposal RB (Exolon - ESK Co. Project) Series 1996B 5.19%, 07/07/99 2,595 2,595 Village of Sturtevant, Wisconsin IDRB (Andis Co. Project) Series 1996B 5.14%, 07/07/99 1,500 1,500 --------- 12,820 --------- BANKING - UNITED KINGDOM -- 0.7% (d) City of Gary, Indiana Taxable Adjustable Rate Economic Development Revenue Refunding Bonds (The Miller Partnership, L.P. Project) Series 1996B 5.14%, 07/07/99 1,680 1,680 --------- SECURITIES BROKER-DEALER -- 2.7% (a) (c) Lehman Commercial Paper, Inc. 5.17%, 07/01/99 280 280 5.18%, 07/01/99 280 280 5.27%, 07/20/99 6,000 6,000 --------- 6,560 --------- TOTAL VARIABLE RATE OBLIGATIONS (COST $21,060) 21,060 --------- TOTAL INVESTMENTS -- 99.5% (COST $244,167) 244,167 --------- OTHER ASSETS AND LIABILITIES -- 0.5% Other assets 3,481 Liabilities (2,224) --------- 1,257 --------- TOTAL NET ASSETS-- 100.0% $ 245,424 ========= See accompanying Notes to Schedule of Investments and Notes to Financial Statements. 8 NOTES TO SCHEDULE OF INVESTMENTS JUNE 30, 1999 (UNAUDITED) (All dollar amounts are in thousands unless otherwise noted) Yields shown are effective yields at the time of purchase, except for variable rate obligations, which are described below. Yields for each type of security are stated according to the market convention for that security type. For each security, cost (for financial reporting and federal income tax purposes) and carrying value are the same. (a) 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 Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab Retirement Money Fund(REGISTRATION MARK). Any resale by the fund must be in an exempt transaction, normally to a qualified institutional buyer. At June 30, 1999, the aggregate value of private placement securities held by the Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab Retirement Money Fund(REGISTRATION MARK) was $213,885 and $111,627 which represented 49.07% and 45.48% of net assets. Of this total, $202,085 and $105,067 or 46.36% and 42.81% of net assets of Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab Retirement Money Fund(REGISTRATION MARK), respectively, were determined by the investment adviser to be liquid in accordance with procedures adopted by the Board of Trustees. (b) 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. All dates shown are considered the maturity date for financial reporting purposes. For variable rate securities without demand features, the next interest reset date is shown. (c) Security 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 typically would bear the expense of all registrations at no cost to the fund. At June 30, 1999, the aggregate value of the restricted securities held by the Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab Retirement Money Fund(REGISTRATION MARK) was $11,800 and $6,560, which represented 2.71% and 2.67% of the net assets of each fund. All of these restricted investments were determined by the investment adviser to be illiquid in accordance with procedures adopted by the Board of Trustees. (d) Security has one or more third party credit enhancements. (e) Asset-backed securities -- backed by underlying assets and categorized by industry. Abbreviations IDA Industrial Development Authority IDRB Industrial Development Revenue Bond RB Revenue Bond VRD Variable Rate Demand SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS. 9 - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES (in thousands) June 30, 1999 (unaudited)
Schwab Institutional Schwab Advantage Retirement Money Fund(REGISTRATION MARK) Money Fund(REGISTRATION MARK) ---------------------------- ----------------------------- ASSETS Investments, at value (Cost: $436,374 and $244,167, respectively) $436,374 $244,167 Receivables: Fund shares sold 2,512 2,540 Interest 2,184 912 Prepaid expenses 14 29 -------- -------- Total assets 441,084 247,648 -------- -------- LIABILITIES Payables: Dividends 835 433 Fund shares redeemed 4,184 1,730 Investment advisory and administration fees 18 18 Transfer agency and shareholder service fees 21 12 Other liabilities 123 31 -------- -------- Total liabilities 5,181 2,224 -------- -------- Net assets applicable to outstanding shares $435,903 $245,424 ======== ======== NET ASSETS CONSIST OF: Paid-in capital $435,906 $245,425 Accumulated net realized loss on investments sold (3) (1) -------- -------- $435,903 $245,424 ======== ======== PRICING OF SHARES Outstanding shares, $0.00001 par value (unlimited shares authorized) 435,964 245,482 Net asset value, offering and redemption price per share $1.00 $1.00
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS. 10 - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS (in thousands) For the six months ended June 30, 1999 (unaudited)
Schwab Institutional Schwab Advantage Retirement Money Fund(REGISTRATION MARK) Money Fund(REGISTRATION MARK) ---------------------------- ----------------------------- Interest income $10,590 $5,730 ------- ------ Expenses: Investment advisory and administration fees 901 487 Transfer agency and shareholder service fees 522 281 Custodian and portfolio accounting fees 82 56 Registration fees 48 12 Professional fees 9 7 Shareholder reports 4 6 Trustees' fees 6 6 Insurance and other expenses 6 5 ------- ------ 1,578 860 ------- ------ Less: expenses reduced (see Note 4) (534) (45) ------- ------ Total expenses incurred by fund 1,044 815 ------- ------ Net investment income 9,546 4,915 ------- ------ Increase in net assets resulting from operations $ 9,546 $4,915 ======= ======
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS. 11 - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
Schwab Institutional Schwab Advantage Retirement Money Fund(REGISTRATION MARK) Money Fund(REGISTRATION MARK) ----------------------------- ----------------------------- Six months Six months ended Year ended ended Year ended June 30, 1999 December 31, June 30, 1999 December 31, (unaudited) 1998 (unaudited) 1998 ------------- ------------ ------------- ------------ Operations: Net investment income $ 9,546 $ 16,792 $ 4,915 $ 9,127 --------- --------- --------- --------- Increase in net assets resulting from operations 9,546 16,792 4,915 9,127 --------- --------- --------- --------- Dividends to shareholders from net investment income (see Note 2) (9,546) (16,838) ( 4,915) (9,172) --------- --------- --------- --------- Capital share transactions (at $1.00 per share): Proceeds from shares sold 660,907 707,322 144,397 295,869 Net asset value of shares issued in reinvestment of dividends 10,886 15,535 5,692 8,885 Less payments for shares redeemed (604,943) (629,095) (129,260) (235,017) --------- --------- --------- --------- Increase in net assets from capital share transactions 66,850 93,762 20,829 69,737 --------- --------- --------- --------- Total increase in net assets 66,850 93,716 20,829 69,692 Net Assets: Beginning of period 369,053 275,337 224,595 154,903 --------- --------- --------- --------- End of period $ 435,903 $ 369,053 $ 245,424 $ 224,595 ========= ========= ========= =========
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS. 12 SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK) - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
1999 1 1998 1997 1996 1995 1994 2 -------- -------- -------- ------- ------- ------ FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD: Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- ------- ------- From investment operations: Net investment income 0.02 0.05 0.05 0.05 0.06 0.04 -------- -------- -------- -------- ------- ------- Total from investment operations 0.02 0.05 0.05 0.05 0.06 0.04 Less distributions: Dividends from net investment income (0.02) (0.05) (0.05) (0.05) (0.06) (0.04) -------- -------- -------- -------- ------- ------- Total distributions (0.02) (0.05) (0.05) (0.05) (0.06) (0.04) -------- -------- -------- -------- ------- ------- NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======= ======= Total return (%) 2.29** 5.26 5.31 5.15 5.65 3.86** RATIOS/SUPPLEMENTAL DATA (%) - ---------------------------- Ratio of net operating expenses to average net assets 0.50* 0.50 0.50 0.50 0.53 0.55* Reductions reflected in above expense ratio 0.26* 0.29 0.34 0.38 0.37 0.37* Ratio of net investment income to average net assets 4.57* 5.12 5.20 5.03 5.50 4.04* Net assets, end of period (000s) $435,903 $369,053 $275,337 $139,021 $80,746 $60,088 - -------------- 1 For the six months ended June 30, 1999 (unaudited). 2 For the period January 4, 1994 (commencement of operations) to December 31, 1994. * Annualized. ** Not annualized.
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS. 13 SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK) - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
1999 1 1998 1997 1996 1995 1994 2 -------- -------- -------- ------- ------- ------ FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD: Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- ------- ------- From investment operations: Net investment income 0.02 0.05 0.05 0.05 0.05 0.03 -------- -------- -------- -------- ------- ------- Total from investment operations 0.02 0.05 0.05 0.05 0.05 0.03 Less distributions: Dividends from net investment income (0.02) (0.05) (0.05) (0.05) (0.05) (0.03) -------- -------- -------- -------- ------- ------- Total distributions (0.02) (0.05) (0.05) (0.05) (0.05) (0.03) -------- -------- -------- -------- ------- ------- NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======= ======= Total return (%) 2.19** 5.03 5.07 4.93 5.43 3.29** Ratios/Supplemental Data (%) - ------------------------------------------ Ratio of net operating expenses to average net assets 0.72* 0.73 0.73 0.73 0.73 0.73* Reductions reflected in above expense ratio 0.04* 0.07 0.11 0.15 0.19 0.32* Ratio of net investment income to average net assets 4.37* 4.88 4.96 4.83 5.28 4.04* Net assets, end of period (000s) $245,424 $224,595 $154,903 $136,319 $98,992 $31,415 - -------------- 1 For the six months ended June 30, 1999 (unaudited). 2 For the period March 2, 1994 (commencement of operations) to December 31, 1994. * Annualized. ** Not annualized.
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS. 14 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS For the six months ended June 30, 1999 (unaudited) (All dollar amounts are in thousands unless otherwise noted) 1. DESCRIPTION OF THE FUNDS The Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab Retirement Money Fund(REGISTRATION MARK) (the "funds") are a series of The Charles Schwab Family of Funds (the "Trust"), an open-end investment management company organized as a Massachusetts business trust on October 20, 1989, and registered under the Investment Company Act of 1940 (the "Act"), as amended. In addition to the funds, the Trust also offers the Schwab Money Market Fund, Schwab Government Money Fund, Schwab U.S. Treasury Money Fund, 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, Schwab Value Advantage 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. 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 and accretion of discount on investments. Realized gains and losses from security transactions are determined on an identified cost basis. REPURCHASE AGREEMENTS -- Repurchase agreements are fully collateralized by U.S. government securities. All collateral is held by the funds' custodian, except in the case of a tri-party agreement, under which the collateral is held by an agent bank. The collateral is monitored daily to ensure that its market value at least equals the repurchase price under the agreement. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The funds declare a daily dividend, equal to its net investment income for that day, payable monthly. Net realized capital gains, if any, are normally distributed annually. EXPENSES -- Expenses arising in connection with the funds are charged directly to the funds. Expenses common to all series of the Trust generally are allocated to each series in proportion to their relative net assets. FEDERAL INCOME TAXES -- It is the funds' policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all net investment income and realized net capital gains, if any, to shareholders. Therefore, no federal income tax provision is required. The funds are considered a separate entity for tax purposes. 15 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) At December 31, 1998, the unused capital loss carryforward, for federal income tax purposes with expiration dates, were as follows:
Schwab Expiring in: Institutional Advantage Schwab MoneyFund(REGISTRATION MARK) Retirement Money Fund(REGISTRATION MARK) - ----------------------------- ---------------------------- ---------------------------------------- 12/31/04 $3 $1 -- -- Total capital loss carryforward $3 $1 -- -- -- --
3. Transactions with affiliates INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS -- The Trust has an investment advisory and administration agreements with Charles Schwab Investment Management, Inc. (the "investment adviser"). For advisory services and facilities furnished, the funds pays an annual fee, payable monthly, of 0.38% on the first $1 billion of average daily net assets, 0.35% on such assets in excess of $1 billion to $10 billion, 0.32% on such assets in excess of $10 billion to $20 billion, and 0.30% on such assets in excess of $20 billion. Prior to May 1, 1999 the funds paid an annual fee, payable monthly, of 0.46% on the first $1 billion of average daily net assets, 0.45% on the next $2 billion, 0.40% on the next $7 billion, 0.37% on the next $10 billion, and 0.34% on such net assets in excess of $20 billion. The investment adviser has reduced a portion of its fee for the six months ended June 30, 1999 (see Note 4). TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The Trust has transfer agency and shareholder service agreements with Charles Schwab & Co., Inc. ("Schwab"). For services provided under these agreements, Schwab receives a combined annual fee, payable monthly, of 0.25% of average daily net assets. OFFICERS AND TRUSTEES -- Certain officers and trustees of the Trust are also officers and/or directors of the investment adviser and/or Schwab. During the six months ended June 30, 1999, the Trust made no direct payments to its officers or trustees who are "interested persons" within the meaning of the Act, as amended. The funds incurred fees of $12 related to the Trust's unaffiliated trustees. 4. EXPENSES REDUCED BY THE INVESTMENT ADVISER AND SCHWAB The investment adviser and Schwab guarantee that, through at least April 30, 2000, the Schwab Institutional Advantage MoneyFund(REGISTRATION MARK) and Schwab Retirement Money Fund(REGISTRATION MARK) total operating expenses will not exceed 0.50% and 0.73%, respectfully of the funds' average daily net assets, after reductions. For the purpose of this guarantee, operating expenses do not include interest expenses, extraordinary expenses and taxes. For the six months ended June 30, 1999, the total of such fees reduced by the investment adviser was $534 and $45 for the Schwab Institutional Advantage MoneyFund(REGISTRATION MARK) and Schwab Retirement Money Fund(REGISTRATION MARK), respectively. 16 THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS. A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU. SCHWABFUNDS(REGISTRATION MARK) [GRAPHIC OMITTED] INVESTMENT ADVISER: Charles Schwab Investment Management, Inc., 101 Montgomery Street, San Francisco, CA 94104 DISTRIBUTOR: Charles Schwab & Co., Inc., 101 Montgomery Street, San Francisco, CA 94104 This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus. (C)1999 Charles Schwab & Co., Inc. All rights reserved. Member SIPC/NYSE. (0099-0837) MKT3860-1 (6/99) -----END PRIVACY-ENHANCED MESSAGE-----