N-CSR

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.

Dear Shareholder,

I’d like to thank you for trusting us to help you meet your investment goals, and for reading this annual report regarding the Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund. These funds are designed to offer stability of capital, liquidity, and income, and are meant to help serve as part of the foundation of an investor’s portfolio.

For the 12-month reporting period ended December 31, 2014, yields on taxable money market securities remained at extremely low levels due to the Federal Reserve’s efforts to keep short-term interest rates near zero percent. Overseas, the European Central Bank, the Bank of Japan, and many other central banks also remained focused on keeping interest rates low while attempting to stimulate their stalled economies.

In related industry matters, the Securities and Exchange Commission released final guidance regarding the rules that govern money market funds in July 2014. We believe that these amendments strike the right balance of preserving an important cash management tool for investors, while protecting investors from the possibility of significant money market fund redemptions during a crisis. Investors will also benefit from enhanced disclosures and increased protections from these changes.

For more information about these developments, please visit the “Insights” section of www.csimfunds.com, where you’ll find links under the heading, “Money Fund Reform FAQ.” In addition, we are excited to announce the launch of Schwab Government Money Fund Purchased Shares, which you can learn about by visiting our website or by contacting us at 1-800-435-4000. For information about the Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund, please continue reading this report.

Sincerely,

Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling Schwab at 800-435-4000. Please read the prospectus carefully before investing.

2 Schwab Retirement Advantage Money Fund & Schwab Investor Money Fund

Schwab Retirement Advantage Money Fund^®

The Schwab Retirement Advantage Money Fund (the fund) seeks the highest current income consistent with stability of capital and liquidity. To pursue its goal, the fund invests in high-quality, short-term money market instruments issued by U.S. and foreign issuers. Examples of these securities include commercial paper, certificates of deposit, repurchase agreements, variable-rate debt securities, and obligations issued by the U.S. government or its agencies and instrumentalities. For more information concerning the fund’s investment objective, strategy, and risks, please see the fund’s prospectus.

Since December 2008, when the Federal Reserve (the Fed) first cut short-term interest rates to present-day levels, yields on money market securities have remained historically low—a trend that continued throughout the period. As a result, and to help the fund maintain a positive net yield, the fund’s investment adviser and its affiliates voluntarily waived certain fees or expenses during the reporting period.¹ For more information about the fund’s yield and other important characteristics, please review the charts and footnotes that follow this discussion.

Market Highlights. For the 12-month reporting period ended December 31, 2014, the U.S. economy rebounded, with many economic measures showing signs of improvement. Outside the U.S., however, many economies faltered during the reporting period, contributing to an uncertain global economic outlook and an appreciation of the U.S. dollar versus international currencies. The Fed kept short-term interest rates at or near record lows and in October, concluded measured efforts to hold down long-term interest rates. The Fed also continued to perform daily test operations of its Reverse Repurchase Facility. The facility sells and repurchases securities and has essentially helped establish a floor for short-term interest rates. This program has become an important source of taxable money market supply and serves as another tool to help the Fed manage its policies. The program is set to continue through January 31, 2016.

Available supply of money market securities largely remains constrained as stricter regulatory mandates have increased the costs of selling short-term securities for many issuers. These higher costs and persistently low interest rates have instead encouraged the issuance of longer-term securities.

Performance, Positioning, and Strategies. Throughout the reporting period, the fund’s investment adviser remained focused on ensuring liquidity and stability of capital as market conditions evolved. As rates and rate expectations remained low, the weighted average maturity of the fund in general remained extended. With the euro zone generally stable, and support from the European Central Bank for the region’s banking system continuing, the fund continued to selectively invest in securities from European countries such as France, the Netherlands, Switzerland, Sweden, and the United Kingdom. The fund’s investment adviser continues to monitor exposure to Europe broadly, as growth remains weak, inflation remains low, and political risks are heightened. As noted above, the fund continued to waive certain fees and expenses in order to maintain a 0.01% yield. Additionally, money market reform final guidance was released in July 2014 and continues to be closely monitored by the investment adviser.

As of 12/31/14:

Portfolio Composition By Maturity²


	% of investments

1-7 Days		36.4%
8-30 Days		22.2%
31-60 Days		8.4%
61-90 Days		9.3%
91-180 Days		22.6%
More than 180 Days		1.1%
Total		100.0%

Statistics


Weighted Average Maturity³		48 Days
Credit Quality Of Holdings⁴% of portfolio		99.99% Tier 1

Portfolio Composition by Security Type


	% of investments

Commercial Paper
Asset Backed		11.1%
Financial Company		8.1%
Other		1.4%
Certificate Of Deposit		41.1%
Government Agency Debt		2.2%
Treasury Debt		1.1%
Other Instrument		5.7%
Variable Rate Demand Note		0.9%
Other Note		5.4%
Repurchase Agreement
Government Agency		17.4%
Treasury		1.7%
Other		3.9%
Total		100.0%

An investment in a money fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although money funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in a money fund.

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


¹		The investment adviser and its affiliates may recapture expenses or fees they waived under a voluntary yield waiver until the third anniversary of the end of the fiscal year in which such waiver occurs, subject to certain limitations. For more information on the potential impact of such recapture on future yields, see financial note 4.
²		As shown in the Portfolio Holdings section of the shareholder report.
³		Money funds must maintain a dollar-weighted average maturity of no longer than 60 days and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months).
⁴		Tier 1 securities are rated in the highest short-term rating category by two nationally recognized statistical rating organizations (“NRSROs”), or by one if only one NRSRO has rated the securities, or, if unrated, determined to be of comparable quality by CSIM pursuant to guidelines adopted by the Board of Trustees. Money market fund shares and U.S. government securities are also Tier 1 securities. The fund uses NRSRO credit ratings from Standard & Poor’s Corp., Moody’s Investors Service, Fitch Ratings, and/or DBRS. The fund may use different ratings provided by other rating agencies for purposes of determining compliance with the fund’s investment policies. The fund itself has not been rated by an independent credit rating agency.

4 Schwab Retirement Advantage Money Fund^®

Performance and Fund Facts as of 12/31/14

The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be lower or higher than performance data quoted. To obtain more current performance information, please visit www.csimfunds.com/schwabfunds_prospectus.

Seven-Day Average Yield Trend for previous 12 months

Seven-Day Yields

The seven-day yield is the income generated by the fund’s portfolio holdings minus the fund’s operating expenses. The seven-day yields are calculated using standard SEC formulas. The effective yield includes the effect of reinvesting daily dividends. Please remember that money market fund yields fluctuate.


		Schwab Retirement Advantage Money Fund^®

Ticker Symbol		SWIXX
Minimum Initial Investment¹		$25,000


Seven-Day Yield²		0.01%


Seven-Day Yield–Without Contractual Expense Limitation³		-0.15%


Seven-Day Effective Yield²		0.01%

Portfolio holdings may have changed since the report date.


¹		Please see prospectus for further detail and eligibility requirements.
²		Yield reflects the effect of the fund’s agreement with the investment adviser and its affiliates to limit the fund’s total annual operating expenses to certain levels (contractual expense limitation). In addition, the investment adviser and its affiliates have voluntarily waived expenses in excess of the contractual expense limitation to maintain a positive net yield for the fund (voluntary yield waiver). Without the contractual expense limitation and the voluntary yield waiver, the fund’s yield would have been lower. For additional details, see financial note 4.
³		Yield does not reflect the effect of the contractual expense limitation, but does reflect the effect of the voluntary yield waiver. The voluntary yield waiver added 0.24% to the seven-day yield.

Schwab Retirement Advantage Money Fund^® 5

Schwab Investor Money Fund^®

The Schwab Investor Money Fund (the fund) seeks the highest current income consistent with stability of capital and liquidity. To pursue its goal, the fund invests in high-quality, short-term money market instruments issued by U.S. and foreign issuers. Examples of these securities include commercial paper, certificates of deposit, repurchase agreements, variable-rate debt securities, and obligations issued by the U.S. government or its agencies and instrumentalities. For more information concerning the fund’s investment objective, strategy, and risks, please see the fund’s prospectus.

As of 12/31/14:

Portfolio Composition By Maturity²


	% of investments

1-7 Days		35.0%
8-30 Days		21.9%
31-60 Days		9.9%
61-90 Days		10.4%
91-180 Days		20.7%
More than 180 Days		2.1%
Total		100.0%

Statistics


Weighted Average Maturity³		49 Days
Credit Quality Of Holdings⁴% of portfolio		99.99% Tier 1

Portfolio Composition by Security Type


	% of investments

Commercial Paper
Asset Backed		11.2%
Financial Company		9.2%
Other		2.0%
Certificate Of Deposit		40.1%
Government Agency Debt		1.9%
Treasury Debt		2.4%
Other Instrument		6.1%
Variable Rate Demand Note		0.5%
Other Note		2.9%
Repurchase Agreement
Government Agency		18.5%
Treasury		1.4%
Other		3.8%
Total		100.0%

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


¹		The investment adviser and its affiliates may recapture expenses or fees they waived under a voluntary yield waiver until the third anniversary of the end of the fiscal year in which such waiver occurs, subject to certain limitations. For more information on the potential impact of such recapture on future yields, see financial note 4.
²		As shown in the Portfolio Holdings section of the shareholder report.
³		Money funds must maintain a dollar-weighted average maturity of no longer than 60 days and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months).
⁴		Tier 1 securities are rated in the highest short-term rating category by two nationally recognized statistical rating organizations (“NRSROs”), or by one if only one NRSRO has rated the securities, or, if unrated, determined to be of comparable quality by CSIM pursuant to guidelines adopted by the Board of Trustees. Money market fund shares and U.S. government securities are also Tier 1 securities. The fund uses NRSRO credit ratings from Standard & Poor’s Corp., Moody’s Investors Service, Fitch Ratings, and/or DBRS. The fund may use different ratings provided by other rating agencies for purposes of determining compliance with the fund’s investment policies. The fund itself has not been rated by an independent credit rating agency.

6 Schwab Investor Money Fund^®

Performance and Fund Facts as of 12/31/14

Seven-Day Average Yield Trend for previous 12 months

Seven-Day Yields


		Schwab Investor Money Fund^®

Ticker Symbol		SWRXX
Minimum Initial Investment¹		$1 Retirement Plan Participants $2,500 Other Investors


Seven-Day Yield²		0.01%


Seven-Day Yield–Without Contractual Expense Limitation³		-0.03%


Seven-Day Effective Yield²		0.01%

Portfolio holdings may have changed since the report date.


¹		Please see prospectus for further detail and eligibility requirements.
²		Yield reflects the effect of the fund’s agreement with the investment adviser and its affiliates to limit the fund’s total annual operating expenses to certain levels (contractual expense limitation). In addition, the investment adviser and its affiliates have voluntarily waived expenses in excess of the contractual expense limitation to maintain a positive net yield for the fund (voluntary yield waiver). Without the contractual expense limitation and the voluntary yield waiver, the fund’s yield would have been lower. For additional details, see financial note 4.
³		Yield does not reflect the effect of the contractual expense limitation, but does reflect the effect of the voluntary yield waiver. The voluntary yield waiver added 0.38% to the seven-day yield.

Schwab Investor Money Fund^® 7

Fund Expenses (Unaudited)

Examples for a $1,000 Investment

As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.

The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning July 1, 2014 and held through December 31, 2014.

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

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

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


					Ending
			Beginning		Account Value		Expenses Paid
	Expense Ratio¹		Account Value		(Net of Expenses)		During Period²
	(Annualized)		at 7/1/14		at 12/31/14		7/1/14–12/31/14

Schwab Retirement Advantage Money Fund^®
Actual Return		0.21%	$	1,000.00	$	1,000.10	$	1.06
Hypothetical 5% Return		0.21%	$	1,000.00	$	1,024.14	$	1.07


Schwab Investor Money Fund^®
Actual Return		0.21%	$	1,000.00	$	1,000.10	$	1.06
Hypothetical 5% Return		0.21%	$	1,000.00	$	1,024.14	$	1.07


¹		Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period.
²		Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by 365 days of the fiscal year.

8 Schwab Retirement Advantage Money Fund & Schwab Investor Money Fund

Schwab Retirement Advantage Money Fund

Portfolio Holdings as of December 31, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarter of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also files a complete schedule of portfolio holdings with the SEC monthly on Form N-MFP which is available 60 days after the end of the month to which the information pertains. A monthly schedule of portfolio holdings is also available by visiting the fund’s website at www.csimfunds.com/schwabfunds_prospectus along with a link to the fund’s Form N-MFP filings on the SEC’s website.

For fixed rate obligations, the rate shown is the coupon rate (the rate established when the obligation was issued) and if the coupon rate is not available, the effective yield at the time of purchase is shown. For variable-rate obligations, the rate shown is the interest rate as of the report date. If the security’s structure includes one of a number of maturity-shortening provisions set forth in Rule 2a-7, such as an interest rate reset, demand feature or put feature, the effective maturity date is disclosed. In addition, the second maturity date shown is either the date on which the principal amount must be paid or the date payment must be made pursuant to a demand feature. If the effective maturity and maturity date are the same, the date will appear in the maturity date column.


				Cost		Value
Holdings by Category				($)		($)

	58	.4%	Fixed-Rate Obligations		432,898,244		432,898,244
	18	.3%	Variable-Rate Obligations		136,001,135		136,001,135
	23	.0%	Repurchase Agreements		170,282,163		170,282,163


	99	.7%	Total Investments		739,181,542		739,181,542
	0	.3%	Other Assets and Liabilities, Net				1,898,273


	100	.0%	Net Assets				741,079,815


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

Fixed-Rate Obligations 58.4% of net assets

Asset Backed Commercial Paper 11.0%
Bennington Stark Capital Co, LLC	a,b,c	0.28%			03/16/15		1,000,000		999,424

CAFCO, LLC	a,b,c	0.25%			02/19/15		2,000,000		1,999,319
	a,b,c	0.25%			03/09/15		1,000,000		999,535
	a,b,c	0.25%			03/17/15		4,000,000		3,997,916
	a,b,c	0.25%			06/04/15		5,000,000		4,994,653

Cancara Asset Securitisation, LLC	a,b,c	0.21%			02/26/15		2,000,000		1,999,347

Chariot Funding, LLC	a,b,c	0.29%			07/01/15		3,000,000		2,995,626

Charta, LLC	a,b,c	0.25%			02/25/15		4,000,000		3,998,472
	a,b,c	0.25%			05/11/15		2,000,000		1,998,194

Ciesco, LLC	a,b,c	0.25%			05/04/15		2,000,000		1,998,292

Collateralized Commercial Paper Co, LLC	a,b	0.38%			06/08/15		3,000,000		2,994,997

Collateralized Commercial Paper II Co, LLC	b,c	0.40%			06/10/15		3,000,000		2,994,667

CRC Funding, LLC	a,b,c	0.25%			03/25/15		5,000,000		4,997,118
	a,b,c	0.25%			05/04/15		4,000,000		3,996,583

Crown Point Capital Co, LLC	a,b,c	0.23%			01/13/15		4,000,000		3,999,693
	a,b,c	0.26%			02/02/15		1,000,000		999,769

Govco, LLC	a,b,c	0.18%			01/15/15		4,000,000		3,999,720

Jupiter Securitization Corp	a,b,c	0.25%			06/09/15		3,000,000		2,996,687
	a,b,c	0.29%			06/17/15		2,000,000		1,997,309
	a,b,c	0.29%			07/01/15		5,000,000		4,992,710

Old Line Funding, LLC	a,b,c	0.22%			04/27/15		2,000,000		1,998,582
	a,b,c	0.22%			05/01/15		1,000,000		999,267

10 See financial notes

Schwab Retirement Advantage Money Fund

Portfolio Holdings continued


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

Ridgefield Funding Co, LLC	a,b,c	0.26%			03/02/15		4,000,000		3,998,267
	a,b,c	0.35%			06/02/15		1,000,000		998,522

Sheffield Receivables Corp	a,b,c	0.25%			02/17/15		3,000,000		2,999,021
	a,b,c	0.25%			02/18/15		1,000,000		999,667
	a,b,c	0.25%			03/12/15		2,000,000		1,999,028
	a,b,c	0.27%			04/17/15		3,000,000		2,997,615

Thunder Bay Funding, LLC	a,b,c	0.22%			01/20/15		3,000,000		2,999,652
	a,b,c	0.22%			04/15/15		2,000,000		1,998,729

									81,938,381

Financial Company Commercial Paper 7.1%
Barclays US Funding Corp	a	0.35%			04/27/15		4,000,000		3,995,489

BPCE SA	c	0.24%			01/05/15		2,000,000		1,999,947

General Electric Capital Corp		0.22%			04/14/15		5,000,000		4,996,853
		0.22%			04/16/15		3,000,000		2,998,075
		0.22%			05/28/15		10,000,000		9,991,017
		0.25%			06/24/15		2,000,000		1,997,583

ING (U.S.) Funding, LLC	a	0.27%			04/06/15		6,000,000		5,995,725

Macquarie Bank, Ltd		0.26%			03/13/15		5,000,000		4,997,436

Natixis SA		0.10%			01/06/15		7,000,000		6,999,903

Oversea-Chinese Banking Corp, Ltd		0.24%			06/01/15		1,000,000		998,993

Skandinaviska Enskilda Banken AB		0.25%			01/21/15		3,000,000		2,999,583

Swedbank AB		0.24%			04/17/15		1,000,000		999,308

United Overseas Bank, Ltd		0.25%			03/04/15		4,000,000		3,998,278

									52,968,190

Other Commercial Paper 1.2%
Toyota Motor Credit Corp		0.22%			05/01/15		1,000,000		999,267
		0.23%			05/13/15		3,000,000		2,997,470
		0.23%			05/14/15		5,000,000		4,995,751

									8,992,488

Certificates of Deposit 28.5%
Abbey National Treasury Services PLC	a	0.25%			02/11/15		2,000,000		2,000,000
	a	0.25%			02/19/15		1,000,000		1,000,000

Bank of Montreal		0.12%			01/02/15		6,000,000		6,000,000
		0.20%			01/12/15		4,000,000		4,000,000
		0.17%			01/21/15		5,000,000		5,000,000
		0.22%			04/09/15		3,000,000		3,000,000

Bank of Tokyo Mitsubishi UFJ, Ltd		0.13%			01/02/15		3,000,000		3,000,000
		0.30%			03/02/15		1,000,000		1,000,000
		0.29%			04/06/15		5,000,000		5,000,000
		0.30%			04/06/15		3,000,000		3,000,000

Barclays Bank PLC		0.30%			02/03/15		1,000,000		1,000,000
		0.30%			02/05/15		2,000,000		2,000,000
		0.30%			02/06/15		3,000,000		3,000,000
		0.30%			03/25/15		2,000,000		2,000,000

See financial notes 11

Schwab Retirement Advantage Money Fund

Portfolio Holdings continued


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

BNP Paribas		0.31%			06/01/15		2,000,000		2,000,000

Chase Bank USA, NA		0.38%			01/02/15		1,000,000		1,000,000

Citibank, NA		0.25%			03/20/15		4,000,000		4,000,000
		0.25%			03/27/15		1,000,000		1,000,000
		0.25%			05/04/15		7,000,000		7,000,000

Credit Agricole Corporate and Investment Bank		0.22%			02/02/15		1,000,000		1,000,000

Credit Suisse AG		0.25%			02/19/15		2,000,000		2,000,000
		0.33%			03/26/15		3,000,000		3,000,000
		0.33%			06/10/15		4,000,000		4,000,000
		0.33%			06/18/15		2,000,000		2,000,000

HSBC Bank USA		0.24%			04/22/15		3,000,000		3,000,000

ING Bank NV		0.30%			04/24/15		2,000,000		2,000,000
		0.30%			05/12/15		4,000,000		4,000,000
		0.30%			05/18/15		1,000,000		1,000,000
		0.30%			05/21/15		1,000,000		1,000,000

Lloyds Bank PLC		0.48%			03/12/15		3,000,000		3,000,000

Mitsubishi UFJ Trust & Banking Corp		0.26%			02/23/15		7,000,000		7,000,000
		0.25%			04/09/15		1,000,000		1,000,000
		0.25%			04/21/15		1,000,000		1,000,000
		0.25%			04/23/15		2,000,000		2,000,000
		0.25%			05/13/15		2,000,000		2,000,000
		0.26%			06/02/15		1,000,000		1,000,000
		0.28%			06/29/15		2,000,000		2,000,000

Mizuho Bank, Ltd		0.25%			02/25/15		2,000,000		2,000,000
		0.26%			06/16/15		2,000,000		2,000,000

Nordea Bank Finland PLC		0.22%			03/23/15		6,000,000		5,999,933
		0.24%			05/26/15		1,000,000		1,000,000

Oversea-Chinese Banking Corp, Ltd		0.23%			01/20/15		3,000,000		2,999,984

Rabobank Nederland		0.25%			03/24/15		10,000,000		10,000,000
		0.25%			04/01/15		2,000,000		2,000,000
		0.25%			06/11/15		7,000,000		7,000,000

Skandinaviska Enskilda Banken AB		0.25%			04/10/15		10,000,000		10,000,000

Societe Generale		0.22%			02/03/15		1,000,000		1,000,000

State Street Bank & Trust Company, NA		0.22%			01/21/15		6,000,000		6,000,000

Sumitomo Mitsui Banking Corp		0.25%			01/27/15		2,000,000		2,000,000
		0.25%			01/28/15		4,000,000		4,000,000
		0.25%			02/03/15		3,000,000		3,000,000
		0.37%			02/10/15		1,000,000		1,000,000
		0.30%			03/03/15		2,000,000		2,000,000
		0.25%			03/06/15		2,000,000		2,000,000
		0.25%			04/01/15		1,000,000		1,000,000
		0.25%			05/12/15		2,000,000		2,000,000
		0.25%			05/14/15		1,000,000		1,000,000
		0.26%			06/08/15		3,000,000		3,000,000

Sumitomo Mitsui Trust Bank, Ltd		0.20%			01/05/15		1,000,000		1,000,000
		0.20%			01/14/15		6,000,000		6,000,000
		0.20%			01/27/15		1,000,000		1,000,000

12 See financial notes

Schwab Retirement Advantage Money Fund

Portfolio Holdings continued


							Face
			Effective		Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity		Date		($)		($)
		0.26%				03/30/15		5,000,000		5,000,000

Swedbank AB		0.26%				06/01/15		2,000,000		2,000,000

Toronto-Dominion Bank		0.08%				01/06/15		11,000,000		11,000,000
		0.22%				01/23/15		5,000,000		5,000,000
		0.29%				06/16/15		4,000,000		4,000,000

UBS AG		0.23%				01/16/15		2,000,000		2,000,000
		0.25%				02/17/15		5,000,000		5,000,000

										210,999,917

Government Agency Debt 2.2%
Federal Home Loan Bank		0.09%				01/02/15		2,000,000		1,999,995
		0.09%				01/23/15		14,000,000		13,999,273

										15,999,268

Other Instruments 5.7%
Australia & New Zealand Banking Group, Ltd		0.12%				01/02/15		11,000,000		11,000,000

Canadian Imperial Bank of Commerce		0.04%				01/02/15		5,000,000		5,000,000

National Australia Bank, Ltd		0.05%				01/02/15		10,000,000		10,000,000

National Bank of Canada		0.09%				01/05/15		6,000,000		6,000,000

Svenska Handelsbanken AB		0.04%				01/02/15		10,000,000		10,000,000

										42,000,000

Other Notes 2.7%
Bank of America, NA		0.25%				01/05/15		3,000,000		3,000,000
		0.25%				01/09/15		1,000,000		1,000,000
		0.25%				01/26/15		5,000,000		5,000,000
		0.25%				04/17/15		1,000,000		1,000,000
		0.25%				04/22/15		6,000,000		6,000,000
		0.28%				06/18/15		4,000,000		4,000,000

										20,000,000

Total Fixed-Rate Obligations
(Cost $432,898,244)										432,898,244




Variable-Rate Obligations 18.3% of net assets

Financial Company Commercial Paper 0.9%
Westpac Banking Corp	c	0.24%		01/12/15		06/12/15		5,000,000		5,000,000
	c	0.25%		01/27/15		07/27/15		2,000,000		2,000,000

										7,000,000

Other Commercial Paper 0.1%
Toyota Motor Credit Corp	a	0.22%		01/20/15		02/10/15		1,000,000		1,000,000

Certificates of Deposit 12.6%
Abbey National Treasury Services PLC	a	0.31%		01/05/15		02/04/15		4,000,000		4,000,000

Bank of Nova Scotia		0.24%		01/28/15		04/28/15		5,000,000		5,000,000
		0.24%		01/26/15		05/26/15		4,000,000		4,000,000

See financial notes 13

Schwab Retirement Advantage Money Fund

Portfolio Holdings continued


							Face
			Effective		Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity		Date		($)		($)

Commonwealth Bank of Australia		0.25%		01/26/15		02/25/15		2,000,000		2,000,000
		0.24%		01/20/15		06/19/15		12,000,000		12,000,000

JPMorgan Chase Bank, NA		0.31%		01/22/15		10/22/15		1,000,000		1,000,000
		0.30%		01/23/15		10/23/15		2,000,000		2,000,000
		0.31%		01/27/15		10/27/15		5,000,000		5,000,000
		0.30%		01/08/15		12/08/15		4,000,000		4,000,000

Rabobank Nederland		0.23%		01/20/15		04/20/15		2,000,000		2,000,000

Royal Bank of Canada		0.24%		01/05/15		03/04/15		4,000,000		4,000,000
		0.25%		01/05/15		09/04/15		5,000,000		5,000,000

State Street Bank & Trust Company, NA		0.23%		01/13/15		04/13/15		4,000,000		4,000,000

Toronto-Dominion Bank		0.23%		01/16/15		06/16/15		5,000,000		5,000,000
		0.24%		01/21/15		07/21/15		4,000,000		4,000,000

Wells Fargo Bank, NA		0.23%		01/07/15		04/07/15		2,000,000		2,000,000
		0.25%		01/20/15		05/20/15		5,000,000		5,000,000
		0.25%		01/08/15		08/10/15		7,000,000		7,000,000
		0.27%		01/21/15		11/23/15		10,000,000		10,000,000

Westpac Banking Corp		0.24%		01/12/15		05/11/15		6,000,000		6,000,000

										93,000,000

Variable Rate Demand Notes 0.9%
New York City IDA
IDRB (Allway Tools) Series 1997	a	0.41%				01/07/15		50,000		50,000

Palm Springs, CA
COP (Downtown Parking) Series 2002A	a	0.20%				01/07/15		6,915,000		6,915,000

										6,965,000

Treasury Debt 1.1%
United States Treasury Department		0.09%		01/02/15		01/31/16		5,000,000		4,999,205
		0.11%		01/02/15		07/31/16		3,000,000		3,000,000

										7,999,205

Other Notes 2.7%
Bank of America, NA		0.36%		01/05/15		03/05/15		2,000,000		2,000,000

Canadian Imperial Bank of Commerce		0.28%		01/12/15		09/04/15		6,000,000		6,000,000

Royal Bank of Canada		0.35%		01/05/15		01/04/16		5,000,000		5,000,000
	c	0.32%		01/07/15		01/07/16		7,000,000		7,000,000

Whistlejacket Capital, LLC	d,†	n/a		n/a		n/a		36,930		36,930

										20,036,930

Total Variable-Rate Obligations
(Cost $136,001,135)										136,001,135

14 See financial notes

Schwab Retirement Advantage Money Fund

Portfolio Holdings continued


						Maturity
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

Repurchase Agreements 23.0% of net assets

*Government Agency Repurchase Agreements 17.4%**
Bank of Nova Scotia
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $16,480,001, 2.00% - 5.39%, due 08/01/42 - 04/20/61)		0.10%			01/02/15		16,000,089		16,000,000

BNP Paribas Securities Corp
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $12,439,921, 0.48% - 4.00%, due 01/15/40 - 11/20/44)		0.06%			01/02/15		12,000,040		12,000,000

Goldman Sachs & Co
Issued 12/26/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $5,100,000, 2.34% - 10.50%, due 04/01/15 - 12/01/44)		0.07%			01/02/15		5,000,068		5,000,000
Issued 12/29/14, repurchase date 01/05/15 (Collateralized by U.S. Government Agency Securities valued at $16,320,000, 2.38% - 10.00%, due 09/01/16 - 12/01/44)		0.07%			01/05/15		16,000,218		16,000,000
Issued 12/31/14, repurchase date 01/07/15 (Collateralized by U.S. Government Agency Securities valued at $6,120,000, 2.00% - 10.00%, due 01/01/16 - 11/01/44)		0.08%			01/07/15		6,000,093		6,000,000

JP Morgan Securities, LLC
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $33,796,977, 0.63% - 3.50%, due 04/30/18 - 03/01/42)		0.10%			01/02/15		33,000,183		33,000,000

Merrill Lynch, Pierce, Fenner & Smith, Inc
Issued 12/29/14, repurchase date 01/05/15 (Collateralized by U.S. Government Agency Securities valued at $37,080,000, 2.34% - 5.31%, due 07/20/60 - 11/20/64)		0.05%			01/05/15		36,000,350		36,000,000

Mizuho Securities USA, Inc
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $5,150,000, 0.51% - 3.00%, due 07/15/40 - 12/20/40)		0.08%			01/02/15		5,000,022		5,000,000

									129,000,000

Treasury Repurchase Agreements 1.7%
Barclays Capital, Inc
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Treasury Securities valued at $2,327,815, 0.88%, due 04/30/17)		0.05%			01/02/15		2,282,169		2,282,163

JP Morgan Securities, LLC
Issued 12/12/14, repurchase date 01/15/15 (Collateralized by U.S. Treasury Securities valued at $10,200,577, 0.63% - 2.63%, due 04/30/18 - 05/15/22)		0.09%			01/07/15		10,000,650		10,000,000

									12,282,163

Other Repurchase Agreements 3.9%**
BNP Paribas Securities Corp
Issued 12/02/14, repurchase date 02/09/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $3,449,959, 0.38% - 5.75%, due 01/30/21 - 06/25/37)		0.26%			01/07/15		3,000,780		3,000,000

See financial notes 15

Schwab Retirement Advantage Money Fund

Portfolio Holdings continued


						Maturity
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)
Issued 11/19/14, repurchase date 02/17/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $3,450,000, 6.45% - 10.75%, due 10/15/17 - 08/01/20)		0.46%			01/07/15		3,001,878		3,000,000

Credit Suisse Securities (USA), LLC
Issued 10/21/14, repurchase date 02/03/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $3,452,199, 5.54%, due 09/15/39)	d	0.65%			02/03/15		3,005,688		3,000,000
Issued 10/27/14, repurchase date 02/09/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $2,302,735, 5.90%, due 09/15/39)	d	0.65%			02/09/15		2,003,792		2,000,000
Issued 10/28/14, repurchase date 02/10/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $2,302,735, 5.90%, due 09/15/39)	d	0.65%			02/10/15		2,003,792		2,000,000
Issued 11/04/14, repurchase date 02/17/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $2,304,853, 5.54% - 5.90%, due 09/15/39)	d	0.65%			02/17/15		2,003,792		2,000,000
Issued 11/13/14, repurchase date 02/25/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $1,153,990, 5.90%, due 09/15/39)	d	0.65%			02/25/15		1,001,878		1,000,000
Issued 12/18/14, repurchase date 04/02/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $1,153,990, 5.90%, due 09/15/39)	d	0.65%			04/02/15		1,001,896		1,000,000

JP Morgan Securities, LLC
Issued 12/04/14, repurchase date 06/02/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $1,150,526, 0.00% - 8.20%, due 05/26/16 - 06/25/58)	d	0.61%			03/31/15		1,001,983		1,000,000
Issued 12/17/14, repurchase date 06/15/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $3,450,819, 0.00% - 8.20%, due 05/15/18 - 06/25/58)	d	0.61%			03/31/15		3,005,287		3,000,000

Merrill Lynch, Pierce, Fenner & Smith, Inc
Issued 11/07/14, repurchase date 02/06/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $9,200,001, 2.40% - 5.87%, due 02/13/32 - 09/25/57)	d	0.55%			02/04/15		8,010,878		8,000,000

									29,000,000

Total Repurchase Agreements
(Cost $170,282,163)									170,282,163



End of Investments.

16 See financial notes

Schwab Retirement Advantage Money Fund

Portfolio Holdings continued

At 12/31/14, the tax basis cost of the fund’s investments was $739,181,542.


a		Credit-enhanced security or liquidity-enhanced.
b		Asset-backed security.
c		Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $94,943,331 or 12.8% of net assets.
d		Illiquid security. At the period end, the value of these amounted to $23,036,930 or 3.1% of net assets.
†		Whistlejacket notes are in receivership, and the fund elected to sell all of its Whistlejacket notes at auction (April 29, 2009). The remaining investment represents an interest in a small residual fund that is being held to cover any remaining expenses and liabilities associated with receivership.
*		Usually collateralized via U.S. Government Agency Securities or less frequently by U.S. Treasury Securities.
**		Usually collateralized via common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations or less frequently by U.S. Government Agency Securities and/ or U.S. Treasury Securities.


ABS —		Asset-backed securities
COP —		Certificate of participation
ETF —		Exchange Traded Fund
IDA —		Industrial development agency/authority
IDRB —		Industrial development revenue bond

At December 31, 2014, all of the fund’s investment securities were classified as Level 2. The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended December 31, 2014. The breakdown of the fund’s investments into major categories is disclosed on the Portfolio Holdings. (See financial note 2(a) for additional information)

See financial notes 17

Schwab Investor Money Fund

Portfolio Holdings as of December 31, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.


				Cost		Value
Holdings by Category				($)		($)

	60	.5%	Fixed-Rate Obligations		568,035,402		568,035,402
	15	.3%	Variable-Rate Obligations		144,240,652		144,240,652
	23	.4%	Repurchase Agreements		219,744,031		219,744,031


	99	.2%	Total Investments		932,020,085		932,020,085
	0	.8%	Other Assets and Liabilities, Net				7,466,018


	100	.0%	Net Assets				939,486,103


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

Fixed-Rate Obligations 60.5% of net assets

Asset Backed Commercial Paper 11.1%
CAFCO, LLC	a,b,c	0.25%			03/09/15		2,000,000		1,999,069

Cancara Asset Securitisation, LLC	a,b,c	0.21%			02/26/15		2,000,000		1,999,347
	a,b,c	0.27%			04/20/15		5,000,000		4,995,912

Chariot Funding, LLC	a,b,c	0.29%			07/01/15		8,000,000		7,988,336

Charta, LLC	a,b,c	0.25%			02/25/15		3,000,000		2,998,854
	a,b,c	0.25%			05/18/15		7,000,000		6,993,340
	a,b,c	0.25%			05/22/15		5,000,000		4,995,104

Collateralized Commercial Paper Co, LLC	a,b	0.28%			03/02/15		2,000,000		1,999,067
	a,b	0.39%			07/20/15		4,000,000		3,991,333

Collateralized Commercial Paper II Co, LLC	b,c	0.40%			06/10/15		1,000,000		998,222
	b,c	0.40%			06/15/15		3,000,000		2,994,500

CRC Funding, LLC	a,b,c	0.25%			06/08/15		2,000,000		1,997,806

Crown Point Capital Co, LLC	a,b,c	0.23%			01/13/15		5,000,000		4,999,617

Jupiter Securitization Corp	a,b,c	0.29%			06/17/15		9,000,000		8,987,892
	a,b,c	0.29%			07/01/15		4,000,000		3,994,168

Lexington Parker Capital Co, LLC	a,b,c	0.26%			02/02/15		2,000,000		1,999,538

Manhattan Asset Funding Capital Co, LLC	a,b,c	0.20%			01/22/15		3,000,000		2,999,650

Old Line Funding, LLC	a,b,c	0.22%			01/20/15		5,000,000		4,999,419
	a,b,c	0.22%			01/29/15		4,067,000		4,066,304
	a,b,c	0.22%			04/27/15		5,000,000		4,996,456

Ridgefield Funding Co, LLC	a,b,c	0.35%			06/02/15		5,000,000		4,992,611
	a,b,c	0.35%			06/18/15		1,000,000		998,367

22 See financial notes

Schwab Investor Money Fund

Portfolio Holdings continued


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

Sheffield Receivables Corp	a,b,c	0.25%			02/04/15		6,000,000		5,998,583
	a,b,c	0.26%			04/23/15		2,000,000		1,998,382

Thunder Bay Funding, LLC	a,b,c	0.23%			03/17/15		9,102,000		9,097,639

									104,079,516

Financial Company Commercial Paper 6.0%
Barclays US Funding Corp	a	0.35%			04/27/15		5,000,000		4,994,361

DNB Bank ASA		0.24%			04/08/15		2,000,000		1,998,707

General Electric Capital Corp		0.22%			02/12/15		7,000,000		6,998,203
		0.22%			04/14/15		9,000,000		8,994,335

JP Morgan Securities, LLC		0.33%			04/24/15		3,000,000		2,996,893

Macquarie Bank, Ltd		0.26%			03/13/15		6,000,000		5,996,923

Nationwide Building Society		0.21%			01/05/15		2,000,000		1,999,953

Natixis SA		0.10%			01/06/15		9,000,000		8,999,875

Skandinaviska Enskilda Banken AB		0.25%			01/21/15		2,000,000		1,999,722
		0.27%			03/17/15		2,000,000		1,998,896

State Street Corp		0.30%			06/17/15		2,000,000		1,997,217

Swedbank AB		0.25%			03/25/15		4,000,000		3,997,695

United Overseas Bank, Ltd		0.25%			03/03/15		2,000,000		1,999,153
		0.25%			03/04/15		1,000,000		999,569

									55,971,502

Other Commercial Paper 2.0%
Toyota Motor Credit Corp		0.22%			05/01/15		13,000,000		12,990,466
		0.23%			05/14/15		6,000,000		5,994,902

									18,985,368

Certificates of Deposit 30.9%
Abbey National Treasury Services PLC	a	0.25%			02/11/15		7,000,000		7,000,000

Bank of Montreal		0.20%			01/12/15		15,000,000		15,000,000
		0.22%			04/09/15		10,000,000		10,000,000

Bank of Tokyo Mitsubishi UFJ, Ltd		0.13%			01/02/15		3,000,000		3,000,000
		0.25%			03/03/15		7,000,000		7,000,000
		0.30%			03/03/15		5,000,000		5,000,000
		0.30%			04/06/15		3,000,000		3,000,000

Barclays Bank PLC		0.30%			02/04/15		7,000,000		7,000,000
		0.30%			02/05/15		4,000,000		4,000,000
		0.30%			02/06/15		1,000,000		1,000,000

BNP Paribas		0.26%			03/16/15		4,000,000		4,000,000
		0.30%			06/01/15		2,000,000		2,000,000

Canadian Imperial Bank of Commerce		0.25%			06/17/15		13,000,000		13,000,000

Chase Bank USA, NA		0.38%			01/02/15		4,000,000		4,000,000
		0.35%			01/26/15		1,000,000		1,000,000

See financial notes 23

Schwab Investor Money Fund

Portfolio Holdings continued


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

Citibank, NA		0.25%			01/09/15		9,000,000		9,000,000
		0.25%			03/26/15		8,000,000		8,000,000
		0.25%			04/01/15		2,000,000		2,000,000

Credit Agricole Corporate and Investment Bank		0.28%			04/01/15		1,000,000		1,000,000

Credit Suisse AG		0.33%			03/13/15		6,000,000		6,000,000
		0.33%			03/16/15		4,000,000		4,000,000
		0.33%			06/10/15		1,000,000		1,000,000
		0.33%			06/18/15		7,000,000		7,000,000

HSBC Bank USA		0.25%			06/03/15		2,000,000		1,999,957

ING Bank NV		0.29%			04/01/15		7,000,000		7,000,000
		0.30%			04/24/15		1,000,000		1,000,000
		0.30%			05/12/15		6,000,000		6,000,000

Lloyds Bank PLC		0.48%			03/18/15		4,000,000		4,000,000

Mitsubishi UFJ Trust & Banking Corp		0.25%			01/09/15		6,000,000		6,000,000
		0.26%			06/05/15		1,000,000		1,000,000
		0.28%			06/29/15		7,000,000		7,000,000
		0.30%			07/01/15		4,000,000		4,000,000

Mizuho Bank, Ltd		0.20%			02/09/15		3,000,000		3,000,000
		0.25%			02/13/15		7,000,000		7,000,000

Nordea Bank Finland PLC		0.24%			05/26/15		9,000,000		9,000,000

Oversea-Chinese Banking Corp, Ltd		0.23%			03/18/15		5,000,000		4,999,895

Skandinaviska Enskilda Banken AB		0.25%			04/10/15		10,000,000		10,000,000

State Street Bank & Trust Company, NA		0.22%			01/21/15		10,000,000		10,000,000

Sumitomo Mitsui Banking Corp		0.37%			02/06/15		6,000,000		6,000,000
		0.25%			02/20/15		4,000,000		4,000,000
		0.30%			03/02/15		1,000,000		1,000,000
		0.30%			03/03/15		4,000,000		4,000,000
		0.25%			03/06/15		5,000,000		5,000,000
		0.30%			03/12/15		1,000,000		1,000,000
		0.25%			03/24/15		2,000,000		2,000,000
		0.25%			04/10/15		2,000,000		2,000,000

Sumitomo Mitsui Trust Bank, Ltd		0.20%			01/14/15		12,000,000		12,000,000
		0.20%			01/27/15		3,000,000		3,000,000
		0.26%			03/30/15		3,000,000		3,000,000

Toronto-Dominion Bank		0.08%			01/06/15		7,000,000		7,000,000
		0.20%			01/12/15		3,000,000		3,000,000
		0.24%			01/22/15		10,000,000		10,000,000
		0.22%			01/23/15		6,000,000		6,000,000
		0.29%			06/16/15		5,000,000		5,000,000

UBS AG		0.23%			01/16/15		3,000,000		3,000,000
		0.25%			02/18/15		7,000,000		7,000,000

									289,999,852

Government Agency Debt 1.9%
Federal Home Loan Bank		0.09%			01/02/15		2,000,000		1,999,995
		0.09%			01/23/15		16,000,000		15,999,169

									17,999,164

24 See financial notes

Schwab Investor Money Fund

Portfolio Holdings continued


							Face
			Effective		Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity		Date		($)		($)

Other Instruments 6.1%
Australia & New Zealand Banking Group, Ltd		0.12%				01/02/15		8,000,000		8,000,000
		0.12%				01/05/15		2,000,000		2,000,000

Canadian Imperial Bank of Commerce		0.04%				01/02/15		7,000,000		7,000,000

Citibank, NA		0.11%				01/06/15		7,000,000		7,000,000

National Australia Bank, Ltd		0.05%				01/02/15		10,000,000		10,000,000

National Bank of Canada		0.09%				01/05/15		8,000,000		8,000,000

Svenska Handelsbanken AB		0.04%				01/02/15		15,000,000		15,000,000

										57,000,000

Other Notes 2.5%
Bank of America, NA		0.25%				01/09/15		1,000,000		1,000,000
		0.25%				02/02/15		6,000,000		6,000,000
		0.24%				05/01/15		10,000,000		10,000,000
		0.25%				06/15/15		7,000,000		7,000,000

										24,000,000

Total Fixed-Rate Obligations
(Cost $568,035,402)										568,035,402




Variable-Rate Obligations 15.3% of net assets

Financial Company Commercial Paper 3.2%
Commonwealth Bank of Australia		0.24%		01/08/15		07/02/15		10,000,000		10,000,000

Westpac Banking Corp	c	0.24%		01/12/15		06/12/15		10,000,000		10,000,000
	c	0.25%		01/27/15		07/27/15		10,000,000		10,000,000

										30,000,000

Certificates of Deposit 8.9%
Abbey National Treasury Services PLC	a	0.31%		01/05/15		02/04/15		3,000,000		3,000,000

Bank of Nova Scotia		0.24%		01/28/15		04/28/15		5,000,000		5,000,000

Commonwealth Bank of Australia		0.23%				01/23/15		2,000,000		2,000,000
		0.24%		01/20/15		06/19/15		4,000,000		4,000,000

JPMorgan Chase Bank, NA		0.31%		01/22/15		10/22/15		3,000,000		3,000,000

Rabobank Nederland		0.23%		01/20/15		04/20/15		10,000,000		10,000,000
		0.23%		01/07/15		05/07/15		4,000,000		4,000,000
		0.23%		01/02/15		06/02/15		6,000,000		6,000,000

Royal Bank of Canada		0.24%		01/05/15		03/04/15		8,000,000		8,000,000

Toronto-Dominion Bank		0.23%		01/16/15		06/16/15		6,000,000		6,000,000

Wells Fargo Bank, NA		0.23%				01/09/15		7,000,000		7,000,000
		0.22%		01/02/15		05/01/15		3,000,000		3,000,000
		0.25%		01/20/15		05/20/15		11,000,000		11,000,000
		0.25%		01/08/15		08/10/15		1,000,000		1,000,000
		0.27%		01/21/15		11/23/15		6,000,000		6,000,000
		0.27%		01/26/15		11/25/15		5,000,000		5,000,000

										84,000,000

See financial notes 25

Schwab Investor Money Fund

Portfolio Holdings continued

Face

Effective

Maturity

Amount

Value

Issuer

Footnotes

Rate

Maturity

Date

($)

Treasury Debt 2.3%

United States Treasury Department

0.09%

01/02/15

01/31/16

7,000,000

6,999,216

0.11%

01/02/15

07/31/16

5,000,000

0.09%

01/02/15

10/31/16

10,000,000

9,993,365

21,992,581

Variable Rate Demand Notes 0.6%

Blue Mountain Enterprises, LLC

Variable Rate Demand Bonds Series 2013

0.16%

01/07/15

1,980,000

Eagle Cnty

Housing Facilities RB (BC Housing) Series 1997B

0.21%

01/07/15

1,500,000

Labcon North America

Taxable Bonds Series 2010

0.18%

01/07/15

1,645,000

5,125,000

Other Notes 0.3%

Bank of America, NA

0.36%

01/05/15

03/05/15

3,000,000

Whistlejacket Capital, LLC

d,†

n/a

123,071

3,123,071

Total Variable-Rate Obligations

(Cost $144,240,652)

144,240,652

Maturity

Effective

Maturity

Amount

Value

Issuer

Footnotes

Rate

Maturity

Date

($)

Repurchase Agreements 23.4% of net assets

Government Agency Repurchase Agreements* 18.3%

Bank of Nova Scotia

Issued 12/31/14, repurchase date 01/02/15
(Collateralized by U.S. Government Agency Securities valued at
$20,600,001, 2.87% - 4.00%, due 05/01/41 - 12/01/44)

0.10%

01/02/15

20,000,111

20,000,000

BNP Paribas Securities Corp

Issued 12/31/14, repurchase date 01/02/15
(Collateralized by U.S. Government Agency Securities valued at
$16,800,000, 0.41% - 3.00%, due 10/15/34 - 01/25/44)

0.06%

01/02/15

16,000,053

16,000,000

Goldman Sachs & Co

Issued 12/29/14, repurchase date 01/05/15
(Collateralized by U.S. Government Agency Securities valued at
$14,280,000, 2.00% - 9.00%, due 04/01/16 - 12/01/44)

0.07%

01/05/15

14,000,191

14,000,000

JP Morgan Securities, LLC

Issued 12/31/14, repurchase date 01/02/15
(Collateralized by U.S. Government Agency Securities valued at
$75,860,072, 1.75% - 5.13%, due 05/15/16 - 07/01/42)

0.10%

01/02/15

74,000,411

74,000,000

Merrill Lynch, Pierce, Fenner & Smith, Inc

Issued 12/29/14, repurchase date 01/05/15
(Collateralized by U.S. Government Agency Securities valued at
$47,380,000, 0.46% - 4.50%, due 07/16/37 - 10/20/64)

0.05%

01/05/15

46,000,447

46,000,000

26 See financial notes

Schwab Investor Money Fund

Portfolio Holdings continued

Maturity

Effective

Maturity

Amount

Value

Issuer

Footnotes

Rate

Maturity

Date

($)

Mizuho Securities USA, Inc

Issued 12/31/14, repurchase date 01/02/15
(Collateralized by U.S. Government Agency Securities valued at
$2,060,001, 2.00%, due 07/15/40)

0.08%

01/02/15

2,000,009

2,000,000

172,000,000

Treasury Repurchase Agreements 1.4%

Barclays Capital, Inc

Issued 12/31/14, repurchase date 01/02/15
(Collateralized by U.S. Treasury Securities valued at
$758,972, 0.88%, due 04/30/17)

0.05%

01/02/15

744,033

744,031

JP Morgan Securities, LLC

Issued 12/12/14, repurchase date 01/15/15
(Collateralized by U.S. Treasury Securities valued at
$12,240,648, 0.63%, due 04/30/18)

0.09%

01/07/15

12,000,780

12,000,000

12,744,031

Other Repurchase Agreements** 3.7%

BNP Paribas Securities Corp

Issued 11/19/14, repurchase date 02/17/15
(Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at
$3,450,000, 6.45%, due 10/15/17)

0.46%

01/07/15

3,001,878

3,000,000

Credit Suisse Securities (USA), LLC

Issued 11/12/14, repurchase date 02/25/15
(Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at
$3,452,199, 5.54%, due 09/15/39)

0.65%

02/25/15

3,005,688

3,000,000

Issued 11/13/14, repurchase date 02/25/15
(Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at
$4,604,609, 5.54%, due 09/15/39)

0.65%

02/25/15

4,007,511

4,000,000

Issued 12/18/14, repurchase date 04/02/15
(Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at
$2,302,735, 5.90%, due 09/15/39)

0.65%

04/02/15

2,003,792

2,000,000

JP Morgan Securities, LLC

Issued 12/04/14, repurchase date 06/02/15
(Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at
$9,167,809, 0.00% - 8.20%, due 05/26/16 - 06/25/58)

0.61%

03/31/15

8,015,860

8,000,000

Issued 12/17/14, repurchase date 06/15/15
(Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at
$2,300,546, 0.00% - 8.20%, due 05/15/18 - 06/25/58)

0.61%

03/31/15

2,003,524

2,000,000

Merrill Lynch, Pierce, Fenner & Smith, Inc

Issued 11/07/14, repurchase date 02/06/15
(Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at
$14,950,001, 2.40% - 3.66%, due 06/11/27 - 02/13/32)

0.55%

02/04/15

13,017,676

13,000,000

35,000,000

Total Repurchase Agreements

(Cost $219,744,031)

219,744,031

End of Investments.

See financial notes 27

Schwab Investor Money Fund

Portfolio Holdings continued

At 12/31/14, the tax basis cost of the fund’s investments was $932,020,085.


a		Credit-enhanced or liquidity-enhanced.
b		Asset-backed security.
c		Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $118,089,116 or 12.6% of net assets.
d		Illiquid security. At the period end, the value of these amounted to $32,123,071 or 3.4% of net assets.
†		Whistlejacket notes are in receivership, and the fund elected to sell all of its Whistlejacket notes at auction (April 29, 2009). The remaining investment represents an interest in a small residual fund that is being held to cover any remaining expenses and liabilities associated with receivership.
*		Usually collateralized via U.S. Government Agency Securities or less frequently by U.S. Treasury Securities.
**		Usually collateralized via common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations or less frequently by U.S. Government Agency Securities and/ or U.S. Treasury Securities.


ABS —		Asset-backed securities
ETF —		Exchange Traded Fund
RB —		Revenue bond

28 See financial notes

Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund

Financial Notes

1. Business Structure of the Funds:

Each of the funds in this report is a series of The Charles Schwab Family of Funds (the “trust”), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:



The Charles Schwab Family of Funds (organized October 20, 1989)		Schwab Investor Money Fund
Schwab Money Market Fund		Schwab Municipal Money Fund
Schwab Government Money Fund		Schwab AMT Tax-Free Money Fund
Schwab U.S. Treasury Money Fund		Schwab California Municipal Money Fund
Schwab Treasury Obligations Money Fund		Schwab New York AMT Tax-Free Money Fund
Schwab Value Advantage Money Fund		Schwab New Jersey AMT Tax-Free Money Fund
Schwab Advisor Cash Reserves		Schwab Pennsylvania Municipal Money Fund
Schwab Cash Reserves		Schwab Massachusetts AMT Tax-Free Money Fund
Schwab Retirement Advantage Money Fund

Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund each offer one share class. Shares are bought and sold at closing net asset value per share (“NAV”), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds’ Board of Trustees (the “Board”) may authorize the issuance of as many shares as necessary.

Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.

2. Significant Accounting Policies:

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

(a) Security Valuation:

Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

Securities in the funds are valued at amortized cost (which approximates market value) as permitted in accordance with Rule 2a-7 of the 1940 Act. In the event that security valuations do not approximate market value, securities may be fair valued as determined in accordance with procedures adopted by the Board. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.

Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund

Financial Notes (continued)

2. Significant Accounting Policies (continued):

The three levels of the fair value hierarchy are as follows:


	•	Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities.

	•	Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. Securities held by money funds operating under Rule 2a-7 of the 1940 Act are valued at amortized cost which approximates current market value and are considered to be valued using Level 2 inputs.

	•	Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The levels associated with valuing the funds’ investments as of December 31, 2014 are disclosed in the Portfolio Holdings.

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

Repurchase Agreements: In a repurchase agreement, a fund buys a security from another party (the “counter-party”), usually a financial institution, with the agreement that it be sold back in the future. Repurchase agreements subject a fund to counter-party risk, meaning that the fund could lose money if the other party fails to perform under the terms of the agreement. The funds mitigate this risk by ensuring that the funds’ repurchase agreements are collateralized by cash, U.S. government securities, fixed income securities, equity securities or other types of securities. These risks are magnified to the extent that a repurchase agreement is secured by collateral other than cash and government securities, such as debt securities, equity securities and high yield securities that are rated below investment grade. All collateral is held by the funds’ custodian (or, with multi-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement. In the event of a default by the counter-party, realization of the collateral proceeds could be delayed or limited and the value of the collateral may decline. Investments in repurchase agreements are also based on a review of the credit quality of the repurchase agreement counter-party.

As of December 31, 2014, the following funds had investments in repurchase agreements with a gross value as disclosed in the Portfolio Holdings and the Statement of Assets and Liabilities:


Schwab Retirement Advantage Money Fund			$170,282,163
Schwab Investor Money Fund			219,744,031

The value of the related collateral disclosed in the Portfolio Holdings exceeded the value of the repurchase agreements at period end.

Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund

Financial Notes (continued)

2. Significant Accounting Policies (continued):

Delayed-Delivery Transactions: The funds may buy securities at a predetermined price or yield, with payment and delivery taking place after the customary settlement period for that type of security. The funds will assume the rights and risks of ownership at the time of purchase, including the risk of price and yield fluctuations. Typically, no interest will accrue to a fund until the security is delivered. The funds will earmark or segregate appropriate liquid assets to cover their delayed-delivery purchase obligations.

(c) Security Transactions:

Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.

(d) Investment Income:

Interest income is recorded as it accrues. If a fund buys a debt security at a discount (less than face value) or a premium (more than face value), it amortizes premiums and accretes discounts from the purchase settlement date up to maturity. The fund then increases (in the case of discounts) or reduces (in the case of premiums) the income it records from the security. If the security is callable (meaning that the issuer has the option to pay it off before its maturity date), then the fund amortizes the premium and accretes discounts to the security’s call date and price, rather than the maturity date and price.

(e) Expenses:

Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.

(f) Distributions to Shareholders:

The funds declare distributions from net investment income, if any, every day they are open for business. These distributions, which are substantially equal to the funds’ net investment income for that day, are paid out to shareholders once a month. The funds make distributions from net realized capital gains, if any, once a year.

(g) Custody Credit:

The funds have an arrangement with their custodian bank, State Street Bank and Trust Company (“State Street”), under which the funds may receive a credit for their uninvested cash balance to offset their custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to the funds’ operating expenses.

(h) Accounting Estimates:

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

(i) Federal Income Taxes:

The funds intend to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.

(j) Indemnification:

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

Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund

Financial Notes (continued)

3. Risk Factors:

Investment Risk. An investment in a fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of a shareholder’s investment at $1 per share, it is possible to lose money by investing in the funds.

Interest Rate Risk. Interest rates rise and fall over time. As with any investment whose yield reflects current interest rates, a fund’s yield will change over time. During periods when interest rates are low, a fund’s yield (and total return) also will be low. Because interest rates in the United States are at, or near, historically low levels, a change in a central bank’s monetary policy or improving economic conditions may result in an increase in interest rates. A sudden or unpredictable rise in interest rates may cause volatility in the market and may decrease liquidity in the money market securities markets, making it more difficult for a fund to sell its money market investments at a time when the investment adviser might wish to sell such investments. Decreased market liquidity also may make it more difficult to value some or all of a fund’s money market securities holdings. In addition, to the extent a fund makes any reimbursement payments to the investment adviser and/or its affiliates, the fund’s yield would be lower.

Repurchase Agreements Risk. When the fund enters into a repurchase agreement, the fund is exposed to the risk that the counter-party will not fulfill its contractual obligation. In a repurchase agreement, there exists the risk that, when the fund buys a security from a counter-party that agrees to repurchase the security at an agreed upon price (usually higher) and time, the counter-party will not repurchase the security. These risks are magnified to the extent that a repurchase agreement is secured by collateral other than cash and government securities, such as debt securities, equity securities and high yield securities that are rated below investment grade (“Alternative Collateral”). High yield securities that are used as Alternative Collateral are subject to greater levels of credit and liquidity risk, and are considered primarily speculative with respect to the issuer’s continuing ability to make principal and interest payments. Alternative Collateral may be subject to greater price volatility and may be more volatile or less liquid than other types of collateral, increasing the risk that the fund will be unable to recover fully in the event of a counter-party’s default.

Many of the U.S. government securities that the funds invest in are not backed by the full faith and credit of the United States government, which means they are neither issued nor guaranteed by the U.S. Treasury. Although maintained in conservatorship by the Federal Housing Finance Agency since September 2008, Fannie Mae (FNMA) and Freddie Mac (FHLMC) maintain only lines of credit with the U.S. Treasury. The Federal Home Loan Banks (FHLB) maintain limited access to credit lines from the U.S. Treasury. Other securities, such as obligations issued by the Federal Farm Credit Banks Funding Corporation (FFCB), are supported solely by the credit of the issuer. There can be no assurance that the U.S. government will provide financial support to securities of its agencies and instrumentalities if it is not obligated to do so under law. Also, any government guarantees on securities a fund owns do not extend to the shares of the fund itself.

Foreign Investment Risk. The funds’ investments in securities of foreign issuers or securities with credit or liquidity enhancements provided by foreign entities may involve certain risks that are greater than those associated with investments in securities of U.S. issuers or securities with credit or liquidity enhancements provided by U.S. entities. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. In addition, sovereign risk, or the risk that a government may become unwilling or unable to meet its loan obligations or guarantees, could increase the credit risk of financial institutions connected to that particular country.

Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund

Financial Notes (continued)

3. Risk Factors (continued):

adviser applies its own investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that they will produce the desired results. The investment adviser’s maturity decisions will also affect a fund’s yield, and in unusual circumstances potentially could affect its share price. To the extent that the investment adviser anticipates interest rate trends imprecisely, a fund’s yield at times could lag those of other money market funds.

Liquidity Risk. Liquidity risk exists when particular investments are difficult to purchase or sell. The market for certain investments may become illiquid due to specific adverse changes in the conditions of a particular issuer or under adverse market or economic conditions independent of the issuer, including, for example, during periods of rising interest rates. In addition, dealer inventories of certain securities — an indication of the ability of dealers to engage in “market making” — are at, or near, historic lows in relation to market size, which could potentially lead to decreased liquidity. A fund’s investments in illiquid securities may reduce the returns of the fund because it may be unable to sell the illiquid securities at an advantageous time or price. Further, transactions in illiquid securities may entail transaction costs that are higher than those for transactions in liquid securities.

Redemption Risk. A fund may experience periods of heavy redemptions that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value, particularly during periods of declining or illiquid markets. Redemptions by a few large investors in a fund may have a significant adverse effect on the fund’s ability to maintain a stable $1.00 share price. In the event any money market fund fails to maintain a stable net asset value, other money market funds, including the funds, could face a market-wide risk of increased redemption pressures, potentially jeopardizing the stability of their $1.00 share prices.

Money Market Risk. The funds are not designed to offer capital appreciation. In exchange for their emphasis on stability and liquidity, money market investments may offer lower long-term performance than stock or bond investments.

Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.

4. Affiliates and Affiliated Transactions:

Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”), a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement (“Advisory Agreement”) between CSIM and the trust.

For its advisory and administrative services to the funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:


Average Daily Net Assets

First $1 billion			0.35%
More than $1 billion but not exceeding $10 billion			0.32%
More than $10 billion but not exceeding $20 billion			0.30%
More than $20 billion but not exceeding $40 billion			0.27%
Over $40 billion			0.25%

The Board has adopted a Shareholder Servicing and Sweep Administration Plan (the “Plan”) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by service providers, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, “Schwab”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. Schwab serves as the funds’ paying agent under the Plan for making payments of the shareholder service fee due to the service providers (other than Schwab). All shareholder service fees paid by the funds to Schwab in its capacity as the funds’ paying agent will be passed through to the service providers, and Schwab will not retain any portion of such fees.

Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund

Financial Notes (continued)

4. Affiliates and Affiliated Transactions (continued):

of Schwab’s or the service provider’s actual cost of providing the services. If the cost of providing the services under the Plan is less than the payments received, the unexpended portion of the fees may be retained as profit by Schwab or the service provider.


	Shareholder Service Fees

Schwab Retirement Advantage Money Fund		0.22%
Schwab Investor Money Fund		0.25%

Contractual Expense Limitations

CSIM and its affiliates have made an additional agreement with the Schwab Retirement Advantage Money Fund, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes, and certain non-routine expenses (“expense limitation”) to 0.49% through April 29, 2016.

In addition, effective January 1, 2014 through December 31, 2014, CSIM and its affiliates agreed to waive an additional amount of the Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund expenses equal to 0.035% of the funds’ average daily net assets.

During the period ended December 31, 2014, the funds waived the following amounts, of which a portion was waived in accordance with the contractual expense limitation agreements:


	Total		Contractual Expense
	Waived Amount		Limitation Waived Amount

Schwab Retirement Advantange Money Fund		$2,995,073		$1,156,648
Schwab Investor Money Fund		4,351,036		376,596

The remainder of the total waived amounts not related to the contractual expense limitations are discussed below.

Voluntary Yield Waiver/Reimbursement

In addition to the contractual expense limitation agreements noted above, CSIM and its affiliates also may waive and/or reimburse expenses to the extent necessary to maintain a positive net yield for each fund. CSIM and its affiliates may recapture from a fund any of these expenses or fees they have waived and/or reimbursed until the third anniversary of the end of the fiscal year in which such waiver and/or reimbursement occurs, subject to certain limitations. The reimbursement payments by a fund to CSIM and its affiliates are considered “non-routine expenses” and are not subject to any net operating expense limitations in effect at the time of such payment. This recapture could negatively affect the funds’ future yield. There were no prior year amounts recaptured. As of December 31, 2014, the balance of recoupable waivers is as follows:


	Expiration Date
	December 31, 2015		December 31, 2016		December 31, 2017		Total

Schwab Retirement Advantage Money Fund		$1,484,338		$1,643,686		$1,838,425		$4,966,449
Schwab Investor Money Fund		3,983,641		4,017,546		3,974,440		11,975,627

As of December 31, 2014, recoupable waivers expired as follows:


Schwab Retirement Advantage Money Fund			$1,817,734
Schwab Investor Money Fund			4,664,552

Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate to be charged on a loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.

5. Board of Trustees:

Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund

Financial Notes (continued)

5. Board of Trustees (continued):

non-interested persons (independent trustees), as noted on a fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.

6. Borrowing from Banks:

The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street, an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.

There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred an interest expense, which is disclosed on a fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.

7. Federal Income Taxes:

As of December 31, 2014, the components of distributable earnings on a tax-basis were as follows:


	Schwab		Schwab
	Retirement Advantage		Investor
	Money Fund		Money Fund

Undistributed ordinary income		$18,401		$—

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of December 31, 2014, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:


	Schwab		Schwab
	Retirement Advantage		Investor
Expiration Date	Money Fund		Money Fund

December 31, 2017		$—		$79,773

For tax purposes, realized net capital losses and late-year ordinary losses incurred after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended December 31, 2014, the funds had no capital losses deferred and had capital loss carryforwards utilized as follows:


	Schwab		Schwab
	Retirement Advantage		Investor
	Money Fund		Money Fund

Capital losses utilized		$—		$2,236

The tax-basis components of distributions paid during the current and prior fiscal years were as follows:


	Schwab		Schwab
	Retirement Advantage		Investor
	Money Fund		Money Fund

Current period distributions
Ordinary income		$74,554		$101,677

Prior period distributions
Ordinary income		$77,909		$113,241

Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as short-term capital gains. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund

Financial Notes (continued)

7. Federal Income Taxes (continued):

Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations. As of December 31, 2014, the funds made the following reclassifications:


	Schwab			Schwab
	Retirement Advantage			Investor
	Money Fund			Money Fund

Capital shares		($637	)		$—
Undistributed net investment income		887			—
Net realized capital gains and losses		(250	)		—

As of December 31, 2014, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended December 31, 2014, the funds did not incur any interest or penalties.

8. Recent Regulatory Development:

On July 23, 2014 the SEC passed new amendments to the rules governing money market funds. The new amendments have mandatory compliance dates, which are staggered over the next two years. Management is currently evaluating the impact of the new amendments and their impact to the funds’ future financial statements and related disclosures.

9. Subsequent Events:

Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of:

Schwab Retirement Advantage Money Fund

Schwab Investor Money Fund

In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Retirement Advantage Money Fund and Schwab Investor Money Fund (two of the funds constituting The Charles Schwab Family of Funds, hereafter referred to as the “Funds”) at December 31, 2014, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

February 16, 2015

Trustees and Officers

The tables below give information about the trustees and officers of The Charles Schwab Family of Funds, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 95 funds.

The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-800-435-4000.

Independent Trustees


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served¹)	During the Past Five Years	the Trustee	Other Directorships

Mariann Byerwalter 1960 Trustee (Trustee of The Charles Schwab Family of Funds since 2000.)	Chairman of JDN Corporate Advisory LLC (advisory services firm) (Oct. 2001 – present).	74	Director, WageWorks, Inc. (2010 – present) Director, Redwood Trust, Inc. (1998 – present)


John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds since 2008.)	Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present).	74	Director, Gilead Sciences, Inc. (2005 – present)


David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds since 2011.)	Private Investor.	74	Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present)


Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds since 2011.)	Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – Sept. 2013).	74	Director, KLA-Tencor Corporation (2008 – present)


Charles A. Ruffel 1956 Trustee (Trustee of The Charles Schwab Family of Funds since 2015.)	Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014).	95	None.


Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds since 2000.)	Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present).	74	Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012)

Independent Trustees (continued)


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served¹)	During the Past Five Years	the Trustee	Other Directorships

Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds since 2008.)	Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present).	74	Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present)

Interested Trustees


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served)	During the Past Five Years	the Trustee	Other Directorships

Charles R. Schwab²1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989.)	Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present).	74	Chairman and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present)


Walter W. Bettinger II²1960 Trustee (Trustee of The Charles Schwab Family of Funds since 2008.)	Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director Schwab Holdings, Inc. (2008 – present).	95	Director, The Charles Schwab Corporation (2008 – present)

Officers of the Trust


Name, Year of Birth, and Position(s)
with the trust; (Terms of office, and
length of Time Served³)		Principal Occupations During the Past Five Years

Marie Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds since 2010.)		Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010).


George Pereira 1964 Treasurer and Principal Financial Officer (Officer of The Charles Schwab Family of Funds since 2004.)		Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present).

Officers of the Trust (continued)


Name, Year of Birth, and Position(s)
with the trust; (Terms of office, and
length of Time Served³)		Principal Occupations During the Past Five Years

Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds since 2011.)		Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009).


Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds since 2011.)		Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008).


David Lekich 1964 Chief Legal Officer and Secretary (Officer of The Charles Schwab Family of Funds since 2011.)		Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs.


Catherine MacGregor 1964 Vice President and Assistant Secretary (Officer of The Charles Schwab Family of Funds since 2005.)		Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present).


¹		Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first.
²		Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser.
³		The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board.

Glossary

144A securities These securities may be sold only to qualified institutional buyers under Securities Act Rule 144A.

agency discount notes Notes issued by federal agencies—known as Government Sponsored Enterprises, or GSEs—at a discount to their value at maturity. An agency discount note is a short-term investment alternative offering a high degree of credit quality.

asset-backed commercial paper A short-term investment that is typically issued by a bank or other financial institution. The notes represent an interest in financial assets such as trade receivables, credit card receivables, auto receivables, etc. and are generally used for the short-term financing needs of companies.

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

collateralized mortgage obligation (CMO) A type of security that is collateralized by pools of mortgages backed by government agencies or private issuers (non-agency). The streams of principal and interest payments on the mortgages are distributed to the different classes of CMO interests, known as tranches. Each tranche may have different principal balances, coupon rates, prepayment risks, and maturity dates.

commercial paper Promissory notes issued by banks, corporations and other entities to finance short-term credit needs. These securities generally are structured on a discounted basis but sometimes may be interest-bearing notes. Commercial paper, which may be unsecured, is subject to credit risk.

corporate note An unsecured debt security issued by a corporation that is subject to the credit risk of the issuer.

credit-enhanced securities Securities that are backed by the credit of an entity other than the issuer (such as a financial institution). Credit enhancements, which can equal up to 100% of the security’s value, are designed to help lower the risk of default on a security and may also make the security more liquid.

credit quality The capacity of an issuer to make its interest and principal payments. Federal regulations strictly regulate the credit quality of the securities a money market fund can buy.

credit ratings Debt issuers, including corporations, states and municipalities, may arrange with a recognized independent rating organization, such as Standard & Poor’s, Fitch, Inc., Moody’s Investor Service, and DBRS, to rate their creditworthiness and/or the creditworthiness of their debt issues. For example, an issuer may obtain a long-term rating within the investment grade rating category, which is, from high to low, AAA, AA, A and BBB for Standard & Poor’s, Fitch, and DBRS; and Aaa, Aa, A and Baa for Moody’s.

credit risk The risk that a debt issuer may be unable to pay interest or repay principal to its debt holders.

dollar-weighted average maturity See weighted average maturity.

effective yield A measurement of a fund’s yield that assumes that all interest income is reinvested in additional shares of the fund.

exchange-traded fund (ETF) An investment fund that tracks an index, a commodity or a basket of assets, and trades on an exchange.

expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets for the year.

face value The value of a bond, note, mortgage or other security as given on the certificate or instrument. Face value is also referred to as par value or nominal value.

illiquid securities Securities are generally considered illiquid if they cannot be disposed of promptly (typically within seven days) and in the ordinary course of business at approximately the amount at which a fund has valued the instruments.

interest Payments to holders of debt securities as compensation for loaning a security’s principal to the issuer.

liquidity-enhanced security The security’s structure includes a liquidity arrangement that requires an entity other than the issuer (such as a large financial institution) to provide funds to pay a tender under most circumstances. Liquidity enhancements are often used on variable-rate securities where the portfolio manager has an option to tender the securities for repayment within a specified time period (usually one day or one week) at any time prior to their final maturity.

maturity The date a debt security is scheduled to be “retired” and its principal amount repaid. The Maturity of an investment will generally reflect the security’s final maturity date unless the security’s structure includes a maturity-shortening provision such as an interest rate reset, demand feature or put feature (the “Effective Maturity Date”). For those securities with a maturity-shortening provision, including variable-rate demand securities, the Maturity is determined by using the Effective Maturity Date, as permitted by Rule 2a-7.

municipal securities Debt securities issued by a state, its counties, municipalities, authorities and other subdivisions, or the territories and possessions of the United States and the District of Columbia, including their subdivisions, agencies and instrumentalities and corporations. These securities may be issued to obtain money for various public purposes, including the construction of a wide range of public facilities such as airports, bridges, highways, housing, hospitals, mass transportation, public utilities, schools, streets, and water and sewer works.

net asset value per share (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding. Money funds seek to maintain a steady NAV of $1.00.

outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.

repurchase agreement (also known as a “repo”) The sale of a security combined with a simultaneous agreement to repurchase it at a predetermined date and price.

restricted securities Securities that are subject to contractual restrictions on resale. These securities are often purchased in private placement transactions.

Tier 1, Tier 2 Tier 1 is the highest category of credit quality, Tier 2 the second highest. A security’s tier can be established either by an independent rating organization or by a determination of the investment adviser. Money market fund shares and U.S. government securities are automatically considered Tier 1 securities.

total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.

variable rate demand obligations (VRDOs) Securities that have long maturities but which, because of their structure, require them to repay principal plus accrued interest within a specified timeframe (usually one or seven days) upon the demand of the bond holder. Depending on their structure, the repayment may be made by the bond issuer or by a financial institution, such as a highly rated bank.

weighted average life (WAL) For money market mutual funds as per rule 2a-7, the weighted average life calculation takes into account either the final maturity date for each security held in the portfolio or, when relevant, the date of the next demand feature (when the fund is scheduled to receive payment of principal and interest after a demand). Money funds are required to maintain a weighted average life of no more than 120 days. Weighted average life for all Schwab money market funds is available in each fund’s monthly schedule of portfolio holdings at www.csimfunds.com/schwabfunds_prospectus and also available in each fund’s Form N-MFP on the SEC’s website at www.sec.gov 60 days after the end of the month to which the information pertains.

weighted average maturity (WAM) For money market mutual funds as per rule 2a-7, the maturity date or Effective Maturity Date (see definition of maturity) of all the debt securities in its portfolio, or the date the interest rate on those securities is reset, or the date those securities can be redeemed through demand, calculated as a weighted average. As a rule, the longer a fund’s weighted average maturity, the greater its interest rate risk. Money funds are required to maintain a weighted average maturity of no more than 60 days.

yield The income paid out by an investment, expressed as a percentage of the investments market value.

PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT

A Commitment to Your Privacy

Your Privacy Is Not for Sale

We do not and will not sell your personal information to anyone, for any reason.

We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.

How We Collect Information About You

We collect personal information about you in a number of ways.


•	APPLICATION AND REGISTRATION INFORMATION.

We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.


•	TRANSACTION AND EXPERIENCE INFORMATION.

Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.


•	WEBSITE USAGE.

When you visit our websites, we may use devices known as “cookies,” graphic interchange format files (GIFs), or other similar web tools to enhance your web experience. These tools help us to recognize you, maintain your web session, and provide a more personalized experience. To learn more, please go to www.schwab.com/privacy.

How We Share and Use Your Information

We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:


•	to help us process transactions for your account;

•	when we use other companies to provide services for us, such as printing and mailing your account statements;

•	when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control).

State Laws

We will comply with state laws that apply to the disclosure or use of information about you.

Safeguarding Your Information — Security Is a Partnership

We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.

Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested.

We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.

We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.

Contact Us

To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.

Schwab Funds^® direct investors: 1-800-407-0256

Schwab Funds^® offers you an extensive family of mutual funds, each one based on a clearly defined investment approach and using disciplined management strategies. The list at right shows all currently available Schwab Funds.

Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.

Proxy Voting Policies, Procedures and Results

A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab Fund’s website at www.csimfunds.com/schwabfunds_prospectus, the SEC’s website at http://www.sec.gov, or by contacting Schwab Funds at 1-800-435-4000.

Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.csimfunds.com/schwabfunds_prospectus or the SEC’s website at http://www.sec.gov.

The Schwab Funds Family^®

Stock Funds

Schwab Core Equity Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedged Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

Schwab^® International Core Equity Fund

Schwab Fundamental US Large Company Index Fund

Schwab Fundamental US Small Company Index Fund

Schwab Fundamental International Large Company Index Fund

Schwab Fundamental International Small Company Index Fund

Schwab Fundamental Emerging Markets Large Company Index Fund

Schwab Fundamental Global Real Estate Index Fund

Schwab Global Real Estate Fund^tm

Schwab^® S&P 500 Index Fund

Schwab 1000 Index^® Fund

Schwab Small-Cap Index Fund^®

Schwab Total Stock Market Index Fund^®

Schwab International Index Fund^®

Asset Allocation Funds

Schwab Balanced Fund^tm

Schwab MarketTrack All Equity Portfolio^tm

Schwab MarketTrack Growth Portfolio^tm

Schwab MarketTrack Balanced Portfolio^tm

Schwab MarketTrack Conservative Portfolio^tm

Schwab Target 2010 Fund

Schwab Target 2015 Fund

Schwab Target 2020 Fund

Schwab Target 2025 Fund

Schwab Target 2030 Fund

Schwab Target 2035 Fund

Schwab Target 2040 Fund

Schwab Target 2045 Fund

Schwab Target 2050 Fund

Schwab Target 2055 Fund

Schwab^® Monthly Income Fund – Moderate Payout

Schwab^® Monthly Income Fund – Enhanced Payout

Schwab^® Monthly Income Fund – Maximum Payout

Bond Funds

Schwab Short-Term Bond Market Fund^tm

Schwab Intermediate-Term Bond Fund^tm

Schwab Total Bond Market Fund^tm

Schwab GNMA Fund^tm

Schwab^® Treasury Inflation Protected Securities Index Fund

Schwab Tax-Free Bond Fund^tm

Schwab California Tax-Free Bond Fund^tm

Schwab Money Funds

Schwab offers an array of money market funds.¹ Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments^®.


¹		Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money.

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the fund covered in this report.

Dear Shareholder,

I’d like to thank you for trusting us to help you meet your investment goals, and for reading this annual report regarding Schwab Advisor Cash Reserves. This fund is designed to offer stability of capital, liquidity, and income, and is meant to help serve as part of the foundation of an investor’s portfolio.

For more information about these developments, please visit the “Insights” section of www.csimfunds.com, where you’ll find links under the heading, “Money Fund Reform FAQ.” In addition, we are excited to announce the launch of Schwab Government Money Fund Purchased Shares, which you can learn about by visiting our website or by contacting us at 1-800-435-4000. For information about Schwab Advisor Cash Reserves, please continue reading this report.

Sincerely,

2 Schwab Advisor Cash Reserves

Schwab Advisor Cash Reserves^®

Schwab Advisor Cash Reserves (the fund) seeks the highest current income consistent with stability of capital and liquidity. To pursue its goal, the fund invests in high-quality, short-term money market instruments issued by U.S. and foreign issuers. Examples of these securities include commercial paper, certificates of deposit, repurchase agreements, variable-rate debt securities, and obligations issued by the U.S. government or its agencies and instrumentalities. For more information concerning the fund’s investment objective, strategy, and risks, please see the fund’s prospectus.

Performance, Positioning, and Strategies. Throughout the reporting period, the fund’s investment adviser remained focused on ensuring liquidity and stability of capital as market conditions evolved. As rates and rate expectations remained low, the weighted average maturity of the fund in general remained extended. With the euro zone generally stable, and support from the European Central Bank for the region’s banking system continuing, the fund continued to selectively invest in securities from European countries such as France, the Netherlands, Switzerland, Sweden, and the United Kingdom. The fund’s investment adviser continues to monitor exposure to Europe broadly, as growth remains weak, inflation remains low, and political risks are heightened. As noted above, the fund continued to waive certain fees and expenses in order to maintain a 0.01% yield. Additionally, money market reform final guidance was released in July 2014 and continues to be closely monitored by the investment adviser.

As of 12/31/14:

Portfolio Composition By Maturity²


	% of investments

1-7 Days		37.7%
8-30 Days		18.0%
31-60 Days		11.4%
61-90 Days		14.2%
91-180 Days		18.6%
More than 180 Days		0.1%
Total		100.0%

Statistics


Weighted Average Maturity³		44 Days
Credit Quality Of Holdings⁴% of portfolio		99.99% Tier 1

Portfolio Composition by Security Type


	% of investments

Commercial Paper
Asset Backed		8.3%
Financial Company		7.6%
Other		1.5%
Certificate Of Deposit		41.3%
Government Agency Debt		0.3%
Treasury Debt		1.1%
Other Instrument		6.2%
Variable Rate Demand Note		0.1%
Other Note		7.9%
Repurchase Agreement
Government Agency		2.6%
Treasury		19.2%
Other		3.9%
Total		100.0%

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


¹		The investment adviser and its affiliates may recapture expenses or fees they waived under a voluntary yield waiver until the third anniversary of the end of the fiscal year in which such waiver occurs, subject to certain limitations. For more information on the potential impact of such recapture on future yields, see financial note 4.
²		As shown in the Portfolio Holdings section of the shareholder report.
³		Money funds must maintain a dollar-weighted average maturity of no longer than 60 days and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months).
⁴		Tier 1 securities are rated in the highest short-term rating category by two nationally recognized statistical rating organizations (“NRSROs”), or by one if only one NRSRO has rated the securities, or, if unrated, determined to be of comparable quality by CSIM pursuant to guidelines adopted by the Board of Trustees. Money market fund shares and U.S. government securities are also Tier 1 securities. The fund uses NRSRO credit ratings from Standard & Poor’s Corp., Moody’s Investors Service, Fitch Ratings, and/or DBRS. The fund may use different ratings provided by other rating agencies for purposes of determining compliance with the fund’s investment policies. The fund itself has not been rated by an independent credit rating agency.

4 Schwab Advisor Cash Reserves^®

Performance and Fund Facts as of 12/31/14

Seven-Day Average Yield Trend for previous 12 months*

Seven-Day Yields


	Schwab Advisor Cash Reserves^®
	Sweep	Premier Sweep
	Shares	Shares

Ticker Symbol	SWQXX	SWZXX
Minimum Initial Investment	**	**


Seven-Day Yield¹	0.01%	0.01%


Seven-Day Yield–Without Contractual Expense Limitation²	-0.09%	-0.16%


Seven-Day Effective Yield¹	0.01%	0.01%

Portfolio holdings may have changed since the report date.


*		The seven-day average yield for the Sweep Shares and Premier Sweep Shares was 0.01% throughout the entire period.
**		Subject to the eligibility terms and conditions of your Schwab account agreement.
¹		Yield reflects the effect of the fund’s agreement with the investment adviser and its affiliates to limit each share class’ total annual operating expenses to certain levels (contractual expense limitation). In addition, the investment adviser and its affiliates have voluntarily waived expenses in excess of the contractual expense limitation to maintain a positive net yield for each share class of the fund (voluntary yield waiver). Without the contractual expense limitation and the voluntary yield waiver, the fund’s yield would have been lower. For additional details, see financial note 4.
²		Yield does not reflect the effect of the contractual expense limitation, but does reflect the effect of the voluntary yield waiver. The voluntary yield waiver added 0.41% and 0.34% to the seven-day yields of the Sweep Shares and Premier Sweep Shares, respectively.

Schwab Advisor Cash Reserves^® 5

Fund Expenses (Unaudited)

Examples for a $1,000 Investment

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

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

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


					Ending
			Beginning		Account Value		Expenses Paid
	Expense Ratio¹		Account Value		(Net of Expenses)		During Period²
	(Annualized)		at 7/1/14		at 12/31/14		7/1/14–12/31/14

Schwab Advisor Cash Reserves^®
Sweep Shares
Actual Return		0.21%	$	1,000.00	$	1,000.10	$	1.06
Hypothetical 5% Return		0.21%	$	1,000.00	$	1,024.14	$	1.07
Premier Sweep Shares
Actual Return		0.21%	$	1,000.00	$	1,000.10	$	1.06
Hypothetical 5% Return		0.21%	$	1,000.00	$	1,024.14	$	1.07


¹		Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period.
²		Expenses for each share class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by 365 days of the fiscal year.

6 Schwab Advisor Cash Reserves

Schwab Advisor Cash Reserves^®

Financial Statements

Financial Highlights


	1/1/14–			1/1/13–			1/1/12–			1/1/11–			1/1/10–
Sweep Shares	12/31/14			12/31/13			12/31/12			12/31/11			12/31/10


Per-Share Data ($)

Net asset value at beginning of period		1.00			1.00			1.00			1.00			1.00

Income (loss) from investment operations:
Net investment income (loss)		0.00	¹		0.00	¹		0.00	¹		0.00	¹		0.00	¹
Net realized and unrealized gains (losses)		0.00	¹		0.00	¹		0.00	¹		(0.00	)¹		0.00	^1,2

Total from investment operations		0.00	¹		0.00	¹		0.00	¹		0.00	¹		0.00	¹
Less distributions:
Distributions from net investment income		(0.00	)¹		(0.00	)¹		(0.00	)¹		(0.00	)¹		(0.00	)¹

Net asset value at end of period		1.00			1.00			1.00			1.00			1.00

Total return (%)		0.01			0.01			0.01			0.01			0.01

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.21	³		0.25	³		0.28	^3,4		0.26	³		0.34	³
Gross operating expenses		0.72			0.72			0.72	⁴		0.73			0.73
Net investment income (loss)		0.01			0.01			0.01			0.01			0.01
Net assets, end of period ($ x 1,000,000)		6,027			6,134			6,207			6,035			5,617


	1/1/14–			1/1/13–			1/1/12–			1/1/11–			1/1/10–
Premier Sweep Shares	12/31/14			12/31/13			12/31/12			12/31/11			12/31/10


Per-Share Data ($)

Net asset value at beginning of period		1.00			1.00			1.00			1.00			1.00

Income from investment operations:
Net investment income (loss)		0.00	¹		0.00	¹		0.00	¹		0.00	¹		0.00	¹
Net realized and unrealized gains (losses)		0.00	¹		0.00	¹		0.00	¹		(0.00	)¹		0.00	^1,2

Total from investment operations		0.00	¹		0.00	¹		0.00	¹		0.00	¹		0.00	¹
Less distributions:
Distributions from net investment income		(0.00	)¹		(0.00	)¹		(0.00	)¹		(0.00	)¹		(0.00	)¹

Net asset value at end of period		1.00			1.00			1.00			1.00			1.00

Total Return (%)		0.01			0.01			0.01			0.01			0.01

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.21	³		0.25	³		0.28	^3,4		0.26	³		0.34	³
Gross operating expenses		0.72			0.72			0.72	⁴		0.73			0.73
Net investment income (loss)		0.01			0.01			0.01			0.01			0.01
Net assets, end of period ($ x 1,000,000)		17,952			17,525			17,575			14,727			15,342

¹ Per-share amount was less than $0.01.

² Net realized and unrealized gains (losses) ratio includes payment from affiliate.

³ Reflects the effect of a voluntary yield waiver in excess of the contractual expense limitation. (See financial note 4)

⁴ The ratio of gross operating expenses would have been 0.73%, if the State filing fee reimbursement had not been included. There was no impact on the ratio of net operating expenses.

See financial notes 7

Schwab Advisor Cash Reserves

Portfolio Holdings as of December 31, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.

Cost

Value

Holdings by Category

($)

.1%

Fixed-Rate Obligations

13,446,438,924

.2%

Variable-Rate Obligations

4,366,637,992

.7%

Repurchase Agreements

6,159,304,796

100

.0%

Total Investments

23,972,381,712

.0%

Other Assets and Liabilities, Net

6,360,911

100

.0%

Net Assets

23,978,742,623


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

Fixed-Rate Obligations 56.1% of net assets

Asset Backed Commercial Paper 8.3%
Bennington Stark Capital Co, LLC	a,b,c	0.28%			03/02/15		35,000,000		34,983,667

CAFCO, LLC	a,b,c	0.25%			01/02/15		28,000,000		27,999,806
	a,b,c	0.25%			02/19/15		44,000,000		43,985,028
	a,b,c	0.25%			03/03/15		14,000,000		13,994,070
	a,b,c	0.25%			03/09/15		44,000,000		43,979,528

Cancara Asset Securitisation, LLC	a,b,c	0.25%			01/20/15		15,000,000		14,998,021
	a,b,c	0.25%			01/30/15		1,000,000		999,799
	a,b,c	0.25%			02/23/15		18,000,000		17,993,375
	a,b,c	0.26%			03/02/15		6,000,000		5,997,400
	a,b,c	0.27%			04/17/15		29,000,000		28,976,945

Cedar Springs Capital Co	a,b,c	0.30%			03/06/15		16,000,000		15,991,467

Charta, LLC	a,b,c	0.25%			02/17/15		57,000,000		56,981,396
	a,b,c	0.25%			02/18/15		20,000,000		19,993,333
	a,b,c	0.25%			02/25/15		50,000,000		49,980,903
	a,b,c	0.25%			03/25/15		20,000,000		19,988,472

Ciesco, LLC	a,b,c	0.25%			02/10/15		54,800,000		54,784,778
	a,b,c	0.25%			02/18/15		15,000,000		14,995,000
	a,b,c	0.25%			05/04/15		7,000,000		6,994,021

Collateralized Commercial Paper Co, LLC	a,b	0.28%			03/02/15		190,000,000		189,911,333
	a,b	0.30%			06/02/15		12,000,000		11,984,800

Collateralized Commercial Paper II Co, LLC	b,c	0.40%			06/10/15		8,000,000		7,985,778
	b,c	0.33%			07/06/15		19,000,000		18,967,605

CRC Funding, LLC	a,b,c	0.25%			02/04/15		127,000,000		126,970,014
	a,b,c	0.25%			02/12/15		57,000,000		56,983,375
	a,b,c	0.25%			02/18/15		20,000,000		19,993,333
	a,b,c	0.25%			02/19/15		35,000,000		34,988,090

8 See financial notes

Schwab Advisor Cash Reserves

Portfolio Holdings continued


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)
	a,b,c	0.25%			03/25/15		25,000,000		24,985,590
	a,b,c	0.25%			05/04/15		56,000,000		55,952,167
	a,b,c	0.25%			06/08/15		23,000,000		22,974,764

Crown Point Capital Co, LLC	a,b,c	0.23%			01/06/15		39,000,000		38,998,754
	a,b,c	0.23%			01/13/15		29,000,000		28,997,777
	a,b,c	0.26%			02/02/15		14,000,000		13,996,764
	a,b,c	0.23%			02/17/15		76,000,000		75,977,179

Govco, LLC	a,b,c	0.19%			01/21/15		43,000,000		42,995,461

Jupiter Securitization Corp	a,b,c	0.29%			06/17/15		29,000,000		28,960,987

Lexington Parker Capital Co, LLC	a,b,c	0.26%			02/02/15		1,000,000		999,769

Old Line Funding, LLC	a,b,c	0.22%			01/29/15		15,000,000		14,997,433
	a,b,c	0.22%			02/02/15		50,000,000		49,990,222
	a,b,c	0.22%			04/17/15		15,000,000		14,990,283
	a,b,c	0.22%			04/27/15		14,109,000		14,098,998
	a,b,c	0.25%			06/02/15		50,000,000		49,947,222
	a,b,c	0.25%			06/04/15		56,000,000		55,940,111

Ridgefield Funding Co, LLC	a,b,c	0.26%			02/17/15		100,000,000		99,966,056
	a,b,c	0.26%			03/02/15		32,000,000		31,986,133
	a,b,c	0.31%			04/08/15		6,000,000		5,994,988
	a,b,c	0.35%			06/02/15		16,000,000		15,976,356
	a,b,c	0.35%			06/18/15		25,000,000		24,959,167

Sheffield Receivables Corp	a,b,c	0.22%			02/03/15		10,000,000		9,997,983
	a,b,c	0.22%			02/11/15		15,000,000		14,996,242
	a,b,c	0.25%			02/17/15		12,000,000		11,996,083
	a,b,c	0.25%			02/18/15		26,000,000		25,991,333
	a,b,c	0.25%			03/03/15		50,000,000		49,978,819
	a,b,c	0.25%			03/05/15		12,000,000		11,994,750
	a,b,c	0.24%			03/06/15		15,600,000		15,593,344
	a,b,c	0.25%			03/06/15		34,000,000		33,984,889
	a,b,c	0.25%			03/10/15		3,000,000		2,998,583
	a,b,c	0.25%			03/12/15		80,000,000		79,961,111
	a,b,c	0.25%			03/13/15		31,000,000		30,984,715
	a,b,c	0.26%			04/23/15		6,000,000		5,995,147

Thunder Bay Funding, LLC	a,b,c	0.22%			04/15/15		7,000,000		6,995,551
	a,b,c	0.22%			05/04/15		45,000,000		44,966,175

									2,001,522,243

Financial Company Commercial Paper 5.7%
Barclays US Funding Corp	a	0.30%			04/01/15		31,000,000		30,976,750
	a	0.35%			04/27/15		31,000,000		30,965,039

BPCE SA	c	0.24%			01/05/15		71,000,000		70,998,107

DNB Bank ASA		0.24%			04/08/15		109,000,000		108,929,513

General Electric Capital Corp		0.22%			04/14/15		46,000,000		45,971,046
		0.25%			06/26/15		125,000,000		124,847,222

JP Morgan Securities, LLC		0.33%			04/24/15		111,000,000		110,885,022

Lloyds Bank, PLC		0.27%			04/20/15		92,000,000		91,924,790

Macquarie Bank, Ltd		0.26%			03/17/15		170,000,000		169,907,917

Nationwide Building Society		0.20%			01/13/15		24,000,000		23,998,400

See financial notes 9

Schwab Advisor Cash Reserves

Portfolio Holdings continued


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)
		0.20%			01/15/15		180,000,000		179,986,000
		0.25%			04/02/15		21,000,000		20,986,729

Natixis SA		0.10%			01/06/15		100,000,000		99,998,611

Oversea-Chinese Banking Corp, Ltd		0.23%			04/20/15		25,000,000		24,982,969

PNC Bank, NA		0.32%			06/10/15		56,000,000		55,920,356

Skandinaviska Enskilda Banken AB		0.25%			01/21/15		23,000,000		22,996,806
		0.27%			03/17/15		19,000,000		18,989,510
		0.26%			04/16/15		5,000,000		4,996,281

State Street Corp		0.30%			06/17/15		6,000,000		5,991,650

Swedbank AB		0.24%			04/17/15		55,000,000		54,961,943

United Overseas Bank, Ltd		0.25%			03/03/15		3,000,000		2,998,729
		0.24%			04/07/15		54,000,000		53,965,440

									1,356,178,830

Other Commercial Paper 1.5%
Toyota Motor Credit Corp		0.24%			03/18/15		100,000,000		99,949,334
		0.22%			05/04/15		137,000,000		136,897,022
		0.23%			05/13/15		41,000,000		40,965,423
		0.23%			05/14/15		55,000,000		54,953,265
		0.23%			05/18/15		26,000,000		25,977,243

									358,742,287

Certificates of Deposit 31.6%
Abbey National Treasury Services PLC	a	0.25%			02/11/15		37,000,000		37,000,000
	a	0.25%			02/25/15		119,000,000		119,000,000

Bank of Montreal		0.12%			01/02/15		201,000,000		201,000,000
		0.21%			01/12/15		55,000,000		55,000,000
		0.17%			01/21/15		150,000,000		150,000,000
		0.23%			03/12/15		139,000,000		139,000,000
		0.22%			04/09/15		50,000,000		50,000,000

Bank of the West		0.22%			02/10/15		18,000,000		18,000,000

Bank of Tokyo Mitsubishi UFJ, Ltd		0.13%			01/02/15		22,000,000		22,000,000
		0.30%			03/02/15		140,000,000		140,000,000
		0.25%			03/03/15		102,000,000		102,000,000
		0.30%			03/03/15		88,000,000		88,000,000
		0.25%			03/10/15		40,000,000		40,000,000
		0.30%			03/11/15		9,000,000		9,000,000
		0.30%			04/06/15		102,000,000		102,000,000
		0.25%			05/07/15		74,000,000		74,000,000

Barclays Bank PLC		0.30%			02/03/15		99,000,000		99,000,000
		0.30%			02/04/15		54,000,000		54,000,000
		0.30%			02/05/15		52,000,000		52,000,000
		0.30%			02/06/15		20,000,000		20,000,000
		0.36%			04/17/15		104,000,000		104,000,000

BNP Paribas		0.26%			03/16/15		52,000,000		52,000,000
		0.30%			06/01/15		102,000,000		102,000,000
		0.31%			06/01/15		86,000,000		86,000,000

Citibank, NA		0.25%			01/09/15		15,000,000		15,000,000
		0.25%			02/09/15		67,000,000		67,000,000

10 See financial notes

Schwab Advisor Cash Reserves

Portfolio Holdings continued


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)
		0.25%			02/25/15		47,000,000		47,000,000
		0.25%			03/20/15		30,000,000		30,000,000
		0.25%			03/26/15		77,000,000		77,000,000
		0.25%			03/27/15		6,000,000		6,000,000
		0.25%			04/01/15		34,000,000		34,000,000
		0.25%			04/15/15		3,000,000		3,000,000
		0.25%			05/04/15		233,000,000		233,000,000

Credit Agricole Corporate and Investment Bank		0.22%			02/02/15		122,000,000		122,000,000
		0.28%			04/01/15		117,000,000		117,000,000

Credit Suisse AG		0.25%			02/19/15		79,000,000		79,000,000
		0.33%			03/09/15		155,000,000		155,000,000
		0.33%			03/13/15		7,000,000		7,000,000
		0.33%			03/16/15		34,000,000		34,000,000
		0.33%			03/26/15		30,000,000		30,000,000
		0.33%			06/18/15		32,000,000		32,000,000

HSBC Bank USA		0.24%			04/22/15		108,000,000		108,000,000
		0.25%			06/01/15		5,000,000		5,000,000

ING Bank NV		0.29%			04/01/15		159,000,000		159,000,000
		0.30%			04/24/15		72,000,000		72,000,000
		0.30%			05/11/15		177,000,000		177,000,000
		0.30%			05/12/15		40,000,000		40,000,000

JPMorgan Chase Bank, NA		0.38%			01/02/15		124,000,000		124,000,000

Lloyds Bank PLC		0.48%			03/12/15		61,000,000		61,000,000
		0.48%			03/18/15		27,000,000		27,000,000

Mitsubishi UFJ Trust & Banking Corp		0.25%			01/06/15		46,000,000		46,000,000
		0.25%			01/13/15		5,000,000		5,000,000
		0.25%			01/20/15		2,000,000		2,000,000
		0.26%			02/05/15		5,000,000		5,000,000
		0.26%			02/06/15		8,000,000		8,000,000
		0.26%			02/23/15		14,000,000		14,000,000
		0.25%			03/04/15		1,000,000		1,000,000
		0.26%			04/02/15		24,000,000		24,000,000
		0.25%			04/21/15		18,000,000		18,000,000
		0.25%			05/06/15		12,000,000		12,000,000
		0.25%			05/13/15		26,000,000		26,000,000
		0.26%			06/02/15		74,000,000		74,000,000
		0.28%			06/29/15		140,000,000		140,000,000

Mizuho Bank, Ltd		0.25%			01/14/15		95,000,000		95,000,000
		0.25%			02/13/15		46,000,000		46,000,000
		0.25%			02/25/15		84,000,000		84,000,000
		0.21%			03/02/15		46,000,000		46,000,000
		0.26%			06/16/15		18,000,000		18,000,000
		0.30%			06/24/15		160,000,000		160,000,000

Natixis SA		0.22%			01/14/15		24,000,000		24,000,000
		0.25%			03/03/15		114,000,000		114,000,000

Nordea Bank Finland PLC		0.22%			03/23/15		214,000,000		213,997,595

Oversea-Chinese Banking Corp, Ltd		0.18%			01/05/15		35,000,000		35,000,000
		0.23%			01/20/15		27,000,000		26,999,858
		0.23%			03/18/15		61,000,000		60,998,714
		0.23%			05/19/15		22,000,000		22,000,000

Rabobank Nederland		0.23%			01/26/15		87,000,000		87,000,000
		0.25%			06/11/15		196,000,000		196,000,000

See financial notes 11

Schwab Advisor Cash Reserves

Portfolio Holdings continued


						Face
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

Skandinaviska Enskilda Banken AB		0.24%			01/27/15		9,000,000		8,999,967
		0.25%			02/06/15		61,000,000		61,000,000

Societe Generale		0.22%			02/02/15		84,000,000		84,000,000
		0.23%			02/02/15		31,000,000		31,000,000
		0.22%			02/03/15		74,000,000		74,000,000

State Street Bank & Trust Company, NA		0.22%			01/21/15		40,000,000		40,000,000

Sumitomo Mitsui Banking Corp		0.12%			01/02/15		50,000,000		50,000,000
		0.25%			01/22/15		21,000,000		21,000,000
		0.25%			02/03/15		6,000,000		6,000,000
		0.37%			02/06/15		18,000,000		18,000,000
		0.37%			02/10/15		38,000,000		38,000,000
		0.25%			02/20/15		75,000,000		75,000,000
		0.25%			02/24/15		34,000,000		34,000,000
		0.30%			03/02/15		34,000,000		34,000,000
		0.30%			03/03/15		27,000,000		27,000,000
		0.25%			03/06/15		79,000,000		79,000,000
		0.30%			03/12/15		1,000,000		1,000,000
		0.25%			03/13/15		89,000,000		89,000,000
		0.25%			03/24/15		14,000,000		14,000,000
		0.25%			03/27/15		62,000,000		62,000,000
		0.25%			04/01/15		70,000,000		70,000,000
		0.25%			04/15/15		12,000,000		12,000,000
		0.26%			06/08/15		44,000,000		44,000,000
		0.30%			06/09/15		9,000,000		9,000,000

Sumitomo Mitsui Trust Bank, Ltd		0.20%			01/12/15		50,000,000		50,000,000
		0.20%			01/14/15		166,000,000		166,000,000
		0.20%			01/21/15		40,000,000		40,000,000
		0.20%			01/30/15		4,000,000		4,000,000
		0.26%			03/30/15		44,000,000		44,000,000

Swedbank AB		0.26%			06/01/15		57,000,000		57,000,000

Toronto-Dominion Bank		0.09%			01/02/15		112,000,000		112,000,000
		0.08%			01/06/15		160,000,000		160,000,000
		0.20%			01/15/15		62,000,000		62,000,000
		0.24%			01/22/15		141,000,000		141,000,000
		0.22%			01/23/15		148,000,000		148,000,000

UBS AG		0.23%			01/16/15		52,000,000		52,000,000
		0.25%			02/17/15		30,000,000		30,000,000
		0.25%			04/02/15		3,000,000		3,000,000
		0.25%			04/07/15		144,000,000		144,000,000

									7,574,996,134

Government Agency Debt 0.3%
Federal Home Loan Bank		0.09%			01/02/15		60,000,000		59,999,850
		0.07%			01/28/15		8,000,000		7,999,580

									67,999,430

Other Instruments 6.2%
Australia & New Zealand Banking Group, Ltd		0.07%			01/02/15		90,000,000		90,000,000
		0.12%			01/02/15		50,000,000		50,000,000
		0.12%			01/05/15		110,000,000		110,000,000

Canadian Imperial Bank of Commerce		0.04%			01/02/15		155,000,000		155,000,000

Citibank, NA		0.11%			01/06/15		75,000,000		75,000,000

12 See financial notes

Schwab Advisor Cash Reserves

Portfolio Holdings continued


							Face
			Effective		Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity		Date		($)		($)

National Australia Bank, Ltd		0.05%				01/02/15		310,000,000		310,000,000

National Bank of Canada		0.09%				01/05/15		229,000,000		229,000,000

Svenska Handelsbanken AB		0.04%				01/02/15		475,000,000		475,000,000

										1,494,000,000

Other Notes 2.5%
Bank of America, NA		0.25%				01/09/15		48,000,000		48,000,000
		0.25%				01/26/15		36,000,000		36,000,000
		0.25%				02/17/15		160,000,000		160,000,000
		0.25%				04/22/15		26,000,000		26,000,000
		0.24%				05/01/15		15,000,000		15,000,000
		0.24%				05/05/15		12,000,000		12,000,000
		0.25%				06/04/15		70,000,000		70,000,000
		0.25%				06/15/15		24,000,000		24,000,000
		0.28%				06/18/15		202,000,000		202,000,000

										593,000,000

Total Fixed-Rate Obligations
(Cost $13,446,438,924)										13,446,438,924




Variable-Rate Obligations 18.2% of net assets

Financial Company Commercial Paper 2.0%
Commonwealth Bank of Australia	c	0.23%				01/09/15		47,000,000		47,000,000
	c	0.26%		01/29/15		10/29/15		90,000,000		89,993,270
	c	0.26%		01/20/15		11/19/15		84,000,000		83,996,201

Westpac Banking Corp	c	0.23%		01/20/15		02/19/15		30,000,000		30,000,000
	c	0.25%		01/27/15		07/27/15		75,000,000		75,000,000
	c	0.26%		01/16/15		11/16/15		145,000,000		145,000,000

										470,989,471

Certificates of Deposit 9.7%
Abbey National Treasury Services PLC	a	0.31%		01/05/15		02/04/15		70,000,000		70,000,000

Bank of Nova Scotia		0.24%		01/28/15		04/28/15		65,000,000		65,000,000
		0.23%		01/09/15		06/09/15		73,000,000		73,000,000

Commonwealth Bank of Australia		0.23%				01/23/15		100,000,000		100,000,000
		0.25%		01/26/15		02/25/15		107,000,000		107,000,000
		0.24%		01/05/15		03/04/15		50,000,000		50,000,000

JPMorgan Chase Bank, NA		0.31%		01/22/15		10/22/15		66,000,000		66,000,000
		0.30%		01/23/15		10/23/15		75,000,000		75,000,000
		0.30%		01/08/15		12/08/15		61,000,000		61,000,000

Rabobank Nederland		0.23%		01/07/15		05/07/15		36,000,000		36,000,000

Royal Bank of Canada		0.24%		01/05/15		03/04/15		125,000,000		125,000,000
		0.25%		01/05/15		09/04/15		25,000,000		25,000,000
		0.27%		01/12/15		12/10/15		124,000,000		124,000,000

State Street Bank & Trust Company, NA		0.23%		01/13/15		04/13/15		175,000,000		175,000,000

Toronto-Dominion Bank		0.23%		01/16/15		06/16/15		134,000,000		134,000,000
		0.23%		01/20/15		06/17/15		50,000,000		50,000,000
		0.24%		01/21/15		07/21/15		3,000,000		3,000,000
		0.25%		01/14/15		10/14/15		85,000,000		85,000,000

See financial notes 13

Schwab Advisor Cash Reserves

Portfolio Holdings continued


							Face
			Effective		Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity		Date		($)		($)
		0.25%		01/20/15		10/19/15		64,000,000		64,000,000

Wells Fargo Bank, NA		0.23%				01/09/15		140,000,000		140,000,000
		0.22%		01/02/15		05/01/15		21,000,000		21,000,000
		0.25%		01/20/15		05/20/15		200,000,000		200,000,000
		0.24%		01/12/15		06/10/15		105,000,000		105,000,000
		0.25%		01/08/15		08/10/15		100,000,000		100,000,000

Westpac Banking Corp		0.24%		01/05/15		05/05/15		195,000,000		195,000,000
		0.25%		01/20/15		08/19/15		60,000,000		60,000,000
		0.26%		01/26/15		08/25/15		23,000,000		23,000,000

										2,332,000,000

Treasury Debt 1.0%
United States Treasury Department		0.09%		01/02/15		01/31/16		160,000,000		159,979,274
		0.11%		01/02/15		07/31/16		95,000,000		95,000,000

										254,979,274

Variable Rate Demand Notes 0.1%
Breckenridge Terrace, LLC
Housing Facilities Revenue Notes Series 1999B	a	0.21%				01/07/15		1,000,000		1,000,000

Eagle Cnty
Housing Facilities RB (The Tarnes at BC) Series 1999B	a	0.21%				01/07/15		2,410,000		2,410,000

GFRE Holdings, LLC
Taxable Notes Series 2009A	a	0.16%				01/07/15		2,355,000		2,355,000

Illinois Regional Transportation Auth
General Obligation Working Cash Notes Series 2014A1	a,c	0.11%				01/02/15		5,985,000		5,985,000

Tenderfoot Seasonal Housing, LLC
Taxable Housing Facilities Revenue Notes Series 2000B	a	0.21%				01/07/15		2,885,000		2,885,000

										14,635,000

Other Notes 5.4%
Bank of America, NA		0.36%		01/05/15		03/05/15		63,000,000		63,000,000

Canadian Imperial Bank of Commerce		0.28%		01/12/15		09/04/15		182,000,000		182,000,000

JP Morgan Chase & Co		0.68%		01/23/15		04/23/15		24,531,000		24,557,396

JPMorgan Chase Bank, NA		0.36%		03/09/15		11/06/15		200,000,000		200,103,000
		0.38%		01/20/15		01/15/16		90,000,000		90,000,000
		0.35%		01/22/15		01/22/16		30,000,000		30,000,000

Royal Bank of Canada		0.33%		01/02/15		12/31/15		125,000,000		125,000,000
		0.35%		01/05/15		01/04/16		137,000,000		137,000,000
	c	0.32%		01/07/15		01/07/16		60,000,000		60,000,000

Wells Fargo Bank, NA		0.33%		03/16/15		01/15/16		55,000,000		55,000,000
		0.39%		03/23/15		01/22/16		225,000,000		225,000,000

Westpac Banking Corp	c	0.53%		01/28/15		07/28/15		100,000,000		100,000,000

Whistlejacket Capital, LLC	d,†	n/a		n/a		n/a		2,373,851		2,373,851

										1,294,034,247

Total Variable-Rate Obligations
(Cost $4,366,637,992)										4,366,637,992

14 See financial notes

Schwab Advisor Cash Reserves

Portfolio Holdings continued


						Maturity
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)

Repurchase Agreements 25.7% of net assets

*Government Agency Repurchase Agreements 2.6%**
Bank of Nova Scotia
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $48,410,001, 3.50%, due 11/01/42)		0.10%			01/02/15		47,000,261		47,000,000

BNP Paribas Securities Corp
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $149,350,001, 4.00%, due 05/20/42)		0.06%			01/02/15		145,000,483		145,000,000

Goldman Sachs & Co
Issued 12/26/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $153,000,000, 1.91% - 7.00%, due 02/01/19 - 12/01/44)		0.07%			01/02/15		150,002,042		150,000,000
Issued 12/31/14, repurchase date 01/07/15 (Collateralized by U.S. Government Agency Securities valued at $62,220,000, 2.00% - 7.00%, due 11/01/16 - 05/01/44)		0.08%			01/07/15		61,000,949		61,000,000

JP Morgan Securities, LLC
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $62,830,001, 3.00% - 3.50%, due 07/01/42 - 12/01/42)		0.10%			01/02/15		61,000,339		61,000,000

Merrill Lynch, Pierce, Fenner & Smith, Inc
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $43,260,000, 0.41% - 5.31%, due 05/20/41 - 11/20/64)		0.08%			01/02/15		42,000,187		42,000,000
Issued 12/29/14, repurchase date 01/05/15 (Collateralized by U.S. Government Agency Securities valued at $70,040,000, 0.46% - 6.32%, due 02/20/39 - 11/20/64)		0.05%			01/05/15		68,000,661		68,000,000

Mizuho Securities USA, Inc
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Treasury Securities valued at $51,000,059, 0.50% - 4.63%, due 01/31/16 - 11/15/16)		0.08%			01/02/15		50,000,222		50,000,000

Morgan Stanley & Co. LLC
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Government Agency Securities valued at $10,202,469, 2.25% - 3.25%, due 08/08/22 - 01/18/33)		0.08%			01/02/15		10,000,044		10,000,000

									634,000,000

Treasury Repurchase Agreements 19.2%
Barclays Capital, Inc
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Treasury Securities valued at $310,903, 0.88%, due 04/30/17)		0.05%			01/02/15		304,797		304,796

Federal Reserve Bank of New York
Issued 12/31/14, repurchase date 01/02/15 (Collateralized by U.S. Treasury Securities valued at $1,326,003,769, 4.75%, due 02/15/41)		0.05%			01/02/15		1,326,003,683		1,326,000,000
Issued 12/15/14, repurchase date 01/05/15 (Collateralized by U.S. Treasury Securities valued at $803,354,062, 1.38% - 4.63%, due 09/30/18 - 02/15/40)		0.07%			01/05/15		791,032,299		791,000,000
Issued 12/29/14, repurchase date 01/05/15 (Collateralized by U.S. Treasury Securities valued at $1,620,319,001, 3.63%, due 02/15/20)		0.10%			01/05/15		1,615,031,403		1,615,000,000

See financial notes 15

Schwab Advisor Cash Reserves

Portfolio Holdings continued


						Maturity
			Effective	Maturity		Amount		Value
Issuer	Footnotes	Rate	Maturity	Date		($)		($)
Issued 12/22/14, repurchase date 01/05/15 (Collateralized by U.S. Treasury Securities valued at $573,490,617, 1.63% - 4.50%, due 08/15/22 - 05/15/38)		0.10%			01/05/15		565,021,972		565,000,000

JP Morgan Securities, LLC
Issued 12/12/14, repurchase date 01/15/15 (Collateralized by U.S. Treasury Securities valued at $171,368,148, 0.63% - 2.00%, due 04/30/18 - 10/31/20)		0.09%			01/07/15		168,010,920		168,000,000
Issued 12/12/14, repurchase date 01/22/15 (Collateralized by U.S. Treasury Securities valued at $132,606,337, 0.63% - 2.00%, due 04/30/18 - 10/31/20)		0.09%			01/07/15		130,008,450		130,000,000

									4,595,304,796

Other Repurchase Agreements 3.9%**
BNP Paribas Securities Corp
Issued 12/02/14, repurchase date 02/09/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $50,576,318, 0.33% - 6.50%, due 03/06/17 - 09/25/46)		0.26%			01/07/15		44,011,440		44,000,000
Issued 11/19/14, repurchase date 02/17/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $46,000,000, 3.16% - 6.75%, due 06/01/21 - 03/15/25)		0.46%			01/07/15		40,025,044		40,000,000

Credit Suisse Securities (USA), LLC
Issued 10/21/14, repurchase date 02/03/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $56,350,243, 0.37% - 5.75%, due 05/25/35 - 05/25/47)	d	0.65%			02/03/15		49,092,896		49,000,000
Issued 10/28/14, repurchase date 02/10/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $46,002,658, 2.48% - 6.25%, due 08/19/34 - 02/15/51)	d	0.65%			02/10/15		40,075,833		40,000,000
Issued 11/12/14, repurchase date 02/25/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $1,153,990, 5.90%, due 09/15/39)	d	0.65%			02/25/15		1,001,896		1,000,000
Issued 11/13/14, repurchase date 02/25/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $125,351,033, 0.24% - 5.97%, due 06/25/33 - 12/20/46)	d	0.65%			02/25/15		109,204,678		109,000,000
Issued 12/19/14, repurchase date 04/02/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $115,000,352, 0.30% - 5.60%, due 08/01/30 - 11/25/47)	d	0.65%			04/02/15		100,187,778		100,000,000
Issued 12/18/14, repurchase date 04/02/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $46,000,419, 2.19% - 6.22%, due 10/25/31 - 09/12/49)	d	0.65%			04/02/15		40,075,833		40,000,000
Issued 12/22/14, repurchase date 04/02/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $4,604,609, 5.54%, due 09/15/39)	d	0.65%			04/02/15		4,007,294		4,000,000
Issued 12/24/14, repurchase date 04/02/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $1,153,990, 5.90%, due 09/15/39)	d	0.65%			04/02/15		1,001,788		1,000,000

JP Morgan Securities, LLC
Issued 12/04/14, repurchase date 06/02/15 (Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at $115,052,613, 1.25% - 8.88%, due 06/15/16 - 06/15/68)	d	0.61%			03/31/15		100,198,250		100,000,000

16 See financial notes

Schwab Advisor Cash Reserves

Portfolio Holdings continued

Maturity

Effective

Maturity

Amount

Value

Issuer

Footnotes

Rate

Maturity

Date

($)

Issued 12/17/14, repurchase date 06/15/15
(Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at
$179,439,174, 0.45% - 8.88%, due 07/15/15 - 06/25/58)

0.61%

03/31/15

156,274,907

156,000,000

Merrill Lynch, Pierce, Fenner & Smith, Inc

Issued 11/07/14, repurchase date 02/06/15
(Collateralized by common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations valued at
$282,900,001, 0.00% - 12.00%, due 01/29/17 - 12/10/49)

0.55%

02/04/15

246,334,492

246,000,000

930,000,000

Total Repurchase Agreements

(Cost $6,159,304,796)

6,159,304,796

End of Investments.

At 12/31/14, the tax basis cost of the fund’s investments was $23,972,381,712.


a		Credit-enhanced or liquidity-enhanced.
b		Asset-backed security.
c		Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $2,507,598,688 or 10.5% of net assets.
d		Illiquid security. At the period end, the value of these amounted to $848,373,851 or 3.5% of net assets.
†		Whistlejacket notes are in receivership, and the fund elected to sell all of its Whistlejacket notes at auction (April 29, 2009). The remaining investment represents an interest in a small residual fund that is being held to cover any remaining expenses and liabilities associated with receivership.
*		Usually collateralized via U.S. Government Agency Securities or less frequently by U.S. Treasury Securities.
**		Usually collateralized via common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations or less frequently by U.S. Government Agency Securities and/ or U.S. Treasury Securities.


ABS —		Asset-backed securities
ETF —		Exchange Traded Fund
RB —		Revenue bond

See financial notes 17

Schwab Advisor Cash Reserves

Statement of

Changes in Net Assets

For the current and prior report periods



Operations


1/1/14-12/31/14				1/1/13-12/31/13
Net investment income		$2,300,347			$2,203,993
Net realized gains	+	8,440			315

Increase in net assets from operations		2,308,787			2,204,308

Distributions to Shareholders

Distributions from net investment income
Sweep Shares		(580,822	)		(581,590	)
Premier Sweep Shares	+	(1,719,525	)		(1,622,403	)

Total distributions from net investment income		(2,300,347	)		(2,203,993	)

Transactions in Fund Shares*

Shares Sold
Sweep Shares		20,201,561,814			20,012,082,994
Premier Sweep Shares	+	73,314,241,632			67,327,164,291

Total shares sold		93,515,803,446			87,339,247,285


Shares Reinvested
Sweep Shares		508,597			500,995
Premier Sweep Shares	+	1,641,173			1,534,329

Total shares reinvested		2,149,770			2,035,324


Shares Redeemed
Sweep Shares		(20,309,183,858	)		(20,085,277,915	)
Premier Sweep Shares	+	(72,888,588,931	)		(67,378,698,143	)

Total shares redeemed		(93,197,772,789	)		(87,463,976,058	)

Net transactions in fund shares		320,180,427			(122,693,449	)

Net Assets

Beginning of period		23,658,553,756			23,781,246,890
Total increase or decrease	+	320,188,867			(122,693,134	)

End of period		$23,978,742,623			$23,658,553,756


*		Transactions took place at $1.00 per share; figures for share quantities are the same as for dollars.

20 See financial notes

Schwab Advisor Cash Reserves

Financial Notes

1. Business Structure of the Fund:

Schwab Advisor Cash Reserves is a series of The Charles Schwab Family of Funds (the “trust”), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trust as of the end of the period, including the fund discussed in this report, which is highlighted:



The Charles Schwab Family of Funds (organized October 20, 1989)		Schwab Investor Money Fund
Schwab Money Market Fund		Schwab Municipal Money Fund
Schwab Government Money Fund		Schwab AMT Tax-Free Money Fund
Schwab U.S. Treasury Money Fund		Schwab California Municipal Money Fund
Schwab Treasury Obligations Money Fund		Schwab New York AMT Tax-Free Money Fund
Schwab Value Advantage Money Fund		Schwab New Jersey AMT Tax-Free Money Fund
Schwab Advisor Cash Reserves		Schwab Pennsylvania Municipal Money Fund
Schwab Cash Reserves		Schwab Massachusetts AMT Tax-Free Money Fund
Schwab Retirement Advantage Money Fund

Schwab Advisor Cash Reserves offers two share classes: Sweep Shares and Premier Sweep Shares. Shares of each class represent interest in the same portfolio, but each class has different expenses and investment minimums.

Shares are bought and sold at closing net asset value per share (“NAV”), which is the price for all outstanding shares of the fund. Each share has a par value of 1/1,000 of a cent, and the fund’s Board of Trustees (the “Board”) may authorize the issuance of as many shares as necessary.

The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law.

2. Significant Accounting Policies:

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

(a) Security Valuation:

Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

Securities in the fund are valued at amortized cost (which approximates market value) as permitted in accordance with Rule 2a-7 of the 1940 Act. In the event that security valuations do not approximate market value, securities may be fair valued as determined in accordance with procedures adopted by the Board. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the fund pursuant to the valuation procedures.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair value of its investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the fund determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal

Schwab Advisor Cash Reserves

Financial Notes (continued)

2. Significant Accounting Policies (continued):

conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.

The three levels of the fair value hierarchy are as follows:


	•	Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities.

	•	Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. Securities held by money funds operating under Rule 2a-7 of the 1940 Act are valued at amortized cost which approximates current market value and are considered to be valued using Level 2 inputs.

	•	Level 3 — significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the fund uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the fund in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the fund in the absence of market information. Assumptions used by the fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the fund’s results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The levels associated with valuing the fund’s investments as of December 31, 2014 are disclosed in the Portfolio Holdings.

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

Repurchase Agreements: In a repurchase agreement, a fund buys a security from another party (the “counter-party”), usually a financial institution, with the agreement that it be sold back in the future. Repurchase agreements subject a fund to counter-party risk, meaning that the fund could lose money if the other party fails to perform under the terms of the agreement. The fund mitigates this risk by ensuring that a fund’s repurchase agreements are collateralized by cash, U.S. government securities, fixed income securities, equity securities or other types of securities. These risks are magnified to the extent that a repurchase agreement is secured by collateral other than cash and government securities, such as debt securities, equity securities and high yield securities that are rated below investment grade. All collateral is held by the fund’s custodian (or, with multi-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement. In the event of a default by the counter-party, realization of the collateral proceeds could be delayed or limited and the value of the collateral may decline. Investments in repurchase agreements are also based on a review of the credit quality of the repurchase agreement counter-party.

As of December 31, 2014, the fund had investments in repurchase agreements with a gross value of $6,159,304,796 as disclosed in the Portfolio Holdings and the Statement of Assets and Liabilities. The value of the related collateral disclosed in the Portfolio Holdings exceeded the value of the repurchase agreements at period end.

Delayed-Delivery Transactions: The fund may buy securities at a predetermined price or yield, with payment and delivery taking place after the customary settlement period for that type of security. The fund will assume the rights and risks of ownership at the time of purchase, including the risk of price and yield fluctuations. Typically, no interest will accrue to a fund

Schwab Advisor Cash Reserves

Financial Notes (continued)

2. Significant Accounting Policies (continued):

until the security is delivered. The fund will earmark or segregate appropriate liquid assets to cover its delayed-delivery purchase obligations.

(c) Security Transactions:

(d) Investment Income:

(e) Expenses:

For funds offering multiple share classes, the net investment income, other than class specific expenses, and the realized and unrealized gains or losses, are allocated daily to each class in proportion to their average daily net assets.

(f) Distributions to Shareholders:

The fund declares distributions from net investment income, if any, every day it is open for business. These distributions, which are substantially equal to a fund’s net investment income for that day, are paid out to shareholders once a month. The fund makes distributions from net realized capital gains, if any, once a year.

(g) Custody Credit:

The fund has an arrangement with its custodian bank, State Street Bank and Trust Company (“State Street”), under which the fund may receive a credit for its uninvested cash balance to offset its custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to the fund’s operating expenses.

(h) Accounting Estimates:

(i) Federal Income Taxes:

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

(j) Indemnification:

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

Schwab Advisor Cash Reserves

Financial Notes (continued)

3. Risk Factors:

Investment Risk. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of a shareholder’s investment at $1 per share, it is possible to lose money by investing in the fund.

Interest Rate Risk. Interest rates rise and fall over time. As with any investment whose yield reflects current interest rates, the fund’s yield will change over time. During periods when interest rates are low, the fund’s yield (and total return) also will be low. Because interest rates in the United States are at, or near, historically low levels, a change in a central bank’s monetary policy or improving economic conditions may result in an increase in interest rates. A sudden or unpredictable rise in interest rates may cause volatility in the market and may decrease liquidity in the money market securities markets, making it more difficult for the fund to sell its money market investments at a time when the investment adviser might wish to sell such investments. Decreased market liquidity also may make it more difficult to value some or all of the fund’s money market securities holdings. In addition, to the extent the fund makes any reimbursement payments to the investment adviser and/or its affiliates, the fund’s yield would be lower.

Many of the U.S. government securities that the fund invests in are not backed by the full faith and credit of the United States government, which means they are neither issued nor guaranteed by the U.S. Treasury. Although maintained in conservatorship by the Federal Housing Finance Agency since September 2008, Fannie Mae (FNMA) and Freddie Mac (FHLMC) maintain only lines of credit with the U.S. Treasury. The Federal Home Loan Banks (FHLB) maintain limited access to credit lines from the U.S. Treasury. Other securities, such as obligations issued by the Federal Farm Credit Banks Funding Corporation (FFCB), are supported solely by the credit of the issuer. There can be no assurance that the U.S. government will provide financial support to securities of its agencies and instrumentalities if it is not obligated to do so under law. Also, any government guarantees on securities a fund owns do not extend to the shares of the fund itself.

Foreign Investment Risk. The fund’s investments in securities of foreign issuers or securities with credit or liquidity enhancements provided by foreign entities may involve certain risks that are greater than those associated with investments in securities of U.S. issuers or securities with credit or liquidity enhancements provided by U.S. entities. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. In addition, sovereign risk, or the risk that a government may become unwilling or unable to meet its loan obligations or guarantees, could increase the credit risk of financial institutions connected to that particular country.

Schwab Advisor Cash Reserves

Financial Notes (continued)

3. Risk Factors (continued):

adviser applies its own investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that they will produce the desired results. The investment adviser’s maturity decisions will also affect the fund’s yield, and in unusual circumstances potentially could affect its share price. To the extent that the investment adviser anticipates interest rate trends imprecisely, the fund’s yield at times could lag those of other money market funds.

Liquidity Risk. Liquidity risk exists when particular investments are difficult to purchase or sell. The market for certain investments may become illiquid due to specific adverse changes in the conditions of a particular issuer or under adverse market or economic conditions independent of the issuer, including, for example, during periods of rising interest rates. In addition, dealer inventories of certain securities — an indication of the ability of dealers to engage in “market making” — are at, or near, historic lows in relation to market size, which could potentially lead to decreased liquidity. The fund’s investments in illiquid securities may reduce the returns of the fund because it may be unable to sell the illiquid securities at an advantageous time or price. Further, transactions in illiquid securities may entail transaction costs that are higher than those for transactions in liquid securities.

Redemption Risk. The fund may experience periods of heavy redemptions that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value, particularly during periods of declining or illiquid markets. Redemptions by a few large investors in the fund may have a significant adverse effect on the fund’s ability to maintain a stable $1.00 share price. In the event any money market fund fails to maintain a stable net asset value, other money market funds, including the fund, could face a market-wide risk of increased redemption pressures, potentially jeopardizing the stability of their $1.00 share prices.

Money Market Risk. The fund is not designed to offer capital appreciation. In exchange for their emphasis on stability and liquidity, money market investments may offer lower long-term performance than stock or bond investments.

Please refer to the fund’s prospectus for a more complete description of the principal risks of investing in the fund.

4. Affiliates and Affiliated Transactions:

Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”), a wholly owned subsidiary of The Charles Schwab Corporation, serves as the fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement (“Advisory Agreement”) between CSIM and the trust.

For its advisory and administrative services to the fund, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of the fund’s average daily net assets as follows:


Average Daily Net Assets

First $1 billion			0.35%
More than $1 billion but not exceeding $10 billion			0.32%
More than $10 billion but not exceeding $20 billion			0.30%
More than $20 billion but not exceeding $40 billion			0.27%
Over $40 billion			0.25%

The Board has adopted a Shareholder Servicing and Sweep Administration Plan (the “Plan”) on behalf of the fund. The Plan enables the fund to bear expenses relating to the provision by service providers, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, “Schwab”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the fund. Schwab serves as the fund’s paying agent under the Plan for making payments of the shareholder service fee due to the service providers (other than Schwab). All shareholder service fees paid by the fund to Schwab in its capacity as the fund’s paying agent will be passed through to the service providers, and Schwab will not retain any portion of such fees. The Plan also enables the fund to pay Schwab for certain sweep administration services, such as processing of automatic purchases and redemptions it provides to fund shareholders invested in the fund.

Schwab Advisor Cash Reserves

Financial Notes (continued)

4. Affiliates and Affiliated Transactions (continued):

administration fee paid to Schwab is based on the average daily net asset value of the fund shares owned by shareholders holding shares through Schwab. Payments under the Plan are made as described above regardless of Schwab’s or the service provider’s actual cost of providing the services. If the cost of providing the services under the Plan is less than the payment received, the unexpended portion of the fees may be retained as profit by Schwab or the service provider.

Contractual Expense Limitation

CSIM and its affiliates have made an additional agreement with the fund, for so long as CSIM serves as the investment adviser to the fund, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (“expense limitation”), as follows:


Sweep Shares			0.66%
Premier Sweep Shares			0.59%

In addition, effective January 1, 2014 through December 31, 2014, CSIM and its affiliates agreed to waive an additional amount of the fund’s expenses equal to 0.035% of the fund’s average daily net assets.

During the period ended December 31, 2014, the fund waived $117,069,736 in expenses of which $34,164,430 was waived in accordance with the contractual expense limitation agreement noted above and the remainder to maintain a positive net yield as noted below.

Voluntary Yield Waiver/Reimbursement

In addition to the contractual expense limitation agreement noted above, CSIM and its affiliates also may waive and/or reimburse expenses to the extent necessary to maintain a positive net yield for each share class of the fund. CSIM and its affiliates may recapture from the fund any of these expenses or fees they have waived and/or reimbursed until the third anniversary of the end of the fiscal year in which such waiver and/or reimbursement occurs, subject to certain limitations. The reimbursement payments by the fund to CSIM and its affiliates are considered “non-routine expenses” and are not subject to any net operating expense limitations in effect at the time of such payment. This recapture could negatively affect the fund’s future yield. There were no prior year amounts recaptured. As of December 31, 2014, the balance of recoupable waivers is as follows:


	Expiration Date
	December 31, 2015		December 31, 2016		December 31, 2017		Total

Sweep Shares		$19,328,373		$21,783,684		$23,935,886		$65,047,943
Premier Sweep Shares		39,977,192		49,531,585		58,969,420		148,478,197

As of December 31, 2014, the fund had recoupable waivers expire in the amount of $21,168,260 and $44,182,521 for Sweep Shares and Premier Sweep Shares, respectively.

Pursuant to an exemptive order issued by the SEC, the fund may enter into interfund borrowing and lending transactions with other Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate to be charged on a loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review by the Board. The fund had no interfund borrowing or lending activity during the period.

5. Board of Trustees:

The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted on the fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.

Schwab Advisor Cash Reserves

Financial Notes (continued)

6. Borrowing from Banks:

The fund has access to custodian overdraft facilities, a committed line of credit of $150 million with State Street, an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The fund pays interest on the amount it borrows at rates that are negotiated periodically. The fund also pays an annual fee to State Street for the committed line of credit.

There were no borrowings from the lines of credit by the fund during the period. However, the fund may have utilized its overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.

7. Federal Income Taxes:

As of December 31, 2014, the fund had no undistributed earnings on a tax basis.

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of December 31, 2014, the fund had capital loss carryforwards of $1,354,220 available to offset future net capital gains before the expiration date of December 31, 2017.

For tax purposes, realized net capital losses and late-year ordinary losses incurred after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended December 31, 2014, the fund had no capital losses deferred and had $8,440 capital loss carryforwards utilized.

The tax-basis components of distributions paid during the current and prior fiscal years were as follows:


Current period distributions
Ordinary income			$2,300,347

Prior period distributions
Ordinary income			$2,203,993

Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as short-term capital gains. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

As of December 31, 2014, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the fund, and has determined that no provision for income tax is required in the fund’s financial statements. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended December 31, 2014, the fund did not incur any interest or penalties.

8. Recent Regulatory Development:

On July 23, 2014 the SEC passed new amendments to the rules governing money market funds. The new amendments have mandatory compliance dates, which are staggered over the next two years. Management is currently evaluating the impact of the new amendments and their impact to the fund’s future financial statements and related disclosures.

9. Subsequent Events:

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of:

Schwab Advisor Cash Reserves

In our opinion, the accompanying statement of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Advisor Cash Reserves (one of the funds constituting The Charles Schwab Family of Funds, hereafter referred to as the “Fund”) at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

February 16, 2015

Trustees and Officers

The tables below give information about the trustees and officers of The Charles Schwab Family of Funds, which includes the fund covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 95 funds.

Independent Trustees


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served¹)	During the Past Five Years	the Trustee	Other Directorships

Mariann Byerwalter 1960 Trustee (Trustee of The Charles Schwab Family of Funds since 2000.)	Chairman of JDN Corporate Advisory LLC (advisory services firm) (Oct. 2001 – present).	74	Director, WageWorks, Inc. (2010 – present) Director, Redwood Trust, Inc. (1998 – present)


John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds since 2008.)	Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present).	74	Director, Gilead Sciences, Inc. (2005 – present)


David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds since 2011.)	Private Investor.	74	Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present)


Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds since 2011.)	Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – Sept. 2013).	74	Director, KLA-Tencor Corporation (2008 – present)


Charles A. Ruffel 1956 Trustee (Trustee of The Charles Schwab Family of Funds since 2015.)	Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014).	95	None.


Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds since 2000.)	Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present).	74	Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012)

Independent Trustees (continued)


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served¹)	During the Past Five Years	the Trustee	Other Directorships

Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds since 2008.)	Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present).	74	Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present)

Interested Trustees


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served)	During the Past Five Years	the Trustee	Other Directorships

Charles R. Schwab²1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989.)	Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present).	74	Chairman and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present)


Walter W. Bettinger II²1960 Trustee (Trustee of The Charles Schwab Family of Funds since 2008.)	Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director Schwab Holdings, Inc. (2008 – present).	95	Director, The Charles Schwab Corporation (2008 – present)

Officers of the Trust


Name, Year of Birth, and Position(s)
with the trust; (Terms of office, and
length of Time Served³)		Principal Occupations During the Past Five Years

Marie Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds since 2010.)		Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010).


George Pereira 1964 Treasurer and Principal Financial Officer (Officer of The Charles Schwab Family of Funds since 2004.)		Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present).

Officers of the Trust (continued)


Name, Year of Birth, and Position(s)
with the trust; (Terms of office, and
length of Time Served³)		Principal Occupations During the Past Five Years

Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds since 2011.)		Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009).


Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds since 2011.)		Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008).


David Lekich 1964 Chief Legal Officer and Secretary (Officer of The Charles Schwab Family of Funds since 2011.)		Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs.


Catherine MacGregor 1964 Vice President and Assistant Secretary (Officer of The Charles Schwab Family of Funds since 2005.)		Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present).


¹		Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first.
²		Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser.
³		The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board.