Form 497K
|
|
|
|
|
|
|
Summary Prospectus |
|
February 28, 2013 |
Schwab Treasury Obligations Money Fund
Ticker
Symbol: Value Advantage Shares®: SNOXX
Before you invest, you may want to review the funds prospectus, which contains more information about the fund and its risks. You can find the
funds prospectus, Statement of Additional Information (SAI) and other information about the fund online at www.schwabfunds.com/prospectus. You can also obtain this information at no cost by calling 1-866-414-6349 or by sending an
email request to orders@mysummaryprospectus.com. If you purchase or hold fund shares through a financial intermediary, the funds prospectus, SAI, and other information about the fund are available from your financial intermediary.
The funds prospectus dated April 6, 2012, as supplemented June 4, 2012, and SAI dated April 6, 2012, as amended April 13,
2012, as supplemented June 4, 2012 and February 28, 2013, include a more detailed discussion of fund investment policies and the risks associated with various fund investments. The prospectus and SAI are incorporated by reference into the summary
prospectus, making them legally a part of the summary prospectus.
Investment objective
The funds goal is to seek current income consistent with stability of capital and liquidity. The funds investment objective is not fundamental and therefore may be changed by the funds
board of trustees without shareholder approval.
Fund fees and expenses
This table describes the fees and expenses you may pay if you buy and hold Value Advantage Shares of the fund.
|
|
|
|
|
Shareholder fees (fees paid
directly from your investment) |
|
|
|
|
None |
|
|
|
|
|
|
Annual fund operating expenses
(expenses that you pay each year as a % of the value of your investment) |
|
Management fees |
|
|
0.34 |
|
Distribution (12b-1) fees |
|
|
None |
|
Other expenses |
|
|
0.25 |
|
|
|
|
|
|
Total annual fund operating expenses1 |
|
|
0.59 |
|
Less expense reduction |
|
|
(0.14 |
) |
|
|
|
|
|
Total annual fund operating expenses after expense
reduction2 |
|
|
0.45 |
|
|
|
|
|
|
1 |
Other expenses are based on estimated amounts for the current fiscal year. |
2 |
The investment adviser and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine
expenses) of the Value Advantage Shares to 0.45% for so long as the investment adviser serves as the adviser to the fund (the contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or
terminated with the approval of the funds Board of Trustees. Non-routine expenses that are not subject to the foregoing contractual expense limitation agreement include, but are not limited to, any reimbursement payments made by
the Value Advantage Shares to the investment adviser and/or its affiliates of fund fees and expenses that were previously waived or reimbursed by the investment adviser and/or its affiliates in order to maintain a non-negative net yield for the
Value Advantage Shares (the voluntary yield waiver). As of the fiscal year ended December 31, 2011, the fund had not yet commenced operations; therefore, the investment adviser and/or its affiliates had not waived any fees under the
voluntary yield waiver. Any future reimbursement of previously waived fees made by the Value Advantage Shares to the investment adviser and/or its affiliates may cause the total annual fund operating expenses of the Value Advantage Shares to exceed
the expense limitation under the contractual expense limitation agreement. If any actual or scheduled reimbursement payments to the investment adviser and/or its affiliates under the voluntary fee waiver materially impact the total annual fund
operating expenses of the Value Advantage Shares, this fee table will be amended to reflect that impact.
|
This example is intended to help you compare the cost of investing in the funds Value Advantage Shares with the cost of investing in other mutual funds. The example assumes that you invest $10,000
in the fund for the time periods indicated and then redeem all of your shares at the end of those time periods. The example also assumes that your investment has a 5% return each year and that the funds Value Advantage Shares operating
expenses remain the same. The figures are based on total annual fund operating expenses after expense reduction. The expenses would be the same whether you stayed in the fund or sold your shares at the end of each period. Your actual costs may be
higher or lower.
|
|
|
Expenses on a $10,000 investment |
Principal investment strategies
To pursue its goal, the fund typically invests in securities backed by the full faith and credit of the U.S. government and repurchase agreements backed by such investments. Under normal
circumstances, the fund will invest at least 80% of its net assets in U.S. Treasury obligations and repurchase agreements backed by such obligations. The fund will notify its shareholders at least 60 days before changing this policy. The full faith
and credit backing is the strongest backing offered by the U.S. government, and traditionally is considered by investors to be the highest degree of safety as far as the payment of principal and interest.
Based on the fund managers view of market conditions for U.S. Treasury securities, the fund may invest up to 20% of its net assets in:
(i) obligations that are issued by the U.S. government, its agencies or instrumentalities, including obligations that are not guaranteed by the U.S. Treasury, such as those issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks; and
(ii) obligations that are issued by private issuers that are guaranteed as to principal or interest by the U.S. government, its agencies or instrumentalities. Obligations that are issued by private issuers that are guaranteed as to principal or
interest by the U.S. government, its agencies or instrumentalities are considered U.S. government securities under the rules that govern money market funds.
In choosing securities, the funds manager seeks to maximize current income within the limits of the
funds investment objective and credit, maturity and diversification policies. By investing primarily in full faith and credit U.S. government investments and repurchase agreements backed by such investments, the fund seeks to provide safety as
to its assets. The portfolio manager may adjust the funds average maturity based on current and anticipated changes in interest rates. To preserve its investors capital, the fund seeks to maintain a stable $1 share price.
For temporary defensive purposes during unusual market conditions, the fund may invest up to 100% of its assets in cash, cash equivalents or other high
quality short-term investments.
Principal risks
The fund is subject to risks, any of which could cause an investor to lose money. The funds principal risks include:
Investment Risk. Your 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 your investment at $1.00 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 funds yield will change over time. During periods when interest rates are low, the funds yield (and total
return) also will be low. In addition, to the extent the fund makes any reimbursement payments to the investment adviser and/or its affiliates, the funds yield would be lower.
Credit Risk. The fund is subject to the risk that a decline in the credit quality of a portfolio investment could cause the fund to lose money or underperform. The fund could lose money if the
issuer or guarantor of a portfolio investment fails to make timely principal or interest payments or otherwise honor its obligations. Even though the funds investments in repurchase agreements are collateralized at all times, there is some
risk to the fund if the other party should default on its obligations and the fund is delayed or prevented from recovering or disposing of the collateral. Negative perceptions of the ability of an issuer or guarantor to make payments or otherwise
honor its obligations could also cause the price of that investment to downgrade or decline. The credit quality of the funds portfolio holdings can change rapidly in certain market environments and any default on the part of a single portfolio
investment could cause the funds share price or yield to fall. Certain U.S. government securities that the fund may 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 limited lines of credit with the U.S. Treasury. The Federal
Home Loan Banks (FHLB) also only 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 the fund owns do
not extend to shares of the fund itself.
Counter-Party Risk. When the fund enters into a repurchase agreement, the fund is exposed to
the risk that the other party (i.e., 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 and time, the counter-party will not repurchase the security.
Management Risk. Any actively
managed mutual fund is subject to the risk that its investment adviser will make poor security selections. The funds investment 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 advisers maturity decisions will also affect the funds yield, and in unusual circumstances potentially could affect its share price. To the extent that
the investment adviser anticipates interest rate trends imprecisely, the funds 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. The funds 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 funds 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.
Regulatory Risk. The Securities and Exchange Commission (SEC) and other regulators may adopt additional money market fund
regulations in the future, which may impact the operation and the performance of the fund.
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.
Performance
The fund has not been in
operation for a full calendar year, and hence has no past performance data to present.
Investment adviser
Charles Schwab Investment Management, Inc.
Purchase and sale of fund shares
The
fund is open for business each day that the New York Stock Exchange is open except when the following federal holidays are observed: Columbus Day and Veterans Day.
|
|
|
|
|
Summary Prospectus February 28, 2013 |
|
2 of 4 |
|
Schwab Treasury Obligations Money Fund |
When you place orders to purchase, exchange or redeem fund shares through Charles Schwab & Co.,
Inc. (Schwab) or another financial intermediary, you must follow Schwabs or the other financial intermediarys transaction procedures.
Eligible Investors (as determined by the fund and which generally are limited to institutional investors) may invest directly in the fund by placing purchase, exchange and redemption orders through the
funds transfer agent. Eligible Investors must contact the transfer agent by phone or in writing to obtain an account application. Eligible Investors may contact the transfer agent:
|
|
|
by telephone at 1-800-407-0256; or |
|
|
|
by mail in writing at Boston Financial Data Services, Attn: Schwab Funds, P.O. Box 8283, Boston, MA 02266-8323. |
Set forth below are the investment minimums for the funds Value Advantage Shares. These minimums may be waived for certain investors or in the
funds sole discretion.
|
|
|
|
|
Minimum initial
investment |
|
Minimum additional
investments |
|
Minimum
balance |
$25,000 ($15,000 for IRA and custodial accounts) |
|
$500 |
|
$20,000 ($15,000 for IRA and custodial accounts) |
Tax information
Distributions received from the fund will generally be taxable as ordinary income or capital gains, unless you are investing through an IRA, 401(k) or other tax-advantaged account.
Payments to financial intermediaries
If
you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediarys website for more information.
|
|
|
|
|
Summary Prospectus February 28, 2013 |
|
3 of 4 |
|
Schwab Treasury Obligations Money Fund |
|
|
|
REG67346FLD-02 00093216 |
|
Schwab Treasury Obligations Money Fund ; Ticker Symbol: Value Advantage
Shares®: SNOXX |
Schwab Funds®
|
|
|
|
|
Summary Prospectus February 28, 2013 |
|
4 of 4 |
|
Schwab Treasury Obligations Money Fund |