Form 497K
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Summary Prospectus |
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April 30, 2013 |
Schwab Value Advantage Money
Fund®
Ticker Symbol: Investor Shares: SWVXX
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 and SAI, both dated April 30, 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 the highest current income consistent with stability of capital and liquidity.
Fund fees and expenses
This table describes the fees and expenses you may pay if you buy and hold Investor Shares of the fund.
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Shareholder fees (fees paid
directly from your investment) |
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None |
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Annual fund operating expenses
(expenses that you pay each year as a % of the value of your investment) |
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Management fees |
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0.31 |
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Distribution (12b-1) fees |
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None |
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Other expenses |
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0.26 |
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Total annual fund operating expenses |
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0.57 |
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Less expense reduction |
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(0.12 |
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Total annual fund operating expenses after expense reduction1 |
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0.45 |
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1 |
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 Investor 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 Investor 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 positive net yield for the Investor Shares
(the voluntary yield waiver). As of the three-year period ended December 31, 2012, the investment adviser and/or its affiliates waived fees for the Investor Shares in the amount of $50,636,664 under the voluntary yield waiver. Any future
reimbursement of these previously waived fees made by the Investor Shares to the investment adviser and/or its affiliates may cause the total annual fund operating expenses of the Investor 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 yield waiver materially impact the total annual fund operating expenses of the Investor
Shares, this fee table will be amended to reflect that impact.
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This example is intended to help you compare the cost of investing in the funds Investor 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 Investor 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.
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Expenses on a $10,000 investment |
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1 year |
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3 years |
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5 years |
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10 years |
$46 |
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$144 |
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$252 |
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$567 |
Principal investment strategies
To pursue its goal, the fund invests in high-quality short-term money market investments issued by U.S. and foreign issuers, such as:
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commercial paper, including asset-backed commercial paper |
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certificates of deposit and time deposits |
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variable- and floating-rate debt securities |
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bank notes and bankers acceptances |
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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 and Freddie Mac (U.S. government securities) |
All of these investments will be
denominated in U.S. dollars, including those that are issued by foreign issuers. 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. Certain of the funds securities are subject to credit or liquidity enhancements, which are designed to provide incremental levels of creditworthiness or liquidity.
The fund may engage in repurchase agreement transactions that are collateralized by cash or U.S. government
securities. In addition,
the fund may engage in repurchase agreement transactions that are collateralized by money market instruments, debt
securities, loan participations or other securities, including equity securities and securities that are rated below investment grade or their unrated equivalents as determined by the investment adviser.
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. Some of these policies may be stricter than the federal regulations that apply to all money funds.
The
investment advisers credit research department analyzes and monitors the securities that the fund owns or is considering buying. The manager may adjust the funds holdings or its average maturity based on actual or anticipated changes in
interest rates or credit quality. To preserve its investors capital, the fund seeks to maintain a stable $1.00 share price.
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 Investor Shares make any reimbursement payments to the investment adviser and/or its affiliates, the Investor Sharess yield would
be lower.
Repurchase Agreements 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
(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 issuers 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 counterpartys default.
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 of a portfolio investment fails to make timely
principal or interest payments or if a guarantor, liquidity provider or counterparty of a
portfolio investment fails to 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, guarantor, liquidity provider or counterparty to make payments or
otherwise honor its obligations, as applicable, could also cause the price of that investment to decline. The credit quality of the funds portfolio holdings can change rapidly in certain market environments and any downgrade or default on the
part of a single portfolio investment could cause the funds share price or yield to fall.
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 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.
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.
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
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Summary Prospectus April 30, 2013 |
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Schwab Value Advantage Money Fund® |
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 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 bar chart below shows how the funds Investor Shares investment
results have varied from year to year, and the following table shows the funds Investor Shares average annual total returns for various periods. This information provides some indication of the risks of investing in the fund. All figures
assume distributions were reinvested. Keep in mind that future performance may differ from past performance. For current performance information, please see www.schwab.com/moneyfunds or call toll-free 1-800-435-4000 for a current seven-day
yield.
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Annual total returns (%) as of 12/31 |
Best quarter: 1.26% Q3 2007
Worst quarter: 0.00% Q4 2012
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Average annual total returns
(%) as of 12/31/12 |
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1 year |
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5 years |
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10 years |
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Investor Shares |
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0.01 |
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0.57 |
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1.71 |
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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.
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:
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by telephone at 1-800-407-0256; or |
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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 Investor Shares. These minimums may be waived for certain investors or in the funds
sole discretion.
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Minimum initial
investment |
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Minimum additional investments |
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Minimum
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$25,000 ($15,000 for IRA and custodial accounts) |
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500 |
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$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.
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Summary Prospectus April 30, 2013 |
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3 of 4 |
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Schwab Value Advantage Money Fund® |
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REG54670FLD-08 00093722 |
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Schwab Value Advantage Money Fund® Ticker Symbol: Investor Shares:
SWVXX |
Schwab Funds®
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Summary Prospectus April 30, 2013 |
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4 of 4 |
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Schwab Value Advantage Money Fund® |