Form 497K
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Summary Prospectus |
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February 28, 2014 |
Schwab Investor Money
Fund®
Ticker
Symbol: SWRXX
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 30, 2013 and SAI dated April 30, 2013, as supplemented October 4, 2013 and February 28, 2014, 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 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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0.34 |
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Distribution (12b-1) fees |
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None |
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Other expenses |
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0.29 |
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Total annual fund operating expenses |
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0.63 |
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This example is intended to help you compare the cost of investing in the fund 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 operating expenses remain the same. 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 |
$64 |
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$202 |
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$351 |
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$786 |
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.
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. Certain of the funds securities are subject to credit or liquidity enhancements, which are designed to provide incremental levels of creditworthiness or
liquidity.
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 fund makes any reimbursement payments
to the investment adviser and/or its affiliates, the funds 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 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 investment results have varied from year to year, and the following table shows the funds 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: 1.22% 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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Fund |
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0.01% |
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0.52% |
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1.57% |
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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.
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Set forth below are the investment minimums for the fund. 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 balance |
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Schwab Investor Money Fund® |
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Participants in Employer-Sponsored Retirement Plans (Trading symbol: SWRXX) |
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1 |
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1 |
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1 |
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Other Investors (Trading symbol: SW2XX) |
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2,500 |
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500 |
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2,500 |
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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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REG54657-10 00112448 |
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Schwab Investor Money Fund®; Ticker Symbol: SWRXX |