0001193125-17-296175.txt : 20170928 0001193125-17-296175.hdr.sgml : 20170928 20170927175757 ACCESSION NUMBER: 0001193125-17-296175 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20170928 DATE AS OF CHANGE: 20170927 EFFECTIVENESS DATE: 20170928 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHARLES SCHWAB FAMILY OF FUNDS CENTRAL INDEX KEY: 0000857156 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 033-31894 FILM NUMBER: 171105136 BUSINESS ADDRESS: STREET 1: 211 MAIN STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 1-415-667-7000 MAIL ADDRESS: STREET 1: 211 MAIN STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 FORMER COMPANY: FORMER CONFORMED NAME: SCHWAB CHARLES FAMILY OF FUNDS DATE OF NAME CHANGE: 19920703 0000857156 S000004499 Schwab Money Market Fund C000012373 Sweep Shares SWMXX 0000857156 S000004500 Schwab AMT Tax-Free Money Fund C000012374 Sweep Shares SWFXX C000039063 Value Advantage Shares SWWXX 0000857156 S000004504 Schwab Cash Reserves C000012378 Sweep Shares SWSXX 0000857156 S000004505 Schwab Advisor Cash Reserves C000012379 Sweep Shares SWQXX C000012380 Premier Sweep Shares SWZXX 0000857156 S000004506 Schwab Government Money Fund C000012381 Sweep Shares SWGXX C000151955 Purchased Shares SNVXX 0000857156 S000004507 Schwab U.S. Treasury Money Fund C000012382 Sweep Shares SWUXX 0000857156 S000004508 Schwab Value Advantage Money Fund C000012383 Investor Shares SWVXX C000012384 Select Shares SWBXX C000012385 Premier Shares SWAXX C000038267 Ultra Shares SNAXX 0000857156 S000004509 Schwab Retirement Advantage Money Fund C000012386 Schwab Retirement Advantage Money Fund SWIXX 0000857156 S000004510 Schwab Investor Money Fund C000012387 Schwab Investor Money Fund SWRXX 0000857156 S000004511 Schwab Municipal Money Fund C000012388 Sweep Shares SWXXX C000012389 Value Advantage Shares SWTXX C000012390 Select Shares SWLXX C000012391 Premier Shares SWOXX 0000857156 S000004512 Schwab California Municipal Money Fund C000012392 Sweep Shares SWCXX C000012393 Value Advantage Shares SWKXX 0000857156 S000004513 Schwab New York Municipal Money Fund C000012394 Sweep Shares SWNXX C000012395 Value Advantage Shares SWYXX 0000857156 S000036659 Schwab Treasury Obligations Money Fund C000112046 Value Advantage Shares SNOXX C000112047 Sweep Shares SNTXX 0000857156 S000052458 Schwab Variable Share Price Money Fund C000164902 Ultra Shares SVUXX C000164903 Premier Shares SVRXX C000164904 Select Shares SVCXX C000164905 Investor Shares SVOXX 0000857156 S000053802 Schwab Retirement Government Money Fund C000169257 Schwab Retirement Government Money Fund SNRXX 497 1 d460664d497.htm 497 497
Table of Contents

THE CHARLES SCHWAB FAMILY OF FUNDS

Supplement dated September 28, 2017 to the

Schwab Money Funds Prospectus dated April 28, 2017

Supplement dated September 28, 2017 to the

Schwab Money Funds – Sweep Investments Prospectus dated April 28, 2017

Supplement dated September 28, 2017 to the

Schwab Municipal Money Funds Prospectus dated April 28, 2017

Supplement dated September 28, 2017 to the

Schwab Municipal Money Funds – Sweep Investments Prospectus dated April 28, 2017

Supplement dated September 28, 2017 to the

Schwab Advisor Cash Reserves Prospectus dated April 28, 2017

Supplement dated September 28, 2017 to the

Schwab Variable Share Price Money Fund Prospectus dated April 28, 2017

 

 

This supplement provides new and additional information beyond that contained in

each Prospectus and should be read in conjunction with each Prospectus.


Table of Contents

TABLE OF CONTENTS

 

SCHWAB MONEY FUNDS

  

Name Change for Certain Share Classes of Certain Funds

     1  

Reduction of Investment Minimums

     1  

Reduction of Shareholder Servicing Fees for Certain Funds

     2  

Change in Investor Eligibility Requirements for Placing Direct Orders

     2  

Reduction/Implementation of Operating Expenses Limit

     3  

Schwab Investor Money Fund®

     3  

Schwab Retirement Advantage Money Fund®

     4  

Schwab Value Advantage Money Fund® – Investor Shares, Select Shares®, Premier Shares and Ultra Shares

     5  

Schwab Government Money FundTM – Investor Shares

     6  

Schwab Treasury Obligations Money FundTM – Investor Shares

     7  

Schwab Retirement Government Money FundTM

     8  

SCHWAB MONEY FUNDS – SWEEP INVESTMENTS

  

Reduction of Shareholder Servicing Fees

     9  

Reduction/Implementation of Operating Expenses Limit

     10  

Schwab Cash ReservesTM

     10  

Schwab Money Market FundTM

     11  

Schwab Government Money FundTM – Sweep Shares

     12  

Schwab Treasury Obligations Money FundTM – Sweep Shares

     13  

Schwab U.S. Treasury Money FundTM

     14  

SCHWAB MUNICIPAL MONEY FUNDS

  

Name Change for Certain Share Classes of Certain Funds

     15  

Reduction of Investment Minimums

     15  

Reduction of Shareholder Servicing Fees

     15  

Change in Investor Eligibility Requirements for Placing Direct Orders

     16  

Reduction/Implementation of Operating Expenses Limit

     17  

Schwab AMT Tax-Free Money FundTM – Investor Shares

     17  

Schwab Municipal Money FundTM – Investor Shares, Select Shares®, Ultra Shares

     18  

Schwab California Municipal Money FundTM – Investor Shares

     19  

Schwab New York Municipal Money FundTM – Investor Shares

     20  

SCHWAB MUNICIPAL MONEY FUNDS – SWEEP INVESTMENTS

  

Reduction of Shareholder Servicing Fees

     21  

Reduction/Implementation of Operating Expenses Limit

     22  

Schwab AMT Tax-Free Money FundTM – Sweep Shares

     22  

Schwab Municipal Money FundTM – Sweep Shares

     23  

Schwab California Municipal Money FundTM – Sweep Shares

     24  

Schwab New York Municipal Money FundTM – Sweep Shares

     25  

SCHWAB ADVISOR CASH RESERVES

  

Reduction of Shareholder Servicing Fees

     26  

Reduction/Implementation of Operating Expenses Limit

     27  

Schwab Advisor Cash Reserves® – Sweep Shares

     27  

Schwab Advisor Cash Reserves® – Premier Sweep Shares

     27  

SCHWAB VARIABLE SHARE PRICE MONEY FUND

  

Discontinuation of Premier Shares and Select Shares (currently not offered for sale)

     28  

Reduction of Investment Minimums

     28  

Reduction of Shareholder Servicing Fees

     28  

Change in Investor Eligibility Requirements for Placing Direct Orders

     29  

Reduction/Implementation of Operating Expenses Limit

     29  

Schwab Variable Share Price Money FundTM – Ultra Shares

     29  

Schwab Variable Share Price Money FundTM – Investor Shares

     30  


Table of Contents

SCHWAB MONEY FUNDS

1.     Name Change for Certain Share Classes of Certain Funds

Effective October 3, 2017, the following fund share classes will change their name:

 

   

OLD NAME

 

NEW NAME

   
Schwab Government Money Fund – Purchased Shares   Schwab Government Money Fund – Investor Shares
   
Schwab Treasury Obligations Money Fund – Value Advantage Shares   Schwab Treasury Obligations Money Fund – Investor Shares

2.     Reduction of Investment Minimums

Effective October 3, 2017, the minimum initial investment, minimum additional investments and minimum balance requirements will be reduced. Accordingly, the “Investment Minimums” section on page 34 of the Prospectus is deleted and replaced in its entirety with the following:

Investment Minimums

Choose a fund and a share class. Your choice may depend on the amount of your investment. Schwab Value Advantage Money Fund offers four classes of shares. You may convert your Investor Shares into Select Shares, Premier Shares or Ultra Shares at any time if your account balance in the fund is at least $1,000,000. You must contact the fund, Schwab or your other intermediary to request an interclass exchange of your shares - conversion is not automatic. If you no longer meet the minimum balance requirement for Select Share, Premier Share and Ultra Shares, a fund reserves the right to (i) convert your holdings to another class of shares of the same fund for which you meet the minimum balance requirement; or (ii) redeem your holdings. A fund will notify you in writing 60 days before any automatic conversion or redemption occurs. Not all share classes may be available through financial intermediaries other than Charles Schwab & Co., Inc.

 

     

Minimum

Initial

Investment

   Minimum
Additional
Investments
  

Minimum

Balance

Schwab Investor Money Fund

   None    None    None

Schwab Retirement Advantage Money Fund

   None    None    None

Schwab Value Advantage Money Fund

        

Investor Shares

   None    None    None

Select Shares

   $1,000,000    $1    $1,000,000

Premier Shares

   $1,000,000    $1    $1,000,000

Ultra Shares

   $1,000,000    $1    $1,000,000

Schwab Government Money Fund

        

Investor Shares

   None    None    None

Schwab Treasury Obligations Money Fund

        

Investor Shares

   None    None    None

Schwab Retirement Government Money Fund

   $1,000,000    $1    $1,000,000

These minimums may be waived for certain retirement plans and plan participants, and for certain investment programs, or in a fund’s sole discretion. In addition, a fund, in its sole discretion, may permit an investor to aggregate accounts to meet the minimum investment amounts or to meet the minimum investment amounts over a reasonable period of time.

 

1


Table of Contents

3.     Reduction of Shareholder Servicing Fees for Certain Funds

Effective October 3, 2017, certain funds’ shareholder servicing fee will be reduced. Accordingly, the “Shareholder Servicing and Sweep Administration Plan” section on page 36 of the Prospectus is deleted and replaced in its entirety with the following:

Shareholder Servicing and Sweep Administration Plan

The Board of Trustees 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 financial intermediaries, including Charles Schwab & Co., Inc. (Schwab) (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee, up to the amount in the table below. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds), and a fund will pay no more than the amount in the table below of the fund shares owned by shareholders holding shares through such service provider. Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.

 

Fund   Shareholder Servicing Fee

Schwab Investor Money Fund

  0.15%

Schwab Retirement Advantage Money Fund

  0.15%

Schwab Value Advantage Money Fund – Investor Shares

  0.15%

Schwab Value Advantage Money Fund – Select Shares

  0.00%

Schwab Value Advantage Money Fund – Premier Shares

  0.00%

Schwab Value Advantage Money Fund – Ultra Shares

  0.00%

Schwab Government Money Fund – Investor Shares

  0.15%

Schwab Treasury Obligations Money Fund – Investor Shares

  0.15%

4.     Change in Investor Eligibility Requirements for Placing Direct Orders for Certain Funds

Effective October 2, 2017, new Eligible Investors (as determined by each fund) may only invest in a fund through an account at Schwab or another financial intermediary. When you place orders to purchase, exchange or redeem fund shares through Schwab or another financial intermediary, you must follow Schwab’s or the other financial intermediary’s transaction procedures. Eligible Investors who purchased fund shares prior to October 2, 2017 and hold such shares directly through the fund’s transfer agent may make additional purchases and place exchange and redemption orders through the fund’s transfer agent.

 

2


Table of Contents

5.     Reduction/Implementation of Operating Expenses Limit

SCHWAB INVESTOR MONEY FUND

 

Effective October 3, 2017, Charles Schwab Investment Management, Inc. (CSIM or the investment adviser) and its affiliates have agreed to limit the total annual fund operating expenses as follows:

 

Total Annual Fund

Operating Expenses as stated

in the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated

in the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expense Limit

as of October 3, 2017

     

0.65%

  N/A   0.35%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 1 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold 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

     0.35  

Distribution (12b-1) fees

     None  

Other expenses*

     0.20  
  

 

 

 

Total annual fund operating expenses

     0.55  

Less expense reduction

     (0.20)  
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.35  

*Other expenses have been restated to reflect current fees and expenses.

 

**The investment adviser and its affiliates have agreed to limit the fund’s total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) to 0.35% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

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 fund’s 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

 

1 Year   3 Years   5 Years   10 Years
$36   $113   $197   $443

 

3


Table of Contents

SCHWAB RETIREMENT ADVANTAGE MONEY FUND

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated

in the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated

in the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

0.49%

  0.49%   0.35%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 5 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold 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

     0.35  

Distribution (12b-1) fees

     None  

Other expenses*

     0.21  
  

 

 

 

Total annual fund operating expenses

     0.56  

Less expense reduction

     (0.21)  
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.35  

*Other expenses have been restated to reflect current fees and expenses.

 

**The investment adviser and its affiliates have agreed to limit the fund’s total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) to 0.35% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

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 fund’s 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

 

1 Year   3 Years   5 Years   10 Years
$36   $113   $197   $443

 

4


Table of Contents

SCHWAB VALUE ADVANTAGE MONEY FUND – INVESTOR SHARES, SELECT SHARES, PREMIER SHARES AND ULTRA SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Investor Shares, Select Shares, Premier Shares and Ultra Shares will be reduced as follows:

 

   

Total Annual Fund

Operating Expenses After

Expense Reduction as

stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the

Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

Investor Shares

  0.45%   0.45%   0.35%

Select Shares

  0.35%   0.35%   0.19%

Premier Shares

  0.24%   0.24%   0.19%

Ultra Shares

  0.21%   0.21%   0.19%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 9 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Investor Shares, Select Shares, Premier Shares or Ultra Shares of the fund.

 

Shareholder Fees (fees paid directly from your investment)

 

    Investor
Shares
    Select
Shares
    Premier
Shares
    Ultra
Shares
 
    None       None       None       None  

Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment)

 

Management fees

    0.32       0.32       0.32       0.32  

Distribution (12b-1) fees

    None       None       None       None  

Other expenses*

    0.16       0.01       0.01       0.01  
 

 

 

 

Total annual fund operating expenses

    0.48       0.33       0.33       0.33  

Less expense reduction

    (0.13     (0.14     (0.14     (0.14
 

 

 

 

Total annual fund operating expenses after expense

reduction**

    0.35       0.19       0.19       0.19  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 each share class to 0.35% for Investor Shares and 0.19% for Select Shares, Premier Shares and Ultra Shares for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in each share class with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in a share class 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 fund’s 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

 

      1 Year    3 Years    5 Years    10 Years

Investor Shares

   $36    $113    $197    $443

Select Shares

   $19    $ 61    $107    $243

Premier Shares

   $19    $ 61    $107    $243

Ultra Shares

   $19    $ 61    $107    $243

 

5


Table of Contents

SCHWAB GOVERNMENT MONEY FUND – INVESTOR SHARES

    (FORMERLY, PURCHASED SHARES)

 

Effective October 3, 2017, the investment adviser and its affiliates have agreed to limit the total annual fund operating expenses of the fund’s Investor Shares as follows:

 

Total Annual Fund

Operating Expenses as stated

in the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as of

October 3, 2017

0.55%

  N/A   0.35%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 13 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Investor 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

     0.30  

Distribution (12b-1) fees

     None  

Other expenses*

     0.15  
  

 

 

 

Total annual fund operating expenses

     0.45  

Less expense reduction

     (0.10
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.35  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 0.35% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s 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.

Expenses on a $10,000 investment

 

1 Year   3 Years   5 Years   10 Years
$36   $113   $197   $443

 

6


Table of Contents

SCHWAB TREASURY OBLIGATIONS MONEY FUND – INVESTOR SHARES

    (FORMERLY, VALUE ADVANTAGE SHARES)

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Investor Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

     

0.45%

  0.45%   0.35%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 16 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Investor 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*

     0.17  
  

 

 

 

Total annual fund operating expenses

     0.51  

Less expense reduction

     (0.16
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.35  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 0.35% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s 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.

Expenses on a $10,000 investment

 

1 Year   3 Years   5 Years   10 Years
$36   $113   $197   $443

 

7


Table of Contents

SCHWAB RETIREMENT GOVERNMENT MONEY FUND

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

     

0.20%

  0.20%   0.19%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 19 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold 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

     0.35  

Distribution (12b-1) fees

     None  

Other expenses*

     0.08  
  

 

 

 

Total annual fund operating expenses

     0.43  

Less expense reduction

     (0.24
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.19  

*Other expenses have been restated to reflect current fees and expenses.

 

**The investment adviser and its affiliates have agreed to limit the fund’s total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) to 0.19% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

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 fund’s 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

 

1 Year   3 Years   5 Years   10 Years
$19   $61   $107   $243

 

8


Table of Contents

SCHWAB MONEY FUNDS – SWEEP INVESTMENTS

1.     Reduction of Shareholder Servicing Fees

Effective October 3, 2017, the minimum shareholder servicing fee will be reduced. Accordingly, the “Shareholder Servicing and Sweep Administration Plan” section on page 26 of the Prospectus is deleted and replaced in its entirety with the following:

Shareholder Servicing and Sweep Administration Plan

The Board of Trustees has adopted a Shareholder Servicing and Sweep Administration Plan (the Plan) on behalf of the fund’s sweep shares are subject to an annual shareholder servicing fee of up to 0.15%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds), and a fund will pay no more than 0.15% of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service provider. Pursuant to the Plan, each fund’s sweep shares are subject to an annual sweep administration fee of up to 0.15%. The sweep 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 without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.

 

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2.     Reduction/Implementation of Operating Expenses Limits

SCHWAB CASH RESERVES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

     

0.66%

  0.66%   0.61%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 1 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold 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

     0.29  

Distribution (12b-1) fees

     None  

Other expenses*

     0.31  
  

 

 

 

Total annual fund operating expenses**

     0.60  

*Other expenses have been restated to reflect current fees and expenses.

 

**The investment adviser and its affiliates have agreed to limit the fund’s total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) to 0.61% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

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 fund’s operating expenses remain the same. The figures are based on total annual fund operating expenses. 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

 

1 Year   3 Years   5 Years   10 Years
$61   $192   $335   $750

 

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SCHWAB MONEY MARKET FUND

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

0.71%

  0.71%   0.66%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 5 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold 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

     0.32  

Distribution (12b-1) fees

     None  

Other expenses*

     0.31  
  

 

 

 

Total annual fund operating expenses**

     0.63  

*Other expenses have been restated to reflect current fees and expenses.

 

**The investment adviser and its affiliates have agreed to limit the fund’s total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) to 0.66% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

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 fund’s operating expenses remain the same. The figures are based on total annual fund operating expenses. 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

 

1 Year   3 Years   5 Years   10 Years
$64   $202   $351   $786

 

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Table of Contents

SCHWAB GOVERNMENT MONEY FUND – SWEEP SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as of

October 3, 2017

     

0.71%

  0.75%   0.70%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 9 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Sweep 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

     0.30  

Distribution (12b-1) fees

     None  

Other expenses*

     0.31  
  

 

 

 

Total annual fund operating expenses**

     0.61  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 Sweep Shares to 0.70% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s Sweep 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 fund’s Sweep Shares operating expenses remain the same. The figures are based on total annual fund operating expenses. 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

 

1 Year   3 Years   5 Years   10 Years
$62   $195   $340   $762

 

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SCHWAB TREASURY OBLIGATIONS MONEY FUND – SWEEP SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as of

October 3, 2017

     

0.65%

  0.65%   0.60%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 12 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Sweep 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*

     0.33  
  

 

 

 

Total annual fund operating expenses

     0.67  

Less expense reduction

     (0.07
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.60  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 Sweep Shares to 0.60% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s Sweep 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 fund’s Sweep 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

 

1 Year   3 Years   5 Years   10 Years
$61   $192   $335   $750

 

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Table of Contents

SCHWAB U.S. TREASURY MONEY FUND

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as of

October 3, 2017

     

0.60%

  0.60%   0.55%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 15 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold 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

     0.31  

Distribution (12b-1) fees

     None  

Other expenses*

     0.31  
  

 

 

 

Total annual fund operating expenses

     0.62  

Less expense reduction

     (0.07
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.55  

*Other expenses have been restated to reflect current fees and expenses.

 

**The investment adviser and its affiliates have agreed to limit the fund’s total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) to 0.55% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

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 fund’s 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

 

1 Year   3 Years   5 Years   10 Years
$56   $176   $307   $689

 

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Table of Contents

SCHWAB MUNICIPAL MONEY FUNDS

1.     Name Change for Certain Share Classes of Certain Funds

Effective October 3, 2017, the following share class will change their name:

 

   

OLD NAME

 

NEW NAME

Schwab AMT-Tax Free Money Fund – Value Advantage Shares   Schwab AMT-Tax Free Money Fund – Investor
Shares
Schwab Municipal Money Fund – Value Advantage Shares   Schwab Municipal Money Fund – Investor Shares

Schwab Municipal Money Fund – Premier Shares

  Schwab Municipal Money Fund – Ultra Shares
Schwab California Municipal Money Fund – Value Advantage Shares   Schwab California Municipal Money Fund – Investor Shares
Schwab New York Municipal Money Fund – Value Advantage Shares   Schwab New York Municipal Money Fund – Investor Shares

2.     Reduction of Investment Minimums

Effective October 3, 2017, the minimum initial investment, minimum additional investments and minimum balance requirements will be reduced. Accordingly, the “Investment Minimums” section on Page 27-28 of the Prospectus is deleted and replaced in its entirety with the following:

Investment Minimums

Choose a fund and a share class. Your choice may depend on the amount of your investment. Certain funds have more than one share class, one or more of which are offered in this prospectus. You may convert your Investor Shares into Select Shares or Ultra Shares at any time if your account balance in the fund is at least $1,000,000. You must contact the fund, Schwab or your other intermediary to request an interclass exchange of your shares - conversion is not automatic. If you no longer meet the minimum balance requirement for Select Shares or Ultra Shares, a fund reserves the right to (i) convert your holdings to another class of shares of the same fund for which you meet the minimum balance requirement; or (ii) redeem your holdings.

 

     

Minimum

Initial

Investment

     Minimum
Additional
Investments
    

Minimum

Balance

Schwab AMT Tax-Free Money Fund

            

Investor Shares

   None      None      None

Schwab Municipal Money Fund

            

Investor Shares

   None      None      None

Select Shares

   $1,000,000      $1      $1,000,000

Ultra Shares

   $1,000,000      $1      $1,000,000

Schwab California Municipal Money Fund

            

Investor Shares

   None      None      None

Schwab New York Municipal Money Fund

            

Investor Shares

   None      None      None

3.     Reduction of Shareholder Servicing Fees

Effective October 3, 2017, the minimum shareholder servicing fee will be reduced. Accordingly, the “Shareholder Servicing and Sweep Administration Plan” section on page 29 of the Prospectus is deleted and replaced in its entirety with the following:

Shareholder Servicing and Sweep Administration Plan

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 financial intermediaries, including Schwab (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds.

 

15


Table of Contents

Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee up to the amount in the table below. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds), and a fund will pay no more than the amount in the table below, calculated based on the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service provider. Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.

 

Fund    Shareholder Servicing Fee

Schwab AMT Tax-Free Money Fund – Investor Shares

   0.15%

Schwab Municipal Money Fund – Investor Shares

   0.15%

Schwab Municipal Money Fund – Select Shares

   0.00%

Schwab Municipal Money Fund – Ultra Shares

   0.00%

Schwab California Municipal Money Fund – Investor Shares

   0.15%

Schwab New York Municipal Money Fund – Investor Shares

   0.15%

4.     Change in Investor Eligibility Requirements for Placing Direct Orders

Effective October 2, 2017, new Eligible Investors (as determined by each fund) may only invest in a fund through an account at Schwab or another financial intermediary. When you place orders to purchase, exchange or redeem fund shares through Schwab or another financial intermediary, you must follow Schwab’s or the other financial intermediary’s transaction procedures. Eligible Investors who purchased fund shares prior to October 2, 2017 and hold such shares directly through the fund’s transfer agent may make additional purchases and place exchange and redemption orders through the fund’s transfer agent.

 

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Table of Contents

5.     Reduction/Implementation of Operating Expenses Limits

SCHWAB AMT TAX-FREE MONEY FUND – INVESTOR SHARES

    (FORMERLY, VALUE ADVANTAGE SHARES)

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Investor Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as of

October 3, 2017

0.45%

  0.45%   0.35%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 1 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Investor 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

     0.33  

Distribution (12b-1) fees

     None  

Other expenses*

     0.17  
  

 

 

 

Total annual fund operating expenses

     0.50  

Less expense reduction

     (0.15
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.35  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 0.35% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s 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 fund’s 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.

Expenses on a $10,000 investment

 

1 Year   3 Years   5 Years   10 Years
$36   $113   $197   $443

 

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Table of Contents

SCHWAB MUNICIPAL MONEY FUND – INVESTOR SHARES (FORMERLY, VALUE ADVANTAGE SHARES), SELECT SHARES AND ULTRA SHARES (FORMERLY, PREMIER SHARES)

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Investor Shares, Select Shares and Ultra Shares will be reduced as follows:

 

   

Total Annual Fund

Operating Expenses After

Expense Reduction as

stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the

Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

Investor Shares

  0.45%   0.45%   0.35%

Select Shares

  0.35%   0.35%   0.19%

Ultra Shares

  0.24%   0.24%   0.19%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 5 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Investor Shares, Select Shares and Ultra Shares of the fund.

 

Shareholder Fees (fees paid directly from your investment)

 

     Investor
Shares
     Select
Shares
     Ultra
Shares
 
     None        None        None  

Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment)

 

Management fees

     0.32        0.32        0.32  

Distribution (12b-1) fees

     None        None        None  

Other expenses*

     0.16        0.01        0.01  
  

 

 

 

Total annual fund operating expenses

     0.48        0.33        0.33  

Less expense reduction

     (0.13      (0.14      (0.14
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.35        0.19        0.19  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 each share class to 0.35% for Investor Shares and 0.19% for Select Shares and Ultra Shares for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in each share class with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in a share class 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 fund’s 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

 

      1 Year    3 Years    5 Years    10 Years

Investor Shares

   $36    $113    $197    $443

Select Shares

   $19    $61    $107    $243

Ultra Shares

   $19    $61    $107    $243

 

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Table of Contents

SCHWAB CALIFORNIA MUNCIPAL MONEY FUND – INVESTOR SHARES

    (FORMERLY, VALUE ADVANTAGE SHARES)

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Investor Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as of

October 3, 2017

0.45%

  0.45%   0.35%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 9 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Investor 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

     0.32  

Distribution (12b-1) fees

     None  

Other expenses*

     0.16  
  

 

 

 

Total annual fund operating expenses

     0.48  

Less expense reduction

     (0.13
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.35  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 0.35% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s 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 fund’s 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.

Expenses on a $10,000 investment

 

1 Year   3 Years   5 Years   10 Years
$36   $113   $197   $443

 

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Table of Contents

SCHWAB NEW YORK MUNCIPAL MONEY FUND – INVESTOR SHARES

    (FORMERLY, VALUE ADVANTAGE SHARES)

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Investor Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as of

October 3, 2017

0.45%

  0.45%   0.35%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 13 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Investor 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*

     0.17  
  

 

 

 

Total annual fund operating expenses

     0.51  

Less expense reduction

     (0.16
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.35  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 0.35% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s 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 fund’s 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.

Expenses on a $10,000 investment

 

1 Year   3 Years   5 Years   10 Years
$36   $113   $197   $443

 

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SCHWAB MUNICIPAL MONEY FUNDS – SWEEP INVESTMENTS

1.     Reduction of Shareholder Servicing Fees

Effective October 3, 2017, the minimum shareholder servicing fee will be reduced. Accordingly, the “Shareholder Servicing and Sweep Administration Plan” section on page 39 of the Prospectus is deleted and replaced in its entirety with the following:

Shareholder Servicing and Sweep Administration Plan

The Board of Trustees 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 financial intermediaries, including Schwab (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. The Plan also enables the funds to pay Schwab for certain sweep administration services, such as processing of automatic purchases and redemptions, it provides to fund shareholders invested in the funds.

Pursuant to the Plan, each fund’s Sweep Shares are subject to an annual shareholder servicing fee of up to 0.15%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds), and a fund will pay no more than 0.15% of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service provider. Pursuant to the Plan, each fund’s Sweep Shares are subject to an annual sweep administration fee of up to 0.15%. The sweep 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 without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.

 

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Table of Contents

2.     Reduction/Implementation of Operating Expenses Limits

SCHWAB AMT TAX-FREE MONEY FUND – SWEEP SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

     

0.62%

  0.62%   0.57%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 1 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Sweep 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

     0.33  

Distribution (12b-1) fees

     None  

Other expenses*

     0.27  
  

 

 

 

Total annual fund operating expenses

     0.60  

Less expense reduction

     (0.03
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.57  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 Sweep Shares to 0.57% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s Sweep 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 fund’s Sweep 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

 

1 Year   3 Years   5 Years   10 Years
$58   $183   $318   $714

 

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Table of Contents

SCHWAB MUNICIPAL MONEY FUND – SWEEP SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

     

0.62%

  0.62%   0.57%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 5 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Sweep 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

     0.32  

Distribution (12b-1) fees

     None  

Other expenses*

     0.26  
  

 

 

 

Total annual fund operating expenses

     0.58  

Less expense reduction

     (0.01
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.57  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 Sweep Shares to 0.57% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s Sweep 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 fund’s Sweep 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

 

1 Year   3 Years   5 Years   10 Years
$58   $183   $318   $714

 

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Table of Contents

SCHWAB CALIFORNIA MUNICIPAL MONEY FUND – SWEEP SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

     

0.60%

  0.60%   0.55%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 9 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Sweep 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

     0.32  

Distribution (12b-1) fees

     None  

Other expenses*

     0.26  
  

 

 

 

Total annual fund operating expenses

     0.58  

Less expense reduction

     (0.03
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.55  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 Sweep Shares to 0.55% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s Sweep 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 fund’s Sweep 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

 

1 Year   3 Years   5 Years   10 Years
$56   $176   $307   $689

 

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Table of Contents

SCHWAB NEW YORK MUNICIPAL MONEY FUND – SWEEP SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses After

Expense Reduction as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as stated in

the Prospectus dated

April 28, 2017

 

Total Annual Fund Operating

Expenses Limit as of

October 3, 2017

     

0.65%

  0.65%   0.60%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 21 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Sweep 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*

     0.27  
  

 

 

 

Total annual fund operating expenses

     0.61  

Less expense reduction

     (0.01
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.60  

*Other expenses have been restated to reflect current fees and expenses.

 

**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 Sweep Shares to 0.60% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the fund’s Sweep 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 fund’s Sweep 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

 

1 Year   3 Years   5 Years   10 Years
$61   $192   $335   $750

 

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Table of Contents

SCHWAB ADVISOR CASH RESERVES

1.     Reduction of Shareholder Servicing Fees

Effective October 3, 2017, the minimum shareholder servicing fee will be reduced. Accordingly, the “Shareholder Servicing and Sweep Administration Plan” section on page 10 of the Prospectus is deleted and replaced in its entirety with the following:

Shareholder Servicing and Sweep Administration Plan

The Board of Trustees 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 financial intermediaries, including Schwab (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the fund. 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.

Pursuant to the Plan, the fund’s Sweep Shares and Premier Sweep Shares are each subject to an annual shareholder servicing fee of up to 0.15%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the fund (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the fund), and the fund will pay no more than 0.15% of the average annual daily net asset value of a class’ shares owned by shareholders holding shares through such service provider. Pursuant to the Plan, the fund’s Sweep Shares and Premier Sweep Shares are each subject to an annual sweep administration fee of up to 0.15%. The sweep administration fee paid to Schwab is based on the average daily net asset value of a class’ shares owned by shareholders holding shares through Schwab. Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.

 

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Table of Contents

2.     Reduction/Implementation of Operating Expenses Limits

SCHWAB ADVISOR CASH RESERVES – SWEEP SHARES AND PREMIER SWEEP SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Sweep Shares and Premier Sweep Shares will be reduced as follows:

 

   

Total Annual Fund

Operating Expenses

After Expense Reduction

as stated in the

Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the

Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

     

Sweep Shares

  0.66%   0.66%   0.61%

Premier Sweep Shares

  0.59%   0.59%   0.54%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 1 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Sweep Shares and Premier Sweep Shares of the fund.

 

Shareholder Fees (fees paid directly from your investment)

  Sweep Shares   Premier Sweep Shares
  None   None

Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment)

Management fees

  0.31   0.31

Distribution (12b-1) fees

  None   None

Other expenses*

  0.31   0.31
 

 

Total annual fund operating expenses

  0.62   0.62

Less expense reduction

  (0.01)   (0.08)
 

 

Total annual fund operating expenses after expense reduction**

  0.61   0.54

*Other expenses have been restated to reflect current fees and expenses.

**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 Sweep Shares and Premier Sweep Shares to 0.61% and 0.54% respectively, for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

Example

This example is intended to help you compare the cost of investing in the fund’s Sweep Shares and Premier Sweep Shares with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the applicable share class 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 each share class’ 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

 

      1 Year    3 Years    5 Years    10 Years

Sweep Shares

   $61    $195    $340    $762

Premier Sweep Shares

   $55    $173    $302    $677

 

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Table of Contents

SCHWAB VARIABLE SHARE PRICE MONEY FUND

1.     Discontinuation of Premier Shares and Select Shares (currently not offered for sale)

Effective October 3, 2017, the Schwab Variable Share Price Money Fund’s Premier Shares and Select Shares are terminated. Accordingly, all references to the Premier Shares and Select Shares will be deleted from the prospectus.

2.     Reduction of Investment Minimums

Effective October 3, 2017, the minimum initial investment, minimum additional investments and minimum balance requirements will be reduced. Accordingly, the “Investment Minimums” section on page 23 of the Prospectus is deleted and replaced in its entirety with the following:

Investment minimums

Choose a fund and a share class. Your choice may depend on the amount of your investment. The fund has two share classes. Each share class has different minimum investments and different expenses. You may convert your Investor Shares into Ultra Shares at any time if your account balance in the fund is at least $1,000,000. You must contact the fund, Schwab or your other intermediary to request an interclass exchange of your shares – conversion is not automatic. If you no longer meet the minimum balance requirement for Ultra Shares, the fund reserves the right to (i) convert your holdings to another class of shares for which you meet the minimum balance requirement; or (ii) redeem your holdings. The fund will notify you in writing 60 days before any automatic conversion or redemption occurs. Not all share classes may be available through financial intermediaries other than Schwab.

 

     

Minimum

Initial

Investment

   Minimum
Additional
Investments
  

Minimum

Balance

Ultra Shares

   $1,000,000    $1    $1,000,000

Investor Shares

   None    None    None

The minimums may be waived for certain retirement plans and plan participants, and for certain investment programs, or in the fund’s sole discretion. In addition, the fund, in its sole discretion, may permit an investor to aggregate accounts to meet the minimum investment amounts or to meet the minimum investment amounts over a reasonable period of time.

Investor Shares are not currently available for purchase.

3.     Reduction of Shareholder Servicing Fees

Effective October 3, 2017, the minimum shareholder servicing fee will be reduced. Accordingly, the “Shareholder Servicing and Sweep Administration Plan” section on page 25 of the Prospectus is deleted and replaced in its entirety with the following:

Shareholder Servicing and Sweep Administration Plan

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 financial intermediaries, including Schwab, of certain account maintenance, customer liaison and shareholder services to the current shareholders of the fund. Pursuant to the Plan, the fund’s shares are subject to an annual shareholder servicing fee up to the amount in the table below. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab as distributor of the fund (or, in the case of payments made to Schwab acting as service provider, pursuant to Schwab’s written agreement with the fund) and the fund will pay no more than the amount in the table below, calculated based on the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service provider. Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.

 

Share Class   Shareholder Servicing Fee

Ultra Shares

  0.00%

Investor Shares

  0.15%

 

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Table of Contents

4.     Change in Investor Eligibility Requirements for Placing Direct Orders

Effective October 2, 2017 new investors may only invest in the fund through an account at Schwab or another financial intermediary. When you place orders to purchase, exchange or redeem fund shares through an account at Schwab or another financial intermediary, you must follow Schwab’s or the other financial intermediary’s transaction procedures. Investors who purchased fund shares prior to October 2, 2017 and hold such shares directly through the fund’s transfer agent may make additional purchases and place exchange and redemption orders through the fund’s transfer agent.

5.     Reduction/Implementation of Operating Expenses Limit

SCHWAB VARIABLE SHARE PRICE MONEY FUND – ULTRA SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Ultra Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses as stated

in the Prospectus dated

April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as stated in the Prospectus

dated April 28, 2017

 

Total Annual Fund

Operating Expenses Limit

as of October 3, 2017

     

0.21%

  0.21%   0.19%

Accordingly, the “Fund Fees and Expenses” section and “Example” section on page 1 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Ultra 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

   0.35

Distribution (12b-1) fees

   None

Other expenses*

   0.07
  

 

Total annual fund operating expenses

   0.42

Less expense reduction

   (0.23)
  

 

Total annual fund operating expenses after expense reduction**

   0.19

*Other expenses have been restated to reflect current fees and expenses.

**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 Ultra Shares to 0.19% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

Example

This example is intended to help you compare the cost of investing in the Ultra Shares with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Ultra Shares 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 Ultra 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

 

1 Year   3 Years   5 Years   10 Years
$19   $61   $107   $243

 

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Table of Contents

SCHWAB VARIABLE SHARE PRICE MONEY FUND – INVESTOR SHARES

 

Effective October 3, 2017, the contractual expense limitation of the investment adviser and its affiliates on the total annual fund operating expenses of the fund’s Investor Shares will be reduced as follows:

 

Total Annual Fund

Operating Expenses as stated in

the Prospectus dated

April 28, 2017

  

Total Annual Fund Operating

Expenses Limit as stated in

the Prospectus dated

April 28, 2017

  

Total Annual Fund Operating

Expenses Limit as of

October 3, 2017

     

0.45%

   0.45%    0.35%

Accordingly, the “Fund fees and expenses” section and “Example” section on page 1 of the Prospectus are deleted and replaced in their entirety with the following:

Fund Fees and Expenses

This table describes the fees and expenses you may pay if you buy and hold Investor 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

     0.35  

Distribution (12b-1) fees

     None  

Other expenses*

     0.22  
  

 

 

 

Total annual fund operating expenses

     0.57  

Less expense reduction

     (0.22
  

 

 

 

Total annual fund operating expenses after expense reduction**

     0.35  

*Other expenses are based on restated estimated amounts for the current fiscal year, as the Investor Shares of the fund had not commenced operations as of the date of this prospectus.

 

**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 0.35% for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement). This contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.

 

Example

This example is intended to help you compare the cost of investing in the Investor Shares with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Investor Shares 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.

Expenses on a $10,000 investment

 

1 Year   3 Years   5 Years   10 Years
$36   $113   $197   $443

 

 

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

REG98851-00 (09/17)

00199300

 

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Table of Contents

THE CHARLES SCHWAB FAMILY OF FUNDS

Schwab Money Funds

Schwab Money Market Fund

Schwab Government Money Fund

Schwab U.S. Treasury Money Fund

Schwab Cash Reserves

Schwab Advisor Cash Reserves

Schwab Value Advantage Money Fund

Schwab Retirement Advantage Money Fund

Schwab Investor Money Fund

Schwab Treasury Obligations Money Fund

Schwab Retirement Government Money Fund

Supplement dated September 28, 2017 to the

Statement of Additional Information dated April 28, 2017

Schwab Municipal Money Funds

Schwab AMT Tax-Free Money Fund

Schwab Municipal Money Fund

Schwab California Municipal Money Fund

Schwab New York Municipal Money Fund

Supplement dated September 28, 2017 to the

Statement of Additional Information dated April 28, 2017

Schwab Variable Share Price Money Fund

Supplement dated September 28, 2017 to the

Statement of Additional Information dated April 28, 2017

 

 

This supplement provides new and additional information beyond that contained in

each Statement of Additional Information (SAI) and should be read in conjunction with each SAI.

Schwab Money Funds

1.     Name Change for Certain Share Classes of Certain Funds

Effective October 3, 2017, the following fund share classes will change their name:

 

OLD NAME

 

NEW NAME

Schwab Government Money Fund – Purchased Shares   Schwab Government Money Fund – Investor Shares
Schwab Treasury Obligations Money Fund – Value Advantage Shares   Schwab Treasury Obligations Money Fund – Investor Shares

2.     Reduction/Implementation of Operating Expenses Limit

Effective October 3, 2017, the contractual expense limitation of Charles Schwab Investment Management, Inc. (CSIM or the investment adviser) and its affiliates on the total annual fund operating expenses of the funds will be implemented or reduced.

 

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Table of Contents

Accordingly, the corresponding information in the section entitled “Advisory Agreement” on page 22 of the SAI is deleted and replaced in its entirety with the following:

CSIM and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of each fund below as follows for so long as CSIM serves as the adviser to the fund (a contractual expense limitation agreement).

 

Fund   Expense Cap

Schwab Money Market Fund

  0.66%

Schwab Government Money Fund – Sweep Shares

  0.70%

Schwab Government Money Fund – Investor Shares

  0.35%

Schwab U.S. Treasury Money Fund

  0.55%

Schwab Cash Reserves

  0.61%

Schwab Advisor Cash Reserves – Sweep Shares

  0.61%

Schwab Advisor Cash Reserves – Premier Sweep Shares

  0.54%

Schwab Value Advantage Money Fund – Premier Shares

  0.19%

Schwab Value Advantage Money Fund – Ultra Shares

  0.19%

Schwab Value Advantage Money Fund – Select Shares

  0.19%

Schwab Value Advantage Money Fund – Investor Shares

  0.35%

Schwab Retirement Advantage Money Fund

  0.35%

Schwab Investor Money Fund

  0.35%

Schwab Treasury Obligations Money Fund – Sweep Shares

  0.60%

Schwab Treasury Obligations Money Fund – Investor Shares

  0.35%

Schwab Retirement Government Money Fund

  0.19%

A fund’s contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees. The contractual expense limitation agreement is applied prior to and without regard to the voluntary yield waiver discussed below and may not be recaptured by CSIM. A contractual expense limitation agreement, where applicable, is not intended to cover all fund expenses, and a fund’s expenses may exceed the amount of the expense limitation set forth in a contractual expense limitation agreement. For example, the contractual expense limitation agreement does not cover investment-related expenses, such as brokerage commissions, interest, taxes and the fees and expenses of pooled investment vehicles, such as other investment companies, nor does it cover extraordinary or non-routine expenses, if any, such as shareholder meeting costs.

CSIM and/or its affiliates also may, if applicable, voluntarily waive and/or reimburse expenses in excess of their current fee waiver and reimbursement commitment to the extent necessary to maintain a positive net yield (or in the case of Schwab Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Retirement Government Money Fund, a non-negative net yield) for each fund (the voluntary yield waiver).

 

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3.     Reduction of Shareholder Servicing Fees for Certain Funds

Effective October 3, 2017, certain funds’ shareholder servicing fees will be reduced. Accordingly, the table in the section entitled “Shareholder Servicing and Sweep Administration Plan” on page 23 of the SAI is deleted and replaced in its entirety with the following:

 

Fund   Shareholder Servicing Fee

Schwab Money Market Fund – Sweep Shares

  0.15%

Schwab Government Money Fund – Sweep Shares

  0.15%

Schwab Government Money Fund – Investor Shares

  0.15%

Schwab U.S. Treasury Money Fund

  0.15%

Schwab Cash Reserves – Sweep Shares

  0.15%

Schwab Advisor Cash Reserves – Sweep Shares

  0.15%

Schwab Advisor Cash Reserves – Premier Sweep Shares

  0.15%

Schwab Value Advantage Money Fund – Premier Shares

  0.00%

Schwab Value Advantage Money Fund – Ultra Shares

  0.00%

Schwab Value Advantage Money Fund – Select Shares

  0.00%

Schwab Value Advantage Money Fund – Investor Shares

  0.15%

Schwab Retirement Advantage Money Fund

  0.15%

Schwab Investor Money Fund

  0.15%

Schwab Treasury Obligations Money Fund – Sweep Shares

  0.15%

Schwab Treasury Obligations Money Fund – Investor Shares

  0.15%

4.     Change in Investor Eligibility Requirements for Placing Direct Orders for Certain Funds

Effective October 2, 2017, new Eligible Investors (as determined by each fund) may only invest in a fund through an account at Charles Schwab & Co. Inc. (Schwab) or another financial intermediary. When you place orders to purchase, exchange or redeem fund shares through Schwab or another financial intermediary, you must follow Schwab’s or the other financial intermediary’s transaction procedures. Eligible Investors who purchased fund shares prior to October 2, 2017 and hold such shares directly through the fund’s transfer agent may make additional purchase and place exchange and redemption orders through the fund’s transfer agent.

 

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Schwab Municipal Money Funds

1.     Name Change for Certain Share Classes of Certain Funds

Effective October 3, 2017, the following fund share classes will change their name:

 

OLD NAME   NEW NAME

Schwab AMT-Tax Free Money Fund – Value

Advantage Shares

  Schwab AMT-Tax Free Money Fund – Investor Shares

Schwab Municipal Money Fund – Value Advantage

Shares

  Schwab Municipal Money Fund – Investor Shares

Schwab Municipal Money Fund – Premier Shares

  Schwab Municipal Money Fund – Ultra Shares

Schwab California Municipal Money Fund – Value

Advantage Shares

  Schwab California Municipal Money Fund – Investor Shares

Schwab New York Municipal Money Fund – Value

Advantage Shares

  Schwab New York Municipal Money Fund – Investor Shares

2.     Reduction of Operating Expenses Limit

Effective October 3, 2017, the contractual expense limitation of CSIM and its affiliates on the total annual fund operating expenses of the funds will be reduced. Accordingly, the corresponding information in the section entitled “Advisory Agreement” on page 31 of the SAI is deleted and replaced in its entirety with the following:

CSIM and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of each fund below as follows for so long as CSIM serves as the adviser to the fund (a contractual expense limitation agreement).

 

Fund   Expense Cap

Schwab AMT Tax-Free Money Fund – Investor Shares

  0.35%

Schwab AMT Tax-Free Money Fund – Sweep Shares

  0.57%

Schwab Municipal Money Fund – Investor Shares

  0.35%

Schwab Municipal Money Fund – Select Shares

  0.19%

Schwab Municipal Money Fund – Ultra Shares

  0.19%

Schwab Municipal Money Fund – Sweep Shares

  0.57%

Schwab California Municipal Money Fund – Investor Shares

  0.35%

Schwab California Municipal Money Fund – Sweep Shares

  0.55%

Schwab New York Municipal Money Fund – Investor Shares

  0.35%

Schwab New York Municipal Money Fund – Sweep Shares

  0.60%

A fund’s contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board of Trustees. The contractual expense limitation agreement is applied prior to and without regard to the voluntary yield waiver discussed below and may not be recaptured by CSIM. A contractual expense limitation agreement, where applicable, is not intended to cover all fund expenses, and a fund’s expenses may exceed the amount of the expense limitation set forth in a contractual expense limitation agreement. For example, the contractual expense limitation agreement does not cover investment-related expenses, such as brokerage commissions, interest, taxes and the fees and expenses of pooled investment vehicles, such as other investment companies, nor does it cover extraordinary or non-routine expenses, if any, such as shareholder meeting costs.

In addition, CSIM and/or its affiliates also may voluntarily waive and/or reimburse expenses in excess of their current fee waivers and reimbursement commitments, if applicable, to the extent necessary to maintain a positive net yield for each fund (voluntary yield waiver).

 

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3.     Reduction of Shareholder Servicing Fees

Effective October 3, 2017, the funds’ shareholder servicing fees will be reduced. Accordingly, the table in the section entitled “Shareholder Servicing and Sweep Administration Plan” on page 32 of the SAI is deleted and replaced in its entirety with the following:

 

Fund   Shareholder Servicing Fee

Schwab AMT Tax-Free Money Fund – Investor Shares

  0.15%

Schwab AMT Tax-Free Money Fund – Sweep Shares

  0.15%

Schwab Municipal Money Fund – Investor Shares

  0.15%

Schwab Municipal Money Fund – Select Shares

  0.00%

Schwab Municipal Money Fund – Ultra Shares

  0.00%

Schwab Municipal Money Fund – Sweep Shares

  0.15%

Schwab California Municipal Money Fund – Investor Shares

  0.15%

Schwab California Municipal Money Fund – Sweep Shares

  0.15%

Schwab New York Municipal Money Fund – Investor Shares

  0.15%

Schwab New York Municipal Money Fund – Sweep Shares

  0.15%

4.     Change in Investor Eligibility Requirements for Placing Direct Orders for Certain Funds

Effective October 2, 2017, new Eligible Investors (as determined by each fund) may only invest in a fund through an account at Schwab or another financial intermediary. When you place orders to purchase, exchange or redeem fund shares through Schwab or another financial intermediary, you must follow Schwab’s or the other financial intermediary’s transaction procedures. Eligible Investors who purchased fund shares prior to October 2, 2017 and hold such shares directly through the fund’s transfer agent may make additional purchase and place exchange and redemption orders through the fund’s transfer agent.

 

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Schwab Variable Share Price Money Fund

1.     Discontinuation of Premier Shares and Select Shares (currently not offered for sale)

Effective October 3, 2017, the Schwab Variable Share Price Money Fund’s Premier Shares and Select Shares are terminated. Accordingly, all references to Premier Shares and Select Shares are deleted from the SAI.

2.     Reduction of Operating Expenses Limit

Effective October 3, 2017, the contractual expense limitation of CSIM and its affiliates on the total annual fund operating expenses of the fund will be reduced. Accordingly, the corresponding information in the section entitled “Advisory Agreement” on page 18 of the SAI is deleted and replaced in its entirety with the following:

CSIM and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of the below share classes of the fund as follows for so long as CSIM serves as the adviser to the fund (a contractual expense limitation agreement).

 

Fund   Expense Cap

Schwab Variable Share Price Money Fund – Investor Shares

  0.35%

Schwab Variable Share Price Money Fund – Ultra Shares

  0.19%

The fund’s contractual expense limitation agreement may only be amended or terminated with the approval of the fund’s Board. The contractual expense limitation agreement is applied prior to and without regard to the voluntary yield waiver discussed below and may not be recaptured by CSIM. A contractual expense limitation agreement, where applicable, is not intended to cover all fund expenses, and the fund’s expenses may exceed the amount of the expense limitation set forth in a contractual expense limitation agreement. For example, the contractual expense limitation agreement does not cover investment-related expenses, such as brokerage commissions, interest, taxes and the fees and expenses of pooled investment vehicles, such as other investment companies, nor does it cover extraordinary or non-routine expenses, if any, such as shareholder meeting costs.

CSIM and/or its affiliates also may, if applicable, voluntarily waive and/or reimburse expenses in excess of their current fee waiver and reimbursement commitment to the extent necessary to maintain a positive net yield for each share class (the voluntary yield waiver).

3.     Reduction of Shareholder Servicing Fees

Effective October 3, 2017, the fund’s shareholder servicing fees will be reduced. Accordingly, the table in the section entitled “Shareholder Servicing and Sweep Administration Plan” on page 19 of the SAI is deleted and replaced in its entirety with the following:

 

Fund   Shareholder Servicing Fee

Schwab Variable Share Price Money Fund – Investor Shares

  0.15%

Schwab Variable Share Price Money Fund – Ultra Shares

  0.00%

4.     Change in Investor Eligibility Requirements for Placing Direct Orders

Effective October 2, 2017 new investors may only invest in the fund through an account at Schwab or another financial intermediary. When you place orders to purchase, exchange or redeem fund shares through an account at Schwab or another financial intermediary, you must follow Schwab’s or the other financial intermediary’s transaction procedures. Investors who purchased fund shares prior to October 2, 2017 and hold such shares directly through the fund’s transfer agent may make additional purchases and place exchange and redemption orders through the fund’s transfer agent.

 

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Schwab Money Funds

Schwab Municipal Money Funds

Schwab Variable Share Price Money Fund

Effective October 2, 2017, the “Portfolio Holdings Disclosure” section of the SAI is hereby deleted and replaced with the following:

Portfolio Holdings Disclosure

The Trusts’ Board has approved policies and procedures that govern the timing and circumstances regarding the disclosure of fund portfolio holdings information to shareholders and third parties. These policies and procedures are designed to ensure that disclosure of information regarding the funds’ portfolio securities is in the best interests of fund shareholders, and include procedures to address conflicts between the interests of the funds’ shareholders, on the one hand, and those of the funds’ investment adviser, subadviser (if applicable), principal underwriter or any affiliated person of a fund, its investment adviser, subadviser or principal underwriter, on the other. Pursuant to such procedures, the Board has authorized one of the President, Chief Operating Officer or Chief Financial Officer of the Trusts (in consultation with a fund’s subadviser, if applicable) to authorize the release of the funds’ portfolio holdings prior to regular public disclosure (as outlined in the prospectus and below) or regular public filings, as necessary, in conformity with the foregoing principles.

The Board exercises on-going oversight of the disclosure of fund portfolio holdings by overseeing the implementation and enforcement of the funds’ policies and procedures by the Chief Compliance Officer and by considering reports and recommendations by the Chief Compliance Officer concerning any material compliance matters. The Board will receive periodic updates, at least annually, regarding entities which were authorized to be provided “early disclosure” of the funds’ portfolio holdings information and will periodically review any agreements that the Trusts have entered into to selectively disclose portfolio holdings.

Portfolio holdings may be made available on a selective basis to ratings agencies, certain industry organizations, consultants and other qualified financial professionals when the appropriate officer of the Trusts determines such disclosure meets the requirements noted above and serves a legitimate business purpose. Agreements entered into with such entities will describe the permitted use of portfolio holdings and provide that, among other customary confidentiality provisions: (i) the portfolio holdings will be kept confidential; (ii) the person will not trade on the basis of any material non-public information; and (iii) the information will be used only for the purpose described in the agreement.

The funds’ service providers including, without limitation, the investment adviser, subadvisers (if applicable), the distributor, the custodian, fund accountant, transfer agent, counsel, auditor, proxy voting service provider, pricing information vendors, trade execution measurement vendors, portfolio management system providers, securities lending agents, publisher, printer and mailing agent may receive disclosure of portfolio holdings information as frequently as daily in connection with the services they perform for the funds. CSIM, any subadviser to the fund as disclosed in the most current prospectus, Glass, Lewis & Co., LLC, State Street and/or BBH, as service providers to the funds, are currently receiving this information on a daily basis. Donnelley Financial Solutions, as a service provider to the funds, is currently receiving this information on a quarterly basis. PwC, the Transfer Agent, and the Distributor, as service providers to the funds, receive this information on an as-needed basis. Service providers are subject to a duty of confidentiality with respect to any portfolio holdings information they receive whether imposed by the confidentiality provisions of the service providers’ agreements with the Trusts or by the nature of its relationship with the Trusts. Although certain of the service providers are not under formal confidentiality obligations in connection with disclosure of portfolio holdings, a fund will not continue to conduct business with a service provider who the fund believes is misusing the disclosed information.

To the extent that a fund invests in an ETF, the Trusts will, when required by the exemptive orders issued by the SEC to ETF sponsors and the procedures adopted by the Board, promptly notify the ETF in writing of any purchase or acquisition of shares of the ETF that causes the fund to hold (i) 5% or more of such ETF’s total outstanding voting securities, and (ii) 10% or more of such ETF’s total outstanding voting securities. In addition, CSIM will, upon causing a fund to acquire more than 3% of an open-end ETF’s outstanding shares, notify the open-end ETF of the investment.

The funds’ policies and procedures prohibit the funds, the funds’ investment adviser or any related party from receiving any compensation or other consideration in connection with the disclosure of portfolio holdings information.

 

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Generally, a complete list of a fund’s portfolio holdings is published on the fund’s website www.schwabfunds.com on the “Prospectuses & Reports” tab under “Portfolio Holdings” generally 60-80 days after a fund’s fiscal quarter-end in-line with regulatory filings unless a different timing is outlined in the fund’s prospectus.

Specifically for the Schwab ETFs, each Schwab ETF discloses its portfolio holdings and the percentages the holdings represent of the fund’s net assets at least monthly on the website and as often as each day the fund is open for business. Portfolio holdings information made available in connection with the process of purchasing or redeeming Creation Units for the Schwab ETFs may be provided to other entities that provided services to the funds in the ordinary course of business after it has been disseminated to the NSCC.

The Schwab Money Funds have an ongoing arrangement to make available information about the funds’ portfolio holdings and information derived from the funds’ portfolio holdings to iMoneyNet, a rating and ranking organization, which is subject to a confidentiality agreement. Under its arrangement with the funds, iMoneyNet, among other things, receives information concerning the funds’ net assets, yields, maturities and portfolio compositions on a weekly basis, subject to a one business day lag.

On the website, the funds also may provide, on a monthly or quarterly basis, information regarding certain attributes of a fund’s portfolio, such as a fund’s top ten holdings, sector weightings, composition, credit quality and duration and maturity, as applicable. This information is generally updated within 5-25 days after the end of the period. This information on the website is publicly available to all categories of persons.

The funds may disclose non-material information including commentary and aggregate information about the characteristics of a fund in connection with or relating to a fund or its portfolio securities to any person if such disclosure is for a legitimate business purpose, such disclosure does not effectively result in the disclosure of the complete portfolio securities of any fund (which can only be disclosed in accordance with the above requirements), and such information does not constitute material non-public information. Such disclosure does not fall within the portfolio securities disclosure requirements outlined above.

Whether the information constitutes material non-public information will be made on a good faith determination, which involves an assessment of the particular facts and circumstances. In most cases, commentary or analysis would be immaterial and would not convey any advantage to a recipient in making a decision concerning a fund. Commentary and analysis include, but are not limited to, the allocation of a fund’s portfolio securities and other investments among various asset classes, sectors, industries and countries, the characteristics of the stock components and other investments of a fund, the attribution of fund returns by asset class, sector, industry and country, and the volatility characteristics of a fund.

 

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

REG98853-00 (09/17)

00199301

 

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