Summary Prospectus | February 28, 2018
Schwab Treasury Obligations Money FundTM
| Ticker Symbol: | Sweep Shares®: SNTXX |
Before you invest, you may want to review the fund’s prospectus, which
contains more information about the fund and its risks. You can find the fund’s prospectus, Statement of Additional Information (SAI) and other information about the fund online at
www.csimfunds.com/schwabfunds_prospectus. You can also obtain this information at no cost by calling 1-866-414-6349 or by sending an email
request to orders@mysummaryprospectus.com. If you purchase or hold fund shares through a financial intermediary, the fund’s prospectus, SAI, and other information about the fund are
available from your financial intermediary.
The
fund’s prospectus and SAI, both dated April 28, 2017, as supplemented, include a more detailed discussion of fund investment policies and the risks associated with various fund investments. The prospectus and SAI are incorporated by reference
into the summary prospectus, making them legally a part of the summary prospectus.
Investment Objective
The fund’s goal is to seek current income consistent
with stability of capital and liquidity. The fund’s investment objective is not fundamental and therefore may be changed by the fund’s board of trustees without shareholder approval.
Fund Fees and Expenses
This table describes the fees and expenses you may pay if
you buy and hold 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 expenses1 | 0.33 |
| Total annual fund operating expenses | 0.67 |
| Less expense reduction | (0.07) |
| Total annual fund operating expenses after expense reduction2 | 0.60 |
| 1 | Other expenses have been restated to reflect current fees and expenses. |
| 2 | 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) 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 |
Principal Investment Strategies
To pursue its goal, the fund typically invests in securities
backed by the full faith and credit of the U.S. government and repurchase agreements backed by such investments. The fund intends to operate as a government money market fund under the regulations governing
money market funds. The fund will invest at least 99.5% of its total assets in cash, government securities and/or repurchase agreements that are collateralized fully by cash and/or government securities; under normal circumstances, at least 80% of
the fund’s net assets (plus the amount of any borrowing for investment purposes) will be invested solely in U.S. Treasury obligations or repurchase agreements backed by such obligations (excluding cash). With respect to the 80% policy, the
fund will notify its shareholders at least 60 days before changing the policy. The full faith and credit backing is the strongest backing offered by the U.S. government, and traditionally is considered by investors to be the highest degree of safety
as far as the payment of principal and interest.
Based on the fund manager’s view of market conditions
for U.S. Treasury securities, the fund may invest up to 20% of its net assets in: (i) obligations that are issued by the U.S. government, its agencies or instrumentalities, including obligations that are not fully guaranteed by the U.S. Treasury,
such as those issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks, and repurchase agreements backed by such obligations; and (ii) obligations that
are issued by private issuers that are guaranteed as to principal or interest by the U.S. government, its agencies or instrumentalities. Obligations that are issued by private issuers that are guaranteed as to principal or interest by the U.S.
government, its agencies or instrumentalities
Schwab Treasury Obligations Money Fund | Summary Prospectus1
REG67349-13 00206958
are considered U.S. government securities under the rules that govern money
market funds.
In choosing securities, the fund’s
manager seeks to maximize current income within the limits of the fund’s investment objective and credit, maturity and diversification policies. By investing primarily in full faith and credit U.S. government investments and repurchase
agreements backed by such investments, the fund seeks to provide safety as to its assets. The portfolio manager may adjust the fund’s average maturity based on current and anticipated changes in interest rates. To preserve its investors’
capital, the fund seeks to maintain a stable $1.00 share price.
For temporary defensive purposes during unusual market
conditions, the fund may invest up to 100% of its assets in cash, cash equivalents or other high quality short-term investments.
As a government money market fund, the fund’s Board of
Trustees (the Board) has determined not to subject the fund to a liquidity fee and/or a redemption gate on fund redemptions. Please note that the Board has reserved its ability to change this determination with respect to liquidity fees and/or
redemption gates, but only after providing appropriate prior notice to shareholders.
Principal Risks
The fund is subject to risks, any of which could cause an
investor to lose money. The fund’s principal risks include:
Investment Risk. You
could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any
time.
Interest Rate Risk. Interest rates rise and fall over time. As with any investment whose yield reflects current interest rates, the fund’s yield will change over time. During periods when interest rates are low, the fund’s
yield (and total return) also will be low or may even be negative, which may make it difficult for the fund to pay expenses out of fund assets or maintain a stable $1.00 share price. Because interest rates in the United States are near
historically low levels, a change in a central bank’s monetary policy or improving economic conditions may result in an increase in interest rates. A sudden or unpredictable rise in interest rates may cause volatility in the market
and may decrease liquidity in the money market securities markets, making it more difficult for the fund to sell its money market investments at a time when the investment adviser might wish to sell such investments. Decreased market liquidity also
may make it more difficult to value some or all of the fund’s money market securities holdings.
Stable Net Asset Value Risk.
If the fund or another money market fund fails to maintain a stable net asset value (or such perception exists in the market place), the fund could experience increased redemptions, which may adversely impact the fund’s share price. The
fund is permitted, among other things, to reduce or withhold
any income and/or gains generated from its portfolio to maintain a stable
$1.00 share price.
Credit Risk. The fund is subject to the risk that a decline in the credit quality of a portfolio investment could cause the fund to lose money or underperform. The fund could lose money if the issuer of a portfolio investment
fails to make timely principal or interest payments or if a guarantor, liquidity provider, or counterparty of a portfolio investment fails to honor its obligations. Even though the fund’s investments in repurchase agreements are collateralized
at all times, there is some risk to the fund if the other party should default on its obligations and the fund is delayed or prevented from recovering or disposing of the collateral. Negative perceptions of the ability of an issuer, guarantor,
liquidity provider or counterparty to make payments or otherwise honor its obligations, as applicable, could also cause the price of that investment to decline. The credit quality of the fund’s portfolio holdings can change
rapidly in certain market environments and any downgrade or default on the part of a single portfolio investment could cause the fund’s share price or yield to fall.
Many of the U.S. government securities that the fund invests
in are not backed by the full faith and credit of the U.S. government, which means they are neither issued nor guaranteed by the U.S. Treasury. Although maintained in conservatorship by the Federal Housing Finance Agency since September 2008, Fannie
Mae and Freddie Mac maintain only lines of credit with the U.S. Treasury. The Federal Home Loan Banks maintain limited access to credit lines from the U.S. Treasury. Other securities, such as obligations issued by the Federal Farm
Credit Banks Funding Corporation, are supported solely by the credit of the issuer. There can be no assurance that the U.S. government will provide financial support to securities of its agencies and instrumentalities if it is not obligated to do so
under law. Also, any government guarantees on securities the fund owns do not extend to the shares of the fund itself.
Repurchase Agreements Risk.
When the fund enters into a repurchase agreement, the fund is exposed to the risk that the other party (i.e., the counterparty) will not fulfill its contractual obligation. In a repurchase agreement, there exists the risk that when the fund buys a
security from a counterparty that agrees to repurchase the security at an agreed upon price (usually higher) and time, the counterparty will not repurchase the security.
Management Risk. Any
actively managed mutual fund is subject to the risk that its investment adviser will select investments or allocate assets in a manner that could cause the fund to underperform or otherwise not meet its objective. The fund’s investment
adviser applies its own investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that they will produce the desired results. The investment adviser’s maturity decisions will also affect
the fund’s yield, and potentially could affect its share price. To the extent that the investment adviser anticipates interest rate trends imprecisely, the fund’s yield at times could lag the yields of other money market
funds.
Redemption Risk. The fund may experience periods of heavy redemptions that could cause the fund to liquidate its assets at
Schwab Treasury Obligations Money Fund | Summary Prospectus2
inopportune times or at a loss or depressed value, particularly during
periods of declining or illiquid markets. Redemptions by a few large investors in the fund may have a significant adverse effect on the fund’s ability to maintain a stable $1.00 share price. In the event any money market fund fails to maintain
a stable net asset value, other money market funds, including the fund, could face a market-wide risk of increased redemption pressures, potentially jeopardizing the stability of their $1.00 share prices.
Money Market Fund
Risk. The fund is not designed to offer capital appreciation. In exchange for their emphasis on stability and liquidity, money market investments may offer lower long-term performance than stock or bond
investments.
Performance
The bar chart below shows the investment results of the
fund’s Sweep Shares for the prior calendar year and the following table shows the fund’s Sweep Shares average annual total returns for various periods. This information provides some indication of the risks of investing in the fund. All
figures assume distributions were reinvested. Keep in mind that future performance may differ from past performance. For current performance information, please see www.csimfunds.com/schwabfunds_prospectus or
call toll free 1-877-824-5615 for the fund’s current seven-day yield.
Annual Total Returns (%) as of
12/31
Best Quarter: 0.00% Q4 2016
Worst Quarter: 0.00% Q1 2014
Worst Quarter: 0.00% Q1 2014
| Average Annual Total Returns as of 12/31/16 | ||
| 1 Year | Since
Inception (6/5/12) | |
| Sweep Shares | 0.01% | 0.00% |
Investment Adviser
Charles Schwab Investment Management, Inc.
Purchase and Sale of Fund Shares
The fund is open for business each day that the New York
Stock Exchange (NYSE) is open except when the following federal holidays are observed: Columbus Day and Veterans Day. If the NYSE is closed due to weather or other extenuating circumstances on a day it would typically be open for business, or the
NYSE has an unscheduled early closing on a day it has opened for business, the fund reserves the right to treat such day as a business day and accept purchase and redemption orders and calculate its share price as of the normally scheduled close of
regular trading on the NYSE for that day.
Eligible Investors (as determined by the fund) may invest in
Sweep Shares as noted below. The fund is designed for use in conjunction with certain accounts held at Charles Schwab & Co., Inc. (Schwab) and is subject to the terms and conditions of your Schwab account agreement, as amended from time to time.
If you designate the fund as the sweep fund on your Schwab account, your uninvested cash balances will be invested in the fund according to the terms and conditions of your account agreement. Similarly, when you use your account to purchase other
investments or make payments, shares of the fund will be sold to cover these transactions according to the terms and conditions of your account agreement. You may make purchase, exchange and redemption requests in accordance with your account
agreement.
Tax Information
Distributions received from the fund will generally be
taxable as ordinary income or capital gains, unless you are investing through an IRA, 401(k) or other tax-advantaged account.
Payments to Financial Intermediaries
The fund pays Schwab for shareholder and sweep
administration services. These payments may create a conflict of interest by influencing Schwab and your salesperson to recommend the fund over another investment. Ask your salesperson or visit Schwab’s website for more
information.
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