2 | ||||||||
3 | ||||||||
5 | ||||||||
Performance and Fund Facts
|
||||||||
6 | ||||||||
8 | ||||||||
10 | ||||||||
12 | ||||||||
13 | ||||||||
18 | ||||||||
23 | ||||||||
28 | ||||||||
38 | ||||||||
39 | ||||||||
40 | ||||||||
43 | ||||||||
EX-99.CODEETH | ||||||||
EX-99.CERT | ||||||||
EX-99.906CERT |
Total Return for the 12 Months Ended December 31, 2012 | ||||
Schwab® Monthly Income Fund Moderate Payout (Ticker Symbol: SWJRX) | 8.86% | |||
Moderate Payout Composite Index | 8.95% | |||
Fund Category: Morningstar Retirement Income | 9.01% | |||
Performance Details | pages 6-7 | |||
Schwab® Monthly Income Fund Enhanced Payout (Ticker Symbol: SWKRX) | 6.70% | |||
Enhanced Payout Composite Index | 7.18% | |||
Fund Category: Morningstar Retirement Income | 9.01% | |||
Performance Details | pages 8-9 | |||
Schwab® Monthly Income Fund Maximum Payout (Ticker Symbol: SWLRX) | 4.43% | |||
Maximum Payout Composite Index | 5.41% | |||
Fund Category: Morningstar Retirement Income | 9.01% | |||
Performance Details | pages 10-11 | |||
Minimum Initial Investment1 | $ | 100 | ||
1 | Please see prospectus for further detail and eligibility requirements. |
16.00% | S&P 500® Index: measures U.S. large-cap stocks | |||
16.35% | Russell 2000® Index: measures U.S. small-cap stocks | |||
17.90% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | |||
4.21% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | |||
0.08% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Number of Holdings
|
9 | |||
Portfolio Turnover Rate
|
10% |
Fixed-Income Funds Intermediate-Term Bond
|
40.4% | |||
Equity Funds Large-Cap
|
23.3% | |||
Fixed-Income Funds Short-Term Bond
|
11.8% | |||
Equity Funds Global Real Estate
|
11.1% | |||
Equity Funds International
|
6.4% | |||
Fixed-Income Funds International Bond
|
3.7% | |||
Money Market Funds
|
3.3% | |||
Total
|
100.0% |
Schwab Intermediate-Term Bond Fund
|
23.1% | |||
Schwab Total Bond Market Fund
|
17.5% | |||
Schwab Dividend Equity Fund
|
16.4% | |||
Schwab Short-Term Bond Market Fund
|
11.8% | |||
Schwab Global Real Estate Fund
|
11.1% | |||
Total
|
79.9% |
* | The targeted annual payout for the fund is based on historic yield environments over a 10-year period. The funds actual annual payout could be higher or lower than the targeted annual payout based on the interest rate environment and other market factors occurring during that year. During a low interest rate environment, it is generally expected that the funds will have lower actual annual payouts. Conversely, during a high interest rate environment, it is generally expected that the fund will have higher actual annual payouts. The Schwab Monthly Income FundModerate Payout is expected to provide anticipated annual payouts of 1 to 3% in low interest rate environments and 3 to 6% in high interest rate environments. | |
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund:
Schwab®
Monthly Income Fund Moderate Payout (3/28/08)
|
8.86 | % | 7.34 | % | 4.44 | % | |||||||||
Moderate Payout Composite
Index3
|
8.95 | % | 8.39 | % | 5.53 | % | |||||||||
S&P
500®
Index
|
16.00 | % | 10.87 | % | 3.84 | % | |||||||||
Barclays U.S. Aggregate Bond Index
|
4.21 | % | 6.19 | % | 5.90 | % | |||||||||
Fund Category: Morningstar Retirement Income
|
9.01 | % | 6.77 | % | 4.06 | % |
1 | The funds routine expenses have been absorbed by CSIM and its affiliates. Without these reductions, the funds returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Moderate Payout Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 40% S&P 500 Index and 60% Barclays U.S. Aggregate Bond Index. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.67%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Number of Holdings
|
10 | |||
Portfolio Turnover Rate
|
9% |
Fixed-Income Funds Intermediate-Term Bond
|
52.1% | |||
Equity Funds Large-Cap
|
14.4% | |||
Fixed-Income Funds Short-Term Bond
|
12.8% | |||
Equity Funds Global Real Estate
|
8.1% | |||
Money Market Funds
|
5.2% | |||
Fixed-Income Funds International Bond
|
4.1% | |||
Equity Funds International
|
3.3% | |||
Total
|
100.0% |
Schwab Intermediate-Term Bond Fund
|
29.2% | |||
Schwab Total Bond Market Fund
|
23.0% | |||
Schwab Short-Term Bond Market Fund
|
12.8% | |||
Schwab Dividend Equity Fund
|
10.8% | |||
Schwab Global Real Estate Fund
|
8.0% | |||
Total
|
83.8% |
* | The targeted annual payout for the fund is based on historic yield environments over a 10-year period. The funds actual annual payout could be higher or lower than the targeted annual payout based on the interest rate environment and other market factors occurring during that year. During a low interest rate environment, it is generally expected that the funds will have lower actual annual payouts. Conversely, during a high interest rate environment, it is generally expected that the fund will have higher actual annual payouts. The Schwab Monthly Income FundEnhanced Payout is expected to provide anticipated annual payouts of 2 to 4% in low interest rate environments and 4 to 7% in high interest rate environments. | |
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund:
Schwab®
Monthly Income Fund Enhanced Payout (3/28/08)
|
6.70 | % | 6.67 | % | 4.56 | % | |||||||||
Enhanced Payout Composite
Index4
|
7.18 | % | 7.62 | % | 5.74 | % | |||||||||
S&P
500®
Index
|
16.00 | % | 10.87 | % | 3.84 | % | |||||||||
Barclays U.S. Aggregate Bond Index
|
4.21 | % | 6.19 | % | 5.90 | % | |||||||||
Fund Category: Morningstar Retirement Income
|
9.01 | % | 6.77 | % | 4.06 | % |
1 | The funds routine expenses have been absorbed by CSIM and its affiliates. Without these reductions, the funds returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On June 16, 2009, the Schwab Retirement Income Fund merged into the fund. | |
4 | The Enhanced Payout Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 25% S&P 500 Index and 75% Barclays U.S. Aggregate Bond Index. | |
5 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.58%. Net Expense: Expenses reduced by a contractual fee waiver for so long as CSIM serves as the adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section in the financial statements. |
Number of Holdings
|
8 | |||
Portfolio Turnover Rate
|
19% |
Fixed-Income Funds Intermediate-Term Bond
|
60.7% | |||
Fixed-Income Funds Short-Term Bond
|
16.0% | |||
Money Market Funds
|
7.0% | |||
Fixed-Income Funds International Bond
|
5.7% | |||
Equity Funds Large-Cap
|
5.5% | |||
Equity Funds Global Real Estate
|
5.1% | |||
Total
|
100.0% |
Schwab Intermediate-Term Bond Fund
|
34.6% | |||
Schwab Total Bond Market Fund
|
26.0% | |||
Schwab Short-Term Bond Market Fund
|
16.0% | |||
Laudus Mondrian International Fixed Income Fund
|
5.6% | |||
Schwab Dividend Equity Fund
|
5.5% | |||
Total
|
87.7% |
* | The targeted annual payout for the fund is based on historic yield environments over a 10-year period. The funds actual annual payout could be higher or lower than the targeted annual payout based on the interest rate environment and other market factors occurring during that year. During a low interest rate environment, it is generally expected that the funds will have lower actual annual payouts. Conversely, during a high interest rate environment, it is generally expected that the fund will have higher actual annual payouts. The Schwab Monthly Income FundMaximum Payout is expected to provide anticipated annual payouts of 2 to 5% in low interest rate environments and 5 to 8% in high interest rate environments. | |
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund:
Schwab®
Monthly Income Fund Maximum Payout (3/28/08)
|
4.43 | % | 5.31 | % | 4.15 | % | |||||||||
Maximum Payout Composite
Index3
|
5.41 | % | 6.79 | % | 5.86 | % | |||||||||
S&P
500®
Index
|
16.00 | % | 10.87 | % | 3.84 | % | |||||||||
Barclays U.S. Aggregate Bond Index
|
4.21 | % | 6.19 | % | 5.90 | % | |||||||||
Fund Category: Morningstar Retirement Income
|
9.01 | % | 6.77 | % | 4.06 | % |
1 | The funds routine expenses have been absorbed by CSIM and its affiliates. Without these reductions, the funds returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Maximum Payout Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 10% S&P 500 Index and 90% Barclays U.S. Aggregate Bond Index. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.49%. Net Expense: Expenses reduced by a contractual fee waiver for so long as CSIM serves as the adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section in the financial statements. |
Ending |
||||||||||||||||
Beginning |
Account Value |
Expenses Paid |
||||||||||||||
Expense
Ratio1 |
Account Value |
(Net of Expenses) |
During
Period2 |
|||||||||||||
(Annualized) | at 7/1/12 | at 12/31/12 | 7/1/1212/31/12 | |||||||||||||
Schwab® Monthly Income Fund - Moderate Payout | ||||||||||||||||
Actual Return
|
0.00% | $ | 1,000 | $ | 1,039.90 | $ | 0.00 | |||||||||
Hypothetical 5% Return
|
0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 | |||||||||
Schwab® Monthly Income Fund - Enhanced Payout | ||||||||||||||||
Actual Return
|
0.00% | $ | 1,000 | $ | 1,030.30 | $ | 0.00 | |||||||||
Hypothetical 5% Return
|
0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 | |||||||||
Schwab® Monthly Income Fund - Maximum Payout | ||||||||||||||||
Actual Return
|
0.00% | $ | 1,000 | $ | 1,018.90 | $ | 0.00 | |||||||||
Hypothetical 5% Return
|
0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. The expenses incurred by the underlying funds in which the funds invest are not included in this ratio. | |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 366 days of the fiscal year. |
1/1/12 |
1/1/11 |
1/1/10 |
1/1/09 |
3/28/081 |
||||||||||||||||||
12/31/12 | 12/31/11 | 12/31/10 | 12/31/09 | 12/31/08 | ||||||||||||||||||
Per-Share Data ($)
|
||||||||||||||||||||||
Net asset value at beginning of period
|
9.92 | 9.87 | 9.22 | 8.32 | 10.00 | |||||||||||||||||
Income (loss) from investment operations:
|
||||||||||||||||||||||
Net investment income (loss)
|
0.24 | 0.23 | 0.29 | 0.37 | 0.29 | |||||||||||||||||
Net realized and unrealized gains (losses)
|
0.63 | 0.06 | 0.65 | 0.91 | (1.68 | ) | ||||||||||||||||
Total from investment operations
|
0.87 | 0.29 | 0.94 | 1.28 | (1.39 | ) | ||||||||||||||||
Less distributions:
|
||||||||||||||||||||||
Distributions from net investment income
|
(0.27 | ) | (0.24 | ) | (0.29 | ) | (0.38 | ) | (0.29 | ) | ||||||||||||
Net asset value at end of period
|
10.52 | 9.92 | 9.87 | 9.22 | 8.32 | |||||||||||||||||
Total return (%)
|
8.86 | 2.97 | 10.35 | 15.76 | (14.11 | )2 | ||||||||||||||||
Ratios/Supplemental Data (%)
|
||||||||||||||||||||||
Ratios to average net assets:
|
||||||||||||||||||||||
Net operating
expenses3
|
| 0.00 | 4 | 0.00 | 4 | 0.00 | 4 | 0.00 | 5 | |||||||||||||
Gross operating
expenses3
|
0.44 | 0.46 | 0.53 | 0.92 | 0.73 | 5 | ||||||||||||||||
Net investment income (loss)
|
2.38 | 2.30 | 3.08 | 4.57 | 4.08 | 5 | ||||||||||||||||
Portfolio turnover rate
|
10 | 25 | 13 | 12 | 25 | 2 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000)
|
31 | 22 | 20 | 14 | 7 |
Cost |
Value |
|||||||||||
Holdings by Category | ($) | ($) | ||||||||||
100 | .2% | Other Investment Companies | 28,568,702 | 31,122,612 | ||||||||
100 | .2% | Total Investments | 28,568,702 | 31,122,612 | ||||||||
(0 | .2)% | Other Assets and Liabilities, Net | (60,267 | ) | ||||||||
100 | .0% | Total Net Assets | 31,062,345 |
Number |
Value |
|||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 100.2% of net assets
|
||||||||
Equity Funds 40.8% |
||||||||
Global Real Estate 11.1% | ||||||||
Schwab Global Real Estate Fund (a)
|
510,083 | 3,443,058 | ||||||
International 6.4% | ||||||||
Laudus International MarketMasters Fund, Select
Shares (a)
|
100,254 | 1,987,027 | ||||||
Large-Cap 23.3% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth
Fund (a)
|
148,991 | 2,148,447 | ||||||
Schwab Dividend Equity Fund (a)
|
347,519 | 5,098,103 | ||||||
7,246,550 | ||||||||
12,676,635 | ||||||||
Fixed-Income Funds 56.1% |
||||||||
Intermediate-Term Bond 40.5% | ||||||||
Schwab Intermediate-Term Bond Fund (a)
|
689,412 | 7,169,882 | ||||||
Schwab Total Bond Market Fund (a)
|
558,841 | 5,420,758 | ||||||
12,590,640 | ||||||||
International Bond 3.8% | ||||||||
Laudus Mondrian International Fixed Income Fund (a)
|
100,287 | 1,161,327 | ||||||
Short-Term Bond 11.8% | ||||||||
Schwab Short-Term Bond Market Fund (a)
|
394,138 | 3,673,366 | ||||||
17,425,333 | ||||||||
Money Market Fund 3.3% |
||||||||
State Street Institutional U.S. Government Money Market Fund
|
1,020,644 | 1,020,644 | ||||||
Total Other Investment Companies | ||||||||
(Cost $28,568,702) | 31,122,612 | |||||||
End of Investments.
|
(a) | Issuer is affiliated with the funds adviser. |
Quoted
Prices in |
Significant |
|||||||||||||||
Active
Markets for |
Significant
Other |
Unobservable |
||||||||||||||
Identical
Assets |
Observable
Inputs |
Inputs |
||||||||||||||
Description
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total2
|
||||||||||||
Other Investment
Companies1
|
$31,122,612 | $ | $ | $31,122,612 | ||||||||||||
Total
|
$31,122,612 | $ | $ | $31,122,612 | ||||||||||||
1
|
As categorized in Portfolio Holdings. | |
2
|
The fund had no Other Financial Instruments. |
Assets
|
||||||
Investments in affiliated underlying funds, at value (cost
$27,548,058)
|
$30,101,968 | |||||
Investments in unaffiliated issuers, at value (cost $1,020,644)
|
+ | 1,020,644 | ||||
Total investments, at value (cost $28,568,702)
|
31,122,612 | |||||
Receivables:
|
||||||
Fund shares sold
|
116,761 | |||||
Dividends
|
23,583 | |||||
Due from investment adviser
|
3,689 | |||||
Interest
|
36 | |||||
Prepaid expenses
|
+ | 373 | ||||
Total assets
|
31,267,054 | |||||
Liabilities
|
||||||
Payables:
|
||||||
Investments bought
|
170,000 | |||||
Fund shares redeemed
|
677 | |||||
Accrued expenses
|
+ | 34,032 | ||||
Total liabilities
|
204,709 | |||||
Net Assets
|
||||||
Total assets
|
31,267,054 | |||||
Total liabilities
|
− | 204,709 | ||||
Net assets
|
$31,062,345 | |||||
Net Assets by Source
|
||||||
Capital received from investors
|
29,075,051 | |||||
Net investment income not yet distributed
|
7,416 | |||||
Net realized capital losses
|
(574,032 | ) | ||||
Net unrealized capital gains
|
2,553,910 | |||||
Net Asset Value (NAV)
|
Shares |
||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$31,062,345
|
2,951,758 | $10.52 |
Investment Income
|
||||||
Dividends received from affiliated underlying funds
|
$634,107 | |||||
Interest
|
+ | 215 | ||||
Total investment income
|
634,322 | |||||
Expenses
|
||||||
Professional fees
|
43,303 | |||||
Registration fees
|
21,549 | |||||
Portfolio accounting fees
|
17,752 | |||||
Shareholder reports
|
14,551 | |||||
Transfer agent fees
|
11,364 | |||||
Trustees fees
|
5,823 | |||||
Custodian fees
|
2,030 | |||||
State filing fee reimbursement (Note 4)
|
(728 | ) | ||||
Other expenses
|
+ | 1,265 | ||||
Total expenses
|
116,909 | |||||
Expense reduction by
CSIM1
|
− | 116,909 | ||||
Net expenses
|
− | | ||||
Net investment income
|
634,322 | |||||
Realized and Unrealized Gains (Losses)
|
||||||
Realized capital gain distributions received from affiliated
underlying funds
|
166,027 | |||||
Net realized losses on sales of affiliated underlying funds
|
(60,946 | ) | ||||
Net realized gains on unaffiliated investments
|
+ | 3 | ||||
Net realized gains
|
105,084 | |||||
Net unrealized gains on affiliated underlying funds
|
+ | 1,432,150 | ||||
Net realized and unrealized gains
|
1,537,234 | |||||
Increase in net assets resulting from operations
|
$2,171,556 |
1
|
Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $728. See financial note 4 for additional information. |
Operations
|
||||||||||
1/1/12-12/31/12 | 1/1/11-12/31/11 | |||||||||
Net investment income
|
$634,322 | $499,716 | ||||||||
Net realized gains (losses)
|
105,084 | (97,735 | ) | |||||||
Net unrealized gains
|
+ | 1,432,150 | 154,162 | |||||||
Increase in net assets from operations
|
2,171,556 | 556,143 | ||||||||
Distributions to Shareholders
|
||||||||||
Distributions from net investment income
|
($730,128 | ) | ($526,971 | ) |
1/1/12-12/31/12 | 1/1/11-12/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold
|
1,465,167 | $15,162,208 | 1,198,877 | $12,000,079 | ||||||||||||||
Shares reinvested
|
42,425 | 441,347 | 30,256 | 301,423 | ||||||||||||||
Shares redeemed
|
+ | (738,183 | ) | (7,635,180 | ) | (1,096,575 | ) | (10,917,998 | ) | |||||||||
Net transactions in fund shares
|
769,409 | $7,968,375 | 132,558 | $1,383,504 | ||||||||||||||
Shares Outstanding and Net Assets
|
||||||||||||||||||
1/1/12-12/31/12 | 1/1/11-12/31/11 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period
|
2,182,349 | $21,652,542 | 2,049,791 | $20,239,866 | ||||||||||||||
Total increase
|
+ | 769,409 | 9,409,803 | 132,558 | 1,412,676 | |||||||||||||
End of period
|
2,951,758 | $31,062,345 | 2,182,349 | $21,652,542 | ||||||||||||||
Net investment income not yet distributed
|
$7,416 | $4,673 |
1/1/12 |
1/1/11 |
1/1/10 |
1/1/09 |
3/28/081 |
||||||||||||||||||
12/31/12 | 12/31/11 | 12/31/10 | 12/31/09 | 12/31/08 | ||||||||||||||||||
Per-Share Data ($)
|
||||||||||||||||||||||
Net asset value at beginning of period
|
10.09 | 9.89 | 9.39 | 8.75 | 10.00 | |||||||||||||||||
Income (loss) from investment operations:
|
||||||||||||||||||||||
Net investment income (loss)
|
0.22 | 0.24 | 0.30 | 0.43 | 0.32 | |||||||||||||||||
Net realized and unrealized gains (losses)
|
0.45 | 0.22 | 0.50 | 0.64 | (1.26 | ) | ||||||||||||||||
Total from investment operations
|
0.67 | 0.46 | 0.80 | 1.07 | (0.94 | ) | ||||||||||||||||
Less distributions:
|
||||||||||||||||||||||
Distributions from net investment income
|
(0.26 | ) | (0.26 | ) | (0.30 | ) | (0.43 | ) | (0.31 | ) | ||||||||||||
Net asset value at end of period
|
10.50 | 10.09 | 9.89 | 9.39 | 8.75 | |||||||||||||||||
Total return (%)
|
6.70 | 2 | 4.69 | 2 | 8.66 | 12.60 | (9.53 | )3 | ||||||||||||||
Ratios/Supplemental Data (%)
|
||||||||||||||||||||||
Ratios to average net assets:
|
||||||||||||||||||||||
Net operating
expenses4
|
(0.00 | )5 | 0.00 | 5 | | 0.01 | 0.00 | 6 | ||||||||||||||
Gross operating
expenses4
|
0.18 | 0.15 | 0.15 | 0.33 | 0.56 | 6 | ||||||||||||||||
Net investment income (loss)
|
2.17 | 2.43 | 3.12 | 4.99 | 4.34 | 6 | ||||||||||||||||
Portfolio turnover rate
|
9 | 12 | 14 | 31 | 7 | 39 | 3 | |||||||||||||||
Net assets, end of period ($ x 1,000,000)
|
85 | 80 | 78 | 72 | 10 |
Cost |
Value |
|||||||||||
Holdings by Category | ($) | ($) | ||||||||||
100 | .1% | Other Investment Companies | 76,873,553 | 84,758,176 | ||||||||
100 | .1% | Total Investments | 76,873,553 | 84,758,176 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (91,980 | ) | ||||||||
100 | .0% | Total Net Assets | 84,666,196 |
Number |
Value |
|||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 100.1% of net assets
|
||||||||
Equity Funds 25.7% |
||||||||
Global Real Estate 8.0% | ||||||||
Schwab Global Real Estate Fund (a)
|
1,013,583 | 6,841,687 | ||||||
International 3.3% | ||||||||
Laudus International MarketMasters Fund, Select
Shares (a)
|
140,354 | 2,781,817 | ||||||
Large-Cap 14.4% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth
Fund (a)
|
213,078 | 3,072,579 | ||||||
Schwab Dividend Equity Fund (a)
|
621,165 | 9,112,484 | ||||||
12,185,063 | ||||||||
21,808,567 | ||||||||
Fixed-Income Funds 69.2% |
||||||||
Intermediate-Term Bond 52.2% | ||||||||
Schwab Intermediate-Term Bond Fund (a)
|
2,376,110 | 24,711,549 | ||||||
Schwab Total Bond Market Fund (a)
|
2,007,143 | 19,469,285 | ||||||
44,180,834 | ||||||||
International Bond 4.2% | ||||||||
Laudus Mondrian International Fixed Income Fund (a)
|
303,590 | 3,515,570 | ||||||
Short-Term Bond 12.8% | ||||||||
Schwab Short-Term Bond Market Fund (a)
|
1,167,215 | 10,878,446 | ||||||
58,574,850 | ||||||||
Money Market Funds 5.2% |
||||||||
Schwab Value Advantage Money Fund, Institutional Prime
Shares (a)
|
1,718,156 | 1,718,156 | ||||||
State Street Institutional U.S. Government Money Market Fund
|
2,656,603 | 2,656,603 | ||||||
4,374,759 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $76,873,553) | 84,758,176 | |||||||
End of Investments.
|
(a) | Issuer is affiliated with the funds adviser. |
Quoted
Prices in |
Significant |
|||||||||||||||
Active
Markets for |
Significant
Other |
Unobservable |
||||||||||||||
Identical
Assets |
Observable
Inputs |
Inputs |
||||||||||||||
Description
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total2
|
||||||||||||
Other Investment
Companies1
|
$84,758,176 | $ | $ | $84,758,176 | ||||||||||||
Total
|
$84,758,176 | $ | $ | $84,758,176 | ||||||||||||
1
|
As categorized in Portfolio Holdings. | |
2
|
The fund had no Other Financial Instruments. |
Assets
|
||||||
Investments in affiliated underlying funds, at value (cost
$74,216,950)
|
$82,101,573 | |||||
Investments in unaffiliated issuers, at value (cost $2,656,603)
|
+ | 2,656,603 | ||||
Total investments, at value (cost $76,873,553)
|
84,758,176 | |||||
Receivables:
|
||||||
Fund shares sold
|
82,638 | |||||
Dividends
|
82,178 | |||||
Due from investment adviser
|
1,552 | |||||
Interest
|
100 | |||||
Prepaid expenses
|
+ | 1,486 | ||||
Total assets
|
84,926,130 | |||||
Liabilities
|
||||||
Payables:
|
||||||
Investments bought
|
150,000 | |||||
Fund shares redeemed
|
80,760 | |||||
Accrued expenses
|
+ | 29,174 | ||||
Total liabilities
|
259,934 | |||||
Net Assets
|
||||||
Total assets
|
84,926,130 | |||||
Total liabilities
|
− | 259,934 | ||||
Net assets
|
$84,666,196 | |||||
Net Assets by Source
|
||||||
Capital received from investors
|
84,280,737 | |||||
Net investment income not yet distributed
|
29,833 | |||||
Net realized capital losses
|
(7,528,997 | ) | ||||
Net unrealized capital gains
|
7,884,623 | |||||
Net Asset Value (NAV)
|
Shares |
||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$84,666,196
|
8,066,134 | $10.50 |
Investment Income
|
||||||
Dividends received from affiliated underlying funds
|
$1,783,258 | |||||
Interest
|
+ | 813 | ||||
Total investment income
|
1,784,071 | |||||
Expenses
|
||||||
Professional fees
|
61,081 | |||||
Shareholder reports
|
26,586 | |||||
Registration fees
|
21,296 | |||||
Portfolio accounting fees
|
18,915 | |||||
Transfer agent fees
|
14,487 | |||||
Trustees fees
|
6,207 | |||||
Custodian fees
|
1,099 | |||||
State filing fee reimbursement (Note 4)
|
(225 | ) | ||||
Other expenses
|
+ | 2,531 | ||||
Total expenses
|
151,977 | |||||
Expense reduction by
CSIM1
|
− | 151,977 | ||||
Custody credits
|
− | 1 | ||||
Net expenses
|
− | (1 | ) | |||
Net investment income
|
1,784,072 | |||||
Realized and Unrealized Gains (Losses)
|
||||||
Realized capital gain distributions received from affiliated
underlying funds
|
494,964 | |||||
Net realized gains on sales of affiliated underlying funds*
|
76,572 | |||||
Net realized gains on unaffiliated investments
|
+ | 4 | ||||
Net realized gains
|
571,540 | |||||
Net unrealized gains on affiliated underlying funds
|
+ | 2,933,246 | ||||
Net realized and unrealized gains
|
3,504,786 | |||||
Increase in net assets resulting from operations
|
$5,288,858 |
*
|
Includes $27,609 from a litigation settlement related to an affiliated underlying fund. | |
1
|
Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $225. See financial note 4 for additional information. |
Operations
|
||||||||||
1/1/12-12/31/12 | 1/1/11-12/31/11 | |||||||||
Net investment income
|
$1,784,072 | $1,947,644 | ||||||||
Net realized gains
|
571,540 | 1,021,956 | ||||||||
Net unrealized gains
|
+ | 2,933,246 | 662,849 | |||||||
Increase in net assets from operations
|
5,288,858 | 3,632,449 | ||||||||
Distributions to Shareholders
|
||||||||||
Distributions from net investment income
|
($2,071,784 | ) | ($2,068,651 | ) |
1/1/12-12/31/12 | 1/1/11-12/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold
|
1,871,559 | $19,442,490 | 2,421,949 | $24,300,088 | ||||||||||||||
Shares reinvested
|
123,649 | 1,286,721 | 127,474 | 1,279,128 | ||||||||||||||
Shares redeemed
|
+ | (1,828,071 | ) | (18,969,924 | ) | (2,534,578 | ) | (25,433,450 | ) | |||||||||
Net transactions in fund shares
|
167,137 | $1,759,287 | 14,845 | $145,766 | ||||||||||||||
Shares Outstanding and Net Assets
|
||||||||||||||||||
1/1/12-12/31/12 | 1/1/11-12/31/11 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period
|
7,898,997 | $79,689,835 | 7,884,152 | $77,980,271 | ||||||||||||||
Total increase
|
+ | 167,137 | 4,976,361 | 14,845 | 1,709,564 | |||||||||||||
End of period
|
8,066,134 | $84,666,196 | 7,898,997 | $79,689,835 | ||||||||||||||
Net investment income not yet distributed
|
$29,833 | $14,244 |
1/1/12 |
1/1/11 |
1/1/10 |
1/1/09 |
3/28/081 |
||||||||||||||||||
12/31/12 | 12/31/11 | 12/31/10 | 12/31/09 | 12/31/08 | ||||||||||||||||||
Per-Share Data ($)
|
||||||||||||||||||||||
Net asset value at beginning of period
|
10.09 | 9.90 | 9.56 | 9.19 | 10.00 | |||||||||||||||||
Income (loss) from investment operations:
|
||||||||||||||||||||||
Net investment income (loss)
|
0.20 | 0.25 | 0.30 | 0.45 | 0.34 | |||||||||||||||||
Net realized and unrealized gains (losses)
|
0.24 | 0.21 | 0.34 | 0.37 | (0.82 | ) | ||||||||||||||||
Total from investment operations
|
0.44 | 0.46 | 0.64 | 0.82 | (0.48 | ) | ||||||||||||||||
Less distributions:
|
||||||||||||||||||||||
Distributions from net investment income
|
(0.24 | ) | (0.27 | ) | (0.30 | ) | (0.45 | ) | (0.33 | ) | ||||||||||||
Net asset value at end of period
|
10.29 | 10.09 | 9.90 | 9.56 | 9.19 | |||||||||||||||||
Total return (%)
|
4.43 | 4.70 | 6.83 | 9.18 | (4.84 | )2 | ||||||||||||||||
Ratios/Supplemental Data (%)
|
||||||||||||||||||||||
Ratios to average net assets:
|
||||||||||||||||||||||
Net operating
expenses3
|
0.00 | 4 | 0.00 | 4 | 0.00 | 4 | 0.00 | 4 | 0.00 | 5 | ||||||||||||
Gross operating
expenses3
|
0.19 | 0.17 | 0.20 | 0.32 | 0.29 | 5 | ||||||||||||||||
Net investment income (loss)
|
1.99 | 2.53 | 3.12 | 4.96 | 4.68 | 5 | ||||||||||||||||
Portfolio turnover rate
|
19 | 10 | 20 | 12 | 24 | 2 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000)
|
73 | 78 | 68 | 52 | 29 |
Cost |
Value |
|||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .9% | Other Investment Companies | 68,385,773 | 72,515,687 | ||||||||
99 | .9% | Total Investments | 68,385,773 | 72,515,687 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 80,088 | |||||||||
100 | .0% | Total Net Assets | 72,595,775 |
Number |
Value |
|||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.9% of net assets
|
||||||||
Equity Funds 10.6% |
||||||||
Global Real Estate 5.1% | ||||||||
Schwab Global Real Estate Fund (a)
|
550,461 | 3,715,609 | ||||||
Large-Cap 5.5% | ||||||||
Schwab Dividend Equity Fund (a)
|
273,057 | 4,005,749 | ||||||
7,721,358 | ||||||||
Fixed-Income Funds 82.3% |
||||||||
Intermediate-Term Bond 60.7% | ||||||||
Schwab Intermediate-Term Bond Fund (a)
|
2,416,361 | 25,130,155 | ||||||
Schwab Total Bond Market Fund (a)
|
1,949,565 | 18,910,785 | ||||||
44,040,940 | ||||||||
International Bond 5.6% | ||||||||
Laudus Mondrian International Fixed Income Fund (a)
|
353,578 | 4,094,434 | ||||||
Short-Term Bond 16.0% | ||||||||
Schwab Short-Term Bond Market Fund (a)
|
1,243,471 | 11,589,153 | ||||||
59,724,527 | ||||||||
Money Market Funds 7.0% |
||||||||
Schwab Value Advantage Money Fund, Institutional Prime
Shares (a)
|
2,944,812 | 2,944,812 | ||||||
State Street Institutional U.S. Government Money Market Fund
|
2,124,990 | 2,124,990 | ||||||
5,069,802 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $68,385,773) | 72,515,687 | |||||||
End of Investments.
|
(a) | Issuer is affiliated with the funds adviser. |
Quoted
Prices in |
Significant |
|||||||||||||||
Active
Markets for |
Significant
Other |
Unobservable |
||||||||||||||
Identical
Assets |
Observable
Inputs |
Inputs |
||||||||||||||
Description
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total2
|
||||||||||||
Other Investment
Companies1
|
$72,515,687 | $ | $ | $72,515,687 | ||||||||||||
Total
|
$72,515,687 | $ | $ | $72,515,687 | ||||||||||||
1
|
As categorized in Portfolio Holdings. | |
2
|
The fund had no Other Financial Instruments. |
Assets
|
||||||
Investments in affiliated underlying funds, at value (cost
$66,260,783)
|
$70,390,697 | |||||
Investments in unaffiliated issuers, at value (cost $2,124,990)
|
+ | 2,124,990 | ||||
Total investments, at value (cost $68,385,773)
|
72,515,687 | |||||
Receivables:
|
||||||
Fund shares sold
|
438,396 | |||||
Dividends
|
85,163 | |||||
Due from investment adviser
|
1,490 | |||||
Interest
|
91 | |||||
Prepaid expenses
|
+ | 1,154 | ||||
Total assets
|
73,041,981 | |||||
Liabilities
|
||||||
Payables:
|
||||||
Fund shares redeemed
|
413,409 | |||||
Accrued expenses
|
+ | 32,797 | ||||
Total liabilities
|
446,206 | |||||
Net Assets
|
||||||
Total assets
|
73,041,981 | |||||
Total liabilities
|
− | 446,206 | ||||
Net assets
|
$72,595,775 | |||||
Net Assets by Source
|
||||||
Capital received from investors
|
69,361,766 | |||||
Net investment income not yet distributed
|
19,516 | |||||
Net realized capital losses
|
(915,421 | ) | ||||
Net unrealized capital gains
|
4,129,914 | |||||
Net Asset Value (NAV)
|
Shares |
||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$72,595,775
|
7,057,272 | $10.29 |
Investment Income
|
||||||
Dividends received from affiliated underlying funds
|
$1,531,544 | |||||
Interest
|
+ | 833 | ||||
Total investment income
|
1,532,377 | |||||
Expenses
|
||||||
Professional fees
|
60,243 | |||||
Shareholder reports
|
24,164 | |||||
Registration fees
|
22,099 | |||||
Portfolio accounting fees
|
18,837 | |||||
Transfer agent fees
|
13,849 | |||||
Trustees fees
|
6,189 | |||||
Custodian fees
|
1,485 | |||||
Interest expense
|
78 | |||||
State filing fee reimbursement (Note 4)
|
(2,059 | ) | ||||
Other expenses
|
+ | 2,381 | ||||
Total expenses
|
147,266 | |||||
Expense reduction by
CSIM1
|
− | 147,188 | ||||
Net expenses
|
− | 78 | ||||
Net investment income
|
1,532,299 | |||||
Realized and Unrealized Gains (Losses)
|
||||||
Realized capital gain distributions received from affiliated
underlying funds
|
468,506 | |||||
Net realized gains on sales of affiliated underlying funds
|
116,210 | |||||
Net realized gains on unaffiliated investments
|
+ | 5 | ||||
Net realized gains
|
584,721 | |||||
Net unrealized gains on investments
|
+ | 1,184,602 | ||||
Net realized and unrealized gains
|
1,769,323 | |||||
Increase in net assets resulting from operations
|
$3,301,622 |
1
|
Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $2,059. See financial note 4 for additional information. |
Operations
|
||||||||||
1/1/12-12/31/12 | 1/1/11-12/31/11 | |||||||||
Net investment income
|
$1,532,299 | $1,816,072 | ||||||||
Net realized gains
|
584,721 | 268,040 | ||||||||
Net unrealized gains
|
+ | 1,184,602 | 1,138,039 | |||||||
Increase in net assets from operations
|
3,301,622 | 3,222,151 | ||||||||
Distributions to Shareholders
|
||||||||||
Distributions from net investment income
|
($1,817,626 | ) | ($1,951,615 | ) |
1/1/12-12/31/12 | 1/1/11-12/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold
|
2,682,808 | $27,451,134 | 4,174,663 | $41,891,876 | ||||||||||||||
Shares reinvested
|
88,367 | 906,087 | 90,958 | 912,232 | ||||||||||||||
Shares redeemed
|
+ | (3,425,393 | ) | (35,077,129 | ) | (3,403,515 | ) | (34,075,168 | ) | |||||||||
Net transactions in fund shares
|
(654,218 | ) | ($6,719,908 | ) | 862,106 | $8,728,940 | ||||||||||||
Shares Outstanding and Net Assets
|
||||||||||||||||||
1/1/12-12/31/12 | 1/1/11-12/31/11 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period
|
7,711,490 | $77,831,687 | 6,849,384 | $67,832,211 | ||||||||||||||
Total increase or decrease
|
+ | (654,218 | ) | (5,235,912 | ) | 862,106 | 9,999,476 | |||||||||||
End of period
|
7,057,272 | $72,595,775 | 7,711,490 | $77,831,687 | ||||||||||||||
Net investment income not yet distributed
|
$19,516 | $11,746 |
Schwab Capital Trust (organized May 7, 1993)
|
Schwab MarketTrack Conservative Portfolio
|
|||
Schwab Monthly Income Fund-Moderate Payout
|
Laudus Small-Cap MarketMasters Fund
|
|||
Schwab Monthly Income Fund-Enhanced Payout
|
Laudus International MarketMasters Fund
|
|||
Schwab Monthly Income Fund-Maximum Payout
|
Schwab Balanced Fund
|
|||
Schwab Target 2010 Fund
|
Schwab Core Equity Fund
|
|||
Schwab Target 2015 Fund
|
Schwab Dividend Equity Fund
|
|||
Schwab Target 2020 Fund
|
Schwab Large-Cap Growth Fund
|
|||
Schwab Target 2025 Fund
|
Schwab Small-Cap Equity Fund
|
|||
Schwab Target 2030 Fund
|
Schwab Hedged Equity Fund
|
|||
Schwab Target 2035 Fund
|
Schwab Financial Services Fund
|
|||
Schwab Target 2040 Fund
|
Schwab Health Care Fund
|
|||
Schwab S&P 500 Index Fund
|
Schwab International Core Equity Fund
|
|||
Schwab Small-Cap Index Fund
|
Schwab Fundamental US Large Company Index Fund
|
|||
Schwab Total Stock Market Index Fund
|
Schwab Fundamental US Small Company Index Fund
|
|||
Schwab International Index Fund
|
Schwab Fundamental International Large Company Index Fund
|
|||
Schwab MarketTrack All Equity Portfolio
|
Schwab Fundamental International Small Company Index Fund
|
|||
Schwab MarketTrack Growth Portfolio
|
Schwab Fundamental Emerging Markets Large Company Index Fund
|
|||
Schwab MarketTrack Balanced Portfolio
|
||||
| Underlying funds: valued at their respective net asset values. | |
| Securities for which no quoted value is available: The Board has adopted procedures to fair value each funds securities when market prices are not readily available or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a securitys primary pricing source is unable or unwilling to provide a |
price; or when a securitys primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the funds valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the procedures. |
| Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value. |
| Level 1 quoted prices in active markets for identical securities Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. Investments in underlying funds are valued at their NAV daily and are classified as Level 1 prices. | |
| Level 2 other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. | |
| Level 3 significant unobservable inputs (including the funds own assumptions in determining the fair value of investments) Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds results of operations. |
| Investment Risk. An investment in an underlying fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may experience losses with respect to its investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective. | |
| Management Risk. Generally, the underlying funds are actively managed mutual funds. Any actively managed mutual fund is subject to the risk that its investment adviser (or sub-advisers) will make poor security selections. An underlying funds 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. | |
| Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time. | |
| Large-, Mid- and Small-Cap Risk. Stocks of different market capitalizations tend to go in and out of favor based on market and economic conditions. Historically, small- and mid-cap stocks tend to be more volatile than large-cap stocks, and small-cap stocks have been riskier than large- and mid- cap stocks. During a period when stocks of a particular market capitalization fall behind other types of investments bonds or stocks of another capitalization range, for instance an underlying funds performance could be reduced to the extent its portfolio is holding stocks of the particular capitalization. | |
| Fixed Income Risk. Interest rates rise and fall over time, which will affect an underlying funds yield and share price. The credit quality of a portfolio investment could also cause an underlying funds share price to fall. An underlying fund could lose money if the issuer or guarantor of a portfolio investment or the counterparty to a derivatives contract fails to make timely principal or interest payments or otherwise honor its obligations. Fixed income securities may be paid off earlier or later than expected. Either situation could cause an underlying fund to hold securities paying lower-than-market rates of interest, which could hurt the funds yield or share price. Below investment-grade bonds (junk bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturns than investment-grade securities. | |
| Foreign Investment Risk. An underlying funds investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial |
reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets. |
| Derivatives Risk. An underlying funds use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments and could cause the fund to lose more than the principal amount invested. | |
| Leverage Risk. Certain underlying fund transactions, such as derivatives, short sales, reverse repurchase agreements, and mortgage dollar rolls, may give rise to a form of leverage and may expose a fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of an underlying funds portfolio securities, which means even a small amount of leverage can have a disproportionately large impact on the fund. | |
| Money Market Risk. Although an underlying money market fund seeks to maintain a stable $1 net asset value, it is possible to lose money by investing in a money market fund. In addition, a money market fund is not designed to offer capital appreciation. | |
| Liquidity Risk. A particular investment may be difficult to purchase or sell. An underlying fund may be unable to sell illiquid securities at an advantageous time or price. | |
| Exchange-Traded Funds (ETFs) Risk. When an underlying fund invests in an ETF, it will bear a proportionate share of the ETFs expenses. In addition, lack of liquidity in an ETF can result in its value being more volatile than the underlying portfolio of securities. | |
| Securities Lending Risk. Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent. |
Schwab |
Schwab |
Schwab |
||||||||||
Monthly
Income Fund |
Monthly
Income Fund |
Monthly
Income Fund |
||||||||||
-Moderate
Payout
|
-Enhanced
Payout
|
-Maximum
Payout
|
||||||||||
Schwab Global Real Estate Fund
|
1.6% | 3.1% | 1.7% | |||||||||
Laudus International MarketMasters Fund, Select Shares
|
0.1% | 0.2% | | |||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund
|
0.1% | 0.2% | | |||||||||
Schwab Dividend Equity Fund
|
0.4% | 0.7% | 0.3% | |||||||||
Schwab Intermediate-Term Bond Fund
|
1.8% | 6.2% | 6.3% | |||||||||
Schwab Total Bond Market Fund
|
0.6% | 2.1% | 2.0% | |||||||||
Laudus Mondrian International Fixed Income Fund
|
0.1% | 0.4% | 0.5% | |||||||||
Schwab Short-Term Bond Market Fund
|
0.8% | 2.4% | 2.6% | |||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares
|
| 0.0% | * | 0.0% | * |
*
|
Less than 0.1%. |
Schwab Monthly Income Fund Moderate Payout: | ||||||||||||||||||||||||||||
Balance |
Balance |
Realized |
Distributions |
|||||||||||||||||||||||||
of
Shares |
of
Shares |
Market |
Gain
(Loss) |
Received* |
||||||||||||||||||||||||
Held
at |
Gross |
Gross |
Held
at |
Value
at |
1/1/12 |
1/1/12 |
||||||||||||||||||||||
Underlying
Funds
|
12/31/11
|
Additions
|
Sales
|
12/31/12
|
12/31/12
|
to
12/31/12
|
to
12/31/12
|
|||||||||||||||||||||
Schwab Global Real Estate Fund
|
418,454 | 126,690 | (35,061 | ) | 510,083 | $3,443,058 | ($42,551 | ) | $194,969 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares
|
77,051 | 30,609 | (7,406 | ) | 100,254 | 1,987,027 | (5,336 | ) | 45,673 | |||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund
|
105,054 | 68,385 | (24,448 | ) | 148,991 | 2,148,447 | (11,293 | ) | 39,746 | |||||||||||||||||||
Schwab Dividend Equity Fund
|
276,537 | 113,746 | (42,764 | ) | 347,519 | 5,098,103 | 2,591 | 109,500 | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund
|
478,055 | 253,389 | (42,032 | ) | 689,412 | 7,169,882 | (709 | ) | 239,388 | |||||||||||||||||||
Schwab Total Bond Market Fund
|
421,147 | 165,426 | (27,732 | ) | 558,841 | 5,420,758 | (1,100 | ) | 121,283 | |||||||||||||||||||
Laudus Mondrian International Fixed Income Fund
|
78,799 | 24,407 | (2,919 | ) | 100,287 | 1,161,327 | (808 | ) | 21,369 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund
|
260,340 | 162,791 | (28,993 | ) | 394,138 | 3,673,366 | (1,740 | ) | 28,185 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares
|
297,104 | | (297,104 | ) | | | | 21 | ||||||||||||||||||||
Total
|
$30,101,968 | ($60,946 | ) | $800,134 | ||||||||||||||||||||||||
Schwab Monthly Income Fund Enhanced Payout: | ||||||||||||||||||||||||||||
Balance |
Balance |
Realized |
Distributions |
|||||||||||||||||||||||||
of
Shares |
of
Shares |
Market |
Gain
(Loss) |
Received* |
||||||||||||||||||||||||
Held
at |
Gross |
Gross |
Held
at |
Value
at |
1/1/12 |
1/1/12 |
||||||||||||||||||||||
Underlying
Funds
|
12/31/11
|
Additions
|
Sales
|
12/31/12
|
12/31/12
|
to
12/31/12
|
to
12/31/12
|
|||||||||||||||||||||
Schwab Global Real Estate Fund
|
1,098,592 | 13,522 | (98,531 | ) | 1,013,583 | $6,841,687 | $36,085 | $411,780 | ||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares
|
142,721 | 14,512 | (16,879 | ) | 140,354 | 2,781,817 | (878 | ) | 64,805 | |||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund
|
190,191 | 69,739 | (46,852 | ) | 213,078 | 3,072,579 | 2,651 | 57,516 | ||||||||||||||||||||
Schwab Dividend Equity Fund
|
651,152 | 32,088 | (62,075 | ) | 621,165 | 9,112,484 | 38,967 | 209,092 | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund
|
2,220,489 | 233,982 | (78,361 | ) | 2,376,110 | 24,711,549 | (3,993 | ) | 876,752 | |||||||||||||||||||
Schwab Total Bond Market Fund
|
2,007,072 | 103,907 | (103,836 | ) | 2,007,143 | 19,469,285 | (13,264 | ) | 492,680 | |||||||||||||||||||
Laudus Mondrian International Fixed Income Fund
|
326,696 | 10,078 | (33,184 | ) | 303,590 | 3,515,570 | (9,741 | ) | 69,984 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund
|
1,039,800 | 166,504 | (39,089 | ) | 1,167,215 | 10,878,446 | (864 | ) | 94,793 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares
|
2,618,156 | 900,000 | (1,800,000 | ) | 1,718,156 | 1,718,156 | | 820 | ||||||||||||||||||||
Total
|
$82,101,573 | $48,963 | $2,278,222 | |||||||||||||||||||||||||
Schwab Monthly Income Fund Maximum Payout: | ||||||||||||||||||||||||||||
Balance |
Balance |
Realized |
Distributions |
|||||||||||||||||||||||||
of
Shares |
of
Shares |
Market |
Gain
(Loss) |
Received* |
||||||||||||||||||||||||
Held
at |
Gross |
Gross |
Held
at |
Value
at |
1/1/12 |
1/1/12 |
||||||||||||||||||||||
Underlying
Funds
|
12/31/11
|
Additions
|
Sales
|
12/31/12
|
12/31/12
|
to
12/31/12
|
to
12/31/12
|
|||||||||||||||||||||
Schwab Global Real Estate Fund
|
685,113 | 79,102 | (213,754 | ) | 550,461 | $3,715,609 | $61,717 | $235,877 | ||||||||||||||||||||
Schwab Dividend Equity Fund
|
300,199 | 88,079 | (115,221 | ) | 273,057 | 4,005,749 | 58,397 | 94,645 | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund
|
2,572,832 | 499,804 | (656,275 | ) | 2,416,361 | 25,130,155 | 316 | 949,920 | ||||||||||||||||||||
Schwab Total Bond Market Fund
|
2,205,617 | 333,525 | (589,577 | ) | 1,949,565 | 18,910,785 | 64,778 | 522,099 | ||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund
|
419,604 | 75,807 | (141,833 | ) | 353,578 | 4,094,434 | (46,992 | ) | 85,460 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund
|
1,267,226 | 290,506 | (314,261 | ) | 1,243,471 | 11,589,153 | (22,006 | ) | 110,165 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares
|
3,444,813 | 649,999 | (1,150,000 | ) | 2,944,812 | 2,944,812 | | 1,884 | ||||||||||||||||||||
Total
|
$70,390,697 | $116,210 | $2,000,050 | |||||||||||||||||||||||||
*
|
Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases
of Securities
|
Sales/Maturities
of Securities
|
|||||||
Schwab Monthly Income Fund - Moderate Payout
|
$10,062,000 | $2,637,105 | ||||||
Schwab Monthly Income Fund - Enhanced Payout
|
7,862,000 | 6,874,000 | ||||||
Schwab Monthly Income Fund - Maximum Payout
|
14,427,000 | 21,288,000 |
Schwab |
Schwab |
Schwab |
||||||||||
Monthly
Income Fund - |
Monthly
Income Fund - |
Monthly
Income Fund - |
||||||||||
Moderate
Payout
|
Enhanced
Payout
|
Maximum
Payout
|
||||||||||
Undistributed ordinary income
|
$7,416 | $29,833 | $19,516 | |||||||||
Undistributed long-term capital gains
|
| | | |||||||||
Unrealized appreciation on investments
|
2,061,277 | 7,398,455 | 3,355,763 | |||||||||
Other unrealized appreciation/(depreciation)
|
| | | |||||||||
Net unrealized appreciation/(depreciation)
|
$2,061,277 | $7,398,455 | $3,355,763 | |||||||||
Schwab |
Schwab |
Schwab |
||||||||||
Monthly
Income Fund - |
Monthly
Income Fund - |
Monthly
Income Fund - |
||||||||||
Expiration
Date
|
Moderate
Payout
|
Enhanced
Payout
|
Maximum
Payout
|
|||||||||
December 31, 2015
|
$ | $4,546,740 | $ | |||||||||
December 31, 2016
|
| 819,197 | | |||||||||
December 31, 2017
|
28,402 | 1,676,892 | 140,407 | |||||||||
December 31, 2018
|
52,997 | | | |||||||||
Total
|
$81,399 | $7,042,829 | $140,407 | |||||||||
Schwab |
Schwab |
Schwab |
||||||||||
Monthly
Income Fund - |
Monthly
Income Fund - |
Monthly
Income Fund - |
||||||||||
Moderate
Payout
|
Enhanced
Payout
|
Maximum
Payout
|
||||||||||
Capital losses deferred
|
$ | $ | $863 | |||||||||
Capital losses utilized
|
44,535 | 283,904 | 323,185 |
Schwab |
Schwab |
Schwab |
||||||||||
Monthly
Income Fund - |
Monthly
Income Fund - |
Monthly
Income Fund - |
||||||||||
Moderate
Payout
|
Enhanced
Payout
|
Maximum
Payout
|
||||||||||
Current period distributions
|
||||||||||||
Ordinary income
|
$730,128 | $2,071,784 | $1,817,626 | |||||||||
Long-term capital gains
|
| | | |||||||||
Return of capital
|
| | | |||||||||
Prior period distributions
|
||||||||||||
Ordinary income
|
$526,971 | $2,068,651 | $1,951,615 | |||||||||
Long-term capital gains
|
| | | |||||||||
Return of capital
|
| | |
Schwab |
Schwab |
Schwab |
||||||||||
Monthly
Income Fund - |
Monthly
Income Fund - |
Monthly
Income Fund - |
||||||||||
Moderate
Payout
|
Enhanced
Payout
|
Maximum
Payout
|
||||||||||
Capital shares
|
$ | $ | $ | |||||||||
Undistributed net investment income
|
98,549 | 303,301 | 293,097 | |||||||||
Net realized capital gains/(losses)
|
(98,549 | ) | (303,301 | ) | (293,097 | ) |
Percentage
|
|||||
Schwab Monthly Income Fund - Moderate Payout
|
15.87 | ||||
Schwab Monthly Income Fund - Enhanced Payout
|
10.63 | ||||
Schwab Monthly Income Fund - Maximum Payout
|
5.03 |
Schwab Monthly Income Fund - Moderate Payout
|
$183,879 | |||
Schwab Monthly Income Fund - Enhanced Payout
|
327,953 | |||
Schwab Monthly Income Fund - Maximum Payout
|
117,671 |
Name, Year of Birth, |
Number of |
|||||
and Position(s) with |
Portfolios in |
|||||
the trust; (Terms of |
Fund Complex |
|||||
office, and length of |
Principal Occupations |
Overseen by |
||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) |
Chairman of JDN Corporate Advisory LLC. | 77 |
Director, Redwood Trust, Inc.
(1998 present) Director, PMI Group Inc. (2001 2009) |
|||
John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust since 2008.) |
Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 present); Senior Fellow, Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University (Sept. 1994 present). | 77 |
Director, Gilead Sciences, Inc.
(2005 present) Director, Monaco Coach Corporation (2005 2009) |
|||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) |
Dean Emeritus, Haas School of Business, University of California, Berkeley (July 1998 present). | 77 |
Director, TOUSA
(1998 present) Director, Mission West Properties (1998 present) Director, Globalstar, Inc. (2009 present) Director, Aviat Networks (2001 present) Director, Ditech Networks Corporation (1997 Jan. 2012) Director, Aphton Corp. (1991 2007) Director, Solectron Corporation (1998 2007) Director, Genitope Corporation (2000 2009) |
|||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) |
Private Investor. | 77 |
Director, Symantec Corporation
(2003 present) Director, Corcept Therapeutics Incorporated (2004 present) Director, Tercica Inc. (2004 2008) |
|||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) |
Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 present); Senior Vice President and General Manager of Consumer Group, Intuit, Inc. (June 2007 Dec. 2008); Senior Vice President and Chief Financial Officer, Intuit, Inc. (Sept. 2005 Jan. 2008). | 77 |
Director, KLA-Tencor Corporation
(2008 present) Director, BEA Systems, Inc. (2007 2008) Director, Eaton Corp. (2003 2006) |
|||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) |
Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 present). | 77 |
Lead Independent Director, Board of Cooper Industries
(2002 present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 present) Director, Oneok, Inc (2009 present) |
|||
Name, Year of Birth, |
Number of |
|||||
and Position(s) with |
Portfolios in |
|||||
the trust; (Terms of |
Fund Complex |
|||||
office, and length of |
Principal Occupations |
Overseen by |
||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) |
Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 June 2005). | 77 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 present) | |||
Name, Year of Birth, |
Number of |
|||||
and Position(s) with |
Portfolios in |
|||||
the trust; (Terms of |
Fund Complex |
|||||
office, and length of |
Principal Occupations |
Overseen by |
||||
Time Served ) | During the Past Five Years | the Trustee | Other Directorships | |||
Charles R.
Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1993.) |
Chairman and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc. | 77 | None | |||
Walter W. Bettinger
II2 1960 Trustee (Trustee of Schwab Capital Trust since 2008.) |
As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services. | 94 | None | |||
Name, Year of Birth, and Position(s) |
||
with the trust; (Terms of office, and |
||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) |
Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 present); Director, President and Chief Executive Officer (Dec. 2010 present), Chief Investment Officer (Sept. 2010 Oct. 2011), Charles Schwab Investment Management, Inc.; President and Chief Executive Officer (Dec. 2010 present) and Chief Investment Officer (Dec. 2010 Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 August 2010); Co-Head and Senior Portfolio Manager, Wells Capital Management (June 1999 March 2007). | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) |
Senior Vice President and Chief Financial Officer (Nov. 2004 present); Chief Operating Officer (Jan. 2011 present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 present) and Schwab ETFs (Oct. 2009 present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 present); Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (June 2006 June 2007). | |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer Equities (Officer of Schwab Capital Trust since 2011.) |
Senior Vice President and Chief Investment Officer Equities, Charles Schwab Investment Management, Inc. (April 2011 present); Senior Vice President and Chief Investment Officer Equities, Schwab Funds and Laudus Funds (June 2011 present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 Jan. 2009). | |
Brett Wander 1961 Senior Vice President and Chief Investment Officer Fixed Income (Officer of Schwab Capital Trust since 2011.) |
Senior Vice President and Chief Investment Officer Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 present); Senior Vice President and Chief Investment Officer Fixed Income, Schwab Funds and Laudus Funds (June 2011 present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 Oct. 2010); Director of Alpha Strategies, Loomis, Sayles & Company (April 2006 Jan. 2008); Managing Director, Head of Market-Based Strategies, State Street Research (August 2003 Jan. 2005). | |
David Lekich 1964 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 2011.) |
Senior Vice President, Charles Schwab & Co., Inc., (Sept. 2011 present); Senior Vice President and Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 present); Vice President, Charles Schwab & Co., Inc., (March 2004 Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 Sept. 2011); Secretary, Schwab Funds (April 2011 present); Vice President and Assistant Clerk, Laudus Funds (April 2011 present); Secretary (May 2011 present) and Chief Legal Officer (Nov. 2011 present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) |
Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 present); Vice President (Dec. 2005 present), Chief Legal Officer and Clerk (March 2007 present), Laudus Funds; Vice President (Nov. 2005 present) and Assistant Secretary (June 2007 present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 present). | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds® retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the Schwab Funds retirement policy also requires any independent trustee of the Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first. | |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they are employees of Schwab. In addition to their employment with Schwab, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation, the parent company of Schwab and the investment adviser. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
(a) | Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, and any other persons who perform a similar function, regardless of whether these individuals are employed by Registrant or a third party. | |
(c) | During the period covered by the report, no amendments were made to the provisions of this code of ethics. | |
(d) | During the period covered by the report, Registrant did not grant any waivers, including implicit waivers, from the provisions of this code of ethics. | |
(f)(1) | Registrant has filed this code of ethics as an exhibit pursuant to Item 12(a)(1) of Form N-CSR. |
Nature of these services: | review of the methodology of allocation of Charles Schwab & Co., Inc. (Schwab) expenses for purposes of Section 15(c) of the Investment Company Act of 1940. |
(a) | Based on their evaluation of Registrants disclosure controls and procedures, as of a date within 90 days of the filing date, Registrants Chief Executive Officer, Marie Chandoha and Registrants Principal Financial Officer, George Pereira, have concluded that Registrants disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrants officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. | |
(b) | During the second fiscal quarter of the period covered by this report, there have been no changes in Registrants internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrants internal control over financial reporting. |
(a) | (1) Registrants code of ethics (that is the subject of the disclosure required by Item 2(a)) is attached. |
(2) | Separate certifications for Registrants principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached. |
(3) | Not applicable. |
(b) | A certification for Registrants principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSR with the Commission. |
By: | /s/ Marie Chandoha | |||
Marie Chandoha | ||||
Chief Executive Officer | ||||
By: | /s/ Marie Chandoha | |||
Marie Chandoha | ||||
Chief Executive Officer | ||||
By: | /s/ George Pereira | |||
George Pereira | ||||
Principal Financial Officer | ||||
Effective Date
|
October 10, 2012 | |
Functional Applicability
|
Business Conduct of Fund Officers | |
Approver(s)
|
Investment Company Board of Trustees | |
Policy Owner
|
Investment Company Board of Trustees | |
Last Review/Update
|
October 10, 2012 | |
Next Approximate Review Date
|
October 10, 2013 |
1
Title | Name | Phone Number | ||
Chief Compliance Officer
|
Michael F. Hogan | 415-667-1987 | ||
Chief Legal Officer of CSIM,
Schwab Funds and Schwab ETFs
|
David Lekich | 415-667-0660 | ||
Chief Legal Officer of Laudus Funds
|
Catherine MacGregor | 415-667-0650 | ||
The Charles Schwab Corporation Ombudsperson
|
Sam Scott Miller, Esq. Orrick Herrington & Sutcliffe LLP | 212-506-5130 |
2
3
§ | Offering or paying bribes or other financial incentives, including offering future employment or contracts for non-audit services | ||
§ | Providing an auditor with inaccurate or misleading legal analysis | ||
§ | Threatening to cancel or canceling existing non-audit or audit engagements if the auditor objects to the issuers accounting | ||
§ | Seeking to have a partner removed from the audit engagement because the partner objects to the Funds accounting | ||
§ | Blackmailing | ||
§ | Making physical threats |
4
§ | Read and be familiar with conduct rules outlined in the Code, and periodically review them. | |
§ | Affirm in writing to the Trustees that you have received, read and understand the Code. | |
§ | Annually affirm to the Trustees that you have complied with the requirements of the Code. | |
§ | Comply with the conduct standards outlined in this Code in all dealings and actions, including those with shareholders, the public, and vendors. |
5
§ | Report any material transaction or relationship to the Chief Compliance Officer that reasonably could be expected to be or to create a personal conflict of interest with the Funds. | |
§ | Report in a timely manner to the Chief Compliance Officer any conduct that may constitute a violation of the Code, the Funds policies, or laws, rules and regulations. | |
§ | Raise questions or concerns about conduct issues with your supervisor, the Chief Legal Officer or Chief Compliance Officer, and seek advice when in doubt. | |
§ | Cooperate with management during fact-finding investigations and comply with any confidentiality rules imposed. |
§ | The Chief Compliance Officer, upon becoming notified of potential violation of this Code, will conduct, facilitate or delegate a review of the matter and will report to the Chairperson of affected Funds Audit and Compliance Committee any violations of this Code that he or she believes to be material. | |
§ | The Chief Compliance Officer, upon becoming notified of a personal conflict of interest between an Officer and the Funds that the Chief Compliance Officer deems to be material, will report the issue to the Chairperson of the affected Funds Audit and Compliance Committee and will work with legal and other appropriate parties to ensure that any required disclosures are made. |
§ | The Board of Trustees will consider appropriate action to address any violations of the Code that they deem to be material, which may include review of and appropriate modification to applicable policies and procedures, notification to appropriate personnel of CSIM or its board, notification to appropriate personnel of The Charles Schwab Corporation or its board, or a recommendation to dismiss the Officer. |
§ | Schwab Funds: June 15, 2011 | |
§ | Laudus Funds: June 15, 2011 | |
§ | Schwab ETFs: August 4, 2011 |
6
Date: 2/15/2013
|
/s/ Marie Chandoha
|
|||||
President and Chief Executive Officer |
Date: 2/15/2013
|
/s/ George Pereira
|
|||||
Treasurer and Principal Financial Officer |
/s/ Marie Chandoha
|
Date: | 02/15/13 | ||
President and Chief Executive Officer |
||||
/s/ George Pereira
|
Date: | 02/15/13 | ||
Treasurer and Principal Financial Officer |
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