UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07704
Schwab Capital Trust Schwab Fundamental Global Real Estate Index Fund
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
Jonathan de St. Paer
Schwab Capital Trust
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrants telephone number, including area code: (415) 636-7000
Date of fiscal year end: February 28
Date of reporting period: February 28, 2021
Item 1: Report(s) to Shareholders.
Total Returns for the 12 Months Ended February 28, 2021 | |
Schwab Fundamental Global Real Estate Index Fund (Ticker Symbol: SFREX) | 3.71% 1 |
Russell RAFITM Global Select Real Estate Index (Net)2 | 3.93% |
FTSE EPRA Nareit Global Index (Net)2 | 0.67% |
Fund Category: Morningstar Global Real Estate3 | 3.74% |
Performance Details | pages 7-9 |
1 | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
2 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
3 | 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. |
* | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
* | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Christopher Bliss, CFA, Vice President and Head of Passive Equity Strategies, leads the portfolio management team for Schwab’s passive equity mutual funds and ETFs. He also has overall responsibility for all aspects of the management of the fund. Before joining CSIM in 2016, Mr. Bliss spent 12 years at BlackRock (formerly Barclays Global Investors) managing and leading institutional index teams, most recently as a managing director and the head of the Americas institutional index team. Prior to BlackRock, he worked as an equity analyst and portfolio manager for Harris Bretall and before that, as a research analyst for JP Morgan. |
Chuck Craig, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to joining CSIM in 2012, Mr. Craig worked at Guggenheim Funds (formerly Claymore Group), where he spent more than five years as a managing director of portfolio management and supervision, and three years as vice president of product research and development. Prior to that, he worked as an equity research analyst at First Trust Portfolios (formerly Niké Securities), and a trader and analyst at PMA Securities, Inc. |
Jane Qin, Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to joining CSIM in 2012, Ms. Qin spent more than four years at The Bank of New York Mellon Corporation. During that time, Ms. Qin spent more than two years as an associate equity portfolio manager and nearly two years as a performance analyst. She also worked at Wells Fargo Funds Management as a mutual fund analyst and at CIGNA Reinsurance in the risk management group as a risk analyst. |
David Rios, Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to this role, Mr. Rios was an associate portfolio manager on the Schwab equity index strategies team for four years. His first role with CSIM was as a trade operations specialist. Prior to joining CSIM in 2008, Mr. Rios was a senior fund accountant at Investors Bank & Trust (subsequently acquired by State Street Corporation). |
1 | Total return for the report period above differs from the return in the Financial Highlights. The total return presented above is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
2 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Fund and Inception Date | 1 Year | 5 Years | Since Inception |
Fund: Schwab Fundamental Global Real Estate Index Fund (10/22/14) | 3.71% 2 | 7.56% | 5.70% |
Russell RAFITM Global Select Real Estate Index (Net)3 | 3.93% | 7.24% | 5.43% |
FTSE EPRA Nareit Global Index (Net)3 | 0.67% | 5.64% | 4.17% |
Fund Category: Morningstar Global Real Estate4 | 3.74% | 6.68% | N/A |
Fund Expense Ratio5: 0.39% |
1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. |
2 | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
4 | 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. |
5 | As stated in the prospectus. |
1 | Excludes derivatives. |
2 | This list is not a recommendation of any security by the investment adviser. |
3 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
Expense
Ratio (Annualized)1 |
Beginning
Account Value at 9/1/20 |
Ending
Account Value (Net of Expenses) at 2/28/21 |
Expenses
Paid During Period 9/1/20-2/28/212 | |
Schwab Fundamental Global Real Estate Index Fund | ||||
Actual Return | 0.39% | $1,000.00 | $1,189.40 | $2.12 |
Hypothetical 5% Return | 0.39% | $1,000.00 | $1,022.87 | $1.96 |
1 | Based on the most recent six-month expense ratio. |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days of the period, and divided by the 365 days of the fiscal year. |
3/1/20–
2/28/21 |
3/1/19–
2/29/20 |
3/1/18–
2/28/19 |
3/1/17–
2/28/18 |
3/1/16–
2/28/17 |
||
Per-Share Data | ||||||
Net asset value at beginning of period | $11.06 | $11.43 | $11.24 | $10.73 | $9.53 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.30 | 0.37 | 0.37 | 0.34 | 0.29 | |
Net realized and unrealized gains (losses) | 0.05 | (0.24) | 0.38 | 0.59 | 1.42 | |
Total from investment operations | 0.35 | 0.13 | 0.75 | 0.93 | 1.71 | |
Less distributions: | ||||||
Distributions from net investment income | (0.34) | (0.47) | (0.44) | (0.39) | (0.43) | |
Distributions from net realized gains | (0.02) | (0.03) | (0.12) | (0.03) | (0.08) | |
Total distributions | (0.36) | (0.50) | (0.56) | (0.42) | (0.51) | |
Net asset value at end of period | $11.05 | $11.06 | $11.43 | $11.24 | $10.73 | |
Total return | 3.62% | 0.91% | 7.00% | 8.69% | 18.26% | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Total expenses | 0.39% | 0.39% | 0.39% | 0.43% 2 | 0.91% | |
Net operating expenses | N/A | N/A | N/A 3 | 0.41% 2 | 0.49% | |
Net investment income (loss) | 3.17% | 3.16% | 3.32% | 3.01% | 2.72% | |
Portfolio turnover rate | 25% | 16% | 16% | 13% | 23% | |
Net assets, end of period (x 1,000,000) | $157 | $196 | $190 | $158 | $93 | |
Description | Quoted
Prices in Active Markets for Identical Assets (Level 1) |
Other
Significant Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
Total | |
Assets | |||||
Common Stock1 | $82,660,455 | $— | $— | $82,660,455 | |
Australia | — | 7,603,466 | — | 7,603,466 | |
Austria | — | 284,053 | — | 284,053 | |
Belgium | — | 466,071 | — | 466,071 | |
China | — | 15,345,026 | — | 15,345,026 | |
France | — | 2,553,355 | — | 2,553,355 | |
Germany | 192,416 | 3,198,729 | — | 3,391,145 | |
Hong Kong | — | 15,174,129 | — | 15,174,129 | |
Japan | — | 11,072,009 | — | 11,072,009 | |
Netherlands | — | 2,845,729 | — | 2,845,729 | |
Philippines | — | — | 763,553 | 763,553 | |
Singapore | — | 2,242,443 | — | 2,242,443 | |
South Africa | 507,010 | 1,413,386 | — | 1,920,396 | |
Sweden | — | 1,299,348 | — | 1,299,348 | |
Switzerland | — | 1,200,185 | — | 1,200,185 | |
Taiwan | — | 684,597 | — | 684,597 | |
Thailand | — | 1,007,290 | — | 1,007,290 | |
United Arab Emirates | — | 1,990,355 | — | 1,990,355 | |
United Kingdom | 115,927 | 3,540,853 | 21,645 | 3,678,425 | |
Other Investment Companies1 | 119,787 | — | — | 119,787 | |
Short-Term Investments1 | — | 274,728 | — | 274,728 | |
Liabilities | |||||
Futures Contracts2 | (10,356) | — | — | (10,356) | |
Total | $83,585,239 | $72,195,752 | $785,198 | $156,566,189 |
1 | As categorized in Portfolio Holdings. |
2 | Futures contracts are valued at unrealized appreciation or depreciation. |
Assets | ||
Investments in unaffiliated issuers, at value (cost $138,494,626) including securities on loan of $20,279 | $156,494,588 | |
Collateral invested for securities on loan, at value (cost $81,957) | 81,957 | |
Foreign currency, at value (cost $15,273) | 15,184 | |
Deposit with broker for futures contracts | 57,035 | |
Receivables: | ||
Investments sold | 3,572,239 | |
Fund shares sold | 169,136 | |
Dividends | 120,239 | |
Foreign tax reclaims | 61,655 | |
Income from securities on loan | 2,848 | |
Prepaid expenses | + | 16,151 |
Total assets | 160,591,032 | |
Liabilities | ||
Collateral held for securities on loan | 81,957 | |
Payables: | ||
Investments bought | 3,623,602 | |
Investment adviser fees | 46,297 | |
Fund shares redeemed | 71,311 | |
Variation margin on futures contracts | + | 6,827 |
Total liabilities | 3,829,994 | |
Net Assets | ||
Total assets | 160,591,032 | |
Total liabilities | – | 3,829,994 |
Net assets | $156,761,038 | |
Net Assets by Source | ||
Capital received from investors | 158,291,517 | |
Total distributable loss | (1,530,479) |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares
Outstanding |
= | NAV |
$156,761,038 | 14,188,902 | $11.05 | ||
Investment Income | ||
Dividends (net of foreign withholding tax of $259,014) | $5,337,169 | |
Interest | 22 | |
Securities on loan, net | + | 144,368 |
Total investment income | 5,481,559 | |
Expenses | ||
Investment adviser fees | 599,724 | |
Total expenses | – | 599,724 |
Net investment income | 4,881,835 | |
Realized and Unrealized Gains (Losses) | ||
Net realized losses on investments | (13,635,476) | |
Net realized gains on futures contracts | 474,115 | |
Net realized losses on foreign currency transactions | + | (13,792) |
Net realized losses | (13,175,153) | |
Net change in unrealized appreciation (depreciation) on investments | 9,714,244 | |
Net change in unrealized appreciation (depreciation) on futures contracts | (10,356) | |
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 3,610 |
Net change in unrealized appreciation (depreciation) | + | 9,707,498 |
Net realized and unrealized losses | (3,467,655) | |
Increase in net assets resulting from operations | $1,414,180 |
Operations | ||||
3/1/20-2/28/21 | 3/1/19-2/29/20 | |||
Net investment income | $4,881,835 | $6,406,902 | ||
Net realized losses | (13,175,153) | (65,011) | ||
Net change in unrealized appreciation (depreciation) | + | 9,707,498 | (4,754,715) | |
Increase in net assets from operations | 1,414,180 | 1,587,176 | ||
Distributions to Shareholders | ||||
Total distributions | ($5,517,992) | ($8,533,108) |
Transactions in Fund Shares | ||||||||
3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
SHARES | VALUE | SHARES | VALUE | |||||
Shares sold | 5,247,518 | $47,285,146 | 4,259,943 | $50,077,798 | ||||
Shares reinvested | 427,872 | 4,177,814 | 558,497 | 6,570,311 | ||||
Shares redeemed | + | (9,188,770) | (86,314,753) | (3,765,445) | (44,219,607) | |||
Net transactions in fund shares | (3,513,380) | ($34,851,793) | 1,052,995 | $12,428,502 | ||||
Shares Outstanding and Net Assets | ||||||||
3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
Beginning of period | 17,702,282 | $195,716,643 | 16,649,287 | $190,234,073 | ||||
Total increase (decrease) | + | (3,513,380) | (38,955,605) | 1,052,995 | 5,482,570 | |||
End of period | 14,188,902 | $156,761,038 | 17,702,282 | $195,716,643 |
SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) | |
Schwab Fundamental Global Real Estate Index Fund | Schwab Target 2015 Fund |
Schwab Fundamental US Large Company Index Fund | Schwab Target 2020 Fund |
Schwab Fundamental US Small Company Index Fund | Schwab Target 2025 Fund |
Schwab Fundamental International Large Company Index Fund | Schwab Target 2030 Fund |
Schwab Fundamental International Small Company Index Fund | Schwab Target 2035 Fund |
Schwab Fundamental Emerging Markets Large Company Index Fund | Schwab Target 2040 Fund |
Schwab S&P 500 Index Fund | Schwab Target 2045 Fund |
Schwab Small-Cap Index Fund® | Schwab Target 2050 Fund |
Schwab Total Stock Market Index Fund® | Schwab Target 2055 Fund |
Schwab U.S. Large-Cap Growth Index Fund | Schwab Target 2060 Fund |
Schwab U.S. Large-Cap Value Index Fund | Schwab Target 2065 Fund |
Schwab U.S. Mid-Cap Index Fund | Schwab Monthly Income Fund — Moderate Payout |
Schwab International Index Fund® | Schwab Monthly Income Fund — Enhanced Payout |
Schwab MarketTrack All Equity Portfolio™ | Schwab Monthly Income Fund — Maximum Payout |
Schwab MarketTrack Growth Portfolio™ | Schwab Target 2010 Index Fund |
Schwab MarketTrack Balanced Portfolio™ | Schwab Target 2015 Index Fund |
Schwab MarketTrack Conservative Portfolio™ | Schwab Target 2020 Index Fund |
Laudus International MarketMasters Fund™ | Schwab Target 2025 Index Fund |
Schwab Balanced Fund | Schwab Target 2030 Index Fund |
Schwab Core Equity Fund | Schwab Target 2035 Index Fund |
Schwab Dividend Equity Fund | Schwab Target 2040 Index Fund |
Schwab Large-Cap Growth Fund | Schwab Target 2045 Index Fund |
Schwab Small-Cap Equity Fund | Schwab Target 2050 Index Fund |
Schwab Hedged Equity Fund | Schwab Target 2055 Index Fund |
Schwab Health Care Fund | Schwab Target 2060 Index Fund |
Schwab International Core Equity Fund | Schwab Target 2065 Index Fund |
Schwab Target 2010 Fund |
Purchases
of Securities |
Sales
of Securities |
$39,146,831 | $74,002,144 |
Tax cost | $153,831,478 |
Gross unrealized appreciation | $27,760,504 |
Gross unrealized depreciation | (25,025,793) |
Net unrealized appreciation (depreciation) | $2,734,711 |
Undistributed ordinary income | $35,728 |
Net unrealized appreciation (depreciation) on investments | 2,734,711 |
Net other unrealized appreciation (depreciation) | 1,392 |
Capital loss carryforwards and other losses | (4,302,310) |
Total | ($1,530,479) |
Current fiscal year end distributions | |
Ordinary income | $5,272,090 |
Long-term capital gains | 245,902 |
Prior fiscal year end distributions | |
Ordinary income | $8,043,943 |
Long-term capital gains | 489,165 |
Independent Trustees | |||
Name,
Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Robert
W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) |
Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 103 | None |
John
F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) |
Senior Fellow (Oct. 1979 – present), The Hoover Institution at Stanford University (public policy think tank); Senior Fellow (2000 – present), Stanford Institute for Economic Policy Research; Professor of Public Policy (1994 – 2015), Stanford University. | 103 | Director (2005 – 2020), Gilead Sciences, Inc. |
Nancy
F. Heller 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018) |
Retired. President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services). | 103 | None |
David
L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) |
Private Investor. | 103 | Director
(2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc. Director (2003 – 2019), Symantec Corporation |
Jane
P. Moncreiff 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2019) |
Consultant (2018 – present), Fulham Advisers LLC (management consulting); Chief Investment Officer (2009 – 2017), CareGroup Healthcare System, Inc. (healthcare). | 103 | None |
Independent Trustees (continued) | |||
Name,
Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Kiran
M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) |
Retired. Executive Vice President and General Manager of Small Business Group (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses). | 103 | Director (2008 – present), KLA-Tencor Corporation |
Kimberly
S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) |
Consultant (2008 – present), Patmore Management Consulting (management consulting). | 103 | None |
Interested Trustees | |||
Name,
Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Walter
W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010) |
Director, President and Chief Executive Officer (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank, SSB; Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; Director (July 2019 – present), Charles Schwab Trust Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (Oct. 2020 – present), TD Ameritrade Holding Corporation; Director (July 2016 – present), Charles Schwab Investment Management, Inc. | 103 | Director (2008 – present), The Charles Schwab Corporation |
Joseph
R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) |
Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank, SSB; Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc.; Director (Oct. 2020 – present), TD Ameritrade Holding Corporation. | 103 | None |
Officers of the Trust | |
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 |
Jonathan
de St. Paer 1973 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018) |
Director (Apr. 2019 – present), President (Oct. 2018 – present), Chief Operating Officer (Jan. 2020 – present), and Chief Executive Officer (Apr. 2019 – Nov. 2019), Charles Schwab Investment Management, Inc.; Senior Vice President (June 2020 – present) and Chief Operating Officer (Jan. 2020 – present), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (Apr. 2019 – present), President (Nov. 2018 – present) and Trustee (Apr. 2019 – Dec. 2020), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc. |
Mark
Fischer 1970 Treasurer, Chief Financial Officer and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) |
Treasurer and Chief Financial Officer (Jan. 2016 – present) and Chief Operating Officer (Dec. 2020 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; Chief Financial Officer (Mar. 2020 – present) and Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011 – Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005 – Mar. 2011), Massachusetts Financial Service Investment Management. |
Omar
Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) |
Senior Vice President and Chief Investment Officer (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009 – Apr. 2011), Financial Engines, Inc. (investment management firm); Head of Quantitative Equity (July 2004 – Jan. 2009), ING Investment Management. |
Brett
Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) |
Senior Vice President and Chief Investment Officer (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Fixed Income (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Managing Director and Global Head of Active Fixed-Income Strategies (Jan. 2008 – Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006 – Jan. 2008), Loomis, Sayles & Company (investment management firm). |
David
Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) |
Senior Vice President (Sept. 2011 – present) and Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present) and Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk (Apr. 2011 – present), Laudus Funds; Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine
MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009) |
Vice President (July 2005 – present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005 – present) and Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary (Oct. 2009 – present), Schwab ETFs. |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust, and is a director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co. |
3 | The President, Treasurer and Secretary/Clerk 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. |
¹ | State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation. |
² | You could lose money by investing in the Schwab Money Funds. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. Because the share price of Schwab Variable Share Price Money Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Schwab Money Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Schwab Money Funds’ sponsor has no legal obligation to provide financial support to the Funds, and you should not expect that the sponsor will provide financial support to the Funds at any time. |
Item 2: Code of Ethics.
(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 13(a)(1) of Form N-CSR. |
Item 3: Audit Committee Financial Expert.
Registrants Board of Trustees has determined that Kiran M. Patel and Kimberly S. Patmore, each currently serving on its audit, compliance and valuation committee, are each an audit committee financial expert, as such term is defined in Item 3 of Form N-CSR. Each member of Registrants audit, compliance and valuation committee is independent under the standards set forth in Item 3 of Form N-CSR.
The designation of each of Mr. Patel and Ms. Patmore as an audit committee financial expert pursuant to Item 3 of Form N-CSR does not (i) impose upon such individual any duties, obligations, or liability that are greater than the duties, obligations and liability imposed upon such individual as a member of Registrants audit, compliance and valuation committee or Board of Trustees in the absence of such designation; and (ii) affect the duties, obligations or liability of any other member of Registrants audit, compliance and valuation committee or Board of Trustees.
Item 4: Principal Accountant Fees and Services.
Registrant is composed of fifty-three operational series. One series has a fiscal year-end of the last day of February, whose annual financial statements are reported in Item 1, twelve series have a fiscal year-end of March 31, thirty-seven series have a fiscal year-end of October 31, and three series have a fiscal year-end of December 31. Principal accountant fees disclosed in Items 4(a)-(d) and 4(g) include fees billed for services rendered to the fifty-three operational series during 2020/2021 and 2019/2020, based on their respective 2020/2021 and 2019/2020 fiscal years, as applicable.
The following table presents fees billed by the principal accountant in each of the last two fiscal years for the services rendered to the Funds:
(a) Audit Fees | (b)Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees | |||||||||||||||||||||||||||
Fiscal Year 2020/2021 |
Fiscal Year 2019/2020 |
Fiscal Year 2020/2021 |
Fiscal Year 2019/2020 |
Fiscal Year 2020/2021 |
Fiscal Year 2019/2020 |
Fiscal Year 2020/2021 |
Fiscal Year 2019/2020 |
|||||||||||||||||||||||
$ | 1,211,700 | $ | 1,517,001 | $ | 93,000 | $ | 87,870 | $ | 161,200 | $ | 177,307 | $ | 0 | $ | 0 |
1 | The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees. |
2 | The nature of the services includes tax compliance, tax advice and tax planning. |
(e) (1) Registrants audit, compliance and valuation committee does not have pre-approval policies and procedures as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) | There were no services described in each of paragraphs (b) through (d) above (including services required to be approved by Registrants audit, compliance and valuation committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by Registrants audit, compliance and valuation committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
(f) Not applicable.
(g) Below are the aggregate non-audit fees billed in each of the last two fiscal years by Registrants principal accountant for services rendered to Registrant, to Registrants investment adviser, and to any entity controlling, controlled by, or under common control with Registrants investment adviser that provides ongoing services to Registrant.
2020/2021: $4,326,956 2019/2020: $265,177
(h) | During the past fiscal year, all non-audit services provided by Registrants principal accountant to either Registrants investment adviser or to any entity controlling, controlled by, or under common control with Registrants investment adviser that provides ongoing services to Registrant were pre-approved. Included in the audit, compliance and valuation committees pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountants independence. |
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
The schedule of investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11: Controls and Procedures.
(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, Jonathan de St. Paer and Registrants Chief Financial Officer, Mark Fischer, 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 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. |
Item 12: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13: Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Capital Trust Schwab Fundamental Global Real Estate Index Fund
By: | /s/ Jonathan de St. Paer | |
Jonathan de St. Paer | ||
Chief Executive Officer |
Date: | April 16, 2021 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Jonathan de St. Paer | |
Jonathan de St. Paer | ||
Chief Executive Officer |
Date: | April 16, 2021 |
By: | /s/ Mark Fischer | |
Mark Fischer | ||
Chief Financial Officer |
Date: | April 16, 2021 |
F.II.1.B. | CODE OF BUSINESS CONDUCT AND ETHICS |
CODE OF BUSINESS CONDUCT AND ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS
SCHWAB FUNDS:
THE CHARLES SCHWAB FAMILY OF FUNDS
SCHWAB INVESTMENTS
SCHWAB CAPITAL TRUST
SCHWAB ANNUITY PORTFOLIOS
LAUDUS FUNDS:
LAUDUS TRUST
SCHWAB ETFS:
SCHWAB STRATEGIC TRUST
I. | SCOPE |
This Code of Business Conduct and Ethics (the Code) for the Schwab Funds, Laudus Funds and Schwab ETFs (the Funds) covers the Principal Executive Officer and Principal Financial Officer and any other officers who serve a similar function (each an Officer) of all of the investment companies within the Funds complex and applies to their service to the Funds.
II. | INTRODUCTION |
The Funds are committed to the highest standards of ethical conduct. The Code consists of an outline of policies regarding conduct pertaining to legal compliance, personal conflicts of interest, confidentiality and privacy, and certain business practices. You are responsible for reviewing the Code and for acting in compliance with the Code in your daily activities.
The Code is not exhaustive; it provides guidance for carrying out your responsibilities on behalf of the Funds and observing the highest standards of ethical conduct. Because the Code does not address every possible situation that may arise, you are responsible for exercising good judgment, applying ethical principles, and raising questions when in doubt. Your integrity and good judgment reflect on the Funds brand and reputation, and are the foundation of trust for our shareholder and business relationships.
If you are unsure of what to do in any situation or how to interpret the provisions of the Code, seek guidance before you act. Use the Funds resources, including the Chief Legal Officer or the Chief Compliance Officer. If you feel that it is not appropriate to discuss a matter with the Chief Legal Officer or the Chief Compliance Officer, you may contact the Ombudsperson for The Charles Schwab Corporation.
CONTACT INFORMATION
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 | Catherine MacGregor | 415-667-0650 | ||
Funds | ||||
The Charles Schwab | Alicia OBrien, Esq, King & | (202) 626-5575 | ||
Corporation Ombudsperson | Spalding |
The information contained herein is the property of Charles Schwab and may not be copied, used or disclosed in whole or in part, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, reprographic, recording, or otherwise) outside of Charles Schwab without prior permission of the Mutual Funds Chief Compliance Officer or his/her designee. | 1 |
F.II.1.B. | CODE OF BUSINESS CONDUCT AND ETHICS |
III. | POLICIES |
In executing your responsibilities on behalf of the Funds, your conduct should reflect positively on the Funds. A strong personal sense of ethics should always play a significant role in guiding you towards a proper course of action. The appearance of impropriety can be as harmful to the Funds reputation as improper conduct.
The Funds business is subject to various laws, rules and regulations, including federal securities and state and local laws. Although you are not expected to know the details of the myriad of laws governing our business, you are expected to be familiar with and comply with policies and procedures that apply to your business unit and complete any required training that applies to you (e.g., training regarding privacy or anti-money laundering).
A. | PERSONAL CONFLICTS OF INTEREST |
It is important that you do not place yourself in a position that would cloud your judgment in carrying out the business affairs of the Funds. A personal conflict of interest occurs when your private interest interferes in any way or even appears to interfere with the interests of the Funds. You have a duty to report any material transaction or relationship to the Chief Compliance Officer that reasonably could be expected to be or to create a conflict of interest with the Funds.
Officers, in addition to their obligation to the Funds, may also be an officer or employee of CSIM or a CSIM affiliate. As a result, this Code recognizes that the Officers will, in the normal course of their duties (whether formally for the Funds, for CSIM, for CSIMs affiliate or for more than one entity), be involved in establishing policies and implementing decisions that will have different effects on CSIM, CSIMs affiliates and the Funds. The participation of the Officers in such activities is inherent in the contractual relationship between the Funds and CSIM and is consistent with the performance by the Officers of their duties as officers of the Funds. Thus, if performed in conformity with the provisions of the Investment Company Act of 1940, as amended (the 1940 Act), and the Investment Advisers Act of 1940, as amended (the Advisers Act), such activities will be deemed under the Code to have been handled ethically. In addition, it is recognized by the Trustees that the Officers may also be officers or employees of one or more other investment companies covered by this or other codes.
B. | INSIDE INFORMATION |
Do not trade on inside information or disclose inside information to anyone except those who have a need to know it in order to fulfill their responsibilities for the Funds and in accordance with the Funds policy. This applies to information regarding the Funds, The Charles Schwab Corporation and its subsidiaries, and any other publicly traded company.
Generally, material information is any information that an investor would likely consider important in deciding whether to buy, sell or hold securities or that could affect the market price of the securities. Examples include actual or estimated financial results or change in dividends; significant discoveries or product developments; possible mergers, acquisitions or divestitures; major changes in business strategies; obtaining or losing significant contracts; and threatened major litigation or related developments. If you have or receive information and are unsure whether it is within the definition of inside information or whether its release might be contrary to a fiduciary or other obligation, contact the Chief Compliance Officer prior to disclosing any such information.
You must not use the Funds non-public holdings or transactions information in any way to influence your trades or the trades of other shareholders, including those of other employees, officers and directors. Trading ahead of shareholder or the Funds transactions (frontrunning) and following shareholder or the Funds transactions (piggybacking or shadowing) is prohibited.
The information contained herein is the property of Charles Schwab and may not be copied, used or disclosed in whole or in part, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, reprographic, recording, or otherwise) outside of Charles Schwab without prior permission of the Mutual Funds Chief Compliance Officer or his/her designee. | 2 |
F.II.1.B. | CODE OF BUSINESS CONDUCT AND ETHICS |
C. | ACCEPTANCE OF GIFTS OR ENTERTAINMENT |
You must not accept gifts or entertainment from shareholders, vendors, suppliers, competitors or other employees where they present a conflict of interest or create the appearance of impropriety. You must adhere to the CSIM and The Charles Schwab Corporation policies regarding gifts and entertainment, and apply the more stringent restrictions. In addition, if you are an employee of another CSIM affiliate you must also adhere to that affiliates policies regarding gifts and entertainment, and apply the more stringent restrictions.
D. | CONFIDENTIALITY OF INFORMATION AND PRIVACY |
Information concerning the identity of the Funds underlying shareholders and their transactions and accounts is confidential. Such information may not be disclosed to persons working on behalf of the Funds except as they may need to know it in order to fulfill their responsibilities to the Funds. You may not disclose such information to anyone or any firm outside the Funds unless (i) the outside firm needs to know the information in order to perform services for the Funds and is bound to maintain its confidentiality; (ii) when the shareholder has consented or been given an opportunity to request that the information not be shared; (iii) as required by law; or (iv) as authorized by the Chief Legal Officer or Chief Compliance Officer.
The Funds are committed to safeguarding their customers privacy. We do not sell any personally identifiable customer information. Sharing of such information with third parties is limited to situations related to the processing and servicing of customer accounts, and to specifically delineated exceptions in the federal privacy law. We share information with our affiliates to the extent permitted by federal law. You must be familiar with the procedural and systemic safeguards we maintain to protect this information.
You have the responsibility to safeguard the Funds proprietary information. Proprietary information includes intellectual property (copyrights, trademarks or patents or trade secrets), particular know-how (business or organizational designs, or business, marketing or service plans or ideas) and sensitive information about the Funds (databases, records, salary information or unpublished financial reports).
E. | PROTECTION AND USE OF FUNDS ASSETS |
You are obligated to protect the Funds assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Funds. The Funds equipment should not be used for non-Funds business, though incidental personal use may be permitted.
F. | FINANCIAL DISCLOSURES |
The Funds are committed to providing full, fair, accurate, timely and understandable disclosure in reports and documents that the Funds file with, or submit to, the Securities and Exchange Commission and other regulatory agencies and in other public communications made by the Funds. You are required to comply with the Funds policies and procedures to provide such full, fair, accurate, timely and understandable disclosure.
G. | CONDUCT OF AUDITS |
Neither you nor any other person acting under your direction shall directly or indirectly take any action to fraudulently influence, coerce, manipulate, or mislead any independent public or certified public accountant engaged in the performance of an audit or review of the Funds financial statements.
The information contained herein is the property of Charles Schwab and may not be copied, used or disclosed in whole or in part, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, reprographic, recording, or otherwise) outside of Charles Schwab without prior permission of the Mutual Funds Chief Compliance Officer or his/her designee. | 3 |
F.II.1.B. | CODE OF BUSINESS CONDUCT AND ETHICS |
Types of conduct that constitute improper influence include, but are not limited to, directly or indirectly:
| 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 |
H. | RECORDKEEPING |
You must be familiar with the Funds record retention policies and always retain or destroy records according to them. In the event of litigation, governmental investigation or the threat of such action, you should consult the Chief Legal Officer or the Chief Compliance Officer regarding record retention.
The Funds books, records and accounts must conform both to applicable legal requirements and to the Funds internal controls and policies.
Unrecorded or off-the-books funds or assets are prohibited unless permitted by applicable law or regulation. Business records must not contain exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies. This applies equally to email, internal memoranda, formal reports, and all other forms of business records.
I. | SALES PRACTICES |
If you transact business for shareholders, you are required to know and observe the Funds specific policies and procedures for shareholder sales and transactions, such as the content and use of sales materials, documentation for transactions, quotations and suitability. Likewise, if you transact business with third parties (such as vendors or suppliers), you will be required to know and observe the Funds policies and procedures for such transactions, such as marketing policies, procedures for performing due diligence on third parties, and obtaining proper authorizations for any agreements. You must be familiar with any enumerated policies and procedures governing your sales activities and use good judgment in complying with them.
J. | COMPETITION AND FAIR DEALING |
We operate our business fairly and honestly. We seek competitive advantage through performance and never through unethical or illegal business practices. It is our policy to comply with anti-trust laws. These laws are complex and not easily summarized, but at a minimum require that there be no agreement or understanding between the Funds and their competitors that affect prices, terms or conditions of sale or that unreasonably restrain full and fair competition. You must always respect the rights of and deal fairly with the Funds shareholders and competitors. You must never take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing practice.
K. | PROHIBITION OF BRIBERY AND KICKBACKS |
Our policies prohibit bribery or kickbacks of any kind and to anyone in the conduct of our business. The U.S. government has a number of laws and regulations applicable specifically to business gratuities that may be offered to or accepted by U.S. and foreign government personnel. The promise, offer or delivery to an official or employee of the U.S. government or an official, employee or candidate of a foreign government of a gift, favor, payment or other gratuity in violation of these rules would not only violate the Funds policy but could also be a criminal
The information contained herein is the property of Charles Schwab and may not be copied, used or disclosed in whole or in part, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, reprographic, recording, or otherwise) outside of Charles Schwab without prior permission of the Mutual Funds Chief Compliance Officer or his/her designee. | 4 |
F.II.1.B. | CODE OF BUSINESS CONDUCT AND ETHICS |
offense. Similarly, federal law, as well as the laws of many states, prohibits engaging in commercial bribery. Commercial bribery involves soliciting, demanding or agreeing to accept anything of value from any person intending to influence or be rewarded in connection with any business or transaction, and prohibits all such behavior, for example, with respect to vendors, competitors, shareholders, and government employees.
L. | WAIVERS |
Waivers of the Code may be made only by the Trustees, and will be promptly disclosed publicly as required by law.
M. | CODE AMENDMENTS |
This Code may not be amended except in written form, which is specifically approved or ratified by a majority of the Trustees including a majority of the independent Trustees. Any amendments will, to the extent required, be disclosed in accordance with law.
N. | CONFIDENTIALITY |
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees, CSIM, The Charles Schwab Corporation and their respective counsel. However, nothing contained in this Code or in any applicable employement or severance agreement(s) should be interpreted as prohibiting employees or former employees from voluntarily communicating with the Securities and Exchange Commission or other authorities regarding possible violations of law or from recovering a whistleblower award.
III. | ESCALATION AND PROHIBITION AGAINST RETALIATION |
If you know of, or reasonably believe there is, a violation of this Code, you must report that information immediately to the Funds Chief Compliance Officer. Depending on the possible violation, you may also be required to report it pursuant to The Charles Schwab Corporation Code of Business Conduct and CSIM and/or CSIMs affiliates compliance policies and procedures. You should not conduct preliminary investigations unless authorized to do so by the Compliance Department.
No Officer will be retaliated against for making a good faith complaint or for bringing inappropriate conduct to the attention of the Funds personnel, Ombudsperson of The Charles Schwab Corporation or Trustees, for assisting another employee or applicant in making a good faith report, for cooperating in an investigation, or for filing an administrative claim with a state or federal governmental agency. Any Officer who in good faith raises an issue regarding a possible violation of law, regulation or company policy or any suspected illegal or unethical behavior will be protected from retaliation.
If you have violated the Code, however, making a report will not protect you from the consequences of your actions. You can be subject to discipline up to and including termination of employment if you violate the Code or fail to report violations that come to your attention.
Any employee who engages in retaliatory conduct in violation of our policies will be subject to disciplinary action, up to and including termination of employment. If you reasonably believe retaliatory conduct has occurred, you must report such conduct to the Funds Chief Compliance Officer.
The information contained herein is the property of Charles Schwab and may not be copied, used or disclosed in whole or in part, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, reprographic, recording, or otherwise) outside of Charles Schwab without prior permission of the Mutual Funds Chief Compliance Officer or his/her designee. | 5 |
F.II.1.B. | CODE OF BUSINESS CONDUCT AND ETHICS |
IV. | PROCEDURES |
A. | OFFICERS |
| 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. |
| 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. |
B. | CHIEF COMPLIANCE OFFICER |
| 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 the affected Funds Audit, Compliance and Valuation 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, Compliance and Valuation Committee and will work with the Chief Legal Officer and other appropriate parties to ensure that any required disclosures are made. |
C. | TRUSTEES |
| 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 of directors, notification to appropriate personnel of The Charles Schwab Corporation or its board of directors, or a recommendation to dismiss the Officer. |
VI. | REGULATORY AUTHORITY |
This Code constitutes the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, CSIM, CSIMs affiliates, The Charles Schwab Corporation or other Fund service providers govern or purport to govern the behavior or activities of an Officer who is subject to this Code, they are superseded by this Code to the extent that they conflict with the provisions of this Code. CSIMs, the Funds and Charles Schwab & Co. Inc.s (as distributor) joint code of ethics under Rule 17j-1 pursuant to the 1940 Act and Rule 204A-1 of the Advisers Act, and CSIMs, CSIMs affiliates, and The Charles Schwab Corporations policies and procedures set forth in their respective compliance manuals and elsewhere are separate requirements applying to the Officers and are not part of this Code.
VERSION HISTORY
Adopted Schwab and Laudus Funds: June 15, 2011, Schwab ETFs: August 4, 2011
Revised August 8, 2013; December 11, 2015; August 25, 2016; December 11, 2017; September 25, 2018 (no changes); December 12, 2019; November 3, 2020
END
The information contained herein is the property of Charles Schwab and may not be copied, used or disclosed in whole or in part, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, reprographic, recording, or otherwise) outside of Charles Schwab without prior permission of the Mutual Funds Chief Compliance Officer or his/her designee. | 6 |
CERTIFICATIONS
I, Jonathan de St. Paer, certify that:
1. I have reviewed this report on Form N-CSR for the following series of Schwab Capital Trust: Schwab Fundamental Global Real Estate Index Fund;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosures and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed to the registrants auditors and the audit committee of the registrants Board of Trustees (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: April 16, 2021 | /s/ Jonathan de St. Paer | |||||
Jonathan de St. Paer | ||||||
Chief Executive Officer |
CERTIFICATIONS
I, Mark Fischer, certify that:
1. I have reviewed this report on Form N-CSR for the following series of Schwab Capital Trust: Schwab Fundamental Global Real Estate Index Fund;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosures and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed to the registrants auditors and the audit committee of the registrants Board of Trustees (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: April 16, 2021 | /s/ Mark Fischer | |||||
Mark Fischer | ||||||
Chief Financial Officer |
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report for the following series of Schwab Capital Trust: Schwab Fundamental Global Real Estate Index Fund (the Fund) on Form N-CSR for the period ended February 28, 2021 (periodic report), each of the undersigned, being the Chief Executive Officer and Chief Financial Officer, respectively, hereby certifies, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The periodic report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Fund for the period presented therein.
/s/ Jonathan de St. Paer | Date: | April 16, 2021 | ||||
Jonathan de St. Paer | ||||||
Chief Executive Officer |
/s/ Mark Fischer | Date: | April 16, 2021 | ||||
Mark Fischer | ||||||
Chief Financial Officer |
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.