N-CSR

Schwab Fundamental Global Real Estate Index Fund

Performance at a Glance

The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.

Total Returns for the 12 Months Ended February 28, 2023
Schwab Fundamental Global Real Estate Index Fund (Ticker Symbol: SFREX)	-16.23%1
Russell RAFITM Global Select Real Estate Index (Net)2	-16.78%
FTSE EPRA Nareit Global Index (Net)2	-15.18%
Fund Category: Morningstar Global Real Estate3	-15.70%
Performance Details	pages 6-8

All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.

The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.

For index definitions, please see the Glossary.

Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

Index ownership – The Schwab Fundamental Global Real Estate Index Fund is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI™ Global Select Real Estate Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell®” is a trademark of Russell. The trade names “Research Affiliates®”, “Fundamental Index®” and “RAFI®” are registered trademarks of RA. Charles Schwab Investment Management, Inc. has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.

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.

The net version of the index reflects reinvested dividends net of withholding taxes but reflects no deductions for expenses or other taxes.

Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.

2Schwab Fundamental Global Real Estate Index Fund | Annual Report

Schwab Fundamental Global Real Estate Index Fund

The Investment Environment

For the 12-month reporting period ended February 28, 2023, U.S. and international equity markets lost ground as inflation spiked, interest rates rose, and economic growth around the world slowed. The ongoing war between Russia and Ukraine and the continuing, albeit uneven, fallout from the COVID-19 pandemic weighed on economies and markets around the world. The U.S. dollar rose against a basket of foreign currencies through October 2022, but generally declined through the remainder of the reporting period, ending it slightly higher than it began. For the reporting period, the FTSE EPRA Nareit Global Index (Net)*, which represents general trends in eligible real estate securities worldwide, returned -15.18%, while the Dow Jones Equity All REIT Capped IndexTM, which represents U.S. real estate investment trusts (REITs), returned -12.15%. The S&P 500® Index, a bellwether for the overall U.S. stock market, returned -7.69% for the same period. Outside the U.S., the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, and the MSCI Emerging Markets Index (Net)*, returned -3.14% and -15.28%, respectively.

After recovering from severe pressures early in the COVID-19 pandemic, U.S. REITs began to weaken early in the reporting period as inflation continued to rise and the U.S. Federal Reserve (Fed) began raising interest rates, dampening demand. Following a rebound between mid-June and mid-August 2022, U.S. REITs again slumped, hitting reporting-period lows in mid-October 2022 before generally rising again. Among REIT sub-industries in the Dow Jones Equity All REIT Capped Index, all posted losses for the reporting period. Office REITs were the weakest sub-industry, as remote work maintained momentum, even as COVID-19 restrictions diminished, and office vacancies soared. Residential REITs were also comparatively weak, as high valuations, rising interest rates, and slowing rent growth expectations discouraged investors.

Real estate markets outside the United States were also weak for the reporting period, with returns generally pressured by rising inflation and interest rates. Among real estate securities in countries included in the FTSE EPRA Nareit Global Index, the weakest returns came from securities in Russia, Germany, and Norway, and the strongest came from securities in Turkey, Mexico, and Chile.

Asset Class Performance Comparison % returns during the 12 months ended February 28, 2023

Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not a guarantee of future results.

For index definitions, please see the Glossary.

Data source: Index provider websites and Schwab Asset Management.

Nothing in this report represents a recommendation of a security by the investment adviser.

Management views may have changed since 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.

Schwab Fundamental Global Real Estate Index Fund | Annual Report3

Schwab Fundamental Global Real Estate Index Fund

The Investment Environment (continued)

In the United States, amid fading government stimuli, ongoing supply chain disruptions, persisting inflation, and a widening trade deficit, gross domestic product (GDP) contracted for the first and second quarters of 2022, decreasing at an annualized rate of -1.6% and -0.6%, respectively. GDP grew in the last two quarters, at an annualized rate of 3.2% and 2.6% for the third and fourth quarters, respectively. Inflation rose steadily in the first half of 2022, hitting a 40-year high in June 2022, before declining through the end of the reporting period, as certain consumer and energy prices began to recede. The unemployment rate remained low despite inflationary pressures, ending the reporting period near pre-pandemic lows.

Outside the United States, conditions were similar. The eurozone, despite considerable headwinds, managed to maintain positive, albeit waning, GDP growth throughout 2022 as COVID-19 restrictions eased and tourism increased in response to pent-up demand. The United Kingdom posted small gains in GDP growth for the first and second quarters of 2022, in part driven by increased COVID-19 testing and tracing and an expansion of its vaccination program, contracted slightly in the third quarter, and rose slightly for the fourth quarter. Japan’s GDP growth vacillated within a small range throughout 2022. Among emerging markets, China’s GDP growth remained positive during the reporting period but slowed notably as it dealt with numerous headwinds including political turbulence, COVID-19 lockdowns and quarantines, and a severe property downturn, as a result of stalled demand, a decline in financing for property development, halted construction on in progress projects, and homeowners pausing payment of their mortgages on incomplete builds. Although India posted positive gains in GDP for all four quarters of 2022, its growth slowed over the year, in part due to reductions in private spending as borrowing costs escalated. Oil prices peaked at over $120 per barrel in early March 2022 as sanctions were imposed on Russian imports—and again in June on supply-and-demand imbalances—but generally retreated for the rest of the reporting period, ending at just under $80 per barrel.

Monetary policy around the world varied as central banks responded to the changing conditions. In the United States, after maintaining the federal funds rate in a range of 0.00% to 0.25% from mid-March 2020 through mid-March 2022, the Fed shifted its stance as inflation continued to rise and indicators of economic activity and employment continued to strengthen. After issuing successively stronger signals that interest rates could begin to rise sooner in 2022 than previously anticipated, the Fed raised the federal funds rate eight times during the reporting period. The federal funds rate ended the reporting period in a range of 4.50% to 4.75%. The Fed wrapped up its bond-buying program in March 2022, and in June 2022 began to reduce the $9 trillion in assets held on its balance sheet, vowing to be even more aggressive than during its last round of quantitative tightening between 2017 and 2019. In developed international countries, central banks generally followed suit. The European Central Bank raised its interest rate five times over the reporting period in an effort to dampen demand and control inflation, which rose into double digits in October. The Bank of England raised its key official bank rate eight times during the reporting period, bringing borrowing costs to a 14-year high as it wrestled with soaring inflation. In contrast, the Bank of Japan continued to uphold its short-term interest rate target of -0.1%, unchanged since 2016, but in late December 2022 unexpectedly announced that it would widen the band around the yield target on its 10-year government bond, which pushed the yen higher. Monetary policy rates in emerging markets for the most part rose, with central banks in India, Indonesia, Brazil, Mexico, and Pakistan all raising their rates multiple times over the reporting period in an effort to counteract the impacts of inflation. In contrast, after cutting its prime rate in August 2022, China left its rate unchanged through the remainder of the reporting period. Loan demand began to rebound as China finally eased its stringent COVID-19 policies in early 2023. Russia, which had raised its benchmark policy rate to 20% in February 2022 amid the broadening fallout of Western sanctions in retaliation against its invasion of Ukraine, reduced it several times during the reporting period.

4Schwab Fundamental Global Real Estate Index Fund | Annual Report

Schwab Fundamental Global Real Estate Index Fund

Fund Management

Christopher Bliss, CFA, Managing Director and Head of Passive Equity Strategies for Schwab Asset

Management, is responsible for overseeing the investment process and portfolio management of investment

strategies for passive equity Schwab Funds and Schwab ETFs. Before joining Schwab 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. In this role, Mr.

Bliss was responsible for overseeing a team of portfolio managers managing domestic, developed

international and emerging markets index strategies. 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 Craig1, CFA, Senior Portfolio Manager for Schwab Asset Management, is responsible for the oversight

and day-to-day co-management of the fund. Prior to joining Schwab 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.

David Rios, Portfolio Manager for Schwab Asset Management, 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 equity index

strategies team for four years. His first role with Schwab Asset Management was as a trade operations

specialist. Prior to joining Schwab in 2008, Mr. Rios was a senior fund accountant at Investors Bank & Trust

(subsequently acquired by State Street Corporation).

Effective on or about May 5, 2023, Chuck Craig will retire and will no longer serve as senior portfolio manager of the fund.

Schwab Fundamental Global Real Estate Index Fund | Annual Report5

Schwab Fundamental Global Real Estate Index Fund as of February 28, 2023

The Schwab Fundamental Global Real Estate Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell RAFITM Global Select Real Estate Index (the index). The index measures the performance of real estate companies, including real estate investment trusts (REITs), in U.S. and non-U.S. markets, including developed and emerging markets. To pursue its investment objective, the fund invests in a representative sample of the securities included in the index which, when taken together, are expected to perform similarly to the index as a whole. Due to the use of sampling techniques, the fund may not hold all of the securities in the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.

Market Highlights. For the 12-month reporting period ended February 28, 2023, U.S. and international equity markets lost ground as inflation spiked, interest rates rose, and economic growth around the world slowed. The ongoing war between Russia and Ukraine and the continuing, albeit uneven, fallout from the COVID-19 pandemic weighed on economies and markets around the world. U.S. real estate securities mostly underperformed the broader U.S. equity market. After recovering from severe pressures early in the COVID-19 pandemic, U.S. REITs began to weaken early in the reporting period as inflation continued to rise and the U.S. Federal Reserve (Fed) began raising interest rates, dampening demand. Following a rebound between mid-June and mid-August 2022, U.S. REITs again slumped, hitting reporting-period lows in mid-October 2022 before generally rising again. Real estate markets outside the United States were also weak for the reporting period, with returns generally pressured by rising inflation and interest rates. The U.S. dollar rose against a basket of foreign currencies through October 2022, but generally declined through the remainder of the reporting period, ending it slightly higher than it began.

Performance. The fund tracked the index for the 12-month reporting period ended February 28, 2023. The fund returned -16.23%1, while the index returned -16.78%2 for the reporting period.

Contributors and Detractors. Real estate securities from Mexico contributed the most to the total return of the fund. Mexican securities represented an average weight of less than 1% of the fund’s investments and returned approximately 45% in U.S. dollar terms for the reporting period. One example from this market is Fibra Uno Administracion S.A. de C.V., which operates as a real estate investment trust (REIT) and looks to acquire, own, develop and operate real estate properties, including industrial, commercial and office properties. The fund’s holdings of Fibra Uno Administracion S.A. de C.V. represented an average weight of less than 1% of the fund’s investments and returned approximately 40% in U.S. dollar terms for the reporting period.

Real estate securities from Thailand also contributed to the total return of the fund, representing an average weight of less than 1% of the fund’s investments and returning approximately 12% in U.S. dollar terms for the reporting period.

Real estate securities from the United States detracted the most from the total return of the fund. Securities from the United States represented an average weight of approximately 49% of the fund’s investments and returned approximately -15% for the reporting period. One example from this market is Crown Castle, Inc., which manages and offers wireless communication coverage and infrastructure sites in the United States and Australia. The fund’s holdings of Crown Castle, Inc. represented an average weight of approximately 2% of the fund’s investments and returned approximately -18% for the reporting period.

Real estate securities from China also detracted from the total return of the fund, representing an average weight of approximately 10% of the fund’s investments and returning approximately -29% in U.S. dollar terms for the reporting period. Despite detracting from the total return of the fund, Chinese securities contributed to the fund’s performance relative to the index. Trading of several securities was halted for extended periods of time, resulting in their removal from the index. The removal of certain of these securities from the fund after removal from the index, as well as the fund continuing to hold certain of these securities, contributed to the fund’s performance relative to the index.

Management views and portfolio holdings may have changed since the report date.

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.

The net version of the index reflects reinvested dividends net of withholding taxes but reflects no deductions for expenses or other taxes.

6Schwab Fundamental Global Real Estate Index Fund | Annual Report

Schwab Fundamental Global Real Estate Index Fund

Performance and Fund Facts as of February 28, 2023

Performance of Hypothetical $10,000 Investment (October 22, 2014 – February 28, 2023)1

Average Annual Total Returns1

Fund and Inception Date	1 Year	5 Years	Since Inception
Fund: Schwab Fundamental Global Real Estate Index Fund (10/22/14)	-16.23%2	0.04%	2.94%
Russell RAFITM Global Select Real Estate Index (Net)3	-16.78%	-0.35%	2.65%
FTSE EPRA Nareit Global Index (Net)3	-15.18%	0.97%	2.28%
Fund Category: Morningstar Global Real Estate4	-15.70%	1.98%	N/A
Fund Expense Ratio5: 0.39%

The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.

For index definitions, please see the Glossary.

The fund’s performance relative to the index may be affected by fair value pricing, see financial note 2 for more information.

Small-company stocks are subject to greater volatility than many other asset classes.

International investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Investing in emerging markets may accentuate these risks.

The fund is subject to risks associated with the direct ownership of real estate securities and an investment in the fund will be closely linked to the performance of the real estate markets.

Index ownership – The Schwab Fundamental Global Real Estate Index Fund is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFITM Global Select Real Estate Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell®” is a trademark of Russell. The trade names “Research Affiliates®”, “Fundamental Index®” and “RAFI®” are registered trademarks of RA. Charles Schwab Investment Management, Inc. has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.

Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

The net version of the index reflects reinvested dividends net of withholding taxes but reflects no deductions for expenses or other taxes.

Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.

As stated in the prospectus.

Schwab Fundamental Global Real Estate Index Fund | Annual Report7

Schwab Fundamental Global Real Estate Index Fund

Fund Expenses (Unaudited)

Examples for a $1,000 Investment

As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees.

The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in the fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning September 1, 2022 and held through February 28, 2023.

The Actual Return line in the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”

The Hypothetical Return line in the table below provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.

You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical return line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	EXPENSE RATIO (ANNUALIZED) 1	BEGINNING ACCOUNT VALUE AT 9/1/22	ENDING ACCOUNT VALUE (NET OF EXPENSES) AT 2/28/23	EXPENSES PAID DURING PERIOD 9/1/22-2/28/23 2
Schwab Fundamental Global Real Estate Index Fund
Actual Return	0.39%	$1,000.00	$973.90	$1.91
Hypothetical 5% Return	0.39%	$1,000.00	$1,022.86	$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 181 days in the period, and divided by 365 days in the fiscal year.

Schwab Fundamental Global Real Estate Index Fund | Annual Report9

Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of February 28, 2023

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.

SECURITY	NUMBER OF SHARES	VALUE ($)
COMMON STOCKS 99.6% OF NET ASSETS

Australia 3.7%
Charter Hall Group	11,562	102,987
Charter Hall Retail REIT	22,580	60,343
Cromwell Property Group	117,012	52,246
Dexus	49,923	282,093
Goodman Group	36,191	481,451
Mirvac Group	345,344	525,813
REA Group Ltd.	908	74,769
Region RE Ltd.	43,361	74,192
Scentre Group	424,920	848,673
Stockland	257,273	662,722
The GPT Group	86,225	272,187
Vicinity Ltd.	290,249	397,116
Waypoint REIT Ltd.	28,785	52,740
		3,887,332

Austria 0.1%
CA Immobilien Anlagen AG	1,779	50,733
IMMOFINANZ AG *	4,078	53,087
S IMMO AG	1,153	18,463
		122,283

Belgium 0.2%
Aedifica S.A.	569	48,094
Cofinimmo S.A.	1,291	118,967
Warehouses De Pauw CVA	2,559	78,096
		245,157

Brazil 0.2%
Cyrela Brazil Realty S.A. Empreendimentos e Participacoes	38,781	110,963
Multiplan Empreendimentos Imobiliarios S.A.	13,200	63,460
		174,423

Canada 2.7%
Allied Properties Real Estate Investment Trust	6,687	140,258
Altus Group Ltd.	1,632	72,959
Artis Real Estate Investment Trust	13,447	89,581
Boardwalk Real Estate Investment Trust	2,332	100,885
Canadian Apartment Properties REIT	7,064	255,847
Chartwell Retirement Residences	18,111	122,244
Choice Properties Real Estate Investment Trust	10,966	118,942
Colliers International Group, Inc.	1,104	128,054
Crombie Real Estate Investment Trust	5,811	68,778
Dream Industrial Real Estate Investment Trust	5,866	63,411
Dream Office Real Estate Investment Trust	6,284	75,067

SECURITY	NUMBER OF SHARES	VALUE ($)
First Capital Real Estate Investment Trust	18,513	242,046
FirstService Corp.	971	133,115
Granite Real Estate Investment Trust	1,418	85,485
H&R Real Estate Investment Trust	32,005	307,501
Killam Apartment Real Estate Investment Trust	5,451	73,386
NorthWest Healthcare Properties Real Estate Investment Trust	10,209	71,377
RioCan Real Estate Investment Trust	25,407	402,379
SmartCentres Real Estate Investment Trust	9,118	184,966
Tricon Residential, Inc.	6,151	49,767
		2,786,048

China 11.2%
Agile Group Holdings Ltd. *	1,341,000	369,590
C&D International Investment Group Ltd.	26,719	86,307
China Aoyuan Group Ltd. *(a)	729,127	27,402
China Evergrande Group *(a)	4,094,000	215,147
China Jinmao Holdings Group Ltd.	1,749,000	339,396
China Merchants Shekou Industrial Zone Holdings Co., Ltd., A Shares	58,200	124,029
China Overseas Grand Oceans Group Ltd.	293,000	113,985
China Overseas Land & Investment Ltd.	652,000	1,618,582
China Resources Land Ltd.	350,000	1,555,143
China SCE Group Holdings Ltd.	1,421,000	163,396
China South City Holdings Ltd. *	1,316,000	87,240
China Vanke Co., Ltd., A Shares	153,500	378,037
China Vanke Co., Ltd., H Shares	442,100	772,962
CIFI Holdings Group Co., Ltd.	1,161,440	124,728
Country Garden Holdings Co., Ltd.	3,810,000	1,168,385
Country Garden Services Holdings Co., Ltd.	38,400	71,499
Fantasia Holdings Group Co., Ltd. *(a)	2,614,500	16,654
Gemdale Corp., A Shares	46,000	64,017
Gemdale Properties & Investment Corp., Ltd.	1,326,000	104,939
Greentown China Holdings Ltd.	106,500	145,619
Guangzhou R&F Properties Co., Ltd., H Shares *	2,817,022	694,164
Hopson Development Holdings Ltd.	152,382	155,515
Kaisa Group Holdings Ltd. *(a)	1,271,000	34,004
KE Holdings, Inc., ADR *	4,823	88,020
KWG Group Holdings Ltd. *	771,000	164,556
Longfor Group Holdings Ltd.	236,500	677,013
Midea Real Estate Holding Ltd.	54,600	67,647
Poly Developments and Holdings Group Co., Ltd., A Shares	98,300	213,489
Poly Property Group Co., Ltd	1,127,000	270,370
RiseSun Real Estate Development Co., Ltd., A Shares *	146,100	45,346
Ronshine China Holdings Ltd. *	815,500	92,604
Seazen Group Ltd. *	874,000	294,212
Seazen Holdings Co., Ltd., A Shares *	22,700	63,881
Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd., A Shares	75,100	110,518
Shenzhen Investment Ltd.	769,563	140,465
Shinsun Holdings Group Co., Ltd. *	1,137,000	52,959

See financial notes

Schwab Fundamental Global Real Estate Index Fund | Annual Report11

Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of February 28, 2023 (continued)

SECURITY	NUMBER OF SHARES	VALUE ($)
Sino-Ocean Group Holding Ltd.	2,180,500	275,504
Times China Holdings Ltd. *	1,002,498	146,117
Yuexiu Property Co., Ltd.	241,000	354,932
Yuzhou Group Holdings Co., Ltd. *	2,701,963	132,819
Zhenro Properties Group Ltd. *	2,144,000	90,292
		11,711,484

France 1.8%
Altarea S.C.A.	405	54,472
Carmila S.A. *	3,486	52,049
Covivio	4,004	256,436
Gecina S.A.	2,695	310,059
ICADE	4,638	232,031
Klepierre S.A. *	19,649	490,039
Mercialys S.A.	12,593	139,922
Nexity S.A.	11,599	307,772
		1,842,780

Germany 1.9%
ADLER Group S.A. *	25,086	26,850
Aroundtown S.A.	69,449	179,922
Deutsche Euroshop AG	2,301	52,569
Deutsche Wohnen SE	2,854	64,646
DIC Asset AG	4,694	42,791
Grand City Properties S.A.	9,662	98,620
LEG Immobilien SE	3,502	253,606
PATRIZIA SE	4,476	52,017
TAG Immobilien AG	17,254	137,210
Vonovia SE	44,310	1,114,354
		2,022,585

Hong Kong 8.6%
CK Asset Holdings Ltd.	227,750	1,428,455
Fortune Real Estate Investment Trust	103,000	87,278
Hang Lung Properties Ltd.	164,000	316,303
Henderson Land Development Co., Ltd.	116,866	410,221
Hongkong Land Holdings Ltd.	107,627	492,347
Hysan Development Co., Ltd.	48,500	153,616
Kerry Properties Ltd.	148,500	371,834
Link REIT	83,400	548,896
New World Development Co., Ltd.	332,460	905,011
Powerlong Real Estate Holdings Ltd.	1,224,000	254,682
Sino Land Co., Ltd.	240,583	308,512
Sun Hung Kai Properties Ltd.	178,142	2,434,561
Swire Properties Ltd.	77,400	203,678
The Wharf Holdings Ltd.	174,000	385,286
Wharf Real Estate Investment Co., Ltd.	126,200	691,933
		8,992,613

Japan 11.2%
Activia Properties, Inc.	33	95,112
Advance Residence Investment Corp.	49	120,375
Aeon Mall Co., Ltd.	20,400	266,366
AEON REIT Investment Corp.	90	98,352
Comforia Residential REIT, Inc.	23	52,955
Daito Trust Construction Co., Ltd.	13,270	1,250,017
Daiwa House REIT Investment Corp.	64	132,108
Daiwa Office Investment Corp.	12	53,918
Daiwa Securities Living Investments Corp.	73	60,727
Frontier Real Estate Investment Corp.	20	73,727
Fukuoka REIT Corp.	51	61,642
GLP J-REIT	111	116,560
Heiwa Real Estate Co., Ltd.	2,400	66,005
Hulic Co., Ltd.	34,600	275,372

SECURITY	NUMBER OF SHARES	VALUE ($)
Hulic REIT, Inc.	46	51,509
Industrial & Infrastructure Fund Investment Corp.	56	59,036
Invincible Investment Corp.	229	92,290
Japan Excellent, Inc.	85	75,892
Japan Hotel REIT Investment Corp.	191	107,953
Japan Logistics Fund, Inc.	30	64,846
Japan Metropolitan Fund Invest	315	236,490
Japan Prime Realty Investment Corp.	40	105,570
Japan Real Estate Investment Corp.	55	227,775
Kenedix Office Investment Corp.	43	100,893
Kenedix Residential Next Investment Corp.	34	51,358
Kenedix Retail REIT Corp.	27	49,120
Mitsubishi Estate Co., Ltd.	115,000	1,429,474
Mitsui Fudosan Co., Ltd.	103,100	1,964,944
Mori Hills Reit Investment Corp.	54	60,743
Mori Trust Sogo REIT, Inc.	102	56,778
Nippon Accommodations Fund, Inc.	17	75,754
Nippon Building Fund, Inc.	57	240,588
Nippon Kanzai Co., Ltd.	2,700	51,339
Nippon Prologis REIT, Inc.	52	110,920
NIPPON REIT Investment Corp.	22	53,792
Nomura Real Estate Holdings, Inc.	18,500	412,447
Nomura Real Estate Master Fund, Inc.	229	253,836
NTT UD REIT Investment Corp.	64	63,866
Open House Group Co., Ltd.	5,700	205,157
Orix JREIT, Inc.	120	160,673
Pressance Corp.	4,400	55,247
Relo Group, Inc.	7,500	119,774
SAMTY Co., Ltd.	3,300	50,720
Sekisui House REIT, Inc.	133	70,417
Starts Corp., Inc.	6,100	115,159
Sumitomo Realty & Development Co., Ltd.	41,400	977,377
Sun Frontier Fudousan Co., Ltd.	5,900	53,526
Takara Leben Co., Ltd.	26,700	74,283
Tokyo Tatemono Co., Ltd.	23,700	290,227
Tokyu Fudosan Holdings Corp.	112,400	542,956
Tokyu REIT, Inc.	38	54,498
United Urban Investment Corp.	173	191,086
		11,681,549

Mexico 0.7%
Corp. Inmobiliaria Vesta S.A.B. de C.V.	28,400	82,438
FIBRA Macquarie Mexico	67,600	116,087
Fibra Uno Administracion S.A. de C.V.	283,000	403,082
PLA Administradora Industrial S. de R.L de C.V.	65,700	121,119
		722,726

Netherlands 1.1%
Eurocommercial Properties N.V.	4,195	103,556
Unibail-Rodamco-Westfield *	14,133	893,029
Wereldhave N.V.	6,837	108,835
		1,105,420

Philippines 1.0%
AC Energy Corp.	84,210	9,636
Ayala Corp.	26,160	294,944
Ayala Land, Inc.	506,132	260,154
GT Capital Holdings, Inc.	20,000	187,420
Megaworld Corp.	1,825,000	66,564
Robinsons Land Corp.	192,900	52,442
SM Prime Holdings, Inc.	270,200	166,073
		1,037,233

See financial notes

12Schwab Fundamental Global Real Estate Index Fund | Annual Report

Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of February 28, 2023 (continued)

SECURITY	NUMBER OF SHARES	VALUE ($)
Singapore 1.6%
CapitaLand Ascendas REIT	123,588	253,833
CapitaLand Ascott Trust	116,800	87,523
CapitaLand China Trust	63,000	54,209
CapitaLand Integrated Commercial Trust	122,505	176,223
CapitaLand Investment Ltd.	48,338	133,316
City Developments Ltd.	38,500	220,233
Cromwell European Real Estate Investment Trust	27,900	49,872
Frasers Logistics & Commercial Trust	65,800	61,995
Manulife US Real Estate Investment Trust	103,800	28,040
Mapletree Industrial Trust	54,344	95,120
Mapletree Logistics Trust	79,531	99,650
Mapletree Pan Asia Commercial Trust	80,227	102,338
Suntec Real Estate Investment Trust	76,800	80,880
UOL Group Ltd.	38,180	193,354
		1,636,586

South Africa 1.0%
Fortress REIT Ltd., Class A *	132,062	75,577
Growthpoint Properties Ltd.	429,888	314,604
Hyprop Investments Ltd.	50,806	94,806
NEPI Rockcastle NV	33,076	198,146
Redefine Properties Ltd.	961,359	199,781
Resilient REIT Ltd.	27,497	76,285
Vukile Property Fund Ltd.	105,489	77,085
		1,036,284

Sweden 0.9%
Castellum AB	13,747	174,966
Fabege AB	10,102	85,469
Fastighets AB Balder, B Shares *	15,656	77,448
Hufvudstaden AB, A Shares	4,066	59,096
JM AB	12,830	266,766
Pandox AB *	6,100	82,430
Samhallsbyggnadsbolaget i Norden AB	31,344	51,145
Wallenstam AB, B Shares	11,232	46,669
Wihlborgs Fastigheter AB	12,494	103,980
		947,969

Switzerland 0.8%
Allreal Holding AG	1,069	175,192
Mobimo Holding AG	406	102,082
PSP Swiss Property AG	1,309	146,770
Swiss Prime Site AG	5,056	426,050
		850,094

Taiwan 0.4%
Chong Hong Construction Co., Ltd.	26,000	64,895
Farglory Land Development Co. Ltd	32,000	61,836
Highwealth Construction Corp.	90,533	125,874
Huaku Development Co., Ltd	26,000	78,556
Ruentex Development Co., Ltd	54,082	78,348
		409,509

Thailand 1.0%
AP Thailand PCL NVDR	301,161	105,624
Bangkok Land PCL, NVDR	2,084,700	58,974
Central Pattana PCL NVDR	109,200	216,961
Land & Houses PCL NVDR	866,611	240,286
LPN Development PCL, NVDR	459,600	56,176
Quality Houses PCL NVDR	910,400	61,815

SECURITY	NUMBER OF SHARES	VALUE ($)
Sansiri PCL NVDR	3,139,083	169,599
Supalai PCL NVDR	186,682	120,410
		1,029,845

United Arab Emirates 1.1%
Aldar Properties PJSC	234,260	299,364
Emaar Development PJSC *	87,928	113,134
Emaar Properties PJSC	469,034	714,340
		1,126,838

United Kingdom 2.2%
Assura plc	72,194	44,505
Big Yellow Group plc	4,603	66,865
Derwent London plc	4,162	130,071
Grainger plc	31,262	95,513
Great Portland Estates plc	12,168	83,134
Hammerson plc	394,209	144,184
Intu Properties plc *(a)	184,056	0
Land Securities Group plc	46,467	383,688
LondonMetric Property plc	18,849	42,836
LSL Property Services plc	15,579	47,785
NewRiver REIT plc	63,346	71,219
Primary Health Properties plc	35,402	46,009
Rightmove plc	19,222	129,365
Safestore Holdings plc	5,842	70,967
Savills plc	14,555	175,417
Segro plc	19,491	192,514
Sirius Real Estate Ltd.	44,376	44,784
The British Land Co., plc	59,545	319,383
The Unite Group plc	5,022	59,282
Tritax Big Box REIT plc	36,325	65,263
Workspace Group plc	8,892	54,709
		2,267,493

United States 46.2%
Acadia Realty Trust	5,927	86,356
Agree Realty Corp.	1,083	76,655
Alexander & Baldwin, Inc.	8,571	160,021
Alexandria Real Estate Equities, Inc.	3,765	563,922
American Assets Trust, Inc.	3,263	82,325
American Homes 4 Rent, Class A	6,916	214,534
American Tower Corp.	10,345	2,048,413
Americold Realty Trust, Inc.	10,144	298,234
Anywhere Real Estate, Inc. *	51,344	297,282
Apartment Income REIT Corp.	7,680	290,304
Apartment Investment & Management Co., Class A	8,161	61,208
Apple Hospitality REIT, Inc.	21,566	356,055
Ashford Hospitality Trust, Inc. *	8,747	43,298
AvalonBay Communities, Inc.	5,281	911,078
Boston Properties, Inc.	10,729	702,535
Brandywine Realty Trust	26,398	155,484
Brixmor Property Group, Inc.	21,680	490,835
Broadstone Net Lease, Inc.	3,378	59,960
Camden Property Trust	3,202	367,462
CareTrust REIT, Inc.	3,683	72,445
CBRE Group, Inc., Class A *	21,639	1,842,344
Centerspace	869	54,408
Chatham Lodging Trust	5,514	67,326
Corporate Office Properties Trust	8,208	208,729
CoStar Group, Inc. *	4,030	284,760
Cousins Properties, Inc.	7,516	184,067
Crown Castle, Inc.	13,195	1,725,246
CubeSmart	6,094	286,357
Cushman & Wakefield plc *	10,479	135,598

See financial notes

Schwab Fundamental Global Real Estate Index Fund | Annual Report13

Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of February 28, 2023 (continued)

SECURITY	NUMBER OF SHARES	VALUE ($)
DiamondRock Hospitality Co.	19,520	170,214
Digital Realty Trust, Inc.	9,679	1,008,842
DigitalBridge Group, Inc.	27,071	332,161
Diversified Healthcare Trust	239,502	234,712
Douglas Emmett, Inc.	13,076	184,764
Easterly Government Properties, Inc.	4,275	64,552
EastGroup Properties, Inc.	848	138,453
Elme Communities	6,856	127,590
Empire State Realty Trust, Inc., Class A	19,846	144,677
EPR Properties	5,436	222,006
Equinix, Inc.	2,336	1,607,799
Equity Commonwealth	4,087	86,767
Equity LifeStyle Properties, Inc.	4,765	326,450
Equity Residential	15,934	996,194
Essential Properties Realty Trust, Inc.	2,310	59,506
Essex Property Trust, Inc.	2,419	551,677
Extra Space Storage, Inc.	2,826	465,301
Federal Realty Investment Trust	3,448	368,177
First Industrial Realty Trust, Inc.	3,442	181,565
Four Corners Property Trust, Inc.	2,499	67,848
Gaming & Leisure Properties, Inc.	8,928	481,041
Getty Realty Corp.	1,835	62,996
Global Net Lease, Inc.	8,858	125,075
Healthcare Realty Trust, Inc.	19,878	387,621
Healthpeak Properties, Inc.	26,013	625,873
Hersha Hospitality Trust, Class A	6,570	54,925
Highwoods Properties, Inc.	9,124	241,786
Host Hotels & Resorts, Inc.	68,176	1,145,357
Hudson Pacific Properties, Inc.	14,929	137,795
Industrial Logistics Properties Trust	10,876	44,592
Invitation Homes, Inc.	14,917	466,305
Iron Mountain, Inc.	19,850	1,047,087
JBG SMITH Properties	8,707	150,196
Jones Lang LaSalle, Inc. *	6,219	1,084,967
Kennedy-Wilson Holdings, Inc.	9,258	154,701
Kilroy Realty Corp.	6,187	222,856
Kimco Realty Corp.	21,728	447,814
Kite Realty Group Trust	6,986	151,736
Lamar Advertising Co., Class A	4,501	470,625
Life Storage, Inc.	2,145	258,515
LTC Properties, Inc.	2,052	73,503
LXP Industrial Trust	14,956	155,991
Marcus & Millichap, Inc.	1,803	61,969
Medical Properties Trust, Inc.	23,644	243,533
Mid-America Apartment Communities, Inc.	3,752	600,695
National Health Investors, Inc.	2,247	123,585
National Retail Properties, Inc.	6,516	295,305
National Storage Affiliates Trust	1,558	65,903
Newmark Group, Inc., Class A	10,430	83,649
Office Properties Income Trust	9,541	156,854
Omega Healthcare Investors, Inc.	13,744	368,202
Outfront Media, Inc.	15,532	271,033
Paramount Group, Inc.	30,818	162,411
Park Hotels & Resorts, Inc.	38,217	525,484
Pebblebrook Hotel Trust	10,375	148,051
Physicians Realty Trust	10,734	159,185
Piedmont Office Realty Trust, Inc., Class A	19,469	178,141
Prologis, Inc.	15,479	1,910,109
Public Storage	3,246	970,392
Realty Income Corp.	9,240	590,898
Regency Centers Corp.	7,138	448,980
Retail Opportunity Investments Corp.	6,931	98,628
Rexford Industrial Realty, Inc.	1,670	100,968
RLJ Lodging Trust	26,652	302,234
RPT Realty	7,885	84,527
Ryman Hospitality Properties, Inc.	2,455	227,750
Sabra Health Care REIT, Inc.	17,972	214,047
SBA Communications Corp.	1,236	320,557

SECURITY	NUMBER OF SHARES	VALUE ($)
Service Properties Trust	74,240	815,155
Simon Property Group, Inc.	18,681	2,280,763
SITE Centers Corp.	15,983	213,693
SL Green Realty Corp.	10,291	350,409
Spirit Realty Capital, Inc.	4,940	203,429
STAG Industrial, Inc.	5,068	170,488
Summit Hotel Properties, Inc.	12,654	93,640
Sun Communities, Inc.	2,722	389,627
Sunstone Hotel Investors, Inc.	22,825	241,260
Tanger Factory Outlet Centers, Inc.	10,933	206,524
Terreno Realty Corp.	1,174	73,035
The GEO Group, Inc. *	46,661	408,750
The Howard Hughes Corp. *	1,423	118,280
The Macerich Co.	33,166	396,334
The Necessity Retail REIT, Inc.	9,068	62,206
UDR, Inc.	10,146	434,655
Uniti Group, Inc.	32,417	177,969
Urban Edge Properties	9,117	140,402
Ventas, Inc.	32,806	1,596,012
Veris Residential, Inc. *	8,831	142,532
VICI Properties, Inc.	12,258	411,011
Vornado Realty Trust	21,235	420,028
Welltower, Inc.	24,536	1,818,608
WP Carey, Inc.	6,146	498,809
Xenia Hotels & Resorts, Inc.	13,873	194,777
Zillow Group, Inc., Class A *	698	28,862
Zillow Group, Inc., Class C *	2,257	94,794
		48,152,995
Total Common Stocks (Cost $98,535,748)		103,789,246

RIGHTS 0.0% OF NET ASSETS

Hong Kong 0.0%
Link REIT
expires 03/21/23, strike HKD 44.20 *(a)	16,680	15,725
Total Rights (Cost $0)		15,725

INVESTMENT COMPANIES 0.0% OF NET ASSETS

United States 0.0%
iShares Core US REIT ETF	700	36,428
Total Investment Companies (Cost $36,653)		36,428
Total Investments in Securities (Cost $98,572,401)		103,841,399

See financial notes

14Schwab Fundamental Global Real Estate Index Fund | Annual Report

Schwab Fundamental Global Real Estate Index Fund

Portfolio Holdings as of February 28, 2023 (continued)

The following is a summary of the inputs used to value the fund’s investments as of February 28, 2023 (see financial note 2(a) for additional information):

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 Stocks1	$51,836,192	$—	$—	$51,836,192
Australia	—	3,887,332	—	3,887,332
Austria	18,463	103,820	—	122,283
Belgium	—	245,157	—	245,157
China	88,020	11,330,257	293,207	11,711,484
France	—	1,842,780	—	1,842,780
Germany	—	2,022,585	—	2,022,585
Hong Kong	—	8,992,613	—	8,992,613
Japan	—	11,681,549	—	11,681,549
Netherlands	—	1,105,420	—	1,105,420
Philippines	—	1,037,233	—	1,037,233
Singapore	49,872	1,586,714	—	1,636,586
South Africa	638,357	397,927	—	1,036,284
Sweden	—	947,969	—	947,969
Switzerland	—	850,094	—	850,094
Taiwan	—	409,509	—	409,509
Thailand	—	1,029,845	—	1,029,845
United Arab Emirates	—	1,126,838	—	1,126,838
United Kingdom	370,430	1,897,063	0*	2,267,493
Rights1
Hong Kong	—	—	15,725	15,725
Investment Companies1	36,428	—	—	36,428
Liabilities
Futures Contracts2	(13,929)	—	—	(13,929)
Total	$53,023,833	$50,494,705	$308,932	$103,827,470

*	Level 3 amount shown includes securities determined to have no value at February 28, 2023.
1	As categorized in the Portfolio Holdings.
2	Futures contracts are reported at cumulative unrealized appreciation or depreciation.

See financial notes

16Schwab Fundamental Global Real Estate Index Fund | Annual Report

Schwab Fundamental Global Real Estate Index Fund

Financial Notes

1. Business Structure of the Fund:

Schwab Fundamental Global Real Estate Index Fund is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the fund discussed in this report, which is highlighted:

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 — Target Payout
Schwab International Index Fund®	Schwab Monthly Income Fund — Flexible Payout
Schwab MarketTrack All Equity Portfolio™	Schwab Monthly Income Fund — Income 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
Schwab International Opportunities 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 Health Care Fund	Schwab Target 2055 Index Fund
Schwab International Core Equity Fund	Schwab Target 2060 Index Fund
Schwab Target 2010 Fund	Schwab Target 2065 Index Fund

Schwab Fundamental Global Real Estate Index Fund offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of the fund. Each share has a par value of 1/1,000 of a cent, and the fund’s Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.

The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law. The "Fund Complex" includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust.

2. Significant Accounting Policies:

The following is a summary of the significant accounting policies the fund uses in its preparation of financial statements. The fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).

The fund may invest in certain mutual funds and exchange-traded funds (ETFs), which are referred to as "underlying funds". For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the U.S. Securities and Exchange Commission (SEC) and are available on the SEC’s website at www.sec.gov.

20Schwab Fundamental Global Real Estate Index Fund | Annual Report

Schwab Fundamental Global Real Estate Index Fund

Financial Notes (continued)

2. Significant Accounting Policies (continued):

(a) Security Valuation:

Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated authority to a Valuation Designee, the fund’s investment adviser, to make fair valuation determinations under adopted procedures, subject to Board oversight. The investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and liabilities as well as to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair value. The Valuation Designee may utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

Securities held in the fund’s portfolio are valued every business day. The following valuation policies and procedures are used by the Valuation Designee to value various types of securities:

• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.

• Foreign equity security fair valuation: The Valuation Designee has adopted procedures to fair value foreign equity securities that are traded in markets that close prior to the valuation of the fund’s holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, the Valuation Designee seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of the fund’s portfolio holdings and the NAV of the fund’s shares and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of the fund and that of its comparative index or benchmark.

• Futures contracts: Futures contracts are valued at their settlement prices as of the close of their exchanges.

• Mutual funds: Mutual funds are valued at their respective NAVs.

• Cash management sweep time deposits: Balances held in cash management sweep time deposits were accounted for on a cost basis, which approximated fair value.

• Securities for which no quoted value is available: The Valuation Designee has adopted procedures to fair value the fund’s securities when market prices are not “readily available” or are unreliable. For example, a security may be fair valued when it’s de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Fair value determinations are made in good faith in accordance with adopted valuation procedures. The Valuation Designee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Valuation Designee may employ methods 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. Due to the subjective and variable nature of fair value pricing, there can be no assurance that the fund could obtain the fair value assigned to the security upon the sale of such security.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair value of its investments in a hierarchy that prioritizes the significant inputs to valuation methods used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If it is determined that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and the Valuation Designee’s judgment will be required to estimate fair value.

Schwab Fundamental Global Real Estate Index Fund | Annual Report21

Schwab Fundamental Global Real Estate Index Fund

Financial Notes (continued)

2. Significant Accounting Policies (continued):

The three levels of the fair value hierarchy are as follows:

• Level 1 — quoted prices in active markets for identical investments — Investments whose values are based on quoted market prices in active markets, These generally include active listed equities, mutual funds, ETFs and futures contracts. Mutual funds and ETFs are classified as Level 1 prices, without consideration to the classification level of the underlying securities held.

• 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. In addition, international securities whose markets close hours before the valuation of the fund’s holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Valuation Designee has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets.

• Level 3 — significant unobservable inputs (including the Valuation Designee’s 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 readily available for these securities, one or more valuation methods are used for which sufficient and reliable data is available. The inputs used 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 in the absence of market information. Assumptions used due to the lack of observable inputs may significantly impact the resulting fair value and therefore a fund’s results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The levels associated with valuing the fund’s investments as of February 28, 2023, are disclosed in the Portfolio Holdings.

(b) Accounting Policies for certain Portfolio Investments (if held):

Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. The fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by the fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their value may change daily.

Securities Lending: Under the trust’s Securities Lending Program, the fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides the fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating pursuant to Rule 2a-7 under the 1940 Act. The fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the fund or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in the fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between the fund and the lending agent. The aggregate fair value of securities loaned will not at any time exceed one-third of the total assets of the fund, including collateral received from the loan. Securities lending fees paid to the unaffiliated lending agents start at 9% of gross lending revenue, with subsequent breakpoints to a low of 5%. In this context, the gross lending revenue equals the income received from

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Schwab Fundamental Global Real Estate Index Fund

Financial Notes (continued)

2. Significant Accounting Policies (continued):

the investment of cash collateral and fees paid by borrowers less any rebates paid to the borrowers. Any expenses charged by the cash collateral fund are in addition to these fees. All remaining revenue is retained by the fund, as applicable. No portion of lending revenue is paid to or retained by the investment adviser or any of its affiliates.

As of February 28, 2023, the fund had no securities on loan.

Cash Management Transactions: Effective May 23, 2022 Brown Brothers Harriman & Co. (BBH) was replaced by Citibank, N.A as custodian of the fund. The fund no longer subscribes to the BBH Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep was an investment product that automatically swept the fund’s cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allowed the fund to earn interest on cash balances. Excess cash invested with deposit institutions domiciled outside of the U.S., as with any offshore deposit, was subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. The fund assumed the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit was ultimately placed. The fund terminated the CMS Sweep program and cash was returned to the fund prior to terminating services with BBH.

Cash Investments: The fund may invest a portion of its assets in cash. Cash includes cash bank balances in an interest-bearing demand deposit account with maturity on demand by the fund.

Passive Foreign Investment Companies: The fund may own shares in certain foreign corporations that meet the Internal Revenue Code definition of a Passive Foreign Investment Company (PFIC). The fund may elect for tax purposes to mark-to-market annually the shares of each PFIC lot held and would be required to distribute as ordinary income to shareholders any such marked-to-market gains (as well as any gains realized on sale).

Central Securities Depositories Regulation: The Central Securities Depositories Regulation (CSDR) introduced measures for the authorization and supervision of European Union Central Security Depositories and created a common set of prudential, organizational, and conduct of business standards at a European level. CSDR is designed to support securities settlement and operational aspects of securities settlement, including the provision of shorter settlement periods; mandatory buy-ins; and cash penalties, to prevent and address settlement fails. CSDR measures are aimed to prevent settlement fails by ensuring that all transaction details are provided to facilitate settlement, as well as further incentivizing timely settlement by imposing cash penalty fines and buy-ins. The Fund may be subject to pay cash penalties and may also receive cash penalties with certain counterparties in instances where there are settlement fails. These cash penalties are included in net realized gains (losses) on sales of securities in the fund’s Statement of Operations, if any.

Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.

Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The fund does not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Gains realized by the fund on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the fund records a liability based on unrealized appreciation to provide for potential non-U.S. taxes payable upon the sale of these securities.

When the fund closes out a futures contract position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.

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Schwab Fundamental Global Real Estate Index Fund

Financial Notes (continued)

2. Significant Accounting Policies (continued):

The fund invests in real estate investment trusts (REITs) which report information on the source of their distributions annually. The fund’s policy is to record all REIT distributions initially as dividend income on the ex-dividend date and then re-designate them as return of capital and/or capital gain distributions at the end of the reporting period based on information provided annually by each REIT, and management estimates such re-designations when actual information has not yet been reported.

(d) Investment Income:

Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the fund records certain foreign security dividends on the date the ex-dividend date is confirmed. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.

Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.

(e) Expenses:

Pursuant to an Amended and Restated Investment Advisory and Administration Agreement (Advisory Agreement) between the investment adviser and the fund, the investment adviser pays the operating expenses of the fund, excluding acquired fund fees and expenses, taxes, any brokerage expenses, and extraordinary or non-routine expenses. Taxes, any brokerage expenses and extraordinary or non-routine expenses that are specific to the fund are charged directly to the fund. The Advisory Agreement excludes paying acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds.

(f) Distributions to Shareholders:

The fund makes distributions from net investment income, if any, quarterly and from net realized capital gains, if any, once a year. To receive a distribution, you must be a registered shareholder on the record date. Distributions are paid to shareholders on the payable date.

(g) Accounting Estimates:

The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.

(h) Federal Income Taxes:

The fund intends to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the fund distributes substantially all of its net investment income and net realized capital gains, if any, to its shareholders each year. As long as the fund meets the tax requirements, it is not required to pay federal income tax.

(i) Foreign Taxes:

The fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the fund invests. These foreign taxes, if any, are paid by the fund and are disclosed in the Statement of Operations. Foreign taxes accrued as of February 28, 2023, if any, are reflected in the fund’s Statement of Assets and Liabilities.

(j) Indemnification:

Under the fund’s organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business the fund enters into contracts with its vendors and others that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the fund. However, based on experience, the fund expects the risk of loss attributable to these arrangements to be remote.

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Schwab Fundamental Global Real Estate Index Fund

Financial Notes (continued)

2. Significant Accounting Policies (continued):

(k) Regulatory Update:

Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these rule and form amendment changes on the content of the current shareholder report and the newly created annual and semiannual streamlined shareholder reports.

3. Risk Factors:

Investing in the fund may involve certain risks, as discussed in the fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.

Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. Markets may be impacted by economic, political, regulatory and other conditions, including economic sanctions and other government actions. In addition, the occurrence of global events, such as war, terrorism, environmental disasters, natural disasters and epidemics, may also negatively affect the financial markets. As with any investment whose performance is tied to these markets, the value of an investment in the fund will fluctuate, which means that an investor could lose money over short or long periods.

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.

Investment Style Risk. The fund is an index fund. Therefore, the fund follows the securities included in the index during upturns as well as downturns. Because of its indexing strategy, the fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the fund’s expenses, the fund’s performance may be below that of the index. Errors relating to the index may occur from time to time and may not be identified by the index provider for a period of time. In addition, market disruptions could cause delays in the index’s rebalancing schedule. Such errors and/or market disruptions may result in losses for the fund.

Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, the fund’s performance could be impacted.

Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.

Mid-Cap Company Risk. Mid-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies and the value of securities issued by these companies may move sharply.

Small-Cap Company Risk. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.

Real Estate Investment Risk. Due to the composition of the index, the fund will concentrate its investments in real estate companies and companies related to the real estate industry. As such, the fund is subject to risks associated with the direct ownership of real estate securities and an investment in the fund will be closely linked to the performance of the real estate markets. These risks include, among others: declines in the value of real estate; risks related to general and local economic conditions; possible lack of availability of mortgage funds or other limits to accessing the credit or capital markets; defaults by borrowers or tenants, particularly during an economic downturn; and changes in interest rates.

REITs Risk. In addition to the risks associated with investing in securities of real estate companies and real estate related companies, REITs are subject to certain additional risks. Equity REITs may be affected by changes in the value of the underlying properties owned by the trusts. Further, REITs are dependent upon specialized management skills and cash flows, and may have their investments in relatively few properties, or in a small geographic area or a single property type. Failure of a company to qualify as a REIT under federal tax law may have adverse consequences to the fund. In addition, REITs have their own expenses, and the fund will bear a proportionate share of those expenses.

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Schwab Fundamental Global Real Estate Index Fund

Financial Notes (continued)

3. Risk Factors (continued):

Foreign Investment Risk. The fund’s investments in securities of foreign issuers involve certain risks that may be 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); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of the fund’s investments and could impair the fund’s ability to meet its investment objective or invest in accordance with its investment strategy. There is a risk that investments in securities denominated in, and/or receiving revenues in, foreign currencies will decline in value relative to the U.S. dollar. Foreign securities also include American Depositary receipts (ADRs), Global Depositary receipts (GDRs) and European Depositary receipts (EDRs), which may be less liquid than the underlying shares in their primary trading market, and GDRs, in particular, many of which are issued by companies in emerging markets, may be more volatile. Foreign securities may also include investments in variable interest entities (VIEs) structures, which are created by China-based operating companies in jurisdictions outside of China to obtain indirect financing due to Chinese regulations that prohibit non-Chinese ownership of those companies. To the extent the fund’s investments in a single country or a limited number of countries represent a large percentage of the fund’s assets, the fund’s performance may be adversely affected by the economic, political, regulatory and social conditions in those countries, and the fund’s price may be more volatile than the price of a fund that is geographically diversified.

Emerging Markets Risk. Emerging market countries may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting, auditing, financial reporting and record keeping requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in developed countries. As a result, there may be an increased risk of illiquidity and price volatility associated with the fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar, and, at times, it may be difficult to value such investments.

Sampling Index Tracking Risk. The fund may not fully replicate the index and may hold securities not included in the index. As a result, the fund is subject to the risk that the investment adviser’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. Because the fund utilizes a sampling approach it may not track the return of the index as well as it would if the fund purchased all of the securities in the index.

Tracking Error Risk. As an index fund, the fund seeks to track the performance of the index, although it may not be successful in doing so. The divergence between the performance of the fund and the index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.

Concentration Risk. To the extent that the fund’s or the index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country, or asset class (including the real estate industry, as described above), the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector, country, or asset class.

Derivatives Risk. The fund may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right, but not the obligation, to buy or sell an instrument at a specific price on or before a specific date. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. A swap is an agreement whereby two parties agree to exchange payment streams calculated in relation to a rate, index, instrument or certain securities and a predetermined amount. The fund’s use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) could cause the fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.

The fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk, leverage risk and market risk, are discussed elsewhere in this section. The fund’s use of derivatives is also subject to counterparty risk, lack of availability risk, valuation risk, correlation risk and tax risk. Counterparty risk is the risk that the counterparty to a derivatives transaction may not fulfill its contractual obligations either because the financial condition of the counterparty declines, or because the counterparty is otherwise unable or unwilling to perform under the contract. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly

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Schwab Fundamental Global Real Estate Index Fund

Financial Notes (continued)

3. Risk Factors (continued):

with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause the fund to realize higher amounts of short-term capital gains. The fund’s use of derivatives could reduce the fund’s performance, increase the fund’s volatility, and could cause the fund to lose more than the initial amount invested.

Exchange-Traded Fund (ETF) Risk. The fund may purchase shares of ETFs to gain exposure to a particular portion of the market while awaiting an opportunity to purchase securities directly. When the fund invests in an ETF, in addition to directly bearing the expenses associated with its own operation, it will bear a proportionate share of the ETF’s expenses. Therefore, it may be more costly to own an ETF than to own the underlying securities directly. In addition, while the risks of owning shares of an ETF generally reflect the risks of owning the underlying securities the ETF holds, lack of liquidity in the market for an ETF’s shares can result in its value being more volatile than the underlying portfolio of securities.

Liquidity Risk. The fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.

Leverage Risk. Certain fund transactions, such as derivatives transactions, may give rise to a form of leverage and may expose the fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of the fund’s portfolio securities which means even a small amount of leverage can have a disproportionately large impact on the fund. The use of leverage may cause the fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy its obligations.

Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.

Please refer to the fund’s prospectus for a more complete description of the principal risks of investing in the fund.

4. Affiliates and Affiliated Transactions:

Investment Adviser

Charles Schwab Investment Management, Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as the fund’s investment adviser and administrator pursuant to an Investment Advisory Agreement between the investment adviser and the trust.

For its advisory and administrative services to the fund, the investment adviser is entitled to receive an annual fee, payable monthly, equal to 0.39% of the fund’s average daily net assets.

Interfund Transactions

The fund may engage in transactions with certain other funds in the Fund Complex in accordance with procedures adopted by the Board pursuant to Rule 17a-7 under the 1940 Act. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended February 28, 2023, the fund’s purchases and sales of securities with other funds in the Fund Complex was $2,851,585 and $3,526,358 respectively and includes realized gains of $149,390.

Interfund Borrowing and Lending

Pursuant to an exemptive order issued by the SEC, the fund may enter into interfund borrowing and lending transactions with other funds in the Fund Complex. All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The fund had no interfund borrowing or lending activity during the period.

5. Board of Trustees:

The Board may include people who are officers and/or directors of the investment adviser or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The fund did not pay any interested or non-interested (independent) trustees. The independent trustees are paid by the investment adviser. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.

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Schwab Fundamental Global Real Estate Index Fund

Financial Notes (continued)

6. Borrowing from Banks:

During the period, the fund was a participant with other funds in the Fund Complex in a joint, syndicated, committed $850 million line of credit (the Syndicated Credit Facility), which matured on September 29, 2022. On September 29, 2022, the Syndicated Credit Facility was amended to run for a new 364 day period with the line of credit amount increasing to $1 billion, maturing on September 28, 2023. Under the terms of the Syndicated Credit Facility, in addition to the investment adviser paying the interest charged on any borrowings by the fund, the investment adviser paid a commitment fee of 0.15% per annum on the fund’s proportionate share of the unused portion of the Syndicated Credit Facility.

During the period, the fund was a participant with other funds in the Fund Complex in a joint, unsecured, uncommitted $400 million line of credit (the Uncommitted Credit Facility), with State Street Bank and Trust Company, which matured on September 29, 2022, On September 29, 2022, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 28, 2023. Under the terms of the Uncommitted Credit Facility, the investment adviser pays interest on the amount the fund borrows. There were no borrowings from either line of credit during the period.

The fund also has access to custodian overdraft facilities. The fund may have utilized the overdraft facility and incurred an interest expense, which is paid by the investment adviser. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.

7. Derivatives:

The fund entered into equity index futures contracts during the report period. The fund invested in futures contracts to equitize available cash. The value and variation margin for futures contracts held at February 28, 2023, are presented in the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized gains (losses) and net change in unrealized appreciation (depreciation) on futures contracts are presented in the Statement of Operations, if any. Refer to financial note 2(b) for the fund’s accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended February 28, 2023, the month-end average notional amounts of futures contracts held by the fund was $689,131 and the month-end average number of contracts held was 14.

8. Purchases and Sales of Investment Securities:

For the period ended February 28, 2023, purchases and sales of securities (excluding short-term obligations) were as follows:

PURCHASES OF SECURITIES	SALES OF SECURITIES
$37,669,938	$38,964,466

9. Federal Income Taxes:

As of February 28, 2023, the tax basis cost of the fund’s investments and gross unrealized appreciation and depreciation were as follows:

TAX COST	GROSS UNREALIZED APPRECIATION	GROSS UNREALIZED DEPRECIATION	NET UNREALIZED APPRECIATION (DEPRECIATION)
$113,511,830	$18,474,581	($28,158,941)	($9,684,360)

As of February 28, 2023, the components of distributable earnings on a tax basis were as follows:

UNDISTRIBUTED ORDINARY INCOME	NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS	NET OTHER UNREALIZED APPRECIATION (DEPRECIATION)	CAPITAL LOSS CARRYFORWARDS AND OTHER LOSSES	TOTAL
$596,223	($9,684,360)	($7,173)	($11,498,226)	($20,593,536)

The primary differences between book basis and tax basis unrealized appreciation or unrealized depreciation of investments are the tax deferral of losses on wash sales, the realization for tax purposes of unrealized appreciation (depreciation) on futures contracts, the realization for tax purposes of unrealized appreciation on investments in PFICs and partnership investments. The tax cost of the fund’s investments, disclosed above, have been adjusted from its book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.

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Schwab Fundamental Global Real Estate Index Fund

Financial Notes (continued)

9. Federal Income Taxes (continued):

Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of February 28, 2023, the fund had capital loss carryforwards of $11,498,226.

The tax basis components of distributions paid during the current and prior fiscal years were as follows:

	CURRENT FISCAL YEAR END DISTRIBUTIONS	PRIOR FISCAL YEAR END DISTRIBUTIONS
	ORDINARY INCOME	ORDINARY INCOME
	$3,154,839	$4,151,292

Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations.

As of February 28, 2023, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the fund, and has determined that no provision for income tax is required in the fund’s financial statements. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the fiscal year ended February 28, 2023, the fund did not incur any interest or penalties.

10. Subsequent Events:

Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.

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Schwab Fundamental Global Real Estate Index Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Schwab Capital Trust and Shareholders of Schwab Fundamental Global Real Estate Index Fund:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities, including the portfolio holdings, of Schwab Fundamental Global Real Estate Index Fund (the “Fund”), one of the funds constituting Schwab Capital Trust, as of February 28, 2023, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period ended, the financial highlights for each of the three years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of February 28, 2023, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the three years in the period then ended in conformity with accounting principles generally accepted in the United States of America. The financial highlights for each of the two years in the period ended February 29, 2020 were audited by other auditors, whose report, dated April 16, 2020, expressed an unqualified opinion on such financial highlights.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of February 28, 2023 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

Deloitte & Touche LLP
Denver, Colorado
April 17, 2023

We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.

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Schwab Fundamental Global Real Estate Index Fund

Liquidity Risk Management Program (unaudited)

The fund has adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The fund’s Board of Trustees (the “Board”) has designated the fund’s investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.

Under the program, the investment adviser manages a fund’s liquidity risk, which is the risk that the fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the fund. The program is reasonably designed to assess and manage a fund’s liquidity risk, taking into consideration the fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each fund’s investments is supported by third-party liquidity assessment vendors.

The fund’s Board reviewed a report at its meeting held on September 19, 2022 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2021, through May 31, 2022, which included individual fund liquidity metrics. No significant liquidity events impacting the fund were noted in the report. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing the fund’s liquidity risk.

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Schwab Fundamental Global Real Estate Index Fund

Trustees and Officers

The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the fund covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 105 funds.

The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-877-824-5615.

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
Michael J. Beer 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 2022)	Retired. Director, President and Chief Executive Officer (Dec. 2016 – Sept. 2019), Principal Funds (investment management).	105	Director (2016 – 2019), Principal Funds, Inc.
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.	105	None
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.	105	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.	105	Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – 2021), 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).	105	None

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Schwab Fundamental Global Real Estate Index Fund

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)	Co-Chairman of the Board (July 2022 – present), Director and Chief Executive Officer (Oct. 2008 – present) and President (Feb. 2007 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), 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), Chief Executive Officer (Aug. 2017 – present) and President (Aug. 2017 – Nov. 2021), Schwab Holdings, Inc.; Director (Oct. 2020 – present), TD Ameritrade Holding Corporation; Director (July 2016 – Oct. 2021), Charles Schwab Investment Management, Inc.	105	Director (2008 – present), The Charles Schwab Corporation
Richard A. Wurster2 1973 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2022)	President (Oct. 2021 – present) and Executive Vice President – Schwab Asset Management Solutions (Apr. 2019 – Oct. 2021), The Charles Schwab Corporation; President, Director (Oct. 2021 – present), Executive Vice President – Schwab Asset Management Solutions (July 2019 – Oct. 2021) and Senior Vice President – Advisory (May 2016 – July 2019), Charles Schwab & Co., Inc.; President (Nov. 2021 – present), Schwab Holdings, Inc.; Director (Oct. 2021 – present) and Chief Executive Officer (Nov. 2019 – Jan. 2022), Charles Schwab Investment Management, Inc.; Director, Chief Executive Officer and President (Mar. 2018 – Oct. 2022), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (July 2016 – Apr. 2018) and President (Mar. 2017 – Apr. 2018), ThomasPartners, Inc.; Chief Executive Officer (July 2016 – Apr. 2018), Windhaven Investment Management, Inc.	105	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. 2021 – present), and Chief Executive Officer (Apr. 2019 – Nov. 2019), Charles Schwab Investment Management, Inc.; Senior Vice President (June 2020 – Mar. 2022) and Chief Operating Officer (Jan. 2021 – Mar. 2022), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (Apr. 2019 – present), President (Nov. 2018 – present) and Trustee (Apr. 2019 – Dec. 2020), Schwab Funds, Laudus Trust and Schwab ETFs; Managing Director (May 2022 – present), Senior Vice President (Apr. 2019 – May 2022) and Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), Charles Schwab & Co., Inc.
Mark Fischer 1970 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)	Chief Operating Officer (Dec. 2020 – present) and Treasurer and Chief Financial Officer (Jan. 2016 – Dec. 2022), Schwab Funds, Laudus Trust and Schwab ETFs; Chief Financial Officer (Mar. 2020 – present) and Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.
Dana Smith 1965 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2023)	Treasurer and Chief Financial Officer (Jan. 2023 – present) and Assistant Treasurer (Dec. 2015 – Dec. 2022), Schwab Funds, Laudus Trust and Schwab ETFs; Vice President (Mar. 2022 – present) and Director (Oct. 2015 – Mar. 2022), Charles Schwab Investment Management, Inc.

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Schwab Fundamental Global Real Estate Index Fund

Officers of the Trust (continued)
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
Omar Aguilar 1970 Vice President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011)	Chief Executive Officer (Jan. 2022 – present), Chief Investment Officer (Apr. 2011 – present) and Senior Vice President (Apr. 2011 – Dec. 2021), Charles Schwab Investment Management, Inc.; Director, Chief Executive Officer and President (Oct. 2022 – present), Charles Schwab Investment Advisory, Inc.; Vice President and Chief Investment Officer (June 2011 – present), Schwab Funds, Laudus Trust and Schwab ETFs.
Brett Wander 1961 Vice President and Chief Investment Officer (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.; Vice President and Chief Investment Officer (June 2011 – present), Schwab Funds, Laudus Trust and Schwab ETFs.
William P. McMahon, Jr. 1972 Vice President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021)	Senior Vice President and Chief Investment Officer (Jan. 2020 – present), Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer (June 2021 – present), Schwab Funds, Laudus Trust and Schwab ETFs; Senior Vice President and Chief Investment Officer – ThomasPartners Strategies (Apr. 2018 – Dec. 2019), Charles Schwab Investment Advisory, Inc.; Senior Vice President and Chief Investment Officer (May 2001 – Apr. 2018), ThomasPartners, Inc.
Catherine MacGregor 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Trust (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)	Chief Legal Officer (Mar. 2022 – present) and Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Managing Director (May 2022 – present) and Vice President (July 2005 – May 2022), Charles Schwab & Co., Inc.; Vice President (Dec. 2005 – present) and Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Trust; Chief Legal Officer and Secretary (Oct. 2021 – present), Vice President (Nov. 2005 – Oct. 2021) and Assistant Secretary (June 2007 – Oct. 2021), Schwab Funds; Chief Legal Officer and Secretary (Oct. 2021 – present), Vice President and Assistant Secretary (Oct. 2009 – Oct. 2021), Schwab ETFs.

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.

Mr. Bettinger and Mr. Wurster are Interested Trustees. Mr. Bettinger and Mr. Wurster are Interested Trustees because each owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc., the investment adviser for the trusts in the Fund Complex, and is an employee of Charles Schwab & Co., Inc. (Schwab), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust.

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.

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Schwab Fundamental Global Real Estate Index Fund

Glossary

asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.

asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.

beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.

Bloomberg US Aggregate Bond Index An index that is a broad-based benchmark measuring the performance of the U.S. investment grade, taxable bond market, including U.S. Treasuries, government-related and corporate bonds, mortgage pass-through securities, commercial mortgage-backed securities, and asset-backed securities that are publicly available for sale in the United States. To be eligible for inclusion in the index, securities must be fixed rate, non-convertible, U.S. dollar-denominated with at least $300 million or more of outstanding face value and have one or more years remaining to maturity. The index excludes certain types of securities, including tax-exempt state and local government series bonds, structured notes embedded with swaps or other special features, private placements, floating rate securities, inflation-linked bonds and Eurobonds. The index is market capitalization weighted and the securities in the index are updated on the last business day of each month.

bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”

An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.

cap, capitalization See “market cap.”

capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.

Dow Jones Equity All REIT Capped Index A float-adjusted market cap weighted index that is designed to measure all equity real estate investment trusts (REITs) in the Dow Jones U.S. Total Stock Market Index, as defined by the S&P Dow Jones Indices REIT/RESI Industry Classification Hierarchy, that meet the minimum float market capitalization (FMC) and liquidity thresholds. The aggregate weight of all companies weighing more than 4.5% cannot exceed 22.5%, and no single company’s weight can exceed 10%. The index is reviewed daily based on each company’s capped market capitalization weight. Daily capping is only performed when the sum of companies with weights great than 5% exceeds 25%.

earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.

earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.

expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.

FTSE EPRA Nareit Global Index (Net) An index that provides a diverse representation of publicly traded equity real estate investment trusts (REITs) and listed property companies worldwide. The index constituents are free-float adjusted, and screened on liquidity, size and revenue. The index is comprised of countries in developed and emerging markets. The Net of Tax Index is calculated based on the maximum withholding tax rates applicable to dividends received by institutional investors who are not resident in the same country as the remitting company and who do not benefit from double taxation treaties.

market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.

median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.

MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.

MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.

net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.

outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.

price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.

price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.

real estate investment trust (REIT) Real estate companies that own and commonly operate income producing commercial and/or residential real estate.

real estate operating companies (REOC) Real estate companies that engage in the development, management or financing of real estate.

return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.

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Schwab Fundamental Global Real Estate Index Fund

rights and warrants Rights and warrants are types of securities that entitle the holder to purchase a proportionate amount of common stock at a specified price for a specific period of time. Rights allow a shareholder to buy more shares directly from the company, usually at a price somewhat lower than the current market price of the outstanding shares. Warrants are usually issued with bonds and preferred stock. Rights and warrants can trade on the market separately from the company’s stock. The prices of rights and warrants do not necessarily move parallel to the prices of the underlying common stock. Rights usually expire within a few weeks of issuance, while warrants may not expire for several years. If a right or warrant is not exercised within the specified time period, it will become worthless and a fund will lose the purchase price it paid for the right or warrant and the right to purchase the underlying security.

Russell RAFI Global Select Real Estate Index (Net) An index that is derived from constituents of the Russell RAFI Global Index that are classified as real estate or real estate investment trusts (REITs) according to the Russell Global Sectors classification scheme. Fundamental methodology ranks and weights global real estate securities by three fundamental measures of company size adjusted sales, retained operating cash flow and dividends plus buybacks rather

than by market capitalization. Mortgage and timber REITs are excluded. Securities are ranked by each fundamental factor, and individual factor weights are averaged to determine overall fundamental weights. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis.

S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.

stock A share of ownership, or equity, in the issuing company.

total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.

weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.

yield The income paid out by an investment, expressed as a percentage of the investment’s market value.

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Schwab Fundamental Global Real Estate Index Fund

Schwab Asset Management

With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Schwab Asset Management advocates for investors of all sizes with a steadfast focus on lowering costs and reducing unnecessary complexity. The list below shows all currently available Schwab Funds®.

Investors should carefully consider information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses before investing. Please call 1-877-824-5615 for a prospectus for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.

Proxy Voting Policies, Procedures and Results

A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab Funds’ website at www.schwabassetmanagement.com/schwabfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab Funds at 1-877-824-5615.

Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.

Schwab Funds

Equity Funds

Schwab Core Equity Fund

Schwab Dividend Equity Fund

Schwab Large-Cap Growth Fund

Schwab Small-Cap Equity Fund

Schwab Health Care Fund

Schwab International Core Equity Fund

Schwab International Opportunities Fund

Schwab Select Large Cap Growth Fund

Schwab Fundamental US Large Company Index Fund

Schwab Fundamental US Small Company Index Fund

Schwab Fundamental International Large Company Index Fund

Schwab Fundamental International Small Company Index Fund

Schwab Fundamental Emerging Markets Large Company Index Fund

Schwab Fundamental Global Real Estate Index Fund

Schwab Global Real Estate Fund

Schwab S&P 500 Index Fund

Schwab 1000 Index® Fund

Schwab Small-Cap Index Fund®

Schwab Total Stock Market Index Fund®

Schwab U.S. Large-Cap Growth Index Fund

Schwab U.S. Large-Cap Value Index Fund

Schwab U.S. Mid-Cap Index Fund

Schwab International Index Fund®

Asset Allocation Funds

Schwab Balanced Fund

Schwab MarketTrack Portfolios®

Schwab Target Funds

Schwab Target Index Funds

Schwab Monthly Income Funds

Bond Funds

Schwab Treasury Inflation Protected Securities Index Fund

Schwab U.S. Aggregate Bond Index Fund

Schwab Short-Term Bond Index Fund

Schwab Tax-Free Bond Fund1

Schwab California Tax-Free Bond Fund1

Schwab Opportunistic Municipal Bond Fund

Schwab Money Funds2

Schwab provides a broad choice of taxable and tax-exempt money market funds for both retail and institutional client types.

Investment Adviser

Charles Schwab Investment Management, Inc., dba Schwab Asset Management

211 Main Street, San Francisco, CA 94105

Funds

Schwab Funds

1-877-824-5615

State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation.

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.

Registrant’s Board of Trustees has determined that Kimberly S. Patmore, Michael J. Beer and J. Derek Penn, 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 Registrant’s audit, compliance and valuation committee is “independent” under the standards set forth in Item 3 of Form N-CSR.

The designation of each of Ms. Patmore, Mr. Beer and Mr. Penn 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 Registrant’s 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 Registrant’s audit, compliance and valuation committee or Board of Trustees.

Registrant is composed of fifty-two 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-six 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-two operational series during 2022/2023 and 2021/2022, based on their respective 2022/2023 and 2021/2022 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:

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.

Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Item 12: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

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

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.

Number of Holdings	378
Weighted Average Market Cap (millions)	$17,715
Price/Earnings Ratio (P/E)	11.6
Price/Book Ratio (P/B)	0.8
Portfolio Turnover Rate	32%

	3/1/22– 2/28/23	3/1/21– 2/28/22	3/1/20– 2/28/21	3/1/19– 2/29/20	3/1/18– 2/28/19
Per-Share Data
Net asset value at beginning of period	$11.48	$11.05	$11.06	$11.43	$11.24
Income (loss) from investment operations:
Net investment income (loss)1	0.30	0.34	0.30	0.37	0.37
Net realized and unrealized gains (losses)	(2.16)	0.44	0.05	(0.24)	0.38
Total from investment operations	(1.86)	0.78	0.35	0.13	0.75
Less distributions:
Distributions from net investment income	(0.27)	(0.35)	(0.34)	(0.47)	(0.44)
Distributions from net realized gains	—	—	(0.02)	(0.03)	(0.12)
Total distributions	(0.27)	(0.35)	(0.36)	(0.50)	(0.56)
Net asset value at end of period	$9.35	$11.48	$11.05	$11.06	$11.43
Total return	(16.30%)	7.02%	3.62%	0.91%	7.00%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.39%2	0.39%	0.39%	0.39%	0.39%
Net investment income (loss)	3.01%	2.86%	3.17%	3.16%	3.32%
Portfolio turnover rate	32%	32%	25%	16%	16%
Net assets, end of period (x 1,000,000)	$104	$134	$157	$196	$190

	NUMBER OF CONTRACTS	NOTIONAL AMOUNT ($)	CURRENT VALUE/ UNREALIZED DEPRECIATION ($)
FUTURES CONTRACTS
Long
Dow Jones U.S. Real Estate Index, expires 03/17/23	5	168,750	(4,900)
MSCI EAFE Index, expires 03/17/23	1	102,330	(3,626)
MSCI Emerging Markets Index, expires 03/17/23	2	96,290	(5,403)
Net Unrealized Depreciation			(13,929)

ADR —	American Depositary Receipt
CVA —	Dutch Certificate
ETF —	Exchange-traded fund
NVDR —	Non-Voting Depositary Receipt
REIT —	Real Estate Investment Trust
HKD —	Hong Kong Dollar

Assets
Investments in securities, at value - unaffiliated (cost $98,572,401)		$103,841,399
Foreign currency, at value (cost $142,451)		141,063
Deposit with broker for futures contracts		70,647
Receivables:
Dividends		173,746
Fund shares sold		132,093
Foreign tax reclaims		64,952
Income from securities on loan		1,367
Prepaid expenses	+	16,151
Total assets		104,441,418

Liabilities
Payables:
Fund shares redeemed		94,404
Investments bought		36,653
Investment adviser fees		32,637
Due to custodian		3,923
Variation margin on futures contracts	+	2,087
Total liabilities		169,704
Net assets		$104,271,714

Net Assets by Source
Capital received from investors		$124,865,250
Total distributable loss	+	(20,593,536)
Net assets		$104,271,714

1	Calculated based on the average shares outstanding during the period.
2	Ratio includes less than 0.005% of non-routine proxy expenses.

*	Non-income producing security.
(a)	Fair valued using significant unobservable inputs (see financial note 2(a), Securities for which no quoted value is available, for additional information).

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$104,271,714		11,147,379		$9.35

For the period March 1, 2022 through February 28, 2023
Investment Income
Dividends received from securities - unaffiliated (net of foreign withholding tax of $284,204)		$4,004,534
Securities on loan, net	+	37,687
Total investment income		4,042,221

Expenses
Investment adviser fees		462,940
Proxy fees1	+	5,274
Total expenses	–	468,214
Net investment income		3,574,007

REALIZED AND UNREALIZED GAINS (LOSSES)
Net realized losses on sales of securities - unaffiliated		(6,111,373)
Net realized gains on futures contracts		47,590
Net realized losses on foreign currency transactions	+	(7,240)
Net realized losses		(6,071,023)
Net change in unrealized appreciation (depreciation) on securities - unaffiliated		(20,063,429)
Net change in unrealized appreciation (depreciation) on futures contracts		1,138
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	(12,387)
Net change in unrealized appreciation (depreciation)	+	(20,074,678)
Net realized and unrealized losses		(26,145,701)
Decrease in net assets resulting from operations		($22,571,694)

OPERATIONS
	3/1/22-2/28/23		3/1/21-2/28/22
Net investment income		$3,574,007	$4,133,334
Net realized losses		(6,071,023)	(643,444)
Net change in unrealized appreciation (depreciation)	+	(20,074,678)	7,331,577
Increase (decrease) in net assets resulting from operations		($22,571,694)	$10,821,467

DISTRIBUTIONS TO SHAREHOLDERS
Total distributions		($3,154,839)	($4,151,292)

TRANSACTIONS IN FUND SHARES
	3/1/22-2/28/23			3/1/21-2/28/22
		SHARES	VALUE	SHARES	VALUE
Shares sold		3,601,848	$35,951,779	2,976,893	$35,250,664
Shares reinvested		224,488	2,169,157	252,264	2,954,749
Shares redeemed	+	(4,360,523)	(42,173,011)	(5,736,493)	(67,586,304)
Net transactions in fund shares		(534,187)	($4,052,075)	(2,507,336)	($29,380,891)

SHARES OUTSTANDING AND NET ASSETS
	3/1/22-2/28/23			3/1/21-2/28/22
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		11,681,566	$134,050,322	14,188,902	$156,761,038
Total decrease	+	(534,187)	(29,778,608)	(2,507,336)	(22,710,716)
End of period		11,147,379	$104,271,714	11,681,566	$134,050,322

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
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).	105	None
J. Derek Penn 1957 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021)	Head of Equity Sales and Trading (2006 – 2018), BNY Mellon (financial services).	105	None


(a)Audit Fees¹				(b)Audit-Related Fees²				(c) Tax Fees³				(d) All Other Fees
Fiscal Year 2022/2023		Fiscal Year 2021/2022		Fiscal Year 2022/2023		Fiscal Year 2021/2022		Fiscal Year 2022/2023		Fiscal Year 2021/2022		Fiscal Year 2022/2023		Fiscal Year 2021/2022
$	1,195,825	$	1,187,075	$	90,000	$	90,000	$	161,200	$	161,200	$	0	$	0



By:		/s/ Jonathan de St. Paer
		Jonathan de St. Paer Chief Executive Officer

Date:		April 17, 2023