UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07704
Schwab Capital Trust – Schwab Fundamental Global Real Estate Index Fund
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
Omar Aguilar
Schwab Capital Trust – Schwab Fundamental Global Real Estate Index Fund
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 636-7000
Date of fiscal year end: February 28
Date of reporting period: August 31, 2023
Item 1: Report(s) to Shareholders.
In This Report
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset ManagementTM
Distributor: Charles
Schwab & Co., Inc. (Schwab)
The Sector/Industry classifications in this report use the Global
Industry Classification Standard (GICS) which was developed by and is the exclusive property of MSCI Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a
service mark of MSCI and S&P and has been licensed for use by Schwab.
Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report1
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 6 Months
Ended August 31, 2023 | |
| Schwab Fundamental Global Real Estate Index Fund (Ticker
Symbol: SFREX) |
-4.52% |
| Russell RAFITM Global Select Real Estate Index
(Net)1 |
-4.89% |
| FTSE EPRA Nareit Global Index (Net)1
|
-2.87% |
| Fund Category: Morningstar Global Real
Estate2 |
-1.96% |
| Performance Details |
pages 4-5 |
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.
1
The net version of the index reflects reinvested dividends net of withholding taxes but
reflects no deductions for expenses or other taxes.
2
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 | Semiannual
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, and Schwab Personalized Indexing™ separately managed accounts.
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. |
 |
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). |
Schwab Fundamental Global Real Estate Index Fund | Semiannual Report3
Schwab
Fundamental Global Real Estate Index Fund
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.
Average Annual Total Returns1
| Fund and Inception Date |
6 Months |
1 Year |
5 Years |
Since Inception |
| Fund: Schwab Fundamental Global Real Estate Index Fund (10/22/14) |
-4.52% |
-7.02% |
-1.98% |
2.23% |
| Russell RAFITM Global Select Real Estate Index
(Net)2 |
-4.89% |
-6.92% |
-2.37% |
1.92% |
| FTSE EPRA Nareit Global Index (Net)2
|
-2.87% |
-5.12% |
-0.97% |
1.81% |
| Fund Category: Morningstar Global Real
Estate3 |
-1.96% |
-4.34% |
0.23% |
N/A |
| Fund Expense Ratio4:
0.39% | ||||
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.
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.
1
Performance does not reflect the deduction of taxes that a shareholder would pay on fund
distributions or on the redemption of fund shares.
2
The net version of the index reflects reinvested dividends net of withholding taxes but
reflects no deductions for expenses or other taxes.
3
Source for category information: Morningstar, Inc. The Morningstar Category return
represents all active and index mutual funds and ETFs within the category as of the report date.
4
As stated in the prospectus.
4Schwab Fundamental Global
Real Estate Index Fund | Semiannual Report
Schwab Fundamental Global Real
Estate Index Fund
Performance and Fund Facts as of August 31, 2023
Statistics1
| Number of Holdings |
374 |
| Weighted Average Market Cap (millions) |
$17,144 |
| Price/Earnings Ratio (P/E) |
15.9 |
| Price/Book Ratio (P/B) |
0.8 |
| Portfolio Turnover Rate |
8% 2 |
Industry Weightings % of Investments1
Top Holdings % of Net Assets5
Country Weightings % of Investments6
Portfolio holdings may have changed since the report date.
An index is a statistical composite of a specified financial market or sector. Unlike the fund, an index does not
actually hold a portfolio of securities and its return is not inclusive of trading and management costs incurred by the fund.
Source of Industry Classification: S&P and MSCI.
1
Excludes derivatives.
2
Not annualized.
3
Includes the fund’s position(s) in money market mutual funds registered under the
Investment Company Act of 1940, as amended.
4
Represents an aggregate of industry weightings, none of which represent more than 1.0%
of investments.
5
This list is not a recommendation of any security by the investment adviser.
6
The percentage may differ from the Portfolio Holdings because the above calculation is
based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
Schwab Fundamental Global Real Estate Index Fund | Semiannual Report5
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
March 1, 2023 and held through August 31, 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 3/1/23 |
ENDING ACCOUNT
VALUE (NET OF EXPENSES)
AT 8/31/23 |
EXPENSES PAID DURING PERIOD
3/1/23-8/31/23 2 |
| Schwab Fundamental Global Real Estate Index Fund |
|
|
|
|
| Actual Return |
0.39% |
$1,000.00
|
$954.80
|
$1.92
|
| Hypothetical 5% Return |
0.39% |
$1,000.00
|
$1,023.18
|
$1.98
|
| 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 184 days in the period, and divided by 366 days in the fiscal
year. |
6Schwab Fundamental Global Real Estate Index Fund | Semiannual Report
Schwab Fundamental Global Real Estate
Index Fund
Financial Statements
FINANCIAL HIGHLIGHTS
| |
3/1/23– 8/31/23* |
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 |
$9.35 |
$11.48 |
$11.05 |
$11.06 |
$11.43 |
$11.24 |
| Income (loss) from investment operations: |
|
|
|
|
|
|
| Net investment income (loss)1
|
0.18 |
0.30 |
0.34 |
0.30 |
0.37 |
0.37 |
| Net realized and unrealized gains (losses) |
(0.60 ) |
(2.16 ) |
0.44 |
0.05 |
(0.24 ) |
0.38 |
| Total from investment operations |
(0.42 ) |
(1.86 ) |
0.78 |
0.35 |
0.13 |
0.75 |
| Less distributions: |
|
|
|
|
|
|
| Distributions from net investment income |
(0.09 ) |
(0.27 ) |
(0.35 ) |
(0.34 ) |
(0.47 ) |
(0.44 ) |
| Distributions from net realized gains |
— |
— |
— |
(0.02 ) |
(0.03 ) |
(0.12 ) |
| Total distributions |
(0.09 ) |
(0.27 ) |
(0.35 ) |
(0.36 ) |
(0.50 ) |
(0.56 ) |
| Net asset value at end of period |
$8.84 |
$9.35 |
$11.48 |
$11.05 |
$11.06 |
$11.43 |
| Total return |
(4.52
%)2 |
(16.30 %) |
7.02 % |
3.62 % |
0.91 % |
7.00 % |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: |
|
|
|
|
|
|
| Total expenses |
0.39
%3 |
0.39
%4 |
0.39 % |
0.39 % |
0.39 % |
0.39 % |
| Net investment income (loss) |
3.94
%3 |
3.01 % |
2.86 % |
3.17 % |
3.16 % |
3.32 % |
| Portfolio turnover rate |
8
%2 |
32 % |
32 % |
25 % |
16 % |
16 % |
| Net assets, end of period (x 1,000,000) |
$90 |
$104 |
$134 |
$157 |
$196 |
$190 |
| * |
Unaudited. |
| 1 |
Calculated based on the average shares outstanding during the period. |
| 2 |
Not annualized. |
| 3 |
Annualized. |
| 4 |
Ratio includes less than 0.005% of non-routine proxy expenses. |
See financial notes
Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report7
Schwab Fundamental Global Real Estate
Index Fund
Portfolio Holdings as of August 31, 2023 (Unaudited)
This section shows all the securities in the
fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to
orders@mysummaryprospectus.com.The fund also makes available its complete schedule of portfolio holdings 15 to 20
days after the end of the month on the fund’s website.
| SECURITY |
NUMBER OF SHARES |
VALUE ($) |
| COMMON
STOCKS 99.4% OF NET ASSETS |
||
| | ||
| Australia 3.6% | ||
| Charter Hall Group |
11,881 |
82,862 |
| Charter Hall Retail REIT |
20,295 |
45,666 |
| Cromwell Property Group |
116,891 |
36,607 |
| Dexus |
48,327 |
241,495 |
| Goodman Group |
32,163 |
484,608 |
| Mirvac Group |
299,653 |
467,191 |
| National Storage REIT |
11,511 |
17,227 |
| REA Group Ltd. |
798 |
85,081 |
| Region RE Ltd. |
43,004 |
59,968 |
| Scentre Group |
366,740 |
650,068 |
| Stockland |
215,487 |
588,527 |
| The GPT Group |
76,144 |
206,168 |
| Vicinity Ltd. |
238,793 |
288,044 |
| Waypoint REIT Ltd. |
27,263 |
43,990 |
| |
|
3,297,502 |
| | ||
| Belgium 0.2% | ||
| Aedifica S.A. |
645 |
43,195 |
| Cofinimmo S.A. |
1,369 |
106,661 |
| Warehouses De Pauw CVA |
2,532 |
72,356 |
| |
|
222,212 |
| | ||
| Brazil 0.2% | ||
| Cyrela Brazil Realty S.A. Empreendimentos e Participacoes |
32,681 |
148,093 |
| Multiplan Empreendimentos Imobiliarios S.A. |
10,700 |
53,456 |
| |
|
201,549 |
| | ||
| Canada 2.6% | ||
| Allied Properties Real Estate Investment Trust |
7,316 |
112,458 |
| Altus Group Ltd. |
1,458 |
56,153 |
| Artis Real Estate Investment Trust
|
13,974 |
72,393 |
| Boardwalk Real Estate Investment Trust
|
1,752 |
88,650 |
| Canadian Apartment Properties REIT
|
6,360 |
228,145 |
| Chartwell Retirement Residences |
17,714 |
134,638 |
| Choice Properties Real Estate Investment Trust |
10,148 |
98,461 |
| Colliers International Group, Inc.
|
973 |
112,415 |
| Crombie Real Estate Investment Trust
|
6,833 |
67,460 |
| Dream Industrial Real Estate Investment Trust |
5,598 |
57,132 |
| Dream Office Real Estate Investment Trust
|
6,287 |
60,348 |
| First Capital Real Estate Investment Trust
|
16,093 |
163,646 |
| FirstService Corp. |
914 |
138,216 |
| Granite Real Estate Investment Trust
|
1,284 |
71,536 |
| H&R Real Estate Investment Trust
|
28,890 |
221,080 |
| Killam Apartment Real Estate Investment Trust |
5,236 |
70,178 |
| SECURITY |
NUMBER OF SHARES |
VALUE ($) |
| NorthWest Healthcare Properties Real Estate Investment Trust |
10,883 |
55,011 |
| Primaris Real Estate Investment Trust
|
2,180 |
21,571 |
| RioCan Real Estate Investment Trust
|
22,670 |
323,977 |
| SmartCentres Real Estate Investment Trust
|
8,532 |
151,861 |
| Tricon Residential, Inc. |
7,166 |
60,777 |
| |
|
2,366,106 |
| | ||
| China 9.7% | ||
| Agile Group Holdings Ltd. *(a) |
1,587,000 |
179,822 |
| A-Living Smart City Services Co., Ltd. * |
58,750 |
37,493 |
| C&D International Investment Group Ltd.
|
22,719 |
57,736 |
| China Aoyuan Group Ltd. *(b) |
729,127 |
0 |
| China Jinmao Holdings Group Ltd. |
1,985,000 |
281,057 |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd., A Shares |
51,100 |
96,064 |
| China Overseas Grand Oceans Group Ltd.
|
312,000 |
122,237 |
| China Overseas Land & Investment Ltd.
|
650,500 |
1,371,311 |
| China Resources Land Ltd. |
322,000 |
1,360,997 |
| China SCE Group Holdings Ltd. *(a) |
1,712,000 |
88,312 |
| China South City Holdings Ltd. * |
1,416,000 |
83,792 |
| China Vanke Co., Ltd., A Shares |
152,100 |
285,225 |
| China Vanke Co., Ltd., H Shares |
451,400 |
526,567 |
| CIFI Holdings Group Co., Ltd. *(b) |
1,637,440 |
119,013 |
| Country Garden Holdings Co., Ltd. *(a) |
5,485,000 |
621,708 |
| Country Garden Services Holdings Co., Ltd.
|
82,900 |
96,317 |
| Dexin China Holdings Co., Ltd. * |
481,000 |
21,460 |
| Fantasia Holdings Group Co., Ltd. *(a) |
2,614,500 |
20,336 |
| Gemdale Corp., A Shares |
47,000 |
46,576 |
| Gemdale Properties & Investment Corp., Ltd.
|
1,480,000 |
64,120 |
| Greentown China Holdings Ltd. |
125,500 |
149,041 |
| Guangzhou R&F Properties Co., Ltd., H Shares * |
2,927,022 |
447,003 |
| Hopson Development Holdings Ltd. * |
202,018 |
123,795 |
| Jiayuan International Group Ltd. *(b) |
534,000 |
8,835 |
| KE Holdings, Inc., ADR * |
11,341 |
195,065 |
| KWG Group Holdings Ltd. *(a) |
1,086,000 |
125,813 |
| Longfor Group Holdings Ltd. |
292,000 |
616,295 |
| Midea Real Estate Holding Ltd. |
60,000 |
56,308 |
| Poly Developments and Holdings Group Co., Ltd., A Shares |
95,700 |
184,282 |
| Poly Property Group Co., Ltd |
988,000 |
229,421 |
| Red Star Macalline Group Corp. Ltd., A Shares |
31,100 |
20,361 |
| Redsun Properties Group Ltd. * |
572,000 |
16,722 |
| Ronshine China Holdings Ltd. *(a) |
1,450,000 |
31,698 |
| Seazen Group Ltd. * |
1,320,000 |
257,457 |
| Seazen Holdings Co., Ltd., A Shares * |
27,800 |
55,611 |
| Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd., A Shares |
69,700 |
95,901 |
| Shinsun Holdings Group Co., Ltd. *(b) |
1,290,000 |
21,590 |
| Sino-Ocean Group Holding Ltd. * |
2,609,000 |
121,348 |
| Times China Holdings Ltd. *(a) |
1,631,498 |
108,155 |
| Yuexiu Property Co., Ltd. |
205,359 |
254,435 |
| Yuzhou Group Holdings Co., Ltd. *(a) |
3,011,963 |
64,523 |
| Zhenro Properties Group Ltd. * |
3,223,000 |
34,156 |
See financial notes
8Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report
Schwab Fundamental Global Real Estate
Index Fund
Portfolio Holdings as of August 31, 2023 (Unaudited) (continued)
| SECURITY |
NUMBER OF SHARES |
VALUE ($) |
| Zhongliang Holdings Group Co., Ltd. * |
700,000 |
37,938 |
| |
|
8,735,896 |
| | ||
| France 2.3% | ||
| Altarea S.C.A. |
404 |
39,674 |
| Carmila S.A. |
3,692 |
57,555 |
| Covivio S.A. |
3,835 |
186,990 |
| Gecina S.A. |
2,395 |
256,207 |
| ICADE |
4,731 |
178,369 |
| Klepierre S.A. |
16,807 |
443,933 |
| Mercialys S.A. |
12,086 |
112,287 |
| Nexity S.A. |
11,219 |
186,025 |
| Unibail-Rodamco-Westfield * |
10,767 |
574,686 |
| |
|
2,035,726 |
| | ||
| Germany 2.4% | ||
| ADLER Group S.A. * |
88,642 |
49,165 |
| Aroundtown S.A. * |
96,025 |
173,127 |
| Deutsche Wohnen SE |
2,895 |
66,299 |
| DIC Asset AG |
5,323 |
25,040 |
| Grand City Properties S.A. * |
11,619 |
103,700 |
| LEG Immobilien SE * |
3,854 |
277,551 |
| TAG Immobilien AG * |
21,567 |
244,485 |
| Vonovia SE |
50,773 |
1,218,211 |
| |
|
2,157,578 |
| | ||
| Hong Kong 6.9% | ||
| CK Asset Holdings Ltd. |
201,450 |
1,111,554 |
| Fortune Real Estate Investment Trust
|
91,000 |
56,498 |
| Hang Lung Properties Ltd. |
131,000 |
174,474 |
| Henderson Land Development Co., Ltd.
|
103,866 |
285,231 |
| Hongkong Land Holdings Ltd. |
96,727 |
343,146 |
| Hysan Development Co., Ltd. |
40,500 |
84,363 |
| Kerry Properties Ltd. |
137,000 |
253,143 |
| Link REIT |
82,700 |
410,029 |
| New World Development Co., Ltd. |
324,460 |
688,951 |
| Powerlong Real Estate Holdings Ltd. * |
1,434,000 |
153,346 |
| Sino Land Co., Ltd. |
230,204 |
263,694 |
| Sun Hung Kai Properties Ltd. |
140,342 |
1,579,783 |
| Swire Properties Ltd. |
63,400 |
132,491 |
| The Wharf Holdings Ltd. |
133,000 |
281,758 |
| Wharf Real Estate Investment Co., Ltd.
|
95,400 |
397,587 |
| |
|
6,216,048 |
| | ||
| Japan 12.4% | ||
| Activia Properties, Inc. |
30 |
84,057 |
| Advance Residence Investment Corp.
|
43 |
103,532 |
| Aeon Mall Co., Ltd. |
17,200 |
206,122 |
| AEON REIT Investment Corp. |
82 |
82,976 |
| Comforia Residential REIT, Inc. |
20 |
46,780 |
| Daito Trust Construction Co., Ltd.
|
11,170 |
1,231,876 |
| Daiwa House REIT Investment Corp. |
65 |
123,348 |
| Daiwa Office Investment Corp. |
12 |
56,374 |
| Daiwa Securities Living Investments Corp.
|
66 |
50,544 |
| Frontier Real Estate Investment Corp.
|
18 |
58,182 |
| Fukuoka REIT Corp. |
46 |
51,221 |
| GLP J-REIT |
110 |
103,737 |
| Heiwa Real Estate Co., Ltd. |
2,200 |
59,015 |
| Hulic Co., Ltd. |
31,200 |
279,984 |
| Hulic REIT, Inc. |
43 |
47,966 |
| Industrial & Infrastructure Fund Investment Corp. |
58 |
58,149 |
| Invincible Investment Corp. |
170 |
70,624 |
| Japan Excellent, Inc. |
78 |
71,087 |
| SECURITY |
NUMBER OF SHARES |
VALUE ($) |
| Japan Hotel REIT Investment Corp. |
144 |
72,978 |
| Japan Logistics Fund, Inc. |
27 |
56,557 |
| Japan Metropolitan Fund Invest |
274 |
183,989 |
| Japan Prime Realty Investment Corp.
|
38 |
96,293 |
| Japan Real Estate Investment Corp.
|
52 |
216,102 |
| Kenedix Office Investment Corp. |
40 |
94,463 |
| Kenedix Residential Next Investment Corp.
|
32 |
49,660 |
| Kenedix Retail REIT Corp. |
27 |
53,448 |
| LaSalle Logiport REIT |
17 |
17,363 |
| Mirarth Holdings, Inc. |
22,700 |
72,910 |
| Mitsubishi Estate Co., Ltd. |
110,300 |
1,404,892 |
| Mitsui Fudosan Co., Ltd. |
93,600 |
2,049,195 |
| Mori Hills Reit Investment Corp. |
45 |
45,326 |
| Nippon Accommodations Fund, Inc. |
16 |
72,216 |
| Nippon Building Fund, Inc. |
56 |
236,501 |
| Nippon Kanzai Holdings Co., Ltd. |
2,500 |
45,750 |
| Nippon Prologis REIT, Inc. |
50 |
100,559 |
| NIPPON REIT Investment Corp. |
21 |
50,184 |
| Nomura Real Estate Holdings, Inc. |
15,900 |
400,099 |
| Nomura Real Estate Master Fund, Inc.
|
204 |
239,822 |
| NTT UD REIT Investment Corp. |
61 |
58,082 |
| Open House Group Co., Ltd. |
5,800 |
195,928 |
| Orix JREIT, Inc. |
108 |
134,341 |
| Relo Group, Inc. |
5,700 |
66,764 |
| SAMTY Co., Ltd. |
3,000 |
47,730 |
| Sekisui House REIT, Inc. |
130 |
75,098 |
| Starts Corp., Inc. |
5,300 |
111,219 |
| Sumitomo Realty & Development Co., Ltd.
|
39,100 |
999,526 |
| Sun Frontier Fudousan Co., Ltd. |
5,200 |
51,502 |
| Tokyo Tatemono Co., Ltd. |
22,500 |
295,390 |
| Tokyu Fudosan Holdings Corp. |
99,900 |
620,974 |
| Tokyu REIT, Inc. |
34 |
43,563 |
| United Urban Investment Corp. |
147 |
158,012 |
| |
|
11,202,010 |
| | ||
| Mexico 0.6% | ||
| Corp. Inmobiliaria Vesta S.A.B. de C.V.
|
20,100 |
74,527 |
| FIBRA Macquarie Mexico |
49,100 |
91,718 |
| Fibra Uno Administracion S.A. de C.V.
|
213,673 |
311,289 |
| PLA Administradora Industrial S. de R.L de C.V. |
49,800 |
93,464 |
| |
|
570,998 |
| | ||
| Netherlands 0.2% | ||
| Eurocommercial Properties N.V. |
3,908 |
93,894 |
| Wereldhave N.V. |
5,864 |
102,063 |
| |
|
195,957 |
| | ||
| Philippines 0.9% | ||
| ACEN Corp. |
84,210 |
7,443 |
| Ayala Corp. |
21,620 |
235,035 |
| Ayala Land, Inc. |
444,932 |
213,207 |
| GT Capital Holdings, Inc. |
17,460 |
176,453 |
| Robinsons Land Corp. |
187,300 |
48,331 |
| SM Prime Holdings, Inc. |
258,900 |
133,499 |
| |
|
813,968 |
| | ||
| Singapore 1.5% | ||
| CapitaLand Ascendas REIT |
105,588 |
216,256 |
| CapitaLand Ascott Trust |
98,680 |
70,798 |
| CapitaLand China Trust |
59,200 |
39,612 |
| CapitaLand Integrated Commercial Trust
|
117,605 |
166,128 |
| CapitaLand Investment Ltd. |
57,138 |
136,875 |
| City Developments Ltd. |
29,800 |
147,224 |
See financial
notes
Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report9
Schwab Fundamental Global Real Estate
Index Fund
Portfolio Holdings as of August 31, 2023 (Unaudited) (continued)
| SECURITY |
NUMBER OF SHARES |
VALUE ($) |
| Frasers Logistics & Commercial Trust
|
62,800 |
55,720 |
| Manulife US Real Estate Investment Trust
|
196,000 |
13,327 |
| Mapletree Industrial Trust |
48,744 |
82,895 |
| Mapletree Logistics Trust |
75,031 |
93,222 |
| Mapletree Pan Asia Commercial Trust
|
59,227 |
66,576 |
| Suntec Real Estate Investment Trust
|
71,200 |
63,724 |
| UOL Group Ltd. |
33,880 |
166,332 |
| |
|
1,318,689 |
| | ||
| South Africa 1.0% | ||
| Fortress REIT Ltd., Class A * |
120,405 |
84,733 |
| Growthpoint Properties Ltd. |
410,406 |
256,653 |
| Hyprop Investments Ltd. |
49,015 |
84,716 |
| NEPI Rockcastle N.V. |
29,611 |
177,713 |
| Redefine Properties Ltd. |
971,642 |
184,093 |
| Resilient REIT Ltd. |
27,406 |
57,511 |
| Vukile Property Fund Ltd. |
105,770 |
74,938 |
| |
|
920,357 |
| | ||
| Sweden 0.8% | ||
| Castellum AB |
17,000 |
181,211 |
| Fabege AB |
10,333 |
88,441 |
| Fastighets AB Balder, B Shares * |
19,046 |
91,033 |
| JM AB |
13,291 |
174,975 |
| Pandox AB |
5,287 |
58,712 |
| Sagax AB, B Shares |
957 |
19,903 |
| Samhallsbyggnadsbolaget i Norden AB (a) |
62,721 |
20,103 |
| Samhallsbyggnadsbolaget i Norden AB, D Shares |
434 |
137 |
| Wihlborgs Fastigheter AB |
11,790 |
90,585 |
| |
|
725,100 |
| | ||
| Switzerland 0.9% | ||
| Allreal Holding AG |
972 |
169,671 |
| Mobimo Holding AG |
363 |
106,081 |
| PSP Swiss Property AG |
1,131 |
137,411 |
| Swiss Prime Site AG |
4,424 |
424,810 |
| |
|
837,973 |
| | ||
| Taiwan 0.4% | ||
| Farglory Land Development Co., Ltd.
|
30,000 |
52,335 |
| Highwealth Construction Corp. |
84,533 |
114,045 |
| Huaku Development Co., Ltd. |
24,000 |
67,440 |
| Kindom Development Co., Ltd. |
22,000 |
22,387 |
| Ruentex Development Co., Ltd. |
58,082 |
67,100 |
| |
|
323,307 |
| | ||
| Thailand 0.8% | ||
| AP Thailand PCL NVDR |
273,461 |
99,139 |
| Central Pattana PCL NVDR |
84,000 |
164,791 |
| Digital Telecommunications Infrastructure Fund, Class F |
195,800 |
53,678 |
| Land & Houses PCL NVDR |
727,211 |
172,293 |
| Sansiri PCL NVDR |
2,237,583 |
130,265 |
| Supalai PCL NVDR |
165,482 |
102,501 |
| |
|
722,667 |
| | ||
| United Arab Emirates 1.4% | ||
| Aldar Properties PJSC |
181,747 |
260,150 |
| Emaar Development PJSC |
76,745 |
136,896 |
| SECURITY |
NUMBER OF SHARES |
VALUE ($) |
| Emaar Properties PJSC |
459,999 |
884,007 |
| |
|
1,281,053 |
| | ||
| United Kingdom 2.1% | ||
| Assura plc |
77,041 |
44,777 |
| Big Yellow Group plc |
4,401 |
59,833 |
| Derwent London plc |
4,236 |
99,594 |
| Grainger plc |
28,778 |
85,987 |
| Great Portland Estates plc |
9,956 |
52,997 |
| Hammerson plc |
301,402 |
91,712 |
| Intu Properties plc *(b) |
184,056 |
0 |
| Land Securities Group plc |
42,747 |
325,727 |
| LondonMetric Property plc |
21,154 |
48,437 |
| Primary Health Properties plc |
38,835 |
46,267 |
| Rightmove plc |
17,153 |
121,413 |
| Safestore Holdings plc |
5,880 |
64,395 |
| Savills plc |
15,133 |
174,547 |
| Segro plc |
20,981 |
195,590 |
| Sirius Real Estate Ltd. |
52,168 |
57,499 |
| The British Land Co., plc |
57,083 |
233,559 |
| The Unite Group plc |
5,350 |
63,630 |
| Tritax Big Box REIT plc |
39,436 |
70,437 |
| Workspace Group plc |
9,288 |
58,957 |
| |
|
1,895,358 |
| | ||
| United States 48.5% | ||
| Acadia Realty Trust |
6,054 |
90,144 |
| Agree Realty Corp. |
1,039 |
64,231 |
| Alexander & Baldwin, Inc. |
7,458 |
134,319 |
| Alexandria Real Estate Equities, Inc.
|
3,735 |
434,530 |
| American Assets Trust, Inc. |
3,336 |
71,424 |
| American Homes 4 Rent, Class A |
6,748 |
243,198 |
| American Tower Corp. |
9,813 |
1,779,293 |
| Americold Realty Trust, Inc. |
8,700 |
292,755 |
| Anywhere Real Estate, Inc. * |
58,321 |
382,586 |
| Apartment Income REIT Corp. |
7,023 |
239,203 |
| Apple Hospitality REIT, Inc. |
17,269 |
259,380 |
| Ashford Hospitality Trust, Inc. * |
13,113 |
38,946 |
| AvalonBay Communities, Inc. |
4,853 |
892,078 |
| Boston Properties, Inc. |
12,381 |
826,679 |
| Brandywine Realty Trust |
34,962 |
174,810 |
| Brixmor Property Group, Inc. |
18,510 |
406,850 |
| Broadstone Net Lease, Inc. |
3,378 |
54,622 |
| Camden Property Trust |
3,133 |
337,173 |
| CBRE Group, Inc., Class A * |
19,796 |
1,683,650 |
| Centerspace |
817 |
52,893 |
| Chatham Lodging Trust |
4,940 |
48,313 |
| Corporate Office Properties Trust |
7,145 |
184,913 |
| CoStar Group, Inc. * |
3,217 |
263,762 |
| Cousins Properties, Inc. |
8,591 |
201,888 |
| Crown Castle, Inc. |
13,366 |
1,343,283 |
| CubeSmart |
5,264 |
219,561 |
| Cushman & Wakefield plc * |
15,073 |
138,521 |
| DiamondRock Hospitality Co. |
19,581 |
157,823 |
| Digital Realty Trust, Inc. |
10,360 |
1,364,619 |
| DigitalBridge Group, Inc. |
29,743 |
518,123 |
| Diversified Healthcare Trust |
277,859 |
754,387 |
| Douglas Elliman, Inc. |
7,140 |
17,921 |
| Douglas Emmett, Inc. |
16,159 |
220,894 |
| Easterly Government Properties, Inc.
|
4,422 |
59,122 |
| EastGroup Properties, Inc. |
738 |
132,567 |
| Elme Communities |
6,116 |
94,064 |
| Empire State Realty Trust, Inc., Class A
|
18,444 |
161,016 |
| EPR Properties |
4,874 |
218,258 |
| Equinix, Inc. |
2,003 |
1,565,104 |
| Equity Commonwealth |
3,062 |
58,270 |
See financial
notes
10Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report
Schwab Fundamental Global Real Estate
Index Fund
Portfolio Holdings as of August 31, 2023 (Unaudited) (continued)
| SECURITY |
NUMBER OF SHARES |
VALUE ($) |
| Equity LifeStyle Properties, Inc. |
4,268 |
285,785 |
| Equity Residential |
14,736 |
955,335 |
| Essential Properties Realty Trust, Inc.
|
2,084 |
50,058 |
| Essex Property Trust, Inc. |
2,330 |
555,449 |
| eXp World Holdings, Inc. |
1,996 |
38,363 |
| Extra Space Storage, Inc. |
4,289 |
551,909 |
| Federal Realty Investment Trust |
3,078 |
301,459 |
| First Industrial Realty Trust, Inc.
|
3,031 |
157,430 |
| Four Corners Property Trust, Inc. |
2,283 |
57,440 |
| Gaming & Leisure Properties, Inc.
|
7,247 |
343,508 |
| Getty Realty Corp. |
1,425 |
42,779 |
| Global Net Lease, Inc. |
8,243 |
93,558 |
| Hannon Armstrong Sustainable Infrastructure Capital, Inc. |
709 |
15,860 |
| Healthcare Realty Trust, Inc. |
16,099 |
282,054 |
| Healthpeak Properties, Inc. |
24,406 |
502,275 |
| Highwoods Properties, Inc. |
9,573 |
228,125 |
| Host Hotels & Resorts, Inc. |
53,339 |
842,223 |
| Howard Hughes Holdings, Inc. * |
1,317 |
103,582 |
| Hudson Pacific Properties, Inc. |
25,403 |
172,994 |
| Independence Realty Trust, Inc. |
1,844 |
31,035 |
| Industrial Logistics Properties Trust
|
21,822 |
85,760 |
| InvenTrust Properties Corp. |
2,093 |
50,044 |
| Invitation Homes, Inc. |
14,144 |
482,169 |
| Iron Mountain, Inc. |
15,706 |
997,959 |
| JBG SMITH Properties |
9,326 |
146,232 |
| Jones Lang LaSalle, Inc. * |
6,583 |
1,137,542 |
| Kennedy-Wilson Holdings, Inc. |
9,093 |
145,215 |
| Kilroy Realty Corp. |
7,255 |
268,072 |
| Kimco Realty Corp. |
20,187 |
382,342 |
| Kite Realty Group Trust |
5,848 |
131,989 |
| Lamar Advertising Co., Class A |
3,875 |
353,477 |
| LTC Properties, Inc. |
1,708 |
56,125 |
| LXP Industrial Trust |
13,414 |
131,725 |
| Marcus & Millichap, Inc. |
1,826 |
60,806 |
| Medical Properties Trust, Inc. |
30,538 |
220,484 |
| Mid-America Apartment Communities, Inc.
|
3,572 |
518,762 |
| National Health Investors, Inc. |
1,897 |
96,994 |
| National Storage Affiliates Trust |
1,693 |
56,885 |
| Newmark Group, Inc., Class A |
13,120 |
93,021 |
| NNN REIT, Inc. |
5,440 |
214,282 |
| Office Properties Income Trust |
12,867 |
95,216 |
| Omega Healthcare Investors, Inc. |
11,460 |
364,657 |
| Opendoor Technologies, Inc. * |
24,044 |
93,772 |
| Outfront Media, Inc. |
13,401 |
152,101 |
| Paramount Group, Inc. |
34,725 |
178,487 |
| Park Hotels & Resorts, Inc. |
37,480 |
480,868 |
| Pebblebrook Hotel Trust |
9,593 |
138,811 |
| Phillips Edison & Co., Inc. |
2,210 |
74,831 |
| Physicians Realty Trust |
10,221 |
142,174 |
| Piedmont Office Realty Trust, Inc., Class A
|
22,428 |
154,080 |
| Prologis, Inc. |
12,177 |
1,512,383 |
| Public Storage |
3,008 |
831,351 |
| Realty Income Corp. |
8,504 |
476,564 |
| Regency Centers Corp. |
6,398 |
397,956 |
| Retail Opportunity Investments Corp.
|
6,446 |
86,763 |
| Rexford Industrial Realty, Inc. |
1,683 |
89,990 |
| RLJ Lodging Trust |
21,869 |
218,471 |
| RPT Realty |
7,521 |
85,288 |
| Ryman Hospitality Properties, Inc.
|
1,798 |
152,884 |
| Sabra Health Care REIT, Inc. |
16,795 |
210,441 |
| SBA Communications Corp. |
1,217 |
273,253 |
| Service Properties Trust |
52,702 |
435,319 |
| Simon Property Group, Inc. |
15,869 |
1,800,973 |
| SITE Centers Corp. |
14,083 |
188,008 |
| SL Green Realty Corp. |
12,354 |
485,018 |
| Spirit Realty Capital, Inc. |
4,306 |
166,255 |
| STAG Industrial, Inc. |
4,583 |
167,417 |
| SECURITY |
NUMBER OF SHARES |
VALUE ($) |
| Summit Hotel Properties, Inc. |
11,229 |
65,240 |
| Sun Communities, Inc. |
2,738 |
335,186 |
| Sunstone Hotel Investors, Inc. |
18,081 |
162,367 |
| Tanger Factory Outlet Centers, Inc.
|
7,981 |
185,558 |
| Terreno Realty Corp. |
1,080 |
65,761 |
| The GEO Group, Inc. * |
32,233 |
233,367 |
| The Macerich Co. |
29,233 |
341,734 |
| The Necessity Retail REIT, Inc. |
9,581 |
71,858 |
| The RMR Group, Inc., Class A |
911 |
23,030 |
| UDR, Inc. |
9,369 |
373,823 |
| Uniti Group, Inc. |
45,142 |
242,413 |
| Urban Edge Properties |
8,247 |
134,921 |
| Ventas, Inc. |
28,570 |
1,247,938 |
| Veris Residential, Inc. * |
6,704 |
124,761 |
| VICI Properties, Inc. |
10,239 |
315,771 |
| Vornado Realty Trust |
27,126 |
651,567 |
| Welltower, Inc. |
21,114 |
1,749,928 |
| WP Carey, Inc. |
5,096 |
331,495 |
| Xenia Hotels & Resorts, Inc. |
12,182 |
143,748 |
| Zillow Group, Inc., Class A * |
965 |
49,138 |
| Zillow Group, Inc., Class C * |
2,851 |
148,708 |
| |
|
43,873,922 |
| Total Common Stocks
(Cost $88,352,436) |
89,913,976 | |
| | ||
| INVESTMENT COMPANIES 0.0% OF NET ASSETS | ||
| | ||
| United States 0.0% | ||
| iShares Core US REIT ETF |
944 |
48,361 |
| Total Investment Companies
(Cost $48,462) |
48,361 |
|
| |
|
|
| SHORT-TERM INVESTMENTS 1.4% OF NET ASSETS | ||
| | ||
| Money Market Funds 1.4% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 5.28% (c)(d) |
1,273,553 |
1,273,553 |
| Total Short-Term Investments
(Cost $1,273,553) |
1,273,553 | |
| Total Investments in Securities
(Cost $89,674,451) |
91,235,890 | |
See financial
notes
Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report11
Schwab Fundamental Global Real Estate
Index Fund
Portfolio Holdings as of August 31, 2023 (Unaudited) (continued)
| |
NUMBER OF CONTRACTS |
NOTIONAL AMOUNT
($) |
CURRENT VALUE/ UNREALIZED
APPRECIATION (DEPRECIATION) ($) |
| FUTURES CONTRACTS | |||
| Long |
|
|
|
| Dow Jones U.S. Real Estate Index, expires 09/15/23 |
3 |
98,580 |
894 |
| MSCI EAFE Index, expires 09/15/23 |
3 |
316,395 |
(8,382 ) |
| MSCI Emerging Markets Index, expires 09/15/23 |
2 |
97,930 |
487 |
| |
|
|
(7,001 ) |
| * |
Non-income producing security. |
| (a) |
All or a portion of this security is on loan. Securities on loan were valued at $1,063,880. |
| (b) |
Fair valued using significant unobservable inputs (see financial note 2(a), Securities for which no quoted value is available, for additional information). |
| (c) |
The rate shown is the annualized 7-day yield. |
| (d) |
Security purchased with cash collateral received for securities on loan. |
| ADR — |
American Depositary Receipt |
| CVA — |
Dutch Certificate |
| ETF — |
Exchange-traded fund |
| NVDR — |
Non-Voting Depositary Receipt |
| REIT — |
Real Estate Investment Trust |
See financial notes
12Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report
Schwab Fundamental Global Real Estate
Index Fund
Portfolio Holdings as of August 31, 2023 (Unaudited) (continued)
The following is a summary of the inputs used to
value the fund’s investments as of August 31, 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
|
$47,012,575 |
$— |
$— |
$47,012,575
|
| Australia |
— |
3,297,502 |
— |
3,297,502 |
| Belgium |
— |
222,212 |
— |
222,212 |
| China |
279,924 |
8,306,534 |
149,438 * |
8,735,896 |
| France |
— |
2,035,726 |
— |
2,035,726 |
| Germany |
49,165 |
2,108,413 |
— |
2,157,578 |
| Hong Kong |
— |
6,216,048 |
— |
6,216,048 |
| Japan |
— |
11,202,010 |
— |
11,202,010 |
| Netherlands |
— |
195,957 |
— |
195,957 |
| Philippines |
— |
813,968 |
— |
813,968 |
| Singapore |
— |
1,318,689 |
— |
1,318,689 |
| South Africa |
736,264 |
184,093 |
— |
920,357 |
| Sweden |
137 |
724,963 |
— |
725,100 |
| Switzerland |
— |
837,973 |
— |
837,973 |
| Taiwan |
— |
323,307 |
— |
323,307 |
| Thailand |
53,678 |
668,989 |
— |
722,667 |
| United Arab Emirates |
— |
1,281,053 |
— |
1,281,053 |
| United Kingdom |
428,428 |
1,466,930 |
0 * |
1,895,358 |
| Investment Companies1
|
48,361 |
— |
— |
48,361 |
| Short-Term Investments1
|
1,273,553 |
— |
— |
1,273,553 |
| Futures Contracts2
|
1,381 |
— |
— |
1,381 |
| Liabilities |
|
|
|
|
| Futures Contracts2
|
(8,382 ) |
— |
— |
(8,382 ) |
| Total |
$49,875,084 |
$41,204,367 |
$149,438 |
$91,228,889 |
| * |
Level 3 amount shown includes securities determined to have no value at August 31, 2023. |
| 1 |
As categorized in the Portfolio Holdings.
|
| 2 |
Futures contracts are reported at cumulative unrealized appreciation or depreciation. |
Fund investments in mutual funds and ETFs are classified as Level 1, without consideration to the classification level of
the
underlying securities held by the mutual funds and ETFs, which could be Level 1, Level 2 or Level 3.
See financial notes
Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report13
Schwab Fundamental Global Real Estate
Index Fund
Statement of Assets and Liabilities
As of August 31, 2023; unaudited
| Assets | ||
| Investments in securities, at value - unaffiliated (cost $89,674,451) including securities on loan of $1,063,880 |
|
$91,235,890
|
| Cash |
|
31,394 |
| Foreign currency, at value (cost $185,549) |
|
185,145 |
| Deposit with broker for futures contracts |
|
24,642 |
| Receivables: |
|
|
| Dividends |
|
161,027 |
| Investments sold |
|
154,789 |
| Foreign tax reclaims |
|
64,340 |
| Fund shares sold |
|
39,021 |
| Income from securities on loan |
|
21,628 |
| Prepaid expenses |
+ |
16,150 |
| Total assets |
|
91,934,026 |
| | ||
| Liabilities | ||
| Collateral held for securities on loan |
|
1,273,553 |
| Payables: |
|
|
| Fund shares redeemed |
|
121,821 |
| Investments bought |
|
30,483 |
| Investment adviser fees |
|
29,893 |
| Variation margin on futures contracts |
+ |
3,678 |
| Total liabilities |
|
1,459,428 |
| Net assets |
|
$90,474,598 |
| | ||
| Net Assets by Source | ||
| Capital received from investors |
|
$116,748,487
|
| Total distributable loss |
+ |
(26,273,889
) |
| Net assets |
|
$90,474,598 |
| Net Asset Value (NAV)
| ||||
| Net Assets
|
÷ |
Shares Outstanding |
= |
NAV |
| $90,474,598 |
|
10,234,337 |
|
$8.84 |
| |
|
|
|
|
| |
|
|
|
|
See financial
notes
14Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report
Schwab Fundamental Global Real Estate
Index Fund
Statement of Operations
| For the period March 1, 2023 through August 31, 2023; unaudited | ||
| Investment Income | ||
| Dividends received from securities - unaffiliated (net of foreign withholding tax of $108,964) |
|
$2,011,398
|
| Securities on loan, net |
+ |
48,915 |
| Total investment income
|
|
2,060,313 |
| | ||
| Expenses | ||
| Investment adviser fees |
|
185,730 |
| Total expenses |
– |
185,730 |
| Net investment income |
|
1,874,583 |
| | ||
| REALIZED AND UNREALIZED GAINS (LOSSES) | ||
| Net realized losses on sales of securities - unaffiliated |
|
(2,908,293 ) |
| Net realized losses on futures contracts |
|
(19,532 ) |
| Net realized losses on foreign currency transactions |
+ |
(2,000 ) |
| Net realized losses |
|
(2,929,825 ) |
| Net change in unrealized appreciation (depreciation) on securities - unaffiliated |
|
(3,707,559 ) |
| Net change in unrealized appreciation (depreciation) on futures contracts |
|
6,928 |
| Net change in unrealized appreciation (depreciation) on foreign currency translations |
+ |
5,280 |
| Net change in unrealized appreciation (depreciation) |
+ |
(3,695,351
) |
| Net realized and unrealized losses |
|
(6,625,176 ) |
| Decrease in net assets resulting from operations |
|
($4,750,593 ) |
See financial
notes
Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report15
Schwab Fundamental Global Real Estate
Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for
the current period are unaudited
| OPERATIONS | |||
| |
3/1/23-8/31/23 |
3/1/22-2/28/23 | |
| Net investment income |
|
$1,874,583 |
$3,574,007
|
| Net realized losses |
|
(2,929,825 ) |
(6,071,023 ) |
| Net change in unrealized appreciation (depreciation) |
+ |
(3,695,351 ) |
(20,074,678 ) |
| Decrease in net assets from operations |
|
($4,750,593
) |
($22,571,694 ) |
| | |||
| DISTRIBUTIONS TO SHAREHOLDERS | |||
| Total distributions |
|
($929,760
) |
($3,154,839 ) |
| TRANSACTIONS IN FUND SHARES | |||||
| |
3/1/23-8/31/23 |
3/1/22-2/28/23 | |||
| |
|
SHARES |
VALUE |
SHARES |
VALUE |
| Shares sold |
|
770,533 |
$6,827,177 |
3,601,848 |
$35,951,779
|
| Shares reinvested |
|
73,210 |
649,965 |
224,488 |
2,169,157 |
| Shares redeemed |
+ |
(1,756,785 ) |
(15,593,905 ) |
(4,360,523 ) |
(42,173,011 ) |
| Net transactions in fund shares |
|
(913,042
) |
($8,116,763
) |
(534,187
) |
($4,052,075 ) |
| | |||||
| SHARES OUTSTANDING AND NET ASSETS | |||||
| |
3/1/23-8/31/23 |
3/1/22-2/28/23 | |||
| |
|
SHARES |
NET ASSETS |
SHARES |
NET ASSETS |
| Beginning of period |
|
11,147,379 |
$104,271,714 |
11,681,566 |
$134,050,322
|
| Total decrease |
+ |
(913,042 ) |
(13,797,116 ) |
(534,187 ) |
(29,778,608 ) |
| End of period |
|
10,234,337 |
$90,474,598 |
11,147,379 |
$104,271,714 |
See financial notes
16Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report
Schwab Fundamental Global Real Estate
Index Fund
Financial Notes, unaudited
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.
Schwab Fundamental Global Real Estate Index
Fund | Semiannual Report17
Schwab Fundamental Global Real Estate
Index Fund
Financial Notes, unaudited (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.
• 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.
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.
18Schwab Fundamental Global Real Estate
Index Fund | Semiannual Report
Schwab Fundamental Global Real Estate
Index Fund
Financial Notes, unaudited (continued)
2. Significant Accounting
Policies (continued):
• 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 August 31, 2023, are disclosed in the fund’s 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
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 August 31, 2023, the fund had securities on loan, all of which were classified as common stocks. The value of the securities on loan and the related collateral as of August 31, 2023, are disclosed in the fund’s Portfolio Holdings and Statement of Assets and Liabilities.
Schwab Fundamental Global Real Estate Index
Fund | Semiannual Report19
Schwab Fundamental Global Real Estate
Index Fund
Financial Notes, unaudited (continued)
2. Significant Accounting
Policies (continued):
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.
(c) Security Transactions:
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 fund’s Statement of Operations, if any. 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 ,if any.
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.
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.
20Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report
Schwab Fundamental Global Real Estate
Index Fund
Financial Notes, unaudited (continued)
2. Significant Accounting
Policies (continued):
(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 fund’s Statement of Operations, if any. Foreign taxes accrued as of August 31, 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.
(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.
Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report21
Schwab Fundamental Global Real Estate
Index Fund
Financial Notes, unaudited (continued)
3. Risk
Factors (continued):
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 (or income generated by) 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. The value of a REIT may be affected by changes in interest rates.
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
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Financial Notes, unaudited (continued)
3. Risk
Factors (continued):
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 recordkeeping 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 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. The fund’s use of derivatives also could create a risk of counterparty default under certain transactions, risks that the fund would need to liquidate portfolio positions when it may not be advantageous to do so in order to meet margin and payment obligations, and legal risks relating to insufficient documentation,
insufficient capacity or authority of a counterparty, or legality or enforceability of a contract.
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.
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Financial Notes, unaudited (continued)
3. Risk
Factors (continued):
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 August 31, 2023, the fund’s purchases and sales of securities with other funds in the Fund Complex was $784,540 and $1,017,160 respectively and includes realized gains of $4,225.
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 trustees or non-interested trustees (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.
6. Borrowing from Banks:
During the period, the fund was a participant with other funds in the Fund Complex in a joint, syndicated, committed $1
billion line of credit (the Syndicated Credit Facility), 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, 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 by the fund from either line of credit during the period.
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Financial Notes, unaudited (continued)
6. Borrowing from
Banks (continued):
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 August 31, 2023, are presented in the fund’s 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 fund’s 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 August 31, 2023, the month-end average notional amounts of
futures contracts held by the fund was $499,549 and the month-end average number of contracts held was 9.
8. Purchases and Sales of Investment Securities:
For the period ended August 31, 2023, purchases and sales of securities (excluding short-term obligations) were as
follows:
| PURCHASES
OF SECURITIES |
SALES
OF SECURITIES |
| $7,191,959 |
$14,256,463 |
9. Federal Income Taxes:
As of August 31, 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) |
| |
$102,968,577 |
$3,166,952 |
($14,906,640 ) |
($11,739,688 ) |
| |
|
|
|
|
| |
|
|
|
|
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 and components of distributable
earnings on a tax basis are finalized at fiscal year-end; accordingly, tax basis balances have not been determined as of August 31, 2023. The tax basis components of
distributions paid during the fiscal year ended February 28, 2023 were as follows:
| |
PRIOR FISCAL YEAR END DISTRIBUTIONS |
| |
ORDINARY
INCOME
|
| |
$3,154,839 |
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 in the financial statements. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
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 fund’s Statement of Operations. During the fiscal year ended February 28, 2023, the fund did not incur any interest or penalties.
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Financial Notes, unaudited (continued)
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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Investment Advisory Agreement Approval
The Investment Company Act of 1940, as amended (the
1940 Act), requires that the continuation of a fund’s investment advisory agreement must be specifically
approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a
majority of the trustees who are not parties to the investment advisory agreement or “interested
persons” of any party thereto (the Independent Trustees), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the
investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms
of the investment advisory agreement.
The
Board of Trustees (the Board or the Trustees, as appropriate) calls and holds one or more meetings each year that
are dedicated, in whole or in part, to considering whether to renew the investment advisory and administration
agreement (the Agreement) between Schwab Capital Trust (the Trust) and Charles Schwab Investment Management, Inc.
(CSIM) (dba Schwab Asset Management) (the investment adviser) with respect to the existing funds in the Trust,
including Schwab Fundamental Global Real Estate Index Fund (the Fund), and to review certain other agreements
pursuant to which the investment adviser provides investment advisory services to certain other registered
investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of
materials provided by the investment adviser, including information about the investment adviser’s affiliates, personnel, business goals and priorities, profitability, third-party oversight, corporate structure and operations. As part of the renewal process, the Independent Trustees’ legal counsel, on behalf of the Independent Trustees, sends an
information request letter to the investment adviser seeking certain relevant information. The responses by the
investment adviser are provided to the Trustees in the Board materials for their review prior to their meeting,
and the Trustees are provided with the opportunity to request any additional materials. The Board also receives
data provided by an independent provider of investment company data. This information is in addition to the
detailed information about the Fund that the Board reviews during the course of each year, including information
that relates to the Fund’s operations and performance, legal and compliance matters, risk management,
portfolio turnover, and sales and marketing activity. In considering the renewal, the Independent Trustees
receive advice from Independent Trustees’ legal counsel, including a memorandum regarding the
responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent
Trustees participate in question and answer sessions with representatives of the investment adviser and meet in
executive session outside the presence of Fund management.
The Board, including a majority of the Independent Trustees, considered
information specifically relating to the continuance of the Agreement with respect to the Fund at meetings held on
April 27, 2023 and June 6, 2023, and approved the renewal of the Agreement with respect to the Fund for an
additional one-year term at the meeting on June 6, 2023 called for the purpose of voting on such
approval.
The Board’s approval of the continuance of the Agreement with respect to the Fund was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1.
the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of the investment adviser and its affiliates dedicated to the Fund;
2.
the Fund’s
investment performance and how it compared to that of certain other comparable mutual funds and benchmark
data;
3.
the Fund’s expenses
and how those expenses compared to those of certain other similar mutual funds;
4.
the profitability of the investment adviser and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to the Fund, including both direct and indirect benefits accruing to the investment adviser and its affiliates; and
5.
the extent to which
economies of scale would be realized as the Fund grows and whether fee levels in the Agreement reflect those
economies of scale for the benefit of Fund investors.
Nature, Extent and Quality of Services.
The Board considered the nature, extent and quality of the services provided by the investment adviser to the Fund and the resources of the investment adviser and its affiliates dedicated to the Fund. In
this regard, the Trustees evaluated, among other things, the investment adviser’s experience, track record,
compliance program, resources dedicated to hiring and retaining skilled personnel and specialized talent, and
information security resources. The Trustees also considered information provided by the investment adviser
relating to services and support provided with respect to the Fund’s portfolio management team, portfolio
strategy, and internal investment guidelines, as well as trading infrastructure, liquidity management, product
design and analysis, shareholder communications, securities valuation, and vendor and risk oversight. The
Trustees also considered investments the investment adviser has made in its infrastructure, including modernizing
the investment adviser’s technology and use of data, increasing expertise in key areas (including portfolio
management and trade operations), and improving business continuity, cybersecurity, due diligence, risk
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management processes, and information security programs, which are designed to provide enhanced services to the Fund and its shareholders. The Trustees considered Schwab’s overall financial condition and its reputation as a full service
brokerage firm, as well as the wide range of products, services and account features that benefit Fund
shareholders who are brokerage clients of Schwab. Following such evaluation, the Board concluded, within the
context of its full deliberations, that the nature, extent and quality of services provided by the investment
adviser to the Fund and the resources of the investment adviser and its affiliates dedicated to the Fund
supported renewal of the Agreement with respect to the Fund.
Fund Performance. The Board considered the Fund’s performance in determining whether to renew the Agreement with respect to the Fund. Specifically, the Trustees considered
the Fund’s performance relative to a peer category of other mutual funds and applicable indices/benchmarks,
in light of total return and the market environment, as well as in consideration of the Fund’s investment
style and strategy. As part of this review, the Trustees considered the composition of the peer category,
selection criteria and the reputation of the independent provider of investment company data who prepared the
peer category analysis. In evaluating the performance of the Fund, the Trustees considered the risk profile for
the Fund and the Fund’s demonstrated performance in tracking its benchmark index. The Trustees further
considered the level of Fund performance in the context of their review of Fund expenses and the investment
adviser’s profitability discussed below and also noted that the Board and a designated committee of the
Board review performance throughout the year. Although the Fund had performance that ranked in the fourth
quartile of a relevant peer group for more than one performance period considered, the Board concluded that other
factors relevant to performance supported renewal of the Agreement with respect to the Fund including that the
underperformance was attributable, to a significant extent, to investment decisions by the investment adviser
that were reasonable and consistent with the Fund’s investment objective and policies and that it had taken
steps designed to help improve performance. Following such evaluation, the Board concluded, within the context of
its full deliberations, that the performance of the Fund supported renewal of the Agreement with respect to the
Fund.
Fund Expenses.
With respect to the Fund’s expenses, the Trustees considered the rate of compensation called for by the
Agreement and the Fund’s operating expense ratio, in each case, in comparison to those of other similar
mutual funds, such peer groups and comparisons having been selected and calculated by an independent provider of
investment company data. The investment adviser reported to the Board, and the Board took into account, the risk
assumed by the investment adviser in the development of the Fund and provision of services as well as the
competitive marketplace for financial products. The Trustees also considered fees charged by the investment
adviser to other mutual funds and exchange traded
funds that it manages. The Board evaluated the Fund’s unitary fee through review of comparative information with respect
to fees paid by other similar funds tracking Fundamental indices. Following such evaluation, the Board concluded,
within the context of its full deliberations, that the expenses of the Fund are reasonable and supported renewal
of the Agreement with respect to the Fund.
Profitability. The Trustees considered the compensation flowing to the investment adviser and its affiliates, directly or indirectly and reviewed profitability on a pre-tax basis,
without regard to distribution expenses. The Trustees reviewed profitability of the investment adviser relating
to the Schwab fund complex as a whole, noting the benefits to Fund shareholders of being part of the Schwab fund
complex, including the allocations of certain costs across the Fund and other funds in the complex. The Trustees
also considered any other benefits derived by the investment adviser from its relationship with the Fund, such as
whether, by virtue of its management of the Fund, the investment adviser obtains investment information or other
research resources that aid it in providing advisory services to other clients. The Trustees considered whether
the compensation and profitability with respect to the Fund under the Agreement and other service agreements were
reasonable in light of the quality of all services rendered to the Fund by the investment adviser and its
affiliates. The Trustees noted that the investment adviser continues to invest substantial sums in its business in order to provide enhanced research capabilities, services and systems to benefit the Fund. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of the investment adviser is reasonable and
supported renewal of the Agreement with respect to the Fund.
Economies of Scale. Although the Trustees recognized the difficulty of determining economies of scale with precision, and although the Fund does not have breakpoints in its advisory
fee, the Trustees considered the potential existence of any economies of scale by way of the relatively low
advisory fee and unitary fee structure of the Fund and whether those are passed along to the Fund’s
shareholders through (i) the enhancement of services provided to the Fund in return for fees paid, including
through investments by the investment adviser in its infrastructure, including modernizing the investment
adviser’s technology and use of data, increasing expertise and capabilities in key areas (including portfolio and trade operations), and improving business continuity, cybersecurity, due diligence, and information security programs, which are designed to provide enhanced services to the Fund and its shareholders; and (ii) pricing a fund to scale
and keeping overall expenses down as the fund grows. The Trustees acknowledged that the investment adviser
invested in its infrastructure, as discussed above, over time and that the investment adviser’s internal
costs of providing investment management, technology, administrative, legal and compliance services to the Fund
continue to increase as a result of regulatory or other developments. Based on this evaluation,
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the Board concluded, within the context of its full deliberations, that the Fund obtains reasonable benefits from economies of scale.
* * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * *
In the course of their deliberations, the Trustees may have
accorded different weights to various factors and did not identify any particular information or factor that was
all important or controlling. Based on the Trustees’ deliberation
and their evaluation of the information described above, the Board,
including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Fund and
concluded that the compensation under the Agreement with respect to the Fund is fair and reasonable in light of
the services provided and the related expenses borne by the investment adviser and its affiliates and such other
matters as the Trustees considered to be relevant in the exercise of their reasonable judgment.
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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 106 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). |
106 |
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. |
106 |
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. |
106 |
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. |
106 |
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). |
106 |
None |
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| 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). |
106 |
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). |
106 |
None |
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| 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. |
106 |
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. |
106 |
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 |
| Omar Aguilar 1970
Chief Executive Officer 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.; Chief Executive Officer (Sept. 2023
– present), Chief Investment Officer (June 2011 – present) and Vice
President (June 2011 – Sept. 2023), Schwab Funds, Laudus Trust and Schwab
ETFs. |
| Jonathan de St. Paer 1973
President (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.; President (Nov. 2018 – present), Chief Executive
Officer (Apr. 2019 – Sept. 2023) 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; Managing Director
(Mar. 2023 – present), Chief Financial Officer (Mar. 2020 – present) and
Vice President (Oct. 2013 – Mar. 2023), Charles Schwab Investment Management,
Inc. |
32Schwab Fundamental Global Real Estate
Index Fund | Semiannual Report
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 |
| 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; Managing Director
(Mar. 2023 – present), Vice President (Mar. 2022 – Mar. 2023) and Director
(Oct. 2015 – Mar. 2022), Charles Schwab Investment Management,
Inc. |
| 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) |
Managing Director (Mar. 2023 – present), Chief Investment Officer (Apr. 2011 – present) and
Senior Vice President (Apr. 2011 – Mar. 2023) 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) |
Managing Director (Mar. 2023 – present), Chief Investment Officer (Jan. 2020 – present) and
Senior Vice President (Jan. 2020 – Mar. 2023) 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) |
Managing Director (Mar. 2023 – present), Chief Legal Officer (Mar. 2022 – present) and Vice
President (Sept. 2005 – Mar. 2023), 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. |
1
Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first.
2
Mr. Bettinger and Mr. 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.
3
The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board.
Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report33
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.
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.
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.
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.
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.
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.
34Schwab Fundamental Global Real Estate Index Fund | Semiannual
Report
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
© 2023 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
Member SIPC®
Printed on recycled paper.
¹
State, local, and the Federal Alternative Minimum Tax may apply.
Capital gains are not exempt from Federal Taxation.
²
You could lose money by investing in the Schwab Money Funds. All
Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot
guarantee they will do so. Because the share price of Schwab Variable Share Price Money Fund will fluctuate, when you sell your shares they may be worth
more or less than what you originally paid for them. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares if the Fund’s Board determines that the fee is in the best interests of the Fund. An investment in the Schwab Money Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Schwab Money Funds’ sponsor has no legal obligation to provide financial support to the Funds, and you should not expect that the sponsor will provide financial support to the Funds at any time.
Item 2: Code of Ethics.
Not applicable to this semi-annual report.
Item 3: Audit Committee Financial Expert.
Not applicable to this semi-annual report.
Item 4: Principal Accountant Fees and Services.
Not applicable to this semi-annual report.
Item 5: Audit Committee of Listed Registrants.
Not applicable to this semi-annual report.
Item 6: Schedule of Investments.
The schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11: Controls and Procedures.
| (a) | Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Chief Executive Officer, Omar Aguilar and Registrant’s Chief Financial Officer, Dana Smith, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. |
| (b) | During the period covered by this report, there have been no changes in Registrant’s internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrant’s internal control over financial reporting. |
Item 12: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13: Exhibits.
| (a) | (1) Code of ethics – not applicable to this semi-annual report. |
| (2) |
| (b) |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Capital Trust – Schwab Fundamental Global Real Estate Index Fund
| By: | /s/ Omar Aguilar | |
| Omar Aguilar Chief Executive Officer | ||
| Date: | October 17, 2023 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: |
/s/ Omar Aguilar | |
| Omar Aguilar Chief Executive Officer | ||
| Date: |
October 17, 2023 | |
| By: | /s/ Dana Smith | |
| Dana Smith Chief Financial Officer | ||
| Date: | October 17, 2023 | |