0001752724-19-001731.txt : 20190114 0001752724-19-001731.hdr.sgml : 20190114 20190114161533 ACCESSION NUMBER: 0001752724-19-001731 CONFORMED SUBMISSION TYPE: N-CEN PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20181031 FILED AS OF DATE: 20190114 DATE AS OF CHANGE: 20190114 EFFECTIVENESS DATE: 20190114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHWAB CAPITAL TRUST CENTRAL INDEX KEY: 0000904333 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CEN SEC ACT: 1940 Act SEC FILE NUMBER: 811-07704 FILM NUMBER: 19525211 BUSINESS ADDRESS: STREET 1: 211 MAIN STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 1-415-667-7000 MAIL ADDRESS: STREET 1: 211 MAIN STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 0000904333 S000005513 Schwab Large-Cap Growth Fund 0000904333 S000005514 Schwab Core Equity Fund 0000904333 S000005515 Schwab Dividend Equity Fund 0000904333 S000005516 Schwab Small-Cap Equity Fund 0000904333 S000005517 Schwab Hedged Equity Fund 0000904333 S000005519 Schwab Health Care Fund 0000904333 S000005521 Schwab Target 2010 Fund 0000904333 S000005522 Schwab Target 2020 Fund 0000904333 S000005523 Schwab Target 2030 Fund 0000904333 S000005524 Schwab Target 2040 Fund 0000904333 S000005911 Schwab S&P 500 Index Fund 0000904333 S000005912 Schwab Small-Cap Index Fund 0000904333 S000005913 Schwab Total Stock Market Index Fund 0000904333 S000005914 Schwab International Index Fund 0000904333 S000005916 Schwab MarketTrack All Equity Portfolio 0000904333 S000005917 Schwab MarketTrack Growth Portfolio 0000904333 S000005918 Schwab MarketTrack Balanced Portfolio 0000904333 S000005919 Schwab MarketTrack Conservative Portfolio 0000904333 S000006549 Schwab Balanced Fund 0000904333 S000006550 Laudus Small-Cap MarketMasters Fund 0000904333 S000006551 Laudus International MarketMasters Fund 0000904333 S000016766 Schwab Fundamental US Large Company Index Fund 0000904333 S000016767 Schwab Fundamental US Small Company Index Fund 0000904333 S000016768 Schwab Fundamental International Large Company Index Fund 0000904333 S000019900 Schwab Fundamental Emerging Markets Large Company Index Fund 0000904333 S000019901 Schwab Fundamental International Small Company Index Fund 0000904333 S000020935 Schwab Target 2015 Fund 0000904333 S000020936 Schwab Target 2025 Fund 0000904333 S000020937 Schwab Target 2035 Fund 0000904333 S000022039 Schwab International Core Equity Fund 0000904333 S000039605 Schwab Target 2045 Fund 0000904333 S000039606 Schwab Target 2050 Fund 0000904333 S000039607 Schwab Target 2055 Fund 0000904333 S000054918 Schwab Target 2060 Fund 0000904333 S000059731 Schwab U.S. Large-Cap Growth Index Fund 0000904333 S000059732 Schwab U.S. Large-Cap Value Index Fund 0000904333 S000059733 Schwab U.S. Mid-Cap Index Fund N-CEN 1 primary_doc.xml X0101 N-CEN LIVE 0000904333 XXXXXXXX 811-07704 false false false N-1A S000005514 true S000054918 true S000006551 true S000020935 true S000020937 true S000005522 true S000059733 true S000019900 true S000019901 true S000005913 true S000005912 true S000005524 true S000005523 true S000005916 true S000016767 true S000020936 true S000005918 true S000016766 true S000005513 true S000005521 true S000059731 true S000039607 true S000016768 true S000005515 true S000005911 true S000039605 true S000005919 true S000039606 true S000059732 true S000005517 true S000006550 true S000006549 true S000005917 true S000005519 true S000022039 true S000005516 true S000005914 true SCHWAB CAPITAL TRUST 811-07704 0000904333 549300PEK1H7N1HLC797 211 MAIN STREET SAN FRANCISCO 94105 US-CA US 800-648-5300 BNY Mellon Asset Management North America Corporation One Boston Place Boston 02108 617-722-7250 Sub-Adviser Records Charles Schwab Investment Management, Inc. 211 Main Street San Francisco 94105 800-648-5300 Investment Adviser and Fund Administrator Records Wellington Management Company, LLP 280 Congress Street Boston 02210 617-951-5000 Sub-Adviser Records American Century Investment Management, Inc. 4500 Main Street Kansas City 64111-7709 816-531-5575 Sub-Adviser Records DST Asset Manager Solutions, Inc. 2000 Crown Colony Drive Quincy 02169 800-407-0256 Transfer Agent Records Harris Associates L.P. 111 South Wacker Drive Chicago 60606 312-646-3600 Sub-Adviser Records State Street Bank and Trust Company One Lincoln Street Boston 02111 617-786-3000 Custodian and Fund Accountant Records Mondrian Investment Partners Limited 10 Gresham Street London GB EC2V 7JD 44-20-7477-7000 Sub-Adviser Records Charles Schwab & Co., Inc. 211 Main Street San Francisco 94105 800-648-5300 Principal Underwriter Records Brown Brothers Harriman & Co. 50 Post Office Square Boston 02110 617-772-1818 Custodian Records Voya Investment Management Co. 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N/A 000000000 00000000000000000000 SG 0.00000000 Charles Schwab, U.K., Limited N/A 000000000 549300PF2KTM8A12FH91 GB 0.00000000 Virtu Americas LLC 8-68193 000149823 549300RA02N3BNSWBV74 189.38000000 189.38000000 BNP Paribas N/A 000000000 R0MUWSFPU8MPRO8K5P83 FR 6093596.28000000 Citibank, National Association N/A 000000000 E57ODZWZ7FF32TWEFA76 1016917.97000000 Charles Schwab & Co., Inc. 8-16514 000005393 549300ZP8XN77GK5BS04 9258773.03000000 Deutsche Bank Aktiengesellschaft N/A 000000000 7LTWFZYICNSX8D621K86 DE 342345.27000000 Wells Fargo Bank, National Association N/A 000000000 KB1H1DSPRFMYMCUFXT09 112429.42000000 Sumitomo Mitsui Banking Corporation N/A 000000000 5U0XI89JRFVHWIBS4F54 JP 8253082.06000000 JPMorgan Chase Bank, National Association N/A 000000000 7H6GLXDRUGQFU57RNE97 588997.72000000 Barclays Bank PLC N/A 000000000 G5GSEF7VJP5I7OUK5573 GB 3181735.36000000 Brown Brothers Harriman & Co. N/A 000111231 5493006KMX1VFTPYPW14 554007.79000000 Australia and New Zealand Banking Group Limited N/A 000000000 JHE42UYNWWTJB8YTTU19 AU 116963.57000000 29640808.53000000 N 9297238.92000000 N true ADVISORY CONTRACTS 2 NCEN_4553097229338629.txt The following document was filed with the Securities and Exchange Commission (the "SEC") and is incorporated by reference herein: 1. Schedules A and B to the Amended and Restated Investment Advisory and Administration Agreement between Registrant and Charles Schwab Investment Management, Inc. ("CSIM"), dated December 1, 2017, are incorporated herein by reference to Exhibit (d)(iv) of Post-Effective Amendment No. 180 to Registrant's Registration Statement on Form N- 1A (File No. 811-07704), electronically filed with the SEC on December 1, 2017. The following documents are filed with the SEC herein: 1. Amendment, dated September 27, 2018, to Investment Sub-Advisory Agreement between CSIM and American Century Investment Management, Inc. is filed herein. 2. Amendment, dated September 27, 2018, to Investment Sub-Advisory Agreement between CSIM and Wellington Management Company LLP is filed herein. 3. Amendment, dated September 27, 2018, to Investment Sub-Advisory Agreement between CSIM and William Blair Investment Management, LLC is filed herein. ADVISORY CONTRACTS 3 NCEN_4719376058778136.txt September 27, 2018 William Blair Investment Management, LLC (formerly, William Blair & Company, L.L.C.) Attention: Heather Gardner, CIMA 150 North Riverside Plaza Chicago, IL 60606 Re: Amendment to Schedule B Dear Ms. Gardner: This letter agreement serves to amend Schedule B ("Schedule B") to our investment sub-advisory agreement, dated January 31, 2002, as amended on March 26, 2003, December 2, 2004, April 18, 2005 and June 5, 2012 (the "Agreement"). The amended Schedule B reflects the new breakpoints with respect to the sub-advisory fees. Amended Schedule B shall replace the existing Schedule B effective October 1, 2018. The Agreement otherwise remains unchanged and shall continue in full force and effect. In the space provided below, please acknowledge your agreement to the foregoing. Very truly yours, Charles Schwab Investment Management, Inc. By: /s/ Marie Chandoha Name: Marie Chandoha Title: President and Chief Executive Officer ACKNOWLEDGED AND AGREED TO: William Blair Investment Management, LLC By: /s/ Robert Duwa Name: Robert Duwa Title: Partner SCHEDULE B TO THE INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN CHARLES SCHWAB INVESTMENT MANAGEMENT, INC. AND WILLIAM BLAIR INVESTMENT MANAGEMENT, LLC FEES Fees will be accrued each day by applying to the Net Asset Value of the Managed Assets at the end of that day, the daily rate, using a 365-day year, equivalent to the applicable fee percentage set forth below ("Company Percentage"). Sub- Adviser represents and warrants that the Company Percentage now is and in the future will be equal to or less than the applicable fee percentage payable to Sub-Adviser under any other advisory or sub-advisory agreement for comparable investment advisory services to mutual funds that have substantially the same investment policies and objectives (each a "Third Party Percentage"). If at any time, the Company Percentage is greater than any Third Party Percentage, the Company Percentage will be reduced to the lowest Third Party Percentage, including with respect to any advisory or sub- advisory agreement amended or entered into by Sub-Adviser after the effective date of this Schedule. Fees will be paid within 30 days following the end of each calendar quarter. COMPANY PERCENTAGE 47 Basis Points on the first $250 million. 30 Basis Points above $250 million. Provided however, if at any time the Net Asset Value of the Managed Assets falls below $250 million for a period of 90 days, the Company Percentage shall be: 55 Basis Points on the first $150 million, 40 Basis Points on the next $100 million, 35 Basis Points on the next $50 million and 30 Basis Points above $300 million. However, if at any time after such drop, the Net Asset Value of the Managed Assets again exceeds $250 million for a period of 90 days the Company Percentage shall revert to the Schedule set forth above. Effective Date of this Schedule B: October 1, 2018 ADVISORY CONTRACTS 4 NCEN_4737732788693716.txt September 27, 2018 Wellington Management Company LLP Attention: Legal and Compliance 280 Congress Street Boston, MA 02210 Re: Amendment to Schedule B Dear Sir or Madam: This letter agreement serves to amend Schedule B ("Schedule B") to our Investment Sub-Advisory Agreement, dated October 2, 2012, as amended from time to time (the "Agreement"). The amended Schedule B reflects the new sub- advisory fees. Amended Schedule B shall replace the existing Schedule B effective October 1, 2018. The Agreement otherwise remains unchanged and shall continue in full force and effect. In the space provided below, please acknowledge your agreement to the foregoing. Very truly yours, Charles Schwab Investment Management, Inc. By: /s/ Marie Chandoha Name: Marie Chandoha Title: President and Chief Executive Officer ACKNOWLEDGED AND AGREED TO: Wellington Management Company LLP By: /s/ Michael Boudens Name: Michael Boudens Title: Senior Managing Director SCHEDULE B TO THE INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN CHARLES SCHWAB INVESTMENT MANAGEMENT, INC. AND WELLINGTON MANAGEMENT COMPANY LLP zFEES Fees will be accrued each day by applying to the Net Asset Value of the Managed Assets at the end of that day, the daily rate, using a 365-day year, equivalent to the applicable fee percentage set forth below ("Company Percentage"). Fees will be paid within 30 days following the end of each calendar quarter. COMPANY PERCENTAGE 62 basis points on all Managed Assets. Effective Date of this Schedule B: October 1, 2018 INTERNAL CONTROL RPT 5 NCEN_4533700864029440.txt Report of Independent Registered Public Accounting Firm To the Board of Trustees of Schwab Capital Trust and Shareholders of the funds listed in Appendix A (hereafter collectively referred to as the "Funds") In planning and performing our audit of the financial statements of the Funds as of and for the periods ended October 31, 2018, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), we considered the Funds' internal control over financial reporting, including controls over safeguarding securities, as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements and to comply with the requirements of Form N-CEN, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Funds' internal control over financial reporting. The management of the Funds is responsible for establishing and maintaining effective internal control over financial reporting. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of a company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. Our consideration of the Funds' internal control over financial reporting was for the limited purpose described in the first paragraph and would not necessarily disclose all deficiencies in internal control over financial reporting that might be material weaknesses under standards established by the PCAOB. However, we noted no deficiencies in the Funds' internal control over financial reporting and its operation, including controls over safeguarding securities, that we consider to be a material weaknesses as defined above as of October 31, 2018. This report is intended solely for the information and use of the Board of Trustees of Schwab Capital Trust and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties. PricewaterhouseCoopers LLP San Francisco, California December 14, 2018 Appendix A Period : November 1, 2017 through October 31, 2018 Fund Laudus Small-Cap MarketMasters Fund Laudus International MarketMasters Fund Schwab Core Equity Fund Schwab Dividend Equity Fund Schwab Large-Cap Growth Fund Schwab Small-Cap Equity Fund Schwab Hedged Equity Fund Schwab Health Care Fund Schwab International Core Equity Fund Schwab Balanced Fund Schwab S&P 500 Index Fund Schwab Small-Cap Index Fund Schwab Total Stock Market Index Fund Schwab International Index 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 MarketTrack All Equity Portfolio Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfoli0 Schwab Target 2010 Fund Schwab Target 2015 Fund Schwab Target 2020 Fund Schwab Target 2025 Fund Schwab Target 2030 Fund Schwab Target 2035 Fund Schwab Target 2040 Fund Schwab Target 2045 Fund Schwab Target 2050 Fund Schwab Target 2055 Fund Schwab Target 2060 Fund Period December 20, 2017 (commencement of operations) through October 31, 2018 Fund Schwab U.S. Large-Cap Growth Index Fund Schwab U.S. Large-Cap Value Index Fund Schwab U.S. Mid-Cap Index Fund 2 2 ADVISORY CONTRACTS 6 NCEN_4719266028442637.txt September 27, 2018 American Century Investment Management, Inc. Attention: General Counsel 4500 Main Street Kansas City, MO 64119 Re: Amendment to Schedule B Dear Sir or Madam: This letter agreement serves to amend Schedule B ("Schedule B") to our Investment Sub-Advisory Agreement, dated June 3, 2010, as amended from time to time (the "Agreement"). The amended Schedule B reflects the new breakpoints with respect to the sub-advisory fees. Amended Schedule B shall replace the existing Schedule B effective October 1, 2018. The Agreement otherwise remains unchanged and shall continue in full force and effect. In the space provided below, please acknowledge your agreement to the foregoing. Very truly yours, Charles Schwab Investment Management, Inc. By: /s/ Marie Chandoha Name: Marie Chandoha Title: President and Chief Executive Officer ACKNOWLEDGED AND AGREED TO: American Century Investment Management, Inc. By: /s/ Margie Morrison Name: Margie Morrison Title: Senior Vice President SCHEDULE B TO THE INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN CHARLES SCHWAB INVESTMENT MANAGEMENT, INC. AND AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. FEES The Managed Assets of all mandates will be aggregated for purposes of calculating the fees. Fees will be accrued each day by applying to the Net Asset Value of the Managed Assets at the end of that day, the daily rate, using a 365-day year, equivalent to the applicable fee percentage set forth below ("Company Percentage"). Fees will be paid within 30 days following the end of each calendar quarter. The Sub-Adviser will not agree to a lower effective fee rate that is lower than Company Percentage with any other comparable client, as defined hereinafter, without notifying CSIM of such lower effective fee rate, pursuant to this Agreement. If at any time, the Company Percentage is greater than such fee rate, the Company Percentage will be reduced to be equal or less that fee rate. For purposes of this provision, the term "comparable client" shall mean any person or entity for which the Sub-Adviser is providing sub-advisory services, excluding clients whose fees are based on performance, that (1) enters into an investment management agreement with the Sub-Adviser after the date hereof (that is not a renewal, extension of or an amendment of an existing agreement) for the management of an account (either alone or together with other accounts of it and its affiliates) that is comparable or smaller in size to the Fund and (2) utilizes the same investment strategy and receives similar investment management services to those provided to the Fund, including without limitation, having comparable investment guidelines, restrictions and objectives. The determination of the applicability of this provision to any comparable client shall be made at the time of the Sub-Adviser's agreement to an effective fee rate. COMPANY PERCENTAGE 65 Basis points on the first $250 million 60 Basis points on assets over $250 million Effective Date of this Schedule B: October 1, 2018