|
Summary Prospectus December 17, 2011 |
Schwab
U.S. Large-Cap Growth
ETFtm
Ticker
Symbol: SCHG
Before you invest, you may want to review the fund’s
prospectus, which contains more information about the fund and
its risks. You can find the fund’s prospectus, Statement of
Additional Information (SAI) and other information about the
fund online at www.schwabetfs.com/prospectus. You can
also obtain this information at no cost by calling
1-866-414-6349
or by sending an email request to
orders@mysummaryprospectus.com. If you purchase or hold
fund shares through a financial intermediary, the fund’s
prospectus, SAI, and other information about the fund are
available from your financial intermediary.
The fund’s prospectus and SAI, both dated December 17,
2011, include a more detailed discussion of fund investment
policies and the risks associated with various fund investments.
The prospectus and SAI are incorporated by reference into the
summary prospectus, making them legally a part of the summary
prospectus.
Investment
objective
The fund’s goal is to track as closely as possible, before
fees and expenses, the total return of the Dow Jones
U.S. Large-Cap Growth Total Stock Market
Indexsm.1
Fund fees
and expenses
This table describes the fees and expenses you may pay if you
buy and hold shares of the fund. The table does not reflect
brokerage commissions you may incur when buying or selling fund
shares.
| Shareholder fees (fees paid directly from your investment) | ||
| None | ||
|
Annual
fund operating expenses |
||
| (expenses that you pay each year as a % of the value of your investment) | ||
| Management fees | 0.13 | |
| Other expenses | None | |
| Total annual operating expenses | 0.13 | |
Example
This example is intended to help you compare the cost of
investing in the fund with the cost of investing in other funds.
The example assumes that you invest $10,000 in the fund for the
time periods indicated and then redeem all of your shares at the
end of those time periods. The example also assumes that your
investment has a 5% return each year and that the fund’s
operating expenses remain the same. This example does not
reflect any brokerage commissions you may incur when buying or
selling fund shares. Your actual costs may be higher or lower.
Expenses on
a $10,000 investment
| 1 year | 3 years | 5 years | 10 years | |||
|
$13
|
$42 | $73 | $166 |
Portfolio
turnover
The fund pays transaction costs, such as commissions, when it
buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover may indicate higher
transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not
reflected in the annual fund operating expenses or in the
example, affect the fund’s performance. During the most
recent fiscal year, the fund’s portfolio turnover rate was
10% of the average value of its portfolio.
Principal
investment strategies
To pursue its goal, the fund generally invests in stocks that
are included in the index. The index includes the
large-cap growth portion of the Dow Jones U.S. Total Stock
Market
Indexsm
actually available to investors in the marketplace. The Dow
Jones U.S. Large-Cap Growth Total Stock Market
Indexsm
includes the components ranked 1-750 by full market
capitalization and that are classified as “growth”
based on a number of factors. The index is a float-adjusted
market capitalization weighted index. As of August 31,
2011, the index was composed of 441 stocks.
It is the fund’s policy that under normal circumstances it
will invest at least 90% of its net assets in these stocks. The
fund will notify its shareholders at least 60 days before
changing this policy. The fund will generally give the same
weight to a given stock as the index does. However, when the
Adviser believes it is appropriate to do so, such as to avoid
purchasing odd-lots (i.e., purchasing less than the usual
number of shares traded for a security), for tax considerations,
or to address liquidity considerations with respect to a stock,
the Adviser may cause the fund’s weighting of a stock to be
more or less than the index’s weighting of the stock. The
fund may sell securities that are represented in the index in
anticipation of their removal from the index, or buy securities
that are not yet represented in the index in anticipation of
their addition to the index.
Under normal circumstances, the fund may invest up to 10% of its
net assets in securities not included in its index. The
principal
1 Index
ownership — “Dow Jones” and “The Dow
Jones U.S. Large-Cap Growth Total Stock Market
Indexsm”
are service marks of Dow Jones Trademark Holdings, LLC
(“Dow Jones”), have been licensed to CME Group Index
Services LLC (“CME”), and sublicensed for use for
certain purposes by CSIM, the fund’s investment adviser.
Fees payable under the license are paid by CSIM. The Schwab
U.S. Large-Cap Growth ETF, based on The Dow Jones
U.S. Large-Cap Growth Total Stock Market
Indexsm,
is not sponsored, endorsed, sold or promoted by Dow Jones or CME
and neither makes any representation regarding the advisability
of trading in such product.
1 of
4
types of these investments include those that the Adviser
believes will help the fund track the index, such as investments
in (a) securities that are not represented in the index but
the Adviser anticipates will be added to the index or as
necessary to reflect various corporate actions (such as mergers
and spin-offs), (b) other investment companies, and
(c) derivatives, principally futures contracts. The fund
may use futures contracts and other derivatives primarily to
seek returns on the fund’s otherwise uninvested cash assets
to help it better track the index. The fund may also invest in
cash and cash equivalents, and may lend its securities to
minimize the difference in performance that naturally exists
between an index fund and its corresponding index.
The fund will concentrate its investments (i.e., hold 25%
or more of its total assets) in a particular industry, group of
industries or sector to approximately the same extent that its
index is so concentrated. For purposes of this limitation,
securities of the U.S. government (including its agencies
and instrumentalities), and repurchase agreements collateralized
by U.S. government securities are not considered to be
issued by members of any industry.
The Adviser seeks to achieve, over time, a correlation between
the fund’s performance and that of its index, before fees
and expenses, of 95% or better. However, there can be no
guarantee that the fund will achieve a high degree of
correlation with the index. A number of factors may affect the
fund’s ability to achieve a high correlation with its
index, including the degree to which the fund utilizes a
sampling technique. The correlation between the performance of
the fund and its index may also diverge due to transaction
costs, asset valuations, corporate actions (such as mergers and
spin-offs), timing variances, and differences between the
fund’s portfolio and the index resulting from legal
restrictions (such as diversification requirements) that apply
to the fund but not to the index.
Principal
risks
The fund is subject to risks, any of which could cause an
investor to lose money. The fund’s principal risks include:
Market Risk. Stock markets rise and fall daily. As
with any investment whose performance is tied to these markets,
the value of your investment in the fund will fluctuate, which
means that you could lose money.
Investment Style Risk. The fund is not actively
managed. 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 is normally below that of the index.
Equity Risk. The prices of equity securities rise
and fall daily. These price movements may result from factors
affecting individual companies, industries or the securities
market as a whole. In addition, equity markets tend to move in
cycles, which may cause stock prices to fall over short or
extended periods of time.
Large-Cap Risk. The fund will principally invest in
large-cap segments of the U.S. stock market. Large-cap
stocks tend to go in and out of favor based on market and
economic conditions. During a period when large-cap
U.S. stocks fall behind other types of
investments — mid- or small-cap stocks, for
instance — the fund’s large-cap holdings could
reduce performance.
Growth Investing Risk. Growth stocks can be
volatile. Growth companies usually invest a high portion of
earnings in their businesses and may lack the dividends of value
stocks that can cushion stock prices in a falling market. The
prices of growth stocks are based largely on projections of the
issuer’s future earnings and revenues. If a company’s
earnings or revenues fall short of expectations, its stock price
may fall dramatically. Growth stocks may also be more expensive
relative to their earnings or assets compared to value or other
stocks.
Tracking Error Risk. As an index fund, the fund
seeks to track the performance of its benchmark index, although
it may not be successful in doing so. The divergence between the
performance of the fund and its benchmark index, positive or
negative, is called “tracking error.” Tracking error
can be caused by many factors and it may be significant.
Derivatives Risk. 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 and could cause the fund to
lose more than the principal amount invested. In addition,
investments in derivatives may involve leverage, which means a
small percentage of assets invested in derivatives can have a
disproportionately larger impact on the fund.
Liquidity Risk. A particular investment may be
difficult to purchase or sell. The fund may be unable to sell
illiquid securities at an advantageous time or price.
Securities Lending Risk. Securities lending involves
the risk of loss of rights in the collateral or delay in
recovery of the collateral if the borrower fails to return the
security loaned or becomes insolvent.
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 or asset class, the fund may be adversely
affected by the performance of those securities, may be subject
to increased price volatility and may be more susceptible to
adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, sector or
asset class.
Market Trading Risk. Although fund shares are listed
on national securities exchanges, there can be no assurance that
an active trading market for fund shares will develop or be
maintained. If an active market is not maintained, investors may
find it difficult to buy or sell fund shares.
Shares of the Fund May Trade at Prices Other Than
NAV. Fund shares may be bought and sold in the
secondary market at market prices. Although it is expected that
the market price of the shares of the fund will approximate the
fund’s net asset value (NAV), there may be times when the
market price and the NAV vary significantly. You may pay more
than NAV when you buy shares of the fund in the secondary
market, and you may receive less than NAV when you sell those
shares in the secondary market.
Lack of Governmental Insurance or Guarantee. An
investment in the fund is not a bank deposit and it is not
insured or
| Summary Prospectus December 17, 2011 | 2 of 4 | Schwab U.S. Large-Cap Growth ETFtm |
guaranteed by the Federal Deposit Insurance Corporation (FDIC)
or any other government agency.
For more information on the risks of investing in the fund
please see the “Fund details” section in the
prospectus.
Performance
The bar chart below shows how the fund’s investment results
have varied from year to year, and the following table shows how
the fund’s average annual total returns for various periods
compared to that of an index. This information provides some
indication of the risks of investing in the fund. All figures
assume distributions were reinvested. Keep in mind that future
performance (both before and after taxes) may differ from past
performance. For current performance information, please see
www.schwabetfs.com/prospectus.
Annual
total returns (%) as of 12/31
Best
quarter: 12.86%
Q3 2010 Worst quarter:
(12.36)% Q2 2010
Year-to-date
performance (before taxes) as of
9/30/11:
(10.36)%
Average
annual total returns (%) as of
12/31/10
|
Since |
||||
|
Inception |
||||
| 1 year | (12/11/09) | |||
|
Before taxes
|
16.84% | 18.84% | ||
|
After taxes on distributions
|
16.70% | 18.70% | ||
|
After taxes on distributions and sale of shares
|
11.10% | 16.00% | ||
|
Comparative Index (reflect no deduction for expenses or
taxes)
|
||||
|
Dow Jones U.S.
Large-Cap Growth Total Stock Market
Indextm
|
17.03% | 19.03% | ||
The after-tax figures reflect the highest individual federal
income tax rates in effect during the period and do not reflect
the impact of state and local taxes. Your actual after-tax
returns depend on your individual tax situation. In addition,
after-tax returns are not relevant if you hold your fund shares
through a tax-deferred arrangement, such as a 401(k) plan, IRA
or other tax-advantaged account.
Investment
adviser
Charles Schwab Investment Management, Inc.
Portfolio
managers
Agnes Hong, CFA, a managing director and portfolio
manager of the investment adviser, has
day-to-day
responsibility for the co-management of the fund. She has
managed the fund since 2009.
Ferian Juwono, CFA, a managing director and portfolio
manager of the investment adviser, has
day-to-day
responsibility for the co-management of the fund. He has managed
the fund since 2010.
Purchase
and sale of fund shares
The fund issues and redeems shares at its NAV only in large
blocks of shares, typically 50,000 shares or more
(“Creation Units”). These transactions are usually in
exchange for a basket of securities included in the index and an
amount of cash. As a practical matter, only institutions or
large investors purchase or redeem Creation Units. Except when
aggregated in Creation Units, shares of the fund are not
redeemable securities.
Individual shares of the fund trade on national securities
exchanges and elsewhere during the trading day and can only be
bought and sold at market prices throughout the trading day
through a broker-dealer. Because fund shares trade at market
prices rather than NAV, shares may trade at a price greater than
NAV (premium) or less than NAV (discount).
Tax
information
Dividends and capital gains distributions received from the fund
will generally be taxable as ordinary income or capital gains,
unless you are investing through an IRA, 401(k) or other
tax-advantaged account.
| Summary Prospectus December 17, 2011 | 3 of 4 | Schwab U.S. Large-Cap Growth ETFtm |
Schwab
ETFstm
REG58804FLD-04
Schwab
U.S. Large-Cap Growth
ETFtm;
Ticker Symbol: SCHG
| Summary Prospectus December 17, 2011 | 4 of 4 | Schwab U.S. Large-Cap Growth ETFtm |