nvcsrs

This supplement is not part of the shareholder report.

Supplement to the February 28, 2009

Schwab Equity Index Funds^® Prospectus

The information provided in this supplement is as of July 1, 2009.

This supplement provides new and additional information beyond that contained in the Prospectus and should be read in conjunction with the Prospectus.

The Schwab Total Stock Market Index Fund’s primary benchmark index, The Dow Jones Wilshire 5000 Composite Index, recently changed its name to The Dow Jones U.S. Total Stock Market Index. Accordingly, the “Investment Objective” Section on Page 19 of the Prospectus is hereby deleted and replaced in its entirety with the following:

Investment Objective

The fund’s goal is to track the total return of the entire U.S. stock market, as measured by The Dow Jones U.S. Total Stock Market Index^sm.

Additionally, the footnote on page 20 of the Prospectus is deleted and replaced in its entirety with the following:

Index ownership — “Dow Jones” and “The Dow Jones U.S. Total Stock Market Index^SM” are service marks of Dow Jones & Company, Inc. and have been licensed for use for certain purposes by Charles Schwab Investment Management, Inc. The Schwab Total Stock Market Index Fund^®, based on The Dow Jones U.S. Total Stock Market Index^SM, is not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no representation regarding the advisability of investing in such product.

Please retain this supplement for future reference

Member SIPC REG48321 (07/09)

Six cost-efficient ways to tap into the power of

the stock market for long-term growth potential.


In This Report
Performance at a Glance		2
From the President		3
The Investment Environment		4
Fund Management		5
Schwab S&P 500 Index Fund		6
Schwab Institutional Select^{^®} S&P 500 Fund		8
Schwab 1000 Index^{^®} Fund		10
Schwab Small-Cap Index Fund^{^®}		12
Schwab Total Stock Market Index Fund^{^®}		14
Schwab International Index Fund^{^®}		16
Fund Expenses		18
Financial Statements		20
Financial Notes		63
Trustees and Officers		73
Glossary		76
EX-99.CERT
EX-99.906CERT

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor and transfer agent: 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 Morgan Stanley Capital International Inc. and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.

Performance at a Glance

The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwab.com/schwabfunds.


Total Return for
the Report Period



Schwab S&P 500 Index Fund

Investor Shares (Ticker Symbol: SWPIX)		-8.52%
Select Shares^® (Ticker Symbol: SWPPX)		-8.40%
e.Shares (Ticker Symbol: SWPEX)		-8.45%
Benchmark: S&P 500^® Index		-8.53%
Fund Category: Morningstar Large-Cap Blend		-6.73%

Performance Details		pages 6-7



Schwab Institutional Select^® S&P 500 Fund
(Ticker Symbol: ISLCX)		-8.55%

Benchmark: S&P 500^® Index		-8.53%
Fund Category: Morningstar Large-Cap Blend		-6.73%

Performance Details		pages 8-9



Schwab 1000 Index^® Fund

Investor Shares (Ticker Symbol: SNXFX)		-7.57%
Select Shares^® (Ticker Symbol: SNXSX)		-7.50%
Benchmark: Schwab 1000 Index^®		-7.54%
Fund Category: Morningstar Large-Cap Blend		-6.73%

Performance Details		pages 10-11



Schwab Small-Cap Index Fund^®

Investor Shares (Ticker Symbol: SWSMX)		-6.23%
Select Shares^® (Ticker Symbol: SWSSX)		-6.21%
Benchmark: Schwab Small-Cap Index^®		-6.06%
Fund Category: Morningstar Small-Cap Blend		-5.44%

Performance Details		pages 12-13



Schwab Total Stock Market Index Fund^®

Investor Shares (Ticker Symbol: SWTIX)		-7.23%
Select Shares^® (Ticker Symbol: SWTSX)		-7.13%
Benchmark: Dow Jones U.S. Total Stock Market Index^SM1		-6.97%
Fund Category: Morningstar Large-Cap Blend		-6.73%

Performance Details		pages 14-15



Schwab International Index Fund^®

Investor Shares (Ticker Symbol: SWINX)²		-6.00%
Select Shares^® (Ticker Symbol: SWISX)²		-5.86%
Benchmark: Schwab International Index^®		-3.93%
Fund Category: Morningstar Foreign Large-Cap Blend		-3.30%

Performance Details		pages 16-17




Minimum Initial Investment³

Investor Shares		$ 100
Select Shares^®		$ 100
e.Shares ($500 for retirement, education and custodial accounts)		$ 1,000
Institutional Select S&P 500 Fund		$ 100

All fund and index figures 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 you cannot invest in them directly. Performance results less than one year are not annualized.

Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.


¹	Previously, this index was called Dow Jones Wilshire 5000 Composite Index.

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

³	Please see prospectus for further detail and eligibility requirements.

2 Schwab Equity Index Funds

From the President

Randall W. Merk is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report. He joined the firm in 2002 and has held a variety of executive positions at Schwab.

Dear Shareholder,

The past six months brought little respite from the effects of the economic recession. Eroding equity prices and financial instability continue to weigh on the minds of investors both personally and professionally; losses have been tough to bear, and achieving a sense of individual financial well-being has been a frustrating task.

Despite these difficulties it is important to keep planning for the future, and even if short-term and long-term financial goals have changed we must still aim to achieve them.

With this in mind, we’ve made a number of improvements to the Schwab Funds family of mutual funds making investing cheaper and easier for our clients. I am pleased to report that on May 5, 2009, we lowered expenses on Schwab Equity Index Funds and announced that we are simplifying share classes for Schwab equity and bond funds. Each Schwab equity and bond fund offers one low fund expense to investors regardless of how much they invest, starting at a low $100 minimum investment. Our goal is to make investing easier for our clients and the advisors who serve them−at a very low cost.

These enhancements are intended to help our clients continue to invest no matter what the market conditions may be. We hope that each and every client feels more comfortable planning for a financially secure future knowing that we are constantly working to make investing easier and more affordable.

Thank you for investing with us.

Sincerely,

Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 800-435-4000. Please read the prospectus carefully before investing.

Schwab Equity Index Funds 3

The Investment Environment

Investment conditions in the U.S. financial marketplace remained tenuous as volatility and economic recession weighed on investors’ decision making, but improved during the last few months of the reporting period. The first four months of the period were generally bearish; equity prices were driven down across the board as investors pulled back from the markets amidst poor macroeconomic data and pessimism over the markets’ ability to mount a swift recovery. The last two months of the period were more bullish, helping to reduce earlier losses and, in some cases, pulling sectors and indices into positive territory. In the U.S., fixed income markets generally outperformed equities for the period as a whole, although yields on short-term Treasuries and other government-backed debt remained low.

Major economic indicators, such as Gross Domestic Product (GDP), unemployment, and consumer confidence continued to reflect broad-based economic difficulty. GDP—the output of goods and services produced by labor and property located in the United States—contracted -6.3% in the fourth quarter of 2008 and -6.1% in the first quarter of 2009, according to advanced estimates. The first-quarter decline in GDP was primarily due to negative contributions from exports, private inventory investment, and equipment and software, according to the Bureau of Economic Analysis. The U.S. unemployment rate increased from 6.7% in November 2008 to 8.9% in April of 2009. Consumer confidence improved in the last two months of the period, rising slightly in March to 26.9, and then to 39.2 in April. The increase was primarily driven by a more optimistic short-term economic outlook. Despite this improvement, consumer confidence remains relatively low.

When looking at the S&P 500 Index, which is usually seen as a bellwether for financial markets, returns were negative overall, but some sectors showed signs of improving. For the six-month period ending April 30, 2009, the S&P 500 Index returned -8.53%. By comparison, the Russell 1000 Index returned -7.39%. In the S&P 500, Financials declined the most, returning -29.13%, followed by Industrials and Energy, which returned -12.56% and -10.30%, respectively. Relatively better performing sectors were Information Technology and Consumer Discretionary, which returned 5.61% and 4.07%, respectively. In general, small and mid-sized corporations in the S&P 500 outperformed their larger counterparts. From a broad-market standpoint, growth stocks generally outperformed value, with the Russell 1000 Growth Index returning -1.52%, while the Russell 1000 Value Index returned -13.27%. Internationally, the MSCI EAFE Index (Gross) returned -2.35%, while the MSCI Emerging Markets Index (Net) returned 17.38%.

On the fixed income side, markets continued to be shaken by turmoil surrounding major financial and financial insurance corporations, but generally outperformed equity markets during the period. The Barclays Capital U.S. Aggregate Bond Index returned 7.74%, while the Barclays Capital General Muni Bond Index returned 8.20%. TIPS and GNMA securities were also strong, with the Barclays Capital GNMA Index up 8.03% and the Barclays Capital U.S. TIPS Index up 9.46%. Short-term Treasury securities were also positive, but yields remained low as investors continued to see Treasuries as a safe haven. The Barclays Capital U.S. Treasury Bills: 1-3 Months returned 0.13%.

Asset Class Performance Comparison % returns during the report period

This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.


-8.53%	S&P 500^® Index: measures U.S. large-cap stocks

-8.40%	Russell 2000^® Index: measures U.S. small-cap stocks

-2.35%	MSCI EAFE^® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East


7.74%	Barclays Capital U.S. Aggregate Bond Index: measures the U.S. bond market

0.13%	Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations

These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.

Data source: Charles Schwab & Co., Inc.

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

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

4 Schwab Equity Index Funds

Fund Management



		Jeffrey Mortimer, CFA, Chief Investment Officer, Charles Schwab Investment Management, is responsible for the overall management of each of the funds. Prior to joining the firm in October 1997, he worked for more than 8 years in asset management.

		Larry Mano, a managing director and portfolio manager of the investment adviser, is responsible for the day-to-day management of the Schwab Total Stock Market Index Fund, and the Schwab International Index Fund, and co-management of each of the remaining funds. Prior to joining the firm in November 1998, he worked for 20 years in equity management.

		Ron Toll, a portfolio manager of the investment adviser, is responsible for the day-to-day co-management of each of the funds, except the Schwab Total Stock Market Index Fund and the Schwab International Index Fund. He joined the firm in 1998, became Manager, Portfolio Operations in 2000, Manager, Portfolio Operations and Analytics in 2005 and was named to his current position in 2007.

Schwab Equity Index Funds 5

Schwab S&P 500 Index Fund

The Schwab S&P 500 Index Fund Investor Shares returned -8.52% during the period, compared to the benchmark S&P 500 Index, which returned -8.53%. Unlike the fund, the index does not include operational and transactional costs. The S&P 500 Index includes the stocks of 500 leading U.S. publicly traded companies from a broad range of industries and is market-capitalization weighted. Therefore, its returns are most influenced by the largest companies in the index. When looking at returns in the fund on a sector-specific level, Financials declined the most, returning -29.05%, followed by Industrials and Energy, which returned -12.76% and -10.25%, respectively. Better performing sectors included Information Technology, which returned 5.59%, and Consumer Discretionary and Telecomm Service, which returned 4.16% and 3.69%, respectively. When looking at price-to-earnings ratios, companies with negative and very high price-to-earnings ratios generally did worse. In terms of market capitalization, larger companies generally underperformed smaller. Better performing securities represented in the fund were led by Apple, Inc., Goldman Sachs, and IBM. Securities detracting from performance included Bank of America Corp., General Electric Corp., and Citigroup, Inc.

As of 04/30/09:

Style Assessment¹

Statistics


Number of Holdings	516

Weighted Average Market


Cap ($ x 1,000,000)	$67,263


Price/Earnings Ratio (P/E)	33.4


Price/Book Ratio (P/B)	1.9


Portfolio Turnover Rate²	2%

Sector Weightings % of Investments


Information Technology	18.3%


Health Care	13.7%


Energy	12.5%


Financials	12.1%


Consumer Staples	11.9%


Industrials	10.3%


Consumer Discretionary	9.6%


Utilities	3.8%


Telecommunication Services	3.7%


Materials	3.4%


Other	0.7%


Total	100.0%

Top Holdings % of Net Assets³


Exxon Mobil Corp.	4.4%


Microsoft Corp.	2.0%


AT&T, Inc.	2.0%


The Procter & Gamble Co.	1.9%


Johnson & Johnson	1.9%

International Business Machines


Corp.	1.8%


Chevron Corp.	1.8%


General Electric Co.	1.7%


JPMorgan Chase & Co.	1.6%


Cisco System, Inc.	1.5%


Total	20.6%

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

Source of Sector Classification: S&P and MSCI.

Standard & Poor’s^®, S&P^®, S&P 500^®, Standard & Poor’s 500^® and 500^® are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the fund. The fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of investing in the fund.


¹	Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 04/30/09, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future.

²	Not annualized.

³	This list is not a recommendation of any security by the investment adviser.

6 Schwab Equity Index Funds

Schwab S&P 500 Index Fund

Performance Summary as of 04/30/09

Performance of a Hypothetical
$10,000 Investment in Investor Shares¹

Performance of a Hypothetical
$50,000 Investment in Select Shares¹

Performance of a Hypothetical
$10,000 Investment in e.Shares¹

Pre-Tax Average Annual Total Returns^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		10 Years


Investor Shares (5/1/96)		-8.52%		-35.13%		-2.85%		-2.71%
Select Shares (5/19/97)		-8.40%		-34.96%		-2.67%		-2.54%
e.Shares (5/1/96)		-8.45%		-35.00%		-2.72%		-2.60%
Benchmark: S&P 500^® Index		-8.53%		-35.31%		-2.70%		-2.48%
Fund Category: Morningstar Large-Cap Blend		-6.73%		-35.10%		-2.69%		-1.75%

Fund Expense Ratios³: Investor Shares: 0.36% / Select Shares: Net 0.19%; Gross 0.21% / e.Shares: 0.21%

Average Annual Total Returns After Tax^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		10 Years


Investor Shares (5/1/96)
Pre-Liquidation (still own shares)		-8.89%		-35.40%		-3.24%		-3.11%
Post-Liquidation (shares were sold)		-5.01%		-22.46%		-2.46%		-2.39%
Select Shares^® (5/19/97)
Pre-Liquidation (still own shares)		-8.81%		-35.25%		-3.03%		-2.95%
Post-Liquidation (shares were sold)		-4.90%		-22.33%		-2.25%		-2.24%
e.Shares^® (5/1/96)
Pre-Liquidation (still own shares)		-8.86%		-35.29%		-3.07%		-3.00%
Post-Liquidation (shares were sold)		-4.94%		-22.35%		-2.28%		-2.28%
Fund Category: Morningstar Large-Cap Blend
Pre-Liquidation (still own shares)		-8.75%		-36.63%		-3.74%		-2.70%
Post-Liquidation (shares were sold)		-5.03%		-23.17%		-2.50%		-1.69%

All figures 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 you cannot invest in them directly. Performance results less than one year are not annualized.


¹	Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower.

²	The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 04/30/09 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund.

³	As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/11. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 5, 2009, the expense limitation for all share classes have been reduced. See Financial Note 4 for more information.

Schwab Equity Index Funds 7

Schwab Institutional Select^® S&P 500 Fund

The Schwab Institutional Select S&P 500 Fund returned -8.55% during the period, compared to the benchmark S&P 500 Index, which returned -8.53%. The S&P 500 Index includes the stocks of 500 leading U.S. publicly traded companies from a broad range of industries and is market-capitalization weighted. Therefore, its returns are most influenced by the largest companies in the index. When looking at returns in the fund on a sector-specific level, Financials declined the most, returning -29.03%, followed by Industrials and Energy, which returned -12.68% and -10.37%, respectively. Better performing sectors included Information Technology, which returned 5.60%, and Consumer Discretionary and Telecomm Service, which returned 4.36% and 3.40%, respectively. When looking at price-to-earnings ratios, companies with negative and very high price-to-earnings ratios generally did worse. In terms of market capitalization, larger companies generally underperformed smaller. Better performing securities represented in the fund were led by Apple, Inc., Goldman Sachs, and IBM. Securities detracting from performance included Bank of America Corp., General Electric Corp., and Citigroup, Inc.

As of 04/30/09:

Style Assessment¹

Statistics


Number of Holdings	514

Weighted Average Market


Cap ($ x 1,000,000)	$66,671


Price/Earnings Ratio (P/E)	33.2


Price/Book Ratio (P/B)	1.9


Portfolio Turnover Rate²	1%

Sector Weightings % of Investments


Information Technology	18.0%


Health Care	13.4%


Energy	12.2%


Financials	11.9%


Consumer Staples	11.8%


Industrials	10.2%


Consumer Discretionary	9.5%


Utilities	3.8%


Telecommunication Services	3.6%


Materials	3.4%


Other	2.2%


Total	100.0%

Top Holdings % of Net Assets³


Exxon Mobil Corp.	4.2%


Microsoft Corp.	2.0%


AT&T, Inc.	1.9%


Johnson & Johnson	1.8%


The Procter & Gamble Co.	1.8%

International Business Machines


Corp.	1.8%


General Electric Co.	1.7%


Chevron Corp.	1.7%


JPMorgan Chase & Co.	1.6%


Wal-Mart Stores, Inc.	1.4%


Total	19.9%

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

Source of Sector Classification: S&P and MSCI.


¹	Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 04/30/09, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future.

²	Not annualized.

³	This list is not a recommendation of any security by the investment adviser.

8 Schwab Equity Index Funds

Schwab Institutional Select^® S&P 500 Fund

Performance Summary as of 04/30/09

Performance of a Hypothetical
$75,000 Investment¹

Pre-Tax Average Annual Total Returns^1,2


Fund and Inception Date	6 Months		1 Year		5 Years		10 Years


Fund: Schwab Institutional Select^® S&P 500 Fund (2/1/99)		-8.55%		-35.24%		-2.70%		-2.54%
Benchmark: S&P 500^® Index		-8.53%		-35.31%		-2.70%		-2.48%
Fund Category: Morningstar Large-Cap Blend		-6.73%		-35.10%		-2.69%		-1.75%

Fund Expense Ratios³: Net 0.10%; Gross 0.22%

Average Annual Total Returns After Tax^1,2


	6 Months		1 Year		5 Years		10 Years


Fund: Schwab Institutional Select^® S&P 500 Fund (2/1/99)
Pre-Liquidation (still own shares)		-8.95%		-35.52%		-3.04%		-2.95%
Post-Liquidation (shares were sold)		-5.03%		-22.53%		-2.29%		-2.26%
Fund Category: Morningstar Large-Cap Blend
Pre-Liquidation (still own shares)		-8.75%		-36.63%		-3.74%		-2.70%
Post-Liquidation (shares were sold)		-5.03%		-23.17%		-2.50%		-1.69%


¹	Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower.

²	The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 04/30/09 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund.

³	As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/11. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 5, 2009, the expense limitation for all share classes have been reduced. See Financial Note 4 for more information.

Schwab Equity Index Funds 9

Schwab 1000 Index^® Fund

The Schwab 1000 Index Fund Investor Shares declined -7.57% during the period, compared to the benchmark Schwab 1000 Index, which returned -7.54%. Unlike the fund, the index does not include operation and transactional costs. The Schwab 1000 Index is comprised of the stocks of the largest 1,000 publicly traded companies in the United States, and is market-capitalization weighted. Therefore, its returns are most influenced by the largest companies in the index. When looking at returns in the fund on a sector-specific level, Financials declined the most, returning -26.06%, followed by Industrials and Energy, which returned -11.31% and -9.30%, respectively. Better performing sectors included Information Technology, which returned 5.78%, and Consumer Discretionary and Telecomm Service, which returned 5.03% and 3.54%, respectively. When looking at price-to-earnings ratios, companies with negative and very high price-to-earnings ratios generally did worse. In terms of market capitalization, larger companies generally underperformed smaller. Better performing securities represented in the fund were led by Apple, Inc., Goldman Sachs, and IBM. Securities detracting from performance included Bank of America Corp., General Electric Corp., and Citigroup, Inc.

As of 04/30/09:

Style Assessment¹

Statistics


Number of Holdings	997

Weighted Average Market


Cap ($ x 1,000,000)	$59,522


Price/Earnings Ratio (P/E)	35.3


Price/Book Ratio (P/B)	1.9


Portfolio Turnover Rate²	3%

Sector Weightings % of Investments


Information Technology	18.0%


Financials	13.4%


Health Care	13.2%


Energy	12.4%


Industrials	10.9%


Consumer Staples	10.8%


Consumer Discretionary	10.0%


Utilities	4.1%


Materials	3.7%


Telecommunication Services	3.5%


Total	100.0%

Top Holdings % of Net Assets³


Exxon Mobil Corp.	3.8%


Microsoft Corp.	1.8%


AT&T, Inc.	1.7%


The Procter & Gamble Co.	1.7%


Johnson & Johnson	1.7%

International Business Machines


Corp.	1.6%


Chevron Corp.	1.5%


General Electric Co.	1.5%


JPMorgan Chase & Co.	1.4%


Cisco Systems, Inc.	1.3%


Total	18.0%

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

Source of Sector Classification: S&P and MSCI.


¹	Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 04/30/09, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future.

²	Not annualized.

³	This list is not a recommendation of any security by the investment adviser.

10 Schwab Equity Index Funds

Schwab 1000 Index^® Fund

Performance Summary as of 04/30/09

Performance of a Hypothetical
$10,000 Investment in Investor Shares¹

Performance of a Hypothetical
$50,000 Investment in Select Shares¹

Pre-Tax Average Annual Total Returns^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		10 Years


Investor Shares (4/2/91)		-7.57%		-34.97%		-2.44%		-2.14%
Select Shares (5/19/97)		-7.50%		-34.86%		-2.29%		-2.01%
Benchmark: Schwab 1000 Index^®		-7.54%		-35.16%		-2.20%		-1.89%
Fund Category: Morningstar Large-Cap Blend		-6.73%		-35.10%		-2.69%		-1.75%

Fund Expense Ratios³: Investor Shares: 0.49% / Select Shares: 0.34%

Average Annual Total Returns After Tax^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		10 Years


Investor Shares (4/2/91)
Pre-Liquidation (still own shares)		-7.90%		-35.21%		-2.72%		-2.45%
Post-Liquidation (shares were sold)		-4.47%		-22.42%		-2.06%		-1.89%
Select Shares^® (5/19/97)
Pre-Liquidation (still own shares)		-7.86%		-35.12%		-2.60%		-2.36%
Post-Liquidation (shares were sold)		-4.38%		-22.31%		-1.93%		-1.79%
Fund Category: Morningstar Large-Cap Blend
Pre-Liquidation (still own shares)		-8.75%		-36.63%		-3.74%		-2.70%
Post-Liquidation (shares were sold)		-5.03%		-23.17%		-2.50%		-1.69%


¹	Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower.

²	The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 04/30/09 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund.

³	As stated in the prospectus. Reflects the total annual fund operating expenses without the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 5, 2009, the expense limitation for all share classes have been reduced. See Financial Note 4 for more information.

Schwab Equity Index Funds 11

Schwab Small-Cap Index Fund^®

The Schwab Small-Cap Index Fund Investor Shares returned -6.23% during the period, compared to the benchmark Schwab Small-Cap Index, which returned -6.06%. The Schwab Small-Cap Index is comprised of the stocks of the second largest 1,000 publicly traded companies in the United States, and is market-capitalization weighted. Therefore, its returns are most influenced by the largest companies in the index. When looking at returns in the fund on a sector-specific level, Energy and Financials declined the most during the period, returning -21.24% and -19.04%, respectively. Relatively better performing sectors included Information Technology, up 10.14%, and Consumer Discretionary, up 9.55%. Better performing securities represented in the fund were led by Dendreon Corp., PMC-Sierra, Inc. and Ashland, Inc. Securities detracting from performance included Penn-Virgina, SVB Financial Group, and Stone Energy.

As of 04/30/09:

Style Assessment¹

Statistics


Number of Holdings	1028

Weighted Average Market


Cap ($ x 1,000,000)	$814


Price/Earnings Ratio (P/E)	-7.5


Price/Book Ratio (P/B)	1.8


Portfolio Turnover Rate²	25%

Sector Weightings % of Investments


Financials	20.2%


Information Technology	18.3%


Industrials	16.1%


Consumer Discretionary	15.0%


Health Care	11.3%


Energy	6.6%


Materials	4.3%


Consumer Staples	3.6%


Utilities	3.1%


Telecommunication Services	1.2%


Other	0.3%


Total	100.0%

Top Holdings % of Net Assets³


Dendreon Crop.	0.4%


PMC-Sierra, Inc.	0.4%


3Com Corp.	0.3%


WMS Industries, Inc.	0.3%

Corporate Office Properties


Trust	0.3%


Jarden Corp.	0.3%


Skyworks Solutions, Inc.	0.3%


Informatica Corp.	0.3%


National Retail Properties, Inc.	0.3%


The Warnaco Group, Inc.	0.3%


Total	3.2%

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

Source of Sector Classification: S&P and MSCI.

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


¹	Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 04/30/09, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future.

²	Not annualized.

³	This list is not a recommendation of any security by the investment adviser.

12 Schwab Equity Index Funds

Schwab Small-Cap Index Fund^®

Performance Summary as of 04/30/09

Performance of a Hypothetical
$10,000 Investment in Investor Shares¹

Performance of a Hypothetical
$50,000 Investment in Select Shares¹

Pre-Tax Average Annual Total Returns^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		10 Years


Investor Shares (12/3/93)		-6.23%		-31.36%		-0.92%		2.88%
Select Shares (5/19/97)		-6.21%		-31.27%		-0.77%		3.03%
Benchmark: Schwab Small-Cap Index^®		-6.06%		-31.20%		-0.67%		3.13%
Fund Category: Morningstar Small-Cap Blend		-5.44%		-32.07%		-1.74%		4.44%

Fund Expense Ratios³: Investor Shares: 0.57% / Select Shares: 0.42%

Average Annual Total Returns After Tax^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		10 Years


Investor Shares (12/3/93)
Pre-Liquidation (still own shares)		-6.79%		-31.77%		-2.15%		1.71%
Post-Liquidation (shares were sold)		-3.93%		-20.30%		-0.67%		2.28%
Select Shares^® (5/19/97)
Pre-Liquidation (still own shares)		-6.83%		-31.73%		-2.05%		1.81%
Post-Liquidation (shares were sold)		-3.91%		-20.23%		-0.56%		2.37%
Fund Category: Morningstar Small-Cap Blend
Pre-Liquidation (still own shares)		-7.15%		-33.38%		-3.42%		2.92%
Post-Liquidation (shares were sold)		-3.94%		-21.08%		-1.55%		3.61%


¹	Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower.

²	The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 04/30/09 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund.

³	As stated in the prospectus. Reflects the total annual fund operating expenses without the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 5, 2009, the expense limitation for all share classes have been reduced. See Financial Note 4 for more information.

Schwab Equity Index Funds 13

Schwab Total Stock Market Index Fund^®

The Schwab Total Stock Market Index Fund Investor Shares returned -7.23% during the period, compared to the benchmark Dow Jones U.S. Total Stock Market Index, which returned -6.97%. The Dow Jones U.S. Total Stock Market Index includes all publicly traded stocks of companies headquartered in the United States for which pricing information is readily available. When looking at returns in the fund on a sector-specific level, Financials and Industrials declined the most during the period, returning -23.80% and -10.40%, respectively. Relatively better performing sectors included Information Technology, up 5.39%, and Consumer Discretionary, up 5.52%. Better performing securities represented in the fund were led by Apple, Inc., Goldman Sachs, and IBM. Securities detracting from performance included Bank of America Corp., General Electric Corp., and Citigroup, Inc.

As of 04/30/09:

Style Assessment¹

Statistics


Number of Holdings	2,333

Weighted Average Market


Cap ($ x 1,000,000)	$55,489


Price/Earnings Ratio (P/E)	35.4


Price/Book Ratio (P/B)	1.9


Portfolio Turnover Rate²	2%

Sector Weightings % of Investments


Information Technology	18.2%


Financials	14.2%


Health Care	12.2%


Energy	11.4%


Industrials	10.8%


Consumer Staples	10.7%


Consumer Discretionary	10.7%


Materials	3.7%


Utilities	3.7%


Telecommunication Services	3.1%


Other	1.3%


Total	100.0%

Top Holdings % of Net Assets³


Exxon Mobil Corp.	3.3%


Wal-Mart Stores, Inc.	1.9%


Microsoft Corp.	1.8%


AT&T, Inc.	1.5%

Berkshire Hathaway, Inc.,


Class A	1.4%


Johnson & Johnson	1.4%


The Procter & Gamble Co.	1.4%

International Business Machines


Corp.	1.4%


Chevron Corp.	1.3%


General Electric Co.	1.3%


Total	16.7%

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

Source of Sector Classification: S&P and MSCI.

“Dow Jones” and “The Dow Jones U.S.Total Stock Market Index^SM” are service marks of Dow Jones & Company, Inc. and have been licensed for certain purposes by CSIM. The Schwab Total Stock Market Index Fund, based on The Dow Jones U.S. Total Stock Market Index^SM, is not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no representation regarding the advisability of investing in such a product.


¹	Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 04/30/09, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future.

²	Not annualized.

³	This list is not a recommendation of any security by the investment adviser.

14 Schwab Equity Index Funds

Schwab Total Stock Market Index Fund^®

Performance Summary as of 04/30/09

Performance of a Hypothetical
$10,000 Investment in Investor Shares¹

Performance of a Hypothetical
$50,000 Investment in Select Shares¹

Pre-Tax Average Annual Total Returns^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		Since Inception


Investor Shares (6/1/99)		-7.23%		-34.12%		-2.03%		-1.43%
Select Shares (6/1/99)		-7.13%		-33.99%		-1.87%		-1.28%
Benchmark: Dow Jones U.S. Total Stock Market Index^SM		-6.97%		-34.37%		-1.86%		-1.30%
Fund Category: Morningstar Large-Cap Blend		-6.73%		-35.10%		-2.69%		-1.60%

Fund Expense Ratios³: Investor Shares: 0.53% / Select Shares: 0.38%

Average Annual Total Returns After Tax^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		Since Inception


Investor Shares (6/1/99)
Pre-Liquidation (still own shares)		-7.53%		-34.33%		-2.29%		-1.72%
Post-Liquidation (shares were sold)		-4.30%		-21.89%		-1.71%		-1.30%
Select Shares^® (6/1/99)
Pre-Liquidation (still own shares)		-7.46%		-34.22%		-2.21%		-1.63%
Post-Liquidation (shares were sold)		-4.20%		-21.79%		-1.63%		-1.21%
Fund Category: Morningstar Large-Cap Blend
Pre-Liquidation (still own shares)		-8.75%		-36.63%		-3.74%		n/a
Post-Liquidation (shares were sold)		-5.03%		-23.17%		-2.50%		n/a


¹	Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower.

²	The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 04/30/09 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund.

³	As stated in the prospectus. Reflects the total annual fund operating expenses without the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 5, 2009, the expense limitation for all share classes have been reduced. See Financial Note 4 for more information.

Schwab Equity Index Funds 15

Schwab International Index Fund^®

The Schwab International Index Fund Investor Shares returned -6.00% during the period, compared to the benchmark Schwab International Index, which returned -3.93%. The Schwab International Index is comprised of 350 companies encompassing 21 developed countries. When looking at returns in the fund from a regional perspective, Europe declined the most, returning -5.70%, followed by Asia/Pacific and North America, which returned -1.76% and -0.84%, respectively. In terms of sectors, Health Care and Utilities lost the most, returning -13.49% and -10.02%, respectively. Better performing sectors were led by Materials, up 10.82% and Industrials, up 6.22%. From a price-to-earnings (P/E) standpoint, companies with negative and high price-to-earnings ratios generally underperformed those with mid to low P/E ratios. From a market capitalization perspective, larger companies generally underperformed smaller companies. Better performing securities represented in the fund included Mizuho Financial, BHP Billiton, and Allianz. Securities detracting from performance were led by HSBC Holdings, Volkswagen, and Novartis.

As of 04/30/09:

Style Assessment¹

Country Weightings % of Investments


United Kingdom	18.9%


Japan	18.0%


France	11.1%


Canada	9.2%


Germany	8.8%


Switzerland	8.0%


Australia	6.3%


Spain	4.9%


Italy	3.1%


Netherlands	2.6%


Other Countries	9.1%


Total	100.0%

Statistics


Number of Holdings	350

Weighted Average Market


Cap ($ x 1,000,000)	$45,227


Price/Earnings Ratio (P/E)	13.9


Price/Book Ratio (P/B)	1.3


Portfolio Turnover Rate²	9%

Sector Weightings % of Investments


Financials	25.3%


Energy	11.8%


Consumer Staples	9.2%


Materials	8.8%


Health Care	8.7%


Industrials	8.4%


Consumer Discretionary	8.0%


Telecommunication Services	7.5%


Utilities	6.6%


Information Technology	5.0%


Other	0.7%


Total	100.0%

Top Holdings % of Net Assets³


BP plc	2.0%


Nestle S.A. - Reg’d	1.9%


Total S.A.	1.8%


Toyota Motor Corp.	1.6%


Novartis AG - Reg’d	1.5%


Vodafone Group plc	1.5%


Telefonica S.A.	1.4%


Roche Holding AG	1.4%


HSBC Holdings plc	1.3%


Royal Dutch Shell plc, Class A	1.3%


Total	15.7%

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

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

Source of Sector Classification: S&P and MSCI.

Foreign securities can involve risks such as political and economic instability and currency risk.


¹	Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 04/30/09, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future.

²	Not annualized.

³	This list is not a recommendation of any security by the investment adviser.

16 Schwab Equity Index Funds

Schwab International Index Fund^®

Performance Summary as of 04/30/09

Performance of a Hypothetical
$10,000 Investment in Investor Shares¹

Performance of a Hypothetical
$50,000 Investment in Select Shares¹

Pre-Tax Average Annual Total Returns^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		10 Years


Investor Shares (9/9/93)		-6.00%		-43.25%		0.45%		-0.51%
Select Shares (5/19/97)		-5.86%		-43.15%		0.64%		-0.36%
Benchmark: Schwab International Index^®		-3.93%		-42.81%		1.04%		0.02%
Fund Category: Morningstar Foreign Large-Cap Blend		-3.30%		-43.52%		0.21%		-0.18%

Fund Expense Ratios³: Investor Shares: 0.69% / Select Shares: Net 0.50%; Gross 0.54%

Average Annual Total Returns After Tax^1,2


Fund Class and Inception Date	6 Months		1 Year		5 Years		10 Years


Investor Shares (9/9/93)
Pre-Liquidation (still own shares)		-6.28%		-43.42%		0.03%		-1.00%
Post-Liquidation (shares were sold)		-2.66%		-27.37%		0.46%		-0.57%
Select Shares^® (5/19/97)
Pre-Liquidation (still own shares)		-6.19%		-43.35%		0.17%		-0.90%
Post-Liquidation (shares were sold)		-2.52%		-27.27%		0.61%		-0.46%
Fund Category: Morningstar Foreign Large-Cap Blend
Pre-Liquidation (still own shares)		-6.00%		-45.23%		-1.21%		-1.30%
Post-Liquidation (shares were sold)		-2.80%		-28.60%		-0.13%		-0.45%


*	The Morgan Stanley Capital International Europe, Australasia, Far East Index (Net) (MSCI EAFE Index^®) is a free float-adjusted market capitalization index that is designed to measure market equity performance in 22 developed market countries, excluding the U.S. and Canada. Investors cannot invest directly in any index and index figures do not include trading and management costs.

¹	Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower.

²	The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 4/30/09 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund.

³	As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/11. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 5, 2009, the expense limitation for all share classes have been reduced. See Financial Note 4 for more information.

Schwab Equity Index Funds 17

Fund Expenses (Unaudited)

Examples for a $1,000 Investment

As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.

The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a 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 November 1, 2008 and held through April 30, 2009.

Actual Return lines in the table below provide 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 or share class under the heading entitled “Expenses Paid During Period”.

Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s or share class’ 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, such as redemption fees. If these transactional costs were included, your costs would have been higher.


					Ending
			Beginning		Account Value		Expenses Paid
	Expense Ratio¹		Account Value		(Net of Expenses)		During Period²
	(Annualized)		at 11/1/08		at 4/30/09		11/1/08–4/30/09



Schwab S&P 500 Index Fund*
Investor Shares
Actual Return		0.37%	$	1,000	$	914.80	$	1.76
Hypothetical 5% Return		0.37%	$	1,000	$	1,022.96	$	1.86
Select Shares^®
Actual Return		0.19%	$	1,000	$	916.00	$	0.90
Hypothetical 5% Return		0.19%	$	1,000	$	1,023.85	$	0.95
e.Shares^®
Actual Return		0.22%	$	1,000	$	915.50	$	1.04
Hypothetical 5% Return		0.22%	$	1,000	$	1,023.70	$	1.10


Schwab Institutional Select^® S&P 500 Fund*
Actual Return		0.10%	$	1,000	$	914.50	$	0.47
Hypothetical 5% Return		0.10%	$	1,000	$	1,024.30	$	0.50


Schwab 1000 Index^® Fund*
Investor Shares
Actual Return		0.51%	$	1,000	$	924.30	$	2.43
Hypothetical 5% Return		0.51%	$	1,000	$	1,022.27	$	2.56
Select Shares
Actual Return		0.36%	$	1,000	$	925.00	$	1.72
Hypothetical 5% Return		0.36%	$	1,000	$	1,023.01	$	1.81


Schwab Small-Cap Index Fund^®*
Investor Shares
Actual Return		0.59%	$	1,000	$	937.70	$	2.83
Hypothetical 5% Return		0.59%	$	1,000	$	1,021.87	$	2.96
Select Shares
Actual Return		0.42%	$	1,000	$	937.90	$	2.02
Hypothetical 5% Return		0.42%	$	1,000	$	1,022.71	$	2.11


*	Effective May 5, 2009, the expense limitation for all share classes have been reduced. See Financial Note 4 for more information.


¹	Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights.

²	Expenses for each fund or Share Class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days of the period, and divided by the 365 days of the fiscal year.

18 Schwab Equity Index Funds

Fund Expenses (Unaudited) continued


					Ending
			Beginning		Account Value		Expenses Paid
	Expense Ratio¹		Account Value		(Net of Expenses)		During Period²
	(Annualized)		at 11/1/08		at 4/30/09		11/1/08–4/30/09



Schwab Total Stock Market Index Fund^®*
Investor Shares
Actual Return		0.56%	$	1,000	$	927.70	$	2.68
Hypothetical 5% Return		0.56%	$	1,000	$	1,022.02	$	2.81
Select Shares
Actual Return		0.39%	$	1,000	$	928.70	$	1.87
Hypothetical 5% Return		0.39%	$	1,000	$	1,022.86	$	1.96


Schwab International Index Fund^®*
Investor Shares
Actual Return		0.69%	$	1,000	$	940.00	$	3.32
Hypothetical 5% Return		0.69%	$	1,000	$	1,021.37	$	3.46
Select Shares
Actual Return		0.50%	$	1,000	$	941.40	$	2.41
Hypothetical 5% Return		0.50%	$	1,000	$	1,022.32	$	2.51


*	Effective May 5, 2009, the expense limitation for all share classes have been reduced. See Financial Note 4 for more information.


¹	Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights.

²	Expenses for each fund or Share Class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days of the period, and divided by the 365 days of the fiscal year.

Schwab Equity Index Funds 19

Schwab S&P 500 Index Fund

Financial Statements

Financial Highlights


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Investor Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		15.21			24.17			21.47			18.79			17.61			16.36

Income (loss) from investment operations:
Net investment income (loss)		0.17			0.40			0.38			0.34			0.34			0.23
Net realized and unrealized gains (losses)		(1.46	)		(8.98	)		2.65			2.64			1.14			1.23

Total from investment operations		(1.29	)		(8.58	)		3.03			2.98			1.48			1.46
Less distributions:
Distributions from net investment income		(0.39	)		(0.38	)		(0.33	)		(0.30	)		(0.30	)		(0.21	)

Net asset value at end of period		13.53			15.21			24.17			21.47			18.79			17.61

Total return (%)		(8.52	)¹		(36.02	)		14.29			16.03			8.44			9.03

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.37	²		0.36			0.35			0.36			0.37			0.37
Gross operating expenses		0.37	²		0.36			0.35			0.36			0.40			0.45
Net investment income (loss)		2.71	²		1.89			1.60			1.57			1.74			1.35
Portfolio turnover rate		2	¹		3			2			3			4			3
Net assets, end of period ($ x 1,000,000)		2,209			2,369			3,948			3,685			3,666			3,849


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Select Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		15.28			24.28			21.56			18.88			17.68			16.41

Income (loss) from investment operations:
Net investment income (loss)		0.20			0.44			0.41			0.37			0.36			0.26
Net realized and unrealized gains (losses)		(1.48	)		(9.02	)		2.68			2.65			1.16			1.24

Total from investment operations		(1.28	)		(8.58	)		3.09			3.02			1.52			1.50
Less distributions:
Distributions from net investment income		(0.42	)		(0.42	)		(0.37	)		(0.34	)		(0.32	)		(0.23	)

Net asset value at end of period		13.58			15.28			24.28			21.56			18.88			17.68

Total return (%)		(8.40	)¹		(35.92	)		14.50			16.18			8.66			9.25

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.19	²		0.19			0.19			0.19			0.19			0.19
Gross operating expenses		0.22	²		0.21			0.20			0.21			0.25			0.30
Net investment income (loss)		2.90	²		2.06			1.78			1.74			1.92			1.53
Portfolio turnover rate		2	¹		3			2			3			4			3
Net assets, end of period ($ x 1,000,000)		2,237			2,598			4,345			4,038			3,938			4,119

* Unaudited.

¹ Not annualized.

² Annualized.

20 See financial notes

Schwab S&P 500 Index Fund

Financial Highlights continued


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
e.Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		15.23			24.20			21.50			18.81			17.62			16.37

Income (loss) from investment operations:
Net investment income (loss)		0.28			0.39			0.40			0.35			0.39			0.26
Net realized and unrealized gains (losses)		(1.56	)		(8.95	)		2.67			2.67			1.11			1.21

Total from investment operations		(1.28	)		(8.56	)		3.07			3.02			1.50			1.47
Less distributions:
Distributions from net investment income		(0.42	)		(0.41	)		(0.37	)		(0.33	)		(0.31	)		(0.22	)

Net asset value at end of period		13.53			15.23			24.20			21.50			18.81			17.62

Total return (%)		(8.45	)¹		(35.92	)		14.44			16.25			8.58			9.10

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.22	²		0.21			0.20			0.21			0.24			0.28
Gross operating expenses		0.22	²		0.21			0.20			0.21			0.25			0.30
Net investment income (loss)		2.90	²		2.05			1.76			1.72			1.88			1.44
Portfolio turnover rate		2	¹		3			2			3			4			3
Net assets, end of period ($ x 1,000,000)		134			186			274			241			220			249

* Unaudited.

¹ Not annualized.

² Annualized.

See financial notes 21

Schwab S&P 500 Index Fund

Portfolio Holdings as of April 30, 2009 (Unaudited)

This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds^® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.

In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting Schwab’s website at www.schwab.com/schwabfunds.

Cost

Value

Holdings by Category

($ x 1,000)

.4%

Common Stock

4,840,128

4,553,088

.8%

Short-Term Investments

33,958

100

.2%

Total Investments

4,874,086

4,587,046

.2%

Collateral Invested for Securities on Loan

9,834

.4)%

Other Assets and Liabilities, Net

(16,651

)

100

.0%

Net Assets

4,580,229


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)





Common Stock 99.3% of net assets


Automobiles & Components 0.4%
Other Securities			0.4		20,414


Banks 2.4%
U.S. Bancorp	1,059,232		0.4		19,299
Wells Fargo & Co.	2,486,376		1.1		49,752
Other Securities			0.9		41,919

			2.4		110,970


Capital Goods 7.6%
3M Co.	415,741		0.5		23,947
General Electric Co.	6,237,677		1.7		78,907
United Technologies Corp.	570,169		0.6		27,847
Other Securities			4.8		215,668

			7.6		346,369


Commercial & Professional Supplies 0.7%
Other Securities			0.7		32,099


Consumer Durables & Apparel 1.1%
Other Securities			1.1		49,731


Consumer Services 1.8%
McDonald’s Corp.	671,221		0.8		35,769
Other Securities			1.0		45,362

			1.8		81,131


Diversified Financials 6.3%
Bank of America Corp.	3,837,204		0.8		34,266
JPMorgan Chase & Co.	2,251,616		1.6		74,303
The Charles Schwab Corp. (b)	582,786		0.2		10,770
The Goldman Sachs Group, Inc.	297,977		0.8		38,290
Other Securities			3.0		132,628

			6.4		290,257


Energy 12.5%
Chevron Corp.	1,219,559		1.8		80,613
ConocoPhillips	906,119		0.8		37,151
Exxon Mobil Corp.	3,052,491		4.4		203,510
Occidental Petroleum Corp.	495,524		0.6		27,893
Schlumberger Ltd.	728,459		0.8		35,687
Other Securities			4.1		187,408

			12.5		572,262


Food & Staples Retailing 3.3%
CVS Caremark Corp.	854,940		0.6		27,170
Wal-Mart Stores, Inc.	1,331,643		1.5		67,115
Other Securities			1.2		56,652

			3.3		150,937


Food, Beverage & Tobacco 5.8%
Altria Group, Inc.	1,193,829		0.4		19,495
Kraft Foods, Inc., Class A	882,400		0.4		20,648
PepsiCo, Inc.	927,083		1.0		46,132
Philip Morris International, Inc.	1,214,884		1.0		43,979
The Coca-Cola Co.	1,184,352		1.1		50,986
Other Securities			1.9		82,810

			5.8		264,050


Health Care Equipment & Services 4.3%
Medtronic, Inc.	670,796		0.5		21,466
Other Securities			3.8		175,244

			4.3		196,710


Household & Personal Products 2.8%
The Procter & Gamble Co.	1,774,636		1.9		87,738

22 See financial notes

Schwab S&P 500 Index Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)

Other Securities			0.9		42,545

			2.8		130,283


Insurance 2.3%
Other Securities			2.3		107,518


Materials 3.4%
Monsanto Co.	329,326		0.6		27,956
Other Securities			2.8		128,005

			3.4		155,961


Media 2.6%
Comcast Corp., Class A	1,727,063		0.6		26,700
The Walt Disney Co.	1,111,116		0.5		24,334
Other Securities			1.5		70,138

			2.6		121,172


Pharmaceuticals, Biotechnology & Life Sciences 9.4%
Abbott Laboratories	924,205		0.9		38,678
Amgen, Inc. *	633,298		0.7		30,696
Bristol-Myers Squibb Co.	1,189,853		0.5		22,845
Eli Lilly & Co.	604,055		0.4		19,886
Gilead Sciences, Inc. *	551,294		0.6		25,249
Johnson & Johnson	1,655,330		1.9		86,673
Merck & Co., Inc.	1,272,857		0.7		30,854
Pfizer, Inc.	4,016,667		1.2		53,663
Schering-Plough Corp.	946,326		0.5		21,784
Wyeth	800,282		0.7		33,932
Other Securities			1.3		65,560

			9.4		429,820


Real Estate 1.0%
Other Securities			1.0		46,056


Retailing 3.7%
The Home Depot, Inc.	1,019,607		0.6		26,836
Other Securities			3.1		141,317

			3.7		168,153


Semiconductors & Semiconductor Equipment 2.5%
Intel Corp.	3,333,326		1.2		52,600
Other Securities			1.3		62,370

			2.5		114,970


Software & Services 6.9%
Google, Inc., Class A *	141,971		1.2		56,216
Microsoft Corp.	4,613,998		2.0		93,480
Oracle Corp.	2,331,376		1.0		45,089
Other Securities			2.7		123,617

			6.9		318,402


Technology Hardware & Equipment 8.8%
Apple, Inc. *	532,505		1.5		67,005
Cisco Systems, Inc. *	3,498,668		1.5		67,594
Hewlett-Packard Co.	1,456,373		1.1		52,400
International Business Machines Corp.	802,287		1.8		82,804
QUALCOMM, Inc.	986,578		0.9		41,752
Other Securities			2.0		93,523

			8.8		405,078


Telecommunication Services 3.7%
AT&T, Inc.	3,500,842		2.0		89,692
Verizon Communications, Inc.	1,693,606		1.1		51,384
Other Securities			0.6		27,068

			3.7		168,144


Transportation 2.1%
United Parcel Service, Inc., Class B	596,665		0.7		31,229
Other Securities			1.4		64,829

			2.1		96,058


Utilities 3.9%
Other Securities			3.9		176,543

Total Common Stock (Cost $4,840,128)					4,553,088



Security	Face Amount	% of Net		Value
Rate, Maturity Date	($ x 1,000)	Assets		($ x 1,000)


Short-Term Investments 0.8% of net assets


Commercial Paper & Other Obligations 0.7%
Citibank, New York Time Deposit
0.03%, 05/01/09	28,456		0.7		28,456


U.S. Treasury Obligations 0.1%
Other Securities			0.1		5,502

Total Short-Term Investments (Cost $33,958)					33,958


End of Investments.

See financial notes 23

Schwab S&P 500 Index Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)


Collateral Invested for Securities on Loan 0.2% of net assets
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust	9,834,058		0.2		9,834

Total Collateral Invested for Securities on Loan (Cost $9,834)					9,834


End of collateral invested for securities on loan.

(All dollar amounts are x 1,000)

At 04/30/09 the tax basis cost of the fund’s investments was $4,916,023 and the unrealized appreciation and depreciation were $1,131,129 and ($1,460,106), respectively, with a net unrealized depreciation of ($328,977).


*		Non-income producing security.
(a)		All or a portion of this security is held as collateral for open futures contracts. Please see complete schedule of holdings.
(b)		Issuer is affiliated with the fund’s adviser. Please see complete schedule of holdings.
(c)		All or a portion of this security is on loan. Please see complete schedule of holdings.

ADR — American Depositary Receipt

REIT — Real Estate Investment Trust

In addition to the above, the fund held the following at 04/30/09. All numbers are x1,000 except number of futures contracts.

Number of

Contract

Unrealized

Contracts

Value

Gains

Futures Contract

S & P 500 Index, e-mini, Long, expires 06/19/09

500

21,750

2,605

24 See financial notes

Schwab S&P 500 Index Fund

Statement of

Assets and Liabilities

As of April 30, 2009; unaudited. All numbers are x 1,000 except NAV.




Assets
Investments, at value including securities on loan of $9,229 (cost $4,874,086)		$4,587,046
Collateral invested for securities on loan		9,834
Receivables:
Dividends		6,592
Fund shares sold		3,579
Income from securities on loan		620
Foreign tax reclaims		13
Due from brokers for futures		2
Prepaid expenses	+	15


Total assets		4,607,701


Liabilities
Collateral held for securities on loan		9,834
Payables:
Investment adviser and administrator fees		36
Transfer agent and shareholder services fees		59
Fund shares redeemed		17,314
Trustees’ fees		4
Accrued expenses	+	225


Total liabilities		27,472


Net Assets
Total assets		4,607,701
Total liabilities	−	27,472


Net assets		$4,580,229
Net Assets by Source
Capital received from investors		5,724,134
Net investment income not yet distributed		35,881
Net realized capital losses		(895,351	)
Net unrealized capital losses		(284,435	)

Net Asset Value (NAV) by Shares Class


			Shares
Share Class	Net Assets	¸	Outstanding	=	NAV

Investor Shares	$2,209,167		163,235			$13.53
Select Shares	$2,236,618		164,751			$13.58
e.Shares	$134,444		9,936			$13.53

See financial notes 25

Schwab S&P 500 Index Fund

Statement of

Operations

For November 1, 2008 through April 30, 2009; unaudited. All numbers are x 1,000.




Investment Income
Dividends (including $71 from affiliated issuer and net of foreign withholding tax of $4)		$66,897
Interest		15
Securities on loan	+	793


Total investment income		67,705


Net Realized Gains and Losses
Net realized gains on investments		318
Net realized losses on futures contracts	+	(9,155	)


Net realized losses		(8,837	)


Net Unrealized Gains and Losses
Net unrealized losses on investments		(498,150	)
Net unrealized losses on futures contracts	+	(740	)


Net unrealized losses		(498,890	)


Expenses
Investment adviser and administrator fees		2,121
Transfer agent and shareholder service fees:
Investor Shares		2,591
Select Shares		1,087
e.Shares		68
Shareholder reports		181
Portfolio accounting fees		76
Registration fees		71
Custodian fees		66
Trustees’ fees		35
Professional fees		33
Interest expense		20
Other expenses	+	77


Total expenses		6,426
Expense reduction by adviser and Schwab	−	358


Net expenses		6,068


Increase (Decrease) in Net Assets from Operations
Total investment income		67,705
Net expenses	−	6,068


Net investment income		61,637
Net realized losses		(8,837	)
Net unrealized losses	+	(498,890	)


Decrease in net assets from operations		($446,090	)

26 See financial notes

Schwab S&P 500 Index Fund

Statements of

Changes in Net Assets

For the current and prior report periods. All numbers are x 1,000.
Figures for the current period are unaudited.




Operations


		11/1/08-4/30/09			11/1/07-10/31/08
Net investment income			$61,637			$141,674
Net realized losses			(8,837	)		(48,887	)
Net unrealized losses	+		(498,890	)		(3,050,324	)


Decrease in net assets from operations			(446,090	)		(2,957,537	)


Distributions to Shareholders
Distributions from net investment income
Investor Shares			61,219			61,410
Select Shares			70,329			74,254
e.Shares	+		4,259			4,519


Total distributions from net investment income			$135,807			$140,183

Transactions in Fund Shares


		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			VALUE			SHARES			VALUE


Shares Sold
Investor Shares			16,317			$212,008			20,489			$401,669
Select Shares			17,563			229,499			23,870			470,078
e.Shares	+		2,134			28,276			4,609			79,000


Total shares sold			36,014			$469,783			48,968			$950,747


Shares Reinvested
Investor Shares			4,242			$58,541			2,585			$58,820
Select Shares			4,510			62,414			2,885			65,826
e.Shares	+		272			3,759			181			4,127


Total shares reinvested			9,024			$124,714			5,651			$128,773


Shares Redeemed
Investor Shares			(13,038	)		($166,546	)		(30,693	)		($612,594	)
Select Shares			(27,370	)		(358,633	)		(35,683	)		(704,340	)
e.Shares	+		(4,705	)		(60,794	)		(3,896	)		(78,278	)


Total shares redeemed			(45,113	)		($585,973	)		(70,272	)		($1,395,212	)

Net transactions in fund shares			(75	)		$8,524			(15,653	)		($315,692	)


Shares Outstanding and Net Assets
		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			NET ASSETS			SHARES			NET ASSETS
Beginning of period			337,997			$5,153,602			353,650			$8,567,014
Total decrease	+		(75	)		(573,373	)		(15,653	)		(3,413,412	)


End of period			337,922			$4,580,229			337,997			$5,153,602


Net investment income not yet distributed						$35,881						$110,051

See financial notes 27

Schwab Institutional Select^® S&P 500 Fund

Financial Statements

Financial Highlights


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		7.79			12.39			10.99			9.57			8.95			8.30

Income (loss) from investment operations:
Net investment income (loss)		0.09			0.21			0.21			0.16			0.15			0.13
Net realized and unrealized gains (losses)		(0.75	)		(4.60	)		1.36			1.39			0.62			0.64

Total from investment operations		(0.66	)		(4.39	)		1.57			1.55			0.77			0.77
Less distributions:
Distributions from net investment income		(0.21	)		(0.21	)		(0.17	)		(0.13	)		(0.15	)		(0.12	)

Net asset value at end of period		6.92			7.79			12.39			10.99			9.57			8.95

Total return (%)		(8.55	)¹		(36.00	)		14.43			16.39			8.64			9.36

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.10	²		0.10			0.10			0.10			0.10			0.15
Gross operating expenses		0.23	²		0.22			0.22			0.28			0.33			0.35
Net investment income (loss)		2.87	²		2.17			1.89			1.84			1.82			1.56
Portfolio turnover rate		1	¹		1			1			2			3			3
Net assets, end of period ($ x 1,000,000)		2,491			2,385			3,103			2,080			1,246			348

* Unaudited.

¹ Not annualized.

² Annualized.

28 See financial notes

Schwab Institutional Select S&P 500 Fund

Portfolio Holdings as of April 30, 2009 (Unaudited)

This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date. The remaining securities held by the fund are grouped as Other Securities in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds^® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.

Cost

Value

Holdings by Category

($ x 1,000)

.9%

Common Stock

3,258,475

2,413,924

.2%

Short-Term Investments

54,287

.1%

Total Investments

3,312,762

2,468,211

.2%

Collateral Invested for Securities on Loan

4,286

.7%

Other Assets and Liabilities, Net

18,372

100

.0%

Net Assets

2,490,869


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)





Common Stock 96.9% of net assets


Automobiles & Components 0.5%
Other Securities			0.5		12,155


Banks 2.4%
U.S. Bancorp	555,696		0.4		10,125
Wells Fargo & Co.	1,350,433		1.1		27,022
Other Securities			0.9		21,820

			2.4		58,967


Capital Goods 7.3%
3M Co.	219,478		0.5		12,642
General Electric Co.	3,321,675		1.7		42,019
United Technologies Corp.	298,166		0.6		14,562
Other Securities			4.5		112,122

			7.3		181,345


Commercial & Professional Supplies 0.7%
Other Securities			0.7		17,377


Consumer Durables & Apparel 1.0%
Other Securities			1.0		25,549


Consumer Services 1.7%
McDonald’s Corp.	355,817		0.8		18,962
Other Securities			0.9		24,276

			1.7		43,238


Diversified Financials 6.1%
Bank of America Corp.	2,033,607		0.7		18,160
JPMorgan Chase & Co.	1,193,415		1.6		39,383
The Charles Schwab Corp. (a)	299,895		0.2		5,542
The Goldman Sachs Group, Inc.	159,892		0.8		20,546
Other Securities			2.8		69,122

			6.1		152,753


Energy 12.1%
Chevron Corp.	632,875		1.7		41,833
ConocoPhillips	467,871		0.8		19,183
Exxon Mobil Corp.	1,574,407		4.2		104,966
Occidental Petroleum Corp.	255,926		0.6		14,406
Schlumberger Ltd.	378,380		0.7		18,537
Other Securities			4.1		101,942

			12.1		300,867


Food & Staples Retailing 3.2%
CVS Caremark Corp.	464,011		0.6		14,746
Wal-Mart Stores, Inc.	711,059		1.4		35,837
Other Securities			1.2		29,742

			3.2		80,325


Food, Beverage & Tobacco 5.7%
Altria Group, Inc.	647,862		0.4		10,580
Kraft Foods, Inc., Class A	461,554		0.4		10,800
PepsiCo, Inc.	495,756		1.0		24,669
Philip Morris International, Inc.	633,262		0.9		22,924
The Coca-Cola Co.	633,176		1.1		27,258
Other Securities			1.9		45,831

			5.7		142,062


Health Care Equipment & Services 4.1%
Medtronic, Inc.	349,443		0.4		11,182
Other Securities			3.7		92,044

			4.1		103,226


Household & Personal Products 2.7%
The Procter & Gamble Co.	925,554		1.8		45,760

See financial notes 29

Schwab Institutional Select S&P 500 Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)

Other Securities			0.9		21,998

			2.7		67,758


Insurance 2.3%
Other Securities			2.3		57,311


Materials 3.3%
Monsanto Co.	174,574		0.6		14,820
Other Securities			2.7		68,226

			3.3		83,046


Media 2.6%
Comcast Corp., Class A	915,401		0.6		14,152
The Walt Disney Co.	587,267		0.5		12,861
Other Securities			1.5		37,156

			2.6		64,169


Pharmaceuticals, Biotechnology & Life Sciences 9.2%
Abbott Laboratories	486,581		0.8		20,363
Amgen, Inc. *	330,261		0.6		16,008
Bristol-Myers Squibb Co.	623,911		0.5		11,979
Eli Lilly & Co.	318,468		0.4		10,484
Gilead Sciences, Inc. *	287,381		0.5		13,162
Johnson & Johnson	874,095		1.8		45,768
Merck & Co., Inc.	663,486		0.6		16,083
Pfizer, Inc.	2,119,005		1.1		28,310
Schering-Plough Corp.	512,575		0.5		11,800
Wyeth	419,782		0.7		17,799
Other Securities			1.7		36,819

			9.2		228,575


Real Estate 1.0%
Other Securities			1.0		25,443


Retailing 3.6%
The Home Depot, Inc.	540,343		0.5		14,222
Other Securities			3.1		75,496

			3.6		89,718


Semiconductors & Semiconductor Equipment 2.5%
Intel Corp.	1,771,579		1.1		27,955
Other Securities			1.4		33,583

			2.5		61,538


Software & Services 6.8%
Google, Inc., Class A *	75,787		1.2		30,009
Microsoft Corp.	2,427,833		1.9		49,188
Oracle Corp.	1,213,310		0.9		23,465
Other Securities			2.8		66,752

			6.8		169,414


Technology Hardware & Equipment 8.6%
Apple, Inc. *	282,135		1.4		35,501
Cisco Systems, Inc. *	1,846,360		1.4		35,672
Hewlett-Packard Co.	758,335		1.1		27,285
International Business Machines Corp.	424,403		1.8		43,803
QUALCOMM, Inc.	526,787		0.9		22,294
Other Securities			2.0		49,677

			8.6		214,232


Telecommunication Services 3.6%
AT&T, Inc.	1,851,394		1.9		47,433
Verizon Communications, Inc.	898,272		1.1		27,254
Other Securities			0.6		14,012

			3.6		88,699


Transportation 2.1%
United Parcel Service, Inc., Class B	314,953		0.7		16,485
Other Securities			1.4		35,388

			2.1		51,873


Utilities 3.8%
Other Securities			3.8		94,284

Total Common Stock (Cost $3,258,475)					2,413,924





Security	Face Amount	% of Net		Value
Rate, Maturity Date	($ x 1,000)	Assets		($ x 1,000)


Short-Term Investments 2.2% of net assets


Commercial Paper & Other Obligation 1.7%
Citibank, New York Time Deposit
0.03%, 05/01/09	42,792		1.7		42,792


U.S. Treasury Obligations 0.5%
Other Securities			0.5		11,495

Total Short-Term Investments (Cost $54,287)					54,287


End of Investments.

30 See financial notes

Schwab Institutional Select S&P 500 Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)


Collateral Invested for Securities on Loan 0.2% of net assets
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust	4,286,285		0.2		4,286

Total Collateral Invested for Securities on Loan (Cost $4,286)					4,286


(All dollar amounts are x 1,000)

At 04/30/09, the tax basis cost of the fund’s investments was $3,324,040, and the unrealized appreciation and depreciation were $69,320 and ($925,149), respectively, with a net unrealized depreciation of ($855,829).


*		Non-income producing security.
(a)		Issuer is affiliated with the fund’s adviser.
(b)		All or a portion of this security is held as collateral for open futures contracts. Please see complete schedule of holdings.
(c)		All or a portion of this security is on loan. Please see complete schedule of holdings.

In addition to the above, the fund held the following at 04/30/09. All numbers are x 1,000 except number of futures contracts.

Number of

Contract

Unrealized

Contracts

Value

Gains

Futures Contract

S & P 500 Index, e-mini, Long, expires 06/19/09

1,700

73,950

6,862

See financial notes 31

Schwab Institutional Select S&P 500 Fund

Statement of

Assets and Liabilities

As of April 30, 2009; unaudited. All numbers are x 1,000 except NAV.




Assets
Investments, at value including securities on loan of $4,023 (cost $3,312,762)		$2,468,211
Collateral invested for securities on loan		4,286
Receivables:
Fund shares sold		21,110
Dividends		3,393
Income from securities on loan		270
Due from brokers for futures		33
Foreign tax reclaims		6
Prepaid expenses	+	7


Total assets		2,497,316


Liabilities
Collateral held for securities on loan		4,286
Payables:
Transfer agent and shareholder services fees		15
Fund shares redeemed		2,025
Trustees’ fees		2
Accrued expenses	+	119


Total liabilities		6,447


Net Assets
Total assets		2,497,316
Total liabilities	−	6,447


Net assets		$2,490,869
Net Assets by Source
Capital received from investors		3,475,720
Net investment income not yet distributed		18,329
Net realized capital losses		(165,491	)
Net unrealized capital losses		(837,689	)

Net Asset Value (NAV)


		Shares
Net Assets	¸	Outstanding	=	NAV

$2,490,869		359,709			$6.92

32 See financial notes

Schwab Institutional Select S&P 500 Fund

Statement of

Operations

For November 1, 2008 through April 30, 2009; unaudited. All numbers are x 1,000.




Investment Income
Dividends (including of $31 from affiliated issuer and net of foreign withholding tax of $2)		$31,420
Interest		28
Securities on loan	+	350


Total investment income		31,798


Net Realized Gains and Losses
Net realized losses on investments		(10,213	)
Net realized losses on futures contracts	+	(20,123	)


Net realized losses		(30,336	)


Net Unrealized Gains and Losses
Net unrealized losses on investments		(184,501	)
Net unrealized gains on futures contracts	+	13,345


Net unrealized losses		(171,156	)


Expenses
Investment adviser and administrator fees		1,113
Transfer agent and shareholder service fees		1,071
Registration fees		108
Portfolio accounting fees		45
Custodian fees		37
Shareholder reports		25
Professional fees		20
Trustees’ fees		18
Other expenses	+	29


Total expenses		2,466
Expense reduction by adviser and Schwab	−	1,395


Net expenses		1,071


Increase in Net Assets from Operations
Total investment income		31,798
Net expenses	−	1,071


Net investment income		30,727
Net realized losses		(30,336	)
Net unrealized losses	+	(171,156	)


Decrease in net assets from operations		($170,765	)

See financial notes 33

Schwab Institutional Select S&P 500 Fund

Statements of

Changes in Net Assets

For the current and prior report periods. All numbers are x 1,000.
Figures for current period are unaudited.




Operations


		11/1/08-4/30/09			11/1/07-10/31/08
Net investment income			$30,727			$63,096
Net realized losses			(30,336	)		(85,977	)
Net unrealized losses	+		(171,156	)		(1,206,648	)


Decrease in net assets from operations			(170,765	)		(1,229,529	)


Distributions to Shareholders
Distributions from net investment income			$62,797			$53,061

Transactions in Fund Shares


		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			VALUE			SHARES			VALUE
Shares Sold			117,001			$758,544			135,006			$1,356,798
Shares Reinvested			8,016			56,596			4,137			48,190
Shares Redeemed	+		(71,243	)		(475,394	)		(83,668	)		(840,651	)


Net transactions in fund shares			53,774			$339,746			55,475			$564,337


Shares Outstanding and Net Assets
		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			NET ASSETS			SHARES			NET ASSETS
Beginning of period			305,935			$2,384,685			250,460			$3,102,938
Total increase or decrease	+		53,774			106,184			55,475			(718,253	)


End of period			359,709			$2,490,869			305,935			$2,384,685


Net investment income not yet distributed						$18,329						$50,399

34 See financial notes

Schwab 1000 Index^® Fund

Financial Statements

Financial Highlights


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Investor Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		28.69			45.81			40.40			35.31			32.54			30.25

Income (loss) from investment operations:
Net investment income (loss)		0.31	¹		0.66	¹		0.60	¹		0.50	¹		0.55			0.37
Net realized and unrealized gains (losses)		(2.48	)		(17.13	)		5.33			5.05			2.70			2.26

Total from investment operations		(2.17	)		(16.47	)		5.93			5.55			3.25			2.63
Less distributions:
Distributions from net investment income		(0.64	)		(0.62	)		(0.52	)		(0.46	)		(0.48	)		(0.34	)
Distributions from net realized gains		—			(0.03	)		—			—			—			—

Total distributions		(0.64	)		(0.65	)		(0.52	)		(0.46	)		(0.48	)		(0.34	)

Net asset value at end of period		25.88			28.69			45.81			40.40			35.31			32.54

Total return (%)		(7.57	)²		(36.43	)		14.81			15.84			10.04			8.78

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.51	³		0.49			0.48			0.49			0.50			0.50
Gross operating expenses		0.51	³		0.49			0.48			0.49			0.50			0.50
Net investment income (loss)		2.51	³		1.68			1.39			1.34			1.49			1.15
Portfolio turnover rate		3	²		4			6			5			6			5
Net assets, end of period ($ x 1,000,000)		1,983			2,260			3,974			3,918			4,166			4,258


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Select Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		28.71			45.84			40.43			35.34			32.56			30.27

Income (loss) from investment operations:
Net investment income (loss)		0.33	¹		0.71	¹		0.66	¹		0.56	¹		0.56			0.42
Net realized and unrealized gains (losses)		(2.48	)		(17.12	)		5.34			5.04			2.74			2.25

Total from investment operations		(2.15	)		(16.41	)		6.00			5.60			3.30			2.67
Less distributions:
Distributions from net investment income		(0.70	)		(0.69	)		(0.59	)		(0.51	)		(0.52	)		(0.38	)
Distributions from net realized gains		—			(0.03	)		—			—			—			—

Total distributions		(0.70	)		(0.72	)		(0.59	)		(0.51	)		(0.52	)		(0.38	)

Net asset value at end of period		25.86			28.71			45.84			40.43			35.34			32.56

Total return (%)		(7.50	)²		(36.33	)		14.98			16.01			10.21			8.90

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.36	³		0.34			0.33			0.34			0.35			0.35
Gross operating expenses		0.36	³		0.34			0.33			0.34			0.35			0.35
Net investment income (loss)		2.66	³		1.83			1.54			1.48			1.63			1.30
Portfolio turnover rate		3	²		4			6			5			6			5
Net assets, end of period ($ x 1,000,000)		1,729			2,021			3,311			2,924			2,328			2,138

* Unaudited.

¹ Calculated based on the average shares outstanding during the period.

² Not annualized.

³ Annualized.

See financial notes 35

Schwab 1000 Index Fund

Portfolio Holdings as of April 30, 2009 (Unaudited)


				Cost		Value
Holdings by Category				($ x 1,000)		($ x 1,000)


	99	.7%	Common Stock		2,561,394		3,699,003
	0	.2%	Foreign Common Stock		7,039		5,414
		—%	Short-Term Investments		1,538		1,538

	99	.9%	Total Investments		2,569,971		3,705,955
	0	.2%	Collateral Invested for Securities on Loan		7,838		7,838
	(0	.1)%	Other Assets and Liabilities, Net				(2,099	)

	100	.0%	Net Assets				3,711,694


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)





Common Stock 99.7% of net assets


Automobiles & Components 0.5%
Other Securities			0.5		18,973


Banks 2.5%
U.S. Bancorp	746,805		0.4		13,607
Wells Fargo & Co.	1,796,396		1.0		35,946
Other Securities			1.1		44,390

			2.5		93,943


Capital Goods 7.9%
3M Co.	294,934		0.5		16,988
General Electric Co.	4,453,122		1.5		56,332
United Technologies Corp.	402,863		0.5		19,676
Other Securities			5.4		199,041

			7.9		292,037


Commercial & Professional Supplies 0.9%
Other Securities			0.9		33,479


Consumer Durables & Apparel 1.1%
Other Securities			1.1		40,265


Consumer Services 1.9%
McDonald’s Corp.	475,036		0.7		25,315
Other Securities			1.2		46,020

			1.9		71,335


Diversified Financials 5.8%
Bank of America Corp.	2,731,741		0.7		24,394
JPMorgan Chase & Co.	1,592,978		1.4		52,568
The Charles Schwab Corp. (a)	403,065		0.2		7,449
The Goldman Sachs Group, Inc.	212,932		0.7		27,362
Other Securities			2.8		104,788

			5.8		216,561


Energy 12.4%
Chevron Corp.	858,277		1.5		56,732
ConocoPhillips	630,366		0.7		25,845
Exxon Mobil Corp.	2,105,122		3.8		140,348
Occidental Petroleum Corp.	343,316		0.5		19,325
Schlumberger Ltd.	507,106		0.7		24,843
Other Securities			5.2		192,089

			12.4		459,182


Food & Staples Retailing 2.9%
CVS Caremark Corp.	608,511		0.5		19,338
Wal-Mart Stores, Inc.	950,927		1.3		47,927
Other Securities			1.1		41,381

			2.9		108,646


Food, Beverage & Tobacco 5.3%
Altria Group, Inc.	876,965		0.4		14,321
Kraft Foods, Inc., Class A	624,564		0.4		14,615
PepsiCo, Inc.	658,587		0.9		32,771
Philip Morris International, Inc.	849,065		0.8		30,736
The Coca-Cola Co.	845,854		1.0		36,414
Other Securities			1.8		66,460

			5.3		195,317


Health Care Equipment & Services 4.4%
Medtronic, Inc.	472,968		0.4		15,135
Other Securities			4.0		148,789

			4.4		163,924


Household & Personal Products 2.6%
The Procter & Gamble Co.	1,255,619		1.7		62,078

36 See financial notes

Schwab 1000 Index Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)

Other Securities			0.9		35,315

			2.6		97,393


Insurance 3.4%
Berkshire Hathaway, Inc., Class A *	273		0.7		25,662
Other Securities			2.7		101,829

			3.4		127,491


Materials 3.7%
Monsanto Co.	232,234		0.5		19,714
Other Securities			3.2		119,144

			3.7		138,858


Media 2.8%
Comcast Corp., Class A	1,225,703		0.5		18,949
The Walt Disney Co.	788,652		0.5		17,272
Other Securities			1.8		65,763

			2.8		101,984


Pharmaceuticals, Biotechnology & Life Sciences 8.7%
Abbott Laboratories	654,946		0.7		27,409
Amgen, Inc. *	440,660		0.6		21,359
Bristol-Myers Squibb Co.	839,339		0.4		16,115
Eli Lilly & Co.	424,771		0.4		13,983
Gilead Sciences, Inc. *	386,112		0.5		17,684
Johnson & Johnson	1,175,467		1.7		61,547
Merck & Co., Inc.	897,085		0.6		21,745
Pfizer, Inc.	2,845,010		1.0		38,009
Schering-Plough Corp.	686,616		0.4		15,806
Wyeth	564,533		0.7		23,936
Other Securities			1.7		66,251

			8.7		323,844


Real Estate 1.5%
Other Securities			1.5		56,519


Retailing 3.7%
The Home Depot, Inc.	720,115		0.5		18,954
Other Securities			3.2		117,133

			3.7		136,087


Semiconductors & Semiconductor Equipment 2.5%
Intel Corp.	2,364,780		1.0		37,316
Other Securities			1.5		54,141

			2.5		91,457


Software & Services 7.3%
Google, Inc., Class A *	101,561		1.1		40,215
Microsoft Corp.	3,258,938		1.8		66,026
Oracle Corp.	1,661,910		0.9		32,141
Other Securities			3.5		132,493

			7.3		270,875


Technology Hardware & Equipment 8.2%
Apple, Inc. *	377,914		1.3		47,553
Cisco Systems, Inc. *	2,484,615		1.3		48,003
Hewlett-Packard Co.	1,044,068		1.0		37,566
International Business Machines Corp.	572,040		1.6		59,040
QUALCOMM, Inc.	701,878		0.8		29,703
Other Securities			2.2		81,886

			8.2		303,751


Telecommunication Services 3.5%
AT&T, Inc.	2,499,177		1.7		64,029
Verizon Communications, Inc.	1,206,237		1.0		36,597
Other Securities			0.8		27,443

			3.5		128,069


Transportation 2.1%
United Parcel Service, Inc., Class B	422,075		0.6		22,091
Other Securities			1.5		53,678

			2.1		75,769


Utilities 4.1%
Other Securities			4.1		153,244

Total Common Stock (Cost $2,561,394)					3,699,003




Foreign Common Stock 0.2% of net assets


Bermuda 0.2%


Capital Goods 0.1%
Other Securities			0.1		1,397


Diversified Financials 0.1%
Other Securities			0.1		2,866


Insurance 0.0%
Other Securities			0.0		923


Software & Services 0.0%
Other Securities			0.0		100

			0.2		5,286


British Virgin Islands 0.0%


Transportation 0.0%
Other Securities			0.0		128

Total Foreign Common Stock (Cost $7,039)					5,414

See financial notes 37

Schwab 1000 Index Fund

Portfolio Holdings (Unaudited) continued


Security	Face Amount	% of Net		Value
Rate, Maturity Date	($ x 1,000)	Assets		($ x 1,000)


Short-Term Investments 0.0% of net assets


U.S. Treasury Obligations 0.0%
Other Securities			0.0		1,538

End of Investments.


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)


Collateral Invested for Securities on Loan 0.2% of net assets
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust	7,837,902		0.2		7,838
Total Collateral Invested for Securities on Loan (Cost $7,838)					7,838

End of collateral invested for securities on loan.

(All dollar amounts are x 1,000)

At 04/30/09, the tax basis cost of the fund’s investments was $2,545,459 and the unrealized appreciation and depreciation were $1,606,252 and ($445,756), respectively, with a net unrealized appreciation of $1,160,496.


*		Non-income producing security.
(a)		Issuer is affiliated with the fund’s adviser.
(b)		All or a portion of this security is held as collateral for open futures contracts. Please see complete schedule of holdings.
(c)		All or a portion of this security is on loan. Please see complete schedule of holdings.

REIT — Real Estate Investment Trust

In addition to the above, the fund held the following at 04/30/09. All numbers are x1,000 except number of futures contracts.

Number of

Contract

Unrealized

Contracts

Value

Gains

Futures Contract

S & P 500 Index, e-mini, Long, expires 06/19/09

3,263

215

38 See financial notes

Schwab 1000 Index Fund

Statement of

Assets and Liabilities

As of April 30, 2009; unaudited. All numbers are x 1,000 except NAV.




Assets
Investments, at value including securities on loan of $7,356 (cost $2,569,971)		$3,705,955
Collateral invested for securities on loan		7,838
Receivables:
Dividends		5,134
Fund shares sold		3,076
Income from securities on loan		452
Foreign tax reclaims		15
Interest		7
Due from brokers for futures		3
Prepaid expenses	+	13


Total assets		3,722,493


Liabilities
Collateral held for securities on loan		7,838
Payables:
Investments bought		15
Investment adviser and administrator fees		70
Transfer agent and shareholder services fees		54
Fund shares redeemed		2,548
Payable to custodian		81
Trustees’ fees		9
Accrued expenses	+	184


Total liabilities		10,799


Net Assets
Total assets		3,722,493
Total liabilities	−	10,799


Net assets		$3,711,694
Net Assets by Source
Capital received from investors		2,516,011
Net investment income not yet distributed		27,500
Net realized capital gains		31,984
Net unrealized capital gains		1,136,199

Net Asset Value (NAV) by Shares Class


			Shares
Share Class	Net Assets	¸	Outstanding	=	NAV

Investor Shares	$1,983,041		76,616			$25.88
Select Shares	$1,728,653		66,850			$25.86

See financial notes 39

Schwab 1000 Index Fund

Statement of

Operations

For November 1, 2008 through April 30, 2009; unaudited. All numbers are x 1,000.




Investment Income
Dividends (including $51 from affiliated issuer and net of foreign withholding tax of $11)		$53,978
Interest		15
Securities on loan	+	595


Total investment income		54,588


Net Realized Gains and Losses
Net realized gains on investments		11,830
Net realized gains on affiliated issuer		130
Net realized gains on futures contracts	+	640


Net realized gains		12,600


Net Unrealized Gains and Losses
Net unrealized losses on investments		(403,449	)
Net unrealized losses on futures contracts	+	(172	)


Net unrealized losses		(403,621	)


Expenses
Investment adviser and administrator fees		4,177
Transfer agent and shareholder service fees:
Investor Shares		2,393
Select Shares		851
Shareholder reports		167
Portfolio accounting fees		70
Registration fees		54
Trustees’ fees		46
Custodian fees		45
Professional fees		33
Interest expense		11
Other expenses	+	37


Total expenses		7,884
Expense reduction by adviser and Schwab	−	1


Net expenses		7,883


Increase (Decrease) in Net Assets from Operations
Total investment income		54,588
Net expenses	−	7,883


Net investment income		46,705
Net realized gains		12,600
Net unrealized losses	+	(403,621	)


Decrease in net assets from operations		($344,316	)

40 See financial notes

Schwab 1000 Index Fund

Statements of

Changes in Net Assets

For the current and prior report periods; All numbers are x 1,000.
Figures for the current period are unaudited.




Operations


		11/1/08-4/30/09			11/1/07-10/31/08
Net investment income			$46,705			$106,353
Net realized gains			12,600			16,203
Net unrealized losses	+		(403,621	)		(2,658,720	)


Decrease in net assets from operations			(344,316	)		(2,536,164	)


Distributions to Shareholders
Distributions from net investment income
Investor Shares			50,004			52,859
Select Shares	+		49,147			49,349


Total distributions from net investment income			99,151			102,208


Distributions from net realized gains
Investor Shares			—			2,740
Select Shares	+		—			2,293


Total distributions from net realized gains			—			5,033

Total distributions			$99,151			$107,241

Transactions in Fund Shares


		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			VALUE			SHARES			VALUE


Shares Sold
Investor Shares			3,319			$81,752			5,772			$217,822
Select Shares	+		7,843			196,422			10,059			373,493


Total shares sold			11,162			$278,174			15,831			$591,315


Shares Reinvested
Investor Shares			1,767			$45,998			1,186			$51,269
Select Shares	+		1,524			39,629			974			42,080


Total shares reinvested			3,291			$85,627			2,160			$93,349


Shares Redeemed
Investor Shares			(7,220	)		($174,740	)		(14,962	)		($569,361	)
Select Shares	+		(12,925	)		(314,886	)		(12,842	)		(476,106	)


Total shares redeemed			(20,145	)		($489,626	)		(27,804	)		($1,045,467	)

Net transactions in fund shares			(5,692	)		($125,825	)		(9,813	)		($360,803	)


Shares Outstanding and Net Assets
		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			NET ASSETS			SHARES			NET ASSETS
Beginning of period			149,158			$4,280,986			158,971			$7,285,194
Total decrease	+		(5,692	)		(569,292	)		(9,813	)		(3,004,208	)


End of period			143,466			$3,711,694			149,158			$4,280,986


Net investment income not yet distributed						$27,500						$79,946

See financial notes 41

Schwab Small-Cap Index Fund^®

Financial Statements

Financial Highlights


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Investor Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		13.82			25.30			25.92			22.31			19.92			18.22

Income (loss) from investment operations:
Net investment income (loss)		0.11	¹		0.30	¹		0.32	¹		0.23	¹		0.14			0.13
Net realized and unrealized gains (losses)		(0.99	)		(7.88	)		2.35			3.67			2.38			1.68

Total from investment operations		(0.88	)		(7.58	)		2.67			3.90			2.52			1.81
Less distributions:
Distributions from net investment income		(0.26	)		(0.28	)		(0.24	)		(0.14	)		(0.13	)		(0.11	)
Distributions from net realized gains		—			(3.62	)		(3.05	)		(0.15	)		—			—

Total distributions		(0.26	)		(3.90	)		(3.29	)		(0.29	)		(0.13	)		(0.11	)

Net asset value at end of period		12.68			13.82			25.30			25.92			22.31			19.92

Total return (%)		(6.23	)²		(34.60	)		11.16			17.62			12.66			9.98

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.59	³		0.57			0.57			0.57			0.58			0.59
Gross operating expenses		0.60	³		0.57			0.57			0.57			0.58			0.59
Net investment income (loss)		1.95	³		1.62			1.28			0.94			0.57			0.66
Portfolio turnover rate		25	²		64			31			29			40			39
Net assets, end of period ($ x 1,000,000)		389			448			756			771			823			869


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Select Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		13.85			25.35			25.97			22.36			19.96			18.25

Income (loss) from investment operations:
Net investment income (loss)		0.12	¹		0.33	¹		0.35	¹		0.27	¹		0.17			0.17
Net realized and unrealized gains (losses)		(1.00	)		(7.89	)		2.36			3.67			2.39			1.68

Total from investment operations		(0.88	)		(7.56	)		2.71			3.94			2.56			1.85
Less distributions:
Distributions from net investment income		(0.29	)		(0.32	)		(0.28	)		(0.18	)		(0.16	)		(0.14	)
Distributions from net realized gains		—			(3.62	)		(3.05	)		(0.15	)		—			—

Total distributions		(0.29	)		(3.94	)		(3.33	)		(0.33	)		(0.16	)		(0.14	)

Net asset value at end of period		12.68			13.85			25.35			25.97			22.36			19.96

Total return (%)		(6.21	)²		(34.48	)		11.35			17.78			12.86			10.16

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.42	³		0.42			0.42			0.42			0.41			0.42
Gross operating expenses		0.45	³		0.42			0.42			0.42			0.43			0.44
Net investment income (loss)		2.12	³		1.78			1.43			1.10			0.74			0.82
Portfolio turnover rate		25	²		64			31			29			40			39
Net assets, end of period ($ x 1,000,000)		576			628			969			889			795			761

* Unaudited.

¹ Calculated based on the average shares outstanding during the period.

² Not annualized.

³ Annualized.

42 See financial notes

Schwab Small-Cap Index Fund

Portfolio Holdings as of April 30, 2009 (Unaudited)


				Cost		Value
Holdings by Category				($ x 1,000)		($ x 1,000)


	98	.7%	Common Stock		1,185,598		953,092
	1	.2%	Foreign Common Stock		18,351		11,413
	0	.1%	Preferred Stock		1,145		625
		—%	Rights		44		17
	0	.3%	Short-Term Investment		3,303		3,303

	100	.3%	Total Investments		1,208,441		968,450
	(0	.3)%	Other Assets and Liabilities, Net				(2,472	)

	100	.0%	Net Assets				965,978


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)





Common Stock 98.7% of net assets


Automobiles & Components 0.5%
Other Securities			0.5		4,893


Banks 7.0%
Washington Federal, Inc.	171,039		0.2		2,220
Other Securities			6.8		65,077

			7.0		67,297


Capital Goods 10.0%
EMCOR Group, Inc. *	117,104		0.3		2,435
Gardner Denver, Inc. *	87,512		0.2		2,330
Nordson Corp.	61,043		0.2		2,215
Regal-Beloit Corp.	62,547		0.3		2,541
Watsco, Inc.	55,882		0.2		2,400
Other Securities			8.8		84,518

			10.0		96,439


Commercial & Professional Supplies 3.7%
Other Securities			3.7		36,100


Consumer Durables & Apparel 3.8%
Jarden Corp. *	138,808		0.3		2,790
Phillips-Van Heusen Corp.	92,100		0.3		2,674
The Warnaco Group, Inc. *	92,763		0.3		2,675
Wolverine World Wide, Inc.	98,936		0.2		2,061
Other Securities			2.7		26,272

			3.8		36,472


Consumer Services 4.8%
Bally Technologies, Inc. *	98,062		0.3		2,567
Jack in the Box, Inc. *	101,588		0.3		2,498
WMS Industries, Inc. *	89,551		0.3		2,875
Other Securities			3.9		38,487

			4.8		46,427


Diversified Financials 3.0%
AmeriCredit Corp. *	235,100		0.3		2,391
Stifel Financial Corp. *	42,150		0.2		2,075
Other Securities			2.5		24,830

			3.0		29,296


Energy 6.7%
World Fuel Services Corp.	57,978		0.2		2,211
Other Securities			6.5		62,130

			6.7		64,341


Food & Staples Retailing 1.1%
Casey’s General Stores, Inc.	90,926		0.2		2,419
Other Securities			0.9		8,025

			1.1		10,444


Food, Beverage & Tobacco 1.8%
Green Mountain Coffee Roasters, Inc. *	29,800		0.2		2,155
Other Securities			1.6		15,700

			1.8		17,855


Health Care Equipment & Services 6.6%
LifePoint Hospitals, Inc. *	95,641		0.2		2,472
NuVasive, Inc. *	64,700		0.2		2,452
The Cooper Cos., Inc.	80,500		0.2		2,314
West Pharmaceutical Services, Inc.	63,465		0.2		2,072
Other Securities			5.8		54,256

			6.6		63,566


Household & Personal Products 0.7%
Other Securities			0.7		7,047

See financial notes 43

Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)



Insurance 2.9%
Other Securities			2.9		27,671


Materials 4.3%
Ashland, Inc.	118,400		0.3		2,600
Eagle Materials, Inc.	77,890		0.2		2,165
Rock-Tenn Co., Class A	68,400		0.3		2,583
Other Securities			3.5		33,865

			4.3		41,213


Media 1.1%
Other Securities			1.1		11,105


Pharmaceuticals, Biotechnology & Life Sciences 4.7%
Dendreon Corp. *	173,500		0.4		3,678
Dionex Corp. *	36,344		0.2		2,290
Other Securities			4.1		38,991

			4.7		44,959


Real Estate 6.9%
Corporate Office Properties Trust	92,349		0.3		2,822
MFA Financial, Inc.	396,064		0.2		2,333
National Retail Properties, Inc.	150,826		0.3		2,676
OMEGA Healthcare Investors, Inc.	147,258		0.2		2,315
Tanger Factory Outlet Centers, Inc.	62,034		0.2		2,067
Other Securities			5.7		54,008

			6.9		66,221


Retailing 4.6%
Chico’s FAS, Inc. *	293,200		0.2		2,240
Rent-A-Center, Inc. *	130,705		0.3		2,516
Tractor Supply Co. *	55,200		0.2		2,229
Williams-Sonoma, Inc.	155,000		0.2		2,170
Other Securities			3.7		35,574

			4.6		44,729


Semiconductors & Semiconductor Equipment 4.5%
International Rectifier Corp. *	142,500		0.2		2,405
PMC-Sierra, Inc. *	432,923		0.3		3,429
Skyworks Solutions, Inc. *	313,308		0.3		2,770
Other Securities			3.7		35,185

			4.5		43,789


Software & Services 7.1%
Convergys Corp. *	218,400		0.2		2,208
Digital River, Inc. *	61,200		0.2		2,351
Informatica Corp. *	171,381		0.3		2,725
Other Securities			6.4		60,815

			7.1		68,099


Technology Hardware & Equipment 6.6%
3Com Corp. *	803,119		0.3		3,253
ADTRAN, Inc.	98,005		0.2		2,073
Arris Group, Inc. *	219,860		0.2		2,346
Palm, Inc. *	196,360		0.2		2,060
Tech Data Corp. *	89,500		0.3		2,577
Other Securities			5.4		51,432

			6.6		63,741


Telecommunication Services 1.1%
Other Securities			1.1		11,034


Transportation 2.2%
Other Securities			2.2		21,193


Utilities 3.0%
Portland General Electric Co.	120,800		0.2		2,207
Suburban Propane Partners L.P.	55,094		0.2		2,204
Other Securities			2.6		24,750

			3.0		29,161

Total Common Stock (Cost $1,185,598)					953,092




Foreign Common Stock 1.2% of net assets


Bermuda 1.2%


Capital Goods 0.1%
Other Securities			0.1		955


Consumer Durables & Apparel 0.1%
Other Securities			0.1		863


Consumer Services 0.1%
Other Securities			0.1		413


Insurance 0.5%
Other Securities			0.5		5,169


Software & Services 0.2%
Other Securities			0.2		2,037


Telecommunication Services 0.1%
Other Securities			0.1		673


Transportation 0.0%
Other Securities			0.0		389


Utilities 0.1%
Other Securities			0.1		526

			1.2		11,025


Liberia 0.0%


Transportation 0.0%
Other Securities			0.0		388

Total Foreign Common Stock (Cost $18,351)					11,413

44 See financial notes

Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)


Preferred Stock 0.1% of net assets


Healthcare - Services 0.1%
Other Securities			0.1		625

Total Preferred Stock (Cost $1,145)					625




Rights 0.0% of net assets
Other Securities			0.0		17

Total Rights (Cost $44)					17




Security	Face Amount	% of Net		Value
Rate, Maturity Date	($ x 1,000)	Assets		($ x 1,000)


Short-Term Investment 0.3% of net assets


Commercial Paper & Other Obligation 0.2%
Citibank, New York Time Deposit
0.03% , 05/01/09	2,344		0.2		2,344


U.S. Treasury Obligations 0.1%
Other Securities			0.1		959

Total Short-Term Investment (Cost $3,303)					3,303


End of Investments.

(All dollar amounts are x 1,000)

At 04/30/09 the tax basis cost of the fund’s investments was $1,230,405 and the unrealized appreciation and depreciation were $103,023 and ($364,978), respectively, with a net unrealized depreciation of ($261,955).


*		Non-income producing security.
(a)		Fair-valued by Management. Please see complete schedule of holdings.
(b)		Illiquid security. At the period end, the value of these amounted to $0 or 0.0% of net assets. Please see complete schedule of holdings.

See financial notes 45

Schwab Small Cap Index Fund

Statement of

Assets and Liabilities

As of April 30, 2009; unaudited. All numbers are x 1,000 except NAV.




Assets
Investments, at value (cost $1,208,441)		$968,450
Receivables:
Dividends		955
Fund shares sold		550
Due from investment adviser		1
Prepaid expenses	+	2


Total assets		969,958


Liabilities
Payables:
Investment adviser and administrator fees		24
Transfer agent and shareholder services fees		11
Fund shares redeemed		3,865
Due to brokers for futures		32
Trustees’ fees		1
Accrued expenses	+	47


Total liabilities		3,980


Net Assets
Total assets		969,958
Total liabilities	−	3,980


Net assets		$965,978
Net Assets by Source
Capital received from investors		1,301,224
Net investment income not yet distributed		5,952
Net realized capital losses		(101,207	)
Net unrealized capital losses		(239,991	)

Net Asset Value (NAV) by Shares Class


			Shares
Share Class	Net Assets	¸	Outstanding	=	NAV

Investor Shares	$389,486		30,722			$12.68
Select Shares	$576,492		45,456			$12.68

46 See financial notes

Schwab Small Cap Index Fund

Statement of

Operations

For November 1, 2008 through April 30, 2009; unaudited. All numbers are x 1,000.




Investment Income
Dividends (net of foreign withholding tax of $4)		$11,212
Interest	+	16


Total Investment Income		11,228


Net Realized Gains and Losses
Net realized losses on investments		(46,960	)
Net realized losses on foreign currency transactions		(3	)
Net realized losses on futures contracts	+	(8,724	)


Net realized losses		(55,687	)


Net Unrealized Losses
Net unrealized losses on investments		(24,933	)
Net unrealized losses on futures contracts	+	(989	)


Net unrealized losses		(25,922	)


Expenses
Investment adviser and administrator fees		1,359
Transfer agent and shareholder service fees:
Investor Shares		443
Select Shares		264
Shareholder reports		47
Portfolio accounting fees		34
Professional fees		25
Custodian fees		25
Registration fees		16
Trustees’ fees		10
Interest expense		2
Other expenses	+	10


Total expenses		2,235
Expense reduction by adviser and schwab	−	74


Net expenses		2,161


Increase (Decrease) in Net Assets from Operations
Total investment income		11,228
Net expenses	−	2,161


Net investment income		9,067
Net realized losses		(55,687	)
Net unrealized losses	+	(25,922	)


Decrease in net assets from operations		($72,542	)

See financial notes 47

Schwab Small Cap Index Fund

Statements of

Changes in Net Assets

For the current and prior report periods. All numbers are x 1,000.
Figures for the current period are unaudited.




Operations


		11/1/08-4/30/09			11/1/07-10/31/08
Net investment income			$9,067			$24,861
Net realized losses			(55,687	)		(48,380	)
Net unrealized losses	+		(25,922	)		(540,995	)


Decrease in net assets from operations			(72,542	)		(564,514	)


Distributions to Shareholders
Distributions from net investment income
Investor Shares			8,184			8,132
Select Shares	+		13,636			12,287


Total distributions from net investment income			21,820			20,419


Distributions from net realized gains
Investor Shares			—			106,591
Select Shares	+		—			140,533


Total distributions from net realized gains			—			247,124
Total distributions			$21,820			$267,543

Transactions in Fund Shares


		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			VALUE			SHARES			VALUE


Shares Sold
Investor Shares			2,244			$25,518			4,071			$65,918
Select Shares	+		6,399			71,448			8,084			143,442


Total shares sold			8,643			$96,966			12,155			$209,360


Shares Reinvested
Investor Shares			643			$7,679			5,458			$107,685
Select Shares	+		1,059			12,634			7,095			140,062


Total shares reinvested			1,702			$20,313			12,553			$247,747


Shares Redeemed
Investor Shares			(4,573	)		($49,998	)		(6,996	)		($127,623	)
Select Shares	+		(7,340	)		(82,581	)		(8,050	)		(146,320	)


Total shares redeemed			(11,913	)		($132,579	)		(15,046	)		($273,943	)

Net transactions in fund shares			(1,568	)		($15,300	)		9,662			$183,164


Shares Outstanding and Net Assets
		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			NET ASSETS			SHARES			NET ASSETS
Beginning of period			77,746			$1,075,640			68,084			$1,724,533
Total increase or decrease	+		(1,568	)		(109,662	)		9,662			(648,893	)


End of period			76,178			$965,978			77,746			$1,075,640


Net investment income not yet distributed						$5,952						$18,705

48 See financial notes

Schwab Total Stock Market Index Fund^®

Financial Statements

Financial Highlights


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Investor Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		17.03			26.96			23.83			20.77			19.04			17.48

Income (loss) from investment operations:
Net investment income (loss)		0.17			0.36			0.35			0.30			0.29			0.19
Net realized and unrealized gains (losses)		(1.40	)		(9.90	)		3.06			3.01			1.69			1.53

Total from investment operations		(1.23	)		(9.54	)		3.41			3.31			1.98			1.72
Less distributions:
Distributions from net investment income		(0.34	)		(0.33	)		(0.28	)		(0.25	)		(0.25	)		(0.16	)
Distributions from net realized gains		—			(0.06	)		—			—			—			—

Total distributions		(0.34	)		(0.39	)		(0.28	)		(0.25	)		(0.25	)		(0.16	)

Net asset value at end of period		15.46			17.03			26.96			23.83			20.77			19.04

Total return (%)		(7.23	)¹		(35.85	)		14.44			16.05			10.45			9.93

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.56	²		0.53			0.52			0.53			0.54			0.56
Gross operating expenses		0.56	²		0.53			0.52			0.53			0.54			0.56
Net investment income (loss)		2.39	²		1.56			1.34			1.27			1.37			1.07
Portfolio turnover rate		2	¹		1			0	³		3			2			2
Net assets, end of period ($ x 1,000,000)		396			422			673			607			600			592


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Select Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		17.08			27.04			23.90			20.83			19.09			17.52

Income (loss) from investment operations:
Net investment income (loss)		0.18			0.40			0.37			0.31			0.31			0.22
Net realized and unrealized gains (losses)		(1.40	)		(9.93	)		3.09			3.04			1.71			1.54

Total from investment operations		(1.22	)		(9.53	)		3.46			3.35			2.02			1.76
Less distributions:
Distributions from net investment income		(0.37	)		(0.37	)		(0.32	)		(0.28	)		(0.28	)		(0.19	)
Distributions from net realized gains		—			(0.06	)		—			—			—			—

Total distributions		(0.37	)		(0.43	)		(0.32	)		(0.28	)		(0.28	)		(0.19	)

Net asset value at end of period		15.49			17.08			27.04			23.90			20.83			19.09

Total return (%)		(7.13	)¹		(35.76	)		14.62			16.23			10.63			10.10

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.39	²		0.38			0.37			0.38			0.39			0.39
Gross operating expenses		0.41	²		0.38			0.37			0.38			0.39			0.41
Net investment income (loss)		2.55	²		1.71			1.49			1.41			1.52			1.23
Portfolio turnover rate		2	¹		1			0	³		3			2			2
Net assets, end of period ($ x 1,000,000)		550			585			906			762			617			548

* Unaudited.

¹ Not annualized.

² Annualized.

³ Less than 1%.

See financial notes 49

Schwab Total Stock Market Index Fund

Portfolio Holdings as of April 30, 2009 (Unaudited)


				Cost		Value
Holdings by Category				($ x 1,000)		($ x 1,000)


	98	.2%	Common Stock		1,084,714		929,276
	0	.2%	Foreign Common Stock		2,428		1,394
	0	.1%	Preferred Stock		955		1,243
		—%	Rights		13		5
	1	.5%	Short-Term Investments		13,714		13,714

	100	.0%	Total Investments		1,101,824		945,632
	0	.1%	Collateral Invested for Securities on Loan		972		972
	(0	.1)%	Other Assets and Liabilities, Net				(489	)

	100	.0%	Net Assets				946,115


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)





Common Stock 98.2% of net assets


Automobiles & Components 0.4%
Other Securities			0.4		3,931


Banks 2.9%
Wells Fargo & Co.	386,406		0.8		7,732
Other Securities			2.1		19,315

			2.9		27,047


Capital Goods 7.6%
3M Co.	65,000		0.4		3,744
General Electric Co.	954,266		1.3		12,071
United Technologies Corp.	88,068		0.5		4,301
Other Securities			5.4		52,171

			7.6		72,287


Commercial & Professional Supplies 1.2%
Other Securities			1.2		11,196


Consumer Durables & Apparel 1.3%
Other Securities			1.3		12,632


Consumer Services 2.2%
McDonald’s Corp.	110,300		0.6		5,878
Other Securities			1.6		14,646

			2.2		20,524


Diversified Financials 5.4%
Bank of America Corp.	577,956		0.6		5,161
JPMorgan Chase & Co.	337,444		1.2		11,136
The Charles Schwab Corp. (c)	111,120		0.2		2,054
The Goldman Sachs Group, Inc.	42,700		0.6		5,487
Other Securities			2.8		27,575

			5.4		51,413


Energy 11.4%
Chevron Corp.	186,939		1.3		12,357
ConocoPhillips	138,223		0.6		5,667
Exxon Mobil Corp.	466,166		3.3		31,079
Occidental Petroleum Corp.	78,020		0.5		4,392
Schlumberger Ltd.	105,000		0.6		5,144
Other Securities			5.1		48,869

			11.4		107,508


Food & Staples Retailing 3.3%
CVS Caremark Corp.	125,640		0.4		3,993
Wal-Mart Stores, Inc.	359,100		1.9		18,099
Other Securities			1.0		9,138

			3.3		31,230


Food, Beverage & Tobacco 5.1%
Kraft Foods, Inc., Class A	147,513		0.4		3,452
PepsiCo, Inc.	140,800		0.7		7,006
Philip Morris International, Inc.	182,800		0.7		6,617
The Coca-Cola Co.	210,200		1.0		9,049
Other Securities			2.3		22,063

			5.1		48,187


Health Care Equipment & Services 4.4%
Other Securities			4.4		41,594


Household & Personal Products 2.3%
The Procter & Gamble Co.	264,215		1.4		13,063

50 See financial notes

Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)

Other Securities			0.9		8,679

			2.3		21,742


Insurance 4.0%
Berkshire Hathaway, Inc., Class A *	143		1.4		13,442
Other Securities			2.6		24,804

			4.0		38,246


Materials 3.7%
Monsanto Co.	48,290		0.5		4,099
Other Securities			3.2		30,856

			3.7		34,955


Media 3.0%
Comcast Corp., Class A	227,004		0.4		3,510
The Walt Disney Co.	185,410		0.4		4,060
Other Securities			2.2		20,425

			3.0		27,995


Pharmaceuticals, Biotechnology & Life Sciences 7.8%
Abbott Laboratories	136,705		0.6		5,721
Amgen, Inc. *	103,268		0.5		5,005
Bristol-Myers Squibb Co.	177,250		0.4		3,403
Eli Lilly & Co.	106,400		0.4		3,503
Gilead Sciences, Inc. *	84,840		0.4		3,886
Johnson & Johnson	251,370		1.4		13,162
Merck & Co., Inc.	194,552		0.5		4,716
Pfizer, Inc.	610,192		0.9		8,152
Schering-Plough Corp.	144,750		0.4		3,332
Wyeth	119,400		0.6		5,063
Other Securities			1.7		17,916

			7.8		73,859


Real Estate 1.6%
Other Securities			1.6		14,983


Retailing 3.8%
Amazon.com, Inc. *	41,700		0.4		3,358
The Home Depot, Inc.	151,070		0.4		3,976
Other Securities			3.0		28,530

			3.8		35,864


Semiconductors & Semiconductor Equipment 2.4%
Intel Corp.	515,832		0.9		8,140
Other Securities			1.5		14,833

			2.4		22,973


Software & Services 8.2%
Google, Inc., Class A *	28,400		1.2		11,246
Microsoft Corp.	830,850		1.8		16,833
Oracle Corp.	449,449		0.9		8,692
Visa, Inc., Class A	80,000		0.6		5,197
Other Securities			3.7		35,356

			8.2		77,324


Technology Hardware & Equipment 7.5%
Apple, Inc. *	80,000		1.1		10,066
Cisco Systems, Inc. *	541,909		1.1		10,470
Hewlett-Packard Co.	234,636		0.9		8,442
International Business Machines Corp.	126,510		1.4		13,057
QUALCOMM, Inc.	155,100		0.7		6,564
Other Securities			2.3		22,702

			7.5		71,301


Telecommunication Services 3.1%
AT&T, Inc.	540,056		1.5		13,836
Verizon Communications, Inc.	253,572		0.8		7,693
Other Securities			0.8		7,773

			3.1		29,302


Transportation 1.9%
United Parcel Service, Inc., Class B	91,480		0.5		4,788
Other Securities			1.4		13,675

			1.9		18,463


Utilities 3.7%
Other Securities			3.7		34,720

Total Common Stock (Cost $1,084,714)					929,276




Foreign Common Stock 0.2% of net assets


Bermuda 0.2%


Capital Goods 0.0%
Other Securities			0.0		36


Consumer Services 0.0%
Other Securities			0.0		10


Diversified Financials 0.1%
Other Securities			0.1		715


Insurance 0.1%
Other Securities			0.1		407


Software & Services 0.0%
Other Securities			0.0		135


Telecommunication Services 0.0%
Other Securities			0.0		33

			0.2		1,336

See financial notes 51

Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)



British Virgin Islands 0.0%


Transportation 0.0%
Other Securities			0.0		58

Total Foreign Common Stock (Cost $2,428)					1,394




Preferred Stock 0.1% of net assets


Health Care Equipment & Services 0.0%
Other Securities			0.0		57


Real Estate 0.1%
Other Securities			0.1		1,186

Total Preferred Stock (Cost $955)					1,243




Rights 0.0% of net assets


Capital Goods 0.0%
Other Securities			0.0		5


Pharmaceuticals 0.0%
Other Securities			0.0		—

Total Rights (Cost $13)					5



Security	Face Amount	% of Net		Value
Rate, Maturity Date	($ x 1,000)	Assets		($ x 1,000)


Short-Term Investments 1.5% of net assets


Commercial Paper & Other Obligations 1.3%
Citibank, New York Time Deposit
0.03%, 05/01/09	12,093		1.3		12,093


U.S. Treasury Obligations 0.2%
Other Securities			0.2		1,621

Total Short-Term Investments (Cost $13,714)					13,714


End of Investments.


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)


Collateral Invested for Securities on Loan 0.1% of net assets
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust	972,130		0.1		972

Total Collateral Invested for Securities on Loan (Cost $972)					972

End of collateral invested for securities on loan.

(All dollar amounts are x 1,000)

At 04/30/09 the tax basis cost of the fund’s investments was $1,100,890 and the unrealized appreciation and depreciation were $173,315 and ($328,573), respectively, with a net unrealized depreciation of ($155,258).


*		Non-income producing security.
(a)		Fair-valued by Management. Please see complete schedule of holdings.
(b)		All or a portion of this security is held as collateral for open futures contracts. Please see complete schedule of holdings.
(c)		Issuer is affiliated with the fund’s adviser.
(d)		Illiquid security. At the period end, the value of these amounted to $3 or 0.0% of net assets. Please see complete schedule of holdings.
(e)		All or a portion of this security is on loan. Please see complete schedule of holdings.

ADR — American Depositary Receipt

REIT — Real Estate Investment Trust

In addition to the above, the fund held the following at 04/30/09. All numbers are x 1,000 except number of futures contracts.

Number of

Contract

Unrealized

Contracts

Value

Gains

Futures Contracts

Russell 2000 Index, e-mini, Long, expires 06/19/09

150

7,301

951

S & P 500 Index, e-mini, Long, expires 06/19/09

120

5,220

499

Net unrealized gains on futures

1,450

52 See financial notes

Schwab Total Stock Market Index Fund

Statement of

Assets and Liabilities

As of April 30, 2009; unaudited. All numbers are x 1,000 except NAV.




Assets
Investments, at value including securities on loan of $912 (cost $1,101,824)		$945,632
Collateral invested for securities on loan		972
Receivables:
Fund shares sold		1,570
Dividends		1,207
Income from securities on loan		61
Foreign tax reclaims		3
Prepaid expenses	+	3


Total assets		949,448


Liabilities
Collateral held for securities on loan		972
Payables:
Investments bought		1,189
Investment adviser and administrator fees		20
Transfer agent and shareholder services fees		12
Fund shares redeemed		1,091
Due to brokers for futures		21
Trustees’ fees		1
Accrued expenses	+	27


Total liabilities		3,333


Net Assets
Total assets		949,448
Total liabilities	−	3,333


Net assets		$946,115
Net Assets by Source
Capital received from investors		1,122,575
Net investment income not yet distributed		7,026
Net realized capital losses		(28,744	)
Net unrealized capital losses		(154,742	)

Net Asset Value (NAV) by Shares Class


			Shares
Share Class	Net Assets	¸	Outstanding	=	NAV

Investor Shares	$395,785		25,598			$15.46
Select Shares	$550,330		35,537			$15.49

See financial notes 53

Schwab Total Stock Market Index Fund

Statement of

Operations

For November 1, 2008 through April 30, 2009; unaudited. All numbers are x 1,000.




Investment Income
Dividends (including $13 from affiliated issuer and net of foreign withholding tax of $4)		$13,041
Interest		6
Securities on loan	+	82


Total investment income		13,129


Net Realized Gains and Losses
Net realized losses on investments		(1,845	)
Net realized losses on futures contracts	+	(3,331	)


Net realized losses		(5,176	)


Net Unrealized Gains and Losses
Net unrealized losses on investments		(82,883	)
Net unrealized gains on futures contracts	+	1,903


Net unrealized losses		(80,980	)


Expenses
Investment adviser and administrator fees		1,182
Transfer agent and shareholder service fees:
Investor Shares		460
Select Shares		263
Shareholder reports		40
Registration fees		39
Portfolio accounting fees		39
Professional fees		25
Custodian fees		20
Trustees’ fees		10
Other expenses	+	8


Total expenses		2,086
Expense reduction by adviser and Schwab	−	43


Net expenses		2,043


Increase in Net Assets from Operations
Total investment income		13,129
Net expenses	−	2,043


Net investment income		11,086
Net realized losses		(5,176	)
Net unrealized lossses	+	(80,980	)


Decrease in net assets from operations		($75,070	)

54 See financial notes

Schwab Total Stock Market Index Fund

Statements of

Changes in Net Assets

For the current and prior report periods. All numbers are x 1,000.
Figures for the current period are unaudited.




Operations


		11/1/08-4/30/09			11/1/07-10/31/08
Net investment income			$11,086			$22,422
Net realized losses			(5,176	)		(23,326	)
Net unrealized losses	+		(80,980	)		(562,957	)


Decrease in net assets from operations			(75,070	)		(563,861	)


Distributions to Shareholders
Distributions from net investment income
Investor Shares			8,380			8,309
Select Shares	+		12,961			12,465


Total distributions from net investment income			21,341			20,774


Distributions from net realized gains
Investor Shares			—			1,506
Select Shares	+		—			2,022


Total distributions from net realized gains			—			3,528

Total distributions			$21,341			$24,302

Transactions in Fund Shares


		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			VALUE			SHARES			VALUE


Shares Sold
Investor Shares			3,805			$55,640			4,610			$101,344
Select Shares	+		8,537			126,230			8,006			177,993


Total shares sold			12,342			$181,870			12,616			$279,337


Shares Reinvested
Investor Shares			502			$7,748			361			$9,166
Select Shares	+		699			10,803			472			11,987


Total shares reinvested			1,201			$18,551			833			$21,153


Shares Redeemed
Investor Shares			(3,495	)		($50,487	)		(5,154	)		($115,426	)
Select Shares	+		(7,951	)		(114,532	)		(7,746	)		(169,194	)


Total shares redeemed			(11,446	)		($165,019	)		(12,900	)		($284,620	)

Net transactions in fund shares			2,097			$35,402			549			$15,870


Shares Outstanding and Net Assets
		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			NET ASSETS			SHARES			NET ASSETS
Beginning of period			59,038			$1,007,124			58,489			$1,579,417
Total increase or decrease	+		2,097			(61,009	)		549			(572,293	)


End of period			61,135			$946,115			59,038			$1,007,124


Net investment income not yet distributed						$7,026						$17,281

See financial notes 55

Schwab International Index Fund^®

Financial Statements

Financial Highlights


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Investor Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		13.94			25.92			21.12			17.07			14.82			12.74

Income (loss) from investment operations:
Net investment income (loss)		0.22			0.63			0.50			0.48			0.35			0.26
Net realized and unrealized gains (losses)		(1.05	)		(12.10	)		4.92			3.92			2.18			2.05

Total from investment operations		(0.83	)		(11.47	)		5.42			4.40			2.53			2.31
Less distributions:
Distributions from net investment income		(0.61	)		(0.51	)		(0.62	)		(0.35	)		(0.28	)		(0.23	)

Net asset value at end of period		12.50			13.94			25.92			21.12			17.07			14.82

Total return (%)		(6.00	)¹		(45.09	)		26.26			26.15			17.30			18.40

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.69	²		0.68			0.69			0.69			0.68			0.69
Gross operating expenses		0.73	²		0.69			0.69			0.70			0.72			0.73
Net investment income (loss)		3.09	²		2.95			2.15			2.41			2.05			1.78
Portfolio turnover rate		9	¹		10			5			11			10			1
Net assets, end of period ($ x 1,000,000)		398			469			872			706			595			550


	11/1/08–			11/1/07–			11/1/06–			11/1/05–			11/1/04–			11/1/03–
Select Shares	4/30/09*			10/31/08			10/31/07			10/31/06			10/31/05			10/31/04


Per-Share Data ($)

Net asset value at beginning of period		13.95			25.95			21.14			17.09			14.83			12.75

Income (loss) from investment operations:
Net investment income (loss)		0.20			0.68			0.54			0.50			0.38			0.28
Net realized and unrealized gains (losses)		(1.02	)		(12.13	)		4.93			3.93			2.19			2.05

Total from investment operations		(0.82	)		(11.45	)		5.47			4.43			2.57			2.33
Less distributions:
Distributions from net investment income		(0.64	)		(0.55	)		(0.66	)		(0.38	)		(0.31	)		(0.25	)

Net asset value at end of period		12.49			13.95			25.95			21.14			17.09			14.83

Total return (%)		(5.86	)¹		(45.02	)		26.50			26.35			17.56			18.56

Ratios/Supplemental Data (%)

Ratios to average net assets:
Net operating expenses		0.50	²		0.50			0.50			0.50			0.50			0.50
Gross operating expenses		0.58	²		0.54			0.54			0.55			0.57			0.58
Net investment income (loss)		3.28	²		3.15			2.34			2.60			2.23			1.97
Portfolio turnover rate		9	¹		10			5			11			10			1
Net assets, end of period ($ x 1,000,000)		646			711			1,264			954			776			687

* Unaudited.

¹ Not annualized.

² Annualized.

56 See financial notes

Schwab International Index Fund

Portfolio Holdings as of April 30, 2009 (Unaudited)


				Cost		Value
Holdings by Category				($ x 1,000)		($ x 1,000)


	98	.5%	Common Stock		1,022,869		1,029,112
	0	.2%	Preferred Stock		3,232		2,034
		—%	Rights		—		—
	0	.3%	Other Investment Company		2,336		2,934
	0	.5%	Short-Term Investment		5,101		5,101

	99	.5%	Total Investments		1,033,538		1,039,181
	0	.5%	Other Assets and Liabilities, Net				5,528

	100	.0%	Net Assets				1,044,709


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)





Common Stock 98.5% of net assets


Australia 6.3%
BHP Billiton Ltd.	551,567		1.3		13,325
Commonwealth Bank of Australia	232,449		0.6		5,939
Westpac Banking Corp.	478,668		0.6		6,673
Other Securities			3.8		39,664

			6.3		65,601


Austria 0.2%
Other Securities			0.2		2,193


Belgium 0.7%
Other Securities			0.7		7,073


Bermuda 0.1%
Other Securities			0.1		1,048


Canada 9.2%
EnCana Corp.	120,062		0.5		5,503
Research In Motion Ltd. *	78,948		0.5		5,454
Royal Bank of Canada	223,468		0.8		7,922
The Toronto-Dominion Bank	135,532		0.5		5,350
Other Securities			6.9		71,765

			9.2		95,994


Denmark 0.7%
Other Securities			0.7		7,652


Finland 1.0%
Nokia Oyj	613,039		0.8		8,707
Other Securities			0.2		2,116

			1.0		10,823


France 11.0%
BNP Paribas	146,042		0.7		7,688
France Telecom S.A.	304,264		0.6		6,755
GDF Suez	225,749		0.8		8,108
Sanofi-Aventis	165,635		0.9		9,592
Total S.A.	379,677		1.8		18,997
Other Securities			6.2		63,891

			11.0		115,031


Germany 8.6%
Allianz SE - Reg’d	72,500		0.6		6,690
BASF SE *	148,324		0.5		5,597
Bayer AG *	123,306		0.6		6,129
Daimler AG - Reg’d	155,304		0.5		5,568
Deutsche Telekom AG - Reg’d.	477,162		0.6		5,770
E.ON AG	320,551		1.0		10,840
SAP AG	137,740		0.5		5,296
Siemens AG - Reg’d	146,478		1.0		9,848
Other Securities			3.3		33,793

			8.6		89,531


Greece 0.2%
Other Securities			0.2		2,478


Hong Kong 1.5%
Other Securities			1.5		15,682


Ireland 0.4%
Other Securities			0.4		3,829


Italy 3.1%
Eni S.p.A.	398,855		0.8		8,559
Other Securities			2.3		23,673

			3.1		32,232

See financial notes 57

Schwab International Index Fund

Portfolio Holdings (Unaudited) continued


Security and Number		% of Net		Value
of Shares		Assets		($ x 1,000)



Japan 17.9%
Canon, Inc.	178,995		0.5		5,357
Honda Motor Co., Ltd.	246,739		0.7		7,231
Mitsubishi UFJ Financial Group, Inc.	1,671,009		0.9		9,115
Toyota Motor Corp.	427,803		1.6		16,932
Other Securities			14.2		148,275

			17.9		186,910


Luxembourg 0.3%
Other Securities			0.3		3,136


Netherlands 2.6%
Unilever N.V. CVA	274,655		0.5		5,435
Other Securities			2.1		21,341

			2.6		26,776


Norway 0.5%
Other Securities			0.5		5,236


Portugal 0.3%
Other Securities			0.3		3,103


Singapore 0.6%
Other Securities			0.6		6,604


Spain 4.8%
Banco Bilbao Vizcaya Argentaria S.A.	614,226		0.6		6,657
Banco Santander S.A.	1,304,375		1.2		12,547
Iberdrola S.A.	801,243		0.6		6,310
Telefonica S.A.	753,618		1.4		14,278
Other Securities			1.0		10,773

			4.8		50,565


Sweden 1.7%
Other Securities			1.7		17,572


Switzerland 7.9%
ABB Ltd. - Reg’d *	372,453		0.5		5,273
Credit Suisse Group AG - Reg’d	159,054		0.6		6,215
Nestle S.A. - Reg’d	613,467		1.9		19,997
Novartis AG - Reg’d	423,440		1.5		16,027
Roche Holding AG	112,533		1.4		14,191
UBS AG - Reg’d *	472,086		0.6		6,485
Other Securities			1.4		14,645

			7.9		82,833


United Kingdom 18.8%
AstraZeneca PLC	235,719		0.8		8,254
Barclays plc	1,360,383		0.5		5,523
BG Group plc	545,612		0.8		8,712
BHP Billiton plc	358,112		0.7		7,433
BP plc	2,999,726		2.0		21,198
British American Tobacco plc	280,225		0.6		6,758
GlaxoSmithKline PLC	832,673		1.2		12,826
HSBC Holdings plc	1,946,527		1.3		13,843
Rio Tinto plc	143,473		0.6		5,829
Royal Dutch Shell plc, B share	438,079		0.9		9,914
Royal Dutch Shell plc, Class A	588,320		1.3		13,493
Tesco plc	1,280,582		0.6		6,345
Vodafone Group plc	8,404,590		1.5		15,447
Other Securities			6.0		60,724

			18.8		196,299


United States 0.1%
Other Securities			0.1		911

Total Common Stock (Cost $1,022,869)					1,029,112




Preferred Stock 0.2% of net assets


Germany 0.2%
Other Securities			0.2		2,034

Total Preferred Stock (Cost $3,232)					2,034




Rights 0.0% of net assets
Other Securities			0.0		—

Total Rights (Cost $-)					—-




Other Investment Company 0.3% of net assets


United States 0.3%
iShares MSCI EAFE Index Fund	70,00		0.3		2,934

Total Other Investment Company (Cost $2,336)					2,934




Security	Face Amount	% of Net		Value
Rate, Maturity Date	($ x 1,000)	Assets		($ x 1,000)


Short-Term Investment 0.5% of net assets
Citibank, New York Time Deposit
0.03%, 05/01/09	5,101		0.5		5,101

Total Short-Term Investment (Cost $5,101)					5,101


End of Investments.

58 See financial notes

Schwab International Index Fund

Statement of

Assets and Liabilities

As of April 30, 2009; unaudited. All numbers are x 1,000 except NAV.




Assets
Investments, at value (cost $1,033,538)		$1,039,181
Foreign currency, at value (cost $673)		673
Receivables:
Dividends		4,698
Foreign tax reclaims		980
Fund shares sold		730
Prepaid expenses	+	4


Total assets		1,046,266


Liabilities
Payables:
Investments bought		49
Investment adviser and administrator fees		32
Transfer agent and shareholder services fees		11
Fund shares redeemed		1,347
Accrued expenses	+	118


Total liabilities		1,557


Net Assets
Total assets		1,046,266
Total liabilities	−	1,557


Net assets		$1,044,709
Net Assets by Source
Capital received from investors		1,319,878
Net investment income not yet distributed		2,036
Net realized capital losses		(282,865	)
Net unrealized capital gains		5,660

Net Asset Value (NAV) by Shares Class


			Shares
Share Class	Net Assets	¸	Outstanding	=	NAV

Investor Shares	$398,455		31,869			$12.50
Select Shares	$646,254		51,745			$12.49

60 See financial notes

Schwab International Index Fund

Statement of

Operations

For November 1, 2008 through April 30, 2009; unaudited. All numbers are x 1,000.




Investment Income
Dividends (net of foreign withholding tax of $1,945)		$19,321
Interest	+	1


Total investment income		19,322


Net Realized Gains and Losses
Net realized losses on investments		(47,251	)
Net realized gains on foreign currency transactions	+	116


Net realized losses		(47,135	)


Net Unrealized Gains and Losses
Net unrealized losses on investments		(47,421	)
Net unrealized losses on foreign currency translations	+	(56	)


Net unrealized losses		(47,477	)


Expenses
Investment adviser and administrator fees		2,067
Transfer agent and shareholder service fees:
Investor Shares		493
Select Shares		314
Custodian fees		189
Shareholder reports		54
Portfolio accounting fees		47
Registration fees		39
Professional fees		26
Trustees’ fees		11
Interest expenses		8
Other expenses	+	14


Total expenses		3,262
Expense reduction by adviser and Schwab	−	321


Net expenses		2,941


Increase (Decrease) in Net Assets from Operations
Total investment income		19,322
Net expenses	−	2,941


Net investment income		16,381
Net realized losses		(47,135	)
Net unrealized losses	+	(47,477	)


Decrease in net assets from operations		($78,231	)

See financial notes 61

Schwab International Index Fund

Statements of

Changes in Net Assets

For the current and prior report periods. All numbers are x 1,000.
Figures for the current period are unaudited.




Operations


		11/1/08-4/30/09			11/1/07-10/31/08
Net investment income			$16,381			$55,150
Net realized losses			(47,135	)		(11,824	)
Net unrealized losses	+		(47,477	)		(992,846	)


Decrease in net assets from operations			(78,231	)		(949,520	)


Distributions to Shareholders
Distributions from net investment income
Investor Shares			19,181			17,168
Select Shares	+		33,020			26,872


Total distributions from net investment income			$52,201			$44,040

Transactions in Fund Shares


		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			VALUE			SHARES			VALUE


Shares Sold
Investor Shares			3,792			$46,830			6,740			$126,669
Select Shares	+		6,679			82,142			10,127			200,887


Total shares sold			10,471			$128,972			16,867			$327,556


Shares Reinvested
Investor Shares			1,390			$17,442			646			$15,700
Select Shares	+		2,394			29,992			992			24,068


Total shares reinvested			3,784			$47,434			1,638			$39,768


Shares Redeemed
Investor Shares			(6,943	)		($82,405	)		(7,378	)		($151,710	)
Select Shares	+		(8,281	)		(98,292	)		(8,895	)		(178,511	)


Total shares redeemed			(15,224	)		($180,697	)		(16,273	)		($330,221	)

Net transactions in fund shares			(969	)		($4,291	)		2,232			$37,103


Shares Outstanding and Net Assets
		11/1/08-4/30/09						11/1/07-10/31/08
		SHARES			NET ASSETS			SHARES			NET ASSETS
Beginning of period			84,583			$1,179,432			82,351			$2,135,889
Total increase or decrease	+		(969	)		(134,723	)		2,232			(956,457	)


End of period			83,614			$1,044,709			84,583			$1,179,432


Net investment income not yet distributed						$2,036						$37,856

62 See financial notes

Schwab Equity Index Funds

Financial Notes

1. Business Structure of the Funds:

Each of the funds discussed in this report is a series of Schwab Capital Trust, except Schwab 1000 Index Fund, which is a series of Schwab Investments. Both Capital Trust and Schwab Investments (the “trusts”), are no-load, open-end management investment companies. Each 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 trusts including the funds discussed in this report, which are highlighted:



Schwab Capital Trust (organized May 7, 1993) Schwab S&P 500 Index Fund Schwab Institutional Select S&P 500 Fund Schwab Small-Cap Index Fund Schwab Total Stock Market Index Fund Schwab International Index Fund Schwab MartketTrack All Equity Portfolio Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfolio Laudus U.S. MarketMasters Fund Laudus Small-Cap MarketMasters Fund Laudus International MarketMasters Fund Schwab Balanced Fund (formerly Schwab Viewpoints Fund) Schwab Premier Equity Fund Schwab Core Equity Fund Schwab Dividend Equity Fund Schwab Large-Cap Growth Fund Schwab Small-Cap Equity Fund Schwab Hedged Equity Fund Schwab Financial Services Fund Schwab Health Care Fund 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 Retirement Income Fund Schwab Fundamental US Large Company Index Fund Schwab Fundamental US Small-Mid Company Index Fund Schwab Fundamental International Large Company Index Fund Schwab Fundamental International Small-Mid Company Index Fund Schwab Fundamental Emerging Markets Index Fund Schwab Monthly Income Fund—Moderate Payout Schwab Monthly Income Fund—Enhanced Payout Schwab Monthly Income Fund—Maximum Payout Schwab Investments (organized October 26, 1990) Schwab 1000 Index Fund Schwab YieldPlus Fund Schwab Short-Term Bond Market Fund Schwab Total Bond Market Fund Schwab GNMA Fund Schwab Inflation Protected Fund Schwab Tax-Free YieldPlus Fund Schwab Tax-Free Bond Fund Schwab California Tax-Free YieldPlus Fund Schwab California Tax-Free Bond Fund Schwab Global Real Estate Fund

The Schwab Equity Index Funds, with the exception of Schwab Institutional Select S&P 500 Fund, offer multiple share classes. Shares of each class represent interest in the same portfolio. The e.Shares^®, are available only to clients of Schwab Institutional^®, Charles Schwab Trust Company and certain tax-advantaged retirement plans, and can only be traded electronically. Schwab S&P 500 Index Fund offers three classes of shares: Investor Shares, Select Shares^® and e.Shares^®. Schwab 1000 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund each offer two classes of shares: Investor Shares and Select Shares^®. Schwab Institutional Select S&P 500 Fund offers one share class.

Shares are bought and sold (subject to a redemption fee, see Note 8) at net asset value, or closing NAV, which is the price for all outstanding shares of a fund or share class, as applicable. Each share has a par value of 1/1,000 of a cent, and the trustees may authorize the issuance of as many shares as necessary.

Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund also may keep certain assets in segregated accounts, as required by securities law.

2. Significant Accounting Policies:

(All dollar amounts are x 1,000)

The following is a summary of the significant accounting policies the funds use in the preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America.

Schwab Equity Index Funds

Financial Notes (continued)

2. Significant Accounting Policies (continued):
(All dollar amounts are x 1,000)

(a) Security Valuation:

The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:

Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and asked quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the valuation date exchange rate.


	•	Securities for which no quoted value is available: The Board of Trustees has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when a security is 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. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures.

	•	International Fair Valuation: The Board of Trustees has adopted procedures to fair value foreign securities that trade in markets that close prior to when the funds value their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund 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 a fund’s portfolio holdings and the net asset value 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 a fund and that of its index or benchmark. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures.

	•	Futures and Forwards: valued at their settlement prices as of the close of their exchanges (for futures) or at a market value based on that day’s exchange rates (for forwards).

	•	Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value.

	•	Underlying funds: valued at their respective net asset values as determined by those funds in accordance with the 1940 Act for a given day.

(b) Portfolio Investments:

Futures Contract: The funds may invest in futures contracts. Futures contracts involve certain risks because they can be very sensitive to market movements.

One risk is that the price of a futures contract may not move in perfect correlation with the price of the underlying securities. Another risk is that, at certain times, it may be impossible for a fund to close out a position in a futures contract, due to a difference in trading hours or to market conditions that may reduce the liquidity for a futures contract or its underlying securities. The potential for losses associated with futures contracts may exceed amounts recorded in the Statement of Assets and Liabilities.

Because futures contracts carry inherent risks, a fund must give the broker a deposit of cash and/or securities (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another, but it is generally a percentage of the contract amount. Subsequent payments (“variation margin”) are made or received by a fund depending on the daily fluctuations in the value of the future contract and are accounted for as unrealized gains or losses. Futures are traded publicly on exchanges, and their market value changes daily.

Forward Currency Contract: The Schwab International Index Fund may invest in forward currency contracts in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange

Schwab Equity Index Funds

Financial Notes (continued)

2. Significant Accounting Policies (continued):
(All dollar amounts are x 1,000)

rates. “Forwards”, as they are known, are contracts to buy and sell a currency at a set price on a future date. Forwards are similar to futures except that they are not publicly traded, but are agreements directly between two parties.

As with futures, forwards involve certain risks that are not fully reflected in the funds’ financials. If counter-parties to the contracts or if the value of the foreign currency changes unfavorably, the funds could sustain a loss.

Repurchase Agreements: The funds may enter into repurchase agreements. In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. The date, price and other conditions are all specified when the agreement is created.

The funds’ repurchase agreements will be fully collateralized by U.S. government securities or U.S. government agency securities. All collateral is held by the funds’ custodian (or, with tri-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement.

Securities Lending: The funds may loan securities to certain brokers, dealers and other financial institutions that pay the funds negotiated fees. The funds receive cash, letters of credit or U.S. government securities as collateral on these loans. All of the cash collateral received is reinvested in high quality, short-term investments. The value of the collateral must be at least 102% of the market value of the loaned securities as of the first day of the loan, and at least 100% each day thereafter. If the value of the collateral falls below 100%, it will be adjusted the following day.

(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. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Gains realized by the funds on the sale of securities in certain foreign countries are subject to non-U.S. taxes. The funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.

When a fund closes out a futures or forwards 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. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).

(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 funds record certain foreign security dividends on the day they learn of the ex-dividend date.

(e) Expenses:

Expenses that are specific to a fund or a class within the trust are charged directly to that fund or class. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.

For funds offering multiple share classes, the net investment income, other than class specific expenses, and the realized and unrealized gains or losses, are allocated daily to each class in proportion to its average daily net assets.

(f) Distributions to Shareholders:

The funds make distributions from net investment income and net realized capital gains once a year.

Schwab Equity Index Funds

Financial Notes (continued)

2. Significant Accounting Policies (continued):
(All dollar amounts are x 1,000)

(g) Custody Credit:

Certain funds have an arrangement with their custodian bank, State Street Corp., under which the fund receives a credit for its uninvested cash balance to offset their custody fees and accounting fees. The credit amounts (if any) are disclosed in the Statement of Operations as a reduction to the funds’ operating expenses.

(h) Accounting Estimates:

The accounting policies described in this report conform with accounting principles generally accepted in the United States of America. 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.

(i) Federal Income Taxes:

The funds intend to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains (if any) to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.

(j) Indemnification:

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

(k) Accounting Pronouncements:

The funds adopted Financial Accounting Standard Board (“FASB”) Statement of Financial Accounting Standards No. 157 (“SFAS No. 157”), Fair Value Measurements, effective November 1, 2008. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements.

Various inputs are used in determining the value of the funds’ investments. SFAS No. 157 establishes a three-tier hierarchy of inputs to establish a classification of fair value measurements for disclosure purposes. These inputs are summarized in the three broad levels listed below:


	•	Level 1 — quoted prices in active markets for identical securities

	•	Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

	•	Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of April 30, 2009:


	S&P 500 Index Fund				Institutional Select S&P 500 Fund				1000 Index Fund
Valuation	Investments in		Other Financial		Investments in		Other Financial		Investments in		Other Financial
Inputs	Securities		Instruments*		Securities		Instruments*		Securities		Instruments*

Level 1		$4,553,088		$2,605		$2,413,924		$6,862		$3,704,417		$215
Level 2		33,958		—		54,287		—		1,538		—
Level 3		—		—		—		—		—		—

Total		$4,587,046		$2,605		$2,468,211		$6,862		$3,705,955		$215

Schwab Equity Index Funds

Financial Notes (continued)

2. Significant Accounting Policies (continued):
(All dollar amounts are x 1,000)


	Small-Cap Index Fund				Total Stock Market Index Fund				International Index Fund
Valuation	Investments in		Other Financial		Investments in		Other Financial		Investments in		Other Financial
Inputs	Securities		Instruments**		Securities		Instruments*		Securities		Instruments**

Level 1		$965,147		$—		$931,915		$1,450		$141,013		$—
Level 2		3,303		—		13,714		—		898,130		—
Level 3		—		—		3		—		38		—

Total		$968,450		$—		$945,632		$1,450		$1,039,181		$—


*	Other Financial Instruments are future or forward contracts which are not included in Portfolio Holdings and are valued at unrealized appreciation or depreciation.


**	The fund had no Other Financial Instruments.

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:


	Investments in Securities
	Total
	Stock Market			International
	Index Fund			Index Fund

Balance as of 11/01/08		$3			$—
Accrued discount/premiums		—			—
Realized gain (loss)		—			—
Change in unrealized appreciation (depreciation)		1			1
Net purchase (sales)		(1	)		37
Transfer in and/or out of Level 3		—			—
Balance as of 04/30/09		3			38

All net realized and unrealized gains (losses) in the table above are reflected in the accompanying statement of operations. Net unrealized gains (losses) relate to those financial instruments held by the Fund at April 30, 2009.

In April 2009, the FASB issued FASB Staff Position (“FSP”) No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP No. 157-4”). FSP No. 157-4 provides additional guidance for estimating fair value in accordance with SFAS No. 157 when the volume and level of activity for the asset or liability have significantly decreased. FSP No. 157-4 is effective for interim and annual reporting periods ending after June 15, 2009. Management is currently evaluating the impact the adoption of FSP No. 157-4 on the funds’ or Investment Company’s financial statement disclosures.

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”). SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. SFAS No. 161 requires enhanced disclosures about funds’ derivative and hedging activities. Management is currently evaluating the impact of the adoption of SFAS No. 161 on the funds’ financial statement disclosures.

3. Risk Factors:

Investing in the funds may involve certain risks, as described in the prospectus, including, but not limited to, those described below:

Stock markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of your investment in a fund will fluctuate, which means that you could lose money.

Your investment follows either the U.S. stock market or the performance of a mix of international large-cap stocks, as measured by an index. It follows this market during upturns as well as downturns. Because of its indexing strategy, the funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the funds’ expenses, the funds’ performance is normally below that of the index.

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. Individual companies may report poor results or be negatively affected by industry

Schwab Equity Index Funds

Financial Notes (continued)

3. Risk Factors (continued):

and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. In addition, the equity market tends to move in cycles which may cause stock prices to fall over short or extended periods of time.

Historically, small-cap stocks have been riskier than large and mid-cap stocks. Stock prices of smaller companies may be based in substantial part on future expectations rather than current achievements and may move sharply especially during market upturns and downturns. Small-cap companies themselves may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments — bonds or large-cap stocks, for instance — a fund’s performance also will lag those investments.

A fund’s investment in securities of foreign issuers involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risk of adverse changes in foreign economic, political, regulatory and other conditions, or changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges). In certain countries, legal remedies available to investors may be more limited than those available with respect to investments in the United States. The securities of some foreign companies may be less liquid and, at times more volatile than securities of comparable U.S. companies. A fund may also experience more rapid or extreme changes in value as compared to a fund that invests solely in securities of U.S. companies because the securities markets of many foreign countries are relatively small with a limited number of companies representing a small number of industries.

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

4. Affiliates and Affiliated Transactions:

(All dollar amounts are x 1,000)

Charles Schwab Investment Management, Inc. (CSIM or the investment adviser), a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement (Advisory Agreement) between it and the trust.

For its advisory and administrative services to each fund, the investment adviser is entitled to receive an annual fee payable monthly based on the fund’s average daily net assets described as follows:


			Institutional
	S&P 500		Select S&P		1000
Average daily net assets	Index Fund		500 Fund		Index Fund

First $500 million		0.15%		0.15%		0.30%
$500 million to $5 billion		0.09%		0.09%		0.22%
$5 billion to $10 billion		0.08%		0.08%		0.20%
over $10 billion		0.07%		0.07%		0.18%

Total

Small-Cap

Stock Market

International

Average daily net assets

Index Fund

First $500 million

0.33%

0.30%

0.43%

Over $500 million

0.28%

0.22%

0.38%

Charles Schwab & Co., Inc. (“Schwab”) is an affiliate of the investment adviser and is the trust’s transfer agent and shareholder services agent.

Schwab Equity Index Funds

Financial Notes (continued)

4. Affiliates and Affiliated Transactions (continued):
(All dollar amounts are x 1,000)

For its transfer agent and shareholder services, Schwab is entitled to receive an annual fee payable monthly based on each fund’s average daily net assets described as follows:


	Transfer Agent Fees		Shareholder Service Fees

Investor Shares		0.05%		0.20%
Select Shares		0.05%		0.05%
e. Shares*		0.05%		0.05%
Institutional Select Shares*		0.05%		0.05%


*	e.Shares is only offered by S&P 500 Index Fund and Institutional Select Shares is only offered by Institutional Select S&P 500 Fund.

Although these agreements specify certain fees for these services, CSIM and Schwab had previously made additional agreements with the funds to limit the total expenses charged, excluding interest, taxes and certain non-routine expenses, through February 27, 2011, as follows:

Institutional

Total

S&P 500

Select S&P

1000

Small-Cap

Stock Market

International

Index Fund

500 Fund

Index Fund

Investor Shares

0.37%

n/a

0.51%

0.60%

0.58%

0.69%

Select Shares

0.19%

n/a

0.36%

0.42%

0.39%

0.50%

e.Shares*

0.28%

n/a

Institutional Select Shares*

n/a

0.10%

n/a

Effective May 5, 2009, CSIM and Schwab have agreed to limit the net operating expenses charged, excluding interest, taxes and certain non-routine expenses for as long as CSIM serves as the adviser, as follows:

Institutional

Total

S&P 500

Select S&P

1000

Small-Cap

Stock Market

International

Index Fund

500 Fund

Index Fund

Investor Shares

0.09%

n/a

0.29%

0.19%

0.09%

0.19%

Select Shares

0.09%

n/a

0.29%

0.19%

0.09%

0.19%

e.Shares*

0.09%

n/a

Institutional Select Shares*

n/a

0.09%

n/a


*	e.Shares is only offered by S&P 500 Index Fund and Institutional Select Shares is only offered by Institutional Select S&P 500 Fund.

Certain Schwab Funds may own shares of other Schwab Funds. The table below reflects the percentage of each Equity Index Fund owned by other Schwab Funds as of April 30, 2009.

Schwab Equity Index Funds

Financial Notes (continued)

4. Affiliates and Affiliated Transactions (continued):
(All dollar amounts are x 1,000)


			Institutional
	S&P 500		Select S&P			Small-Cap		International
	Index Fund		500 Fund			Index Fund		Index Fund

Schwab MarketTrack Portfolios:
All Equity Portfolio		—%		6.6%			10.2%		10.9%
Growth Portfolio		—%		8.0%			10.7%		9.5%
Balanced Portfolio		—%		4.6%			6.1%		5.6%
Conservative Portfolio		0.3%		1.4%			2.6%		2.4%
Schwab Annuity Portfolios:
Growth Portfolio II		—%		0.3%			0.6%		0.6%
Schwab Target Funds:
Target 2010		—%		0.2%			—%		—%
Target 2015		—%		0.0%	*		—%		—%
Target 2020		—%		0.8%			—%		—%
Target 2025		—%		0.1%			—%		—%
Target 2030		—%		0.8%			—%		—%
Target 2035		—%		0.1%			—%		—%
Target 2040		—%		0.7%			—%		—%


*	Less than 0.05%

As of April 30, 2009, the shares owned by the Charitable Giving Trust as a percentage of the total shares of the Schwab Institutional Select S&P 500 Fund was 1.59%.

The funds may make direct transactions with certain other Schwab Funds when practical. 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 officers. As of April 30, 2009, each fund’s total security transactions with other Schwab Funds were as follows:


S&P 500 Index			$—
Institutional Select S&P 500 Fund			111,447
1000 Index Fund			56,297
Small-Cap Index Fund			56,297
Total Stock Market Index Fund			—
International Index Fund			—

Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions within the Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. There was no interfund borrowing or lending activity for any fund during the period.

5. Board of Trustees:

Trustees may include people who are officers and/or directors of the investment adviser or Schwab. Federal securities law limit the percentage of such “interested persons” who may serve on a trust’s board, and the trusts were in compliance with these limitations throughout the report period. The trusts did not pay any of these persons for their service as trustees, but the trusts did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.

6. Borrowing from Banks:

The funds may borrow money from banks and custodians. The funds covered in this report have custodian overdraft facilities, a committed line of credit of $150 million with State Street Corp., an uncommitted line of credit of $100 million with Bank of

Schwab Equity Index Funds

Financial Notes (continued)

6. Borrowing from Banks (continued):

America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman. The funds pay interest on the amounts they borrow at rates that are negotiated periodically.

The funds had no borrowings from the line of credit during the period. However, certain funds utilized their overdraft facility and incurred interest expense, which is disclosed in the Statement of Operations. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.

7. Purchases and Sales of Investment Securities:

(All dollar amounts are x 1,000)

For the period ended April 30, 2009, purchases and sales of securities (excluding short-term obligations) were as follows:


	Purchases of Securities		Sales/Maturities of Securities

S&P 500 Index Fund		$103,166		$102,483
Institutional Select S&P 500 Fund		336,399		12,561
1000 Index Fund		110,083		233,094
Small-Cap Index Fund		252,641		225,788
Total Stock Market Index Fund		43,769		15,382
International Index Fund		90,754		130,920

8. Redemption Fee:

(All dollar amounts are x 1,000)

The funds charges a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds on the Statement of Changes in Net Assets. The redemption fees charged during the current period and prior fiscal year are:


	Current Period		Prior Period
	(11/01/08-4/30/09)		(11/01/07-10/31/08)

S&P 500 Index Fund		$164		$167
Institutional Select S&P 500 Fund		76		76
1000 Index Fund		99		103
Small-Cap Index Fund		23		18
Total Stock Market Index Fund		50		43
International Index Fund		19		29

9. Other:

(All dollar amounts are x 1,000)

As of the close of business on September 18, 2008, Lehman Brothers Holdings Inc. was in default of the security lending agreement with the Schwab S&P 500 Index Fund, Schwab Institutional Select S&P 500 Fund, Schwab 1000 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund (“the Funds”). As a result, the Funds took possession of the collateral and repurchased the securities on a loan through open market purchases. The collateral held exceeded the replacement value of the securities. In accordance with Accounting for Transfers of Financial Assets and Repurchase Financing Transactions (“FAS 140”) the Funds recognized the following gains or losses that are not recognized for federal income tax purposes:


Schwab S&P 500 Index Fund	$980
Schwab Institutional Select S&P 500 Fund	(2,613	)
Schwab 1000 Index Fund	27,130
Schwab Small-Cap Index fund	(20,239	)
Schwab Total Stock Market Index Fund	1,738
Schwab International Index Fund	(101	)

Schwab Equity Index Funds

Financial Notes (continued)

10. Federal Income Taxes:

(All dollar amounts are x 1,000)

Capital loss carry forwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2008, the following funds had capital loss carry forwards available to offset net capital gains before the expiration dates:


			Institutional						Total
	S&P 500		Select S&P		1000		Small-Cap		Stock Market		International
	Index Fund		500 Fund		Index Fund		Index Fund		Index Fund		Index Fund

2009		$7,194		$6,440		$—		$—		$—		$61,592
2010		400,268		27,646		—		—		—		112,722
2011		72,381		1,609		—		—		—		39,016
2012		29,212		—		—		—		—		8,278
2013		175,896		—		—		—		—		—
2014		109,257		2,359		—		—		—		—
2015		—		—		—		—		—		—
2016		47,044		89,645		9,317		7,310		25,404		3,212

Total		$841,252		$127,699		$9,317		$7,310		$25,404		$224,820

As of October 31, 2008, 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 funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended April 30, 2009, the Funds did not incur any interest or penalties.

11. Subsequent Event:

The Board of Trustees of the Trust (the “Board”) has approved an Agreement and Plan of Reorganization that would provide for the reorganization of the Institutional Select S&P 500 Fund into the S&P 500 Fund. On or about September 9, 2009, the Institutional Select S&P 500 Fund will transfer its assets and liabilities to the S&P 500 Fund, and subsequently distribute those S&P 500 Fund shares to the shareholders of the Institutional Select S&P 500 Fund (the “Reorganization”). After the Reorganization is completed, shareholders of the Institutional Select S&P 500 Fund will become shareholders of the S&P 500 Fund. The Reorganization is intended to be tax-free, meaning that the Institutional Select S&P 500 Fund’s shareholders will become shareholders of the S&P 500 Fund without realizing any gain or loss for federal income tax purposes.

Trustees and Officers

The tables below give information about the trustees and officers for Schwab Capital Trust which includes the funds covered in this report. The “Fund Complex” includes the Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust. As of April 30, 2009, the Fund Complex included 83 funds.

The address for all trustees and officers is 101 Montgomery Street, San Francisco, CA 94104. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.


Independent Trustees
Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served¹)	During the Past Five Years	the Trustee		Other Directorships



Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.)	Chairman of JDN Corporate Advisory LLC.		83	Board 1–Director, Redwood Trust, Inc. Board 2–Director, PMI Group, Inc.


John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust since 2008.)	Senior Fellow: The Hoover Institution at Stanford University; Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University		69	Board 1–Director, Gilead Sciences, Inc. Board 2–Director, Monaco Coach Corporation Board 3–Director, Venture Lending and Leasing, Inc.


William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.)	Dean Emeritus, Haas School of Business, University of California, Berkeley. Until February 2004, Co-Chief Executive Officer, Aphton Corp. (bio-pharmaceuticals).		83	Board 1–Director, Mission West Properties Board 2–Director, TOUSA Board 3–Director, Harris-Stratex Networks Board 4–Director, Genitope Corp. Board 5– Director, Ditech Networks Board 6–Director, Rubicon Limited


Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.)	Chairman, Chief Executive Officer and founder of Smith Graham & Co. (investment advisors).		69	Board 1–Board of Cooper Industries Board 2–Chairman of the Audit Committee of Oneok Partners LP


Donald R. Stephens 1938 Trustee (Trustee of Schwab Capital Trust since 1989.)	Managing Partner, D. R. Stephens & Company (investments).		69	Not Applicable.


Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.)	Senior Managing Director, Chairman of the Finance Committee, GSC Group, until December 2007; General Partner, Goldman Sachs & Co., until June 2005.		69	Board 1–Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals


Michael W. Wilsey 1943 Trustee (Trustee of Schwab Capital Trust since 1989.)	Chairman, Chief Executive Officer, Wilsey Bennett, Inc. (real estate investment and management, and other investments).		69	Not Applicable.


Interested Trustees
Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served )	During the Past Five Years	the Trustee		Other Directorships



Charles R. Schwab²1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1989.)	Chairman, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc.		69	Not Applicable.


Walter W. Bettinger II²1960 Trustee (Trustee of Schwab Capital Trust since 2008.)	As of October 2008, Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation; President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation; Director, Charles Schwab Bank; Executive Vice President and President – Schwab Investor Services, The Charles Schwab Corporation; Executive Vice President and President – Schwab Investor Services, Charles Schwab & Co., Inc.; Chairman and President, Schwab Retirement Plan Services, Inc.; President and Chief Executive Officer, The Charles Schwab Trust Company; Director, Charles Schwab Bank, N.A., Schwab Retirement Plan Services, and Schwab Retirement Technologies.		69	Not Applicable.


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



Randall W. Merk 1954 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2007.)		Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002-present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc.


George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.)		Senior Vice President and Chief Financial Officer, Charles Schwab Investment Management, Inc.; Chief Financial Officer, Laudus Trust and Laudus Institutional Trust; Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited. Through June 2007, Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust; Chief Financial Officer, Mutual Fund Division, UST Advisors, Inc. From December 1999 to November 2004, Sr. Vice President, Financial Reporting, Charles Schwab & Co. Inc.


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


Jeffrey Mortimer 1963 Senior Vice President and Chief Investment Officer (Officer of Schwab Capital Trust since 2004.)		Senior Vice President and Chief Investment Officer, Charles Schwab Investment Management, Inc.; President, CEO and Chief Investment Officer, Laudus Trust and Laudus Institutional Trust. Prior to March 31, 2008, Vice President and Chief Investment Officer, Laudus Trust and Laudus Institutional Trust.


Bari Havlik 1961 Chief Compliance Officer (Officer of Schwab Capital Trust since 2009.)		Senior Vice President, Chief Compliance Officer for Charles Schwab & Co. Inc. and head of Global Compliance for the Charles Schwab Corporation since 2004. Chief Compliance Officer for Charles Schwab Investment Management, Inc since 2009.


Koji E. Felton 1961 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 1998.)		Senior Vice President, Chief Counsel and Corporate Secretary, Charles Schwab Investment Management, Inc.; Senior Vice President and Deputy General Counsel, Charles Schwab & Co., Inc. Through June 2007, Chief Legal Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust. Until 2006, Chief Legal Officer, Laudus Trust and Laudus Institutional Trust.


Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.)		Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Institutional Trust; since 2006, Chief Counsel, Laudus Trust and Laudus Institutional Trust. Until July 2005, Senior Associate, Paul Hastings Janofsky & Walker LLP.


Michael Haydel 1972 Vice President (Officer of Schwab Capital Trust since 2006.)		Vice President, Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President and AML Officer, Laudus Trust and Laudus Institutional Trust. Until March 2004, Director Charles Schwab & Co., Inc.


¹	Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after 20 years of service as a trustee, whichever comes first. Independent trustees elected prior to January 1, 2000 will retire on the following schedule: Messrs. Stephens and Wilsey will retire on December 31, 2010.

²	Messrs. Schwab and Bettinger are Interested Trustees because they are employees of Schwab and/or the investment adviser. In addition to their employment with Schwab and/or the investment adviser, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation.

³	The President, Treasurer and Secretary 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.

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.

bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.

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.

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.

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

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.

Schwab Funds^® offers you an extensive family of mutual funds, each one based on a clearly defined investment approach and using disciplined management strategies. The list at right shows all currently available Schwab Funds.

Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure 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 Schwab’s website at www.schwab.com, the SEC’s website at http://www.sec.gov, or by contacting Schwab Funds at 1.800.435.4000.

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 Schwab’s website at www.schwab.com/schwabfunds or the SEC’s website at http://www.sec.gov .

The Schwab Funds Family^®

Stock Funds

Schwab Premier Equity Fund^®

Schwab Core Equity Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedge Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

Schwab^® International Core Equity Fund

Schwab Fundamental US Large^* Company Index Fund

Schwab Fundamental US Small-Mid^* Company Index Fund

Schwab Fundamental International^* Large Company Index Fund

Schwab Fundamental International^* Small-Mid Company Index Fund

Schwab Fundamental Emerging Markets^* Index Fund

Schwab Global Real Estate Fund^tm

Schwab Institutional Select^® S&P 500 Fund

Schwab S&P 500 Index Fund

Schwab 1000 Index^® Fund

Schwab Small-Cap Index Fund^®

Schwab Total Stock Market Index Fund^®

Schwab International Index Fund^®

Asset Allocation Funds

Schwab Balanced Fund^tm

Schwab MarketTrack All Equity Portfolio^tm

Schwab MarketTrack Growth Portfolio^tm

Schwab MarketTrack Balanced Portfolio^tm

Schwab MarketTrack Conservative Portfolio^tm

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 Retirement Income Fund

Schwab^® Monthly Income Fund – Moderate Payout

Schwab^® Monthly Income Fund – Enhanced Payout

Schwab^® Monthly Income Fund – Maximum Payout

Bond Funds

Schwab YieldPlus Fund^®

Schwab Short-Term Bond Market Fund^tm

Schwab^® Premier Income Fund

Schwab Total Bond Market Fund^tm

Schwab GNMA Fund^tm

Schwab Inflation Protected Fund^tm

Schwab Tax-Free YieldPlus Fund^tm

Schwab Tax-Free Bond Fund^tm

Schwab Long-Term Tax-Free Bond Fund^tm

Schwab California Tax-Free YieldPlus Fund^tm

Schwab California Tax-Free Bond Fund^tm

Schwab Money Funds

Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity¹. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments^®.


	^* SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC.
	¹ Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money.

Schwab 1000 Index Fund

Portfolio Holdings as of April 30, 2009 (Unaudited)

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

The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.


				Cost		Value
Holdings by Category				($ x 1,000)		($ x 1,000)

	99.7	%	Common Stock		2,561,394		3,699,003
	0.2	%	Foreign Common Stock		7,039		5,414
	—	%	Short-Term Investments		1,538		1,538

	99.9	%	Total Investments		2,569,971		3,705,955
	0.2	%	Collateral Invested for Securities on Loan		7,838		7,838
	(0.1	)%	Other Assets and Liabilities, Net				(2,099	)

	100.0	%	Net Assets				3,711,694


	Number of		Value
Security	Shares		($ x 1,000)
Common Stock 99.7% of net assets

Automobiles & Components 0.5%
BorgWarner, Inc.		53,698		1,554
Ford Motor Co. *		1,221,887		7,307
General Motors Corp.		262,305		504
Gentex Corp.		66,272		886
Harley-Davidson, Inc.		106,092		2,351
Johnson Controls, Inc.		254,874		4,845
The Goodyear Tire & Rubber Co. *		105,400		1,158
WABCO Holdings, Inc.		23,000		368

				18,973

Banks 2.5%
Associated Banc-Corp.		57,148		884
Astoria Financial Corp.		23,304		192
BancorpSouth, Inc.		30,000		697
Bank of Hawaii Corp.		23,032		809
BB&T Corp.		238,700		5,571
BOK Financial Corp.		10,000		377
CapitalSource, Inc.		77,579		240
Capitol Federal Financial		6,000		234
City National Corp.		16,532		605
Comerica, Inc.		70,128		1,471
Commerce Bancshares, Inc.		31,807		1,053
Cullen/Frost Bankers, Inc.		24,800		1,168
Fifth Third Bancorp		311,384		1,277
First Citizens BancShares, Inc., Class A		1,150		138
First Horizon National Corp.		77,000		886
First Niagara Financial Group, Inc.		50,000		677
FirstMerit Corp.		32,000		621
Fulton Financial Corp.		72,544		479
Hudson City Bancorp, Inc.		220,240		2,766
Huntington Bancshares, Inc.		165,098		461
International Bancshares Corp.		10,950		148
Investors Bancorp, Inc. *		10,100		93
KeyCorp		205,914		1,266
M&T Bank Corp.		35,543		1,864
Marshall & Ilsley Corp.		118,531		685
New York Community Bancorp, Inc.		137,882		1,559
NewAlliance Bancshares, Inc.		45,000		581
People’s United Financial, Inc.		140,593		2,196
PNC Financial Services Group, Inc.		184,734		7,334
Popular, Inc.		129,386		370
Regions Financial Corp.		313,806		1,409
SunTrust Banks, Inc.		157,693		2,277
Synovus Financial Corp.		131,441		425
TCF Financial Corp.		48,584		676
TFS Financial Corp.		34,000		399
U.S. Bancorp		746,805		13,607
UMB Financial Corp.		6,350		291
Valley National Bancorp		47,555		688
Wells Fargo & Co.		1,796,396		35,946
Westamerica Bancorp		10,000		536
Wilmington Trust Corp.		30,237		439
Zions Bancorp		50,098		548

				93,943

Capital Goods 7.9%
3M Co.		294,934		16,988
Acuity Brands, Inc.		18,500		532
Aecom Technology Corp. *		34,000		875
AGCO Corp. *		41,700		1,013
Alliant Techsystems, Inc. *		13,438		1,070
AMETEK, Inc.		49,247		1,586
Armstrong World Industries, Inc. *		4,300		78
Bucyrus International, Inc.		24,000		521
Carlisle Cos., Inc.		20,236		460
Caterpillar, Inc.		260,276		9,261
CLARCOR, Inc.		21,000		653
Cooper Industries Ltd., Class A		74,800		2,453

See financial notes. 1

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
Crane Co.		23,584		545
Cummins, Inc.		92,532		3,146
Curtiss-Wright Corp.		18,000		575
Danaher Corp.		110,320		6,447
Deere & Co.		184,746		7,623
Donaldson Co., Inc.		25,900		854
Dover Corp.		82,937		2,553
Eaton Corp.		67,959		2,977
Emerson Electric Co.		326,488		11,114
Fastenal Co.		50,900		1,952
First Solar, Inc. *		16,000		2,997
Flowserve Corp.		25,341		1,721
Fluor Corp.		81,558		3,089
GATX Corp.		20,000		602
General Cable Corp. *		20,000		543
General Dynamics Corp.		167,224		8,640
General Electric Co.		4,453,122		56,332
Goodrich Corp.		56,598		2,506
Graco, Inc.		25,194		594
Granite Construction, Inc.		15,000		592
Harsco Corp.		38,900		1,072
Honeywell International, Inc.		309,099		9,647
Hubbell, Inc., Class B		25,332		841
Icahn Enterprises L.P.		3,300		96
IDEX Corp.		37,306		942
Illinois Tool Works, Inc.		169,804		5,570
Ingersoll-Rand Co., Ltd., Class A		143,379		3,121
ITT Corp.		79,544		3,262
Jacobs Engineering Group, Inc. *		54,856		2,087
Joy Global, Inc.		45,008		1,148
KBR, Inc.		70,000		1,093
Kennametal, Inc.		35,198		720
L-3 Communications Holdings, Inc.		51,774		3,943
Lennox International, Inc.		22,000		702
Lincoln Electric Holdings, Inc.		18,000		802
Lockheed Martin Corp.		141,704		11,128
Masco Corp.		143,736		1,273
McDermott International, Inc. *		102,712		1,658
Moog, Inc., Class A *		15,000		402
MSC Industrial Direct Co., Inc., Class A		9,658		394
Navistar International Corp. *		22,000		832
Northrop Grumman Corp.		141,132		6,824
Owens Corning, Inc. *		43,300		775
PACCAR, Inc.		158,089		5,603
Pall Corp.		55,133		1,456
Parker Hannifin Corp.		73,453		3,331
Pentair, Inc.		46,300		1,233
Precision Castparts Corp.		61,301		4,589
Quanta Services, Inc. *		70,000		1,591
Raytheon Co.		178,690		8,082
Rockwell Automation, Inc.		67,049		2,118
Rockwell Collins, Inc.		70,253		2,694
Roper Industries, Inc.		39,091		1,782
Seaboard Corp.		50		47
Spirit AeroSystems Holdings, Inc., Class A *		22,000		280
SPX Corp.		25,214		1,164
SunPower Corp., Class A *		32,000		876
Teledyne Technologies, Inc. *		15,000		479
Terex Corp. *		47,582		657
Textron, Inc.		116,138		1,246
The Boeing Co.		311,889		12,491
The Shaw Group, Inc. *		30,669		1,028
The Timken Co.		43,594		701
Thomas & Betts Corp. *		23,129		720
TransDigm Group, Inc. *		8,000		281
Trinity Industries, Inc.		33,691		492
Tyco International Ltd.		204,598		4,861
United Technologies Corp.		402,863		19,676
URS Corp. *		37,000		1,630
USG Corp. *		15,006		223
Valmont Industries, Inc.		2,500		159
W.W. Grainger, Inc.		28,176		2,363
Wabtec Corp.		19,000		725
Woodward Governor Co.		11,750		235

				292,037

Commercial & Professional Supplies 0.9%
Avery Dennison Corp.		42,460		1,220
Cintas Corp.		48,110		1,235
Clean Harbors, Inc. *		10,000		501
Copart, Inc. *		26,914		845
Corrections Corp. of America *		50,000		706
Covanta Holding Corp. *		54,848		774
Equifax, Inc.		57,900		1,688
FTI Consulting, Inc. *		18,000		988
IHS, Inc., Class A *		12,000		496
Iron Mountain, Inc. *		73,387		2,091
Manpower, Inc.		36,791		1,585
Monster Worldwide, Inc. *		34,500		476
Pitney Bowes, Inc.		92,741		2,276
R.R. Donnelley & Sons Co.		99,419		1,158
Republic Services, Inc.		137,281		2,883
Robert Half International, Inc.		71,491		1,717
Rollins, Inc.		20,000		360
Stericycle, Inc. *		39,098		1,841
Tetra Tech, Inc. *		26,000		639
The Brink’s Co.		19,915		565
The Dun & Bradstreet Corp.		24,825		2,021
Waste Connections, Inc. *		36,000		928
Waste Management, Inc.		211,377		5,637
Watson Wyatt Worldwide, Inc., Class A		16,000		849

				33,479

2 See financial notes.

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
Consumer Durables & Apparel 1.1%
Centex Corp.		52,500		574
Coach, Inc. *		147,310		3,609
D.R. Horton, Inc.		111,397		1,454
Eastman Kodak Co.		100,321		306
Fortune Brands, Inc.		66,628		2,619
Garmin Ltd.		31,686		798
Hanesbrands, Inc. *		18,100		298
Harman International Industries, Inc.		28,097		511
Hasbro, Inc.		54,625		1,456
KB HOME		28,176		509
Leggett & Platt, Inc.		72,044		1,035
Lennar Corp., Class A		46,575		454
M.D.C. Holdings, Inc.		14,679		502
Mattel, Inc.		163,197		2,441
Mohawk Industries, Inc. *		24,839		1,175
Newell Rubbermaid, Inc.		116,426		1,217
NIKE, Inc., Class B		168,568		8,845
NVR, Inc. *		2,298		1,161
Polo Ralph Lauren Corp.		26,495		1,426
Pulte Homes, Inc.		94,712		1,090
Snap-on, Inc.		27,350		928
The Black & Decker Corp.		25,880		1,043
The Stanley Works		32,594		1,240
Toll Brothers, Inc. *		54,500		1,104
Tupperware Brands Corp.		23,000		576
VF Corp.		39,182		2,322
Whirlpool Corp.		34,815		1,572

				40,265

Consumer Services 1.9%
Apollo Group, Inc., Class A *		46,171		2,907
Brinker International, Inc.		44,600		790
Burger King Holdings, Inc.		30,000		490
Career Education Corp. *		31,000		683
Carnival Corp.		189,260		5,087
Chipotle Mexican Grill, Inc., Class A *		12,000		973
Choice Hotels International, Inc.		7,300		219
Corinthian Colleges, Inc. *		38,000		585
Darden Restaurants, Inc.		62,765		2,321
DeVry, Inc.		27,000		1,149
H&R Block, Inc.		130,798		1,980
International Game Technology		139,526		1,723
International Speedway Corp., Class A		13,969		331
ITT Educational Services, Inc. *		13,301		1,340
Las Vegas Sands Corp. *		112,663		881
Marriott International, Inc., Class A		134,756		3,175
McDonald’s Corp.		475,036		25,315
MGM MIRAGE *		55,987		469
Panera Bread Co., Class A *		15,000		840
Penn National Gaming, Inc. *		29,860		1,016
Royal Caribbean Cruises Ltd.		63,591		937
Scientific Games Corp., Class A *		19,143		335
Service Corp. International		118,400		536
Starbucks Corp. *		329,627		4,766
Starwood Hotels & Resorts Worldwide, Inc.		88,442		1,845
Strayer Education, Inc.		5,000		947
Weight Watchers International, Inc.		5,829		145
Wendy’s/Arby’s Group, Inc., Class A		150,000		750
Wyndham Worldwide Corp.		66,517		777
Wynn Resorts Ltd. *		35,942		1,410
Yum! Brands, Inc.		198,276		6,613

				71,335

Diversified Financials 5.8%
Affiliated Managers Group, Inc. *		15,459		879
AllianceBernstein Holding L.P.		35,189		616
American Express Co.		503,577		12,700
Ameriprise Financial, Inc.		99,857		2,631
Bank of America Corp.		2,731,741		24,394
Bank of New York Mellon Corp.		491,096		12,513
BlackRock, Inc.		10,265		1,504
Capital One Financial Corp.		169,453		2,837
CIT Group, Inc.		173,368		385
Citigroup, Inc. (c)		2,411,662		7,356
CME Group, Inc.		28,776		6,370
Discover Financial Services		201,824		1,641
Eaton Vance Corp.		50,384		1,379
Federated Investors, Inc., Class B		39,050		893
Franklin Resources, Inc.		66,586		4,027
Greenhill & Co., Inc.		3,900		302
IntercontinentalExchange, Inc. *		30,589		2,680
Janus Capital Group, Inc.		91,800		921
Jefferies Group, Inc.		50,652		991
JPMorgan Chase & Co.		1,592,978		52,568
Knight Capital Group, Inc., Class A *		20,000		310
Legg Mason, Inc.		63,714		1,279
Leucadia National Corp. *		75,164		1,596
Moody’s Corp.		91,126		2,690
Morgan Stanley		452,048		10,686
MSCI, Inc., Class A *		1,950		41
Northern Trust Corp.		93,076		5,060
NYSE Euronext		112,400		2,604
Och-Ziff Capital Management Group, Class A		25,000		186
Raymond James Financial, Inc.		33,649		528
SEI Investments Co.		58,748		824

See financial notes. 3

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
SLM Corp. *		190,324		919
State Street Corp.		187,350		6,394
T. Rowe Price Group, Inc.		112,950		4,351
TD Ameritrade Holding Corp. *		101,631		1,617
The Blackstone Group L.P.		328,000		3,211
The Charles Schwab Corp. (a)		403,065		7,449
The Goldman Sachs Group, Inc.		212,932		27,362
The Nasdaq OMX Group, Inc. *		62,137		1,195
Waddell & Reed Financial, Inc., Class A		30,000		672

				216,561

Energy 12.4%
Alpha Natural Resources, Inc. *		28,000		573
Anadarko Petroleum Corp.		197,748		8,515
Apache Corp.		142,800		10,404
Arch Coal, Inc.		58,200		813
Atwood Oceanics, Inc. *		20,000		446
Baker Hughes, Inc.		135,707		4,828
Bill Barrett Corp. *		12,000		312
BJ Services Co.		132,346		1,838
Boardwalk Pipeline Partners L.P.		7,800		160
BP Prudhoe Bay Royalty Trust		8,500		548
Buckeye Partners L.P.		14,000		538
Cabot Oil & Gas Corp.		44,774		1,352
Cameron International Corp. *		100,200		2,563
Chesapeake Energy Corp.		221,597		4,368
Chevron Corp.		858,277		56,732
Cimarex Energy Co.		29,215		786
CNX Gas Corp. *		8,000		206
Comstock Resources, Inc. *		17,000		586
Concho Resources, Inc. *		10,800		296
ConocoPhillips		630,366		25,845
CONSOL Energy, Inc.		82,598		2,584
Continental Resources, Inc. *		5,000		117
Denbury Resources, Inc. *		105,884		1,724
Devon Energy Corp.		188,582		9,778
Diamond Offshore Drilling, Inc.		28,929		2,095
Dresser-Rand Group, Inc. *		30,000		739
El Paso Corp.		314,781		2,172
El Paso Pipeline Partners L.P.		9,150		177
Enbridge Energy Partners L.P.		23,100		838
Encore Acquisition Co. *		18,000		525
Energy Transfer Equity L.P.		4,350		111
Energy Transfer Partners L.P.		40,400		1,598
ENSCO International, Inc.		67,928		1,921
Enterprise GP Holdings L.P.		5,300		129
Enterprise Products Partners L.P.		124,858		2,945
EOG Resources, Inc.		108,752		6,904
EXCO Resources, Inc. *		28,000		330
Exterran Holdings, Inc. *		25,599		529
Exxon Mobil Corp.		2,105,122		140,348
FMC Technologies, Inc. *		53,784		1,841
Forest Oil Corp. *		37,415		599
Frontier Oil Corp.		45,358		576
Halliburton Co.		382,788		7,740
Helmerich & Payne, Inc.		46,192		1,424
Hess Corp.		122,123		6,691
Holly Corp.		15,000		314
Kinder Morgan Energy Partners L.P.		68,700		3,281
Kinder Morgan Management L.L.C. *		29,097		1,188
Linn Energy L.L.C.		28,000		463
Magellan Midstream Partners L.P.		30,000		1,002
Marathon Oil Corp.		300,796		8,934
Massey Energy Co.		37,501		597
Murphy Oil Corp.		82,544		3,938
Nabors Industries Ltd. *		129,088		1,963
National-Oilwell Varco, Inc. *		181,726		5,503
Natural Resource Partners L.P.		6,450		148
Newfield Exploration Co. *		53,066		1,655
Noble Corp.		115,750		3,163
Noble Energy		76,161		4,322
NuStar Energy L.P.		16,895		851
Occidental Petroleum Corp.		343,316		19,325
Oceaneering International, Inc. *		19,000		866
ONEOK Partners L.P.		21,300		1,001
Overseas Shipholding Group, Inc.		8,000		230
Patterson-UTI Energy, Inc.		70,321		894
Peabody Energy Corp.		116,021		3,062
Petrohawk Energy Corp. *		93,000		2,195
Pioneer Natural Resources Co.		53,111		1,228
Plains All American Pipeline L.P.		43,032		1,822
Plains Exploration & Production Co. *		44,757		844
Pride International, Inc. *		72,494		1,646
Quicksilver Resources, Inc. *		35,890		292
Range Resources Corp.		65,628		2,623
Rowan Cos., Inc.		44,283		691
SandRidge Energy, Inc. *		43,000		351
Schlumberger Ltd.		507,106		24,843
SEACOR Holdings, Inc. *		7,000		460
Smith International, Inc.		91,759		2,372
Southern Union Co.		49,962		795
Southwestern Energy Co. *		146,688		5,260
Spectra Energy Corp.		266,321		3,862
St. Mary Land & Exploration Co.		20,513		367
Sunoco Logistics Partners L.P.		3,500		182
Sunoco, Inc.		54,500		1,445
Superior Energy Services, Inc. *		35,000		672
Teekay Corp.		18,968		274
TEPPCO Partners L.P.		32,277		879
Tesoro Corp.		51,312		782
The Williams Cos., Inc.		259,221		3,655
Tidewater, Inc.		24,568		1,063

4 See financial notes.

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
Ultra Petroleum Corp. *		63,612		2,723
Unit Corp. *		17,200		469
Valero Energy Corp.		223,020		4,425
W&T Offshore, Inc.		10,000		93
Walter Industries, Inc.		17,000		388
Weatherford International Ltd. *		302,496		5,030
Whiting Petroleum Corp. *		16,000		524
XTO Energy, Inc.		233,197		8,083

				459,182

Food & Staples Retailing 2.9%
BJ’s Wholesale Club, Inc. *		23,200		773
Costco Wholesale Corp.		183,599		8,923
CVS Caremark Corp.		608,511		19,338
Ruddick Corp.		8,450		217
Safeway, Inc.		189,797		3,749
SUPERVALU, Inc.		76,356		1,248
Sysco Corp.		258,190		6,024
The Kroger Co.		278,713		6,026
Wal-Mart Stores, Inc.		950,927		47,927
Walgreen Co.		421,769		13,256
Whole Foods Market, Inc.		56,216		1,165

				108,646

Food, Beverage & Tobacco 5.3%
Altria Group, Inc.		876,965		14,321
Archer-Daniels-Midland Co.		269,985		6,647
Brown-Forman Corp., Class B		43,540		2,025
Bunge Ltd.		51,592		2,477
Campbell Soup Co.		88,658		2,280
Central European Distribution Corp. *		5,000		112
Coca-Cola Enterprises, Inc.		139,072		2,373
ConAgra Foods, Inc.		183,997		3,257
Constellation Brands, Inc., Class A *		76,932		892
Corn Products International, Inc.		32,500		777
Dean Foods Co. *		67,533		1,398
Del Monte Foods Co.		75,738		572
Dr. Pepper Snapple Group, Inc. *		90,000		1,864
Flowers Foods, Inc.		30,000		693
Fresh Del Monte Produce, Inc. *		12,000		174
General Mills, Inc.		139,000		7,046
H.J. Heinz Co.		130,698		4,499
Hansen Natural Corp. *		33,000		1,345
Hormel Foods Corp.		27,247		852
Kellogg Co.		105,231		4,431
Kraft Foods, Inc., Class A		624,564		14,615
Lorillard, Inc.		60,000		3,788
McCormick & Co., Inc.		52,754		1,554
Molson Coors Brewing Co., Class B		58,672		2,244
PepsiAmericas, Inc.		25,000		614
PepsiCo, Inc.		658,587		32,771
Philip Morris International, Inc.		849,065		30,736
Ralcorp Holdings, Inc. *		23,000		1,315
Reynolds American, Inc.		71,684		2,722
Sara Lee Corp.		290,172		2,414
Smithfield Foods, Inc. *		46,235		399
The Coca-Cola Co.		845,854		36,414
The Hershey Co.		66,424		2,401
The J.M. Smucker Co.		51,201		2,017
The Pepsi Bottling Group, Inc.		60,932		1,905
Tootsie Roll Industries, Inc.		5,768		140
Tyson Foods, Inc., Class A		116,959		1,233

				195,317

Health Care Equipment & Services 4.4%
Aetna, Inc.		201,077		4,426
Allscripts Healthcare Solutions, Inc.		12,900		160
AMERIGROUP Corp. *		22,000		657
AmerisourceBergen Corp.		64,510		2,170
Baxter International, Inc.		260,145		12,617
Beckman Coulter, Inc.		27,428		1,442
Becton, Dickinson & Co.		101,565		6,143
Boston Scientific Corp. *		636,507		5,353
C.R. Bard, Inc.		40,600		2,908
Cardinal Health, Inc.		147,610		4,988
Cerner Corp. *		30,326		1,632
CIGNA Corp.		120,254		2,370
Community Health Systems, Inc. *		40,206		918
Coventry Health Care, Inc. *		68,962		1,097
Covidien Ltd.		214,248		7,066
DaVita, Inc. *		43,625		2,023
DENTSPLY International, Inc.		63,000		1,803
Edwards Lifesciences Corp. *		23,696		1,502
Express Scripts, Inc. *		103,562		6,625
Gen-Probe, Inc. *		22,670		1,092
Haemonetics Corp. *		9,600		496
Health Net, Inc. *		51,000		736
Henry Schein, Inc. *		35,919		1,474
Hlth Corp. *		47,979		528
Hologic, Inc. *		105,370		1,566
Hospira, Inc. *		67,640		2,223
Humana, Inc. *		77,391		2,227
IDEXX Laboratories, Inc. *		26,298		1,034
Immucor, Inc. *		28,000		456
IMS Health, Inc.		76,989		967
Intuitive Surgical, Inc. *		17,215		2,474
Inverness Medical Innovations, Inc. *		28,000		904
Kinetic Concepts, Inc. *		25,492		631
Laboratory Corp. of America Holdings *		46,622		2,991
Lincare Holdings, Inc. *		33,050		797

See financial notes. 5

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
Magellan Health Services, Inc. *		16,000		473
Masimo Corp. *		16,000		462
McKesson Corp.		116,047		4,294
Medco Health Solutions, Inc. *		208,086		9,062
MEDNAX, Inc. *		20,354		731
Medtronic, Inc.		472,968		15,135
Omnicare, Inc.		43,433		1,117
Owens & Minor, Inc.		18,000		624
Patterson Cos., Inc. *		38,800		794
Psychiatric Solutions, Inc. *		14,000		271
Quest Diagnostics, Inc.		65,847		3,380
ResMed, Inc. *		26,708		1,027
St. Jude Medical, Inc. *		144,955		4,859
STERIS Corp.		20,000		482
Stryker Corp.		100,854		3,904
Teleflex, Inc.		16,746		720
Thoratec Corp. *		22,000		639
UnitedHealth Group, Inc.		514,112		12,092
Universal Health Services, Inc., Class B		19,537		985
Varian Medical Systems, Inc. *		58,271		1,944
VCA Antech, Inc. *		37,554		940
WellPoint, Inc. *		218,423		9,340
Zimmer Holdings, Inc. *		94,412		4,153

				163,924

Household & Personal Products 2.6%
Alberto-Culver Co.		37,750		841
Avon Products, Inc.		189,936		4,323
Church & Dwight Co., Inc.		28,997		1,578
Colgate-Palmolive Co.		212,427		12,533
Energizer Holdings, Inc. *		25,100		1,438
Herbalife Ltd.		21,509		426
Kimberly-Clark Corp.		176,384		8,668
NBTY, Inc. *		26,200		679
The Clorox Co.		59,025		3,308
The Estee Lauder Cos., Inc., Class A		50,854		1,521
The Procter & Gamble Co.		1,255,619		62,078

				97,393

Insurance 3.4%
Aflac, Inc.		202,613		5,854
Alleghany Corp. *		2,097		532
Allied World Assurance Co. Holdings Ltd.		15,000		557
American Financial Group, Inc.		40,405		710
American International Group, Inc.		1,159,536		1,600
American National Insurance Co.		6,937		471
Aon Corp.		116,463		4,915
Arch Capital Group Ltd. *		12,000		693
Arthur J. Gallagher & Co.		35,720		803
Aspen Insurance Holdings Ltd.		7,000		165
Assurant, Inc.		51,892		1,268
Axis Capital Holdings Ltd.		48,462		1,194
Berkshire Hathaway, Inc., Class A *		273		25,662
Brown & Brown, Inc.		53,376		1,039
Cincinnati Financial Corp.		74,417		1,782
CNA Financial Corp.		3,850		46
Endurance Specialty Holdings Ltd.		7,253		190
Erie Indemnity Co., Class A		18,085		639
Everest Re Group Ltd.		28,420		2,121
Fidelity National Financial, Inc., Class A		96,369		1,747
First American Corp.		42,560		1,195
Genworth Financial, Inc., Class A		179,539		424
Hanover Insurance Group, Inc.		26,400		792
HCC Insurance Holdings, Inc.		52,357		1,252
IPC Holdings Ltd.		7,650		199
Lincoln National Corp.		118,059		1,327
Loews Corp.		140,958		3,508
Markel Corp. *		3,431		985
Marsh & McLennan Cos., Inc.		221,720		4,676
MBIA, Inc. *		30,234		143
Mercury General Corp.		14,435		488
MetLife, Inc.		354,444		10,545
Montpelier Re Holdings Ltd.		16,000		199
Odyssey Re Holdings Corp.		12,000		460
Old Republic International Corp.		93,909		880
PartnerRe Ltd.		23,969		1,634
Principal Financial Group, Inc.		116,909		1,910
ProAssurance Corp. *		14,000		615
Prudential Financial, Inc.		188,497		5,444
Reinsurance Group of America, Inc.		27,310		868
RenaissanceRe Holdings Ltd.		26,407		1,285
StanCorp Financial Group, Inc.		24,842		681
The Allstate Corp.		235,698		5,499
The Chubb Corp.		153,492		5,979
The Hartford Financial Services Group, Inc.		163,795		1,879
The Progressive Corp. *		294,442		4,499
The Travelers Cos., Inc.		248,747		10,233
Torchmark Corp.		45,077		1,322
Transatlantic Holdings, Inc.		11,745		446
Unum Group		158,014		2,582
W. R. Berkley Corp.		67,125		1,605
Wesco Financial Corp.		519		155
White Mountains Insurance Group Ltd.		3,213		615
XL Capital Ltd., Class A		123,967		1,179

				127,491

Materials 3.7%
Air Products & Chemicals, Inc.		90,378		5,956

6 See financial notes.

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
Airgas, Inc.		36,451		1,572
AK Steel Holding Corp.		69,000		898
Albemarle Corp.		36,900		990
Alcoa, Inc.		431,520		3,914
Allegheny Technologies, Inc.		43,752		1,432
AptarGroup, Inc.		34,000		1,055
Ball Corp.		42,788		1,614
Bemis Co., Inc.		48,449		1,165
Cabot Corp.		19,816		289
Celanese Corp., Series A		58,243		1,214
CF Industries Holdings, Inc. *		19,000		1,369
Cliffs Natural Resources, Inc.		38,000		876
Commercial Metals Co.		51,294		763
Compass Minerals International, Inc.		11,000		530
Crown Holdings, Inc. *		75,676		1,669
Cytec Industries, Inc.		19,500		387
E.I. du Pont de Nemours & Co.		385,157		10,746
Eastman Chemical Co.		33,091		1,313
Ecolab, Inc.		74,968		2,890
FMC Corp.		35,552		1,732
Freeport-McMoRan Copper & Gold, Inc.		173,765		7,411
Greif, Inc., Class A		11,000		498
International Flavors & Fragrances, Inc.		36,208		1,130
International Paper Co.		214,607		2,717
Intrepid Potash, Inc. *		6,450		159
Martin Marietta Materials, Inc.		16,849		1,416
MeadWestvaco Corp.		84,583		1,325
Monsanto Co.		232,234		19,714
Nalco Holding Co.		41,943		684
Newmont Mining Corp.		191,508		7,706
Nucor Corp.		135,676		5,521
Olin Corp.		20,000		252
Owens-Illinois, Inc. *		71,577		1,746
Packaging Corp. of America		38,030		603
Pactiv Corp. *		61,660		1,348
PPG Industries, Inc.		74,206		3,269
Praxair, Inc.		131,228		9,791
Reliance Steel & Aluminum Co.		27,322		963
Royal Gold, Inc.		11,000		398
RPM International, Inc.		30,000		415
Schnitzer Steel Industries, Inc., Class A		7,000		347
Sealed Air Corp.		73,902		1,409
Sigma-Aldrich Corp.		56,308		2,468
Silgan Holdings, Inc.		5,500		256
Sonoco Products Co.		48,170		1,176
Southern Copper Corp.		74,946		1,392
Steel Dynamics, Inc.		78,000		971
Terra Industries, Inc.		40,000		1,060
Terra Nitrogen Co., L.P.		7,000		938
The Dow Chemical Co.		411,156		6,578
The Lubrizol Corp.		32,160		1,390
The Mosaic Co.		70,095		2,835
The Scotts Miracle-Gro Co., Class A		14,668		495
The Valspar Corp.		44,946		1,079
Titanium Metals Corp.		18,585		126
United States Steel Corp.		53,768		1,427
Valhi, Inc.		1,500		16
Vulcan Materials Co.		44,425		2,112
Weyerhaeuser Co.		94,815		3,343

				138,858

Media 2.8%
Cablevision Systems Corp., Class A		106,010		1,819
CBS Corp., Class B		310,205		2,184
Clear Channel Outdoor Holdings, Inc., Class A *		4,700		18
Comcast Corp., Class A		1,225,703		18,949
Discovery Communications, Inc., Series A *		111,198		2,112
DISH Network Corp., Class A *		95,272		1,262
DreamWorks Animation SKG, Inc., Class A *		27,000		648
Gannett Co., Inc.		83,954		328
Interactive Data Corp.		7,900		178
John Wiley & Sons, Inc., Class A		20,480		694
Lamar Advertising Co., Class A *		10,870		184
Liberty Global, Inc., Series A *		135,366		2,232
Liberty Media Corp — Entertainment, Series A *		220,244		5,363
Marvel Entertainment, Inc. *		17,000		507
Morningstar, Inc. *		3,550		141
News Corp., Class A		995,728		8,225
Omnicom Group, Inc.		135,088		4,251
Regal Entertainment Group, Class A		35,000		457
Scripps Networks Interactive, Class A		32,000		878
The DIRECTV Group, Inc. *		238,845		5,907
The Interpublic Group of Cos., Inc. *		192,364		1,204
The McGraw-Hill Cos., Inc.		138,736		4,183
The New York Times Co., Class A		26,025		140
The Walt Disney Co.		788,652		17,272
The Washington Post Co., Class B		2,526		1,057
Time Warner Cable, Inc.		149,336		4,813
Time Warner, Inc.		506,100		11,048
Viacom, Inc., Class B *		264,846		5,096
Virgin Media, Inc.		108,000		834

				101,984

See financial notes. 7

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
Pharmaceuticals, Biotechnology & Life Sciences 8.7%
Abbott Laboratories		654,946		27,409
Abraxis BioScience *		1,450		70
Alexion Pharmaceuticals, Inc. *		34,500		1,153
Allergan, Inc.		130,362		6,083
Amgen, Inc. *		440,660		21,359
Amylin Pharmaceuticals, Inc. *		33,747		369
Bio-Rad Laboratories, Inc., Class A *		5,000		348
Biogen Idec, Inc. *		125,955		6,089
BioMarin Pharmaceuticals, Inc. *		35,000		450
Bristol-Myers Squibb Co.		839,339		16,115
Celgene Corp. *		192,546		8,226
Cephalon, Inc. *		27,000		1,771
Charles River Laboratories International, Inc. *		31,015		858
Covance, Inc. *		24,300		955
Eli Lilly & Co.		424,771		13,983
Endo Pharmaceuticals Holdings, Inc. *		50,528		836
Forest Laboratories, Inc. *		130,046		2,821
Genzyme Corp. *		113,331		6,044
Gilead Sciences, Inc. *		386,112		17,684
Illumina, Inc. *		48,000		1,793
Isis Pharmaceuticals, Inc. *		44,000		690
Johnson & Johnson		1,175,467		61,547
King Pharmaceuticals, Inc. *		104,766		826
Life Technologies Corp. *		75,806		2,828
Merck & Co., Inc.		897,085		21,745
Mettler-Toledo International, Inc. *		15,000		924
Millipore Corp. *		22,874		1,352
Mylan, Inc. *		113,500		1,504
Myriad Genetics, Inc. *		37,900		1,470
Onyx Pharmaceuticals, Inc. *		20,000		518
OSI Pharmaceuticals, Inc. *		26,000		873
PerkinElmer, Inc.		41,900		610
Perrigo Co.		28,000		726
Pfizer, Inc.		2,845,010		38,009
Pharmaceutical Product Development, Inc.		47,746		936
Regeneron Pharmaceuticals, Inc. *		30,000		398
Schering-Plough Corp.		686,616		15,806
Sepracor, Inc. *		23,069		328
Sequenom, Inc. *		25,000		91
Techne Corp.		14,163		810
Thermo Fisher Scientific, Inc. *		181,398		6,363
United Therapeutics Corp. *		10,000		628
Valeant Pharmaceuticals International *		31,600		530
Vertex Pharmaceuticals, Inc. *		66,812		2,059
Warner Chilcott Ltd., Class A *		61,500		602
Waters Corp. *		44,100		1,948
Watson Pharmaceuticals, Inc. *		44,300		1,371
Wyeth		564,533		23,936

				323,844

Real Estate 1.5%
Alexandria Real Estate Equities, Inc.		13,000		474
AMB Property Corp.		45,825		875
Annaly Capital Management, Inc.		229,000		3,222
Apartment Investment & Management Co., Class A		63,218		461
AvalonBay Communities, Inc.		35,849		2,037
Boston Properties, Inc.		55,105		2,723
BRE Properties, Inc.		23,424		576
Brookfield Properties Corp.		93,750		700
Camden Property Trust		26,264		713
CB Richard Ellis Group, Inc., Class A *		76,737		575
Digital Realty Trust, Inc.		28,000		1,008
Douglas Emmett, Inc.		37,000		354
Duke Realty Corp.		63,437		620
Equity Residential		122,072		2,794
Essex Property Trust, Inc.		10,517		668
Federal Realty Investment Trust		24,196		1,336
HCP, Inc.		103,280		2,267
Health Care REIT, Inc.		43,021		1,466
Highwoods Properties, Inc.		26,000		624
Hospitality Properties Trust		33,481		410
Host Hotels & Resorts, Inc.		241,534		1,857
Kimco Realty Corp.		149,831		1,801
Liberty Property Trust		40,104		976
Mack-Cali Realty Corp.		28,347		761
Nationwide Health Properties, Inc.		40,000		988
Plum Creek Timber Co., Inc.		76,198		2,630
ProLogis		203,761		1,856
Public Storage		54,709		3,658
Rayonier, Inc.		34,923		1,349
Realty Income Corp.		46,000		1,027
Regency Centers Corp.		32,082		1,201
Senior Housing Properties Trust		33,000		541
Simon Property Group, Inc.		111,059		5,731
SL Green Realty Corp.		21,401		378
Taubman Centers, Inc.		24,000		572
The Macerich Co.		31,678		555
The St. Joe Co. *		34,800		866
UDR, Inc.		67,862		683
Ventas, Inc.		55,419		1,587
Vornado Realty Trust		61,459		3,005
Walter Investment Management Corp. *		6,208		50
Weingarten Realty Investors		35,002		544

				56,519

8 See financial notes.

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
Retailing 3.7%
Aaron Rents, Inc.		25,000		839
Abercrombie & Fitch Co., Class A		34,819		942
Advance Auto Parts, Inc.		40,202		1,759
Aeropostale, Inc. *		26,000		883
Amazon.com, Inc. *		137,341		11,059
American Eagle Outfitters, Inc.		91,085		1,350
AutoNation, Inc. *		34,466		610
AutoZone, Inc. *		17,033		2,834
Barnes & Noble, Inc.		11,118		290
Bed Bath & Beyond, Inc. *		115,120		3,502
Best Buy Co., Inc.		146,026		5,605
Big Lots, Inc. *		42,200		1,166
CarMax, Inc. *		91,100		1,163
Dick’s Sporting Goods, Inc. *		28,000		532
Dollar Tree, Inc. *		42,608		1,804
Expedia, Inc. *		104,109		1,417
Family Dollar Stores, Inc.		65,200		2,164
Foot Locker, Inc.		70,109		834
GameStop Corp., Class A *		70,300		2,120
Genuine Parts Co.		70,230		2,385
Guess?, Inc.		17,000		443
J.C. Penney Co., Inc.		100,422		3,082
Kohl’s Corp. *		130,765		5,930
Liberty Media Corp. — Interactive Class A *		226,108		1,198
Limited Brands, Inc.		119,023		1,359
LKQ Corp. *		40,000		679
Lowe’s Cos., Inc.		625,896		13,457
Macy’s, Inc.		191,876		2,625
Netflix, Inc. *		21,000		952
Nordstrom, Inc.		81,300		1,840
O’Reilly Automotive, Inc. *		59,566		2,314
PetSmart, Inc.		57,695		1,320
Priceline.com, Inc. *		15,000		1,456
RadioShack Corp.		63,140		889
Ross Stores, Inc.		57,756		2,191
Sears Holdings Corp. *		25,394		1,586
Staples, Inc.		307,070		6,332
Target Corp.		318,742		13,151
The Gap, Inc.		207,275		3,221
The Home Depot, Inc.		720,115		18,954
The Sherwin-Williams Co.		42,390		2,401
The TJX Cos., Inc.		180,815		5,057
Tiffany & Co.		60,073		1,739
Urban Outfitters, Inc. *		33,496		653

				136,087

Semiconductors & Semiconductor Equipment 2.5%
Advanced Micro Devices, Inc. *		196,331		709
Altera Corp.		132,869		2,167
Analog Devices, Inc.		132,674		2,823
Applied Materials, Inc.		575,389		7,026
Atmel Corp. *		185,000		710
Broadcom Corp., Class A *		183,825		4,263
Cree, Inc. *		30,000		822
Intel Corp.		2,364,780		37,316
Intersil Corp., Class A		60,867		706
KLA-Tencor Corp.		77,538		2,151
Lam Research Corp. *		56,300		1,570
Linear Technology Corp.		97,366		2,121
LSI Corp. *		287,898		1,106
Marvell Technology Group Ltd. *		184,362		2,024
Maxim Integrated Products, Inc.		100,000		1,355
MEMC Electronic Materials, Inc. *		113,077		1,832
Microchip Technology, Inc.		82,266		1,892
Micron Technology, Inc. *		274,000		1,337
National Semiconductor Corp.		91,458		1,131
Novellus Systems, Inc. *		50,295		908
NVIDIA Corp. *		247,199		2,838
ON Semiconductor Corp. *		105,000		569
Rambus, Inc. *		20,964		251
Silicon Laboratories, Inc. *		12,236		407
Texas Instruments, Inc.		551,775		9,965
Varian Semiconductor Equipment Associates, Inc. *		35,200		901
Xilinx, Inc.		125,105		2,557

				91,457

Software & Services 7.3%
Accenture Ltd., Class A		321,292		9,456
Activision Blizzard, Inc. *		231,338		2,492
Adobe Systems, Inc. *		230,413		6,302
Affiliated Computer Services, Inc., Class A *		43,367		2,098
Akamai Technologies, Inc. *		57,909		1,275
Alliance Data Systems Corp. *		31,271		1,309
ANSYS, Inc. *		28,000		773
Autodesk, Inc. *		102,372		2,041
Automatic Data Processing, Inc.		216,151		7,609
BMC Software, Inc. *		87,712		3,041
Broadridge Financial Solutions, Inc.		50,000		968
CA, Inc.		178,181		3,074
CACI International, Inc., Class A *		13,000		514
Cadence Design Systems, Inc. *		116,687		651
Citrix Systems, Inc. *		83,700		2,388
Cognizant Technology Solutions Corp., Class A *		118,766		2,944
Computer Sciences Corp. *		67,631		2,500
Compuware Corp. *		120,464		901
Concur Technologies, Inc. *		9,150		248
DST Systems, Inc. *		18,980		687
eBay, Inc. *		460,070		7,577
Electronic Arts, Inc. *		143,781		2,926

See financial notes. 9

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
Equinix, Inc. *		12,000		843
FactSet Research Systems, Inc.		19,000		1,018
Fidelity National Information Services, Inc.		75,470		1,347
Fiserv, Inc. *		70,789		2,642
Gartner, Inc. *		30,000		405
Global Payments, Inc.		31,938		1,024
Google, Inc., Class A *		101,561		40,215
Hewitt Associates, Inc., Class A *		40,000		1,254
IAC/InterActiveCorp. *		20,730		332
Intuit, Inc. *		138,244		3,198
Jack Henry & Associates, Inc.		34,000		613
Lender Processing Services, Inc.		25,000		717
Macrovision Solutions Corp. *		18,000		364
ManTech International Corp., Class A *		10,000		362
MasterCard, Inc., Class A		31,000		5,687
McAfee, Inc. *		68,929		2,588
Metavante Technologies, Inc. *		39,510		932
MICROS Systems, Inc. *		38,000		797
Microsoft Corp.		3,258,938		66,026
NeuStar, Inc., Class A *		30,000		570
Novell, Inc. *		80,024		301
Nuance Communications, Inc. *		60,000		801
Oracle Corp.		1,661,910		32,141
Parametric Technology Corp. *		40,000		446
Paychex, Inc.		140,828		3,804
Perot Systems Corp., Class A *		45,000		633
Red Hat, Inc. *		89,183		1,540
SAIC, Inc. *		90,000		1,629
Salesforce.com, Inc. *		33,321		1,426
Solera Holdings, Inc. *		20,000		456
Sybase, Inc. *		37,000		1,257
Symantec Corp. *		362,624		6,255
Synopsys, Inc. *		68,600		1,494
Total System Services, Inc.		91,500		1,141
VeriSign, Inc. *		76,905		1,583
Visa, Inc., Class A		140,000		9,094
VMware, Inc., Class A *		17,000		443
Western Union Co.		312,140		5,228
Yahoo!, Inc. *		594,479		8,495

				270,875

Technology Hardware & Equipment 8.2%
Agilent Technologies, Inc. *		152,231		2,780
Amphenol Corp., Class A		77,420		2,620
Anixter International, Inc. *		10,000		398
Apple, Inc. *		377,914		47,553
Arrow Electronics, Inc. *		55,400		1,260
Avnet, Inc. *		59,546		1,303
AVX Corp.		10,650		107
Brocade Communications Systems, Inc. *		168,000		971
Cisco Systems, Inc. *		2,484,615		48,003
CommScope, Inc. *		31,100		781
Corning, Inc.		670,863		9,808
Dell, Inc. *		745,749		8,666
Diebold, Inc.		25,318		669
Dolby Laboratories, Inc., Class A *		15,000		602
EchoStar Corp., Class A *		8,554		135
EMC Corp. *		868,724		10,885
F5 Networks, Inc. *		32,000		873
FLIR Systems, Inc. *		50,000		1,109
Harris Corp.		59,296		1,813
Hewlett-Packard Co.		1,044,068		37,566
Ingram Micro, Inc., Class A *		66,051		959
International Business Machines Corp.		572,040		59,040
Itron, Inc. *		10,000		460
Jabil Circuit, Inc.		74,100		600
Juniper Networks, Inc. *		227,994		4,936
Lexmark International, Inc., Class A *		30,859		605
Molex, Inc.		41,121		686
Motorola, Inc.		962,188		5,321
National Instruments Corp.		20,000		441
NCR Corp. *		78,044		792
NetApp, Inc. *		149,000		2,727
Polycom, Inc. *		38,000		708
QLogic Corp. *		43,400		615
QUALCOMM, Inc.		701,878		29,703
SanDisk Corp. *		101,858		1,601
Seagate Technology		216,837		1,769
Sun Microsystems, Inc. *		306,984		2,812
Tellabs, Inc. *		179,675		942
Teradata Corp. *		60,544		1,012
Trimble Navigation Ltd. *		54,500		1,168
Tyco Electronics Ltd.		210,248		3,667
Western Digital Corp. *		99,512		2,341
Xerox Corp.		386,130		2,359
Zebra Technologies Corp., Class A *		27,525		585

				303,751

Telecommunication Services 3.5%
American Tower Corp., Class A *		170,789		5,424
AT&T, Inc.		2,499,177		64,029
CenturyTel, Inc.		48,087		1,306
Clearwire Corp., Class A *		15,250		85
Crown Castle International Corp. *		88,627		2,173
Embarq Corp.		63,200		2,311
Frontier Communications Corp.		149,758		1,065
Leap Wireless International, Inc. *		10,680		385
Level 3 Communications, Inc. *		669,140		749
MetroPCS Communications, Inc. *		48,000		820
NII Holdings, Inc. *		65,841		1,064

10 See financial notes.

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
Qwest Communications International, Inc.		556,635		2,165
SBA Communications Corp., Class A *		40,000		1,008
Sprint Nextel Corp. *		1,243,057		5,420
Telephone & Data Systems, Inc.		48,301		1,385
tw telecom, Inc. *		50,000		460
United States Cellular Corp. *		3,600		122
Verizon Communications, Inc.		1,206,237		36,597
Windstream Corp.		180,848		1,501

				128,069

Transportation 2.1%
AMR Corp. *		111,651		531
Burlington Northern Santa Fe Corp.		121,081		8,171
C.H. Robinson Worldwide, Inc.		73,448		3,905
Con-way, Inc.		21,608		535
Continental Airlines, Inc., Class B *		45,400		478
CSX Corp.		173,042		5,120
Delta Air Lines, Inc. *		260,000		1,604
Expeditors International of Washington, Inc.		84,098		2,919
FedEx Corp.		133,028		7,444
Heartland Express, Inc.		12,050		180
Hertz Global Holdings, Inc. *		21,600		147
J.B. Hunt Transport Services, Inc.		20,591		579
JetBlue Airways Corp. *		100,000		493
Kansas City Southern *		33,000		503
Kirby Corp. *		19,000		586
Landstar System, Inc.		26,030		927
Norfolk Southern Corp.		158,706		5,663
Ryder System, Inc.		28,064		777
Southwest Airlines Co.		329,088		2,297
UAL Corp. *		45,667		225
Union Pacific Corp.		215,582		10,594
United Parcel Service, Inc., Class B		422,075		22,091

				75,769

Utilities 4.1%
AGL Resources, Inc.		34,400		1,072
Allegheny Energy, Inc.		75,253		1,951
Alliant Energy Corp.		53,900		1,205
Ameren Corp.		81,485		1,876
American Electric Power Co., Inc.		175,931		4,641
American Water Works Co., Inc.		25,000		450
Amerigas Partners L.P.		6,900		212
Aqua America, Inc.		43,134		791
Atmos Energy Corp.		32,818		811
Calpine Corp. *		180,000		1,460
CenterPoint Energy, Inc.		148,411		1,579
Cleco Corp.		20,000		422
CMS Energy Corp.		83,533		1,004
Consolidated Edison, Inc.		120,006		4,456
Constellation Energy Group, Inc.		78,441		1,889
Dominion Resources, Inc.		248,208		7,486
DPL, Inc.		50,061		1,123
DTE Energy Co.		75,397		2,229
Duke Energy Corp.		540,293		7,461
Dynegy, Inc., Class A *		175,199		312
Edison International		139,854		3,987
Energen Corp.		33,196		1,199
Entergy Corp.		80,522		5,215
EQT Corp.		56,400		1,897
Exelon Corp. *		277,856		12,817
FirstEnergy Corp.		127,970		5,234
FPL Group, Inc.		173,908		9,354
Great Plains Energy, Inc.		39,000		564
Hawaiian Electric Industries, Inc.		37,748		587
IDACORP, Inc.		15,000		360
Integrys Energy Group, Inc.		34,155		902
ITC Holdings Corp.		17,000		740
MDU Resources Group, Inc.		83,917		1,474
Mirant Corp. *		72,702		925
National Fuel Gas Co.		27,047		885
New Jersey Resources Corp.		18,000		593
Nicor, Inc.		18,000		579
NiSource, Inc.		126,980		1,395
Northeast Utilities		71,514		1,503
NRG Energy, Inc. *		102,930		1,851
NSTAR		49,512		1,555
NV Energy, Inc.		100,000		1,025
OGE Energy Corp.		29,180		750
ONEOK, Inc.		48,062		1,258
Ormat Technologies, Inc.		3,900		137
Pepco Holdings, Inc.		89,174		1,066
PG&E Corp.		154,337		5,729
Piedmont Natural Gas Co., Inc.		27,000		659
Pinnacle West Capital Corp.		36,487		999
PPL Corp.		160,961		4,814
Progress Energy, Inc.		119,185		4,067
Public Service Enterprise Group, Inc.		216,472		6,460
Questar Corp.		77,720		2,310
Reliant Energy, Inc. *		157,397		781
SCANA Corp.		54,031		1,633
Sempra Energy		105,378		4,849
Southern Co.		328,518		9,488
Spectra Energy Partners L.P.		2,300		51
TECO Energy, Inc.		62,117		658
The AES Corp. *		292,202		2,066
UGI Corp.		41,148		944
Vectren Corp.		28,000		621
Westar Energy, Inc.		36,000		631

See financial notes. 11

Schwab 1000 Index Fund

Portfolio Holdings continued


	Number of		Value
Security	Shares		($ x 1,000)
WGL Holdings, Inc.		21,000		654
Wisconsin Energy Corp.		51,618		2,063
Xcel Energy, Inc.		189,009		3,485

				153,244


Total Common Stock (Cost $2,561,394)				3,699,003


Foreign Common Stock 0.2% of net assets

Bermuda 0.2%
Capital Goods 0.1%
Foster Wheeler AG *		64,856		1,397
Diversified Financials 0.1%
Invesco Ltd.		172,090		2,533
Lazard Ltd., Class A		12,200		333

				2,866

Insurance 0.0%
Platinum Underwriters Holdings, Ltd.		6,400		184
Validus Holdings Ltd.		33,000		739

				923

Software & Services 0.0%
Genpact Ltd. *		11,150		100

				5,286

British Virgin Islands 0.0%
Transportation 0.0%
UTI Worldwide, Inc. *		9,500		128

Total Foreign Common Stock (Cost $7,039)				5,414


	Face/Maturity
Issuer	Amount		Value
Rate, Maturity Date	($ x 1,000)		($ x 1,000)
Short-Term Investments 0.0% of net assets

U.S. Treasury Obligations 0.0%
U.S. Treasury Bill
0.16%, 06/18/09 (b)		377		377
0.09%, 06/18/09 (b)		50		50
0.10%, 06/18/09 (b)		1,111		1,111

Total Short-Term Investments (Cost $1,538)				1,538

End of Investments.


	Number of		Value
Security	Shares		($ x 1,000)
Collateral Invested for Securities on Loan 0.2% of net assets

Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust		7,837,902		7,838

End of collateral invested for securities on loan.

(All dollar amounts are x 1,000)

At 04/30/09, the tax basis cost of the fund’s investments was $2,545,459 and the unrealized appreciation and depreciation were $1,606,252 and ($445,756), respectively, with a net unrealized appreciation of $1,160,496.


*		Non-income producing security.

(a)		Issuer is affiliated with the fund’s adviser.

(b)		All or a portion of this security is held as collateral for open futures contracts.

(c)		All or a portion of security is on loan.

REIT -		Real Estate Investment Trust

In addition to the above, the fund held the following at 04/30/09. All numbers are x1,000 except number of futures contracts.

Number of

Contract

Unrealized

Contracts

Value

Gains

Futures Contract

S & P 500 Index, e-mini, Long, expires 06/19/09

3,263

215

12 See financial notes.

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, Randall W. Merk and Registrant’s Principal Financial Officer, George Pereira, 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 second fiscal quarter of 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: Exhibits.

(a)		(1) Code of ethics – not applicable to this semi-annual report.

		(2) Separate certifications for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2 (a) under the 1940 Act, are attached.

		(3) Not applicable.

(b)		A certification for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being


(All dollar amounts are x 1,000)

At 04/30/09, the tax basis cost of the fund’s investments was $1,044,172 and the unrealized appreciation and depreciation were $223,013 and ($228,004), respectively, with a net unrealized appreciation of ($4,991).

At 04/30/09, the values of certain foreign securities held by the fund aggregating $893,029 were adjusted from their closing market values following the guidelines adopted by the fund’s Board of Trustees.


By:		/s/ Randall W. Merk
		Randall W. Merk
		Chief Executive Officer


By:		/s/ George Pereira
		George Pereira
		Principal Financial Officer