UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-6200

Schwab Investments

(Exact name of registrant as specified in charter)

211 Main Street, San Francisco, California 94105

(Address of principal executive offices)                    (Zip code)

Randall W. Merk
Schwab Investments
211 Main Street, San Francisco, California 94105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (415) 636-7000

Date of fiscal year end: August 31

Date of reporting period: March 1, 2010 - May 31, 2010

Item 1. Schedule of Investments.

Schwab Investments
Schwab YieldPlus Fund^®

Portfolio Holdings of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost		Value
Holdings by Category				($)		($)
	63	.7%	U.S. Government and Government Agencies		108,160,873		108,554,600
	34	.1%	Corporate Bonds		58,073,245		58,070,960
	0	.2%	Other Investment Company		382,237		382,237
	1	.5%	Short-Term Investment		2,497,797		2,498,453
	99	.5%	Total Investments		169,114,152		169,506,250
	0	.5%	Other Assets and Liabilities, Net				868,767
	100	.0%	Net Assets				170,375,017

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
U.S. Government and Government Agencies 63.7% of net assets
U.S. Government Agency Guaranteed 3.0%
Regions Bank, (FDIC Insured)
3.25%, 12/09/11 (d)		5,000,000		5,176,265
U.S. Government Agency Securities 20.6%
Fannie Mae
1.00%, 11/23/11		10,000,000		10,040,880
0.88%, 01/12/12		10,000,000		10,005,090
Federal Home Loan Bank
0.80%, 05/06/11		15,000,000		15,049,650
				35,095,620
U.S. Treasury Obligations 40.1%
U.S. Treasury Notes
2.88%, 06/30/10		43,000,000		43,099,115
1.13%, 06/30/11		25,000,000		25,183,600
				68,282,715
Total U.S. Government and Government Agencies (Cost $108,160,873)				108,554,600
Corporate Bonds 34.1% of net assets
Finance 16.2%
Banking 11.7%
Australia & New Zealand Banking Group Ltd.
0.61%, 07/21/10 (a)(c)		3,500,000		3,508,502
Deutsche Bank AG
0.60%, 07/19/10 (a)		2,000,000		1,985,218
Goldman Sachs Group, Inc.
0.69%, 07/07/10 (a)		2,000,000		1,971,264
Morgan Stanley
2.93%, 08/16/10 (a)		500,000		499,519
National City Corp.
0.43%, 06/16/10 (a)		2,000,000		1,999,868
Sovereign Bancorp, Inc.
4.80%, 09/01/10		2,000,000		2,013,484
Svenska Handelsbanken AB
1.26%, 06/14/10 (a)(c)		4,000,000		4,011,344
Westpac Banking Corp.
0.61%, 07/21/10 (a)(c)		4,000,000		3,997,436
				19,986,635
Finance Company 0.3%
International Lease Finance Corp.
5.63%, 09/15/10		500,000		498,750
Insurance 3.0%
Metropolitan Life Global Funding I
1.03%, 06/25/10 (a)(c)		3,000,000		3,001,005
0.80%, 07/12/10 (a)(c)		2,000,000		1,999,458
				5,000,463
Real Estate Investment Trust 1.2%
Westfield Capital Corp Ltd.
4.38%, 11/15/10 (b)(c)		2,000,000		2,028,526
				27,514,374
Industrial 10.9%
Capital Goods 0.8%
Waste Management, Inc.
7.38%, 08/01/10 (b)		1,400,000		1,414,207
Communications 3.9%
Deutsche Telekom International Finance
8.50%, 06/15/10 (a)		1,000,000		1,002,193
Telecom Italia Capital S.A.
4.88%, 10/01/10 (b)		1,000,000		1,009,968
Telefonica Europe BV
7.75%, 09/15/10 (b)		1,500,000		1,528,017
Verizon Global Funding Corp.
7.25%, 12/01/10 (b)		3,000,000		3,093,129
				6,633,307
Consumer Cyclical 1.2%
PACCAR Financial Corp.
0.73%, 06/05/10 (a)		2,000,000		1,998,854

1

 Schwab YieldPlus Fund

Portfolio Holdings (Unaudited) continued

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Consumer Non-Cyclical 2.5%
Anheuser-Busch InBev Worldwide, Inc.
1.01%, 06/28/10 (a)		1,250,000		1,256,365
Molson Coors Capital Finance ULC
4.85%, 09/22/10 (b)		825,000		834,716
Reynolds American, Inc.
0.96%, 06/15/10 (a)(b)		1,000,000		996,629
The Kroger Co.
6.80%, 04/01/11 (b)		1,124,000		1,170,365
				4,258,075
Energy 0.3%
Chesapeake Energy Corp.
7.50%, 06/15/10 (b)		500,000		512,500
Technology 1.8%
Affiliated Computer Services, Inc.
4.70%, 06/01/10		1,000,000		1,000,000
International Business Machines Corp.
0.38%, 08/04/10 (a)		2,000,000		2,001,030
				3,001,030
Transportation 0.4%
Delta Air Lines, Inc.
7.57%, 11/18/10 (b)		750,000		757,500
				18,575,473
Utilities 7.0%
Electric 5.4%
Columbus Southern Power Co.
0.66%, 06/16/10 (a)		500,000		502,165
Dominion Resources, Inc.
1.31%, 06/17/10 (a)		395,000		395,160
Georgia Power Co.
0.58%, 06/15/10 (a)(b)		500,000		501,183
National Rural Utilities Cooperative Finance Corp.
1.07%, 07/01/10 (a)		2,845,000		2,846,240
Nisource Finance Corp.
7.88%, 11/15/10 (b)		1,400,000		1,439,246
Southern Co.
0.71%, 07/21/10 (a)		3,500,000		3,513,710
				9,197,704
Natural Gas 1.6%
Enterprise Products Operating L.P.
4.95%, 06/01/10		1,400,000		1,400,000
Kinder Morgan Finance
5.35%, 01/05/11 (b)		500,000		503,750
Williams Cos., Inc.
2.29%, 07/01/10 (a)(c)		880,000		879,659
				2,783,409
				11,981,113
Total Corporate Bonds (Cost $58,073,245)				58,070,960
	Number		Value
Security	of Shares		($)
Other Investment Company 0.2% of net assets
Money Fund 0.2%
State Street Institutional Liquid Reserves Fund - Institutional Class		382,237		382,237
Total Other Investment Company (Cost $382,237)				382,237
Issuer	Face Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 1.5% of net assets
U.S. Treasury Obligation 1.5%
U.S. Treasury Bills
0.24%, 10/14/10		2,500,000		2,498,453
Total Short-Term Investment (Cost $2,497,797)				2,498,453
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $169,114,152, and the unrealized appreciation and depreciation were $464,073 and ($71,975), respectively, with a net unrealized appreciation of $392,098.

(a)	Variable-rate security.
(b)	Callable security.
(c)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $19,425,930 or 11.4% of net assets.
(d)	This debt is guaranteed under the FDIC Temporary Liquidity Guarantee Program, and the FDIC has stated that this debt is backed by the full faith and credit of the United States.

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds

2 

 Schwab YieldPlus Fund

Portfolio Holdings (Unaudited) continued

do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of May 31, 2010:

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total*
U.S. Government and Government Agencies(a)		$—		$108,554,600		$—		$108,554,600
U.S. Government Security(a)		—		2,498,452		—		2,498,452
Corporate Bonds(a)		—		39,495,487		—		39,495,487
Industrial		—		17,305,473		—		17,305,473
Energy		—		512,500		—		512,500
Transportation		—		—		757,500		757,500
Other Investment Company		382,238		—		—		382,238
Total		$382,238		$168,366,512		$757,500		$169,506,250

*	The fund had no Other Financial Investments.
(a)	As categorized in Portfolio Holdings.

3

 Schwab YieldPlus Fund

Portfolio Holdings (Unaudited) continued

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

	Balance								Change in								Balance
	as of		Accrued			Realized			Unrealized			Net			Net		as of
	August 31,		Discounts			Gain			Gain			Purchases			Transfers		May 31,
Investments in Securities	2009		(Premiums)			(Loss)			(Loss)			(Sales)			in/out		2010
Asset-Backed Obligations		$11,383,000		$15			$(7,999,880	)		$8,616,865			$(12,000,000	)		$—		$—
Corporate Bonds		1,500,000		(810	)		16,665			(31,080	)		(727,275	)		—		757,500
Total		$12,883,000		$(795	)		$(7,983,215	)		$8,585,785			$(12,727,275	)		$—		$757,500

REG46015MAY10 - 00

4 

Schwab Investments
Schwab Short-Term Bond Market Fund™

Portfolio Holdings As of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost		Value
Holdings by Category				($)		($)
	71	.4%	U.S. Government and Government Agencies		174,013,279		176,283,880
	6	.7%	Foreign Securities		16,194,138		16,549,721
	20	.5%	Corporate Bonds		47,849,534		50,525,477
	0	.2%	Municipal Bonds		509,484		513,206
	0	.9%	Other Investment Company		2,170,192		2,170,192
	99	.7%	Total Investments		240,736,627		246,042,476
	0	.3%	Other Assets and Liabilities, Net				839,932
	100	.0%	Net Assets				246,882,408

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
U.S. Government and Government Agencies 71.4% of net assets
U.S. Government Agency Guaranteed 3.3%
Citigroup Funding, Inc., (FDIC Insured)
1.88%, 10/22/12 (d)		2,000,000		2,027,286
JPMorgan Chase & Co., (FDIC Insured)
3.13%, 12/01/11 (d)		1,000,000		1,033,740
State Street Capital Trust III, (FDIC Insured)
2.15%, 04/30/12 (d)		3,000,000		3,068,835
The Goldman Sachs Group, Inc., (FDIC Insured)
3.25%, 06/15/12 (d)		1,000,000		1,044,302
Wells Fargo & Co., (FDIC Insured)
3.00%, 12/09/11 (d)		1,000,000		1,032,264
				8,206,427
U.S. Government Agency Securities 14.9%
Fannie Mae
3.63%, 08/15/11		2,500,000		2,589,202
1.25%, 06/22/12		1,000,000		1,004,823
1.75%, 08/10/12		2,000,000		2,028,710
1.50%, 09/25/12 (b)		500,000		501,667
1.88%, 10/29/12 (b)		2,000,000		2,008,270
3.25%, 04/09/13		1,000,000		1,052,587
2.75%, 02/05/14		500,000		517,253
2.63%, 11/20/14		2,000,000		2,046,094
3.25%, 01/26/15 (b)		1,500,000		1,505,814
Federal Farm Credit Bank
3.50%, 10/03/11		500,000		518,478
4.50%, 10/17/12		1,000,000		1,077,361
1.63%, 03/07/13 (b)		250,000		249,613
2.49%, 02/03/14 (b)		250,000		250,050
Federal Home Loan Bank
3.63%, 07/01/11		500,000		516,713
3.63%, 09/16/11		1,000,000		1,039,015
1.00%, 12/28/11		500,000		501,672
1.75%, 08/22/12		1,000,000		1,014,726
1.85%, 12/21/12 (b)		1,500,000		1,506,040
3.38%, 02/27/13		500,000		526,892
3.63%, 10/18/13		2,500,000		2,662,355
5.50%, 08/13/14		2,000,000		2,286,854
Freddie Mac
3.88%, 06/29/11		2,000,000		2,070,154
1.13%, 12/15/11		1,000,000		1,005,452
1.35%, 06/29/12 (b)		2,000,000		2,004,552
2.13%, 09/21/12		2,000,000		2,044,648
1.80%, 02/25/13 (b)		500,000		502,712
3.75%, 06/28/13		1,000,000		1,069,567
3.00%, 07/28/14		2,000,000		2,083,170
3.15%, 01/22/15 (b)		500,000		501,871
				36,686,315
U.S. Treasury Obligations 53.2%
U.S. Treasury Notes
1.13%, 06/30/11		4,000,000		4,029,376
1.00%, 07/31/11		2,000,000		2,011,798
5.00%, 08/15/11		1,000,000		1,054,531
1.00%, 08/31/11		2,000,000		2,011,798
1.00%, 09/30/11		2,000,000		2,011,954
1.00%, 10/31/11		2,000,000		2,011,094
4.63%, 10/31/11		1,000,000		1,057,500
1.75%, 11/15/11		1,000,000		1,016,641
0.75%, 11/30/11		2,350,000		2,353,948
1.00%, 12/31/11		5,600,000		5,629,098
0.88%, 01/31/12		2,800,000		2,808,532
4.88%, 02/15/12		3,000,000		3,215,859
4.50%, 03/31/12		3,000,000		3,211,056
1.38%, 04/15/12		1,000,000		1,012,774
1.00%, 04/30/12		4,000,000		4,018,904
4.50%, 04/30/12		1,000,000		1,072,071
1.38%, 05/15/12		3,400,000		3,442,235
0.75%, 05/31/12		1,000,000		999,536
1.88%, 06/15/12		1,500,000		1,533,984
4.63%, 07/31/12		1,000,000		1,082,578
1.75%, 08/15/12		1,750,000		1,784,863
4.38%, 08/15/12		1,000,000		1,077,891
4.13%, 08/31/12		1,000,000		1,073,828
1.38%, 09/15/12		6,300,000		6,367,920
4.25%, 09/30/12		1,000,000		1,078,281
1.38%, 10/15/12		3,800,000		3,837,704
3.88%, 10/31/12		1,000,000		1,070,313
1.38%, 11/15/12		3,950,000		3,984,254

1

 Schwab Short-Term Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
3.38%, 11/30/12		1,000,000		1,058,828
1.13%, 12/15/12		2,000,000		2,002,344
3.63%, 12/31/12		1,000,000		1,067,031
1.38%, 01/15/13		2,100,000		2,113,453
1.38%, 02/15/13		2,500,000		2,514,062
2.75%, 02/28/13		1,500,000		1,565,859
1.38%, 03/15/13		2,500,000		2,513,667
3.13%, 04/30/13		1,000,000		1,055,703
1.38%, 05/15/13		475,000		476,893
3.38%, 06/30/13		1,000,000		1,063,438
3.38%, 07/31/13		1,000,000		1,062,969
4.25%, 08/15/13		2,000,000		2,182,188
3.13%, 08/31/13		1,000,000		1,054,453
3.13%, 09/30/13		1,000,000		1,053,906
2.75%, 10/31/13		1,550,000		1,613,575
4.25%, 11/15/13		2,000,000		2,187,188
2.00%, 11/30/13		1,000,000		1,015,235
1.50%, 12/31/13		2,000,000		1,993,438
1.75%, 01/31/14		1,000,000		1,004,297
4.00%, 02/15/14		1,000,000		1,086,094
1.88%, 02/28/14		1,000,000		1,007,578
1.75%, 03/31/14		2,000,000		2,004,062
1.88%, 04/30/14		2,000,000		2,011,406
2.25%, 05/31/14		3,500,000		3,566,720
2.63%, 06/30/14		4,250,000		4,386,132
2.63%, 07/31/14		2,810,000		2,899,350
2.38%, 08/31/14		2,475,000		2,527,594
2.38%, 09/30/14		3,100,000		3,161,275
2.38%, 10/31/14		1,000,000		1,018,594
2.25%, 01/31/15		6,225,000		6,291,626
2.38%, 02/28/15		4,250,000		4,319,045
2.50%, 04/30/15		2,600,000		2,652,814
				131,391,138
Total U.S. Government and Government Agencies (Cost $174,013,279)				176,283,880
Foreign Securities 6.7% of net assets
Foreign Agencies 2.2%
Canada 0.4%
Export Development Canada
1.75%, 09/24/12		1,000,000		1,010,787
Germany 0.8%
KFW Bankengruppe
2.00%, 01/17/12		2,000,000		2,029,046
Mexico 0.2%
Petroleos Mexicanos
4.88%, 03/15/15 (b)		500,000		515,500
Republic of Korea 0.8%
Export-Import Bank of Korea
8.13%, 01/21/14		400,000		456,112
4.13%, 09/09/15		1,000,000		992,190
Korea Development Bank
8.00%, 01/23/14		400,000		448,744
				1,897,046
				5,452,379
Foreign Local Government 0.6%
Canada 0.6%
Province of British Columbia Canada
2.85%, 06/15/15		500,000		507,727
Province of Ontario Canada
4.10%, 06/16/14		1,000,000		1,066,327
				1,574,054
Sovereign 0.9%
Canada 0.2%
Canada Government International Bond
2.38%, 09/10/14		500,000		508,719
Italy 0.2%
Republic of Italy
2.13%, 10/05/12		500,000		495,041
Mexico 0.4%
Mexico (United Mexican States)
5.88%, 02/17/14 (b)		1,000,000		1,095,000
Panama 0.1%
Republic of Panama
7.25%, 03/15/15		100,000		116,000
				2,214,760
Supranational 3.0%
European Investment Bank
2.63%, 11/15/11		4,500,000		4,615,906
1.75%, 09/14/12		1,000,000		1,009,757
Inter-American Development Bank
3.00%, 04/22/14		1,111,000		1,152,905
Nordic Investment Bank
3.63%, 06/17/13		500,000		529,960
				7,308,528
Total Foreign Securities (Cost $16,194,138)				16,549,721
Corporate Bonds 20.5% of net assets
Finance 9.0%
Banking 6.4%
American Express Bank FSB
5.50%, 04/16/13		1,000,000		1,080,268
Bank of America Corp.
4.88%, 01/15/13		500,000		521,256
4.50%, 04/01/15		300,000		298,503
Barclays Bank PLC
5.20%, 07/10/14		300,000		310,678
BB&T Corp.
3.38%, 09/25/13		500,000		512,204
Citigroup, Inc.
5.25%, 02/27/12		750,000		771,832
5.50%, 04/11/13		1,500,000		1,546,168
Countrywide Financial Corp.
5.80%, 06/07/12		1,000,000		1,054,641
Credit Suisse USA, Inc.
3.45%, 07/02/12		1,000,000		1,033,082

2 

 Schwab Short-Term Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
5.50%, 08/15/13		500,000		547,781
Deutsche Bank AG
4.88%, 05/20/13		500,000		527,061
Goldman Sachs Capital II
5.79%, 06/01/10 (a)(b)		500,000		385,000
JPMorgan Chase & Co.
4.75%, 05/01/13		1,500,000		1,593,936
Morgan Stanley
4.75%, 04/01/14		550,000		546,464
4.10%, 01/26/15		300,000		287,892
6.00%, 04/28/15		500,000		516,158
PNC Funding Corp.
4.25%, 09/21/15		400,000		412,382
The Goldman Sachs Group, Inc.
5.45%, 11/01/12		500,000		520,257
4.75%, 07/15/13		500,000		509,163
5.25%, 10/15/13		500,000		520,638
Wells Fargo & Co.
5.25%, 10/23/12		1,500,000		1,607,083
5.00%, 11/15/14		750,000		788,056
				15,890,503
Brokerage 0.2%
BlackRock, Inc.
2.25%, 12/10/12 (b)		250,000		254,121
Nomura Holdings, Inc.
5.00%, 03/04/15		100,000		103,972
				358,093
Finance Company 1.2%
General Electric Capital Corp.
3.50%, 08/13/12		500,000		513,884
4.80%, 05/01/13		1,500,000		1,587,436
HSBC Finance Corp.
7.00%, 05/15/12		750,000		809,856
				2,911,176
Insurance 1.0%
Allstate Life Global Funding Trusts
5.38%, 04/30/13		300,000		327,427
Berkshire Hathaway Finance Corp.
4.63%, 10/15/13 (b)		1,000,000		1,082,653
Prudential Financial, Inc.
3.63%, 09/17/12		1,000,000		1,021,562
				2,431,642
Real Estate Investment Trust 0.2%
Simon Property Group, Inc.
6.75%, 05/15/14 (b)		500,000		557,189
				22,148,603
Industrial 9.9%
Basic Industry 0.9%
BHP Billiton Finance (USA) Ltd.
5.50%, 04/01/14		500,000		556,354
Praxair, Inc.
4.38%, 03/31/14 (b)		150,000		160,737
Rio Tinto Finance (USA) Ltd.
8.95%, 05/01/14 (b)		500,000		601,186
The Dow Chemical Co.
7.60%, 05/15/14 (b)		300,000		343,977
Vale Inco Ltd.
7.75%, 05/15/12 (b)		500,000		544,891
				2,207,145
Capital Goods 1.0%
General Electric Co.
5.00%, 02/01/13		1,000,000		1,071,186
John Deere Capital Corp.
4.90%, 09/09/13		500,000		544,944
Northrop Grumman Corp.
3.70%, 08/01/14 (b)		500,000		519,962
Tyco International Finance S.A.
8.50%, 01/15/19 (b)		200,000		255,319
				2,391,411
Communications 2.0%
AT&T, Inc.
6.70%, 11/15/13 (b)		1,000,000		1,144,508
CBS Corp.
8.20%, 05/15/14 (b)		550,000		644,083
DIRECTV Holdings LLC
3.55%, 03/15/15 (b)(c)		250,000		249,980
NBC Universal, Inc.
3.65%, 04/30/15 (b)(c)		500,000		506,839
Telefonica Emisiones, S.A.U.
5.98%, 06/20/11 (b)		500,000		521,955
Time Warner Cable, Inc.
3.50%, 02/01/15 (b)		250,000		252,773
Time Warner Entertainment Co. LP
10.15%, 05/01/12		500,000		572,406
Verizon Communications, Inc.
5.25%, 04/15/13 (b)		1,000,000		1,091,049
				4,983,593
Consumer Cyclical 0.9%
CVS Caremark Corp.
3.25%, 05/18/15 (b)		250,000		251,537
Nordstrom, Inc.
6.75%, 06/01/14 (b)		108,000		124,038
PACCAR, Inc.
6.38%, 02/15/12 (b)		500,000		541,310
Turner Broadcasting System, Inc.
8.38%, 07/01/13		675,000		788,100
Wal-Mart Stores, Inc.
3.20%, 05/15/14		500,000		521,069
				2,226,054
Consumer Non-Cyclical 2.7%
Abbott Laboratories
5.15%, 11/30/12 (b)		750,000		819,010
Anheuser-Busch InBev Worldwide, Inc.
3.00%, 10/15/12 (b)		500,000		512,595
Bottling Group LLC
6.95%, 03/15/14 (b)		500,000		585,699
Clorox Co.
5.00%, 03/01/13 (b)		500,000		541,522
Coca-Cola Enterprises, Inc.
8.50%, 02/01/12		500,000		558,463
General Mills, Inc.
6.00%, 02/15/12 (b)		190,000		205,142
Kraft Foods, Inc.
2.63%, 05/08/13		500,000		507,291
McKesson Corp.
6.50%, 02/15/14 (b)		200,000		226,295

3

 Schwab Short-Term Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Medco Health Solutions, Inc.
6.13%, 03/15/13 (b)		250,000		275,771
Pfizer, Inc.
5.35%, 03/15/15 (b)		500,000		560,374
Procter & Gamble Co.
1.38%, 08/01/12		250,000		251,733
Reynolds American, Inc.
7.25%, 06/01/13 (b)		500,000		553,292
Safeway, Inc.
6.25%, 03/15/14 (b)		250,000		281,766
Thermo Fisher Scientific, Inc.
2.15%, 12/28/12 (b)		200,000		201,829
Watson Pharmaceuticals, Inc.
5.00%, 08/15/14 (b)		500,000		531,141
				6,611,923
Energy 1.1%
Apache Corp.
6.00%, 09/15/13 (b)		500,000		561,127
Baker Hughes, Inc.
6.50%, 11/15/13 (b)		300,000		339,802
BP Capital Markets PLC
3.13%, 03/10/12		250,000		253,860
ConocoPhillips Australia Funding Co.
5.50%, 04/15/13 (b)		250,000		275,253
Husky Energy, Inc.
5.90%, 06/15/14 (b)		300,000		330,167
Occidental Petroleum Corp.
7.00%, 11/01/13 (b)		250,000		290,609
Shell International Finance BV
4.00%, 03/21/14 (b)		500,000		531,102
Valero Energy Corp.
6.88%, 04/15/12 (b)		150,000		161,628
				2,743,548
Technology 1.0%
Agilent Technologies, Inc.
4.45%, 09/14/12 (b)		400,000		416,477
Hewlett-Packard Co.
2.95%, 08/15/12 (b)		500,000		517,731
6.13%, 03/01/14 (b)		300,000		341,858
International Business Machines Corp.
6.50%, 10/15/13 (b)		500,000		575,208
Xerox Corp.
5.65%, 05/15/13 (b)		500,000		539,084
				2,390,358
Transportation 0.3%
Burlington Northern Santa Fe Corp.
7.00%, 02/01/14 (b)		200,000		230,869
Canadian National Railway Co.
6.38%, 10/15/11 (b)		500,000		535,926
				766,795
				24,320,827
Utilities 1.6%
Electric 1.1%
Consumers Energy Co.
5.38%, 04/15/13 (b)		500,000		542,592
Duke Energy Carolinas LLC
5.75%, 11/15/13 (b)		500,000		563,679
National Rural Utilities Cooperative Finance Corp.
2.63%, 09/16/12 (b)		500,000		511,635
Pacific Gas & Electric Co.
6.25%, 12/01/13 (b)		500,000		567,445
Southern California Edison Co.
5.75%, 03/15/14 (b)		500,000		561,351
				2,746,702
Natural Gas 0.5%
Energy Transfer Partners LP
8.50%, 04/15/14 (b)		200,000		233,606
Enterprise Products Operating LLC
9.75%, 01/31/14 (b)		250,000		301,927
Kinder Morgan Energy Partners LP
7.13%, 03/15/12 (b)		250,000		270,174
TransCanada PipeLines Ltd.
3.40%, 06/01/15 (b)		500,000		503,638
				1,309,345
				4,056,047
Total Corporate Bonds (Cost $47,849,534)				50,525,477
Municipal Bonds 0.2% of net assets
Fixed-Rate Obligations 0.2%
Yale Univ
Medium-Term Notes Series B
2.90%, 10/15/14 (b)		500,000		513,206
Total Municipal Bonds (Cost $509,484)				513,206
	Number		Value
Security	of Shares		($)
Other Investment Company 0.9% of net assets
Money Fund 0.9%
State Street Institutional Liquid Reserves Fund - Institutional Class		2,170,192		2,170,192
Total Other Investment Company (Cost $2,170,192)				2,170,192
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $240,865,934, and the unrealized appreciation and depreciation were $5,287,924 and ($111,382), respectively, with a net unrealized appreciation of $5,176,542.

4 

 Schwab Short-Term Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

(a)	Variable-rate security.
(b)	Callable security.
(c)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $756,819 or 0.3% of net assets.
(d)	This debt is guaranteed under the FDIC Temporary Liquidity Guarantee Program, and the FDIC has stated that this debt is backed by the full faith and credit of the United States.

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

5

 Schwab Short-Term Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

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 May 31, 2010:

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total*
U.S. Government and Government Agencies(a)		$—		$176,283,880		$—		$176,283,880
Foreign Securities(a)		—		16,549,721		—		16,549,721
Corporate Bonds(a)		—		50,525,477		—		50,525,477
Municipal Bonds(a)		—		513,206		—		513,206
Other Investment Company(a)		2,170,192		—		—		2,170,192
Total		$2,170,192		$243,872,284		$—		$246,042,476

*	The fund had no Other Financial Investments.
(a)	As categorized in Portfolio Holdings.

REG46016MAY10 - 00

6 

Schwab Investments
Schwab^® Premier Income Fund

Portfolio Holdings As of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost		Value
Holdings by Category				($)		($)
	34	.1%	Corporate Bonds		134,498,274		139,695,805
	3	.6%	Asset-Backed Obligations		15,721,449		14,875,670
	39	.4%	Mortgage-Backed Securities		158,920,476		161,104,872
	2	.9%	Commercial Mortgage Backed Securities		11,351,914		11,951,047
	25	.3%	U.S. Government and Government Agencies		101,515,038		103,375,466
	0	.3%	Foreign Securities		1,094,872		1,138,978
	0	.4%	Preferred Stock		1,535,625		1,587,656
	0	.9%	Other Investment Companies		3,493,391		3,493,391
	0	.1%	Short-Term Investments		599,786		599,786
	107	.0%	Total Investments		428,730,825		437,822,671
	(7	.0)%	Other Assets and Liabilities, Net				(28,475,288	)
	100	.0%	Net Assets				409,347,383

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Corporate Bonds 34.1% of net assets
Finance 12.0%
Banking 6.1%
Bank of America Corp.
4.50%, 04/01/15		1,500,000		1,492,516
5.63%, 10/14/16 (h)		500,000		512,300
Barclays Bank PLC
6.75%, 05/22/19 (h)		500,000		533,774
BB&T Corp.
3.95%, 04/29/16		1,000,000		1,006,341
Bear Stearns & Co., Inc.
7.25%, 02/01/18 (h)		750,000		856,273
Citigroup, Inc.
5.25%, 02/27/12 (h)		750,000		771,832
8.50%, 05/22/19 (h)		300,000		352,076
CoBank ACB
7.88%, 04/16/18 (c)(h)		1,000,000		1,134,597
Goldman Sachs Group, Inc.
0.69%, 07/07/10 (a)		1,250,000		1,232,040
5.38%, 03/15/20		500,000		483,275
JPMorgan Chase & Co.
6.30%, 04/23/19		500,000		545,219
Merrill Lynch & Co., Inc.
0.52%, 07/26/10 (a)		1,500,000		1,480,807
Morgan Stanley
2.93%, 08/16/10 (a)		1,500,000		1,498,557
4.75%, 04/01/14		500,000		496,786
6.00%, 05/13/14		200,000		207,498
6.00%, 04/28/15		500,000		516,158
7.30%, 05/13/19 (b)		500,000		526,033
Rabobank Nederland
11.00%, 06/30/19 (a)(b)(c)		500,000		608,225
Republic New York Corp.
0.63%, 07/30/10 (a)(b)		2,500,000		2,388,257
Royal Bank of Scotland Group PLC
6.38%, 02/01/11		2,351,000		2,381,876
Svenska Handelsbanken AB
1.26%, 06/14/10 (a)(c)		1,250,000		1,253,545
UBS Preferred Funding Trust I
8.62%, 10/01/10 (a)(b)		1,000,000		975,375
US Bancorp
3.15%, 03/04/15		1,000,000		1,015,670
Wachovia Bank NA
4.80%, 11/01/14		500,000		521,774
Wells Fargo & Co.
3.63%, 04/15/15		1,000,000		1,013,076
Westpac Banking Corp.
0.61%, 07/21/10 (a)(c)		1,000,000		999,359
				24,803,239
Brokerage 0.6%
BlackRock, Inc.
5.00%, 12/10/19 (b)		500,000		520,049
Jefferies Group, Inc.
8.50%, 07/15/19 (b)		500,000		563,285
Nomura Holdings, Inc.
5.00%, 03/04/15		300,000		311,915
6.70%, 03/04/20		900,000		927,936
				2,323,185
Finance Company 1.6%
General Electric Capital Corp.
5.72%, 08/22/11 (b)		2,000,000		2,009,560
International Lease Finance Corp.
4.88%, 09/01/10		1,000,000		997,500
5.63%, 09/15/10		2,500,000		2,493,750
SLM Corp.
4.50%, 07/26/10		1,000,000		1,003,004
				6,503,814
Insurance 3.1%
CIGNA Corp.
5.13%, 06/15/20 (b)		1,000,000		1,013,073
Coventry Health Care, Inc.
5.88%, 01/15/12		3,500,000		3,644,389

1

 Schwab Premier Income Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Highmark, Inc.
6.80%, 08/15/13 (b)(c)		1,000,000		1,078,217
Lincoln National Corp.
6.25%, 02/15/20 (b)		850,000		892,123
MetLife, Inc.
7.72%, 02/15/19 (b)(h)		250,000		289,773
Metropolitan Life Global Funding I
0.80%, 07/12/10 (a)(c)		3,000,000		2,999,187
Travelers Co., Inc.
5.90%, 06/02/19 (b)		100,000		109,605
ZFS Finance USA Trust I
6.15%, 12/15/10 (a)(b)(c)(h)		2,000,000		1,900,000
ZFS Finance USA Trust III
1.41%, 06/15/10 (a)(b)(c)		1,000,000		903,750
				12,830,117
Real Estate Investment Trust 0.6%
Digital Realty Trust LP
5.88%, 02/01/20 (b)(c)		1,000,000		1,008,246
Simon Property Group, Inc.
6.75%, 05/15/14 (b)		1,000,000		1,114,378
Ventas Realty LP
6.50%, 06/01/16 (b)		500,000		500,613
				2,623,237
				49,083,592
Industrial 18.5%
Basic Industry 1.2%
Airgas, Inc.
7.13%, 10/01/18 (b)(c)(h)		1,000,000		1,085,000
Alcoa, Inc.
6.75%, 07/15/18 (b)		1,000,000		1,010,775
Rio Tinto Finance (USA) Ltd.
9.00%, 05/01/19 (b)(h)		1,000,000		1,265,893
The Dow Chemical Co.
7.60%, 05/15/14 (b)(h)		500,000		573,295
8.55%, 05/15/19 (b)(h)		1,000,000		1,187,928
				5,122,891
Capital Goods 1.5%
BAE Asset Systems 2001 Asset Trust
6.66%, 09/15/13 (c)		1,222,597		1,287,272
Ball Corp.
7.13%, 09/01/16 (b)		250,000		257,500
Bombardier Inc.
8.00%, 11/15/14 (b)(c)		2,000,000		2,080,000
John Deere Capital Corp.
2.95%, 03/09/15		500,000		508,195
L-3 Communications Corp.
4.75%, 07/15/20 (b)		850,000		849,416
Republic Services, Inc.
5.00%, 03/01/20 (b)(c)		1,000,000		1,009,298
Tyco International Finance S.A.
8.50%, 01/15/19 (b)		100,000		127,660
				6,119,341
Communications 4.3%
AT&T, Inc.
6.70%, 11/15/13 (b)(h)		400,000		457,803
British Sky Broadcasting Group PLC
9.50%, 11/15/18 (b)(c)(h)		500,000		643,188
CBS Corp.
8.20%, 05/15/14 (b)(h)		500,000		585,530
5.75%, 04/15/20 (b)		500,000		511,470
DIRECTV Holdings LLC
3.55%, 03/15/15 (b)		1,250,000		1,249,897
NBC Universal, Inc.
5.15%, 04/30/20 (b)(c)		1,000,000		1,022,940
News America Holdings, Inc.
9.25%, 02/01/13 (h)		500,000		582,601
News America, Inc.
7.25%, 05/18/18		650,000		770,438
Qwest Corp.
3.51%, 06/15/10 (a)		3,000,000		2,962,500
8.38%, 05/01/16 (b)		500,000		545,000
Securus Technologies, Inc.
11.00%, 09/01/11 (b)		3,012,000		3,113,655
Sprint Nextel Corp.
0.69%, 06/28/10 (a)		3,000,000		2,992,281
Telefonica Emisiones, S.A.U.
6.42%, 06/20/16 (b)		1,000,000		1,112,369
Time Warner Entertainment Co. LP
10.15%, 05/01/12		480,000		549,510
Verizon Communications, Inc.
8.75%, 11/01/18 (b)		500,000		638,200
				17,737,382
Consumer Cyclical 3.2%
CVS Caremark Corp.
3.25%, 05/18/15 (b)		1,250,000		1,257,686
4.75%, 05/18/20 (b)		1,500,000		1,493,499
5.88%, 01/10/28 (b)		1,782,142		1,813,807
DR Horton, Inc.
7.88%, 08/15/11		1,000,000		1,055,000
Ford Motor Credit Co. LLC
9.75%, 09/15/10		2,000,000		2,028,770
Historic TW, Inc.
6.88%, 06/15/18		350,000		403,018
International Game Technology
7.50%, 06/15/19		500,000		579,116
Nordstrom, Inc.
6.75%, 06/01/14 (b)		475,000		545,538
PACCAR, Inc.
6.88%, 02/15/14 (b)		200,000		229,525
Royal Caribbean Cruises Ltd.
8.75%, 02/02/11		1,500,000		1,537,500
Time Warner, Inc.
4.88%, 03/15/20 (b)		1,000,000		998,926
Viacom, Inc.
6.25%, 04/30/16 (b)		1,000,000		1,123,968
				13,066,353
Consumer Non-Cyclical 4.9%
Anheuser-Busch InBev Worldwide, Inc.
1.01%, 06/28/10 (a)		6,250,000		6,281,825
DaVita, Inc.
7.25%, 09/15/10 (b)		1,000,000		1,000,000
Fresenius Medical Care Capital Trust IV
7.88%, 06/15/11		1,000,000		1,040,000
Medco Health Solutions, Inc.
6.13%, 03/15/13 (b)(h)		500,000		551,541
PepsiCo, Inc.
7.90%, 11/01/18 (b)		500,000		641,529

2 

 Schwab Premier Income Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Reynolds American, Inc.
0.96%, 06/15/10 (a)(b)		3,000,000		2,989,887
7.63%, 06/01/16 (b)		2,200,000		2,406,934
Senior Housing Properties Trust
6.75%, 04/15/20 (b)		1,500,000		1,466,250
Stater Brothers Holdings
8.13%, 06/15/12 (b)		3,000,000		3,011,250
Watson Pharmaceuticals, Inc.
6.13%, 08/15/19 (b)		500,000		536,268
				19,925,484
Energy 1.5%
Apache Corp.
6.90%, 09/15/18 (b)(h)		100,000		120,464
Baker Hughes, Inc.
6.50%, 11/15/13 (b)(h)		100,000		113,267
7.50%, 11/15/18 (b)(h)		100,000		121,087
Chesapeake Energy Corp.
7.50%, 09/15/13 (b)(g)		1,000,000		1,025,000
7.50%, 06/15/14 (b)		2,500,000		2,562,500
ConocoPhillips
4.60%, 01/15/15 (b)		1,500,000		1,624,581
Husky Energy, Inc.
7.25%, 12/15/19 (b)		250,000		293,733
Weatherford International Ltd.
9.63%, 03/01/19 (b)		250,000		306,613
				6,167,245
Technology 1.1%
Affiliated Computer Services, Inc.
4.70%, 06/01/10		2,000,000		2,000,000
Seagate HDD Cayman
6.88%, 05/01/20 (b)(c)		1,000,000		955,000
Seagate Technology International
10.00%, 05/01/14 (b)(c)		500,000		563,125
Xerox Corp.
7.13%, 06/15/10 (b)(h)		1,000,000		1,001,828
				4,519,953
Transportation 0.8%
Burlington Northern Santa Fe Corp.
7.00%, 02/01/14 (b)(h)		100,000		115,435
Delta Air Lines, Inc.
7.57%, 05/18/12 (b)		2,750,000		2,777,500
Union Pacific Corp.
5.75%, 11/15/17 (b)		200,000		220,877
				3,113,812
				75,772,461
Utilities 3.6%
Electric 1.6%
Appalachian Power Co.
7.95%, 01/15/20 (b)(h)		400,000		491,668
Columbus Southern Power Co.
0.66%, 06/16/10 (a)		250,000		251,082
DTE Energy Co.
7.63%, 05/15/14 (b)(h)		800,000		935,505
Georgia Power Co.
0.58%, 06/15/10 (a)(b)		2,000,000		2,004,732
Nevada Power Co.
6.50%, 04/15/12 (b)(h)		1,000,000		1,080,406
7.13%, 03/15/19 (b)		500,000		581,377
Nisource Finance Corp.
10.75%, 03/15/16 (b)		400,000		513,608
Pacific Gas & Electric Co.
8.25%, 10/15/18 (b)		500,000		620,482
				6,478,860
Natural Gas 2.0%
CenterPoint Energy Resources Corp.
6.00%, 05/15/18 (b)(h)		708,000		762,225
Energy Transfer Partners LP
8.50%, 04/15/14 (b)(h)		500,000		584,015
Enterprise Products Operating LLC
9.75%, 01/31/14 (b)(h)		100,000		120,771
8.38%, 08/01/16 (a)(b)		500,000		493,082
Ferrellgas Partners LP
9.13%, 10/01/17 (b)		1,000,000		1,040,000
Kinder Morgan Energy Partners LP
5.63%, 02/15/15 (b)(h)		300,000		323,411
Kinder Morgan Finance
5.35%, 01/05/11 (b)		4,500,000		4,533,750
TransCanada PipeLines Ltd.
3.40%, 06/01/15 (b)(g)		500,000		503,638
				8,360,892
				14,839,752
Total Corporate Bonds (Cost $134,498,274)				139,695,805
Asset-Backed Obligations 3.6% of net assets
ACE Securities Corp.
Series 2003-HS1 Class M3
4.09%, 06/25/10 (a)(b)(h)		1,500,000		928,788
Aegis Asset Backed Securities Trust
Series 2006-1 Class A1
0.42%, 06/25/10 (a)(b)(h)		21,314		20,948
Ameriquest Mortgage Securities, Inc.
Series 2003-11 Class M5
3.59%, 06/25/10 (a)(b)(h)		114,623		15,295
Amortizing Residential Collateral Trust
Series 2002-BC4 Class A
0.92%, 06/25/10 (a)(b)		1,269		1,079
Series 2002-BC7 Class M1
1.14%, 06/25/10 (a)(b)(h)		465,247		216,788
Asset Backed Funding Certificates
Series 2005-HE1 Class M2
0.78%, 06/25/10 (a)(b)(h)		400,000		180,812
Bear Stearns Asset Backed Securities
Series 2005-HE3 Class M1
0.77%, 06/25/10 (a)(b)(h)		52,573		51,307
Citigroup Mortgage Loan Trust, Inc.
Series 2004-OPTI Class M5
1.39%, 06/25/10 (a)(b)		1,559,043		858,780
Series 2004-OPTI Class M6
1.42%, 06/25/10 (a)(b)(h)		1,566,337		259,193
Countrywide Loan
Series 2002-3 Class M2
2.37%, 06/25/10 (a)(b)(h)		273,805		81,350
First Franklin Mortgage Loan
Series 2002-FF1 Class M1
1.39%, 06/25/10 (a)(b)(h)		1,137,337		455,170

3

 Schwab Premier Income Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Fremont Home Loan Trust
Series 2004-A Class M1
1.17%, 06/25/10 (a)(b)		1,972,163		1,375,543
Long Beach Mortgage Loan Trust
Series 2004-1 Class M6
2.44%, 06/25/10 (a)(b)(h)		565,326		214,097
Series 2004-2 Class M2
1.42%, 06/25/10 (a)(b)		973,813		767,737
Morgan Stanley ABS Capital I
Series 2004-NC8 Class M4
1.34%, 06/25/10 (a)(b)		484,630		317,059
Morgan Stanley Dean Witter Capital I
Series 2002-AM3 Class M2
3.34%, 06/25/10 (a)(b)(h)		906,837		380,200
Option One Mortgage Loan Trust
Series 2002-1 Class M1
1.47%, 06/25/10 (a)(b)(h)		124,147		62,291
Series 2002-4 Class M2
2.04%, 06/25/10 (a)(b)(h)		335,127		228,954
Series 2003-2 Class M1
1.32%, 06/25/10 (a)(b)(h)		1,240,242		461,180
Series 2005-1 Class M2
0.88%, 06/25/10 (a)(b)		1,584,466		546,394
Park Place Securities, Inc.
Series 2004-MHQ1 Class M1
1.04%, 06/25/10 (a)(b)(h)		978,932		953,817
Series 2004-WCW1 Class M1
0.97%, 06/25/10 (a)(b)(h)		2,189,647		2,132,357
Series 2005-WLL1 Class M1
0.76%, 06/25/10 (a)(b)(h)		2,000,000		1,919,628
Structured Asset Securities Corp.
Series 1998-2 Class M1
1.44%, 06/25/10 (a)(b)(h)		1,030,025		973,236
Series 2005-2XS Class 1A5A
4.72%, 06/01/10 (a)(b)(h)		1,720,111		1,473,667
Total Asset-Backed Obligations (Cost $15,721,449)				14,875,670
Mortgage-Backed Securities 39.4% of net assets
Collateralized Mortgage Obligations 7.0%
ABN Amro Mortgage Corp.
Series 2003-2 Class 2A1
0.75%, 06/01/10 (a)(b)(h)		2,905,470		2,791,179
Series 2003-9 Class A1
4.50%, 08/25/18 (b)		211,333		215,555
Banc of America Alternative Loan Trust
Series 2005-2 Class CB
5.50%, 03/25/35 (b)(e)(h)		5,895,758		1,002,392
Series 2005-5 Class CB
5.50%, 06/25/35 (b)(e)(h)		3,180,105		482,099
Banc of America Mortgage Securities, Inc.
Series 2004-4 Class 2A1
5.50%, 05/25/34 (b)(h)		891,833		890,941
Chase Mortgage Finance Corp.
Series 2003-S13 Class A16
5.00%, 11/25/33 (b)		2,096,449		2,124,269
Countrywide Alternative Loan Trust
Series 2004-29CB Class A6
4.00%, 01/25/35 (b)(h)		108,720		106,941
CS First Boston Mortgage Securities Corp.
Series 2003-23 Class 7A1
5.00%, 09/25/18 (b)(h)		2,752,552		2,779,852
Series 2004-7 Class 6A1
5.25%, 10/25/19 (b)		2,834,535		2,875,772
Series 2004-1 Class 1A1
5.75%, 02/25/34 (b)		626,754		620,868
GSAA Home Equity Trust
Series 2004-NC1 Class AF6
4.76%, 06/01/10 (a)(b)(h)		1,660,552		1,563,040
Impac CMB Trust
Series 2004-5 Class 1A1
0.70%, 06/25/10 (a)(b)(h)		459,095		382,282
MASTR Asset Securitization Trust
Series 2003-11 Class 6A8
0.84%, 06/25/10 (a)(b)		1,621,491		1,509,748
Series 2003-6 Class 9A1
4.25%, 07/25/33 (b)(h)		151,879		149,990
Series 2003-10 Class 3A1
5.50%, 11/25/33 (b)		1,267,271		1,304,759
Residential Accredit Loans, Inc.
Series 2002-QS18 Class M1
5.50%, 12/25/17 (b)		181,063		137,623
Series 2003-QS1 Class A2
5.75%, 01/25/33 (b)		494,243		496,378
Residential Asset Securitization Trust
Series 2003-A1 Class A1
4.25%, 03/25/33 (b)		1,472,541		1,483,548
Structured Asset Securities Corp.
Series 2004-3 Class 3A1
5.50%, 03/25/19 (b)		310,079		308,978
Series 2005-6 Class 4A1
5.00%, 05/25/35 (b)		1,660,566		1,611,759
WAMU Mortgage Pass-Through Certificates
Series 2003-S10 Class A5
5.00%, 10/25/18 (b)		393,331		394,206
Series 2003-S9 Class A6
5.25%, 10/25/33 (b)		3,000,000		3,042,574
Series 2004-S3 Class 1A1
5.00%, 07/25/34 (b)		2,367,862		2,386,867
				28,661,620
U.S. Government Agency Mortgages 32.4%
Fannie Mae
4.86%, 11/01/12		375,892		392,321
6.00%, 02/01/15 to 11/01/34		8,628,924		9,395,237
5.00%, 10/25/15 to 07/01/35		5,178,877		5,374,096
9.75%, 07/01/16		3,342		3,667
7.00%, 11/01/16 to 01/01/35		871,531		976,429
4.50%, 08/01/18 to 09/01/19		835,163		880,571
6.50%, 12/01/19 to 08/01/26		835,504		909,860
4.50%, 11/01/20 (e)(h)		8,121,087		815,731
6.50%, 07/01/21 (h)		68,482		76,266
5.50%, 10/01/22 to 05/01/27		5,805,234		6,270,527
6.00%, 07/01/37 (h)		9,520,609		10,277,051

4 

 Schwab Premier Income Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Freddie Mac
6.50%, 03/27/11 to 04/01/26		1,519,761		1,666,671
3.50%, 05/01/11 (h)		25,232		25,565
4.50%, 01/01/13 to 06/01/19		304,343		323,256
4.50%, 07/01/13 to 09/01/15 (h)		26,534		27,317
4.50%, 01/15/15 to 04/15/22 (b)		6,969,116		7,131,139
5.00%, 05/15/16 to 09/15/27 (b)		305,804		307,717
6.00%, 06/01/16 to 08/01/22		763,031		839,167
6.00%, 09/15/16 to 01/15/22 (b)		4,148,753		4,234,642
5.50%, 02/01/23 to 10/01/33		18,962,873		20,333,867
5.00%, 01/01/24		1,760,574		1,860,426
5.50%, 07/15/24 to 05/15/26 (b)		58,422		59,196
Freddie Mac TBA
6.00%, 06/01/40		4,000,000		4,311,876
Ginnie Mae
7.63%, 08/15/28		182,130		208,807
7.38%, 09/15/28 to 02/15/30		524,193		594,647
7.13%, 02/15/29 to 03/15/29		294,684		331,845
7.00%, 04/15/29 to 05/15/29		424,008		480,317
7.25%, 04/15/29		113,830		128,713
5.50%, 02/15/33 to 08/20/34		16,739,716		18,097,448
5.00%, 06/15/33 to 10/15/34		27,188,779		28,922,946
Ginnie Mae TBA
4.50%, 06/01/40		7,000,000		7,185,934
				132,443,252
Total Mortgage-Backed Securities (Cost $158,920,476)				161,104,872
Commercial Mortgage Backed Securities 2.9% of net assets
Banc of America Commercial Mortgage, Inc.
Series 2006-1 Class A2
5.33%, 09/10/45 (b)		605,000		612,206
Bear Stearns Commercial Mortgage Securities
Series 2005-PW10 Class A4
5.41%, 06/01/10 (a)(b)(h)		3,230,000		3,321,238
Citigroup/Deutsche Bank Commercial Mortgage Trust
Series 2005-CD1 Class A3
5.22%, 06/01/10 (a)(b)		2,905,000		3,010,719
Greenwich Capital Commercial Funding Corp.
Series 2007-GG9 Class A4
5.44%, 03/10/39 (b)		2,050,000		1,985,233
JPMorgan Chase Commercial Mortgage Securities Corp.
Series 2003-ML1A Class A1
3.97%, 03/12/39 (b)		140,172		143,324
Series 2005-LDP5 Class A2
5.20%, 12/15/44 (b)(h)		1,400,000		1,425,982
Series 2006-LDP9 Class A2S
5.30%, 05/15/47 (b)		94,000		95,283
Series 2007-LD12 Class A2
5.83%, 02/15/51 (b)		550,000		570,655
LB-UBS Commercial Mortgage Trust
Series 2006-C3 Class A3
5.69%, 06/11/10 (a)(b)(h)		760,000		786,407
Total Commercial Mortgage Backed Securities (Cost $11,351,914)				11,951,047
U.S. Government and Government Agencies 25.3% of net assets
U.S. Government Agency Guaranteed 2.3%
Bank of America Corp., (FDIC Insured)
2.10%, 04/30/12 (f)(h)		4,000,000		4,085,708
Regions Bank, (FDIC Insured)
3.25%, 12/09/11 (f)		5,000,000		5,176,265
				9,261,973
U.S. Government Agency Securities 4.7%
Fannie Mae
1.00%, 11/23/11		5,000,000		5,020,440
1.50%, 09/25/12 (b)		5,000,000		5,016,665
Federal Farm Credit Bank
1.38%, 06/25/13		3,000,000		2,982,030
3.00%, 09/22/14		1,000,000		1,036,052
Freddie Mac
2.20%, 12/17/13 (b)		5,000,000		5,019,185
				19,074,372
U.S. Treasury Obligations 18.3%
U.S. Treasury Notes
1.38%, 02/15/13		14,000,000		14,078,750
1.75%, 04/15/13		3,050,000		3,095,985
2.75%, 10/31/13		3,900,000		4,059,962
2.63%, 07/31/14		4,000,000		4,127,188
2.38%, 09/30/14		1,850,000		1,886,567
2.38%, 10/31/14		4,000,000		4,074,376
2.63%, 12/31/14		2,500,000		2,571,485
2.50%, 03/31/15		1,150,000		1,174,617
2.50%, 04/30/15		800,000		816,250
3.25%, 07/31/16		6,500,000		6,754,416
3.00%, 09/30/16		2,700,000		2,756,109
2.75%, 11/30/16		5,000,000		5,018,750
3.25%, 12/31/16		15,000,000		15,489,840
3.38%, 11/15/19		3,700,000		3,723,414
3.63%, 02/15/20		5,275,000		5,411,412
				75,039,121
Total U.S. Government and Government Agencies (Cost $101,515,038)				103,375,466

5

 Schwab Premier Income Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Foreign Securities 0.3% of net assets
Foreign Agencies 0.2%
Mexico 0.2%
Petroleos Mexicanos
4.88%, 03/15/15 (b)		500,000		515,500
8.00%, 05/03/19 (b)		100,000		115,750
				631,250
Foreign Local Government 0.1%
Canada 0.1%
Province of British Columbia Canada
2.85%, 06/15/15		500,000		507,728
Total Foreign Securities (Cost $1,094,872)				1,138,978
	Number		Value
Security	of Shares		($)
Preferred Stock 0.4% of net assets
HJ Heinz Finance Co. (c)		15		1,587,656
Total Preferred Stock (Cost $1,535,625)				1,587,656
Other Investment Companies 0.9% of net assets
Money Fund 0.9%
State Street Institutional Liquid Reserves Fund - Institutional Class		3,493,391		3,493,391
Total Other Investment Company (Cost $3,493,391)				3,493,391
Issuer	Face Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 0.1% of net assets
U.S. Treasury Obligations 0.1%
U.S. Treasury Bills
0.15%, 07/01/10 (d)		100,000		101,964
0.49%, 07/01/10 (d)		500,000		497,822
Total Short-Term Investments (Cost $599,786)				599,786
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $428,867,504 and the unrealized appreciation and depreciation were $12,557,097 and ($3,601,930), respectively, with a net unrealized appreciation of $8,955,167.

(a)	Variable-rate security.
(b)	Callable security.
(c)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $22,118,605 or 5.4% of net assets.
(d)	All or a portion of this security is held as collateral for futures contracts.
(e)	Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.
(f)	This debt is guaranteed under the FDIC Temporary Liquidity Guarantee Program, and the FDIC has stated that this debt is backed by the full faith and credit of the United States.
(g)	Delayed-delivery security.
(h)	All or a portion of this security is held as collateral for delayed-delivery securities.

In addition to the above, the fund held the following at 05/31/10.

			Contract		Unrealized
	Number of		Value		Losses
	Contracts		($)		($)
Futures Contracts
10 Years, Long, US Treasury Note expires 09/21/10		40		4,795,000		(16,682	)
5 Years, Long, U.S. Treasury Note expires 09/30/10		70		8,167,031		(2,397	)
Net unrealized losses						(19,079	)

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

6 

 Schwab Premier Income Fund

^{Portfolio Holdings (Unaudited) continued}

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of May 31, 2010:

Assets Valuation Input

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Corporate Bonds(a)		$—		$124,295,407		$—		$124,295,407
Industrial
Capital Goods		—		4,832,069		1,287,272		6,119,341
Energy		—		6,167,245		—		6,167,245
Transportation		—		336,312		2,777,500		3,113,812
Asset-Backed Obligations		—		14,875,670		—		14,875,670
Mortgage-Backed Securities(a)		—		161,104,872		—		161,104,872
Commercial Mortgage Backed Securities		—		11,951,047		—		11,951,047
U.S. Government and Government Agencies(a)		—		103,375,466		—		103,375,466
Foreign Securities(a)		—		1,138,978		—		1,138,978
Preferred Stock		1,587,656		—		—		1,587,656
Other Investment Company		3,493,391		—		—		3,493,391
Short-Term Investments(a)		—		599,786		—		599,786
Total		$5,081,047		$428,676,852		$4,064,772		$437,822,671

7

 Schwab Premier Income Fund

^{Portfolio Holdings (Unaudited) continued}

Liabilities Valuation Input

	Quoted Prices in					Significant
	Active Markets for			Significant Other		Unobservable
	Identical Assets			Observable Inputs		Inputs
Description	(Level 1)			(Level 2)		(Level 3)		Total
Other Financial Instruments*
Futures Contracts		$(19,079	)		$—		$—		$(19,079	)

*	Futures contracts are not included in Investments and are valued at the unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

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

	Balance							Change in									Balance
	as of		Accrued			Realized		Unrealized			Net			Net			as of
	August 31,		Discounts			Gain		Gain			Purchases			Transfers			May 31,
Investments in Securities	2009		(Premiums)			(Loss)		(Loss)			(Sales)			in/out			2010
Asset-Backed Obligations		$1,541,677		$27,866			$425,925		$(301,014	)		$(1,148,060	)		$(546,394	)		$—
Corporate Bonds		3,830,000		(9,436	)		290,639		(37,001	)		1,075,570			(1,085,000	)		4,064,772
Total		$5,371,677		$18,430			$716,564		$(338,015	)		$(72,490	)		$(1,631,394	)		$4,064,772

Schwab Premier Income Fund entered into futures contracts during the period ended May 31, 2010. The fund invests in futures to help manage the effects of interest rate changes and is subject to credit risk, leverage risk, market risk, management risk, liquidity risk, lack of availability risk, valuation risk, correlation risk and tax risk.

REG46020MAY10 - 00

8 

Schwab Investments
Schwab Total Bond Market Fund™

Portfolio Holdings As of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost			Value
Holdings by Category				($)			($)
	34	.7%	Mortgage-Backed Securities		311,140,479			322,733,320
	18	.0%	Corporate Bonds		157,907,189			167,931,119
	37	.7%	U.S. Government and Government Agencies		342,831,409			351,502,268
	3	.1%	Commercial Mortgage Backed Securities		27,227,558			29,310,084
	0	.4%	Asset-Backed Obligations		3,165,380			3,342,274
	3	.9%	Foreign Securities		35,200,000			36,067,211
	0	.6%	Municipal Bonds		5,318,440			5,382,740
	0	.4%	Other Investment Company		3,546,933			3,546,933
		—%	Short-Term Investment		99,963			99,965
	98	.8%	Total Investments		886,437,351			919,915,914
	(0	.1)%	Short Sales		(536,875	)		(536,250	)
	1	.3%	Other Assets and Liabilities, Net					11,656,454
	100	.0%	Net Assets					931,036,118

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Mortgage-Backed Securities 34.7% of net assets
U.S. Government Agency Mortgages 34.7%
Fannie Mae
1.94%, 07/01/10 (a)		1,428,279		1,463,588
2.39%, 07/01/10 (a)		1,724,714		1,777,165
3.48%, 07/01/10 (a)(e)		3,685,386		3,783,145
5.50%, 12/01/13 to 03/01/35 (e)		22,535,672		24,159,124
5.00%, 12/01/17 to 12/01/39		32,757,992		34,571,075
4.50%, 04/01/18 to 12/01/39		35,114,569		36,110,795
4.00%, 07/01/18 (e)		1,622,854		1,703,067
4.00%, 06/01/19 to 04/01/39		15,565,965		15,631,101
5.00%, 07/01/23 to 06/01/36 (e)		10,558,065		11,132,965
5.50%, 07/01/23 to 09/01/38		31,318,273		33,479,610
6.00%, 09/01/24 to 12/01/37		23,817,796		25,768,503
6.50%, 08/01/26 to 11/01/37		5,943,985		6,479,264
6.50%, 02/01/32 to 11/01/37 (e)		3,783,609		4,183,100
7.00%, 04/01/37		2,373,313		2,632,232
Fannie Mae TBA
4.00%, 06/17/25 to 06/14/40		1,500,000		1,505,078
4.50%, 06/17/25 to 06/14/40		4,000,000		4,095,390
5.00%, 06/14/40		1,500,000		1,570,312
6.00%, 06/24/40		1,000,000		1,077,188
Freddie Mac
5.52%, 07/01/10 (a)		1,669,529		1,762,312
5.58%, 07/01/10 (a)		3,551,911		3,744,713
6.00%, 04/01/15 to 12/01/32 (e)		3,513,960		3,829,138
4.50%, 05/01/19 to 02/01/40		18,254,911		18,927,408
5.00%, 06/01/23 to 04/01/40		13,545,059		14,250,237
4.00%, 07/01/24 to 08/01/29		4,758,419		4,882,362
6.00%, 05/01/32 to 10/01/38		4,342,205		4,722,011
5.50%, 10/01/38 to 10/01/39		2,048,322		2,185,279
Freddie Mac TBA
6.00%, 06/14/40		1,000,000		1,077,969
Ginnie Mae
5.00%, 10/20/21 to 04/20/40		15,889,020		16,815,726
4.50%, 05/15/24 to 02/20/40		14,801,254		15,239,038
7.50%, 03/15/32 (e)		472,862		539,250
6.00%, 05/15/32 to 08/15/38		3,954,940		4,302,448
5.50%, 04/15/33 to 11/15/38		10,179,643		10,973,932
7.00%, 06/15/33 (e)		495,644		565,515
6.50%, 10/20/37 to 08/15/39		2,405,058		2,630,973
4.00%, 06/20/39 to 07/20/39		1,407,657		1,403,557
Ginnie Mae TBA
5.00%, 06/21/40		1,000,000		1,054,063
6.00%, 06/21/40		2,500,000		2,704,687
Total Mortgage-Backed Securities (Cost $311,140,479)				322,733,320

1

 Schwab Total Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Corporate Bonds 18.0% of net assets
Finance 6.4%
Banking 4.2%
American Express Bank FSB
5.50%, 04/16/13		1,000,000		1,080,268
Bank of America Corp.
4.50%, 04/01/15		200,000		199,002
5.63%, 10/14/16		2,000,000		2,049,198
6.00%, 10/15/36		500,000		458,921
Barclays Bank PLC
5.00%, 09/22/16		1,000,000		989,363
BB&T Capital Trust IV
6.82%, 06/12/37 (a)(b)		1,000,000		903,750
Bear Stearns & Co., Inc.
5.70%, 11/15/14		500,000		546,902
7.25%, 02/01/18		1,250,000		1,427,121
Citigroup, Inc.
6.38%, 08/12/14		2,000,000		2,115,270
6.00%, 08/15/17		2,000,000		2,023,830
8.50%, 05/22/19		200,000		234,717
Countrywide Financial Corp.
6.25%, 05/15/16		1,000,000		1,029,629
Credit Suisse USA, Inc.
5.50%, 05/01/14		1,500,000		1,619,814
5.30%, 08/13/19		1,000,000		1,029,271
Deutsche Bank AG
3.88%, 08/18/14		1,000,000		1,029,048
Goldman Sachs Capital II
5.79%, 06/01/12 (a)(b)		1,500,000		1,155,000
HSBC Holdings PLC
6.50%, 05/02/36		750,000		762,784
JPMorgan Chase & Co.
5.38%, 10/01/12		1,000,000		1,075,528
4.95%, 03/25/20		1,000,000		1,001,990
6.40%, 05/15/38		250,000		277,127
JPMorgan Chase Bank NA
5.88%, 06/13/16		1,500,000		1,573,957
Merrill Lynch & Co., Inc.
5.45%, 02/05/13		2,000,000		2,088,122
Morgan Stanley
4.75%, 04/01/14		1,200,000		1,192,285
6.00%, 05/13/14		300,000		311,248
6.00%, 04/28/15		750,000		774,236
5.45%, 01/09/17 (b)		750,000		725,111
7.30%, 05/13/19 (b)		500,000		526,033
7.25%, 04/01/32 (b)		100,000		110,224
PNC Funding Corp.
4.25%, 09/21/15		600,000		618,572
Royal Bank of Scotland Group PLC
5.05%, 01/08/15		1,000,000		945,340
The Goldman Sachs Group, Inc.
5.63%, 01/15/17		1,250,000		1,245,882
5.95%, 01/15/27 (b)		750,000		679,091
6.75%, 10/01/37 (b)		750,000		704,295
UBS AG
3.88%, 01/15/15		500,000		498,178
US Bancorp
2.13%, 02/15/13		500,000		499,507
3.15%, 03/04/15		500,000		507,835
Wachovia Bank NA
4.88%, 02/01/15		1,000,000		1,047,099
Wells Fargo & Co.
4.38%, 01/31/13		1,000,000		1,047,712
5.63%, 12/11/17		2,000,000		2,140,264
Westpac Banking Corp.
4.20%, 02/27/15		1,000,000		1,020,565
				39,264,089
Brokerage 0.1%
BlackRock, Inc.
5.00%, 12/10/19 (b)		250,000		260,024
Jefferies Group, Inc.
5.50%, 03/15/16 (b)		250,000		252,089
Nomura Holdings, Inc.
5.00%, 03/04/15		100,000		103,972
6.70%, 03/04/20		100,000		103,104
TD Ameritrade Holding Co.
4.15%, 12/01/14 (b)		400,000		409,117
				1,128,306
Finance Company 0.8%
CME Group, Inc.
5.40%, 08/01/13 (b)		500,000		548,000
General Electric Capital Corp.
3.50%, 08/13/12		1,500,000		1,541,650
5.00%, 01/08/16		2,000,000		2,066,630
5.40%, 02/15/17		500,000		522,940
6.75%, 03/15/32 (b)		500,000		520,647
6.88%, 01/10/39		500,000		533,344
HSBC Finance Capital Trust IX
5.91%, 11/30/15 (a)(b)		500,000		426,250
HSBC Finance Corp.
7.00%, 05/15/12		750,000		809,856
4.75%, 07/15/13		750,000		778,506
				7,747,823
Insurance 1.0%
Allstate Life Global Funding Trusts
5.38%, 04/30/13 (e)		700,000		763,997
American International Group, Inc.
5.60%, 10/18/16		1,000,000		860,000
Berkshire Hathaway, Inc.
3.20%, 02/11/15 (b)		750,000		768,109
Chubb Corp.
6.00%, 05/11/37 (b)		1,095,000		1,161,035
CIGNA Corp.
6.35%, 03/15/18 (b)		1,000,000		1,101,414
CNA Financial Corp.
7.35%, 11/15/19 (b)		1,000,000		1,052,944
Lincoln National Corp.
6.25%, 02/15/20 (b)		150,000		157,434
MetLife, Inc.
7.72%, 02/15/19 (b)		500,000		579,546
Protective Life Corp.
7.38%, 10/15/19 (b)		500,000		548,314
Prudential Financial, Inc.
4.75%, 09/17/15		1,000,000		1,029,412
Travelers Co., Inc.
5.90%, 06/02/19 (b)		400,000		438,419
UnitedHealth Group, Inc.
5.80%, 03/15/36 (b)		500,000		484,046
				8,944,670

2 

 Schwab Total Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Real Estate Investment Trust 0.3%
Duke Realty LP
5.95%, 02/15/17 (b)		500,000		505,101
HCP, Inc.
6.70%, 01/30/18 (b)		500,000		523,648
ProLogis
5.75%, 04/01/16 (b)		300,000		295,020
Simon Property Group LP
5.75%, 12/01/15 (b)(e)		1,000,000		1,088,640
				2,412,409
				59,497,297
Industrial 9.6%
Basic Industry 0.9%
Alcoa, Inc.
5.55%, 02/01/17 (b)		1,000,000		976,285
ArcelorMittal
7.00%, 10/15/39 (b)		500,000		483,240
Barrick Gold Corp.
6.95%, 04/01/19 (b)		500,000		583,313
BHP Billiton Finance (USA) Ltd.
5.50%, 04/01/14		800,000		890,167
EI Du Pont de Nemours & Co.
4.75%, 03/15/15 (b)		1,000,000		1,093,960
International Paper Co.
7.30%, 11/15/39 (b)		500,000		535,282
Praxair, Inc.
4.38%, 03/31/14 (b)		350,000		375,052
Rio Tinto Finance (USA) Ltd.
8.95%, 05/01/14 (b)		1,250,000		1,502,965
The Dow Chemical Co.
6.00%, 10/01/12 (b)		500,000		539,046
8.55%, 05/15/19 (b)		600,000		712,757
9.40%, 05/15/39 (b)		100,000		131,219
Vale Overseas Ltd.
6.88%, 11/10/39 (b)		250,000		250,264
				8,073,550
Capital Goods 1.0%
Boeing Capital Corp.
3.25%, 10/27/14 (b)		1,000,000		1,032,987
Boeing Co.
6.88%, 03/15/39 (b)		200,000		242,990
Caterpillar Financial Services Corp.
5.85%, 09/01/17		1,000,000		1,102,460
CRH America, Inc.
5.30%, 10/15/13 (b)		1,000,000		1,067,192
General Electric Co.
5.00%, 02/01/13		500,000		535,593
5.25%, 12/06/17		1,000,000		1,072,143
Honeywell International, Inc.
5.00%, 02/15/19 (b)		525,000		568,238
John Deere Capital Corp.
4.90%, 09/09/13 (e)		500,000		544,944
L-3 Communications Corp.
4.75%, 07/15/20 (b)		150,000		149,897
Lockheed Martin Corp.
4.25%, 11/15/19 (b)		250,000		253,332
5.50%, 11/15/39 (b)		250,000		255,708
Tyco International Finance S.A.
8.50%, 01/15/19 (b)		200,000		255,319
United Technologies Corp.
6.13%, 02/01/19 (b)		250,000		288,982
5.70%, 04/15/40 (b)		500,000		530,976
Waste Management, Inc.
6.38%, 03/11/15 (b)		1,000,000		1,144,422
				9,045,183
Communications 2.1%
America Movil, S.A.B. de CV
5.00%, 10/16/19 (b)(c)		1,000,000		1,004,718
AT&T, Inc.
4.95%, 01/15/13 (b)		1,000,000		1,077,025
6.55%, 02/15/39 (b)		1,000,000		1,086,798
CBS Corp.
8.20%, 05/15/14 (b)		250,000		292,765
5.75%, 04/15/20 (b)		500,000		511,470
Comcast Corp.
5.70%, 05/15/18 (b)		1,000,000		1,083,043
6.50%, 11/15/35 (b)		600,000		637,484
DIRECTV Holdings LLC
3.55%, 03/15/15 (b)		500,000		499,959
Discovery Communications LLC
5.63%, 08/15/19 (b)		500,000		528,255
France Telecom S.A.
4.38%, 07/08/14 (b)		1,000,000		1,066,897
Grupo Televisa S.A.
6.63%, 03/18/25 (b)		500,000		516,858
NBC Universal, Inc.
3.65%, 04/30/15 (b)(c)		500,000		506,839
New Cingular Wireless Services, Inc.
8.75%, 03/01/31 (b)		500,000		665,709
News America Holdings, Inc.
9.25%, 02/01/13		250,000		291,300
News America, Inc.
6.15%, 03/01/37 (b)		650,000		660,655
Pacific Bell Telephone Co.
7.13%, 03/15/26		1,500,000		1,692,324
Telecom Italia Capital S.A.
7.18%, 06/18/19 (b)		1,000,000		1,061,134
Telefonica Emisiones S.A.U.
5.88%, 07/15/19 (b)		1,000,000		1,034,064
Time Warner Cable, Inc.
5.85%, 05/01/17 (b)		1,000,000		1,088,167
6.75%, 06/15/39 (b)		250,000		269,574
Verizon Communications, Inc.
8.75%, 11/01/18 (b)		2,000,000		2,552,798
Vodafone Group PLC
4.63%, 07/15/18 (b)		1,000,000		1,009,866
				19,137,702
Consumer Cyclical 0.9%
CVS Caremark Corp.
3.25%, 05/18/15 (b)		500,000		503,075
4.75%, 05/18/20 (b)		500,000		497,833
Historic TW, Inc.
6.88%, 06/15/18		250,000		287,870
Home Depot, Inc.
5.88%, 12/16/36 (b)		500,000		493,372
Lowe’s Cos., Inc.
5.40%, 10/15/16 (b)		750,000		851,672
McDonald’s Corp.
5.00%, 02/01/19 (b)		1,000,000		1,101,378

3

 Schwab Total Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
PACCAR, Inc.
6.88%, 02/15/14 (b)		800,000		918,098
Target Corp.
6.00%, 01/15/18 (b)		750,000		866,429
6.35%, 11/01/32 (b)		250,000		274,649
The Walt Disney Co.
5.63%, 09/15/16 (b)		500,000		572,425
Time Warner, Inc.
6.20%, 03/15/40 (b)		250,000		251,635
Viacom, Inc.
4.25%, 09/15/15 (b)		1,000,000		1,030,440
Wal-Mart Stores, Inc.
6.20%, 04/15/38		750,000		841,148
				8,490,024
Consumer Non-Cyclical 2.3%
Abbott Laboratories
4.13%, 05/27/20 (b)		500,000		504,074
6.00%, 04/01/39 (b)		500,000		542,394
Amgen, Inc.
5.70%, 02/01/19 (b)		1,000,000		1,133,132
Anheuser-Busch Cos., Inc.
6.80%, 08/20/32 (b)		750,000		828,434
Anheuser-Busch InBev Worldwide, Inc.
3.00%, 10/15/12 (b)		1,000,000		1,025,190
Bottling Group LLC
6.95%, 03/15/14 (b)		500,000		585,699
5.13%, 01/15/19 (b)		500,000		540,826
Coca-Cola Enterprises, Inc.
8.50%, 02/01/12		250,000		279,232
4.50%, 08/15/19 (b)		750,000		778,881
Diageo Capital PLC
7.38%, 01/15/14 (b)		750,000		872,851
Express Scripts, Inc.
6.25%, 06/15/14 (b)		500,000		561,394
General Mills, Inc.
6.00%, 02/15/12 (b)		250,000		269,923
5.70%, 02/15/17 (b)		500,000		566,959
Kraft Foods, Inc.
4.13%, 02/09/16		1,000,000		1,033,778
6.88%, 01/26/39		300,000		334,564
Mead Johnson Nutrition Co.
3.50%, 11/01/14 (b)		1,000,000		1,026,537
5.90%, 11/01/39 (b)		500,000		513,793
Medco Health Solutions, Inc.
6.13%, 03/15/13 (b)(e)		1,000,000		1,103,083
PepsiCo, Inc.
7.90%, 11/01/18 (b)		500,000		641,529
Pfizer, Inc.
5.35%, 03/15/15 (b)		1,000,000		1,120,748
7.20%, 03/15/39 (b)		1,000,000		1,241,586
Philip Morris International, Inc.
4.50%, 03/26/20		500,000		498,989
Procter & Gamble Co.
1.38%, 08/01/12		750,000		755,200
Quest Diagnostics, Inc.
4.75%, 01/30/20 (b)		500,000		506,706
Reynolds American, Inc.
7.25%, 06/01/13 (b)		500,000		553,292
6.75%, 06/15/17 (b)		600,000		634,258
7.25%, 06/15/37 (b)		150,000		147,122
Safeway, Inc.
6.25%, 03/15/14 (b)		600,000		676,237
7.25%, 02/01/31 (b)		150,000		179,402
Teva Pharmaceutical Finance Co. LLC
5.55%, 02/01/16 (b)		350,000		395,338
6.15%, 02/01/36 (b)		650,000		705,123
The Kroger Co.
3.90%, 10/01/15 (b)		300,000		310,999
Watson Pharmaceuticals, Inc.
5.00%, 08/15/14 (b)		300,000		318,685
6.13%, 08/15/19 (b)		500,000		536,268
Zimmer Holdings, Inc.
5.75%, 11/30/39 (b)		200,000		204,743
				21,926,969
Energy 1.3%
Anadarko Petroleum Corp.
5.95%, 09/15/16 (b)		500,000		533,299
6.45%, 09/15/36 (b)		200,000		189,934
Apache Corp.
6.90%, 09/15/18 (b)		400,000		481,858
Baker Hughes, Inc.
6.50%, 11/15/13 (b)		100,000		113,267
7.50%, 11/15/18 (b)		400,000		484,348
BP Capital Markets PLC
3.88%, 03/10/15		500,000		506,768
ConocoPhillips
6.00%, 01/15/20 (b)		1,500,000		1,713,646
Devon Energy Corp.
6.30%, 01/15/19 (b)		500,000		572,312
Encana Corp.
6.63%, 08/15/37 (b)		500,000		550,413
Halliburton Co.
6.15%, 09/15/19 (b)		500,000		547,884
Hess Corp.
7.30%, 08/15/31 (b)		500,000		582,988
Husky Energy, Inc.
7.25%, 12/15/19 (b)		250,000		293,733
Marathon Oil Corp.
5.90%, 03/15/18 (b)		500,000		539,184
Nexen, Inc.
6.20%, 07/30/19 (b)		500,000		544,078
Occidental Petroleum Corp.
7.00%, 11/01/13 (b)		750,000		871,825
Shell International Finance BV
5.20%, 03/22/17 (b)		1,000,000		1,095,222
Statoil ASA
2.90%, 10/15/14 (b)		500,000		510,485
Suncor Energy, Inc.
6.50%, 06/15/38 (b)		500,000		523,438
Transocean, Inc.
6.00%, 03/15/18 (b)		500,000		508,393
Valero Energy Corp.
10.50%, 03/15/39 (b)		200,000		269,290
Weatherford International Ltd.
9.63%, 03/01/19 (b)		250,000		306,613
XTO Energy, Inc.
6.75%, 08/01/37 (b)(e)		500,000		595,952
				12,334,930
Technology 0.7%
Agilent Technologies, Inc.
6.50%, 11/01/17 (b)		1,000,000		1,114,219
Cisco Systems, Inc.
4.45%, 01/15/20 (b)		750,000		771,560

4 

 Schwab Total Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Hewlett-Packard Co.
6.13%, 03/01/14 (b)		700,000		797,667
International Business Machines Corp.
7.63%, 10/15/18 (b)		1,000,000		1,259,194
Microsoft Corp.
4.20%, 06/01/19		500,000		527,795
Nokia OYJ
6.63%, 05/15/39 (b)		500,000		563,244
Oracle Corp.
3.75%, 07/08/14 (b)		1,000,000		1,056,572
Xerox Corp.
5.65%, 05/15/13 (b)(e)		500,000		539,085
				6,629,336
Transportation 0.4%
Burlington Northern Santa Fe Corp.
7.00%, 02/01/14 (b)		700,000		808,041
5.65%, 05/01/17 (b)		1,000,000		1,096,275
Union Pacific Corp.
5.75%, 11/15/17 (b)		700,000		773,071
United Parcel Service, Inc.
6.20%, 01/15/38 (b)		750,000		850,237
				3,527,624
				89,165,318
Utilities 2.0%
Electric 1.4%
Appalachian Power Co.
7.95%, 01/15/20 (b)		600,000		737,501
Dominion Resources, Inc.
5.25%, 08/01/33 (b)		1,000,000		1,084,829
Duke Energy Corp.
7.00%, 11/15/18 (b)		1,000,000		1,214,246
Exelon Generation Co., LLC
5.20%, 10/01/19 (b)		1,000,000		1,035,203
FirstEnergy Solutions Corp.
6.80%, 08/15/39 (b)		1,000,000		963,470
Florida Power Corp.
4.55%, 04/01/20 (b)		750,000		766,188
National Rural Utilities Cooperative Finance Corp.
3.88%, 09/16/15 (b)		1,000,000		1,040,407
Nevada Power Co.
7.13%, 03/15/19 (b)		750,000		872,066
Nisource Finance Corp.
10.75%, 03/15/16 (b)		500,000		642,010
Ohio Edison Co.
8.25%, 10/15/38 (b)		500,000		656,839
Pacific Gas & Electric Co.
8.25%, 10/15/18 (b)		500,000		620,482
5.80%, 03/01/37 (b)		1,000,000		1,020,883
Pacificorp
6.00%, 01/15/39 (b)		1,000,000		1,082,702
Southern California Edison Co.
5.75%, 03/15/14 (b)		1,500,000		1,684,052
				13,420,878
Natural Gas 0.6%
Energy Transfer Partners LP
9.00%, 04/15/19 (b)		500,000		589,650
Enterprise Products Operating LLC
6.30%, 09/15/17 (b)		1,000,000		1,094,925
Kinder Morgan Energy Partners LP
7.13%, 03/15/12 (b)		500,000		540,349
6.85%, 02/15/20 (b)		500,000		553,138
6.95%, 01/15/38 (b)		500,000		513,348
Sempra Energy
6.00%, 10/15/39 (b)		500,000		510,633
Southern Natural Gas Co.
5.90%, 04/01/17 (b)(c)(e)		1,000,000		1,050,633
TransCanada PipeLines Ltd.
6.10%, 06/01/40 (b)		1,000,000		994,950
				5,847,626
				19,268,504
Total Corporate Bonds (Cost $157,907,189)				167,931,119
U.S. Government and Government Agencies 37.7% of net assets
U.S. Government Agency Guaranteed 1.2%
JPMorgan Chase & Co., (FDIC Insured)
3.13%, 12/01/11 (f)		3,500,000		3,618,090
Morgan Stanley, (FDIC Insured)
2.25%, 03/13/12 (f)		2,500,000		2,555,933
The Goldman Sachs Group, Inc., (FDIC Insured)
3.25%, 06/15/12 (f)		1,000,000		1,044,302
Wells Fargo & Co., (FDIC Insured)
3.00%, 12/09/11 (f)		4,000,000		4,129,056
				11,347,381
U.S. Government Agency Securities 6.7%
Fannie Mae
3.63%, 08/15/11		2,000,000		2,071,362
1.75%, 08/10/12		3,000,000		3,043,065
1.50%, 09/25/12 (b)		1,000,000		1,003,333
1.88%, 10/29/12 (b)		3,000,000		3,012,405
3.25%, 04/09/13		2,000,000		2,105,174
2.75%, 02/05/14		2,000,000		2,069,014
3.00%, 10/29/14 (b)		3,000,000		3,030,573
4.38%, 10/15/15 (e)		3,000,000		3,283,551
5.38%, 06/12/17		1,000,000		1,144,979
6.63%, 11/15/30 (e)		1,500,000		1,887,105
Federal Farm Credit Bank
3.50%, 10/03/11		500,000		518,479
4.50%, 10/17/12		1,000,000		1,077,361
1.63%, 03/07/13 (b)		250,000		249,613
2.49%, 02/03/14 (b)		500,000		500,100
4.88%, 01/17/17		500,000		558,943
Federal Home Loan Bank
3.63%, 07/01/11		1,000,000		1,033,425
3.63%, 09/16/11		1,000,000		1,039,015
1.00%, 12/28/11		1,500,000		1,505,014
1.13%, 05/18/12		2,000,000		2,005,916
1.38%, 06/29/12 (b)		2,000,000		2,001,170
1.75%, 08/22/12		1,000,000		1,014,726
1.63%, 11/21/12		500,000		504,700
3.38%, 02/27/13		1,000,000		1,053,784
3.63%, 10/18/13		1,500,000		1,597,413
5.50%, 08/13/14		1,000,000		1,143,427

5

 Schwab Total Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
5.38%, 05/18/16		1,000,000		1,149,097
5.00%, 11/17/17		1,000,000		1,121,964
5.50%, 07/15/36		500,000		552,163
Freddie Mac
3.88%, 06/29/11		1,000,000		1,035,077
1.13%, 12/15/11		2,000,000		2,010,904
2.13%, 09/21/12		3,000,000		3,066,972
1.80%, 02/25/13 (b)		2,000,000		2,010,848
3.75%, 06/28/13		2,000,000		2,139,134
3.00%, 07/28/14		2,500,000		2,603,962
3.15%, 01/22/15 (b)		2,500,000		2,509,355
4.75%, 11/17/15		2,000,000		2,221,712
4.88%, 06/13/18		1,000,000		1,107,018
6.25%, 07/15/32		1,000,000		1,218,772
Tennessee Valley Authority
4.65%, 06/15/35		1,000,000		964,008
				62,164,633
U.S. Treasury Obligations 29.8%
U.S. Treasury Bonds
7.25%, 05/15/16		1,000,000		1,265,938
6.25%, 08/15/23 (e)		1,000,000		1,256,406
6.00%, 02/15/26 (e)		7,000,000		8,713,908
6.13%, 11/15/27		1,000,000		1,268,906
5.50%, 08/15/28		1,000,000		1,190,313
5.25%, 11/15/28		1,000,000		1,158,125
5.25%, 02/15/29 (e)		5,000,000		5,789,065
6.25%, 05/15/30		1,000,000		1,301,875
5.38%, 02/15/31		2,000,000		2,362,812
4.50%, 02/15/36		6,500,000		6,840,236
4.75%, 02/15/37		1,000,000		1,092,969
5.00%, 05/15/37		1,000,000		1,135,156
4.38%, 02/15/38		1,000,000		1,027,344
4.50%, 05/15/38		1,000,000		1,048,438
3.50%, 02/15/39		1,500,000		1,319,766
4.25%, 05/15/39		1,500,000		1,506,329
4.50%, 08/15/39		800,000		836,875
4.38%, 11/15/39		600,000		615,094
4.63%, 02/15/40		2,700,000		2,883,516
U.S. Treasury Notes
1.13%, 06/30/11		2,300,000		2,316,891
5.13%, 06/30/11		1,000,000		1,050,391
1.00%, 07/31/11		2,800,000		2,816,517
4.88%, 07/31/11		4,000,000		4,204,220
5.00%, 08/15/11		2,000,000		2,109,062
1.00%, 08/31/11		3,000,000		3,017,697
1.00%, 09/30/11		3,000,000		3,017,931
4.50%, 09/30/11		1,000,000		1,053,086
1.00%, 10/31/11		3,000,000		3,016,641
1.75%, 11/15/11		3,000,000		3,049,923
0.75%, 11/30/11		2,000,000		2,003,360
1.13%, 12/15/11		2,000,000		2,015,234
1.00%, 12/31/11		3,900,000		3,920,264
0.88%, 01/31/12		7,600,000		7,623,157
1.38%, 02/15/12		2,000,000		2,023,984
4.88%, 02/15/12		2,000,000		2,143,906
1.38%, 03/15/12		2,000,000		2,025,860
1.00%, 03/31/12		1,500,000		1,507,616
1.38%, 04/15/12		5,600,000		5,671,534
1.00%, 04/30/12		500,000		502,363
1.38%, 05/15/12		5,000,000		5,062,110
1.88%, 06/15/12		2,000,000		2,045,312
1.75%, 08/15/12		1,250,000		1,274,903
4.38%, 08/15/12		1,000,000		1,077,891
1.38%, 09/15/12		7,000,000		7,075,467
1.38%, 10/15/12		6,900,000		6,968,462
1.38%, 11/15/12		4,400,000		4,438,157
4.00%, 11/15/12		1,000,000		1,073,906
1.13%, 12/15/12		9,500,000		9,511,134
1.38%, 01/15/13		2,300,000		2,314,734
1.38%, 02/15/13		4,500,000		4,525,312
3.88%, 02/15/13		1,000,000		1,075,156
1.38%, 03/15/13		11,200,000		11,261,230
2.50%, 03/31/13		1,000,000		1,038,047
1.75%, 04/15/13		4,850,000		4,923,123
3.13%, 04/30/13		1,000,000		1,055,703
1.38%, 05/15/13		575,000		577,292
3.50%, 05/31/13		1,000,000		1,067,344
3.38%, 06/30/13		1,000,000		1,063,438
3.38%, 07/31/13		1,000,000		1,062,969
4.25%, 08/15/13		2,000,000		2,182,188
3.13%, 08/31/13		2,000,000		2,108,906
3.13%, 09/30/13		2,000,000		2,107,812
2.75%, 10/31/13		1,745,000		1,816,573
4.25%, 11/15/13		2,000,000		2,187,188
2.00%, 11/30/13		2,000,000		2,030,470
1.50%, 12/31/13		2,000,000		1,993,438
1.75%, 01/31/14		1,000,000		1,004,297
4.00%, 02/15/14		1,000,000		1,086,094
1.88%, 02/28/14		1,000,000		1,007,578
1.75%, 03/31/14		1,000,000		1,002,031
1.88%, 04/30/14		1,000,000		1,005,703
4.75%, 05/15/14		1,000,000		1,116,485
2.25%, 05/31/14		700,000		713,344
2.63%, 06/30/14		850,000		877,226
2.63%, 07/31/14		2,000,000		2,063,594
4.25%, 08/15/14		1,000,000		1,099,219
2.38%, 08/31/14		2,575,000		2,629,719
4.25%, 11/15/14		4,000,000		4,402,812
2.13%, 11/30/14		1,300,000		1,310,563
2.63%, 12/31/14		1,530,000		1,573,749
2.25%, 01/31/15		1,050,000		1,061,238
2.50%, 04/30/15		4,300,000		4,387,346
4.13%, 05/15/15		1,000,000		1,095,625
4.25%, 08/15/15		1,000,000		1,101,641
4.50%, 11/15/15		1,000,000		1,116,641
4.50%, 02/15/16		1,000,000		1,114,141
2.63%, 02/29/16		1,000,000		1,009,219
2.38%, 03/31/16		1,000,000		994,219
2.63%, 04/30/16		1,000,000		1,006,328
5.13%, 05/15/16		1,000,000		1,148,906
3.25%, 05/31/16		1,000,000		1,041,094
3.25%, 06/30/16		1,000,000		1,038,906
3.25%, 07/31/16		2,000,000		2,078,282
4.88%, 08/15/16		1,000,000		1,137,422
3.00%, 08/31/16		2,100,000		2,145,774
3.00%, 09/30/16		2,000,000		2,041,562
3.13%, 10/31/16		3,000,000		3,081,564
4.63%, 11/15/16		1,000,000		1,120,235
2.75%, 11/30/16		3,000,000		3,011,250
3.25%, 12/31/16		2,000,000		2,065,312
3.13%, 01/31/17		3,700,000		3,790,187
3.25%, 03/31/17		2,000,000		2,066,562

6 

 Schwab Total Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
3.13%, 04/30/17		2,000,000		2,049,062
4.50%, 05/15/17		3,000,000		3,349,455
4.75%, 08/15/17		1,000,000		1,132,344
4.25%, 11/15/17		3,000,000		3,291,798
3.50%, 02/15/18		1,000,000		1,041,094
3.88%, 05/15/18		1,000,000		1,063,594
4.00%, 08/15/18		2,000,000		2,140,156
3.75%, 11/15/18		3,000,000		3,142,266
2.75%, 02/15/19		1,500,000		1,451,367
3.38%, 11/15/19		11,400,000		11,472,139
3.63%, 02/15/20		5,415,000		5,555,032
3.50%, 05/15/20		2,100,000		2,135,106
				277,990,254
Total U.S. Government and Government Agencies (Cost $342,831,409)				351,502,268
Commercial Mortgage Backed Securities 3.1% of net assets
Banc of America Commercial Mortgage, Inc.
Series 2005-3 Class AJ
4.77%, 07/01/10 (a)(b)		1,100,000		907,392
Series 2006-1 Class A2
5.33%, 09/10/45 (b)		4,000,000		4,047,643
Series 2006-3 Class AM
5.81%, 07/01/10 (a)(b)		800,000		672,287
Series 2007-1 Class A4
5.45%, 01/15/49 (b)		1,700,000		1,655,367
Bear Stearns Commercial Mortgage Securities
Series 2005-PW10 Class A4
5.41%, 12/11/40 (b)		4,000,000		4,112,989
Citigroup/Deutsche Bank Commercial Mortgage Trust
Series 2005-CD1 Class A3
5.22%, 07/01/10 (a)(b)		4,200,000		4,352,846
Credit Suisse Mortgage Capital Certificates
Series 2006-C1 Class AM
5.55%, 07/01/10 (a)(b)		650,000		592,526
Series 2007-C5 Class A3
5.69%, 07/01/10 (a)(b)		315,000		313,131
Series 2007-C5 Class A4
5.70%, 07/01/10 (a)(b)		900,000		804,939
GE Capital Commercial Mortgage Corp.
Series 2007-C1 Class AAB
5.48%, 12/10/49 (b)		135,000		137,460
Greenwich Capital Commercial Funding Corp.
Series 2007-GG9 Class A4
5.44%, 03/10/39 (b)		3,000,000		2,905,218
GS Mortgage Securities Corp II
Series 2006-GG6 Class A4
5.55%, 07/01/10 (a)(b)		1,100,000		1,096,554
JP Morgan Chase Commercial Mortgage Securities Corp.
Series 2005-LDP5 Class AJ
5.32%, 07/01/10 (a)(b)		1,025,000		921,421
Series 2007-LD12 Class A3
5.96%, 07/01/10 (a)(b)		2,000,000		2,018,323
JPMorgan Chase Commercial Mortgage Securities Corp.
Series 2006-LDP9 Class A2S
5.30%, 05/15/47 (b)		1,000,000		1,013,646
Series 2007-LD12 Class A2
5.83%, 02/15/51 (b)		75,000		77,817
LB-UBS Commercial Mortgage Trust
Series 2005-C3 Class AJ
4.84%, 07/15/40 (b)		241,000		208,721
Merrill Lynch Mortgage Trust
Series 2005-LC1 Class AM
5.26%, 07/01/10 (a)(b)		700,000		673,226
Morgan Stanley Capital I
Series 2007-IQ14 Class AAB
5.65%, 07/01/10 (a)(b)		2,690,000		2,798,578
Total Commercial Mortgage Backed Securities (Cost $27,227,558)				29,310,084
Asset-Backed Obligations 0.4% of net assets
Chase Issuance Trust
Series 2007-A17 Class A
5.12%, 10/15/14 (b)(e)		1,900,000		2,056,851
Series 2008-A4 Class A4
4.65%, 03/15/15 (b)		700,000		753,858
Nissan Auto Receivables Owner Trust
Series 2008-B Class A4
5.05%, 11/17/14 (b)(e)		500,000		531,565
Total Asset-Backed Obligations (Cost $3,165,380)				3,342,274
Foreign Securities 3.9% of net assets
Foreign Agencies 1.2%
Canada 0.1%
Export Development Canada
1.75%, 09/24/12		1,000,000		1,010,787
Cayman Islands 0.1%
Petrobras International Finance Co.
5.75%, 01/20/20 (b)		1,000,000		997,418
Germany 0.6%
KFW Bankengruppe
2.00%, 01/17/12		1,000,000		1,014,523
3.50%, 03/10/14		4,500,000		4,729,243
				5,743,766
Mexico 0.2%
Petroleos Mexicanos
4.88%, 03/15/15 (b)		1,000,000		1,031,000
8.00%, 05/03/19 (b)		400,000		463,000
				1,494,000
Republic of Korea 0.2%
Export-Import Bank of Korea
8.13%, 01/21/14		500,000		570,140
4.13%, 09/09/15		500,000		496,095
Korea Development Bank
8.00%, 01/23/14		500,000		560,930
				1,627,165
				10,873,136
Foreign Local Government 0.5%
Canada 0.5%

7

 Schwab Total Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Province of Ontario Canada
4.10%, 06/16/14		3,000,000		3,198,981
4.40%, 04/14/20		1,000,000		1,029,170
				4,228,151
Sovereign 1.1%
Brazil 0.4%
Brazilian Government International Bond
6.00%, 01/17/17 (b)		2,250,000		2,449,125
8.88%, 04/15/24		1,000,000		1,330,000
				3,779,125
Canada 0.2%
Canada Government International Bond
2.38%, 09/10/14		1,500,000		1,526,158
Italy 0.1%
Republic of Italy
3.13%, 01/26/15		1,000,000		969,760
6.88%, 09/27/23		250,000		283,448
				1,253,208
Mexico 0.3%
United Mexican States
5.95%, 03/19/19 (b)		1,500,000		1,623,750
5.13%, 01/15/20 (b)		1,000,000		1,022,500
6.75%, 09/27/34		250,000		275,625
				2,921,875
Panama 0.0%
Republic of Panama
7.25%, 03/15/15		150,000		174,000
Peru 0.1%
Peruvian Government International Bond
7.13%, 03/30/19		500,000		586,250
				10,240,616
Supranational 1.1%
European Investment Bank
1.75%, 09/14/12		5,500,000		5,553,663
Inter-American Development Bank
3.00%, 04/22/14		2,000,000		2,075,436
3.88%, 09/17/19		1,500,000		1,548,878
International Bank for Reconstruction & Development
2.00%, 04/02/12		1,000,000		1,017,371
Nordic Investment Bank
3.63%, 06/17/13		500,000		529,960
				10,725,308
Total Foreign Securities (Cost $35,200,000)				36,067,211
Municipal Bonds 0.6% of net assets
Fixed-Rate Obligations 0.6%
Bay Area Toll Auth
San Francisco Bay Area Toll Bridge RB Series 2009F2
6.26%, 04/01/49		1,050,000		1,118,145
California
GO Bonds
7.50%, 04/01/34		750,000		787,688
7.55%, 04/01/39		500,000		529,935
East Bay Municipal Utility District
Water System RB (Build America Bonds) Series 2010
5.87%, 06/01/40		1,000,000		1,057,600
Illinois
GO Bonds (Pension Funding) Series 2003
5.10%, 06/01/33		1,000,000		862,960
Yale Univ
Medium-Term Notes Series B
2.90%, 10/15/14 (b)		1,000,000		1,026,412
Total Municipal Bonds (Cost $5,318,440)				5,382,740
	Number		Value
Security	of Shares		($)
Other Investment Company 0.4% of net assets
Money Fund 0.4%
State Street Institutional Liquid Reserves Fund - Institutional Class		3,546,934		3,546,933
Total Other Investment Company (Cost $3,546,933)				3,546,933
Issuer	Face Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 0.0% of net assets
U.S. Treasury Obligation 0.0%
U.S. Treasury Bills
0.16%, 08/26/10 (d)		100,000		99,965
Total Short-Term Investment (Cost $99,963)				99,965
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $887,023,405, and the unrealized appreciation and depreciation were $33,720,769 and ($828,260), respectively, with a net unrealized appreciation of $32,892,509.

8 

 Schwab Total Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

(a)	Variable-rate security.
(b)	Callable security.
(c)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $2,562,190 or 0.3% of net assets.
(d)	All or a portion of this security is held as collateral for open futures contracts.
(e)	All or a portion of this security is held as collateral for short sales.
(f)	This debt is guaranteed under the FDIC Temporary Liquidity Guarantee Program, and the FDIC has stated that this debt is backed by the full faith and credit of the United States.

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Short Sales 0.1% of net assets
U.S. Government Agency Mortgages 0.1%
Ginnie Mae TBA
5.50%, 06/21/40		500,000		536,250
Total Short Sales (Proceeds $536,875)				536,250
End of Short Sale Positions.

					Unrealized
			Contract		Gains /
	Number of		Value		(Losses)
	Contracts		($)		($)
Futures Contracts
10 Years, Long, U.S. Treasury Note expires 09/21/10		35		4,195,625		(3,073	)
2 Years, Long, U.S. Treasury Note expires 09/30/10		20		4,362,813		4,940
5 Years, Long, U.S. Treasury Note expires 09/30/10		40		4,666,875		4,568
Net unrealized gains						6,435

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the

9

 Schwab Total Bond Market Fund

^{Portfolio Holdings (Unaudited) continued}

amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of May 31, 2010:

Assets Valuation Input

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Mortgage-Backed Securities(a)		$2,083,202		$320,650,118		$—		$322,733,320
Corporate Bonds(a)		—		167,931,119		—		167,931,119
U.S. Government and Government Agencies(a)		—		351,502,268		—		351,502,268
Commercial Mortgage Backed Securities		—		29,310,084		—		29,310,084
Asset-Backed Obligations		—		3,342,274		—		3,342,274
Foreign Securities(a)		—		36,067,211		—		36,067,211
Municipal Bonds(a)		—		5,382,740		—		5,382,740
Other Investment Company		3,546,933		—		—		3,546,933
Short-Term Investments(a)		—		99,965		—		99,965
Total		$5,630,135		$914,285,779		$—		$919,915,914
Other Financial Instruments*
Futures Contracts		$9,508		$—		$—		$9,508

Liabilities Valuation Input

	Quoted Prices in						Significant
	Active Markets for			Significant Other			Unobservable
	Identical Assets			Observable Inputs			Inputs
Description	(Level 1)			(Level 2)			(Level 3)		Total
Short Sales(a)		$—			$(536,250	)		$—		$(536,250	)
Other Financial Instruments*
Futures Contracts		$(3,073	)		$—			$—		$(3,073	)

*	Futures contracts are not included in Investments and are valued at the unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

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

	Balance							Change in								Balance
	as of		Accrued		Realized			Unrealized		Net			Net			as of
	August 31,		Discounts		Gain			Gain		Purchases			Transfers			May 31,
Investments in Securities	2009		(Premiums)		(Loss)			(Loss)		(Sales)			in/out			2010
Corporate Bonds		$1,248,750		$382		$(239,507	)		$469,625		$(1,053,000	)		$(426,250	)		$—
Total		$1,248,750		$382		$(239,507	)		$469,625		$(1,053,000	)		$(426,250	)		$—

Schwab Total Bond Market Fund entered into futures contracts during the period ended May 31, 2010. The fund invests in futures to help manage the effects of interest rate changes and is subject to credit risk, leverage risk, market risk, management risk, liquidity risk, lack of availability risk, valuation risk, correlation risk and tax risk.

REG46017MAY10 - 00

10 

Schwab Investments
Schwab GNMA Fund™

Portfolio Holdings As of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost		Value
Holdings by Category				($)		($)
	105	.5%	Mortgage-Backed Securities		472,359,358		484,397,434
	1	.5%	U.S. Government Security		7,034,021		7,035,273
	1	.6%	Other Investment Company		7,363,588		7,363,588
	4	.4%	Short-Term Investment		19,998,578		19,998,578
	113	.0%	Total Investments		506,755,545		518,794,873
	(13	.0)%	Other Assets and Liabilities, Net				(59,538,961	)
	100	.0%	Net Assets				459,255,912

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Mortgage-Backed Securities 105.5% of net assets
Collateralized Mortgage Obligations 0.0%
Vendee Mortgage Trust
Series 1995-3 Class 1Z
7.25%, 09/15/25 (b)		79,792		90,366
U.S. Government Agency Mortgages 105.5%
Fannie Mae
5.45%, 12/01/31 to 07/01/32		408,799		440,465
5.49%, 09/01/31		117,741		126,942
5.50%, 09/01/14 to 09/01/17		763,910		814,026
5.81%, 12/01/31 to 01/01/32		221,112		241,014
6.00%, 03/01/22		917,384		1,011,762
6.10%, 02/01/29		48,354		53,307
6.25%, 06/01/29		67,718		75,053
6.50%, 04/01/31		259,673		285,305
7.17%, 11/01/30		31,246		35,043
Fannie Mae Grantor Trust
6.50%, 07/25/42 (b)		151,189		165,890
7.00%, 01/25/44 (b)		172,283		190,033
Fannie Mae REMICS
4.00%, 03/25/15		133,936		134,385
4.50%, 10/25/15		17,560		17,567
5.00%, 10/25/18		118,848		119,225
7.00%, 09/25/22 to 01/25/42		1,204,576		1,348,420
Fannie Mae Whole Loan
6.50%, 02/25/44 (b)		175,907		193,701
7.00%, 10/25/42 (b)		96,627		104,954
Freddie Mac Gold
5.50%, 01/01/17 to 02/01/24		8,266,752		8,899,642
Freddie Mac REMICS
3.75%, 12/15/11 (b)		57,531		57,658
4.00%, 09/15/16 to 06/15/26 (b)		2,320,470		2,338,116
4.13%, 08/15/12 (b)		488,310		493,223
4.50%, 11/15/25 (b)		14,394		14,623
5.00%, 12/15/17 (b)		1,687,880		1,715,444
5.50%, 06/15/25 to 03/15/29 (b)		553,679		559,978
6.00%, 04/15/27 (b)		614,870		617,704
6.50%, 03/15/14 (b)(c)		335,881		25,712
Ginnie Mae
2.88%, 07/01/10 (a)		67,809		69,634
3.00%, 07/01/10 (a)		46,652		47,913
3.50%, 07/01/10 (a)		73,121		75,207
3.50%, 02/20/34 (b)		3,648,826		3,724,648
3.63%, 07/01/10 (a)		149,566		154,376
4.00%, 07/01/10 (a)		543,309		562,073
4.00%, 10/17/29 to 02/20/32 (b)		667,621		696,866
4.00%, 10/20/33		62,183		62,677
4.13%, 07/01/10 (a)		92,451		95,640
4.25%, 06/16/24 (b)		90,653		93,312
4.38%, 07/01/10 (a)		446,677		463,015
4.50%, 12/15/17 to 12/20/39		32,047,215		33,215,007
4.50%, 10/20/34 (b)		156,624		163,125
5.00%, 11/15/17 to 10/15/39		122,101,244		130,035,262
5.00%, 02/20/29 to 01/16/32 (b)		1,676,051		1,711,306
5.45%, 07/15/31 to 02/15/33		8,507,671		9,191,176
5.49%, 10/15/31 to 09/15/32		1,444,739		1,562,872
5.50%, 09/20/13 to 07/15/38		105,936,938		114,598,995
5.50%, 08/20/15 to 07/20/31 (b)		874,906		935,887
5.81%, 06/20/31 to 02/20/32		842,982		925,282
5.90%, 07/15/31 to 05/15/32		586,274		642,220
6.00%, 02/20/12 to 11/15/39		60,963,613		66,516,573
6.00%, 12/20/17 to 06/16/18 (b)		3,503,180		3,577,946

1

 Schwab GNMA Fund

^{Portfolio Holdings (Unaudited) continued}

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
6.05%, 09/15/31		134,473		147,950
6.10%, 07/20/28 to 09/15/31		3,026,002		3,338,657
6.15%, 04/20/29 to 04/20/30		1,885,900		2,085,190
6.25%, 11/01/11 to 03/20/30		2,618,454		2,899,847
6.50%, 12/20/11 to 10/20/37		17,714,532		19,626,834
7.00%, 09/15/10 to 04/15/39		5,142,210		5,706,643
7.10%, 12/15/30		67,268		75,746
7.17%, 04/20/30 to 03/20/31		690,660		776,607
7.50%, 04/15/11 to 11/15/37		593,585		673,209
8.00%, 08/15/11 to 06/15/30		139,877		162,230
8.50%, 08/20/25 to 01/20/30		21,083		24,396
9.00%, 09/20/15 to 09/20/30		615,055		690,474
13.00%, 07/20/14		29		33
Ginnie Mae TBA
4.50%, 06/01/40		43,000,000		44,142,166
5.00%, 06/01/40		14,000,000		14,756,882
				484,307,068
Total Mortgage-Backed Securities (Cost $472,359,358)				484,397,434
U.S. Government Security 1.5% of net assets
U.S. Treasury Obligation 1.5%
U.S. Treasury Note
1.25%, 11/30/10		7,000,000		7,035,273
Total U.S. Government Securities (Cost $7,034,021)				7,035,273
	Number		Value
Security	of Shares		($)
Other Investment Company 1.6% of net assets
Money Fund 1.6%
State Street Institutional Liquid Reserves Fund - Institutional Class		7,363,588		7,363,588
Total Other Investment Company (Cost $7,363,588)				7,363,588
Issuer	Face Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 4.4% of net assets
U.S. Treasury Obligation 4.4%
U.S. Treasury Bill
0.16%, 06/17/10		20,000,000		19,998,578
Total Short-Term Investment (Cost $19,998,578)				19,998,578
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $506,756,864 and the unrealized appreciation and depreciation were $12,081,973 and ($43,964), respectively, with a net unrealized appreciation of $12,038,009.

(a)	Variable-rate security.
(b)	Callable security.
(c)	Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily

2 

 Schwab GNMA Fund

^{Portfolio Holdings (Unaudited) continued}

close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of May 31, 2010:

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total*
Mortgage-Backed Securities(a)		$—		$484,397,434		$—		$484,397,434
U.S. Government Securities(a)		—		7,035,273		—		7,035,273
Other Investment Company		7,363,588		—		—		7,363,588
Short-Term Investments(a)		—		19,998,578		—		19,998,578
Total		$7,363,588		$511,431,285		$—		$518,794,873

*	The fund had no Other Financial Investments.
(a)	As categorized in Portfolio Holdings.

REG46018MAY10 - 00

3

Schwab Investments
Schwab Inflation-Protected Fund™

Portfolio Holdings As of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost		Value
Holdings by Category				($)		($)
	97	.0%	U.S. Government Securities		178,596,984		189,155,372
	2	.3%	Other Investment Company		4,525,357		4,525,357
	99	.3%	Total Investments		183,122,341		193,680,729
	0	.7%	Other Assets and Liabilities, Net				1,430,147
	100	.0%	Net Assets				195,110,876

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
U.S. Government Securities 97.0% of net assets
U.S. Treasury Obligations 97.0%
U.S. Treasury Inflation Protected Securities
3.38%, 01/15/12		2,144,590		2,263,044
2.00%, 04/15/12		5,458,262		5,649,726
3.00%, 07/15/12		9,076,875		9,644,888
0.63%, 04/15/13		5,404,875		5,499,460
1.88%, 07/15/13		7,997,265		8,422,744
2.00%, 01/15/14		8,685,316		9,207,790
1.25%, 04/15/14		5,655,155		5,877,386
2.00%, 07/15/14		7,215,062		7,702,079
1.63%, 01/15/15		8,831,977		9,262,536
0.50%, 04/15/15		2,510,275		2,526,750
1.88%, 07/15/15		6,992,000		7,429,545
2.00%, 01/15/16		7,098,931		7,595,856
2.50%, 07/15/16		6,734,375		7,425,174
2.38%, 01/15/17		5,934,665		6,480,838
2.63%, 07/15/17		5,197,104		5,793,960
1.63%, 01/15/18		6,491,812		6,753,511
1.38%, 07/15/18		5,045,500		5,156,657
2.13%, 01/15/19		5,067,600		5,457,567
1.88%, 07/15/19		5,605,215		5,919,197
1.38%, 01/15/20		3,773,513		3,803,289
2.38%, 01/15/25		10,470,499		11,446,381
2.00%, 01/15/26		6,676,832		6,956,425
2.38%, 01/15/27		4,855,635		5,302,504
1.75%, 01/15/28		5,453,123		5,442,898
3.63%, 04/15/28		6,605,816		8,429,642
2.50%, 01/15/29		5,067,600		5,641,663
3.88%, 04/15/29		8,140,570		10,809,790
3.38%, 04/15/32		2,084,081		2,668,764
2.13%, 02/15/40		4,278,773		4,585,308
Total U.S. Government Securities (Cost $178,596,984)				189,155,372
	Number		Value
Security	of Shares		($)
Other Investment Company 2.3% of net assets
Money Fund 2.3%
State Street Institutional Liquid Reserves Fund - Institutional Class		4,525,357		4,525,357
Total Other Investment Company (Cost $4,525,357)				4,525,357
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $184,010,916, and the unrealized appreciation and depreciation were $9,683,569 and ($13,756), respectively, with a net unrealized appreciation of $9,669,813.

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are

1

 Schwab Inflation-Protected Fund

^{Portfolio Holdings (Unaudited) continued}

based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of May 31, 2010:

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total*
U.S. Government Securities(a)		$—		$189,155,372		$—		$189,155,372
Other Investment Company		4,525,357		—		—		4,525,357
Total		$4,525,357		$189,155,372		$—		$193,680,729

*	The fund had no Other Financial Investments.
(a)	As categorized in Portfolio Holdings.

REG46019MAY10 - 00

2 

Schwab Investments
Schwab Tax-Free YieldPlus Fund™

Portfolio Holdings of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost		Value
Holdings by Category				($)		($)
	40	.1%	Fixed-Rate Obligations		12,564,181		12,606,525
	59	.0%	Variable-Rate Obligations		29,560,000		18,556,561
	99	.1%	Total Investments		42,124,181		31,163,086
	0	.9%	Other Assets and Liabilities, Net				270,656
	100	.0%	Net Assets				31,433,742

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Fixed-Rate Obligations 40.1% of net assets
ALASKA 0.3%
Anchorage
General Purpose GO Bonds Series 2000A		4.75%		09/01/10			100,000		101,086
ARIZONA 2.0%
Phoenix Civic Improvement Corp
Jr Lien Wastewater System RB Series 2000		6.00%		07/01/10	(a)		100,000		101,442
Pima Cnty Metropolitan Domestic Water Improvement District
Sr Lien Water Refunding RB Series 2009		2.50%		01/11/11	(a)		250,000		252,022
Salt River Project Agricultural Improvement & Power District
Electric System Refunding RB Series 2001A		5.00%		01/01/11			255,000		261,959
									615,423
CALIFORNIA 3.8%
California
Economic Recovery Bonds Series 2008A		4.00%		07/01/10			50,000		50,143
Los Angeles USD
GO Bonds Series 2002E		5.00%		07/01/10			125,000		125,456
Orange Cnty Sanitation District
Refunding COP Series 2008A		4.00%		08/01/10			500,000		502,870
Riverside Cnty
Teeter Obligation Notes Series 2009C		2.00%		10/15/10			500,000		502,345
									1,180,814
COLORADO 1.8%
Colorado Dept of Transportation
RAN Series 2000		6.00%		06/15/10			50,000		50,095

1

 Schwab Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Colorado Health Facilities Auth
RB (Catholic Health Initiatives) Series 2008C6		3.95%		11/10/10			500,000		507,415
									557,510
DELAWARE 0.6%
Wilmington
GO Bonds Series 2007A		4.25%		06/01/10	(a)		200,000		200,000
FLORIDA 2.9%
Florida State Board of Education
Public Education Capital Outlay Bonds Series 1999C		5.75%		06/01/10	(a)		50,000		50,500
Orange Cnty School Board
COP Series 1997A		6.00%		08/01/10	(a)		500,000		504,045
West Palm Beach
Public Service Tax Refunding Bonds Series 2010		3.00%		03/01/12			350,000		360,902
									915,447
INDIANA 2.2%
Indiana Health Facility Financing Auth
Sub RB (Ascension Health) Series 2005A		5.00%		04/01/11			665,000		688,215
KANSAS 3.2%
Junction City
GO Temporary Notes Series 2009B		4.00%		06/01/10			1,000,000		1,000,000
LOUISIANA 1.8%
Louisiana Public Facilities Auth
Refunding RB (Christus Health) Series 2009A		5.00%		07/01/11			550,000		567,913
MISSOURI 3.5%
Hanley Rd & North of Folk Ave Transportation Development District
Transportation Sales Tax RB Series 2005		5.00%		10/01/12	(a)		1,000,000		1,102,040
NEW JERSEY 5.0%
Monmouth Cnty Improvement Auth
Governmental Loan RB (Atlantic Highlands) Series 2010		2.00%		02/01/11			120,000		121,290
Governmental Loan RB (Atlantic Highlands) Series 2010		2.50%		02/01/12			150,000		154,678
Montville Township
GO Refunding Bonds		3.75%		07/15/11			505,000		524,003
Princeton Township
General Improvement Refunding Bonds		4.00%		09/01/10			640,000		645,811
General Improvement Refunding Bonds		4.00%		09/01/11			125,000		130,533
									1,576,315
NEW YORK 1.6%
Triborough Bridge & Tunnel Auth
Sub RB Series 2003A		3.25%		11/15/10			500,000		506,285

2 

 Schwab Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
OKLAHOMA 0.3%
Grady Cnty School Finance Auth
Educational Facilities Lease RB (Bridge Creek Public Schools) Series 2008		4.00%		09/01/11			90,000		92,728
TEXAS 1.1%
Conroe ISD
Unlimited Tax GO Bonds Series 2004A		3.50%		02/15/11	(a)		100,000		102,221
Denton
GO Refunding Bonds Series 2009		5.00%		02/15/11			150,000		154,829
La Joya ISD
Unlimited Tax GO Bonds Series 2008		3.25%		02/15/11	(a)		100,000		101,515
									358,565
UTAH 4.6%
Salt Lake Cnty Municipal Building Auth
Lease RB Series 2009A		3.00%		12/01/10			570,000		577,000
Lease RB Series 2009A		2.75%		12/01/11			835,000		860,526
									1,437,526
VIRGINIA 2.2%
Henrico Cnty
GO Public Improvement Bonds Series 2008A		3.50%		12/01/10			200,000		203,180
Richmond
GO Bonds Series 2009A		2.00%		07/15/11			380,000		386,981
Virginia College Building Auth
RB (21st Century College) Series 2008A		5.00%		02/01/11			100,000		103,067
									693,228
WASHINGTON 3.2%
South Whidbey SD No. 206
Unlimited Tax GO Refunding Bonds Series 2009		3.00%		12/01/10			1,000,000		1,013,430
Total Fixed-Rate Obligations (Cost $12,564,181)									12,606,525
Variable-Rate Obligations 59.0% of net assets
ARIZONA 6.0%
Maricopa Cnty IDA
M/F Housing RB (AHF Affordable Housing Portfolio) Series 2003B		0.50%		06/17/10	(d)(e)(f)(g)		6,755,000		1,873,161
CALIFORNIA 9.1%
California Educational Facilities Auth
RB (Univ of San Francisco) Series 2003		2.00%		06/02/10	(a)		1,250,000		1,250,000
Coast Community College District
GO Bonds Series 2006C		0.29%		06/03/10	(b)(c)		1,100,000		1,100,000

3

 Schwab Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Irvine Assessment District
Limited Obligation Improvement Bonds (Reassessment District No. 85-7) Series A		0.33%		06/01/10	(a)(b)		500,000		500,000
									2,850,000
COLORADO 8.2%
Colorado Health Facilities Auth
RB (Exempla Northwest Medical Center) Series 2002A		0.43%		06/03/10	(a)(b)(c)		1,480,000		1,480,000
Colorado Springs Utilities System
Refunding RB Series 2007B		0.27%		06/03/10	(b)		1,100,000		1,100,000
									2,580,000
ILLINOIS 2.4%
Chicago
Refunding GO Bonds Series 2007F		0.70%		06/01/10	(b)		750,000		750,000
INDIANA 1.9%
Indiana Health & Educational Facility Financing Auth
RB (Ascension Health) Series 2006B4 & B6		0.30%		06/01/10	(b)(c)		600,000		600,000
MASSACHUSETTS 9.7%
Massachusetts Health & Educational Facilities Auth
RB (New England Medical Center Hospitals) Series G2		0.50%		07/01/10	(d)(e)(f)		3,400,000		3,060,000
NEW YORK 4.9%
Long Island Power Auth
Electric System General RB Series 2003F		0.36%		06/02/10	(a)(b)		300,000		300,000
New York City
GO Bonds Fiscal 2002 Series A6		0.33%		06/01/10	(a)(b)		1,000,000		1,000,000
GO Bonds Fiscal 2008 Series J3		1.15%		06/01/10	(a)		250,000		250,000
									1,550,000
OKLAHOMA 7.0%
Tulsa Cnty Industrial Auth
M/F Housing RB (AHF Affordable Housing Portfolio) Series 2003B		0.60%		06/24/10	(d)(e)(f)(g)		8,000,000		2,218,400
PENNSYLVANIA 1.9%
Somerset Cnty
Bonds Series 2007		0.29%		06/03/10	(a)(b)		585,000		585,000
TENNESSEE 6.4%
Clarksville Public Building Auth
Pooled Financing RB Series 2003		0.27%		06/01/10	(a)		2,000,000		2,000,000

4 

 Schwab Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
VIRGINIA 1.5%
Fairfax Cnty IDA
Health Care RB (Inova Health System) Series 2005A2		0.28%		06/01/10	(b)		490,000		490,000
Total Variable-Rate Obligations (Cost $29,560,000)									18,556,561
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $42,124,182 and the unrealized appreciation and depreciation were $47,858 and ($11,008,954), respectively, with a net unrealized depreciation of ($10,961,096).

(a)	Credit-enhanced security.
(b)	Liquidity-enhanced security.
(c)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $3,180,000 or 10.1% of net assets.
(d)	Illiquid security. At the period end, the value of these amounted to $7,151,561 or 22.8% of net assets.
(e)	Failed Auction Rate Bond - this security’s interest payments are adjusted periodically through an auction process. The process typically serves as a means for buying and selling the bond, and the maturity date listed in the portfolio holdings is the next auction date. Auctions that fail to attract enough buyers for all the bonds offered for sale are deemed to have “failed”. Although the auctions have failed, the issuer continues to pay a formula-based interest rate which resets at each scheduled auction.
(f)	Fair-valued by management in accordance with procedures approved by the Board of Trustees.
(g)	Security is in default.

COP —	Certificate of participation
GO —	General obligation
IDA —	Industrial development agency/authority
ISD —	Independent school district
M/F —	Multi-family
RAN —	Revenue anticipation note
RB —	Revenue bond
SD —	School district
USD —	Unified school district

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

5

 Schwab Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of May 31, 2010:

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total*
Fixed-Rate Obligations(a)		$—		$12,606,525		$—		$12,606,525
Variable-Rate Obligations(a)		—		11,405,000		—		11,405,000
Arizona		—		—		1,873,161		1,873,161
Massachusetts		—		—		3,060,000		3,060,000
Oklahoma		—		—		2,218,400		2,218,400
Total		$—		$24,011,525		$7,151,561		$31,163,086

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

6 

 Schwab Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

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

	Balance							Change in								Balance
	as of		Accrued		Realized			Unrealized			Net			Net		as of
	August 31,		Discounts		Gain			Gain			Purchases			Transfers		May 31,
Investments in Securities	2009		(Premiums)		(Loss)			(Loss)			(Sales)			in/out		2010
Variable-Rate Obligations		$9,997,000		$—		$(58,937	)		$(1,695,439	)		$(1,091,063	)		$—		$7,151,561
Total		$9,997,000		$—		$(58,937	)		$(1,695,439	)		$(1,091,063	)		$—		$7,151,561

REG46021MAY10 - 00

7

Schwab Investments
Schwab Tax-Free Bond Fund™

Portfolio Holdings of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost		Value
Holdings by Category				($)		($)
	99	.1%	Fixed-Rate Obligations		370,939,267		381,354,218
	2	.0%	Variable-Rate Obligations		7,950,000		7,952,010
	101	.1%	Total Investments		378,889,267		389,306,228
	(1	.1)%	Other Assets and Liabilities, Net				(4,365,394	)
	100	.0%	Net Assets				384,940,834

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Fixed-Rate Obligations 99.1% of net assets
ALABAMA 0.6%
Camden IDB
Facilities RB (Weyerhaeuser) Series 2003A		6.13%		12/01/13	(a)		1,725,000		2,017,474
Huntsville
Water Revenue Warrant Series 2008		5.00%		11/01/15	(a)		400,000		461,248
									2,478,722
ARIZONA 3.2%
Glendale IDA
RB (Midwestern Univ) Series 2010		4.00%		05/15/12			500,000		522,750
RB (Midwestern Univ) Series 2010		5.00%		05/15/15			415,000		452,313
Refunding RB (Midwestern Univ) Series 2004		5.25%		05/15/13			200,000		216,434
Refunding RB (Midwestern Univ) Series 2004		5.25%		05/15/14			500,000		547,655
Maricopa Cnty Elementary SD No. 17
GO Bonds (Tolleson Elementary) Series 2008B		4.00%		07/01/14	(a)		95,000		101,864
Maricopa Cnty IDA
Health Facility RB (Catholic Healthcare West) Series 2009B		5.00%		07/02/12	(f)		3,000,000		3,129,960
Payson USD No. 10
Bonds Series 2008B		3.00%		07/01/28	(f)		1,375,000		1,439,859
Phoenix Civic Improvement Corp
Sr Lien Airport Refunding RB Series 2008C		5.00%		07/01/13			425,000		465,001
Sr Lien Wastewater System Refunding RB Series 2008		5.50%		07/01/24			540,000		610,540
Pima Cnty Metropolitan Domestic Water Improvement District
Sr Lien Water Refunding RB Series 2009		3.25%		01/01/17	(a)		300,000		304,623
Sr Lien Water Refunding RB Series 2009		3.50%		01/01/18	(a)		785,000		801,249
Sr Lien Water Refunding RB Series 2009		3.63%		01/01/19	(a)		750,000		763,012
Univ Medical Center Corp
Hospital RB Series 2009		5.00%		07/01/13			540,000		565,677
Hospital RB Series 2009		5.00%		07/01/14			615,000		647,128
Hospital RB Series 2009		5.00%		07/01/15			295,000		310,364

1

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Hospital RB Series 2009		5.50%		07/01/16			350,000		375,917
Hospital RB Series 2009		6.00%		07/01/18			500,000		563,650
Hospital RB Series 2009		5.75%		07/01/19			350,000		389,746
									12,207,742
CALIFORNIA 13.2%
Anaheim Public Financing Auth
Lease Refunding RB Series 2008		5.00%		08/01/17			955,000		1,067,432
California Dept of Water Resources
Power Supply RB Series 2005G4		5.00%		05/01/16	(f)		1,000,000		1,129,530
Water System RB Series AG		5.00%		12/01/27			3,915,000		4,319,341
California Educational Facilities Auth
RB (California Institute of Technology) Series 2009		5.00%		11/01/39	(f)		1,500,000		1,599,645
RB (Pitzer College) Series 2009		5.25%		04/01/23			1,965,000		2,106,716
California Health Facilities Financing Auth
RB (Childrens Hospital Orange Cnty) Series 2009A		6.50%		11/01/38	(f)		1,750,000		1,883,788
California Infrastructure & Economic Development Bank
RB (Sanford Consortium) Series 2010A		5.00%		05/15/27			2,055,000		2,196,158
RB (Sanford Consortium) Series 2010A		5.00%		05/15/28			2,160,000		2,295,691
California State Public Works Board
Lease RB (Various Capital Projects) Series 2009I		6.63%		11/01/34			2,000,000		2,175,720
California Statewide Communities Development Auth
RB (Prop 1A Receivables) Series 2009		5.00%		06/15/13			4,000,000		4,339,120
RB (St. Joseph Health System) Series 2000		4.50%		07/01/18	(f)		2,590,000		2,621,313
Golden State Tobacco Securitization Corp
Enhanced Tobacco Settlement Asset-Backed Bonds Series 2003A1		6.25%		06/01/13	(a)(f)		2,375,000		2,651,308
Irvine Ranch Water District
COP Series 2010		5.00%		03/01/24			2,775,000		3,072,535
COP Series 2010		5.00%		03/01/26			2,250,000		2,462,288
Los Angeles Municipal Improvement Corp
Lease RB Series 2009A		5.00%		04/01/17	(a)		1,950,000		2,214,869
Lease RB Series 2009C		4.00%		09/01/16			1,050,000		1,108,128
Lease RB Series 2009C		4.00%		09/01/17			1,100,000		1,142,020
Lease RB Series 2009C		5.00%		09/01/18			1,000,000		1,106,570
Lease RB Series 2009C		4.50%		09/01/19			1,050,000		1,110,984
Lease RB Series 2009E		5.13%		09/01/27			1,590,000		1,610,320
San Bernardino Cnty Transportation Auth
Sales Tax Revenue Notes (Limited Tax Bonds) Series 2009A		4.00%		05/01/12			2,500,000		2,625,525
San Diego Public Facilities Financing Auth
Lease Refunding RB (Master Refunding) Series 2010A		3.88%		03/01/18			2,765,000		2,742,050
Univ of California
General RB Series 2009Q		5.25%		05/15/26			3,000,000		3,300,060
									50,881,111
COLORADO 0.5%
Colorado Health Facilities Auth
RB (Catholic Health Initiatives) Series 2008C6		3.95%		11/10/10			500,000		507,415
RB (Catholic Health Initiatives) Series 2008D1		5.00%		10/01/14	(f)		1,000,000		1,123,750
RB (Catholic Health Initiatives) Series 2008D1		6.00%		10/01/23			250,000		280,397
									1,911,562

2 

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
DISTRICT OF COLUMBIA 1.9%
District of Columbia
Income Tax Secured RB Series 2009A		5.25%		12/01/27	(f)		2,000,000		2,227,640
Income Tax Secured Refunding RB Series 2010A		5.00%		12/01/30			1,460,000		1,570,580
District of Columbia Water & Sewer Auth
Public Utility Sr Lien RB Series 2009A		4.00%		10/01/17			50,000		54,018
Public Utility Sr Lien RB Series 2009A		6.00%		10/01/35	(f)		2,000,000		2,253,640
Metropolitan Washington Airports Auth
Airport System RB Series 2009B		5.00%		10/01/18	(a)(f)		875,000		998,235
									7,104,113
FLORIDA 8.8%
Alachua Cnty Health Facilities Auth
Health Facilities RB (Shands Healthcare) Series 2008D1		6.25%		12/01/18			500,000		557,095
Coral Gables Health Facilities Auth
Hospital RB (Baptist Health) Series 2004		5.00%		08/15/14	(a)(f)		1,300,000		1,492,517
Escambia Cnty
Solid Waste RB (Gulf Power Company) First Series 2009		2.00%		04/03/12			500,000		502,240
Florida State Board of Education
Lottery Refunding RB Series 2010C		2.00%		07/01/11			2,000,000		2,030,900
Highlands Cnty Health Facilities Auth
Hospital RB (Adventist Health System/Sunbelt) Series 2008A		6.10%		11/15/13	(f)		1,000,000		1,134,470
Hillsborough Cnty School Board
Refunding COP (Master Lease Program) Series 2010A		3.00%		07/01/12			735,000		763,297
Refunding COP (Master Lease Program) Series 2010A		5.00%		07/01/24			4,000,000		4,274,160
JEA Electric System
Electric System RB Series Three 2010A		3.00%		10/01/13			895,000		948,593
Kissimmee Utility Auth
Electric System Sub Refunding RB Series 2003		5.25%		10/01/18			250,000		284,647
Miami-Dade Cnty
Aviation RB (Miami International Airport) Series 2010A		5.00%		10/01/20			500,000		528,485
Aviation RB (Miami International Airport) Series 2010A		5.50%		10/01/26			5,000,000		5,307,150
Aviation RB (Miami International Airport) Series 2010A		5.25%		10/01/30			475,000		486,766
Miami-Dade Cnty Educational Facilities Auth
RB (Univ of Miami) Series 2008A		5.25%		04/01/16	(f)		1,100,000		1,213,443
Orange Cnty Health Facilities Auth
RB (Nemours Foundation) Series 2009A		4.00%		01/01/13			800,000		836,088
RB (Nemours Foundation) Series 2009A		4.00%		01/01/14			350,000		367,489
RB (Nemours Foundation) Series 2009A		4.00%		01/01/15			440,000		462,722
RB (Nemours Foundation) Series 2009A		4.00%		01/01/16			825,000		865,334
RB (Nemours Foundation) Series 2009A		4.00%		01/01/17			560,000		582,658
RB (Nemours Foundation) Series 2009A		5.00%		01/01/18			250,000		275,115
RB (Nemours Foundation) Series 2009A		5.00%		01/01/19			545,000		600,018
Orange Cnty School Board
COP Series 1997A		6.00%		08/01/10	(a)		500,000		504,045
Orlando Utilities Commission
Utility System Refunding RB Series 2009C		5.00%		10/01/17			1,000,000		1,154,830
Water & Electric RB Series 1996A		3.75%		10/01/13			1,900,000		2,007,122
Palm Beach Cnty
Water & Sewer RB (Florida Power & Light) Series 2009		5.00%		10/01/39			965,000		1,006,601

3

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Palm Beach Cnty Solid Waste Auth
Improvement RB Series 2009		5.25%		10/01/18	(a)		2,250,000		2,653,200
Pasco Cnty
Water & Sewer RB Series 2009A		5.00%		10/01/16			400,000		448,472
Water & Sewer RB Series 2009A		5.00%		10/01/18			250,000		279,750
Water & Sewer RB Series 2009A		4.00%		10/01/19			200,000		208,540
Port St. Lucie
Refunding COP Series 2008		5.00%		09/01/13			1,845,000		2,008,264
									33,784,011
GEORGIA 1.7%
Dawson Cnty SD
GO Bonds Series 2010		2.00%		02/01/12			650,000		664,690
GO Bonds Series 2010		3.00%		02/01/13			650,000		684,047
DeKalb Private Hospital Auth
Hospital RB (Children’s Healthcare of Atlanta) Series 2009		5.00%		11/15/16			420,000		466,582
Hospital RB (Children’s Healthcare of Atlanta) Series 2009		5.00%		11/15/17			350,000		394,177
Hospital RB (Children’s Healthcare of Atlanta) Series 2009		5.25%		11/15/39			300,000		310,152
Fulton Cnty Development Auth
RB (Tuff Morehouse) Series 2002A		5.50%		02/01/22	(f)		2,180,000		2,262,186
Macon-Bibb Cnty Hospital Auth
Revenue Anticipation Certificates (Medical Center of Central Georgia) Series 2009		4.00%		08/01/19			400,000		405,196
Revenue Anticipation Certificates (Medical Center of Central Georgia) Series 2009		5.00%		08/01/21			545,000		582,120
Revenue Anticipation Certificates (Medical Center of Central Georgia) Series 2009		5.00%		08/01/22			800,000		848,832
									6,617,982
IDAHO 0.1%
Univ of Idaho
General RB Series 2010B		5.00%		04/01/26			400,000		431,544
General RB Series 2010B		5.00%		04/01/32			110,000		114,767
									546,311
ILLINOIS 3.6%
Chicago
Passenger Facility Charge RB Series 2010B		5.00%		01/01/27			2,385,000		2,419,368
Passenger Facility Charge RB Series 2010B		5.00%		01/01/30			2,770,000		2,778,254
Passenger Facility Charge Refunding RB Series 2010D		5.00%		01/01/17			1,000,000		1,086,810
Passenger Facility Charge Refunding RB Series 2010D		5.00%		01/01/18			1,200,000		1,299,756
Passenger Facility Charge Refunding RB Series 2010D		5.00%		01/01/19			750,000		809,070
Illinois Finance Auth
Refunding RB (Alexian Brothers Health System) Series 2010		4.00%		02/15/12			1,100,000		1,131,174
Refunding RB (Alexian Brothers Health System) Series 2010		4.00%		02/15/13			1,500,000		1,550,790
Refunding RB (Univ of Chicago Medical Center) Series 2009B		5.00%		08/15/26			2,500,000		2,588,750
									13,663,972

4 

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
INDIANA 1.2%
Indiana Finance Auth
Hospital RB (Parkview Health System) Series 2009A		5.00%		05/01/11			300,000		310,434
Refunding Bonds (State Revolving Fund) Series 2010A		5.00%		02/01/19			1,000,000		1,172,320
Purdue Univ
Student Fee Bonds Series Y		5.00%		07/01/18			800,000		936,520
St. Joseph Cnty
Educational Facilities RB (Univ of Notre Dame Du Lac) Series 2008		3.88%		03/01/12			2,000,000		2,078,980
									4,498,254
IOWA 1.8%
Iowa Finance Auth
Health Facilities RB (Iowa Health System) Series 2005A		5.00%		02/15/12			975,000		1,031,882
Iowa Higher Education Loan Auth
Private College Facility RB (Grinnell College) Series 2001		2.10%		12/01/11	(a)		2,185,000		2,235,342
Private College Facility RB (Grinnell College) Series 2010		4.00%		12/01/11			750,000		788,805
Private College Facility RB (Grinnell College) Series 2010		4.00%		12/01/12			1,000,000		1,079,130
Private College Facility RB (Grinnell College) Series 2010		4.00%		12/01/13			1,500,000		1,647,645
									6,782,804
KANSAS 1.0%
Kansas Development Finance Auth
Hospital RB (Adventist Health System/Sunbelt) Series 2009D		3.00%		11/15/11			875,000		900,252
Hospital RB (Adventist Health System/Sunbelt) Series 2009D		3.50%		11/15/12			180,000		188,316
Hospital RB (Adventist Health System/Sunbelt) Series 2009D		5.00%		11/15/13			210,000		231,859
Hospital RB (Adventist Health System/Sunbelt) Series 2009D		5.00%		11/15/14			450,000		504,752
Hospital RB (Adventist Health System/Sunbelt) Series 2009D		5.00%		11/15/15			485,000		550,911
Wichita
Hospital Facilities Refunding RB (Via Christi Health System) Series 2009-IIIA		2.00%		11/15/10			90,000		90,350
Hospital Facilities Refunding RB (Via Christi Health System) Series 2009-IIIA		4.50%		11/15/12			400,000		424,184
Hospital Facilities Refunding RB (Via Christi Health System) Series 2009X		5.25%		11/15/24			1,000,000		1,046,220
									3,936,844
KENTUCKY 2.0%
Kentucky Economic Development Finance Auth
Hospital RB (Baptist Healthcare System) Series 2009A		5.00%		08/15/18			1,000,000		1,106,070
RB (King’s Daughters Medical Center) Series 2008C		4.50%		02/01/13			1,005,000		1,070,848
Kentucky Infrastructure Auth
Wastewater & Drinking Water Revolving Fund RB Series 2010A		4.00%		02/01/17			1,000,000		1,102,460
Wastewater & Drinking Water Revolving Fund RB Series 2010A		4.00%		02/01/18			1,000,000		1,100,300
Wastewater & Drinking Water Revolving Fund RB Series 2010A		5.00%		02/01/25			2,925,000		3,286,998
									7,666,676
LOUISIANA 2.7%
Louisiana Public Facilities Auth
Refunding RB (Christus Health) Series 2009A		5.00%		07/01/11			2,300,000		2,374,911

5

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Refunding RB (Christus Health) Series 2009A		5.00%		07/01/12			3,775,000		3,983,720
New Orleans Aviation Board
Gulf Opportunity Zone RB Series 2010A		5.13%		01/01/31			4,000,000		3,987,240
									10,345,871
MARYLAND 0.0%
Maryland Community Development Administration
RB Series 1996A		5.88%		07/01/16			130,000		130,055
MASSACHUSETTS 5.6%
Chatham
GO Refunding Bonds		4.00%		07/01/13			285,000		309,943
GO Refunding Bonds		4.00%		07/01/14			110,000		121,158
GO Refunding Bonds		5.00%		07/01/16			250,000		291,005
GO Refunding Bonds		5.00%		07/01/17			295,000		344,858
Massachusetts Bay Transportation Auth
Assessment Bonds Series 2004A		5.25%		07/01/14	(a)(f)		7,000,000		8,106,700
Assessment Bonds Series 2005A		5.00%		07/01/14			850,000		960,041
Massachusetts Development Finance Agency
RB (Boston College) Series Q1		4.00%		07/01/16			950,000		1,037,153
RB (New England Conservatory of Music) Series 2008		4.00%		07/01/12			120,000		124,362
RB (New England Conservatory of Music) Series 2008		4.00%		07/01/13			290,000		302,717
RB (New England Conservatory of Music) Series 2008		4.00%		07/01/15			375,000		388,950
Massachusetts Health & Educational Facilities Auth
RB (Harvard Univ) Series 2010A		4.00%		12/15/21			100,000		110,098
RB (Harvard Univ) Series 2010A		5.00%		12/15/26			5,000,000		5,651,050
Massachusetts State College Building Auth
RB Series 2009B		5.00%		05/01/25			1,650,000		1,823,679
RB Series 2009B		5.00%		05/01/26			1,030,000		1,129,467
Massachusetts State Turnpike
Turnpike RB Series 1993A		5.00%		01/01/20	(a)		725,000		831,894
									21,533,075
MICHIGAN 4.3%
Delta Cnty Economic Development Corp
Refunding RB (MeadWestvaco-Escanaba Paper) Series 2002		6.25%		04/15/12	(a)		1,000,000		1,103,330
Grand Rapids
Refunding RB Series 2010		5.00%		01/01/25			1,000,000		1,110,790
Refunding RB Series 2010		5.00%		01/01/26			1,345,000		1,489,870
Refunding RB Series 2010		5.00%		01/01/27			2,000,000		2,209,840
Michigan
Refunding Bonds (State Trunk Line Fund) Series 2009		5.00%		11/01/22			2,950,000		3,237,595
Michigan Building Auth
Facilities Revenue & Refunding RB Series III		5.00%		10/15/12	(a)		4,370,000		4,812,419
Michigan State Hospital Finance Auth
Refunding RB (Trinity Health) Series 2008A1		5.25%		12/01/15			1,500,000		1,645,095
Wayne Cnty Community College
Bonds Series 1999		5.50%		07/01/19			1,000,000		1,007,060
									16,615,999

6 

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
MINNESOTA 1.2%
Minneapolis/St. Paul Housing & Redevelopment Auth
Health Care Facilities RB (Children’s Health Care) Series 1995B		3.00%		08/15/11			250,000		255,857
Health Care Facilities RB (Children’s Health Care) Series 2010A		2.00%		08/15/11			330,000		333,924
Health Care Facilities RB (Children’s Health Care) Series 2010A		3.00%		08/15/12			275,000		283,891
Health Care Facilities RB (Children’s Hospitals & Clinics) Series 2004A1		3.00%		08/15/12			500,000		515,285
Nobles Cnty
Temporary Water System GO Bonds Series 2009C		3.00%		08/01/12			2,950,000		3,090,066
Stewartville ISD No. 534
GO Refunding Bonds Series A		4.00%		02/01/15			260,000		286,684
									4,765,707
MISSOURI 3.2%
Boone Cnty
Hospital RB (Boone Hospital Center) Series 2008		5.00%		08/01/13	(f)		1,600,000		1,712,736
Hanley Rd & North of Folk Ave Transportation Development District
Transportation Sales Tax RB Series 2005		5.00%		10/01/12	(a)		1,260,000		1,388,570
Transportation Sales Tax RB Series 2005		5.40%		10/01/12	(a)(f)		5,245,000		5,828,664
Missouri Environmental Improvement & Energy Resources Auth
Water Pollution Control & Drinking Water Refunding RB Series 2010A		5.00%		01/01/21			2,000,000		2,341,700
Missouri Health & Educational Facilities Auth
RB (SSM Health Care) Series 2002A		5.25%		06/01/12			800,000		852,856
									12,124,526
NEVADA 2.3%
Clark Cnty
Airport System Jr Sub Lien Revenue Notes Series 2010E2		5.00%		07/01/12			2,000,000		2,136,280
Airport System RB Sr Series 2010D		5.00%		07/01/17			1,000,000		1,111,160
Airport System RB Sr Series 2010D		5.00%		07/01/18			1,750,000		1,941,065
Passenger Facility Charge Sub Lien RB (Las Vegas-McCarran International Airport) Series 2008A		5.00%		07/01/15			1,115,000		1,224,237
Nevada
Highway Improvement RB (Motor Vehicle Fuel Tax) Series 2004		5.50%		12/01/18			1,890,000		2,096,520
Overton Power District No. 5
Special Obligation RB Series 2008		5.00%		12/01/12			30,000		31,602
Sparks Redevelopment Agency
Tax Increment Refunding RB (Redevelopment Area No. 1) Series 2010		4.00%		01/15/11			425,000		429,624
									8,970,488
NEW HAMPSHIRE 0.8%
New Hampshire Health & Education Facilities Auth
RB (Dartmouth College) Series 2009		5.00%		06/01/19			400,000		466,772
RB (Dartmouth College) Series 2009		5.25%		06/01/39			130,000		141,457

7

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
RB (Dartmouth-Hitchcock) Series 2009		6.00%		08/01/38			600,000		639,084
New Hampshire HFA
S/F Mortgage Acquisition RB Series 2008E		6.63%		07/01/38			1,770,000		1,910,255
									3,157,568
NEW JERSEY 3.2%
Cranbury Township
General Improvement Refunding Bonds		2.75%		12/01/15	(f)		430,000		451,049
General Improvement Refunding Bonds		3.00%		12/01/16			320,000		336,205
General Improvement Refunding Bonds		3.00%		12/01/17			285,000		296,665
General Improvement Refunding Bonds		4.00%		12/01/18			400,000		442,436
General Improvement Refunding Bonds		3.50%		12/01/19			410,000		434,838
General Improvement Refunding Bonds		4.00%		12/01/22			565,000		616,748
Middlesex Cnty Improvement Auth
Lease RB Series 2008		4.00%		12/15/15			415,000		460,339
Monmouth Cnty Improvement Auth
Governmental Loan RB Series 2008		5.25%		12/01/18			85,000		101,568
Governmental Loan RB (Atlantic Highlands) Series 2010		3.00%		02/01/13			245,000		258,232
New Jersey
COP (Equipment Lease Purchase) Series 2009A		5.25%		06/15/28			500,000		535,240
COP (Equipment Lease Purchase) Series 2009A		5.25%		06/15/29			200,000		213,478
New Jersey Economic Development Auth
School Facilities Construction Bonds Series 2003F		5.25%		06/15/13	(a)		2,140,000		2,412,443
New Jersey Educational Facilities Auth
Refunding RB (Princeton Theological Seminary) Series 2009B		5.00%		07/01/19			140,000		164,168
Refunding RB (Princeton Theological Seminary) Series 2009B		4.00%		07/01/20			300,000		325,419
New Jersey Health Care Facilities Financing Auth
Refunding RB (AHS Hospital) Series 1997A		6.00%		07/01/12	(a)(f)		2,000,000		2,208,160
New Jersey State Building Auth
Refunding RB Series 2009B		4.00%		12/15/19			525,000		540,530
New Jersey Transportation Trust Fund Auth
Transportation System Bonds Series 2001C		5.50%		12/15/15	(a)		110,000		126,646
Transportation System Bonds Series 2005D		5.00%		06/15/15	(a)		2,000,000		2,317,080
Princeton Township
General Improvement Refunding Bonds		4.00%		09/01/12			75,000		80,432
General Improvement Refunding Bonds		4.00%		09/01/13			125,000		136,730
									12,458,406
NEW MEXICO 1.5%
Albuquerque
Sub Lien Airport Refunding RB Series 2008E		5.00%		07/01/12	(f)		1,250,000		1,335,962
Bernalillo Cnty
GO Refunding Bonds Series 2010		3.50%		02/01/17	(e)		575,000		608,620
GO Refunding Bonds Series 2010		4.00%		02/01/19	(e)		500,000		540,650
GO Refunding Bonds Series 2010		4.00%		02/01/20	(e)		255,000		273,365
GO Refunding Bonds Series 2010		4.00%		02/01/21	(e)		1,065,000		1,127,111
GO Refunding Bonds Series 2010		4.00%		02/01/22	(e)		1,125,000		1,181,093
New Mexico Hospital Equipment Loan Council
Hospital System RB (Presbyterian Healthcare) Series 2008A		5.25%		08/01/15			500,000		547,640
Hospital System RB (Presbyterian Healthcare) Series 2008A		5.50%		08/01/16			10,000		11,082
									5,625,523

8 

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
NEW YORK 7.8%
Long Island Power Auth
Electric System General RB Series 2009A		5.00%		04/01/15			870,000		977,149
Nassau Cnty Interim Finance Auth
Sales Tax Secured Bonds Series 2009A		5.00%		11/15/18			145,000		170,643
New York City
GO Bonds Fiscal 2002 Series G		5.75%		08/01/12	(a)		60,000		66,652
New York City Transitional Finance Auth
Future Tax Secured Refunding Bonds Fiscal 2003 Series B		5.25%		02/01/29			1,000,000		1,027,580
Future Tax Secured Sub RB Fiscal 2010 Series C1		4.00%		08/01/16			3,000,000		3,314,940
Future Tax Secured Sub RB Fiscal 2010 Series I2		5.00%		11/01/17	(e)		1,000,000		1,164,470
Future Tax Secured Sub RB Fiscal 2010 Series I2		5.00%		11/01/18	(e)		1,000,000		1,159,770
Future Tax Secured Sub RB Fiscal 2010 Series I2		5.00%		11/01/19	(e)		1,000,000		1,158,460
Future Tax Secured Sub RB Fiscal 2010 Series I2		5.00%		11/01/20	(e)		1,000,000		1,151,820
New York State Dormitory Auth
Master BOCES Program Lease RB (Oneida Herkimer Madison) Series 2008		5.25%		08/15/16			1,000,000		1,140,350
Mental Health Services Facilities RB Series 2010		4.00%		02/15/12			200,000		209,636
Mental Health Services Facilities RB Series 2010		4.00%		02/15/13			1,000,000		1,066,990
RB (Cornell Univ) Series 2010B		5.00%		07/01/18			380,000		444,547
RB (Orange Regional Medical Center) Series 2008		5.50%		12/01/11			420,000		429,542
State Personal Income Tax RB Series 2009A		5.00%		02/15/18			3,000,000		3,476,700
New York State Environmental Facilities Corp
State Clean Water & Drinking Water Revolving Funds RB Series 2010A		5.00%		06/15/26			4,000,000		4,493,120
New York State Thruway Auth
Second General Highway & Bridge Trust Fund Bonds Series 2010A		4.00%		04/01/12			1,000,000		1,057,380
Second General Highway & Bridge Trust Fund Bonds Series 2010A		5.00%		04/01/13			3,000,000		3,319,530
Service Contract Bonds Series 2009		4.00%		04/01/16			750,000		810,218
Service Contract Bonds Series 2009		5.00%		04/01/16			1,775,000		2,013,169
Service Contract Bonds Series 2009		4.00%		04/01/17			800,000		862,360
New York State Urban Development Corp
State Personal Income Tax RB Series 2009A1		5.00%		12/15/17			570,000		667,288
									30,182,314
NORTH CAROLINA 1.7%
Durham Cnty
COP Series 2009A		4.00%		06/01/18			2,000,000		2,151,540
Guilford Cnty
GO Refunding Bonds Series 2010C		4.00%		02/01/12			1,000,000		1,057,480
Mecklenburg Cnty
Limited Obligation Refunding Bonds Series 2009		5.00%		03/01/11	(f)		2,000,000		2,067,540
Winston-Salem
GO Refunding Bonds Series 2010B		5.00%		06/01/22			1,085,000		1,267,106
									6,543,666
OHIO 2.0%
Bowling Green State Univ
General Receipts Bonds Series 2010A		2.00%		06/01/12			675,000		682,540

9

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
General Receipts Bonds Series 2010A		3.00%		06/01/13			1,495,000		1,547,071
Cleveland
Airport System RB Series 2009C		3.00%		01/01/11			3,300,000		3,336,762
Kent State Univ
General Receipts Bonds Series 2009B		5.00%		05/01/19	(a)		125,000		140,056
Mahoning Cnty Career & Technical Center
COP Series 2008		6.25%		12/01/11	(a)		190,000		206,245
Ohio Water Development Auth
RB (Pollution Control Loan Fund) Series 2010A		5.00%		12/01/24			1,500,000		1,685,580
									7,598,254
OKLAHOMA 1.1%
Grady Cnty School Finance Auth
Educational Facilities Lease RB (Bridge Creek Public Schools) Series 2008		5.00%		09/01/16	(f)		1,130,000		1,234,875
Oklahoma Cnty Finance Auth
Educational Facilities Lease RB (Putnam Public Schools) Series 2010		3.00%		03/01/11			1,000,000		1,013,140
Oklahoma Water Resources Board
RB Series 2010		5.00%		04/01/26			1,390,000		1,550,462
RB Series 2010		5.00%		04/01/28			460,000		507,578
									4,306,055
OREGON 0.4%
Chemeketa Community College District
GO Bonds Series 2008		5.50%		06/15/24			500,000		573,645
Columbia River Peoples’ Utility District
Electric System Revenue Obligations Series 2000B		5.50%		12/01/10	(a)		125,000		128,190
Forest Grove
Student Housing RB (Oak Tree Foundation) Series 2007		5.00%		03/01/14	(c)(d)		910,000		921,075
									1,622,910
PENNSYLVANIA 2.6%
Lehigh Cnty General Purpose Auth
RB (St. Luke’s Hospital of Bethlehem) Series 2003		5.38%		08/15/13	(a)		1,650,000		1,869,500
Montgomery Cnty Higher Education & Health Auth
RB (Arcadia Univ) Series 2010		5.25%		04/01/30			1,060,000		1,067,197
Pennsylvania Economic Development Financing Auth
Solid Waste Disposal RB (Waste Management) Series 2006		2.75%		09/01/13			2,000,000		1,989,500
Pennsylvania Higher Educational Facilities Auth
RB (Univ of Pennsylvania) Series 2009A		5.00%		09/01/19			1,200,000		1,400,892
Pennsylvania Intergovernmental Cooperation Auth
Special Tax Refunding RB (Philadelphia Funding Program) Series 2010		5.00%		06/15/18			2,000,000		2,294,400
Special Tax Refunding RB (Philadelphia Funding Program) Series 2010		5.00%		06/15/20			1,070,000		1,229,216
									9,850,705
PUERTO RICO 1.4%
Puerto Rico Electric Power Auth
Power RB Series CCC		5.25%		07/01/27			4,000,000		4,155,280

10 

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Puerto Rico Sales Tax Financing Corp
Sales Tax RB First Sub Series 2009A		5.00%		08/01/11			1,150,000		1,199,404
									5,354,684
RHODE ISLAND 0.0%
Rhode Island Housing & Mortgage Finance Corp
Homeownership Opportunity Bonds Series 10A		6.50%		10/01/22	(f)		20,000		20,014
SOUTH CAROLINA 1.2%
Beaufort-Jasper Water & Sewer Auth
Waterworks & Sewer System Refunding RB Series 2010B		5.00%		03/01/21			500,000		582,250
Waterworks & Sewer System Refunding RB Series 2010B		5.00%		03/01/22			570,000		664,289
Waterworks & Sewer System Refunding RB Series 2010B		5.00%		03/01/23			495,000		576,334
Medical Univ Hospital Auth
Hospital Facilities Refunding RB Series 2002A		6.50%		08/15/12	(a)(f)		2,000,000		2,253,720
South Carolina Jobs Economic Development Auth
Hospital Refunding & Improvement RB (Palmetto Health) Series 2009		3.00%		08/01/12			345,000		348,453
									4,425,046
SOUTH DAKOTA 0.4%
South Dakota Health & Educational Facilities Auth
RB (Sanford Health) Series 2009		5.00%		11/01/16			385,000		423,931
RB (Sanford Health) Series 2009		5.00%		11/01/17			1,000,000		1,094,410
									1,518,341
TENNESSEE 0.7%
Memphis
Electric System Sub Refunding RB Series 2010		2.50%		12/01/14			370,000		382,917
Electric System Sub Refunding RB Series 2010		5.00%		12/01/14			1,000,000		1,142,680
Electric System Sub Refunding RB Series 2010		4.00%		12/01/16			1,000,000		1,098,210
									2,623,807
TEXAS 8.8%
Collin Cnty
Limited Tax Refunding & Permanent Improvement Bonds Series 2009A		4.00%		02/15/19			745,000		812,378
Conroe ISD
Unlimited Tax Refunding Bonds Series 2004B		1.50%		02/15/12	(a)		10,000		10,162
Unlimited Tax Refunding Bonds Series 2004B		2.00%		02/15/13	(a)(f)		200,000		204,828
Unlimited Tax Refunding Bonds Series 2004B		3.50%		02/15/19	(a)		500,000		524,085
Del Valle ISD
Unlimited Tax Refunding Bonds Series 2010		4.00%		02/01/12	(a)		250,000		263,813
Unlimited Tax Refunding Bonds Series 2010		4.00%		02/01/13	(a)		250,000		269,713
El Paso
Water & Sewer Refunding RB Series 2008C		5.00%		03/01/19			500,000		562,740
El Paso Cnty Hospital District
Refunding Bonds Series 2009		2.00%		08/15/11			1,370,000		1,387,604

11

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Refunding Bonds Series 2009		3.00%		08/15/12			1,400,000		1,451,436
Fort Bend Cnty
Limited Tax & Refunding Bonds Series 2009		5.00%		03/01/17			250,000		286,722
Fort Bend ISD
Unlimited Tax Refunding Bonds Series 2005		2.00%		02/15/11	(a)		750,000		757,477
Fort Worth
GO Bonds Series 2009		4.45%		03/01/18	(c)		2,000,000		2,149,620
Galveston Cnty
Limited Tax Flood Control Bonds Series 2009C1		3.00%		02/01/15			110,000		114,572
Limited Tax Flood Control Bonds Series 2009C1		3.00%		02/01/16			205,000		211,142
Limited Tax Flood Control Bonds Series 2009C1		3.50%		02/01/18			550,000		570,207
Garland
Certificates of Obligation Series 2009		5.00%		02/15/26			1,455,000		1,599,074
Certificates of Obligation Series 2009		5.00%		02/15/27	(f)		1,530,000		1,673,147
Certificates of Obligation Series 2009		5.00%		02/15/28			1,610,000		1,751,905
Harris Cnty Cultural Education Facilities Finance Corp
Refunding RB (Methodist Hospital System) Series 2009B2		5.00%		06/01/13			1,000,000		1,094,410
Harris Cnty Hospital District
Refunding RB Series 2000		6.00%		08/15/10	(a)(f)		1,000,000		1,010,970
Houston
Combined Utility System First Lien Refunding RB Series 2004C1		5.00%		05/15/11	(f)		1,000,000		1,037,910
Houston Higher Education Finance Corp
RB (Rice Univ) Series 2010A		5.00%		05/15/35	(e)		1,000,000		1,062,820
Katy ISD
GO Refunding Bonds Series 2010A		4.00%		02/15/13	(a)		1,200,000		1,295,988
Klein ISD
Unlimited Tax Refunding Bonds Series 2009A		4.00%		08/01/17			810,000		891,421
Lone Star College System
Maintenance Tax Notes Series 2009		3.25%		09/15/18			150,000		154,844
Maintenance Tax Notes Series 2009		4.50%		09/15/23			1,200,000		1,283,556
Maintenance Tax Notes Series 2009		5.00%		09/15/24			1,000,000		1,114,610
Maintenance Tax Notes Series 2009		5.00%		09/15/25			775,000		857,359
Northside ISD
Unlimited Tax GO Bonds Series 2010		1.50%		08/01/12	(a)		2,000,000		2,012,320
San Antonio
Electric & Gas Systems Refunding RB Series 2002		5.38%		02/01/14			1,000,000		1,142,900
Electric & Gas Systems Refunding RB Series 2009D		5.00%		02/01/17			1,130,000		1,306,822
South San Antonio ISD
Unlimited Tax Refunding Bonds Series 2010		5.00%		08/15/21	(a)		2,450,000		2,819,558
Travis Cnty
Limited Tax Refunding Bonds Series 2009		5.00%		03/01/18			1,925,000		2,242,702
									33,928,815
UTAH 0.6%
Riverton
RB (IHC Health Services) Series 2009		5.00%		08/15/15			950,000		1,071,030
Salt Lake Cnty Municipal Building Auth
Lease RB Series 2009A		3.00%		12/01/12			1,200,000		1,257,768
									2,328,798

12 

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
VIRGINIA 2.6%
Arlington Cnty IDA
Hospital Refunding RB (Virginia Hospital Center) Series 2010		5.00%		07/01/18			4,700,000		5,160,976
Fairfax Cnty IDA
Health Care RB (Inova Health System) Series 2009A		5.00%		05/15/17			90,000		99,844
Health Care RB (Inova Health System) Series 2009C		5.00%		05/15/25			500,000		527,285
Henrico Cnty
GO Public Improvement Refunding Bonds Series 2009		4.00%		03/01/18			215,000		239,013
Leesburg
GO Refunding Bonds Series 2009B		4.00%		02/01/12			200,000		210,402
GO Refunding Bonds Series 2009B		3.00%		02/01/13			160,000		167,735
Richmond
GO Bonds Series 2009A		4.00%		07/15/16			225,000		247,244
GO Bonds Series 2009A		5.00%		07/15/28			160,000		180,051
GO Bonds Series 2009B		4.00%		07/15/14			2,780,000		3,068,119
Virginia Housing Development Auth
Homeownership Mortgage Bonds Series 2010A		4.00%		03/01/20			225,000		228,645
									10,129,314
WASHINGTON 1.9%
Energy Northwest
Electric Refunding RB (Project No. 3) Series 2009A		5.25%		07/01/18			1,000,000		1,183,940
Kent SD No. 415
Unlimited Tax GO Refunding Bonds Series 1993A		5.55%		12/01/11			320,000		331,930
Washington
GO Bonds Series 1990A		6.75%		02/01/15			1,000,000		1,122,620
Washington Health Care Facilities Auth
RB (Catholic Health Initiatives) Series 2000A		6.00%		06/01/10	(a)(f)		3,000,000		3,030,000
RB (Overlake Hospital Medical Center) Series 2010		5.00%		07/01/17			1,515,000		1,613,308
									7,281,798
WISCONSIN 1.5%
Wisconsin
General Fund Annual Appropriation Bonds Series 2009A		6.00%		05/01/26			1,000,000		1,151,070
Wisconsin Health & Educational Facilities Auth
RB (Aurora Health Care) Series 2009B1		4.75%		08/15/14			1,475,000		1,512,140
RB (Aurora Health Care) Series 2009B2		5.13%		08/15/16			1,250,000		1,318,038
RB (Children’s Hospital of Wisconsin) Series 2008B		4.20%		08/15/18			450,000		466,092
RB (Children’s Hospital of Wisconsin) Series 2008B		5.38%		08/15/24			1,000,000		1,083,640
RB (Thedacare) Series 2010		2.50%		12/15/10			300,000		301,395
									5,832,375
Total Fixed-Rate Obligations (Cost $370,939,267)									381,354,218
Variable-Rate Obligations 2.0% of net assets
CALIFORNIA 0.4%
California Educational Facilities Auth
RB (Univ of San Francisco) Series 2003		2.00%		06/02/10	(a)		1,600,000		1,600,000

13

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Univ of California
Medical Center Pooled RB Series 2007B1		0.24%		06/01/10	(b)		100,000		100,000
									1,700,000
MASSACHUSETTS 0.4%
Massachusetts
GO Refunding Bonds Series 2010A		0.53%		06/03/10			1,500,000		1,500,570
NEW YORK 0.8%
Long Island Power Auth
Electric System General RB Series 2003F		0.36%		06/02/10	(a)(b)		700,000		700,000
New York City
GO Bonds Fiscal 2008 Series J3		1.15%		06/01/10	(a)		2,550,000		2,550,000
									3,250,000
PENNSYLVANIA 0.4%
Allegheny Cnty Hospital Development Auth
RB (Univ of Pittsburgh Medical Center) Series 2010F		1.34%		06/03/10			1,500,000		1,501,440
Total Variable-Rate Obligations (Cost $7,950,000)									7,952,010
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $378,885,930 and the unrealized appreciation and depreciation were $10,495,430 and ($75,132), respectively, with a net unrealized appreciation of $10,420,298.

(a)	Credit-enhanced security.
(b)	Liquidity-enhanced security.
(c)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $3,070,695 or 0.8% of net assets.
(d)	Illiquid security. At the period end, the value of these amounted to $921,075 or 0.2% of net assets.
(e)	Delayed-delivery security.
(f)	All or a portion of this security is held as collateral for delayed-delivery securities.

COP —	Certificate of participation
GO —	General obligation
HFA —	Housing finance agency/authority
IDA —	Industrial development agency/authority
IDB —	Industrial development board
ISD —	Independent school district
RB —	Revenue bond
SD —	School district
S/F —	Single-family
USD —	Unified school district

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

14 

 Schwab Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of May 31, 2010:

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total*
Fixed-Rate Obligations(a)		$—		$381,354,218		$—		$381,354,218
Variable-Rate Obligations(a)		—		4,751,440		—		4,751,440
California		—		1,700,000		—		1,700,000
Massachusetts		—		1,500,570		—		1,500,570
Total		$—		$389,306,228		$—		$389,306,228

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

REG46022MAY10 - 00

15

Schwab Investments
Schwab California Tax-Free YieldPlus Fund™

Portfolio Holdings of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost		Value
Holdings by Category				($)		($)
	43	.3%	Fixed-Rate Obligations		32,380,543		32,585,454
	58	.1%	Variable-Rate Obligations		43,675,000		43,675,000
	101	.4%	Total Investments		76,055,543		76,260,454
	(1	.4)%	Other Assets and Liabilities, Net				(1,074,838	)
	100	.0%	Net Assets				75,185,616

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Fixed-Rate Obligations 43.3% of net assets
CALIFORNIA 43.3%
California
Economic Recovery Bonds Series 2008A		5.00%		01/01/11			1,500,000		1,539,960
GO Bonds		5.38%		10/01/10	(a)		165,000		167,762
California Dept of Water Resources
Power Supply RB Series 2002A		5.25%		05/01/12	(a)		500,000		549,865
Power Supply RB Series 2002A		5.38%		05/01/12	(a)		250,000		275,525
Power Supply RB Series 2010L		2.00%		05/01/12			500,000		511,070
California Health Facilities Financing Auth
RB (NCROC Paradise Valley Estates) Series 2005		3.75%		12/01/10	(a)(e)		90,000		90,779
RB (NCROC Paradise Valley Estates) Series 2005		4.05%		12/01/11	(a)(e)		100,000		102,393
RB (Sutter Health) Series 2008A		5.00%		08/15/12	(e)		1,325,000		1,425,263
California Infrastructure & Economic Development Bank
Refunding RB (J. Paul Getty Trust) Series 2007A4		1.65%		04/01/11	(e)		1,500,000		1,511,985
California Municipal Finance Auth
Solid Waste Disposal RB (Waste Management) Series 2008A		1.00%		09/01/10			750,000		749,812
California Statewide Communities Development Auth
RB (Daughters of Charity Health System) Series 2005F		5.00%		07/01/10	(e)		2,105,000		2,109,968
RB (Daughters of Charity Health System) Series 2005G		5.25%		07/01/11	(e)		785,000		807,121
RB (Enloe Medical Center) Series 2008A		5.00%		08/15/11	(a)		550,000		567,991
Carmichael
Water District COP Refunding RB		3.00%		11/01/10			300,000		303,063
Contra Costa Transportation Auth
Limited Tax Sales Tax Revenue Notes Series 2009		2.50%		10/01/10	(e)		2,000,000		2,014,140
East Bay Municipal Utility District
Water System Sub Refunding RB Series 2007B		3.75%		06/01/10			150,000		150,000
East Bay Regional Park District
GO Bonds Series 2006E		4.25%		09/01/10			260,000		262,519
GO Refunding Bonds Series 2008		4.50%		09/01/10			115,000		116,185
Glendale Community College District
GO Refunding Bonds Series 2005A		3.50%		10/01/10	(a)		500,000		504,985

1

 Schwab California Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Golden State Tobacco Securitization Corp
Enhanced Tobacco Settlement Asset-Backed Bonds Series 2003B		5.63%		06/01/13	(a)		75,000		84,780
Huntington Beach Public Financing Auth
Lease Refunding RB Series 2010A		2.00%		09/01/10	(d)		300,000		301,059
Long Beach
TRAN 2009-2010		2.50%		09/30/10	(e)		2,000,000		2,013,300
Los Angeles
GO Bonds Series 2001A		4.00%		09/01/10			300,000		302,709
GO Bonds Series 2003A		4.00%		09/01/10			300,000		302,709
Los Angeles Dept of Airports
Sr RB Series 2009A		3.00%		05/15/11			100,000		102,001
Los Angeles USD
GO Bonds Series 2003A		3.30%		07/01/10			50,000		50,117
Marin Community College District
GO Bonds Series B		3.00%		08/01/10	(e)		2,000,000		2,008,580
Mt. San Antonio Community College District
Refunding GO Bonds Series 2005A		3.38%		08/01/10	(a)		500,000		502,430
Newport Beach
RB (Hoag Memorial Hospital Presbyterian) Series 2009C		4.00%		02/08/11	(e)		1,000,000		1,016,710
Orange Cnty
Refunding Recovery Bonds Series 2005A		4.00%		06/01/10			300,000		300,000
Orange Cnty Public Financing Auth
Lease Refunding RB Series 2005		5.00%		07/01/11			550,000		575,344
Orange Cnty Sanitation District
Refunding COP Series 2008A		4.00%		08/01/10			500,000		502,870
Orange Cove Irrigation District
Water Refunding RB Series 2009		3.50%		02/01/11			80,000		80,709
Riverside Cnty
Teeter Obligation Notes Series 2009C		2.00%		10/15/10	(e)		1,500,000		1,507,035
San Francisco
GO Bonds (San Francisco General Hospital) Series 2009A		4.00%		06/15/10	(e)		3,500,000		3,504,340
San Joaquin Cnty Transportation Auth
Sr Sales Tax Revenue Notes Series 2008		4.00%		04/01/11	(e)		4,000,000		4,101,000
San Mateo Cnty Joint Powers Financing Auth
Lease Refunding RB (Youth Services Campus) Series 2008A		3.00%		07/15/10	(e)		500,000		501,555
Lease Refunding RB (Youth Services Campus) Series 2008A		4.00%		07/15/11	(e)		450,000		465,309
San Mateo Cnty Transit District
Limited Tax Bonds Series 1997A		5.00%		06/01/10	(a)(e)		500,000		500,000
Santa Clara Cnty Financing Auth
Refunding Lease RB (Multiple Facilities) Series 2008L		3.00%		05/15/11			100,000		102,511
Total Fixed-Rate Obligations (Cost $32,380,543)									32,585,454
Variable-Rate Obligations 58.1% of net assets
CALIFORNIA 58.1%
Assoc of Bay Area Governments
RB (Jewish Home of San Francisco) Series 2005		1.15%		06/01/10	(a)		1,330,000		1,330,000
Bay Area Toll Auth
San Francisco Bay Area Toll Bridge RB Series 2008E1		0.15%		06/03/10	(b)(e)		1,900,000		1,900,000

2 

 Schwab California Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
California
Economic Recovery Bonds Series 2004C15		0.35%		06/02/10	(a)(b)		1,500,000		1,500,000
Economic Recovery Bonds Series 2004C3		0.26%		06/01/10	(a)		1,600,000		1,600,000
California Dept of Water Resources
Power Supply RB Series 2008J1		0.25%		06/01/10	(a)(e)		490,000		490,000
California Educational Facilities Auth
RB (Chapman Univ) Series 2000		0.22%		06/02/10	(a)		300,000		300,000
RB (Univ of San Francisco) Series 2003		2.00%		06/02/10	(a)		1,000,000		1,000,000
California Infrastructure & Economic Development Bank
RB (California Academy of Sciences) Series 2008F		0.25%		06/01/10	(a)		1,250,000		1,250,000
RB (Orange Cnty Performing Arts Center) Series 2008A		0.25%		06/01/10	(a)		2,100,000		2,100,000
Refunding RB (PG&E) Series 2009A		0.24%		06/01/10	(a)(e)		3,000,000		3,000,000
Refunding RB (PG&E) Series 2009C		0.23%		06/01/10	(a)		1,600,000		1,600,000
California Pollution Control Financing Auth
Refunding RB (BP West Coast Products) Series 2008		0.25%		06/01/10	(e)		2,300,000		2,300,000
Refunding RB (Exxon) Series 1989		0.19%		06/01/10	(e)		2,600,000		2,600,000
California Statewide Communities Development Auth
RB (John Muir Health) Series 2008C		0.24%		06/01/10	(a)		2,000,000		2,000,000
Refunding RB (Los Angeles Cnty Museum of Art) Series 2008D		0.25%		06/01/10	(a)		1,500,000		1,500,000
Economic Development Financing Auth
RB (KQED) Series 1996		0.42%		06/02/10	(a)		925,000		925,000
Hayward Housing Auth
M/F Mortgage Refunding RB (Huntwood Terrace Apts) Series 1993A		0.27%		06/02/10	(a)		800,000		800,000
Los Angeles USD
GO Bonds Series 2009D&2009I		0.29%		06/03/10	(b)(c)(e)		1,700,000		1,700,000
M-S-R Public Power Agency
Subordinate Lien RB Series 2008M		0.33%		06/01/10	(a)		1,000,000		1,000,000
Northern California Transmission Agency
Refunding RB (Transmission Project) Series 2002A		0.33%		06/03/10	(a)(b)		1,245,000		1,245,000
Orange Cnty Sanitation District
COP Series 2003		0.31%		06/03/10	(b)(c)		3,000,000		3,000,000
Refunding COP Series 2000B		0.27%		06/01/10	(b)		3,100,000		3,100,000
Riverside
Water RB Series 2008A		0.28%		06/03/10	(b)(e)		255,000		255,000
Santa Clara Cnty Financing Auth
Refunding Lease RB (Multiple Facilities) Series 2008M		0.28%		06/02/10	(a)(e)		2,200,000		2,200,000
Southern California Metropolitan Water District
Water Refunding RB Series 2004C		0.24%		06/03/10	(b)(e)		1,495,000		1,495,000
Sweetwater Union High SD
GO Bonds Series 2008A		0.29%		06/03/10	(a)(b)(c)		1,000,000		1,000,000
Univ of California
Medical Center Pooled RB Series 2007B1		0.24%		06/01/10	(b)		485,000		485,000
Medical Center Pooled RB Series 2007B2		0.25%		06/01/10	(b)		2,000,000		2,000,000
Total Variable-Rate Obligations (Cost $43,675,000)									43,675,000
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $76,055,547 and the unrealized appreciation and depreciation were $205,379 and ($472), respectively, with a net unrealized appreciation of $204,907.

3

 Schwab California Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

(a)	Credit-enhanced security.
(b)	Liquidity-enhanced security.
(c)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $5,700,000 or 7.6% of net assets.
(d)	Delayed-delivery security.
(e)	All or a portion of this security is held as collateral for delayed-delivery securities.

COP —	Certificate of participation
GO —	General obligation
M/F —	Multi-family
RB —	Revenue bond
SD —	School district
TRAN —	Tax and revenue anticipation note
USD —	Unified school district

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

4 

 Schwab California Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

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 May 31, 2010:

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total*
Fixed-Rate Obligations(a)		$—		$32,585,454		$—		$32,585,454
Variable-Rate Obligations(a)		—		43,675,000		—		43,675,000
Total		$—		$76,260,454		$—		$76,260,454

*	The fund had no Other Financial Investments.
(a)	As categorized in Portfolio Holdings.

5

 Schwab California Tax-Free YieldPlus Fund

Portfolio Holdings (Unaudited) continued

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

	Balance							Change in								Balance
	as of		Accrued		Realized			Unrealized		Net			Net			as of
	August 31,		Discounts		Gain			Gain		Purchases			Transfers			May 31,
Investments in Securities	2009		(Premiums)		(Loss)			(Loss)		(Sales)			in/out			2010
Variable-Rate Obligations
California		$3,795,000		$—		$(130,687	)		$255,000		$(2,424,313	)		$(1,495,000	)		$—
Puerto Rico		1,900,000		—		(52,500	)		100,000		(1,947,500	)		—			—
Total		$5,695,000		$—		$(183,187	)		$355,000		$(4,371,813	)		$(1,495,000	)		$—

REG46023MAY10 - 00

6 

Schwab Investments
Schwab California Tax-Free Bond Fund™

Portfolio Holdings of May 31, 2010 (Unaudited)

The following are the portfolio holdings as of the report date. For more information, please refer to the fund’s semiannual or annual shareholder reports.

For fixed rate obligations, the rate shown is the interest rate (the rate established when the obligation was issued) and the maturity date shown is the stated legal maturity. For variable-rate obligations, the rate shown is the rate as of the report date, and the maturity date shown is the next interest rate change date.

				Cost		Value
Holdings by Category				($)		($)
	97	.4%	Fixed-Rate Obligations		398,461,848		409,387,508
	2	.4%	Variable-Rate Obligations		10,200,000		10,120,487
	99	.8%	Total Investments		408,661,848		419,507,995
	0	.2%	Other Assets and Liabilities, Net				858,143
	100	.0%	Net Assets				420,366,138

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Fixed-Rate Obligations 97.4% of net assets
CALIFORNIA 95.3%
Acton-Agua Dulce USD
GO Bonds Series A		5.00%		08/01/26	(f)		1,190,000		1,282,356
Alameda Corridor Transportation Auth
Sr Lien RB Series 1999A		5.13%		10/01/16	(f)		1,170,000		1,184,859
Alameda-Contra Costa Transit District
COP (FHR Computer System Financing) Series 2007		4.00%		08/01/12	(f)		1,195,000		1,258,801
Anaheim Public Financing Auth
Lease Refunding RB Series 2008		4.50%		08/01/17			1,165,000		1,265,085
RB (Water System) Series 2008		5.00%		10/01/37			1,495,000		1,544,245
Sr Lease RB Series 1997A		6.00%		09/01/24	(a)(f)		5,000,000		5,714,400
Assoc of Bay Area Governments
RB (California Redevelopment Agency Pool) Series 1997A6		5.25%		12/15/17	(a)		285,000		285,279
RB (Casa de las Campanas) Series 2010		5.13%		09/01/20	(a)(f)		5,000,000		5,125,850
RB (Sharp HealthCare) Series 2009B		6.00%		08/01/24	(f)		925,000		1,032,577
Berkeley
COP (Berkeley Animal Shelter) Series 2010		5.75%		08/01/30	(e)		575,000		621,845
COP (Berkeley Animal Shelter) Series 2010		5.75%		08/01/40	(e)		1,500,000		1,582,545
Beverly Hills USD
GO Bonds Series 2009		0.00%		08/01/21	(g)		850,000		520,668
Brea Olinda USD
GO Bonds Series 1999A		5.60%		08/01/10	(f)		1,000,000		1,018,550
California
Economic Recovery Bonds Series 2004A		5.25%		07/01/13	(a)		215,000		243,466
Economic Recovery Bonds Series 2004A		5.25%		07/01/13			225,000		249,851
Economic Recovery Bonds Series 2004A		5.00%		07/01/15			555,000		614,368
GO Bonds		5.00%		02/01/12	(a)		850,000		912,891
GO Bonds		5.25%		04/01/12	(a)		4,845,000		5,265,982
GO Bonds		5.63%		05/01/18			50,000		50,652
California Dept of Water Resources
Power Supply RB Series 2002A		5.38%		05/01/12	(a)		2,590,000		2,854,439

1

 Schwab California Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Power Supply RB Series 2002A		5.38%		05/01/12	(a)		1,860,000		2,049,906
Power Supply RB Series 2002A		5.50%		05/01/12	(a)		4,110,000		4,539,413
Power Supply RB Series 2002A		5.75%		05/01/12	(a)(f)		3,000,000		3,327,660
Power Supply RB Series 2002A		6.00%		05/01/12	(a)		500,000		556,985
Power Supply RB Series 2005F5		5.00%		05/01/22			5,560,000		6,059,622
Power Supply RB Series 2008H		4.50%		05/01/17			1,900,000		2,089,107
Water System RB Series AE		5.00%		12/01/21			55,000		62,475
Water System RB Series AG		5.00%		12/01/26			4,095,000		4,542,174
Water System RB Series AG		5.00%		12/01/28			4,500,000		4,938,300
California Educational Facilities Auth
RB (California Institute of Technology) Series 2009		5.00%		11/01/39			1,500,000		1,599,645
RB (Pomona College) Series 2009A		5.00%		01/01/24	(f)		2,150,000		2,415,933
RB (Univ of Southern California) Series 2009C		5.25%		10/01/24	(f)		2,000,000		2,369,240
California Health Facilities Financing Auth
RB (Adventist Health System West) Series 2009C		5.00%		03/01/14			850,000		912,551
RB (Catholic Healthcare West) Series 2009B		5.00%		07/02/12	(f)		3,925,000		4,173,649
RB (Catholic Healthcare West) Series 2009F		5.00%		07/01/14			1,500,000		1,636,575
RB (NCROC Paradise Valley Estates) Series 2005		4.25%		12/01/12	(a)(f)		100,000		103,641
RB (NCROC Paradise Valley Estates) Series 2005		4.38%		12/01/13	(a)(f)		170,000		178,391
RB (NCROC Paradise Valley Estates) Series 2005		4.63%		12/01/15	(a)		200,000		209,730
RB (NCROC Paradise Valley Estates) Series 2005		4.75%		12/01/16	(a)		340,000		356,041
RB (NCROC Paradise Valley Estates) Series 2005		4.88%		12/01/17	(a)		200,000		207,950
RB (NCROC Paradise Valley Estates) Series 2005		5.00%		12/01/18	(a)		175,000		181,746
RB (Scripps Health) Series 2008A		5.00%		10/01/16	(f)		3,285,000		3,654,957
RB (Scripps Health) Series 2010A		5.00%		11/15/36			2,500,000		2,501,800
RB (St. Joseph Health System) Series 2009A		5.75%		07/01/39			1,800,000		1,880,100
RB (St. Joseph Health System) Series 2009C		5.00%		10/16/14			3,000,000		3,287,670
RB (Sutter Health) Series 2008A		5.00%		08/15/12	(f)		1,705,000		1,834,017
California Infrastructure & Economic Development Bank
RB (California Independent Systems Operator) Series 2009A		5.25%		02/01/21			3,000,000		3,194,610
RB (J. David Gladstone Institutes) Series 2001		5.50%		10/01/19			350,000		359,566
RB (Sanford Consortium) Series 2010A		4.00%		05/15/17			315,000		339,753
RB (Sanford Consortium) Series 2010A		4.00%		05/15/18			875,000		933,275
RB (Sanford Consortium) Series 2010A		4.50%		05/15/19			500,000		548,190
RB (Sanford Consortium) Series 2010A		5.00%		05/15/20			360,000		409,903
Refunding RB (J Paul Getty Trust) Series 2007A1		2.50%		04/01/13	(f)		2,000,000		2,077,160
Refunding RB (Pepperdine Univ) Series 2010		5.00%		11/01/25			250,000		270,253
Refunding RB (Pepperdine Univ) Series 2010		5.00%		11/01/26			500,000		537,250
Refunding RB (Pepperdine Univ) Series 2010		5.00%		11/01/27			300,000		320,655
Refunding RB (Pepperdine Univ) Series 2010		5.00%		11/01/29			500,000		528,820
Refunding RB (PG&E) Series 2008G		3.75%		09/20/10	(f)		3,000,000		3,016,290
Refunding RB (PG&E) Series 2010E		2.25%		04/02/12			1,000,000		1,002,850
California Municipal Finance Auth
RB (High Tech High) Series 2008B		6.00%		07/01/28			845,000		759,824
Solid Waste Disposal RB (Waste Management) Series 2004		3.45%		09/01/14			1,800,000		1,803,510
Solid Waste Disposal RB (Waste Management) Series 2008A		1.00%		09/01/10			2,000,000		1,999,500
California Pollution Control Financing Auth
Refunding RB (BP West Coast Products) Series 2009		2.60%		09/02/14			1,800,000		1,807,182
California State Public Works Board
Lease RB (California State Univ) Series 2009J		6.00%		11/01/29			450,000		482,036
Lease RB (Dept of Corrections) Series 1993E		5.50%		06/01/15			555,000		590,947

2 

 Schwab California Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Lease RB (Various Capital Projects) Series 2009I		6.63%		11/01/34			2,750,000		2,991,615
California Statewide Communities Development Auth
M/F Housing RB (740 S Olive St Apts) Series 2009L		2.10%		07/20/14	(a)		630,000		629,496
RB (Enloe Medical Center) Series 2008A		5.25%		08/15/12	(a)		975,000		1,036,756
RB (Enloe Medical Center) Series 2008A		5.50%		08/15/13	(a)		250,000		272,033
RB (Kaiser Permanente) Series 2002C		3.85%		06/01/12			550,000		571,439
RB (Kaiser Permanente) Series 2009A		5.00%		04/01/14			4,900,000		5,397,105
RB (Prop 1A Receivables) Series 2009		5.00%		06/15/13			5,700,000		6,183,246
RB (St. Joseph Health System) Series 2000		4.50%		07/01/18			6,040,000		6,113,024
RB (Sunnyside/Vermont) Series 2001A		7.00%		04/20/36	(a)		3,870,000		4,128,555
Refunding RB (John Muir/Mt Diablo Health) Series 2005A		5.00%		05/01/13			25,000		26,846
Sr Living RB (Southern California Presbyterian Homes) Series 2009		5.25%		11/15/14			1,000,000		1,044,250
Carmichael
Water District COP Refunding RB		5.00%		11/01/25			610,000		658,269
Water District COP Refunding RB		5.00%		11/01/26			820,000		879,122
Water District COP Refunding RB		5.00%		11/01/29			2,000,000		2,109,560
Carson Redevelopment Agency
Tax Allocation Sub Bonds (Merged & Amended Area) Series 2003D		6.00%		01/01/14	(a)		500,000		582,460
Central Valley Financing Auth
Refunding RB (Carson Ice Cogeneration) Series 2009		2.25%		07/01/10			3,955,000		3,960,379
Refunding RB (Carson Ice Cogeneration) Series 2009		3.00%		07/01/11			875,000		892,001
Chula Vista Public Financing Auth
COP (Capital Facilities Refunding Projects) Series 2010		5.50%		03/01/33			2,000,000		1,971,740
Contra Costa Transportation Auth
Limited Tax Sales Tax Revenue Notes Series 2009		2.50%		10/01/10			2,500,000		2,517,675
East Bay Municipal Utility District
Water System Sub Refunding RB Series 2010A		5.00%		06/01/30			2,000,000		2,178,920
East Bay Regional Park District
GO Bonds Series 2009A		5.00%		09/01/28			2,000,000		2,206,820
GO Bonds Series 2009A		5.00%		09/01/29			2,145,000		2,354,481
GO Refunding Bonds Series 2008		5.00%		09/01/13			135,000		151,918
El Cajon Public Financing Auth
Sales Tax RB (Public Safety Financing) Series 2009A		4.00%		08/01/15			4,000,000		4,250,840
Elsinore Valley Municipal Water District
Refunding COP Series 1992A		6.00%		07/01/12			1,720,000		1,773,561
Fresno
Water System RB Series 2010A1		5.50%		06/01/21			2,000,000		2,276,980
Water System RB Series 2010A1		5.50%		06/01/22			3,900,000		4,402,047
Gilroy Public Facilities Financing Auth
BAN Series 2009		2.00%		09/01/10			5,000,000		5,012,600
Golden State Tobacco Securitization Corp
Enhanced Tobacco Settlement Asset-Backed Bonds Series 2003A1		6.25%		06/01/13	(a)		6,645,000		7,418,079
Golden West Schools Financing Auth
GO RB (Rowland USD) Series 2005		5.25%		09/01/24			1,675,000		1,865,799
Huntington Beach Public Financing Auth
Lease RB Series 2000A		5.50%		09/01/10			1,000,000		1,012,740
Lease Refunding RB Series 2010A		5.00%		09/01/30	(e)		1,000,000		1,027,380
Irvine Ranch Water District
COP Series 2010		5.00%		03/01/23			1,500,000		1,679,085

3

 Schwab California Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
COP Series 2010		5.00%		03/01/25			2,540,000		2,794,838
COP Series 2010		5.00%		03/01/27			3,150,000		3,428,491
Long Beach
Harbor Refunding RB Series 2010B		5.00%		05/15/24			5,000,000		5,480,150
Los Angeles Cnty Metropolitan Transportation Auth
Sr Sales Tax Refunding RB Series 2009A		2.00%		07/01/11			2,685,000		2,731,155
Los Angeles Community College District
GO Bonds Series 2009A		6.00%		08/01/33			2,000,000		2,237,400
Los Angeles Community Redevelopment Agency
Lease RB (Vermont Manchester Social Services) Series 2005		5.00%		09/01/17			1,340,000		1,392,461
Los Angeles Dept of Airports
Sr RB Series 2010A		4.00%		05/15/20			2,500,000		2,582,975
Sr RB Series 2010A		5.00%		05/15/32			7,565,000		7,828,716
Los Angeles Dept of Water & Power
Power System RB Series 2001A1		5.25%		07/01/14			1,355,000		1,417,316
Power System RB Series 2008A2		5.00%		07/01/13			500,000		557,880
Power System RB Series 2008A2		5.00%		07/01/16			740,000		851,807
Power System RB Series 2009B		5.25%		07/01/23			2,750,000		3,100,900
Los Angeles Municipal Improvement Corp
Lease RB Series 2007A		5.00%		08/01/14			175,000		195,857
Lease RB Series 2009A		4.00%		04/01/14	(a)		230,000		248,630
Lease RB Series 2009C		4.00%		09/01/16			1,650,000		1,741,344
Lease RB Series 2009E		5.00%		09/01/26			1,750,000		1,784,930
Lease RB Series 2009E		5.25%		09/01/29			1,000,000		1,018,990
Los Angeles USD
GO Bonds Series 2007E		5.00%		07/01/24			525,000		559,398
GO Bonds Series 2009I		5.00%		07/01/29			3,000,000		3,135,690
GO Refunding Bonds Series 2010A		4.00%		07/01/13			3,020,000		3,254,745
Lynwood Public Financing Auth
Lease Refunding RB (Public Capital Improvement) Series 2003		5.00%		09/01/18			1,000,000		1,053,430
M-S-R Public Power Agency
Sub Lien RB Series 2008L		5.00%		07/01/16	(a)		1,240,000		1,408,528
Sub Lien RB Series 2008L		5.00%		07/01/17	(a)		855,000		974,991
Malibu
COP Series 2009A		4.00%		07/01/14			70,000		75,171
COP Series 2009A		4.00%		07/01/17			100,000		105,678
COP Series 2009A		4.00%		07/01/18			75,000		78,695
COP Series 2009A		5.00%		07/01/20			75,000		83,068
COP Series 2009A		5.00%		07/01/21			110,000		121,206
COP Series 2009A		5.00%		07/01/22			150,000		163,947
COP Series 2009A		5.00%		07/01/32			870,000		898,162
COP Series 2009A		5.00%		07/01/39			2,100,000		2,147,607
Marin Community College District
GO Bonds Series B		3.00%		08/01/10			1,000,000		1,004,290
Marin Water District Financing Auth
Water RB Series 2010A		5.00%		07/01/35			1,000,000		1,050,880
Marina Joint Powers Financing Auth
M/F Housing RB (Abrams B Apts) Series 2006		3.90%		11/15/16	(a)		2,850,000		2,950,263
Menifee Union SD
GO Bonds Series A		5.50%		08/01/27			425,000		465,894

4 

 Schwab California Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
GO Bonds Series A		5.50%		08/01/29			180,000		194,852
Mojave Water Agency
Revenue COP Series 2009A		5.50%		06/01/29			5,590,000		6,025,461
Mt. Diablo Hospital District
Hospital RB Series 1993A		5.00%		12/01/13	(a)		3,495,000		3,745,032
Newport Beach
RB (Hoag Memorial Hospital Presbyterian) Series 2009D		5.00%		02/07/13			2,500,000		2,680,975
Northern California Transmission Agency
RB (California-Oregon Transmission) Series 1990A		4.00%		05/01/13			1,000,000		1,067,300
Oceanside Community Development Commission
M/F Rental Housing Refunding RB (Vista Del Oro Apts) Series 2001A		4.45%		04/01/11	(a)		1,250,000		1,250,612
Orange Cove Irrigation District
Water Refunding RB Series 2009		3.75%		02/01/16			1,240,000		1,260,857
Water Refunding RB Series 2009		4.00%		02/01/17			1,465,000		1,490,681
Palomar Pomerado Health
COP 2009		5.50%		11/01/19			3,000,000		3,176,040
Pasadena
Refunding COP Series 2008C		5.00%		02/01/28			1,170,000		1,229,143
Pasadena Area Community College District
GO Bonds Series 2009D		5.00%		08/01/21			230,000		258,557
GO Bonds Series 2009D		5.00%		08/01/22			300,000		334,002
GO Bonds Series 2009D		5.00%		08/01/24			350,000		383,355
Pomona
S/F Mortgage Refunding RB Series 1990B		7.50%		08/01/23	(a)		1,000,000		1,317,130
Port of Oakland
RB Series 2002M		5.25%		11/01/12	(a)		3,600,000		3,990,024
Redlands USD
GO Bonds Series 2008		5.00%		07/01/27	(a)		90,000		95,202
GO Bonds Series 2008		5.00%		07/01/28	(a)		60,000		63,173
Riverside Cnty
Teeter Obligation Notes Series 2009C		2.00%		10/15/10			1,000,000		1,004,690
Sacramento Cogeneration Auth
Refunding RB (Procter & Gamble) Series 2009		4.00%		07/01/11			285,000		293,735
San Bernardino Cnty Transportation Auth
Sales Tax Revenue Notes (Limited Tax Bonds) Series 2009A		4.00%		05/01/12			5,500,000		5,776,155
San Bernardino Community College District
GO Bonds Series A		6.25%		08/01/33			1,040,000		1,173,692
San Diego Cnty Water Auth Financing Agency
Water RB Series 2010A		5.00%		05/01/24			6,510,000		7,160,935
San Diego Public Facilities Financing Auth
Lease Refunding RB (Ballpark Refunding) Series 2007A		5.00%		02/15/11			3,725,000		3,810,861
Lease Refunding RB (Master Refunding) Series 2010A		3.63%		03/01/17			2,710,000		2,689,865
Lease Refunding RB (Master Refunding) Series 2010A		5.00%		09/01/17			1,500,000		1,617,900
Lease Refunding RB (Master Refunding) Series 2010A		4.00%		03/01/19			1,335,000		1,310,770
Lease Refunding RB (Master Refunding) Series 2010A		5.00%		09/01/19			1,010,000		1,067,348
Lease Refunding RB (Master Refunding) Series 2010A		4.25%		03/01/20			1,000,000		980,390
Lease Refunding RB (Master Refunding) Series 2010A		5.00%		09/01/20			795,000		833,947
Lease Refunding RB (Master Refunding) Series 2010A		5.25%		03/01/40			2,000,000		1,955,660

5

 Schwab California Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Water Refunding RB Series 2009A		5.00%		08/01/26			1,030,000		1,106,261
San Diego Regional Building Auth
Lease RB (Cnty Operations Center & Annex Redevelopment) Series 2009A		3.00%		02/01/13			500,000		520,685
Lease RB (Cnty Operations Center & Annex Redevelopment) Series 2009A		3.25%		02/01/14			80,000		83,946
Lease RB (Cnty Operations Center & Annex Redevelopment) Series 2009A		4.00%		02/01/16			415,000		441,564
Lease RB (Cnty Operations Center & Annex Redevelopment) Series 2009A		4.00%		02/01/17			890,000		940,588
San Diego USD
GO Refunding Bonds Series 2006F1		5.25%		07/01/27			2,950,000		3,383,237
San Francisco
COP (Multiple Capital Improvements) Series 2009A		5.00%		04/01/15			800,000		881,208
COP (Multiple Capital Improvements) Series 2009A		5.00%		04/01/17			1,000,000		1,096,710
COP (Multiple Capital Improvements) Series 2009A		5.00%		04/01/21			4,225,000		4,578,928
GO Bonds (San Francisco General Hospital ) Series 2010A		5.00%		06/15/12			9,140,000		9,916,534
San Francisco Airport Commission
RB Second Series 2009E		5.25%		05/01/24			1,000,000		1,086,640
RB Second Series 2009E		5.50%		05/01/25			2,000,000		2,205,600
RB Second Series 2009E		5.50%		05/01/26			2,000,000		2,194,660
Refunding RB Second Series 2010C		5.00%		05/01/19			2,000,000		2,227,900
San Francisco Bay Area Rapid Transit District
GO Bonds Series 2007B		5.00%		08/01/24			5,200,000		5,714,228
San Joaquin Cnty Transportation Auth
Sr Sales Tax Revenue Notes Series 2008		4.00%		04/01/11			4,310,000		4,418,827
San Jose Redevelopment Agency
Tax Allocation Refunding Bonds Series 2010A1		5.50%		08/01/35			1,500,000		1,511,490
San Lorenzo Valley USD
GO Bonds Series 2008A		0.00%		08/01/27	(a)(g)		870,000		337,203
GO Bonds Series 2008A		0.00%		08/01/28	(a)(g)		550,000		199,238
GO Bonds Series 2008A		0.00%		08/01/30	(a)(g)		350,000		110,306
GO Bonds Series 2008A		0.00%		08/01/31	(a)(g)		950,000		275,282
San Mateo Cnty Joint Powers Financing Auth
Lease Refunding RB (Youth Services Campus) Series 2008A		4.00%		07/15/12			500,000		529,385
Lease Refunding RB (Youth Services Campus) Series 2008A		4.00%		07/15/17			875,000		919,214
Lease Refunding RB (Youth Services Campus) Series 2008A		5.00%		07/15/20			650,000		715,936
San Rafael Redevelopment Agency
Refunding Bonds Series 2009		4.00%		12/01/19			565,000		583,040
Santa Clara Cnty Financing Auth
Lease RB (VMC Facility) Series 1994A		7.75%		11/15/10			1,460,000		1,507,990
RB (El Camino Hospital) Series 2007A		5.00%		02/01/17			125,000		136,515
RB (El Camino Hospital) Series 2007B		5.00%		02/01/16			50,000		54,570
RB (El Camino Hospital) Series 2007B		5.00%		02/01/17			115,000		125,736
RB (El Camino Hospital) Series 2007C		5.00%		02/01/15			100,000		108,681
RB (El Camino Hospital) Series 2007C		5.00%		02/01/17			300,000		328,383
Refunding Lease RB (Multiple Facilities) Series 2010N		4.00%		05/15/17			500,000		532,765
Santa Clara Redevelopment Agency
Refunding Bonds (Bayshore North)		7.00%		07/01/10			340,000		341,421
Santa Clara Valley Transportation Auth
Sales Tax Refunding RB Series 2007A		5.00%		04/01/25			1,840,000		1,959,066
Santa Cruz Cnty Redevelopment Agency
Bonds Series 2009A		7.00%		09/01/36			1,100,000		1,230,042

6 

 Schwab California Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Santa Monica Community College District
GO Bonds Series 2009C		5.25%		08/01/22			450,000		515,804
Santa Monica-Malibu USD
GO Bonds Series B		5.00%		08/01/17			115,000		134,150
GO Bonds Series B		5.00%		08/01/18			200,000		235,084
GO Bonds Series B		5.00%		08/01/19			150,000		175,836
South Coast Water District Financing Auth
Refunding RB Series 2010A		5.00%		02/01/29	(e)		4,530,000		4,867,258
South Orange Cnty Public Financing Auth
Special Tax RB Series 1999A		5.25%		08/15/18	(a)		6,995,000		7,042,986
Southern California Metropolitan Water District
Water Refunding RB Series 1993A		5.75%		07/01/21			1,000,000		1,187,860
Southern California Public Power Auth
RB (Milford Wind Corridor) Series 2010-1		5.00%		07/01/28			2,900,000		3,076,610
Taft City Elementary SD
GO Bonds Series 2001A		4.90%		08/01/20			1,030,000		1,052,608
Tuolumne Wind Project Auth
RB (Tuolumne Co) Series 2009A		5.00%		01/01/22			1,500,000		1,610,220
Univ of California
General RB Series 2009Q		5.25%		05/15/26			6,030,000		6,633,121
Washington Township Health Care District
GO Bonds Series 2009A		6.00%		08/01/11			1,160,000		1,233,196
GO Bonds Series 2009A		6.00%		08/01/12			1,000,000		1,094,640
GO Bonds Series 2009A		6.50%		08/01/13			250,000		285,443
GO Bonds Series 2009A		6.50%		08/01/14			750,000		871,050
RB Series 2009A		4.50%		07/01/11			150,000		155,745
RB Series 2009A		4.50%		07/01/12			275,000		291,987
RB Series 2009A		4.50%		07/01/13			250,000		268,795
RB Series 2009A		5.00%		07/01/14			300,000		325,020
RB Series 2009A		5.00%		07/01/15			300,000		320,328
RB Series 2009A		5.00%		07/01/16			75,000		79,299
RB Series 2009A		5.13%		07/01/17			200,000		210,844
RB Series 2009A		5.25%		07/01/18			250,000		263,785
RB Series 2009A		5.50%		07/01/19			300,000		319,155
RB Series 2009A		6.00%		07/01/29			1,000,000		1,048,410
Whittier
Health Facility RB (Presbyterian Intercommunity Hospital) Series 2002		5.60%		06/01/12	(a)		2,000,000		2,210,100
Health Facility RB (Presbyterian Intercommunity Hospital) Series 2009D		5.00%		06/01/15			800,000		851,912
Health Facility RB (Presbyterian Intercommunity Hospital) Series 2009D		5.00%		06/01/16			2,000,000		2,119,880
Health Facility RB (Presbyterian Intercommunity Hospital) Series 2009D		5.00%		06/01/17			2,000,000		2,112,220
William S. Hart Union High SD
GO BAN 2009		5.00%		12/01/11			1,500,000		1,551,540
									400,468,874
PUERTO RICO 2.1%
Puerto Rico Electric Power Auth
Power RB Series NN		5.00%		07/01/13	(a)		1,175,000		1,321,664

7

 Schwab California Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

Issuer						Face Amount		Value
Type of Security, Series	Rate		Maturity Date			($)		($)
Power Refunding RB Series ZZ		5.25%		07/01/18			5,000,000		5,511,050
Puerto Rico Sales Tax Financing Corp
Sales Tax RB First Sub Series 2009A		5.00%		08/01/11			2,000,000		2,085,920
									8,918,634
Total Fixed-Rate Obligations (Cost $398,461,848)									409,387,508
Variable-Rate Obligations 2.4% of net assets
CALIFORNIA 2.4%
California Educational Facilities Auth
RB (Univ of San Francisco) Series 2003		2.00%		06/02/10	(a)		1,150,000		1,150,000
Refunding RB (Loyola Marymount Univ) Series 2010B		1.09%		06/02/10			7,500,000		7,499,925
California Statewide Communities Development Auth
COP (Eskaton Properties) Series 1999		1.02%		06/24/10	(b)(c)(d)		1,550,000		1,470,562
Total Variable-Rate Obligations (Cost $10,200,000)									10,120,487
End of Investments.

At 05/31/10, the tax basis cost of the fund’s investments was $408,656,613 and the unrealized appreciation and depreciation were $11,184,444 and ($333,062), respectively, with a net unrealized appreciation of $10,851,382.

(a)	Credit-enhanced security.
(b)	Illiquid security. At the period end, the value of these amounted to $1,470,562 or 0.3% of net assets.
(c)	Failed Auction Rate Bond - this security’s interest payments are adjusted periodically through an auction process. The process typically serves as a means for buying and selling the bond, and the maturity date listed in the portfolio holdings is the next auction date. Auctions that fail to attract enough buyers for all the bonds offered for sale are deemed to have “failed”. Although the auctions have failed, the issuer continues to pay a formula-based interest rate which resets at each scheduled auction.
(d)	Fair-valued by management in accordance with procedures approved by the Board of Trustees.
(e)	Delayed-delivery security.
(f)	All or a portion of this security is held as collateral for delayed-delivery securities.
(g)	Zero Coupon Bond.

BAN —	Bond anticipation note
COP —	Certificate of participation
GO —	General obligation
M/F —	Multi-family
RB —	Revenue bond
SD —	School district
S/F —	Single-family
USD —	Unified school district

Various inputs are used in determining the value of the funds’ investments. The fair value measurements and disclosures establish 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. — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted price for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price.

•  Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by

8 

 Schwab California Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that would calculate fair valuations of international securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

•  Level 3 — significant unobservable inputs (including the funds’ own assumption in determining the fair value of investments). — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of May 31, 2010:

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total*
Fixed-Rate Obligations(a)		$—		$409,387,508		$—		$409,387,508
Variable-Rate Obligations(a)		—		8,649,924		1,470,563		10,120,487
Total		$—		$418,037,432		$1,470,563		$419,507,995

*	The fund had no Other Financial Investments.
(a)	As categorized in Portfolio Holdings.

9

 Schwab California Tax-Free Bond Fund

Portfolio Holdings (Unaudited) continued

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

	Balance						Change in							Balance
	as of		Accrued		Realized		Unrealized		Net			Net		as of
	August 31,		Discounts		Gain		Gain		Purchases			Transfers		May 31,
Investments in Securities	2009		(Premiums)		(Loss)		(Loss)		(Sales)			in/out		2010
Variable-Rate Obligations		$1,440,000		$—		$—		$80,563		$(50,000	)		$—		$1,470,563
Total		$1,440,000		$—		$—		$80,563		$(50,000	)		$—		$1,470,563

REG46024MAY10 - 00

10 

Item 2. 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 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 Registrant’s last fiscal quarter, there have been no changes in Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) 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 3. Exhibits.

Separate certifications for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)), are attached.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Schwab Investments

By:	/s/ Randall W. Merk
	Randall W. Merk Chief Executive Officer
Date:	July 20, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Randall W. Merk
	Randall W. Merk Chief Executive Officer
Date:	July 20, 2010
By:	/s/ George Pereira
	George Pereira Principal Financial Officer
Date:	July 20, 2010