SCHWAB GLOBAL REAL ESTATE FUND TM

                                                               SCHWAB FUNDS LOGO

   Prospectus
   February 28, 2007

   As with all mutual funds, the
   Securities and Exchange Commission
   (SEC) has not approved these securities
   or passed on whether the information in
   this prospectus is adequate and
   accurate. Anyone who indicates
   otherwise is committing a federal
   crime.                                                  [CHARLES SCHWAB LOGO]





SCHWAB GLOBAL REAL ESTATE FUND TM

                                                           

       ABOUT THE FUND

          Strategy.................................................    2

          Risks....................................................    4

          Performance..............................................    8

          Fund fees and expenses...................................    8

          Fund management..........................................    9

       INVESTING IN THE FUND

          Placing intermediary orders..............................   11

          Transaction policies.....................................   14

          Distributions and taxes..................................   18

       


SCHWAB GLOBAL REAL ESTATE FUND TM
Ticker symbols:  Investor Shares: SWAIX  Select Shares(R): SWASX

- --------------------------------------------------------------------------------
THE FUND SEEKS CAPITAL GROWTH AND INCOME CONSISTENT WITH PRUDENT INVESTMENT
MANAGEMENT.

- --------------------------------------------------------------------------------


STRATEGY

Under normal circumstances, the fund invests at least 80% of its net assets in
securities of real estate companies and companies related to the real estate
industry. The fund will provide shareholders with at least 60 days notice before
changing this policy. Real estate companies include U.S. and non-U.S. issuers
that derive at least 50% of their revenues or profits from the ownership,
construction, development, financing, management, servicing, sale or leasing of
commercial, industrial or residential real estate or have 50% of their total
assets in real estate. Companies related to the real estate industry include
companies whose products and services are related to the real estate industry,
such as building supply manufacturers, mortgage lenders and mortgage servicing
companies. The fund does not invest directly in real estate.

The fund may invest a significant portion of its total assets in real estate
investment trusts (REITs) and other similar REIT-like structures. REITs are U.S.
real estate companies that own and commonly operate income producing real
estate, or that use their assets to finance real estate. REITs are not subject
to U.S. corporate income tax provided they comply with a number of tax
requirements, including the distribution to shareholders of at least 90% of
their net income. A number of other countries have adopted REIT-like structures
which are not subject to local corporate income tax provided they distribute a
significant portion of their net income to shareholders and meet certain other
requirements. The fund may also invest in real estate operating companies
(REOCs). REOCs are real estate companies that engage in the development,
management or financing of real estate. They typically provide services such as
property management, property development, facilities management and real estate
financing. REOCs are publicly traded corporations that have not elected to be
taxed as REITs. The three primary reasons for such an election are (a)
availability of tax-loss carry-forwards, (b) operation in non-REIT-qualifying
lines of business, and (c) ability to retain earnings.

2


The fund invests primarily in equity securities, including common and preferred
stocks, convertible securities, rights or warrants to purchase stocks, and
exchange traded funds. The fund may also invest in fixed income securities,
including high yield securities (junk bonds), issued by or guaranteed by real
estate companies or companies related to the real estate industry, such as
fixed, floating or variable rate corporate bonds, inflation indexed securities,
collateralized debt obligations, fixed-rate capital securities, mortgage pass
through certificates, real estate mortgage investment conduit certificates and
collateralized mortgage obligations.

The fund selects investments based on the investment adviser's analysis of each
issuer. In making this determination, the investment adviser may take into
account a variety of factors that it determines to be relevant from time to
time, such as the issuer's financial condition, industry position, earnings
estimates, management and local and global economic and market conditions. The
investment adviser uses a proprietary database and investment model to help
choose and allocate the fund's investments.

The fund may invest in derivative securities, such as swaps, options, futures
and options on futures which are principally tied to the real estate industry.
Derivatives are financial contracts whose values depend upon or are derived from
the values of underlying assets, reference rates or indexes. The fund uses
derivatives for risk management purposes and as substitutes for taking positions
in the underlying assets. For example, the fund may seek to gain exposure to the
real estate market by investing in a REIT total return swap. In a conventional
REIT swap agreement, the fund will receive the price appreciation (or
depreciation) of a REIT index or portion of an index from the counterparty in
exchange for paying the counterparty an agreed upon fee. The fund may use
investment techniques such as short sales and reverse repurchase agreements and
may enter into forward commitment and delayed delivery agreements. The fund may
lend its securities to certain financial institutions to earn additional income.
Please see the "Principal risks" section for a description of these investments.

Under normal market conditions, the fund seeks to invest its assets across
different countries and regions. The fund invests primarily in developed market
countries, but may invest up to 15% of its total assets in emerging market
countries. In allocating the fund's investments, the investment adviser
considers the size and condition of the real estate market in each country and
region and the global real estate market as a whole. Except as provided above,
the fund is not required to invest or restricted from investing any minimum or
maximum percentage of its assets in any one county or region. The fund is
non-diversified and, as such, may allocate its assets in a smaller number of
issuers than a diversified fund.

The fund sells securities when the investment adviser believes it is appropriate
to do so, regardless of how long the securities have been held. Such sales may
cause the fund to experience high portfolio turnover and correspondingly
increased transaction costs. The sales may also result in capital gain or loss,
including short-term capital gain or loss. High portfolio turnover may adversely
impact the fund's performance. The fund may hold up to 100% of its assets in
cash, cash equivalents and other short-term investments for temporary or
defensive purposes. The fund may utilize such tactics when the investment
adviser believes that market or economic interests are unfavorable for
investors. Under such circumstances, the fund may not achieve its investment
objective.

                                                                               3


PRINCIPAL RISKS

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

EQUITY RISK. The prices of equity securities rise and fall daily. These price
movements may result from factors affecting individual companies, industries or
the securities market as a whole. Individual companies may report poor results
or be negatively affected by industry and/or economic trends and developments.
The prices of securities issued by such companies may suffer a decline in
response. In addition, the equity market tends to move in cycles which may cause
stock prices to fall over short or extended periods of time.

SMALLER COMPANIES RISK. Even the larger REITS and other real estate companies,
may be small- to medium-sized companies in relation to the equity markets as a
whole. Real estate equity share prices therefore can be more volatile than, and
perform differently from, those of larger company stocks. There may be less
activity in smaller company stocks than in larger company stocks and, as a
result, trading may have a greater impact on the stock price of smaller
companies. In addition smaller companies may be more vulnerable to adverse
business or economic events than larger companies.

REAL ESTATE INVESTMENT RISK. Although the fund may not invest directly in real
estate, it may invest in securities of real estate companies and companies
related to the real estate industry. The fund has a policy of concentrating its
investments in real estate companies and companies related to the real estate
industry. As such, the fund is subject to risks associated with the direct
ownership of real estate securities and an investment in the fund will be
closely linked to the performance of the real estate markets. These risks
include, among others, declines in the value of real estate; risks related to
general and local economic conditions; possible lack of availability of mortgage
funds; overbuilding; extended vacancies of properties; defaults by borrowers or
tenants, particularly during an economic downturn; increasing competition;
increases in property taxes and operating expenses; changes in zoning laws;
losses due to costs resulting from the clean-up of environmental problems;
liability to third parties for damages resulting from environmental problems;
casualty or condemnation losses; limitations on rents; changes in market and
sub-market values and the appeal of properties to tenants; and changes in
interest rates.

REITS RISK. In addition to the risks associated with investing in securities of
real estate companies and real estate related companies, REITs are subject to
certain additional risks. Equity REITs may be affected by changes in the value
of the underlying properties owned by the trusts, and mortgage REITs may be
affected by the quality of any credit extended. Further, REITs are dependent
upon specialized management skills and may have their investments in relatively
few properties, or in a small geographic area or a single property type. REITs
are also subject to heavy cash flow dependency, defaults by borrowers and
self-liquidation. In addition, REITs could possibly fail to qualify for tax free
pass-through of income under the Internal Revenue Code, or to maintain their
exemptions from registration under the Investment Company Act of 1940. The
failure of a company to qualify as a REIT under federal tax law may have adverse
consequences to the fund. The above factors may also adversely affect a
borrower's or a lessee's ability to meet its obligations to the REIT. In the
event of a default by a borrower or lessee, the REIT may experience delays in
enforcing its rights as a mortgagee or lessor and may incur substantial costs
associated with protecting its investments. In addition, REITs have their own
expenses, and the fund will bear a proportionate share of those expenses.

INFLATION INDEXED SECURITIES RISK. The value of inflation indexed securities
generally will fluctuate in response to changes in "real" interest rates. Real
interest rates represent nominal (or stated) interest rates reduced by the
expected impact of inflation. The value of an inflation indexed security
generally decreases when real interest rates rise and generally increase when
real interest rates fall. In addition, the principal value of an inflation

4  Schwab Global Real Estate Fund TM


indexed security is periodically adjusted up or down along with the rate of
inflation. If the measure of inflation falls, the principal value of the
inflation indexed security will be adjusted downwards, and consequently, the
interest payable on the security will be reduced. Repayment of the original bond
principal upon maturity (as adjusted for inflation) is guaranteed by the United
States Treasury in the case of TIPS. For bonds that do not provide a similar
guarantee, the adjusted principal value of the bond to be repaid at maturity is
subject to credit risk.

INTEREST RATE RISK. The fund's fixed income securities are subject to the risk
that interest rates rise and fall over time. When interest rates rise, the value
of the fund's fixed income securities is likely to decline. Securities with
longer durations tend to be more sensitive to interest rate changes than
securities with shorter durations.

CREDIT RISK. The fund is subject to the risk that a decline in the credit
quality of a fixed income investment could cause the fund's share price to fall.
The fund could lose money if the issuer or guarantor of a portfolio investment
or the counterparty to a derivatives contract fails to make timely principal or
interest payments or otherwise honor its obligations. High yield securities
(junk bonds) involve greater risks of default or downgrade and are more volatile
than investment-grade securities. High yield securities involve greater risk of
price declines than investment-grade securities due to actual or perceived
changes in an issuer's creditworthiness. In addition, issuers of high yield
securities may be more susceptible than other issuers to economic downturns.
Such securities are subject to the risk that the issuer may not be able to pay
interest or dividends and ultimately to repay principal upon maturity.
Discontinuation of these payments could substantially adversely affect the
market value of the securities.

PREPAYMENT AND EXTENSION RISK. The fund's fixed income investments are subject
to the risk that the securities may be paid off earlier or later than expected.
Either situation could cause the fund to hold securities paying
lower-than-market rates of interest, which could hurt the fund's yield or share
price. In addition, rising interest rates tend to extend the duration of certain
fixed income securities, making them more sensitive to changes in interest
rates. As a result, in a period of rising interest rates, the fund may exhibit
additional volatility. This is known as extension risk. When interest rates
decline, borrowers may pay off their fixed income securities sooner than
expected. This can reduce the returns of the fund because the fund will have to
reinvest that money at the lower prevailing interest rates. This is known as
prepayment risk.

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

EMERGING MARKET RISK. Emerging market countries are countries that the World
Bank or the United Nations considers to be emerging or developing. Emerging
markets countries may be more likely to experience political turmoil or rapid
changes in market or economic conditions than more developed countries. Emerging
market countries often have less uniformity in accounting and reporting
requirements and unreliable securities valuation. It is sometimes difficult to
obtain and enforce court judgments in such countries and there is often a
greater potential for nationalization and/or expropriation of assets by the
government of an emerging market country. In addition, the financial stability
of issuers (including governments) in emerging market countries

                                                                               5


may be more precarious than in other countries. As a result, there will tend to
be an increased risk of price volatility associated with the fund's investments
in emerging market countries, which may be magnified by currency fluctuations
relative to the U.S. dollar.

CURRENCY RISK. The fund may invest in securities denominated in, and/or
receiving revenues in, foreign currencies on a hedged or unhedged basis. As a
result, the fund subject to the risk that foreign currencies will decline in
value relative to the U.S. dollar, or, in the case of hedging positions, that
the U.S. dollar will decline in value relative to the currency hedged. In either
event, the dollar value of an investment in the fund would be adversely
affected. Currencies in non-U.S. countries may fluctuate significantly over
short periods of time for a number of reasons, including changes in interest
rates, intervention by U.S. or foreign governments, central banks or
supranational agencies, such as the International Monetary Fund, or by the
imposition of currency controls or other political developments in the United
State or abroad.

CONVERTIBLE SECURITIES RISK. A convertible security is a bond, debenture, note,
preferred stock or other security that may be converted into or exercised for a
prescribed amount of common stock at a specified time and price. Convertible
securities provide an opportunity for equity participation, with the potential
for a higher dividend or interest yield and lower price volatility compared to
common stock. The value of a convertible security is influenced by changes in
interest rates, with investment value declining as interest rates increase and
increasing as interest rates decline, and the credit standing of the issuer. The
price of a convertible security will also normally vary in some proportion to
changes in the price of the underlying common stock because of the conversion or
exercise feature.

DERIVATIVES RISK. The fund may use derivatives to enhance returns or hedge
against market declines. Examples of derivatives are options, futures, options
on futures and swaps. An option is the right to buy or sell an instrument at a
specific price before a specific date. A future is an agreement to buy or sell a
financial instrument at a specific price on a specific day. A swap is an
agreement whereby two parties agree to exchange payment streams calculated in
relation to a rate, index, instrument or certain securities and a predetermined
amount. A credit default swap is an agreement in which the seller agrees to make
a payment to the buyer in the event of a specified credit event in exchange for
a fixed payment or series of fixed payments.

The fund's use of derivative instruments involves risks different from or
possibly greater than, the risks associated with investing directly in
securities and other traditional investments. Certain of these risks, such as
credit risk, leverage risk, market risk and management risk, are discussed
elsewhere in this section. The fund's use of derivatives is also subject to
liquidity risk, lack of availability risk, valuation risk, correlation risk and
tax risk. Liquidity risk is the risk that the fund may not be able to purchase
or liquidate a particular derivative at an advantageous time or place. Lack of
availability risk is the risk that suitable derivative transactions may not be
available in all circumstances for risk management or other purposes. Valuation
risk is the risk that a particular derivative may be valued incorrectly.
Correlation risk is the risk that changes in the value of the derivative may not
correlate perfectly with the underlying asset, rate or index. Tax risk is the
risk that the use of derivatives may cause the fund to realize higher amounts of
short-term capital gain. These risks could cause the fund to lose more than the
principal amount invested.

LEVERAGE RISK. Certain fund transactions, such as derivatives, short sales,
reverse repurchase agreements and delayed delivery and forward commitment
transactions, may give rise to a form of leverage and may expose the fund to
greater risk. In a reverse repurchase agreement, the fund would sell a security
and enter into an agreement to repurchase the security at a specified future
date and price. Leverage tends to magnify the effect of any decrease or increase
in the value of the fund's portfolio securities. The use of leverage may cause
the fund to liquidate portfolio positions when it would not be advantageous to
do so in order to satisfy its obligations.

6  Schwab Global Real Estate Fund TM


SHORT SALES RISK. Short sales are transactions in which the fund sells a
security it does not own. To complete a short sale, the fund must borrow the
security to deliver to the buyer. The fund is then obligated to replace the
borrowed security by purchasing the security at the market price at the time of
replacement. This price may be more or less than the price at which the security
was sold by the fund and the fund will incur a loss if the price of the security
sold short increases between the time of the short sale and the time the fund
replaces the borrowed security.

DELAYED DELIVERY AND FORWARD COMMITMENT TRANSACTION RISK. A delayed delivery
agreement is a contract for the purchase or sale of one or more securities to be
delivered on an agreed future settlement date. A forward commitment agreement is
a contract for the purchase or sale of one or more securities at a specified
price, with delivery and cash settlement on an agreed specified future date.
When purchasing securities on a delayed delivery basis, the fund assumes the
rights and risks of ownership, including the risk of price and yield
fluctuations. Typically, no interest will accrue to the fund until the security
is delivered. When the fund sells a security on a delayed delivery basis, the
fund does not participate in further gains or losses with respect to that
security. If the other party to a delayed delivery transaction fails to deliver
or pay for the securities, the fund could suffer losses. Securities purchased by
the fund on a forward commitment basis may expose the fund to additional risks
because they may experience fluctuations in value prior to their actual delivery
date. For example, the yield available in the market on a debt security may be
higher at the time delivery takes places than the yield the fund obtained in the
forward commitment transaction itself. These transactions may result in a form
of leverage and increase the fund's overall investment risk.

NON-DIVERSIFICATION RISK. The fund is non-diversified and, as such, may invest a
greater percentage of its assets in the securities in a single issuer than a
fund that is diversified. A non-diversified fund is more susceptible to risks
associated with a single economic, political or regulatory occurrence than a
diversified fund.

MANAGEMENT RISK. The fund is an actively managed mutual fund. Any actively
managed mutual fund is subject to the risk that its investment adviser will make
poor security selections. The fund's investment adviser applies its own
investment techniques and risk analyses in making investment decisions for the
fund, but there can be no guarantee that they will produce the desired results.

INVESTMENTS IN EXCHANGE-TRADED FUNDS (ETFS). ETFs hold portfolios of securities
generally in proportion to the securities in a given market, sector or
international index. The fund may purchase shares of ETFs to gain exposure to a
particular portion of the market while awaiting an opportunity to purchase
securities directly. When the fund invests in an ETF, in addition to directly
bearing the expenses associated with its own operations, it will bear a pro rata
portion of the ETF's expenses. Therefore, it may be more costly to own an ETF
than to own the underlying securities directly. In addition, while the risks of
owning shares of an ETF generally reflect the risks of owning the underlying
securities the ETF is designed to track, lack of liquidity in an ETF can result
in its value being more volatile than the underlying portfolio securities.

                                                                               7


PERFORMANCE

Because the fund is new, no performance figures are given. This information will
appear in a future version of the fund's prospectus.

FUND FEES AND EXPENSES

The following table describes what you could expect to pay as a fund investor.
"Shareholder fees" are charged to you directly by the fund. "Annual operating
expenses" are paid out of fund assets, so their effect is included in the total
return for each share class.

FEE TABLE (%)

                                                                            
SHAREHOLDER FEES                                                        INVESTOR   SELECT
  (% of transaction amount)                                              SHARES   SHARES(R)
- --------------------------------------------------------------------------------------------
REDEMPTION FEE*                                                           2.00      2.00

ANNUAL OPERATING EXPENSES (% of average net assets)
- --------------------------------------------------------------------------------------------
Management fees                                                           0.90      0.90
Distribution (12b-1) fees                                                 None      None
Other expenses**                                                          0.46      0.31
                                                                        --------------------
Total annual operating expenses                                           1.36      1.21
Less expense reduction                                                   (0.16)    (0.16)
                                                                        --------------------
NET OPERATING EXPENSES***                                                 1.20      1.05
                                                                        --------------------



*   Charged only on shares you sell or exchange 30 days or less after buying
    them. Redemption fees are paid directly to the fund.

**  Other expenses are based on estimated amounts for the current fiscal year.

*** Schwab and the investment adviser have agreed to limit the "net operating
    expenses" (excluding interest, taxes and certain non-routine expenses) of
    the Investor Shares and the Select Shares to 1.20% and 1.05%, respectively,
    through 6/30/09.

EXAMPLE

Designed to help you compare expenses, the example below uses the same
assumptions as other mutual fund prospectuses: a $10,000 investment, a 5% return
each year and that the fund's operating expenses remain the same. The one-year
figures are based on net operating expenses. The expenses would be the same
whether you stayed in the fund or sold your shares at the end of each period.
Your actual costs may be higher or lower.

EXPENSES ON A $10,000 INVESTMENT



                                     1 year              3 years
- --------------------------------------------------------------------------------
                                              
INVESTOR SHARES                       $122                 $398
SELECT SHARES                         $107                 $352


8  Schwab Global Real Estate Fund TM


                  FUND MANAGEMENT

The fund's investment adviser, Charles Schwab Investment Management, Inc.,
(CSIM), has more than $171 billion under management.

                  The investment adviser for the fund is Charles Schwab
                  Investment Management, Inc., 101 Montgomery Street, San
                  Francisco, CA 94104. Founded in 1989, the firm today serves as
                  investment adviser for all of the Schwab Funds(R). The firm
                  manages assets for more than 5.6 million accounts. (All
                  figures on this page are as of 8/31/06.)

                  As the investment adviser, the firm oversees the asset
                  management and administration of the fund. As compensation for
                  these services, the firm receives a management fee from the
                  fund of 0.90% of the fund's average daily net assets not in
                  excess of $500 million, 0.88% of such assets over $500
                  million, and 0.86% of such assets over $1 billion.

                  JEFFREY MORTIMER, CFA, senior vice president and chief
                  investment officer-equities, of the investment adviser, is
                  responsible for the overall management of the fund. Prior to
                  joining the firm in October 1997, he worked for more than
                  eight years in asset management.

                  DIONISIO MENESES, JR., a managing director and portfolio
                  manager of the investment adviser, has day-to-day
                  co-responsibility for the management of the fund. He joined
                  the firm in 2007 and has worked in real estate research and
                  analysis since 1985.

                  DAVID SIOPACK, CFA, a managing director and portfolio manager
                  of the investment adviser, has day-to-day co-responsibility
                  for the management of the fund. He joined the firm in 2007 and
                  has worked in real estate research and analysis since 1993.

                  Additional information about the portfolio managers'
                  compensation, other accounts managed by the portfolio managers
                  and the portfolio managers' ownership of securities in the
                  fund is available in the Statement of Additional Information.

                                                                               9


                  INVESTING IN THE FUND

                  On the following pages, you will find information on buying,
                  selling and exchanging shares. You cannot place orders
                  directly with the fund. You may invest in the fund through an
                  intermediary by placing orders through your brokerage account
                  at Charles Schwab & Co., Inc. (Schwab account) or an account
                  with another broker/dealer, investment adviser, 401(k) plan,
                  employee benefit plan, administrator, bank, or other financial
                  intermediary (intermediary) that is authorized to accept
                  orders on behalf of the fund (intermediary orders). You also
                  will see how to choose a distribution option for your
                  investment. Helpful information on taxes is included as well.

10


PLACING INTERMEDIARY ORDERS

INVESTMENT MINIMUMS

CHOOSE A SHARE CLASS, then decide how much you want to invest. Your choice may
depend on the amount of your investment. The minimums shown below are for each
share class. The Select Shares have lower expenses than the Investor Shares. You
may convert your Investor Shares into Select Shares at any time if your account
balance in the fund is at least $50,000. You must contact your intermediary to
request an interclass exchange of your Investor Shares for Select Shares --
conversion is not automatic. If you no longer meet the minimum balance
requirement for Select Shares, the fund reserves the right to redeem your
shares. Please note that Select Shares may not be available through
intermediaries other than Charles Schwab & Co., Inc.



                          MINIMUM INITIAL           MINIMUM
SHARE CLASS               INVESTMENT                BALANCE
- ---------------------------------------------------------------
                                              
INVESTOR SHARES           $2,500 ($1,000 for        NONE
                          retirement, education
                          and custodial accounts.
                          On or about April 2,
                          2007, $100 for custodial
                          accounts.)


SELECT SHARES(R)          $50,000                   $40,000


Certain investment managers, including CSIM and managers in Schwab
Institutional, may aggregate the investments of their underlying customer
accounts for purposes of meeting the Select Shares initial minimum investment
and minimum balance requirements.

These minimums may be waived for certain retirement plans, including Schwab
Corporate Services retirement plans and plan participants, and for shareholders
who roll into an IRA from an exempted retirement plan. These minimums may also
be waived for certain other investors, including trustees, officers and
employees of Schwab, and for certain investment programs, including programs for
education savings or charitable giving. Schwab may receive other compensation
for providing services to these clients, investors and programs.

                                                                              11


DISTRIBUTION OPTIONS

CHOOSE AN OPTION FOR FUND DISTRIBUTIONS. The three options are described below.
If you don't indicate a choice, you will receive the first option.



OPTION                 FEATURES
- --------------------------------------------------------------
                    
REINVESTMENT           All dividends and capital gain
                       distributions are invested
                       automatically in shares of your share
                       class.


CASH/REINVESTMENT MIX  You receive payment for dividends,
                       while any capital gain distributions
                       are reinvested in shares of your share
                       class.


CASH                   You receive payment for all dividends
                       and capital gain distributions.


METHODS FOR PLACING ORDERS THROUGH YOUR INTERMEDIARY

To place intermediary orders to purchase, redeem or exchange shares of the fund,
you must have a Schwab account or an account with another intermediary. Please
contact your intermediary to learn how to place orders.

When you place intermediary orders, you are not placing your orders directly
with the fund, and you must follow Schwab's or the other intermediary's
transaction procedures. Your intermediary may impose different or additional
conditions than the fund on purchases, redemptions and exchanges of fund shares.
These differences may include initial, subsequent and maintenance investment
requirements, exchange policies, fund choices, cut-off times for investment and
trading restrictions. For example, Schwab's minimum additional investment
through an automatic investment plan is $100, even though the fund's minimum
additional investment is $1. Your intermediary may independently establish and
charge its customers transaction fees, account fees and other fees in addition
to the fees charged by the fund. These additional fees may vary over time and
would increase the cost of your investment and lower investment returns. You
should consult your intermediary directly for information regarding these
conditions and fees. The fund is not responsible for the failure of your
intermediary to carry out its responsibilities.

Schwab, the investment adviser and their affiliates may pay certain
intermediaries or their third party administrators for performing shareholder,
recordkeeping, administrative, accounting, transfer agency or other services for
their customers. In addition, Schwab, the investment adviser and their
affiliates may pay certain intermediaries for providing distribution, marketing,
promotional or other related services.

12  Investing in the fund


The payments described by this paragraph may be substantial but are paid by
Schwab, the investment adviser and their affiliates, not by the fund or its
shareholders.

BUYING SHARES

To purchase shares of the fund you must place your orders through your Schwab
account or through an account at another intermediary. You may not place orders
to purchase shares directly with the fund.

SELLING AND EXCHANGING SHARES

To redeem or exchange shares held in your Schwab account or in your account at
another intermediary, you must place your orders with the intermediary that
holds your shares. You may not place orders to redeem or exchange shares
directly with the fund.

When selling or exchanging shares, you should be aware of the following fund
policies:

The fund may take up to seven days to pay sale proceeds.

The fund reserves the right to honor redemptions in liquid portfolio securities
instead of cash when your redemptions over a 90-day period exceed $250,000 or 1%
of the fund's assets, whichever is less. You may incur transaction expenses in
converting these securities to cash.

Exchange orders are limited to other Schwab Funds(R) that are not Sweep
Investments(R) and must meet the minimum investment and other requirements for
the fund and share class into which you are exchanging.

You must obtain and read the prospectus for the fund into which you are
exchanging prior to placing your order.

                                                                              13


TRANSACTION POLICIES

THE FUND IS OPEN FOR BUSINESS EACH DAY THAT THE NYSE IS OPEN. The fund
calculates the share price for each of its share classes each business day as of
the close of the NYSE (generally 4 p.m. Eastern time). The fund's share price is
its net asset value per share, or NAV, which is the fund's net assets divided by
the number of its shares outstanding. Orders to buy, sell or exchange shares
that are received in good order on or prior to the close of the fund (generally
4 p.m. Eastern time) will be executed at the next share price calculated that
day.

If you place an order through your Schwab account or through your account at
another intermediary, please consult with that intermediary to determine when
your order will be executed. Generally, you will receive the share price next
calculated after the fund received your order from your intermediary. However,
some intermediaries, such as Schwab, may arrange with the fund for you to
receive the share price next calculated after your intermediary has received
your order. Some intermediaries may require that they receive orders prior to a
specified cut-off time.

Orders to buy shares that are accepted prior to the close of the fund on a given
day generally will receive the next business day's dividend. Orders to sell or
exchange share that are accepted and executed prior to the close of the fund on
a given day generally will receive that day's dividend.

In valuing its securities, the fund uses market quotes or official closing
prices if they are readily available. In cases where quotes are not readily
available, or the adviser deems them to be unreliable, the fund may value
securities based on fair values developed using methods approved by the fund's
Board of Trustees.

Shareholders should be aware that because foreign markets are often open on
weekends and other days when the fund is closed, the value of the fund's
portfolio may change on days when it is not possible to buy or sell shares of
the fund.

THE FUND RESERVES CERTAIN RIGHTS REGARDING TRANSACTION POLICIES AND IT INCLUDES
THE FOLLOWING:

- - To automatically redeem your shares upon 60 days' written notice if the value
  of your investment in a fund falls below the stated minimum balance
  requirement for the fund or share class, as applicable.

- - To materially modify or terminate the exchange privilege upon 60 days' written
  notice to shareholders.

- - To change or waive a fund's or share class' investment minimums.

14  Investing in the fund


- - To suspend the right to sell shares back to a fund, and delay sending
  proceeds, during times when trading on the NYSE is restricted or halted, or
  otherwise as permitted by the SEC.

- - To withdraw or suspend any part of the offering made by this prospectus.

POLICY REGARDING SHORT-TERM OR EXCESSIVE TRADING. The fund is intended for
long-term investment and not for short-term or excessive trading (collectively
"market timing"). Market timing may adversely impact the fund's performance by
disrupting the efficient management of the fund, increasing fund transaction
costs and taxes, causing the fund to maintain higher cash balances, and diluting
the value of the fund's shares.

The fund's Board of Trustees has adopted policies and procedures that are
designed to reduce the risk of market timing by fund shareholders. The fund
seeks to deter market timing through several methods. These methods may include:
trade activity monitoring; redemption fees; and fair value pricing. Although
these methods are designed to discourage market timing, there can be no
guarantee that the fund will be able to identify and restrict investors that
engage in such activities. In addition, these methods (other than redemption
fees) are inherently subjective and involve judgment in their application. The
fund and its service providers seek to make these judgments and applications
uniformly and in a manner that they believe is consistent with interests of the
fund's long-term shareholders. The fund may amend these policies and procedures
in response to changing regulatory requirements or to enhance the effectiveness
of the program.

TRADE ACTIVITY MONITORING. The fund, through its service providers, maintains
trade activity monitoring procedures with respect to the purchase, sale and
exchange of fund shares. This process involves reviewing transactions that
exceed certain monetary thresholds within specified time intervals. Trading
activity identified by these factors, or from other information then available
(such as the actual trading pattern or dollar amount of the transactions), will
be evaluated to determine whether such activity is detrimental to the fund.

If, as a result of this trade activity monitoring, the fund believes that a
shareholder has engaged in market timing, it may, in its sole discretion,
request the shareholder to stop such market timing activities or refuse to
process purchases or exchanges in the shareholder's account. The fund
specifically reserves the right to reject any purchase or exchange orders by any
investor or group of investors indefinitely for any reason. Transactions placed
in contravention of the fund's market timing policies are not necessarily deemed
accepted by the fund and may be canceled or revoked by the fund on the next
business day following receipt by the fund.

                                                                              15


Fund shares may be held through 401(k) and other group retirement plans and
other omnibus arrangements maintained by other intermediaries. Omnibus accounts
allow intermediaries to aggregate their customers' investments in one account
and to purchase, redeem and exchange fund shares without the identity of a
particular customer being known to the fund. A number of these financial
intermediaries may not have the capability or may not be willing to apply the
fund's market timing policies. As a result, the fund cannot assure that its
policies will be enforced with regard to fund shares held through such omnibus
arrangements. While the fund may monitor share turnover at the omnibus account
level, the fund's ability to monitor and detect market timing by particular
shareholders in these omnibus accounts is limited, and, therefore, the fund may
not be able to determine whether trading by these shareholders is contrary to
the fund's market timing policies.

REDEMPTION FEES. The fund may impose a short-term redemption fee on any fund
shares that are redeemed or exchanged by a shareholder within a specified number
of days, as detailed below, of the purchase date. The funds impose the
redemption fees in an effort to deter short-term trading, to facilitate
efficient fund management, to minimize the impact on fund performance and to
offset fund transaction costs and other expenses. The fund charges a redemption
fee of 2.00% on shares sold or exchanged 30 days or less after purchasing them.
These fees may be imposed to the extent the shares redeemed exceed the number of
shares that have been held more than 30 days. The fund treats shares that have
been held the longest as being redeemed first and shares that have been held the
shortest as being redeemed last. Fund shares purchased with reinvested dividends
are not subject to redemption fees. The fund retains the redemption fees for the
benefit of the remaining shareholders. There is no redemption fee when you
exchange between share classes of the same fund.

As noted above, the fund shares may be held in omnibus accounts by financial
intermediaries. Currently, only certain intermediaries have the systems
capability to collect the redemption fees on behalf of the fund. Even
intermediaries that do have the capability may use criteria and methods for
tracking, applying and calculating the fees that are different from those of the
fund or may be unwilling to collect the fees. As such, the fund may not be able
to collect redemption fees through these intermediaries. The fund notifies all
financial intermediaries of its policy and will encourage all financial
intermediaries to develop the capability to begin collecting the redemption fees
from all of their customers that invest in the fund.

The fund reserves the right to waive its redemption fee if the fund or its
service providers believe that such waivers are consistent with the best
interests of the fund and its long-term shareholders. For example,

16  Investing in the fund


the redemption fees may not be assessed in the following non-exclusive list of
transactions: redemptions by tax-advantaged retirement plans; redemptions by
certain fee-based or wrap programs; redemptions pursuant to rebalancing programs
or systematic withdrawal plans established with the fund or financial
intermediaries; redemptions by charitable giving funds; redemptions by
registered investment companies; and redemptions initiated by the fund. The fund
also reserves the right to modify or eliminate the redemption fees or waivers at
any time.

FAIR VALUE PRICING. The Board of Trustees has adopted procedures to fair value
the fund's securities when market prices are not "readily available" or are
unreliable. For example, the fund may fair value a security when a security is
de-listed or its trading is halted or suspended; when a security's primary
pricing source is unable or unwilling to provide a price; when a security's
primary trading market is closed during regular market hours; or when a
security's value is materially affected by events occurring after the close of
the security's primary trading market.

By fair valuing securities whose prices may have been affected by events
occurring after the close of trading, the fund seeks to establish prices that
investors might expect to realize upon the current sales of these securities.
This methodology is designed to deter "arbitrage" market timers, who seek to
exploit delays between the change in the value of the fund's portfolio holdings
and the net asset value of the fund's shares, and seeks to ensure that the
prices at which the fund's shares are purchased and redeemed are fair and do not
result in dilution of shareholder interest or other harm to shareholders.

The fund makes fair value determinations in good faith in accordance with the
fund's valuation procedures. Due to the subjective and variable nature of fair
value pricing, there can be no assurance that the fund could obtain the fair
value assigned to the security upon the sale of such security.

PORTFOLIO HOLDINGS INFORMATION. A description of the fund's policies and
procedures with respect to the disclosure of the fund's portfolio securities is
available in the fund's Statement of Additional Information.

                                                                              17


- --------------------------------------------------------------------------------
MORE ON QUALIFIED DIVIDEND INCOME AND DISTRIBUTIONS

Dividends that are designated by the fund as qualified dividend income are
eligible for a reduced maximum tax rate. Qualified dividend income is, in
general, dividend income from taxable domestic corporations and certain foreign
corporations. Dividend income that the fund received from REITs, if any,
generally will not be treated as qualified dividend income.

If you are investing through a taxable account and purchase shares of the fund
just before it declares a distribution, you may receive a portion of your
investment back as a taxable distribution. This is because when the fund makes a
distribution, the share price is reduced by the amount of the distribution.

You can avoid "buying a dividend," as it is often called, by finding out if a
distribution is imminent and waiting until afterwards to invest. Of course, you
may decide that the opportunity to gain a few days of investment performance
outweighs the tax consequences of buying a dividend.
- --------------------------------------------------------------------------------


DISTRIBUTIONS AND TAXES

ANY INVESTMENT IN THE FUND TYPICALLY INVOLVES SEVERAL TAX CONSIDERATIONS. The
information below is meant as a general summary for U.S. citizens and residents.
Because each person's tax situation is different, you should consult your tax
advisor about the tax implications of your investment in the fund. You also can
visit the Internal Revenue Service (IRS) web site at www.irs.gov.

AS A SHAREHOLDER, YOU ARE ENTITLED TO YOUR SHARE OF THE DIVIDENDS AND GAINS THE
FUND EARNS. Every year, the fund distributes to its shareholders substantially
all of its net investment income and net capital gains, if any. Income
distributions are paid at the end of every calendar quarter, and net capital
gains, if any are paid in December, to all shareholders of record. During the
fourth quarter of the year, typically in early November, an estimate of the
fund's year-end distributions, if any, may be made available on the fund's
website: www.schwab.com/schwabfunds.

UNLESS YOU ARE INVESTING THROUGH AN IRA, 401(K) OR OTHER TAX-ADVANTAGED
RETIREMENT ACCOUNT, FUND DISTRIBUTIONS GENERALLY HAVE TAX CONSEQUENCES. The
fund's net investment income and short-term capital gains are distributed as
dividends and will be taxable as ordinary income or qualified dividend income.
Other capital gain distributions are taxable as long-term capital gains,
regardless of how long you have held your shares in the fund. Absent further
legislation, the reduced maximum rates on qualified dividend income and
long-term capital gains will cease to apply to taxable years beginning after
December 31, 2010. Distributions generally are taxable in the tax year in which
they are declared, whether you reinvest them or take them in cash.

GENERALLY, ANY SALE OR EXCHANGE OF YOUR SHARES IS A TAXABLE EVENT. For tax
purposes, an exchange of your shares for shares of another Schwab Fund is
treated the same as a sale. An exchange between classes within the fund is not
reported as a taxable sale. A sale may result in a capital gain or loss for you.
The gain or loss generally will be treated as short term if you held the shares
for 12 months or less, long term if you held the shares longer.

AT THE BEGINNING OF EVERY YEAR, THE FUND WILL PROVIDE SHAREHOLDERS WITH A TAX
REPORTING STATEMENT CONTAINING INFORMATION DETAILING THE ESTIMATED TAX STATUS OF
ANY DISTRIBUTIONS THAT THE FUND PAID DURING THE PREVIOUS CALENDAR YEAR. Schwab
customers also receive information on distributions and transactions in their
monthly account statements. REITs in which the fund invests often do not provide
complete and final tax information to the fund until after the time that the
fund issues the tax reporting statement. As a result, the fund may at times find
it necessary to reclassify the amount and character of its distributions to you
after it issues your tax reporting statement. When

18  Investing in the fund


such reclassification is necessary, the fund will send you a corrected, final
Form 1099-DIV to reflect reclassified information. If you receive a corrected
Form 1099-DIV, use the information on this corrected form, and not the
information on the previously issued tax reporting statement, in completing your
tax returns.

SCHWAB CUSTOMERS WHO SELL FUND SHARES typically will receive a report that
calculates their gain or loss using the "average cost" single-category method.
This information is not reported to the IRS, and you still have the option of
calculating gains or losses using any other methods permitted by the IRS.

                                                                              19


   TO LEARN MORE

   This prospectus contains important information on the funds and should be
   read and kept for reference. You also can obtain more information from the
   following sources.

   ANNUAL AND SEMI-ANNUAL REPORTS, which are mailed to current fund investors,
   contain more information about the fund's holdings and detailed financial
   information about the fund. Annual reports also contain information from the
   fund's manager about strategies, recent market conditions and trends and
   their impact on fund performance.

   The STATEMENT OF ADDITIONAL INFORMATION (SAI) includes a more detailed
   discussion of investment policies and the risks associated with various
   investments. The SAI is incorporated by reference into the prospectus, making
   it legally part of the prospectus.

   For a free copy of any of these documents or to request other information or
   ask questions about the funds, call Schwab Funds(R) at 1-800-435-4000. In
   addition, you may visit Schwab Funds' web site at www.schwab.com/schwabfunds
   for a free copy of a prospectus, SAI, or an annual or semi-annual report.

   The SAI, the fund's annual and semi-annual reports and other related
   materials are available from the EDGAR Database on the SEC's web site
   (http://www.sec.gov). You can obtain copies of this information, after paying
   a duplicating fee, by sending a request by e-mail to publicinfo@sec.gov or by
   writing the Public Reference Section of the SEC, Washington, D.C. 20549-0102.
   You can also review and copy information about the funds, including the
   funds' SAI, at the SEC's Public Reference Room in Washington, D.C. Call
   1-202-551-8090 for information on the operation of the SEC's Public Reference
   Room.



   SEC FILE NUMBER

                                   
    Schwab Global Real Estate Fund            811-6200

    




   REG36895FLT

SCHWAB GLOBAL REAL ESTATE FUND TM

PROSPECTUS
February 28, 2007

                                                           [CHARLES SCHWAB LOGO]