-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Thx4J5+K9NRzrZn+w618ucXOeA2YxFPXGIaNQk24+Tp4NvqkgBdZ5UqBBKcQTtkl mOjB/70j+D4/i+zAjYLuEg== 0000950149-01-000011.txt : 20010122 0000950149-01-000011.hdr.sgml : 20010122 ACCESSION NUMBER: 0000950149-01-000011 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001031 FILED AS OF DATE: 20010104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHWAB INVESTMENTS CENTRAL INDEX KEY: 0000869365 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06200 FILM NUMBER: 1501494 BUSINESS ADDRESS: STREET 1: 101 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 4156277000 MAIL ADDRESS: STREET 1: 101 MONTGOMERY ST STREET 2: 101 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94104 N-30D 1 f67452in-30d.txt SCHWAB EQUITY INDEX ANNUAL EPORT 1 IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS SCHWAB EQUITY INDEX FUNDS October 31, 2000 Annual Report enclosed SCHWAB S&P 500 FUND SCHWAB 1000 FUND(R) SCHWAB SMALL-CAP INDEX FUND(R) SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) SCHWAB INTERNATIONAL INDEX FUND(R) [CHARLESSCHWAB LOGO] 2 IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS The Securities and Exchange Commission (SEC) permits mutual funds to deliver only one copy of shareholder documents, including prospectuses and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is commonly called "householding" and is intended to eliminate duplicate mailings of shareholder documents. MAILING OF YOUR SCHWABFUNDS(R) SHAREHOLDER DOCUMENTS MAY BE HOUSEHOLDED INDEFINITELY UNLESS YOU INSTRUCT US OTHERWISE. ADDITIONAL COPIES OF SHAREHOLDER DOCUMENTS All SchwabFunds prospectuses and shareholder reports are available free of charge and may be requested at any time by calling Schwab as indicated below. SchwabFunds prospectuses are also available on our Web site at www.schwab.com/schwabfunds. If you would prefer that your SchwabFunds mailings not be householded, please contact: SCHWAB SIGNATURE SERVICES(TM) CLIENTS Schwab Signature Services. INVESTMENT MANAGER CLIENTS Schwab at 1-800-515-2157, or your investment manager. ALL OTHER CLIENTS Schwab at 1-800-435-4000. Your instructions that householding not apply to your accounts holding SchwabFunds will be effective within 30 days of receipt by Schwab. 3 SCHWAB EQUITY INDEX FUNDS October 31, 2000 Annual Report [Photo of Two Men Talking] SCHWAB S&P 500 FUND SCHWAB 1000 FUND(R) SCHWAB SMALL-CAP INDEX FUND(R) SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) SCHWAB INTERNATIONAL INDEX FUND(R) [CHARLESSCHWAB LOGO] 4 [CHARLES SCHWAB PHOTO] Dear Shareholder, We're pleased to bring you the first report for these funds that uses our new "plain English" format. This format is part of a major initiative to make SchwabFunds(R) materials easier to use. We've given the report a simpler organization and a new look. Our goal has been to focus on presenting information clearly and explaining what it means to shareholders. The most significant change is the new section on how to read and understand the report's financial data. We've even found ways to make the financial statements and notes more accessible. We will continue to actively look for ways to improve these reports even further. We hope you find this report helpful and we welcome your feedback. Thank you for choosing SchwabFunds. Sincerely, /s/ Charles Schwab -------------------------------- Charles Schwab SCHWAB EQUITY INDEX FUNDS ANNUAL REPORT November 1, 1999 - October 31, 2000 1 Market Overview 5 Schwab S&P 500 Fund For the first time in five years, large-cap stocks did not lead the market. 23 Schwab 1000 Fund(R) Exposure to mid-cap stocks helped the fund weather a shifting market environment. 46 Schwab Small-Cap Index Fund(R) Small-cap stocks had a highly volatile year, but ended the report period ahead of mid- and large-cap stocks. 69 Schwab Total Stock Market Index Fund(TM) Factors affecting performance included evidence of a slowing economy and exposure to a wide range of market capitalizations. 116 Schwab International Index Fund(R) While foreign stocks performed adequately when measured in local currencies, a rising dollar changed the picture for American investors. 131 Financial Notes 136 Proxy Results _______________________________________________________________________ 139 HOW TO READ THIS REPORT An illustrated guide to the financials, along with a glossary. 5 MARKET OVERVIEW GROWTH PERIOD IS THE LONGEST IN U.S. HISTORY. As of October 31, 2000, U.S. economic expansion was in the middle of its tenth year, marking the longest period of continuous growth in U.S. history. The main force behind the expansion has been high levels of consumer spending, fueled by increases in personal income, personal wealth and consumer confidence. The pace of economic growth remained robust through the second quarter of 2000, then moderated somewhat in the third quarter, in part due to reduced government spending. Actual Q3 growth was lower than many analysts had expected. Although energy prices soared, inflation still appears to remain in check. The GDP price deflator, a widely used inflation indicator, declined slightly from 2.4% in the second quarter to 2.0% in the third quarter. Source: Bloomberg L.P. PRODUCTIVITY EMERGES AS A KEY FACTOR. [PHOTO OF ASSEMBLY LINE] In recent years, the Federal Reserve Bank (the Fed) demonstrated its resolve to moderate the pace of the economy's growth by raising short-term interest rates (since June 1999, it has raised these rates six times). The Fed has voiced concern that increases in wages could outpace gains in productivity, forcing companies to boost prices and potentially sparking inflation. ASSET CLASS PERFORMANCE COMPARISON % returns during the report period This graph compares the performance of four widely used measures of securities market performance, including U.S. stocks and bonds and international stocks. [LINE GRAPH]
LEHMAN BROTHERS U.S. AGGREGATE MSCI-EAFE(R) RUSSELL 2000(R) S&P 500(R) BOND INDEX INDEX INDEX INDEX ---------- ------- ----- ----- 11/5/99 0.0061 0.005 0.0323 0.0054 11/12/99 0.0073 0.02 0.0495 0.0244 11/19/99 0.0032 0.039 0.0762 0.0435 11/26/99 0.0011 0.052 0.0708 0.0395 12/3/99 0.0015 0.053 0.0843 0.0522 12/10/99 0.0078 0.067 0.0894 0.041 12/17/99 -0.003 0.068 0.0889 0.0439 12/24/99 -0.0061 0.107 0.1268 0.0713 12/31/99 -0.0051 0.126 0.1796 0.0804 1/7/00 -0.0057 0.074 0.1415 0.06 1/14/00 -0.0103 0.101 0.1867 0.0774 1/21/00 -0.0119 0.076 0.2483 0.0599 1/28/00 -0.0052 0.071 0.1801 0.0002 2/4/00 -0.0039 0.093 0.2292 0.0481 2/11/00 -0.0068 0.1 0.2568 0.0207 2/18/00 -0.0015 0.083 0.277 -0.0095 2/25/00 0.005 0.092 0.3029 -0.0189 3/3/00 0.0068 0.115 0.4004 0.0381 3/10/00 0.0048 0.114 0.4137 0.0277 3/17/00 0.0118 0.101 0.3458 0.0788 3/24/00 0.0105 0.123 0.3449 0.1251 3/31/00 0.0168 0.121 0.2632 0.1049 4/7/00 0.0249 0.11 0.2726 0.118 4/14/00 0.0242 0.071 0.064 0.0002 4/21/00 0.0233 0.062 0.1297 0.0577 4/28/00 0.0138 0.061 0.1872 0.0717 5/5/00 -0.0004 0.057 0.203 0.0571 5/12/00 -0.0017 0.046 0.1521 0.0485 5/19/00 0.0003 0.008 0.1258 0.0381 5/26/00 0.0112 0.014 0.0738 0.0168 6/2/00 0.023 0.081 0.2045 0.0916 6/9/00 0.0262 0.079 0.2287 0.0766 6/16/00 0.0349 0.075 0.2075 0.0822 6/23/00 0.0253 0.065 0.2002 0.0652 6/30/00 0.0344 0.073 0.2155 0.0757 7/7/00 0.0391 0.083 0.2406 0.0937 7/14/00 0.0376 0.079 0.2748 0.1166 7/21/00 0.0434 0.055 0.228 0.0946 7/28/00 0.0433 0.02 0.152 0.0501 8/4/00 0.0513 0.016 0.1839 0.0827 8/11/00 0.0531 0.031 0.2002 0.0893 8/18/00 0.0544 0.039 0.2129 0.104 8/25/00 0.0584 0.046 0.2359 0.115 09/01/00 0.0616 0.057 0.2758 0.127 9/8/00 0.0606 0.014 0.2598 0.1075 9/15/00 0.0588 -0.009 0.2506 0.0862 9/22/00 0.0613 -0.024 0.2224 0.0735 9/29/00 0.0657 -0.017 0.2293 0.0653 10/6/00 0.0654 -0.02 0.1579 0.0448 10/13/00 0.0692 -0.051 0.1332 0.019 10/20/00 0.0749 -0.052 0.15 0.0361 10/27/00 0.0736 -0.037 0.1321 0.0233 10/31/00 0.073 -0.029 0.1741 0.0609
These figures assume dividends and distributions were reinvested. Index figures don't include trading and management costs, which would lower performance. Indices are unmanaged and you can't invest in them directly. Remember that past performance isn't an indication of future results. Data source: Charles Schwab & Co., Inc. (Schwab). 1 6 MARKET OVERVIEW Continued Productivity gains are important because they enable companies to achieve greater output for every dollar spent for labor costs. Spurred mainly by technological advances, productivity grew at 4.0% during the first half of 2000 and 3.3% during the third quarter (these figures include all economic sectors except farming). However, third quarter productivity gains were partially offset by a 2.5% increase in unit labor costs -- costs that had declined in the previous quarter. Source: Bloomberg L.P. UNEMPLOYMENT HITS NEW LOWS, YET INFLATION REMAINS AT BAY. The unemployment rate has been trending downward for years. In April it fell below 4% -- the lowest level in 30 years and one previously considered improbable without high inflation. [PHOTO OF WELDER] Overall, labor markets continue to be extremely tight, and there has been evidence in some regions of labor shortages driving up wages. In spite of these regional trends, overall increases in prices and wages during the report period were relatively modest, due in part to strong productivity gains. However, an upturn in labor costs may make the Fed more sensitive to other potential signs of inflation. STOCKS STUMBLE, RECOVER; MOST BONDS POST HEALTHY RETURNS. U.S. equities, as measured by the major indices (chart, page 1) had positive returns for the report period. By historical standards, they also remained highly valued (P/E chart, page 4). FIVE FACTORS AND THEIR EFFECTS ON THESE FUNDS. The following charts show recent figures for four common measures of the state of the U.S. economy and the stock market, as well as one measure of international stock performance. While the relationship of each of these factors to the performance of the funds is complex, the captions over each chart and the discussion above include analysis of how we believe these factors may have influenced market behavior during the report period. REAL GDP GROWTH Annualized growth rate for each quarter shown The U.S. economy has grown steadily for more than nine years. Real GDP grew at a 2.4% annualized rate in Q3 2000 -- slower than the 5.2% for the first half of the year. [BAR CHART] Dec-90 -3.2 Mar-91 -2 Jun-91 2.3 Sep-91 1 Dec-91 2.2 Mar-92 3.8 Jun-92 3.8 Sep-92 3.1 Dec-92 5.4 Mar-93 -0.1 Jun-93 2.5 Sep-93 1.8 Dec-93 6.2 Mar-94 3.4 Jun-94 5.7 Sep-94 2.2 Dec-94 5 Mar-95 1.5 Jun-95 0.8 Sep-95 3.1 Dec-95 3.2 Mar-96 2.9 Jun-96 6.8 Sep-96 2 Dec-96 4.6 Mar-97 4.4 Jun-97 5.9 Sep-97 4.2 Dec-97 2.8 Mar-98 6.5 Jun-98 2.9 Sep-98 3.4 Dec-98 5.6 Mar-99 3.5 Jun-99 2.5 Sep-99 5.7 Dec-99 8.3 Mar-00 4.8 Jun-00 5.6 Sep-00 2.4
Gross domestic product (GDP), a broad measure of the goods and services produced in the United States during a given time period, is a prime indicator of the health of the country's economy. Typically, stock investors see increases in GDP as a positive, since it indicates stronger demand, production and corporate earnings. The figures shown here are adjusted for inflation. Data source: Bloomberg L.P. 2 7 ________________________________________________________________________________ "Old economy" stocks and value stocks regained popularity as many newer company stocks fell. ________________________________________________________________________________ However, the report period saw extreme volatility in the stock market, particularly for U.S. stocks. In March and April, the P/E for the Nasdaq 100 Index lost one-third of its value in just a two-week period. (The Nasdaq 100 Index reflects 100 of the largest Nasdaq companies across major industry groups, including computers, telecommunications, retail/wholesale and biotechnology, but excluding financial companies.) Volatility continued through the end of the report period as investors shifted their focus from hard-hit sectors such as technology to undervalued and established companies. Outside the U.S., stocks were held back by uncertainty over oil prices and corporate earnings. For U.S. investors, the continued rise of the dollar against the euro and yen was a factor as well, because it eroded the dollar value of foreign stocks. A major factor for bonds during the report period was the U.S. Treasury's decision to use some of the budget surplus to buy back its own bonds. This created a major change in the picture for supply and demand of bonds, and resulted in an inverted yield curve (a situation where short-term bonds actually pay higher yields than long-term [PHOTO OF STOCK EXCHANGE] U.S. UNEMPLOYMENT RATE Adjusted for seasonal variations Unemployment hit a three-decade low of 3.9% in April. Although it trended up to 4.1% during the summer months, it closed the reporting period back at 3.9%. [LINE GRAPH] Sep-90 5.9 Oct-90 5.9 Nov-90 6.2 Dec-90 6.3 Jan-91 6.4 Feb-91 6.6 Mar-91 6.8 Apr-91 6.7 May-91 6.9 Jun-91 6.9 Jul-91 6.8 Aug-91 6.9 Sep-91 6.9 Oct-91 7 Nov-91 7 Dec-91 7.3 Jan-92 7.3 Feb-92 7.4 Mar-92 7.4 Apr-92 7.4 May-92 7.6 Jun-92 7.8 Jul-92 7.7 Aug-92 7.6 Sep-92 7.6 Oct-92 7.3 Nov-92 7.4 Dec-92 7.4 Jan-93 7.3 Feb-93 7.1 Mar-93 7 Apr-93 7.1 May-93 7.1 Jun-93 7 Jul-93 6.9 Aug-93 6.8 Sep-93 6.7 Oct-93 6.8 Nov-93 6.6 Dec-93 6.5 Jan-94 6.8 Feb-94 6.6 Mar-94 6.5 Apr-94 6.4 May-94 6.1 Jun-94 6.1 Jul-94 6.3 Aug-94 6 Sep-94 5.8 Oct-94 5.8 Nov-94 5.6 Dec-94 5.5 Jan-95 5.6 Feb-95 5.4 Mar-95 5.4 Apr-95 5.8 May-95 5.6 Jun-95 5.6 Jul-95 5.7 Aug-95 5.7 Sep-95 5.6 Oct-95 5.5 Nov-95 5.6 Dec-95 5.6 Jan-96 5.7 Feb-96 5.5 Mar-96 5.5 Apr-96 5.5 May-96 5.6 Jun-96 5.3 Jul-96 5.5 Aug-96 5.1 Sep-96 5.2 Oct-96 5.2 Nov-96 5.4 Dec-96 5.4 Jan-97 5.3 Feb-97 5.3 Mar-97 5.2 Apr-97 5 May-97 4.9 Jun-97 5 Jul-97 4.8 Aug-97 4.8 Sep-97 4.9 Oct-97 4.7 Nov-97 4.6 Dec-97 4.7 Jan-98 4.7 Feb-98 4.6 Mar-98 4.7 Apr-98 4.3 May-98 4.4 Jun-98 4.5 Jul-98 4.5 Aug-98 4.5 Sep-98 4.5 Oct-98 4.5 Nov-98 4.4 Dec-98 4.4 Jan-99 4.3 Feb-99 4.4 Mar-99 4.2 Apr-99 4.3 May-99 4.2 Jun-99 4.3 Jul-99 4.3 Aug-99 4.2 Sep-99 4.2 Oct-99 4.1 Nov-99 4.1 Dec-99 4.1 Jan-00 4 Feb-00 4.1 Mar-00 4.1 Apr-00 3.9 May-00 4.1 Jun-00 4 Jul-00 4 Aug-00 4.1 Sep-00 3.9 Oct-00 3.9
This measures the portion of the U.S. labor force that is unemployed and is either seeking a job or waiting to return to one. Low unemployment often accompanies prosperity and is generally a positive factor for investors, although very low unemployment may boost inflation as employers raise pay to compete for workers. Rising unemployment may mean a softening economy. Data source: Bloomberg L.P. MEASURES OF INFLATION Annualized figures for the Consumer Price Index (monthly) and Employment Cost Index (quarterly) CPI was up 3.4% for the 12 months ended October 31, 2000 (2.5% if food and energy are excluded). ECI rose 4.3% for the 12 months ended September 30, 2000. [LINE GRAPH]
Date CPI ECI - ---- --- --- Sep-90 6.2 5.2 Oct-90 6.4 5.2 Nov-90 6.3 5.2 Dec-90 6.3 4.9 Jan-91 5.6 4.9 Feb-91 5.3 4.9 Mar-91 4.9 4.6 Apr-91 4.8 4.6 May-91 5 4.6 Jun-91 4.7 4.6 Jul-91 4.4 4.6 Aug-91 3.8 4.6 Sep-91 3.4 4.3 Oct-91 2.8 4.3 Nov-91 3.1 4.3 Dec-91 3 4.3 Jan-92 2.7 4.3 Feb-92 2.8 4.3 Mar-92 3.2 4 Apr-92 3.2 4 May-92 3 4 Jun-92 3 3.6 Jul-92 3.2 3.6 Aug-92 3.1 3.6 Sep-92 3 3.5 Oct-92 3.3 3.5 Nov-92 3.1 3.5 Dec-92 3 3.5 Jan-93 3.2 3.5 Feb-93 3.2 3.5 Mar-93 3 3.5 Apr-93 3.2 3.5 May-93 3.2 3.5 Jun-93 3 3.6 Jul-93 2.8 3.6 Aug-93 2.8 3.6 Sep-93 2.8 3.6 Oct-93 2.8 3.6 Nov-93 2.7 3.6 Dec-93 2.8 3.5 Jan-94 2.5 3.5 Feb-94 2.5 3.5 Mar-94 2.6 3.2 Apr-94 2.4 3.2 May-94 2.3 3.2 Jun-94 2.5 3.2 Jul-94 2.7 3.2 Aug-94 2.9 3.2 Sep-94 3 3.2 Oct-94 2.6 3.2 Nov-94 2.7 3.2 Dec-94 2.6 3 Jan-95 2.8 3 Feb-95 2.9 3 Mar-95 2.9 2.9 Apr-95 2.8 2.9 May-95 3.1 2.9 Jun-95 3 2.9 Jul-95 2.8 2.9 Aug-95 2.6 2.9 Sep-95 2.5 2.7 Oct-95 2.8 2.7 Nov-95 2.6 2.7 Dec-95 2.6 2.8 Jan-96 2.7 2.8 Feb-96 2.7 2.8 Mar-96 2.9 2.8 Apr-96 2.8 2.8 May-96 2.9 2.8 Jun-96 2.8 2.9 Jul-96 2.9 2.9 Aug-96 2.8 2.9 Sep-96 3 2.8 Oct-96 3 2.8 Nov-96 3.2 2.8 Dec-96 3.2 2.9 Jan-97 3 2.9 Feb-97 3 2.9 Mar-97 2.8 2.9 Apr-97 2.5 2.9 May-97 2.2 2.9 Jun-97 2.3 2.8 Jul-97 2.2 2.8 Aug-97 2.2 2.8 Sep-97 2.2 3 Oct-97 2.1 3 Nov-97 1.9 3 Dec-97 1.7 3.3 Jan-98 1.6 3.3 Feb-98 1.4 3.3 Mar-98 1.4 3.3 Apr-98 1.5 3.3 May-98 1.7 3.3 Jun-98 1.6 3.5 Jul-98 1.7 3.5 Aug-98 1.7 3.5 Sep-98 1.4 3.7 Oct-98 1.4 3.7 Nov-98 1.5 3.7 Dec-98 1.6 3.4 Jan-99 1.7 3.4 Feb-99 1.7 3.4 Mar-99 1.8 3 Apr-99 2.3 3 May-99 2.1 3 Jun-99 2 3.2 Jul-99 2.1 3.2 Aug-99 2.3 3.2 Sep-99 2.6 3.1 Oct-99 2.6 3.1 Nov-99 2.6 3.1 Dec-99 2.7 3.4 Jan-00 2.7 3.4 Feb-00 3.2 3.4 Mar-00 3.8 4.3 Apr-00 3.1 4.3 May-00 3.2 4.3 Jun-00 3.7 4.4 Jul-00 3.7 4.4 Aug-00 3.4 4.4 Sep-00 3.5 4.3 Oct-00 3.4
The Consumer Price Index (CPI) tracks changes in the cost of goods and services and is the most common measure of inflation. The Employment Cost Index (ECI) measures the cost of employing workers, including benefits costs. Financial markets are very sensitive to increases in inflation because of the potentially negative impact on corporate earnings, investors and consumers. Data source: Bloomberg L.P. 3 8 MARKET OVERVIEW Continued bonds). While short-term interest rates rose during the report period, intermediate and long-term rates actually fell. Although these events were comparatively unusual, their net effect on performance was generally positive for bond investments. LOOKING AHEAD: GROWTH MAY CONTINUE, BUT RATE MAY SLOW. Through its aggressive tightening of short-term interest rates in late 1999 and the first half of 2000, the Fed has sought to slow the economy to a "soft landing" -- a growth rate that is high enough to avoid recession but not so high as to tempt inflation. [PHOTO OF PEOPLE OUTSIDE SHOPS] Recent evidence indicates that economic growth has indeed slowed from its torrid pace of the first half of 2000. ________________________________________________________________________________ The consensus among economists is that the U.S. economy appears poised for continued growth, albeit at lower rates than those of the past few years. ________________________________________________________________________________ Source: Schwab. The question remains whether the slowdown is only a temporary condition prompted by a build-up of manufacturing inventories or is the "soft landing" desired by the Fed. Factors to watch may include consumer spending and employer competition for workers. If the slowdown is in fact the desired "soft landing," we would expect to see a slackening in one or both of these factors. S&P 500(R) PRICE/EARNINGS RATIO (P/E) Dollar-weighted average P/E for all stocks in the index Despite the recent downturn in stocks, the P/E ratio of the S&P 500 ended the report period at 25.6, a level still significantly above the 30-year average of 15.8. [LINE GRAPH]
S&P 500 P/E RATIO S&P 500 P/E RATIO 30-YEAR AVERAGE ----------------- ----------------- Sep-90 14.34 15.8 Oct-90 14.67 15.8 Nov-90 14.65 15.8 Dec-90 15.28 15.8 Jan-91 15.55 15.8 Feb-91 16.87 15.8 Mar-91 17.56 15.8 Apr-91 17.77 15.8 May-91 18.23 15.8 Jun-91 17.7 15.8 Jul-91 18.37 15.8 Aug-91 20.35 15.8 Sep-91 19.98 15.8 Oct-91 20.37 15.8 Nov-91 20.99 15.8 Dec-91 22.89 15.8 Jan-92 23.03 15.8 Feb-92 25.78 15.8 Mar-92 25.51 15.8 Apr-92 26.03 15.8 May-92 25.22 15.8 Jun-92 25.23 15.8 Jul-92 26.08 15.8 Aug-92 24.22 15.8 Sep-92 24.7 15.8 Oct-92 24.64 15.8 Nov-92 23.8 15.8 Dec-92 24.31 15.8 Jan-93 24.29 15.8 Feb-93 24.44 15.8 Mar-93 23.48 15.8 Apr-93 22.92 15.8 May-93 22.96 15.8 Jun-93 22.9 15.8 Jul-93 22.91 15.8 Aug-93 24.21 15.8 Sep-93 23.77 15.8 Oct-93 24.04 15.8 Nov-93 22.52 15.8 Dec-93 22.95 15.8 Jan-94 22.98 15.8 Feb-94 21.17 15.8 Mar-94 20.34 15.8 Apr-94 20.1 15.8 May-94 20.16 15.8 Jun-94 19.77 15.8 Jul-94 18.63 15.8 Aug-94 18.91 15.8 Sep-94 18.32 15.8 Oct-94 17.51 15.8 Nov-94 16.56 15.8 Dec-94 16.98 15.8 Jan-95 16.05 15.8 Feb-95 16.22 15.8 Mar-95 16.47 15.8 Apr-95 16 15.8 May-95 16.45 15.8 Jun-95 16.77 15.8 Jul-95 16.61 15.8 Aug-95 16.18 15.8 Sep-95 16.85 15.8 Oct-95 16.18 15.8 Nov-95 17.86 15.8 Dec-95 17.41 15.8 Jan-96 18.29 15.8 Feb-96 18.57 15.8 Mar-96 18.94 15.8 Apr-96 19.16 15.8 May-96 19.48 15.8 Jun-96 19.3 15.8 Jul-96 18.31 15.8 Aug-96 18.62 15.8 Sep-96 19.73 15.8 Oct-96 19.59 15.8 Nov-96 21.06 15.8 Dec-96 20.77 15.8 Jan-97 20.52 15.8 Feb-97 20.95 15.8 Mar-97 19.87 15.8 Apr-97 20.23 15.8 May-97 21.45 15.8 Jun-97 22.44 15.8 Jul-97 23.99 15.8 Aug-97 22.74 15.8 Sep-97 24 15.8 Oct-97 22.84 15.8 Nov-97 24.12 15.8 Dec-97 24.53 15.8 Jan-98 25.03 15.8 Feb-98 26.49 15.8 Mar-98 27.98 15.8 Apr-98 26.69 15.8 May-98 26.15 15.8 Jun-98 27.27 15.8 Jul-98 26.94 15.8 Aug-98 22.9 15.8 Sep-98 24.35 15.8 Oct-98 28.07 15.8 Nov-98 30.31 15.8 Dec-98 32.15 15.8 Jan-99 33.9 15.8 Feb-99 32.64 15.8 Mar-99 33.92 15.8 Apr-99 33.9 15.8 May-99 32.74 15.8 Jun-99 34.7 15.8 Jul-99 31.31 15.8 Aug-99 31.21 15.8 Sep-99 30.39 15.8 Oct-99 30.41 15.8 Nov-99 30.65 15.8 Dec-99 32.53 15.8 Jan-00 29.78 15.8 Feb-00 28.59 15.8 Mar-00 31.5 15.8 Apr-00 29.41 15.8 May-00 28.82 15.8 Jun-00 29.31 15.8 Jul-00 28.94 15.8 Aug-00 30.35 15.8 Sep-00 28.64 15.8 Oct-00 25.6 15.8
P/E is stock price divided by earnings per share (for one company or, as here, an entire index). P/E indicates the value that investors have placed on a stock, or group of them. When index P/E is well above its long-term average, it shows high investor confidence about future earnings growth. It also can mean that if confidence wanes, there could be a substantial drop in stock prices. Data source: Bloomberg L.P. STOCK MARKETS OF SELECTED COUNTRIES Four best-performing and four worst-performing countries in the MSCI-EAFE(R) Index during the report period. While foreign stocks rose 11.8% when measured in their local currencies, a rising U.S. dollar changed that into a -2.9% return for American investors. [BAR CHART] Finland 25.54 Denmark 16.93 Norway 14.06 Italy 11.77 MSCI-EAFE INDEX -2.9 Ireland -13.08 Austria -13.92 Belgium -17.75 New Zealand -29.06
The MSCI Europe, Australasia and Far East (EAFE) Index includes 19 non-U.S. countries with major stock markets. In any report period, the gap between the best and worst performers may be substantial. Similarly, a country's performance may vary widely from period to period, although it's possible for a country to perform above or below average for an extended time. Data source: Bloomberg L.P. 4 9 SCHWAB S&P 500 FUND [PHOTO OF GERI HOM] "The report period saw large-cap stocks end their remarkable five-year run as the strongest performing asset class." Portfolio Manager Geri Hom GERI HOM, a vice president of the investment adviser, has overall responsibility for the management of the fund. Prior to joining the firm in 1995, she worked for nearly 15 years in equity index management. TICKER SYMBOLS INVESTOR SHARES SWPIX SELECT SHARES(R) SWPPX e.Shares(R) SWPEX ________________________________________________________________________________ [INVESTMENT STYLE 1 AND MARKET CAP 1 GRAPHIC] VALUE BLEND GROWTH X LARGE MEDIUM SMALL
Long-term investors who want to focus on large-cap U.S. stocks or who are looking for performance that is linked to a popular index may want to consider this fund. ________________________________________________________________________________ THE FUND'S GOAL IS TO TRACK THE TOTAL RETURN OF THE S&P 500(R) Index. 2 MANAGER'S PERSPECTIVE GIVEN THE VOLATILITY THAT PREVAILED IN EQUITY MARKETS, THE FUND PERFORMED COMPARATIVELY WELL DURING THE REPORT PERIOD. A combination of factors caused investors to trim their overall exposure to stocks. Among these factors were high stock prices, uncertainty over the outcome of the presidential election and potential interest rate hikes. Toward the end of the report period, evidence of a slowing economy reduced fears of interest rate hikes. Ordinarily this might have helped the market regain its footing, but concerns about high oil prices kept stocks in flux. The S&P 500 Index lagged the Russell 2000(R) Index as small-cap stocks outperformed mid- and large-caps for the report period. Initially, the fund's growth stocks outperformed their value counterparts. This trend reversed in the second half of the period as investors reduced their exposure to technology issues. Best-performing sectors included utilities, capital goods, health care and financial services. All share classes of the fund tracked the performance of the S&P 500 Index for the report period. 1 Source: Morningstar, Inc. This style assessment is the result of comparing the fund with the S&P 500 Index, based on P/E, P/B and median market cap. The assessment reflects the fund's portfolio as of 10/31/00, which may have changed since then, and is not a precise indication of risk or performance-- past, present or future. 2 "Standard & Poor's,(R)" "S&P,(R)" "S&P 500,(R)" "Standard & Poor's 500" and "500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Schwab S&P 500 Fund. The fund is not sponsored, endorsed, sold or promoted by Standard & Poor's, and Standard & Poor's makes no representation regarding the advisability of investing in the fund. 5 10 Schwab S&P 500 Fund PERFORMANCE: INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS as of 10/31/00 This chart compares performance of the fund's Investor Shares with the S&P 500(R) Index and the Morningstar Large-Cap Fund category. [BAR CHART]
1 YEAR SINCE INCEPTION: 5/1/96 ---------------------- ----------------------- (0.28%) (0.54%) ------------- --------------- Total Return 2 5.81% 6.09% 8.70% 1 20.28% 20.82% n/a % of Return Lost to Taxes 7.06% -- 19.77% 1 n/a -- n/a AFTER-TAX RETURN 2 5.40% -- 6.98% 1 n/a -- n/a
PERFORMANCE OF A $10,000 INVESTMENT Shows performance since inception of a hypothetical $10,000 investment in the fund's Investor Shares, compared to a similar investment in the S&P 500 Index. [LINE GRAPH]
INVESTOR SHARES S&P 500 INDEX --------------- ------------- 4/30/96 10000 10000 5/31/96 10250 10257 6/30/96 10290 10296 7/31/96 9840 9841 8/31/96 10040 10049 9/30/96 10600 10613 10/31/96 10880 10906 11/30/96 11690 11731 12/31/96 11462 11498 1/31/97 12157 12216 2/28/97 12248 12312 3/31/97 11744 11808 4/30/97 12430 12511 5/31/97 13186 13272 6/30/97 13760 13867 7/31/97 14849 14969 8/31/97 14012 14131 9/30/97 14778 14904 10/31/97 14284 14406 11/30/97 14930 15073 12/31/97 15184 15332 1/31/98 15357 15502 2/28/98 16455 16620 3/31/98 17289 17471 4/30/98 17452 17647 5/31/98 17147 17344 6/30/98 17838 18048 7/31/98 17645 17857 8/31/98 15092 15278 9/30/98 16058 16257 10/31/98 17340 17579 11/30/98 18387 18645 12/31/98 19443 19718 1/31/99 20253 20543 2/28/99 19617 19904 3/31/99 20397 20700 4/30/99 21176 21501 5/31/99 20663 20994 6/30/99 21812 22159 7/31/99 21125 21467 8/31/99 21012 21360 9/30/99 20428 20775 10/31/99 21709 22090 11/30/99 22150 22539 12/31/99 23448 23866 1/31/00 22266 22668 2/29/00 21841 22239 3/31/00 23967 24414 4/30/00 23241 23679 5/31/00 22753 23194 6/30/00 23313 23767 7/31/00 22940 23396 8/31/00 24361 24849 9/30/00 23075 23537 10/31/00 22971 23438
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made -- currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Large-Cap Fund category that had track records of at least one year. These funds may or may not use tax-efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 6 11 PERFORMANCE: SELECT SHARES(R) AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/00 This chart compares performance of the fund's Select Shares with the S&P 500(R) Index and the Morningstar Large-Cap Fund category. [BAR CHART]
1 YEAR SINCE INCEPTION: 5/19/97 ----------------------------------- ----------------------------- (0.15%) (0.26%) --------------------- -------------------- Total Return 2 5.94% 6.09% 8.70% 1 18.27% 18.53% n/a % of Return Lost to Taxes 7.91% -- 19.77% 1 n/a -- n/a AFTER-TAX RETURN 2 5.47% -- 6.98% 1 n/a -- n/a
PERFORMANCE OF A $50,000 INVESTMENT Shows performance since inception of a hypothetical $50,000 investment in the fund's Select Shares, compared to a similar investment in the S&P 500 Index. [LINE GRAPH]
SELECT SHARES S&P 500 INDEX 05/19/97 50000 50000 05/31/97 50935 50930 06/30/97 53190 53212 07/31/97 57395 57442 08/31/97 54165 54225 09/30/97 57120 57191 10/31/97 55215 55281 11/30/97 57745 57841 12/31/97 58745 58836 01/31/98 59375 59489 02/28/98 63660 63778 03/31/98 66880 67043 04/30/98 67550 67720 05/31/98 66370 66556 06/30/98 69040 69258 07/31/98 68295 68524 08/31/98 58435 58629 09/30/98 62165 62387 10/31/98 67155 67459 11/30/98 71245 71547 12/31/98 75340 75668 01/31/99 78475 78831 02/28/99 76015 76379 03/31/99 79030 79434 04/30/99 82085 82509 05/31/99 80140 80561 06/30/99 84545 85033 07/31/99 81885 82380 08/31/99 81490 81968 09/30/99 79230 79721 10/31/99 84230 84767 11/30/99 85935 86491 12/31/99 91000 91585 01/31/00 86420 86987 02/29/00 84770 85341 03/31/00 93050 93687 04/30/00 90235 90867 05/31/00 88350 89004 06/30/00 90515 91203 07/31/00 89110 89780 08/31/00 94655 95356 09/30/00 89635 90322 10/31/00 89230 89942
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made -- currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Large-Cap Fund category that had track records of at least one year. These funds may or may not use tax-efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 7 12 SCHWAB S&P 500 FUND PERFORMANCE: e.SHARES(R) AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/00 This chart compares performance of the fund's e.Shares with the S&P 500(R) Index and the Morningstar Large-Cap Fund category. [BAR CHART]
1 YEAR SINCE INCEPTION: 5/1/96 ------------------------------ ---------------------------- (0.25%) (0.43%) ----------------- ------------------- Total Return 2 5.84% 6.09% 8.70% 1 20.39% 20.82% n/a % of Return Lost to Taxes 8.05% -- 19.77% 1 n/a -- n/a AFTER-TAX RETURN 2 5.37% -- 6.98% 1 n/a -- n/a
PERFORMANCE OF A $10,000 INVESTMENT Shows performance since inception of a hypothetical $10,000 investment in the fund's e.Shares, compared to a similar investment in the S&P 500 Index. [LINE GRAPH]
e.SHARES S&P 500 INDEX 04/30/96 10000 10000 05/31/96 10250 10257 06/30/96 10290 10296 07/31/96 9840 9841 08/31/96 10050 10049 09/30/96 10600 10613 10/31/96 10890 10906 11/30/96 11710 11731 12/31/96 11473 11498 01/31/97 12179 12216 02/28/97 12270 12312 03/31/97 11766 11808 04/30/97 12452 12511 05/31/97 13209 13272 06/30/97 13794 13867 07/31/97 14873 14969 08/31/97 14036 14131 09/30/97 14803 14904 10/31/97 14318 14406 11/30/97 14964 15073 12/31/97 15227 15332 01/31/98 15390 15502 02/28/98 16490 16620 03/31/98 17336 17471 04/30/98 17499 17647 05/31/98 17193 17344 06/30/98 17886 18048 07/31/98 17692 17857 08/31/98 15136 15278 09/30/98 16103 16257 10/31/98 17397 17579 11/30/98 18446 18645 12/31/98 19504 19718 01/31/99 20316 20543 02/28/99 19679 19904 03/31/99 20459 20700 04/30/99 21240 21501 05/31/99 20737 20994 06/30/99 21878 22159 07/31/99 21199 21467 08/31/99 21086 21360 09/30/99 20501 20775 10/31/99 21795 22090 11/30/99 22227 22539 12/31/99 23536 23866 01/31/00 22350 22668 02/29/00 21924 22239 03/31/00 24057 24414 04/30/00 23328 23679 05/31/00 22850 23194 06/30/00 23401 23767 07/31/00 23037 23396 08/31/00 24462 24849 09/30/00 23172 23537 10/31/00 23068 23438
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made--currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Large-Cap Fund category that had track records of at least one year. These funds may or may not use tax-efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 8 13 FUND FACTS
TOP TEN HOLDINGS 1 AS OF 10/31/00 1 GENERAL ELECTRIC CO. 4.3% 2 CISCO SYSTEMS, INC. 3.0% 3 MICROSOFT CORP. 2.9% 4 EXXON MOBIL CORP. 2.5% 5 INTEL CORP. 2.4% 6 PFIZER, INC. 2.2% 7 CITIGROUP, INC. 1.9% 8 AMERICAN INTERNATIONAL GROUP, INC. 1.8% 9 MERCK & CO., INC. 1.6% 10 WAL-MART STORES, INC. 1.6% -------------------------------------------------- TOTAL PERCENTAGE OF INVESTMENTS 24.2%
STATISTICS AS OF 10/31/00
PEER GROUP FUND AVERAGE 2 ---- ----------- Number of Holdings 502 137 - -------------------------------------------------------------------------- Median Market Cap ($ Mil) $82,003 $56,749 - -------------------------------------------------------------------------- Price/Earnings (P/E) Ratio 34.1 34.3 - -------------------------------------------------------------------------- Price/Book (P/B) Ratio 8.9 8.7 - -------------------------------------------------------------------------- 12-Month Yield Investor Shares 0.82% 0.45% - -------------------------------------------------------------------------- Portfolio Turnover Rate 9% 98% - -------------------------------------------------------------------------- Three-Year Beta 1.00 0.95 - --------------------------------------------------------------------------
EXPENSE RATIO AS OF 10/31/00 INVESTOR SHARES 0.35% 3 SELECT SHARES 0.19% 3 e.SHARES 0.28% 3 PEER GROUP AVERAGE 1.34% 2
1 This list is not a recommendation of any security by the investment adviser. Portfolio holdings may have changed since the report date. 2 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Morningstar Large-Cap Fund category. 3 Guaranteed by Schwab and the investment adviser through 2/28/01. The actual expense ratio during the report period was 0.01% higher due to certain non-routine expenses. 4 Source: Standard & Poor's(R), a division of McGraw-Hill companies. INDEX COMPOSITION BY INDUSTRY 4 These charts show the size of the ten largest industries in the S&P 500(R) Index. As the charts show, the total portion represented by these industries has been growing over the past five years. AS OF 10/31/00 [PIE CHART] 1 14.8% Business Machines 2 12.0% Drugs & Medicine 3 9.8% Electronics 4 6.8% Miscellaneous Finance 5 6.3% Telephone 6 5.6% Producer Goods 7 5.2% Retail 8 5.1% Banks 9 4.7% Business Services 10 4.2% International Oil 25.6% Other
AS OF 10/31/99 [PIE CHART] 1 13.4% Business Machines 2 10.9% Drugs & Medicine 3 8.3% Telephone 4 8.0% Electronics 5 6.5% Banks 6 6.4% Retail 7 5.8% Miscellaneous Finance 8 5.4% Producer Goods 9 4.2% International Oil 10 3.8% Food & Agriculture 27.4% Other
AS OF 10/31/95 [PIE CHART] 1 10.0% Drugs & Medicine 2 8.9% Telephone 3 6.6% International Oil 4 6.5% Food & Agriculture 5 6.2% Banks 6 5.7% Business Machines 7 5.2% Producer Goods 8 5.1% Electronics 9 4.6% Retail 10 4.5% Energy & Utilities 36.8% Other
9 14 SCHWAB S&P 500 FUND -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. THE FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
11/1/99 - 11/1/98 - 11/1/97 - 11/1/96 - 5/1/96 1 - INVESTOR SHARES 10/31/00 10/31/99 10/31/98 10/31/97 10/31/96 PER-SHARE DATA ($) - ---------------------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 21.17 17.05 14.17 10.88 10.00 ----- ----- ----- ----- ----- Income from investment operations: Net investment income 0.17 0.17 0.16 0.14 0.08 Net realized and unrealized gains 1.06 4.10 2.85 3.24 0.80 ----- ----- ----- ----- ----- Total income from investment operations 1.23 4.27 3.01 3.38 0.88 Less distributions: Dividends from net investment income (0.18) (0.15) (0.13) (0.09) -- Distributions from net realized gains (0.07) -- -- -- -- ----- ----- ----- ----- ----- Total distributions (0.25) (0.15) (0.13) (0.09) -- ----- ----- ----- ----- ----- Net asset value at end of period 22.15 21.17 17.05 14.17 10.88 ===== ===== ===== ===== ===== Total return (%) 5.81 25.20 21.39 31.29 8.80 2 RATIOS/SUPPLEMENTAL DATA (%) - ---------------------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.35 4 0.35 0.35 0.38 0.49 3 Expense reductions reflected in above ratio 0.16 0.27 0.28 0.32 0.40 3 Ratio of net investment income to average net assets 0.81 1.01 1.25 1.49 1.89 3 Portfolio turnover rate 9 3 1 3 1 Net assets, end of period ($ x 1,000,000) 3,617 3,183 1,935 923 244
1 Commencement of operations. 2 Not annualized. 3 Annualized. 4 Would have been 0.36% if certain non-routine expenses (proxy fees) had been included. 10 See the Financial Notes, which are integral to this information. 15
11/1/99 - 11/1/98 - 11/1/97 - 5/19/97 1 - SELECT SHARES(R) 10/31/00 10/31/99 10/31/98 10/31/97 PER-SHARE DATA ($) - ---------------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 21.23 17.09 14.19 12.85 ----- ----- ----- ----- Income from investment operations: Net investment income 0.20 0.20 0.26 0.05 Net realized and unrealized gains 1.06 4.12 2.78 1.29 ----- ----- ----- ----- Total income from investment operations 1.26 4.32 3.04 1.34 Less distributions: Dividends from net investment income (0.21) (0.18) (0.14) -- Distributions from net realized gains (0.07) -- -- -- ----- ----- ----- ----- Total distributions (0.28) (0.18) (0.14) -- ----- ----- ----- ----- Net asset value at end of period 22.21 21.23 17.09 14.19 ===== ===== ===== ===== Total return (%) 5.94 25.42 21.63 10.43 2 RATIOS/SUPPLEMENTAL DATA (%) - ---------------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.19 4 0.19 0.19 0.19 3 Expense reductions reflected in above ratio 0.16 0.28 0.28 0.34 3 Ratio of net investment income to average net assets 0.98 1.17 1.40 1.46 3 Portfolio turnover rate 9 3 1 3 Net assets, end of period ($ x 1,000,000) 4,357 3,750 1,548 486
11/1/99 - 11/1/98 - 11/1/97 - 11/1/96 - 5/1/96 1 - e.SHARES(R) 10/31/00 10/31/99 10/31/98 10/31/97 10/31/96 PER-SHARE DATA ($) - -------------------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 21.21 17.08 14.19 10.89 10.00 ----- ----- ----- ----- ----- Income from investment operations: Net investment income 0.20 0.20 0.15 0.21 0.04 Net realized and unrealized gains 1.04 4.09 2.88 3.19 0.85 ----- ----- ----- ----- ----- Total income from investment operations 1.24 4.29 3.03 3.40 0.89 Less distributions: Dividends from net investment income (0.21) (0.16) (0.14) (0.10) -- Distributions from net realized gains (0.07) -- -- -- -- ----- ----- ----- ----- ----- Total distributions (0.28) (0.16) (0.14) (0.10) -- ----- ----- ----- ----- ----- Net asset value at end of period 22.17 21.21 17.08 14.19 10.89 ===== ===== ===== ===== ===== Total return (%) 5.84 25.28 21.50 31.48 8.90 2 RATIOS/SUPPLEMENTAL DATA (%) - -------------------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.28 5 0.28 0.28 0.28 0.28 3 Expense reductions reflected in above ratio 0.07 0.20 0.24 0.33 0.91 3 Ratio of net investment income to average net assets 0.88 1.08 1.32 1.61 1.82 3 Portfolio turnover rate 9 3 1 3 1 Net assets, end of period ($ x 1,000,000) 441 435 281 132 36
1 Commencement of operations 2 Not annualized. 3 Annualized. 4 Would have been 0.20% if certain non-routine expenses (proxy fees) had been included. 5 Would have been 0.29% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which 11 are integral to this information. 16 SCHWAB S&P 500 FUND -- FINANCIALS PORTFOLIO HOLDINGS As of October 31, 2000 This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics. With the top ten holdings, the number in the circle is the security's rank among the top ten. (1) Top ten holding + New holding (since 10/31/99) - - Non-income producing security * American Depositary Receipt # Collateral for open futures contracts ## Issuer is affiliated with the fund's adviser The pie chart below shows the fund's major asset categories and the market value and cost of the securities in each category. [PIE CHART] ALL DOLLAR VALUES ARE IN THOUSANDS. COMMON STOCK 99.8% Market Value: $8,403,483 Cost: $6,336,019 OTHER INVESTMENT COMPANIES 0.2% Market Value: $16,410 Cost: $16,410 U.S. TREASURY OBLIGATIONS 0.0% Market Value: $640 Cost: $640 - ------------------------------------- TOTAL INVESTMENTS 100.0% Market Value: $8,420,533 Cost: $6,353,069
COMMON STOCK 99.8% OF INVESTMENTS
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) AEROSPACE / DEFENSE 1.3% --------------------------------------------------------------------------- B.F. Goodrich Co. 67,713 2,772 Boeing Co. 599,654 40,664 Crane Co. 39,269 1,028 General Dynamics Corp. 132,962 9,515 Lockheed Martin Corp. 285,310 10,228 Northrop Grumman Corp. 48,339 4,060 Raytheon Co., Class B 226,694 7,750 Rockwell International Corp. 123,536 4,857 Textron, Inc. 96,045 4,844 TRW, Inc. 82,157 3,451 United Technologies Corp. 312,984 21,850 ----------- 111,019 AIR TRANSPORTATION 0.3% --------------------------------------------------------------------------- - - AMR Corp. 99,584 3,261 Delta Air Lines, Inc. 81,006 3,828 - - FedEx Corp. 190,688 8,936 Southwest Airlines Co. 333,218 9,497 - - U.S. Airways Group, Inc. 44,190 1,668 ----------- 27,190 ALCOHOLIC BEVERAGES 0.4% --------------------------------------------------------------------------- Adolph Coors Co., Class B 25,077 1,597 Anheuser-Busch Cos., Inc. 605,354 27,695 Brown-Forman Corp., Class B 45,744 2,785 ----------- 32,077 APPAREL 0.1% --------------------------------------------------------------------------- Liz Claiborne, Inc. 36,346 1,545 Nike, Inc., Class B 179,803 7,181 - - Reebok International Ltd. 38,318 826 Russell Corp. 21,076 337 Springs Industries, Inc., Class A 11,542 272 VF Corp. 76,062 2,077 ----------- 12,238 AUTOMOTIVE PRODUCTS / MOTOR VEHICLES 1.1% --------------------------------------------------------------------------- Cooper Tire & Rubber Co. 49,364 540 Cummins Engine Co., Inc. 26,980 917 Dana Corp. 99,596 2,210 Danaher Corp. 94,200 5,946 Delphi Automotive Systems Corp. 374,280 5,872 Eaton Corp. 48,661 3,312 Ford Motor Co. 1,264,885 33,045 General Motors Corp. 358,473 22,270 Genuine Parts Co. 115,876 2,470 Goodyear Tire & Rubber Co. 103,926 1,923 + Harley-Davidson, Inc. 202,300 9,748 - - Navistar International Corp. 40,353 1,334 + Visteon Corp. 86,916 1,537 ----------- 91,124 BANKS 5.3% --------------------------------------------------------------------------- AmSouth Bancorp. 251,050 3,499 Bank of America Corp. 1,097,599 52,753 Bank of New York Co., Inc. 493,286 28,395
12 See the Financial Notes, which are integral to this information. 17
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Bank One Corp. 772,224 28,186 BB&T Corp. 267,272 8,519 Chase Manhattan Corp. 874,905 39,808 Comerica, Inc. 104,430 6,298 Fifth Third Bancorp. 310,024 15,927 First Union Corp. 658,121 19,949 Firstar Corp. 640,491 12,610 FleetBoston Financial Corp. 603,020 22,915 Golden West Financial Corp. 105,357 5,907 Huntington Bancshares, Inc. 165,911 2,385 J.P. Morgan & Co., Inc. 105,974 17,539 KeyCorp, Inc. 287,808 7,105 Mellon Financial Corp. 325,252 15,693 National City Corp. 403,700 8,629 Northern Trust Corp. 148,400 12,670 + Old Kent Financial Corp. 90,510 2,506 PNC Financial Services Group 193,241 12,923 Providian Financial Corp. 95,094 9,890 Regions Financial Corp. 146,300 3,447 SouthTrust Corp. 111,400 3,607 State Street Corp. 107,535 13,414 Summit Bancorp. 115,700 4,339 SunTrust Banks, Inc. 198,747 9,701 Synovus Financial Corp. 188,647 4,068 U.S. Bancorp. 497,181 12,026 Union Planters Corp. 91,100 3,080 Wachovia Corp. 135,526 7,318 Wells Fargo & Co. 1,100,006 50,944 ----------- 446,050 BUSINESS MACHINES & SOFTWARE 14.8% ------------------------------------------------------------------------- - Adaptec, Inc. 67,700 1,071 Adobe Systems, Inc. 160,608 12,216 - Apple Computer, Inc. 215,932 4,224 Autodesk, Inc. 37,800 834 - BMC Software, Inc. 163,300 3,317 - Cabletron Systems, Inc. 122,329 3,318 - Ceridian Corp. 96,820 2,421 - (2) Cisco Systems, Inc. 4,741,480 255,448 Compaq Computer Corp. 1,135,894 34,543 - Compuware Corp. 242,500 1,910 - Comverse Technology, Inc. 103,900 11,611 - Dell Computer Corp. 1,728,528 50,992 - EMC Corp. 1,458,974 129,940 - Gateway, Inc. 215,400 11,117 Hewlett-Packard Co. 1,332,646 61,885 International Business Machines Corp. 1,178,904 116,122 - Lexmark International Group, Inc., Class A 85,600 3,510 - (3) Microsoft Corp. 3,516,112 242,172 - + NCR Corp. 64,100 2,764 - Network Appliance, Inc. 208,600 24,823 - Novell, Inc. 215,229 1,937 - + Novellus Systems, Inc. 87,450 3,580 - Oracle Corp. 3,761,580 124,132 Pitney Bowes, Inc. 169,602 5,035 Seagate Technology, Inc. 153,111 10,699 - Sun Microsystems, Inc. 1,060,984 117,637 - Unisys Corp. 208,715 2,661 Xerox Corp. 447,174 3,773 ----------- 1,243,692 BUSINESS SERVICES 6.0% ------------------------------------------------------------------------- - Allied Waste Industries, Inc. 130,200 1,204 - America Online, Inc. 1,542,700 77,798 Automatic Data Processing, Inc. 419,124 27,374 - Cendant Corp. 487,695 5,852 - + Citrix Systems, Inc. 123,400 2,730 Computer Associates International, Inc. 394,990 12,590 - Computer Sciences Corp. 112,722 7,101 - + Convergys Corp. 102,241 4,454 Deluxe Corp. 48,172 1,087 Ecolab, Inc. 84,770 3,322 Electronic Data Systems Corp. 310,800 14,588 Equifax, Inc. 94,215 3,250 Exelon Corp. 216,373 13,009 First Data Corp. 271,527 13,610 H&R Block, Inc. 60,917 2,174 IMS Health, Inc. 198,186 4,682 Interpublic Group of Cos., Inc. 205,720 8,833 - + Mercury Interactive Corp. 53,100 5,894 National Service Industries, Inc. 26,600 544 Nortel Networks Corp. 1,995,680 90,803 Omnicom Group, Inc. 119,200 10,996 - Parametric Technology Corp. 180,632 2,224
See the Financial Notes, which 13 are integral to this information. 18 SCHWAB S&P 500 FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Paychex, Inc. 248,325 14,077 - PeopleSoft, Inc. 185,800 8,108 - + Sapient Corp. 79,200 2,817 - + Siebel Systems, Inc. 278,900 29,267 + Stilwell Financial, Inc. 149,200 6,686 Tyco International Ltd. 1,145,288 64,924 - + VERITAS Software Corp. 268,400 37,849 Waste Management, Inc. 414,426 8,289 - + Yahoo!, Inc. 367,100 21,521 ----------- 507,657 CHEMICAL 0.9% ------------------------------------------------------------------------- Air Products & Chemicals, Inc. 153,258 5,718 Dow Chemical Co. 452,328 13,853 E.I. du Pont de Nemours & Co. 696,654 31,611 Eastman Chemical Co. 51,364 2,202 Great Lakes Chemical Corp. 35,725 1,192 Hercules, Inc. 70,157 1,285 PPG Industries, Inc. 115,575 5,158 Praxair, Inc. 105,030 3,912 Rohm & Haas Co. 143,850 4,324 Sigma-Aldrich Corp. 53,709 1,920 Union Carbide Corp. 90,260 3,881 - W.R. Grace & Co. 45,500 173 ----------- 75,229 CONSTRUCTION 0.2% ------------------------------------------------------------------------- Armstrong Holdings, Inc. 26,100 75 Centex Corp. 39,122 1,448 Fluor Corp. 49,875 1,746 Kaufman & Broad Home Corp. 31,181 928 Masco Corp. 303,790 5,677 Pulte Corp. 26,888 896 Sherwin-Williams Co. 107,861 2,339 The Stanley Works 57,186 1,523 Vulcan Materials Co. 66,700 2,801 ----------- 17,433 CONSUMER: DURABLE 0.1% ------------------------------------------------------------------------- Black & Decker Corp. 55,597 2,092 Leggett & Platt, Inc. 131,400 2,152 Maytag Corp. 51,356 1,470 Whirlpool Corp. 47,656 2,073 ----------- 7,787 CONSUMER: NONDURABLE 0.7% ------------------------------------------------------------------------- American Greetings Corp., Class A 42,057 765 Darden Restaurants, Inc. 80,320 1,807 Fortune Brands, Inc. 103,558 3,048 Harcourt General, Inc. 48,300 2,707 Hasbro, Inc. 114,397 1,230 Mattel, Inc. 287,507 3,720 McDonald's Corp. 882,474 27,357 Newell Rubbermaid, Inc. 177,033 3,397 - + Starbucks Corp. 124,800 5,577 - Tricon Global Restaurants, Inc. 96,450 2,894 Tupperware Corp. 37,578 644 Wendy's International, Inc. 77,475 1,685 ----------- 54,831 CONTAINERS 0.1% ------------------------------------------------------------------------- Ball Corp. 19,763 694 Bemis Co., Inc. 34,711 898 Crown Cork & Seal Co., Inc. 84,468 771 - Owens-Illinois, Inc. 97,593 579 - + Pactiv Corp. 111,556 1,171 - Sealed Air Corp. 55,426 2,667 ----------- 6,780 ELECTRONICS 8.6% ------------------------------------------------------------------------- - ADC Telecommunications, Inc. 514,300 10,993 - Advanced Micro Devices, Inc. 207,688 4,699 - + Altera Corp. 266,700 10,918 - + American Power Conversion Corp. 128,550 1,663 - Analog Devices, Inc. 236,900 15,399 - Andrew Corp. 53,888 1,418 - Applied Materials, Inc. 542,024 28,795 - + Broadcom Corp., Class A 148,874 33,106 - + Conexant Systems, Inc. 151,900 3,997 (5) Intel Corp. 4,486,048 201,872 ITT Industries, Inc. 58,647 1,910 - + JDS Uniphase Corp. 626,600 51,029 - KLA-Tencor Corp. 123,550 4,178 + Linear Technology Corp. 207,800 13,416 - LSI Logic Corp. 206,794 6,798 Lucent Technologies, Inc. 2,229,635 51,978 - + Maxim Integrated Products, Inc. 189,000 12,533 - Micron Technology, Inc. 376,280 13,076
14 See the Financial Notes, which are integral to this information. 19
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) + Molex, Inc. 131,300 7,090 Moody's Corp. 107,956 2,841 Motorola, Inc. 1,456,998 36,334 - National Semiconductor Corp. 117,937 3,066 - Nextel Communications, Inc., Class A 508,800 19,557 PE Corp.--PE Biosystems Group 139,064 16,270 PerkinElmer, Inc. 33,096 3,955 - + Power-One, Inc. 49,100 3,483 - QUALCOMM, Inc. 497,900 32,418 - + Sanmina Corp. 100,900 11,534 Scientific-Atlanta, Inc. 106,224 7,270 - Solectron Corp. 402,000 17,688 Tektronix, Inc. 32,405 2,309 - Tellabs, Inc. 273,456 13,656 - + Teradyne, Inc. 115,200 3,600 Texas Instruments, Inc. 1,154,904 56,662 - Thermo Electron Corp. 114,714 3,327 Thomas & Betts Corp. 37,815 572 - + Xilinx, Inc. 219,700 15,915 ----------- 725,325 ENERGY: RAW MATERIALS 1.0% ------------------------------------------------------------------------- Anadarko Petroleum Corp. 162,089 10,382 Apache Corp. 81,789 4,524 Baker Hughes, Inc. 220,508 7,580 Burlington Resources, Inc. 144,155 5,190 + Devon Energy Corp. 84,900 4,279 Eastern Enterprises 17,843 1,149 Halliburton Co. 296,829 11,001 McDermott International, Inc. 38,900 377 - + Nabors Industries, Inc. 97,400 4,958 Occidental Petroleum Corp. 244,992 4,869 - Rowan Cos., Inc. 62,881 1,584 Schlumberger Ltd. 380,934 28,999 ----------- 84,892 FOOD & AGRICULTURE 3.2% ------------------------------------------------------------------------- Archer-Daniels-Midland Co. 419,874 4,619 Campbell Soup Co. 281,527 8,235 Coca-Cola Co. 1,654,682 99,901 Coca-Cola Enterprises, Inc. 279,600 5,138 ConAgra, Inc. 355,400 7,597 General Mills, Inc. 191,568 7,998 H.J. Heinz Co. 232,138 9,735 Hershey Foods Corp. 91,198 4,953 Kellogg Co. 271,162 6,881 Nabisco Group Holdings Corp. 218,200 6,301 PepsiCo, Inc. 964,297 46,708 Quaker Oats Co. 88,487 7,217 Ralston Purina Group 203,869 4,944 Sara Lee Corp. 579,638 12,498 Supervalu, Inc. 90,954 1,398 Sysco Corp. 222,428 11,608 * Unilever NV 381,932 19,407 Wm. Wrigley Jr. Co. 75,543 5,982 ----------- 271,120 GOLD 0.1% ------------------------------------------------------------------------- Barrick Gold Corp. 262,079 3,505 Homestake Mining Co. 174,807 721 Newmont Mining Corp. 111,669 1,515 Placer Dome, Inc. 218,900 1,779 ----------- 7,520 HEALTHCARE / DRUGS & MEDICINE 11.9% ------------------------------------------------------------------------- Abbott Laboratories 1,037,614 54,799 Aetna, Inc. 94,158 5,444 Allergan, Inc. 87,670 7,370 - ALZA Corp. 76,778 6,214 American Home Products Corp. 871,110 55,316 - Amgen, Inc. 687,116 39,810 Bausch & Lomb, Inc. 34,816 1,343 Baxter International, Inc. 194,784 16,009 Becton, Dickinson & Co. 169,310 5,672 - + Biogen, Inc. 98,300 5,916 Biomet, Inc. 118,498 4,288 - Boston Scientific Corp. 271,712 4,330 Bristol-Myers Squibb Co. 1,313,564 80,045 C.R. Bard, Inc. 33,520 1,404 Cardinal Health, Inc. 185,190 17,547 Eli Lilly & Co. 754,724 67,453 - Guidant Corp. 204,620 10,832 + HCA--The Healthcare Co. 371,816 14,849 - HealthSouth Corp. 255,409 3,065 - Humana, Inc. 109,242 1,325 Johnson & Johnson 930,180 85,693 - + King Pharmaceuticals, Inc. 110,610 4,957 - Manor Care, Inc. 66,333 1,107 McKesson HBOC, Inc. 189,420 5,316
See the Financial Notes, which are integral to this information. 15 20 SCHWAB S&P 500 FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - + Medimmune, Inc. 139,900 9,146 Medtronic, Inc. 801,054 43,507 (9) Merck & Co., Inc. 1,539,046 138,418 (6) Pfizer, Inc. 4,218,577 182,190 Pharmacia Corp. 869,480 47,821 - + Quintiles Transnational Corp. 76,800 1,070 Schering-Plough Corp. 980,962 50,703 - St. Jude Medical, Inc. 55,892 3,074 - Tenet Healthcare Corp. 210,433 8,273 UnitedHealth Group, Inc. 107,392 11,746 - Watson Pharmaceuticals, Inc. 67,800 4,242 - Wellpoint Health Networks, Inc. 41,800 4,888 ----------- 1,005,182 HOUSEHOLD PRODUCTS 1.5% ------------------------------------------------------------------------- Alberto-Culver Co., Class B 36,317 1,219 Avon Products, Inc. 158,754 7,700 Clorox Co. 156,532 6,985 Colgate-Palmolive Co. 383,836 22,554 Gillette Co. 703,438 24,532 International Flavors & Fragrances, Inc. 67,128 1,124 Procter & Gamble Co. 873,922 62,431 ----------- 126,545 INSURANCE 3.8% ------------------------------------------------------------------------- AFLAC, Inc. 176,800 12,917 Allstate Corp. 490,718 19,751 American General Corp. 168,822 13,590 (8) American International Group, Inc. 1,547,015 151,607 Aon Corp. 169,448 7,022 Chubb Corp. 117,260 9,901 CIGNA Corp. 104,965 12,800 Cincinnati Financial Corp. 106,945 3,930 Conseco, Inc. 216,102 1,499 Hartford Financial Services Group, Inc. 149,992 11,165 Jefferson-Pilot Corp. 68,322 4,697 Lincoln National Corp. 127,526 6,169 Loew's Corp. 66,440 6,042 Marsh & McLennan Cos., Inc. 180,978 23,663 MBIA, Inc. 65,186 4,738 MGIC Investment Corp. 71,238 4,853 Progressive Corp. 48,751 4,790 SAFECO Corp. 84,791 2,051 St. Paul Cos., Inc. 149,316 7,652 Torchmark Corp. 85,289 2,841 UnumProvident Corp. 159,928 4,518 ----------- 316,196 MEDIA 3.3% ------------------------------------------------------------------------- - Clear Channel Communications, Inc. 391,298 23,502 - Comcast Corp., Special Class A 604,558 24,636 Dow Jones & Co., Inc. 58,050 3,418 Gannett Co., Inc. 176,292 10,225 Knight-Ridder, Inc. 50,683 2,547 McGraw-Hill Cos., Inc. 130,364 8,368 Meredith Corp. 33,012 1,048 New York Times Co., Class A 111,300 4,090 R.R. Donnelley & Sons Co. 80,106 1,722 Seagram Co. Ltd. 290,875 16,616 Time Warner, Inc. 884,340 67,130 Tribune Co. 206,012 7,635 - Viacom, Inc., Class B 1,013,400 57,637 The Walt Disney Co. 1,392,830 49,881 ----------- 278,455 MISCELLANEOUS 0.5% ------------------------------------------------------------------------- - + Agilent Technologies, Inc. 301,795 13,977 - + Palm, Inc. 377,540 20,222 - + Sabre Group Corp. 86,301 2,886 XCEL Energy, Inc. 226,270 5,784 ----------- 42,869 MISCELLANEOUS FINANCE 6.5% ------------------------------------------------------------------------- American Express Co. 892,237 53,534 Associates First Capital Corp., Class A 485,702 18,032 Bear Stearns Cos., Inc. 71,701 4,347 Capital One Financial Corp. 131,350 8,291 ## Charles Schwab Corp. 922,560 32,405 + Charter One Financial, Inc. 139,950 3,210 + CIT Group, Inc., Class A 177,400 3,093 (7) Citigroup, Inc. 3,005,908 158,186 Countrywide Credit Industries, Inc. 75,824 2,839 Fannie Mae 676,117 52,061 Franklin Resources, Inc. 162,800 6,974 Freddie Mac 464,452 27,867
16 See the Financial Notes, which are integral to this information. 21
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Household International, Inc. 314,908 15,844 Lehman Brothers Holdings, Inc. 162,200 10,462 MBNA Corp. 569,120 21,378 Merrill Lynch & Co., Inc. 538,084 37,666 Morgan Stanley Dean Witter & Co. 751,772 60,377 Paine Webber Group, Inc. 98,600 7,025 T. Rowe Price Associates, Inc. 80,300 3,759 USA Education, Inc. 103,200 5,766 Washington Mutual, Inc. 359,856 15,834 ----------- 548,950 NON-FERROUS METALS 0.4% ------------------------------------------------------------------------- Alcan Aluminum Ltd. 222,774 7,031 Alcoa, Inc. 577,346 16,563 Engelhard Corp. 87,001 1,816 - Freeport-McMoRan Copper & Gold, Inc., Class B 106,415 845 - Inco Ltd. 121,449 1,875 Phelps Dodge Corp. 52,654 2,462 ----------- 30,592 OIL: DOMESTIC 0.6% ------------------------------------------------------------------------- Amerada Hess Corp. 60,092 3,726 Ashland, Inc. 46,356 1,518 Conoco, Inc., Class B 416,300 11,318 Kerr-McGee Corp. 62,573 4,087 Phillips Petroleum Co. 169,950 10,494 Sunoco, Inc. 57,752 1,729 Tosco Corp. 96,000 2,748 Transocean Sedco Forex, Inc. 140,883 7,467 Unocal Corp. 161,316 5,505 USX-Marathon Group, Inc. 207,402 5,639 ----------- 54,231 OIL: INTERNATIONAL 4.2% ------------------------------------------------------------------------- Chevron Corp. 436,168 35,820 (4) Exxon Mobil Corp. 2,327,853 207,615 * Royal Dutch Petroleum Co. 1,432,980 85,083 Texaco, Inc. 368,354 21,756 ----------- 350,274 OPTICAL & PHOTO 0.1% ------------------------------------------------------------------------- Eastman Kodak Co. 205,781 9,234 Polaroid Corp. 29,495 297 ----------- 9,531 PAPER & FOREST PRODUCTS 0.7% ------------------------------------------------------------------------- Boise Cascade Corp. 37,216 1,068 Fort James Corp. 136,895 4,509 Georgia-Pacific Group 113,282 3,044 International Paper Co. 321,828 11,787 Kimberly-Clark Corp. 359,613 23,734 Louisiana-Pacific Corp. 69,228 588 Mead Corp. 67,719 1,960 Potlatch Corp. 18,660 625 Temple-Inland, Inc. 34,019 1,522 Westvaco Corp. 67,313 1,918 Weyerhaeuser Co. 146,717 6,887 Willamette Industries, Inc. 72,832 2,645 ----------- 60,287 PRODUCER GOODS & MANUFACTURING 6.4% ------------------------------------------------------------------------- Avery Dennison Corp. 74,115 3,743 Briggs & Stratton Corp. 15,200 542 Caterpillar, Inc. 230,486 8,081 Cooper Industries, Inc. 61,555 2,354 Corning, Inc. 590,646 45,184 Deere & Co. 155,827 5,736 Dover Corp. 135,465 5,749 Emerson Electric Co. 285,626 20,976 - FMC Corp. 20,778 1,579 # (1) General Electric Co. 6,617,920 362,745 Honeywell International, Inc. 535,243 28,803 Illinois Tool Works, Inc. 201,821 11,214 Ingersoll-Rand Co. 106,597 4,024 Johnson Controls, Inc. 57,275 3,415 Millipore Corp. 30,991 1,627 Minnesota Mining & Manufacturing Co. 264,468 25,554 Pall Corp. 81,066 1,748 Parker-Hannifin Corp. 75,833 3,138 Snap-On, Inc. 38,150 975 The Timken Co. 40,332 567 W.W. Grainger, Inc. 62,008 1,980 ----------- 539,734
See the Financial Notes, which 17 are integral to this information. 22 SCHWAB S&P 500 FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) RAILROAD & SHIPPING 0.3% ------------------------------------------------------------------------- Burlington Northern Santa Fe Corp. 269,375 7,155 CSX Corp. 144,855 3,667 Norfolk Southern Corp. 255,688 3,612 Union Pacific Corp. 165,716 7,768 ----------- 22,202 RETAIL 5.1% ------------------------------------------------------------------------- Albertson's, Inc. 283,837 6,723 - AutoZone, Inc. 86,215 2,312 - Bed, Bath & Beyond, Inc. 189,000 4,879 - Best Buy Co., Inc. 137,900 6,921 Circuit City Stores-Circuit City Group 136,012 1,802 - Consolidated Stores Corp. 74,000 879 - Costco Wholesale Corp. 298,088 10,917 CVS Corp. 260,618 13,796 Dillards, Inc., Class A 60,933 640 Dollar General Corp. 219,057 3,395 - Federated Department Stores, Inc. 138,537 4,511 Gap, Inc. 568,202 14,667 Home Depot, Inc. 1,546,725 66,509 J.C. Penney Co., Inc. 176,920 2,068 - Kmart Corp. 317,117 1,883 - Kohl's Corp. 219,800 11,910 - Kroger Co. 552,062 12,456 Limited, Inc. 287,734 7,265 Longs Drug Stores, Inc. 25,682 562 Lowe's Cos., Inc. 255,826 11,688 May Department Stores Co. 198,179 5,202 Nordstrom, Inc. 87,822 1,444 - Office Depot, Inc. 207,000 1,721 RadioShack Corp. 124,242 7,408 - Safeway, Inc. 332,200 18,167 Sears, Roebuck & Co. 228,418 6,791 - Staples, Inc. 302,550 4,311 Target Corp. 608,020 16,797 + Tiffany & Co., Inc. 97,050 4,143 TJX Cos., Inc. 197,182 5,373 - Toys 'R' Us, Inc. 135,896 2,336 (10) Wal-Mart Stores, Inc. 2,984,262 135,411 Walgreen Co. 674,856 30,790 Winn-Dixie Stores, Inc. 95,211 1,833 ----------- 427,510 STEEL 0.1% ------------------------------------------------------------------------- Allegheny Technologies, Inc. 54,351 1,101 - Bethlehem Steel Corp. 85,535 246 Nucor Corp. 55,684 1,932 USX-U.S. Steel Group, Inc. 58,879 938 Worthington Industries, Inc. 58,102 556 ----------- 4,773 TELEPHONE 6.2% ------------------------------------------------------------------------- Alltel Corp. 210,390 13,557 AT&T Corp. 2,507,975 58,154 - + Avaya, Inc. 186,052 2,500 BellSouth Corp. 1,252,192 60,497 CenturyTel, Inc. 93,150 3,586 - Global Crossing Ltd. 587,255 13,874 - + Qwest Communications International, Inc. 1,109,702 53,959 SBC Communications, Inc. 2,263,930 130,600 Sprint Corp. (FON Group) 589,398 15,030 - Sprint Corp. (PCS Group) 620,298 23,649 Verizon Communications 1,815,456 104,956 - Worldcom, Inc. 1,918,204 45,557 ----------- 525,919 TOBACCO 0.7% ------------------------------------------------------------------------- Philip Morris Cos., Inc. 1,503,862 55,079 UST, Inc. 108,300 2,735 ----------- 57,814 TRAVEL & RECREATION 0.3% ------------------------------------------------------------------------- Brunswick Corp. 57,407 1,116 Carnival Corp. 392,800 9,746 - Harrah's Entertainment, Inc. 79,911 2,287 Hilton Hotels Corp. 248,872 2,364 Marriott International, Inc., Class A 160,532 6,502 ----------- 22,015
18 See the Financial Notes, which are integral to this information. 23
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) TRUCKING & FREIGHT 0.0% ------------------------------------------------------------------------- PACCAR, Inc. 51,163 2,152 Ryder Systems, Inc. 38,862 768 ----------- 2,920 UTILITIES: ELECTRIC & GAS 3.0% ------------------------------------------------------------------------- - AES Corp. 305,300 17,249 Ameren Corp. 91,713 3,646 American Electric Power Co., Inc. 215,160 8,929 CP&L Energy, Inc. 106,016 4,274 Cinergy Corp. 105,600 3,234 CMS Energy Corp. 80,700 2,179 Coastal Corp. 143,042 10,791 Columbia Energy Group 52,974 3,811 Consolidated Edison, Inc. 140,791 4,954 Constellation Energy Group, Inc. 100,108 4,173 Dominion Resources, Inc. 159,055 9,474 DTE Energy Co. 95,403 3,446 Duke Energy Corp. 246,215 21,282 + Dynegy, Inc., Class A 206,300 9,554 Edison International 218,229 5,210 El Paso Energy Corp. 154,879 9,709 Enron Corp. 495,378 40,652 Entergy Corp. 148,504 5,690 FirstEnergy Corp. 151,481 3,920 Florida Progress Corp. 65,400 3,478 FPL Group, Inc. 118,680 7,833 GPU, Inc. 80,852 2,673 + KeySpan Corp. 89,200 3,139 - Niagara Mohawk Holdings, Inc. 106,902 1,710 NICOR, Inc. 30,801 1,088 ONEOK, Inc. 19,100 757 Peoples Energy Corp. 23,073 793 PG&E Corp. 257,216 6,929 Pinnacle West Capital Corp. 56,200 2,441 PPL Corp. 96,445 3,972 Public Service Enterprise Group, Inc. 143,385 5,950 Reliant Energy, Inc. 196,086 8,101 Sempra Energy 136,530 2,824 Southern Co. 433,531 12,735 TXU Corp. 176,587 6,545 Williams Cos., Inc. 295,964 12,375 ----------- 255,520
OTHER INVESTMENT COMPANIES 0.2% of investments Provident Institutional TempFund 16,410,160 16,410
U.S. TREASURY OBLIGATIONS 0.0% of investments SECURITY FACE VALUE MKT. VALUE RATE, MATURITY DATE ($ X 1,000) ($ X 1,000) # U.S. Treasury Bills 5.96%-6.03%, 12/14/00 645 640
- -------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. See the Financial Notes, which 19 are integral to this information. 24 SCHWAB S&P 500 FUND -- FINANCIALS Statement of ASSETS AND LIABILITIES As of October 31, 2000. All numbers x 1,000 except NAV. ASSETS - ---------------------------------------------------------------------- Investments, at market value $8,420,533 a Collateral held for securities on loan 115,423 b Receivables: Fund shares sold 8,715 Interest 123 Dividends 5,741 Investments sold 1,121 Income from lending securities 7 Most recent daily change in value of futures 239 Prepaid expenses + 201 ------------ TOTAL ASSETS 8,552,103 LIABILITIES - ---------------------------------------------------------------------- Collateral held for securities on loan 115,423 b Payables: Fund shares redeemed 8,635 Investments bought 12,253 Investment adviser and administrator fees 39 Transfer agent and shareholder service fees 93 Accrued expenses + 568 ------------ TOTAL LIABILITIES 137,011 NET ASSETS - ---------------------------------------------------------------------- TOTAL ASSETS 8,552,103 TOTAL LIABILITIES - 137,011 ------------ NET ASSETS $8,415,092 NET ASSETS BY SOURCE Capital received from investors 6,416,309 Net investment income not yet distributed 57,849 Net realized capital losses (126,013) Net unrealized capital gains 2,066,947 c
a The fund paid $6,353,069 for these securities. Not counting short-term obligations and government securities, the fund paid $1,439,260 for securities during the report period and received $756,490 from securities it sold or that matured. This includes $7,140 in transactions with other SchwabFunds(R). b Market value of securities loaned: $112,674. c These derive from investments and futures. As of the report date, the fund had thirty-three open S&P 500 futures contracts due to expire on December 15, 2000, with a contract value of $11,882 and unrealized losses of $517. NET ASSET VALUE (NAV)
SHARES SHARE CLASS NET ASSETS / OUTSTANDING = NAV Investor Shares $3,617,623 163,340 $22.15 Select Shares(R) $4,356,661 196,122 $22.21 e.Shares(R) $ 440,808 19,881 $22.17
FEDERAL TAX DATA - -------------------------------------------------------- COST BASIS OF PORTFOLIO $6,453,094 NET UNREALIZED GAINS AND LOSSES: Gains $2,627,914 Losses + (660,992) ------------ $1,966,922 RECLASSIFICATIONS: Capital received from investors $2 Reclassified as: Net realized capital losses ($1) Net investment income not yet distributed ($1) UNUSED CAPITAL LOSSES: Expires 10/31 of: Loss amount 2008 $26,504
20 See the Financial Notes, which are integral to this information. 25 Statement of OPERATIONS For November 1, 1999 through October 31, 2000. All numbers x 1,000.
INVESTMENT INCOME - ---------------------------------------------------------------------- Dividends $91,714 a Interest 1,181 Lending of securities + 780 ------------ TOTAL INVESTMENT INCOME 93,675 NET REALIZED GAINS AND LOSSES - ---------------------------------------------------------------------- Net realized losses on investments sold (113,542) Net realized losses on futures contracts + (1,042) ------------ NET REALIZED LOSSES (114,584) NET UNREALIZED GAINS AND LOSSES - ---------------------------------------------------------------------- Net unrealized gains on investments 465,545 Net unrealized losses on futures contracts + (696) ------------ NET UNREALIZED GAINS 464,849 EXPENSES - ---------------------------------------------------------------------- Investment adviser and administrator fees 17,543 b Transfer agent and shareholder service fees: Investor Shares 8,629 c Select Shares(R) 4,123 c e.Shares(R) 453 c Trustees' fees 46 d Custodian fees 350 Portfolio accounting fees 1,137 Professional fees 84 Registration fees 677 Shareholder reports 513 Interest expense 95 Proxy fees 614 Other expenses + 109 ------------ Total expenses 34,373 Expense reduction - 12,482 e ------------ NET EXPENSES 21,891 INCREASE IN NET ASSETS FROM OPERATIONS - ---------------------------------------------------------------------- TOTAL INVESTMENT INCOME 93,675 NET EXPENSES - 21,891 ------------ NET INVESTMENT INCOME 71,784 NET REALIZED LOSSES (114,584) f NET UNREALIZED GAINS + 464,849 f ------------ INCREASE IN NET ASSETS FROM OPERATIONS $422,049
a An additional $430 was withheld for foreign taxes. b Calculated as a percentage of average daily net assets: 0.20% of the first $500 million and 0.17% of assets beyond that. Prior to February 29, 2000, the percentages were 0.36% of the first $1 billion, 0.33% of the next $1 billion and 0.31% of assets beyond that. c Calculated as a percentage of average daily net assets: for transfer agent services, 0.05% of the fund's assets; for shareholder services, 0.20%, 0.05%, and 0.05% of the assets of each respective share class. d For the fund's independent trustees only. e Includes $6,009 from the investment adviser (CSIM) and $6,473 from the transfer agent and shareholder service agent (Schwab). These reductions reflect a guarantee by CSIM and Schwab to limit the operating expenses of this fund through at least February 28, 2001, as follows:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS - -------------------------------------------- Investor Shares 0.35 Select Shares 0.19 e.Shares 0.28
This limit does not include interest, taxes and certain non-routine expenses. f These add up to a net gain on investments of $350,265. See the Financial Notes, which 21 are integral to this information. 26 SCHWAB S&P 500 FUND - FINANCIALS Statements of CHANGES IN NET ASSETS For the current and prior report periods. All numbers x 1,000.
OPERATIONS - ---------------------------------------------------------------------------------- 11/1/99-10/31/00 11/1/98-10/31/99 Net investment income $71,784 $65,370 Net realized gains or losses (114,584) 22,632 Net unrealized gains + 464,849 1,063,273 ----------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 422,049 1,151,275 DISTRIBUTIONS PAID - ---------------------------------------------------------------------------------- DIVIDENDS FROM NET INVESTMENT INCOME Investor Shares 27,441 18,212 Select Shares(R) 38,359 19,016 e.Shares(R) + 4,350 2,807 ----------------------------------- TOTAL DIVIDENDS FROM NET INVESTMENT INCOME 70,150 40,035 a DISTRIBUTIONS FROM NET REALIZED GAINS Investor Shares 9,855 -- Select Shares 11,814 -- e.Shares + 1,355 -- ----------------------------------- TOTAL DISTRIBUTIONS FROM NET REALIZED GAINS $23,024 $ --
TRANSACTIONS IN FUND SHARES - ---------------------------------------------------------------------------------- 11/1/99-10/31/00 11/1/98-10/31/99 QUANTITY VALUE QUANTITY VALUE Shares sold: Investor Shares 71,072 $1,573,083 94,157 $1,863,484 Select Shares 88,320 1,957,058 141,228 2,801,786 e.Shares + 8,742 193,616 18,523 365,979 ------------------------------------------------- TOTAL SHARES SOLD 168,134 $3,723,757 253,908 $5,031,249 Shares reinvested: Investor Shares 1,645 $35,986 962 $17,632 Select Shares 2,108 46,155 950 17,420 e.Shares + 238 5,211 140 2,572 ------------------------------------------------- TOTAL SHARES REINVESTED 3,991 $87,352 2,052 $37,624 Shares redeemed: Investor Shares 59,693 $1,315,607 58,283 $1,163,104 Select Shares 70,932 1,565,993 56,115 1,125,070 e.Shares + 9,591 210,667 14,615 288,838 ------------------------------------------------- TOTAL SHARES REDEEMED 140,216 $3,092,267 129,013 $2,577,012 NET INCREASE 31,909 $718,842 126,947 $2,491,861 b
SHARES OUTSTANDING AND NET ASSETS - ---------------------------------------------------------------------------------- 11/1/99-10/31/00 11/1/98-10/31/99 SHARES NET ASSETS SHARES NET ASSETS Beginning of period 347,434 $7,367,375 220,487 $3,764,274 Total increase + 31,909 1,047,717 126,947 3,603,101 c ------------------------------------------------- END OF PERIOD 379,343 $8,415,092 347,434 $7,367,375 d
a UNAUDITED For corporations, 100% of the fund's dividends for the report period qualify for the dividends-received deduction. b Represents shares sold plus shares reinvested, minus shares redeemed. c Figures for shares represent the net changes in shares from the transactions described above. Figures for net assets represent the changes in net assets from operations plus the value of transactions in fund shares, minus distributions paid. d Includes net investment income not yet distributed in the amount of $57,849 for the current period and $56,216 for the prior period. Percent of fund shares owned by other SchwabFunds(R) as of the end of the current period: SCHWAB MARKETTRACK PORTFOLIOS(R) All Equity Portfolio 2.3% Growth Portfolio 1.3% Balanced Portfolio 0.9% Conservative Portfolio 0.2% SCHWAB ANNUITY PORTFOLIOS Growth Portfolio II Less than 0.1%
22 See the Financial Notes, which are integral to this information. 27 SCHWAB 1000 FUND(R) [PHOTO OF GERI HOM] "Both share classes of the fund tracked the performance of the Schwab 1000 Index for the report period." Portfolio Manager Geri Hom GERI HOM, a vice president of the investment adviser, has overall responsibility for the management of the fund. Prior to joining the firm in 1995, she worked for nearly 15 years in equity index management. TICKER SYMBOLS INVESTOR SHARES SNXFX SELECT SHARES(R) SNXSX - -------------------------------------------------------------------------------- [INVESTMENT STYLE 1 AND MARKET CAP 1 GRAPHIC] VALUE BLEND GROWTH X LARGE MEDIUM SMALL
Because it includes so many U.S. stocks and industries, this fund could make sense for long-term investors seeking broad diversification in a single investment. It's also a logical choice for stock investors who want exposure beyond the large-cap segment of the U.S. stock market. - -------------------------------------------------------------------------------- THE FUND'S GOAL IS TO MATCH THE TOTAL RETURN OF THE SCHWAB 1000 INDEX.(R) MANAGER'S PERSPECTIVE GIVEN THE VOLATILITY THAT PREVAILED IN EQUITY MARKETS, THE FUND PERFORMED COMPARATIVELY WELL DURING THE REPORT PERIOD. A combination of factors caused investors to trim their overall exposure to stocks. Among these factors were high stock prices, uncertainty over the outcome of the presidential election and potential interest rate hikes. Toward the end of the report period, evidence of a slowing economy reduced fears of interest rate hikes. Ordinarily this might have helped the market regain its footing, but concerns about high oil prices kept stocks in flux. OVER THE REPORT PERIOD, LARGE-CAP STOCKS RELINQUISHED THEIR FIVE-YEAR HOLD AS THE STRONGEST PERFORMING ASSET CLASS. Small-cap stocks emerged as the leaders this time, but mid-cap stocks also beat large-caps. This helped the Schwab 1000 Index slightly outperform the S&P 500(R) Index. In addition to being broader than the S&P 500 and including a portion of the mid-cap sector, the Schwab 1000 Index is more heavily weighted in the technology and the healthcare sectors. These two sectors, while among the most volatile, also contributed to the fund's returns for the report period. 1 Source: Morningstar, Inc. This style assessment is the result of comparing the fund with the S&P 500 Index, based on P/E, P/B and median market cap. The assessment reflects the fund's portfolio as of 10/31/00, which may have changed since then, and is not a precise indication of risk or performance -- past, present or future. 23 28 Schwab 1000 Fund(R) PERFORMANCE: INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS as of 10/31/00 This chart compares performance of the fund's Investor Shares with the Schwab 1000 Index(R) and the Morningstar Large-Cap Fund category. [BAR CHART]
1 YEAR 5 YEARS SINCE INCEPTION: 4/2/91 -------------------------- -------------------------- ------------------------ (0.24%) (0.43%) (0.46%) -------------- ---------------- ----------------- Total Return 2 8.34% 8.58% 8.70% 1 20.98% 21.41% 18.64% 17.10% 17.56% n/a % of Return Lost to Taxes 3.36% -- 19.77% 1 2.34% -- 12.82% n/a -- n/a AFTER-TAX RETURN 2 8.06% -- 6.98% 1 20.49% -- 16.25% n/a -- n/a
PERFORMANCE OF A $10,000 INVESTMENT Shows performance since inception of a hypothetical $10,000 investment in the fund's Investor Shares, compared to a similar investment in two indices: the Schwab 1000 Index and the S&P 500(R) Index. [LINE GRAPH]
INVESTOR SHARES SCHWAB 1000 INDEX S&P 500 INDEX 4/2/91 10000 10000 10000 4/30/91 9910 9898 9908 5/31/91 10320 10311 10335 6/30/91 9850 9840 9861 7/31/91 10320 10310 10321 8/31/91 10600 10591 10566 9/30/91 10460 10455 10389 10/31/91 10630 10625 10528 11/30/91 10240 10227 10104 12/31/91 11425 11412 11260 1/31/92 11283 11272 11050 2/29/92 11425 11415 11193 3/31/92 11171 11163 10975 4/30/92 11404 11392 11298 5/31/92 11404 11457 11353 6/30/92 11465 11257 11184 7/31/92 11726 11728 11641 8/31/92 11480 11486 11403 9/30/92 11623 11646 11537 10/31/92 11746 11763 11577 11/30/92 12208 12233 11971 12/31/92 12398 12428 12119 1/31/93 12502 12539 12220 2/28/93 12595 12632 12387 3/31/93 12896 12948 12648 4/30/93 12533 12583 12342 5/31/93 12896 12957 12673 6/30/93 12958 13024 12710 7/31/93 12905 12989 12659 8/31/93 13397 13492 13139 9/30/93 13355 13454 13038 10/31/93 13544 13654 13308 11/30/93 13355 13462 13181 12/31/93 13592 13700 13341 1/31/94 14005 14136 13794 2/28/94 13645 13781 13420 3/31/94 13042 13169 12837 4/30/94 13190 13326 13001 5/31/94 13349 13488 13213 6/30/94 12988 13127 12889 7/31/94 13405 13558 13312 8/31/94 13971 14147 13856 9/30/94 13651 13825 13518 10/31/94 13918 14095 13821 11/30/94 13416 13590 13318 12/31/94 13577 13767 13514 1/31/95 13923 14121 13864 2/28/95 14474 14700 14404 3/31/95 14852 15094 14829 4/30/95 15219 15476 15264 5/31/95 15770 16048 15874 6/30/95 16191 16490 16242 7/31/95 16807 17111 16779 8/31/95 16936 17245 16821 9/30/95 17606 17949 17531 10/31/95 17520 17859 17468 11/30/95 18276 18646 18233 12/31/95 18547 18924 18585 1/31/96 19095 19499 19217 2/29/96 19379 19789 19396 3/31/96 19554 19980 19582 4/30/96 19883 20321 19870 5/31/96 20354 20812 20380 6/30/96 20299 20779 20458 7/31/96 19335 19794 19554 8/31/96 19861 20327 19966 9/30/96 20967 21465 21088 10/31/96 21394 21899 21670 11/30/96 22938 23485 23308 12/31/96 22549 23103 22847 1/31/97 23846 24442 24272 2/28/97 23935 24528 24464 3/31/97 22870 23457 23461 4/30/97 24101 24696 24859 5/31/97 25631 26291 26371 6/30/97 26695 27402 27552 7/31/97 28857 29615 29743 8/31/97 27471 28216 28077 9/30/97 28946 29732 29613 10/31/97 27992 28756 28624 11/30/97 29167 29983 29949 12/31/97 29747 30582 30464 1/31/98 29960 30818 30802 2/28/98 32166 33116 33023 3/31/98 33801 34830 34714 4/30/98 34149 35211 35065 5/31/98 33398 34441 34462 6/30/98 34742 35824 35861 7/31/98 34260 35324 35481 8/31/98 29142 30049 30357 9/30/98 31023 32014 32303 10/31/98 33487 34602 34929 11/30/98 35570 36762 37046 12/31/98 37826 39090 39180 1/31/99 39259 40575 40818 2/28/99 37939 39256 39548 3/31/99 39462 40820 41130 4/30/99 41065 42505 42722 5/31/99 40117 41535 41714 6/30/99 42115 43637 44029 7/31/99 40772 42247 42655 8/31/99 40377 41900 42442 9/30/99 39304 40655 41279 10/31/99 41901 43397 43891 11/30/99 42917 44410 44784 12/31/99 45770 47386 47422 1/31/00 43622 45179 45041 2/29/00 43634 45237 44188 3/31/00 47406 49172 48510 4/30/00 45622 47326 47050 5/31/00 44429 46094 46085 6/30/00 45622 47357 47224 7/31/00 44952 46630 46487 8/31/00 47997 49800 49374 9/30/00 45781 47500 46767 10/31/00 45395 47121 46571
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made--currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Large-Cap Fund category that had track records of at least one year and 1,082 funds with track records of at least five years. These funds may or may not use tax-efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 24 29 PERFORMANCE: SELECT SHARES(R) AVERAGE ANNUAL TOTAL RETURNS as of 10/31/00 This chart compares performance of the fund's Select Shares with the Schwab 1000 Index(R) and the Morningstar Large-Cap Fund category. [BAR CHART]
1 YEAR SINCE INCEPTION: 5/19/97 ------------------------ ------------------------ (0.12%) (0.27%) -------------- ---------------- Total Return 2 8.46% 8.58% 8.70% 1 18.87% 19.14% n/a % of Return Lost to Taxes 4.02% -- 19.77% 1 n/a -- n/a AFTER-TAX RETURN 2 8.12% -- 6.98% 1 n/a -- n/a
PERFORMANCE OF A $50,000 INVESTMENT Shows performance since inception of a hypothetical $50,000 investment in the fund's Select Shares, compared to a similar investment in two indices: the Schwab 1000 Index and the S&P 500(R) Index. [LINE GRAPH}
SELECT SHARES SCHWAB 1000 INDEX S&P 500 INDEX 5/19/97 50000 50000 50000 5/31/97 51040 51064 50930 6/30/97 53180 53222 53212 7/31/97 57490 57518 57442 8/31/97 54750 54801 54225 9/30/97 57685 57746 57191 10/31/97 55785 55851 55281 11/30/97 58150 58233 57841 12/31/97 59325 59398 58836 1/31/98 59725 59855 59489 2/28/98 64145 64318 63778 3/31/98 67405 67648 67043 4/30/98 68100 68387 67720 5/31/98 66625 66893 66556 6/30/98 69305 69578 69258 7/31/98 68345 68606 68524 8/31/98 58140 58362 58629 9/30/98 61915 62179 62387 10/31/98 66825 67206 67459 11/30/98 71000 71400 71547 12/31/98 75505 75922 75668 1/31/99 78385 78805 78831 2/28/99 75750 76244 76379 3/31/99 78795 79282 79434 4/30/99 82015 82553 82509 5/31/99 80120 80671 80561 6/30/99 84110 84753 85033 7/31/99 81450 82052 82380 8/31/99 80665 81380 81968 9/30/99 78545 78960 79721 10/31/99 83725 84287 84767 11/30/99 85755 86255 86491 12/31/99 91470 92034 91585 1/31/00 87180 87747 86987 2/29/00 87225 87861 85341 3/31/00 94765 95504 93687 4/30/00 91200 91917 90867 5/31/00 88835 89525 89004 6/30/00 91220 91977 91203 7/31/00 89905 90566 89780 8/31/00 95990 96722 95356 9/30/00 91585 92255 90322 10/31/00 90810 91519 89942
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made--currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Large-Cap Fund category that had track records of at least one year and 1,082 funds with track records of at least five years. These funds may or may not use tax-efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 25 30 SCHWAB 1000 FUND(R) FUND FACTS
TOP TEN HOLDINGS 1 as of 10/31/00 1 GENERAL ELECTRIC CO. 4.0% 2 CISCO SYSTEMS, INC. 2.8% 3 MICROSOFT CORP. 2.7% 4 EXXON MOBIL CORP. 2.3% 5 INTEL CORP. 2.2% 6 PFIZER, INC. 2.0% 7 CITIGROUP, INC. 1.7% 8 AMERICAN INTERNATIONAL GROUP, INC. 1.7% 9 MERCK & CO., INC. 1.5% 10 WAL-MART STORES, INC. 1.5% - -------------------------------------------------------------------------------- TOTAL PERCENTAGE OF INVESTMENTS 22.4%
STATISTICS as of 10/31/00
PEER GROUP FUND AVERAGE 2 - -------------------------------------------------------------------------------- Number of Holdings 938 137 - -------------------------------------------------------------------------------- Median Market Cap ($ Mil) $68,803 $56,749 - -------------------------------------------------------------------------------- Price/Earnings (P/E) Ratio 34.3 34.3 - -------------------------------------------------------------------------------- Price/Book (P/B) Ratio 9.0 8.7 - -------------------------------------------------------------------------------- 12-Month Yield Investor Shares 0.65% 0.45% - -------------------------------------------------------------------------------- Portfolio Turnover Rate 9% 98% - -------------------------------------------------------------------------------- Three-Year Beta 1.00 0.95 - --------------------------------------------------------------------------------
EXPENSE RATIO as of 10/31/00 [BAR CHART] INVESTOR SHARES 0.46% 3 SELECT SHARES(R) 0.35% 3 PEER GROUP AVERAGE 1.34% 2
INDEX COMPOSITION BY INDUSTRY 4 These charts show the size of the ten largest industries in the Schwab 1000 Index.(R) As the charts show, the total portion represented by these industries has been growing over the past five years. [PIE CHART] AS OF 10/31/00 - -------------------------------------- 1 13.9% Business Machines 2 12.1% Drugs & Medicine 3 9.4% Electronics 4 7.5% Miscellaneous Finance 5 6.3% Telephone 6 5.7% Business Services 7 5.6% Producer Goods 8 5.3% Banks 9 5.1% Retail 10 4.0% Insurance 25.1% Other
[PIE CHART] AS OF 10/31/99 - -------------------------------------- 1 12.5% Business Machines 2 10.5% Drugs & Medicine 3 8.4% Telephone 4 8.0% Electronics 5 6.7% Miscellaneous Finance 6 6.7% Banks 7 6.4% Retail 8 5.2% Producer Goods 9 4.7% Business Services 10 4.1% Media 26.8% Other
[PIE CHART] AS OF 10/31/95 - -------------------------------------- 1 9.7% Drugs & Medicine 2 8.2% Telephone 3 6.9% Banks 4 6.4% Electronics 5 5.8% Business Machines 6 5.8% Food & Agriculture 7 5.6% Energy & Utilities 8 4.8% Producer Goods 9 4.8% Retail 10 4.4% Miscellaneous Finance 37.8% Other
1 This list is not a recommendation of any security by the investment adviser. Portfolio holdings may have changed since the report date. 2 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Large-Cap Fund category. 3 Guaranteed by Schwab and the investment adviser through 2/28/01. The actual expense ratio during the report period was 0.01% higher due to certain non-routine expenses. 4 Source: Charles Schwab & Co., Inc. 26 31 SCHWAB 1000 FUND(R) -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. THE FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
11/1/99- 11/1/98- 11/1/97- 9/1/97- 9/1/96- 9/1/95 INVESTOR SHARES 10/31/00 10/31/99 10/31/98 10/31/97 8/31/97 8/31/96 PER-SHARE DATA ($) - -------------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 37.12 29.90 25.25 24.78 18.14 15.68 -------------------------------------------------------------------- Income from investment operations: Net investment income 0.26 0.26 0.27 0.04 0.28 0.24 Net realized and unrealized gains 2.83 7.21 4.64 0.43 6.62 2.45 -------------------------------------------------------------------- Total income from investment operations 3.09 7.47 4.91 0.47 6.90 2.69 Less distributions: Dividends from net investment income (0.26) (0.25) (0.26) -- (0.26) (0.23) -------------------------------------------------------------------- Net asset value at end of period 39.95 37.12 29.90 25.25 24.78 18.14 ==================================================================== Total return (%) 8.34 25.12 19.63 1.90 1 38.32 17.27 RATIOS/SUPPLEMENTAL DATA (%) - -------------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.46 3 0.46 0.46 0.46 2 0.47 0.49 Expense reductions reflected in above ratio 0.04 0.05 0.05 0.04 2 0.06 0.08 Ratio of net investment income to average net assets 0.63 0.78 1.02 1.00 2 1.33 1.66 Portfolio turnover rate 9 3 2 -- 2 2 Net assets, end of period ($ x 1,000,000) 5,083 4,925 3,657 2,611 2,499 1,560
1 Not annualized. 2 Annualized. 3 Would have been 0.47% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which 27 are integral to this information. 32 SCHWAB 1000 FUND(R) -- FINANCIALS FINANCIAL HIGHLIGHTS
11/1/99- 11/1/98- 11/1/97- 9/1/97- 5/19/97 1 - SELECT SHARES(R) 10/31/00 10/31/99 10/31/98 10/31/97 8/31/97 PER-SHARE DATA ($) - --------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 37.16 29.93 25.26 24.79 22.64 --------------------------------------------------------------- Income from investment operations: Net investment income 0.29 0.30 0.32 0.04 0.05 Net realized and unrealized gains 2.84 7.22 4.63 0.43 2.10 --------------------------------------------------------------- Total income from investment operations 3.13 7.52 4.95 0.47 2.15 Less distributions: Dividends from net investment income (0.31) (0.29) (0.28) -- -- --------------------------------------------------------------- Net asset value at end of period 39.98 37.16 29.93 25.26 24.79 =============================================================== Total return (%) 8.46 25.29 19.79 1.90 2 9.50 2 RATIOS/SUPPLEMENTAL DATA (%) - --------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.35 4 0.35 0.35 0.35 3 0.35 3 Expense reductions reflected in above ratio -- 0.02 0.04 0.06 3 0.33 3 Ratio of net investment income to average net assets 0.74 0.89 1.11 1.11 3 1.26 3 Portfolio turnover rate 9 3 2 -- 2 Net assets, end of period ($ x 1,000,000) 2,159 2,214 1,041 426 347
1 Commencement of operations. 2 Not annualized. 3 Annualized. 4 Would have been 0.36% if certain non-routine expenses (proxy fees) had been included. 28 See the Financial Notes, which are integral to this information. 33 PORTFOLIO HOLDINGS As of October 31, 2000 This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics. With the top ten holdings, the number in the circle is the security's rank among the top ten. (1) Top ten holding + New holding (since 10/31/99) - Non-income producing security * American Depositary Receipt # Collateral for open futures contracts ## Issuer is affiliated with the fund's adviser The pie chart below shows the fund's major asset categories and the market value and cost of the securities in each category. ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 99.9% COMMON STOCK Market Value: $7,587,508 Cost: $4,176,660 0.0% OTHER INVESTMENT COMPANIES Market Value: $3,284 Cost: $3,284 0.1% SHORT TERM INVESTMENT Market Value: $7.542 Cost: $7,542 0.0% U.S. TREASURY OBLIGATIONS Market Value: $313 Cost: $313 - ---------------------------------- 100.0% TOTAL INVESTMENTS Market Value: $7,598,647 Cost: $4,187,799
COMMON STOCK 99.9% of investments
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) AEROSPACE / DEFENSE 1.3% ----------------------------------------------------------------------------- B.F. Goodrich Co. 56,792 2,325 Boeing Co. 498,982 33,837 Crane Co. 32,850 860 General Dynamics Corp. 113,600 8,130 - Litton Industries, Inc. 30,500 1,584 Lockheed Martin Corp. 235,384 8,439 Northrop Grumman Corp. 39,900 3,352 Raytheon Co., Class A 56,100 1,795 Raytheon Co., Class B 189,000 6,461 Rockwell International Corp. 94,600 3,719 Textron, Inc. 80,400 4,055 TRW, Inc. 66,700 2,801 United Technologies Corp. 260,527 18,188 ----------- 95,546 AIR TRANSPORTATION 0.4% ----------------------------------------------------------------------------- - AMR Corp. 85,200 2,790 - Continental Airlines, Inc., Class B 39,400 2,069 Delta Air Lines, Inc. 67,400 3,185 - FedEx Corp. 163,860 7,678 Galileo International, Inc. 50,300 993 - Northwest Airlines Corp., Class A 47,100 1,342 Southwest Airlines Co. 277,350 7,904 - U.S. Airways Group, Inc. 36,900 1,393 UAL Corp. 27,600 1,047 ----------- 28,401 ALCOHOLIC BEVERAGES 0.4% ----------------------------------------------------------------------------- Adolph Coors Co., Class B 21,000 1,337 Anheuser-Busch Cos., Inc. 501,600 22,948 Brown-Forman Corp., Class B 36,700 2,234 ----------- 26,519 APPAREL 0.2% ----------------------------------------------------------------------------- - Abercrombie & Fitch Co., Class A 58,000 1,367 - Jones Apparel Group, Inc. 65,200 1,813 Liz Claiborne, Inc. 35,000 1,488 Nike, Inc., Class B 149,400 5,967 + Talbots, Inc. 20,500 1,621 VF Corp. 63,100 1,723 WestPoint Stevens, Inc. 18,000 129 ----------- 14,108 AUTOMOTIVE PRODUCTS / MOTOR VEHICLES 1.2% ----------------------------------------------------------------------------- ArvinMeritor, Inc. 39,400 660 Cummins Engine Co., Inc. 24,800 843 Dana Corp. 85,489 1,897 Danaher Corp. 80,800 5,101 Eaton Corp. 39,100 2,661 Federal-Mogul Corp. 9,600 31 Ford Motor Co. 1,051,770 27,477 General Motors Corp. 298,134 18,522 - General Motors Corp., Class H 418,294 13,553 Genuine Parts Co. 95,575 2,037 Goodyear Tire & Rubber Co. 85,500 1,582
See the Financial Notes, which 29 are integral to this information. 34 SCHWAB 1000 FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Harley-Davidson, Inc. 170,800 8,230 - Lear Corp. 36,000 981 - Navistar International Corp. 36,000 1,190 - -+ O'Reilly Automotive, Inc. 27,800 500 - SPX Corp. 20,000 2,473 - United Rentals, Inc. 40,000 860 ----------- 88,598 BANKS 5.5% ----------------------------------------------------------------------------- AmSouth Bancorp. 208,475 2,906 Associated Banc-Corp. 38,196 919 BancWest Corp. 40,000 818 Bank of America Corp. 906,691 43,578 Bank of New York Co., Inc. 410,200 23,612 Bank One Corp. 642,393 23,447 Banknorth Group, Inc. 75,800 1,374 BB&T Corp. 221,000 7,044 Centura Banks, Inc. 22,000 846 Chase Manhattan Corp. 727,090 33,083 + Citizens Banking Corp. 26,300 626 City National Corp. 25,000 859 The Colonial BancGroup, Inc. 65,000 573 Comerica, Inc. 85,296 5,144 Commerce Bancorp., Inc. N.J. 21,000 1,272 Commerce Bancshares, Inc. 31,963 1,149 Compass Bancshares, Inc. 69,412 1,262 Cullen/Frost Bankers, Inc. 29,700 989 Fifth Third Bancorp. 256,189 13,162 + First Midwest Bancorp., Inc. 22,600 566 First Tennessee National Corp. 72,600 1,670 First Union Corp. 546,722 16,573 First Virginia Banks, Inc. 24,625 1,019 Firstar Corp. 530,535 10,445 FirstMerit Corp. 46,800 1,068 FleetBoston Financial Corp. 499,940 18,998 Fulton Financial Corp. 47,643 1,042 Golden West Financial Corp. 89,700 5,029 GreenPoint Financial Corp. 56,800 1,690 Hibernia Corp., Class A 80,000 955 Hudson United Bancorp. 22,660 507 Huntington Bancshares, Inc. 134,535 1,934 J.P. Morgan & Co., Inc. 90,000 14,895 KeyCorp, Inc. 239,946 5,924 M&T Bank Corp. 26,001 1,305 Marshall & Ilsley Corp. 57,185 2,591 Mellon Financial Corp. 278,788 13,452 Mercantile Bankshares Corp. 40,675 1,530 National City Corp. 335,900 7,180 National Commerce Bancorp. 111,450 2,368 North Fork Bancorp., Inc. 96,900 1,956 Northern Trust Corp. 123,800 10,569 Old Kent Financial Corp. 74,167 2,054 Old National Bancorp. 29,559 872 Pacific Century Financial Corp. 40,350 512 Peoples Bank-Bridgeport 38,000 770 PNC Financial Services Group 165,130 11,043 Provident Financial Group, Inc. 27,000 817 Providian Financial Corp. 79,050 8,221 Regions Financial Corp. 121,765 2,869 + Roslyn Bancorp., Inc. 36,700 796 - -+ S1 Corp. 30,200 364 + Sky Financial Group, Inc. 48,730 810 SouthTrust Corp. 92,787 3,004 State Street Corp. 88,700 11,064 Summit Bancorp. 96,050 3,602 SunTrust Banks, Inc. 166,456 8,125 Synovus Financial Corp. 157,962 3,406 Trustmark Corp. 44,000 836 U.S. Bancorp. 412,798 9,985 Union Planters Corp. 73,900 2,499 UnionBanCal Corp. 90,600 1,903 Valley National Bancorp. 38,587 1,068 Wachovia Corp. 111,349 6,013 Wells Fargo & Co. 924,440 42,813 Westamerica Bancorp. 16,800 604 Wilmington Trust Corp. 18,200 958 Zions Bancorp. 46,600 2,677 ----------- 413,614 BUSINESS MACHINES & SOFTWARE 13.9% ----------------------------------------------------------------------------- - 3Com Corp. 194,350 3,450 - Adaptec, Inc. 45,400 718 Adobe Systems, Inc. 136,800 10,405 - Apple Computer, Inc. 181,700 3,555 Autodesk, Inc. 27,200 600 - BMC Software, Inc. 122,000 2,478
30 See the Financial Notes, which are integral to this information. 35
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Cabletron Systems, Inc. 102,400 2,778 - Ceridian Corp. 80,000 2,000 - -(2)Cisco Systems, Inc. 3,942,700 212,412 Comdisco, Inc. 85,066 1,047 Compaq Computer Corp. 941,868 28,642 - Compuware Corp. 179,600 1,414 - Comverse Technology, Inc. 86,400 9,655 - Dell Computer Corp. 1,437,400 42,403 Diebold, Inc. 35,818 931 - EMC Corp. 1,211,900 107,935 - Gateway, Inc. 182,000 9,393 Hewlett-Packard Co. 1,108,000 51,453 - Informix Corp. 146,900 624 -+ Integrated Device Technology, Inc. 56,800 3,199 International Business Machines Corp. 974,800 96,018 - Lexmark International Group, Inc., Class A 71,000 2,911 - Microchip Technology, Inc. 67,500 2,135 -+ Micromuse, Inc. 19,100 3,241 - -(3)Microsoft Corp. 2,923,700 201,370 - NCR Corp. 54,451 2,348 - Network Appliance, Inc. 173,700 20,670 - Novell, Inc. 170,800 1,537 - Novellus Systems, Inc. 72,700 2,976 - Oracle Corp. 3,131,514 103,340 Pitney Bowes, Inc. 141,100 4,189 - Seagate Technology, Inc. 126,560 8,843 - Silicon Graphics, Inc. 102,100 459 - Storage Technology Corp. 55,600 542 - Sun Microsystems, Inc. 880,700 97,648 -+ Sybase, Inc. 44,600 934 - Tech Data Corp. 28,000 1,166 -+ The Titan Corp. 27,700 370 Total System Services, Inc. 102,700 1,695 - Unisys Corp. 176,150 2,246 -+ Visual Networks, Inc. 13,800 51 Xerox Corp. 363,950 3,071 -+ Xircom, Inc. 16,300 230 ----------- 1,053,082 BUSINESS SERVICES 6.1% ----------------------------------------------------------------------------- - ACNielsen Corp. 35,000 838 - Affiliated Computer Services, Inc., Class A 30,000 1,671 - -+ Affymetrix, Inc. 30,400 1,683 - Allied Waste Industries, Inc. 109,065 1,009 - America Online, Inc. 1,281,515 64,627 - American Management Systems, Inc. 22,000 476 - Apollo Group, Inc., Class A 42,500 1,663 - At Home Corp., Class A 208,396 2,149 Automatic Data Processing, Inc. 347,300 22,683 - Autonation, Inc. 199,600 1,347 - -+ BEA Systems, Inc. 137,200 9,844 - -+ BroadVision, Inc. 139,000 4,135 - CDW Computer Centers, Inc. 52,000 3,351 - Cendant Corp. 403,540 4,842 - Checkfree Corp. 41,300 2,055 - Ciber, Inc. 26,400 206 Cintas Corp. 92,800 4,304 - Citrix Systems, Inc. 104,200 2,305 Computer Associates International, Inc. 328,379 10,467 - Computer Sciences Corp. 94,196 5,934 - Concord EFS, Inc. 117,612 4,859 - -+ Convergys Corp. 86,300 3,759 - -+ Credence Systems, Corp. 27,800 521 - CSG Systems International, Inc. 29,000 1,347 Deluxe Corp. 40,000 903 - DeVry, Inc. 38,700 1,429 - -+ DoubleClick, Inc. 64,700 1,051 - DST Systems, Inc. 70,000 4,314 - -+ Dun & Bradstreet Corp. 44,800 969 - Earthlink, Inc. 49,070 320 - -+ eBay, Inc. 145,600 7,498 Ecolab, Inc. 72,800 2,853 Electronic Data Systems Corp. 257,200 12,072 - -+ Entrust Technologies, Inc. 24,600 755 Equifax, Inc. 78,500 2,708 Exelon Corp. 189,787 11,411 First Data Corp. 234,302 11,744 - Fiserv, Inc. 70,693 3,707
See the Financial Notes, which 31 are integral to this information. 36 SCHWAB 1000 FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) H&R Block, Inc. 53,700 1,916 - -+ HNC Software, Inc. 13,700 278 - I2 Technologies, Inc. 107,000 18,190 - Icos Corp. 25,500 1,310 IMS Health, Inc. 164,200 3,879 Interpublic Group of Cos., Inc. 170,100 7,304 - Intuit, Inc. 112,500 6,912 - J.D. Edwards & Co. 65,000 1,682 - Keane, Inc. 39,000 507 - Lamar Advertising Co. 41,500 1,992 - Legato Systems, Inc. 46,100 411 - -+ Macrovision Corp. 21,800 1,589 Manpower, Inc. 44,400 1,546 - MarchFirst, Inc. 60,950 354 - -+ Mercury Interactive Corp. 44,300 4,917 + Metris Cos., Inc. 38,550 1,248 - -+ National Instruments Corp. 33,200 1,550 National Service Industries, Inc. 22,700 464 - -+ NCO Group, Inc. 14,200 311 - Network Associates, Inc. 76,250 1,468 - New Era of Networks, Inc. 10,000 156 - NOVA Corp. 36,000 565 Omnicom Group, Inc. 98,700 9,105 - -+ Open Market, Inc. 20,900 69 - Parametric Technology Corp. 142,400 1,753 Paychex, Inc. 209,542 11,878 - PeopleSoft, Inc. 155,400 6,782 - -+ Peregrine Systems, Inc. 76,800 1,843 - Pixar, Inc. 26,300 868 - -+ Polycom, Inc. 39,400 2,561 - -+ Profit Recovery Group International, Inc. 21,800 117 - -+ PSINet, Inc. 83,800 558 - -+ Qlogic Corp. 49,000 4,741 - -+ RealNetworks, Inc. 72,600 1,496 Reynolds & Reynolds Co., Class A 45,400 812 - Robert Half International, Inc. 109,300 3,334 - -+ RSA Security, Inc. 22,200 1,288 - Safety-Kleen, Corp. 44,000 6 - -+ Sandisk Corp. 36,200 1,945 - Sapient Corp. 63,400 2,255 - -+ SDL, Inc. 42,200 10,940 SEI Investments Co. 29,500 2,677 The ServiceMaster Co. 155,000 1,414 - Siebel Systems, Inc. 231,600 24,304 - Six Flags, Inc. 43,700 683 - Sungard Data Systems, Inc. 73,000 3,732 - Sykes Enterprises, Inc. 15,000 81 - Symantec Corp. 33,800 1,320 - Synopsys, Inc. 38,800 1,353 - -+ Technology Solutions Co. 25,200 60 - -+ Teletech Holdings, Inc. 34,600 960 - -+ TMP Worldwide, Inc. 49,500 3,446 True North Communications, Inc. 27,700 1,044 Tyco International Ltd. 40,351 2,287 - -+ VeriSign, Inc. 107,435 14,181 - VERITAS Software Corp. 223,150 31,468 - -+ Verity, Inc. 17,100 402 Viad Corp. 53,100 1,135 - Vitesse Semiconductor Corp. 102,900 7,197 Waste Management, Inc. 344,175 6,884 - Wind River Systems, Inc. 38,800 1,593 - Yahoo!, Inc. 303,400 17,787 ----------- 462,717 CHEMICAL 0.9% ----------------------------------------------------------------------------- Air Products & Chemicals, Inc. 127,200 4,746 Cabot Corp. 37,800 832 Crompton Corp. 47,000 376 Dow Chemical Co. 375,800 11,509 E.I. du Pont de Nemours & Co. 579,489 26,294 Eastman Chemical Co. 41,725 1,789 Great Lakes Chemical Corp. 29,000 968 Hercules, Inc. 54,850 1,004 Lubrizol Corp. 31,700 687 Lyondell Chemical Co. 61,300 881 Millennium Chemicals, Inc. 35,600 574 PPG Industries, Inc. 95,700 4,271 Praxair, Inc. 87,100 3,244 Rohm & Haas Co. 119,614 3,596
32 See the Financial Notes, which are integral to this information. 37
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) RPM, Inc. 58,543 523 Sigma-Aldrich Corp. 47,000 1,680 Solutia, Inc. 55,000 701 Union Carbide Corp. 73,000 3,139 Valspar Corp. 21,600 590 ----------- 67,404 CONSTRUCTION 0.3% ----------------------------------------------------------------------------- Armstrong Holdings, Inc. 20,200 58 Centex Corp. 33,000 1,221 Clayton Homes, Inc. 64,182 590 Fluor Corp. 39,000 1,365 Johns Manville Corp. 66,800 614 Lafarge Corp. 38,100 719 Martin Marietta Materials, Inc. 26,000 998 Masco Corp. 252,600 4,720 - -+ Sawtek, Inc. 23,900 1,216 Sherwin-Williams Co. 90,000 1,952 Southdown, Inc. 20,200 1,432 The Stanley Works 48,800 1,299 USG Corp. 25,700 439 Vulcan Materials Co. 59,400 2,495 ----------- 19,118 CONSUMER: DURABLE 0.2% ----------------------------------------------------------------------------- Black & Decker Corp. 46,500 1,750 + Ethan Allen Interiors, Inc. 22,400 655 Hillenbrand Industries, Inc. 37,000 1,711 Leggett & Platt, Inc. 111,600 1,827 - Linens 'N Things, Inc. 20,000 615 Maytag Corp. 45,850 1,312 - Mohawk Industries, Inc. 25,000 545 Shaw Industries, Inc. 71,200 1,322 Whirlpool Corp. 40,900 1,779 ----------- 11,516 CONSUMER: NONDURABLE 0.8% ----------------------------------------------------------------------------- American Greetings Corp., Class A 39,200 713 - Brinker International, Inc. 35,000 1,374 - Catalina Marketing Corp. 30,000 1,178 Darden Restaurants, Inc. 78,600 1,769 - Electronic Arts, Inc. 80,800 4,040 Fastenal Co. 20,700 1,189 Fortune Brands, Inc. 90,300 2,658 Harcourt General, Inc. 40,200 2,253 Hasbro, Inc. 95,087 1,022 - International Game Technology 44,600 1,633 + International Speedway Corp., Class A 30,100 967 Lancaster Colony Corp. 24,450 578 Mattel, Inc. 230,520 2,982 McDonald's Corp. 728,900 22,596 Newell Rubbermaid, Inc. 145,209 2,786 - Outback Steakhouse, Inc. 46,875 1,336 - Service Corp. International 16,200 37 - Sotheby's Holdings, Inc., Class A 30,000 816 - Starbucks Corp. 104,000 4,648 - Tricon Global Restaurants, Inc. 80,860 2,426 Wendy's International, Inc. 63,500 1,381 ----------- 58,382 CONTAINERS 0.1% ----------------------------------------------------------------------------- Bemis Co., Inc. 28,400 735 Crown Cork & Seal Co., Inc. 69,600 635 - Owens-Illinois, Inc. 64,900 385 - Sealed Air Corp. 44,199 2,127 Sonoco Products Co. 54,641 1,055 ----------- 4,937 ELECTRONICS 9.3% ----------------------------------------------------------------------------- - Acxiom Corp. 48,800 1,964 - ADC Telecommunications, Inc. 426,800 9,123 - Adelphia Communications Corp., Class A 54,507 1,809 - -+ Advanced Fibre Communications, Inc. 44,000 1,433 - Advanced Micro Devices, Inc. 172,200 3,896 - -+ Alpha Industries, Inc. 12,800 510 - Altera Corp. 228,800 9,367 - American Power Conversion Corp. 103,000 1,333 - -+ Amphenol Corp., Class A 22,800 1,465 - Analog Devices, Inc. 197,000 12,805 - Andrew Corp. 44,412 1,169 - -+ Antec Corp. 23,000 280 - Applied Materials, Inc. 449,100 23,858 - Arrow Electronics, Inc. 53,800 1,722
See the Financial Notes, which 33 are integral to this information. 38 SCHWAB 1000 FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - -+ Aspect Communications Corp. 26,900 443 - Atmel Corp. 254,900 3,808 Avnet, Inc. 48,800 1,312 AVX Corp. 96,800 2,771 - -+ Broadcom Corp., Class A 123,600 27,486 - Cadence Design Systems, Inc. 134,350 3,451 - CIENA Corp. 157,300 16,536 - CMGI, Inc. 150,500 2,540 - -+ CommScope, Inc. 28,700 726 - -+ Cree, Inc. 19,600 1,945 + CTS Corp. 15,600 670 - -+ Cypress Semiconductor Corp. 66,700 2,497 - Dallas Semiconductor Corp. 33,600 1,331 - Electronics for Imaging, Inc. 31,000 481 - -+ Emulex Corp. 20,000 2,938 - Gentex Corp. 45,000 1,114 - -+ Getty Images, Inc. 27,700 879 - -+ Harmonic, Inc. 23,965 347 Harris Corp. 36,600 1,160 - -+ Imation Corp. 20,100 398 (5)Intel Corp. 3,730,200 167,859 - -+ Internet Security Systems 23,000 2,030 ITT Industries, Inc. 50,600 1,648 - JDS Uniphase Corp. 518,900 42,258 - -+ Kemet Corp. 48,600 1,355 - KLA-Tencor Corp. 95,000 3,212 - -+ L-3 Communications Holdings, Inc. 18,000 1,187 - -+ Lam Research Corp. 66,900 1,296 Linear Technology Corp. 172,900 11,163 - Loral Space & Communications Corp. 143,800 818 - LSI Logic Corp. 171,900 5,651 Lucent Technologies, Inc. 1,853,769 43,216 - Macromedia, Inc. 30,000 2,312 - Maxim Integrated Products, Inc. 158,400 10,504 - Metromedia Fiber Network, Inc., Class A 246,600 4,685 - Micron Technology, Inc. 312,000 10,842 Molex Inc., Class A 56,900 2,237 Molex, Inc. 112,821 6,092 Moody's Corp. 89,600 2,358 Motorola, Inc. 1,210,486 30,187 - National Semiconductor Corp. 98,500 2,561 - Nextel Communications, Inc., Class A 423,200 16,267 PE Corp.--PE Biosystems Group 120,000 14,040 - Per-Se Technologies, Inc. 488 -- PerkinElmer, Inc. 27,100 3,238 - -+ Powerwave Technologies, Inc. 25,000 1,203 - QUALCOMM, Inc. 414,000 26,955 - Rambus, Inc. 52,800 2,373 - Rational Software Corp. 103,200 6,160 - -+ RF Micro Devices, Inc. 89,800 1,790 - Sanmina Corp. 83,900 9,591 - SCI Systems, Inc. 78,900 3,393 Scientific-Atlanta, Inc. 89,400 6,118 - -+ Semtech Corp. 40,400 1,303 - -+ Sensormatic Electronics Corp. 42,600 767 - Solectron Corp. 333,100 14,656 Symbol Technologies, Inc. 83,980 3,816 Tektronix, Inc. 26,600 1,895 - Tellabs, Inc. 226,800 11,326 - Teradyne, Inc. 95,500 2,984 - -+ Terayon Communication Systems, Inc. 30,200 676 Texas Instruments, Inc. 960,755 47,137 - Thermo Electron Corp. 95,784 2,778 Thomas & Betts Corp. 24,400 369 - -+ TranSwitch Corp. 45,300 2,616 - -+ Triquint Semiconductor, Inc. 43,500 1,667 - Univision Communications, Inc., Class A 114,000 4,361 - -+ Vicor Corp. 29,700 1,604 - -+ Vishay Intertechnology, Inc. 76,750 2,303 - VISX, Inc. 33,500 718 - Waters Corp. 78,400 5,689 - -+ Western Wireless Corp., Class A 28,100 1,335 - Xilinx, Inc. 181,600 13,155 ----------- 709,321
34 See the Financial Notes, which are integral to this information. 39
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) ENERGY: RAW MATERIALS 1.0% ----------------------------------------------------------------------------- Anadarko Petroleum Corp. 133,780 8,569 Apache Corp. 66,000 3,651 Baker Hughes, Inc. 183,820 6,319 - -+ BJ Services Co. 45,800 2,402 Burlington Resources, Inc. 118,367 4,261 Cooper Cameron Corp. 35,000 1,908 + Devon Energy Corp. 70,630 3,560 + Eastern Enterprises 15,000 966 ENSCO International, Inc. 77,800 2,587 EOG Resources, Inc. 64,800 2,552 - Global Marine, Inc. 94,500 2,504 Halliburton Co. 246,860 9,149 + Mitchell Energy & Development Corp., Class A 27,200 1,251 - Nabors Industries, Inc. 81,000 4,123 Noble Affiliates, Inc. 31,000 1,137 - Noble Drilling Corp. 75,000 3,117 Occidental Petroleum Corp. 204,300 4,060 - R&B Falcon Corp. 105,000 2,625 - -+ Rowan Cos., Inc. 52,600 1,325 - Smith International, Inc. 27,000 1,904 Tidewater, Inc. 30,900 1,427 Valero Energy Corp. 34,000 1,124 - Weatherford International, Inc. 62,930 2,297 ----------- 72,818 FOOD & AGRICULTURE 2.9% ----------------------------------------------------------------------------- Archer-Daniels-Midland Co. 350,668 3,857 Campbell Soup Co. 234,400 6,856 Coca-Cola Co. 1,375,000 83,016 Coca-Cola Enterprises, Inc. 232,000 4,263 ConAgra, Inc. 295,359 6,313 + Corn Products International, Inc. 20,500 515 Dean Foods Co. 21,150 677 Flowers Industries, Inc. 55,500 853 General Mills, Inc. 162,200 6,772 H.J. Heinz Co. 193,700 8,123 Hershey Foods Corp. 76,100 4,133 Hormel Foods Corp. 82,800 1,392 IBP, Inc. 58,400 1,201 IMC Global, Inc. 62,360 807 Interstate Bakeries Corp. 37,200 521 Kellogg Co. 224,800 5,704 McCormick & Co., Inc. 38,400 1,217 Nabisco Group Holdings Corp. 178,236 5,147 Nabisco Holdings Corp., Class A 28,800 1,557 PepsiCo, Inc. 801,100 38,803 Quaker Oats Co. 73,100 5,962 Ralston Purina Group 168,300 4,081 Sara Lee Corp. 480,400 10,359 - Suiza Foods Corp. 17,300 801 Supervalu, Inc. 72,000 1,107 Sysco Corp. 186,800 9,749 Tyson Foods, Inc., Class A 129,300 1,447 Whitman Corp. 72,800 946 Wm. Wrigley Jr. Co. 63,400 5,021 ----------- 221,200 GOLD 0.0% ----------------------------------------------------------------------------- Homestake Mining Co. 142,800 589 Newmont Mining Corp. 93,038 1,262 ----------- 1,851 HEALTHCARE / DRUGS & MEDICINE 12.1% ----------------------------------------------------------------------------- Abbott Laboratories 861,200 45,482 Aetna, Inc. 78,065 4,513 Allergan, Inc. 72,100 6,061 - ALZA Corp. 63,700 5,156 American Home Products Corp. 724,300 45,993 - Amgen, Inc. 571,600 33,117 - -+ Andrx Group 38,000 2,736 Bausch & Lomb, Inc. 29,000 1,118 Baxter International, Inc. 161,900 13,306 Beckman Coulter, Inc. 17,500 1,226 Becton, Dickinson & Co. 138,000 4,623 - Biogen, Inc. 84,600 5,092 Biomet, Inc. 97,550 3,530 - Boston Scientific Corp. 224,942 3,585 Bristol-Myers Squibb Co. 1,090,400 66,446 C.R. Bard, Inc. 33,600 1,407 Cardinal Health, Inc. 156,920 14,868 - Chiron Corp. 104,612 4,531 Dentsply International, Inc. 33,000 1,145
See the Financial Notes, which 35 are integral to this information. 40 SCHWAB 1000 FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Eli Lilly & Co. 627,068 56,044 - -+ Enzon, Inc. 22,100 1,575 - -+ First Health Group Corp. 26,900 1,049 - Forest Laboratories, Inc., Class A 48,400 6,413 - Genzyme Corp. -- General Division 47,700 3,387 - Gilead Sciences, Inc. 26,000 2,236 - Guidant Corp. 168,972 8,945 HCA--The Healthcare Co. 308,672 12,328 - Health Management Associates, Inc., Class A 137,628 2,727 - HealthSouth Corp. 210,200 2,522 - -+ Human Genome Sciences, Inc. 60,200 5,321 - Humana, Inc. 88,500 1,073 ICN Pharmaceuticals, Inc. 45,174 1,719 - -+ Idec Pharmaceuticals Corp. 24,800 4,864 - Immunex Corp. 278,300 11,845 - IVAX Corp. 97,500 4,241 Johnson & Johnson 772,538 71,170 - -+ King Pharmaceuticals, Inc. 91,600 4,105 - Lincare Holdings, Inc. 30,000 1,262 - Manor Care, Inc. 57,600 961 McKesson HBOC, Inc. 154,028 4,322 - Medimmune, Inc. 116,700 7,629 Medtronic, Inc. 665,600 36,150 (9)Merck & Co., Inc. 1,278,708 115,004 - -+ Millennium Pharmaceuticals, Inc. 110,100 7,989 - Minimed, Inc. 40,000 2,918 Mylan Laboratories, Inc. 69,350 1,942 Omnicare, Inc. 51,100 894 - Oxford Health Plans, Inc. 45,900 1,549 - PacifiCare Health Systems, Inc. 21,164 221 - Patterson Dental Co. 37,000 1,159 (6)Pfizer, Inc. 3,507,852 151,495 Pharmacia Corp. 719,500 39,573 - Quintiles Transnational Corp. 64,060 893 Schering-Plough Corp. 813,200 42,032 - Sepracor, Inc. 40,500 2,759 - St. Jude Medical, Inc. 46,450 2,555 Stryker Corp. 107,200 5,052 - Sybron International Corp. 59,600 1,475 - Tenet Healthcare Corp. 172,373 6,776 - Trigon Healthcare, Inc. 20,000 1,434 UnitedHealth Group, Inc. 96,400 10,544 - Watson Pharmaceuticals, Inc. 57,000 3,566 - Wellpoint Health Networks, Inc. 36,125 4,224 ----------- 919,877 HOUSEHOLD PRODUCTS 1.4% ----------------------------------------------------------------------------- Alberto-Culver Co., Class B 33,700 1,131 Avon Products, Inc. 139,400 6,761 Clorox Co. 129,700 5,788 Colgate-Palmolive Co. 322,200 18,932 Dial Corp. 54,100 605 Estee Lauder Cos., Inc., Class A 72,000 3,344 Gillette Co. 582,910 20,329 International Flavors & Fragrances, Inc. 58,500 980 Procter & Gamble Co. 726,100 51,871 ----------- 109,741 INSURANCE 3.9% ----------------------------------------------------------------------------- 21st Century Insurance Group 47,000 778 AFLAC, Inc. 153,950 11,248 - Alleghany Corp. 4,112 790 Allmerica Financial Corp. 30,000 1,892 Allstate Corp. 409,348 16,476 AMBAC Financial Group, Inc. 44,800 3,576 American Financial Group, Inc. 34,100 731 American General Corp. 139,493 11,229 (8)American International Group, Inc. 1,286,112 126,039 American National Insurance Co. 14,500 982 Aon Corp. 141,112 5,847 Chubb Corp. 96,500 8,148 CIGNA Corp. 95,200 11,610 Cincinnati Financial Corp. 88,614 3,257 - CNA Financial Corp. 105,700 3,858 Conseco, Inc. 166,335 1,154 Erie Indemnity Co., Class A 40,000 1,118 Everest Re Group Ltd. 31,000 1,817 Hartford Financial Services Group, Inc. 124,200 9,245 Jefferson-Pilot Corp. 56,725 3,900 Leucadia National Corp. 30,000 746
36 See the Financial Notes, which are integral to this information. 41
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Lincoln National Corp. 107,800 5,215 Loew's Corp. 54,900 4,992 Marsh & McLennan Cos., Inc. 149,900 19,599 MBIA, Inc. 54,000 3,925 Mercury General Corp. 31,400 1,150 MGIC Investment Corp. 60,500 4,122 + Mony Group, Inc. 25,900 1,065 Old Republic International Corp. 61,275 1,593 The PMI Group, Inc. 25,100 1,854 Progressive Corp. 39,900 3,920 Protective Life Corp. 32,600 754 + Radian Group, Inc. 20,900 1,481 Reinsurance Group of America, Inc. 27,200 1,017 SAFECO Corp. 70,600 1,708 St. Paul Cos., Inc. 124,554 6,383 Torchmark Corp. 69,700 2,322 Transatlantic Holdings, Inc. 20,000 1,858 Unitrin, Inc. 37,800 1,174 UnumProvident Corp. 131,471 3,714 - -+ XO Communications, Inc., Class A 126,816 4,278 ----------- 296,565 MEDIA 3.7% ----------------------------------------------------------------------------- A.H. Belo Corp., Class A 65,000 1,247 - American Tower Corp., Class A 92,600 3,791 BHC Communications, Inc., Class A 11,700 1,685 - Cablevision Systems Corp., Class A 73,200 5,453 - Chris-Craft Industries, Inc. 19,499 1,433 - Clear Channel Communications, Inc. 274,629 16,495 - -+ CNET Networks, Inc. 67,964 2,141 - Comcast Corp., Special Class A 502,276 20,468 - Comcast Corp., Class A 17,000 682 - Cox Communications, Inc., Class A 317,786 14,002 - -+ Crown Castle International Corp. 107,300 3,253 Dow Jones & Co., Inc. 50,450 2,970 - -+ EchoStar Communications Corp., Class A 128,200 5,801 - -+ Emmis Communications Corp., Class A 22,400 599 - Express Scripts, Inc., Class A 22,000 1,478 - -+ Fox Entertainment Group, Inc., Class A 99,900 2,148 Gannett Co., Inc. 147,600 8,561 Harte-Hanks Communications, Inc. 38,200 845 - Hispanic Broadcasting Corp. 58,000 1,813 Hollinger International, Inc. 60,000 926 Houghton Mifflin Co. 20,000 736 Knight-Ridder, Inc. 48,400 2,432 Lee Enterprises, Inc. 22,000 608 - -+ Liberty Digital, Inc., Class A 14,600 170 McClatchy Co., Class A 22,000 836 McGraw-Hill Cos., Inc. 111,350 7,147 Media General, Inc., Class A 19,500 741 Meredith Corp. 29,000 921 - Metro-Goldwyn-Mayer, Inc. 119,520 2,353 New York Times Co., Class A 94,026 3,455 - -+ Price Communications Corp. 25,900 560 - Primedia, Inc. 92,300 1,044 R.R. Donnelley & Sons Co. 66,500 1,430 Reader's Digest Association, Inc., Class A 57,800 2,121 The E.W. Scripps Co., Class A 43,975 2,570 Time Warner, Inc. 735,310 55,817 Tribune Co. 174,900 6,482 + United Television, Inc. 5,300 710 - -+ UnitedGlobalCom, Inc., Class A 27,800 884 - USA Networks, Inc. 164,400 3,329 - Valassis Communications, Inc. 37,500 1,041 - -+ Valuevision International, Inc., Class A 21,200 429 - Viacom, Inc., Class B 842,703 47,929 The Walt Disney Co. 1,157,221 41,443 Washington Post Co., Class B 5,200 2,777 - -+ Westwood One, Inc. 60,600 1,148 ----------- 284,904 MISCELLANEOUS 0.3% ----------------------------------------------------------------------------- - -+ C-Cube Microsystems, Inc. 22,600 441 - -+ Palm, Inc. 313,261 16,779 - -+ Spherion Corp. 35,500 422 XCEL Energy, Inc. 192,535 4,922 ----------- 22,564
See the Financial Notes, which 37 are integral to this information. 42 SCHWAB 1000 FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) MISCELLANEOUS FINANCE 7.3% ----------------------------------------------------------------------------- A.G. Edwards, Inc. 52,843 2,682 + Allied Capital Corp. 37,600 776 American Express Co. 738,600 44,316 - -+ AmeriCredit Corp. 41,000 1,102 - -+ Ameritrade Holding Corp., Class A 89,500 1,309 Associates First Capital Corp., Class A 404,902 15,032 Astoria Financial Corp. 29,750 1,116 AXA Financial, Inc. 246,900 13,348 Bear Stearns Cos., Inc. 59,671 3,618 - Berkshire Hathaway, Inc., Class A 843 53,699 - Berkshire Hathaway, Inc., Class B 3,421 7,194 - BISYS Group, Inc. 34,000 1,602 Capital One Financial Corp. 108,250 6,833 ## Charles Schwab Corp. 767,097 26,944 Charter One Financial, Inc. 121,144 2,779 CIT Group, Inc., Class A 145,300 2,534 (7)Citigroup, Inc. 2,500,498 131,589 Countrywide Credit Industries, Inc. 61,285 2,294 Dime Bancorp., Inc. 61,926 1,513 + Eaton Vance Corp. 19,300 961 - E*Trade Group, Inc. 161,000 2,345 Fannie Mae 559,700 43,097 + Federated Investors, Inc., Class B 67,650 1,970 Finova Group, Inc. 26,700 68 Franklin Resources, Inc. 133,200 5,706 Freddie Mac 386,200 23,172 Golden State Bancorp, Inc. 68,000 1,777 Household International, Inc. 261,598 13,162 John Nuveen Co., Class A 15,000 716 - -+ Knight Trading Group, Inc. 68,100 2,039 Legg Mason, Inc. 32,000 1,662 Lehman Brothers Holdings, Inc. 135,760 8,757 MBNA Corp. 472,887 17,763 Merrill Lynch & Co., Inc. 445,400 31,178 Morgan Stanley Dean Witter & Co. 625,110 50,204 Paine Webber Group, Inc. 83,887 5,977 Sovereign Bancorp., Inc. 109,600 911 T. Rowe Price Associates, Inc. 65,900 3,085 TCF Financial Corp. 50,600 2,046 USA Education, Inc. 90,350 5,048 Washington Federal, Inc. 28,940 646 Washington Mutual, Inc. 302,648 13,317 Wesco Financial Corp. 3,800 1,017 ----------- 556,904 NON-FERROUS METALS 0.2% ----------------------------------------------------------------------------- Alcoa, Inc. 479,495 13,756 Engelhard Corp. 69,687 1,455 - Freeport-McMoRan Copper & Gold, Inc., Class B 78,894 626 - -+ Mueller Industries, Inc. 19,900 464 Phelps Dodge Corp. 44,700 2,090 ----------- 18,391 OIL: DOMESTIC 0.6% ----------------------------------------------------------------------------- Amerada Hess Corp. 52,100 3,230 Ashland, Inc. 38,500 1,261 Diamond Offshore Drilling, Inc. 76,800 2,654 Kerr-McGee Corp. 52,102 3,403 Murphy Oil Corp. 27,670 1,603 - -+ Ocean Energy, Inc. 100,200 1,390 Phillips Petroleum Co. 143,800 8,880 Sunoco, Inc. 51,900 1,554 Tosco Corp. 79,600 2,279 Transocean Sedco Forex, Inc. 116,800 6,190 Ultramar Diamond Shamrock Corp. 50,700 1,331 Unocal Corp. 135,534 4,625 USX-Marathon Group, Inc. 176,000 4,785 ----------- 43,185 OIL: INTERNATIONAL 2.9% ---------------------------------------------------------------------------- - Chevron Corp. 362,700 29,787 (4)Exxon Mobil Corp. 1,935,565 172,628 Santa Fe International Corp. 65,000 2,373 Texaco, Inc. 306,309 18,091 ----------- 222,879
38 See the Financial Notes, which are integral to this information. 43
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) OPTICAL & PHOTO 0.1% ----------------------------------------------------------------------------- Eastman Kodak Co. 170,200 7,638 PAPER & FOREST PRODUCTS 0.7% ----------------------------------------------------------------------------- Boise Cascade Corp. 33,000 947 Bowater, Inc. 31,300 1,694 Fort James Corp. 113,800 3,748 Georgia-Pacific Corp. (Timber Group) 50,000 1,416 Georgia-Pacific Group 93,500 2,513 International Paper Co. 265,845 9,737 Kimberly-Clark Corp. 306,260 20,213 Louisiana-Pacific Corp. 57,200 486 Mead Corp. 56,800 1,644 Pentair, Inc. 26,200 781 + Potlatch Corp. 15,800 529 Rayonier, Inc. 13,875 488 Smurfit-Stone Container Corp. 120,100 1,621 Temple-Inland, Inc. 28,900 1,293 Westvaco Corp. 55,800 1,590 Weyerhaeuser Co. 122,000 5,726 Willamette Industries, Inc. 61,000 2,215 ----------- 56,641 PRODUCER GOODS & MANUFACTURING 6.3% ----------------------------------------------------------------------------- Actuant Corp., Class A 30,000 109 - American Standard Cos. 38,900 1,785 - -+ Applied Micro Circuits Corp. 163,000 12,459 Avery Dennison Corp. 61,800 3,121 - Blyth, Inc. 30,000 780 Briggs & Stratton Corp. 16,300 582 Caterpillar, Inc. 190,700 6,686 - -+ Cognex Corp. 22,700 760 Cooper Industries, Inc. 53,700 2,054 Corning, Inc. 489,641 37,458 Deere & Co. 128,400 4,727 Dover Corp. 114,200 4,846 Emerson Electric Co. 236,200 17,346 - FMC Corp. 16,900 1,284 #(1) General Electric Co. 5,505,300 301,759 Harsco Corp. 22,300 450 Herman Miller, Inc. 43,500 1,136 HON Industries, Inc. 38,800 934 + Honeywell International, Inc. 445,263 23,961 Hubbell, Inc., Class B 33,538 803 Illinois Tool Works, Inc. 167,742 9,320 Ingersoll-Rand Co. 89,650 3,384 - Jabil Circuit, Inc. 104,400 5,957 Johnson Controls, Inc. 47,100 2,808 - -+ Lattice Semiconductor Corp. 53,800 1,570 - -+ Mastec, Inc. 25,200 729 - -+ Micrel, Inc. 46,400 2,100 Millipore Corp. 24,900 1,307 Minnesota Mining & Manufacturing Co. 219,400 21,200 Pall Corp. 70,233 1,514 Parker-Hannifin Corp. 64,375 2,664 - -+ Rare Medium Group, Inc. 17,400 80 - -+ Safeguard Scientifics, Inc. 51,100 786 Snap-On, Inc. 17,150 438 Teleflex, Inc. 25,000 864 The Timken Co. 33,600 473 Trinity Industries, Inc. 21,950 528 U.S. Industries, Inc. 27,500 244 Valhi, Inc. 67,000 825 W.W. Grainger, Inc. 53,600 1,712 - -+ Zebra Technologies Corp., Class A 17,700 775 ----------- 482,318 RAILROAD & SHIPPING 0.3% ----------------------------------------------------------------------------- Burlington Northern Santa Fe Corp. 223,753 5,943 CSX Corp. 120,300 3,045 Florida East Coast Industries, Inc., Class A 20,300 726 GATX Corp. 24,000 1,010 + Kansas City Southern Industires, Inc. 30,800 268 Newport News Shipbuilding, Inc. 15,000 738 Norfolk Southern Corp. 213,000 3,009 Union Pacific Corp. 136,261 6,387 ----------- 21,126 REAL PROPERTY 0.0% ----------------------------------------------------------------------------- - Catellus Development Corp. 61,600 1,120 The St. Joe Co. 43,300 874 ----------- 1,994
See the Financial Notes, which 39 are integral to this information. 44 SCHWAB 1000 FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) RETAIL 5.0% ----------------------------------------------------------------------------- Albertson's, Inc. 232,042 5,497 - Amazon.com, Inc. 197,800 7,244 - American Eagle Outfitters, Inc. 26,000 895 - -+ AnnTaylor Stores Corp. 17,400 522 - AutoZone, Inc. 74,000 1,984 - Barnes & Noble, Inc. 40,000 755 - Bed, Bath & Beyond, Inc. 159,200 4,109 - Best Buy Co., Inc. 113,600 5,701 - BJ's Wholesale Club, Inc. 40,600 1,337 - Borders Group, Inc. 43,000 597 Circuit City Stores-Circuit City Group 117,600 1,558 - Consolidated Stores Corp. 56,312 669 - Costco Wholesale Corp. 248,408 9,098 CVS Corp. 214,914 11,377 Dillards, Inc., Class A 43,100 453 Dollar General Corp. 182,669 2,831 - Dollar Tree Stores, Inc. 59,400 2,324 Family Dollar Stores, Inc. 96,200 1,870 - Federated Department Stores, Inc. 115,200 3,751 Gap, Inc. 468,000 12,080 Home Depot, Inc. 1,285,597 55,281 Intimate Brands, Inc. 273,000 6,518 J.C. Penney Co., Inc. 143,000 1,671 - Kmart Corp. 265,600 1,577 - Kohl's Corp. 182,600 9,895 - Kroger Co. 458,080 10,335 - -+ Lands' End, Inc. 16,500 423 Limited, Inc. 239,938 6,058 Lowe's Cos., Inc. 212,200 9,695 May Department Stores Co. 163,350 4,288 Nordstrom, Inc. 68,800 1,131 - Office Depot, Inc. 146,848 1,221 - Payless Shoesource, Inc. 12,814 742 RadioShack Corp. 109,332 6,519 - Rite Aid Corp. 141,700 363 Ross Stores, Inc. 47,000 620 - Safeway, Inc. 274,780 15,027 - Saks, Inc. 68,340 696 Sears, Roebuck & Co. 189,600 5,637 - Staples, Inc. 252,460 3,598 Target Corp. 501,900 13,865 - The Neiman Marcus Group, Inc., Class A 30,000 1,114 Tiffany & Co., Inc. 80,000 3,415 TJX Cos., Inc. 169,900 4,630 - Toys 'R' Us, Inc. 120,880 2,078 (10) Wal-Mart Stores, Inc. 2,482,500 112,643 Walgreen Co. 561,200 25,605 Weis Markets, Inc. 23,900 878 - Williams-Sonoma, Inc. 28,000 583 Winn-Dixie Stores, Inc. 82,300 1,584 - Zale Corp. 19,600 664 ----------- 383,006 STEEL 0.1% ----------------------------------------------------------------------------- AK Steel Holding Corp. 56,700 524 Allegheny Technologies, Inc. 46,140 934 Nucor Corp. 45,100 1,564 USX-U.S. Steel Group, Inc. 49,260 785 + Worthington Industries, Inc. 50,200 480 ----------- 4,287 TELEPHONE 6.2% ----------------------------------------------------------------------------- - -+ Adtran, Inc. 22,300 847 - -+ Allegiance Telecom, Inc. 55,050 1,731 Alltel Corp. 174,867 11,268 AT&T Corp. 2,059,911 47,764 BellSouth Corp. 1,041,700 50,327 - Broadwing, Inc. 118,752 3,355 - -+ Carrier Access Corp. 13,400 168 - -+ Centennial Communications Corp. 52,800 1,030 CenturyTel, Inc. 77,887 2,999 - Citizens Communications Co. 150,818 2,187 - -+ Commonwealth Telephone Enterprises, Inc. 12,200 422 - -+ Exodus Communications, Inc. 230,700 7,743 - -+ Global Telesystems Group, Inc. 91,900 247 - -+ Intermedia Communications, Inc. 32,700 724 + ITC 35,800 290 - Level 3 Communications, Inc. 202,300 9,647
40 See the Financial Notes, which are integral to this information. 45
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - McLeodUSA, Inc., Class A 303,800 5,848 - NTL, Inc. 149,713 6,578 - -+ Powertel, Inc. 16,900 1,475 - Qwest Communications International, Inc. 920,747 44,771 - -+ RCN Corp. 42,900 761 SBC Communications, Inc. 1,884,028 108,685 Sprint Corp. (FON Group) 472,668 12,053 - Sprint Corp. (PCS Group) 493,421 18,812 Telephone & Data Systems, Inc. 35,100 3,703 - U.S. Cellular Corp. 53,800 3,443 + Verizon Communications 1,508,793 87,227 - -+ Viatel, Inc. 18,500 178 - Winstar Communications, Inc. 30,000 585 - Worldcom, Inc. 1,594,728 37,875 ----------- 472,743 TOBACCO 0.6% ----------------------------------------------------------------------------- Philip Morris Cos., Inc. 1,244,700 45,587 UST, Inc. 90,000 2,273 ----------- 47,860 TRAVEL & RECREATION 0.2% ----------------------------------------------------------------------------- Brunswick Corp. 48,900 951 - Harrah's Entertainment, Inc. 67,600 1,935 Hertz Corp., Class A 23,000 756 Hilton Hotels Corp. 203,667 1,935 - -+ Mandalay Resort Group 51,400 1,070 Marriott International, Inc., Class A 138,600 5,613 MGM Mirage, Inc. 87,800 3,035 + Royal Caribbean Cruises Ltd. 99,300 2,234 - Speedway Motorsports, Inc. 23,700 413 ----------- 17,942 TRUCKING & FREIGHT 0.1% ----------------------------------------------------------------------------- + C.H. Robinson Worldwide, Inc. 27,500 1,504 CNF Transportation, Inc. 26,400 705 + Expeditores International of Washington, Inc. 28,400 1,473 PACCAR, Inc. 42,120 1,772 Ryder Systems, Inc. 33,800 668 ----------- 6,122 UTILITIES: ELECTRIC & GAS 3.4% ----------------------------------------------------------------------------- - AES Corp. 251,736 14,223 Allegheny Energy, Inc. 62,100 2,542 Allete 44,000 949 Alliant Energy Corp. 45,000 1,364 Ameren Corp. 77,130 3,066 American Electric Power Co., Inc. 176,920 7,342 American Water Works Co., Inc. 54,600 1,331 CP&L Energy, Inc. 90,500 3,648 - -+ Calpine Corp. 75,700 5,976 Cinergy Corp. 87,565 2,682 CMS Energy Corp. 62,900 1,698 Coastal Corp. 117,700 8,879 Columbia Energy Group 44,100 3,172 Conectiv, Inc. 51,700 927 Consolidated Edison, Inc. 116,100 4,085 Constellation Energy Group, Inc. 83,050 3,462 Dominion Resources, Inc. 132,242 7,877 DPL, Inc. 70,492 2,000 DQE, Inc. 44,050 1,539 DTE Energy Co. 78,100 2,821 Duke Energy Corp. 203,331 17,575 Dynegy, Inc., Class A 171,614 7,948 Edison International 183,600 4,383 El Paso Energy Corp. 129,768 8,135 Energy East Corp. 66,800 1,349 Enron Corp. 410,238 33,665 Entergy Corp. 135,421 5,188 + Equitable Resources, Inc. 18,000 1,044 FirstEnergy Corp. 129,515 3,351 Florida Progress Corp. 54,000 2,872 FPL Group, Inc. 98,100 6,475 GPU, Inc. 67,600 2,235 Ipalco Enterprises, Inc. 49,000 1,099 Kansas City Power & Light Co. 35,900 864 KeySpan Corp. 77,934 2,742 Kinder Morgan, Inc. 65,800 2,537 LG&E Energy Corp. 70,155 1,723 MCN Energy Group, Inc. 50,600 1,246
See the Financial Notes, which 41 are integral to this information. 46 SCHWAB 1000 FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) MDU Resources Group, Inc. 34,700 1,015 Montana Power Co. 65,800 1,859 National Fuel Gas Co. 26,600 1,426 - Niagara Mohawk Holdings, Inc. 89,200 1,427 NICOR, Inc. 25,300 893 NiSource, Inc. 67,400 1,681 Northeast Utilities 81,900 1,669 OGE Energy Corp. 51,200 1,053 Peoples Energy Corp. 19,500 670 PG&E Corp. 213,658 5,755 Pinnacle West Capital Corp. 47,300 2,055 Potomac Electric Power Co. 69,400 1,588 PPL Corp. 84,720 3,489 Public Service Enterprise Group, Inc. 122,300 5,075 Puget Sound Energy, Inc. 48,200 1,184 Questar Corp. 44,300 1,199 Reliant Energy, Inc. 169,117 6,987 - -+ Republic Services, Inc. 99,300 1,334 Scana Corp. 65,800 1,744 Sempra Energy 114,338 2,365 Sierra Pacific Resources 46,600 801 Southern Co. 358,700 10,537 Teco Energy, Inc. 72,200 2,013 TXU Corp. 146,412 5,426 UtiliCorp United, Inc. 48,350 1,284 Washington Gas Light Co. 30,000 765 Western Resources, Inc. 38,231 817 Williams Cos., Inc. 246,061 10,288 Wisconsin Energy Corp. 67,800 1,276 ----------- 261,689
OTHER INVESTMENT COMPANIES 0.0% of investments Provident Institutional TempFund 3,283,978 3,284
SHORT-TERM INVESTMENTS 0.1% of investments SECURITY FACE VALUE MKT. VALUE RATE, MATURITY DATE ($ x 1,000) ($ x 1,000) PNC Financial Services Group Repurchase Agreement 5.50%, dated 10/31/00, matures 11/1/00, repurchase price $7,543,152 (collateralized by: Federal Home Loan Mortgage Corp., total market value $7,768,679) 7,542 7,542
U.S. TREASURY OBLIGATIONS 0.0% of investments # U.S. Treasury Bills 5.92%-6.02%, 12/14/00 315 313
- -------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. 42 See the Financial Notes, which are integral to this information. 47 Statement of ASSETS AND LIABILITIES As of October 31, 2000. All numbers x 1,000 except NAV.
ASSETS - -------------------------------------------------------------------------------- Investments, at market value $ 7,598,647 a Cash 1 Collateral held for securities on loan 306,765 b Receivables: Fund shares sold 6,806 Interest 22 Dividends 5,074 Investments sold 9,526 Income from lending securities 31 Most recent daily change in value of futures 73 Prepaid expenses + 90 ------------ TOTAL ASSETS 7,927,035 LIABILITIES - -------------------------------------------------------------------------------- Collateral held for securities on loan 306,765 b Payables: Fund shares redeemed 3,681 Interest expense 1 Investments bought 13,999 Investment adviser and administrator fees 217 Transfer agent and shareholder service fees 173 Accrued expenses + 429 ------------ TOTAL LIABILITIES 325,265 NET ASSETS - -------------------------------------------------------------------------------- TOTAL ASSETS 7,927,035 TOTAL LIABILITIES - 325,265 ------------ NET ASSETS $ 7,601,770 NET ASSETS BY SOURCE Capital received from investors 4,174,918 Net investment income not yet distributed 39,491 Net realized capital losses (23,445) Net unrealized capital gains 3,410,806 c
a The fund paid $4,187,799 for these securities. Not counting short-term obligations and government securities, the fund paid $712,871 for securities during the report period and received $792,092 from securities it sold or that matured. This includes $91,026 in transactions with other SchwabFunds(R). b Market value of securities loaned: $299,231. c These derive from investments and futures. As of the report date, the fund had ten open S&P 500 futures contracts due to expire on December 15, 2000, with a contract value of $3,600 and unrealized losses of $42. NET ASSET VALUE (NAV)
SHARES SHARE CLASS NET ASSETS / OUTSTANDING = NAV Investor Shares $5,083,063 127,246 $39.95 Select Shares(R) $2,518,707 63,004 $39.98
FEDERAL TAX DATA - -------------------------------------------------------------------------------- COST BASIS OF PORTFOLIO $4,194,918 NET UNREALIZED GAINS AND LOSSES: Gains $3,769,543 Losses + (365,856) ----------- $3,403,687 UNUSED CAPITAL LOSSES: Expires 10/31 of: Loss amount 2003 $ 415 2004 844 2005 2,606 2006 650 2007 11,853
See the Financial Notes, which 43 are integral to this information. 48 SCHWAB 1000 FUND(R) -- FINANCIALS Statement of OPERATIONS For November 1, 1999 through October 31, 2000. All numbers x 1,000.
INVESTMENT INCOME - -------------------------------------------------------------------------------- Dividends $81,487 a Interest 418 Lending of securities + 1,033 ------------ TOTAL INVESTMENT INCOME 82,938 NET REALIZED GAINS AND LOSSES - -------------------------------------------------------------------------------- Net realized losses on investments sold (3,480) Net realized gains on futures contracts + 353 ------------ NET REALIZED LOSSES (3,127) NET UNREALIZED GAINS AND LOSSES - -------------------------------------------------------------------------------- Net unrealized gains on investments 542,852 Net unrealized losses on futures contracts + (717) ------------ NET UNREALIZED GAINS 542,135 EXPENSES - -------------------------------------------------------------------------------- Investment adviser and administrator fees 16,968 b Transfer agent and shareholder service fees: Investor Shares 12,755 c Select Shares(R) 2,429 c Trustees' fees 35 d Custodian fees 223 Portfolio accounting fees 1,062 Professional fees 82 Registration fees 187 Shareholder reports 581 Interest expense 109 Proxy fees 603 Other expenses + 138 ------------ Total expenses 35,172 Expense reduction - 2,491 e ------------ NET EXPENSES 32,681 INCREASE IN NET ASSETS FROM OPERATIONS - -------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 82,938 NET EXPENSES - 32,681 ------------ NET INVESTMENT INCOME 50,257 NET REALIZED LOSSES (3,127) f NET UNREALIZED GAINS + 542,135 f ------------ INCREASE IN NET ASSETS FROM OPERATIONS $589,265
a An additional $8 was withheld for foreign taxes. b Calculated as a percentage of average daily net assets: 0.30% of the first $500 million, and 0.22% of average daily assets over 500 million. c Calculated as a percentage of average daily net assets: for transfer agent services, 0.05% of the fund's assets; for shareholder services, 0.20%, and 0.05% of the assets of each respective share class. d For the fund's independent trustees only. e Includes $451 from the investment adviser (CSIM) and $2,040 from the transfer agent and shareholder service agent (Schwab). These reductions reflect a guarantee by CSIM and Schwab to limit the operating expenses of this fund through at least February 28, 2001, as follows:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS - -------------------------------------------------------------------------------- Investor Shares 0.46 Select Shares 0.35
This limit does not include interest, taxes and certain non-routine expenses. f These add up to a net gain on investments of $539,008. 44 See the Financial Notes, which are integral to this information. 49 Statements of CHANGES IN NET ASSETS For the current and prior report periods. All numbers x 1,000.
OPERATIONS - -------------------------------------------------------------------------------- 11/1/99 - 10/31/00 11/1/98 - 10/31/99 Net investment income $ 50,257 $ 51,388 Net realized losses (3,127) (13,695) Net unrealized gains + 542,135 1,244,248 -------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 589,265 1,281,941 DISTRIBUTIONS PAID - ------------------------------------------------------------------------------- DIVIDENDS FROM NET INVESTMENT INCOME Investor Shares 33,936 31,297 Select Shares(R) + 19,080 11,925 -------------------------------- TOTAL DIVIDENDS FROM NET INVESTMENT INCOME $ 53,016 $ 43,222 a
TRANSACTIONS IN FUND SHARES - -------------------------------------------------------------------------------
11/1/99 - 10/31/00 11/1/98 - 10/31/99 QUANTITY VALUE QUANTITY VALUE Shares sold: Investor Shares 25,657 $1,015,329 43,791 $1,518,286 Select Shares + 18,493 732,803 34,607 1,194,734 ---------------------------------------------- TOTAL SHARES SOLD 44,150 $1,748,132 78,398 $2,713,020 Shares reinvested: Investor Shares 803 $ 31,141 913 $ 29,333 Select Shares + 431 16,725 328 10,536 ---------------------------------------------- TOTAL SHARES REINVESTED 1,234 $ 47,866 1,241 $ 39,869 Shares redeemed: Investor Shares 31,869 $1,258,205 34,357 $1,194,295 Select Shares + 15,483 610,463 10,134 356,795 ---------------------------------------------- TOTAL SHARES REDEEMED 47,352 $1,868,668 44,491 $1,551,090 b NET INCREASE OR DECREASE (1,968) ($72,670) 35,148 $1,201,799 c
SHARES OUTSTANDING AND NET ASSETS - --------------------------------------------------------------------------------
11/1/99 - 10/31/00 11/1/98 - 10/31/99 SHARES NET ASSETS SHARES NET ASSETS Beginning of period 192,218 $7,138,191 157,070 $4,697,673 Total increase or decrease + (1,968) 463,579 35,148 2,440,518 d ----------------------------------------------- END OF PERIOD 190,250 $7,601,770 192,218 $7,138,191 e
a UNAUDITED For corporations, 100% of the fund's dividends for the report period qualify for the dividends-received deduction. b Dollar amounts are net of proceeds received from early withdrawal fees that the fund charges on shares sold 180 days or less after buying them:
CURRENT PERIOD Investor Shares $ 576 Select Shares + 351 ----------- Total $ 927
PRIOR PERIOD Investor Shares $662 Select Shares + 370 ----------- Total $ 1,032
c Represents shares sold plus shares reinvested, minus shares redeemed. d Figures for shares represent the net changes in shares from the transactions described above. Figures for net assets represent the changes in net assets from operations plus the value of transactions in fund shares, minus distributions paid. e Includes net investment income not yet distributed in the amount of $39,491 for the current period and $42,250 for the prior period. See the Financial Notes, which 45 are integral to this information. 50 SCHWAB SMALL-CAP INDEX FUND(R) [PHOTO OF GERI HOM] "The fund's strong performance was attributable to the solid gains in the healthcare, energy, capital goods and technology sectors." Portfolio Manager Geri Hom GERI HOM, a vice president of the investment adviser, has overall responsibility for the management of the fund. Prior to joining the firm in 1995, she worked for nearly 15 years in equity index management. TICKER SYMBOLS Investor Shares SWSMX Select Shares(R) SWSSX [INVESTMENT STYLE 1 AND MARKET CAP 1 GRAPHIC] VALUE BLEND GROWTH LARGE MEDIUM X SMALL
With its small-cap focus, this fund may make sense for long-term investors who are willing to accept greater risk in the pursuit of potentially higher long-term returns. THE FUND'S GOAL IS TO TRACK THE TOTAL RETURN OF THE SCHWAB SMALL-CAP INDEX.(R) MANAGER'S PERSPECTIVE GIVEN THE VOLATILITY THAT PREVAILED IN EQUITY MARKETS, THE FUND PERFORMED COMPARATIVELY WELL DURING THE REPORT PERIOD. A combination of factors caused investors to trim their overall exposure to stocks. Among these factors were high stock prices, uncertainty over the outcome of the presidential election and potential interest rate hikes. Toward the end of the report period, evidence of a slowing economy reduced fears of interest rate hikes. Ordinarily this might have helped the market regain its footing, but concerns about high oil prices kept stocks in flux. SMALL-CAP STOCKS UNSEATED LARGE-CAP STOCKS AS THE TOP-PERFORMING ASSET CLASS, ENDING A FIVE-YEAR RUN FOR LARGE-CAPS. For the report period, the Russell 2000(R) Index--a popular measure of the small-cap market--outperformed the S&P 500(R) Index as well as the Nasdaq Composite Index. The fund's benchmark, the Schwab Small-Cap Index, in turn outperformed all of these indices for the period. Initially, the fund's growth stocks outperformed their value counterparts. This trend reversed in the second half of the period as investors reduced their exposure to technology issues. Both share classes of the Schwab Small-Cap Index Fund tracked the fund's benchmark. 1 Source: Morningstar, Inc. This style assessment is the result of comparing the fund with the S&P 500 Index, based on P/E, P/B and median market cap. The assessment reflects the fund's portfolio as of 10/31/00, which may have changed since then, and is not a precise indication of risk or performance--past, present or future. 46 51 PERFORMANCE: INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS as of 10/31/00 This chart compares performance of the fund's Investor Shares with the Schwab Small-Cap Index(R) and the Morningstar Small-Cap Fund category. [BAR CHART]
1 YEAR 5 YEARS SINCE INCEPTION: 12/3/93 ------------------------- ------------------------ ------------------------ (0.62%) (1.86%) (1.50%) --------------- --------------- --------------- Total Return 2 21.22% 21.84% 25.32% 1 14.15% 16.01% 14.56% 12.69% 14.19% n/a % of Return Lost to Taxes 0.47% -- 7.78% 1 2.97% -- 17.24% n/a -- n/a AFTER-TAX RETURN 2 21.12% -- 23.35% 1 13.73% -- 12.05% n/a -- n/a
PERFORMANCE OF A $10,000 INVESTMENT Shows performance since inception of a hypothetical $10,000 investment in the fund's Investor Shares, compared to a similar investment in two indices: the Schwab Small-Cap Index and the Russell 2000(R) Index. [LINE GRAPH]
INVESTOR SHARES SCHWAB RUSSELL 2000 SMALL-CAP INDEX INDEX 12/3/93 10000 10000 10000 12/31/93 10154 10234 10186 1/31/94 10394 10469 10505 2/28/94 10334 10430 10467 3/31/94 9783 9871 9915 4/30/94 9753 9847 9974 5/31/94 9613 9692 9861 6/30/94 9333 9419 9529 7/31/94 9493 9614 9685 8/31/94 10134 10249 10225 9/30/94 10094 10191 10190 10/31/94 10064 10149 10149 11/30/94 9663 9767 9739 12/31/94 9841 10000 10000 1/31/95 9730 9838 9874 2/28/95 10082 10229 10285 3/31/95 10334 10442 10461 4/30/95 10566 10671 10693 5/31/95 10717 10809 10877 6/30/95 11211 11356 11441 7/31/95 11866 12021 12100 8/31/95 12077 12270 12351 9/30/95 12309 12510 12572 10/31/95 11785 11910 12010 11/30/95 12329 12482 12514 12/31/95 12562 12782 12845 1/31/96 12491 12749 12831 2/29/96 12967 13261 13231 3/31/96 13170 13492 13505 4/30/96 13899 14206 14227 5/31/96 14384 14692 14788 6/30/96 13848 14222 14180 7/31/96 12643 13075 12942 8/31/96 13413 13904 13694 9/30/96 14010 14416 14230 10/31/96 13757 14169 14010 11/30/96 14344 14733 14588 12/31/96 14508 15007 14970 1/31/97 14895 15361 15269 2/28/97 14376 14986 14900 3/31/97 13654 14257 14196 4/30/97 13756 14299 14236 5/31/97 15383 16050 15821 6/30/97 16125 16880 16499 7/31/97 17213 17842 17267 8/31/97 17538 18243 17662 9/30/97 18850 19675 18955 10/31/97 18026 18816 18123 11/30/97 17843 18645 18005 12/31/97 18236 19035 18320 1/31/98 17787 18736 18031 2/28/98 19195 20285 19361 3/31/98 20042 21199 20159 4/30/98 20144 21344 20270 5/31/98 18930 20090 19177 6/30/98 18960 20146 19218 7/31/98 17471 18597 17661 8/31/98 14062 15011 14231 9/30/98 14991 15953 15345 10/31/98 15705 16709 15972 11/30/98 16532 17576 16809 12/31/98 17584 18719 17849 1/31/99 17617 18800 18086 2/28/99 16145 17229 16621 3/31/99 16372 17559 16881 4/30/99 17660 19165 18393 5/31/99 17974 19500 18662 6/30/99 18969 20778 19505 7/31/99 18872 20615 18971 8/31/99 18309 20033 18269 9/30/99 18493 20204 18272 10/31/99 18839 20537 18347 11/30/99 20008 21820 19443 12/31/99 21839 23899 21644 1/31/00 21015 23005 21295 2/29/00 23801 26015 24811 3/31/00 23075 25333 23176 4/30/00 21936 24109 21781 5/31/00 20904 22940 20511 6/30/00 22674 24856 22300 7/31/00 21774 23890 21581 8/31/00 23964 26291 23228 9/30/00 23238 25490 22545 10/31/00 22836 25023 21540
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made--currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 892 funds in the Small-Cap Fund category that had track records of at least one year and 333 funds with track records of at least five years. These funds may or may not use tax- efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc 47 52 SCHWAB SMALL-CAP INDEX FUND(R) PERFORMANCE: SELECT SHARES(R) AVERAGE ANNUAL TOTAL RETURNS as of 10/31/00 This chart compares performance of the fund's Select Shares with the Schwab Small-Cap Index(R) and the Morningstar Small-Cap Fund category. [BAR CHART]
1 YEAR SINCE INCEPTION: 5/19/97 ------------------------ ------------------------ (0.47%) (1.51%) --------------- --------------- Total Return 2 21.37% 21.84% 25.32% 1 13.67% 15.18% n/a % of Return Lost to Taxes 0.80% -- 7.78% 1 n/a -- n/a AFTER-TAX RETURN 2 21.20% -- 23.35% 1 n/a -- n/a
PERFORMANCE OF A $50,000 INVESTMENT Shows performance since inception of a hypothetical $50,000 investment in the fund's Select Shares, compared to a similar investment in two indices: the Schwab Small-Cap Index and the Russell 2000(R) Index. [LINE GRAPH]
SCHWAB RUSSELL SELECT SMALL-CAP 2000 SHARES INDEX INDEX 5/19/97 50000 50000 50000 5/31/97 52170 52242 51960 6/30/97 54690 54942 54189 7/31/97 58415 58075 56709 8/31/97 59485 59380 58008 9/30/97 63965 64039 62254 10/31/97 61205 61244 59521 11/30/97 60550 60687 59134 12/31/97 61920 61958 60169 1/31/98 60400 60983 59218 2/28/98 65175 66026 63588 3/31/98 68050 69002 66208 4/30/98 68430 69473 66572 5/31/98 64310 65391 62984 6/30/98 64415 65575 63116 7/31/98 59360 60531 58004 8/31/98 47790 48861 46740 9/30/98 50945 51924 50399 10/31/98 53365 54386 52456 11/30/98 56170 57207 55204 12/31/98 59775 60929 58621 1/31/99 59925 61193 59401 2/28/99 54925 56079 54590 3/31/99 55660 57152 55441 4/30/99 60070 62380 60409 5/31/99 61140 63470 61291 6/30/99 64555 67629 64061 7/31/99 64225 67099 62306 8/31/99 62315 65206 60000 9/30/99 62940 65762 60012 10/31/99 64115 66846 60258 11/30/99 68125 71021 63856 12/31/99 74390 77788 71084 1/31/00 71585 74879 69940 2/29/00 81065 84677 81487 3/31/00 78595 82458 76117 4/30/00 74755 78471 71535 5/31/00 71250 74666 67364 6/30/00 77265 80904 73238 7/31/00 74205 77761 70880 8/31/00 81655 85575 76288 9/30/00 79185 82968 74045 10/31/00 77820 81448 70743
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made--currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 892 funds in the Small-Cap Fund category that had track records of at least one year and 333 funds with track records of at least five years. These funds may or may not use tax- efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 48 53 FUND FACTS TOP TEN HOLDINGS 1 as of 10/31/00 1 ABGENIX, INC. 1.0% 2 PROTEIN DESIGN LABS, INC. 0.9% 3 VERTEX PHARMACEUTICALS, INC. 0.8% 4 POWER-ONE, INC. 0.8% 5 QUEST DIAGNOSTIC, INC. 0.7% 6 MEDAREX, INC. 0.7% 7 SABRE GROUP CORP. 0.7% 8 CELGENE CORP. 0.6% 9 IMCLONE SYSTEMS 0.5% 10 MANUGISTICS, INC. 0.5% - -------------------------------------------------------------------------------- TOTAL PERCENTAGE OF INVESTMENTS 7.2%
STATISTICS as of 10/31/00
PEER GROUP FUND AVERAGE 2 - -------------------------------------------------------------------------------- Number of Holdings 911 181 - -------------------------------------------------------------------------------- Median Market Cap ($ Mil) $ 850 $ 1,256 - -------------------------------------------------------------------------------- Price/Earnings (P/E) Ratio 24.3 27.7 - -------------------------------------------------------------------------------- Price/Book (P/B) Ratio 4.9 5.5 - -------------------------------------------------------------------------------- 12-Month Yield Investor Shares 0.19% 0.22% - -------------------------------------------------------------------------------- Portfolio Turnover Rate 54% 105% - -------------------------------------------------------------------------------- Three-Year Beta 0.89 0.91 - --------------------------------------------------------------------------------
EXPENSE RATIO as of 10/31/00 [BAR CHART] INVESTOR SHARES 0.49% 3 SELECT SHARES(R) 0.38% 3 PEER GROUP AVERAGE 1.55% 2
INDEX COMPOSITION BY INDUSTRY 4 These charts show the size of the ten largest industries in the Schwab Small-Cap Index.(R) As the charts show, the total portion represented by these industries has been growing over the past five years. [PIE CHART] AS OF 10/31/00 - -------------------------------------------------------------------------------- 1 16.8% Drugs & Medicine 2 12.0% Business Services 3 10.2% Electronics 4 6.1% Producer Goods 5 5.4% Miscellaneous Finance 6 4.3% Banks 7 3.9% Energy & Utilities 8 3.6% Insurance 9 3.5% Construction 10 3.1% Chemicals 31.1% Other
[PIE CHART] AS OF 10/31/99 - -------------------------------------------------------------------------------- 1 15.3% Business Services 2 13.4% Electronics 3 7.6% Producer Goods 4 6.8% Drugs & Medicine 5 5.8% Miscellaneous Finance 6 5.8% Banks 7 4.3% Energy & Utilities 8 3.5% Insurance 9 3.2% Media 10 2.9% Telephone 31.3% Other
[PIE CHART] AS OF 10/31/95 - -------------------------------------------------------------------------------- 1 10.6% Business Services 2 10.3% Drugs & Medicine 3 7.5% Banks 4 7.0% Electronics 5 6.4% Producer Goods 6 6.0% Miscellaneous Finance 7 5.0% Insurance 8 4.2% Energy & Utilities 9 4.0% Business Machines 10 3.9% Retail 35.1% Other
1 This list is not a recommendation of any security by the investment adviser. Portfolio holdings may have changed since the report date. 2 Source: Morningstar, Inc. As of 10/31/00, there were 892 funds in Small-Cap Fund category. 3 Guaranteed by Schwab and the investment adviser through 2/28/01. The actual expense ratio during the report period was 0.01% higher due to certain non-routine expenses. 4 Source: Charles Schwab & Co., Inc. 49 54 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. THE FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
11/1/99- 11/1/98- 11/1/97- 11/1/96- 11/1/95 - INVESTOR SHARES 10/31/00 10/31/99 10/31/98 10/31/97 10/31/96 PER-SHARE DATA ($) - ------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 17.41 15.39 17.73 13.59 11.70 -------------------------------------------------------- Income from investment operations: Net investment income 0.07 0.06 0.05 0.06 0.07 Net realized and unrealized gains or losses 3.62 2.89 (2.33) 4.14 1.88 -------------------------------------------------------- Total income or loss from investment operations 3.69 2.95 (2.28) 4.20 1.95 Less distributions: Dividends from net investment income (0.04) (0.06) (0.06) (0.06) (0.06) Distributions from net realized gains -- (0.87) -- -- -- -------------------------------------------------------- Total distributions (0.04) (0.93) (0.06) (0.06) (0.06) -------------------------------------------------------- Net asset value at end of period 21.06 17.41 15.39 17.73 13.59 ======================================================== Total return (%) 21.22 19.96 (12.88) 31.03 16.73 RATIOS/SUPPLEMENTAL DATA (%) - ------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.49 1 0.49 0.49 0.52 0.59 Expense reductions reflected in above ratio 0.16 0.30 0.32 0.37 0.35 Ratio of net investment income to average net assets 0.44 0.33 0.35 0.53 0.56 Portfolio turnover rate 54 41 4023 23 Net assets, end of period ($ x 1,000,000) 803 452 480 410 209
1 Would have been 0.50% if certain non-routine expenses (proxy fees) had been included. 50 See the Financial Notes, which are integral to this information. 55
11/1/99- 11/1/98- 11/1/97- 5/19/97 1- SELECT SHARES(R) 10/31/00 10/31/99 10/31/98 10/31/97 - ---------------------------------------------------------------------------------------------------------------- PER-SHARE DATA ($) - ------------------------------------------------------------------------------------------------------------ Net asset value at beginning of period 17.44 15.41 17.75 14.50 ----------------------------------------------------- Income from investment operations: Net investment income 0.11 0.07 0.08 0.02 Net realized and unrealized gains or losses 3.61 2.90 (2.35) 3.23 ----------------------------------------------------- Total income or loss from investment operations 3.72 2.97 (2.27) 3.25 Less distributions: Dividends from net investment income (0.07) (0.07) (0.07) -- Distributions from net realized gains -- (0.87) -- -- ----------------------------------------------------- Total distributions (0.07) (0.94) (0.07) -- ----------------------------------------------------- Net asset value at end of period 21.09 17.44 15.41 17.75 ===================================================== Total return (%) 21.37 20.14 (12.81) 22.41 2 RATIOS/SUPPLEMENTAL DATA (%) - -------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.38 4 0.38 0.38 0.38 3 Expense reductions reflected in above ratio 0.12 0.27 0.33 0.52 3 Ratio of net investment income to average net assets 0.55 0.44 0.46 0.56 3 Portfolio turnover rate 54 41 40 23 Net assets, end of period ($ x 1,000,000) 757 447 150 81
1 Commencement of operations. 2 Not annualized. 3 Annualized. 4 Would have been 0.39% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which 51 are integral to this information. 56 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS As of October 31, 2000 This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics. With the top ten holdings, the number in the circle is the security's rank among the top ten. (1) Top ten holding + New holding (since 10/31/99) - Non-income producing security # Collateral for open futures contracts The pie chart below shows the fund's major asset categories and the market value and cost of the securities in each category. ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 99.5% COMMON STOCK Market Value: $1,556,540 Cost: $1,445,973 0.5% SHORT TERM INVESTMENTS Market Value: $8,318 Cost: $8,318 0.0% U.S. TREASURY OBLIGATIONS Market Value: $253 Cost: $253 ----------------------------------------------------------------------- 100.0% TOTAL INVESTMENTS Market Value: $1,565,111 Cost: $1,454,544
COMMON STOCK 99.5% of investments
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) AEROSPACE / DEFENSE 0.4% - -------------------------------------------------------------------------------- GenCorp., Inc. 99,400 832 - Sequa Corp., Class A 24,500 903 - + Trimble Navigation Ltd. 58,200 1,382 - Veeco Instruments, Inc. 56,470 3,738 --------- 6,855 AIR TRANSPORTATION 1.1% - -------------------------------------------------------------------------------- AAR Corp. 62,800 750 + Airborne Freight Corp. 115,900 1,173 - + Alaska Air Group, Inc. 62,400 1,618 - America West Holdings Corp., Class B 78,700 782 - Atlantic Coast Airlines Holdings, Inc. 49,800 1,780 - Atlas Air, Inc. 90,150 3,268 - EGL, Inc. 109,200 3,112 - Midwest Express Holdings, Inc. 33,000 627 SkyWest, Inc. 65,600 3,313 --------- 16,423 ALCOHOLIC BEVERAGES 0.2% - -------------------------------------------------------------------------------- - Constellation Brands, Inc., Class A 44,200 2,155 - + The Robert Mondavi Corp., Class A 19,300 873 --------- 3,028 APPAREL 2.0% - -------------------------------------------------------------------------------- - The Buckle, Inc. 48,550 816 - + Chico's FAS, Inc. 41,100 1,331 - Footstar, Inc. 46,300 1,661 - + Genesco, Inc. 50,800 902 - + Global Sports, Inc. 50,500 434 Kellwood Co. 56,900 1,106 - + Kenneth Cole Productions, Inc., Class A 48,250 2,192 - The Men's Wearhouse, Inc. 97,950 2,865 - Nautica Enterprises, Inc. 73,900 933 - Pacific Sunwear of California 74,725 1,532 - + Polo Ralph Lauren Corp. 73,100 1,435 - Quiksilver, Inc. 52,750 1,009 - Reebok International Ltd. 134,100 2,892 Russell Corp. 76,500 1,224 Springs Industries, Inc., Class A 42,400 999 - The Children's Place Retail Stores, Inc. 61,500 1,595 - The Dress Barn, Inc. 42,300 1,060 - Timberland Co., Class A 95,100 4,910 - + Unifi, Inc. 133,400 1,159 - + Urban Outfitters, Inc. 40,200 354 + Warnaco Group, Inc., Class A 99,900 262 Wolverine World Wide, Inc. 97,600 1,055 --------- 31,726 AUTOMOTIVE PRODUCTS / MOTOR VEHICLES 1.8% - -------------------------------------------------------------------------------- A.O. Smith Corp., Class B 55,300 781 Bandag, Inc. 49,400 1,763 + Borg Warner, Inc. 62,117 2,345 + Carlisle Cos., Inc. 71,400 2,972 + Cooper Tire & Rubber Co. 170,500 1,865
52 See the Financial Notes, which are integral to this information. 57
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Copart, Inc. 127,900 1,926 - + CSK Auto Corp. 47,500 166 Donaldson Co., Inc. 107,600 2,434 + Fleetwood Enterprises, Inc. 77,200 1,018 - Group 1 Automotive, Inc. 50,200 499 - Hayes Lemmerz International, Inc. 71,600 783 Midas, Inc. 37,200 516 Modine Manufacturing Co. 70,000 1,846 - + Monaco Coach Corp. 44,900 766 Myers Industries, Inc. 51,387 681 + Oshkosh Truck Corp. 39,500 1,624 Polaris Industries, Inc. 56,200 1,953 - Stoneridge, Inc. 52,700 514 Superior Industries International, Inc. 60,900 2,074 - + Tower Automotive, Inc. 111,200 1,223 Winnebago Industries, Inc. 50,300 578 --------- 28,327 BANKS 4.2% - -------------------------------------------------------------------------------- Anchor Bancorp. Wisconsin, Inc. 56,000 864 Bancorpsouth, Inc. 131,762 1,721 Bank United Corp., Class A 77,200 4,376 Chemical Financial Corp. 32,926 704 Chittenden Corp. 65,000 1,727 Community First Bankshares, Inc. 109,500 1,697 Corus Bankshares, Inc. 34,400 1,365 F&M National Corp. 59,121 1,530 F.N.B. Corp. 52,423 1,127 First Bancorp./Puerto Rico 63,200 1,450 + First Busey Corp., Class A 32,100 588 First Citizens Bancshares, Class A 27,500 2,035 First Commonwealth Financial Corp. 137,200 1,363 First Financial Bancorp. 109,653 1,700 First Financial Bancshares, Inc. 23,600 726 Frontier Financial Corp. 41,000 769 Hancock Holding Co. 25,445 792 Harbor Florida Bancshares, Inc. 59,700 731 - Imperial Bancorp. 104,063 2,530 + Independence Community Bank 154,700 2,272 - + Integra Bank Corp. 41,070 1,060 Irwin Financial Corp. 49,100 758 MAF Bancorp., Inc. 54,425 1,306 Merchants New York Bancorp., Inc. 44,000 913 + Mid-State Bancshares 26,400 779 National Penn Bancshares, Inc. 41,860 890 - + Net.B@nk, Inc. 69,600 605 - Pacific Northwest Bancorp. 36,800 492 Park National Corp. 26,420 2,526 + PFF Bancorp., Inc. 31,700 586 Provident Bankshares Corp. 65,647 1,243 Queens County Bancorp., Inc. 48,930 1,370 + Republic Bancorp. 105,700 1,004 Republic Security Financial Corp. 114,200 774 + Richmond County Financial Corp. 67,100 1,577 Riggs National Corp., Washington, D.C. 66,600 749 S & T Bancorp., Inc. 64,100 1,210 The South Financial Group, Inc. 101,300 1,032 - Southwest Bancorp. of Texas, Inc. 67,700 2,471 + Sterling Bancshares, Inc. 61,300 1,054 Susquehanna Bancshares, Inc. 92,275 1,303 Texas Regional Bancshares, Inc., Class A 35,300 1,055 The Trust Co. of New Jersey 46,500 668 Trustco Bank Corp. 145,387 1,745 UMB Financial Corp. 50,418 1,708 United Bankshares, Inc. 99,200 1,934 + United Community Financial Corp. 79,400 556 + United National Bancorp. 36,000 639 Wesbanco, Inc. 45,500 1,055 Whitney Holding Corp. 53,500 1,976 ----- 65,105
See the Financial Notes, which 53 are integral to this information. 58 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) BUSINESS MACHINES & SOFTWARE 2.8% - -------------------------------------------------------------------------------- - + Activision, Inc. 56,100 775 - + Advanced Digital Information Corp. 122,000 1,586 Analogic Corp. 30,300 1,070 - Artesyn Technologies, Inc. 89,300 3,628 - + Auspex Systems, Inc. 70,300 712 - Avocent Corp. 101,986 7,235 - Black Box Corp. 44,200 2,912 - Computer Horizons Corp. 52,200 261 - + Concurrent Computer Corp. 127,300 2,244 Fair, Isaac & Co., Inc. 33,900 1,390 - + Hypercom Corp. 80,500 553 + IKON Office Solutions, Inc. 353,900 1,150 - + Inprise Corp. 144,300 920 - InterVoice-Brite, Inc. 77,600 759 - + Iomega Corp. 638,900 3,137 - + LTX Corp. 112,200 1,571 - + Maxtor Corp. 267,600 2,091 - + Micron Electronics, Inc. 227,900 1,802 - MICROS Systems, Inc. 30,100 594 - + MTI Technology Corp. 56,700 294 - + Netegrity, Inc. 68,450 5,339 - + Procom Technology, Inc. 27,400 622 - PTEK Holdings, Inc. 110,700 225 - SCM Microsystems, Inc. 34,600 1,315 - Systems & Computer Technology Corp. 76,800 1,109 --------- 43,294 BUSINESS SERVICES 13.9% - -------------------------------------------------------------------------------- - + 24/7 Media, Inc. 80,300 417 - + 4 Kids Entertainment, Inc. 19,600 283 + Aaron Rents, Inc., Class A 46,600 734 ABM Industries, Inc. 53,600 1,497 - Actel Corp. 56,800 2,080 - + Actuate Corp. 132,800 3,743 - Advantage Learning Systems, Inc. 81,300 2,414 - Advent Software, Inc. 71,200 4,259 - Advo, Inc. 48,200 1,774 - AHL Services, Inc. 37,200 409 - + Alliance Semiconductor Corp. 97,100 1,942 - Aspen Technology, Inc. 62,400 2,578 - Avant! Corp. 93,100 1,565 - AXENT Technologies, Inc. 68,000 1,305 - Bell & Howell Co. 55,900 1,062 - + Beyond.com Corp. 85,800 64 - + BindView Development Corp. 107,400 839 Bowne & Co., Inc. 85,400 715 - Brady Corp., Class A 54,100 1,677 - + Cambridge Technology Partners, Inc. 148,900 577 - Catalytica, Inc. 78,400 1,053 - CDI Corp. 45,200 718 - Century Business Services, Inc. 223,700 252 - Cerner Corp. 80,000 4,955 - Choicepoint, Inc. 95,272 4,877 - + Com21, Inc. 38,800 420 - + Complete Business Solutions, Inc. 84,100 873 Computer Task Group, Inc. 48,200 253 - Cytec Industries, Inc. 95,600 3,310 - Dendrite International, Inc. 93,250 2,028 - Digital River, Inc. 51,300 335 - Documentum, Inc. 42,200 3,587 - + EarthWeb, Inc. 24,500 309 - eBT International, Inc. 38,300 124 - + Echelon Corp. 78,600 2,496 - + Eclipsys Corp. 87,400 2,158 - + ePresene, Inc. 55,500 392 - F.Y.I., Inc. 36,300 1,457 FactSet Research Systems, Inc. 77,500 2,935 - FileNet Corp. 80,900 2,144 - Forrester Research, Inc. 49,500 2,033 G & K Services, Inc., Class A 48,950 1,352 - + Global Imaging Systems, Inc. 42,200 227 Great American Financial Resources, Inc. 100,150 1,778 - Great Plains Software, Inc. 47,700 1,857 - GTECH Holdings, Corp. 82,200 1,423 - HA-LO Industries, Inc. 150,237 582 - Hyperion Solutions Corp. 76,345 1,069 - IDT Corp. 64,000 2,288 - + IDX Systems Corp. 66,300 2,122 - + iGate Capital Corp. 99,400 503
54 See the Financial Notes, which are integral to this information. 59
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - + Infocure Corp. 80,700 411 - + Infocus Corp. 89,000 3,933 - Invitrogen Corp. 55,314 4,207 - + Iron Mountain, Inc. 129,920 4,393 Jack Henry & Associates, Inc. 96,200 5,291 - Jacobs Engineering Group, Inc. 63,000 2,607 - + JDA Software Group, Inc. 57,000 859 John H. Harland Co. 67,600 938 - Kroll-O'Gara Co. 52,300 307 - Kronos, Inc. 29,150 1,062 - Labor Ready, Inc. 97,950 294 - Lason, Inc. 46,100 41 - + Learning Tree International, Inc. 51,700 2,339 - + Liberty Satellite & Technology, Inc., Class A 149,800 749 - Lightbridge, Inc. 27,530 294 - - +(10)Manugistics Group, Inc. 67,600 7,702 - MAXIMUS, Inc. 50,400 1,238 - MemberWorks, Inc. 39,000 1,341 Mentor Corp. 55,900 985 - Mentor Graphics Corp. 151,300 3,546 - Mercator Software, Inc. 68,900 314 - + Mercury Computer Systems, Inc. 50,600 1,569 - + MicroStrategy, Inc. 58,100 1,391 - + Modis Professional Services, Inc. 226,400 934 - + Mpower Communications Corp. 108,750 707 + National Data Corp. 77,500 2,955 - + NationsRent, Inc. 134,800 303 - + Natural MicroSystems Corp. 81,600 3,687 - + Navigant Consulting Co. 96,000 366 - + Netmanage, Inc. 148,800 191 - + Network Peripherals, Inc. 34,600 376 New England Business Service, Inc. 32,200 559 - + Novadigm, Inc. 46,900 469 - + NYFIX, Inc. 58,550 2,313 - + Ogden Corp. 117,000 1,609 - On Assignment, Inc. 54,300 1,368 - + Orbital Sciences Corp. 88,000 698 - PAXAR Corp. 103,435 847 - Pegasus Solutions, Inc. 58,050 990 - Performance Food Group Co. 33,200 1,345 - + Phoenix Technologies Ltd. 62,100 997 + Pittston Brink's Group 122,600 1,946 PolyOne Corp. 228,100 1,796 - Pre-Paid Legal Services, Inc. 53,300 2,339 - Priority Healthcare Corp., Class B 53,727 2,888 - ProBusiness Services, Inc. 55,800 1,824 - Progress Software Corp. 84,200 1,331 - Project Software & Development, Inc. 51,400 668 - (2) Protein Design Labs, Inc. 101,500 13,710 - + Provant, Inc. 48,700 318 - + Proxim, Inc. 60,600 3,674 - + Puma Technology, Inc. 99,000 1,343 - QRS Corp. 35,550 300 - R.H. Donnelley Corp. 75,600 1,710 - + Radiant Systems, Inc. 65,100 1,200 - + RadiSys Corp. 40,800 1,081 - Remedy Corp. 74,300 1,272 - + Rural Cellular Corp., Class A 26,500 1,424 - S3, Inc. 217,200 1,962 - SAGA Systems, Inc. 69,300 372 - Sanchez Computer Associates, Inc. 58,700 943 - + The Santa Cruz Operation, Inc. 65,800 280 - + Seachange International, Inc. 51,150 1,125 - Seacor Smit, Inc. 40,750 1,706 - Sirius Satellite Radio, Inc. 99,600 5,005 - + SITEL Corp. 164,800 463 - + SoftNet Systems, Inc. 66,300 307 Spartech Corp. 55,500 857 - + SportsLine.com, Inc. 61,900 530 Standard Register Co. 64,700 776 - + StarTek, Inc. 33,100 842 Strayer Education, Inc. 36,700 883 - Structural Dynamics Research Corp. 85,200 879 - + Sylvan Learning Systems, Inc. 80,900 1,249 - Syntel, Inc. 90,200 851 - Tetra Tech, Inc. 93,475 3,248 - + Transaction Systems Architects, Inc., Class A 78,100 1,054 - + Unify Corp. 38,300 19 - UNOVA, Inc. 104,700 504
See the Financial Notes, which 55 are integral to this information. 60 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - URS Corp. 38,400 492 - Volt Information Sciences, Inc. 36,700 798 WABTEC 121,679 1,232 - The Wackenhut Corp., Class A 35,600 449 Wallace Computer Services, Inc. 94,800 1,375 - Washington Group International, Inc. 123,800 1,300 - + Wave Systems Corp., Class A 108,100 1,250 - + Zixit Corp. 34,100 833 --------- 216,777 CHEMICAL 1.6% - -------------------------------------------------------------------------------- A. Schulman, Inc. 69,600 761 - Airgas, Inc. 155,400 1,049 Albemarle Corp. 108,100 2,507 + Amcol International Corp. 63,200 466 Cambrex Corp. 59,200 2,364 Chemfirst, Inc. 35,900 826 Ethyl Corp. 167,200 334 Ferro Corp. 81,700 1,675 H.B. Fuller Co. 33,500 1,133 - International Specialty Products, Inc. 161,700 1,011 Lilly Industries, Inc., Class A 54,850 1,645 MacDermid, Inc. 73,700 1,585 + Olin Corp. 106,700 1,894 OM Group, Inc. 56,300 2,604 Rollins, Inc. 71,000 1,282 Tredegar Corp. 90,100 1,718 - Twinlab Corp. 66,600 350 - + W.R. Grace & Co. 158,300 604 WD-40 Co. 36,100 790 + Wellman, Inc. 75,000 1,125 + Xceed, Inc. 17,300 14 --------- 25,737 CONSTRUCTION 3.1% - -------------------------------------------------------------------------------- Centex Construction Products, Inc. 44,600 1,157 + D.R. Horton, Inc. 159,273 2,947 - DAL-Tile International, Inc. 129,800 1,606 - Del E. Webb Corp. 43,900 1,180 - Dycom Industries, Inc. 98,900 3,721 Elcor Corp. 46,150 718 Florida Rock Industries, Inc. 44,000 1,710 Granite Construction, Inc. 64,550 1,473 - Insituform Technologies, Inc., Class A 58,600 2,091 - + Integrated Electrical Services, Inc. 88,600 609 + Kaufman & Broad Home Corp. 114,100 3,394 + Lennar Corp. 145,926 4,688 - NCI Building Systems, Inc. 42,100 655 - NVR, Inc. 21,700 2,244 + Owens Corning 100,900 139 - Palm Harbor Homes, Inc. 54,387 795 + Pulte Corp. 95,400 3,178 - + Quanta Services, Inc. 152,450 4,735 The Ryland Group, Inc. 30,500 984 - Simpson Manufacturing, Inc. 28,600 1,219 - Specialty Equipment Cos., Inc. 46,500 1,410 Standard Pacific Corp. 69,800 1,309 Texas Industries, Inc. 49,800 1,161 - Toll Brothers, Inc. 85,600 2,782 - + U.S. Plastic Lumber Corp. 81,900 118 United Dominion Industries Ltd. 92,600 2,055 Walter Industries, Inc. 110,700 823 --------- 48,901 CONSUMER: DURABLE 0.7% - ------------------------------------------------------------------------------- - + Applica, Inc. 54,500 276 - + Champion Enterprises, Inc. 111,600 432 - + Furniture Brands International, Inc. 116,700 1,969 - + Genlyte Group, Inc. 32,300 836 + Haverty Furniture Cos., Inc. 48,600 547 - Helen of Troy Ltd. 68,300 393 Kimball International, Inc., Class B 94,900 1,477 La-Z-Boy, Inc. 143,200 2,255 - Rent-A-Center, Inc. 57,300 1,672 SLI, Inc. 81,350 671 - Sunbeam Corp. 222,434 209 Toro Co. 30,400 1,064 --------- 11,801 CONSUMER: NONDURABLE 2.6% - ------------------------------------------------------------------------------- - + The 3DO Co. 84,100 258 - Acclaim Entertainment, Inc. 127,000 167 Applebee's International, Inc. 63,200 1,909
56 See the Financial Notes, which are integral to this information. 61
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Aura Systems, Inc. 4,312 3 + CBRL Group, Inc. 134,900 2,411 - CEC Entertainment, Inc. 63,900 2,037 - The Cheesecake Factory 72,950 3,233 + CKE Restaurants, Inc. 117,200 264 - Cytyc Corp. 87,900 5,218 - Department 56, Inc. 33,900 481 + Dover Downs Entertainment, Inc. 88,800 1,043 - Fossil, Inc. 75,900 991 - Handleman Co. 64,900 641 - Hanover Direct, Inc. 473,400 266 - IHOP Corp. 47,800 1,010 - Jack in the Box, Inc. 90,600 2,220 - + JAKKS Pacific, Inc. 33,400 294 The Marcus Corp. 69,525 986 - Midway Games, Inc. 89,066 690 Movado Group, Inc. 31,100 447 - + NPC International, Inc. 53,100 591 + Oneida Ltd. 38,500 409 - Papa John's International, Inc. 58,300 1,465 Regis Corp. 95,750 1,448 Ruby Tuesday, Inc. 144,548 1,960 Russ Berrie & Co., Inc. 47,100 1,069 - Ryan's Family Steak Houses, Inc. 76,000 636 - Sonic Corp. 42,200 1,540 + Stewart Enterprises, Inc., Class A 250,100 531 - + The Topps Co., Inc. 107,100 967 - Trans World Entertainment Corp. 113,750 967 - Triarc Cos., Inc. 54,300 1,354 Tupperware Corp. 136,400 2,336 --------- 39,842 CONTAINERS 0.3% - -------------------------------------------------------------------------------- + Ball Corp. 69,000 2,424 - + Gaylord Container Corp. Class A 123,800 271 Greif Brothers Corp., Class A 52,800 1,690 --------- 4,385 ELECTRONICS 10.3% - -------------------------------------------------------------------------------- - + Adaptive Broadband Corp. 88,800 1,426 - + Advanced Radio Telecom Corp. 68,500 270 - Alliant Techsystems, Inc. 22,200 1,997 - + Anadigics, Inc. 62,500 1,398 - Anixter International, Inc. 87,700 2,127 - + Asyst Technologies, Inc. 75,900 1,138 - ATMI, Inc. 70,200 1,325 - AVT Corp. 72,300 454 - Aware, Inc. 53,600 1,658 Belden, Inc. 57,900 1,502 - Benchmark Electronics, Inc. 45,500 1,831 - + Brooks Automation, Inc. 41,100 1,089 C&D Technologies, Inc. 62,600 3,701 - + C-COR.net Corp. 80,300 1,255 - Cable Design Technologies Corp. 101,575 2,343 - Cirrus Logic, Inc. 156,300 6,740 - + Coherent, Inc. 63,700 2,218 + Cohu, Inc. 41,400 655 - + Computer Network Technology Corp. 57,300 1,741 - Concord Communications, Inc. 38,000 294 - Cox Radio, Inc., Class A 95,500 2,173 - + Cyberonics, Inc. 44,200 1,028 - Data Broadcasting Corp. 213,800 942 - Dionex Corp. 52,100 1,690 - DMC Stratex Networks, Inc. 168,600 3,899 - + DSP Group, Inc. 63,800 1,810 - Dupont Photomasks, Inc. 41,400 2,324 - Electro Scientific Industries, Inc. 63,200 2,208 - + Electroglas, Inc. 48,800 686 - + ESS Technology, Inc. 102,100 1,583 - + Exar Corp. 88,500 3,955 - + General Semiconductor, Inc. 88,900 1,017 - Genrad, Inc. 70,300 641 Gerber Scientific, Inc. 51,100 409 Harman International Industries, Inc. 81,200 3,898 - Hearst-Argyle Television, Inc. 120,000 2,152 - + Hollywood Entertainment Corp. 108,200 331 - Hutchinson Technology, Inc. 58,900 1,292 - IMRglobal Corp. 96,800 799 - International Rectifier Corp. 145,000 6,471 - Kent Electronics Corp. 67,000 1,248 - + Kopin Corp. 148,700 2,100 - Kulicke & Soffa Industries, Inc. 114,400 1,680
See the Financial Notes, which 57 are integral to this information. 62 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Littelfuse, Inc. 46,200 1,340 - MEMC Electronic Materials, Inc. 163,604 1,626 Methode Electronics, Inc., Class A 84,950 3,196 - + MRV Communications, Inc. 136,000 5,372 - + Mynd Corp. 77,300 986 - + Netopia, Inc. 39,700 432 - + P-Com, Inc. 181,500 1,021 + Park Electrochemical Corp. 25,500 1,685 - Paxson Communications Corp. 129,500 1,473 - Photronics, Inc. 70,300 1,586 - Pinnacle Systems, Inc. 118,300 1,494 + Pioneer Standard Electronics, Inc. 63,900 887 - + Plantronics, Inc. 115,600 5,274 - Plexus Corp. 94,400 5,953 - + Power Intergrations, Inc. 64,600 868 - +(4)Power-One, Inc. 174,000 12,343 - PRI Automation, Inc. 49,500 1,120 - Rayovac Corp. 64,500 951 - Remec, Inc. 104,350 3,111 - + REX Stores Corp. 15,376 283 - + Silicon Storage Technology, Inc. 211,200 4,805 - Silicon Valley Group, Inc. 80,900 2,665 - + Spectrian Corp. 28,100 339 - + SpeedFam-IPEC, Inc. 69,700 662 - STAR Telecommunications, Inc. 102,900 167 Superior TeleCom, Inc. 40,284 199 Technitrol, Inc. 38,900 4,313 - Tekelec, Inc. 136,800 5,036 - + THQ, Inc. 45,700 937 - + Three-Five Systems, Inc. 51,049 1,761 - + Tweeter Home Entertainment Group, Inc. 42,100 1,013 - Varian Medical Systems, Inc. 75,600 3,695 Vector Group Ltd. 54,300 757 - + Western Digital Corp. 339,000 2,034 - + Youthstream Media Networks, Inc. 65,800 127 - + Zoran Corp. 34,700 1,739 --------- 160,748 ENERGY: RAW MATERIALS 2.4% - -------------------------------------------------------------------------------- Arch Coal, Inc. 89,500 973 - + Atwood Oceanics, Inc. 32,900 1,104 - Barrett Resources Corp. 78,700 2,863 - + Basin Exploration, Inc. 44,000 872 Cabot Oil & Gas Corp., Class A 68,300 1,340 - + Dril-Quip, Inc. 41,100 1,356 - + Evergreen Resources, Inc. 35,200 968 - Forest Oil Corp. 127,400 1,760 - + Friede Goldman Halter, Inc. 115,000 661 - + Grey Wolf, Inc. 424,300 1,962 Helmerich & Payne, Inc. 117,700 3,700 - + Key Energy Services, Inc. 226,100 2,035 - Kirby Corp. 58,100 1,071 - Louis Dreyfus Natural Gas Corp. 101,900 3,267 + McDermott International, Inc. 142,200 1,378 - Newpark Resources, Inc. 163,400 1,471 NL Industries, Inc. 118,900 2,809 - + Parker Drilling Co. 182,100 1,093 - + Tom Brown, Inc. 83,700 1,915 + USEC, Inc. 202,000 1,035 - + UTI Energy Corp. 87,400 1,753 + Western Gas Resources, Inc. 76,000 1,667 --------- 37,053 FOOD & AGRICULTURE 2.1% - -------------------------------------------------------------------------------- - + Agribrands International, Inc. 23,900 1,040 - American Italian Pasta Co., Class A 43,500 873 - + Aurora Foods, Inc. 129,800 365 Bob Evans Farms, Inc. 83,900 1,578 Coca-Cola Bottling Co. Consolidated 20,800 749 + Delta & Pine Land Co. 90,900 2,221 + Dole Food Co., Inc. 132,000 1,592 Dreyer's Grand Ice Cream, Inc. 66,600 1,640 + Earthgrains Co. 100,300 2,031 Fleming Cos., Inc. 93,700 1,329 - Fresh Del Monte Produce, Inc. 114,600 451 - + Grand Union Co. 73,000 3 Lance, Inc. 68,000 684 Michael Foods, Inc. 44,300 1,193 - Ralcorp Holdings, Inc. 69,966 984
58 See the Financial Notes, which are integral to this information. 63
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - The Scotts Co., Class A 66,000 2,359 Seaboard Corp. 4,200 735 - + Smithfield Foods, Inc. 133,800 3,838 + Tootsie Roll Industries, Inc. 79,259 3,042 Universal Foods Corp. 114,800 2,267 - Vlasic Foods International, Inc. 73,100 105 - + Whole Foods Market, Inc. 63,100 2,918 - Wild Oats Markets, Inc. 53,900 340 --------- 32,337 GOLD 0.0% - -------------------------------------------------------------------------------- - Battle Mountain Gold Co. 261,230 359 HEALTHCARE / DRUGS & MEDICINE 16.1% - -------------------------------------------------------------------------------- - +(1)Abgenix, Inc. 192,300 15,168 - Acuson Corp. 65,700 1,499 - Advance Paradigm, Inc. 59,800 2,923 - Alkermes, Inc. 127,500 4,725 Alpharma, Inc., Class A 94,567 3,670 - + Amerisource Health Corp., Class A 122,400 5,317 - Apria Healthcare Group, Inc. 123,300 2,466 Arrow International, Inc. 52,400 2,112 - + Avigen, Inc. 40,000 1,550 - Barr Laboratories, Inc. 82,500 5,208 + Bergen Brunswig Corp., Class A 317,400 2,876 - Beverly Enterprises, Inc. 239,200 1,196 Bindley Western Industries, Inc. 82,198 2,954 - Bio-Technology General Corp. 129,000 1,354 - Biomatrix, Inc. 50,300 962 - Caremark Rx, Inc. 499,900 6,249 Carter-Wallace, Inc. 107,500 2,950 - (8) Celgene Corp. 152,200 9,798 - + Cephalon, Inc. 97,500 5,228 - + Cerus Corp. 30,500 1,704 - Conmed Corp. 36,900 542 + Cooper Cos., Inc. 33,700 1,205 - + COR Therapeutics, Inc. 127,200 7,187 - + Covance, Inc. 134,700 1,162 - Coventry Health Care, Inc. 139,900 2,553 - + CV Therapeutics, Inc. 44,000 3,465 Datascope Corp. 35,200 1,219 - + DaVita, Inc. 188,200 2,117 Diagnostic Products Corp. 32,900 1,501 - Dura Pharmaceuticals, Inc. 105,600 3,637 - + Entremed, Inc. 37,200 1,158 - + Enzo Biochem, Inc. 60,700 2,337 - Foundation Health Systems, Inc., Class A 289,000 5,834 - Haemonetics Corp. 59,000 1,386 - + Henry Schein, Inc. 96,800 2,359 Hooper Holmes, Inc. 159,600 1,515 - Idexx Laboratories, Inc. 82,000 1,968 - Igen International, Inc. 37,800 940 - +(9)ImClone Systems 147,400 8,061 - Incyte Genomics, Inc. 150,900 5,527 - Inhale Therapeutic Systems, Inc. 99,500 4,950 Invacare Corp. 71,900 2,049 - Isis Pharmaceuticals, Inc. 90,000 928 - + KV Pharmaceutical Co., Class A 56,250 2,190 - + Laboratory Corp. of America Holdings, Inc. 32,790 4,423 - + Laser Vision Centers, Inc. 59,500 242 - + Ligand Pharmaceuticals, Inc., Class B 62,600 931 - +(6)Medarex, Inc. 170,400 10,416 - Medicis Pharmaceutical Corp., Class A 69,200 5,095 - Mid Atlantic Medical Services, Inc. 111,400 1,894 Mine Safety Appliances Co. 33,600 706 - + Myriad Genetics, Inc. 53,500 6,420 - NBTY, Inc. 161,600 1,050 - Oakley, Inc. 161,800 3,398 - Ocular Sciences, Inc. 54,700 677 - Orthodontic Centers of America, Inc. 115,300 3,848 Owens & Minor, Inc. 77,800 1,177 - Perrigo Co. 172,000 1,139 - Pharmaceutical Product Development, Inc. 59,200 1,854 - + Pharmacopeia, Inc. 54,500 995 - + Pharmacyclics, Inc. 38,000 2,045 - + Province Healthcare Co. 71,900 3,029 - + PSS World Medical, Inc. 139,900 420 # -(5)Quest Diagnostic, Inc. 108,600 10,453 - Quorum Health Group, Inc. 168,500 2,254
See the Financial Notes, which 59 are integral to this information. 64 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - + Renal Care Group, Inc. 109,100 2,564 - ResMed, Inc. 72,000 1,836 - Sangstat Medical Corp. 32,700 327 - SICOR, Inc. 227,600 2,916 - Sola International, Inc. 55,800 241 - + Steris Corp. 158,800 2,382 - + Sunrise Technologies International 113,400 819 - + SuperGen, Inc. 78,600 1,012 - + Syncor International Corp. 56,800 1,459 - Techne Corp. 48,800 5,502 - Transkaryotic Therapies, Inc. 54,100 2,015 - + Triangle Pharmaceuticals, Inc. 90,000 757 - + Universal Health Services, Class B 71,200 5,972 - US Oncology, Inc. 217,872 1,171 - (3) Vertex Pharmaceuticals, Inc. 137,300 12,784 - + Vical, Inc. 46,800 994 - + Viropharma, Inc. 35,600 832 West Pharmaceutical Services, Inc. 34,100 750 --------- 252,498 HOUSEHOLD PRODUCTS 0.4% - -------------------------------------------------------------------------------- - Bush Boake Allen, Inc. 46,100 2,230 Church & Dwight Co., Inc. 90,800 1,793 - + NU Skin Enterprises, Inc., Class A 72,000 391 - Playtex Products, Inc. 143,500 1,453 --------- 5,867 INSURANCE 3.6% - -------------------------------------------------------------------------------- Alfa Corp. 91,800 1,767 - AmerUs Group Co. 59,100 1,559 Argonaut Group, Inc. 52,200 897 Arthur J. Gallagher & Co. 90,800 5,732 Brown & Brown, Inc. 67,000 2,178 CNA Surety Corp. 100,700 1,171 + Commerce Group, Inc. 81,200 2,076 - Delphi Financial Group, Inc., Class A 47,871 1,771 E.W. Blanch Holdings, Inc. 30,900 583 Enhance Financial Services Group, Inc. 90,000 1,046 FBL Financial Group, Inc., Class A 70,900 1,139 + First American Corp. 150,200 3,145 + Fremont General Corp. 164,100 595 Harleysville Group, Inc. 67,800 1,564 HCC Insurance Holdings, Inc. 117,150 2,233 - + HealthAxis, Inc. 19,682 49 + Hilb, Rogal & Hamilton Co. 31,200 1,236 + Horace Mann Educators Corp. 95,700 1,609 + HSB Group, Inc. 68,700 2,718 Kansas City Life Insurance Co. 29,000 941 Liberty Corp. 45,900 1,589 + Liberty Financial Cos., Inc. 114,400 3,089 - Markel Corp. 17,800 2,579 - Medical Assurance, Inc. 55,431 769 + Nationwide Financial Services, Inc., Class A 57,087 2,776 + Ohio Casualty Corp. 141,300 1,188 Presidential Life Corp. 70,600 1,028 + Reliance Group Holdings, Inc. 174,982 11 RLI Corp. 23,575 922 SCPIE Holdings, Inc. 22,200 422 Selective Insurance Group, Inc. 60,200 1,038 State Auto Financial Corp. 91,200 1,231 Trenwick Group Ltd. 75,750 1,487 - + Triad Guaranty, Inc. 31,500 915 - UICI 109,300 813 W.R. Berkley Corp. 60,400 2,057 Zenith National Insurance Corp. 41,200 937 --------- 56,860 MEDIA 1.6% - -------------------------------------------------------------------------------- Ackerly Group, Inc. 56,600 587 - + Actv, Inc. 119,500 1,176 Banta Corp. 58,800 1,356 - Consolidated Graphics, Inc. 31,800 342 - + CTC Communications Group, Inc. 55,150 533 - + Cumulus Media, Inc. Class A 53,300 333 - Cymer, Inc. 69,000 1,725 - + Emusic.com, Inc. 42,200 34 - Gaylord Entertainment Co. 78,400 1,862 Grey Global Group, Inc. 3,400 1,904 John Wiley & Sons, Inc., Class A 143,900 2,941 Journal Register Co. 107,400 1,913 - Loews Cineplex Entertainment Corp. 109,500 103
60 See the Financial Notes, which are integral to this information. 65
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Mail-Well, Inc. 115,900 572 - Metromedia International Group, Inc. 196,800 732 - PanAmSat Corp. 45,200 1,514 Penton Media, Inc. 75,200 2,298 - + Scholastic Corp. 40,900 3,272 - Sinclair Broadcast Group, Inc., Class A 106,600 983 - Young Broadcasting, Inc., Class A 35,200 873 --------- 25,053 MISCELLANEOUS 0.9% - -------------------------------------------------------------------------------- - Hain Celestial Group, Inc. 68,700 2,727 - ITT Educational Services, Inc. 56,750 894 - + MCSi, Inc. 29,100 837 - (7) Sabre Group Corp. 304,900 10,195 --------- 14,653 MISCELLANEOUS FINANCE 4.7% - -------------------------------------------------------------------------------- 1st Source Corp. 47,034 738 Advanta Corp., Class A 64,209 658 - Affiliated Managers Group, Inc. 52,900 3,181 AMCORE Financial, Inc. 63,650 1,249 + American Capital Strategies Ltd. 58,000 1,280 Area Bancshares Corp. 38,200 797 Bay View Capital Corp. 76,800 624 - BOK Financial Corp. 115,467 2,194 BT Financial Corp. 39,890 780 Cathay Bancorp., Inc. 21,400 1,055 + Commercial Federal Corp. 133,700 2,340 CVB Financial Corp. 58,575 977 Dain Rauscher Corp. 30,600 2,871 Downey Financial Corp. 66,871 3,193 Fidelity National Financial, Inc. 158,882 3,903 - Financial Federal Corp. 34,900 739 First Sentinel Bancorp., Inc. 82,562 766 + Greater Bay Bancorp. 94,000 3,061 + Heller Financial, Inc. 107,000 3,130 International Bancshares Corp. 51,237 1,835 - + Investment Technology Group, Inc. 74,000 2,664 Investors Financial Services Corp. 70,400 5,047 - Kforce.com, Inc. 83,400 339 MDC Holdings, Inc. 50,100 1,371 - + MessageMedia, Inc. 129,400 279 Morgan Keegan, Inc. 67,950 1,355 - + National Discount Broker Group, Inc. 49,600 2,415 Northwest Bancorp., Inc. 111,100 826 - Ocwen Financial Corp. 143,500 843 Pacific Capital Bancorp. 58,400 1,562 Phoenix Investment Partners Ltd. 104,900 1,639 Raymond James Financial, Inc. 108,900 3,682 + Siebert Financial Corp. 53,200 333 - + SierraCities.com, Inc. 44,900 180 + Southwest Securities Group 37,530 1,060 Staten Island Bancorp., Inc. 85,800 1,657 Student Loan Corp. 47,800 2,557 Value Line, Inc. 23,600 823 + Waddell & Reed Financial, Inc., Class A 194,350 6,195 Webster Financial Corp. 126,000 3,071 --------- 73,269 NON-FERROUS METALS 0.5% - -------------------------------------------------------------------------------- Commercial Metals Co. 33,633 916 - Kaiser Aluminum Corp. 186,900 946 - MAXXAM, Inc. 15,900 302 Minerals Technologies, Inc. 48,100 1,506 Reliance Steel & Aluminum Co. 66,075 1,569 - Stillwater Mining Co. 91,700 2,659 --------- 7,898 OIL: DOMESTIC 2.6% - -------------------------------------------------------------------------------- - + CAL Dive International, Inc. 37,400 1,861 Cross Timbers Oil Co. 174,787 3,288 - Global Industries Ltd. 216,800 2,276 - Houston Exploration Co. 69,000 1,553 - National-Oilwell, Inc. 189,200 5,534 - Newfield Exploration Co. 100,900 3,809 - + Nuevo Energy Co. 41,500 752 - + Patterson Energy, Inc. 81,100 2,281 + Pennzoil-Quaker State Co. 185,400 2,178 - Pioneer Natural Resources Co. 233,800 3,054 Pogo Producing Co. 95,200 2,380
See the Financial Notes, which 61 are integral to this information. 66 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Pride International, Inc. 155,400 3,934 - Stone Energy Corp. 43,600 2,232 - + Superior Energy Services 159,000 1,431 - Tesoro Petroleum Corp. 73,300 760 Vintage Petroleum, Inc. 148,700 3,141 --------- 40,464 OPTICAL & PHOTO 0.3% - -------------------------------------------------------------------------------- - + Ingram Micro, Inc., Class A 173,100 2,954 Polaroid Corp. 105,700 1,064 - + Zomax, Inc. 56,700 344 --------- 4,362 PAPER & FOREST PRODUCTS 0.5% - -------------------------------------------------------------------------------- - Buckeye Technologies, Inc. 82,300 1,409 Caraustar Industries, Inc. 60,700 611 Chesapeake Corp. 37,300 732 Longview Fibre Co. 122,200 1,665 PH Glatfelter Co. 99,400 1,037 Rock Tennessee Co., Class A 51,930 464 - Thermo Fibertek, Inc. 143,700 593 Universal Forest Products, Inc. 47,400 640 Wausau Mosinee Paper Corp. 120,725 1,056 --------- 8,207 PRODUCER GOODS & MANUFACTURING 6.5% - -------------------------------------------------------------------------------- - Advanced Energy Industries, Inc. 68,800 1,187 AGCO Corp. 140,700 1,600 - Albany International Corp., Class A 72,183 776 Ametek, Inc. 75,600 1,644 + Applied Industrial Technologies, Inc. 47,600 806 - Applied Micro Circuits Corp. 95,573 7,305 AptarGroup, Inc. 84,100 1,740 - Astec Industries, Inc. 31,700 327 Baldor Electric, Co. 79,720 1,584 Barnes Group, Inc. 43,900 845 CLARCOR, Inc. 57,750 1,104 - Comfort Systems USA, Inc. 87,100 256 - + Cuno, Inc. 38,800 985 Curtiss-Wright Corp. 23,600 1,112 - + Daisytek International Corp. 40,100 195 - + Diamond Technology Partners, Inc. 50,700 2,262 - + Encompass Services Corp. 144,033 657 + Federal Signal Corp. 106,700 2,494 - + Fisher Scientific International 94,500 3,632 - Flowserve Corp. 88,834 1,788 Foster Wheeler Corp. 95,700 706 Franklin Electric Co., Inc. 13,200 899 Graco, Inc. 48,437 1,741 - Hanover Compressor Co. 138,500 4,519 - Harbor Global Co. Ltd. 12,760 51 + Helix Technology Corp. 53,500 1,491 Hughes Supply, Inc. 55,650 1,043 - + Ibis Technology Corp. 19,800 750 IDEX Corp. 71,625 2,310 - Ionics, Inc. 31,700 664 JLG Industries, Inc. 103,300 1,440 + Kaydon Corp. 70,700 1,551 Kennametal, Inc. 71,600 2,103 Libbey, Inc. 36,200 986 Lincoln Electric Holdings, Inc. 100,700 1,731 - Lone Star Technologies, Inc. 56,900 2,285 Manitowoc Co., Inc. 58,062 1,579 - Marine Drilling Co., Inc. 138,200 3,300 MascoTech, Inc. 105,500 1,761 Matthews International Corp., Class A 31,700 856 - + Maverick Tube Corp. 41,800 651 Metals USA, Inc. 57,228 161 Milacron, Inc. 82,200 1,310 - MSC Industrial Direct Co., Class A 80,100 1,191 Nacco Industries, Inc., Class A 19,750 752 Nordson Corp. 76,000 2,180 Precision Castparts Corp. 117,400 4,432 - + Presstek, Inc. 77,000 1,213 Regal Beloit 49,600 831 Roper Industries, Inc. 72,000 2,520 + Sauer-Danfoss, Inc. 106,300 804 - + Scott Technologies, Inc. 39,600 911 - + Shaw Group, Inc. 46,600 3,798 - SPS Technologies, Inc. 30,000 1,549 + Steelcase, Inc., Class A 71,900 1,267 + Stewart & Stevenson Services 66,300 1,591
62 See the Financial Notes, which are integral to this information. 67
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Tecumseh Products Co., Class A 45,400 1,810 Tennant Co. 21,500 935 - Terex Corp. 65,500 806 - UCAR International, Inc. 106,400 878 - Ultratech Stepper, Inc. 50,400 1,184 Valmont Industries, Inc. 54,700 1,115 Watsco, Inc. 63,600 599 Watts Industries, Inc., Class A 62,400 698 - + WMS Industries, Inc. 72,900 1,622 + York International Corp. 90,300 2,455 --------- 101,328 RAILROAD & SHIPPING 0.4% - -------------------------------------------------------------------------------- Alexander & Baldwin, Inc. 95,800 2,389 Overseas Shipholding Group, Inc. 80,100 1,922 - Wisconsin Central Transportation Corp. 115,800 1,484 --------- 5,795 REAL PROPERTY 0.4% - -------------------------------------------------------------------------------- - Fairfield Communities, Inc. 95,200 1,208 Forest City Enterprises, Inc., Class A 71,300 2,638 LNR Property Corp. 55,500 1,200 - Trammell Crow Co. 82,800 1,107 --------- 6,153 RETAIL 2.8% - -------------------------------------------------------------------------------- - 7-Eleven, Inc. 247,340 2,613 - + 99 Cents Only Stores 80,100 1,797 - Ames Department Stores, Inc. 55,400 218 Burlington Coat Factory Warehouse Corp. 105,140 1,656 Casey's General Stores, Inc. 117,000 1,463 - Charming Shoppes, Inc. 238,800 1,463 Claire's Stores, Inc. 121,575 2,447 - + Cost Plus, Inc. 49,800 1,394 - + Duane Reade, Inc. 42,100 1,229 - Egghead.com, Inc. 69,048 160 + Great Atlantic & Pacific Tea Co., Inc. 76,900 769 - Insight Enterprises, Inc. 96,550 3,138 - + Intertan, Inc. 68,700 760 + Longs Drug Stores, Inc. 89,400 1,956 - Michaels Stores, Inc. 86,100 2,093 - + OfficeMax, Inc. 265,700 764 - + PC Connection, Inc. 57,050 1,556 Pep Boys--Manny, Moe, & Jack 124,800 562 - + PetSmart, Inc. 263,100 1,168 Pier 1 Imports, Inc. 227,700 3,017 Ruddick Corp. 109,400 1,436 - + Shop At Home, Inc. 40,800 82 - ShopKo Stores, Inc. 69,600 444 Spiegel, Inc., Class A 311,300 2,160 - + Sunglass HUT International, Inc. 96,500 748 - Systemax, Inc. 80,300 191 - United Stationers, Inc. 80,700 2,426 - Value City Department Stores, Inc. 79,400 645 - Venator Group, Inc. 325,500 4,598 - + Whitehall Jewellers, Inc. 39,150 313 --------- 43,266 STEEL 0.3% - -------------------------------------------------------------------------------- - + Bethlehem Steel Corp. 310,900 894 Carpenter Technology Corp. 52,500 1,628 Cleveland-Cliffs, Inc. 24,800 512 - LTV Corp. 205,500 244 Ryerson Tull, Inc. 58,400 438 - Steel Dynamics, Inc. 96,300 1,156 --------- 4,872 TELEPHONE 1.5% - -------------------------------------------------------------------------------- - Brightpoint, Inc. 115,450 768 - CellStar Corp. 93,500 216 + CFW Communication Co. 31,100 618 - ICG Communications, Inc. 44,500 19 Inter-Tel, Inc. 62,000 717 - + Interdigital Communications Corp. 124,600 1,363 - + Leap Wireless International, Inc. 63,500 3,159 - + Neon Communications, Inc. 38,700 467 - Optical Cable Corp. 133,150 2,122 - Pacific Gateway Exchange, 24,400 18 - + Pegasus Communications Corp. 107,700 3,830 - Primus Telecommunications Group, Inc. 80,400 407
See the Financial Notes, which 63 are integral to this information. 68 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - TALK.com, Inc. 184,800 572 - + Teligent, Inc., Class A 75,000 570 - Varco International, Inc. 219,528 3,787 - West Teleservices Corp. 151,500 3,863 - World Access, Inc. 121,400 592 --------- 23,088 TOBACCO 0.1% - -------------------------------------------------------------------------------- + Universal Corp. 66,500 1,862 TRAVEL & RECREATION 1.9% - AMERCO, Inc. 52,700 1,067 - + American Classic Voyager Co. 49,100 678 - Anchor Gaming, Inc. 27,600 2,344 - + Argosy Gaming Co. 67,200 1,092 - Avis Group Holdings, Inc. 73,900 2,208 - + Aztar Corp. 96,100 1,454 - Bally Total Fitness Holding Corp. 57,000 1,421 Callaway Golf Co. 178,500 2,856 Central Parking Corp. 86,100 1,652 - Choice Hotels International, Inc. 124,800 1,466 - + Dollar Thrifty Automotive Group, Inc. 57,400 883 - Extended Stay America, Inc. 225,100 2,772 - + Intranet Solutions, Inc. 51,000 2,372 - + Marketing Services Group, Inc. 42,200 73 - Prime Hospitality Corp. 105,900 1,006 - Rent-Way, Inc. 57,200 290 - + Sodexho Marriott Services, Inc. 149,100 2,740 - + Station Casinos, Inc. 142,500 2,298 - Vail Resorts, Inc. 63,900 1,354 --------- 30,026 TRUCKING & FREIGHT 1.2% - -------------------------------------------------------------------------------- - American Freightways Corp. 76,500 1,234 Arnold Industries, Inc. 57,800 1,015 - + Forward Air Corp. 51,500 2,118 - Fritz Cos., Inc. 86,500 703 - Heartland Express, Inc. 60,347 1,049 J.B. Hunt Transport Services, Inc. 82,450 1,077 - Landstar Systems, Inc. 21,100 997 - M.S. Carriers, Inc. 25,800 403 + Roadway Express, Inc. 45,600 938 Rollins Truck Leasing Corp. 136,450 716 - + Swift Transportation Co., Inc. 149,300 2,128 USFreightways Corp. 55,200 1,421 Wabash National Corp. 54,100 433 Werner Enterprises, Inc. 111,462 1,560 - XTRA Corp. 29,100 1,324 - Yellow Corp. 58,600 1,055 --------- 18,171 UTILITIES: ELECTRIC & GAS 3.8% - -------------------------------------------------------------------------------- + AGL Resources, Inc. 127,600 2,600 + American States Water Co. 21,500 671 Atmos Energy Corp. 74,800 1,730 Avista Corp. 111,300 2,497 Black Hills Corp. 54,300 1,697 California Water Service Group 36,000 970 CH Energy Group, Inc. 40,200 1,583 Cleco Corp. 53,300 2,535 E'Town Corp. 21,700 1,462 - El Paso Electric Co. 129,100 1,548 Empire District Electric Co. 42,400 1,174 Energen Corp. 71,900 2,058 + Hawaiian Electric Industries, Inc. 76,900 2,533 + Idacorp, Inc. 89,700 4,423 Laclede Gas Co. 44,700 978 Madison Gas & Electric Co. 38,800 844 New Jersey Resources Corp. 42,000 1,677 Northwest Natural Gas Co. 60,100 1,409 Northwestern Corp. 55,000 1,217 NUI Corp. 31,000 967 ONEOK, Inc. 69,900 2,770 Otter Tail Power Co. 56,600 1,256 Philadelphia Suburban Corp. 96,700 2,266 Piedmont Natural Gas Co., Inc. 75,300 2,297 Public Service Co. of New Mexico 93,100 2,566
64 See the Financial Notes, which are integral to this information. 69
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) + RSG Energy Group, Inc. 83,300 2,457 - Southern Union Co. 117,382 2,208 Southwest Gas Corp. 74,200 1,549 UGI Corp. 63,900 1,482 UIL Holdings Corp. 34,100 1,596 Unisource Energy Corp. Holding Co. 76,580 1,144 - + Veritas DGC, Inc. 65,600 1,968 WPS Resources Corp. 62,700 2,018 --------- 60,150
SHORT-TERM INVESTMENTS 0.5% of investments
SECURITY FACE VALUE MKT. VALUE RATE, MATURITY DATE ($ x 1,000) ($ x 1,000) Bank One Grand Cayman Time Deposit 6.030%, 11/01/00 2,962 2,962 Wachovia Bank Time Deposit 6.03%, 11/01/00 5,356 5,356 ------- 8,318
U.S. TREASURY OBLIGATIONS 0.0% of investments # U.S. Treasury Bills 6.02%-6.03%, 12/14/00 255 253
- -------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. See the Financial Notes, which 65 are integral to this information. 70 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS Statement of ASSETS AND LIABILITIES As of October 31, 2000. All numbers x 1,000 except NAV.
ASSETS - -------------------------------------------------------------------- Investments, at market value $1,565,111 a Collateral held for securities on loan 160,136 b Receivables: Fund shares sold 1,891 Interest 1 Dividends 506 Investments sold 44 Income from lending securities 53 Most recent daily change in value of futures 82 Prepaid expenses + 68 ------------ TOTAL ASSETS 1,727,892 LIABILITIES - -------------------------------------------------------------------- Collateral held for securities on loan 160,136 b Payables: Fund shares redeemed 1,251 Investments bought 6,336 Investment adviser and administrator fees 8 Transfer agent and shareholder service fees 32 Accrued expenses + 241 ------------ TOTAL LIABILITIES 168,004 NET ASSETS - -------------------------------------------------------------------- TOTAL ASSETS 1,727,892 TOTAL LIABILITIES - 168,004 ------------ NET ASSETS $1,559,888 NET ASSETS BY SOURCE Capital received from investors 1,279,997 Net investment income not yet distributed 5,666 Net realized capital gains 163,915 Net unrealized capital gains 110,310 c
NET ASSET VALUE (NAV)
SHARES SHARE CLASS NET ASSETS / OUTSTANDING = NAV Investor Shares $803,072 38,140 $21.06 Select Shares(R) $756,816 35,884 $21.09
a The fund paid $1,454,544 for these securities. Not counting short-term obligations and government securities, the fund paid $1,161,813 for securities during the report period and received $701,873 from securities it sold or that matured. This includes $85,378 in transactions with other SchwabFunds(R). b Market value of securities loaned: $158,163. c These derive from investments and futures. As of the report date, the fund had twelve open Russell 2000 futures contracts due to expire on December 15, 2000, with a contract value of $3,003 and unrealized losses of $257.
FEDERAL TAX DATA - -------------------------------------------------------------------- COST BASIS OF PORTFOLIO $1,465,440 NET UNREALIZED GAINS AND LOSSES: Gains $375,573 Losses + (276,159) ------------ $99,414 RECLASSIFICATIONS: Net investment income not yet distributed $1 Reclassified as: Net realized capital gains ($31,001) Capital received from investors $31,000 TAX DESIGNATION (UNAUDITED): The fund hereby designates $17 million as a capital gain dividend for the fiscal year ended October 31, 2000.
66 See the Financial Notes, which are integral to this information. 71 Statement of OPERATIONS For November 1, 1999 through October 31, 2000. All numbers x 1,000.
INVESTMENT INCOME - -------------------------------------------------------------------- Dividends $11,510 a Interest 582 Lending of securities + 54 ------------ TOTAL INVESTMENT INCOME 12,146 NET REALIZED GAINS AND LOSSES - -------------------------------------------------------------------- Net realized gains on investments sold 200,536 Net realized gains on futures contracts + 433 ------------ NET REALIZED GAINS 200,969 NET UNREALIZED GAINS AND LOSSES - -------------------------------------------------------------------- Net unrealized gains on investments 819 Net unrealized losses on futures contracts + (257) ------------ NET UNREALIZED GAINS 562 EXPENSES - -------------------------------------------------------------------- Investment adviser and administrator fees 4,459 b Transfer agent and shareholder service fees: Investor Shares 1,649 c Select Shares(R) 641 c Trustees' fees 9 d Custodian fees 202 Portfolio accounting fees 207 Professional fees 40 Registration fees 215 Shareholder reports 100 Proxy fees 109 Other expenses + 34 ------------ Total expenses 7,665 Expense reduction - 1,887 e ------------ NET EXPENSES 5,778 INCREASE IN NET ASSETS FROM OPERATIONS - -------------------------------------------------------------------- TOTAL INVESTMENT INCOME 12,146 NET EXPENSES - 5,778 ------------ NET INVESTMENT INCOME 6,368 NET REALIZED GAINS 200,969 f NET UNREALIZED GAINS + 562 f ------------ INCREASE IN NET ASSETS FROM OPERATIONS $207,899
a An additional $7 was withheld for foreign taxes. b Calculated as a percentage of average daily net assets: 0.33% of the first $500 million and 0.28% of assets beyond that. Prior to February 29, 2000, the percentages were 0.50% of the first $300 million and 0.45% of assets beyond that. c Calculated as a percentage of average daily net assets: for transfer agent services, 0.05% of the fund's assets; for shareholder services, 0.20%, and 0.05% of the assets of each respective share class. d For the fund's independent trustees only. e Includes $1,623 from the investment adviser (CSIM) and $264 from the transfer agent and shareholder service agent (Schwab). These reductions reflect a guarantee by CSIM and Schwab to limit the operating expenses of this fund through at least February 28, 2001, as follows:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS - -------------------------------------------------------------------- Investor Shares 0.49 Select Shares 0.38
This limit does not include interest, taxes and certain non-routine expenses. f These add up to a net gain on investments of $201,531. See the Financial, which are 67 integral to this information. 72 SCHWAB SMALL-CAP INDEX FUND(R) -- FINANCIALS Statements of CHANGES IN NET ASSETS For the current and prior report periods. All numbers x 1,000.
OPERATIONS - ------------------------------------------------------------------------------- 11/1/99 - 10/31/00 11/1/98 - 10/31/99 Net investment income $6,368 $2,830 Net realized gains or losses 200,969 (5,689) Net unrealized gains + 562 135,451 ----------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 207,899 132,592 DISTRIBUTIONS PAID - ------------------------------------------------------------------------------- DIVIDENDS FROM NET INVESTMENT INCOME Investor Shares 1,061 1,755 Select Shares(R) + 1,847 752 ----------------------------------- TOTAL DIVIDENDS FROM NET INVESTMENT INCOME 2,908 2,507 a DISTRIBUTIONS FROM NET REALIZED GAINS Investor Shares -- 27,699 Select Shares + -- 8,884 ----------------------------------- TOTAL DISTRIBUTIONS FROM NET REALIZED GAINS $ -- $36,583
TRANSACTIONS IN FUND SHARES - ------------------------------------------------------------------------------- 11/1/99 - 10/31/00 11/1/98 - 10/31/99 QUANTITY VALUE QUANTITY VALUE Shares sold: Investor Shares 20,058 $409,420 15,020 $244,144 Select Shares + 16,696 340,046 22,187 364,275 --------------------------------------------- TOTAL SHARES SOLD 36,754 $749,466 37,207 $608,419 Shares reinvested: Investor Shares 52 $983 1,826 $27,893 Select Shares + 91 1,722 552 8,447 --------------------------------------------- TOTAL SHARES REINVESTED 143 $2,705 2,378 $36,340 Shares redeemed: Investor Shares 7,938 $161,380 22,026 $358,017 Select Shares + 6,528 134,911 6,829 110,483 --------------------------------------------- TOTAL SHARES REDEEMED 14,466 $296,291 28,855 $468,500 b NET INCREASE 22,431 $455,880 10,730 $176,259 c
SHARES OUTSTANDING AND NET ASSETS - ------------------------------------------------------------------------------- 11/1/99 - 10/31/00 11/1/98 - 10/31/99 SHARES NET ASSETS SHARES NET ASSETS Beginning of period 51,593 $899,017 40,863 $629,256 Total increase + 22,431 660,871 10,730 269,761 d -------------------------------------------------------- END OF PERIOD 74,024 $1,559,888 51,593 $899,017 e
a UNAUDITED For corporations, 100% of the fund's dividends for the report period qualify for the dividends-received deduction. b Dollar amounts are net of proceeds received from early withdrawal fees that the fund charges on shares sold 180 days or less after buying them: CURRENT PERIOD Investor Shares $155 Select Shares + 91 ----------- Total $246 PRIOR PERIOD Investor Shares $232 Select Shares + 176 ----------- Total $408
c Represents shares sold plus shares reinvested, minus shares redeemed. d Figures for shares represent the net changes in shares from the transactions described above. Figures for net assets represent the changes in net assets from operations plus the value of transactions in fund shares, minus distributions paid. e Includes net investment income not yet distributed in the amount of $5,666 for the current period and $2,205 for the prior period. Percent of fund shares owned by other SchwabFunds(R) as of the end of the current period: SCHWAB MARKETTRACK PORTFOLIOS(R) All Equity Portfolio 7.1% Growth Portfolio 7.4% Balanced Portfolio 5.0% Conservative Portfolio 1.3% SCHWAB ANNUITY PORTFOLIOS Growth Portfolio II 0.3%
68 See the Financial Notes, which are integral to this information. 73 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) [PICTURE OF GERI HOM AND LARRY MANO] "Both share classes of the fund posted positive total returns for the period, and even slightly outpaced the Wilshire 5000 Total Market Index, the fund's unmanaged benchmark." Portfolio Manager Geri Hom GERI HOM, a vice president of the investment adviser, has overall responsibility for the management of the fund. Prior to joining the firm in 1995, she worked for nearly 15 years in equity index management. LARRY MANO, a portfolio manager, is responsible for the day-to-day management of the fund. Prior to joining the firm in 1998, he worked for 20 years in equity index management. TICKER SYMBOLS INVESTOR SHARES SWTIX SELECT SHARES(R) SWTSX _______________________________________________________________________________ [INVESTMENT STYLE 1 & MARKET CAP 1 GRAPHIC] VALUE BLEND GROWTH X LARGE MEDIUM SMALL
With its very broad exposure to the U.S. stock market, this fund is designed for long-term investors who want exposure to all three tiers of the market: large-, mid- and small-cap. _______________________________________________________________________________ THE FUND SEEKS TO TRACK THE TOTAL RETURN OF THE ENTIRE U.S. STOCK MARKET, AS MEASURED BY THE WILSHIRE 5000 TOTAL MARKET INDEX. 2 MANAGER'S PERSPECTIVE GIVEN THE VOLATILITY THAT PREVAILED IN EQUITY MARKETS, THE FUND PERFORMED COMPARATIVELY WELL DURING THE REPORT PERIOD. A combination of factors caused investors to trim their overall exposure to stocks. Among these factors were high stock prices, uncertainty over the outcome of the presidential election and potential interest rate hikes. Toward the end of the report period, evidence of a slowing economy reduced fears of interest rate hikes. Ordinarily this might have helped the market regain its footing, but concerns about high oil prices kept stocks in flux. SMALL-CAP STOCKS CONTRIBUTED THE MOST TO THE FUND'S PERFORMANCE FOR THE REPORT PERIOD. Large-cap stocks relinquished their five-year hold as the strongest performing asset class, outpaced by small-cap stocks--the leading asset class for the report period--and mid-caps. Initially, the fund's small-cap growth stocks outperformed their value counterparts. This trend reversed in the second half of the period as investors reduced their exposure to technology and internet issues. Sectors that helped boost the fund's performance for the report period included utilities, capital goods, health care and financial services. 1 Source: Morningstar, Inc. This style assessment is the result of comparing the fund with the S&P 500(R) Index, based on P/E, P/B and median market cap. The assessment reflects the fund's portfolio as of 10/31/00, which may have changed since then, and is not a precise indication of risk or performance-- past, present or future. 2 Wilshire and Wilshire 5000 are registered service marks of Wilshire Associates, Inc. The fund is not sponsored, endorsed, sold or promoted by Wilshire Associates, and Wilshire Associates is not in any way affiliated with the fund. Wilshire Associates makes no representation regarding the advisability of investing in the fund or in any stock included in the Wilshire 5000. 69 74 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) PERFORMANCE: INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS as of 10/31/00 This chart compares performance of the fund's Investor Shares with the Wilshire 5000 Total Market Index and the Morningstar Large-Cap Fund category. [BAR CHART]
1 YEAR SINCE INCEPTION: 6/1/99 ------------------------- ------------------------- 0.13% (0.05%) --------------- ---------------- Total Return 2 8.23% 8.10% 8.70% 1 8.90% 8.95% n/a % of Return Lost to Taxes 2.31% - 19.77% 1 n/a - n/a AFTER-TAX RETURN 2 8.04% - 6.98% 1 n/a - n/a
PERFORMANCE OF A $10,000 INVESTMENT Shows performance since inception of a hypothetical $10,000 investment in the fund's Investor Shares, compared to a similar investment in the Wilshire 5000 Total Market Index. [LINE GRAPH]
INVESTOR WILSHIRE SHARES 5000 TOTAL MARKET INDEX 6/1/99 10000 10000 6/30/99 10515 10518 7/31/99 10165 10180 8/31/99 10070 10086 9/30/99 9820 9822 10/31/99 10435 10447 11/30/99 10790 10797 12/31/99 11605 11617 1/31/00 11108 11135 2/29/00 11374 11384 3/31/00 12022 12060 4/30/00 11399 11432 5/31/00 11012 11033 6/30/00 11484 11519 7/31/00 11258 11286 8/31/00 12077 12105 9/30/00 11520 11548 10/31/00 11294 11303
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made--currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Large-Cap Fund category that had track records of at least one year. These funds may or may not use tax-efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 70 75 PERFORMANCE: SELECT SHARES(R) AVERAGE ANNUAL TOTAL RETURNS as of 10/31/00 This chart compares performance of the fund's Select Shares with the Wilshire 5000 Total Market Index and the Morningstar Large-Cap Fund category. [BAR CHART]
1 YEAR SINCE INCEPTION: 6/1/99 ------------------------- ----------------------- 0.20% 0.07% ---------------- ---------------- Total Return 2 8.30% 8.10% 8.70% 1 9.02% 8.95% n/a % of Return Lost to Taxes 2.41% - 19.77% 1 n/a - n/a AFTER-TAX RETURN 2 8.10% - 6.98% 1 n/a - n/a
PERFORMANCE OF A $50,000 INVESTMENT Shows performance since inception of a hypothetical $50,000 investment in the fund's Select Shares, compared to a similar investment in the Wilshire 5000 Total Market Index. [LINE GRAPH]
SELECT WILSHIRE SHARES 5000 TOTAL MARKET INDEX 6/1/99 50000 50000 6/30/99 52600 52590 7/31/99 50850 50902 8/31/99 50350 50428 9/30/99 49125 49112 10/31/99 52225 52236 11/30/99 53975 53986 12/31/99 58065 58083 1/31/00 55605 55673 2/29/00 56935 56920 3/31/00 60150 60301 4/30/00 57060 57159 5/31/00 55130 55164 6/30/00 57515 57597 7/31/00 56385 56428 8/31/00 60480 60524 9/30/00 57715 57740 10/31/00 56560 56516
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made--currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Large-Cap Fund category that had track records of at least one year. These funds may or may not use tax-efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 71 76 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) FUND FACTS TOP TEN HOLDINGS 1 as of 10/31/00 1 GENERAL ELECTRIC CO. 3.4% 2 CISCO SYSTEMS, INC. 2.4% 3 MICROSOFT CORP. 2.3% 4 EXXON MOBIL CORP. 1.9% 5 INTEL CORP. 1.9% 6 PFIZER, INC. 1.7% 7 CITIGROUP, INC. 1.5% 8 AMERICAN INTERNATIONAL GROUP, INC. 1.4% 9 MERCK & CO., INC. 1.3% 10 WAL-MART STORES, INC. 1.3% - ---------------------------------------------------- TOTAL PERCENTAGE OF INVESTMENTS 19.1%
STATISTICS as of 10/31/00
PEER GROUP FUND AVERAGE 2 - ------------------------------------------------------------------------------- Number of Holdings 2948 137 - ------------------------------------------------------------------------------- Median Market Cap ($ Mil) $49,887 $56,749 - ------------------------------------------------------------------------------- Price/Earnings (P/E) Ratio 34.0 34.3 - ------------------------------------------------------------------------------- Price/Book (P/B) Ratio 8.8 8.7 - ------------------------------------------------------------------------------- 12-Month Yield Investor Shares 0.43% 0.45% - ------------------------------------------------------------------------------- Portfolio Turnover Rate 2% 98% - ------------------------------------------------------------------------------- Three-Year Beta -- -- - -------------------------------------------------------------------------------
EXPENSE RATIO as of 10/31/00 [BAR CHART]
INVESTOR SHARES SELECT SHARES(R) PEER GROUP AVERAGE - -------------------------------------------------------------------------------- 0.40% 3 0.27% 3 1.34% 2
INDEX COMPOSITION BY INDUSTRY 4 These charts show the size of the ten largest industries in the Wilshire 5000 Total Market Index. As the charts show, the total portion represented by these industries has been growing over the past five years. [PIE CHART] AS OF 10/31/00 - --------------------------------------------------- 1 12.7% Business Machines 2 11.9% Drugs & Medicine 3 9.5% Electronics 4 7.7% Miscellaneous Finance 5 7.6% Business Services 6 5.9% Telephone 7 5.3% Producer Goods 8 5.0% Banks 9 4.6% Retail 10 3.6% Insurance 26.2% Other
[PIE CHART] AS OF 10/31/99 - --------------------------------------------------- 1 11.3% Business Machines 2 9.8% Drugs & Medicine 3 8.2% Electronics 4 7.7% Telephone 5 7.1% Business Services 6 7.1% Miscellaneous Finance 7 6.4% Banks 8 6.0% Retail 9 5.0% Producer Goods 10 4.0% Media 27.4% Other
[PIE CHART] AS OF 10/31/95 - --------------------------------------------------- 1 9.8% Drugs & Medicine 2 7.2% Telephone 3 7.0% Banks 4 6.5% Electronics 5 5.5% Business Machines 6 5.3% Food & Agriculture 7 5.2% Miscellaneous Finance 8 5.2% Energy & Utilities 9 4.9% Producer Goods 10 4.4% Retail 38.9% Other
1 This list is not a recommendation of any security by the investment adviser. Portfolio holdings may have changed since the report date. 2 Source: Morningstar, Inc. As of 10/31/00, there were 2,620 funds in the Large-Cap Fund category. 3 Guaranteed by Schwab and the investment adviser through 2/28/01. The actual expense ratio during the report period was 0.01% higher due to certain non-routine expenses. 4 Source: Wilshire Associates, Inc. 72 77 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. THE FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
11/1/99- 6/1/99 1- INVESTOR SHARES 10/31/00 10/31/99 PER-SHARE DATA ($) - -------------------------------------------------------------------------------- Net asset value at beginning of period 20.87 20.00 -------------------- Income from investment operations: Net investment income 0.16 0.07 Net realized and unrealized gains 1.56 0.80 -------------------- Total income from investment operations 1.72 0.87 Less distributions: Dividends from net investment income (0.10) -- -------------------- Net asset value at end of period 22.49 20.87 ==================== Total return (%) 8.23 4.35 2 RATIOS/SUPPLEMENTAL DATA (%) - -------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.40 4 0.40 3 Expense reductions reflected in above ratio 0.26 0.51 3 Ratio of net investment income to average net assets 0.76 0.92 3 Portfolio turnover rate 2 1 Net assets, end of period ($ x 1,000,000) 218 136
1 Commencement of operations. 2 Not annualized. 3 Annualized. 4 Would have been 0.41% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which 73 are integral to this information. 78 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS
11/1/99- 6/1/99 1- SELECT SHARES(R) 10/31/00 10/31/99 PER-SHARE DATA ($) - -------------------------------------------------------------------------------- Net asset value at beginning of period 20.89 20.00 -------------------- Income from investment operations: Net investment income 0.17 0.07 Net realized and unrealized gains 1.56 0.82 -------------------- Total income from investment operations 1.73 0.89 Less distributions: Dividends from net investment income (0.10) -- -------------------- Net asset value at end of period 22.52 20.89 ==================== Total return (%) 8.30 4.45 2 RATIOS/SUPPLEMENTAL DATA (%) - -------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.27 4 0.27 3 Expense reductions reflected in above ratio 0.24 0.47 3 Ratio of net investment income to average net assets 0.89 1.05 3 Portfolio turnover rate 2 1 Net assets, end of period ($ x 1,000,000) 262 149
1 Commencement of operations. 2 Not annualized. 3 Annualized. 4 Would have been 0.28% if certain non-routine expenses (proxy fees) had been included. 74 See the Financial Notes, which are integral to this information. 79 PORTFOLIO HOLDINGS As of October 31, 2000 This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics. With the top ten holdings, the number in the circle is the security's rank among the top ten. (1) Top ten holding + New holding (since 10/31/99) - Non-income producing security * American Depositary Receipt # Collateral for open futures contracts ## Issuer is affiliated with the fund's adviser The pie chart below shows the fund's major asset categories and the market value and cost of the securities in each category. ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 99.0% COMMON STOCK Market Value: $475,813 Cost: $445,263 1.0% OTHER INVESTMENT COMPANIES Market Value: $4,717 Cost:$4,717 0.0% U.S. TREASURY OBLIGATIONS Market Value: $243 Cost: $243 - -------------------------------------------------------- 100.0% TOTAL INVESTMENTS Market Value: $480,773 Cost: $450,223
COMMON STOCK 99.0% of investments
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) AEROSPACE / DEFENSE 1.1% ------------------------------------------------------------------------- - Aviation Sales Co. 800 2 B.F. Goodrich Co. 2,904 119 Boeing Co. 26,500 1,797 Crane Co. 1,600 42 GenCorp., Inc. 1,700 14 General Dynamics Corp. 6,500 465 Kaman Corp., Class A 1,000 14 - Litton Industries, Inc. 1,100 57 Lockheed Martin Corp. 12,952 464 Northrop Grumman Corp. 2,479 208 Raytheon Co., Class B 11,200 383 Rockwell International Corp. 5,800 228 - Satcon Technology Corp. 1,000 25 - Sequa Corp., Class A 300 11 Textron, Inc. 5,300 267 - Trimble Navigation Ltd. 1,000 24 TRW, Inc. 3,600 151 United Technologies Corp. 13,734 959 - Veeco Instruments, Inc. 400 26 ------ 5,256 AIR TRANSPORTATION 0.4% ------------------------------------------------------------------------- AAR Corp. 700 8 Airborne Freight Corp. 1,100 11 - AirTran Holdings, Inc. 1,000 4 Alaska Air Group, Inc. 600 16 - America West Holdings Corp., Class B 1,100 11 - AMR Corp. 4,900 160 - Amtran, Inc. 600 9 - Atlantic Coast Airlines Holdings, Inc. 800 29 - Atlas Air, Inc. 1,300 47 - Aviall, Inc. 1,200 8 - Continental Airlines, Inc., Class B 2,000 105 Delta Air Lines, Inc. 3,600 170 - EGL, Inc. 2,150 61 - FedEx Corp. 9,500 445 - Frontier Airlines, Inc. 600 14 Galileo International, Inc. 2,500 49 - Hawk Corp., Class A 1,200 7 - Kellstrom Industries, Inc. 600 2 - Mesa Air Group, Inc. 1,300 8 - Mesaba Holdings, Inc. 1,100 12 - Midwest Express Holdings, Inc. 500 9 - Northwest Airlines Corp., Class A 2,300 66 SkyWest, Inc. 700 35 Southwest Airlines Co. 15,250 435 - U.S. Airways Group, Inc. 1,900 72 UAL Corp. 1,400 53 ------ 1,846
See the Financial Notes, which 75 are integral to this information. 80 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) ALCOHOLIC BEVERAGES 0.3% ------------------------------------------------------------------------- Adolph Coors Co., Class B 1,100 70 Anheuser-Busch Cos., Inc. 26,900 1,231 - Boston Beer Co., Inc., Class A 300 2 Brown-Forman Corp., Class B 2,200 134 - The Chalone Wine Group Ltd. 200 2 - Constellation Brands, Inc., Class A 500 24 Genesee Corp., Class B 200 7 National Beverage Corp. 1,200 9 - The Robert Mondavi Corp., Class A 400 18 ----- 1,497 APPAREL 0.3% ------------------------------------------------------------------------- - Abercrombie & Fitch Co., Class A 2,900 68 - Bebe Stores, Inc. 900 14 Brown Shoe Co., Inc. 800 8 - The Buckle, Inc. 1,000 17 - The Children's Place Retail Stores, Inc. 1,100 29 - Columbia Sportswear Co. 900 38 - The Dress Barn, Inc. 800 20 - Footstar, Inc. 600 22 - Genesco, Inc. 1,300 23 - Global Sports, Inc. 800 7 - Guess?, Inc. 1,700 13 Haggar Corp. 1,200 16 J. Baker, Inc. 1,100 4 - Jo-Ann Stores, Inc., Class A 700 5 - Jones Apparel Group, Inc. 3,800 106 K-Swiss, Inc., Class A 600 16 Kellwood Co. 900 17 - Kenneth Cole Productions, Inc., Class A 600 27 Liz Claiborne, Inc. 1,600 68 -+ Matrixone, Inc. 1,200 36 - The Men's Wearhouse, Inc. 1,200 35 - Nautica Enterprises, Inc. 1,300 16 Nike, Inc., Class B 8,100 323 Oshkosh B'Gosh, Inc., Class A 700 11 - Pacific Sunwear of California 1,100 23 - Polo Ralph Lauren Corp. 1,000 20 Polymer Group, Inc. 1,300 8 - Quiksilver, Inc. 1,000 19 - Reebok International Ltd. 1,700 37 Russell Corp. 1,100 18 - Saucony, Inc., Class B 700 8 Springs Industries, Inc., Class A 600 14 Stride Rite Corp. 2,100 11 Superior Uniform Group, Inc. 900 7 Talbots, Inc. 1,000 79 - Tarrant Apparel Group 800 5 - Timberland Co., Class A 1,200 62 - Tropical Sportswear International Corp. 500 8 - Unifi, Inc. 1,900 17 - Urban Outfitters, Inc. 1,100 10 VF Corp. 3,900 107 WestPoint Stevens, Inc. 1,600 11 Wolverine World Wide, Inc. 1,200 13 ----- 1,416 AUTOMOTIVE PRODUCTS / MOTOR VEHICLES 1.2% ------------------------------------------------------------------------- A.O. Smith Corp., Class B 800 11 - American Axle & Manufacturing Holdings, Inc. 1,100 14 ArvinMeritor, Inc. 1,800 30 - ASV, Inc. 700 10 Bandag, Inc. 700 25 Borg Warner, Inc. 800 30 Carlisle Cos., Inc. 900 37 - Collins & Aikman Corp. 1,300 6 Cooper Tire & Rubber Co. 2,400 26 Copart, Inc. 1,400 21 Cummins Engine Co., Inc. 1,400 48 Dana Corp. 4,500 100 Danaher Corp. 4,300 271 Delphi Automotive Systems Corp. 16,700 262 - Delco Remy International, Inc. 1,200 8 Donaldson Co., Inc. 1,100 25 - Dura Automotive Systems, Inc. 600 5 Eaton Corp. 3,600 245 Exide Corp. 1,700 17 Fleetwood Enterprises, Inc. 1,000 13 -+ Florida East Coast Industries, Class B 554 19 Ford Motor Co. 61,286 1,601 General Motors Corp. 14,686 912
76 See the Financial Notes, which are integral to this information. 81
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - General Motors Corp., Class H 24,882 806 Genuine Parts Co. 5,200 111 Goodyear Tire & Rubber Co. 4,500 83 - Group 1 Automotive, Inc. 1,100 11 Harley-Davidson, Inc. 8,800 424 - Hayes Lemmerz International, Inc. 700 8 - Lear Corp. 1,800 49 Midas, Inc. 500 7 Modine Manufacturing Co. 600 16 - Monaco Coach Corp. 500 9 Myers Industries, Inc. 770 10 - Navistar International Corp. 1,600 53 - O'Reilly Automotive, Inc. 1,200 22 Oshkosh Truck Corp. 450 19 Polaris Industries, Inc. 600 21 - Rush Enterprises, Inc. 500 2 Simpson Industries, Inc. 1,000 12 - SPX Corp. 800 99 Standard Motor Products, Inc. 700 6 - Sterile Recoveries, Inc. 300 4 - Stoneridge, Inc. 1,200 12 Superior Industries International, Inc. 1,300 44 - TBC Corp. 1,500 7 Thor Industries, Inc. 500 10 Titan International, Inc. 800 4 - Tower Automotive, Inc. 2,300 25 - United Rentals, Inc. 2,100 45 + Visteon Corp. 4,451 79 Winnebago Industries, Inc. 700 8 ------ 5,742 BANKS 5.1% ------------------------------------------------------------------------- ABC Bancorp. 1,200 11 Albama National Bancorp. 400 8 AmSouth Bancorp. 15,403 215 Anchor Bancorp. Wisconsin, Inc. 800 12 Associated BancoCorp. 1,760 42 BancFirst Corp. 500 18 BancFirst Ohio Corp. 735 12 Bancorpsouth, Inc. 2,312 30 BancWest Corp. 1,600 33 Bank of America Corp. 48,500 2,331 Bank of Granite Corp. 400 9 Bank of New York Co., Inc. 21,700 1,249 Bank One Corp. 34,000 1,241 Bank United Corp., Class A 800 45 BankFirst Corp. 1,500 21 Banknorth Group, Inc. 3,512 64 BB&T Corp. 12,879 411 Berkshire Bancorp, Inc. 500 15 Brenton Banks, Inc. 200 2 Brookline Bancorp., Inc. 1,400 15 BSB Bancorp., Inc. 200 3 Capital City Bank Group, Inc. 500 10 Capitol Bancorp. Ltd. 700 8 Capitol Federal Financial 2,300 33 Cascade Bancorp. 880 11 CENIT Bancorp., Inc. 500 8 - Centennial Bancorp. 952 7 - Central Coast Bancorp. 880 16 Centura Banks, Inc. 1,070 41 Century South Banks, Inc. 400 7 Chase Manhattan Corp. 39,200 1,784 Chemical Financial Corp. 420 9 Chittenden Corp. 600 16 Citizens Banking Corp. 990 24 City Holding Co. 800 5 City National Corp. 1,100 38 The Colonial BancGroup, Inc. 2,500 22 - Columbia Banking System, Inc. 1,210 17 Comerica, Inc. 5,900 356 Commerce Bancorp., Inc. N.J. 830 50 Commerce Bancshares, Inc. 1,565 56 Community Bank System, Inc. 500 12 Community First Bankshares, Inc. 1,200 19 Community Trust Bancorp. 660 10 Compass Bancshares, Inc. 3,200 58 Corus Bankshares, Inc. 500 20 Cullen/Frost Bankers, Inc. 1,200 40 Dime Community Bancshares 500 11 Doral Financial Corp. 1,100 20 Drovers Bancshares Corp. Pa. 630 9 Eagle Bancshares, Inc. 700 8 -+ Exelixis, Inc. 1,200 26 F&M Bancorp./Frederick MD 200 4
See the Financial Notes, which 77 are integral to this information. 82 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) F&M National Corp. 612 16 F.N.B. Corp. 525 11 Farmers Capital Bank Corp. 400 14 Fifth Third Bancorp. 13,766 707 First Bancorp./Puerto Rico 700 16 First Busey Corp., Class A 600 11 First Charter Corp. 1,000 15 First Citizens Bancshares, Class A 300 22 First Commonwealth Financial Corp. 1,300 13 First Federal Capital Corp. 700 8 First Federal Financial Corp. of Kentucky 600 9 First Financial Bancorp. 990 15 First Financial Bancshares, Inc. 400 12 First Merchants Corp. 400 9 First Midwest Bancorp., Inc. 900 23 First Niagara Financial Group 1,200 11 - First Republic Bank 400 11 First Tennessee National Corp. 3,300 76 First Union Corp. 28,962 878 First United Corp. 900 9 First Virginia Banks, Inc. 1,700 70 Firstar Corp. 28,154 554 Firstfed America Bancorp., Inc. 1,000 15 - Firstfed Financial Corp. 900 23 FirstMerit Corp. 2,100 48 FleetBoston Financial Corp. 26,514 1,008 Frontier Financial Corp. 700 13 Fulton Financial Corp. 1,680 37 GA Financial, Inc. 800 11 GBC Bancorp. 400 13 Golden West Financial Corp. 7,400 415 Great Southern Bancorp. 500 8 GreenPoint Financial Corp. 3,100 92 Hancock Holding Co. 300 9 Harbor Florida Bancshares, Inc. 1,100 13 Harleysville National Corp. 420 13 Hibernia Corp., Class A 4,200 50 Horizon Financial Corp. 1,100 10 Hudson City Bancorp., Inc. 2,700 49 Hudson United Bancorp. 1,219 27 Huntington Bancshares, Inc. 9,290 134 - Imperial Bancorp. 1,080 26 Independence Community Bank 1,700 25 Industrial Bancorp., Inc. 500 6 Integra Bank Corp. 525 14 Irwin Financial Corp. 700 11 J.P. Morgan & Co., Inc. 4,900 811 KeyCorp, Inc. 15,100 373 Lakeland Financial Corp. 800 9 LSB Bancshares, Inc. 500 7 M&T Bank Corp. 2,371 119 MAF Bancorp., Inc. 700 17 Marshall & Ilsley Corp. 3,200 145 Mellon Financial Corp. 14,400 695 Mercantile Bankshares Corp. 1,700 64 Merchants Bancshares, Inc. 500 12 Merchants New York Bancorp., Inc. 800 17 Mid-America Bancorp. 406 10 Mid-State Bancshares 500 15 - National City Bancorp. 700 11 National City Corp. 18,100 387 National Commerce Bancorp. 6,050 129 National Penn Bancshares, Inc. 620 13 - Net.B@nk, Inc. 900 8 North Fork Bancorp., Inc. 6,100 123 Northern Trust Corp. 6,600 563 OceanFirst Financial Corp. 400 8 Old Kent Financial Corp. 6,917 192 Old National Bancorp. 1,548 46 Omega Financial Corp. 500 14 Oriental Financial Group 500 6 Pacific Century Financial Corp. 2,100 27 Pacific Northwest Bancorp. 700 9 Park National Corp. 305 29 Peoples Bank-Bridgeport 1,500 30 PFF Bancorp., Inc. 600 11 PNC Financial Services Group 8,600 575 Popular, Inc. 4,000 111 Premier National Bancorp., Inc. 620 13 Provident Bankshares Corp. 840 16 Provident Financial Group, Inc. 1,200 36 Providian Financial Corp. 4,200 437 - Quaker City Bancorp., Inc. 500 9 Queens County Bancorp., Inc. 600 17 Regions Financial Corp. 8,700 205 Republic Bancorp. 1,390 13
78 See the Financial Notes, which are integral to this information. 83
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Republic Bancorp., Inc., Class A 1,600 10 Republic Security Financial Corp. 500 3 Richmond County Financial Corp. 600 14 Riggs National Corp., Washington, D.C. 1,000 11 Roslyn Bancorp., Inc. 1,800 39 S & T Bancorp., Inc. 500 9 - S1 Corp. 1,530 18 Sandy Spring Bancorp., Inc. 200 4 Seacoast Banking Corp. Florida 600 15 Second Bancorp., Inc. 400 6 - Silicon Valley Bancshares 2,200 102 Sky Financial Group, Inc. 1,991 33 South Alabama Bancorp. 400 3 The South Financial Group, Inc. 800 8 Southside Bancshares Corp. 500 4 SouthTrust Corp. 7,300 236 - Southwest Bancorp. of Texas, Inc. 700 26 Southwest Bancorp., Inc. 400 6 State Street Corp. 5,200 649 Sterling Bancorp. 840 16 Sterling Bancshares, Inc. 1,400 24 Sterling Financial Corp. 500 9 Summit Bancorp. 6,337 238 SunTrust Banks, Inc. 9,500 464 Susquehanna Bancshares, Inc. 1,000 14 Synovus Financial Corp. 10,300 222 Texas Regional Bancshares, Inc., Class A 400 12 The Trust Co. of New Jersey 500 7 Trustco Bank Corp. 1,150 14 Trustmark Corp. 1,800 34 U.S. Bancorp. 21,965 531 UMB Financial Corp. 550 19 Union Planters Corp. 5,300 179 UnionBanCal Corp. 4,700 99 United Bankshares, Inc. 1,000 19 United Community Financial Corp. 1,500 10 United National Bancorp. 730 13 USB Holding Co., Inc. 630 8 Valley National Bancorp. 1,551 43 - VIB Corp. 1,591 10 Vista Bancorp., Inc. 840 13 Wachovia Corp. 7,200 389 Washington Trust Bancorp. 700 10 Wells Fargo & Co. 51,976 2,407 Wesbanco, Inc. 500 12 Westamerica Bancorp. 800 29 Westcorp, Inc. 1,080 17 Whitney Holding Corp. 500 18 Wilmington Trust Corp. 900 47 WSFS Financial Corp. 1,000 11 Zions Bancorp. 3,200 184 ------ 24,772 BUSINESS MACHINES & SOFTWARE 12.6% ------------------------------------------------------------------------- - 3Com Corp. 10,600 188 - Activision, Inc. 1,000 14 - Adaptec, Inc. 4,400 70 Adobe Systems, Inc. 8,800 669 - Advanced Digital Information Corp. 1,400 18 Analogic Corp. 500 18 - Andersen Group, Inc. 400 4 - Apple Computer, Inc. 10,000 196 - Artesyn Technologies, Inc. 1,100 45 - Auspex Systems, Inc. 1,000 10 Autodesk, Inc. 3,200 71 -+ Avici Systems, Inc. 1,300 56 - Avocent Corp. 1,563 111 - Black Box Corp. 500 33 - BMC Software, Inc. 7,400 150 - Cabletron Systems, Inc. 6,800 184 - Caci International, Inc. Class A 600 12 - CAM Commerce Solutions, Inc. 500 2 - Ceridian Corp. 4,300 107 -(2)Cisco Systems, Inc. 212,719 11,460 - Cognitronics Corp. 600 6 Comdisco, Inc. 4,700 58 - Commerce One, Inc. 5,500 353 Compaq Computer Corp. 51,200 1,557 - Computer Horizons Corp. 1,000 5 - Compuware Corp. 10,400 82 - Comverse Technology, Inc. 5,200 581 - Concurrent Computer Corp. 1,600 28 -+ Crossroads Systems, Inc. 700 5 - Datum, Inc. 1,100 35 -+ Davox Corp. 300 3 - Dell Computer Corp. 77,500 2,286
See the Financial Notes, which 79 are integral to this information. 84 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Diebold, Inc. 2,100 55 - Digital Lightwave, Inc. 1,300 66 - EMC Corp. 65,324 5,818 - Equitex, Inc. 1,300 7 - Excalibur Technologies Corp. 1,200 71 -+ Extended Systems, Inc. 200 8 Fair, Isaac & Co., Inc. 300 12 -+ Foundry Networks, Inc. 3,400 226 - Gateway, Inc. 9,600 495 Hewlett-Packard Co. 59,200 2,749 - Hypercom Corp. 1,300 9 -+ Immersion Corp. 500 5 - Informix Corp. 8,150 35 -+ Inprise Corp. 1,200 8 - Input/Output, Inc. 3,400 29 - Integrated Device Technology, Inc. 3,000 169 - Intergraph Corp. 1,000 6 International Business Machines Corp. 52,800 5,201 - InterVoice-Brite, Inc. 1,678 16 -+ Iomega Corp. 3,000 15 - Juniper Networks, Inc. 9,500 1,852 - Latitude Communications, Inc. 400 2 - Lexmark International Group, Inc., Class A 4,200 172 - LTX Corp. 1,400 20 - Maxtor Corp. 3,400 27 - Microchip Technology, Inc. 4,150 131 - Micromuse, Inc. 1,000 170 - Micron Electronics, Inc. 2,800 22 - MICROS Systems, Inc. 500 10 -(3)Microsoft Corp. 157,370 10,839 Minntech Corp. 1,300 9 - MIPS Technology, Inc., Class A 1,100 44 - NCR Corp. 3,700 160 -+ Neose Technologies, Inc. 300 11 -+ Netegrity, Inc. 900 70 Network Appliance, Inc. 9,300 1,107 - Novell, Inc. 9,600 86 Novellus Systems, Inc. 4,500 184 -+ OpenTV Corp. 578 16 Opnet Technologies, Inc. 500 17 - Oracle Corp. 168,600 5,564 + Osicom Technologies, Inc. 300 10 -+ OTG Software, Inc. 700 22 Pitney Bowes, Inc. 8,300 246 Precise Software Solutions Ltd. 600 14 - Printronix, Inc. 600 5 -+ Procom Technology, Inc. 300 7 - Quantum Corp.--DLT & Storage Systems 4,700 70 - Quantum Corp.--Hard Disk Drive Group 2,400 27 - Read-Rite Corp. 1,900 14 -+ Saba Software, Inc. 1,200 28 - SCM Microsystems, Inc. 400 15 - Seagate Technology, Inc. 7,000 489 *-+ Sema Group PLC 2,210 55 - Sigma Designs, Inc. 1,500 6 - Silicon Graphics, Inc. 4,800 22 -+ Smartdisk Corp. 300 2 -+ Socket Communications, Inc. 300 3 - Storage Technology Corp. 2,600 25 - Sun Microsystems, Inc. 47,640 5,282 - SVI Holdings, Inc. 1,400 6 - Sybase, Inc. 2,600 54 - Systems & Computer Technology Corp. 1,100 16 - Tech Data Corp. 1,600 67 -+ Telxon Corp. 300 7 - The Titan Corp. 1,681 22 Total System Services, Inc. 5,600 92 - Unisys Corp. 9,000 115 Xerox Corp. 19,600 165 - Xircom, Inc. 700 10 ------ 60,826 BUSINESS SERVICES 8.1% ------------------------------------------------------------------------- -+ 1-800 Contacts, Inc. 300 12 - 24/7 Media, Inc. 1,100 6 - 4 Kids Entertainment, Inc. 600 9 ABM Industries, Inc. 700 20 - About.com, Inc. 500 12 - Accrue Software, Inc. 800 4 - ACNielsen Corp. 1,700 41 - Actel Corp. 1,100 40 - Actuate Corp. 1,600 45
80 See the Financial Notes, which are integral to this information. 85
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) *+ Adecco SA 127 11 -+ Administaff, Inc. 2,800 99 - Advantage Learning Systems, Inc. 1,100 33 - Advent Software, Inc. 900 54 - Advo, Inc. 700 26 -+ Aether Systems, Inc. 1,100 89 - Affiliated Computer Services, Inc., Class A 1,500 84 - Affymetrix, Inc. 1,600 89 -+ Agency.com, Inc. Ltd. 800 8 - Agile Software Corp. 1,400 106 - AHL Services, Inc. 1,500 16 -+ Akamai Technologies, Inc. 438 22 - Allaire Corp. 800 6 - Alliance Semiconductor Corp. 1,200 24 - Allied Waste Industries, Inc. 5,500 51 - America Online, Inc. 69,252 3,492 - American Management Systems, Inc. 1,200 26 - American Superconductor Corp. 700 33 Analysts International Corp. 1,500 9 - Ansoft Corp. 1,800 18 - Answerthink, Inc. 1,000 16 - Apollo Group, Inc., Class A 2,300 90 -+ Applied Molecular Evolution, Inc. 600 13 -+ Applied Theory Corp. 800 4 -+ Apropos Technology, Inc. 300 2 -+ Arena Pharmaceuticals, Inc. 600 21 - Ariba, Inc. 7,200 910 - Art Technology Group, Inc. 2,000 125 - Ask Jeeves, Inc. 900 12 -+ Aspen Technology, Inc. 700 29 - At Home Corp., Class A 11,600 120 Automatic Data Processing, Inc. 18,800 1,228 - Autonation, Inc. 10,700 72 - Avant! Corp. 1,500 25 - AXENT Technologies, Inc. 1,000 19 - Barra, Inc. 500 31 - BEA Systems, Inc. 7,400 531 - Bell & Howell Co. 700 13 - BindView Development Corp. 1,700 13 -+ Blue Martini Software, Inc. 2,000 75 -+ Bottomline Technologies, Inc. 500 18 Bowne & Co., Inc. 1,200 10 - Brady Corp., Class A 500 15 - Brio Technology, Inc. 900 7 - Broadbase Software, Inc. 2,400 26 - BroadVision, Inc. 7,311 217 Brocade Communications Systems, Inc. 3,400 773 -+ BSQUARE Corp. 1,100 17 -+ Bull RUN Corp. 1,100 2 -+ Cacheflow, Inc. 1,700 184 -+ CAIS Internet, Inc. 700 3 -+ Career Education Corp. 600 23 - Catalytica, Inc. 1,500 20 - CDI Corp. 700 11 - CDW Computer Centers, Inc. 3,300 213 - Cendant Corp. 21,300 256 -+ Centra Software, Inc. 900 5 - Cerner Corp. 1,000 62 - Cheap Tickets, Inc. 1,400 15 -+ Checkfree Corp. 2,200 109 Chemed Corp. 500 16 - Choicepoint, Inc. 1,167 60 -+ Chordiant Software, Inc. 1,100 7 - Ciber, Inc. 1,900 15 Cintas Corp. 5,050 234 - Citrix Systems, Inc. 5,800 128 - Clarent Corp. 1,545 48 -+ Clarus Corp. 500 5 -+ Click Commerce, Inc. 1,100 31 - Closure Medical Corp. 900 22 - Coinstar, Inc. 1,100 15 - Com21, Inc. 800 9 - Complete Business Solutions, Inc. 1,400 15 - Computer Associates International, Inc. 17,726 565 - Computer Sciences Corp. 5,538 349 - Concord EFS, Inc. 6,500 269 - -*+ Connetics Corp. 900 5 - Convergys Corp. 4,400 192 *+ Cordiant Communications Group PLC 693 14 -+ Corillian Corp. 800 11 -+ Corio, Inc. 1,400 7
See the Financial Notes, which 81 are integral to this information. 86 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) - FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Cornell Cos., Inc. 1,600 8 - Corporate Executive Board Co. 800 37 - Correctional Services Corp. 2,000 7 - CoStar Group, Inc. 600 19 - Credence Systems, Corp. 1,400 26 - Critical Path, Inc. 1,800 87 - CSG Systems International, Inc. 1,500 70 -+ CuraGen Corp. 1,600 103 - CyberSource Corp. 900 5 -+ Cylink Corp. 900 4 -+ Cysive, Inc. 1,000 8 - Cytec Industries, Inc. 1,400 48 -+ Daleen Technologies, Inc. 800 8 -+ Datastream Systems, Inc. 800 10 - Deltek Systems, Inc. 1,200 8 Deluxe Corp. 2,000 45 - Dendrite International, Inc. 1,100 24 - DeVry, Inc. 2,100 78 -+ Digex, Inc. 700 27 - Digital Courier Technologies, Inc. 1,700 5 -+ Digital Insight Corp. 800 15 - Digital River, Inc. 1,000 7 -+ Digitalthink, Inc. 900 32 -+ Digitas, Inc. 1,500 18 -+ Diversa Corp. 400 10 -+ Divine Interventures, Inc., Class A 3,200 10 -+ Documentum, Inc. 500 42 - DoubleClick, Inc. 3,568 58 - DST Systems, Inc. 4,000 246 -+ Dun & Bradstreet Corp. 2,400 52 -+ Dyax Corp. 500 19 - Earthlink, Inc. 3,550 23 - EarthWeb, Inc. 1,000 13 - eBay, Inc. 7,800 402 -+ Ebenx, Inc. 800 10 -+ Echelon Corp. 900 29 - Eclipsys Corp. 1,300 32 Ecolab, Inc. 5,000 196 - Edgewater Technology, Inc. 2,300 11 -+ Edison Schools, Inc. 1,200 33 - Educational Management Corp. 1,000 31 - Egain Communications Corp. 1,000 6 Electronic Data Systems Corp. 14,000 657 -+ Embarcadero Technologies, Inc. 800 48 -+ eMerge Interactive, Inc., Class A 900 10 - Engage, Inc. 4,900 21 - Entrust Technologies, Inc. 1,800 55 -+ ePresence, Inc. 900 6 Equifax, Inc. 4,100 141 -+ Evolve Software, Inc. 1,100 17 -+ eXcelon Corp. 1,400 11 + Exelon Corp. 10,937 658 -+ Extensity, Inc. 700 9 - Ezenia!, Inc. 1,000 3 - F.Y.I., Inc. 600 24 - F5 Networks, Inc. 600 19 FactSet Research Systems, Inc. 1,000 38 Falcon Products, Inc. 1,500 12 - FileNet Corp. 1,300 34 -+ Firepond, Inc. 1,000 8 First Data Corp. 12,200 612 - Fiserv, Inc. 7,200 378 -+ Flextronics International Ltd. 2,898 110 -+ Forrester Research, Inc. 600 25 -+ Freemarkets, Inc. 1,100 54 G & K Services, Inc., Class A 700 19 - Gartner Group, Inc., Class B 2,251 20 -+ Gemstar -- TV Guide International, Inc. 12,260 841 -+ Gentiva Health Services 450 5 -+ Genzyme Transgenics Corp. 800 17 -+ Geoworks Corp. 800 4 - Global Imaging Systems, Inc. 2,000 11 -+ Global Sources Ltd. 66 2 - GoTo.com, Inc. 1,300 18 - GP Strategies Corp. 1,500 8 Great American Financial Resources, Inc. 1,000 18 - Great Plains Software, Inc. 600 23 -+ Gric Communications, Inc. 500 2 - GTECH Holdings, Corp. 900 16 H&R Block, Inc. 4,600 164 - HA-LO Industries, Inc. 2,100 8 *-+ Havas Advertising 2,742 44 -+ Heidrick & Struggles, Inc. 600 37 - HNC Software, Inc. 1,000 20
82 See the Financial Notes, which are integral to this information. 87
MKT. VALUE SECURITY AND NUMBER OF SHARE ($ x 1,000) - Homestore.com, Inc. 2,300 78 -+ Hotel Reservations Network, Inc., Class A 400 14 - HotJobs.com Ltd. 1,000 16 - Hyperion Solutions Corp. 800 11 - I2 Technologies, Inc. 5,800 986 -+ Ibasis, Inc. 1,000 8 - Icos Corp. 1,300 67 -+ Identix Inc. 1,100 16 - IDT Corp. 700 25 - IDX Systems Corp. 1,000 32 - iGate Capital Corp. 1,300 7 -+ Impath, Inc. 400 30 IMS Health, Inc. 8,900 210 -+ Infocus Corp. 1,100 49 -+ Infonet Services Corp., Class B 8,800 57 - Information Resource Engineering, Inc. 500 21 -+ infoUSA, Inc. 2,300 7 - Inktomi Corp. 3,400 216 -+ Integrated Silicon Solutions, Inc. 600 8 -+ Interact Commerce Corp. 700 6 - Interliant, Inc. 1,800 11 -+ Intermune Pharmaceuticals, Inc. 600 30 -+ Internap Network Services Corp. 4,200 67 - internet.com Corp. 800 17 Interpublic Group of Cos., Inc. 9,350 401 -+ Intertrust Technologies Corp. 2,200 22 -+ Interwoven, Inc. 1,500 151 - Intuit, Inc. 6,115 376 - Invitrogen Corp. 1,429 109 -+ Iron Mountain, Inc. 1,650 56 - IT Group, Inc. 1,900 8 - J.D. Edwards & Co. 3,100 80 Jack Henry & Associates, Inc. 1,200 66 - Jacobs Engineering Group, Inc. 800 33 -+ JDA Software Group, Inc. 1,000 15 John H. Harland Co. 1,000 14 - Jupiter Media Metrix, Inc. 1,073 15 - Kana Communications, Inc. 2,764 65 - Keane, Inc. 1,900 25 Kelly Services, Inc., Class A 900 20 -+ Key3Media Group, Inc. 1,900 18 - Korn/Ferry International 1,100 38 - Kroll-O'Gara Co. 1,900 11 - Kronos, Inc. 500 18 - Lamar Advertising Co. 2,200 106 LandAmerica Financial Group, Inc. 800 24 -+ Learning Tree International, Inc. 700 32 - Legato Systems, Inc. 2,200 20 - Liberate Technologies 2,600 50 -+ Liberty Satellite & Technology, Inc., Class A 1,900 9 -+ LifeMinders, Inc. 800 9 -+ Lightpath Technologies, Inc., Class A 600 16 - Looksmart Ltd. 2,400 17 -+ Loudeye Technologies, Inc. 1,300 5 -+ Luminex Corp. 800 22 - Macrovision Corp. 1,200 87 -+ Manhattan Associates, Inc. 800 51 Manpower, Inc. 2,200 77 -+ Manugistics Group, Inc. 900 103 - Mapinfo Corp. 1,125 37 - MarchFirst, Inc. 4,116 24 - Marimba, Inc. 700 4 - Marketwatch.com, Inc. 400 2 - MAXIMUS, Inc. 700 17 -+ Maxygen, Inc. 1,000 40 - Mechanical Technology, Inc. 1,800 13 - Media Arts Group, Inc. 2,000 10 -+ MedicaLogic/Medscape, Inc. 1,846 7 - MemberWorks, Inc. 500 17 Mentor Corp. 1,000 18 - Mentor Graphics Corp. 1,900 45 -+ Mercury Computer Systems, Inc. 600 19 - Mercury Interactive Corp. 2,400 266 - META Group, Inc. 1,100 11 -+ Metacreations Corp. 1,300 13 -+ Metasolv Software, Inc. 1,000 12 - Metricom, Inc. 900 16 Metris Cos., Inc. 1,700 55 - MicroStrategy, Inc. 700 17 -+ Microvision, Inc. 400 14 -+ MIPS Technologies, Inc., Class B 665 23 - Modis Professional Services, Inc. 2,400 10 - Mpower Communications Corp. 1,650 11 - Multex.com, Inc. 700 9
See the Financial Notes, which 83 are integral to this information. 88 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) - FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARE ($ X 1,000) National Data Corp. 900 34 - National Instruments Corp. 1,550 72 - National Processing, Inc. 1,500 24 National Service Industries, Inc. 1,800 37 -+ National Wireless Holdings, Inc. 600 10 - NationsRent, Inc. 2,000 4 -+ Natural MicroSystems Corp. 1,000 45 - NCO Group, Inc. 1,061 23 - Neon Systems, Inc. 700 5 - Net Perceptions, Inc. 900 3 -+ Netcentives, Inc. 1,100 8 - NETIQ Corp. 876 75 -+ Netratings, Inc. 900 16 - Netscout Systems, Inc. 1,000 19 -+ Netsolve, Inc. 600 4 - Network Associates, Inc. 3,900 75 -+ Network Engines, Inc. 600 19 - Network Peripherals, Inc. 600 7 - Neurocrine Biosciences, Inc. 1,400 54 New England Business Service, Inc. 800 14 - New Era of Networks, Inc. 1,000 16 + Nortel Networks Corp. 6,885 313 - NOVA Corp. 2,000 31 -+ NYFIX, Inc. 750 30 -+ Oak Technology, Inc. 1,500 42 - Ogden Corp. 1,600 22 Omnicom Group, Inc. 5,500 507 - On Assignment, Inc. 1,000 25 -+ Oni Systems Corp. 2,600 211 - Onyx Software Corp. 1,400 22 - Open Market, Inc. 1,000 3 -+ Oratec Interventions, Inc. 600 6 - Orbital Sciences Corp. 1,000 8 -+ Organic, Inc. 2,400 8 - Packeteer, Inc. 700 17 - Parametric Technology Corp. 8,000 98 - PAXAR Corp. 1,800 15 Paychex, Inc. 11,000 624 -+ PC-Tel, Inc. 500 9 Pegasus Solutions, Inc. 900 15 - PeopleSoft, Inc. 8,900 388 - Peregrine Systems, Inc. 4,100 98 - Performance Food Group Co. 700 28 - Performance Technologies, Inc. 600 10 - Perot Systems Corp., Class A 2,400 24 - Persistence Software, Inc. 700 8 - Phoenix Technologies Ltd. 800 13 -+ Photon Dynamics, Inc. 400 14 Pittston Brink's Group 1,200 19 -+ Pivotal Corp. 600 37 - Pixar, Inc. 1,400 46 - Polycom, Inc. 3,100 201 + PolyOne Corp. 1,700 13 - Pomeroy Computer Resources, Inc. 1,100 19 - Portal Software, Inc. 4,900 172 -+ Praecis Pharmaceuticals, Inc. 1,200 30 - Pre-Paid Legal Services, Inc. 500 22 -+ Predictive Systems, Inc. 1,000 14 - Priceline.com, Inc. 4,800 28 -+ Primus Knowledge Solution, Inc. 700 6 - Priority Healthcare Corp., Class B 600 32 - ProBusiness Services, Inc. 700 23 - Prodigy Communictions Corp., Class A 1,500 7 - Profit Recovery Group International, Inc. 1,700 9 - Progress Software Corp. 1,000 16 - Project Software & Development, Inc. 800 10 - Protein Design Labs, Inc. 1,600 216 - Proxicom, Inc. 1,500 20 - Proxim, Inc. 800 48 - PSINet, Inc. 5,382 36 -+ Puma Technology, Inc. 1,000 14 - PurchasePro.com, Inc. 1,900 51 - Qlogic Corp. 2,722 263 - QRS Corp. 550 5 - Quest Software, Inc. 2,500 109 -+ Quintus Corp. 1,500 11 Quixote Corp. 800 13 - R.H. Donnelley Corp. 1,000 23 -+ Radiant Systems, Inc. 800 15 -+ Radio One, Inc., Class D 1,200 10 - RadiSys Corp. 500 13 - Razorfish, Inc., Class A 2,524 11 - RealNetworks, Inc. 4,500 93 - Red Hat, Inc. 4,400 55
84 See the Financial Notes, which are integral to this information. 89
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Redback Networks, Inc. 4,400 468 - Remedy Corp. 900 15 - RemedyTemp, Inc., Class A 900 8 -+ Resonate, Inc. 800 34 -+ Retek, Inc. 2,643 104 Reynolds & Reynolds Co., Class A 2,000 36 - Robert Half International, Inc. 5,400 165 - RSA Security, Inc. 1,100 64 -+ Rural Cellular Corp., Class A 300 16 - S3, Inc. 2,600 23 - SAGA Systems, Inc. 800 4 - Sanchez Computer Associates, Inc. 800 13 - Sandisk Corp. 2,000 107 -+ Sangamo Biosciences, Inc. 600 16 - Sapient Corp. 3,400 121 -+ Savvis Communications Corp. 2,500 10 - Scient Corp. 2,000 36 - SDL, Inc. 2,200 570 -+ Seachange International, Inc. 550 12 - Seacor Smit, Inc. 750 31 -+ Secure Computing Corp. 700 16 SEI Investments Co. 2,200 200 -+ Sequenom, Inc. 600 19 -+ SeraNova, Inc. 700 3 - Serena Software, Inc. 1,100 56 The ServiceMaster Co. 8,800 80 - Siebel Systems, Inc. 12,400 1,301 -+ SignalSoft Corp. 700 20 - Silver Stream Software, Inc. 500 11 - Sirius Satellite Radio, Inc. 1,200 60 -+ SITEL Corp. 2,800 8 -+ Six Flags, Inc. 2,100 33 - Software.Com, Inc. 1,500 223 -+ Sonic Foundry, Inc. 600 4 -+ SonicWall, Inc. 1,600 24 -+ Sonus Networks, Inc. 600 21 Spartech Corp. 700 11 - SportsLine.com, Inc. 800 7 Standard Register Co. 1,100 13 - StarMedia Network, Inc. 1,700 10 - StarTek, Inc. 600 15 - Stericycle, Inc. 1,100 36 + Stilwell Financial, Inc. 6,800 305 Strayer Education, Inc. 700 17 - Structural Dynamics Research Corp. 1,400 14 - Sungard Data Systems, Inc. 4,100 210 -+ Sunrise Telecom, Inc. 1,400 35 -+ Sycamore Networks, Inc. 7,300 462 - Sylvan Learning Systems, Inc. 900 14 - Symantec Corp. 1,700 66 -+ Symyx Technologies, Inc. 800 38 - Synopsys, Inc. 2,100 73 - Syntel, Inc. 1,500 14 - Tanning Technology Corp. 900 5 -+ Teledyne Technologies, Inc. 1,857 47 - Teletech Holdings, Inc. 1,800 50 - Tetra Tech, Inc. 1,125 39 -+ Thermo Cardiosystems, Inc. 1,600 13 - TIBCO Software, Inc. 5,700 359 -+ Ticketmaster Online--CitySearch, Inc., Class B 900 14 - TMP Worldwide, Inc. 2,800 195 - Transaction Systems Architects, Inc., Class A 1,200 16 True North Communications, Inc. 1,400 53 -+ Tularik, Inc. 1,300 41 Tyco International Ltd. 2,376 135 -+ Unify Corp. 1,200 1 - Universal Electronics, Inc. 1,000 18 - UNOVA, Inc. 1,300 6 - URS Corp. 1,200 15 -+ Va Linux Systems, Inc. 1,427 42 - Ventiv Health, Inc. 1,633 18 - Ventro Corp. 1,200 6 - VeriSign, Inc. 5,780 763 - VERITAS Software Corp. 12,075 1,703 - Verity, Inc. 1,100 26 -+ Vertel Corp. 900 5 - VerticalNet, Inc. 2,300 64 -+ Via Net.Works, Inc. 2,700 20 Viad Corp. 2,600 56 -+ The viaLink Co. 700 5 - Viant Corp. 1,300 8 - Vignette Corp. 6,848 204 - Vitesse Semiconductor Corp. 5,600 392 -+ Vixel Corp. 600 3
See the Financial Notes, which 85 are integral to this information. 90 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) - FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) -+ Vyyo, Inc. 1,000 22 WABTEC 1,528 15 The Wackenhut Corp., Class A 1,000 13 - Wackenhut Corrections Corp. 1,500 11 Wallace Computer Services, Inc. 1,500 22 - Washington Group International, Inc. 1,500 16 Waste Management, Inc. 19,100 382 -+ WatchGuard Technologies, Inc. 600 30 - Wave Systems Corp., Class A 1,200 14 -+ Waypoint Financial Corp. 1,073 10 -+ Webmethods, Inc. 1,421 126 -+ Websense, Inc. 700 13 - WebTrends Corp. 700 22 - Westaff, Inc. 2,000 6 - Wind River Systems, Inc. 2,160 89 -+ Wireless Facilities, Inc. 1,200 60 - Wit Soundview Group, Inc. 3,000 21 -+ Witness Systems, Inc. 500 9 - WorldGate Communications, Inc. 700 13 -+ Xybernaut Corp. 1,400 7 - Yahoo!, Inc. 16,432 963 -+ Zamba Corp. 2,000 7 - Zixit Corp. 400 10 ------ 39,192 CHEMICAL 0.9% ---------------------------------------------------------------------- A. Schulman, Inc. 700 8 Aceto Corp. 500 5 - Advanced Technical Products, Inc. 400 2 Air Products & Chemicals, Inc. 8,500 317 - Airgas, Inc. 1,900 13 Albemarle Corp. 1,100 26 Arch Chemicals, Inc. 700 14 Cabot Corp. 2,000 44 -+ Cabot Microelectronics Corp. 1,160 51 + Calgon Carbon Corp. 500 3 Cambrex Corp. 700 28 Chemfirst, Inc. 500 11 Crompton Corp. 2,624 21 Dow Chemical Co. 19,600 600 E.I. du Pont de Nemours & Co. 30,595 1,388 Eastman Chemical Co. 2,600 111 Ferro Corp. 700 14 -+ Foamex International, Inc. 400 2 Georgia Gulf Corp. 800 11 Great Lakes Chemical Corp. 2,100 70 H.B. Fuller Co. 400 14 Hawkins Chemical, Inc. 1,300 10 Hercules, Inc. 3,200 59 - International Specialty Products, Inc. 1,400 9 Lilly Industries, Inc., Class A 800 24 Lubrizol Corp. 1,400 30 Lyondell Chemical Co. 4,100 59 MacDermid, Inc. 800 17 Millennium Chemicals, Inc. 1,500 24 NCH Corp. 300 12 Oil-Dri Corp. of America 400 3 Olin Corp. 900 16 OM Group, Inc. 700 32 Omnova Solutions, Inc. 1,000 6 Penford Corp. 1,200 15 PPG Industries, Inc. 6,100 272 Praxair, Inc. 5,800 216 Quaker Chemical Corp. 400 7 Rohm & Haas Co. 7,253 218 Rollins, Inc. 800 14 RPM, Inc. 2,400 21 Sigma-Aldrich Corp. 2,900 104 Solutia, Inc. 2,800 36 + Stepan Co. 200 4 - SurModics, Inc. 400 21 Tredegar Corp. 800 15 - Twinlab Corp. 900 5 Union Carbide Corp. 4,200 181 Valspar Corp. 1,100 30 - W.R. Grace & Co. 1,800 7 WD-40 Co. 400 9 Wellman, Inc. 900 13 - Zoltek Cos., Inc. 600 4 ------ 4,246 CONSTRUCTION 0.4% ---------------------------------------------------------------------- Armstrong Holdings, Inc. 1,600 5 Carbo Ceramics, Inc. 500 15 Centex Construction Products, Inc. 700 18 Centex Corp. 1,700 63 Clayton Homes, Inc. 4,100 38 -+ CoorsTek, Inc. 450 13 Craftmade International, Inc. 1,200 8
86 See the Financial Notes, which are integral to this information. 91
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Crossmann Communities, Inc. 700 13 D.R. Horton, Inc. 1,744 32 - DAL-Tile International, Inc. 1,300 16 - Del E. Webb Corp. 600 16 - Dycom Industries, Inc. 1,300 49 Elcor Corp. 450 7 Florida Rock Industries, Inc. 500 19 Fluor Corp. 2,200 77 Granite Construction, Inc. 700 16 -+ Huttig Building Products, Inc. 311 1 - Insituform Technologies, Inc., Class A 800 29 - Integrated Electrical Services, Inc. 1,100 8 Interface, Inc. 1,200 11 Johns Manville Corp. 4,200 39 Kaufman & Broad Home Corp. 1,400 42 Lafarge Corp. 1,900 36 Lennar Corp. 2,745 88 Martin Marietta Materials, Inc. 1,300 50 Masco Corp. 13,500 252 -+ NCI Building Systems, Inc. 400 6 - NVR, Inc. 500 52 - Palm Harbor Homes, Inc. 700 10 Puerto Rican Cement Co., Inc. 400 12 Pulte Corp. 1,200 40 - Quanta Services, Inc. 1,900 59 + The Ryland Group, Inc. 200 6 - Sawtek, Inc. 1,200 61 -+ SBA Communications Corp. 1,100 55 Sherwin-Williams Co. 4,700 102 - Simpson Manufacturing, Inc. 300 13 Southdown, Inc. 1,200 85 - Specialty Equipment Cos., Inc. 700 21 The Stanley Works 2,500 67 - Stone & Webster, Inc. 700 1 Texas Industries, Inc. 500 12 - Toll Brothers, Inc. 1,800 58 - Trex Co., Inc. 500 19 United Dominion Industries Ltd. 1,000 22 USG Corp. 1,400 24 Vulcan Materials Co. 3,000 126 Walter Industries, Inc. 1,300 10 - Wesco International, Inc. 1,700 14 ----- 1,836 CONSUMER: DURABLE 0.2% - Applica, Inc. 1,100 6 Black & Decker Corp. 2,400 90 - Champion Enterprises, Inc. 2,200 9 - Chromcraft Revington, Inc. 800 7 Coachmen Industries, Inc. 700 6 Compx International, Inc. 800 10 -+ Energizer Holdings, Inc. 3,033 60 Ethan Allen Interiors, Inc. 1,000 29 Flexsteel Industries, Inc. 600 7 -+ FuelCell Energy, Inc. 400 31 - Furniture Brands International, Inc. 1,400 24 - Genlyte Group, Inc. 600 16 Haverty Furniture Cos., Inc. 800 9 - Helen of Troy Ltd. 1,100 6 Hillenbrand Industries, Inc. 2,300 106 Kimball International, Inc., Class B 2,100 33 La-Z-Boy, Inc. 1,600 25 Leggett & Platt, Inc. 5,600 92 - Linens 'N Things, Inc. 1,100 34 Maytag Corp. 2,200 63 Mikasa, Inc. 700 11 - Mohawk Industries, Inc. 1,500 33 National Presto Industries, Inc. 400 12 - Rent-A-Center, Inc. 1,000 29 - Restoration Hardware, Inc. 1,700 5 - Salton, Inc. 400 9 Shaw Industries, Inc. 3,625 67 SLI, Inc. 1,100 9 Sturm, Ruger & Co., Inc. 1,100 9 Thomas Industries, Inc. 700 15 Toro Co. 400 14 Virco Manufacturing Corp. 968 10 -+ Water Pik Technologies, Inc. 195 2 Whirlpool Corp. 2,100 91 ----- 979 CONSUMER: NONDURABLE 1.0% - The 3DO Co. 2,100 6 - A.T. Cross Co., Class A 2,400 12 American Greetings Corp., Class A 3,000 55 Applebee's International, Inc. 700 21 - Boyd Gaming Corp. 2,800 11 - Boyds Collection Ltd. 2,200 17
See the Financial Notes, which 87 are integral to this information. 92 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) - FINANCIALS PORTFOLIO HOLDINGS Continued AS OF OCTOBER 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ X 1,000) - BRINKER INTERNATIONAL, INC. 2,200 86 - Buca, Inc. 1,100 17 - Catalina Marketing Corp. 1,500 59 CBRL Group, Inc. 1,600 29 - CEC Entertainment, Inc. 650 21 Cedar Fair L.P. 1,400 25 - Championship Auto Racing Teams, Inc. 700 17 - The Cheesecake Factory 950 42 - Consolidated Products, Inc. 1,580 12 -+ Corvis Corp. 10,000 656 - Cytyc Corp. 1,600 95 Darden Restaurants, Inc. 3,600 81 - Dave and Buster's, Inc. 1,700 14 - Department 56, Inc. 1,600 23 Dover Downs Entertainment, Inc. 1,400 16 - Electronic Arts, Inc. 3,800 190 - Factory 2-U Stores, Inc. 600 19 Fastenal Co. 1,100 63 The First Years, Inc. 1,500 15 Fortune Brands, Inc. 5,100 150 - Fossil, Inc. 1,650 22 - Garden Fresh Restaurant Corp. 1,300 11 - Handleman Co. 1,400 14 Harcourt General, Inc. 2,100 118 Hasbro, Inc. 5,400 58 - Hollywood.com, Inc. 1,100 8 - IHOP Corp. 1,000 21 - International Game Technology 2,800 103 International Speedway Corp., Class A 1,545 50 - Isle of Capri Casinos, Inc. 1,100 12 - Jack in the Box, Inc. 900 22 - JAKKS Pacific, Inc. 800 7 Lancaster Colony Corp. 1,000 24 - Landry's Seafood Restaurants, Inc. 1,800 15 Lone Star Steakhouse & Saloon, Inc. 1,400 12 Luby's, Inc. 1,400 8 The Marcus Corp. 1,500 21 - Marvel Enterprises, Inc. 2,300 6 Mattel, Inc. 12,800 166 McDonald's Corp. 40,000 1,240 -+ MCK Communications, Inc. 600 9 - Midway Games, Inc. 2,100 16 Movado Group, Inc. 1,700 24 - Musicland Stores Corp. 1,600 13 Newell Rubbermaid, Inc. 9,000 173 - NPC International, Inc. 1,500 17 -+ Omnivision Technologies, Inc. 600 20 - On Command Corp. 900 9 Oneida Ltd. 700 7 - Outback Steakhouse, Inc. 2,300 66 -+ Packard Bioscience Co. 300 5 - Papa John's International, Inc. 700 18 - Rare Hospitality International Inc. 1,050 24 Regis Corp. 1,000 15 Riviana Foods, Inc. 900 15 Ruby Tuesday, Inc. 3,600 49 Russ Berrie & Co., Inc. 1,000 23 - Ryan's Family Steak Houses, Inc. 1,500 13 - SCP Pool Corp. 900 23 - Sonic Corp. 500 18 - Sotheby's Holdings, Inc., Class A 1,600 43 - Starbucks Corp. 5,900 264 - Student Advantage, Inc. 1,900 7 - The Topps Co., Inc. 1,700 15 - Trans World Entertainment Corp. 1,500 13 - Triarc Cos., Inc. 700 17 - Tricon Global Restaurants, Inc. 4,200 126 Tupperware Corp. 1,400 24 Wendy's International, Inc. 3,200 70 - Yankee Candle Co., Inc. 1,500 22 ----- 4,848 CONTAINERS 0.1% - ------------------------------------------------------------------------- - AEP Industries, Inc. 400 14 Ball Corp. 700 25 Bemis Co., Inc. 1,500 39 Crown Cork & Seal Co., Inc. 3,600 33 Greif Brothers Corp., Class A 500 16 Liqui-Box Corp. 200 7 - Mobile Mini, Inc. 600 12 - Owens-Illinois, Inc. 4,000 24 -+ Packaging Corp. of America 2,700 40 -+ Pactiv Corp. 5,100 54 - Sealed Air Corp. 2,500 120
88 See the Financial Notes, which are integral to this information. 93
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Silgan Holdings, Inc. 900 8 Sonoco Products Co. 2,900 56 Tuscarora, Inc. 400 5 ----- 453 ELECTRONICS 9.1% ----------------------------------- - 3Dfx Interactive, Inc. 1,300 6 -+ ACT Manufacturing, Inc. 500 16 - Acxiom Corp. 2,600 105 -+ ADAC Laboratories 1,000 13 - Adaptive Broadband Corp. 1,000 16 - ADC Telecommunications, Inc. 21,720 464 - Adelphia Business Solutions, Inc. 900 6 - Adelphia Communications Corp., Class A 3,201 106 - Advanced Fibre Communications, Inc. 2,400 78 - Advanced Micro Devices, Inc. 10,300 233 - Advanced Radio Telecom Corp. 1,000 4 -+ Airnet Communications Corp. 700 11 - Alpha Industries, Inc. 1,200 48 -+ Alamosa PCS Holdings, Inc. 1,700 26 - Allen Telecom, Inc. 1,500 28 - Alliant Techsystems, Inc. 500 45 - Altera Corp. 12,100 495 - American Power Conversion Corp. 5,600 72 - Amkor Technology, Inc. 4,300 97 - Amphenol Corp., Class A 1,200 77 - Anadigics, Inc. 750 17 - Analog Devices, Inc. 10,400 676 -+ Anaren Microwave, Inc. 400 42 - Andrew Corp. 2,600 68 - Anixter International, Inc. 1,100 27 - Antec Corp. 1,100 13 - Applied Materials, Inc. 24,249 1,288 -+ APW Ltd. 1,100 51 - Arguss Communications, Inc. 1,100 14 - Arrow Electronics, Inc. 2,800 90 - Artisan Components, Inc. 1,100 10 - Aspect Communications Corp. 1,700 28 -+ AstroPower, Inc. 300 17 - Asyst Technologies, Inc. 1,200 18 - Atmel Corp. 14,700 220 - ATMI, Inc. 900 17 - Audiovox Corp., Class A 600 8 -+ Avanex Corp. 200 20 - Avid Technology, Inc. 800 11 Avnet, Inc. 3,092 83 - AVT Corp. 1,400 9 AVX Corp. 5,000 143 - Aware, Inc. 700 22 -+ AXT, Inc. 600 23 - Bel Fuse, Inc., Class A 700 30 + Bel Fuse, Inc., Class B 500 20 Belden, Inc. 800 21 - Benchmark Electronics, Inc. 700 28 BMC Industries, Inc. 1,300 8 Boston Acoustics, Inc. 800 12 - Broadcom Corp., Class A 6,700 1,490 -+ Brooks Automation, Inc. 500 13 -+ Bruker Daltonics, Inc. 1,600 55 C&D Technologies, Inc. 1,000 59 - C-COR.net Corp. 800 13 - Cable Design Technologies Corp. 1,200 28 - Cadence Design Systems, Inc. 7,300 188 -+ Caliper Technologies Corp. 700 39 - Caprock Communications Corp. 900 6 - CCC Information Services Group, Inc. 1,100 8 - CIENA Corp. 8,400 883 - Cirrus Logic, Inc. 2,100 91 - CMGI, Inc. 8,686 147 -+ Cobalt Networks, Inc. 800 44 - Coherent, Inc. 1,800 63 Cohu, Inc. 600 9 - CommScope, Inc. 1,400 35 - Computer Network Technology Corp. 700 21 - Concord Communications, Inc. 500 4 - Conexant Systems, Inc. 6,696 176 - Cox Radio, Inc., Class A 1,100 25 - Cree, Inc. 1,000 99 CTS Corp. 800 34 - Cyberonics, Inc. 1,200 28 - Cypress Semiconductor Corp. 4,200 157 - Dallas Semiconductor Corp. 1,800 71 -+ DDI Corp. 1,100 44
See the Financial Notes, which 89 are integral to this information. 94 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) - FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Dionex Corp. 500 16 - DMC Stratex Networks, Inc. 2,200 51 - DSP Group, Inc. 800 23 - Dupont Photomasks, Inc. 500 28 - Electro Rent Corp. 1,100 15 - Electro Scientific Industries, Inc. 800 28 - Electroglas, Inc. 900 13 - Electronics Boutique Holdings Corp. 800 13 - Electronics for Imaging, Inc. 1,500 23 -+ Emcore Corp. 1,000 41 - Emulex Corp. 1,000 147 - ESS Technology, Inc. 1,000 16 -+ Exar Corp. 1,300 58 -+ FEI Co. 700 17 - FSI International, Inc. 1,300 12 - FVC.com, Inc. 1,200 3 - Gadzoox Networks, Inc. 600 2 - Gasonics International Corp. 1,100 22 -+ Genencor International, Inc. 1,700 47 General Cable Corp. 1,700 10 - General Semiconductor, Inc. 800 9 - Genrad, Inc. 1,000 9 - Gentex Corp. 2,100 52 Gerber Scientific, Inc. 800 6 - Getty Images, Inc. 1,400 44 -+ Glenayre Technologies, Inc. 1,500 12 - Globespan, Inc. 2,000 154 Harman International Industries, Inc. 1,000 48 - Harmonic, Inc. 1,542 22 Harris Corp. 2,000 63 - Hearst-Argyle Television, Inc. 1,300 23 - HI/FN, Inc. 300 19 - Hollywood Entertainment Corp. 2,000 6 - Hutchinson Technology, Inc. 800 18 -+ iBeam Broadcasting Corp. 2,900 16 - Imation Corp. 800 16 - IMRglobal Corp. 1,100 9 -+ Integrated Circuit Systems, Inc. 1,900 26 (5) Intel Corp. 201,132 9,051 - Intermagnetics General Corp. 1,854 48 - International Rectifier Corp. 1,900 85 - Internet Security Systems 1,200 106 ITT Industries, Inc. 3,800 124 - JDS Uniphase Corp. 27,984 2,279 -+ JNI Corp. 800 71 - Kemet Corp. 2,700 75 - Kent Electronics Corp. 800 15 - KLA-Tencor Corp. 5,800 196 - Kopin Corp. 1,800 25 - Kulicke & Soffa Industries, Inc. 1,400 21 - L-3 Communications Holdings, Inc. 900 59 - Lam Research Corp. 3,600 70 Linear Technology Corp. 9,300 600 - Littelfuse, Inc. 500 15 - Loral Space & Communications Corp. 8,500 48 - LSI Logic Corp. 9,100 299 Lucent Technologies, Inc. 100,023 2,332 - Macromedia, Inc. 1,500 116 - Mattson Technology, Inc. 1,100 13 - Maxim Integrated Products, Inc. 8,400 557 - MEMC Electronic Materials, Inc. 2,700 27 -+ Merix Corp. 400 19 - Mestek, Inc. 700 12 Methode Electronics, Inc., Class A 1,100 41 - Metro Information Services, Inc. 700 4 - Metromedia Fiber Network, Inc., Class A 14,310 272 - Micron Technology, Inc. 17,000 591 - Microsemi Corp. 1,500 60 - MKS Instruments, Inc. 600 11 Molex, Inc. 6,425 347 Moody's Corp. 4,800 126 Motorola, Inc. 66,155 1,650 - MRV Communications, Inc. 2,200 87 - Mynd Corp. 1,600 20 -+ Nanogen, Inc. 500 8 - National Semiconductor Corp. 6,000 156 - Netopia, Inc. 600 7 - Netro Corp. 1,400 31 -+ New Focus, Inc. 200 13 + Newport Corp. 1,000 114 - Nextel Communications, Inc., Class A 22,700 873
90 See the Financial Notes, which are integral to this information. 95
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) -+ Nextel Partners, Inc., Class A 4,800 118 - Novoste Corp. 900 23 - Nvidia Corp. 2,700 168 -+ Objective Systems Integrators, Inc. 900 8 -+ OYO Geospace Corp. 300 5 - P-Com, Inc. 1,700 10 - Parkervision, Inc. 400 22 - Paxson Communications Corp. 1,900 22 - PE Corp.-Celera Genomics Group 1,700 115 PE Corp.-PE Biosystems Group 6,300 737 -+ PeoplePC, Inc. 3,000 10 -+ Pericom Semiconductor Corp. 600 16 PerkinElmer, Inc. 3,500 418 - Photronics, Inc. 900 20 - Pinnacle Systems, Inc. 1,200 15 Pioneer Standard Electronics, Inc. 1,100 15 -+ Pixelworks, Inc. 1,100 37 - Plantronics, Inc. 1,500 68 - Plexus Corp. 1,000 63 - PLX Technology, Inc. 800 19 - Powell Industries, Inc. 2,000 22 - Power Intergrations, Inc. 600 8 - Power-One, Inc. 2,200 156 - Powerwave Technologies, Inc. 1,700 82 - PRI Automation, Inc. 700 16 - QUALCOMM, Inc. 22,200 1,445 -+ Quicklogic Corp. 400 4 - Rambus, Inc. 2,900 130 - Rational Software Corp. 5,700 340 - Rayovac Corp. 800 12 - Remec, Inc. 1,500 45 - RF Micro Devices, Inc. 4,600 92 - Rofin-Sinar Technologies, Inc. 1,400 14 - Rogers Corp. 800 29 - Sanmina Corp. 4,660 533 - SCI Systems, Inc. 4,400 189 Scientific-Atlanta, Inc. 5,000 342 -+ Semitool, Inc. 600 8 - Semtech Corp. 2,000 65 - Sensormatic Electronics Corp. 2,000 36 - Silicon Storage Technology, Inc. 2,600 59 - Silicon Valley Group, Inc. 1,000 33 - Siliconix, Inc. 800 35 -+ Sipex Corp. 600 24 - Solectron Corp. 18,020 793 - Spectra-Physics Lasers, Inc. 400 14 -+ SpeechWorks International, Inc. 1,000 83 - SpeedFam-IPEC, Inc. 900 9 *-+ Stora Enso Oyj 4,199 43 -+ Superconductor Technologies 300 3 Superior TeleCom, Inc. 1,124 6 Symbol Technologies, Inc. 4,675 212 - Symmetricom, Inc. 2,100 27 -+ Synavant, Inc. 425 2 Technitrol, Inc. 500 55 - Tekelec, Inc. 1,600 59 Tektronix, Inc. 1,400 100 -+ Telaxis Communications Corp. 400 2 -+ TeleCorp PCS, Inc. 2,600 49 - Tellabs, Inc. 12,300 614 - Teradyne, Inc. 5,000 156 - Terayon Communication Systems, Inc. 1,800 40 - Tessco Technologies, Inc. 700 17 Texas Instruments, Inc. 51,847 2,544 -+ Therma-Wave, Inc. 700 14 - Thermo Electron Corp. 10,150 294 Thomas & Betts Corp. 2,400 36 - THQ, Inc. 800 16 - Three-Five Systems, Inc. 2,199 76 -+ Tollgrade Communications, Inc. 400 38 - TranSwitch Corp. 2,600 150 - Triquint Semiconductor, Inc. 2,200 84 -+ Tweeter Home Entertainment Group, Inc. 600 14 -+ Ulticom, Inc. 1,100 53 Unitil Corp. 600 16 - Univision Communications, Inc., Class A 6,200 237 -+ Valence Technology, Inc. 900 13 - Varian Medical Systems, Inc. 900 44 - Varian Semiconductor Equipment 1,000 23 - Varian, Inc. 1,300 40 Vector Group Ltd. 761 11 -+ Viasat, Inc. 400 9 - Vicor Corp. 1,200 65
See the Financial Notes, which 91 are integral to this information. 96 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) - FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) -+ Virata Corp. 1,700 33 - Vishay Intertechnology, Inc. 3,950 119 - VISX, Inc. 1,800 39 - Waters Corp. 3,800 276 - WebMD Corp. 11,326 129 -+ Western Digital Corp. 4,200 25 - Western Wireless Corp., Class A 2,000 95 - Wink Communications, Inc. 800 8 - Xilinx, Inc. 9,700 703 -+ Zoran Corp. 500 25 ------ 43,762 ENERGY: RAW MATERIALS 1.3% ------------------------------------ Anadarko Petroleum Corp. 7,630 489 Apache Corp. 4,200 232 Arch Coal, Inc. 900 10 - Atwood Oceanics, Inc. 500 17 Baker Hughes, Inc. 10,800 371 - Barrett Resources Corp. 900 33 - Basin Exploration, Inc. 1,200 24 Berry Petroleum, Class A 1,000 17 - BJ Services Co. 2,500 131 Buckeye Partners L.P. 700 21 Burlington Resources, Inc. 6,700 241 Cabot Oil & Gas Corp., Class A 900 18 -+ Chesapeake Energy Corp. 2,300 13 Cooper Cameron Corp. 1,600 87 Devon Energy Corp. 4,636 234 - Dril-Quip, Inc. 500 17 Eastern Enterprises 500 32 ENSCO International, Inc. 4,300 143 Enterprise Products Partners L.P. 1,100 28 EOG Resources, Inc. 3,400 134 - Evergreen Resources, Inc. 800 22 - Forest Oil Corp. 1,500 21 - Friede Goldman Halter, Inc. 1,855 11 - Global Marine, Inc. 5,300 140 -+ Grey Wolf, Inc. 1,800 8 Halliburton Co. 13,200 489 Helmerich & Payne, Inc. 1,300 41 - Key Energy Services, Inc. 2,800 25 - KEY Production Co., Inc. 1,200 26 - Kirby Corp. 800 15 - Louis Dreyfus Natural Gas Corp. 1,200 38 McDermott International, Inc. 1,700 16 Mitchell Energy & Development Corp., Class A 1,300 60 - Nabors Industries, Inc. 4,517 230 - Newpark Resources, Inc. 2,200 20 NL Industries, Inc. 1,500 35 Noble Affiliates, Inc. 1,600 59 - Noble Drilling Corp. 4,200 175 Occidental Petroleum Corp. 12,200 242 - Offshore Logistics, Inc. 600 10 - Parker Drilling Co. 500 3 Penn Virginia Corp. 400 11 Plains All American Pipeline L.P. 1,000 19 - Plains Resources, Inc. 1,000 19 - Prima Energy Corp. 1,050 47 - R&B Falcon Corp. 5,500 138 - Rowan Cos., Inc. 3,400 86 Schlumberger Ltd. 16,900 1,287 - Sitel Corp. 800 12 - Smith International, Inc. 1,500 106 - Southwestern Energy Co. 300 2 - Swift Energy Co. 1,100 36 Tidewater, Inc. 1,700 79 - Tom Brown, Inc. 900 21 - Trico Marine Services, Inc. 1,300 22 - Unit Corp. 1,600 21 - UTI Energy Corp. 1,200 24 Valero Energy Corp. 1,600 53 - Weatherford International, Inc. 3,600 131 Western Gas Resources, Inc. 2,000 44 ------ 6,136 FOOD & AGRICULTURE 2.7% ----------------------------------- - Ag-Chem Equipment, Inc. 1,400 16 - Agribrands International, Inc. 400 17 - American Italian Pasta Co., Class A 500 10 Andersons, Inc. 1,500 13 Archer-Daniels-Midland Co. 21,575 237 - Bob Evans Farms, Inc. 2,200 41 - Cadiz, Inc. 1,600 17 Campbell Soup Co. 12,400 363 Coca-Cola Bottling Co. Consolidated 400 14 Coca-Cola Co. 74,200 4,480
92 See the Financial Notes, which are integral to this information. 97
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Coca-Cola Enterprises, Inc. 12,600 232 ConAgra, Inc. 15,893 340 Consolidated-Tomoka Land Co. 1,100 13 Corn Products International, Inc. 900 23 - CTB International Corp. 1,600 12 Dean Foods Co. 900 29 - Del Monte Foods Co. 1,500 9 Delta & Pine Land Co. 900 22 Dole Food Co., Inc. 1,600 19 Dreyer's Grand Ice Cream, Inc. 800 20 Earthgrains Co. 2,100 43 -+ Embrex, Inc. 300 4 Fleming Cos., Inc. 1,300 18 Flowers Industries, Inc. 2,800 43 - Fresh Del Monte Produce, Inc. 1,700 7 General Mills, Inc. 8,700 363 - Gumtech International, Inc. 400 5 -+ H Power Corp. 1,500 32 H.J. Heinz Co. 10,200 428 Hershey Foods Corp. 4,500 244 Hormel Foods Corp. 5,000 84 IBP, Inc. 3,200 66 IMC Global, Inc. 3,100 40 International Multifoods Corp. 600 10 Interstate Bakeries Corp. 1,700 24 - J & J Snack Foods Corp. 700 9 Keebler Foods Co. 2,400 97 Kellogg Co. 11,800 299 -+ Krispy Kreme Doughnuts, Inc. 400 39 Lance, Inc. 1,200 12 Lindsay Manufacturing Co. 800 17 Marsh Supermarkets, Inc., Class B 1,000 13 Maui Land & Pineapple Co. 800 19 McCormick & Co., Inc. 1,900 60 Michael Foods, Inc. 500 13 Midwest Grain Products, Inc. 1,500 13 Nabisco Group Holdings Corp. 10,200 295 Nabisco Holdings Corp., Class A 1,600 87 Nash Finch Co. 1,800 22 The Pepsi Bottling Group, Inc. 4,200 145 PepsiCo, Inc. 43,100 2,088 Pilgrim's Pride Corp., Class B 1,400 9 Quaker Oats Co. 3,900 318 - Ralcorp Holdings, Inc. 700 10 - Ralston Purina Group 9,100 221 Sanderson Farms, Inc. 1,400 10 Sara Lee Corp. 25,600 552 Schultz SAV O Stores, Inc. 1,100 12 - The Scotts Co., Class A 700 25 - Smithfield Foods, Inc. 1,600 46 - Suiza Foods Corp. 900 42 Supervalu, Inc. 5,187 80 Sysco Corp. 9,900 517 Tasty Baking Co. 1,300 15 - Tejon Ranch Co. 600 14 Tootsie Roll Industries, Inc. 921 35 Tyson Foods, Inc., Class A 7,300 82 - Ultrak, Inc. 1,500 7 - United Natural Foods, Inc. 1,300 16 - Universal Foods Corp. 1,200 24 Whitman Corp. 3,700 48 - Whole Foods Market, Inc. 800 37 - Wild Oats Markets, Inc. 650 4 Wm. Wrigley Jr. Co. 3,800 301 ------ 12,991 GOLD 0.0% ---------------------------------------------------------------------- - Battle Mountain Gold Co. 4,300 6 - Golden Cycle Gold Corp. 600 3 Homestake Mining Co. 7,000 29 - Meridian Gold, Inc. 2,100 11 Newmont Mining Corp. 6,300 85 ------ 134 HEALTHCARE / DRUGS & MEDICINE 11.7% ---------------------------------------------------------------------- -+ 3-Dimensional Pharmaceuticals, Inc. 600 14 Abbott Laboratories 46,405 2,451 - Abgenix, Inc. 2,400 189 -+ Abiomed, Inc. 800 23 -+ Acacia Research Corp. 300 10 -+ Accredo Health, Inc. 500 22 - Acuson Corp. 1,100 25 - Advance Paradigm, Inc. 1,100 54 Aetna, Inc. 5,200 301 -+ Albany Molecular Research, Inc. 800 47
See the Financial Notes, which are integral to this information. 93 98 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) - FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) -+ Alexion Pharmaceuticals, Inc. 400 41 - Alkermes, Inc. 1,600 59 Allergan, Inc. 4,400 370 -+ Alliance Pharmaceutical Corp. 1,100 16 -+ Allscripts, Inc. 800 10 Alpharma, Inc., Class A 1,200 47 - ALZA Corp. 3,500 283 American Home Products Corp. 39,100 2,483 - Ameripath, Inc. 1,900 34 - Amerisource Health Corp., Class A 1,400 61 - Amgen, Inc. 30,600 1,773 -+ Amylin Pharmaceuticals, Inc. 1,700 17 - Andrx Group 2,000 144 -+ Antigenics, Inc. 600 9 - Apria Healthcare Group, Inc. 1,200 24 Arrow International, Inc. 500 20 - Arthrocare Corp. 600 14 -+ Aspect Medical Systems, Inc. 400 4 - Atrix Labs, Inc. 1,400 25 - Aurora Biosciences Corp. 1,200 73 -+ Avant Immunotherapeutics, Inc. 2,100 18 -+ Avigen, Inc. 500 19 - Aviron 800 52 - Bacou USA, Inc. 1,000 25 - Barr Laboratories, Inc. 1,050 66 Bausch & Lomb, Inc. 1,900 73 Baxter International, Inc. 8,565 704 Beckman Coulter, Inc. 800 56 Becton, Dickinson & Co. 8,100 271 Bergen Brunswig Corp., Class A 3,800 34 Bindley Western Industries, Inc. 1,033 37 - Bio-Rad Laboratories, Inc., Class A 500 15 - Bio-Technology General Corp. 1,200 13 - Biocryst Pharmaceuticals, Inc. 700 6 - Biogen, Inc. 4,600 277 - Biomatrix, Inc. 800 15 Biomet, Inc. 5,150 186 -+ Biopure Corp. 700 14 -+ Biosite Diagnostics, Inc. 400 9 Block Drug Co., Class A 715 37 - Bone Care International, Inc. 1,400 34 - Boston Scientific Corp. 13,400 214 Bristol-Myers Squibb Co. 59,000 3,595 C.R. Bard, Inc. 1,400 59 Cardinal Health, Inc. 8,200 777 - Caremark Rx, Inc. 6,100 76 Carter-Wallace, Inc. 1,100 30 - Celgene Corp. 3,000 193 -+ Cell Genesys, Inc. 1,000 23 -+ Cell Pathways, Inc. 800 6 -+ Cell Therapeutics, Inc. 700 47 - Cephalon, Inc. 1,100 59 -+ Cerus Corp. 500 28 - Chattem, Inc. 1,100 7 - Chiron Corp. 5,800 251 - ChromaVision Medical Systems, Inc. 1,100 5 -+ Community Health Systems, Inc. 2,200 62 - Conmed Corp. 500 7 Cooper Cos., Inc. 600 21 - COR Therapeutics, Inc. 2,200 124 - Corixa Corp. 1,100 49 - Corvel Corp. 600 19 - Coulter Pharmaceutical, Inc. 700 27 - Covance, Inc. 1,800 16 - Coventry Health Care, Inc. 1,700 31 -+ Cubist Pharmaceuticals, Inc. 700 30 -+ Curis, Inc. 540 7 -+ CV Therapeutics, Inc. 600 47 -+ Cyotgen Corp. 2,300 13 - D&K Healthcare Resources, Inc. 1,500 21 Datascope Corp. 500 17 -+ DaVita, Inc. 2,500 28 -+ Deltagen, Inc. 600 10 Dentsply International, Inc. 1,500 52 Diagnostic Products Corp. 600 27 - Digene Corp. 600 19 - Dura Pharmaceuticals, Inc. 1,200 41 - Duramed Pharmaceuticals, Inc. 1,900 10 -+ Edwards Lifesciences Corp. 1,500 20 *-+ Elan Corp. PLC 500 26 Eli Lilly & Co. 33,900 3,030 -+ Emisphere Technologies, Inc. 500 13 -+ Endo Pharmaceutical Holdings, Inc. 2,600 18
94 See the Financial Notes, which are integral to this information. 99
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Entremed, Inc. 500 16 - Enzo Biochem, Inc. 800 31 - Enzon, Inc. 1,200 85 - First Health Group Corp. 1,300 51 - Forest Laboratories, Inc., Class A 2,600 345 - Foundation Health Systems, Inc., Class A 3,800 77 - GelTex Pharmaceuticals, Inc. 700 35 -+ Gene Logic, Inc. 1,300 28 - Genentech, Inc. 6,400 528 -+ Genome Therapeutics Corp. 700 10 - Genzyme Corp. -- General Division 2,700 192 - Genzyme Surgical Products 996 7 -+ Geron Corp. 600 14 - Gilead Sciences, Inc. 1,965 169 - Guidant Corp. 9,016 477 -+ Guilford Pharmaceuticals, Inc. 700 17 - Haemonetics Corp. 700 16 HCA -- The Healthcare Co. 16,400 655 - Health Management Associates, Inc., Class A 7,100 141 - Healthcare Services Group 2,500 12 - HealthSouth Corp. 12,400 149 HEICO Corp., Class A 1,100 12 - Henry Schein, Inc. 1,100 27 - Hologic, Inc. 2,000 13 Hooper Holmes, Inc. 1,400 13 - Human Genome Sciences, Inc. 3,200 283 - Humana, Inc. 6,100 74 -+ Hyseq, Inc. 400 12 ICN Pharmaceuticals, Inc. 2,800 107 - Idec Pharmaceuticals Corp. 1,300 255 Idexx Laboratories, Inc. 1,000 24 - Igen International, Inc. 800 20 -+ Ilex Oncology, Inc. 700 25 -+ Illumina, Inc. 900 29 - ImClone Systems 1,800 98 - Immunex Corp. 14,800 630 -+ Immunogen, Inc. 1,000 34 -+ Immunomedics, Inc. 1,200 28 -+ Inamed Corp. 500 14 - Incyte Genomics, Inc. 1,800 66 -+ Inforte Corp. 400 12 - Inhale Therapeutic Systems, Inc. 1,400 70 -+ Inspire Pharmaceuticals, Inc. 700 14 -+ Integrated Telecom Express, Inc. 1,200 17 Invacare Corp. 800 23 -+ Isis Pharmaceuticals, Inc. 1,400 14 - IVAX Corp. 4,800 209 Johnson & Johnson 41,730 3,844 - King Pharmaceuticals, Inc. 4,812 216 -+ KV Pharmaceutical Co., Class A 800 31 - LabOne, Inc. 1,300 9 -+ Laboratory Corp. of America Holdings, Inc. 350 47 -+ Large Scale Biology Corp. 700 13 - LifePoint Hospitals, Inc. 1,100 43 - Ligand Pharmaceuticals, Inc., Class B 1,300 19 - Lincare Holdings, Inc. 1,400 59 -+ Lynx Therapeutics, Inc. 300 5 - Manor Care, Inc. 2,900 48 - Maxim Pharmaceuticals, Inc. 900 40 McKesson HBOC, Inc. 8,800 247 -+ Medarex, Inc. 2,200 134 - Medicis Pharmaceutical Corp., Class A 1,700 125 - Medimmune, Inc. 6,100 399 -+ MedQuist, Inc. 917 10 Medtronic, Inc. 35,324 1,919 (9) Merck & Co., Inc. 69,000 6,206 -+ MGI Pharma, Inc. 600 17 - Mid Atlantic Medical Services, Inc. 1,600 27 - Millennium Pharmaceuticals, Inc. 5,884 427 Mine Safety Appliances Co. 900 19 - Minimed, Inc. 2,000 146 -+ Molecular Devices Corp. 400 27 Mylan Laboratories, Inc. 4,200 118 - Myriad Genetics, Inc. 1,400 168 - NBTY, Inc. 1,800 12 - Neurogen Corp. 800 25 -+ Nexell Therapeutics, Inc. 450 3 - Northfield Laboratories, Inc. 1,100 12 -+ Noven Pharmacuticals, Inc. 600 27
See the Financial Notes, which 95 are integral to this information. 100 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - NPS Pharmacuticals, Inc. 1,000 43 -+ Numerical Technologies, Inc. 800 16 Oakley, Inc. 2,200 46 - Ocular Sciences, Inc. 1,000 12 Omnicare, Inc. 2,400 42 - Onyx Pharmaceuticals, Inc. 1,200 18 - Organogenesis, Inc. 1,500 19 - OrthAlliance, Inc., Class A 2,100 8 - Orthodontic Centers of America, Inc. 1,400 47 - Osteotech, Inc. 700 4 Owens & Minor, Inc. 1,500 23 - Oxford Health Plans, Inc. 2,300 78 - Oxigene, Inc. 900 7 - PacifiCare Health Systems, Inc. 1,300 14 - Parexel International Corp. 1,900 17 - Patterson Dental Co. 1,800 56 - Pediatrix Medical Group, Inc. 2,200 35 - Penwest Pharmaceuticals Co. 1,200 13 - Perrigo Co. 2,800 19 (6) Pfizer, Inc. 189,300 8,175 - Pharmaceutical Product Development, Inc. 1,000 31 Pharmacia Corp. 38,916 2,140 - Pharmacopeia, Inc. 800 15 - Pharmacyclics, Inc. 400 22 -+ PolyMedica Corp. 500 29 -+ Progenics Pharmaceuticals, Inc. 300 7 - Province Healthcare Co. 1,050 44 - PSS World Medical, Inc. 1,900 6 - Quest Diagnostic, Inc. 1,600 154 - Quintiles Transnational Corp. 3,900 54 - Quorum Health Group, Inc. 2,000 27 -+ Regeneron Pharmaceuticals, Inc. 1,900 51 - Renal Care Group, Inc. 1,100 26 - ResMed, Inc. 1,000 26 - Respironics, Inc. 1,400 27 -+ Sangstat Medical Corp. 600 6 Schering-Plough Corp. 43,900 2,269 - Sepracor, Inc. 2,100 143 - Serologicals Corp. 3,000 20 -+ SICOR, Inc. 2,600 33 - Sola International, Inc. 2,700 12 - SonoSite, Inc. 600 8 - St. Jude Medical, Inc. 2,500 138 - Steris Corp. 2,000 30 Stryker Corp. 6,000 283 - Sunrise Assisted Living, Inc. 1,200 28 - Sunrise Medical, Inc. 1,900 18 - Sunrise Technologies International 1,700 12 - SuperGen, Inc. 900 12 -+ Support.com, Inc. 1,000 14 - Sybron International Corp. 2,900 72 - Syncor International Corp. 1,200 31 - Techne Corp. 500 56 - Tenet Healthcare Corp. 10,200 401 -+ Texas Biotech Corp. 1,100 16 - Thoratec Labs Corp. 1,300 16 -+ Titan Pharmaceuticals, Inc. 800 34 - Transkaryotic Therapies, Inc. 600 22 - Triad Hospitals, Inc. 1,100 31 - Triangle Pharmaceuticals, Inc. 1,000 8 - Trigon Healthcare, Inc. 1,200 86 -+ Trimeris, Inc. 500 35 - TriPath Imaging, Inc. 2,600 21 + UnitedHealth Group, Inc. 5,800 634 - Universal Health Services, Class B 800 67 -+ Ventana Medical Systems 500 13 - Vertex Pharmaceuticals, Inc. 1,600 149 - Vical, Inc. 700 15 - Viropharma, Inc. 1,000 23 - Watson Pharmaceuticals, Inc. 3,432 215 - Wellpoint Health Networks, Inc. 2,400 281 West Pharmaceutical Services, Inc. 600 13 -+ Xoma Ltd. 1,700 21 - Young Innovations, Inc. 800 13 ------ 56,029 HOUSEHOLD PRODUCTS 1.2% ------------------------------------------------------------------------- Alberto-Culver Co., Class B 2,800 94 Avon Products, Inc. 7,300 354 - Bush Boake Allen, Inc. 500 24 Church & Dwight Co., Inc. 800 16 Clorox Co. 7,100 317 Colgate-Palmolive Co. 16,700 981
96 See the Financial Notes, which are integral to this information. 101
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Dial Corp. 2,700 30 Estee Lauder Cos., Inc., Class A 3,500 163 - French Fragrances, Inc. 1,200 14 Gillette Co. 31,300 1,092 - Guest Supply, Inc. 600 10 -+ Inter Parfums, Inc. 450 4 International Flavors & Fragrances, Inc. 3,400 57 - NU Skin Enterprises, Inc., Class A 3,300 18 - Playtex Products, Inc. 1,600 16 Procter & Gamble Co. 39,700 2,836 - Revlon, Inc., Class A 1,800 10 ------ 6,036 INSURANCE 3.7% ------------------------------------------------------------------------- 21st Century Insurance Group 2,300 38 + ACE Ltd. 520 20 AFLAC, Inc. 7,300 533 Alfa Corp. 800 15 - Alleghany Corp. 200 38 Allmerica Financial Corp. 1,900 120 Allstate Corp. 22,374 901 AMBAC Financial Group, Inc. 2,100 168 American Financial Group, Inc. 1,500 32 American General Corp. 6,600 531 (8) American International Group, Inc. 70,287 6,888 American National Insurance Co. 600 41 AmerUs Group Co. 700 18 Aon Corp. 8,000 332 - Arch Capital Group Ltd. 800 12 Argonaut Group, Inc. 800 14 Arthur J. Gallagher & Co. 1,000 63 Baldwin & Lyons, Inc., Class B 600 11 Brown & Brown, Inc. 800 26 Chubb Corp. 5,847 494 CIGNA Corp. 6,300 768 Cincinnati Financial Corp. 4,600 169 - CNA Financial Corp. 4,800 175 CNA Surety Corp. 1,200 14 Commerce Group, Inc. 700 18 Conseco, Inc. 8,500 59 Crawford & Co., Class B 1,100 14 - Delphi Financial Group, Inc., Class A 510 19 E.W. Blanch Holdings, Inc. 400 8 Enhance Financial Services Group, Inc. 1,100 13 Erie Indemnity Co., Class A 1,600 45 Everest Re Group Ltd. 1,100 64 - Farm Family Holdings, Inc. 600 21 FBL Financial Group, Inc., Class A 950 15 First American Corp. 1,500 31 - FPIC Insurance Group, Inc. 700 10 Harleysville Group, Inc. 800 18 Hartford Financial Services Group, Inc. 6,300 469 HCC Insurance Holdings, Inc. 1,200 23 Hilb, Rogal & Hamilton Co. 400 16 Horace Mann Educators Corp. 800 13 HSB Group, Inc. 600 24 Jefferson-Pilot Corp. 3,200 220 - John Hancock Financial Services 9,400 297 Kansas City Life Insurance Co. 400 13 Leucadia National Corp. 1,600 40 Liberty Corp. 500 17 Liberty Financial Cos., Inc. 1,400 38 Lincoln National Corp. 6,100 295 Loew's Corp. 3,800 346 - Markel Corp. 100 14 Marsh & McLennan Cos., Inc. 7,900 1,033 MBIA, Inc. 3,500 254 Medical Assurance, Inc. 725 10 Mercury General Corp. 1,400 51 -+ Metlife, Inc. 5,900 163 MGIC Investment Corp. 3,200 218 MIIX Group, Inc. 1,000 8 Mony Group, Inc. 1,100 45 - National Western Life Insurance Co., Class A 300 27 Nationwide Financial Services, Inc., Class A 500 24 Ohio Casualty Corp. 1,600 13 Old Republic International Corp. 2,900 75 - Penn Treaty American Corp. 1,000 19 Penn-America Group, Inc. 900 7
See the Financial Notes, which 97 are integral to this information. 102 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Pico Holdings, Inc. 1,000 13 The PMI Group, Inc. 1,150 85 Presidential Life Corp. 700 10 - Professionals Group, Inc. 520 12 Progressive Corp. 2,800 275 Protective Life Corp. 1,400 32 Radian Group, Inc. 1,159 82 Reinsurance Group of America, Inc. 1,100 41 RLI Corp. 500 20 SAFECO Corp. 4,600 111 SCPIE Holdings, Inc. 500 10 Selective Insurance Group, Inc. 700 12 St. Paul Cos., Inc. 7,600 390 Stancorp Financial Group 1,000 41 State Auto Financial Corp. 1,300 18 Torchmark Corp. 3,600 120 Transatlantic Holdings, Inc. 900 84 Trenwick Group Ltd. 800 16 - Triad Guaranty, Inc. 500 15 - UICI 1,300 10 Unitrin, Inc. 1,900 59 UnumProvident Corp. 14,414 407 Vesta Insurance Group, Inc. 2,300 13 W.R. Berkley Corp. 700 24 White Mountains Insurance Group, Inc. 200 53 - XO Communications, Inc., Class A 6,701 226 Zenith National Insurance Corp. 600 14 ------ 17,721 MEDIA 3.5% ------------------------------------------------------------------------- A.H. Belo Corp., Class A 3,300 63 Ackerly Group, Inc. 1,100 11 - Actv, Inc. 1,100 11 - American Tower Corp., Class A 5,100 209 Banta Corp. 700 16 BHC Communications, Inc., Class A 600 86 - Cablevision Systems Corp., Class A 3,900 291 Cadmus Communications Corp. 1,400 12 -+ California Amplifier, Inc. 600 15 -+ Charter Communications, Inc., Class A 4,900 96 - Chris-Craft Industries, Inc. 927 68 - Citadel Communications Corp. 1,000 12 - Clear Channel Communications, Inc. 17,286 1,038 - CNET Networks, Inc. 3,383 107 - Comcast Corp., Special Class A 26,600 1,084 - Consolidated Graphics, Inc. 1,400 15 - Cox Communications, Inc., Class A 16,735 737 - Crown Castle International Corp. 5,900 179 -+ CTC Communications Group, Inc. 550 5 - Cymer, Inc. 700 18 - Dick Clark Productions, Inc. 990 13 Dow Jones & Co., Inc. 2,800 165 - Drexler Technology Corp. 1,000 17 - EchoStar Communications Corp., Class A 6,700 303 - Efficient Networks, Inc. 1,600 67 - Emmis Communications Corp., Class A 1,000 27 - Entercom Communications Corp. 1,000 39 The E.W. Scripps Co., Class A 2,500 146 - Express Scripts, Inc., Class A 1,200 81 - Fox Entertainment Group, Inc., Class A 5,100 110 Gannett Co., Inc. 8,300 481 - Gaylord Entertainment Co. 800 19 - GC Cos., Inc. 500 1 Gray Communication Systems, Inc. 1,100 15 Gray Communication Systems, Inc., Class B 1,100 15 + Grey Global Group, Inc. 200 112 Harte-Hanks Communications, Inc. 2,100 46 - Hispanic Broadcasting Corp. 3,200 100 Hollinger International, Inc. 3,200 49 Houghton Mifflin Co. 900 33 - IDG Books Worldwide, Inc., Class A 1,200 11 - Infinity Broadcasting Corp., Class A 11,475 382 - Information Holdings, Inc. 700 18 - Insight Communications Co. 1,300 18 - Intraware, Inc. 800 6
98 See the Financial Notes, which are integral to this information. 103
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) John Wiley & Sons, Inc., Class A 1,800 37 - Journal Register Co. 1,200 21 Knight-Ridder, Inc. 4,300 216 Lee Enterprises, Inc. 1,300 36 - Liberty Digital, Inc., Class A 700 8 - Loews Cineplex Entertainment Corp. 900 1 Mail-Well, Inc. 1,300 6 - Maxwell Technologies, Inc. 1,000 16 McClatchy Co., Class A 1,200 46 McGraw-Hill Cos., Inc. 7,200 462 Media General, Inc., Class A 800 30 -+ Mediacom Communications Corp. 1,400 24 Meredith Corp. 1,900 60 - Metro-Goldwyn-Mayer, Inc. 6,017 118 - Metromedia International Group, Inc. 800 3 New York Times Co., Class A 6,100 224 - PanAmSat Corp. 400 13 Penton Media, Inc. 700 21 - Playboy Enterprises, Inc., Class B 700 9 - Price Communications Corp. 1,655 36 - Primedia, Inc. 8,300 94 -+ Pure Resources, Inc. 172 3 R.R. Donnelley & Sons Co. 4,400 95 -+ Radio Unica Communications Corp. 1,300 5 Reader's Digest Association, Inc., Class A 3,600 132 - Salem Communications Corp., Class A 1,600 19 - Scholastic Corp. 400 32 - Sinclair Broadcast Group, Inc., Class A 1,700 16 - The Source Information Management Co. 1,000 6 -+ Spanish Broadcasting System, Class A 700 6 Time Warner, Inc. 39,700 3,014 -+ TiVo, Inc. 900 12 Tribune Co. 10,200 378 United Television, Inc. 300 40 - UnitedGlobalCom, Inc., Class A 2,200 70 - USA Networks, Inc. 8,556 173 - Valassis Communications, Inc. 1,400 39 - Valuevision International, Inc., Class A 900 18 - Viacom, Inc., Class B 44,927 2,555 The Walt Disney Co. 62,500 2,238 Washington Post Co., Class B 300 160 - Westwood One, Inc. 3,200 61 -+ XM Satellite Radio Holdings, Inc., Class A 1,100 32 - Young Broadcasting, Inc., Class A 700 17 ------ 16,949 MISCELLANEOUS 1.1% ------------------------------------------------------------------------- - 1-800-Flowers.com, Inc. 1,200 5 -+ Accelerated Networks, Inc. 1,400 20 -+ Aclara BioSciences, Inc. 1,100 20 -+ Acme Communications, Inc. 700 4 -+ Agilent Technologies, Inc. 13,417 621 -+ Alaska Communications Systems Group, Inc. 1,100 7 -+ Amdocs Ltd. 111 7 -+ ANC Rental Corp. 1,337 7 -+ AT&T Latin America Corp., Class A 600 4 - BioMarin Pharmaceuticals, Inc. 1,800 23 - Bluestone Software, Inc. 500 11 Boca Resorts, Inc., Class A 1,800 24 - Braun Consulting 600 5 -+ Breakaway Solutions, Inc. 1,400 8 -+ C-Bridge Internet Solutions, Inc. 600 9 -+ C-Cube Microsystems, Inc. 1,300 25 -+ Caldera Systems, Inc. 1,100 4 -+ Charles River Laboratories International, Inc. 900 24 -+ Choice One Communications, Inc. 900 10 + CIRCOR International, Inc. 1,250 14 - Corinthian Colleges, Inc. 800 55 -+ Data Return Corp. 900 10 - Digital Island, Inc. 1,800 23 Ditech Communications Corp. 800 28 - E.piphany, Inc. 1,300 117 -+ Eloyalty Corp. 1,400 13 -+ EXE Technologies, Inc. 1,200 21 - Extreme Networks, Inc. 6,200 514 - Fairchild Semiconductor International, Inc., Class A 2,300 48
See the Financial Notes, which 99 are integral to this information. 104 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) -+ Finisar Corp. 4,800 138 -+ Frontline Capital Group 1,200 17 - Gabelli Asset Management, Inc., Class A 700 25 -+ Genuity, Inc. 5,600 31 -+ Globalnet Financial.com, Inc. 700 3 -+ Grant Prideco, Inc. 3,200 59 -+ Hain Celestial Group, Inc. 906 36 - Informatica Corp. 1,000 95 - InfoSpace, Inc. 8,520 171 -+ Interactive Intelligence, Inc. 700 26 - Intercept Group, Inc. 1,000 27 -+ Internet Capital Group, Inc. 800 11 -+ Intersil Holding Corp. 1,200 58 - ITT Educational Services, Inc. 1,000 16 -+ IXYS Corp. 600 15 + Keithley Instruments, Inc. 400 21 - Keynote Systems, Inc. 700 17 -+ Lexent, Inc. 1,000 29 - Liquid Audio 700 3 - Mail.com, Inc. 1,600 5 -+ Management Network Group, Inc. 1,000 13 -+ Manufacturers Services Ltd. 900 9 -+ MCSi, Inc. 700 20 MicroFinancial, Inc. 1,400 14 -+ NaviSite, Inc. 1,600 16 -+ NetCreations, Inc. 500 4 - Network Access Solutions Corp. 1,100 3 -+ Network Commerce, Inc. 2,100 6 + Neuberger Berman, Inc. 1,400 92 -+ Nuance Communications, Inc. 1,000 86 -+ Nucentrix Broadband Networks, Inc. 200 5 -+ OSI Pharmaceuticals, Inc. 800 58 -+ Pac-West Telecomm, Inc. 1,100 10 -+ Palm, Inc. 17,032 912 -+ Peco II, Inc. 600 24 -+ Pennaco Energy, Inc. 600 7 - Phone.com, Inc. 2,500 231 -+ Professional Detailing, Inc. 400 35 - Radio One, Inc., Class A 600 5 -+ Regent Communications, Inc. 900 5 -+ Rosetta Inpharmatics 900 20 -+ Rudolph Technologies, Inc. 500 20 - Sabre Holdings Corp. 3,701 124 -+ Sage, Inc. 700 9 - Sagent Technology, Inc. 1,500 4 Santander Bancorp. 1,100 17 -+ Silicon Image, Inc. 1,400 16 - Software Technologies Corp. 1,900 32 -+ Somera Communications, Inc. 1,900 21 - Spherion Corp. 1,830 22 - Stanford Microdevices, Inc. 700 18 -+ Stratos Lightwave, Inc. 1,800 48 -+ T/R Systems, Inc. 400 2 - Too, Inc. 742 17 -+ Travelocity.com, Inc. 300 4 -+ Trizetto Group, Inc. 900 18 -+ Troy Group, Inc. 500 3 - Tumbleweed Communications Corp. 800 14 + United Parcel Service, Inc., Class B 3,200 194 - United Therapeutics Corp. 700 37 -+ Viador, Inc. 800 4 -+ Vicinity Corp. 900 9 Virginia Capital Bancshares, Inc. 1,100 18 - Vitria Technology, Inc. 3,700 99 W.P. Carey & Co. LLC 700 12 -+ Webex Communications, Inc. 1,000 45 -+ Williams Communications Group, Inc. 1,900 35 XCEL Energy, Inc. 9,995 255 ----- 5,156 MISCELLANEOUS FINANCE 6.8% ------------------------------------------------------------------------- 1st Source Corp. 630 10 A.G. Edwards, Inc. 2,800 142 Advanta Corp., Class A 700 7 Advest Group, Inc. 700 23 - Affiliated Managers Group, Inc. 700 42 Alliance Capital Management Holding L.P. 6,100 293 Allied Capital Corp. 2,500 52 AMCORE Financial, Inc. 700 14 American Bank of Connecticut Waterbury 600 12 + American Capital Strategies Ltd. 500 11 American Express Co. 41,300 2,478
100 See the Financial Notes, which are integral to this information. 105
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - AmeriCredit Corp. 2,200 59 - Ameritrade Holding Corp., Class A 4,900 72 Area Bancshares Corp. 500 10 Associates First Capital Corp., Class A 21,800 809 Astoria Financial Corp. 2,000 75 AXA Financial, Inc. 11,500 622 Bay View Capital Corp. 1,600 13 Bear Stearns Cos., Inc. 5,920 359 - Berkshire Hathaway, Inc., Class A 46 2,930 - BISYS Group, Inc. 1,800 85 - BOK Financial Corp. 1,427 27 BT Financial Corp. 725 14 Capital One Financial Corp. 6,900 436 CarrAmerica Realty Corp. 1,800 53 Cash America International, Inc. 1,300 7 Cathay Bancorp., Inc. 400 20 ## Charles Schwab Corp. 41,420 1,455 Charter One Financial, Inc. 8,941 205 CIT Group, Inc., Class A 9,200 160 (7) Citigroup, Inc. 134,833 7,096 Coastal Bancorp, Inc. 800 14 Coastal Financial Corp. 924 10 Cohoes Bancorp. 1,200 20 Commercial Federal Corp. 1,300 23 - CompuCredit Corp. 1,400 43 Countrywide Credit Industries, Inc. 4,900 183 CVB Financial Corp. 625 10 Dain Rauscher Corp. 400 38 Dime Bancorp., Inc. 3,200 78 Downey Financial Corp. 800 38 - E*Trade Group, Inc. 9,935 145 Eaton Vance Corp. 1,100 55 -+ Espeed, Inc., Class A 200 4 Fannie Mae 30,200 2,325 Federated Investors, Inc., Class B 3,450 100 Fidelity Bancshares, Inc. 800 15 Fidelity National Financial, Inc. 1,700 42 - Financial Federal Corp. 800 17 + First Financial Corp. 300 9 First Northern Capital Corp. 1,300 20 First Sentinel Bancorp., Inc. 1,500 14 Flagstar Bancorp., Inc. 1,000 13 Franklin Resources, Inc. 10,000 428 Freddie Mac 20,800 1,248 Golden State Bancorp, Inc. 3,600 94 Goldman Sachs Group, Inc. 4,100 409 Greater Bay Bancorp. 1,632 53 Heller Financial, Inc. 1,359 40 Household International, Inc. 14,200 714 Hudson River Bancorp. 1,600 22 Hugoton Royalty Trust 1,300 17 IndyMac Bancorp., Inc. 2,000 42 International Bancshares Corp. 562 20 - Investment Technology Group, Inc. 800 29 - Investors Financial Services Corp. 800 57 Jefferies Group, Inc. 800 22 John Nuveen Co., Class A 900 43 -+ JWGenesis Financial Corp. 1,041 10 -+ Knight Trading Group, Inc. 6,700 201 - LaBranche & Co., Inc. 1,400 55 Legg Mason, Inc. 2,200 114 Lehman Brothers Holdings, Inc. 7,800 503 MBNA Corp. 25,500 958 MDC Holdings, Inc. 1,000 27 Merrill Lynch & Co., Inc. 24,100 1,687 Mississippi Valley Bancshares 500 13 Morgan Keegan, Inc. 700 14 Morgan Stanley Dean Witter & Co. 33,700 2,707 - National Discount Broker Group, Inc. 600 29 - New Century Financial Corp. 1,700 20 - NextCard, Inc. 1,700 13 Northwest Bancorp., Inc. 1,500 11 - Ocwen Financial Corp. 2,920 17 - Orchid BioSciences, Inc. 900 18 Pacific Capital Bancorp. 700 19 Paine Webber Group, Inc. 5,000 356 - PBOC Holdings, Inc. 1,500 9 The Peoples Holding Co. 500 10 Phoenix Investment Partners Ltd. 1,600 25 Raymond James Financial, Inc. 1,300 44
See the Financial Notes, which 101 are integral to this information. 106 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Resource America, Inc., Class A 1,660 13 Siebert Financial Corp. 1,100 7 Southwest Securities Group 583 16 Sovereign Bancorp., Inc. 6,360 53 Staten Island Bancorp., Inc. 800 15 Student Loan Corp. 500 27 T. Rowe Price Associates, Inc. 4,700 220 TCF Financial Corp. 2,300 93 -+ TD Waterhouse Group, Inc. 1,200 20 Tucker Anthony Sutro 1,200 28 + USA Education, Inc. 4,600 257 + Value Line, Inc. 300 10 W Holding Co., Inc. 1,400 13 Waddell & Reed Financial, Inc., Class A 2,350 75 Washington Federal, Inc. 1,500 33 Washington Mutual, Inc. 16,177 712 Webster Financial Corp. 2,012 49 Wesco Financial Corp. 200 54 - WFS Financial, Inc. 900 14 World Acceptance Corp. 1,400 7 ------ 32,621 NON-FERROUS METALS 0.3% ------------------------------------------------------------------------- Alcoa, Inc. 26,464 759 Commercial Metals Co. 500 14 Commonwealth Industries, Inc. 1,300 8 Engelhard Corp. 5,100 106 - Freeport-McMoRan Copper & Gold, Inc., Class B 4,200 33 IMCO Recycling, Inc. 1,400 8 - Kaiser Aluminum Corp. 2,000 10 - MAXXAM, Inc. 400 8 Minerals Technologies, Inc. 500 16 - Mueller Industries, Inc. 900 21 Phelps Dodge Corp. 3,430 160 Reliance Steel & Aluminum Co. 650 15 Southern Peru Copper Corp. 1,000 14 - Stillwater Mining Co. 1,100 32 - United Park City Mines 200 3 - Wolverine Tube, Inc. 700 10 ------ 1,217 OIL: DOMESTIC 0.8% ------------------------------------------------------------------------- Amerada Hess Corp. 3,600 223 Ashland, Inc. 3,400 111 - Belco Oil & Gas Corp. 2,000 18 - CAL Dive International, Inc. 500 25 - Callon Petroleum Co. 1,100 17 Conoco, Inc., Class B 18,500 503 Consol Energy, Inc. 2,100 36 Cross Timbers Oil Co. 2,400 45 Diamond Offshore Drilling, Inc. 4,000 138 - Frontier Oil Corp. 2,000 16 - Global Industries Ltd. 2,500 26 - Gulf Island Fabrication, Inc. 1,300 17 - Houston Exploration Co. 700 16 + Howell Corp. 600 7 - HS Resources, Inc. 800 25 Kerr-McGee Corp. 2,900 189 - Meridian Resource Corp. 1,600 11 Midcoast Energy Resources 700 14 Murphy Oil Corp. 1,500 87 - National-Oilwell, Inc. 2,369 69 - Newfield Exploration Co. 1,200 45 - Nuevo Energy Co. 800 15 - Ocean Energy, Inc. 4,800 67 Patina Oil & Gas Corp. 1,500 26 - Patterson Energy, Inc. 900 25 Pennzoil-Quaker State Co. 1,800 21 Phillips Petroleum Co. 7,600 469 - Pioneer Natural Resources Co. 2,600 34 Pogo Producing Co. 1,000 25 - Pride International, Inc. 1,900 48 - Remington Oil & Gas Corp. 400 4 St. Mary Land & Exploration Co. 1,200 28 - Stone Energy Corp. 500 26 Sunoco, Inc. 3,000 90 - Superior Energy Services 1,900 17 - Syntroleum Corp. 1,500 29 Teppco Partners L.P. 1,000 23 - Tesoro Petroleum Corp. 1,300 13 Tosco Corp. 4,600 132 - TransMontaigne, Inc. 1,600 6
102 See the Financial Notes, which are integral to this information. 107
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Transocean Sedco Forex, Inc. 6,881 365 Ultramar Diamond Shamrock Corp. 2,500 66 Unocal Corp. 7,400 253 USX-Marathon Group, Inc. 9,400 256 Vintage Petroleum, Inc. 1,800 38 ------ 3,714 OIL: INTERNATIONAL 2.5% ------------------------------------------------------------------------- Chevron Corp. 19,500 1,601 (4)Exxon Mobil Corp. 104,358 9,307 Santa Fe International Corp. 3,500 128 Texaco, Inc. 16,500 975 ------ 12,011 OPTICAL & PHOTO 0.1% ------------------------------------------------------------------------- CPI Corp. 400 8 Eastman Kodak Co. 9,300 417 - Ingram Micro, Inc., Class A 1,800 31 Meade Instruments Corp. 800 15 Polaroid Corp. 3,800 38 -+ Robotic Vision Systems, Inc. 1,000 5 - Zomax, Inc. 2,000 12 -+ Zygo Corp. 500 25 ------ 551 PAPER & FOREST PRODUCTS 0.7% ------------------------------------------------------------------------- Boise Cascade Corp. 2,300 66 Bowater, Inc. 1,600 87 - Buckeye Technologies, Inc. 800 14 Caraustar Industries, Inc. 700 7 Chesapeake Corp. 500 10 - CSS Industries, Inc. 600 12 -+ Fibermark, Inc. 300 2 Fort James Corp. 6,300 208 Georgia-Pacific Corp. (Timber Group) 2,300 65 Georgia-Pacific Group 5,700 153 International Paper Co. 14,204 520 Kimberly-Clark Corp. 16,139 1,065 Longview Fibre Co. 1,200 16 Louisiana-Pacific Corp. 2,900 25 - Lydall, Inc. 1,400 15 Mead Corp. 2,900 84 Pentair, Inc. 1,400 42 PH Glatfelter Co. 2,800 29 + Pope & Talbot, Inc. 500 8 Potlatch Corp. 800 27 Rayonier, Inc. 800 28 Rock Tennessee Co., Class A 1,000 9 Smurfit-Stone Container Corp. 6,100 82 Temple-Inland, Inc. 1,900 85 - Thermo Fibertek, Inc. 1,500 6 Universal Forest Products, Inc. 800 11 Wausau Mosinee Paper Corp. 1,100 10 Westvaco Corp. 2,800 80 Weyerhaeuser Co. 7,600 357 Willamette Industries, Inc. 3,300 120 ------ 3,243 PRODUCER GOODS & MANUFACTURING 5.9% ------------------------------------------------------------------------- Actuant Corp., Class A 1,100 4 - Advanced Energy Industries, Inc. 900 16 -+ Aeroflex, Inc. 900 54 AGCO Corp. 1,700 19 - Albany International Corp., Class A 918 10 - Alltrista Corp. 200 2 - American Standard Cos. 2,800 128 Ametek, Inc. 900 20 Applied Industrial Technologies, Inc. 900 15 - Applied Micro Circuits Corp. 8,838 676 AptarGroup, Inc. 900 19 - Arcade Financial Technologies, Inc. 1,000 23 - Astec Industries, Inc. 500 5 Avery Dennison Corp. 3,300 167 -+ Axcelis Technologies, Inc. 2,800 30 Baldor Electric, Co. 800 16 Barnes Group, Inc. 700 13 - BE Aerospace, Inc. 1,100 18 - Blount International, Inc. 1,200 10 - Blyth, Inc. 1,300 34 Briggs & Stratton Corp. 1,500 54 -+ Capstone Turbine Corp. 2,300 128 Caterpillar, Inc. 10,200 358 CLARCOR, Inc. 700 13
See the Financial Notes, which 103 are integral to this information. 108 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Cognex Corp. 1,200 40 Columbus Mckinnon Corp. 500 7 Cooper Industries, Inc. 6,000 230 Corning, Inc. 26,457 2,024 - Cuno, Inc. 600 15 Curtiss-Wright Corp. 400 19 -+ Cyber-Care, Inc. 900 4 Deere & Co. 7,400 272 - Diamond Technology Partners, Inc. 600 27 Dover Corp. 7,300 310 -+ Elantec Semiconductor, Inc. 600 67 Emerson Electric Co. 12,900 947 -+ Encompass Services Corp. 2,525 12 - The Fairchild Corp., Class A 1,400 8 Federal Signal Corp. 1,300 30 - Fisher Scientific International 1,200 46 - Flowserve Corp. 1,100 22 - FMC Corp. 900 68 Foster Wheeler Corp. 1,200 9 Franklin Electric Co., Inc. 200 14 #(1) General Electric Co. 295,556 16,200 Graco, Inc. 500 18 - Hanover Compressor Co. 1,600 52 -+ Harbor Global Co. Ltd. 160 1 Hardinge, Inc. 800 9 Harsco Corp. 1,000 20 Helix Technology Corp. 600 17 Herman Miller, Inc. 2,200 57 Hexcel Corp. 1,500 16 HON Industries, Inc. 1,600 39 Honeywell International, Inc. 24,162 1,300 Hubbell, Inc., Class B 1,800 43 Hughes Supply, Inc. 500 9 -+ Ibis Technology Corp. 200 8 IDEX Corp. 800 26 Illinois Tool Works, Inc. 9,150 508 Ingersoll-Rand Co. 5,700 215 - Ionics, Inc. 400 8 - Jabil Circuit, Inc. 5,800 331 JLG Industries, Inc. 1,300 18 Johnson Controls, Inc. 2,600 155 Kaydon Corp. 800 18 Kennametal, Inc. 800 24 - Lattice Semiconductor Corp. 3,200 93 Lennox International, Inc. 1,971 16 Libbey, Inc. 500 14 Lincoln Electric Holdings, Inc. 1,000 17 - Lone Star Technologies, Inc. 1,000 40 - Magnatek, Inc. 1,500 16 Manitowoc Co., Inc. 600 16 - Marine Drilling Co., Inc. 1,600 38 MascoTech, Inc. 1,100 18 - Mastec, Inc. 1,350 39 - Material Sciences Corp. 800 8 Matthews International Corp., Class A 700 19 - Maverick Tube Corp. 1,000 16 -+ McData Corp., Class B 700 58 Metals USA, Inc. 1,000 3 - Micrel, Inc. 2,800 127 Milacron, Inc. 1,100 18 Millipore Corp. 1,400 74 Minnesota Mining & Manufacturing Co. 11,500 1,111 - MSC Industrial Direct Co., Class A 1,000 15 Nacco Industries, Inc., Class A 300 11 Nordson Corp. 1,000 29 - Nortek, Inc. 500 9 - Oceaneering International, Inc. 800 11 Pall Corp. 3,500 75 - Park Ohio Holdings Corp. 1,100 8 Parker-Hannifin Corp. 3,400 141 Penn Engineering & Manufacturing Corp. 500 19 Pitt-Des Moines, Inc. 500 16 -+ Plug Power, Inc. 1,300 31 -+ PMC Sierra, Inc. 308 52 Precision Castparts Corp. 1,600 60 -+ Presstek, Inc. 700 11 Primex Technologies, Inc. 500 15 - Rare Medium Group, Inc. 1,100 5 Regal Beloit 500 8 - Research Frontiers, Inc. 800 15 Roper Industries, Inc. 800 28 - Safeguard Scientifics, Inc. 3,300 51 Sauer-Danfoss, Inc. 1,100 8
104 See the Financial Notes, which are integral to this information. 109
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - Scott Technologies, Inc. 700 16 - Shaw Group, Inc. 500 41 Snap-On, Inc. 2,000 51 - SPS Technologies, Inc. 500 26 - Standex International Corp. 500 9 Steelcase, Inc., Class A 1,000 18 Stewart & Stevenson Services 1,000 24 - Strattec Security Corp. 300 10 Tecumseh Products Co., Class A 500 20 Teleflex, Inc. 1,100 38 Tennant Co. 600 26 + Tenneco Automotive, Inc. 1,980 9 - Terex Corp. 700 9 The Timken Co. 2,500 35 Trinity Industries, Inc. 1,100 26 U.S. Industries, Inc. 2,000 18 - UCAR International, Inc. 1,300 11 - Ultratech Stepper, Inc. 800 19 -+ Uniroyal Technology Corp. 600 6 Valhi, Inc. 3,300 41 Valmont Industries, Inc. 900 18 W.W. Grainger, Inc. 2,700 86 Watsco, Inc. 900 8 Watts Industries, Inc., Class A 1,000 11 - WMS Industries, Inc. 1,000 22 Woodward Governor Co. 500 22 X-Rite, Inc. 2,000 14 York International Corp. 1,100 30 - Zebra Technologies Corp., Class A 1,000 44 ------ 28,162 RAILROAD & SHIPPING 0.3% ------------------------------------------------------------------------- Alexander & Baldwin, Inc. 1,000 25 Burlington Northern Santa Fe Corp. 13,100 348 CSX Corp. 6,700 170 Florida East Coast Industries, Inc., Class A 1,100 39 GATX Corp. 1,500 63 Greenbrier Cos., Inc. 1,600 14 -+ Gulfmark Offshore, Inc. 300 9 -+ Kansas City Southern Industries, Inc. 1,550 13 Newport News Shipbuilding, Inc. 900 44 Norfolk Southern Corp. 11,900 168 Overseas Shipholding Group, Inc. 1,000 24 -+ Railamerica, Inc. 866 7 - Transport Corp. of America 1,100 6 Union Pacific Corp. 7,300 342 - Wisconsin Central Transportation Corp. 1,200 15 ------ 1,287 REAL PROPERTY 0.8% ------------------------------------------------------------------------- Alexandria Real Estate Equities, Inc. 500 17 AMB Property Corp. 2,300 54 - American Real Estate Partners L.P. 1,300 12 -+ American Realty Investors, Inc. 637 9 - American Retirement Corp. 700 4 + AMLI Residential Properties 500 12 Amresco Capital Trust, Inc. 1,300 13 Apartment Investment & Management Co. 2,000 91 Archstone Communities Trust 3,900 92 Arden Realty, Inc. 1,700 41 AvalonBay Communities, Inc. 1,900 87 - Avatar Holdings, Inc. 700 13 Bedford Property Investors 900 18 Boston Properties, Inc. 2,200 89 Brandywine Realty Trust 1,000 19 BRE Properties, Class A 1,200 38 Burnham Pacific Property, Inc. 1,500 8 Cabot Industrial Trust 1,200 23 Camden Property Trust 1,000 29 Capstead Mortgage Corp. 650 6 - Catellus Development Corp. 3,200 58 - CB Richard Ellis Services, Inc. 1,100 14 CBL & Associates Properties 700 16 Center Trust, Inc. 1,400 8 Centerpoint Properties Corp. 500 22 Charles E. Smith Residential 600 26 Chateau Communities, Inc. 800 23 Chelsea GCA Realty, Inc. 500 16 Colonial Properties Trust 500 12 + Commercial Net Lease Realty 1,000 10 Cornerstone Realty Income Trust 1,200 13
See the Financial Notes, which 105 are integral to this information. 110 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Correctional Properties Trust 1,100 11 Cousins Properties, Inc. 1,500 39 Crescent Real Estate Equity Co. 3,200 64 Developers Diversified Realty Corp. 1,600 19 Duke-Weeks Realty Corp. 3,590 85 Eastgroup Properties 700 14 Equity Inns, Inc. 1,900 12 Equity Office Properties Trust 9,048 273 Equity One, Inc. 1,100 10 Equity Residential Properties Trust 4,000 188 Essex Property Trust, Inc. 600 31 + Excel Legacy Corp. 363 1 - Fairfield Communities, Inc. 1,000 13 Federal Realty Investment Trust 1,200 23 FelCor Lodging Trust, Inc. 1,700 37 First Industrial Realty Trust 1,100 34 First Washington Realty Trust 600 15 Forest City Enterprises, Inc., Class A 800 30 Franchise Finance Corp. of America REIT 1,400 28 Gables Residential Trust 500 13 General Growth Properties 1,500 44 Getty Realty Corp. 1,000 10 Glenborough Realty Trust, Inc. 900 14 Glimcher Realty Trust 800 10 Golf Trust of America L.P. 900 10 Grove Property Trust 1,000 17 Health Care Property Investors, Inc. 1,424 42 Health Care Real Estate Investment Trust, Inc. 700 12 Healthcare Realty Trust, Inc. 1,200 24 Highwoods Properties, Inc. 1,800 39 Home Properties of NY, Inc. 500 14 Hospitality Properties Trust 1,500 32 HRPT Properties Trust 3,400 22 Innkeepers USA Trust 1,500 15 IRT Property Co. 1,600 13 iStar Financial, Inc. 2,290 46 JDN Realty Corp. 1,300 14 - Jones Lang LaSalle, Inc. 1,100 14 JP Realty, Inc. 700 11 Keystone Property Trust 900 12 Kilroy Realty Corp. 800 21 Kimco Realty Corp. 1,700 68 Koger Equity, Inc. 700 11 + Konover Property Trust, Inc. 1,600 7 + Kramont Realty Trust 1,400 13 Liberty Property Trust 2,000 53 LNR Property Corp. 700 15 LTC Properties, Inc. 1,800 6 The Macerich Co. 900 18 Mack-Cali Realty Corp. 1,600 43 Manufactured Home Communities 500 12 Mid-America Apartment Communities, Inc. 500 11 Mills Corp. 700 12 National Golf Properties, Inc. 800 16 National Health Investors, Inc. 700 4 Nationwide Health Properties, Inc. 1,100 16 New Plan Excel Realty Trust 2,300 28 Newhall Land & Farming Co. L.P. 800 19 - Omega Healthcare Investors 1,000 6 Pacific Gulf Properties, Inc. 800 21 Pan Pacific Retail Properties, Inc. 900 18 Parkway Properties, Inc. 500 14 - Pinnacle Holdings, Inc. 1,300 20 PMC Commercial Trust 1,000 10 Post Properties, Inc. 1,200 42 Prentiss Properties Trust 1,100 28 Prologis Trust 4,900 103 PS Business Parks, Inc. 500 13 Public Storage, Inc. 3,700 83 Realty Income Corp. 800 18 Reckson Associates Realty 1,200 27 Regency Realty Corp. 1,700 38 RFS Hotel Investors, Inc. 1,100 14 Rouse Co. 2,000 49 + Saul Centers, Inc. 600 9 - Security Capital Group, Inc., Class B 1,300 25 Senior Housing Properties Trust 950 9
106 See the Financial Notes, which are integral to this information. 111
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Shurgard Storage Centers, Inc., Class A 600 14 Simon Property Group, Inc. 5,000 112 SL Green Realty Corp. 700 19 Sovran Self Storage, Inc. 800 15 Spieker Properties, Inc. 2,000 111 The St. Joe Co. 2,400 48 Starwood Hotels & Resorts Worldwide, Inc. 5,680 168 Storage USA, Inc. 800 22 Summit Properties, Inc. 600 14 Sun Communities, Inc. 500 15 Tanger Factory Outlet Centers 800 17 Taragon Realty Investors, Inc. 1,300 16 Taubman Centers, Inc. 1,600 18 - Trammell Crow Co. 1,300 17 United Dominion Realty Trust 2,600 27 Universal Health Realty Income 900 16 Vornado Realty Trust 2,500 87 Washington Real Estate Investment Trust 1,100 22 Weingarten Realty Investment 800 34 Westfield America, Inc. 2,200 31 ------ 3,991 RETAIL 4.5% ------------------------------------------------------------------------- -+ 7-Eleven, Inc. 2,900 31 - 99 Cents Only Stores 1,000 22 Albertson's, Inc. 14,168 336 -+ Alloy Online, Inc. 200 2 - Amazon.com, Inc. 10,500 385 - American Eagle Outfitters, Inc. 1,100 38 - AnnTaylor Stores Corp. 800 24 - AutoZone, Inc. 8,900 239 - Barnes & Noble, Inc. 1,600 30 - Bed, Bath & Beyond, Inc. 8,000 207 - Best Buy Co., Inc. 6,000 301 - BJ's Wholesale Club, Inc. 2,100 69 - Borders Group, Inc. 1,800 25 Burlington Coat Factory Warehouse Corp. 1,200 19 Casey's General Stores, Inc. 1,100 14 The Cato Corp., Class A 1,200 14 - Central Garden & Pet Co. 1,700 13 - Charming Shoppes, Inc. 2,000 12 Circuit City Stores--Circuit City Group 6,500 86 Claire's Stores, Inc. 1,200 24 - Coldwater Creek, Inc. 700 21 - Consolidated Stores Corp. 3,500 42 - Cost Plus, Inc. 700 20 - Costco Wholesale Corp. 13,000 476 CVS Corp. 11,700 619 DEB Shops, Inc. 700 8 Delhaize America, Inc. 4,747 81 Dillards, Inc., Class A 4,000 42 Dollar General Corp. 10,375 161 - Dollar Tree Stores, Inc. 3,550 139 - Duane Reade, Inc. 500 15 Enesco Group, Inc. 1,100 7 -+ Etoys, Inc. 3,500 13 Family Dollar Stores, Inc. 5,300 103 - Federated Department Stores, Inc. 6,700 218 -+ Gadzooks, Inc. 600 11 Gap, Inc. 24,800 640 - Gottschalks, Inc. 1,800 9 Great Atlantic & Pacific Tea Co., Inc. 800 8 - Greg Manning Auctions, Inc. 800 4 - Guitar Center, Inc. 1,100 15 Home Depot, Inc. 69,100 2,971 -+ HOT Topic, Inc. 400 14 - Insight Enterprises, Inc. 1,050 34 - Intertan, Inc. 1,050 12 Intimate Brands, Inc. 14,240 340 J.C. Penney Co., Inc. 8,800 103 - Kmart Corp. 13,200 78 - Kohl's Corp. 9,700 526 - Kroger Co. 24,400 551 - Lands' End, Inc. 800 21 + Lillian Vernon Corp. 500 5 Limited, Inc. 14,400 364 Longs Drug Stores, Inc. 1,800 39 Lowe's Cos., Inc. 11,700 535 May Department Stores Co. 10,400 273 - Michaels Stores, Inc. 1,000 24 - The Neiman Marcus Group, Inc., Class A 1,100 41
See the Financial Notes, which 107 are integral to this information. 112 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - The Neiman Marcus Group, Inc., Class B 451 16 Nordstrom, Inc. 4,200 69 - Office Depot, Inc. 9,600 80 - OfficeMax, Inc. 2,700 8 - Payless Shoesource, Inc. 602 35 -+ PC Connection, Inc. 600 16 Pep Boys -- Manny, Moe, & Jack 1,600 7 Pier 1 Imports, Inc. 2,000 27 -+ Pricesmart, Inc. 200 7 RadioShack Corp. 5,600 334 Ross Stores, Inc. 2,100 28 Ruddick Corp. 900 12 - Safeway, Inc. 14,900 815 - Saks, Inc. 3,200 33 - School Specialty, Inc. 1,100 17 Sears, Roebuck & Co. 10,600 315 -+ Sharper Image Corp. 1,200 23 - ShopKo Stores, Inc. 600 4 Spiegel, Inc., Class A 2,700 19 - Staples, Inc. 14,700 209 - Stein Mart, Inc. 2,300 36 - Sunglass HUT International, Inc. 1,500 12 Target Corp. 27,200 751 Tiffany & Co., Inc. 4,200 179 TJX Cos., Inc. 8,500 232 - Toys 'R' Us, Inc. 7,900 136 - Tractor Supply Co. 700 6 - Tuesday Morning Corp. 1,100 5 Unifirst Corp. 900 9 - United Stationers, Inc. 900 27 - Value City Department Stores, Inc. 700 6 - Venator Group, Inc. 3,900 55 (10) Wal-Mart Stores, Inc. 133,800 6,071 Walgreen Co. 30,100 1,373 Weis Markets, Inc. 1,000 37 - West Marine, Inc. 1,200 9 - Whitehall Jewellers, Inc. 600 5 - Williams-Sonoma, Inc. 1,600 33 Winn-Dixie Stores, Inc. 4,000 77 - Zale Corp. 900 30 ------ 21,637 STEEL 0.1% ------------------------------------------------------------------------- AK Steel Holding Corp. 3,027 28 Allegheny Technologies, Inc. 3,150 64 - Atchison Casting Corp. 900 3 - Bethlehem Steel Corp. 2,884 8 Carpenter Technology Corp. 900 28 Cleveland-Cliffs, Inc. 700 14 - Gibraltar Steel Corp. 600 8 Intermet Corp. 1,100 8 National Steel Corp., Class B 2,400 7 - NS Group, Inc. 1,200 10 Nucor Corp. 2,500 87 Quanex Corp. 800 16 Roanoke Electric Steel Corp. 800 8 Ryerson Tull, Inc. 1,000 8 - Steel Dynamics, Inc. 1,200 14 Steel Technologies, Inc. 700 4 USX-U.S. Steel Group, Inc. 2,400 38 Worthington Industries, Inc. 2,200 21 ------ 374 TELEPHONE 5.9% ------------------------------------------------------------------------- - Adtran, Inc. 1,600 61 -+ Airgate PCS, Inc. 300 12 *+ Alcatel SA 638 40 - Allegiance Telecom, Inc. 3,050 96 Alltel Corp. 9,435 608 - Arch Wireless, Inc. 500 2 AT&T Corp. 113,606 2,634 -+ AT&T Corp. -- Liberty Media Group, Class A 1,206 22 - Autobytel.com, Inc. 1,800 10 -+ Avaya, Inc. 8,585 115 BellSouth Corp. 57,000 2,754 - Boston Communications Group 1,300 31 - Broadwing, Inc. 6,368 180 - Carrier Access Corp. 600 8 - Centennial Communications Corp. 2,400 47 -+ Centillium Communications, Inc. 1,000 38 CenturyTel, Inc. 6,000 231 CFW Communication Co. 500 10 - Citizens Communications Co. 7,500 109 - Commonwealth Telephone Enterprises, Inc. 500 17
108 See the Financial Notes, which are integral to this information. 113
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Conestoga Enterprise, Inc. 700 13 - Copper Mountain Networks, Inc. 1,400 16 - Covad Communications Group, Inc. 4,450 24 CT Communications, Inc. 1,000 20 D & E Communications, Inc. 700 17 -+ Dobson Communications Corp., Class A 2,600 34 -+ Equinix, Inc. 2,100 20 - Exodus Communications, Inc. 12,600 423 - Focal Communications Corp. 1,600 23 - General Communication, Inc., Class A 500 4 - Global Crossing Ltd. 8,164 193 - Globix Corp. 1,000 10 -+ Goamerica, Inc. 1,800 19 Hickory Tech Corp. 1,100 25 -+ Illuminet Holdings, Inc. 800 19 - Inet Technologies, Inc. 1,300 53 Inter-Tel, Inc. 600 7 - Interdigital Communications Corp. 1,400 15 - Intermedia Communications, Inc. 3,000 66 ITC DeltaCom, Inc. 1,500 12 -+ ITXC Corp. 1,100 12 - Leap Wireless International, Inc. 800 40 - Level 3 Communications, Inc. 10,900 520 -+ Lexar Media, Inc. 1,400 10 -+ Lexicon Genetics, Inc. 1,300 26 - McLeodUSA, Inc., Class A 17,144 330 -+ Metrocall, Inc. 1,000 1 - Motient Corp. 1,200 15 - Nanometrics, Inc. 300 7 - Neon Communications, Inc. 500 6 - Net2Phone, Inc. 600 11 - Network Plus Corp. 1,400 11 -+ Next Level Communications, Inc. 2,400 112 North Pittsburgh Systems, Inc. 1,000 12 - NorthPoint Communications Group, Inc. 3,700 25 - NTL, Inc. 7,394 325 - Optical Cable Corp. 1,800 29 - Pegasus Communications Corp. 1,300 46 - Powertel, Inc. 1,000 87 - Primus Telecommunications Group, Inc. 900 5 - Qwest Communications International, Inc. 49,837 2,423 - RCN Corp. 2,300 41 SBC Communications, Inc. 102,862 5,934 -+ Spectrasite Holdings, Inc. 3,900 77 Sprint Corp. (FON Group) 26,300 671 - Sprint Corp. (PCS Group) 27,700 1,056 -+ StorageNetworks, Inc. 800 51 -+ Tanox, Inc. 1,200 45 Telephone & Data Systems, Inc. 1,900 200 - Teligent, Inc., Class A 1,000 8 - Time Warner Telecom, Inc., Class A 900 54 -+ Tripath Technology, Inc. 800 23 -+ Tritel, Inc. 2,800 39 - Triton PCS Holdings, Inc., Class A 1,500 70 -+ Turnstone Systems, Inc. 400 9 - Tut Systems, Inc. 500 17 - U.S. Cellular Corp. 2,500 160 -+ U.S. Wireless Corp. 400 6 - US LEC Corp., Class A 500 3 - Varco International, Inc. 2,740 47 + Verizon Communications 82,612 4,776 - Viatel, Inc. 1,311 13 - VoiceStream Wireless Corp. 5,861 771 - WebLink Wireless, Inc. 1,100 9 - West Teleservices Corp. 1,700 43 - Westell Technologies, Inc., Class A 2,560 14 - Winstar Communications, Inc. 2,550 50 -+ WJ Communications, Inc. 1,600 24 - World Access, Inc. 1,600 8 - Worldcom, Inc. 86,449 2,053 - WorldPort Communications, Inc. 600 3 -+ Z-Tel Technologies, Inc. 900 8 ------ 28,374
See the Financial Notes, which 109 are integral to this information. 114 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) TOBACCO 0.6% ------------------------------------------------------------------------- Philip Morris Cos., Inc. 68,700 2,516 R.J. Reynolds Tobacco Holdings, Inc. 2,966 106 Schweitzer-Mauduit International, Inc. 900 15 Universal Corp. 800 22 UST, Inc. 4,700 119 ------- 2,778 TRAVEL & RECREATION 0.4% ------------------------------------------------------------------------- - AMERCO, Inc. 900 18 - American Classic Voyager Co. 600 8 - Anchor Gaming, Inc. 500 42 - Argosy Gaming Co. 1,100 18 -+ Autotote Corp., Class A 700 2 - Avis Group Holdings, Inc. 800 24 - Aztar Corp. 1,400 21 - Bally Total Fitness Holding Corp. 1,300 32 Brunswick Corp. 3,700 72 Callaway Golf Co. 2,000 32 Carnival Corp. 18,200 452 Central Parking Corp. 900 17 - Choice Hotels International, Inc. 1,900 22 - Crestline Capital Corp. 800 17 - Dollar Thrifty Automotive Group, Inc. 1,000 15 -+ Expedia, Inc., Class A 1,000 13 - Extended Stay America, Inc. 2,600 32 - Harrah's Entertainment, Inc. 3,700 106 Hertz Corp., Class A 1,200 39 Hilton Hotels Corp. 11,026 105 Host Marriott Corp. 6,300 67 -+ Intranet Solutions, Inc. 600 28 - Mandalay Resort Group 2,400 50 Marriott International, Inc., Class A 7,400 300 Meristar Hospitality Corp. 1,200 23 MGM Mirage, Inc. 4,700 162 - Navigant International, Inc. 1,300 13 - Park Place Entertainment Corp. 9,800 125 - Pinnacle Entertainment, Inc. 700 16 - Prime Hospitality Corp. 1,800 17 - Rent-Way, Inc. 700 4 - ResortQuest International, Inc. 1,900 12 Royal Caribbean Cruises Ltd. 5,400 122 - Sodexho Marriott Services, Inc. 1,700 31 - Speedway Motorsports, Inc. 1,000 17 - Station Casinos, Inc. 1,650 27 - Suburban Lodges of America 2,200 15 - Sunburst Hospitality Corp. 1,600 11 - Trendwest Resorts, Inc. 700 13 - Vail Resorts, Inc. 800 17 ------- 2,157 TRUCKING & FREIGHT 0.1% ------------------------------------------------------------------------- - American Freightways Corp. 1,000 16 - Arkansas Best Corp. 1,100 18 C.H. Robinson Worldwide, Inc. 1,200 66 CNF Transportation, Inc. 1,300 35 - Consolidated Freightways Corp. 2,200 9 Expeditores International of Washington, Inc. 1,500 78 - Forward Air Corp. 600 25 - Fritz Cos., Inc. 1,300 11 - Heartland Express, Inc. 1,000 17 - HUB Group, Inc., Class A 700 6 J.B. Hunt Transport Services, Inc. 1,000 13 - Knight Transportation, Inc. 800 13 - Landstar Systems, Inc. 400 19 - M.S. Carriers, Inc. 600 9 - OLD Dominion Freight Line 1,200 11 PACCAR, Inc. 2,400 101 Roadway Express, Inc. 600 12 Rollins Truck Leasing Corp. 1,500 8 Ryder Systems, Inc. 1,600 32 - Swift Transportation Co., Inc. 1,600 23 USFreightways Corp. 600 15 Wabash National Corp. 1,100 9 Werner Enterprises, Inc. 1,200 17 - XTRA Corp. 300 14 - Yellow Corp. 700 13 ------ 590
110 See the Financial Notes, which are integral to this information. 115
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) UTILITIES: ELECTRIC & GAS 3.2% ------------------------------------------------------------------------- - AES Corp. 13,400 757 AGL Resources, Inc. 1,200 24 Allegheny Energy, Inc. 3,900 160 Allete 1,700 37 Alliant Energy Corp. 2,300 70 Ameren Corp. 4,900 195 American Electric Power Co., Inc. 11,420 474 + American States Water Co. 500 16 American Water Works Co., Inc. 3,000 73 Atmos Energy Corp. 700 16 -+ Atrion Corp. 300 3 Avista Corp. 1,200 27 Bangor Hydro-Electric Co. 900 22 -+ Baycorp Holdings Ltd. 200 2 + Birmingham Utilities, Inc. 300 4 Black Hills Corp. 500 16 CP&L Energy, Inc. 4,761 192 California Water Service Group 500 13 - Calpine Corp. 4,000 316 + Cascade Natural Gas Corp. 500 9 + Central Vermont Public Service Corp. 300 3 CH Energy Group, Inc. 400 16 Cinergy Corp. 4,700 144 Cleco Corp. 600 29 CMS Energy Corp. 4,000 108 Coastal Corp. 6,700 505 Columbia Energy Group 2,500 180 Conectiv, Inc. 2,400 43 Connecticut Water Services, Inc. 500 15 Consolidated Edison, Inc. 6,100 215 Constellation Energy Group, Inc. 4,800 200 + Delta Natural Gas Co., Inc. 200 3 Dominion Resources, Inc. 8,098 482 DPL, Inc. 3,152 89 DQE, Inc. 2,400 84 DTE Energy Co. 4,200 152 Duke Energy Corp. 10,800 934 + Dynegy, Inc., Class A 9,162 424 E'Town Corp. 300 20 Edison International 10,400 248 - El Paso Electric Co. 1,600 19 El Paso Energy Corp. 7,400 464 Empire District Electric Co. 700 19 Energen Corp. 700 20 Energy East Corp. 4,694 95 + EnergyNorth, Inc. 200 12 EnergySouth, Inc. 800 17 Enron Corp. 21,800 1,789 Entergy Corp. 6,800 261 Equitable Resources, Inc. 900 52 FirstEnergy Corp. 7,100 184 Florida Progress Corp. 2,900 154 + Florida Public Utilities Co. 200 3 FPL Group, Inc. 6,000 396 GPU, Inc. 3,500 116 + Green Mountain Power Corp. 400 3 Hawaiian Electric Industries, Inc. 700 23 Idacorp, Inc. 1,000 49 Ipalco Enterprises, Inc. 2,000 45 Kansas City Power & Light Co. 1,600 39 KeySpan Corp. 4,000 141 Kinder Morgan, Inc. 4,000 154 Laclede Gas Co. 600 13 LG&E Energy Corp. 4,100 101 Madison Gas & Electric Co. 800 17 + Maine Public Service Co. 200 5 MCN Energy Group, Inc. 2,200 54 MDU Resources Group, Inc. 1,300 38 Montana Power Co. 3,900 110 National Fuel Gas Co. 1,200 64 New Jersey Resources Corp. 400 16 - Niagara Mohawk Holdings, Inc. 5,100 82 NICOR, Inc. 1,200 42 NiSource, Inc. 3,900 97 Northeast Utilities 4,624 94 Northwest Natural Gas Co. 700 16 Northwestern Corp. 1,400 31 NSTAR 1,667 64 + NUI Corp. 500 16 OGE Energy Corp. 2,000 41 ONEOK, Inc. 1,200 48
See the Financial Notes, which 111 are integral to this information. 116 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) Otter Tail Power Co. 600 13 Peoples Energy Corp. 1,700 58 PG&E Corp. 11,400 307 Philadelphia Suburban Corp. 1,000 23 Piedmont Natural Gas Co., Inc. 800 24 Pinnacle West Capital Corp. 3,600 156 Potomac Electric Power Co. 3,800 87 PPL Corp. 4,800 198 Public Service Co. of New Mexico 2,000 55 Public Service Enterprise Group, Inc. 6,400 266 Puget Sound Energy, Inc. 2,200 54 Questar Corp. 2,100 57 Reliant Energy, Inc. 9,200 380 - Republic Services, Inc. 5,100 69 RGS Energy Group, Inc. 700 21 Scana Corp. 3,405 90 Sempra Energy 5,775 119 Sierra Pacific Resources 1,776 31 SJW Corp. 100 12 South Jersey Industries 500 15 Southern Co. 19,100 561 - Southern Union Co. 1,076 20 Southwest Gas Corp. 700 15 + St. Joseph Light & Power 200 4 Teco Energy, Inc. 3,800 106 TXU Corp. 8,400 311 -+ U.S. Energy Systems, Inc. 600 3 UGI Corp. 700 16 UIL Holdings Corp. 500 23 Unisource Energy Corp. Holding Co. 900 13 UtiliCorp United, Inc. 2,600 69 Vectren Corp. 1,466 34 - Veritas DGC, Inc. 800 24 Washington Gas Light Co. 1,100 28 - Waste Connections, Inc. 1,000 26 Western Resources, Inc. 1,600 34 Williams Cos., Inc. 13,100 548 Wisconsin Energy Corp. 3,500 66 WPS Resources Corp. 700 23 ------ 15,283
OTHER INVESTMENT COMPANIES 1.0% of investments Provident Institutional TempFund 4,716,844 4,717
U.S. TREASURY OBLIGATIONS 0.0% of investments
SECURITY FACE VALUE MKT. VALUE RATE, MATURITY DATE ($ x 1,000) ($ x 1,000) # U.S. Treasury Bills 5.97%-6.02%, 12/14/00 245 243
- ------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. 112 See the Financial Notes, which are integral to this information. 117 Statement of ASSETS AND LIABILITIES As of October 31, 2000. All numbers x 1,000 except NAV.
ASSETS - -------------------------------------------------------------------------------- Investments, at market value $480,773 a Collateral held for securities on loan 95,765 b Receivables: Fund shares sold 991 Interest 25 Dividends 296 Investments sold 453 Income from lending securities 16 Most recent daily change in value of futures 71 Prepaid expenses + 23 ------------ TOTAL ASSETS 578,413 LIABILITIES - -------------------------------------------------------------------------------- Collateral held for securities on loan 95,765 b Payables: Fund shares redeemed 104 Investments bought 2,370 Investment adviser and administrator fees 7 Transfer agent and shareholder service fees 10 Accrued expenses + 205 ------------ TOTAL LIABILITIES 98,461 NET ASSETS - -------------------------------------------------------------------------------- TOTAL ASSETS 578,413 TOTAL LIABILITIES - 98,461 ------------ NET ASSETS $479,952 NET ASSETS BY SOURCE Capital received from investors 450,165 Net investment income not yet distributed 2,863 Net realized capital losses (3,419) Net unrealized capital gains 30,343 c
NET ASSET VALUE (NAV)
SHARES SHARE CLASS NET ASSETS / OUTSTANDING = NAV Investor Shares $217,580 9,676 $22.49 Select Shares(R) $262,372 11,650 $22.52
a The fund paid $450,223 for these securities. Not counting short-term obligations and government securities, the fund paid $184,047 for securities during the report period and received $9,394 from securities it sold or that matured. This includes $361 in transactions with other SchwabFunds(R). b Market value of securities loaned: $95,324. c These derive from investments and futures. As of the report date, the fund had seven open S&P 500 futures contracts due to expire on December 15, 2000, with a contract value of $2,520 and unrealized losses of $144 and three open Russell 2000 futures contracts due to expire on December 15, 2000, with a contract value of $751 and unrealized losses of $63.
FEDERAL TAX DATA - -------------------------------------------------------------------------------- COST BASIS OF PORTFOLIO $450,418 NET UNREALIZED GAINS AND LOSSES: Gains $96,021 Losses + (65,873) ----------- $30,148 UNUSED CAPITAL LOSSES: Expires 10/31 of: Loss amount 2007 $ 18 2008 3,413
See the Financial Notes, which are integral to this information. 113 118 SCHWAB TOTAL STOCK MARKET INDEX FUND(TM) -- FINANCIALS Statement of OPERATIONS For November 1, 1999 through October 31, 2000. All numbers x 1,000.
INVESTMENT INCOME - -------------------------------------------------------------------------------- Dividends $4,322 a Interest 292 Lending of securities + 178 ------------ TOTAL INVESTMENT INCOME 4,792 NET REALIZED GAINS AND LOSSES - -------------------------------------------------------------------------------- Net realized losses on investments sold (3,264) Net realized losses on futures contracts + (26) ------------ NET REALIZED LOSSES (3,290) NET UNREALIZED GAINS AND LOSSES - -------------------------------------------------------------------------------- Net unrealized gains on investments 22,064 Net unrealized losses on futures contracts + (305) ------------ NET UNREALIZED GAINS 21,759 EXPENSES - -------------------------------------------------------------------------------- Investment adviser and administrator fees 1,233 b Transfer agent and shareholder service fees: Investor Shares 473 c Select Shares(R) 222 c Trustees' fees 10 d Custodian fees 170 Portfolio accounting fees 70 Professional fees 11 Registration fees 87 Shareholder reports 67 Proxy fees 33 Offering costs 23 Other expenses + 32 ------------ Total expenses 2,431 Expense reduction - 1,042 e ------------ NET EXPENSES 1,389 INCREASE IN NET ASSETS FROM OPERATIONS - -------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 4,792 NET EXPENSES - 1,389 ------------ NET INVESTMENT INCOME 3,403 NET REALIZED LOSSES (3,290) f NET UNREALIZED GAINS + 21,759 f ------------ INCREASE IN NET ASSETS FROM OPERATIONS $21,872
a An additional $1 was withheld for foreign taxes. b Calculated as a percentage of average daily net assets: 0.30% of the first $500 million and 0.22% of assets beyond that. c Calculated as a percentage of average daily net assets: for transfer agent services, 0.05% of the fund's assets; for shareholder services, 0.20%, and 0.05% of the assets of each respective share class. d For the fund's independent trustees only. e Includes $940 from the investment adviser (CSIM) and $102 from the transfer agent and shareholder service agent (Schwab). These reductions reflect a guarantee by CSIM and Schwab to limit the operating expenses of this fund through at least February 28, 2001, as follows:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS - -------------------------------------------------------------------------------- Investor Shares 0.40 Select Shares 0.27
This limit does not include interest, taxes and certain non-routine expenses. f These add up to a net gain on investments of $18,469. 114 See the Financial Notes, which are integral to this information. 119 Statements of CHANGES IN NET ASSETS For the current and prior report periods. The fund commenced operations on June 1, 1999. All numbers x 1,000.
OPERATIONS - -------------------------------------------------------------------------------- 11/1/99-10/31/00 6/1/99-10/31/99 Net investment income $3,403 $940 Net realized losses (3,290) (129) Net unrealized gains + 21,759 8,584 --------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 21,872 9,395 DISTRIBUTIONS PAID - -------------------------------------------------------------------------------- DIVIDENDS FROM NET INVESTMENT INCOME Investor Shares 667 -- Select Shares(R) + 813 -- --------------------------------- TOTAL DIVIDENDS FROM NET INVESTMENT INCOME $1,480 $ -- a
TRANSACTIONS IN FUND SHARES - -------------------------------------------------------------------------------- 11/1/99-10/31/00 6/1/99-10/31/99 QUANTITY VALUE QUANTITY VALUE Shares sold: Investor Shares 5,815 $131,597 7,071 $142,518 Select Shares + 7,421 168,810 7,558 152,779 --------------------------------------------- TOTAL SHARES SOLD 13,236 $300,407 14,629 $295,297 Shares reinvested: Investor Shares 28 $634 -- $ -- Select Shares + 33 735 -- -- --------------------------------------------- TOTAL SHARES REINVESTED 61 $1,369 -- $ -- Shares redeemed: Investor Shares 2,669 $60,481 569 $11,468 Select Shares + 2,944 66,585 418 8,374 --------------------------------------------- TOTAL SHARES REDEEMED 5,613 $127,066 987 $19,842 b NET INCREASE 7,684 $174,710 13,642 $275,455 c
SHARES OUTSTANDING AND NET ASSETS - -------------------------------------------------------------------------------- 11/1/99-10/31/00 6/1/99-10/31/99 SHARES NET ASSETS SHARES NET ASSETS Beginning of period 13,642 $284,850 -- $ -- Total increase + 7,684 195,102 13,642 284,850 d --------------------------------------------- END OF PERIOD 21,326 $479,952 13,642 $284,850 e
UNAUDITED a For corporations, 100% of the fund's dividends for the report period qualify for the dividends-received deduction. b Dollar amounts are net of proceeds received from early withdrawal fees that the fund charges on shares sold 180 days or less after buying them:
CURRENT PERIOD Investor Shares $90 Select Shares + 108 ----------- Total $198 PRIOR PERIOD Investor Shares $39 Select Shares + 40 ----------- Total $79
c Represents shares sold plus shares reinvested, minus shares redeemed. d Figures for shares represent the net changes in shares from the transactions described above. Figures for net assets represent the changes in net assets from operations plus the value of transactions in fund shares, minus distributions paid. Includes net investment income not yet distributed in the amount of $2,863 for the current period and $940 for the prior period. See the Financial Notes, which 115 are integral to this information. 120 SCHWAB INTERNATIONAL INDEX FUND(R) [PHOTO OF GERI HOM] " The fund's exposure to the stock markets of Japan and the United Kingdom-- both of which have been struggling--contributed to the fund's lackluster performance during the report period." Portfolio Manager Geri Hom GERI HOM, a vice president of the investment adviser, has overall responsibility for the management of the fund. Prior to joining the firm in 1995, she worked for nearly 15 years in equity index management. TICKER SYMBOLS INVESTOR SHARES SWINX SELECT SHARES(R) SWISX - -------------------------------------------------------------------------------- [INVESTMENT STYLE 1 AND MARKET CAP 1 GRAPHIC] VALUE BLEND GROWTH X LARGE MEDIUM SMALL
For long-term investors who are interested in the potential rewards of international investing and who are prepared for the additional risks, this fund could be worth considering. - -------------------------------------------------------------------------------- THE FUND'S GOAL IS TO TRACK THE TOTAL RETURN OF THE SCHWAB INTERNATIONAL INDEX.(R) MANAGER'S PERSPECTIVE LIKE THE U.S. STOCK MARKET, INTERNATIONAL STOCK MARKETS EXPERIENCED NOTABLE VOLATILITY DURING THE REPORT PERIOD. Developed and emerging markets alike posted generally lackluster results, with emerging markets suffering the most volatility along the way. Much of this weakness can be traced to concerns abroad that an economic slowdown in the United States could reduce demand in that country for imported goods. IN EUROPE, INVESTOR ANXIETY OVER HIGH PRICES INCREASED as the U.S. dollar strengthened against local currencies. Although a strong dollar helps foreign companies who sell to U.S. customers, it can put inflationary pressure on foreign economies by increasing the cost of goods they import. Soaring oil prices only added to that pressure. JAPAN'S ECONOMY SHOWED SIGNS OF RENEWED VITALITY, with reduced unemployment and slight increases in real GDP and consumption. Concerns persist, however, as these increases largely reflect spending by the government and not the private sector, and corporate debt continues to rise. FOR THE REPORT PERIOD, BOTH SHARE CLASSES TRACKED THE FUND'S UNMANAGED BENCHMARK INDEX, THE SCHWAB INTERNATIONAL INDEX. However, both the fund and its benchmark slightly trailed the MSCI-EAFE(R) Index, which had less exposure to underperformers Japan and the UK. 1 Source: Morningstar, Inc. This style assessment is the result of comparing the fund with the S&P 500(R) Index, based on P/E, P/B and median market cap. The assessment reflects the fund's portfolio as of 10/31/00, which may have changed since then, and is not a precise indication of risk or performance-- past, present or future. 116 121 PERFORMANCE: INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS as of 10/31/00 This chart compares performance of the fund's Investor Shares with the Schwab International Index(R) and the Morningstar Foreign Stock Fund category. [BAR CHART]
1 YEAR 5 YEARS SINCE INCEPTION: 9/9/93 -------------------------- ---------------------- ------------------------ (0.45%) (0.56%) (0.58%) ------------------ -------------- ---------------- Total Return 2 (3.69%) (3.24%) 4.20% 1 10.17% 10.73% 10.30% 8.88% 9.46% n/a % of Return Lost to Taxes 8.40% -- 41.43% 1 4.52% -- 15.44% n/a -- n/a AFTER-TAX RETURN 2 (4.00%) -- 2.46% 1 9.71% -- 8.71% n/a -- n/a
PERFORMANCE OF A $10,000 INVESTMENT Shows performance since inception of a hypothetical $10,000 investment in the fund's Investor Shares, compared to a similar investment in two indices: the Schwab International Index and the MSCI-EAFE(R) Index. [LINE GRAPH]
INVESTOR SHARES SCHWAB INTERNATIONAL INDEX MSCI EAFE ND INDEX 9/9/93 10000 10000 10000 9/30/93 9770 9786 9749 10/31/93 10150 10167 10049 11/30/93 9420 9454 9171 12/31/93 10096 10137 9833 1/31/94 10769 10823 10664 2/28/94 10558 10623 10634 3/31/94 10156 10172 10176 4/30/94 10458 10544 10607 5/31/94 10407 10448 10547 6/30/94 10488 10508 10696 7/31/94 10649 10692 10798 8/31/94 10941 10999 11054 9/30/94 10559 10621 10706 10/31/94 10950 11026 11062 11/30/94 10428 10478 10530 12/31/94 10484 10564 10597 1/31/95 10108 10254 10190 2/28/95 10189 10282 10160 3/31/95 10759 10964 10794 4/30/95 11145 11346 11200 5/31/95 11176 11303 11067 6/30/95 11064 11168 10873 7/31/95 11623 11826 11550 8/31/95 11237 11384 11110 9/30/95 11470 11661 11327 10/31/95 11318 11461 11022 11/30/95 11562 11782 11329 12/31/95 11975 12238 11785 1/31/96 12006 12277 11834 2/29/96 12026 12300 11874 3/31/96 12232 12529 12126 4/30/96 12530 12826 12478 5/31/96 12396 12674 12249 6/30/96 12489 12761 12317 7/31/96 12139 12430 11958 8/31/96 12253 12538 11984 9/30/96 12592 12907 12303 10/31/96 12571 12863 12177 11/30/96 13136 13460 12662 12/31/96 13067 13341 12499 1/31/97 12640 12898 12061 2/28/97 12827 13114 12259 3/31/97 12932 13202 12303 4/30/97 13025 13344 12368 5/31/97 13984 14324 13174 6/30/97 14766 15160 13899 7/31/97 15214 15570 14125 8/31/97 14109 14447 13070 9/30/97 15078 15354 13801 10/31/97 13869 14110 12740 11/30/97 13859 14055 12610 12/31/97 14022 14254 12720 1/31/98 14538 14830 13301 2/28/98 15382 15727 14155 3/31/98 15782 16139 14591 4/30/98 15888 16248 14706 5/31/98 15888 16209 14634 6/30/98 16025 16315 14745 7/31/98 16067 16419 14894 8/31/98 14085 14350 13049 9/30/98 13632 13880 12648 10/31/98 14981 15335 13966 11/30/98 15751 16198 14681 12/31/98 16244 16729 15261 1/31/99 16190 16640 15216 2/28/99 15829 16311 14853 3/31/99 16541 17060 15473 4/30/99 17212 17794 16099 5/31/99 16371 16897 15270 6/30/99 16999 17586 15866 7/31/99 17616 18240 16337 8/31/99 17775 18410 16398 9/30/99 18105 18724 16563 10/31/99 19073 19722 17184 11/30/99 19945 20579 17781 12/31/99 21704 22386 19377 1/31/00 19999 20761 18147 2/29/00 20278 21097 18635 3/31/00 21457 22294 19358 4/30/00 20299 21089 18340 5/31/00 19720 20470 17892 6/30/00 20460 21234 18592 7/31/00 19667 20411 17813 8/31/00 20021 20770 17967 9/30/00 18980 19696 17092 10/31/00 18369 19083 16689
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made--currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 732 funds in the Foreign Stock Fund category that had track records of at least one year and 305 funds with track records of at least five years. These funds may or may not use tax-efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 117 122 Schwab International Index Fund(R) PERFORMANCE: SELECT SHARES(R) AVERAGE ANNUAL TOTAL RETURNS as of 10/31/00 This chart compares performance of the fund's Select Shares with the Schwab International Index(R) and the Morningstar Foreign Stock Fund category. [BAR CHART]
1 YEAR SINCE INCEPTION: 5/19/97 ------------------------- ------------------------ (0.41%) (0.80%) ----------------- ---------------- Total Return 2 (3.65%) (3.24%) 4.20% 7.95% 8.75% n/a % of Return Lost to Taxes 9.86% -- 41.43% n/a -- n/a AFTER-TAX RETURN 2 (4.01%) -- 2.46% n/a -- n/a
PERFORMANCE OF A $50,000 INVESTMENT Shows performance since inception of a hypothetical $50,000 investment in the fund's Select Shares, compared to a similar investment in two indices: the Schwab International Index and the MSCI-EAFE(R) Index. [LINE GRAPH]
SELECT SHARES SCHWAB INTERNATIONAL INDEX MSCI EAFE ND INDEX 5/19/97 50000 50000 50000 5/31/97 49375 49283 49248 6/30/97 52170 52161 51961 7/31/97 53755 53571 52803 8/31/97 49815 49706 48859 9/30/97 53240 52827 51595 10/31/97 49005 48550 47627 11/30/97 48970 48360 47141 12/31/97 49580 49042 47551 1/31/98 51405 51027 49725 2/28/98 54385 54111 52917 3/31/98 55800 55529 54547 4/30/98 56175 55905 54978 5/31/98 56175 55770 54708 6/30/98 56655 56133 55124 7/31/98 56845 56493 55681 8/31/98 49840 49376 48782 9/30/98 48240 47757 47284 10/31/98 53005 52763 52211 11/30/98 55725 55732 54885 12/31/98 57490 57561 57053 1/31/99 57305 57252 56881 2/28/99 56025 56122 55528 3/31/99 58585 58699 57843 4/30/99 60955 61225 60186 5/31/99 57980 58137 57086 6/30/99 60200 60507 59313 7/31/99 62385 62757 61074 8/31/99 62950 63342 61300 9/30/99 64115 64425 61919 10/31/99 67575 67857 64241 11/30/99 70660 70806 66470 12/31/99 76920 77025 72439 1/31/00 70880 71433 67839 2/29/00 71870 72588 69664 3/31/00 76050 76708 72367 4/30/00 71905 72561 68561 5/31/00 69895 70431 66888 6/30/00 72515 73058 69503 7/31/00 69740 70228 66591 8/31/00 70995 71462 67169 9/30/00 67310 67769 63898 10/31/00 65110 65658 62390
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. The indices are unmanaged, and you cannot invest in them directly. When you sell your shares, they may be worth more or less than what you paid for them. Past performance doesn't indicate future results. The after-tax returns reflect several assumptions: - - federal income tax was deducted from distributions before reinvestment - - the tax rates used were the highest in effect at the time the distribution was made--currently 39.6% on dividends and short-term capital gains and 20.0% on long-term capital gains - - no allowance was made for the effects of any state or local taxes, or of any shareholder activities (such as selling fund shares) Your own tax rates may be different. Keep in mind that after-tax returns aren't a factor for shares held in tax-deferred accounts such as an IRA or 401(k). 1 Source: Morningstar, Inc. As of 10/31/00, there were 732 funds in the Foreign Stock Fund category that had track records of at least one year and 305 funds with track records of at least five years. These funds may or may not use tax-efficient strategies. 2 Fund returns reflect expense reductions by the fund's investment adviser (CSIM) and Schwab. Without these reductions, the fund's returns would have been lower. After-tax return data is provided by Morningstar, Inc. 118 123 FUND FACTS
TOP TEN HOLDINGS 1 as of 10/31/00 1 VODAFONE GROUP PLC 3.0% 2 NTT DOCOMO, INC. 2.8% 3 BP AMOCO PLC 2.3% 4 TOYOTA MOTOR CORP. 1.8% 5 NORTEL NETWORKS CORP. 1.6% 6 ROYAL DUTCH PETROLEUM CO. 1.5% 7 HSBC HOLDINGS PLC 1.4% 8 NIPPON TELEGRAPH & TELEPHONE CORP. 1.4% 9 DEUTSCHE TELEKOM AG 1.3% 10 NOVARTIS AG, REGISTERED 1.3% ---- TOTAL PERCENTAGE OF INVESTMENTS 18.4%
STATISTICS as of 10/31/00
PEER GROUP FUND AVERAGE 2 Number of Holdings 357 166 - ------------------------------------------------- Median Market Cap ($ Mil) $41,530 $22,343 - ------------------------------------------------- Price/Earnings (P/E) Ratio 33.5 34.1 - ------------------------------------------------- Price/Book (P/B) Ratio 5.9 6.4 - ------------------------------------------------- 12-Month Yield Investor Shares 0.90% 0.77% - ------------------------------------------------- Portfolio Turnover Rate 16% 92% - ------------------------------------------------- Three-Year Beta 0.75 0.72 - -------------------------------------------------
EXPENSE RATIO as of 10/31/00 [BAR CHART] INVESTOR SHARES 0.58% 3 SELECT SHARES(R) 0.47% 3 PEER GROUP AVERAGE 1.69% 2
1 This list is not a recommendation of any security by the investment adviser. Portfolio holdings may have changed since the report date. 2 Source: Morningstar, Inc. As of 10/31/00, there were 732 funds in the Foreign Stock Fund category. 3 Guaranteed by Schwab and the investment adviser through 2/28/01. The actual expense ratio during the report period was 0.01% higher due to certain non-routine expenses. 4 Source: Charles Schwab & Co., Inc. PERFORMANCE AND WEIGHTINGS OF INDEX COUNTRIES 4 The bar chart shows how the countries in the Schwab International Index(R) performed during the report period. The pie chart shows the size (by stock market capitalization) of each of the countries in the index. The index counts each country's performance in proportion to its size. [BAR CHART]
INDEX PERFORMANCE 11/1/99 - 10/31/00 Canada 37.9 Italy 15.6 Sweden 10.8 Australia 7.9 France 5.5 Denmark 3.4 Hong Kong 2.6 Netherlands 1.1 Germany 0.8 Spain -0.3 Schwab International Index -3.2 United Kingdom -6.1 Switzerland -6.5 Japan -13.8 Belgium -17.4
INDEX COMPOSITION AS OF 10/31/00 [PIE CHART] 1 31.9% Japan 2 22.5% United Kingdom 3 8.6% France 4 8.1% Germany 5 6.2% Switzerland 6 6.0% Netherlands 7 3.6% Canada 8 3.5% Italy 9 2.6% Spain 10 2.3% Sweden 11 1.8% Hong Kong 12 1.6% Australia 13 0.9% Belgium 14 0.6% Denmark
119 124 SCHWAB INTERNATIONAL INDEX FUND(R) -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. THE FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
11/1/99 - 11/1/98 - 11/1/97 - 11/1/96 - 11/1/95 - INVESTOR SHARES 10/31/00 10/31/99 10/31/98 10/31/97 10/31/96 PER-SHARE DATA ($) - ------------------------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 17.93 14.21 13.31 12.23 11.13 ----- ----- ----- ----- ----- Income from investment operations: Net investment income 0.20 0.19 0.17 0.17 0.16 Net realized and unrealized gains or losses (0.85) 3.66 0.88 1.08 1.07 ----- ----- ----- ----- ----- Total income or loss from investment operations (0.65) 3.85 1.05 1.25 1.23 Less distributions: Dividends from net investment income (0.15) (0.13) (0.15) (0.17) (0.13) ----- ----- ----- ----- ----- Net asset value at end of period 17.13 17.93 14.21 13.31 12.23 ===== ===== ===== ===== ===== Total return (%) (3.69) 27.31 8.02 10.33 11.07 RATIOS/SUPPLEMENTAL DATA (%) - ------------------------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.58 1 0.58 0.58 0.61 0.69 Expense reductions reflected in above ratio 0.23 0.41 0.46 0.52 0.48 Ratio of net investment income to average net assets 1.60 1.24 1.35 1.36 1.50 Portfolio turnover rate 16 5 6 13 6 Net assets, end of period ($ x 1,000,000) 637 447 428 318 247
1 Would have been 0.59% if certain non-routine expenses (proxy fees) had been included. 120 See the Financial Notes, which are integral to this information. 125
11/1/99 - 11/1/98 - 11/1/97 - 5/19/97 1 - SELECT SHARES(R) 10/31/00 10/31/99 10/31/98 10/31/97 PER-SHARE DATA ($) - ------------------------------------------------------------------------------------------------------------------------ Net asset value at beginning of period 17.96 14.23 13.32 13.59 ----- ----- ----- ----- Income from investment operations: Net investment income 0.27 0.18 0.22 0.04 Net realized and unrealized gains or losses (0.91) 3.70 0.85 (0.31) ----- ----- ----- ----- Total income or loss from investment operations (0.64) 3.88 1.07 (0.27) Less distributions: Dividends from net investment income (0.18) (0.15) (0.16) -- ----- ----- ----- ----- Net asset value at end of period 17.14 17.96 14.23 13.32 ===== ===== ===== ===== Total return (%) (3.65) 27.49 8.16 (1.99) 2 RATIOS/SUPPLEMENTAL DATA (%) - ------------------------------------------------------------------------------------------------------------------------ Ratio of net operating expenses to average net assets 0.47 4 0.47 0.47 0.47 3 Expense reductions reflected in above ratio 0.19 0.39 0.48 0.80 3 Ratio of net investment income to average net assets 1.71 1.57 1.49 0.17 3 Portfolio turnover rate 16 5 6 13 Net assets, end of period ($ x 1,000,000) 700 449 94 50
1 Commencement of operations. 2 Not annualized. 3 Annualized. 4 Would have been 0.48% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which 121 are integral to this information. 126 SCHWAB INTERNATIONAL INDEX FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS As of October 31, 2000 This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics. With the top ten holdings, the number in the circle is the security's rank among the top ten. (1) Top ten holding + New holding (since 10/31/99) - Non-income producing security The pie chart below shows the fund's major asset categories and the market value and cost of the securities in each category. ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 99.6% COMMON STOCK Market Value: $1,328,889 Cost: $1,166,256 0.4% SHORT TERM INVESTMENTS Market Value: $5,605 Cost: $5,605 - ---------------------------------- 100.0% TOTAL INVESTMENTS Market Value: $1,334,494 Cost: $1,171,864
FOREIGN COMMON STOCK 99.6% of investments
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) AUSTRALIA 1.4% ---------------------------------------------------------------------------------------- AMP Ltd. 179,976 1,622 Australia & New Zealand Banking Group Ltd. 229,702 1,696 Broken Hill Proprietary Co. Ltd. 272,306 2,639 - Cable and Wireless Optus Ltd. 526,166 1,114 Commonwealth Bank of Australia 195,707 2,912 National Australia Bank 236,597 3,286 News Corp. Ltd. 339,732 3,553 - OneSteel Ltd. 68,077 32 Westpac Banking Corp. 306,830 2,095 ------ 18,949 BELGIUM 0.5% ---------------------------------------------------------------------------------------- Almanij NV 27,381 1,015 Electrabel SA 8,797 1,908 - Fortis (B) 116,150 3,554 ------ 6,477 CANADA 4.2% ---------------------------------------------------------------------------------------- Alcan Aluminum Ltd. 37,466 1,179 + Ballard Power Systems, Inc. 12,600 1,353 Bank of Montreal 37,377 1,725 Bank of Nova Scotia 80,094 2,281 Barrick Gold Corp. 86,591 1,148 BCE, Inc. 97,164 2,608 BCT Telus Communications, Inc. 26,400 674 Bombardier, Inc., Class B 226,100 3,546 Canadian Imperial Bank of Commerce 54,445 1,725 Canadian Pacific Ltd. 50,624 1,467 -+ Celestica, Inc. 33,400 2,379 Imperial Oil Ltd. 63,322 1,596 Loblaw Co. Ltd. 38,800 1,326 +(5) Nortel Networks Corp. 468,134 21,180 + Power Financial Corp. 69,400 1,459 Royal Bank of Canada 87,772 2,776 Seagram Co. Ltd. 67,990 3,891 + Shell Canada Ltd. 52,100 1,192 Toronto-Dominion Bank 96,856 2,660 ------- 56,165 DENMARK 0.5% ---------------------------------------------------------------------------------------- D/S 1912, Series B 172 1,645 Dampskibsselkabet Svendborg, Series B 111 1,466 Novo-Nordisk A/S, Series B 10,672 2,261 Tele Danmark A/S 32,861 1,553 ------- 6,925 FRANCE 11.8% ---------------------------------------------------------------------------------------- Accor SA 27,663 1,118 Air Liquide SA 14,016 1,655 Alcatel SA 178,073 10,852 + Altran Technologies SA 4,850 990 Aventis SA 121,475 8,752 Axa 61,011 8,067 BNP Paribas 72,921 6,280
122 See the Financial Notes, which are integral to this information. 127
Mkt. Value Security and Number of Shares ($ x 1,000) Bouygues 55,335 2,814 Canal Plus 18,684 2,700 Cap Gemini SA 19,279 3,072 Carrefour Supermarche SA 111,232 7,458 Castorama Dubois Investissements SA 5,864 1,191 Compagnie de Saint-Gobain SA 13,719 1,813 Credit Lyonnais SA 47,339 1,617 + Dassault Systemes SA 17,174 1,308 Establissements Economiques du Casino Guichard Perrachon SA 10,894 950 + European Aeronautic Defense & Space Co. 117,744 2,395 + France Telecom SA 161,321 16,846 Groupe Danone 21,924 3,062 L'Oreal 110,659 8,442 Lafarge SA 18,043 1,331 + Lagardere S.C.A. 23,390 1,326 LVMH Moet-Hennessy Vuitton 76,948 5,609 Pinault-Printemps-Redoute SA 19,854 3,539 PSA Peugeot Citroen 6,683 1,229 + Renault SA 36,047 1,790 + Sagem SA 5,698 1,043 Sanofi-Synthelabo SA 121,626 6,392 Schneider Electric SA 25,234 1,642 Societe Generale, Class A 69,238 3,926 Societe Television Francaise 1 30,120 1,642 STMicroelectronics NV 138,356 6,972 Suez Lyonnaise des Eaux SA 31,657 4,824 + Thomson CSF 26,590 1,192 Total Fina Elf SA 116,263 16,615 Vivendi SA 96,790 6,949 ------- 157,403 GERMANY 7.8% - ------------------------------------------------------------------------------------------------- BASF AG 105,779 4,142 Bayer AG 118,963 5,158 Bayerische Hypo-und Vereinsbank AG 65,411 3,590 Bayerische Motoren Werke AG 106,314 3,516 + Beiersdorf AG 13,000 1,278 Commerzbank AG 75,889 2,139 DaimlerChrysler AG 155,133 7,140 Deutsche Bank AG 94,565 7,733 Deutsche Lufthansa AG 63,568 1,255 +(9) Deutsche Telekom AG 477,600 17,913 Dresdner Bank AG 79,248 3,298 E.ON AG 132,993 6,750 - -+ EM.TV & Merchandising AG 37,500 1,128 Ergo Versicherungsgruppe AG 10,500 1,451 + Fresenius Medical Care AG 14,400 1,145 + Henkel Kgaa 16,600 865 Metro AG 43,648 1,757 Muenchener Rueckversicher AG 27,256 8,559 RWE AG 74,301 2,976 SAP AG 28,400 4,643 Schering AG 28,146 1,575 Siemens AG 93,195 11,853 ThyssenKrupp AG 78,370 1,116 Volkswagen AG 49,820 2,486 ------- 103,466 HONG KONG / CHINA 2.0% - ------------------------------------------------------------------------------------------------- Cheung Kong Holdings 355,000 3,926 CLP Holdings Ltd. 293,900 1,372 Hang Seng Bank Ltd. 301,700 3,549 Henderson Land Development Co. 282,000 1,215 Hong Kong Electric Holdings Ltd. 341,756 1,128 Hutchison Whampoa Ltd. 664,800 8,247 Johnson Electric Holdings 540,000 1,073 - -+ Pacific Century CyberWorks Ltd. 2,710,978 2,086 Sun Hung Kai Properties Ltd. 337,694 2,793 Swire Pacific Ltd., Class A 246,500 1,520 ------- 26,909 ITALY 4.8% - ------------------------------------------------------------------------------------------------- - -+ AEM SPA 297,187 982 + Alleanza Assicurazioni SPA 112,662 1,493 + Alleanza Assicurazioni SPA -- RNC 76,755 590 Assicurazioni Generali 192,362 6,318 Autostrade Concessioni e Costruzioni Autostrade SPA 160,539 932 Banca Commerciale Italiana SPA 213,676 1,255 + Banca Fideuram SPA 133,688 2,053
See the Financial Notes, which 123 are integral to this information. 128 SCHWAB INTERNATIONAL INDEX FUND(R) -- FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
Mkt. Value Security and Number of Shares ($ x 1,000) Banca Intesa SPA 686,260 2,844 Banca Intesa SPA -- RNC 307,838 744 + Banca Monte dei Paschi di Siena SPA 328,813 1,364 + Banca Nazionale Del Lavoro SPA 332,898 1,078 - -+ Bipop-Carire SPA 259,134 2,047 Ente Nazionale Idrocarburi SPA 1,220,290 6,599 Fiat SPA 58,110 1,350 Fiat SPA -- RNC 40,452 529 + Finmeccanica SPA 1,111,161 1,272 Mediaset SPA 177,519 2,565 Olivetti SPA 708,459 2,144 + Riunione Adriatica di Sicurta SPA 133,886 1,756 + Rolo Banca 1473 SPa 65,393 1,214 + Seat-Pagine Gialle SPa 701,558 1,909 Telecom Italia SPa 568,694 6,580 Telecom Italia SPA -- RNc 265,037 1,440 TIM SPa 1,042,021 8,850 TIM SPA -- RNc 223,802 1,186 + Tiscali SPa 36,045 1,137 Unicredito Italiano SPa 742,035 3,774 ------- 64,005 JAPAN 26.9% - ------------------------------------------------------------------------------------------------- Advantest Corp. 15,700 2,046 Ajinomoto Co., Inc. 137,000 1,531 The Asahi Bank Ltd. 408,000 1,607 Asahi Chemical Industry Co. Ltd. 206,000 1,275 Asahi Glass Co. Ltd. 191,000 1,959 The Bank of Tokyo-Mitsubishi Ltd. 723,500 8,674 + Benesse Corp. 17,000 934 Bridgestone Corp. 124,000 1,229 Canon, Inc. 134,000 5,314 Central Japan Railway Co. 362 2,205 Chubu Electric Power Co., Inc. 107,100 1,766 DAI Nippon Printing Co. Ltd. 125,000 1,958 Daiwa Securities Group, Inc. 213,000 2,358 DDI Corp. 464 2,177 Denso Corp. 144,000 3,284 East Japan Railway Co. 375 2,153 + Eisai Co. Ltd. 48,000 1,477 Fanuc 37,100 3,330 Fuji Photo Film Co. Ltd. 87,000 3,227 + Fuji Television Network, Inc. 100 1,099 + Fujisawa Pharmaceutical Co. Ltd. 50,000 1,571 Fujitsu Ltd. 305,000 5,430 + Furukawa Electric Co. Ltd. 101,000 2,655 Hitachi Ltd. 520,000 5,572 Honda Motor Co. Ltd. 152,000 5,248 Hoya Corp. 16,000 1,322 Ito-Yokado Co. Ltd. 68,000 3,070 Japan Telecom Co. Ltd. 100 2,015 Japan Tobacco, Inc. 301 2,068 Kansai Electric Power Co. 144,300 2,362 KAO Corp. 108,000 3,234 Keyence Corp. 6,300 1,956 Kinki Nippon Railway Co. Ltd. 360,830 1,563 Kirin Brewery Co. Ltd. 168,000 1,751 Kyocera Corp. 29,000 3,771 + Marui Co. Ltd. 66,000 973 Matsushita Communications Industrial Co. Ltd. 29,000 3,798 Matsushita Electric Industrial Co. Ltd. 330,000 9,581 Matsushita Electric Works 139,000 1,636 Mitsubishi Chemical Corp. 434,000 1,371 Mitsubishi Corp. 286,000 2,357 Mitsubishi Electric Corp. 372,000 2,671 Mitsubishi Estate Co. Ltd. 189,000 2,008 Mitsubishi Heavy Industries Ltd. 510,000 1,980 Mitsubishi Trust & Banking Corp. 190,000 1,540 Mitsui & Co. Ltd. 246,000 1,633 + Mitsui Fudosan Co. Ltd. 115,000 1,392 - -+ Mizuho Holdings, Inc. 1,457 11,195 Murata Manufacturing Co. Ltd. 37,000 4,426 NEC Corp. 251,000 4,781 The Nikko Securities Co. Ltd. 288,000 2,485 + Nikon Corp. 50,000 726 Nintendo Co. Ltd. 22,600 3,736 Nippon Steel Corp. 995,000 1,613 (8) Nippon Telegraph & Telephone Corp. 1,992 18,116 + Nippon Television Network 4,000 2,253
124 See the Financial Notes, which are integral to this information. 129
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) - - Nissan Motor Co. Ltd. 643,000 4,411 + Nitto Denko Corp. 34,000 1,149 Nomura Securities Co. Ltd. 306,000 6,488 + NTT Data Corp. 432 3,363 (2) NTT DoCoMo, Inc. 1,517 37,373 + OJI Paper Co. Ltd. 165,000 960 + Omron Corp. 53,000 1,306 + Oriental Land Co. Ltd. 17,000 1,028 Osaka Gas Co. Ltd. 392,000 966 Ricoh Co. Ltd. 97,000 1,492 Rohm Co. Ltd. 18,000 4,535 Sakura Bank Ltd. 638,000 4,645 Sankyo Co. Ltd. 62,000 1,366 The Sanwa Bank Ltd. 463,000 4,113 Sanyo Electric Co. Ltd. 281,000 2,136 Secom Co. Ltd. 34,000 2,423 Sekisui House Ltd. 120,000 1,268 Seven-Eleven Japan Co. 131,000 8,518 Sharp Corp. 165,000 2,100 Shin-Etsu Chemical Co. 65,700 2,696 The Shizuoka Bank Ltd. 176,000 1,597 SMC Corp. 10,000 1,414 Softbank Corp. 54,000 3,239 Sony Corp. 138,400 11,053 The Sumitomo Bank Ltd. 522,000 6,334 Sumitomo Chemical Co. Ltd. 302,000 1,488 Sumitomo Corp. 174,000 1,530 Sumitomo Electric Industries Ltd. 131,000 2,417 Sumitomo Trust & Banking Co. Ltd. 220,000 1,692 Taisho Pharmaceutical Co. Ltd. 51,000 1,467 Taiyo Yuden Co. Ltd. 25,000 955 Takeda Chemical Industries Ltd. 145,000 9,548 TDK Corp. 22,000 2,216 Terumo Corp. 44,000 1,245 The Tokai Bank Ltd. 385,000 2,063 Tokio Marine & Fire Insurance Co. 229,000 2,529 Tokyo Broadcasting System 26,000 1,017 Tokyo Electric Power Co., Inc. 206,700 5,017 Tokyo Electronics Ltd. 28,000 2,190 Tokyo Gas Co. Ltd. 471,000 1,229 Toppan Printing Co. Ltd. 152,000 1,342 Toshiba Corp. 482,000 3,443 (4) Toyota Motor Corp. 588,000 23,479 West Japan Railway Co. 273 1,120 Yamanouchi Pharmaceutical Co. Ltd. 52,000 2,353 Yamato Transport Co. Ltd. 78,000 1,575 ------- 359,350 NETHERLANDS 5.9% ----------------- ABN-AMRO Holdings NV 239,217 5,535 Aegon NV 209,586 8,314 Akzo Nobel NV 43,972 2,000 - - ASM Lithography Holding NV 63,272 1,727 - -+ Equant NV 35,326 1,181 - - Fortis (NL) NV 77,095 2,352 + Heineken NV 50,834 2,758 ING Groep NV 149,477 10,252 Koninklijke Ahold NV 110,848 3,216 Koninklijke Philips Electronics NV 202,862 7,963 (6) Royal Dutch Petroleum Co. 343,316 20,338 Royal KPN NV 141,497 2,863 TNT Post Group NV 74,422 1,574 Unilever NV-CVA 90,046 4,511 - -+ United Pan-Europe Communications NV Class A 64,336 1,126 VNU NV 35,955 1,691 Wolters Kluwer NV-CVA 65,554 1,474 ------- 78,875 SPAIN 2.7% ----------- Banco Bilbao Vizcaya Argentaria SA 506,368 6,738 Banco Popular Espanol 34,068 1,018 Banco Santander Central Hispano SA 654,981 6,340 Endesa SA 155,665 2,533 Gas Natural SDG SA 78,688 1,347 - - Iberdrola SA 137,409 1,678 Repsol YPF SA 195,798 3,107 - - Telefonica SA 655,930 12,493 ------- 35,254
See the Financial Notes, which 125 are integral to this information. 130 SCHWAB INTERNATIONAL INDEX FUND(R) - FINANCIALS PORTFOLIO HOLDINGS Continued As of October 31, 2000
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ x 1,000) SWEDEN 2.5% ------------ + Europolitan Holdings AB 92,307 829 Foreningssparbaken AB 80,166 1,148 Hennes & Mauritz AB, Series B 127,045 2,371 - -+ NetCom AB, Class B 16,371 766 Nordic Baltic Holding AB 430,385 3,221 + Securitas AB, Class B 55,925 1,189 Skandia Forsakrings AB 161,720 2,736 Skandinaviska Enskilda Banken, Series A 107,724 1,269 Svenska Handelsbanken AB, Series A 86,306 1,352 Svenska Handelsbanken AB, Series B 49,697 769 Telefonaktiebolaget LM Ericsson, Class B 1,225,073 16,261 Volvo AB, Series A 42,580 637 Volvo AB, Series B 45,050 692 ------- 33,240 SWITZERLAND 6.1% ----------------- ABB Ltd. 49,072 4,360 Adecco SA 2,605 1,801 Cie Financiere Richemont, Series A 764 2,124 Credit Suisse Group, Registered 42,392 7,945 Holderbank Financiere Glarus AG, Bearer 1,302 1,368 Holderbank Financiere Glarus AG, Registered 3,740 1,100 Nestle SA, Registered 6,097 12,631 (10) Novartis AG, Registered 11,267 17,088 Roche Holding AG, Bearer 257 2,776 Roche Holding AG, Genus 1,107 10,109 Schweizerische Lebensversicherungs-und Rentenanstalt 1,600 1,244 + Swisscom AG, Registered 11,396 2,893 UBS AG, Registered 67,962 9,411 + Zurich Financial Services AG 13,472 6,518 ------- 81,368 UNITED KINGDOM 22.5% --------------------- Abbey National PLC 206,737 2,855 Amvescap PLC 109,531 2,449 -+ ARM Holdings PLC 146,005 1,442 AstraZeneca PLC 276,556 12,963 BAA PLC 143,314 1,192 BAE Systems PLC 420,330 2,390 Bank of Scotland PLC 167,830 1,567 Barclays PLC 257,565 7,376 BASS PLC 114,181 1,118 BG Group PLC 555,316 2,226 BOC Group PLC 69,920 975 Boots Co. PLC 113,489 906 (3) BP Amoco PLC 3,590,077 30,471 British American Tobacco PLC 330,995 2,321 - - British Sky Broadcasting PLC 293,831 4,245 British Telecommunications PLC 1,046,268 12,276 Cable & Wireless PLC 442,218 6,261 Cadbury Schweppes PLC 288,970 1,788 + Carlton Communications PLC 119,714 965 Centrica PLC 596,018 2,051 CGNU PLC 340,029 4,552 + CMG PLC 89,440 1,478 - -+ Colt Telecom Group PLC 110,422 3,528 Diageo PLC 515,475 4,869 Dixons Group PLC 380,071 1,131 + Emi Group PLC 151,595 1,136 GKN PLC 123,926 1,422 GKN PLC, Class B 112,926 16 Glaxo Wellcome PLC 563,770 16,242 - - Granada Compass PLC 284,501 2,454 Halifax Group PLC 367,749 2,894 Hays PLC 273,040 1,492 (7) HSBC Holdings PLC 1,340,668 19,117 Invensys PLC 536,368 1,281 J Sainsbury PLC 256,515 1,442 Kingfisher PLC 224,137 1,341 + Land Securities PLC 111,739 1,152 - Lattice Group PLC 555,316 1,185 Legal & General Group PLC 786,557 1,959 Lloyds TSB Group PLC 839,425 8,557 + Logica PLC 75,618 2,239 + Marconi PLC 422,564 5,338 Marks & Spencer PLC 430,439 1,200 National Grid Group PLC 221,283 1,920 - P & O Princess Cruises PLC 158,799 624
126 See the Financial Notes, which are integral to this information. 131
MKT. VALUE SECURITY AND NUMBER OF SHARES ($ X 1,000) Pearson, Inc. PLC 116,225 3,121 Peninsular & Oriental Steam Navigation 158,799 655 Prudential Corp. PLC 302,788 4,076 Railtrack Group PLC 67,870 1,051 + Reckitt Benckiser PLC 121,651 1,600 Reed International PLC 202,964 1,877 Rentokil Initial PLC 632,994 1,461 Reuters Group PLC 221,741 4,321 Rio Tinto PLC 158,600 2,568 Rolls-Royce PLC 4,904 13 Royal & Sun Alliance Insurance Group PLC 255,512 1,820 Royal Bank of Scotland Group PLC 401,462 9,018 - -+ Sage Group PLC 211,963 1,548 Scottish & Southern Energy PLC 115,521 961 Scottish Power PLC 255,801 1,922 + Sema Group PLC 91,564 1,157 Shell Transport & Trading Co. PLC 1,562,409 12,580 SmithKline Beecham PLC 877,418 11,340 Standard Chartered PLC 168,487 2,432 - - Telewest Communications PLC 743,967 1,232 Tesco PLC 1,095,810 4,181 Unilever PLC 463,912 3,141 (1) Vodafone Group PLC 9,703,324 40,404 WPP Group PLC 102,317 1,374 ------- 300,259 UNITED STATES 0.0% - ------------------------------------------------------------------------------------------------- - - NTL, Inc. 5,553 244
SHORT-TERM INVESTMENTS 0.4% of investments SECURITY FACE VALUE MKT. VALUE RATE, MATURITY DATE ($ X 1,000) ($ X 1,000) Wachovia Bank Time Deposit 6.030%, 11/01/00 5,605 5,605
- -------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. See the Financial Notes, which 127 are integral to this information. 132 SCHWAB INTERNATIONAL INDEX FUND(R) -- FINANCIALS Statement of ASSETS AND LIABILITIES As of October 31, 2000. All numbers x 1,000 except NAV. ASSETS - -------------------------------------------------------------------------------- Investments, at market value $1,334,494 a Collateral held for securities on loan 108,298 Foreign currency (Cost $30) 30 Receivables: Fund shares sold 2,172 Interest 1 Dividends 1,269 Investments sold 673 Income from lending securities 39 b Dividend tax reclaim 820 Prepaid expenses + 44 -------------------- TOTAL ASSETS 1,447,840 LIABILITIES - -------------------------------------------------------------------------------- Collateral held for securities on loan 108,298 Payables: Fund shares redeemed 1,893 Withholding taxes 37 Investment adviser and administrator fees 24 Transfer agent and shareholder service fees 27 Accrued expenses + 282 -------------------- TOTAL LIABILITIES 110,561 NET ASSETS - -------------------------------------------------------------------------------- TOTAL ASSETS 1,447,840 TOTAL LIABILITIES - 110,561 -------------------- NET ASSETS $1,337,279 NET ASSETS BY SOURCE Capital received from investors 1,185,477 Net investment income not yet distributed 19,116 Net realized capital losses (29,825) Net unrealized capital gains on investments and translating assets and liabilities into reporting currency 162,511
NET ASSET VALUE (NAV)
SHARES SHARE CLASS NET ASSETS / OUTSTANDING = NAV Investor Shares $637,218 37,206 $17.13 Select Shares(R) $700,061 40,837 $17.14
a The fund paid $1,171,864 for these securities. Not counting short-term obligations and government securities, the fund paid $743,323 for securities during the report period and received $195,251 from securities it sold or that matured. This includes $3,515 in transactions with other SchwabFunds(R). b Market value of securities loaned: $102,281.
FEDERAL TAX DATA - -------------------------------------------------------------------------------- COST BASIS OF PORTFOLIO $1,182,392 NET UNREALIZED GAINS AND LOSSES: Gains $244,650 Losses + (92,548) ----------------- $152,102 RECLASSIFICATIONS: Net realized capital losses $813 Reclassified as: Net investment income not yet distributed ($813) UNUSED CAPITAL LOSSES: Expires 10/31 of: Loss amount 2002 $ 140 2004 1,743 2005 1,837 2006 11,905 2007 7 2008 3,669
128 See the Financial Notes, which are integral to this information. 133 Statement of OPERATIONS For November 1, 1999 through October 31, 2000. All numbers x 1,000. INVESTMENT INCOME - -------------------------------------------------------------------------------- Dividends $24,893 a Interest 1,095 Lending of securities + 384 -------------- TOTAL INVESTMENT INCOME 26,372 NET REALIZED GAINS AND LOSSES - -------------------------------------------------------------------------------- Net realized losses on investments sold (13,715) Net realized losses on foreign currency transactions + (370) -------------- NET REALIZED LOSSES (14,085) NET UNREALIZED GAINS AND LOSSES - -------------------------------------------------------------------------------- Net unrealized losses on investments (85,560) Net unrealized losses on foreign currency transactions + (119) -------------- NET UNREALIZED LOSSES (85,679) EXPENSES - -------------------------------------------------------------------------------- Investment adviser and administrator fees 5,596 b Transfer agent and shareholder service fees: Investor Shares 1,461 c Select Shares(R) 621 c Trustees' fees 11 d Custodian fees 510 Portfolio accounting fees 187 Professional fees 68 Registration fees 231 Shareholder reports 154 Proxy fees 95 Other expenses + 27 -------------- Total expenses 8,961 Expense reduction - 2,561 e -------------- NET EXPENSES 6,400 DECREASE IN NET ASSETS FROM OPERATIONS - -------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 26,372 NET EXPENSES - 6,400 --------------- NET INVESTMENT INCOME 19,972 NET REALIZED LOSSES (14,085) f NET UNREALIZED LOSSES + (85,679) f --------------- DECREASE IN NET ASSETS FROM OPERATIONS ($79,792)
a An additional $1,870 was withheld for foreign taxes. b Calculated as a percentage of average daily net assets: 0.43% of the first $500 million and 0.38% of assets beyond that. Prior to February 29, 2000, the percentages were 0.70% of the first $300 million and 0.60% of assets beyond that. c Calculated as a percentage of average daily net assets: for transfer agent services, 0.05% of the fund's assets; for shareholder services, 0.20%, and 0.05% of the assets of each respective share class. d For the fund's independent trustees only. e Includes $2,327 from the investment adviser (CSIM) and $234 from the transfer agent and shareholder service agent (Schwab). These reductions reflect a guarantee by CSIM and Schwab to limit the operating expenses of this fund through at least February 28, 2001, as follows: % OF AVERAGE SHARE CLASS DAILY NET ASSETS - -------------------------------------------------------------------------------- Investor Shares 0.58 Select Shares 0.47
This limit does not include interest, taxes and certain non-routine expenses. f These add up to a net loss on investments of $99,764. See the Financial Notes, which 129 are integral to this information. 134 SCHWAB INTERNATIONAL INDEX FUND(R) -- FINANCIALS Statements of CHANGES IN NET ASSETS For the current and prior report periods. All numbers x 1,000. OPERATIONS - --------------------------------------------------------------------------------
11/1/99 - 10/31/00 11/1/98 - 10/31/99 Net investment income $19,972 $9,282 Net realized losses (14,085) (436) Net unrealized gains or losses + (85,679) 159,588 ---------------------------------------------------------- INCREASE OR DECREASE IN NET ASSETS FROM OPERATIONS (79,792) 168,434
DISTRIBUTIONS PAID - -------------------------------------------------------------------------------- Dividends from net investment income Investor Shares 4,063 4,066 Select Shares(R) + 4,878 1,055 ---------------------------------------------------------- TOTAL DIVIDENDS FROM NET INVESTMENT INCOME $8,941 $5,121
TRANSACTIONS IN FUND SHARES - --------------------------------------------------------------------------------
11/1/99 - 10/31/00 11/1/98 - 10/31/99 QUANTITY VALUE QUANTITY VALUE Shares sold: Investor Shares 19,884 $374,024 11,715 $186,131 Select Shares + 20,555 387,062 20,684 334,045 --------------------------------------------------------------------- TOTAL SHARES SOLD 40,439 $761,086 32,399 $520,176 Shares reinvested: Investor Shares 193 $3,704 255 $3,798 Select Shares + 233 4,478 61 904 --------------------------------------------------------------------- TOTAL SHARES REINVESTED 426 $8,182 316 $4,702 Shares redeemed: Investor Shares 7,778 $145,804 17,223 $277,601 Select Shares + 4,945 92,957 2,328 37,107 --------------------------------------------------------------------- TOTAL SHARES REDEEMED 12,723 $238,761 19,551 $314,708 a NET INCREASE 28,142 $530,507 13,164 $210,170 b
SHARES OUTSTANDING AND NET ASSETS - --------------------------------------------------------------------------------
11/1/99 - 10/31/00 11/1/98 - 10/31/99 SHARES NET ASSETS SHARES NET ASSETS Beginning of period 49,901 $895,505 36,737 $522,022 Total increase + 28,142 441,774 13,164 373,483 c --------------------------------------------------------------------- END OF PERIOD 78,043 $1,337,279 49,901 $895,505 d
a Dollar amounts are net of proceeds received from early withdrawal fees that the fund charges on shares sold 180 days or less after buying them: CURRENT PERIOD Investor Shares $336 Select Shares + 200 ----------- Total $536 PRIOR PERIOD Investor Shares $65 Select Shares + 50 ----------- Total $115
b Represents shares sold plus shares reinvested, minus shares redeemed. c Figures for shares represent the net changes in shares from the transactions described above. Figures for net assets represent the changes in net assets from operations plus the changes in value of transactions in fund shares, minus distributions paid. d Includes net investment income not yet distributed in the amount of $19,116 for the current period and $8,898 for the prior period. Percent of fund shares owned by other SchwabFunds(R) as of the end of the current period: SCHWAB MARKETTRACK PORTFOLIOS(R) All Equity Portfolio 9.8% Growth Portfolio 8.3% Balanced Portfolio 5.6% Conservative Portfolio 1.4% SCHWAB ANNUITY PORTFOLIOS Growth Portfolio II 0.3%
130 See the Financial Notes, which are integral to this information. 135 FINANCIAL NOTES FINANCIAL NOTES BUSINESS STRUCTURE OF THE FUNDS EACH OF THE FUNDS DISCUSSED IN THIS REPORT IS A SERIES OF A NO-LOAD, OPEN-END MANAGEMENT INVESTMENT COMPANY. Each of these companies is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended. The sidebar shows the funds in this report by trust. THE FUNDS OFFER MULTIPLE SHARE CLASSES. For any given fund, shares of each class represent interests in the same portfolio, but each class has its own costs and investment minimums. In addition, one share class, e.Shares(R), is available only to clients of Schwab Institutional, Charles Schwab Trust Company and certain tax-advantaged retirement plans, and can only be traded electronically.
INVESTOR SELECT FUND SHARES SHARES(R) e.SHARES - -------------------------------------------------------------------------------- S&P 500 - - - Schwab 1000 - - Small-Cap Index - - Total Stock Market Index - - International Index - -
For these funds, shares are bought and sold at net asset value, or NAV, which is the price for all outstanding shares. Each share has a par value of 1/1,000 of a cent, and the trustees may issue as many shares as necessary. THE TRUSTS AND THEIR FUNDS - -------------------------------------------------------------------------------- This list shows the trust containing each fund in this report, along with all other funds included in these trusts. The funds discussed in this report are highlighted. SCHWAB INVESTMENTS Organized October 26, 1990 Schwab 1000 Fund(R) Schwab Short-Term Bond Market Index Fund Schwab Total Bond Market Index Fund Schwab YieldPlus Fund(TM) Schwab Short/Intermediate Tax-Free Bond Fund Schwab Long-Term Tax-Free Bond Fund Schwab California Short/Intermediate Tax-Free Bond Fund Schwab California Long-Term Tax-Free Bond Fund SCHWAB CAPITAL TRUST Organized May 7, 1993 Schwab S&P 500 Fund Schwab Small-Cap Index Fund(R) Schwab Total Stock Market Index Fund(TM) Schwab International Index Fund(R) Schwab Analytics Fund(R) Schwab MarketTrack All Equity Portfolio Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfolio Schwab MarketManager Growth Portfolio Schwab MarketManager Balanced Portfolio Schwab MarketManager Small Cap Portfolio Schwab MarketManager International Portfolio Communications Focus Fund Financial Services Focus Fund Health Care Focus Fund Technology Focus Fund Institutional Select(TM)S&P 500 Fund Institutional Select(TM)Large-Cap Value Index Fund Institutional Select(TM)Small-Cap Value Index Fund 131 136 FINANCIAL NOTES FUND OPERATIONS Most of the funds' investments are described in the fund-by-fund sections earlier in this report. However, there are certain other investments and policies that may affect a fund's financials. The most significant of these are described below. Other policies concerning the funds' business operations also are described here. THE FUNDS PAY DIVIDENDS from net investment income and make distributions from net capital gains once a year. THE FUNDS MAY INVEST IN FUTURES CONTRACTS TO PARTICIPATE IN THE RETURN OF AN INDEX. Futures contracts involve certain risks, because they can be very sensitive to market movements. One risk is that the price of a futures contract may not move in perfect correlation with the price of the underlying securities. Another risk is that, at certain times, it may be impossible for the fund to close out a position in a futures contract due to a difference in trading hours or to market conditions that may reduce the liquidity for a futures contract or its underlying securities. Because futures carry inherent risks, a fund must give the broker a deposit of cash and/or securities (the "initial margin") whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another, but it is generally a percentage of the contract amount. Futures are traded publicly on exchanges, and their market value changes daily. The fund records the change in market value of futures, and also the change in the amount of margin deposit required ("variation margin"). THE SCHWAB INTERNATIONAL INDEX FUND(R) MAY INVEST IN FORWARD CURRENCY CONTRACTS IN CONNECTION WITH THE PURCHASE AND SALE OF PORTFOLIO SECURITIES TO MINIMIZE THE UNCERTAINTY OF CHANGES IN FUTURE EXCHANGE RATES. "Forwards," as they are known, are contracts to buy and sell a currency at a set price on a future date. Forwards are similar to futures except that they are not publicly traded, but are agreements directly between two parties. As of the report date, the fund had no forwards in its portfolio. As with futures, forwards involve certain risks that are not fully reflected in the fund's financials. If counterparties to the contracts are unable to meet the terms of the contracts or if the value of the foreign currency changes unfavorably, the fund could sustain a loss. THE FUNDS MAY ENTER INTO REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. The date, price and other conditions are all specified when the agreement is created. Among the terms of the funds' repurchase agreements is that they be fully collateralized by U.S. Treasury or government agency securities. All collateral is held by the funds' custodian and is monitored daily to ensure that its market value at least equals the repurchase price under the agreement. 132 137 THE FUNDS MAY LOAN SECURITIES TO CERTAIN BROKERS, DEALERS AND OTHER FINANCIAL INSTITUTIONS WHO PAY THE FUNDS NEGOTIATED FEES. The funds receive cash, letters of credit or U.S. government securities as collateral on these loans, and the value of the collateral must be at least 102% of the market value of the loaned securities as of the first day of the loan, and at least 100% each day thereafter. THE FUNDS MAY BORROW MONEY FROM BANKS. The funds may obtain temporary bank loans through the trusts to which they belong, to use for meeting shareholder redemptions or for extraordinary or emergency purposes. The trusts have line of credit arrangements with PNC Bank, N.A., Bank of America, N.A. and The Bank of New York. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. As of the end of the report period there were no borrowings outstanding. THE FUNDS PAY FEES FOR VARIOUS SERVICES. Through their trusts, the funds have agreements with Charles Schwab Investment Management, Inc. (CSIM) to provide investment advisory and administrative services and with Charles Schwab & Co., Inc. (Schwab) to provide transfer agent and shareholder services. Although these agreements specify certain fees for these services, CSIM and Schwab have made additional agreements with the funds limiting certain expenses. The rates and limitations for these fees vary from fund to fund, and are described in each fund's Statement of Operations. TRUSTEES MAY INCLUDE PEOPLE WHO ARE OFFICERS AND/OR DIRECTORS OF THE INVESTMENT ADVISER AND/OR SCHWAB. Federal securities law limits the percentage of such "interested persons" who may serve on a trust's board, and the trusts were in compliance with these limitations throughout the report period. The trusts did not pay any of these persons for their service as trustees, but they did pay the independent trustees, as noted in each fund's Statement of Operations. THE FUNDS MAY ENGAGE IN CERTAIN TRANSACTIONS INVOLVING AFFILIATES. For instance, a fund may own shares of The Charles Schwab Corp. if that company is included in its index. The funds also may let other SchwabFunds(R) buy and sell fund shares, particularly Schwab MarketTrack Portfolios,(TM) which seek to provide investors with allocated portfolios of Schwab index funds. The funds may make direct transactions with certain other SchwabFunds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and officers. THE FUNDS INTEND TO MEET FEDERAL INCOME AND EXCISE TAX REQUIREMENTS FOR REGULATED INVESTMENT COMPANIES. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains (if any) to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax. 133 138 FINANCIAL NOTES ACCOUNTING POLICIES The following are the main policies the funds use in preparing their financial statements. THE FUNDS VALUE THE SECURITIES IN THEIR PORTFOLIOS EVERY BUSINESS DAY. The funds use the following policies to value various types of securities: EXCHANGE-TRADED SECURITIES: valued at the last-quoted sale price for the day, or, on days when no sale has been reported, halfway between the most recent bid and asked quotes. SECURITIES TRADED OVER-THE-COUNTER: same as exchange-traded securities. SECURITIES FOR WHICH NO QUOTED VALUE IS AVAILABLE, INCLUDING RESTRICTED SECURITIES: valued at fair value, as determined in good faith by the fund's investment adviser using guidelines adopted by the fund's Board of Trustees. FUTURES AND FORWARDS: open contracts are valued at their settlement prices as of the close of their exchanges (for futures) or at a market value based on that day's exchange rates (for forwards). When a fund closes out a futures or forwards position, it calculates the difference between the value of the position at the beginning and at the end, and records a realized gain or loss accordingly. SHORT-TERM SECURITIES (60 DAYS OR LESS TO MATURITY): valued at amortized cost. SECURITY TRANSACTIONS are recorded as of the date the order to buy or sell the security is executed. DIVIDENDS AND DISTRIBUTIONS FROM PORTFOLIO SECURITIES are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. INCOME FROM INTEREST AND THE ACCRETION OF DISCOUNTS is recorded as it accrues. REALIZED GAINS AND LOSSES from security transactions are based on the identified costs of the securities involved. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are figured using exchange rates in effect on the transaction date. The funds separate within their statement of operations the portion of realized and unrealized gains and losses resulting from changes in foreign currency exchange rates from fluctuations in market prices of investments held. EXPENSES that are specific to a fund are charged directly to that fund. Expenses that are common to all funds within a trust generally are allocated among the funds in proportion to their net assets. EACH FUND MAINTAINS ITS OWN ACCOUNT FOR PURPOSES OF HOLDING ASSETS AND ACCOUNTING, and is considered a separate entity for tax purposes. Within its account, each fund also keeps certain assets in segregated accounts, as may be required by securities law. THE ACCOUNTING POLICIES DESCRIBED ABOVE CONFORM WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It's possible that once the results are known, they may turn out to be different from these estimates. 134 139 REPORT OF INDEPENDENT ACCOUNTANTS TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF: Schwab S&P 500 Fund Schwab 1000 Fund(R) Schwab Total Stock Market Index Fund(TM) Schwab Small-Cap Index Fund(R) Schwab International Index Fund(R) In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab S&P 500 Fund, Schwab 1000 Fund(R) (one of the portfolios constituting Schwab Investments), Schwab Total Stock Market Index Fund(TM), Schwab Small-Cap Index Fund(R), and Schwab International Index Fund(R) (hereafter collectively referred to as the "funds") at October 31, 2000, and the results of each of their operations for the year then ended, the changes in each of their net assets and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP San Francisco, CA December 12, 2000 135 140 PROXY VOTING RESULTS (UNAUDITED) SHAREHOLDERS OF THE FUNDS COVERED IN THIS REPORT APPROVED ALL PROPOSALS DESCRIBED IN THE MOST RECENT SCHWABFUNDS(R) PROXY SOLICITATION. A special meeting of the shareholders of Schwab Capital Trust and Schwab Investments was held on June 1, 2000. The number of votes necessary to conduct the meeting and approve each proposal was obtained. The results of the votes of shareholders are listed below by proposal. FOR WITHHELD - -------------------------------------------------------------------------------- Proposal 1 ELECTION OF TRUSTEES (SCHWAB CAPITAL TRUST) Charles R. Schwab 289,830,691 68,146,593 Mariann Byerwalter 289,803,100 68,174,184 Jeremiah H. Chafkin 290,116,655 67,860,629 Donald F. Dorward 289,894,704 68,082,580 William A. Hasler 289,963,656 68,013,628 Robert G. Holmes 290,075,539 67,901,745 Steven L. Scheid 290,226,860 67,750,424 Gerald B. Smith 290,102,267 67,875,017 Donald R. Stephens 290,162,159 67,815,125 Michael W. Wilsey 290,227,986 67,749,298 ELECTION OF TRUSTEES (SCHWAB INVESTMENTS) Charles R. Schwab 164,731,678 19,977,396 Mariann Byerwalter 164,731,678 19,977,396 Jeremiah H. Chafkin 164,731,678 19,977,396 Donald F. Dorward 164,731,678 19,977,396 William A. Hasler 164,731,678 19,977,396 Robert G. Holmes 164,731,678 19,977,396 Steven L. Scheid 164,731,678 19,977,396 Gerald B. Smith 164,731,678 19,977,396 Donald R. Stephens 164,731,678 19,977,396 Michael W. Wilsey 164,731,678 19,977,396
136 141
FOR AGAINST ABSTAINED 1 - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 2c1 TO APPROVE CHANGES TO RESTRICTIONS REGARDING BORROWING. Schwab S&P 500 Fund 143,724,607 3,999,214 35,801,921 Schwab 1000(R) 75,333,834 2,664,432 18,546,852 Schwab Small-Cap Index Fund(R) 28,545,531 591,356 813,594 Schwab International Index Fund(R) 29,554,482 519,028 1,060,508 PROPOSAL 2c2 TO APPROVE CHANGES TO RESTRICTIONS REGARDING LENDING. Schwab S&P 500 Fund 143,619,954 4,023,269 35,882,519 Schwab 1000 75,282,017 2,696,603 18,566,498 Schwab Small-Cap Index Fund 28,538,352 600,356 811,773 Schwab International Index Fund 29,559,344 517,860 1,056,814 PROPOSAL 2c3 TO APPROVE CHANGES TO RESTRICTIONS REGARDING SENIOR SECURITIES. Schwab S&P 500 Fund 143,776,649 3,835,530 35,913,563 Schwab 1000 75,474,928 2,441,866 18,628,324 Schwab Small-Cap Index Fund 28,547,289 587,637 815,555 Schwab International Index Fund 29,445,882 626,254 1,061,882 PROPOSAL 2d TO APPROVE CHANGES TO RESTRICTIONS REGARDING DIVERSIFICATION. Schwab S&P 500 Fund 144,262,800 3,452,434 35,810,508 Schwab 1000 75,736,838 2,278,087 18,530,193 Schwab Small-Cap Index Fund 28,587,955 548,307 814,219 Schwab International Index Fund 29,610,805 467,708 1,055,505 PROPOSAL 2f TO APPROVE CHANGES TO RESTRICTIONS REGARDING RESTRICTED OR ILLIQUID SECURITIES. Schwab S&P 500 Fund 143,500,531 4,141,136 35,884,075 Schwab 1000 75,115,192 2,852,761 18,577,165 Schwab Small-Cap Index Fund 28,476,187 664,012 810,282 Schwab International Index Fund 29,430,041 651,558 1,052,419 PROPOSAL 2h TO APPROVE CHANGES TO RESTRICTIONS REGARDING OWNERSHIP OF SECURITIES. Schwab S&P 500 Fund 143,776,649 3,835,530 35,913,563 Schwab 1000 75,474,928 2,441,866 18,628,324 Schwab Small-Cap Index Fund 28,547,289 587,637 815,555 Schwab International Index Fund 29,445,882 626,254 1,061,882
1 Includes broker non-votes. 137 142
FOR AGAINST ABSTAINED 1 - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 2i TO APPROVE CHANGES TO RESTRICTIONS REGARDING INDUSTRY CONCENTRATION. Schwab S&P 500 Fund 144,000,435 3,605,355 35,919,952 Schwab 1000(R) 75,484,898 2,491,463 18,568,757 Schwab Small-Cap Index Fund(R) 28,571,274 568,552 810,654 Schwab International Index Fund(R) 29,581,436 495,337 1,057,245 PROPOSAL 2j TO APPROVE CHANGES TO RESTRICTIONS REGARDING COMMODITIES, FUTURES, AND REAL ESTATE. Schwab S&P 500 Fund 143,626,528 4,011,490 35,887,724 Schwab 1000 75,105,085 2,888,198 18,551,835 Schwab Small-Cap Index Fund 28,495,105 642,479 812,896 Schwab International Index Fund 29,525,824 546,464 1,061,730 PROPOSAL 2k TO APPROVE CHANGES TO RESTRICTIONS REGARDING UNDERWRITING OF SECURITIES. Schwab S&P 500 Fund 143,826,747 3,818,261 35,880,734 Schwab 1000 75,343,762 2,603,781 18,597,575 Schwab Small-Cap Index Fund 28,559,582 582,543 808,356 Schwab International Index Fund 29,580,737 496,340 1,056,941 PROPOSAL 2l TO APPROVE CHANGES TO RESTRICTIONS REGARDING CONTROL OF AN ISSUER. Schwab S&P 500 Fund 144,449,548 3,480,991 35,595,203 Schwab 1000 75,550,728 2,476,012 18,518,378 Schwab Small-Cap Index Fund 28,618,383 584,453 747,645 Schwab International Index Fund 30,175,116 501,706 457,196 PROPOSAL 3a TO APPROVE CHANGES TO RESTRICTIONS REGARDING THE SCHWAB SMALL-CAP INDEX FUND INVESTMENT OBJECTIVE AND TO ELIMINATE THE FUND'S INVESTMENT POLICY REGARDING PORTFOLIO COMPOSITION. Schwab Small-Cap Index Fund 29,000,928 410,034 539,519 PROPOSAL 3b TO APPROVE CHANGES TO RESTRICTIONS REGARDING THE SCHWAB INTERNATIONAL INDEX FUND INVESTMENT OBJECTIVE AND TO ELIMINATE THE FUND'S INVESTMENT POLICY REGARDING PORTFOLIO COMPOSITION. Schwab International Index Fund 30,502,318 388,639 243,061
1 Includes broker non-votes. 138 143 HOW TO READ THIS REPORT This report, including the financial tables, has been designed to be EASY TO READ. The next few pages provide additional information that can help you more fully understand the financial tables and why they are important to ALL FUND INVESTORS. In this section, we take a closer look at the types of information presented in the financial tables. Brief CALLOUTS add context to some of the most important elements in the tables, and help explain certain fund operations and accounting principles. At the end, a GLOSSARY defines many of the technical financial terms that are used in this report. 139 144 HOW TO READ THIS REPORT Continued [GRAPHIC OF FINANCIAL HIGHLIGHTS SAMPLE TABLE] FINANCIAL HIGHLIGHTS I PER-SHARE DATA ($) 2 Income from investment operations: 3 Net investment income Net realized and unrealized gains Total income from investment operations Total return (%) 4 1 The financial highlights summarize the fund's activities over the past five years (or since inception, if the fund doesn't yet have five years of operating history). 2 The figures in the first part of the table are for a single share of the fund that was "outstanding," or in existence, during the periods indicated. 3 These lines show how much the fund earned per share, and where these earnings came from: how much was from interest and dividends, and how much from capital appreciation (that is, price increases of investments the fund owned). A fund may show losses in this section if its expenses exceeded its income or its capital losses exceeded its capital gains. 4 Some funds, such as money funds, typically receive all their earnings as interest, while some equity funds may have only appreciation, or may receive interest and dividends only occasionally. 5 Total return shows what an investor in the fund would have earned or lost during each period indicated, assuming that all dividends and distributions were reinvested. Because the numbers in the financial highlights are for a fund's fiscal year, they will be different from calendar year numbers, except for funds whose fiscal year is the same as the calendar year. 140 145 [GRAPHIC OF FINANCIAL HIGHLIGHTS SAMPLE TABLE] * 1/1/97-10/31/97 ** (0.19) (-) 0.49 (-) 0.40 (+) 1.89 (++) 1 Table is for illustration only. * In some cases, such as with funds that started partway through their planned fiscal year or have changed their fiscal year, the financial highlights may contain a "stub period" that is less than 12 months. ** In financial tables, parentheses around numbers are used to indicate a negative number, such as a loss, or a number that is being subtracted, such as a distribution paid by a fund to its shareholders. (-) The figures in this part of the table disclose a fund's annual operating expenses. The expenses are shown as a percentage of a fund's average net assets, because they are paid from these assets. (-) For some funds, the annual expenses are capped at a certain level. With these funds, there are two sets of expense figures: net expenses and the amounts of any expense reductions. The net figures reflect what the expenses actually were, after the reductions. (+) This shows you how much a fund netted in dividend and interest income (i.e., total dividends and interest minus expenses), expressed as a percentage of the fund's average net assets. (++) The turnover rate tells you how actively a fund has traded securities. A rate of 100% would be the equivalent of replacing every security in the portfolio over the period of a year. (++) Consistently high turnover can result in taxable distributions, which can lower after-tax performance -- although this is not a concern if your investment is held in an IRA, 401(k) or other tax-deferred account. 141 146 HOW TO READ THIS REPORT Continued The Portfolio Holdings (sometimes also called the Schedule of Investments) is a snapshot of all securities a fund held on the last day of the report period. Symbols that may appear in the Portfolio Holdings: (1) Top ten holding--shows a fund's ten largest positions, as measured by market value. + New holding--a security the fund added during the report period. [BULLET] Non-income producing security--this includes several categories of securities: those that never pay dividends (such as many growth stocks); those that sometimes pay dividends, but have not done so in the past 12 months; and those that typically do pay dividends, but have missed a recent dividend payment. [GREATER THAN ARROW] Global Depositary Receipt (GDR)--a security issued in one country that represents a stock issued in another country. [DIAMOND] American Depositary Receipt (ADR)--a type of GDR that is traded in the United States and priced in U.S. dollars. [TRIANGLE] Collateral for open futures contracts--indicates a security the fund has set aside in a separate account to cover possible losses that may result from a futures contract. The fund is not permitted to sell a security while it is pledged as collateral. [RECTANGLE] Issuer is affiliated with the fund's adviser--indicates a security issued by the company that manages the fund, or an affiliate of that company. Substantial ownership of such securities could represent conflict of interest, which is why this disclosure is required. This shows a breakdown of holdings by asset type. To the right of the pie chart are figures showing the total market value of securities of each asset type, and also what a fund paid for those securities. PORTFOLIO HOLDINGS (1) Top ten holding + New holding [BULLET] Non-income producing security [GREATER THAN ARROW] Global Depositary Receipt [DIAMOND] American Depositary Receipt [TRIANGLE] Collateral for open futures contracts [RECTANGLE] Issuer is affiliated with the fund's adviser [GRAPHIC OF PORTFOLIO HOLDINGS SAMPLE TABLE]
MARKET VALUE COST ------------ ---- COMMON STOCK 99.9% $7,368,959 $5,767,040 U.S. TREASURY OBLIGATIONS 0.1% 3,778 3,778 SHORT-TERM INVESTMENTS 1,864 1,864 ----- ---------- ---------- TOTAL INVESTMENTS 100.0% 7,374,601 5,772,682
Table is for illustration only. 142 147 For all bonds, the report shows the security name, the rate the security pays and the maturity date. The maturity date is the date when the bond is retired and the issuer returns the money borrowed ("principal" or "face value") to the bondholder. ** During its lifetime, a bond may trade at a premium or a discount to its par value, depending on interest rate trends and other factors. When a bond begins to approach maturity, its market value typically moves closer to its face value. In this example, the investment shown is one that seeks to maintain a stable $1.00 share price, so the number of shares is typically the same as the market value (allowing for rounding in the value column). * In some cases, securities are organized into sub-groups (in this example, stock holdings are organized by industry). For each sub-group, there are figures showing the percentage of investments represented and the total market value of the securities in the subgroup. Note that for all dollar values, you need to add three zeroes after each number to get the approximate value. (+) In this example, the investment shown is one that seeks to maintain a stable $1.00 share price, so the number of shares is typically the same as the market value (allowing for rounding in the value column). [GRAPHIC OF PORTFOLIO HOLDINGS SAMPLE TABLE] Table is for illustration only. (-) Most equity funds keep a small percentage of assets in high quality, liquid investments, in order to manage their cash flow needs. * UTILITIES: ELECTRIC & GAS 2.6% ** U.S. Treasury Bills (+) Provident Institutional TempCash (-) Other Investment Companies 143 148 HOW TO READ THIS REPORT Continued * The Statement of Assets and Liabilities is a snapshot of a fund's balance sheet on the last day of the report period. (-) At any given time, a fund is likely to be owed money from various sources that it has not yet received, and to owe money it hasn't yet paid. (++) This section gathers the totals from the first two sections in order to compute net assets. (-x) This section shows where the assets described above came from. "Capital received from investors" is money a fund received from investors buying its shares during the report period, and is a net figure (meaning that money the fund remitted to investors who redeemed their shares has already been subtracted from it). [GRAPHIC OF ASSETS AND LIABILITIES SAMPLE TABLE] Table is for illustration only. ** As with the Portfolio Holdings, the figures in these statements need to be multiplied by 1,000. This includes the figures in the notes. (+) The collateral is simultaneously counted as an asset (because the fund held it as of the report date) and as a liability (because it is owned by the institutions that provided it as collateral). (-x) Although a mutual fund doesn't expect to pay federal income tax, it does have to file a return with the IRS and disclose certain tax information to shareholders. In some cases, the requirements of tax accounting differ from the requirements of the accounting practices used in keeping a fund's books, so the figures in this box may differ from those shown elsewhere in the financials. These differences may require that some values be reclassified in the financials, but this does not affect a fund's NAV. [GRAPHIC OF FEDERAL TAX DATA SAMPLE TABLE] Table is for illustration only. * Assets and Liabilities ** As of October 31, 2000 (-) Receivables (-) Payables (+) Collateral held for securities on loan (++) Net Assets (+X) Federal Tax Data (-X) Net Assets by Source 144 149 [GRAPHIC OF STATEMENT OF OPERATIONS SAMPLE TABLE] * Statement of OPERATIONS ** NET REALIZED GAINS AND LOSSES *** NET UNREALIZED GAINS AND LOSSES **** Custodian fees # Investment adviser and administrator fees ## Transfer agent and shareholder service fees: Investor Shares Select Shares(R) ### INCREASE IN NET ASSETS FROM OPERATIONS Table is for illustration only. *The Statement of Operations tells you how much money a fund earned and spent over the course of the report period, and how much it gained and lost on its investments. **These are the capital gains or losses resulting from securities a fund sold during the report period. ***These represent the change in unrealized gains or losses over the report period. ***To safeguard the interests of shareholders, mutual funds must keep their portfolio securities in accounts at a financial institution, whose tasks include maintaining records of a fund's holdings. *Covers most activities related to managing a fund's portfolio. ##Covers most activities associated with shareholders, including processing transactions in fund shares and providing services such as account statements and information. In funds with more than one share class, these figures are reported by class. ###This section gathers the totals from the first four sections in order to compute the net earnings or losses that resulted from a fund's operations during the report period. These figures also appear, in summary form, on the Statements of Changes in Net Assets. 145 150 HOW TO READ THIS REPORT Continued [GRAPHIC OF CHANGES IN NET ASSETS SAMPLE TABLE] * Statements of CHANGES IN NET ASSETS ** TRANSACTIONS IN FUND SHARES ***
OPERATIONS - -------------------------------------------------------- 11/1/99-10/31/00 Net investment income .................. $65,370 Net realized gains ..................... 22,632 Net unrealized gains ................... +1,063,273 ---------- INCREASE IN NET ASSETS FROM OPERATIONS.. 1,151,275
****
OPERATIONS - -------------------------------------------------------- 11/1/98-10/31/99 Net investment income ..................... $35,310 Net realized gains ........................ (8,303) Net unrealized gains ...................... 371,823 ------- INCREASE IN NET ASSETS FROM OPERATIONS..... 398,830
# SHARES OUTSTANDING AND NET ASSETS Table is for illustration only. *The Statements of Changes in Net Assets compare a fund's performance during the current report period with its performance from the previous report period. Keep in mind that if the current report is a semiannual report, its figures are only for six months, whereas the figures for the previous period are generally for a full year. **From this section, you can see how the size of a fund was affected by investors buying and selling shares (as opposed to changes due to fund performance, shown above in "Operations"). **The information shows how many shares the fund sold to investors, how many shares the fund issued in connection with investors who reinvested their dividends or distributions, and how many shares the fund redeemed (bought back from investors). In funds with more than one share class, these figures are reported by class. ***These are the figures for the current report period. ****These are the figures for the previous report period. #For mutual funds, the number of "shares outstanding" is the number of shares in existence. 146 151 GLOSSARY ASSET ALLOCATION The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage. ASSET CLASS A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes. BETA A historical measure of an investment's volatility relative to a market index (usually the S&P 500). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile. BOND A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the "coupon rate") until a specified date (the "maturity date"), at which time the issuer returns the money borrowed ("principal" or "face value") to the bondholder. Because of their structure, bonds are sometimes called "fixed income securities" or "debt securities." CAP, CAPITALIZATION See "market cap." CAPITAL GAIN, CAPITAL LOSS The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still "on paper" and is considered unrealized. EARNINGS GROWTH RATE For a mutual fund, the average yearly rate at which the earnings of the companies in the fund's portfolio have grown, measured over the past five years. EARNINGS PER SHARE (EPS) A company's earnings, or net income, for the past 12 months, divided by the number of shares outstanding. EXPENSE RATIO The amount that is taken from a mutual fund's assets each year to cover the fund's operating expenses. An expense ratio of 0.50% means that a fund's expenses amount to half of one percent of its average net assets a year. MARKET CAP, MARKET CAPITALIZATION The value of a company as determined by the total value of all shares of its stock outstanding. MEDIAN MARKET CAP The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund's portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund's assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller. NET ASSET VALUE (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund's total assets, subtracting liabilities, and dividing by the number of shares outstanding. OUTSTANDING SHARES, SHARES OUTSTANDING When speaking of a company or mutual fund, indicates all shares currently held by investors. PRICE-TO-BOOK RATIO (P/B) The market price of a company's stock compared with its "book value." A mutual fund's P/B is the weighted average of the P/B of all stocks in the fund's portfolio. PRICE-TO-EARNINGS RATIO (P/E) The market price of a company's stock compared with earnings over the past year. A mutual fund's P/E is the weighted average of the P/E of all stocks in the fund's portfolio. RETURN ON EQUITY (ROE) The average yearly rate of return for each dollar of investors' money, measured over the past five years. STOCK A share of ownership, or equity, in the issuing company. TOTAL RETURN The overall performance of an investment over a given period, including any expenses, any income or distributions paid out and any capital gain or loss (increases or decreases in portfolio value). WEIGHTED AVERAGE For mutual funds, an average that gives the same weight to each security as the security represents in the fund's portfolio. YIELD The income paid out by an investment, expressed as a percentage of the investment's market value. 147 152 NOTES 153 NOTES 154 NOTES 155 CONTACT SCHWAB The SchwabFunds(R) Family includes a variety of funds to help meet your investment needs. You can diversify your portfolio in a single step with our asset allocation funds. Or you can customize your portfolio with a combination of our stock funds as well as our taxable and tax-advantaged bond and money market funds. Please call 1-800-435-4000 for a free prospectus and brochure for any of these SchwabFunds. This report must be preceded or accompanied by a current prospectus. METHODS FOR PLACING ORDERS The following information outlines how Schwab brokerage account investors can place orders. If you are investing through a third-party investment provider, methods for placing orders may be different. INTERNET www.schwab.com SCHWAB BY PHONE(TM) Use our automated voice service or speak to a representative. Call 1-800-435-4000, day or night (for TDD service, call 1-800-345-2550). TELEBROKER(R) Automated touch-tone phone service at 1-800-272-4922 MAIL Write to SchwabFunds at: P. O. Box 7575 San Francisco, CA 94120-7575 When selling or exchanging shares, be sure to include the signatures of at least one of the persons whose name is on the account. THE SCHWABFUNDS FAMILY EQUITY INDEX FUNDS Schwab S&P 500 Fund Schwab 1000 Fund(R) Schwab Small-Cap Index Fund(R) Schwab Total Stock Market Index Fund(TM) Schwab International Index Fund(R) QUANTITATIVE/SECTOR FUNDS Schwab Analytics Fund(R) Schwab Focus Funds Communications Focus Fund Financial Services Focus Fund Health Care Focus Fund Technology Focus Fund ASSET ALLOCATION FUNDS Schwab MarketTrack Portfolios(R) All Equity Portfolio Growth Portfolio Balanced Portfolio Conservative Portfolio Schwab MarketManager Portfolios(R) Growth Portfolio Balanced Portfolio Small Cap Portfolio International Portfolio BOND FUNDS Schwab Short-Term Bond Market Index Fund Schwab Total Bond Market Index Fund Schwab YieldPlus Fund(TM) Schwab Short/Intermediate Tax-Free Bond Fund Schwab Long-Term Tax-Free Bond Fund Schwab California Short/Intermediate Tax-Free Bond Fund Schwab California Long-Term Tax-Free Bond Fund SCHWAB MONEY FUNDS Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity. 1 Choose from taxable or tax-advantaged alternatives. Many can be linked to your Schwab account to "sweep" cash balances automatically when you're between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments.(R) 1 Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. 156 CHARLESSCHWAB INVESTMENT ADVISER Charles Schwab Investment Management, Inc. 101 Montgomery Street, San Francisco, CA 94104 DISTRIBUTOR Charles Schwab & Co., Inc. PO Box 7575, San Francisco, CA 94120-7575 This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus. (C) 2000 Charles Schwab & Co., Inc. All rights reserved. Member SIPC/NYSE. Printed on recycled paper. MKT3810-3 (12/00) -----END PRIVACY-ENHANCED MESSAGE-----