UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-8314
Schwab Annuity Portfolios
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
Marie Chandoha
Schwab Annuity Portfolios
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrants telephone number, including area code: (415) 636-7000
Date of fiscal year end: December 31
Date of reporting period: June 30, 2015
Item 1: Report(s) to Shareholders.
Schwab
MarketTrack Growth Portfolio II™ |
Semiannual report dated June 30, 2015 |
Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the portfolio. She was appointed portfolio manager of the portfolio in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Portfolio and inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
Portfolio: Schwab MarketTrack Growth Portfolio II (11/01/96) | 2.50% | 3.19% | 12.44% | 6.47% |
Growth Composite Index II3 | 2.65% | 3.87% | 12.90% | 6.95% |
S&P 500® Index | 1.23% | 7.42% | 17.34% | 7.89% |
Barclays U.S. Aggregate Bond Index | -0.10% | 1.86% | 3.35% | 4.44% |
Fund Category: Morningstar Aggressive Allocation | 1.95% | 1.69% | 11.75% | 6.00% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | Prior to April 30, 2015, the Growth Composite Index II was known as the Growth Composite Index. |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.18%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 4/29/17. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
5 | Not annualized. |
6 | The portfolio invests mainly in other Schwab Funds and/or Laudus Funds. |
7 | This list is not a recommendation of any security by the investment adviser. |
8 | The holdings listed exclude any temporary liquidity investments. |
Expense
Ratio1 (Annualized) |
Beginning
Account Value at 1/1/15 |
Ending
Account Value (Net of Expenses) at 6/30/15 |
Expenses
Paid During Period2 1/1/15–6/30/15 |
||
Schwab MarketTrack Growth Portfolio II | |||||
Actual Return | 0.50% | $1,000.00 | $1,025.00 | $2.51 | |
Hypothetical 5% Return | 0.50% | $1,000.00 | $1,022.32 | $2.51 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15–
6/30/15* |
1/1/14–
12/31/14 |
1/1/13–
12/31/13 |
1/1/12–
12/31/12 |
1/1/11–
12/31/11 |
1/1/10–
12/31/10 | |
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 19.43 | 19.30 | 16.04 | 14.50 | 14.89 | 13.40 |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | (0.02) | 0.28 | 0.23 | 0.29 | 0.27 | 0.20 |
Net realized and unrealized gains (losses) | 0.51 | 0.77 | 3.48 | 1.64 | (0.40) | 1.62 |
Total from investment operations | 0.49 | 1.05 | 3.71 | 1.93 | (0.13) | 1.82 |
Less distributions: | ||||||
Distributions from net investment income | (0.31) | (0.26) | (0.30) | (0.39) | (0.26) | (0.33) |
Distributions from net realized gains | (0.49) | (0.66) | (0.15) | — | — | — |
Total distributions | (0.80) | (0.92) | (0.45) | (0.39) | (0.26) | (0.33) |
Net asset value at end of period | 19.12 | 19.43 | 19.30 | 16.04 | 14.50 | 14.89 |
Total return (%) | 2.50 2 | 5.46 | 23.56 | 13.46 | (1.01) | 13.62 |
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.50 3 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 |
Gross operating expenses | 0.73 3 | 0.72 | 0.80 | 0.83 | 0.80 | 0.77 |
Net investment income (loss) | (0.18) 3 | 1.45 | 1.28 | 1.85 | 1.78 | 1.41 |
Portfolio turnover rate | 2 2 | 14 | 13 | 8 | 20 | 22 |
Net assets, end of period ($ x 1,000,000) | 32 | 33 | 32 | 28 | 28 | 29 |
* | Unaudited. |
Description | Quoted
Prices in Active Markets for Identical Assets (Level 1) |
Other
Significant Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
Total | |||||
Other Investment Companies1 | $30,681,368 | $— | $— | $30,681,368 | |||||
Short-Term Investments1 | — | 1,022,796 | — | 1,022,796 | |||||
Total | $30,681,368 | $1,022,796 | $— | $31,704,164 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $19,596,498) | $30,681,368 | |
Investments in unaffiliated issuers, (cost $1,022,796) | + | 1,022,796 |
Total investments, at value (cost $20,619,294) | 31,704,164 | |
Receivables: | ||
Dividends | 8,512 | |
Fund shares sold | + | 6,210 |
Total assets | 31,718,886 | |
Liabilities | ||
Payables: | ||
Investments bought | 8,494 | |
Investment adviser and administrator fees | 1,625 | |
Fund shares redeemed | 2,010 | |
Accrued expenses | + | 18,480 |
Total liabilities | 30,609 | |
Net Assets | ||
Total assets | 31,718,886 | |
Total liabilities | – | 30,609 |
Net assets | $31,688,277 | |
Net Assets by Source | ||
Capital received from investors | 21,158,652 | |
Distributions in excess of net investment income | (29,175) | |
Net realized capital losses | (526,070) | |
Net unrealized capital appreciation | 11,084,870 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares
Outstanding |
= | NAV |
$31,688,277 | 1,657,479 | $19.12 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $50,536 | |
Interest | + | 154 |
Total investment income | 50,690 | |
Expenses | ||
Investment adviser and administrator fees | 70,254 | |
Professional fees | 15,531 | |
Transfer agent fees | 10,439 | |
Shareholder reports | 10,277 | |
Independent trustees' fees | 4,717 | |
Portfolio accounting fees | 3,534 | |
Custodian fees | 1,480 | |
Other expenses | + | 408 |
Total expenses | 116,640 | |
Expense reduction by CSIM | – | 36,806 |
Net expenses | – | 79,834 |
Net investment loss | (29,144) | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 218,558 | |
Net realized gains on unaffiliated investments | + | 328 |
Net realized gains | 218,886 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | 592,235 |
Net realized and unrealized gains | 811,121 | |
Increase in net assets resulting from operations | $781,977 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income (loss) | ($29,144) | $459,869 | |
Net realized gains | 218,886 | 797,691 | |
Net change in unrealized appreciation (depreciation) | + | 592,235 | 447,536 |
Increase in net assets from operations | 781,977 | 1,705,096 | |
Distributions to Shareholders | |||
Distributions from net investment income | (487,490) | (416,505) | |
Distributions from net realized gains | + | (779,283) | (1,060,180) |
Total distributions | ($1,266,773) | ($1,476,685) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 29,911 | $587,879 | 192,517 | $3,699,470 | |
Shares reinvested | 66,254 | 1,266,773 | 76,512 | 1,476,685 | |
Shares redeemed | + | (115,300) | (2,264,500) | (226,925) | (4,364,176) |
Net transactions in fund shares | (19,135) | ($409,848) | 42,104 | $811,979 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 1,676,614 | $32,582,921 | 1,634,510 | $31,542,531 | |
Total increase or decrease | + | (19,135) | (894,644) | 42,104 | 1,040,390 |
End of period | 1,657,479 | $31,688,277 | 1,676,614 | $32,582,921 | |
Distributions in excess of net investment income/Net investment income not yet distributed | ($29,175) | $487,459 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Average Daily Net Assets | |
First $500 million | 0.44% |
Over $500 million | 0.39% |
Schwab International Index Fund | 0.2% |
Schwab 1000 Index Fund | 0.0%* |
Schwab S&P 500 Index Fund | 0.0%* |
Schwab Small-Cap Index Fund | 0.2% |
Schwab Total Bond Market Fund | 0.4% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.0%* |
* | Less than 0.05% |
Underlying Funds | Balance
of Shares Held at 12/31/14 |
Gross
Purchases |
Gross
Sales |
Balance
of Shares Held at 06/30/15 |
Market
Value at 06/30/15 |
Realized
Gains (Losses) 01/01/15 to 06/30/15 |
Distributions
Received* 01/01/15 to 06/30/15 | |||||||
Schwab International Index Fund | 349,591 | 6,273 | (26,118) | 329,746 | $6,347,612 | ($17,476) | $— | |||||||
Schwab 1000 Index Fund | 63,213 | 801 | (4,773) | 59,241 | 3,157,531 | $27,486 | — | |||||||
Schwab S&P 500 Index Fund | 308,110 | 4,052 | (21,113) | 291,049 | 9,470,739 | $180,713 | — | |||||||
Schwab Small-Cap Index Fund | 245,414 | 3,506 | (18,008) | 230,912 | 6,525,579 | $17,368 | — | |||||||
Schwab Total Bond Market Fund | 502,667 | 39,259 | (51,022) | 490,904 | 4,643,949 | 10,467 | 50,434 | |||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 535,869 | 89 | — | 535,958 | 535,958 | — | 102 | |||||||
Total | $30,681,368 | $218,558 | $50,536 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$761,525 | $2,417,000 |
Independent Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
John
F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director,
Gilead Sciences, Inc. (2005 – present) |
David
L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Private Investor. | 74 | Director,
Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran
M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
Charles
A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2015) |
Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
Independent Trustees (continued) | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Gerald
B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | Director,
Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph
H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Charles
R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman
and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter
W. Bettinger II2 1960 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
Officers of the Trust | |
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served3) |
Principal Occupations During the Past Five Years |
Marie
Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George
Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) |
Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar
Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett
Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008). |
David
Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine
MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2005) |
Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Boards. |
Schwab Money
Market Portfolio™ |
Semiannual report dated June 30, 2015 |
Lynn Paschen, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day management of the portfolio. Prior to joining CSIM in 2011, Ms. Paschen held a number of positions at American Century Investments. She most recently was a portfolio manager, and from 2000 to 2003 worked as a fixed income trader. She has managed money market funds since 2003. |
1 | The investment adviser and its affiliates may recapture expenses or fees they waived under a voluntary yield waiver until the third anniversary of the end of the fiscal year in which such waiver occurs, subject to certain limitations. For more information on the potential impact of such recapture on future yields, see financial note 4. |
2 | As shown in the Portfolio Holdings section of the shareholder report. |
3 | Money funds must maintain a dollar-weighted average maturity of no longer than 60 days and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months). |
4 | Tier 1 securities are rated in one of the two highest rating categories by two nationally recognized statistical rating organizations (“NRSROs”), or by one if only one NRSRO has rated the securities, or, if unrated, determined to be of comparable quality by CSIM pursuant to guidelines adopted by the Board of Trustees. Money market fund shares and U.S. government securities are also Tier 1 securities. The portfolio uses NRSRO credit ratings from Standard & Poor’s Corp., Moody’s Investors Service, Fitch Ratings, and/or DBRS. The portfolio may use different ratings provided by other rating agencies for purposes of determining compliance with the portfolio’s investment policies. The portfolio itself has not been rated by an independent credit rating agency. |
Schwab Money Market Portfolio | |
Seven-Day Yield | 0.01% |
Seven-Day Effective Yield | 0.01% |
1 | Portfolio yields do not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the yields would be less than those shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
2 | The investment adviser and its affiliates have voluntarily waived expenses to maintain a positive net yield for the portfolio (voluntary yield waiver). Without the voluntary yield waiver, the portfolio’s yield would have been lower. The voluntary yield waiver added 0.39% to the seven-day yield. Please see financial note 4 for additional details. |
Expense
Ratio1 (Annualized) |
Beginning
Account Value at 1/1/15 |
Ending
Account Value (Net of Expenses) at 6/30/15 |
Expenses
Paid During Period2 1/1/15–6/30/15 | |
Schwab Money Market Portfolio | ||||
Actual Return | 0.09% | $1,000.00 | $1,000.10 | $0.45 |
Hypothetical 5% Return | 0.09% | $1,000.00 | $1,024.35 | $0.45 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15–
6/30/15* |
1/1/14–
12/31/14 |
1/1/13–
12/31/13 |
1/1/12–
12/31/12 |
1/1/11–
12/31/11 |
1/1/10–
12/31/10 | |
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.00 1,2 | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 |
Net realized and unrealized gains (losses) | 0.00 2 | 0.00 2 | 0.00 2,3 | 0.00 2 | (0.00) 2 | (0.00) 2 |
Total from investment operations | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 |
Less distributions: | ||||||
Distributions from net investment income | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 |
Distributions from net realized gains | — | — | — | — | — | (0.00) 2 |
Total distributions | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 |
Net asset value at end of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Total return (%) | 0.01 4 | 0.01 | 0.01 | 0.01 | 0.01 | 0.05 |
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.09 5,6 | 0.07 6 | 0.08 6 | 0.12 6 | 0.10 6 | 0.18 6 |
Gross operating expenses | 0.51 5 | 0.49 | 0.52 | 0.49 | 0.45 | 0.46 |
Net investment income (loss) | 0.01 5 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 |
Net assets, end of period ($ x 1,000,000) | 100 | 117 | 106 | 116 | 144 | 149 |
* | Unaudited. |
Holdings by Category | Cost
($) |
Value
($) | |
52.5% | Fixed-Rate Obligations | 52,446,661 | 52,446,661 |
4.7% | Variable-Rate Obligations | 4,702,122 | 4,702,122 |
0.0% | Other Investment Company | 45,600 | 45,600 |
42.9% | Repurchase Agreements | 42,830,254 | 42,830,254 |
100.1% | Total Investments | 100,024,637 | 100,024,637 |
(0.1%) | Other Assets and Liabilities, Net | (130,934) | |
100.0% | Net Assets | 99,893,703 |
Issuer | Footnotes | Rate | Effective
Maturity |
Maturity
Date |
Face
Amount ($) |
Value
($) |
||||||||
Fixed-Rate Obligations 52.5% of net assets | ||||||||||||||
Government Agency Debt 47.5% | ||||||||||||||
Fannie Mae | 0.50% | 09/28/15 | 3,000,000 | 3,002,444 | ||||||||||
Farm Credit System | 4.88% | 12/16/15 | 1,500,000 | 1,531,942 | ||||||||||
3.68% | 01/12/16 | 1,525,000 | 1,552,788 | |||||||||||
Federal Home Loan Bank | 0.09% | 07/17/15 | 10,000,000 | 9,999,622 | ||||||||||
0.14% | 08/21/15 | 8,500,000 | 8,498,326 | |||||||||||
0.09% | 08/25/15 | 6,000,000 | 5,999,894 | |||||||||||
0.20% | 09/29/15 | 3,800,000 | 3,800,823 | |||||||||||
0.12% | 10/21/15 | 5,000,000 | 4,998,133 | |||||||||||
0.24% | 12/18/15 | 4,800,000 | 4,801,278 | |||||||||||
Freddie Mac | 1.75% | 09/10/15 | 3,251,000 | 3,261,203 | ||||||||||
47,446,453 | ||||||||||||||
Treasury Debt 5.0% | ||||||||||||||
United States Treasury Department | 0.25% | 07/15/15 | 5,000,000 | 5,000,208 | ||||||||||
Total Fixed-Rate Obligations | ||||||||||||||
(Cost $52,446,661) | 52,446,661 | |||||||||||||
Variable-Rate Obligations 4.7% of net assets | ||||||||||||||
Government Agency Debt 4.7% | ||||||||||||||
Fannie Mae | 0.20% | 07/16/15 | 08/12/16 | 2,100,000 | 2,100,942 | |||||||||
0.21% | 07/15/15 | 08/15/16 | 2,600,000 | 2,601,180 | ||||||||||
Total Variable-Rate Obligations | ||||||||||||||
(Cost $4,702,122) | 4,702,122 |
Security | Footnotes | Rate | Number
of Shares |
Value
($) |
||||||||||
Other Investment Company 0.0% of net assets | ||||||||||||||
Money Market Fund 0.0% | ||||||||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | (a) | 0.00% | n/a | n/a | 45,600 | 45,600 | ||||||||
Total Other Investment Company | ||||||||||||||
(Cost $45,600) | 45,600 | |||||||||||||
Issuer | Footnotes | Rate | Effective
Maturity |
Maturity
Date |
Maturity Amount ($) |
Value
($) |
||||||||
Repurchase Agreements 42.9% of net assets | ||||||||||||||
Treasury Repurchase Agreements 42.9% | ||||||||||||||
Barclays Capital, Inc | ||||||||||||||
Issued
06/30/15, repurchase date 07/01/15 (Collateralized by U.S. Treasury Securities valued at $15,300,071, 0.50% - 8.75%, due 02/15/16 - 08/15/44) |
0.10% | 07/01/15 | 15,000,042 | 15,000,000 | ||||||||||
BNP Paribas Securities Corp | ||||||||||||||
Issued
06/30/15, repurchase date 07/01/15 (Collateralized by U.S. Treasury Securities valued at $10,200,020, 0.00% - 2.50%, due 07/23/15 - 02/15/45) |
0.09% | 07/01/15 | 10,000,025 | 10,000,000 | ||||||||||
JP Morgan Securities, LLC | ||||||||||||||
Issued
06/30/15, repurchase date 07/01/15 (Collateralized by U.S. Treasury Securities valued at $18,186,875, 2.00% - 2.63%, due 07/31/20 - 11/15/20) |
0.12% | 07/01/15 | 17,830,313 | 17,830,254 | ||||||||||
Total Repurchase Agreements | ||||||||||||||
(Cost $42,830,254) | 42,830,254 |
(a) | The rate shown is the 7-day yield. |
Description | Quoted
Prices in Active Markets for Identical Assets (Level 1) |
Other
Significant Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
Total | |||||
Fixed-Rate Obligations1 | $— | $52,446,661 | $— | $52,446,661 | |||||
Variable-Rate Obligations1 | — | 4,702,122 | — | 4,702,122 | |||||
Other Investment Companies1 | 45,600 | — | — | 45,600 | |||||
Repurchase Agreements1 | — | 42,830,254 | — | 42,830,254 | |||||
Total | $45,600 | $99,979,037 | $— | $100,024,637 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments, at cost and value | $57,194,383 | |
Repurchase agreements, at cost and value | + | 42,830,254 |
Total investments, at cost and value (Note 2a) | 100,024,637 | |
Receivables: | ||
Fund shares sold | 1,004,408 | |
Interest | 64,153 | |
Receivable from investment adviser | + | 1,206 |
Total assets | 101,094,404 | |
Liabilities | ||
Payables: | ||
Fund shares redeemed | 1,179,187 | |
Distributions to shareholders | 404 | |
Accrued expenses | + | 21,110 |
Total liabilities | 1,200,701 | |
Net Assets | ||
Total assets | 101,094,404 | |
Total liabilities | – | 1,200,701 |
Net assets | $99,893,703 | |
Net Assets by Source | ||
Capital received from investors | 99,847,453 | |
Net realized capital gains | 46,250 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares
Outstanding |
= | NAV |
$99,893,703 | 99,894,278 | $1.00 | ||
Investment Income | ||
Interest | $51,477 | |
Expenses | ||
Investment adviser and administrator fees | 172,995 | |
Portfolio accounting fees | 21,878 | |
Professional fees | 19,160 | |
Shareholder reports | 15,291 | |
Transfer agent fees | 10,992 | |
Independent trustees' fees | 7,420 | |
Custodian fees | 5,046 | |
Other expenses | + | 1,028 |
Total expenses | 253,810 | |
Expense reduction by CSIM and its affiliates | – | 207,276 |
Net expenses | – | 46,534 |
Net investment income | 4,943 | |
Realized Gains (Losses) | ||
Net realized gains on investments | 70 | |
Increase in net assets resulting from operations | $5,013 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $4,943 | $11,324 | |
Net realized gains | + | 70 | 579 |
Increase in net assets from operations | 5,013 | 11,903 | |
Distributions to Shareholders | |||
Distributions from net investment income | ($4,943) | ($11,324) | |
Transactions in Fund Shares* | |||
Shares sold | 41,935,211 | 158,550,893 | |
Shares reinvested | 4,538 | 11,321 | |
Shares redeemed | + | (58,730,549) | (147,670,781) |
Net transactions in fund shares | (16,790,800) | 10,891,433 | |
Net Assets | |||
Beginning of period | 116,684,433 | 105,792,421 | |
Total increase or decrease | + | (16,790,730) | 10,892,012 |
End of period | $99,893,703 | $116,684,433 |
* | Transactions took place at $1.00 per share; figures for share quantities are the same as for dollars. |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Average Daily Net Assets | |
First $1 billion | 0.35% |
More than $1 billion but not exceeding $10 billion | 0.32% |
More than $10 billion but not exceeding $20 billion | 0.30% |
More than $20 billion but not exceeding $40 billion | 0.27% |
Over $40 billion | 0.25% |
Expiration Date | ||||||||
December 31, 2015 | December 31, 2016 | December 31, 2017 | December 31, 2018 | Total | ||||
$464,329 | $472,070 | $450,302 | $195,342 | $1,582,043 |
Independent Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
John
F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director,
Gilead Sciences, Inc. (2005 – present) |
David
L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Private Investor. | 74 | Director,
Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran
M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
Charles
A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2015) |
Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
Independent Trustees (continued) | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Gerald
B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | Director,
Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph
H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Charles
R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman
and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter
W. Bettinger II2 1960 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
Officers of the Trust | |
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served3) |
Principal Occupations During the Past Five Years |
Marie
Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George
Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) |
Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar
Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett
Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008). |
David
Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine
MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2005) |
Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Boards. |
Schwab S&P
500 Index Portfolio |
Semiannual report dated June 30, 2015 |
Agnes Hong, CFA, Vice President and Head of Passive Equity Strategies, leads the portfolio management teams of Schwab’s index mutual funds and equity ETFs. She also has overall responsibility for all aspects of the management of the portfolio. Prior to joining CSIM in 2009, Ms. Hong spent five years as a portfolio manager at Barclays Global Investors (subsequently acquired by BlackRock), where she managed institutional index funds and quantitative active funds. Prior to that, Ms. Hong worked in management consulting and product management, servicing global financial services clients. |
Ferian Juwono, CFA, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of the portfolio. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent over three years as a portfolio manager, managing equity index funds for institutional clients, and nearly two years as a senior business analyst. Prior to that, Mr. Juwono worked for over four years as a senior financial analyst with Union Bank of California. |
David Rios, Portfolio Manager, is responsible for the day-to-day co-management of the portfolio. He joined CSIM in 2008 and became a Portfolio Manager in September 2014. Prior to this role, Mr. Rios served as an Associate Portfolio Manager on the Schwab Equity Index Strategies team for four years. His first role with CSIM was as a trade operation specialist. He also previously worked as a senior fund accountant at Investors Bank & Trust (subsequently acquired by State Street Corporation). |
Portfolio and inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
Portfolio: Schwab S&P 500 Index Portfolio (11/01/96) | 1.14% | 7.20% | 17.05% | 7.74% |
S&P 500® Index | 1.23% | 7.42% | 17.34% | 7.89% |
Fund Category: Morningstar Large-Cap Blend | 1.08% | 5.49% | 15.84% | 7.26% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | As stated in the prospectus. Reflects the total annual operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
4 | Not annualized. |
5 | This list is not a recommendation of any security by the investment adviser. |
Expense
Ratio1 (Annualized) |
Beginning
Account Value at 1/1/15 |
Ending
Account Value (Net of Expenses) at 6/30/15 |
Expenses
Paid During Period2 1/1/15–6/30/15 | |
Schwab S&P 500 Index Portfolio | ||||
Actual Return | 0.23% | $1,000.00 | $1,011.40 | $1.15 |
Hypothetical 5% Return | 0.23% | $1,000.00 | $1,023.66 | $1.15 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15–
6/30/15* |
1/1/14–
12/31/14 |
1/1/13–
12/31/13 |
1/1/12–
12/31/12 |
1/1/11–
12/31/11 |
1/1/10–
12/31/10 | |
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 30.21 | 27.03 | 20.82 | 18.30 | 18.27 | 16.24 |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.31 1 | 0.48 | 0.42 | 0.41 | 0.34 | 0.38 |
Net realized and unrealized gains (losses) | 0.03 | 3.12 | 6.19 | 2.45 | 0.02 2 | 2.00 |
Total from investment operations | 0.34 | 3.60 | 6.61 | 2.86 | 0.36 | 2.38 |
Less distributions: | ||||||
Distributions from net investment income | (0.47) | (0.42) | (0.40) | (0.34) | (0.33) | (0.35) |
Net asset value at end of period | 30.08 | 30.21 | 27.03 | 20.82 | 18.30 | 18.27 |
Total return (%) | 1.14 3 | 13.41 | 32.06 | 15.74 | 1.89 | 14.68 |
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.23 4 | 0.22 | 0.24 | 0.28 | 0.27 | 0.28 |
Gross operating expenses | 0.24 4 | 0.23 | 0.26 | 0.29 | 0.28 | 0.30 |
Net investment income (loss) | 2.02 4 | 1.79 | 1.84 | 2.03 | 1.82 | 1.79 |
Portfolio turnover rate | 2 3 | 2 | 2 | 4 | 4 | 3 |
Net assets, end of period ($ x 1,000,000) | 237 | 229 | 193 | 139 | 122 | 123 |
* | Unaudited. |
Description | Quoted
Prices in Active Markets for Identical Assets (Level 1) |
Other
Significant Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
Total | |||||
Common Stock1 | $236,171,633 | $— | $— | $236,171,633 | |||||
Other Investment Companies1 | 221,118 | — | — | 221,118 | |||||
Short-Term Investments1 | — | 1,084,747 | — | 1,084,747 | |||||
Total | $236,392,751 | $1,084,747 | $— | $237,477,498 | |||||
Liabilities
Valuation Input |
|||||||||
Other Financial Instruments | |||||||||
Futures Contracts2 | ($18,211) | $— | $— | ($18,211) |
1 | As categorized in Portfolio Holdings. |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings and are valued at unrealized appreciation or depreciation. |
Assets | ||
Investments in affiliated issuers, at value (cost $188,927) | $488,085 | |
Investments in unaffiliated issuers, at value (cost $119,733,200) including securities on loan of $217,187 | 236,768,295 | |
Collateral invested for securities on loan, at value (cost $221,118) | + | 221,118 |
Total investments, at value (cost $120,143,245) | 237,477,498 | |
Deposit with broker for futures contracts | 216,200 | |
Receivables: | ||
Investments sold | 35,223 | |
Dividends | 270,892 | |
Fund shares sold | 103,912 | |
Variation margin on futures contracts | 2,753 | |
Income from securities on loan | + | 709 |
Total assets | 238,107,187 | |
Liabilities | ||
Collateral held for securities on loan | 221,118 | |
Payables: | ||
Investments bought | 198,775 | |
Investment adviser and administrator fees | 6,964 | |
Fund shares redeemed | 439,271 | |
Accrued expenses | + | 31,027 |
Total liabilities | 897,155 | |
Net Assets | ||
Total assets | 238,107,187 | |
Total liabilities | – | 897,155 |
Net assets | $237,210,032 | |
Net Assets by Source | ||
Capital received from investors | 124,371,017 | |
Net investment income not yet distributed | 2,424,516 | |
Net realized capital losses | (6,901,543) | |
Net unrealized capital appreciation | 117,316,042 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares
Outstanding |
= | NAV |
$237,210,032 | 7,886,133 | $30.08 | ||
Investment Income | ||
Dividends received from affiliated issuer | $1,740 | |
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $366) | 2,644,233 | |
Interest | 328 | |
Securities on loan | + | 6,528 |
Total investment income | 2,652,829 | |
Expenses | ||
Investment adviser and administrator fees | 177,153 | |
Portfolio accounting fees | 22,928 | |
Professional fees | 21,491 | |
Shareholder reports | 16,104 | |
Independent trustees' fees | 11,471 | |
Transfer agent fees | 10,655 | |
Index fee | 9,667 | |
Custodian fees | 6,902 | |
Interest expense | 11 | |
Other expenses | + | 1,782 |
Total expenses | 278,164 | |
Expense reduction by CSIM | – | 10,655 |
Net expenses | – | 267,509 |
Net investment income | 2,385,320 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on unaffiliated investments | 1,552,889 | |
Net realized gains on futures contracts | + | 180,807 |
Net realized gains | 1,733,696 | |
Net change in unrealized appreciation (depreciation) on affiliated issuer | 37,791 | |
Net change in unrealized appreciation (depreciation) on unaffiliated investments | (1,419,698) | |
Net change in unrealized appreciation (depreciation) on futures contracts | + | (35,287) |
Net change in unrealized appreciation (depreciation) | + | (1,417,194) |
Net realized and unrealized gains | 316,502 | |
Increase in net assets resulting from operations | $2,701,822 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $2,385,320 | $3,702,816 | |
Net realized gains | 1,733,696 | 1,355,469 | |
Net change in unrealized appreciation (depreciation) | + | (1,417,194) | 21,264,063 |
Increase in net assets from operations | 2,701,822 | 26,322,348 | |
Distributions to Shareholders | |||
Distributions from net investment income | ($3,678,538) | ($3,029,534) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 785,221 | $24,029,484 | 1,454,662 | $41,236,683 | |
Shares reinvested | 122,292 | 3,678,538 | 106,299 | 3,029,534 | |
Shares redeemed | + | (616,743) | (18,993,788) | (1,125,214) | (31,585,512) |
Net transactions in fund shares | 290,770 | $8,714,234 | 435,747 | $12,680,705 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 7,595,363 | $229,472,514 | 7,159,616 | $193,498,995 | |
Total increase | + | 290,770 | 7,737,518 | 435,747 | 35,973,519 |
End of period | 7,886,133 | $237,210,032 | 7,595,363 | $229,472,514 | |
Net investment income not yet distributed | $2,424,516 | $3,717,734 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Average Daily Net Assets | |
First $500 million | 0.15% |
More than $500 million but not exceeding $5 billion | 0.09% |
More than $5 billion but not exceeding $10 billion | 0.08% |
Over $10 billion | 0.07% |
Balance
of Shares Held at 12/31/14 |
Gross
Purchases |
Gross
Sales |
Balance
of Shares Held at 06/30/15 |
Market
Value at 06/30/15 |
Realized
Gains (Losses) 01/01/15 to 06/30/15 |
Dividends
Received 01/01/15 to 06/30/15 | ||||||
14,049 | 900 | — | 14,949 | $488,085 | $— | $1,740 |
Purchases of Securities | Sales/Maturities of Securities | |
$14,242,998 | $4,473,501 |
Expiration Date | |
December 31, 2016 | $2,623,397 |
December 31, 2017 | 1,365,160 |
December 31, 2018 | 257,470 |
Total | $4,246,027 |
Independent Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
John
F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director,
Gilead Sciences, Inc. (2005 – present) |
David
L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Private Investor. | 74 | Director,
Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran
M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
Charles
A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2015) |
Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
Independent Trustees (continued) | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Gerald
B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | Director,
Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph
H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Charles
R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman
and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter
W. Bettinger II2 1960 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
Officers of the Trust | |
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served3) |
Principal Occupations During the Past Five Years |
Marie
Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George
Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) |
Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar
Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett
Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008). |
David
Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine
MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2005) |
Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Boards. |
Schwab VIT
Balanced Portfolio |
Semiannual report dated June 30, 2015 |
Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the portfolio. She was appointed portfolio manager of the portfolio in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Portfolio and inception Date | 6 Months | 1 Year | Since Inception |
Portfolio: Schwab VIT Balanced Portfolio (07/25/12) | 0.61% | 0.01% | 5.68% |
VIT Balanced Composite Index | 1.10% | 0.74% | 6.43% |
S&P 500® Index | 1.23% | 7.42% | 18.38% |
Barclays U.S. Aggregate Bond Index | -0.10% | 1.86% | 1.36% |
Fund Category: Morningstar Conservative Allocation | 0.60% | -0.20% | 6.62% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.17%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the portfolio. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
4 | Not annualized. |
5 | The portfolio intends to primarily invest in affiliated Schwab exchange traded funds (ETFs) and unaffiliated third-party ETFs. The portfolio may also invest in affiliated Schwab and Laudus Funds and unaffiliated third party mutual funds (all such ETFs and mutual funds referred to as “underlying funds”). The portfolio may also invest directly in equity or fixed income securities, and money market investments to achieve its investment objectives. |
6 | This list is not a recommendation of any security by the investment adviser. |
7 | The holdings listed exclude any temporary liquidity investments. |
Expense
Ratio1 (Annualized) |
Beginning
Account Value at 1/1/15 |
Ending
Account Value (Net of Expenses) at 6/30/15 |
Expenses
Paid During Period2 1/1/15–6/30/15 |
||
Schwab VIT Balanced Portfolio | |||||
Actual Return | 0.58% | $1,000.00 | $1,006.10 | $2.88 | |
Hypothetical 5% Return | 0.58% | $1,000.00 | $ 1,021.92 | $ 2.91 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15–
6/30/15* |
1/1/14–
12/31/14 |
1/1/13–
12/31/13 |
7/25/12
1– 12/31/12 |
|||
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 11.61 | 11.21 | 10.50 | 10.00 | ||
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.03 2 | 0.15 2 | 0.17 2 | 0.08 | ||
Net realized and unrealized gains (losses) | 0.04 | 0.31 | 0.55 | 0.42 | ||
Total from investment operations | 0.07 | 0.46 | 0.72 | 0.50 | ||
Less distributions: | ||||||
Distributions from net investment income | (0.12) | (0.06) | (0.01) | — | ||
Distributions from net realized gains | (0.01) | (0.00) 3 | — | — | ||
Total distributions | (0.13) | (0.06) | (0.01) | — | ||
Net asset value at end of period | 11.55 | 11.61 | 11.21 | 10.50 | ||
Total return (%) | 0.61 4 | 4.15 | 6.89 | 5.00 4 | ||
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses5 | 0.58 6 | 0.57 | 0.58 | 0.58 6 | ||
Gross operating expenses5 | 0.64 6 | 0.70 | 1.07 | 10.58 6 | ||
Net investment income (loss) | 0.46 6 | 1.29 | 1.55 | 3.94 6 | ||
Portfolio turnover rate | 5 4 | 14 | 18 | 1 4 | ||
Net assets, end of period ($ x 1,000,000) | 48 | 44 | 28 | 2 | ||
* | Unaudited. |
Description | Quoted
Prices in Active Markets for Identical Assets (Level 1) |
Other
Significant Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
Total | |||||
Other Investment Companies1 | $46,913,768 | $— | $— | $46,913,768 | |||||
Short-Term Investments1 | — | 993,211 | — | 993,211 | |||||
Total | $46,913,768 | $993,211 | $— | $47,906,979 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $31,120,946) | $33,285,657 | |
Investments in unaffiliated issuers, at value (cost $14,857,216) | + | 14,621,322 |
Total investments, at value (cost $45,978,162) | 47,906,979 | |
Receivables: | ||
Investments sold | 115,889 | |
Dividends | + | 150 |
Total assets | 48,023,018 | |
Liabilities | ||
Payables: | ||
Investment adviser and administrator fees | 3,979 | |
Fund shares redeemed | 2,475 | |
Accrued expenses | + | 20,319 |
Total liabilities | 26,773 | |
Net Assets | ||
Total assets | 48,023,018 | |
Total liabilities | – | 26,773 |
Net assets | $47,996,245 | |
Net Assets by Source | ||
Capital received from investors | 46,148,817 | |
Net investment income not yet distributed | 109,122 | |
Net realized capital losses | (190,511) | |
Net unrealized capital appreciation | 1,928,817 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares
Outstanding |
= | NAV |
$47,996,245 | 4,155,354 | $11.55 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $149,317 | |
Dividends received from unaffiliated underlying funds | 96,898 | |
Interest | + | 235 |
Total investment income | 246,450 | |
Expenses | ||
Investment adviser and administrator fees | 106,284 | |
Professional fees | 15,606 | |
Transfer agent fees | 10,693 | |
Shareholder reports | 7,934 | |
Independent trustees' fees | 5,113 | |
Portfolio accounting fees | 3,716 | |
Custodian fees | 2,276 | |
Other expenses | + | 427 |
Total expenses | 152,049 | |
Expense reduction by CSIM | – | 15,060 |
Net expenses | – | 136,989 |
Net investment income | 109,461 | |
Realized and Unrealized Gains (Losses) | ||
Net realized losses on sales of affiliated underlying funds | (17,305) | |
Net realized losses on sales of unaffiliated underlying funds | + | (18,498) |
Net realized losses | (35,803) | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 379,226 | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (172,830) |
Net change in unrealized appreciation (depreciation) | + | 206,396 |
Net realized and unrealized gains | 170,593 | |
Increase in net assets resulting from operations | $280,054 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $109,461 | $487,882 | |
Net realized losses | (35,803) | (61,034) | |
Net change in unrealized appreciation (depreciation) | + | 206,396 | 918,908 |
Increase in net assets from operations | 280,054 | 1,345,756 | |
Distributions to Shareholders | |||
Distributions from net investment income | (488,556) | (222,767) | |
Distributions from net realized gains | + | (49,718) | (3,104) |
Total distributions | ($538,274) | ($225,871) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 429,770 | $5,046,276 | 1,672,538 | $19,220,062 | |
Shares reinvested | 46,604 | 538,274 | 19,338 | 225,870 | |
Shares redeemed | + | (147,303) | (1,736,939) | (387,370) | (4,422,237) |
Net transactions in fund shares | 329,071 | $3,847,611 | 1,304,506 | $15,023,695 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 3,826,283 | $44,406,854 | 2,521,777 | $28,263,274 | |
Total increase | + | 329,071 | 3,589,391 | 1,304,506 | 16,143,580 |
End of period | 4,155,354 | $47,996,245 | 3,826,283 | $44,406,854 | |
Net investment income not yet distributed | $109,122 | $488,217 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Schwab U.S. Large-Cap ETF | 0.2% |
Schwab U.S. Small-Cap ETF | 0.1% |
Schwab International Equity ETF | 0.1% |
Schwab International Small-Cap Equity ETF | 0.2% |
Schwab Emerging Markets Equity ETF | 0.2% |
Schwab U.S. REIT ETF | 0.2% |
Schwab U.S. TIPS ETF | 0.1% |
Schwab Intermediate-Term U.S. Treasury ETF | 1.6% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.1% |
Underlying Funds | Balance
of Shares Held at 12/31/14 |
Gross
Purchases |
Gross
Sales |
Balance
of Shares Held at 06/30/15 |
Market
Value at 06/30/15 |
Realized
Gains (Losses) 01/01/15 to 06/30/15 |
Distributions
Received* 01/01/15 to 06/30/15 | |||||||
Schwab U.S. Large-Cap ETF | 141,801 | 13,524 | (9,254) | 146,071 | $7,202,761 | $8,898 | $71,317 | |||||||
Schwab U.S. Small-Cap ETF | 31,894 | 4,080 | (1,256) | 34,718 | 1,994,549 | 1,358 | 12,300 | |||||||
Schwab International Equity ETF | 159,264 | 29,471 | (10,849) | 177,886 | 5,420,187 | (21,205) | — | |||||||
Schwab International Small-Cap Equity ETF | 30,897 | 2,491 | (2,526) | 30,862 | 966,289 | (6,491) | — | |||||||
Schwab Emerging Markets Equity ETF | 96,332 | 12,120 | (7,502) | 100,950 | 2,481,351 | (8,447) | — | |||||||
Schwab U.S. REIT ETF | 70,944 | 11,307 | (5,796) | 76,455 | 2,776,846 | 9,985 | 29,787 | |||||||
Schwab U.S. TIPS ETF | 13,958 | 1,675 | (590) | 15,043 | 815,481 | (1,552) | — | |||||||
Schwab Intermediate-Term U.S. Treasury ETF | 95,231 | 13,717 | (5,520) | 103,428 | 5,544,774 | 149 | 34,831 | |||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 5,182,485 | 900,934 | — | 6,083,419 | 6,083,419 | — | 1,082 | |||||||
Total | $33,285,657 | ($17,305) | $149,317 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$6,056,152 | $2,196,308 |
Independent Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
John
F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director,
Gilead Sciences, Inc. (2005 – present) |
David
L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Private Investor. | 74 | Director,
Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran
M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
Charles
A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2015) |
Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
Independent Trustees (continued) | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Gerald
B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | Director,
Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph
H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Charles
R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman
and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter
W. Bettinger II2 1960 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
Officers of the Trust | |
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served3) |
Principal Occupations During the Past Five Years |
Marie
Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George
Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) |
Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar
Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett
Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008). |
David
Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine
MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2005) |
Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Boards. |
Schwab VIT
Balanced with Growth Portfolio |
Semiannual report dated June 30, 2015 |
Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the portfolio. She was appointed portfolio manager of the portfolio in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Portfolio and inception Date | 6 Months | 1 Year | Since Inception |
Portfolio: Schwab VIT Balanced with Growth Portfolio (07/25/12) | 1.41% | 0.02% | 8.00% |
VIT Balanced with Growth Composite Index | 1.73% | 0.71% | 8.91% |
S&P 500® Index | 1.23% | 7.42% | 18.38% |
Barclays U.S. Aggregate Bond Index | -0.10% | 1.86% | 1.36% |
Fund Category: Morningstar Moderate Allocation | 1.22% | 2.06% | 10.92% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.16%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the portfolio. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
4 | Not annualized. |
5 | The portfolio intends to primarily invest in affiliated Schwab exchange traded funds (ETFs) and unaffiliated third-party ETFs. The portfolio may also invest in affiliated Schwab and Laudus Funds and unaffiliated third party mutual funds (all such ETFs and mutual funds referred to as “underlying funds”). The portfolio may also invest directly in equity or fixed income securities, and money market investments to achieve its investment objectives. |
6 | This list is not a recommendation of any security by the investment adviser. |
7 | The holdings listed exclude any temporary liquidity investments. |
Expense
Ratio1 (Annualized) |
Beginning
Account Value at 1/1/15 |
Ending
Account Value (Net of Expenses) at 6/30/15 |
Expenses
Paid During Period2 1/1/15–6/30/15 |
||
Schwab VIT Balanced with Growth Portfolio | |||||
Actual Return | 0.53% | $1,000.00 | $1,014.10 | $ 2.65 | |
Hypothetical 5% Return | 0.53% | $1,000.00 | $1,022.17 | $2.66 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15–
6/30/15* |
1/1/14–
12/31/14 |
1/1/13–
12/31/13 |
7/25/12
1– 12/31/12 |
|||
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 12.26 | 11.86 | 10.71 | 10.00 | ||
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.04 2 | 0.19 2 | 0.23 2 | 0.09 | ||
Net realized and unrealized gains (losses) | 0.13 | 0.30 | 0.93 | 0.62 | ||
Total from investment operations | 0.17 | 0.49 | 1.16 | 0.71 | ||
Less distributions: | ||||||
Distributions from net investment income | (0.15) | (0.09) | (0.01) | — | ||
Distributions from net realized gains | (0.01) | (0.00) 3 | — | — | ||
Total distributions | (0.16) | (0.09) | (0.01) | — | ||
Net asset value at end of period | 12.27 | 12.26 | 11.86 | 10.71 | ||
Total return (%) | 1.41 4 | 4.15 | 10.79 | 7.10 4 | ||
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses5 | 0.53 6 | 0.55 | 0.58 | 0.58 6 | ||
Gross operating expenses5 | 0.55 6 | 0.57 | 0.75 | 16.10 6 | ||
Net investment income (loss) | 0.57 6 | 1.53 | 2.07 | 4.80 6 | ||
Portfolio turnover rate | 4 4 | 8 | 14 | 1 4 | ||
Net assets, end of period ($ x 1,000,000) | 110 | 99 | 70 | 2 | ||
* | Unaudited. |
Description | Quoted
Prices in Active Markets for Identical Assets (Level 1) |
Other
Significant Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
Total | |||||
Other Investment Companies1 | $107,477,689 | $— | $— | $107,477,689 | |||||
Short-Term Investments1 | — | 2,905,304 | — | 2,905,304 | |||||
Total | $107,477,689 | $2,905,304 | $— | $110,382,993 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $74,028,095) | $80,542,990 | |
Investments in unaffiliated issuers, at value (cost $30,478,125) | + | 29,840,003 |
Total investments, at value (cost $104,506,220) | 110,382,993 | |
Receivables: | ||
Dividends | + | 71 |
Total assets | 110,383,064 | |
Liabilities | ||
Payables: | ||
Investments bought | 182,144 | |
Investment adviser and administrator fees | 9,631 | |
Fund shares redeemed | 21,172 | |
Accrued expenses | + | 20,811 |
Total liabilities | 233,758 | |
Net Assets | ||
Total assets | 110,383,064 | |
Total liabilities | – | 233,758 |
Net assets | $110,149,306 | |
Net Assets by Source | ||
Capital received from investors | 104,170,403 | |
Net investment income not yet distributed | 294,611 | |
Net realized capital losses | (192,481) | |
Net unrealized capital appreciation | 5,876,773 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares
Outstanding |
= | NAV |
$110,149,306 | 8,978,308 | $12.27 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $395,360 | |
Dividends received from unaffiliated underlying funds | 174,249 | |
Interest | + | 405 |
Total investment income | 570,014 | |
Expenses | ||
Investment adviser and administrator fees | 234,977 | |
Professional fees | 17,356 | |
Transfer agent fees | 10,718 | |
Shareholder reports | 7,936 | |
Independent trustees' fees | 7,008 | |
Portfolio accounting fees | 4,211 | |
Custodian fees | 2,419 | |
Other expenses | + | 817 |
Total expenses | 285,442 | |
Expense reduction by CSIM | – | 10,718 |
Net expenses | – | 274,724 |
Net investment income | 295,290 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 51,482 | |
Net realized losses on sales of unaffiliated underlying funds | + | (20,072) |
Net realized gains | 31,410 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 1,209,117 | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (282,153) |
Net change in unrealized appreciation (depreciation) | + | 926,964 |
Net realized and unrealized gains | 958,374 | |
Increase in net assets resulting from operations | $1,253,664 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $295,290 | $1,355,907 | |
Net realized gains (losses) | 31,410 | (30,819) | |
Net change in unrealized appreciation (depreciation) | + | 926,964 | 1,972,105 |
Increase in net assets from operations | 1,253,664 | 3,297,193 | |
Distributions to Shareholders | |||
Distributions from net investment income | (1,356,819) | (672,772) | |
Distributions from net realized gains | + | (87,737) | (12,459) |
Total distributions | ($1,444,556) | ($685,231) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 1,010,229 | $12,740,699 | 2,491,882 | $30,247,487 | |
Shares reinvested | 117,730 | 1,444,556 | 55,127 | 685,231 | |
Shares redeemed | + | (248,313) | (3,121,661) | (325,359) | (3,961,691) |
Net transactions in fund shares | 879,646 | $11,063,594 | 2,221,650 | $26,971,027 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 8,098,662 | $99,276,604 | 5,877,012 | $69,693,615 | |
Total increase | + | 879,646 | 10,872,702 | 2,221,650 | 29,582,989 |
End of period | 8,978,308 | $110,149,306 | 8,098,662 | $99,276,604 | |
Net investment income not yet distributed | $294,611 | $1,356,140 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Schwab U.S. Large-Cap ETF | 0.5% |
Schwab U.S. Small-Cap ETF | 0.2% |
Schwab International Equity ETF | 0.5% |
Schwab International Small-Cap Equity ETF | 0.5% |
Schwab Emerging Markets Equity ETF | 0.5% |
Schwab U.S. REIT ETF | 0.4% |
Schwab U.S. TIPS ETF | 0.3% |
Schwab Intermediate-Term U.S. Treasury ETF | 2.8% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.0%* |
* | Less than 0.05% |
Underlying Funds | Balance
of Shares Held at 12/31/14 |
Gross
Purchases |
Gross
Sales |
Balance
of Shares Held at 06/30/15 |
Market
Value at 06/30/15 |
Realized
Gains (Losses) 01/01/15 to 06/30/15 |
Distributions
Received* 01/01/15 to 06/30/15 | |||||||
Schwab U.S. Large-Cap ETF | 458,286 | 55,312 | (22,768) | 490,830 | $24,202,827 | $75,534 | $231,784 | |||||||
Schwab U.S. Small-Cap ETF | 107,162 | 12,517 | (1,426) | 118,253 | 6,793,635 | 2,659 | 40,386 | |||||||
Schwab International Equity ETF | 562,561 | 86,432 | (24,518) | 624,475 | 19,027,753 | (57,166) | — | |||||||
Schwab International Small-Cap Equity ETF | 103,790 | 10,032 | (7,425) | 106,397 | 3,331,290 | (19,923) | — | |||||||
Schwab Emerging Markets Equity ETF | 258,260 | 26,806 | (10,096) | 274,970 | 6,758,763 | (12,432) | — | |||||||
Schwab U.S. REIT ETF | 158,515 | 28,694 | (11,070) | 176,139 | 6,397,368 | 63,833 | 66,165 | |||||||
Schwab U.S. TIPS ETF | 31,344 | 4,724 | (1,324) | 34,744 | 1,883,472 | (3,184) | — | |||||||
Schwab Intermediate-Term U.S. Treasury ETF | 156,770 | 25,474 | (7,404) | 174,840 | 9,373,172 | 2,161 | 56,497 | |||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 2,774,250 | 460 | — | 2,774,710 | 2,774,710 | — | 528 | |||||||
Total | $80,542,990 | $51,482 | $395,360 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$13,625,749 | $4,084,803 |
Independent Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
John
F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director,
Gilead Sciences, Inc. (2005 – present) |
David
L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Private Investor. | 74 | Director,
Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran
M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
Charles
A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2015) |
Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
Independent Trustees (continued) | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Gerald
B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | Director,
Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph
H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Charles
R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman
and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter
W. Bettinger II2 1960 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
Officers of the Trust | |
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served3) |
Principal Occupations During the Past Five Years |
Marie
Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George
Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) |
Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar
Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett
Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008). |
David
Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine
MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2005) |
Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Boards. |
Schwab VIT
Growth Portfolio |
Semiannual report dated June 30, 2015 |
Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the portfolio. She was appointed portfolio manager of the portfolio in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Portfolio and inception Date | 6 Months | 1 Year | Since Inception |
Portfolio: Schwab VIT Growth Portfolio (07/25/12) | 2.05% | 0.13% | 10.56% |
VIT Growth Composite Index | 2.33% | 0.86% | 11.33% |
S&P 500® Index | 1.23% | 7.42% | 18.38% |
Barclays U.S. Aggregate Bond Index | -0.10% | 1.86% | 1.36% |
Fund Category: Morningstar Aggressive Allocation | 1.95% | 1.69% | 12.78% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.14%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the portfolio. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
4 | Not annualized. |
5 | The portfolio intends to primarily invest in affiliated Schwab exchange traded funds (ETFs) and unaffiliated third-party ETFs. The portfolio may also invest in affiliated Schwab and Laudus Funds and unaffiliated third party mutual funds (all such ETFs and mutual funds referred to as “underlying funds”). The portfolio may also invest directly in equity or fixed income securities, and money market investments to achieve its investment objectives. |
6 | This list is not a recommendation of any security by the investment adviser. |
7 | The holdings listed exclude any temporary liquidity investments. |
Expense
Ratio1 (Annualized) |
Beginning
Account Value at 1/1/15 |
Ending
Account Value (Net of Expenses) at 6/30/15 |
Expenses
Paid During Period2 1/1/15–6/30/15 |
||
Schwab VIT Growth Portfolio | |||||
Actual Return | 0.52% | $1,000.00 | $1,020.50 | $2.61 | |
Hypothetical 5% Return | 0.52% | $1,000.00 | $1,022.22 | $2.61 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15–
6/30/15* |
1/1/14–
12/31/14 |
1/1/13–
12/31/13 |
7/25/12
1– 12/31/12 |
|||
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 13.05 | 12.65 | 10.95 | 10.00 | ||
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.03 2 | 0.20 2 | 0.33 2 | 0.13 | ||
Net realized and unrealized gains (losses) | 0.24 | 0.30 | 1.37 | 0.82 | ||
Total from investment operations | 0.27 | 0.50 | 1.70 | 0.95 | ||
Less distributions: | ||||||
Distributions from net investment income | (0.17) | (0.10) | (0.00) 3 | — | ||
Distributions from net realized gains | (0.02) | (0.00) 3 | — | — | ||
Total distributions | (0.19) | (0.10) | (0.00) 3 | — | ||
Net asset value at end of period | 13.13 | 13.05 | 12.65 | 10.95 | ||
Total return (%) | 2.05 4 | 3.97 | 15.56 | 9.50 4 | ||
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses5 | 0.52 6 | 0.54 | 0.58 | 0.59 6,7 | ||
Gross operating expenses5 | 0.54 6 | 0.56 | 0.77 | 26.08 6 | ||
Net investment income (loss) | 0.49 6 | 1.56 | 2.72 | 3.96 6 | ||
Portfolio turnover rate | 4 4 | 9 | 9 | 29 4 | ||
Net assets, end of period ($ x 1,000,000) | 120 | 107 | 77 | 1 | ||
* | Unaudited. |
Description | Quoted
Prices in Active Markets for Identical Assets (Level 1) |
Other
Significant Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
Total | |||||
Other Investment Companies1 | $117,640,073 | $— | $— | $117,640,073 | |||||
Short-Term Investments1 | — | 3,805,292 | — | 3,805,292 | |||||
Total | $117,640,073 | $3,805,292 | $— | $121,445,365 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $93,376,501) | $101,467,711 | |
Investments in unaffiliated issuers, at value (cost $20,328,165) | + | 19,977,654 |
Total investments, at value (cost $113,704,666) | 121,445,365 | |
Receivables: | ||
Dividends | + | 78 |
Total assets | 121,445,443 | |
Liabilities | ||
Payables: | ||
Investments bought | 872,836 | |
Investment adviser and administrator fees | 10,537 | |
Fund shares redeemed | 345,275 | |
Accrued expenses | + | 20,587 |
Total liabilities | 1,249,235 | |
Net Assets | ||
Total assets | 121,445,443 | |
Total liabilities | – | 1,249,235 |
Net assets | $120,196,208 | |
Net Assets by Source | ||
Capital received from investors | 112,441,576 | |
Net investment income not yet distributed | 277,248 | |
Net realized capital losses | (263,315) | |
Net unrealized capital appreciation | 7,740,699 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares
Outstanding |
= | NAV |
$120,196,208 | 9,152,096 | $13.13 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $492,438 | |
Dividends received from unaffiliated underlying funds | 79,680 | |
Interest | + | 420 |
Total investment income | 572,538 | |
Expenses | ||
Investment adviser and administrator fees | 254,768 | |
Professional fees | 17,707 | |
Transfer agent fees | 10,693 | |
Shareholder reports | 7,721 | |
Independent trustees' fees | 7,263 | |
Portfolio accounting fees | 4,269 | |
Custodian fees | 2,493 | |
Other expenses | + | 898 |
Total expenses | 305,812 | |
Expense reduction by CSIM | – | 10,693 |
Net expenses | – | 295,119 |
Net investment income | 277,419 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 37,125 | |
Net realized losses on sales of unaffiliated underlying funds | + | (46,918) |
Net realized losses | (9,793) | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 1,759,146 | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (28,369) |
Net change in unrealized appreciation (depreciation) | + | 1,730,777 |
Net realized and unrealized gains | 1,720,984 | |
Increase in net assets resulting from operations | $1,998,403 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $277,419 | $1,520,782 | |
Net realized losses | (9,793) | (3,129) | |
Net change in unrealized appreciation (depreciation) | + | 1,730,777 | 2,093,968 |
Increase in net assets from operations | 1,998,403 | 3,611,621 | |
Distributions to Shareholders | |||
Distributions from net investment income | (1,520,306) | (780,922) | |
Distributions from net realized gains | + | (172,844) | (5,297) |
Total distributions | ($1,693,150) | ($786,219) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 1,178,922 | $15,920,619 | 2,461,736 | $31,697,774 | |
Shares reinvested | 128,953 | 1,693,150 | 59,114 | 786,219 | |
Shares redeemed | + | (326,143) | (4,343,104) | (398,632) | (5,197,010) |
Net transactions in fund shares | 981,732 | $13,270,665 | 2,122,218 | $27,286,983 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 8,170,364 | $106,620,290 | 6,048,146 | $76,507,905 | |
Total increase | + | 981,732 | 13,575,918 | 2,122,218 | 30,112,385 |
End of period | 9,152,096 | $120,196,208 | 8,170,364 | $106,620,290 | |
Net investment income not yet distributed | $277,248 | $1,520,135 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Schwab U.S. Large-Cap ETF | 0.8% |
Schwab U.S. Small-Cap ETF | 0.3% |
Schwab International Equity ETF | 0.6% |
Schwab International Small-Cap Equity ETF | 1.0% |
Schwab Emerging Markets Equity ETF | 0.7% |
Schwab U.S. REIT ETF | 0.5% |
Schwab U.S. TIPS ETF | 0.1% |
Schwab Intermediate-Term U.S. Treasury ETF | 1.6% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.0%* |
* | Less than 0.05% |
Underlying Funds | Balance
of Shares Held at 12/31/14 |
Gross
Purchases |
Gross
Sales |
Balance
of Shares Held at 06/30/2015 |
Market
Value at 06/30/2015 |
Realized
Gains (Losses) 01/01/15 to 06/30/2015 |
Distributions
Received* 01/01/15 to 06/30/2015 | |||||||
Schwab U.S. Large-Cap ETF | 642,848 | 79,750 | (13,289) | 709,309 | $34,976,027 | $27,122 | $335,613 | |||||||
Schwab U.S. Small-Cap ETF | 134,191 | 21,090 | (4,446) | 150,835 | 8,665,471 | 4,593 | 51,700 | |||||||
Schwab International Equity ETF | 750,998 | 116,160 | (24,685) | 842,473 | 25,670,152 | (67,474) | — | |||||||
Schwab International Small-Cap Equity ETF | 185,661 | 18,677 | (12,411) | 191,927 | 6,009,234 | (30,020) | — | |||||||
Schwab Emerging Markets Equity ETF | 366,374 | 56,436 | (23,647) | 399,163 | 9,811,427 | (21,168) | — | |||||||
Schwab U.S. REIT ETF | 170,419 | 39,702 | (17,208) | 192,913 | 7,006,600 | 120,584 | 72,643 | |||||||
Schwab U.S. TIPS ETF | 13,459 | 2,260 | (227) | 15,492 | 839,821 | (765) | — | |||||||
Schwab Intermediate-Term U.S. Treasury ETF | 88,127 | 18,994 | (6,203) | 100,918 | 5,410,214 | 4,253 | 31,897 | |||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3,078,254 | 511 | — | 3,078,765 | 3,078,765 | — | 585 | |||||||
Total | $101,467,711 | $37,125 | $492,438 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$16,386,173 | $4,506,578 |
Independent Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
John
F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director,
Gilead Sciences, Inc. (2005 – present) |
David
L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Private Investor. | 74 | Director,
Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran
M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
Charles
A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2015) |
Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
Independent Trustees (continued) | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served1) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Gerald
B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | Director,
Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph
H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) |
Principal
Occupations During the Past Five Years |
Number
of Portfolios in Fund Complex Overseen by the Trustee |
Other Directorships |
Charles
R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman
and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter
W. Bettinger II2 1960 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
Officers of the Trust | |
Name,
Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served3) |
Principal Occupations During the Past Five Years |
Marie
Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George
Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) |
Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar
Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett
Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008). |
David
Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine
MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2005) |
Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Boards. |
Item 2: Code of Ethics.
Not applicable to this semi-annual report.
Item 3: Audit Committee Financial Expert.
Not applicable to this semi-annual report.
Item 4: Principal Accountant Fees and Services.
Not applicable to this semi-annual report.
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
The schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11: Controls and Procedures.
(a) | Based on their evaluation of Registrants disclosure controls and procedures, as of a date within 90 days of the filing date, Registrants Chief Executive Officer, Marie Chandoha and Registrants Principal Financial Officer, George Pereira, have concluded that Registrants disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrants officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. |
(b) | During the second fiscal quarter of the period covered by this report, there have been no changes in Registrants internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrants internal control over financial reporting. |
Item 12: Exhibits.
(a) | (1) | Code of ethics not applicable to this semi-annual report. | ||
(2) | Separate certifications for Registrants principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached. | |||
(3) | Not applicable. | |||
(b) | A certification for Registrants principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSRS with the Commission. |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Annuity Portfolios
By: | /s/ Marie Chandoha | |
Marie Chandoha | ||
Chief Executive Officer | ||
Date: | August 11, 2015 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Marie Chandoha | |
Marie Chandoha | ||
Chief Executive Officer | ||
Date: | August 11, 2015 | |
By: | /s/ George Pereira | |
George Pereira | ||
Principal Financial Officer | ||
Date: | August 11, 2015 |
CERTIFICATIONS
I, Marie Chandoha, certify that:
1. I have reviewed this report on Form N-CSRS of Schwab Annuity Portfolios;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: August 11, 2015 | /s/ Marie Chandoha | |||
Marie Chandoha President and Chief Executive Officer |
CERTIFICATIONS
I, George Pereira, certify that:
1. I have reviewed this report on Form N-CSRS of Schwab Annuity Portfolios;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: August 11, 2015 | /s/ George Pereira | |||
George Pereira | ||||
Treasurer and Principal Financial Officer |
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Semiannual Report for Schwab Annuity Portfolios (issuer) on Form N-CSRS for the period ended June 30, 2015 (periodic report), each of the undersigned, being the Chief Executive Officer and Principal Financial Officer, hereby certifies, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The periodic report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer for the period presented therein.
/s/ Marie Chandoha |
Date: | August 11, 2015 | ||||||
Marie Chandoha | ||||||||
President and Chief Executive Officer |
/s/ George Pereira |
Date: | August 11, 2015 | ||||
George Pereira | ||||||
Treasurer and Principal Financial Officer |
This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSRS with the Commission.
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