<PAGE> 1
SCHWABFUNDS(R)
[LOGO]
SCHWAB MONEY
MARKET FUND
----------
SCHWAB
GOVERNMENT
MONEY FUND
----------
SCHWAB
U.S. TREASURY
MONEY FUND
SEMI-ANNUAL REPORT
JUNE 30, 1995
[Photo of the Schwab Building, San Francisco, California]
<PAGE> 2
Dear Fellow Shareholder,
This year, the SchwabFunds Family(TM) celebrates its fifth
[Photo anniversary as a mutual fund complex. This celebration
of follows an exciting 1994 when the organization experienced
Charles tremendous growth--the third largest asset growth of all
R. Schwab] mutual fund companies. By placing your trust in SchwabFunds(R),
you've helped total assets under management reach $27 billion,
ranking SchwabFunds in the top 6% of all mutual fund complexes
in just a few years.
We believe much of this success can be traced to the Schwab commitment to
serving the needs of Fund shareholders, a commitment demonstrated by the entire
SchwabFunds staff and, in particular, by our experienced team of portfolio
managers.
The 20 professionals who make up our growing portfolio management team are
devoted to monitoring the financial markets for you. Through careful and
disciplined selection of securities, they strive to construct optimal portfolios
that provide shareholders with competitive returns that meet their investment
goals. Shareholders continue to signal their trust in the 175 years of combined
experience behind our SchwabFunds portfolio management by keeping their money
invested in SchwabFunds. In fact, a large number of the 1.5 million shareholders
have been investing in the SchwabFunds Family since its first year of operation.
We believe an important part of serving your needs is keeping you informed about
your investments. For example, we've added the question and answer section of
this report, developed to address what our portfolio managers feel have been the
most pressing questions we've heard from shareholders over the period. It is one
way we hope to keep communication open between you and the people managing your
investments. In addition, now that Charles Schwab Investment Management, Inc.
will be managing the day-to-day portfolio management of the three Schwab equity
funds, we will be even better able to meet your service needs and respond to
your questions.
The SchwabFunds Family has grown to include a solid selection of funds that meet
the "core" needs of investors. The 16 funds available to retail investors offer
effective diversification of the U.S. and international equity markets, both
taxable and tax-free bonds, and a variety of money market investments. With this
level of diversification, you may use the SchwabFunds to create an efficient,
well-rounded portfolio. Or, they can serve as building blocks to an overall
investment program that includes more specialized investments.
To receive a brochure and prospectus for any of the SchwabFunds, you can call
Schwab's toll-free number, 1-800-2 NO-LOAD, or visit any one of the over 200
Schwab offices. The prospectus includes more complete information on the Funds,
including charges and expenses. Please read it carefully before investing.
I'd like to extend my personal gratitude for your trust in the SchwabFunds
Family. You should feel confident that the outstanding efforts of all those who
are part of the SchwabFunds organization will continue going forward. And, we
expect these efforts to help us meet even higher standards of excellence in the
years ahead.
/s/Charles R. Schwab
Charles R. Schwab
Chairman
Cover: The Schwab Building, San Francisco, California
<PAGE> 3
YES! I'D LIKE TO TAKE
ADVANTAGE OF AN EASY WAY
TO EFFECTIVELY DIVERSIFY MY EQUITY PORTFOLIO.
PLEASE SEND ME MORE INFORMATION, INCLUDING PROSPECTUSES, FOR THE THREE
SCHWABFUNDS(R) EQUITY INDEX FUNDS LISTED BELOW.
SCHWAB 1000 FUND(R) is designed to match the total return of the Schwab 1000
Index,(R) Schwab's own benchmark of America's 1,000 largest companies, based on
market capitalization.
SCHWAB SMALL-CAP INDEX FUND(TM) seeks to track the total return of the Schwab
Small-Cap Index,(TM) comprised of the second 1,000 largest U.S. companies,
ranked by market capitalization.
SCHWAB INTERNATIONAL INDEX FUND(TM) seeks to track the total return of the
Schwab International Index,(TM) comprised of 350 of the largest publicly traded
companies (based on market capitalization) in countries with developed
securities markets outside of the U.S.
The prospectus provides more complete information, including charges and
expenses. Please read it carefully before investing.
--------------------------------------------------------------------------------
NAME
--------------------------------------------------------------------------------
ADDRESS
--------------------------------------------------------------------------------
CITY STATE ZIP
See the back page for more information.
[SCHWABFUNDS FAMILY LOGO]
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<PAGE> 4
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NECESSARY IF
MAILED IN THE
UNITED STATES
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SAN FRANCISCO CA 94120-9588
[BARCODE]
<PAGE> 5
COMMENTS FROM THE INVESTMENT ADVISER
We're pleased to report to you on the performance of the following Schwab Money
Funds -- Schwab Money Market Fund, Schwab Government Money Fund and Schwab U.S.
Treasury Money Fund -- for the six-month period ended June 30, 1995. During the
first half of this year, all three Funds once again proved successful at
providing competitive money market returns combined with capital stability and
ready access to your money.
These Schwab Money Funds experienced strong asset growth during the period, as
both new and existing shareholders contributed additional assets to the Funds.
In the six-month reporting period ended June 30, 1995, the Schwab Money Market
Fund's total net assets rose more than $1.4 billion to $12.6 billion; the Schwab
Government Money Fund's total net assets increased by over $4 million to $1.9
billion; and the Schwab U.S. Treasury Money Fund's total net assets grew over
$202 million to $1.0 billion. These net asset totals represent new highs for
each Fund.
PERFORMANCE REVIEW
Short-term interest rates declined slightly during the first half of 1995, but
our defensive strategy of lengthening portfolio maturities effectively delayed a
corresponding decrease in the Funds' yields. The table below presents the Funds'
seven-day average yields at the end of the reporting period. As with all money
market funds, past performance is no guarantee of future results.
7-DAY AVERAGE YIELDS
(As of 6/30/95)
<TABLE>
<CAPTION>
Simple Compound
--------------------------------------------------------------------------------
<S> <C> <C>
Schwab Money Market Fund 5.36% 5.50%
--------------------------------------------------------------------------------
Schwab Government Money Fund 5.27% 5.41%
--------------------------------------------------------------------------------
Schwab U.S. Treasury Money Fund 5.22% 5.36%
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</TABLE>
KEY GOAL: CAPITAL STABILITY
If you're like most money market fund investors, preserving the value of your
investment is an important concern. That's why these Schwab Money Funds are
managed with stability of capital as a fundamental objective. To protect your
principal, the Funds seek to maintain a stable $1 share price. As with all money
market funds, of course, there can be no assurance that the Funds will be able
to maintain a $1 net asset value, and your investment is neither insured nor
guaranteed by the U.S. Government.
<PAGE> 6
HIGH-QUALITY PORTFOLIOS
These Schwab Money Funds seek to invest in diversified portfolios of short-term
debt securities. To limit credit risk, the Funds primarily invest in
high-quality securities rated in the top two rating categories by national
rating agencies. We maintain strict credit quality standards for the Funds'
portfolios, while actively managing portfolio maturity to help protect and
enhance your returns. The charts below illustrate each Fund's composition on
June 30, 1995. In addition, you'll find complete listings of the securities in
the Funds' portfolios later in this report.
SCHWAB MONEY MARKET FUND PORTFOLIO COMPOSITION
June 30, 1995
[Pie chart indicating percentages as of June 30, 1995 for the Money Market Fund]
<TABLE>
<S> <C>
Bank Notes 4%
Certificates of Deposit 12%
Commercial Paper 75%
Other 2%
Variable Rate Notes 7%
</TABLE>
The Schwab Money Market Fund invests in bank certificates of deposit, time
deposits, bankers' acceptances, highly rated commercial paper and notes,
and repurchase agreements involving obligations suitable for investment in
these categories, as well as U.S. Treasury securities and other obligations
or securities guaranteed by the U.S. or Canadian Governments, their
agencies and instrumentalities.
SCHWAB GOVERNMENT MONEY FUND PORTFOLIO COMPOSITION
June 30, 1995
[Pie chart indicating percentages as of June 30, 1995 for the Government Money
Fund]
<TABLE>
<S> <C>
Agency Coupon Notes 7%
Agency Discount Notes 37%
Agency Variable Rate Notes 17%
Repurchase Agreements 36%
U.S. Treasury Notes 3%
</TABLE>
The Schwab Government Money Fund invests exclusively in U.S. Treasury
bills, notes, bonds and other obligations issued or guaranteed by the
United States Government, its agencies, or instrumentalities, as well as
repurchase agreements covering such obligations.
<PAGE> 7
SCHWAB U.S. TREASURY MONEY FUND PORTFOLIO COMPOSITION
JUNE 30, 1995
[Pie chart indicating percentages as of June 30, 1995 for the U.S.Treasury Money
Fund]
<TABLE>
<S> <C>
U.S. Treasury Notes 53%
U.S. Treasury Bills 47%
</TABLE>
The Schwab U.S. Treasury Money Fund has invested exclusively in U.S. Treasury
bills and U. S. Treasury notes.
To enhance your understanding of the performance of these Schwab Money Funds,
the portfolio management team offers insights into economic trends and the
Funds' investment strategy in the following section. If you want more
information on the Schwab Money Funds, or any of the mutual funds in the
SchwabFunds Family(TM) visit your local Schwab office or call 1-800-2 NO-LOAD.
LOOKING FORWARD IN 1995
While the outlook for interest rates in the second half of the year is
uncertain, we remain confident that these Schwab Money Funds will continue to
strive to offer you a convenient, low-cost way to earn competitive levels of
current income without sacrificing safety and liquidity.
At SchwabFunds(R), we recognize that we earn your trust day by day. We
appreciate your continued confidence in our efforts, and we look forward to
helping you achieve your financial goals in the future.
CHARLES SCHWAB INVESTMENT MANAGEMENT, INC.
-------------------------------------------------------------------------------
KEEP ALL OF YOUR CASH WORKING
When you take advantage of these Schwab Money Funds' "sweep" feature, cash
balances of $100 or more in your Schwab account are automatically invested
regularly in the Fund you select. It's an easy, convenient way to keep all of
your excess cash working between investments. To sign up, contact your local
Schwab office or call 1-800-2 NO-LOAD.
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<PAGE> 8
QUESTIONS TO THE PORTFOLIO MANAGEMENT TEAM OF
CHARLES SCHWAB INVESTMENT MANAGEMENT, INC.
Stephen B. Ward - Senior Vice President and Chief Investment Officer
Linda Klingman - Portfolio Manager Schwab Money Market Fund
Andrea Regan - Portfolio Manager Schwab Government Money Fund and
Schwab U.S. Treasury Money Fund
Q. WHAT HAS BEEN THE ECONOMIC CLIMATE IN THE FIRST SIX MONTHS OF 1995?
A. Following an impressive 4.1% growth rate of the Gross Domestic Product (GDP)
during 1994, the highest annual growth rate in ten years, economic activity is
showing increasing signs of slowing. Recent evidence of this trend includes
slowdowns in auto sales, consumer spending and retail sales, home building and
home sales, and a somewhat dramatic slowdown in the labor markets. The GDP
growth rate for the first quarter of 1995 was 2.7%, and 0.5% for the second
quarter.
The primary reason for the slowdown in the GDP growth rate has been a series of
increases in the federal funds rate implemented by the Federal Reserve ("the
Fed") throughout 1994 and into 1995. With the high rate of growth in 1994 and a
falling civilian unemployment rate, potential inflation emerged as a major
concern at the Fed. As a result, the Fed initiated a series of increases in the
federal funds rate, resulting in a rise from 3.0% in January 1994 to 6.0% in
February 1995. As evidenced by the Fed's recent 0.25% reduction in the federal
funds rate in July 1995, these increases appear to have accomplished their
desired effect of slowing the rate of economic growth to more moderate levels
and reducing the likelihood of increases in the rate of inflation.
Q. HOW HAVE THE ECONOMIC EVENTS OF THE LAST SIX MONTHS IMPACTED SHORT-TERM
INTEREST RATES?
A. As shown on the chart on the following page, short-term interest rates have
been declining slowly since the beginning of 1995. This decline has been a
result of both anticipation that the Fed will lower interest rates, a practice
known as "easing," as well as the economic slowdown that was brought on by prior
increases in interest rates, a practice known as "tightening."
Q. HOW HAVE YOU POSITIONED THE FUNDS' PORTFOLIOS TO RESPOND TO THE CURRENT
INTEREST RATE ENVIRONMENT?
A. In response to the softer economic environment and uncertainty surrounding
the Fed's next monetary move, each Fund's average maturity was lengthened during
the six-month reporting period. For example, from 12/31/94 to 6/30/95, the
average maturity of the Schwab Money Market Fund increased from 37 days to 64
days; the Schwab Government Money Fund's average maturity increased from 41 to
53 days; and the Schwab U.S. Treasury Money Fund's average maturity increased
from 59 to 77 days. In a declining interest rate environment, lengthening
maturity helps minimize the immediate
<PAGE> 9
INTEREST RATES DECLINED IN THE FIRST HALF OF 1995
YIELDS
90-Day Commercial Paper and 3-Month Treasury Bills
January 6, 1995-June 30, 1995
[Graph of 90-Day Commercial Paper and 3-Month Treasury Bills]
<TABLE>
<CAPTION>
90-DAY 3-MONTH
DATE COMMERCIAL PAPER TREASURY BILLS
---- ---------------- --------------
<S> <C> <C>
1/6 6.29 5.90
1/13 6.17 5.69
1/20 6.17 5.90
1/27 6.24 5.90
2/3 6.23 5.95
2/10 6.14 5.97
2/17 6.16 5.85
2/24 6.12 5.88
3/3 6.13 5.89
3/10 6.19 5.93
3/17 6.15 5.90
3/24 6.14 5.84
3/31 6.15 5.87
4/7 6.15 5.85
4/14 6.13 5.75
4/21 6.09 5.78
4/28 6.09 5.86
5/5 6.11 5.76
5/12 6.05 5.86
5/19 6.06 5.86
5/26 6.04 5.83
6/2 5.98 5.57
6/9 5.91 5.76
6/16 5.96 5.64
6/23 5.94 5.51
6/30 5.94 5.57
</TABLE>
Source: Bloomberg L.P.
Note: Treasury Bills are guaranteed by the U.S. Government and, if held to
maturity, offer both a fixed rate of return and fixed principal value. Past
performance does not indicate future results.
impact to each Fund of reinvesting at lower rates. Although the Funds' yields
have decreased recently in response to the decline in market interest rates,
this strategy of lengthening maturities was successful in delaying the declines
in the Funds' yields.
Q. WHAT STANDARDS DOES THE INVESTMENT ADVISER USE IN SELECTING SECURITIES FOR
THE PORTFOLIOS?
A. Money market funds are required to hold high-quality securities in their
portfolios. For the Schwab Money Funds, we have taken the additional step of
only investing in what are referred to as First Tier securities. In general, a
First Tier security is one that is within certain maturity limits and carries
the top rating from the requisite number of Nationally Recognized Statistical
Rating Organizations (NRSROs), or is deemed to be of comparable quality by the
Trust's Board of Trustees if unrated.
One other method we utilize to increase the overall quality of the Schwab Money
Funds' portfolios is to selectively purchase securities which are insured or
backed by a letter of credit from a highly rated financial institution. These
arrangements are frequently referred to as "credit enhancements" because they
provide an incremental level of creditworthiness, in addition to the strength of
the underlying issuer. Schwab's thorough credit review of each portfolio's
securities includes ongoing review of the issuer as well as the insurance
company or financial institution providing any credit enhancement to the
security. Banks which provide enhancements on securities we purchase represent
some of the highest rated U.S., Japanese, and British banks.
<PAGE> 10
Recently there has been a fair amount of news coverage concerning the health of
the Japanese economy in general and Japanese banks in particular. As a result of
our continuous monitoring of the situation in Japan, we are confident that we
have selected the Japanese banks that are among the highest rated in the world.
Selected carefully, these banks appear to represent excellent opportunities to
provide credit enhancements which improve the overall quality of the portfolios.
Q. WE CONTINUE TO READ ABOUT PROBLEMS WITH DERIVATIVES. DO THE SCHWAB MONEY
FUNDS INVEST IN THE DERIVATIVE SECURITIES WHICH HAVE CAUSED PROBLEMS FOR OTHER
MONEY FUNDS?
A. No. Unlike some well-publicized examples, it has always been our position
that such securities are inappropriate for use in money market funds. Therefore,
the Funds have never purchased these types of securities. The Funds only invest
in securities appropriate for money market funds, such as fixed rate notes and
simple variable rate notes or variable rate demand notes. These types of
securities are used in virtually all money market funds.
Q. DO THE FUNDS OWN ANY ORANGE COUNTY SECURITIES?
A. The Schwab U.S. Treasury Money Fund and the Schwab Government Money Fund have
not invested in any securities issued by Orange County or any entities which
invested in the Orange County Investment Pool.
As of June 30, 1995, the Schwab Money Market Fund had 33 hundredths of one
percent of its net assets invested in a security issued by Orange County itself,
and, as of June 30, 1995, an additional 32 hundredths of one percent of its net
assets invested in a security issued by the Orange County Flood Control
District, which had invested in the Orange County Investment Pool. This
represented a total of 65 hundredths of one percent of the Fund's net assets,
down from a total of 3.03% when we last reported to you as of December 31, 1994.
The Fund previously owned several notes issued by cities or school districts
which invested in the Orange County Investment Pool. As of June 30, 1995, all of
these notes were paid in full.
Subsequent to the close of the June 30, 1995 reporting period, the Orange County
Flood Control District note was paid on time, in full. As a result, the only
remaining Orange County security in the Schwab Money Market Fund is the one
Orange County note referred to above, which represents 33 hundredths of one
percent of the Fund's net assets. The maturity of this note was extended to June
30, 1996 in order to give Orange County more time to develop a financial
recovery plan. The terms of the extension call for partial payments of interest
prior to June 30, 1996 with a final payment of interest together with principal
on June 30, 1996.
<PAGE> 11
Q. WHAT IS THE CURRENT STATUS OF THE ORANGE COUNTY SITUATION AND WHAT IMPACT IS
IT LIKELY TO HAVE ON THE FUNDS?
A. Since we last reported to you in the December 31, 1994 annual report, a
settlement was approved by the Federal bankruptcy court for Orange County which
allows for the distribution of most of the assets of the Orange County
Investment Pool to its former participants. Since that time, all of the cities,
school districts, and other municipal entities that had invested in the Orange
County Investment Pool, and also had outstanding notes that have reached their
maturity dates, have paid off the notes in full.
On June 27, 1995, the voters of Orange County rejected Measure R, which would
have provided additional sales tax revenue to assist Orange County in meeting
its obligations. On July 7, 1995, the owners of the Orange County direct
securities which remain outstanding agreed to extend the maturity of their
outstanding notes to June 30, 1996, in order to provide more time for the County
to develop a financial recovery plan. County officials have proposed a plan
which requires certain changes in state laws and diverts for the County's use
certain tax revenues which would otherwise go to local cities and public
agencies. This proposal has not been adopted by the County, the State of
California, or the bankruptcy court, and any actual solution must survive
serious opposition before it can result in a plan which can actually pay note
holders. In the event the County officials are not successful in adopting a
viable plan, the State of California may require that a bankruptcy trustee be
appointed.
Because the Schwab U.S. Treasury Money Fund and the Schwab Government Money Fund
own no Orange County-related securities, the bankruptcy of Orange County should
have no impact on these Funds. Since the Schwab Money Market Fund's exposure to
unenhanced Orange County-related securities is small, we do not currently
foresee any notable impact on the Fund as a result of the Fund's ownership of
the Orange County security described above.
The relatively small percentage of the Schwab Money Market Fund that invested in
Orange County securities has not caused the net asset value of the Fund to drop
below $1 per share under money market fund share valuation rules. As a
precaution, however, the Fund is a beneficiary under a letter of credit from a
major commercial bank, allowing the Fund to make demands for partial payment of
principal under certain conditions upon the security's maturity or disposition.
This letter of credit was initially established for numerous Orange
County-related notes in the amount of approximately $28 million. Subsequent to
June 30, 1995, and following the payoff of all but one of these notes, the
letter of credit was commensurately reduced to its current level of
approximately $10.4 million. The support provided by the letter of credit for
the remaining Orange County note has not been reduced. Although this Letter of
Credit provides additional support for the valuation of this note, to date it
has not been needed to maintain the Fund's net asset value of $1 per share.
<PAGE> 12
SchwabFunds(R)
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND, SCHWAB GOVERNMENT MONEY FUND
& SCHWAB U.S. TREASURY MONEY FUND
PORTFOLIO SUMMARY
(Unaudited)
--------------------------------------------------------------------------------
ASSET GROWTH
<TABLE>
<CAPTION>
Total
Net Assets Total Percentage
as of Net Assets Growth Over
6/30/95 as of 12/31/94 Reporting
(000s) (000s) Period
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Schwab Money Market Fund $12,636,573 $ 11,227,305 13%
Schwab Government Money Fund $ 1,901,714 $ 1,897,328 0%
Schwab U.S. Treasury Money Fund $ 1,006,324 $ 803,871 25%
--------------------------------------------------------------------------------
</TABLE>
AVERAGE YIELDS FOR THE PERIODS ENDED ON JUNE 30, 1995
<TABLE>
<CAPTION>
Last Last Last
Seven Days Three Months Twelve Months
----------------------------------------------------------------------------------
<S> <C> <C> <C>
Schwab Money Market Fund 5.36% 5.45% 4.83%
Schwab Government Money Fund 5.27% 5.38% 4.76%
Schwab U.S. Treasury Money Fund 5.22% 5.33% 4.67%
----------------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE
PERCENT OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
Schwab Money Market Fund
Maturity Range 9/30/94 12/31/94 3/31/95 6/30/95
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
0 - 15 Days 25.6% 29.0% 26.4% 16.7%
16 - 30 Days 17.3% 23.0% 13.3% 17.2%
31 - 60 Days 21.1% 24.7% 27.8% 24.8%
61 - 90 Days 20.0% 14.5% 25.2% 18.2%
91 - 120 Days 2.6% 7.4% 2.5% 6.9%
Over 120 Days 13.4% 1.4% 4.8% 16.2%
Weighted Average 53 Days 37 Days 46 Days 64 Days
--------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Schwab Government Money Fund
Maturity Range 9/30/94 12/31/94 3/31/95 6/30/95
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
0 - 15 Days 54.3% 49.1% 50.1% 47.0%
16 - 30 Days 1.4% 8.4% 4.3% 4.2%
31 - 60 Days 11.2% 13.9% 14.2% 14.3%
61 - 90 Days 4.7% 13.5% 16.8% 17.0%
91 - 120 Days 11.0% 4.1% 3.2% 7.8%
Over 120 Days 17.4% 11.0% 11.4% 9.7%
Weighted Average 51 Days 41 Days 47 Days 53 Days
--------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Schwab U.S. Treasury Money Fund
Maturity Range 9/30/94 12/31/94 3/31/95 6/30/95
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
0 - 15 Days 11.0% 3.8% 5.6% 3.6%
16 - 30 Days 11.3% 12.0% 22.1% 8.9%
31 - 60 Days 39.1% 37.7% 34.0% 40.9%
61 - 90 Days 23.6% 26.3% 15.9% 18.8%
91 - 120 Days 4.1% 7.9% 5.6% 8.1%
Over 120 Days 10.9% 12.3% 16.8% 19.7%
Weighted Average 57 Days 59 Days 57 Days 77 Days
--------------------------------------------------------------------
</TABLE>
PORTFOLIO QUALITY--SCHWAB MONEY MARKET FUND
<TABLE>
<CAPTION>
Percent of
SEC Tier Net Assets
Rating 6/30/95
-----------------------
<S> <C>
Tier 1 99.35%
Tier 2 0.00%
Other * 0.65%
-----------------------
</TABLE>
* Orange County-related securities currently rated below Tier 2
See Footnote 7 to the accompanying Financial Statements for further
discussion.
<PAGE> 13
SchwabFunds(R) 1
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
CORPORATE
OBLIGATIONS--75.0%(a)
ASSET BACKED SECURITIES--15.0%
Apreco, Inc.
6.15%, 07/13/95 $ 25,000 $ 24,950
6.09%, 07/25/95 25,000 24,900
6.05%, 08/01/95 17,900 17,807
6.04%, 08/08/95 17,300 17,191
6.04%, 08/18/95 25,000 24,802
6.04%, 08/23/95 20,300 20,122
6.00%, 08/30/95 10,500 10,397
5.93%, 09/20/95 24,400 24,079
Asset Securitization
Cooperative Corp.
6.08%, 07/28/95 11,000 10,950
5.87%, 08/14/95 16,000 15,887
5.87%, 08/15/95 30,000 29,783
6.05%, 08/16/95 75,000 74,429
5.95%, 09/07/95 25,000 24,722
5.97%, 09/21/95 70,000 69,062
Barton Capital Corp.
5.94%, 09/25/95 31,984 31,537
Beta Finance, Inc.
5.99%, 07/17/95 16,000 15,958
6.04%, 07/21/95 19,750 19,684
6.03%, 08/15/95 34,000 33,748
6.03%, 08/21/95 14,500 14,378
5.98%, 09/08/95 14,000 13,842
5.81%, 09/12/95 53,500 52,879
Broadway Capital Corp.
6.10%, 07/21/95 41,000 40,863
Budget Funding Corp.
5.86%, 08/31/95 28,400 28,122
Corporate Asset Funding Corp.
6.15%, 07/11/95 24,000 23,960
6.12%, 07/14/95 50,000 49,891
6.13%, 07/19/95 20,000 19,940
6.04%, 08/24/95 30,000 29,733
Corporate Receivables Corp.
6.03%, 08/08/95 25,000 24,843
6.03%, 08/11/95 20,000 19,864
6.05%, 08/14/95 35,000 34,745
6.04%, 08/18/95 20,000 19,841
6.04%, 08/25/95 25,000 24,773
5.92%, 09/13/95 25,000 24,700
5.99%, 09/19/95 25,000 24,672
5.93%, 09/20/95 22,000 21,710
5.99%, 09/21/95 25,000 24,664
5.93%, 09/22/95 40,000 39,461
ESC Securitization, Inc.
6.15%, 07/18/95 50,000 49,857
6.16%, 07/24/95 25,000 24,903
6.13%, 08/01/95 50,000 49,741
6.19%, 08/02/95 13,000 12,930
5.98%, 08/23/95 23,000 22,800
5.99%, 09/14/95 50,000 49,386
Enterprise Funding Corp.
6.11%, 07/07/95 13,258 13,245
6.01%, 07/10/95 10,615 10,599
6.17%, 07/12/95 18,425 18,391
6.13%, 07/17/95 22,844 22,783
6.11%, 07/17/95 26,207 26,137
6.16%, 07/20/95 20,882 20,815
6.11%, 07/28/95 11,000 10,950
6.05%, 08/21/95 15,384 15,254
6.08%, 08/25/95 12,459 12,345
5.93%, 09/11/95 13,040 12,887
5.92%, 09/11/95 16,419 16,228
5.94%, 09/19/95 21,537 21,257
5.94%, 09/21/95 11,102 10,954
5.76%, 11/27/95 16,483 16,101
Falcon Asset
Securitization Corp.
6.13%, 07/20/95 30,320 30,224
6.03%, 08/11/95 10,800 10,727
6.04%, 08/23/95 21,725 21,535
First Deposit Master Trust
Series 1993-3
6.07%, 08/11/95 25,000 24,830
6.04%, 08/21/95 31,800 31,532
Fleet Funding Company
6.10%, 07/12/95 30,000 29,945
6.05%, 08/18/95 19,421 19,267
McKenna Triangle
National Corp.
6.07%, 07/24/95 30,000 29,884
Preferred Receivables Corp.
6.15%, 07/18/95 23,650 23,582
5.99%, 07/25/95 13,025 12,974
6.04%, 07/27/95 9,150 9,111
6.12%, 08/04/95 36,550 36,342
Ranger Funding Corp.
6.06%, 07/05/95 22,000 21,985
6.18%, 07/12/95 10,000 9,981
6.12%, 07/24/95 15,000 14,942
6.12%, 07/26/95 10,000 9,958
6.07%, 08/16/95 11,000 10,916
6.02%, 09/12/95 10,000 9,880
5.96%, 09/19/95 22,000 21,713
WCP Funding Inc.
6.10%, 07/07/95 13,300 13,287
6.05%, 08/14/95 30,000 29,781
6.04%, 08/23/95 16,300 16,157
-----------
1,899,005
-----------
AUTOMOTIVE--5.9%
Ford Credit Europe PLC
5.99%, 07/12/95 36,300 36,234
6.27%, 07/18/95 6,000 5,983
6.12%, 07/18/95 36,000 35,897
6.04%, 07/25/95 40,000 39,841
6.05%, 07/27/95 37,500 37,338
Ford Motor Credit Co.
6.28%, 07/11/95 60,000 59,898
6.18%, 07/21/95 62,000 61,791
6.01%, 07/25/95 44,000 43,826
6.34%, 08/21/95 25,283 25,063
5.85%, 08/31/95 50,000 49,511
</TABLE>
<PAGE> 14
SchwabFunds(R) 2
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
General Motors
Acceptance Corp.
6.35%, 08/02/95 $ 12,000 $ 11,934
6.08%, 08/02/95 10,000 9,947
6.31%, 08/07/95 28,000 27,822
6.31%, 08/08/95 7,000 6,954
6.12%, 08/15/95 56,000 55,578
6.25%, 08/24/95 33,000 32,697
6.13%, 09/20/95 13,000 12,825
6.12%, 09/20/95 54,000 53,271
5.82%, 12/26/95 36,000 34,994
5.81%, 12/26/95 50,000 48,603
Hertz Corp.
6.02%, 07/28/95 43,000 42,808
Renault Credit
International SA Banque
5.83%, 09/01/95 10,000 9,901
-----------
742,716
-----------
BANKING--AUSTRALIA--1.9%
ANZ (Delaware), Inc.
6.09%, 07/26/95 17,000 16,929
National Australia Funding
(Delaware) Inc.
5.86%, 11/20/95 70,000 68,426
5.86%, 12/01/95 40,000 39,033
5.76%, 12/15/95 9,000 8,766
5.75%, 12/15/95 39,000 37,987
SBNSW Delaware, Inc.
6.13%, 07/10/95 15,000 14,977
Westpac Capital Corp.
6.14%, 07/12/95 33,000 32,939
5.82%, 09/07/95 20,000 19,784
-----------
238,841
-----------
BANKING--BELGIUM--4.3%
Cregem North America, Inc.
5.72%, 12/05/95 50,000 48,788
5.72%, 12/06/95 25,000 24,390
5.82%, 12/13/95 40,000 38,964
5.84%, 12/18/95 33,000 32,116
5.82%, 12/20/95 50,000 48,650
5.84%, 12/21/95 10,000 9,728
5.74%, 12/28/95 30,000 29,164
Generale Bank, Inc.
6.12%, 07/11/95 25,000 24,958
6.11%, 08/02/95 50,000 49,732
6.39%, 09/27/95 64,000 63,032
6.39%, 10/02/95 25,000 24,600
6.05%, 10/18/95 50,000 49,107
5.84%, 12/11/95 25,000 24,358
5.85%, 12/12/95 15,000 14,612
5.82%, 12/14/95 25,000 24,349
5.77%, 12/21/95 30,000 29,191
5.77%, 12/22/95 10,000 9,729
-----------
545,468
-----------
BANKING--DENMARK--0.6%
Den Danske Corp.
6.12%, 07/20/95 24,000 23,924
6.00%, 07/26/95 49,000 48,798
-----------
72,722
-----------
BANKING--DOMESTIC BANK
HOLDING COMPANY--2.9%
Chemical Banking Corp.
6.12%, 07/14/95 16,000 15,965
5.94%, 09/15/95 85,000 83,950
NationsBank Corp.
6.15%, 07/17/95 50,000 49,866
6.15%, 08/17/95 87,000 86,315
6.35%, 09/18/95 50,000 49,325
6.37%, 10/05/95 31,000 30,490
6.29%, 10/10/95 49,000 48,161
-----------
364,072
-----------
BANKING--DOMESTIC--0.1%
Vehicle Services of America/
(NationsBank of Texas LOC)
5.99%, 09/11/95 15,700 15,515
-----------
BANKING--FRANCE--1.3%
Indosuez N.A. Inc.
6.21%, 07/03/95 35,000 34,988
6.10%, 07/26/95 32,000 31,866
6.04%, 08/16/95 22,000 21,833
Paribas Finance, Inc.
6.11%, 07/14/95 50,000 49,891
Societe Generale N.A.
6.11%, 07/18/95 26,000 25,926
-----------
164,504
-----------
BANKING--GERMANY--1.4%
Dresdner U.S. Finance, Inc.
5.78%, 09/05/95 25,000 24,739
5.78%, 09/06/95 100,000 98,939
Siemens Corp.
6.35%, 08/28/95 25,000 24,752
6.35%, 09/01/95 30,000 29,682
-----------
178,112
-----------
BANKING--JAPAN--2.9%
Anchor Funding Corp./(Dai-Ichi
Kangyo Bank LOC)
6.07%, 08/08/95 40,000 39,748
Bancal Tri-State Corp./
(Mitsubishi Bank
Keepwell Agreement)
6.09%, 08/29/95 45,000 44,559
Deerfield Capital Corp./
(Sumitomo Bank LOC)
6.14%, 08/03/95 105,850 105,263
6.09%, 08/08/95 24,900 24,742
Mitsubishi Motors Credit of
America, Inc./
(Mitsubishi Bank LOC)
5.83%, 09/05/95 60,000 59,369
5.81%, 09/05/95 30,000 29,685
6.00%, 09/29/95 19,000 18,719
Ridge Capital II/(Dai-Ichi
Kangyo Bank LOC)
6.15%, 07/20/95 36,200 36,084
6.07%, 08/18/95 11,850 11,756
-----------
369,925
-----------
</TABLE>
<PAGE> 15
SchwabFunds(R) 3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
BANKING--NETHERLANDS--1.3%
ABN-AMRO North America
Finance Inc.
6.04%, 10/12/95 $ 10,800 $ 10,618
5.71%, 12/19/95 35,000 34,077
Internationale Nederlanden
(U.S.) Funding
6.11%, 07/17/95 95,000 94,746
6.11%, 07/18/95 24,000 23,932
-----------
163,373
-----------
BANKING--SPAIN--0.9%
Central Hispano N.A.
Capital Corp.
6.03%, 08/09/95 10,000 9,936
5.96%, 09/07/95 10,000 9,889
5.96%, 09/08/95 100,000 98,875
-----------
118,700
-----------
BANKING--UNITED KINGDOM--2.7%
Abbey National Treasury
Services PLC
6.60%, 12/15/95 30,000 30,091
Banco Nacional de Mexico S.A./
(Barclays Bank LOC)
6.23%, 07/06/95 23,000 22,980
6.13%, 07/21/95 15,000 14,950
Cheltenham & Gloucester
Building Society
6.04%, 08/18/95 9,000 8,929
Hanson Finance (UK) PLC
6.14%, 07/10/95 15,000 14,977
6.11%, 07/18/95 8,000 7,977
6.12%, 07/21/95 15,000 14,950
6.09%, 07/24/95 20,000 19,923
6.08%, 08/08/95 10,000 9,937
6.05%, 08/10/95 39,000 38,742
6.04%, 08/16/95 10,000 9,924
5.79%, 09/07/95 15,000 14,839
5.79%, 09/08/95 15,000 14,836
5.96%, 09/13/95 20,000 19,759
5.92%, 09/13/95 65,000 64,221
Yorkshire Building Society
6.15%, 07/11/95 24,000 23,960
6.10%, 07/26/95 12,000 11,950
-----------
342,945
-----------
BUILDING MATERIALS AND CONSTRUCTION--0.3%
CSR America, Inc.
6.05%, 07/19/95 24,000 23,928
6.02%, 07/28/95 8,000 7,964
CSR Finance Ltd.
6.02%, 07/28/95 10,000 9,955
-----------
41,847
-----------
COMPUTER AND OFFICE EQUIPMENT--1.4%
CSC Enterprises
5.81%, 09/07/95 25,000 24,730
6.00%, 09/12/95 25,000 24,700
5.96%, 09/21/95 12,000 11,840
Xerox Corp.
6.09%, 07/24/95 37,500 37,356
6.09%, 08/04/95 47,000 46,734
6.04%, 08/22/95 33,000 32,716
-----------
178,076
-----------
DATA PROCESSING--1.0%
Electronic Data Systems
5.99%, 09/13/95 22,000 21,733
6.00%, 09/15/95 12,000 11,850
5.92%, 09/15/95 50,000 49,385
6.00%, 09/28/95 42,000 41,400
-----------
124,368
-----------
ELECTRICAL AND ELECTRONICS--3.2%
MCA Funding Corp.
6.28%, 07/07/95 20,000 19,980
6.24%, 07/14/95 27,000 26,940
6.41%, 08/10/95 10,000 9,931
6.43%, 08/21/95 49,000 48,568
6.43%, 08/22/95 44,000 43,604
6.35%, 09/01/95 21,000 20,778
6.42%, 09/05/95 21,000 20,761
6.45%, 09/06/95 26,000 25,698
6.42%, 09/06/95 32,000 31,630
6.35%, 09/12/95 21,000 20,738
6.39%, 10/02/95 40,000 39,360
6.38%, 10/02/95 21,000 20,665
6.39%, 10/05/95 26,000 25,571
6.38%, 10/05/95 53,000 52,127
-----------
406,351
-----------
FINANCE (COMMERCIAL)--8.8%
CIT Group Holdings, Inc.
6.15%, 07/13/95 100,000 99,798
6.11%, 07/21/95 84,000 83,719
6.07%, 08/10/95 37,000 36,754
6.04%, 08/25/95 63,000 62,427
General Electric Capital Corp.
6.10%, 07/31/95 50,000 49,750
6.03%, 08/03/95 50,000 49,727
6.12%, 08/04/95 12,000 11,932
6.39%, 10/03/95 141,000 138,721
6.39%, 10/04/95 147,000 144,599
6.36%, 10/06/95 130,000 127,842
5.84%, 12/20/95 60,000 58,375
General Electric
Capital Services
6.09%, 07/25/95 63,000 62,748
6.12%, 08/04/95 50,000 49,716
6.36%, 10/05/95 25,000 24,589
5.84%, 12/20/95 50,000 48,646
National Rural Utilities
Cooperative Finance Corp.
5.99%, 09/25/95 10,000 9,859
Transamerica Finance Corp.
6.11%, 07/17/95 15,000 14,960
6.32%, 08/07/95 10,000 9,937
6.42%, 09/07/95 35,000 34,589
-----------
1,118,688
-----------
</TABLE>
<PAGE> 16
SchwabFunds(R) 4
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
FINANCE (CONSUMER)--3.6%
American Express Credit Corp.
6.12%, 07/19/95 $136,000 $ 135,591
6.09%, 07/28/95 24,000 23,892
5.84%, 12/12/95 90,000 87,675
Sears Roebuck
Acceptance Corp.
6.20%, 07/06/95 60,000 59,949
6.20%, 07/07/95 75,000 74,924
6.20%, 07/10/95 78,000 77,881
-----------
459,912
-----------
FOOD PROCESSING--0.9%
American Home Food
Products Corp.
6.18%, 07/13/95 21,000 20,957
6.02%, 07/27/95 20,000 19,914
Philip Morris Capital Corp.
6.14%, 07/06/95 25,400 25,379
6.09%, 08/02/95 4,000 3,979
Philip Morris Companies Inc.
6.14%, 07/06/95 49,800 49,758
-----------
119,987
-----------
MEDICAL SUPPLY--0.1%
Sherwood Medical Company
6.09%, 08/03/95 15,000 14,918
-----------
MINING AND MINERAL RESOURCES--0.1%
BHP Finance (U.S.A.), Inc.
6.06%, 07/31/95 17,187 17,101
-----------
MORTGAGE BANKING--0.7%
Fleet Mortgage Group, Inc.
6.01%, 07/19/95 34,000 33,899
6.01%, 07/20/95 40,000 39,874
6.03%, 07/24/95 14,000 13,947
-----------
87,720
-----------
PAPER AND WOOD PRODUCTS--0.3%
Bowater PLC
6.04%, 07/11/95 15,000 14,975
6.04%, 08/17/95 20,000 19,845
-----------
34,820
-----------
PERSONAL CARE PRODUCTS--0.4%
Colgate-Palmolive Company
5.93%, 09/07/95 30,000 29,668
5.93%, 09/08/95 20,000 19,770
-----------
49,438
-----------
PHARMACEUTICALS--0.5%
A.H. Robins Company, Inc.
6.18%, 07/12/95 49,100 49,009
6.12%, 07/28/95 17,000 16,923
-----------
65,932
-----------
SECURITIES
BROKERAGE-DEALER--12.5%
BT Securities Corp.
6.00%, 09/20/95 32,000 31,574
Bear Stearns Companies Inc.
6.11%, 07/27/95 50,000 49,783
6.12%, 08/01/95 30,000 29,844
6.12%, 08/03/95 25,000 24,862
5.99%, 08/04/95 10,000 9,944
6.04%, 08/18/95 10,000 9,921
6.01%, 08/23/95 23,000 22,799
5.96%, 09/01/95 50,000 49,494
5.91%, 09/01/95 48,000 47,518
5.84%, 12/12/95 25,000 24,354
CS First Boston, Inc.
6.00%, 07/10/95 20,000 19,970
6.18%, 07/11/95 35,000 34,941
6.00%, 07/13/95 18,000 17,964
Goldman Sachs Group, LP
6.23%, 07/20/95 32,000 31,897
6.00%, 08/09/95 50,000 49,679
6.00%, 08/10/95 83,000 82,453
6.00%, 08/11/95 83,000 82,439
6.01%, 09/08/95 50,000 49,434
6.00%, 09/14/95 32,000 31,607
5.99%, 09/14/95 110,000 108,648
6.00%, 09/19/95 20,000 19,738
5.88%, 11/17/95 90,000 88,005
5.85%, 11/20/95 40,000 39,101
Lehman Brothers Holdings Inc.
6.09%, 07/11/95 9,000 8,985
6.04%, 07/13/95 9,000 8,982
Morgan Stanley Group Inc.
6.20%, 07/05/95 46,000 45,969
6.01%, 07/07/95 43,000 42,957
6.11%, 07/26/95 50,000 49,791
6.11%, 07/27/95 50,000 49,783
6.11%, 08/02/95 37,000 36,802
6.01%, 08/07/95 19,000 18,884
Nomura Holdings America, Inc.
6.10%, 07/06/95 16,000 15,987
6.09%, 07/12/95 23,000 22,958
6.08%, 07/20/95 25,000 24,921
6.09%, 07/24/95 12,000 11,954
6.05%, 07/28/95 25,000 24,888
6.05%, 08/02/95 25,000 24,867
6.05%, 08/09/95 20,000 19,871
6.06%, 08/10/95 25,000 24,834
6.06%, 08/14/95 25,000 24,818
6.06%, 08/18/95 25,000 24,801
5.99%, 09/12/95 24,000 23,713
Paine Webber Group Inc.
6.20%, 07/18/95 35,000 34,899
Salomon Inc.
6.40%, 07/03/95 13,281 13,276
6.33%, 07/28/95 20,000 19,907
6.32%, 07/31/95 10,000 9,948
6.30%, 08/07/95 45,000 44,713
-----------
1,584,477
-----------
TOTAL CORPORATE OBLIGATIONS
(Cost $9,519,533) 9,519,533
-----------
</TABLE>
<PAGE> 17
SchwabFunds(R) 5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
VARIABLE RATE
OBLIGATIONS--6.7%(b)
ASSET BACKED SECURITIES--0.2%
Advanta Credit Card
Master Trust
6.12%, 07/07/95 $ 24,000 $ 24,000
-----------
BANKING--DOMESTIC BANK
HOLDING COMPANY--0.6%
Bankers Trust New York Corp.
6.45%, 07/01/95 75,000 75,000
-----------
BANKING--DOMESTIC--0.9%
6700 Cherry Avenue
Partners Variable Rate
Taxable Demand Bonds
Series 1993/
(Wells Fargo Bank LOC)
6.40%, 07/07/95 10,500 10,500
Boatmens National Bank
of St. Louis
6.06%, 07/05/95 10,000 10,000
Comerica Bank
5.62%, 07/04/95 50,000 49,978
PNC Bank, N.A.
6.06%, 07/17/95 50,000 50,000
-----------
120,478
-----------
BANKING--FRANCE--0.7%
City of New York General
Obligation Bonds
Fiscal 1995 Series F-8/
(Societe Generale LOC)
6.05%, 07/07/95 51,000 51,000
New Jersey Economic
Development Authority
(GE Aerospace) Series
A/(Banque Nationale de
Paris LOC)
6.11%, 07/03/95 30,150 30,150
New Jersey Economic
Development Authority
(GE Aerospace) Series
B/(Banque Nationale de
Paris LOC)
6.11%, 07/03/95 10,000 10,000
-----------
90,150
-----------
BANKING--JAPAN--0.2%
Baldwin Park
Redevelopment Agency
1993 Refunding Revenue
Bonds (Baldwin Park
Hotel Project)/
(Sumitomo Bank LOC)
6.21%, 07/11/95 15,200 15,200
Town of Islip Industrial
Development Agency
1992 Taxable Adjustable
Rate Industrial Revenue
Bonds (Nussdorf
Associates/Quality King
Distributors, Inc. Facility)/
(Bank of Tokyo LOC)
6.27%, 07/06/95 6,780 6,780
-----------
21,980
-----------
BANKING--NETHERLANDS--0.2%
New Jersey Economic
Development Authority
Adjustable Rate Lease
Revenue Taxable Bonds
(Barnes & Noble, Inc.
Distribution and Freight
Consolidation Center
Project) 1995 Series A
(Rabobank Nederland N.V.
LOC)
6.10%, 07/03/95 21,700 21,700
New Jersey Economic
Development Authority
Adjustable Rate Lease
Revenue Taxable Bonds
(Barnes & Noble, Inc.
Distribution and Freight
Consolidation Center
Project) 1995 Series B
(Rabobank Nederland N.V.
LOC)
6.10%, 07/03/95 10,000 10,000
-----------
31,700
-----------
BANKING--UNITED KINGDOM--0.4%
Abbey National Treasury
Services PLC
5.61%, 07/04/95 44,500 44,487
-----------
CITY OR COUNTY
GENERAL OBLIGATIONS--0.3%
Orange County, California
Taxable Notes Series
1994-1995(d)
6.06%, 07/10/95 41,500 41,500
-----------
HEALTHCARE--0.2%
Catholic Healthcare West
Taxable Variable Rate
Demand Bonds Series
1993A
6.00%, 07/07/95 20,400 20,400
-----------
</TABLE>
<PAGE> 18
SchwabFunds(R) 6
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
INSURANCE--0.8%
Commonwealth Life
Insurance Co.
6.28%, 09/28/95 $100,000 $ 100,000
-----------
MONOLINE INSURANCE--0.1%
New Orleans Aviation
Board Taxable Refunding
Bonds Series 1993A/
(MBIA Insurance)
6.25%, 07/07/95 7,500 7,500
-----------
PUBLIC FACILITIES--0.3%
Orange County Flood
Control District 1994-95
Taxable Notes (d)
6.09%, 07/03/95 41,000 40,999
-----------
SECURITIES
BROKERAGE-DEALER--1.8%
Bear Stearns Companies Inc.
6.16%, 07/24/95 50,000 50,000
6.10%, 09/21/95 30,000 30,000
CS First Boston, Inc.
6.13%, 09/29/95 50,000 50,000
Lehman Brothers
Holdings Inc.
6.21%, 07/30/95 100,000 100,000
-----------
230,000
-----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $849,194) 849,194
-----------
BANK NOTES--4.1%
BANKING--DOMESTIC--4.1%
MBNA America Bank N.A.
6.09%, 08/09/95 75,000 75,000
National Bank of Detroit
6.37%, 08/31/95 18,500 18,496
NationsBank of Georgia, N.A.
6.08%, 11/07/95 90,000 90,000
6.08%, 11/08/95 27,000 27,000
5.83%, 12/14/95 20,000 20,000
NationsBank of Texas, N.A.
6.09%, 11/21/95 123,000 123,000
NationsBank, N.A.
(Carolinas)
5.65%, 12/04/95 95,000 95,000
PNC Bank, N.A.
6.39%, 10/06/95 34,000 34,000
6.11%, 11/08/95 25,000 25,002
6.10%, 11/08/95 10,000 10,001
-----------
TOTAL BANK NOTES
(Cost $517,499) 517,499
-----------
CERTIFICATES OF
DEPOSIT--11.9%
BANKING--CANADA--1.9%
Bank of Nova Scotia
5.99%, 07/07/95 11,000 11,000
5.99%, 07/19/95 15,000 15,000
6.04%, 08/14/95 33,000 32,999
6.04%, 08/24/95 50,000 50,001
5.78%, 12/28/95 20,000 20,001
Canadian Imperial Bank
of Commerce
6.03%, 08/11/95 55,000 55,000
6.03%, 08/15/95 65,000 65,003
-----------
249,004
-----------
BANKING--DOMESTIC--1.6%
Chemical Bank
5.74%, 12/08/95 175,000 175,000
MBNA America Bank N.A.
6.06%, 10/16/95 10,000 10,000
6.00%, 10/19/95 20,000 20,000
-----------
205,000
-----------
BANKING--FRANCE--0.9%
Banque Nationale de Paris
5.76%, 12/14/95 25,000 25,005
5.76%, 12/27/95 25,000 25,001
Banque Paribas
6.13%, 08/03/95 15,000 15,000
Caisse Nationale de
Credit Agricole
5.86%, 12/15/95 25,000 24,993
Societe Generale
6.00%, 07/24/95 22,000 22,000
-----------
111,999
-----------
BANKING--GERMANY--1.2%
Bayerische Landesbank
Girozentrale
6.88%, 04/02/96 50,000 50,000
6.44%, 05/03/96 100,000 100,000
-----------
150,000
-----------
BANKING--JAPAN--2.5%
Fuji Bank, Ltd.
6.03%, 07/25/95 15,000 15,000
5.95%, 07/31/95 30,000 30,002
Mitsubishi Bank, Ltd.
6.03%, 09/06/95 25,000 24,988
Sanwa Bank, Ltd.
6.02%, 07/14/95 15,000 15,000
6.02%, 08/23/95 15,000 15,001
6.02%, 08/25/95 20,000 20,001
Sumitomo Bank, Ltd.
6.02%, 07/05/95 50,000 50,000
6.07%, 07/31/95 40,000 39,999
6.02%, 07/31/95 63,000 63,004
6.03%, 08/07/95 25,000 25,000
6.04%, 08/14/95 20,000 20,000
-----------
317,995
-----------
</TABLE>
<PAGE> 19
SchwabFunds(R) 7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
BANKING--NETHERLANDS--1.4%
ABN-AMRO Bank N.V.
5.71%, 12/22/95 $100,000 $ 100,004
Rabobank Nederland N.V.
6.44%, 09/05/95 25,000 24,993
5.71%, 12/22/95 50,000 50,000
-----------
174,997
-----------
BANKING--UNITED KINGDOM--2.4%
Abbey National PLC
6.04%, 08/22/95 200,000 200,000
Midland Bank PLC
5.80%, 12/15/95 62,000 62,003
National Westminster
Bank PLC
5.80%, 12/18/95 25,000 25,001
5.72%, 02/06/96 16,000 16,002
-----------
303,006
-----------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $1,512,001) 1,512,001
-----------
REMARKETED
CERTIFICATES--0.3%
ASSET BACKED SECURITIES--0.3%
Black & Decker RECOP Trust
6.05%, 07/14/95 21,731 21,731
6.02%, 08/17/95 15,000 15,000
Circuit City RECOP Trust
6.07%, 07/05/95 8,000 8,000
-----------
TOTAL REMARKETED CERTIFICATES
(Cost $44,731) 44,731
-----------
<CAPTION>
Maturity Value
-------- -----------
<S> <C> <C>
REPURCHASE
AGREEMENTS--2.0%(c)
CS First Boston, Inc.
6.10%
Issue date 06/26/95
Due 07/06/95
Collateralized by:
FNMA: $22,805 Par;
5.50% Due 11/25/06 $ 18,031 $ 18,000
Citicorp Securities, Inc.
6.00%
Issue date 06/12/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FHLMC: $29,058 Par;
6.75% Due 01/15/23
FHLMC: $15,764 Par;
6.00% Due 11/15/08
FNMA $16,489 Par;
5.50% Due 06/25/23 50,208 50,000
Salomon Brothers Inc.
6.30%
Issue date 06/30/95
Due 07/01/95
Collateralized by:
FNMA: $33,926 Par;
6.25% Due 08/25/19
FNMA: $24,332 Par;
7.00% Due 01/25/18
FHLMC: $23,923 Par;
6.25% Due 01/15/17
FHLMC: $50,000 Par;
5.88% Due 03/15/24
FHLMC: $47,983 Par;
8.50% Due 01/01/25
FNMA: $18,776 Par;
9.00% Due 11/01/24 185,032 185,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $253,000) 253,000
-----------
TOTAL INVESTMENTS--100.0%
(Cost $12,695,958) $12,695,958
===========
</TABLE>
See accompanying Notes to Schedules of Investments.
<PAGE> 20
SchwabFunds(R) 8
--------------------------------------------------------------------------------
SCHWAB GOVERNMENT MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS--17.4%(b)
Federal Home Loan Bank
6.04%, 08/14/95 $ 20,000 $ 20,000
5.67%, 09/08/95 20,000 19,976
Student Loan Marketing
Association
5.96%, 07/04/95 29,010 29,061
5.91%, 07/04/95 9,165 9,195
5.89%, 07/04/95 21,675 21,717
5.86%, 07/04/95 115,000 114,948
5.73%, 07/04/95 25,000 25,004
5.72%, 07/04/95 60,000 60,000
5.69%, 07/04/95 30,000 30,000
----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $329,901) 329,901
----------
AGENCY OBLIGATIONS--44.5%
COUPON NOTES--7.4%
Federal Home Loan Bank
5.92%, 10/03/95 15,000 14,992
7.15%, 01/26/96 28,950 28,990
6.91%, 02/21/96 26,000 26,160
Federal National Mortgage
Association
5.60%, 12/29/95 25,000 24,932
6.46%, 03/27/96 30,000 30,153
6.27%, 04/03/96 15,000 15,029
----------
140,256
----------
DISCOUNT NOTES--37.1%
Federal Home Loan Bank
6.24%, 09/27/95 13,420 13,222
6.18%, 10/04/95 13,970 13,749
6.19%, 10/10/95 6,030 5,928
6.33%, 11/03/95 20,000 19,576
Federal Home Loan Mortgage
Corp.
6.08%, 07/05/95 25,000 24,983
5.94%, 07/06/95 27,100 27,078
5.89%, 02/01/96 15,000 14,492
Federal National Mortgage
Association
5.96%, 07/21/95 20,000 19,935
6.12%, 07/24/95 20,000 19,923
6.01%, 07/27/95 34,830 34,681
6.00%, 07/28/95 5,200 5,177
6.02%, 08/02/95 25,000 24,868
6.41%, 08/14/95 25,000 24,810
6.00%, 08/25/95 25,000 24,775
6.03%, 08/28/95 19,495 19,309
5.88%, 09/08/95 20,000 19,778
5.83%, 09/11/95 20,000 19,770
5.85%, 09/12/95 55,210 54,564
5.88%, 09/19/95 25,000 24,679
6.24%, 09/21/95 19,590 19,320
6.06%, 09/22/95 14,420 14,224
5.88%, 09/22/95 25,000 24,667
6.20%, 09/25/95 20,000 19,713
5.80%, 09/25/95 24,880 24,540
6.19%, 09/26/95 23,805 23,460
5.81%, 09/28/95 22,650 22,330
5.80%, 09/28/95 23,075 22,749
5.84%, 10/06/95 35,000 34,458
6.25%, 10/24/95 31,055 30,457
5.68%, 10/25/95 21,050 20,672
5.67%, 10/27/95 11,900 11,683
6.06%, 11/13/95 10,000 9,780
5.79%, 12/18/95 15,000 14,602
----------
703,952
----------
TOTAL AGENCY OBLIGATIONS
(Cost $844,208) 844,208
----------
U.S. TREASURY OBLIGATIONS--2.7%
U.S. Treasury Notes
4.63%, 08/15/95 35,000 34,924
8.63%, 10/15/95 15,000 15,096
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $50,020) 50,020
----------
<CAPTION>
Maturity
--------
<S> <C> <C>
REPURCHASE AGREEMENTS--35.4%(c)
BA Securities, Inc. 5.92%
Issue date 06/07/95
Due 08/07/95
Collateralized by:
FNMA: $20,290 Par;
7.50% Due 03/25/17 19,784 19,588
CS First Boston Corp.
5.80%
Issue date 06/05/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FNMA: $23,440 Par;
6.25% Due 04/25/05
FNMA: $250 Par;
7.00% Due 03/01/08
FNMA: $213 Par;
5.00% Due 11/25/19
FNMA: $420 Par;
7.14% Due 12/25/15
FHLMC: $25,830 Par;
6.50% Due 03/15/24 45,913 45,678
CS First Boston Corp.
6.00%
Issue date 06/09/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FNMA: $14,804 Par;
7.09% Due 12/30/99
FNMA: $12,175 Par;
6.69% Due 04/25/22 24,738 24,623
</TABLE>
<PAGE> 21
SchwabFunds(R) 9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Maturity Value
-------- ----------
<S> <C> <C>
Donaldson, Lufkin &
Jenrette
Securities Corp. 5.95%
Issue date 06/29/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FHLMC: $13,106 Par;
7.00% Due 06/01/23
FHLMC: $11,520 Par;
7.28% Due 01/15/24
FHLMC: $290 Par;
6.00% Due 12/15/23 $ 22,781 $ 22,751
Donaldson, Lufkin &
Jenrette
Securities Corp. 5.99%
Issue date 05/25/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FNMA: $21,075 Par;
6.25% Due 06/25/20
FHLMC: $230 Par;
6.51% Due 12/15/23 20,143 20,000
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.01%
Issue date 05/23/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FHLMC: $28,350 Par;
6.46% Due 12/15/23 25,637 25,446
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.03%
Issue date 05/10/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FNMA: $16,346 Par;
8.50% Due 09/25/12
FHLMC: $15,855 Par;
7.00% Due 03/15/24
FHLMC: $630 Par;
5.81% Due 10/15/07
FHLMC: $1,100 Par;
5.75% Due 11/15/17 30,893 30,596
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.03%
Issue date 05/19/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FHLMC: $19,870 Par;
7.03% Due 09/15/21
FNMA: $3,420 Par;
6.00% Due 05/25/23
FHLMC: $16,450 Par;
7.48% Due 04/25/24
FHLMC: $210 Par;
6.51% Due 12/15/23 33,404 33,132
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.04%
Issue date 05/02/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FNMA: $40,745 Par;
5.50% Due 02/25/03 39,085 38,657
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.04%
Issue date 05/03/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FHLMC: $20,000 Par;
4.00% Due 01/15/99
FNMA: $28,525 Par;
6.50% Due 11/25/06
FNMA: $835 Par;
5.75% Due 06/25/08
FNMA: $395 Par;
7.50% Due 11/25/20
FHLMC: $24,460 Par;
4.00% Due 08/15/04
FNMA: $27,235 Par;
6.50% Due 02/25/19
FNMA: $980 Par;
5.75% Due 06/25/08
FHLMC: $420 Par;
6.51% Due 12/15/23 57,160 56,543
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.04%
Issue date 05/08/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FNMA: $50,000 Par;
6.50% Due 03/25/08
FNMA: $1,970 Par;
6.50% Due 03/25/08
FNMA: $890 Par;
7.50% Due 11/25/20 27,272 27,000
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.05%
Issue date 04/24/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FHLMC: $25,000 Par;
5.90% Due 12/15/06
FHLMC: $13,130 Par;
9.50% Due 04/15/20 28,348 28,000
</TABLE>
<PAGE> 22
SchwabFunds(R) 10
--------------------------------------------------------------------------------
SCHWAB GOVERNMENT MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Maturity Value
-------- ----------
<S> <C> <C>
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.07%
Issue date 04/17/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FHLMC: $29,305 Par;
7.03% Due 09/15/21
FHLMC: $9,430 Par;
9.00% Due 05/15/19
FNMA: $690 Par;
7.50% Due 11/25/20 $ 30,410 $ 30,000
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.07%
Issue date 04/27/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FNMA: $34,563 Par;
6.50% Due 01/25/24
FHLMC: $10,130 Par;
6.50% Due 02/15/22 34,407 34,000
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.13%
Issue date 04/05/95
Last put date 06/29/95
Due 07/06/95
Collateralized by:
FNMA: $27,278 Par;
6.46% Due 03/25/24
FNMA: $23,525 Par;
6.59% Due 12/25/20
FHLMC: $875 Par;
9.50% Due 04/15/20 43,389 42,720
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.13%
Issue date 04/06/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FHLMC: $24,495 Par;
5.88% Due 03/15/24 21,329 21,000
Donaldson, Lufkin &
Jenrette
Securities Corp. 6.25%
Issue date 06/30/94
Due 07/03/95
Collateralized by:
FHLMC: $17,257 Par;
6.50% Due 01/15/24 14,703 14,695
Goldman, Sachs & Co. 5.97%
Issue date 06/12/95
Due 08/16/95
Collateralized by:
FHLMC: $40,000 Par;
6.25% Due 03/15/04
FNMA: $15,365 Par;
5.75% Due 12/25/08 54,444 53,863
J. P. Morgan Securities,
Inc. 5.98%
Issue date 05/31/95
Due 08/29/95
Collateralized by:
FHLMC: $9,758 Par;
6.50% Due 07/15/22
FHLMC: $9,728 Par;
5.63% Due 10/15/07
FNMA: $23,004 Par;
7.50% Due 12/25/22
FNMA: $38,453 Par;
7.50% Due 10/25/07 50,748 50,000
Lehman Government
Securities, Inc. 6.00%
Issue date 05/22/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FNMA: $17,164 Par;
7.24% Due 09/25/23
FHLMC: $19,408 Par;
5.80% Due 06/15/19
FHLMC: $252 Par;
7.50% Due 06/01/09 33,026 32,775
Salomon Brothers Inc.
6.08%
Issue date 04/11/95
Last put date 06/30/95
Due 07/07/95
Collateralized by:
FHLMC: $14,000 Par;
6.50% Due 01/01/24
FNMA: $18,404 Par;
8.00% Due 02/01/22 20,901 20,598
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $671,665) 671,665
----------
TOTAL INVESTMENTS--100.0%
(Cost $1,895,794) $1,895,794
==========
</TABLE>
See accompanying Notes to Schedules of Investments.
<PAGE> 23
SchwabFunds(R) 11
--------------------------------------------------------------------------------
SCHWAB U.S. TREASURY MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--100.0%
U.S. Treasury Bills
5.36%-5.69%, 07/06/95 $14,355 $ 14,344
5.63%-6.30%, 07/13/95 21,355 21,312
5.72%-5.78%, 07/27/95 89,505 89,137
5.69%-5.81%, 08/03/95 25,415 25,282
5.70%-5.74%, 08/10/95 34,145 33,932
5.65%, 08/17/95 5,035 4,998
5.58%-5.82%, 08/24/95 69,410 68,824
5.66%-5.91%, 08/31/95 41,590 41,194
5.50%-6.04%, 09/07/95 47,025 46,525
5.53%-5.54%, 09/14/95 5,530 5,467
5.44%-5.74%, 09/21/95 73,125 72,210
5.52%-5.53%, 11/16/95 35,000 34,274
5.57%, 12/07/95 10,000 9,760
U.S. Treasury Notes
4.25%, 07/31/95 10,000 109,840
4.63%, 08/15/95 67,175 166,882
3.88%, 08/31/95 22,720 22,642
3.88%, 09/30/95 25,000 24,868
8.63%, 10/15/95 55,650 56,047
3.88%, 10/31/95 35,000 34,792
4.25%, 11/30/95 30,000 29,767
4.00%, 01/31/96 53,507 52,956
8.88%, 02/15/96 25,000 25,383
4.63%, 02/29/96 10,000 9,934
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,000,370) 1,000,370
----------
TOTAL INVESTMENTS--100.0%
(Cost $1,000,370) $1,000,370
==========
</TABLE>
NOTES TO SCHEDULES OF INVESTMENTS.
Yields shown are effective yields at the time of purchase, except for
variable rate securities which are described below and Treasury and Agency
notes which reflect the coupon rate of the security. Yields for each type
of security are stated according to the market convention for that security
type. For each security, cost (for financial reporting and federal income
tax purposes) and carrying value are the same.
(a) Certain securities purchased by the Schwab Money Market Fund are
private placement securities exempt from registration by Section 4(2) of
the Securities Act of 1933. These securities generally are issued to
institutional investors, such as the Schwab Money Market Fund. Any resale
by the Schwab Money Market Fund must be in an exempt transaction, normally
to a qualified institutional buyer. At June 30, 1995, the aggregate value
of private placement securities held by the Schwab Money Market Fund was
$2,814,866,000 which represented 22.28% of net assets. Of this total,
$2,520,135,000 or 19.94% of net assets, was determined by the Investment
Manager to be liquid in accordance with a resolution adopted by the Board
of Trustees relating to Rule 144A, promulgated under the Securities Act of
1933.
(b) Variable rate securities. Interest rates vary periodically based on
current market rates. Rates shown are the effective rates on June 30, 1995.
Dates shown represent the latter of the demand date or next interest rate
change date, which is considered the maturity date for financial reporting
purposes. For variable rate securities without demand features the next
interest reset date is shown.
(c) Due dates shown for repurchase agreements represent the earlier of the
final maturity date or put date, which is considered the maturity date for
financial statement reporting purposes. Dates of repurchase agreements
reflect the original issue date and the last put date.
<PAGE> 24
SchwabFunds(R) 12
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND, SCHWAB GOVERNMENT MONEY FUND
& SCHWAB U.S. TREASURY MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
(d) With respect to these securities, as of June 30, 1995, the Schwab Money
Market Fund was the beneficiary under a $27,993,000 irrevocable letter of
credit issued by Bank of America National Trust and Savings Association
which permitted the Fund to make a demand for partial payment of the
securities' principal amount under certain conditions upon maturity or
disposition of the securities by the Fund. Subsequent to June 30, 1995, the
$41,000,000 note issued by Orange County Flood Control District was paid in
full. Subsequent to June 30, 1995, the maturity date of the $41,500,000
direct obligation of Orange County was extended to June 30, 1996 and the
terms of the letter of credit were extended to August 1, 1996. The revised
terms for repayment of the Orange County security provide for an increase
on the security's interest rate and an interest payment schedule requiring
partial payments of interest prior to June 30, 1996, with a final payment
of interest together with principal on June 30, 1996. Subsequent to June
30, 1995, and following the pay off of all but one of these notes, the
letter of credit was reduced from $27,993,000 to its current coverage of
$10,375,000. This letter of credit does not provide complete credit
support, and therefore, the Fund continues to be exposed to some risk of
loss of principal of the Orange County security. The Charles Schwab
Corporation has agreed to reimburse the bank for any payments made by the
bank to the Fund under this letter of credit. See Note 7 to the Financial
Statements for further discussion.
<TABLE>
<CAPTION>
Abbreviations
------------
<S> <C>
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance Corporation
RECOP Remarketed Certificates of Participation
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 25
SchwabFunds(R) 13
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND, SCHWAB GOVERNMENT MONEY FUND
& SCHWAB U.S. TREASURY MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES (in thousands)
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schwab Schwab Schwab
Money Government U.S. Treasury
Market Money Money
Fund Fund Fund
----------- ---------- -------------
<S> <C> <C> <C>
ASSETS
Investments, at value
(Cost: $12,695,958, $1,895,794
and $1,000,370, respectively) $12,695,958 $1,895,794 $ 1,000,370
Cash -- -- 4
Interest receivable 18,307 11,293 8,620
Prepaid expenses 244 61 50
Deferred organization costs -- -- 18
----------- ---------- ------------
Total assets 12,714,509 1,907,148 1,009,062
----------- ---------- ------------
LIABILITIES
Payable for:
Dividends 28,278 4,189 2,152
Investments purchased 41,400 -- --
Investment advisory and
administration fee 2,976 451 152
Transfer agency and
shareholder service fees 4,384 659 328
Other 898 135 106
----------- ---------- -------------
Total liabilities 77,936 5,434 2,738
----------- ---------- -------------
Net assets applicable to
outstanding shares $12,636,573 $1,901,714 $ 1,006,324
============ =========== ============
NET ASSETS CONSIST OF:
Capital paid in $12,636,923 $1,901,821 $ 1,006,404
Accumulated net realized loss
on investments sold (350) (107) (80)
----------- ---------- ------------
$12,636,573 $1,901,714 $ 1,006,324
=========== ========== ============
THE PRICING OF SHARES
Outstanding shares,
$0.00001 par value
(unlimited shares authorized) 12,636,923 1,901,821 1,006,404
Net asset value, offering and
redemption price per share $1.00 $1.00 $1.00
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 26
SchwabFunds(R) 14
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND, SCHWAB GOVERNMENT MONEY FUND
& SCHWAB U.S. TREASURY MONEY FUND
STATEMENT OF OPERATIONS (in thousands)
For the six months ended June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schwab Schwab Schwab
Money Government U.S. Treasury
Market Money Money
Fund Fund Fund
-------- ---------- -------------
<S> <C> <C> <C>
Interest income $359,216 $56,311 $26,095
-------- ------- -------
Expenses:
Investment advisory and
administration fee 24,239 4,050 2,031
Transfer agency and
shareholder service fees 26,321 4,173 1,987
Custodian fees 421 129 99
Registration fees 459 51 91
Professional fees 135 27 15
Shareholder reports 497 94 29
Trustees' fees 29 5 2
Amortization of deferred
organization costs and
other prepaid expenses 103 3 7
Insurance and other expenses 212 30 10
-------- ------- -------
52,416 8,562 4,271
Less expenses reduced (8,548) (1,607) (1,401)
-------- ------- -------
Total expenses incurred by Fund 43,868 6,955 2,870
-------- ------- -------
Net investment income 315,348 49,356 23,225
Net realized gain (loss) on
investments sold 4 -- (8)
-------- ------- -------
Increase in net assets resulting
from operations $315,352 $49,356 $23,217
========= ======= =======
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 27
SchwabFunds(R) 15
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND, SCHWAB GOVERNMENT MONEY FUND
& SCHWAB U.S. TREASURY MONEY FUND
STATEMENT OF CHANGES IN NET ASSETS (in thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schwab Money Schwab Government Schwab U.S. Treasury
Market Fund Money Fund Money Fund
--------------------------- -------------------------- -------------------------
For the six For the six For the six
months ended For the months ended For the months ended For the
June 30, year ended June 30, year ended June 30, year ended
1995 December 31, 1995 December 31, 1995 December 31,
(Unaudited) 1994 (Unaudited) 1994 (Unaudited) 1994
------------ ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 315,348 $ 371,652 $ 49,356 $ 68,248 $ 23,225 $ 19,233
Net realized gain (loss)
on investments sold 4 (124) -- (23) (8) (45)
------------ ------------ ----------- ----------- ----------- -----------
Increase in net assets
resulting from
operations 315,352 371,528 49,356 68,225 23,217 19,188
------------ ------------ ----------- ----------- ----------- -----------
Dividends to
shareholders from net
investment income (315,348) (371,652) (49,356) (68,248) (23,225) (19,233)
------------ ------------ ----------- ----------- ----------- -----------
Capital Share
Transactions (dollar
amounts and
number of shares
are the same):
Proceeds from
shares sold 16,860,238 27,194,342 2,078,641 4,092,811 1,485,687 1,791,760
Net asset value of
shares issued in
reinvestment of
dividends 347,864 323,920 55,330 61,588 24,333 15,433
Less payments for
shares redeemed (15,798,838) (24,455,432) (2,129,585) (4,001,651) (1,307,559) (1,381,420)
------------ ------------ ----------- ----------- ----------- -----------
Increase in net assets
from capital share
transactions 1,409,264 3,062,830 4,386 152,748 202,461 425,773
------------ ------------ ----------- ----------- ----------- -----------
Total increase in
net assets 1,409,268 3,062,706 4,386 152,725 202,453 425,728
------------ ------------ ----------- ----------- ----------- -----------
Net Assets:
Beginning of period 11,227,305 8,164,599 1,897,328 1,744,603 803,871 378,143
------------ ------------ ----------- ----------- ----------- -----------
End of period $ 12,636,573 $ 11,227,305 $ 1,901,714 $ 1,897,328 $ 1,006,324 $ 803,871
============ ============ =========== =========== =========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 28
SchwabFunds(R) 16
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND, SCHWAB GOVERNMENT MONEY FUND
& SCHWAB U.S. TREASURY MONEY FUND
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
1. DESCRIPTION OF THE FUNDS
The Schwab Money Market Fund, the Schwab Government Money Fund and the Schwab
U.S. Treasury Money Fund (the "Funds") are series of The Charles Schwab Family
of Funds (the "Trust"), an open-end, management investment company organized as
a Massachusetts business trust on October 20, 1989 and registered under the
Investment Company Act of 1940, as amended.
In addition to the three funds described above, the Trust also offers -- the
Schwab Tax-Exempt Money Fund, the Schwab California Tax-Exempt Money Fund, the
Schwab New York Tax-Exempt Money Fund, the Schwab Value Advantage Money Fund(R),
the Schwab Institutional Advantage Money Fund(TM) and the Schwab Retirement
Money Fund(TM). The assets of each series are segregated and accounted
for separately.
The Schwab Money Market Fund invests primarily in a diversified portfolio of
short-term obligations of major banks and corporations. The Schwab Government
Money Fund invests exclusively in a diversified portfolio of obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities and
repurchase agreements thereon. The Schwab U.S. Treasury Money Fund invests
solely in United States Treasury notes, bills and other direct obligations of
the United States Treasury, backed by the full faith and credit of the United
States Government.
2. SIGNIFICANT ACCOUNTING POLICIES
Security valuation -- Investments are stated at amortized cost which
approximates market value.
Security transactions and interest income -- Security transactions, in the
accompanying financial statements, are accounted for on a trade date basis (date
the order to buy or sell is executed). Interest income is recorded on the
accrual basis and includes amortization of premium and accretion of discount on
investments. Realized gains and losses from security transactions are determined
on an identified cost basis.
Repurchase agreements -- Repurchase agreements are fully collateralized by
U.S. Treasury or Government agency securities. All collateral is held by the
Funds' custodian and is monitored daily to ensure that its market value at least
equals the repurchase price under the agreement.
Dividends to shareholders -- Each Fund declares a daily dividend, equal to its
net investment income for that day, payable monthly.
Deferred organization costs -- Costs incurred in connection with the
organization of the Funds, their initial registration with the Securities and
Exchange Commission and with various states are amortized on a straight-line
basis over a five year period from each Fund's commencement of operations.
Expenses -- Expenses arising in connection with a Fund are charged directly to
that Fund. Expenses common to all series of the Trust are allocated to each
series in proportion to their relative net assets.
Federal income taxes -- It is each Fund's policy to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all net investment income and realized net capital gains, if any, to
<PAGE> 29
SchwabFunds(R) 17
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
shareholders. Therefore, no federal income tax provision is required. Each Fund
is considered a separate entity for tax purposes.
3. TRANSACTIONS WITH AFFILIATES
Investment advisory and administration agreements -- The Trust has investment
advisory and administration agreements with Charles Schwab Investment
Management, Inc. (the "Investment Manager"). For advisory services and
facilities furnished, the Schwab Money Market Fund pays an annual fee, payable
monthly, of .46% of the first $2 billion of average daily net assets, .45% of
such assets over $2 billion, and .40% of such assets in excess of $3 billion.
For advisory services and facilities furnished, the Schwab Government Money Fund
and the Schwab U.S. Treasury Money Fund each pay an annual fee, payable monthly,
of .46% of the first $1 billion of each Fund's average daily net assets, .41% of
such assets over $1 billion, and .40% of such assets in excess of $2 billion.
Under these agreements, the Schwab Money Market Fund, the Schwab Government
Money Fund and the Schwab U.S. Treasury Money Fund incurred investment advisory
and administration fees of $24,239,000, $4,050,000 and $2,031,000, respectively,
during the six months ended June 30, 1995, before the Investment Manager reduced
its fee (see Note 4).
Transfer agency and shareholder service agreements -- The Trust has transfer
agency and shareholder service agreements with Charles Schwab & Co., Inc.
("Schwab"). For services provided under these agreements, Schwab receives an
annual fee, payable monthly, of .45% of each Fund's average daily net assets.
For the six months ended June 30, 1995, the Schwab Money Market Fund, the Schwab
Government Money Fund and the Schwab U.S. Treasury Money Fund incurred transfer
agency and shareholder service fees of $26,321,000, $4,173,000 and $1,987,000,
respectively, before Schwab reduced its fees (see Note 4).
Officers and trustees -- Certain officers and trustees of the Trust are also
officers or directors of the Investment Manager and/or Schwab. During the six
months ended June 30, 1995, the Trust made no direct payments to its officers or
trustees who are "interested persons" within the meaning of the Investment
Company Act of 1940, as amended. The Schwab Money Market Fund, the Schwab
Government Money Fund and the Schwab U.S. Treasury Money Fund incurred fees of
$29,000, $5,000 and $2,000, respectively, related to the Trust's unaffiliated
trustees.
4. EXPENSES REDUCED BY THE INVESTMENT MANAGER AND SCHWAB
The Investment Manager and Schwab reduced a portion of their fees in order to
limit each Fund's ratio of operating expenses to average net assets. For the six
months ended June 30, 1995, the total of such fees reduced by the Investment
Manager was $7,277,000, $1,361,000 and $1,192,000 for the Schwab Money Market
Fund, the Schwab Government Money Fund and the Schwab U.S. Treasury Money Fund,
respectively, and the total of such fees reduced by Schwab was $1,271,000,
$246,000 and $209,000 for the Schwab Money Market Fund, the Schwab Government
Money Fund and the Schwab U.S. Treasury Money Fund, respectively.
<PAGE> 30
SchwabFunds(R) 18
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND, SCHWAB GOVERNMENT MONEY FUND
& SCHWAB U.S. TREASURY MONEY FUND
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS
Purchases, sales and maturities of investment securities during the six months
ended June 30, 1995, were as follows (in thousands):
<TABLE>
<CAPTION>
Schwab
Schwab Money Schwab Government U.S. Treasury
Market Fund Money Fund Money Fund
------------ ----------------- -------------
<S> <C> <C> <C>
Purchases $28,361,855 $5,658,800 $2,094,238
Proceeds of sales and
maturities $26,962,051 $5,661,555 $1,897,099
</TABLE>
6. FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the
period:
<TABLE>
<CAPTION>
Schwab Money Market Fund
-----------------------------------------------------------------------------------
For the period
January 26, 1990
(commencement
For the six of operations)
months ended to
June 30, 1995 For the year ended December 31, December 31,
(Unaudited) 1994 1993 1992 1991 1990
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment
----------------------
Operations
----------
Net investment income .03 .04 .03 .03 .06 .07
Net realized and
unrealized gain (loss)
on investments -- -- -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Total from investment
operations .03 .04 .03 .03 .06 .07
Less Distributions
------------------
Dividends from net
investment income (.03) (.04) (.03) (.03) (.06) (.07)
Distributions from realized
gain on investments -- -- -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Total distributions (.03) (.04) (.03) (.03) (.06) (.07)
----------- ----------- ---------- ---------- ---------- ----------
Net asset value at
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
=========== =========== ========== ========== ========== ==========
Total return (%) 2.70 3.68 2.67 3.48 5.70 7.23
----------------
Ratios/Supplemental Data
------------------------
Net assets, end of
period (000s) $12,636,573 $11,227,305 $8,164,599 $6,134,167 $4,866,584 $4,058,408
Ratio of expenses to
average net assets (%) .75* .74 .73 .70 .78 .82*
Ratio of net investment
income to average
net assets (%) 5.39* 3.68 2.64 3.40 5.52 7.51*
</TABLE>
The Investment Manager and Schwab have reduced a portion of their fees and
absorbed certain expenses in order to limit each Fund's ratio of operating
expenses to average net assets. Had these fees and expenses not been reduced and
absorbed, the ratio of expenses to average net assets for the Schwab Money
Market Fund for the periods ended June 30, 1995, December 31, 1994, 1993, 1992,
1991 and 1990 would
* Annualized
<PAGE> 31
SchwabFunds(R) 19
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
have been .90%*, .90%, .91%, .92%, .94% and .95%*, respectively, and the ratio
of net investment income to average net assets would have been 5.24%*, 3.52%,
2.46%, 3.18%, 5.36% and 7.38%*, respectively.
<TABLE>
<CAPTION>
Schwab Government Money Fund
---------------------------------------------------------------------------------
For the period
January 26, 1990
(commencement
For the six of operations)
months ended to
June 30, 1995 For the year ended December 31, December 31,
(Unaudited) 1994 1993 1992 1991 1990
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment
----------------------
Operations
----------
Net investment income .03 .04 .03 .03 .05 .07
Net realized and
unrealized gain (loss)
on investments -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations .03 .04 .03 .03 .05 .07
Less Distributions
------------------
Dividends from net
investment income (.03) (.04) (.03) (.03) (.05) (.07)
Distributions from
realized gain on
investments -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (.03) (.04) (.03) (.03) (.05) (.07)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ========== ==========
Total return (%) 2.67 3.62 2.66 3.42 5.53 7.23
----------------
Ratios/Supplemental Data
------------------------
Net assets, end of
period (000s) $1,901,714 $1,897,328 $1,744,603 $1,592,793 $1,458,705 $1,424,377
Ratio of expenses to
average net assets (%) .75* .74 .73 .72 .70 .70*
Ratio of net investment
income to average
net assets (%) 5.32* 3.56 2.63 3.36 5.38 7.51*
</TABLE>
The Investment Manager and Schwab have reduced a portion of their fees and
absorbed certain expenses in order to limit each Fund's ratio of operating
expenses to average net assets. Had these fees and expenses not been reduced and
absorbed, the ratio of expenses to average net assets for the Schwab Government
Money Fund for the periods ended June 30, 1995, December 31, 1994, 1993, 1992,
1991 and 1990 would have been .92%*, .92%, .93%, .94%, .95% and .96%*,
respectively, and the ratio of net investment income to average net assets would
have been 5.15%*, 3.38%, 2.43%, 3.14%, 5.13% and 7.25%*, respectively.
* Annualized
<PAGE> 32
SchwabFunds(R) 20
--------------------------------------------------------------------------------
SCHWAB MONEY MARKET FUND, SCHWAB GOVERNMENT MONEY FUND
& SCHWAB U.S. TREASURY MONEY FUND
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schwab U.S. Treasury Money Fund
----------------------------------------------------------------------
For the period
November 6, 1991
(commencement
For the six of operations)
months ended to
June 30, 1995 For the year ended December 31, December 31,
(Unaudited) 1994 1993 1992 1991
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment
----------------------
Operations
----------
Net investment income .03 .04 .03 .03 .01
Net realized and unrealized
gain (loss) on investments -- -- -- -- --
---------- -------- -------- -------- -------
Total from investment operations .03 .04 .03 .03 .01
Less Distributions
------------------
Dividends from net
investment income (.03) (.04) (.03) (.03) (.01)
Distributions from realized
gain on investments -- -- -- -- --
---------- -------- -------- -------- -------
Total distributions (.03) (.04) (.03) (.03) (.01)
---------- -------- -------- -------- -------
Net asset value at
end of period $1.00 $1.00 $1.00 $1.00 $1.00
========== ======== ======== ======== =======
Total return (%) 2.64 3.52 2.54 3.26 .68
----------------
Ratios/Supplemental Data
------------------------
Net assets, end of
period (000s) $ 1,006,324 $803,871 $378,143 $178,895 $ 16,906
Ratio of expenses to
average net assets (%) .65* .65 .65 .59 .24*
Ratio of net investment income
to average net assets (%) 5.26* 3.60 2.50 2.91 4.11*
</TABLE>
The Investment Manager and Schwab have reduced a portion of their fees and
absorbed certain expenses in order to limit each Fund's ratio of operating
expenses to average net assets. Had these fees and expenses not been reduced and
absorbed, the ratio of expenses to average net assets for the Schwab U.S.
Treasury Money Fund for the periods ended June 30, 1995, December 31, 1994,
1993, 1992 and 1991 would have been .97%*, 1.00%, 1.05%, 1.15% and 4.11%*,
respectively, and the ratio of net investment income to average net assets would
have been 4.94%*, 3.25%, 2.10%, 2.35% and .24%*, respectively.
* Annualized
<PAGE> 33
SchwabFunds(R) 21
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
7. COMMITMENTS AND CONTINGENCIES
On December 6, 1994, Orange County, California and the investment pool
maintained by Orange County filed for protection under Chapter 9 of the federal
Bankruptcy Code. As of June 30, 1995, the Schwab Money Market Fund had 0.32% of
its net assets, or $41,000,000, invested in a security issued by the Orange
County Flood Control District, a participant in the investment pool maintained
by Orange County, California and 0.33% of its net assets, or $41,500,000, in a
security issued directly by Orange County. On August 1, 1995, the note issued by
the Orange County Flood Control District was paid in full. The only remaining
Orange County security held by the Schwab Money Market Fund is the $41,500,000
Orange County note. Subsequent to June 30, 1995, but prior to the Orange County
security's maturity date, the terms of this security were revised to extend the
maturity to June 30, 1996. In addition to extending the maturity date, the
revised terms provide for an increase to the security's interest rate and an
interest payment schedule requiring partial payments of interest prior to June
30, 1996 with a final payment of interest together with principal on June 30,
1996.
As of June 30, 1995, the Schwab Money Market Fund was the beneficiary under a
$27,993,000 irrevocable letter of credit issued by Bank of America National
Trust and Savings Association which permitted the Fund to make a demand for
partial payment under certain conditions upon maturity or disposition of several
Orange County related notes. Subsequent to June 30, 1995, the terms of the
letter of credit were extended from August 1, 1995 to August 1, 1996 and
following the pay off of all but one of these notes, the letter of credit was
reduced to its current coverage of $10,375,000. This letter of credit does not
provide complete credit support, and therefore, the Fund continues to be exposed
to some risk of loss of principal of the Orange County security. The Charles
Schwab Corporation has agreed to reimburse the bank for any payments made by the
bank to the Fund under this letter of credit. The letter of credit has not been
needed to maintain the Fund's net asset value of $1.00 per share.
<PAGE> 34
THIS SPACE IS RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE> 35
THIS SPACE IS RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE> 36
THIS SPACE IS RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE> 37
CAPTURING GROWTH OPPORTUNITIES DOESN'T HAVE TO BE GUESSWORK.
Large-cap stocks, small-cap stocks, or international stocks? It's difficult to
predict which stock market segment will come out ahead during given time
periods, especially since these markets do not always move in tandem. While one
market segment may be experiencing only moderate growth, others, at the same
time, may be expanding rapidly.
SchwabFunds(R) three equity index funds help you take some of the guesswork out
of equity investing. These Funds provide a way for you to put the growth
potential of all three markets into your portfolio--rather than relying on just
one market. The Funds offer an easy and efficient way to achieve a broad level
of effective equity diversification. In fact, they provide market coverage that
could require investments in many more funds.
[Figuire 1] Schwab 1000 Fund(R) is designed to match the total return of the
Schwab 1000 Index(R), which is comprised of the largest 1,000
publicly traded U.S. companies--the stocks of which represent
about 91% of the total market capitalization of the U.S. stock
market. 1
[Figuire 2] Schwab Small-Cap Index Fund(TM) is designed to track the total
return of the Schwab Small-Cap Index,(TM) which tracks the
performance of smaller-capitalization companies. The Schwab
Small-Cap Index is comprised of the second 1,000 largest publicly
traded companies in the U.S. 1
[Figuire 3] Schwab International Index Fund(TM) is designed to track the total
return of the Schwab International Index(TM), which is comprised
of 350 of the largest companies, based on market capitalization,
in foreign countries with developed securities markets. 2
You can begin building your diversified equity investment portfolio with the
three SchwabFunds equity index funds by calling Schwab at the toll-free number
below, or by sending back the enclosed postcard. We'll be happy to provide you
with a free prospectus and brochure for the Funds.
EACH PROSPECTUS PROVIDES MORE COMPLETE INFORMATION, INCLUDING CHARGES AND
EXPENSES. PLEASE READ IT CAREFULLY BEFORE INVESTING.
--------------------------------------------------------------------------------
SCHWAB'S FUNDMAP(TM) SOFTWARE MAKES FUND
SELECTION EASIER.
FundMap Mutual Fund Selection Software for Windows(R) allows you to calculate
your long-term investment needs and can help you to decide how much you may need
to invest in each of the three SchwabFunds equity index funds. 3 You can
explore ways to allocate your assets, even re-evaluate your current strategy
and set up several "what if" scenarios. SchwabFunds and FundMap make it easy
for you to build a diversified portfolio today.
--------------------------------------------------------------------------------
1-800-2 NO-LOAD
1-800-266-5623
1 Each Index consists of publicly traded companies ranked by market
capitalization. Each Index does not include privately held companies,
investment companies and companies incorporated outside of the United
States.
2 The Index is comprised of publicly traded companies ranked by market
capitalization in countries with developed securities markets around the
world. It does not include privately held companies, investment companies,
or companies from the United States.
3 FundMap is available for Schwab customers only. Please allow 2-4 weeks for
delivery.
Windows is a registered trademark of Microsoft Corporation.
<PAGE> 38
--------------
BULK RATE
U.S. POSTAGE
PAID
CHARLES SCHWAB
--------------
[SCHWABFUNDS FAMILY(TM) LOGO]
101 Montgomery Street
San Francisco, California 94104
INVESTMENT ADVISER
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
DISTRIBUTOR
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
CRS 3852 TF3634R (8/95) Printed on recycled paper.
