<PAGE> 1
SchwabFunds(R)
Schwab
Money Funds
Value Advantage
Investments(R)
[Graphic - The Schwab Building, San Francisco, California]
Annual Report
December 31, 1996
<PAGE> 2
Dear Shareholder,
[Photo of It's been an exciting year at SchwabFunds(R). With the support of
Charles R. investors like you, the SchwabFunds Family(R) continues to rank
Schwab] among the largest and fastest-growing mutual fund complexes in
the nation. In total, Charles Schwab Investment Management, Inc.
(CSIM) manages over $40 billion in assets for approximately 2.5
million shareholders. Today CSIM offers investors 30 funds
spanning a spectrum of financial markets and investing styles.
You'll find in-depth information on the performance of your SchwabFunds
investment in the following pages.
SMART NEW WAYS TO DIVERSIFY YOUR PORTFOLIO
Now more than ever, investors tell us they're looking for new ways to diversify
their portfolios in order to manage risk and enhance return potential. But with
literally thousands of mutual funds to choose from, analyzing and selecting
funds can be an overwhelming task. That's why we've introduced the new Schwab
OneSource Portfolios -- three "funds of funds" that span both U.S. and
international markets. Each OneSource Portfolio is actively managed by an
experienced portfolio manager who invests primarily in a variety of mutual funds
from well-known fund families, monitors their performance and adjusts the
portfolio mix in response to certain changes in the markets. So you can get
diversification among different funds and investing styles.
OPENING NEW CHANNELS OF COMMUNICATION
If you're among the millions of people exploring the Internet, I encourage you
to visit our Web site at WWW.SCHWAB.COM. There you'll find a wealth of online
information about SchwabFunds as well as a wide range of investments and
resources available from Schwab. You can access the latest mutual fund
performance data, request a free fund prospectus, trade funds and more -- all
from the comfort of your home or office, 24 hours a day. It's just one more way
we're harnessing the latest technology to make investing easier and more
convenient.
Thank you for placing your trust in SchwabFunds. In the year ahead, we'll
continue working to provide you with an expanding range of investment
opportunities to meet your needs.
/s/ Charles R. Schwab
-----------------------------
Charles R. Schwab
Cover: The Schwab Building, San Francisco, California
<PAGE> 3
KEEP YOUR
MONEY WORKING
HARDER!
----------------------------------
USE THIS ENVELOPE TO EASILY ADD
TO YOUR SCHWAB VALUE ADVANTAGE
INVESTMENTS.(R)
CHARLES SCHWAB
<PAGE> 4
WE'VE MADE IT EASIER FOR YOU! TAKE ADVANTAGE OF THIS OPPORTUNITY TO ADD TO YOUR
SCHWAB VALUE ADVANTAGE INVESTMENTS.(R)
Now, you can add to your account by using this convenient Schwab
investment envelope. It's a simple, easy way to increase your invest-
ment. You can also have money transferred to your fund directly
from your bank account or payroll check using Schwab's free
Automatic Investment Plan (AIP). If you'd like more information
on AIP, just check the appropriate box on the coupon. We'll send
you everything you need to get started.
DON'T DELAY. USE THIS CONVENIENT INVESTMENT ENVELOPE AND SEND YOUR CHECK TODAY!
- -------------------------------------------------------------------------------
PLEASE DETACH HERE.
SCHWAB VALUE ADVANTAGE
INVESTMENTS(R) COUPON
- ---------------------
Please enclose your check and this completed investment
coupon in the attached postage-paid envelope.
- -----------------------------
Name
$
- --------------------------------------
Amount of Investment*
[ ] Check here if you would like more investment coupons for future use.
[ ] Check here if you would like more information on Schwab's Automatic
Investment Plan (AIP).
*THIS ENVELOPE MAY NOT BE USED FOR INITIAL INVESTMENTS. SUBSEQUENT INVESTMENT
MINIMUM IS $5,000. ($2,000 FOR IRAs AND OTHER RETIREMENT ACCOUNTS INVESTED IN
THE SCHWAB VALUE ADVANTAGE MONEY FUND)
Please indicate to which Schwab Value Advantage Investment(s) your investment
should go:
-
- --------- ----------
SCHWAB ACCOUNT NUMBER
[ ] Schwab Value Advantage Money Fund (R)
[ ] Schwab Municipal Money Fund -- Value Advantage Shares(TM)
[ ] Schwab California Municipal Money Fund -- Value
Advantage Shares(TM) (for California taxpayers only)
[ ] Schwab New York Municipal Money Fund -- Value
Advantage Shares(TM) (for New York taxpayers only)
IF NO FUND IS INDICATED, YOUR INVESTMENT WILL GO INTO THE SWEEP MONEY
FUND YOU'VE DESIGNATED IN YOUR SCHWAB ACCOUNT.
----------------------------------------
(LIFT HERE FOR MORE INFORMATION)
----------------------------------------
(C)1997 Charles Schwab & Co., Inc. All rights reserved. Member SIPC/NYSE.
Printed on recycled paper. TP4505 (2/97) CRS 11011.
<PAGE> 5
CHARLESSCHWAB
JUST FOLLOW THESE EASY STEPS TO INVEST IN YOUR SCHWAB VALUE ADVANTAGE
INVESTMENTS:
1. Fill out the Schwab investment coupon completely, THIS ENVELOPE MUST
including your name, account number, amount of your BE PRECEDED OR
check and signature. Please use one coupon for each ACCOMPANIED BY A
account. CURRENT PROSPECTUS.
AN INVESTMENT IN A
2. Make your check payable to CHARLES SCHWAB & CO., FUND IS NEITHER INSURED
INC. and enclose your check with the completed NOR GUARANTEED BY THE
coupon in this postage-paid envelope. U.S. GOVERNMENT. THERE
CAN BE NO ASSURANCE
3. Then just drop your investment envelope in the THAT A FUND WILL BE
mail today--and start putting your money to work! ABLE TO MAINTAIN A
If you have any questions, don't hesitate to call STABLE NET ASSET VALUE
1-800-2 NO LOAD. OF $1.00 PER SHARE.
<PAGE> 6
Attn: Dept. FP 333-7
--------------
NO POSTAGE
NECESSARY IF
MAILED IN THE
UNITED STATES
--------------
-------------------------------------
BUSINESS REPLY MAIL
FIRST-CLASS MAIL PERMIT NO. 18125 [BAR CODE]
SAN FRANCISCO, CA
-------------------------------------
POSTAGE WILL BE PAID BY ADDRESSEE
CHARLES SCHWAB & CO INC
PO BOX 7778
SAN FRANCISCO CA 94120-9419
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<S> <C>
OVERVIEW ................................................... 1
SCHWAB MUNICIPAL MONEY FUND-VALUE ADVANTAGE SHARES(TM)...... 2
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND-
VALUE ADVANTAGE SHARES(TM).................................. 4
SCHWAB NEW YORK MUNICIPAL MONEY FUND-
VALUE ADVANTAGE SHARES(TM).................................. 6
ECONOMIC HIGHLIGHTS ........................................ 9
QUESTIONS TO THE PORTFOLIO MANAGEMENT TEAM ................. 13
GLOSSARY OF TERMS .......................................... 18
PORTFOLIO SUMMARY .......................................... 19
FINANCIAL STATEMENTS AND NOTES ............................. 22
RESULTS OF SPECIAL SHAREHOLDERS MEETING AND PROXY VOTE...... 116
</TABLE>
OVERVIEW
We're pleased to report on the performance of your investment in the Schwab
Value Advantage Investments(R) for the year ended December 31, 1996. This report
covers:
- - Schwab Municipal Money Fund-Value Advantage Shares(TM)
- - Schwab California Municipal Money Fund-Value Advantage Shares(TM)
- - Schwab New York Municipal Money Fund-Value Advantage Shares(TM)
During the year, all three Schwab Value Advantage Investments provided you with
competitive tax-exempt current income,1 combined with capital stability and
liquidity.
The Schwab Value Advantage Investments seek to maintain a stable $1 share price
to protect your principal. As with all money funds, however, there can be no
assurance that a Fund will be able to maintain a $1 net asset value per share.
It's also important to understand that your investment is not insured or
guaranteed by the U.S. government.
THE NAMES OF THE THREE SCHWAB MUNICIPAL MONEY FUNDS WERE CHANGED FROM SCHWAB
TAX-EXEMPT MONEY FUNDS ON JANUARY 2, 1997 TO REFLECT A CHANGE IN THEIR
INVESTMENT POLICY, AS EXPLAINED LATER IN THIS REPORT.
1 Income from all of the Schwab Value Advantage Investments may be subject to
the federal Alternative Minimum Tax (AMT), and income from the Schwab Municipal
Money Fund-Value Advantage Shares may be subject to state and local income
taxes.
1
<PAGE> 8
SCHWAB MUNICIPAL MONEY FUND-
VALUE ADVANTAGE SHARES(TM) SUMMARY
(FORMERLY SCHWAB TAX-EXEMPT MONEY FUND-
VALUE ADVANTAGE SHARES)
PERFORMANCE REVIEW
The table below presents 7-day average yields at year end. Of course, money
market fund yields fluctuate and past performance is no guarantee of future
results.
<TABLE>
<CAPTION>
================================================================================
7-DAY AVERAGE YIELDS 2
(as of 12/31/96)
Simple Compound Compound Taxable Equivalent 3
- --------------------------------------------------------------------------------
<S> <C> <C>
3.50% 3.56% 5.89%
================================================================================
</TABLE>
THE OPPORTUNITY FOR HIGHER YIELDS, AFTER TAXES
If you're in a high tax bracket, the federal tax-exempt* income which may be
paid by the Schwab Municipal Money Fund-Value Advantage Shares can provide you
with higher yields than taxable money funds on a taxable equivalent basis.
Here's how the compound taxable equivalent yield of these Value Advantage Shares
compared with the average compound yield for First Tier taxable money funds on
December 31, 1996 for shareholders in the highest 1996 tax bracket:
<TABLE>
================================================================================
<S> <C>
Your Value Advantage Shares' 7-day
compound taxable equivalent yield 2,3 5.89%
Average 7-day compound yield for
fully taxable money funds 4 4.93%
----
YOUR YIELD ADVANTAGE, AFTER TAXES: 0.96%
================================================================================
</TABLE>
* Income may be subject to state and local taxes and the federal Alternative
Minimum Tax (AMT).
2 A portion of the Fund's fees were waived or reimbursed during the reporting
period. Without the waivers or reimbursements, the Schwab Municipal Money
Fund-Value Advantage Shares' 7-day simple yield would have been 3.26%, the 7-day
compound yield would have been 3.31% and the 7-day compound taxable equivalent
yield would have been 5.48% at December 31, 1996.
3 Taxable equivalent yield assumes a 1996 maximum federal regular income tax
rate of 39.60%.
4 Source: IBC Financial Data's average 7-day compound yield for the 270 funds
in the First Tier category of Taxable Money Funds, as of December 31, 1996. Past
performance is no guarantee of future results.
2
<PAGE> 9
PORTFOLIO COMPOSITION
The chart below illustrates the composition of the Fund's portfolio as of
December 31, 1996. In addition, you'll find a complete listing of the securities
in the Fund's portfolio on December 31, 1996 later in this report.
The following is a pie chart illustrating the portfolio composition of the
Schwab Funds Value Advantage Investments.
SCHWAB MUNICIPAL MONEY FUND
PORTFOLIO COMPOSITION - DECEMBER 31, 1996
[PIE CHART]
<TABLE>
<S> <C>
Variable Rate Obligations 60%
Tax-Exempt Commercial Paper 15%
Put Bonds 7%
Anticipation Notes 10%
Other 3%
Variable Rate Tender Option Bonds/Partnerships 5%
</TABLE>
The Fund primarily invests in a diversified portfolio of high-quality,
short-term municipal securities issued by U.S. states, territories, and
government agencies.
STRONG GROWTH IN FUND ASSETS AND SHAREHOLDERS
During the year, the Schwab Municipal Money Fund-Value Advantage Shares' net
assets nearly quadrupled, while its shareholder base nearly tripled, reflecting
the growing popularity of "tax-smart" investments.
<TABLE>
<CAPTION>
12/31/96 12/31/95 CHANGE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NET ASSETS (000s) $608,080 $160,682 +278%
- --------------------------------------------------------------------------------
SHAREHOLDER ACCOUNTS 2,689 902 +198%
================================================================================
</TABLE>
3
<PAGE> 10
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND-
VALUE ADVANTAGE SHARES(TM) SUMMARY
(FORMERLY SCHWAB CALIFORNIA TAX-EXEMPT MONEY FUND-
VALUE ADVANTAGE SHARES)
PERFORMANCE REVIEW
The table below presents 7-day average yields at year end. Of course, money
market fund yields fluctuate and past performance is no guarantee of future
results.
<TABLE>
<CAPTION>
================================================================================
7-DAY AVERAGE YIELDS 5
(as of 12/31/96)
Simple Compound Compound Taxable Equivalent 6
- --------------------------------------------------------------------------------
<S> <C> <C>
3.40% 3.46% 6.32%
================================================================================
</TABLE>
THE OPPORTUNITY FOR HIGHER YIELDS, AFTER TAXES
If you're in a high tax bracket, the double tax-exempt* income which may be paid
by the Schwab California Municipal Money Fund-Value Advantage Shares can provide
you with higher yields than taxable money funds on a taxable equivalent basis.
Here's how the compound taxable equivalent yield of these Value Advantage Shares
compared with the average compound yield of First Tier taxable money funds on
December 31, 1996 for shareholders in the highest California 1996 tax bracket:
<TABLE>
================================================================================
<S> <C>
Your Value Advantage Shares' 7-day
compound taxable equivalent yield 5,6 6.32%
Average 7-day compound yield for
fully taxable money funds 7 4.93%
YOUR YIELD ADVANTAGE, AFTER TAXES: 1.39%
================================================================================
</TABLE>
*Income may be subject to the federal Alternative Minimum Tax (AMT).
5 A portion of the Fund's fees were waived or reimbursed during the reporting
period. Without the waivers or reimbursements, the Schwab California Municipal
Money Fund-Value Advantage Shares' 7-day simple yield would have been 3.17%, the
7-day compound yield would have been 3.22% and the 7-day compound taxable
equivalent yield would have been 5.88% at December 31, 1996.
6 Taxable equivalent yield assumes a 1996 maximum combined federal regular
income tax and California state personal income tax rate of 45.22%.
7 Source: IBC Financial Data's average 7-day compound yields for the 270 funds
in the First Tier category of Taxable Money Funds, as of December 31, 1996. Past
performance is no guarantee of future results.
4
<PAGE> 11
PORTFOLIO COMPOSITION
The chart below illustrates the Fund's portfolio composition as of December 31,
1996. In addition, you'll find a complete listing of the securities in the
Fund's portfolio on December 31, 1996 later in this report.
The following is a pie chart illustrating the portfolio composition of the
Schwab Funds Value Advantage Investments.
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
PORTFOLIO COMPOSITION - DECEMBER 31, 1996
[PIE CHART]
<TABLE>
<S> <C>
Variable Rate Obligations 63%
Tax-Exempt Commercial Paper 17%
Tax and Revenue Anticipation Notes 16%
Other 2%
Variable Rate Tender Option Bond Partnerships 2%
</TABLE>
The Fund primarily invests in a portfolio of high-quality, short-term municipal
securities issued by the state of California, its agencies and municipalities.
STRONG GROWTH IN FUND ASSETS AND SHAREHOLDERS
During the 12-month reporting period, the Schwab California Municipal Money
Fund-Value Advantage Shares' net assets more than quadrupled, while its
shareholder base increased five-fold, reflecting the growing popularity of
"tax-smart" investments.
<TABLE>
<CAPTION>
12/31/96 12/31/95 CHANGE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NET ASSETS (000s) $507,486 $108,008 +370%
- --------------------------------------------------------------------------------
SHAREHOLDER ACCOUNTS 2,071 409 +406%
================================================================================
</TABLE>
5
<PAGE> 12
SCHWAB NEW YORK MUNICIPAL MONEY FUND-
VALUE ADVANTAGE SHARES(TM) SUMMARY
(FORMERLY SCHWAB NEW YORK TAX-EXEMPT MONEY FUND-
VALUE ADVANTAGE SHARES)
PERFORMANCE REVIEW
The table below presents 7-day average yields at year end. Of course, money
market fund yields fluctuate and past performance is no guarantee of future
results.
<TABLE>
<CAPTION>
================================================================================
7-Day Average Yields 8
(as of 12/31/96)
Simple Compound Compound Taxable Equivalent 9
- --------------------------------------------------------------------------------
<S> <C> <C>
3.39% 3.45% 6.42%
================================================================================
</TABLE>
THE OPPORTUNITY FOR HIGHER YIELDS, AFTER TAXES
If you're in a high tax bracket, the triple tax-exempt* income which may be paid
by the Schwab New York Municipal Money Fund-Value Advantage Shares can provide
you with higher yields than taxable money funds on a taxable equivalent basis.
Here's how the compound taxable equivalent yield of these Value Advantage Shares
compared with the average compound yield for First Tier taxable money funds on
December 31, 1996 for shareholders in the highest 1996 New York tax bracket:
<TABLE>
================================================================================
<S> <C>
Your Value Advantage Shares' 7-day
compound taxable equivalent yield 8,9 6.42%
Average 7-day compound yield for
fully taxable money funds 10 4.93%
YOUR YIELD ADVANTAGE, AFTER TAXES: 1.49%
================================================================================
</TABLE>
*Income may be subject to the federal Alternative Minimum Tax (AMT).
8 A portion of the Fund's fees were waived or reimbursed during the reporting
period. Without the waivers or reimbursements, the Schwab New York Municipal
Money Fund-Value Advantage Shares' 7-day simple yield would have been 2.75%, the
7-day compound yield would have been 2.79% and the 7-day compound taxable
equivalent yield would have been 5.19% at December 31, 1996.
9 Taxable equivalent yield assumes a 1996 maximum combined federal regular
income tax and New York state and New York City personal income tax rate of
46.27%.
10 Source: IBC Financial Data's average 7-day compound yield for the 270 funds
in the First Tier category of Taxable Money Funds, as of December 31, 1996. Past
performance is no guarantee of future results.
6
<PAGE> 13
PORTFOLIO COMPOSITION
The chart below illustrates the Fund's portfolio composition as of December 31,
1996. In addition, you'll find a complete listing of the securities in the
Fund's portfolio on December 31, 1996 later in this report.
The following is a pie chart illustrating the portfolio composition of the
Schwab Funds Value Advantage Investments.
SCHWAB NEW YORK MUNICIPAL MONEY FUND
PORTFOLIO COMPOSITION - DECEMBER 31, 1996
[PIE CHART]
<TABLE>
<S> <C>
Variable Rate Obligations 65%
Tax-Exempt Commercial Paper 4%
Anticipation Notes 23%
Other 5%
Variable Rate Tender Option Bonds/Partnerships 3%
</TABLE>
The Fund primarily invests in a portfolio of high-quality, short-term municipal
securities issued by the state of New York, its agencies and municipalities.
STRONG GROWTH IN FUND ASSETS AND SHAREHOLDERS
During the 12-month reporting period, the Schwab New York Municipal Money
Fund-Value Advantage Shares' net assets more than quadrupled, while its
shareholder base more than tripled, reflecting the increasing popularity of
"tax-smart" investments.
<TABLE>
<CAPTION>
12/31/96 12/31/95 CHANGE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NET ASSETS (000s) $66,683 $15,143 +340%
- --------------------------------------------------------------------------------
SHAREHOLDER ACCOUNTS 381 100 +281%
================================================================================
</TABLE>
7
<PAGE> 14
MAKING THE MOST OF YOUR MONEY
The choice of the most appropriate money fund will depend upon such factors as
your attitudes toward risk and return, your income tax bracket, and how much
money you normally keep in your money fund.
The Schwab Value Advantage Investments(R) are designed to offer you higher
yields than most money market funds. By requiring higher account balances and
limiting shareholder transactions, Value Advantage Shares' operating expenses
are minimized in order to maximize your returns. To help achieve this goal,
Value Advantage Shares are not designed to transfer cash balances to settle
trades, or cover Schwab One(R) checks, margin calls, or insufficient funds in
your Schwab brokerage or Schwab One account.
If you expect to access your money regularly, you may wish to invest your
short-term funds in one of our six sweep money funds and keep your longer-term
cash reserves in the Schwab Value Advantage Investments to gain the opportunity
for higher yields. Our sweep money funds can be linked to your Schwab account to
keep all of your money invested and working for you. These funds automatically
invest or "sweep" balances of $100 or more from your brokerage account into the
sweep money fund you select, where it will be available to settle trades and
cover other day-to-day transactions.
We offer both taxable and tax-advantaged choices to meet your individual needs.
If you're in a high tax bracket, one of our tax-advantaged municipal money funds
may provide you with higher returns after taxes. Consult your tax advisor for
specific guidance on your own tax situation before investing.
8
<PAGE> 15
ECONOMIC HIGHLIGHTS
1996 GROWTH CONTINUES THE SIXTH YEAR
OF ECONOMIC EXPANSION
REAL GDP GROWTH RATE
(Quarterly % Change, Annual Rate)
The following is a bar graph which illustrates the Quarterly % change in GDP
for each quarter from the first quarter 1990 through the fourth quarter 1996.
[BAR GRAPH]
Real Gross Domestic Product
Chain Weighted
Percent change from preceeding quarter, seasonally adjusted at annual rates
Source: Bloomberg
<TABLE>
<CAPTION>
CHART 9
Real GDP
--------
<S> <C>
Q1 1990 4.1%
Q2 1990 1.3%
Q3 1990 -1.9%
Q4 1990 -4.1%
Q1 1991 -2.2%
Q2 1991 1.7%
Q3 1991 1.0%
Q4 1991 1.0%
Q1 1992 4.7%
Q2 1992 2.5%
Q3 1992 3.0%
Q4 1992 4.3%
Q1 1993 -0.1%
Q2 1993 1.9%
Q3 1993 2.3%
Q4 1993 4.8%
Q1 1994 2.5%
Q2 1994 4.9%
Q3 1994 3.5%
Q4 1994 3.0%
Q1 1995 0.4%
Q2 1995 0.7%
Q3 1995 3.8%
Q4 1995 0.3%
Q1 1996 2.0%
Q2 1996 4.7%
Q3 1996 2.1%
Q4 1996 4.7%
</TABLE>
Source: Bloomberg L.P.
- - The GDP growth rate for 1996 was 3.4%. This growth rate represents a
significant improvement from the relatively weak 1.3% overall rate in 1995
and in particular, the 0.3% fourth quarter 1995 rate, which caused concern
over the possibility of a recession early in 1996.
- - The 1996 second and fourth quarter growth rates of 4.7% resulted in
sentiment focusing on the apparent strength of the economy and its
potential impact on future inflation and Federal Reserve Board (Fed)
policy.
- - At the time of this writing, the economy appears to be on track for
moderate growth, continuing the six year expansion which began in 1991.
9
<PAGE> 16
U.S. UNEMPLOYMENT RATE
The following is a line graph which illustrates the monthly unemployment rate
from January 1990 through December 1996.
[LINE GRAPH]
US Unemployment Rate
Source: Bloomberg
<TABLE>
<CAPTION>
Unemployment Rate
-----------------
<S> <C>
Jan-90 5.3%
Feb-90 5.3%
Mar-90 5.2%
Apr-90 5.4%
May-90 5.3%
Jun-90 5.1%
Jul-90 5.4%
Aug-90 5.6%
Sep-90 5.7%
Oct-90 5.8%
Nov-90 6.0%
Dec-90 6.2%
Jan-91 6.3%
Feb-91 6.5%
Mar-91 6.8%
Apr-91 6.6%
May-91 6.8%
Jun-91 6.8%
Jul-91 6.7%
Aug-91 6.8%
Sep-91 6.8%
Oct-91 6.9%
Nov-91 6.9%
Dec-91 7.1%
Jan-92 7.1%
Feb-92 7.3%
Mar-92 7.3%
Apr-92 7.3%
May-92 7.4%
Jun-92 7.7%
Jul-92 7.6%
Aug-92 7.6%
Sep-92 7.5%
Oct-92 7.4%
Nov-92 7.3%
Dec-92 7.3%
Jan-93 7.1%
Feb-93 7.0%
Mar-93 7.0%
Apr-93 7.0%
May-93 6.9%
Jun-93 6.9%
Jul-93 6.8%
Aug-93 6.7%
Sep-93 6.7%
Oct-93 6.7%
Nov-93 6.5%
Dec-93 6.4%
Jan-94 6.7%
Feb-94 6.6%
Mar-94 6.5%
Apr-94 6.4%
May-94 6.0%
Jun-94 6.0%
Jul-94 6.1%
Aug-94 6.1%
Sep-94 5.9%
Oct-94 5.6%
Nov-94 5.6%
Dec-94 5.4%
Jan-95 5.6%
Feb-95 5.4%
Mar-95 5.8%
Apr-95 5.7%
May-95 5.7%
Jun-95 5.6%
Jul-95 5.7%
Aug-95 5.3%
Sep-95 5.6%
Oct-95 5.5%
Nov-95 5.6%
Dec-95 5.6%
Jan-96 5.8%
Feb-96 5.5%
Mar-96 5.6%
Apr-96 5.4%
May-96 5.6%
Jun-96 5.3%
Jul-96 5.4%
Aug-96 5.1%
Sep-96 5.2%
Oct-96 5.2%
Nov-96 5.3%
Dec-96 5.3%
</TABLE>
Source: Bloomberg L.P.
- - The unemployment rate during 1996 remained near its lows for the decade,
leading many economists to question whether such low levels can continue
without generating inflationary pressures on wages and, ultimately, prices.
- - Job creation slowed during the latter half of 1996, consistent with the
slowing of the economy in the third quarter from the second quarter of
1996.
10
<PAGE> 17
The following is a bar and line graph which illustrates the monthly consumer
price index and the quarterly employment cost index from January 1990 through
December 1996.
MEASURES OF INFLATION
[BAR AND LINE GRAPH]
Consumer Price Index - All Items YOY
Employment Cost Index (includes both wages and salaries and benefits components)
- - Quarterly Data Annualized
Source: Bloomberg
CHART 14
<TABLE>
<CAPTION>
Monthly Quarterly
Consumer Employment
Price Cost
Index - Index -
YOY % YOY %
Change Change
-------- ---------
<S> <C> <C> <C>
Jan-90 5.2% 5.3%
Feb-90 5.3% 5.3%
Mar-90 5.2% 5.3%
Apr-90 4.7% 5.4%
May-90 4.4% 5.4%
Jun-90 4.7% 5.4%
Jul-90 4.8% 5.1%
Aug-90 5.6% 5.1%
Sep-90 6.2% 5.1%
Oct-90 6.3% 4.8%
Nov-90 6.3% 4.8%
Dec-90 6.1% 4.8%
Jan-91 5.7% 4.6%
Feb-91 5.3% 4.6%
Mar-91 4.9% 4.6%
Apr-91 4.9% 4.5%
May-91 5.0% 4.5%
Jun-91 4.7% 4.5%
Jul-91 4.4% 4.3%
Aug-91 3.8% 4.3%
Sep-91 3.4% 4.3%
Oct-91 2.9% 4.2%
Nov-91 3.0% 4.2%
Dec-91 3.1% 4.2%
Jan-92 2.6% 4.1%
Feb-92 2.8% 4.1%
Mar-92 3.2% 4.1%
Apr-92 3.2% 3.5%
May-92 3.0% 3.5%
Jun-92 3.1% 3.5%
Jul-92 3.2% 3.4%
Aug-92 3.1% 3.4%
Sep-92 3.0% 3.4%
Oct-92 3.2% 3.5%
Nov-92 3.0% 3.5%
Dec-92 2.9% 3.5%
Jan-93 3.3% 3.4%
Feb-93 3.2% 3.4%
Mar-93 3.1% 3.4%
Apr-93 3.2% 3.6%
May-93 3.2% 3.6%
Jun-93 3.0% 3.6%
Jul-93 2.8% 3.6%
Aug-93 2.8% 3.6%
Sep-93 2.7% 3.6%
Oct-93 2.8% 3.4%
Nov-93 2.7% 3.4%
Dec-93 2.7% 3.4%
Jan-94 2.5% 3.2%
Feb-94 2.5% 3.2%
Mar-94 2.5% 3.2%
Apr-94 2.4% 3.1%
May-94 2.3% 3.1%
Jun-94 2.5% 3.1%
Jul-94 2.8% 3.1%
Aug-94 2.9% 3.1%
Sep-94 3.0% 3.1%
Oct-94 2.6% 3.0%
Nov-94 2.7% 3.0%
Dec-94 2.7% 3.0%
Jan-95 2.8% 3.0%
Feb-95 2.9% 3.0%
Mar-95 2.9% 3.0%
Apr-95 3.1% 3.0%
May-95 3.2% 3.0%
Jun-95 3.0% 3.0%
Jul-95 2.8% 2.8%
Aug-95 2.6% 2.8%
Sep-95 2.5% 2.8%
Oct-95 2.8% 2.8%
Nov-95 2.6% 2.8%
Dec-95 2.5% 2.8%
Jan-96 2.7% 2.9%
Feb-96 2.7% 2.9%
Mar-96 2.8% 2.9%
Apr-96 2.9% 2.9%
May-96 2.9% 2.9%
Jun-96 2.8% 2.9%
Jul-96 3.0% 2.9%
Aug-96 2.9% 2.9%
Sep-96 3.0% 2.9%
Oct-96 3.0% 3.0%
Nov-96 3.3% 3.0%
Dec-96 3.3% 3.0%
</TABLE>
Source: Bloomberg L.P.
- - Although trending slightly upward, both employment cost and CPI remained in
check during 1996, reflecting continued low levels of inflation.
- - CPI rose 3.3% in 1996, the highest annual rate since 1990. However, the
core rate (which excludes the more volatile food and energy components)
rose 2.6%, the lowest rate since 1965.
- - The Fed has indicated it will maintain a posture of "heightened
surveillance" and remain diligent in its effort to prevent increases in
inflation.
11
<PAGE> 18
The following is a line graph which illustrates the 90 day commercial paper
rates for each day in 1996.
SHORT-TERM MUNICIPAL INTEREST RATES IN 1996
[LINE GRAPH]
YIELDS
90-Day Municipal Commercial Paper
January 2, 1996 - December 31, 1996
<TABLE>
<CAPTION>
CHART 12
90 Day Municipal Commercial Paper
---------------------------------
<S> <C>
1/2/96 5.50%
1/3/96 5.51%
1/4/96 5.49%
1/5/96 5.46%
1/8/96 5.48%
1/9/96 5.47%
1/10/96 5.45%
1/11/96 5.44%
1/12/96 5.43%
1/15/96 5.43%
1/16/96 5.42%
1/17/96 5.41%
1/18/96 5.39%
1/19/96 5.38%
1/22/96 5.37%
1/23/96 5.36%
1/24/96 5.35%
1/25/96 5.34%
1/26/96 5.34%
1/29/96 5.32%
1/30/96 5.31%
1/31/96 5.27%
2/1/96 5.21%
2/2/96 5.17%
2/5/96 5.17%
2/6/96 5.16%
2/7/96 5.16%
2/8/96 5.15%
2/9/96 5.14%
2/12/96 5.13%
2/13/96 5.13%
2/14/96 5.12%
2/15/96 5.12%
2/16/96 5.12%
2/20/96 5.14%
2/21/96 5.16%
2/22/96 5.14%
2/23/96 5.13%
2/26/96 5.14%
2/27/96 5.16%
2/28/96 5.16%
2/29/96 5.19%
3/1/96 5.19%
3/4/96 5.17%
3/5/96 5.18%
3/6/96 5.19%
3/7/96 5.19%
3/8/96 5.31%
3/11/96 5.31%
3/12/96 5.32%
3/13/96 5.34%
3/14/96 5.34%
3/15/96 5.34%
3/18/96 5.36%
3/19/96 5.36%
3/20/96 5.36%
3/21/96 5.35%
3/22/96 5.35%
3/25/96 5.37%
3/26/96 5.36%
3/27/96 5.37%
3/28/96 5.39%
3/29/96 5.38%
4/1/96 5.36%
4/2/96 5.36%
4/3/96 5.36%
4/4/96 5.36%
4/5/96 5.36%
4/8/96 5.40%
4/9/96 5.41%
4/10/96 5.41%
4/11/96 5.41%
4/12/96 5.41%
4/15/96 5.41%
4/16/96 5.40%
4/17/96 5.39%
4/18/96 5.39%
4/19/96 5.38%
4/22/96 5.38%
4/23/96 5.38%
4/24/96 5.38%
4/25/96 5.38%
4/26/96 5.38%
4/29/96 5.38%
4/30/96 5.39%
5/1/96 5.40%
5/2/96 5.41%
5/3/96 5.41%
5/6/96 5.41%
5/7/96 5.41%
5/8/96 5.41%
5/9/96 5.40%
5/10/96 5.39%
5/13/96 5.38%
5/14/96 5.38%
5/15/96 5.38%
5/16/96 5.38%
5/17/96 5.38%
5/20/96 5.38%
5/21/96 5.37%
5/22/96 5.37%
5/23/96 5.37%
5/24/96 5.37%
5/27/96 5.37%
5/28/96 5.37%
5/29/96 5.37%
5/30/96 5.39%
5/31/96 5.40%
6/3/96 5.43%
6/4/96 5.42%
6/5/96 5.42%
6/6/96 5.41%
6/7/96 5.50%
6/10/96 5.51%
6/11/96 5.50%
6/12/96 5.49%
6/13/96 5.49%
6/14/96 5.49%
6/17/96 5.50%
6/18/96 5.50%
6/19/96 5.50%
6/20/96 5.50%
6/21/96 5.50%
6/24/96 5.51%
6/25/96 5.50%
6/26/96 5.50%
6/27/96 5.51%
6/28/96 5.52%
7/1/96 5.50%
7/2/96 5.50%
7/3/96 5.50%
7/4/96 5.50%
7/5/96 5.59%
7/8/96 5.59%
7/9/96 5.56%
7/10/96 5.54%
7/11/96 5.54%
7/12/96 5.55%
7/15/96 5.56%
7/16/96 5.56%
7/17/96 5.55%
7/18/96 5.54%
7/19/96 5.51%
7/22/96 5.51%
7/23/96 5.51%
7/24/96 5.50%
7/25/96 5.50%
7/26/96 5.52%
7/29/96 5.52%
7/30/96 5.54%
7/31/96 5.55%
8/1/96 5.54%
8/2/96 5.47%
8/5/96 5.44%
8/6/96 5.43%
8/7/96 5.43%
8/8/96 5.42%
8/9/96 5.41%
8/12/96 5.40%
8/13/96 5.40%
8/14/96 5.40%
8/15/96 5.41%
8/16/96 5.40%
8/19/96 5.40%
8/20/96 5.40%
8/21/96 5.40%
8/22/96 5.39%
8/23/96 5.39%
8/26/96 5.42%
8/27/96 5.42%
8/28/96 5.42%
8/29/96 5.42%
8/30/96 5.45%
9/2/96 5.45%
9/3/96 5.53%
9/4/96 5.53%
9/5/96 5.55%
9/6/96 5.57%
9/9/96 5.54%
9/10/96 5.53%
9/11/96 5.53%
9/12/96 5.51%
9/13/96 5.47%
9/16/96 5.46%
9/17/96 5.50%
9/18/96 5.52%
9/19/96 5.54%
9/20/96 5.56%
9/23/96 5.59%
9/24/96 5.61%
9/25/96 5.48%
9/26/96 5.46%
9/27/96 5.47%
9/30/96 5.49%
10/1/96 5.48%
10/2/96 5.48%
10/3/96 5.49%
10/4/96 5.44%
10/7/96 5.43%
10/8/96 5.43%
10/9/96 5.43%
10/10/96 5.43%
10/11/96 5.43%
10/14/96 5.43%
10/15/96 5.42%
10/16/96 5.42%
10/17/96 5.42%
10/18/96 5.42%
10/21/96 5.42%
10/22/96 5.42%
10/23/96 5.42%
10/24/96 5.42%
10/25/96 5.42%
10/28/96 5.43%
10/29/96 5.42%
10/30/96 5.41%
10/31/96 5.41%
11/1/96 5.41%
11/4/96 5.41%
11/5/96 5.41%
11/6/96 5.41%
11/7/96 5.41%
11/8/96 5.40%
11/11/96 5.40%
11/12/96 5.40%
11/13/96 5.40%
11/14/96 5.40%
11/15/96 5.42%
11/18/96 5.42%
11/19/96 5.41%
11/20/96 5.41%
11/21/96 5.41%
11/22/96 5.40%
11/25/96 5.41%
11/26/96 5.41%
11/27/96 5.42%
11/28/96 5.42%
11/29/96 5.44%
12/2/96 5.44%
12/3/96 5.42%
12/4/96 5.42%
12/5/96 5.41%
12/6/96 5.43%
12/9/96 5.43%
12/10/96 5.43%
12/11/96 5.44%
12/12/96 5.44%
12/13/96 5.47%
12/16/96 5.48%
12/17/96 5.49%
12/18/96 5.52%
12/19/96 5.55%
12/20/96 5.57%
12/23/96 5.58%
12/24/96 5.60%
12/25/96 5.60%
12/26/96 5.61%
12/27/96 5.64%
12/30/96 5.65%
12/31/96 5.63%
</TABLE>
Source: Lehman Brothers, Inc.
- - Short-term municipal interest rates displayed a moderate decline early in
the year in response to fears of an economic recession, and then increased
moderately during the middle of the year in response to concerns over
excessive growth and its potential impact on future inflation.
- - Short-term municipal rates exhibited moderate volatility, much of which was
a result of the market's reaction to strong employment reports.
- - Short-term municipal rates experienced their typical supply related dip in
June.
12
<PAGE> 19
QUESTIONS TO THE PORTFOLIO MANAGEMENT TEAM OF
CHARLES SCHWAB INVESTMENT MANAGEMENT, INC.
STEPHEN B. WARD - Senior Vice President of Charles Schwab and Co., Inc. and
Chief Investment officer of Charles Schwab Investment Management, Inc. Mr. Ward
has held this position since 1993. He joined CSIM in 1991 as a Vice President
and Portfolio Manager.
WALTER BEVERIDGE - Portfolio Manager of the Schwab Municipal Money Fund and
Schwab California Municipal Money Fund since 1992 and the Schwab New York
Municipal Money Fund since 1995. Mr. Beveridge joined CSIM as a Portfolio
Manager in 1992.
JACK GAZZOLA - Associate Portfolio Manager. Mr. Gazzola joined the Portfolio
Management Team in 1992.
Q. HOW HAS THE PORTFOLIO MANAGEMENT TEAM ADJUSTED EACH FUND'S PORTFOLIO TO
RESPOND TO CHANGES IN INTEREST RATES?
A. During most of the one-year reporting period, interest rates exhibited no
clear trend, amid uncertainty over inflationary pressures and ever-changing
signals from the Fed over the direction of interest rates. The Fed adjusted
interest rates only once during the period by lowering the Federal Funds rate
from 5.50% to 5.25% on February 1, 1996. As a result, each Fund maintained a
relatively neutral maturity policy, avoiding significant deviations from other
funds with similar investment objectives. By employing a neutral maturity
strategy and avoiding a bet on the level of future interest rates by
significantly extending or shortening the portfolio, the portfolio management
team was able to be more responsive to changes in interest rates and maintain
the portfolio's competitive position. The chart below shows each Fund's weighted
average maturity at the beginning and end of the reporting period.
<TABLE>
<CAPTION>
BEGINNING OF END OF
PERIOD PERIOD
- --------------------------------------------------------------------------------
<S> <C> <C>
SCHWAB MUNICIPAL MONEY FUND 50 50
- --------------------------------------------------------------------------------
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND 51 47
- --------------------------------------------------------------------------------
SCHWAB NEW YORK MUNICIPAL MONEY FUND 48 51
- --------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 20
Q. WHAT STANDARDS DOES THE PORTFOLIO MANAGEMENT TEAM USE IN SELECTING SECURITIES
FOR THE FUNDS?
A. Money market funds are required by law to hold high-quality securities in
their portfolios. For the three Schwab Municipal Money Funds, we have continued
to take the additional step of only investing in what are referred to as First
Tier securities. In general, a First Tier security provides certain maturity
limits and carries the highest credit rating from the required number of
nationally recognized statistical rating organizations (NRSROs). If unrated, a
security must be deemed to be of comparable quality to a First Tier security
according to guidelines approved by the Board of Trustees of The Charles Schwab
Family of Funds.
Certain securities owned by the Fund are insured or backed by a Letter of Credit
issued by a First Tier financial institution. These arrangements are frequently
referred to as "credit enhancements" because they provide incremental levels of
creditworthiness in addition to the underlying strength of the primary issuer.
The credit quality of the insurance companies and financial institutions
providing credit enhancements are reviewed by Charles Schwab Investment
Management, Inc. as a regular part of our thorough credit review procedures for
all portfolio securities and issuers.
Q. CAN YOU DESCRIBE THE ECONOMIC CLIMATE IN CALIFORNIA AND ITS IMPACT ON THE
STATE'S MUNICIPAL SECURITIES?
A. During the past two years, California's economic recovery has broadly
reflected the movement and pace of national trends. While the state has regained
the jobs lost during the 1990 recession, the California unemployment rate
continues to exceed the national average. Further, persistent softness of the
real estate market and sluggish figures for new home construction may keep
unemployment levels above the national average in the near future.
California has eliminated its accumulated budget deficit of approximately $2
billion and expects to build up a contingency reserve to cover future economic
challenges. Lawmakers continue to struggle
14
<PAGE> 21
with maintaining necessary services, such as education, infrastructure
improvements, and public health and safety with available tax revenues, against
a backdrop of budget reductions and federal welfare reform. The state budget
assumes levels of federal assistance and state economic growth that may not be
realized. However, 1995-1996 revenues came in above budget estimates and
California's financial position is expected to continue to improve over the next
twelve months.
We are satisfied with the credit quality of the California securities the Fund
currently owns, and we will continue to monitor the state's economic situation
closely. California's current long-term credit ratings are A1 from Moody's
Investor Service, A+ from Standard & Poor's Corporation, and A+ from Fitch
Investors Services, Inc., three well-known rating agencies.
Q. CAN YOU DESCRIBE THE ECONOMIC CLIMATE IN NEW YORK AND ITS IMPACT ON THE
STATE'S MUNICIPAL SECURITIES?
A. New York state's satisfactory credit quality is supported by a diverse
economic base and the central role New York City continues to play in
international finance, tourism, and other service-related businesses. The state
entered the 1990 recession earlier than others and its recovery has been
significantly slower and less robust. At the current growth rate, New York may
not reach pre-recession employment levels until late 1997. Economic growth may
continue to be constrained by ongoing structural changes in the economy,
corporate downsizing and relocation, cutbacks in defense spending, and high
levels of public assistance.
In spite of reported budgetary surpluses in 1993, 1994 and 1996, New York still
faces the challenge of resolving a general fund deficit of more than $2.3
billion. In early July 1996, after the longest delay in the state's history,
Governor George Pataki and the legislature agreed on a 1997 budget that will
result in slightly higher New York state spending than in 1996. The success of
this budget will depend largely on the state's ability to achieve forecast
levels of economic growth and implement its budget strategies in a smooth and
timely fashion. Growth
15
<PAGE> 22
forecasts notwithstanding, New York's economy continues to be somewhat sluggish,
and major delays in adoption of the budget and other administrative roadblocks
make it difficult for the state to implement many of the new policies.
Therefore, the state is unlikely to reverse its general fund deficit within the
next twelve months.
We are satisfied with the credit quality of the New York securities which the
Fund currently owns, and we will continue to monitor the state's economic
situation. New York's current long-term credit ratings are A from Moody's
Investor Service, A- from Standard & Poor's Corporation, and A+ from Fitch
Investors Services, Inc., three well-known rating agencies.
Q. HOW DID THE RECENT PROXY VOTE AFFECT EACH FUND'S INVESTMENT POLICIES AND
STRATEGIES?
A. Prior to the recent proxy vote, the Funds were limited in their ability to
invest in securities which generated income subject to the federal Alternative
Minimum Tax (AMT). The Funds were limited to investing no more than 20% of total
assets in AMT investments. As a result of the affirmative proxy vote, the 20%
limitation is eliminated and each Fund is allowed to increase its holdings of
AMT investments beyond the 20% level. The successful proxy vote also resulted in
each Fund's name change to replace the term "Tax-Exempt" with "Municipal" as of
January 2, 1997.
AMT investments typically offer higher yields than other types of municipal
securities with similar credit quality. Our research indicated that the majority
of investors are not subject to the federal Alternative Minimum Tax and, as a
result, are likely to benefit from the potentially higher yields. Although all
shareholders may enjoy higher yields, for shareholders subject to the federal
AMT, the policy change may result in a greater percentage of their income from
each Fund being subject to AMT.
More municipal and tax-free money market funds in the industry are purchasing
AMT investments and the percentage of AMT investments
16
<PAGE> 23
in many other funds has grown in recent years. In light of these market trends,
the Investment Manager and the Board of Trustees both felt this change was
important to help enable the Funds to remain competitive now and in the future.
Shareholders passed another proxy proposal which eliminated, reclassified or
amended several of the Funds' fundamental policies and investment restrictions.
These changes are intended to allow each Fund to act more quickly and
efficiently to capitalize on future investment opportunities or changes in
investment laws or regulations. The amendments in this final proposal did not
result in any change to the investment objective or reduce the credit quality of
the Funds.
For the final tabulation of proxy votes, please refer to page 116.
17
<PAGE> 24
GLOSSARY OF TERMS
ALTERNATIVE MINIMUM TAX (AMT) A federal tax on income in addition to regular
income taxes designed to ensure that very wealthy individuals and corporations
pay at least some income tax each year.
COMMERCIAL PAPER Short-term, interest-paying obligations with maturities ranging
up to 270 days issued by banks, corporations, and other borrowers.
CREDIT ENHANCEMENTS A bank letter of credit, purchase agreement, insurance, or
line of credit that provides an additional level of creditworthiness for debt
securities to supplement the financial strength of the issuer.
DOLLAR-WEIGHTED AVERAGE MATURITY A measure of the average maturity of a mutual
fund's entire portfolio, weighted by the value of its individual holdings.
FEDERAL FUNDS RATE A key interest rate charged by banks when lending money to
other banks overnight.
FEDERAL RESERVE The central bank of the United States that establishes policies
on bank reserves and regulations, determines the discount rate, and tightens or
loosens the availability of credit.
FIRST TIER SECURITY A security that matures within certain recognized limits and
carries the top credit rating from the requisite number of NRSROs, or if
unrated, is of comparable credit quality.
HIGH-QUALITY SECURITY A security ranked in the highest two rating categories by
a nationally recognized statistical rating organization (NRSRO), or if unrated,
is of comparable credit quality.
MATURITY The length of time before which the issuer of a debt security must
repay the principal amount.
NRSRO A nationally recognized statistical rating organization, such as Standard
& Poor's or Moody's Investor Services, which evaluates and rates the credit
quality of securities.
REAL GDP The national Gross Domestic Product (GDP) -- the total value of all
goods and services produced in the U.S. over a specific period of time --
adjusted for the rate of inflation to allow meaningful year-to-year comparisons.
TAXABLE EQUIVALENT YIELD The return you would have to realize on a fully taxable
investment in order to equal a specified tax-exempt yield; this hypothetical
yield varies according to your income tax bracket.
YIELD The rate of return, usually dividend or interest payments, on an
investment, expressed as a percentage of market price.
18
<PAGE> 25
SCHWAB MUNICIPAL MONEY FUND
(Formerly Schwab Tax-Exempt Money Fund)
- ------------------------------------------------------------------------------
PORTFOLIO SUMMARY
ASSET GROWTH
<TABLE>
<CAPTION>
Total Total Percentage
Net Assets Net Assets Growth Over
as of 12/31/96 as of 12/31/95 Reporting
(000s) (000s) Period
- ------------------------------------------------------------------------------
<S> <C> <C>
$4,476,999 $3,564,519 26%
- ------------------------------------------------------------------------------
</TABLE>
AVERAGE YIELDS FOR THE PERIODS ENDED DECEMBER 31, 1996
SWEEP SHARES
<TABLE>
<CAPTION>
Last Last Last
Seven Days Three Months Twelve Months
- ------------------------------------------------------------------------------
<S> <C> <C>
3.29% 2.94% 2.88%
- ------------------------------------------------------------------------------
</TABLE>
VALUE ADVANTAGE SHARES
<TABLE>
<CAPTION>
Last Last Last
Seven Days Three Months Twelve Months
- ------------------------------------------------------------------------------
<S> <C> <C>
3.50% 3.15% 3.09%
- ------------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE
PERCENT OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
Maturity Range 3/31/96 6/30/96 9/30/96 12/31/96
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0 - 15 Days 64.6% 65.9% 72.2% 67.7%
16 - 30 Days 0.5 1.5 4.4 1.1
31 - 60 Days 5.2 9.7 3.1 6.9
61 - 90 Days 9.7 3.5 2.9 2.4
91 - 120 Days 4.9 3.4 0.3 1.2
Over 120 Days 15.1 16.0 17.1 20.7
Weighted Average 48 Days 63 Days 53 Days 50 Days
- ------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 26
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
(Formerly Schwab California Tax-Exempt Money Fund)
- ------------------------------------------------------------------------------
PORTFOLIO SUMMARY
ASSET GROWTH
<TABLE>
<CAPTION>
Total Total Percentage
Net Assets Net Assets Growth Over
as of 12/31/96 as of 12/31/95 Reporting
(000s) (000s) Period
- ------------------------------------------------------------------------------
<S> <C> <C>
$2,323,598 $1,685,703 38%
- ------------------------------------------------------------------------------
</TABLE>
AVERAGE YIELDS FOR THE PERIODS ENDED DECEMBER 31, 1996
SWEEP SHARES
<TABLE>
<CAPTION>
Last Last Last
Seven Days Three Months Twelve Months
- ------------------------------------------------------------------------------
<S> <C> <C>
3.20% 2.83% 2.76%
- ------------------------------------------------------------------------------
</TABLE>
VALUE ADVANTAGE SHARES
<TABLE>
<CAPTION>
Last Last Last
Seven Days Three Months Twelve Months
- ------------------------------------------------------------------------------
<S> <C> <C>
3.40% 3.03% 2.96%
- ------------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE
PERCENT OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
Maturity Range 3/31/96 6/30/96 9/30/96 12/31/96
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0 - 15 Days 65.0% 61.2% 74.6% 66.8%
16 - 30 Days 1.6 9.1 1.3 3.9
31 - 60 Days 3.6 9.8 6.8 8.1
61 - 90 Days 6.5 8.1 0.1 4.2
91 - 120 Days 13.3 0.9 0.0 0.2
Over 120 Days 10.0 10.9 17.2 16.8
Weighted Average 41 Days 54 Days 56 Days 47 Days
- ------------------------------------------------------------------------------
</TABLE>
20
<PAGE> 27
SCHWAB NEW YORK MUNICIPAL MONEY FUND
(Formerly Schwab New York Tax-Exempt Money Fund)
- ------------------------------------------------------------------------------
PORTFOLIO SUMMARY
ASSET GROWTH
<TABLE>
<CAPTION>
Total Total Percentage
Net Assets Net Assets Growth Over
as of 12/31/96 as of 12/31/95 Reporting
(000s) (000s) Period
- ------------------------------------------------------------------------------
<S> <C> <C>
$337,295 $220,006 53%
- ------------------------------------------------------------------------------
</TABLE>
AVERAGE YIELDS FOR THE PERIODS ENDED DECEMBER 31, 1996
SWEEP SHARES
<TABLE>
<CAPTION>
Last Last Last
Seven Days Three Months Twelve Months
- ------------------------------------------------------------------------------
<S> <C> <C>
3.15% 2.81% 2.71%
- ------------------------------------------------------------------------------
</TABLE>
VALUE ADVANTAGE SHARES
<TABLE>
<CAPTION>
Last Last Last
Seven Days Three Months Twelve Months
- ------------------------------------------------------------------------------
<S> <C> <C>
3.39% 3.05% 2.95%
- ------------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE
PERCENT OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
Maturity Range 3/31/96 6/30/96 9/30/96 12/31/96
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0 - 15 Days 67.6% 72.0% 74.1% 71.2%
16 - 30 Days 2.7 2.3 2.9 0.0
31 - 60 Days 0.0 7.8 1.7 6.9
61 - 90 Days 16.0 0.0 0.6 0.0
91 - 120 Days 1.7 1.4 0.0 3.0
Over 120 Days 12.0 16.5 20.7 18.9
Weighted Average 44 Days 54 Days 55 Days 51 Days
- ------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 28
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS--60.01%(a)
ALABAMA--1.69%
Alabama Housing Finance Authority Single Family
Revenue Bonds (Collateralized Home Mortgage
Revenue Program) Series 1996A-1/(Bayerische
Landesbank Girozentrale Credit Agreement)
4.10%, 01/07/97 $12,400 $12,400
Alabama Housing Finance Authority Single Family
Revenue Bonds (Collateralized Home Mortgage
Revenue Program) Series 1996A-2/(Bayerische
Landesbank Girozentrale Credit Agreement)
4.20%, 01/07/97 11,800 11,800
Birmingham, Alabama Unlimited General Obligation
Refunding Bonds Series 1995/(First Alabama Bank
LOC)
4.20%, 01/07/97 4,000 4,000
Citronelle, Alabama Industrial Development Board
Pollution Control Revenue Refunding Bonds (AZKO
Chemicals, Inc. Project)/(Wachovia Bank LOC)
4.15%, 01/07/97 1,100 1,100
Jefferson County, Alabama Sewer Revenue Warrants
Series 1995A/(Bayerische Landesbank Girozentrale
LOC)
4.25%, 01/07/97 12,500 12,500
Mobile County, Alabama Industrial Development Board
Revenue Refunding Bonds (Ultraform Co. Project)
Series 1995B/(Bayerische Landesbank Girozentrale
LOC)
4.15%, 01/07/97 1,000 1,000
Mobile County, Alabama Industrial Development Board
Pollution Control Revenue Refunding Bonds
(Ultraform Co. Project) Series 1995A/(Bayerische
Landesbank Girozentrale LOC)
4.15%, 01/07/97 7,480 7,480
Mobile, Alabama Industrial Development Board
Pollution Control Revenue Bonds (Alabama Power Co.
Project) Series 1993C
4.15%, 01/07/97 12,000 12,000
Montgomery, Alabama Special Care Facility Financing
Authority Revenue Bonds (Baptist Medical Center
VHA) Series 1985C/(AMBAC Insurance & FNB Chicago
SBPA)
4.00%, 01/07/97 2,000 2,000
Montgomery, Alabama Special Care Facility Financing
Authority Revenue Bonds (Baptist Medical Center
VHA) Series 1985G/(AMBAC Insurance & FNB Chicago
SBPA)
4.00%, 01/07/97 6,390 6,390
</TABLE>
22
<PAGE> 29
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Montgomery, Alabama Special Care Facility Financing
Authority Revenue Bonds (Baptist Medical Center
VHA) Series 1985H/(AMBAC Insurance & FNB Chicago
SBPA)
4.00%, 01/07/97 $ 5,295 $ 5,295
Opelika, Alabama Industrial Development Board
Revenue Bonds (Power Guard Project) Series
1994/(SouthTrust Bank of Alabama LOC)
4.35%, 01/07/97 2,850 2,850
------
78,815
------
ARIZONA--1.26%
Arizona Education Loan Marketing Corp. Revenue Bonds
Series A/(MBIA Insurance & Fuji Bank SBPA)
4.35%, 01/07/97 12,305 12,305
Arizona Health Facilities Authority Adjustable Rate
Notes (Arizona Volunteer Hospital Federation)
Series 1985A/(FGIC Insurance)
4.25%, 01/07/97 2,945 2,945
Arizona Health Facilities Authority Adjustable Rate
Notes (Arizona Volunteer Hospital Federation)
Series 1985B/(FGIC Insurance)
4.25%, 01/07/97 3,840 3,840
Coconino County, Arizona Pollution Control Revenue
Bonds (Tucson Electric Power Company) Series
1996B/(Societe Generale LOC)
4.15%, 01/07/97 10,700 10,700
Pima County, Arizona Industrial Development
Authority Industrial Development Revenue Bonds
(Tucson Electric Power Company)/(Bank of America
LOC)
4.00%, 01/07/97 4,000 4,000
Pima County, Arizona Industrial Development
Authority Industrial Development Revenue Bonds
(Tucson Electric Power Company) Series
1982A/(Societe Generale LOC)
4.00%, 01/07/97 17,600 17,600
Yavapai County, Arizona Industrial Development
Authority Revenue Bonds (First Health Care Corp.
Project)/(Wachovia Bank LOC)
4.25%, 01/07/97 4,230 4,230
Yuma, Arizona Industrial Development Authority Multi
Family Housing Revenue Bonds (El Encanto
Apartments) Series A/(Citibank LOC)
4.15%, 01/07/97 3,000 3,000
------
58,620
------
</TABLE>
23
<PAGE> 30
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
ARKANSAS--1.45%
Independence County, Arkansas Industrial Development
Revenue Bonds (Townsends of Arkansas, Inc.
Project)/(Rabobank Nederland N.V. LOC)
4.15%, 01/07/97 $ 2,000 $ 2,000
Little River County, Arkansas Solid Waste Disposal
Revenue Bonds (Georgia Pacific Project)/(Sumitomo
Bank LOC)
4.35%, 01/07/97 15,500 15,500
North Little Rock, Arkansas Health Facilities Board
Revenue Bonds (Baptist Health) Series 1996B/
(Credit Suisse LOC)(d)
4.15%, 01/07/97 50,000 50,000
------
67,500
------
CALIFORNIA--5.07%
Alameda-Contra Costa, California School Financial
Authority Certificates of Participation (Capital
Improvement Finance Project)/(Canadian Imperial
Bank of Commerce LOC)
3.75%, 01/07/97 18,570 18,570
Anaheim, California Certificates of Participation
(Anaheim Memorial Hospital Assoc. Project)/(AMBAC
Insurance & ABN Amro Bank N.V. SBPA)
3.90%, 01/07/97 3,700 3,700
California Education Facility Authority Revenue
Refunding Bonds (Stanford University) Series
1996-14
3.70%, 01/07/97 4,775 4,775
California Health Facility Finance Authority Revenue
Bonds (Catholic Healthcare Services) Series 1995C/
(MBIA Insurance)
4.00%, 01/07/97 6,700 6,700
California Health Facility Finance Authority Revenue
Bonds (Catholic Healthcare West) Series 1988B/
(MBIA Insurance)
4.00%, 01/07/97 6,000 6,000
California Health Facility Finance Authority Revenue
Bonds (Scripps Memorial Hospital) Series 1991A/
(MBIA Insurance & Morgan Guaranty Trust SBPA)
4.00%, 01/07/97 1,200 1,200
California Higher Education Loan Authority Student
Loan Refunding Bonds Series E1/(SLMA LOC)
4.25%, 01/07/97 5,000 5,000
California Pollution Control Financing Authority
Pollution Control Revenue Bonds (Shell Oil Co.
Project) Series 1991B
5.00%, 01/01/97 6,600 6,600
</TABLE>
24
<PAGE> 31
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
California Pollution Control Financing Authority
Pollution Control Revenue Bonds (Southern
California Edison) Series 1986D
4.70%, 01/01/97 $ 400 $ 400
California Pollution Control Financing Authority
Resource Recovery Revenue Bonds (Burney Forest
Project) Series 1988A/(Fleet Bank N.A. LOC)
4.80%, 01/01/97 1,300 1,300
California Pollution Control Financing Authority
Revenue Bonds (Southern California Edison) Series
1986A
4.70%, 01/01/97 7,200 7,200
California Pollution Control Financing Authority
Revenue Refunding Bonds (Pacific Gas & Electric)
Series 1996F/(Banque Nationale de Paris LOC)
4.80%, 01/01/97 2,300 2,300
California State Variable Rate Revenue Anticipation
Notes Series 1996C-3/(Multiple Credit
Enhancements)
4.05%, 01/07/97 8,800 8,800
California State Variable Rate Revenue Anticipation
Notes Series 1996C-1/(Multiple Credit
Enhancements)
4.00%, 01/07/97 4,100 4,100
California State Variable Rate Revenue Anticipation
Notes Series 1996C-2/(Multiple Credit
Enhancements)
4.05%, 01/07/97 1,200 1,200
California Statewide Community Development Authority
Certificates of Participation (Northern California
Retired Officers Assoc.)/(Dresdner Bank AG LOC)
5.00%, 01/01/97 4,900 4,900
California Statewide Community Development Authority
Revenue Bonds Certificates of Participation
(Kaiser Foundation Hospitals)
4.00%, 01/07/97 5,000 5,000
Foothill Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds Series 1995B/
(Morgan Guaranty Trust LOC)
4.00%, 01/07/97 2,000 2,000
Foothill Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds Series 1995D/
(IBJ LOC)
4.10%, 01/07/97 24,100 24,100
Indio, California Multi-Family Redevelopment Bonds
Refunding Housing Mortgages (Carreon Apartments)
Series 1996A
4.00%, 01/07/97 3,950 3,950
Irvine Ranch Water District Consolidated Revenue
Refunding Bonds Series 1993A/(Bank of America LOC)
4.85%, 01/01/97 600 600
</TABLE>
25
<PAGE> 32
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Irvine Ranch, California Water District Certificates
of Participation Revenue Bonds Series
1988A/(Sumitomo Bank LOC)
4.85%, 01/01/97 $ 500 $ 500
Los Angeles County, California Metropolitan
Transportation Authority Proposition C Second
Senior Sales Tax Revenue Refunding Bonds Series
A/(MBIA Insurance & Credit Locale de France SPA)
4.00%, 01/07/97 42,300 42,300
Los Angeles County, California Pension Revenue
Refunding Obligation Bonds Series 1996A/(AMBAC
Insurance & National Westminster Bank PLC SBPA)
3.90%, 01/07/97 3,900 3,900
Los Angeles, California Community Redevelopment
Agency Certificates of Participation (Broadway
Springs Center Project) Series 1987/(Bank of
America LOC)
4.10%, 01/07/97 100 100
Northern California Power Agency Public Power
Revenue Refunding Bonds (Geothermal Project
3A)/(AMBAC Insurance & Bank of Nova Scotia LOC)
3.85%, 01/07/97 100 100
Orange County, Water District Certificates of
Participation Series 1990B (National Westminster
Bank PLC LOC)
4.75%, 01/01/97 8,800 8,800
Orange County, California Apartment Development
Revenue Refunding Bonds (The Lakes Project #185)
Series 1991A/(Citibank LOC)
4.15%, 01/07/97 800 800
Orange County, California Sanitation District
Certificates of Participation Series
1990-92A/(National Westminster Bank PLC LOC)
5.00%, 01/01/97 1,000 1,000
Orange County, California Sanitation Districts No.
1-3, 5-7 & 11 Refunding Certificates of
Participation Series 1992/(AMBAC Insurance &
Barclays Bank SBPA)
4.00%, 01/07/97 2,700 2,700
Orange County, California Various Sanitation
Districts Certificates of Participation (Capital
Improvement Programs) Series 1990-92C/(FGIC
Insurance & FGIC SPA)
4.85%, 01/01/97 1,500 1,500
Orange County, California Water District 1915
Improvement Bond Act Revenue Bonds (Irvine Coast
Assessment District) Number 88-1/(Kredietbank &
Societe Generale LOC)
4.85%, 01/01/97 17,700 17,700
</TABLE>
26
<PAGE> 33
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Riverside County, California Certificates of
Participation (Riverside County Public Facility
Project) Series 1985A/(Commerzbank AG & National
Westminster Bank PLC LOC)
3.10%, 01/07/97 $ 3,800 $ 3,800
Riverside County, California Certificates of
Participation (Riverside County Public Facility
Project) Series 1985C/(Sanwa Bank LOC)
2.85%, 01/07/97 2,000 2,000
Riverside County, California Variable Rate Tax
Revenue Anticipation Notes Series 1996-97/
(Toronto-Dominion Bank LOC)
3.90%, 01/07/97 9,600 9,600
San Francisco, California City & County
Redevelopment Agency Multi-Family Revenue Bonds
(Rincon Center Apartments) Series 1985B/(Citibank
LOC)
3.00%, 01/07/97 1,955 1,955
Simi Valley, California Multi-Family Housing
Certificates of Participation (Lincoln Wood Ranch
Project)/(Sumitomo Bank LOC)
4.30%, 01/07/97 2,000 2,000
Southern California Public Power Authority Refunding
Revenue Bonds (Palos Verdes Project) Series 1996B/
(AMBAC Insurance & Morgan Guaranty Trust SBPA)
3.90%, 01/07/97 1,800 1,800
Southern California Public Power Authority Revenue
Refunding Bonds (Southdown Transmission Project)
Series 1996B/(FSA Insurance & Morgan Guaranty
Trust SBPA)
4.00%, 01/07/97 3,600 3,600
Southern California Public Power Authority Revenue
Refunding Bonds (Transmission Project) Series
1991/(AMBAC Insurance & Swiss Bank LOC)
3.90%, 01/07/97 11,200 11,200
Western Riverside County, California Regional
Wastewater Authority Revenue Bonds (Regulatory
Wastewater Treatment)/(National Westminster Bank
PLC LOC)
5.00%, 01/01/97 2,100 2,100
-------
235,850
-------
COLORADO--4.59%
Central City, Colorado Multi-Family Housing Revenue
Bonds (Gold Mountain Apartment Project)/(PNC Bank,
Kentucky LOC)
4.25%, 01/07/97 8,250 8,250
Colorado Health Facilities Authority Hospital
Revenue Adjustable Rate Tender Securities
(Dresdner Bank AG & Toronto-Dominion Bank SBPA)
4.15%, 01/07/97 5,000 5,000
</TABLE>
27
<PAGE> 34
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Colorado Health Facilities Authority Revenue Bonds
(North Colorado Medical Center)/(Citibank LOC)
4.15%, 01/07/97 $10,100 $ 10,100
Colorado Health Facilities Authority Revenue Bonds
(Sisters of Charity Health) Series B/(Dresdner
Bank AG & Toronto-Dominion Bank LOC)
4.15%, 01/07/97 23,000 23,000
Colorado Student Obligation Bond Authority Student
Loan Revenue Bonds (Colorado University) Series
1989A/(SLMA LOC)
4.10%, 01/07/97 6,100 6,100
Colorado Student Obligation Bond Authority Student
Loan Revenue Bonds (Colorado University) Series
1990A/(SLMA LOC)(d)
4.10%, 01/07/97 23,810 23,810
Colorado Student Obligation Bond Authority Student
Loan Revenue Bonds (Colorado University) Series
1993B/(SLMA LOC)
4.10%, 01/07/97 4,400 4,400
Colorado Student Obligation Bond Authority Student
Loan Revenue Bonds (Colorado University) Series
1993C-2/(SLMA LOC)
4.00%, 01/07/97 2,200 2,200
Denver City & County, Colorado Airport System
Revenue Bonds Series 1992D/(Morgan Guaranty Trust
LOC)
4.40%, 01/07/97 48,900 48,900
Denver City & County, Colorado Airport System
Revenue Bonds Series 1992E/(Bank of
Tokyo-Mitsubishi LOC)
4.55%, 01/07/97 30,000 30,000
Denver City & County, Colorado Airport System
Revenue Bonds Series 1992F/(Bank of Montreal LOC)
4.40%, 01/07/97 16,000 16,000
Denver City & County, Colorado Airport System
Revenue Bonds Series 1992G/(Credit Local de France
LOC)
4.40%, 01/07/97 20,000 20,000
Douglas County, Colorado Multi Family Housing
Revenue Bonds (Autumn Chase Project)/(Citibank
LOC)
4.10%, 01/07/97 9,300 9,300
Smith Creek Metropolitan District Revenue Bonds
Series 1995/(NationsBank of Texas N.A. LOC)
4.05%, 01/07/97 6,300 6,300
-------
213,360
-------
CONNECTICUT--0.23%
Connecticut State Second Lien Special Tax Obligation
Bonds Series 1990-1/(Commerzbank AG LOC)
4.00%, 01/07/97 10,800 10,800
-------
</TABLE>
28
<PAGE> 35
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
DISTRICT OF COLUMBIA--0.09%
District of Columbia Revenue Bonds Adjustable
Convertible Extendable Securities (Georgetown
University) Series 1988D/(Sanwa Bank SBPA)
4.10%, 01/07/97 $ 4,200 $ 4,200
------
FLORIDA--0.77%
Florida Housing Finance Agency Housing Revenue Bonds
(Tiffany Club Project) Series 1996P/(NationsBank
LOC)
4.45%, 01/07/97 2,875 2,875
Indian Trace, Florida Community Development District
(Broward County Florida Basin 1 Water)/(MBIA
Insurance & Swiss Bank SBPA)
3.85%, 01/07/97 5,565 5,565
Orange County, Florida Housing Finance Authority
Multi-Family Housing Revenue Bonds (Rio Vista
Project)/(First Union Bank of North Carolina LOC)
4.10%, 01/07/97 3,815 3,815
Orange County, Florida Housing Finance Authority
Multi-Family Housing Revenue Bonds (Smokewood
Project)/(Citibank LOC)
4.25%, 01/07/97 10,000 10,000
Palm Beach County, Florida Health Facilities
Authority Revenue Refunding Bonds (Joseph L. Morse
Geriatric Center)/(SunTrust Bank LOC)
4.20%, 01/07/97 11,905 11,905
Palm Beach County, Florida Housing Finance Authority
Multi-Family Housing Revenue Bonds (Crystal II
Project)/(Citibank LOC)
3.95%, 01/07/97 1,800 1,800
------
35,960
------
GEORGIA--3.87%
Albany-Dougherty Co. Hospital Authority Revenue
Bonds (Phoebe Putney Memorial Hospital) Series
1996/(AMBAC Insurance)
4.30%, 01/07/97 6,400 6,400
Burke County, Georgia Development Authority
Pollution Control Revenue Bonds (Oglethorpe Power
Project) Series 1993A/(FGIC Insurance & Canadian
Imperial Bank of Commerce SBPA)
4.00%, 01/07/97 10,340 10,340
Burke County, Georgia Development Authority
Pollution Control Revenue Bonds (Oglethorpe Power
Project) Series 1994A/(Credit Local de France SBPA
& FGIC Insurance)(d)
4.00%, 01/07/97 23,100 23,100
</TABLE>
29
<PAGE> 36
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Cherokee County, Georgia Development Authority
Industrial Development Revenue Bonds (Universal
Alloy Project)/(Wachovia Bank LOC)
4.25%, 01/07/97 $ 5,500 $ 5,500
Cobb County, Georgia Housing Authority Multi-Family
Housing Revenue Bonds (Walton Green Project)/
(Wachovia Bank LOC)
4.25%, 01/07/97 14,000 14,000
Cobb County, Georgia Housing Authority Multi-Family
Housing Revenue Bonds (Williamstown Apartment
Project)/(Wachovia Bank LOC)
4.25%, 01/07/97 2,000 2,000
Dekalb County, Georgia Development Authority
Industrial Development Revenue Bonds (Park North
Business Center Project)/(Wachovia Bank LOC)
4.15%, 01/07/97 5,140 5,140
Dekalb County, Georgia Development Authority
Industrial Development Revenue Bonds (Siemens
Energy, Inc. Project)/(Siemens A.G. Guaranty)
4.20%, 01/07/97 3,750 3,750
Dekalb County, Georgia Development Authority Revenue
Bonds (American Cancer Society)/(Trust Company
Bank LOC)
4.15%, 01/07/97 1,975 1,975
Dekalb County, Georgia Housing Authority Multi
Family Housing Revenue Bonds (Wood Hills Apartment
Project)/(Bank of Montreal LOC)
4.15%, 01/07/97 5,250 5,250
Dekalb, Georgia Private Hospital Authority Revenue
Anticipation Certificates (Egleston Childs
Hospital/ Emory University) Series 1994A & B4/
(Trust Bank of Atlanta LOC)
3.70%, 01/07/97 7,000 7,000
Douglas County, Georgia Development Authority
Industrial Development Revenue Bonds (Mima Inc.
Project)/(Wachovia Bank LOC)
4.10%, 01/07/97 4,300 4,300
Fulton County, Georgia Development Authority Revenue
Adjusting Bonds (Woodruff Arts Center)/(Wachovia
Bank LOC)
4.15%, 01/07/97 22,500 22,500
Laurens County, Georgia Development Authority Solid
Waste Disposal Revenue Bonds (Southeast Paper Co.
Project)/(Wachovia Bank LOC)
4.25%, 01/07/97 25,000 25,000
Municipal Gas Authority of Georgia Gas Portfolio II
Series 1996-4/(Credit Suisse LOC)
3.90%, 01/07/97 10,000 10,000
</TABLE>
30
<PAGE> 37
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Richmond County, Georgia Industrial Development
Authority Revenue Bonds (BOK Group Project)/
(Wachovia Bank LOC)
4.15%, 01/07/97 $ 5,000 $ 5,000
Rockmart, Georgia Industrial Development Authority
Revenue Bonds (CW Matthews Contracting)/(Wachovia
Bank LOC)
4.25%, 01/07/97 2,000 2,000
Roswell, Georgia Housing Authority Multi Family
Housing Revenue Bonds (Gables Realty Wood Crossing
Project)/(Wachovia Bank LOC)
4.15%, 01/07/97 11,650 11,650
Savannah, Georgia Economic Development Authority
Revenue Bonds (Home Depot Project)/(Trust Company
Bank LOC)
4.20%, 01/07/97 5,000 5,000
Smyrna, Georgia Housing Authority Multi Family
Housing Revenue Bonds (Walton Park LP
Project)/(Wachovia Bank LOC)
4.25%, 01/07/97 8,000 8,000
Villa Rica, Georgia Industrial Development Revenue
Bonds (Lowes Home Centers, Inc. Project)/(Wachovia
Bank LOC)
4.15%, 01/07/97 800 800
Worth County, Georgia Industrial Development
Authority Revenue Refunding Bonds (Seabrook
Project) Series 1996B/(Sun Bank LOC)
4.25%, 01/07/97 1,400 1,400
-------
180,105
-------
HAWAII--1.34%
Hawaii State Department of Budget & Finance Special
Purpose Mortgage Revenue Bonds (Adventist Health
System West)/(Union Bank of California LOC)
4.05%, 01/07/97 3,100 3,100
Hawaii State Housing Finance & Development Corp.
Multi Family Housing Revenue Bonds (Nani Mauna Loa
Project) Series 1995A/(Citibank LOC)
4.25%, 01/07/97 3,900 3,900
Hawaii State Housing Finance & Development Corp.
Multi Family Housing Revenue Bonds (Rental Housing
System) Series 1990A/(IBJ LOC)
4.20%, 01/07/97 21,600 21,600
Hawaii State Housing Finance & Development Corp.
Multi Family Housing Revenue Bonds (Rental Housing
System) Series 1990B/(IBJ LOC)
4.20%, 01/07/97 19,400 19,400
</TABLE>
31
<PAGE> 38
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Honolulu, Hawaii City & County Multi Family Housing
Revenue Bonds (Hale Kua Gardens Project) Series A/
(Bank of Tokyo-Mitsubishi LOC)
4.25%, 01/07/97 $ 5,120 $ 5,120
Honolulu, Hawaii City & County Multi Family Housing
Revenue Bonds (Iolani Regents Project) Series
1990A/ (Bank of Hawaii LOC)
4.35%, 01/07/97 9,225 9,225
------
62,345
------
ILLINOIS--8.84%
Aurora, Kane, & Dupage Counties, Illinois Industrial
Development Revenue Bonds (North American Plastics
Corp.)/(First of America Bank Illinois LOC)
4.45%, 01/07/97 5,400 5,400
Centralia, Illinois Industrial Development Authority
Revenue Bonds (Hollywood Brands Project)/
(Wachovia Bank LOC)
4.15%, 01/07/97 4,500 4,500
Chicago, Illinois Industrial Development Revenue
Bonds (Morse Automotive) Series 1995/(American
National Bank & Trust LOC)
4.29%, 01/07/97 2,800 2,800
Chicago, Illinois O'Hare International Airport
Revenue Bonds (General Airport Second Lien) Series
1994C/ (Societe Generale LOC)
4.25%, 01/07/97 11,900 11,900
4.15%, 01/07/97 11,800 11,800
Chicago, Illinois O'Hare International Airport
Revenue Bonds (General Airport Second Lien) Series
A/ (Westpac Banking Corp. LOC)
4.15%, 01/07/97 15,800 15,800
Chicago, Illinois O'Hare International Airport
Revenue Bonds Adjustable Convertible Extendable
Securities (General Airport Second Lien) Series
B-1/(Sanwa Bank LOC)
4.20%, 01/07/97 9,800 9,800
Chicago, Illinois O'Hare International Airport
Revenue Bonds Adjustable Convertible Extendable
Securities (General Airport Second Lien) Series
B-2/(Sanwa Bank LOC)
4.20%, 01/07/97 9,800 9,800
Illinois Development Finance Authority Hospital
Revenue Bonds (Palos Community Hospital) Series
1994-1/ (Credit Suisse SBPA)
4.15%, 01/07/97 33,700 33,700
</TABLE>
32
<PAGE> 39
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Illinois Development Finance Authority Hospital
Revenue Bonds (Palos Community Hospital) Series
1994-2/(Credit Suisse SBPA)
4.15%, 01/07/97 $ 7,500 $ 7,500
Illinois Development Finance Authority Industrial
Development Revenue Bonds (Chicago Corrugated Box
Co.) Series 1996/(American National Bank & Trust
Co. LOC)
4.29%, 01/07/97 1,500 1,500
Illinois Development Finance Authority Industrial
Development Revenue Bonds (Knead Dough Baking
Co.)/(Bank of America LOC)
4.25%, 01/07/97 8,240 8,240
Illinois Development Finance Authority Industrial
Development Revenue Bonds (Molding Project)/
(Northern Trust LOC)
4.40%, 01/07/97 1,100 1,100
Illinois Development Finance Authority Industrial
Development Revenue Bonds (Pekin Paperboard Co.
LP) Series 1994/(Northern Trust LOC)
4.40%, 01/07/97 5,500 5,500
Illinois Development Finance Authority Industrial
Development Revenue Bonds (SMF, Inc. Project)
Series A
4.15%, 01/07/97 2,295 2,295
Illinois Development Finance Authority Presbyterian
Home Lake Series 1996A/(Lasalle National Bank LOC)
4.20%, 01/07/97 21,000 21,000
Illinois Development Finance Authority Residential
Rental Revenue Bonds (F.C. Harris Pavillion
Project) Series 1994/(FNMA Collateral Investment
Agreement)
4.10%, 01/07/97 1,000 1,000
Illinois Development Finance Authority Revenue Bonds
(Rich Graphics Corp. Project) Series 1996/
(American National Bank & Trust Co. LOC)
4.29%, 01/07/97 3,200 3,200
Illinois Development Finance Authority Revenue Bonds
(Village Oak Park Residence)/(Firstar Bank,
Milwaukee LOC)
4.30%, 01/07/97 2,260 2,260
Illinois Educational Facility Authority Revenue
Bonds (Chicago Historical Society)/(Bank of Tokyo-
Mitsubishi LOC)
4.20%, 01/07/97 8,200 8,200
Illinois Educational Facility Authority Revenue
Bonds (Chicago Zoological Society, Brookfield Zoo)
Series B/(Chase Bank LOC)
4.25%, 01/07/97 2,200 2,200
</TABLE>
33
<PAGE> 40
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Illinois Educational Facility Authority Revenue
Bonds (Illinois Institute of Technology) Series
1990A/(Harris Trust & Savings Bank & Northern
Trust LOC)
4.20%, 01/07/97 $11,100 $11,100
Illinois Educational Facility Authority Revenue
Bonds (Northwestern University)/(FNB Chicago SBPA)
4.25%, 01/07/97 22,200 22,200
Illinois Health Facility Authority Revenue Bonds
(Bensenville Home Society) Series 1989A/(American
National Bank & Trust Co. LOC)
4.10%, 01/07/97 2,450 2,450
Illinois Health Facility Authority Revenue Bonds
(Highland Park Hospital) Series 1991B/(Swiss Bank
LOC)
4.00%, 01/07/97 11,000 11,000
Illinois Health Facility Authority Revenue Bonds
(Hospital Sisters Services) Series E/(MBIA
Insurance & Morgan Guaranty Trust SBPA)
4.15%, 01/07/97 4,300 4,300
Illinois Health Facility Authority Revenue Bonds
(Ingalls Memorial Hospital) Series 1985C/(Lasalle
National Bank LOC)
4.15%, 01/07/97 1,100 1,100
Illinois Health Facility Authority Revenue Bonds
(Revolving Fund Pooled Loan) Series 1985C/(FNB
Chicago LOC)
4.15%, 01/07/97 6,000 6,000
Illinois Health Facility Authority Revenue Bonds
(Revolving Fund Pooled Loan) Series 1985D/(FNB
Chicago LOC)
4.15%, 01/07/97 20,000 20,000
Illinois Health Facility Authority Revenue Bonds
(Streeterville Corp.) Series A/(FNB Chicago LOC)
4.20%, 01/07/97 14,400 14,400
Illinois Health Facility Authority Revenue Bonds
(Washington & Jane Smith Home) Series 1991/
(Comerica Bank LOC)
4.25%, 01/07/97 2,800 2,800
Illinois State Toll Highway Authority Revenue Bonds
Series B/(MBIA Insurance & Societe Generale SBPA)
4.00%, 01/07/97 65,900 65,900
Kane County, Illinois Revenue Bonds (Glenwood School
for Boys)/(Harris Trust & Savings Bank LOC)
4.20%, 01/07/97 9,000 9,000
</TABLE>
34
<PAGE> 41
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Lombard, Illinois Industrial Development Revenue
Refunding Bonds (B & H Partnership Project)/
(Comerica Bank LOC)
4.38%, 01/07/97 $ 1,850 $ 1,850
McHenry County, Illinois Industrial Development
Authority Revenue Refunding Bonds (Dean Foods
Co.)/(Wachovia Bank LOC)
4.15%, 01/07/97 2,675 2,675
New Lenox, Illinois Industrial Development Revenue
Bonds (Panduit Corp. Project)/(Commerzbank
AG LOC)
4.35%, 01/07/97 4,400 4,400
Oak Forest, Illinois Revenue Bonds (Homewood Pool)
Series 1989/(FNB Chicago LOC)
4.20%, 01/07/97 37,000 37,000
Rockford, Illinois Industrial Development Revenue
Bonds (Industrial Welding Supply, Inc.
Project)/(American National Bank & Trust Co. LOC)
4.29%, 01/07/97 2,000 2,000
Upper Illinois River Valley Development Authority
Bonds (Exolon Esk Co.)/(Chase Manhattan LOC)
4.40%, 01/07/97 4,405 4,405
Wheeling, Illinois Manufacturing Refunding Revenue
Bonds (Woodland Creek II) Series 1990/(FSA
Insurance & Barclays Bank PLC SBPA)
4.20%, 01/07/97 17,655 17,655
Yorkville, Illinois Industrial Development Revenue
Bonds (F.E. Wheaton & Co. Project) Series
1996/(American National Bank & Trust LOC)
4.29%, 01/07/97 1,600 1,600
-------
411,330
-------
INDIANA--0.36%
Crawfordsville, Indiana Industrial Development
Revenue Bonds (National Service Industries
Project)/(Wachovia Bank LOC)
4.15%, 01/07/97 4,000 4,000
Hammond, Indiana Economic Development Revenue Bonds
(Lear Seating Corp. Project) Series 1994/(Chase
Manhattan Bank LOC)
3.90%, 01/07/97 8,500 8,500
Indianapolis, Indiana Economic Development Authority
Revenue Bonds (Herff-Jones, Inc. Project)/
(Wachovia Bank LOC)
4.40%, 01/07/97 4,100 4,100
-------
16,600
-------
</TABLE>
35
<PAGE> 42
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
IOWA--0.09%
Iowa Higher Education Loan Authority Revenue Bonds
(Adjustable Convertible Extendable Securities
Education Loan Private College Facility)/(MBIA
Insurance & Dai-Ichi Kangyo Bank SBPA)
4.10%, 01/07/97 $ 4,100 $ 4,100
------
KANSAS--0.14%
Kansas City, Kansas Industrial Revenue Bonds (Owen
Industries, Inc. Project) Series 1987/(Sanwa Bank
LOC)
4.40%, 01/07/97 1,800 1,800
Wichita, Kansas Airport Facilities Revenue Bonds
(Flightsafety International, Inc.)/(Wachovia Bank
LOC)
4.25%, 01/07/97 3,000 3,000
Wichita, Kansas Health Facilities Authority Revenue
Bonds (CSJ Health System) Series XXV/(Sumitomo
Bank LOC)
4.30%, 01/07/97 1,900 1,900
------
6,700
------
KENTUCKY--1.30%
Kentucky Higher Education Student Loan Corp. Revenue
Bonds Series 1996A/(MBIA Insurance & Landesbank
Hessen-Thuringen Girozentrale SBPA)
4.25%, 01/07/97 8,400 8,400
Lebanon, Kentucky Industrial Development Revenue
Bonds (Wallace Computer Services, Inc.)/(Wachovia
Bank LOC)
4.30%, 01/07/97 5,000 5,000
Mason County, Kentucky Pollution Control Finance
Authority Revenue Bonds (East Kentucky Power
Corp.) Series 1984B-1/(N.R.U.-C.F.C. Guaranty)
4.15%, 01/07/97 12,250 12,250
Mayfield, Kentucky Multi City Lease Revenue Bonds
(League of Cities Funding Trust)/(PNC Bank LOC)
4.30%, 01/07/97 18,000 18,000
Maysville, Kentucky Industrial Building Revenue
Bonds (Green Tokai Building)/(Bank of America LOC)
4.30%, 01/07/97 5,740 5,740
Murray, Kentucky Industrial Development Authority
Revenue Bonds (Dean Foods Co.)/(Wachovia Bank LOC)
4.25%, 01/07/97 6,000 6,000
</TABLE>
36
<PAGE> 43
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Owensboro, Kentucky Limited Obligation Revenue Bonds
(Dart Polymers, Inc. Project) Series 1985A/
(National Westminster Bank PLC LOC)
3.85%, 01/07/97 $ 1,900 $ 1,900
Wilson County, Kentucky Industrial Development Board
Revenue Bonds (Perma Pipe Project)/(Harris Trust &
Savings Bank LOC)
4.40%, 01/01/97 3,150 3,150
-------
60,440
-------
LOUISIANA--3.06%
De Soto Parish, Louisiana Pollution Control
Financing Authority Revenue Refunding Bonds
(Central Louisiana Electric Co.) Series
1991A/(Swiss Bank LOC)
4.05%, 01/07/97 400 400
De Soto Parish, Louisiana Pollution Control
Financing Authority Revenue Refunding Bonds
(Central Louisiana Electric Co.) Series
1991B/(Swiss Bank LOC)
4.05%, 01/07/97 15,000 15,000
Louisiana Offshore Terminal Authority Deepwater Port
Refunding Revenue Bonds/(Union Bank of Switzerland
LOC)
4.10%, 01/07/97 21,720 21,720
Louisiana Public Facilities Authority Hospital
Revenue Bonds (Willis Knighton Medical
Project)/(AMBAC Insurance & Mellon Bank SBPA)
4.20%, 01/07/97 17,960 17,960
New Orleans, Louisiana Aviation Board Revenue Bonds
(Passenger Facility Charge Projects) Series 1994/
(Banque Paribas & Canadian Imperial Bank of
Commerce LOC)
4.40%, 01/07/97 6,300 6,300
New Orleans, Louisiana Aviation Board Revenue Bonds
Series B/(MBIA Insurance & IBJ SBPA)
4.10%, 01/07/97 72,820 72,820
Rapides Parish, Louisiana Industrial Development
Board Pollution Control Revenue Refunding Bonds
(Central Louisiana Electric Co.) Series
1991/(Swiss Bank LOC)
4.05%, 01/07/97 8,150 8,150
-------
142,350
-------
MAINE--0.22%
Regional Waste System, Inc. Maine Solid Waste
Resource Recovery Revenue Bonds Series
1993M/(Midland Bank PLC LOC)
4.15%, 01/07/97 4,590 4,590
</TABLE>
37
<PAGE> 44
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Regional Waste System, Inc. Maine Solid Waste
Resource Recovery Revenue Bonds Series
1995O/(Midland Bank PLC LOC)
4.15%, 01/07/97 $ 5,500 $ 5,500
-------
10,090
-------
MARYLAND--2.28%
Baltimore, Maryland Industrial Development Authority
Revenue Bonds (City of Baltimore Capital
Acquisition Program) Series 1986/(Dai-Ichi Kangyo
Bank LOC)
4.35%, 01/07/97 52,400 52,400
Maryland State Health & Higher Education Facility
Authority Pooled Revenue Bonds (Kennedy Krieger)
Series 1993D/(FNB Maryland LOC)
4.25%, 01/07/97 2,000 2,000
Maryland State Health & Higher Education Facility
Authority Revenue Bonds (Pooled Loan Program)
Series 1985A/(FNB Chicago LOC)
4.20%, 01/07/97 9,700 9,700
Maryland State Health & Higher Education Facility
Authority Revenue Bonds (Pooled Loan Program)
Series 1985B/(FNB Chicago LOC)
4.25%, 01/07/97 16,100 16,100
Montgomery County, Maryland Housing Opportunity
Commission Housing Revenue Bonds (Draper Lane)
Series 1991I/(FGIC Insurance & Barclays Bank PLC
SBPA)
4.20%, 01/07/97 16,500 16,500
Northeast Maryland Waste Disposal Authority Resource
Recovery Revenue Bonds (Hartford County)/(AMBAC
Insurance & Credit Local de France SBPA)
4.00%, 01/07/97 9,600 9,600
-------
106,300
-------
MASSACHUSETTS--0.02%
Massachusetts Health and Education Facility
Authority Capital Assets Program Series
1985D/(MBIA Insurance & Credit Suisse SBPA)
4.90%, 01/07/97 500 500
Massachusetts State Industrial Finance Agency
Resource Recovery Revenue Refunding Bonds (Ogden
Haverhill Project) Series 1992A/(Union Bank of
Switzerland LOC)
3.90%, 01/07/97 500 500
-------
1,000
-------
</TABLE>
38
<PAGE> 45
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
MICHIGAN--0.21%
Grand Rapids Economic Development Corporation Series
1991-A (Amway Hotel Corp. Project)/(ABN-Amro Bank
N.V. LOC)
3.95%, 01/07/97 $ 6,225 $ 6,225
Michigan State Strategic Fund Limited Obligation
Revenue Bonds (Dean Foods Co. Project)/(Wachovia
Bank LOC)
4.25%, 01/07/97 3,500 3,500
------
9,725
------
MINNESOTA--1.28%
Bloomington, Minnesota Port Authority Special Tax
Revenue Bonds (Mall of America Project) Series
1996B/(Credit Local de France SBPA)
4.20%, 01/07/97 6,000 6,000
Bloomington, Minnesota Port Authority Tax Increment
Revenue Refunding Bonds (Mall of America) Series
1995A/(Credit Local de France SBPA & FSA
Insurance)
4.20%, 01/07/97 25,000 25,000
Hennepin County, Minnesota Unlimited General
Obligation Notes Series 1996C
4.30%, 01/07/97 5,750 5,750
Hennepin County, Minnesota General Obligation Bonds
Series 1995C
4.15%, 01/07/97 3,500 3,500
Minnesota Agriculture & Economic Development Revenue
Bonds (Evangelical Lutheran Project)/(Rabobank
Nederland N.V. LOC)
4.20%, 01/07/97 5,500 5,500
St. Paul, Minnesota Housing Redevelopment Authority
Multi Family Housing Development Bonds (Multi City
Joint Rental Housing Program) Series 1985A/(FHLB
Des Moines LOC)
4.25%, 01/07/97 13,900 13,900
------
59,650
------
MISSISSIPPI--0.15%
Mississippi Business Financial Corp. Industrial
Development Revenue Bonds (Omega Motion) Series
1996/(Wachovia Bank LOC)
4.25%, 01/07/97 6,800 6,800
------
</TABLE>
39
<PAGE> 46
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
MISSOURI--0.80%
Independence, Missouri Industrial Development
Authority Revenue Bonds (Resthaven
Project)/(Credit Local de France LOC)
4.15%, 01/07/97 $ 9,640 $ 9,640
Mexico, Missouri Industrial Development Authority
Revenue Bonds (ABP Midwest Manufacturing Project)
Series 1995/(Royal Bank of Scotland LOC)
4.30%, 01/07/97 7,300 7,300
Missouri State Development Finance Board Industrial
Development Revenue Bonds (H.R. Williams Mill
Supply Project) Series 1995/(Union Bank of
Switzerland LOC)
4.30%, 01/07/97 3,100 3,100
Missouri State Health & Education Facilities
Authority Revenue Bonds (Barnes Hospital
Project)/(Morgan Guaranty Trust LOC)
4.00%, 01/07/97 6,400 6,400
St. Charles, Missouri Industrial Development
Authority Revenue Bonds (Land Development Co.
Project)/(Commerce Bank of St. Louis LOC)
3.70%, 01/07/97 3,850 3,850
St. Charles, Missouri Industrial Development
Authority Revenue Refunding Bonds (Casalon
Apartments Project)/(Citibank LOC)
4.25%, 01/07/97 3,100 3,100
Washington, Missouri Industrial Development
Authority Revenue Bonds (Pauwels Transformer
Project)/(Generale Bank LOC)
4.40%, 01/07/97 3,900 3,900
------
37,290
------
MONTANA--0.29%
Forsyth, Montana Pollution Control Financing
Authority Revenue Bonds (Portland General Electric
Coal Stripping Project) Series 1983B/(Swiss Bank
LOC)
4.15%, 01/07/97 6,500 6,500
Montana State Health Facility Authority Revenue
Bonds (Health Care Pooled Loan Program) Series
1985A/(FGIC Insurance & Norwest Bank of Minnesota
SBPA)
4.20%, 01/07/97 6,995 6,995
------
13,495
------
NEVADA--0.80%
Clark County, Nevada Airport Improvement Revenue
Refunding Bonds Series 1993A/(MBIA Insurance &
National Westminster Bank PLC LOC)(d)
4.00%, 01/07/97 32,931 32,931
</TABLE>
40
<PAGE> 47
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Nevada Housing Division Multi Family Housing Revenue
Bonds Series 1989A/(FNMA LOC)
4.25%, 01/07/97 $ 4,100 $ 4,100
------
37,031
------
NEW HAMPSHIRE--0.17%
New Hampshire Higher Education & Health Facilities
Authority Revenue Bonds (VHA New England, Inc.)
Series 1985B/(AMBAC Insurance & FNB Chicago SBPA)
4.00%, 01/07/97 1,000 1,000
New Hampshire State Housing Finance Authority Multi
Family Housing Revenue Bonds (Fairways Project)
Series 1994-1/(General Electric Capital Corp. LOC)
4.20%, 01/07/97 7,000 7,000
------
8,000
------
NEW JERSEY--0.13%
New Jersey State Turnpike Authority Revenue Bonds
Series 1991D/(FGIC Insurance & Societe Generale
SBPA)
3.75%, 01/07/97 6,000 6,000
------
NEW MEXICO--0.44%
Albuquerque, New Mexico Airport Revenue Bonds
Subordinated Lien Series 1996A/(Bayerische
Landesbank Girozentrale LOC)
4.10%, 01/07/97 4,500 4,500
Albuquerque, New Mexico Gross Receipts Lodgers Tax
Adjustable Rate Tender Revenue Bonds Series 1994/
(Canadian Imperial Bank of Commerce LOC)
4.10%, 01/07/97 700 700
Belen, New Mexico Industrial Development Revenue
Bonds (Solo Cup, Inc. Project)/(Wachovia Bank LOC)
4.25%, 01/07/97 3,250 3,250
New Mexico State Highway Commercial Revenue
Subordinate Lien Bonds Series 1996/(Canadian
Imperial Bank of Commerce LOC)
3.70%, 01/07/97 12,000 12,000
------
20,450
------
NEW YORK--1.64%
Nassau County, New York Industrial Development
Agency Civic Facilities Revenue Bonds (Cold Spring
Harbor Laboratory Project)/(Morgan Guaranty Trust
LOC)
4.90%, 01/01/97 4,100 4,100
New York City, New York General Obligation Bonds
Series 1993 Subseries A-5/(Kredietbank LOC)
5.00%, 01/01/97 2,115 2,115
</TABLE>
41
<PAGE> 48
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
New York City, New York General Obligation Bonds
Series 1993 Subseries A-8/(Morgan Guaranty Trust
LOC)
5.00%, 01/01/97 $ 15 $ 15
New York City, New York General Obligation Bonds
Series 1994 Subseries A-9/(Morgan Guaranty Trust
LOC)
4.05%, 01/07/97 2,310 2,310
New York City, New York General Obligation Bonds
Series 1994 Subseries B-2/(Bank Austria AG SBPA &
MBIA Insurance)
5.00%, 01/01/97 400 400
New York City, New York General Obligation Bonds
Series 1995 Subseries B-10/(Union Bank of
Switzerland LOC)
4.05%, 01/07/97 3,900 3,900
New York City, New York General Obligation Bonds
Series 1995 Subseries B-8/(Bayerishe Landesbank
Girozentrale LOC)
4.05%, 01/07/97 2,700 2,700
New York City, New York Housing Development Corp.
Multi Family Housing Mortgage Revenue Bonds
(Tribeca Towers Project) Series 1994a/(FNMA
Collateral Investment Agreement)
4.05%, 01/07/97 4,800 4,800
New York City, New York Housing Development Corp.
Special Obligation Revenue Bonds (East 96th Street
Project) Series 1990A/(Bank of Tokyo-Mitsubishi
LOC)
4.00%, 01/07/97 9,200 9,200
New York State Dormitory Authority Revenue Bonds
(Masonic Hall Asylum)/(AMBAC Insurance & Credit
Local de France LOC)
3.80%, 01/07/97 1,700 1,700
New York State Energy Research & Development
Authority Electric Facilities Revenue Bonds (Long
Island Lighting Co. Project)/(Toronto-Dominion
Bank LOC)
4.00%, 01/07/97 500 500
New York State Energy Research & Development
Authority Electric Facilities Revenue Bonds (Long
Island Lighting Co. Project) Series 1993A/
(Toronto-Dominion Bank LOC)
4.05%, 01/07/97 100 100
New York State Energy Research & Development
Authority Electric Facilities Revenue Bonds (Long
Island Lighting Co. Project) Series 1994A/(Union
Bank of Switzerland LOC)
4.00%, 01/07/97 3,000 3,000
</TABLE>
42
<PAGE> 49
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
New York State Energy Research & Development
Authority Pollution Control Refunding Revenue
Bonds (Orange & Rockland Utilities, Inc. Project)
Series 1994A/(Societe Generale SBPA & FGIC
Insurance)
3.80%, 01/07/97 $ 2,100 $ 2,100
New York State Energy Research & Development
Authority Pollution Control Revenue Refunding
Bonds (Niagara Mohawk Power Project) Series 1985A/
(Toronto-Dominion Bank LOC)
4.70%, 01/01/97 100 100
New York State Job Development Authority Special
Purpose Bonds Series A-1 Thru A-25/(State of New
York Guaranty & Sumitomo Bank LOC)
5.00%, 01/01/97 700 700
New York State Local Government Assistance Corp.
Revenue Bonds Series 1993A/(Credit Suisse & Union
Bank of Switzerland LOC)
3.75%, 01/07/97 3,000 3,000
New York State Local Government Assistance Corp.
Revenue Bonds Series 1994B/(Credit Suisse LOC)
4.00%, 01/07/97 15,100 15,100
New York State Local Government Assistance Corp.
Revenue Bonds Series 1995F/(Toronto-Dominion Bank
LOC)
4.00%, 01/07/97 7,300 7,300
New York State Local Government Assistance Corp.
Revenue Bonds Series 1995G/(National Westminster
Bank PLC LOC)
3.85%, 01/07/97 4,300 4,300
Triborough Bridge & Tunnel Authority, New York
Special Obligation Bridge Revenue Bonds Series
1994/(FGIC SPA & FGIC Insurance)
4.00%, 01/07/97 6,400 6,400
Yonkers, New York Industrial Development Authority
Civic Facilities Revenue Bonds (Consumers Union
Facility Project)/(AMBAC Insurance & Credit Local
de France SBPA)
3.90%, 01/07/97 2,500 2,500
------
76,340
------
NORTH CAROLINA--1.76%
North Carolina Medical Care Community Hospital
Revenue Bonds (Moses H. Cone Memorial Hospital
Project)
4.15%, 01/07/97 23,000 23,000
North Carolina Medical Care Community Hospital
Revenue Bonds (Pooled Equipment Finance Project)/
(MBIA Insurance & Banque Paribas SBPA)
3.35%, 01/07/97 600 600
</TABLE>
43
<PAGE> 50
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Wake County, North Carolina Industrial Facility &
Pollution Control Financing Authority Revenue
Bonds (Carolina Power & Light) Series 1985B/
(Sumitomo Bank LOC)
4.20%, 01/07/97 $ 2,900 $ 2,900
Wake County, North Carolina Industrial Facility &
Pollution Control Financing Authority Revenue
Bonds (Carolina Power & Light) Series 1985C/
(Sumitomo Bank LOC)
4.20%, 01/07/97 55,050 55,050
Wake County, North Carolina Pollution Control
Revenue Bonds (Carolina Power & Light)/(Sumitomo
Bank LOC)
5.05%, 01/01/97 400 400
------
81,950
------
NORTH DAKOTA--0.43%
Mercer County, North Dakota National Rural Utility
Pollution Control Revenue Bonds (Basin Electric
Power Cooperative Antelope Project) Series 1984C/
(N.R.U.-C.F.C. Guaranty)
4.15%, 01/07/97 8,010 8,010
Richland County, North Dakota Industrial Development
Revenue Bonds (Minn-Dak Farmers Co-Op) Series
1986B/(Norwest Bank LOC)
4.40%, 01/07/97 1,000 1,000
Richland County, North Dakota Solid Waste Disposal
Revenue Bonds (Minn-Dak Farmers Co-Op) Series
1996A/(Norwest Bank LOC)
4.40%, 01/07/97 11,000 11,000
------
20,010
------
OHIO--0.56%
Columbus, Ohio Electric System Revenue Bonds Series
1984/(Union Bank of Switzerland LOC)
3.35%, 01/07/97 6,580 6,580
Columbus, Ohio General Obligation Bonds Series
1995-1/(Westdeutsche Landesbank SBPA)
4.00%, 01/07/97 14,800 14,800
Ohio Air Quality Development Authority Revenue Bonds
(JMG Funding, LP) Series 1994A/(Societe Generale
LOC)
4.15%, 01/07/97 2,900 2,900
</TABLE>
44
<PAGE> 51
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Ohio Housing Finance Agency Multi Family Housing
Revenue Bonds (Kenwood Congregate Retirement
Community) Series 1985/(Morgan Guaranty Trust LOC)
3.50%, 01/07/97 $ 2,000 $ 2,000
------
26,280
------
OKLAHOMA--0.66%
Muldrow, Oklahoma Public Works Authority Industrial
Development Revenue Bonds (Oklahoma Foods
Project)/(Rabobank Nederland N.V. LOC)
4.20%, 01/07/97 6,300 6,300
Oklahoma City, Oklahoma Industrial & Cultural
Facilities Revenue Bonds (Oklahoma Christian
College)/(Sumitomo Bank LOC)
4.38%, 01/02/97 9,000 9,000
Oklahoma Development Financing Authority Revenue
Bonds (Shawnee Funding Ltd)/(Bank of Nova Scotia
LOC)
4.25%, 01/07/97 4,000 4,000
Oklahoma State Student Loan Authority Student Loan
Revenue Bonds Series 1996A/(SLMA LOC)
4.15%, 01/01/97 10,000 10,000
Tulsa, Oklahoma Industrial Development Authority
Revenue Bonds (Hillcrest Medical Center) Series
1988/(Bank of Tokyo-Mitsubishi LOC)
4.15%, 01/07/97 670 670
Tulsa, Oklahoma Industrial Development Authority
Revenue Bonds (Thomas & Betts Project) Series
1991/(Wachovia Bank LOC)
4.25%, 01/07/97 700 700
------
30,670
------
OREGON--1.13%
Medford, Oregon Hospital Facility Authority Revenue
Bonds (Rogue Valley Manor Project) Series 1985/
(Banque Paribas LOC)
4.45%, 01/07/97 7,700 7,700
Oregon State Economic Development Commission
Economic & Industrial Development Revenue Bonds/
(Wachovia Bank LOC)
4.15%, 01/07/97 4,100 4,100
Oregon State General Obligation Notes Series 1973F/
(Bank of Tokyo-Mitsubishi LOC)
4.00%, 01/07/97 11,185 11,185
Oregon State General Obligation Notes Series 1973H/
(Bank of Tokyo-Mitsubishi LOC)
4.00%, 01/07/97 24,700 24,700
</TABLE>
45
<PAGE> 52
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Port of Portland, Oregon Industrial Development
Revenue Bonds (Schnitzer Steel Project)/(Comerica
Bank LOC)
3.15%, 01/07/97 $ 5,000 $ 5,000
-------
52,685
-------
PENNSYLVANIA--2.39%
Emmaus, Pennsylvania General Authority Revenue Bonds
(FSA Insurance & Credit Suisse SBPA)
5.00%, 01/07/97 40,000 40,000
Montgomery County, Pennsylvania Industrial
Development Authority Revenue Bonds (Seton Medical
Supply Co. Project)/(Banque Paribas LOC)
3.50%, 01/07/97 5,500 5,500
Pennsylvania Energy Development Authority Revenue
Bonds (B & W Ebensberg Project) Series 1986/(Swiss
Bank LOC)
4.10%, 01/07/97 2,050 2,050
Pennsylvania Higher Education Assistance Student
Loan Adjustable Rate Tender Revenue Bonds/(SLMA
LOC)
4.25%, 01/07/97 8,500 8,500
Quakertown, Pennsylvania Hospital Authority Revenue
Bonds (Hospital Pooled Financing Group) Series
1985/(PNC Bank LOC)
4.15%, 01/07/97 15,000 15,000
Quakertown, Pennsylvania General Authority Revenue
Pooled Bonds Financing Program Series 1996A/(PNC
Bank LOC)
3.15%, 01/07/97 17,200 17,200
Sayre, Pennsylvania Health Care Facilities Authority
Revenue Bonds (VHA Capital Finance Revenue) Series
1985B/(AMBAC Insurance & FNB Chicago SBPA)
4.00%, 01/07/97 6,700 6,700
Sayre, Pennsylvania Health Care Facilities Authority
Revenue Bonds (VHA Capital Finance Revenue) Series
1985F/(AMBAC Insurance & FNB Chicago SBPA)
4.00%, 01/07/97 4,100 4,100
Washington County, Pennsylvania Higher Education
Authority Revenue Bonds (Pooled Equipment Lease)/
(Sanwa Bank LOC)
4.15%, 01/07/97 12,100 12,100
-------
111,150
-------
</TABLE>
46
<PAGE> 53
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
RHODE ISLAND--0.04%
Rhode Island Student Loan Authority Higher Education
Revenue Bonds Series 1995-1/(National Westminster
Bank PLC LOC)
4.15%, 01/07/97 $ 2,000 $ 2,000
------
SOUTH CAROLINA--0.62%
Dorchester County, South Carolina Pollution Control
Revenue Bonds (BOC Group Inc.)/(Wachovia Bank LOC)
4.15%, 01/07/97 2,000 2,000
Greenville County, South Carolina Industrial
Development Revenue Bonds (Quality Thermoforming
Project)/(South Carolina National Bank LOC)
4.25%, 01/07/97 1,100 1,100
South Carolina Economic Development Authority
Hospital Facility Revenue Bonds (Sanders Brothers
Construction)/(Wachovia Bank LOC)
4.25%, 01/07/97 3,500 3,500
South Carolina Jobs Economic Development Authority
Economic Development Revenue Bonds (Electric City
Printing Project)/(Wachovia Bank of North Carolina
LOC)
4.25%, 01/07/97 3,200 3,200
South Carolina Jobs Economic Development Authority
Hospital Facilities Revenue Bonds (Baptist Health
Care System)/(Credit Local de France LOC)
4.00%, 01/07/97 10,600 10,600
South Carolina Jobs Economic Development Authority
Industrial Development Revenue Bonds (Ado Corp.
Project)/(South Carolina National Bank LOC)
4.25%, 01/07/97 400 400
South Carolina State Port Authority Revenue Bonds
(Junior Lien)/(South Carolina National Bank Line
of Credit)
4.20%, 01/07/97 3,300 3,300
Spartanburg County, South Carolina Industrial
Development Authority Revenue Bonds (Bemis, Inc.)/
(Wachovia Bank LOC)
4.15%, 01/07/97 4,750 4,750
------
28,850
------
</TABLE>
47
<PAGE> 54
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
SOUTH DAKOTA--0.34%
South Dakota State Health & Education Facilities
Authority Revenue Bonds (McKenna Hospital) Series
1994/(Banque Paribas SBPA & MBIA Insurance)
4.20%, 01/07/97
$16,000 $16,000
------
TENNESSEE--2.36%
Chattanooga, Tennessee Health Education & Housing
Facility Board Revenue Bonds (Baylor School
Project)/(Sun Bank LOC)
4.15%, 01/07/97 1,700 1,700
Metropolitan Nashville & Davidson County, Tennessee
Health & Education Facility Board Revenue Bonds
Series A/(FGIC Insurance & Barclays Bank PLC Line
of Credit)
4.15%, 01/07/97 1,200 1,200
Metropolitan Nashville & Davidson County, Tennessee
Industrial Development Multi Family Housing
Revenue Bonds (Arbor Crest Apartments) Series
1985B/(Wachovia Bank LOC)
4.15%, 01/07/97 4,000 4,000
Metropolitan Nashville & Davidson County, Tennessee
Industrial Development Multi Family Housing
Revenue Bonds (Arbor Knoll Apartments) Series
1985A/(Wachovia Bank LOC)
4.15%, 01/07/97 1,000 1,000
Metropolitan Nashville & Davidson County, Tennessee
Industrial Development Multi Family Housing
Revenue Bonds (Western Hills Apartments)/
(Sumitomo Bank LOC)
4.50%, 01/07/97 7,035 7,035
Montgomery County, Tennessee Public Building
Authority Pooled Financing Revenue County Loans/
(NationsBank LOC)
4.30%, 01/07/97 25,000 25,000
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1995C-1/(AMBAC Insurance & Kredietbank SBPA)
4.15%, 01/07/97 4,000 4,000
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1995C-2/(AMBAC Insurance & Kredietbank SBPA)
4.15%, 01/07/97 4,600 4,600
</TABLE>
48
<PAGE> 55
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1995E-3/(AMBAC Insurance & Kredietbank SBPA)
4.15%, 01/07/97 $ 3,000 $ 3,000
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1996A-2/(AMBAC Insurance & Kredeitbank SBPA)
4.15%, 01/07/97 7,000 7,000
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1996C-3/(AMBAC Insurance & Kredietbank SBPA)(d)
4.15%, 01/07/97 10,000 10,000
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1996D-1/(AMBAC Insurance & Kredietbank SBPA)
4.15%, 01/07/97 3,430 3,430
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1996E-1/(AMBAC Insurance & Kredietbank SBPA)
4.15%, 01/07/97 7,150 7,150
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1996E-4/(AMBAC Insurance & Kredietbank SBPA)
4.15%, 01/07/97 3,000 3,000
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1996E-5/(AMBAC Insurance & Kredietbank SBPA)
4.15%, 01/07/97 1,750 1,750
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1996F-1/(AMBAC Insurance & Kredietbank SBPA)(d)
4.15%, 01/07/97 9,000 9,000
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1996F-2/(AMBAC Insurance & Kredietbank SBPA)(d)
4.15%, 01/07/97 9,000 9,000
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
1996G/(AMBAC Insurance & Kredietbank SBPA)
4.15%, 01/07/97 7,000 7,000
Sevier County, Tennessee Public Building Authority
Local Government Public Improvement Bonds Series
II-C/(AMBAC Insurance & Kredietbank SBPA)
3.00%, 01/07/97 1,100 1,100
-------
109,965
-------
</TABLE>
49
<PAGE> 56
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
TEXAS -- 4.97%
Amarillo, Texas Health Facilities Corp. Hospital
Revenue Bonds (High Plains Baptist Hospital)
Series 1985/(Banque Paribas LOC)
4.35%, 01/07/97 $ 9,300 $ 9,300
Bexar County, Texas Health Facilities Development
Corp. Revenue Bonds (Chandler Memorial Home
Project) Series 1995/(Banc One LOC)
4.20%, 01/07/97 5,170 5,170
Capital, Texas Industrial Development Corp. Revenue
Bonds (National Service Industries Project)/
(Wachovia Bank LOC)
4.15%, 01/07/97 4,950 4,950
Central Waco, Texas Development Corp. Industrial
Development Revenue Bonds (H.E. Butt Grocery)-
(Texas Commerce Bank LOC)
4.15%, 01/07/97 3,330 3,330
Collin County, Texas Housing Finance Corp. Multi
Family Housing Revenue Bonds (Huntington
Apts.)/(Fleet Bank, N.A. LOC)
4.26%, 01/07/97 6,150 6,150
Euless, Texas Industrial Development Authority
Revenue Bonds (Ferguson Enterprises, Inc.)/
(Wachovia Bank LOC)
4.25%, 01/07/97 4,850 4,850
Hays, Texas Memorial Health Facilities Development
Corp. Hospital Revenue Bonds (Central Texas
Medical Center Project) Series 1990A/(Swiss Bank
LOC)
4.20%, 01/07/97 8,800 8,800
Hays, Texas Memorial Health Facilities Development
Corp. Hospital Revenue Bonds (Central Texas
Medical Center Project) Series 1990B/(Swiss Bank
LOC)
4.20%, 01/07/97 15,800 15,800
Lavaca-Navidad River Authority, Texas Water Supply
System Contract Revenue Bonds (Formosa Plastics
Corp. Project)/(Canadian Imperial Bank of Commerce
LOC)
4.30%, 01/07/97 13,900 13,900
Lower Neches Valley Authority, Texas Industrial
Development Corp. Pollution Control Revenue Bonds
(Mobil Corp. Neches River Treatment Project)
Series 1994
4.15%, 01/07/97 12,000 12,000
Midlothian, Texas Industrial Development Corp.
Pollution Control Revenue Bonds (Box-Crow Co.
Project)/(Union Bank of Switzerland LOC)
4.50%, 01/07/97 1,400 1,400
</TABLE>
50
<PAGE> 57
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
North Texas Higher Education Authority Inc. Texas
Student Loan Revenue Bonds Series 1987/(Credit
Communal de Belgique LOC)
4.10%, 01/07/97 $20,000 $20,000
North Texas Higher Education Authority Inc. Texas
Student Loan Revenue Refunding Bonds Series 1996B/
(AMBAC Insurance & SLMA SBPA)
4.25%, 01/07/97 4,000 4,000
North Texas Higher Education Authority Inc. Texas
Student Loan Revenue Refunding Bonds Series 1996D/
(AMBAC Insurance & SLMA SBPA)
4.25%, 01/07/97 4,000 4,000
Panhandle Plains, Texas Higher Education Loan
Authority Student Loan Revenue Bonds Series 1992A/
(SLMA LOC)
4.10%, 01/07/97 9,800 9,800
Panhandle Plains, Texas Higher Education Loan
Authority Student Loan Revenue Bonds Series 1993A/
(SLMA LOC)
4.10%, 01/07/97 4,500 4,500
Panhandle Plains, Texas Higher Education Loan
Authority Student Loan Revenue Bonds Series 1995A/
(SLMA LOC)
4.10%, 01/07/97 5,000 5,000
Port Authority of Corpus Christi, Texas Neuces
County Marine Terminal Revenue Bonds (Reynolds
Metals Co.)/(Barclays Bank PLC LOC)
4.60%, 01/07/97 3,100 3,100
Robertson County, Texas Industrial Development Corp.
Industrial Development Revenue Bonds (Sanderson
Farms Project) Series 1995/(Harris Trust & Savings
Bank LOC)
4.30%, 01/07/97 4,300 4,300
Silsbee, Texas Health Facilities Development Revenue
Bonds (Silsbee Doctor's Hospital)/(Citibank LOC)
4.25%, 01/07/97 2,500 2,500
Texas Health Facilities Development Corp. Adjustable
Convertible Extendable Securities Revenue Bonds
(North Texas Pooled Health) Series 1985B/(Banque
Paribas LOC)
4.35%, 01/07/97 19,900 19,900
Texas Small Business Industrial Development Corp.
Industrial Development Revenue Bonds (Texas Public
Facility Capital Access)/(Credit Suisse & National
Westminster Bank PLC LOC)
4.15%, 01/07/97 41,795 41,795
</TABLE>
51
<PAGE> 58
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Texas State Revenue Refunding Bonds (Veterans
Housing Assistance Fund) Series 1995
4.00%, 01/07/97 $23,600 $ 23,600
Trinity River Authority, Texas Pollution Control
Revenue Bonds (Lafarge Corp. Project)/(Banque
Nationale de Paris LOC)
4.20%, 01/07/97 3,100 3,100
-------
231,245
-------
VERMONT--0.09%
Vermont Education & Health Buildings Financing
Agency Revenue Bonds (VHA New England) Series
1985G/(AMBAC Insurance & FNB Chicago SBPA)
4.00%, 01/07/97 4,240 4,240
-------
VIRGINIA--0.28%
King George County, Virginia Industrial Development
Authority Solid Waste Disposal Facility (Garnet of
Virginia Project) Series 1996/(Morgan Guaranty
Trust LOC)
4.20%, 01/07/97 3,700 3,700
Lynchburg, Virginia Industrial Development Authority
Hospital Facility Revenue Bonds (First Mortgage
VHA/Mid-Atlantic States, Inc.) Series
1985A/(AMBAC Insurance & Mellon Bank SBPA)
4.00%, 01/07/97 500 500
Lynchburg, Virginia Industrial Development Authority
Hospital Facility Revenue Bonds (First Mortgage
VHA/Mid-Atlantic States, Inc.) Series
1985B/(AMBAC Insurance & Mellon Bank SBPA)
4.00%, 01/07/97 400 400
Lynchburg, Virginia Industrial Development Authority
Hospital Facility Revenue Bonds (First Mortgage
VHA/Mid-Atlantic States, Inc.) Series
1985C/(AMBAC Insurance & Mellon Bank SBPA)
4.00%, 01/07/97 600 600
Lynchburg, Virginia Industrial Development Authority
Hospital Facility Revenue Bonds (First Mortgage
VHA/Mid-Atlantic States, Inc.) Series
1985F/(AMBAC Insurance & Mellon Bank SBPA)
4.00%, 01/07/97 5,600 5,600
Virginia Small Business Finance Authority Industrial
Development Revenue Bonds (Dong Sung America)/
(First Union National Bank of North Carolina LOC)
4.10%, 01/07/97 2,380 2,380
-------
13,180
-------
</TABLE>
52
<PAGE> 59
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
WASHINGTON--1.08%
Pierce County, Washington Economic Development Bonds
(McFarland Cascade Project)/(U.S. Bank of
Washington LOC)
4.60%, 01/07/97 $ 2,000 $ 2,000
Port of Kalama,Washington Public Corp. Port Facility
Revenue (Con Agra, Inc. Project)/(Morgan Guaranty
Trust LOC)
4.00%, 01/07/97 6,100 6,100
Snohomish County, Washington Public Utilities
District #1 Electric Revenue Bonds (Generation
Systems)/(MBIA Insurance & IBJ SBPA)
4.00%, 01/07/97 20,000 20,000
Spokane County, Washington Industrial Development
Corp. Revenue Bonds (Metal Sales Manufacturing
Corp.)/(Star Bank LOC)
4.30%, 01/07/97 3,150 3,150
Washington State Health Care Facilities Authority
Revenue Refunding Bonds (Sisters of St. Joseph of
Peace) Series 1993/(MBIA Insurance & U.S. Bank of
Washington SBPA)
4.15%, 01/07/97 12,600 12,600
Washington State Housing Finance Commission Multi
Family Mortgage Revenue Bonds (Canyon Lake II
Project) Series 1993A/(U.S. Bank of Washington
LOC)
4.20%, 01/07/97 4,565 4,565
Washington State Housing Finance Commission Multi
Family Mortgage Revenue Bonds (Canyon Lake II
Project) Series 1994/(U.S. Bank of Washington LOC)
5.00%, 01/01/97 735 735
Washington State Housing Finance Commission
Non-Profit Housing Revenue Bonds (Snohomish YMCA)/
(U.S. Bank of Washington LOC)
4.75%, 01/01/97 1,000 1,000
------
50,150
------
WEST VIRGINIA--0.05%
West Virginia State Hospital Finance Authority
Hospital Revenue Bonds (St. Joseph's Hospital
Project) Series 1987/(Bank of Tokyo-Mitsubishi
LOC)
4.15%, 01/07/97 2,100 2,100
------
WISCONSIN--0.66%
Chilton, Wisconsin Industrial Development Revenue
Bonds (Kaytee Products Inc. Project) Series
1995/(Bank One Milwaukee LOC)
4.30%, 01/07/97 1,675 1,675
</TABLE>
53
<PAGE> 60
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Fairwater, Wisconsin Industrial Development Revenue
Bonds (Dean Foods Co. Project) Series 1990/
(Wachovia Bank LOC)
4.15%, 01/07/97 $ 1,450 $ 1,450
Lac Du Flambeau Band of Lake Superior, Wisconsin
Special Obligation Revenue Bonds (Simpson Electric
Co. Project) Series 1985/(Barclays Bank PLC LOC)
4.15%, 01/07/97 6,100 6,100
Milwaukee, Wisconsin Redevelopment Authority
Industrial Development Revenue Bonds (Field
Container Corp. LP) Series 1994/(Northern Trust
LOC)
4.40%, 01/07/97 5,000 5,000
Prentice, Wisconsin Industrial Development Refunding
Revenue Bonds (Blount, Inc.) Series 1992/(Morgan
Guaranty Trust LOC)
4.15%, 01/07/97 2,025 2,025
Sheboygan, Wisconsin Pollution Control Financing
Authority Revenue Bonds (Wisconsin Power & Light
Co.)
4.60%, 01/07/97 1,000 1,000
Wisconsin State Health & Education Facilities
Authority Revenue Bonds (Sinai Samaritan) Series
1994A/(Marshall & Ilsley Bank LOC)
4.20%, 01/07/97 13,415 13,415
---------
30,665
---------
WYOMING--0.01%
Lincoln County, Wyoming Pollution Control Financing
Authority Revenue Bonds (Exxon Corp. Project)
Series 1987B
5.10%, 01/01/97 500 500
---------
TOTAL VARIABLE RATE OBLIGATIONS 2,792,886
(Cost $2,792,885) ---------
TAX-EXEMPT COMMERCIAL PAPER--14.74%(b)
ARIZONA--1.60%
Maricopa County, Arizona Pollution Control Financing
Authority Pollution Control Revenue Bonds
(Southern California Edison Palos Verdes Project)
Series 1985B
3.70%, 01/16/97 5,600 5,600
Maricopa County, Arizona Pollution Control Financing
Authority Pollution Control Revenue Bonds
(Southern California Edison Palos Verdes Project)
Series 1985C
3.70%, 01/16/97 4,500 4,500
3.60%, 02/18/97 4,000 4,000
3.50%, 04/07/97 11,750 11,750
</TABLE>
54
<PAGE> 61
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Maricopa County, Arizona Pollution Control Financing
Authority Pollution Control Revenue Bonds
(Southern California Edison Palos Verdes Project)
Series 1985D
3.45%, 02/20/97 $ 7,550 $ 7,550
Maricopa County, Arizona Pollution Control Financing
Authority Pollution Control Revenue Bonds
(Southern California Edison Palos Verdes Project)
Series 1985E
3.45%, 02/20/97 12,030 12,030
Maricopa County, Arizona Pollution Control Financing
Authority Pollution Control Revenue Bonds
(Southern California Edison Palos Verdes Project)
Series 1985G
3.70%, 01/16/97 4,000 4,000
3.50%, 04/07/97 6,100 6,100
Salt River Project, Arizona Agricultural Improvement
Program Commercial Paper/(Multiple Credit
Enhancements)
3.45%, 02/20/97 7,000 7,000
3.45%, 03/06/97 12,050 12,050
------
74,580
------
CALIFORNIA--0.28%
Orange County, California Local Transportation
Authority Sales Tax Revenue Commercial Paper/(IBJ
LOC)
3.60%, 01/10/97 13,200 13,200
------
COLORADO--1.00%
Denver, Colorado City & County Airport System
Revenue Bonds Series 1990/(Sanwa Bank LOC)
3.80%, 01/08/97 3,000 3,000
3.80%, 01/08/97 7,520 7,520
Platte River Power Authority, Colorado Adjustable
Tender Electric Revenue Subordinate Lien
Commercial Paper Bonds Series S-1/(Morgan Guaranty
Trust SBPA)
3.70%, 02/10/97 17,400 17,400
3.55%, 03/06/97 3,000 3,000
3.50%, 04/07/97 15,500 15,500
------
46,420
------
GEORGIA--1.28%
Burke County, Georgia Development Authority
Pollution Control Revenue Bonds (Oglethorpe Power
Project) Series A/(Credit Suisse LOC)
3.65%, 01/14/97 21,000 21,000
3.70%, 01/16/97 14,400 14,400
3.50%, 03/05/97 12,100 12,100
3.55%, 03/06/97 11,850 11,850
------
59,350
------
</TABLE>
55
<PAGE> 62
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
KANSAS--0.15%
Burlington, Kansas Pollution Control Revenue Bonds
(Kansas Power & Light Co. Project) Series 1987A/
(Toronto-Dominion Bank LOC)
3.50%, 04/07/97 $ 1,800 $ 1,800
Burlington, Kansas Pollution Control Revenue Bonds
(Kansas Power & Light Co. Project) Series 1987B/
(Deutsche Bank LOC)
3.70%, 01/16/97 1,200 1,200
3.70%, 02/10/97 2,200 2,200
3.55%, 03/06/97 2,000 2,000
-------
7,200
-------
KENTUCKY--0.05%
Pendleton County, Kentucky Multi County Lease
Revenue Bonds (Kentucky Association of Counties
Lease Program) Series 1989/(Commonwealth Bank of
Australia LOC)
3.50%, 03/05/97 2,300 2,300
-------
LOUISIANA--2.02%
Louisiana State Adjustable Tender General Obligation
Refunding Bonds Series 1991A/(Credit Local de
France LOC)
3.70%, 01/16/97 4,690 4,690
3.70%, 02/10/97 13,950 13,950
3.50%, 04/07/97 4,275 4,275
Louisiana State Pollution Control Revenue Refunding
Bonds (St. James Parish/Texaco Project) Series
1988B
3.50%, 01/09/97 70,930 70,930
-------
93,845
-------
MICHIGAN--2.36%
Michigan State Building Authority Commercial Paper
Note Series 1/(Canadian Imperial Bank of Commerce
LOC)
3.50%, 05/01/97 110,000 110,000
-------
MINNESOTA--0.61%
Rochester, Minnesota Health Care Facility Revenue
Bonds (Mayo Foundation/Mayo Medical Center) Series
1988E/(Credit Suisse SBPA)
3.70%, 01/16/97 7,300 7,300
Rochester, Minnesota Health Care Facility Revenue
Bonds (Mayo Foundation/Mayo Medical Center) Series
1988F/(Credit Suisse SBPA)
3.70%, 01/16/97 2,100 2,100
3.60%, 01/16/97 800 800
3.50%, 04/07/97 3,700 3,700
</TABLE>
56
<PAGE> 63
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Rochester, Minnesota Health Care Facility Revenue
Bonds (Mayo Foundation/Mayo Medical Center) Series
1992A
3.50%, 04/07/97 $ 1,000 $ 1,000
Rochester, Minnesota Health Care Facility Revenue
Bonds (Mayo Foundation/Mayo Medical Center) Series
1992B
3.70%, 01/16/97 2,100 2,100
Rochester, Minnesota Health Care Facility Revenue
Bonds (Mayo Foundation/Mayo Medical Center) Series
1992C
3.70%, 01/16/97 4,300 4,300
3.55%, 03/06/97 7,200 7,200
------
28,500
------
NEW YORK--0.06%
New York State Power Authority Tax-Exempt Commercial
Paper Program
3.40%, 02/26/97 3,000 3,000
------
NORTH CAROLINA--1.84%
North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds/(Canadian Imperial Bank of
Commerce LOC)
3.50%, 02/10/97 40,000 40,000
North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds Series B/(Morgan Guaranty
Trust & Union Bank of Switzerland LOC)
3.55%, 02/18/97 45,435 45,435
------
85,435
------
OHIO--0.18%
Ohio State Water Development Authority Pollution
Control Facilities Revenue Bonds (Cleveland
Illuminating Project)/(FGIC Insurance)
3.50%, 03/05/97 8,400 8,400
------
TEXAS--3.06%
Austin, Travis, & Williams Counties, Texas Utility
Systems Tax-Exempt Commercial Paper Notes Series
1993A/(Morgan Guaranty Trust LOC)
3.60%, 01/15/97 15,000 15,000
Houston, Texas Water & Sewer Commercial Paper Notes
Series A/Swiss Bank & West Deutsche Landesbank
Revolving Credit Agreement)
3.55%, 02/13/97 20,000 20,000
3.50%, 03/06/97 30,000 30,000
</TABLE>
57
<PAGE> 64
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Lower Colorado River Authority Tax-Exempt Commercial
Paper Series D/(Morgan Guaranty Trust Revolving
Credit Agreement)
3.45%, 02/27/97 $10,000 $ 10,000
3.45%, 03/12/97 11,600 11,600
Texas Municipal Power Agency Commercial Paper
Notes/(Multiple Credit Enhancements)
3.50%, 01/31/97 49,025 49,025
3.45%, 02/20/97 6,075 6,075
-------
141,700
-------
VIRGINIA--0.21%
Chesterfield County, Virginia Pollution Control
Revenue Bonds Series 1987B (Virginia Electric
Power Co.)
3.45%, 02/20/97 5,000 5,000
Louisa, Virginia Industrial Development Authority
Pollution Control Revenue Bonds
3.45%, 02/20/97 5,000 5,000
-------
10,000
-------
WYOMING--0.04%
Gillette County, Wyoming Pollution Control Revenue
Bonds (PacifiCorp Project)/(Deutsche Bank LOC)
3.55%, 02/07/97 1,800 1,800
-------
TOTAL TAX-EXEMPT COMMERCIAL PAPER 685,730
(Cost $685,730) -------
TAX AND REVENUE ANTICIPATION NOTES--6.87%(b)
CALIFORNIA--3.57%
California School Cash Reserve Program Authority
Pooled Tax & Revenue Anticipation Notes Series
1996-97/(Multiple Credit Enhancements)
3.85%, 07/02/97 77,455 77,790
Cupertino, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.80%, 07/01/97 6,500 6,518
Fresno, California Tax & Revenue Anticipation Notes
Series 1996-97
3.94%, 08/14/97 17,000 17,056
Los Angeles County, California Unified School
District Tax & Revenue Anticipation Notes Series
1996-97
3.84%, 06/30/97 1,500 1,505
</TABLE>
58
<PAGE> 65
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Los Angeles, California Tax & Revenue Anticipation
Notes Series 1996-97
3.92%, 06/19/97 $ 4,000 $ 4,010
3.90%, 06/19/97 10,000 10,027
3.90%, 06/19/97 10,000 10,027
3.87%, 06/19/97 7,000 7,020
3.83%, 06/19/97 10,000 10,030
Martinez, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.80%, 07/01/97 3,300 3,309
Mountain View/Los Altos, California Unified High
School District Tax & Revenue Anticipation Notes
Series 1996-97
3.80%, 07/02/97 2,500 2,508
Mountain View, California School District Tax &
Revenue Anticipation Notes Series 1996-97
3.80%, 07/02/97 2,000 2,007
San Francisco, California City & County Unified
School District Tax & Revenue Anticipation Notes
Series 1996-97
3.98%, 07/24/97 5,000 5,014
San Lorenzo, California Unified School District Tax
& Revenue Anticipation Notes Series 1996-97
3.80%, 07/01/97 4,800 4,813
Sunnyvale, California Elementary School District Tax
& Revenue Anticipation Notes Series 1996-97
3.80%, 07/01/97 4,500 4,515
-------
166,149
-------
KANSAS--0.33%
Topeka, Kansas Temporary Notes Series 1996-1997B
3.87%, 07/02/97 13,810 13,851
Wichita, Kansas Temporary Notes Series 1996B
3.85%, 11/20/97 1,325 1,330
-------
15,181
-------
PENNSYLVANIA--0.10%
Berks County, Pennsylvania Tax & Revenue
Anticipation Notes Series 1997A/(Mellon Bank LOC)
3.65%, 12/31/97 4,600 4,632
-------
PUERTO RICO--1.08%
Puerto Rico Commonwealth Tax & Revenue Anticipation
Notes Series 1996A
3.43%, 07/30/97 50,000 50,161
-------
</TABLE>
59
<PAGE> 66
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
TEXAS--1.79%
Texas State Tax & Revenue Anticipation Notes Series
1996-97
3.92%, 08/29/97 $17,180 $ 17,270
3.91%, 08/29/97 60,000 60,318
3.80%, 08/29/97 5,800 5,834
-------
83,422
-------
TOTAL TAX AND REVENUE ANTICIPATION NOTES
(Cost $319,545) 319,545
-------
MANDATORY PUT BONDS--5.91%(b)
CALIFORNIA--0.40%
California Higher Education Loan Authority Student
Loan Revenue Bonds Series 1987A/(National
Westminster Bank PLC LOC)
3.95%, 07/01/97 2,500 2,500
California Higher Education Loan Authority Student
Loan Revenue Bonds Series 1987B/(SLMA LOC)
3.95%, 07/01/97 5,000 5,000
California Higher Education Loan Authority Student
Loan Revenue Bonds Series 1995E-5/(SLMA LOC)
3.75%, 06/01/97 11,000 11,000
-------
18,500
-------
FLORIDA--0.08%
Orange County, Florida Industrial Development
Authority Revenue Bonds (General Accident
Insurance Co. of America Project)
3.64%, 06/01/97 3,500 3,500
-------
ILLINOIS--1.10%
Chicago, Illinois General Obligation Tender Notes
Series 1996/(Landesbank Hessen-Thuringen
Girozentrale LOC)
3.10%, 02/04/97 51,000 51,000
-------
KENTUCKY--0.05%
Calvert City, Kentucky Industrial Development
Revenue Refunding Bonds (SKW Alloys Lease Rent)
Series 87/(Bayerische Vereinsbank LOC)
3.90%, 04/01/97 2,235 2,235
-------
</TABLE>
60
<PAGE> 67
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
SOUTH DAKOTA--0.49%
South Dakota Housing Development Authority Home
Ownership Mortgage Series 1996E
3.75%, 11/13/97 $23,000 $ 23,000
-------
TENNESSEE--0.10%
Metropolitan Nashville & Davidson County, Tennessee
Industrial Development Board Revenue Bonds
(General Accident Insurance) Series 1986
3.75%, 05/01/97 4,700 4,700
-------
TEXAS--3.27%
Greater East Texas Higher Education Authority
Student Loan Revenue Bonds Series 1992A/(SLMA LOC)
4.05%, 09/01/97 17,000 17,000
Greater East Texas Higher Education Authority
Student Loan Revenue Bonds Series 1992B-1/(SLMA
LOC)
4.05%, 07/01/97 14,000 14,000
Greater East Texas Higher Education Authority
Student Loan Revenue Bonds Series 1992B-2/(SLMA
LOC)
4.15%, 09/01/97 6,000 6,000
Greater East Texas Higher Education Authority
Student Loan Revenue Bonds Series 1993A/(SLMA LOC)
3.85%, 05/01/97 48,150 48,150
Greater East Texas Higher Education Authority
Student Loan Revenue Bonds Series 1993B-2/(SLMA
LOC)
3.85%, 06/01/97 6,500 6,500
Greater East Texas Higher Education Authority
Student Loan Revenue Bonds Series 1993B-3/(SLMA
LOC)
3.70%, 04/01/07 11,000 11,000
Greater East Texas Higher Education Authority
Student Loan Revenue Bonds Series 1993B-6/(SLMA
LOC)
3.85%, 05/01/97 40,000 40,000
Greater East Texas Higher Education Authority
Student Loan Revenue Bonds Series 1995B/(SLMA LOC)
4.05%, 07/01/97 10,000 10,000
-------
152,650
-------
UTAH--0.22%
Utah County, Utah Environmental Improvement Revenue
Bonds (USX Corp. Project)/(Wachovia Bank LOC)
3.65%, 03/03/97 10,100 10,100
-------
</TABLE>
61
<PAGE> 68
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
WASHINGTON--0.20%
Washington State Housing Finance Commission Multi
Family Mortgage Revenue Bonds Series 1A-S/(FGIC
Insurance)
3.80%, 06/02/97 $9,270 $ 9,270
-------
TOTAL MANDATORY PUT BONDS 274,955
(Cost $274,955) -------
VARIABLE RATE TENDER OPTION BOND
PARTNERSHIPS--2.86%(a)(c)
CONNECTICUT--0.16%
Connecticut State General Obligation General Purpose
Public Improvement Tender Option Bond Partnership
Series 1991A (BTP-151)/(Bankers Trust Tender
Option)
4.20%, 01/07/97 7,365 7,365
-------
GEORGIA--0.33%
Georgia State Public Improvement General Obligation
Tender Option Bond Partnership Series 1993B &
1993C (BTP-135)/(Bankers Trust Tender Option)
4.20%, 01/07/97 3,865 3,865
Georgia State Public Improvement General Obligation
Tender Option Bond Partnership Series 1993B &
1993C (BTP-140)/(Bankers Trust Tender Option)
4.20%, 01/07/97 4,575 4,575
Georgia State Public Improvement General Obligation
Tender Option Bond Partnership Series 1994B
(BTP-148)/(Bankers Trust Tender Option)
4.20%, 01/07/97 7,100 7,100
-------
15,540
-------
ILLINOIS--0.33%
Chicago, Illinois Metropolitan Water Reclamation
District Greater Chicago General Obligation Tender
Option Bond Partnership (Cook County) (BTP-71)/
(Automated Data Processing, Inc. Tender Option)
4.30%, 01/07/97 9,870 9,870
Chicago, Illinois School Finance Authority General
Obligation School Finance Tender Option Bond
Partnership (BTP-70)/(MBIA Insurance & Automated
Data Processing, Inc. Tender Option)
4.35%, 01/07/97 5,365 5,365
-------
15,235
-------
</TABLE>
62
<PAGE> 69
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
MARYLAND--0.08%
Baltimore County, Maryland General Obligation
Consolidated Public Improvement Tender Option Bond
Partnership Series 1991 (BTP-132)/(Bankers Trust
Tender Option & Escrowed to Maturity with
Government Securities)
4.35%, 01/07/97 $ 3,621 $ 3,621
------
MINNESOTA--0.10%
Minnesota State Various Purpose General Obligation
Sports Health Club Tax Tender Option Bond
Partnership (BTP-65)/(Automated Data Processing,
Inc. Tender Option & Escrowed to Maturity with
Government Securities)
4.30%, 01/07/97 4,455 4,455
------
SOUTH CAROLINA--0.12%
South Carolina State Capital Improvement Revenue
Refunding Tender Option Bond Partnership
(BTP-147)/(Bankers Trust Tender Option)
4.15%, 01/07/97 5,370 5,370
------
TEXAS--0.76%
Regents of the University of Texas Permanent
University Fund Tender Option Bond Partnership
Series 1992A (BTP-143)/(Escrowed to Maturity with
Government Securities, Permanent University Fund
Guaranty & Bankers Trust Tender Option)
4.20%, 01/07/97 10,685 10,685
Texas State General Obligation General Purpose
Public Improvement Tender Option Bond Partnership
Series 1993B (BTP-116)/(Bankers Trust Tender
Option)
4.20%, 01/07/97 10,170 10,170
Texas State Public Finance Authority General
Obligation Tender Option Bond Partnership Series
1994 (BTP-127)/(Bankers Trust Tender Option)
4.20%, 01/07/97 14,980 14,980
------
35,835
------
VIRGINIA--0.28%
Chesterfield County, Virginia General Obligation
Public Improvement & Refunding Tender Option Bond
Partnership Series 1991 (BTP-136)/(Bankers Trust
Tender Option)
4.20%, 01/07/97 6,025 6,025
</TABLE>
63
<PAGE> 70
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Fairfax County, Virginia Public Improvement General
Obligation Tender Option Bond Partnership Series
1991A (BTP-131)/(Bankers Trust Tender Option &
Escrowed to Maturity with Government Securities)
4.20%, 01/07/97 $7,146 $ 7,146
-------
13,171
-------
WASHINGTON--0.40%
King County, Washington Unlimited Tax General
Obligation Tender Option Bond Partnership Series
1993C (BTP-56)/(Automated Data Processing, Inc.
Tender Option)
4.32%, 01/07/97 6,365 6,365
Washington State General Obligation Tender Option
Bond Partnership Series 1990B (BTP-152)/(Bankers
Trust Tender Option)
4.20%, 01/07/97 5,655 5,655
Washington State Public Power Supply System Nuclear
Project Number 2 Revenue Refunding Tender Option
Bond Partnership Series 1993B (BTP-137)/(Bankers
Trust Tender Option)
4.25%, 01/07/97 6,685 6,684
-------
18,704
-------
WISCONSIN--0.30%
Wisconsin State Public Improvement General
Obligation Tender Option Bond Partnership
(BTP-62)/(Automated Data Processing, Inc. Tender
Option & Escrowed to Maturity with Government
Securities)
4.30%, 01/07/97 4,500 4,500
Wisconsin State Public Improvement General
Obligation Tender Option Bond Partnership Series
1992A (BTP-142)/(Bankers Trust Tender Option &
Escrowed to Maturity with Government Securities)
4.20%, 01/07/97 9,480 9,480
-------
13,980
-------
TOTAL VARIABLE RATE TENDER OPTION BOND PARTNERSHIPS
(Cost $133,276) 133,276
-------
REVENUE ANTICIPATION NOTES--1.82%(b)
FLORIDA--0.17%
Orange County, Florida School District Revenue
Anticipation Notes Series 1996A
3.60%, 04/15/97 8,000 8,014
-------
</TABLE>
64
<PAGE> 71
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
NEW YORK--1.65%
New York City, New York Revenue Anticipation Notes
Series 1996B/(Multiple Credit Enhancements)
3.80%, 06/30/97 $25,000 $25,084
3.77%, 06/30/97 50,000 50,176
Rockland County, New York Revenue Anticipation Notes
Series 1996
3.73%, 05/16/97 1,300 1,302
------
76,562
------
TOTAL REVENUE ANTICIPATION NOTES 84,576
(Cost $84,576) ------
VARIABLE RATE TENDER OPTION BONDS--1.80%(a)
GEORGIA--0.34%
Georgia State Public Improvement General Obligation
Tender Option Bonds Series 1995B
(Citi-157)/(Citibank Tender Option)
4.15%, 01/07/97 16,000 16,000
------
NEVADA--0.54%
Nevada State General Obligation Tender Option Bonds
(Colorado River Community Project) Series 1994
(Citi-143)/(Citibank Tender Option)
4.33%, 01/07/97 25,000 25,000
------
TEXAS--0.26%
Harris County, Texas Toll Road Sub-Lien Highway
Tender Option Bonds (Citi-138)/(Citibank Tender
Option)
4.31%, 01/07/97 7,000 7,000
Harris County, Texas Toll Road Sub-Lien Highway
Tender Option Bonds (Citi-139)/(Citibank Tender
Option)
4.31%, 01/07/97 5,000 5,000
------
12,000
------
WASHINGTON--0.66%
King County, Washington Department of Metropolitan
Services Limited Tax General Obligation Tender
Option Bonds Series 1994A (Citi-136)/(Citibank
Tender Option)
4.20%, 01/07/97 15,570 15,570
King County, Washington Department of Metropolitan
Services Limited Tax General Obligation Tender
Option Bonds Series 1994A (Citi-137)/(Citibank
Tender Option)
4.20%, 01/07/97 10,000 10,000
</TABLE>
65
<PAGE> 72
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Washington State Public Power Supply System Nuclear
Project Number 2 Revenue Tender Option Bonds
Series 1990C (Citi-145)/(Citibank Tender Option,
FGIC Insurance & Escrowed to Maturity with
Government Securities)
4.20%, 01/07/97 $ 5,000 $ 5,000
------
30,570
------
TOTAL VARIABLE RATE TENDER OPTION BONDS
(Cost $83,570) 83,570
------
BOND ANTICIPATION NOTES--1.64%(b)
NEW JERSEY--1.64%
Atlantic City, New Jersey Bond Anticipation Notes
Series 1996-97
3.70%, 11/11/97 30,000 30,136
East Brunswick Township, New Jersey Bond
Anticipation Notes Series 1996-97
3.67%, 05/23/97 14,885 14,917
Hackensack, New Jersey Bond Anticipation Notes
Series 1996-97
3.50%, 12/18/97 6,178 6,207
Mahwah Township, New Jersey School District Bond
Anticipation Notes
4.00%, 07/25/97 4,225 4,231
Rockaway Township, New Jersey Bond Anticipation
Notes
4.00%, 07/30/97 1,910 1,916
Rockaway Township, New Jersey Special Assessment
Bond Anticipation Notes Series 1996-97
4.00%, 07/30/97 5,439 5,454
West Orange, New Jersey Bond Anticipation Notes
Series 1996-97
3.47%, 01/13/97 3,951 3,952
Westwood, New Jersey Bond Anticipation Notes Series
1996-97
3.80%, 08/19/97 9,700 9,726
------
TOTAL BOND ANTICIPATION NOTES
(Cost $76,539) 76,539
------
OPTIONAL PUT BONDS--1.45%(b)
ILLINOIS--0.11%
Chicago, Illinois O'Hare International Airport
Revenue Bonds (General Airport Second Lien)
Series B/(Westpac Banking Corp. LOC)
4.15%, 01/01/97 5,000 5,000
------
</TABLE>
66
<PAGE> 73
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
MISSOURI--1.28%
Missouri State Environmental Improvement & Energy
Resources Authority Pollution Control Revenue
Bonds (Union Electric Co.) Series 1985A/(Swiss
Bank LOC)
3.65%, 06/01/97 $31,000 $31,000
Missouri State Environmental Improvement & Energy
Resources Authority Pollution Control Revenue
Bonds (Union Electric Co.) Series 1985B/(Union
Bank of Switzerland LOC)
3.65%, 06/01/97 28,500 28,500
------
59,500
------
NEW HAMPSHIRE--0.06%
New Hampshire Higher Education & Health Facilities
Authority Revenue Bonds (Dartmouth College)
Series 1985A-G
3.80%, 06/01/97 2,980 2,980
------
TOTAL OPTIONAL PUT BONDS
(Cost $67,480) 67,480
------
REVENUE BONDS--1.42%(b)
ARKANSAS--0.04%
Jonesboro, Arkansas Sales & Use Tax Revenue Bonds
Series 1996/(FSA Insurance)
3.80%, 05/01/97 2,000 2,000
------
FLORIDA--0.07%
Hillsborough County, Florida School Board Tax
Revenue Bonds/(AMBAC Insurance)
3.50%, 10/01/97 3,350 3,387
------
INDIANA--0.26%
Indiana State Transportation Financing Authority
Highway Revenue Bonds Series A/(AMBAC Insurance)
3.80%, 06/01/97 1,000 1,002
Indiana University Student Fee Revenue Bonds
Series J
3.50%, 08/01/97 800 802
Indianapolis, Indiana Local Public Import Bond Bank
Notes Series 1996E/(American International Group
Investment Agreement)
3.53%, 07/10/97 10,000 10,030
------
11,834
------
</TABLE>
67
<PAGE> 74
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
KENTUCKY--0.02%
University of Kentucky University Revenue Bonds
(Consolidated Education Building) Series 1987J/
(Escrowed to Maturity with Government Securities)
3.55%, 05/01/97 $1,000 $1,028
------
LOUISIANA--0.08%
Louisiana Stadium & Exposition District Hotel
Occupancy Tax Revenue Bonds Series 1996/
(FGIC Insurance)
3.64%, 07/01/97 685 687
Louisiana State Recovery District Sales Tax Revenue
Refunding Bonds/(MBIA Insurance)
3.08%, 07/01/97 3,000 3,025
------
3,712
------
MASSACHUSETTS--0.15%
Massachusetts State Water Pollution Abatement
Treatment Loan Program Series 1996A
3.52%, 08/01/97 7,020 7,079
------
MONTANA--0.03%
Montana State Housing Finance Authority Facilities
Revenue Bonds (Benefits Health Care Project)
Series 1996/(AMBAC Insurance)
3.89%, 09/01/97 1,550 1,556
------
NEW MEXICO--0.12%
New Mexico State Severance Tax Revenue Bonds
Series 1996A
3.75%, 07/01/97 1,987 2,003
Santa Fe, New Mexico Single Family Mortgage Revenue
Bonds Series 1995B-1/(FGIC Investment Agreement)
3.70%, 06/29/97 3,500 3,500
------
5,503
------
NEW YORK--0.20%
New York State Dormitory Authority Revenue Bonds
(City University) Series 1987A/(Escrowed to
Maturity with Government Securities)
3.60%, 07/01/97 3,595 3,745
New York State Urban Development Corp. Senior Lien
Revenue Bonds
3.60%, 07/01/97 5,555 5,591
------
9,336
------
</TABLE>
68
<PAGE> 75
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
OHIO--0.09%
Ohio State Building Authority State Facilities (DAS
Data Control Project) Series 1988A/(Escrowed to
Maturity with Government Securities)
3.49%, 10/01/97 $4,000 $ 4,204
------
OREGON--0.11%
Oregon State Housing & Community Services Department
Mortgage Revenue Bonds (Single Family Mortgage
Program) Series 1996C/(Escrowed to Maturity with
Government Securities)
3.85%, 05/15/97 5,000 5,000
------
SOUTH CAROLINA--0.10%
South Carolina State Education Assistance Authority
Revenue Refunding Bonds Student Loan Senior Lien
Series 1993A1
3.66%, 09/01/97 4,490 4,506
------
SOUTH DAKOTA--0.02%
Sioux Falls Sales Tax Revenue Bonds Series 1996A/
(AMBAC Insurance)
3.70%, 11/15/97 445 445
Sioux Falls Sales Tax Revenue Bonds Series 1996B/
(AMBAC Insurance)
3.70%, 11/15/97 570 570
------
1,015
------
TEXAS--0.03%
Burlington, Texas Waterworks & Sewer Revenue
Refunding Bonds Series 1989A/(AMBAC Insurance)
3.67%, 06/01/97 1,345 1,362
------
WASHINGTON--0.10%
Washington State Public Power Supply System Nuclear
Facility #2 Revenue Bonds/(Escrowed to Maturity
with Government Securities)
3.95%, 07/01/97 4,250 4,445
------
TOTAL REVENUE BONDS
(Cost $65,967) 65,967
------
</TABLE>
69
<PAGE> 76
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
GENERAL OBLIGATIONS--1.31%(b)
ALASKA--0.02%
Valdez, Alaska Unlimited General Obligation Bonds
Series 1990/(MBIA Insurance)
3.70%, 01/01/97 $1,000 $1,000
-----
COLORADO--0.03%
Southern Suburban Park & Recreation District,
Colorado Unlimited General Obligation Bonds Series
1996/(FGIC Insurance)
3.70%, 12/15/97 1,210 1,218
-----
DELAWARE--0.03%
Wilmington, Delaware General Obligation Bonds Series
1992A/(MBIA Insurance)
3.85%, 07/01/97 1,500 1,508
-----
HAWAII--0.02%
Hawaii State Unlimited General Obligation Bonds
Series 1992BZ
3.65%, 10/01/97 1,000 1,013
-----
IDAHO--0.02%
Ada & Canyon Counties, Idaho Joint School District
#2 Meridan Unlimited General Obligation Bonds
Series 1996
3.60%, 07/30/97 1,000 1,005
-----
ILLINOIS--0.04%
Chicago Park District Limited Tax General Obligation
Bonds/(MBIA Insurance)
3.60%, 01/01/98 1,000 1,004
Cook County, Illinois High School District #205
Thornton Township/(FGIC Insurance & Escrowed to
Maturity with Government Securities)
2.90%, 06/01/97 1,000 1,007
-----
2,011
-----
KANSAS--0.02%
Overland Park, Kansas Temporary Notes Unlimited
General Obligation Bonds Series 1996B
3.68%, 04/01/97 1,100 1,100
-----
</TABLE>
70
<PAGE> 77
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
LOUISIANA--0.12%
Louisiana State Unlimited Tax General Obligation
Bonds/(MBIA Insurance)
3.45%, 05/15/97 $5,390 $5,441
-----
MASSACHUSETTS--0.09%
Massachusetts State General Obligation Consolidated
Lien Bonds Series 1989D/(MBIA Insurance)
3.50%, 10/01/97 1,000 1,024
Massachusetts Unlimited Tax General Obligation
Bonds/(FGIC Insurance)
3.40%, 06/01/97 3,205 3,263
-----
4,287
-----
NEVADA--0.03%
Clark County, Nevada School District General
Obligation Bonds Series 1991A/(MBIA Insurance)
3.45%, 06/01/97 1,500 1,518
-----
NEW JERSEY--0.06%
Newark, New Jersey Unlimited General Obligation
Bonds Series 1996/(FSA Insurance)
3.60%, 10/01/97 2,760 2,778
-----
NEW MEXICO--0.11%
Albuquerque, New Mexico Municipal School District 12
Unlimited General Obligation Bonds
3.50%, 08/01/97 5,000 5,085
-----
NEW YORK--0.02%
Monroe County, New York Unlimited Tax Public
Improvement General Obligation Bonds
3.54%, 03/01/97 1,000 1,002
-----
OHIO--0.10%
Ohio State Higher Education Facility Community
Revenue Series 1987A/(AMBAC Insurance)
3.53%, 05/01/97 2,400 2,422
Ohio State Natural Resource Capital Facilities
General Obligation Bonds Series 1995B
3.60%, 10/01/97 2,300 2,310
-----
4,732
-----
</TABLE>
71
<PAGE> 78
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
OKLAHOMA--0.08%
Oklahoma City, Oklahoma Unlimited General Obligation
Bonds Series 1993
3.65%, 08/01/97 $3,485 $3,611
-----
OREGON--0.07%
Oregon State Veterans Welfare Unlimited Tax General
Obligation Bonds/(MBIA Insurance)
3.35%, 03/01/97 3,300 3,320
-----
PENNSYLVANIA--0.02%
Pittsburgh, Pennsylvania General Obligation Bonds
Series A/(AMBAC Insurance)
3.52%, 09/01/97 1,000 1,003
-----
SOUTH CAROLINA--0.17%
South Carolina State Capital Improvement Unlimited
General Obligation Bonds Series 1992B
3.50%, 03/01/97 4,500 4,520
South Carolina State General Obligation Bonds
Series U
3.41%, 02/01/97 1,715 1,721
York County, South Carolina School District #3 (Rock
Hill) Series 1996A/(FSA Insurance)
3.80%, 03/01/97 1,370 1,377
-----
7,618
-----
TENNESSEE--0.02%
Shelby County, Tennessee Public Improvement General
Obligation Bonds Series 1989A/(Escrowed to
Maturity with Government Securities)
3.45%, 08/01/97 1,020 1,050
-----
TEXAS--0.04%
Houston, Texas Limited Tax General Obligation Bonds
3.35%, 03/01/97 2,000 2,007
-----
WASHINGTON--0.14%
Washington State General Obligation Bonds
Series R-1992-C
3.60%, 09/01/97 2,500 2,521
Washington State Motor Vehicle Fuel Tax General
Obligation Bonds Series R-1992-D
3.60%, 09/01/97 3,315 3,343
-----
5,864
-----
</TABLE>
72
<PAGE> 79
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
WISCONSIN--0.06%
Wisconsin State Unlimited General Obligation Bonds
Series 1989
3.52%, 05/01/97 $1,000 $ 1,011
Wisconsin State Unlimited General Obligation Bonds
Series 1989C-1/(Escrowed to Maturity with
Government Securities)
3.65%, 05/01/97 250 255
Wisconsin State Unlimited General Obligation Bonds
Series 1989C-2/(Escrowed to Maturity with
Government Securities)
3.60%, 05/01/97 1,395 1,424
---------
2,690
---------
TOTAL GENERAL OBLIGATIONS
(Cost $60,861) 60,861
---------
TAX ANTICIPATION NOTES--0.15%(b)
NEW YORK--0.15%
New York City Tax Anticipation Notes Series 1996
3.45%, 02/12/97 6,900 6,908
---------
TOTAL TAX ANTICIPATION NOTES
(Cost $6,908) 6,908
---------
CERTIFICATES OF PARTICIPATION--0.02%(b)
TEXAS--0.02%
Houston, Texas Water Conveyance System Contract
Certificates of Participation Series E/(AMBAC
Insurance)
3.55%, 12/15/97 1,000 1,017
---------
TOTAL CERTIFICATES OF PARTICIPATION 1,017
(Cost $1,018) ---------
TOTAL INVESTMENTS--100% $4,653,310
(Cost $4,653,310) =========
</TABLE>
See accompanying Notes to Schedules of Investments.
73
<PAGE> 80
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS--63.16%(a)
ABAG Finance Authority for Nonprofit Organizations
Certificates of Participation (Lucile Salter Packard
Project)/(AMBAC Insurance & IBJ SBPA)
3.90%, 01/07/97 $ 6,050 $ 6,050
Alameda County, California Industrial Development
Authority Revenue Bonds (Aitchison Family Project)
Series 1993A/(Wells Fargo Bank LOC)
4.25%, 01/07/97 2,880 2,880
Alameda County, California Industrial Development
Authority Revenue Bonds (Scientific Technology
Project) Series 1994A/(Banque Nationale de Paris
LOC)
4.25%, 01/07/97 3,000 3,000
Alameda-Contra Costa, California School Financial
Authority Certificates of Participation Capital
Improvement Finance Project/(Canadian Imperial Bank
of Commerce LOC)
3.75%, 01/07/97 6,000 6,000
Anaheim, California Certificates of Participation
(Anaheim Memorial Hospital Assoc. Project)/(AMBAC
Insurance & ABN-Amro Bank N.V. SBPA)
3.90%, 01/07/97 5,070 5,070
Anaheim, California Certificates of Participation
(Police Facility Financing Project)/(AMBAC Insurance
& IBJ SBPA)
3.90%, 01/07/97 250 250
Anaheim, California Housing Authority Multi Family
Housing Revenue Bonds (Heritage Village Apartments
Project) Series 1992A/(Multiple Credit Enhancements)
4.35%, 01/07/97 3,385 3,385
Big Bear Lake, California Industrial Development
Revenue Bonds Certificates of Participation
(Southwest Gas Corp. Project) Series A/(Union Bank
of Switzerland LOC)
4.00%, 01/07/97 12,500 12,500
California Health Facilities Financing Authority
Revenue Bonds (Adventist Health System -- Sutter
Health) Series 1991A/(Toronto-Dominion Bank LOC)
3.90%, 01/07/97 1,000 1,000
California Health Facilities Financing Authority
Revenue Bonds (Catholic Health Care) Series
1996B/(MBIA Insurance & Rabobank Nederland N.V.
SBPA)
4.00%, 01/07/97 20,000 20,000
California Health Facilities Financing Authority
Revenue Bonds (Catholic Health Care) Series
1996C/(MBIA Insurance & Rabobank Nederland N.V.
SBPA)
4.00%, 01/07/97 20,000 20,000
</TABLE>
74
<PAGE> 81
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
California Health Facilities Financing Authority
Revenue Bonds (Childrens Hospital Project) Series
1991/(MBIA Insurance & Swiss Bank SBPA)
4.00%, 01/07/97 $ 9,900 $ 9,900
California Health Facilities Financing Authority
Revenue Bonds (Granada Hills Community Center)
Series 1985C/(Banque Paribas LOC)
4.20%, 01/07/97 3,300 3,300
California Health Facilities Financing Authority
Revenue Bonds (Kaiser Permanente Project) Series
1993A
4.00%, 01/07/97 8,200 8,200
California Health Facilities Financing Authority
Revenue Bonds (Kaiser Permanente Project) Series
1993B
4.00%, 01/07/97 1,600 1,600
California Health Facilities Financing Authority
Revenue Bonds (Pooled Loan Program) Series
1985B/(FGIC Insurance & FGIC SPA)
4.00%, 01/07/97 18,935 18,935
California Health Facilities Financing Authority
Revenue Bonds (Scripps Memorial Hospital) Series
1985B/(MBIA Insurance & Morgan Guaranty Trust SBPA)
4.00%, 01/07/97 15,120 15,120
California Health Facilities Financing Authority
Revenue Bonds (Scripps Memorial Hospital) Series
1991A/(MBIA Insurance & Morgan Guaranty Trust SBPA)
4.00%, 01/07/97 5,600 5,600
California Health Facilities Financing Authority
Revenue Bonds (Scripps Memorial Hospital) Series
1991B/(MBIA Insurance & Swiss Bank SBPA)
3.95%, 01/07/97 13,900 13,900
California Health Facilities Financing Authority
Revenue Bonds (St. Francis Hospital) Series
1995E/(MBIA Insurance & Rabobank Nederland SBPA)
4.00%, 01/07/97 4,900 4,900
California Health Facilities Financing Authority
Revenue Bonds (St. Francis Hospital) Series
1995F/(MBIA Insurance & Rabobank Nederland SBPA)
3.90%, 01/07/97 30,000 30,000
California Pollution Control Financing Authority
Pollution Control Revenue Refunding Bonds (Pacific
Gas & Electric) Series 1996C/(Bank of America LOC)
4.75%, 01/07/97 5,300 5,300
California Pollution Control Financing Authority
Refunding Revenue Bonds (Southern California Edison)
Series 1986A
4.70%, 01/01/97 500 500
California Pollution Control Financing Authority
Refunding Revenue Bonds (Southern California Edison)
Series 1986C
4.70%, 01/01/97 1,380 1,380
</TABLE>
75
<PAGE> 82
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
California Pollution Control Financing Authority
Refunding Revenue Bonds (Southern California Edison)
Series 1986D
4.70%, 01/01/97 $ 600 $ 600
California Pollution Control Financing Authority
Resource Recovery Revenue Bonds (OMS Equity
Stanislaus Project)/(Swiss Bank LOC)
5.05%, 01/01/97 2,000 2,000
California Pollution Control Financing Authority
Revenue Bonds (Burney Forest Products Project)
Series 1988A/(Fleet Bank N.A. LOC)
4.80%, 01/01/97 1,100 1,100
California Pollution Control Financing Authority
Revenue Bonds (Pacific Gas & Electric) Series
1996B/(Rabobank Nederland LOC)
4.00%, 01/07/97 31,000 31,000
California Pollution Control Financing Authority
Revenue Bonds (Reynolds Metals Co. Project) Series
1985/(National Westminster Bank PLC LOC)
4.25%, 01/07/97 1,300 1,300
California Pollution Control Financing Authority
Revenue Bonds (Southdown, Inc. Project) Series
B/(Societe Generale LOC)
3.50%, 01/07/97 3,900 3,900
California Pollution Control Financing Authority
Revenue Refunding Bonds (Pacific Gas & Electric)
Series 1996F/(Banque Nationale de Paris LOC)
4.80%, 01/01/97 2,200 2,200
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Athens Disposal Co.
Project) Series 1995A/(Wells Fargo Bank LOC)
4.10%, 01/07/97 10,000 10,000
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Burrtec Waste
Industries Project) Series 1995A/(Union Bank of
California LOC)
4.10%, 01/07/97 3,550 3,550
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Calsan Inc. Project)
Series 1996A/(Wells Fargo Bank LOC)
4.10%, 01/01/97 12,000 12,000
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Colmac Energy Project)
Series 1990A/(Swiss Bank LOC)
4.00%, 01/07/97 12,900 12,900
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Colmac Energy Project)
Series 1990B/(Swiss Bank LOC)
4.00%, 01/07/97 8,200 8,200
</TABLE>
76
<PAGE> 83
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Colmac Energy Project)
Series 1990C/(Swiss Bank LOC)
4.00%, 01/07/97 $ 7,835 $ 7,835
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Contra Costa Services)
Series 1995A/(Bank of America LOC)
4.05%, 01/07/97 4,500 4,500
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Edco Disposal
Corporation Project) Series 1996A/(Wells Fargo Bank
LOC)
4.10%, 01/01/97 10,000 10,000
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Taormina Industries
Project) Series 1994B/(Sanwa Bank LOC)
4.20%, 01/07/97 11,000 11,000
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Taormina Industries
Project) Series 1996A/(Sanwa Bank LOC)
4.25%, 01/07/97 4,750 4,750
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Various California
Waste Recovery Projects) Series 1996A/(Wells Fargo
Bank LOC)
4.10%, 01/07/97 1,815 1,815
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Western Waste
Industrial) Series 1994A/(Union Bank of California
LOC)
4.10%, 01/07/97 6,000 6,000
California State Variable Rate Revenue Anticipation
Notes Series 1996C-1/(Multiple Credit Enhancements)
4.00%, 01/07/97 74,600 74,600
California State Variable Rate Revenue Anticipation
Notes Series 1996C-2/(Multiple Credit Enhancements)
4.05%, 01/07/97 55,000 55,000
California State Variable Rate Revenue Anticipation
Notes Series 1996C-3/(Multiple Credit Enhancements)
4.05%, 01/07/97 5,800 5,800
California Statewide Community Development Authority
Apartment Development Revenue Bonds Series 1995A-3/
(FNMA Collateral Investment Agreement)
3.90%, 01/07/97 21,300 21,300
California Statewide Community Development Authority
Certificates of Participation (California Retired
Officers)/(Dresdner Bank AG LOC)
5.00%, 01/01/97 10,100 10,100
</TABLE>
77
<PAGE> 84
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
California Statewide Community Development Authority
Industrial Development Revenue Bonds (13th & I
Associates Project)/(Union Bank of California LOC)
4.10%, 01/07/97 $5,435 $5,435
California Statewide Community Development Authority
Industrial Development Revenue Bonds (Aerostar
Properties Project)/(Union Bank of California LOC)
4.05%, 01/07/97 4,895 4,895
California Statewide Community Development Authority
Industrial Development Revenue Bonds (Agricultural
Products, Inc. Project)/(Union Bank of California
LOC)
4.15%, 01/07/97 1,420 1,420
California Statewide Community Development Authority
Industrial Development Revenue Bonds (ARM Inc.
Project) Series 1994A/(Bank of Tokyo-Mitsubishi LOC)
4.10%, 01/07/97 1,200 1,200
California Statewide Community Development Authority
Industrial Development Revenue Bonds (D.V.
Industries) Series 1994A/(Bank of Tokyo-Mitsubishi
LOC)
4.10%, 01/07/97 1,480 1,480
California Statewide Community Development Authority
Industrial Development Revenue Bonds (Flambeau
Airmold Project)/(Norwest Bank of Minnesota LOC)
4.20%, 01/07/97 3,000 3,000
California Statewide Community Development Authority
Industrial Development Revenue Bonds (Industrial
Dynamics, Co. Project)/(Union Bank of California
LOC)
4.15%, 01/07/97 4,920 4,920
California Statewide Community Development Authority
Industrial Development Revenue Bonds (Lorber
Industries of California Project)/(Union Bank of
California LOC)
4.15%, 01/07/97 450 450
California Statewide Community Development Authority
Industrial Development Revenue Bonds (Pacific
Scientific Project) Series 1989/(Union Bank of
California LOC)
4.15%, 01/07/97 5,625 5,625
California Statewide Community Development Authority
Industrial Development Revenue Bonds (Packaging
Innovation Project) Series 1994A/(Bank of Tokyo-
Mitsubishi LOC)
4.10%, 01/07/97 2,950 2,950
California Statewide Community Development Authority
Industrial Development Revenue Bonds (Z-Nix Co.
Project)/(Union Bank of California LOC)
4.15%, 01/07/97 840 840
</TABLE>
78
<PAGE> 85
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
California Statewide Community Development Authority
Refunding Bonds Certificates of Participation (Saint
Joseph Health System)
4.00%, 01/07/97 $ 8,500 $ 8,500
California Statewide Community Development Authority
Revenue Bonds Certificates of Participation (Kaiser
Foundation Hospitals)
4.00%, 01/07/97 10,000 10,000
California Statewide Community Development Corp.
Industrial Development Revenue Bonds (Pacific Handy
Cutter Products, Inc. Project)/(Union Bank of
California LOC)
4.15%, 01/07/97 1,055 1,055
California Statewide Community Development Corp.
Industrial Development Revenue Bonds (The Diamond
Foods Project) Series 1991/(Union Bank of California
LOC)
4.15%, 01/07/97 1,540 1,540
Carlsbad, California Multi Family Housing Revenue
Refunding Bonds Certificates of Participation (La
Costa Apartment Project) Series 1993A/(Bank of
America LOC)
4.10%, 01/07/97 11,720 11,720
Concord, California Multi Family Housing Mortgage
Revenue Bonds (Bel Air Apartments Project) Series
1986A/(Bank of America LOC)
4.15%, 01/07/97 3,000 3,000
Contra Costa County, California Multi Family Housing
Mortgage Revenue Bonds (El Cerrito Project) Series
A/(Bank of America LOC)
4.15%, 01/07/97 980 980
Costa Mesa, California Industrial Development Revenue
Bonds (Center Tower Assoc. Project)/(Chase
Manhattan Bank LOC)
3.60%, 01/07/97 3,775 3,775
Duarte, California Redevelopment Agency Certificates
of Participation (Johnson Duarte Partners Project)
Series 1984B/(Bank of America LOC)
3.95%, 01/07/97 1,600 1,600
Duarte, California Redevelopment Agency Certificates
of Participation (Piken Duarte Partners Project)
Series 1984A/(Bank of America LOC)
3.95%, 01/07/97 4,250 4,250
Eastern Municipal Water District, California Water &
Sewer Revenue Certificates of Participation Series
1993B/(FGIC Insurance & IBJ SBPA)
4.00%, 01/07/97 12,200 12,200
</TABLE>
79
<PAGE> 86
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Encinitas, California Multi Family Housing Revenue
Refunding Bonds (Torrey Pines Project) Series A/
(Bank of America LOC)
4.00%, 01/07/97 $ 8,100 $ 8,100
Foothill Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds Series
1995B/(Morgan Guaranty Trust LOC)
4.00%, 01/07/97 13,000 13,000
Foothill Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds Series
1995C/(Credit Suisse LOC)
3.90%, 01/07/97 4,500 4,500
Foothill Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds Series 1995D/(IBJ
LOC)
4.10%, 01/07/97 17,700 17,700
Fremont, California Multi Family Housing Revenue
Refunding Certificates of Participation (Amber Court
Apartments Project) Series 1990A/(Bank of Tokyo-
Mitsubishi LOC)
4.05%, 01/07/97 10,380 10,380
Fresno, California Multi Family Housing Revenue
Refunding Bonds (Heron Pointe Apartments) Series
1996A/(Wells Fargo Bank LOC)
4.15%, 01/07/97 5,250 5,250
Glenn, California Industrial Development Authority
Revenue Bonds (Land 'O Lakes Project)/(Sanwa Bank
LOC)
4.55%, 01/07/97 1,900 1,900
Grand Terrace, California Community Redevelopment
Agency Multi Family Housing Revenue Bonds (Mount
Vernon Villas Project) Series 1985A/(IBJ LOC)
4.15%, 01/07/97 2,010 2,010
Independence City, California Lease Finance Authority
Lease Revenue Bonds (Various Pooled Projects) Series
1988/(National Westminster Bank PLC LOC)
4.00%, 01/07/97 2,490 2,490
Irvine Ranch Water District Capital Improvement
Revenue Bonds Series 1986/(Morgan Guaranty
Trust LOC)
5.00%, 01/01/97 5,400 5,400
Irvine Ranch Water District Certificate of
Participation Revenue Bonds Series 1988A/(Sumitomo
Bank LOC)
4.85%, 01/01/97 2,100 2,100
Irvine Ranch Water District Consolidated Revenue
Refunding Bonds (District Nos. 102,103,105&106)/
(Commerzbank AG LOC)
5.00%, 01/01/97 2,390 2,390
</TABLE>
80
<PAGE> 87
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Irvine Ranch Water District Consolidated Revenue
Refunding Bonds (Districts 105,140,240 & 250) Series
1995/(Commerzbank AG LOC)
5.00%, 01/01/97 $4,250 $4,250
Irvine Ranch Water District Consolidated Revenue
Refunding Bonds (Districts 140,240,105&250)/
(Bank of America LOC)
5.00%, 01/01/97 900 900
Irvine Ranch Water District Consolidated Revenue
Refunding Bonds Series 1985A/(Sumitomo Bank LOC)
5.00%, 01/01/97 1,350 1,350
Irvine Ranch Water District Consolidated Revenue
Refunding Bonds Series 1985A-2/(Landesbank Hessen-
Thuringen Girozentrale LOC)
5.00%, 01/01/97 1,900 1,900
Irvine Ranch Water District Consolidated Revenue
Refunding Bonds Series 1993A-1/(Landesbank Hessen-
Thuringen Girozentrale LOC)
4.85%, 01/01/97 1,800 1,800
Irvine Ranch Water District Consolidated Revenue
Refunding Bonds Series A/(IBJ LOC)
4.85%, 01/01/97 600 600
Kern County, California Certificates of Participation
(Kern Public Facilities Project) Series 1986C/
(Union Bank of Switzerland LOC)
4.00%, 01/07/97 3,200 3,200
Kern County, California Certificates of Participation
(Kern Public Facilities Project) Series A/(Sanwa
Bank LOC)
4.00%, 01/07/97 200 200
Lancaster, California Redevelopment Agency
Multi-Family Revenue Bonds (Woodcreek Garden
Apartments Project) Series 1985J/(Bank of
Tokyo-Mitsubishi LOC)
3.10%, 01/07/97 8,200 8,200
Livermore, California Multi-Family Housing Revenue
Refunding Bonds (Arbors Apartment Project) Series
1991A/(Bank of Tokyo-Mitsubishi LOC)
4.05%, 01/07/97 9,255 9,255
Livermore, California Multi-Family Housing Revenue
Refunding Bonds (Diablo Vista Apartments Project)
Series 1990A/(Union Bank of California LOC)
4.05%, 01/07/97 6,950 6,950
Los Angeles County, California Certificates of
Participation Adjustable Convertible Extendable
Securities (Los Angeles County Museum of Art
Project) Series 1985A/(Bank of America LOC)
3.10%, 01/07/97 3,600 3,600
</TABLE>
81
<PAGE> 88
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Los Angeles County, California Certificates of
Participation Adjustable Convertible Extendable
Securities (Los Angeles County Museum of Art
Project) Series 1985B/(Bank of America LOC)
3.10%, 01/07/97 $ 3,400 $ 3,400
Los Angeles County, California Housing Authority
Multi-Family Housing Revenue Bonds (Sand Canyon
Villas Project) Series 1989A/(IBJ LOC)
4.15%, 01/07/97 5,300 5,300
Los Angeles County, California Metropolitan
Transportation Authority Proposition C Second Senior
Sales Tax Revenue Refunding Bonds Series A/(MBIA
Insurance & Credit Local de France SBPA)
4.00%, 01/07/97 15,550 15,550
Los Angeles County, California Multi-Family-Mortgage
Revenue Refunding Bonds (Casden Community Complex)
Series 1991C/(FHLB LOC)
4.00%, 01/07/97 3,200 3,200
Los Angeles County, California Multi-Family Mortgage
Revenue Refunding Bonds (Valencia Village Project)
Series 1984C/(IBJ LOC)
2.85%, 01/07/97 900 900
Los Angeles County, California Pension Obligation
Refunding Bonds Series 1996C/(Bank of Nova Scotia
LOC)
3.90%, 01/07/97 1,200 1,200
Los Angeles County, California Pension Revenue
Refunding Obligation Bonds Series 1996A/(AMBAC
Insurance & National Westminster Bank PLC SBPA)
3.90%, 01/07/97 16,000 16,000
Los Angeles County, California Transportation
Commission Sales Tax Revenue Refunding Bonds
Series 1992A/(FGIC Insurance & Bayerische Landesbank
Girozentrale SBPA)
3.90%, 01/07/97 12,100 12,100
Los Angeles, California Community Redevelopment Agency
Certificates of Participation (Baldwin Hills Public
Parking Project) Series B/(Wells Fargo Bank LOC)
3.70%, 01/07/97 27,300 27,300
Los Angeles, California Community Redevelopment Agency
Certificates of Participation (Broadway Springs
Center Project) Series 1987/(Bank of America LOC)
4.10%, 01/07/97 10,500 10,500
Los Angeles, California Community Redevelopment Agency
Housing Revenue Bonds/(Barclays Bank PLC LOC)
4.05%, 01/07/97 12,000 12,000
Los Angeles, California Multi-Family Housing Revenue
Bonds (Poinsettia Apartments Project) Series
1989A/(Dai-Ichi Kangyo Bank LOC)
4.10%, 01/07/97 9,600 9,600
</TABLE>
82
<PAGE> 89
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Marin County, California Housing Authority
Multi-Family Housing Revenue Bonds (Crest Marin II
Apartments Project) Series 1989A/(Dai-Ichi Kangyo
Bank LOC)
3.35%, 01/07/97 $12,100 $12,100
Modesto, California High School District & Modesto
City School District Certificates of Participation
(Capital Facilities Project) Series 1991/(Bank of
Tokyo-Mitsubishi LOC)
4.00%, 01/07/97 4,995 4,995
Monterey County, California Financing Authority
Revenue Bonds (Reclamation & Distribution Projects)/
(Dai-Ichi Kangyo Bank LOC)
4.25%, 01/07/97 5,000 5,000
Moorpark, California Multi Family Housing Revenue
Refunding Bonds (Le Club Apartments Project) Series
A/(Citibank LOC)
4.05%, 01/07/97 6,000 6,000
Northern California Power Agency Public Power
Refunding Revenue Bonds (Geothermal Project
3A)/(AMBAC Insurance & Bank of Nova Scotia LOC)
3.85%, 01/07/97 54,400 54,400
Oakland, California Economic Development Revenue
Refunding Bonds (Leamington Hotel Project) Series
1994/(Wells Fargo Bank LOC)
4.35%, 01/07/97 4,250 4,250
Ontario, California Redevelopment Agency Multi-Family
Housing Revenue Refunding Bonds Series 1991A/(FHLB
LOC)
4.00%, 01/07/97 4,417 4,417
Orange County, California Apartment Development
Revenue Bonds (Villa Marguerite Apartments) Series
1993A/(Union Bank of Switzerland LOC)
4.00%, 01/07/97 4,635 4,635
Orange County, California Apartment Development
Revenue Refunding Bonds (Jess L. Frost Project)
Series 1985B/(Wells Fargo Bank LOC)
4.25%, 01/07/97 8,200 8,200
Orange County, California Apartment Development
Revenue Refunding Bonds (The Lakes Project #185)
Series 1991A/(Citibank LOC)
4.15%, 01/07/97 31,250 31,250
Orange County, California Certificates of
Participation (Florence Crittenton Services Project)
Series 1990/(Swiss Bank LOC)
4.05%, 01/07/97 6,700 6,700
</TABLE>
83
<PAGE> 90
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Orange County, California Sanitation District
Certificates of Participation (Capital Improvement
Program) Series 1990-92A/(National Westminster Bank
PLC LOC)
5.00%, 01/01/97 $ 7,450 $ 7,450
Orange County, California Sanitation District
Certificates of Participation (Capital Improvement
Program) Series 1990-92C/(FGIC Insurance & FGIC
SBPA)
4.85%, 01/01/97 48,400 48,400
Orange County, California Sanitation District
Certificates of Participation (Districts
#1,2,3)/(AMBAC Insurance & Societe Generale SBPA)
5.00%, 01/01/97 2,100 2,100
Orange County, California Sanitation District
Refunding Certificates of Participation Series
1992/(AMBAC Insurance & Barclays Bank PLC SBPA)
4.00%, 01/07/97 54,545 54,545
Orange County, California Water District Certificates
of Participation Series 1990B/(National Westminster
Bank PLC LOC)
4.75%, 01/01/97 1,100 1,100
Orange County, California Water District Improvement
Bond Act 1915 Revenue Bonds (Irvine Coast Assessment
District) Number 88-1/(Kredietbank & Societe
Generale LOC)
4.85%, 01/01/97 6,200 6,200
Panama Buena Vista, California Unified School District
Certificates of Participation (1994 Capital
Improvement Financing Project)/(Union Bank of
California LOC)
4.30%, 01/07/97 4,000 4,000
Pleasant Hill, California Multi-Family Housing Revenue
Bonds (Brookside Apartments Project)/(FNMA SBPA &
FNMA LOC)
4.05%, 01/07/97 5,500 5,500
Riverside County, California Certificates of
Participation (Riverside County Public Facility
Project) Series 1985A/(Commerzbank AG & National
Westminster Bank PLC LOC)
3.10%, 01/07/97 28,140 28,140
Riverside County, California Certificates of
Participation (Riverside County Public Facility
Project) Series 1985B/(Commerzbank AG & National
Westminster Bank PLC LOC)
2.85%, 01/07/97 14,075 14,075
Riverside County, California Certificates of
Participation (Riverside County Public Facility
Project) Series 1985C/(Commerzbank AG & National
Westminster Bank PLC LOC)
2.85%, 01/07/97 8,125 8,125
</TABLE>
84
<PAGE> 91
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Riverside County, California Housing Authority
Multi-Family Housing Revenue Bonds (Briarwood
Apartment Project) Series 1985C/(FHLB LOC)
4.15%, 01/07/97 $ 4,500 $ 4,500
Riverside County, California Industrial Development
Authority Revenue Bonds (Cryogenic Project) Series
1989B-1/(Rabobank Nederland LOC)
4.00%, 01/07/97 4,100 4,100
Riverside County, California Tax & Revenue
Anticipation Notes Series 1996-97/(Toronto-Dominion
Bank LOC)
3.90%, 01/07/97 24,500 24,500
Sacramento County, California Certificates of
Participation (Administration Center & Court House
Project)/(Union Bank of Switzerland LOC)
3.75%, 01/07/97 27,800 27,800
Salinas, California Apartment Development Multi-Family
Housing Revenue Bonds (Mariner Villa Project) Series
1985B/(Bank of America LOC)
4.00%, 01/07/97 2,725 2,725
San Bernardino County, California Certificates of
Participation (Glen Helen Blockbuster Pavilion
Project) Series 1994C/(Bank of Tokyo-Mitsubishi LOC)
4.40%, 01/07/97 7,125 7,125
San Bernardino County, California Multi-Family Housing
Revenue Bonds (Western Properties Project IV) Series
1985/(Bank of America LOC)
4.00%, 01/07/97 1,100 1,100
San Francisco, California City & County Redevelopment
Agency Multi-Family Housing Revenue Bonds (Fillmore
Center Project) Series A-1/(Citibank LOC)
4.15%, 01/07/97 26,500 26,500
San Francisco, California City & County Redevelopment
Agency Multi-Family Housing Revenue Bonds (Fillmore
Center Project) Series A-2/(Citibank LOC)
4.25%, 01/07/97 3,750 3,750
San Francisco, California City & County Redevelopment
Agency Multi-Family Housing Revenue Bonds (Fillmore
Center Project) Series B-2/(Bank of Nova Scotia LOC)
4.15%, 01/07/97 13,100 13,100
San Francisco, California City & County Redevelopment
Agency Multi-Family Housing Revenue Bonds (Rincon
Center Apartments) Series 1985B/(Citibank LOC)
3.00%, 01/07/97 7,050 7,050
San Francisco, California Housing Authority
Multi-Family Housing Revenue Bonds (737 Post
Project) Series 1985D/(Banque Nationale de Paris
LOC)
4.05%, 01/07/97 16,800 16,800
</TABLE>
85
<PAGE> 92
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
San Jose-Santa Clara, California Water Financing
Authority Sewer Revenue Bonds Series B/(AMBAC
Insurance & Bank of Nova Scotia SBPA)
3.85%, 01/07/97 $ 7,600 $ 7,600
San Jose, California Multi-Family Housing Revenue
Bonds (Sienna at Renaissance) Series 1996A/(Bank
One, Arizona LOC)
4.20%, 01/07/97 10,500 10,500
Santa Clara County, California Hospital Facility
Authority Revenue Bonds (El Camino Hospital
District-Valley Medical Center Project) Series
1985A/(National Westminster Bank PLC LOC)
2.70%, 01/07/97 7,800 7,800
Santa Clara County, California Hospital Facility
Authority Revenue Bonds (El Camino Hospital
District-Valley Medical Center Project) Series
1985B/(National Westminster Bank PLC LOC)
2.70%, 01/07/97 8,000 8,000
Santa Clara County, California Multi-Family Housing
Refunding Revenue Bonds (Brairwood Apartments)
Series 1996B/(FNMA LOC)
4.10%, 01/07/97 7,800 7,800
Santa Clara, California Electric Revenue Bonds Series
1985A/(National Westminster Bank PLC LOC)
3.95%, 01/07/97 12,800 12,800
Santa Clara, California Electric Revenue Bonds Series
1985B/(National Westminster Bank PLC LOC)
3.95%, 01/07/97 11,700 11,700
Santa Clara, California Electric Revenue Bonds Series
1985C/(National Westminster Bank PLC LOC)
3.95%, 01/07/97 8,500 8,500
Santa Cruz County, California Housing Authority
Multi-Family Housing Revenue Bonds (Paloma del Mar
Apartments Project) Series 1992A/(Bank of Tokyo-
Mitsubishi LOC)
4.15%, 01/07/97 7,700 7,700
South San Francisco, California Multi-Family Revenue
Bonds (Magnolia Plaza Apartments Project) Series
A/(Wells Fargo Bank LOC)
4.25%, 01/07/97 4,500 4,500
Southern California Metropolitan Water District
Revenue Refunding Bonds Series 1996A/(ABN-Amro Bank
N.V. SPA & AMBAC Insurance)
4.00%, 01/07/97 18,700 18,700
Southern California Public Power Authority Refunding
Revenue Bonds (Palo Verde Project) Series 1996B/
(AMBAC Insurance & Morgan Guaranty Trust LOC)
3.90%, 01/07/97 23,070 23,070
</TABLE>
86
<PAGE> 93
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Southern California Public Power Authority Revenue
Bonds (Southern Transmission Project) Series
1991/(AMBAC Insurance & Swiss Bank LOC)
3.90%, 01/07/97 $ 8,600 $ 8,600
Southern California Public Power Authority
Transmission Project Revenue Refunding Bonds
(Southdown Project) Series 1996B/(FSA Insurance &
Morgan Guaranty Trust SBPA)
4.00%, 01/07/97 32,400 32,400
Turlock, California Irrigation District Certificates
of Participation (Transmission Projects, Municipal
Utilities - Water & Sewer) Series 1996A/(Societe
Generale LOC)
4.00%, 01/07/97 2,200 2,200
Victor Valley, California Community College District
Certificates of Participation (Capital Improvements
Financing and Refunding Project)/(Banque Nationale
de Paris & Dai-Ichi Kangyo Bank LOC)
4.30%, 01/07/97 6,400 6,400
---------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $1,464,431) 1,464,432
---------
TAX-EXEMPT COMMERCIAL PAPER--17.41%(b)
California Pollution Control Financing Authority
Revenue Bonds (Pacific Gas & Electric) Series 1996D/
(Union Bank of Switzerland LOC)
3.40%, 01/28/97 16,500 16,500
California Pollution Control Financing Authority
Revenue Bonds (Southern California Edison) Series
1985A
3.25%, 02/06/97 1,000 1,000
3.30%, 02/25/97 2,300 2,300
3.35%, 03/12/97 12,000 12,000
California Pollution Control Financing Authority
Revenue Bonds (Southern California Edison) Series
1985B
3.25%, 02/06/97 2,000 2,000
3.25%, 02/12/97 2,100 2,100
3.30%, 02/25/97 2,200 2,200
3.35%, 03/12/97 14,000 14,000
California Pollution Control Financing Authority Solid
Waste Disposal Revenue Bonds (Thermal Energy
Development LP) Series 1988A/(National Westminster
Bank PLC LOC)
3.40%, 03/12/97 27,500 27,500
East Bay Municipal Utility District, California
(Wastewater Systems) Tax-Exempt Commercial Paper
Program/(National Westminster Bank PLC LOC)
3.40%, 03/13/97 10,700 10,700
</TABLE>
87
<PAGE> 94
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Long Beach, California Harbor Revenue Commercial Paper
Notes Series 1994A/(Multiple Credit Enhancements)
3.50%, 02/10/97 $ 4,000 $ 4,000
3.45%, 03/12/97 32,100 32,100
Los Angeles, California Wastewater System Tax-Exempt
Commercial Paper Revenue Notes/(Morgan Guaranty
Trust & Union Bank of Switzerland LOC)
3.50%, 01/24/97 3,000 3,000
3.50%, 02/25/97 34,500 34,500
Metropolitan Water District of Southern California
Tax-Exempt Commercial Paper
3.45%, 02/14/97 10,000 10,000
Orange County, California Local Transportation
Authority Sales Tax & Revenue Commercial Paper
Notes/(IBJ LOC)
3.60%, 02/10/97 50,000 50,000
Sacramento, California Municipal Utility District
Series I/(Bayerische Landesbank Girozentrale LOC)
3.40%, 01/28/97 16,000 16,000
3.40%, 02/21/97 12,424 12,424
San Diego County, Teeter Obligation Tax-Exempt
Commercial Paper Series B/(IBJ LOC)
3.55%, 01/10/97 7,000 7,000
3.55%, 01/13/97 25,000 25,000
University of California Board of Regents Tax-Exempt
Commercial Paper Notes Series 1996A/(Multiple Credit
Enhancements)
3.45%, 01/17/97 10,000 10,000
3.51%, 01/23/97 10,000 10,000
3.40%, 01/23/97 30,000 30,000
3.50%, 01/24/97 6,000 6,000
3.50%, 02/13/97 20,000 20,000
West & Central Basin Financing Authority, California
West Basin Municipal Water District Tax-Exempt
Commercial Paper/(Toronto-Dominion Bank LOC)
3.30%, 02/11/97 8,500 8,500
3.40%, 02/12/97 16,000 16,000
3.35%, 02/12/97 19,000 19,000
-------
TOTAL TAX-EXEMPT COMMERCIAL PAPER
(Cost $403,824) 403,824
-------
TAX AND REVENUE ANTICIPATION NOTES--15.40%(b)
Acalanes, California Unified High School District Tax
& Revenue Anticipation Notes Series 1996-97
3.80%, 07/01/97 5,700 5,716
Berkeley, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.85%, 07/01/97 9,400 9,424
</TABLE>
88
<PAGE> 95
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
California School Cash Reserve Program Authority
Pooled Tax & Revenue Anticipation Notes Series
1996-97/(Multiple Credit Enhancements)
3.85%, 07/02/97 $43,970 $44,160
Clovis, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.80%, 06/30/97 25,400 25,484
Contra Costa County, California Tax & Revenue
Anticipation Notes Series 1996-97
4.50%, 07/03/97 10,000 10,034
Desert Sands, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.80%, 07/02/97 4,500 4,515
Fontana, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.95%, 07/11/97 10,000 10,028
Fullerton, California Joint Unified High School
District Tax & Revenue Anticipation Notes Series
1996-97
3.90%, 09/05/97 2,365 2,374
Los Angeles County, California Tax & Revenue
Anticipation Notes Series 1996-97A/(Multiple Credit
Enhancements)
3.93%, 06/30/97 12,700 12,734
3.83%, 06/30/97 7,700 7,724
3.52%, 06/30/97 9,000 9,040
Los Angeles, California Tax & Revenue Anticipation
Notes Series 1996-97
3.85%, 06/19/97 35,000 35,101
3.84%, 06/19/97 27,000 27,082
Los Rios, California City & County Development Tax &
Revenue Anticipation Notes Series 1996-97
3.95%, 09/19/97 12,500 12,547
Oakland, California Unified School District - Alameda
County Tax & Revenue Anticipation Notes
3.60%, 10/14/97 15,000 15,072
Pleasanton, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.80%, 07/01/97 5,400 5,415
Puerto Rico Commonwealth Tax & Revenue Anticipation
Notes Series 1
3.43%, 07/30/97 15,000 15,048
Sacramento County, California Tax & Revenue
Anticipation Notes Series 1996-97
3.76%, 09/30/97 200 201
San Francisco, California City & County Unified School
District Tax & Revenue Anticipation Notes Series
1996-97
3.98%, 07/24/97 40,000 40,112
</TABLE>
89
<PAGE> 96
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
San Juan, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
4.50%, 09/24/97 $30,000 $ 30,116
San Leandro, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.80%, 07/01/97 5,000 5,014
Sanger, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.57%, 11/26/97 5,000 5,040
Stockton, California Unified School District Tax &
Revenue Anticipation Notes Series 1996-97
3.54%, 11/26/97 18,000 18,072
Temecula Valley, California Unified School District
Tax & Revenue Anticipation Notes Series 1996-97
3.80%, 07/02/97 7,000 7,024
-------
TOTAL TAX AND REVENUE ANTICIPATION NOTES
(Cost $357,077) 357,077
-------
VARIABLE RATE TENDER OPTION BOND PARTNERSHIPS--2.01%(a) (c)
California State Department of Water Resources Revenue
Bonds (Central Valley Project) Series J3 Tender
Option Bond Partnership (BTP-141)/(Bankers Trust
Tender Option)
4.25%, 01/07/97 5,155 5,155
Los Angeles County, California Transportation
Commission Sales Tax Revenue Tender Option Bond
Partnership (BTP-146)/(Bankers Trust Tender Option &
Escrowed to Maturity with Government Securities)
4.25%, 01/07/97 23,078 23,078
Los Angeles, California Department of Water & Power
Electric Plant Revenue Refunding Bonds Series 1994
Tender Option Bond Partnership (BTP-68)/(Automated
Data Processing, Inc. Tender Option)
4.25%, 01/07/97 5,195 5,195
Metropolitan Water District of Southern California
Revenue Bonds Tender Option Bond Partnership
(JPM-32B)/(Morgan Guaranty Trust Tender Option)
4.15%, 01/02/97 3,000 3,000
Metropolitan Water District of Southern California
Waterworks General Obligation Revenue Refunding
Bonds Series 1993A-1 & 1993A-2 Tender Option Bond
Partnership (BTP-115)/(Bankers Trust Tender Option)
4.30%, 01/07/97 10,145 10,145
-------
TOTAL VARIABLE RATE TENDER OPTION BOND
PARTNERSHIPS (Cost $46,573) 46,573
-------
</TABLE>
90
<PAGE> 97
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
REVENUE BONDS--1.04%(b)
California Health Facilities Financing Authority
Revenue Bonds (Catholic Health Care) Series 1996A/
(MBIA Insurance)
3.75%, 07/01/97 $ 4,450 $ 4,477
Los Angeles County, California Public Works Finance
Authority Lease Refunding Bonds Series 1996A/(MBIA
Insurance)
3.88%, 09/01/97 10,060 10,101
Northern California Power Agency Public Power Revenue
Refunding Bonds (Geothermal Project #3) Series
1996B/(AMBAC Insurance)
3.62%, 07/01/97 6,525 6,567
Sacramento, California Municipal Utility District
Electric Revenue Bonds Series R/(FGIC Insurance &
Escrowed to Maturity with Government Securities)
3.37%, 02/01/97 1,000 1,023
Sacramento, California Municipal Utility District
Electric Revenue Bonds Series S/(FGIC Insurance &
Escrowed to Maturity with Government Securities)
3.37%, 02/01/97 1,970 2,015
------
TOTAL REVENUE BONDS
(Cost $24,183) 24,183
------
REVENUE ANTICIPATION NOTES--0.30%(b)
California State Revenue Anticipation Notes Series
1996A
3.52%, 06/30/97 7,000 7,032
------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $7,032) 7,032
------
MANDATORY PUT BONDS--0.29%(b)
Redlands, California Revenue Refunding Certificates of
Participation (Water Treatment Facilities Project)/
(FGIC Insurance)
4.00%, 01/07/97 6,800 6,800
------
TOTAL MANDATORY PUT BONDS
(Cost $6,800) 6,800
------
CERTIFICATES OF PARTICIPATION--0.23%(b)
El Camino, California Hospital Revenue Certificates of
Participation Series 1987A
3.45%, 09/01/97 2,000 2,105
</TABLE>
91
<PAGE> 98
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Sacramento, California Public Finance Authority
Certificates of Participation Series 1987
3.50%, 08/01/97 $3,075 $ 3,229
---------
TOTAL CERTIFICATES OF PARTICIPATION
(Cost $5,334) 5,334
---------
GENERAL OBLIGATIONS--0.16%(b)
California State General Obligation Bonds Series 1993/
(AMBAC Insurance)
3.50%, 04/01/97 3,630 3,686
---------
TOTAL GENERAL OBLIGATIONS
(Cost $3,687) 3,686
---------
TOTAL INVESTMENTS--100%
(Cost $2,318,941) $2,318,941
=========
</TABLE>
See accompanying Notes to Schedules of Investments.
92
<PAGE> 99
SCHWAB NEW YORK MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS--65.49%(a)
Albany, New York Industrial Development Agency
Adjustable Rate Revenue Bonds (Newkirk Products,
Inc.) Series 1995A/(Fleet Bank of New York LOC)
4.30%, 01/07/97 $1,000 $1,000
Babylon, New York General Obligation Bonds Series B/
(Bank of Nova Scotia SBPA & AMBAC Insurance)
3.90%, 01/07/97 5,600 5,600
Babylon, New York Industrial Development Authority
Revenue Bonds (General Microwave)/(National
Westminster Bank PLC LOC)
4.15%, 01/07/97 1,500 1,500
Cortland County, New York Industrial Development
Agency Revenue Bonds (General Signal Corp.
Project) Series 1983/(Wachovia Bank LOC)
3.60%, 01/07/97 1,750 1,750
Erie County, New York Water Authority Revenue Bonds
Series 1993B/(IBJ SBPA & AMBAC Insurance)
3.80%, 01/07/97 1,400 1,400
Franklin County, New York Industrial Development
Agency Revenue Bonds (Kes Chateaugay LP Project)
Series A/(Bank of Tokyo-Mitsubishi LOC)
4.05%, 01/07/97 3,000 3,000
Geneva, New York Industrial Development Agency Civic
Facility Revenue Bonds (Colleges of The Seneca)
Series 1993A/(Sumitomo Bank LOC)
4.30%, 01/07/97 2,410 2,410
Monroe County, New York Industrial Development
Agency Revenue Bonds (ENBI Corp. Lease Rent
Project) Series 1988/(ABN-Amro Bank N.V. LOC)
3.85%, 01/07/97 2,000 2,000
New Rochelle, New York Industrial Development
Authority Revenue Bonds (Charles Sadek Import
Corp.)/(Bank of New York LOC)
3.50%, 01/07/97 5,500 5,500
New York City, New York Cultural Trust Resources
Revenue Bonds (American Museum of Natural History)
Series 1991B/(MBIA Insurance & Credit Suisse SPA)
3.80%, 01/07/97 800 800
New York City, New York General Obligation Bonds
Series 1993 Subseries B-2B/(Morgan Guaranty Trust
SBPA)
4.50%, 01/01/97 1,400 1,400
New York City, New York General Obligation Bonds
Series 1994 Subseries A-9/(Morgan Guaranty Trust
SBPA)
4.00%, 01/01/97 1,000 1,000
</TABLE>
93
<PAGE> 100
SCHWAB NEW YORK MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
New York City, New York General Obligation Bonds
Series 1995B-1 Subseries B-8/(Bayerische
Landesbank Girozentrale LOC)
4.05%, 01/07/97 $ 3,100 $ 3,100
New York City, New York Housing Development Corp.
Multi-Family Housing Mortgage Revenue Bonds
(Columbus Gardens Project) Series 1993A/(Citibank
LOC)
3.95%, 01/07/97 3,165 3,165
New York City, New York Housing Development Corp.
Multi-Family Housing Mortgage Revenue Bonds
(Parkgate Tower Project)/(Citibank LOC)
3.00%, 01/07/97 10,880 10,880
New York City, New York Housing Development Corp.
Multi-Family Housing Mortgage Revenue Bonds
(Tribeca Towers Project) Series 1994A/(FNMA
Collateral Investment Agreement)
4.05%, 01/07/97 12,100 12,100
New York City, New York Housing Development Corp.
Variable Rate Demand Special Obligation Revenue
Bonds (East 96th Street Project) Series 1990A/
(Bank of Tokyo-Mitsubishi LOC)
4.15%, 01/07/97 12,400 12,400
New York City, New York Industrial Development
Agency Floating Rate Revenue Bonds (White Plains
Auto)/(Societe Generale LOC)
2.95%, 01/07/97 200 200
New York City, New York Industrial Development
Agency Revenue Bonds (Brooklyn Navy Yard Co.)
Series 1995A/(Bank of America LOC)
4.15%, 01/07/97 13,500 13,500
New York City, New York Municipal Water Finance
Authority Water & Sewer System Revenue Bonds
Series 1992C/(FGIC Insurance & FGIC SBPA)
5.00%, 01/01/97 1,500 1,500
New York City, New York Municipal Water Finance
Authority Water & Sewer System Revenue Bonds
Series 1995A/(FGIC Insurance & FGIC SPA)
4.70%, 01/01/97 1,000 1,000
New York City, New York Trust for Cultural Resources
Revenue Bonds (Solomon R. Guggenheim Project)
Series 1990B/(Swiss Bank LOC)
4.80%, 01/07/97 800 800
New York City, New York Various Rate General
Obligation Bonds Series 1995B Subseries B-10/
(Union Bank of Switzerland LOC)
4.05%, 01/07/97 7,500 7,500
</TABLE>
94
<PAGE> 101
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
New York State Dormitory Authority Revenue Bonds
(Cornell University) Series 1990B/(Morgan Guaranty
Trust LOC)
4.80%, 01/07/97 $ 500 $ 500
New York State Dormitory Authority Revenue Bonds
(Masonic Hall Asylum)/(AMBAC Insurance & Credit
Local de France SBPA)
3.70%, 01/07/97 8,200 8,200
New York State Dormitory Authority Revenue Bonds
(New York Public Library) Series 1992B/(Canadian
Imperial Bank of Commerce LOC)
4.00%, 01/07/97 1,500 1,500
New York State Energy Research & Development
Authority Electric Facilities Revenue Bonds (Long
Island Lighting Co. Project) Series 1993A/
(Toronto-Dominion Bank LOC)
4.05%, 01/07/97 2,900 2,900
New York State Energy Research & Development
Authority Electric Facilities Revenue Bonds (Long
Island Lighting Co. Project) Series 1993B/
(Toronto-Dominion Bank LOC)
4.00%, 01/07/97 5,500 5,500
New York State Energy Research & Development
Authority Electric Facilities Revenue Bonds (Long
Island Lighting Co. Project) Series 1994A/(Union
Bank of Switzerland LOC)
4.00%, 01/07/97 2,000 2,000
New York State Energy Research & Development
Authority Pollution Control Revenue Bonds (Central
Hudson Gas & Electric Corp. Project) Series 1985A/
(Morgan Guaranty Trust LOC)
3.40%, 01/07/97 10,000 10,000
New York State Energy Research & Development
Authority Pollution Control Revenue Bonds (Niagara
Mohawk Power Project)/(Morgan Guaranty Trust LOC)
4.75%, 01/01/97 2,300 2,300
New York State Energy Research & Development
Authority Pollution Control Revenue Refunding
Bonds (Niagara Mohawk Power Project) Series 1985A/
(Toronto-Dominion Bank LOC)
4.70%, 01/01/97 1,100 1,100
New York State Energy Research & Development
Authority Pollution Control Revenue Refunding
Bonds (Orange & Rockland Utilities, Inc. Project)
Series 1994A/(FGIC Insurance & Societe Generale
SBPA)
3.80%, 01/07/97 15,400 15,400
</TABLE>
95
<PAGE> 102
SCHWAB NEW YORK MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
New York State Housing Finance Agency Multi-Family
Housing Revenue Bonds (Normandie Court II) Series
1987A/(Bankers Trust LOC)
4.15%, 01/07/97 $4,900 $4,900
New York State Housing Finance Agency Revenue Bonds
(East 84th Street Project) Series 1995A/(Fleet
Bank of New York LOC)
4.15%, 01/07/97 5,000 5,000
New York State Housing Finance Agency Revenue Bonds
(Mount Sinai School of Medicine) Series 1984A/
(Sanwa Bank LOC)
3.85%, 01/07/97 5,700 5,700
New York State Job Development Authority Special
Purpose Bonds Series A-1 Thru A-25/(State of New
York Guaranty & Sumitomo Bank LOC)
5.00%, 01/07/97 2,200 2,200
New York State Local Government Assistance Corp.
Public Improvement Revenue Bonds Series 1995B/
(Bank of Nova Scotia LOC)
4.00%, 01/07/97 8,700 8,700
New York State Local Government Assistance Corp.
Revenue Bonds Series 1993A/(Credit Suisse & Union
Bank of Switzerland LOC)
4.00%, 01/07/97 4,400 4,400
New York State Local Government Assistance Corp.
Revenue Bonds Series 1994B/(Credit Suisse & Swiss
Bank LOC)
4.00%, 01/07/97 400 400
New York State Local Government Assistance Corp.
Revenue Bonds Series 1995F/(Toronto-Dominion Bank
LOC)
4.00%, 01/07/97 2,800 2,800
New York State Local Government Assistance Corp.
Revenue Bonds Series 1995G/(National Westminster
Bank PLC LOC)
3.85%, 01/07/97 5,500 5,500
New York State Medical Care Facilities Financing
Agency Revenue Bonds (Pooled Equipment Loan
Program) Series 1/(Chase Manhattan Bank LOC)
3.05%, 01/07/97 2,200 2,200
Niagara County, New York Industrial Development
Agency Revenue Bonds (Allegheny Ludlum Steel Co.)
Series 1984/(PNC Bank LOC)
4.00%, 01/07/97 3,500 3,500
Niagara Falls, New York Bridge Commission Revenue
Bonds Series 1993A/(FGIC Insurance & IBJ SBPA)
3.70%, 01/07/97 6,400 6,400
</TABLE>
96
<PAGE> 103
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Puerto Rico Government Development Bank Revenue
Refunding Bonds Series 1985/(Credit Suisse LOC)
3.75%, 01/07/97 $5,000 $ 5,000
Schenectady, New York Industrial Development Agency
Revenue Bonds (Fortitech Holding Corp. Project)
Series A/(Fleet Bank of New York LOC)
4.30%, 01/07/97 1,500 1,500
St. Lawrence County, New York Industrial Development
Agency Environmental Improvement Revenue Bonds
(Reynolds Metals Project) Series 1995/(Royal Bank
of Canada LOC)
4.00%, 01/07/97 4,000 4,000
Town of Islip, New York Industrial Development
Revenue Bonds-MAGU Realty (Creative Bath
Products)/(Chase Manhattan Bank LOC)
4.00%, 01/07/97 3,990 3,990
Triborough Bridge & Tunnel Authority, New York
Special Obligation Bridge Revenue Bonds Series
1994/(FGIC Insurance & FGIC SPA)
3.95%, 01/07/97 9,000 9,000
Yonkers, New York Industrial Development Agency
Civic Facilities Revenue Bonds (Consumers Union
Facility Project) Series 1989/(IBJ LOC)
4.10%, 01/07/97 1,500 1,500
Yonkers, New York Industrial Development Agency
Civic Facilities Revenue Bonds (Consumers Union
Facility Project) Series 1991/(IBJ LOC)
4.10%, 01/07/97 700 700
-------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $220,296) 220,295
-------
BOND ANTICIPATION NOTES--9.36%(b)
Broome County, New York Bond Anticipation Notes
Series 1996-97
3.75%, 04/18/97 7,500 7,508
Dutchess County, New York Bond Anticipation Notes
Series 1996B
3.15%, 02/28/97 2,300 2,301
Monroe County, New York Bond Anticipation Notes
Series 1996-97
3.65%, 06/06/97 7,560 7,586
</TABLE>
97
<PAGE> 104
SCHWAB NEW YORK MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Rochester, New York General Obligation Bond
Anticipation Notes Series 1996-97
3.76%, 10/30/97 $14,000 $14,083
------
TOTAL BOND ANTICIPATION NOTES
(Cost $31,478) 31,478
------
TAX ANTICIPATION NOTES--7.06%(b)
Central Islip, New York Union Free School District
Tax Anticipation Notes Series 1996-97
4.05%, 06/30/97 7,000 7,015
New York City, New York Tax Anticipation Notes
Series 1996A
3.63%, 02/12/97 1,000 1,001
3.40%, 02/12/97 3,700 3,704
Plainview-Old Bethpage, New York College School
District Tax Anticipation Notes Series 1996-97
4.00%, 06/30/97 7,000 7,017
Suffolk County, New York Tax Anticipation Notes/
(National Westminster Bank PLC & Westdeutsche
Landesbanken LOC)
3.95%, 09/11/97 5,000 5,018
------
TOTAL TAX ANTICIPATION NOTES
(Cost $23,755) 23,755
------
REVENUE ANTICIPATION NOTES -- 4.74%(b)
Erie County, New York Revenue Anticipation Notes
Series 1996A/(Union Bank of Switzerland LOC)
3.60%, 04/17/97 2,500 2,505
Rockland County, New York Revenue Anticipation Notes
Series 1996
3.95%, 05/16/97 3,400 3,403
3.73%, 05/16/97 10,000 10,018
------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $15,926) 15,926
------
TAX-EXEMPT COMMERCIAL PAPER--3.54%(b)
New York City, New York General Obligation
Commerical Paper Fiscal 94 Series H Subseries H-3
3.55%, 02/19/97 1,500 1,500
</TABLE>
98
<PAGE> 105
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
New York City, New York Municipal Water Finance
Authority Tax-Exempt Commercial Paper/ (Credit
Suisse LOC)
3.70%, 01/15/97 $8,400 $ 8,400
New York State Power Authority Tax-Exempt Commercial
Paper
3.40%, 02/06/97 2,000 2,000
------
TOTAL TAX-EXEMPT COMMERCIAL PAPER
(Cost $11,900) 11,900
------
GENERAL OBLIGATIONS--2.74%(b)
Albany, New York Unlimited General Obligation Bonds
Series 1993/(AMBAC Insurance)
3.40%, 01/15/97 1,150 1,150
Monroe County, New York Unlimitied Tax Public
Improvement General Obligation Bonds
3.54%, 03/01/97 7,540 7,552
Williamsville, New York Consolidated School District
Unlimited General Obligation Bonds/(FSA Insurance)
3.70%, 05/01/97 500 503
------
TOTAL GENERAL OBLIGATIONS
(Cost $9,205) 9,205
------
VARIABLE RATE TENDER OPTION BOND PARTNERSHIPS--1.60%(a)(c)
New York State Dormitory Authority Revenue Bonds
(New York University) Tender Option Bond
Partnership (BTP-26)/(Automated Data Processing,Inc.
Tender Option & MBIA Insurance)
4.26%, 01/07/97 5,375 5,375
------
TOTAL VARIABLE RATE TENDER OPTION
BOND PARTNERSHIPS
(Cost $5,375) 5,375
------
TAX AND REVENUE ANTICIPATION NOTES--1.49%(b)
Puerto Rico Commonwealth Tax & Revenue Anticipation
Notes Series 1
3.43%, 07/30/97 5,000 5,016
-------
TOTAL TAX AND REVENUE ANTICIPATION NOTES
(Cost $5,016) 5,016
-------
</TABLE>
99
<PAGE> 106
SCHWAB NEW YORK MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
MANDATORY PUT BONDS--1.49%(b)
New York State Energy Research & Development
Agency Pollution Control Revenue Bonds
(Long Island Lighting Co. Project) Series 1985B/
(Deutsche Bank LOC)
3.25%, 03/01/97 $5,000 $ 5,000
-------
TOTAL MANDATORY PUT BONDS
(Cost $5,000) 5,000
-------
VARIABLE RATE TENDER OPTION BONDS--1.31%(a)
New York City, New York General Obligation Bonds
(Citi-1i)/(AMBAC Insurance, Escrowed to Maturity
with Government Securities & Citibank Tender
Option)
4.35%, 01/07/97 4,400 4,400
-------
TOTAL VARIABLE RATE TENDER OPTION BONDS
(Cost $4,400) 4,400
-------
REVENUE BONDS--1.18%(b)
New York State Dormitory Authority Revenue Bonds
Series A (City University)/(Escrowed to Maturity
with Government Securities)
3.55%, 07/01/97 1,800 1,877
New York State Medical Care Facilities Financing
Agency Revenue Bonds/(Escrowed to Maturity with
Government Securities)
3.40%, 08/15/97 2,000 2,105
-------
TOTAL REVENUE BONDS
(Cost $3,981) 3,982
-------
TOTAL INVESTMENTS--100%
(Cost $336,332) $336,332
=======
</TABLE>
100
<PAGE> 107
- ------------------------------------------------------------------------------
NOTES TO SCHEDULES OF INVESTMENTS
December 31, 1996
For each security, cost (for financial reporting and federal income tax
purposes) and carrying value are the same.
(a) Variable rate securities. Interest rates vary periodically based on current
market rates. Rates shown are the effective rates as of the report date.
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.
(b) Interest rates represent effective yield to put or call date at time of
purchase.
(c) Certain securities purchased by the Fund are private placement securities
exempt from registration by Section 4(2) of the Securities Act of 1933.
These securities generally are sold to institutional investors, such as the
Schwab Municipal Money Fund, Schwab California Municipal Money Fund, and
Schwab New York Municipal Money Fund. Any resale by the Funds must be in an
exempt transaction, normally to a qualified institutional buyer. At December
31, 1996, the aggregate values of private placement securities held by the
Schwab Municipal Money Fund, Schwab California Municipal Money Fund and
Schwab New York Municipal Money Fund were $133,276,000, $46,573,000 and
$5,375,000, respectively, which represented 2.98%, 2.00% and 1.59%,
respectively, of the net assets of each Fund. All of these private placement
investments were determined by the Investment Manager to be liquid in
accordance with procedures adopted by the Board of Trustees.
(d) Security traded on a delayed-delivery basis. Payment and delivery is
scheduled for a future time, generally within two weeks of entering into the
transaction. The transaction is subject to market fluctuation and to the
risk that the value may be more or less than the purchase price when the
transaction was initiated. The Fund has set aside sufficient investment
securities as collateral for securities purchased on a delayed-delivery
basis.
101
<PAGE> 108
- ------------------------------------------------------------------------------
NOTES TO SCHEDULES OF INVESTMENTS (continued)
December 31, 1996
<TABLE>
<CAPTION>
Abbreviations
-------------
<S> <C>
AMBAC AMBAC Indemnity Corporation
FGIC Financial Guaranty Insurance Company
FHLB Federal Home Loan Bank
FNB First National Bank
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
IBJ Industrial Bank of Japan
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
Corporation
N.R.U.-C.F.C. National Rural Utilities Cooperative
Financing Corporation
SBPA Standby Purchase Agreement
SLMA Student Loan Marketing Association
SPA Securities Purchase Agreement
</TABLE>
See accompanying Notes to Financial Statements.
102
<PAGE> 109
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (in thousands)
December 31, 1996
<TABLE>
<CAPTION>
Schwab Schwab
Schwab California New York
Municipal Municipal Municipal
Money Money Money
Fund Fund Fund
---------- ---------- ---------
<S> <C> <C> <C>
ASSETS
Investments, at value (Cost: $4,653,310,
$2,318,941 and $336,332, respectively) $4,653,310 $2,318,941 $336,332
Cash 170 123 31
Interest receivable 29,665 16,039 2,630
Receivable for Fund shares sold 9,889 3,866 1,107
Receivable from adviser -- -- 1
Deferred organization costs -- -- 18
Prepaid expenses 159 35 34
--------- --------- -------
Total assets 4,693,193 2,339,004 340,153
--------- --------- --------
LIABILITIES
Payable for:
Dividends 16,779 8,503 1,191
Investments purchased 194,494 1,300 --
Fund shares redeemed 3,931 5,065 1,545
Investment advisory and administration
fee 154 75 11
Transfer agency and shareholder service
fees 283 140 22
Other 553 323 89
--------- --------- --------
Total liabilities 216,194 15,406 2,858
--------- --------- --------
Net assets applicable to outstanding
shares $4,476,999 $2,323,598 $337,295
========= ========= ========
NET ASSETS CONSIST OF:
Paid-in-capital $4,479,324 $2,324,330 $337,310
Accumulated net realized loss on
investments sold (2,325) (732) (15)
--------- --------- --------
$4,476,999 $2,323,598 $337,295
========= ========= ========
PRICING OF SHARES
$0.00001 par value (unlimited shares
authorized)
Outstanding Sweep Shares 3,871,203 1,816,835 270,625
Outstanding Value Advantage Shares 608,121 507,495 66,685
--------- --------- --------
4,479,324 2,324,330 337,310
Net asset value, offering and
redemption price per each Sweep and
Value Advantage Share $1.00 $1.00 $1.00
</TABLE>
See accompanying Notes to Financial Statements.
103
<PAGE> 110
- ------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (in thousands)
Year ended December 31, 1996
<TABLE>
<CAPTION>
Schwab Schwab
Schwab California New York
Municipal Municipal Municipal
Money Money Money
Fund Fund Fund
--------- --------- ---------
<S> <C> <C> <C>
Interest income $142,454 $67,219 $9,105
--------- -------- -------
Expenses:
Investment advisory and administration
fee 16,768 8,556 1,231
Transfer agency and shareholder service
fees:
Sweep Shares 16,364 7,477 1,053
Value Advantage Shares 952 762 84
Custodian fees 447 308 165
Registration fees 549 281 108
Professional fees 83 59 35
Shareholder reports 248 121 68
Trustees' fees 22 13 7
Amortization of deferred organization
costs -- -- 6
Insurance and other expenses 76 36 6
--------- -------- -------
35,509 17,613 2,763
Less: expenses reduced and absorbed
(see Note 4) (9,796) (5,441) (997)
--------- -------- -------
Total expenses incurred by Fund 25,713 12,172 1,766
--------- -------- -------
Net investment income 116,741 55,047 7,339
Net realized loss on investments sold (477) (68) (9)
--------- -------- -------
Increase in net assets resulting from
operations $116,264 $54,979 $7,330
========= ======== =======
</TABLE>
See accompanying Notes to Financial Statements.
104
<PAGE> 111
- ------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
<TABLE>
<CAPTION>
Schwab Schwab
Schwab California New York
Municipal Municipal Municipal
Money Fund Money Fund Money Fund
------------------------- ------------------------ --------------------
Year ended December 31,
1996 1995 1996 1995 1996 1995*
------------ ----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 116,741 $ 105,737 $ 55,047 $ 45,734 $ 7,339 $ 5,167
Net realized gain
(loss) on
investments sold (477) (21) (68) 8 (9) (6)
------------ ----------- ----------- ----------- --------- ---------
Increase in net assets
resulting from
operations 116,264 105,716 54,979 45,742 7,330 5,161
------------ ----------- ----------- ----------- --------- ---------
Dividends to
shareholders from net
investment income:
Sweep Shares (104,911) (104,288) (45,951) (45,302) (6,338) (5,046)
Value Advantage
Shares (11,830) (1,449) (9,096) (432) (1,001) (121)
------------ ----------- ----------- ----------- --------- ---------
Total dividends to
shareholders (116,741) (105,737) (55,047) (45,734) (7,339) (5,167)
------------ ----------- ----------- ----------- --------- ---------
Capital share
transactions (at $1.00
per share):
Proceeds from shares
sold 13,705,095 10,148,323 6,230,933 4,383,313 979,381 692,976
Net asset value of
shares issued in
reinvestment of
dividends 112,199 100,567 52,112 43,226 6,854 4,181
Less payments for
shares redeemed (12,904,337) (9,700,301) (5,645,082) (4,034,727) (868,937) (477,145)
------------ ----------- ----------- ----------- --------- ---------
Increase in net assets
from capital share
transactions 912,957 548,589 637,963 391,812 117,298 220,012
------------ ----------- ----------- ----------- --------- ---------
Total increase in net
assets 912,480 548,568 637,895 391,820 117,289 220,006
Net assets:
Beginning of period 3,564,519 3,015,951 1,685,703 1,293,883 220,006 --
------------ ----------- ----------- ----------- --------- ---------
End of period $ 4,476,999 $ 3,564,519 $ 2,323,598 $ 1,685,703 $ 337,295 $ 220,006
============ =========== =========== =========== ========= =========
</TABLE>
- ---------------
* Period from February 27, 1995 (commencement of operations) to December 31,
1995.
See accompanying Notes to Financial Statements.
105
<PAGE> 112
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Year ended December 31, 1996
1. DESCRIPTION OF THE FUND
The Schwab Municipal Money Fund, Schwab California Municipal Money Fund and
Schwab New York Municipal Money Fund (the "Funds"), formerly known as the Schwab
Tax-Exempt Money Fund, Schwab California Tax-Exempt Money Fund, and Schwab New
York Tax-Exempt Money Fund, respectively, are series of The Charles Schwab
Family of Funds (the "Trust"), a no-load, open-end investment management company
organized as a Massachusetts business trust on October 20, 1989 and registered
under the Investment Company Act of 1940, as amended.
The Funds offer multiple classes of shares -- the Sweep Shares ("Sweep Shares")
and Value Advantage Shares ("Value Advantage Shares"). Both classes represent
interests in the same portfolio of investments of the respective Fund and are
substantially the same in all respects, except that the classes are subject to
different transfer agency and shareholder service fees (see Note 3), investment
minimums and certain other expenses.
In addition to the three Funds described above, the Trust also offers - the
Schwab Money Market Fund, Schwab Government Money Fund, Schwab U.S. Treasury
Money Fund, Schwab Value Advantage Money Fund(R), Schwab Institutional Advantage
Money Fund(R) and Schwab Retirement Money Fund(R). The assets of each series are
segregated and accounted for separately.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in conformity with generally
accepted accounting principles for investment companies. The preparation of
financial statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates.
Security valuation -- Investments are stated at amortized cost which
approximates market value.
Security transactions, interest income and realized gains (losses) -- Security
transactions are accounted for on a trade date basis (date the order to buy or
sell is executed). Interest income is accrued daily and includes amortization of
premium on investments. Realized gains and losses from security transactions are
determined on an identified cost basis. Income and realized gains (losses)
106
<PAGE> 113
- ------------------------------------------------------------------------------
are allocated daily to each class of shares of a Fund based on the value of
settled shares outstanding of each respective class.
Deferred organization costs -- Costs incurred in connection with the
organization of the Funds and their initial registration with the Securities and
Exchange Commission are amortized on a straight-line basis over a five-year
period from each Funds' commencement of operations.
Dividends to shareholders -- Each Fund declares a daily dividend, equal to its
net investment income for that day, payable monthly. Dividends paid by a Fund
with respect to each class of shares are calculated in the same manner, at the
same time, and will be in the same amount except for the effect of expenses that
may be applied differently, as described below.
Expenses -- Expenses arising in connection with a Fund are charged directly to
that Fund. Expenses common to all series of the Trust are generally allocated to
each series in proportion to their relative net assets. Expenses attributable to
both classes of shares of a Fund are allocated daily to each class of that Fund
based on the value of settled shares outstanding of each respective class.
Transfer agency, shareholder service fees and certain other expenses which are
class specific, are calculated daily at the class level.
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 of its net investment income and realized net capital gains, if
any, to 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, each Fund pays an annual fee, payable monthly, of 0.46% of
the first $1 billion of average daily net assets, 0.41% of the next $1 billion
and 0.40% of such assets in excess of $2 billion. The Investment Manager has
reduced a portion of its fee for the year ended December 31, 1996 (see Note 4).
Transfer agency and shareholder service agreements -- The Trust has transfer
agency and shareholder service agreements with Charles Schwab
107
<PAGE> 114
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Year ended December 31, 1996
& Co., Inc. ("Schwab"). For services provided under these agreements, Schwab
receives an annual fee, payable monthly, of 0.45% and 0.25% of each Fund's
average daily net assets of the Sweep Shares and Value Advantage Shares,
respectively. Schwab has reduced a portion of its fees for the year ended
December 31, 1996 (see Note 4).
Officers and trustees -- Certain officers and trustees of the Trust are also
officers and/or directors of the Investment Manager and/or Schwab. During the
year ended December 31, 1996, 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 Municipal Money Fund, Schwab
California Municipal Money Fund and Schwab New York Municipal Money Fund
incurred fees aggregating $42,000, related to the Trust's unaffiliated trustees.
4. EXPENSES REDUCED AND ABSORBED 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
year ended December 31, 1996, the total of such fees reduced and absorbed by the
Investment Manager were $8,734,000, $4,819,000 and $713,000 for the Schwab
Municipal Money Fund, Schwab California Municipal Money Fund and Schwab New York
Municipal Money Fund, respectively, and the total of such fees reduced by Schwab
were $1,062,000, $622,000 and $284,000 for the Schwab Municipal Money Fund,
Schwab California Municipal Money Fund and Schwab New York Municipal Money Fund,
respectively.
5. INVESTMENT TRANSACTIONS
Purchases, sales and maturities of investment securities during the year ended
December 31, 1996, were as follows (in thousands):
<TABLE>
<CAPTION>
Schwab Schwab
Schwab California New York
Municipal Municipal Municipal
Money Fund Money Fund Money Fund
---------- ---------- ----------
<S> <C> <C> <C>
Purchases $9,595,595 $4,771,910 $569,110
Proceeds of sales and maturities $8,526,966 $4,127,124 $451,579
</TABLE>
108
<PAGE> 115
- ------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS
Each Fund offers two classes of shares: Sweep Shares and Value Advantage Shares.
Shares of each class represent interests in the same portfolio of investments of
the Fund. Transactions in capital shares (at $1.00 per share) were as follows
for the year ended December 31, 1996 and for the period ended December 31, 1995,
(in thousands):
<TABLE>
<CAPTION>
Schwab Schwab
Schwab California New York
Municipal Municipal Municipal
Money Fund Money Fund Money Fund
------------------------- ------------------------ --------------------
1996 1995(1) 1996 1995(2) 1996 1995(3)
------------ ----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from shares sold:
Sweep Shares $ 12,710,212 $ 9,911,852 $ 5,448,674 $ 4,257,465 $ 868,824 $ 671,692
Value Advantage Shares 994,883 236,471 782,259 125,848 110,557 21,284
----------- ----------- ----------- --------- --------- ---------
Total 13,705,095 10,148,323 6,230,933 4,383,313 979,381 692,976
Net asset value of shares issued in
reinvestment of dividends:
Sweep Shares 102,508 99,813 44,907 43,152 6,081 4,126
Value Advantage Shares 9,691 754 7,205 74 773 55
----------- ----------- ----------- --------- --------- ---------
Total 112,199 100,567 52,112 43,226 6,854 4,181
Less payments for shares redeemed:
Sweep Shares (12,347,201) (9,623,759) (5,255,105) (4,016,813) (809,149) (470,949)
Value Advantage Shares (557,136) (76,542) (389,977) (17,914) (59,788) (6,196)
----------- ----------- ----------- --------- --------- ---------
Total (12,904,337) (9,700,301) (5,645,082) (4,034,727) (868,937) (477,145)
Total increase in net assets from
capital share transactions $ 912,957 $ 548,589 $ 637,963 $ 391,812 $ 117,298 $ 220,012
=========== =========== =========== ========= ========= =========
</TABLE>
- ---------------
(1) The Value Advantage Shares commenced operations on July 7, 1995.
(2) The Value Advantage Shares commenced operations on October 3, 1995.
(3) The Sweep Shares commenced operations on February 27, 1995 and the Value
Advantage Shares commenced operations on July 7, 1995.
109
<PAGE> 116
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Year ended December 31, 1996
7. FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
Schwab Municipal Money Fund-Sweep Shares
-----------------------------------------------
Year ended December 31,
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
<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 0.03 0.03 0.02 0.02 0.03
Net realized and unrealized gain
(loss) on investments -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total from investment
operations 0.03 0.03 0.02 0.02 0.03
Less distributions
- ------------------
Dividends from net investment
income (0.03) (0.03) (0.02) (0.02) (0.03)
Distributions from realized gain
on investments -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions (0.03) (0.03) (0.02) (0.02) (0.03)
---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return 2.92% 3.30% 2.32% 1.93% 2.49%
- ------------
Ratios/Supplemental data
- ------------------------
Net assets, end of period (000s) $3,868,919 $3,403,837 $3,015,951 $2,423,317 $1,744,903
Ratio of expenses to average net
assets+ 0.66% 0.66% 0.65% 0.63% 0.63%
Ratio of net investment income to
average net assets+ 2.89% 3.25% 2.31% 1.92% 2.45%
</TABLE>
- ---------------
+ The information contained in the above table is based on actual expenses for
the periods, after giving effect to the portion of expenses reduced and
absorbed by the Investment Manager and Schwab. Had these expenses not been
reduced and absorbed, the Fund's expense and net investment income ratios
would have been:
<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of expenses to average
net assets 0.90% 0.91% 0.91% 0.93% 0.94%
Ratio of net investment income
to average net assets 2.65% 3.00% 2.05% 1.62% 2.14%
</TABLE>
110
<PAGE> 117
- ------------------------------------------------------------------------------
7. FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Schwab
Municipal Money Fund
Value Advantage Shares
---------------------------
Year ended Period ended
December 31, December 31,
1996 1995(1)
------------ ------------
<S> <C> <C>
Net asset value at beginning of period $ 1.00 $ 1.00
Income from investment operations
- ---------------------------------
Net investment income 0.03 0.02
Net realized and unrealized gain (loss) on investments -- --
-------- --------
Total from investment operations 0.03 0.02
Less distributions
- ------------------
Dividends from net investment income (.03) (0.02)
Distributions from realized gain on investments -- --
-------- --------
Total distributions (.03) (0.02)
-------- --------
Net asset value at end of period $ 1.00 $ 1.00
======== ========
Total return (not annualized) 3.14% 1.68%
- ------------
Ratios/Supplemental data
- ------------------------
Net assets, end of period (000s) $608,080 $160,682
Ratio of expenses to average net assets+ 0.45% 0.45%*
Ratio of net investment income to average net assets+ 3.10% 3.50%*
</TABLE>
- ---------------
+ The information contained in the above table is based on actual expenses for
the periods, after giving effect to the portion of expenses reduced and
absorbed by the Investment Manager and Schwab. Had these expenses not been
reduced and absorbed, the Fund's expense and net investment income ratios
would have been:
<TABLE>
<S> <C> <C>
Ratio of expenses to average net assets 0.75% 0.95%*
Ratio of net investment income to average net assets 2.80% 3.00%*
</TABLE>
(1) Period from July 7, 1995 (commencement of operations) to December 31, 1995.
* Annualized
111
<PAGE> 118
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Year ended December 31, 1996
7. FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Schwab California Municipal Money Fund-Sweep Shares
------------------------------------------------------------
Year ended December 31,
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- --------
<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 0.03 0.03 0.02 0.02 0.02
Net realized and unrealized gain
(loss) on investments -- -- -- -- --
---------- ---------- ---------- ---------- --------
Total from investment operations 0.03 0.03 0.02 0.02 0.02
Less distributions
- ------------------
Dividends from net investment
income (0.03) (0.03) (0.02) (0.02) (0.02)
Distributions from realized gain
on investments -- -- -- -- --
---------- ---------- ---------- ---------- --------
Total distributions (0.03) (0.03) (0.02) (0.02) (0.02)
---------- ---------- ---------- ---------- --------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========
Total return 2.80% 3.20% 2.26% 1.91% 2.35%
- ------------
Ratios/Supplemental data
- ------------------------
Net assets, end of period (000s) $1,816,112 $1,577,695 $1,293,883 $1,062,042 $691,176
Ratio of expenses to average net
assets+ 0.65% 0.65% 0.64% 0.63% 0.63%
Ratio of net investment income to
average net assets+ 2.77% 3.15% 2.25% 1.89% 2.31%
</TABLE>
- ---------------
+ The information contained in the above table is based on actual expenses for
the periods, after giving effect to the portion of expenses reduced and
absorbed by the Investment Manager and Schwab. Had these expenses not been
reduced and absorbed, the Fund's expense and net investment income ratios
would have been:
<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of expenses to
average net assets 0.92% 0.94% 0.94% 0.96% 0.97%
Ratio of net investment income
to average net assets 2.50% 2.86% 1.95% 1.56% 1.97%
</TABLE>
112
<PAGE> 119
- ------------------------------------------------------------------------------
7. FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Schwab California Municipal
Money Fund
Value Advantage Shares
-----------------------------
Year ended Period ended
December 31, December 31,
1996 1995(1)
------------ ------------
<S> <C> <C>
Net asset value at beginning of period $ 1.00 $ 1.00
Income from investment operations
- ---------------------------------
Net investment income 0.03 0.01
Net realized and unrealized gain (loss) on investments -- --
-------- --------
Total from investment operations 0.03 0.01
Less distributions
- ------------------
Dividends from net investment income (0.03) (0.01)
Distributions from realized gain on investments -- --
-------- --------
Total distributions (0.03) (0.01)
-------- --------
Net asset value at end of period $ 1.00 $ 1.00
======== ========
Total return (not annualized) 3.01% 0.84%
- ------------
Ratios/Supplemental data
- ------------------------
Net assets, end of period (000s) $507,486 $108,008
Ratio of expenses to average net assets+ 0.45% 0.45%*
Ratio of net investment income to average net assets+ 2.98% 3.48%*
</TABLE>
- ---------------
+ The information contained in the above table is based on actual expenses for
the periods, after giving effect to the portion of expenses reduced and
absorbed by the Investment Manager and Schwab. Had these expenses not been
reduced and absorbed, the Fund's expense and net investment income ratios
would have been:
<TABLE>
<S> <C> <C>
Ratio of expenses to average net assets 0.77% 1.04%*
Ratio of net investment income to average net assets 2.66% 2.89%*
</TABLE>
(1) Period from October 3, 1995 (commencement of operations) to December 31,
1995.
* Annualized
113
<PAGE> 120
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Year ended December 31, 1996
7. FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
New York Municipal Money Fund
Sweep Shares Value Advantage Shares
-------------------------- --------------------------
Year Period Year Period
ended ended ended ended
December 31, December 31, December 31, December 31,
1996 1995(1) 1996 1995(2)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
- ---------------------------------
Net investment income 0.03 0.03 0.03 0.02
Net realized and unrealized gain
(loss) on investments -- -- -- --
-------- -------- ------- -------
Total from investment operations 0.03 0.03 0.03 0.02
Less distributions
- ------------------
Dividends from net investment income (0.03) (0.03) (0.03) (0.02)
Distributions from realized gain on
investments -- -- -- --
-------- -------- ------- -------
Total distributions (0.03) (0.03) (0.03) (0.02)
-------- -------- ------- -------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======= =======
Total return (not annualized) 2.74% 2.75% 2.99% 1.62%
- ------------
Ratios/Supplemental data
- ------------------------
Net assets, end of period (000s) $270,612 $204,863 $ 66,683 $ 15,143
Ratio of expenses to average net
assets+ 0.69% 0.63%* 0.45% 0.45%*
Ratio of net investment income to
average net assets+ 2.71% 3.20%* 2.98% 3.42%*
</TABLE>
- ---------------
+ The information contained in the above table is based on actual expenses for
the periods, after giving effect to the portion of expenses reduced and
absorbed by the Investment Manager and Schwab. Had these expenses not been
reduced and absorbed, the Fund's expense and net investment income ratios
would have been:
<TABLE>
<S> <C> <C> <C> <C>
Ratio of expenses to average net
assets 1.04% 1.04%* 1.01% 1.81%*
Ratio of net investment income to
average net assets 2.36% 2.79%* 2.42% 2.06%*
</TABLE>
(1) Period from February 27, 1995 (commencement of operations) to December 31,
1995.
(2) Period from July 7, 1995 (commencement of operations) to December 31, 1995.
* Annualized
114
<PAGE> 121
- ------------------------------------------------------------------------------
To the Board of Trustees and Shareholders
of the Schwab Municipal Money Fund,
Schwab California Municipal Money Fund,
and Schwab New York Municipal Money Fund
(Formerly known as Schwab Tax-Exempt Money Fund,
Schwab California Tax-Exempt Money Fund,
and Schwab New York Tax-Exempt Money Fund)
In our opinion, the accompanying statements of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Schwab Municipal Money Fund,
Schwab California Municipal Money Fund, and Schwab New York Municipal Money Fund
(three series constituting part of The Charles Schwab Family of Funds, hereafter
referred to as the "Trust") at December 31, 1996, the results of each of their
operations for the year then ended, the changes in each of their net assets and
the financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1996 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
San Francisco, California
January 31, 1997
115
<PAGE> 122
SCHWAB MUNICIPAL MONEY FUND
(Formerly Schwab Tax-Exempt Money Fund)
- ------------------------------------------------------------------------------
PROXY VOTING RESULTS
A special meeting of the shareholders of Schwab Municipal Money Fund Sweep and
Value Advantage Shares was held on December 16, 1996. The results of votes taken
among shareholders on proposals before them are listed below.
PROPOSAL 1
Election of Trustees.
<TABLE>
<CAPTION>
Number of Number of
Shares Voted For Shares Withheld
---------------- ---------------
<S> <C> <C>
Charles R. Schwab 2,177,586,545 68,868,932
Donald F. Dorward 2,175,977,763 70,477,714
Robert G. Holmes 2,176,986,628 69,468,849
William J. Klipp 2,177,033,619 69,421,858
Timothy F. McCarthy 2,178,397,232 68,058,245
Donald R. Stephens 2,178,457,737 67,997,740
Michael W. Wilsey 2,177,900,523 68,554,954
</TABLE>
PROPOSAL 2
To approve amending the Fund's investment policy concerning Alternative Minimum
Tax (AMT) investments.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
--------------------- ---------------------
<S> <C> <C>
For 1,882,452,437 83.80%
Against 210,979,970 9.39%
Abstain 153,023,066 6.81%
------------------ --------------
TOTAL 2,246,455,473 100.00%
================== ==============
</TABLE>
PROPOSAL 3.1
To approve changes to restrictions regarding borrowing and lending.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
--------------------- ---------------------
<S> <C> <C>
For 1,856,614,183 82.65%
Against 243,842,343 10.85%
Abstain 145,998,947 6.50%
------------------ --------------
TOTAL 2,246,455,473 100.00%
================== ==============
</TABLE>
116
<PAGE> 123
- ------------------------------------------------------------------------------
PROPOSAL 3.2
To approve changes to restrictions regarding issuance of senior securities.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
--------------------- ---------------------
<S> <C> <C>
For 1,858,198,226 82.72%
Against 241,828,457 10.76%
Abstain 146,428,790 6.52%
------------------ --------------
TOTAL 2,246,455,473 100.00%
================== ==============
</TABLE>
PROPOSAL 3.3
To approve change in restriction regarding compliance with the diversification
requirements of the 1940 Act.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
--------------------- ---------------------
<S> <C> <C>
For 1,871,120,255 83.29%
Against 227,582,153 10.13%
Abstain 147,753,065 6.58%
------------------ --------------
TOTAL 2,246,455,473 100.00%
================== ==============
</TABLE>
PROPOSAL 3.4
To approve change in restriction regarding investment in Industrial Development
Revenue Bonds issued by "unseasoned issuers".
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
--------------------- ---------------------
<S> <C> <C>
For 1,851,480,835 82.42%
Against 248,281,611 11.05%
Abstain 146,693,027 6.53%
------------------ --------------
TOTAL 2,246,455,473 100.00%
================== ==============
</TABLE>
PROPOSAL 3.5
To approve change in restriction regarding investment in "restricted
securities".
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
--------------------- ---------------------
<S> <C> <C>
For 1,856,080,332 82.62%
Against 243,484,598 10.84%
Abstain 146,890,543 6.54%
------------------ --------------
TOTAL 2,246,455,473 100.00%
================== ==============
</TABLE>
117
<PAGE> 124
SCHWAB MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
PROXY VOTING RESULTS (CONTINUED)
PROPOSAL 3.6
To approve change in restriction regarding investment in shares of other
investment companies.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
--------------------- ---------------------
<S> <C> <C>
For 1,867,452,496 83.13%
Against 232,233,285 10.34%
Abstain 146,769,692 6.53%
------------------ --------------
TOTAL 2,246,455,473 100.00%
================== ==============
</TABLE>
118
<PAGE> 125
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
(Formerly Schwab California Tax-Exempt Money Fund)
- ------------------------------------------------------------------------------
PROXY VOTING RESULTS
A special meeting of the shareholders of Schwab California Municipal Money Fund
Sweep and Value Advantage Shares was held on December 16, 1996. The results of
votes taken among shareholders on proposals before them are listed below.
PROPOSAL 1
Election of Trustees.
<TABLE>
<CAPTION>
Number of Shares Number of Shares
Voted For Withheld
---------------- ----------------
<S> <C> <C>
Charles R. Schwab 1,117,833,856 24,774,762
Donald F. Dorward 1,115,917,801 26,690,817
Robert G. Holmes 1,117,695,234 24,913,384
William J. Klipp 1,117,376,286 25,232,332
Timothy F. McCarthy 1,118,021,341 24,587,277
Donald R. Stephens 1,116,076,117 26,532,501
Michael W. Wilsey 1,117,525,654 25,082,964
</TABLE>
PROPOSAL 2
To approve amending the Fund's investment policy concerning Alternative Minimum
Tax (AMT) investments.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- -----------------
<S> <C> <C>
For 951,118,434 83.64%
Against 115,120,734 10.12%
Abstain 70,985,232 6.24%
--------------- -------------
TOTAL 1,137,224,400 100.00%
=============== =============
</TABLE>
PROPOSAL 3.1
To approve changes to restrictions regarding borrowing and lending.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- -----------------
<S> <C> <C>
For 959,573,172 84.38%
Against 113,925,393 10.02%
Abstain 63,725,835 5.60%
--------------- -------------
TOTAL 1,137,224,400 100.00%
=============== =============
</TABLE>
119
<PAGE> 126
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
PROXY VOTING RESULTS (CONTINUED)
PROPOSAL 3.2
To approve changes to restrictions regarding issuance of senior securities.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- -----------------
<S> <C> <C>
For 959,107,955 84.34%
Against 113,986,177 10.02%
Abstain 64,130,268 5.64%
--------------- -------------
TOTAL 1,137,224,400 100.00%
=============== =============
</TABLE>
PROPOSAL 3.3
To approve change in restriction regarding compliance with the diversification
requirements of the 1940 Act.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- -----------------
<S> <C> <C>
For 961,380,055 84.54%
Against 112,774,393 9.92%
Abstain 63,069,952 5.54%
--------------- -------------
TOTAL 1,137,224,400 100.00%
=============== =============
</TABLE>
PROPOSAL 3.4
To approve change in restriction regarding investment in Industrial Development
Revenue Bonds issued by "unseasoned issuers".
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- -----------------
<S> <C> <C>
For 951,593,068 83.68%
Against 122,342,136 10.76%
Abstain 63,289,196 5.56%
--------------- -------------
TOTAL 1,137,224,400 100.00%
=============== =============
</TABLE>
PROPOSAL 3.5
To approve change in restriction regarding investment in "restricted
securities".
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- -----------------
<S> <C> <C>
For 951,477,529 83.67%
Against 122,266,670 10.75%
Abstain 63,480,201 5.58%
--------------- -------------
TOTAL 1,137,224,400 100.00%
=============== =============
</TABLE>
120
<PAGE> 127
- ------------------------------------------------------------------------------
PROPOSAL 3.6
To approve change in restriction regarding investment in shares of other
investment companies.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- -----------------
<S> <C> <C>
For 958,478,343 84.28%
Against 115,602,114 10.17%
Abstain 63,143,943 5.55%
--------------- -------------
TOTAL 1,137,224,400 100.00%
=============== =============
</TABLE>
121
<PAGE> 128
SCHWAB NEW YORK MUNICIPAL MONEY FUND
(Formerly Schwab New York Tax-Exempt Money Fund)
- ------------------------------------------------------------------------------
PROXY VOTING RESULTS
A special meeting of the shareholders of Schwab New York Municipal Money Fund
Sweep and Value Advantage Shares was held on December 16, 1996. The results of
votes taken among the shareholders on proposals before them are listed below.
PROPOSAL 1
Election of Trustees.
<TABLE>
<CAPTION>
Number of Shares Number of Shares
Voted For Withheld
---------------------- ----------------
<S> <C> <C>
Charles R. Schwab 143,348,721 5,043,463
Donald F. Dorward 143,532,424 4,859,760
Robert G. Holmes 143,550,667 4,841,517
William J. Klipp 143,527,494 4,864,690
Timothy F. McCarthy 143,580,313 4,811,871
Donald R. Stephens 143,440,094 4,952,090
Michael W. Wilsey 143,565,782 4,826,402
</TABLE>
PROPOSAL 2
To approve amending the Fund's investment policy concerning Alternative Minimum
Tax (AMT) investments.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- --------------------
<S> <C> <C>
For 117,842,559 79.41%
Against 18,185,613 12.26%
Abstain 12,364,011 8.33%
-------------- -------------
TOTAL 148,392,183 100.00%
============== =============
</TABLE>
PROPOSAL 3.1
To approve changes to restrictions regarding borrowing and lending.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- --------------------
<S> <C> <C>
For 119,758,417 80.70%
Against 17,595,997 11.86%
Abstain 11,037,769 7.44%
-------------- ------------
TOTAL 148,392,183 100.00%
============== ============
</TABLE>
122
<PAGE> 129
- ------------------------------------------------------------------------------
PROPOSAL 3.2
To approve changes to restrictions regarding issuance of senior securities.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- --------------------
<S> <C> <C>
For 119,425,228 80.48%
Against 17,748,733 11.96%
Abstain 11,218,222 7.56%
-------------- ------
TOTAL 148,392,183 100.00%
============== ======
</TABLE>
PROPOSAL 3.3
To approve change in restriction regarding compliance with the diversification
requirements of the 1940 Act.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- --------------------
<S> <C> <C>
For 120,715,980 81.35%
Against 16,628,460 11.21%
Abstain 11,047,743 7.44%
-------------- ------
TOTAL 148,392,183 100.00%
============== ======
</TABLE>
PROPOSAL 3.4
To approve change in restriction regarding investment in Industrial Development
Revenue Bonds issued by "unseasoned issuers".
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- --------------------
<S> <C> <C>
For 119,144,669 80.29%
Against 18,196,349 12.26%
Abstain 11,051,165 7.45%
-------------- ------
TOTAL 148,392,183 100.00%
============== ======
</TABLE>
PROPOSAL 3.5
To approve change in restriction regarding investment in "restricted
securities".
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- --------------------
<S> <C> <C>
For 119,550,717 80.56%
Against 17,572,817 11.84%
Abstain 11,268,649 7.60%
-------------- ------
TOTAL 148,392,183 100.00%
============== ======
</TABLE>
123
<PAGE> 130
SCHWAB NEW YORK MUNICIPAL MONEY FUND
- ------------------------------------------------------------------------------
PROXY VOTING RESULTS (CONTINUED)
PROPOSAL 3.6
To approve change in restriction regarding investment in shares of other
investment companies.
<TABLE>
<CAPTION>
# of Shares Voted % of Shares Voted
----------------- --------------------
<S> <C> <C>
For 120,044,066 80.90%
Against 17,072,338 11.50%
Abstain 11,275,779 7.60%
-------------- ------
TOTAL 148,392,183 100.00%
============== ======
</TABLE>
124
<PAGE> 131
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE> 132
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE> 133
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE> 134
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE> 135
SCHWABFUNDS FAMILY(R)
The SchwabFunds Family includes a variety of funds to help meet your investment
needs. You can diversify your portfolio in a single step with our asset
allocation funds. Or you can customize your portfolio with a combination of our
stock funds as well as our taxable and tax-advantaged bond and money funds.
SCHWAB ASSET ALLOCATION FUNDS
Schwab Asset Director(R) -- High Growth Fund
Schwab Asset Director -- Balanced Growth Fund
Schwab Asset Director -- Conservative Growth Fund
Schwab OneSource Portfolios -- Growth Allocation
Schwab OneSource Portfolios -- Balanced Allocation
SCHWAB STOCK FUNDS
Schwab 1000 Fund(R)
Schwab S&P 500 Fund
Schwab Analytics Fund(TM)
Schwab Small-Cap Index Fund(R)
Schwab International Index Fund(R)
Schwab OneSource Portfolios -- International
SCHWAB BOND FUNDS
Schwab Government Bond Funds -- Long-Term
and Short/Intermediate
Schwab Tax-Free Bond Funds -- Long-Term and Short/Intermediate
Schwab California Tax-Free Bond Funds -- Long-Term
and Short/Intermediate
SCHWAB MONEY MARKET FUNDS
Schwab offers an array of money market funds* that seek high current income with
safety and liquidity. Choose from taxable or tax-advantaged alternatives. Many
can be linked to your Schwab account to "sweep" cash balances automatically when
you're between investments. Or, for your larger cash reserves, choose one of our
Value Advantage Investments(R).
Please call 1-800-2 NO-LOAD for a free prospectus and brochure for any of the
SchwabFunds(R).
Each prospectus provides more complete information, including charges and
expenses. Please read it carefully before investing.
This report must be preceded or accompanied by a current prospectus.
* Investments in money market funds are neither insured nor guaranteed by the
U.S. government, and there is no assurance that the funds will be able to
maintain a stable share price of $1.
<PAGE> 136
SCHWABFUNDS ==============
FAMILY [LOGO] (R) BULK RATE
U.S. POSTAGE
101 Montgomery Street PAID
San Francisco, California 94104 CHARLES SCHWAB
==============
INVESTMENT ADVISOR
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.
(C)1997 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
TF4504R(2/97) CRS 11011 Printed on recycled paper.
