SchwabFunds-Registered Trademark-
Schwab
Municipal Money Funds
- - Schwab Municipal Money Fund
- - Schwab California
Municipal Money Fund
- - Schwab New York
Municipal Money Fund
- - Schwab New Jersey
Municipal Money Fund
- - Schwab Pennsylvania
Municipal Money Fund
- - Schwab Florida
Municipal Money Fund
Annual Report
December 31, 1998
<PAGE>
SCHWAB MUNICIPAL MONEY FUNDS
We're pleased to bring you this annual report for the following funds (the
Funds) for the period ended December 31, 1998:
Schwab Municipal Money Fund
Schwab California Municipal Money Fund
Schwab New York Municipal Money Fund
Schwab New Jersey Municipal Money Fund
Schwab Pennsylvania Municipal Money Fund
Schwab Florida Municipal Money Fund
During the reporting period, the Funds continued to provide competitive money
market returns, combined with capital stability and liquidity.(1) Please
remember that an investment in the Funds is neither insured nor guaranteed by
the Federal Deposit Insurance Corporation (FDIC) or any other government
agency and, although the Funds seek to preserve the value of your investment at
$1 per share, it is possible to lose money investing in the Funds.
Three of the Funds--the Schwab Municipal Money Fund, the Schwab California
Municipal Money Fund and the Schwab New York Municipal Money Fund offer two
classes of shares--Sweep Shares-TM- and Value Advantage Shares,-TM- both of
which are presented in this report. These two classes were designed for
different purposes, as explained on page 3. Depending on your cash needs and
investment profile, either or both classes of the Funds may have a place in your
investment plan.
CONTENTS
<TABLE>
<S> <C>
- -----------------------------------------------------
A Message from the Chairman 1
- -----------------------------------------------------
What Money Fund Investors Should Know 2
- -----------------------------------------------------
Market Overview 4
- -----------------------------------------------------
Portfolio Management 8
- -----------------------------------------------------
Schwab Municipal Money Fund 9
- -----------------------------------------------------
Schwab California Municipal Money Fund 10
- -----------------------------------------------------
Schwab New York Municipal Money Fund 11
- -----------------------------------------------------
Schwab New Jersey Municipal Money Fund 12
- -----------------------------------------------------
Schwab Pennsylvania Municipal Money Fund 13
- -----------------------------------------------------
Schwab Florida Municipal Money Fund 14
- -----------------------------------------------------
Fund Discussion 15
- -----------------------------------------------------
Glossary of Terms 19
- -----------------------------------------------------
Portfolio Highlights 20
- -----------------------------------------------------
Financial Statements and Notes 23
- -----------------------------------------------------
</TABLE>
(1)Income may be subject to the federal alternative minimum tax (AMT), and
income from the Schwab Municipal Money Fund may be subject to state and local
income taxes.
<PAGE>
A MESSAGE FROM THE CHAIRMAN
Dear Shareholder,
[PHOTO]
The past year was an eventful one for U.S. financial markets. As 1998 unfolded,
investors reacted nervously to heightening tension in the Middle East,
controversy in the White House and concern that an escalation in Asia's
financial troubles might negatively affect U.S. companies' earnings growth. But,
after a shaky start, positive economic news helped the markets regain their
footing.
Investor confidence remained unshaken throughout the early part of the year
until merger talks, conflicting economic news, concern about the dollar-yen
relationship and speculation about a possible tightening move by the Federal
Reserve caused increased volatility in domestic markets. Likewise, a combination
of factors-- including worries about possible currency devaluations, the
downgrading of several large Japanese banks, continued social and economic
unrest in Indonesia and a budding nuclear arms race between Pakistan and India--
sent foreign markets reeling. This continued turmoil both at home and abroad
caused some investors to flee all but the safest, most liquid investments, such
as money market funds and U.S. Treasuries.
This volatility eased somewhat, helped in large part by record low bond yields
and an absence of fresh bad news out of Asia. The U.S. stock market enjoyed
impressive gains and several stock market indices passed major milestones. Then,
in July, a reversal of fortune, triggered by speculation that Asia's economic
problems might be deeper and longer lasting than previously expected, caused
markets to plunge. Markets continued to tumble as global economic woes
continued, domestic economic growth slowed and corporate profits showed their
first year-over-year decline in nearly a decade. Worried that worldwide economic
turmoil might trigger a further slowdown in U.S. growth and a drop in corporate
profitability, investors moved out of U.S. stocks in droves.
As the year wound down, however, financial markets rebounded from steep summer
losses, boosted by positive economic news, low bond yields, a flurry of major
merger announcements and a spate of interest rate cuts both at home and abroad.
And, in the end, most U.S. financial markets rounded out a volatile 1998 with
big gains.
No one can predict what might happen to markets in the future. That's why,
regardless of short-term market trends, our philosophy has always been that
REGULAR INVESTING is the best strategy over the long term. Because money funds
can play an important role in your asset allocation plan, we've included some
guidelines in the following pages about what to look for in a money market fund.
You might find that more than one kind of money fund may be appropriate for you,
depending on your goals and financial situation.
Once again, thank you for your investment in SchwabFunds. We continue to do
everything we can to warrant the trust you have placed in us and we recognize
that the support of investors like you has helped Charles Schwab Investment
Management, Inc. (CSIM) become one of the largest and fastest-growing mutual
fund families in the nation. CSIM now manages more than $80 billion in assets on
behalf of more than 3.4 million SchwabFunds-Registered Trademark- shareholders.
Please contact us toll free at 800-435-4000 with your questions or comments. As
always, we look forward to serving your investment needs.
Sincerely,
/s/ Charles R. Schwab
Charles R. Schwab
1
<PAGE>
WHAT MONEY FUND INVESTORS SHOULD KNOW
WHY ASSET ALLOCATION MATTERS
As most investors know, one of the most compelling reasons to invest in a mutual
fund is diversification. By allocating your assets across many different
securities, a fund helps to reduce the risk that you might otherwise encounter
by owning just a few stocks or bonds.
Don't forget, however, that diversification across your portfolio is just as
important as diversification within one of the mutual funds you own. As you
probably know, stocks historically have offered much higher returns over the
long term than other asset classes, such as bonds or cash, but those returns
have come at the price of higher volatility. To help mitigate some of that risk,
many investors often include at least some bonds and cash in their portfolio.
CHOOSING A MONEY MARKET FUND
Some investors may believe that there is no good reason to shop around for a
money market fund. This may be partially due to the fact that 20 years ago
practically the only feature that differentiated one money market fund from
another was whether it allowed investors to write checks against it. Things have
changed since then, and today investors can choose from a wide variety of
options and features offered by the more than 1,000 money market funds currently
available.(1)
You can help assure that you've chosen the right money market fund by
considering the role it will play in your investment portfolio. Here are some
factors to consider when making or reviewing your money market fund choice.
EXPENSES: Because expenses are one of the key determining factors in a money
market fund's performance, investors are wise to seek out funds with low
operating expense ratios. Also, beware of those that have temporary expense
waivers that waive expenses to zero, because expenses can't stay at zero
forever, and fees will undoubtedly eventually rise.
Also consider 12b-1 fees, which some money market funds include in their expense
ratios to pay for marketing costs. These fees can reduce yield, in some cases by
a full percentage point. A recent survey by a money market trade publication
found that more than 40% of taxable money market funds available to individual
investors charge these fees. When comparing money market fund choices, you may
want to avoid funds that carry these unnecessary fees.
YIELDS: Look for competitive yields, but don't stop there. Many institutions
advertise their money market funds on the basis of yield.(2) Although getting a
competitive yield is important, other features, such as how you access your
investment, also are important considerations. Furthermore, stretching for an
additional 10 or 20 basis points in yield (0.10% to 0.20%) may not be worth the
time, effort or added risk. For example, a $10,000 investment in a money fund
that yields 0.10% more amounts to only an additional $10 over a one-year period.
SWEEP FEATURES: If you're looking for a convenient way to link your money market
fund with your account, consider an account that has a "sweep" feature. Accounts
with this feature automatically "sweep" uninvested cash balances into the fund
you select as your primary money fund. The upshot: It keeps cash working. In
addition, shares of your fund will be redeemed automatically to cover investment
purchases and other debits. This convenience may be well worth the small
additional cost.
LARGER CASH BALANCES: You may earn a higher yield for larger cash balances. If
you don't need frequent access to the money in your money market fund, consider
one designed to pay higher yields for larger cash balances. Because the
investment balance requirements are higher, these money market funds normally
incur lower operating expenses and, therefore, may be able to post higher
yields, all else being equal.
TAXES: Don't forget to consider your tax situation. If you're in a high
tax-bracket, investing in tax-free or municipal money market funds may help take
a bite out of your tax bill.(3) And, if you live in a state with a high personal
state income tax, you may be best served by choosing a state-specific tax-free
fund that provides income free from federal, state and, in some cases, local
income taxes.(3)
(1)An investment in a money market fund is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency and,
although they seek to preserve the value of your investment at $1 per share,
it is possible to lose money.
(2)Yields may vary.
(3)This may not be true for investors subject to the federal alternative minimum
tax (AMT); consult your tax advisor.
2
<PAGE>
MONEY FUNDS AT SCHWAB
Schwab offers two types of money funds--Sweep Shares-TM- and Value Advantage
Investments-Registered Trademark---both of which offer taxable and
tax-advantaged alternatives. Depending on the role that cash and cash-equivalent
investments play in your investment plan, either or both may have a place in
your investment plan.
SWEEP SHARES are designed for cash balances requiring frequent access, such as
your short-term and even daily cash needs. These shares can be linked to your
Schwab account and contain a feature that automatically "sweeps" uninvested cash
balances into the Sweep Shares of the fund you designate, according to the terms
and conditions of your Schwab account. Sweep Shares also may be used to settle
trades and automatically cover other day-to-day transactions, such as margin
calls.
VALUE ADVANTAGE INVESTMENTS are designed to serve as longer-term money market
investment vehicles for larger balances that do not require frequent access.
These funds may help fill the cash-equivalent sector in your asset allocation
plan. With higher minimum investment and balance requirements and other
transaction restrictions designed to minimize fund operating expenses, Value
Advantage Investments can offer potentially higher yields to investors. It is
important to note that, unlike Sweep Shares, Value Advantage Investments are not
designed to automatically cover negative balances in your Schwab account.
MONEY FUNDS
Schwab offers the following money funds. If you are selecting from among them,
you should consider your attitude toward risk and return, as well as your income
tax bracket.
SCHWAB MONEY MARKET FUND invests in high-quality money market securities,
including commercial paper, certificates of deposit and repurchase agreements.
SCHWAB GOVERNMENT MONEY FUND invests exclusively in obligations issued or
guaranteed by the U.S. government or its agencies and instrumentalities and
repurchase agreements.
SCHWAB U.S. TREASURY MONEY FUND invests exclusively in U.S. Treasury notes,
bills and other direct obligations of the U.S. government and pays income
typically free from state and local taxes.
TAX-ADVANTAGED MONEY FUNDS
The Schwab Municipal Money Funds may provide you with higher returns after
taxes, especially if you're in a high tax bracket.(4) The Schwab Municipal Money
Fund--Sweep Shares-TM- invests in municipal obligations that generate income
free from federal income tax. And for investors in California, New York, New
Jersey, Pennsylvania and Florida, Schwab offers Sweep Shares that seek to
provide income free from state and, in some instances, local taxes. Consult your
tax advisor for specific guidance on your tax situation before investing.
If you would like more information on any of these funds, please call us toll
free at 800-435-4000 and request a free prospectus that contains more
information, including fees and expenses. Please read the prospectus before
investing.
WE MAKE IT EASY TO INVEST
We try to make it easy and convenient for you to invest in
SchwabFunds.-Registered Trademark- In addition to automated methods that allow
you to invest or transfer money to your Schwab account on a regular basis, you
also can invest in person at any of our nationwide branches, through our Web
site at WWW.SCHWAB.COM and through our automated touch-tone telephone service,
TeleBroker,-Registered Trademark- by calling 800-272-4922.
(4)Income from all of the Funds may be subject to the federal alternative
minimum tax (AMT), and income from the Schwab Municipal Money Fund may be
subject to state and local taxes.
KEEPING YOU INFORMED
One of our top priorities at Charles Schwab is to keep you informed about your
investments and potential opportunities in the marketplace. A wealth of
information about our investment philosophy and funds, as well as the market
and economic environment, can be found at our Web site:
WWW.SCHWAB.COM/SCHWABFUNDS
3
<PAGE>
MARKET OVERVIEW
U.S. ECONOMIC GROWTH
The U.S. economy, as measured by gross domestic product (GDP), continued to grow
at a strong real rate of 3.9% during 1998--in excess of the Federal Reserve's
target range of 3.00% to 3.25%. Hurt by the Asian economic crisis and declining
exports, the growth rate slowed from 5.5% in the first quarter to 1.8% in the
second quarter. Strong consumer spending--which represents about two-thirds of
economic activity--helped the growth rate rebound to 3.7% and 5.6% during the
third and fourth quarters, respectively.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REAL GDP GROWTH RATE
QUARTERLY PERCENTAGE CHANGE
(ANNUALIZED RATE)
<S> <C>
Q1 1990 3.9%
Q2 1990 1.2%
Q3 1990 -1.9%
Q4 1990 -4.0%
Q1 1991 -2.1%
Q2 1991 1.8%
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 2.0%
Q3 1993 2.1%
Q4 1993 5.3%
Q1 1994 3.0%
Q2 1994 4.7%
Q3 1994 1.8%
Q4 1994 3.6%
Q1 1995 1.7%
Q2 1995 0.4%
Q3 1995 3.3%
Q4 1995 2.8%
Q1 1996 3.3%
Q2 1996 6.1%
Q3 1996 2.1%
Q4 1996 4.2%
Q1 1997 4.2%
Q2 1997 4.0%
Q3 1997 4.2%
Q4 1997 3.0%
Q1 1998 5.5%
Q2 1998 1.8%
Q3 1998 3.7%
Q4 1998 5.6%
Source: BLOOMBERG L.P.
</TABLE>
At the time of this writing, the consensus of most economists is that the U.S.
economy appears poised for continued growth, but at a more moderate rate than
during 1998. High levels of consumer confidence, low interest rates, rising real
wages and strong gains in stock prices have been the principal factors fueling
this lengthy expansion. Uncertainties persist, however, as to the ultimate
effect international economic problems will have on the U.S. economy,
particularly on corporate earnings. Going forward, the behavior of domestic
consumers in response to recent stock market volatility also may be a key
determinant of whether the economy continues on its current course or softens in
1999.
UNEMPLOYMENT
In December, unemployment stood at 4.3%--its lowest level in 28 years. Labor
markets have become extremely tight, growth in the labor force has slowed, and
wage increases are beginning to put more pressure on labor costs. (Refer to
Employment Cost Index on the following page.)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
U.S. UNEMPLOYMENT RATE
<S> <C>
Jan-90 5.4%
Feb-90 5.3%
Mar-90 5.2%
Apr-90 5.4%
May-90 5.4%
Jun-90 5.2%
Jul-90 5.5%
Aug-90 5.7%
Sep-90 5.9%
Oct-90 5.9%
Nov-90 6.2%
Dec-90 6.3%
Jan-91 6.4%
Feb-91 6.6%
Mar-91 6.8%
Apr-91 6.7%
May-91 6.9%
Jun-91 6.9%
Jul-91 6.8%
Aug-91 6.9%
Sep-91 6.9%
Oct-91 7.0%
Nov-91 7.0%
Dec-91 7.3%
Jan-92 7.3%
Feb-92 7.4%
Mar-92 7.4%
Apr-92 7.4%
May-92 7.6%
Jun-92 7.8%
Jul-92 7.7%
Aug-92 7.6%
Sep-92 7.6%
Oct-92 7.3%
Nov-92 7.4%
Dec-92 7.4%
Jan-93 7.3%
Feb-93 7.1%
Mar-93 7.0%
Apr-93 7.1%
May-93 7.1%
Jun-93 7.0%
Jul-93 6.9%
Aug-93 6.8%
Sep-93 6.7%
Oct-93 6.8%
Nov-93 6.6%
Dec-93 6.5%
Jan-94 6.6%
Feb-94 6.6%
Mar-94 6.5%
Apr-94 6.4%
May-94 6.0%
Jun-94 6.1%
Jul-94 6.1%
Aug-94 6.1%
Sep-94 5.9%
Oct-94 5.8%
Nov-94 5.6%
Dec-94 5.4%
Jan-95 5.6%
Feb-95 5.4%
Mar-95 5.4%
Apr-95 5.7%
May-95 5.6%
Jun-95 5.6%
Jul-95 5.7%
Aug-95 5.7%
Sep-95 5.7%
Oct-95 5.6%
Nov-95 5.6%
Dec-95 5.6%
Jan-96 5.7%
Feb-96 5.5%
Mar-96 5.5%
Apr-96 5.5%
May-96 5.5%
Jun-96 5.3%
Jul-96 5.5%
Aug-96 5.2%
Sep-96 5.2%
Oct-96 5.3%
Nov-96 5.4%
Dec-96 5.3%
Jan-97 5.3%
Feb-97 5.3%
Mar-97 5.2%
Apr-97 5.0%
May-97 4.8%
Jun-97 5.0%
Jul-97 4.9%
Aug-97 4.9%
Sep-97 4.9%
Oct-97 4.8%
Nov-97 4.6%
Dec-97 4.7%
Jan-98 4.7%
Feb-98 4.6%
Mar-98 4.7%
Apr-98 4.3%
May-98 4.3%
Jun-98 4.5%
Jul-98 4.5%
Aug-98 4.5%
Sep-98 4.6%
Oct-98 4.6%
Nov-98 4.4%
Dec-98 4.3%
Source: BLOOMBERG L.P.
</TABLE>
INFLATION
Price inflation remained remarkably well contained. The Consumer Price Index
(CPI) rose just 1.6% during 1998--the lowest level since 1986. Its core rate,
which excludes the more volatile food and energy components, rose 2.4%--its
lowest level since 1966. For all of 1998, overall producer prices fell 0.1%
after dropping 1.2% in 1997, marking the first time that the
4
<PAGE>
index, which was created in 1947, has fallen for two consecutive years.
The Employment Cost Index, which measures inflation in wages, salaries and
benefits, increased 3.4% in 1998, its largest increase in a calendar year since
1993.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MEASURES OF INFLATION
Quarterly Employment Cost Index Monthly Consumer Price Index
<S> <C> <C>
Jan-90 5.46% 5.2%
Feb-90 5.46% 5.3%
Mar-90 5.46% 5.2%
Apr-90 5.40% 4.7%
May-90 5.40% 4.4%
Jun-90 5.40% 4.7%
Jul-90 5.22% 4.8%
Aug-90 5.22% 5.6%
Sep-90 5.22% 6.2%
Oct-90 4.87% 6.3%
Nov-90 4.87% 6.3%
Dec-90 4.87% 6.1%
Jan-91 4.60% 5.7%
Feb-91 4.60% 5.3%
Mar-91 4.60% 4.9%
Apr-91 4.55% 4.9%
May-91 4.55% 5.0%
Jun-91 4.55% 4.7%
Jul-91 4.30% 4.4%
Aug-91 4.30% 3.8%
Sep-91 4.30% 3.4%
Oct-91 4.28% 2.9%
Nov-91 4.28% 3.0%
Dec-91 4.28% 3.1%
Jan-92 4.03% 2.6%
Feb-92 4.03% 2.8%
Mar-92 4.03% 3.2%
Apr-92 3.63% 3.2%
May-92 3.63% 3.0%
Jun-92 3.63% 3.1%
Jul-92 3.50% 3.2%
Aug-92 3.50% 3.1%
Sep-92 3.50% 3.0%
Oct-92 3.48% 3.2%
Nov-92 3.48% 3.0%
Dec-92 3.48% 2.9%
Jan-93 3.52% 3.3%
Feb-93 3.52% 3.2%
Mar-93 3.52% 3.1%
Apr-93 3.59% 3.2%
May-93 3.59% 3.2%
Jun-93 3.59% 3.0%
Jul-93 3.55% 2.8%
Aug-93 3.55% 2.8%
Sep-93 3.55% 2.7%
Oct-93 3.53% 2.8%
Nov-93 3.53% 2.7%
Dec-93 3.53% 2.7%
Jan-94 3.23% 2.5%
Feb-94 3.23% 2.5%
Mar-94 3.23% 2.5%
Apr-94 3.21% 2.4%
May-94 3.21% 2.3%
Jun-94 3.21% 2.5%
Jul-94 3.18% 2.8%
Aug-94 3.18% 2.9%
Sep-94 3.18% 3.0%
Oct-94 2.99% 2.6%
Nov-94 2.99% 2.7%
Dec-94 2.99% 2.7%
Jan-95 2.88% 2.8%
Feb-95 2.88% 2.9%
Mar-95 2.88% 2.9%
Apr-95 2.87% 3.1%
May-95 2.87% 3.2%
Jun-95 2.87% 3.0%
Jul-95 2.68% 2.8%
Aug-95 2.68% 2.6%
Sep-95 2.68% 2.5%
Oct-95 2.75% 2.8%
Nov-95 2.75% 2.6%
Dec-95 2.75% 2.5%
Jan-96 2.80% 2.7%
Feb-96 2.80% 2.7%
Mar-96 2.80% 2.8%
Apr-96 2.87% 2.9%
May-96 2.87% 2.9%
Jun-96 2.87% 2.8%
Jul-96 2.84% 3.0%
Aug-96 2.84% 2.9%
Sep-96 2.84% 3.0%
Oct-96 2.91% 3.0%
Nov-96 2.91% 3.3%
Dec-96 2.91% 3.3%
Jan-97 2.88% 3.0%
Feb-97 2.88% 3.0%
Mar-97 2.88% 2.8%
Apr-97 2.79% 2.5%
May-97 2.79% 2.2%
Jun-97 2.79% 2.3%
Jul-97 2.99% 2.2%
Aug-97 2.99% 2.2%
Sep-97 2.99% 2.2%
Oct-97 3.29% 2.1%
Nov-97 3.29% 1.8%
Dec-97 3.29% 1.7%
Jan-98 3.26% 1.6%
Feb-98 3.26% 1.4%
Mar-98 3.26% 1.4%
Apr-98 3.50% 1.4%
May-98 3.50% 1.7%
Jun-98 3.50% 1.7%
Jul-98 3.70% 1.7%
Aug-98 3.70% 1.6%
Sep-98 3.70% 1.5%
Oct-98 3.40% 1.5%
Nov-98 3.40% 1.5%
Dec-98 3.40% 1.6%
Source: BLOOMBERG L.P. AND BUREAU OF LABOR STATISTICS
</TABLE>
Although inflation has been well contained, the combination of a tight labor
market (as evidenced by low unemployment rates) and strong economic growth
typically leads to inflationary pressures on wages and, ultimately, prices. In
this environment, productivity growth becomes particularly important. Strong
productivity gains allow companies to pay higher wages without raising prices.
Non-farm productivity grew at an annualized rate of 2.2% in 1998, continuing a
healthy trend that began in 1996.
ASSET CLASS PERFORMANCE
The 12-month reporting period served as a textbook example of the benefits of
asset allocation, demonstrating that various segments of the equities market can
exhibit markedly divergent returns as well as the relative stability of the
bonds and cash asset classes.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ASSET CLASS TOTAL RETURN PERFORMANCE
VALUE OF A HYPOTHETICAL $1 INVESTMENT
S&P 500-REGISTERED
MSCI-EAFE-REGISTERED TRADEMARK-INDEX TRADEMARK-INDEX
<S> <C> <C>
Dec-97 $1.000 $1.000
Jan-98 $1.046 $1.011
Feb-98 $1.113 $1.084
Mar-98 $1.147 $1.140
Apr-98 $1.156 $1.151
May-98 $1.151 $1.131
Jun-98 $1.159 $1.177
Jul-98 $1.171 $1.165
Aug-98 $1.026 $0.996
Sep-98 $0.994 $1.060
Oct-98 $1.098 $1.147
Nov-98 $1.154 $1.216
Dec-98 $1.200 $1.286
<CAPTION>
ASSET CLASS TOTAL RETURN PERFORMANCE
VALUE OF A HYPOTHETICAL $1 INVESTMENT
RUSSELL 2000-REGISTERED LEHMAN AGGREGATE
TRADEMARK-INDEX BOND INDEX
<S> <C> <C>
Dec-97 $1.000 $1.000
Jan-98 $0.984 $1.013
Feb-98 $1.057 $1.012
Mar-98 $1.100 $1.015
Apr-98 $1.106 $1.021
May-98 $1.047 $1.030
Jun-98 $1.049 $1.039
Jul-98 $0.964 $1.041
Aug-98 $0.777 $1.058
Sep-98 $0.838 $1.083
Oct-98 $0.872 $1.077
Nov-98 $0.917 $1.083
Dec-98 $0.974 $1.087
</TABLE>
The MSCI-EAFE Index, also referred to as the MSCI-EAFE (ND) Index,
represents total return net of foreign income taxes withheld on dividends.
The equities markets experienced significant volatility throughout the period,
however, what was truly remarkable was the difference between the returns of
large- and small-cap stocks. Large-cap stocks, as represented by the S&P 500
Index, achieved a total return of 28.58% for the one-year period. Small- cap
stocks, as represented by the Russell 2000 Index, experienced a NEGATIVE total
return of 2.57%, resulting
5
<PAGE>
MARKET OVERVIEW (continued)
in a difference of 31.15% between the 12-month total returns for the two asset
classes.
International stock returns were characterized by the markedly divergent
performance of Asian countries, most of which experienced significant declines,
and European countries, most of which experienced healthy gains for the period.
Combined, international stock returns, as represented by the MSCI-EAFE Index,
experienced a positive total return of 20.00% for the reporting period.
Reflecting the decline in interest rates, fixed income returns were generally
strong for the period. Bond returns, as represented by the Lehman Brothers
Aggregate Bond Index, were 8.69% for the reporting period.
TREASURY YIELDS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
30-YEAR AND FIVE-YEAR TREASURY BOND YIELDS
30-YEAR TREASURY FIVE-YEAR TREASURY
BOND YIELD NOTE YIELD
<S> <C> <C>
1/2/98 5.84% 5.61%
1/9/98 5.73% 5.25%
1/16/98 5.81% 5.40%
1/23/98 5.97% 5.52%
1/30/98 5.80% 5.38%
2/6/98 5.92% 5.47%
2/13/98 5.85% 5.42%
2/20/98 5.87% 5.49%
2/27/98 5.92% 5.59%
3/6/98 6.02% 5.65%
3/13/98 5.89% 5.53%
3/20/98 5.89% 5.55%
3/27/98 5.96% 5.68%
4/3/98 5.79% 5.49%
4/10/98 5.88% 5.56%
4/17/98 5.88% 5.56%
4/24/98 5.95% 5.63%
5/1/98 5.93% 5.62%
5/8/98 5.98% 5.65%
5/15/98 5.97% 5.67%
5/22/98 5.90% 5.64%
5/29/98 5.80% 5.55%
6/5/98 5.79% 5.59%
6/12/98 5.66% 5.45%
6/19/98 5.67% 5.51%
6/26/98 5.63% 5.49%
7/3/98 5.60% 5.41%
7/10/98 5.63% 5.40%
7/17/98 5.75% 5.49%
7/24/98 5.69% 5.48%
7/31/98 5.71% 5.50%
8/7/98 5.63% 5.38%
8/14/98 5.54% 5.33%
8/21/98 5.43% 5.19%
8/28/98 5.34% 4.90%
9/4/98 5.29% 4.89%
9/11/98 5.23% 4.65%
9/18/98 5.15% 4.52%
9/25/98 5.11% 4.37%
10/2/98 4.84% 4.08%
10/9/98 5.12% 4.46%
10/16/98 4.98% 4.04%
10/23/98 5.18% 4.30%
10/30/98 5.16% 4.23%
11/6/98 5.39% 4.59%
11/13/98 5.25% 4.50%
11/20/98 5.22% 4.60%
11/27/98 5.16% 4.59%
12/4/98 5.04% 4.39%
12/11/98 5.02% 4.39%
12/18/98 5.00% 4.36%
12/25/98 5.22% 4.71%
Source: BLOOMBERG L.P.
</TABLE>
Treasury yields fell during the reporting period by 0.68% to 5.22% for 30-year
bonds and by 1.00% to 4.71% for five-year notes. International economic problems
were a major factor contributing to the decline in yields. Investors seeking a
safe haven increased demand for U.S Treasury securities and bid up prices,
thereby decreasing Treasury bond yields. In addition, the Federal Reserve
elected to leave rates unchanged throughout much of the reporting period, due in
part to international market turbulence, as well as acceptable domestic economic
statistics that showed strong growth coupled with contained inflation. This led
to favorable fixed income market conditions.
In an effort to provide liquidity to financial markets and shelter the U.S.
economy from the effect of increasing weakness in foreign economies, the Federal
Reserve cut short-term interest rates three times since the end of September. At
the time of this writing, the federal funds rate stood at 4.75%.
SHORT-TERM INTEREST RATE ENVIRONMENT
Short-term interest rates remained in a narrow range throughout the first half
of the reporting period due to widespread expectations that there would be no
changes to Federal Reserve policy. In the second half of the year, amid
increasing concerns surrounding international economic problems and financial
markets liquidity, the Federal Reserve initiated a series of three reductions to
the federal funds rate. Although these actions accompanied a decline in
short-term rates in general, Treasury bill yields, in particular, declined as
investors sought a safe haven in U.S. Treasury securities. Towards the end of
the period, the "spread" in yields between Treasury Bills and commercial paper
returned to more normal levels.
6
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1998 YIELDS ON 90-DAY COMMERCIAL PAPER
AND THREE-MONTH TREASURY BILLS
THREE-MONTH 90-DAY
TREASURY BILL COMMERCIAL PAPER
<S> <C> <C>
1/1/98 5.35% 5.54%
1/2/98 5.29% 5.54%
1/5/98 5.23% 5.56%
1/6/98 5.20% 5.47%
1/7/98 5.20% 5.45%
1/8/98 5.10% 5.44%
1/9/98 5.01% 5.42%
1/12/98 5.02% 5.36%
1/13/98 5.19% 5.38%
1/14/98 5.15% 5.37%
1/15/98 5.11% 5.37%
1/16/98 5.15% 5.41%
1/19/98 5.15% 5.41%
1/20/98 5.15% 5.41%
1/21/98 5.11% 5.40%
1/22/98 5.13% 5.40%
1/23/98 5.17% 5.40%
1/26/98 5.12% 5.40%
1/27/98 5.25% 5.40%
1/28/98 5.21% 5.39%
1/29/98 5.19% 5.40%
1/30/98 5.18% 5.42%
2/2/98 5.22% 5.40%
2/3/98 5.23% 5.40%
2/4/98 5.11% 5.42%
2/5/98 5.15% 5.38%
2/6/98 5.17% 5.43%
2/9/98 5.13% 5.41%
2/10/98 5.21% 5.42%
2/11/98 5.20% 5.42%
2/12/98 5.21% 5.43%
2/13/98 5.15% 5.39%
2/16/98 5.21% 5.39%
2/17/98 5.18% 5.40%
2/18/98 5.17% 5.41%
2/19/98 5.19% 5.43%
2/20/98 5.20% 5.44%
2/23/98 5.24% 5.43%
2/24/98 5.32% 5.44%
2/25/98 5.30% 5.42%
2/26/98 5.34% 5.45%
2/27/98 5.31% 5.48%
3/2/98 5.30% 5.42%
3/3/98 5.17% 5.45%
3/4/98 5.15% 5.47%
3/5/98 5.16% 5.47%
3/6/98 5.15% 5.47%
3/9/98 5.09% 5.49%
3/10/98 5.08% 5.47%
3/11/98 5.08% 5.45%
3/12/98 5.08% 5.46%
3/13/98 5.09% 5.48%
3/16/98 5.10% 5.49%
3/17/98 5.14% 5.45%
3/18/98 5.15% 5.46%
3/19/98 5.17% 5.46%
3/20/98 5.17% 5.46%
3/23/98 5.14% 5.45%
3/24/98 5.14% 5.47%
3/25/98 5.17% 5.45%
3/26/98 5.20% 5.45%
3/27/98 5.21% 5.46%
3/30/98 5.21% 5.44%
3/31/98 5.12% 5.47%
4/1/98 5.11% 5.46%
4/2/98 5.09% 5.48%
4/3/98 5.08% 5.47%
4/6/98 5.08% 5.45%
4/7/98 5.04% 5.46%
4/8/98 5.05% 5.45%
4/9/98 5.05% 5.46%
4/10/98 5.05% 5.46%
4/13/98 5.16% 5.43%
4/14/98 5.11% 5.46%
4/15/98 5.07% 5.46%
4/16/98 5.05% 5.47%
4/17/98 5.04% 5.45%
4/20/98 5.02% 5.47%
4/21/98 5.07% 5.44%
4/22/98 5.08% 5.46%
4/23/98 5.08% 5.44%
4/24/98 5.06% 5.45%
4/27/98 5.05% 5.51%
4/28/98 5.06% 5.49%
4/29/98 5.06% 5.49%
4/30/98 4.97% 5.49%
5/1/98 5.00% 5.46%
5/4/98 5.02% 5.47%
5/5/98 5.11% 5.46%
5/6/98 5.10% 5.49%
5/7/98 5.10% 5.46%
5/8/98 5.12% 5.47%
5/11/98 5.12% 5.48%
5/12/98 5.13% 5.47%
5/13/98 5.12% 5.48%
5/14/98 5.16% 5.49%
5/15/98 5.16% 5.49%
5/18/98 5.17% 5.50%
5/19/98 5.20% 5.50%
5/20/98 5.18% 5.48%
5/21/98 5.23% 5.48%
5/22/98 5.21% 5.48%
5/25/98 5.21% 5.48%
5/26/98 5.10% 5.48%
5/27/98 5.09% 5.49%
5/28/98 5.05% 5.48%
5/29/98 5.01% 5.47%
6/1/98 4.97% 5.49%
6/2/98 5.20% 5.46%
6/3/98 5.11% 5.48%
6/4/98 5.11% 5.48%
6/5/98 5.11% 5.48%
6/8/98 5.12% 5.49%
6/9/98 5.14% 5.48%
6/10/98 5.13% 5.49%
6/11/98 5.09% 5.48%
6/12/98 5.11% 5.49%
6/15/98 5.11% 5.47%
6/16/98 5.16% 5.47%
6/17/98 5.21% 5.48%
6/18/98 5.18% 5.49%
6/19/98 5.15% 5.48%
6/22/98 5.12% 5.49%
6/23/98 5.07% 5.48%
6/24/98 5.04% 5.50%
6/25/98 5.00% 5.48%
6/26/98 4.99% 5.49%
6/29/98 5.00% 5.50%
6/30/98 5.08% 5.47%
7/1/98 5.10% 5.48%
7/2/98 5.06% 5.48%
7/3/98 5.05% 5.48%
7/6/98 5.05% 5.48%
7/7/98 5.10% 5.49%
7/8/98 5.08% 5.48%
7/9/98 5.05% 5.47%
7/10/98 5.04% 5.47%
7/13/98 5.07% 5.47%
7/14/98 5.14% 5.49%
7/15/98 5.13% 5.48%
7/16/98 5.16% 5.47%
7/17/98 5.14% 5.49%
7/20/98 5.12% 5.48%
7/21/98 5.07% 5.50%
7/22/98 5.07% 5.47%
7/23/98 5.09% 5.48%
7/24/98 5.08% 5.48%
7/27/98 5.07% 5.51%
7/28/98 5.06% 5.49%
7/29/98 5.06% 5.50%
7/30/98 5.07% 5.50%
7/31/98 5.08% 5.50%
8/3/98 5.11% 5.50%
8/4/98 5.08% 5.49%
8/5/98 5.08% 5.47%
8/6/98 5.02% 5.49%
8/7/98 4.98% 5.49%
8/10/98 4.97% 5.49%
8/11/98 5.02% 5.47%
8/12/98 4.99% 5.49%
8/13/98 5.06% 5.47%
8/14/98 5.01% 5.47%
8/17/98 5.05% 5.48%
8/18/98 5.08% 5.48%
8/19/98 5.06% 5.47%
8/20/98 5.04% 5.47%
8/21/98 4.98% 5.46%
8/24/98 5.05% 5.47%
8/25/98 5.07% 5.48%
8/26/98 5.05% 5.47%
8/27/98 4.97% 5.47%
8/28/98 4.88% 5.48%
8/31/98 4.83% 5.43%
9/1/98 4.90% 5.42%
9/2/98 4.89% 5.42%
9/3/98 4.84% 5.43%
9/4/98 4.85% 5.41%
9/7/98 4.86% 5.41%
9/8/98 4.87% 5.43%
9/9/98 4.86% 5.40%
9/10/98 4.78% 5.38%
9/11/98 4.86% 5.35%
9/14/98 4.84% 5.33%
9/15/98 4.79% 5.34%
9/16/98 4.71% 5.34%
9/17/98 4.67% 5.31%
9/18/98 4.61% 5.30%
9/21/98 4.66% 5.32%
9/22/98 4.80% 5.32%
9/23/98 4.68% 5.30%
9/24/98 4.59% 5.20%
9/25/98 4.49% 5.20%
9/28/98 4.43% 5.13%
9/29/98 4.39% 5.08%
9/30/98 4.36% 5.12%
10/1/98 4.24% 5.14%
10/2/98 4.19% 5.08%
10/5/98 4.11% 5.08%
10/6/98 4.16% 5.10%
10/7/98 4.12% 5.14%
10/8/98 3.90% 5.13%
10/9/98 3.89% 5.11%
10/12/98 3.89% 5.11%
10/13/98 3.88% 5.10%
10/14/98 4.01% 5.11%
10/15/98 3.91% 5.13%
10/16/98 3.62% 5.00%
10/19/98 3.80% 4.98%
10/20/98 3.99% 4.95%
10/21/98 3.98% 4.95%
10/22/98 3.97% 5.00%
10/23/98 3.98% 5.02%
10/26/98 4.09% 4.97%
10/27/98 4.16% 4.96%
10/28/98 4.26% 4.96%
10/29/98 4.31% 4.96%
10/30/98 4.32% 5.05%
11/2/98 4.40% 5.07%
11/3/98 4.49% 5.05%
11/4/98 4.57% 5.03%
11/5/98 4.56% 5.10%
11/6/98 4.64% 5.14%
11/9/98 4.63% 5.15%
11/10/98 4.56% 5.13%
11/11/98 4.56% 5.13%
11/12/98 4.46% 5.13%
11/13/98 4.46% 5.12%
11/16/98 4.51% 5.06%
11/17/98 4.39% 5.15%
11/18/98 4.43% 4.97%
11/19/98 4.44% 4.97%
11/20/98 4.45% 5.00%
11/23/98 4.59% 4.97%
11/24/98 4.60% 4.97%
11/25/98 4.56% 5.00%
11/26/98 4.55% 5.00%
11/27/98 4.52% 5.00%
11/30/98 4.48% 5.02%
12/1/98 4.49% 5.08%
12/2/98 4.48% 5.03%
12/3/98 4.43% 5.04%
12/4/98 4.47% 5.02%
12/7/98 4.49% 5.02%
12/8/98 4.42% 5.00%
12/9/98 4.41% 4.98%
12/10/98 4.48% 4.99%
12/11/98 4.50% 5.03%
12/14/98 4.49% 5.00%
12/15/98 4.49% 5.00%
12/16/98 4.42% 4.99%
12/17/98 4.46% 5.01%
12/18/98 4.49% 5.00%
12/21/98 4.51% 5.01%
12/22/98 4.50% 5.00%
12/23/98 4.58% 5.02%
12/24/98 4.56% 5.03%
12/25/98 4.56% 5.03%
12/28/98 4.52% 5.03%
12/29/98 4.59% 5.07%
12/30/98 4.54% 4.86%
12/31/98 4.45% 4.84%
Source: BLOOMBERG L.P.
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
90-DAY MUNICIPAL COMMERCIAL PAPER YIELD (WEEKLY)
<S> <C>
1/7/98 3.50%
1/14/98 3.40%
1/21/98 3.50%
1/28/98 3.55%
2/4/98 3.45%
2/11/98 3.25%
2/18/98 3.40%
2/25/98 3.45%
3/4/98 3.40%
3/11/98 3.35%
3/18/98 3.50%
3/25/98 3.60%
4/1/98 3.60%
4/8/98 3.60%
4/15/98 3.70%
4/22/98 3.80%
4/29/98 3.70%
5/6/98 3.75%
5/13/98 3.70%
5/20/98 3.70%
5/27/98 3.65%
6/3/98 3.60%
6/10/98 3.60%
6/17/98 3.55%
6/24/98 3.55%
7/1/98 3.40%
7/8/98 3.40%
7/15/98 3.60%
7/22/98 3.60%
7/29/98 3.55%
8/5/98 3.55%
8/12/98 3.50%
8/19/98 3.45%
8/26/98 3.50%
9/2/98 3.30%
9/9/98 3.35%
9/16/98 3.40%
9/23/98 3.40%
9/30/98 3.40%
10/7/98 3.20%
10/14/98 3.15%
10/21/98 2.95%
10/28/98 2.95%
11/4/98 2.95%
11/11/98 3.05%
11/18/98 3.05%
11/25/98 3.00%
12/2/98 2.95%
12/9/98 3.00%
12/16/98 3.05%
12/23/98 3.00%
12/30/98 2.90%
Source: LEHMAN BROTHERS
</TABLE>
Short-term municipal commercial paper rates exhibited a pattern similar to that
of taxable commercial paper yields reflecting the overall decline in short-term
commercial paper yields during the second half of the reporting period.
NOTE: THIS MARKET OVERVIEW HAS BEEN PROVIDED BY THE PORTFOLIO MANAGEMENT TEAM.
7
<PAGE>
PORTFOLIO MANAGEMENT
THE PORTFOLIO MANAGEMENT TEAM
STEPHEN B. WARD--senior vice president and chief investment officer, has overall
responsibility for the management of the Funds' portfolios. Steve joined Charles
Schwab Investment Management, Inc. (CSIM) as vice president and portfolio
manager in April 1991 and was promoted to his current position in August 1993.
Prior to joining CSIM, Steve was vice president and portfolio manager at
Federated Investors.
WALTER BEVERIDGE--portfolio manager, has managed the Schwab Municipal Money Fund
since April 1992, when he joined CSIM; the Schwab Pennsylvania Municipal Money
Fund since its inception in February 1998; and the Schwab Florida Municipal
Money Fund since its inception in March 1998. Walter also managed the Schwab
California Municipal Money Fund from April 1992 through November 1997 and the
Schwab New York Municipal Money Fund from its inception in February 1995 through
November 1997. Prior to joining CSIM, Walter was a portfolio manager for the
Benham Group.
CHARLES SOULIS--portfolio manager, has managed the Schwab California Municipal
Money Fund and the Schwab New York Municipal Money Fund since he joined CSIM in
December 1997, and the Schwab New Jersey Municipal Money Fund since its
inception in February 1998. Prior to joining CSIM, Charles was a portfolio
manager for Wells Capital Management.
8
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
FUND PERFORMANCE AND PORTFOLIO COMPOSITION
YIELD SUMMARY AS OF 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP VALUE ADVANTAGE
SHARES-TM- SHARES-TM-
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Seven-Day Yield 3.02% 3.23%
- --------------------------------------------------------------------------------------------
Seven-Day Effective Yield 3.06% 3.28%
- --------------------------------------------------------------------------------------------
Seven-Day Taxable-Equivalent Yield(2) 5.07% 5.43%
- --------------------------------------------------------------------------------------------
</TABLE>
THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS
If you're in a high tax bracket, the federal tax-exempt income paid by the
Schwab Municipal Money Fund may provide you with higher yields than those of
taxable money funds on a taxable-equivalent basis.(3) The figures below
illustrate the yield differential on a taxable-equivalent basis for both classes
of the Fund's shares compared with the average seven-day effective yield of
4.63% as of 12/29/98 for first-tier taxable money funds:(4)
<TABLE>
<CAPTION>
SWEEP SHARES VALUE ADVANTAGE SHARES
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Yield differential over average taxable money
fund: 0.35% 0.72%
- --------------------------------------------------------------------------------------------
</TABLE>
Represents seven-day period ended 12/29/98, the last day of the year for which
IBC data was available. This relationship was not consistent throughout the
reporting period.
Please remember that money market fund yields fluctuate and that past
performance is no guarantee of future results.
(1)A portion of the Fund's fees was waived or reimbursed during the reporting
period. Without the waivers or reimbursements, as of 12/31/98, the seven-day,
seven-day effective and seven-day taxable equivalent yields for the Fund
would have been 2.79%, 2.83% and 4.69%, respectively, for the Sweep Shares,
and 2.99%, 3.03% and 5.02%, respectively, for the Value Advantage Shares.
(2)Taxable-equivalent yield assumes a 1998 maximum federal income tax rate of
39.6%.
(3)Income may be subject to state and local taxes and the federal alternative
minimum tax (AMT).
(4)Source: IBC Financial Data, Inc.'s weekly average seven-day yield for the 295
funds in the first-tier category of taxable money funds as of 12/29/98. Past
performance is no guarantee of future results.
PORTFOLIO COMPOSITION
The Schwab Municipal Money Fund invests in a diversified portfolio of
high-quality, short-term municipal securities issued by or on behalf of a state,
including its counties, municipalities and other subdivisions, or the
territories and possessions of the United States and the District of Columbia,
including their political subdivisions, agencies and instrumentalities. The
chart to the right illustrates the composition of the Fund's portfolio as of
December 31, 1998, and is not indicative of its holdings after that date. A
complete list of the securities in the Fund's portfolio as of December 31, 1998,
is provided in the Schedule of Investments later in this report.
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS(5)
as of 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Variable-Rate Obligations 61.6%
Tender Option Bonds 10.9%
Tax-Exempt Commercial Paper 10.3%
Anticipation Notes 7.1%
Put Bonds 6.3%
Revenue Bonds 2.3%
General Obligation Bonds & Certificates of
Participation 1.5%
</TABLE>
(5)These percentages do not take into account other assets and liabilities.
9
<PAGE>
PORTFOLIO MANAGEMENT (continued)
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
FUND PERFORMANCE AND PORTFOLIO COMPOSITION
YIELD SUMMARY AS OF 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP VALUE ADVANTAGE
SHARES-TM- SHARES-TM-
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Seven-Day Yield 2.76% 2.96%
- --------------------------------------------------------------------------------------------
Seven-Day Effective Yield 2.80% 3.01%
- --------------------------------------------------------------------------------------------
Seven-Day Taxable-Equivalent Yield(2) 5.11% 5.49%
- --------------------------------------------------------------------------------------------
</TABLE>
THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS
If you're in a high tax bracket, the federal and California tax-exempt income
paid by the Schwab California Municipal Money Fund may provide you with higher
yields than those of taxable money funds on a taxable-equivalent basis.(3) The
figures below illustrate the yield differential on a taxable-equivalent basis
for both classes of the Fund's shares compared with the average seven-day
effective yield of 4.63% as of 12/29/98 for first-tier taxable money funds:(4)
<TABLE>
<CAPTION>
SWEEP SHARES VALUE ADVANTAGE SHARES
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Yield advantage over average taxable money fund: 0.39% 0.76%
- --------------------------------------------------------------------------------------------
</TABLE>
Represents seven-day period ended 12/29/98, the last day of the year for which
IBC data was available. This relationship was not consistent throughout the
reporting period.
Please remember that money market fund yields fluctuate and that past
performance is no guarantee of future results.
(1)A portion of the Fund's fees was waived or reimbursed during the reporting
period. Without the waivers or reimbursements, as of 12/31/98, the seven-day,
seven-day effective and seven-day taxable equivalent yields for the Fund
would have been 2.52%, 2.55% and 4.65%, respectively, for the Sweep Shares
and 2.72%, 2.76% and 5.04%, respectively, for the Value Advantage Shares.
(2)Taxable-equivalent yield assumes a 1998 maximum combined federal regular
income tax and California state personal rate of 45.22%.
(3)Income may be subject to the federal alternative minimum tax (AMT).
(4)Source: IBC Financial Data, Inc.'s weekly average seven-day yield for the 295
funds in the first-tier category of taxable money funds as of 12/29/98. Past
performance is no guarantee of future results.
PORTFOLIO COMPOSITION
The Schwab California Municipal Money Fund invests in a diversified portfolio of
high-quality, short-term municipal securities issued by the state of California,
including its counties, municipalities and other subdivisions. The chart to the
right illustrates the composition of the Fund's portfolio as of December 31,
1998, and is not indicative of its holdings after that date. A complete list of
the securities in the Fund's portfolio as of December 31, 1998, is provided in
the Schedule of Investments later in this report.
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS(5)
as of 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Variable-Rate Obligations 56.6%
Tax-Exempt Commercial Paper 18.6%
Anticipation Notes 13.1%
Tender Option Bonds 7.8%
Revenue Bonds 1.4%
Put Bonds 1.1%
General Obligation Bonds 1.0%
Certificates of Participation & Short-Term
Investments 0.4%
</TABLE>
(5)These percentages do not take into account other assets and liabilities.
10
<PAGE>
SCHWAB NEW YORK MUNICIPAL MONEY FUND
FUND PERFORMANCE AND PORTFOLIO COMPOSITION
YIELD SUMMARY AS OF 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP VALUE ADVANTAGE
SHARES-TM- SHARES-TM-
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Seven-Day Yield 2.97% 3.21%
- --------------------------------------------------------------------------------------------
Seven-Day Effective Yield 3.01% 3.26%
- --------------------------------------------------------------------------------------------
Seven-Day Taxable-Equivalent Yield(2) 5.62% 6.09%
- --------------------------------------------------------------------------------------------
</TABLE>
THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS
If you're in a high tax bracket, the federal and New York state and New York
local tax-exempt income paid by the Schwab New York Municipal Money Fund may
provide you with higher yields than those of taxable money funds on a taxable-
equivalent basis.(3) The figures below illustrate the yield differential on a
taxable-equivalent basis for both classes of the Fund's shares compared with the
average seven-day effective yield of 4.63% as of 12/29/98 for first-tier taxable
money funds:(4)
<TABLE>
<CAPTION>
SWEEP SHARES VALUE ADVANTAGE SHARES
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Yield advantage over average taxable money fund: 0.90% 1.36%
- --------------------------------------------------------------------------------------------
</TABLE>
Represents seven-day period ended 12/29/98, the last day of the year for which
IBC data was available. This relationship was not consistent throughout the
reporting period.
Please remember that money market fund yields fluctuate and that past
performance is no guarantee of future results.
(1)A portion of the Fund's fees was waived or reimbursed during the reporting
period. Without the waivers or reimbursements, as of 12/31/98, the seven-day,
seven-day effective and seven-day taxable equivalent yields for the Fund
would have been 2.69%, 2.73% and 5.10%, respectively, for the Sweep Shares
and 2.89%, 2.93% and 5.47%, respectively for the Value Advantage Shares.
(2)Taxable-equivalent yield assumes a 1998 maximum combined federal income tax
and New York state and New York City personal income tax rate of 46.43%.
(3)Income may be subject to the federal alternative minimum tax (AMT).
(4)Source: IBC Financial Data, Inc.'s weekly average seven-day yield for the 295
funds in the first-tier category of taxable money funds as of 12/29/98. Past
performance is no guarantee of future results.
PORTFOLIO COMPOSITION
The Schwab New York Municipal Money Fund invests in a diversified portfolio of
high-quality, short-term municipal securities issued by the state of New York,
including its counties, municipalities and other subdivisions. The chart to the
right illustrates the composition of the Fund's portfolio as of December 31,
1998, and is not indicative of its holdings after that date. A complete list of
the securities in the Fund's portfolio as of December 31, 1998, is provided in
the Schedule of Investments later in this report.
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS(5)
as of 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Variable-Rate Obligations 54.2%
Tender Option Bonds 15.9%
Tax-Exempt Commercial Paper 12.1%
Anticipation Notes 11.3%
General Obligation Bonds 3.3%
Revenue Bonds 3.2%
</TABLE>
(5)These percentages do not take into account other assets and liabilities.
11
<PAGE>
SCHWAB NEW JERSEY MUNICIPAL MONEY FUND
FUND PERFORMANCE AND PORTFOLIO COMPOSITION
YIELD SUMMARY AS OF 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP
SHARES-TM-
<S> <C>
- --------------------------------------------------------------------
Seven-Day Yield 2.96%
- --------------------------------------------------------------------
Seven-Day Effective Yield 3.00%
- --------------------------------------------------------------------
Seven-Day Taxable-Equivalent Yield(2) 5.31%
- --------------------------------------------------------------------
</TABLE>
THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS
If you're in a high tax bracket, the federal and New Jersey tax-exempt income
paid by the Schwab New Jersey Municipal Money Fund may provide you with higher
yields than those of taxable money funds on a taxable-equivalent basis.(3) The
figure below illustrates the yield differential on a taxable-equivalent basis of
the Fund's shares compared with the average seven-day effective yield of 4.63%
as of 12/29/98 for first-tier taxable money funds:(4)
<TABLE>
<CAPTION>
SWEEP SHARES
<S> <C>
- --------------------------------------------------------------------
Yield advantage over average taxable money fund: 0.62%
- --------------------------------------------------------------------
</TABLE>
Represents seven-day period ended 12/29/98, the last day of the year for which
IBC data was available. This relationship was not consistent throughout the
reporting period.
Please remember that money market fund yields fluctuate and that past
performance is no guarantee of future results.
(1)A portion of the Fund's fees was waived or reimbursed during the reporting
period. Without the waivers or reimbursements, as of 12/31/98, the seven-day,
seven-day effective and seven-day taxable equivalent yields for the Fund
would have been 2.52%, 2.55% and 4.51%, respectively.
(2)Taxable-equivalent yield assumes a 1998 maximum combined federal regular
income and New Jersey personal income tax rate of 43.45%.
(3)Income may be subject to the federal alternative minimum tax (AMT).
(4)Source: IBC Financial data, Inc.'s weekly average seven-day yield for the 295
funds in the first-tier category of taxable money funds as of 12/29/98. Past
performance is no guarantee of future results.
PORTFOLIO COMPOSITION
The Schwab New Jersey Municipal Money Fund invests in a diversified portfolio of
high-quality, short-term municipal securities issued by the state of New Jersey,
including its counties, municipalities and other subdivisions. The chart to the
right illustrates the composition of the Fund's portfolio as of December 31,
1998, and is not indicative of its holdings after that date. A complete list of
the securities in the Fund's portfolio as of December 31, 1998, is provided in
the Schedule of Investments later in this report.
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS(5)
as of 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Variable-Rate Obligations 44.4%
Tender Option Bonds 16.8%
Anticipation Notes 16.2%
Revenue Bonds 10.0%
Tax-Exempt Commercial Paper 7.3%
Put Bonds 3.1%
General Obligation Bonds 2.2%
</TABLE>
(5)These percentages do not take into account other assets and liabilities.
12
<PAGE>
SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND
FUND PERFORMANCE AND PORTFOLIO COMPOSITION
YIELD SUMMARY AS OF 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP
SHARES-TM-
<S> <C>
- --------------------------------------------------------------------
Seven-Day Yield 3.09%
- --------------------------------------------------------------------
Seven-Day Effective Yield 3.13%
- --------------------------------------------------------------------
Seven-Day Taxable-Equivalent Yield(2) 5.33%
- --------------------------------------------------------------------
</TABLE>
THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS
If you're in a high tax bracket, the federal and Pennsylvania tax-exempt income
paid by the Schwab Pennsylvania Municipal Money Fund may provide you with higher
yields than those of taxable money funds on a taxable-equivalent basis.(3) The
figure below illustrates the yield differential on a taxable-equivalent basis of
the Fund's shares compared with the average seven-day effective yield of 4.63%
as of 12/29/98 for first-tier taxable money funds:(4)
<TABLE>
<CAPTION>
SWEEP SHARES
<S> <C>
- --------------------------------------------------------------------
Yield differential over average taxable money
fund: 0.65%
- --------------------------------------------------------------------
</TABLE>
Represents seven-day period ended 12/29/98, the last day of the year for which
IBC data was available. This relationship was not consistent throughout the
reporting period.
Please remember that money market fund yields fluctuate and that past
performance is no guarantee of future results.
(1)A portion of the Fund's fees was waived or reimbursed during the reporting
period. Without the waivers or reimbursements, as of 12/31/98, the seven-day,
seven-day effective and seven-day taxable equivalent yields for the Fund
would have been 2.66%, 2.69% and 4.58%, respectively.
(2)Taxable-equivalent yield assumes a 1998 maximum combined federal income
tax and Pennsylvania personal income tax rate of 41.29%.
(3)Income may be subject to the federal alternative minimum tax (AMT).
(4)Source: IBC Financial data, Inc.'s weekly average seven-day yield for the 295
funds in the first-tier category of taxable money funds as of 12/31/98. Past
performance is no guarantee of future results.
PORTFOLIO COMPOSITION
The Schwab Pennsylvania Municipal Money Fund invests in a diversified portfolio
of high-quality, short-term municipal securities issued by the state of
Pennsylvania, including its counties, municipalities and other subdivisions. The
chart to the right illustrates the composition of the Fund's portfolio as of
December 31, 1998, and is not indicative of its holdings after that date. A
complete list of the securities in the Fund's portfolio as of December 31, 1998,
is provided in the Schedule of Investments later in this report.
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS(5)
as of 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Variable-Rate Obligations 60.6%
Tax-Exempt Commercial Paper 11.4%
Tender Option Bonds 9.2%
Revenue Bonds 8.6%
General Obligation Bonds & Put Bonds 4.9%
Certificates of Participation 3.2%
Anticipation Notes 2.1%
</TABLE>
(5)These percentages do not take into account other assets and liabilities.
13
<PAGE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
FUND PERFORMANCE AND PORTFOLIO COMPOSITION
YIELD SUMMARY AS OF 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP
SHARES-TM-
<S> <C>
- --------------------------------------------------------------------
Seven-Day Yield 2.99%
- --------------------------------------------------------------------
Seven-Day Effective Yield 3.04%
- --------------------------------------------------------------------
Seven-Day Taxable-Equivalent Yield(2) 5.03%
- --------------------------------------------------------------------
</TABLE>
THE OPPORTUNITY FOR HIGHER AFTER-TAX YIELDS
If you're in a high tax bracket, the tax-exempt income paid by the Schwab
Florida Municipal Money Fund may provide you with higher yields than those of
taxable money funds on a taxable-equivalent basis.(3) The figure below
illustrates the yield differential on a taxable-equivalent basis of the Fund's
shares compared with the average seven-day effective yield of 4.63% as of
12/29/98 for first-tier taxable money funds.(4) The Fund also seeks to invest so
that its shares are exempt from the Florida intangible tax.
<TABLE>
<CAPTION>
SWEEP SHARES
<S> <C>
- --------------------------------------------------------------------
Yield differential over average taxable money
fund: 0.35%
- --------------------------------------------------------------------
</TABLE>
Represents seven-day period ended 12/29/98, the last day of the year for which
IBC data was available. This relationship was not consistent throughout the
reporting period.
Please remember that money market fund yields fluctuate and that past
performance is no guarantee of future results.
(1)A portion of the Fund's fees was waived or reimbursed during the reporting
period. Without the waivers or reimbursements, as of 12/31/98, the seven-day,
seven-day effective and seven-day taxable equivalent yields for the Fund
would have been 2.64%, 2.67% and 4.42%, respectively.
(2)Taxable-equivalent yield assumes a 1998 maximum federal income tax rate of
39.6%.
(3)Income may be subject to the federal alternative minimum tax (AMT).
(4)Source: IBC Financial data, Inc.'s weekly average seven-day yield for the 295
funds in the first-tier category of taxable money funds as of 12/29/98. Past
performance is no guarantee of future results.
PORTFOLIO COMPOSITION
The Schwab Florida Municipal Money Fund invests in a diversified portfolio of
high-quality, short-term municipal securities issued by the state of Florida,
including its counties, municipalities and other subdivisions. The chart to the
right illustrates the composition of the Fund's portfolio as of December 31,
1998, and is not indicative of its holdings after that date. A complete list of
the securities in the Fund's portfolio as of December 31, 1998, is provided in
the Schedule of Investments later in this report.
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS(5)
as of 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Variable-Rate Obligations 55.4%
Anticipation Notes 14.3%
Tender Option Bonds 8.7%
Tax-Exempt Commercial Paper 13.9%
Revenue Bonds 2.7%
General Obligation Bonds 3.3%
Mandatory Put Bonds 1.7%
</TABLE>
(5)These percentages do not take into account other assets and liabilities.
14
<PAGE>
FUND DISCUSSION
QUESTIONS TO THE
PORTFOLIO MANAGEMENT TEAM
Q. HOW HAS THE PORTFOLIO MANAGEMENT TEAM
ADJUSTED EACH FUND'S PORTFOLIO TO RESPOND TO
CHANGES IN INTEREST RATES?
A. As the supply of municipal securities increased during the June/July note
season we were able to extend the dollar-weighted average maturity (DWAM) of the
Funds from their lows in May. This action left the Funds well positioned as the
Federal Reserve cut short-term rates three times between September and November.
During the remainder of the year, we attempted to keep the DWAM in line with
other funds with similar investment objectives. Additionally, we managed the
DWAM of the Funds to capitalize on the seasonal cycles typical of short-term
municipal securities markets. In anticipation of lower rates for variable rate
demand notes in early 1999, the portfolio managers extended the Funds'
maturities at the end of December. This allowed the Funds to lock in higher
rates and to be insulated from the lower rates typical of notes issued in
January.
<TABLE>
<CAPTION>
CALIFORNIA NEW YORK NEW JERSEY PENNSYLVANIA FLORIDA
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
MONEY FUND MONEY FUND MONEY FUND MONEY FUND MONEY FUND MONEY FUND
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
12/31/97 48 days 51 days 63 days N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
12/31/98 39 days 49 days 45 days 49 days 50 days 53 days
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Q. WHAT IMPACT HAVE THE ECONOMIC PROBLEMS
OF SO MANY PACIFIC RIM COUNTRIES HAD ON THE MANAGEMENT OF THE FUNDS?
A. Beginning in the fourth quarter of 1997, many Asian and emerging market
economies experienced economic difficulties and severe currency devaluations.
These problems persisted throughout 1998. Although these are serious global
problems that will no doubt have a credit impact on the issuers of securities in
those countries and their economies, they have not had a significant effect on
the issuers of what typically are considered money market-eligible securities.
Nevertheless, we continue, as always, to carefully monitor the creditworthiness
of any issuer of securities considered for investment.
As we have discussed in previous reports, all of the Schwab Municipal Money
Funds are allowed to own certain municipal securities that are insured or backed
by a letter of credit issued by a first-tier financial institution, which may be
foreign-based. These arrangements are referred to as "credit enhancements"
because they provide incremental levels of creditworthiness. During the
reporting period, we did, as a precaution, reduce the Funds' exposure to
Japanese issuers of credit enhancements. As of the end of the reporting period,
there were no securities with Japanese credit enhancements in any of the Schwab
Municipal Money Funds. As part of our regular credit review process, we
carefully monitor the credit quality of both the enhancement providers and the
issuers of the Funds' portfolio securities.
15
<PAGE>
FUND DISCUSSION (continued)
Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN CALIFORNIA?
A. California continues to enjoy a sustained economic recovery. As noted in the
Governor's 1998-99 Budget Highlights, employment growth through the first half
of 1998 was 3.5% higher compared to the same period in 1997, and well above the
national rate of 2.6%. Looking forward, it is anticipated that California will
see continued moderate growth across most industry sectors with some, such as
those heavily dependent on exporting goods and services to Asia, growing at a
much slower pace. However, the effect on California of the economic weakness in
Asia should be somewhat offset by strong export growth to Mexico and increasing
exports to Europe, Canada and the Middle East.
The continued state economic improvement has allowed for a buildup of budget
reserves and an easing of some of the spending restrictions imposed during the
last recession. At the end of the 1997-98 budget year, the state had a budget
surplus of approximately $1 billion. While the budget surplus was a welcomed
event, it delayed the adoption of the final 1998-99 budget as lawmakers sought
to reach a consensus on how to handle the surplus. As in prior years, budget
adjustments may be necessary to keep spending in line with revenues. Lawmakers
will continue to address the challenge of balancing mandated spending
requirements for education and public safety against the need for maintaining
and upgrading public infrastructure. Therefore, the state's financial position
may be somewhat static over the next twelve months.
We are satisfied that the California securities held by the Fund represent
minimal credit risk and we will, as always, continue to monitor that state's
economic situation closely. California's current credit ratings are Aa3 from
Moody's Investor Service, A+ from Standard & Poor's Corporation, and AA- from
Fitch IBCA, Inc., three well-known rating agencies.
Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN NEW YORK?
A. A diverse economic base and the central role New York City continues to play
in international finance, tourism, and other service-related businesses support
New York State's satisfactory credit quality. The state entered the 1990
recession earlier than others and its recovery has been slower and less robust.
For the 1997-98 fiscal year the state predicted a 1.4% increase in employment
which marked the highest level of job growth since 1988, the year prior to the
last recession. Economic growth may continue to be constrained by ongoing
structural changes in the economy such as corporate downsizing or relocation and
cutbacks in defense spending.
In spite of budgetary surpluses in six of the last seven years, New York still
faces the challenge of resolving longstanding general fund imbalances. The 1999
budget was adopted in May 1998 with a focus on educational spending, and
maintained previously enacted tax reductions. As in prior years, spending is
projected to be higher with economic growth covering the 7% increase in
expenditures. Therefore, while the state may see higher revenues over the next
twelve months, it may not be able to make a significant improvement in its
general fund reserves. Further, while the state's economic projections are
reasonable and in line with those of independent institutions, much of the
anticipated growth is reliant on continued strength in the financial services
sector. This reliance is a weakness given the unlikely event that the financial
16
<PAGE>
services sector will continue to produce the outstanding results of the last
three years.
We are satisfied that the New York securities held by the Fund represent minimal
credit risk and we will continue to monitor that state's economic situation
closely. New York's current credit ratings are A2 from Moody's Investor Service,
A from Standard & Poor's Corporation and A+ from Fitch IBCA, Inc., three well-
known rating agencies.
Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN NEW JERSEY?
A. New Jersey's above average credit quality is derived from its diversified
economy, high personal income levels (second only to Connecticut) and strong
control of the state's finances. Just like much of the Northeast region, New
Jersey was severely impacted by the recession of the early 1990s. Recovery came
slowly with annual increases in non-farm employment from 1991 to 1996
registering less than half the national rate. However, a spike in job growth in
1997 allowed the state to return to its pre-recession level of total employment.
Continued economic growth may be constrained by ongoing structural changes in
the economy such as corporate downsizing or relocation.
Over the last few years, increasing tax revenues, use of non-recurring financial
resources, and spending controls have generated excess revenues that provide the
state a financial cushion of approximately 6% of its annual expenditures. The
state's 1999 budget was adopted on June 30, 1998 and generally follows the track
of prior years with no new taxes and a focus on educational and environmental
spending. As in prior years, higher spending is expected to be offset by a 4.2%
increase in total revenue. Therefore, while the state may see higher revenues
over the next twelve months, it may not be able to make a significant
improvement in its general fund reserves. Further, while the state's economic
projections are reasonable and in line with those of independent institutions,
much of the projected growth is reliant on continued strength in the financial
services sector. This reliance is a weakness given the unlikely event that the
financial services sector will continue to produce the outstanding results of
the last three years.
We are satisfied that the New Jersey securities held by the Fund represent
minimal credit risk and we will continue to monitor that state's economic
situation closely. New Jersey's current credit ratings are Aa1 from Moody's
Investor Service, AA+ from Standard & Poor's Corporation and AA+ from Fitch
IBCA, Inc., three well-known rating agencies.
Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN PENNSYLVANIA?
A. Pennsylvania's above average credit quality is derived from its conservative
financial management, slow but improving job growth, economic diversification,
and moderate debt levels. Just like much of the region, Pennsylvania was
severely impacted by the recession of the early 1990s. Recovery came slowly with
annual increases in non-farm employment from 1991 to 1996 registering less than
half the national rate. This slow but steady pace of job growth coupled with a
somewhat better showing in 1997 brought the state's total employment to 7% above
the pre-recession peak. Continued economic growth may be constrained by ongoing
structural changes in the economy, especially in the manufacturing sector.
17
<PAGE>
FUND DISCUSSION (continued)
In each of the last six years Pennsylvania has generated operating surpluses.
These surpluses have allowed the state to make contributions to its budget
reserve that now totals more than $400 million or approximately 2.4% of 1998
revenues. The state's 1999 budget was adopted prior to the start of the new year
on July 1, and generally follows the governor's proposal of additional tax
relief for both corporations and individuals and an expected use of most of the
accumulated General Fund surplus. Given the historically conservative revenue
growth projections, the state is not expected to make a significant draw on its
reserves in fiscal 1999. However, future economic growth may be slower than
projected and, therefore, may cause budgetary constraints that could lead to
spending reductions and possible depletion of accumulated reserves.
We are satisfied that the Pennsylvania securities held by the Fund represent
minimal credit risk and we will continue to monitor that state's economic
situation closely. Pennsylvania's current credit ratings are Aa3 from Moody's
Investor Service, AA from Standard & Poor's Corporation and AA from Fitch IBCA,
Inc., three well-known rating agencies.
Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN FLORIDA?
A. Sustained rapid growth has helped Florida become, the fourth-largest state in
the nation. The state continues to see its economy diversify into trade,
services, finance and exports, thus greatly reducing its previous dependence on
agriculture and tourism. This economic diversification, along with moderate debt
levels and successful financial operations, have contributed to Florida's above
average credit quality. As the state has grown, it has successfully met the
challenge of funding that growth and maintaining a balanced budget through a
combination of budgetary control and management restraint during periods of
economic weakness. With sales tax revenues accounting for approximately 70% of
total revenues, Florida has taken steps to increase its financial reserves by
adding the Budget Stabilization Fund. Through the end of fiscal 1998 the Budget
Stabilization Fund has grown to about 4% of General Fund revenues and has
included $100 million in the fiscal 1999 budget that will bring the state to its
target.
We are satisfied that the Florida securities held by the Fund represent minimal
credit risk and we will continue to monitor that state's economic situation
closely. Florida's current credit ratings are Aa2 from Moody's Investor Service,
AA+ from Standard & Poor's Corporation and AA from Fitch IBCA, Inc., three
well-known rating agencies.
18
<PAGE>
GLOSSARY OF TERMS
COMMERCIAL PAPER--Short-term obligations issued by banks, corporations and other
borrowers.
CREDIT ENHANCEMENTS--A bank letter of credit, purchase agreement, insurance,
line of credit or other instrument that provides an additional level of
financial strength for debt securities to supplement the creditworthiness of the
issuer.
DOLLAR-WEIGHTED AVERAGE MATURITY (DWAM)--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, which establishes
policies on bank reserves and regulations, determines the discount rate and the
federal funds rate, and tightens or loosens the availability of credit.
FIRST-TIER SECURITY--Generally, a security rated in the highest credit-rating
category by a requisite number of nationally recognized statistical rating
organizations, such as Moody's, Standard & Poor's-Registered Trademark-, Duff or
Fitch.
MATURITY--The length of time remaining until the issuer of a debt security must
repay the principal amount.
REAL GDP--The national gross domestic product (GDP) is the total value of all
goods and services produced in the United States over a specific period of time
adjusted for the rate of inflation to allow meaningful year-to-year comparisons.
YIELD--The actual annualized income earned on an investment over a stated period
of time (assumed to be generated over a one-year period). An EFFECTIVE YIELD
assumes that the income earned is reinvested.
19
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR THE PERIOD ENDED 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP VALUE ADVANTAGE
SHARES-TM- SHARES-TM-
<S> <C> <C>
- ------------------------------------------------------------------------------
Last seven days 3.02% 3.23%
- ------------------------------------------------------------------------------
Last three months 2.71% 2.92%
- ------------------------------------------------------------------------------
Last 12 months 2.88% 3.09%
- ------------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/98 6/30/98 9/30/98 12/31/98
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------
0-15 days 76.1% 74.6% 75.7% 70.6%
- ------------------------------------------------------------------
16-30 days 0.0% 2.0% 1.8% 1.2%
- ------------------------------------------------------------------
31-60 days 4.7% 4.5% 0.3% 8.6%
- ------------------------------------------------------------------
61-90 days 5.9% 1.1% 3.6% 3.2%
- ------------------------------------------------------------------
91-120 days 4.7% 1.8% 1.2% 1.4%
- ------------------------------------------------------------------
More than 120 days 8.6% 16.0% 17.4% 15.0%
- ------------------------------------------------------------------
Weighted average 35 days 56 days 48 days 39 days
- ------------------------------------------------------------------
</TABLE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR THE PERIOD ENDED 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP VALUE ADVANTAGE
SHARES-TM- SHARES-TM-
<S> <C> <C>
- ------------------------------------------------------------------------------
Last seven days 2.76% 2.96%
- ------------------------------------------------------------------------------
Last three months 2.38% 2.58%
- ------------------------------------------------------------------------------
Last 12 months 2.61% 2.81%
- ------------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/98 6/30/98 9/30/98 12/31/98
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------
0-15 days 67.9% 66.2% 70.1% 64.8%
- ------------------------------------------------------------------
16-30 days 2.4% 5.5% 10.8% 1.6%
- ------------------------------------------------------------------
31-60 days 3.7% 12.7% 3.3% 9.1%
- ------------------------------------------------------------------
61-90 days 6.3% 3.3% 1.6% 6.1%
- ------------------------------------------------------------------
91-120 days 14.1% 3.8% 1.8% 2.2%
- ------------------------------------------------------------------
More than 120 days 5.6% 8.5% 12.4% 16.2%
- ------------------------------------------------------------------
Weighted average 37 days 44 days 43 days 49 days
- ------------------------------------------------------------------
</TABLE>
(1)A portion of the Fund's expenses was reduced during the periods. Had these
expenses not been reduced, yields would have been lower.
20
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB NEW YORK MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR THE PERIOD ENDED 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP VALUE ADVANTAGE
SHARES-TM- SHARES-TM-
<S> <C> <C>
- ------------------------------------------------------------------------------
Last seven days 2.97% 3.21%
- ------------------------------------------------------------------------------
Last three months 2.55% 2.79%
- ------------------------------------------------------------------------------
Last 12 months 2.75% 2.99%
- ------------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/98 6/30/98 9/30/98 12/31/98
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------
0-15 days 72.4% 70.3% 74.6% 70.6%
- ------------------------------------------------------------------
16-30 days 1.1% 1.2% 2.3% 0.0%
- ------------------------------------------------------------------
31-60 days 3.6% 18.6% 5.8% 3.5%
- ------------------------------------------------------------------
61-90 days 3.1% 2.8% 2.3% 5.3%
- ------------------------------------------------------------------
91-120 days 6.5% 0.0% 0.8% 5.2%
- ------------------------------------------------------------------
More than 120 days 13.3% 7.1% 14.2% 15.4%
- ------------------------------------------------------------------
Weighted average 36 days 34 days 50 days 45 days
- ------------------------------------------------------------------
</TABLE>
SCHWAB NEW JERSEY MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR THE PERIOD ENDED 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP
SHARES-TM-
<S> <C>
- ------------------------------------------------------------
Last seven days 2.96%
- ------------------------------------------------------------
Last three months 2.72%
- ------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/98 6/30/98 9/30/98 12/31/98
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------
0-15 days 51.8% 65.1% 66.9% 69.2%
- ------------------------------------------------------------------
16-30 days 4.5% 4.3% 0.0% 2.1%
- ------------------------------------------------------------------
31-60 days 4.3% 7.0% 0.0% 5.8%
- ------------------------------------------------------------------
61-90 days 9.9% 8.5% 15.9% 0.0%
- ------------------------------------------------------------------
91-120 days 13.5% 3.3% 6.7% 0.6%
- ------------------------------------------------------------------
More than 120 days 16.0% 11.8% 10.5% 22.3%
- ------------------------------------------------------------------
Weighted average 49 days 41 days 52 days 49 days
- ------------------------------------------------------------------
</TABLE>
(1)A portion of the Fund's expenses was reduced during the periods. Had these
expenses not been reduced, yields would have been lower.
21
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR THE PERIOD ENDED 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP
SHARES-TM-
<S> <C>
- ------------------------------------------------------------
Last seven days 3.09%
- ------------------------------------------------------------
Last three months 2.80%
- ------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/98 6/30/98 9/30/98 12/31/98
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------
0-15 days 70.4% 72.5% 69.2% 72.6%
- ------------------------------------------------------------------
16-30 days 2.9% 0.8% 0.0% 0.0%
- ------------------------------------------------------------------
31-60 days 0.0% 3.0% 3.6% 5.2%
- ------------------------------------------------------------------
61-90 days 4.7% 1.4% 1.9% 2.5%
- ------------------------------------------------------------------
91-120 days 1.8% 0.8% 8.6% 4.0%
- ------------------------------------------------------------------
More than 120 days 20.2% 21.5% 16.7% 15.7%
- ------------------------------------------------------------------
Weighted average 56 days 60 days 56 days 50 days
- ------------------------------------------------------------------
</TABLE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR THE PERIOD ENDED 12/31/98(1)
<TABLE>
<CAPTION>
SWEEP
SHARES-TM-
<S> <C>
- ------------------------------------------------------------
Last seven days 2.99%
- ------------------------------------------------------------
Last three months 2.74%
- ------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/98 6/30/98 9/30/98 12/31/98
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------
0-15 days 88.8% 75.9% 78.5% 68.0%
- ------------------------------------------------------------------
16-30 days 0.6% 2.6% 1.2% 0.0%
- ------------------------------------------------------------------
31-60 days 0.0% 0.0% 1.6% 10.9%
- ------------------------------------------------------------------
61-90 days 0.7% 2.7% 0.0% 0.7%
- ------------------------------------------------------------------
91-120 days 0.0% 2.8% 2.6% 2.4%
- ------------------------------------------------------------------
More than 120 days 9.9% 16.0% 16.1% 18.0%
- ------------------------------------------------------------------
Weighted average 27 days 52 days 42 days 53 days
- ------------------------------------------------------------------
</TABLE>
(1)A portion of the Fund's expenses was reduced during the periods. Had these
expenses not been reduced, yields would have been lower.
22
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1998
Par Value
------- ---------
VARIABLE RATE OBLIGATIONS -- 62.1% (a)(f)
ALABAMA -- 0.6%
Alabama State IDA (Scientific
Project)
4.40%, 01/07/99 $3,500 $ 3,500
Alabama State IDA RB (Cash Value
Project)
4.10%, 01/07/99 3,150 3,150
Birmingham, Alabama GO
Series 1992A
3.90%, 01/07/99 5,600 5,600
Birmingham, Alabama Unlimited GO
Refunding Bonds Series 1995
4.00%, 01/07/99 4,000 4,000
Citronelle, Alabama IDB Pollution
Control Revenue Refunding Bonds
(AKZO Chemicals, Inc. Project)
4.20%, 01/07/99 1,100 1,100
Decatur, Alabama IDB Solid Waste
Disposal RB (Trico Steel Project)
Series 1997
4.20%, 01/07/99 5,700 5,700
Decatur, Alabama IDRB (Alabama
Farmers Corp.)
4.20%, 01/07/99 2,900 2,900
Dothan, Alabama IDB RB (Baxley
Blowpipe Project)
4.15%, 01/07/99 800 800
Fort Payne, Alabama IDA Base Tax
Exempt Adjustable Mode IDRB
(Charleston Hosiery Project)
Series 1997
4.20%, 01/07/99 2,000 2,000
Mobile County, Alabama IDB Pollution
Control Revenue Refunding Bonds
(Ultraform Co. Project) Series 1995A
4.05%, 01/07/99 7,480 7,480
Mobile County, Alabama IDB RB
(Ultraform Co. Project) Series B
4.05%, 01/07/99 1,000 1,000
Scottsboro, Alabama GO
4.05%, 01/07/99 4,830 4,830
Tuscaloosa, Alabama IDRB (Knight
Special Project)
4.15%, 01/07/99 1,200 1,200
------
43,260
------
Par Value
------- ---------
ALASKA -- 0.2%
Valdez, Alaska Marine Terminal
Revenue Refunding Bonds (Exxon
Pipeline Co. Project) Series 1993C
5.10%, 01/01/99 $16,375 $16,375
-------
ARIZONA -- 1.0%
Arizona Educational Loan Marketing
Corp. RB Series A
4.10%, 01/07/99 12,605 12,605
Arizona Health Facilities Authority
Hospital System RB (Arizona
Volunteer Hospital Federation)
Series 1985A
4.00%, 01/07/99 3,270 3,270
Arizona Health Facilities Authority
Hospital System RB (Arizona
Volunteer Hospital Federation)
Series 1985B
4.00%, 01/07/99 7,940 7,940
Arizona Health Facilities Authority
Hospital System RB (Northern
Arizona Health Care) Series 1996B
4.00%, 01/07/99 17,850 17,850
Arizona Health Facilities Authority
Hospital System RB (Samcor Project)
1986 Loan Pool
4.00%, 01/07/99 6,340 6,340
Phoenix, Arizona Civic Improvement
Excise Tax RB (Airport
Improvements)
4.15%, 01/07/99 1,000 1,000
Phoenix, Arizona IDA RB
(Vaw America Inc. Project)
4.20%, 01/07/99 3,000 3,000
Tempe, Arizona Excise Tax RB
5.00%, 01/01/99 2,100 2,100
Yavapai County, Arizona IDRB
(Yavapai Regional Medical Center)
4.00%, 01/07/99 14,100 14,100
Yuma County, Arizona IDA RB
(Meadowcraft, Inc. Project)
Series 1997
4.20%, 01/07/99 1,000 1,000
Yuma County, Arizona IDA M/F
Housing RB (El Encanto Apartments)
Series A
3.95%, 01/07/99 2,915 2,915
-------
72,120
-------
23
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
ARKANSAS -- 0.3%
Arkansas Development Finance
Authority IDRB (C&C Holding Co.
Project) Series 1998
4.20%, 01/07/99 $ 1,600 $ 1,600
Independence County, Arkansas IDRB
(Ideal Baking Project)
4.20%, 01/07/99 6,200 6,200
Independence County, Arkansas IDRB
(Townsends of Arkansas, Inc.
Project)
4.05%, 01/07/99 9,000 9,000
Warren Park, Arizona Solid Waste
Disposal RB (Potlatch Corp. Project)
4.15%, 01/07/99 1,000 1,000
------
17,800
------
CALIFORNIA -- 1.7%
California Health Facilities Financing
Authority RB (Adventist Hospital)
Series 1998B
5.00%, 01/07/99 4,300 4,300
California Health Facilities Financing
Authority RB (Catholic Healthcare
West) Series 1988B
3.60%, 01/07/99 20,000 20,000
California Health Facilities Financing
Authority RB (Catholic Healthcare
West) Series 1997B
3.60%, 01/07/99 200 200
California Higher Education Loan
Authority Student Loan Revenue
Refunding Bonds Series 1987C1
3.85%, 01/07/99 31,600 31,600
California Higher Education Loan
Authority Student Loan Revenue
Refunding Bonds Series E1
4.00%, 01/07/99 5,000 5,000
California Pollution Control Financing
Authority RB (Pacific Gas & Electric
Company)
5.00%, 01/01/99 6,800 6,800
California Pollution Control Financing
Authority RB (Southern California
Edison) Series D
5.20%, 01/01/99 1,000 1,000
Par Value
------- ---------
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Equity Stanislaus Project)
5.10%, 01/01/99 $1,300 $ 1,300
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Shell Martinez Refining Project)
Series A
4.90%, 01/01/99 4,700 4,700
California State Economic
Development Financing Authority
IDRB (Mercury Air Group)
3.85%, 01/07/99 5,000 5,000
California Statewide Community
Development Authority M/F
Housing RB
5.15%, 01/01/99 4,400 4,400
Irvine Ranch, California Improvement
Board RB (District Number 97-16)
5.10%, 01/01/99 7,277 7,277
Irvine Ranch, California Improvement
Bond Act 1915 Special Assessment
Bonds (District 97-17)
5.10%, 01/01/99 4,200 4,200
Irvine Ranch, California Water District
Consolidated GO RB (Districts 140,
240, 105, 250)
5.10%, 01/01/99 900 900
Irvine Ranch, California Water District
Consolidated Refunding Bonds
Series 1993A
5.00%, 01/01/99 1,700 1,700
Los Angeles County, California
Metropolitan Transportation
Authority Revenue Refunding Bonds
Series 1993A
3.75%, 01/07/99 8,370 8,370
Sacramento County, California COP
(Administration Center & Court
House Project)
3.70%, 01/07/99 7,700 7,700
--------
114,447
--------
COLORADO -- 3.2%
Adams County, Colorado Economic
Development Authority Tax
Increment RB (Westminster Plaza
Urban Renewal Project)
4.15%, 01/07/99 4,445 4,445
24
<PAGE>
Par Value
------- ---------
Adams County, Colorado IDRB
(City View Park Project) Series 1985
4.05%, 01/07/99 $5,700 $ 5,700
Arapahoe County, Colorado Industrial
Development Revenue Refunding
Bonds (Denver Jet Center Project)
Series 1997
3.40%, 01/01/99 1,000 1,000
Central City, Colorado M/F Housing RB
(Gold Mountain Apartment Project)
4.05%, 01/07/99 8,250 8,250
Colorado Health Facilities Authority RB
(Catholic Health Project) Series B
3.90%, 01/07/99 15,600 15,600
Colorado Health Facilities Authority RB
(National Benevolent Assoc. Project)
4.10%, 01/07/99 2,300 2,300
Colorado Health Facilities Authority RB
(North Colorado Medical Center
Project)
3.95%, 01/07/99 3,400 3,400
Colorado Student Obligation Bond
Authority Student Loan RB
(Colorado University) Series 1990A
3.95%, 01/07/99 13,200 13,200
Colorado Student Obligation Bond
Authority Student Loan RB
(Colorado University) Series 1993B
3.95%, 01/07/99 10,700 10,700
Colorado Student Obligation Bond
Authority Student Loan RB
Series 1989A
3.95%, 01/07/99 20,000 20,000
Colorado Student Obligation Bond
Authority Student Loan RB
Series 1997D
3.95%, 01/07/99 22,500 22,500
Denver, Colorado City & County
Airport System RB (Robinson Dairy
Project)
4.15%, 01/07/99 4,275 4,275
Denver, Colorado City & County
Airport System RB Series 1992D
4.10%, 01/07/99 49,400 49,400
Denver, Colorado City & County
Airport System RB Series 1992F
4.10%, 01/07/99 16,000 16,000
Par Value
------- ---------
Denver, Colorado City & County
Airport System RB Series 1992G
4.10%, 01/07/99 $20,000 $ 20,000
El Paso County, Colorado RB
(Colorado Springs World Arena)
4.05%, 01/07/99 7,900 7,900
Pueblo County, Colorado IDRB
(Kaiser Aerospace & Electric)
4.20%, 01/07/99 5,600 5,600
Smith Creek, Colorado Metropolitan
District RB Series 1997
4.05%, 01/07/99 2,250 2,250
Wheatridge County, Colorado IDRB
(Leaf Inc. Project)
3.90%, 01/07/99 5,000 5,000
--------
217,520
--------
CONNECTICUT -- 0.2%
Connecticut Development Authority
Pollution Control RB (Connecticut
Light & Power) Series 1985
3.80%, 01/07/99 16,200 16,200
--------
DELAWARE -- 0.1%
Delaware State Economic Development
Authority RB (Hospital Billing
Collection Project) Series C
4.25%, 01/07/99 5,200 5,200
Sussex County, Delaware RB
(Baywood LLC Project) Series A
4.25%, 01/06/99 2,400 2,400
--------
7,600
--------
DISTRICT OF COLUMBIA -- 0.6%
District of Columbia Airports
Authority System Revenue
Refunding Bonds Series 1997C
4.00%, 01/07/99 43,300 43,300
--------
FLORIDA -- 1.5%
Florida Capital Financing Authority RB
(Capital Project Loan Program
Project) Series 1997A
4.00%, 01/07/99 23,395 23,395
Florida Municipal Power Agency
Revenue Refunding Bonds
(Stanton II Project) Series 1997
3.75%, 01/07/99 5,500 5,500
25
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Florida State Finance Authority
(Florida Hospital Association -
Capital Projects Loan Program)
Series 1998A
3.75%, 01/07/99 $9,300 $ 9,300
Hillsborough County, Florida M/F
Housing RB (Brandon Crossing)
3.85%, 01/07/99 100 100
Jacksonville, Florida RB (Capital
Project)
3.85%, 01/07/99 15,800 15,800
Miami-Dade County, Florida IDRB
(Airbus Service Co. Project)
Series 1998A
3.70%, 01/07/99 300 300
Palm Beach County, Florida HDA M/F
Revenue Refunding Bonds (Spinnaker
Landing Project)
4.10%, 01/07/99 3,145 3,145
Palm Beach County, Florida Health
Facilities Authority Revenue
Refunding Bonds (Boca Raton
Community Hospital Project)
3.55%, 01/07/99 1,000 1,000
Pasco County, Florida COP
4.00%, 01/07/99 43,770 43,770
--------
102,310
--------
GEORGIA -- 3.8%
Athens-Clarke, Jackson & Morgan
County, Georgia IDRB (Mayfield
Dairy Farms Inc. Project)
4.20%, 01/07/99 6,850 6,850
Bartow County, Georgia IDRB
(Bartow Paving Co. Project)
4.20%, 01/07/99 3,000 3,000
Bartow County, Georgia IDRB
(Matthew Contracting Project)
4.15%, 01/07/99 4,800 4,800
Cartersville, Georgia Development
Authority IDRB (Cartersville
Facilities Project)
4.10%, 01/07/99 2,960 2,960
Cherokee County, Georgia IDRB
(Universal Alloy)
4.20%, 01/07/99 4,900 4,900
Par Value
------- ---------
Clayton County, Georgia IDRB
(Wilson Holdings Project)
4.10%, 01/07/99 $ 1,700 $ 1,700
Cobb County, Georgia HFA M/F
Housing RB (Walton Green Project)
4.20%, 01/07/99 13,500 13,500
Cobb County, Georgia HFA M/F
Housing RB (Williamstown
Apartment Project)
4.20%, 01/07/99 2,000 2,000
Crisp County, Georgia Solid Waste
Management
3.82%, 01/07/99 20,000 20,000
Dekalb County, Georgia Development
Authority IDRB (Arbor Montessori
School Project)
4.00%, 01/07/99 1,100 1,100
Dekalb County, Georgia Development
Authority IDRB (Siemens Energy,
Inc. Project)
4.15%, 01/07/99 3,750 3,750
Dekalb County, Georgia Development
Authority IDRB (Truman Properties
Ltd. Liability Corp. Project)
4.20%, 01/07/99 3,000 3,000
Dekalb County, Georgia Development
Authority IDRB (Vimco Project)
4.10%, 01/07/99 1,625 1,625
Dekalb County, Georgia HFA M/F
Housing RB (Wood Hills Apartment
Project)
4.00%, 01/07/99 5,250 5,250
Douglas County, Georgia IDA RB
(Blue Circle Project)
4.15%, 01/07/99 3,800 3,800
Douglas County, Georgia IDA Revenue
Refunding Bonds (Mima Inc.
Project)
3.90%, 01/07/99 4,300 4,300
Fayette County, Georgia IDRB
(Norman W. Paschell Co. Project)
4.15%, 01/07/99 1,200 1,200
Fulton County, Georgia Development
Authority RB (Atlanta International
School Project)
4.00%, 01/07/99 3,000 3,000
26
<PAGE>
Par Value
------- ---------
Fulton County, Georgia Development
Authority RB (Woodruff Arts Center
Project)
4.10%, 01/07/99 $10,000 $ 10,000
Georgia Municipal Gas Authority RB
(Gas Portfolio II Project) Series B
3.90%, 01/07/99 1,900 1,900
Gwinnett County, Georgia HFA M/F
Housing RB
4.00%, 01/07/99 5,000 5,000
Hapeville, Georgia IDA (Hapeville
Hotel Ltd. Project)
5.05%, 01/01/99 4,500 4,500
Hart County, Georgia Industrial
Building Authority RB (Dundee
Mills Project)
4.10%, 01/07/99 3,060 3,060
Jefferson County, Georgia Development
Authority IDRB (Grove River Mills
Project) Series 1997
4.20%, 01/07/99 3,500 3,500
Lafayette, Georgia Development
Authority RB (Dixie Group Project)
4.10%, 01/07/99 3,000 3,000
Laurens County, Georgia Development
Authority Solid Waste Disposal RB
(Southeast Paper Manufacturing Co.
Project)
4.20%, 01/07/99 51,000 51,000
Macon-Bibb County, Georgia Hospital
Authority RB (The Medical Center
of Central Georgia Project)
Series 1998
4.00%, 01/07/99 4,000 4,000
Richmond County, Georgia IDA RB
(BOK Group Project)
4.10%, 01/07/99 5,000 5,000
Roswell, Georgia HFA M/F Housing RB
(Gables Realty Wood Crossing
Project)
4.10%, 01/07/99 11,650 11,650
Savannah, Georgia Economic
Development Authority RB (Georgia
Kaolin Inc.)
4.15%, 01/07/99 11,000 11,000
Par Value
------- ---------
Savannah, Georgia Economic
Development Authority RB (Home
Depot Project) Series 1995B
4.05%, 01/07/99 $ 5,000 $ 5,000
Savannah, Georgia HFA M/F
Housing RB (Chatham Gardens
Project) Series 1997
4.10%, 01/06/99 2,995 2,995
Smyrna, Georgia HFA M/F
Housing RB (Walton Park Phase 2
Project)
4.20%, 01/07/99 13,500 13,500
Smyrna, Georgia HFA M/F Housing RB
(Walton Park Project)
4.20%, 01/07/99 8,000 8,000
Sugar Hill, Georgia HFA M/F
Housing RB (Level Creek Apartments
Project)
4.25%, 01/07/99 12,790 12,790
Summerville, Georgia Development
Authority RB (Image Industry
Project) Series 1997
4.15%, 01/07/99 9,000 9,000
Winder-Barrow, Georgia Industrial
Building Authority IDRB (The
Concrete Co.)
4.30%, 01/07/99 4,800 4,800
Worth County, Georgia IDA Revenue
Refunding Bonds (Seabrook Project)
Series 1996B
4.10%, 01/07/99 1,400 1,400
--------
257,830
--------
HAWAII -- 0.4%
Hawaii Department of Budget &
Finance Special Purpose Mortgage RB
(Adventist Health System West)
3.95%, 01/07/99 7,600 7,600
Hawaii Student Loan RB (Secondary
Market Services Corp.) Series
1995-II
4.00%, 01/07/99 8,100 8,100
Honolulu, Hawaii City & County M/F
Housing RB (Iolani Regents Project)
Series 1990A
4.20%, 01/07/99 9,050 9,050
--------
24,750
--------
27
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
IDAHO -- 0.4%
Custer County, Idaho IDRB Solid
Waste Disposal (Hecla Mining Co.
Project)
4.20%, 01/07/99 $ 4,500 $ 4,500
Idaho HFA Housing RB (Assisted
Living Concepts Project)
4.20%, 01/07/99 3,875 3,875
Idaho Student Loan RB Series A
4.25%, 01/07/99 19,200 19,200
--------
27,575
--------
ILLINOIS -- 8.4%
Aurora, Kane, & Dupage Counties,
Illinois IDRB (North American
Plastics Corp. Project)
4.20%, 01/07/99 5,400 5,400
Bartlett, Illinois M/F Housing RB
(Bartlett Square Apartments)
Series 1995A
4.00%, 01/07/99 2,100 2,100
Batavia, Illinois Development RB
(American Industrial Technologies)
4.25%, 01/07/99 2,200 2,200
Carol Stream, Illinois M/F Housing
Revenue Refunding Bonds
(St. Charles Square Project)
4.15%, 01/07/99 4,415 4,415
Centralia, Illinois IDA RB
(Consolidated Foods Corp. &
Hollywood Brands, Inc. Project)
4.20%, 01/07/99 4,500 4,500
Chicago, Illinois IDRB (Morse
Automotive Project) Series 1995
4.20%, 01/07/99 2,400 2,400
Chicago, Illinois O'Hare International
Airport RB ACES (General Airport
Second Lien) Series B1
4.05%, 01/07/99 25,600 25,600
Chicago, Illinois O'Hare International
Airport RB ACES (General Airport
Second Lien) Series B2
4.05%, 01/07/99 9,300 9,300
Chicago, Illinois O'Hare International
Airport Special Facility RB
4.10%, 01/07/99 37,900 37,900
Par Value
------- ---------
East Dundee, Kane & Cook Counties,
Illinois IDRB (Otto Engine Project)
4.15%, 01/07/99 $ 2,500 $ 2,500
Elmhurst, Illinois IDRB
(ELM Machining Corp. Project)
4.25%, 01/07/99 3,290 3,290
Glendale Heights, Illinois IDRB
(York Corrugated Container Project)
4.20%, 01/07/99 1,600 1,600
Hampshire, Illinois IDRB (Poli-Film
America Project) Series 1998A
4.10%, 01/07/99 7,000 7,000
Illinois Development Finance Authority
(American Youth Hostels Project)
4.25%, 01/07/99 4,250 4,250
Illinois Development Finance Authority
(Anatol Enterprises)
4.25%, 01/07/99 4,000 4,000
Illinois Development Finance Authority
(Chicago Academy of Science Project)
Series 1998
4.05%, 01/07/99 5,700 5,700
Illinois Development Finance Authority
(Palos Common Hospital Project)
Series 1998
3.65%, 01/07/99 10,000 10,000
Illinois Development Finance
Authority (Roll Service Inc. Project)
4.25%, 01/07/99 2,230 2,230
Illinois Development Finance
Authority (Wheaton Academy
Project)
4.05%, 01/07/99 8,000 8,000
Illinois Development Finance
Authority Hospital RB (Palos
Community Hospital) Series 1994-1
4.05%, 01/07/99 33,700 33,700
Illinois Development Finance
Authority Hospital RB (Palos
Community Hospital) Series 1994-2
4.05%, 01/07/99 13,900 13,900
Illinois Development Finance
Authority IDRB (Camcraft Inc.
Project)
4.25%, 01/07/99 2,600 2,600
28
<PAGE>
Par Value
------- ---------
Illinois Development Finance
Authority IDRB (Catholic Charities)
4.05%, 01/07/99 $ 9,460 $ 9,460
Illinois Development Finance
Authority IDRB (Chicago Corrugated
Box Company) Series 6
4.25%, 01/07/99 1,150 1,150
Illinois Development Finance
Authority IDRB (Knead Dough
Baking Co.)
4.05%, 01/07/99 6,980 6,980
Illinois Development Finance
Authority IDRB (MCL Inc. Project)
4.25%, 01/07/99 2,050 2,050
Illinois Development Finance
Authority IDRB (Molding Project)
4.20%, 01/07/99 1,950 1,950
Illinois Development Finance
Authority IDRB (Perkin Paperboard
Co. LP) Series 1994
4.15%, 01/07/99 5,500 5,500
Illinois Development Finance
Authority IDRB (Presbyterian Home
Lake) Series 1996A
4.05%, 01/07/99 48,400 48,400
Illinois Development Finance
Authority IDRB (Radiological
Society Project) Series 1997
4.10%, 01/07/99 4,900 4,900
Illinois Development Finance
Authority IDRB (River Graphics
Corp. Project) Series 1996
4.25%, 01/07/99 3,200 3,200
Illinois Development Finance
Authority IDRB (SMF Inc. Project)
Series A
3.65%, 01/07/99 2,125 2,125
Illinois Development Finance
Authority Pollution Control RB
(Central Illinois Public Service Co.
Project)
4.00%, 01/07/99 22,000 22,000
Illinois Development Finance
Authority RB (Catholic Charities
Housing Project) Series 1993A
4.05%, 01/07/99 16,060 16,060
Par Value
------- ---------
Illinois Development Finance
Authority RB (Chicago Academy of
Science Project)
4.05%, 01/07/99 $ 4,715 $ 4,715
Illinois Development Finance
Authority RB (Cloverhill Pastry
Project)
4.25%, 01/07/99 5,680 5,680
Illinois Development Finance
Authority RB (Korex Corp. Project)
4.15%, 01/07/99 4,000 4,000
Illinois Development Finance
Authority RB (Lake Forest Academy
Project)
4.05%, 01/07/99 2,000 2,000
Illinois Development Finance
Authority RB (St. Ignatius College
Prep Project)
4.05%, 01/07/99 2,200 2,200
Illinois Development Finance
Authority RB (Haven Illiana
Christian)
4.05%, 01/07/99 9,975 9,975
Illinois Development Finance
Authority RB (Village Oak Park
Residence)
4.15%, 01/07/99 2,155 2,155
Illinois Development Finance
Authority Residential Rental RB
(F.C. Harris Pavillion Project)
Series 1994
4.00%, 01/07/99 27,510 27,510
Illinois Development Finance
Authority Residential Rental RB
(River Oak Project)
4.20%, 01/07/99 32,000 32,000
Illinois Development Finance
Authority Revenue Refunding Bonds
(Rich Products Corp. Project)
4.10%, 01/07/99 1,525 1,525
Illinois Educational Facility
Authority RB (Chicago Historical
Society)
4.10%, 01/07/99 8,200 8,200
Illinois Educational Facility
Authority RB (Chicago Zoological
Society Brookfield Zoo) Series B
4.05%, 01/07/99 2,800 2,800
29
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Illinois Health Facility Authority RB
(Bensenville Home Society Project)
Series 1989A
3.95%, 01/07/99 $ 2,350 $ 2,350
Illinois Health Facility Authority RB
(Ingalls Memorial Hospital)
Series 1985C
4.00%, 01/07/99 1,100 1,100
Illinois Health Facility Authority RB
(Washington & Jane Smith Home)
Series 1991
4.15%, 01/07/99 2,800 2,800
Illinois HFA M/F Housing RB
(Camelot Project) Series 1997
4.05%, 01/07/99 14,170 14,170
Illinois State Toll Highway Authority
Series B
4.25%, 01/07/99 42,200 42,200
Illinois State Toll Highway RB
Series B (d)
4.45%, 01/07/99 36,100 36,100
Illinois Student Assistance
Commission Student Loan RB
Series 1996A
4.05%, 01/07/99 8,400 8,400
Lombard, Illinois Industrial
Development Revenue Refunding
Bonds / (B & H Partnership
Project)
4.40%, 01/07/99 1,850 1,850
McHenry County, Illinois IDA
Revenue Refunding Bonds (Dean
Foods Co. Project)
4.10%, 01/07/99 2,675 2,675
New Lenox, Illinois IDRB
(Panduit Corp. Project)
4.15%, 01/07/99 4,400 4,400
Richton Park, Illinois IDRB
(Avatar Corp. Project)
4.25%, 01/07/99 2,000 2,000
Rockford, Illinois IDRB (Industrial
Welding Supply, Inc. Project)
4.25%, 01/07/99 2,000 2,000
Rockford, Illinois IDRB (Ring Can
Corp. Project)
4.10%, 01/07/99 3,000 3,000
Par Value
------- ---------
Tinley Park, Illinois IDA RB (Beverly
Manufacturing Co. Project)
Series 1997A
4.25%, 01/07/99 $ 2,640 $ 2,640
Tremont, Illinois IDRB (Hanna Steel
Project)
3.45%, 01/07/99 9,500 9,500
Upper Illinois River Valley
Development Authority Bonds
(Exolon Esk Co. Project) Series A
4.20%, 01/07/99 4,405 4,405
Village of Huntley, McHenry Kane
County Special Civic Area # 9 Special
Tax Boards Series 1998B
4.05%, 01/07/99 9,250 9,250
Woodstock, Illinois M/F Housing RB
(Prairie Trail) Series 1996A
4.25%, 01/07/99 3,425 3,425
Woodstock, Illinois M/F Housing RB
(Prairie View Ltd.)
4.25%, 01/07/99 2,035 2,035
Yorkville, Illinois IDRB (F.E. Wheaton
& Co. Inc. Project) Series 1996
4.25%, 01/07/99 1,600 1,600
--------
575,020
--------
INDIANA -- 1.1%
Crawfordsville, Indiana IDRB (National
Service Industries, Inc. Project)
4.10%, 01/07/99 4,000 4,000
Gary, Indiana Economic Development
Authority Revenue Refunding Bonds
(Miller Partners Home Improvement
Project ) Series 1996A
4.10%, 01/07/99 20,540 20,540
Gary, Indiana Economic Development
Authority Revenue Refunding Bonds
(Tinplate Partnership Project)
Series 1997A
4.15%, 01/07/99 3,500 3,500
Hammond, Indiana Economic
Development RB (Lear Seating Corp.
Project) Series 1994
3.70%, 01/07/99 9,200 9,200
30
<PAGE>
Par Value
------- ---------
Indiana Development Finance
Authority IDRB (Cives Corp. Project)
Series 1998
4.15%, 01/07/99 $ 2,550 $ 2,550
Indiana Secondary Market Educational
Loans Inc. Student Loan RB
Series B
4.00%, 01/07/99 27,000 27,000
Indianapolis, Indiana Economic
Development Authority RB
(Herff-Jones, Inc. Project)
4.13%, 01/07/99 4,100 4,100
Indianapolis, Indiana Resource
Recovery Bonds (Ogden Martin
Systems Inc. Project) Series 1987
5.15%, 01/01/99 1,000 1,000
St. Joseph College, Indiana Economic
Development RB Series 1997B
4.15%, 01/07/99 3,675 3,675
--------
75,565
--------
IOWA -- 0.4%
Iowa Student Loan Liquidity Corp.
Student Loan RB Series B
3.95%, 01/07/99 28,000 28,000
Saint Joseph County, Iowa
Economical Development Authority
(Western Manor)
4.15%, 01/07/99 2,130 2,130
--------
30,130
--------
KANSAS -- 0.3%
Kansas City, Kansas IDRB (Owen
Industries, Inc. Project) Series 1987
4.20%, 01/07/99 600 600
Kansas State Development Finance
Authority M/F Housing RB (Bluffs
Olathe Apartments) Series 1998X
4.35%, 01/07/99 9,500 9,500
Olathe, Kansas IDRB (Garmin
International Inc. Project)
Series 1995
4.20%, 01/07/99 1,700 1,700
Wichita, Kansas Airport Facilities
Revenue Refunding Bonds (Cessna
Service Center Project)
4.00%, 01/07/99 4,985 4,985
Par Value
------- ---------
Wichita, Kansas Airport Facilities
Revenue Refunding Bonds
(Flightsafety International, Inc.)
4.20%, 01/07/99 $ 4,000 $ 4,000
--------
20,785
--------
KENTUCKY -- 1.4%
Elizabethtown, Kentucky IDRB
(Aztec Project)
4.10%, 01/07/99 3,000 3,000
Henderson County, Kentucky Solid
Waste Disposal RB (Hudson Foods,
Inc. Project)
4.15%, 01/07/99 14,300 14,300
Jefferson County, Kentucky Sports
Stadium RB (University of Louisville
Athletic Department)
4.05%, 01/07/99 9,200 9,200
Kentucky Higher Education Student
Loan Corp. Insured Student Loan RB
Series 1991E
3.95%, 01/07/99 20,450 20,450
Kentucky Higher Education Student
Loan Corp. Insured Student Loan RB
Series 1996A
3.95%, 01/07/99 14,900 14,900
Lebanon, Kentucky IDRB (Wallace
Computer Services, Inc.)
4.20%, 01/07/99 5,000 5,000
Maysville, Kentucky Industrial
Building RB (Green Tokai Building)
4.15%, 01/07/99 5,740 5,740
Murray, Kentucky IDA Revenue
Refunding Bonds (Dean Foods Co.
Project)
4.20%, 01/07/99 6,000 6,000
Owensboro, Kentucky Limited
Obligation RB (Dart Polymers, Inc.
Project) Series 1985A
3.65%, 01/07/99 1,900 1,900
Richmond, Kentucky IDRB (Mikron
Project)
4.00%, 01/07/99 9,500 9,500
Wilson County, Kentucky IDB RB
(Perma Pipe Project)
4.30%, 01/07/99 3,150 3,150
--------
93,140
--------
31
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
LOUISIANA -- 1.2%
Calcasieu Parish Lousiana IDB
Realty Project)
4.10%, 01/07/99 $ 1,990 $ 1,990
Lafayette Parish, Louisiana IDRB
(Westwood Village Project)
4.10%, 01/07/99 3,435 3,435
New Orleans, Louisiana Aviation
Board RB (Passenger Facility
Charge Projects)
4.30%, 01/07/99 5,100 5,100
New Orleans, Louisiana Aviation
Board RB Series 1993B
4.05%, 01/07/99 68,695 68,695
Parish of Desota, Louisiana Pollution
Control RB (Central Louisiana
Electric Company Project)
3.85%, 01/07/99 400 400
--------
79,620
--------
MAINE -- 1.2%
Maine Education Loan Marketing
Corp. Student Loan RB Series
1997A1
3.95%, 01/07/99 38,500 38,500
Maine Education Loan Marketing
Corp. Student Loan RB
Series 1997A2
3.95%, 01/06/99 36,900 36,900
Maine State HFA M/F Housing RB
(Park Village Apartments Project)
4.00%, 01/07/99 6,000 6,000
--------
81,400
--------
MARYLAND -- 0.5%
Howard County, Maryland M/F
Housing RB (Avalon Meadows
Project)
3.85%, 01/07/99 4,900 4,900
Maryland State Economic
Development Corp. IDRB (Dixon
Valve Project)
4.25%, 01/07/99 4,000 4,000
Maryland State Health & Higher
Education Facility Authority
Pooled RB (Kennedy Krieger Project)
Series 1993D
4.15%, 01/07/99 2,000 2,000
Par Value
------- ---------
Maryland State Health & Higher
Education Facility Authority
Pooled RB (Pooled Loan Program)
Series 1985A
3.95%, 01/07/99 $ 9,700 $ 9,700
Montgomery County, Maryland
Housing Opportunity Commission
Housing RB (Draper Lane Project)
Series 1991I
4.05%, 01/07/99 16,600 16,600
--------
37,200
--------
MASSACHUSETTS -- 0.1%
Massachussets Industrial Finance
Authority (Arkansas Electronic
Products Corp. Project)
4.20%, 01/07/99 3,800 3,800
--------
MICHIGAN -- 1.2%
Grand Rapids, Michigan, Economic
Development Corp. RB (Amway
Hotel Corp. Project) Series A
4.05%, 01/07/99 7,800 7,800
Michigan State Hospital Finance
Authority RB (Martin Luther
Memorial Home Inc. Project)
4.05%, 01/07/99 8,520 8,520
Michigan State Strategic Fund Ltd.
Obligation RB (Advance Plastics
Corp.)
4.20%, 01/07/99 1,750 1,750
Michigan State Strategic Fund Ltd.
Obligation RB (Autocam Corp.
Project)
4.20%, 01/07/99 2,395 2,395
Michigan State Strategic Fund Ltd.
Obligation RB (EPI Printers Inc.
Project)
4.20%, 01/07/99 4,400 4,400
Michigan State Strategic Fund Ltd.
Obligation RB (John Widdicomb Co.
Project)
4.20%, 01/07/99 2,555 2,555
Michigan State Strategic Fund Ltd.
Obligation RB (Manufacturer's
Project) Series 1991
4.20%, 01/07/99 1,675 1,675
32
<PAGE>
Par Value
------- ---------
Michigan State Strategic Fund Ltd.
Obligation RB (Mechanics Uniform
Rental Project)
4.20%, 01/07/99 $ 1,000 $ 1,000
Michigan State Strategic Fund Ltd.
Obligation RB (United Machining
Project) Series 1998
4.20%, 01/07/99 7,000 7,000
Michigan State Strategic Fund Ltd.
Obligation RB Series 1998
4.20%, 01/07/99 4,600 4,600
Michigan State Strategic Fund Ltd.
Obligation RB Series B
4.00%, 01/07/99 2,000 2,000
Wayne Charter County, Michigan
Airport RB (Detroit Metropolitan
County Project) Series 1996A
4.15%, 01/07/99 6,300 6,300
Wayne Charter County, Michigan
Airport RB (Detroit Metropolitan
County Project) Series B
3.95%, 01/07/99 30,910 30,910
--------
80,905
--------
MINNESOTA -- 0.4%
Bloomington, Minnesota Port
Authority Special Tax RB (Mall of
America Project) Series 1996B
3.55%, 01/07/99 3,900 3,900
Bloomington, Minnesota Port
Authority Tax Increment Revenue
Refunding Bonds (Mall of America
Project) Series 1995A
3.55%, 01/07/99 6,000 6,000
Hennepin County, Minnesota
Unlimited GO Series 1995C
4.05%, 01/07/99 1,900 1,900
Hennepin County, Minnesota
Unlimited GO Series 1996C
4.20%, 01/07/99 4,950 4,950
Minnesota Agriculture & Economic
Development RB (Evangelical
Lutheran Project)
4.10%, 01/07/99 5,500 5,500
Par Value
------- ---------
Minnesota State Higher Education
Facilities Authority RB (University
of St. Thomas Project)
4.00%, 01/07/99 $ 5,700 $ 5,700
--------
27,950
--------
MISSISSIPPI -- 0.1%
Mississippi Business Financial Corp.
IDRB (Omega Motion Project)
Series 1996
4.20%, 01/07/99 6,800 6,800
--------
MISSOURI -- 0.6%
Missouri Higher Education Loan
Authority Student Loan RB Series
1988A
4.00%, 01/07/99 19,900 19,900
Missouri State Development Finance
Board IDRB (H.R. Williams Mill
Supply Project) Series 1995
4.10%, 01/07/99 3,100 3,100
Missouri State Development Finance
Board IDRB (Milbank Manufacturing
Co. Project)
4.20%, 01/07/99 3,000 3,000
St. Charles, Missouri IDA RB (Land
Development Co. Project)
4.09%, 01/07/99 3,300 3,300
St. Clair, Missouri IDA RB (Private
Dynaquip)
4.05%, 01/07/99 2,000 2,000
St. Joseph, Missouri IDRB (Altec
Industries Inc. Project)
4.10%, 01/07/99 4,000 4,000
St. Louis, Missouri IDA RB (Kessler
Container Project)
4.15%, 01/07/99 2,500 2,500
Washington, Missouri IDA RB
(Pauwels Transformer Project)
4.09%, 01/07/99 3,700 3,700
--------
41,500
--------
MONTANA -- 0.1%
Montana State Health Facility
Authority RB (Health Care Pooled
Loan Program Project) Series 1985A
4.00%, 01/07/99 6,450 6,450
--------
33
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
NEBRASKA -- 0.5%
Dodge County, Nebraska IDRB
(Oilgear Project)
4.25%, 01/07/99 $ 1,800 $ 1,800
Nebraska Higher Education Loan
Program RB (Nebhelp Inc. Student
Loan Project) Series 1988C
4.20%, 01/07/99 31,150 31,150
--------
32,950
--------
NEVADA -- 0.6%
Clark County, Nevada Airport
Improvement RB Series 1993A
3.85%, 01/07/99 7,900 7,900
Clark County, Nevada Airport
Improvement RB (System
Subordinate Lien) Series 1995A2
4.05%, 01/07/99 1,310 1,310
Nevada Housing Division M/F
Housing RB Series 1989A
3.90%, 01/07/99 5,700 5,700
Stanton County, Nebraska IDRB
(Nucor Corp. Project) Series 1996
4.20%, 01/07/99 10,500 10,500
Washoe County Water Facilities RB
(Sierra Pacific Power Co. Project)
Series 1990
5.20%, 01/07/99 16,100 16,100
--------
41,510
--------
NEW HAMPSHIRE -- 0.1%
New Hampshire State HFA M/F
Housing RB (Fairways Project-1)
4.05%, 01/07/99 7,000 7,000
--------
NEW JERSEY -- 0.6%
Essex County, New Jersey Public
Improvement Authority RB (County
Asset Sale Project) Series 1995
4.00%, 01/07/99 4,700 4,700
New Jersey Economic Development
Authority Natural Gas Facilities RB
(New Jersey Natural Gas Co.)
3.90%, 01/07/99 4,000 4,000
New Jersey Economic Development
Authority Natural Gas Facilities RB
(New Jersey Natural Gas Co.)
Series 1998B
3.85%, 01/07/99 1,500 1,500
Par Value
------- ---------
New Jersey Economic Development
Authority Natural Gas Facilities RB
(New Jersey Natural Gas Co.)
Series 1998C
3.85%, 01/07/99 $ 2,000 $ 2,000
New Jersey Economic Development
Authority RB (Hoffman Laroche Inc.
Project) Series 1993
5.15%, 01/01/99 2,800 2,800
New Jersey Economic Development
Authority RB (Job Haines Home
Project)
3.75%, 01/07/99 200 200
New Jersey Economic Development
Authority RB (Public Service
Electric & Gas Co. Project)
Series 1995A
3.70%, 01/07/99 4,500 4,500
New Jersey Economic Development
Authority Thermal Energy
Facilities RB (Thermal Energy Ltd.
Partnership I Project) Series 1997
3.90%, 01/07/99 1,550 1,550
New Jersey Health Care Facility
Financing Authority Revenue
Refunding Bonds (Christian Health
Project) Series 1998B
3.90%, 01/07/99 100 100
New Jersey Sports & Exposition
Authority RB Series 1992C
3.65%, 01/07/99 9,700 9,700
New Jersey State Education
(Hamilton Industrial Development
Project) Series 1998
4.00%, 01/07/99 100 100
New Jersey State Turnpike
Authority RB Series 1991D
3.75%, 01/07/99 9,800 9,800
Salem County, New Jersey Pollution
Control Financing Authority RB
(Public Service Electric & Gas
Project) Series 1997
3.85%, 01/07/99 2,500 2,500
--------
43,450
--------
34
<PAGE>
Par Value
------- ---------
NEW MEXICO -- 1.5%
Albuquerque, New Mexico (Karsten
Project A)
4.15%, 01/06/99 $ 1,545 $ 1,545
Albuquerque, New Mexico (Karsten
Project B)
4.15%, 01/06/99 670 670
Albuquerque, New Mexico Airport RB
(Subordinated Lien) Series 1996A
3.95%, 01/07/99 21,100 21,100
Albuquerque, New Mexico Gross
Receipts Tax GO
4.00%, 01/07/99 4,000 4,000
Belen, New Mexico IDRB (Solo Cup,
Inc. Project)
4.20%, 01/07/99 3,250 3,250
New Mexico State Highway
Commission RB (Subordinate Lein)
4.00%, 01/07/99 69,900 69,900
Sandoval County, New Mexico M/F RB
(Arrowhead Ridge Apartments
Project)
4.20%, 01/07/99 5,715 5,715
--------
106,180
--------
NEW YORK -- 3.8%
Albany-Dougherty County, New York
Hospital Authority RB (Phoebe
Putney Memorial Hospital Project)
Series 1996
4.00%, 01/07/99 11,400 11,400
Babylon, New York IDA Resource
Recovery (Ogden Martin Project)
Series 1998
3.80%, 01/07/99 1,400 1,400
Long Island, New York Power
Authority
3.80%, 01/07/99 21,700 21,700
Long Island, New York Power
Authority Electric System
Subordinated RB
5.10%, 01/01/99 17,500 17,500
New York City, New York GO
Series 1993 Subseries A8
5.10%, 01/01/99 15 15
New York City, New York GO
Series 1994B Subseries B4
5.10%, 01/01/99 2,800 2,800
Par Value
------- ---------
New York City, New York Health &
Hospitals Health System RB
Series 1997A
3.90%, 01/07/99 $ 6,200 $ 6,200
New York City, New York Housing
Development Corp. M/F Housing RB
(One Columbus Project) Series A
4.20%, 01/06/99 18,100 18,100
New York City, New York IDA Special
Facility RB (Korean Airlines Co.
Project) Series 1997C
4.50%, 01/07/99 1,500 1,500
New York City, New York M/F Rental
Housing RB (Tribeca Tower Project)
Series 1997A
3.70%, 01/07/99 11,600 11,600
New York City, New York Municipal
Assitance Corp.
3.80%, 01/07/99 3,600 3,600
New York City, New York Municipal
Water Finance Authority Water &
Sewer System RB Series 1992C
5.10%, 01/01/99 7,300 7,300
New York City, New York Municipal
Water Finance Authority Water &
Sewer System RB Series 1994G
5.10%, 01/01/99 28,700 28,700
New York City, New York Municipal
Water Finance Authority Water &
Sewer System RB Series C
5.10%, 01/01/99 4,200 4,200
New York City, New York Special
Facility RB (Korean Airlines Co.
Project) Series 1997A
3.95%, 01/07/99 18,800 18,800
New York Local Government
Assistance Bonds
3.20%, 01/07/99 7,000 7,000
New York State Energy Research &
Development Authority Pollution
Control Refunding RB (Niagara
Mohawk Power) Series A
5.20%, 01/01/99 300 300
New York State Energy Research &
Development Authority Pollution
Control Revenue Refunding Bonds
(Orange & Rockland Utilities, Inc.
Project) Series 1994A
3.80%, 01/07/99 900 900
35
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
New York State HFA (Mount Sinai
School Of Medicine) Series A
3.70%, 01/07/99 $ 400 $ 400
New York State HFA M/F RB (Tribeca
Park Housing Project) Series A
3.90%, 01/07/99 11,200 11,200
New York State HFA RB (East 84th
Street Housing) Series 1995A
3.85%, 01/07/99 17,700 17,700
New York State HFA RB (West 50th
Street Project) Series 1997A
3.75%, 01/07/99 36,000 36,000
New York State HFA RB
3.85%, 01/07/99 2,100 2,100
New York State Housing Financing
Agency (Chelsea Arms Housing
Project) Series A
3.75%, 01/06/99 4,000 4,000
New York State Local Government
Assistance Corp. RB
3.80%, 01/07/99 600 600
New York State Local Government
Assistance Corp. RB Series 1994B
3.85%, 01/07/99 27,500 27,500
New York State Local Government
Assistance Corp. RB Series 1995B
3.85%, 01/07/99 1,300 1,300
Yonkers, New York IDA Civic
Facilities RB (Consumers Union
Facility Project)
4.00%, 01/07/99 500 500
--------
264,315
--------
NORTH CAROLINA -- 0.7%
Charlotte, North Carolina Airport
Refunding Bonds Series 1993A
3.85%, 01/07/99 4,850 4,850
Concord, North Carolina (c)
4.05%, 01/07/99 13,000 13,000
Forsyth County, North Carolina
Industrial Facilities & Pollution
Control Financing Authority RB
(Plymouth Printing Project)
4.20%, 01/07/99 2,550 2,550
Par Value
------- ---------
Guilford County, North Carolina
Industrial Facilities & Pollution
Control Financing Authority RB
(Camco Manufacturing Project)
Series 1996
4.15%, 01/07/99 $ 2,400 $ 2,400
Guilford County, North Carolina
Industrial Facilities & Pollution
Control Financing Authority RB
(Culp Inc. Project)
4.15%, 01/07/99 3,825 3,825
Guilford County, North Carolina
Industrial Facilities & Pollution
Control Financing Authority RB
(Neal Manufacturing Project)
4.20%, 01/07/99 2,900 2,900
Johnston County, North Carolina
Industrial Facilities & Pollution
Control Financing Authority RB
(Flanders Corp. Project)
4.10%, 01/07/99 4,500 4,500
North Carolina Educationl Facilities
Finance Agency RB (High Point
University Project)
4.05%, 01/07/99 4,800 4,800
North Carolina Medical Care
Community Hospital Health Care
Facilities (Presbyterian Home)
4.05%, 01/07/99 8,500 8,500
Union County, North Carolina
Industrial Facilities & Pollution
Control Financing Authority RB
(Rock-Tenn Converting County
Project) Series 1997
4.10%, 01/07/99 1,750 1,750
--------
49,075
--------
NORTH DAKOTA -- 0.3%
Mercer County, North Dakota
National Rural Utility Pollution
Control RB (Basin Electric Power
Cooperative Antelope Project)
Series 1984C
4.05%, 01/07/99 7,600 7,600
Richland County, North Dakota IDRB
(Minn-Dak Farmers Co-Op Project)
Series 1986B
4.20%, 01/07/99 1,000 1,000
36
<PAGE>
Par Value
------- ---------
Richland County, North Dakota Solid
Waste Disposal RB (Minn-Dak
Farmers Co-Op Project)
Series 1996A
4.20%, 01/07/99 $11,000 $ 11,000
--------
19,600
--------
OHIO -- 0.6%
Cleveland, Ohio Airport System RB
Series 1997D
4.00%, 01/07/99 13,530 13,530
Columbus, Ohio Electric System RB
Series 1984
3.30%, 01/07/99 6,080 6,080
Ohio Air Quality Development
Authority RB (JMG Funding, LP)
Series 1994A
4.05%, 01/07/99 2,900 2,900
Ohio Air Quality Development
Authority RB (Ltd. Partnership
Project) Series 1994B
4.25%, 01/07/99 14,400 14,400
Ohio HFA M/F Housing RB (Kenwood
Congregate Retirement Community
Project) Series 1985
3.50%, 01/07/99 2,000 2,000
--------
38,910
--------
OKLAHOMA -- 1.1%
Creek County, Oklahoma Industrial
Authority IDRB (Henry Vogt Mach
Project) Series 1990
4.25%, 01/07/99 2,000 2,000
Garfield County, Oklahoma IDRB
of Commerce Group Inc. Project)
4.10%, 01/07/99 7,265 7,265
Muldrow, Oklahoma Public Works
Authority IDRB (Oklahoma Foods
Project)
3.75%, 01/07/99 8,000 8,000
Oklahoma Development Finance
Authority RB (Shawnee Funding
Ltd.)
4.10%, 01/07/99 4,000 4,000
Oklahoma State Student Loan
Authority RB
4.10%, 01/07/99 9,100 9,100
Par Value
------- ---------
Oklahoma State Student Loan
Authority RB Series 1996A
4.10%, 01/07/99 $31,980 $ 31,980
Oklahoma State Student Loan
Authority RB Series A
4.10%, 01/07/99 15,100 15,100
Tulsa, Oklahoma IDA RB (Thomas
& Betts Project) Series 1991
4.20%, 01/07/99 700 700
--------
78,145
--------
OREGON -- 0.7%
Oregon State Economic Development
Authority RB (Pendleton Flour Mills
Project) Series 1982
4.00%, 01/07/99 6,900 6,900
Oregon State Economic Development
Commission Economic & IDRB
4.10%, 01/07/99 4,100 4,100
Oregon State Economic Development
(Kettle Foods Project) Series 186 (c)
4.15%, 01/07/99 2,000 2,000
Oregon State Health Housing
Educational & Cultural Facilities
Authority RB (Quatama Crossing
Housing Project)
4.00%, 01/07/99 15,000 15,000
Port of Portland, Oregon IDRB
(Schnitzer Steel Project)
4.05%, 01/07/99 5,000 5,000
Port of Portland, Oregon Special
Obligation RB (Portland Bulk
Terminals Limited Liability Corp.
Project)
4.10%, 01/07/99 18,100 18,100
--------
51,100
--------
PENNSYLVANIA -- 4.4%
Allegheny County, Pennsylvania IDA
(USX Corp. Project)
3.64%, 01/07/99 12,000 12,000
Allegheny County, Pennsylvania
IDA RB (Longwood at Oakmont)
5.10%, 01/01/99 3,500 3,500
Bucks County, Pennsylvania IDA
(Klearfold Project)
4.40%, 01/07/99 600 600
37
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Bucks County, Pennsylvania IDA RB
(Schuman & Sons Project)
4.10%, 01/07/99 $ 1,405 $ 1,405
Bucks County, Pennsylvania St. Mary
Hospital Authority RB (Catholic
Healthcare Project) Series 1997B
3.65%, 01/07/99 6,850 6,850
Cambria County, Pennsylvania IDA
Resource Recovery RB (Cambria
Cogen Co. Project)
3.90%, 01/07/99 8,195 8,195
Cambria County, Pennsylvania IDA
Resource Recovery RB (Cambria
Cogen Co. Project) Series 1998 A1
4.05%, 01/07/99 27,000 27,000
Chester County, Pennsylvania IDA RB
(Manufacturing Facilities Devault
Project)
4.25%, 01/06/99 220 220
Dauphin County, Pennsylvania
General Authority RB (All Health
Pooled Financing Program)
4.00%, 01/07/99 9,070 9,070
Dauphin County, Pennsylvania
General Authority RB (Education &
Health Loan Program) Series 1997
4.08%, 01/07/99 7,000 7,000
Easton, Pennsylvania City School
District GO
4.08%, 01/07/99 2,000 2,000
Emmaus, Pennsylvania General
Authority RB Pooled Loan
Series 1996
4.10%, 01/07/99 3,550 3,550
Montgomery County, Pennsylvania
IDA RB (Seton Medical Co.)
3.85%, 01/07/99 900 900
Montgomery County, Pennsylvania
Redevelopment Authority M/F
Housing Revenue Refunding Bonds
(Glenmore Assoc. Project) Series A
4.05%, 01/07/99 545 545
Northampton County, Pennsylvania
IDA RB (Binney & Smith) Series A
4.20%, 01/07/99 670 670
Northampton County, Pennsylvania
IDA RB (Binney & Smith) Series B
4.20%, 01/07/99 985 985
Par Value
------- ---------
Pennsylvania Economic Development
Finance Authority Facility RB
(National Gypsum Co. Shipping
Port Project) Series 1997A
4.10%, 01/07/99 $ 7,600 $ 7,600
Pennsylvania Energy Development
Authority RB (B&W Ebensburg
Project) Series 1986
3.95%, 01/07/99 25,925 25,925
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988A
4.05%, 01/07/99 15,100 15,100
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988B
4.05%, 01/07/99 51,930 51,930
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988C
4.05%, 01/07/99 40,630 40,630
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1994A
4.05%, 01/07/99 21,000 21,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1995A
4.05%, 01/07/99 2,000 2,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1997A
4.35%, 01/07/99 39,025 39,025
Quakertown, Pennsylvania General
Authority Series 1998A
4.06%, 01/07/99 7,100 7,100
Washington County, Pennsylvania
Authority Lease RB Municipal
Facilities Series B1
4.10%, 01/07/99 6,522 6,522
West Cornwall Township, Pennsylvania
Municipal Authority RB (Lebanon
Valley Crethren)
4.10%, 01/07/99 645 645
--------
301,967
--------
38
<PAGE>
Par Value
------- ---------
RHODE ISLAND -- 0.5%
Rhode Island State Student Loan
Authority Higher Education Loan RB
Series 1995-1
4.00%, 01/07/99 $12,300 $ 12,300
Rhode Island State Student Loan
Authority Higher Education Loan RB
Series 1996-2
4.00%, 01/07/99 5,000 5,000
Rhode Island State Student Loan
Authority Higher Education Loan RB
Series 1996-3
4.00%, 01/07/99 18,100 18,100
--------
35,400
--------
SOUTH CAROLINA -- 0.4%
Dorchester County, South Carolina
Pollution Control (BOC Group Inc.
Project)
4.10%, 01/07/99 2,000 2,000
Greenville, South Carolina County &
City IDRB (Stevens Aviation
Technology Services Project)
4.20%, 01/07/99 3,000 3,000
South Carolina Economic Development
Authority Hospital Facility RB
(Sanders Brothers Construction
Project)
4.20%, 01/07/99 2,800 2,800
South Carolina Economic Development
Authority RB (Advanced Automation
Project) Series 1998
4.20%, 01/07/99 4,000 4,000
South Carolina Jobs Economic
Development Authority IDRB
(Electric City Printing Project)
4.20%, 01/07/99 2,800 2,800
South Carolina Jobs Economic
Development Authority RB
(Brown Packaging Co. Project)
4.20%, 01/07/99 3,300 3,300
South Carolina Jobs Economic
Development Authority RB
(Thomas & Betts Corp. Project)
4.20%, 01/07/99 3,100 3,100
South Carolina State Port Authority RB
(Junior Lien)
4.10%, 01/07/99 3,200 3,200
Par Value
------- ---------
Spartanburg County, South
Carolina IDA RB (Bemis, Inc.)
4.10%, 01/07/99 $ 4,750 $ 4,750
--------
28,950
--------
SOUTH DAKOTA -- 0.2%
South Dakota State Health &
Educational Facilities Authority RB
(Mckenna Hospital) Series 1994
3.55%, 01/07/99 15,930 15,930
--------
TENNESSEE -- 2.2%
Chattanooga, Tennesse IDRB
(National Print Group Inc. Project)
4.15%, 01/07/99 2,500 2,500
Chattanooga, Tennessee Health
Education & Housing Facility
Board RB (Baylor School Project)
4.00%, 01/07/99 2,195 2,195
Franklin County, Tennessee IDRB
(Hi-Tech Project) Series 1997
4.10%, 01/07/99 7,000 7,000
Jackson County, Tennessee IDRB
Solid Waste Facilities (Ameristeel
Corp. Project)
4.15%, 01/07/99 5,000 5,000
Knox County, Tennessee Health
Education & Housing Facilities RB
(Web School of Knoxville Project)
Series 1997
4.00%, 01/07/99 6,000 6,000
Metropolitan Nashville & Davidson
County, Tennessee Health &
Education Facility Board RB
Series A
4.00%, 01/07/99 1,200 1,200
Metropolitan Nashville & Davidson
County, Tennessee IDRB (Bind
Technologies Inc.)
4.20%, 01/07/99 3,750 3,750
Metropolitan Nashville & Davidson
County, Tennessee M/F Housing IDRB
(Arbor Crest) Series 1985B
4.10%, 01/07/99 7,550 7,550
Metropolitan Nashville & Davidson
County, Tennessee M/F Housing IDRB
(Arbor Knoll) Series 1985A
4.10%, 01/07/99 1,000 1,000
39
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 1995C1
4.05%, 01/07/99 $ 5,750 $ 5,750
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 1995C3
4.05%, 01/07/99 10,000 10,000
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 1995E3
4.05%, 01/07/99 3,000 3,000
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 1996A
4.05%, 01/07/99 7,000 7,000
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 1996D1
4.05%, 01/07/99 3,215 3,215
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 1996E1
4.05%, 01/07/99 6,505 6,505
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 1996E4
4.05%, 01/07/99 3,000 3,000
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 1996F1
4.05%, 01/07/99 9,000 9,000
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 1996F2
4.05%, 01/07/99 9,000 9,000
Par Value
------- ---------
Sevier County, Tennessee Public
Authority Local Government Public
Improvement Bonds Series 1996G
4.05%, 01/07/99 $ 6,775 $ 6,775
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series 3C-1
4.05%, 01/07/99 11,500 11,500
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series II-C
4.05%, 01/07/99 1,065 1,065
Sevier County, Tennessee Public
Building Authority Local Government
Public Improvement Bonds
Series III-B (d)
4.15%, 01/07/99 36,500 36,500
--------
148,505
--------
TEXAS -- 6.4%
Amarillo, Texas Health Facilities Corp.
Hospital RB (High Plains Baptist
Hospital) Series 1985
4.25%, 01/07/99 3,100 3,100
Amarillo, Texas Health Facilities Corp.
Revenue Refunding Bonds
3.50%, 01/07/99 3,155 3,155
Bexar County, Texas Health Facilities
Development Corp. RB (Chandler
Memorial Home Project)
Series 1995
4.05%, 01/07/99 4,990 4,990
Brazos River, Texas Higher Education
Authority RB Series 1993B1
3.95%, 01/07/99 35,100 35,100
Brownsville County, Texas Industrial
Development Corp. Revenue
Refunding Bonds (Rich Seapak Corp.
Project)
4.10%, 01/07/99 1,250 1,250
Central Waco, Texas Development
Corp. IDRB (H.E. Butt Grocery
Project)
4.00%, 01/07/99 3,950 3,950
40
<PAGE>
Par Value
------- ---------
Collin County, Texas HFA M/F
Housing RB (Huntington Apartments
Project)
3.84%, 01/07/99 $ 6,150 $ 6,150
Euless, Texas IDA RB (Ferguson
Enterprises, Inc. Project)
4.10%, 01/07/99 4,850 4,850
Grand Prairie, Texas IDA IDRB
(NTA Leasing Co. Project)
Series 1994
4.15%, 01/07/99 2,040 2,040
Hays, Texas Memorial Health Facilities
Development Corp. Hospital RB
(AHS Sunbelt Central Texas Medical
Center Project) Series 1990A
4.10%, 01/07/99 8,200 8,200
Hays, Texas Memorial Health Facilities
Development Corp. Hospital RB
(AHS Sunbelt Central Texas Medical
Center Project) Series 1990B
4.10%, 01/07/99 14,800 14,800
North Texas Higher Education
Authority Income Tax Student Loan
Revenue Refunding Bonds (Texas
Student Loan Project)
3.95%, 01/07/99 29,000 29,000
North Texas Higher Education
Authority Income Tax Student Loan
Revenue Refunding Bonds
Series 1987A
3.90%, 01/07/99 87,750 87,750
North Texas Higher Education
Authority Income Tax Student
Loan Revenue Refunding Bonds
Series 1996A
4.00%, 01/07/99 6,100 6,100
North Texas Higher Education
Authority Income Tax Student Loan
Revenue Refunding Bonds
Series 1996B
4.00%, 01/07/99 4,000 4,000
North Texas Higher Education
Authority Income Tax Student Loan
Revenue Refunding Bonds
Series 1996D
4.00%, 01/07/99 4,000 4,000
Par Value
------- ---------
Panhandle Plains, Texas Higher
Education Authority Student
Loan RB Series 1991A
3.95%, 01/06/99 $11,500 $ 11,500
Panhandle Plains, Texas Higher
Education Authority Student
Loan RB Series 1992A1
3.95%, 01/07/99 2,400 2,400
Panhandle Plains, Texas Higher
Education Authority Student
Loan RB Series 1993A
3.95%, 01/07/99 13,300 13,300
Panhandle Plains, Texas Higher
Education Authority Student
Loan RB Series 1995A
3.95%, 01/07/99 18,300 18,300
Panhandle Plains, Texas Higher
Education Authority Student
Loan RB Series 1997X
3.95%, 01/07/99 14,000 14,000
Robertson County, Texas Industrial
Development Corp. IDRB (Sanderson
Farms Project) Series 1995
4.25%, 01/07/99 3,700 3,700
Silsbee, Texas Health Facilities
Development RB (Silsbee Doctor's
Hospital)
4.00%, 01/07/99 6,000 6,000
South Texas Higher Education
Authority Student Loan RB
3.95%, 01/07/99 70,500 70,500
South Texas Higher Education
Authority Student Loan RB
Series 1997Z
3.95%, 01/07/99 7,000 7,000
Tarrant County, Texas IDRB (Mortex
Products Inc. Project)
4.30%, 01/07/99 4,000 4,000
Texas Capital Health Facilities
Development Corp. RB (Island On
Lake Travis Ltd. Project)
3.95%, 01/07/99 8,500 8,500
Texas Health Facilities Development
Corp. ACES RB (North Texas Pooled
Health) Series 1985B
4.35%, 01/07/99 15,600 15,600
41
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Texas Municipal Gas Corp. Gas
Reserve RB Weekly Senior Lien
4.00%, 01/07/99 $45,000 $ 45,000
Trinity River Authority, Texas
Pollution Control RB (Lafarge Corp.
Project)
4.00%, 01/07/99 3,100 3,100
--------
441,335
--------
UTAH -- 0.9%
Salt Lake City, Utah Airport RB
Series 1996A
4.10%, 01/07/99 4,400 4,400
Utah State Board of Regents Student
Loan RB Series 1995L
4.00%, 01/07/99 7,975 7,975
Utah State Board of Regents Student
Loan RB Series 1996Q
4.00%, 01/07/99 9,000 9,000
Utah State Board of Regents Student
Loan RB Series 1997R
4.00%, 01/07/99 34,255 34,255
Woods Cross City, Utah M/F (Spring
Wood Apartments)
4.05%, 01/07/99 3,605 3,605
--------
59,235
--------
VIRGINIA -- 0.1%
King George County, Virgina IDA
Solid Waste Disposal Facility
(Garnet of Virginia Project)
Series 1996
4.05%, 01/07/99 3,700 3,700
Staunton, Virginia IDA RB (Diebold
Inc. - Staunton Project) Series 1997
4.10%, 01/07/99 2,500 2,500
--------
6,200
--------
WASHINGTON -- 3.7%
Algona, Washington Economic
Development Corp. IDRB (Aitchison
Family Partnership Project)
4.10%, 01/07/99 2,620 2,620
Douglas County, Washington Water
Economic Development RB
3.86%, 01/07/99 6,500 6,500
Par Value
------- ---------
Everett, Washington IDA RB
Series 1996 (Partners Trust/Synsor
Project)
4.00%, 01/07/99 $ 4,400 $ 4,400
King County, Washington Economic
Enterprise Corp. RB (Sunrise Project)
Series 1997
4.00%, 01/07/99 4,000 4,000
King County, Washington HFA M/F
Housing RB (Auburn County
Apartments)
4.20%, 01/07/99 9,150 9,150
Pierce County, Washington Economic
Development Corp. RB (Flex-A-Lite
Consolidated Project)
4.00%, 01/07/99 3,000 3,000
Pierce County, Washington Economic
Development Corp. RB (K & M
Holdings II Project) Series 1997
4.00%, 01/07/99 1,820 1,820
Pierce County, Washington Economic
Development Corp. RB (McFarland
Cascade Project)
4.30%, 01/07/99 2,000 2,000
Pilchuck, Washington Water
Development Corp. IDRB (Romac
Industrial Inc. Project)
4.55%, 01/07/99 7,425 7,425
Port Moses Lake, Washington Public
Corp. RB (Moses Lake Industrial
Project) Series 1995
4.05%, 01/07/99 3,000 3,000
Port Moses Lake, Washington Public
Corp. RB (National Frozen Foods
Corp.)
3.95%, 01/07/99 7,500 7,500
Port of Seattle, Washington
Subordinate Lien RB Series 1997
4.10%, 01/07/99 81,530 81,530
Seattle, Washington HDA RB (Capitol
Hill Housing Improvement & HRG
Project)
4.00%, 01/07/99 6,420 6,420
Seattle, Washington HDA RB (Casa
Pacifica Apartments Project)
Series 1997
4.00%, 01/07/99 3,350 3,350
42
<PAGE>
Par Value
------- ---------
Seattle, Washington HDA RB (Holly
Park Project)
4.00%, 01/07/99 $18,500 $ 18,500
Spokane County, Washington
Industrial Development Corp. (Metal
Sales Manufacturing Corp. Project)
4.15%, 01/07/99 2,520 2,520
Washington Health Care Facilities
Authority RB (Yakima Valley Farm
Workers Clinic) Series 1997
3.95%, 01/07/99 3,800 3,800
Washington State Economic
Development Finance Authority
(Skills Inc. Project) (c)
3.45%, 01/07/99 3,500 3,500
Washington State Economic
Development Finance Authority
ACES (Tank Project) Series 1998B
3.75%, 01/07/99 1,400 1,400
Washington State Economic
Development Finance
Authority IDRB (Tonkin Building)
Series 1997A
4.30%, 01/07/99 1,000 1,000
Washington State Economic
Development Finance Authority RB
(Hamilton Materials Project)
4.05%, 01/07/99 5,000 5,000
Washington State Economic
Development Finance Authority RB
(Hunter Douglas Project) Series
1997A
4.10%, 01/07/99 3,500 3,500
Washington State Health Care
Facilities Authority Revenue
Refunding Bonds (Sisters of St
Joseph of Peace) Series 1993
4.10%, 01/07/99 16,100 16,100
Washington State HFA M/F Housing
Mortgage RB (Canyon Lake II)
Series 1993A
4.00%, 01/07/99 4,565 4,565
Washington State HFA M/F Housing
Mortgage RB (Lake Washington
Apartments Project) Series 1996
4.00%, 01/07/99 8,750 8,750
Par Value
------- ---------
Washington State HFA M/F Housing
Mortgage RB (Meridian Court
Apartments) Series 1996
4.00%, 01/07/99 $ 7,000 $ 7,000
Washington State HFA M/F Housing
Mortgage RB (Merrill Gardens
Project) Series 1997A
4.30%, 01/07/99 2,600 2,600
Washington State HFA M/F Housing
Mortgage RB (Rosecreek Apartments
Project)
4.00%, 01/07/99 3,570 3,570
Washington State Housing Finance
Authority M/F (Brittany Park
Phase 3 Project)
4.30%, 01/07/99 3,480 3,480
Washington State Housing Finance
Commission M/F Mortgage RB
(Canyon Lake I Project)
4.90%, 01/01/99 400 400
Yakama Indian Nation, Washington
Confederated Tribes & Bands
Demand Obligation (Yakama
Forests Products Project)
4.00%, 01/07/99 9,300 9,300
Yakima County, Washington Public
Corp. IDRB (Cowiche Growers
Project)
4.05%, 01/07/99 4,000 4,000
Yakima County, Washington Public
Corp. RB (Hi-Country Foods
Project)
4.00%, 01/07/99 7,600 7,600
Yakima County, Washington Public
Corp. RB (Michaelson Packaging
Project)
4.00%, 01/07/99 3,800 3,800
Yakima County, Washington Public
Corp. RB (Printing Press Project)
4.00%, 01/07/99 2,700 2,700
--------
255,800
--------
WEST VIRGINIA -- 0.4%
Fayette County, West Virgina Solid
Waste Disposal Facilities RB
(Georgia-Pacific Corp. Project)
Series 1995
4.10%, 01/07/99 9,200 9,200
43
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Marion County, West Virginia Solid
Waste Disposal Facilities RB (Grant
Town Project) Series B
4.00%, 01/07/99 $10,800 $ 10,800
Marion County, West Virginia Solid
Waste Disposal Facilities RB (Grant
Town Project) Series D
4.00%, 01/07/99 4,200 4,200
West Virginia State Hospital Finance
Authority RB (St. Joseph's Hospital
Project) Series 1987
4.05%, 01/07/99 1,900 1,900
--------
26,100
--------
WISCONSIN -- 0.7%
Carlton, Wisconsin Pollution
Control RB (Wisconsin Power &
Light Co. Project)
4.20%, 01/07/99 5,800 5,800
Chilton, Wisconsin IDRB (Kaytee
Products, Inc. Project) Series 1995
4.15%, 01/07/99 1,295 1,295
Colburn, Wisconsin IDRB (Heartland
Farms Project) Series 1994
4.25%, 01/07/99 6,900 6,900
Grafton, Wisconsin IDRB (Milwaukee
Sign Co. Project)
4.25%, 01/07/99 1,900 1,900
Kenosha, Wisconsin IDRB (Asyst
Tech. Ltd. Liability Corp. Project)
4.15%, 01/07/99 5,000 5,000
Lac Du Flambeau, Band of Lake
Superior, Wisconsin Chippewa
Indians Special Obligation Bonds
(Simpson Electric Co. Project)
Series 1985
4.00%, 01/07/99 4,600 4,600
Prentice, Wisconsin Industrial
Development Revenue Refunding
Bonds (Blount, Inc.) Series 1992
4.10%, 01/07/99 1,350 1,350
Rapids City, Wisconsin IDRB (Theile
Kaolin of Wisconsin, Inc. Project)
Series 1998
4.10%, 01/07/99 2,250 2,250
Rhinelander, Wisconsin IDRB (Lake
Shore Inc. Project)
4.30%, 01/07/99 2,290 2,290
Par Value
------- ---------
Wisconsin Housing & Economic
Development Authority RB (Ultratec
Inc. Project ) Series 7
4.25%, 01/07/99 $ 3,280 $ 3,280
Wisconsin State Health & Education
Facilities Authority RB (Sinai
Samaritan) Series 1994A
4.10%, 01/07/99 12,560 12,560
----------
47,225
----------
WYOMING -- 0.7%
Jackson County, Wyoming Pollution
Control RB (Chevron Project)
5.10%, 01/01/99 100 100
Lincoln County, Wyoming Pollution
Control RB (Exxon Corp. Project)
Series 1987B
5.10%, 01/01/99 13,100 13,100
Lincoln County, Wyoming Pollution
Control RB (Exxon Corp. Project)
Series B
5.05%, 01/01/99 1,000 1,000
Lincoln County, Wyoming Resource
Recovery RB (Exxon Corp. Project)
Series C
5.05%, 01/01/99 6,400 6,400
Unita County, Wyoming Pollution
Control RB (Amoco Project)
5.10%, 01/01/99 16,200 16,200
Unita County, Wyoming Pollution
Control RB (Chevron Corp. Project)
Series 1993
5.10%, 01/01/99 8,960 8,960
----------
45,760
----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $4,265,994) 4,265,994
----------
TAX-EXEMPT COMMERCIAL PAPER -- 10.4% (b)
ARIZONA -- 0.7%
Maricopa County, Arizona Pollution
Control Authority Revenue
Refunding Bonds TECP (Southern
California Edison Palo Verde
Project) Series D
3.00%, 02/08/99 7,550 7,550
44
<PAGE>
Par Value
------- ---------
Maricopa County, Arizona Pollution
Control Authority Revenue
Refunding Bonds TECP (Southern
California Edison Palo Verde Project)
Series E
3.00%, 02/08/99 $12,530 $ 12,530
Maricopa County, Arizona Pollution
Control Authority Revenue
Refunding Bonds TECP (Southern
California Edison Palo Verde Project)
Series 1985G
3.45%, 01/13/99 16,900 16,900
2.85%, 03/09/99 8,750 8,750
--------
45,730
--------
CALIFORNIA -- 0.1% (f)
California GO TECP
3.10%, 01/07/99 10,000 10,000
--------
FLORIDA -- 0.1% (f)
Pinellas County, Florida Educational
Facilities TECP
3.05%, 02/09/99 2,600 2,600
Florida Government Finance
Community TECP
3.00%, 02/08/99 5,500 5,500
--------
8,100
--------
GEORGIA -- 0.0% (f)
Athens, Georgia IDA (Rhone Merieux
Inc. Project) TECP Series 1988
3.25%, 02/09/99 1,500 1,500
Georgia Municipal Gas Authority RB
TECP (Southern Portfolio-I Project)
Series 1994D
3.37%, 01/26/99 2,410 2,410
--------
3,910
--------
KENTUCKY -- 0.2%
Trimble County, Kentucky Pollution
Control RB TECP (Louisville G&E
Project) Series 1997S
3.30%, 02/08/99 15,000 15,000
--------
Par Value
------- ---------
LOUISIANA -- 1.6%
Louisiana GO Refunding Bond TECP
Series 1991A (f)
3.00%, 02/04/99 $ 8,420 $ 8,420
3.15%, 02/24/99 10,150 10,150
3.05%, 03/08/99 7,500 7,500
Louisiana State Pollution Control
Revenue Refunding Bonds TECP
(St. James Parish/Texaco Project)
Series 1988A
3.30%, 01/28/99 27,000 27,000
Louisiana State Pollution Control
Revenue Refunding Bonds TECP
(St. James Parish/Texaco Project)
Series 1988B
3.30%, 01/28/99 55,530 55,530
--------
108,600
--------
MICHIGAN -- 0.4% (f)
Michigan State Building Authority
TECP Series 2
3.30%, 02/09/99 25,000 25,000
--------
MINNESOTA -- 0.2%
Rochester, Minnesota Health Care
Facilities RB TECP (Mayo
Foundation Medical Center Project)
Series 1992A
3.15%, 02/24/99 3,500 3,500
Rochester, Minnesota Health Care
Facilities RB TECP (Mayo Foundation
Medical Center Project) Series 1992B
2.95%, 04/08/99 4,600 4,600
Rochester, Minnesota Health Care
Facilities RB TECP (Mayo Foundation
Medical Center Project) Series 1992C
2.95%, 04/08/99 7,100 7,100
--------
15,200
--------
NEW YORK -- 2.2% (f)
New York State Environmental TECP
3.10%, 01/11/99 5,000 5,000
3.20%, 01/14/99 16,400 16,400
3.20%, 02/01/99 3,600 3,600
3.25%, 02/04/99 55,400 55,400
3.00%, 02/11/99 9,000 9,000
45
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
New York State Power Authority
Notes TECP Series 2
2.90%, 02/08/99 $16,050 $ 16,050
3.00%, 03/01/99 5,000 5,000
3.05%, 03/01/99 35,000 35,000
State of New York GO BAN TECP
3.10%, 02/09/99 5,200 5,200
--------
150,650
--------
NORTH CAROLINA -- 1.4% (f)
North Carolina Eastern Municipal
Power Agency Power
System RB TECP
2.95%, 01/12/99 32,700 32,700
2.90%, 02/08/99 2,550 2,550
3.00%, 02/08/99 22,625 22,625
3.05%, 03/08/99 18,600 18,600
North Carolina Eastern Municipal
Power Agency Power
System RB TECP Series 1998B
2.95%, 01/12/99 5,000 5,000
North Carolina Eastern Municipal
Power Agency Power System RB TECP
3.45%, 01/13/99 9,000 9,000
3.05%, 03/08/99 4,500 4,500
--------
94,975
--------
OKLAHOMA -- 0.3% (f)
Oklahoma City, Oklahoma Industrial
& Cultural Facilities TECP (Trust
Health Care Project) Series 1998B
2.90%, 02/08/99 13,495 13,495
3.00%, 04/07/99 5,000 5,000
--------
18,495
--------
PENNSYLVANIA -- 0.4% (f)
Montgomery County, Pennsylvania IDA
Pollution Control RB TECP
3.40%, 01/13/99 12,610 12,610
3.00%, 02/04/99 14,900 14,900
--------
27,510
--------
PUERTO RICO -- 0.3%
Puerto Rico Government Development
Bank TECP
2.95%, 02/17/99 1,200 1,200
2.90%, 02/18/99 6,000 6,000
2.95%, 03/08/99 10,975 10,975
--------
18,175
--------
Par Value
------- ---------
TEXAS -- 1.2%
Corpus Christi, Texas Utility
System TECP Series A (f)
3.00%, 02/09/99 $ 7,555 $ 7,555
3.20%, 02/09/99 595 595
Texas State TRAN TECP Series 1997B
2.95%, 04/06/99 25,000 25,000
2.95%, 07/13/99 14,000 14,000
2.95%, 07/14/99 35,000 35,000
--------
82,150
--------
UTAH -- 0.9% (f)
State of Utah GO Highway TECP
Series 1998B
3.05%, 02/10/99 16,900 16,900
3.10%, 02/11/99 42,600 42,600
--------
59,500
--------
WISCONSIN -- 0.2% (f)
State of Wisconsin GO TECP
Series 1998B
2.90%, 03/30/99 18,000 18,000
--------
WYOMING -- 0.2% (f)
Lincoln County, Wyoming Pollution
Control RB TECP (Pacific Corp.
Project)
2.90%, 02/08/99 12,250 12,250
3.00%, 02/08/99 2,300 2,300
--------
14,550
--------
TOTAL TAX-EXEMPT COMMERCIAL PAPER
(Cost $715,545) 715,545
--------
VARIABLE RATE TENDER OPTION BONDS -- 6.8% (a)(c)(f)
CALIFORNIA -- 0.1%
San Diego County, California
Transportation TOB
4.10%, 01/07/99 7,920 7,920
--------
COLORADO -- 0.2%
Denver, Colorado GO Refunding TOB
Series 1998A
4.15%, 01/07/99 13,870 13,870
--------
46
<PAGE>
Par Value
------- ---------
FLORIDA -- 0.0%
State of Florida Department of
Environmental Protection TOBP
(BTP-305)
4.15%, 01/07/99 $ 4,165 $ 4,165
--------
GEORGIA -- 0.2%
State of Georgia TOB (BTP-79)
4.15%, 01/07/99 13,145 13,145
--------
HAWAII -- 0.9%
Hawaii State Housing Finance &
Development Corp. TOBP
4.10%, 01/07/99 19,815 19,815
Honolulu, Hawaii City & County TOB
4.20%, 01/07/99 9,015 9,015
State of Hawaii TOB (BTP-222)
4.15%, 01/07/99 5,275 5,275
State of Hawaii GO TOB
4.15%, 01/07/99 17,650 17,650
State of Hawaii TOB (BTP-220)
4.15%, 01/07/99 8,245 8,245
--------
60,000
--------
ILLINOIS -- 0.6%
Chicago, Illinois Park District TOB
4.20%, 01/07/99 14,855 14,855
Illinois State TOB Series 40
4.20%, 01/07/99 17,890 17,890
Merlot, Illinois Educational
Facilities TOB
4.20%, 01/07/99 2,000 2,000
State of Illinois GO TOB
4.15%, 01/07/99 7,440 7,440
--------
42,185
--------
LOUISIANA -- 0.1%
State of Louisiana TOBP (BTP-300)
Series 1998A
4.15%, 01/07/99 7,920 7,920
--------
MASSACHUSETTS -- 0.3%
Massachusetts GO TOB (BTP-214)
4.15%, 01/07/99 18,115 18,115
--------
MICHIGAN -- 0.5%
Monroe County, Michigan Pollution
Control TOB (Detroit Edison Co.
Project)
4.13%, 01/07/99 7,380 7,380
Par Value
------- ---------
Wayne County, Michigan
Airport TOBP (PT-1061)
4.13%, 01/07/99 $27,470 $ 27,470
--------
34,850
--------
MINNESOTA -- 0.1%
Minnesota State GO TOB
4.15%, 01/07/99 7,710 7,710
--------
MISSISSIPPI -- 0.2%
Mississippi S/F TOB (Home Corp.)
Series 1997G
4.15%, 01/07/99 12,495 12,495
--------
NEW HAMPSHIRE -- 0.3%
New Hampshire State S/F Housing
Financing Authority RB TOB
Series G
4.15%, 01/07/99 18,675 18,675
--------
NEW JERSEY -- 0.1%
New Jersey State Building
Authority TOB Series 1997
4.08%, 01/07/99 2,545 2,545
New Jersey State Transportation
Authority TOB
4.10%, 01/07/99 1,125 1,125
New Jersey State Transportation
Authority TOBP (PT-200)
4.10%, 01/07/99 2,375 2,375
--------
6,045
--------
NEW YORK -- 1.5%
Long Island, New York Power
Authority Electric System RB TOB
(PA-269)
4.15%, 01/07/99 8,000 8,000
Long Island, New York Power
Authority TOB (PA-281)
4.15%, 01/07/99 9,895 9,895
New York City, New York GO TOBP
(CoreStates Merlot Program)
Series 1997C
4.15%, 01/06/99 28,825 28,825
New York City, New York Municipal
Assistance Corp. TOB
4.10%, 01/07/99 10,000 10,000
47
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
New York City, New York Municipal
Assistance Corp. TOBP (BTP-225)
4.10%, 01/07/99 $19,800 $ 19,800
New York Local Government
Assistance Corp. TOBP (PT-1055)
Series 1997B
4.10%, 01/07/99 1,615 1,615
New York State Urban Development
Corp. TOBP (BTP-113)
4.15%, 01/07/99 20,196 20,196
New York Triborough Bridge & Tunnel
Authority TOB
4.10%, 01/07/99 4,420 4,420
--------
102,751
--------
PENNSYLVANIA -- 0.6%
Allegheny County, Pennsylvania
Airport TOBP (PT-176)
4.08%, 01/07/99 2,930 2,930
Allegheny County, Pennsylvania
Airport TOBP
4.11%, 01/07/99 1,945 1,945
Chester County, Pennsylvania Health
& Education TOB
4.08%, 01/07/99 1,305 1,305
Philadelphia, Pennsylvania Airport
RB TOB (PA-387)
4.08%, 01/07/99 5,520 5,520
Philadelphia, Pennsylvania Water &
Waste RB TOBP (PT-151)
Series 1993
4.08%, 01/07/99 8,190 8,190
Pittsburgh, Pennsylvania GO TOB
4.15%, 01/07/99 19,290 19,290
--------
39,180
--------
TEXAS -- 0.6%
Austin, Texas Independent School
District TOB
4.20%, 01/07/99 5,700 5,700
El Paso, Texas Water & Sewer RB TOB
Series 1998I
4.15%, 01/07/99 15,450 15,450
San Antonio, Texas Electric &
Gas TOB
4.20%, 01/07/99 9,975 9,975
Par Value
------- ---------
State of Texas GO TOB
4.15%, 01/07/99 $12,205 $ 12,205
--------
43,330
--------
WASHINGTON -- 0.5%
King County, Washington TOB
4.20%, 01/07/99 9,995 9,995
Washington State GO TOB
4.15%, 01/07/99 18,805 18,805
Washington State Public Power
Supply System Revenue Refunding
TOBP (BTP-137) (Nuclear Project
Number 2) Series 1993B
4.15%, 01/07/99 6,685 6,685
--------
35,485
--------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $467,841) 467,841
--------
TAX AND REVENUE ANTICIPATION NOTES -- 5.7% (b)
CALIFORNIA -- 3.0% (f)
California School Cash Reserve
Program Authority Pooled TRAN
Series 1997A
3.74%, 07/02/99 206,500 207,254
--------
NEW MEXICO -- 1.3%
New Mexico State TRAN
Series A
2.98%, 06/30/99 82,000 82,307
3.00%, 06/30/99 10,000 10,036
--------
92,343
--------
PENNSYLVANIA -- 0.1%
Philadelphia, Pennsylvania
TRAN Series 1998B
3.64%, 06/30/99 2,500 2,507
--------
PUERTO RICO -- 1.3%
Puerto Rico Commonwealth
TRAN Series 1998
2.85%, 07/30/99 88,800 89,128
--------
TOTAL TAX AND REVENUE
ANTICIPATION NOTES
(Cost $391,232) 391,232
--------
48
<PAGE>
Par Value
------- ---------
MANDATORY PUT BONDS -- 5.4% (b)
CALIFORNIA -- 0.1% (f)
California Higher Education Loan
Authority Student Loan RB
Series 1995E5
3.80%, 06/01/99 $10,000 $ 10,000
--------
DISTRICT OF COLUMBIA -- 0.2% (f)
Washington D.C. HFA S/F
3.80%, 06/23/99 16,500 16,500
--------
HAWAII -- 0.1% (f)
Hawaii State Housing Financing &
Development Corp. M/F Housing RB
(Nani Mauna Loa Project)
Series 1995A
3.60%, 04/01/99 3,900 3,900
--------
IDAHO -- 0.2%
Custer County, Idaho Pollution
Control RB (Amoco Project)
Series 1983
3.60%, 10/01/99 10,000 10,000
--------
ILLINOIS -- 0.1% (f)
Chicago, Illinois GO
2.96%, 11/04/99 5,000 5,000
Orland Park, Illinois IDRB (Orland
Properties Project)
3.75%, 06/01/99 1,040 1,040
--------
6,040
--------
MINNESOTA -- 0.2% (f)
Minnesota State Housing Finance
Agency S/F
3.70%, 03/01/99 13,600 13,600
--------
NEW JERSEY -- 0.2%
New Jersey Economic Development
Authority RB (Newark Recycling
Center Project)
3.00%, 06/15/99 15,900 15,900
--------
PENNSYLVANIA -- 0.0%
Beaver County, Pennsylvania IDA
Pollution Control Refunding RB
(Ohio Edison County)
Series 1992A
2.42%, 04/01/99 1,500 1,504
3.25%, 04/01/99 1,000 1,002
--------
2,506
--------
Par Value
------- ---------
RHODE ISLAND -- 0.3% (f)
Rhode Island State Student Loan
Authority RB
3.80%, 05/31/99 $19,000 $ 19,000
--------
TENNESSEE -- 1.4%
Metropolitan Nashville & Davidson
County, Tennessee IDRB (Insurance
Co. America Project)
3.10%, 05/03/99 5,700 5,700
Tennessee HDA RB (Homeownership
Program) Series 1997
3.75%, 06/17/99 40,000 40,000
Tennessee HDA RB (Homeownership
Program) Series 1997-2
3.69%, 03/04/99 50,000 50,000
--------
95,700
--------
TEXAS -- 2.6% (f)
Greater East Texas Higher Education
Authority Student Loan RB
Series 1992A
3.55%, 03/01/99 32,500 32,500
Greater East Texas Higher Education
Authority Student Loan RB
Series 1992B
4.00%, 07/01/99 14,000 14,000
Greater East Texas Higher Education
Authority Student Loan RB
Series 1993A
3.80%, 05/01/99 48,150 48,150
Greater East Texas Higher Education
Authority Student Loan RB
Series 1993B2
3.80%, 06/01/99 6,500 6,500
Greater East Texas Higher Education
Authority Student Loan RB
Series 1995
3.80%, 05/01/99 27,500 27,500
Greater East Texas Higher Education
Authority Student Loan RB
Series 1995A
3.80%, 05/01/99 46,700 46,700
--------
175,350
--------
TOTAL MANDATORY PUT BONDS
(Cost $368,496) 368,496
--------
49
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
FIXED RATE TENDER OPTION BONDS -- 4.2% (b)(e)(f)
CONNECTICUT -- 0.3%
Connecticut HFA Housing Mortgage
Finance Program TOB Series 1998T
3.55%, 09/15/99 $12,995 $ 12,995
Connecticut State GO TOBP
Series 1991A (BTP-151)
3.60%, 03/17/99 7,365 7,365
--------
20,360
--------
GEORGIA -- 0.2%
Georgia State Public Improvement GO
TOBP Series 1993B & 1993C
(BTP-135)
3.63%, 03/17/99 3,865 3,865
Georgia State Public Improvement GO
TOBP Series 1993B & 1993C
(BTP-140)
3.63%, 03/17/99 4,575 4,575
Georgia State Public Improvement GO
TOBP Series 1994B (BTP-148)
3.63%, 03/17/99 7,100 7,100
--------
15,540
--------
ILLINOIS -- 0.7%
Chicago, Illinois Midway Airport RB
TOB
3.45%, 03/01/99 24,480 24,480
Illinois Metropolitan Pier & Export
Authority TOB (McCormick
Place) Series 1998A
3.45%, 03/01/99 14,355 14,355
State of Illinois GO TOBP (BTP-313)
3.65%, 06/09/99 11,880 11,880
--------
50,715
--------
MICHIGAN -- 0.2%
Wayne County, Michigan Airport RB
TOBP (BTP-314) (Detroit Airport
Project)
3.70%, 06/21/99 14,850 14,850
--------
PENNSYLVANIA -- 0.3%
Pennsylvania State University Revenue
Refunding Bonds TOB Series 2
3.75%, 01/14/99 3,245 3,245
Par Value
------- ---------
Philadelphia, Pennsylvania IDA
Airport RB TOB Series 1998A
3.75%, 08/04/99 $15,000 $ 15,000
--------
18,245
--------
SOUTH CAROLINA -- 0.1%
South Carolina State Capital
Improvement Revenue Refunding
TOBP (BTP-147) Series 1992B
3.63%, 03/17/99 5,370 5,370
--------
TEXAS -- 1.3%
Houston, Texas GO TOB
3.54%, 02/01/99 21,655 21,655
Regents of the University of Texas
(Permanent University Fund)
Revenue TOBP (BTP-143)
Series 1993A
3.65%, 03/17/99 10,685 10,685
Southeast Texas Housing Finance
Corp. TOBP (PT-193)
3.85%, 05/13/99 13,270 13,270
Texas A&M Board of Regents
Permanent University Fund TOB
3.45%, 03/01/99 28,445 28,445
Texas State Public Finance
Authority GO TOBP Series 1994A
(BTP-127)
3.63%, 03/17/99 14,980 14,980
--------
89,035
--------
UTAH -- 0.6%
Utah Board of Regents TOB
3.38%, 03/15/99 30,060 30,060
Utah Building RB TOB
3.38%, 04/01/99 9,695 9,695
--------
39,755
--------
VIRGINIA -- 0.3%
Virginia State Public School
Authority School Equipment
Financing TOB Series 5
3.65%, 02/10/99 19,685 19,685
--------
50
<PAGE>
Par Value
------- ---------
WISCONSIN -- 0.2%
Wisconsin Housing & Economic
Development Authority Home
Ownership TOBP (PT-194)
3.85%, 05/13/99 $ 15,530 $ 15,530
--------
TOTAL FIXED RATE TENDER
OPTION BONDS
(Cost $289,085) 289,085
--------
REVENUE BONDS -- 2.3% (b)
ARIZONA -- 0.0%
Maricopa County, Arizona Unified
School District #93 RB (Cave
Creek Project) Series 1997A (f)
3.30%, 07/01/99 1,500 1,520
Phoenix, Arizona Civic Improvement
Corp. Wastewater Systems Lease RB
Series 1993
3.00%, 07/01/99 1,005 1,015
--------
2,535
--------
CALIFORNIA -- 0.0% (f)
Modesto, Sacramento & Reading,
California Public Power Agency
(San Juan Project) Series G
3.50%, 07/01/99 2,950 2,975
--------
COLORADO -- 0.0% (f)
Platte River, Colorado Power
Authority RB Series DD
3.04%, 06/01/99 2,230 2,248
--------
FLORIDA -- 0.2% (f)
Dade County, Florida Residential
Facility Refunding RB
3.47%, 10/01/99 5,000 5,092
Florida Gas Utility RB
(Gas Project #1)
3.00%, 12/01/99 2,250 2,275
Florida State Division Board Financial
Department General Services
Environmental Preservation 2000 RB
Series A
3.55%, 07/01/99 6,765 6,829
Par Value
------- ---------
Florida State Division Board Financial
Department General Services RB
Series A
3.54%, 07/01/99 $ 1,735 $ 1,739
--------
15,935
--------
ILLINOIS -- 0.1% (f)
Illinois Municipal Electric Agency
Power Supply System RB
3.65%, 02/01/99 5,065 5,067
--------
IOWA -- 0.0% (f)
Iowa Student Loan Corp. RB
Series 1996F
3.10%, 12/01/99 1,000 1,010
--------
KENTUCKY -- 0.1% (f)
Jefferson County, Kentucky Health
System RB
3.15%, 10/01/99 2,545 2,561
Marion County, Kentucky Health
System RB
3.15%, 10/01/99 1,050 1,056
--------
3,617
--------
MASSACHUSETTS -- 0.0% (f)
Massachusetts Health & Education
Facilities Authority RB (Brigham &
Womens Hospital Project)
Series 1989C
3.50%, 06/01/99 1,000 1,037
Massachusetts Health & Education
Facilities Authority RB (St. Elizabeth
Hospital Boston Project) Series C
3.65%, 08/15/99 695 705
Massachusetts State Industrial
Finance Agency RB (Museum of
Fine Arts Project)
3.15%, 01/01/00 1,000 1,007
--------
2,749
--------
MICHIGAN -- 0.0% (f)
Michigan Municipal Bond Authority
State Revolving Fund RB
3.43%, 10/01/99 1,000 1,015
--------
51
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
MINNESOTA -- 0.1% (f)
Southern Minnesota Municipal
Power Agency Supply RB Series A
3.01%, 01/01/99 $ 4,950 $ 4,950
--------
MONTANA -- 0.1%
Montana State Higher Education
Assistance Corp. Student Loan RB
Series 1993B
3.28%, 12/01/99 7,000 7,101
--------
NEW YORK -- 0.1%
New York City, New York Municipal
Assistance Corp. RB Series 68
3.00%, 07/01/99 2,100 2,141
New York Triborough Bridge &
Tunnel Authority Refunding RB
Series 1998A (f)
3.20%, 01/01/99 3,540 3,540
--------
5,681
--------
NORTH CAROLINA -- 0.1%
North Carolina Eastern Municipal
Power Agency Power System RB
3.80%, 01/01/99 7,830 7,987
--------
OHIO -- 0.3%
Cleveland, Ohio City School
District RAN RB (f)
2.97%, 06/01/99 6,585 6,633
Cuyahoga County, Ohio Hospital RB
(Metro Health System Project) (f)
3.70%, 02/15/99 500 501
Ohio State Special Obligation
Elementary & Secondary RB
2.95%, 06/01/99 12,100 12,127
--------
19,261
--------
PENNSYLVANIA -- 0.2% (f)
Allegheny County, Pennsylvania
Airport Revenue Refunding Bonds
International Airport Project)
Series 1997A
3.65%, 01/01/99 4,150 4,150
Pennsylvania Intergovernmental
Special Tax RB
2.90%, 06/15/99 1,000 1,013
Par Value
------- ---------
Pennsylvania State IDA RB
(Economic Development Project)
3.82%, 01/01/99 $ 3,000 $ 3,000
Union County, Pennsylvania Higher
Education Facility Financing
Authority RB (Bucknell University
Project)
3.75%, 04/01/99 450 452
University of Pittsburgh, Pennsylvania
Revenue Refunding Bonds
Series 1997B
3.85%, 06/01/99 800 800
--------
9,415
--------
SOUTH CAROLINA -- 0.1%
Piedmont, South Carolina Municipal
Power Agency Electric RB
Series 1985B (f)
3.80%, 01/01/99 2,570 2,570
Piedmont, South Carolina Municipal
Power Agency Electric RB
Series 1985B (f)
3.40%, 01/01/99 5,200 5,200
South Carolina Public Services
Authority Refunding RB Series 1992A
3.30%, 07/01/99 1,000 1,011
--------
8,781
--------
SOUTH DAKOTA -- 0.3%
South Dakota HDA RB
(Homeownership Meeting Project)
Series 1998H
3.20%, 12/02/99 3,145 3,145
South Dakota HDA RB Series 1998I
3.20%, 12/02/99 16,105 16,105
--------
19,250
--------
TEXAS -- 0.4% (f)
Amarillo, Texas Health Facilities RB
(Baptist State Anthony Hospital
Project)
3.10%, 01/01/00 1,685 1,708
Dallas Fort Worth, Texas Regional &
International Airport Refunding RB
3.35%, 11/01/99 1,000 1,009
San Antonio, Texas Electric Gas
Preferred RB Series 1989A
3.11%, 02/01/99 14,100 14,343
52
<PAGE>
Par Value
------- ---------
San Antonio, Texas Water RB
3.70%, 05/01/99 $ 4,000 $ 4,103
Texas State Public Finance Authority
Building RB
3.70%, 02/01/99 2,975 2,982
--------
24,145
--------
WASHINGTON -- 0.2%
Franklin County, Washington Public
Utility District #001 RB (f)
3.60%, 09/01/99 1,200 1,203
Grays Harbor County, Washington
Public Utility #001 Electric Revenue
Refunding Bonds (f)
3.83%, 01/01/99 1,030 1,030
Spokane County, Washington
International Airport Refunding
Revenue Bonds Series 1993 (f)
3.30%, 06/01/99 1,000 1,006
Washington State Public Power
Supply System Revenue Refunding
Bonds (Nuclear Project #2)
Series 1997A
3.70%, 07/01/99 8,000 8,057
Washington State Public Power Supply
System Revenue Refunding Bonds
(Nuclear Project #2) Series A
3.70%, 07/01/99 1,000 1,012
--------
12,308
--------
TOTAL REVENUE BONDS
(Cost $156,030) 156,030
--------
GENERAL OBLIGATIONS -- 1.5% (b)
ALABAMA -- 0.0%
Alabama State GO
3.58%, 03/01/99 3,000 3,011
--------
ALASKA -- 0.0% (f)
Anchorage, Alaska Refunding
School GO Series 1993A
3.10%, 08/01/99 1,145 1,158
--------
ARIZONA -- 0.1% (f)
Pima County, Arizona GO
3.73%, 07/01/99 3,380 3,397
--------
Par Value
------- ---------
FLORIDA -- 0.0%
Broward County, Florida School
District GO
3.55%, 02/15/99 $ 280 $ 287
--------
GEORGIA -- 0.2%
Cherokee County, Georgia School
System GO
3.80%, 02/01/99 7,330 7,330
Dougherty County, Georgia School
District Sales Tax GO
3.40%, 09/01/99 3,275 3,298
Fulton County, Georgia Revenue
Refunding Bonds GO
3.83%, 01/01/99 2,160 2,160
Georgia State GO Series 1989B
3.10%, 07/01/99 1,000 1,024
Georgia State GO Series 1995C
3.43%, 07/01/99 1,000 1,019
--------
14,831
--------
HAWAII -- 0.2%
Hawaii County, Hawaii GO Series A (f)
3.80%, 06/01/99 1,000 1,013
State of Hawaii GO Series CC
3.30%, 02/01/99 9,340 9,348
--------
10,361
--------
ILLINOIS -- 0.1% (f)
Bolingbrook Park District, Illinois GO
3.80%, 01/01/99 650 650
Chicago Park, Illinois District GO
Refunding Bonds
3.83%, 01/01/99 2,000 2,000
Chicago Park, Illinois District
Limited GO
3.26%, 01/01/99 2,105 2,105
Chicago, Illinois School Financing
Authority Refunding GO
Series 1992A
3.75%, 06/01/99 500 504
Cook County, Illinois Housing
Development GO (204 Lyons
Township Project)
3.00%, 12/01/99 1,505 1,532
--------
6,791
--------
53
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
IOWA -- 0.0%
Cedar Rapids, Iowa GO
3.80%, 06/01/99 $ 1,445 $ 1,447
--------
MARYLAND -- 0.1%
Maryland State Local Facilities
Loan GO Series R2
3.43%, 06/01/99 1,000 1,006
Maryland Suburban Sanitation
District Sewage Disposal Revenue
Refunding Bonds GO (Montgomery
& Prince George County Project)
3.10%, 11/01/99 3,000 3,070
--------
4,076
--------
MICHIGAN -- 0.1%
Detroit, Michigan City School
District GO Series 1998B
2.85%, 05/01/99 5,000 5,019
--------
MINNESOTA -- 0.0%
Minnesota GO
3.43%, 08/01/99 1,000 1,018
--------
NEVADA -- 0.0% (f)
Washoe County, Nevada Improvement
Refunding GO
3.40%, 07/01/99 2,750 2,799
--------
NORTH CAROLINA -- 0.1%
Charlotte, North Carolina Airport GO
3.50%, 03/01/99 1,635 1,636
Charlotte, North Carolina GO
3.50%, 02/01/99 775 775
Charlotte, North Carolina GO
Series 1998A
3.50%, 02/01/99 2,325 2,326
Charlotte, North Carolina GO
Water & Sewer
3.50%, 02/01/99 3,635 3,637
--------
8,374
--------
SOUTH CAROLINA -- 0.1%
Chester County, South Carolina
School District GO Refunding
Bonds (f)
3.78%, 02/01/99 1,010 1,012
Par Value
------- ---------
Richland County, South Carolina
School District GO Number 001
3.55%, 03/01/99 $ 4,480 $ 4,502
--------
5,514
--------
TEXAS -- 0.3%
Garland, Texas Refunding GO
3.10%, 08/15/99 3,000 3,044
Houston, Texas Public
Improvement GO Revenue
Refunding Bond Series 1996B
3.10%, 03/01/99 1,175 1,177
Plano, Texas Revenue Refunding GO
Improvement Bond
3.15%, 09/01/99 1,690 1,703
Port Neches-Groves, Texas
Independent School District GO (f)
3.70%, 02/15/99 1,000 1,004
Port of Houston, Texas Authority GO (f)
3.10%, 10/01/99 2,000 2,035
Texas State College Student Loan GO
3.68%, 08/01/99 2,000 2,016
Texas State Veterans Land Refunding
Project Prerefunded GO (f)
3.20%, 12/01/99 7,435 7,777
Zapata County, Texas Industrial
School District GO (f)
3.65%, 08/15/99 1,090 1,106
--------
19,862
--------
UTAH -- 0.0%
Utah State GO
3.55%, 07/01/99 2,200 2,209
--------
WASHINGTON -- 0.1%
King County, Washington School
District #411 GO (Issaquah Reference)
Series B
3.43%, 06/01/99 1,000 1,004
Washington State GO Series 1994A
3.50%, 09/01/99 2,000 2,052
Washington State Motor Vehicle
Tax GO (f)
3.77%, 03/01/99 1,975 1,985
--------
5,041
--------
54
<PAGE>
Par Value
------- ---------
WEST VIRGINIA -- 0.1%
West Virginia State GO
3.65%, 06/01/99 $ 6,520 $ 6,529
--------
WISCONSIN -- 0.0%
Janesville, Wisconsin School
District GO (f)
3.20%, 03/01/99 1,300 1,304
Wisconsin State GO
3.75%, 05/01/99 2,000 2,006
--------
3,310
--------
TOTAL GENERAL OBLIGATIONS
(Cost $105,034) 105,034
--------
BOND ANTICIPATION NOTES -- 1.1% (b)
KANSAS -- 0.0%
Shawnee County, Kansas BAN
3.98%, 05/01/99 995 995
--------
MASSACHUSETTS -- 0.3%
Kingston, Massachusetts BAN
2.98%, 11/24/99 17,970 18,012
Massachusetts State Turnpike BAN (f)
3.75%, 06/01/99 6,110 6,144
--------
24,156
--------
NEW JERSEY -- 0.5%
Jersey City, New Jersey BAN
3.79%, 01/15/99 7,000 7,001
3.63%, 03/05/99 2,000 2,001
Jersey City, New Jersey School BAN
3.60%, 03/05/99 17,000 17,009
Princeton, New Jersey BAN
3.52%, 09/02/99 2,200 2,205
Seaside Heights, New Jersey BAN
Series A
3.75%, 02/19/99 1,030 1,030
Vernon Township, New Jersey School
District BAN Series 1998A
3.05%, 05/04/99 3,400 3,405
--------
32,651
--------
RHODE ISLAND -- 0.2%
Barrington, Rhode Island BAN
3.60%, 08/26/99 11,300 11,328
--------
Par Value
------- ---------
SOUTH CAROLINA -- 0.0%
Spartanburg, South Carolina County
School District BAN
3.76%, 06/15/99 $ 1,400 $ 1,402
--------
WISCONSIN -- 0.1%
Oshkosh, Wisconsin Area School
District BAN
3.21%, 12/15/99 3,850 3,854
--------
TOTAL BOND ANTICIPATION NOTES
(Cost $74,386) 74,386
--------
OPTIONAL PUT BONDS -- 1.0% (b)
TEXAS -- 0.8% (f)
Grapevine, Texas Industrial
Development Corp. Airport RB
(Singer County Project)
3.90%, 04/01/99 18,975 18,975
Greater East Texas Higher Education
Authority Student Loan RB Series
1992B
3.60%, 09/01/99 14,400 14,400
Greater East Texas Higher Education
Authority Student Loan RB Series
1993B-1
3.70%, 01/01/99 11,000 11,000
Greater East Texas Higher Education
Authority Student Loan RB Series
1995B
3.65%, 07/01/99 10,000 10,000
--------
54,375
--------
WYOMING -- 0.2%
Lincoln County, Wyoming Pollution
Control RB (Amoco Project)
Series 1983
3.60%, 04/01/99 14,350 14,353
--------
TOTAL OPTIONAL PUT BONDS
(Cost $68,728) 68,728
--------
REVENUE ANTICIPATION NOTES -- 0.3% (b)
CALIFORNIA -- 0.3%
California State RAN
3.15%, 06/30/99 20,000 20,082
--------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $20,082) 20,082
--------
55
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
TAX ANTICIPATION NOTES -- 0.1% (b)
KANSAS -- 0.1%
Hutchinson, Kansas GO TAN
3.79%, 04/01/99 $ 200 $ 200
Wichita, Kansas TAN
3.70%, 04/29/99 3,655 3,658
--------
3,858
--------
TOTAL TAX ANTICIPATION NOTES
(Cost $3,858) 3,858
--------
GRANT ANTICIPATION NOTES -- 0.0% (b)
New Jersey State Transportation Corp.
Capital GAN Series A
3.89%, 09/01/99 2,500 2,511
--------
TOTAL GRANT ANTICIPATION NOTES
(Cost $2,511) 2,511
--------
CERTIFICATES OF PARTICIPATION -- 0.0% (b)(f)
PENNSYLVANIA -- 0.0%
Pennsylvania State COP
3.78%, 05/01/99 1,080 1,087
--------
TOTAL CERTIFICATES OF PARTICIPATION
(Cost $1,087) 1,087
--------
Shares Value
------- ----------
TEMPORARY INVESTMENTS -- 0.0% (a)
Provident Institutional Funds -
Muni Fund Portfolio
2.50%, 01/07/99 1,387 $ 1,387
----------
TOTAL TEMPORARY INVESTMENTS
(Cost $1,387) 1,387
----------
TOTAL INVESTMENTS -- 100.9%
(Cost $6,931,296) 6,931,296
----------
OTHER ASSETS AND LIABILITIES -- (0.9%)
Other assets 62,473
Liabilities (127,000)
----------
(64,527)
----------
TOTAL NET ASSETS -- 100.0% $6,866,769
==========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
56
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1998
Par Value
------- ---------
VARIABLE RATE OBLIGATIONS -- 57.6% (a)(f)
CALIFORNIA -- 57.1%
ABAG Financing Authority for
Non-Profit Organizations COP
(Lucile Salter Packard Project)
3.85%, 01/07/99 $ 5,000 $ 5,000
ABAG Financing Authority for
Non-Profit Organizations COP
(Bentley School)
3.65%, 01/07/99 5,230 5,230
ABAG Financing Authority for
Non-Profit Organizations COP
(Harker School Project)
3.80%, 01/07/99 5,630 5,630
ABAG Financing Authority M/F
Housing (Vintage Chateau)
4.65%, 01/07/99 11,000 11,000
ABAG Financing Authority M/F
Housing RB (Mountain View
Apartments) Series 1997A
4.10%, 01/07/99 3,470 3,470
Alameda County, California IDRB
(Aitchison Family Project)
Series 1993A
3.85%, 01/07/99 2,800 2,800
Alameda County, California IDRB
(Association Heat & Control
Project)
3.85%, 01/07/99 810 810
Alameda County, California IDRB
(JMS Family Partners) Series A
3.85%, 01/07/99 1,400 1,400
Alameda County, California IDRB
(Scientific Technology Project)
Series 1994A
3.85%, 01/07/99 2,780 2,780
Alameda-Contra Costa, California
School Financial Authority COP
(Capital Improvement Finance
Project)
3.70%, 01/07/99 745 745
Anaheim, California COP (Anaheim
Memorial Hospital Assoc. Project)
3.65%, 01/07/99 2,070 2,070
Anaheim, California COP (Police
Facility Financing Project)
3.65%, 01/07/99 700 700
Par Value
------- ---------
Anaheim, California Housing
Authority M/F Housing RB (Casa
Grande Apartments) Series 1997A
3.90%, 01/07/99 $ 3,795 $ 3,795
Anaheim, California Housing
Authority M/F Housing RB (Port
Trinidad Apartments) Series 1997C
3.90%, 01/07/99 2,140 2,140
Anaheim, California Housing
Authority M/F Housing RB
(Sage Park Project) Series A
4.00%, 01/07/99 2,000 2,000
Auburn, California Unified School
District COP
3.90%, 01/07/99 10,750 10,750
Avalon, California Community
Improvement Agency Tax
Allocation RB
4.50%, 01/07/99 9,975 9,975
Basse, California COP (Union School
District Capital Improvement
Project)
4.40%, 01/07/99 6,435 6,435
Big Bear Lake, California IDRB COP
(Southwest Gas Corp. Project)
Series A
3.75%, 01/07/99 27,800 27,800
Burbank, California Redevelopment
Agency M/F Housing RB
3.15%, 01/05/99 7,900 7,900
California Alternative Energy Source
Financing Authority (GE Capital
Corp. Arroyo Project) Series A
3.75%, 01/06/99 25,330 25,330
California Alternative Energy Source
Financing Authority (GE Capital
Corp. Arroyo Project) Series 1993B
3.65%, 01/07/99 12,260 12,260
California Eastern Municipal District
Water & Sewer Revenue COP
Series 1993B
3.60%, 01/07/99 28,850 28,850
California Education Facilities
Authority (Stanford University
Project)
3.65%, 01/07/99 1,500 1,500
57
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
California Education Facilities
Authority (Stanford University
Project) Series L-6
3.65%, 01/06/99 $ 4,815 $ 4,815
California Education Facilities
Authority (University of Judaism
Project) Seires A
3.00%, 01/07/99 5,500 5,500
California Finance Authority Pollution
Control RB (Pacific Gas & Electric
Company)
5.00%, 01/01/99 600 600
California Health Facilities Financing
Authority RB (California Prebyterian
Homes) Series 1998
3.80%, 01/07/99 26,065 26,065
California Health Facilities Financing
Authority RB (Catholic Health Care)
Series 1988C
3.60%, 01/07/99 3,100 3,100
California Health Facilities Financing
Authority RB (Catholic Health Care)
Series 1996B
3.60%, 01/07/99 10,500 10,500
California Health Facilities Financing
Authority RB (Catholic Health Care)
Series 1996C
3.60%, 01/06/99 3,000 3,000
California Health Facilities Financing
Authority RB (Catholic Health Care)
Series 1996D
3.60%, 01/07/99 3,000 3,000
California Health Facilities Financing
Authority RB (Catholic Health Care)
Series 1997B (MBIA Insurance)
3.60%, 01/07/99 4,800 4,800
California Health Facilities Financing
Authority RB (Catholic Health Care)
Series A
3.60%, 01/07/99 1,400 1,400
California Health Facilities Financing
Authority RB (Children's Hospital
Project) Series 1991
3.60%, 01/07/99 17,700 17,700
California Health Facilities Financing
Authority RB (Pooled Loan Program)
Series 1985B
3.60%, 01/07/99 21,875 21,875
Par Value
------- ---------
California Health Facilities Financing
Authority RB (Scripps Memorial
Hospital) Series 1985B
3.75%, 01/07/99 $ 21,120 $ 21,120
California Health Facilities Financing
Authority RB (Scripps Memorial
Hospital) Series 1991B
3.80%, 01/07/99 400 400
California Health Facilities Financing
Authority RB (St. Francis Hospital)
Series 1995E
3.30%, 01/07/99 6,800 6,800
California Health Facilities Financing
Authority RB (St. Francis Hospital)
Series 1995F
3.90%, 01/07/99 30,000 30,000
California Public Power Agency
Subordinate Lien (San Juan Project)
Series 1997D
3.90%, 01/07/99 2,500 2,500
California Pollution Control Financing
Authority RB (Green Team of San
Jose Project)
3.85%, 01/07/99 4,400 4,400
California Pollution Control Financing
Authority RB (Pacific Gas & Electric
Co. Project) Series 1996B
4.00%, 01/07/99 119,700 119,700
California Pollution Control Financing
Authority RB (Pacific Gas & Electric
Co. Project) Series A
3.85%, 01/07/99 153,500 153,500
California Pollution Control Financing
Authority RB (Pacific Gas &
Electric Co. Project) Series B
5.05%, 01/01/99 1,300 1,300
California Pollution Control Financing
Authority RB (Pacific Gas &
Electric Co. Project) Series D
4.00%, 01/06/99 11,400 11,400
California Pollution Control Financing
Authority RB (Reynolds Metals Co.
Project) Series 1985
3.35%, 01/07/99 1,300 1,300
California Pollution Control Financing
Authority RB (Southern California
Edison Project) Series 1986C
5.20%, 01/01/99 1,000 1,000
58
<PAGE>
Par Value
------- ---------
California Pollution Control Financing
Authority Resource Recovery RB
(Sanger Project) Series 1990A
3.75%, 01/07/99 $ 2,800 $ 2,800
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Allan Co. Project)
3.85%, 01/07/99 1,225 1,225
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Athens Disposal Co. Project)
Series 1995A
3.85%, 01/07/99 19,335 19,335
California Pollution Control Financing
Authority Solid Waste Disposal RB
(BLT Enterprises Project) Series 1995A
3.85%, 01/06/99 4,200 4,200
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Burrtee Waste Industry Project)
3.85%, 01/07/99 4,025 4,025
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Burrtee Waste Industry Project)
Series 1995A
3.85%, 01/06/99 2,000 2,000
3.85%, 01/07/99 2,470 2,470
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Charter Evaporation Project)
3.85%, 01/06/99 9,520 9,520
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Cold Cyn Landfill Project)
3.85%, 01/06/99 7,200 7,200
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Colmac Energy Project) Series 1990A
3.75%, 01/07/99 32,700 32,700
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Colmac Energy Project)
Series 1990B
3.75%, 01/07/99 6,865 6,865
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Colmac Energy Project)
Series 1990C
3.75%, 01/07/99 4,050 4,050
Par Value
------- ---------
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Contra Costa Services) Series
1995A
3.80%, 01/07/99 $ 3,900 $ 3,900
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Edco Disposal Corp. Project)
Series 1996A
3.85%, 01/01/99 17,100 17,100
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Esondid Disposal Project)
3.05%, 01/07/99 5,235 5,235
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Madera Disposable Project)
Series A
3.85%, 01/06/99 1,800 1,800
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Santa Clara Project)
3.85%, 01/07/99 4,495 4,495
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Santa Clara Project)
3.85%, 01/06/99 11,700 11,700
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Solag Disposal Project)
Series 1997A
3.85%, 01/07/99 3,735 3,735
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Sun Valley Paper Project)
3.85%, 01/06/99 1,500 1,500
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Talco Plastics Project)
Series 1997A
3.85%, 01/07/99 4,300 4,300
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Tri Community Recycle Project)
3.85%, 01/06/99 2,455 2,455
59
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
California Pollution Control Financing
Authority Solid Waste Disposal RB
(West Valley Project) Series 1997A
3.85%, 01/07/99 $ 9,400 $ 9,400
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Western Waste Industrial)
Series 1994A
4.20%, 01/07/99 6,000 6,000
California Pollution Control Financing
Authority Solid Waste Disposal RB
Series A
3.90%, 01/06/99 10,000 10,000
California State Economic Development
Financing Authority (Mannesmann
Dematic Corp.)
4.10%, 01/07/99 3,200 3,200
California State Economic Development
Financing Authority IDRB (Calco
Project)
3.75%, 01/07/99 995 995
California State Economic Development
Financing Authority IDRB (Gaiser
Tool Project)
3.85%, 01/07/99 3,155 3,155
California State Economic Development
Financing Authority IDRB
(Lion Raisin Project)
3.70%, 01/07/99 1,000 1,000
California State Economic Development
Financing Authority IDRB (Mercury
Air Group)
3.85%, 01/07/99 4,900 4,900
California State Economic Development
Financing Authority IDRB (Serra
Microchassis Project)
5.15%, 01/01/99 3,700 3,700
California State Economic Development
Financing Authority IDRB (Serra
Microchassis Project) Series 1997A
5.15%, 01/01/99 1,280 1,280
California State Economic
Development Financing Authority RB
(Boyd Furniture)
3.85%, 01/07/99 8,000 8,000
California State Economic Development
Financing Authority RB (Bucks
Center for Aging Project)
3.85%, 01/07/99 47,600 47,600
Par Value
------- ---------
California State Economic Development
Financing Authority RB (Costa
Macoroni Project)
3.10%, 01/07/99 $ 3,710 $ 3,710
California State Economic Development
Financing Authority RB (Killion
Industry's Project)
4.40%, 01/07/99 6,500 6,500
California Statewide Community
Development Authority (Davis
Retirement Care)
5.00%, 01/07/99 500 500
California Statewide Community
Development Authority (Nichols
Pistachio) Series C
3.75%, 01/07/99 1,000 1,000
California Statewide Community
Development Authority COP
4.20%, 01/06/99 2,485 2,485
California Statewide Community
Development Authority COP
(Northern California Retired
Police Officers)
5.05%, 01/01/99 2,000 2,000
California Statewide Community
Development Authority IDRB
(Biocol Investments LP)
Series 1997B
4.80%, 01/07/99 1,500 1,500
California Statewide Community
Development Authority M/F
Housing RB (Brookhollow Project)
Series H
4.20%, 01/06/99 5,000 5,000
California Statewide Community
Development Authority M/F
Housing RB (Casa la Palma Project)
Series G
4.20%, 01/06/99 7,000 7,000
California Statewide Community
Development Authority M/F
Housing RB (Kimberly Woods Project)
Series 1995B
3.95%, 01/07/99 11,400 11,400
California Statewide Community
Development Authority M/F
Housing RB (Plaza Club Apartments)
Series 1997A
4.00%, 01/07/99 9,000 9,000
60
<PAGE>
Par Value
------- ---------
California Statewide Community
Development Authority M/F
Housing RB (Octillo Place
Apartments Project)
4.20%, 01/06/99 $ 6,150 $ 6,150
California Statewide Community
Development Authority Revenue
Refunding COP (St. Joseph Health
System)
3.80%, 01/01/99 9,500 9,500
California Statewide Community
Development Corp. IDRB (13th
Associates Project)
4.85%, 01/07/99 5,185 5,185
California Statewide Community
Development Corp. IDRB (Aerostar
Properties Project)
3.90%, 01/07/99 4,395 4,395
California Statewide Community
Development Corp. IDRB
(Agricultural Products, Inc. Project)
4.80%, 01/07/99 1,380 1,380
California Statewide Community
Development Corp. IDRB (Cowden
Metal Stamping Project)
4.80%, 01/07/99 2,055 2,055
California Statewide Community
Development Corp. IDRB (Drip
Irrigation Co. Project)
3.95%, 01/06/99 3,600 3,600
California Statewide Community
Development Corp. IDRB (Flambeau
Airmold Project)
3.95%, 01/07/99 2,700 2,700
California Statewide Community
Development Corp. IDRB (Industrial
Dynamics, Co. Project)
4.80%, 01/07/99 4,380 4,380
California Statewide Community
Development Corp. IDRB (Pacific
Handy Cutter Products Project)
4.85%, 01/07/99 745 745
California Statewide Community
Development Corp. IDRB (The
Diamond Foods Project) Series 1991
4.80%, 01/07/99 1,290 1,290
California Statewide Community
Development Corp. IDRB
Series 1998C
3.95%, 01/06/99 2,250 2,250
Par Value
------- ---------
California Statewide Community
Development M/F Housing RB
(Rio Vista Apartment Project)
Series F
4.20%, 01/06/99 $ 4,000 $ 4,000
California Statewide Community
Industrial Development Revenue
Refunding Bonds (Golden Valley
Project) Series A
3.95%, 01/06/99 2,100 2,100
California Statewide M/F Housing
Authority (Sunrise of Moraga)
Series 1997G
4.00%, 01/07/99 3,600 3,600
California Statewide M/F Housing
Authority RB (Woodsong Apartments)
Series 1997B
3.90%, 01/07/99 3,427 3,427
Carlsbad, California M/F Housing
Revenue Refunding Bonds COP
(La Costa Apartment Project)
Series 1993A
3.45%, 01/07/99 11,720 11,720
Chula Vista, California IDRB
(San Diego Gas & Electric Co.
Project) Series 1993A
3.90%, 01/06/99 11,800 11,800
Chula Vista, California IDRB
(San Diego Gas & Electric Co.
Project) Series A
5.15%, 01/01/99 3,600 3,600
Concord, California M/F Housing
Authority RB (California Hill
Apartments) Series 1989A
3.60%, 01/07/99 6,750 6,750
Concord, California M/F Housing
Mortgage RB (Bel Air Apartments
Project) Series 1986A
3.70%, 01/07/99 3,000 3,000
Contra Costa County, California M/F
Housing Mortgage RB (El Cerrito
Project) Series A
3.70%, 01/07/99 980 980
Duarte, California Redevelopment
Agency COP (Johnson Duarte
Partners Project) Series 1984B
3.70%, 01/07/99 1,600 1,600
61
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Duarte, California Redevelopment
Agency COP (Piken Duarte Partners
Project) Series 1984A
3.70%, 01/07/99 $ 4,250 $ 4,250
Dublin, California Housing Authority
M/F Housing RB (Park Sierra Project)
Series A
3.80%, 01/06/99 12,700 12,700
El Cajon, California M/F Housing RB
(Pinewood Apartments Project)
3.80%, 01/07/99 1,450 1,450
El Cajon, California Redevelopment
Bonds M/F Housing RB (Mollison &
Madison Project)
3.80%, 01/07/99 5,400 5,400
Encinitas, California M/F Housing
Revenue Refunding Bonds (Torrey
Pines Project) Series A
2.55%, 01/07/99 8,100 8,100
Foothill, California Eastern
Transportation Corridor Agency Toll
Road RB Series 1995B
3.75%, 01/07/99 16,700 16,700
Foothill, California Eastern
Transportation Corridor Agency Toll
Road RB Series 1995C
3.60%, 01/07/99 1,500 1,500
Foothill, California Eastern
Transportation Corridor Agency Toll
Road RB Series 1995D
3.90%, 01/07/99 17,700 17,700
Fremont, California M/F Housing
Revenue Refunding COP (Amber
Court Apartments Project) Series
1990A
3.85%, 01/07/99 10,000 10,000
Fresno, California IDA (Keiser Corp.)
3.85%, 01/07/99 2,295 2,295
Fresno, California M/F Housing
Revenue Refunding Bonds (Heron
Pointe Apartments) Series 1996A
2.85%, 01/07/99 10,225 10,225
Hayward, California M/F Housing RB
(Timbers Apartments Project)
Series A
3.70%, 01/06/99 3,700 3,700
Par Value
------- ---------
Indio, California M/F Redevelopment
Bonds Refunding Housing Mortgages
(Carreon Apartments Project)
Series 1996A
3.70%, 01/07/99 $ 3,950 $ 3,950
Irvine Ranch, California Improvement
Bond Act 1915 RB (Assessment
District Number 89-10)
5.10%, 01/01/99 100 100
Irvine Ranch, California Improvement
Bond Act 1915 RB (Assessment
District Number 85-7-I)
3.70%, 01/07/99 2,000 2,000
Irvine Ranch, California Improvement
Bond Act 1915 RB (Assessment
District Number 97-16)
5.10%, 01/01/99 2,500 2,500
Irvine Ranch, California Public
Facilities & Infrastructure Authority
Lease Revenue Capital Improvement
Bonds Series 1987
3.70%, 01/07/99 1,500 1,500
Irvine Ranch, California Water
District Improvement Bond Limited
Obligation No. 97-17
5.10%, 01/01/99 1,700 1,700
Kern County, California COP (Kern
Public Facilities Project) Series A
3.60%, 01/07/99 4,800 4,800
Livermore, California M/F Housing
Revenue Refunding Bonds (Arbors
Apartment Project) Series 1991A
3.80%, 01/07/99 9,005 9,005
Long Beach, California Housing
Authority M/F Housing RB (Channel
Point Apartments Project)
3.80%, 01/07/99 6,250 6,250
Los Angeles County,
California COP ACES (Los Angeles
County Museum of Art Project)
Series 1985A
3.80%, 01/07/99 3,000 3,000
Los Angeles County,
California COP ACES (Los Angeles
County Museum of Art Project)
Series 1985B
3.80%, 01/07/99 3,300 3,300
62
<PAGE>
Par Value
------- ---------
Los Angeles County, California
Housing Authority M/F Mortgage RB
3.75%, 01/04/99 $ 2,700 $ 2,700
Los Angeles County, California Housing
Authority M/F RB (Malibu Canyon
Apartments Project) Series B
3.75%, 01/07/99 43,400 43,400
Los Angeles County, California Housing
Authority M/F RB (Park Sierra
Project)
3.60%, 01/07/99 30,500 30,500
Los Angeles County, California M/F
Mortgage Revenue Refunding Bonds
(Casden Community Complex
Project) Series 1991C
3.30%, 01/07/99 3,200 3,200
Los Angeles County, California
Metropolitan Transportation
Authority Revenue Refunding Bonds
Series 1993A
3.75%, 01/07/99 49,800 49,800
Los Angeles County, California
Pension Revenue Refunding Bond
Series 1996A (d)
3.70%, 01/07/99 35,100 35,100
Los Angeles County, California
Pension Revenue Refunding Bond
Series 1996A
3.70%, 01/07/99 5,000 5,000
Los Angeles County, California
Transportation Commission Sales
Tax Revenue Series 1992A
3.70%, 01/07/99 2,600 2,600
Los Angeles, California Community
Redevelopment Agency (Grand
Promenade Project)
3.40%, 01/07/99 16,600 16,600
Los Angeles, California Community
Redevelopment Agency COP
(Baldwin Hills Public Parking Project)
Series B
3.66%, 01/07/99 20,600 20,600
Los Angeles, California Community
Redevelopment Agency COP
(Broadway Springs Center Project)
Series 1987
3.85%, 01/07/99 9,700 9,700
Par Value
------- ---------
Los Angeles, California M/F
Housing RB (Beverly Park
Apartments)
3.80%, 01/07/99 $ 23,100 $ 23,100
Los Angeles, California M/F
Housing RB (Lucas Studios Project)
Series 1991D
4.05%, 01/07/99 3,000 3,000
Madera, California Public Financing
Municipal Golf Course Revenue
Refinancing Authority
3.40%, 01/07/99 1,950 1,950
Metropolitan Water District of
Southern California Revenue
Refunding Bonds Series 1996A
3.75%, 01/07/99 84,030 84,030
Metropolitan Water District of
Southern California Revenue
Refunding Bonds Series 1997C
3.65%, 01/07/99 5,000 5,000
Moorpark, California M/F Housing
Revenue Refunding Bonds (Le Club
Apartments Project) Series A
3.65%, 01/07/99 6,000 6,000
Mount San Jacinto, California Winter
Park Authority (Palm Springs Aerial
Project)
3.85%, 01/07/99 8,700 8,700
Oakland, California Financing
Authority Lease RB Series A-2
3.65%, 01/07/99 23,200 23,200
Orange County, California Apartment
Development RB (Monarch Bay
Apartments Project) Series 1985T
3.40%, 01/07/99 4,350 4,350
Orange County, California Apartment
Development RB Series 1985U
3.65%, 01/07/99 9,100 9,100
Orange County, California Apartment
Development RB Series 1985V
4.05%, 01/07/99 18,000 18,000
Orange County, California Apartment
Development RB Series F
3.80%, 01/07/99 11,000 11,000
Orange County, California Apartment
Development RB Series G-3
3.80%, 01/07/99 28,000 28,000
63
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Orange County, California Apartment
Development Revenue Refunding
Bonds (Jess L. Frost Project)
Series 1985B
3.60%, 01/07/99 $ 8,200 $ 8,200
Orange County, California Apartment
Development Revenue Refunding
Bonds (The Lakes Project #185)
Series 1991A
3.80%, 01/07/99 32,050 32,050
Orange County, California COP
(Florence Crittenton Services)
Series 1990
3.80%, 01/07/99 6,300 6,300
Orange County, California Housing
M/F RB (Lantern Pines Project)
3.30%, 01/06/99 3,500 3,500
Orange County, California Sanitation
District Authority
5.10%, 01/01/99 8,800 8,800
Orange County, California
Sanitation District COP
(Districts 1, 2, 3, 5, 6, 7,
11, 13 & 14)
5.10%, 01/01/99 14,700 14,700
Orange County, California Sanitation
District COP (Sanitation
Districts 1, 2, 3,
5, 6, 7 & 11) Series 1992C
3.75%, 01/07/99 21,670 21,670
Panama Buena Vista, California
Unified School District COP
(1994 Capital Improvement
Financing Project)
4.40%, 01/07/99 4,000 4,000
Petaluma, California Community M/F
Housing Authority (Oakmont At
Petaluma Project)
4.00%, 01/07/99 3,550 3,550
Pinole, California Redevelopment
Agency M/F Housing RB (East Bluff
Apartments Project)
4.10%, 01/07/99 2,559 2,559
Pleasant Hill, California M/F
Housing RB (Brookside Apartments
Project)
3.55%, 01/07/99 5,200 5,200
Par Value
------- ---------
Pleasant Hill, California
Redevelopment Agency M/F Housing
(Chateau III Project) Series A
4.00%, 01/07/99 $ 2,360 $ 2,360
Redwood City, California COP (City
Hall Project)
3.85%, 01/07/99 2,400 2,400
Riverside County, California
Community Facilities District #88-4
(Winchester Ranch)
3.65%, 01/07/99 18,100 18,100
Riverside County, California COP
(Riverside County Public Facility
Project) Series 1985A
3.50%, 01/01/99 7,753 7,753
Riverside County, California Housing
Authority M/F Housing RB
(Briarwood Apartment Project)
Series 1985C
3.65%, 01/07/99 4,500 4,500
Riverside County, California Housing
Authority M/F Housing RB
(Victoria Springs Apartments
Project)
3.90%, 01/06/99 9,300 9,300
Riverside County, California IDA RB
(Calmold Inc. Project)
3.95%, 01/07/99 3,780 3,780
Riverside County, California IDA RB
(Cryogenic Project) Series B
3.75%, 01/07/99 4,100 4,100
Riverside County, California M/F
Housing RB (Ambergate Apartments)
Series 1992A
3.65%, 01/07/99 3,000 3,000
Riverside County, California M/F
Housing RB (Tyler Village Project)
3.90%, 01/06/99 7,860 7,860
Sacramento County, California COP
(Administration Center & Court
House Project)
3.70%, 01/07/99 1,100 1,100
Sacramento County, California
Housing Authority (Oakland
Valley Apartments Project)
Series E
3.80%, 01/07/99 4,000 4,000
64
<PAGE>
Par Value
------- ---------
Sacramento County, California
Housing Authority (Sun Valley
Apartments Project) Series F
3.80%, 01/07/99 $ 3,750 $ 3,750
Sacramento County, California
Housing Authority M/F Housing RB
(Chesapeake Commons Project)
Series 1997A
3.80%, 01/07/99 20,000 20,000
Sacramento County, California
Special Facilities (Revcessna Aircraft
Corp. Project)
3.90%, 01/07/99 3,700 3,700
Salinas, California Apartment
Development M/F Housing RB
(Mariner Villa Project) Series 1985B
3.40%, 01/07/99 2,725 2,725
San Bernardino County, California COP
(Medical Center Financing Project)
3.80%, 01/06/99 64,810 64,810
San Bernardino County, California
Housing Authority M/F Housing RB
(Montclair Heritage Project)
Series 1993A
3.65%, 01/07/99 4,620 4,620
San Bernardino County, California
Housing Authority M/F Housing RB
(Rialto Heritage Project)
Series 1993A
3.65%, 01/07/99 4,330 4,330
San Bernardino County, California M/F
Housing (Nova Park Project) Series A
4.20%, 01/07/99 5,520 5,520
San Bernardino County, California M/F
Housing RB (Western Properties
Project IV) Series 1985
3.20%, 01/07/99 4,100 4,100
San Diego, California Housing
Authority M/F Housing RB (La Cima
Project) Series 1985K
3.65%, 01/07/99 4,005 4,005
San Francisco, California City & County
Redevelopment Agency M/F Housing RB
(Fillmore Center Project) Series A1
3.60%, 01/07/99 29,000 29,000
Par Value
------- ---------
San Francisco, California City & County
Redevelopment Agency M/F
Housing RB (Fillmore Center Project)
Series A2
3.70%, 01/07/99 $ 3,750 $ 3,750
San Francisco, California City & County
Redevelopment Agency M/F Housing RB
(Rincon Center Apartments)
Series 1985B
3.50%, 01/07/99 8,555 8,555
San Francisco, California Housing
Authority M/F Housing RB (Magnolia
Plaza Project) Series A
3.70%, 01/07/99 4,500 4,500
San Jose, California M/F Housing RB
(Almeden Lake Apartments Project)
Series 1997A
4.00%, 01/07/99 6,500 6,500
San Jose, California M/F Housing RB
(Carlton Plaza Project) Series A
3.95%, 01/07/99 5,000 5,000
San Jose, California M/F Housing RB
(Seinna at Renaissance Project)
Series 1996A
4.00%, 01/07/99 12,500 12,500
San Jose, California Redevelopment
Agency RB (Merged Area
Redevelopment Project)
3.20%, 01/07/99 5,000 5,000
San Jose, California Redevelopment
Agency RB (Merged Area
Redevelopment Project) Series 1996A
3.70%, 01/07/99 10,600 10,600
San Jose, California Redevelopment M/F
Housing (101 San Fernando
Apartments Project) Series A
3.30%, 01/06/99 28,000 28,000
San Leandro, California M/F
Housing RB (Carlton Plaza Project)
Series A
4.00%, 01/07/99 1,900 1,900
San Lorenzo, California Unified School
District COP (Capital Improvement
Financing Project)
3.90%, 01/07/99 17,000 17,000
65
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Santa Ana, California Unified School
District COP (Land Acquisition
Project)
3.80%, 01/07/99 $ 5,100 $ 5,100
Santa Clara County, California Hospital
Facility Authority RB (El Camino
Hospital District - Valley Medical
Center Project) Series 1985B
3.65%, 01/07/99 7,700 7,700
Santa Clara County, California M/F
Housing Revenue Refunding Bonds
(Brairwood Apartments Project)
Series 1996B
3.80%, 01/07/99 7,800 7,800
Santa Clara County, California M/F
Housing Revenue Refunding Bonds
(Grove Garden Apartments)
Series 1997A
3.80%, 01/07/99 14,000 14,000
Santa Clara County, California Transit
Authority Series 1985A
3.85%, 01/01/99 9,400 9,400
Santa Fe Springs, California IDA RB
3.00%, 01/30/99 4,000 4,000
Santa Paula, California Public
Financing Authority Lease Water
(Aquis Project)
3.95%, 01/06/99 5,000 5,000
Santa Rosa, California M/F Housing RB
(Quail Run Apartments) Series 1997A
4.00%, 01/07/99 5,150 5,150
Southern California Public Power
Authority RB (Southern Transmission
Project) Series 1991
2.60%, 01/07/99 18,400 18,400
Southern California Public Power
Authority Revenue Refunding Bonds
(Palos Verdes Project) Series 1996B
2.60%, 01/01/99 19,100 19,100
Southern California Public Power
Authority Revenue Refunding Bonds
Series C
3.65%, 01/07/99 11,520 11,520
Southern California Public Power
Authority Transmission Project RB
(Southern Transmission Project)
Series 1996
3.80%, 01/07/99 15,300 15,300
Par Value
------- ---------
Tulare Porterville, California School
Financing Authority
4.40%, 01/07/99 $ 7,275 $ 7,275
Turlock, California Irrigation
District COP (Municipal Utilities -
Water & Sewer Transmission Project)
Series 1996A
3.70%, 01/07/99 2,100 2,100
Union City, California M/F Housing RB
(Greenhaven Apartments Project)
Series1997A
3.80%, 01/07/99 10,975 10,975
Vallecitos, California Water District
(Twin Oaks Reservoir Project)
3.60%, 01/07/99 11,265 11,265
Victor Valley, California Community
College District COP
3.75%, 01/07/99 53,450 53,450
West Sacramento, California Special
Class Tax Community Facilities
District #6
3.65%, 01/07/99 4,250 4,250
West Sacramento, California Special
Tax RB
3.65%, 01/07/99 3,500 3,500
Westminster, California Agency Tax
Allocation (Community Redevelopment
Project)
3.85%, 01/07/99 7,950 7,950
Westminster, California COP (Civic
Center Project) Series A
3.85%, 01/07/99 4,600 4,600
Windsor, California M/F (Oakmont At
Windsor Project)
4.30%, 01/07/99 700 700
----------
2,268,224
----------
PUERTO RICO -- 0.5%
Puerto Rico Commonwealth Highway
& Transportation Authority Highway
Series 1998A
3.50%, 01/06/99 20,100 20,100
----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $2,288,324) 2,288,324
----------
66
<PAGE>
Par Value
------- ---------
TAX-EXEMPT COMMERCIAL PAPER -- 18.9% (b)
CALIFORNIA -- 18.4%
California Pollution Control Financing
Authority RB TECP (Southern
California Edison) Series 1985A
2.90%, 01/27/99 $ 12,000 $ 12,000
3.00%, 03/10/99 2,100 2,100
California Pollution Control
Financing Authority Solid Waste
Disposal RB TECP (Thermal Energy
Development) Series 1988A (f)
3.00%, 03/11/99 17,600 17,600
California Pollution Control Financing
Authority TECP Series 1996D (f)
2.80%, 02/25/99 20,000 20,000
East Bay, California Municipal Utilities
District Wastewater Systems TECP (f)
3.20%, 01/14/99 19,600 19,600
3.05%, 02/16/99 16,700 16,700
Long Beach, California Harbor RB TECP
Series 1994A (f)
2.90%, 03/10/99 44,850 44,850
Los Angeles County, California
Wastewater System TECP (f)
2.90%, 04/05/99 11,900 11,900
Los Angeles, California Wastewater
System RB TECP (f)
2.90%, 03/26/99 34,500 34,500
Los Angeles County, California Capital
Asset Leasing Corp. Lease RB TECP (f)
2.95%, 03/05/99 15,250 15,250
Metropolitan Water District of
Southern California TECP
3.25%, 02/10/99 10,000 10,000
2.80%, 03/10/99 16,100 16,100
Orange County, California Local
Transportation Authority Sales Tax
Revenue TECP (f)
3.05%, 02/16/99 56,000 56,000
3.00%, 03/12/99 4,600 4,600
Riverside County, California Teeter
Obligation TECP Series B (f)
2.90%, 01/27/99 28,537 28,537
3.10%, 01/27/99 1,126 1,126
Sacramento, California Municipal
Utilities District TECP (f)
2.90%, 04/05/99 17,000 17,000
Par Value
------- ---------
Sacramento, California Municipal
Utility District TECP Series 1 (f)
2.90%, 02/16/99 $ 16,300 $ 16,300
2.75%, 04/05/99 15,237 15,237
San Diego County, California
Transportation Teeter Obligation TECP
Series B (f)
2.80%, 02/11/99 1,000 1,000
2.85%, 03/10/99 14,000 14,000
San Francisco, California International
Airport TECP Series A (f)
2.80%, 02/05/99 38,380 38,380
2.80%, 04/05/99 10,515 10,515
State of California GO TECP (f)
3.00%, 01/21/99 17,000 17,000
2.85%, 02/05/99 10,000 10,000
2.85%, 02/11/99 27,400 27,400
2.95%, 02/11/99 10,000 10,000
2.95%, 02/19/99 2,900 2,900
2.85%, 02/22/99 9,500 9,500
2.80%, 02/23/99 32,200 32,200
2.75%, 02/24/99 38,000 38,000
2.85%, 02/25/99 16,000 16,000
2.85%, 02/26/99 10,000 10,000
2.95%, 03/05/99 10,000 10,000
2.85%, 03/11/99 9,600 9,600
University of California Board of
Regents TECP Series 1996A (f)
3.20%, 01/14/99 35,555 35,555
3.05%, 03/12/99 47,000 47,000
2.85%, 04/08/99 16,421 16,421
2.90%, 05/18/99 3,000 3,000
Ventura County, California
Transportation TECP Series 1997A (f)
2.85%, 02/08/99 12,000 12,000
--------
729,871
--------
PUERTO RICO -- 0.5%
Puerto Rico Government Development
Bank TECP
2.95%, 02/17/99 7,700 7,700
2.90%, 03/05/99 14,100 14,100
--------
21,800
--------
TOTAL TAX-EXEMPT
COMMERCIAL PAPER
(Cost $751,671) 751,671
--------
67
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
TAX AND REVENUE ANTICIPATION NOTES -- 10.8% (b)
CALIFORNIA -- 9.2%
Alameda County, California
Transportation Authority TRAN
3.60%, 07/07/99 $ 15,000 $ 15,067
Berkeley, California Transportation
Authority TRAN (f)
3.03%, 10/01/99 12,750 12,793
California School Cash Reserve
Program Authority Pooled TRAN (f)
2.80%, 07/02/99 1,500 1,512
3.60%, 07/02/99 20,000 20,086
3.74%, 07/02/99 75,000 75,274
Contra Costa County, California Board
of Education RB TRAN
3.60%, 06/30/99 28,358 28,682
Los Angeles County, California TRAN
2.85%, 06/30/99 1,100 1,109
2.90%, 06/30/99 1,100 1,108
3.55%, 06/30/99 30,500 30,637
3.67%, 06/30/99 30,000 30,118
Los Angeles, California City
Transportation TRAN Series 1996-97
3.55%, 06/30/99 11,000 11,023
Los Angeles, California Community
College District TRAN
3.62%, 07/29/99 5,500 5,519
Orange County, California Fire
Authority Transportation TRAN
3.65%, 07/13/99 7,215 7,235
Riverside County, California TRAN
2.83%, 09/30/99 4,500 4,553
2.90%, 09/30/99 22,500 22,754
3.15%, 09/30/99 2,000 2,019
San Bernardino County,
California TRAN Series 1998
3.10%, 09/30/99 44,300 44,778
San Francisco, California City &
County School District TRAN
3.40%, 09/22/99 11,000 11,085
San Joaquin County, California
Transportation TRAN
3.40%, 01/15/99 7,500 7,503
Sonoma County, California
Transportation TRAN
4.50%, 02/01/99 30,000 30,035
Par Value
------- ---------
Yolo County, California
Transportation TRAN
3.07%, 10/01/99 $ 1,835 $ 1,848
--------
364,738
--------
PUERTO RICO -- 1.6%
Commonwealth of Puerto Rico
TRAN Series 1998A
2.85%, 07/30/99 65,000 65,240
--------
TOTAL TAX AND REVENUE
ANTICIPATION NOTES
(Cost $429,978) 429,978
--------
VARIABLE RATE TENDER OPTION BONDS -- 6.9% (a)(c)(f)
CALIFORNIA -- 4.6%
California HFA Home Mortgage RB TOB
3.88%, 01/07/99 7,570 7,570
California Housing Financing Agency
Home Mortgage TOBP (BTP-249)
4.10%, 01/07/99 4,740 4,740
California State Department Water
Service TOB
3.88%, 01/07/99 6,430 6,430
California State GO TOB
3.93%, 01/07/99 40,105 40,105
California State GO TOBP (PT-153)
3.92%, 01/07/99 12,840 12,840
California State GO TOBP (PT-1072)
3.93%, 01/07/99 8,965 8,965
Los Angeles County, California
Metropolitan Transit Authority TOB
4.10%, 01/07/99 23,830 23,830
Los Angeles, California TOB
(Department Water & Power
Electric Power Plant) Series 1
4.10%, 01/06/99 19,995 19,995
Metropolitan Water District of
Southern California Revenue
Refunding TOB Series 1996A
4.15%, 01/07/99 7,945 7,945
Palo Alto, California Unified School
District Merlot Series R
4.10%, 01/06/99 6,000 6,000
Southern California Public Power
Authority TOBP (BTP-90) (San Juan
Power Project) Series A
4.10%, 01/07/99 8,290 8,290
68
<PAGE>
Par Value
------- ---------
University of California Board of
Regents TOBP (PT-1057)
3.88%, 01/07/99 $ 34,505 $ 34,505
--------
181,215
--------
PUERTO RICO -- 2.3%
Puerto Rico Commonwealth
Infrastructure Financing
Authority TOB
3.80%, 01/07/99 23,400 23,400
Puerto Rico Commonwealth
Infrastructure Financing
Authority TOBP (PT-1086)
3.80%, 01/07/99 25,650 25,650
Puerto Rico Commonwealth Public
Improvement TOB
3.80%, 01/07/99 20,300 20,300
Puerto Rico Commonwealth TOB
3.80%, 01/07/99 145 145
Puerto Rico Commonwealth TOBP
(PT 181)
3.80%, 01/07/99 7,325 7,325
Puerto Rico Highway &
Transportation TOB
3.80%, 01/07/99 15,840 15,840
--------
92,660
--------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $273,875) 273,875
--------
REVENUE ANTICIPATION NOTES -- 2.6% (b)
California State RAN
2.66%, 06/03/99 27,200 27,350
2.80%, 06/30/99 16,000 16,092
2.83%, 06/30/99 4,275 4,299
2.90%, 06/30/99 15,000 15,079
3.00%, 06/30/99 13,000 13,063
3.15%, 06/30/99 26,130 26,237
--------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $102,120) 102,120
--------
REVENUE BONDS -- 1.4% (b)
California HFA Home Mortgage RB
Series K (f)
3.65%, 08/01/99 21,000 21,000
Par Value
------- ---------
California State Department Water
Resource RB (Central Valley Project)
Series T
2.88%, 12/01/99 $ 8,000 $ 8,152
Eden Township, California Hospital
District Pre-Refunded RB (d)(f)
3.97%, 11/01/99 5,000 5,482
Los Angeles, California Airport RB
Series A
3.69%, 05/15/99 10,000 10,011
Northern California Power Agency
Refunding RB (Hydroelectric
Project #1)
3.64%, 07/01/99 4,690 4,709
Orange County, California Airport RB (f)
3.43%, 07/01/99 3,165 3,188
San Francisco, California City &
County Sewer RB (f)
3.60%, 10/01/99 1,000 1,046
Santa Cruz County, California Public
Financing Authority RB Series B (f)
2.98%, 09/01/99 2,135 2,252
--------
TOTAL REVENUE BONDS
(Cost $55,840) 55,840
--------
MANDATORY PUT BONDS -- 1.1% (b)
California HFA RB Series C (f)
3.55%, 02/01/99 5,430 5,430
California HFA RB Series E
3.55%, 03/12/99 17,830 17,826
California HFA S/F TRAN (f)
3.60%, 04/01/99 13,500 13,500
California Pollution Control Financing
Authority RB (Chevron Inc. Project)
3.65%, 05/15/99 7,515 7,515
--------
TOTAL MANDATORY PUT BONDS
(Cost $44,271) 44,271
--------
FIXED RATE TENDER OPTION BONDS -- 1.1% (b)(e)(f)
California Housing Financing Agency
Home Mortgage TOB (PT-215)
3.69%, 04/08/99 3,680 3,680
69
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
California State Department Water
Resources RB TOBP (BTP-141)
(Central Valley Project) Series J3
3.18%, 06/10/99 $ 5,155 $ 5,155
Los Angeles County, California
Transportation Commission Sales
Tax RB TOBP (BTP-146)
3.60%, 06/10/99 23,078 23,078
Metropolitan Water District Southern
California GO Revenue Refunding
Bonds TOBP (BTP-115)
Series 1993A-1 & 1993A-2
3.02%, 06/10/99 10,145 10,145
--------
TOTAL FIXED RATE TENDER
OPTION BONDS
(Cost $42,058) 42,058
--------
GENERAL OBLIGATIONS -- 1.0% (b)
California State GO
2.90%, 10/01/99 2,000 2,053
2.88%, 12/01/99 22,230 22,453
California State GO Series B
4.03%, 06/01/99 15,550 15,571
--------
TOTAL GENERAL OBLIGATIONS
(Cost $40,077) 40,077
--------
CERTIFICATES OF PARTICIPATION -- 0.5% (b)
Alameda County, California COP
(Capital Project) (f)
2.90%, 12/01/99 2,155 2,176
Los Angeles County, California COP
(Correctional Facilities Project) (f)
3.03%, 09/01/99 4,000 4,077
Los Angeles, California Convention &
Exhibition Center Authority COP
Series A
2.95%, 08/15/99 9,075 9,458
Los Angeles, California Unified School
District COP Series A (f)
2.96%, 11/01/99 2,285 2,304
--------
TOTAL CERTIFICATES OF PARTICIPATION
(Cost $18,015) 18,015
--------
Shares Value
------- ---------
TEMPORARY INVESTMENTS -- 0.0% (a)
Provident Institutional Funds -
California Money Fund Portfolio
2.50%, 01/07/99 255 $ 255
----------
TOTAL TEMPORARY INVESTMENTS
(Cost $255) 255
----------
TOTAL INVESTMENTS -- 101.9%
(Cost $4,046,484) 4,046,484
----------
OTHER ASSETS AND LIABILITIES -- (1.9%)
Other assets 29,670
Liabilities (106,375)
----------
(76,705)
----------
TOTAL NET ASSETS -- 100.0% $3,969,779
==========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
70
<PAGE>
SCHWAB NEW YORK MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1998
Par Value
------- ---------
VARIABLE RATE OBLIGATIONS -- 55.0% (a)(f)
NEW YORK -- 55.0%
Albany, New York IDRB (Newkirk
Products Project) Series 1995A
4.00%, 01/07/99 $ 1,000 $ 1,000
Babylon, New York IDA Resource
Recovery (Ogden Martin Project)
Series 1998
3.80%, 01/07/99 4,000 4,000
Dutchess County, New York IDA (Trinity
Pawling School Corp. Project)
3.90%, 01/07/99 5,800 5,800
Erie County, New York IDA (Episcopal Life
Care Facilities Project)
3.90%, 01/07/99 5,000 5,000
Erie County, New York Water Authority
Series B
3.80%, 01/07/99 3,500 3,500
Long Island, New York Power Authority
3.80%, 01/07/99 4,000 4,000
Long Island, New York Power Authority
Electrical System Subordinated RB
5.10%, 01/01/99 7,700 7,700
Monroe County, New York IDRB (ENBI
Corp. Lease Rent Project) Series 1988
4.00%, 01/07/99 2,000 2,000
New York City, New York GO Bond
Series B Subseries B-7
5.10%, 01/01/99 2,000 2,000
New York City, New York Health & Hospitals
Health System RB Series 1997A
3.90%, 01/01/99 9,600 9,600
New York City, New York Health & Hospitals
Health System RB Series 1997C
3.95%, 01/07/99 8,000 8,000
New York City, New York Housing Development
Corp. M/F Housing Mortgage RB (Columbus
Gardens Project) Series 1993A
4.00%, 01/07/99 3,165 3,165
New York City, New York Housing Development
Corp. M/F Housing RB (Related Broadway
Development) Series A
4.20%, 01/01/99 10,000 10,000
New York City, New York Housing Development
Corp. M/F Housing RB (100 Jane Street
Development Project) Series A
4.25%, 01/07/99 6,525 6,525
Par Value
------- ---------
New York City, New York Housing Development
Corp. M/F Housing RB (One Columbus
Project) Series A
4.20%, 01/01/99 $ 20,000 $ 20,000
New York City, New York IDA IDRB (Allway
Tools Inc. Project)
4.05%, 01/07/99 1,910 1,910
New York City, New York IDA Special
Facility RB (Korean Airlines Co. Project)
Series 1997C
4.50%, 01/07/99 7,200 7,200
New York City, New York IDR Special
Facility RB (Korean Airlines Co. Project)
Series 1997A (d)
3.95%, 01/07/99 23,400 23,400
New York City, New York M/F Rental Housing
RB (Tribeca Tower Project) Series 1997A (d)
3.70%, 01/07/99 29,100 29,100
New York City, New York Municipal
Assistance Corp.
3.80%, 01/01/99 14,500 14,500
New York City, New York Municipal Finance
Authority Water & Sewer System
RB Series C
5.10%, 01/01/99 3,100 3,100
New York City, New York Municipal Finance
Authority Water & Sewer System RB
Series 1992C
5.10%, 01/01/99 2,900 2,900
New York City, New York Municipal Finance
Authority Water & Sewer System RB
Series 1994G
5.10%, 01/01/99 6,300 6,300
New York State Dormitory Authority RB
(New York Founding Charitable Project)
3.80%, 01/07/99 900 900
New York State Dormitory Authority RB
(New York Public Library Project)
Series 1992B
3.80%, 01/07/99 1,500 1,500
New York State Economic Development
Authority
3.85%, 01/07/99 4,200 4,200
New York State Energy Research &
Development Authority Electric Facilities
RB (Long Island Lighting Co. Project)
Series 1993B
4.10%, 01/07/99 6,000 6,000
71
<PAGE>
SCHWAB NEW YORK MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
New York State Energy Research &
Development Authority Electric Facilities
RB (Long Island Lighting Co. Project)
Series 1994A
4.10%, 01/07/99 $ 5,000 $ 5,000
New York State Energy Research & Development
Authority Pollution Control RB (Central
Hudson Gas & Electric) Series 1985A
4.00%, 01/07/99 10,000 10,000
New York State Energy Research & Development
Authority Pollution Control RB (Niagara
Mohawk Power Project) Series A
5.20%, 01/01/99 2,000 2,000
New York State Energy Research & Development
Authority Pollution Control RB (Niagara
Mohawk Power Project) Series 1988A
5.25%, 01/01/99 400 400
New York State Energy Research & Development
Authority Pollution Control Revenue
Refunding Bonds (Orange & Rockland
Utilities, Inc. Project) Series 1994A
3.80%, 01/07/99 7,000 7,000
New York State HFA Housing RB (East 84th
Street Project) Series 1995A
3.85%, 01/07/99 1,000 1,000
New York State HFA Housing RB (Chelsea
Arms Housing Project) Series A
3.75%, 01/07/99 14,000 14,000
New York State HFA Housing RB (Mount Sinai
School Of Medicine Project) Series 1984A
3.70%, 01/07/99 8,400 8,400
New York State HFA Housing RB (Normandie
Court II Project) Series 1987A
4.10%, 01/07/99 14,100 14,100
New York State HFA Housing RB (Tribeca
Landing Project) Series A
4.00%, 01/07/99 14,000 14,000
New York State HFA Housing RB (Union
Square South Housing Project)
3.75%, 01/07/99 18,000 18,000
New York State HFA Housing RB (West 50th
Street Project) Series 1997A
3.75%, 01/07/99 20,300 20,300
New York State HFA Housing RB (345 East
94th Street Housing Project)
3.85%, 01/06/99 6,600 6,600
Par Value
------- ---------
New York State HFA M/F Housing RB
(Tribeca Park Housing Project)
Series 1997A
3.90%, 01/07/99 $ 17,800 $ 17,800
New York State Local Government
Assistance Corp. RB Series 1993A
3.90%, 01/07/99 6,590 6,590
New York State Local Government
Assistance Corp. RB Series 1995B
3.85%, 01/07/99 8,400 8,400
New York State Local Government
Assistance Corp. RB Series 1995F
3.70%, 01/07/99 10,400 10,400
New York State Medical Care Facilities
Financing Agency RB Pooled Equipment
Loan Program Series 1
3.90%, 01/07/99 2,200 2,200
Niagara County, New York IDRB
(Allegheny Ludlum Steel Co. Project)
Series 1984
4.00%, 01/07/99 10,000 10,000
Niagara Falls, New York Bridge Commission
RB Series 1993A
3.80%, 01/07/99 1,400 1,400
Schenectady, New York IDRB (Fortitech
Holding Corp. Project) Series A
3.85%, 01/07/99 1,300 1,300
St. Lawrence County, New York IDRB
Environmental Improvement (Reynolds
Metals Project)
3.85%, 01/07/99 4,000 4,000
Suffolk County, New York IDA (Episcopal
Health Services Project) Series 1998A
4.00%, 01/07/99 5,000 5,000
Town of Islip, New York IDRB (Magnum
Realty Creative Bath Products Project)
3.85%, 01/07/99 2,650 2,650
Yonkers, New York IDRB Civic Facilities
(Consumers Union Facility Project)
Series 1989
4.00%, 01/07/99 1,500 1,500
Yonkers, New York IDRB Civic Facilities
(Consumers Union Facility Project)
Series 1991
4.00%, 01/07/99 700 700
72
<PAGE>
Par Value
------- ---------
Yonkers, New York IDRB Civic Facilities
(Consumers Union Facility Project)
Series 1994
4.00%, 01/07/99 $ 1,900 $ 1,900
--------
387,940
--------
PUERTO RICO -- 0.0%
Puerto Rico Commonwealth Highway &
Transportation Authority Series 1998A
3.50%, 01/07/99 400 400
--------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $388,340) 388,340
--------
VARIABLE RATE TENDER OPTION BONDS -- 16.2% (a)(c)(f)
NEW YORK -- 15.9%
Long Island, New York Power Authority
Electric System RB TOB (Pa-269)
4.15%, 01/07/99 4,000 4,000
New York City, New York GO TOBP
(CoreStates Merlot Program Project)
Series 1997C
4.15%, 01/07/99 15,000 15,000
New York City, New York Municipal
Acceptance Corp. TOB
4.10%, 01/07/99 13,445 13,445
New York City, New York Municipal
Financing Authority Water & Sewer
System RB TOB
4.10%, 01/07/99 4,995 4,995
New York City, New York TOBP (BTP-234)
4.10%, 01/07/99 10,090 10,090
New York Local Government Assistance
Corp. TOBP (PT-1055) Series 1997B
4.10%, 01/07/99 8,000 8,000
New York Metropolitan Transportation
Authority TOBP (Pa-426)
4.10%, 01/07/99 5,695 5,695
New York Metropolitan Transportation
Authority TOBP (PT-177)
4.10%, 01/07/99 9,265 9,265
New York State Dormitory Authority TOB
4.10%, 01/07/99 2,820 2,820
New York State Dormitory Authority TOBP
(Pa-425)
4.10%, 01/01/99 9,130 9,130
Par Value
------- ---------
New York State Environmental Pollution
Control RB TOB (96-C3202) Series 1994D
4.12%, 01/07/99 $ 16,300 $ 16,300
New York State Medical Care Facility
TOB (PT-154)
4.10%, 01/07/99 3,175 3,175
New York State Metropolitan Transportation
Authority TOBP (PT-356)
4.10%, 01/07/99 5,000 5,000
New York Triborough Bridge & Tunnel
Authority TOBP (BTP-162)
4.10%, 01/07/99 5,049 5,049
--------
111,964
--------
PUERTO RICO -- 0.3%
Puerto Rico Commonwealth Public
Improvement
3.80%, 01/07/99 500 500
Puerto Rico Commonwealth TOB
3.80%, 01/07/99 1,100 1,100
Puerto Rico Infrastructure Financing
Authority TOB
3.80%, 01/07/99 600 600
--------
2,200
--------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $114,164) 114,164
--------
TAX EXEMPT COMMERCIAL PAPER -- 12.4% (b)(f)
Long Island, New York Power Authority
Electrical System RB TECP Series 3
3.00%, 04/07/99 21,000 21,000
Long Island, New York Power Authority
Electrical Systems TECP
3.10%, 01/07/99 3,500 3,500
New York City, New York GO TECP
Series 1994 H Subseries R H-3
3.10%, 02/10/99 11,500 11,500
New York State Dormitory Authority RB
TECP (Memorial Service Loan Kettering
Project) Series 1989C
3.15%, 03/12/99 3,500 3,500
New York State Environmental Quality
86 GO TECP Series 1997A
3.10%, 03/18/99 7,400 7,400
New York State Environmental TECP
2.95%, 03/10/99 15,600 15,600
73
<PAGE>
SCHWAB NEW YORK MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
New York State Power Authority TECP
Series 2
3.10%, 02/22/99 $ 13,600 $ 13,600
3.05%, 03/01/99 10,900 10,900
--------
TOTAL TAX EXEMPT COMMERCIAL PAPER
(Cost $87,000) 87,000
--------
BOND ANTICIPATION NOTES -- 6.0% (b)
Broome County, New York BAN
3.60%, 04/14/99 15,988 16,006
Levittown, New York United States Free
School District BAN
3.30%, 08/02/99 1,775 1,779
Livingston County, New York BAN
3.60%, 08/26/99 3,670 3,679
Oswego County, New York BAN
3.82%, 05/06/99 5,000 5,003
Oyster Bay, New York BAN
3.23%, 08/27/99 10,300 10,349
3.25%, 10/01/99 5,640 5,660
--------
TOTAL BOND ANTICIPATION NOTES
(Cost $42,476) 42,476
--------
GENERAL OBLIGATIONS -- 3.4% (b)
Albany, New York IDRB GO (NewKirk
Products, Inc.) Series 1995A (f)
1.88%, 10/01/99 1,000 1,029
Nassau County, New York GO (f)
3.10%, 10/01/99 1,000 1,007
Nassau County, New York GO Series Z (f)
3.65%, 09/01/99 14,562 14,595
New York City, New York GO Series E
3.08%, 08/01/99 3,735 3,754
Newburgh, New York GO Series 1998A (f)
3.55%, 06/15/99 1,073 1,076
Rush-Hennrietta, New York Central
School District GO (f)
3.67%, 06/15/99 650 652
Suffolk County, New York GO Series B (f)
3.60%, 08/15/99 1,595 1,604
--------
TOTAL GENERAL OBLIGATIONS
(Cost $23,717) 23,717
--------
TAX ANTICIPATION NOTES -- 3.3% (b)
Bay Shore, New York Union Free
School District TAN
3.37%, 06/29/99 4,400 4,408
Par Value
------- ---------
Hampton Bays, New York School
District TAN
4.00%, 06/24/99 $ 2,700 $ 2,704
North Babylon, New York Union Free
School District TAN
3.57%, 06/29/99 5,500 5,511
West Islip, New York Union Free School
District TAN
3.62%, 06/30/99 11,000 11,020
--------
TOTAL TAX ANTICIPATION NOTES
(Cost $23,643) 23,643
--------
REVENUE BONDS -- 3.2% (b)
Allegany County, New York IDRB Civic
Facilities (Alfred University Civic
Facility Project) (f)
3.65%, 08/01/99 815 818
Battery Park, New York City Authority RB
2.95%, 05/01/99 1,885 1,951
Nassau County, New York IDRB Civic
Factory (Hofstra University Project) (f)
3.65%, 07/01/99 1,420 1,424
New York City, New York Municipal
Assistance Corp. RB Series 68
3.30%, 07/01/99 1,000 1,018
New York City, New York Municipal
Assistance Corp. RB Series J
3.70%, 07/01/99 7,000 7,061
New York State Dormitory Authority
State University RB
3.07%, 05/15/99 3,805 3,936
New York State Power Authority RB &
General Purpose Series BB (f)
3.48%, 01/01/99 300 300
New York State Thruway Highway
Authority RB (Construction &
Reconstruction) Series A (f)
3.71%, 03/01/99 500 502
New York State Urban Development RB
(Correctional Capital Facilities) Series 1
3.10%, 01/01/00 1,250 1,331
Suffolk County, New York Water Authority
RB (f)
3.00%, 06/01/99 3,080 3,192
3.05%, 06/01/99 1,240 1,285
--------
TOTAL REVENUE BONDS
(Cost $22,818) 22,818
--------
74
<PAGE>
Par Value
------- ---------
TAX & REVENUE ANTICIPATION NOTES -- 1.4% (b)
Puerto Rico Commonwealth TRAN
Series A
2.85%, 07/30/99 $ 10,000 $ 10,037
--------
TOTAL TAX & REVENUE
ANTICIPATION NOTES
(Cost $10,037) 10,037
--------
REVENUE ANTICIPATION NOTES -- 0.7% (b)(f)
Buffalo, New York RAN
3.00%, 07/27/99 5,000 5,021
--------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $5,021) 5,021
--------
Shares
-------
TEMPORARY INVESTMENTS -- 0.0% (a)
Provident Institutional Funds - Muni Fund
Portfolio
3.27%, 01/07/99 236 236
--------
TOTAL TEMPORARY INVESTMENTS
(Cost $236) 236
--------
TOTAL INVESTMENTS -- 101.6%
(Cost $717,452) 717,452
--------
OTHER ASSETS AND LIABILITIES -- (1.6%)
Other assets 6,255
Liabilities (17,770)
--------
(11,515)
--------
TOTAL NET ASSETS -- 100.0% $705,937
========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
75
<PAGE>
SCHWAB NEW JERSEY MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1998
Par Value
------- ---------
VARIABLE RATE OBLIGATIONS -- 44.0% (a)(f)
NEW JERSEY -- 43.2%
Essex County, New Jersey Public
Improvement Authority RB (County
Asset Sale Project) Series 1995
4.00%, 01/07/99 $ 3,300 $ 3,300
Monmouth County, New Jersey
Improvement Authority Pooled
Government Loan Progam
3.75%, 01/07/99 2,000 2,000
New Jersey Economic Development
Authority (St. James Prep & Social
Service Project) Series 1998
3.90%, 01/07/99 590 590
New Jersey Economic Development
Authority (Wechsler Coffee Corp.
Project) Series 1998
4.00%, 01/07/99 1,580 1,580
New Jersey Economic Development
Authority RB (Hoffman Laroche Inc.
Project) Series 1993
5.15%, 01/07/99 3,500 3,500
New Jersey Economic Development
Authority RB (Job Haines Home Project)
3.75%, 01/07/99 3,800 3,800
New Jersey Economic Development
Authority RB (Toys R Us Inc. Project)
Series 1984
3.45%, 01/07/99 3,000 3,000
New Jersey Economic Development
Authority Thermal Energy Facilities
RB (Thermal Energy Ltd. Partnership I
Project) Series 1997
3.90%, 01/07/99 3,350 3,350
New Jersey Health Care Facilities
Authority (Carrier Foundation)
Series C
4.00%, 01/06/99 2,790 2,790
New Jersey Health Care Facility Financing
Authority Revenue Refunding Bonds
(Christian Health Project) Series 1998B
3.90%, 01/07/99 4,700 4,700
Par Value
------- ---------
New Jersey State (Hamilton Industrial
Development Project) Series 1998
4.00%, 01/07/99 $ 3,900 $ 3,900
New Jersey State Economic Development
Authority Revenue Refunding Bonds
(Stolthaven Project) Series 1998A
5.05%, 01/01/99 1,500 1,500
New Jersey State Turnpike Authority
RB Series 1991D
3.75%, 01/07/99 4,250 4,250
Salem County, New Jersey Pollution
Control Financing Authority RB
(Public Service Electric & Gas Project)
Series 1997
3.85%, 01/07/99 4,100 4,100
--------
42,360
--------
PUERTO RICO -- 0.8%
Puerto Rico Commonwealth Highway &
Transportation Authority Series 1998A
3.50%, 01/07/99 800 800
--------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $43,160) 43,160
--------
VARIABLE RATE TENDER OPTION BONDS -- 16.7% (a)(c)(f)
NEW JERSEY -- 12.2%
New Jersey State Building Authority
Series 1997 TOB
4.08%, 01/07/99 3,850 3,850
New Jersey State Transportation
Authority TOB
4.10%, 01/07/99 1,095 1,095
New Jersey State Transportation
Authority TOB (PT-200)
4.10%, 01/07/99 4,300 4,300
New Jersey State Turnpike Authority
TOB (PA-440)
4.08%, 01/07/99 2,695 2,695
--------
11,940
--------
76
<PAGE>
Par Value
------- ---------
PUERTO RICO -- 4.5%
Puerto Rico Commonwealth TOB
3.80%, 01/07/99 $ 3,400 $ 3,400
Puerto Rico Commonwealth Public
Improvement TOB
3.80%, 01/07/99 1,000 1,000
--------
4,400
--------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $16,340) 16,340
--------
BOND ANTICIPATION NOTES -- 16.1% (b)
East Hanover Township, New Jersey BAN
3.60%, 08/11/99 1,492 1,493
Florence Township, New Jersey BAN
Series B
3.32%, 02/12/99 1,618 1,619
Jersey City, New Jersey BAN
3.56%, 01/15/99 3,000 3,001
Peapack-Gladstone, New Jersey BAN
2.98%, 05/13/99 2,300 2,309
Princeton, New Jersey BAN
2.90%, 09/02/99 1,500 1,510
Seaside Heights, New Jersey BAN
Series A
3.45%, 02/19/99 1,300 1,301
Vernon Township, New Jersey Board of
Education BAN
3.05%, 05/04/99 2,500 2,504
West Windsor-Plainsboro, New Jersey
Regional School District BAN
3.73%, 01/27/99 2,000 2,000
--------
TOTAL BOND ANTICIPATION NOTES
(Cost $15,737) 15,737
--------
REVENUE BONDS -- 9.9% (b)(f)
Essex County, New Jersey Improvement
Lease RB
3.50%, 10/01/99 1,300 1,308
New Jersey Health Care Facilities
Financing Authority RB (Community
Medical Center/Kimball Project)
3.63%, 07/01/99 2,000 2,009
Par Value
------- ---------
New Jersey State Education Facilities
Authority (Trenton State College Project)
Series C
3.00%, 07/01/99 $ 1,350 $ 1,404
New Jersey State HFA M/F Housing RB
Series 1996A
3.65%, 05/01/99 1,275 1,279
New Jersey Wastewater Treatment Trust
Series 1996C
2.95%, 05/15/99 1,615 1,634
Rutgers State University, New Jersey
Pre-Refunded RB
3.70%, 05/01/99 685 705
Rutgers State University, New Jersey RB
3.00%, 05/01/99 1,280 1,321
--------
TOTAL REVENUE BONDS
(Cost $9,660) 9,660
--------
TAX EXEMPT COMMERCIAL PAPER -- 7.2% (b)
New Jersey Education Facilities Authority
(Princeton University) TECP
3.00%, 01/07/99 3,500 3,500
Port Authority of New York & New Jersey
TECP (f)
3.00%, 01/14/99 1,225 1,225
2.90%, 02/18/99 450 450
2.90%, 02/26/99 1,900 1,900
--------
TOTAL TAX EXEMPT COMMERCIAL PAPER
(Cost $7,075) 7,075
--------
MANDATORY PUT BONDS -- 3.1% (b)
New Jersey Economic Development
Authority RB (Newark Recycling
Center Project)
3.00%, 06/15/99 3,000 3,000
--------
TOTAL MANDATORY PUT BONDS
(Cost $3,000) 3,000
--------
GENERAL OBLIGATION BONDS -- 2.2% (b)
Lower Township, New Jersey GO
3.65%, 02/01/99 340 340
Maple Shade Township, New Jersey
GO Series 1998 (f)
3.10%, 12/01/99 200 202
Trenton, New Jersey GO Series 2 (f)
3.65%, 04/15/99 575 575
77
<PAGE>
SCHWAB NEW JERSEY MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Union County, New Jersey GO
2.92%, 12/15/99 $ 1,025 $ 1,039
--------
TOTAL GENERAL OBLIGATION BONDS
(Cost $2,156) 2,156
--------
TOTAL INVESTMENTS -- 99.2%
(Cost $97,128) 97,128
--------
OTHER ASSETS AND LIABILITIES -- 0.8%
Other assets 1,139
Liabilities (352)
--------
787
--------
TOTAL NET ASSETS -- 100.0% $ 97,915
========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
78
<PAGE>
SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1998
Par Value
------- ---------
VARIABLE RATE OBLIGATIONS -- 60.4% (a)(f)
Allegheny County, Pennsylvania Airport
Revenue Refunding Bonds (Pittsburgh
International Airport Project)
Series 1997A
4.11%, 01/01/99 $ 2,050 $ 2,050
Allegheny County, Pennsylvania IDA RB
(Saureisen Project)
4.40%, 01/07/99 1,600 1,600
Berks County, Pennsylvania IDA RB
(Beacon Container Project)
4.15%, 01/06/99 1,800 1,800
Bucks County, Pennsylvania IDA
(Klearfold Project)
4.40%, 01/07/99 3,400 3,400
Bucks County, Pennsylvania IDA RB
(Schuman and Sons Project)
4.10%, 01/07/99 2,000 2,000
Bucks County, Pennsylvania, St. Mary
Hospital Authority RB, (Catholic
Healthcare Project) Series 1997B
3.80%, 01/07/99 3,150 3,150
Cambria County, Pennsylvania IDA
Resource Recovery RB (Cambria Cogen
Co. Project)
4.05%, 01/07/99 3,000 3,000
Chester County, Pennsylvania IDA RB
(Manufacturing Facilities Devault Project)
4.25%, 01/06/99 2,220 2,220
Dauphin County, Pennsylvania General
Authority RB (Education & Health Loan
Program Project) Series 1997
4.08%, 01/07/99 2,000 2,000
Dauphin County, Pennsylvania RB (All
Health Pooled Financing Project)
4.00%, 01/07/99 1,230 1,230
Delaware Valley, Pennsylvania Regional
Finance Authority Local Government RB
Series 1986
3.90%, 01/07/99 1,700 1,700
Easton, Pennsylvania City School District GO
4.08%, 01/07/99 2,800 2,800
Emmaus, Pennsylvania General Authority
RB Pooled Loan Series 1996
4.10%, 01/07/99 3,140 3,140
Par Value
------- ---------
Gettysburg, Pennsylvania Municipal
Authority Guaranteed Hospital RB
(Gettysburg Hospital Project) Series 1994
3.70%, 01/01/99 $ 250 $ 250
Montgomery County, Pennsylvania IDA
(Seton Medical Co.)
3.85%, 01/07/99 4,600 4,600
Montgomery County, Pennsylvania M/F
Housing RB (Glenmore Assoc.) Series A
3.90%, 01/07/99 3,405 3,405
North Hampton County, Pennsylvania IDA
RB (Binney & Smith) Series A
4.20%, 01/07/99 2,580 2,580
Pennsylvania Economic Development
Financing Authority RB (National
Gypsum Co., Shippingport Project)
Series 1997A
4.10%, 01/07/99 2,400 2,400
Pennsylvania Energy Development
Authority RB (B&W Ebensburg Project)
Series 1986
3.95%, 01/07/99 5,200 5,200
Pennsylvania Energy Development
Authority RB (Piney Creek Project)
Series 1986C
3.95%, 01/07/99 1,155 1,155
Pennsylvania Higher Education Assistance
Agency Student Loan RB Series 1988B
4.05%, 01/07/99 4,570 4,570
Pennsylvania Higher Education Assistance
Agency Student Loan RB Series 1988C
4.05%, 01/07/99 2,970 2,970
Pennsylvania Higher Education Assistance
Agency Student Loan RB Series 1997A
4.35%, 01/07/99 3,275 3,275
Philadelphia, Pennsylvania IDA (City Line
Holiday Inn Project) Series 1996
4.00%, 01/07/99 2,200 2,200
Philadelphia, Pennsylvania Water & Waste
RB Series 1997B
3.85%, 01/06/99 2,100 2,100
Quakertown, Pennsylvania General
Authority Pooled Financing Program
RB Series 1998A
4.05%, 01/07/99 2,000 2,000
79
<PAGE>
SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Quakertown, Pennsylvania General
Authority Pooled Financing Program
Series A
4.05%, 01/05/99 $ 2,122 $ 2,122
West Cornwall Township, Pennsylvania
Municipal Authority RB (Lebanon
Valley Crethren Project)
4.10%, 01/07/99 1,200 1,200
York County, Pennsylvania General
Authority Pooled Financing RB
Series 1996
4.10%, 01/07/99 3,400 3,400
--------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $73,517) 73,517
--------
TAX EXEMPT COMMERCIAL PAPER -- 11.4% (b)
PENNSYLVANIA -- 7.5% (f)
Commonwealth of Pennsylvania TECP
Series 1997A
3.25%, 01/14/99 1,500 1,500
Montgomery County, Pennsylvania IDA
Pollution Control RB TECP
3.40%, 01/13/99 4,100 4,100
3.30%, 02/10/99 3,500 3,500
--------
9,100
--------
PUERTO RICO -- 3.9%
Puerto Rico Government Development
Bank RB
2.95%, 02/17/99 2,776 2,776
2.95%, 03/08/99 2,000 2,000
--------
4,776
--------
TOTAL TAX EXEMPT COMMERCIAL PAPER
(Cost $13,876) 13,876
--------
REVENUE BONDS -- 8.6% (b)
Northampton County, Pennsylvania
Higher Education Authority RB
(Lehigh University Project) (f)
3.05%, 11/15/99 1,000 1,032
Pennsylvania HFA S/F Mortgage Revenue
Refunding Bonds Series 61A
3.60%, 10/01/99 425 426
Par Value
------- ---------
Pennsylvania State IDA RB (Economic
Development Project) (f)
3.75%, 01/01/99 $ 500 $ 500
Pennsylvania State Higher Education
Facility RB (Medical College Project) (f)
3.68%, 03/01/99 1,000 1,027
Pennsylvannia State Turnpike
Commission RB Series 1986E (f)
3.00%, 12/01/99 4,500 4,771
Philadelphia, Pennsylvania
Intergovernmental CO-OP Authority
Special Tax RB (f)
3.60%, 06/15/99 1,000 1,009
Pittsburgh, Pennsylvania Water Sewer
Authority Systems Refunding RB
Series 1991A (f)
3.00%, 09/01/99 1,655 1,691
--------
TOTAL REVENUE BONDS
(Cost $10,456) 10,456
--------
VARIABLE RATE TENDER OPTION BONDS -- 6.9% (a)(c)(f)
Allegheny County, Pennsylvania Airport
RB TOBP (PA-329)
4.11%, 01/07/99 3,550 3,550
Altoona, Pennsylvania Water Authority
RB TOBP (PA-321)
4.08%, 01/07/99 1,700 1,700
Chester County, Pennsylvania Health &
Education RB TOBP (PA-327)
4.08%, 01/07/99 1,700 1,700
Philadelphia, Pennsylvania Water &
Waste RB TOBP (PT-151) Series 1993
4.08%, 01/07/99 1,480 1,480
--------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $8,430) 8,430
--------
OPTIONAL PUT BONDS -- 3.8% (b)(f)
Beaver County, Pennsylvania IDA Pollution
Control Revenue Refunding TECP
(Ohio Edison Co. Project)
Series 1992A
3.25%, 04/01/99 4,625 4,635
--------
TOTAL OPTIONAL PUT BONDS
(Cost $4,635) 4,635
--------
80
<PAGE>
Par Value
------- ---------
CERTIFICATES OF PARTICIPATION -- 3.2% (b)(f)
Pennsylvania State COP Series A
3.73%, 07/01/99 $ 3,900 $ 3,923
--------
TOTAL CERTIFICATES OF PARTICIPATION
(Cost $3,923) 3,923
--------
FIXED RATE TENDER OPTION BONDS -- 2.2% (b)(e)
Philadelphia, Pennsylvania IDRB TOBP
(PA-982) (Philadelphia Airport)
Series 1998A
3.75%, 08/04/99 2,710 2,710
--------
TOTAL FIXED RATE TENDER
OPTION BONDS
(Cost $2,710) 2,710
--------
TAX & REVENUE ANTICIPATION NOTES -- 2.1% (b)
Philadelphia, Pennsylvania TRAN
Series A
3.64%, 06/30/99 2,500 2,507
--------
TOTAL TAX & REVENUE
ANTICIPATION NOTES
(Cost $2,507) 2,507
--------
GENERAL OBLIGATION BONDS -- 1.1% (b)
Central Dauphin, Pennsylvania School
District GO
2.77%, 06/01/99 1,000 1,008
Donegal, Pennsylvania School
District GO (f)
3.79%, 04/01/99 250 250
--------
TOTAL GENERAL OBLIGATION BONDS
(Cost $1,258) 1,258
--------
TOTAL INVESTMENTS -- 99.7%
(Cost $121,312) 121,312
--------
OTHER ASSETS AND LIABILITIES -- 0.3%
Other assets 857
Liabilities (453)
--------
404
--------
TOTAL NET ASSETS -- 100.0% $121,716
========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
81
<PAGE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1998
Par Value
------- ---------
VARIABLE RATE OBLIGATIONS -- 52.9% (a)(f)
FLORIDA -- 52.8%
Alachua County, Florida Health Facilities
Authority RB (Shands Teaching
Hospital Clinic Project) Series 1996
4.00%, 01/06/99 $ 5,900 $ 5,900
Arcadia, Florida Hospital RB (Desoto
Memorial Hospital Project)
4.05%, 01/07/99 3,775 3,775
Bradford County, Florida Health Facilities
Authority RB (Shands Teaching
Hospital Clinic Project) Series 1996
4.00%, 01/07/99 6,500 6,500
Broward County, Florida HFA M/F
Housing RB (Harbor Town of Jacaranda
Project) Series 1995B
3.75%, 01/06/99 8,400 8,400
Broward County, Florida Indian Trace
Community Development (Basin 1
Water Project)
3.40%, 01/07/99 4,350 4,350
Broward County, Florida Suburban Port
Facilities (Port Everglades Project)
Series 1998
3.90%, 01/07/99 41,700 41,700
Citrus Park, Florida Community
Development District Capital
Improvement Bonds Series 1996
3.75%, 01/07/99 3,000 3,000
Collier County, Florida HFA M/F
Housing RB (River Beach Project)
Series 1985
4.00%, 01/07/99 4,300 4,300
Dade County, Florida Aviation
Series 1984A
3.75%, 01/07/99 3,200 3,200
Dade County, Florida Health Facilities
Authority RB (Miami Children's
Hospital) Series 1995
3.40%, 01/06/99 450 450
Dade County, Florida IDA RB
(Dolphins Stadium Project)
Series 1985C
3.90%, 01/06/99 1,050 1,050
Dade County, Florida IDA RB (June
Leasing Corp. Project) Series 1995
3.70%, 01/07/99 1,150 1,150
Par Value
------- ---------
Dade County, Florida IDA RB
(Micheal-Ann Russell Jewish
Community Center Project)
Series 1997
4.00%, 01/06/99 $ 4,595 $ 4,595
Dade County, Florida Water & Sewer
System Series 1994
3.40%, 01/07/99 20,790 20,790
Duval County, Florida HFA M/F
Housing RB (Lakes Mayport
Apartment Project) Series 1985
3.75%, 01/07/99 3,000 3,000
Escambia County, Florida Health
Facilities Authority Hospital RB
(Charity Obligation Group Project)
3.40%, 01/01/99 2,200 2,200
Escambia County, Florida Sales
Tax RB Series A
3.60%, 01/01/99 1,960 1,960
Florida Capital Financing Authority RB
(Capital Loan Program Project)
Series 1997A
4.00%, 01/07/99 49,500 49,500
Florida Development Finance Corp.
IDRB (Pioneer Ram Project)
Series 1998A3
4.15%, 01/06/99 1,500 1,500
Florida HFA Housing RB (Ashley
Lake II Project) Series 1989J
4.05%, 01/07/99 10,700 10,700
Florida HFA Housing RB (Heron Park
Project) Series 1996U
4.05%, 01/06/99 3,300 3,300
Florida HFA Housing RB (Tiffany Club
Project) Series 1996P
4.10%, 01/06/99 2,875 2,875
Florida HFA M/F Housing RB
(Cornerstone Imaging Project)
Series 1985BB
3.50%, 01/07/99 8,830 8,830
Florida Housing Finance Corporation
M/F Housing RB (Buchanan Bay
Townhomes Project) Series 1998S
4.30%, 01/07/99 6,725 6,725
Florida Municipal Power Agency
Revenue Refunding Bonds (Stanton II
Project) Series 1997
3.75%, 01/06/99 12,700 12,700
82
<PAGE>
Par Value
------- ---------
Florida Ocean Highway & Port
Authority RB Series 1990
4.10%, 01/06/99 $ 8,700 $ 8,700
Florida State Finance Authority (Florida
Hospital Association - Capital Projects
Loan Program) Series 1998A
3.75%, 01/07/99 34,300 34,300
Gainesville, Florida IDA (Exactech Inc.
Project)
4.10%, 01/06/99 2,900 2,900
Gulf Breeze, Florida RB (Local
Government Loan Program)
Series 1985B
4.00%, 01/07/99 14,990 14,990
Gulf Breeze, Florida RB (Local
Government Loan Program)
Series 1985C
4.00%, 01/07/99 9,425 9,425
Halifax, Florida Health Care Facilities
Hospital Medical Center RB (Health
Care Plan Inc. Project)
4.15%, 01/07/99 3,000 3,000
Highlands County, Florida Health
Facility Authority RB (Adventist
Health Systems Project) Series 1996B
3.95%, 01/07/99 17,600 17,600
Highlands County, Florida Health
Facility Authority RB (Adventist
Health Systems Project) Series 1997A
3.95%, 01/07/99 29,455 29,455
Hillsborough County, Florida Housing
M/F (Brandon Crossing Project)
3.85%, 01/07/99 2,700 2,700
Hillsborough County, Florida IDA
Pollution Control RB (Tampa
Electric-Gannon Project)
4.00%, 01/01/99 3,500 3,500
Jacksonville, Florida Health Facility
Authority RB (River Garden Project)
Series 1994
3.60%, 01/07/99 2,705 2,705
Jacksonville, Florida Industrial
Development Revenue Refunding
Bonds (Pavilion Associates Project)
3.75%, 01/06/99 5,250 5,250
Par Value
------- ---------
Jacksonville, Florida Industrial
Development Revenue Refunding
Bonds (St. John's Medical Investors
Ltd. Project)
3.75%, 01/06/99 $ 2,030 $ 2,030
Jacksonville, Florida RB (Capital
Project)
3.85%, 01/07/99 5,000 5,000
Lake Shore, Florida Hospital Authority
Health Facilities RB (Lakeshore
Hospital Project) Series 1991
3.75%, 01/06/99 3,700 3,700
Lee County, Florida IDA Educational
Facilities RB (Canterbury School
Project) Series 1998
4.00%, 01/07/99 2,250 2,250
Manatee County, Florida HFA M/F
Housing RB (Hampton McGuire
Project) Series 1989A
3.60%, 01/07/99 6,065 6,065
Manatee County, Florida IDRB
(Trilectron Industries Project)
Series 1997A
3.75%, 01/07/99 2,000 2,000
Marion County, Florida HFA M/F
Housing RB (Paddock Place Project)
Series 1985F
3.75%, 01/07/99 2,100 2,100
Miami & Dade County, Florida IDA
IDRB (Fine Arts Lamps Project)
Series 1998
4.10%, 01/06/99 2,000 2,000
Miami & Dade County, Florida IDRB
(Airbus Service Co. Project)
Series 1998A
3.70%, 01/06/99 4,700 4,700
Miami, Florida Health Facilities
Authority RB (Jewish Home for the
Aged, Inc. Project) Series 1996
4.00%, 01/07/99 2,950 2,950
Orange County, Florida Health Facilities
Authority RB (Mayflower Retirement
Community Project)
4.00%, 01/07/99 12,151 12,151
83
<PAGE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Orange County, Florida HFA (Highland
Pointe Apartments Project)
Series 1988J
3.80%, 01/07/99 $ 7,855 $ 7,855
Orange County, Florida HFA M/F
Housing RB (Andover Place
Apartments)
4.00%, 01/07/99 3,400 3,400
Orange County, Florida M/F Housing RB
(Smokewood Project) Series A
3.50%, 01/07/99 6,000 6,000
Orlando, Florida Special Assessment RB
(Republic Drive Interchange Project)
3.80%, 01/07/99 18,750 18,750
Palm Beach County, Florida Health
Facilities Authority Revenue Refunding
Bonds (Boca Raton Community
Hospital Project)
3.55%, 01/07/99 14,000 14,000
Palm Beach County, Florida Health
Facilities Authority Revenue Refunding
Bonds (Joseph L. Morse Geriatric Center)
3.95%, 01/07/99 11,955 11,955
Palm Beach County, Florida IDRB
(Benjamin Private School Project)
4.00%, 01/07/99 3,000 3,000
Palm Beach County, Florida RB (Norton
Gallery Art School Project) Series 1995
4.05%, 01/06/99 2,300 2,300
Pasco County, Florida COP
4.00%, 01/07/99 11,600 11,600
Plant City, Florida Hospital RB (Southern
Florida Baptist Hospital Project)
4.05%, 01/07/99 8,600 8,600
Polk County, Florida IDA RB
(Pavermodule Inc. Project)
3.90%, 01/07/99 3,510 3,510
Polk County, Florida IDA RB (Young
Florida Project) Series 1996
3.70%, 01/07/99 900 900
Riviera Beach, Florida IDRB (Sunshine
Farms Poultry Project)
4.10%, 01/06/99 2,600 2,600
SouthEast Volusia, Florida Hospital
District RB (Bert Fish Medical Center
Project) Series 1995
4.05%, 01/07/99 13,090 13,090
Par Value
------- ---------
St. Petersburg, Florida Capital
Improvement RB (Airport & Golf
Course Project) Series B
4.00%, 01/07/99 $ 3,000 $ 3,000
Sumter County, Florida IDA RB (Robbins
Manufacturing Project) Series 1997
3.75%, 01/07/99 1,885 1,885
Suwannee County, Florida Health
Facilities Authority RB (Shands Teaching
Hospital Clinic Project) Series 1996
4.00%, 01/07/99 4,500 4,500
Tampa, Florida Health Care Facilities RB
(Lifelink Foundation Inc., Project)
4.00%, 01/01/99 5,500 5,500
Tampa, Florida Occupational License
Tax RB Series 1996A
3.75%, 01/07/99 10,500 10,500
Tallahassee & Leon County, Florida
Civic Center Authority Capital
Improvement RB Series A
4.00%, 01/07/99 7,000 7,000
Volusia County, Florida Health Facilities
Authority RB (South West Volusia
Health Project) Series 1994A
3.55%, 01/07/99 4,550 4,550
--------
536,416
--------
PUERTO RICO -- 0.1%
Puerto Rico Commonwealth Highway &
Transportation Authority Series 1998A
3.50%, 01/07/99 1,800 1,800
--------
TOTAL VARIABLE RATE OBLIGATIONS
(COST $538,216) 538,216
--------
TAX EXEMPT COMMERCIAL PAPER -- 13.3% (b)
FLORIDA -- 8.4% (f)
Florida Local Government Financial
Community Pooled TECP
Series A
2.95%, 02/05/99 3,185 3,185
3.35%, 02/08/99 4,292 4,292
3.32%, 02/09/99 27,880 27,880
3.35%, 02/09/99 10,768 10,768
Orange County, Florida HFA Pooled
Hospital Loan TECP
3.05%, 02/10/99 7,200 7,200
3.00%, 03/10/99 7,100 7,100
84
<PAGE>
Par Value
------- ---------
Orange County, Florida TECP
2.95%, 04/08/99 $ 4,929 $ 4,929
Pinellas County, Florida Educational
Facilities TECP
3.04%, 02/09/99 15,000 15,000
Sunshine State, Florida Government
Financial Community TECP
3.00%, 02/08/99 4,500 4,500
---------
84,854
---------
PUERTO RICO -- 4.9%
Puerto Rico Government Development
Bank TECP
3.05%, 01/07/99 9,234 9,234
2.70%, 01/14/99 19,300 19,300
3.10%, 02/03/99 10,040 10,040
2.90%, 02/18/99 4,000 4,000
Puerto Rico Government Development
Bank RB TECP
2.95%, 02/17/99 7,500 7,500
---------
50,074
---------
TOTAL TAX EXEMPT COMMERCIAL PAPER
(Cost $134,928) 134,928
---------
VARIABLE RATE TENDER OPTION BONDS -- 8.4% (a)(c)(f)
Dade County, Florida School District
GO TOB Series 1997
4.10%, 01/07/99 20,920 20,920
Dade County, Florida TOB
4.20%, 01/07/99 6,345 6,345
Escambia County, Florida HFA S/F
Housing TOBP (PT-1017)
4.13%, 01/07/99 7,745 7,745
Florida Department of Environmental
Protection TOB
4.15%, 01/07/99 11,300 11,300
Florida State Educational Capital
Outlay TOBP
4.10%, 01/07/99 9,850 9,850
Florida State GO Short Mode TOB
4.15%, 01/07/99 19,185 19,185
Par Value
------- ---------
State of Florida Environmental TOB
4.15%, 01/07/99 $ 9,745 $ 9,745
--------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $85,090) 85,090
--------
TAX ANTICIPATION NOTES -- 5.7% (b)
Charlotte County, Florida School
District TAN
2.91%, 06/30/99 9,000 9,042
Palm Beach County, Florida School
District TAN
2.98%, 10/14/99 23,000 23,110
3.02%, 10/14/99 20,000 20,092
Seminole County, Florida School
District TAN
2.98%, 07/28/99 1,260 1,267
3.25%, 07/28/99 5,000 5,020
--------
TOTAL TAX ANTICIPATION NOTES
(Cost $58,531) 58,531
--------
TAX AND REVENUE ANTICIPATION NOTES -- 4.9% (b)
Puerto Rico Commonwealth
TRAN Series 1998A
2.84%, 07/30/99 4,500 4,517
2.85%, 07/30/99 23,500 23,586
2.93%, 07/30/99 10,000 10,032
3.49%, 07/30/99 11,700 11,700
--------
TOTAL TAX AND REVENUE
ANTICIPATION NOTES
(Cost $49,835) 49,835
--------
GENERAL OBLIGATION BONDS -- 3.2% (b)
Broward County, Florida School
District GO
3.68%, 02/15/99 11,300 11,576
Broward County, Florida School
District GO Series B
3.62%, 01/01/99 1,620 1,620
Cape Coral, Florida Special Obligation
Revenue Refunding Bonds Waste &
Water GO (Assignment Green Area
Project) (f)
2.73%, 07/01/99 1,000 1,009
85
<PAGE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1998
Par Value
------- ---------
Florida State Board of Education Capital
Outlay Public Education GO Series B
2.96%, 06/01/99 $ 2,300 $ 2,333
Florida State Board of Education GO
(Capital Asset Outlay Project) Series B
3.55%, 06/01/99 3,155 3,167
Florida State Board of Education GO
(Capital Outlay Public Education
Project) Series 1998B
2.96%, 06/01/99 4,515 4,570
Florida State Board of Education GO
(Capital Outlay Project) Series 1998A
3.58%, 01/01/99 7,175 7,175
Florida State Board of Education Public
Education GO Series A2 (f)
3.00%, 05/01/99 1,200 1,212
--------
TOTAL GENERAL OBLIGATION BONDS
(Cost $32,662) 32,662
--------
REVENUE ANTICIPATION NOTES -- 3.0% (b)
Brevard County, Florida School Board
RAN Series 1998
3.69%, 05/06/99 16,000 16,016
Broward County, Florida School District
RAN Series B
3.68%, 04/20/99 3,655 3,659
Broward County, Florida School District
RAN Series C
3.68%, 04/20/99 10,540 10,550
--------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $30,225) 30,225
--------
REVENUE BONDS -- 2.6% (b)(f)
FLORIDA -- 2.3%
Dade County, Florida Aviation Refunding
RB Series 1994A
3.05%, 10/01/99 1,000 1,020
Florida Gas Utility RB (Gas Project #1)
3.00%, 12/01/99 4,515 4,565
Florida State Board of Education Capital
Outlay Series 1989B
2.98%, 06/01/99 1,000 1,036
Par Value
------- ---------
Florida State Environmental Preservation
2000 RB
3.60%, 07/01/99 $ 1,010 $ 1,017
Florida State Turnpike Authority RB
4.10%, 07/01/99 1,000 1,036
Greater Orlando, Florida Aviation
Authority Airport Facilities RB
3.65%, 10/01/99 3,070 3,078
Orange County, Florida Capital
Improvement Revenue Refunding
Bond
3.15%, 10/01/99 2,665 2,681
Pasco County, Florida Solid Waste
Disposal Resource Recovery
System RB
3.93%, 04/01/99 4,200 4,211
Sarasota County, Florida School
Financing Corp. Lease RB
3.00%, 07/01/99 2,000 2,039
Tampa, Florida GDT Entitlement
Revenue Refunding Bond
2.07%, 10/01/99 2,205 2,260
--------
22,943
--------
PUERTO RICO -- 0.3%
Puerto Rico Electric Power Authority
Revenue Refunding Bonds Series 1989
2.92%, 07/01/99 3,170 3,282
--------
TOTAL REVENUE BONDS
(Cost $26,225) 26,225
--------
MANDATORY PUT BONDS -- 1.6% (b)
Florida Health Facility Authority Put
Bond Series MM (Buena Vista
Project) (f)
3.00%, 11/01/99 7,000 7,000
Miami & Dade County, Florida
Housing S/F Series B (f)
3.45%, 10/01/99 2,905 2,905
Orange County, Florida IDA RB
(General Accident Insurance
Co. of America Project)
2.94%, 06/01/99 3,500 3,500
86
<PAGE>
Par Value
------- ---------
Palm Beach County, Florida HFA (f)
3.75%, 07/01/99 $ 3,000 $ 3,000
----------
TOTAL MANDATORY PUT BONDS
(Cost $16,405) 16,405
----------
TOTAL INVESTMENTS -- 95.6%
(Cost $972,117) 972,117
----------
OTHER ASSETS AND LIABILITIES -- 4.4%
Other assets 46,386
Liabilities (2,011)
----------
44,375
----------
TOTAL NET ASSETS -- 100.0% $1,016,492
==========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
87
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
Year ended December 31, 1998
(All dollar amounts are in thousands unless otherwise noted)
For each security, cost (for financial reporting and federal income tax
purposes) and carrying value are the same.
(a) Variable rate obligations -- Interest rates vary periodically based on
current market rates. Rates shown are the effective rates as of the report
date. Dates shown for securities with scheduled maturities of 397 days or
less represent the earlier of the demand date or next interest rate change
date. Dates shown for securities with scheduled maturities greater than 397
days represent the later of the demand date or next interest rate change
date. For variable rate obligations without demand features, the next
interest reset date is shown. All dates shown are considered the maturity
date for financial reporting purposes.
(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 issued to institutional investors, such as
the Schwab Municipal Money Fund, Schwab California Municipal Money Fund,
Schwab New York Municipal Money Fund, Schwab New Jersey Municipal Money
Fund, Schwab Pennsylvania Municipal Money Fund, and Schwab Florida
Municipal Money Fund. Any resale by the Fund must be in an exempt
transaction, normally to a qualified institutional buyer. At December 31,
1998, the aggregate values of private placement securities held by the
Schwab Municipal Money Fund, Schwab California Municipal Money Fund, Schwab
New York Municipal Money Fund, Schwab New Jersey MunicipalMoney Fund,
Schwab Pennsylvania Municipal Money Fund, and Schwab Florida Municipal
Money Fund were $486,341, $273,875, $114,164, $16,340, $8,430 and $85,090,
respectively, which represented 7.08%, 6.90%, 16.17%, 16.69%, 6.93% and
8.37% respectively, of the net assets of each Fund. All of these private
placement investments were determined by the Investment Adviser 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.
(e) Security cannot be resold to the general public without prior registration
under the Securities Act of 1933. If the security is subsequently
registered and resold, the issuers would typically bear the expense of all
registrations at no cost to the fund. At December 31, 1998, the aggregate
value of the restricted securities held by Schwab Municipal Money Fund,
Schwab California Municipal Money Fund and Schwab Pennsylvania Municipal
Money Fund were $289,085, $42,058 and $2,710, respectively, which
represented 4.21%, 1.06% and 2.23%, respectively, of the net assets of each
Fund. All of these restricted investments were determined by the Investment
Adviser to be illiquid in accordance with procedures adopted by the Board
of Trustees.
(f) Security has one or more third party credit enhancements.
88
<PAGE>
PORTFOLIO ABBREVIATIONS
- -----------------------
ACES Adjustable Convertible Extendable Securities
BAN Bond Anticipation Note
CP Commercial Paper
COP Certificates of Participation
GAN Grant Anticipation Notes
GO General Obligation
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDRB Industrial Development Revenue Bond
M/F Multi-Family
N.R.U.-C.F.C. National Rural Utilities Cooperative Financing Corporation
RAN Revenue Anticipation Note
RB Revenue Bond
S/F Single Family
TAN Tax Anticipation Note
TECP Tax-Exempt Commercial Paper
TOB Tender Option Bond
TOBP Tender Option Bond Partnership
TRAN Tax and Revenue Anticipation Notes
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
89
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (in thousands)
December 31, 1998
<TABLE>
<CAPTION>
Schwab Schwab
Schwab California New York
Municipal Municipal Municipal
Money Fund Money Fund Money Fund
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Investments, at value (Cost: $6,931,296, $4,046,484 and
$717,452, respectively) $6,931,296 $4,046,484 $717,452
Cash -- -- 7
Receivables:
Interest 41,923 24,998 4,524
Fund shares sold 19,836 4,419 1,620
Prepaid expenses 714 253 104
---------- ---------- --------
Total assets 6,993,769 4,076,154 723,707
---------- ---------- --------
LIABILITIES
Payables:
Dividends 23,393 12,023 2,242
Investments purchased 93,864 88,785 14,156
Fund shares redeemed 8,893 4,989 1,182
Investment advisory and administration fees 138 75 14
Transfer agency and shareholder service fees 301 166 28
Other liabilities 411 337 148
---------- ---------- --------
Total liabilities 127,000 106,375 17,770
---------- ---------- --------
Net assets applicable to outstanding shares $6,866,769 $3,969,779 $705,937
========== ========== ========
NET ASSETS CONSIST OF:
Paid-in-capital $6,869,272 $3,970,589 $705,958
Accumulated net realized loss on investments sold (2,503) (810) (21)
---------- ---------- --------
$6,866,769 $3,969,779 $705,937
========== ========== ========
PRICING OF SHARES
$0.00001 par value (unlimited shares authorized)
Outstanding Sweep Shares 5,249,316 2,611,666 467,817
Outstanding Value Advantage Shares(TRADEMARK) 1,620,225 1,359,022 238,204
---------- ---------- --------
6,869,541 3,970,688 706,021
========== ========== ========
Net asset value, offering and redemption price per each Sweep
and Value Advantage Share(TRADEMARK) $1.00 $1.00 $1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
90
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (in thousands)
December 31, 1998
<TABLE>
<CAPTION>
Schwab Schwab Schwab
New Jersey Pennsylvania Florida
Municipal Municipal Municipal
Money Fund Money Fund Money Fund
---------- ------------ ----------
<S> <C> <C> <C>
ASSETS
Investments, at value (Cost: $97,128, $121,312 and
$972,117, respectively) $97,128 $121,312 $ 972,117
Cash 262 38 17,903
Receivables:
Interest 874 815 6,310
Investments sold -- -- 22,170
Prepaid expenses 3 4 3
------- -------- ----------
Total assets 98,267 122,169 1,018,503
------- -------- ----------
LIABILITIES
Payables:
Dividends 305 396 1,793
Investment advisory and administration fees -- 1 13
Transfer agency and shareholder service fees 6 6 41
Other liabilities 41 50 164
------- -------- ----------
Total liabilities 352 453 2,011
------- -------- ----------
Net assets applicable to outstanding shares $97,915 $121,716 $1,016,492
======= ======== ==========
NET ASSETS CONSIST OF:
Paid-in-capital $97,915 $121,721 $1,016,492
Accumulated net realized loss on investments sold -- (5) --
------- -------- ----------
$97,915 $121,716 $1,016,492
======= ======== ==========
PRICING OF SHARES
$0.00001 par value (unlimited shares authorized)
Outstanding Sweep Shares 97,951 121,758 1,016,515
Net asset value, offering and redemption price per share $1.00 $1.00 $1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
91
<PAGE>
STATEMENTS OF OPERATIONS (in thousands)
For the year ended December 31, 1998
<TABLE>
<CAPTION>
Schwab Schwab Schwab Schwab Schwab
Schwab California New York New Jersey Pennsylvania Florida
Municipal Municipal Municipal Municipal Municipal Municipal
Money Fund Money Fund Money Fund Money Fund 1 Money Fund 1 Money Fund 2
---------- ---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Interest income $217,941 $112,540 $20,426 $1,983 $2,065 $11,723
-------- -------- ------- ------ ------ -------
Expenses:
Investment advisory and
administration fees 25,373 14,582 2,746 268 271 1,524
Transfer agency and shareholder
service fees:
Sweep Shares 21,161 10,373 1,861 262 265 1,491
Value Advantage
Shares(TRADEMARK) 3,665 2,914 459 -- -- --
Custodian and portfolio
accounting fees 556 391 226 33 34 82
Registration fees 466 201 76 34 50 151
Professional fees 53 46 22 13 13 14
Shareholder reports 279 162 29 3 3 8
Trustees' fees 26 22 14 6 6 6
Offering fees -- -- -- 36 37 23
Insurance and other expenses 53 25 12 6 4 9
-------- -------- ------- ------ ------ -------
51,632 28,716 5,445 661 683 3,308
Less: expenses reduced (see Note 4) (13,999) (8,488) (1,766) (282) (300) (1,353)
-------- -------- ------- ------ ------ -------
Total expenses incurred by Fund 37,633 20,228 3,679 379 383 1,955
-------- -------- ------- ------ ------ -------
Net investment income 180,308 92,312 16,747 1,604 1,682 9,768
Net realized gain (loss) on
investments sold 337 (34) (7) -- (5) --
-------- -------- ------- ------ ------ -------
Increase in net assets resulting
from operations $180,645 $ 92,278 $16,740 $1,604 $1,677 $ 9,768
======== ======== ======= ====== ====== =======
<FN>
1 For the period from February 2, 1998 (commencement of operations) to
December 31, 1998.
2 For the period from March 18, 1998 (commencement of operations) to December
31, 1998.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
92
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
For the year ended December 31,
<TABLE>
<CAPTION>
Schwab Schwab California Schwab New York
Municipal Money Fund Municipal Money Fund Municipal Money Fund
-------------------------- ------------------------- ------------------------
1998 1997 1998 1997 1998 1997
------------ ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 180,308 $ 151,940 $ 92,312 $ 79,137 $ 16,747 $ 12,130
Net realized gain (loss) on
investments sold 337 (515) (34) (44) (7) 1
------------ ------------ ------------ ----------- ----------- -----------
Increase in net assets
resulting from operations 180,645 151,425 92,278 79,093 16,740 12,131
------------ ------------ ------------ ----------- ----------- -----------
Dividends to shareholders
from net investment income
(See Note 2):
Sweep Shares (135,406) (125,666) (59,906) (56,234) (11,347) (9,121)
Value Advantage
Shares(TRADEMARK) (45,171) (26,274) (32,505) (22,903) (5,451) (3,009)
------------ ------------ ------------ ----------- ----------- -----------
Total dividends to
shareholders (180,577) (151,940) (92,411) (79,137) (16,798) (12,130)
------------ ------------ ------------ ----------- ----------- -----------
Capital share transactions
(at $1.00 per share):
Proceeds from shares sold 23,318,964 17,267,233 11,624,728 8,685,116 2,031,062 1,365,492
Net asset value of shares
issued in reinvestment
of dividends 172,257 143,585 88,948 74,380 15,938 11,240
Less payments for shares
redeemed (22,133,590) (16,378,232) (10,835,101) (7,991,713) (1,823,763) (1,231,270)
------------ ------------ ------------ ----------- ----------- -----------
Increase in net assets
from capital share
transactions 1,357,631 1,032,586 878,575 767,783 223,237 145,462
------------ ------------ ------------ ----------- ----------- -----------
Total increase in net
assets 1,357,699 1,032,071 878,442 767,739 223,179 145,463
Net assets:
Beginning of period 5,509,070 4,476,999 3,091,337 2,323,598 482,758 337,295
------------ ------------ ------------ ----------- ----------- -----------
End of period $ 6,866,769 $ 5,509,070 $ 3,969,779 $ 3,091,337 $ 705,937 $ 482,758
============ ============ ============ =========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
93
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
For the period ended December 31,
<TABLE>
<CAPTION>
Schwab New Jersey Schwab Pennsylvania Schwab Florida
Municipal Money Fund Municipal Money Fund Municipal Money Fund
-------------------- -------------------- --------------------
1998 1 1998 1 1998 2
--------- --------- -----------
<S> <C> <C> <C>
Operations:
Net investment income $ 1,604 $ 1,682 $ 9,768
Net realized loss on investments sold -- (5) --
--------- --------- -----------
Increase in net assets resulting
from operations 1,604 1,677 9,768
--------- --------- -----------
Dividends to shareholders from net
investment income
(See Note 2):
Sweep Shares (1,640) (1,719) (9,791)
--------- --------- -----------
Capital share transactions (at $1.00 per share):
Proceeds from shares sold 330,574 335,122 2,075,332
Net asset value of shares issued in
reinvestment of dividends 1,305 1,300 7,864
Less payments for shares redeemed (233,928) (214,664) (1,066,681)
--------- --------- -----------
Increase in net assets from capital share
transactions 97,951 121,758 1,016,515
--------- --------- -----------
Total increase in net assets 97,915 121,716 1,016,492
Net assets:
Beginning of period -- -- --
--------- --------- -----------
End of period $ 97,915 $ 121,716 $ 1,016,492
========= ========= ===========
<FN>
1 For the period from February 2, 1998 (commencement of operations) to
December 31, 1998.
2 For the period from March 18, 1998 (commencement of operations) to December
31, 1998.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
94
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab Municipal Money Fund
--------------------------------------------------------
SWEEP SHARES 1998 1997 1996 1995 1994
- ------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
From investment operations:
Net investment income 0.03 0.03 0.03 0.03 0.02
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.03 0.03 0.03 0.03 0.02
Less distributions:
Dividends from net investment income (0.03)2 (0.03) (0.03) (0.03) (0.02)
---------- ---------- ---------- ---------- ----------
Total distributions (0.03) (0.03) (0.03) (0.03) (0.02)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return (%) 2.92 3.11 2.92 3.30 2.32
RATIOS/SUPPLEMENTAL DATA (%)
- ------------------------------------------
Ratio of net operating expenses to average net assets 0.66 0.66 3 0.66 0.66 0.65
Reductions reflected in above expense ratio 0.22 0.24 0.24 0.25 0.26
Ratio of net investment income to average net assets 2.87 3.06 2.89 3.25 2.31
Net assets, end of period (000s) $5,246,638 $4,423,841 $3,868,919 $3,403,837 $3,015,951
</TABLE>
<TABLE>
<CAPTION>
VALUE ADVANTAGE SHARES(TRADEMARK) 1998 1997 1996 1995 1
- ------------------------------------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ----------
From investment operations:
Net investment income 0.03 0.03 0.03 0.02
---------- ---------- ---------- ----------
Total income from investment operations 0.03 0.03 0.03 0.02
Less distributions:
Dividends from net investment income (0.03)2 (0.03) (0.03) (0.02)
---------- ---------- ---------- ----------
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 (%) 3.14 3.32 3.14 1.68**
RATIOS/SUPPLEMENTAL DATA (%)
- ------------------------------------------
Ratio of actual operating expenses to average net assets 0.45 0.45 4 0.45 0.45*
Reductions reflected in above expense ratio 0.24 0.27 0.30 0.50*
Ratio of net investment income to average net assets 3.08 3.29 3.10 3.50*
Net assets, end of period (000s) $1,620,131 $1,085,229 $ 608,080 $ 160,682
<FN>
1 For the period from July 7, 1995 (commencement of operations) to December
31, 1995.
2 The amounts shown include certain reclassifications related to book to tax
differences (see Note 2 of Notes to Financial Statements).
3 This expense ratio excludes extraordinary expenses. Had these expenses been
included, the expense ratio would have been 0.67%.
4 This expense ratio excludes extraordinary expenses. Had these expenses been
included, the expense ratio would have been 0.46%.
* Annualized.
** Not annualized.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
95
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab California Municipal Money Fund
--------------------------------------------------------
SWEEP SHARES 1998 1997 1996 1995 1994
- ------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
From investment operations:
Net investment income 0.03 0.03 0.03 0.03 0.02
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.03 0.03 0.03 0.03 0.02
Less distributions:
Dividends from net investment income (0.03)2 (0.03) (0.03) (0.03) (0.02)
---------- ---------- ---------- ---------- ----------
Total distributions (0.03) (0.03) (0.03) (0.03) (0.02)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Total return (%) 2.64 2.95 2.80 3.20 2.26
RATIOS/SUPPLEMENTAL DATA (%)
- ------------------------------------------
Ratio of net operating expenses to average net assets 0.65 0.65 3 0.65 0.65 0.64
Reductions reflected in above expense ratio 0.24 0.26 0.27 0.29 0.30
Ratio of net investment income to average net assets 2.60 2.91 2.77 3.15 2.25
Net assets, end of period (000s) $2,610,821 $2,154,522 $1,816,112 $1,577,695 $1,293,883
</TABLE>
<TABLE>
<CAPTION>
VALUE ADVANTAGE SHARES(TRADEMARK) 1998 1997 1996 1995 1
- ------------------------------------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ----------
From investment operations:
Net investment income 0.03 0.03 0.03 0.01
---------- ---------- ---------- ----------
Total income from investment operations 0.03 0.03 0.03 0.01
Less distributions:
Dividends from net investment income (0.03)2 (0.03) (0.03) (0.01)
---------- ---------- ---------- ----------
Total distributions (0.03) (0.03) (0.03) (0.01)
---------- ---------- ---------- ----------
NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ==========
Total return (%) 2.84 3.15 3.01 0.84**
RATIOS/SUPPLEMENTAL DATA (%)
- ------------------------------------------
Ratio of actual operating expenses to average net assets 0.45 0.45 4 0.45 0.45*
Reductions reflected in above expense ratio 0.25 0.27 0.32 0.59*
Ratio of net investment income to average net assets 2.79 3.12 2.98 3.48*
Net assets, end of period (000s) $1,358,958 $ 936,815 $ 507,486 $ 108,008
<FN>
1 For the period from October 3, 1995 (commencement of operations) to
December 31, 1995.
2 The amounts shown include certain reclassifications related to book to tax
differences (see Note 2 of Notes to Financial Statements).
3 This expense ratio excludes extraordinary expenses. Had these expenses been
included, the expense ratio would have been 0.66%.
4 This expense ratio excludes extraordinary expenses. Had these expenses been
included, the expense ratio would have been 0.46%.
* Annualized
** Not annualized.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
96
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab New York Municipal Money Fund
---------------------------------------------
SWEEP SHARES 1998 1997 1996 1995 1
- ------------------------------------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
From investment operations:
Net investment income 0.03 0.03 0.03 0.03
-------- -------- -------- --------
Total from investment operations 0.03 0.03 0.03 0.03
Less distributions:
Dividends from net investment income (0.03)3 (0.03) (0.03) (0.03)
-------- -------- -------- --------
Total distributions (0.03) (0.03) (0.03) (0.03)
-------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total return (%) 2.78 2.96 2.74 2.75**
RATIOS/SUPPLEMENTAL DATA (%)
- ------------------------------------------
Ratio of net operating expenses to average net assets 0.69 0.69 4 0.69 0.63*
Reductions reflected in above expense ratio 0.28 0.33 0.35 0.41*
Ratio of net investment income to average net assets 2.73 2.93 2.71 3.20*
Net assets, end of period (000s) $467,750 $357,221 $270,612 $204,863
</TABLE>
<TABLE>
<CAPTION>
VALUE ADVANTAGE SHARES(TRADEMARK) 1998 1997 1996 1995 2
- ------------------------------------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
From investment operations:
Net investment income 0.03 0.03 0.03 0.02
-------- -------- -------- --------
Total income from investment operations 0.03 0.03 0.03 0.02
Less distributions:
Dividends from net investment income (0.03)3 (0.03) (0.03) (0.02)
-------- -------- -------- --------
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 (%) 3.03 3.21 2.99 1.62**
RATIOS/SUPPLEMENTAL DATA (%)
- ------------------------------------------
Ratio of actual operating expenses to average net assets 0.45 0.45 5 0.45 0.45*
Reductions reflected in above expense ratio 0.33 0.40 0.56 1.36*
Ratio of net investment income to average net assets 2.96 3.18 2.98 3.42*
Net assets, end of period (000s) $238,187 $125,537 $ 66,683 $ 15,143
<FN>
1 For the period from February 27, 1995 (commencement of operations) to
December 31, 1995.
2 For the period from July 7, 1995 (commencement of operations) to December
31, 1995.
3 The amounts shown include certain reclassifications related to book to tax
differences (see Note 2 of Notes to Financial Statements).
4 This expense ratio excludes extraordinary expenses. Had these expenses been
included, the expense ratio would have been 0.70%.
5 This expense ratio excludes extraordinary expenses. Had these expenses been
included, the expense ratio would have been 0.46%.
* Annualized
** Not annualized.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
97
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab New Jersey Schwab Pennsylvania Schwab Florida
Municipal Money Fund Municipal Money Fund Municipal Money Fund
-------------------- -------------------- --------------------
SWEEP SHARES 1998 1 1998 1 1998 2
- ------------------------------------------ -------- -------- --------
<S> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00
-------- -------- ----------
From investment operations:
Net investment income 0.03 0.03 0.02
-------- -------- ----------
Total from investment operations 0.03 0.03 0.02
Less distributions:
Dividends from net investment income (0.03)3 (0.03)3 (0.02)3
-------- -------- ----------
Total distributions (0.03) (0.03) (0.02)
-------- -------- ----------
NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00
======== ======== ==========
Total return (%) 2.60** 2.72** 2.37**
RATIOS/SUPPLEMENTAL DATA (%)
- ------------------------------------------
Ratio of net operating expenses to average net assets 0.65* 0.65* 0.59*
Reductions reflected in above expense ratio 0.48* 0.51* 0.41*
Ratio of net investment income to average net assets 2.75* 2.85* 2.95*
Net assets, end of period (000s) $ 97,915 $121,716 $1,016,492
<FN>
1 For the period from February 2, 1998 (commencement of operations) to
December 31, 1998.
2 For the period from March 18, 1998 (commencement of operations) to December
31, 1998.
3 The amounts shown include certain reclassifications related to book to tax
differences (see Note 2 of Notes to Financial Statements.)
* Annualized.
** Not annualized.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
98
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Year ended December 31, 1998
(All dollar amounts are in thousands unless otherwise noted)
1. DESCRIPTION OF THE FUNDS
The Schwab Municipal Money Fund, Schwab California Municipal Money Fund, Schwab
New York Municipal Money Fund, Schwab New Jersey Municipal Money Fund, Schwab
Pennsylvania Municipal Money Fund and Schwab Florida Municipal Money Fund (the
"Funds"), 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.
All Funds offer Sweep shares, and the Schwab Municipal Money Fund, Schwab
California Municipal Money Fund and Schwab New York Municipal Money Fund offer
an additional class of shares Value Advantage Shares(TRADEMARK). 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 six Funds described above, the Trust also offers Schwab Money
Market Fund, Schwab Government Money Fund, Schwab U.S. Treasury Money Fund,
Schwab Value Advantage Money Fund,(REGISTRATION MARK) Schwab Institutional
Advantage Money Fund,(REGISTRATION MARK) Schwab Retirement Money
Fund(REGISTRATION MARK) and Schwab Government Cash Reserves. 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. 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) are
allocated daily to each class of shares of a Fund based on the value of settled
shares outstanding of each respective class.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Each Fund declares a daily
dividend, equal to its net investment income for that day, payable monthly. Net
realized capital gains, if any, are normally distributed annually. 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.
99
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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 and shareholder service fees are class specific and 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.
As of December 31, 1998, the unused capital loss carryforwards, for federal
income tax purposes with expiration dates, were as follows:
<TABLE>
<CAPTION>
Schwab Schwab Schwab
Schwab California New York Pennsylvania
Municipal Municipal Municipal Municipal
Expiring in: Money Fund Money Fund Money Fund Money Fund
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
12/31/00 $ -- $ 1 $-- $--
12/31/01 -- 56 -- --
12/31/02 1,454 583 -- --
12/31/03 36 -- 6 --
12/31/04 465 93 9 --
12/31/05 523 35 -- --
12/31/06 -- 55 6 5
------ ---- --- ---
Total capital loss carryforwards $2,478 $823 $21 $ 5
====== ==== === ===
</TABLE>
RECLASSIFICATIONS -- Generally accepted accounting principles require that
certain components of net assets be reclassified to reflect permanent
differences between financial and tax reporting. Accordingly, permanent book/tax
differences were reclassified from paid-in-capital to undistributed net
investment income. These reclassifications have no effect on net assets or net
asset values per share.
Schwab Municipal Money Fund $269
Schwab California Municipal Money Fund $99
Schwab New York Municipal Money Fund $51
Schwab New Jersey Municipal Money Fund $36
Schwab Pennsylvania Municipal Money Fund $37
Schwab Florida Municipal Money Fund $23
100
<PAGE>
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 Adviser"). For advisory services and
facilities furnished, each Fund pays an annual fee, payable monthly, of 0.46% on
the first $1 billion of average daily net assets, 0.41% on the next $1 billion
and 0.40% on such assets in excess of $2 billion. The Investment Adviser has
reduced a portion of its fee for the year ended December 31, 1998 (see Note 4).
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The Trust has transfer
agency and shareholder service agreements with Charles Schwab & Co., Inc.
("Schwab"). For transfer agency services provided, Schwab receives an annual
fee, payable monthly, of 0.25% of average daily net assets of the Sweep Shares
and 0.05% for Value Advantage Shares. For shareholder services provided, Schwab
receives 0.20% of each Fund's average daily net assets. Schwab has reduced a
portion of its fee for the year ended December 31, 1998 (see Note 4).
OFFICERS AND TRUSTEES -- Certain officers and trustees of the Trust are also
officers and/or directors of the Investment Adviser and/or Schwab. During the
year ended December 31, 1998, 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 Funds incurred fees aggregating $80 related
to the Trust's unaffiliated trustees.
INTERFUND TRANSACTIONS -- During the year ended December 31, 1998, the Funds
engaged in purchase and sale transactions with funds that have a common
investment adviser, common trustees, and common officers.These transactions,
made at current market value pursuant to Rule 17a-7 under the Investment Company
Act of 1940, aggregated the following dollar amounts as seen below.
Schwab Municipal Money Fund $2,363,371
- --------------------------------------------------------------------------------
Schwab California Municipal Money Fund $ 553,109
- --------------------------------------------------------------------------------
Schwab New York Municipal Money Fund $ 466,730
- --------------------------------------------------------------------------------
Schwab New Jersey Municipal Money Fund $ 254,058
- --------------------------------------------------------------------------------
Schwab Pennsylvania Municipal Money Fund $ 228,497
- --------------------------------------------------------------------------------
Schwab Florida Municipal Money Fund $1,180,252
- --------------------------------------------------------------------------------
101
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
4. EXPENSES REDUCED BY THE INVESTMENT ADVISER AND SCHWAB
The Investment Adviser and Schwab guarantee that, through at least April 30,
1999, for Schwab Municipal Money Fund, Schwab California Municipal Money Fund
and Schwab New York Municipal Money Fund, and through at least February 28, 1999
for Schwab New Jersey Municipal Money Fund, Schwab Pennsylvania Municipal Money
Fund and Schwab Florida Municipal Money Fund, respectively, total operating
expenses of each class of shares will not exceed certain percentages of average
daily net assets of that class of shares, after reductions, as shown below. For
purposes of this guarantee, operating expenses do not include interest expenses,
extraordinary expenses and taxes.
Sweep Value Advantage
Shares Shares(TRADEMARK)
- --------------------------------------------------------------------------------
Schwab Municipal Money Fund 0.66% 0.45%
- --------------------------------------------------------------------------------
Schwab California Municipal Money Fund 0.65% 0.45%
- --------------------------------------------------------------------------------
Schwab New York Municipal Money Fund 0.69% 0.45%
- --------------------------------------------------------------------------------
Schwab New Jersey Municipal Money Fund 0.65% --
- --------------------------------------------------------------------------------
Schwab Pennsylvania Municipal Money Fund 0.65% --
- --------------------------------------------------------------------------------
Schwab Florida Municipal Money Fund 0.59% --
- --------------------------------------------------------------------------------
For the year ended December 31, 1998, the total of such fees reduced by the
Investment Adviser and Schwab were:
Fees Reduced by the Fees Reduced by
Investment Adviser Schwab
- --------------------------------------------------------------------------------
Schwab Municipal Money Fund $13,780 $219
- --------------------------------------------------------------------------------
Schwab California Municipal Money Fund $ 8,464 $ 24
- --------------------------------------------------------------------------------
Schwab New York Municipal Money Fund $ 1,677 $ 89
- --------------------------------------------------------------------------------
Schwab New Jersey Municipal Money Fund $ 268 $ 14
- --------------------------------------------------------------------------------
Schwab Pennsylvania Municipal Money Fund $ 271 $ 29
- --------------------------------------------------------------------------------
Schwab Florida Municipal Money Fund $ 1,353 --
- --------------------------------------------------------------------------------
102
<PAGE>
5. CAPITAL SHARE TRANSACTIONS
Transactions in capital shares, for the years ended December 31, 1998 and
December 31, 1997 (at $1.00 per share), were as follows:
<TABLE>
<CAPTION>
Schwab Schwab California Schwab New York
Municipal Money Fund Municipal Money Fund Municipal Money Fund
--------------------------- -------------------------- --------------------------
For the For the For the For the For the For the
Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1998 1997 1998 1997 1998 1997
------------ ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from shares sold:
Sweep Shares $ 20,195,590 $ 15,493,142 $ 9,633,080 $ 7,203,514 $ 1,718,551 $ 1,167,590
Value Advantage
Shares(TRADEMARK) 3,123,374 1,774,091 1,991,648 1,481,602 312,511 197,902
------------ ------------ ------------ ----------- ------------ -----------
Total 23,318,964 17,267,233 11,624,728 8,685,116 2,031,062 1,365,492
------------ ------------ ------------ ----------- ------------ -----------
Net asset value of shares issued
in reinvestment of dividends:
Sweep Shares 131,573 120,622 58,632 53,926 10,945 8,549
Value Advantage
Shares(TRADEMARK) 40,684 22,963 30,316 20,454 4,993 2,691
------------ ------------ ------------ ----------- ------------ -----------
Total 172,257 143,585 88,948 74,380 15,938 11,240
------------ ------------ ------------ ----------- ------------ -----------
Less payments for shares redeemed:
Sweep Shares (19,504,411) (15,058,403) (9,235,322) (6,918,999) (1,618,924) (1,089,531)
Value Advantage
Shares(TRADEMARK) (2,629,179) (1,319,829) (1,599,779) (1,072,714) (204,839) (141,739)
------------ ------------ ------------ ----------- ------------ -----------
Total (22,133,590) (16,378,232) (10,835,101) (7,991,713) (1,823,763) (1,231,270)
------------ ------------ ------------ ----------- ------------ -----------
Total increase in net
assets from capital
share transactions $ 1,357,631 $ 1,032,586 $ 878,575 $ 767,783 $ 223,237 $ 145,462
============ ============ ============ =========== ============ ===========
</TABLE>
103
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Schwab Municipal Money Fund, Schwab California Municipal Money Fund,
Schwab New York Municipal Money Fund, Schwab New Jersey Municipal Money Fund,
Schwab Pennsylvania Municipal Money Fund, and Schwab Florida Municipal Money
Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules 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 Schwab Municipal Money Fund, Schwab
California Municipal Money Fund, Schwab New York Municipal Money Fund, Schwab
New Jersey Municipal Money Fund, Schwab Pennsylvania Municipal Money Fund, and
Schwab Florida Municipal Money Fund (six series constituting part of The Charles
Schwab Family of Funds, hereafter collectively referred to as the "Funds") at
December 31, 1998, the results of each of their operations for the period 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 Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with 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, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
San Francisco, California
January 29, 1999
104
<PAGE>
TAX DESIGNATIONS (Unaudited)
Pursuant to Section 852(b)(5)(A) of the Internal Revenue Code, the Funds hereby
designate 100% of the dividends paid for the year ended December 31, 1998 as
exempt-interest dividends.
105
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THE SCHWABFUNDS FAMILY-REGISTERED TRADEMARK-
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 market
funds.
Please call 800-435-4000 for a free prospectus and brochure for any of these
SchwabFunds.
This report must be preceded or accompanied by a current prospectus.
SCHWAB ASSET ALLOCATION FUNDS
Schwab MarketTrack All Equity Portfolio
Schwab MarketTrack Growth Portfolio
Schwab MarketTrack Balanced Portfolio
Schwab MarketTrack Conservative Portfolio
Schwab MarketManager Growth Portfolio
Schwab MarketManager Balanced Portfolio
SCHWAB STOCK FUNDS
Schwab S&P 500 Fund
Schwab 1000 Fund-Registered Trademark-
Schwab Analytics Fund-Registered Trademark-
Schwab Small-Cap Index Fund-Registered Trademark-
Schwab MarketManager Small Cap Portfolio
Schwab International Index Fund-Registered Trademark-
Schwab MarketManager International Portfolio
SCHWAB BOND FUNDS
Schwab Total Bond Market Index Fund
Schwab Short-Term Bond Market Index Fund
Schwab Long-Term Tax-Free Bond Fund
Schwab Short/Intermediate Tax-Free Bond Fund
Schwab California Long-Term Tax-Free Bond Fund
Schwab California Short/Intermediate
Tax-Free Bond Fund
SCHWAB MONEY MARKET FUNDS
Schwab offers an array of money market funds(1) that seek high current income
consistent 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.-Registered Trademark-
(1)Investments in money market funds are neither insured nor guaranteed by the
Federal Deposit Insurance Corporation (FDIC) or any other government agency
and, although they seek to preserve the value of your investment at $1 per
share, it is possible to lose money.
<PAGE>
SchwabFunds-Registered Trademark-
101 Montgomery Street
San Francisco, California 94104
INVESTMENT ADVISER
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
DISTRIBUTOR
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
- -C- 1999 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
Printed on recycled paper. CRS 20423 (0199-0837) MKT3859(1/99)
