SCHWABFUNDS(REGISTRATION MARK)
[GRAPHIC OMITTED]
SCHWAB
INSTITUTIONAL ADVANTAGE
MONEY FUND(REGISTRATION MARK)
SCHWAB
RETIREMENT MONEY FUND(REGISTRATION MARK)
Semiannual Report
June 30, 1999
<PAGE>
Dear Shareholder:
We're pleased to bring you this semiannual report on the performance for the
Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab
Retirement Money Fund(REGISTRATION MARK) for the six-month period ended June 30,
1999. During the reporting period, the funds continued to provide investors with
current income consistent with the preservation of capital. By the end of the
six-month period, the Schwab Institutional Advantage Money Fund's net assets
were more than $435 million and the Schwab Retirement Money Fund's net assets
were more than $245 million.
FUND PERFORMANCE
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK)
YIELD SUMMARY AS OF 6/30/99 1
- -------------------------------------------------------------------
Seven-Day Current Yield 4.58%
- -------------------------------------------------------------------
Seven-Day Effective Yield 4.68%
- -------------------------------------------------------------------
SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK)
YIELD SUMMARY AS OF 6/30/99
- -------------------------------------------------------------------
Seven-Day Current Yield 4.37%
- -------------------------------------------------------------------
Seven-Day Effective Yield 4.47%
- -------------------------------------------------------------------
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 by investing in the
funds.
This report contains a complete list of holdings for both the Schwab
Institutional Advantage Money Fund and the Schwab Retirement Money Fund as of
June 30, 1999.
We appreciate your confidence in SchwabFunds(REGISTRATION MARK) and look forward
to continuing to help you achieve your financial goals in the future.
Sincerely,
/S/CHARLES R. SCHWAB
Charles R. Schwab
Chairman
The Charles Schwab Family of Funds
1 A portion of the fund's expenses was reduced during the reporting period.
Without this reduction, as of 6/30/99, the seven-day current yield would have
been 4.41%, and the seven-day effective yield would have been 4.51%.
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK)
AVERAGE YIELDS FOR THE PERIOD ENDED 6/30/99 2
- ----------------------------------------------------
Last seven days 4.58%
- ----------------------------------------------------
Last three months 4.52%
- ----------------------------------------------------
Last 12 months 4.82%
- ----------------------------------------------------
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
MATURITY RANGE 3/31/99 6/30/99
- --------------------------------------------------------------------------------
0-15 days 28.7% 24.1%
- --------------------------------------------------------------------------------
16-30 days 9.3% 20.6%
- --------------------------------------------------------------------------------
31-60 days 12.3% 22.3%
- --------------------------------------------------------------------------------
61-90 days 21.2% 16.4%
- --------------------------------------------------------------------------------
91-120 days 14.6% 3.4%
- --------------------------------------------------------------------------------
More than 120 days 13.9% 13.2%
- --------------------------------------------------------------------------------
Weighted average 65 days 67 days
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 6/30/99
- -----------------------------------------------------------------------
Tier 1 100.0%
- -----------------------------------------------------------------------
2 A portion of the fund's expenses was reduced during the periods. Without this
reduction, yields would have been lower.
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK)
AVERAGE YIELDS FOR THE PERIOD ENDED 6/30/99
- ----------------------------------------------
Last seven days 4.37%
- ----------------------------------------------
Last three months 4.31%3
- ----------------------------------------------
Last 12 months 4.60%3
- ----------------------------------------------
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
MATURITY RANGE 3/31/99 6/30/99
- --------------------------------------------------------------------------------
0-15 days 27.9% 26.0%
- --------------------------------------------------------------------------------
16-30 days 9.4% 21.2%
- --------------------------------------------------------------------------------
31-60 days 4.3% 21.0%
- --------------------------------------------------------------------------------
61-90 days 26.5% 17.8%
- --------------------------------------------------------------------------------
91-120 days 16.0% 1.3%
- --------------------------------------------------------------------------------
More than 120 days 15.9% 12.7%
- --------------------------------------------------------------------------------
Weighted average 70 days 67 days
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 6/30/99
- --------------------------------------------------------------------------------
Tier 1 100.0%
- --------------------------------------------------------------------------------
3 A portion of the fund's expenses was reduced during the periods. Without this
reduction, yields would have been lower.
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
JUNE 30, 1999 (unaudited)
Par Value
------- -------
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- 76.1%
BANKING - BELGIUM -- 6.4% (a)
BBL North America
4.88%, 07/21/99 $19,000 $18,949
Generale Funding L.L.C
5.21%, 12/10/99 9,000 8,795
-------
27,744
-------
BANKING - DOMESTIC -- 5.9%
BankAmerica Corp.
4.91%, 08/05/99 5,000 4,977
Intrepid Funding Master Trust (a)(d)
4.92%, 07/09/99 1,000 999
5.24%, 10/05/99 10,000 9,862
Kitty Hawk Funding Corp. (a)(d)
4.98%, 08/16/99 10,000 9,938
-------
25,776
-------
BANKING - FRANCE -- 1.4%
Societe Generale North America
4.93%, 07/08/99 5,980 5,974
-------
Banking - Germany -- 6.2% (a) (d)
Bavaria TRR Corp.
4.90%, 07/19/99 12,000 11,971
Giro US Funding Corp.
4.94%, 08/17/99 10,000 9,937
5.24%, 10/05/99 5,000 4,931
-------
26,839
-------
BANKING - NETHERLANDS -- 4.1% (d)
Atlantis One Funding Corp.
4.93%, 08/18/99 5,098 5,065
4.97%, 08/24/99 3,000 2,978
4.97%, 08/26/99 7,518 7,461
4.90%, 09/01/99 2,500 2,480
-------
17,984
-------
BANKING - NORWAY -- 3.4% (a)
Christiania Capital Corp.
4.90%, 08/10/99 15,000 14,920
-------
BANKING - SWEDEN -- 5.7%
AB Spintab
4.93%, 07/26/99 6,000 5,980
4.92%, 07/27/99 1,000 997
5.05%, 09/10/99 8,000 7,922
Nordbanken of North America, Inc.
4.92%, 07/12/99 10,000 9,985
-------
24,884
-------
1
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
JUNE 30, 1999 (UNAUDITED)
Par Value
------- -------
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- (Continued)
BANKING - UNITED KINGDOM -- 5.2%
Abbey National Treasury Services PLC
5.20%, 05/04/00 $10,000 $ 9,994
Banco Nacional de Mexico S.A. (d)
4.99%, 09/14/99 10,000 9,898
Repeat Offering Securitization Entity, Inc. (a) (d)
4.90%, 07/22/99 2,593 2,586
-------
22,478
-------
CREDIT CARD RECEIVABLES -- 6.3% (a) (e)
Dakota Certificates Program SCCMT-1
4.91%, 07/07/99 10,000 9,992
5.17%, 09/24/99 11,000 10,867
Providian Department Master
Trust Series 1993-3
4.91%, 07/16/99 6,500 6,487
-------
27,346
-------
DIVERSIFIED FINANCIAL ASSETs -- 12.7% (a) (e)
Ace Overseas Corp.
4.89%, 08/02/99 7,000 6,970
-------
Bavaria Universal Funding Corp.
4.90%, 07/16/99 7,000 6,986
CC (USA), Inc.
4.90%, 08/02/99 5,000 4,979
Concord Minutemen Capital Co.,
LLC Series A
5.10%, 08/20/99 7,000 6,951
Lexington Parker Capital Corp.
5.19%, 09/07/99 13,000 12,874
Moriarty L.L.C
4.90%, 07/12/99 3,000 2,996
Sigma Finance, Inc.
5.01%, 07/15/99 5,000 4,990
4.90%, 08/10/99 3,000 2,984
5.01%, 11/17/99 1,000 981
Stellar Funding Group, Inc.
4.92%, 07/06/99 1,000 999
4.89%, 07/22/99 3,893 3,882
-------
55,592
-------
FINANCE - COMMERCIAL -- 7.2%
General Electric Capital Corp.
5.63%, 07/01/99 19,566 19,566
Heller Financial, Inc.
5.00%, 07/16/99 2,000 1,996
5.00%, 07/30/99 10,000 9,960
-------
31,522
-------
FINANCE - CONSUMER -- 3.2%
Associates First Capital Corp.
5.04%, 09/15/99 14,000 13,853
-------
2
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
JUNE 30, 1999 (UNAUDITED)
Par Value
------- -------
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- (CONTINUED)
SECURITIES BROKERAGE - DEALER -- 2.5%
Bear Stearns Companies, Inc.
4.93%, 07/14/99 $ 1,000 $ 998
JP Morgan & Co.
4.98%, 09/23/99 10,000 9,886
-------
10,884
-------
TRADE RECEIVABLES -- 5.9% (a) (e)
Apreco, Inc.
4.90%, 08/09/99 4,000 3,979
Asset Securitization Cooperative Corp.
5.19%, 07/21/99 12,000 11,965
Clipper Receivables Corp.
5.02%, 09/13/99 4,000 3,959
Wood Street Funding Corp.
4.90%, 08/04/99 6,000 5,973
-------
25,876
-------
TOTAL COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS
(Cost $331,672) 331,672
-------
CERTIFICATES OF DEPOSIT -- 18.8%
BANKING - CANADA -- 6.7%
Canadian Imperial Bank of Commerce
5.05%, 02/07/00 5,000 4,999
5.45%, 06/01/00 6,000 5,997
Royal Bank of Canada
5.71%, 07/12/99 10,000 10,000
Toronto-Dominion Bank
4.94%, 07/08/99 8,000 8,001
-------
28,997
-------
BANKING - DOMESTIC -- 4.6%
Bankers Trust Co.
4.94%, 07/02/99 10,000 10,000
Chase Manhattan Bank (USA), N.A
4.90%, 08/03/99 10,000 10,000
-------
20,000
-------
BANKING - SWITZERLAND -- 3.4%
UBS AG
5.70%, 07/09/99 6,000 6,000
5.11%, 01/13/00 1,000 1,000
5.10%, 04/12/00 5,000 4,999
5.17%, 05/10/00 3,000 2,999
-------
14,998
-------
3
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
JUNE 30, 1999 (UNAUDITED)
Par Value
------ ---------
CERTIFICATES OF DEPOSIT -- (CONTINUED)
BANKING - UNITED KINGDOM -- 4.1%
Barclays Bank PLC
5.35%, 05/22/00 $5,000 $ 5,000
5.66%, 06/14/00 6,000 5,997
National Westminster Bank PLC
5.06%, 01/10/00 7,000 6,997
-------
17,994
-------
TOTAL CERTIFICATES OF DEPOSIT (Cost $81,989) 81,989
-------
VARIABLE RATE OBLIGATIONS -- 5.2% (b)
BANKING - DOMESTIC -- 2.5% (d)
Asset Partners, Inc. Project RB Series 1997
5.19%, 07/07/99 2,685 2,685
BMC Special Care Facilities Financing
Authority of the City of Montgomery,
Alabama Taxable RB (Montgomery Baptist
Outreach Services Corp. Project) 1997B
5.11%, 07/07/99 2,200 2,200
City of Aurora, Kane, Dupage, Will &
Kendall Counties, Illinois Taxable IDRB
(North American Plastics Corp. Project)
Series 1996B
5.14%, 07/07/99 775 775
Illinois Development Finance Authority
Taxable Adjustable Rate IDRB (Maples &
Sprowl Steel, Ltd. Project) Series
1996B (a)
5.14%, 07/07/99 383 383
MoviePlex Realty Leasing, L.L.C. Adjustable
Rate Tender Securities (Carmike Cinemas,
Inc.) Series 1997B3
5.08%, 07/07/99 2,675 2,675
New York City IDA Taxable Industrial
Revenue Refunding Bonds (1997 Allway
Tools, Inc. Project)
5.44%, 07/07/99 195 195
Upper Illinois River Valley Development
Authority Taxable Solid Waste Disposal RB
(Exolon - ESK Co. Project) Series 1996B
5.19%, 07/07/99 2,000 2,000
--------
10,913
--------
SECURITIES BROKERAGE - DEALER -- 2.7% (a) (c)
Lehman Commercial Paper, Inc.
5.17%, 07/01/99 1,400 1,400
5.18%, 07/01/99 2,400 2,400
5.27%, 07/20/99 8,000 8,000
--------
11,800
--------
TOTAL VARIABLE RATE OBLIGATIONS (Cost $22,713 22,713
--------
TOTAL INVESTMENTS-- 100.1% (Cost $436,374) 436,374
--------
OTHER ASSETS AND LIABILITIES -- (0.1%)
Other assets 4,710
Liabilities (5,181)
--------
(471)
--------
TOTAL NET ASSETS-- 100.0% $435,903
========
See accompanying Notes to Schedule of Investments and Notes to Financial
Statements
4
<PAGE>
SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
JUNE 30, 1999 (UNAUDITED)
Par Value
------- -------
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- 72.7%
AUTOMOTIVE -- 2.0%
Daimler Chrysler N.A. Holdings
4.91%, 07/30/99 $ 5,000 $ 4,981
BANKING - BELGIUM -- 6.1% (a)
BBL North America
4.88%, 07/21/99 4,000 3,989
Generale Funding, L.L.C
4.93%, 08/11/99 9,000 8,951
5.21%, 12/10/99 2,000 1,954
-------
14,894
-------
BANKING - DOMESTIC 2.8% (a) (d)
Enterprise Funding Corp.
5.15%, 09/24/99 2,000 1,976
Kitty Hawk Funding Corp.
4.98%, 08/16/99 5,000 4,969
-------
6,945
-------
BANKING - FRANCE -- 2.0%
Societe Generale North America
4.93%, 07/08/99 5,000 4,995
-------
BANKING - GERMANY -- 4.1% (a) (d)
Bavaria TRR Corp.
4.90%, 07/19/99 10,000 9,976
-------
BANKING - NETHERLANDS -- 3.7% (d)
Atlantis One Funding Corp.
4.91%, 08/13/99 7,000 6,960
4.97%, 08/24/99 2,000 1,985
-------
8,945
-------
BANKING - NORWAY -- 2.0% (a)
Christiania Capital Corp.
4.90%, 08/10/99 5,000 4,973
-------
BANKING - SWEDEN -- 4.7%
AB Spintab
5.05%, 09/10/99 3,000 2,971
Nordbanken of North America, Inc.
4.92%, 07/12/99 5,000 4,993
4.95%, 08/10/99 2,500 2,486
Swedbank, Inc.
4.90%, 07/06/99 1,000 999
-------
11,449
-------
BANKING - UNITED KINGDOM -- 5.6%
Abbey National Treasury Services PLC
5.20%, 05/04/00 3,000 2,998
Repeat Offering Securitization
Entity, Inc. (a) (d)
4.90%, 07/22/99 4,000 3,989
5
<PAGE>
SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
JUNE 30, 1999 (UNAUDITED)
Par Value
------- -------
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- (CONTINUED)
BANKING - UNITED KINGDOM -- (CONTINUED)
Yorkshire Building Society
5.10%, 07/19/99 $ 6,829 $ 6,812
-------
13,799
-------
CREDIT CARD RECEIVABLES -- 2.0% (a) (e)
Dakota Certificates Program SCCMT-1
4.91%, 07/07/99 5,000 4,996
-------
DIVERSIFIED FINANCIAL ASSETS -- 14.1% (a) (e)
Ace Overseas Corp.
4.89%, 08/02/99 3,000 2,987
CC (USA), Inc.
4.90%, 08/02/99 3,000 2,987
5.30%, 09/28/99 1,000 987
Concord Minutemen Capital Co., L.L.C. Series A
5.10%, 08/20/99 6,000 5,958
International Securitization Corp.
5.17%, 09/17/99 10,000 9,890
Lexington Parker Capital Corp.
4.98%, 08/20/99 3,000 2,980
5.13%, 09/02/99 3,868 3,834
Moriarty L.L.C
5.18%, 09/22/99 1,000 988
Sigma Finance, Inc.
5.00%, 07/15/99 4,000 3,992
-------
34,603
-------
ELECTRICAL & ELECTRONICS -- 4.5%
General Electric Co.
5.63%, 07/01/99 11,000 11,000
-------
FINANCE - COMMERCIAL -- 5.6%
General Electric Capital Corp.
5.63%, 07/01/99 2,776 2,776
4.91%, 07/29/99 5,000 4,981
Heller Financial, Inc.
5.00%, 07/30/99 6,000 5,976
-------
13,733
-------
FINANCE - CONSUMER -- 4.4%
Associates First Capital Corp.
5.04%, 09/15/99 11,000 10,885
-------
TRADE RECEIVABLES -- 9.1%(a) (e)
Barton Capital Corp.
5.03%, 09/02/99 5,000 4,957
5.11%, 10/05/99 3,473 3,427
Clipper Receivables Corp.
5.02%, 09/13/99 3,000 2,969
6
<PAGE>
SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
JUNE 30, 1999 (UNAUDITED)
Par Value
-------- --------
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- (CONTINUED)
TRADE RECEIVABLES -- (CONTINUED)
Edison Asset Securitization Corp., L.L.C
4.90%, 07/19/99 $ 5,000 $ 4,988
Windmill Funding Corp.
5.55%, 07/01/99 6,000 6,000
--------
22,341
--------
TOTAL COMMERCIAL PAPER AND
OTHER CORPORATE OBLIGATIONS
(Cost $178,515) 178,515
--------
CERTIFICATES OF DEPOSIT -- 18.2%
BANKING - CANADA -- 5.1%
Canadian Imperial Bank of Commerce
5.35%, 03/03/00 4,000 3,998
5.45%, 06/01/00 4,000 3,998
Toronto-Dominion Bank
4.94%, 07/08/99 4,600 4,601
--------
12,597
--------
BANKING - DOMESTIC -- 2.5%
Chase Manhattan Bank (U.S.A.) N.A
4.90%, 08/03/99 6,000 6,000
--------
BANKING - FINLAND -- 1.6%
Merita Bank Ltd.
5.03%, 09/14/99 4,000 4,000
--------
BANKING - SWITZERLAND -- 3.7%
UBS AG
5.70%, 07/09/99 4,000 4,000
5.10%, 04/12/00 3,000 3,000
5.26%, 05/10/00 2,000 1,999
--------
8,999
--------
BANKING - UNITED KINGDOM -- 5.3%
Barclays Bank PLC
5.35%, 05/22/00 5,000 5,000
5.66%, 06/14/00 5,000 4,997
National Westminster Bank PLC
5.06%, 01/10/00 3,000 2,999
--------
12,996
--------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $44,592) 44,592
--------
VARIABLE RATE OBLIGATIONS -- 8.6% (b)
BANKING - DOMESTIC -- 5.2% (d)
California Pollution Control Financing
Authority Solid Waste Disposable RB
(Burr Properties Project) Series 1998
5.43%, 07/07/99 2,200 2,200
7
<PAGE>
SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
JUNE 30, 1999 (UNAUDITED)
Par Value
--------- ---------
VARIABLE RATE OBLIGATIONS -- (CONTINUED)
BANKING - DOMESTIC -- (CONTINUED)
Eagle County, Colorado Taxable Housing
Facilities RB (BC Housing, L.L.C
Project) Series 1997B
5.09%, 07/07/99 $ 1,500 $ 1,500
MoviePlex Realty Leasing, L.L.C. Adjustable
Rate Tender Securities
(Carmike Cinemas, Inc.) Series 1997B2
5.08%, 07/07/99 2,675 2,675
Trap Rock Industries, Inc. VRD RB
Series 1997 (a)
5.30%, 07/07/99 2,350 2,350
Upper Illinois River Valley Development
Authority Solid Waste Disposal RB
(Exolon - ESK Co. Project) Series 1996B
5.19%, 07/07/99 2,595 2,595
Village of Sturtevant, Wisconsin IDRB
(Andis Co. Project) Series 1996B
5.14%, 07/07/99 1,500 1,500
---------
12,820
---------
BANKING - UNITED KINGDOM -- 0.7% (d)
City of Gary, Indiana Taxable Adjustable
Rate Economic Development
Revenue Refunding Bonds (The Miller
Partnership, L.P. Project) Series 1996B
5.14%, 07/07/99 1,680 1,680
---------
SECURITIES BROKER-DEALER -- 2.7% (a) (c)
Lehman Commercial Paper, Inc.
5.17%, 07/01/99 280 280
5.18%, 07/01/99 280 280
5.27%, 07/20/99 6,000 6,000
---------
6,560
---------
TOTAL VARIABLE RATE OBLIGATIONS
(COST $21,060) 21,060
---------
TOTAL INVESTMENTS -- 99.5%
(COST $244,167) 244,167
---------
OTHER ASSETS AND LIABILITIES -- 0.5%
Other assets 3,481
Liabilities (2,224)
---------
1,257
---------
TOTAL NET ASSETS-- 100.0% $ 245,424
=========
See accompanying Notes to Schedule of Investments and Notes to Financial
Statements.
8
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
(All dollar amounts are in thousands unless otherwise noted)
Yields shown are effective yields at the time of purchase, except for variable
rate obligations, which are described below. Yields for each type of security
are stated according to the market convention for that security type. For each
security, cost (for financial reporting and federal income tax purposes) and
carrying value are the same.
(a) Certain securities purchased by the 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
Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab Retirement
Money Fund(REGISTRATION MARK). Any resale by the fund must be in an exempt
transaction, normally to a qualified institutional buyer. At June 30, 1999, the
aggregate value of private placement securities held by the Schwab Institutional
Advantage Money Fund(REGISTRATION MARK) and the Schwab Retirement Money
Fund(REGISTRATION MARK) was $213,885 and $111,627 which represented 49.07% and
45.48% of net assets. Of this total, $202,085 and $105,067 or 46.36% and 42.81%
of net assets of Schwab Institutional Advantage Money Fund(REGISTRATION MARK)
and the Schwab Retirement Money Fund(REGISTRATION MARK), respectively, were
determined by the investment adviser to be liquid in accordance with procedures
adopted by the Board of Trustees.
(b) 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 within 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. All
dates shown are considered the maturity date for financial reporting purposes.
For variable rate securities without demand features, the next interest reset
date is shown.
(c) 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 typically would bear the expense of all registrations at no
cost to the fund. At June 30, 1999, the aggregate value of the restricted
securities held by the Schwab Institutional Advantage Money Fund(REGISTRATION
MARK) and the Schwab Retirement Money Fund(REGISTRATION MARK) was $11,800 and
$6,560, which represented 2.71% and 2.67% 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.
(d) Security has one or more third party credit enhancements.
(e) Asset-backed securities -- backed by underlying assets and categorized by
industry.
Abbreviations
IDA Industrial Development Authority
IDRB Industrial Development Revenue Bond
RB Revenue Bond
VRD Variable Rate Demand
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (in thousands)
June 30, 1999 (unaudited)
<TABLE>
<CAPTION>
Schwab
Institutional Schwab
Advantage Retirement
Money Fund(REGISTRATION MARK) Money Fund(REGISTRATION MARK)
---------------------------- -----------------------------
<S> <C> <C>
ASSETS
Investments, at value (Cost: $436,374 and $244,167,
respectively) $436,374 $244,167
Receivables:
Fund shares sold 2,512 2,540
Interest 2,184 912
Prepaid expenses 14 29
-------- --------
Total assets 441,084 247,648
-------- --------
LIABILITIES
Payables:
Dividends 835 433
Fund shares redeemed 4,184 1,730
Investment advisory and administration fees 18 18
Transfer agency and shareholder service fees 21 12
Other liabilities 123 31
-------- --------
Total liabilities 5,181 2,224
-------- --------
Net assets applicable to outstanding shares $435,903 $245,424
======== ========
NET ASSETS CONSIST OF:
Paid-in capital $435,906 $245,425
Accumulated net realized loss on investments sold (3) (1)
-------- --------
$435,903 $245,424
======== ========
PRICING OF SHARES
Outstanding shares, $0.00001 par value
(unlimited shares authorized) 435,964 245,482
Net asset value, offering and redemption price per share $1.00 $1.00
</TABLE>
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (in thousands)
For the six months ended June 30, 1999 (unaudited)
<TABLE>
<CAPTION>
Schwab
Institutional Schwab
Advantage Retirement
Money Fund(REGISTRATION MARK) Money Fund(REGISTRATION MARK)
---------------------------- -----------------------------
<S> <C> <C>
Interest income $10,590 $5,730
------- ------
Expenses:
Investment advisory and administration fees 901 487
Transfer agency and shareholder service fees 522 281
Custodian and portfolio accounting fees 82 56
Registration fees 48 12
Professional fees 9 7
Shareholder reports 4 6
Trustees' fees 6 6
Insurance and other expenses 6 5
------- ------
1,578 860
------- ------
Less: expenses reduced (see Note 4) (534) (45)
------- ------
Total expenses incurred by fund 1,044 815
------- ------
Net investment income 9,546 4,915
------- ------
Increase in net assets resulting from operations $ 9,546 $4,915
======= ======
</TABLE>
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
<TABLE>
<CAPTION>
Schwab
Institutional Schwab
Advantage Retirement
Money Fund(REGISTRATION MARK) Money Fund(REGISTRATION MARK)
----------------------------- -----------------------------
Six months Six months
ended Year ended ended Year ended
June 30, 1999 December 31, June 30, 1999 December 31,
(unaudited) 1998 (unaudited) 1998
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Operations:
Net investment income $ 9,546 $ 16,792 $ 4,915 $ 9,127
--------- --------- --------- ---------
Increase in net assets resulting
from operations 9,546 16,792 4,915 9,127
--------- --------- --------- ---------
Dividends to shareholders from
net investment income (see Note 2) (9,546) (16,838) ( 4,915) (9,172)
--------- --------- --------- ---------
Capital share transactions (at $1.00 per share):
Proceeds from shares sold 660,907 707,322 144,397 295,869
Net asset value of shares issued in
reinvestment of dividends 10,886 15,535 5,692 8,885
Less payments for shares redeemed (604,943) (629,095) (129,260) (235,017)
--------- --------- --------- ---------
Increase in net assets from
capital share transactions 66,850 93,762 20,829 69,737
--------- --------- --------- ---------
Total increase in net assets 66,850 93,716 20,829 69,692
Net Assets:
Beginning of period 369,053 275,337 224,595 154,903
--------- --------- --------- ---------
End of period $ 435,903 $ 369,053 $ 245,424 $ 224,595
========= ========= ========= =========
</TABLE>
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK)
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
1999 1 1998 1997 1996 1995 1994 2
-------- -------- -------- ------- ------- ------
<S> <C> <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 $ 1.00
-------- -------- -------- -------- ------- -------
From investment operations:
Net investment income 0.02 0.05 0.05 0.05 0.06 0.04
-------- -------- -------- -------- ------- -------
Total from investment operations 0.02 0.05 0.05 0.05 0.06 0.04
Less distributions:
Dividends from net investment income (0.02) (0.05) (0.05) (0.05) (0.06) (0.04)
-------- -------- -------- -------- ------- -------
Total distributions (0.02) (0.05) (0.05) (0.05) (0.06) (0.04)
-------- -------- -------- -------- ------- -------
NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======= =======
Total return (%) 2.29** 5.26 5.31 5.15 5.65 3.86**
RATIOS/SUPPLEMENTAL DATA (%)
- ----------------------------
Ratio of net operating expenses to average net assets 0.50* 0.50 0.50 0.50 0.53 0.55*
Reductions reflected in above expense ratio 0.26* 0.29 0.34 0.38 0.37 0.37*
Ratio of net investment income to
average net assets 4.57* 5.12 5.20 5.03 5.50 4.04*
Net assets, end of period (000s) $435,903 $369,053 $275,337 $139,021 $80,746 $60,088
<FN>
- --------------
1 For the six months ended June 30, 1999 (unaudited).
2 For the period January 4, 1994 (commencement of operations)
to December 31, 1994.
* Annualized.
** Not annualized.
</FN>
</TABLE>
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK)
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
1999 1 1998 1997 1996 1995 1994 2
-------- -------- -------- ------- ------- ------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------- -------
From investment operations:
Net investment income 0.02 0.05 0.05 0.05 0.05 0.03
-------- -------- -------- -------- ------- -------
Total from investment operations 0.02 0.05 0.05 0.05 0.05 0.03
Less distributions:
Dividends from net investment income (0.02) (0.05) (0.05) (0.05) (0.05) (0.03)
-------- -------- -------- -------- ------- -------
Total distributions (0.02) (0.05) (0.05) (0.05) (0.05) (0.03)
-------- -------- -------- -------- ------- -------
NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======= =======
Total return (%) 2.19** 5.03 5.07 4.93 5.43 3.29**
Ratios/Supplemental Data (%)
- ------------------------------------------
Ratio of net operating expenses to average
net assets 0.72* 0.73 0.73 0.73 0.73 0.73*
Reductions reflected in above expense ratio 0.04* 0.07 0.11 0.15 0.19 0.32*
Ratio of net investment income to
average net assets 4.37* 4.88 4.96 4.83 5.28 4.04*
Net assets, end of period (000s) $245,424 $224,595 $154,903 $136,319 $98,992 $31,415
<FN>
- --------------
1 For the six months ended June 30, 1999 (unaudited).
2 For the period March 2, 1994 (commencement of operations) to December
31, 1994.
* Annualized.
** Not annualized.
</FN>
</TABLE>
SEE ACCOMPANY NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1999 (unaudited)
(All dollar amounts are in thousands unless otherwise noted)
1. DESCRIPTION OF THE FUNDS
The Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab
Retirement Money Fund(REGISTRATION MARK) (the "funds") are a series of The
Charles Schwab Family of Funds (the "Trust"), an open-end investment management
company organized as a Massachusetts business trust on October 20, 1989, and
registered under the Investment Company Act of 1940 (the "Act"), as amended.
In addition to the funds, the Trust also offers the Schwab Money Market Fund,
Schwab Government Money Fund, Schwab U.S. Treasury Money Fund, 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, Schwab Value
Advantage 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 and accretion of discount on investments. Realized gains and losses from
security transactions are determined on an identified cost basis.
REPURCHASE AGREEMENTS -- Repurchase agreements are fully collateralized by U.S.
government securities. All collateral is held by the funds' custodian, except in
the case of a tri-party agreement, under which the collateral is held by an
agent bank. The collateral is monitored daily to ensure that its market value at
least equals the repurchase price under the agreement.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The funds declare a daily
dividend, equal to its net investment income for that day, payable monthly. Net
realized capital gains, if any, are normally distributed annually.
EXPENSES -- Expenses arising in connection with the funds are charged directly
to the funds. Expenses common to all series of the Trust generally are allocated
to each series in proportion to their relative net assets.
FEDERAL INCOME TAXES -- It is the funds' policy to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all net investment income and realized net capital gains, if any, to
shareholders. Therefore, no federal income tax provision is required. The funds
are considered a separate entity for tax purposes.
15
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At December 31, 1998, the unused capital loss carryforward, for federal income
tax purposes with expiration dates, were as follows:
<TABLE>
<CAPTION>
Schwab
Expiring in: Institutional Advantage Schwab
MoneyFund(REGISTRATION MARK) Retirement Money Fund(REGISTRATION MARK)
- ----------------------------- ---------------------------- ----------------------------------------
<S> <C> <C>
12/31/04 $3 $1
-- --
Total capital loss carryforward $3 $1
-- --
-- --
</TABLE>
3. Transactions with affiliates
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS -- The Trust has an investment
advisory and administration agreements with Charles Schwab Investment
Management, Inc. (the "investment adviser"). For advisory services and
facilities furnished, the funds pays an annual fee, payable monthly, of 0.38% on
the first $1 billion of average daily net assets, 0.35% on such assets in excess
of $1 billion to $10 billion, 0.32% on such assets in excess of $10 billion to
$20 billion, and 0.30% on such assets in excess of $20 billion. Prior to May 1,
1999 the funds paid an annual fee, payable monthly, of 0.46% on the first $1
billion of average daily net assets, 0.45% on the next $2 billion, 0.40% on the
next $7 billion, 0.37% on the next $10 billion, and 0.34% on such net assets in
excess of $20 billion. The investment adviser has reduced a portion of its fee
for the six months ended June 30, 1999 (see Note 4).
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The Trust has transfer
agency and shareholder service agreements with Charles Schwab & Co., Inc.
("Schwab"). For services provided under these agreements, Schwab receives a
combined annual fee, payable monthly, of 0.25% of average daily net assets.
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
six months ended June 30, 1999, the Trust made no direct payments to its
officers or trustees who are "interested persons" within the meaning of the Act,
as amended. The funds incurred fees of $12 related to the Trust's unaffiliated
trustees.
4. EXPENSES REDUCED BY THE INVESTMENT ADVISER AND SCHWAB
The investment adviser and Schwab guarantee that, through at least April 30,
2000, the Schwab Institutional Advantage MoneyFund(REGISTRATION MARK) and Schwab
Retirement Money Fund(REGISTRATION MARK) total operating expenses will not
exceed 0.50% and 0.73%, respectfully of the funds' average daily net assets,
after reductions. For the purpose of this guarantee, operating expenses do not
include interest expenses, extraordinary expenses and taxes.
For the six months ended June 30, 1999, the total of such fees reduced by the
investment adviser was $534 and $45 for the Schwab Institutional Advantage
MoneyFund(REGISTRATION MARK) and Schwab Retirement Money Fund(REGISTRATION
MARK), respectively.
16
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
SCHWABFUNDS(REGISTRATION MARK)
[GRAPHIC OMITTED]
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. (0099-0837) MKT3860-1 (6/99)
