<PAGE>
SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
VALUE ADVANTAGE
MONEY FUND-REGISTERED TRADEMARK-
SEMIANNUAL REPORT
AND
AN IMPORTANT NOTICE REGARDING
DELIVERY OF SHAREHOLDER
DOCUMENTS
June 30, 2000
<PAGE>
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission permits mutual funds to deliver only one
copy of shareholder documents, including prospectuses and shareholder reports,
to fund investors with multiple accounts at the same residential or post office
box address. This practice is commonly called "householding" and is intended to
eliminate duplicate mailings of shareholder documents.
Mailings of your SchwabFunds-Registered Trademark- shareholder documents may be
householded indefinitely unless you instruct us otherwise.
ADDITIONAL COPIES OF SHAREHOLDER DOCUMENTS
ALL SCHWABFUNDS PROSPECTUSES AND SHAREHOLDER REPORTS ARE AVAILABLE FREE OF
CHARGE AND MAY BE REQUESTED AT ANY TIME BY CALLING SCHWAB AS INDICATED BELOW.
SCHWABFUNDS PROSPECTUSES ARE ALSO AVAILABLE ON OUR WEB SITE AT
WWW.SCHWAB.COM/SCHWABFUNDS.
NOTIFICATION INSTRUCTIONS
If you would prefer that your SchwabFunds mailings not be householded, please
contact:
- SCHWAB SIGNATURE SERVICES-TM- CLIENTS: Schwab Signature Services.
- INVESTMENT MANAGER CLIENTS: Schwab at 800-515-2157, or your investment
manager.
- ALL OTHER CLIENTS: Schwab at 800-435-4000.
Your instructions that householding not apply to your accounts holding
SchwabFunds will be effective within 30 days of receipt by Schwab.
<PAGE>
SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
VALUE ADVANTAGE
MONEY FUND-REGISTERED TRADEMARK-
Semiannual Report
June 30, 2000
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND-REGISTERED TRADEMARK-
We're pleased to bring you this semiannual report for the Schwab Value Advantage
Money Fund-Investor Shares (the fund) for the six-month period ended June 30,
2000. During the reporting period, the fund continued to provide investors with
high current yields while offering the liquidity and stability traditionally
associated with money market funds.
Schwab's Value Advantage Investments-Registered Trademark-, which include the
fund as well as three tax-advantaged alternatives, are designed to provide
higher yields than Sweep Investments-TM-. This is because Value Advantage
Investments have higher minimum initial and ongoing balance requirements than
Sweep Investments. These requirements, along with policies designed to
discourage frequent transactions, can help minimize fund expenses--which in turn
can mean higher returns for investors. Please remember that unlike Sweep
Investments, Value Advantage Investments cannot be linked to your Schwab account
to serve as your primary sweep fund. You'll find more information on Schwab
Money Funds on page 3 of this report.
Please remember that an investment in the fund is neither insured nor guaranteed
by the Federal Deposit Insurance Corporation (FDIC) or any other government
agency and, although the fund seeks to preserve the value of your investment at
$1 per share, it is possible to lose money by investing in the fund.
CONTENTS
<TABLE>
<S> <C>
---------------------------------------------
A Message from the Chairman 1
---------------------------------------------
What Money Fund Investors Should Know 2
---------------------------------------------
Market Overview 5
---------------------------------------------
Portfolio Management 9
---------------------------------------------
Fund Performance and Portfolio
Composition 10
---------------------------------------------
Fund Discussion 11
---------------------------------------------
Glossary of Terms 12
---------------------------------------------
Portfolio Highlights 13
---------------------------------------------
Financial Statements and Notes 14
---------------------------------------------
</TABLE>
<PAGE>
A MESSAGE FROM THE CHAIRMAN
[PHOTO]
Dear Shareholder,
During the last few years, the benefits of investing have been readily apparent,
while the risks have been somewhat less obvious. In recent months, however,
investors have been subject to larger swings in the market, even within the span
of a single day.
Given this divergent environment, the message is clear: Expect volatility,
maintain a long-term view and ensure your investment strategy is appropriate for
your risk tolerance and time horizon. One way to lessen the impact of volatility
on your portfolio is to adequately diversify your investments, both within and
across asset sectors, namely cash equivalents, bonds and stocks. With its broad
range of funds, SchwabFunds-Registered Trademark- can help form the foundation
of a diversified investment plan. Our asset allocation funds can even provide
diversification within a single fund.
We recently added four new sector funds, the Schwab Focus Funds, to our
SchwabFunds offering. Each invests in a group of industries within a specific
sector--Communications, Financial Services, Healthcare and Technology--and can
be an effective complement to individual stock investing. Each Focus Fund
concentrates its investing in companies in a specific sector and may involve a
greater degree of risk than an investment in mutual funds with greater
diversification. For more information on the Schwab Focus Funds, please call
800-435-4000 and request a prospectus. The prospectus contains more information
on fund fees and expenses as well as risks. Please read it carefully before
investing.
As a leader in online brokerage, we recognize the value of the web as a means of
communicating timely, relevant information to investors. Regular updates on all
of the SchwabFunds, including performance data, are available on our Web site at
www.schwab.com/schwabfunds. We encourage you to take advantage of this valuable
resource.
Thank you for your investment in SchwabFunds. For our part, we at SchwabFunds
will do everything we can to warrant the trust you have placed in us.
Sincerely,
/s/ Charles R. Schwab
Charles R. Schwab
June 30, 2000
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, money market securities or
funds, 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. 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. 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 convenient access to
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 brokerage account, consider an account that has a "sweep"
feature. Accounts with this feature automatically "sweep" uninvested cash 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 in your account. This convenience
may be well worth the small additional cost.
LARGER CASH BALANCES: You may earn higher yields 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. These funds
typically have higher minimum balance requirements and transaction policies
designed to minimize fund operating expenses, and 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 money funds seek to preserve the value of your investment at
$1 per share, it is possible to lose money by investing in a money fund.
(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>
SCHWAB MONEY FUNDS
Schwab offers two types of money funds--Sweep Investments-TM- and Value
Advantage Investments-Registered Trademark-. Both include funds that offer
taxable and tax-free income. 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 portfolio.
SWEEP INVESTMENTS are designed for your cash balances requiring frequent access.
These funds can be linked to your Schwab account to serve as a primary sweep
money fund. That means uninvested cash in your Schwab brokerage account is
automatically swept in and out of the fund, based on transactions in your
account and the terms and conditions of your account agreement.
VALUE ADVANTAGE INVESTMENTS are designed for your larger cash balances that
don't require frequent access. Value Advantage Investments have higher minimum
initial and ongoing balance requirements than Sweep Investments. These
requirements, along with policies designed to discourage frequent transactions,
can help minimize fund expenses--which in turn can mean higher returns for
investors. Value Advantage Investments cannot be linked to your Schwab account
to serve as your primary sweep fund.
Schwab offers a variety of 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 TAXABLE MONEY FUNDS
SCHWAB MONEY MARKET FUND A high-quality money fund for investors interested in
the potential for high money market yields.
SCHWAB VALUE ADVANTAGE MONEY FUND-REGISTERED TRADEMARK- A high-quality money
fund designed for larger cash balances that don't require frequent access.
SCHWAB GOVERNMENT MONEY FUND Designed for investors who want current money
market yields along with the added margin of safety provided by a portfolio of
U.S. government securities and repurchase agreements.
SCHWAB U.S. TREASURY MONEY FUND Of all the money funds offered by Schwab, this
one seeks to provide the highest degree of safety. The fund invests exclusively
in U.S. Treasury securities and other investments that are backed by the full
faith and credit of the U.S. government. What's more, income from the fund is
generally free from state and local income taxes.
SCHWAB MUNICIPAL MONEY FUNDS(1)
SCHWAB MUNICIPAL MONEY FUND A high-quality municipal money fund that seeks to
provide income that is free from federal income tax.
SCHWAB STATE-SPECIFIC MUNICIPAL MONEY FUNDS Each of these funds is designed for
taxpayers of a particular state and seeks to provide income that is exempt from
federal, state and, in some cases, local income taxes. The Schwab Florida
Municipal Money Fund also seeks to have its shares exempt from the Florida
Intangible Tax.
- 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
(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.
3
<PAGE>
WHAT MONEY FUND INVESTORS SHOULD KNOW (continued)
The table below presents the various money fund choices available at Schwab.
<TABLE>
<CAPTION>
VALUE ADVANTAGE
TAXABLE MONEY FUNDS SWEEP INVESTMENTS-TM- INVESTMENTS-REGISTERED TRADEMARK-
<S> <C> <C>
--------------------------------------------------------------------------------
Schwab Money Market
Fund -
--------------------------------------------------------------------------------
Schwab Value
Advantage Money
Fund--Investor Shares -
--------------------------------------------------------------------------------
Schwab Government
Money Fund -
--------------------------------------------------------------------------------
Schwab U.S. Treasury
Money Fund -
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY FUNDS
<S> <C> <C>
-------------------------------------------------------------------
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 -
-------------------------------------------------------------------
</TABLE>
If you would like more information on any of these funds, please call
800-435-4000 and request a prospectus. The prospectus contains more information
on fund fees and expenses as well as risks. Please read it carefully before
investing.
WE MAKE IT EASY TO INVEST
We make it easy and convenient to invest in SchwabFunds-Registered Trademark-.
You can invest through our Web site at www.schwab.com or through our automated
touch-tone telephone service, TeleBroker by calling 800-272-4922. Or, you can
visit any of our more than 350 nationwide branches.
Schwab MoneyLink-Registered Trademark- lets you transfer money electronically,
safely and easily between your Schwab account and your accounts at other
financial institutions--at regularly scheduled intervals or upon request. For
more information on MoneyLink, call 800-435-4000.
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
current information about our investment philosophy and funds, including
performance updates, can be found at our Web site: www.schwab.com/schwabfunds
4
<PAGE>
MARKET OVERVIEW
U.S. ECONOMIC GROWTH REMAINS STRONG
April 2000 marked the beginning of the tenth year of the current economic
expansion, the longest in U.S. history. Gross Domestic Product (GDP) grew at a
real (inflation adjusted) rate of 4.6% during 1999--the fourth consecutive year
at 4% or more--and 5.0% during the first half of 2000. These rates are
considered by most economists and the Federal Reserve (Fed) to be in excess of
what the economy can absorb without experiencing inflationary pressures--perhaps
3.5% to 4.0%. High levels of consumer spending fueled by rising incomes,
personal wealth and consumer confidence, as well as strong business capital
investment and a healthy housing sector, have been the principal factors driving
this lengthy expansion.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REAL GROSS DOMESTIC PRODUCT
QUARTERLY PERCENTAGE CHANGE (ANNUALIZED RATE)
<S> <C>
Q1 1990 5.00%
Q2 1990 1.00%
Q3 1990 -0.60%
Q4 1990 -3.00%
Q1 1991 -1.70%
Q2 1991 2.60%
Q3 1991 1.30%
Q4 1991 2.50%
Q1 1992 4.30%
Q2 1992 4.00%
Q3 1992 3.10%
Q4 1992 5.20%
Q1 1993 -0.70%
Q2 1993 2.10%
Q3 1993 1.50%
Q4 1993 6.00%
Q1 1994 3.60%
Q2 1994 5.70%
Q3 1994 2.20%
Q4 1994 5.10%
Q1 1995 1.50%
Q2 1995 0.80%
Q3 1995 3.20%
Q4 1995 3.30%
Q1 1996 2.90%
Q2 1996 6.90%
Q3 1996 2.20%
Q4 1996 4.90%
Q1 1997 4.90%
Q2 1997 5.10%
Q3 1997 4.00%
Q4 1997 3.10%
Q1 1998 6.70%
Q2 1998 2.10%
Q3 1998 3.80%
Q4 1998 5.90%
Q1 1999 3.70%
Q2 1999 1.90%
Q3 1999 5.70%
Q4 1999 7.30%
Q1 2000 4.80%
Q2 2000 5.20%
Source: BLOOMBERG L.P.
</TABLE>
Looking ahead, the availability of scarce labor resources and domestic
consumers' responses to continued market volatility may be key determinants of
whether the economy continues on its current course or softens in the second
half of 2000. The Fed has raised the federal funds rate a total of 1.75% since
June 1999.
Although preliminary signs may indicate a second half slowdown in the vigorous
growth rate of the economy, opinions vary with regard to future federal funds
rate increases. Most economists do agree, however, that the U.S. economy appears
poised for continued strong growth in 2000, albeit at lower rates than
experienced in the first half.
UNEMPLOYMENT CONTINUES TO BE VERY LOW
As employment growth continues to exceed population growth, the unemployment
rate remains very low. In fact, the 3.9% rate for April 2000 represented the
lowest level in 30 years. Labor markets continue to be extremely tight in many
areas of the country, reflecting a shrinking pool of available workers.
Another closely watched metric, the labor force participation rate, which
measures the employment population as a percentage of the total population, is
at a post-war high. While growth in the labor force has recently declined, the
Fed has expressed its concern that continued tight labor markets and the related
increases in wages may put further pressure on manufacturers and service
providers to raise prices.
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 6.8%
Feb-94 6.6%
Mar-94 6.5%
Apr-94 6.4%
May-94 6.1%
Jun-94 6.1%
Jul-94 6.3%
Aug-94 6.0%
Sep-94 5.8%
Oct-94 5.8%
Nov-94 5.6%
Dec-94 5.5%
Jan-95 5.6%
Feb-95 5.4%
Mar-95 5.3%
Apr-95 5.8%
May-95 5.8%
Jun-95 5.6%
Jul-95 5.6%
Aug-95 5.7%
Sep-95 5.6%
Oct-95 5.5%
Nov-95 5.7%
Dec-95 5.6%
Jan-96 5.6%
Feb-96 5.5%
Mar-96 5.6%
Apr-96 5.5%
May-96 5.6%
Jun-96 5.3%
Jul-96 5.5%
Aug-96 5.1%
Sep-96 5.2%
Oct-96 5.2%
Nov-96 5.3%
Dec-96 5.4%
Jan-97 5.3%
Feb-97 5.3%
Mar-97 5.1%
Apr-97 5.0%
May-97 4.7%
Jun-97 5.0%
Jul-97 4.7%
Aug-97 4.9%
Sep-97 4.7%
Oct-97 4.7%
Nov-97 4.6%
Dec-97 4.7%
Jan-98 4.5%
Feb-98 4.6%
Mar-98 4.6%
Apr-98 4.3%
May-98 4.3%
Jun-98 4.5%
Jul-98 4.5%
Aug-98 4.5%
Sep-98 4.5%
Oct-98 4.5%
Nov-98 4.4%
Dec-98 4.3%
Jan-99 4.3%
Feb-99 4.4%
Mar-99 4.2%
Apr-99 4.3%
May-99 4.2%
Jun-99 4.3%
Jul-99 4.3%
Aug-99 4.2%
Sep-99 4.2%
Oct-99 4.1%
Nov-99 4.1%
Dec-99 4.1%
Jan-00 4.0%
Feb-00 4.1%
Mar-00 4.1%
Apr-00 3.9%
May-00 4.1%
Jun-00 4.0%
Source: BLOOMBERG L.P.
</TABLE>
5
<PAGE>
MARKET OVERVIEW (continued)
INFLATION REMAINS CONTAINED, BUT CONCERNS EMERGE
Virtually all measures of price inflation exhibited upward trends during the
reporting period. The Consumer Price Index (CPI) rose 3.7% for the year ended
June 2000. CPI's core rate (which excludes the more volatile food and energy
components) trended up to 2.4%. The Personal Consumption Expenditures Index, a
measure of inflation closely watched by the Fed, rose 2.6% for the same period.
The GDP price deflator, the broadest measure of inflation, indicated prices
rising at an annual rate of 2.9% during the first half of 2000.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMPLOYMENT COST INDEX CONSUMER PRICE INDEX
MEASURES OF INFLATION 12 - MONTH CHANGE (QUARTERLY) 12 - MONTH CHANGE (MONTHLY)
<S> <C> <C>
Jan-90 5.5% 5.2%
Feb-90 5.5% 5.3%
Mar-90 5.5% 5.2%
Apr-90 5.4% 4.7%
May-90 5.4% 4.4%
Jun-90 5.4% 4.7%
Jul-90 5.2% 4.8%
Aug-90 5.2% 5.6%
Sep-90 5.2% 6.2%
Oct-90 4.9% 6.3%
Nov-90 4.9% 6.3%
Dec-90 4.9% 6.1%
Jan-91 4.6% 5.7%
Feb-91 4.6% 5.3%
Mar-91 4.6% 4.9%
Apr-91 4.6% 4.9%
May-91 4.6% 5.0%
Jun-91 4.6% 4.7%
Jul-91 4.3% 4.4%
Aug-91 4.3% 3.8%
Sep-91 4.3% 3.4%
Oct-91 4.3% 2.9%
Nov-91 4.3% 3.0%
Dec-91 4.3% 3.1%
Jan-92 4.0% 2.6%
Feb-92 4.0% 2.8%
Mar-92 4.0% 3.2%
Apr-92 3.6% 3.2%
May-92 3.6% 3.0%
Jun-92 3.6% 3.1%
Jul-92 3.5% 3.2%
Aug-92 3.5% 3.1%
Sep-92 3.5% 3.0%
Oct-92 3.5% 3.2%
Nov-92 3.5% 3.0%
Dec-92 3.5% 2.9%
Jan-93 3.5% 3.3%
Feb-93 3.5% 3.2%
Mar-93 3.5% 3.1%
Apr-93 3.6% 3.2%
May-93 3.6% 3.2%
Jun-93 3.6% 3.0%
Jul-93 3.6% 2.8%
Aug-93 3.6% 2.8%
Sep-93 3.6% 2.7%
Oct-93 3.5% 2.8%
Nov-93 3.5% 2.7%
Dec-93 3.5% 2.7%
Jan-94 3.2% 2.5%
Feb-94 3.2% 2.5%
Mar-94 3.2% 2.5%
Apr-94 3.2% 2.4%
May-94 3.2% 2.3%
Jun-94 3.2% 2.5%
Jul-94 3.2% 2.8%
Aug-94 3.2% 2.9%
Sep-94 3.2% 3.0%
Oct-94 3.0% 2.6%
Nov-94 3.0% 2.7%
Dec-94 3.0% 2.7%
Jan-95 2.9% 2.8%
Feb-95 2.9% 2.9%
Mar-95 2.9% 2.9%
Apr-95 2.9% 3.1%
May-95 2.9% 3.2%
Jun-95 2.9% 3.0%
Jul-95 2.7% 2.8%
Aug-95 2.7% 2.6%
Sep-95 2.7% 2.5%
Oct-95 2.7% 2.8%
Nov-95 2.7% 2.6%
Dec-95 2.7% 2.5%
Jan-96 2.8% 2.7%
Feb-96 2.8% 2.7%
Mar-96 2.8% 2.8%
Apr-96 2.9% 2.9%
May-96 2.9% 2.9%
Jun-96 2.9% 2.8%
Jul-96 2.8% 3.0%
Aug-96 2.8% 2.9%
Sep-96 2.8% 3.0%
Oct-96 2.9% 3.0%
Nov-96 2.9% 3.3%
Dec-96 2.9% 3.3%
Jan-97 2.9% 3.0%
Feb-97 2.9% 3.0%
Mar-97 2.9% 2.8%
Apr-97 2.8% 2.5%
May-97 2.8% 2.2%
Jun-97 2.8% 2.3%
Jul-97 3.0% 2.2%
Aug-97 3.0% 2.2%
Sep-97 3.0% 2.2%
Oct-97 3.3% 2.1%
Nov-97 3.3% 1.8%
Dec-97 3.3% 1.7%
Jan-98 3.3% 1.6%
Feb-98 3.3% 1.4%
Mar-98 3.3% 1.4%
Apr-98 3.5% 1.4%
May-98 3.5% 1.7%
Jun-98 3.5% 1.7%
Jul-98 3.7% 1.7%
Aug-98 3.7% 1.6%
Sep-98 3.7% 1.5%
Oct-98 3.4% 1.5%
Nov-98 3.4% 1.5%
Dec-98 3.4% 1.6%
Jan-99 3.0% 1.7%
Feb-99 3.0% 1.6%
Mar-99 3.0% 1.7%
Apr-99 3.2% 2.3%
May-99 3.2% 2.1%
Jun-99 3.2% 2.0%
Jul-99 3.1% 2.1%
Aug-99 3.1% 2.3%
Sep-99 3.1% 2.6%
Oct-99 3.4% 2.6%
Nov-99 3.4% 2.6%
Dec-99 3.4% 2.7%
Jan-00 4.3% 2.7%
Feb-00 4.3% 3.2%
Mar-00 4.3% 3.7%
Apr-00 4.4% 3.0%
May-00 4.4% 3.1%
Jun-00 4.4% 3.7%
Source: BLOOMBERG L.P. AND BUREAU OF LABOR STATISTICS
</TABLE>
Wage inflation also exhibited a marked upward trend during the reporting period,
as indicated by the Employment Cost Index (ECI). The ECI which measures the cost
of employing workers, including both wages and benefits, rose 4.4% for the year
ended June 2000.
Although these rates of inflation and employment cost may not be alarmingly high
by historical standards, the Fed has demonstrated its resolve to keep inflation
at bay in both its communications and its actions (six federal funds rate
increases since June 1999).
The Fed also has expressed concern that if labor markets continue to tighten,
increases in wages may outpace productivity growth and place additional upward
pressure on prices. Productivity growth becomes particularly critical in this
environment as it enables companies to pay higher wages without raising prices.
Non-farm productivity grew 3.0% in 1999 and at a healthy 3.6% rate in the first
half of 2000.
ASSET CLASS PERFORMANCE--SMALL-CAPS AND TECH STOCKS ARE VOLATILE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ASSET CLASS PERFORMANCE LEHMAN RUSSELL 2000
AGGREGATE MSCI-EAFE SMALL-CAP S&P 500
BOND INDEX INDEX INDEX INDEX
<S> <C> <C> <C> <C>
1/7/00 -0.06% -4.56% -3.23% -1.89%
1/14/00 -0.52% -2.21% 0.60% -0.28%
1/21/00 -0.68% -4.39% 5.82% -1.90%
1/28/00 -0.01% -4.83% 0.05% -7.42%
2/4/00 0.12% -2.85% 4.21% -2.99%
2/11/00 -0.17% -2.30% 6.54% -5.53%
2/18/00 0.37% -3.76% 8.26% -8.32%
2/25/00 1.02% -3.01% 10.45% -9.19%
3/3/00 1.20% -0.97% 18.72% -3.92%
3/10/00 1.00% -0.99% 19.84% -4.88%
3/17/00 1.69% -2.17% 14.09% -0.15%
3/24/00 1.57% -0.25% 14.01% 4.14%
3/31/00 2.20% -0.40% 7.09% 2.27%
4/7/00 3.02% -1.40% 7.88% 3.48%
4/14/00 2.95% -4.85% -9.80% -7.42%
4/21/00 2.85% -5.64% -4.23% -2.10%
4/28/00 1.90% -5.73% 0.64% -0.81%
5/5/00 0.47% -6.12% 1.98% -2.16%
5/12/00 0.34% -7.08% -2.33% -2.95%
5/19/00 0.54% -10.41% -4.56% -3.91%
5/26/00 1.64% -9.93% -8.97% -5.89%
6/2/00 2.83% -3.95% 2.11% 1.04%
6/9/00 3.15% -4.10% 4.16% -0.35%
6/16/00 4.02% -4.46% 2.37% 0.17%
6/23/00 3.05% -5.35% 1.75% -1.40%
6/30/00 3.99% -4.06% 3.04% -0.42%
</TABLE>
COMPILED BY CHARLES SCHWAB & CO., INC.
As shown on the chart above, equity valuations, and particularly those of
small-cap and technology stocks, exhibited extreme volatility during the
reporting period.
The price/earnings (P/E) ratio for the NASDAQ 100 Index fell by 33% in just 14
trading days in March and
6
<PAGE>
April. Remarkably, it still remained at levels above 100 even after this
precipitous decline.
Small-cap stocks, as represented by the Russell 2000 Index, achieved a total
return of 3.04% for the six-month reporting period. Large cap stocks, as
represented by the S&P 500 Index, produced a negative return of -0.42% for the
same period.
Dampened by relatively weak foreign currencies, international stocks, as
represented by the MSCI EAFE Index, achieved a negative return of -4.06% for the
reporting period. Fixed income returns, on the other hand, were generally
positive for the reporting period, reflecting a decline in intermediate and
long-term interest rates. Bond returns, as represented by the Lehman Brothers
Aggregate Bond Index, were 3.99% for the six-month reporting period.
TREASURY BOND YIELDS--THE YIELD CURVE INVERTS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
10-YEAR AND FIVE-YEAR TREASURY BOND YIELDS 10-YEAR TREASURY BOND YIELD FIVE-YEAR TREASURY NOTE YIELD
<S> <C> <C>
1/7/00 6.52% 6.41%
1/14/00 6.68% 6.58%
1/21/00 6.77% 6.63%
1/28/00 6.66% 6.66%
2/4/00 6.55% 6.65%
2/11/00 6.60% 6.70%
2/18/00 6.49% 6.68%
2/25/00 6.33% 6.47%
3/3/00 6.39% 6.59%
3/10/00 6.38% 6.60%
3/17/00 6.19% 6.45%
3/24/00 6.19% 6.50%
3/31/00 6.00% 6.31%
4/7/00 5.58% 6.18%
4/14/00 5.58% 6.11%
4/21/00 5.99% 6.24%
4/28/00 6.21% 6.54%
5/5/00 6.51% 6.76%
5/12/00 6.51% 6.77%
5/19/00 6.49% 6.70%
5/26/00 6.33% 6.57%
6/2/00 6.15% 6.37%
6/9/00 6.13% 6.36%
6/16/00 5.97% 6.18%
6/23/00 6.19% 6.37%
6/30/00 6.03% 6.19%
Source: BLOOMBERG L.P.
</TABLE>
Treasury bond yields exhibited an unusual pattern during the reporting period.
Yields on ten and 30-year treasury securities typically exceed those of
five-year securities to compensate investors for the additional interest rate
risk associated with longer duration securities. As shown in the graph above,
however, this normal relationship reversed in January resulting in what is
referred to as a negative yield curve.
This negative yield curve is a result of the accumulating budget surpluses,
which are allowing the federal government to downsize its debt. The Treasury
Department announced earlier this year that it plans to buy back $30 billion in
debt in 2000 starting with longer-dated maturities since those payments carry
the steepest interest payment. The anticipated reduction in supply resulting
from this buyback program, as well as scaled back issuance, bid up the price of
the longer-term securities and correspondingly reduced their yields during the
reporting period.
7
<PAGE>
MARKET OVERVIEW (continued)
SHORT-TERM INTEREST RATE ON THE RISE
Short-term interest rates increased during the reporting period, due to a
combination of a robust U.S. economy and the Fed's actions to increase the
federal funds rate from 5.5% at the beginning of the reporting period (January
1, 2000) to 6.5% by the end of the reporting period (June 30, 2000).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
90-DAY COMMERCIAL PAPER THREE-MONTH 90-DAY
AND THREE-MONTH TREASURY BILL YIELDS TREASURY BILL COMMERCIAL PAPER
<S> <C> <C>
1/7/00 5.38% 5.66%
1/14/00 5.40% 5.71%
1/21/00 5.46% 5.77%
1/28/00 5.62% 5.79%
2/4/00 5.66% 5.85%
2/11/00 5.63% 5.86%
2/18/00 5.75% 5.86%
2/25/00 5.77% 5.88%
3/3/00 5.82% 5.89%
3/10/00 5.89% 5.91%
3/17/00 5.87% 6.00%
3/24/00 5.90% 6.05%
3/31/00 5.87% 6.09%
4/7/00 5.89% 6.09%
4/14/00 5.78% 6.08%
4/21/00 5.80% 6.12%
4/28/00 5.83% 6.17%
5/5/00 5.97% 6.41%
5/12/00 6.13% 6.54%
5/19/00 5.87% 6.59%
5/26/00 5.83% 6.61%
6/2/00 5.87% 6.62%
6/9/00 5.91% 6.57%
6/16/00 5.83% 6.57%
6/23/00 5.84% 6.57%
6/30/00 5.85% 6.58%
Source: BLOOMBERG L.P.
</TABLE>
THIS MARKET OVERVIEW HAS BEEN PROVIDED BY THE PORTFOLIO MANAGEMENT TEAM.
8
<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.
LINDA KLINGMAN--vice president and senior portfolio manager, has managed the
Schwab Value Advantage Money Fund since its inception in 1992. Linda joined CSIM
in 1990 and was promoted to her current position in August 1996. Prior to
joining CSIM, Linda was senior money market trader with AIM Management.
9
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND-REGISTERED TRADEMARK-
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<S> <C>
------------------------------------------------------------------
Seven-Day Current Yield 6.22%
------------------------------------------------------------------
Seven-Day Effective Yield 6.41%
------------------------------------------------------------------
</TABLE>
Please remember that money market fund yields fluctuate and that past
performance is no guarantee of future results.
YIELD ADVANTAGE
The Schwab Value Advantage Money Fund offers the potential to earn higher yields
than many other money market funds. The fund is designed for cash reserves that
do not require frequent access and, as such, has minimum balance and transaction
requirements designed to keep operating expenses low. These lower expenses
generally mean higher yields for fund shareholders.
The chart at right presents weekly seven-day effective yields for the fund and
for the average taxable money fund and shows that the fund consistently
outperformed the average taxable money fund during the reporting period.
PORTFOLIO COMPOSITION
The Schwab Value Advantage Money Fund invests in high-quality short-term money
market investments issued by U.S. and foreign issuers, such as commercial paper,
including asset-backed commercial paper, certificates of deposit, variable- and
floating-rate debt securities, bank notes and repurchase agreements. The chart
at right illustrates the composition of the fund's portfolio as of June 30, 2000
and is not indicative of its holdings after that date. A complete list of the
securities in the fund's portfolio as of June 30, 2000 is provided in the
Schedule of Investments later in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SEVEN-DAY EFFECTIVE YIELDS: SCHWAB VALUE IMONEY NET, INC.'S
1/4/00 THROUGH 6/27/00 ADVANTAGE MONEY FUND MONEY FUND AVERAGE(2)
<S> <C> <C>
1/4 5.79% 5.18%
1/11 5.77% 5.29%
1/18 5.77% 5.26%
1/25 5.75% 5.23%
2/1 5.75% 5.24%
2/8 5.76% 5.25%
2/15 5.78% 5.29%
2/22 5.75% 5.30%
2/29 5.78% 5.32%
3/7 5.79% 5.31%
3/14 5.79% 5.33%
3/21 5.78% 5.37%
3/28 5.78% 5.43%
4/4 5.80% 5.50%
4/11 5.84% 5.49%
4/18 5.87% 5.52%
4/25 5.87% 5.53%
5/2 5.93% 5.54%
5/9 5.99% 5.57%
5/16 6.06% 5.63%
5/23 6.14% 5.77%
5/30 6.21% 5.85%
6/6 6.29% 5.89%
6/13 6.34% 5.94%
6/20 6.38% 5.98%
6/27 6.39% 6.02%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
Bank Notes & Bankers' Acceptances 4.2%
Commercial Paper and Other Corporate Obligations 60.0%
Repurchase Agreements 3.0%
Certificates of Deposit 25.9%
Variable Rate Obligations 6.9%
</TABLE>
(1) A portion of the fund's expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
(2) Source: iMoney Net, Inc. Average seven-day effective net yield of funds in
the first-tier retail category of taxable money funds for each week in the
six months ended 6/30/00. The weekly number of funds in the category ranged
from 297 to 308.
10
<PAGE>
FUND DISCUSSION
QUESTIONS TO THE
PORTFOLIO MANAGEMENT TEAM
Q. CAN YOU DESCRIBE THE SHORT-TERM INTEREST RATE ENVIRONMENT DURING THE
SIX-MONTH REPORTING PERIOD?
A. Short-term interest rates increased during the reporting period, resulting
from the strength of the U.S. economy and actions taken by the Federal Reserve
(Fed) to slow the pace of the economy and stem inflationary pressures. During
the reporting period, the U.S. economy continued to grow rapidly, in spite of
six separate interest rate hikes imposed by the Fed during the past year. Strong
employment and record high equity values stimulated consumer spending, a key
factor fueling the economy. As a result, gross domestic product (GDP) advanced
strongly at a 5.0% annualized growth rate as of June 30, 2000. The Fed has
expressed concern that if the present rate of growth continues, inflationary
pressures could derail nine and a half years of economic expansion.
In the first half of the reporting period, the Fed adhered to a gradual approach
to slowing down the economy by twice raising the federal funds rate by 0.25%, in
February and March 2000. When April's unemployment rate declined to 3.9%, the
lowest level in 30 years, the Fed abandoned its gradual approach and raised the
federal funds rate by 0.50% in May. This increase lifted the federal funds rate
to 6.5%, its highest level since 1991.
Q. HOW HAS THE PORTFOLIO MANAGEMENT TEAM ADJUSTED THE FUND'S PORTFOLIOS IN
RESPONSE TO CHANGES IN INTEREST RATES?
A. As discussed in the first question, the reporting period was characterized by
a sharply rising interest rate environment. During this period, we restructured
the fund's portfolio and implemented a "barbell" strategy, with most of the
portfolio in shorter-term and longer-term maturities, and fewer in the middle
range, although still within the confines of the fund's prospectus guidelines.
The benefits of this strategy are that in an increasing interest rate
environment, the proceeds from the shorter term securities can be reinvested at
the higher prevailing rates. Further, the longer-dated maturities generally
offer higher yields.
SEC regulations require that money funds maintain a dollar-weighted average
maturity (DWAM) of no more than 90 days at all times while each individual
security purchased must mature in 397 days or less. Money funds' DWAMs will vary
depending on their respective investment managers' outlook for interest rates
and will vary over time as that outlook changes. Our long-term strategy is to
maintain DWAMs that are slightly longer than those of other money funds with
similar investment objectives. We deviated from this strategy somewhat during
the reporting period by shortening the fund's DWAM to be comparable to those of
its peers. Shortening the fund's DWAM allowed the fund to take advantage of the
rising rate environment by investing in higher yielding securities, as explained
above.
11
<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 values 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.
12
<PAGE>
PORTFOLIO HIGHLIGHTS
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<S> <C>
------------------------------------------
Last seven days 6.22%
------------------------------------------
Last three months 5.95%
------------------------------------------
Last 12 months 5.45%
------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
---------------------------------------------
0-15 days 16.1% 32.8%
---------------------------------------------
16-30 days 14.1% 20.3%
---------------------------------------------
31-60 days 37.1% 7.5%
---------------------------------------------
61-90 days 20.9% 11.6%
---------------------------------------------
91-120 days 2.3% 13.2%
---------------------------------------------
More than 120 days 9.5% 14.6%
---------------------------------------------
Weighted average 61 days 62 days
---------------------------------------------
</TABLE>
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 6/30/00
<S> <C>
----------------------------------------------------------------------------------
Tier 1 100.0%
----------------------------------------------------------------------------------
</TABLE>
(1) A portion of the Fund's expenses was reduced during these periods. Without
this reduction, yields would have been lower.
13
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- 60.1%
AUTOMOBILE RECEIVABLES -- 0.3% (f)
New Center Asset Trust Plus
6.61%, 07/20/00 $ 87,000 $ 86,701
-----------
AUTOMOTIVE -- 2.0%
FCE Bank, PLC
6.56%, 07/07/00 20,000 19,978
6.72%, 10/05/00 39,000 38,314
Ford Motor Credit
6.60%, 07/06/00 175,000 174,841
6.79%, 07/07/00 270,000 269,695
General Motors Acceptance Corp.
6.66%, 07/21/00 102,000 101,626
Hertz Corp.
6.57%, 07/11/00 25,000 24,955
-----------
629,409
-----------
BANKING - AUSTRALIA -- 0.8%
CBA (Delaware) Finance, Inc.
6.30%, 09/08/00 57,000 56,333
6.30%, 09/13/00 25,000 24,686
National Australia Funding (Delaware), Inc.
6.79%, 07/06/00 175,000 174,835
-----------
255,854
-----------
BANKING - BELGIUM -- 1.2% (a)
BBL North America
6.57%, 07/13/00 50,000 49,891
6.47%, 10/04/00 87,000 85,562
Fortis Funding, L.L.C.
6.14%, 07/10/00 45,000 44,932
6.16%, 07/11/00 50,000 49,917
6.49%, 08/04/00 29,000 28,825
6.72%, 09/15/00 50,000 49,304
6.70%, 09/19/00 25,000 24,634
6.85%, 11/02/00 25,000 24,430
-----------
357,495
-----------
BANKING - CANADA -- 0.9%
Bank of Nova Scotia
6.58%, 07/11/00 50,000 49,909
National Bank of Canada
6.49%, 08/01/00 70,000 69,615
6.48%, 09/27/00 75,000 73,850
6.47%, 10/10/00 70,000 68,771
-----------
262,145
-----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
BANKING - DENMARK -- 0.1%
Den Danske Corp.
6.49%, 07/31/00 $ 27,000 $ 26,856
-----------
Banking - France -- 1.9%
Dexia CLF Finance Co.
6.57%, 07/10/00 100,000 99,837
6.25%, 07/11/00 20,000 19,966
6.57%, 07/11/00 31,000 30,944
6.49%, 09/29/00 30,000 29,528
6.46%, 10/04/00 75,000 73,761
Societe Generale
6.57%, 07/14/00 350,000 349,175
-----------
603,211
-----------
BANKING - GERMANY -- 2.2%
Bavaria TRR Corp. (a)(e)
6.73%, 07/21/00 104,000 103,613
6.65%, 07/25/00 80,739 80,383
Comision Federal de Electricidad (e)
6.71%, 08/04/00 92,000 91,421
Deutsche Bank Financial, Inc.
6.24%, 07/17/00 35,000 34,904
6.64%, 08/02/00 235,000 233,628
Giro US Funding Corp. (a)(e)
6.86%, 07/07/00 20,046 20,023
6.65%, 07/25/00 60,439 60,173
6.49%, 07/27/00 64,654 64,356
-----------
688,501
-----------
BANKING - NETHERLANDS -- 3.1%
ABN-AMRO North America Finance, Inc.
6.48%, 09/29/00 125,000 123,039
Atlantis One Funding Corp. (e)
6.60%, 07/19/00 36,000 35,882
6.69%, 08/17/00 89,593 88,821
6.72%, 10/05/00 281,864 276,903
6.72%, 10/06/00 95,154 93,462
Tulip Funding Corp. (a)
6.30%, 07/19/00 47,973 47,825
6.49%, 07/27/00 52,000 51,760
6.42%, 07/28/00 93,226 92,784
6.90%, 09/13/00 105,450 103,986
6.76%, 09/27/00 26,000 25,577
-----------
940,039
-----------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
BANKING - NORWAY -- 0.6%
Christiania Capital Corp. (a)
6.71%, 09/21/00 $ 45,000 $ 44,324
Den Norske Bank
6.71%, 09/19/00 100,000 98,533
6.71%, 09/22/00 54,000 53,179
-----------
196,036
-----------
BANKING - SWEDEN -- 1.1%
AB Spintab
6.72%, 09/07/00 50,000 49,376
6.75%, 09/29/00 50,000 49,171
6.71%, 10/30/00 50,000 48,909
Forenings Sparbanken AB (Swedbank)
6.15%, 07/28/00 25,000 24,888
6.71%, 09/05/00 57,000 56,310
6.46%, 10/13/00 85,000 83,464
6.46%, 10/16/00 35,000 34,350
-----------
346,468
-----------
BANKING - SWITZERLAND -- 0.8%
Credit Suisse First Boston, Inc. (a)
6.81%, 11/03/00 100,000 97,715
UBS Finance (Delaware), Inc.
6.93%, 07/05/00 156,000 155,880
-----------
253,595
-----------
BANKING - UNITED KINGDOM -- 1.0%
Abbey National North America Corp.
6.60%, 10/31/00 100,000 97,838
7.00%, 11/20/00 67,000 65,213
Repeat Offering Securitzation Entity,
Inc. (a)(e)
6.49%, 07/28/00 86,718 86,303
United Mexican States
6.37%, 08/17/00 50,000 49,594
-----------
298,948
-----------
BANKING - UNITED STATES -- 4.2%
BankAmerica Corp.
6.68%, 08/02/00 70,000 69,591
6.80%, 11/06/00 150,000 146,496
7.02%, 11/21/00 275,000 267,583
Citicorp
6.60%, 07/07/00 100,000 99,891
6.57%, 07/12/00 106,000 105,789
6.57%, 07/13/00 100,000 99,782
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Enterprise Funding Corp. (a)(e)
6.68%, 07/28/00 $ 20,104 $ 20,004
Forrestal Funding Master Trust (a)(e)
6.59%, 07/13/00 18,821 18,780
6.64%, 08/04/00 35,447 35,227
6.76%, 08/07/00 28,083 27,891
6.76%, 08/08/00 24,000 23,831
Intrepid Funding Master Trust (a)(e)
6.37%, 07/24/00 45,000 44,820
6.74%, 08/01/00 22,000 21,874
6.74%, 08/02/00 15,319 15,228
6.75%, 09/11/00 50,850 50,175
6.77%, 09/12/00 122,250 120,601
6.41%, 09/13/00 34,000 33,565
Kitty Hawk Funding Corp. (a)(e)
6.61%, 07/20/00 50,000 49,827
6.42%, 08/11/00 43,154 42,844
-----------
1,293,799
-----------
CREDIT CARD RECEIVABLES -- 2.3% (a)(f)
Dakota Certificates Program SCCMT-1
6.63%, 07/06/00 40,000 39,963
6.63%, 07/07/00 25,000 24,973
6.23%, 07/11/00 25,000 24,957
6.60%, 07/18/00 109,000 108,663
6.32%, 07/25/00 100,000 99,585
6.68%, 07/27/00 13,000 12,938
6.31%, 07/28/00 50,000 49,767
6.32%, 07/28/00 40,000 39,813
6.33%, 07/28/00 29,000 28,865
6.76%, 08/03/00 30,000 29,816
Montauk Funding Corp.
6.63%, 07/11/00 118,000 117,785
6.62%, 07/12/00 80,000 79,840
6.70%, 08/08/00 35,000 34,757
Providian Master Trust Series 1993-3
6.65%, 07/12/00 19,977 19,937
-----------
711,659
-----------
DIVERSIFIED FINANCIAL ASSETS -- 15.8% (f)
Amsterdam Funding Corp. (a)
6.65%, 07/07/00 25,000 24,973
6.59%, 07/10/00 20,000 19,967
6.59%, 07/11/00 50,000 49,909
6.67%, 07/11/00 40,000 39,926
6.59%, 07/13/00 50,000 49,891
6.74%, 08/08/00 25,000 24,825
</TABLE>
15
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Bavaria Universal Funding Corp. (a)
6.59%, 07/10/00 $ 40,000 $ 39,934
6.59%, 07/13/00 87,000 86,810
6.60%, 07/14/00 20,000 19,953
6.31%, 07/20/00 9,000 8,970
6.36%, 09/15/00 45,000 44,415
Beta Finance, Inc. (a)
6.73%, 09/20/00 24,000 23,642
6.74%, 09/22/00 79,000 77,794
6.53%, 10/25/00 40,000 39,185
6.59%, 10/26/00 23,000 22,523
6.92%, 11/08/00 50,000 48,794
CC (USA), Inc. (a)
6.19%, 07/18/00 24,500 24,430
6.82%, 08/18/00 49,000 48,562
6.30%, 08/23/00 20,000 19,820
6.77%, 09/01/00 16,000 15,816
6.40%, 09/12/00 22,000 21,723
6.46%, 09/25/00 50,000 49,253
6.50%, 09/29/00 79,500 78,248
Charta Corp. (a)
6.55%, 07/06/00 71,564 71,500
6.29%, 07/14/00 50,000 49,888
6.30%, 07/19/00 57,000 56,823
6.33%, 07/24/00 17,000 16,932
Clipper Receivables Corp. (a)
6.60%, 07/14/00 50,000 49,882
Concord Minutemen Capital Co., L.L.C.
Series A (a)
6.65%, 07/07/00 70,000 69,923
6.65%, 07/17/00 32,000 31,906
6.74%, 07/25/00 120,000 119,464
6.74%, 09/14/00 4,000 3,945
6.75%, 09/14/00 50,000 49,310
6.41%, 09/18/00 11,000 10,850
6.74%, 09/21/00 50,877 50,109
Delaware Funding Corp. (a)
6.60%, 07/17/00 50,000 49,854
Dorada Finance, Inc. (a)
6.27%, 07/10/00 28,650 28,606
6.52%, 07/26/00 14,000 13,938
6.73%, 09/19/00 26,000 25,618
6.73%, 09/21/00 20,000 19,698
6.76%, 09/27/00 10,000 9,837
6.80%, 10/05/00 12,000 11,787
6.49%, 10/06/00 15,000 14,746
6.53%, 10/25/00 68,500 67,105
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Greenwich Funding Corp. (d)
6.59%, 07/12/00 $ 17,665 $ 17,630
6.66%, 07/21/00 21,000 20,923
6.49%, 07/28/00 64,046 63,739
6.68%, 08/04/00 17,000 16,894
Greyhawk Funding, L.L.C. (a)
6.60%, 07/17/00 75,000 74,781
6.60%, 07/20/00 120,000 119,585
International Securitization Corp. (a)
6.60%, 07/12/00 22,000 21,956
6.62%, 07/14/00 19,718 19,671
6.69%, 07/17/00 14,071 14,030
6.60%, 07/18/00 24,000 23,926
6.50%, 07/26/00 11,036 10,987
6.31%, 07/28/00 8,247 8,209
6.74%, 08/09/00 65,000 64,533
6.74%, 08/10/00 40,000 39,705
6.75%, 09/05/00 10,000 9,878
6.74%, 09/18/00 58,842 57,987
6.41%, 09/19/00 26,460 26,095
6.63%, 10/27/00 20,000 19,580
6.74%, 10/27/00 24,908 24,376
6.91%, 12/19/00 15,915 15,409
Lexington Parker Capital Corp. (a)
6.60%, 07/12/00 20,000 19,960
6.60%, 07/13/00 45,111 45,012
6.61%, 07/18/00 81,483 81,230
6.32%, 07/20/00 43,000 42,859
6.69%, 07/20/00 37,000 36,871
6.31%, 07/21/00 25,000 24,914
6.74%, 08/10/00 19,778 19,632
6.50%, 10/12/00 85,000 83,470
Links Finance, L.L.C. (a)
6.67%, 07/05/00 24,000 23,982
6.49%, 07/14/00 36,000 35,917
6.70%, 07/24/00 21,000 20,911
6.78%, 08/14/00 18,000 17,853
6.80%, 08/24/00 20,000 19,800
Market Street Funding Corp. (a)
6.96%, 07/05/00 79,000 78,939
6.27%, 07/12/00 38,684 38,611
6.28%, 07/18/00 80,000 79,767
MOAT Funding, L.L.C. (a)
6.58%, 07/05/00 50,000 49,964
6.23%, 07/06/00 97,000 96,917
6.30%, 07/07/00 31,000 30,968
6.59%, 07/10/00 30,000 29,951
6.73%, 09/15/00 40,000 39,441
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
6.74%, 09/18/00 $ 24,000 $ 23,651
6.75%, 09/18/00 20,000 19,709
6.74%, 09/20/00 15,000 14,777
Mont Blanc Capital Corp. (a)
6.23%, 07/05/00 55,141 55,103
6.27%, 07/07/00 46,120 46,073
6.30%, 07/17/00 25,281 25,211
6.66%, 07/19/00 38,955 38,827
6.80%, 08/15/00 11,000 10,908
Sigma Finance, Inc. (a)
6.62%, 07/12/00 7,050 7,036
6.63%, 07/14/00 25,000 24,941
6.20%, 07/24/00 68,000 67,738
6.73%, 09/12/00 50,000 49,329
6.75%, 09/13/00 35,000 34,522
6.36%, 09/15/00 54,000 53,298
6.41%, 09/19/00 100,000 98,620
6.50%, 10/13/00 93,000 91,310
6.52%, 10/20/00 50,000 49,026
6.31%, 11/01/00 50,000 50,000
6.93%, 11/09/00 30,000 29,269
Stellar Funding Group, Inc. (a)
6.58%, 07/07/00 20,145 20,123
6.59%, 07/10/00 23,701 23,662
6.60%, 07/12/00 21,000 20,958
6.63%, 07/18/00 15,000 14,953
6.50%, 07/27/00 13,550 13,487
6.51%, 07/31/00 19,639 19,534
6.41%, 09/22/00 34,478 33,984
6.77%, 10/27/00 36,202 35,425
Thames Asset Global Securitization
No. 1, Inc. (a)
6.27%, 07/06/00 69,090 69,031
6.60%, 07/10/00 38,980 38,916
6.34%, 07/14/00 18,551 18,509
6.27%, 07/17/00 51,802 51,660
6.32%, 07/24/00 33,937 33,802
Variable Funding Capital Corp. (a)
6.54%, 07/06/00 13,000 12,988
6.63%, 07/07/00 100,000 99,890
6.60%, 07/17/00 94,496 94,220
6.67%, 07/28/00 100,000 99,502
6.50%, 08/02/00 100,000 99,432
-----------
4,877,371
-----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
FINANCE - COMMERCIAL -- 2.5%
CIT Group Holdings, Inc.
6.25%, 07/18/00 $143,000 $ 142,585
6.66%, 08/28/00 50,000 49,469
General Electric Capital International
Funding, Inc. (a)
6.58%, 07/10/00 150,000 149,754
6.58%, 07/11/00 85,000 84,845
6.57%, 07/12/00 50,000 49,900
6.58%, 07/14/00 100,000 99,764
6.59%, 07/18/00 50,000 49,845
6.62%, 07/26/00 100,000 99,545
Heller Financial, Inc.
6.92%, 08/23/00 56,000 55,440
-----------
781,147
-----------
FINANCE - CONSUMER -- 2.9%
Associates Corp. of North America
7.00%, 07/03/00 183,000 182,989
6.72%, 10/03/00 136,000 133,656
6.72%, 10/04/00 140,000 137,562
6.72%, 10/05/00 140,000 137,536
Associates First Capital, B.V.
7.00%, 07/03/00 182,000 181,869
6.67%, 07/24/00 28,000 27,882
6.73%, 09/01/00 56,000 55,361
6.72%, 10/02/00 30,000 29,489
-----------
886,344
-----------
INSURANCE - MONOLINE -- 0.2% (a)
Triple-A One Funding Corp.
6.60%, 07/17/00 55,384 55,223
-----------
INSURANCE - MULTILINE -- 0.2%
GE Financial Assurance Holdings, Inc.
6.57%, 07/12/00 50,000 49,900
-----------
SECURITIES BROKERAGE - DEALER -- 7.5%
Bear Stearns Companies, Inc.
6.61%, 07/19/00 67,000 66,781
6.68%, 07/20/00 112,000 111,610
6.77%, 09/15/00 100,000 98,598
Goldman Sachs Group, LP
6.00%, 08/07/00 100,000 100,000
6.29%, 08/30/00 75,000 74,238
6.77%, 10/04/00 98,000 96,280
6.47%, 10/11/00 23,000 22,592
6.56%, 10/26/00 27,000 26,443
</TABLE>
17
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
6.71%, 11/01/00 $ 49,000 $ 47,913
7.05%, 11/14/00 100,000 97,427
7.03%, 11/21/00 60,000 58,382
6.86%, 11/22/00 83,000 80,786
JP Morgan & Co.
6.20%, 07/11/00 104,000 103,824
Merrill Lynch & Co., Inc.
6.86%, 03/29/01 100,000 100,000
Morgan Stanley Dean Witter
Discover & Co.
6.64%, 07/25/00 150,000 149,340
6.72%, 09/14/00 425,000 419,165
6.72%, 09/15/00 200,000 197,218
PaineWebber Group, Inc.
6.76%, 07/05/00 32,000 31,976
Salomon Smith Barney Holdings, Inc.
6.59%, 07/18/00 106,000 105,672
6.71%, 09/18/00 71,000 69,972
Ventures Business Trust (a)
6.59%, 07/10/00 75,000 74,877
6.59%, 07/12/00 90,000 89,820
6.72%, 09/13/00 98,000 96,668
-----------
2,319,582
-----------
TRADE RECEIVABLES -- 8.5% (a)(f)
Apreco, Inc.
6.44%, 07/06/00 40,000 39,965
6.55%, 07/13/00 50,000 49,892
6.60%, 07/17/00 41,000 40,881
6.27%, 07/18/00 20,000 19,942
6.73%, 08/28/00 20,000 19,786
Asset Securitization Cooperative Corp.
7.01%, 07/05/00 26,650 26,629
6.83%, 07/07/00 33,360 33,322
Compass Securitization, L.L.C.
6.59%, 07/10/00 14,000 13,977
6.60%, 07/12/00 70,000 69,860
6.60%, 07/14/00 71,000 70,832
6.68%, 07/24/00 66,275 65,995
Corporate Asset Funding Co., Inc.
6.54%, 07/07/00 75,000 74,919
Corporate Receivables Corp.
6.59%, 07/05/00 25,000 24,982
6.62%, 07/06/00 100,000 99,909
6.55%, 07/13/00 150,000 149,677
6.29%, 07/14/00 95,000 94,787
6.72%, 08/25/00 100,000 98,984
6.29%, 07/10/00 25,000 24,961
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
CXC, Inc.
6.60%, 07/17/00 $150,000 $ 149,566
6.72%, 08/29/00 15,000 14,837
Edison Asset Securitization Corp., L.L.C.
6.63%, 07/07/00 11,437 11,424
6.60%, 07/18/00 18,685 18,627
Eureka Securitization, Inc.
6.54%, 07/05/00 66,000 65,952
6.54%, 07/06/00 50,000 49,955
Giro Multi Funding Corp.
6.65%, 07/12/00 50,000 49,899
6.73%, 07/20/00 23,000 22,919
6.61%, 07/21/00 100,000 99,636
Monte Rosa Capital Corp.
6.65%, 07/12/00 61,063 60,940
6.59%, 07/13/00 68,581 68,431
6.66%, 07/19/00 53,559 53,383
6.63%, 07/20/00 71,597 71,349
6.65%, 08/02/00 30,637 30,457
Park Avenue Receivables Corp.
6.86%, 07/07/00 17,001 16,981
6.59%, 07/12/00 68,657 68,519
6.60%, 07/18/00 125,000 124,613
6.67%, 07/24/00 41,788 41,611
6.68%, 07/25/00 30,251 30,117
Quincy Capital Corp.
6.59%, 07/11/00 41,129 41,054
6.78%, 07/12/00 77,667 77,507
WCP Funding, Inc.
6.33%, 07/05/00 48,000 47,967
6.44%, 07/06/00 70,000 69,938
6.54%, 07/06/00 27,000 26,976
Windmill Funding
6.63%, 07/06/00 27,000 26,975
6.63%, 07/07/00 25,000 24,973
6.59%, 07/13/00 67,946 67,798
6.69%, 07/31/00 10,000 9,945
6.75%, 08/01/00 25,000 24,856
6.64%, 08/04/00 25,000 24,845
Wood Street Funding Corp.
6.65%, 07/10/00 12,053 12,033
6.64%, 07/20/00 18,603 18,543
6.73%, 09/18/00 41,870 41,262
6.73%, 09/19/00 16,000 15,765
-----------
2,598,953
-----------
TOTAL COMMERCIAL PAPER AND
OTHER CORPORATE OBLIGATIONS
(Cost $18,519,236) 18,519,236
-----------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
CERTIFICATES OF DEPOSIT -- 25.9%
BANKING - BELGIUM -- 0.2%
Credit Communal de Belgique
6.25%, 07/14/00 $ 60,000 $ 60,000
-----------
BANKING - CANADA -- 4.8%
Canadian Imperial Bank of Commerce
6.59%, 08/03/00 300,000 300,000
6.76%, 02/12/01 100,000 99,977
6.75%, 03/27/01 115,000 114,966
National Bank of Canada
6.05%, 07/05/00 100,000 100,000
Royal Bank of Canada
5.75%, 07/03/00 52,500 52,500
6.75%, 02/14/01 100,000 99,976
6.90%, 03/29/01 100,000 99,979
6.79%, 04/19/01 95,000 94,953
7.00%, 05/02/01 125,000 124,980
7.26%, 05/09/01 100,000 99,976
Toronto-Dominion Bank
6.46%, 10/16/00 300,000 300,000
-----------
1,487,307
-----------
BANKING - DENMARK -- 0.2%
Den Danske Corp.
6.58%, 07/14/00 75,000 75,000
-----------
BANKING - FINLAND -- 0.4%
Merita Bank, Ltd.
6.15%, 07/03/00 30,000 29,999
6.15%, 07/26/00 75,000 75,000
-----------
104,999
-----------
BANKING - FRANCE -- 1.5%
Banque Nationale de Paris
6.57%, 07/05/00 100,000 100,000
Societe Generale
6.57%, 07/05/00 258,000 258,000
6.46%, 10/12/00 100,000 100,000
-----------
458,000
-----------
BANKING - GERMANY -- 9.1%
Bayerische HypoVereinsbank, AG
6.70%, 09/07/00 104,200 104,200
7.02%, 11/17/00 200,000 200,000
Commerzbank, AG
6.14%, 07/03/00 25,000 25,000
6.70%, 09/20/00 40,000 40,004
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
6.71%, 09/25/00 $150,000 $ 150,000
6.73%, 09/28/00 89,000 89,001
Deutsche Bank, AG
6.55%, 07/03/00 205,000 205,000
6.59%, 07/05/00 86,000 86,000
6.57%, 07/13/00 315,000 315,000
6.14%, 10/18/00 25,000 25,003
6.26%, 10/18/00 100,000 99,983
6.21%, 11/29/00 100,000 99,972
6.55%, 01/12/01 100,000 99,975
6.56%, 01/29/01 95,000 94,971
7.18%, 06/12/01 150,000 149,973
Dresdner Bank
6.80%, 04/25/01 50,000 49,992
Landesbank Baden Wurttemberg
6.70%, 09/07/00 90,000 90,001
6.52%, 10/27/00 100,000 100,000
6.85%, 11/02/00 50,000 49,954
7.02%, 11/27/00 50,000 50,003
7.00%, 12/05/00 25,000 25,003
7.36%, 06/05/01 77,000 77,017
Landesbank Hessen-Thuringen Girozentrale
7.22%, 05/04/01 88,000 87,926
Norddeutsche Landesbank Girozentrale
6.13%, 07/05/00 35,000 35,000
6.15%, 07/31/00 25,000 25,000
6.60%, 02/01/01 50,000 49,986
Westdeutsche Landesbank Girozentrale
6.38%, 09/20/00 55,000 55,000
6.48%, 10/02/00 35,000 35,000
6.48%, 10/03/00 180,000 180,000
7.00%, 05/02/01 100,000 100,000
-----------
2,793,964
-----------
BANKING - NETHERLANDS -- 0.8%
ING Bank, NV
6.59%, 07/19/00 100,000 100,000
6.69%, 09/08/00 50,000 50,001
6.46%, 10/11/00 100,000 100,001
-----------
250,002
-----------
BANKING - NORWAY -- 0.2%
Christiana Bank
6.72%, 09/27/00 73,000 73,001
-----------
BANKING - SWEDEN -- 0.6%
Forenings Sparbanken (Swedbank)
6.58%, 07/17/00 100,000 100,000
</TABLE>
19
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
Svenska Handelsbanken
6.58%, 07/14/00 $100,000 $ 100,000
-----------
200,000
-----------
BANKING - SWITZERLAND -- 3.0%
Credit Suisse First Boston
6.15%, 07/03/00 75,000 74,998
UBS, AG
5.80%, 07/05/00 25,000 25,000
6.58%, 07/11/00 140,000 140,000
6.15%, 11/20/00 250,000 249,935
6.30%, 12/11/00 100,000 99,963
6.50%, 01/02/01 137,000 136,967
6.85%, 04/27/01 100,000 99,977
7.25%, 06/12/01 100,000 99,982
-----------
926,822
-----------
BANKING - UNITED KINGDOM -- 4.0%
Abbey National Treasury Services, PLC
6.47%, 10/06/00 500,000 500,000
Bank of Scotland Treasury Services
6.58%, 07/13/00 50,000 50,000
Barclays Bank, PLC
6.59%, 07/13/00 40,000 40,000
5.85%, 08/01/00 100,000 100,000
Halifax, PLC
6.58%, 07/19/00 300,000 300,000
6.58%, 07/20/00 100,000 100,000
Lloyds TSB Bank, PLC
6.65%, 07/03/00 49,000 48,999
National Westminster Bank, PLC
6.70%, 02/01/01 87,000 86,975
-----------
1,225,974
-----------
BANKING - UNITED STATES -- 1.1%
American Express Centurion Bank
6.51%, 07/07/00 25,000 25,000
6.64%, 07/28/00 98,000 98,000
First Tennessee Bank, N.A.
6.25%, 07/14/00 50,000 50,000
Union Bank of California
6.77%, 09/01/00 140,000 140,000
Wilmington Trust Co.
6.56%, 07/07/00 25,000 25,000
7.07%, 12/01/00 10,000 10,000
-----------
348,000
-----------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $8,003,069) 8,003,069
-----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS -- 7.0% (b)
AUTOMOTIVE -- 0.3%
Ford Motor Credit
6.73%, 08/18/00 $ 90,000 $ 89,990
-----------
BANKING - CANADA -- 0.1%
City of New Britain, Connecticut GO
Pension Bonds
6.67%, 07/07/00 40,000 40,000
-----------
BANKING - GERMANY -- 0.1% (e)
City of Santa Rosa VRD Wastewater
Series 1998A
6.75%, 07/07/00 17,800 17,800
-----------
BANKING - NETHERLANDS -- 0.4%
Restructured Assets Certificates with
Enhanced Returns Notes
Series 1999-25-MM-MBS (d) (e)
6.74%, 07/06/00 100,000 100,000
Special Care Facilities Financing
Authority of The City of Daphne
(Presbyterian Retirement Corp., Inc.)
Series 1998B
6.70%, 07/07/00 6,850 6,850
-----------
106,850
-----------
BANKING - SWITZERLAND -- 0.3% (d)
Structured Product Asset Return
Certificates, Series 2000-1
6.36%, 07/24/00 100,000 100,000
-----------
BANKING - UNITED KINGDOM & GERMANY -- 0.0% (e)
County of Riverside, California
1990 Taxable COP (Monterey Avenue
Project)
6.80%, 07/07/00 7,800 7,800
-----------
BANKING - UNITED STATES -- 0.5%
Active Living of Glenview, L.L.C. Senior
Floating Rate Note Series 1998 (a)(e)
6.80%, 07/07/00 11,000 11,000
Baptist Health Systems of South
Florida, Inc. Series 1995A (e)
6.60%, 07/07/00 6,165 6,165
Baptist Health Systems of South
Florida, Inc. Series 1995B (e)
6.60%, 07/07/00 4,500 4,500
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
BMC Special Care Facilities Financing
Authority of the City of Montgomery,
Alabama Taxable RB (Montgomery
Baptist Outreach Services Corp.
Project) Series 1997A (e)
6.70%, 07/07/00 $ 8,600 $ 8,600
Columbus, Georgia Development
Authority Taxable RB (Jay Leasing,
Inc. Project) Series 1997 (Regions
Bank LOC) (e)
6.70%, 07/07/00 7,250 7,250
Fillmore, California Public Financing
Authority VRD Tax Allocation Bond
(Fillmore Redevelopment Agency
Central City Redevelopment Project
Area) Series 1998A (e)
6.68%, 07/07/00 10,120 10,120
MoviePlex Realty Leasing, L.L.C.
Adjustable Rate Tender Securities
(Carmike Cinemas Inc.)
Series 1997B-1 (e)
6.62%, 07/07/00 7,625 7,625
New Jersey Economic Development
Authority Adjustable Rate Title IX
Loan Portfolio Securitization Bonds
Series 1995 (e)
6.59%, 07/03/00 10,500 10,500
Strategic Money Market Trust
Series 2000B (a)
6.66%, 07/13/00 55,000 55,000
Strategic Money Market Trust
Series 2000E (a)
Town of Islip, New York IDA 1992
Taxable Adjustable Rate IDRB
(Nussdorf Associates/Quality King
Distributors, Inc. Facility) (a)(e)
6.93%, 07/07/00 5,215 5,215
-----------
158,975
-----------
CREDIT CARD RECIEVABLES -- 0.2% (a)(f)
Short-Term Repackaged Asset Trust
Series 1998E
6.75%, 07/18/00 50,000 50,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
DIVERSIFIED FINANCIAL ASSETS -- 1.3% (f)
CC (USA), Inc. (a)
6.64%, 07/19/00 $ 28,000 $ 28,000
Copelco Capital Receivables, L.L.C.
Series 2000-A
6.65%, 07/18/00 20,444 20,445
Sigma Finance, Inc. (a)
6.60%, 07/03/00 150,000 150,000
6.65%, 07/14/00 50,000 50,000
6.65%, 07/25/00 141,000 141,000
6.67%, 07/31/00 20,000 20,000
-----------
409,445
-----------
ELECTRICAL & ELECTRONICS -- 0.1% (a)(e)
New Jersey Economic Development
Authority Taxable Economic
Development Bonds (MSNBC CNBC
Project) Series 1997A
6.63%, 07/03/00 38,800 38,800
-----------
GOVERNMENT SPONSORED ENTERPRISES -- 0.2%
Greater Texas Student Loan Corp. , Inc.
Series 2000B
6.65%, 07/30/00 75,000 75,000
-----------
LIFE & HEALTH INSURANCE -- 1.2%
Monumental Life Insurance Co. (d)
6.72%, 07/01/00 100,000 100,000
6.79%, 07/01/00 10,000 10,000
6.74%, 07/03/00 100,000 100,000
Transamerica Life Insurance
and Annuity (a)
6.64%, 07/07/00 75,000 75,000
Travelers Insurance Co. (d)
6.65%, 07/01/00 75,000 75,000
-----------
360,000
-----------
SECURITIES BROKERAGE - DEALER -- 1.5%
JP Morgan & Co. , Inc.
6.64%, 07/17/00 100,000 100,000
Lehman Commercial Paper, Inc. (d)
6.89%, 07/03/00 300,000 300,000
Merrill Lynch & Co., Inc.
6.66%, 07/31/00 50,000 50,000
-----------
450,000
-----------
</TABLE>
21
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- -----------
<S> <C> <C>
TELECOMMUNICATIONS SERVICES
& EQUIPMENT -- 0.8%
AT & T Corp. (a)
6.64%, 07/14/00 $247,000 $ 247,000
-----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $2,151,660) 2,151,660
-----------
BANK NOTES -- 4.1%
Bank of America, N.A.
6.72%, 10/04/00 200,000 200,000
6.45%, 10/10/00 120,000 120,000
6.45%, 10/11/00 142,000 142,000
7.00%, 11/22/00 30,000 30,000
7.02%, 11/22/00 120,000 120,000
7.06%, 12/01/00 200,000 200,000
7.20%, 06/05/01 100,000 100,000
Bank One, N.A.
6.57%, 07/05/00 98,000 98,000
Fifth Third Bank
6.59%, 07/13/00 60,000 60,000
LaSalle National Bank
6.55%, 10/23/00 65,000 65,000
6.60%, 11/01/00 100,000 100,003
6.70%, 11/01/00 30,000 30,001
-----------
TOTAL BANK NOTES
(Cost $1,265,004) 1,265,004
-----------
BANKERS ACCEPTANCES -- 0.1%
Fleet National Bank
6.47%, 10/10/00 25,000 24,560
-----------
TOTAL BANKERS ACCEPTANCES
(Cost $24,560) 24,560
-----------
</TABLE>
<TABLE>
<CAPTION>
Maturity
Value Value
-------- -----------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 3.0% (c)
Credit Suisse First Boston, Inc. Tri-Party
Repurchase Agreement Collateralized by
U.S. Government Securities
6.90% Issue 06/30/00
Due 07/03/00 $ 20,258 $ 20,246
Salomon Smith Barney, Inc. Tri-Party
Repurchase Agreement Collateralized by
U.S. Government Securities
6.93% Issue 06/30/00
Due 07/03/00 900,520 900,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $920,246) 920,246
-----------
TOTAL INVESTMENTS -- 100.2%
(Cost $30,883,775) 30,883,775
-----------
OTHER ASSETS AND LIABILITIES -- (0.2%)
Other assets 305,057
Liabilities (369,954)
-----------
(64,897)
-----------
TOTAL NET ASSETS -- 100.0% $30,818,878
===========
</TABLE>
SEE ACCOMPANYING NOTES TO STATEMENTS OF NET ASSETS AND NOTES TO FINANCIAL
STATEMENTS.
22
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
June 30, 2000 (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 and U.S. government coupon notes and
U.S. Treasury notes, which reflect the coupon rate of the security. Yields for
each type of security are stated according to the market convention for that
security type. For each security, cost (for financial reporting and federal
income tax purposes) and carrying value are the same.
(a) These securities can be resold to qualified institutional buyers within
seven business days. Such securities are deemed liquid in accordance with
procedures adopted by the Board of Trustees. At June 30, 2000, the
aggregate value of such securities held by the fund was $11,564,037 which
represented 37.52% of net assets.
(b) Variable rate obligations have interest rates that 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. 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.
(c) Repurchase agreements due dates are considered the maturity date.
Repurchase agreements with due dates later than seven days from issue date
may be subject to seven day putable demand features for liquidity purposes.
(d) These securities have legal or contractual restrictions on resale. Such
securities are deemed illiquid in accordance with procedures adopted by the
Board of Trustees. At June 30, 2000, the aggregate value of such securities
held by Schwab Value Advantage Fund was $904,186 which represented 2.93% of
the net assets of the fund.
(e) Security has one or more third party credit enhancements.
(f) Asset-backed securities are securities backed by underlying assets and
categorized by industry.
PORTFOLIO ABBREVIATIONS
COP Certificates of Participation
GO General Obligation
IDA Industrial Development Authority
IDRB Industrial Development Reevenue Bond
RB Revenue Bond
VRD Variable Rate Demand
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND(REGISTRATION MARK)
STATEMENT OF ASSETS AND LIABILITIES (in thousands,
except for net asset value per share)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments, at value (Cost: $30,883,775) $30,883,775
Receivables:
Interest 146,331
Fund shares sold 157,776
Prepaid expenses 950
-----------
Total assets 31,188,832
-----------
LIABILITIES
Payables:
Dividends 78,403
Investments purchased 150,000
Fund shares redeemed 139,114
Investment advisory and administration fees 220
Transfer agency and shareholder service fees 426
Other liabilities 1,791
-----------
Total liabilities 369,954
-----------
Net assets applicable to outstanding shares $30,818,878
===========
NET ASSETS CONSIST OF
Paid-in capital $30,819,003
Accumulated net realized loss on investments sold (125)
-----------
$30,818,878
===========
PRICING OF SHARES
Outstanding shares, $0.00001 par value (unlimited
shares authorized) 30,819,112
Net asset value, offering and redemption price per share $ 1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND(REGISTRATION MARK)
STATEMENT OF OPERATIONS (in thousands)
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Interest income $911,702
--------
Expenses:
Investment advisory and administration fees 47,732
Transfer agency and shareholder service fees 36,752
Custodian and portfolio accounting fees 1,014
Registration fees 804
Professional fees 53
Shareholder reports 132
Trustees' fees 36
Proxy fees 1,720
Other expenses 194
--------
88,437
Less: expenses reduced (see Note 4) (27,914)
--------
Net expenses incurred by fund 60,523
--------
Net investment income 851,179
--------
Increase in net assets resulting from operations $851,179
========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND(REGISTRATION MARK)
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
<TABLE>
<CAPTION>
Six months
ended Year
06/30/00 ended
(Unaudited) 12/31/99
----------- ------------
<S> <C> <C>
Operations:
Net investment income $ 851,179 $ 1,274,915
------------ ------------
Increase in net assets resulting from operations 851,179 1,274,915
------------ ------------
Dividends to shareholders from net investment income (see Note 2): (851,179) (1,274,915)
------------ ------------
Capital share transactions (at $1.00 per share):
Proceeds from shares sold 27,776,024 40,135,739
Net asset value of shares issued in reinvestment of dividends 723,683 1,322,147
Payments for shares redeemed (24,946,014) (36,388,513)
------------ ------------
Increase in net assets from capital share transactions 3,553,693 5,069,373
------------ ------------
Total increase in net assets 3,553,693 5,069,373
Net assets:
Beginning of period 27,265,185 22,195,812
------------ ------------
End of period $ 30,818,878 $ 27,265,185
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
SCHWAB VALUE ADVANTAGE MONEY FUND(REGISTRATION MARK)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED 12/31 2000(1) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
-----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.03 0.05 0.05 0.05 0.05 0.06
-------------------------------------------------------------------------------
Total from investment operations 0.03 0.05 0.05 0.05 0.05 0.06
Less distributions:
Dividends from net investment income (0.03) (0.05) (0.05) (0.05) (0.05) (0.06)
-------------------------------------------------------------------------------
Total distributions (0.03) (0.05) (0.05) (0.05) (0.05) (0.06)
-------------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------------
Total return (%) 2.91(2) 5.01 5.35 5.40 5.26 5.80
RATIOS/SUPPLEMENTAL DATA (%)
-----------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average
net assets 0.40(3,4) 0.40 0.40 0.40 0.40 0.40
Expense reductions reflected in above ratio 0.19(3) 0.21 0.27 0.29 0.30 0.32
Ratio of net investment income to average
net assets 5.79(3) 4.91 5.21 5.28 5.14 5.63
Net assets, end of period ($X 1,000) 30,818,878 27,265,185 22,195,812 13,662,185 10,476,537 6,923,890
</TABLE>
(1) For the six months ended June 30, 2000 (Unaudited).
(2) Not Annualized.
(3) Annualized.
(4) Would have been 0.41% if certain non-routine expenses (proxy fees)
had been included.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 2000 (Unaudited)
(All dollar amounts are in thousands unless otherwise noted)
1. DESCRIPTION OF THE FUND
The Schwab Value Advantage Money Fund (the "fund") is 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, as amended, (the "1940 Act").
In addition to the fund, the trust also offers the Schwab Money Market Fund,
Schwab Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab
Institutional Advantage Money Fund(REGISTRATION MARK), Schwab Retirement Money
Fund(REGISTRATION MARK), 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 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 fund's 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 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.
EXPENSES -- Expenses arising in connection with the fund are charged directly to
the fund. Expenses common to all series of the Trust are generally allocated to
each series in proportion to their relative net assets.
FEDERAL INCOME TAXES -- It is the 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.
The fund is considered a separate entity for federal income tax purposes.
28
<PAGE>
As of December 31, 1999, the unused capital loss carryforwards, for federal
income tax purposes with expiration dates, were as follows:
<TABLE>
<CAPTION>
Schwab Value Advantage
Expiring in: Money Fund(REGISTRATION MARK)
------------ -----------------------------
<S> <C> <C>
12/31/01 $ 1
12/31/02 2
12/31/03 122
----
Total capital loss carryforwards $125
====
</TABLE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT -- The fund has an investment
advisory and administration agreement with Charles Schwab Investment
Management, Inc. (the "investment adviser"). For advisory services and
facilities furnished, the fund pays an annual fee, payable monthly, of 0.38% on
the first $1 billion of average daily net assets, 0.35% on such net assets in
excess of $1 billion to $10 billion, 0.32% on such net assets in excess of $10
billion to $20 billion, and 0.30% on such net assets in excess of $20 billion.
Prior to April 30, 1999, the fund 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 month period ended June 30, 2000 (see Note 4).
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The trust has transfer
agency and shareholder service agreements with Charles Schwab & Co., Inc.
("Schwab"). For services provided under these agreements, Schwab receives an
annual fee, payable monthly, of 0.05% of average daily net assets for transfer
agency services and 0.20% on such assets for shareholder services. In addition,
Schwab may charge a fee of five dollars for purchases and redemptions in amounts
less than five thousand dollars and may impose a five dollar monthly fee for
balances below the minimum required.
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 month period ended June 30, 2000, the trust made no direct payments to its
officers or trustees who are "interested persons" within the meaning of the 1940
Act. The fund incurred fees of $36 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,
2001, the fund's total operating expenses will not exceed 0.40% of the fund's
average daily net assets, after reductions. For the purpose of this guarantee,
operating expenses do not include interest, taxes, and certain non-routine
expenses. The operating expense ratio for the six months ended June 30, 2000 did
include non-routine expenses.
For the six month period ended June 30, 2000, the total of such fees reduced by
the investment adviser was $27,914.
29
<PAGE>
PROXY VOTING RESULTS
A special meeting of the shareholders of The Charles Schwab Family of Funds was
held on June 1, 2000. The number of votes necessary to conduct the meeting and
approve each proposal was obtained, and the results of the votes of shareholders
on proposals before them are listed below:
PROPOSAL 1
Election of Trustees.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES VOTED FOR SHARES WITHHELD
---------------- ---------------
<S> <C> <C>
Charles R. Schwab 36,999,629,179 9,264,278,586
Mariann Byerwalter 36,952,086,682 9,311,821,083
Jeremiah H. Chafkin 36,969,722,337 9,294,185,428
Donald F. Dorward 36,945,789,881 9,318,117,884
William A. Hasler 36,978,892,818 9,285,014,947
Robert G. Holmes 36,967,612,764 9,296,295,001
Steven L. Scheid 36,989,702,307 9,274,205,458
Gerald B. Smith 36,981,495,311 9,282,412,454
Donald R. Stephens 36,986,833,556 9,277,074,209
Michael W. Wilsey 36,981,483,423 9,282,424,342
</TABLE>
PROPOSAL 2CII
To approve changes to restrictions regarding lending.
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
------------------
<S> <C>
For 12,268,563,192
Against 599,403,974
Abstain (includes broker non-votes) 2,619,289,038
</TABLE>
PROPOSAL 2CIII
To approve changes to restrictions regarding the issuance of senior securities
and pledging, mortgaging or hypothecating fund assets.
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
------------------
<S> <C>
For 12,321,538,233
Against 541,188,367
Abstain (includes broker non-votes) 2,624,529,604
</TABLE>
30
<PAGE>
Proposal 2I
To approve changes to restrictions regarding industry concentration.
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
------------------
<S> <C>
For 12,292,189,011
Against 568,772,754
Abstain (includes broker non-votes) 2,626,294,439
</TABLE>
PROPOSAL 2J
To approve changes to restrictions regarding investments in commodities, futures
contracts and real estate.
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
------------------
<S> <C>
For 12,210,010,973
Against 659,175,374
Abstain (includes broker non-votes) 2,618,069,857
</TABLE>
PROPOSAL 2K
To approve changes to restrictions regarding the underwriting of securities.
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
------------------
<S> <C>
For 12,265,693,498
Against 596,853,733
Abstain (includes broker non-votes) 2,624,708,973
</TABLE>
31
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THE SCHWABFUNDS FAMILY-REGISTERED TRADEMARK-
SchwabFunds-Registered Trademark- offers 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.
METHODS FOR PLACING ORDERS
The information below outlines how Schwab brokerage account investors can place
orders. If you are investing through a third-party investment provider, methods
for placing orders may be different.
PHONE
Call 800-435-4000, day or night (for TDD service, call 800-345-2550).
INTERNET
www.schwab.com/schwabfunds
MAIL
Write to SchwabFunds at:
P. O. Box 7575, San Francisco, CA 94120-7575
When selling or exchanging shares, be sure to include the signatures of at least
one of the persons whose name is on the account.
IN PERSON
Visit the nearest Charles Schwab office.
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-Registered Trademark- Fund
Schwab 1000 Fund-Registered Trademark-
Schwab Analytics Fund-Registered Trademark-
Schwab Focus Funds:
Communications Focus Fund
Financial Services Focus Fund
HealthCare Focus Fund
Technology Focus Fund
Schwab Small-Cap Index Fund-Registered Trademark-
Schwab MarketManager Small Cap Portfolio
Schwab Total Stock Market Index Fund-TM-
Schwab International Index Fund-Registered Trademark-
Schwab MarketManager International Portfolio
SCHWAB BOND FUNDS
Schwab YieldPlus Fund-TM-
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 FUNDS
Schwab offers an array of money funds that seek high current income consistent
with stability of capital and liquidity.(1) Refer to page 3 of this report for
more information.
(1)Investments in money funds are neither insured nor guaranteed by the Federal
Deposit Insurance Corporation (FDIC) or any other government agency and,
although money funds seek to preserve the value of your investment at $1 per
share, it is possible to lose money.
<PAGE>
[LOGO]
INVESTMENT ADVISER
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
DISTRIBUTOR
Charles Schwab & Co., Inc.
P.O. Box 7575, San Francisco, CA 94120-7575
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
-C-2000 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
Printed on recycled paper. MKT3604-3 (8/00)
<PAGE>
SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
MONEY FUNDS
SEMIANNUAL REPORT
AND
AN IMPORTANT NOTICE REGARDING
DELIVERY OF SHAREHOLDER
DOCUMENTS
June 30, 2000
<PAGE>
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission permits mutual funds to deliver only one
copy of shareholder documents, including prospectuses and shareholder reports,
to fund investors with multiple accounts at the same residential or post office
box address. This practice is commonly called "householding" and is intended to
eliminate duplicate mailings of shareholder documents.
Mailings of your SchwabFunds-Registered Trademark- shareholder documents may be
householded indefinitely unless you instruct us otherwise.
ADDITIONAL COPIES OF SHAREHOLDER DOCUMENTS
ALL SCHWABFUNDS PROSPECTUSES AND SHAREHOLDER REPORTS ARE AVAILABLE FREE OF
CHARGE AND MAY BE REQUESTED AT ANY TIME BY CALLING SCHWAB AS INDICATED BELOW.
SCHWABFUNDS PROSPECTUSES ARE ALSO AVAILABLE ON OUR WEB SITE AT
WWW.SCHWAB.COM/SCHWABFUNDS.
NOTIFICATION INSTRUCTIONS
If you would prefer that your SchwabFunds mailings not be householded, please
contact:
- SCHWAB SIGNATURE SERVICES-TM- CLIENTS: Schwab Signature Services.
- INVESTMENT MANAGER CLIENTS: Schwab at 800-515-2157, or your investment
manager.
- ALL OTHER CLIENTS: Schwab at 800-435-4000.
Your instructions that householding not apply to your accounts holding
SchwabFunds will be effective within 30 days of receipt by Schwab.
<PAGE>
SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
MONEY FUNDS
/ / SCHWAB MONEY MARKET FUND
/ / SCHWAB GOVERNMENT
MONEY FUND
/ / SCHWAB U.S. TREASURY
MONEY FUND
Semiannual Report
June 30, 2000
<PAGE>
SCHWAB MONEY FUNDS
We're pleased to bring you this semiannual report for the following funds (the
funds) for the six-month period ended June 30, 2000:
- Schwab Money Market Fund
- Schwab Government Money Fund
- Schwab U.S. Treasury Money Fund
During the reporting period, the funds continued to provide competitive money
market returns, combined with stability of capital and liquidity.
The funds presented in this report are Sweep Investments-TM- that are designed
for your cash balances requiring frequent access. The funds can be conveniently
linked to your Schwab account to serve as a primary sweep money fund. For your
larger cash balances that do not require frequent access, you may wish to
consider the Schwab Value Advantage Investments-Registered Trademark-. You'll
find more information on Schwab's money funds on page 3 of this report.
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.
CONTENTS
<TABLE>
<S> <C>
---------------------------------------------
A Message from the Chairman 1
---------------------------------------------
What Money Fund Investors Should Know 2
---------------------------------------------
Market Overview 5
---------------------------------------------
Portfolio Management 9
---------------------------------------------
Schwab Money Market Fund 10
---------------------------------------------
Schwab Government Money Fund 11
---------------------------------------------
Schwab U.S. Treasury Money Fund 12
---------------------------------------------
Fund Discussion 13
---------------------------------------------
Glossary of Terms 14
---------------------------------------------
Portfolio Highlights 15
---------------------------------------------
Financial Statements and Notes 17
---------------------------------------------
</TABLE>
<PAGE>
A MESSAGE FROM THE CHAIRMAN
[PHOTO]
Dear Shareholder,
During the last few years, the benefits of investing have been readily apparent,
while the risks have been somewhat less obvious. In recent months, however,
investors have been subject to larger swings in the market, even within the span
of a single day.
Given this divergent environment, the message is clear: Expect volatility,
maintain a long-term view and ensure your investment strategy is appropriate for
your risk tolerance and time horizon. One way to lessen the impact of volatility
on your portfolio is to adequately diversify your investments, both within and
across asset sectors, namely cash equivalents, bonds and stocks. With its broad
range of funds, SchwabFunds-Registered Trademark- can help form the foundation
of a diversified investment plan. Our asset allocation funds can even provide
diversification within a single fund.
We recently added four new sector funds, the Schwab Focus Funds, to our
SchwabFunds offering. Each invests in a group of industries within a specific
sector--Communications, Financial Services, Healthcare and Technology--and can
be an effective complement to individual stock investing. Each Focus Fund
concentrates its investing in companies in a specific sector and may involve a
greater degree of risk than an investment in mutual funds with greater
diversification. For more information on the Schwab Focus Funds, please call
800-435-4000 and request a prospectus. The prospectus contains more information
on fund fees and expenses as well as risks. Please read it carefully before
investing.
As a leader in online brokerage, we recognize the value of the web as a means of
communicating timely, relevant information to investors. Regular updates on all
of the SchwabFunds, including performance data, are available on our Web site at
www.schwab.com/schwabfunds. We encourage you to take advantage of this valuable
resource.
Thank you for your investment in SchwabFunds. For our part, we at SchwabFunds
will do everything we can to warrant the trust you have placed in us.
Sincerely,
/s/ Charles R. Schwab
Charles R. Schwab
June 30, 2000
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, money market securities or
funds, 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. 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. 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 convenient access to
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 brokerage account, consider an account that has a "sweep"
feature. Accounts with this feature automatically "sweep" uninvested cash 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 in your account. This convenience
may be well worth the small additional cost.
LARGER CASH BALANCES: You may earn higher yields 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. These funds
typically have higher minimum balance requirements and transaction policies
designed to minimize fund operating expenses, and 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 money funds seek to preserve the value of your investment at
$1 per share, it is possible to lose money by investing in a money fund.
(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>
SCHWAB MONEY FUNDS
Schwab offers two types of money funds--Sweep Investments-TM- and Value
Advantage Investments-Registered Trademark-. Both include funds that offer
taxable and tax-free income. 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 portfolio.
SWEEP INVESTMENTS are designed for your cash balances requiring frequent access.
These funds can be linked to your Schwab account to serve as a primary sweep
money fund. That means uninvested cash in your Schwab brokerage account is
automatically swept in and out of the fund, based on transactions in your
account and the terms and conditions of your account agreement.
VALUE ADVANTAGE INVESTMENTS are designed for your larger cash balances that
don't require frequent access. Value Advantage Investments have higher minimum
initial and ongoing balance requirements than Sweep Investments. These
requirements, along with policies designed to discourage frequent transactions,
can help minimize fund expenses--which in turn can mean higher returns for
investors. Value Advantage Investments cannot be linked to your Schwab account
to serve as your primary sweep fund.
Schwab offers a variety of 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 TAXABLE MONEY FUNDS
SCHWAB MONEY MARKET FUND A high-quality money fund for investors interested in
the potential for high money market yields.
SCHWAB VALUE ADVANTAGE MONEY FUND-REGISTERED TRADEMARK- A high-quality money
fund designed for larger cash balances that don't require frequent access.
SCHWAB GOVERNMENT MONEY FUND Designed for investors who want current money
market yields along with the added margin of safety provided by a portfolio of
U.S. government securities and repurchase agreements.
SCHWAB U.S. TREASURY MONEY FUND Of all the money funds offered by Schwab, this
one seeks to provide the highest degree of safety. The fund invests exclusively
in U.S. Treasury securities and other investments that are backed by the full
faith and credit of the U.S. government. What's more, income from the fund is
generally free from state and local income taxes.
SCHWAB MUNICIPAL MONEY FUNDS(1)
SCHWAB MUNICIPAL MONEY FUND A high-quality municipal money fund that seeks to
provide income that is free from federal income tax.
SCHWAB STATE-SPECIFIC MUNICIPAL MONEY FUNDS Each of these funds is designed for
taxpayers of a particular state and seeks to provide income that is exempt from
federal, state and, in some cases, local income taxes. The Schwab Florida
Municipal Money Fund also seeks to have its shares exempt from the Florida
Intangible Tax.
- 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
(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.
3
<PAGE>
WHAT MONEY FUND INVESTORS SHOULD KNOW (continued)
The table below presents the various money fund choices available at Schwab.
<TABLE>
<CAPTION>
VALUE ADVANTAGE
TAXABLE MONEY FUNDS SWEEP INVESTMENTS-TM- INVESTMENTS-REGISTERED TRADEMARK-
<S> <C> <C>
------------------------------------------------------------------------------------------------------------
Schwab Money Market Fund -
------------------------------------------------------------------------------------------------------------
Schwab Value Advantage Money Fund--Investor Shares -
------------------------------------------------------------------------------------------------------------
Schwab Government Money Fund -
------------------------------------------------------------------------------------------------------------
Schwab U.S. Treasury Money Fund -
------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY FUNDS
<S> <C> <C>
------------------------------------------------------------------------------------------------------------
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 -
------------------------------------------------------------------------------------------------------------
</TABLE>
If you would like more information on any of these funds, please call
800-435-4000 and request a prospectus. The prospectus contains more information
on fund fees and expenses as well as risks. Please read it carefully before
investing.
WE MAKE IT EASY TO INVEST
We make it easy and convenient to invest in SchwabFunds-Registered Trademark-.
You can invest through our Web site at www.schwab.com or through our automated
touch-tone telephone service, TeleBroker by calling 800-272-4922. Or, you can
visit any of our more than 350 nationwide branches.
Schwab MoneyLink-Registered Trademark- lets you transfer money electronically,
safely and easily between your Schwab account and your accounts at other
financial institutions--at regularly scheduled intervals or upon request. For
more information on MoneyLink, call 800-435-4000.
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
current information about our investment philosophy and funds, including
performance updates, can be found at our Web site: www.schwab.com/schwabfunds
4
<PAGE>
MARKET OVERVIEW
U.S. ECONOMIC GROWTH REMAINS STRONG
April 2000 marked the beginning of the tenth year of the current economic
expansion, the longest in U.S. history. Gross Domestic Product (GDP) grew at a
real (inflation adjusted) rate of 4.6% during 1999--the fourth consecutive year
at 4% or more--and 5.0% during the first half of 2000. These rates are
considered by most economists and the Federal Reserve (Fed) to be in excess of
what the economy can absorb without experiencing inflationary pressures--perhaps
3.5% to 4.0%. High levels of consumer spending fueled by rising incomes,
personal wealth and consumer confidence, as well as strong business capital
investment and a healthy housing sector, have been the principal factors driving
this lengthy expansion.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REAL GROSS DOMESTIC PRODUCT
QUARTERLY PERCENTAGE CHANGE (ANNUALIZED RATE)
<S> <C>
Q1 1990 5.00%
Q2 1990 1.00%
Q3 1990 -0.60%
Q4 1990 -3.00%
Q1 1991 -1.70%
Q2 1991 2.60%
Q3 1991 1.30%
Q4 1991 2.50%
Q1 1992 4.30%
Q2 1992 4.00%
Q3 1992 3.10%
Q4 1992 5.20%
Q1 1993 -0.70%
Q2 1993 2.10%
Q3 1993 1.50%
Q4 1993 6.00%
Q1 1994 3.60%
Q2 1994 5.70%
Q3 1994 2.20%
Q4 1994 5.10%
Q1 1995 1.50%
Q2 1995 0.80%
Q3 1995 3.20%
Q4 1995 3.30%
Q1 1996 2.90%
Q2 1996 6.90%
Q3 1996 2.20%
Q4 1996 4.90%
Q1 1997 4.90%
Q2 1997 5.10%
Q3 1997 4.00%
Q4 1997 3.10%
Q1 1998 6.70%
Q2 1998 2.10%
Q3 1998 3.80%
Q4 1998 5.90%
Q1 1999 3.70%
Q2 1999 1.90%
Q3 1999 5.70%
Q4 1999 7.30%
Q1 2000 4.80%
Q2 2000 5.20%
Source: BLOOMBERG L.P.
</TABLE>
Looking ahead, the availability of scarce labor resources and domestic
consumers' responses to continued market volatility may be key determinants of
whether the economy continues on its current course or softens in the second
half of 2000. The Fed has raised the federal funds rate a total of 1.75% since
June 1999.
Although preliminary signs may indicate a second half slowdown in the vigorous
growth rate of the economy, opinions vary with regard to future federal funds
rate increases. Most economists do agree, however, that the U.S. economy appears
poised for continued strong growth in 2000, albeit at lower rates than
experienced in the first half.
UNEMPLOYMENT CONTINUES TO BE VERY LOW
As employment growth continues to exceed population growth, the unemployment
rate remains very low. In fact, the 3.9% rate for April 2000 represented the
lowest level in 30 years. Labor markets continue to be extremely tight in many
areas of the country, reflecting a shrinking pool of available workers.
Another closely watched metric, the labor force participation rate, which
measures the employment population as a percentage of the total population, is
at a post-war high. While growth in the labor force has recently declined, the
Fed has expressed its concern that continued tight labor markets and the related
increases in wages may put further pressure on manufacturers and service
providers to raise prices.
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 6.8%
Feb-94 6.6%
Mar-94 6.5%
Apr-94 6.4%
May-94 6.1%
Jun-94 6.1%
Jul-94 6.3%
Aug-94 6.0%
Sep-94 5.8%
Oct-94 5.8%
Nov-94 5.6%
Dec-94 5.5%
Jan-95 5.6%
Feb-95 5.4%
Mar-95 5.3%
Apr-95 5.8%
May-95 5.8%
Jun-95 5.6%
Jul-95 5.6%
Aug-95 5.7%
Sep-95 5.6%
Oct-95 5.5%
Nov-95 5.7%
Dec-95 5.6%
Jan-96 5.6%
Feb-96 5.5%
Mar-96 5.6%
Apr-96 5.5%
May-96 5.6%
Jun-96 5.3%
Jul-96 5.5%
Aug-96 5.1%
Sep-96 5.2%
Oct-96 5.2%
Nov-96 5.3%
Dec-96 5.4%
Jan-97 5.3%
Feb-97 5.3%
Mar-97 5.1%
Apr-97 5.0%
May-97 4.7%
Jun-97 5.0%
Jul-97 4.7%
Aug-97 4.9%
Sep-97 4.7%
Oct-97 4.7%
Nov-97 4.6%
Dec-97 4.7%
Jan-98 4.5%
Feb-98 4.6%
Mar-98 4.6%
Apr-98 4.3%
May-98 4.3%
Jun-98 4.5%
Jul-98 4.5%
Aug-98 4.5%
Sep-98 4.5%
Oct-98 4.5%
Nov-98 4.4%
Dec-98 4.3%
Jan-99 4.3%
Feb-99 4.4%
Mar-99 4.2%
Apr-99 4.3%
May-99 4.2%
Jun-99 4.3%
Jul-99 4.3%
Aug-99 4.2%
Sep-99 4.2%
Oct-99 4.1%
Nov-99 4.1%
Dec-99 4.1%
Jan-00 4.0%
Feb-00 4.1%
Mar-00 4.1%
Apr-00 3.9%
May-00 4.1%
Jun-00 4.0%
Source: BLOOMBERG L.P.
</TABLE>
5
<PAGE>
MARKET OVERVIEW (continued)
INFLATION REMAINS CONTAINED, BUT CONCERNS EMERGE
Virtually all measures of price inflation exhibited upward trends during the
reporting period. The Consumer Price Index (CPI) rose 3.7% for the year ended
June 2000. CPI's core rate (which excludes the more volatile food and energy
components) trended up to 2.4%. The Personal Consumption Expenditures Index, a
measure of inflation closely watched by the Fed, rose 2.6% for the same period.
The GDP price deflator, the broadest measure of inflation, indicated prices
rising at an annual rate of 2.9% during the first half of 2000.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMPLOYMENT COST INDEX CONSUMER PRICE INDEX
MEASURES OF INFLATION 12 - MONTH CHANGE (QUARTERLY) 12 - MONTH CHANGE (MONTHLY)
<S> <C> <C>
Jan-90 5.5% 5.2%
Feb-90 5.5% 5.3%
Mar-90 5.5% 5.2%
Apr-90 5.4% 4.7%
May-90 5.4% 4.4%
Jun-90 5.4% 4.7%
Jul-90 5.2% 4.8%
Aug-90 5.2% 5.6%
Sep-90 5.2% 6.2%
Oct-90 4.9% 6.3%
Nov-90 4.9% 6.3%
Dec-90 4.9% 6.1%
Jan-91 4.6% 5.7%
Feb-91 4.6% 5.3%
Mar-91 4.6% 4.9%
Apr-91 4.6% 4.9%
May-91 4.6% 5.0%
Jun-91 4.6% 4.7%
Jul-91 4.3% 4.4%
Aug-91 4.3% 3.8%
Sep-91 4.3% 3.4%
Oct-91 4.3% 2.9%
Nov-91 4.3% 3.0%
Dec-91 4.3% 3.1%
Jan-92 4.0% 2.6%
Feb-92 4.0% 2.8%
Mar-92 4.0% 3.2%
Apr-92 3.6% 3.2%
May-92 3.6% 3.0%
Jun-92 3.6% 3.1%
Jul-92 3.5% 3.2%
Aug-92 3.5% 3.1%
Sep-92 3.5% 3.0%
Oct-92 3.5% 3.2%
Nov-92 3.5% 3.0%
Dec-92 3.5% 2.9%
Jan-93 3.5% 3.3%
Feb-93 3.5% 3.2%
Mar-93 3.5% 3.1%
Apr-93 3.6% 3.2%
May-93 3.6% 3.2%
Jun-93 3.6% 3.0%
Jul-93 3.6% 2.8%
Aug-93 3.6% 2.8%
Sep-93 3.6% 2.7%
Oct-93 3.5% 2.8%
Nov-93 3.5% 2.7%
Dec-93 3.5% 2.7%
Jan-94 3.2% 2.5%
Feb-94 3.2% 2.5%
Mar-94 3.2% 2.5%
Apr-94 3.2% 2.4%
May-94 3.2% 2.3%
Jun-94 3.2% 2.5%
Jul-94 3.2% 2.8%
Aug-94 3.2% 2.9%
Sep-94 3.2% 3.0%
Oct-94 3.0% 2.6%
Nov-94 3.0% 2.7%
Dec-94 3.0% 2.7%
Jan-95 2.9% 2.8%
Feb-95 2.9% 2.9%
Mar-95 2.9% 2.9%
Apr-95 2.9% 3.1%
May-95 2.9% 3.2%
Jun-95 2.9% 3.0%
Jul-95 2.7% 2.8%
Aug-95 2.7% 2.6%
Sep-95 2.7% 2.5%
Oct-95 2.7% 2.8%
Nov-95 2.7% 2.6%
Dec-95 2.7% 2.5%
Jan-96 2.8% 2.7%
Feb-96 2.8% 2.7%
Mar-96 2.8% 2.8%
Apr-96 2.9% 2.9%
May-96 2.9% 2.9%
Jun-96 2.9% 2.8%
Jul-96 2.8% 3.0%
Aug-96 2.8% 2.9%
Sep-96 2.8% 3.0%
Oct-96 2.9% 3.0%
Nov-96 2.9% 3.3%
Dec-96 2.9% 3.3%
Jan-97 2.9% 3.0%
Feb-97 2.9% 3.0%
Mar-97 2.9% 2.8%
Apr-97 2.8% 2.5%
May-97 2.8% 2.2%
Jun-97 2.8% 2.3%
Jul-97 3.0% 2.2%
Aug-97 3.0% 2.2%
Sep-97 3.0% 2.2%
Oct-97 3.3% 2.1%
Nov-97 3.3% 1.8%
Dec-97 3.3% 1.7%
Jan-98 3.3% 1.6%
Feb-98 3.3% 1.4%
Mar-98 3.3% 1.4%
Apr-98 3.5% 1.4%
May-98 3.5% 1.7%
Jun-98 3.5% 1.7%
Jul-98 3.7% 1.7%
Aug-98 3.7% 1.6%
Sep-98 3.7% 1.5%
Oct-98 3.4% 1.5%
Nov-98 3.4% 1.5%
Dec-98 3.4% 1.6%
Jan-99 3.0% 1.7%
Feb-99 3.0% 1.6%
Mar-99 3.0% 1.7%
Apr-99 3.2% 2.3%
May-99 3.2% 2.1%
Jun-99 3.2% 2.0%
Jul-99 3.1% 2.1%
Aug-99 3.1% 2.3%
Sep-99 3.1% 2.6%
Oct-99 3.4% 2.6%
Nov-99 3.4% 2.6%
Dec-99 3.4% 2.7%
Jan-00 4.3% 2.7%
Feb-00 4.3% 3.2%
Mar-00 4.3% 3.7%
Apr-00 4.4% 3.0%
May-00 4.4% 3.1%
Jun-00 4.4% 3.7%
Source: BLOOMBERG L.P. AND BUREAU OF LABOR STATISTICS
</TABLE>
Wage inflation also exhibited a marked upward trend during the reporting period,
as indicated by the Employment Cost Index (ECI). The ECI which measures the cost
of employing workers, including both wages and benefits, rose 4.4% for the year
ended June 2000.
Although these rates of inflation and employment cost may not be alarmingly high
by historical standards, the Fed has demonstrated its resolve to keep inflation
at bay in both its communications and its actions (six federal funds rate
increases since June 1999).
The Fed also has expressed concern that if labor markets continue to tighten,
increases in wages may outpace productivity growth and place additional upward
pressure on prices. Productivity growth becomes particularly critical in this
environment as it enables companies to pay higher wages without raising prices.
Non-farm productivity grew 3.0% in 1999 and at a healthy 3.6% rate in the first
half of 2000.
ASSET CLASS PERFORMANCE--SMALL-CAPS AND TECH STOCKS ARE VOLATILE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN RUSSELL 2000
AGGREGATE MSCI-EAFE SMALL-CAP S&P 500
ASSET CLASS PERFORMANCE BOND INDEX INDEX INDEX INDEX
<S> <C> <C> <C> <C>
1/7/00 -0.06% -4.56% -3.23% -1.89%
1/14/00 -0.52% -2.21% 0.60% -0.28%
1/21/00 -0.68% -4.39% 5.82% -1.90%
1/28/00 -0.01% -4.83% 0.05% -7.42%
2/4/00 0.12% -2.85% 4.21% -2.99%
2/11/00 -0.17% -2.30% 6.54% -5.53%
2/18/00 0.37% -3.76% 8.26% -8.32%
2/25/00 1.02% -3.01% 10.45% -9.19%
3/3/00 1.20% -0.97% 18.72% -3.92%
3/10/00 1.00% -0.99% 19.84% -4.88%
3/17/00 1.69% -2.17% 14.09% -0.15%
3/24/00 1.57% -0.25% 14.01% 4.14%
3/31/00 2.20% -0.40% 7.09% 2.27%
4/7/00 3.02% -1.40% 7.88% 3.48%
4/14/00 2.95% -4.85% -9.80% -7.42%
4/21/00 2.85% -5.64% -4.23% -2.10%
4/28/00 1.90% -5.73% 0.64% -0.81%
5/5/00 0.47% -6.12% 1.98% -2.16%
5/12/00 0.34% -7.08% -2.33% -2.95%
5/19/00 0.54% -10.41% -4.56% -3.91%
5/26/00 1.64% -9.93% -8.97% -5.89%
6/2/00 2.83% -3.95% 2.11% 1.04%
6/9/00 3.15% -4.10% 4.16% -0.35%
6/16/00 4.02% -4.46% 2.37% 0.17%
6/23/00 3.05% -5.35% 1.75% -1.40%
6/30/00 3.99% -4.06% 3.04% -0.42%
</TABLE>
COMPILED BY CHARLES SCHWAB & CO., INC.
As shown on the chart above, equity valuations, and particularly those of
small-cap and technology stocks, exhibited extreme volatility during the
reporting period.
The price/earnings (P/E) ratio for the NASDAQ 100 Index fell by 33% in just 14
trading days in March and
6
<PAGE>
April. Remarkably, it still remained at levels above 100 even after this
precipitous decline.
Small-cap stocks, as represented by the Russell 2000 Index, achieved a total
return of 3.04% for the six-month reporting period. Large cap stocks, as
represented by the S&P 500 Index, produced a negative return of -0.42% for the
same period.
Dampened by relatively weak foreign currencies, international stocks, as
represented by the MSCI EAFE Index, achieved a negative return of -4.06% for the
reporting period. Fixed income returns, on the other hand, were generally
positive for the reporting period, reflecting a decline in intermediate and
long-term interest rates. Bond returns, as represented by the Lehman Brothers
Aggregate Bond Index, were 3.99% for the six-month reporting period.
TREASURY BOND YIELDS--THE YIELD CURVE INVERTS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
10-YEAR AND FIVE-YEAR TREASURY BOND YIELDS 10-YEAR TREASURY BOND YIELD FIVE-YEAR TREASURY NOTE YIELD
<S> <C> <C>
1/7/00 6.52% 6.41%
1/14/00 6.68% 6.58%
1/21/00 6.77% 6.63%
1/28/00 6.66% 6.66%
2/4/00 6.55% 6.65%
2/11/00 6.60% 6.70%
2/18/00 6.49% 6.68%
2/25/00 6.33% 6.47%
3/3/00 6.39% 6.59%
3/10/00 6.38% 6.60%
3/17/00 6.19% 6.45%
3/24/00 6.19% 6.50%
3/31/00 6.00% 6.31%
4/7/00 5.58% 6.18%
4/14/00 5.58% 6.11%
4/21/00 5.99% 6.24%
4/28/00 6.21% 6.54%
5/5/00 6.51% 6.76%
5/12/00 6.51% 6.77%
5/19/00 6.49% 6.70%
5/26/00 6.33% 6.57%
6/2/00 6.15% 6.37%
6/9/00 6.13% 6.36%
6/16/00 5.97% 6.18%
6/23/00 6.19% 6.37%
6/30/00 6.03% 6.19%
Source: BLOOMBERG L.P.
</TABLE>
Treasury bond yields exhibited an unusual pattern during the reporting period.
Yields on ten and 30-year treasury securities typically exceed those of
five-year securities to compensate investors for the additional interest rate
risk associated with longer duration securities. As shown in the graph above,
however, this normal relationship reversed in January resulting in what is
referred to as a negative yield curve.
This negative yield curve is a result of the accumulating budget surpluses,
which are allowing the federal government to downsize its debt. The Treasury
Department announced earlier this year that it plans to buy back $30 billion in
debt in 2000 starting with longer-dated maturities since those payments carry
the steepest interest payment. The anticipated reduction in supply resulting
from this buyback program, as well as scaled back issuance, bid up the price of
the longer-term securities and correspondingly reduced their yields during the
reporting period.
7
<PAGE>
MARKET OVERVIEW (continued)
SHORT-TERM INTEREST RATE ON THE RISE
Short-term interest rates increased during the reporting period, due to a
combination of a robust U.S. economy and the Fed's actions to increase the
federal funds rate from 5.5% at the beginning of the reporting period (January
1, 2000) to 6.5% by the end of the reporting period (June 30, 2000).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
90-DAY COMMERCIAL PAPER THREE-MONTH 90-DAY
AND THREE-MONTH TREASURY BILL YIELDS TREASURY BILL COMMERCIAL PAPER
<S> <C> <C>
1/7/00 5.38% 5.66%
1/14/00 5.40% 5.71%
1/21/00 5.46% 5.77%
1/28/00 5.62% 5.79%
2/4/00 5.66% 5.85%
2/11/00 5.63% 5.86%
2/18/00 5.75% 5.86%
2/25/00 5.77% 5.88%
3/3/00 5.82% 5.89%
3/10/00 5.89% 5.91%
3/17/00 5.87% 6.00%
3/24/00 5.90% 6.05%
3/31/00 5.87% 6.09%
4/7/00 5.89% 6.09%
4/14/00 5.78% 6.08%
4/21/00 5.80% 6.12%
4/28/00 5.83% 6.17%
5/5/00 5.97% 6.41%
5/12/00 6.13% 6.54%
5/19/00 5.87% 6.59%
5/26/00 5.83% 6.61%
6/2/00 5.87% 6.62%
6/9/00 5.91% 6.57%
6/16/00 5.83% 6.57%
6/23/00 5.84% 6.57%
6/30/00 5.85% 6.58%
Source: BLOOMBERG L.P.
</TABLE>
THIS MARKET OVERVIEW HAS BEEN PROVIDED BY THE PORTFOLIO MANAGEMENT TEAM.
8
<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.
LINDA KLINGMAN--vice president and senior portfolio manager, has managed the
Schwab Money Market Fund since April of 1991. Linda joined CSIM in 1990 and was
promoted to her current position in August 1996. Prior to joining CSIM, Linda
was senior money market trader with AIM Management.
KAREN WIGGAN--portfolio manager, has managed the Schwab Government Money Fund
and the Schwab U.S. Treasury Fund since March 1999. Karen joined Schwab in 1986,
CSIM in 1991, and was promoted to her current position in March 1999.
9
<PAGE>
SCHWAB MONEY MARKET FUND
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<S> <C>
--------------------------------------------------------------------
Seven-Day Current Yield 5.84%
--------------------------------------------------------------------
Seven-Day Effective Yield 6.02%
--------------------------------------------------------------------
</TABLE>
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 expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
PORTFOLIO COMPOSITION
The Schwab Money Market Fund invests in high-quality short-term money market
investments issued by U.S. and foreign issuers, such as commercial paper,
including asset-backed commercial paper, certificates of deposit, variable and
floating-rate debt securities, bank notes and repurchase agreements. The chart
to the right illustrates the composition of the fund's portfolio as of June 30,
2000 and is not indicative of its holdings after that date. A complete list of
the securities in the fund's portfolio as of June 30, 2000 is provided in the
Schedule of Investments later in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
Commercial Paper and other Corporate Obligations 59.3%
Certificates of Deposit 27.2%
Variable Rate Obligations 5.4%
Bank Notes 3.9%
Repurchase Agreements 4.2%
</TABLE>
10
<PAGE>
SCHWAB GOVERNMENT MONEY FUND
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<S> <C>
--------------------------------------------------------------------
Seven-Day Current Yield 5.64%
--------------------------------------------------------------------
Seven-Day Effective Yield 5.80%
--------------------------------------------------------------------
</TABLE>
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 expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
PORTFOLIO COMPOSITION
The Schwab Government Money Fund invests in U.S. government securities such as
U.S. Treasury bills, notes and bonds and other obligations that are issued or
guaranteed by the U.S. government, its agencies or instrumentalities including
Fannie Maes, Freddie Macs and Sallie Maes, and repurchase agreements for these
securities. The chart to the right illustrates the composition of the fund's
portfolio as of June 30, 2000 and is not indicative of its holdings after that
date. A complete list of the securities in the fund's portfolio as of June 30,
2000 is provided in the Schedule of Investments later in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
U.S. Government Securities 63.5%
Repurchase Agreements 36.5%
</TABLE>
11
<PAGE>
SCHWAB U.S. TREASURY MONEY FUND
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<S> <C>
--------------------------------------------------------------------
Seven-Day Current Yield 5.28%
--------------------------------------------------------------------
Seven-Day Effective Yield 5.42%
--------------------------------------------------------------------
</TABLE>
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 expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
PORTFOLIO COMPOSITION
The Schwab U.S. Treasury Money Fund invests exclusively in securities backed by
the full faith and credit of the U.S. government, such as U.S. Treasury notes,
bills and bonds. The chart to the right illustrates the composition of the
fund's portfolio as of June 30, 2000 and is not indicative of its holdings after
that date. A complete list of the securities in the fund's portfolio as of
June 30, 2000 is provided in the Schedule of Investments later in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
U.S. Treasury Obligations 100%
</TABLE>
12
<PAGE>
FUND DISCUSSION
QUESTIONS TO THE
PORTFOLIO MANAGEMENT TEAM
Q. CAN YOU DESCRIBE THE SHORT-TERM INTEREST RATE ENVIRONMENT DURING THE
SIX-MONTH REPORTING PERIOD?
A. Short-term interest rates increased during the reporting period, resulting
from the strength of the U.S. economy and actions taken by the Federal Reserve
(Fed) to slow the pace of the economy and stem inflationary pressures. During
the reporting period, the U.S. economy continued to grow rapidly, in spite of
six separate interest rate hikes imposed by the Fed during the past year. Strong
employment and record high equity values stimulated consumer spending, a key
factor fueling the economy. As a result, gross domestic product (GDP) advanced
strongly at a 5.0% annualized growth rate as of June 30, 2000. The Fed has
expressed concern that if the present rate of growth continues, inflationary
pressures could derail nine and a half years of economic expansion.
In the first half of the reporting period, the Fed adhered to a gradual approach
to slowing down the economy by twice raising the federal funds rate by 0.25%, in
February and March 2000. When April's unemployment rate declined to 3.9%, the
lowest level in 30 years, the Fed abandoned its gradual approach and raised the
federal funds rate by 0.50% in May. This increase lifted the federal funds rate
to 6.5%, its highest level since 1991.
Q. HOW HAS THE PORTFOLIO MANAGEMENT TEAM ADJUSTED THE FUNDS' PORTFOLIOS IN
RESPONSE TO CHANGES IN INTEREST RATES?
A. As discussed in the first question, the reporting period was characterized by
a sharply rising interest rate environment. During this period, we restructured
our funds' portfolios and implemented a "barbell" strategy, with most of the
portfolios in shorter-term and longer-term maturities, and fewer in the middle
range, although still within the confines of the funds' prospectus guidelines.
The benefits of this strategy are that in an increasing interest rate
environment, the proceeds from the shorter term securities can be reinvested at
the higher prevailing rates. Further, the longer-dated maturities generally
offer higher yields.
SEC regulations require that money funds maintain a dollar-weighted average
maturity (DWAM) of no more than 90 days at all times while each individual
security purchased must mature in 397 days or less. Money funds' DWAMs will vary
depending on their respective investment managers' outlook for interest rates
and will vary over time as that outlook changes. Our long-term strategy is to
maintain DWAMs that are slightly longer than those of other money funds with
similar investment objectives. We deviated from this strategy somewhat during
the reporting period by shortening the funds' DWAMs to be comparable to those of
our peers. Shortening the funds' DWAMs allowed the funds to take advantage of
the rising rate environment by investing in higher yielding securities, as
explained above.
13
<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 values 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.
14
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB MONEY MARKET FUND
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<S> <C>
-------------------------------------------
Last seven days 5.84%
-------------------------------------------
Last three months 5.58%
-------------------------------------------
Last 12 months 5.09%
-------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
-----------------------------------------------
0-15 days 14.6% 28.2%
-----------------------------------------------
16-30 days 15.4% 23.7%
-----------------------------------------------
31-60 days 32.8% 8.7%
-----------------------------------------------
61-90 days 24.6% 13.4%
-----------------------------------------------
91-120 days 3.0% 10.5%
-----------------------------------------------
More than 120 days 9.6% 15.5%
-----------------------------------------------
Weighted average 62 days 63 days
-----------------------------------------------
</TABLE>
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 6/30/00
<S> <C>
----------------------------------------------------------------------------------
Tier 1 100.0%
----------------------------------------------------------------------------------
</TABLE>
SCHWAB GOVERNMENT MONEY FUND
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<S> <C>
-------------------------------------------
Last seven days 5.64%
-------------------------------------------
Last three months 5.45%
-------------------------------------------
Last 12 months 4.92%
-------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
-----------------------------------------------
0-15 days 45.9% 54.9%
-----------------------------------------------
16-30 days 8.0% 7.3%
-----------------------------------------------
31-60 days 15.3% 5.7%
-----------------------------------------------
61-90 days 10.5% 13.2%
-----------------------------------------------
91-120 days 5.3% 3.4%
-----------------------------------------------
More than 120 days 15.0% 15.5%
-----------------------------------------------
Weighted average 61 days 54 days
-----------------------------------------------
</TABLE>
(1) A portion of the fund's expenses was reduced during these periods. Without
this reduction, yields would have been lower.
15
<PAGE>
PORTFOLIO HIGHLIGHTS (continued)
SCHWAB U.S. TREASURY MONEY FUND
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<S> <C>
-------------------------------------------
Last seven days 5.28%
-------------------------------------------
Last three months 5.17%
-------------------------------------------
Last 12 months 4.65%
-------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
-----------------------------------------------
0-15 days 3.0% 8.5%
-----------------------------------------------
16-30 days 30.2% 10.3%
-----------------------------------------------
31-60 days 18.5% 28.5%
-----------------------------------------------
61-90 days 20.7% 18.7%
-----------------------------------------------
91-120 days 5.9% 14.5%
-----------------------------------------------
More than 120 days 21.7% 19.5%
-----------------------------------------------
Weighted average 70 days 67 days
-----------------------------------------------
</TABLE>
(1) A portion of the fund's expenses was reduced during these periods. Without
this reduction, yields would have been lower.
16
<PAGE>
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- 59.4%
AUTOMOTIVE -- 1.9%
FCE Bank, PLC
6.61%, 07/06/00 $ 20,000 $ 19,982
6.56%, 07/07/00 25,000 24,973
6.57%, 07/12/00 50,000 49,900
Ford Motor Credit
6.60%, 07/06/00 200,000 199,818
6.60%, 07/07/00 143,000 142,844
General Motors Acceptance Corp.
6.25%, 07/18/00 69,000 68,800
6.66%, 07/21/00 249,000 248,088
-----------
754,405
-----------
BANKING - AUSTRALIA -- 0.6%
CBA (Delaware) Finance, Inc.
6.30%, 09/11/00 100,000 98,779
6.30%, 09/13/00 75,000 74,059
National Australia Funding (Delaware), Inc.
6.79%, 07/06/00 20,000 19,981
6.81%, 07/06/00 60,000 59,943
-----------
252,762
-----------
BANKING - BELGIUM -- 1.0% (a)
BBL North America
6.59%, 07/10/00 100,000 99,836
6.57%, 07/13/00 50,000 49,891
Fortis Funding, L.L.C.
6.21%, 07/05/00 25,000 24,983
6.14%, 07/10/00 50,000 49,925
6.49%, 08/04/00 19,000 18,886
6.71%, 09/07/00 50,000 49,377
6.70%, 09/21/00 50,000 49,249
6.72%, 10/02/00 50,000 49,147
-----------
391,294
-----------
BANKING - CANADA -- 0.8%
Bank of Nova Scotia
6.58%, 07/11/00 50,000 49,909
National Bank of Canada
6.48%, 09/27/00 140,000 137,852
6.47%, 10/10/00 20,000 19,649
6.60%, 10/24/00 100,000 97,959
-----------
305,369
-----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
BANKING - DENMARK -- 0.7%
Den Danske Corp.
6.58%, 07/05/00 $ 12,700 $ 12,691
6.72%, 09/25/00 100,000 98,423
Unifunding, Inc.
6.57%, 07/11/00 50,000 49,910
6.18%, 07/14/00 100,000 99,781
-----------
260,805
-----------
BANKING - FRANCE -- 2.1%
Dexia CLF Finance Co.
6.22%, 07/05/00 40,000 39,973
6.22%, 07/06/00 24,000 23,979
6.25%, 07/17/00 149,000 148,592
6.49%, 09/29/00 30,000 29,529
6.46%, 10/04/00 75,000 73,761
Societe Generale, N.A.
6.57%, 07/14/00 150,000 149,647
Trident Capital Finance, Inc. (a)
6.66%, 07/10/00 85,300 85,159
6.66%, 07/11/00 55,100 54,999
6.65%, 08/07/00 100,000 99,325
6.68%, 08/09/00 118,000 117,156
-----------
822,120
-----------
BANKING - GERMANY -- 2.6%
Bavaria TRR Corp. (a)(e)
6.73%, 07/21/00 64,372 64,132
6.32%, 07/26/00 7,494 7,461
Comision Federal de Electricidad (e)
6.71%, 08/04/00 85,000 84,465
6.46%, 09/18/00 32,000 31,558
Deutsche Bank Financial, Inc.
6.24%, 07/17/00 233,000 232,364
6.64%, 08/03/00 405,000 402,561
Giro US Funding Corp. (a)(e)
6.32%, 07/26/00 38,940 38,772
6.51%, 08/01/00 50,838 50,558
6.51%, 08/02/00 43,943 43,693
6.71%, 09/05/00 30,422 30,053
6.40%, 09/15/00 10,326 10,191
-----------
995,808
-----------
BANKING - NETHERLANDS -- 2.9%
ABN-AMRO North America Finance, Inc.
6.48%, 09/29/00 125,000 123,039
</TABLE>
17
<PAGE>
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
Atlantis One Funding Corp. (e)
6.60%, 07/19/00 $ 150,000 $ 149,509
6.71%, 08/01/00 26,779 26,626
6.74%, 08/02/00 49,000 48,710
6.69%, 08/17/00 153,000 151,682
6.70%, 08/25/00 197,356 195,366
6.72%, 09/08/00 30,450 30,063
Tulip Funding Corp. (a)(e)
6.59%, 07/10/00 20,000 19,967
6.30%, 07/19/00 76,000 75,765
6.49%, 07/27/00 165,194 164,432
6.42%, 07/28/00 34,000 33,839
6.76%, 09/27/00 104,000 102,310
-----------
1,121,308
-----------
BANKING - NORWAY -- 0.6%
Christiania Capital Corp. (a)
6.71%, 09/21/00 55,000 54,174
Den Norske Bank
6.71%, 09/19/00 150,000 147,800
6.71%, 09/22/00 44,000 43,330
-----------
245,304
-----------
BANKING - SPAIN -- 0.2%
B.B.V. Finance (Delaware), Inc.
6.64%, 08/04/00 100,000 99,380
-----------
BANKING - SWEDEN -- 0.8%
AB Spintab
6.74%, 09/28/00 105,000 103,279
7.03%, 11/30/00 39,000 37,883
Forenings Sparbanken AB (Swedbank)
6.15%, 07/28/00 25,000 24,888
6.71%, 09/05/00 13,000 12,843
6.46%, 10/13/00 15,000 14,729
6.46%, 10/16/00 65,000 63,792
Nordbanken of North America, Inc.
6.72%, 09/26/00 50,000 49,201
-----------
306,615
-----------
BANKING - SWITZERLAND -- 1.2%
Credit Suisse First Boston, Inc. (a)
6.46%, 10/10/00 100,000 98,245
UBS Finance (Delaware), Inc.
6.93%, 07/05/00 375,000 374,712
-----------
472,957
-----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
BANKING - UNITED KINGDOM -- 1.4%
Abbey National Treasury Services, PLC
5.76%, 07/28/00 $ 250,000 $ 249,991
Barclays US Funding Corp.
6.69%, 07/10/00 200,000 199,666
Repeat Offering Securitization Entity, Inc. (a)(e)
6.29%, 07/25/00 54,712 54,487
6.49%, 07/28/00 56,649 56,378
-----------
560,522
-----------
BANKING - UNITED STATES -- 4.7%
Bank One Corp.
6.72%, 09/11/00 118,000 116,442
BankAmerica Corp.
6.68%, 08/02/00 112,000 111,345
6.70%, 10/30/00 85,000 83,149
6.73%, 11/01/00 300,000 293,327
6.80%, 11/03/00 250,000 244,297
6.80%, 11/06/00 50,000 48,832
7.02%, 11/21/00 25,000 24,326
6.95%, 12/12/00 225,000 218,122
Enterprise Funding Corp. (a)(e)
6.66%, 07/17/00 45,000 44,869
6.52%, 07/24/00 14,550 14,490
6.74%, 09/15/00 63,817 62,923
Forrestal Funding Master Trust (a)(e)
6.26%, 07/06/00 9,263 9,255
6.31%, 07/17/00 27,000 26,925
6.32%, 07/26/00 31,000 30,866
6.75%, 09/11/00 62,010 61,187
6.76%, 09/13/00 15,963 15,745
Intrepid Funding Master Trust (a)(e)
6.26%, 07/06/00 27,692 27,668
6.28%, 07/06/00 25,409 25,387
6.29%, 07/17/00 22,206 22,145
6.37%, 07/24/00 30,000 29,880
6.74%, 08/01/00 71,540 71,131
6.74%, 08/02/00 34,000 33,799
6.75%, 08/08/00 99,126 98,430
6.41%, 09/13/00 53,000 52,322
Kitty Hawk Funding Corp. (a)(e)
6.28%, 07/13/00 58,000 57,880
-----------
1,824,742
-----------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
CREDIT CARD RECEIVABLES -- 0.4% (a)(f)
Montauk Funding Corp.
6.63%, 07/20/00 $ 25,000 $ 24,913
6.69%, 08/17/00 75,000 74,352
Providian Master Trust Series 1993-3
6.70%, 07/10/00 11,000 10,981
6.74%, 07/26/00 28,000 27,870
-----------
138,116
-----------
DIVERSIFIED FINANCIAL ASSETS -- 16.9% (f)
Amsterdam Funding Corp. (a)
6.57%, 07/05/00 10,000 9,993
6.54%, 07/06/00 25,000 24,978
6.59%, 07/11/00 113,000 112,794
6.30%, 07/20/00 25,000 24,918
6.61%, 07/20/00 50,000 49,827
6.31%, 07/25/00 50,000 49,793
Bavaria Universal Funding Corp. (a)
6.66%, 07/05/00 66,000 65,951
6.59%, 07/10/00 20,000 19,967
6.59%, 07/13/00 11,000 10,976
6.60%, 07/14/00 42,400 42,299
6.60%, 07/17/00 37,500 37,391
6.31%, 07/20/00 10,000 9,967
6.31%, 09/01/00 29,000 28,695
6.91%, 11/07/00 51,800 50,560
7.06%, 11/28/00 10,400 10,104
Beta Finance, Inc. (a)
6.69%, 07/28/00 48,000 47,761
6.74%, 09/06/00 82,000 80,988
6.75%, 09/18/00 41,000 40,402
6.74%, 09/21/00 123,500 121,638
6.74%, 09/22/00 35,000 34,466
6.75%, 09/25/00 20,000 19,683
6.76%, 09/27/00 54,000 53,123
6.49%, 10/10/00 12,000 11,788
6.53%, 10/25/00 160,000 156,742
CC (USA), Inc. (a)
6.25%, 07/06/00 31,000 30,973
6.18%, 07/14/00 35,500 35,423
6.71%, 07/17/00 30,000 29,911
6.64%, 07/21/00 48,000 47,824
6.67%, 07/24/00 49,500 49,290
6.29%, 08/15/00 10,000 9,924
6.29%, 08/16/00 26,000 25,797
6.82%, 08/21/00 87,500 86,669
6.68%, 08/25/00 23,000 22,768
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
6.40%, 09/12/00 $ 13,000 $ 12,836
6.37%, 09/15/00 46,000 45,401
6.76%, 09/15/00 63,500 62,611
6.76%, 09/27/00 17,000 16,724
6.80%, 02/06/01 75,000 75,000
Charta Corp. (a)
6.30%, 07/19/00 15,000 14,953
6.61%, 07/20/00 40,000 39,862
6.63%, 07/27/00 74,275 73,923
Clipper Receivables Corp. (a)
6.59%, 07/06/00 33,000 32,970
6.60%, 07/13/00 50,000 49,891
Concord Minutemen Capital Co., L.L.C.
Series A (a)
6.55%, 07/07/00 10,000 9,989
6.70%, 07/07/00 11,078 11,066
6.59%, 07/12/00 25,000 24,950
6.29%, 07/20/00 15,065 15,016
6.38%, 08/23/00 91,000 90,163
6.75%, 09/14/00 50,000 49,310
6.41%, 09/18/00 64,000 63,128
6.45%, 09/20/00 70,000 69,011
6.89%, 10/18/00 70,000 68,578
Delaware Funding Corp. (a)
6.60%, 07/17/00 50,000 49,854
Dorada Finance, Inc. (a)
6.59%, 07/13/00 39,000 38,915
6.82%, 07/13/00 23,000 22,948
6.60%, 07/14/00 20,000 19,953
6.29%, 07/18/00 18,000 17,947
6.65%, 07/19/00 21,000 20,931
6.52%, 07/26/00 12,000 11,947
6.74%, 09/06/00 29,500 29,136
6.76%, 09/27/00 15,000 14,756
Greenwich Funding Corp. (d)
6.58%, 07/06/00 19,221 19,204
6.58%, 07/10/00 51,426 51,342
6.58%, 07/11/00 20,107 20,070
6.59%, 07/12/00 44,000 43,912
6.65%, 07/18/00 69,718 69,500
6.68%, 08/04/00 60,550 60,171
Greyhawk Funding, L.L.C. (a)
6.35%, 08/07/00 70,000 69,552
International Securitization Corp. (a)
6.67%, 07/06/00 28,000 27,974
6.59%, 07/10/00 18,000 17,971
6.60%, 07/11/00 34,000 33,938
6.60%, 07/12/00 15,000 14,970
</TABLE>
19
<PAGE>
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
6.69%, 07/17/00 $ 10,166 $ 10,136
6.74%, 07/26/00 7,000 6,967
6.73%, 08/07/00 14,000 13,904
6.74%, 08/09/00 35,000 34,749
6.74%, 08/10/00 60,465 60,020
6.74%, 09/18/00 38,000 37,448
6.75%, 09/20/00 18,000 17,731
6.99%, 12/11/00 14,316 13,878
6.92%, 12/20/00 34,590 33,484
Lexington Parker Capital Corp. (a)
6.62%, 07/07/00 172,000 171,811
6.30%, 07/17/00 25,398 25,328
6.30%, 07/19/00 50,000 49,845
6.29%, 07/20/00 109,764 109,405
6.67%, 07/20/00 31,330 31,221
6.31%, 07/21/00 34,000 33,883
6.74%, 08/10/00 26,000 25,808
6.50%, 10/12/00 24,039 23,606
Links Finance, L.L.C. (a)
6.60%, 07/14/00 14,400 14,366
6.73%, 09/14/00 20,000 19,724
6.73%, 09/15/00 50,000 49,301
6.73%, 09/21/00 20,000 19,698
Market Street Funding Corp. (a)
6.27%, 07/12/00 178,000 177,664
6.28%, 07/18/00 38,000 37,889
MOAT Funding, L.L.C. (a)
6.23%, 07/06/00 31,000 30,974
6.30%, 07/07/00 19,000 18,980
6.59%, 07/10/00 75,000 74,877
6.33%, 07/27/00 93,000 92,582
6.61%, 08/03/00 76,000 75,547
6.74%, 09/20/00 52,000 51,225
6.51%, 10/20/00 47,000 46,087
Mont Blanc Capital Corp. (a)
6.27%, 07/07/00 30,000 29,969
6.30%, 07/17/00 14,000 13,961
6.61%, 07/18/00 21,306 21,240
6.68%, 07/27/00 20,127 20,030
6.80%, 08/15/00 10,000 9,916
Sigma Finance, Inc. (a)
6.28%, 07/12/00 39,280 39,206
6.63%, 07/18/00 15,713 15,664
6.18%, 07/21/00 60,300 60,098
6.32%, 07/24/00 150,000 149,404
6.72%, 09/06/00 70,000 69,138
6.30%, 09/07/00 74,000 73,147
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
6.72%, 09/07/00 $ 19,100 $ 18,861
6.72%, 09/12/00 50,000 49,329
6.40%, 09/14/00 41,000 40,470
6.36%, 09/15/00 65,000 64,155
6.73%, 09/18/00 100,000 98,547
6.41%, 09/22/00 39,000 38,442
6.51%, 10/02/00 50,000 49,186
6.49%, 10/10/00 83,443 81,972
6.50%, 10/13/00 34,000 33,382
6.51%, 10/13/00 28,000 27,490
6.52%, 10/20/00 50,000 49,026
6.31%, 11/01/00 50,000 50,000
6.93%, 11/09/00 120,000 117,074
7.04%, 11/21/00 11,300 10,994
7.05%, 11/27/00 52,500 51,020
6.94%, 12/05/00 50,000 48,537
Stellar Funding Group, Inc. (a)
6.63%, 07/06/00 18,000 17,984
6.59%, 07/12/00 17,626 17,591
6.60%, 07/12/00 22,869 22,823
6.61%, 07/13/00 20,427 20,382
6.63%, 07/18/00 22,000 21,932
6.68%, 07/19/00 18,000 17,940
6.72%, 07/21/00 17,000 16,937
6.72%, 07/26/00 28,990 28,856
6.76%, 09/11/00 27,928 27,557
6.73%, 09/18/00 11,496 11,329
7.11%, 11/13/00 10,345 10,078
6.98%, 12/05/00 20,700 20,091
Thames Asset Global Securitisation
No. 1, Inc. (a)
6.25%, 07/06/00 55,000 54,953
6.59%, 07/10/00 24,510 24,470
6.19%, 07/14/00 104,136 103,908
6.61%, 07/17/00 59,118 58,945
Variable Funding Capital Corp. (a)
6.54%, 07/06/00 37,000 36,967
6.65%, 07/06/00 24,000 23,978
6.61%, 07/13/00 79,000 78,828
6.66%, 07/18/00 65,000 64,798
6.68%, 07/25/00 30,419 30,284
6.51%, 08/02/00 50,000 49,716
6.66%, 08/04/00 100,000 99,375
-----------
6,531,874
-----------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
FINANCE - COMMERCIAL -- 2.5%
CIT Group Holdings, Inc.
6.25%, 07/18/00 $ 169,000 $ 168,509
General Electric Capital Corp.
6.25%, 07/07/00 50,000 49,949
General Electric Capital International
Funding, Inc. (a)
6.58%, 07/11/00 150,000 149,727
6.58%, 07/13/00 100,000 99,782
6.59%, 07/18/00 100,000 99,690
6.62%, 07/27/00 100,000 99,526
General Electric Capital Services
7.00%, 11/28/00 225,000 218,672
Halogen Capital Company, L.L.C. (a)
6.66%, 07/17/00 49,617 49,471
Heller Financial, Inc.
6.58%, 07/27/00 24,000 23,888
-----------
959,214
-----------
FINANCE - CONSUMER -- 1.2%
Associates Corp. of North America
7.00%, 07/03/00 100,000 99,961
Associates First Capital, B.V.
6.67%, 07/24/00 22,000 21,907
6.67%, 07/25/00 50,000 49,780
6.72%, 10/02/00 20,000 19,659
6.72%, 10/03/00 50,000 49,139
6.72%, 10/05/00 50,000 49,120
Associates First Capital Corp.
6.66%, 07/21/00 94,000 93,656
6.67%, 07/25/00 100,000 99,561
-----------
482,783
-----------
SECURITIES BROKERAGE - DEALER -- 8.1%
Bear Stearns Companies, Inc.
6.56%, 07/10/00 17,000 16,972
6.61%, 07/19/00 86,000 85,719
6.68%, 07/20/00 150,000 149,478
6.77%, 09/15/00 50,000 49,299
Goldman Sachs Group, LP
6.00%, 08/07/00 95,000 95,000
6.27%, 08/21/00 100,000 99,137
6.27%, 08/22/00 112,000 111,015
6.29%, 08/30/00 175,000 173,221
6.47%, 10/11/00 35,000 34,379
6.56%, 10/26/00 51,000 49,947
6.71%, 11/01/00 42,000 41,069
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
6.85%, 11/03/00 $ 50,000 $ 48,851
7.05%, 11/14/00 62,000 60,405
6.86%, 11/22/00 57,000 55,479
JP Morgan & Co.
6.20%, 07/11/00 96,000 95,837
Merrill Lynch & Co., Inc.
6.22%, 07/11/00 300,000 299,490
6.86%, 03/29/01 100,000 100,000
Morgan Stanley, Dean Witter,
Discover & Co.
6.64%, 07/25/00 100,000 99,560
6.72%, 09/14/00 285,000 281,087
6.72%, 09/15/00 200,000 197,218
PaineWebber Group, Inc.
6.76%, 07/05/00 33,000 32,975
Salomon Smith Barney Holdings, Inc.
6.27%, 07/07/00 35,000 34,964
6.59%, 07/18/00 92,000 91,716
6.27%, 07/19/00 100,000 99,691
6.60%, 07/21/00 100,000 99,636
6.72%, 09/08/00 50,000 49,368
6.72%, 09/11/00 138,000 136,178
6.71%, 09/18/00 64,000 63,073
Ventures Business Trust (a)
6.60%, 07/17/00 150,000 149,563
6.72%, 09/13/00 228,500 225,395
-----------
3,125,722
-----------
TRADE RECEIVABLES -- 8.8% (f)
Apreco, Inc. (a)
6.54%, 07/05/00 75,000 74,946
6.57%, 07/06/00 50,000 49,955
6.57%, 07/07/00 25,000 24,973
6.27%, 07/17/00 30,000 29,918
6.72%, 08/24/00 50,000 49,501
6.73%, 08/28/00 30,000 29,679
Barton Capital Corp. (a)
6.65%, 07/07/00 21,558 21,534
6.59%, 07/10/00 64,018 63,913
6.59%, 07/11/00 31,313 31,256
6.59%, 07/13/00 57,047 56,922
6.60%, 07/13/00 23,710 23,658
6.67%, 07/13/00 28,619 28,556
6.60%, 07/19/00 51,697 51,528
6.69%, 07/20/00 200,000 199,301
6.30%, 09/07/00 34,507 34,109
Ciesco, LP
6.70%, 08/29/00 50,000 49,458
</TABLE>
21
<PAGE>
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
Compass Securitization, L.L.C. (a)
6.59%, 07/10/00 $ 56,000 $ 55,908
6.67%, 07/10/00 65,000 64,892
6.67%, 07/18/00 30,000 29,906
6.73%, 09/12/00 43,270 42,689
Corporate Asset Funding Co., Inc. (a)
6.65%, 07/06/00 19,895 19,877
Corporate Receivables Corp. (a)
6.59%, 07/05/00 70,000 69,949
6.57%, 07/06/00 30,000 29,973
6.29%, 07/14/00 205,000 204,541
6.66%, 07/19/00 100,000 99,671
6.64%, 07/20/00 105,000 104,637
6.66%, 07/21/00 100,000 99,635
CXC, Inc. (a)
6.63%, 07/05/00 75,000 74,945
6.66%, 07/19/00 37,000 36,878
6.65%, 07/20/00 50,000 49,827
6.61%, 07/24/00 125,000 124,477
6.72%, 08/29/00 65,000 64,293
Eureka Securitization, Inc. (a)
6.65%, 07/07/00 21,000 20,977
6.59%, 07/10/00 50,000 49,918
6.59%, 07/14/00 50,000 49,882
6.62%, 07/20/00 36,000 35,875
Giro Multi Funding Corp. (a)
6.59%, 07/13/00 13,807 13,777
6.66%, 07/20/00 49,644 49,471
6.61%, 07/21/00 37,824 37,686
Monte Rosa Capital Corp. (a)
6.60%, 07/10/00 48,413 48,334
6.61%, 07/17/00 58,470 58,300
6.66%, 07/17/00 93,680 93,406
6.66%, 07/19/00 38,559 38,432
6.63%, 07/20/00 90,451 90,138
6.69%, 08/03/00 30,212 30,028
Park Avenue Receivables Corp. (a)
6.59%, 07/10/00 83,457 83,320
6.60%, 07/18/00 302,099 301,163
Receivables Capital Corp. (a)
6.50%, 07/27/00 44,000 43,797
WCP Funding, Inc. (a)
6.63%, 07/11/00 50,000 49,909
Windmill Funding (a)
6.65%, 07/06/00 100,000 99,908
6.65%, 07/07/00 100,000 99,890
6.70%, 08/04/00 22,000 21,862
6.75%, 09/28/00 18,000 17,705
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
Wood Street Funding Corp. (a)
6.60%, 07/13/00 $ 25,138 $ 25,083
6.68%, 07/28/00 19,610 19,512
6.71%, 08/25/00 25,000 24,746
-----------
3,394,424
-----------
TOTAL COMMERCIAL PAPER AND OTHER
CORPORATE OBLIGATIONS
(Cost $23,045,524) 23,045,524
-----------
CERTIFICATES OF DEPOSIT -- 27.3%
BANKING - AUSTRALIA -- 0.4%
Australia & New Zealand Bank Group
6.73%, 10/05/00 20,000 20,000
National Australia Bank, LTD.
6.47%, 10/06/00 150,000 150,002
-----------
170,002
-----------
BANKING - BELGIUM -- 0.3%
Banque Bruxelles Lambert
7.03%, 11/27/00 35,000 35,001
Credit Communal de Belgique
6.25%, 07/14/00 70,000 70,000
-----------
105,001
-----------
BANKING - CANADA -- 2.7%
Canadian Imperial Bank of Commerce
6.58%, 07/13/00 22,000 22,000
6.27%, 07/18/00 247,000 247,000
6.75%, 03/27/01 122,000 121,964
National Bank of Canada
6.05%, 07/05/00 65,000 65,000
6.50%, 07/31/00 25,000 24,979
Royal Bank of Canada
6.75%, 02/14/01 100,000 99,976
6.90%, 03/29/01 100,000 99,979
7.00%, 05/02/01 75,000 74,988
Toronto-Dominion Bank
6.46%, 10/13/00 100,000 100,000
6.77%, 04/18/01 100,000 99,978
7.00%, 05/02/01 100,000 99,984
-----------
1,055,848
-----------
BANKING - DENMARK -- 0.2%
Den Danske Bank
6.58%, 07/13/00 75,000 75,000
-----------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
BANKING - FINLAND -- 0.8%
Merita Bank, Ltd.
6.15%, 07/26/00 $ 75,000 $ 75,000
6.70%, 09/22/00 175,000 174,999
7.02%, 11/29/00 50,000 50,000
-----------
299,999
-----------
BANKING - FRANCE -- 0.9%
Banque Paribas, S.A.
7.03%, 12/11/00 34,000 34,004
Societe Generale
6.57%, 07/05/00 137,000 137,000
6.46%, 10/12/00 169,000 169,000
-----------
340,004
-----------
BANKING - GERMANY -- 10.8%
Bayeriche HypoVereinsbank, AG
6.70%, 09/07/00 200,000 200,000
7.02%, 11/17/00 200,000 200,000
Bayerische Landesbank Girozentrale
6.70%, 09/18/00 50,000 50,001
6.14%, 10/02/00 25,000 24,985
6.72%, 10/02/00 100,000 99,722
Commerzbank, AG
6.70%, 09/20/00 75,000 75,007
6.73%, 09/28/00 156,000 156,002
6.72%, 09/29/00 110,000 110,001
6.46%, 10/03/00 47,000 47,004
Deutsche Bank
6.59%, 07/05/00 205,000 205,000
6.57%, 07/13/00 178,000 178,000
6.58%, 07/13/00 175,000 175,000
6.26%, 10/18/00 100,000 99,982
6.21%, 11/29/00 100,000 99,972
6.55%, 01/12/01 100,000 99,975
6.56%, 01/29/01 95,000 94,971
7.18%, 06/12/01 250,000 249,955
Dresdner Bank AG
6.14%, 07/14/00 50,000 50,000
6.77%, 04/19/01 132,000 132,000
6.80%, 04/25/01 50,000 49,992
Landesbank Baden Wurttemberg
6.26%, 07/19/00 100,000 100,000
6.70%, 09/07/00 110,000 110,002
6.48%, 10/05/00 45,000 45,000
6.52%, 10/27/00 100,000 100,000
6.85%, 11/02/00 25,000 24,977
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
7.00%, 12/05/00 $ 75,000 $ 75,010
7.36%, 06/05/01 50,000 50,013
Landesbank Hessen-Thuringen
Girozentrale
7.05%, 11/20/00 100,000 99,983
7.22%, 05/04/01 100,000 99,916
Norddeutsche Landesbank Girozentrale
6.13%, 07/05/00 40,000 40,000
6.59%, 07/17/00 50,000 50,000
6.15%, 07/31/00 25,000 25,000
6.60%, 02/01/01 50,000 49,986
Westdeutsche Landesbank Girozentrale
6.38%, 09/20/00 85,000 85,000
6.48%, 10/02/00 310,000 310,000
6.48%, 10/03/00 110,000 110,000
6.46%, 10/05/00 345,000 345,000
7.00%, 05/02/01 50,000 50,000
-----------
4,167,456
-----------
BANKING - NETHERLANDS -- 0.5%
ING Bank, N.V.
6.59%, 07/19/00 100,000 100,000
Rabobank Nederland, N.V.
7.00%, 12/01/00 72,000 72,009
-----------
172,009
-----------
BANKING - NORWAY -- 0.2%
Christiania Bank
6.58%, 07/12/00 30,000 30,000
6.72%, 09/27/00 20,000 20,000
6.73%, 10/03/00 40,000 40,000
-----------
90,000
-----------
BANKING - SWEDEN -- 0.9%
Forenings Sparbanken (Swedbank)
6.58%, 07/06/00 130,000 130,000
6.74%, 10/05/00 135,000 135,000
Svenska Handelsbanken
6.58%, 07/14/00 100,000 100,000
-----------
365,000
-----------
BANKING - SWITZERLAND -- 4.4%
Credit Suisse First Boston
6.15%, 07/03/00 50,000 49,998
6.57%, 07/07/00 175,000 175,000
6.57%, 07/12/00 300,000 300,000
UBS, AG
5.80%, 07/05/00 75,000 75,000
</TABLE>
23
<PAGE>
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
6.58%, 07/11/00 $ 160,000 $ 160,000
6.58%, 07/12/00 200,000 200,000
6.15%, 11/20/00 250,000 249,932
6.30%, 12/11/00 100,000 99,964
6.50%, 01/02/01 200,000 199,952
6.85%, 04/27/01 100,000 99,977
7.25%, 06/12/01 100,000 99,982
-----------
1,709,805
-----------
BANKING - UNITED KINGDOM -- 4.1%
Abbey National Treasury Services, PLC
6.47%, 10/06/00 500,000 500,000
Bank of Scotland Treasury Services
6.58%, 07/13/00 50,000 50,000
Barclays Bank, PLC
6.59%, 07/13/00 40,000 40,000
5.85%, 08/01/00 115,000 115,000
Halifax, PLC
6.58%, 07/19/00 325,000 325,000
6.58%, 07/20/00 200,000 200,000
Lloyds TSB Bank, PLC
6.77%, 04/17/01 35,000 34,997
National Westminster Bank, PLC
6.66%, 02/01/01 50,000 49,986
6.70%, 02/01/01 50,000 49,986
6.77%, 04/20/01 100,000 99,985
7.27%, 05/09/01 117,000 116,971
-----------
1,581,925
-----------
BANKING - UNITED STATES -- 1.1%
American Express Centurion Bank
6.51%, 07/07/00 125,000 125,000
6.57%, 07/12/00 33,000 33,000
First Tennessee Bank, N.A.
6.25%, 07/14/00 50,000 50,000
Union Bank of California
6.77%, 09/01/00 197,000 197,000
Wilmington Trust Co.
6.56%, 07/07/00 25,000 25,000
7.07%, 12/01/00 10,000 10,000
-----------
440,000
-----------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $10,572,049) 10,572,049
-----------
VARIABLE RATE OBLIGATIONS -- 5.4% (b)
AUTOMOTIVE -- 0.2%
Ford Motor Credit
6.73%, 08/18/00 95,000 94,990
-----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
BANKING - FRANCE -- 0.1% (e)
New Jersey Economic Development
Authority Adjustable Rate Money
Market Securities (GE Aerospace
Camden Development Project)
Series A
6.60%, 07/07/00 $ 12,825 $ 12,825
New Jersey Economic Development
Authority Adjustable Rate Money
Market Securities (GE Aerospace
Camden Development Project)
Series B
6.60%, 07/07/00 10,000 10,000
-----------
22,825
-----------
BANKING - GERMANY -- 0.5%
Dresdner Bank, AG
6.62%, 07/24/00 200,000 199,996
-----------
Banking - Netherlands -- 0.1% (e)
New Jersey Economic Development
Authority Adjustable Rate Lease
Revenue Taxable Bonds (Barnes &
Noble, Inc. Distribution & Freight
Consolidation Center Project)
Series 1995A
6.59%, 07/07/00 19,150 19,150
New Jersey Economic Development
Authority Adjustable Rate Lease
Revenue Taxable Bonds (Barnes &
Noble, Inc. Distribution & Freight
Consolidation Center Project) Series B
6.59%, 07/07/00 10,000 10,000
-----------
29,150
-----------
BANKING - NORWAY -- 0.1% (d)
Christiana Bank
6.28%, 07/18/00 40,000 40,000
-----------
BANKING - UNITED STATES -- 0.5%
6700 Cherry Avenue Partners Demand
Bond Series 1993 (e)
6.70%, 07/07/00 9,300 9,300
Baptist Health Systems of South Florida,
Inc. Taxable Direct Note Obligations
Series 1995A (e)
6.60%, 07/07/00 12,145 12,145
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
Baptist Health Systems of South Florida,
Inc. Taxable Direct Note Obligations
Series 1995B (e)
6.60%, 07/07/00 $ 19,000 $ 19,000
Lowndes Corp., Georgia Taxable Demand
Bond Series 1997 (a)(e)
6.78%, 07/07/00 8,250 8,250
MoviePlex Realty Leasing, L.L.C. Adjustable
Rate Tender Securities (Carmike
Cinemas, Inc.) Series 1997A1 (e)
6.62%, 07/07/00 35,125 35,125
MoviePlex Realty Leasing, L.L.C. Adjustable
Rate Tender Securities (Carmike Cinemas,
Inc.) Series 1997A2 (e)
6.62%, 07/07/00 12,325 12,325
MoviePlex Realty Leasing, L.L.C. Adjustable
Rate Tender Securities (Carmike Cinemas,
Inc.) Series 1997A3 (e)
6.62%, 07/07/00 12,325 12,325
Strategic Money Market Trust Series 2000B
6.66%, 07/13/00 (a) 55,000 55,000
Strategic Money Market Trust Series 2000E
6.67%, 07/14/00 (a) 33,000 33,000
-----------
196,470
-----------
CREDIT CARD RECEIVABLES -- 0.1% (a)(f)
Short Term Repackaged Asset Trust
Series 1998 E
6.75%, 07/18/00 50,000 50,000
-----------
DIVERSIFIED FINANCIAL ASSETS -- 0.4% (a)
CC (USA) Inc.
6.64%, 07/19/00 17,000 17,000
Copelco Capital Receivables, L.L.C.
Series 2000-A
6.65%, 07/18/00 23,000 23,000
Sigma Finance, Inc.
6.00%, 07/03/00 50,000 50,000
6.65%, 07/25/00 40,000 40,000
6.60%, 07/31/00 20,000 20,000
-----------
150,000
-----------
EDUCATION -- 0.1%
Development Authority of Dekalb County
Taxable Rate RB (Emory University
Project) Series 1995B
6.60%, 07/07/00 30,950 30,950
-----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
ELECTRICAL & ELECTRONICS -- 0.1% (a)
CFM International, Inc.
6.70%, 07/03/00 $ 39,010 $ 39,010
-----------
INSURANCE - MONOLINE -- 0.1% (e)
Dade County, Florida Expressway
Authority Toll System RB Series 1996
6.60%, 07/07/00 30,790 30,790
The Community Redevelopment
Agency of the City of Los Angeles,
California (Bunker Hill Project )
Subordinate Tax Allocation
Refunding Bonds Series 1997A
6.70%, 07/07/00 10,000 10,000
-----------
40,790
-----------
LIFE & HEALTH INSURANCE -- 1.1% (d)
General Electric Life & Annuity
Assurance Co.
6.69%, 07/31/00 100,000 100,000
6.69%, 07/31/00 50,000 50,000
Monumental Life Insurance Co.
6.79%, 07/01/00 100,000 100,000
Pacific Life Insurance Co.
6.69%, 07/01/00 100,000 100,000
United of Omaha Life Insurance Co.
6.37%, 07/31/00 10,000 10,000
6.37%, 07/31/00 50,000 50,000
-----------
410,000
-----------
SECURITIES BROKERAGE-DEALER -- 0.9%
JP Morgan & Co. , Inc.
6.64%, 07/17/00 100,000 100,000
6.74%, 07/28/00 200,000 200,000
Merrill Lynch & Co., Inc.
6.64%, 07/31/00 50,000 50,000
-----------
350,000
-----------
TELECOMMUNICATIONS SERVICES & EQUIPMENT -- 0.6% (a)
AT & T Corp.
6.64%, 07/14/00 248,000 248,000
-----------
</TABLE>
25
<PAGE>
SCHWAB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
TRADE RECEIVABLES -- 0.5% (a)(f)
Ciesco LP
6.67%, 07/17/00 $ 200,000 $ 199,992
-----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $2,102,173) 2,102,173
-----------
BANK NOTES -- 4.0%
Bank of America, N.A.
6.72%, 10/04/00 300,000 300,000
6.45%, 10/11/00 74,000 74,000
7.02%, 11/21/00 119,000 119,000
7.00%, 11/22/00 20,000 20,000
7.06%, 12/01/00 133,000 133,000
7.20%, 06/05/01 200,000 200,000
Bank One, N.A.
6.57%, 07/05/00 138,000 138,000
European American Bank
6.70%, 11/01/00 100,000 100,000
Fifth Third Bank
6.59%, 07/13/00 79,000 79,000
LaSalle National Bank
5.76%, 07/21/00 49,000 48,997
5.76%, 07/24/00 100,000 99,992
6.70%, 11/01/00 70,000 70,002
7.02%, 11/20/00 150,000 150,000
-----------
TOTAL BANK NOTES
(Cost $1,531,991) 1,531,991
-----------
</TABLE>
<TABLE>
<CAPTION>
Maturity
Value Value
---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 4.2% (c)
Bank of America Securities, L.L.C.
Tri-Party Repurchase Agreement
Collateralized by U.S. Government
Securities
6.93% Issue 06/30/00
Due 07/03/00 $ 500,289 $ 500,000
Credit Suisse First Boston, Inc.
Tri-Party Repurchase Agreement
Collateralized by U.S. Government
Securities
6.90% Issue 06/30/00
Due 07/03/00 19,509 19,498
Salomon Smith Barney, Inc.
Tri-Party Repurchase Agreement
Collateralized by U.S. Government
Securities
6.93% Issue 06/30/00
Due 07/03/00 1,100,635 1,100,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,619,498) 1,619,498
-----------
TOTAL INVESTMENTS -- 100.3%
(Cost $38,871,235) 38,871,235
-----------
OTHER ASSETS AND LIABILITIES -- (0.3)%
Other assets 191,722
Liabilities (324,853)
-----------
(133,131)
-----------
TOTAL NET ASSETS -- 100.0% $38,738,104
===========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
26
<PAGE>
SCHWAB GOVERNMENT MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
---------- ----------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES -- 63.4%
COUPON NOTES -- 10.2%
Federal Home Loan Bank
6.35%, 02/02/01 $ 20,000 $ 19,989
6.58%, 02/09/01 22,000 22,001
6.67%, 04/06/01 30,000 29,987
Federal Home Loan Mortgage Corp.
6.35%, 01/05/01 43,955 43,946
5.00%, 02/15/01 18,000 17,820
Federal National Mortgage Association
5.90%, 12/01/00 11,355 11,341
5.92%, 12/07/00 20,000 19,984
6.47%, 02/16/01 40,000 39,993
6.57%, 02/22/01 25,000 24,989
6.57%, 04/26/01 25,000 24,919
-----------
254,969
-----------
DISCOUNT NOTES -- 39.1%
Federal Home Loan Bank
6.50%, 08/04/00 20,000 19,879
6.24%, 09/08/00 17,635 17,430
6.62%, 09/27/00 15,000 14,761
6.35%, 09/29/00 12,000 11,815
Federal Home Loan Mortgage Corp.
6.14%, 07/06/00 37,000 36,969
6.52%, 07/11/00 20,000 19,964
6.01%, 07/13/00 6,030 6,018
5.98%, 07/20/00 20,000 19,939
6.19%, 07/20/00 17,000 16,945
6.49%, 07/25/00 35,421 35,269
5.70%, 07/28/00 40,000 39,838
6.14%, 08/17/00 20,000 19,845
6.24%, 08/17/00 19,459 19,304
6.26%, 09/14/00 19,000 18,760
6.31%, 09/14/00 14,000 13,821
6.60%, 09/21/00 20,000 19,704
6.62%, 09/28/00 30,000 29,517
6.65%, 04/26/01 25,000 23,707
Federal National Mortgage Association
6.01%, 07/13/00 25,000 24,951
6.16%, 07/13/00 20,000 19,960
5.98%, 07/20/00 15,000 14,954
6.00%, 07/27/00 30,000 29,874
6.05%, 07/27/00 3,500 3,485
6.26%, 07/27/00 20,000 19,911
6.30%, 08/01/00 33,010 32,834
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- ----------
<S> <C> <C>
6.55%, 08/24/00 $ 50,000 $ 49,516
6.14%, 08/31/00 22,000 21,778
5.87%, 09/01/00 35,000 34,661
6.25%, 09/14/00 29,000 28,634
6.27%, 09/21/00 20,000 19,723
6.62%, 09/21/00 20,000 19,703
6.35%, 09/28/00 15,000 14,772
6.37%, 09/28/00 25,458 25,069
6.39%, 09/28/00 20,000 19,694
6.63%, 09/28/00 30,000 29,516
6.59%, 10/02/00 9,792 9,629
6.33%, 10/05/00 20,000 19,673
6.34%, 10/05/00 20,000 19,673
6.39%, 10/19/00 25,000 24,527
6.67%, 11/02/00 25,000 24,445
6.75%, 11/22/00 25,000 24,346
6.75%, 12/07/00 20,000 19,423
6.76%, 12/07/00 20,000 19,422
6.72%, 12/14/00 20,000 19,401
-----------
973,059
-----------
VARIABLE RATE OBLIGATIONS -- 14.1% (b)
Federal Home Loan Bank
6.14%, 07/05/00 40,000 40,000
6.30%, 07/05/00 100,000 100,000
Student Loan Marketing Association
6.21%, 07/05/00 50,000 50,000
6.29%, 07/05/00 50,000 49,986
6.42%, 07/05/00 30,000 30,012
6.49%, 07/05/00 50,000 50,000
6.54%, 07/05/00 30,000 30,016
-----------
350,014
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(Cost $1,578,042) 1,578,042
-----------
</TABLE>
27
<PAGE>
SCHWAB GOVERNMENT MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Maturity Value Value
-------------- ----------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 36.4% (c)
Credit Suisse First Boston, Inc. Tri-Party
Repurchase Agreement Collateralized
by U.S. Government Securities
6.90% Issue 06/30/00
Due 07/03/00 $ 63,959 $ 63,922
Lehman Brothers, Inc. Tri-Party
Repurchase Agreement Collateralized
by U.S. Government Securities
6.45% Issue 06/07/00
Due 07/07/00 120,151 120,000
Morgan Stanley & Co, Inc. Tri-Party
Repurchase Agreement Collateralized
by U.S. Government Securities
6.48% Issue 06/15/00
Due 07/06/00 32,121 32,000
6.49% Issue 06/16/00
Due 07/07/00 130,492 130,000
6.49% Issue 06/13/00
Due 07/07/00 50,216 50,000
6.49% Issue 06/19/00
Due 07/07/00 30,097 30,000
6.49% Issue 06/20/00
Due 07/07/00 50,153 50,000
6.53% Issue 06/19/00
Due 07/07/00 30,098 30,000
</TABLE>
<TABLE>
<CAPTION>
Maturity Value Value
-------------- ----------
<S> <C> <C>
Salomon Smith Barney, Inc.Tri-Party
Repurchase Agreement Collateralized
by U.S. Government Securities
6.93% Issue 06/30/00
Due 07/03/00 $250,144 $ 250,000
6.47% Issue 06/05/00
Due 07/03/00 50,252 50,000
6.47% Issue 06/05/00
Due 07/05/00 50,270 50,000
6.47% Issue 06/05/00
Due 07/07/00 50,288 50,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $905,922) 905,922
----------
TOTAL INVESTMENTS -- 99.8%
(Cost $2,483,964) 2,483,964
----------
OTHER ASSETS AND LIABILITIES -- 0.2%
Other assets 12,160
Liabilities (6,014)
----------
6,146
----------
TOTAL NET ASSETS -- 100.0% $2,490,110
==========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
28
<PAGE>
SCHWAB U.S. TREASURY MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES -- 99.3%
U.S. TREASURY OBLIGATIONS -- 99.3%
U.S. Treasury Bills
5.69%, 07/06/00 $ 5,775 $ 5,771
5.71%, 07/06/00 24,870 24,851
5.71%, 07/13/00 20,245 20,207
5.72%, 07/13/00 70,000 69,868
5.73%, 07/13/00 19,590 19,553
5.74%, 07/13/00 8,940 8,923
5.79%, 07/13/00 2,295 2,291
5.80%, 07/13/00 50,000 49,904
5.72%, 07/20/00 125,355 124,982
5.80%, 07/20/00 5,135 5,120
5.81%, 07/20/00 40,000 39,879
5.69%, 07/27/00 25,000 24,899
5.72%, 07/27/00 50,000 49,796
5.88%, 08/03/00 40,000 39,788
5.56%, 08/10/00 31,665 31,471
5.87%, 08/10/00 20,000 19,873
6.02%, 08/10/00 30,000 29,802
6.07%, 08/10/00 47,015 46,703
5.90%, 08/17/00 12,620 12,524
6.09%, 08/17/00 6,270 6,221
5.87%, 08/24/00 1,085 1,076
5.91%, 08/24/00 4,885 4,842
5.83%, 08/31/00 75,000 74,271
5.67%, 09/07/00 15,000 14,841
5.84%, 09/07/00 5,645 5,584
5.85%, 09/07/00 19,950 19,733
5.92%, 09/07/00 40,000 39,559
5.95%, 09/07/00 1,870 1,849
6.01%, 09/07/00 5,825 5,761
6.04%, 09/07/00 20,000 19,778
6.06%, 09/21/00 23,025 22,716
5.98%, 09/28/00 22,935 22,606
5.99%, 09/28/00 8,600 8,476
5.76%, 10/05/00 1,240 1,221
5.94%, 10/05/00 13,610 13,401
6.01%, 10/05/00 30,000 29,533
5.84%, 10/12/00 3,865 3,802
5.91%, 10/12/00 25,000 24,590
5.85%, 10/19/00 5,960 5,856
5.89%, 10/19/00 1,100 1,081
5.93%, 10/19/00 3,965 3,895
6.04%, 11/16/00 9,095 8,889
6.16%, 12/07/00 10,000 9,741
6.12%, 12/14/00 45,000 43,767
</TABLE>
<TABLE>
<CAPTION>
Par Value
---------- ----------
<S> <C> <C>
U.S. Treasury Notes
5.380%, 07/31/00 $ 99,000 $ 98,961
6.125%, 07/31/00 181,040 181,078
6.000%, 08/15/00 189,445 189,426
8.750%, 08/15/00 13,950 13,991
5.125%, 08/31/00 36,185 36,146
6.250%, 08/31/00 172,565 172,571
4.500%, 09/30/00 180,000 179,239
6.125%, 09/30/00 79,840 79,792
4.000%, 10/31/00 107,000 106,193
5.750%, 10/31/00 45,120 45,051
5.750%, 11/15/00 186,495 186,076
4.625%, 11/30/00 63,000 62,563
----------
2,370,381
----------
TOTAL U.S. GOVERNMENT SECURITIES
(Cost $2,370,381) 2,370,381
----------
TOTAL INVESTMENTS -- 99.3%
(Cost $2,370,381) 2,370,381
----------
OTHER ASSETS AND LIABILITIES -- 0.7%
Other assets 21,891
Liabilities (5,505)
----------
16,386
----------
TOTAL NET ASSETS -- 100.0% $2,386,767
==========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
29
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
June 30, 2000 (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, and U.S. government coupon notes
and U.S. Treasury notes, which reflect the coupon rate of the security. Yields
for each type of security are stated according to the market convention for that
security type. For each security, cost (for financial reporting and federal
income tax purposes) and carrying value are the same.
(a) These securities can be resold to qualified institutional buyers within
seven business days. Such securities are deemed liquid in accordance with
procedures adopted by the Board of Trustees. At June 30, 2000, the
aggregate value of such securities held by the Schwab Money Market Fund was
$13,721,455, which represented 35.42% of net assets.
(b) Variable rate obligations have interest rates that 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. 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.
(c) Repurchase agreements due dates are considered the maturity date.
Repurchase agreements with due dates later than seven days from issue dates
may be subject to seven day putable demand features for liquidity purposes.
(d) These securities have legal or contractual restrictions on resale. Such
securities are deemed illiquid in accordance with procedures adopted by the
Board of Trustees. At June 30, 2000, the aggregate value of such securities
held by Schwab Money Market Fund were $714,199, which represented 1.84% of
the net assets.
(e) Security has one or more third party credit enhancements.
(f) Asset-backed securities are securities backed by underlying assets and
categorized by industry.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except for net asset value
per share)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Schwab Schwab Schwab
Money Government U.S. Treasury
Market Money Money
Fund Fund Fund
----------- ---------- -------------
<S> <C> <C> <C>
Assets
Investments, at value (Cost: $37,251,737, $1,578,042 and
$2,370,381, respectively) $37,251,737 $1,578,042 $2,370,381
Repurchase agreements, at value (Cost: $1,619,498, $905,922
and $0, respectively) 1,619,498 905,922 --
Cash -- -- 4
Interest receivable 190,230 12,012 21,798
Prepaid expenses 1,492 148 89
----------- ---------- ----------
Total assets 39,062,957 2,496,124 2,392,272
----------- ---------- ----------
Liabilities
Payables:
Dividends 93,620 5,732 5,257
Investments purchased 225,000 -- --
Investment advisory and administration fees 539 36 22
Transfer agency and shareholder service fees 950 60 58
Other liabilities 4,744 186 168
----------- ---------- ----------
Total liabilities 324,853 6,014 5,505
----------- ---------- ----------
Net assets applicable to outstanding shares $38,738,104 $2,490,110 $2,386,767
=========== ========== ==========
Net assets consist of:
Paid-in capital $38,738,273 $2,491,102 $2,387,683
Accumulated net realized loss on investments sold (169) (992) (916)
----------- ---------- ----------
$38,738,104 $2,490,110 $2,386,767
=========== ========== ==========
Pricing of shares
Outstanding shares, $0.00001 par value (unlimited shares
authorized) 38,738,805 2,491,205 2,387,747
Net asset value, offering and redemption price per share $ 1.00 $ 1.00 $ 1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
STATEMENTS OF OPERATIONS (in thousands)
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Schwab Schwab Schwab
Money Government U.S. Treasury
Market Money Money
Fund Fund Fund
----------- ---------- -------------
<S> <C> <C> <C>
Interest income $1,186,382 $77,069 $69,801
---------- ------- -------
Expenses:
Investment advisory and administration fees 61,043 4,625 4,462
Transfer agency and shareholder service fees 86,119 5,755 5,546
Custodian and portfolio accounting fees 1,282 149 143
Registration fees 2,781 82 81
Professional fees 69 11 14
Shareholder reports 1,917 43 16
Trustees' fees 44 9 9
Proxy fees 2,921 173 154
Other expenses 227 21 21
---------- ------- -------
156,403 10,868 10,446
Less: expenses reduced (see Note 4) (9,951) (1,103) (2,281)
---------- ------- -------
Net expenses incurred by fund 146,452 9,765 8,165
---------- ------- -------
Net investment income 1,039,930 67,304 61,636
Net realized gain (loss) on investments sold -- (6) 130
---------- ------- -------
Increase in net assets resulting from operations $1,039,930 $67,298 $61,766
========== ======= =======
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
<TABLE>
<CAPTION>
Schwab Schwab Schwab
Money Market Fund Government Money Fund U.S. Treasury Money Fund
---------------------------- ------------------------ --------------------------
Six months Six months Six months
ended Year ended Year ended Year
06/30/00 ended 06/30/00 ended 06/30/00 ended
(Unaudited) 12/31/99 (Unaudited) 12/31/99 (Unaudited) 12/31/99
------------- ------------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 1,039,930 $ 1,456,752 $ 67,304 $ 103,912 $ 61,636 $ 95,582
Net realized gain (loss) on
investments sold -- 2 (6) (169) 130 (243)
------------- ------------- ----------- ----------- ------------ -----------
Increase in net assets
resulting from operations 1,039,930 1,456,754 67,298 103,743 61,766 95,339
------------- ------------- ----------- ----------- ------------ -----------
Dividends to shareholders from
net investment income
(see Note 2): (1,039,930) (1,456,752) (67,304) (103,912) (61,636) (95,582)
------------- ------------- ----------- ----------- ------------ -----------
Capital share transactions
(at $1.00 per share):
Proceeds from shares sold 103,523,819 138,436,982 5,146,993 7,964,015 4,892,363 7,589,276
Net asset value of shares
issued in reinvestment
of dividends 925,857 1,575,675 60,464 114,148 55,263 104,530
Payments for shares
redeemed (101,810,308) (131,353,391) (5,262,483) (7,740,303) (5,152,737) (7,232,645)
------------- ------------- ----------- ----------- ------------ -----------
Increase (decrease) in net
assets from capital
share transactions 2,639,368 8,659,266 (55,026) 337,860 (205,111) 461,161
------------- ------------- ----------- ----------- ------------ -----------
Total increase (decrease)
in net assets 2,639,368 8,659,268 (55,032) 337,691 (204,981) 460,918
Net assets:
Beginning of period 36,098,736 27,439,468 2,545,142 2,207,451 2,591,748 2,130,830
------------- ------------- ----------- ----------- ------------ -----------
End of period $ 38,738,104 $ 36,098,736 $ 2,490,110 $ 2,545,142 $ 2,386,767 $ 2,591,748
============= ============= =========== =========== ============ ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED 12/31 2000(1) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.03 0.05 0.05 0.05 0.05 0.05
---------------------------------------------------------------------------
Total from investment operations 0.03 0.05 0.05 0.05 0.05 0.05
Less distributions:
Dividends from net investment income (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
---------------------------------------------------------------------------
Total distributions (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
---------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------
Total return (%) 2.73(2) 4.64 4.99 5.04 4.91 5.41
RATIOS/SUPPLEMENTAL DATA (%)
---------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.75(3,4) 0.75 0.75 0.75 0.75 0.75
Expense reductions reflected in above ratio 0.05(3) 0.09 0.11 0.12 0.14 0.15
Ratio of net investment income to average net assets 5.43(3) 4.56 4.87 4.93 4.80 5.27
Net assets, end of period ($ X 1,000) 38,738,104 36,098,736 27,439,468 21,421,437 18,083,671 14,010,387
</TABLE>
<TABLE>
<CAPTION>
Schwab Government Money Fund
FISCAL PERIOD ENDED 12/31 2000(1) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.03 0.04 0.05 0.05 0.05 0.05
---------------------------------------------------------------------------
Total from investment operations 0.03 0.04 0.05 0.05 0.05 0.05
Less distributions:
Dividends from net investment income (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
---------------------------------------------------------------------------
Total distributions (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
---------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------
Total return (%) 2.65(2) 4.50 4.88 4.95 4.83 5.34
RATIOS/SUPPLEMENTAL DATA (%)
---------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.75(3,5) 0.75 0.75 0.75 0.75 0.75
Expense reductions reflected in above ratio 0.09(3) 0.10 0.17 0.17 0.17 0.17
Ratio of net investment income to average net assets 5.26(3) 4.42 4.76 4.84 4.73 5.21
Net assets, end of period ($ X 1,000) 2,490,110 2,545,142 2,207,451 1,981,926 1,986,862 1,884,569
<FN>
(1) For the six months ended June 30, 2000 (Unaudited).
(2) Not annualized.
(3) Annualized.
(4) Would have been 0.77% if certain non-routine expenses (proxy fees) had been included.
(5) Would have been 0.76% if certain non-routine expenses (proxy fees) had been included.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Schwab U.S. Treasury Money Fund
FISCAL PERIOD ENDED 12/31 2000(1) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02 0.04 0.05 0.05 0.05 0.05
---------------------------------------------------------------------------
Total from investment operations 0.02 0.04 0.05 0.05 0.05 0.05
Less distributions:
Dividends from net investment income (0.02) (0.04) (0.05) (0.05) (0.05) (0.05)
---------------------------------------------------------------------------
Total distributions (0.02) (0.04) (0.05) (0.05) (0.05) (0.05)
---------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------
Total return (%) 2.51(2) 4.25 4.69 4.85 4.77 5.25
RATIOS/SUPPLEMENTAL DATA (%)
---------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.65(3,4) 0.65 0.65 0.65 0.65 0.65
Expense reductions reflected in above ratio 0.19(3) 0.21 0.26 0.28 0.29 0.31
Ratio of net investment income to average net assets 5.00(3) 4.18 4.58 4.75 4.67 5.11
Net assets, end of period ($ X 1,000) 2,386,767 2,591,748 2,130,830 1,765,445 1,421,672 1,193,689
(1) For the six months ended June 30, 2000 (Unaudited).
(2) Not annualized.
(3) Annualized.
(4) Would have been 0.66% if certain non-routine expenses (proxy fees) had been included.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 2000 (Unaudited)
(All dollar amounts are in thousands unless otherwise noted.)
1. DESCRIPTION OF THE FUNDS
The Schwab Money Market Fund, Schwab Government Money Fund and Schwab U.S.
Treasury Money Fund (the "funds") are 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, as amended, (the "1940 Act").
In addition to the three funds described above, the trust also offers 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, Schwab Florida Municipal 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 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 -- 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.
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.
36
<PAGE>
FEDERAL INCOME TAXES -- It is each fund's policy to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all net investment income and realized net capital gains, if any, to
shareholders. Therefore, no federal income tax provision is required. Each fund
is considered a separate entity for federal income tax purposes.
As of December 31, 1999, the unused capital loss carryforwards, for federal
income tax purposes with expiration dates, were as follows:
<TABLE>
<CAPTION>
Schwab Schwab Schwab
Money Government U.S. Treasury
Market Fund Money Fund Money Fund
----------- ---------- -------------
<S> <C> <C> <C>
Expiring in:
------------
12/31/01 $ -- $ 53 $ 28
12/31/02 2 74 23
12/31/03 118 161 49
12/31/04 -- 162 113
12/31/05 -- 226 137
12/31/06 -- 119 89
12/31/07 49 189 575
---- ---- ------
Total capital loss carryforwards $169 $984 $1,014
==== ==== ======
</TABLE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS -- The funds have 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 0.38% 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 April
30, 1999, the Schwab Money Market Fund 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. Prior to April 30, 1999, the Schwab
Government Money Fund and Schwab U.S. Treasury Money Fund each paid an annual
fee, payable monthly, of 0.46% on the first $1 billion of each fund's average
daily net assets, 0.41% on the next $1 billion, and 0.40% on such net assets in
excess of $2 billion. The investment adviser has reduced a portion of its fee
for the six month period ended June 30, 2000 (see Note 4).
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The trust has transfer
agency and shareholder service agreements with Charles Schwab & Co., Inc.
("Schwab"). For services provided under these agreements, Schwab receives an
annual fee, payable monthly, of 0.25% of each fund's average daily net assets
for transfer agency services and 0.20% of such net assets for shareholder
services.
37
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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 month period ended June 30, 2000, the trust made no direct payments to its
officers or trustees who are "interested persons" within the meaning of the 1940
Act. The funds incurred fees aggregating $62 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,
2001, the Schwab Money Market Fund, Schwab Government Money Fund and Schwab U.S.
Treasury Money Funds' total operating expenses will not exceed 0.75%, 0.75% and
0.65%, respectively, of each fund's average daily net assets, after reductions.
For the purpose of this guarantee, operating expenses do not include interest,
taxes, and certain non-routine expenses. The operating expense ratio for the six
months ended June 30, 2000 did include non-routine expenses.
For the six month period ended June 30, 2000, the total of such fees reduced by
the investment adviser were $9,951, $1,103 and $2,281 for the Schwab Money
Market Fund, Schwab Government Money Fund and Schwab U.S. Treasury Money Fund,
respectively.
38
<PAGE>
PROXY VOTING RESULTS
A special meeting of the shareholders of The Charles Schwab Family of Funds was
held on June 1, 2000. The number of votes necessary to conduct the meeting and
approve each proposal was obtained, and the results of the votes of shareholders
on proposals before them are listed below:
PROPOSAL 1
Election of Trustees.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES VOTED FOR SHARES WITHHELD
------------------ ---------------
<S> <C> <C>
Charles R. Schwab 36,999,629,179 9,264,278,586
Mariann Byerwalter 36,952,086,682 9,311,821,083
Jeremiah H. Chafkin 36,969,722,337 9,294,185,428
Donald F. Dorward 36,945,789,881 9,318,117,884
William A. Hasler 36,978,892,818 9,285,014,947
Robert G. Holmes 36,967,612,764 9,296,295,001
Steven L. Scheid 36,989,702,307 9,274,205,458
Gerald B. Smith 36,981,495,311 9,282,412,454
Donald R. Stephens 36,986,833,556 9,277,074,209
Michael W. Wilsey 36,981,483,423 9,282,424,342
</TABLE>
PROPOSAL 2A
To approve the elimination of the fundamental policy which makes all fund
policies fundamental. This allows each fund to adopt non-fundamental policies,
which the Board of Trustees could take appropriate and timely action to amend as
necessary, without the expense and delay associated with a shareholder meeting.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 13,954,022,383
Against 491,420,583
Abstain (includes broker non-votes) 4,915,051,923
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,038,052,671
Against 62,733,595
Abstain (includes broker non-votes) 218,813,366
</TABLE>
39
<PAGE>
PROXY VOTING RESULTS (continued)
PROPOSAL 2B
To approve changes to restrictions regarding the maturity of fund investments.
SCHWAB MONEY MARKET FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 13,983,486,763
Against 463,988,789
Abstain (includes broker non-votes) 4,913,019,337
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,042,571,889
Against 59,067,247
Abstain (includes broker non-votes) 217,960,496
</TABLE>
<TABLE>
<CAPTION>
SCHWAB U.S. TREASURY MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 944,691,945
Against 76,797,800
Abstain (includes broker non-votes) 222,085,279
</TABLE>
PROPOSAL 2CI
To approve changes to restrictions regarding borrowing.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 13,838,366,226
Against 604,209,248
Abstain (includes broker non-votes) 4,917,919,415
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,031,435,956
Against 69,064,572
Abstain (includes broker non-votes) 219,099,104
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
SCHWAB U.S. TREASURY MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 928,488,752
Against 92,846,717
Abstain (includes broker non-votes) 222,239,555
</TABLE>
PROPOSAL 2CII
To approve changes to restrictions regarding lending.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 13,840,766,217
Against 599,097,012
Abstain (includes broker non-votes) 4,920,631,660
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,030,509,892
Against 69,846,901
Abstain (includes broker non-votes) 219,242,839
</TABLE>
<TABLE>
<CAPTION>
SCHWAB U.S. TREASURY MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 931,988,517
Against 89,446,772
Abstain (includes broker non-votes) 222,139,735
</TABLE>
PROPOSAL 2CIII
To approve changes to restrictions regarding the issuance of senior securities
and pledging, mortgaging or hypothecating fund assets.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 13,895,300,905
Against 543,800,977
Abstain (includes broker non-votes) 4,921,393,007
</TABLE>
41
<PAGE>
PROXY VOTING RESULTS (continued)
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,034,276,572
Against 65,834,534
Abstain (includes broker non-votes) 219,488,526
</TABLE>
<TABLE>
<CAPTION>
SCHWAB U.S. TREASURY MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 936,807,034
Against 84,091,915
Abstain (includes broker non-votes) 222,676,075
</TABLE>
PROPOSAL 2D
To approve changes to restrictions regarding diversification.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,930,917,947
Against 523,752,829
Abstain (includes broker non-votes) 4,905,824,113
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,038,813,523
Against 62,258,507
Abstain (includes broker non-votes) 218,527,602
</TABLE>
<TABLE>
<CAPTION>
SCHWAB U.S. TREASURY MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 938,104,010
Against 83,054,321
Abstain (includes broker non-votes) 222,416,693
</TABLE>
42
<PAGE>
PROPOSAL 2E
To approve changes to restrictions regarding investments in "unseasoned
issuers".
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,788,323,064
Against 649,999,572
Abstain (includes broker non-votes) 4,922,172,253
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,026,843,315
Against 72,537,256
Abstain (includes broker non-votes) 220,219,061
</TABLE>
PROPOSAL 2F
To approve changes to restrictions regarding investments in restricted or
illiquid securities.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,811,867,937
Against 625,575,079
Abstain (includes broker non-votes) 4,923,051,873
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,027,842,345
Against 72,386,680
Abstain (includes broker non-votes) 219,370,607
</TABLE>
PROPOSAL 2G
To approve changes to restrictions regarding investments in securities of other
investment companies.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,874,563,637
Against 560,036,949
Abstain (includes broker non-votes) 4,925,894,303
</TABLE>
43
<PAGE>
PROXY VOTING RESULTS (continued)
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,032,126,945
Against 67,901,651
Abstain (includes broker non-votes) 219,571,036
</TABLE>
PROPOSAL 2H
To approve changes to restrictions regarding the beneficial ownership of
securities by fund officers and trustees.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,961,999,783
Against 529,526,029
Abstain (includes broker non-votes) 4,868,969,077
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,034,285,065
Against 65,497,647
Abstain (includes broker non-votes) 219,816,920
</TABLE>
PROPOSAL 2I
To approve changes to restrictions regarding industry concentration.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,952,578,924
Against 541,545,998
Abstain (includes broker non-votes) 4,866,369,967
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,035,603,561
Against 64,899,013
Abstain (includes broker non-votes) 219,097,058
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
SCHWAB U.S. TREASURY MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 936,673,188
Against 84,018,851
Abstain (includes broker non-votes) 222,882,985
</TABLE>
PROPOSAL 2J
To approve changes to restrictions regarding investments in commodities, futures
contracts and real estate.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,895,247,671
Against 597,545,788
Abstain (includes broker non-votes) 4,867,701,430
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,030,005,510
Against 70,388,169
Abstain (includes broker non-votes) 219,205,953
</TABLE>
<TABLE>
<CAPTION>
SCHWAB U.S. TREASURY MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 930,017,684
Against 91,033,792
Abstain (includes broker non-votes) 222,523,548
</TABLE>
PROPOSAL 2K
To approve changes to restrictions regarding the underwriting of securities.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,935,844,765
Against 554,456,383
Abstain (includes broker non-votes) 4,870,193,741
</TABLE>
45
<PAGE>
PROXY VOTING RESULTS (continued)
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,034,679,868
Against 64,581,814
Abstain (includes broker non-votes) 220,337,950
</TABLE>
<TABLE>
<CAPTION>
SCHWAB U.S. TREASURY MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 934,743,208
Against 86,081,452
Abstain (includes broker non-votes) 222,750,364
</TABLE>
PROPOSAL 2L
To approve changes to restrictions regarding control of an issuer.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,944,104,626
Against 544,106,763
Abstain (includes broker non-votes) 4,872,283,500
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,035,445,970
Against 64,496,968
Abstain (includes broker non-votes) 219,656,693
</TABLE>
<TABLE>
<CAPTION>
SCHWAB U.S. TREASURY MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 940,835,998
Against 79,512,538
Abstain (includes broker non-votes) 223,226,488
</TABLE>
46
<PAGE>
PROPOSAL 2M
To approve changes to restrictions regarding purchases of oil, gas, or mineral
interests.
<TABLE>
<CAPTION>
SCHWAB MONEY MARKET FUND
NUMBER OF
SHARES VOTED
---------------
<S> <C>
For 13,940,806,879
Against 553,644,315
Abstain (includes broker non-votes) 4,866,043,695
</TABLE>
<TABLE>
<CAPTION>
SCHWAB GOVERNMENT MONEY FUND
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 1,032,854,089
Against 67,403,080
Abstain (includes broker non-votes) 219,342,463
</TABLE>
47
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THE SCHWABFUNDS FAMILY-REGISTERED TRADEMARK-
SchwabFunds-Registered Trademark- offers 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.
METHODS FOR PLACING ORDERS
The information below outlines how Schwab brokerage account investors can place
orders. If you are investing through a third-party investment provider, methods
for placing orders may be different.
PHONE
Call 800-435-4000, day or night (for TDD service, call 800-345-2550).
INTERNET
www.schwab.com/schwabfunds
MAIL
Write to SchwabFunds at:
P. O. Box 7575, San Francisco, CA 94120-7575
When selling or exchanging shares, be sure to include the signatures of at least
one of the persons whose name is on the account.
IN PERSON
Visit the nearest Charles Schwab office.
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-Registered Trademark- Fund
Schwab 1000 Fund-Registered Trademark-
Schwab Analytics Fund-Registered Trademark-
Schwab Focus Funds:
Communications Focus Fund
Financial Services Focus Fund
HealthCare Focus Fund
Technology Focus Fund
Schwab Small-Cap Index Fund-Registered Trademark-
Schwab MarketManager Small Cap Portfolio
Schwab Total Stock Market Index Fund-TM-
Schwab International Index Fund-Registered Trademark-
Schwab MarketManager International Portfolio
SCHWAB BOND FUNDS
Schwab YieldPlus Fund-TM-
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 FUNDS
Schwab offers an array of money funds that seek high current income consistent
with stability of capital and liquidity.(1) Refer to page 3 of this report for
more information.
(1)Investments in money funds are neither insured nor guaranteed by the Federal
Deposit Insurance Corporation (FDIC) or any other government agency and,
although money funds seek to preserve the value of your investment at $1 per
share, it is possible to lose money.
<PAGE>
[LOGO]
INVESTMENT ADVISER
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
DISTRIBUTOR
Charles Schwab & Co., Inc.
P.O. Box 7575, San Francisco, CA 94120-7575
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
-C-2000 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
Printed on recycled paper. MKT3602-3 (8/00)
<PAGE>
SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
MUNICIPAL MONEY FUNDS
SEMIANNUAL REPORT
AND
AN IMPORTANT NOTICE REGARDING
DELIVERY OF SHAREHOLDER
DOCUMENTS
June 30, 2000
<PAGE>
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission permits mutual funds to deliver only one
copy of shareholder documents, including prospectuses and shareholder reports,
to fund investors with multiple accounts at the same residential or post office
box address. This practice is commonly called "householding" and is intended to
eliminate duplicate mailings of shareholder documents.
Mailings of your SchwabFunds-Registered Trademark- shareholder documents may be
householded indefinitely unless you instruct us otherwise.
ADDITIONAL COPIES OF SHAREHOLDER DOCUMENTS
ALL SCHWABFUNDS PROSPECTUSES AND SHAREHOLDER REPORTS ARE AVAILABLE FREE OF
CHARGE AND MAY BE REQUESTED AT ANY TIME BY CALLING SCHWAB AS INDICATED BELOW.
SCHWABFUNDS PROSPECTUSES ARE ALSO AVAILABLE ON OUR WEB SITE AT
WWW.SCHWAB.COM/SCHWABFUNDS.
NOTIFICATION INSTRUCTIONS
If you would prefer that your SchwabFunds mailings not be householded, please
contact:
- SCHWAB SIGNATURE SERVICES-TM- CLIENTS: Schwab Signature Services.
- INVESTMENT MANAGER CLIENTS: Schwab at 800-515-2157, or your investment
manager.
- ALL OTHER CLIENTS: Schwab at 800-435-4000.
Your instructions that householding not apply to your accounts holding
SchwabFunds will be effective within 30 days of receipt by Schwab.
<PAGE>
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
Semiannual Report
June 30, 2000
<PAGE>
SCHWAB MUNICIPAL MONEY FUNDS
We're pleased to bring you this semiannual report for the following funds (the
funds) for the six-month period ended June 30, 2000:
- 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 stability of capital and liquidity.(1)
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 and Value Advantage Shares, which are both
presented in this report. These two share 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.
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.
CONTENTS
<TABLE>
<S> <C>
---------------------------------------------
A Message from the Chairman 1
---------------------------------------------
What Money Fund Investors Should Know 2
---------------------------------------------
Market Overview 5
---------------------------------------------
Portfolio Management 9
---------------------------------------------
Schwab Municipal Money Fund 10
---------------------------------------------
Schwab California Municipal Money Fund 11
---------------------------------------------
Schwab New York Municipal Money Fund 12
---------------------------------------------
Schwab New Jersey Municipal Money Fund 13
---------------------------------------------
Schwab Pennsylvania Municipal Money Fund 14
---------------------------------------------
Schwab Florida Municipal Money Fund 15
---------------------------------------------
Fund Discussion 16
---------------------------------------------
Glossary of Terms 20
---------------------------------------------
Portfolio Highlights 21
---------------------------------------------
Financial Statements and Notes 24
---------------------------------------------
</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
[PHOTO]
Dear Shareholder,
During the last few years, the benefits of investing have been readily apparent,
while the risks have been somewhat less obvious. In recent months, however,
investors have been subject to larger swings in the market, even within the span
of a single day.
Given this divergent environment, the message is clear: Expect volatility,
maintain a long-term view and ensure your investment strategy is appropriate for
your risk tolerance and time horizon. One way to lessen the impact of volatility
on your portfolio is to adequately diversify your investments, both within and
across asset sectors, namely cash equivalents, bonds and stocks. With its broad
range of funds, SchwabFunds-Registered Trademark- can help form the foundation
of a diversified investment plan. Our asset allocation funds can even provide
diversification within a single fund.
We recently added four new sector funds, the Schwab Focus Funds, to our
SchwabFunds offering. Each invests in a group of industries within a specific
sector--Communications, Financial Services, Healthcare and Technology--and can
be an effective complement to individual stock investing. Each Focus Fund
concentrates its investing in companies in a specific sector and may involve a
greater degree of risk than an investment in mutual funds with greater
diversification. For more information on the Schwab Focus Funds, please call
800-435-4000 and request a prospectus. The prospectus contains more information
on fund fees and expenses as well as risks. Please read it carefully before
investing.
As a leader in online brokerage, we recognize the value of the web as a means of
communicating timely, relevant information to investors. Regular updates on all
of the SchwabFunds, including performance data, are available on our Web site at
www.schwab.com/schwabfunds. We encourage you to take advantage of this valuable
resource.
Thank you for your investment in SchwabFunds. For our part, we at SchwabFunds
will do everything we can to warrant the trust you have placed in us.
Sincerely,
/s/ Charles R. Schwab
Charles R. Schwab
June 30, 2000
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, money market securities or
funds, 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. 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. 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 convenient access to
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 brokerage account, consider an account that has a "sweep"
feature. Accounts with this feature automatically "sweep" uninvested cash 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 in your account. This convenience
may be well worth the small additional cost.
LARGER CASH BALANCES: You may earn higher yields 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. These funds
typically have higher minimum balance requirements and transaction policies
designed to minimize fund operating expenses, and 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 money funds seek to preserve the value of your investment at
$1 per share, it is possible to lose money by investing in a money fund.
(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>
SCHWAB MONEY FUNDS
Schwab offers two types of money funds--Sweep Investments-TM- and Value
Advantage Investments-Registered Trademark-. Both include funds that offer
taxable and tax-free income. 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 portfolio.
SWEEP INVESTMENTS are designed for your cash balances requiring frequent access.
These funds can be linked to your Schwab account to serve as a primary sweep
money fund. That means uninvested cash in your Schwab brokerage account is
automatically swept in and out of the fund, based on transactions in your
account and the terms and conditions of your account agreement.
VALUE ADVANTAGE INVESTMENTS are designed for your larger cash balances that
don't require frequent access. Value Advantage Investments have higher minimum
initial and ongoing balance requirements than Sweep Investments. These
requirements, along with policies designed to discourage frequent transactions,
can help minimize fund expenses--which in turn can mean higher returns for
investors. Value Advantage Investments cannot be linked to your Schwab account
to serve as your primary sweep fund.
Schwab offers a variety of 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 TAXABLE MONEY FUNDS
SCHWAB MONEY MARKET FUND A high-quality money fund for investors interested in
the potential for high money market yields.
SCHWAB VALUE ADVANTAGE MONEY FUND-REGISTERED TRADEMARK- A high-quality money
fund designed for larger cash balances that don't require frequent access.
SCHWAB GOVERNMENT MONEY FUND Designed for investors who want current money
market yields along with the added margin of safety provided by a portfolio of
U.S. government securities and repurchase agreements.
SCHWAB U.S. TREASURY MONEY FUND Of all the money funds offered by Schwab, this
one seeks to provide the highest degree of safety. The fund invests exclusively
in U.S. Treasury securities and other investments that are backed by the full
faith and credit of the U.S. government. What's more, income from the fund is
generally free from state and local income taxes.
SCHWAB MUNICIPAL MONEY FUNDS(1)
SCHWAB MUNICIPAL MONEY FUND A high-quality municipal money fund that seeks to
provide income that is free from federal income tax.
SCHWAB STATE-SPECIFIC MUNICIPAL MONEY FUNDS Each of these funds is designed for
taxpayers of a particular state and seeks to provide income that is exempt from
federal, state and, in some cases, local income taxes. The Schwab Florida
Municipal Money Fund also seeks to have its shares exempt from the Florida
Intangible Tax.
- 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
(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.
3
<PAGE>
WHAT MONEY FUND INVESTORS SHOULD KNOW (continued)
The table below presents the various money fund choices available at Schwab.
<TABLE>
<CAPTION>
VALUE ADVANTAGE
TAXABLE MONEY FUNDS SWEEP INVESTMENTS-TM- INVESTMENTS-REGISTERED TRADEMARK-
<S> <C> <C>
------------------------------------------------------------------------------------------------------------
Schwab Money Market Fund -
------------------------------------------------------------------------------------------------------------
Schwab Value Advantage Money Fund--Investor Shares -
------------------------------------------------------------------------------------------------------------
Schwab Government Money Fund -
------------------------------------------------------------------------------------------------------------
Schwab U.S. Treasury Money Fund -
------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY FUNDS
<S> <C> <C>
------------------------------------------------------------------------------------------------------------
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 -
------------------------------------------------------------------------------------------------------------
</TABLE>
If you would like more information on any of these funds, please call
800-435-4000 and request a prospectus. The prospectus contains more information
on fund fees and expenses as well as risks. Please read it carefully before
investing.
WE MAKE IT EASY TO INVEST
We make it easy and convenient to invest in SchwabFunds-Registered Trademark-.
You can invest through our Web site at www.schwab.com or through our automated
touch-tone telephone service, TeleBroker by calling 800-272-4922. Or, you can
visit any of our more than 350 nationwide branches.
Schwab MoneyLink-Registered Trademark- lets you transfer money electronically,
safely and easily between your Schwab account and your accounts at other
financial institutions--at regularly scheduled intervals or upon request. For
more information on MoneyLink, call 800-435-4000.
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
current information about our investment philosophy and funds, including
performance updates, can be found at our Web site: www.schwab.com/schwabfunds
4
<PAGE>
MARKET OVERVIEW
U.S. ECONOMIC GROWTH REMAINS STRONG
April 2000 marked the beginning of the tenth year of the current economic
expansion, the longest in U.S. history. Gross Domestic Product (GDP) grew at a
real (inflation adjusted) rate of 4.6% during 1999--the fourth consecutive year
at 4% or more--and 5.0% during the first half of 2000. These rates are
considered by most economists and the Federal Reserve (Fed) to be in excess of
what the economy can absorb without experiencing inflationary pressures--perhaps
3.5% to 4.0%. High levels of consumer spending fueled by rising incomes,
personal wealth and consumer confidence, as well as strong business capital
investment and a healthy housing sector, have been the principal factors driving
this lengthy expansion.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REAL GROSS DOMESTIC PRODUCT
QUARTERLY PERCENTAGE CHANGE (ANNUALIZED RATE)
<S> <C>
Q1 1990 5.00%
Q2 1990 1.00%
Q3 1990 -0.60%
Q4 1990 -3.00%
Q1 1991 -1.70%
Q2 1991 2.60%
Q3 1991 1.30%
Q4 1991 2.50%
Q1 1992 4.30%
Q2 1992 4.00%
Q3 1992 3.10%
Q4 1992 5.20%
Q1 1993 -0.70%
Q2 1993 2.10%
Q3 1993 1.50%
Q4 1993 6.00%
Q1 1994 3.60%
Q2 1994 5.70%
Q3 1994 2.20%
Q4 1994 5.10%
Q1 1995 1.50%
Q2 1995 0.80%
Q3 1995 3.20%
Q4 1995 3.30%
Q1 1996 2.90%
Q2 1996 6.90%
Q3 1996 2.20%
Q4 1996 4.90%
Q1 1997 4.90%
Q2 1997 5.10%
Q3 1997 4.00%
Q4 1997 3.10%
Q1 1998 6.70%
Q2 1998 2.10%
Q3 1998 3.80%
Q4 1998 5.90%
Q1 1999 3.70%
Q2 1999 1.90%
Q3 1999 5.70%
Q4 1999 7.30%
Q1 2000 4.80%
Q2 2000 5.20%
Source: BLOOMBERG L.P.
</TABLE>
Looking ahead, the availability of scarce labor resources and domestic
consumers' responses to continued market volatility may be key determinants of
whether the economy continues on its current course or softens in the second
half of 2000. The Fed has raised the federal funds rate a total of 1.75% since
June 1999.
Although preliminary signs may indicate a second half slowdown in the vigorous
growth rate of the economy, opinions vary with regard to future federal funds
rate increases. Most economists do agree, however, that the U.S. economy appears
poised for continued strong growth in 2000, albeit at lower rates than
experienced in the first half.
UNEMPLOYMENT CONTINUES TO BE VERY LOW
As employment growth continues to exceed population growth, the unemployment
rate remains very low. In fact, the 3.9% rate for April 2000 represented the
lowest level in 30 years. Labor markets continue to be extremely tight in many
areas of the country, reflecting a shrinking pool of available workers.
Another closely watched metric, the labor force participation rate, which
measures the employment population as a percentage of the total population, is
at a post-war high. While growth in the labor force has recently declined, the
Fed has expressed its concern that continued tight labor markets and the related
increases in wages may put further pressure on manufacturers and service
providers to raise prices.
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 6.8%
Feb-94 6.6%
Mar-94 6.5%
Apr-94 6.4%
May-94 6.1%
Jun-94 6.1%
Jul-94 6.3%
Aug-94 6.0%
Sep-94 5.8%
Oct-94 5.8%
Nov-94 5.6%
Dec-94 5.5%
Jan-95 5.6%
Feb-95 5.4%
Mar-95 5.3%
Apr-95 5.8%
May-95 5.8%
Jun-95 5.6%
Jul-95 5.6%
Aug-95 5.7%
Sep-95 5.6%
Oct-95 5.5%
Nov-95 5.7%
Dec-95 5.6%
Jan-96 5.6%
Feb-96 5.5%
Mar-96 5.6%
Apr-96 5.5%
May-96 5.6%
Jun-96 5.3%
Jul-96 5.5%
Aug-96 5.1%
Sep-96 5.2%
Oct-96 5.2%
Nov-96 5.3%
Dec-96 5.4%
Jan-97 5.3%
Feb-97 5.3%
Mar-97 5.1%
Apr-97 5.0%
May-97 4.7%
Jun-97 5.0%
Jul-97 4.7%
Aug-97 4.9%
Sep-97 4.7%
Oct-97 4.7%
Nov-97 4.6%
Dec-97 4.7%
Jan-98 4.5%
Feb-98 4.6%
Mar-98 4.6%
Apr-98 4.3%
May-98 4.3%
Jun-98 4.5%
Jul-98 4.5%
Aug-98 4.5%
Sep-98 4.5%
Oct-98 4.5%
Nov-98 4.4%
Dec-98 4.3%
Jan-99 4.3%
Feb-99 4.4%
Mar-99 4.2%
Apr-99 4.3%
May-99 4.2%
Jun-99 4.3%
Jul-99 4.3%
Aug-99 4.2%
Sep-99 4.2%
Oct-99 4.1%
Nov-99 4.1%
Dec-99 4.1%
Jan-00 4.0%
Feb-00 4.1%
Mar-00 4.1%
Apr-00 3.9%
May-00 4.1%
Jun-00 4.0%
Source: BLOOMBERG L.P.
</TABLE>
5
<PAGE>
MARKET OVERVIEW (continued)
INFLATION REMAINS CONTAINED, BUT CONCERNS EMERGE
Virtually all measures of price inflation exhibited upward trends during the
reporting period. The Consumer Price Index (CPI) rose 3.7% for the year ended
June 2000. CPI's core rate (which excludes the more volatile food and energy
components) trended up to 2.4%. The Personal Consumption Expenditures Index, a
measure of inflation closely watched by the Fed, rose 2.6% for the same period.
The GDP price deflator, the broadest measure of inflation, indicated prices
rising at an annual rate of 2.9% during the first half of 2000.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMPLOYMENT COST INDEX CONSUMER PRICE INDEX
MEASURES OF INFLATION 12 - MONTH CHANGE (QUARTERLY) 12 - MONTH CHANGE (MONTHLY)
<S> <C> <C>
Jan-90 5.5% 5.2%
Feb-90 5.5% 5.3%
Mar-90 5.5% 5.2%
Apr-90 5.4% 4.7%
May-90 5.4% 4.4%
Jun-90 5.4% 4.7%
Jul-90 5.2% 4.8%
Aug-90 5.2% 5.6%
Sep-90 5.2% 6.2%
Oct-90 4.9% 6.3%
Nov-90 4.9% 6.3%
Dec-90 4.9% 6.1%
Jan-91 4.6% 5.7%
Feb-91 4.6% 5.3%
Mar-91 4.6% 4.9%
Apr-91 4.6% 4.9%
May-91 4.6% 5.0%
Jun-91 4.6% 4.7%
Jul-91 4.3% 4.4%
Aug-91 4.3% 3.8%
Sep-91 4.3% 3.4%
Oct-91 4.3% 2.9%
Nov-91 4.3% 3.0%
Dec-91 4.3% 3.1%
Jan-92 4.0% 2.6%
Feb-92 4.0% 2.8%
Mar-92 4.0% 3.2%
Apr-92 3.6% 3.2%
May-92 3.6% 3.0%
Jun-92 3.6% 3.1%
Jul-92 3.5% 3.2%
Aug-92 3.5% 3.1%
Sep-92 3.5% 3.0%
Oct-92 3.5% 3.2%
Nov-92 3.5% 3.0%
Dec-92 3.5% 2.9%
Jan-93 3.5% 3.3%
Feb-93 3.5% 3.2%
Mar-93 3.5% 3.1%
Apr-93 3.6% 3.2%
May-93 3.6% 3.2%
Jun-93 3.6% 3.0%
Jul-93 3.6% 2.8%
Aug-93 3.6% 2.8%
Sep-93 3.6% 2.7%
Oct-93 3.5% 2.8%
Nov-93 3.5% 2.7%
Dec-93 3.5% 2.7%
Jan-94 3.2% 2.5%
Feb-94 3.2% 2.5%
Mar-94 3.2% 2.5%
Apr-94 3.2% 2.4%
May-94 3.2% 2.3%
Jun-94 3.2% 2.5%
Jul-94 3.2% 2.8%
Aug-94 3.2% 2.9%
Sep-94 3.2% 3.0%
Oct-94 3.0% 2.6%
Nov-94 3.0% 2.7%
Dec-94 3.0% 2.7%
Jan-95 2.9% 2.8%
Feb-95 2.9% 2.9%
Mar-95 2.9% 2.9%
Apr-95 2.9% 3.1%
May-95 2.9% 3.2%
Jun-95 2.9% 3.0%
Jul-95 2.7% 2.8%
Aug-95 2.7% 2.6%
Sep-95 2.7% 2.5%
Oct-95 2.7% 2.8%
Nov-95 2.7% 2.6%
Dec-95 2.7% 2.5%
Jan-96 2.8% 2.7%
Feb-96 2.8% 2.7%
Mar-96 2.8% 2.8%
Apr-96 2.9% 2.9%
May-96 2.9% 2.9%
Jun-96 2.9% 2.8%
Jul-96 2.8% 3.0%
Aug-96 2.8% 2.9%
Sep-96 2.8% 3.0%
Oct-96 2.9% 3.0%
Nov-96 2.9% 3.3%
Dec-96 2.9% 3.3%
Jan-97 2.9% 3.0%
Feb-97 2.9% 3.0%
Mar-97 2.9% 2.8%
Apr-97 2.8% 2.5%
May-97 2.8% 2.2%
Jun-97 2.8% 2.3%
Jul-97 3.0% 2.2%
Aug-97 3.0% 2.2%
Sep-97 3.0% 2.2%
Oct-97 3.3% 2.1%
Nov-97 3.3% 1.8%
Dec-97 3.3% 1.7%
Jan-98 3.3% 1.6%
Feb-98 3.3% 1.4%
Mar-98 3.3% 1.4%
Apr-98 3.5% 1.4%
May-98 3.5% 1.7%
Jun-98 3.5% 1.7%
Jul-98 3.7% 1.7%
Aug-98 3.7% 1.6%
Sep-98 3.7% 1.5%
Oct-98 3.4% 1.5%
Nov-98 3.4% 1.5%
Dec-98 3.4% 1.6%
Jan-99 3.0% 1.7%
Feb-99 3.0% 1.6%
Mar-99 3.0% 1.7%
Apr-99 3.2% 2.3%
May-99 3.2% 2.1%
Jun-99 3.2% 2.0%
Jul-99 3.1% 2.1%
Aug-99 3.1% 2.3%
Sep-99 3.1% 2.6%
Oct-99 3.4% 2.6%
Nov-99 3.4% 2.6%
Dec-99 3.4% 2.7%
Jan-00 4.3% 2.7%
Feb-00 4.3% 3.2%
Mar-00 4.3% 3.7%
Apr-00 4.4% 3.0%
May-00 4.4% 3.1%
Jun-00 4.4% 3.7%
Source: BLOOMBERG L.P. AND BUREAU OF LABOR STATISTICS
</TABLE>
Wage inflation also exhibited a marked upward trend during the reporting period,
as indicated by the Employment Cost Index (ECI). The ECI which measures the cost
of employing workers, including both wages and benefits, rose 4.4% for the year
ended June 2000.
Although these rates of inflation and employment cost may not be alarmingly high
by historical standards, the Fed has demonstrated its resolve to keep inflation
at bay in both its communications and its actions (six federal funds rate
increases since June 1999).
The Fed also has expressed concern that if labor markets continue to tighten,
increases in wages may outpace productivity growth and place additional upward
pressure on prices. Productivity growth becomes particularly critical in this
environment as it enables companies to pay higher wages without raising prices.
Non-farm productivity grew 3.0% in 1999 and at a healthy 3.6% rate in the first
half of 2000.
ASSET CLASS PERFORMANCE--SMALL-CAPS AND TECH STOCKS ARE VOLATILE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ASSET CLASS PERFORMANCE LEHMAN RUSSELL 2000
AGGREGATE MSCI-EAFE SMALL-CAP S&P 500
BOND INDEX INDEX INDEX INDEX
<S> <C> <C> <C> <C>
1/7/00 -0.06% -4.56% -3.23% -1.89%
1/14/00 -0.52% -2.21% 0.60% -0.28%
1/21/00 -0.68% -4.39% 5.82% -1.90%
1/28/00 -0.01% -4.83% 0.05% -7.42%
2/4/00 0.12% -2.85% 4.21% -2.99%
2/11/00 -0.17% -2.30% 6.54% -5.53%
2/18/00 0.37% -3.76% 8.26% -8.32%
2/25/00 1.02% -3.01% 10.45% -9.19%
3/3/00 1.20% -0.97% 18.72% -3.92%
3/10/00 1.00% -0.99% 19.84% -4.88%
3/17/00 1.69% -2.17% 14.09% -0.15%
3/24/00 1.57% -0.25% 14.01% 4.14%
3/31/00 2.20% -0.40% 7.09% 2.27%
4/7/00 3.02% -1.40% 7.88% 3.48%
4/14/00 2.95% -4.85% -9.80% -7.42%
4/21/00 2.85% -5.64% -4.23% -2.10%
4/28/00 1.90% -5.73% 0.64% -0.81%
5/5/00 0.47% -6.12% 1.98% -2.16%
5/12/00 0.34% -7.08% -2.33% -2.95%
5/19/00 0.54% -10.41% -4.56% -3.91%
5/26/00 1.64% -9.93% -8.97% -5.89%
6/2/00 2.83% -3.95% 2.11% 1.04%
6/9/00 3.15% -4.10% 4.16% -0.35%
6/16/00 4.02% -4.46% 2.37% 0.17%
6/23/00 3.05% -5.35% 1.75% -1.40%
6/30/00 3.99% -4.06% 3.04% -0.42%
</TABLE>
COMPILED BY CHARLES SCHWAB & CO., INC.
As shown on the chart above, equity valuations, and particularly those of
small-cap and technology stocks, exhibited extreme volatility during the
reporting period.
The price/earnings (P/E) ratio for the NASDAQ 100 Index fell by 33% in just 14
trading days in March and
6
<PAGE>
April. Remarkably, it still remained at levels above 100 even after this
precipitous decline.
Small-cap stocks, as represented by the Russell 2000 Index, achieved a total
return of 3.04% for the six-month reporting period. Large cap stocks, as
represented by the S&P 500 Index, produced a negative return of -0.42% for the
same period.
Dampened by relatively weak foreign currencies, international stocks, as
represented by the MSCI EAFE Index, achieved a negative return of -4.06% for the
reporting period. Fixed income returns, on the other hand, were generally
positive for the reporting period, reflecting a decline in intermediate and
long-term interest rates. Bond returns, as represented by the Lehman Brothers
Aggregate Bond Index, were 3.99% for the six-month reporting period.
TREASURY BOND YIELDS--THE YIELD CURVE INVERTS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
10-YEAR AND FIVE-YEAR TREASURY BOND YIELDS 10-YEAR TREASURY BOND YIELD FIVE-YEAR TREASURY NOTE YIELD
<S> <C> <C>
1/7/2000 6.52% 6.41%
1/14/2000 6.68% 6.58%
1/21/2000 6.77% 6.63%
1/28/2000 6.66% 6.66%
2/4/2000 6.55% 6.65%
2/11/2000 6.60% 6.70%
2/18/2000 6.49% 6.68%
2/25/2000 6.33% 6.47%
3/3/2000 6.39% 6.59%
3/10/2000 6.38% 6.60%
3/17/2000 6.19% 6.45%
3/24/2000 6.19% 6.50%
3/31/2000 6.00% 6.31%
4/7/2000 5.58% 6.18%
4/14/2000 5.58% 6.11%
4/21/2000 5.99% 6.24%
4/28/2000 6.21% 6.54%
5/5/2000 6.51% 6.76%
5/12/2000 6.51% 6.77%
5/19/2000 6.49% 6.70%
5/26/2000 6.33% 6.57%
6/2/2000 6.15% 6.37%
6/9/2000 6.13% 6.36%
6/16/2000 5.97% 6.18%
6/23/2000 6.19% 6.37%
6/30/2000 6.03% 6.19%
Source: BLOOMBERG L.P.
</TABLE>
Treasury bond yields exhibited an unusual pattern during the reporting period.
Yields on ten and 30-year treasury securities typically exceed those of
five-year securities to compensate investors for the additional interest rate
risk associated with longer duration securities. As shown in the graph above,
however, this normal relationship reversed in January resulting in what is
referred to as a negative yield curve.
This negative yield curve is a result of the accumulating budget surpluses,
which are allowing the federal government to downsize its debt. The Treasury
Department announced earlier this year that it plans to buy back $30 billion in
debt in 2000 starting with longer-dated maturities since those payments carry
the steepest interest payment. The anticipated reduction in supply resulting
from this buyback program, as well as scaled back issuance, bid up the price of
the longer-term securities and correspondingly reduced their yields during the
reporting period.
7
<PAGE>
MARKET OVERVIEW (continued)
SHORT-TERM INTEREST RATE ON THE RISE
Short-term interest rates increased during the reporting period, due to a
combination of a robust U.S. economy and the Fed's actions to increase the
federal funds rate from 5.5% at the beginning of the reporting period (January
1, 2000) to 6.5% by the end of the reporting period (June 30, 2000).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
90-DAY COMMERCIAL PAPER THREE-MONTH 90-DAY
AND THREE-MONTH TREASURY BILL YIELDS TREASURY BILL COMMERCIAL PAPER
<S> <C> <C>
1/7/2000 5.38% 5.66%
1/14/2000 5.40% 5.71%
1/21/2000 5.46% 5.77%
1/28/2000 5.62% 5.79%
2/4/2000 5.66% 5.85%
2/11/2000 5.63% 5.86%
2/18/2000 5.75% 5.86%
2/25/2000 5.77% 5.88%
3/3/2000 5.82% 5.89%
3/10/2000 5.89% 5.91%
3/17/2000 5.87% 6.00%
3/24/2000 5.90% 6.05%
3/31/2000 5.87% 6.09%
4/7/2000 5.89% 6.09%
4/14/2000 5.78% 6.08%
4/21/2000 5.80% 6.12%
4/28/2000 5.83% 6.17%
5/5/2000 5.97% 6.41%
5/12/2000 6.13% 6.54%
5/19/2000 5.87% 6.59%
5/26/2000 5.83% 6.61%
6/2/2000 5.87% 6.62%
6/9/2000 5.91% 6.57%
6/16/2000 5.83% 6.57%
6/23/2000 5.84% 6.57%
6/30/2000 5.85% 6.58%
Source: BLOOMBERG L.P.
</TABLE>
Short-term municipal rates climbed in tandem with short-term taxable yields, due
to the Fed's aggressive rate hikes.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
90-DAY MUNICIPAL COMMERCIAL
PAPER YIELDS
<S> <C>
1/7/2000 3.60%
1/14/2000 3.60%
1/21/2000 3.60%
1/28/2000 3.60%
2/4/2000 3.70%
2/11/2000 3.70%
2/18/2000 3.70%
2/25/2000 3.90%
3/3/2000 3.90%
3/10/2000 4.00%
3/17/2000 4.00%
3/24/2000 4.00%
3/31/2000 4.10%
4/7/2000 4.00%
4/14/2000 4.00%
4/21/2000 4.25%
4/28/2000 4.40%
5/5/2000 4.60%
5/12/2000 4.75%
5/19/2000 4.45%
5/26/2000 4.50%
6/2/2000 4.38%
6/9/2000 4.30%
6/16/2000 4.30%
6/23/2000 4.40%
6/30/2000 4.50%
Source: BLOOMBERG L.P.
</TABLE>
THIS MARKET OVERVIEW HAS BEEN PROVIDED BY THE PORTFOLIO MANAGEMENT TEAM.
8
<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 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.
9
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP SHARES VALUE ADVANTAGE SHARES
<S> <C> <C>
--------------------------------------------------------------------------------------------
Seven-Day Current Yield 3.85% 4.06%
--------------------------------------------------------------------------------------------
Seven-Day Effective Yield 3.92% 4.14%
--------------------------------------------------------------------------------------------
Seven-Day Taxable-Equivalent Effective Yield(2) 6.49% 6.85%
--------------------------------------------------------------------------------------------
</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 taxable
money funds on a taxable-equivalent basis.(3) The figures below illustrate the
yield advantage on a taxable-equivalent basis for both classes of the fund's
shares compared to the average seven-day effective yield of 6.02% as of 6/27/00
for first-tier taxable money funds.(4)
<TABLE>
<CAPTION>
SWEEP SHARES VALUE ADVANTAGE SHARES
<S> <C> <C>
--------------------------------------------------------------------------------------------
Yield advantage over the average taxable money
fund(5) 0.40% 0.77%
--------------------------------------------------------------------------------------------
</TABLE>
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 expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
(2) Taxable-equivalent yield assumes a 2000 maximum federal regular income tax
rate of 39.60%.
(3) Income may be subject to state and local taxes and the federal alternative
minimum tax (AMT).
(4) Source: iMoneyNet, Inc.'s weekly average seven-day yield for the 298 funds
in the first-tier retail category of taxable money funds as of 6/27/00.
(5) Represents seven-day period ended 6/27/00, the last day of the reporting
period for which iMoneyNet, Inc. data was available. This yield advantage
relationship was not consistent throughout the reporting period.
PORTFOLIO COMPOSITION
The Schwab Municipal Money Fund invests in high-quality, municipal money market
securities from state issuers around the country and from municipal agencies,
U.S. territories and possessions. The chart to the right illustrates the
composition of the fund's portfolio as of June 30, 2000, and is not indicative
of its holdings after that date. A complete list of the securities in the fund's
portfolio as of June 30, 2000 is provided in the Schedule of Investments later
in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
Variable Rate Obligations 58.1%
Tender Option Bonds 13.9%
Tax-Exempt Commercial Paper 7.7%
Put Bonds 6.8%
Anticipation Notes 6.6%
Revenue Bonds 5.8%
Other 1.1%
</TABLE>
10
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP SHARES VALUE ADVANTAGE SHARES
<S> <C> <C>
--------------------------------------------------------------------------------------------
Seven-Day Current Yield 3.37% 3.57%
--------------------------------------------------------------------------------------------
Seven-Day Effective Yield 3.43% 3.64%
--------------------------------------------------------------------------------------------
Seven-Day Taxable-Equivalent Effective Yield(2) 6.26% 6.64%
--------------------------------------------------------------------------------------------
</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 taxable money funds on a taxable-equivalent basis.(3) The figures
below illustrate the yield advantage on a taxable-equivalent basis for both
classes of the fund's shares compared to the average seven-day effective yield
of 6.02% as of 6/27/00 for first-tier taxable money funds.(4)
<TABLE>
<CAPTION>
SWEEP SHARES VALUE ADVANTAGE SHARES
<S> <C> <C>
--------------------------------------------------------------------------------------------
Yield advantage over the average taxable money
fund(5) 0.20% 0.59%
--------------------------------------------------------------------------------------------
</TABLE>
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 expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
(2) Taxable-equivalent yield assumes a 2000 maximum combined federal regular
income and California state personal income tax rate of 45.22%.
(3) Income may be subject to the federal alternative minimum tax (AMT).
(4) Source: iMoneyNet, Inc.'s weekly average seven-day yield for the 298 funds
in the first-tier retail category of taxable money funds as of 6/27/00.
(5) Represents seven-day period ended 6/27/00, the last day of the reporting
period for which iMoneyNet, Inc. data was available. This yield advantage
relationship was not consistent throughout the reporting period.
PORTFOLIO COMPOSITION
The Schwab California Municipal Money Fund invests in high-quality money market
securities from California issuers and from municipal agencies, U.S. territories
and possessions. The chart to the right illustrates the composition of the
fund's portfolio as of June 30, 2000 and is not indicative of its holdings after
that date. A complete list of the securities in the fund's portfolio as of
June 30, 2000 is provided in the Schedule of Investments later in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
Variable Rate Obligations 40.9%
Tax-Exempt Commercial Paper 21.9%
Anticipation Notes 16.6%
Tender Option Bonds 10.7%
Revenue Bonds 8.4%
Other 1.5%
</TABLE>
11
<PAGE>
SCHWAB NEW YORK MUNICIPAL MONEY FUND
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP SHARES VALUE ADVANTAGE SHARES
<S> <C> <C>
--------------------------------------------------------------------------------------------
Seven-Day Current Yield 3.62% 3.86%
--------------------------------------------------------------------------------------------
Seven-Day Effective Yield 3.68% 3.93%
--------------------------------------------------------------------------------------------
Seven-Day Taxable-Equivalent Effective Yield(2) 6.82% 7.28%
--------------------------------------------------------------------------------------------
</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 taxable money funds on a taxable-equivalent
basis.(3) The figures below illustrate the yield advantage on a
taxable-equivalent basis for both classes of the fund's shares compared to the
average seven-day effective yield of 6.02% as of 6/27/00 for first-tier taxable
money funds.(4)
<TABLE>
<CAPTION>
SWEEP SHARES VALUE ADVANTAGE SHARES
<S> <C> <C>
--------------------------------------------------------------------------------------------
Yield advantage over the average taxable money
fund(5) 0.74% 1.19%
--------------------------------------------------------------------------------------------
</TABLE>
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 expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
(2) Taxable-equivalent yield assumes a 2000 maximum combined federal regular
income and New York state and New York City personal income tax rate of
46.02%.
(3) Income may be subject to the federal alternative minimum tax (AMT).
(4) Source: iMoneyNet, Inc.'s weekly average seven-day yield for the 298 funds
in the first-tier retail category of taxable money funds as of 6/27/00.
(5) Represents seven-day period ended 6/27/00, the last day of the reporting
period for which iMoneyNet, Inc. data was available. This yield advantage
relationship was not consistent throughout the reporting period.
PORTFOLIO COMPOSITION
The Schwab New York Municipal Money Fund invests in high-quality money market
securities from New York issuers and from municipal agencies, U.S. territories
and possessions. The chart to the right illustrates the composition of the
fund's portfolio as of June 30, 2000 and is not indicative of its holdings after
that date. A complete list of the securities in the fund's portfolio as of
June 30, 2000 is provided in the Schedule of Investments later in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
Variable Rate Obligations 28.1%
Tender Option Bonds 24.6%
Revenue Bonds 16.0%
Tax-Exempt Commercial Paper 15.6%
Anticipation Notes 10.2%
General Obligations 3.4%
Put Bonds 2.1%
</TABLE>
12
<PAGE>
SCHWAB NEW JERSEY MUNICIPAL MONEY FUND
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP SHARES
<S> <C>
------------------------------------------------------------------
Seven-Day Current Yield 3.65%
------------------------------------------------------------------
Seven-Day Effective Yield 3.71%
------------------------------------------------------------------
Seven-Day Taxable-Equivalent Effective Yield(2) 6.56%
------------------------------------------------------------------
</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 advantage on a taxable-equivalent basis of
the fund's shares compared to the average seven-day effective yield of 6.02% as
of 6/27/00 for first-tier taxable money funds.(4)
<TABLE>
<CAPTION>
SWEEP SHARES
<S> <C>
------------------------------------------------------------------
Yield advantage over the average taxable money
fund(5) 0.51%
------------------------------------------------------------------
</TABLE>
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 expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
(2) Taxable-equivalent yield assumes a 2000 maximum combined federal regular
income and New Jersey state personal income tax rate of 43.45%.
(3) Income may be subject to the federal alternative minimum tax (AMT).
(4) Source: iMoneyNet, Inc.'s weekly average seven-day yield for the 298 funds
in the first-tier retail category of taxable money funds as of 6/27/00.
(5) Represents seven-day period ended 6/27/00, the last day of the reporting
period for which iMoneyNet, Inc. data was available. This yield advantage
relationship was not consistent throughout the reporting period.
PORTFOLIO COMPOSITION
The Schwab New Jersey Municipal Money Fund invests in high-quality money market
securities from New Jersey issuers and from municipal agencies, U.S. territories
and possessions. The chart to the right illustrates the composition of the
fund's portfolio as of June 30, 2000 and is not indicative of its holdings after
that date. A complete list of the securities in the fund's portfolio as of
June 30, 2000 is provided in the Schedule of Investments later in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
Variable Rate Obligations 37.6%
Tender Option Bonds 28.9%
Anticipation Notes 19.8%
Revenue Bonds 7.8%
General Obligations 4.5%
Tax-Exempt Commercial Paper 1.4%
</TABLE>
13
<PAGE>
SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP SHARES
<S> <C>
------------------------------------------------------------------
Seven-Day Current Yield 3.83%
------------------------------------------------------------------
Seven-Day Effective Yield 3.91%
------------------------------------------------------------------
Seven-Day Taxable-Equivalent Effective Yield(2) 6.66%
------------------------------------------------------------------
</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 taxable money funds on a taxable-equivalent basis.(3) The figure
below illustrates the yield advantage on a taxable-equivalent basis of the
fund's shares compared to the average seven-day effective yield of 6.02% as of
6/27/00 for first-tier taxable money funds:(4)
<TABLE>
<CAPTION>
SWEEP SHARES
<S> <C>
------------------------------------------------------------------
Yield advantage over the average taxable money
fund(5) 0.55%
------------------------------------------------------------------
</TABLE>
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 expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
(2) Taxable-equivalent yield assumes a 2000 maximum combined federal regular
income and Pennsylvania state personal income tax rate of 41.29%.
(3) Income may be subject to the federal alternative minimum tax (AMT).
(4) Source: iMoneyNet, Inc.'s weekly average seven-day yield for the 298 funds
in the first-tier retail category of taxable money funds as of 6/27/00.
(5) Represents seven-day period ended 6/27/00, the last day of the reporting
period for which iMoneyNet, Inc. data was available. This yield advantage
relationship was not consistent throughout the reporting period.
PORTFOLIO COMPOSITION
The Schwab Pennsylvania Municipal Money Fund invests in high-quality money
market securities from Pennsylvania issuers and from municipal agencies, U.S.
territories and possessions. The chart to the right illustrates the composition
of the fund's portfolio as of June 30, 2000 and is not indicative of its
holdings after that date. A complete list of the securities in the fund's
portfolio as of June 30, 2000 is provided in the Schedule of Investments later
in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
Variable Rate Obligations 48.6%
Tender Option Bonds 23.6%
General Obligations 16.8%
Revenue Bonds 5.9%
Tax-Exempt Commercial Paper 5.1%
</TABLE>
14
<PAGE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP SHARES
<S> <C>
------------------------------------------------------------------
Seven-Day Current Yield 3.92%
------------------------------------------------------------------
Seven-Day Effective Yield 4.00%
------------------------------------------------------------------
Seven-Day Taxable-Equivalent Effective Yield(2) 6.62%
------------------------------------------------------------------
</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 taxable
money funds on a taxable-equivalent basis.(3) The figure below illustrates the
yield advantage on a taxable-equivalent basis of the fund's shares compared to
the average seven-day effective yield of 6.02% as of 6/27/00 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 advantage over the average taxable money
fund(5) 0.50%
------------------------------------------------------------------
</TABLE>
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 expenses was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
(2) Taxable-equivalent yield assumes a 2000 maximum federal regular income tax
rate of 39.60%.
(3) Income may be subject to the federal alternative minimum tax (AMT).
(4) Source: iMoneyNet, Inc.'s weekly average seven-day yield for the 298 funds
in the first-tier category of taxable money funds as of 6/27/00.
(5) Represents seven-day period ended 6/27/00, the last day of the reporting
period for which iMoneyNet, Inc. data was available. This yield advantage
relationship was not consistent throughout the reporting period.
PORTFOLIO COMPOSITION
The Schwab Florida Municipal Money Fund invests in high-quality money market
securities from Florida issuers and from municipal agencies, U.S. territories
and possessions. The chart to the right illustrates the composition of the
fund's portfolio as of June 30, 2000 and is not indicative of its holdings after
that date. A complete list of the securities in the fund's portfolio as of
June 30, 2000 is provided in the Schedule of Investments later in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
Variable Rate Obligations 47.9%
Tax-Exempt Commercial Paper 10.3%
Revenue Bonds 8.8%
Tender Option Bonds 18.3%
General Obligations 5.3%
Anticipation Notes 5.2%
Other 4.2%
</TABLE>
15
<PAGE>
FUND DISCUSSION
QUESTIONS TO THE
PORTFOLIO MANAGEMENT TEAM
Q. CAN YOU DESCRIBE THE SHORT-TERM INTEREST RATE ENVIRONMENT DURING THE
SIX-MONTH REPORTING PERIOD?
A. Short-term interest rates increased during the reporting period, as a result
of the strength of the U.S. economy and actions taken by the Federal Reserve
(Fed) to slow the pace of the economy and stem inflationary pressures. During
the reporting period, the U.S. economy continued to grow rapidly, in spite of
six separate interest rate hikes imposed by the Fed over the past year. Also,
strong employment and record high equity values stimulated consumer spending, a
key factor fueling the economy. Finally, gross domestic product (GDP) advanced
strongly at a 5.0% annualized growth rate for the six month period ended June
30, 2000. As a result, the Fed has expressed concern that if the present rate of
growth continues, inflationary pressures could derail nine and a half years of
economic expansion.
Thus, in the first half of the reporting period, the Fed adhered to a gradual
approach to slowing down the economy by raising the federal funds rate by 0.25%
in both February and March 2000. When April's unemployment rate declined to
3.9%, the lowest level in 30 years, the Fed abandoned its gradual approach and
raised the federal funds rate by 0.50% in May. This increase lifted the federal
funds rate to 6.5%, its highest level since 1991.
Short-term municipal rates climbed in tandem with short-term taxable yields, due
to the Fed's aggressive rate hikes. In April and May, lower demand for short-
term municipal securities intensified interest rate increases as investors
redeemed shares to meet personal income tax obligations. The yield of the Bond
Market Association Index, a weekly index of demand note rates, advanced from
3.54% on April 5, 2000 to 5.84% on May 10, 2000. Rates on municipal variable
rate securities fell during the remainder of the reporting period, as demand for
short-term municipal securities resumed and the Fed left short-term rates
unchanged at its June meeting.
Q. HOW HAS THE PORTFOLIO MANAGEMENT TEAM ADJUSTED THE FUNDS' PORTFOLIOS IN
RESPONSE TO CHANGES IN INTEREST RATES?
A. We managed the dollar-weighted average maturity (DWAM) for the portfolios in
order to capitalize on the seasonal cycles typical of short-term municipal
securities markets. At the end of December 1999, we extended the funds'
maturities to lock in higher yields. This strategy enabled the funds to be
insulated from depressed rates typical of demand notes as their rates are reset
in the month of January.
Beginning in January through May, we shortened the funds' DWAMs to take
advantage of the higher interest rate environment. The benefits of this strategy
were that in an increasing interest rate environment, the proceeds from the
shorter term securities can be reinvested at the higher prevailing rates.
Further, in anticipation of investors' redemptions near the April tax deadline,
we increased the funds' liquidity by selling longer-term securities and moving
into shorter-term demand notes. The portfolio managers then began extending the
funds' DWAMs in June to lock in the benefits of higher yielding new issues.
16
<PAGE>
Q. WHAT IS YOUR VIEW OF THE ECONOMIC CLIMATE IN CALIFORNIA?
A. California continues to enjoy a sustained economic recovery with employment
and income growth continuing to exceed expectations. As in prior years,
California's non-farm employment gain of 3.3% during 1999 continued to surpass
the national growth rate. Looking forward, it is anticipated that California
will see continued moderate growth of at least 2.5% in both 2000 and 2001.
California should also benefit from increased economic vibrancy in Asia and from
strong growth in exports to Mexico, Europe, Canada and the Middle East.
As the state's economy has steadily improved, California has accumulated budget
reserves and eased some of the spending restrictions imposed during the last
recession. Specifically, exceptional revenue growth allowed the state to end its
June 30, 2000 fiscal year with budget reserves exceeding $7 billion, well over
the $3 billion projected six months ago.
In addition, the 2001 fiscal budget was adopted on time for just the second time
in many years. Despite plans to increase spending on key initiatives, such as
education, transportation, health and human services during 2001, the state
still anticipates maintaining approximately $1.8 billion in reserves. As in
prior years, however, periodic budget adjustments may be necessary to keep
spending in line with revenues. Therefore, absent stronger than anticipated
revenues or a substantial slowdown in spending, the state's financial position
may be somewhat static over the next twelve months.
We are satisfied that the California securities held by the funds represent
minimal credit risk and we will, as always, continue to monitor the state's
economic situation closely. California'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 NEW YORK?
A. New York's satisfactory credit quality is supported by the state's diverse
economic base and by New York City's central role in international finance,
tourism and other service-related businesses. The 2.6% job growth rate for 1999
was the highest level in a decade and was well above the projected level of
1.5%. Projections for the year 2000 are that job growth will increase by 2.1%,
the second highest level in a decade. The strong job growth rate in 1999 led to
a 5.1% increase in personal income and is expected to generate an additional
4.9% increase in 2000.
In spite of budgetary surpluses in seven of the last eight years, New York still
faces the challenge of resolving long-standing general fund imbalances. The
state ended its March 31, 2000 fiscal year with a general fund surplus of
approximately $1.2 billion. Most of this surplus has already been earmarked to
offset tax cuts enacted in recent years and as a contingency for future economic
uncertainties. The state's current economic projections are reasonable and in
line with those of independent institutions; however, those projections are also
predicated on continued strength within the financial services sector. This
reliance on a single sector may be a weakness unless the financial services
sector continues to produce the outstanding results of the last four years.
17
<PAGE>
FUND DISCUSSION (continued)
We are satisfied that the New York securities held by the funds represent
minimal credit risk and we will continue to monitor the 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 derives from its diversified
economy, high personal income levels (second only to Connecticut's) and strong
control over the state's finances. Along with most of the northeast region, New
Jersey was severely impacted by the recession of the early 1990s. While overall
recovery started off slowly, due to increased job growth over the last three
years, the rate of total employment now exceeds pre-recession levels.
Over the last few years, increasing tax revenues, use of non-recurring financial
resources and spending controls have generated excess revenues. As a result, the
state has accumulated a financial cushion of approximately 5.5% of its annual
expenditures as of the end of the 2000 fiscal year.
The state's fiscal 2001 budget generally follows the track of prior years with
no new taxes and a focus on educational and environmental spending. Also as in
prior years, it is anticipated that increased revenues may partially offset
higher spending levels. 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. The state's current economic projections are
reasonable and in line with those of independent institutions; however,
projections are also predicated on the continued strength within the financial
services sector. This reliance on a single sector may be a weakness unless the
financial services sector continues to produce the outstanding results of the
last four years.
We are satisfied that the New Jersey securities held by the funds represent
minimal credit risk and we will continue to monitor the 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 the state's
conservative financial management, improving job growth, economic
diversification and moderate debt levels. Just like much of the northeast
region, Pennsylvania was severely impacted by the recession of the early 1990s.
Recovery came slowly, as evidenced by annual increases in non-farm payroll which
were less than half the national rate through 1996. However, during the period
between 1993 and 1998, the state created 250,000 jobs, becoming the nation's
eighth leading job creator. Economic expansion is anticipated to continue as the
state strongly pursues economic development projects.
In each of the last eight years, Pennsylvania has generated operating surpluses,
allowing the state to make contributions to its Rainy Day Fund. The Rainy Day
Fund now totals more than $1.05 billion and represents approximately 5.5% of
fiscal 2000 revenues. The state's 2001 budget was adopted prior to the start
18
<PAGE>
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 draw on
its reserves in fiscal 2001. In the event that future economic growth is slower
than projected, the state may utilize spending reductions or some of its
accumulated reserves to meet the shortfall.
We are satisfied that the Pennsylvania securities held by the funds represent
minimal credit risk and we will continue to monitor the 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. In terms of population, Florida continues to be the fourth largest state in
the nation. The state's rapid economic growth contributes to continuing
diversification of its economy primarily into the trade, services, finance and
export sectors, thus greatly reducing its dependence on the agriculture and
tourism industries. This expanding diversification, along with moderate debt
levels and successful financial operations, has helped Florida maintain above
average credit quality. In addition, the state has successfully met the
challenge of funding growth while maintaining a balanced budget, even during
periods of economic weakness. As cyclical sales tax revenues continue to provide
approximately 70% of total revenues, Florida created the Budget Stabilization
Fund (Fund) in the early 1990's to increase its financial reserves. As of the
end of fiscal 2000, the Fund represents about 5% of general fund revenues, which
brings the state to its legislated target.
We are satisfied that the Florida securities held by the funds represent minimal
credit risk and we will continue to monitor the 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.
19
<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 values 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.
20
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP VALUE ADVANTAGE
SHARES SHARES
<S> <C> <C>
-----------------------------------------------------------------------------
Last seven days 3.85% 4.06%
-----------------------------------------------------------------------------
Last three months 3.67% 3.88%
-----------------------------------------------------------------------------
Last 12 months 3.06% 3.27%
-----------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
---------------------------------------------------
0-15 days 70.7% 77.6%
---------------------------------------------------
16-30 days 1.9% 0.8%
---------------------------------------------------
31-60 days 4.9% 3.3%
---------------------------------------------------
61-90 days 6.0% 3.3%
---------------------------------------------------
91-120 days 4.1% 3.3%
---------------------------------------------------
More than 120 days 12.4% 11.7%
---------------------------------------------------
Weighted average 41 days 45 days
---------------------------------------------------
</TABLE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP VALUE ADVANTAGE
SHARES SHARES
<S> <C> <C>
-----------------------------------------------------------------------------
Last seven days 3.37% 3.57%
-----------------------------------------------------------------------------
Last three months 3.17% 3.37%
-----------------------------------------------------------------------------
Last 12 months 2.66% 2.86%
-----------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
---------------------------------------------------
0-15 days 62.9% 59.9%
---------------------------------------------------
16-30 days 1.1% 6.4%
---------------------------------------------------
31-60 days 6.1% 7.9%
---------------------------------------------------
61-90 days 2.7% 6.1%
---------------------------------------------------
91-120 days 16.6% 4.9%
---------------------------------------------------
More than 120 days 10.6% 14.8%
---------------------------------------------------
Weighted average 44 days 66 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 NEW YORK MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP VALUE ADVANTAGE
SHARES SHARES
<S> <C> <C>
-----------------------------------------------------------------------------
Last seven days 3.62% 3.86%
-----------------------------------------------------------------------------
Last three months 3.48% 3.72%
-----------------------------------------------------------------------------
Last 12 months 2.96% 3.20%
-----------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
---------------------------------------------------
0-15 days 53.8% 55.9%
---------------------------------------------------
16-30 days -- 4.0%
---------------------------------------------------
31-60 days 7.5% 16.1%
---------------------------------------------------
61-90 days 12.8% 1.4%
---------------------------------------------------
91-120 days 8.5% 2.8%
---------------------------------------------------
More than 120 days 17.4% 19.8%
---------------------------------------------------
Weighted average 67 days 58 days
---------------------------------------------------
</TABLE>
SCHWAB NEW JERSEY MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP
SHARES
<S> <C>
-----------------------------------------------------------
Last seven days 3.65%
-----------------------------------------------------------
Last three months 3.53%
-----------------------------------------------------------
Last 12 months 2.96%
-----------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
---------------------------------------------------
0-15 days 64.2% 69.6%
---------------------------------------------------
16-30 days 2.2% 2.9%
---------------------------------------------------
31-60 days 1.6% 3.3%
---------------------------------------------------
61-90 days 3.9% 8.3%
---------------------------------------------------
91-120 days 4.4% 3.3%
---------------------------------------------------
More than 120 days 23.7% 12.6%
---------------------------------------------------
Weighted average 70 days 46 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>
PORTFOLIO HIGHLIGHTS
SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP
SHARES
<S> <C>
-----------------------------------------------------------
Last seven days 3.83%
-----------------------------------------------------------
Last three months 3.73%
-----------------------------------------------------------
Last 12 months 3.10%
-----------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
---------------------------------------------------
0-15 days 76.4% 67.6%
---------------------------------------------------
16-30 days 0.5% 5.4%
---------------------------------------------------
31-60 days 2.2% 4.6%
---------------------------------------------------
61-90 days 4.6% 1.6%
---------------------------------------------------
91-120 days 2.0% 3.6%
---------------------------------------------------
More than 120 days 14.3% 17.2%
---------------------------------------------------
Weighted average 48 days 46 days
---------------------------------------------------
</TABLE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<CAPTION>
SWEEP
SHARES
<S> <C>
-----------------------------------------------------------
Last seven days 3.92%
-----------------------------------------------------------
Last three months 3.73%
-----------------------------------------------------------
Last 12 months 3.16%
-----------------------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
---------------------------------------------------
0-15 days 67.9% 76.6%
---------------------------------------------------
16-30 days -- --
---------------------------------------------------
31-60 days 3.7% 5.8%
---------------------------------------------------
61-90 days 5.9% 4.4%
---------------------------------------------------
91-120 days 8.2% 3.8%
---------------------------------------------------
More than 120 days 14.3% 9.4%
---------------------------------------------------
Weighted average 44 days 41 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.
23
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS -- 59.0% (b)(f)
ALABAMA -- 0.7%
Alabama State IDA RB (Cash Value
Project)
4.90%, 07/07/00 $ 2,950 $ 2,950
Alabama State IDA RB (Scientific
Project)
5.10%, 07/07/00 2,970 2,970
Birmingham, Alabama GO Series 1992A
5.10%, 07/07/00 5,600 5,600
Birmingham, Alabama Unlimited GO
Refunding Bonds Series 1995
4.80%, 07/07/00 3,800 3,800
Citronelle, Alabama IDB Pollution
Control Revenue Refunding Bonds
(AKZO Chemicals, Inc. Project)
4.90%, 07/07/00 1,100 1,100
Daphne, Alabama Utilities Board of
Water, Gas, & Sewer Revenue
Refunding Bonds
4.84%, 07/07/00 9,705 9,705
Decatur, Alabama IDB Solid Waste
Disposal RB (Trico Steel Project)
Series 1997
4.90%, 07/07/00 5,700 5,700
Decatur, Alabama IDRB (Alabama
Farmers Corp.)
4.90%, 07/07/00 2,900 2,900
Dothan, Alabama IDB RB (Baxley
Blowpipe Project)
4.95%, 07/07/00 700 700
Fort Payne, Alabama IDA Base Tax
Exempt Adjustable Mode IDRB
(Charleston Hosiery Project)
Series 1997
4.90%, 07/07/00 1,800 1,800
Headland, Alabama IDB RB (Golden
Peanut Project)
4.95%, 07/07/00 4,000 4,000
Indian Springs Village, Alabama
Additional Building Authority RB
(Jbruno Academy Project)
4.85%, 07/07/00 1,545 1,545
Mobile County, Alabama IDB Pollution
Control Revenue Refunding Bonds
(Ultraform Co. Project) Series 1995A
4.85%, 07/07/00 7,480 7,480
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Mobile County, Alabama IDB RB
(Ultraform Co. Project) Series 1995B
4.85%, 07/07/00 $ 1,000 $ 1,000
Mobile, Alabama IDB IDRB (Holman
Inc. Project)
4.90%, 07/07/00 1,000 1,000
Scottsboro, Alabama GO
4.85%, 07/07/00 4,650 4,650
Tuscaloosa, Alabama IDB IDRB
(Field Container Corp.)
4.80%, 07/07/00 1,100 1,100
Tuscaloosa, Alabama IDRB (Knight
Special Project)
5.00%, 07/07/00 1,135 1,135
----------
59,135
----------
ARIZONA -- 1.2%
Arizona Educational Loan Marketing
Corp. RB Series A
4.80%, 07/07/00 12,705 12,705
Arizona Health Facilities Authority
Hospital System RB (Arizona Volunteer
Hospital Federation) Series 1985A
4.75%, 07/07/00 11,240 11,240
Arizona Health Facilities Authority
Hospital System RB (Arizona Volunteer
Hospital Federation) Series 1985B
4.75%, 07/07/00 8,955 8,955
Arizona Health Facilities Authority
Hospital System RB (Northern Arizona
Health Care) Series 1996B
4.75%, 07/07/00 26,700 26,700
Chandler, Arizona IDA IDRB (South Bay
Circuits Project) Series 1999A
4.95%, 07/07/00 2,000 2,000
Coconino County, Arizona Pollution
Control RB (Arizona Public Services
Co. Project)
4.70%, 07/07/00 15,000 15,000
Maricopa County, Arizona IDA M/F
Housing RB (Gran Victoria Housing
LLC Project) Series 2000A
4.70%, 07/07/00 1,500 1,500
Phoenix, Arizona Civic Improvement
Excise Tax RB (Airport Improvements)
4.85%, 07/07/00 1,000 1,000
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Phoenix, Arizona IDA RB (Vaw America
Inc. Project)
4.90%, 07/07/00 $ 3,000 $ 3,000
Tempe, Arizona Excise Tax RB
4.55%, 07/01/00 700 700
Yavapai County, Arizona IDRB (Yavapai
Regional Medical Center)
4.75%, 07/07/00 15,250 15,250
Yuma County, Arizona IDA M/F Housing
RB (El Encanto Apartments) Series A
4.75%, 07/07/00 2,915 2,915
Yuma County, Arizona IDA RB
(Meadowcraft, Inc. Project) Series 1997
4.90%, 07/07/00 1,000 1,000
----------
101,965
----------
ARKANSAS -- 0.3%
Arkansas Development Finance Authority
IDRB (C&C Holding Co. Project)
Series 1998
4.90%, 07/07/00 1,490 1,490
Arkansas State Development Finance
Authority Higher Education Capitial RB
Series 1985A
4.60%, 07/07/00 7,600 7,600
Independance County, Arkansas IDRB
(Townsends of Arkansas, Inc. Project)
4.85%, 07/07/00 9,000 9,000
Independence County, Arkansas IDRB
(Ideal Baking Project)
4.90%, 07/07/00 5,300 5,300
----------
23,390
----------
CALIFORNIA -- 0.3%
California Higher Education Loan
Authority Student Loan Revenue
Refunding Bonds Series 1992E-1
4.70%, 07/07/00 23,000 23,000
----------
COLORADO -- 2.5%
Adams County, Colorado Economic
Development Authority Tax Increment
RB (Westminster Plaza Urban Renewal
Project)
4.95%, 07/07/00 6,460 6,460
Adams County, Colorado IDRB (City
View Park Project) Series 1985
4.90%, 07/07/00 5,700 5,700
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Arapahoe County, Colorado Industrial
Development Revenue Refunding
Bonds (Denver Jet Center Project)
Series 1997
4.55%, 07/01/00 $ 1,000 $ 1,000
Central City, Colorado M/F Housing RB
(Gold Mountain Apartment Project)
4.95%, 07/07/00 8,250 8,250
Colorado Health Facilities Authority RB
(National Benevolent Assoc. Project)
4.75%, 07/07/00 1,550 1,550
Colorado HFA Economic Development RB
(Inovonics Enterprises Project)
5.00%, 07/07/00 1,700 1,700
Colorado HFA Economic Development RB
(Pemracs LTD LLP Project) Series 2000A
4.95%, 07/07/00 3,785 3,785
Colorado Student Obligation Bond
Authority Student Loan RB (Colorado
University) Series 1990A
4.85%, 07/07/00 14,400 14,400
Colorado Student Obligation Bond
Authority Student Loan RB Series 1989A
4.85%, 07/07/00 23,050 23,050
Colorado Student Obligation Bond
Authority Student Loan RB
Series 1999A-2
4.85%, 07/07/00 16,000 16,000
Colorado Student Obligation Bond
Authority Student Loan RB
Series 1999A-3
4.85%, 07/07/00 15,000 15,000
Denver, Colorado City & County Airport
System RB Series 1992D
4.80%, 07/07/00 49,400 49,400
Denver, Colorado City & County Airport
System RB Series 1992F
4.80%, 07/07/00 16,000 16,000
Denver, Colorado City & County Airport
System RB Series 1992G
4.80%, 07/07/00 20,000 20,000
El Paso County, Colorado RB (Colorado
Springs World Arena)
4.85%, 07/07/00 1,350 1,350
Lowry, Colorado Economic
Redevelopment Authority Revenue
Bonds Series 1998A
4.70%, 07/07/00 11,500 11,500
</TABLE>
25
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Pueblo County, Colorado IDRB (Kaiser
Aerospace & Electric)
4.85%, 07/07/00 $ 5,100 $ 5,100
Smith Creek, Colorado Metropolitan
District RB Series 1997
4.85%, 07/07/00 2,250 2,250
Wheatridge County, Colorado IDRB
(Leaf Inc. Project)
4.80%, 07/07/00 7,000 7,000
----------
209,495
----------
DELAWARE -- 0.2%
Delaware State Economic Development
Authority IDRB (Star Enterprise Project)
Series 1997B
4.80%, 07/07/00 10,600 10,600
Delaware State Economic Development
Authority RB / (Hospital Billing and
Collection Service) Series 1985A
4.70%, 07/07/00 6,000 6,000
Delaware Valley, Pennsylvania Regional
Finance Authority Local Government
RB Series 1986
4.75%, 07/07/00 2,900 2,900
Sussex County, Delaware RB (Baywood
LLC Project) Series 1997A
5.00%, 07/07/00 2,400 2,400
----------
21,900
----------
DISTRICT OF COLUMBIA -- 0.3%
District of Columbia RB (Arnold &
Porter Project)
4.90%, 07/07/00 4,000 4,000
District of Columbia RB (George
Washington University Project)
Series 2000B
5.10%, 07/07/00 20,000 20,000
----------
24,000
----------
FLORIDA -- 9.4%
Alachua County, Florida Health Facilities
Authority RB (Shands Teaching
Hospital Clinic Project) Series 1996
4.95%, 07/07/00 11,200 11,200
Bradford County, Florida Health Facilities
Authority RB (Shands Teaching
Hospital Clinic Project) Series 1996
4.95%, 07/07/00 6,500 6,500
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Broward County, Florida Educational
Facilities Authority RB (Nova
SouthEastern) Series 2000A
4.80%, 07/07/00 $ 5,500 $ 5,500
Broward County, Florida HFA M/F
Housing RB (Landings Inverrary
Apartments Project) Series 1985
4.66%, 07/07/00 6,600 6,600
Broward County, Florida HFA M/F
Housing RB (Reflections Airport
Project)
4.85%, 07/07/00 5,000 5,000
Broward County, Florida HFA M/F
Housing RB (Sanctuary Apartments
Project) Series 1985
4.66%, 07/07/00 20,500 20,500
Broward County, Florida Port Facilities
Revenue Refunding Bonds (Sub Port
Everglades Project)
4.70%, 07/07/00 20,400 20,400
Citrus Park Community Development
District, Florida Capital Improvement
Bonds Series 1996
4.85%, 07/07/00 730 730
Collier County, Florida HFA M/F Housing
RB (River Beach Project) Series 1985
4.80%, 07/07/00 4,300 4,300
Dade County, Florida Health Facilities
Authority Hospital RB (Miami
Children's Hospital Project)
4.75%, 07/07/00 600 600
Dade County, Florida IDA Exempt
Facilities Revenue Refunding Bonds
(Florida Power & Light Co.)
4.60%, 07/01/00 1,800 1,800
Dade County, Florida IDA RB (June
Leasing Corp. Project) Series 1995
4.95%, 07/07/00 945 945
Dade County, Florida IDA RB
(Micheal-Ann Russell Jewish
Community Center Project) Series 1997
4.80%, 07/07/00 4,885 4,885
Florida Capital Financing Authority RB
(Capital Project Loan Program Project)
Series 1997A
4.75%, 07/07/00 21,150 21,150
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Florida HFA Housing RB (Ashley
Lake II Project) Series 1989J
4.95%, 07/07/00 $ 2,000 $ 2,000
Florida HFA Housing RB (Buchanan
Bay Townhomes Project) Series 1998S
4.95%, 07/07/00 3,225 3,225
Florida HFA Housing RB (Tiffany Club
Project) Series 1996P
4.80%, 07/07/00 4,750 4,750
Florida HFA Housing RB Series 1999G-1
4.90%, 07/07/00 4,000 4,000
Florida HFA M/F Housing RB (Buena
Vista Project) Series 1985MM
4.80%, 07/07/00 10,000 10,000
Florida HFA M/F Housing RB (South
Pointe Project) Series 1998J
4.66%, 07/07/00 3,500 3,500
Florida HFA M/F Housing RB
Series 1983J
4.80%, 07/07/00 7,370 7,370
Florida Housing Finance Corp. RB
(Heritage Pointe Project) Series 1999I-1
4.90%, 07/07/00 4,000 4,000
Florida Municipal Power Agency
Revenue Refunding Bonds (Stanton II
Project) Series 1997
4.85%, 07/07/00 14,700 14,700
Florida Ocean Highway & Port Authority
RB Series 1990
4.80%, 07/07/00 2,300 2,300
Florida State Finance Authority (Florida
Hospital Association - Capital Projects
Loan Program) Series 1998A
4.85%, 07/07/00 96,465 96,465
Florida State Municipal Power Agency
Revenue Refunding Bonds (Stanton
Project) Series 1997
4.65%, 07/07/00 10,200 10,200
Gulf Breeze, Florida RB (Local
Government Loan Program)
Series 1985B
4.80%, 07/07/00 21,910 21,910
Gulf Breeze, Florida RB (Local
Government Loan Program)
Series 1985C
4.80%, 07/07/00 4,305 4,305
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Gulf Breeze, Florida RB (Local
Government Loan Program)
Series 1985E
4.80%, 07/07/00 $ 25,740 $ 25,740
Halifax, Florida Hospital Medical Center
Health Care Facilities RB (Health Care
Plan, Inc. Project)
4.85%, 07/07/00 5,600 5,600
Highlands County, Florida Health
Facilities Authority RB (Adventist
Health Systems Project) Series 1997A
4.75%, 07/07/00 29,085 29,085
Hillsborough County, Florida Educational
Facilities Authority RB (University of
Tampa Project)
4.80%, 07/07/00 6,000 6,000
Hillsborough County, Florida IDA RB
(Tampa Metropolitan YMCA Project)
Series 2000K
5.10%, 07/07/00 14,400 14,400
Hillsborough County, Florida M/F
Housing RB (Brandon Crossing)
4.90%, 07/07/00 800 800
Indian River County, Florida RB (Saint
Edward's School Project)
4.75%, 07/07/00 10,000 10,000
Jacksonville, Flordia Economic
Development Community RB (Bolles
School Project) Series 1999A
4.75%, 07/07/00 3,485 3,485
Jacksonville, Florida Electric Authority
RB (Water & Sewer Systems)
Series 2000B
4.75%, 07/07/00 21,250 21,250
Jacksonville, Florida Health Facilities
Authority RB (River Garden Project)
Series 1994
4.80%, 07/07/00 1,040 1,040
Jacksonville, Florida Industrial
Development Revenue Refunding
Bonds (Pavilion Associates Project)
4.85%, 07/07/00 4,900 4,900
Jacksonville, Florida RB (Capital Project)
4.65%, 07/07/00 7,200 7,200
Lake Shore, Florida Hospital Authority
Health Facilities RB (Lakeshore Hospital
Project) Series 1991
4.80%, 07/07/00 3,500 3,500
</TABLE>
27
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Lakeland, Florida Educational Facilities
RB (Florida Southern College Project)
Series 1999
4.75%, 07/07/00 $ 30,000 $ 30,000
Lee County, Florida IDA Educational
Facilities RB (Canterbury School,
Inc. Project)
4.80%, 07/07/00 5,000 5,000
Miami, Florida HFA RB (Jewish Home
for the Aged, Inc. Project) Series 1996
4.80%, 07/07/00 7,250 7,250
Miami-Dade County Florida IDRB
(Gulliver Schools Project) Series 2000
4.80%, 07/07/00 24,000 24,000
Miami-Dade County, Florida IDA
Airport Facilities RB (Flight Safety
Project) Series 1999A
4.90%, 07/07/00 11,600 11,600
Miami-Dade County, Florida IDA IDRB
(Airis Miami LLC Project) Series 1999A
4.70%, 07/07/00 31,400 31,400
Miami-Dade County, Florida IDA IDRB
(Arctic Partners Project)
4.95%, 07/07/00 680 680
Miami-Dade County, Florida IDA RB
(Belen Jesuit Preparatory School Project)
Series 1999
4.80%, 07/07/00 8,000 8,000
Miami-Dade County, Florida IDRB
(Airbus Service Co. Project)
Series 1998A
4.90%, 07/07/00 1,200 1,200
Orange County, Florida Educational
Facilities Authority Educational
Facilities RB (Rollins College Project)
Series 1999
4.80%, 07/07/00 4,800 4,800
Orange County, Florida Health Facilities
Authority RB / (Florida Hospital
Association Health Facility Loan
Program) Series 2000A
5.10%, 07/07/00 35,000 35,000
Orange County, Florida HFA Housing
Revenue Refunding Bonds (Highland
Pointe Apartments Project) Series 1988J
4.70%, 07/07/00 4,200 4,200
Orange County, Florida HFA M/F Housing
RB (Andover Place Apartments)
4.75%, 07/07/00 5,300 5,300
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Orange County, Florida HFA M/F
Housing RB (Smokewood Project)
Series 1992A
4.90%, 07/07/00 $ 19,950 $ 19,950
Orange County, Florida HFA M/F
Housing RB Series 2000G
4.71%, 07/07/00 3,200 3,200
Orange County, Florida IDA (Center For
Drug Free Living Project)
4.75%, 07/07/00 10,085 10,085
Orlando, Florida Special Assessment RB
(Republic Drive Interchange Project)
4.55%, 07/07/00 36,650 36,650
Palm Beach County, Florida HDA M/F
Revenue Refunding Bonds (Spinnaker
Landing Project)
4.80%, 07/07/00 3,045 3,045
Palm Beach County, Florida HFA
Revenue Refunding Bonds (Joseph L.
Morse Geriatric Center Project)
4.80%, 07/07/00 10,755 10,755
Palm Beach County, Florida IDRB
(Palm Beach Day Care School Project)
Series 1999
4.80%, 07/07/00 5,000 5,000
Palm Beach County, Florida RB (Norton
Gallery Art School Project) Series 1995
4.65%, 07/07/00 200 200
Pasco County, Florida School Board COP
4.75%, 07/07/00 52,370 52,370
Pinellas County, Florida Independent
Council RB (Operation Par, Inc. Project)
Series 1999
4.80%, 07/07/00 6,685 6,685
Plant City, Florida Hospital RB (Southern
Florida Baptist Hospital Project)
4.75%, 07/07/00 5,600 5,600
Polk County, Florida IDA RB (Farmland
Hydro Project)
4.85%, 07/07/00 2,000 2,000
Polk County, Florida IDA RB
(Pavermodule Inc. Project)
4.90%, 07/07/00 2,800 2,800
Polk County, Florida IDA RB (Young
Florida Project) Series 1996
4.85%, 07/07/00 275 275
Sarasota County, Florida RB (Sarasota
County Family YMCA Project)
4.75%, 07/07/00 3,600 3,600
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
SouthEast Volusia, Florida Hospital
District RB (Bert Fish Medical Center
Project) Series 1995
4.85%, 07/07/00 $ 12,505 $ 12,505
Suwannee County, Florida Health
Facilities Authority RB (Shands
Teaching Hospital Clinic Project)
Series 1996
4.95%, 07/07/00 4,500 4,500
Tallahassee & Leon County, Florida
Civic Center Authority Capital
Improvement RB Series 1998A
4.80%, 07/07/00 4,690 4,690
Tampa, Florida Health Care Facilities RB
(Lifelink Foundation Inc. Project)
4.80%, 07/07/00 5,500 5,500
Tampa, Florida Occupational License
Tax RB Series 1996A
4.85%, 07/07/00 9,340 9,340
West Orange, Florida Healthcare District
RB Series 1999B
4.60%, 07/07/00 7,400 7,400
----------
806,415
----------
GEORGIA -- 5.4%
Athens-Clarke, Jackson & Morgan
County, Georgia IDRB (Mayfield Dairy
Farms Inc. Project)
4.90%, 07/07/00 7,350 7,350
Atlanta, Georgia Urban Residential
Finance Authority M/F Housing RB
(Brentwood Creek Apartments Project)
4.90%, 07/07/00 4,720 4,720
Atlanta, Georgia Urban Residential
Finance Authority M/F Housing RB
(Brentwood Meadows Apartments
Project)
4.90%, 07/07/00 3,065 3,065
Atlanta, Georgia Urban Residential
Finance Authority M/F Housing RB
(Brentwood Village Apartments Project)
4.90%, 07/07/00 6,195 6,195
Bartow County, Georgia IDRB (Bartow
Paving Co. Project)
4.90%, 07/07/00 2,800 2,800
Bartow County, Georgia IDRB (Matthew
Contracting Project)
4.85%, 07/07/00 4,000 4,000
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Cartersville, Georgia Development
Authority IDRB (Cartersville Facilities
Project)
4.90%, 07/07/00 $ 2,800 $ 2,800
Cherokee County, Georgia IDRB
(Universal Alloy)
4.90%, 07/07/00 4,300 4,300
Clayton County, Georgia Development
Authority Special Facilities RB (Delta
Air Lines) Series 2000B
4.80%, 07/07/00 109,055 109,055
Clayton County, Georgia Development
Authority Special Facilities RB (Delta
Air Lines) Series 2000C
4.90%, 07/07/00 29,500 29,500
Clayton County, Georgia IDRB (Wilson
Holdings Project)
4.90%, 07/07/00 1,400 1,400
Cobb County, Georgia HFA M/F Housing
RB (Walton Green Project)
4.90%, 07/07/00 6,300 6,300
Cobb County, Georgia HFA M/F Housing
Revenue Refunding Bonds (Walton Park
Apartments Project)
4.85%, 07/07/00 21,100 21,100
Columbus, Georgia Development
Authority RB (Foundation Property's
Inc. Project) Series 2000
4.95%, 07/07/00 10,000 10,000
Crisp County, Cordele, Georgia IDA IDRB
(Georgia Ductile Project)
5.04%, 07/07/00 15,000 15,000
Crisp County, Georgia Solid Waste
Management Authority RB
4.92%, 07/07/00 19,600 19,600
Dekalb County, Georgia Development
Authority IDRB (Arbor Montessori
School Project)
4.80%, 07/07/00 1,100 1,100
Dekalb County, Georgia Development
Authority IDRB (Siemens Energy, Inc.
Project)
4.85%, 07/07/00 3,750 3,750
Dekalb County, Georgia Development
Authority IDRB (Truman Properties
Ltd. Liability Corp. Project)
4.90%, 07/07/00 2,400 2,400
</TABLE>
29
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Dekalb County, Georgia Development
Authority IDRB (Vimco Project)
4.90%, 07/07/00 $ 1,625 $ 1,625
Dekalb County, Georgia HFA M/F
Housing RB (Wood Hills Apartment
Project)
4.90%, 07/07/00 7,250 7,250
Douglas County, Georgia IDA RB
(Blue Circle Project)
4.85%, 07/07/00 3,800 3,800
Douglas County, Georgia IDA Revenue
Refunding Bonds (Mima Inc. Project)
4.80%, 07/07/00 4,300 4,300
Fulton County, Georgia Development
Authority RB (Atlanta International
School Project)
4.80%, 07/07/00 3,000 3,000
Fulton County, Georgia Development
Authority RB (Woodruff Arts Center
Project)
4.80%, 07/07/00 10,000 10,000
Gwinnett County, Georgia Development
Authority Solid Waste Disposal
Facilities RB (Lucent Technologies,
Inc. Project)
4.85%, 07/07/00 13,700 13,700
Gwinnett County, Georgia HFA M/F
Housing RB
4.75%, 07/07/00 5,000 5,000
Hart County, Georgia Industrial Building
Authority IDRB (Awh Corp. Project)
4.90%, 07/07/00 6,000 6,000
Hart County, Georgia Industrial Building
Authority IDRB (Dundee Mills Project)
4.90%, 07/07/00 2,840 2,840
Jefferson County, Georgia Development
Authority IDRB (Grove River Mills
Project) Series 1997
4.90%, 07/07/00 2,900 2,900
Lafayette, Georgia Development
Authority RB (Dixie Group Project)
4.90%, 07/07/00 4,000 4,000
Laurens County, Georgia Development
Authority Solid Waste Disposal RB
(Southeast Paper Manufacturing Co.
Project)
4.90%, 07/07/00 51,000 51,000
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Lowndes County, Georgia Development
Authority M/F Housing RB (FMPH
Valdosta, LTD. Partnership Project)
4.90%, 07/07/00 $ 5,045 $ 5,045
Macon-Bibb County, Georgia Hospital
Authority RB (The Medical Center of
Central Georgia Project) Series 1998
4.80%, 07/07/00 4,000 4,000
Richmond County, Georgia Development
Authority Solid Waste Disposal RB
(South Evergreen Nylon Recycling
Project) Series 1999
4.90%, 07/07/00 5,900 5,900
Roswell, Georgia HFA M/F Housing RB
(Gables Realty Wood Crossing Project)
4.80%, 07/07/00 11,650 11,650
Savannah, Georgia Economic
Development Authority RB (Georgia
Kaolin Inc.)
4.85%, 07/07/00 11,000 11,000
Savannah, Georgia Economic
Development Authority RB (Home
Depot Project) Series 1995B
4.85%, 07/07/00 5,000 5,000
Savannah, Georgia HFA M/F Housing RB
(Chatham Gardens Project) Series 1997
4.90%, 07/07/00 2,995 2,995
Sugar Hill, Georgia HFA M/F Housing RB
(Level Creek Apartments Project)
4.95%, 07/07/00 12,790 12,790
Summerville, Georgia Development
Authority RB (Image Industry Project)
Series 1997
4.90%, 07/07/00 9,000 9,000
Thomaston-Upson County, Georgia
IDA IDRB (Southern Mills Project)
Series 1999
4.90%, 07/07/00 4,940 4,940
Thomasville, Georgia Payroll
Development Authority (Brit Corp.
Project)
5.05%, 07/07/00 2,900 2,900
Walton County, Georgia Development
Authority RB (Tucker Door & Trim
Corp. Project)
5.00%, 07/07/00 2,600 2,600
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Webster County, Georgia IDA IDRB
(Tolleson Lumber Co., Inc. Project)
4.90%, 07/07/00 $ 8,000 $ 8,000
Winder-Barrow, Georgia Industrial
Building Authority IDRB (Progress
Container Corp. Project) Series 2000
4.90%, 07/07/00 3,320 3,320
Worth County, Georgia IDA Revenue
Refunding Bonds (Seabrook Project)
Series 1996B
4.90%, 07/07/00 1,400 1,400
----------
460,390
----------
HAWAII -- 0.4%
Hawaii Department of Budget & Finance
Special Purpose Mortgage RB
(Adventist Health System West)
4.85%, 07/07/00 6,900 6,900
Hawaii Student Loan RB (Secondary
Market Services Corp.) Series 1995-II
4.70%, 07/07/00 8,100 8,100
Honolulu, Hawaii City & County RB
Series 2000A
5.00%, 07/07/00 16,295 16,295
----------
31,295
----------
IDAHO -- 0.0%
Idaho HFA Housing RB (Assisted Living
Concepts Project)
4.85%, 07/07/00 845 845
----------
ILLINOIS -- 5.4%
Aurora, Illinois M/F Housing RB
(Apartments at Fox VY-A)
4.85%, 07/07/00 9,445 9,445
Bartlett, Illinois M/F Housing RB
(Bartlett Square Apartments)
Series 1995A
4.75%, 07/07/00 3,725 3,725
Batavia, Illinois Development RB
(American Industrial Technologies)
4.95%, 07/07/00 2,200 2,200
Carol Stream, Illinois M/F Housing
Revenue Refunding Bonds (St. Charles
Square Project)
4.90%, 07/07/00 4,415 4,415
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Centralia, Illinois IDA RB (Consolidated
Foods Corp. & Hollywood Brands, Inc.
Project)
4.80%, 07/07/00 $ 4,500 $ 4,500
Chicago, Illinois Gas Supply Revenue
Refunding Bond (Peoples Gas, Light &
Coke Co. Project) Series 2000C
4.77%, 07/07/00 8,000 8,000
Chicago, Illinois IDRB (Morse
Automotive Project) Series 1995
4.80%, 07/07/00 2,200 2,200
Chicago, Illinois Midway Airport Special
Facility RB (American Trans Air
Project)
5.00%, 07/07/00 5,000 5,000
Chicago, Illinois O'Hare International
Airport RB (ACES General Airport
Second Lien) Series B1
5.05%, 07/07/00 3,300 3,300
Chicago, Illinois O'Hare International
Airport RB (ACES General Airport
Second Lien) Series B2
5.05%, 07/07/00 13,800 13,800
Chicago, Illinois O'Hare International
Airport Special Facility RB
4.75%, 07/07/00 35,500 35,500
Chicago, Illinois RB (Homestart Program)
Series 2000A
4.85%, 07/07/00 15,000 15,000
Dupage County, Illinois RB (Benedictine
University Building Project)
4.80%, 07/07/00 16,000 16,000
East Dundee, Kane & Cook Counties,
Illinois IDRB (Otto Engine Project)
4.82%, 07/07/00 2,250 2,250
Elmhurst, Illinois IDRB (ELM Machining
Corp. Project)
4.95%, 07/07/00 3,080 3,080
Glendale Heights, Illinois IDRB (York
Corrugated Container Project)
4.95%, 07/07/00 1,500 1,500
Hampshire, Illinois IDRB (Poli-Film
America Project) Series 1998A
4.90%, 07/07/00 6,100 6,100
Illinois Development Finance Authority
(Anatol Enterprises)
4.95%, 07/07/00 3,700 3,700
</TABLE>
31
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Illinois Development Finance Authority
(Chicago Academy of Science Project)
Series 1998
4.80%, 07/07/00 $ 5,700 $ 5,700
Illinois Development Finance Authority
(Chicago Horticultural Society Project)
4.80%, 07/07/00 20,000 20,000
Illinois Development Finance Authority
(Palos Common Hospital Project)
Series 1998
4.80%, 07/07/00 10,000 10,000
Illinois Development Finance Authority
(Roll Service Inc. Project)
5.00%, 07/07/00 2,230 2,230
Illinois Development Finance Authority
(Wheaton Academy Project)
4.80%, 07/07/00 8,000 8,000
Illinois Development Finance Authority
IDRB (Arc Tronics Inc. Project)
5.00%, 07/07/00 2,800 2,800
Illinois Development Finance Authority
IDRB (Camcraft Inc. Project)
5.00%, 07/07/00 2,800 2,800
Illinois Development Finance Authority
IDRB (Catholic Charities)
4.80%, 07/07/00 720 720
Illinois Development Finance Authority
IDRB (Chicago Corrugated Box
Company) Series 6
4.95%, 07/07/00 750 750
Illinois Development Finance Authority
IDRB (Knead Dough Baking Co.)
4.85%, 07/07/00 6,035 6,035
Illinois Development Finance Authority
IDRB (MCL Inc. Project)
4.95%, 07/07/00 1,840 1,840
Illinois Development Finance Authority
IDRB (Molding Project)
5.10%, 07/07/00 2,650 2,650
Illinois Development Finance Authority
IDRB (Perkin Paperboard Co. LP)
Series 1994
4.90%, 07/07/00 5,500 5,500
Illinois Development Finance Authority
IDRB (Presbyterian Home Lake)
Series 1996A
4.80%, 07/07/00 34,000 34,000
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Illinois Development Finance Authority
IDRB (Radiological Society Project)
Series 1997
4.70%, 07/07/00 $ 4,900 $ 4,900
Illinois Development Finance Authority
IDRB (River Graphics Corp. Project)
Series 1996
4.95%, 07/07/00 3,200 3,200
Illinois Development Finance Authority
IDRB (SMF Inc. Project) Series A
4.95%, 07/07/00 2,020 2,020
Illinois Development Finance Authority
RB (Catholic Charities Housing Project)
Series 1993A
4.80%, 07/07/00 9,160 9,160
Illinois Development Finance Authority
RB (Chicago Academy of Science
Project)
4.80%, 07/07/00 4,615 4,615
Illinois Development Finance Authority
RB (Cloverhill Pastry Project)
5.00%, 07/07/00 4,810 4,810
Illinois Development Finance Authority
RB (Korex Corp. Project)
4.85%, 07/07/00 4,000 4,000
Illinois Development Finance Authority
RB (Lake Forest Academy Project)
4.80%, 07/07/00 2,000 2,000
Illinois Development Finance Authority
RB (St. Ignatius College Prep Project)
4.80%, 07/07/00 2,200 2,200
Illinois Development Finance Authority
RB (Variable Rest Haven Illiana Christian)
4.80%, 07/07/00 10,895 10,895
Illinois Development Finance Authority
RB (Village Oak Park Residence)
4.90%, 07/07/00 2,105 2,105
Illinois Development Finance Authority
Residential Rental RB (F C. Harris
Pavillion Project) Series 1994
4.65%, 07/07/00 27,510 27,510
Illinois Development Finance Authority
Residential Rental RB (River Oak
Project)
4.83%, 07/07/00 32,000 32,000
Illinois Development Finance Authority
Revenue Refunding Bonds (Francis W.
Parker Project)
4.65%, 07/07/00 2,500 2,500
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Illinois Development Finance Authority
Revenue Refunding Bonds (Rich
Products Corp. Project)
4.90%, 07/07/00 $ 1,525 $ 1,525
Illinois Educational Facility Authority
RB (Chicago Historical Society)
4.70%, 07/07/00 8,000 8,000
Illinois Educational Facility Authority
RB (Chicago Zoological Society
Brookfield Zoo) Series B
4.80%, 07/07/00 2,800 2,800
Illinois Educational Facility Authority RB
(National Loius University)
Series 1999B
4.75%, 07/07/00 17,700 17,700
Illinois Health Facility Authority RB
(Bensenville Home Society Project)
Series 1989A
4.80%, 07/07/00 2,275 2,275
Illinois Health Facility Authority RB
(Ingalls Memorial Hospital)
Series 1985C
4.85%, 07/07/00 1,100 1,100
Illinois Health Facility Authority RB
(Washington & Jane Smith Home)
Series 1991
4.75%, 07/07/00 2,800 2,800
Illinois Student Assistance Commission
Student Loan RB Series 1996A
4.85%, 07/07/00 7,800 7,800
Lombard, Illinois Industrial Development
Revenue Refunding Bonds
5.05%, 07/07/00 1,850 1,850
Melrose Park, Illinois IDRB (Ninos
Enterprises, Inc. Project)
5.00%, 07/07/00 3,000 3,000
New Lenox, Illinois IDRB (Panduit Corp.
Project)
4.80%, 07/07/00 4,400 4,400
Oak Forest, Illinois Development RB
(Homewood Pool-South Suburban
Mayors & Managers Association
Project)
4.75%, 07/07/00 10,000 10,000
Palatine, Illinois Special Facilities Limited
Obligation RB (Little City Community
Development Project)
4.80%, 07/07/00 4,000 4,000
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Richton Park, Illinois IDRB (Avatar
Corp. Project)
4.95%, 07/07/00 $ 1,900 $ 1,900
Rockford, Illinois IDRB (Industrial
Welding Supply, Inc. Project)
4.95%, 07/07/00 2,000 2,000
Rockford, Illinois IDRB (Ring Can Corp.
Project)
4.90%, 07/07/00 2,400 2,400
Tinley Park, Illinois IDA RB (Beverly
Manufacturing Co. Project)
Series 1997A
4.85%, 07/07/00 2,555 2,555
Tremont, Illinois IDRB (Hanna Steel
Project)
4.87%, 07/07/00 9,500 9,500
Upper Illinois River Valley Development
Authority Bonds (Exolon Esk Co.
Project) Series A
4.95%, 07/07/00 4,405 4,405
Village of Huntley, McHenry Kane
County, Illinois Special Civic Area # 9
Special Tax Boards Series 1998B
4.80%, 07/07/00 8,422 8,422
Woodstock, Illinois M/F Housing RB
(Prairie Trail) Series 1996A
4.85%, 07/07/00 3,425 3,425
Woodstock, Illinois M/F Housing RB
(Prairie View Ltd.)
4.85%, 07/07/00 2,935 2,935
Yorkville, Illinois IDRB (F.E. Wheaton &
Co. Inc. Project) Series 1996
4.95%, 07/07/00 1,370 1,370
----------
460,817
----------
INDIANA -- 0.9%
Crawfordsville, Indiana IDRB (National
Service Industries, Inc. Project)
4.80%, 07/07/00 4,000 4,000
Gary, Indiana Economic Development
Authority Revenue Refunding Bonds
(Tinplate Partnership Project)
Series 1997A
4.95%, 07/07/00 4,500 4,500
Gary, Indiana Empowerment Zone RB
(Chemcoaters LLC Project)
Series 2000A
4.95%, 07/07/00 6,500 6,500
</TABLE>
33
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Hammond, Indiana Economic
Development RB (Lear Seating Corp.
Project) Series 1994
4.30%, 07/07/00 $ 9,200 $ 9,200
Indiana Development Finance Authority
IDRB (Cives Corp. Project) Series 1998
4.90%, 07/07/00 2,550 2,550
Indiana Secondary Market Educational
Loans Inc. Student Loan RB
Series 1988B
4.70%, 07/07/00 27,000 27,000
Indiana State Development Finance
Authority RB (Mid America Energy
Resources Inc. Project)
4.85%, 07/07/00 4,500 4,500
Indiana State Development Finance
Authority RB (Mid-America Energy
Resources Inc. Project)
4.85%, 07/07/00 4,300 4,300
Indiana State Development Finance
Authority IDRB (Big Sky Park Project)
4.82%, 07/07/00 6,000 6,000
St. Joseph College, Indiana Economic
Development RB Series 1997B
4.90%, 07/07/00 3,430 3,430
St. Joseph County, Indiana Educational
Facilities RB (University of Notre
Dame) Series 2000
4.70%, 07/07/00 5,000 5,000
----------
76,980
----------
IOWA -- 0.4%
Iowa Student Loan Liquidity Corp.
Student Loan RB Series 1988B
4.80%, 07/07/00 33,300 33,300
Saint Joseph County, Iowa Economical
Development Authority (Western
Manor)
4.90%, 07/07/00 2,130 2,130
----------
35,430
----------
KANSAS -- 0.4%
Kansas State Development Finance
Authority M/F Housing RB (Bluffs
Olathe Apartments) Series 1998X
5.35%, 07/07/00 9,500 9,500
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Olathe, Kansas IDRB (Garmin
International Inc. Project) Series 1995
5.00%, 07/07/00 $ 1,700 $ 1,700
Wichita, Kansas Airport Facilities
Revenue Refunding Bonds (Cessna
Service Center Project)
5.00%, 07/07/00 4,985 4,985
Wichita, Kansas Airport Facilities
Revenue Refunding Bonds (Flight
Safety International, Inc. Project)
4.90%, 07/07/00 16,170 16,170
----------
32,355
----------
KENTUCKY -- 1.4%
Elizabethtown, Kentucky IDRB (Aztec
Project)
4.95%, 07/07/00 3,000 3,000
Henderson County, Kentucky Solid
Waste Disposal RB (Hudson Foods, Inc.
Project)
4.95%, 07/07/00 14,500 14,500
Jefferson County, Kentucky Sports
Stadium RB (University of Louisville
Athletic Department)
4.85%, 07/07/00 7,500 7,500
Kentucky Higher Education Student
Loan Corp. Insured Student Loan RB
Series 1991E
4.65%, 07/07/00 37,900 37,900
Kentucky Higher Education Student
Loan Corp. Insured Student Loan RB
Series 1996A
4.65%, 07/07/00 23,850 23,850
Lebanon, Kentucky IDRB (Wallace
Computer Services, Inc.)
4.80%, 07/07/00 5,000 5,000
Maysville, Kentucky Industrial Building
RB (Green Tokai Building)
4.95%, 07/07/00 5,740 5,740
Murray, Kentucky IDA Revenue
Refunding Bonds (Dean Foods Co.
Project)
4.90%, 07/07/00 6,000 6,000
Owensboro, Kentucky Limited Obligation
RB (Dart Polymers, Inc. Project)
Series 1985A
4.60%, 07/07/00 1,900 1,900
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Richmond, Kentucky IDRB (Mikron
Project)
5.00%, 07/07/00 $ 8,375 $ 8,375
Wilson County, Kentucky IDB RB
(Perma Pipe Project)
5.05%, 07/07/00 3,150 3,150
----------
116,915
----------
LOUISIANA -- 0.5%
Calcasieu Parish, Lousiana IDB
(Weingarten Realty Project)
4.90%, 07/07/00 1,990 1,990
Lafayette Parish, Louisiana IDRB
(Westwood Village Project)
4.90%, 07/07/00 3,635 3,635
Lake Charles, Louisiana Harbor
Improvement RB (Port Improvement
Global Industries Project)
4.75%, 07/07/00 15,000 15,000
New Orleans, Louisiana Aviation Board
RB Series 1993B
4.80%, 07/07/00 21,935 21,935
----------
42,560
----------
MARYLAND -- 0.5%
Maryland State Economic Development
Corp. IDRB (Dixon Valve Project)
4.90%, 07/07/00 4,000 4,000
Maryland State Health & Higher
Education Facility Authority RB
(Mercey Ridge Project)
4.80%, 07/07/00 25,000 25,000
Maryland State Health & Higher
Education Facility Authority Pooled
Loan Program RB (Kennedy Krieger
Project) Series 1993D
4.75%, 07/07/00 2,000 2,000
Montgomery County, Maryland Housing
Opportunity Commission Housing RB
(Draper Lane Project) Series 1991I
5.05%, 07/07/00 16,600 16,600
----------
47,600
----------
MASSACHUSETTS -- 0.0%
Massachussets Industrial Finance
Authority (Arkansas Electronic
Products Corp. Project)
4.90%, 07/07/00 3,300 3,300
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
MICHIGAN -- 1.0%
Grand Rapids, Michigan Economic
Development Corp. RB (Amway Hotel
Corp. Project) Series 1991A
4.75%, 07/07/00 $ 7,755 $ 7,755
Michigan State Hospital Finance
Authority RB (Martin Luther Memorial
Home Inc. Project)
4.80%, 07/07/00 8,380 8,380
Michigan State Strategic Fund Ltd.
Obligation RB (Advance Plastics Corp.)
4.95%, 07/07/00 1,730 1,730
Michigan State Strategic Fund Ltd.
Obligation RB (American Cancer
Society Great Lakes)
4.95%, 07/07/00 6,000 6,000
Michigan State Strategic Fund Ltd.
Obligation RB (EPI Printers Inc. Project)
4.95%, 07/07/00 3,600 3,600
Michigan State Strategic Fund Ltd.
Obligation RB (John Widdicomb Co.
Project)
4.80%, 07/07/00 1,970 1,970
Michigan State Strategic Fund Ltd.
Obligation RB (Manufacturer's Project)
Series 1991
4.80%, 07/07/00 1,465 1,465
Michigan State Strategic Fund Ltd.
Obligation RB (Mechanics Uniform
Rental Project)
4.95%, 07/07/00 1,000 1,000
Michigan State Strategic Fund Ltd.
Obligation RB (United Machining
Project) Series 1998
4.95%, 07/07/00 6,000 6,000
Michigan State Strategic Fund Ltd.
Obligation RB Series 1998
4.95%, 07/07/00 4,010 4,010
Michigan State Strategic Fund Ltd.
Obligation RB Series 1998B
4.95%, 07/07/00 1,895 1,895
Oakland County, Michigan Economic
Development Corp. (Husky Envelope
Products Inc. Project)
4.95%, 07/07/00 2,500 2,500
</TABLE>
35
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Wayne Charter County, Michigan
Airport RB (Detroit Metropolitan
County Project) Series 1996A
4.90%, 07/07/00 $ 6,100 $ 6,100
Wayne Charter County, Michigan
Airport RB (Detroit Metropolitan
County Project) Series 1996B
4.80%, 07/07/00 34,440 34,440
----------
86,845
----------
MINNESOTA -- 0.5%
Bloomington, Minnesota Port Authority
Special Tax Revenue Refunding Bond
(Mall of America Project) Series 1999B
4.85%, 07/07/00 5,000 5,000
Hennepin County, Minnesota Unlimited
GO Series 1995C
4.80%, 07/07/00 1,000 1,000
Hennepin County, Minnesota Unlimited
GO Series 1996C
4.95%, 07/07/00 4,350 4,350
Mendota Heights, Minnesota IDRB
(Dakota Business Plaza Project)
5.20%, 07/07/00 2,300 2,300
Minnesota Agriculture & Economic
Development RB (Evangelical Lutheran
Project)
4.85%, 07/07/00 7,800 7,800
Minnesota State Higher Education
Facilities Authority RB (Carleton
College) Series 2000G
4.95%, 07/07/00 12,000 12,000
Minnesota State Higher Education
Facilities Authority RB (University of
St. Thomas Project)
4.70%, 07/07/00 8,800 8,800
----------
41,250
----------
MISSISSIPPI -- 0.1%
Mississippi Business Finance Authority
IDRB (Clopay Building Products Co.
Project) Series 1999
4.90%, 07/07/00 3,300 3,300
Mississippi Business Financial Corp.
IDRB (Electric Mills Wood Project)
4.85%, 07/07/00 5,000 5,000
----------
8,300
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
MISSOURI -- 0.2%
Missouri State Development Finance
Board IDRB (H.R. Williams Mill
Supply Project) Series 1995
5.05%, 07/07/00 $ 3,100 $ 3,100
Missouri State Development Finance
Board IDRB (Milbank Manufacturing
Co. Project)
5.15%, 07/07/00 3,000 3,000
Missouri State Health and Educational
Facilities Authority Health Facilities RB
(National Benevolent Association
Project)
4.65%, 07/07/00 2,805 2,805
St. Clair, Missouri IDA RB (Private
Dynaquip)
4.85%, 07/07/00 1,700 1,700
St. Louis, Missouri IDA RB (Kessler
Container Project)
4.85%, 07/07/00 2,500 2,500
Washington, Missouri IDA RB (Pauwels
Transformer Project)
5.20%, 07/07/00 3,500 3,500
----------
16,605
----------
MONTANA -- 0.0%
Clay County, Montana IDRB (KC Salad
Real Estate Project)
4.90%, 07/07/00 2,000 2,000
----------
NEBRASKA -- 0.2%
Dodge County, Nebraska IDRB (Oilgear
Project)
4.85%, 07/07/00 2,230 2,230
Nebraska Higher Education Loan
Program RB (Nebhelp Inc. Student
Loan Project) Series 1988C
4.80%, 07/07/00 4,150 4,150
Stanton County, Nebraska IDRB (Nucor
Corp. Project) Series 1996
5.00%, 07/07/00 10,500 10,500
----------
16,880
----------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
NEVADA -- 0.3%
Clark County, Nevada Airport
Improvement RB Series 1993A
4.70%, 07/07/00 $ 300 $ 300
Clark County, Nevada Airport
Improvement RB (System Subordinate
Lien) Series 1995A2
5.05%, 07/07/00 1,300 1,300
Clark County, Nevada Economic
Development RB (University of Nevada
Las Vegas Project)
4.75%, 07/07/00 1,545 1,545
Nevada Housing Division M/F Housing
RB (Apache Pines Apartments Project)
Series 1999A
4.90%, 07/07/00 7,415 7,415
Nevada Housing Division M/F Housing
RB Series 1989A
4.65%, 07/07/00 5,600 5,600
Nevada Housing Division Multi-Unit
Housing RB (City Center Project)
Series 2000A
5.10%, 07/07/00 9,350 9,350
----------
25,510
----------
NEW HAMPSHIRE -- 0.1%
New Hampshire State HFA M/F Housing
RB (Fairways Project-1)
4.95%, 07/07/00 7,000 7,000
----------
NEW JERSEY -- 0.5%
Essex County, New Jersey Public
Improvement Authority RB (County
Asset Sale Project) Series 1995
4.50%, 07/07/00 500 500
Monmouth County, New Jersey
Improvement Authority Pooled
Government Loan Program
4.50%, 07/07/00 9,700 9,700
New Jersey Economic Development
Authority Natural Gas Facilities RB
(New Jersey Natural Gas Co.)
Series 1998B
4.50%, 07/07/00 500 500
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
New Jersey Economic Development
Authority Natural Gas Facilities RB
(New Jersey Natural Gas Co.)
Series 1998C
4.50%, 07/07/00 $ 2,000 $ 2,000
New Jersey Economic Development
Authority Natural Gas Facilities RB
(Nui Corp. Project)
4.35%, 07/01/00 2,200 2,200
New Jersey Economic Development
Authority RB (Public Service Electric
& Gas Co. Project) Series 1995A
4.60%, 07/07/00 8,200 8,200
New Jersey Economic Development
Authority Revenue Refunding Bonds
(Stolthaven Project) Series 1998A
4.30%, 07/01/00 100 100
New Jersey Economic Development
Authority Thermal Energy Facilities RB
(Thermal Energy Ltd. Partnership I
Project) Series 1997
4.35%, 07/07/00 150 150
New Jersey Health Care Facility Financing
Authority Revenue Refunding Bonds
(Christian Health Project) Series 1998B
4.70%, 07/07/00 500 500
New Jersey Sports & Exposition Authority
RB Series 1992C
4.35%, 07/07/00 225 225
New Jersey State Turnpike Authority RB
Series 1991D
4.20%, 07/07/00 10,500 10,500
Salem County, New Jersey Pollution
Control Financing Authority RB (Public
Service Electric & Gas Project)
Series 1997
4.70%, 07/07/00 6,600 6,600
Union City, New Jersey Industrial
Pollution Control Financing Authority
RB (Exxon Project)
3.60%, 07/01/00 2,000 2,000
----------
43,175
----------
</TABLE>
37
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
NEW MEXICO -- 0.9%
Albuquerque, New Mexico Airport RB
(Subordinated Lien) Series 1996A
4.80%, 07/07/00 $ 16,000 $ 16,000
Belen, New Mexico IDRB (Solo Cup, Inc.
Project)
4.90%, 07/07/00 3,250 3,250
New Mexico State Highway Commission
RB (Subordinate Lein)
4.70%, 07/07/00 39,835 39,835
Santa Fe, New Mexico Gross Receipts
Tax RB (Wastewater Systems)
Series 1997B
4.80%, 07/07/00 17,300 17,300
----------
76,385
----------
NEW YORK -- 0.7%
Albany-Dougherty County, New York
Hospital Authority RB (Phoebe Putney
Memorial Hospital Project) Series 1996
4.85%, 07/07/00 11,000 11,000
Dutchess County, New York IDA Civic
Facilities RB (Trinity Pawling School
Corp. Project)
4.65%, 07/07/00 2,000 2,000
Erie County, New York IDA Life Care
Community RB (Episcopal Church
Home Project) Series 1998B
4.65%, 07/07/00 1,205 1,205
Long Island, New York Power Authority
4.40%, 07/07/00 4,100 4,100
New York City, New York IDA IDRB
(Allway Tools Inc. Project)
4.80%, 07/07/00 1,845 1,845
New York City, New York M/F Rental
Housing RB (Tribeca Tower Project)
Series 1997A
4.45%, 07/07/00 3,000 3,000
New York City, New York Special Facility
RB (Korean Airlines Co. Project)
Series 1997A
4.70%, 07/07/00 4,400 4,400
New York City, New York Transit Cultural
Resource Revenue Refunding Bonds
(American Museum of Natural History)
Series 1993A
4.45%, 07/07/00 2,675 2,675
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
New York City, New York Transitional
Finance Authority RB Series 1998A-1
4.65%, 07/07/00 $ 2,500 $ 2,500
New York State Energy Research &
Development Authority Pollution
Control Revenue Refunding Bonds
(Orange & Rockland Utilities, Inc.
Project) Series 1994A
4.45%, 07/07/00 900 900
New York State HFA RB (101 West End
Avenue Project) Series 1999A
4.70%, 07/07/00 1,200 1,200
New York State HFA RB (Chelsea Arms
Housing Project) Series A
4.45%, 07/07/00 4,000 4,000
New York State HFA RB (Mount Sinai
School Of Medicine) Series A
4.55%, 07/07/00 330 330
New York State HFA RB
4.70%, 07/07/00 2,100 2,100
New York State Local Government
Assistance Corp. RB Series 1995F
4.30%, 07/07/00 700 700
Niagara County, New York IDA IDRB
(Allegheny Ludlum Steel Co. Project)
Series 1984
4.40%, 07/07/00 1,600 1,600
Triborough Bridge & Tunnel Authority,
New York General Purpose RB
Series 1999C
4.25%, 07/07/00 11,800 11,800
Yonkers, New York IDA Civic Facilities RB
(Consumers Union Facility Project)
4.65%, 07/07/00 500 500
----------
55,855
----------
NORTH CAROLINA -- 1.5%
Burke County, North Carolina Industrial
Facilities Pollution Control Financing
Authority Industrial RB (Bauer
Industries Inc. Project)
4.95%, 07/07/00 3,155 3,155
Charlotte, North Carolina Airport
Revenue Refunding Bonds Series 1997A
4.80%, 07/07/00 20,040 20,040
Concord, North Carolina COP (Concord
Project) Series A (a)
4.75%, 07/07/00 8,200 8,200
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Forsyth County, North Carolina
Industrial Facilities & Pollution Control
Financing Authority RB (Plymouth
Printing Project)
4.95%, 07/07/00 $ 2,120 $ 2,120
Gates County, North Carolina Industrial
Facilities & Pollution Control Financing
Authorty Revenue IDRB (Coxe-Lewis
Project)
5.00%, 07/07/00 1,925 1,925
Guilford County, North Carolina
Industrial Facilities & Pollution Control
Financing Authority RB (Camco
Manufacturing Project) Series 1996
4.85%, 07/07/00 1,900 1,900
Guilford County, North Carolina
Industrial Facilities & Pollution Control
Financing Authority RB (Crescent
Sleep Project)
5.05%, 07/07/00 5,900 5,900
Guilford County, North Carolina
Industrial Facilities & Pollution Control
Financing Authority RB (Culp Inc.
Project)
4.85%, 07/07/00 3,825 3,825
Guilford County, North Carolina
Industrial Facilities & Pollution Control
Financing Authority RB (Neal
Manufacturing Project)
4.85%, 07/07/00 2,700 2,700
Guilford County, North Carolina
Industrial Facilities & Pollution Control
Financing Authority RB (Vitafoam Inc.
Project)
4.85%, 07/07/00 5,500 5,500
Johnston County, North Carolina
Industrial Facilites & Pollution Control
Financing Authority RB (Flanders
Corp. Project)
4.90%, 07/07/00 4,500 4,500
North Carolina Educational Facilities
Finance Agency RB (Davidson College)
Series 2000B
4.75%, 07/07/00 19,000 19,000
North Carolina Educational Facilities
Finance Agency RB (Cannon School
Project)
4.75%, 07/07/00 6,500 6,500
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
North Carolina Educational Facilities
Finance Agency RB (High Point
University Project)
4.75%, 07/07/00 $ 5,510 $ 5,510
North Carolina Educational Facilities
Finance Agency RB (Queens College)
Series 1999B
4.75%, 07/07/00 11,270 11,270
North Carolina Medical Care
Community Hospital Health Care
Facilities (Presbyterian Home)
4.75%, 07/07/00 8,500 8,500
Rowan County, North Carolina
Industrial Facilities Pollution Control
Financing Authority (Taylor-Clay
Products Project)
4.85%, 07/07/00 5,000 5,000
Sampson County, North Carolina
Industrial Facilities & Pollution Control
Financing Authority IDRB (Crumpler
Plastic Project)
4.85%, 07/07/00 4,100 4,100
Union County, North Carolina Industrial
Facilities & Pollution Control Financing
Authority RB (Rock-Tenn Converting
County Project) Series 1997
4.90%, 07/07/00 1,750 1,750
Wilmington, North Carolina Housing
Authority M/F Housing RB (Garden
Lake Estates Project) Series 1999
4.90%, 07/07/00 7,280 7,280
----------
128,675
----------
NORTH DAKOTA -- 0.1%
Richland County, North Dakota IDRB
(Minn-Dak Farmers Co-Op Project)
Series 1986B
5.10%, 07/07/00 940 940
Richland County, North Dakota Solid
Waste Disposal RB (Minn-Dak Farmers
Co-Op Project) Series 1996A
5.10%, 07/07/00 10,330 10,330
----------
11,270
----------
</TABLE>
39
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
OHIO -- 0.7%
Cleveland, Ohio Airport System RB
Series 1997D
4.80%, 07/07/00 $ 22,180 $ 22,180
Columbus, Ohio Electric System RB
Series 1984
4.20%, 07/07/00 5,780 5,780
Cuyahoga County, Ohio Economic
Development RB (Hathaway Brown
School Project) Series 1999
4.75%, 07/07/00 14,650 14,650
Ohio Air Quality Development Authority
RB (JMG Funding, LP) Series 1994A
5.00%, 07/07/00 2,900 2,900
Ohio Air Quality Development Authority
RB (Ltd. Partnership Project)
Series 1994B
4.90%, 07/07/00 14,400 14,400
Ohio HFA M/F Housing RB (Kenwood
Congregate Retirement Community
Project) Series 1985
4.30%, 07/07/00 2,000 2,000
----------
61,910
----------
OKLAHOMA -- 1.4%
Creek County, Oklahoma Industrial
Authority IDRB (Henry Vogt Mach
Project) Series 1990
4.95%, 07/07/00 2,000 2,000
Garfield County, Oklahoma IDRB (Bank
of Commerce Group Inc. Project)
4.80%, 07/07/00 7,265 7,265
Muldrow, Oklahoma Public Works
Authority IDRB (Oklahoma Foods
Project)
5.15%, 07/07/00 7,000 7,000
Oklahoma County, Oklahoma Industrial
Authority RB (National Cowboy Hall
of Fame Project) Series 1999
4.75%, 07/07/00 2,380 2,380
Oklahoma Development Finance
Authority RB (Shawnee Funding Ltd.)
4.90%, 07/07/00 4,000 4,000
Oklahoma State Student Loan Authority
RB Series 1996A
4.75%, 07/07/00 31,980 31,980
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Oklahoma State Student Loan Authority
RB Series 1997A
4.80%, 07/07/00 $ 33,000 $ 33,000
Oklahoma State Student Loan Authority
RB Series 1998A
4.80%, 07/07/00 25,100 25,100
Tulsa, Oklahoma IDA RB (Thomas &
Betts Project) Series 1991
4.90%, 07/07/00 700 700
Tulsa, Oklahoma Industrial Authority
Hospital RB (YMCA of Greater Tulsa
Project) Series 1999
4.75%, 07/07/00 2,900 2,900
----------
116,325
----------
OREGON -- 0.7%
Oregon State Economic Development
Authority RB (Kettle Foods Project)
Series 186 (a)
4.85%, 07/07/00 6,450 6,450
Oregon State Economic Development
Authority RB (Pendleton Flour Mills
Project) Series 1982
5.00%, 07/07/00 6,300 6,300
Oregon State Economic Development
Commission Economic & IDRB
4.80%, 07/07/00 4,100 4,100
Oregon State Health, Housing,
Educational, & Cultural Facilities
Authority RB (Quatama Crossing
Housing Project)
4.75%, 07/07/00 2,440 2,440
Port of Portland, Oregon Special
Obligation RB (Portland Bulk
Terminals Limited Liability Corp.
Project)
4.85%, 07/07/00 28,000 28,000
Port of Portland, Oregon Special
Obligation RB (Portland Bulk
Terminals Limited Liability Corp.
Project) Series 1999
4.85%, 07/07/00 6,000 6,000
Portland, Oregon M/F Housing RB
(Village of Lovejoy Fountain)
4.85%, 07/07/00 7,000 7,000
----------
60,290
----------
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
PENNSYLVANIA -- 4.5%
Allegheny County, Pennsylvania IDA RB
4.60%, 07/01/00 $ 100 $ 100
Allegheny County, Pennsylvania IDA RB
(Longwood at Oakmont)
4.60%, 07/01/00 100 100
Allegheny County, Pennsylvania IDA RB
(USX Corp. Project)
4.60%, 07/07/00 11,000 11,000
Bucks County, Pennsylvania IDA
(Klearfold Project)
5.00%, 07/07/00 1,000 1,000
Cambria County, Pennsylvania IDA
Resource Recovery RB (Cambria
Cogen Co. Project) Series 1998A1
4.80%, 07/07/00 52,500 52,500
Cambria County, Pennsylvania IDA
Resource Recovery RB (Cambria Cogen
Co. Project) Series 1998A2
4.80%, 07/07/00 16,390 16,390
Dauphin County, Pennsylvania General
Authority RB (All Health Pooled
Financing Program)
4.85%, 07/07/00 7,250 7,250
Dauphin County, Pennsylvania General
Authority RB (Education & Health
Loan Program) Series 1997
4.85%, 07/07/00 8,930 8,930
Delaware County, Pennsylvania IDA RB
(YMCA of Philadelphia Project)
Series 1999
4.85%, 07/07/00 2,035 2,035
Easton, Pennsylvania City School
District GO
4.85%, 07/07/00 3,900 3,900
Montgomery County, Pennsylvania IDA
RB (Seton Medical Co.)
5.05%, 07/07/00 5,000 5,000
Montgomery County, Pennsylvania
Redevelopment Authority M/F Housing
Revenue Refunding Bonds (Glenmore
Assoc. Project) Series A
4.70%, 07/07/00 350 350
Pennsylvania Energy Development
Authority RB (B&W Ebensburg Project)
Series 1986
4.80%, 07/07/00 28,375 28,375
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988C
4.75%, 07/07/00 $ 4,130 $ 4,130
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1994A
4.75%, 07/07/00 16,900 16,900
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1995A
4.75%, 07/07/00 23,000 23,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1997A
5.10%, 07/07/00 49,300 49,300
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1999A
4.80%, 07/07/00 48,200 48,200
Pennsylvania State Higher Education
Assistance Agency Student Loan RB
Series 2000A
5.10%, 07/07/00 5,000 5,000
Philadelphia, Pennsylvania IDA RB
(30th Street Station Project) Series 1987
4.30%, 07/07/00 15,700 15,700
Philadelphia, Pennsylvania IDA RB
(City Line Holiday Inn Project)
Series 1996
4.70%, 07/07/00 6,700 6,700
Philadelphia, Pennsylvania Water &
Waste RB Series 1997B
4.70%, 07/07/00 12,510 12,510
Quakertown, Pennsylvania General
Authority Pooled Financing Program
Series A
4.75%, 07/07/00 14,257 14,257
Quakertown, Pennsylvania General
Authority Series 1998A
4.75%, 07/07/00 1,400 1,400
Schuylkill County, Pennsylvania IDA
Resource Recovery RB (Gilberton
Power Project) Series 1985
4.75%, 07/07/00 1,550 1,550
</TABLE>
41
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
State Public School Building Authority,
Pennsylvania School RB (Parkland
School Distict) Series 1999D
4.85%, 07/07/00 $ 4,700 $ 4,700
Washington County, Pennsylvania
Authority Lease RB (Girard Estate
Refunding Project) Series 1999
4.85%, 07/07/00 34,040 34,040
Washington County, Pennsylvania
Authority Lease RB Municipal
Facilities Series 1995B-1
4.90%, 07/07/00 7,222 7,222
West Cornwall Township, Pennsylvania
Municipal Authority RB (Lebanon
Valley Crethren)
4.80%, 07/07/00 600 600
----------
382,139
----------
RHODE ISLAND -- 0.6%
Rhode Island State Consolidated Capital
Development Loan Series 1999B
4.55%, 07/07/00 14,000 14,000
Rhode Island State Student Loan
Authority Higher Education Loan RB
Series 1995-1
4.85%, 07/07/00 12,300 12,300
Rhode Island State Student Loan
Authority Higher Education Loan RB
Series 1996-2
4.85%, 07/07/00 10,000 10,000
Rhode Island State Student Loan
Authority Higher Education Loan RB
Series 1996-3
4.85%, 07/07/00 18,000 18,000
----------
54,300
----------
SOUTH CAROLINA -- 0.4%
Dorchester County, South Carolina
Pollution Control Facilities RB (BOC
Group Inc. Project)
4.80%, 07/07/00 3,000 3,000
Greenville, South Carolina County &
City IDRB (Stevens Aviation Technology
Services Project)
4.90%, 07/07/00 3,500 3,500
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
South Carolina Economic Development
Authority Hospital Facility RB (Sanders
Brothers Construction Project)
4.90%, 07/07/00 $ 2,100 $ 2,100
South Carolina Jobs Economic
Development Authority IDRB (Electric
City Printing Project)
4.90%, 07/07/00 2,600 2,600
South Carolina Jobs Economic
Development Authority RB (Brown
Packaging Co. Project)
4.90%, 07/07/00 3,300 3,300
South Carolina Jobs Economic
Development Authority RB (Specialty
Minerals Project)
4.90%, 07/07/00 4,600 4,600
South Carolina Jobs Economic
Development Authority RB (Thomas
& Betts Corp. Project)
4.90%, 07/07/00 3,100 3,100
South Carolina State Housing Finance
& Development Authority M/F Housing
RB (Ashley Apartments Project)
Series 1999
4.90%, 07/07/00 4,300 4,300
Spartanburg County, South Carolina IDA
RB (Bemis, Inc.)
4.80%, 07/07/00 4,750 4,750
----------
31,250
----------
SOUTH DAKOTA -- 0.2%
South Dakota State Health & Educational
Facilities Authority RB (Mckenna
Hospital) Series 1994
4.85%, 07/07/00 15,930 15,930
South Dakota State Health & Educational
Facilities Authority RB (Sioux Valley
Hospital) Series 1992A
4.85%, 07/07/00 4,900 4,900
----------
20,830
----------
TENNESSEE -- 2.0%
Chattanooga, Tennesse IDRB (National
Print Group Inc. Project)
4.95%, 07/07/00 2,300 2,300
Chattanooga, Tennessee Health Education
& Housing Facility Board RB (Baylor
School Project)
4.80%, 07/07/00 2,135 2,135
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Franklin County, Tennessee IDRB
(Hi-Tech Project) Series 1997
4.95%, 07/07/00 $ 6,000 $ 6,000
Huntingdon, Tennessee Industrial
Development Board IDRB (Associated
Rubber Co. Project) Series 1999
4.90%, 07/07/00 2,500 2,500
Jackson County, Tennessee IDRB Solid
Waste Facilities (Ameristeel Corp.
Project)
4.85%, 07/07/00 3,800 3,800
McMinn County, Tennessee Industrial
Development Board Solid Waste
Disposal RB (Bowater, Inc. Project)
4.90%, 07/07/00 13,500 13,500
Metropolitan Nashville & Davidson
County, Tennessee IDRB (Bind
Technologies Inc.)
4.85%, 07/07/00 3,650 3,650
Metropolitan Nashville & Davidson
County, Tennessee M/F Housing IDRB
(Arbor Crest) Series 1985B
4.80%, 07/07/00 7,550 7,550
Metropolitan Nashville & Davidson
County, Tennessee M/F Housing IDRB
(Arbor Knoll) Series 1985A
4.80%, 07/07/00 1,000 1,000
Montgomery County, Tennessee Public
Building Authority Pooled Financing RB
(Tennessee County Loan Poll)
4.75%, 07/07/00 6,975 6,975
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1995C1
4.80%, 07/07/00 5,300 5,300
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1995C3
4.80%, 07/07/00 10,000 10,000
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1995E3
4.80%, 07/07/00 2,635 2,635
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1996A
4.80%, 07/07/00 7,000 7,000
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1996D1
4.80%, 07/07/00 $ 2,755 $ 2,755
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1996E1
4.80%, 07/07/00 5,800 5,800
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1996E4
4.80%, 07/07/00 3,000 3,000
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1996F1
4.80%, 07/07/00 9,000 9,000
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1996F2
4.80%, 07/07/00 8,135 8,135
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1996G
4.80%, 07/07/00 6,290 6,290
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series 1997I-A1
4.80%, 07/07/00 10,000 10,000
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series II-C
4.80%, 07/07/00 985 985
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series III -C1
4.80%, 07/07/00 10,815 10,815
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series III-B1
4.90%, 07/07/00 10,000 10,000
Sevier County, Tennessee Public Building
Authority Local Government Public
Improvement Bonds Series IV-A1
4.70%, 07/01/00 3,000 3,000
Shelby County, Tennessee Health,
Education, & Housing Facilities Board
Educational Facilities RB (Rhodes College)
4.75%, 07/07/00 15,465 15,465
</TABLE>
43
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Sumner County, Tennessee Health,
Education, & Housing Facilities Board
RB (Hospital Alliance Pooled Program)
Series 1999A
4.90%, 07/07/00 $ 15,000 $ 15,000
----------
174,590
----------
TEXAS -- 6.7%
Amarillo, Texas Health Facilities Corp.
Hospital RB (High Plains Baptist
Hospital) Series 1985
5.00%, 07/07/00 3,000 3,000
Amarillo, Texas Health Facilities Corp.
Revenue Refunding Bonds
4.85%, 07/07/00 3,155 3,155
Bexar County, Texas Health Facilities
Development Corp. RB (Chandler
Memorial Home Project) Series 1995
4.80%, 07/07/00 4,605 4,605
Brazos River, Texas Higher Education
Authority RB Series 1993B1
4.80%, 07/07/00 34,500 34,500
Brownsville County, Texas Industrial
Development Corp. Revenue Refunding
Bonds (Rich Seapak Corp. Project)
4.90%, 07/07/00 3,750 3,750
Central Waco, Texas Development Corp.
IDRB (H.E. Butt Grocery Project)
4.70%, 07/07/00 2,400 2,400
Collin County, Texas HFA M/F Housing
RB (Huntington Apartments Project)
4.92%, 07/07/00 6,150 6,150
Euless, Texas IDA RB (Ferguson
Enterprises, Inc. Project)
4.80%, 07/07/00 4,950 4,950
Grand Prairie, Texas IDA IDRB (NTA
Leasing Co. Project) Series 1994
4.85%, 07/07/00 1,840 1,840
Gulf Coast, Texas IDA RB (Gruma Corp.
Project)
4.80%, 07/07/00 6,440 6,440
Hays, Texas Memorial Health Facilities
Development Corp. Hospital RB
(AHS Sunbelt Central Texas Medical
Center Project) Series 1990A
4.80%, 07/07/00 7,900 7,900
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Lavaca-Navidad River Authority, Texas
Water Supply System Contract RB
(Formosa Plastics Corp. Project) (a)
4.95%, 07/07/00 $ 13,600 $ 13,600
Lubbock, Texas Educational Facilities
Authority RB (Lubbock Christian
University Project)
4.80%, 07/07/00 6,600 6,600
Mansfield, Texas Industrial Development
Corp. RB (Southern Champion Tray
Project) Series 1999
4.90%, 07/07/00 3,400 3,400
North Texas Higher Education Authority
Income Tax Student Loan Revenue
Refunding Bonds (Texas Student Loan
Project)
4.65%, 07/07/00 9,000 9,000
North Texas Higher Education Authority
Income Tax Student Loan Revenue
Refunding Bonds Series 1987A
4.80%, 07/07/00 87,750 87,750
North Texas Higher Education Authority
Income Tax Student Loan Revenue
Refunding Bonds Series 1996A
4.70%, 07/07/00 7,400 7,400
North Texas Higher Education Authority
Income Tax Student Loan Revenue
Refunding Bonds Series 1996B
4.70%, 07/07/00 4,000 4,000
North Texas Higher Education Authority
Income Tax Student Loan Revenue
Refunding Bonds Series 1996D
4.70%, 07/07/00 4,000 4,000
North Texas Higher Education Authority,
Inc. Student Loan RB Series 1996C
4.70%, 07/07/00 3,500 3,500
North Texas Higher Education Authority,
Inc. Student Loan RB Series 2000A
4.65%, 07/07/00 43,000 43,000
Panhandle Plains, Texas Higher
Education Authority Student Loan RB
Series 1991A
4.80%, 07/07/00 23,000 23,000
Panhandle Plains, Texas Higher
Education Authority Student Loan RB
Series 1992A
4.80%, 07/07/00 15,500 15,500
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Panhandle Plains, Texas Higher
Education Authority Student Loan RB
Series 1992A1
4.80%, 07/07/00 $ 2,400 $ 2,400
Panhandle Plains, Texas Higher
Education Authority Student Loan RB
Series 1993A
4.80%, 07/07/00 13,300 13,300
Panhandle Plains, Texas Higher
Education Authority Student Loan RB
Series 1995A
4.80%, 07/07/00 18,300 18,300
Panhandle Plains, Texas Higher
Education Authority Student Loan RB
Series 1997X
4.80%, 07/07/00 18,300 18,300
Robertson County, Texas Industrial
Development Corp. IDRB (Sanderson
Farms Project) Series 1995
4.90%, 07/07/00 3,700 3,700
San Antonio, Texas IDA IDRB (Gruma
Corp. Project)
4.80%, 07/07/00 4,095 4,095
South Texas Higher Education Authority
Student Loan RB
4.80%, 07/07/00 120,200 120,200
South Texas Higher Education Authority
Student Loan RB Series 1997Z
4.80%, 07/07/00 7,000 7,000
Tarrant County, Texas IDRB (Mortex
Products Inc. Project)
5.05%, 07/07/00 4,000 4,000
Texas Capital Health Facilities
Development Corp. RB (Island On Lake
Travis Ltd. Project)
4.80%, 07/07/00 8,500 8,500
Texas Municipal Gas Corp. Gas Reserve
RB Weekly Senior Lien
4.70%, 07/07/00 65,935 65,935
Texas State Department of Housing &
Community Affairs M/F Housing RB
(Creek Point Apartments Project)
4.95%, 07/07/00 7,200 7,200
Trinity River Authority, Texas Pollution
Control RB (Lafarge Corp. Project)
4.90%, 07/07/00 5,100 5,100
----------
577,470
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
UTAH -- 1.8%
Utah State Board of Regents Student
Loan RB Series 1993A
4.65%, 07/07/00 $ 26,850 $ 26,850
Utah State Board of Regents Student
Loan RB Series 1995L
4.70%, 07/07/00 13,750 13,750
Utah State Board of Regents Student
Loan RB Series 1996Q
4.70%, 07/07/00 49,700 49,700
Utah State Board of Regents Student
Loan RB Series 1997R
4.70%, 07/07/00 50,355 50,355
Utah State GO Series 1999C
4.55%, 07/07/00 4,100 4,100
Utah State GO Series 1999D
4.55%, 07/07/00 6,000 6,000
Woods Cross City, Utah M/F RB
(Spring Wood Apartments)
4.80%, 07/07/00 3,605 3,605
----------
154,360
----------
VERMONT -- 0.2%
Vermont Economic Development
Authority IDRB (AGRI Mark, Inc.
Project) Series 1999A
4.95%, 07/07/00 17,000 17,000
Vermont Economic Development
Authority IDRB (AGRI Mark, Inc.
Project) Series 1999B
4.95%, 07/07/00 1,000 1,000
----------
18,000
----------
VIRGINIA -- 0.2%
King George County, Virgina IDA Solid
Waste Disposal Facility (Garnet of
Virginia Project) Series 1996
4.85%, 07/07/00 3,700 3,700
Loudoun County, Virginia IDRB
(Electronic Instrumentation Project)
4.90%, 07/07/00 2,560 2,560
Portsmouth, Virginia Redevelopment &
Housing Authority M/F Housing RB
(Churchland North Apartments Project)
4.90%, 07/07/00 1,500 1,500
</TABLE>
45
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Staunton, Virginia IDRB (Diebold Inc.-
Staunton Project) Series 1997
4.85%, 07/07/00 $ 2,835 $ 2,835
Virginia Beach, Virginia Development
Authority M/F Housing RB (Silver Hill
at Thalia LLC Project) Series 1999
4.90%, 07/07/00 4,400 4,400
----------
14,995
----------
WASHINGTON -- 2.3%
Algona, Washington Economic
Development Corp. IDRB (Aitchison
Family Partnership Project)
4.80%, 07/07/00 2,590 2,590
Douglas County, Washington Water
Economic Development RB
4.90%, 07/07/00 6,500 6,500
Everett, Washington IDA RB Series 1996
(Partners Trust/Synsor Project)
5.00%, 07/07/00 4,300 4,300
King County, Washington Economic
Enterprise Corp. RB (Sunrise Project)
Series 1997
5.00%, 07/07/00 3,800 3,800
King County, Washington HFA M/F
Housing RB (Auburn County
Apartments)
4.90%, 07/07/00 8,365 8,365
Olympia, Washington EDA (Solid Waste
Lemay Enterprises Project)
4.95%, 07/07/00 8,160 8,160
Pierce County, Washington Economic
Development Corp. RB (Flex-A-Lite
Consolidated Project)
5.00%, 07/07/00 3,000 3,000
Pierce County, Washington Economic
Development Corp. RB (K & M
Holdings II Project) Series 1997
5.05%, 07/07/00 1,605 1,605
Pierce County, Washington Economic
Development Corp. RB (McFarland
Cascade Project)
4.90%, 07/07/00 2,000 2,000
Pierce County, Washington Economic
Development Corp. RB (Solid Waste
Lemay Enterprises Project)
4.95%, 07/07/00 3,500 3,500
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Pilchuck, Washington Water
Development Corp. IDRB (Romac
Industrial Inc. Project)
5.35%, 07/07/00 $ 6,850 $ 6,850
Port Benton, Washington Economic
Development Corp. Solid Waste RB
(ATG, Inc. Project)
4.95%, 07/07/00 23,500 23,500
Port Centralia, Washington IDB (Solid
Waste Lemay Enterprises Project)
4.95%, 07/07/00 2,200 2,200
Port Moses Lake, Washington Public
Corp. RB (Moses Lake Industrial
Project) Series 1995
5.00%, 07/07/00 3,000 3,000
Port Moses Lake, Washington Public
Corp. RB (National Frozen Foods Corp.)
4.95%, 07/07/00 6,100 6,100
Port Townsend, Washington IDRB
(Port Townsend Paper Corp.)
4.85%, 07/07/00 1,500 1,500
Port Townsend, Washington IDRB
(Port Townsend Paper Corp.)
Series 1988B
4.85%, 07/07/00 1,000 1,000
Seattle, Washington HDA RB (Capitol
Hill Housing Improvement & HRG
Project)
5.00%, 07/07/00 4,655 4,655
Seattle, Washington HDA RB (Casa
Pacifica Apartments Project) Series 1997
5.00%, 07/07/00 3,150 3,150
Seattle, Washington HDA RB (Holly Park
Project)
5.00%, 07/07/00 18,500 18,500
Spokane County, Washington Industrial
Development Corp. (Metal Sales
Manufacturing Corp. Project)
4.95%, 07/07/00 2,205 2,205
Tacoma, Washington Housing Authority
RB (Crown Assisted Living Project)
4.90%, 07/07/00 3,400 3,400
Washington County, Nebraska IDRB
(Cargill Dow Polymers LLC)
4.60%, 07/01/00 2,000 2,000
Washington Health Care Facilities
Authority RB (Yakima Valley Farm
Workers Clinic) Series 1997
4.95%, 07/07/00 3,600 3,600
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Washington State Economic
Development Finance Authority
(Skills Inc. Project)
4.90%, 07/07/00 $ 3,350 $ 3,350
Washington State Economic
Development Finance Authority ACES
(Tank Project) Series 1998B
4.90%, 07/07/00 1,400 1,400
Washington State Economic
Development Finance Authority IDRB
(Tonkin Building) Series 1997A
4.90%, 07/07/00 1,000 1,000
Washington State Economic
Development Finance Authority RB
(Hamilton Materials Project)
4.90%, 07/07/00 4,600 4,600
Washington State Economic
Development Finance Authority RB
(Hunter Douglas Project)
Series 1997A (a)
4.90%, 07/07/00 3,500 3,500
Washington State HFA M/F Housing
Mortgage RB (Brittany Park Phase 3
Project)
4.90%, 07/07/00 3,480 3,480
Washington State HFA M/F Housing
Mortgage RB (Canyon Lake II)
Series 1993A
4.85%, 07/07/00 4,565 4,565
Washington State HFA M/F Housing
Mortgage RB (Lake Washington
Apartments Project) Series 1996
5.00%, 07/07/00 8,650 8,650
Washington State HFA M/F Housing
Mortgage RB (Meridian Court
Apartments) Series 1996
5.00%, 07/07/00 6,800 6,800
Washington State HFA M/F Housing
Mortgage RB (Merrill Gardens Project)
Series 1997A
4.85%, 07/07/00 2,600 2,600
Washington State HFA M/F Housing
Mortgage RB (Rosecreek Apartments
Project)
4.85%, 07/07/00 3,570 3,570
Washington State HFA M/F Housing
Mortgage RB (Woodrose Apartment
Project) Series 1999A
4.80%, 07/07/00 6,750 6,750
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Yakama Indian Nation, Washington
Confederated Tribes & Bands
(Yakama Forests Products Project)
5.00%, 07/07/00 $ 7,800 $ 7,800
Yakima County, Washington Public
Corp. IDRB (Cowiche Growers Project)
4.90%, 07/07/00 3,600 3,600
Yakima County, Washington Public
Corp. RB (Hi-Country Foods Project)
5.00%, 07/07/00 7,000 7,000
Yakima County, Washington Public
Corp. RB (Michaelson Packaging
Project)
5.00%, 07/07/00 3,400 3,400
Yakima County, Washington Public
Corp. RB (Printing Press Project)
5.00%, 07/07/00 2,000 2,000
----------
199,545
----------
WEST VIRGINIA -- 0.4%
Fayette County, West Virgina Solid Waste
Disposal Facilities RB (Georgia-Pacific
Corp. Project) Series 1995
4.90%, 07/07/00 11,100 11,100
Marion County, West Virginia Solid
Waste Disposal Facilities RB (Grant
Town Project) Series 1990B
4.70%, 07/07/00 13,725 13,725
Marion County, West Virginia Solid
Waste Disposal Facilities RB (Grant
Town Project) Series 1990D
4.70%, 07/07/00 4,100 4,100
West Virginia State Hospital Finance
Authority RB (St. Joseph's Hospital
Project) Series 1987
4.80%, 07/07/00 1,800 1,800
----------
30,725
----------
WISCONSIN -- 0.6%
Carlton, Wisconsin Pollution Control RB
(Wisconsin Power & Light Co. Project)
5.00%, 07/07/00 5,800 5,800
Chilton, Wisconsin IDRB (Kaytee
Products, Inc. Project) Series 1995
4.95%, 07/07/00 1,105 1,105
Colburn, Wisconsin IDRB (Heartland
Farms Project) Series 1994
4.85%, 07/07/00 6,900 6,900
</TABLE>
47
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Grafton, Wisconsin IDRB (Milwaukee
Sign Co. Project)
4.85%, 07/07/00 $ 780 $ 780
Kenosha, Wisconsin IDRB (Asyst Tech.
Ltd. Liability Corp. Project)
4.82%, 07/07/00 5,000 5,000
Lac Du Flambeau, Band of Lake
Superior, Wisconsin Chippewa Indians
Special Obligation Bonds (Simpson
Electric Co. Project) Series 1985
4.90%, 07/07/00 3,800 3,800
Rapids City, Wisconsin IDRB (Theile
Kaolin of Wisconsin, Inc. Project)
Series 1998
4.90%, 07/07/00 2,250 2,250
Rhinelander, Wisconsin IDRB (Lake
Shore Inc. Project)
4.85%, 07/07/00 3,820 3,820
Wisconsin Housing & Economic
Development Authority RB (Ultratec
Inc. Project) Series 7
4.85%, 07/07/00 3,440 3,440
Wisconsin State Health & Education
Facilities Authority RB (Sinai Samaritan)
Series 1994A
4.82%, 07/07/00 16,446 16,446
----------
49,341
----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $5,043,607) 5,043,607
----------
VARIABLE RATE TENDER OPTION BONDS -- 11.7% (a)(b)(f)
ALASKA -- 0.2%
Alaska State Housing Finance Corp. TOB
Series 1999D
4.89%, 07/07/00 21,805 21,805
----------
COLORADO -- 0.2%
Colorado HFA S/F Mortgage TOB
Series 1999M
4.92%, 07/07/00 9,670 9,670
Lower Colorado River Authority TOB
4.87%, 07/07/00 6,000 6,000
----------
15,670
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
DELAWARE -- 0.0%
Delaware State GO Refunding Bond
TOB Series 258
4.87%, 07/07/00 $ 3,995 $ 3,995
----------
FLORIDA -- 0.3%
Florida State Board of Education Capital
Outlay (Putters) TOB Series 137
4.85%, 07/07/00 6,795 6,795
Florida State Board of Finance
Department General Services RB TOB
Series 317
4.87%, 07/07/00 12,160 12,160
Jacksonville, Florida Electric Authority
RB TOB Series 2000FF
4.89%, 07/07/00 8,300 8,300
----------
27,255
----------
GEORGIA -- 0.4%
Atlanta, Georgia Airport RB TOB (PA-677)
4.85%, 07/07/00 13,730 13,730
Georgia State Eagle -981003 GO TOB
4.87%, 07/07/00 20,245 20,245
----------
33,975
----------
HAWAII -- 0.2%
Hawaii State Housing Finance &
Development Corp. TOB
4.76%, 07/07/00 13,565 13,565
----------
ILLINOIS -- 1.3%
Chicago, Illinois Midway Airport RB TOB
4.87%, 07/07/00 24,480 24,480
Chicago, Illinois S/F Mortgage RB
Series 1999N TOB
4.92%, 07/07/00 9,995 9,995
Illinois Educational Facilities TOB
4.89%, 07/07/00 2,000 2,000
Illinois Metropolitan Pier and Expo
Authority Mccormick Place TOB
4.87%, 07/07/00 14,355 14,355
Illinois Regional Transportation
Authority GO TOB
4.87%, 07/07/00 23,730 23,730
Illinois State GO TOB
4.72%, 07/07/00 14,000 14,000
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Illinois State GO TOB Series 257
4.87%, 07/07/00 $ 4,000 $ 4,000
Illinois Various Counties GO TOB
4.87%, 07/07/00 12,055 12,055
University of Illinois Revenue TOB
Merlot Series 2000S
4.89%, 07/07/00 3,500 3,500
----------
108,115
----------
INDIANA -- 0.1%
Indiana State Housing TOB Series 1999A
4.92%, 07/07/00 9,995 9,995
----------
KANSAS -- 0.4%
Kansas Department of Transportation
Highway RB TOB Series 1999
4.87%, 07/07/00 37,500 37,500
----------
KENTUCKY -- 0.4%
Kentucky Housing Corporate Housing
Revenue TOB Merlot Series 2000U
4.94%, 07/07/00 9,685 9,685
Kentucky Housing Corporate Housing
Revenue TOB Series 1998W
4.76%, 07/07/00 19,320 19,320
Louisville & Jefferson Counties, Kentucky
Metro Sewer District TOB Series A
4.87%, 07/07/00 6,115 6,115
----------
35,120
----------
MARYLAND -- 0.5%
Maryland State Community Housing
Development Administration
Department S/F Mortgage Revenue
TOB (PA-634)
4.90%, 07/07/00 9,250 9,250
Maryland State Community Housing
Development Administration
Department TOB Series 1999G
4.88%, 07/07/00 32,335 32,335
----------
41,585
----------
MASSACHUSETTS -- 0.2%
Massachusetts State Water Pollution
Abatement Trust Water Pollution TOB
Series 1999N
4.84%, 07/07/00 16,500 16,500
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
MICHIGAN -- 0.2%
Detroit, Michigan Water Supply TOB
4.87%, 07/07/00 $ 10,680 $ 10,680
Michigan State Building Authority
Special Sinking Fund Revenue
Refunding Bond TOB
4.87%, 07/07/00 3,260 3,260
----------
13,940
----------
MINNESOTA -- 0.1%
Rochester, Minnesota Health Care
Facilities RB TOB Series 177
4.87%, 07/07/00 7,130 7,130
----------
MISSISSIPPI -- 0.1%
Mississippi S/F HFA TOB Series 1997G
4.92%, 07/07/00 12,330 12,330
----------
NEBRASKA -- 0.0%
Nebraska Investment Finance Authority
S/F Housing Revenue Merlot TOB
Series 2000O
4.94%, 07/07/00 3,900 3,900
----------
NEVADA -- 0.2%
Clark County, Nevada School District
TOB Series 2000-5
4.87%, 07/07/00 19,935 19,935
----------
NEW HAMPSHIRE -- 0.3%
New Hampshire State HFA S/F Revenue
TOB Series 1998G
4.92%, 07/07/00 12,045 12,045
New Hampshire State HFA S/F Revenue
TOB Series 1998U
4.82%, 07/07/00 9,995 9,995
----------
22,040
----------
NEW JERSEY -- 0.3%
New Jersey Health Care TOBP (PA-504)
Series 1998B
4.62%, 07/07/00 8,075 8,075
New Jersey State Housing and Mortgage
Financing Agency TOBP (PT-287)
5.00%, 07/07/00 5,090 5,090
New Jersey State Transportation Trust
Fund Authority TOB Series 2000C
4.67%, 07/07/00 1,095 1,095
</TABLE>
49
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
New Jersey State Transportation Trust
Fund Authority TOB Series 204
4.62%, 07/07/00 $ 2,000 $ 2,000
Port Authority of New York &
New Jersey TOB Series 2000Z
4.84%, 07/07/00 5,100 5,100
----------
21,360
----------
NEW YORK -- 1.3%
Long Island Power Authority, New York
Electric System RB TOBP (PA-565)
4.85%, 07/07/00 15,000 15,000
Long Island Power Authority, New York
Electric System RB TOB Series 1998A
4.84%, 07/07/00 12,870 12,870
New York City, New York GO TOB
(First Union Merlot Program)
Series 1997C
4.84%, 07/07/00 17,825 17,825
New York City, New York Municipal
Assistance Corp. TOB
4.82%, 07/07/00 11,000 11,000
New York City, New York Municipal
Water Finance Authority Water &
Sewer Systems RB TOB Series 158
4.82%, 07/07/00 9,995 9,995
New York City, New York Transitional
Finance Authority Future Tax Secured
TOB Series 1999B
4.84%, 07/07/00 14,870 14,870
New York State Dormitory Authority RB
(Montefiore Medical Center Project)
TOB Series 156
4.82%, 07/07/00 1,530 1,530
New York State Mortgage Agency
Macon RB TOB Series 1999H
4.82%, 07/07/00 14,995 14,995
Port Authority of New York & New Jersey
Special Obligation RB TOP Series
4.77%, 07/07/00 16,530 16,530
----------
114,615
----------
NORTH CAROLINA -- 0.1%
North Carolina Municipal Power Agency
#1 RB (Catawba Electric) TOB
Series 1999Q
4.89%, 07/07/00 2,875 2,875
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
North Carolina State Public School
Building TOBP Series 249
4.87%, 07/07/00 $ 2,500 $ 2,500
----------
5,375
----------
OHIO -- 0.1%
Ohio Housing Finance Agency Mortgage
RB TOB Series 2000AA
4.94%, 07/07/00 6,000 6,000
----------
OREGON -- 0.0%
Oregon State Housing Community
Service Department Mortgage Revenue
TOBP Series 298
4.87%, 07/07/00 1,750 1,750
----------
PENNSYLVANIA -- 0.6%
Delaware River Port Authority of
Pennsylvania & New Jersey RB TOBP
(PA-611)
4.62%, 07/07/00 1,095 1,095
Pennsylvania State GO TOB Series 2000-3
4.87%, 07/07/00 500 500
Pennsylvania HFA S/F Mortgage RB
TOBP (PT-119A) Series 1997
4.79%, 07/07/00 11,495 11,495
Pennsylvania HFA S/F Mortgage RB
TOBP (PT-278) Series 1999-66A
4.85%, 07/07/00 14,060 14,060
Pennsylvania HFA TOB Series 1999U
4.90%, 07/07/00 20,505 20,505
----------
47,655
----------
PUERTO RICO -- 0.0%
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue
TOBP (PA-605)
4.42%, 07/07/00 2,410 2,410
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue
TOBP (PT-183)
4.42%, 07/07/00 400 400
----------
2,810
----------
SOUTH CAROLINA -- 0.1%
Piedmont, South Carolina Municipal
Power Agency Electric Revenue TOB
(PT-1232)
4.85%, 07/07/00 10,690 10,690
----------
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
TEXAS -- 1.5%
Austin, Texas Independant School
District TOB
4.87%, 07/07/00 $ 5,700 $ 5,700
Dallas Fort Worth, Texas International
Airport RB TOBP (PA-678)
4.90%, 07/07/00 7,045 7,045
El Paso, Texas Water & Sewer Revenue
TOB Series 1999
4.92%, 07/07/00 14,060 14,060
Harris County, Texas Health Facility
Development Corp. TOB
4.87%, 07/07/00 14,850 14,850
Houston Public Improvement Revenue
Refunding Bonds TOB Series 1998A
4.87%, 07/07/00 21,655 21,655
Southeast Texas Housing Finance Corp.
TOBP (PT-193)
4.90%, 07/07/00 12,945 12,945
Texas A&M Board of Regents
Permanent University Fund Eagle TOB
4.87%, 07/07/00 28,445 28,445
Texas Department of Housing &
Community Affairs Residential
Meeting RB TOB Series 1999C
4.92%, 07/07/00 14,995 14,995
Texas State Public Finance Authority GO
Refunding TOBP Series 290
4.87%, 07/07/00 4,200 4,200
----------
123,895
----------
UTAH -- 0.6%
Intermountain Power Agency, Utah
Power Supply TOB Series 1997B
4.87%, 07/07/00 10,995 10,995
Utah State Building Ownership
Authority Lease Revenue Refunding
Bonds TOB Series 1998C
4.87%, 07/07/00 9,695 9,695
Utah State Facilities System Revenue
Refunding Bonds TOB Series 1998A
4.87%, 07/07/00 30,060 30,060
----------
50,750
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
VIRGINIA -- 0.1%
Virginia State Housing Development
Authority Commonwealth Mortgage
Bonds TOB Series 2000CC
4.94%, 07/07/00 $ 8,200 $ 8,200
----------
WASHINGTON -- 1.1%
King County, Washington TOB
Series 215
4.87%, 07/07/00 14,995 14,995
Port of Seattle, Washington Limited
Tax GO TOB Series 235
4.97%, 07/07/00 6,425 6,425
Port of Seattle, Washington Special
Facilities RB TOB Series 1999J
4.94%, 07/07/00 49,795 49,795
Washington State GO TOB
4.87%, 07/07/00 13,380 13,380
Washington State GO TOB
Series 2000S-4
4.87%, 07/07/00 8,000 8,000
----------
92,595
----------
WISCONSIN -- 0.6%
Southeast Wisconsin Professional
Baseball Park District Sales Tax RB TOB
Series 2000Y
4.89%, 07/07/00 5,000 5,000
Wisconsin Housing & Economic
Development Authority Home
Ownership RB TOB Series 1999R
4.89%, 07/07/00 19,665 19,665
Wisconsin Housing & Economic
Development Authority Home
Ownership RB TOB Series 1999S
4.94%, 07/07/00 13,240 13,240
Wisconsin Housing & Economic
Development Authority Home
Ownership TOBP (PT-194)
4.90%, 07/07/00 14,795 14,795
----------
52,700
----------
</TABLE>
51
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
WYOMING -- 0.2%
Wyoming Community Development
Authority Housing RB TOB
4.90%, 07/07/00 $ 15,260 $ 15,260
----------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $998,010) 998,010
----------
TAX-EXEMPT COMMERCIAL PAPER -- 7.8% (c)
ARIZONA -- 0.5%
Maricopa County, Arizona Pollution
Control Authority Revenue Refunding
Bonds TECP (Southern California
Edison Palo Alto Verde Project)
Series 1985G
3.85%, 07/06/00 2,500 2,500
4.75%, 07/13/00 2,900 2,900
4.60%, 08/07/00 16,900 16,900
4.30%, 10/05/00 8,800 8,800
Salt River Project, Arizona Argicultural
Improvement Program TECP
4.00%, 07/07/00 11,615 11,615
----------
42,715
----------
FLORIDA -- 0.8%
Florida Local Government Finance
Commission Pooled TECP Series A
4.65%, 09/06/00 5,263 5,263
Hillsborough County, Florida Capital
Improvement TECP (f)
4.25%, 07/24/00 9,297 9,297
4.25%, 10/04/00 12,168 12,168
Orange County, Florida TECP (f)
4.70%, 08/07/00 14,077 14,077
Sunshine State of Florida Governmental
Finance CommitteeTECP
4.07%, 07/10/00 29,000 29,000
----------
69,805
----------
KENTUCKY -- 0.2%
Kentucky Higher Educational Student
Loan RB TECP
4.50%, 08/07/00 20,280 20,280
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
LOUISIANA -- 1.2%
Louisiana Adjustable Tender GO TECP (f)
4.35%, 08/08/00 $ 8,800 $ 8,800
4.25%, 09/07/00 9,980 9,980
Louisiana State Pollution Control
Revenue Refunding Bonds TECP
(St. James Parish Texaco Project)
Series 1988B
4.25%, 10/17/00 80,530 80,530
----------
99,310
----------
MICHIGAN -- 1.4% (f)
Michigan State Building Authority TECP
Notes Series 2
4.75%, 07/13/00 119,165 119,165
----------
MINNESOTA -- 0.9%
Rochester, Minnesota Health Care
Facilities RB TECP (Mayo Foundation
Mayo Clinic Project) Series 1992
4.35%, 08/08/00 3,000 3,000
Rochester, Minnesota Health Care
Facilities RB TECP (Mayo Foundation
Mayo Clinic Project) Series 2000A
4.60%, 08/07/00 25,600 25,600
4.20%, 10/05/00 42,600 42,600
Rochester, Minnesota Health Care
Facilities RB TECP (Mayo Foundation
Mayo Clinic Project) Series 2000B
4.30%, 10/05/00 9,000 9,000
----------
80,200
----------
NEVADA -- 0.5% (f)
Las Vegas Valley, Nevada Water District
GO TECP Notes Series A
4.30%, 10/05/00 40,000 40,000
----------
NEW YORK -- 0.4% (f)
Port Authority of New York & New Jersey
TECP
3.95%, 07/13/00 30,900 30,900
----------
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
OKLAHOMA -- 0.2% (f)
Oklahoma City, Oklahoma Industrial
Cultural Facilities Trust Health Care
TECP Series 1998B
4.25%, 10/05/00 $ 17,000 $ 17,000
----------
PENNSYLVANIA -- 0.9%
Carbon County, Pennsylvania IDA RB
TECP (f)
4.45%, 07/13/00 10,745 10,745
Montgomery County, Pennsylvania IDA
RB Pollution Control Revenue
Refunding Bond TECP (f)
3.85%, 07/06/00 2,000 2,000
4.35%, 08/21/00 53,460 53,460
Philadelphia, Pennsylvania Gas TECP
4.30%, 10/04/00 12,000 12,000
----------
78,205
----------
TENNESSEE -- 0.6%
Tennessee State GO TECP
4.00%, 07/18/00 8,000 8,000
4.40%, 07/31/00 15,000 15,000
4.05%, 08/16/00 26,300 26,300
----------
49,300
----------
TEXAS -- 0.2% (f)
Houston, Texas Water & Sewer TECP
4.35%, 08/08/00 1,000 1,000
Houston, Texas Water & Sewer TECP
Series A
4.35%, 08/08/00 20,000 20,000
----------
21,000
----------
TOTAL TAX-EXEMPT COMMERCIAL PAPER
(Cost $667,880) 667,880
----------
REVENUE BONDS -- 6.0% (c)
ARIZONA -- 0.1%
Arizona State Agriculture Improvement
Power District Electric Systems Revenue
Refunding Bonds (Salt River Project)
Series 1997A
4.30%, 01/01/01 5,000 5,029
Phoenix, Arizona Civic Improvement
Corp. Business Acquisition Special RB (f)
4.07%, 07/01/00 1,380 1,380
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Pima County, Arizona Street &
Highway RB (f)
4.00%, 07/01/00 $ 2,500 $ 2,500
----------
8,909
----------
CALIFORNIA -- 1.0% (f)
California Higher Education Loan
Authority Student Loan Revenue
Refunding Bonds Series 1987C-1
3.55%, 07/01/00 50,000 50,000
California School Cash Reserve Program
Authority RB Series 2000A (d)
4.27%, 07/03/01 39,000 39,366
----------
89,366
----------
COLORADO -- 0.2% (f)
Northern Colorado Municipal
Sub-District Water Conservancy RB
Series 1996F
4.10%, 12/01/00 1,820 1,831
Palimino Park, Colorado Public
Improvements Corp. Asset Lien RB
4.95%, 07/05/00 14,755 14,755
----------
16,586
----------
DELAWARE -- 0.0% (f)
Delaware Transportation Authority
Transportation System RB
3.60%, 07/01/00 775 791
----------
DISTRICT OF COLUMBIA -- 0.0%
District of Columbia Hospital RB
(Washington Hospital Center Corp.)
Series 1990A
4.25%, 01/01/01 2,750 2,864
----------
FLORIDA -- 0.3%
Alachua County, Florida Health Facilities
Authority Health Facilities RB (Santa
Fe Healthcare Facilities Project)
4.00%, 11/15/00 1,000 1,033
Florida State Board of Education Lottery
RB Series 2000A (f)
4.60%, 07/01/01 1,065 1,069
Osceola County, Florida Capital Imports
RB (f)
3.70%, 09/01/00 4,195 4,200
</TABLE>
53
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Pinellas County, Florida HFA S/F
Housing RB (Multi-County Program)
Series 2000A-3
4.10%, 02/01/01 $ 15,665 $ 15,665
----------
21,967
----------
GEORGIA -- 0.1%
Dalton, Georgia Utilities RB (f)
4.15%, 01/01/01 2,145 2,151
Metropolitan Atlanta Rapid Transit
Authority, Georgia Sales Tax Revenue
Refunding Bonds Series 1991M
4.13%, 07/01/00 6,000 6,000
----------
8,151
----------
HAWAII -- 0.1% (f)
Hawaii State Airport System Revenue
Refunding Bonds 2nd Series 1991
3.60%, 07/01/00 1,680 1,680
Hawaii State Airport System Revenue
Refunding Bonds 2nd Series 1994
4.10%, 07/01/00 2,500 2,500
----------
4,180
----------
ILLINOIS -- 0.0% (f)
Illinois State University Board of Regents
Auxiliary Facility System RB
4.25%, 04/01/01 2,150 2,180
----------
INDIANA -- 0.1% (f)
Indiana University Student Fee RB
Series 1990G
3.60%, 08/01/00 9,500 9,716
----------
IOWA -- 0.1% (f)
Woodbury County, Iowa Hospital
Facilities RB (St. Lukes Regional Medical
Center Project)
4.24%, 03/01/01 4,000 4,143
----------
KENTUCKY -- 0.0% (f)
Kentucky Housing Corp. Housing RB
Series 1993B
4.10%, 07/01/00 1,000 1,000
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
LOUISIANA -- 0.0% (f)
Louisiana Local Government
Environmental Facilities Community
Development Authority Revenue
Refunding Bonds (Avondale Maritime
Project)
4.08%, 10/01/00 $ 3,565 $ 3,569
----------
MASSACHUSETTS -- 0.0% (f)
Massachusetts Municipal Wholesale
Electric Co. Power Supply Systems RB
Series 1992E
4.29%, 07/01/00 2,000 2,000
----------
MICHIGAN -- 0.0%
Michigan State Building Authority
Revenue Refunding Bonds Series 1991I
4.15%, 10/01/00 1,750 1,758
Royal Oak, Michigan Hospital Finance
Authority (Beaumont Hospital) RB
Series 1991D
4.24%, 01/01/01 2,000 2,063
----------
3,821
----------
MINNESOTA -- 0.1% (f)
Minneapolis St. Paul, Minnesota Housing
Finance Board Revenue Refunding
Bond (Single Family Mortgage Project)
Series 1999A3
3.60%, 08/01/00 10,500 10,500
----------
MISSOURI -- 0.0% (f)
St. Louis, Missouri Municipal Finance
Corp. Leasehold RB (City Justice Center)
Series 2000A
4.15%, 02/15/01 615 617
----------
NEVADA -- 0.2% (f)
Clark County, Nevada Airport RB
Series B-2
4.95%, 07/05/00 16,000 16,000
Clark County, Nevada Passenger
Facilities Charge RB (Las Vagas
Macarran International Airport)
Series 1995A
4.30%, 07/01/00 1,000 1,000
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Clark County, Nevada Passenger Facilities
Charge RB (Las Vegas Macarran
International Airport) Series 1995A
4.75%, 07/01/01 $ 1,000 $ 1,014
----------
18,014
----------
NEW JERSEY -- 0.2%
New Jersey Economic Development
Authority Market Transition Facility RB
Series 1994A (f)
3.50%, 07/01/00 3,900 3,900
New Jersey Health Care Facilities
Financing Authority Revenue Refunding
Bonds (Kennedy Health Systemes)
Series 1998B (f)
4.62%, 07/01/01 1,135 1,145
New Jersey State Transportation Trust
Fund Authority Transportation System
RB Series 1992A
4.60%, 06/15/01 1,780 1,803
Port Authority New York & New Jersey
RB 119th Series (f)
3.75%, 09/15/00 8,600 8,613
----------
15,461
----------
NEW YORK -- 0.2% (f)
New York State Dormitory Authority
Hospital Insured Mortgage RB
Series 1997A
4.33%, 02/15/01 3,125 3,133
New York State Medical Care Facilities
Finance Agency Hospital Insured
Mortgage RB Series 1990A
4.45%, 08/15/00 11,000 11,261
----------
14,394
----------
NORTH DAKOTA -- 0.2%
North Dakota State HFA Housing
Finance RB Series 2000B
4.25%, 03/01/01 15,000 15,000
----------
OHIO -- 0.0% (f)
Ohio State Public Facilities Commission
Higher Education Capital Facilities RB
Series II-A
4.05%, 11/01/00 1,750 1,752
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
OREGON -- 0.5%
Oregon State Housing & Community
Services Department S/F Mortgage RB
Series 1999N
3.85%, 11/02/00 $ 10,000 $ 10,000
Oregon State Housing & Community
Services Department S/F Mortgage RB
Series 1999O
3.95%, 11/02/00 1,210 1,210
Oregon State Housing & Community
Services Department S/F Mortgage RB
Series 2000G
4.50%, 06/21/01 30,500 30,500
----------
41,710
----------
PENNSYLVANIA -- 0.1%
Pennsylvania State Higher Education
Assistance Agency Student Loan RB
Series 1985A
4.15%, 12/01/00 7,995 8,080
Pennsylvania State Higher Educational
Facilities Authority RB Series 2000S (f)
4.52%, 06/15/01 2,165 2,175
Philadelphia, Pennsylvania Gas Works RB
14th Series (f)
4.18%, 07/01/00 2,000 2,000
----------
12,255
----------
PUERTO RICO -- 0.0% (f)
Puerto Rico Electric Power Authority RB
Series 1995W
4.90%, 07/01/00 1,000 1,000
----------
SOUTH CAROLINA -- 0.1% (f)
South Carolina Transportation
Infrastructure RB Series 1998A
3.82%, 10/01/00 5,255 5,267
----------
SOUTH DAKOTA -- 0.9%
South Dakota HDA Homeownership
Mortgage RB Series 1999F
3.45%, 07/07/00 23,000 23,000
South Dakota HDA Homeownership
Mortgage RB Series 1999I
3.85%, 09/28/00 11,500 11,500
</TABLE>
55
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
South Dakota HDA Homeownership
Mortgage RB Series 2000C
4.10%, 02/01/01 $ 40,000 $ 40,000
----------
74,500
----------
TEXAS -- 0.1%
Austin, Texas Utility System Revenue
Refunding Bonds
4.30%, 05/15/01 3,500 3,640
Forth Worth, Texas Water & Sewer
Revenue Refunding & Improvement
Bonds
4.24%, 02/15/01 2,145 2,155
University of Texas University Revenue
Refunding Bonds Series 1991A
4.25%, 08/15/00 2,500 2,508
----------
8,303
----------
UTAH -- 0.1% (f)
Intermountain Power Agency, Utah
Power Supply TOB Series 1996C
3.85%, 07/01/00 5,000 5,000
Utah State Board of Regents Revenue
Refunding Bonds (Hospital University
of Utah)
4.15%, 08/01/00 1,275 1,276
----------
6,276
----------
VIRGINIA -- 0.1%
Chesapeake Bay Bridge & Tunnel
Commission, Virginia District RB (f)
4.00%, 07/01/00 2,000 2,000
Hampton Roads Sanitation District,
Virginia Wastewater Capital
Improvement Revenue Refunding Bonds
3.95%, 10/01/00 5,000 5,004
----------
7,004
----------
WASHINGTON -- 1.1% (f)
Washington State Housing Finance
Commission S/F Housing Program RB
Series 1A-S
4.00%, 02/01/01 4,000 4,000
Washington State Public Power Supply
System Revenue Refunding Bonds
(Nuclear Project No. 2) Series 1990A
4.13%, 07/01/00 10,246 10,246
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Washington State Public Power Supply
System Revenue Refunding Bonds
(Nuclear Project No. 2) Series 1990B
3.75%, 07/01/00 $ 31,240 $ 31,865
4.00%, 07/01/00 2,665 2,718
Washington State Public Power Supply
System Revenue Refunding Bonds
(Nuclear Project No. 2) Series 1990C
4.33%, 07/01/00 6,610 6,610
4.10%, 01/01/01 1,000 1,036
4.15%, 01/01/01 3,200 3,316
Washington State Public Power Supply
System Revenue Refunding Bonds
(Nuclear Project No. 2) Series 1991A
4.39%, 07/01/01 20,300 20,614
Washington State Public Power Supply
System Revenue Refunding Bonds
(Nuclear Project No. 2) Series 1992A
4.50%, 07/01/00 750 750
Washington State Public Power Supply
System Revenue Refunding Bonds
(Nuclear Project No. 2) Series 1997A
4.00%, 07/01/00 2,000 2,000
Washington State Public Power Supply
System Revenue Refunding Bonds
(Nulcear Project No. 2) Series 1990C
4.10%, 01/01/01 11,350 11,753
----------
94,908
----------
WISCONSIN -- 0.1%
Wisconsin Housing & Economic
Development Authority Home
Ownership RB Series 1999I
3.55%, 08/15/00 6,000 6,000
----------
TOTAL REVENUE BONDS
(Cost $512,204) 512,204
----------
MANDATORY PUT BONDS -- 5.5% (c)
CALIFORNIA -- 1.9% (f)
California Higher Education Loan
Authority Student Loan RB Series 1987C
4.72%, 06/01/01 70,000 70,000
California Higher Education Loan
Authority Student Loan RB
Series 1992A-2-6
4.30%, 07/07/00 9,675 9,675
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California Higher Education Loan
Authority Student Loan RB
Series 1992A-3
4.30%, 07/07/00 $ 44,900 $ 44,900
California Higher Education Loan
Authority Student Loan RB
Series 1992D-2
4.35%, 07/07/00 11,500 11,500
California Higher Education Loan
Authority Student Loan RB
Series 1992D-4
4.35%, 07/07/00 5,150 5,150
California Higher Education Loan
Authority Student Loan RB
Series 1992A-4
4.35%, 07/07/00 8,725 8,725
California Higher Education Loan
Authority Student Loan RB
Series 1992D-1
4.35%, 07/07/00 13,600 13,600
----------
163,550
----------
IDAHO -- 0.1%
Custer County, Idaho Pollution Control RB
(Amoco Project) Series 1983
4.15%, 10/01/00 11,500 11,500
----------
ILLINOIS -- 0.2%
Chicago, Illinois G.O. (f)
4.00%, 10/26/00 10,000 10,000
Illinois Development Financing
Authority RB
4.20%, 09/01/00 6,900 6,900
Orland Park, Illinois IDRB (Orland
Properties Project) (f)
4.50%, 07/07/00 1,005 1,005
----------
17,905
----------
NEVADA -- 0.4% (f)
Clark County, Nevada Airport Revenue
Systems Sub Lien RB Series 1999B1
4.80%, 07/05/00 33,860 33,860
----------
NEW JERSEY -- 0.2% (f)
New Jersey State Higher Education
Assistance Authority Student Loan RB
Series 1999B
4.75%, 06/01/01 12,000 12,000
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
NEW YORK -- 0.4% (f)
New York City, New York Transit Cultural
Resource RB (American Museum of
Natural History Project) Series 1999B
4.50%, 07/01/01 $ 12,000 $ 12,000
New York State GO Series 2000A
4.34%, 02/08/01 22,000 22,000
----------
34,000
----------
RHODE ISLAND -- 0.2% (f)
Rhode Island State Student Loan
Authority RB
4.80%, 06/01/01 19,000 19,000
----------
TEXAS -- 2.1% (f)
Greater East Texas Higher Education
Authority Student Loan RB Series 1992A
3.80%, 09/01/00 7,500 7,500
Greater East Texas Higher Education
Authority Student Loan RB Series 1992B
3.50%, 07/01/00 14,000 14,000
Greater East Texas Higher Education
Authority Student Loan RB Series 1993A
4.50%, 05/01/01 48,150 48,150
Greater East Texas Higher Education
Authority Student Loan RB Series 1995
4.50%, 05/01/01 40,000 40,000
Greater East Texas Higher Education
Authority Student Loan RB Series 1995A
4.50%, 05/01/01 11,700 11,700
Greater East Texas Student Loan Corp.
Student Loan RB Series 1996A
4.28%, 03/01/01 56,000 56,000
----------
177,350
----------
TOTAL MANDATORY PUT BONDS
(Cost $469,165) 469,165
----------
TAX & REVENUE ANTICIPATION NOTES -- 2.8% (c)
CALIFORNIA -- 0.6% (f)
California School Cash Reserve Program
Authority Pooled TRAN Series 1999A
4.77%, 07/03/00 50,000 49,997
----------
</TABLE>
57
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
KENTUCKY -- 0.3%
Kentucky Asset Liability Common
General Fund Revenue TRAN
Series 2000A (d)
4.54%, 06/27/01 $ 25,000 $ 25,167
----------
MISSOURI -- 0.2%
St Louis, Missouri General Fund
TRAN (d)
4.58%, 06/28/01 21,000 21,133
----------
TEXAS -- 1.4%
Texas State TRAN Series 1999A
3.75%, 08/31/00 2,500 2,503
3.79%, 08/31/00 10,500 10,511
3.82%, 08/31/00 17,000 17,017
3.85%, 08/31/00 46,500 46,545
3.86%, 08/31/00 34,900 34,933
3.90%, 08/31/00 500 500
3.95%, 08/31/00 6,800 6,805
3.96%, 08/31/00 700 701
----------
119,515
----------
WASHINGTON -- 0.1%
Spokane, Washington General Fund
GO TRAN
4.25%, 04/02/01 5,500 5,520
----------
WISCONSIN -- 0.2%
Eau Claire, Wisconsin Area School
District TRAN
3.92%, 10/20/00 17,592 17,622
----------
TOTAL TAX & REVENUE
ANTICIPATION NOTES
(Cost $238,954) 238,954
----------
FIXED RATE TENDER OPTION BONDS -- 2.3% (c)(e)
CONNECTICUT -- 0.4% (f)
Connecticut HFA Housing Mortgage
Finance Program TOB Series 1998T
4.00%, 09/14/00 12,995 12,995
Connecticut HFA Macon TOB
Series 1999D
4.80%, 11/15/00 19,995 19,995
----------
32,990
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
HAWAII -- 0.2% (f)
Hawaii State Airport System RB TOB
Series 1991-2
4.65%, 11/30/00 $ 14,765 $ 14,765
----------
MASSACHUSETTS -- 0.1% (f)
Massachusetts Bay Transportation
Authority, Massachusetts TOBP
(PT-1218)
4.20%, 01/18/01 5,000 5,000
----------
NEBRASKA -- 0.2%
Nebraska Investment Finance Authority
S/F Housing Revenue TOB
Series 1998X (f)
4.80%, 08/16/00 10,825 10,825
Nebraska Public Power District RB TOBP
(PT-1176) Series 1998B
4.20%, 09/14/00 9,050 9,050
----------
19,875
----------
NEW JERSEY -- 0.4% (f)
New Jersey State Housing & Mortgage
Finance Agency Revenue TOBP
(PT-1182) Series 1999
3.75%, 09/14/00 22,090 22,090
New Jersey State Housing & Mortgage
Finance Agency Revenue TOBP (PT-285)
3.80%, 08/10/00 6,620 6,620
----------
28,710
----------
NEW YORK -- 0.1% (f)
New York State Mortgage Agency Revenue
TOB Series 1999F
4.75%, 07/26/00 10,700 10,700
----------
PENNSYLVANIA -- 0.3% (f)
Pennsylvania HFA TOB Series 1998Y
4.80%, 07/19/00 13,495 13,495
Philadelphia, Pennsylvania IDA Airport
RB TOB Series 1998A
3.62%, 07/20/00 15,000 15,000
----------
28,495
----------
RHODE ISLAND -- 0.2% (f)
Rhode Island Housing & Mortgage
Finance Corp. TOB Series 1999E
4.80%, 08/16/00 19,020 19,020
----------
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
UTAH -- 0.2% (f)
Utah State TOBP (PT-429)
4.50%, 06/14/01 $ 15,000 $ 15,000
----------
WASHINGTON -- 0.2%
Seattle Washington TOBP (PT-1167) (f)
3.60%, 07/20/00 6,740 6,740
Washington State Public Power Supply
System Revenue Refunding Bonds
(Nuclear Project No. 2) TOBP (PT-432)
4.49%, 04/18/01 11,395 11,395
----------
18,135
----------
TOTAL FIXED RATE TENDER
OPTION BONDS
(Cost $192,690) 192,690
----------
OPTIONAL PUT BONDS -- 1.4% (c)(f)
MONTANA -- 0.7%
Montana State Board of Investments
Resource Recovery RB (Colstrip Project)
4.75%, 07/07/00 60,800 60,800
----------
TEXAS -- 0.7%
Grapevine, Texas Industrial Development
Corp. Airport RB (Singer County Project)
4.30%, 04/01/01 18,975 18,975
Greater East Texas Higher Education
Authority Student Loan RB
Series 1992B
3.85%, 09/01/00 14,400 14,400
Greater East Texas Higher Education
Authority Student Loan RB
Series 1993B1
4.22%, 02/01/01 18,000 18,000
Greater East Texas Higher Education
Authority Student Loan RB
Series 1995B
3.50%, 07/01/00 10,000 10,000
----------
61,375
----------
TOTAL OPTIONAL PUT BONDS
(Cost $122,175) 122,175
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
TAX ANTICIPATION NOTES -- 1.3% (c)
GEORGIA -- 1.1%
DeKalb County, Georgia School
District TAN
3.98%, 12/28/00 $ 89,000 $ 89,114
----------
IDAHO -- 0.2%
Idaho State TAN (d)
4.75%, 06/29/01 20,000 20,118
----------
TOTAL TAX ANTICIPATION NOTES
(Cost $109,232) 109,232
----------
BOND ANTICIPATION NOTES -- 1.1% (c)
MASSACHUSETTS -- 0.5%
Bellingham, Massachusetts GO BAN
3.90%, 09/27/00 29,000 29,027
Reading, Massachusetts BAN
3.98%, 01/11/01 7,350 7,366
Winthrop, Massachusetts BAN
4.30%, 11/02/00 11,775 11,792
----------
48,185
----------
NEW JERSEY -- 0.4%
East Brunswick Township, New Jersey BAN
3.87%, 01/05/01 11,800 11,825
Jersey City, New Jersey BAN
3.80%, 09/15/00 270 270
Passaic County, New Jersey BAN
3.80%, 09/22/00 15,903 15,914
3.90%, 03/30/01 4,839 4,849
----------
32,858
----------
NEW YORK -- 0.2%
Broome County, New York BAN
4.22%, 04/03/01 6,755 6,781
4.23%, 04/03/01 4,625 4,643
4.25%, 04/03/01 4,000 4,015
----------
15,439
----------
TOTAL BOND ANTICIPATION NOTES
(Cost $96,482) 96,482
----------
</TABLE>
59
<PAGE>
SCHWAB MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
REVENUE ANTICIPATION WARRANTS -- 1.1% (c)(f)
Iowa School Corps. Revenue Anticipation
Warrants (Iowa School Cash
Anticipation Progam)/(FSA Insurance)
4.05%, 02/01/01 $ 13,700 $ 13,754
Iowa School Corps. Revenue
Anticipation Warrants (Iowa School
Cash Anticipation Progam)
Series 2000A/(FSA Insurance)
4.49%, 06/22/01 80,145 80,900
----------
TOTAL REVENUE ANTICIPATION WARRANTS
(Cost $94,654) 94,654
----------
GENERAL OBLIGATIONS -- 0.8% (c)
ALABAMA -- 0.2%
Alabama State GO Series 1999A
4.13%, 10/01/00 11,000 11,040
Mobile, Alabama Refunding GO
Warrants (f)
4.25%, 02/15/01 1,300 1,310
----------
12,350
----------
ARIZONA -- 0.1% (f)
Glendale, Arizona Refunding GO Bonds
3.25%, 07/01/00 4,000 4,000
----------
CONNECTICUT -- 0.0%
Connecticut State GO Series 2000B
4.45%, 06/15/01 2,000 2,010
----------
DISTRICT OF COLUMBIA -- 0.1% (f)
District of Columbia GO Series 1993D
4.00%, 12/01/00 5,610 5,630
----------
FLORIDA -- 0.1%
Dade County, Florida GO Series 1979I
3.80%, 07/01/00 2,000 2,000
Florida State Board of Education Capital
Outlay GO Series 1999A
4.07%, 01/01/01 2,890 2,893
----------
4,893
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
GEORGIA -- 0.1%
Georgia State GO Series 1993A
4.24%, 01/01/01 $ 1,935 $ 1,965
Georgia State GO Series 1993E
4.00%, 07/01/00 3,195 3,195
Georgia State GO Series 1999A
4.20%, 08/01/00 2,810 2,812
----------
7,972
----------
HAWAII -- 0.1%
Hawaii State GO
4.25%, 02/01/01 6,000 6,127
----------
MINNESOTA -- 0.0%
Minneapolis & Saint Paul, Minnesota
Metropolitan Airports Commission GO
Series 1992-8
4.20%, 01/01/01 2,000 2,018
----------
NEW JERSEY -- 0.0%
Bergen County, New Jersey GO
3.45%, 08/01/00 1,500 1,501
Passaic Valley, New Jersey Sewer System
GO Series 1999E (f)
3.93%, 12/01/00 2,070 2,075
----------
3,576
----------
NEW YORK -- 0.0% (f)
Nassau County, New York General
Improvement GO Series 1999C
4.32%, 01/01/01 3,000 3,012
----------
PENNSYLVANIA -- 0.0%
Pennsylvania State GO Series 2000
4.00%, 01/15/01 1,305 1,314
----------
TEXAS -- 0.0%
Texas State North East Independent
School District GO
4.15%, 10/01/00 1,635 1,642
----------
</TABLE>
60
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
VIRGINIA -- 0.1%
Fairfax County, Virginia Public
Improvement GO Series 1999B
4.00%, 12/01/00 $ 2,330 $ 2,335
Richmond, Virginia Refunding Public
Improvement GO Series 1993A
4.22%, 01/15/01 6,090 6,108
----------
8,443
----------
WISCONSIN -- 0.0%
Wisconsin State GO Series 1995C
4.25%, 05/01/01 2,000 2,012
Wisconsin State Refunding GO
4.30%, 05/01/01 2,000 2,024
----------
4,036
----------
TOTAL GENERAL OBLIGATIONS
(Cost $67,023) 67,023
----------
REVENUE ANTICIPATION NOTES -- 0.4% (c)
NEW YORK -- 0.2%
Nassau County, New York RAN
Series 2000B
4.48%, 03/20/01 15,000 15,159
Nassau County, New York RAN
Series 2000D
4.48%, 04/12/01 2,900 2,933
----------
18,092
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
OHIO -- 0.2% (f)
Ohio HFA Residental Mortgage RAN
4.05%, 09/01/00 $ 13,000 $ 13,000
----------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $31,092) 31,092
----------
CERTIFICATES OF PARTICIPATION -- 0.1% (c)
York County, South Carolina Public
Facilities Corp. COP
4.43%, 06/01/01 12,000 12,560
----------
TOTAL CERTIFICATES OF PARTICIPATION
(Cost $12,560) 12,560
----------
OTHER INVESTMENT COMPANIES -- 0.2% (g)
Provident Institutional Funds - Muni
Fund Portfolio
4.03% 16,406 16,406
----------
TOTAL OTHER INVESTMENT COMPANIES
(Cost $16,406) 16,406
----------
TOTAL INVESTMENTS -- 101.5%
(Cost $8,672,134) 8,672,134
----------
OTHER ASSETS AND LIABILITIES -- (1.5%)
Other assets 96,624
Liabilities (225,842)
----------
(129,218)
----------
TOTAL NET ASSETS -- 100.0% $8,542,916
==========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
61
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS -- 42.8% (b)(f)
ABAG Financing Authority for
Non-Profit Corporations, California
COP (Bentley School)
4.55%, 07/07/00 $ 5,230 $ 5,230
ABAG Financing Authority for
Non-Profit Corporations, California
COP (Harker School Project)
4.40%, 07/07/00 5,300 5,300
ABAG Financing Authority for
Non-Profit Corporations, California
COP (Lucile Salter Packard Project)
4.40%, 07/07/00 4,900 4,900
ABAG Financing Authority for
Non-Profit Corporations, California
M/F Housing RB (Architect Building
Project)
4.40%, 07/07/00 3,200 3,200
ABAG Financing Authority for
Non-Profit Corporations, California
M/F Housing RB (Mountain View
Apartments) Series 1997A
4.65%, 07/07/00 3,370 3,370
ABAG Financing Authority for
Non-Profit Corporations, California
M/F Housing RB (Vintage Chateau)
5.00%, 07/07/00 11,000 11,000
Alameda County, California IDA RB
(Malmberg Engineering, Inc. Project)
4.70%, 07/07/00 2,980 2,980
Alameda County, California IDRB
(Aitchison Family Project) Series 1993A
4.50%, 07/07/00 2,760 2,760
Alameda County, California IDRB
(Association Heat & Control Project)
4.50%, 07/07/00 810 810
Alameda County, California IDRB
(JMS Family Partners) Series A
4.50%, 07/07/00 1,400 1,400
Alameda County, California IDRB
(Scientific Technology Project)
Series 1994A
4.55%, 07/07/00 2,580 2,580
Anaheim, California COP (Anaheim
Memorial Hospital Assoc Project)
4.30%, 07/07/00 6,270 6,270
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Anaheim, California COP (Police Facility
Financing Project)
4.30%, 07/07/00 $ 700 $ 700
Anaheim, California Housing Authority
M/F Housing RB (Casa Grande
Apartments) Series 1997A
4.30%, 07/07/00 3,795 3,795
Anaheim, California Housing Authority
M/F Housing RB (Port Trinidad
Apartments) Series 1997C
4.30%, 07/07/00 2,140 2,140
Anaheim, California Housing Authority
M/F Housing RB (Sage Park Project)
Series A
4.35%, 07/07/00 2,000 2,000
Anaheim, California Union High School
District COP
4.35%, 07/07/00 5,500 5,500
Avalon, California Community
Improvement Agency Tax Allocation RB
4.75%, 07/07/00 9,805 9,805
Burbank, California Redevelopment
Agency M/F Housing RB
4.40%, 07/07/00 9,000 9,000
California Alternative Energy Source
Financing Authority (GE Capital Corp.
Arroyo Project) Series A
4.35%, 07/07/00 25,330 25,330
California Alternative Energy Source
Financing Authority GE (Capital Corp.
Arroyo Project) Series 1993B
4.30%, 07/07/00 12,260 12,260
California Eastern Water Municipal
District Water & Sewer RB COP
Series 1993B
4.25%, 07/07/00 9,000 9,000
California Economic Development
Financing Authority (Lion Raisin
Project)
4.40%, 07/07/00 1,900 1,900
California Education Facilities Authority
(Life Chiropractic College West)
4.50%, 07/07/00 5,000 5,000
California Education Facilities Authority
(University of Judaism Project) Series A
4.30%, 07/07/00 5,500 5,500
California Education Facilities Authority
RB (University of San Francisco)
4.55%, 07/07/00 6,500 6,500
</TABLE>
62
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California Health Facilities Financing
Authority RB (California Prebyterian
Homes) Series 1998
4.45%, 07/07/00 $ 31,515 $ 31,515
California Health Facilities Financing
Authority RB (Catholic Health Care
West) Series 1988B
4.25%, 07/07/00 21,900 21,900
California Health Facilities Financing
Authority RB (Catholic Health Care)
Series 1988C
4.25%, 07/07/00 20,000 20,000
California Health Facilities Financing
Authority RB (Catholic Health Care)
Series A
4.25%, 07/07/00 9,100 9,100
California Health Facilities Financing
Authority RB (Children's Hospital
Project) Series 1991
4.25%, 07/07/00 17,700 17,700
California Health Facilities Financing
Authority RB (Scripps Memorial
Hospital) Series 1991B
4.65%, 07/07/00 400 400
California Health Facilities Financing
Authortiy RB (St. Joseph Health System
Project) Series 1985A
4.15%, 07/01/00 75 75
California HFA Home Mortgage RB
Series 1999J-1
4.70%, 07/07/00 13,600 13,600
California HFA Home Mortgage RB
Series 1999J-2
4.70%, 07/07/00 30,500 30,500
California HFA Home Mortgage RB
Series 2000J
4.70%, 07/07/00 16,460 16,460
California HFA Home Mortgage RB
Series 2000M
4.70%, 07/07/00 32,665 32,665
California HFA Home Mortgage RB
Series 2000N
4.70%, 07/07/00 21,000 21,000
California HFA RB Series G
4.35%, 07/07/00 27,000 27,000
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California Infrastructure & Economic
Development Bank IDRB (American
Derosa-Lamparts)
4.55%, 07/07/00 $ 4,950 $ 4,950
California Infrastructure & Economic
Development Bank IDRB (Fairmont
Sign Co. Project) Series 2000A
4.95%, 07/07/00 4,250 4,250
California Infrastructure & Economic
Development Bank IDRB (Lafayette
Textile Industries Project)
4.50%, 07/07/00 3,470 3,470
California Infrastructure & Economic
Development Bank IDRB (Nelson
Name Plate Co. Project)
4.60%, 07/07/00 3,950 3,950
California Infrastructure & Economic
Development Bank IDRB (Roller
Bearing Co. of America Santa Ana
Project)
4.95%, 07/07/00 2,400 2,400
California Pollution Control Financing
Authority RB (Green Team of San Jose
Project)
4.50%, 07/07/00 3,600 3,600
California Pollution Control Financing
Authority RB (Pacific Gas & Electric
Co. Project) Series 1996B
4.30%, 07/07/00 61,200 61,200
California Pollution Control Financing
Authority RB (Pacific Gas & Electric Co.
Project) Series A
4.30%, 07/07/00 68,500 68,500
California Pollution Control Financing
Authority RB (Pacific Gas & Electric Co.
Project) Series D
4.50%, 07/07/00 11,400 11,400
California Pollution Control Financing
Authority RB (Wadham Energy Project)
Series 1987B
4.80%, 07/07/00 700 700
California Pollution Control Financing
Authority Resource Recovery RB
(Sanger Project) Series 1990A
4.40%, 07/07/00 2,800 2,800
</TABLE>
63
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California Pollution Control Financing
Authority Resource Recovery Solid
Waste Disposal RB (Atlas Disposal
Industrial Project) Series 1999A
4.55%, 07/07/00 $ 3,000 $ 3,000
California Pollution Control Financing
Authority Resource Recovery Solid
Waste Disposal RB (Bay Leasing, Inc.
Project) Series 1999A
4.50%, 07/07/00 9,675 9,675
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Blue Line Transfer Inc. Project)
4.50%, 07/07/00 5,000 5,000
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Alameda County Industries Project)
Series 2000A
4.50%, 07/07/00 5,155 5,155
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Allan Co. Project)
4.50%, 07/07/00 975 975
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Athens Disposal Co. Project)
Series 1995A
4.50%, 07/07/00 17,110 17,110
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Athens Disposal Co. Project)
Series 1999A
4.50%, 07/07/00 8,000 8,000
California Pollution Control Financing
Authority Solid Waste Disposal RB
(BLT Enterprises) Series 1999A
4.50%, 07/07/00 9,000 9,000
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Burrtec Waste Industries Project)
Series 1995A
4.60%, 07/07/00 3,425 3,425
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Calsan Inc. Project) Series 1999B
4.50%, 07/07/00 4,685 4,685
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Cold Cyn Landfill Project)
4.50%, 07/07/00 $ 7,200 $ 7,200
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Colmac Energy Project) Series 1990A
4.40%, 07/07/00 18,850 18,850
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Contra Costa Services) Series 1995A
4.50%, 07/07/00 3,600 3,600
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Edco Disposal Corp. Project)
Series 1996A
4.50%, 07/07/00 16,400 16,400
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Greenwaste of Tehama Project)
Series A
4.55%, 07/07/00 3,435 3,435
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Madera Disposable Project) Series A
4.55%, 07/07/00 1,800 1,800
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Marborg Industries Project) Series A
4.50%, 07/07/00 5,425 5,425
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Met Recycling Corporation Project)
Series B
4.55%, 07/07/00 5,340 5,340
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Santa Clara Project)
4.55%, 07/07/00 4,000 4,000
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Shell Martinez Refining Project)
Series A
4.10%, 07/07/00 2,000 2,000
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Shell Oil Co. Martinez Project)
Series 1996B
4.10%, 07/07/00 5,000 5,000
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Solag Disposal Project) Series 1997A
4.50%, 07/07/00 $ 3,470 $ 3,470
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Sun Valley Paper Project)
4.50%, 07/07/00 1,200 1,200
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Talco Plastics Project) Series 1997A
4.50%, 07/07/00 4,150 4,150
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Taormina Industries, Inc. Project)
Series 1994B
4.60%, 07/07/00 2,225 2,225
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Tri Community Recycle Project)
4.55%, 07/07/00 2,455 2,455
California Pollution Control Financing
Authority Solid Waste Disposal RB
(West Valley Project) Series 1997A
4.60%, 07/07/00 8,870 8,870
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Zanker Road Landfill Project) Series C
4.55%, 07/07/00 6,370 6,370
California Pollution Control Financing
Authority Solid Waste Disposal RB
4.50%, 07/07/00 5,235 5,235
4.60%, 07/07/00 3,970 3,970
California Pollution Control Financing
Authority Solid Waste Disposal RB
Series A
4.45%, 07/07/00 10,000 10,000
California Public Power Agency
Subordinate Lien (San Juan Project)
Series 1997D
4.25%, 07/07/00 2,500 2,500
California School Facilities Financing
Corp. COP (Capital Improvement
Financing Project) Series 1999D
4.30%, 07/07/00 8,825 8,825
California State Economic Development
Financing Authority (Mannesmann
Dematic Corp.)
4.80%, 07/07/00 3,200 3,200
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California State Economic Development
Financing Authority IDRB (Calco
Project)
4.85%, 07/07/00 $ 880 $ 880
California State Economic Development
Financing Authority IDRB (Gaiser
Tool Project)
4.50%, 07/07/00 2,810 2,810
California State Economic Development
Financing Authority IDRB (Mercury
Air Group)
4.40%, 07/07/00 16,300 16,300
California State Economic Development
Financing Authority RB (Buck Center
for Aging Project)
4.40%, 07/07/00 50,300 50,300
California State Economic Development
Financing Authority RB (Costa
Macoroni Project)
4.50%, 07/07/00 3,350 3,350
California State Economic Development
Financing Authority RB (Killion
Industry's Project)
5.05%, 07/07/00 6,300 6,300
California Statewide Community
Development Authority (Davis
Retirement Care)
4.00%, 07/01/00 500 500
California Statewide Community
Development Authority (Dr. Nichols
Pistachio) Series C
4.45%, 07/07/00 900 900
California Statewide Community
Development Authority COP (Sutter
Health Obligation Group)
4.15%, 07/01/00 3,300 3,300
California Statewide Community
Development Authority COP
4.40%, 07/07/00 7,485 7,485
California Statewide Community
Development Authority IDRB (Biocol
Investments LP) Series 1997B
4.75%, 07/07/00 1,500 1,500
California Statewide Community
Development Authority IDRB
(Integrated Rolling Co. Project)
Series 1999A
4.60%, 07/07/00 2,900 2,900
</TABLE>
65
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California Statewide Community
Development Authority M/F Housing RB
(Kimberly Woods Project) Series 1995B
4.55%, 07/07/00 $ 11,400 $ 11,400
California Statewide Community
Development Authority M/F Housing RB
(One Park Place)
4.30%, 07/07/00 2,038 2,038
California Statewide Community
Development Authority M/F Housing RB
(Park David Senior Apartments Project)
Series 1999D
4.35%, 07/07/00 8,220 8,220
California Statewide Community
Development Authority M/F Housing RB
(Plaza Club Apartments) Series 1997A
4.37%, 07/07/00 9,790 9,790
California Statewide Community
Development Authority RB (Japanese
American Museum Project) Series 2000A
4.30%, 07/07/00 5,000 5,000
California Statewide Community
Development Authority RB (Jewish
Federation of Los Angeles) Series 2000A
4.30%, 07/07/00 11,500 11,500
California Statewide Community
Development Corp. IDRB (13th I
Associates Project)
4.75%, 07/07/00 4,880 4,880
California Statewide Community
Development Corp. IDRB (Agricultural
Products, Inc. Project)
4.75%, 07/07/00 1,360 1,360
California Statewide Community
Development Corp. IDRB (Cowden
Metal Stamping Project)
4.75%, 07/07/00 1,820 1,820
California Statewide Community
Development Corp. IDRB (Drip In
Irrigation Co. Project)
4.65%, 07/07/00 3,600 3,600
California Statewide Community
Development Corp. IDRB (Flambeau
Airmold Project)
4.65%, 07/07/00 2,400 2,400
California Statewide Community
Development Corp. IDRB (Industrial
Dynamics Co. Project)
4.75%, 07/07/00 3,840 3,840
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California Statewide Community
Development Corp. IDRB (Pacific
Handy Cutter Products Project)
4.75%, 07/07/00 $ 590 $ 590
California Statewide Community
Development Corp. IDRB (The
Diamond Foods Project) Series 1991
4.75%, 07/07/00 1,165 1,165
California Statewide Community
Development Corp. IDRB Series 1998C
4.65%, 07/07/00 2,060 2,060
California Statewide Community
Industrial Development Revenue
Refunding Bonds (Golden Valley
Project) Series A
4.65%, 07/07/00 1,680 1,680
California Statewide M/F Housing
Authority RB (Woodsong Apartments)
Series 1997B
4.30%, 07/07/00 3,427 3,427
California Pollution Control Financing
Authority Solid Waste Disposal RB
(Calsan Inc. Project) Series 1996A
4.50%, 07/07/00 6,115 6,115
Carlsbad, California M/F Housing
Revenue Refunding Bonds COP
(La Costa Apartment Project)
Series 1993A
4.30%, 07/07/00 11,720 11,720
Chula Vista, California IDRB (San Diego
Gas & Electric Co.) Series 1993A
4.45%, 07/07/00 11,800 11,800
Concord, California M/F Housing
Authority RB (California Hill
Apartments) Series 1989A
4.50%, 07/07/00 6,750 6,750
Concord, California M/F Housing
Mortgage RB (Bel Air Apartments
Project) Series 1986A
4.40%, 07/07/00 3,000 3,000
Contra Costa County, California M/F
Housing Mortgage RB (El Cerrito
Project) Series A
4.40%, 07/07/00 980 980
Davis, California Community Facilities
District Special Tax Bonds (East Davis
Mace Ranch Project) District No. 1999-2
4.40%, 07/07/00 4,640 4,640
</TABLE>
66
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Duarte, California Redevelopment
Agency COP (Johnson Duarte Partners
Project) Series 1984B
4.35%, 07/07/00 $ 1,500 $ 1,500
Duarte, California Redevelopment
Agency COP (Piken Duarte Partners
Project) Series 1984A
4.35%, 07/07/00 4,050 4,050
Dublin, California Housing Authority
M/F Housing RB (Park Sierra Project)
Series A
4.45%, 07/07/00 12,700 12,700
El Cajon, California M/F Housing RB
(Pinewood Apartments Project)
4.37%, 07/07/00 1,450 1,450
El Cajon, California Redevelopment
Bonds M/F Housing RB (Mollison &
Madison Project)
4.37%, 07/07/00 5,300 5,300
Encinitas, California M/F Housing
Revenue Refunding Bonds (Torrey
Pines Project) Series A
4.35%, 07/07/00 1,000 1,000
Fremont, California M/F Housing
Revenue Refunding COP (Amber Court
Apartments Project) Series 1990A
4.55%, 07/07/00 10,000 10,000
Fresno, California IDA (Keiser Corp.)
4.55%, 07/07/00 2,215 2,215
Hayward, California Housing Authority
M/F RB (Huntwood Terrace Apartments)
4.55%, 07/07/00 5,565 5,565
Hayward, California M/F Housing RB
(Shorewood Apartment Project)
Series A
4.25%, 07/07/00 9,100 9,100
Hayward, California M/F Housing RB
(Timbers Apartments Project) Series A
4.35%, 07/07/00 7,500 7,500
Huntington Beach, California M/F
Housing RB (Five Points Project)
4.37%, 07/07/00 6,400 6,400
Huntington Park, California
Redevelopment Agency M/F RB
(Casa Rita Apartments) Series 1994A
4.37%, 07/07/00 4,100 4,100
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Indio, California M/F Redevelopment
Bonds Refunding Housing Mortgages
(Carreon Apartments Project)
Series 1996A
4.30%, 07/07/00 $ 3,950 $ 3,950
Irvine Ranch, California Improvement
Bond Act 1915 RB (Assessment
District No. 87-8)
4.15%, 07/01/00 3,000 3,000
Irvine Ranch, California Improvement
Bond Act 1915 RB (Assessment District)
4.15%, 07/01/00 9,893 9,893
4.25%, 07/07/00 1,900 1,900
Ivrine Ranch, California Water District
Consolidated RB
4.15%, 07/01/00 5,000 5,000
Irvine Ranch, California Water District
COP (Capital Improvement Project)
3.50%, 07/01/00 9,400 9,400
Irvine Ranch, California Water District
GO (Districts 105, 140, 240 & 250)
Series1995
3.50%, 07/01/00 5,000 5,000
Irvine Ranch, California Water District
GO (Improvement District #282)
Series 1988A
3.50%, 07/01/00 1,700 1,700
Irvine Ranch, California Water District
Improvement Bond GO (District 284)
Series 1988A
3.50%, 07/01/00 3,000 3,000
Irvine Ranch, California Water District
Improvement Bond Limited Obligation
No. 97-17
4.15%, 07/01/00 1,400 1,400
Kern County, California COP (Kern Public
Facilities Project) Series A
4.25%, 07/07/00 4,400 4,400
Livermore, California M/F Housing
Revenue Refunding Bonds (Arbors
Apartment Project) Series 1991A
4.45%, 07/07/00 9,005 9,005
Long Beach, California Housing Authority
M/F Housing RB (Channel Point
Apartments Project)
4.25%, 07/07/00 6,250 6,250
</TABLE>
67
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Los Angeles County, California COP ACES
(Los Angeles County Museum of Art
Project) Series 1985A
4.65%, 07/07/00 $ 2,600 $ 2,600
Los Angeles County, California COP ACES
(Los Angeles County Museum of Art
Project) Series 1985B
4.65%, 07/07/00 3,000 3,000
Los Angeles County, California Housing
Authority M/F RB (Malibu Canyon
Apartments Project) Series B
4.75%, 07/07/00 43,400 43,400
Los Angeles County, California Housing
Authority M/F RB (Park Sierra Project)
4.75%, 07/07/00 45,300 45,300
Los Angeles County, California M/F
Housing RB (Channel Gateway
Apartments)
4.30%, 07/07/00 55,000 55,000
Los Angeles County, California
Metropolitan Transportation Authority
Revenue Refunding Bonds Series 1993A
4.25%, 07/07/00 44,980 44,980
Los Angeles, California Community
Redevelopment Agency M/F Housing
Revenue Refunding Bonds (Promenade
Towers Project) Series 2000
4.20%, 07/07/00 28,900 28,900
Los Angeles, California Community
Redevelopment Agency (Grand
Promenade Project)
4.30%, 07/07/00 12,400 12,400
Los Angeles, California Department
Water & Power Electric Plant RB
Series 2000A
4.25%, 07/07/00 5,000 5,000
Los Angeles, California Department
Water & Power Electric Plant RB
Series 2000E
4.25%, 07/07/00 12,000 12,000
Los Angeles, California Department
Water & Power Electric Plant RB
Second Issue Series 2000B
4.25%, 07/07/00 60,000 60,000
Los Angeles, California M/F Housing RB
(Beverly Park Apartments)
4.35%, 07/07/00 24,400 24,400
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Los Angeles, California M/F Housing RB
(Studio Colony) Series 1985C
4.35%, 07/07/00 $ 16,691 $ 16,691
Los Angeles, California M/F Housing RB
Series 1985K
4.40%, 07/07/00 65,210 65,210
Los Angeles, California Unified School
District COP (Belmont Learning
Complex Project) Series 1997A
4.70%, 07/07/00 24,200 24,200
Madera, California Public Financing
Municipal Golf Course Revenue
Refinancing Authority
4.80%, 07/07/00 1,950 1,950
Metropolitan Water District of Southern
California Revenue Refunding Bonds
Series 1996A
4.25%, 07/07/00 69,505 69,505
Mount San Jacinto, California Winter
Park Authority (Palm Springs Aerial
Project)
4.30%, 07/07/00 8,700 8,700
Mount San Jacinto, California Winter
Park Authority COP (Palm Springs
Aerial Project) Series 2000B
4.30%, 07/07/00 2,900 2,900
Orange County California Apartment
Development RB (Hidden Hills)
Series 1985C
4.75%, 07/07/00 5,200 5,200
Orange County, California Apartment
Development RB Series 1985V
4.40%, 07/07/00 18,000 18,000
Orange County, California Apartment
Development RB Series 1998G
4.35%, 07/07/00 10,000 10,000
Orange County, California Apartment
Development RB Series F
4.20%, 07/07/00 12,000 12,000
Orange County, California Apartment
Development RB Series G-3
4.35%, 07/07/00 28,000 28,000
Orange County, California Apartment
Development Revenue Refunding
Bonds (Jess L. Frost Project)
Series 1985B
4.40%, 07/07/00 10,200 10,200
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Orange County, California Apartment
Development Revenue Refunding
Bonds (The Lakes Project #185)
Series 1991A
4.25%, 07/07/00 $ 20,000 $ 20,000
Orange County, California COP (Florence
Crittenton Services Project) Series 1990
4.65%, 07/07/00 5,900 5,900
Orange County, California Housing M/F
RB (Lantern Pines Project)
4.50%, 07/07/00 6,200 6,200
Orange County, California Sanitation
District COP (Districts 1, 2, 3, 5, 6, 7,
11, 13 & 14)
4.15%, 07/01/00 1,500 1,500
Panama Buena Vista, California Unified
School District COP (1994 Capital
Improvement Financing Project)
5.05%, 07/07/00 4,000 4,000
Petaluma, California Community M/F
Housing Authority (Oakmont At
Petaluma Project)
4.40%, 07/07/00 3,550 3,550
Pinole, California Redevelopment Agency
M/F Housing RB (East Bluff Apartments
Project)
4.65%, 07/07/00 2,559 2,559
Pleasant Hill, California M/F Housing RB
(Brookside Apartments Project)
4.25%, 07/07/00 5,100 5,100
Pleasant Hill, California Redevelopment
Agency M/F Housing (Chateau III
Project) Series A
4.40%, 07/07/00 2,360 2,360
Redwood City, California COP (City Hall
Project)
4.45%, 07/07/00 2,400 2,400
Riverside County, California Community
Facilities District #88-4 (Winchester
Ranch)
4.30%, 07/07/00 18,100 18,100
Riverside County, California COP ACES
Public Facilities Series 1985B
4.35%, 07/07/00 13,500 13,500
Riverside County, California Housing
Authority M/F RB (Tyler Springs
Apartments) Series 1999C
4.25%, 07/07/00 4,750 4,750
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Riverside County, California Housing
Authority M/F RB (Briarwood
Apartment Project) Series 1985C
4.40%, 07/07/00 $ 4,500 $ 4,500
Riverside County, California Housing
Authority M/F RB (Victoria Springs
Apartments Project)
4.37%, 07/07/00 9,600 9,600
Riverside County, California IDA RB
(Calmold Inc. Project)
4.55%, 07/07/00 3,510 3,510
Riverside County, California IDA RB
(Cryogenic Project) Series B
4.40%, 07/07/00 4,100 4,100
Riverside County, California M/F
Housing RB (Ambergate Apartments)
Series 1992A
4.50%, 07/07/00 2,900 2,900
Sacramento County, California COP
(Administration Center & Court
House Project)
4.35%, 07/07/00 8,300 8,300
Sacramento County, California Housing
Authority (Oakland Valley Apartments
Project) Series E
4.37%, 07/07/00 4,000 4,000
Sacramento County, California Housing
Authority (Sun Valley Apartments
Project) Series F
4.37%, 07/07/00 3,750 3,750
Sacramento County, California Housing
Authority M/F Housing RB (Chesapeake
Commons Project) Series 1997A
4.33%, 07/07/00 28,000 28,000
Sacramento County, California Housing
Authority M/F Housing RB (Hidden
Oaks Apartments) Series 1999C
4.35%, 07/07/00 6,300 6,300
Sacramento County, California Special
Facilities (Recessna Aircraft Corp. Project)
4.50%, 07/07/00 3,700 3,700
Salinas, California Apartment
Development M/F Housing RB
(Mariner Villa Project) Series 1985B
4.30%, 07/07/00 2,825 2,825
San Bernardino County, California COP
(Glen Helen Blockbuster Pavilion
Project) Series 1994C
4.50%, 07/07/00 6,540 6,540
</TABLE>
69
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
San Diego, California Housing Authority
M/F Mortgage RB (Creekside Villa)
Series 1999B
4.33%, 07/07/00 $ 6,000 $ 6,000
San Diego, California Housing Authority
M/F Mortgage RB (Canyon Rim
Apartments) Series B
4.40%, 07/07/00 20,000 20,000
San Diego, California Housing Authority
M/F Mortgage RB (Nobel Courts)
Series 1999L
4.20%, 07/07/00 20,500 20,500
San Francisco, California City & County
Redevelopment Agency M/F Housing
RB (3rd & Mission) Series 1999C
4.30%, 07/07/00 28,000 28,000
San Francisco, California City & County
Redevelopment Agency M/F Housing
RB (Fillmore Center Project) Series A1
4.65%, 07/07/00 29,000 29,000
San Francisco, California City & County
Redevelopment Agency M/F Housing
RB (Fillmore Center Project) Series A2
4.70%, 07/07/00 3,750 3,750
San Francisco, California Housing
Authority M/F Housing RB (Magnolia
Plaza Project) Series A
4.50%, 07/07/00 5,500 5,500
San Jose, California M/F Housing RB
(Almeden Lake Apartments Project)
Series 1997A
4.37%, 07/07/00 15,900 15,900
San Jose, California M/F Housing RB
(Carlton Plaza Project) Series A
4.52%, 07/07/00 5,000 5,000
San Jose, California M/F Housing RB
(Seinna at Renaissance Project)
Series 1996A
4.55%, 07/07/00 20,000 20,000
San Jose, California Redevelopment
Agency RB (Merged Area
Redevelopment Project)
4.40%, 07/07/00 6,400 6,400
San Jose, California Redevelopment M/F
Housing (101 San Fernando
Apartments Project) Series A
4.60%, 07/07/00 37,000 37,000
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
San Leandro, California M/F Housing RB
(Carlton Plaza Project) Series A
4.40%, 07/07/00 $ 1,900 $ 1,900
Santa Clara County, California Electric
Authority RB, Series C
3.30%, 07/07/00 20,755 20,755
Santa Clara County, California Hospital
Facility Authority RB (El Camino
Hospital District- Valley Medical Center
Project) Series 1985A
4.80%, 07/07/00 17,600 17,600
Santa Clara County, California M/F
Housing Revenue Refunding Bonds
(Brairwood Apartments Project)
Series 1996B
4.25%, 07/07/00 9,400 9,400
Santa Clara County, California M/F
Housing Revenue Refunding Bonds
(Grove Garden Apartments)
Series 1997A
4.25%, 07/07/00 6,100 6,100
Santa Fe Springs, California IDA RB
3.80%, 07/30/00 4,000 4,000
Santa Paula, California Public Financing
Authority Lease Water System (Aquis
Project)
4.55%, 07/07/00 9,600 9,600
Santa Rosa, California M/F Housing RB
(Quail Run Apartments) Series 1997A
4.40%, 07/07/00 5,005 5,005
Southern California Public Power
Authority RB (Sub-Southern
Transmission Project) Series 2000A
4.25%, 07/07/00 13,300 13,300
Southern California Public Power
Authority Revenue Refunding Bonds
(Palos Verdes Project) Series 1996B
4.30%, 07/07/00 6,770 6,770
Stockton, California Community Facility
District RB
4.40%, 07/07/00 2,085 2,085
Tulare Porterville, California School
Financing Authority
5.05%, 07/07/00 6,765 6,765
Union City, California M/F Housing RB
(Greenhaven Apartments Project)
Series 1997A
4.25%, 07/07/00 10,975 10,975
</TABLE>
70
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Vallecitos, California Water District
(Twin Oaks Reservoir Project)
4.25%, 07/07/00 $ 14,865 $ 14,865
Victor Valley, California Community
College District COP
4.50%, 07/07/00 53,450 53,450
Vista, California IDA IDRB (Desalination
System Inc. Project)
4.50%, 07/07/00 6,950 6,950
West Basin, California Municipal Water
District Revenue COP (Phase ll Recycled
Water Project) Series 1997B
4.25%, 07/07/00 18,700 18,700
West Sacramento, California Special Tax
RB (Community Facilities District #6)
4.40%, 07/07/00 4,250 4,250
Western Riverside County, California
Regional Wastewater Authority RB
(Regulatory Wastewater Treatment)
4.15%, 07/01/00 1,950 1,950
Westminster, California Agency Tax
Allocation (Community Redevelopment
Project)
4.45%, 07/07/00 9,710 9,710
Westminster, California COP (Civic
Center Project) Series A
4.45%, 07/07/00 4,175 4,175
----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $2,322,823) 2,322,823
----------
TAX-EXEMPT COMMERCIAL PAPER -- 23.0% (c)
CALIFORNIA -- 19.0%
California Community College
Financing Authority TECP Series B
3.87%, 07/28/00 10,000 10,001
California Pollution Control Financing
Authority RB TECP (Southern
California Edison) Series 1985A
3.40%, 08/01/00 4,500 4,500
3.95%, 08/08/00 5,400 5,400
California Pollution Control Financing
Authority Solid Waste Disposal RB TECP
(Thermal Energy Development)
Series 1988A (f)
3.95%, 08/16/00 15,070 15,070
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
California State Department of Water
Resources TECP (f)
3.30%, 07/06/00 $ 35,400 $ 35,400
3.70%, 07/10/00 23,000 23,000
3.75%, 07/10/00 11,500 11,500
3.95%, 07/12/00 26,700 26,700
3.60%, 07/14/00 40,000 40,000
4.10%, 08/10/00 34,540 34,540
4.15%, 08/11/00 4,700 4,700
3.85%, 09/06/00 7,000 7,000
California State GO TECP (f)
3.30%, 07/05/00 12,500 12,500
3.35%, 07/10/00 50,000 50,000
3.35%, 07/12/00 5,000 5,000
4.05%, 08/01/00 77,000 77,000
3.90%, 09/01/00 12,000 12,000
Chino Basin, California Regulatory
Financing Authority TECP
4.18%, 08/23/00 9,000 8,997
East Bay, California Municipal Utilities
District TECP
3.90%, 08/08/00 19,800 19,800
Long Beach, California Harbor TECP
Series 1994A (f)
3.55%, 07/11/00 44,850 44,850
Los Angeles County, California Capital
Asset Leasing Corp. Revenue TECP
3.75%, 07/25/00 23,700 23,700
Los Angeles County, California
Metropolitian Transportation TECP
3.45%, 09/13/00 12,105 12,105
Los Angeles, California Metropolitian
Transportation TECP (f)
3.45%, 07/06/00 10,000 10,000
Los Angeles, California Waste Water
System TECP
3.40%, 08/31/00 34,500 34,500
Los Angeles, California Wastewater
System TECP
3.90%, 08/31/00 13,000 13,000
4.10%, 09/01/00 26,500 26,500
3.90%, 10/11/00 12,600 12,600
Metropolitian Water District of Southern
California TECP
3.40%, 08/10/00 7,300 7,300
3.80%, 09/07/00 9,400 9,400
</TABLE>
71
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Oakland Port, California ACES TECP (f)
4.10%, 09/07/00 $ 25,490 $ 25,490
3.45%, 09/13/00 30,000 30,000
Orange County, California Local
Transportation Authority TECP
3.85%, 09/12/00 40,000 40,000
Sacramento, California Municipal
Utilities District TECP
4.00%, 07/03/00 33,950 33,950
3.85%, 08/14/00 20,950 20,950
San Diego County, California
Transportation TECP
3.45%, 07/11/00 12,400 12,400
San Francisco, California Bay Area
Rapid Transportation TECP
3.70%, 07/10/00 44,000 44,000
San Francisco, California City & County
TECP
3.40%, 07/18/00 16,800 16,800
3.50%, 08/01/00 5,910 6,910
3.85%, 09/11/00 23,655 23,655
3.85%, 09/12/00 18,000 18,000
3.50%, 10/02/00 3,050 3,050
3.80%, 10/18/00 14,085 14,085
San Joaquin Hills, California
Transportation Authority TECP
3.80%, 07/25/00 32,000 32,000
University of California Board of
Regents TECP
3.90%, 08/01/00 25,000 25,000
3.90%, 08/16/00 15,400 15,400
3.45%, 08/17/00 10,555 10,555
3.95%, 08/17/00 6,000 6,000
4.10%, 08/23/00 4,600 4,600
3.40%, 09/12/00 20,000 20,000
3.40%, 09/22/00 25,000 25,000
3.90%, 10/11/00 5,000 5,000
----------
1,029,908
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
PUERTO RICO -- 4.0%
Puerto Rico Government Development
Bank TECP
3.69%, 07/24/00 $ 30,500 $ 30,500
3.50%, 07/26/00 45,114 45,114
3.60%, 07/26/00 31,866 31,866
3.60%, 08/01/00 15,000 15,000
3.75%, 08/04/00 10,555 10,555
3.90%, 08/09/00 23,000 23,000
3.75%, 08/15/00 10,000 10,000
3.70%, 08/17/00 49,890 49,890
----------
215,925
----------
TOTAL TAX-EXEMPT
COMMERCIAL PAPER
(Cost $1,245,833) 1,245,833
----------
TAX & REVENUE ANTICIPATION NOTES -- 16.5% (c)
CALIFORNIA -- 13.7%
Alameda County, California COP TRAN
3.32%, 07/07/00 28,000 28,003
California Community College Financing
Authority TRAN Series A (d)
4.24%, 06/29/01 35,705 35,961
California School Cash Reserve Program
Authority Pooled TRAN Series 1999A (f)
3.11%, 07/03/00 63,200 63,202
California Statewide Community
Development Authority RB TRAN
Series 1999C-2
3.99%, 09/29/00 55,975 56,015
California Statewide Community
Development Authority RB TRAN
Series A (d)
4.27%, 06/29/01 23,500 23,717
Fairfield, California TRAN
3.98%, 09/28/00 2,500 2,503
Folsom Cordova, California Unified
School Districts TRAN
3.93%, 03/01/01 3,800 3,814
Fremont, California TRAN (d)
4.27%, 07/10/01 9,000 9,063
Los Angeles County, California Schools
Pooled Financing Program Participation
Certificates Pooled TRAN Series A (d)
4.27%, 07/02/01 41,250 41,538
</TABLE>
72
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Los Angeles County, California TRAN
Series A (d)
4.15%, 06/29/01 $100,000 $ 100,807
Marin County, California TRAN (d)
4.18%, 06/29/01 33,000 33,256
Mt. Diablo, California Unified School
District TRAN
3.77%, 01/19/01 9,600 9,640
San Bernardino County, California
TRAN
3.68%, 09/29/00 63,625 63,669
San Diego County & School District
TRAN (d)
4.22%, 06/29/01 48,715 49,074
San Diego County, California TRAN (f)
4.25%, 09/29/00 83,850 84,169
San Diego, California Area Local
Government COP TRAN Series 1999B
4.00%, 07/28/00 12,000 12,005
San Diego, California Unified School
District TRAN Series 1999A
3.73%, 09/29/00 11,110 11,124
San Joaquin County, California TRAN
3.72%, 01/01/01 30,420 30,497
Santa Cruz County, California TRAN
3.48%, 10/06/00 3,860 3,870
Santa Cruz County, California TRAN (d)
4.16%, 07/05/01 26,490 26,703
South Coast, California Local Education
Agency Pooled TRAN (d)
4.23%, 07/03/01 50,000 50,369
Val Verde, California Unified School
District TRAN
3.50%, 10/31/00 2,900 2,907
----------
741,906
----------
PUERTO RICO -- 2.8%
Puerto Rico Commonwealth TRAN
3.75%, 07/30/00 104,100 104,161
3.94%, 07/30/00 25,000 25,010
4.43%, 07/30/00 26,400 26,400
----------
155,571
----------
TOTAL TAX & REVENUE
ANTICIPATION NOTES
(Cost $897,477) 897,477
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
VARIABLE RATE TENDER OPTION BONDS -- 10.2% (a)(b)(f)
CALIFORNIA -- 8.7%
Big Bear Lake, California Water Revenue
TOBP (PA- 597)
4.42%, 07/07/00 $ 8,445 $ 8,445
California HFA Home Mortgage RB TOB
4.42%, 07/07/00 5,425 5,425
California HFA Revenue TOB Series 1997E
4.42%, 07/07/00 9,695 9,695
California HFA Revenue TOB Series R
4.42%, 07/07/00 9,995 9,995
California State GO TOB Series 194
4.37%, 07/07/00 4,120 4,120
California State GO TOB Series 195
4.37%, 07/07/00 4,000 4,000
California State GO TOB Series 1999M
4.59%, 07/07/00 46,000 46,000
California State GO TOB Series 2000XX
(Merlot)
4.59%, 07/07/00 7,300 7,300
California State GO TOB Series 55
4.37%, 07/07/00 11,930 11,930
California State GO TOBP (PA-676)
4.27%, 07/07/00 19,495 19,495
California State GO TOBP (PT-1070)
4.42%, 07/07/00 8,565 8,565
California State GO TOBP (PT-1236)
4.27%, 07/07/00 15,800 15,800
California State GO TOPB (PT-1072)
4.42%, 07/07/00 9,565 9,565
California State GO TOPB (PT-153)
4.47%, 07/07/00 4,995 4,995
California State Government Eagle TOB
Series 2000
4.32%, 07/07/00 8,000 8,000
4.42%, 07/07/00 9,900 9,900
California State HFA RB TOB (PA-540R)
4.42%, 07/07/00 4,995 4,995
California State Public Works Board
Lease Revenue TOB Series 1999F
4.95%, 07/07/00 9,985 9,985
California State Putters Series 132 TOB
4.35%, 07/07/00 46,985 46,985
California Statewide Community
Developement Authority COP
Series 1999E TOB
4.59%, 07/07/00 5,000 5,000
</TABLE>
73
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Foothill-De Anza California Community
College District Merlot Series 2000YY
4.59%, 07/07/00 $ 10,000 $ 10,000
Los Angeles County, California
Metropolitan Transit Authority TOB
4.59%, 07/07/00 23,830 23,830
Los Angeles, California Department of
Water & Power Revenue TOB Series L
4.59%, 07/07/00 20,390 20,390
Los Angeles, California TOB (Dwap
Electric Power Plant) Series 1
4.59%, 07/07/00 19,995 19,995
Los Angeles, California TOB (PA-554)
4.42%, 07/07/00 3,150 3,150
Metropolitan Water District of Southern
California Water Works Revenue TOB
(PA-546)
4.42%, 07/07/00 4,750 4,750
Metropolitan Water District of Southern
California Water Works Revenue TOB
Series 154
4.37%, 07/07/00 10,000 10,000
Metropolitan Water District of Southern
California Water Works Revenue TOB
Series 1999O
4.59%, 07/07/00 16,000 16,000
Oakland, California Revenue TOB
(180 Harrison Foundation Project)
Series 2000M
4.59%, 07/07/00 3,000 3,000
Oakland Port, California Merlot
(First Union) TOB Series 2000JJ
4.64%, 07/07/00 15,000 15,000
Palo Alto, California Unified School
District (Merlot Project) Series R
4.59%, 07/07/00 6,000 6,000
Port of Oakland, California TOB (PA-663)
4.47%, 07/07/00 6,310 6,310
Sacramento County, California
Sanitation District Financing
Authority TOB (PA-694)
4.42%, 07/07/00 6,090 6,090
San Francisco, California City & County
Airports Commission International
Airports Revenue TOB Series 1998-31
4.47%, 07/07/00 14,350 14,350
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
San Francisco, California City & County
Airports Commission International
Airports Revenue TOBP (PA-662)
4.47%, 07/07/00 $ 12,670 $ 12,670
State of California, Merlot GO
Series 2000A
4.64%, 07/07/00 18,065 18,065
University of California Board of
Regents TOBP (PT-1057)
4.42%, 07/07/00 34,505 34,505
----------
474,300
----------
PUERTO RICO -- 1.5%
Puerto Rico Commonwealth Highway &
Transportation Authority RB TOB
(PA-494) Series A
4.42%, 07/07/00 1,875 1,875
Puerto Rico Commonwealth Highway &
Transportation Authority TOB
4.42%, 07/07/00 18,435 18,435
Puerto Rico Commonwealth
Infrastructure Financing Authority TOB
(PA-498)
4.42%, 07/07/00 3,930 3,930
Puerto Rico Commonwealth
Infrastructure Financing Authority TOB
(PT-1086)
4.42%, 07/07/00 25,650 25,650
Puerto Rico Commonwealth
Infrastructure Financing Authority TOB
4.42%, 07/07/00 24,000 24,000
Puerto Rico Commonwealth TOBP
(PA-652)
4.42%, 07/07/00 8,730 8,730
----------
82,620
----------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $556,920) 556,920
----------
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
REVENUE BONDS -- 8.8% (c)
CALIFORNIA -- 8.6%
California Education Facilities Authority
RB (San Francisco Conservatory)
4.40%, 07/07/00 $ 3,000 $ 3,000
California Health Facilities Financing
Authority RB (Kaiser Permanente)
Series 1990A
3.35%, 12/01/00 35,000 36,141
California HFA Home Mortgage RB
Series 1994G
4.01%, 08/01/00 410 411
California HFA Home Mortgage RB
Series 2000I
4.05%, 06/01/01 20,000 20,000
California HFA RB (Children's Hospital
L.A.) Series 1991A
4.03%, 06/01/01 3,330 3,485
California HFA S/F Mortgage RB
Series 1999E
3.45%, 08/01/00 47,260 47,260
California School Cash Reserve Program
Authority Pooled RB Series A (d)(f)
4.27%, 07/03/01 250,000 252,347
California State Public Works Board
Lease RB (Regents of The University
of California)
3.77%, 09/01/00 20,690 21,211
California State Public Works Board
Lease RB (California Community
Colleges) Series 1997A
3.85%, 04/01/01 4,230 4,265
California State Public Works Board
Lease Revenue Refunding Bonds
(Department of Corrections State
Prisons) Series 1993A (f)
3.89%, 12/01/00 1,865 1,871
California State Public Works Board
Lease Revenue Refunding Bonds
(Department of Corrections)
Series 1997C
3.72%, 09/01/00 11,970 11,990
Central Valley, California Financing
Authoriy RB (Carson Ice Cogeneration
Project) (f)
3.33%, 07/01/00 19,425 19,425
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Contra Costa County, California
Transportation Authority Sales Tax RB
Series 1995A (f)
3.64%, 03/01/01 $ 1,000 $ 1,007
Kings River, California Conservation
District RB (Pine Flat Power Project)
Series 1992D
3.58%, 01/01/01 4,960 5,007
Long Beach, California Harbor RB
3.90%, 05/15/01 4,490 4,513
Los Angeles County, California Public
Water Works Financing Authority RB
(Regal Park & Open Space District
Project)
3.58%, 10/01/00 5,635 5,655
Los Angeles County, California Public
Works Financing Authority Lease
Revenue Refunding Bonds (Master
Refund Project) Series 1997A
3.62%, 03/01/01 7,000 7,063
Los Angeles, California Municipal
Improvement Corp. RB (Sanitation
Equipment Charge Project)
Series 1999A
3.58%, 02/01/01 3,325 3,333
Los Angeles, California, Wastewater
System RB Series D
3.66%, 12/01/00 1,805 1,863
Northern California Power Agency RB
(Combustion Turbine #1-A) (f)
3.40%, 08/15/00 1,535 1,536
Northern California Power Agency
Revenue Refunding Bonds
(Geothermal Project No. 3)
Series 1996B (f)
3.68%, 07/01/00 3,500 3,500
Orange County, California Airport RB (f)
3.45%, 07/01/00 2,200 2,200
San Francisco, California Port
Commission Revenue Refunding Bonds
3.97%, 07/01/00 1,500 1,500
Southern California Public Power
Authority RB (Palo Verde Project)
Series 1999A (f)
3.35%, 07/01/00 3,300 3,300
Southern California Public Power
Authority RB (San Juan Unit 3 Project)
Series A (f)
3.35%, 07/01/00 2,465 2,465
</TABLE>
75
<PAGE>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
Southern California Public Power
Authority Revenue Refunding Bonds
Series 1989
3.77%, 07/01/00 $ 4,770 $ 4,770
----------
469,118
----------
PUERTO RICO -- 0.2% (f)
Puerto Rico Commonwealth Highway
Authority RB Series 1990Q
3.50%, 07/01/00 3,000 3,060
3.75%, 07/01/00 6,500 6,630
----------
9,690
----------
TOTAL REVENUE BONDS
(Cost $478,808) 478,808
----------
FIXED RATE TENDER OPTION BONDS -- 0.9% (c)(e)(f)
CALIFORNIA -- 0.7%
California State TOB (PT-1170)
3.45%, 07/20/00 4,785 4,785
California State Public Works Board
Lease Revenue TOB Series 2000D
4.15%, 07/07/00 23,970 23,970
Los Angeles, California Unified School
District TOB (PT-1178)
3.50%, 08/10/00 9,635 9,635
----------
38,390
----------
PUERTO RICO -- 0.2%
Puerto Rico Housing Finance
Corporation RB TOB Series J
3.70%, 04/12/01 9,900 9,900
----------
TOTAL FIXED RATE TENDER
OPTION BONDS
(Cost $48,290) 48,290
----------
BOND ANTICIPATION NOTES -- 0.8% (c)
Fresno, California Unified School
District BAN
3.74%, 02/01/01 45,000 45,194
----------
TOTAL BOND ANTICIPATION NOTES
(Cost $45,194) 45,194
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
CERTIFICATES OF PARTICIPATION -- 0.8% (c)
California Desert Hospital District
Revenue COP
3.64%, 07/01/00 $ 5,500 $ 5,610
California Statewide Community
Development Authority COP (St. Joseph
Health System Obligated Group)
3.83%, 07/01/00 2,035 2,035
Los Angeles County, California COP
(Correctional Facilities Project)
4.00%, 09/01/00 13,000 13,319
Los Angeles County, California Schools
Pooled Financing Program COP
Series 1999B (f)
3.70%, 09/29/00 17,250 17,256
Los Angeles, California Convention &
Exhibit Center Authority COP (f)
3.35%, 08/15/00 3,150 3,227
----------
TOTAL CERTIFICATES OF PARTICIPATION
(Cost $41,447) 41,447
----------
GENERAL OBLIGATIONS -- 0.4% (c)
CALIFORNIA -- 0.3%
California State GO
3.35%, 08/01/00 8,300 8,308
3.57%, 02/01/01 10,100 10,125
Fontana, California Unified School
District GO Series A (f)
3.55%, 07/01/00 500 500
----------
18,933
----------
PUERTO RICO -- 0.1%
Commonwealth of Puerto Rico GO
3.62%, 07/01/00 3,925 4,003
----------
TOTAL GENERAL OBLIGATIONS
(Cost $22,936) 22,936
----------
ZERO COUPON BONDS -- 0.2% (c)
San Joaquin Hills, California
Transportation Corridor Agency
Toll Road RB
3.90%, 01/01/01 9,100 8,926
----------
TOTAL ZERO COUPON BONDS
(Cost $8,926) 8,926
----------
</TABLE>
76
<PAGE>
<TABLE>
<CAPTION>
Par Value
-------- ----------
<S> <C> <C>
MANDATORY PUT BONDS -- 0.1% (c)
Vallejo City, California Unified School
District COP (Various Capital
Improvement Financing Projects)
Series 1999E (f)
4.30%, 07/07/00 $ 6,000 $ 6,000
----------
TOTAL MANDATORY PUT BONDS
(Cost $6,000) 6,000
----------
TAX ALLOCATION BONDS -- 0.1% c)
San Jose, California Redevelopment
Agency Tax Allocation (Merged Area
Project) Series 1992A (f)
3.50%, 08/01/00 1,650 1,653
San Jose, California Redevelopment
Agency Tax Allocation (Merged Area
Redevelopement Project) Series 1999 (f)
3.80%, 08/01/00 1,240 1,241
Signal Hill, California Redevelopment
Agency Tax Allocation Bonds
Series 1990B
3.64%, 10/01/00 2,000 2,019
----------
TOTAL TAX ALLOCATION BONDS
(Cost $4,913) 4,913
----------
OTHER INVESTMENT COMPANIES -- 0.0% (g)
Provident Institutional Funds-
California Money Fund Portfolio
3.53% 1,464 1,464
----------
TOTAL OTHER INVESTMENT COMPANIES
(Cost $1,464) 1,464
----------
TOTAL INVESTMENTS -- 104.6%
(Cost $5,681,031) 5,681,031
----------
OTHER ASSETS AND LIABILITIES -- (4.6%)
Other assets 458,034
Liabilities (706,607)
----------
(248,573)
----------
TOTAL NET ASSETS -- 100.0% $5,432,458
==========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
77
<PAGE>
SCHWAB NEW YORK MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS -- 27.8% (b)f)
Albany, New York IDRB (Newkirk
Products Project) Series 1995A
4.80%, 07/07/00 $ 1,000 $ 1,000
Babylon, New York IDA Resource
Recovery (Ogden Martin Project)
Series 1998
4.45%, 07/07/00 5,800 5,800
Duchess County, New York IDA IDRB
(Mechtroncis Corp. Project) Series 1998
4.85%, 07/07/00 3,625 3,625
Dutchess County, New York IDA (Trinity
Pawling School Corp. Project)
4.65%, 07/07/00 3,400 3,400
Erie County, New York IDA (Episcopal
Life Care Facilities Project)
4.65%, 07/07/00 3,095 3,095
Herkimer County, New York IDA Civic
Facilities RB (Templeton Foundation
Project)
4.85%, 07/07/00 2,200 2,200
Monroe County, New York IDRB (ENBI
Corp. Lease Rent Project) Series 1988
4.70%, 07/07/00 2,000 2,000
New York City, New York Housing
Development Corp. M/F Housing RB
(100 Jane Street Development Project)
Series A
4.65%, 07/07/00 6,525 6,525
New York City, New York Housing
Development Corp. M/F Housing RB
(One Columbus Project) Series A
4.65%, 07/07/00 5,600 5,600
New York City, New York Housing
Development Corp. M/F Housing RB
(Related Broadway Development)
Series A
4.70%, 07/07/00 5,000 5,000
New York City, New York IDA Special
Facility RB (Korean Airlines Co. Project)
Series 1997A
4.70%, 07/07/00 4,000 4,000
New York City, New York M/F Rental
Housing RB (Tribeca Tower Project)
Series 1997A
4.45%, 07/07/00 28,200 28,200
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
New York City, New York Municipal Water
Finance Authority Water & Sewer
System RB Series 1994G
4.40%, 07/01/00 $ 1,500 $ 1,500
New York City, New York Transit Finance
Authority RB Series 1998A-1
4.65%, 07/07/00 17,520 17,520
New York State Dormitory Authority RB
(New York Foundling Charitable Project)
4.80%, 07/07/00 800 800
New York State Economic Development
Authority
4.35%, 07/07/00 4,200 4,200
New York State Energy Research &
Development Authority Pollution
Control Revenue Refunding Bonds
(Orange & Rockland Utilities, Inc.
Project) Series 1994A
4.45%, 07/07/00 6,500 6,500
New York State HFA Housing RB
(101 West End Avenue Project)
Series 1999A
4.70%, 07/07/00 7,800 7,800
New York State HFA Housing RB
(345 East 94th Street Housing Project)
4.70%, 07/07/00 17,200 17,200
New York State HFA Housing RB
(Chelsea Arms Housing Project)
Series 1998A
4.45%, 07/07/00 14,000 14,000
New York State HFA Housing RB
(East 84th Street Project) Series 1995A
4.50%, 07/07/00 1,500 1,500
New York State HFA Housing RB
(Mount Sinai School Of Medicine
Project) Series 1984A
4.55%, 07/07/00 4,280 4,280
New York State HFA Housing RB
(Union Square South Housing Project)
4.40%, 07/07/00 11,500 11,500
New York State HFA M/F Housing RB
Series 1999A
4.65%, 07/07/00 15,500 15,500
New York State HFA RB (150 East 44th
Street Project) Series 2000A
4.70%, 07/07/00 27,500 27,500
</TABLE>
78
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
New York State HFA RB (70 Battery Place
Project) Series 1999A
4.65%, 07/07/00 $ 8,500 $ 8,500
New York State HFA RB (Normandie
Court Project) Series 1991
4.45%, 07/07/00 1,900 1,900
New York State HFA RB (Tribeca
Landing) Series 1997A
4.45%, 07/07/00 16,500 16,500
New York State HFA RB Series 1997A
4.45%, 07/07/00 20,300 20,300
New York State Local Government
Assistance Corporation Series 1995G
4.40%, 07/07/00 6,000 6,000
New York State Medical Care Facilities
Financing Agency RB (Pooled
Equipment Loan Program 1)
4.90%, 07/07/00 2,900 2,900
Newburgh, New York IDA IDRB (Bourne
and Kenney Project) Series 1999B
4.80%, 07/07/00 4,000 4,000
Niagara County, New York IDRB
(Allegheny Ludlum Steel Co. Project)
Series 1984
4.40%, 07/07/00 8,400 8,400
Schenectady, New York IDRB (Fortitech
Holding Corp. Project) Series 1995A
4.85%, 07/07/00 1,100 1,100
St. Lawrence County, New York IDRB
Environmental Improvement (Reynolds
Metals Project)
4.90%, 07/07/00 4,000 4,000
Town of Islip, New York IDRB (Magnum
Realty Creative Bath Products Project)
4.80%, 07/07/00 1,310 1,310
Yonkers, New York IDRB Civic Facilities
(Consumers Union Facility Project)
Series 1989
4.65%, 07/07/00 1,500 1,500
Yonkers, New York IDRB Civic Facilities
(Consumers Union Facility Project)
Series 1991
4.65%, 07/07/00 700 700
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Yonkers, New York IDRB Civic Facilities
(Consumers Union Facility Project)
Series 1994
4.65%, 07/07/00 $ 1,900 $ 1,900
----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $279,255) 279,255
----------
VARIABLE RATE TENDER OPTION BONDS -- 18.9% (a)(c)(f)
Long Island, New York Power Authority
Electric System RB TOBP (PA-522)
4.85%, 07/07/00 21,000 21,000
New York City, New York GO TOBP
(CoreStates Merlot Program Project)
Series 1997C
4.84%, 07/07/00 26,000 26,000
New York City, New York Health and
Hospital Corp. RB TOBP (PA-555)
4.82%, 07/07/00 17,620 17,620
New York City, New York Municipal
Financing Authority Water & Sewer
System RB TOB
4.82%, 07/07/00 4,995 4,995
New York City, New York Municipal
Acceptance Corp. TOB
4.82%, 07/07/00 12,445 12,445
New York City, New York Municipal
Water Finance Authority Water &
Sewer Systems Revenue TOBP (PA-523)
Series 1999B
4.82%, 07/07/00 18,235 18,235
New York City, New York Transitional
Finance Authority Revenue TOB
Series 283
3.82%, 07/07/00 3,700 3,700
New York City, New York Transitional
Finance Authority TOB
4.84%, 07/07/00 21,720 21,720
New York Metropolitan Transportation
Authority TOBP (PA-426)
4.82%, 07/07/00 5,695 5,695
New York State Dormitory Authority RB
(Montefiore Medical Center Project)
TOB Series 156
4.82%, 07/07/00 1,525 1,525
New York State Dormitory Authority
TOBP (PA-425)
4.82%, 07/07/00 9,130 9,130
</TABLE>
79
<PAGE>
SCHWAB NEW YORK MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
New York State Dormitory Authority
TOBP
4.84%, 07/07/00 $12,375 $ 12,375
New York State Energy Research &
Development Authority (Eagle Trust)
TOB Series 1994A
4.84%, 07/07/00 14,850 14,850
New York State Environmental Pollution
Control RB TOB (96-C3202)
Series 1994D
4.84%, 07/07/00 17,050 17,050
New York State Medical Care Facility
TOBP (PT-154)
4.82%, 07/07/00 3,175 3,175
----------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $189,515) 189,515
----------
REVENUE BONDS -- 15.9% (c)
Metropolitan Transportation Authority,
New York RB (Service Contract
Transportation Facilities Project)
Series 1990-3
3.88%, 07/01/00 8,435 8,435
New York City, New York Transit Cultural
Resources RB (American Museum of
Natural History Project) Series 1999B (f)
3.70%, 07/01/00 6,500 6,500
4.50%, 07/01/01 1,500 1,500
New York State Dormitory Authority RB
(City University System) Series 1987A
6.03%, 07/01/00 1,075 1,086
New York State Dormitory Authority RB
(City University System) Series 1990A
3.86%, 07/01/00 5,500 5,610
New York State Dormitory Authority RB
(City University Sytem) Series F (f)
3.97%, 07/01/00 13,200 13,464
New York State Dormitory Authority RB
(New York Methodist Hospital
Project) (f)
3.78%, 07/01/00 3,000 3,000
New York State Dormitory Authority RB
(University of New York) Series 1990F (f)
3.97%, 07/01/00 9,450 9,639
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
New York State Dormitory Authority RB
(Vassar College)
4.15%, 07/01/00 $ 2,190 $ 2,234
New York State Energy Research &
Development Authority Pollution
Control RB (New York State Electric &
Gas Project) Series B (f)
3.70%, 10/15/00 5,615 5,615
New York State HFA RB
4.16%, 11/01/00 41,020 42,309
New York State Local Assistance Corp. RB
Series 1991A
4.65%, 04/01/01 1,000 1,037
New York State Local Assistance Corp. RB
Series 1991C
4.19%, 04/01/01 11,630 12,092
New York State Medical Care Facilities
Finance Agency Hospital Insured
Mortgage RB Series 1990A (f)
4.45%, 08/15/00 11,525 11,799
New York State Thruway Authority
Highway & Bridge Authority RB
Series 2000A
4.24%, 04/01/01 15,870 15,929
New York State Thruway Authority
Service Contract RB (Local Highway &
Bridge)
4.18%, 01/01/01 13,760 13,886
New York State Urban Development
Corp. (Correctional Facilities Service
Contract) RB Series 1998B
4.30%, 01/01/01 3,500 3,512
New York Triborough Bridge & Tunnel
Authority RB Series 1991T
4.03%, 01/01/01 1,810 1,827
----------
TOTAL REVENUE BONDS
(Cost $159,474) 159,474
----------
</TABLE>
80
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
TAX EXEMPT COMMERCIAL PAPER -- 15.4% (c)
NEW YORK -- 14.6%
New York City, New York GO TECP
Series 1994H-3
4.30%, 07/11/00 $12,000 $ 12,000
New York State Environmental Quality
TECP
3.95%, 07/13/00 7,400 7,400
4.00%, 08/02/00 9,000 9,000
4.15%, 08/09/00 35,000 35,000
New York State GO BAN TECP Series W
4.25%, 08/08/00 12,500 12,500
New York State Long Island Power
Authority Electrical Systems TECP
Series 3
4.35%, 08/08/00 26,800 26,800
New York State Power Authority TECP
Series 2
4.15%, 08/08/00 20,200 20,200
4.25%, 08/08/00 18,600 18,600
4.15%, 08/10/00 5,700 5,700
----------
147,200
----------
PUERTO RICO -- 0.8%
Puerto Rico Goverment Development
Bank TECP
4.40%, 08/23/00 7,618 7,618
----------
TOTAL TAX EXEMPT COMMERCIAL PAPER
(Cost $154,818) 154,818
----------
BOND ANTICIPATION NOTES -- 6.6% (c)
Bronxville, New York Unified Free School
District BAN Series 1999
3.85%, 10/30/00 9,400 9,412
Campbell-Savona, New York Central
School District BAN
3.90%, 10/27/00 4,000 4,007
Chautauqua County, New York BAN
Series 1999
3.50%, 07/14/00 8,000 8,001
3.93%, 12/08/00 5,600 5,608
Gowanda, New York Central School
District BAN
3.85%, 10/27/00 9,950 9,966
Islip, New York BAN
4.43%, 06/22/01 6,550 6,585
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
Ithaca, New York BAN
3.98%, 01/19/01 $12,977 $ 13,013
Livingston County, New York BAN
3.65%, 08/18/00 4,370 4,372
New Rochelle, New York BAN Series A
3.70%, 10/13/00 5,235 5,239
----------
TOTAL BOND ANTICIPATION NOTES
(Cost $66,203) 66,203
----------
FIXED RATE TENDER OPTION BONDS -- 5.5% (c)(e)(f)
New York Local Government Assistance
Corp. TOBP (PT-1055) Series 1997B
4.55%, 07/07/00 9,615 9,615
New York State Mortgage Agency RB
(Homewowners Mortgage) TOB
Series 77-A
4.75%, 07/26/00 15,365 15,365
New York State Mortgage Agency TOB
Series 1999F
4.75%, 07/26/00 24,795 24,795
New York State Mortgage Agency Revenue
TOBP (PT-260)
4.60%, 11/30/00 5,940 5,940
----------
TOTAL FIXED RATE TENDER OPTION BONDS
(Cost $55,715) 55,715
----------
GENERAL OBLIGATIONS -- 3.4% (c)
Nassau County, New York General
Improvement GO Series 1995Q (f)
3.79%, 08/01/00 2,705 2,708
Nassau County, New York General
Improvement GO Series 1997X
3.89%, 11/01/00 3,000 3,011
Nassau County, New York GO
Series 1999C (f)
4.20%, 01/01/01 2,250 2,260
Nassau County, New York Sewer Districts
GO Series 1990J
4.10%, 10/15/00 1,000 1,014
New York City, New York GO Series 1990B
4.40%, 06/01/01 5,170 5,363
New York City, New York GO
Series 1990H (f)
3.70%, 08/01/00 1,500 1,505
New York City, New York GO
Series 1996G
4.20%, 02/01/01 10,155 10,224
</TABLE>
81
<PAGE>
SCHWAB NEW YORK MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
New York State GO Series 1998F
3.95%, 09/15/00 $ 1,600 $ 1,602
New York State GO Series 2000B
4.19%, 08/15/00 4,000 4,011
Suffolk County, New York Public
Improvement GO Series 1998C (f)
3.75%, 10/15/00 2,115 2,117
----------
TOTAL GENERAL OBLIGATIONS
(Cost $33,815) 33,815
----------
TAX ANTICIPATION NOTES -- 2.7% (c)
Jericho, New York Union Free School
District TAN
4.47%, 06/28/01 6,500 6,533
Nassau County, New York TAN
Series 1999B
4.00%, 08/31/00 12,000 12,014
Smithtown, New York Central School
District TAN
4.37%, 06/26/01 9,000 9,054
----------
TOTAL TAX ANTICIPATION NOTES
(Cost $27,601) 27,601
----------
MANDATORY PUT BONDS -- 2.1% c)
New York State GO Series A
4.40%, 02/08/01 21,000 21,000
----------
TOTAL MANDATORY PUT BONDS
(Cost $21,000) 21,000
----------
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
REVENUE ANTICIPATION NOTES -- 0.7% (c)
Nassau County, New York RAN Series D
4.48%, 04/12/01 $ 7,100 $ 7,181
----------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $7,181) 7,181
----------
OTHER INVESTMENT COMPANIES -- 0.0% (g)
Provident Institutional Funds-
New York Money Fund Portfolio
3.88% 341 341
----------
TOTAL OTHER INVESTMENT COMPANIES
(Cost $341) 341
----------
TOTAL INVESTMENTS -- 99.0%
(Cost $994,918) 994,918
----------
OTHER ASSETS ANDLIABILITIES -- 1.0%
Other assets 13,822
Liabilities (3,924)
----------
9,898
----------
TOTAL NET ASSETS -- 100.0% $1,004,816
==========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
82
<PAGE>
SCHWAB NEW JERSEY MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS -- 37.2% (b)(f)
Essex County, New Jersey Public
Improvement Authority RB (County
Asset Sale Project) Series 1995
4.50%, 07/07/00 $ 7,400 $ 7,400
Monmouth County, New Jersey
Improvement Authority Pooled
Government Loan Progam
4.50%, 07/07/00 7,300 7,300
New Jersey Economic Development
Authority Natural Gas Facilities RB
(Nui Corp. Project) Series 1996A
4.35%, 07/01/00 400 400
New Jersey Economic Development
Authority Natural Gas Facilities
Revenue Refunding Bonds (New Jersey
Natural Gas Co.) Series 1998B
4.50%, 07/07/00 1,000 1,000
New Jersey Economic Development
Authority RB (500 International
Partners Project)
4.75%, 07/07/00 5,800 5,800
New Jersey Economic Development
Authority RB (Catholic Community
Services Project)
4.55%, 07/07/00 6,850 6,850
New Jersey Economic Development
Authority RB (Graphic Management,
Inc. Project)
4.55%, 07/07/00 5,975 5,975
New Jersey Economic Development
Authority RB (Hamilton Industrial
Development Project) Series 1998
4.70%, 07/07/00 6,965 6,965
New Jersey Economic Development
Authority RB (Jewish Home Rockleigh
Project) Series 1998A
4.55%, 07/07/00 5,000 5,000
New Jersey Economic Development
Authority RB (Job Haines Home Project)
4.55%, 07/07/00 4,000 4,000
New Jersey Economic Development
Authority RB (Natural Gas Co. Project)
4.70%, 07/07/00 4,000 4,000
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- ----------
<S> <C> <C>
New Jersey Economic Development
Authority RB (New Jersey Foreign
Trade Venture Project) Series 1998DN
4.45%, 07/01/00 $ 2,995 $ 2,995
New Jersey Economic Development
Authority RB (St. James Prep & Social
Service Project) Series 1998
4.60%, 07/07/00 1,890 1,890
New Jersey Economic Development
Authority RB (Toys R Us Inc. Project)
Series 1984
4.45%, 07/30/00 3,000 3,000
New Jersey Economic Development
Authority RB (Wechsler Coffee Corp.
Project) Series 1998
4.75%, 07/07/00 1,315 1,315
New Jersey Economic Development
Authority Revenue Refunding Bonds
(Airis Newark Llc Project)
4.45%, 07/07/00 10,500 10,500
New Jersey Economic Development
Authority Thermal Energy Facilities RB
(Thermal Energy Ltd. Partnership I
Project) Series 1997
4.35%, 07/07/00 4,750 4,750
New Jersey Health Care Facilities
Financing Authority RB (Princeton
Medical Center Project) Series 1999A-3
4.55%, 07/07/00 5,000 5,000
New Jersey Health Care Facilities
Financing Authority Revenue Refunding
Bonds (Christian Health Project)
Series 1998B
4.70%, 07/07/00 6,100 6,100
New Jersey Sports & Exposition Authority
RB Series 1992C
4.35%, 07/07/00 3,300 3,300
New Jersey State Economic Development
Authority Revenue Refunding Bonds
(Stolthaven Project) Series 1998A
4.30%, 07/01/00 100 100
New Jersey State Educational Facilities
Authority RB (Caldwell College)
Series 2000B
4.30%, 07/07/00 2,300 2,300
</TABLE>
83
<PAGE>
SCHWAB NEW JERSEY MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
New Jersey State Turnpike Authority RB
Series 1991D
4.20%, 07/07/00 $ 950 $ 950
--------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $96,890) 96,890
--------
VARIABLE RATE TENDER OPTION BONDS -- 27.1% (a)(b)(f)
NEW JERSEY -- 23.7%
Essex County, New Jersey Improvement
Authority Lease Revenue TOBP (PA-648)
4.62%, 07/07/00 5,995 5,995
New Jersey Economic Development
Authority Natural Gas Facilities RB TOB
(Nui Corp. Project) Series 161
4.72%, 07/07/00 5,130 5,130
New Jersey Health Care Facilities
Financing Authority RB TOBP (PA-504)
4.62%, 07/07/00 9,200 9,200
New Jersey State Housing & Mortgage
Finance Agency RB TOBP (PT-287)
5.00%, 07/07/00 6,690 6,690
New Jersey State TOB Series 316
4.62%, 07/07/00 6,000 6,000
New Jersey State Transportation Trust
Fund Authority TOB Series 2000C
4.67%, 07/07/00 10,400 10,400
New Jersey State Transportation Trust
Fund Authority TOB Series 203
4.62%, 07/07/00 1,995 1,995
New Jersey State Transportation Trust
Fund Authority TOB Series 204
4.62%, 07/07/00 12,685 12,685
Port Authority of New York & New Jersey
TOBP (PA-518)
4.62%, 07/07/00 3,390 3,390
--------
61,485
--------
PENNSYLVANIA -- 3.4%
Delaware River Port Authority of
Pennsylvania & New Jersey Revenue
TOBP (PA-611)
4.62%, 07/07/00 8,900 8,900
--------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $70,385) 70,385
--------
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
BOND ANTICIPATION NOTES -- 19.6% (c)
East Brunswick Township, New Jersey BAN
3.87%, 01/05/01 $ 1,000 $ 1,002
4.07%, 01/05/01 1,000 1,001
4.09%, 01/05/01 4,000 4,004
Jersey City, New Jersey BAN
3.80%, 09/15/00 1,500 1,501
3.95%, 09/15/00 2,000 2,001
4.13%, 09/15/00 8,100 8,100
Monroe Township, New Jersey Middlesex
County BAN
3.50%, 07/26/00 2,000 2,001
3.83%, 07/26/00 2,533 2,533
Passaic County, New Jersey BAN
3.84%, 09/22/00 1,700 1,701
3.85%, 09/22/00 3,000 3,002
3.94%, 09/22/00 1,500 1,501
4.20%, 03/30/01 4,000 4,009
Princeton, New Jersey Princeton Township
BAN
4.10%, 03/29/01 2,000 2,003
Ringwood, New Jersey BAN
4.12%, 03/16/01 6,373 6,389
Trenton, New Jersey BAN
3.90%, 10/20/00 2,600 2,603
3.92%, 10/20/00 1,000 1,001
4.13%, 10/20/00 3,800 3,801
Verona Township, New Jersey BAN
4.05%, 01/19/01 2,890 2,897
--------
TOTAL BOND ANTICIPATION NOTES
(Cost $51,050) 51,050
--------
REVENUE BONDS -- 7.8% (c)
Gloucester County, New Jersey
Improvement Authority Guaranteed
Solid Waste Revenue Refunding Bonds
(Landfill Project) Series 1992A
4.15%, 09/01/00 500 501
Middlesex County, New Jersey
Improvement Authority Lease RB
(Raritan Center Overpass Project)
3.65%, 08/01/00 3,595 3,599
Monmouth County, New Jersey
Improvement Authority Capital
Equipment Pooled Lease RB
3.80%, 10/01/00 1,120 1,123
</TABLE>
84
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Monmouth County, New Jersey
Improvement Authority Government
Loan RB (f)
3.90%, 12/01/00 $ 1,025 $ 1,025
New Jersey Health Care Facilities
Financing Authority RB (Kimball
Medical Center Project) Series 1990C
4.25%, 07/01/00 1,500 1,530
New Jersey Health Care Facilities
Financing Authority RB (Elizabeth
General Medical Center) Series 1900C
4.91%, 07/01/00 4,890 4,988
New Jersey State Educational Facilities
Authority RB (Princeton University)
Series 2000E
4.38%, 07/01/01 1,425 1,440
New Jersey State Highway Authority
Revenue Refunding Bonds (Garden
State Parkway Project)
4.20%, 01/01/01 420 420
New Jersey State Tranportation Corp.
Capital Grant Anticipation Notes RB
Series 2000A (f)
3.97%, 09/01/00 1,000 1,000
Ocean County, New Jersey Utilities
Authority Wastewater Revenue
Refunding Bonds
3.95%, 01/01/01 2,500 2,513
Port Authority of New York & New Jersey
RB Series 112
4.15%, 12/01/00 2,100 2,103
--------
TOTAL REVENUE BONDS
(Cost $20,242) 20,242
--------
GENERAL OBLIGATIONS -- 4.5% (c)
NEW JERSEY -- 3.9%
Essex County, New Jersey GO
Series 1996A1 (f)
3.95%, 11/15/00 1,500 1,506
Mercer County, New Jersey GO
4.06%, 09/01/00 2,000 2,001
Morris County, New Jersey GO
3.80%, 07/15/00 1,005 1,006
New Jersey State GO
3.28%, 07/15/00 3,000 3,001
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
New Jersey State GO Series 1996E
3.49%, 07/15/01 $ 2,000 $ 2,024
New Jersey State Governmental GO
4.00%, 08/01/00 500 501
--------
10,039
--------
PUERTO RICO -- 0.6%
Puerto Rico Commonwealth GO
4.90%, 07/01/00 1,500 1,530
--------
TOTAL GENERAL OBLIGATIONS
(Cost $11,569) 11,569
--------
FIXED RATE TENDER OPTION BONDS -- 1.5% (c)(e)(f)
New Jersey State Housing & Mortgage
Finance Agency Revenue TOBP (PT-285)
3.80%, 08/10/00 3,940 3,940
--------
TOTAL FIXED RATE TENDER
OPTION BONDS
(Cost $3,940) 3,940
--------
TAX EXEMPT COMMERCIAL PAPER -- 1.3% (c)
NEW JERSEY -- 1.1% (f)
Port Authority of New York & New Jersey
TECP
3.95%, 07/13/00 3,000 3,000
--------
PUERTO RICO -- 0.2%
Puerto Rico Government Development
Bank TECP
4.40%, 08/23/00 500 500
--------
TOTAL TAX EXEMPT COMMERCIAL PAPER
(Cost $3,500) 3,500
--------
TOTAL INVESTMENTS -- 99.0%
(Cost $257,576) 257,576
--------
OTHER ASSETS AND LIABILITIES -- 1.0%
Other assets 3,063
Liabilities (455)
--------
2,608
--------
TOTAL NET ASSETS -- 100.0% $260,184
========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
85
<PAGE>
SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS -- 50.1% (b)(f)
Allegheny County, Pennsylvania IDA RB
(Saureisen Project)
5.00%, 07/07/00 $1,400 $ 1,400
Berks County, Pennsylvania IDA RB
(Beacon Container Project)
5.00%, 07/07/00 1,800 1,800
Bucks County, Pennsylvania IDA RB
(Klearfold Project)
5.00%, 07/07/00 3,000 3,000
Bucks County, Pennsylvania IDA RB
(Schuman and Sons Project)
4.90%, 07/07/00 3,055 3,055
Cambria County, Pennsylvania IDA
Resource Recovery RB (Cambria Cogen
Co. Project)
4.80%, 07/07/00 7,400 7,400
Dauphin County, Pennsylvania RB
(All Health Pooled Financing Project)
4.85%, 07/07/00 2,990 2,990
Delaware County, Pennsylvania IDA RB
(YMCA of Philadelphia Project)
Series 1999
4.85%, 07/07/00 1,745 1,745
Easton City, Pennsylvania School
District GO
4.85%, 07/07/00 700 700
Lancaster County, Pennsylvania Hospital
Authority RB (Brethren Village)
4.85%, 07/07/00 6,000 6,000
Montgomery County , Pennsylvania IDA
Environmental Facilities RB
(Lonza, Inc. Project)
4.87%, 07/07/00 7,000 7,000
Montgomery County, Pennsylvania
IDA RB (Seton Medical Co.
5.05%, 07/07/00 500 500
Montgomery County, Pennsylvania M/F
Housing RB (Glenmore Association)
Series A
4.70%, 07/07/00 3,500 3,500
North Hampton County, Pennsylvania
IDA RB (Binney & Smith) Series A
4.90%, 07/07/00 3,250 3,250
Northampton County, Pennsylvania
IDA RB (Binney & Smith) Series B
4.80%, 07/07/00 960 960
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Pennsylvania Energy Development
Authority RB (B&W Ebensburg Project)
Series 1986
4.80%, 07/07/00 $7,100 $ 7,100
Pennsylvania Energy Development
Authority RB (Piney Creek Project)
Series 1986C
4.80%, 07/07/00 1,155 1,155
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series A
5.10%, 07/07/00 5,000 5,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988B
4.75%, 07/07/00 2,670 2,670
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988C
4.75%, 07/07/00 9,470 9,470
Pennsylvania State Public School
Building Authority RB Series 1999D
4.85%, 07/07/00 3,300 3,300
Philadelphia, Pennsylvania IDA RB
(30th Street Station Project) Series 1987
4.30%, 07/30/00 5,300 5,300
Quakertown, Pennsylvania General
Authority Pooled Financing Program RB
Series 1998A
4.75%, 07/07/00 5 5
Quakertown, Pennsylvania General
Authority Pooled Financing Program RB
Series A
4.75%, 07/07/00 2,935 2,935
Washington County, Pennsylvania
Authority RB (Girard Estate Refunding
Project) Series 1999J
4.85%, 07/07/00 9,260 9,260
West Cornwall Township, Pennsylvania
Municipal Authority RB (Lebanon
Valley Crethren Project)
4.80%, 07/07/00 1,120 1,120
--------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $90,615) 90,615
--------
</TABLE>
86
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
VARIABLE RATE TENDER OPTION BONDS -- 21.7% (a)(b)(f)
Delaware County, Pennsylvania TOB
Series 254
4.87%, 07/07/00 $2,963 $ 2,963
Delaware Valley, Pennsylvania Regional
Finance Authority TOB
4.79%, 07/07/00 9,445 9,445
Pennsylvania HFA S/F Mortgage RB
TOBP (PT-278) Series 1999-66A
4.85%, 07/07/00 2,745 2,745
Pennsylvania HFA TOB (PT-119A)
Series 1997
4.79%, 07/07/00 2,800 2,800
Pennsylvania HFA TOB Series 1999U
4.90%, 07/07/00 9,100 9,100
Pennsylvania State GO TOB Series 2000-3
4.87%, 07/07/00 3,200 3,200
Philadelphia, Pennsylvania Airport
RB TOB (PA-387)
4.85%, 07/07/00 5,520 5,520
Spring Ford Area School District,
Pennsylvania TOB Series 247
4.85%, 07/07/00 3,505 3,505
--------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $39,278) 39,278
--------
GENERAL OBLIGATION BONDS -- 17.4% (c)
PENNSYLVANIA -- 16.5%
Lehigh County, Pennsylvania GO
Unlimited Series 1991
4.55%, 08/01/00 1,050 1,073
Montgomery County, Pennsylvania GO
Series 1995A
4.15%, 10/15/00 3,750 3,772
Pennsylvania State GO 1st Series A
4.04%, 01/01/01 7,005 7,191
4.21%, 01/01/01 1,000 1,027
4.36%, 01/01/01 7,000 7,183
Pennsylvania State GO 2nd Series A (f)
4.15%, 11/01/00 1,050 1,056
Pennsylvania State GO Series 2000
4.10%, 01/15/01 8,500 8,549
--------
29,851
--------
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
PUERTO RICO -- 0.9%
Commonwealth of Puerto Rico GO
4.90%, 07/01/00 $1,500 $ 1,530
--------
TOTAL GENERAL OBLIGATION BONDS
(Cost $31,381) 31,381
--------
REVENUE BONDS -- 6.1% (c)
Allegheny County, Pennsylvania Airport
Authority RB (f)
4.00%, 01/01/01 4,125 4,145
Pennsylvania Infrastructure Investment
Authority RB (Pennvest Loan Pool)
4.00%, 09/01/00 1,000 1,002
Pennsylvania State Higher Education
Facilities Authority (Medical College)
RB Series 1991A
4.27%, 03/01/01 1,600 1,662
Pittsburgh, Pennsylvania Urban
Redevelopment Authority Mortgage RB
Series 1999E
3.65%, 08/15/00 1,955 1,955
Pittsburgh, Pennsylvania Urban
Redevelopment Authority Mortgage RB
Series 1999F
3.55%, 08/15/00 1,000 1,000
Southeastern Pennsylvania Transportation
Authority Special RB
4.19%, 03/01/01 1,295 1,304
--------
TOTAL REVENUE BONDS
(Cost $11,068) 11,068
--------
TAX EXEMPT COMMERCIAL PAPER -- 5.3% (c)
Hatboro Horsham, Pennsylvania School
District TECP
3.74%, 09/15/00 1,950 1,951
Montgomery County, Pennsylvania
IDA TECP
4.35%, 08/21/00 4,600 4,600
Philadelphia, Pennsylvania Gas TECP
4.30%, 10/04/00 3,000 3,000
--------
TOTAL TAX EXEMPT COMMERCIAL PAPER
(Cost $9,551) 9,551
--------
</TABLE>
87
<PAGE>
SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
FIXED RATE TENDER OPTION BONDS -- 2.6% (c)(e)(f)
Pennsylvania HFA RB TOB Series 1998Y
4.80%, 07/19/00 $2,000 $ 2,000
Philadelphia, Pennsylvania IDRB TOBP
(PA-982) (Philadelphia Airport)
Series 1998A
3.62%, 07/20/00 2,710 2,710
--------
TOTAL FIXED RATE TENDER
OPTION BONDS
(Cost $4,710) 4,710
--------
TOTAL INVESTMENTS -- 103.2%
(Cost $186,603) 186,603
--------
OTHER ASSETS ANDLIABILITIES -- (3.2%)
Other assets 1,745
Liabilities (7,511)
--------
(5,766)
--------
TOTAL NET ASSETS -- 100.0% $180,837
========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
88
<PAGE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS -- 47.5% (b)(f)
COLORADO -- 1.7%
Colorado Student Obligation Bond
Authority Student Loan RB Series 1989A
4.85%, 07/07/00 $12,250 $ 12,250
--------
FLORIDA -- 35.9%
Alachua County, Florida Health Facilities
Authority RB (Shands Teaching Hospital
Clinic Project) Series 1996
4.95%, 07/07/00 1,100 1,100
Brevard County, Florida HFA M/F Housing
Revenue Refunding Bonds (Shore View
Apartment Project)
4.85%, 07/07/00 1,000 1,000
Broward County, Florida Suburban Port
Facilities (Port Everglades Project)
Series 1998
4.70%, 07/07/00 900 900
Charlotte County, Florida HFA M/F
Housing RB (Murdock Circle Apartments
Project)
4.71%, 07/07/00 7,000 7,000
Citrus Park, Florida Community
Development District Capital
Improvement Bonds Series 1996
4.85%, 07/07/00 1,880 1,880
Dade County, Florida Aviation
Series 1984A
4.85%, 07/07/00 3,000 3,000
Dade County, Florida IDA RB (Dolphins
Stadium Project) Series 1985C
4.95%, 07/07/00 1,050 1,050
Eustis, Florida Multi-Purpose RB
4.80%, 07/07/00 3,310 3,310
Florida Development Finance Corp. IDRB
(Central Farms LTD. Project)
Series 1999A4
4.95%, 07/07/00 1,750 1,750
Florida Development Finance Corp. IDRB
(Pioneer Ram Project) Series 1998A3
4.95%, 07/07/00 1,340 1,340
Florida Development Finance Corp. IDRB
(Schmitt Family Project) Series 1999A2
4.95%, 07/07/00 2,500 2,500
Florida Development Finance Corp. IDRB
(Sunshine State Project) Series 1999A3
4.85%, 07/07/00 1,580 1,580
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Florida Development Finance Corp. IDRB
(Vutec Corp. Project) Series 1999A1
4.95%, 07/07/00 $ 2,000 $ 2,000
Florida HFA Housing RB (Ashley Lake II
Project) Series 1989J
4.95%, 07/07/00 8,800 8,800
Florida HFA Housing RB (Caribbean Key
Apartments) Series 1996F
4.80%, 07/07/00 3,400 3,400
Florida HFA Housing RB (Heron Park
Project) Series 1996U
5.00%, 07/07/00 3,200 3,200
Florida HFA M/F Housing RB (South
Pointe Project) Series 1998J
4.66%, 07/07/00 600 600
Florida HFA M/F Housing RB (Waterford
Pointe) Series 2000E-1
4.90%, 07/07/00 4,155 4,155
Florida Housing Finance Corp. Housing
RB (Heritage Pointe Project)
Series 1999I-1
4.90%, 07/07/00 750 750
Florida Housing Finance Corp. Housing
RB (Timberline Apartments)
Series 1999P
4.65%, 07/07/00 2,500 2,500
Florida Housing Finance Corp. Housing
RB (Valencia Village Apartments Project)
Series 1999G-1
4.90%, 07/07/00 1,875 1,875
Florida Housing Finance Corp. M/F
Housing RB (Buchanan Bay Townhomes
Project) Series 1998S
4.95%, 07/07/00 3,500 3,500
Florida Municipal Power Agency Revenue
Refunding Bonds (Stanton II Project)
Series 1997
4.85%, 07/07/00 4,000 4,000
Florida Ocean Highway & Port Authority
RB Series 1990
4.80%, 07/07/00 8,400 8,400
Florida State Municipal Power Agency
Revenue Refunding Bonds (Stanton
Project) Series 1984
4.65%, 07/07/00 1,800 1,800
Gainesville, Florida IDA (Exactech Inc.
Project)
4.90%, 07/07/00 3,900 3,900
</TABLE>
89
<PAGE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Gainesville, Florida IDRB (Lifes
Cummunity Blood Centers, Inc.)
Series 1999
4.80%, 07/07/00 $ 3,200 $ 3,200
Gulf Breeze, Florida RB (Local
Government Loan Program) Series 1985C
4.80%, 07/07/00 3,000 3,000
Hillsborough County, Florida HFA M/F
Housing RB (Brandon Crossing Project)
4.90%, 07/07/00 2,000 2,000
Hillsborough County, Florida IDA
Education Facilities RB (Berkeley
Preparatory School) Series 1999
4.80%, 07/07/00 2,550 2,550
Jacksonville, Florida Health Facility
Authority RB (River Garden Project)
Series 1994
4.80%, 07/07/00 2,795 2,795
Jacksonville, Florida RB (Capital Project)
4.65%, 07/07/00 400 400
Lee County, Florida HFA M/F Housing RB
(Cape Coral Apartments Project)
Series 1999A
4.71%, 07/07/00 6,160 6,160
Manatee County, Florida HFA M/F
Housing RB (Centre Court Apartments
Project) Series 2000A
4.90%, 07/07/00 3,850 3,850
Manatee County, Florida HFA M/F
Housing RB (Hampton McGuire
Project) Series 1989A
4.75%, 07/07/00 3,100 3,100
Manatee County, Florida HFA M/F
Housing RB (Sabal Palm Harbor
Project) Series 2000A
4.71%, 07/07/00 6,000 6,000
Manatee County, Florida IDRB (Trilectron
Industries Project) Series 1997A
4.59%, 07/07/00 2,000 2,000
Miami & Dade County, Florida IDA Aiport
Facilities RB (Flight Safety Project)
Series 1999A
4.90%, 07/07/00 9,000 9,000
Miami & Dade County, Florida IDA Airport
Facilities RB (Flight Safety Project)
Series 1999A
4.90%, 07/07/00 900 900
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Miami & Dade County, Florida IDA IDRB
(Airbus Service Co. Project) Series 1998A
4.90%, 07/07/00 $ 8,800 $ 8,800
Miami & Dade County, Florida IDA IDRB
(Airis Miami LLC Project) Series 1999A
4.70%, 07/07/00 5,200 5,200
Miami & Dade County, Florida IDA IDRB
(Arctic Partners LTD. Project)
4.95%, 07/07/00 2,240 2,240
Miami & Dade County, Florida IDA IDRB
(Badia Spices Inc. Project)
4.90%, 07/07/00 4,475 4,475
Miami & Dade County, Florida IDA IDRB
(Fine Arts Lamps Project) Series 1998
4.90%, 07/07/00 2,000 2,000
Miami, Florida Health Facilities Authority
RB (Jewish Home for the Aged, Inc.
Project) Series 1996
4.80%, 07/07/00 2,850 2,850
Okeechobee County, Florida Exempt
Facility RB (Okeechobee Landfill, Inc.
Project) Series 1999
4.90%, 07/07/00 15,000 15,000
Orange County, Florida Educational
Facilities Authority Educational
Facilities RB (Rollins College Project)
Series 1999
4.80%, 07/07/00 3,100 3,100
Orange County, Florida Health Facilities
Authority RB (Adventist Health Systems)
Series 1992B
4.80%, 07/07/00 4,000 4,000
Orange County, Florida HFA (Highland
Pointe Apartments Project) Series 1988J
4.85%, 07/07/00 3,655 3,655
Orange County, Florida HFA M/F Housing
RB (Andover Place Apartments)
4.75%, 07/07/00 2,470 2,470
Orange County, Florida HFA M/F Housing
RB (West Pointe Villas Project)
Series 2000F
4.90%, 07/07/00 5,750 5,750
Orange County, Florida HFA M/F Housing
RB Series 2000G
4.71%, 07/07/00 1,215 1,215
Orange County, Florida IDA IDRB
(Goodwill Industries, Inc. Project)
4.80%, 07/07/00 6,000 6,000
</TABLE>
90
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Palm Beach County, Florida HFA M/F
Housing RB (Azalea Place Apartments
Project) Series 1999A
4.71%, 07/07/00 $ 2,600 $ 2,600
Palm Beach County, Florida IDRB
(Benjamin Private School Project)
4.80%, 07/07/00 9,000 9,000
Palm Beach County, Florida RB (Complete
Alcohol Rehabilitation Project)
4.80%, 07/07/00 5,900 5,900
Palm Beach County, Florida RB (Norton
Gallery Art School Project) Series 1995
4.65%, 07/07/00 2,300 2,300
Pasco County, Florida Education Facility
Authority RB (St. Leo University Project)
4.87%, 07/07/00 2,650 2,650
Pinellas County, Florida Industry Council
IDRB (Better Business Forms Inc. Project)
Series 1997
4.90%, 07/07/00 2,800 2,800
Plant City, Florida Hospital RB (Southern
Florida Baptist Hospital Project)
4.75%, 07/07/00 4,340 4,340
Polk County, Florida IDA IDRB (Juice
Bowl Products, Inc. Project)
4.90%, 07/07/00 3,100 3,100
Polk County, Florida IDA RB (Farmland
Hydro Project)
4.85%, 07/07/00 4,000 4,000
Polk County, Florida IDA RB
(Pavermodule Inc. Project)
4.90%, 07/07/00 1,410 1,410
Polk County, Florida IDA RB (Young
Florida Project) Series 1996
4.85%, 07/07/00 1,910 1,910
Riviera Beach, Florida IDRB (Sunshine
Farms Poultry Project)
4.90%, 07/07/00 2,400 2,400
St. Lucie County, Florida IDRB (Savannah
Hospital Project)
4.95%, 07/07/00 7,045 7,045
St. Petersburg, Florida Capital
Improvement RB (Airport & Golf Course
Project) Series 1997C
4.90%, 07/07/00 790 790
St. Petersburg, Florida Capital
Improvement RB (Airport & Golf Course
Project) Series B
4.75%, 07/07/00 2,685 2,685
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Sumter County, Florida IDA RB
(Robbins Manufacturing Project)
Series 1997
4.95%, 07/07/00 $ 1,970 $ 1,970
Tallahassee & Leon County, Florida
Civic Center Authority Capital
Improvement RB Series A
4.80%, 07/07/00 7,000 7,000
Tampa, Florida Occupational License
Tax RB Series 1996A
4.85%, 07/07/00 985 985
Volusia County, Florida Health Facilities
Authority RB (South West Volusia
Health Project) Series 1994A
4.75%, 07/07/00 9,170 9,170
West Orange Healthcare District,
Florida RB Series 1999B
4.60%, 07/07/00 500 500
--------
259,555
--------
GEORGIA -- 1.4%
Cobb County, Georgia HFA M/F
Housing RB (Walton Green Project)
4.90%, 07/07/00 7,200 7,200
Houston County, Georgia Development
Authority IDRB (Douglas Asphalt
County Project)
4.95%, 07/07/00 3,000 3,000
--------
10,200
--------
IDAHO -- 0.4%
Idaho HFA Housing RB (Assisted Living
Concepts Project)
4.85%, 07/07/00 2,910 2,910
--------
ILLINOIS -- 3.5%
Chicago, Illinois O'Hare International
Airport RB ACES (General Airport
Second Lien) Series B1
5.05%, 07/07/00 21,200 21,200
Chicago, Illinois O'Hare International
Airport Special Facility RB
4.75%, 07/07/00 300 300
Illinois International Port District
Facilities RB (Southdown, Inc. Project)
4.90%, 07/07/00 4,000 4,000
--------
25,500
--------
</TABLE>
91
<PAGE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
KANSAS -- 1.4%
Wichita, Kansas Airport Facilities Revenue
Refunding Bond (Flight Safety
International Project)
4.90%, 07/07/00 $10,000 $ 10,000
--------
MISSISSIPPI -- 0.9%
Mississippi Business Financial Corp.,
Mississippi IDRB (Omega Motion
Project) Series 1996
4.90%, 07/07/00 6,500 6,500
--------
NEVADA -- 0.0%
Clark County, Nevada Airport RB
Series 1999B-1
4.80%, 07/07/00 300 300
--------
RHODE ISLAND -- 0.4%
Rhode Island State Student Loan
Authority Student Loan RB Series 1996-3
4.85%, 07/07/00 2,400 2,400
--------
TEXAS -- 1.5%
Harris County, Texas HFA M/F Housing RB
(Dominion Square Apartments Project)
4.92%, 07/07/00 3,300 3,300
Trinity River Authority, Texas Solid Waste
Disposal RB (Community Waste Project)
4.95%, 07/07/00 7,700 7,700
--------
11,000
--------
VIRGINIA -- 0.4%
Portsmouth, Virginia Redevelopment
Housing Authority M/F Housing RB
(Churchland North Apartments Project)
4.90%, 07/07/00 3,000 3,000
--------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $343,615) 343,615
--------
VARIABLE RATE TENDER OPTION BONDS -- 16.2% (a)(b)(f)
FLORIDA -- 13.4%
Escambia County, Florida HFA S/F
Housing TOBP (PT-1017)
4.90%, 07/07/00 21,395 21,395
Escambia County, Florida HFA S/F
Mortgage RB TOB Series 1997D
4.92%, 07/07/00 9,220 9,220
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Florida Housing Financing Corp. RB TOB
Series 2000J
4.89%, 07/07/00 $ 5,000 $ 5,000
Florida State Board of Education Capital
Outlay TOB Series 137
4.85%, 07/07/00 11,190 11,190
Florida State Board of Education Capital
Outlay TOB Series 190
4.87%, 07/07/00 1,175 1,175
Florida State Board of Education Capital
Outlay TOB Series 1998E
4.87%, 07/07/00 6,180 6,180
Florida State Board of Education Capital
Outlay TOB Series 223
4.87%, 07/07/00 3,070 3,070
Florida State Board of Education Capital
Outlay TOB Series 286
4.87%, 07/07/00 2,675 2,675
Florida State Turnpike Authority
Turnpike RB TOB Series 273
4.87%, 07/07/00 2,945 2,945
Fort Meyers , Florida Utility Revenue
Refunding TOB Series 1999A
4.87%, 07/07/00 2,495 2,495
Hillsborough County, Florida Capital
Improvement Program RB TOB Series 222
4.87%, 07/07/00 5,230 5,230
Jacksonville, Florida Electric Authority
RB TOB Series 2000FF
4.89%, 07/07/00 1,700 1,700
Jacksonville, Florida Electric Authority
RB TOB Series 211
4.87%, 07/07/00 7,185 7,185
Jacksonville, Florida Electric Authority
RB TOB Series 226
4.87%, 07/07/00 2,500 2,500
Lee County, Florida Airport RB TOBP
(PA-679)
4.90%, 07/07/00 2,745 2,745
Palm Beach County, Florida Criminal
Justice Facilities TOB Series 191
4.87%, 07/07/00 7,495 7,495
Pinellas County, Florida HFA S/F Housing
RB TOBP (PT-352)
4.90%, 07/07/00 4,495 4,495
--------
96,695
--------
</TABLE>
92
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
GEORGIA -- 0.7%
Georgia State GO TOB Series 213
4.87%, 07/07/00 $ 5,000 $ 5,000
--------
TENNESSEE -- 0.6%
Tennesse Housing Development Agency
Mortgage Finance TOB Series 1997K
4.97%, 07/07/00 3,995 3,995
--------
TEXAS -- 1.5%
Lower Colorado River Authority, Texas
Revenue Refunding Bonds TOB Series 1999A
4.87%, 07/07/00 10,770 10,770
--------
TOTAL VARIABLE RATE TENDER
OPTION BONDS
(Cost $116,460) 116,460
--------
TAX EXEMPT COMMERCIAL PAPER -- 10.2% (c)
Florida Local Government Finance
Commission Pooled TECP Series A
4.65%, 09/06/00 2,500 2,500
4.30%, 10/04/00 2,500 2,500
4.40%, 10/04/00 3,000 3,000
Florida Local Government Finance
Commission Pooled TECP Series B
4.70%, 09/06/00 2,500 2,500
Orange County, Florida HFA Pooled
Hospital Loan TECP (f)
4.70%, 07/05/00 27,600 27,600
Orange County, Florida TECP Series A
4.25%, 10/05/00 5,000 5,000
Pinellas County, Florida Educational
Facilities TECP (f)
4.35%, 07/05/00 10,700 10,700
Sunshine State of Florida Governmental
Finance Committee TECP
4.07%, 07/10/00 20,213 20,213
--------
TOTAL TAX EXEMPT COMMERCIAL PAPER
(Cost $74,013) 74,013
--------
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
REVENUE BONDS -- 8.7% (c)
ALASKA -- 0.6% (f)
Alaska Student Loan Corp. Student
Loan RB Series 1990A
4.65%, 07/01/00 $ 4,600 $ 4,600
--------
FLORIDA -- 3.8% (f)
Florida State Division Board of Finance
Department General Services RB
(Environment Preservation) Series 2000A
4.08%, 07/01/00 1,500 1,500
Florida State Division Board of Finance
Department of General Services RB
(Department of National Resources
Preservation 2000) Series 1991A
4.45%, 07/01/00 2,900 2,900
Florida State Inland Protection Financing
Corp. Special Obligation
3.70%, 07/01/00 3,265 3,265
Florida State Turnpike Authority RB
4.33%, 07/01/01 2,000 2,037
Hillsborough County, Florida Aviation
Authority Revenue Refunding Bonds
(Tampa International Airport)
Series 1997A
4.25%, 10/01/00 3,070 3,076
Hillsborough County, Florida Capital
Improvement Program RB (Criminal
Justice Facilities Project)
3.48%, 08/01/00 4,100 4,104
Homestead, Florida Special Insurance
Assessment RB
4.13%, 03/01/01 1,000 1,006
Inland Protection Financing Corp.,
Florida Special Obligation RB
4.22%, 01/01/01 1,000 1,004
Jacksonville, Florida Electric Authority RB
(Bulk Power Supply Scherer)
Series 1991-4-1A
4.35%, 10/01/00 3,100 3,168
Jacksonville, Florida Electric Authority RB
(Bulk Power Supply Scherer)
Series 1991-4-A
6.48%, 10/01/00 3,150 3,218
</TABLE>
93
<PAGE>
SCHWAB FLORIDA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Orlando & Orange County, Florida
Expressway Authority Florida Expressway
Revenue Refunding Bonds
3.28%, 07/01/00 $ 1,620 $ 1,652
Tampa, Florida Guranteed Entitlement
Revenue Refunding Bond
4.03%, 10/01/00 1,000 1,006
--------
27,936
--------
NEVADA -- 0.0% (f)
Las Vegas Valley, Nevada Water District
Refunding & Improvement Water RB
4.15%, 09/01/00 200 200
--------
OKLAHOMA -- 1.0%
Oklahoma State Turnpike Authority RB
Series 1992A
4.34%, 01/01/01 7,000 7,046
--------
SOUTH CAROLINA -- 0.7% (f)
Piedmont Municipal Power Agency,
South Carolina Electric RB Series 1996B
4.28%, 01/01/01 5,000 5,017
--------
TENNESSEE -- 1.2%
Tennessee HDA (Home Ownership
Program) Series 1999-2C
3.57%, 08/15/00 8,500 8,500
--------
TEXAS -- 0.5%
Houston, Texas Airport System Special
Facilities RB Series 1997A (f)
3.60%, 07/01/00 2,230 2,230
University of Texas Permanent University
Fund Revenue Refunding Bonds
5.12%, 07/01/01 1,000 1,037
--------
3,267
--------
VIRGINIA -- 0.2%
Virginia Educational Loan Authority
Guaranteed Student Loan Program
Revenue Refunding Bonds Series 1993D
4.40%, 09/01/00 1,500 1,502
--------
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
WASHINGTON -- 0.7%
Washington State Public Power Supply
Systems Revenue Refunding Bonds
(Nuke Project #2) Series 1992A
3.60%, 07/01/00 $ 2,000 $ 2,000
Washington State Public Power Supply
Systems Revenue Refunding Bonds
(Nuke Project #2) Series 1993B
3.60%, 07/01/00 3,170 3,170
--------
5,170
--------
TOTAL REVENUE BONDS
(Cost $63,238) 63,238
--------
GENERAL OBLIGATION BONDS -- 5.3% (c)
Broward County, Florida Refunding GO
Series 1992C
4.20%, 01/01/01 1,000 1,007
Dade County, Florida GO Series 1978H (f)
4.37%, 06/01/01 2,710 2,763
Florida State Board of Education Capital
Outlay Public Education GO
Series 1991B
6.09%, 06/01/01 5,950 6,123
Florida State Board of Education Capital
Outlay Public Education GO
Series 1998B
4.45%, 06/01/01 4,065 4,121
Hillsborough County, Florida School
District GO (f)
3.95%, 08/15/00 23,665 24,225
--------
TOTAL GENERAL OBLIGATION BONDS
(Cost $38,239) 38,239
--------
MANDATORY PUT BONDS -- 3.5% (c)(f)
Greater East Texas Higher Education
Authority Student Loan RB
Series 1992A
3.80%, 09/01/00 25,000 25,000
--------
TOTAL MANDATORY PUT BONDS
(Cost $25,000) 25,000
--------
</TABLE>
94
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
REVENUE ANTICIPATION NOTES -- 3.4% (c)
Brevard County, Florida School Board
RAN
4.20%, 04/11/01 $ 4,475 $ 4,488
4.28%, 05/04/01 20,000 20,056
--------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $24,544) 24,544
--------
BOND ANTICIPATION NOTES -- 1.0% (c)
Wyandotte County, Kansas City, Kansas
Unified Government Temporary BAN
Series 10
4.50%, 05/01/01 1,256 1,257
Wyandotte County, Kansas City, Kansas
Unified Government Temporary BAN
Series 11
4.50%, 05/01/01 402 402
Wyandotte County, Kansas City, Kansas
Unified Government Temporary BAN
Series 12
4.50%, 05/01/01 2,802 2,805
Wyandotte County, Kansas City, Kansas
Unified Government Temporary BAN
Series 13
4.50%, 05/01/01 1,874 1,876
Wyandotte County, Kansas City, Kansas
Unified Government Temporary BAN
Series 14
4.50%, 05/01/01 914 915
--------
TOTAL BOND ANTICIPATION NOTES
(Cost $7,255) 7,255
--------
CERTIFICATES OF PARTICIPATION -- 0.7% (c)(f)
Miami & Dade County, Florida School
Board COP Series 1998C
3.45%, 08/01/00 5,000 5,003
--------
TOTAL CERTIFICATES OF PARTICIPATION
(Cost $5,003) 5,003
--------
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
FIXED RATE TENDER OPTION BONDS -- 2.1% (c)(e)(f)
FLORIDA -- 1.4%
Jacksonville, Florida Port Authority Port
Facility RB TOB
4.75%, 07/07/00 $10,100 $ 10,100
--------
PUERTO RICO -- 0.7%
Puerto Rico Public Financing Corp.
TOBP (PT-293)
3.55%, 10/12/00 4,925 4,925
--------
TOTAL FIXED RATE TENDER
OPTION BONDS
(Cost $15,025) 15,025
--------
TAX ANTICIPATION NOTES -- 0.6% (c)(f)
Halifax Hospital Medical Center,
Florida TAN
4.20%, 03/15/01 4,500 4,509
--------
TOTAL TAX ANTICIPATION NOTES
(Cost $4,509) 4,509
--------
TAX ALLOCATION BONDS -- 0.1% (c)(f)
Tampa, Florida Utility Tax Allocation Bond
4.03%, 10/01/00 1,000 1,006
--------
TOTAL TAX ALLOCATION BONDS
(Cost $1,006) 1,006
--------
TOTAL INVESTMENTS -- 99.3%
(Cost $717,907) 717,907
--------
OTHER ASSETS AND LIABILITIES -- 0.7%
Other assets 6,113
Liabilities (1,229)
--------
4,884
--------
TOTAL NET ASSETS -- 100.0% $722,791
========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
95
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
June 30, 2000 (Unaudited)
(All dollar amounts are in thousands unless otherwise noted)
For each security, cost and carrying value for financial reporting and federal
income tax purposes are the same.
(a) These securities can be resold to qualified institutional buyers within
seven business days. Such securities are deemed liquid in accordance with
procedures adopted by the Board of Trustees. At June 30, 2000, the aggregate
value of such securities held by 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 was $1,029,760, $556,920,
$189,515, $70,385, $39,278 and $116,460, respectively, which represented
12.05%, 10.25%, 18.86%, 27.05%, 21.72% and 16.11% of the net assets of each
fund, respectively.
(b) Variable rate obligations have interest rates that 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.
(c) Interest rates represent effective yield to put or call date at time of
purchase.
(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) These securities have legal or contractual restrictions on resale. Such
securities are deemed illiquid in accordance with procedures adopted by the
Board of Trustees. At June 30, 2000, the aggregate value of such securities
held by 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 was $192,690, $48,290, $55,715, $3,940, $4,710 and $15,025,
respectively, which represented 2.26%, 0.89%, 5.54%, 1.51%, 2.60% and 2.08%,
respectively, of the net assets of each fund.
(f) Security has one or more third party credit enhancements.
(g) Rate shown is the yield as of the report date.
96
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS (continued)
PORTFOLIO ABBREVIATIONS
ACES Adjustable Convertible Extendable Securities
BAN Bond Anticipation Note
COP Certificates of Participation
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
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.
97
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except for net asset value
per share)
June 30, 2000 (Unaudited)
<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: $8,672,134, $5,681,031 and
$994,918, respectively) $8,672,134 $5,681,031 $ 994,918
Cash 4,301 -- 54
Receivables:
Interest 63,839 38,430 10,672
Investments sold 11,116 408,043 --
Fund shares sold 16,650 11,485 3,058
Prepaid expenses 718 76 38
---------- ---------- ----------
Total assets 8,768,758 6,139,065 1,008,740
---------- ---------- ----------
LIABILITIES
Payables:
Dividends 13,623 7,598 1,533
Investments purchased 205,409 693,283 1,500
Fund shares redeemed 5,900 5,137 746
Investment advisory and administration fees 85 51 10
Transfer agency and shareholder service fees 178 112 20
Other liabilities 647 426 115
---------- ---------- ----------
Total liabilities 225,842 706,607 3,924
---------- ---------- ----------
Net assets applicable to outstanding shares $8,542,916 $5,432,458 $1,004,816
========== ========== ==========
NET ASSETS CONSIST OF
Paid-in capital $8,547,043 $5,434,359 $1,005,059
Accumulated net realized loss on investments sold (4,127) (1,901) (243)
---------- ---------- ----------
$8,542,916 $5,432,458 $1,004,816
========== ========== ==========
PRICING OF SHARES
$0.00001 par value (unlimited shares authorized)
Outstanding Sweep Shares 5,974,926 3,608,963 677,960
Outstanding Value Advantage Shares 2,572,386 1,825,495 327,162
---------- ---------- ----------
Total outstanding shares 8,547,312 5,434,458 1,005,122
========== ========== ==========
Net asset value, offering and redemption price per each Sweep
and Value Advantage Share $1.00 $1.00 $1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
98
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except for net asset value
per share)
June 30, 2000 (Unaudited)
<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: $257,576, $186,603 and
$717,907, respectively) $257,576 $186,603 $717,907
Cash 9 72 76
Interest Receivable 3,038 1,649 5,987
Prepaid expenses 16 24 50
-------- -------- --------
Total assets 260,639 188,348 724,020
-------- -------- --------
LIABILITIES
Payables:
Dividends 389 278 1,153
Investments purchased -- 7,188 --
Investment advisory fees and administration fees 1 1 4
Transfer agency and shareholder service fees 6 4 18
Other liabilities 59 40 54
-------- -------- --------
Total liabilities 455 7,511 1,229
-------- -------- --------
Net assets applicable to outstanding shares $260,184 $180,837 $722,791
======== ======== ========
NET ASSETS CONSIST OF
Paid-in capital $260,217 $180,869 $722,937
Accumulated net realized loss on investments sold (33) (32) (146)
-------- -------- --------
$260,184 $180,837 $722,791
======== ======== ========
PRICING OF SHARES
$0.00001 par value (unlimited shares authorized)
Outstanding Sweep Shares 260,253 180,906 722,960
Net asset value, offering and redemption price per share $1.00 $1.00 $1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
99
<PAGE>
STATEMENTS OF OPERATIONS (in thousands)
For the six months ended June 30, 2000 (Unaudited)
<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 Money Fund Money Fund
---------- ---------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Interest income $170,475 $93,557 $19,220 $4,797 $3,708 $15,455
-------- ------- ------- ------ ------ -------
Expenses:
Investment advisory and
administration fees 15,152 9,591 1,874 465 348 1,461
Transfer agency and shareholder
service fees:
Sweep Shares 13,986 8,473 1,514 551 413 1,731
Value Advantage Shares 2,946 2,037 392 -- -- --
Custodian and portfolio
accounting fees 326 251 127 55 45 89
Registration fees 571 231 50 50 21 57
Professional fees 21 16 16 11 12 13
Shareholder reports 218 87 22 3 2 15
Trustees' fees 17 13 9 7 6 7
Proxy fees 515 321 59 14 11 44
Other expenses 42 31 10 4 4 8
-------- ------- ------- ------ ------ -------
33,794 21,051 4,073 1,160 862 3,425
Less: expenses reduced (see Note 4) (7,463) (4,824) (986) (351) (255) (1,111)
-------- ------- ------- ------ ------ -------
Net expenses incurred by fund 26,331 16,227 3,087 809 607 2,314
-------- ------- ------- ------ ------ -------
Net investment income 144,144 77,330 16,133 3,988 3,101 13,141
Net realized loss on investments sold (866) (821) (169) (17) (23) (132)
-------- ------- ------- ------ ------ -------
Increase in net assets resulting
from operations $143,278 $76,509 $15,964 $3,971 $3,078 $13,009
======== ======= ======= ====== ====== =======
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
100
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
<TABLE>
<CAPTION>
Schwab Schwab California Schwab New York
Municipal Money Fund Municipal Money Fund Municipal Money Fund
----------------------------- ----------------------------- ---------------------------
Six months Six months Six months
ended ended ended
06/30/00 Year ended 06/30/00 Year ended 06/30/00 Year ended
(Unaudited) 12/31/99 (Unaudited) 12/31/99 (Unaudited) 12/31/99
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 144,144 $ 206,391 $ 77,330 $ 108,435 $ 16,133 $ 20,690
Net realized loss on
investments sold (866) (758) (821) (270) (169) (53)
------------ ------------ ------------ ------------ ----------- -----------
Increase in net assets
resulting from operations 143,278 205,633 76,509 108,165 15,964 20,637
------------ ------------ ------------ ------------ ----------- -----------
Dividends to shareholders
from net investment income
(See Note 2):
Sweep Shares (102,665) (149,157) (52,817) (70,760) (10,752) (13,429)
Value Advantage Shares (41,479) (57,234) (24,513) (37,675) (5,381) (7,261)
------------ ------------ ------------ ------------ ----------- -----------
Total dividends to
shareholders (144,144) (206,391) (77,330) (108,435) (16,133) (20,690)
------------ ------------ ------------ ------------ ----------- -----------
Capital share transactions
(at $1.00 per share):
Proceeds from shares sold 18,954,177 29,207,646 11,173,352 15,044,804 2,106,312 2,685,061
Net asset value of shares
issued in reinvestment
of dividends 125,153 220,975 67,320 116,671 14,002 22,245
Payments for shares
redeemed (18,896,411) (27,933,769) (10,868,014) (14,070,363) (2,015,293) (2,513,226)
------------ ------------ ------------ ------------ ----------- -----------
Increase in net assets
from capital share
transactions 182,919 1,494,852 372,658 1,091,112 105,021 194,080
------------ ------------ ------------ ------------ ----------- -----------
Total increase in net assets 182,053 1,494,094 371,837 1,090,842 104,852 194,027
Net assets:
Beginning of period 8,360,863 6,866,769 5,060,621 3,969,779 899,964 705,937
------------ ------------ ------------ ------------ ----------- -----------
End of period $ 8,542,916 $ 8,360,863 $ 5,432,458 $ 5,060,621 $ 1,004,816 $ 899,964
============ ============ ============ ============ =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
101
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
<TABLE>
<CAPTION>
Schwab New Jersey Schwab Pennsylvania Schwab Florida
Municipal Money Fund Municipal Money Fund Municipal Money Fund
----------------------------- ----------------------------- ---------------------------
Six months Six months Six months
ended ended ended
06/30/00 Year ended 06/30/00 Year ended 06/30/00 Year ended
(Unaudited) 12/31/99 (Unaudited) 12/31/99 (Unaudited) 12/31/99
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 3,988 $ 3,623 $ 3,101 $ 3,676 $ 13,141 $ 16,092
Net realized loss on
investments sold (17) (16) (23) (4) (132) (14)
--------- --------- --------- --------- ----------- -----------
Increase in net assets
resulting from operations 3,971 3,607 3,078 3,672 13,009 16,078
--------- --------- --------- --------- ----------- -----------
Dividends to shareholders
from net investment income
(See Note 2): (3,988) (3,623) (3,101) (3,676) (13,141) (16,092)
--------- --------- --------- --------- ----------- -----------
Capital share transactions
(at $1.00 per share):
Proceeds from shares sold 696,875 686,811 463,724 571,748 1,505,442 2,586,830
Net asset value of shares
issued in reinvestment
of dividends 3,529 3,855 2,775 3,991 11,508 17,378
Payments for shares
redeemed (646,306) (582,462) (449,566) (533,524) (2,009,199) (2,405,514)
--------- --------- --------- --------- ----------- -----------
Increase (decrease) in
net assetsfrom capital
share transactions 54,098 108,204 16,933 42,215 (492,249) 198,694
--------- --------- --------- --------- ----------- -----------
Total increase (decrease)
in net assets 54,081 108,188 16,910 42,211 (492,381) 198,680
Net assets:
Beginning of period 206,103 97,915 163,927 121,716 1,215,172 1,016,492
--------- --------- --------- --------- ----------- -----------
End of period $ 260,184 $ 206,103 $ 180,837 $ 163,927 $ 722,791 $ 1,215,172
========= ========= ========= ========= =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
102
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab Municipal Money Fund
1/1/00-
6/30/00 1/1/99- 1/1/98- 1/1/97- 1/1/96- 1/1/95-
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
SWEEP SHARES
PER-SHARE DATA ($)
--------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02 0.03 0.03 0.03 0.03 0.03
-------------------------------------------------------------------------
Total from investment operations 0.02 0.03 0.03 0.03 0.03 0.03
Less distributions:
Dividends from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) (0.03)
-------------------------------------------------------------------------
Total distributions (0.02) (0.03) (0.03) (0.03) (0.03) (0.03)
-------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
=========================================================================
Total return (%) 1.66(2) 2.70 2.92 3.11 2.92 3.30
RATIOS/SUPPLEMENTAL DATA (%)
--------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.66(2,3) 0.66 0.66 0.66(3) 0.66 0.66
Expense reductions reflected in above ratio 0.17(2) 0.19 0.22 0.24 0.24 0.25
Ratio of net investment income to average net assets 3.30(2) 2.67 2.87 3.06 2.89 3.25
Net assets, end of period ($ x 1,000) 5,971,074 6,090,404 5,246,638 4,423,841 3,868,919 3,403,837
</TABLE>
<TABLE>
<CAPTION>
1/1/00-
6/30/00 1/1/99- 1/1/98- 1/1/97- 1/1/96- 7/7/95-
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
VALUE ADVANTAGE SHARES
PER-SHARE DATA ($)
--------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02 0.03 0.03 0.03 0.03 0.02
-------------------------------------------------------------------------
Total income from investment operations 0.02 0.03 0.03 0.03 0.03 0.02
Less distributions:
Dividends from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) (0.02)
-------------------------------------------------------------------------
Total distributions (0.02) (0.03) (0.03) (0.03) (0.03) (0.02)
-------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
=========================================================================
Total return (%) 1.76(1) 2.91 3.14 3.32 3.14 1.68(1)
RATIOS/SUPPLEMENTAL DATA (%)
--------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.45(2,4) 0.45 0.45 0.45(4) 0.45 0.45(2)
Expense reductions reflected in above ratio 0.17(2) 0.20 0.24 0.27 0.30 0.50(2)
Ratio of net investment income to average net assets 3.52(2) 2.89 3.08 3.29 3.10 3.50(2)
Net assets, end of period ($ x 1,000) 2,571,842 2,270,459 1,620,131 1,085,229 608,080 160,682
<FN>
1 Not annualized.
2 Annualized.
3 Would have been 0.67% if certain non-routine expenses (proxy fees) had been included.
4 Would have been 0.46% if certain non-routine expenses (proxy fees) had been included.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
103
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab California Municipal Money Fund
1/1/00-
6/30/00 1/1/99- 1/1/98- 1/1/97- 1/1/96- 1/1/95-
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
SWEEP SHARES
PER-SHARE DATA ($)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.01 0.02 0.03 0.03 0.03 0.03
-------------------------------------------------------------------------
Total from investment operations 0.01 0.02 0.03 0.03 0.03 0.03
Less distributions:
Dividends from net investment income (0.01) (0.02) (0.03) (0.03) (0.03) (0.03)
-------------------------------------------------------------------------
Total distributions (0.01) (0.02) (0.03) (0.03) (0.03) (0.03)
-------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
=========================================================================
Total return (%) 1.40(1) 2.42 2.64 2.95 2.80 3.20
RATIOS/SUPPLEMENTAL DATA (%)
----------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.65(2,3) 0.65 0.65 0.65(3) 0.65 0.65
Expense reductions reflected in above ratio 0.18(2) 0.20 0.24 0.26 0.27 0.29
Ratio of net investment income to average net assets 2.81(2) 2.41 2.60 2.91 2.77 3.15
Net assets, end of period ($ x 1,000) 3,607,371 3,457,094 2,610,821 2,154,522 1,816,112 1,577,695
</TABLE>
<TABLE>
<CAPTION>
1/1/00-
6/30/00 1/1/99- 1/1/98- 1/1/97- 1/1/96- 10/3/95-
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
VALUE ADVANTAGE SHARES
PER-SHARE DATA ($)
--------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02 0.03 0.03 0.03 0.03 0.01
-------------------------------------------------------------------------
Total income from investment operations 0.02 0.03 0.03 0.03 0.03 0.01
Less distributions:
Dividends from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) (0.01)
-------------------------------------------------------------------------
Total distributions (0.02) (0.03) (0.03) (0.03) (0.03) (0.01)
-------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
=========================================================================
Total return (%) 1.50(1) 2.62 2.84 3.15 3.01 0.84(1)
RATIOS/SUPPLEMENTAL DATA (%)
--------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.45(2,4) 0.45 0.45 0.45(4) 0.45 0.45(2)
Expense reductions reflected in above ratio 0.18(2) 0.20 0.25 0.27 0.32 0.59(2)
Ratio of net investment income to average net assets 3.01(2) 2.60 2.79 3.12 2.98 3.48(2)
Net assets, end of period ($ x 1,000) 1,825,087 1,603,527 1,358,958 936,815 507,486 108,008
<FN>
(1) Not annualized.
(2) Annualized.
(3) Would have been 0.66% if certain non-routine expenses (proxy fees) had been included.
(4) Would have been 0.46% if certain non-routine expenses (proxy fees) had been included.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
104
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab New York Municipal Money Fund
1/1/00-
6/30/00 1/1/99- 1/1/98- 1/1/97- 1/1/96- 2/27/95-
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
SWEEP SHARES
PER-SHARE DATA ($)
-------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02 0.03 0.03 0.03 0.03 0.03
-------------------------------------------------------------------------
Total from investment operations 0.02 0.03 0.03 0.03 0.03 0.03
Less distributions:
Dividends from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) (0.03)
-------------------------------------------------------------------------
Total distributions (0.02) (0.03) (0.03) (0.03) (0.03) (0.03)
-------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
=========================================================================
Total return (%) 1.60(1) 2.59 2.78 2.96 2.74 2.75(1)
RATIOS/SUPPLEMENTAL DATA (%)
-------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.69(2,3) 0.69 0.69 0.69(3) 0.69 0.63(2)
Expense reductions reflected in above ratio 0.19(2) 0.22 0.28 0.33 0.35 0.41(2)
Ratio of net investment income to average net assets 3.19(2) 2.57 2.73 2.93 2.71 3.20(2)
Net assets, end of period ($ x 1,000) 677,743 604,116 467,750 357,221 270,612 204,863
</TABLE>
<TABLE>
<CAPTION>
1/1/00-
6/30/00 1/1/99- 1/1/98- 1/1/97- 1/1/96- 7/7/95-
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
VALUE ADVANTAGE SHARES
PER-SHARE DATA ($)
--------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02 0.03 0.03 0.03 0.03 0.02
-------------------------------------------------------------------------
Total income from investment operations 0.02 0.03 0.03 0.03 0.03 0.02
Less distributions:
Dividends from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) (0.02)
-------------------------------------------------------------------------
Total distributions (0.02) (0.03) (0.03) (0.03) (0.03) (0.02)
-------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
=========================================================================
Total return (%) 1.72(1) 2.83 3.03 3.21 2.99 1.62(1)
RATIOS/SUPPLEMENTAL DATA (%)
--------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.45(2,4) 0.45 0.45 0.45 4 0.45 0.45(2)
Expense reductions reflected in above ratio 0.19(2) 0.26 0.33 0.40 0.56 1.36(2)
Ratio of net investment income to average net assets 3.43(2) 2.81 2.96 3.18 2.98 3.42(2)
Net assets, end of period ($ x 1,000) 327,073 295,848 238,187 125,537 66,683 15,143
<FN>
(1) Not annualized.
(2) Annualized.
(3) Would have been 0.70% if certain non-routine expenses (proxy fees) had been included.
(4) Would have been 0.46% if certain non-routine expenses (proxy fees) had been included.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
105
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab New Jersey Schwab Pennsylvania
Municipal Money Fund Municipal Money Fund
1/1/00- 1/1/00-
6/30/00 1/1/99- 2/2/98- 6/30/00 1/1/99- 2/2/98-
(UNAUDITED) 12/31/99 12/31/98 (UNAUDITED) 12/31/99 12/31/98
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
------------------------------------------------------------------------------------------------------
Net asset value at beginning
of period 1.00 1.00 1.00 1.00 1.00 1.00
-----------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.02 0.03 0.03 0.02 0.03 0.03
-----------------------------------------------------------------------
Total from investment
operations 0.02 0.03 0.03 0.02 0.03 0.03
Less distributions:
Dividends from net
investment income (0.02) (0.03) (0.03) (0.02) (0.03) (0.03)
-----------------------------------------------------------------------
Total distributions (0.02) (0.03) (0.03) (0.02) (0.03) (0.03)
-----------------------------------------------------------------------
NET ASSET VALUE AT
END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
=======================================================================
Total return (%) 1.62(1) 2.58 2.60(1) 1.70(1) 2.71 2.72(1)
RATIOS/SUPPLEMENTAL DATA (%)
------------------------------------------------------------------------------------------------------
Ratio of net operating
expenses to average
net assets 0.65(2,3) 0.65 0.65(2) 0.65(2,3) 0.65 0.65(2)
Expense reductions reflected
in above ratio 0.29(2) 0.29 0.48(2) 0.28(2) 0.29 0.51(2)
Ratio of net investment
income to average
net assets 3.26(2) 2.60 2.75(2) 3.38(2) 2.68 2.85(2)
Net assets, end of period
($ x 1,000) 260,184 206,103 97,915 180,837 163,927 121,716
</TABLE>
<TABLE>
<CAPTION>
Schwab Florida
Municipal Money Fund
1/1/00-
6/30/00 1/1/99- 3/18/98-
(UNAUDITED) 12/31/99 12/31/98
<S> <C> <C> <C>
PER-SHARE DATA ($)
----------------------------------------------------------------
Net asset value at beginning
of period 1.00 1.00 1.00
---------------------------------
Income from investment
operations:
Net investment income 0.02 0.03 0.02
---------------------------------
Total from investment
operations 0.02 0.03 0.02
Less distributions:
Dividends from net
investment income (0.02) (0.03) (0.02)
---------------------------------
Total distributions (0.02) (0.03) (0.02)
---------------------------------
NET ASSET VALUE AT
END OF PERIOD 1.00 1.00 1.00
=================================
Total return (%) 1.71(1) 2.78 2.37(1)
RATIOS/SUPPLEMENTAL DATA (%)
----------------------------------------------------------------
Ratio of net operating
expenses to average
net assets 0.59(2,4) 0.59 0.59(2)
Expense reductions reflected
in above ratio 0.29(2) 0.33 0.41(2)
Ratio of net investment
income to average
net assets 3.42(2) 2.75 2.95(2)
Net assets, end of period
($ x 1,000) 722,791 1,215,172 1,016,492
<FN>
(1) Not annualized.
(2) Annualized.
(3) Would have been 0.66% if certain non-routine expenses (proxy fees) had been included.
(4) Would have been 0.60% if certain non-routine expenses (proxy fees) had been included.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
106
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 2000 (Unaudited)
(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, (the "1940 Act").
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 known as Value Advantage Shares. Both classes
represent interests in the same portfolio of investments of the respective fund
and are substantially the same in all respects, except that the classes are
subject to different transfer agency fees (see Note 3)
and investment minimums.
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 and original issue discount 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.
107
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
EXPENSES -- Expenses arising in connection with a fund or class of a fund are
charged directly to that fund or that class. 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.
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 federal income tax purposes.
As of December 31, 1999, the unused capital loss carryforwards, for federal
income tax purposes with expiration dates, were as follows:
<TABLE>
<CAPTION>
Schwab Schwab Schwab Schwab Schwab
Schwab California New York New Jersey Pennsylvania Florida
Municipal Municipal Municipal Municipal Municipal Municipal
Expiring in: Money Fund Money Fund Money Fund Money Fund Money Fund Money Fund
---------- ---------- ---------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
12/31/00 $ -- $ 1 $-- $-- $-- $--
12/31/01 -- 56 -- -- -- --
12/31/02 1,436 582 -- -- -- --
12/31/03 36 -- 6 -- -- --
12/31/04 465 93 9 -- -- --
12/31/05 523 35 -- -- -- --
12/31/06 -- 42 6 -- 5 1
12/31/07 775 274 53 16 5 14
------ ------ --- --- --- ---
Total capital loss carryforwards $3,235 $1,083 $74 $16 $10 $15
====== ====== === === === ===
</TABLE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS -- The funds have 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 0.38% on
the first $1 billion of average daily net assets, 0.35% on such net assets in
excess of $1 billion to $10 billion, 0.32% on such net assets in excess of $10
billion to $20 billion, and 0.30% on such net assets in excess of $20 billion.
Prior to April 30, 1999, the funds paid 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 net assets in excess of $2 billion. The investment
adviser has reduced a portion of its fee for the six months ended June 30, 2000
(see Note 4).
108
<PAGE>
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 six months ended June 30, 2000 (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
six months ended June 30, 2000, the Trust made no direct payments to its
officers or trustees who are "interested persons" within the meaning of the 1940
Act. The funds incurred fees totaling $59 related to the Trust's unaffiliated
trustees.
INTERFUND TRANSACTIONS -- During the six months ended June 30, 2000, 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 1940 Act totaled
the following dollar amounts as seen below.
Schwab Municipal Money Fund $2,564,280
Schwab California Municipal Money Fund $ 603,902
Schwab New York Municipal Money Fund $ 221,315
Schwab New Jersey Municipal Money Fund $ 385,989
Schwab Pennsylvania Municipal Money Fund $ 296,318
Schwab Florida Municipal Money Fund $1,102,773
4. EXPENSES REDUCED BY THE INVESTMENT ADVISER AND SCHWAB
The investment adviser and Schwab guarantee that, through at least April 30,
2001, the funds 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, taxes, and certain non-routine expenses. The
operating expense ratio for the six months ended June 30, 2000 did include
non-routine expenses.
<TABLE>
<CAPTION>
Sweep Value Advantage
Shares Shares
------ ---------------
<S> <C> <C>
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% --
</TABLE>
109
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2000, the total of such fees reduced by the
investment adviser and Schwab was as follows:
<TABLE>
<CAPTION>
Fees Reduced by the Fees Reduced by
investment adviser Schwab
------------------- ---------------
<S> <C> <C>
Schwab Municipal Money Fund $7,346 $117
Schwab California Municipal Money Fund $4,824 $ --
Schwab New York Municipal Money Fund $ 923 $ 63
Schwab New Jersey Municipal Money Fund $ 351 --
Schwab Pennsylvania Municipal Money Fund $ 255 --
Schwab Florida Municipal Money Fund $1,111 --
</TABLE>
5. CAPITAL SHARE TRANSACTIONS
Transactions in capital shares, for the six months ended June 30, 2000 and the
year ended December 31, 1999 (at $1.00 per share), were as follows:
<TABLE>
<CAPTION>
Schwab Municipal Schwab California Municipal Schwab New York Municipal
Money Fund Money Fund Money Fund
----------------------------- ----------------------------- ---------------------------
Six months Six months Six months
ended For the ended For the ended For the
06/30/00 Year ended 06/30/00 Year ended 06/30/00 Year ended
(Unaudited) 12/31/99 (Unaudited) 12/31/99 (Unaudited) 12/31/99
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from shares sold:
Sweep Shares $ 16,431,655 $ 25,547,075 $ 9,628,982 $ 13,072,679 $ 1,850,297 $ 2,312,453
Value Advantage Shares 2,522,522 3,660,571 1,544,370 1,972,125 256,015 372,608
------------ ------------ ------------ ------------ ----------- -----------
Total 18,954,177 29,207,646 11,173,352 15,044,804 2,106,312 2,685,061
------------ ------------ ------------ ------------ ----------- -----------
Net asset value of shares issued
in reinvestment of dividends:
Sweep Shares 90,811 162,369 46,627 76,680 9,441 14,494
Value Advantage Shares 34,342 58,606 20,693 39,991 4,561 7,751
------------ ------------ ------------ ------------ ----------- -----------
Total 125,153 220,975 67,320 116,671 14,002 22,245
------------ ------------ ------------ ------------ ----------- -----------
Payments for shares
redeemed:
Sweep Shares (16,641,173) (24,865,127) (9,524,768) (12,302,903) (1,785,995) (2,190,547)
Value Advantage Shares (2,255,238) (3,068,642) (1,343,246) (1,767,460) (229,298) (322,679)
------------ ------------ ------------ ------------ ----------- -----------
Total (18,896,411) (27,933,769) (10,868,014) (14,070,363) (2,015,293) (2,513,226)
------------ ------------ ------------ ------------ ----------- -----------
Increase in net assets
from capital share
transactions $ 182,919 $ 1,494,852 $ 372,658 $ 1,091,112 $ 105,021 $ 194,080
============ ============ ============ ============ =========== ===========
</TABLE>
110
<PAGE>
PROXY VOTING RESULTS
A special meeting of the shareholders of The Charles Schwab Family of Funds was
held on June 1, 2000. The number of votes necessary to conduct the meeting and
approve each proposal was obtained, and the results of the votes of shareholders
on proposals before them are listed below:
PROPOSAL 1
Election of Trustees.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES VOTED FOR SHARES WITHHELD
---------------- ---------------
<S> <C> <C>
Charles R. Schwab 36,999,629,179 9,264,278,586
Mariann Byerwalter 36,952,086,682 9,311,821,083
Jeremiah H. Chafkin 36,969,722,337 9,294,185,428
Donald F. Dorward 36,945,789,881 9,318,117,884
William A. Hasler 36,978,892,818 9,285,014,947
Robert G. Holmes 36,967,612,764 9,296,295,001
Steven L. Scheid 36,989,702,307 9,274,205,458
Gerald B. Smith 36,981,495,311 9,282,412,454
Donald R. Stephens 36,986,833,556 9,277,074,209
Michael W. Wilsey 36,981,483,423 9,282,424,342
</TABLE>
PROPOSAL 2F
To approve changes to restrictions regarding investments in restricted or
illiquid securities.
<TABLE>
<CAPTION>
SCHWAB MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 3,108,507,650
Against 216,789,707
Abstain (includes broker non-votes) 1,047,459,585
</TABLE>
<TABLE>
<CAPTION>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 2,038,268,487
Against 101,959,786
Abstain (includes broker non-votes) 673,616,675
</TABLE>
<TABLE>
<CAPTION>
SCHWAB NEW YORK MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 343,507,855
Against 15,213,290
Abstain (includes broker non-votes) 138,757,095
</TABLE>
111
<PAGE>
PROXY VOTING RESULTS (continued)
PROPOSAL 2H
To approve changes to restrictions regarding the beneficial ownership of
securities by fund officers and trustees.
<TABLE>
<CAPTION>
SCHWAB MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 3,123,147,963
Against 200,166,645
Abstain (includes broker non-votes) 1,049,442,334
</TABLE>
<TABLE>
<CAPTION>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 2,040,961,092
Against 98,139,779
Abstain (includes broker non-votes) 674,744,077
</TABLE>
<TABLE>
<CAPTION>
SCHWAB NEW YORK MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 345,094,638
Against 13,430,420
Abstain (includes broker non-votes) 138,953,182
</TABLE>
PROPOSAL 2I
To approve changes to restrictions regarding industry concentration.
<TABLE>
<CAPTION>
SCHWAB MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 3,123,846,738
Against 200,163,417
Abstain (includes broker non-votes) 1,048,746,787
</TABLE>
<TABLE>
<CAPTION>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 2,043,355,843
Against 96,080,854
Abstain (includes broker non-votes) 674,408,251
</TABLE>
112
<PAGE>
<TABLE>
<CAPTION>
SCHWAB NEW YORK MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 344,243,553
Against 13,946,780
Abstain (includes broker non-votes) 139,287,907
</TABLE>
PROPOSAL 2J
To approve changes to restrictions regarding investments in commodities, futures
contracts and real estate.
<TABLE>
<CAPTION>
SCHWAB MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 3,112,382,067
Against 212,466,705
Abstain (includes broker non-votes) 1,047,908,170
</TABLE>
<TABLE>
<CAPTION>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 2,034,881,763
Against 105,486,092
Abstain (includes broker non-votes) 673,477,093
</TABLE>
<TABLE>
<CAPTION>
SCHWAB NEW YORK MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 344,388,382
Against 14,587,688
Abstain (includes broker non-votes) 138,502,170
</TABLE>
PROPOSAL 2K
To approve changes to restrictions regarding the underwriting of securities.
<TABLE>
<CAPTION>
SCHWAB MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 3,126,668,487
Against 199,250,463
Abstain (includes broker non-votes) 1,046,837,992
</TABLE>
113
<PAGE>
PROXY VOTING RESULTS (continued)
<TABLE>
<CAPTION>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 2,041,831,625
Against 99,218,832
Abstain (includes broker non-votes) 672,794,491
</TABLE>
<TABLE>
<CAPTION>
SCHWAB NEW YORK MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 344,423,508
Against 13,992,613
Abstain (includes broker non-votes) 139,062,119
</TABLE>
PROPOSAL 2L
To approve changes to restrictions regarding control of an issuer.
<TABLE>
<CAPTION>
SCHWAB MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 3,123,927,840
Against 200,249,494
Abstain (includes broker non-votes) 1,048,579,608
</TABLE>
<TABLE>
<CAPTION>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 2,038,299,462
Against 100,655,735
Abstain (includes broker non-votes) 674,889,751
</TABLE>
<TABLE>
<CAPTION>
SCHWAB NEW YORK MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 344,492,497
Against 14,056,161
Abstain (includes broker non-votes) 138,929,582
</TABLE>
114
<PAGE>
PROPOSAL 2M
To approve changes to restrictions regarding purchases of oil, gas, or mineral
interests.
<TABLE>
<CAPTION>
SCHWAB MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 3,119,465,051
Against 204,330,744
Abstain (includes broker non-votes) 1,048,961,147
</TABLE>
<TABLE>
<CAPTION>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 2,033,154,419
Against 105,776,064
Abstain (includes broker non-votes) 674,914,465
</TABLE>
<TABLE>
<CAPTION>
SCHWAB NEW YORK MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 345,296,760
Against 12,987,006
Abstain (includes broker non-votes) 139,194,474
</TABLE>
PROPOSAL 2N
To approve changes to restrictions regarding non-diversification.
<TABLE>
<CAPTION>
SCHWAB CALIFORNIA MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 2,032,180,992
Against 107,318,544
Abstain (includes broker non-votes) 674,345,412
</TABLE>
<TABLE>
<CAPTION>
SCHWAB NEW YORK MUNICIPAL MONEY FUND:
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 342,175,033
Against 16,207,837
Abstain (includes broker non-votes) 139,095,370
</TABLE>
115
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THE SCHWABFUNDS FAMILY-REGISTERED TRADEMARK-
SchwabFunds-Registered Trademark- offers 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.
METHODS FOR PLACING ORDERS
The information below outlines how Schwab brokerage account investors can place
orders. If you are investing through a third-party investment provider, methods
for placing orders may be different.
PHONE
Call 800-435-4000, day or night (for TDD service, call 800-345-2550).
INTERNET
www.schwab.com/schwabfunds
MAIL
Write to SchwabFunds at:
P. O. Box 7575, San Francisco, CA 94120-7575
When selling or exchanging shares, be sure to include the signatures of at least
one of the persons whose name is on the account.
IN PERSON
Visit the nearest Charles Schwab office.
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-Registered Trademark- Fund
Schwab 1000 Fund-Registered Trademark-
Schwab Analytics Fund-Registered Trademark-
Schwab Focus Funds:
Communications Focus Fund
Financial Services Focus Fund
HealthCare Focus Fund
Technology Focus Fund
Schwab Small-Cap Index Fund-Registered Trademark-
Schwab MarketManager Small Cap Portfolio
Schwab Total Stock Market Index Fund-TM-
Schwab International Index Fund-Registered Trademark-
Schwab MarketManager International Portfolio
SCHWAB BOND FUNDS
Schwab YieldPlus Fund-TM-
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 FUNDS
Schwab offers an array of money funds that seek high current income consistent
with stability of capital and liquidity.(1) Refer to page 3 of this report for
more information.
(1)Investments in money funds are neither insured nor guaranteed by the Federal
Deposit Insurance Corporation (FDIC) or any other government agency and,
although money funds seek to preserve the value of your investment at $1 per
share, it is possible to lose money.
<PAGE>
[LOGO]
INVESTMENT ADVISER
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
DISTRIBUTOR
Charles Schwab & Co., Inc.
P.O. Box 7575, San Francisco, CA 94120-7575
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
-C-2000 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
Printed on recycled paper. MKT3603-3 (8/00)
<PAGE>
SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
GOVERNMENT
CASH RESERVES
SEMIANNUAL REPORT
AND
AN IMPORTANT NOTICE REGARDING
DELIVERY OF SHAREHOLDER
DOCUMENTS
June 30, 2000
<PAGE>
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission permits mutual funds to deliver only one
copy of shareholder documents, including prospectuses and shareholder reports,
to fund investors with multiple accounts at the same residential or post office
box address. This practice is commonly called "householding" and is intended to
eliminate duplicate mailings of shareholder documents.
Mailings of your SchwabFunds-Registered Trademark- shareholder documents may be
householded indefinitely unless you instruct us otherwise.
ADDITIONAL COPIES OF SHAREHOLDER DOCUMENTS
ALL SCHWABFUNDS PROSPECTUSES AND SHAREHOLDER REPORTS ARE AVAILABLE FREE OF
CHARGE AND MAY BE REQUESTED AT ANY TIME BY CALLING SCHWAB AS INDICATED BELOW.
SCHWABFUNDS PROSPECTUSES ARE ALSO AVAILABLE ON OUR WEB SITE AT
WWW.SCHWAB.COM/SCHWABFUNDS.
NOTIFICATION INSTRUCTIONS
If you would prefer that your SchwabFunds mailings not be householded, please
contact:
- SCHWAB SIGNATURE SERVICES-TM- CLIENTS: Schwab Signature Services.
- INVESTMENT MANAGER CLIENTS: Schwab at 800-515-2157, or your investment
manager.
- ALL OTHER CLIENTS: Schwab at 800-435-4000.
Your instructions that householding not apply to your accounts holding
SchwabFunds will be effective within 30 days of receipt by Schwab.
<PAGE>
SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
GOVERNMENT
CASH RESERVES
Semiannual Report
June 30, 2000
<PAGE>
SCHWAB GOVERNMENT CASH RESERVES
We're pleased to bring you this semiannual report for the Schwab Government Cash
Reserves (the fund) for the six-month period ended June 30, 2000.
During the reporting period, the fund continued to provide investors with
current income combined with stability of capital and liquidity. In addition, it
also offered the convenient automatic investment ("sweep") of cash balances in
your Schwab Access-TM- account. In the following pages, we'll provide you with
an overview of the economic events that occurred over the reporting period.
Please remember that an investment in the fund is neither insured nor guaranteed
by the Federal Deposit Insurance Corporation (FDIC) or any other government
agency and although the fund seeks to preserve the value of your investment at
$1 per share, it is possible to lose money by investing in the fund.
CONTENTS
<TABLE>
<S> <C>
---------------------------------------------
A Message from the Chairman 1
---------------------------------------------
Market Overview 2
---------------------------------------------
Portfolio Management 6
---------------------------------------------
Fund Performance and Portfolio
Composition 7
---------------------------------------------
Glossary of Terms 8
---------------------------------------------
Portfolio Highlights 9
---------------------------------------------
Financial Statements and Notes 10
---------------------------------------------
</TABLE>
<PAGE>
A MESSAGE FROM THE CHAIRMAN
[PHOTO]
Dear Shareholder,
During the last few years, the benefits of investing have been readily apparent,
while the risks have been somewhat less obvious. In recent months, however,
investors have been subject to larger swings in the market, even within the span
of a single day.
Given this divergent environment, the message is clear: Expect volatility,
maintain a long-term view and ensure your investment strategy is appropriate for
your risk tolerance and time horizon. One way to lessen the impact of volatility
on your portfolio is to adequately diversify your investments, both within and
across asset sectors, namely cash equivalents, bonds and stocks. With its broad
range of funds, SchwabFunds-Registered Trademark- can help form the foundation
of a diversified investment plan. Our asset allocation funds can even provide
diversification within a single fund.
We recently added four new sector funds, the Schwab Focus Funds, to our
SchwabFunds offering. Each invests in a group of industries within a specific
sector--Communications, Financial Services, Healthcare and Technology--and can
be an effective complement to individual stock investing. Each Focus Fund
concentrates its investing in companies in a specific sector and may involve a
greater degree of risk than an investment in mutual funds with greater
diversification. For more information on the Schwab Focus Funds, please call
800-435-4000 and request a prospectus. The prospectus contains more information
on fund fees and expenses as well as risks. Please read it carefully before
investing.
As a leader in online brokerage, we recognize the value of the web as a means of
communicating timely, relevant information to investors. Regular updates on all
of the SchwabFunds, including performance data, are available on our Web site at
www.schwab.com/schwabfunds. We encourage you to take advantage of this valuable
resource.
Thank you for your investment in SchwabFunds. For our part, we at SchwabFunds
will do everything we can to warrant the trust you have placed in us.
Sincerely,
/s/ Charles R. Schwab
Charles R. Schwab
June 30, 2000
1
<PAGE>
MARKET OVERVIEW
U.S. ECONOMIC GROWTH REMAINS STRONG
April 2000 marked the beginning of the tenth year of the current economic
expansion, the longest in U.S. history. Gross Domestic Product (GDP) grew at a
real (inflation adjusted) rate of 4.6% during 1999--the fourth consecutive year
at 4% or more--and 5.0% during the first half of 2000. These rates are
considered by most economists and the Federal Reserve (Fed) to be in excess of
what the economy can absorb without experiencing inflationary pressures--perhaps
3.5% to 4.0%. High levels of consumer spending fueled by rising incomes,
personal wealth and consumer confidence, as well as strong business capital
investment and a healthy housing sector, have been the principal factors driving
this lengthy expansion.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REAL GROSS DOMESTIC PRODUCT
QUARTERLY PERCENTAGE CHANGE (ANNUALIZED RATE)
<S> <C>
Q1 1990 5.00%
Q2 1990 1.00%
Q3 1990 -0.60%
Q4 1990 -3.00%
Q1 1991 -1.70%
Q2 1991 2.60%
Q3 1991 1.30%
Q4 1991 2.50%
Q1 1992 4.30%
Q2 1992 4.00%
Q3 1992 3.10%
Q4 1992 5.20%
Q1 1993 -0.70%
Q2 1993 2.10%
Q3 1993 1.50%
Q4 1993 6.00%
Q1 1994 3.60%
Q2 1994 5.70%
Q3 1994 2.20%
Q4 1994 5.10%
Q1 1995 1.50%
Q2 1995 0.80%
Q3 1995 3.20%
Q4 1995 3.30%
Q1 1996 2.90%
Q2 1996 6.90%
Q3 1996 2.20%
Q4 1996 4.90%
Q1 1997 4.90%
Q2 1997 5.10%
Q3 1997 4.00%
Q4 1997 3.10%
Q1 1998 6.70%
Q2 1998 2.10%
Q3 1998 3.80%
Q4 1998 5.90%
Q1 1999 3.70%
Q2 1999 1.90%
Q3 1999 5.70%
Q4 1999 7.30%
Q1 2000 4.80%
Q2 2000 5.20%
Source: BLOOMBERG L.P.
</TABLE>
Looking ahead, the availability of scarce labor resources and domestic
consumers' responses to continued market volatility may be key determinants of
whether the economy continues on its current course or softens in the second
half of 2000. The Fed has raised the federal funds rate a total of 1.75% since
June 1999.
Although preliminary signs may indicate a second half slowdown in the vigorous
growth rate of the economy, opinions vary with regard to future federal funds
rate increases. Most economists do agree, however, that the U.S. economy appears
poised for continued strong growth in 2000, albeit at lower rates than
experienced in the first half.
UNEMPLOYMENT CONTINUES TO BE VERY LOW
As employment growth continues to exceed population growth, the unemployment
rate remains very low. In fact, the 3.9% rate for April 2000 represented the
lowest level in 30 years. Labor markets continue to be extremely tight in many
areas of the country, reflecting a shrinking pool of available workers.
Another closely watched metric, the labor force participation rate, which
measures the employment population as a percentage of the total population, is
at a post-war high. While growth in the labor force has recently declined, the
Fed has expressed its concern that continued tight labor markets and the related
increases in wages may put further pressure on manufacturers and service
providers to raise prices.
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 6.8%
Feb-94 6.6%
Mar-94 6.5%
Apr-94 6.4%
May-94 6.1%
Jun-94 6.1%
Jul-94 6.3%
Aug-94 6.0%
Sep-94 5.8%
Oct-94 5.8%
Nov-94 5.6%
Dec-94 5.5%
Jan-95 5.6%
Feb-95 5.4%
Mar-95 5.3%
Apr-95 5.8%
May-95 5.8%
Jun-95 5.6%
Jul-95 5.6%
Aug-95 5.7%
Sep-95 5.6%
Oct-95 5.5%
Nov-95 5.7%
Dec-95 5.6%
Jan-96 5.6%
Feb-96 5.5%
Mar-96 5.6%
Apr-96 5.5%
May-96 5.6%
Jun-96 5.3%
Jul-96 5.5%
Aug-96 5.1%
Sep-96 5.2%
Oct-96 5.2%
Nov-96 5.3%
Dec-96 5.4%
Jan-97 5.3%
Feb-97 5.3%
Mar-97 5.1%
Apr-97 5.0%
May-97 4.7%
Jun-97 5.0%
Jul-97 4.7%
Aug-97 4.9%
Sep-97 4.7%
Oct-97 4.7%
Nov-97 4.6%
Dec-97 4.7%
Jan-98 4.5%
Feb-98 4.6%
Mar-98 4.6%
Apr-98 4.3%
May-98 4.3%
Jun-98 4.5%
Jul-98 4.5%
Aug-98 4.5%
Sep-98 4.5%
Oct-98 4.5%
Nov-98 4.4%
Dec-98 4.3%
Jan-99 4.3%
Feb-99 4.4%
Mar-99 4.2%
Apr-99 4.3%
May-99 4.2%
Jun-99 4.3%
Jul-99 4.3%
Aug-99 4.2%
Sep-99 4.2%
Oct-99 4.1%
Nov-99 4.1%
Dec-99 4.1%
Jan-00 4.0%
Feb-00 4.1%
Mar-00 4.1%
Apr-00 3.9%
May-00 4.1%
Jun-00 4.0%
Source: BLOOMBERG L.P.
</TABLE>
2
<PAGE>
INFLATION REMAINS CONTAINED, BUT CONCERNS EMERGE
Virtually all measures of price inflation exhibited upward trends during the
reporting period. The Consumer Price Index (CPI) rose 3.7% for the year ended
June 2000. CPI's core rate (which excludes the more volatile food and energy
components) trended up to 2.4%. The Personal Consumption Expenditures Index, a
measure of inflation closely watched by the Fed, rose 2.6% for the same period.
The GDP price deflator, the broadest measure of inflation, indicated prices
rising at an annual rate of 2.9% during the first half of 2000.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMPLOYMENT COST INDEX CONSUMER PRICE INDEX
MEASURES OF INFLATION 12 - MONTH CHANGE (QUARTERLY) 12 - MONTH CHANGE (MONTHLY)
<S> <C> <C>
Jan-90 5.5% 5.2%
Feb-90 5.5% 5.3%
Mar-90 5.5% 5.2%
Apr-90 5.4% 4.7%
May-90 5.4% 4.4%
Jun-90 5.4% 4.7%
Jul-90 5.2% 4.8%
Aug-90 5.2% 5.6%
Sep-90 5.2% 6.2%
Oct-90 4.9% 6.3%
Nov-90 4.9% 6.3%
Dec-90 4.9% 6.1%
Jan-91 4.6% 5.7%
Feb-91 4.6% 5.3%
Mar-91 4.6% 4.9%
Apr-91 4.6% 4.9%
May-91 4.6% 5.0%
Jun-91 4.6% 4.7%
Jul-91 4.3% 4.4%
Aug-91 4.3% 3.8%
Sep-91 4.3% 3.4%
Oct-91 4.3% 2.9%
Nov-91 4.3% 3.0%
Dec-91 4.3% 3.1%
Jan-92 4.0% 2.6%
Feb-92 4.0% 2.8%
Mar-92 4.0% 3.2%
Apr-92 3.6% 3.2%
May-92 3.6% 3.0%
Jun-92 3.6% 3.1%
Jul-92 3.5% 3.2%
Aug-92 3.5% 3.1%
Sep-92 3.5% 3.0%
Oct-92 3.5% 3.2%
Nov-92 3.5% 3.0%
Dec-92 3.5% 2.9%
Jan-93 3.5% 3.3%
Feb-93 3.5% 3.2%
Mar-93 3.5% 3.1%
Apr-93 3.6% 3.2%
May-93 3.6% 3.2%
Jun-93 3.6% 3.0%
Jul-93 3.6% 2.8%
Aug-93 3.6% 2.8%
Sep-93 3.6% 2.7%
Oct-93 3.5% 2.8%
Nov-93 3.5% 2.7%
Dec-93 3.5% 2.7%
Jan-94 3.2% 2.5%
Feb-94 3.2% 2.5%
Mar-94 3.2% 2.5%
Apr-94 3.2% 2.4%
May-94 3.2% 2.3%
Jun-94 3.2% 2.5%
Jul-94 3.2% 2.8%
Aug-94 3.2% 2.9%
Sep-94 3.2% 3.0%
Oct-94 3.0% 2.6%
Nov-94 3.0% 2.7%
Dec-94 3.0% 2.7%
Jan-95 2.9% 2.8%
Feb-95 2.9% 2.9%
Mar-95 2.9% 2.9%
Apr-95 2.9% 3.1%
May-95 2.9% 3.2%
Jun-95 2.9% 3.0%
Jul-95 2.7% 2.8%
Aug-95 2.7% 2.6%
Sep-95 2.7% 2.5%
Oct-95 2.7% 2.8%
Nov-95 2.7% 2.6%
Dec-95 2.7% 2.5%
Jan-96 2.8% 2.7%
Feb-96 2.8% 2.7%
Mar-96 2.8% 2.8%
Apr-96 2.9% 2.9%
May-96 2.9% 2.9%
Jun-96 2.9% 2.8%
Jul-96 2.8% 3.0%
Aug-96 2.8% 2.9%
Sep-96 2.8% 3.0%
Oct-96 2.9% 3.0%
Nov-96 2.9% 3.3%
Dec-96 2.9% 3.3%
Jan-97 2.9% 3.0%
Feb-97 2.9% 3.0%
Mar-97 2.9% 2.8%
Apr-97 2.8% 2.5%
May-97 2.8% 2.2%
Jun-97 2.8% 2.3%
Jul-97 3.0% 2.2%
Aug-97 3.0% 2.2%
Sep-97 3.0% 2.2%
Oct-97 3.3% 2.1%
Nov-97 3.3% 1.8%
Dec-97 3.3% 1.7%
Jan-98 3.3% 1.6%
Feb-98 3.3% 1.4%
Mar-98 3.3% 1.4%
Apr-98 3.5% 1.4%
May-98 3.5% 1.7%
Jun-98 3.5% 1.7%
Jul-98 3.7% 1.7%
Aug-98 3.7% 1.6%
Sep-98 3.7% 1.5%
Oct-98 3.4% 1.5%
Nov-98 3.4% 1.5%
Dec-98 3.4% 1.6%
Jan-99 3.0% 1.7%
Feb-99 3.0% 1.6%
Mar-99 3.0% 1.7%
Apr-99 3.2% 2.3%
May-99 3.2% 2.1%
Jun-99 3.2% 2.0%
Jul-99 3.1% 2.1%
Aug-99 3.1% 2.3%
Sep-99 3.1% 2.6%
Oct-99 3.4% 2.6%
Nov-99 3.4% 2.6%
Dec-99 3.4% 2.7%
Jan-00 4.3% 2.7%
Feb-00 4.3% 3.2%
Mar-00 4.3% 3.7%
Apr-00 4.4% 3.0%
May-00 4.4% 3.1%
Jun-00 4.4% 3.7%
Source: BLOOMBERG L.P. AND BUREAU OF LABOR STATISTICS
</TABLE>
Wage inflation also exhibited a marked upward trend during the reporting period,
as indicated by the Employment Cost Index (ECI). The ECI which measures the cost
of employing workers, including both wages and benefits, rose 4.4% for the year
ended June 2000.
Although these rates of inflation and employment cost may not be alarmingly high
by historical standards, the Fed has demonstrated its resolve to keep inflation
at bay in both its communications and its actions (six federal funds rate
increases since June 1999).
The Fed also has expressed concern that if labor markets continue to tighten,
increases in wages may outpace productivity growth and place additional upward
pressure on prices. Productivity growth becomes particularly critical in this
environment as it enables companies to pay higher wages without raising prices.
Non-farm productivity grew 3.0% in 1999 and at a healthy 3.6% rate in the first
half of 2000.
ASSET CLASS PERFORMANCE--SMALL-CAPS AND TECH STOCKS ARE VOLATILE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ASSET CLASS PERFORMANCE LEHMAN RUSSELL 2000
AGGREGATE MSCI-EAFE SMALL-CAP S&P 500
BOND INDEX INDEX INDEX INDEX
<S> <C> <C> <C> <C>
1/7/00 -0.06% -4.56% -3.23% -1.89%
1/14/00 -0.52% -2.21% 0.60% -0.28%
1/21/00 -0.68% -4.39% 5.82% -1.90%
1/28/00 -0.01% -4.83% 0.05% -7.42%
2/4/00 0.12% -2.85% 4.21% -2.99%
2/11/00 -0.17% -2.30% 6.54% -5.53%
2/18/00 0.37% -3.76% 8.26% -8.32%
2/25/00 1.02% -3.01% 10.45% -9.19%
3/3/00 1.20% -0.97% 18.72% -3.92%
3/10/00 1.00% -0.99% 19.84% -4.88%
3/17/00 1.69% -2.17% 14.09% -0.15%
3/24/00 1.57% -0.25% 14.01% 4.14%
3/31/00 2.20% -0.40% 7.09% 2.27%
4/7/00 3.02% -1.40% 7.88% 3.48%
4/14/00 2.95% -4.85% -9.80% -7.42%
4/21/00 2.85% -5.64% -4.23% -2.10%
4/28/00 1.90% -5.73% 0.64% -0.81%
5/5/00 0.47% -6.12% 1.98% -2.16%
5/12/00 0.34% -7.08% -2.33% -2.95%
5/19/00 0.54% -10.41% -4.56% -3.91%
5/26/00 1.64% -9.93% -8.97% -5.89%
6/2/00 2.83% -3.95% 2.11% 1.04%
6/9/00 3.15% -4.10% 4.16% -0.35%
6/16/00 4.02% -4.46% 2.37% 0.17%
6/23/00 3.05% -5.35% 1.75% -1.40%
6/30/00 3.99% -4.06% 3.04% -0.42%
</TABLE>
COMPILED BY CHARLES SCHWAB & CO., INC.
As shown on the chart above, equity valuations, and particularly those of
small-cap and technology stocks, exhibited extreme volatility during the
reporting period.
The price/earnings (P/E) ratio for the NASDAQ 100 Index fell by 33% in just 14
trading days in March and
3
<PAGE>
MARKET OVERVIEW (continued)
April. Remarkably, it still remained at levels above 100 even after this
precipitous decline.
Small-cap stocks, as represented by the Russell 2000 Index, achieved a total
return of 3.04% for the six-month reporting period. Large cap stocks, as
represented by the S&P 500 Index, produced a negative return of -0.42% for the
same period.
Dampened by relatively weak foreign currencies, international stocks, as
represented by the MSCI EAFE Index, achieved a negative return of -4.06% for the
reporting period. Fixed income returns, on the other hand, were generally
positive for the reporting period, reflecting a decline in intermediate and
long-term interest rates. Bond returns, as represented by the Lehman Brothers
Aggregate Bond Index, were 3.99% for the six-month reporting period.
TREASURY BOND YIELDS--THE YIELD CURVE INVERTS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
10-YEAR AND FIVE-YEAR TREASURY BOND YIELDS 10-YEAR TREASURY BOND YIELD FIVE-YEAR TREASURY NOTE YIELD
<S> <C> <C>
1/7/00 6.52% 6.41%
1/14/00 6.68% 6.58%
1/21/00 6.77% 6.63%
1/28/00 6.66% 6.66%
2/4/00 6.55% 6.65%
2/11/00 6.60% 6.70%
2/18/00 6.49% 6.68%
2/25/00 6.33% 6.47%
3/3/00 6.39% 6.59%
3/10/00 6.38% 6.60%
3/17/00 6.19% 6.45%
3/24/00 6.19% 6.50%
3/31/00 6.00% 6.31%
4/7/00 5.58% 6.18%
4/14/00 5.58% 6.11%
4/21/00 5.99% 6.24%
4/28/00 6.21% 6.54%
5/5/00 6.51% 6.76%
5/12/00 6.51% 6.77%
5/19/00 6.49% 6.70%
5/26/00 6.33% 6.57%
6/2/00 6.15% 6.37%
6/9/00 6.13% 6.36%
6/16/00 5.97% 6.18%
6/23/00 6.19% 6.37%
6/30/00 6.03% 6.19%
Source: BLOOMBERG L.P.
</TABLE>
Treasury bond yields exhibited an unusual pattern during the reporting period.
Yields on ten and 30-year treasury securities typically exceed those of
five-year securities to compensate investors for the additional interest rate
risk associated with longer duration securities. As shown in the graph above,
however, this normal relationship reversed in January resulting in what is
referred to as a negative yield curve.
This negative yield curve is a result of the accumulating budget surpluses,
which are allowing the federal government to downsize its debt. The Treasury
Department announced earlier this year that it plans to buy back $30 billion in
debt in 2000 starting with longer-dated maturities since those payments carry
the steepest interest payment. The anticipated reduction in supply resulting
from this buyback program, as well as scaled back issuance, bid up the price of
the longer-term securities and correspondingly reduced their yields during the
reporting period.
4
<PAGE>
SHORT-TERM INTEREST RATE ON THE RISE
Short-term interest rates increased during the reporting period, due to a
combination of a robust U.S. economy and the Fed's actions to increase the
federal funds rate from 5.5% at the beginning of the reporting period (January
1, 2000) to 6.5% by the end of the reporting period (June 30, 2000).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
90-DAY COMMERCIAL PAPER THREE-MONTH 90-DAY
AND THREE-MONTH TREASURY BILL YIELDS TREASURY BILL COMMERCIAL PAPER
<S> <C> <C>
1/7/00 5.38% 5.66%
1/14/00 5.40% 5.71%
1/21/00 5.46% 5.77%
1/28/00 5.62% 5.79%
2/4/00 5.66% 5.85%
2/11/00 5.63% 5.86%
2/18/00 5.75% 5.86%
2/25/00 5.77% 5.88%
3/3/00 5.82% 5.89%
3/10/00 5.89% 5.91%
3/17/00 5.87% 6.00%
3/24/00 5.90% 6.05%
3/31/00 5.87% 6.09%
4/7/00 5.89% 6.09%
4/14/00 5.78% 6.08%
4/21/00 5.80% 6.12%
4/28/00 5.83% 6.17%
5/5/00 5.97% 6.41%
5/12/00 6.13% 6.54%
5/19/00 5.87% 6.59%
5/26/00 5.83% 6.61%
6/2/00 5.87% 6.62%
6/9/00 5.91% 6.57%
6/16/00 5.83% 6.57%
6/23/00 5.84% 6.57%
6/30/00 5.85% 6.58%
Source: BLOOMBERG L.P.
</TABLE>
THIS MARKET OVERVIEW HAS BEEN PROVIDED BY THE PORTFOLIO MANAGEMENT TEAM.
5
<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 fund's portfolio. 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.
KAREN WIGGAN--portfolio manager, has managed the Schwab Government Cash
Reserves, Schwab Government Money Fund, and the Schwab U.S. Treasury Fund since
March 1999. Karen joined Schwab in 1986, CSIM in 1991, and was promoted to her
current position in March 1999.
6
<PAGE>
SCHWAB GOVERNMENT CASH RESERVES
YIELD SUMMARY AS OF 6/30/00(1)
<TABLE>
<S> <C>
----------------------------------------------------------------
Seven-Day Current Yield 5.20%
----------------------------------------------------------------
Seven-Day Effective Yield 5.34%
----------------------------------------------------------------
</TABLE>
Please remember that money market fund yields fluctuate and past performance is
no guarantee of future results.
PORTFOLIO COMPOSITION
The Schwab Government Cash Reserves invests exclusively in short-term U.S.
government securities and repurchase agreements for these securities. The chart
to the right illustrates the composition of the fund's portfolio as of June 30,
2000, and is not indicative of the holdings after that date. A complete list of
the securities in the fund's portfolio as of June 30, 2000 is provided in the
Schedule of Investments later in this report.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION AS A PERCENTAGE
OF FUND INVESTMENTS
AS OF 6/30/00
<S> <C>
U.S. Government Securities 60.7%
Repurchase Agreements 39.3%
</TABLE>
(1) A portion of the fund's fees was reduced during the reporting period.
Without this reduction, the fund's yields would have been lower.
7
<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 values 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.
8
<PAGE>
PORTFOLIO HIGHLIGHTS
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<S> <C>
-------------------------------------------
Last seven days 5.20%
-------------------------------------------
Last three months 5.21%
-------------------------------------------
Last 12 months 4.74%
-------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
-------------------------------------------------
0-15 days 44.2% 47.2%
-------------------------------------------------
16-30 days 12.7% 12.1%
-------------------------------------------------
31-60 days 15.6% 9.1%
-------------------------------------------------
61-90 days 10.2% 15.8%
-------------------------------------------------
91-120 days 6.9% 7.6%
-------------------------------------------------
More than 120 days 10.4% 8.2%
-------------------------------------------------
Weighted average 48 days 44 days
-------------------------------------------------
</TABLE>
(1) A portion of the fund's expenses was reduced during these periods. Without
this reduction, yields would have been lower.
9
<PAGE>
SCHWAB GOVERNMENT CASH RESERVES
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES -- 60.8%
COUPON NOTES -- 3.7%
Federal Home Loan Bank
6.57%, 02/09/01 $ 2,000 $ 2,000
Federal Home Loan Mortgage
Corporation
6.41%, 01/05/01 1,340 1,340
6.61%, 02/15/01 2,318 2,295
Federal National Mortgage Association
6.31%, 07/24/00 2,500 2,498
6.20%, 12/01/00 1,000 999
6.10%, 12/07/00 1,000 999
--------
10,131
--------
DISCOUNT NOTES -- 57.1%
Federal Farm Credit Bank
5.98%, 07/07/00 3,907 3,903
Federal Home Loan Bank
6.16%, 07/21/00 1,425 1,420
6.50%, 08/04/00 3,576 3,554
6.56%, 09/15/00 3,000 2,959
6.62%, 09/27/00 2,000 1,968
6.35%, 09/29/00 3,000 2,954
6.52%, 03/01/01 1,000 959
Federal Home Loan Mortgage
Corporation
6.14%, 07/06/00 3,000 2,997
6.52%, 07/11/00 1,000 998
6.50%, 07/18/00 2,000 1,994
5.98%, 07/20/00 2,000 1,994
6.13%, 07/20/00 8,000 7,974
6.46%, 07/25/00 2,900 2,888
5.70%, 07/28/00 1,000 996
6.17%, 07/28/00 4,921 4,899
6.48%, 08/01/00 2,773 2,758
6.14%, 08/17/00 1,000 992
6.24%, 08/17/00 2,000 1,984
6.52%, 08/17/00 2,000 1,983
6.23%, 09/14/00 2,000 1,975
6.26%, 09/14/00 2,000 1,975
6.31%, 09/14/00 2,000 1,974
6.57%, 09/21/00 1,000 985
6.60%, 09/21/00 2,000 1,970
6.62%, 09/28/00 3,000 2,952
6.72%, 03/29/01 2,000 1,905
Federal National Mortgage Association
6.00%, 07/06/00 1,931 1,929
6.13%, 07/06/00 3,740 3,737
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
6.01%, 07/13/00 $ 2,000 $ 1,996
6.14%, 07/13/00 3,000 2,994
6.16%, 07/13/00 3,000 2,994
6.49%, 07/17/00 1,400 1,396
6.53%, 07/18/00 1,200 1,196
5.98%, 07/20/00 1,000 997
5.84%, 07/21/00 2,000 1,994
6.00%, 07/27/00 1,000 996
6.05%, 07/27/00 2,000 1,992
6.49%, 08/03/00 1,200 1,193
6.59%, 08/03/00 1,069 1,063
6.51%, 08/09/00 2,100 2,085
6.09%, 08/10/00 2,000 1,987
6.12%, 08/17/00 2,000 1,985
6.51%, 08/17/00 1,926 1,910
6.54%, 08/17/00 1,003 995
6.60%, 08/24/00 2,536 2,511
6.14%, 08/31/00 3,000 2,970
6.61%, 08/31/00 2,884 2,852
6.25%, 09/07/00 2,000 1,977
6.24%, 09/08/00 2,000 1,977
6.25%, 09/14/00 3,000 2,962
6.27%, 09/21/00 2,000 1,972
6.32%, 09/21/00 2,000 1,972
6.62%, 09/21/00 2,000 1,970
6.32%, 09/28/00 2,000 1,970
6.37%, 09/28/00 4,000 3,939
6.63%, 09/28/00 2,000 1,968
6.59%, 10/02/00 2,000 1,967
6.34%, 10/05/00 3,000 2,951
6.75%, 10/05/00 1,292 1,271
6.37%, 10/12/00 1,481 1,455
6.38%, 10/19/00 4,000 3,924
6.39%, 10/19/00 5,000 4,905
6.79%, 10/19/00 1,510 1,480
6.83%, 11/02/00 1,378 1,347
6.88%, 11/16/00 1,000 974
6.75%, 11/22/00 2,000 1,948
6.75%, 12/07/00 2,000 1,942
6.76%, 12/07/00 4,000 3,884
6.72%, 12/14/00 2,000 1,940
--------
156,377
--------
TOTAL U.S. GOVERNMENT SECURITIES
(Cost $166,508) 166,508
--------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Maturity
Value Value
--------- ---------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 39.4% (a)
Credit Suisse First Boston, Inc. Tri-Party
Repurchase Agreement Collateralized
by U.S. Government Securities
6.90% Issue 06/30/00
Due 07/03/00 $32,817 $ 32,798
Lehman Brothers, Inc. Tri-Party
Repurchase Agreement Collateralized
by U.S. Government Securities
6.45% Issue 06/07/00
Due 07/07/00 10,054 10,000
Morgan Stanley & Co., Inc. Tri-Party
Repurchase Agreement Collateralized
by U.S. Government Securities
6.48% Issue 06/15/00
Due 07/06/00 5,019 5,000
</TABLE>
<TABLE>
<CAPTION>
Maturity
Value Value
--------- ---------
<S> <C> <C>
Salomon Smith Barney, Inc. Tri-Party
Repurchase Agreement Collateralized
by U.S. Government Securities
6.93% Issue 06/30/00
Due 07/03/00 $50,029 $ 50,000
6.47% Issue 06/05/00
Due 07/03/00 5,025 5,000
6.47% Issue 06/05/00
Due 07/05/00 5,027 5,000
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $107,798) 107,798
--------
TOTAL INVESTMENTS -- 100.2%
(Cost $274,306) 274,306
--------
OTHER ASSETS AND LIABILITIES -- (0.2%)
Other assets 516
Liabilities (941)
--------
(425)
--------
TOTAL NET ASSET -- 100.0% $273,881
========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
Yields shown are effective yields at the time of purchase, except for U.S.
government coupon notes, which reflect the coupon rate of the security. Yields
for each type of security are stated according to the market convention for that
security type. For each security, cost (for financial reporting and federal
income tax purposes) and carrying value are the same.
(a) Repurchase agreements due dates are considered the maturity date. Repurchase
agreements with due dates later than seven days from issue dates may be
subject to to seven day putable demand features for liquidity PURPOSES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
SCHWAB GOVERNMENT CASH RESERVES
STATEMENT OF ASSETS AND LIABILITIES (in thousands, except for net asset value
per share)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments, at value (Cost: $166,508) $166,508
Repurchase agreements, at value (Cost: $107,798) 107,798
Interest receivable 326
Prepaid expenses 190
--------
Total assets 274,822
--------
LIABILITIES
Payables:
Dividends 586
Transfer agency and shareholder service fees 6
Transaction services fees 294
Other liabilities 55
--------
Total liabilities 941
--------
Net assets applicable to outstanding shares $273,881
========
NET ASSETS CONSIST OF:
Paid-in capital $273,882
Accumulated net realized loss on investments sold (1)
---------
$273,881
========
PRICING OF SHARES
Outstanding shares, $0.00001 par value (unlimited shares authorized) 273,882
Net asset value, offering and redemption price per share $ 1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
SCHWAB GOVERNMENT CASH RESERVES
STATEMENT OF OPERATIONS (in thousands)
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Interest income $7,756
------
Expenses:
Investment advisory and administration fees 485
Transfer agency and shareholder service fees 575
Transaction service fees 419
Custodian and portfolio accounting fees 62
Registration fees 75
Professional fees 14
Shareholder reports 34
Trustees' fees 7
Proxy fees 17
Other expenses 5
------
1,693
Less: expenses reduced (see Note 4) (426)
------
Net expenses incurred by fund 1,267
------
Net investment income 6,489
------
Increase in net assets resulting from operations $6,489
======
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
SCHWAB GOVERNMENT CASH RESERVES
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
<TABLE>
<CAPTION>
Six months
ended Year
06/30/00 ended
(Unaudited) 12/31/99
----------- -----------
<S> <C> <C>
Operations:
Net investment income $ 6,489 $ 3,498
----------- -----------
Increase in net assets resulting from operations 6,489 3,498
----------- -----------
Dividends to shareholders from net investment income (see Note 2): (6,489) (3,498)
----------- -----------
Capital share transactions (at $1.00 per share):
Proceeds from shares sold 1,837,291 1,075,198
Net asset value of shares issued in reinvestment of dividends 5,555 3,411
Payments for shares redeemed (1,766,842) (905,988)
----------- -----------
Increase in net assets from capital share transactions 76,004 172,621
----------- -----------
Total increase in net assets 76,004 172,621
Net assets:
Beginning of period 197,877 25,256
----------- -----------
End of period $ 273,881 $ 197,877
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
SCHWAB GOVERNMENT CASH RESERVES
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED 12/31 2000(1) 1999 1998(2)
<S> <C> <C> <C>
PER-SHARE DATA ($)
-------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00
-----------------------------------------
Income from investment operations:
Net investment income 0.03 0.04 0.03
-----------------------------------------
Total from investment operations 0.03 0.04 0.03
Less distributions:
Dividends from net investment income (0.03) (0.04) (0.03)
-----------------------------------------
Total distributions (0.03) (0.04) (0.03)
-----------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00
-----------------------------------------
Total return (%) 2.54(3) 4.28 3.46(3)
RATIOS/SUPPLEMENTAL DATA (%)
-------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.98(4,5) 0.95 0.95(4)
Expense reductions reflected in above ratio 0.34(4) 0.14 0.77(4)
Ratio of net investment income to average net assets 5.08(4) 4.34 4.41(4)
Net assets, end of period ($x1,000) 273,881 197,877 25,256
<FN>
(1) For the six months ended June 30, 2000 (Unaudited).
(2) For the period April 1, 1998 to December 31, 1998.
(3) Not annualized.
(4) Annualized.
(5) Would have been 0.99% if certain non-routine expenses (proxy fees) had been
included.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 2000 (Unaudited)
(All dollar amounts are in thousands unless otherwise noted.)
1. DESCRIPTION OF THE FUND
Schwab Government Cash Reserves (the "fund") is a series of The Charles Schwab
Family of Funds (the "trust"), an open-end, management investment company
organized as a Massachusetts business trust on October 20, 1989 and registered
under the Investment Company Act of 1940, as amended, (the "1940 Act").
In addition to the fund, 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(R), Schwab Institutional Advantage Money Fund(R) and Schwab
Retirement Money Fund.(R) The assets of each series are segregated and accounted
for separately.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in conformity with generally
accepted accounting principles. 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 fund's 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 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.
EXPENSES -- Expenses arising in connection with the 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.
FEDERAL INCOME TAXES -- It is the fund's policy to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all net investment income and realized net capital gains, if any, to
shareholders. Therefore, no federal income tax provision is required. The fund
is considered a separate entity for federal income tax purposes.
16
<PAGE>
At December 31, 1999, the fund had $1 of unused capital loss carryforward for
federal income tax purposes, expiring on 12/31/07.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT -- The fund has an investment
advisory and administration agreement with Charles Schwab Investment Management,
Inc. (the "investment adviser"). For advisory services and facilities furnished,
the fund pays an annual fee, payable monthly, of 0.38% on the first $1 billion
of average daily net assets, 0.35% on such net assets in excess of $1 billion to
$10 billion, 0.32% on such net assets in excess of $10 billion to $20 billion,
and 0.30% on such net assets in excess of $20 billion. Prior to April 30, 1999,
the fund paid 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 net
assets in excess of $2 billion. The investment adviser has reduced a portion of
its fee for the six month period ended June 30, 2000 (see Note 4).
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The trust has transfer
agency and shareholder service agreements with Charles Schwab & Co., Inc.
("Schwab"). For services provided under these agreements, Schwab receives an
annual fee, payable monthly, of 0.25% of the fund's average daily net assets for
transfer agency services and 0.20% for shareholder services.
TRANSACTION SERVICES AGREEMENT -- The fund has a transaction services agreement
with Schwab. For services under this agreement, Schwab receives a monthly fee
based on the number and type of transaction services provided by Schwab.
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 month period ended June 30, 2000, the trust made no direct payments to its
officers or trustees who are "interested persons" within the meaning of the 1940
Act. The fund incurred fees aggregating $7 related to the trust's unaffiliated
trustees.
4. EXPENSES REDUCED BY THE INVESTMENT ADVISER AND SCHWAB
The investment adviser and Schwab agree that, through at least April 30, 2001,
the fund's total operating expenses will not exceed 1.25% of the fund's average
daily net assets, after reductions. Prior to June 15, 2000, the investment
adviser and Schwab reduced the fund's expenses so that the total operating
expenses did not exceed 0.95% of its average net assets. For the purpose of this
voluntary agreement, operating expenses do not include interest, taxes, and
certain non-routine expenses. The operating expense ratio for the six months
ended June 30, 2000 did include non-routine expenses.
For the six month period ended June 30, 2000, the total of such reductions by
the investment adviser was $426.
17
<PAGE>
PROXY VOTING RESULTS
A special meeting of the shareholders of The Charles Schwab Family of Funds was
held on June 1, 2000. The number of votes necessary to conduct the meeting and
approve each proposal was obtained, and the results of the votes of shareholders
on proposals before them are listed below:
PROPOSAL 1
Election of Trustees.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES VOTED FOR SHARES WITHHELD
---------------- ---------------
<S> <C> <C>
Charles R. Schwab 36,999,629,179 9,264,278,586
Mariann Byerwalter 36,952,086,682 9,311,821,083
Jeremiah H. Chafkin 36,969,722,337 9,294,185,428
Donald F. Dorward 36,945,789,881 9,318,117,884
William A. Hasler 36,978,892,818 9,285,014,947
Robert G. Holmes 36,967,612,764 9,296,295,001
Steven L. Scheid 36,989,702,307 9,274,205,458
Gerald B. Smith 36,981,495,311 9,282,412,454
Donald R. Stephens 36,986,833,556 9,277,074,209
Michael W. Wilsey 36,981,483,423 9,282,424,342
</TABLE>
18
<PAGE>
THE SCHWABFUNDS FAMILY-REGISTERED TRADEMARK-
SchwabFunds-Registered Trademark- offers 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.
METHODS FOR PLACING ORDERS
The information below outlines how Schwab brokerage account investors can place
orders. If you are investing through a third-party investment provider, methods
for placing orders may be different.
PHONE
Call 800-435-4000, day or night (for TDD service, call 800-345-2550).
INTERNET
www.schwab.com/schwabfunds
MAIL
Write to SchwabFunds at:
P. O. Box 7575, San Francisco, CA 94120-7575
When selling or exchanging shares, be sure to include the signatures of at least
one of the persons whose name is on the account.
IN PERSON
Visit the nearest Charles Schwab office.
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-Registered Trademark- Fund
Schwab 1000 Fund-Registered Trademark-
Schwab Analytics Fund-Registered Trademark-
Schwab Focus Funds:
Communications Focus Fund
Financial Services Focus Fund
HealthCare Focus Fund
Technology Focus Fund
Schwab Small-Cap Index Fund-Registered Trademark-
Schwab MarketManager Small Cap Portfolio
Schwab Total Stock Market Index Fund-TM-
Schwab International Index Fund-Registered Trademark-
Schwab MarketManager International Portfolio
SCHWAB BOND FUNDS
Schwab YieldPlus Fund-TM-
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 FUNDS
Schwab offers an array of money funds that seek high current income consistent
with stability of capital and liquidity.(1)
(1)Investments in money funds are neither insured nor guaranteed by the Federal
Deposit Insurance Corporation (FDIC) or any other government agency and,
although money funds seek to preserve the value of your investment at $1 per
share, it is possible to lose money.
<PAGE>
[LOGO]
INVESTMENT ADVISER
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
DISTRIBUTOR
Charles Schwab & Co., Inc.
P.O. Box 7575, San Francisco, CA 94120-7575
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
-C-2000 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
Printed on recycled paper. MKT3607-3 (8/00)
<PAGE>
SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
INSTITUTIONAL ADVANTAGE
MONEY FUND-REGISTERED TRADEMARK-
SCHWAB
RETIREMENT MONEY FUND-REGISTERED TRADEMARK-
SEMIANNUAL REPORT
AND
AN IMPORTANT NOTICE REGARDING
DELIVERY OF SHAREHOLDER
DOCUMENTS
June 30, 2000
<PAGE>
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission permits mutual funds to deliver only one
copy of shareholder documents, including prospectuses and shareholder reports,
to fund investors with multiple accounts at the same residential or post office
box address. This practice is commonly called "householding" and is intended to
eliminate duplicate mailings of shareholder documents.
Mailings of your SchwabFunds-Registered Trademark- shareholder documents may be
householded indefinitely unless you instruct us otherwise.
ADDITIONAL COPIES OF SHAREHOLDER DOCUMENTS
ALL SCHWABFUNDS PROSPECTUSES AND SHAREHOLDER REPORTS ARE AVAILABLE FREE OF
CHARGE AND MAY BE REQUESTED AT ANY TIME BY CALLING SCHWAB AS INDICATED BELOW.
SCHWABFUNDS PROSPECTUSES ARE ALSO AVAILABLE ON OUR WEB SITE AT
WWW.SCHWAB.COM/SCHWABFUNDS.
NOTIFICATION INSTRUCTIONS
If you would prefer that your SchwabFunds mailings not be householded, please
contact:
- SCHWAB SIGNATURE SERVICES-TM- CLIENTS: Schwab Signature Services.
- INVESTMENT MANAGER CLIENTS: Schwab at 800-515-2157, or your investment
manager.
- RETIREMENT PLAN ADMINISTRATORS: Schwab at 877-456-0777.
- ALL OTHER CLIENTS: Schwab at 800-435-4000.
Your instructions that householding not apply to your accounts holding
SchwabFunds will be effective within 30 days of receipt by Schwab.
<PAGE>
SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
INSTITUTIONAL ADVANTAGE
MONEY FUND-REGISTERED TRADEMARK-
SCHWAB
RETIREMENT MONEY FUND-REGISTERED TRADEMARK-
Semiannual Report
June 30, 2000
<PAGE>
CONTENTS
<TABLE>
<S> <C>
---------------------------------------------
A Message from the Chairman 1
---------------------------------------------
Portfolio Highlights 2
---------------------------------------------
Financial Statements and Notes 4
---------------------------------------------
</TABLE>
<PAGE>
A MESSAGE FROM THE CHAIRMAN
Dear Shareholder,
[PHOTO]
We're pleased to bring you this semiannual report on the performance for the
Schwab Institutional Advantage Money Fund-Registered Trademark- and the Schwab
Retirement Money Fund-Registered Trademark- (the funds) for the six-month period
ended June 30, 2000.
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 $603 million and the Schwab Retirement Money Fund's net assets
were more than $362 million.
FUND PERFORMANCE AS OF 6/30/00
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-REGISTERED TRADEMARK-(1)
<TABLE>
<S> <C>
Seven-Day Current Yield 6.14%
------------------------------------------------------------------------
Seven-Day Effective Yield 6.33%
------------------------------------------------------------------------
</TABLE>
SCHWAB RETIREMENT MONEY FUND-REGISTERED TRADEMARK-
<TABLE>
<S> <C>
Seven-Day Current Yield 5.96%
------------------------------------------------------------------------
Seven-Day Effective Yield 6.14%
------------------------------------------------------------------------
</TABLE>
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, 2000.
We appreciate your confidence in SchwabFunds-Registered Trademark- and look
forward to continuing to help you achieve your financial goals in the future.
Sincerely,
/s/ Charles R. Schwab
Charles R. Schwab
Chairman
June 30, 2000
(1) A portion of the fund's expenses was reduced during the reporting period.
Without this reduction, yields would have been lower.
1
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-REGISTERED TRADEMARK-
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00(1)
<TABLE>
<S> <C>
-------------------------------------------
Last seven days 6.14%
-------------------------------------------
Last three months 5.85%
-------------------------------------------
Last 12 months 5.36%
-------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
-------------------------------------------------
0-15 days 21.7% 27.5%
-------------------------------------------------
16-30 days 19.4% 20.9%
-------------------------------------------------
31-60 days 20.4% 11.2%
-------------------------------------------------
61-90 days 26.1% 17.2%
-------------------------------------------------
91-120 days 0.4% 10.1%
-------------------------------------------------
More than 120 days 12.0% 13.1%
-------------------------------------------------
Weighted average 63 days 63 days
-------------------------------------------------
</TABLE>
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 6/30/00
<S> <C>
----------------------------------------------------------------------------------
Tier 1 100%
----------------------------------------------------------------------------------
</TABLE>
(1) A portion of the fund's expenses was reduced during these periods. Without
this reduction, yields would have been lower.
2
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB RETIREMENT MONEY FUND-REGISTERED TRADEMARK-
AVERAGE YIELDS FOR PERIODS ENDED 6/30/00
<TABLE>
<S> <C>
-------------------------------------------
Last seven days 5.96%
-------------------------------------------
Last three months 5.64%
-------------------------------------------
Last 12 months 5.14%
-------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/00 6/30/00
<S> <C> <C>
-------------------------------------------------
0-15 days 23.0% 34.8%
-------------------------------------------------
16-30 days 14.3% 15.2%
-------------------------------------------------
31-60 days 13.4% 15.1%
-------------------------------------------------
61-90 days 37.5% 15.2%
-------------------------------------------------
91-120 days 2.1% 6.5%
-------------------------------------------------
More than 120 days 9.7% 13.2%
-------------------------------------------------
Weighted average 63 days 57 days
-------------------------------------------------
</TABLE>
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 6/30/00
<S> <C>
----------------------------------------------------------------------------------
Tier 1 100%
----------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(R)
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- 67.1%
AUTOMOBILE RECEIVABLES -- 2.2% (e)
New Center Asset Trust Plus
6.61%, 07/20/00 $13,000 $ 12,955
--------
AUTOMOTIVE -- 2.7%
FCE Bank, PLC
6.56%, 07/07/00 5,000 4,995
General Motors Acceptance Corp.
6.25%, 07/18/00 11,000 10,968
--------
15,963
--------
BANKING - BELGIUM -- 1.6% (a)
BBL North America
6.47%, 10/04/00 8,000 7,868
Fortis Funding, L.L.C.
6.49%, 08/04/00 2,000 1,988
--------
9,856
--------
BANKING - CANADA -- 2.4%
National Bank of Canada
6.48%, 09/27/00 10,000 9,847
6.47%, 10/10/00 5,000 4,912
--------
14,759
--------
BANKING - FRANCE -- 2.6%
Dexia CLF Finance Co.
6.25%, 07/17/00 1,000 997
Trident Capital Finance, Inc. (a)
6.68%, 08/09/00 15,000 14,893
--------
15,890
--------
BANKING - GERMANY -- 0.7% (d)
Comision Federal de Electricidad
6.71%, 08/04/00 4,000 3,975
--------
BANKING - NETHERLANDS -- 3.6%
Atlantis One Funding Corp. (d)
6.74%, 08/02/00 15,000 14,911
Tulip Funding Corp. (a)
6.76%, 09/27/00 7,000 6,886
--------
21,797
--------
BANKING - SPAIN -- 1.6%
BBV Finance (Delaware), Inc.
6.64%, 08/04/00 10,000 9,938
--------
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
BANKING - SWEDEN -- 0.3%
AB Spintab
6.71%, 10/30/00 $ 2,000 $ 1,956
--------
BANKING - SWITZERLAND -- 1.7%
UBS Finance (Delaware), Inc.
6.96%, 07/03/00 10,000 9,996
--------
BANKING - UNITED KINGDOM -- 1.1%
Abbey National North America Corp.
7.00%, 11/20/00 5,000 4,867
Repeat Offering Securitzation Entity, Inc. (a)
6.49%, 07/28/00 2,000 1,990
--------
6,857
--------
BANKING - UNITED STATES -- 3.0% (a)(d)
Forrestal Funding Master Trust
6.64%, 08/04/00 5,000 4,969
Kitty Hawk Funding Corp.
6.61%, 07/20/00 10,000 9,965
6.70%, 08/09/00 2,965 2,944
--------
17,878
--------
CREDIT CARD RECEIVABLES -- 4.6% (a)(e)
Dakota Certificates Program SCCMT-1
6.68%, 07/27/00 6,000 5,971
6.32%, 07/28/00 5,000 4,977
6.33%, 07/28/00 6,000 5,972
6.76%, 08/03/00 1,000 994
6.55%, 08/04/00 10,000 9,939
--------
27,853
--------
DIVERSIFIED FINANCIAL ASSETS -- 14.2% (a)(e)
Amsterdam Funding Corp.
6.59%, 07/11/00 2,000 1,996
6.69%, 08/04/00 2,000 1,987
Bavaria Universal Funding Corp.
6.59%, 07/10/00 5,000 4,992
Beta Finance, Inc.
6.76%, 09/27/00 3,000 2,951
CC (USA), Inc.
6.21%, 07/14/00 2,500 2,494
Delaware Funding Corp.
6.55%, 07/06/00 7,228 7,222
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Greyhawk Funding, L.L.C.
6.35%, 08/07/00 $ 1,000 $ 994
International Securitization Corp.
6.60%, 07/11/00 2,000 1,996
6.78%, 09/08/00 5,090 5,025
6.63%, 10/27/00 4,000 3,916
Lexington Parker Capital Corp.
6.62%, 07/07/00 4,000 3,996
6.60%, 07/13/00 5,000 4,989
6.31%, 07/21/00 3,000 2,990
Links Finance, L.L.C.
6.49%, 07/14/00 1,000 998
6.60%, 07/14/00 4,000 3,991
Market Street Funding Corp.
6.27%, 07/12/00 5,000 4,991
MOAT Funding, L.L.C.
6.74%, 09/18/00 6,000 5,913
Mont Blanc Capital Corp.
6.61%, 07/18/00 5,000 4,984
Sigma Finance, Inc.
6.62%, 07/12/00 2,600 2,595
6.73%, 09/18/00 3,000 2,956
6.50%, 10/04/00 1,150 1,131
Stellar Funding Group, Inc.
6.72%, 07/21/00 3,000 2,989
7.07%, 11/30/00 1,396 1,356
Thames Asset Global Securitization No. 1, Inc.
6.60%, 07/10/00 5,000 4,992
Variable Funding Capital Corp.
6.61%, 07/13/00 3,000 2,993
--------
85,437
--------
FINANCE - COMMERCIAL -- 0.8%
CIT Group Holdings, Inc.
6.25%, 07/18/00 5,000 4,985
--------
FINANCE - CONSUMER -- 3.5%
Associates Corp. of North America
7.00%, 07/03/00 12,000 11,995
Associates First Capital Corp.
7.00%, 07/03/00 9,000 8,997
--------
20,992
--------
INSURANCE - MULTILINE -- 0.8%
GE Financial Assurance Holdings, Inc.
6.29%, 07/18/00 5,000 4,985
--------
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
SECURITIES BROKERAGE - DEALER -- 6.7%
Bear Stearns Companies, Inc.
6.61%, 07/19/00 $ 6,000 $ 5,981
Goldman Sachs Group, LP
6.00%, 08/07/00 1,000 1,000
6.77%, 10/04/00 2,000 1,965
6.47%, 10/11/00 5,000 4,911
7.05%, 11/14/00 1,000 974
6.86%, 11/22/00 2,000 1,947
Morgan Stanley Dean Witter Discover & Co.
6.72%, 09/14/00 16,000 15,780
PaineWebber Group, Inc.
6.76%, 07/05/00 5,000 4,996
Ventures Business Trust (a)
6.72%, 09/13/00 3,000 2,959
--------
40,513
--------
TRADE RECEIVABLES -- 13.0% (a)(e)
Barton Capital Corp.
6.65%, 07/07/00 5,000 4,994
6.59%, 07/13/00 5,000 4,989
6.60%, 07/13/00 5,000 4,989
Compass Securitization, L.L.C.
6.68%, 07/24/00 2,000 1,992
Corporate Receivables Corp.
6.71%, 09/12/00 16,000 15,785
Eureka Securitization, Inc.
6.62%, 07/20/00 3,000 2,990
Giro Multi Funding Corp.
6.61%, 07/21/00 5,000 4,982
Monte Rosa Capital Corp.
6.63%, 07/20/00 5,000 4,983
Park Avenue Receivables Corp.
6.59%, 07/12/00 5,000 4,990
6.60%, 07/18/00 13,000 12,960
WCP Funding, Inc.
6.44%, 07/06/00 5,000 4,996
Windmill Funding
6.75%, 09/21/00 5,000 4,924
Wood Street Funding Corp.
6.73%, 09/18/00 5,000 4,927
--------
78,501
--------
TOTAL COMMERCIAL PAPER AND OTHER
CORPORATE OBLIGATIONS
(Cost $405,086) 405,086
--------
</TABLE>
5
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(R)
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
CERTIFICATES OF DEPOSIT -- 24.0%
BANKING - BELGIUM -- 0.5%
Credit Communal de Belgique
6.25%, 07/14/00 $ 3,000 $ 3,000
--------
BANKING - CANADA -- 2.8%
Bank of Nova Scotia
6.50%, 10/02/00 3,000 2,994
Canadian Imperial Bank of Commerce
6.75%, 03/27/01 5,000 4,999
Canadian Imperial Holdings, Inc.
6.76%, 02/12/01 8,000 7,998
National Bank of Canada
6.92%, 11/22/00 1,000 996
--------
16,987
--------
BANKING - GERMANY -- 10.1%
Deutsche Bank, AG
6.59%, 07/05/00 9,000 9,000
6.58%, 07/13/00 5,000 5,000
6.13%, 09/05/00 6,800 6,798
6.56%, 01/29/01 7,000 6,998
Dresdner Bank
6.77%, 04/19/01 5,000 5,000
Landesbank Baden Wurttemberg
7.36%, 06/05/01 5,000 5,000
Westdeutsche Landesbank Girozentrale
6.38%, 09/20/00 5,000 5,000
6.48%, 10/02/00 5,000 5,000
6.48%, 10/03/00 5,000 5,000
6.46%, 10/05/00 8,000 8,000
--------
60,796
--------
BANKING - NORWAY -- 2.5%
Christiania Bank
6.72%, 09/27/00 10,000 10,000
6.73%, 10/03/00 5,000 5,000
--------
15,000
--------
BANKING - SWITZERLAND -- 0.8%
UBS, AG
6.50%, 01/02/01 5,000 4,999
--------
BANKING - UNITED KINGDOM -- 4.8%
Barclays Bank, PLC
6.59%, 07/13/00 10,000 10,000
6.73%, 09/29/00 6,000 5,995
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
National Westminster Bank, PLC
6.70%, 02/01/01 $ 8,000 $ 7,998
7.27%, 05/09/01 5,000 4,998
--------
28,991
--------
BANKING - UNITED STATES -- 2.5%
American Express Centurion Bank
6.57%, 07/12/00 5,000 5,000
Union Bank of California
6.77%, 09/01/00 5,000 5,000
Wilmington Trust Co.
7.07%, 12/01/00 5,000 5,000
--------
15,000
--------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $144,773) 144,773
--------
VARIABLE RATE OBLIGATIONS -- 5.9% (b)
BANKING - UNITED STATES -- 3.9%
Asset Partners, Inc. Project RB Series 1997
6.80%, 07/07/00 (d) 2,610 2,610
BMC Special Care Facilities Financing
Authority of the City of Montgomery,
Alabama Taxable RB (Montgomery
Baptist Outreach Services Corp.
Project) 1997B (d)
6.70%, 07/07/00 2,200 2,200
MoviePlex Realty Leasing, L.L.C.
Adjustable Rate Tender Securities
(Carmike Cinemas, Inc.) Series 1997B3 (d)
6.62%, 07/07/00 2,675 2,675
New York City IDA Taxable Industrial
Revenue Refunding Bonds (1997 Allway
Tools, Inc. Project) (d)
7.03%, 07/07/00 190 190
Strategic Money Market Trust Series 2000B (a)
6.66%, 07/13/00 9,000 9,000
Strategic Money Market Trust Series 2000E (a)
6.67%, 07/14/00 5,000 5,000
Upper Illinois River Valley Development
Authority Taxable Solid Waste Disposal RB
(Exolon - ESK Co. Project) Series 1996B (d)
6.73%, 07/07/00 2,000 2,000
--------
23,675
--------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
DIVERSIFIED FINANCIAL ASSETS -- 0.8% (a)(e)
Sigma Finance, Inc.
6.65%, 07/25/00 $ 5,000 $ 5,000
--------
INSURANCE - MONOLINE -- 1.2% (a)
City of New Britain, Connecticut GO
6.67%, 07/07/00 7,000 7,000
--------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $35,675) 35,675
--------
BANK NOTES -- 2.5%
Bank of America, N.A.
7.06%, 12/01/00 5,000 5,000
7.20%, 06/05/01 5,000 5,000
LaSalle National Bank
7.02%, 11/20/00 5,000 5,000
--------
TOTAL BANK NOTES
(Cost $15,000) 15,000
--------
BANKERS ACCEPTANCES -- 0.8%
Fleet National Bank
6.46%, 10/02/00 5,000 4,919
--------
TOTAL BANKERS ACCEPTANCES
(Cost $4,919) 4,919
--------
</TABLE>
<TABLE>
<CAPTION>
Maturity
Value
-------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 0.9% (c)
Credit Suisse First Boston, Inc. Tri-Party
Repurchase Agreement Collateralized by
U.S. Government Securities
6.90% Issue 06/30/00
Due 07/03/00 5,098 5,095
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $5,095) 5,095
--------
TOTAL INVESTMENTS -- 101.2%
(Cost $610,548) 610,548
--------
OTHER ASSETS AND LIABILITIES -- (1.2%)
Other assets 3,281
Liabilities (10,438)
--------
(7,157)
--------
TOTAL NET ASSETS -- 100.0 $603,391
========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
7
<PAGE>
SCHWAB RETIREMENT MONEY FUND(R)
SCHEDULE OF INVESTMENTS (in thousands)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- 67.1%
AUTOMOTIVE -- 3.3%
Ford Motor Credit Co.
6.60%, 07/06/00 $ 7,000 $ 6,994
General Motors Acceptance Corp.
6.25%, 07/18/00 5,000 4,985
--------
11,979
--------
BANKING - BELGIUM -- 1.4% (a)
Fortis Funding, L.L.C.
6.14%, 07/10/00 5,000 4,993
--------
BANKING - CANADA -- 4.1%
National Bank of Canada
6.48%, 09/27/00 10,000 9,847
6.47%, 10/10/00 5,000 4,912
--------
14,759
--------
BANKING - FRANCE -- 4.7% (a)
Trident Capital Finance, Inc.
6.68%, 08/09/00 17,000 16,879
--------
BANKING - NETHERLANDS -- 4.1%
Atlantis One Funding Corp. (d)
6.74%, 08/02/00 8,000 7,953
6.69%, 08/17/00 2,000 1,983
Tulip Funding Corp. (a)
6.59%, 07/10/00 5,000 4,992
--------
14,928
--------
BANKING - NORWAY -- 2.2%
Den Norske Bank
6.71%, 09/22/00 8,000 7,878
--------
BANKING - SPAIN -- 1.4%
B.B.V. Finance (Delaware), Inc.
6.64%, 08/04/00 5,000 4,969
--------
BANKING - SWEDEN -- 0.5%
AB Spintab
6.71%, 10/30/00 2,000 1,956
--------
BANKING - UNITED KINGDOM -- 2.0%
Abbey National North America Corp.
7.00%, 11/20/00 2,500 2,433
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
United Mexican States
6.37%, 08/17/00 $ 5,000 $ 4,959
--------
7,392
--------
BANKING - UNITED STATES -- 1.4% (a)(d)
Intrepid Funding Master Trust
6.74%, 08/01/00 5,000 4,971
--------
CREDIT CARD RECEIVABLES -- 3.3% (a)(e)
Dakota Certificates Program SCCMT-1
6.68%, 07/27/00 2,000 1,990
6.32%, 07/28/00 5,000 4,977
6.55%, 08/04/00 5,000 4,970
--------
11,937
--------
DIVERSIFIED FINANCIAL ASSETS -- 16.6% (a)(e)
Bavaria Universal Funding Corp.
6.59%, 07/10/00 5,000 4,992
CC (USA), Inc.
6.21%, 07/14/00 2,000 1,996
6.50%, 09/29/00 1,000 984
Concord Minutemen Capital Co., L.L.C.
Series A
6.75%, 09/14/00 5,000 4,931
6.45%, 09/20/00 1,936 1,909
Greyhawk Funding, L.L.C.
6.35%, 08/07/00 1,000 994
International Securitization Corp.
6.60%, 07/11/00 4,000 3,993
6.63%, 10/27/00 3,000 2,937
Lexington Parker Capital Corp.
6.62%, 07/07/00 4,000 3,996
6.60%, 07/13/00 3,000 2,993
Links Finance, L.L.C.
6.49%, 07/14/00 5,000 4,988
Market Street Funding Corp.
6.27%, 07/12/00 2,000 1,996
MOAT Funding, L.L.C.
6.61%, 08/03/00 3,000 2,982
Mont Blanc Capital Corp.
6.61%, 07/18/00 5,000 4,984
6.80%, 08/15/00 2,945 2,920
Sigma Finance, Inc.
6.73%, 09/18/00 5,600 5,519
Thames Asset Global Securitization No. 1,
Inc.
6.60%, 07/10/00 4,199 4,192
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
Variable Funding Capital Corp.
6.61%, 07/13/00 $ 3,000 $ 2,994
--------
60,300
--------
FINANCE - COMMERCIAL -- 1.4%
CIT Group Holdings, Inc.
6.25%, 07/18/00 5,000 4,985
--------
FINANCE - CONSUMER -- 2.7%
Associates Corp. of North America
7.00%, 07/03/00 5,000 4,998
Associates First Capital Corp.
7.00%, 07/03/00 5,000 4,998
--------
9,996
--------
SECURITIES BROKERAGE - DEALER-- 5.9%
Bear Stearns Companies, Inc.
6.56%, 07/10/00 5,000 4,992
Goldman Sachs Group, LP
6.00%, 08/07/00 2,000 2,000
7.03%, 11/21/00 1,000 973
6.86%, 11/22/00 3,500 3,407
PaineWebber Group, Inc.
6.76%, 07/05/00 5,000 4,996
Salomon Smith Barney Holdings, Inc.
6.59%, 07/18/00 2,000 1,994
Ventures Business Trust (a)
6.72%, 09/13/00 3,000 2,959
--------
21,321
--------
TRADE RECEIVABLES -- 12.1% (a)(e)
Barton Capital Corp.
6.30%, 09/07/00 2,000 1,977
Compass Securitization, L.L.C.
6.68%, 07/24/00 1,000 996
Corporate Receivables Corp.
6.59%, 07/05/00 5,000 4,996
6.71%, 09/12/00 7,000 6,906
Eureka Securitization, Inc.
6.63%, 07/25/00 5,000 4,978
Monte Rosa Capital Corp.
6.63%, 07/20/00 5,000 4,983
Park Avenue Receivables Corp.
6.59%, 07/12/00 5,000 4,990
6.60%, 07/18/00 7,000 6,978
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
WCP Funding, Inc.
6.33%, 07/05/00 $ 2,000 $ 1,999
Wood Street Funding Corp.
6.73%, 09/18/00 5,000 4,927
--------
43,730
--------
TOTAL COMMERCIAL PAPER AND OTHER
CORPORATE OBLIGATIONS
(Cost $242,973) 242,973
--------
CERTIFICATES OF DEPOSIT -- 22.1%
BANKING - CANADA -- 1.4%
Canadian Imperial Bank of Commerce
6.76%, 02/12/01 5,000 4,999
--------
BANKING - GERMANY -- 8.3%
Deutsche Bank
6.59%, 07/05/00 9,000 9,000
6.58%, 07/13/00 5,000 5,000
6.56%, 01/29/01 3,000 2,999
Dresdner Bank AG
6.77%, 04/19/01 3,000 3,000
Landesbank Baden Wurttemberg
7.36%, 06/05/01 3,000 3,001
Westdeutsche Landesbank Girozentrale
6.38%, 09/20/00 2,000 2,000
6.46%, 10/05/00 5,000 5,000
--------
30,000
--------
BANKING - NORWAY -- 2.8%
Christiania Bank
6.72%, 09/27/00 5,000 5,000
6.73%, 10/03/00 5,000 5,000
--------
10,000
--------
BANKING - SWITZERLAND -- 0.8%
UBS, AG
6.50%, 01/02/01 3,000 2,999
--------
BANKING - UNITED KINGDOM -- 5.5%
Barclays Bank, PLC
6.59%, 07/13/00 10,000 10,000
6.73%, 09/29/00 2,000 1,998
National Westminster Bank, PLC
6.70%, 02/01/01 5,000 4,999
7.27%, 05/09/01 3,000 2,999
--------
19,996
--------
</TABLE>
9
<PAGE>
SCHWAB RETIREMENT MONEY FUND(R)
SCHEDULE OF INVESTMENTS (in thousands) (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
BANKING - UNITED STATES -- 3.3%
American Express Centurion Bank
6.57%, 07/12/00 $ 5,000 $ 5,000
Union Bank of California
6.77%, 09/01/00 2,000 2,000
Wilmington Trust Co.
7.07%, 12/01/00 5,000 5,000
--------
12,000
--------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $79,994) 79,994
--------
VARIABLE RATE OBLIGATIONS -- 7.3% (b)
BANKING - UNITED STATES -- 5.9%
California Pollution Control Financing
Authority Solid Waste Disposable RB
(Burr Properties Project) Series 1997 (d)
6.80%, 07/07/00 2,115 2,115
Eagle County, Colorado Taxable Housing
Facilities RB (BC Housing, L.L.C. Project)
Series 1997B (d)
6.68%, 07/07/00 1,500 1,500
MoviePlex Realty Leasing, L.L.C. Adjustable
Rate Tender Securities (Carmike Cinemas,
Inc.) Series 1997B2 (d)
6.62%, 07/07/00 2,675 2,675
Strategic Money Market Trust Series 2000B (a)
6.66%, 07/13/00 5,000 5,000
Strategic Money Market Trust Series 2000E (a)
6.67%, 07/14/00 4,000 4,000
Trap Rock Industries, Inc. VRD Fixed Rate
RB Series 1997 (a)(d)
6.83%, 07/07/00 2,140 2,140
Upper Illinois River Valley Development
Authority Solid Waste Disposal RB (d)
(Exolon - ESK Co. Project) Series 1996B
6.73%, 07/07/00 2,595 2,595
Village of Sturtevant, Wisconsin IDRB
(Andis Co. Project) Series 1996B (d)
6.73%, 07/07/00 1,385 1,385
--------
21,410
--------
</TABLE>
<TABLE>
<CAPTION>
Par Value
------- --------
<S> <C> <C>
DIVERSIFIED FINANCIAL ASSETS -- 1.4% (a)(e)
Sigma Finance, Inc.
6.65%, 07/25/00 $ 5,000 $ 5,000
--------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $26,410) 26,410
--------
BANK NOTES -- 2.8%
Bank of America, N.A.
7.06%, 12/01/00 5,000 5,000
LaSalle National Bank
7.02%, 11/20/00 5,000 5,000
--------
TOTAL BANK NOTES
(Cost $10,000) 10,000
--------
BANKERS ACCEPTANCES -- 0.8%
Fleet National Bank
6.46%, 10/02/00 3,060 3,010
--------
TOTAL BANKERS ACCEPTANCES
(Cost $3,010) 3,010
--------
</TABLE>
<TABLE>
<CAPTION>
Maturity
Value
--------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 1.5% (c)
Credit Suisse First Boston, Inc. Tri-Party
Repurchase Agreement Collateralized by
U.S. Government Securities
6.90% Issue 06/30/00
Due 07/03/00 5,441 5,438
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $5,438) 5,438
--------
TOTAL INVESTMENTS -- 101.6%
(Cost $367,825) 367,825
--------
OTHER ASSETS AND LIABILITIES -- (1.6%)
Other assets 1,669
Liabilities (7,442)
--------
(5,773)
--------
TOTAL NET ASSETS -- 100.0% $362,052
========
</TABLE>
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
10
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
June 30, 2000 (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) These securities can be resold to qualified institutional buyers within
seven business days. Such securities are deemed liquid in accordance with
procedures adopted by the Board of Trustees. At June 30, 2000, the
aggregate value of such securities held by the Schwab Institutional
Advantage Money Fund(R) and the Schwab Retirement Money Fund(R) was
$272,253 and $166,901 which represented 45.12% and 46.10% of net assets.
(b) Variable rate obligations have interest rates that 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) Repurchase agreements due dates are considered the maturity date.
Repurchase agreements with due dates later than seven days from issue date
may be subject to seven day putable demand features for liquidity purposes.
(d) Security has one or more third party credit enhancements.
(e) Asset-backed securities are securities backed by underlying assets and
categorized by industry.
PORTFOLIO ABBREVIATIONS
GO General Obligation Bond
IDA Industrial Development Authority
IDRB Industrial Development Revenue Bond
RB Revenue Bond
VRD Variable Rate Demand
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except for net asset value
per share)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Schwab
Institutional Schwab
Advantage Retirement
Money Fund(R) Money Fund(R)
------------- -------------
ASSETS
<S> <C> <C>
Investments, at value (Cost: $610,548 and $367,825, respectively) $610,548 $367,825
Receivables:
Fund shares sold 757 553
Interest 2,485 1,095
Prepaid expenses 39 21
-------- --------
Total assets 613,829 369,494
-------- --------
LIABILITIES
Payables:
Dividends 1,526 892
Investments purchased 5,000 5,000
Fund shares redeemed 3,841 1,487
Investment advisory and administration fees 6 8
Transfer agency and shareholder service fees 8 5
Other liabilities 57 50
-------- --------
Total liabilities 10,438 7,442
-------- --------
Net assets applicable to outstanding shares $603,391 $362,052
======== ========
NET ASSETS CONSIST OF
Paid-in capital $603,394 $362,053
Accumulated net realized loss on investments sold (3) (1)
-------- --------
$603,391 $362,052
======== ========
PRICING OF SHARES
Outstanding shares, $0.00001 par value (unlimited shares authorized) 603,452 362,110
Net asset value, offering and redemption price per share $ 1.00 $ 1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
STATEMENTS OF OPERATIONS (in thousands)
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Schwab
Institutional Schwab
Advantage Retirement
Money Fund(R) Money Fund(R)
------------- -----------
<S> <C> <C>
Interest income $18,434 $10,177
------- -------
Expenses:
Investment advisory and administration fees 1,129 623
Transfer agency and shareholder service fees 743 410
Custodian and portfolio accounting fees 96 72
Registration fees 20 35
Professional fees 8 11
Shareholder reports 8 5
Trustees' fees 6 7
Proxy fees 33 17
Other expenses 3 3
------- -------
2,046 1,183
Less: expenses reduced (see Note 4) (527) --
------- -------
Net expenses incurred by fund 1,519 1,183
------- -------
Net investment income 16,915 8,994
------- -------
Increase in net assets resulting from operations $16,915 $ 8,994
======= =======
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
<TABLE>
<CAPTION>
Schwab
Institutional Schwab
Advantage Retirement
Money Fund(R) Money Fund(R)
----------------------------- ---------------------------
Six months Six months
ended Year ended Year
06/30/00 ended 06/30/00 ended
(Unaudited) 12/31/99 (Unaudited) 12/31/99
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Operations:
Net investment income $ 16,915 $ 23,188 $ 8,994 $ 11,864
--------- ----------- --------- ---------
Increase in net assets resulting from operations 16,915 23,188 8,994 11,864
--------- ----------- --------- ---------
Dividends to shareholders from net investment income
(see Note 2): (16,915) (23,188) (8,994) ( 11,864)
--------- ----------- --------- ---------
Capital share transactions (at $1.00 per share):
Proceeds from shares sold 582,244 1,224,842 272,500 390,059
Net asset value of shares issued in reinvestment
of dividends 15,258 25,285 8,053 13,033
Payments for shares redeemed (597,828) (1,015,463) (240,562) (305,626)
--------- ----------- --------- ---------
Increase (decrease) in net assets from capital share transactions (326) 234,664 39,991 97,466
--------- ----------- --------- ---------
Total increase (decrease) in net assets (326) 234,664 39,991 97,466
Net Assets:
Beginning of period 603,717 369,053 322,061 224,595
--------- ----------- --------- ---------
End of period $ 603,391 $ 603,717 $ 362,052 $ 322,061
========= =========== ========= =========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab Institutional Advantage Money Fund(R)
-----------------------------------------------------------------------------------------------------------------------
FISCAL PERIOD ENDED 12/31 2000(1) 1999 1998 1997 1996 1995
PER-SHARE DATA ($)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
--------------------------------------------------------------
Income from investment operations:
Net investment income 0.03 0.05 0.05 0.05 0.05 0.06
--------------------------------------------------------------
Total from investment operations 0.03 0.05 0.05 0.05 0.05 0.06
Less distributions:
Dividends from net investment income (0.03) (0.05) (0.05) (0.05) (0.05) (0.06)
--------------------------------------------------------------
Total distributions (0.03) (0.05) (0.05) (0.05) (0.05) (0.06)
--------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
--------------------------------------------------------------
Total return (%) 2.87(2) 4.90 5.26 5.31 5.15 5.65
RATIOS/SUPPLEMENTAL DATA (%)
-----------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.50(3,4) 0.50 0.50 0.50 0.50 0.53
Expense reductions reflected in above ratio 0.18(3) 0.21 0.29 0.34 0.38 0.37
Ratio of net investment income to average net assets 5.69(3) 4.84 5.12 5.20 5.03 5.50
Net assets, end of period ($ X 1,000) 603,391 603,717 369,053 275,337 139,021 80,746
</TABLE>
<TABLE>
<CAPTION>
Schwab Retirement Money Fund(R)
-----------------------------------------------------------------------------------------------------------------------
FISCAL PERIOD ENDED 12/31 2000(1) 1999 1998 1997 1996 1995
PER-SHARE DATA ($)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
--------------------------------------------------------------
Income from investment operations:
Net investment income 0.03 0.05 0.05 0.05 0.05 0.05
--------------------------------------------------------------
Total from investment operations 0.03 0.05 0.05 0.05 0.05 0.05
Less distributions:
Dividends from net investment income (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
--------------------------------------------------------------
Total distributions (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
--------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00 1.00
--------------------------------------------------------------
Total return (%) 2.75(2) 4.68 5.03 5.07 4.93 5.43
RATIOS/SUPPLEMENTAL DATA (%)
-----------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.72(3) 0.72 0.73 0.73 0.73 0.73
Expense reductions reflected in above ratio -- 0.02 0.07 0.11 0.15 0.19
Ratio of net investment income to average net assets 5.49(3) 4.62 4.88 4.96 4.83 5.28
Net assets, end of period ($ X 1,000) 362,052 322,061 224,595 154,903 136,319 98,992
</TABLE>
(1) For the six months ended June 30, 2000 (Unaudited).
(2) Not annualized.
(3) Annualized.
(4) Would have been 0.51% if certain non-routine expenses (proxy fees) had
been included.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 2000 (Unaudited)
(All dollar amounts are in thousands unless otherwise noted)
1. DESCRIPTION OF THE FUNDS
The Schwab Institutional Advantage Money Fund(R) and the Schwab Retirement Money
Fund(R) (the "funds") are 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, as amended, (the "1940 Act").
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(R) 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.
16
<PAGE>
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. Each fund
is considered a separate entity for tax purposes.
At December 31, 1999, the unused capital loss carryforwards, for federal income
tax purposes with expiration dates, were as follows:
<TABLE>
<CAPTION>
Schwab Schwab
Institutional Advantage Retirement
Expiring in: Money Fund(R) Money Fund(R)
---------- ----------------------- ------------------
<S> <C> <C>
12/31/04 $ 3 $1
=== ==
</TABLE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS -- The funds have an
investment advisory and administration agreement 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 net assets in
excess of $1 billion to $10 billion, 0.32% on such net assets in excess of $10
billion to $20 billion, and 0.30% on such net assets in excess of $20 billion.
Prior to April 30, 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 Schwab Institutional Advantage Money Fund(R), for
the six month period ended June 30, 2000 (see Note 4).
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The Trust has transfer
agency and shareholder service agreements with Charles Schwab & Co., Inc.
("Schwab"). For services provided under these agreements, Schwab receives an
annual fee, payable monthly, of 0.05% of each fund's average daily net assets
for transfer agency services and 0.20% on such net assets for shareholder
services.
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 month period ended June 30, 2000, the Trust made no direct payments to its
officers or trustees who are "interested persons" within the meaning of the 1940
Act, as amended. The funds incurred fees of $13 related to the Trust's
unaffiliated trustees.
17
<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,
2001, the Schwab Institutional Advantage Money Fund(R) and Schwab Retirement
Money Fund(R) total operating expenses will not exceed 0.50% and 0.73%,
respectively, of each of the funds' average daily net assets, after reductions.
For the purpose of this guarantee, operating expenses do not include interest,
taxes, and certain non-routine expenses. The operating expense ratio for the six
months ended June 30, 2000 did include non-routine expenses.
For the six month period ended June 30, 2000, the total of such fees reduced by
the investment adviser was $527 for the Schwab Institutional Advantage Money
Fund(R).
18
<PAGE>
PROXY VOTING RESULTS
A special meeting of the shareholders of The Charles Schwab Family of Funds was
held on June 1, 2000. The number of votes necessary to conduct the meeting and
approve each proposal was obtained, and the results of the votes of shareholders
on proposals before them are listed below:
PROPOSAL 1
Election of Trustees.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES VOTED FOR SHARES WITHHELD
---------------- ---------------
<S> <C> <C>
Charles R. Schwab 36,999,629,179 9,264,278,586
Mariann Byerwalter 36,952,086,682 9,311,821,083
Jeremiah H. Chafkin 36,969,722,337 9,294,185,428
Donald F. Dorward 36,945,789,881 9,318,117,884
William A. Hasler 36,978,892,818 9,285,014,947
Robert G. Holmes 36,967,612,764 9,296,295,001
Steven L. Scheid 36,989,702,307 9,274,205,458
Gerald B. Smith 36,981,495,311 9,282,412,454
Donald R. Stephens 36,986,833,556 9,277,074,209
Michael W. Wilsey 36,981,483,423 9,282,424,342
</TABLE>
PROPOSAL 2CI
To approve changes to restrictions regarding borrowing.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 266,884,152
Against 6,408,158
Abstain (includes broker non-votes) 30,947,412
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 149,114,129
Against 964,996
Abstain (includes broker non-votes) 6,333,807
</TABLE>
PROPOSAL 2CII
To approve changes to restrictions regarding lending.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 269,254,580
Against 4,037,729
Abstain (includes broker non-votes) 30,947,413
</TABLE>
19
<PAGE>
PROXY VOTING RESULTS (continued)
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 149,124,175
Against 954,951
Abstain (includes broker non-votes) 6,333,807
</TABLE>
PROPOSAL 2CIII
To approve changes to restrictions regarding the issuance of senior securities
and pledging, mortgaging or hypothecating fund assets.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 269,268,289
Against 4,024,021
Abstain (includes broker non-votes) 30,947,412
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 149,369,436
Against 712,245
Abstain (includes broker non-votes) 6,331,252
</TABLE>
PROPOSAL 2D
To approve changes to restrictions regarding diversification.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 268,537,434
Against 4,754,875
Abstain (includes broker non-votes) 30,947,413
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 149,371,350
Against 707,776
Abstain (includes broker non-votes) 6,333,807
</TABLE>
20
<PAGE>
PROPOSAL 2E
To approve changes to restrictions regarding investments in "unseasoned
issuers".
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 266,747,536
Against 6,521,140
Abstain (includes broker non-votes) 30,971,046
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
-------------
<S> <C>
For 148,761,256
Against 1,317,870
Abstain (includes broker non-votes) 6,333,807
</TABLE>
PROPOSAL 2F
To approve changes to restrictions regarding investments in restricted or
illiquid securities.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 269,131,762
Against 4,135,146
Abstain (includes broker non-votes) 30,972,814
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 149,062,386
Against 1,016,739
Abstain (includes broker non-votes) 6,333,807
</TABLE>
PROPOSAL 2G
To approve changes to restrictions regarding investments in securities of other
investment companies.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 269,232,680
Against 4,048,666
Abstain (includes broker non-votes) 30,958,376
</TABLE>
21
<PAGE>
PROXY VOTING RESULTS (continued)
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 148,939,077
Against 1,140,048
Abstain (includes broker non-votes) 6,333,807
</TABLE>
PROPOSAL 2H
To approve changes to restrictions regarding the beneficial ownership of
securities by fund officers and trustees.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 269,258,878
Against 4,033,431
Abstain (includes broker non-votes) 30,947,413
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 149,361,282
Against 717,832
Abstain (includes broker non-votes) 6,333,818
</TABLE>
PROPOSAL 2I
To approve changes to restrictions regarding industry concentration.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 269,248,131
Against 4,044,178
Abstain (includes broker non-votes) 30,947,413
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 149,011,878
Against 1,067,248
Abstain (includes broker non-votes) 6,333,807
</TABLE>
22
<PAGE>
PROPOSAL 2J
To approve changes to restrictions regarding investments in commodities, futures
contracts and real estate.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 270,296,240
Against 4,050,999
Abstain (includes broker non-votes) 29,892,483
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 148,778,128
Against 1,300,987
Abstain (includes broker non-votes) 6,333,818
</TABLE>
PROPOSAL 2K
To approve changes to restrictions regarding the underwriting of securities.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 270,326,049
Against 4,021,191
Abstain (includes broker non-votes) 29,892,482
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 148,910,376
Against 1,168,747
Abstain (includes broker non-votes) 6,333,809
</TABLE>
PROPOSAL 2L
To approve changes to restrictions regarding control of an issuer.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 271,983,555
Against 2,354,490
Abstain (includes broker non-votes) 29,901,677
</TABLE>
23
<PAGE>
PROXY VOTING RESULTS (continued)
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 148,900,318
Against 1,178,806
Abstain (includes broker non-votes) 6,333,809
</TABLE>
PROPOSAL 2M
To approve changes to restrictions regarding purchases of oil, gas, or mineral
interests.
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 270,307,853
Against 4,039,386
Abstain (includes broker non-votes) 29,892,483
</TABLE>
SCHWAB RETIREMENT MONEY FUND:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VOTED
--------------
<S> <C>
For 148,983,426
Against 1,009,917
Abstain (includes broker non-votes) 6,419,590
</TABLE>
24
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THE SCHWABFUNDS FAMILY-REGISTERED TRADEMARK-
SchwabFunds-Registered Trademark- offers 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.
METHODS FOR PLACING ORDERS
The information below outlines how Schwab brokerage account investors can place
orders. If you are investing through a third-party investment provider, methods
for placing orders may be different.
PHONE
Call 800-435-4000, day or night (for TDD service, call 800-345-2550). If you are
investing through a third-party investment provider, please call your investment
manager or your Signature Services Alliance Team at 800-515-2157.
INTERNET
www.schwab.com/schwabfunds
MAIL
Write to SchwabFunds at:
P. O. Box 7575, San Francisco, CA 94120-7575
When selling or exchanging shares, be sure to include the signatures of at least
one of the persons whose name is on the account.
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-Registered Trademark- Fund
Schwab 1000 Fund-Registered Trademark-
Schwab Analytics Fund-Registered Trademark-
Schwab Focus Funds:
Communications Focus Fund
Financial Services Focus Fund
HealthCare Focus Fund
Technology Focus Fund
Schwab Small-Cap Index Fund-Registered Trademark-
Schwab MarketManager Small Cap Portfolio
Schwab Total Stock Market Index Fund-TM-
Schwab International Index Fund-Registered Trademark-
Schwab MarketManager International Portfolio
SCHWAB BOND FUNDS
Schwab YieldPlus Fund-TM-
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 FUNDS
Schwab offers an array of money funds that seek high current income consistent
with stability of capital and liquidity.(1)
(1)Investments in money funds are neither insured nor guaranteed by the Federal
Deposit Insurance Corporation (FDIC) or any other government agency and,
although money funds seek to preserve the value of your investment at $1 per
share, it is possible to lose money.
<PAGE>
[LOGO]
INVESTMENT ADVISER
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
DISTRIBUTOR
Charles Schwab & Co., Inc.
P.O. Box 7575, San Francisco, CA 94120-7575
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
-C-2000 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
Printed on recycled paper. MKT3605-3 (8/00)
