SCHWABFUNDS-REGISTERED TRADEMARK-
SCHWAB
INSTITUTIONAL ADVANTAGE
MONEY FUND-REGISTERED TRADEMARK-
SCHWAB
RETIREMENT MONEY FUND-REGISTERED TRADEMARK-
ANNUAL REPORT
AND
AN IMPORTANT NOTICE REGARDING
DELIVERY OF SHAREHOLDER
DOCUMENTS
Annual Report
December 31, 1999
<PAGE>
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission has adopted a rule permitting 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.
As permitted by the rule, Schwab may begin indefinitely householding
prospectuses and shareholder reports for SchwabFunds-Registered Trademark-.
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.
If you would otherwise fall under our householding policy, but for any reason
prefer to receive multiple SchwabFunds prospectuses and shareholder reports,
please contact:
- - SCHWAB SIGNATURE SERVICES-TM- CLIENTS: Schwab Signature Services.
- - INVESTMENT MANAGER CLIENTS: Schwab at 1-800-515-2157, or your investment
manager.
- - INVESTMENT MANAGERS: Your ISG Team.
- - RETIREMENT PLAN ADMINISTRATORS: Schwab at 1-800-772-4922.
- - ALL OTHER CLIENTS: Schwab at 1-800-435-4000.
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-
Annual Report
December 31, 1999
<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 annual report on the performance for the Schwab
Institutional Advantage Money Fund-Registered Trademark- and the Schwab
Retirement Money Fund-Registered Trademark- for the one-year period ended
December 31, 1999.
During the reporting period, the funds continued to provide investors with
current income consistent with the preservation of capital. By the end of the
one-year 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 $322 million.
FUND PERFORMANCE
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-REGISTERED TRADEMARK-
YIELD SUMMARY AS OF 12/31/99(1)
<TABLE>
<S> <C>
Seven-Day Current Yield 5.52%
- ------------------------------------------------------------------------
Seven-Day Effective Yield 5.67%
- ------------------------------------------------------------------------
</TABLE>
SCHWAB RETIREMENT MONEY FUND-REGISTERED TRADEMARK-
YIELD SUMMARY AS OF 12/31/99
<TABLE>
<S> <C>
Seven-Day Current Yield 5.32%
- ------------------------------------------------------------------------
Seven-Day Effective Yield 5.46%
- ------------------------------------------------------------------------
</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
December 31, 1999.
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
December 31, 1999
(1) A portion of the fund's expenses was reduced during the reporting period.
Without this reduction, as of 12/31/99, the seven-day current yield would
have been 5.36%. The seven-day effective yield would have been 5.50%. 1
<PAGE>
PORTFOLIO HIGHLIGHTS
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-REGISTERED TRADEMARK-
AVERAGE YIELDS FOR THE PERIOD ENDED 12/31/99(1)
<TABLE>
<S> <C>
- -------------------------------------------
Last seven days 5.52%
- -------------------------------------------
Last three months 5.27%
- -------------------------------------------
Last 12 months 4.80%
- -------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/99 6/30/99 9/30/99 12/31/99
<S> <C> <C> <C> <C>
- -------------------------------------------------------------
0-15 days 28.7% 24.1% 33.9% 15.8%
- -------------------------------------------------------------
16-30 days 9.3% 20.6% 10.4% 7.4%
- -------------------------------------------------------------
31-60 days 12.3% 22.3% 14.1% 29.6%
- -------------------------------------------------------------
61-90 days 21.2% 16.4% 15.6% 30.5%
- -------------------------------------------------------------
91-120 days 14.6% 3.4% 6.6% 8.0%
- -------------------------------------------------------------
More than 120 days 13.9% 13.2% 19.4% 8.7%
- -------------------------------------------------------------
Weighted average 65 days 67 days 63 days 58 days
- -------------------------------------------------------------
</TABLE>
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 12/31/99
<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 THE PERIOD ENDED 12/31/99
<TABLE>
<S> <C>
- -------------------------------------------
Last seven days 5.32%
- -------------------------------------------
Last three months 5.05%
- -------------------------------------------
Last 12 months 4.59%(1)
- -------------------------------------------
</TABLE>
MATURITY SCHEDULE: PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
MATURITY RANGE 3/31/99 6/30/99 9/30/99 12/31/99
<S> <C> <C> <C> <C>
- -------------------------------------------------------------
0-15 days 27.9% 26.0% 32.6% 16.5%
- -------------------------------------------------------------
16-30 days 9.4% 21.2% 17.1% 2.3%
- -------------------------------------------------------------
31-60 days 4.3% 21.0% 17.6% 26.2%
- -------------------------------------------------------------
61-90 days 26.5% 17.8% 11.0% 41.8%
- -------------------------------------------------------------
91-120 days 16.0% 1.3% 2.3% 4.1%
- -------------------------------------------------------------
More than 120 days 15.9% 12.7% 19.4% 9.1%
- -------------------------------------------------------------
Weighted average 70 days 67 days 60 days 59 days
- -------------------------------------------------------------
</TABLE>
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
SEC TIER RATING PERCENTAGE OF TOTAL INVESTMENTS: 12/31/99
<S> <C>
- -----------------------------------------------------------------------------------
Tier 1 100%
- -----------------------------------------------------------------------------------
</TABLE>
(1) A portion of the fund's expenses was reduced during the period. Without this
reduction, yield would have been lower.
3
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1999
Par Value
------ -------
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- 71.0%
AUTOMOTIVE -- 1.3%
General Motors Acceptance Corp.
5.97%, 02/09/00 $ 5,000 $ 4,968
5.93%, 02/14/00 3,000 2,979
---------
7,947
---------
BANKING - AUSTRALIA -- 2.5%
Westpac Capital Corp.
7.14%, 01/07/00 5,000 4,994
6.05%, 05/01/00 10,000 9,803
---------
14,797
---------
BANKING - BELGIUM -- 2.1% (a)
BBL North America
6.03%, 03/13/00 10,000 9,881
Fortis Funding L.L.C.
6.09%, 02/29/00 3,000 2,971
---------
12,852
---------
BANKING - DOMESTIC -- 5.2% (a) (d)
Citibank Capital Markets Assets L.L.C.
6.00%, 02/25/00 5,600 5,550
Enterprise Funding Corp.
6.14%, 02/02/00 2,000 1,989
Forrestal Funding Master Trust
6.05%, 02/09/00 10,000 9,936
6.02%, 03/13/00 1,500 1,483
Intrepid Funding Master Trust
6.02%, 02/09/00 1,000 994
6.07%, 04/12/00 10,000 9,833
Kitty Hawk Funding Corp.
6.00%, 03/20/00 1,700 1,678
---------
31,463
---------
BANKING - GERMANY -- 2.8% (a)(d)
Bavaria TRR Corp.
5.91%, 01/26/00 4,410 4,392
6.05%, 03/02/00 2,000 1,980
Giro US Funding Corp.
6.04%, 01/03/00 3,000 2,999
6.22%, 03/24/00 5,000 4,929
5.97%, 04/25/00 2,400 2,356
---------
16,656
---------
Par Value
------ --------
BANKING - NETHERLANDS -- 3.3% (d)
Atlantis One Funding Corp.
6.03%, 01/28/00 $10,000 $ 9,956
6.10%, 03/23/00 10,000 9,865
---------
19,821
---------
BANKING - NORWAY -- 1.3% (a)
Christiania Capital Corp.
6.04%, 03/03/00 8,000 7,918
---------
BANKING - SWEDEN -- 4.4%
AB Spintab
6.04%, 03/07/00 7,000 6,923
6.19%, 03/08/00 8,100 8,008
6.06%, 04/11/00 12,000 11,800
---------
26,731
---------
BANKING - UNITED KINGDOM -- 1.7%
Abbey National Treasury Services PLC
5.20%, 05/04/00 10,000 9,998
---------
CREDIT CARD RECEIVABLES -- 1.1% (a)(e)
Dakota Certificates Program SCCMT-1
6.06%, 03/07/00 4,000 3,956
Montauk Funding Corp.
7.04%, 01/18/00 950 947
5.98%, 02/09/00 2,000 1,987
---------
6,890
---------
DIVERSIFIED FINANCIAL ASSETS -- 22.6% (a)(e)
Amsterdam Funding Corp.
6.15%, 01/07/00 4,000 3,996
6.02%, 01/11/00 5,000 4,992
6.03%, 02/02/00 5,000 4,974
Beta Finance, Inc.
6.00%, 03/20/00 9,000 8,885
6.00%, 03/28/00 1,400 1,380
CC (USA), Inc.
5.99%, 02/07/00 4,000 3,976
6.01%, 04/25/00 4,000 3,926
Concord Minutemen Capital Co., LLC Series A
6.24%, 02/04/00 5,000 4,971
Greenwich Funding Corp.
6.21%, 01/18/00 10,000 9,971
6.31%, 02/16/00 700 694
4
<PAGE>
Par Value
------ --------
International Securitization Corp.
6.25%, 01/18/00 $ 1,000 $ 997
6.03%, 02/08/00 7,000 6,956
6.13%, 02/11/00 2,685 2,667
Lexington Parker Capital Corp.
6.04%, 03/02/00 9,000 8,909
6.07%, 03/03/00 2,500 2,474
Market Street Funding Corp.
6.06%, 02/02/00 8,996 8,948
6.01%, 02/09/00 3,000 2,981
6.02%, 02/11/00 2,000 1,987
Moriarty LLC
5.97%, 02/17/00 3,000 2,977
Sigma Finance, Inc.
5.61%, 01/18/00 5,000 4,987
6.05%, 03/06/00 6,000 5,935
6.05%, 03/08/00 5,000 4,944
5.93%, 05/15/00 3,000 2,935
6.10%, 06/15/00 1,000 973
Stellar Funding Group, Inc.
6.06%, 02/07/00 1,054 1,048
5.84%, 02/10/00 3,292 3,271
5.84%, 02/11/00 2,639 2,622
6.18%, 02/25/00 2,500 2,477
6.19%, 02/25/00 6,416 6,357
6.01%, 02/29/00 875 866
6.00%, 05/22/00 1,500 1,465
Variable Funding Capital Corp.
6.28%, 01/07/00 12,000 11,988
---------
136,529
---------
FINANCE - COMMERCIAL -- 7.6%
CIT Group Holdings, Inc.
5.95%, 02/17/00 12,000 11,908
General Electric Capital Corp.
6.05%, 03/08/00 5,000 4,945
6.17%, 03/08/00 12,000 11,864
General Electric Capital International
Funding, Inc.(a)
6.12%, 03/14/00 10,000 9,879
General Electric Capital Services
6.05%, 03/14/00 5,000 4,940
Heller Financial, Inc.
6.30%, 01/18/00 2,000 1,994
---------
45,530
---------
Par Value
------ --------
SECURITIES BROKERAGE - DEALER -- 6.6%
Bear Stearns Companies, Inc.
6.00%, 01/24/00 $ 5,000 $ 4,981
Goldman Sachs Group, LP
5.84%, 02/10/00 5,000 4,969
6.09%, 02/23/00 5,000 4,956
6.00%, 08/07/00 1,000 1,000
Morgan Stanley, Dean Witter,
Discover & Co.
6.14%, 03/13/00 1,000 988
PaineWebber Group, Inc.
6.33%, 02/01/00 10,000 9,946
Salomon Smith Barney Holdings, Inc.
5.78%, 02/10/00 3,000 2,981
6.02%, 03/06/00 10,000 9,893
---------
39,714
---------
TRADE RECEIVABLES -- 8.5% (a)(e)
Apreco, Inc.
6.64%, 01/18/00 1,000 997
Asset Securitization Cooperative Corp.
6.02%, 02/24/00 2,000 1,982
Corporate Receivables Corp.
6.15%, 02/15/00 4,000 3,970
CXC, Inc.
5.99%, 02/18/00 1,000 992
Falcon Asset Securities Corp.
6.06%, 01/11/00 2,055 2,052
Monte Rosa Capital Corp.
6.01%, 02/10/00 7,000 6,954
6.15%, 02/15/00 1,000 992
6.12%, 03/13/00 2,167 2,141
Receivables Capital Corp.
6.02%, 02/15/00 1,517 1,506
Sheffield Receivables Corp.
6.19%, 01/28/00 6,000 5,973
6.02%, 02/01/00 10,000 9,949
6.14%, 02/25/00 1,000 991
Windmill Funding
6.73%, 01/05/00 8,000 7,994
6.09%, 03/07/00 5,000 4,945
---------
51,438
---------
TOTAL COMMERCIAL PAPER AND OTHER
CORPORATE OBLIGATIONS
(Cost $428,284) 428,284
---------
5
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1999
Par Value
------ --------
CERTIFICATES OF DEPOSIT -- 21.8%
BANKING - CANADA -- 1.8%
Canadian Imperial Bank of Commerce
5.05%, 02/07/00 $ 5,000 $ 5,000
5.45%, 06/01/00 6,000 5,999
---------
10,999
---------
BANKING - DOMESTIC -- 4.5%
American Express Centurion Bank
5.93%, 02/08/00 10,000 10,000
6.20%, 03/21/00 17,000 17,000
---------
27,000
---------
BANKING - FINLAND -- 0.7%
Merita Bank Ltd.
6.10%, 02/07/00 4,000 4,000
---------
BANKING - FRANCE -- 2.6%
Societe Generale
5.85%, 03/31/00 5,000 5,000
5.85%, 04/03/00 11,000 11,000
---------
16,000
---------
BANKING - GERMANY -- 6.1%
Bayerische Landesbank Girozentrale
6.02%, 03/07/00 3,000 3,000
Deutsche Bank AG
6.13%, 09/05/00 6,800 6,792
Westdeutsche Landesbank Girozentrale
6.00%, 03/01/00 20,000 20,000
6.18%, 03/30/00 7,000 7,000
---------
36,792
---------
BANKING - NORWAY -- 1.6%
Christiania Bank
5.95%, 02/17/00 10,000 10,000
---------
BANKING - SWITZERLAND -- 1.5%
UBS AG
5.11%, 01/13/00 1,000 1,000
5.10%, 04/12/00 5,000 5,000
5.17%, 05/10/00 3,000 2,999
---------
8,999
---------
BANKING - UNITED KINGDOM -- 3.0%
Barclays Bank PLC
5.35%, 05/22/00 5,000 5,000
5.66%, 06/14/00 6,000 5,998
Par Value
------ --------
National Westminster Bank
5.06%, 01/10/00 $ 7,000 $ 7,000
---------
17,998
---------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $131,788) 131,788
---------
VARIABLE RATE OBLIGATIONS -- 3.7% (b)
BANKING - DOMESTIC -- 1.7% (d)
Asset Partners, Inc. Project RB Series 1997
5.95%, 01/06/00 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
5.85%, 01/07/00 2,200 2,200
City of Aurora, Kane, Dupage, Will & Kendall
Counties, Illinois Taxable IDRB (North
American Plastics Corp. Project)
Series 1996B
5.90%, 01/07/00 775 775
MoviePlex Realty Leasing, L.L.C. Adjustable
Rate Tender Securities (Carmike
Cinemas, Inc.) Series 1997B3
6.46%, 01/07/00 2,675 2,675
New York City IDA Taxable Industrial
Revenue Refunding Bonds (1997 Allway
Tools, Inc. Project)
6.20%, 01/07/00 190 190
Upper Illinois River Valley Development
Authority Taxable Solid Waste Disposal RB
(Exolon - ESK Co. Project) Series 1996B
5.90%, 01/07/00 2,000 2,000
---------
10,450
---------
DIVERSIFIED FINANCIAL ASSETS -- 2.0% (a)(e)
Trident Capital Finance, Inc.
6.60%, 01/03/00 7,000 7,000
Variable Funding Capital Corp.
6.56%, 01/14/00 5,000 5,000
---------
12,000
---------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $22,450) 22,450
---------
6
<PAGE>
Maturity Value Value
-------------- --------
REPURCHASE AGREEMENTS -- 4.4% (c)
Credit Suisse First Boston Corp.
Tri-Party Repurchase Agreement
Collateralized by U.S. Government
Securities
5.00% Issue 12/31/99
Due 01/03/00 $26,792 $ 26,781
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $26,781) 26,781
---------
TOTAL INVESTMENTS -- 100.9%
(Cost $609,303) 609,303
---------
OTHER ASSETS AND LIABILITIES-- (0.9%)
Other assets 12,324
Liabilities (17,910)
---------
(5,586)
---------
TOTAL NET ASSETS-- 100.0% $603,717
=========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
7
<PAGE>
SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (in thousands)
December 31, 1999
Par Value
------ --------
COMMERCIAL PAPER AND OTHER CORPORATE
OBLIGATIONS -- 68.1%
AUTOMOTIVE -- 2.2%
General Motors Acceptance Corp.
5.97%, 02/09/00 $ 5,000 $ 4,968
5.93%, 02/14/00 2,000 1,986
---------
6,954
---------
BANKING - AUSTRALIA -- 1.2%
Westpac Capital Corp.
6.05%, 05/01/00 4,000 3,921
---------
BANKING - BELGIUM -- 1.8% (a)
BBL North America
6.03%, 03/13/00 5,000 4,941
Fortis Funding L.L.C.
6.09%, 02/29/00 1,000 990
---------
5,931
---------
BANKING - DOMESTIC -- 4.5% (a)(d)
Forrestal Funding Master Trust
6.13%, 02/25/00 5,000 4,954
6.19%, 03/02/00 7,000 6,927
6.02%, 03/13/00 1,500 1,483
Intrepid Funding Master Trust
6.02%, 02/09/00 1,000 994
---------
14,358
---------
BANKING - GERMANY -- 1.8% (a)(d)
Bavaria TRR Corp.
6.05%, 03/02/00 5,000 4,949
Giro US Funding Corp.
5.78%, 02/03/00 1,000 995
---------
5,944
---------
BANKING - NETHERLANDS -- 1.5% (d)
Atlantis One Funding Corp.
6.10%, 03/23/00 5,000 4,932
---------
BANKING NORWAY -- 2.5% (a)
Christiania Capital Corp.
6.04%, 03/03/00 8,000 7,918
---------
Par Value
------ --------
BANKING - SWEDEN -- 4.5%
AB Spintab
6.08%, 02/08/00 $ 4,000 $ 3,975
6.04%, 03/07/00 5,000 4,946
6.19%, 03/08/00 2,700 2,669
6.06%, 04/11/00 3,000 2,950
---------
14,540
---------
BANKING - UNITED KINGDOM -- 0.9%
Abbey National Treasury Services PLC
5.20%, 05/04/00 3,000 2,999
---------
CREDIT CARD RECEIVABLES -- 2.2% (a)(e)
Dakota Certificates Program SCCMT-1
6.92%, 01/06/00 2,000 1,998
6.06%, 03/07/00 5,000 4,945
---------
6,943
---------
DIVERSIFIED FINANCIAL ASSETS -- 20.6% (a)(e)
Amsterdam Funding Corp.
6.03%, 02/02/00 2,000 1,989
Beta Finance, Inc.
6.00%, 03/20/00 3,000 2,962
6.00%, 03/28/00 1,700 1,676
Dorada Finance Inc
6.00%, 04/14/00 1,000 983
International Securitization Corp.
6.00%, 02/01/00 3,000 2,985
6.13%, 02/11/00 2,900 2,880
Lexington Parker Capital Corp.
6.04%, 03/02/00 2,000 1,980
6.07%, 03/03/00 3,800 3,761
Market Street Funding Corp.
6.01%, 02/09/00 8,000 7,949
6.15%, 02/25/00 1,500 1,486
Moriarty L.L.C.
6.07%, 03/10/00 11,000 10,874
Sigma Finance, Inc.
5.61%, 01/18/00 4,000 3,990
6.05%, 03/06/00 5,800 5,737
5.93%, 05/15/00 4,000 3,914
Stellar Funding Group, Inc.
6.19%, 03/31/00 1,145 1,128
Variable Funding Capital Corp.
6.28%, 01/07/00 12,000 11,988
---------
66,282
---------
8
<PAGE>
SCHWAB RETIREMENT MONEY FUND(REGISTRATION MARK)
SCHEDULE OF INVESTMENTS (in thousands) (continued)
December 31, 1999
Par Value
------ --------
FINANCE - COMMERCIAL -- 10.4%
CIT Group Holdings, Inc.
5.95%, 02/17/00 $ 7,000 $ 6,946
General Electric Capital International
Funding, Inc. (a)
6.12%, 03/14/00 10,000 9,879
General Electric Capital Corp.
6.05%, 03/08/00 3,000 2,967
General Electric Capital Services
6.17%, 03/07/00 9,000 8,900
6.05%, 03/14/00 5,000 4,940
---------
33,632
---------
SECURITIES BROKERAGE - DEALER -- 5.6%
Goldman Sachs Group, LP
6.09%, 02/23/00 3,000 2,974
6.00%, 08/07/00 2,000 2,000
Morgan Stanley Dean Witter Discover & Co.
6.11%, 02/08/00 5,000 4,968
6.12%, 02/09/00 3,000 2,981
Salomon Smith Barney Holdings, Inc.
6.02%, 03/06/00 5,000 4,946
---------
17,869
---------
TRADE RECEIVABLES -- 8.4% (a)(e)
Asset Securitization Cooperative Corp.
6.02%, 02/24/00 5,000 4,956
Barton Capital Corp.
6.73%, 01/05/00 3,000 2,998
Corporate Receivables Corp.
6.15%, 02/15/00 4,000 3,970
Falcon Asset Securitization Corp.
7.02%, 01/06/00 2,000 1,998
Monte Rosa Capital Corp.
6.01%, 02/10/00 8,000 7,948
6.15%, 02/15/00 1,201 1,192
Sheffield Receivables Corp.
6.19%, 01/28/00 3,160 3,145
6.02%, 02/01/00 1,000 995
---------
27,202
---------
TOTAL COMMERCIAL PAPER AND OTHER
CORPORATE OBLIGATIONS
(Cost $219,425) 219,425
---------
Par Value
------ --------
CERTIFICATES OF DEPOSIT -- 20.8%
BANKING - CANADA -- 2.5%
Canadian Imperial Bank of Commerce
5.35%, 03/03/00 $ 4,000 $ 4,000
5.45%, 06/01/00 4,000 3,999
---------
7,999
---------
BANKING - DOMESTIC -- 4.3%
American Express Centurion Bank
5.93%, 02/08/00 5,000 5,000
6.20%, 03/21/00 9,000 9,000
---------
14,000
---------
BANKING - FRANCE -- 1.6%
Societe Generale
5.85%, 04/03/00 5,000 5,000
---------
BANKING - GERMANY -- 5.3%
Bayerische Landesbank Girozentrale (a)
6.02%, 03/07/00 3,000 3,000
Westdeutsche Landesbank Girozentrale
6.00%, 03/01/00 13,000 13,000
6.18%, 03/30/00 1,000 1,000
---------
17,000
---------
BANKING - NORWAY -- 1.6%
Christiania Bank
5.95%, 02/17/00 5,000 5,000
---------
BANKING - SWITZERLAND -- 1.5%
UBS AG
5.10%, 04/12/00 3,000 3,000
5.26%, 05/10/00 2,000 1,999
---------
4,999
---------
BANKING - UNITED KINGDOM -- 4.0%
Barclays Bank PLC
5.35%, 05/22/00 5,000 5,000
5.66%, 06/14/00 5,000 4,999
National Westminster Bank PLC
5.06%, 01/10/00 3,000 3,000
---------
12,999
---------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $66,997) 66,997
---------
9
<PAGE>
Par Value
------ --------
VARIABLE RATE OBLIGATIONS -- 6.4% (b)
BANKING - DOMESTIC -- 3.9% (d)
California Pollution Control Financing
Authority Solid Waste Disposable RB
(Burr Properties Project) Series 1997
6.10%, 01/07/00 $ 2,200 $ 2,200
Eagle County, Colorado Taxable Housing
Facilities RB (BC Housing, L.L.C. Project)
Series 1997B
5.83%, 01/07/00 1,500 1,500
MoviePlex Realty Leasing, L.L.C.
Adjustable Rate Tender Securities
(Carmike Cinemas, Inc.) Series 1997B2
6.46%, 01/07/00 2,675 2,675
Trap Rock Industries, Inc. VRD Fixed
Rate RB Series 1997 (a)
6.80%, 01/07/00 2,140 2,140
Upper Illinois River Valley Development
Authority Solid Waste Disposal RB
(Exolon - ESK Co. Project) Series 1996B
5.90%, 01/07/00 2,595 2,595
Village of Sturtevant, Wisconsin IDRB
(Andis Co. Project) Series 1996B
5.90%, 01/07/00 1,385 1,385
---------
12,495
---------
DIVERSIFIED FINANCIAL ASSETS -- 2.5% (a)(e)
Trident Capital Finance, Inc.
6.60%, 01/03/00 8,000 8,000
---------
8,000
---------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $20,495) 20,495
---------
Maturity Value Value
-------------- --------
REPURCHASE AGREEMENTS -- 3.0% (c)
Credit Suisse First Boston Corp.
Tri-Party Repurchase Agreement
Collateralized by U.S. Government
Securities
5.00% Issue 12/31/99
Due 01/03/00 $ 9,682 $ 9,678
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $9,678) 9,678
---------
TOTAL INVESTMENTS -- 98.3%
(Cost $316,595) 316,595
---------
OTHER ASSETS AND LIABILITIES-- 1.7%
Other assets 6,102
Liabilities (636)
---------
5,466
---------
TOTAL NET ASSETS-- 100.0% $322,061
=========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
10
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
December 31, 1999
(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 December 31, 1999, the
aggregate value of such securities held by the Schwab Institutional
Advantage Money Fund(REGISTRATION MARK) and the Schwab Retirement Money
Fund(REGISTRATION MARK) was $285,625 and $157,597 which represented 47.31%
and 48.93% 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
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)
December 31, 1999
<TABLE>
<CAPTION>
Schwab
Institutional Schwab
Advantage Retirement
Money Fund(REGISTRATION MARK) Money Fund(REGISTRATION MARK)
------------- -------------
<S> <C> <C>
ASSETS
Investments, at value (Cost: $609,303 and $316,595, respectively) $609,303 $316,595
Receivables:
Fund shares sold 9,845 4,566
Interest 2,440 1,395
Investments sold -- 115
Prepaid expenses 39 26
-------- --------
Total assets 621,627 322,697
-------- --------
LIABILITIES
Payables:
Dividends 30 14
Fund shares redeemed 17,726 530
Investment advisory and administration fees 24 23
Transfer agency and shareholder service fees 28 15
Other liabilities 102 54
-------- --------
Total liabilities 17,910 636
-------- --------
Net assets applicable to outstanding shares $603,717 $322,061
======== ========
NET ASSETS CONSIST OF
Paid-in capital $603,720 $322,062
Accumulated net realized loss on investments sold (3) (1)
-------- --------
$603,717 $322,061
======== ========
PRICING OF SHARES
Outstanding shares, $0.00001 par value (unlimited shares authorized) 603,778 322,119
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 year ended December 31, 1999
<TABLE>
<CAPTION>
Schwab
Institutional Schwab
Advantage Retirement
Money Fund(REGISTRATION MARK) Money Fund(REGISTRATION MARK)
------------- -------------
<S> <C> <C>
Interest income $25,585 $13,718
------- -------
Expenses:
Investment advisory and administration fees 1,930 1,035
Transfer agency and shareholder service fees 1,198 642
Custodian and portfolio accounting fees 174 122
Registration fees 48 41
Professional fees 15 22
Shareholder reports 8 17
Trustees' fees 7 11
Other expenses 7 10
------- -------
3,387 1,900
Less: expenses reduced (see Note 4) (990) (46)
------- -------
Net expenses incurred by fund 2,397 1,854
------- -------
Net investment income 23,188 11,864
------- -------
Increase in net assets resulting from operations $23,188 $11,864
======= =======
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
For the year ended December 31,
<TABLE>
<CAPTION>
Schwab
Institutional Schwab
Advantage Retirement
Money Fund(REGISTRATION MARK) Money Fund(REGISTRATION MARK)
----------------------- ----------------------
1999 1998 1999 1998
---------- --------- ---------- --------
<S> <C> <C> <C> <C>
Operations:
Net investment income $ 23,188 $ 16,792 $ 11,864 $ 9,127
---------- --------- ---------- --------
Increase in net assets resulting from operations 23,188 16,792 11,864 9,127
---------- --------- ---------- --------
Dividends to shareholders from net investment income
(see Note 2): (23,188) (16,838) ( 11,864) (9,172)
---------- --------- ---------- --------
Capital share transactions (at $1.00 per share):
Proceeds from shares sold 1,224,842 707,322 390,059 295,869
Net asset value of shares issued in reinvestment
of dividends 25,285 15,535 13,033 8,885
Payments for shares redeemed (1,015,463) (629,095) (305,626) (235,017)
---------- --------- ---------- --------
Increase in net assets from capital share transactions 234,664 93,762 97,466 69,737
---------- --------- ---------- --------
Total increase in net assets 234,664 93,716 97,466 69,692
Net Assets:
Beginning of period 369,053 275,337 224,595 154,903
---------- --------- ---------- --------
End of period $ 603,717 $ 369,053 $ 322,061 $224,595
========== ========= ========== ========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Schwab Institutional Advantage Money Fund(REGISTRATION MARK)
YEAR ENDED 12/31 1999 1998 1997 1996 1995
PER SHARE DATA ($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------
From investment operations:
Net investment income 0.05 0.05 0.05 0.05 0.06
---------------------------------------------------
Total from investment operations 0.05 0.05 0.05 0.05 0.06
Less distributions:
Dividends from net investment income 0.05) (0.05) (0.05) (0.05) (0.06)
---------------------------------------------------
Total distributions 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
---------------------------------------------------
Total return (%) 4.90 5.26 5.31 5.15 5.65
RATIOS/SUPPLEMENTAL DATA (%)
- -------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.50 0.50 0.50 0.50 0.53
Reductions reflected in above expense ratio 0.21 0.29 0.34 0.38 0.37
Ratio of net investment income to average net assets 4.84 5.12 5.20 5.03 5.50
Net assets, end of period ($ X 1,000) 603,717 369,053 275,337 139,021 80,746
Schwab Retirement Money Fund(REGISTRATION MARK)
- -------------------------------------------------------------------------------------------------------------------
YEAR ENDED 12/31 1999 1998 1997 1996 1995
PER SHARE DATA ($)
- -------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------
From investment operations:
Net investment income 0.05 0.05 0.05 0.05 0.05
---------------------------------------------------
Total from investment operations 0.05 0.05 0.05 0.05 0.05
Less distributions:
Dividends from net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
---------------------------------------------------
Total distributions (0.05) (0.05) (0.05) (0.05) (0.05)
---------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------
Total return (%) 4.68 5.03 5.07 4.93 5.43
RATIOS/SUPPLEMENTAL DATA (%)
- -------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.72 0.73 0.73 0.73 0.73
Reductions reflected in above expense ratio 0.02 0.07 0.11 0.15 0.19
Ratio of net investment income to average net assets 4.62 4.88 4.96 4.83 5.28
Net assets, end of period ($ X 1 ,000) 322,061 224,595 154,903 136,319 98,992
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the year ended December 31, 1999
(All dollar amounts are in thousands unless otherwise noted)
1. DESCRIPTION OF THE FUNDS
The Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and the Schwab
Retirement Money Fund(REGISTRATION MARK) (the "funds") are series of The Charles
Schwab Family of Funds (the "Trust"), an open-end investment management company
organized as a Massachusetts business trust on October 20, 1989, and registered
under the Investment Company Act of 1940 (the "Act"), as amended.
In addition to the funds, the Trust also offers the Schwab Money Market Fund,
Schwab Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Municipal
Money Fund, Schwab California Municipal Money Fund, Schwab New York Municipal
Money Fund, Schwab New Jersey Municipal Money Fund, Schwab Pennsylvania
Municipal Money Fund, Schwab Florida Municipal Money Fund, Schwab Value
Advantage Money Fund(REGISTRATION MARK) and Schwab Government Cash Reserves. The
assets of each series are segregated and accounted for separately.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in conformity with generally
accepted accounting principles. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
SECURITY VALUATION -- Investments are stated at amortized cost, which
approximates market value.
SECURITY TRANSACTIONS, INTEREST INCOME AND REALIZED GAINS (LOSSES) -- Security
transactions are accounted for on a trade date basis (date the order to buy or
sell is executed). Interest income is accrued daily and includes amortization of
premium and accretion of discount on investments. Realized gains and losses from
security transactions are determined on an identified cost basis.
REPURCHASE AGREEMENTS -- Repurchase agreements are fully collateralized by U.S.
government securities. All collateral is held by the funds' custodian, except in
the case of a tri-party agreement, under which the collateral is held by an
agent bank. The collateral is monitored daily to ensure that its market value at
least equals the repurchase price under the agreement.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The funds declare a daily
dividend, equal to its net investment income for that day, payable monthly. Net
realized capital gains, if any, are normally distributed annually.
EXPENSES -- Expenses arising in connection with the funds are charged directly
to the funds. Expenses common to all series of the Trust generally are allocated
to each series in proportion to their relative net assets.
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. The funds
are considered a separate entity for tax purposes.
At December 31, 1999, the unused capital loss carryforward, for federal income
tax purposes with expiration dates, were as follows:
<TABLE>
<CAPTION>
Schwab Schwab
Expiring in: Institutional Advantage Money Fund(REGISTRATION MARK) Retirement Money Fund(REGISTRATION MARK)
- ---------- ---------------------------------------------- ---------------------------------
<S> <C> <C>
12/31/04 $ 3 $1
--- --
Total capital loss carryforwards $ 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 year ended December 31, 1999 (see Note 4).
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The Trust has transfer
agency and shareholder service agreements with Charles Schwab & Co., Inc.
("Schwab"). For services provided under these agreements, Schwab receives 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
year ended December 31, 1999, the Trust made no direct payments to its officers
or trustees who are "interested persons" within the meaning of the Act, as
amended. The funds incurred fees of $18 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,
2000, the Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and
Schwab Retirement Money Fund(REGISTRATION MARK) 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 expenses, extraordinary expenses and taxes.
For the year ended December 31, 1999, the total of such fees reduced by the
investment adviser was $990 and $46 for the Schwab Institutional Advantage Money
Fund(REGISTRATION MARK) and Schwab Retirement Money Fund(REGISTRATION MARK),
respectively.
18
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of:
Schwab Institutional Advantage Money Fund(REGISTRATION MARK) and
Schwab Retirement Money Fund(REGISTRATION MARK)
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Schwab Institutional Advantage
Money Fund and Schwab Retirement Money Fund (two of the portfolios constituting
The Charles Schwab Family of Funds, hereafter referred to as the "Funds") at
December 31, 1999, the results of each of their operations for the year then
ended, the changes in each of their net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Funds' management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1999 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
San Francisco, California
February 4, 2000
19
<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-
The SchwabFunds Family includes a variety of funds to help meet your investment
needs. You can diversify your portfolio in a single step with our asset
allocation funds. Or you can customize your portfolio with a combination of our
stock funds as well as our taxable and tax-advantaged bond and money market
funds.
Please call 800-435-4000 for a free prospectus and brochure for any of these
SchwabFunds.-Registered Trademark-
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 Small-Cap Index Fund-Registered Trademark-
Schwab MarketManager Small Cap Portfolio
Schwab International Index Fund-Registered Trademark-
Schwab MarketManager International Portfolio
Schwab Total Stock Market Index Fund-TM-
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) Choose from taxable or
tax-advantaged alternatives. Many can be linked to your Schwab account to
"sweep" cash balances automatically when you're between investments. Or, for
your larger cash reserves, choose one of our Value
Advantage Investments.-Registered Trademark-
(1)Investments in money 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.
101 Montgomery Street, San Francisco, CA 94104
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
- -C-2000 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
Printed on recycled paper. MKT3860-2 (2/00)
