<PAGE> 1
SUPPLEMENT TO THE
SCHWAB SHORT-TERM BOND MARKET INDEX FUND
SCHWAB TOTAL BOND MARKET INDEX FUND PROSPECTUS
DATED NOVEMBER 15, 1999
THE THIRD PARAGRAPH UNDER THE HEADING "STRATEGY" ON PAGE 8 IS DELETED AND
REPLACED WITH THE FOLLOWING:
Like many index funds, the fund may enter into swap agreements, in which the
payments or investment performance of one security or asset is exchanged for
another. The fund may also invest in mortgage dollar rolls, which involve the
fund selling mortgage-backed securities and simultaneously agreeing to later
repurchase nearly identical securities at a stated price. In addition, the fund
may invest in futures contracts and lend securities in seeking to enhance total
return and minimize the gap between its performance and that of the index.
However, because of fund expenses, the fund's performance normally is somewhat
below that index.
THE FOLLOWING SENTENCE FOLLOWS THE FIFTH PARAGRAPH IN "OTHER RISK FACTORS"
SECTION ON PAGE 9:
The fund's mortgage dollar rolls could lose money if the price of the
mortgage-backed securities falls below the agreed repurchase price, or if the
counterparty is unable to honor the agreement.
STEP 1 OF THE "BUYING SHARES" SECTION ON PAGE 14 IS MODIFIED AS FOLLOWS:
CHOOSE A FUND, then decide how much you want to invest
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Minimum initial Minimum additional
Investment Investment Minimum balance
-------------------------------------------------------------------------
$2,500 ($1,000 $500 ($100 for $1,000 ($500 for
for retirement and Automatic Investment retirement and
custodial accounts) Plan) custodial accounts)
</TABLE>
SUPPLEMENT TO THE SCHWAB YIELDPLUS FUND(TM) PROSPECTUS
DATED JULY 21, 1999
STEP 1 OF THE "BUYING SHARES" SECTION ON PAGE 10 IS MODIFIED AS FOLLOWS:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Share class Minimum initial Minimum additional
Investment Investment Minimum balance
-------------------------------------------------------------------------
Investor Shares $2,500 ($1,000 $500 ($100 for $1,000 ($500 for
for retirement and Automatic Investment retirement and
custodial accounts) Plan) custodial accounts)
</TABLE>
SUPPLEMENT TO THE SCHWAB CALIFORNIA SHORT/INTERMEDIATE TAX-FREE BOND FUND
SCHWAB CALIFORNIA LONG-TERM TAX-FREE BOND FUND PROSPECTUS
DATED NOVEMBER 15, 1999
SCHWAB SHORT/INTERMEDIATE TAX-FREE BOND FUND
SCHWAB LONG-TERM TAX-FREE BOND FUND PROSPECTUS
DATED NOVEMBER 15, 1999
STEP 1 OF THE "BUYING SHARES" SECTION ON PAGE 14 IS MODIFIED AS FOLLOWS:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Minimum initial Minimum additional
Investment Investment Minimum balance
-------------------------------------------------------------------------
$2,500 ($1,000 $500 ($100 for $1,000 ($500 for
custodial accounts) Automatic Investment Plan) custodial accounts)
</TABLE>
<PAGE> 2
THE FOLLOWING INFORMATION SUPPLEMENTS ALL PROSPECTUSES LISTED ON THE REVERSE
SIDE:
THE YEAR 2000 disclosure information under "Fund Management" for the
prospectuses has been deleted.
A Special Meeting of Shareholders of all SchwabFunds will be held on June 1,
2000 for the following express purposes:
1. To elect trustees of each fund to hold office until their successors are duly
elected and qualified; and
2. To eliminate, reclassify or amend certain fundamental investment policies
and restrictions.
The close of business on March 3, 2000 has been designated as the record date
for determining those shareholders entitled to notice of the meeting (and any
adjournments thereof) and entitled to vote at the meeting. If you become a
shareholder after March 3, 2000, you will not be entitled to vote at the special
meeting. As set forth in the SchwabFunds' proxy materials, action taken at the
special meeting will affect your fund.
Please retain this supplement for future reference.
TF7684 (4/6/00)
