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STATEMENT OF ADDITIONAL INFORMATION
SCHWAB CAPITAL TRUST
101 Montgomery Street, San Francisco, CA 94104
MAY 21, 1996
This Statement of Additional Information is not a prospectus. It
should be read in conjunction with the Prospectuses dated February 28, 1996 (as
amended from time to time) for Schwab International Index Fund(TM) (the
"International Index Fund") and Schwab Small-Cap Index Fund(R) (the "Small-Cap
Index Fund"); the joint Prospectus dated May 21, 1996 (as amended from time to
time) for Schwab Asset Director(R)-High Growth Fund, Schwab Asset
Director(R)-Balanced Growth Fund and Schwab Asset Director(R)-Conservative
Growth Fund (the "Asset Director Funds"); the joint Prospectus dated February
28, 1996 (as amended from time to time) for the Investor Shares and the
e.Shares(TM) of the Schwab S & P 500 Fund (the "S & P 500 Fund"); and the
Prospectus dated May 21, 1996 (as amended from time to time) for the Schwab
Analytics Fund(TM) (the "Analytics Fund"), seven separately managed investment
portfolios (collectively the "Funds") of Schwab Capital Trust (the "Trust"). To
obtain a copy of any of these Prospectuses, please contact Charles Schwab & Co.,
Inc. ("Schwab") at 800-2 NO-LOAD, 24 hours a day, or 101 Montgomery Street, San
Francisco, CA 94104. TDD users may contact Schwab at 800-345-2550, 24 hours a
day. These Prospectuses are also available electronically by using our Internet
address: http://www.schwab.com.
SCHWABFunds(R)
800-2 NO-LOAD
TABLE OF CONTENTS
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INVESTMENT OBJECTIVES.........................................................2
INVESTMENT SECURITIES.........................................................3
INVESTMENT RESTRICTIONS......................................................22
MANAGEMENT OF THE TRUST......................................................24
PORTFOLIO TRANSACTIONS AND TURNOVER..........................................32
TAXES........................................................................34
SHARE PRICE CALCULATION......................................................37
HOW THE FUNDS REFLECT PERFORMANCE............................................37
THE BENEFITS OF INTERNATIONAL INVESTING......................................38
INDEXING AND THE SCHWAB INDEX FUNDS..........................................39
GENERAL INFORMATION..........................................................43
PURCHASE AND REDEMPTION OF SHARES............................................45
OTHER INFORMATION............................................................45
COMPANIES IN THE SCHWAB INTERNATIONAL INDEX.................................A-1
COMPANIES IN THE SCHWAB SMALL-CAP INDEX.....................................B-1
FINANCIAL STATEMENTS........................................................F-1
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INVESTMENT OBJECTIVES
SCHWAB INTERNATIONAL INDEX FUND(TM)
The investment objective of the International Index Fund is to attempt
to track the price and dividend performance (total return) of the Schwab
International Index(R) (the "International Index"), an index created to
represent the performance of common stocks and other equity securities issued by
large publicly traded companies from countries around the world with major
developed securities markets, excluding the United States.
SCHWAB SMALL-CAP INDEX FUND(R)
The investment objective of the Small-Cap Index Fund is to attempt to
track the price and dividend performance (total return) of the Schwab Small-Cap
Index(TM) (the "Small-Cap Index"), an index created to represent the performance
of common stocks of the second 1,000 largest United States companies, ranked by
market capitalization (share price times the number of shares outstanding).
SCHWAB ASSET DIRECTOR(R)-
HIGH GROWTH FUND
The investment objective of the Schwab Asset Director-High Growth Fund
is to provide high capital growth with less volatility than an all-stock
portfolio. This Fund provides the greatest exposure to various stock categories,
including domestic large and small company stocks and international stocks.
SCHWAB ASSET DIRECTOR(R)-
BALANCED GROWTH FUND
The investment objective of the Schwab Asset Director-Balanced Growth
Fund is to provide maximum total return, including both capital growth and
income. This Fund represents a more balanced approach to stocks and bonds.
SCHWAB ASSET DIRECTOR(R)-
CONSERVATIVE GROWTH FUND
The investment objective of the Schwab Asset Director-Conservative
Growth Fund is to provide income and more growth potential than an all-bond
portfolio. This Fund's stock component is designed to help offset inflation.
SCHWAB S&P 500 FUND-INVESTOR SHARES
SCHWAB S&P 500 FUND - e.SHARES(TM)
The Fund's investment objective is to track the price and dividend
performance (total return) of common stocks of United States companies, as
represented by the S&P 500.
SCHWAB ANALYTICS FUND(TM)
The investment objective of the Analytics Fund is to achieve long-term
capital growth.
The investment objectives stated above for each of the Funds, along
with certain investment restrictions adopted by the Funds, are fundamental and
cannot be changed without approval by holders of a majority of the Funds'
outstanding voting shares, as defined in the Investment Company Act of 1940 (the
"1940 Act").
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INVESTMENT SECURITIES
FOREIGN INVESTMENTS
The International Index Fund and the Asset Director Funds expect to
invest in stocks of foreign issuers. The International Index Fund will invest
primarily in such stocks. Investing in foreign issuers involves certain special
considerations, including those set forth below, which are not typically
associated with investing in U.S. issuers. Since investments in the securities
of foreign issuers are usually made and held in foreign currencies, and since
the International Index Fund and the Asset Director Funds may hold cash in
foreign currencies, they may be affected favorably or unfavorably by changes in
currency rates and in exchange control regulations and may incur costs in
connection with conversions between various currencies. The rate of exchange
between the U.S. dollar and other currencies is determined by the forces of
supply and demand in the foreign exchange market as well as by political and
economic factors.
Since foreign companies are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies, there may be less publicly
available information about a foreign company than about a U.S. company.
Securities of foreign companies have less volume, are less liquid and are more
volatile than securities of U.S. companies. Fixed commissions on foreign
securities exchanges are generally higher than negotiated commissions on U.S.
exchanges, although the International Index Fund and the Asset Director Funds
endeavor to achieve the most favorable net results on their portfolio
transactions. There is generally less government supervision and regulation of
foreign securities exchanges, brokers, dealers and listed companies than in the
United States, thus increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities.
Foreign markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Such delays in settlement could result
in temporary periods when a portion of the assets of the International Index
Fund and the Asset Director Funds is uninvested and no return is earned thereon.
The inability to make intended security purchases due to settlement problems
could cause the International Index Fund and the Asset Director Funds to miss
attractive investment opportunities. Losses to the International Index Fund and
the Asset Director Funds arising out of the inability to fulfill a contract to
sell such securities could result in potential liability to the International
Index Fund and the Asset Director Funds.
In addition, with respect to those countries in which the
International Index Fund and the Asset Director Funds may invest or other
countries which may have a significant impact on the companies in which the
International Index Fund and the Asset Director Funds may invest, there is the
possibility of expropriation or confiscatory taxation, political or social
instability, diplomatic developments, change of government or war which could
affect the International Index Fund's and the Asset
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Director Funds' investments. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.
Each of the Asset Director Funds may invest up to 5% of its total
assets in companies located in developing countries. Compared to the United
States and other developed countries, developing countries may have relatively
unstable governments, economies based on only a few industries and securities
markets that trade a small number of securities. Prices on these exchanges tend
to be volatile, and securities in these countries have historically offered
greater potential for gain (as well as loss) than securities of companies
located in developed countries.
Hong Kong. In addition to the risks discussed above, it is impossible
to currently foresee what risk, if any, may exist to the International Index
Fund's and the Asset Director Funds' investments as a result of the planned 1997
incorporation of the British Crown Colony of Hong Kong into the People's
Republic of China. Shareholders should note that the risks discussed above may
increase depending on political and economic developments as the scheduled time
for the change in government in Hong Kong draws nearer.
DEPOSITARY RECEIPTS
Each of the Asset Director Funds may invest up to 5% of its total
assets in American Depositary Receipts and European Depositary Receipts (ADRs
and EDRs), which are receipts representing ownership of shares of a
foreign-based issuer held in trust by a bank or similar financial institution.
These are designed for U.S. and European securities markets as alternatives to
purchasing underlying securities in their corresponding national markets and
currencies. ADRs and EDRs can be sponsored or unsponsored. Sponsored ADRs and
EDRs are certificates in which a bank or financial institution participates with
a custodian. Issuers of unsponsored ADRs and EDRs are not contractually
obligated to disclose material information in the United States. Therefore,
there may not be a correlation between such information and the market value of
the unsponsored ADR or EDR.
OPTIONS ON SECURITIES
Writing Covered Options. The Funds may write (sell) covered call and
put options on any securities in which they may invest. The Funds may purchase
and write such options on securities that are listed on domestic or foreign
securities exchanges or traded in the over-the-counter market. All call options
written by the Funds are covered, which means that the Funds will own the
securities subject to the option so long as the option is outstanding. The
purpose of writing covered call options is to realize greater income than would
be realized on portfolio securities transactions alone. However, in writing
covered call options for additional income, the Funds may forego the opportunity
to profit from an increase in the market price of the underlying security.
All put options written by the Funds will be covered, which means that
each of the Funds will have deposited with its custodian cash, U.S. government
securities or other high-grade debt securities (i.e., securities rated in one of
the top three categories by Moody's Investor Service ("Moody's") or Standard &
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Poor's ("S&P") or, if unrated, determined by the Funds' Investment Manager to be
of comparable credit quality) with a value at least equal to the exercise price
of the put option. The purpose of writing such options is to generate additional
income for the Funds. However, in return for the option premium, the Funds
accept the risk that they may be required to purchase the underlying securities
at a price in excess of the securities market value at the time of purchase.
The Funds may terminate their obligations under a written call or put
option by purchasing an option identical to the one it has written. Such
purchases are referred to as "closing purchase transactions."
Purchasing Options. The Funds may purchase put and call options on any
securities in which they may invest or options on any securities index based on
securities in which they may invest. The Funds may also enter into closing sale
transactions in order to realize gains or minimize losses on options they have
purchased.
The writer of an option may have no control over when the underlying
securities must be sold, in the case of a call option, or purchased, in the case
of a put option, since, with regard to certain options, the writer may be
assigned an exercise notice at any time prior to the termination of the
obligation. Whether or not an option expires unexercised, the writer retains the
amount of the premium. This amount may, in the case of a covered call option, be
offset by a decline in the market value of the underlying security during the
option period. If a call option is exercised, the writer experiences a profit or
loss from the sale of the underlying security. If a put option is exercised, the
writer must fulfill its obligation to purchase the underlying security at the
exercise price, which will usually exceed the then market value of the
underlying security.
The purchase of a call option would entitle the Funds, in return for
the premium paid, to purchase specified securities at a specified price during
the option period. The Funds would ordinarily realize a gain if, during the
option period, the value of such securities exceeded the sum of the exercise
price, the premium paid and transaction costs; otherwise the Funds would realize
either no gain or a loss on the purchase of the call option.
Risks Associated With Options Transactions. There is no assurance that
a liquid secondary market on a domestic or foreign options exchange will exist
for any particular exchange-traded option or at any particular time. If the
Funds are unable to effect a closing purchase transaction with respect to
covered options they have written, the Funds will not be able to sell the
underlying securities or dispose of assets held in a segregated account until
the options expire or are exercised. Similarly, if the Funds are unable to
effect a closing sale transaction with respect to options they have purchased,
they would have to exercise the options in order to realize any profit and will
incur transaction costs upon the purchase or sale of underlying securities.
Reasons for the absence of a liquid secondary market on an exchange
include the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options;
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(iv) unusual or unforeseen circumstances may interrupt normal operations on an
exchange; (v) the facilities of an exchange or the Options Clearing Corporation
(the "OCC") may not at all times be adequate to handle current trading volume;
or (vi) one or more exchanges could, for economic or other reasons, decide or be
compelled at some future date to discontinue the trading of options (or a
particular class or series of options), although outstanding options on that
exchange that had been issued by the OCC as a result of trades on that exchange
would continue to be exercisable in accordance with their terms.
The Funds may purchase and sell both options that are traded on U.S.
and foreign exchanges and options traded over-the-counter with broker-dealers
who make markets in these options. The ability to terminate over-the-counter
options is more limited than with exchange-traded options and may involve the
risk that broker-dealers participating in such transactions will not fulfill
their obligations. Until such time as the staff of the SEC changes its position,
the Funds will treat purchased over-the-counter options and all assets used to
cover written over-the-counter options as illiquid securities, except that with
respect to options written with primary dealers in U.S. government securities
pursuant to an agreement requiring a closing purchase transaction at a formula
price, the amount of illiquid securities may be calculated with reference to a
formula approved by the staff of the SEC. Each of the Funds will write or
purchase an option only where the market value of that option, when aggregated
with the market value of all other options transactions made on behalf of the
Fund, does not exceed 5% of the Fund's total assets.
FOREIGN CURRENCY TRANSACTIONS
Forward Foreign Currency Exchange Contracts. The International Index
Fund and the Asset Director Funds may enter into forward foreign currency
exchange contracts in several circumstances. The International Index Fund and
the Asset Director Funds may engage in foreign currency exchange transactions to
protect against uncertainty in the level of future exchange rates. The
International Index Fund and the Asset Director Funds expect to engage in
foreign currency exchange transactions in connection with the purchase and sale
of portfolio securities (so-called "transaction hedging") and to protect the
value of specific portfolio positions ("position hedging").
For transaction hedging purposes, the International Index Fund and the
Asset Director Funds enter into foreign currency transactions with respect to
specific receivables or payables of the funds arising in connection with the
purchase or sale of portfolio securities. By transaction hedging, the
International Index Fund and the Asset Director Funds will attempt to protect
against a possible loss resulting from an adverse change in the relationship
between (i) the U.S. dollar and the applicable foreign currency during the
period between the date on which the security is purchased or sold and (ii) the
transaction's settlement date. When engaging in position hedging, the
International Index Fund and the Asset Director Funds enter into foreign
currency exchange transactions to protect against a decline in the values of the
foreign currencies in which portfolio securities are denominated (or against an
increase in the value of currency for securities which the International Index
Fund and the Asset Director Funds expect to purchase).
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When engaging in position and/or transaction hedging, the
International Index Fund and the Asset Director Funds may purchase or sell
foreign currencies on a spot (or cash) basis at the prevailing spot rate and may
also enter into contracts to purchase or sell foreign currencies at a future
date ("forward contracts") and purchase and sell foreign currency futures
contracts "futures contracts"). The International Index Fund and the Asset
Director Funds may also purchase exchange-listed and over-the-counter call and
put options on futures contracts and on foreign currencies. A put option on a
futures contract gives the International Index Fund and the Asset Director Funds
the right to assume a short position in the futures contract until expiration of
the option. A put option on currency gives the International Index Fund and the
Asset Director Funds the right to sell a currency at an exercise price until the
expiration of the option. A call option on a futures contract gives the
International Index Fund and the Asset Director Funds the right to assume a long
position in the futures contract until the expiration of the option. A call
option on currency gives the International Index Fund and the Asset Director
Funds the right to purchase a currency at the exercise price until the
expiration of the option.
Hedging transactions involve costs and may result in losses, and the
ability of the International Index Fund and the Asset Director Funds to engage
in hedging transactions may be limited by tax considerations. Transaction and
position hedging do not eliminate fluctuations in the underlying prices of the
securities which the Funds own or expect to purchase or sell. They simply
establish a rate of exchange that one can achieve at some future point in time.
Additionally, although these techniques tend to minimize the risk of loss due to
decline in the value of the hedged currency, they tend to limit any potential
gain that might result from an increase in the value of such currency.
Although the contracts are not presently regulated by the Commodity
Futures Trading Commission (the "CFTC"), the CFTC may in the future assert
authority to regulate these contracts. In such event, the ability of the
International Index Fund and the Asset Director Funds to utilize forward foreign
currency exchange contracts may be restricted.
Each of the Asset Director Funds will enter into a forward foreign
currency exchange contract only when the market value of such contract, when
aggregated with the market value of all other such contracts held by the Fund,
does not exceed 5% of the Fund's total assets.
The International Index Fund and the Asset Director Funds generally
will not enter into a forward contract with a term of greater than one year.
While the International Index Fund and the Asset Director Funds will
enter into forward contracts to reduce currency exchange rate risks,
transactions in such contracts involve certain other risks. Thus, while the
International Index Fund and the Asset Director Funds may benefit from such
transactions, unanticipated changes in currency prices may result in a poorer
overall performance for the International Index Fund and the Asset Director
Funds than if they had not engaged in any such transactions. Moreover, there may
be imperfect correlation between the International Index Fund's and the Asset
Director Funds' portfolio holdings of securities denominated in a particular
currency
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and forward contracts entered into by the International Index Fund and the Asset
Director Funds. Such imperfect correlation may cause the International Index
Fund and the Asset Director Funds to sustain losses, which will prevent the
International Index Fund and the Asset Director Funds from achieving a complete
hedge or expose the International Index Fund and the Asset Director Funds to
risk of foreign exchange loss.
Writing and Purchasing Currency Call and Put Options. The
International Index Fund and the Asset Director Funds may write covered put and
call options and purchase put and call options on foreign currencies for the
purpose of protecting against declines in the dollar value of portfolio
securities and against increases in the dollar cost of securities to be
acquired. A call option written by the International Index Fund and the Asset
Director Funds obligates the International Index Fund and the Asset Director
Funds to sell specified currency to the holder of the option at a specified
price at any time before the expiration date. A put option written by the
International Index Fund and the Asset Director Funds would obligate the
International Index Fund and the Asset Director Funds to purchase specified
currency from the option holder at a specified time before the expiration date.
The writing of currency options involves a risk that the International Index
Fund and the Asset Director Funds will, upon exercise of the option, be required
to sell currency subject to a call at a price that is less than the currency's
market value or be required to purchase currency subject to a put at a price
that exceeds the currency's market value.
The International Index Fund and the Asset Director Funds may
terminate their obligations under a call or put option by purchasing an option
identical to the one it has written. Such purchases are referred to as "closing
purchase transactions." The International Index Fund and the Asset Director
Funds would also be able to enter into closing sale transactions in order to
realize gains or minimize losses on options purchased by the International Index
Fund and the Asset Director Funds.
The purchase of a call option would entitle the International Index
Fund and the Asset Director Funds, in return for the premium paid, to purchase
specified currency at a specified price during the option period. The
International Index Fund and the Asset Director Funds would ordinarily realize a
gain or a loss on the purchase of the call option.
The purchase of a put option would entitle the International Index
Fund and the Asset Director Funds, in exchange for the premium paid, to sell
specific currency at a specified price during the option period. The purchase of
protective puts is designed merely to offset or hedge against a decline in the
dollar value of the International Index Fund's and the Asset Director Funds'
portfolio securities due to currency exchange rate fluctuations. The
International Index Fund and the Asset Director Funds would ordinarily realize a
gain, if, during the option period, the value of the underlying currency
decreased below the exercise price sufficiently to more than cover the premium
and transaction costs; otherwise the International Index Fund and the Asset
Director Funds would realize either no gain or a loss on the purchase of the put
option. Gains and losses on the purchase of protective put options would tend to
be offset by countervailing changes in the value of the underlying currency.
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Special Risks Associated With Options on Foreign Currency. An
exchange-traded option position may be closed out only on an options exchange
that provides a secondary market for an option of the same series. Although the
International Index Fund and the Asset Director Funds will generally purchase or
write only those options for which there appears to be an active secondary
market, there is no assurance that a liquid secondary market on an exchange will
exist for any particular option or at any particular time. For some options, no
secondary market on an exchange may exist. In such event, it might not be
possible to effect closing transactions in particular options, with the result
that the International Index Fund and the Asset Director Funds would have to
exercise their options in order to realize any profit and would incur
transaction costs upon the sale of underlying securities pursuant to the
exercise of put options. If the International Index Fund and the Asset Director
Funds, as covered call option writers, are unable to effect a closing purchase
transaction in a secondary market, they will not be able to sell the underlying
currency (or security denominated in that currency) until the option expires or
they deliver the underlying currency upon exercise.
There is no assurance that higher than anticipated trading activity or
other unforeseen events might not, at times, render certain of the facilities of
the OCC inadequate. This could result in an exchange instituting special
procedures that may interfere with the timely execution of customers' orders.
The International Index Fund and the Asset Director Funds will
purchase and write over-the-counter options only to the extent consistent with
their limitations on investments in illiquid securities, as described in the
Prospectuses. Trading in over-the-counter options is subject to the risk that
the other party will be unable or unwilling to close-out purchasing and writing
activities.
FUTURES CONTRACTS
AND OPTIONS ON FUTURES CONTRACTS
The Funds may purchase and sell various kinds of futures contracts and
options on futures contracts. The futures contracts may be based on various
securities (such as U.S. government securities), securities indices, foreign
currencies and other financial instruments and indices. All futures contracts
entered into by the Funds are traded on U.S. exchanges or boards of trade that
are licensed and regulated by the CFTC or on foreign exchanges. The Funds are
not permitted to engage in speculative futures trading.
Futures Contracts. A futures contract may generally be described as an
agreement between two parties to buy and sell particular financial instruments
for an agreed upon price during a designated month (or to deliver the final cash
settlement price, in the case of a contract relating to an index or otherwise
not calling for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, the
Funds can seek, through the sale of futures contracts, to offset a decline in
the value of their current portfolio securities. When rates are falling or
prices are rising, the Funds, through the purchase of futures contracts, can
attempt to secure better rates or prices than might later be available in the
market when they effect anticipated purchases. Similarly, the International
Index Fund and the Asset Director Funds can sell futures contracts on a
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specified currency to protect against a decline in the value of such currency
and their portfolio securities that are denominated in such currency. The
International Index Fund and the Asset Director Funds can purchase futures
contracts on a foreign currency to fix the price in U.S. dollars of a security
denominated in such currency that the International Index Fund and the Asset
Director Funds have acquired or expect to acquire.
Although futures contracts by their terms generally call for the
actual delivery or acquisition of underlying securities or the cash value of the
index, in most cases the contractual obligation is fulfilled before the date of
the contract without having to make or take such delivery. The contractual
obligation is offset by buying (or selling, as the case may be) on a commodities
exchange an identical futures contract calling for delivery in the same month.
Such a transaction, which is effected through a member of an exchange, cancels
the obligation to make or take delivery of the securities or the cash value of
the index underlying the contractual obligations. The Funds may incur brokerage
fees when they purchase or sell futures contracts.
Positions taken in the futures markets are not normally held to
maturity but are instead liquidated through offsetting transactions, which may
result in a profit or a loss. While the Funds' futures contracts on securities
or currency will usually be liquidated in this manner, the Funds may instead
make or take delivery of the underlying securities or currency whenever it
appears economically advantageous for them to do so. A clearing corporation
associated with the exchange on which futures on securities or currencies are
traded guarantees that, if still open, the sale or purchase will be performed on
the settlement date.
Options on Futures Contracts. The acquisition of put and call options
on futures contracts will give the Funds the right (but not the obligation), for
a specified price, to sell or to purchase, respectively, the underlying futures
contract at any time during the option period. As the purchaser of an option on
a futures contract, the Funds obtain the benefit of the futures position if
prices move in a favorable direction but limit their risk of loss in the event
of an unfavorable price movement to the loss of the premium and transaction
costs.
The writing of a call option on a futures contract generates a premium
that may partially offset a decline in the value of the Funds' assets. By
writing a call option, the Funds become obligated, in exchange for the premium,
to sell a futures contract that may have a value lower than the exercise price.
Thus, the loss incurred by the Funds in writing options on futures is
potentially unlimited and may exceed the amount of the premium received. The
Funds will incur transaction costs in connection with the writing of options on
futures.
The holder or writer of an option on a futures contract may terminate
its position by selling or purchasing an offsetting option on the same series.
There is no guarantee that such closing transactions can be effected. The Funds'
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
Hedging Strategies With Futures. Hedging by use of futures contracts
seeks to establish more certainty than would otherwise
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be possible with respect to the effective price, rate of return or currency
exchange rate on portfolio securities or securities that the Funds own or
propose to acquire. Such futures contracts may include contracts for the future
delivery of securities held by the Funds or securities with characteristics
similar to those of the Funds' portfolio securities. Similarly, the
International Index Fund and the Asset Director Funds may sell futures contracts
on currency in which their portfolio securities are denominated or in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency if there is an established historical pattern of
correlation between the two currencies. If, in the opinion of the Investment
Manager, there is a sufficient degree of correlation between price trends for
the Funds' portfolio securities and futures contracts based on other financial
instruments, securities indices or other indices, the Funds may also enter into
such futures contracts as part of their hedging strategy. Although under some
circumstances, prices of securities in the Funds' portfolio may be more or less
volatile than prices of such futures contracts, the Investment Manager will
attempt to estimate the extent of this difference in volatility based on
historical patterns and to compensate for it by having the Funds enter into a
greater or lesser number of futures contracts or by attempting to achieve only a
particular hedge against price changes affecting the Funds' portfolio
securities. When hedging of this character is successful, any depreciation in
the value of the portfolio securities will be substantially offset by
appreciation in the value of the futures position. On the other hand, any
unanticipated appreciation in the value of the Funds' portfolio securities will
be substantially offset by a decline in the value of the futures position.
On other occasions, the Funds may take "long" positions by purchasing
such futures contracts. This would be done, for example, when the Funds
anticipate the subsequent purchase of particular securities when they have the
necessary cash but expect the prices or currency exchange rates then available
in the applicable market to be less favorable than prices that are currently
available.
When buying or selling futures contracts, a Fund must deposit an
amount of cash, cash equivalents or liquid, high-quality debt instruments with
its broker equal to a fraction of the contract amount. This amount is known as
"initial margin" and is in the nature of a performance bond or good faith
deposit on the contract, which will be returned to the Fund upon termination of
the futures contract, assuming all contractual obligations have been satisfied.
Subsequent payments to and from the broker, known as "variation margin," will be
made at least daily as the price of the futures contract fluctuates and the
Fund's position in the contract becomes more or less valuable, a process known
as "marking-to-market."
Regulations of the Commodities Futures Trading Commission ("CFTC")
applicable to the Funds generally require that all of their futures transactions
constitute "bona fide" hedging transactions. As a result, a Fund will normally
sell futures contracts to protect against a decrease in the price of securities
it owns but intends to sell or purchase futures contracts to protect against an
increase in the price of securities it intends to purchase. In addition, the
Funds may purchase and sell futures contracts and options as a substitute for a
comparable market position in the underlying securities. Futures transactions
need not
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constitute "bona fide" hedging under CFTC regulations if the aggregate initial
margin and premiums required to establish such positions do not exceed 5% of
each Fund's net assets.
Risks Involved in Futures and Options Transactions. Futures and
options transactions involve risks which, in some strategies, can be
substantial, due to the low margin deposits required and the extremely high
degree of leverage involved in futures and options trading. However, to the
extent the Funds' futures and options practices are limited to hedging purposes,
the Investment Manager does not believe that the Funds are subject to the degree
of risk frequently associated with futures and options transactions. To the
extent the Funds engage in the use of futures and options on futures other than
for hedging purposes, the Funds may be subject to additional risk.
Three principal areas of risk are present when futures and options
contracts are used even in a hedging context. First, there may not always be a
liquid secondary market for a futures or option contract at the time when a Fund
seeks to "close out" its position. If a Fund were unable to "close out" a
futures or option position and prices moved adversely, the Fund would have to
continue to make daily cash payments to maintain its required margin, and if the
Fund had insufficient cash to meet this requirement, it may have to sell
portfolio securities at a disadvantageous time. In addition, the Fund might be
required to deliver the securities underlying futures or options contracts it
holds. Each Fund will seek to reduce the risk that it will be unable to "close
out" contracts by entering into only futures or options contracts that are
traded on national exchanges and for which there appears to be a liquid
secondary market.
It is also possible that changes in the prices of futures or options
contracts might correlate imperfectly, or not at all, with changes in the market
values of the securities being hedged. This situation could result from price
distortions in the futures or options markets due to, among other things, active
trading by speculators and use of offsetting "closing" transactions by other
investors seeking to avoid meeting additional margin deposit requirements. In
the event of significant market distortions, it is possible that a Fund could
lose money on futures or options contracts and experience appreciation in the
value of its portfolio securities, or vice versa.
Finally, adverse market movements could cause a Fund to lose up to its
full investment in an options contract and/or to experience substantial losses
on an investment in a futures contract. However, barring such significant market
distortions, a similar result could be expected were the Fund to invest directly
in the securities being hedged. There is also the risk of loss by a Fund of
margin deposits in the event of bankruptcy of a broker with whom the Fund has an
open position in a futures contract or option.
The extent to which each Fund may purchase and sell futures, options,
equity index participations and index participation contracts may be limited by
the fact that each Fund intends to meet Internal Revenue Code of 1986, as
amended (the "Code"), requirements for qualification as a regulated investment
company. See "Federal Income Tax."
SWAPS
Each of the Asset Director Funds may enter into swaps on various
securities (such as U.S. government securities), securities indices,
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interest rates, prepayment rates, foreign currencies or other financial
instruments or indices in order to protect the value of the Asset Director Funds
from interest rate fluctuations and to hedge against fluctuations in the
floating rate market in which the Asset Director Funds' investments are traded,
for both hedging and non-hedging purposes. While swaps are different from
futures contracts (and options on futures contracts) in that swap contracts are
individually negotiated with specific counterparties, the Asset Director Funds
will use swap contracts for purposes similar to the purposes for which they use
options, futures and options on futures. Those uses of swap contracts (i.e.,
risk management and hedging) present the Funds with risks and opportunities
similar to those associated with options contracts, futures contracts and
options on futures. See "Futures Contracts and Options on Futures Contracts" in
this Statement.
The Asset Director Funds may enter into these transactions to manage
their exposure to changing interest rates and other market factors. Some
transactions may reduce each Asset Director Fund's exposure to market
fluctuations while others may tend to increase market exposure.
The use of swaps involves investment techniques and risks different
from and potentially greater than those associated with ordinary fund securities
transactions. If the Investment Manager is incorrect in its expectations of
market values, interest rates or currency exchange rates, the investment
performance of the Asset Director Funds would be less favorable than it would
have been if this investment technique were not used. The Asset Director Funds
will only invest in swaps up to 5% of each Fund's total assets.
PREFERRED STOCK
The Funds may invest in preferred stock. Preferred stock has priority
as to income and generally as to assets of the issuer; however, income is
usually limited to a definitive percentage regardless of the issuer's earnings.
Preferred stock usually has limited voting rights. The Asset Director Funds will
only invest in preferred stock up to 5% of each Fund's net assets.
CONVERTIBLE SECURITIES
Each of the Asset Director Funds may invest up to 5% of its net assets
in securities that are convertible into common stock, including convertible
bonds that are investment grade, convertible preferred stocks and warrants. The
S&P 500 Fund will not purchase convertible securities directly. It may, however,
hold convertible securities to the extent that such holdings are incident to the
Fund's ownership of common stocks.
Convertible bonds are issued with lower coupons than nonconvertible
bonds of the same quality and maturity, but they give holders the option to
exchange their bonds for a specific number of shares of the company's common
stock at a predetermined price. This structure allows the convertible bond
holder to participate in share price movements in the company's common stock.
The actual return on a convertible bond may exceed its stated yield if the
company's common stock appreciates in value and the option to convert to common
shares becomes more valuable.
Convertible preferred stocks are nonvoting equity securities that pay
a fixed dividend. These securities have a convertible feature similar to
convertible bonds; however,
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they do not have a maturity date. Due to their fixed-income features,
convertible issues typically are more sensitive to interest rate changes than
the underlying common stock. In the event of liquidation, bondholders would have
claims on company assets senior to those of stockholders; preferred stockholders
would have claims senior to those of common stockholders.
The Funds may invest in warrants. Warrants entitle the holder to buy
the issuer's stock at a specific price for a specific period of time. The price
of a warrant tends to be more volatile than, and does not always track, the
price of its underlying stock. Warrants are issued with expiration dates. Once a
warrant expires, it has no value in the market.
REAL ESTATE-RELATED INVESTMENTS
Each of the Asset Director Funds may invest up to 5% of its total
assets in real estate-related investments. Real estate-related instruments
include real estate investment trusts, commercial and residential
mortgage-backed securities and real estate financings. Real estate-related
instruments are sensitive to factors such as changes in real estate values and
property taxes, interest rates, cash flow of underlying real estate assets,
overbuilding and the management skill and creditworthiness of the issuer. Real
estate-related instruments may also be affected by tax and regulatory
requirements, such as those relating to the environment.
PRECIOUS METAL-RELATED INVESTMENTS
Each of the Asset Director Funds may invest up to 5% of its total
assets in precious metal-related investments. The Asset Director Funds, the S&P
500 Fund and the Analytics Fund may invest in common stocks of domestic
companies principally engaged in precious metal-related activities which include
companies principally engaged in the extraction, processing, distribution or
marketing of precious metals if at the time of investment the Investment Manager
considers that at least 50% of the company's assets, revenues or profits are
derived from the precious metal industry. The Asset Director Funds may also
invest in securities of foreign companies principally engaged in the precious
metals industry. For further disclosure on foreign securities, see "Foreign
Investments" in this Statement of Additional Information.
The Asset Director Funds, the S&P 500 Fund and the Analytics Fund may
also invest in futures on precious metals, such as gold futures, and options
thereon. Such investments are subject to the investment limitations for
investments in futures and options for the Asset Director Funds, the S&P 500
Fund and the Analytics Fund as set forth in "Futures Contracts and Options on
Futures Contracts" in this Statement of Additional Information.
Prices of precious metals can be expected to respond to changes in
rates of inflation and to perceptions of economic and political instability.
Historically, the prices of precious metals and of securities of companies
engaged in the precious metal-related activities may be subject to extreme
fluctuations, reflecting wider economic or political instability or for other
reasons.
U.S. GOVERNMENT SECURITIES
The Funds may purchase U.S. government securities. Direct obligations
of the U.S. government are supported by the full
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faith and credit of the U.S. Treasury. While obligations of certain U.S.
government agencies and instrumentalities are similarly backed, those of others,
such as the Federal National Mortgage Association and the Student Loan Marketing
Association, are only supported by the right of the issuer to borrow from the
U.S. Treasury, the discretionary authority of the U.S. government to purchase
the agency's obligations or the credit of the issuing agency or instrumentality.
There can be no assurance that the U.S. government would provide financial
support to U.S. government sponsored agencies or instrumentalities if it is not
obligated to do so by law. A Fund will invest in U.S. government securities not
backed by the full faith and credit of the U.S. Treasury only when the
Investment Manager is satisfied that the credit risk with respect to their
issuer is minimal.
GOVERNMENT
"MORTGAGE BACKED" SECURITIES
Among the U.S. government securities in which the Funds may invest are
government "mortgage-backed" (or government guaranteed mortgage-related)
securities. Mortgages backing the securities purchased by the Funds include,
among others, conventional thirty-year fixed rate mortgages, graduated payment
mortgages, fifteen-year mortgages and adjustable rate mortgages. All of these
mortgages can be used to create pass-through securities. A pass-through security
is formed when mortgages are pooled together and undivided interests in the pool
or pools are sold. The cash flow from the mortgages is passed through to the
holders of the securities in the form of periodic payments of interest,
principal and prepayments (net of a service fee). Prepayments occur when the
holder of an individual mortgage prepays the remaining principal before the
mortgage's scheduled maturity date. As a result of the pass-through of
prepayments of principal on the underlying securities, mortgage-backed
securities are often subject to more rapid prepayment of principal then their
stated maturity indicates. Because the prepayment characteristics of the
underlying mortgages vary, it is not possible to predict accurately the realized
yield or average life of a particular issue of pass-through certificates.
Prepayment rates are important because of their effect on the yield and price of
the securities. Accelerated prepayments adversely impact yields for
pass-throughs purchased at a premium (i.e., a price in excess of principal
amount) and may involve additional risk of loss of principal because the premium
may not have been fully amortized at the time the obligation is repaid. The
opposite is true for pass-throughs purchased at a discount. The Funds may
purchase mortgage-related securities at a premium or at a discount. Principal
and interest payments on the mortgage-related securities are government
guaranteed to the extent described below. Such guarantees do not extend to the
value or yield of the mortgage-related securities themselves or of a Fund's
shares.
GNMA Certificates. Certificates of the Government National Mortgage
Association ("GNMA") are mortgage securities which evidence an undivided
interest in a pool or pools of mortgages. GNMA Certificates that the Funds may
purchase are the "modified pass-through" type, which entitle the holder to
receive timely payment of all interest and principal payments due on the
mortgage pool, net of fees paid to the "issuer" and GNMA, regardless of whether
or not the mortgagor actually makes the payment.
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The National Housing Act authorized GNMA to guarantee the timely
payment of principal and interest on securities backed by a pool of mortgages
insured by the Federal Housing Administration ("FHA") or guaranteed by the
Veterans Administration ("VA"). The GNMA guarantee is backed by the full faith
and credit of the U.S. government. GNMA is also empowered to borrow without
limitation from the U.S. Treasury if necessary to make any payments required
under its guarantee.
The average life of a GNMA Certificate is likely to be substantially
shorter than the original maturity of the mortgages underlying the securities.
Prepayments of principal by mortgagors and mortgage foreclosures will usually
result in the return of the greater part of principal investment long before the
maturity of the mortgages in the pool. Foreclosures impose no risk to principal
investment because of the GNMA guarantee, except to the extent that a Fund has
purchased the certificates above par in the secondary market.
FHLMC Securities. The Federal Home Loan Mortgage Corporation ("FHLMC")
was created in 1970 to promote development of a nationwide secondary market in
conventional residential mortgages. The FHLMC issues two types of mortgage
pass-through securities ("FHLMC Certificates"): mortgage participation
certificates ("PCs") and guaranteed mortgage certificates ("GMCs"). PCs resemble
GNMA Certificates in that each PC represents a pro rata share of all interest
and principal payments made and owed on the underlying pool. The FHLMC
guarantees timely monthly payment of interest on PCs and the ultimate payment of
principal.
GMCs also represent a pro rata interest in a pool of mortgages.
However, these instruments pay interest semi-annually and return principal once
a year in guaranteed minimum payments. The expected average life of these
securities is approximately ten years. The FHLMC guarantee is not backed by the
full faith and credit of the U.S. government.
FNMA Securities. The Federal National Mortgage Association ("FNMA")
was established in 1938 to create a secondary market in mortgages insured by the
FHA. FNMA issues guaranteed mortgage pass-through certificates ("FNMA
Certificates"). FNMA Certificates resemble GNMA Certificates in that each FNMA
Certificate represents a pro rata share of all interest and principal payments
made and owed on the underlying pool. FNMA guarantees timely payment of interest
and principal on FNMA Certificates. The FNMA guarantee is not backed by the full
faith and credit of the U.S. government.
OTHER ASSET-BACKED SECURITIES
The Asset Director Funds may invest a portion of their assets in debt
obligations known as "Asset-Backed Securities" that are rated in one of the
three highest rating categories by a nationally recognized statistical rating
organization (e.g., Standard & Poor's Corporation or Moody's Investors Service,
Inc.) or, if not so rated, deemed to be of equivalent quality by the Investment
Manager pursuant to guidelines adopted by the Board of Trustees. The credit
quality of most Asset-Backed Securities depends primarily on the credit quality
of the assets underlying such securities, how well the entity issuing the
security is insulated from the credit risk of the originator (or any other
affiliated entities) and
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the amount and quality of any credit support provided to the securities. The
rate of principal payments on asset-backed securities generally depends on the
rate of principal payments received on the underlying assets, which in turn may
be affected by a variety of economic and other factors. As a result, the yield
on any asset-backed security is difficult to predict with precision, and actual
yield to maturity may be more or less than the anticipated yield to maturity.
Asset-Backed Securities may be classified as "Pass-Through Certificates" or
"Collateralized Obligations."
"Pass-Through Certificates" are asset-backed securities that represent
undivided fractional ownership interests in the underlying pool of assets.
Pass-Through Certificates usually provide for payments of principal and interest
received to be passed through to their holders, usually after deduction for
certain costs and expenses incurred in administering the pool. Because
Pass-Through Certificates represent ownership interests in the underlying
assets, the holders thereof bear directly the risk of any defaults by the
obligors on the underlying assets not covered by any credit support.
Asset-Backed Securities issued in the form of debt instruments, also
known as Collateralized Obligations, are generally issued as the debt of a
special purpose entity organized solely for the purpose of owning such assets
and issuing such debt. The assets collateralizing such Asset-Backed Securities
are pledged to a trustee or custodian for the benefit of the holders thereof.
Such issuers generally hold no assets other than those underlying the
Asset-Backed Securities and any credit support provided. As a result, although
payments on such Asset-Backed Securities are obligations of the issuers, in the
event of default on the underlying assets not covered by any credit support, the
issuing entities are unlikely to have sufficient assets to satisfy their
obligations on the related Asset-Backed Securities.
METHODS OF ALLOCATING
CASH FLOWS
While many Asset-Backed Securities are issued with only one class of
security, many others are issued in more than one class, each with different
payment terms. Multiple class Asset-Backed Securities are issued for two main
reasons. First, multiple classes may be used as a method of providing credit
support. This is accomplished typically through creation of one or more classes
whose right to payments on the Asset-Backed Security is made subordinate to the
right to such payments of the remaining class or classes. Second, multiple
classes may permit the issuance of securities with payment terms, interest rates
or other characteristics differing both from those of each other and from those
of the underlying assets. Examples include so-called "multi-tranche CMOs"
(collateralized mortgage obligations) with serial maturities such that all
principal payments received on the mortgages underlying the securities are first
paid to the class with the earliest stated maturity, and then sequentially to
the class with the next stated maturity), "Strips" (Asset-Backed Securities
entitling the holder to disproportionate interests with respect to the
allocation of interest and principal of the assets backing the security), and
securities with a class or classes having characteristics that mimic the
characteristics of non-Asset-Backed Securities, such as floating interest rates
(i.e., interest rates which adjust as a specified benchmark changes) or
scheduled amortization of principal.
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TYPES OF CREDIT SUPPORT
Asset-Backed Securities are often backed by a pool of assets
representing the obligations of a number of different parties. To lessen the
effect of failures by obligors on these underlying assets to make payments, such
securities may contain elements of credit support. Such credit support falls
into two classes: liquidity protection and protection against ultimate default
on the underlying assets. Liquidity protection refers to the provision of
advances, generally by the entity administering the pool of assets, to ensure
that scheduled payments on the underlying pool are made in a timely fashion.
Protection against ultimate default ensures payment on at least a portion of the
assets in the pool. Such protection may be provided through guarantees,
insurance policies or letters of credit obtained from third parties, through
various means of structuring the transaction, or through a combination of such
approaches. Examples of Asset-Backed Securities with credit support arising out
of the structure of the transaction include "senior-subordinated securities"
(multiple class Asset-Backed Securities with certain classes subordinate to
other classes as to the payment of principal thereon, with the result that
defaults on the underlying assets are borne first by the holders of the
subordinated class) and Asset-Backed Securities that have "reserve funds" (where
cash or investments, sometimes funded from a portion of the initial payments on
the underlying assets, are held in reserve against future losses) or that have
been "overcollateralized" (where the scheduled payments on, or the principal
amount of, the underlying assets substantially exceed that required to make
payment on the Asset-Backed Securities and pay any servicing or other fees). The
degree of credit support provided on each issue is based generally on historical
information respecting the level of credit risk associated with such payments.
Delinquency or loss in excess of that anticipated could adversely affect the
return on an investment in an Asset-Backed Security.
CREDIT CARD RECEIVABLE SECURITIES
The Asset Director Funds may invest in Asset-Backed Securities backed
by receivables from revolving credit card agreements ("Credit Card Receivable
Securities"). Most of the Credit Card Receivable Securities issued publicly to
date have been Pass-Through Certificates. In order to lengthen the maturity of
Credit Card Receivable Securities, most such securities provide for a fixed
period during which only interest payments on the underlying accounts are passed
through to the security holder and principal payments received on such accounts
are used to fund the transfer of additional credit card charges made on an
account to the pool of assets supporting the related Credit Card Receivable
Securities. The initial fixed period usually may be shortened upon the
occurrence of specified events that signal a potential deterioration in the
quality of the assets backing the security, such as the imposition of a cap on
interest rates. The ability of the issuer to extend the life of an issue of
Credit Card Receivable Securities thus depends upon the continued generation of
additional principal amounts in the underlying accounts during the initial
period and the non-occurrence of specified events. Competitive and general
economic factors could adversely affect the rate at which new receivables are
created in an account and conveyed to an issuer, shortening the expected
weighted average life of the related Credit Card Receivable Security, and
reducing its yield. An acceleration in
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cardholders' payment rates or any other event that shortens the period during
which additional credit card charges on an account may be transferred to the
pool of assets supporting the related Credit Card Receivable Security could have
a similar effect on the weighted average life and yield.
Credit card holders are entitled to the protection of a number of
state and federal consumer credit laws, many of which give such holders the
right to set off certain amounts against balances owed on the credit card,
thereby reducing amounts paid on accounts. In addition, unlike most other
Asset-Backed Securities, accounts are unsecured obligations of the cardholder.
CERTIFICATES OF DEPOSIT
AND BANKERS' ACCEPTANCES
The Funds may invest in certificates of deposit, which are
certificates issued against funds deposited in a banking institution for a
specified period of time at a specified interest rate. Bankers' acceptances are
credit instruments evidencing a bank's obligation to pay a draft drawn on it by
a customer. These instruments reflect the obligation both of the bank and of the
drawer to pay the full amount of the instrument upon maturity. Each Fund will
only invest in certificates of deposit and bankers' acceptances of banks having
capital, surplus and undivided profits in excess of $100 million.
COMMERCIAL PAPER
The Funds may invest in Commercial Paper, which consists of
short-term, unsecured promissory notes issued to finance short-term credit
needs. The Funds will only invest in commercial paper that at the time of
purchase is rated Prime-1 or Prime-2 by Moody's, A-1 or A-2 by S&P, "Duff 2" or
higher by Duff & Phelps, Inc. ("Duff"), or "F2" or higher by Fitch Investors
Services, Inc. ("Fitch") or if unrated by Moody's, S&P, Duff or Fitch, is
determined by the Investment Manager, using guidelines approved by the Board of
Trustees, to be at least equal in quality to one or more of the above ratings.
OTHER INVESTMENT POLICIES
Securities that are acquired by the International Index Fund and the
Asset Director Funds outside the United States and that are publicly traded in
the United States, on a foreign securities exchange or in a foreign securities
market are not considered by the Funds to be illiquid assets provided that: (i)
the Funds acquire and hold the securities with the intention of reselling the
securities in the foreign trading market, (ii) the Funds reasonably believe they
can readily dispose of the securities in the foreign trading market or for cash
in the United States, or (iii) foreign market and current market quotations are
readily available. Investments may be in securities of foreign issuers, whether
located in developed or undeveloped countries. Investments in foreign securities
where delivery takes place outside the United States will have to be made in
compliance with any applicable U.S. and foreign currency restrictions and tax
laws (including laws imposing withholding taxes on any dividend or interest
income) and laws limiting the amount and types of foreign investments. Changes
of government administrations or of economic or monetary policies, in the United
States or abroad, or changed circumstances regarding convertibility or exchange
rates could result in investment losses for the Funds. Investments in foreign
securities may also subject the Funds
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to losses due to nationalization, expropriation or differing accounting
practices and treatments. Moreover, investors should recognize that foreign
securities are often traded with less frequency and volume, and therefore may
have greater price volatility, than is the case with many U.S. securities.
Notwithstanding the fact that the Funds generally intend to acquire the
securities of foreign issuers where there are public trading markets,
investments by the Funds in the securities of foreign issuers may tend to
increase the risks with respect to the liquidity of the Funds' portfolio and the
Funds' ability to meet a large number of shareholder redemption requests should
there be economic or political turmoil in a country in which the Funds have a
substantial portion of their assets invested or should relations between the
United States and foreign countries deteriorate markedly. Furthermore, the
reporting and disclosure requirements applicable to foreign issuers may differ
from those applicable to domestic issuers, and there may be difficulties in
obtaining or enforcing judgments against foreign issuers.
Loans of Portfolio Securities. The Funds may loan securities to
qualified broker-dealers or other institutional investors provided that such
loans do not exceed one-third of the value of the Funds' total assets at the
time of the most recent loan, and that the borrower deposits and maintains with
the Funds cash collateral or U.S. government securities with a value equal to
102% of the value of the securities loaned. The lending of securities is a
common practice in the securities industry. The Funds will engage in security
lending arrangements with the primary objective of increasing the Funds' income
through investment of the cash collateral in short-term, interest-bearing
obligations but will do so only to the extent that the Funds will not lose the
tax treatment available to regulated investment companies. The Funds will be
entitled to all dividends or interest on any loaned securities.
Repurchase Transactions. Repurchase agreements are instruments under
which a buyer acquires ownership of a security from a seller that agrees to
repurchase the security at a mutually agreed upon time and price (which price is
higher than the purchase price), thereby determining the yield during the
buyer's holding period. Under the 1940 Act, a repurchase agreement is deemed to
be the loan of money by a Fund to the seller, collateralized by the underlying
security. The interest rate is effective for the period of time in which the
Funds are invested in the agreement and is not related to the coupon rate on the
underlying security. Any repurchase agreements entered into by a Fund will
involve the Fund as the buyer and banks or broker-dealers as sellers (repurchase
agreements with broker-dealers will be limited to obligations of the U.S.
government, its agencies or instrumentalities). The period of these repurchase
agreements will usually be short, from overnight to one week, and at no time
will the Funds invest in repurchase agreements for more than one year. However,
securities subject to repurchase agreements may have maturity dates in excess of
one year from the effective date of the repurchase agreements. The transaction
requires the initial collateralization of the seller's obligation with
securities having a market value, including accrued interest, equal to at least
102% of the dollar amount invested by the Funds, with the value marked-to-market
daily to maintain 100% coverage. A default by the seller might cause the Funds
to experience a loss or delay in the liquidation of the collateral securing the
repurchase agreement. The Funds might also incur disposition costs in
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liquidating the collateral. The Funds will make payment for such securities only
upon physical delivery or evidence of book entry transfer to the account of its
custodian bank. The Funds may not enter into a repurchase agreement of more than
seven days duration if, as a result, the market value of the Funds' net assets,
together with investments in other securities deemed to be not readily
marketable, would be invested in excess of the Funds' policy on investments in
illiquid securities.
In the event of a bankruptcy or other default of a repurchase
agreement's seller, a Fund might incur expenses in enforcing its rights, and
could experience losses, including a decline in the value of the underlying
securities and loss of income. Each Fund will not invest more than 10% of its
net assets at the time of purchase in repurchase agreements maturing in more
than seven days and other illiquid securities.
Illiquid Securities. Each Fund reserves the right to invest up to 10%
of its net assets in illiquid securities. Generally an "illiquid security" is
any security that cannot be disposed of promptly and in the ordinary course of
business at approximately the amount at which the Funds have valued the
instrument. Subject to this limitation, the Funds may invest in restricted
securities where such investment is consistent with the Funds' investment
objectives, and such securities may be considered to be liquid to the extent the
Funds' Investment Manager determines that there is a liquid institutional or
other market for such securities. In determining whether a restricted security
is properly considered a liquid security, the Funds' Investment Manager, under
the direction of the Board of Trustees, will take into account the following
factors: (i) the frequency of trades and quotes for the security; (ii) the
number of dealers willing to purchase or sell the security and the number of
potential purchasers; (iii) dealer undertakings to make a market in the
security; and (iv) the nature of the security and the nature of the marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer). To the extent the Funds invest
in restricted securities that are deemed liquid, the general level of
illiquidity in the Funds' portfolios may be increased if qualified institutional
buyers become uninterested in purchasing these securities contracts. The Funds
will limit their investments in liquid restricted securities to 5% of their net
assets.
When-Issued and Delayed Delivery Securities. The Funds may hold
securities on a "when-issued" or "delayed delivery" basis. When-issued or
delayed delivery securities are securities purchased for future delivery at a
stated price an yield. Generally, a Fund will not pay for securities until the
Fund receives them. Securities purchased on a when-issued or delayed delivery
basis are recorded as assets. During the period between the agreement date and
the settlement date, the value of such securities may change as the prices of
securities in the stock market increase or decrease, or as interest rates
change. Default by the other party to the agreement may result in a loss to a
Fund.
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INVESTMENT RESTRICTIONS
Except as otherwise noted, the restrictions below are fundamental and
cannot be changed without approval of the holders of a majority of the
outstanding voting securities (as defined in the 1940 Act). With respect to the
Analytics Fund, investment restriction number 3,4,6 and 7 are non-fundamental
and may be changed by the Trust's Board of Trustees. Each of the Funds may not:
1) As to 75% of its assets, purchase securities of any issuer (other
than obligations of, or guaranteed by, the U.S. government, its agencies or
instrumentalities) if, as a result, more than 5% of the value of its total
assets would be invested in the securities of such issuer.
2) Purchase securities (other than securities issued or guaranteed
by the U.S. government, its agencies or instrumentalities) if, as a result of
such purchase, 25% or more of the value of its total assets would be invested in
any industry (except that the International Index Fund and the Small-Cap Index
Fund may purchase securities under such circumstances only to the extent that
the Schwab International Index(R) or the Schwab Small-Cap Index(TM),
respectively, is also so concentrated and that the S&P 500 Fund and the
Analytics Fund(TM) may purchase securities under such circumstances only to the
extent that the S&P 500(R) is also so concentrated).
3) Invest more than 10% of its net assets in illiquid securities,
including repurchase agreements with maturities in excess of seven days.
4) Purchase or retain securities of an issuer if any of the
officers, Trustees or directors of the Trust or the Investment Manager
individually own beneficially more than 1/2 of 1% of the securities of such
issuer and together beneficially own more than 5% of the securities of such
issuer.
5) Purchase or sell commodities, commodity contracts or real estate,
including interests in real estate limited partnerships, provided that each Fund
may (i) purchase securities of companies that deal in real estate or interests
therein, (ii) purchase or sell futures contracts, options contracts, equity
index participations and index participation contracts, and (iii) for the Asset
Director Funds, the S&P 500 Fund and the Analytics Fund, purchase securities of
companies that deal in precious metals or interests therein.
6) Invest for the purpose of exercising control or management of
another issuer.
7) Purchase securities of other investment companies, except as
permitted by the 1940 Act, including any exemptive relief granted by the SEC.
8) Lend money to any person, except that each Fund may (i) purchase
a portion of an issue of short-term debt securities or similar obligations
(including repurchase agreements) that are publicly distributed or customarily
purchased by institutional investors, and (ii) lend its portfolio securities.
9) Borrow money or issue senior securities except that each Fund may
borrow from banks as a temporary measure to satisfy redemption requests or for
extraordinary or emergency purposes and then
22
<PAGE> 23
only in an amount not to exceed one-third of the value of its total assets
(including the amount borrowed), provided that each Fund will not purchase
securities while borrowings represent more than 5% of its total assets.
10) Pledge, mortgage or hypothecate any of its assets except that, to
secure allowable borrowings, each Fund may do so with respect to no more than
one-third of the value of its total assets.
11) Underwrite securities issued by others except to the extent it may
be deemed to be an underwriter, under the federal securities laws, in connection
with the disposition of securities from its investment portfolio.
In order to permit the sale of shares of each Fund in certain
jurisdictions, each Fund may make commitments more restrictive than the
fundamental operating restrictions described above. Should it do so and later
determine that any such commitment is no longer in the best interests of the
Fund and its shareholders, it will revoke the commitment(s) by terminating sales
of its shares in the jurisdiction(s) involved.
The following restrictions are non-fundamental and may be changed by
the Trust's Board of Trustees. Each of the Funds may not:
1) Purchase more than 10% of any class of securities of any issuer if,
as a result of such purchase, it would own more than 10% of such issuer's
outstanding voting securities.
2) Invest more than 5% of its total assets in securities of issuers
(other than obligations of, or guaranteed by the U.S. government, its agencies
or instrumentalities) that with their predecessors have a record of less than
three years continuous operation.
3) Invest more than 5% of its net assets in warrants, valued at the
lower of cost or market, and no more than 40% of this 5% may be invested in
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange, provided, however, that for purposes of this restriction,
warrants acquired by a Fund in units or attached to other securities are deemed
to be without value.
4) Purchase puts, calls, straddles, spreads or any combination thereof
if by reason of such purchase the value of its aggregate investment in such
securities would exceed 5% of the Fund's net assets.
5) Make short sales, except for short sales against the box.
6) Purchase or sell interests in oil, gas or other mineral development
programs or leases, although it may invest in companies that own or invest in
such interests or leases.
7) Purchase securities on margin, except such short-term credits as may
be necessary for the clearance of purchases and sales of securities.
23
<PAGE> 24
MANAGEMENT OF THE TRUST
OFFICERS AND TRUSTEES. The officers and Trustees of the Trust, their
principal occupations over the past five years and their affiliations, if any,
with The Charles Schwab Corporation, Schwab and the Investment Manager, are as
follows:
<TABLE>
<CAPTION>
POSITION WITH
NAME/DATE OF BIRTH THE TRUST PRINCIPAL OCCUPATION
- ------------------ --------- --------------------
<S> <C> <C>
CHARLES R. SCHWAB* Chairman and Trustee Chairman, Chief Executive Officer and Director,
July 29, 1937 The Charles Schwab Corporation; Chairman and
Director, Charles Schwab & Co., Inc. and
Charles Schwab Investment Management, Inc.;
Chairman and Director, The Charles Schwab
Trust Company; Chairman and Director (current
board positions), and Chairman (officer
position) until December 1995, Mayer &
Schweitzer, Inc. (a securities brokerage
subsidiary of The Charles Schwab
Corporation); Director, The Gap, Inc. (a
clothing retailer), Transamerica Corporation
(a financial services organization), AirTouch
Communications (a telecommunications company)
and Siebel Systems (a software company).
TIMOTHY F. McCARTHY** President and Trustee Executive Vice President - Mutual Funds, Charles
September 19, 1951 Schwab & Co., Inc. and The Charles Schwab
Corporation; Chief Executive Officer, Charles
Schwab Investment Management, Inc. From 1994
to 1995, Mr. McCarthy was Chief Executive
Officer, Jardine Fleming Unit Trusts Ltd.;
Executive Director, Jardine Fleming Holdings
Ltd.; Chairman, Jardine Fleming Taiwan
Securities Ltd.; and Director of JF India and
Fleming Flagship, Europe. Prior to 1994, he
was President of Fidelity Investments Advisor
Group, a division of Fidelity Investments in
Boston.
DONALD F. DORWARD Trustee President and Chief Executive Officer, Dorward &
September 23, 1931 Associates (advertising and marketing/consulting).
</TABLE>
- --------
* Mr. Schwab is an "interested person" of the Trust.
** Mr. McCarthy is an "interested person" of the Trust.
24
<PAGE> 25
<TABLE>
<CAPTION>
POSITION WITH
NAME/DATE OF BIRTH THE TRUST PRINCIPAL OCCUPATION
- ------------------ --------- --------------------
<S> <C> <C>
ROBERT G. HOLMES Trustee Chairman, Chief Executive Officer and Director,
May 15, 1931 Semloh Financial, Inc. (international financial
services); and International Investment
Consultant, Cannon Street, Inc. (private
investigative firm).
DONALD R. STEPHENS Trustee Managing Partner, D.R. Stephens & Co. (real
June 28, 1938 estate investment). Prior to 1993, Mr. Stephens
was Chairman and Chief Executive Officer of the
Bank of San Francisco.
MICHAEL W. WILSEY Trustee Chairman, Chief Executive Officer and Director,
August 18, 1943 Wilsey Bennett, Inc. (truck and air transportation,
real estate investment and management, and
investments).
A. JOHN GAMBS Treasurer and Principal Executive Vice President - Finance and Chief
November 16, 1945 Financial Officer Financial Officer, The Charles Schwab
Corporation; Executive Vice President, Chief
Financial Officer and Director, Charles Schwab &
Co., Inc.; Chief Financial Officer and Director,
Charles Schwab Investment Management, Inc.;
and Chief Financial Officer, The Charles Schwab
Trust Company.
WILLIAM J. KLIPP* Senior Vice President, Senior Vice President, Charles Schwab & Co., Inc.;
December 9, 1955 Chief Operating Officer President and Chief Operating Officer, Charles
and Trustee Schwab Investment Management, Inc. Prior to
1993, Mr. Klipp was Treasurer of Charles Schwab
& Co., Inc. and Mayer & Schweitzer, Inc.
STEPHEN B. WARD Senior Vice President Senior Vice President and Chief Investment
April 5, 1955 and Chief Investment Officer, Charles Schwab Investment Management,
Officer Inc.
FRANCES COLE Secretary Vice President, Chief Counsel, Chief Compliance
September 9, 1955 Officer and Assistant Corporate Secretary, Charles
Schwab Investment Management, Inc.
</TABLE>
- ----------
* Mr. Klipp is an "interested person" of the Trust.
25
<PAGE> 26
<TABLE>
<CAPTION>
POSITION WITH
NAME/DATE OF BIRTH THE TRUST PRINCIPAL OCCUPATION
- ------------------ --------- --------------------
<S> <C> <C>
DAVID H. LUI Assistant Secretary Vice President and Senior Counsel - Charles
October 14, 1960 Schwab Investment Management, Inc. From 1991
to 1992, he was Assistant Secretary and Assistant
Corporate Counsel for the Franklin Group of
Mutual Funds.
CHRISTINA M. PERRINO Assistant Secretary Vice President and Senior Counsel - Charles
June 16, 1961 Schwab Investment Management, Inc. Prior to
1994, she was Counsel and Assistant Secretary for
North American Security Life Insurance Company
and Secretary for North American Funds.
</TABLE>
Each of the above-referenced Officers and/or Trustees also serves in
the same capacity as described for the Trust and for Schwab Investments, The
Charles Schwab Family of Funds and Schwab Annuity Portfolios. The address of
each individual listed above is 101 Montgomery Street, San Francisco, California
94104.
26
<PAGE> 27
COMPENSATION TABLE 1
<TABLE>
<CAPTION>
Pension or
Retirement Estimated
Benefits Accrued Annual Benefits
as Part of Fund Upon Total
Aggregate Expenses from Retirement from Compensation
Name of Person, Compensation the Fund the Fund from the Fund
Position from the Trust Complex 2 Complex 2 Complex 2
- -------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Charles R. Schwab, 0 N/A N/A 0
Chairman and Trustee
Elizabeth G. Sawi 3, 0 N/A N/A 0
President and Trustee
Timothy F. McCarthy 4, 0 N/A N/A 0
President and Trustee
William J. Klipp, 0 N/A N/A 0
Sr. Vice President,
Chief Operating
Officer and Trustee
Donald F. Dorward, 16,600 N/A N/A 73,000
Trustee
Robert G. Holmes, 16,600 N/A N/A 73,000
Trustee
Donald R. Stephens, 16,600 N/A N/A 73,000
Trustee
Michael W. Wilsey, 16,600 N/A N/A 73,000
Trustee
</TABLE>
1 Figures are for the Trust's fiscal year ended October 31, 1995.
2 "Fund Complex" comprises all 24 funds of the Trust, The Charles Schwab
Family of Funds, Schwab Investments and Schwab Annuity Portfolios.
3 Ms. Sawi served as President and Trustee until October 1995.
4 Mr. McCarthy became President and Trustee in October 1995.
--------------------------------------------------------
27
<PAGE> 28
Pursuant to exemptive relief received by the Trust from the SEC, the
Trust may enter into deferred fee arrangements (the "Fee Deferral Plan" or the
"Plan") with the Trust's Trustees who are not "interested persons" of any of the
Funds of the Trust (the "Independent Trustees" or the "Trustees").
As of the date of this Statement of Additional Information, none of the
Independent Trustees has elected to participate in the Fee Deferral Plan. In the
event an Independent Trustee does elect to participate in the Plan, the Plan
would operate as described below.
Under the Plan, deferred Trustee's fees will be credited to a book
reserve account established by the Trust (the "Deferred Fee Account"), as of the
date such fees would have been paid to such Trustee. The value of the Deferred
Fee Account as of any date will be equal to the value the Account would have had
as of that date if the amounts credited to the Account had been invested and
reinvested in the securities of the SchwabFund(R) or SchwabFunds selected by the
participating Trustee (the "Selected SchwabFund Securities"). SchwabFunds
include the series or classes of beneficial interest of the Trust, The Charles
Schwab Family of Funds, and Schwab Investments.
Pursuant to the exemptive relief granted to the Trust, each Fund will
purchase and maintain the Selected SchwabFund Securities in an amount equal to
the deemed investments in that Fund of the Deferred Fee Accounts of the
Independent Trustees. The exemptive relief granted to the Trust permits the
Funds and the Trustees to purchase the Selected SchwabFund Securities, which
transactions would otherwise be limited or prohibited by the investment policies
and/or restrictions of the Funds. See "Investment Restrictions."
INVESTMENT MANAGER
The Investment Manager, a wholly owned subsidiary of The Charles Schwab
Corporation, serves as the Funds' investment adviser and administrator pursuant
to an Investment Advisory and Administration Agreement (the "Advisory
Agreement") between it and the Trust. The Investment Manager is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended, and
currently provides investment management services to the SchwabFunds Family(R),
a family of 23 mutual funds with over $35 billion in assets as of April 30,
1996. The Investment Manager is an affiliate of Schwab, the Trust's distributor
and shareholder services and transfer agent. The Advisory Agreement will
continue in effect until May 30, 1997 with respect to each of the Funds and
thereafter will continue for one year terms subject to annual approval by: (1)
the Trust's Board of Trustees or (2) a vote of a majority (as defined in the
1940 Act) of the outstanding voting securities of a Fund. In either event, the
continuance must also be approved by a majority of the Trust's Board of Trustees
who are not parties to the Agreement or interested persons (as defined in the
1940 Act) of any such party by vote cast in person at a meeting called for the
purpose of voting on such approval. The Advisory Agreement may be terminated at
any time upon 60 days' notice by either party, or by a majority vote of the
outstanding shares of a Fund, and will terminate automatically upon assignment.
International Index Fund. For its advisory and administrative services
to the International Index Fund, the Investment Manager is entitled to receive a
graduated annual
28
<PAGE> 29
fee, payable monthly, of 0.70% of the Fund's average daily net
assets not in excess of $300 million and 0.60% of such assets over $300 million.
The Investment Manager and Schwab have guaranteed that, through at
least February 28, 1997, the total fund operating expenses for the International
Index Fund will not exceed 0.69% of that Fund's average daily net assets.
For the fiscal years ended October 31, 1995 and 1994 and for the fiscal
period from September 9, 1993 (commencement of operations) to October 31, 1993,
the International Index Fund paid investment advisory fees of $665,000,
$474,000, and $0, respectively (fees were reduced by $415,000, $388,000, and
$98,000, respectively).
Small-Cap Index Fund. For its advisory and administrative services to
the Small-Cap Index Fund, the Investment Manager is entitled to receive a
graduated annual fee, payable monthly, of 0.50% of the Fund's average daily net
assets not in excess of $300 million and 0.45% of such assets over $300 million.
The Investment Manager and Schwab have guaranteed that, through
February 28, 1997, the total fund operating expenses for the Small-Cap Index
Fund will not exceed 0.59% of that Fund's average daily net assets.
For the fiscal year ended October 31, 1995 and for the fiscal period
from December 3, 1993 (commencement of operations) to October 31, 1994, the
Small-Cap Index Fund paid investment advisory fees of $332,000 and $152,000,
respectively (fees were reduced by $115,000 and $107,000, respectively).
Asset Director Funds. For its advisory and administrative services to
the Asset Director Funds, the Investment Manager is entitled to receive a
graduated annual fee, payable monthly, of 0.74% of each Fund's average daily net
assets not in excess of $1 billion, 0.69% of the next $1 billion and 0.64% of
such net assets over $2 billion.
The Investment Manager and Schwab have guaranteed that, through at
least February 28, 1997, the total fund operating expenses for each Asset
Director Fund will not exceed 0.89% of the Fund's average daily net assets.
S&P 500 Fund. For its advisory and administrative services to the S&P
500 Fund, the Investment Manager is entitled to receive a graduated annual fee,
payable monthly, of 0.36% of the Fund's average daily net assets not in excess
of $1 billion, 0.33% of the next $1 billion and 0.31% of such net assets over $2
billion.
The Investment Manager and Schwab have guaranteed that, through at
least February 28, 1997, the total operating expenses allocable to the Investor
Shares and the e.Shares(TM) will not exceed 0.49% and 0.28%, respectively, of
the average daily net assets of that class of shares.
Analytics Fund. For its advisory and administrative services to the
Analytics Fund, the Investment Manager is entitled to receive a graduated annual
fee, payable monthly, of 0.74% of the Fund's average daily net assets not in
excess of $1 billion, 0.69% of the next $1 billion and 0.64% of such net assets
over $2 billion.
The Investment Manager and Schwab have guaranteed that, through at
least July 1, 1997, the total fund operating expenses for each the Schwab
Analytics Fund will not exceed 0.75% of the Fund's average daily net assets.
29
<PAGE> 30
Additional Information. The Advisory Agreement provides that the fees
to be paid to the Investment Manager will be less than the amount that would
cause the aggregate operating expenses of a Fund (excluding interest, taxes, net
brokerage commissions and extraordinary expenses) in any year to exceed the most
stringent limits prescribed by any state in which shares of a Fund are offered
for sale. The most stringent current limit for such expenses is 2.5% of a fund's
first $30 million of average net assets, 2.0% of a fund's next $70 million of
average net assets and 1.5% of a fund's average net assets in excess of $100
million.
From time to time, each Fund may compare its total operating expense
ratio to the total operating expense ratio of other mutual funds or mutual fund
averages with similar investment objectives as reported by Lipper Analytical
Service, Inc., Morningstar, Inc. or other independent sources of such
information ("independent sources").
SUB-ADVISER
The Investment Manager has entered into an investment sub-advisory
agreement (the "Sub-Advisory Agreement") with respect to the Asset Director
Funds and the Analytics Fund with Symphony Asset Management, Inc. (the
"Sub-Adviser"), pursuant to which it will act as the Funds' sub-adviser. The
Sub-Adviser is registered as an investment adviser under the Investment Advisers
Act of 1940 and currently manages directly and indirectly approximately $700
million in institutional and private account assets.
For the Asset Director Funds, the Sub-Adviser furnishes investment
advice through direct assistance to the Investment Manager in the development
and execution of quantitatively based investment strategies. The Sub-Adviser
uses a sophisticated optimization technique known as "Tactical Asset Allocation"
in evaluating the optimal allocation of the Asset Director Funds' assets among
asset categories: stocks, bonds and cash.
Tactical Asset Allocation is a value-oriented strategy which seeks the
highest reward for a given level of risk. Expected returns are measured for each
asset category; for stocks, the internal rate of return is measured on
forecasted dividend stream; for bonds, the yield to maturity is evaluated on
representative long corporate bonds; and for cash-equivalents, yield to maturity
is evaluated on representative money market instruments. Risks and correlations
of the asset categories are measured from long-term return histories.
For the Analytics Fund, the Sub-Adviser will make investment decisions
for the Fund's non-cash investments. The Sub-Adviser will use quantitative
techniques and proprietary real-time databases and software models to
continually identify and rank stocks that exhibit a favorable combination of
attributes that historically have been associated with aggregate total returns
greater than that of the S&P 500(R). Once rankings are determined, statistical
methodologies will be used to construct a portfolio of the most attractive
stocks in terms of potential long-term capital growth.
For the Sub-Adviser's services relating to the Asset Director Funds,
the Investment Manager pays the Sub-Adviser an annual investment sub-advisory
fee, payable monthly, of 0.08% of the first $100 million of the Funds' aggregate
average daily net assets, 0.06% of the next $150 million, 0.04% of the next $600
million and 0.02% of the Funds' aggregate average daily net assets over $850
million. For
30
<PAGE> 31
the Analytics Fund, the Investment Manager pays the Sub-Adviser an
annual investment sub-advisory fee, payable monthly, 0.20% of the Fund's average
daily net assets not in excess of $300 million, 0.15% of the next $500 million
and 0.10% of such assets over $800 million.
As of May 1, 1995 and June 30, 1995, Dimensional Fund Advisors Inc.
("Dimensional") no longer served as the sub-adviser to the Schwab Small-Cap
Index Fund and the Schwab International Index Fund, respectively. As of the same
dates, the Investment Manager became responsible for providing all investment
advisory services to the Funds.
Expenses. Under the Sub-Advisory Agreement between Dimensional and the
Investment Manager, the Investment Manager paid Dimensional the following
amounts for the fiscal periods indicated below.
International Index Fund: for the fiscal years ended October 31, 1995
and 1994 and for the fiscal period from September 9, 1993 (commencement of
operations) to October 31, 1993, $143,000, $185,000, and $21,000 respectively.
Small-Cap Index Fund: for the fiscal year ended October 31, 1995 and
for the fiscal period from December 3, 1993 (commencement of operations) to
October 31, 1994, $36,000 and $51,000, respectively.
DISTRIBUTOR
Pursuant to a Distribution Agreement, Schwab is the principal
underwriter for shares of the Trust and is the Trust's agent for the purpose of
the continuous offering of the Funds' shares. Each Fund pays the cost for the
prospectuses and shareholder reports to be prepared and delivered to existing
shareholders. Schwab pays such costs when the described materials are used in
connection with the offering of shares to prospective investors and for
supplementary sales literature and advertising. Schwab receives no fee under the
Distribution Agreement. Terms of continuation, termination and assignment under
the Distribution Agreement are identical to those described above with respect
to the Advisory Agreement.
CUSTODIAN AND FUND ACCOUNTANT
State Street Bank and Trust Company, at 1 Heritage Drive, North Quincy,
Massachusetts 02171-2197, serves as Custodian and as Fund Accountant for the
International Index Fund, the Small-Cap Index Fund and the Asset Director Funds.
PNC Bank, National Association, at the Airport Business Center, 200
Stevens Drive, Suite 440, Lester, Pennsylvania 19113, serves as Custodian for
the S&P 500 Fund and the Analytics Fund. PFPC Inc., at 400 Bellevue Parkway,
Wilmington, Delaware 19809, serves as Fund Accountant for the S&P 500 Fund and
the Analytics Fund.
31
<PAGE> 32
ACCOUNTANTS
AND REPORTS TO SHAREHOLDERS
The Trust's independent accountants, Price Waterhouse LLP, audit and
report on the annual financial statements of each series of the Trust and review
certain regulatory reports and each Fund's federal income tax return. Price
Waterhouse LLP also performs other professional accounting, auditing, tax and
advisory services when engaged to do so by the Trust. Shareholders will be sent
audited annual and unaudited semi-annual financial statements. The address of
Price Waterhouse LLP is 555 California Street, San Francisco, California 94104.
LEGAL COUNSEL
Ropes & Gray, One Franklin Square, 1301 K Street, N.W., Suite 800 East,
Washington, D.C. 20005, is counsel to the Trust.
PORTFOLIO TRANSACTIONS AND TURNOVER
PORTFOLIO TRANSACTIONS
In effecting securities transactions for the Funds, the Investment
Manager and the Sub-Adviser seek to obtain best price and execution. Subject to
the supervision of the Board of Trustees, the Investment Manager and the
Sub-Adviser will generally select brokers and dealers for the Funds primarily on
the basis of the quality and reliability of brokerage services, including
execution capability and financial responsibility. In assessing these criteria,
the Investment Manager and the Sub-Adviser will, among other things, monitor the
performance of brokers effecting transactions for the Funds to determine the
effect, if any, the Funds' transactions through those brokers have on the market
prices of the stocks involved. This may be of particular importance for the
Funds' investments in relatively smaller companies whose stocks are not as
actively traded as those of their larger counterparts. The Funds will seek to
buy and sell securities in a manner that causes the least possible fluctuation
in the prices of those stocks in view of the size of the transactions.
In an attempt to obtain best execution for the Funds, the Investment
Manager and the Sub-Adviser may also place orders directly with market makers or
with third market brokers, Instinet or brokers on an agency basis. Placing
orders with third market brokers or through Instinet may enable the Funds to
trade directly with other institutional holders on a net basis. At times, this
may allow the Funds to trade larger blocks than would be possible trading
through a single market maker.
When the execution and price offered by two or more broker-dealers are
comparable, the Investment Manager and the Sub-Adviser may, in its discretion,
in agency transactions (and not principal transactions) utilize the services of
broker- dealers that provide it with investment information and other research
resources. Such resources may also be used by the Investment Manager and the
Sub-Adviser when providing advisory services to other investment advisory
clients, including mutual funds.
In determining when and to what extent to use Schwab or any other
affiliated broker-dealer as its broker for executing orders for the Funds on
securities exchanges, the Investment Manager and the Sub-Adviser will consider
(if relevant) whether the compensation to be paid
32
<PAGE> 33
Schwab or any other affiliated broker-dealer will be (i) fair and reasonable,
(ii) at least as favorable to the Funds as commissions that would be charged by
other qualified brokers having comparable execution capabilities, and (iii) at
least as favorable as commissions contemporaneously charged by Schwab or any
other affiliated broker-dealer on comparable transactions for its most favored
unaffiliated customers. The Funds do not consider it practicable or in the best
interests of their shareholders to solicit competitive bids for commission rates
on each transaction. However, the Board of Trustees, including a majority of the
Trustees who are not "interested persons" of Schwab or any other affiliated
broker-dealer within the meaning of the 1940 Act, (i) has prescribed procedures
designed to provide that the Funds do not pay commissions that do not meet the
standards described above, (ii) reviews those procedures annually to determine
whether they remain adequate, and (iii) considers quarterly whether or not the
commissions charged by Schwab or any other affiliated broker-dealer have met the
standards.
Brokerage services provided by Schwab to the Funds are also subject to
Rule 11a2-2(T) under the Securities Exchange Act of 1934, as amended. Rule
11a2-2(T) permits the Funds to use Schwab as a broker provided certain
conditions are met. Among these requirements are that the floor brokerage
element of portfolio transactions (that is, execution on the exchange floor or
through use of exchange facilities) be performed by members of the exchange not
associated with Schwab, that the orders to such members be transmitted from off
the exchange floor and that neither Schwab nor an associated person of Schwab
participates in the execution of the transaction after the order has been so
transmitted. In connection with transactions in which Schwab acts as broker for
the Funds, Schwab, while not permitted to perform floor brokerage (which is
undertaken by members selected by Schwab who are not associated with that firm),
still continues to bear principal responsibility for determining important
elements of overall execution such as timing and order size, and also clears and
settles such transactions. Schwab pays the fees charged by those persons
performing the described floor brokerage elements. Schwab will not trade
directly with the Funds in any transactions in which Schwab or an affiliate acts
as principal.
Brokerage Commissions. For the fiscal years ended October 31, 1995 and
1994 and for the fiscal period from September 9, 1993 (commencement of
operations) to October 31, 1993, the International Index Fund paid brokerage
commissions of $54,718, $86,127, $170,195, respectively. For the fiscal year
ended October 31, 1995 and for the fiscal period from December 3, 1993
(commencement of operations) to October 31, 1994, the Small-Cap Index Fund paid
brokerage commissions of $142,785 and $165,997, respectively.
PORTFOLIO TURNOVER
For reporting purposes, each Fund's turnover rate is calculated by
dividing the value of purchases or sales of portfolio securities for the fiscal
year, whichever is less, by the monthly average value of portfolio securities
owned by the Fund during the fiscal year. When making the calculation, all
securities whose maturities at the time of acquisition were one year or less
("short-term securities") are excluded.
A 100% portfolio turnover rate would occur, for example, if all
portfolio securities (aside from short-term securities) were sold and either
repurchased or replaced once during the fiscal year. The Funds expect that their
portfolio turnover rate will not exceed 100% in any given
33
<PAGE> 34
year, a turnover rate lower than that of most non-index mutual funds. In the
case of the Asset Director Funds, this 100% portfolio turnover rate applies to
the Funds' stock and bond categories separately. The International Index Fund's
portfolio turnover rate for the fiscal years ended October 31, 1995 and 1994 was
0% and 6%, respectively. The Small-Cap Index Fund's portfolio turnover rate for
the fiscal year ended October 31, 1995 and for the fiscal period from December
3, 1993 (commencement of operations) to October 31, 1994 was 24% and 16%,
respectively.
From time to time, each Fund may compare its portfolio turnover rate
with that of other mutual funds as reported by independent sources.
TAXES
It is the policy of each Fund to qualify for taxation as a "regulated
investment company" by meeting the requirements of Subchapter M of the Code. By
following this policy, each Fund expects to eliminate or reduce to a nominal
amount the federal income tax to which it is subject.
In order to qualify as a regulated investment company, each of the
Funds must, among other things, (1) derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans and gains from
the sale or other disposition of stocks, securities, foreign currencies or other
income (including gains from options, futures or forward contracts) derived with
respect to its business of investing in stocks, securities or currencies; (2)
derive less than 30% of its gross income from gains from the sale or other
disposition of certain assets (including stocks and securities) held for less
than three months; and (3) diversify its holdings so that at the end of each
quarter of its taxable year (i) at least 50% of the market value of the Fund's
total assets is represented by cash or cash items, U.S. government securities,
securities of other regulated investment companies and other securities limited,
in respect of any one issuer, to a value not greater than 5% of the value of the
Fund's total assets and 10% of the outstanding voting securities of such issuer,
and (ii) not more than 25% of the value of its assets is invested in the
securities of any one issuer (other than U.S. government securities or
securities of any other regulated investment company) or of two or more issuers
that the Fund controls, within the meaning of the Code, and that are engaged in
the same, similar or related trades or businesses. These requirements may
restrict the degree to which a Fund may engage in short-term trading and certain
hedging transactions and may limit the range of a Fund's investments. If a Fund
qualifies as a regulated investment company, it will not be subject to federal
income tax on the part of its net investment income and net realized capital
gains, if any, which it distributes to shareholders, provided that the Fund
meets certain minimum distribution requirements. To comply with these
requirements, a Fund must distribute at least (a) 90% of its "investment company
taxable income" (as that term is defined in the Code) and (b) 90% of the excess
of its (i) tax-exempt interest income over (ii) certain deductions attributable
to that income (with certain exceptions), for its taxable year. Each Fund
intends to make sufficient
34
<PAGE> 35
distributions to shareholders to meet these requirements.
The Code imposes a non-deductible excise tax on regulated investment
companies that do not distribute in a calendar year (regardless of whether they
otherwise have a non-calendar taxable year) an amount equal to 98% of their
"ordinary income" (as defined in the Code) for the calendar year plus 98% of
their capital gain net income for the one year period ending on October 31 of
such calendar year. The balance of such income must be distributed during the
next calendar year. For the foregoing purposes, a Fund is treated as having
distributed any amount on which it is subject to income tax for any taxable year
ending in such calendar year. If the distributions during a calendar year were
less than the required amount, the Fund is subject to a non-deductible excise
tax equal to 4% of the deficiency.
A Fund's transactions in futures contracts, forward contracts, foreign
currency transactions, options, and certain other investment and hedging
activities are subject to special tax rules. In a given case, these rules may
accelerate income to a Fund, defer its losses, cause adjustments in the holding
periods of the Fund's assets, convert short-term capital losses into long-term
capital losses or otherwise affect the character of the Fund's income. These
rules could therefore affect the amount, timing and character of distributions
to shareholders. The Funds will endeavor to make any available elections
pertaining to these transactions in a manner believed to be in the best interest
of the Funds and their shareholders.
INCOME TAX INFORMATION
Any dividends declared by the Funds in October, November or December to
shareholders of record during those months and paid during the following January
are treated, for tax purposes, as if they were received by each shareholder on
December 31 of the year in which they were declared.
Dividends paid by the Funds from net investment income and
distributions from the Funds' net short-term capital gains in excess of any net
long-term capital losses, whether received in cash or reinvested, generally will
be taxable to shareholders as ordinary income. For corporate investors in the
Funds, dividend distributions designated by the Funds to be from dividends
received from qualifying domestic corporations will be eligible for the 70%
corporate dividends-received deduction to the extent they would qualify if the
Funds were regular corporations. Distributions received from the Funds
designated as long-term capital gains (net of capital losses), whether received
in cash or reinvested, will be taxable as long-term capital gains without regard
to the length of time a shareholder owned shares in the Funds. However, if a
shareholder receives a long-term capital gain distribution with respect to
Funds' shares held for six months or less, any loss on the sale or exchange of
those shares shall, to the extent of the long-term capital gain distribution, be
treated as a long-term capital loss. If a shareholder is not subject to income
tax, generally the shareholder will not be taxed on amounts distributed by the
Funds.
A Fund will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable dividends paid to any shareholder (1) who
fails to provide a correct taxpayer identification number certified under
penalty of perjury; (2) who is subject to withholding by the Internal Revenue
Service for failure to properly report all payments of interest or dividends; or
(3) who fails to provide a certified statement that he or she is not subject to
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"backup withholding." This "backup withholding" is not an additional tax and any
amounts withheld may be credited against the shareholder's ultimate U.S. tax
liability.
The foregoing discussion relates only to federal income tax law as
applicable to U.S. citizens or residents. Foreign shareholders (i.e.,
nonresident alien individuals and foreign corporations, partnerships, trusts and
estates) generally are subject to U.S. withholding tax at the rate of 30% (or a
lower tax treaty rate) on distributions derived from net investment income and
short-term capital gains. Distributions to foreign shareholders of long-term
capital gains and any gains from the sale or other disposition of shares of the
Funds generally are not subject to U.S. taxation, unless the recipient is an
individual who meets the Code's definition of "resident alien." Different tax
consequences may result if the foreign shareholder is engaged in a trade or
business within the United States. In addition, the tax consequences to a
foreign shareholder entitled to claim the benefits of a tax treaty may be
different than those described above. Distributions by a Fund may also be
subject to state, local and foreign taxes, and its treatment under applicable
tax laws may differ from the federal income tax treatment.
Although the International Index Fund and the Asset Director Funds will
attempt not to invest in any non-U.S. corporation which could be treated as a
passive foreign investment company ("PFIC"), or become a PFIC, under the Code,
it may inadvertently do so. This could result in adverse tax consequences upon
the disposition of, or the receipt of "excess distributions" with respect to,
such equity investments. To the extent the International Index Fund and the
Asset Director Funds do invest in PFICs, they may adopt certain tax strategies
to reduce or eliminate the adverse effects of certain federal tax provisions
governing PFIC investments. Many non-U.S. banks and insurance companies may not
be treated as PFICs if they satisfy certain technical requirements under the
Code. To the extent that the International Index Fund and the Asset Director
Funds do invest in foreign securities which are determined to be PFIC securities
and are required to pay a tax on such investments, a credit for this tax would
not be allowed to be passed through to the International Index Fund's and the
Asset Director Funds' shareholders. Therefore, the payment of this tax would
reduce the International Index Fund's and the Asset Director Funds' economic
return from their PFIC shares and excess distributions received with respect to
such shares are treated as ordinary income rather than capital gains.
This discussion of federal income taxation presented above only
summarizes some of the important federal tax considerations generally affecting
purchasers of Fund shares. No attempt has been made to present a detailed
explanation of the federal income tax treatment of a Fund and its shareholders,
and the discussion is not intended as a substitute for careful tax planning.
Accordingly, prospective investors (particularly those not residing or domiciled
in the United States) should consult their own tax advisers regarding the
consequences of investing in a Fund.
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<PAGE> 37
SHARE PRICE CALCULATION
Each Fund's net asset value per share is determined each day the New
York Stock Exchange is open for trading as of 4:00 p.m., Eastern time. The net
asset value of the International Index Fund is expressed in U.S. dollars by
translating the Fund's assets using the bid price for the U.S. dollar as quoted
by generally recognized, reliable sources. Currently, the New York Stock
Exchange is closed on the following holidays: New Year's Day (observed),
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The Funds value their portfolio securities
daily based on their market value. Each security held by the Funds that is
listed on a securities exchange and for which market quotations are available is
valued at the last quoted sale price for a given day, or if a sale is not
reported for that day, at the mean between the most recent quoted bid and asked
prices. Price information on each listed security is taken from the exchange
where the security is primarily traded. Unlisted securities for which market
quotations are readily available are valued at the mean between the most recent
bid and asked prices. The value of other assets for which no quotations are
readily available (including any restricted securities) are valued at fair value
as determined in good faith by the Investment Manager pursuant to Board of
Trustees guidelines. Securities may be valued on the basis of prices provided by
pricing services when such prices are believed to reflect fair market value.
HOW THE FUNDS REFLECT PERFORMANCE
STANDARDIZED TOTAL RETURN
Average annual total return for a period is determined by calculating
the actual dollar amount of investment return on a $1,000 investment in the Fund
made at the beginning of the period, then calculating the average annual
compounded rate of return that would produce the same investment return on the
$1,000 over the same period. In computing average annual total return, the Fund
assumes the reinvestment of all distributions at net asset value on applicable
reinvestment dates. For the fiscal year ended October 31, 1995 and for the
fiscal period from September 9, 1993 (commencement of operations) to October 31,
1995, the International Index Fund's average annual total return was 3.35% and
5.95%, respectively. For the fiscal year ended October 31, 1995 and for the
fiscal period from December 3, 1993 (commencement of operations) to October 31,
1995, the Small-Cap Index Fund's total return was 17.11% and 8.97%,
respectively.
NONSTANDARDIZED TOTAL RETURN
Nonstandardized total return for a Fund differs from standardized total
return in that it relates to periods other than the period for standardized
total return and/or that it represents aggregate (rather than average) total
return.
In addition, an after-tax total return for each Fund may be calculated
by taking that Fund's standardized or non- standardized total return and
subtracting applicable federal taxes from the portions of each Fund's total
return attributable to capital gains distributions and ordinary income. This
after-tax total return may be compared to that of other mutual funds with
similar investment objectives as reported by independent sources.
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<PAGE> 38
Each Fund may also report the percentage of that Fund's standardized or
non-standardized total return which would be paid to taxes annually (at the
applicable federal personal income and capital gains tax rates) before
redemption of Fund shares. This proportion may be compared to that of other
mutual funds with similar investment objectives as reported by independent
sources.
YIELD
A Fund's yield refers to the net investment income generated by a
hypothetical investment in the Fund over a specific thirty day period. This net
investment income is then annualized, which means that the net investment income
generated during the 30-day period is assumed to be generated in each 30-day
period over an annual period, and is shown as a percentage of the investment.
EFFECTIVE YIELD
A Fund's effective yield is calculated similarly, but the net
investment income earned by the investment is assumed to be compounded monthly
when annualized. The effective yield will be slightly higher than the yield due
to this compounding effect.
COMPARING THE PERFORMANCE OF THE
FUNDS WITH OTHER FUNDS AND INDICES
The performance of the Funds may be compared with the performance of
other mutual funds by comparing the ratings of mutual fund rating services,
various indices of investment performance, United States government obligations,
bank certificates of deposit, the consumer price index, and other investments
for which reliable data is available.
The Asset Director Funds may also compare their historical performance
figures to the performance of indices similar to their asset categories and
sub-categories, such as those indices names in the Funds' Prospectus under
"Market Performance."
THE BENEFITS OF INTERNATIONAL INVESTING
INCREASED DIVERSIFICATION
CAN LOWER RISK
To some extent, all U.S.-based investments--stocks, bonds, mutual
funds and CDs--are affected by the same economic forces. Tax cuts, interest
rate changes and the performance of the U.S. stock market can all influence U.S.
investments. Adding international (or overseas) investments to a U.S.-based
portfolio has historically reduced the portfolio's overall volatility. Although
U.S. and international markets may be interrelated, they do not move in tandem
- --so losses in one market can be offset by gains in another.
POTENTIALLY HIGHER
OVERALL PERFORMANCE
During the past 10 years ending December 31, 1994, international equity
markets outperformed the U.S. equity market and most other U.S. securities
investments--corporate bonds, CDs and U.S. Treasuries. The returns produced by
the international markets have also kept investors well ahead of inflation. This
historical performance means that investors diversified overseas earned a higher
level of return.
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<PAGE> 39
BROADER GROWTH OPPORTUNITIES
Investors who limit their portfolios to U.S. securities are missing
these investment opportunities. Ten years ago, the United States made up more
than half of the world's equity investments. As of December 31, 1993, it
represented just over one-third.
INDEXING AND THE SCHWAB INDEX FUNDS
Because the unmanaged performance of a broad-based equity index has
often proven superior to that of many individually selected stock portfolios, a
growing percentage of assets invested in the equity markets are being placed in
"index" portfolios. Institutional investors often devote a substantial
percentage of their assets to indexed strategies.
An index typically tracks the performance of a group of securities
selected to represent a particular market, and is most often used to gauge that
market's performance. The Dow Jones Industrial Average ("DJIA") and Standard &
Poor's 500 Index(R) ("S&P 500") are two indices designed to measure the
performance of United States stocks. When investment managers invest indexed
separate accounts or index fund assets, they attempt to replicate the
performance of the applicable target index by holding all or a representative
sample of the securities included in the index.
The Funds' performance data assume the reinvestment of dividends but do
not reflect deductions for administrative and management expenses. The Funds
will be subject to these costs and expenses, while the Index does not have these
expenses. In addition, various factors, such as holding a cash balance, may
cause the Funds' performance to be higher or lower than that of the Index.
THE SCHWAB INTERNATIONAL INDEX(R)
The Schwab International Index(R) is a broad-based stock market index
which contains the common stocks of the 350 largest operating companies (i.e.,
non-investment companies) incorporated outside the United States. To reduce
undue risk, the Index represents equities only from countries that are
considered to have developed markets and economies. By tracking the largest
companies in developed markets, the Index represents the performance of the
"blue chips" of international markets. The Index is also designed to provide a
broad representation of the international market, by limiting each country to no
more than 35% of the total market capitalization of the Index. As the stocks
contained in the Index represent about 35% of the total market capitalization of
international companies, the Index provides a reliable measure of market
performance. The Schwab International Index(R) was first made available to the
public on July 29, 1993.
THE SCHWAB SMALL-CAP INDEX(TM)
To be included in the Schwab Small-Cap Index, a company must satisfy
all of the following criteria: (1) it must be an "operating company" (i.e., not
an investment company) incorporated in the United States, its territories or
possessions; (2) a liquid market for its common shares must exist on the New
York Stock Exchange, American Stock Exchange or the NASDAQ/NMS, and (3) its
market value must place it among the second 1000 such companies
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<PAGE> 40
as measured by market capitalization (i.e., from the company with a rank of 1001
through the company with a rank of 2000). Shareholders generally avoid exposure
to the smallest companies, whose shares are often thinly traded and very
volatile, because these stocks are not included in the Index.
A particular stock's weighting in the Schwab Small-Cap Index is based
on its relative total market value (i.e., its market price per share times the
number of shares outstanding), divided by the total market capitalization of the
Schwab Small-Cap Index. The returns produced by the United States stock market
during the 25 years ending December 31, 1995 have been exceeded by very few
types of securities investments. Because the unmanaged performance of the U.S.
stock market has often proven superior to that of many individually selected
stock portfolios, a growing percentage of assets invested in the equity markets
are being placed in "index" portfolios. From less than $9 billion in 1980,
indexed institutional holdings have grown to over $280 billion, a figure equal
to approximately one-quarter of all institutional assets. (Source: Callan
Associates Survey, reported in Fall 1990 edition of The Journal of Portfolio
Management).
Historically, returns in a long-term investment in a group of common
stocks representative of the stock market as a whole, as well as a group of
common stocks representative of small-cap stocks, have significantly exceeded
the returns of U.S. Treasury Bills, CDs, corporate bonds and inflation.
THE S&P 500 INDEX
The Standard & Poor's 500 Composite Stock Price Index, known as the S&P
500 Index, is representative of the performance of the U.S. stock market. The
Index consists of 500 stocks chosen for market size, liquidity and industry
group representation. It is a market-value weighted index (stock price times
number of shares outstanding), with each stock's weight in the Index
proportionate to its market value. The S&P 500 Index does not contain the 500
largest stocks, as measured by market capitalization. Although many of the
stocks in the Index are among the largest, there are also some relatively small
companies in the Index. Those companies, however, are generally established
companies within their industry group. S&P identifies important industry groups
within the U.S. economy and then allocates a representative sample of stocks
with each group to the S&P 500 Index. There are four major industry sectors
within the Index: Industrials, Utilities, Financial and Transportation.
ASSET ALLOCATION STRATEGIES
USING SCHWABFUNDS(R)
Shareholders of SchwabFunds may wish to invest in the SchwabFunds as
components of their personal asset allocation plan. They may also choose to
invest in the Schwab Asset Director Funds, which offer the benefits of asset
allocation in a single fund. An asset allocation program is available through
Schwab. This program may help shareholders select investments, including
investments in SchwabFunds, that match their individual investment needs. The
shareholders' personal investment plan is based on a number of factors including
personal financial situation, time horizon, investment objectives and goals and
risk tolerance.
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ACCESS TO SCHWAB'S MUTUAL
FUND ONESOURCE SERVICE(TM)
With Schwab's Mutual Fund OneSource Service(TM) ("OneSource"), a
shareholder can invest in over 200 mutual funds from many fund companies,
subject to the following. If a shareholder makes five or more short-term
redemptions of OneSource mutual funds (other than the SchwabFunds) within any
12-month period, a fee will be charged on all future trades. A short-term
redemption in this context refers to the sale of mutual fund shares held for six
months or less. Some mutual funds available through OneSource may charge fees
permitted under Rule 12b-1 in excess of one quarter of one percent per year.
Schwab reserves the right to modify OneSource's terms and conditions at any
time. For more information, a shareholder should contact their Schwab office
during its regular business hours or 800-2 NO-LOAD, 24 hours a day.
From time to time, the Funds may include discussions in advertisements
of the income tax savings shareholders may experience as a result of their
policy of limiting portfolio trading in order to reduce capital gains. This
information may be supplemented by presentations of statistical data
illustrating the extent of such income tax savings and the impact of such
savings on the yield and/or total return of the Funds. In addition, such
advertisements may include comparisons of the Funds' performance against that of
investment products that do not employ the Funds' policy of seeking to limit
capital gains.
The Funds are intended to make indexed investing easily available to
Schwab customers with the highest level of convenience and economy thereby
facilitating their ability to participate in the long-term performance of the
U.S. stock market.
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<PAGE> 42
SCHWABFUNDS(R).
SchwabFunds offers a variety of series and classes of shares of beneficial
interest to help you with your investment needs.
EQUITY FUNDS
Schwab 1000 Fund(R) 1
Schwab International Index Fund(TM) 2
Schwab Small-Cap Index Fund(R) 2
Schwab Asset Director(R)-High Growth Fund 2
Schwab Asset Director(R)-Balanced Growth Fund 2
Schwab Asset Director(R)-Conservative Growth Fund 2
Schwab S&P 500 Fund-Investor Shares 2
Schwab S&P 500 Fund-e.Shares(TM) 2, 3
Schwab Analytics Fund(TM) 2
FIXED INCOME FUNDS 1
Schwab Short/Intermediate Government Bond Fund
Schwab Long-Term Government Bond Fund
Schwab Short/Intermediate Tax-Free Bond Fund
Schwab Long-Term Tax-Free Bond Fund
Schwab California Short/Intermediate Tax-Free Bond Fund 4
Schwab California Long-Term Tax-Free Bond Fund 4
MONEY MARKET FUNDS 5
Schwab Money Market Fund
Schwab Government Money Fund
Schwab U.S. Treasury Money Fund
Schwab Value Advantage Money Fund(TM)
Schwab Tax-Exempt Money Fund-Sweep Shares
Schwab Tax-Exempt Money Fund-Value Advantage Shares(TM)
Schwab California Tax-Exempt Money Fund-Sweep Shares 4
Schwab California Tax-Exempt Money Fund-Value Advantage Shares(TM) 4
Schwab Retirement Money Fund(R) 6
Schwab Institutional Advantage Money Fund(TM) 6
Schwab New York Tax-Exempt Money Fund-Sweep Shares 7
Schwab New York Tax-Exempt Money Fund-Value Advantage Shares(TM) 7
1 The Schwab 1000 Fund and all fixed income funds are separate investment
portfolios of Schwab Investments.
2 The Funds are separate investment portfolios or classes of shares of Schwab
Capital Trust.
3 Available only through SchwabLink(TM).
4 Available only to California residents and residents of selected other
states.
5 All listed money market funds are separate investment portfolios of The
Charles Schwab Family of Funds.
6 Designed for institutional investors only.
7 Available only to New York residents and residents of selected other
states.
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OTHER INFORMATION
From time to time, the International Index Fund and the Small-Cap Index
Fund may compare the historical performance of the Schwab International Index(R)
and the Schwab Small-Cap Index(TM), respectively, to the historical performance
of various other indices, including the S&P 500, as reported by independent
sources.
Each Fund is managed to offset capital gains with capital losses in
order to minimize that Fund's capital gain distributions. This special feature
can make a real difference in an investor's after-tax return, especially if the
investor is in a high tax bracket. In addition, each Fund has adopted a number
of policies that should cause its portfolio turnover rate to be below the
portfolio turnover rate of many other mutual funds. A lower portfolio turnover
rate acts to minimize associated transaction costs as well as the level of
realized capital gains. By avoiding, where possible, the distribution of capital
gains to shareholders, the Funds help to build the value of a shareholders
shares and defer payment of capital gains taxes until shares are redeemed. A
shareholder's current tax liability for capital gains should be reduced and the
shareholder's total return increased by these policies.
Each Fund may, from time to time, refer to recent studies that analyze
certain techniques and strategies which either Fund may use. In addition, each
Fund may, from time to time, promote the advantages of investing in a series
that is part of a large, diverse mutual fund complex.
From time to time, either Fund may include discussions in
advertisements of the income tax savings shareholders may experience as a result
of that Fund's policy of limiting portfolio trading in order to reduce capital
gains. This information may be supplemented by presentations of statistical data
illustrating the extent of such income tax savings and the impact of such
savings on the yield and/or total return of either Fund. In addition, such
advertisements may include comparisons of each Fund's performance against that
of investment products that do not employ each Fund's policy of seeking to limit
capital gains.
GENERAL INFORMATION
The Trust is generally not required to hold shareholder meetings.
However, as provided in its Agreement and Declaration of Trust and Bylaws,
shareholder meetings will be held in connection with the following matters: (1)
election or removal of Trustees if a meeting is requested in writing by a
shareholder or shareholders who beneficially own(s) 10% or more of the Trust's
shares; (2) adoption of any contract for which shareholder approval is required
by the 1940 Act; (3) any termination of the Trust to the extent and as provided
in the Declaration of Trust; (4) any amendment of the Declaration of Trust
(other than amendments changing the name of the Trust or any of its investment
portfolios, supplying any omission, curing any ambiguity or curing, correcting
or supplementing any defective or inconsistent provision thereof); (5)
determining whether a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the shareholders, to the same extent as the stockholders of a Massachusetts
business corporation; and (6) such additional matters as may be required by law,
the Declaration of Trust, the Bylaws or any registration of the Trust with the
SEC or any state or as the Board of Trustees may consider desirable. The
shareholders also would vote upon changes to a Fund's fundamental investment
objective, policies or restrictions.
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Each Trustee serves until the next meeting of shareholders, if any,
called for the purpose of electing Trustees and until the election and
qualification of his or her successor or until death, resignation, retirement or
removal by a majority vote of the shares entitled to vote (as described below)
or of a majority of the Trustees. In accordance with the 1940 Act (i) the Trust
will hold a shareholder meeting for the election of Trustees when less than a
majority of the Trustees have been elected by shareholders, and (ii) if, as a
result of a vacancy in the Board of Trustees, less than two-thirds of the
Trustees have been elected by the shareholders, that vacancy will be filled by a
vote of the shareholders.
Upon the written request of 10 or more shareholders who have been such
for at least six months and who hold shares constituting at least 1% of the
Trust's outstanding shares stating that they wish to communicate with the other
shareholders for the purpose of obtaining signatures necessary to demand a
meeting to consider removal of one or more Trustees, the Trust has undertaken to
disseminate appropriate materials at the expense of the requesting shareholders.
The Bylaws provide that a majority of shares entitled to vote shall be
a quorum for the transaction of business at a shareholders' meeting, except that
where any provision of law, of the Declaration of Trust or of the Bylaws permits
or requires that (i) holders of any series shall vote as a series, then a
majority of the aggregate number of shares of that series entitled to vote shall
be necessary to constitute a quorum for the transaction of business by that
series, or (ii) holders of any class shall vote as a class, then a majority of
the aggregate number of shares of that class entitled to vote shall be necessary
to constitute a quorum for the transaction of business by that class. Any lesser
number shall be sufficient for adjournments. Any adjourned session or sessions
may be held, within a reasonable time after the date set for the original
meeting, without the necessity of further notice. The Declaration of Trust
specifically authorizes the Board of Trustees to terminate the Trust (or any of
its investment portfolios) by notice to the shareholders without shareholder
approval.
Under Massachusetts law, shareholders of a Massachusetts business trust
could, under certain circumstances, be held personally liable for the Trust's
obligations. The Declaration of Trust, however, disclaims shareholder liability
for the Trust's acts or obligations and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. In addition, the Declaration of Trust provides for
indemnification out of the property of an investment portfolio in which a
shareholder owns or owned shares for all losses and expenses of such shareholder
or former shareholder if he or she is held personally liable for the obligations
of the Trust solely by reason of being or having been a shareholder. Moreover,
the Trust will be covered by insurance which the Trustees consider adequate to
cover foreseeable tort claims. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is considered remote, because
it is limited to circumstances in which a disclaimer is inoperative and the
Trust itself is unable to meet its obligations.
For further information, please refer to the registration statement and
exhibits for the Trust on file with the SEC in Washington, D.C. and available
upon payment of a copying fee. The statements in the Prospectus and this
Statement of Additional Information concerning the contents of contracts or
other documents, copies of which are filed as exhibits to the registration
statement, are qualified by reference to such contracts or documents.
PRINCIPAL HOLDERS OF SECURITIES
As of April 30, 1996, the officers and Trustees of the Trust, as a
group, owned of record or beneficially 1.1%, 2.3% and 2.5% of the outstanding
voting securities of the Schwab Small-Cap Index Fund, the Asset Director--High
Growth Fund and the Asset Director--Conservative Growth, respectively. As of
April
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30, 1996, the officers and Trustees of the Trust, as a group, owned of
record or beneficially less than 1% of the outstanding voting securities of the
remaining series of Schwab Capital Trust.
PURCHASE AND REDEMPTION OF SHARES
Each Fund has set minimum initial investment requirements, as disclosed
in their respective Prospectuses. Subsequent investments of $100 or more may be
made. These minimum investment requirements may be changed at any time and are
not applicable to certain types of investors. The Trust may waive the minimums
for purchases by Trustees, directors, officers or employees of the Trust,
Schwab, the Investment Manager or the Sub-Adviser.
The Trust has made an election with the SEC to pay in cash all
redemptions requested by any shareholder of record limited in amount during any
90- day period to the lesser of $250,000 or 1% of its net assets at the
beginning of such period. This election is irrevocable without the SEC's prior
approval. Redemption requests in excess of the stated limits may be paid, in
whole or in part, in investment securities or in cash, as the Trust's Board of
Trustees may deem advisable; however, payment will be made wholly in cash unless
the Board of Trustees believes that economic or market conditions exist that
would make such a practice detrimental to the best interests of the Fund. If
redemption proceeds are paid in investment securities, such securities will be
valued as set forth in the Prospectus of the Fund affected under "Share Price
Calculation" and a redeeming shareholder would normally incur brokerage expenses
if he or she converted the securities to cash.
OTHER INFORMATION
The Prospectuses of the Funds and this Statement of Additional
Information do not contain all the information included in the Registration
Statement filed with the SEC under the Securities Act of 1933, as amended, with
respect to the securities offered by the Prospectuses. Certain portions of the
Registration Statement have been omitted from the Prospectuses and this
Statement of Additional Information pursuant to the rules and regulations of the
SEC. The Registration Statement, including the exhibits filed therewith, may be
examined at the office of the SEC in Washington, D.C.
Statements contained in the Prospectuses or in this Statement of
Additional Information as to the contents of any contract or other document
referred to are not necessarily complete, and, in each instance, reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement of which the Prospectuses and this Statement of
Additional Information form a part, each such statement being qualified in all
respects by such reference.
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COMPANIES IN THE SCHWAB INTERNATIONAL INDEX
The following is a list of Companies whose securities were included in
the Schwab International Index(R) calculation as of September 29, 1995:
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
ABBEY NATIONAL UNITED KINGDOM
ABN AMRO HOLDING NETHERLANDS
AEGON NETHERLANDS
AIR LIQUIDE FRANCE
AJINOMOTO CO JAPAN
AKZO NOBEL NETHERLANDS
ALCAN ALUMINIUM CANADA
ALCATEL ALSTHOM FRANCE
ALL NIPPON AIRWAYS CO JAPAN
ALLEANZA ASSICUR. ORD ITALY
ALLEANZA ASSICUR. RNC ITALY
ALLIED DOMECQ UNITED KINGDOM
AMCOR AUSTRALIA
ANZ BANKING GROUP AUSTRALIA
ARGENTARIA CORP BANCARIA SPAIN
ARGYLL GROUP UNITED KINGDOM
ASAHI BANK JAPAN
ASAHI BREWERIES JAPAN
ASAHI CHEMICAL IND CO JAPAN
ASAHI GLASS CO JAPAN
ASDA GROUP UNITED KINGDOM
ASEA A SWEDEN
ASEA B SWEDEN
ASS'D BR FOODS EX WESTON UNITED KINGDOM
ASSICURAZIONI GENERALI ITALY
ASTRA A SWEDEN
ASTRA B SWEDEN
AXA FRANCE
BAA UNITED KINGDOM
BANCO BILBAO VIZCAYA SPAIN
BANCO SANTANDER SPAIN
BANK FUKUOKA JAPAN
BANK MONTREAL CANADA
BANK NOVA SCOTIA CANADA
</TABLE>
A-1
<PAGE> 47
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
BANK TOKYO JAPAN
BANK YOKOHAMA JAPAN
BANKGESELLSCHAFT BERLIN GERMANY
BARCLAYS UNITED KINGDOM
BARRICK GOLD CORP CANADA
BASF GERMANY
BASS UNITED KINGDOM
BAT INDUSTRIES UNITED KINGDOM
BAYER GERMANY
BAYER HYPOTHEKEN BANK GERMANY
BAYER VEREINSBANK STAMM GERMANY
BBC BROWN BOVERI INH SWITZERLAND
BBC BROWN BOVERI NAMEN SWITZERLAND
BCE INC CANADA
BMW STAMM GERMANY
BNP ORD FRANCE
BOC GROUP UNITED KINGDOM
BOOTS CO UNITED KINGDOM
BRIDGESTONE CORP JAPAN
BRITISH AIRWAYS UNITED KINGDOM
BRITISH GAS UNITED KINGDOM
BRITISH PETROLEUM UNITED KINGDOM
BRITISH SKY BROADCASTING UNITED KINGDOM
BRITISH STEEL UNITED KINGDOM
BRITISH TELECOM UNITED KINGDOM
BROKEN HILL PROP CO AUSTRALIA
BTR UNITED KINGDOM
BTR NYLEX AUSTRALIA
CABLE & WIRELESS UNITED KINGDOM
CADBURY SCHWEPPES UNITED KINGDOM
CANADIAN IMPERIAL BANK CANADA
CANADIAN PACIFIC LTD CANADA
CANON INC JAPAN
CARREFOUR FRANCE
CHEUNG KONG HONG KONG
CHIBA BANK JAPAN
CHINA LIGHT & POWER HONG KONG
CHUBU ELECTRIC POWER CO JAPAN
CHUGOKU ELECTRIC POWER JAPAN
</TABLE>
A-2
<PAGE> 48
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
CIBA-GEIGY INHABER SWITZERLAND
CIBA-GEIGY NAMEN SWITZERLAND
CITIC PACIFIC HONG KONG
CITY DEVELOPMENTS SINGAPORE
COMMERCIAL UNION UNITED KINGDOM
COMMERZBANK AKTIE GERMANY
COMMONWEALTH BANK AUSTRALIA
CRA AUSTRALIA
CS HOLDING SWITZERLAND
DAI NIPPON PRINTING CO JAPAN
DAI-ICHI KANGYO BANK JAPAN
DAIEI JAPAN
DAIMLER-BENZ GERMANY
DAIWA BANK JAPAN
DAIWA HOUSE IND CO JAPAN
DAIWA SECURITIES CO JAPAN
DANONE (GROUPE) FRANCE
DDI CORP JAPAN
DEUTSCHE BANK GERMANY
DEVELOPMENT BK SINGAPORE SINGAPORE
DRESDNER BANK GERMANY
EAST JAPAN RAILWAY CO JAPAN
ELECTRABEL BELGIUM
ELECTRABEL VVPR BELGIUM
ELF AQUITAINE FRANCE
ELSEVIER NETHERLANDS
ENDESA SPAIN
ERICSSON (LM) B SWEDEN
FANUC JAPAN
FIAT ORD ITALY
FIAT PRIV ITALY
FIAT RNC ITALY
FUJI BANK JAPAN
FUJI PHOTO FILM CO JAPAN
FUJITSU JAPAN
GENERAL ELECTRIC PLC UNITED KINGDOM
GENERALE BELGIQUE BELGIUM
GENERALE EAUX (CIE) FRANCE
GLAXO WELLCOME UNITED KINGDOM
</TABLE>
A-3
<PAGE> 49
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
GRANADA GROUP UNITED KINGDOM
GRAND METROPOLITAN UNITED KINGDOM
GREAT UNIVERSAL STORES UNITED KINGDOM
GUINNESS UNITED KINGDOM
GUNMA BANK JAPAN
HACHIJUNI BANK JAPAN
HANG SENG BANK HONG KONG
HANKYU CORP JAPAN
HANSON UNITED KINGDOM
HEINEKEN NV NETHERLANDS
HENDERSON LAND DEV. HONG KONG
HENKEL VORZUG GERMANY
HITACHI JAPAN
HITACHI ZOSEN CORP JAPAN
HOECHST GERMANY
HOKKAIDO ELECTRIC POWER JAPAN
HOKURIKU ELECTRIC POWER JAPAN
HOLDERBANK INHABER SWITZERLAND
HOLDERBANK NAMEN SWITZERLAND
HONDA MOTOR CO JAPAN
HONGKONG ELECTRIC HLDGS HONG KONG
HONGKONG LAND HK (USD) SINGAPORE
HONGKONG TELECOM HONG KONG
HSBC HOLDINGS (GBP 0.75) UNITED KINGDOM
HSBC HOLDINGS (HKD 10) UNITED KINGDOM
HUTCHISON WHAMPOA HONG KONG
IBERDROLA SPAIN
IMPERIAL CHEMICAL ICI UNITED KINGDOM
IMPERIAL OIL CANADA
INA ITALY
INDUSTRIAL BANK OF JAPAN JAPAN
INT'LE NEDERLANDEN GROEP NETHERLANDS
ISHIKAWAJIMA-HARIMA JAPAN
ITO-YOKADO CO JAPAN
ITOCHU CORP JAPAN
JAPAN AIRLINES CO JAPAN
JAPAN TELECOM CO JAPAN
JAPAN TOBACCO JAPAN
JARDINE MATHESON HK(USD) SINGAPORE
</TABLE>
A-4
<PAGE> 50
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
JOYO BANK JAPAN
JUSCO CO JAPAN
KAJIMA CORP JAPAN
KANSAI ELECTRIC POWER CO JAPAN
KAO CORP JAPAN
KAWASAKI HEAVY IND JAPAN
KAWASAKI STEEL CORP JAPAN
KDD JAPAN
KINGFISHER UNITED KINGDOM
KINKI NIPPON RAILWAY CO JAPAN
KIRIN BREWERY CO JAPAN
KOBE STEEL JAPAN
KOMATSU JAPAN
KON. PTT NEDERLAND NETHERLANDS
KUBOTA CORP JAPAN
KYOCERA CORP JAPAN
KYUSHU ELECTRIC POWER CO JAPAN
LAFARGE (LAFARGE COPPEE) FRANCE
LINDE GERMANY
LLOYDS BANK UNITED KINGDOM
LONG-TERM CREDIT BANK JAPAN
LOREAL FRANCE
LUFTHANSA STAMM GERMANY
LUFTHANSA VORZUG GERMANY
LVMH FRANCE
LYONNAISE DES EAUX FRANCE
MANNESMANN GERMANY
MARKS & SPENCER UNITED KINGDOM
MARUBENI CORP JAPAN
MARUI CO JAPAN
MATSUSHITA COMMUNICATION JAPAN
MATSUSHITA ELECT IND'L JAPAN
MATSUSHITA ELECT WORKS JAPAN
MICHELIN B FRANCE
MITSUBISHI BANK JAPAN
MITSUBISHI CHEMICAL CORP JAPAN
MITSUBISHI CORP JAPAN
MITSUBISHI ELECTRIC CORP JAPAN
MITSUBISHI ESTATE CO JAPAN
</TABLE>
A-5
<PAGE> 51
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
MITSUBISHI HEAVY IND JAPAN
MITSUBISHI MATERIALS JAPAN
MITSUBISHI MOTORS CORP JAPAN
MITSUBISHI TRUST JAPAN
MITSUI & CO JAPAN
MITSUI FUDOSAN CO JAPAN
MITSUI MARINE & FIRE JAPAN
MITSUI TRUST & BANK CO JAPAN
MUNCHENER RUCK INH GERMANY
MUNCHENER RUCK NAM GERMANY
MURATA MANUFACTURING CO JAPAN
NAME CC
NATIONAL AUSTRALIA BANK AUSTRALIA
NATIONAL POWER UNITED KINGDOM
NATIONAL WESTMINSTER BK UNITED KINGDOM
NEC CORP JAPAN
NESTLE NOM SWITZERLAND
NEW OJI PAPER CO JAPAN
NEW WORLD DEVELOPMENT HONG KONG
NEWS CORP AUSTRALIA
NEWS CORP PLVO AUSTRALIA
NIKKO SECURITIES CO JAPAN
NIKON CORP JAPAN
NINTENDO CO JAPAN
NIPPON CREDIT BANK JAPAN
NIPPON EXPRESS CO JAPAN
NIPPON OIL CO JAPAN
NIPPON PAPER IND CO JAPAN
NIPPON STEEL CORP JAPAN
NIPPON YUSEN K.K JAPAN
NIPPONDENSO CO JAPAN
NISSAN MOTOR CO JAPAN
NKK CORP JAPAN
NOMURA SECURITIES CO JAPAN
NORANDA INC CANADA
NORTHERN TELECOM CANADA
NTT CORP JAPAN
OBAYASHI CORP JAPAN
OCBC BANK SINGAPORE
</TABLE>
A-6
<PAGE> 52
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
ODAKYU ELECTRIC RAILWAY JAPAN
OKI ELECTRIC INDUSTRY CO JAPAN
OMRON CORP JAPAN
ONO PHARMACEUTICAL CO JAPAN
OSAKA GAS CO JAPAN
PARIBAS(CIE FINANCIERE)A FRANCE
PEARSON UNITED KINGDOM
PEN & ORIENTAL STEAM UNITED KINGDOM
PETROFINA BELGIUM
PEUGEOT SA FRANCE
PHARMACIA A SWEDEN
PHARMACIA B SWEDEN
PHILIPS ELECTRONICS NETHERLANDS
PLACER DOME CANADA
POLYGRAM NETHERLANDS
POWERGEN UNITED KINGDOM
PRUDENTIAL CORP UNITED KINGDOM
RANK ORGANISATION UNITED KINGDOM
REED INTERNATIONAL UNITED KINGDOM
RENAULT FRANCE
REPSOL SPAIN
REUTERS HOLDINGS UNITED KINGDOM
RHONE-POULENC ORD A FRANCE
RICHEMONT (FIN) A UNIT SWITZERLAND
RICOH CO JAPAN
ROCHE HOLDING GENUSS SWITZERLAND
ROCHE HOLDING INHABER SWITZERLAND
ROHM CO JAPAN
ROYAL BANK OF CANADA CANADA
ROYAL BANK OF SCOTLAND UNITED KINGDOM
ROYAL DUTCH PETROLEUM CO NETHERLANDS
RTZ CORP REG UNITED KINGDOM
RWE STAMM GERMANY
RWE VORZUG GERMANY
SAINSBURY (J) UNITED KINGDOM
SAINT-GOBAIN FRANCE
SAKURA BANK JAPAN
SANDOZ INHABER SWITZERLAND
SANDOZ NAMEN SWITZERLAND
</TABLE>
A-7
<PAGE> 53
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
SANDVIK A SWEDEN
SANDVIK B SWEDEN
SANKYO CO JAPAN
SANOFI FRANCE
SANWA BANK JAPAN
SANYO ELECTRIC CO JAPAN
SAP STAMM GERMANY
SAP VORZUG GERMANY
SCHERING GERMANY
SCHNEIDER(EX-SPIE BATIGN FRANCE
SCHWEIZ BANKGESELL INH SWITZERLAND
SCHWEIZ BANKGESELL NAMEN SWITZERLAND
SCHWEIZ BANKVEREIN INH SWITZERLAND
SCHWEIZ BANKVEREIN NAMEN SWITZERLAND
SCOTTISH & NEWCASTLE UNITED KINGDOM
SEAGRAM CO CANADA
SECOM CO JAPAN
SEIBU RAILWAY CO JAPAN
SEKISUI CHEMICAL CO JAPAN
SEKISUI HOUSE JAPAN
SEVEN-ELEVEN JAPAN CO JAPAN
SHARP CORP JAPAN
SHELL T & T UNITED KINGDOM
SHIKOKU ELECTRIC POWER JAPAN
SHIMIZU CORP JAPAN
SHIN-ETSU CHEMICAL CO JAPAN
SHIZUOKA BANK JAPAN
SIEMENS STAMM GERMANY
SINGAPORE AIRLINES SINGAPORE
SINGAPORE TELECOM SINGAPORE
SMITHKLINE BEECHAM A UNITED KINGDOM
SMITHKLINE BEECHAM UNIT UNITED KINGDOM
SOCIETE GENERALE FRANCE
SONY CORP JAPAN
SONY MUSIC ENTERTAINMENT JAPAN
STANDARD CHARTERED UNITED KINGDOM
STET ORD ITALY
STET RNC ITALY
SUEZ (COMPAGNIE DE) FRANCE
</TABLE>
A-8
<PAGE> 54
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
SUMITOMO BANK JAPAN
SUMITOMO CHEMICAL CO JAPAN
SUMITOMO CORP JAPAN
SUMITOMO ELECTRIC IND JAPAN
SUMITOMO MARINE & FIRE JAPAN
SUMITOMO METAL IND JAPAN
SUMITOMO TRUST & BANK JAPAN
SUN HUNG KAI PROPERTIES HONG KONG
SUZUKI MOTOR CORP JAPAN
SWIRE PACIFIC A HONG KONG
TAISEI CORP JAPAN
TAISHO PHARMACEUTICAL CO JAPAN
TAKEDA CHEMICAL IND JAPAN
TDK CORP JAPAN
TEIJIN JAPAN
TELE DANMARK B GERMANYNMARK
TELECOM ITALIA MOB. ORD ITALY
TELECOM ITALIA MOB. RNC ITALY
TELECOM ITALIA ORD ITALY
TELECOM ITALIA RNC ITALY
TELEFONICA DE ESPANA SPAIN
TESCO UNITED KINGDOM
THOMSON CORP CANADA
THORN-EMI UNITED KINGDOM
THYSSEN GERMANY
TOBU RAILWAY CO JAPAN
TOHOKU ELECTRIC POWER CO JAPAN
TOKAI BANK JAPAN
TOKIO MARINE & FIRE JAPAN
TOKYO ELECTRIC POWER CO JAPAN
TOKYO ELECTRON JAPAN
TOKYO GAS CO JAPAN
TOKYU CORP JAPAN
TONEN CORP JAPAN
TOPPAN PRINTING CO JAPAN
TORAY INDUSTRIES JAPAN
TORONTO-DOMINION BANK CANADA
TOSHIBA CORP JAPAN
TOSTEM CORP JAPAN
</TABLE>
A-9
<PAGE> 55
<TABLE>
<CAPTION>
COMPANY NAME COUNTRY
<S> <C>
TOTAL SA FRANCE
TOTO JAPAN
TOYO SEIKAN KAISHA JAPAN
TOYO TRUST & BANKING CO JAPAN
TOYODA AUTOMATIC LOOM JAPAN
TOYOTA MOTOR CORP JAPAN
TRACTEBEL BELGIUM
TRACTEBELGIUML VVPR BELGIUM
TSB GROUP UNITED KINGDOM
UAP (COMPAGNIE) FRANCE
UNILEVER NV CERT NETHERLANDS
UNILEVER PLC UNITED KINGDOM
UNITED OVERSEAS BANK SINGAPORE
VEBA GERMANY
VENDOME LUXURY GRP UNIT UNITED KINGDOM
VEW INH (VEREIN EL WEST GERMANY
VIAG GERMANY
VODAFONE GROUP UNITED KINGDOM
VOLKSWAGEN STAMM GERMANY
VOLKSWAGEN VORZUG GERMANY
VOLVO A SWEDEN
VOLVO B SWEDEN
WESTERN MINING CORP HLDG AUSTRALIA
WESTPAC BANKING AUSTRALIA
WHARF HOLDINGS HONG KONG
WINTERTHUR VERS. INHABER SWITZERLAND
WINTERTHUR VERS. NAMEN SWITZERLAND
WOLTERS KLUWER NETHERLANDS
YAMAICHI SECURITIES CO JAPAN
YAMANOUCHI PHARM. JAPAN
YASUDA FIRE & MARINE JAPAN
YASUDA TRUST & BANK CO JAPAN
ZENECA GROUP UNITED KINGDOM
ZUERICH VERSICHERUNG SWITZERLAND
</TABLE>
A-10
<PAGE> 56
COMPANIES IN THE SCHWAB SMALL-CAP INDEX
The following is a list of Companies whose securities were included in
the Schwab Small-Cap Index(TM) calculation as of December 31, 1995:
1ST SOURCE CORP
3DO CO
AAMES FINL CORP
AAR CORP
ABM INDS INC
ABR INFORMATION SVCS
ACCESS HEALTH MARKET
ACCLAIM ENTMT INC NE
ACCUSTAFF INC
ACORDIA INC
ACUSON CORP
ACX TECHNOLOGIES INC
ACXIOM CORP
ADVANCED TECHNOLOGY
ADVANCED TISSUE SCIENCES INC
ADVO SYSTEM INC
AFFILIATED COMPUTER SVCS INC
AG CHEM EQUIP INC
AGOURON PHARMACEUTICAL
AIR EXPRESS INTL CORP
AIRBORNE FGHT CORP
ALANTEC CI2ORP
ALBANK FINL CORP
ALBANY INTL CORP
ALEX BROWN INC
ALEXANDER & ALEXANDER
ALFA CORP
ALLEN GROUP INC
ALLIANCE ENTMT CORP
ALLIANCE PHARMACEUTICAL
ALLIANCE SEMICONDUCTOR
ALLIANT TECHSYSTEMS
ALLIED GROUP INC
ALPHARMA INC
ALTERNATIVE RESOURCES
ALTRON INC
AMC ENTMT INC
AMCOL INTL CORP
AMCORE FINL INC
AMERCO
AMERICA WEST AIRLS INC
AMERICAN ANNUITY GROUP
AMERICAN BANKRS INS GROUP
AMERICAN BUSINESS INFO INC
AMERICAN BUSINESS PRODUCTS
AMERICAN FINL ENTPRISES
AMERICAN FREIGHTWAYS
AMERICAN HERIT LF INVESTMENT
AMERICAN MED RESPONSE
AMERICAN MGMT SYS INC
AMERICAN MOBILE SATELLITE
AMERICAN PRESIDENT COS
AMERICAN TRAVELLERS
AMERICREDIT CORP
AMETEK INC
AMRESCO INC
AMSCO INTL INC
ANCHOR GAMING
ANTEC CORP
ANTHONY INDS INC
APOLLO GROUP INC
APPLEBEES INTL INC
APPLIED MAGNETICS CO
APPLIED PWR INC
APPLIX INC
APS HLDG CORP
APTARGROUP INC
AQUILA GAS PIPELINE
ARBOR DRUGS INC
ARCH COMMUNICATIONS
B-1
<PAGE> 57
ARCTCO INC
ARGONAUT GROUP INC
ARMCO INC
ARMOR ALL PRODS CORP
ARNOLD INDS INC
ARVIN INDS INC
ASHLAND COAL INC
ASPECT TELECOMMUNICATIONS
ASPEN TECHNOLOGY INC
ASSOCIATED BANC CORP
ASSOCIATED GROUP INC
AST RESEARCH INC
ASTORIA FINL CORP
ATLANTIC SOUTHEAST AIRLINES
ATLAS AIR INC
ATMOS ENERGY CORP
ATRIA SOFTWARE INC
AUGAT INC
AURA SYS INC
AUSPEX SYS INC
AUTHENTIC FITNESS CO
AVATAR HLDS INC
AVID TECHNOLOGY INC
AZTAR CORP
BALDOR ELEC CO
BALL CORP
BALLARD MED PRODS
BALLY ENTMT CORP
BANCORPSOUTH INC
BANCTEC INC
BANKNORTH GRP INC DE
BARRETT RES CORP
BASSETT FURNITURE INDUSTRIES
BATTLE MTN GOLD CO
BAY ST GAS CO
BBN CORP
BEARINGS INC
BELDEN INC
BELL & HOWELL HLDGS
BELL BANCORP INC
BENSON EYECARE CORP
BENTON OIL & GAS CO
BEST BUY INC
BET HLDGS INC
BIO RAD LABS INC
BIRMINGHAM STL CORP
BISYS GROUP INC
BJ SVCS CO
BLACK BOX CORP DEL
BLACK HILLS PWR & LT
BLAIR CORP
BLANCH E W HLDGS INC
BLOCK DRUG INC
BLOUNT INTL INC
BMC INDS INC MINN
BOB EVANS FARMS INC
BOK FINL CORP
BOOLE & BABBAGE INC
BORG WARNER SEC CORP
BORG-WARNER AUTOMOTIVE
BORLAND INTL INC
BOSTON TECHNOLOGY INC
BOWNE & CO INC
BOYD GAMING CORP
BREED TECHNOLOGIES INC
BROOKLYN BANCORP INC
BROWN GROUP INC
BRUSH WELLMAN INC
BT OFFICE PRODS INTL
BUFFETS INC
BURLINGTON COAT FACT
BURR BROWN CORP
BUSH BOAKE ALLEN INC
BUSINESS RECORDS COR
BWIP HLDG INC
C D I CORP
CABLE DESING TECHNOL
CABLEVISION SYS CORP
CABOT OIL & GAS CORP
CAL FED BANCORP INC
B-2
<PAGE> 58
CALGON CARBON CORP
CALIFORNIA BANCSHARE
CALIFORNIA MICROWAVE
CALMAT CO
CAMBREX CORP
CAMBRIDGE TECH PARTNERS
CAMCO INTL INC
CANANDAIGUA WINE INC
CAPITAL BANCORP FLA
CAPITAL RE CORP
CAPITOL AMERN FINL CORP
CAPSURE HLDGS CORP
CARAUSTAR INDS INC
CARLISLE CORP
CARMIKE CINEMAS INC
CARPENTER TECHNOLOGY
CARRINGTON LABS INC
CARSON PIRIE SCOTT & CO ILL
CARTER WALLACE INC
CASEYS GEN STORES
CASTLE A M & CO
CATALINA MARKETING CORP
CATELLUS DEV CORP
CCB FINL CORP
CDW COMPUTER CTRS INC
CELLSTAR CORP
CENTENNIAL CELLULAR
CENTEX CONSTRUCTION
CENTRAL HUDSON GAS&ELEC
CENTRAL LA ELEC INC
CENTRAL MAINE PWR CO
CENTRAL NEWSPAPERS INC
CENTURA BKS INC
CENTURY COMMUNICATIONS
CERNER CORP
CHAMPION ENTERPRISES
CHANTAL PHARMACEUTICALS
CHAPARRAL STL CO
CHARMING SHOPPES INC
CHECKFREE CORP
CHECKPOINT SYS INC
CHEMED CORP
CHEMICAL FINL CORP
CHESAPEAKE CORP VA
CHESAPEAKE ENERGY CO
CHICAGO MINIATURE LA
CHIQUITA BRANDS INTL
CHITTENDEN CORP
CHURCH & DWIGHT INC
CHYRON CORP
CIDCO INC
CILCORP INC
CIRCLE K CORP DEL
CIRCON CORP
CITICASTERS INC
CITIZENS BANCORP MD
CITIZENS BKG CORP MI
CITIZENS CORP
CITY NATL CORP
CKE RESTAURANTS INC
CLAIRES STORES INC
CLARCOR INC
CLEVELAND CLIFFS INC
CMAC INVT CORP
CMG INFORMATION SVCS
CML GROUP INC
CNB BANCSHARES INC
CNS INC
COAST SVGS FINL INC
COASTAL PHYSICIAN GRP
COBRA GOLF INC
COCA COLA BOTTLNG CO
COEUR D ALENE MINES
COHERENT COMMUNICATION
COHERENT INC
COLE KENNETH PRODTNS
COLE TAYLOR FINL GROUP
COLLECTIVE FED SVGS&LOAN
COLLINS & AIKMAN CORP
COLONIAL BANCGROUP INC
B-3
<PAGE> 59
COLONIAL DATA TECHNOLOGIES
COLTEC INDS INC
COMAIR CORP
COMMERCE GROUP INC MA
COMMERCIAL FEDERAL CORP
COMMERCIAL INTERTECH
COMMERCIAL METALS CO
COMMNET CELLULAR INC
COMMONWEALTH ENERGY
COMMUNITY FIRST BANK
COMMUNITY HEALTH SYSTEMS
COMMUNITY PSYCHIATRIC CNTRS
COMPDENT CORP
COMPUSA INC
COMPUTER HORIZONS CO
COMPUTER PRODS INC
COMPUWARE CORP
COMSHARE INC
COMVERSE TECHNOLOGY
CONE MLS CORP N C
CONMED CORP
CONTINUUM INC
CONTROL DATA SYSTEMS
COORS ADOLPH CO
COPART INC
COPLEY PHARMACEUTICAL
COPYTELE INC
COVENTRY CORP
CRAIG JENNY INC
CRAWFORD & CO
CRAWFORD & CO
CRAY RESH INC
CREDENCE SYS CORP
CROMPTON & KNOWLES
CROSS A T CO
CROSS TIMBERS OIL CO
CULLEN FROST BANKERS
CURTISS WRIGHT CORP
CYGNUS INC
CYRIX CORP
DAIG CORP
DALLAS SEMICONDUCTOR
DAMES & MOORE INC
DATA BROADCASTING CO
DATA GEN CORP
DATASCOPE CORP
DAVIDSON & ASSOC INC
DELPHI FINL GROUP INC
DELTA & PINE LD CO
DEPARTMENT 56 INC
DESTEC ENERGY INC
DETROIT DIESEL CORP
DEVON ENERGY CORP
DEVRY INC DEL
DEXTER CORP
DIAGNOSTIC PRODS CP
DIAL PAGE INC
DIALOGIC CORP
DIAMOND SHAMROCK R&M
DIGI INTL INC
DIMON INC
DIONEX CORP
DISCOUNT AUTO PTS INC
DOLLAR TREE STORES INC
DONALDSON INC
DONNKENNY INC DEL
DOUBLETREE CORP
DOVATRON INTL INC
DOWNEY FINL CORP
DREYERS GRAND ICE CR
DSP COMMUNICATIONS INC
DURIRON INC
DUTY FREE INTL INC
DYNATECH CORP
EASTERN ENTERPRISES
EASTERN UTILS ASSOC
EATON VANCE CORP
ECHOSTAR COMMUNICATION
ELECTRO RENT CORP
ELECTRO SCIENTIFIC
B-4
<PAGE> 60
ELECTROGLAS INC
EMMIS BROADCASTING CO
EMPIRE DIST ELEC CO
ENERGEN CORP
ENERGY VENTURES INC
ENHANCE FINL SVCS GRP
ENZO BIOCHEM INC
EPIC DESIGN TECHNOLO
ETHAN ALLEN INTERIOR
EVERGREEN MEDIA CORP
EXABYTE CORP
EXCALIBUR TECHNOLOGIES
EXECUTIVE RISK INC
EXPEDITORS INTL WASH
EXPRESS SCRIPTS INC
F & M NATL CORP
FABRI CTRS AMER INC
FAIR ISAAC & CO INC
FALCON DRILLING INC
FAMILY DLR STORES INC
FARMER BROS CO
FEDERAL MOGUL CORP
FERRO CORP
FILENET CORP
FINANCIAL SEC ASSURN
FINGERHUT COS INC
FIRST AMERN FINL COR
FIRST CITIZENS BANCSHARES
FIRST COML CORP
FIRST COMMERCE BANCSHARES
FIRST COMWLTH FINL PA
FIRST FINL BANCORP
FIRST FINL CORP WIS
FIRST MICH BK CORP
FIRST MIDWEST BANCORP
FIRST MISS CORP
FIRST NATL BANCORP
FIRSTBANK ILL CO
FIRSTIER INC
FIRSTMISS GOLD INC
FISHER SCIENTIFIC INTL
FLEMING COS INC
FLORIDA EAST COAST R
FLORIDA ROCK INDS INDUSTRIES
FLOWERS INDS INC
FLUKE JOHN MFG INC
FMC GOLD CO
FOREMOST CORP OF AMERICA
FOREST CITY ENTERPRISES
FOXMEYER HEALTH CORP
FRANKLIN QUEST CO
FREMONT GEN CORP
FRESENIUS USA INC
FRONTIER INS GROUP INC
FSI INTL INC
FT WAYNE NATL CORP INC
FTP SOFTWARE INC
FULLER H B CO
FULTON FINL CORP PA
FUND AMERICAN COS IN
G & K SVCS INC
GAINSCO INC
GALLAGHER ARTHUR J & CO
GAYLORD CONTAINER CO
GC COS INC
GENCORP INC
GENERAL BINDING CORP
GENERAL DATACOMM IND
GENERAL MAGIC INC
GENESIS HEALTH VENTURES
GENTEX CORP
GEON CO
GEOTEK INDS INC
GEOWORKS
GERBER SCIENTIFIC INC
GIBSON GREETINGS INC
GIDDINGS&LEWIS INC WI
GILEAD SCIENCES INC
GLATFELTER P H CO
GLENDALE FED SVGS & LOAN
B-5
<PAGE> 61
GLOBAL INDL TECHNOLOGIES
GLOBAL NAT RES INC
GLOBAL VILLAGE COMMUNICATN
GOULDS PUMPS INC
GRACO INC
GRANCARE INC
GRANITE CONSTR INC
GRC INTERNATIONAL INC
GREAT FINL CORP
GREENFIELD INDS INC
GREIF BROS CORP
GREYHOUND LINES INC
GRIFFON CORP
GUILFORD MLS INC
GULF SOUTH MEDICAL SUPPLY
GYMBOREE CORP
HADCO CORP
HAEMONETICS CORP
HANCOCK HLDG CO
HARLAND JOHN H CO
HARLEYSVILLE GROUP INC
HARMAN INTL INDS INC
HARPER GROUP
HARTE-HANKS COMMUNICATIONS
HAYES WHEELS INTL INC
HCC INS HLDGS INC
HCIA INC
HEALTH MGMT SYS INC
HEALTHPLAN SVCS CORP
HEARTLAND EXPRESS IN
HEARTLAND WIRELESS COMM
HECLA MNG CO
HELENE CURTIS INDS
HELIX TECHNOLOGY CORP
HELMERICH & PAYNE INC
HENRY JACK & ASSOC INC
HERBALIFE INTL INC
HERITAGE MEDIA CORP
HNC SOFTWARE INC
HOLLYWOOD ENTMT CORP
HOME BEN CORP
HOME FINL CORP DEL H
HOME SHOPPING NETWORK
HON INDS INC
HORACE MANN EDUCATOR
HOUGHTON MIFFLIN CO
HUBCO INC
HUDSON FOODS INC
HUMAN GENOME SCIENCE
HUNT JB TRANS SVC INC
HUNT MFG CO
HYPERION SOFTWARE CO
I-STAT CORP
ICN PHARMACEUTICALS
IDEON GROUP INC
IDEX CORP
IES INDS INC
IHOP CORP
IMCO RECYCLING INC
IMMULOGIC PHARMACEUTICALS
IMMUNEX CORP NEW
IMPERIAL BANCORP
IN FOCUS SYS INC
INDENTIX INC
INDIANA ENERGY INC
INFORMATION RES INC
INPHYNET MEDICAL MGMT
INSIGNIA FINL GROUP
INSILCO CORP
INSITUFORM TECHNOLOGIES
INSO CORP
INTEGON CORP
INTEGRATED HEALTH SVCS
INTEGRATED PROCESS E
INTEGRATED SILICON S
INTEGRATED SYS INC
INTER REGL FINL GROUP
INTERCO INC NEW
INTERDIGITAL COMMUNICATIONS
INTERFACE FLOORING
B-6
<PAGE> 62
INTERGRAPH CORP
INTERIM SVCS INC
INTERMAGNETICS GEN
INTERMET CORP
INTERNATIONAL DAIRY
INTERNATIONAL FAMILY
INTERNATIONAL MULTIF
INTERNEURON PHARMACEUTICALS
INTERPOOL INC
INTERSOLV
INTERSTATE BAKERIES
INTERSTATE PWR CO
INTERVOICE INC
INTL CABLETEL INC
INVACARE CORP
IONICS INC
ISIS PHARMACEUTICALS
ISOLYSER INC
ITI TECHNOLOGIES INC
ITRON INC
ITT EDUCATIONAL SERV
J&L SPECIALTY STL INC
JACOBS ENGR GROUP INC
JACOR COMMUNICATIONS
JEFFERSON BANKSHARES
JLG INDS INC
JOHN ALDEN FINL CORP
JP FOODSERVICE INC
JSB FINANCIAL INC
JUNO LTG INC
JUST FOR FEET INC
JUSTIN INDS INC
K N ENERGY INC
KANSAS CITY LIFE INS
KATZ MEDIA GROUP INC
KAUFMAN&BROAD HOME CORP
KAYDON CORP
KEANE ASSOC INC
KELLWOOD CO
KENNAMETAL INC
KENT ELECTRS CORP
KEYSTONE FINANCIAL INC
KEYSTONE INTL INC
KIMBALL INTL INC
KINDER-CARE LEARN CT
KINETIC CONCEPTS INC
KIRBY EXPL CO.
KRONOS INC
KULICKE & SOFFA INDS
LA Z BOY CHAIR CO
LACLEDE GAS CO
LANCE INC
LANDMARK GRAPHICS CO
LANDRYS SEAFOOD RESTAURANTS
LANDS END INC
LANDSTAR SYS INC
LATTICE SEMICONDUCTOR
LAWSON PRODS INC
LAWTER CHEMS INC
LEADER FINL CORP
LEGATO SYS INC
LEGG MASON INC
LIBBEY INC
LIBERTY BANCORP INC
LIBERTY CORP S C
LIFE PARTNERS GROUP
LIFE RE CORP
LIFE TECHNOLOGIES INC
LIGAND PHARMACEUTICALS
LILLY INDL COATINGS
LINCARE HLDGS INC
LINCOLN ELEC CO
LINCOLN ELEC CO
LINCOLN TELECOMMUNICATIONS
LIPOSOME CO INC
LITTELFUSE INC
LIVING CTRS AMER INC
LOGICON INC
LONE STAR INDS INC
LONG IS BANCORP INC
B-7
<PAGE> 63
LONGVIEW FIBRE CO
LOUIS DREYFUS NAT GA
LTX CORP
LUBYS CAFETERIAS INC
LUKENS STL CO
LYDALL INC
M S CARRIERS INC
MACFRUGALS BARGAINS
MADISON GAS & ELEC
MAFCO CONS GROUP INC
MAGELLAN HEALTH SVCS
MAGNA GROUP INC
MAIC HLDGS INC
MARCUS CORP
MARINER HEALTH GROUP
MARK TWAIN BANCSHARES
MARKEL CORP
MARSHALL INDS
MASCOTECH INC
MAXICARE HEALTH PLAN
MAXIS INC
MAXXAM INC
MAYBELLINE INC
MCAFEE ASSOCS INC
MCCLATCHY NEWSPAPERS
MDU RESOURCES GROUP
MEASUREX CORP
MEDIA GEN INC
MEDIC COMPUTER SYS INC
MEDIMMUNE INC
MEDISENSE INC
MEDPARTNERS/MULLIKIN
MEDUSA CORP
MENS WEARHOUSE INC
MENTOR CORP MINN
MERCURY INTERACTIVE
MESA AIRLS INC
METHODE ELECTRS INC
METROMEDIA INTL GROUP
MEYER FRED INC DEL
MICHAEL'S STORES INC
MICROCOM INC
MICROS SYS INC
MID-AMERICAN NTL BK
MIDCOM COMMUNICATION
MIKASA INC
MILLER HERMAN INC
MINE SAFETY APPLIANC
MINERALS TECHNOLOGIES
MISSISSIPPI CHEM CORP
MOBILEMEDIA CORP
MODINE MFG CO
MOHAWK INDS INC
MOLTEN METAL TECHNOLOGY
MONEY STORE INC
MORGAN KEEGAN INC
MORRISON RESTAURANTS
MOVIE GALLERY INC
MUELLER INDS INC
MULTICARE COS INC
MYCOGEN CORP
MYERS INDS INC
NAC RE CORP
NACCO INDS INC
NATIONAL AUTO CR INC
NATIONAL BANCORP ALA
NATIONAL COMM BANCORP
NATIONAL COMPUTER SYSTEMS
NATIONAL DATA CORP
NATIONAL ED CORP
NATIONAL INSTRS CORP
NATIONAL MEDIA CORP
NATIONAL PRESTO INDS
NATIONAL STL CORP
NATL RE HOLDING CORP
NATURES SUNSHINE PRO
NAVISTAR INTL CORP N
NCH CORP
NEOPROBE CORP
NETCOM ON-LINE COMM
B-8
<PAGE> 64
NETWORK EQUIP TECHNOLOGIES
NETWORK GEN CORP
NEUROGEN CORP
NEW ENG BUSINESS SVC
NEW JERSEY RESOURCES CORP
NEW WORLD COMMUNICATIONS
NEW YORK BANCORP INC
NEWFIELD EXPL CO
NEXGEN INC
NEXSTAR PHARMACEUTICALS
NL INDS INC
NN BALL & ROLLER INC
NORRELL CORP GA
NORTH AMERN MTG CO
NORTH AMERN VACCINE
NORTH FORK BANCORP
NORTHWEST NAT GAS CO
NORTHWESTERN PUB SVC
NOVACARE CORP
NU-KOTE HLDG INC
NUEVO ENERGY CO
O REILLY AUTOMOTIVE
OAK INDS INC
OAK TECHNOLOGY INC
OCCUSYSTEMS INC
OCTEL COMMUNICATIONS
OEA INC
OFFSHORE LOGISTICS
OIS OPTICAL IMAGING
OLD NATL BANCP IND
OLYMPIC FINL LTD
OM GROUP INC
ONBANCORP INC
ONE VY BANCORP WV INC
ONEOK INC
OPTICAL DATA SYS INC
ORANGE & ROCKLAND UT
ORBITAL SCIENCES CORP
OREGON STL MLS INC
ORGANOGENESIS INC
ORION CAP CORP
ORTHODONTIC CTRS AME
OSMONICS INC
OTTER TAIL PWR CO
OUTBOARD MARINE CORP
OUTLET COMMUNICATION
OVERSEAS SHIPHOLDNG
OWEN HEALTHCARE INC
OWENS & MINOR INC NE
P-COM INC
PACIFIC SCIENTIFIC
PAIRGAIN TECHNOLOGIES
PAPA JOHNS INTL INC
PARAGON TRADE BRANDS
PARK ELECTROCHEMICAL
PARK NATL CORP
PARKER & PARSLEY PET
PARKER DRILLING CO
PATTERSON DENTAL CO
PAXAR CORP
PAXSON COMMUNICATION
PDT INC
PEAK TECHNOLOGIES GRP
PENNCORP FINL GROUP
PEOPLES BK BRIDGEPORT
PEOPLES HERITGE SV B
PETCO ANIMAL SUPPLIES
PETROLITE CORP
PHH GROUP INC
PHILADELPHIA SUBN CO
PHILLIPS VAN HEUSEN
PHOENIX RESOURCE COS
PHOTRONIC LABS INC
PHP HEALTHCARE CORP
PHYSICIAN COMPUTER N
PHYSICIAN CORP AMERICA
PHYSICIAN RELIANCE NETWORK
PHYSICIANS HEALTH SVCS
PIEDMONT NAT GAS INC
PIER I IMPORTS INC
B-9
<PAGE> 65
PIONEER GROUP INC
PIONEER STD ELECTRS
PLANTRONICS INC NEW
PLAYERS INTL INC
PLAYTEX PRODS INC
PLC SYS INC
PMT SERVICES INC
POLARIS INDS INC
PRECISION CASTPARTS
PRESIDENTIAL LIFE CO
PRI AUTOMATION INC
PRICE ENTERPRISES INC
PRIDE PETE SVCS INC
PRIMADONNA RESORTS INC
PRIMARK CORP
PRIME HOSPITALITY CO
PRODUCTION OPERATORS
PROFFITTS INC
PROGRESS SOFTWARE CO
PROTEIN DESIGN LABS
PROVIDENT BANCORP INC
PSINET INC
PUBLIC SVC CO N C INC
PUBLIC SVC CO N MEX
PULITZER PUBG CO
PYXIS CORP
QUAKER ST CORP
QUALITY FOOD CTRS INC
QUANEX CORP
QUARTERDECK OFFICE SVCS
QUEENS CNTY BANCORP
QUICK & REILLY GROUP
RALCORP HLDGS INC
RATIONAL SOFTWARE CO
RAYMOND JAMES FINL INC
RCSB FINL INC
REGAL BELOIT CORP
REGAL CINEMAS INC
REGENERON PHARMACEUTICALS
REGIS CORP MINN
REINSURANCE GROUP AMERICA
RENAISSANCE COMM
RENAL TREATMENT CTRS
RESEARCH INDS CORP
RESPIRONICS INC
REXALL SUNDOWN INC
REXEL INC
RICHFOOD HLDGS INC
RIGS NATL CORP WASH
RIO HOTEL & CASINO INC
RIVER FOREST BANCORP
ROBERTS PHARMACEUTICAL
ROBOTIC VISION SYS
ROCK-TENN CO
ROHR INDS INC
ROLLINS INC
ROLLINS TRUCK LEASING
ROOSEVELT FINL GROUP
ROPER INDS INC NEW
ROSS STORES INC
ROTECH MED CORP
ROUGE STL CO
ROWAN COS INC
RUDDICK CORP
RUSS BERRIE & CO
RYANS FAMILY STK HSE
RYKOFF S E & CO
S & T BANCORP INC
S3 INC
SAFEGUARD SCIENTIFIC
SALICK HEALTH CARE INC
SANIFILL INC
SANMINA CORP
SAVANNAH FOODS & IND
SBARRO INC
SCHULMAN A INC
SCIENTIFIC GAMES HLD
SCOTTS CO
SEABOARD CORP
SEAGULL ENERGY CORP
B-10
<PAGE> 66
SECURITY CAP CORP WI
SECURITY DYNAMICS TECH
SEI CORP
SEITEL INC
SELECTIVE INS GROUP
SEPRACOR INC
SEQUA CORP
SEQUENT COMPUTER SYS
SEQUUS PHARMECEUTICALS
SERVICE MERCHANDISE
SFFED CORP
SHONEYS INC
SHOPKO STORES INC
SHOREWOOD PACKAGING
SHOWBOAT INC
SHURGARD STORAGE CTR
SIERRA HEALTH SVCS INC
SIERRA ON-LINE INC
SIERRA PAC RES
SIGCORP INC
SILICON VY GROUP INC
SILICONIX INC
SILVER KING COMMUNICATION
SITHE ENERGIES INC
SMART & FINAL INC
SMITH A O CORP 'B'
SMITHFIELD FOODS INC
SMITHS FOOD&DRUG CTR
SMUCKER J M CO
SMUCKER J M CO
SNYDER OIL CORP
SOFAMOR/DANEK GROUP
SOFTKEY INTL INC
SOLA INTL INC
SOLV EX CORP
SOMATOGEN INC
SONIC CORP
SOTHEBYS HLDGS INC
SOUTH JERSEY INDS INC
SOUTHDOWN INC
SOUTHERN UN CO NEW
SOUTHWEST GAS CORP
SOUTHWESTERN ENERGY
SOVEREIGN BANCORP INC
SPACELABS MED INC
SPEEDWAY MOTORSPORTS
SPIEGEL INC
SPORTS AUTH INC
SPRINGS INDS INC
SPS TECHNOLOGIES INC
SPS TRANSACTION SVCS
ST JOHN KNITS INC
ST PAUL BANCORP INC
STAC ELECTRS
STANDARD FINL INC
STANDARD PRODS CO
STANDARD REGISTER CO
STANDEX INTL CORP
STANHOME INC
STATE AUTO FINL CORP
STATION CASINOS INC
STEIN MART INC
STERIS CORP
STERLING CHEMS INC
STEWART&STEVENSON SVCS INC
STILLWATER MNG CO
STONE & WEBSTER INC
STRATOSPHERE CORP
STRATUS COMPUTER INC
STRAWBRIDGE & CLOTHIER
STRIDE RITE CORP
STUDENT LN CORP
STURM RUGER & CO INC
SUMITOMO BANK CALIF
SUN HEALTHCARE GROUP
SUNRISE MED INC
SUNSHINE MNG CO
SUPERIOR INDS INTL
SUSQUEHANNA BKSHS PA
SWIFT TRANSN CO
B-11
<PAGE> 67
SYNETIC INC
SYSTEMS & COMPTR TECH
T R FINL CORP
TARGET THERAPEUTICS
TCA CABLE TV INC
TECH DATA CORP
TECNOL MED PRODS INC
TEJAS GAS CORP DEL
TELEFLEX INC
TELXON CORP
TENCOR INSTRS
TEXAS INDS INC
THERMO ECOTEK CORP
THIOKOL CORPDEL
TIFFANY & CO NEW
TITAN WHEEL INTL INC
TJ INTL INC
TNT FREIGHTWAYS CORP
TOLL BROTHERS INC
TOM BROWN INC NEW
TOPPS INC
TORO CO
TOY BIZ INC
TRANS WORLD AIRLS INC
TRANSACTION SYS ARCH
TREDEGAR INDS INC
TRENWICK GROUP INC
TRIANGLE PAC CORP DE
TRIARC COS INC
TRIDENT MICROSYSTEMS
TRIMAS CORP
TRIMBLE NAVIGATION L
TRINOVA CORP
TRUE NORTH COMMUNICATIONS
TRUST CO NJ JERSEY C
TRUSTCO BK CORP N Y
TRUSTMARK CORP
TUCSON ELEC & POWER
U S AIR GROUP INC
U S DELIVERY SYS INC
U S HOME CORP NEW
U S TR CORP NEW
UGI CORP NEW
ULTRATECH STEPPER INC
UMB FINL CORP
UNIFIRST CORP
UNITED BANKSHS INC WVA
UNITED CAROLINA BANCSHARES
UNITED COS FINL CORP
UNITED DENTAL CARE I
UNITED ILLUM CO
UNITED INS COS INC
UNITED INTL HLDGS INC
UNITED MERIDIAN CORP
UNITED STATES FILTER
UNITED STATIONERS INC
UNITED WASTE SYS INC
UNITED WIS SVCS INC
UNITED WTR RES INC
UNITRODE CORP
UNIVERSAL HEALTH SVC
UNR INDS INC
US ORDER INC
UST CORP
VALASSIS COMMUNICATIONS
VALHI INC NEW
VALMONT INDS INC
VALUE LINE INC
VANGUARD CELLULAR SYS INC
VARCO INTL INC
VENTRITEX INC
VERIFONE INC
VERITAS SOFTWARE CO
VERTEX PHARMACEUTICALS
VESTA INS GROUP INC
VICOR CORP
VICTORIA BANKSHARES
VIDEOSERVER INC
VINTAGE PETE INC
VISX INC DEL
B-12
<PAGE> 68
VITAL SIGNS INC
VITALINK PHARMACY SVCS
VIVUS INC
VLSI TECHNOLOGY
VOLT INFORMATION SCI
WABAN INC
WABASH NATL CORP
WANG LABS INC NEW
WASHINGTON ENERGY CO
WASHINGTON NATL CORP
WATKINS JOHNSON CO
WATTS INDS INC
WAUSAU PAPER MLS CO
WD 40 CO
WEBB DEL E CORP
WELLMAN INC
WERNER ENTERPRISES INC
WEST INC
WESTAMERICA BANCORP
WESTCORP
WESTCOTT COMMUNICATN
WESTERN GAS RES INC
WESTERN WASTE INDS
WESTINGHOUSE AIR BRAKE
WESTPOINT STEVENS INC
WESTWOOD ONE INC
WFS FINL INC
WHITNEY HLDG CORP
WHX CORP
WICOR INC
WILEY JOHN & SONS INC
WILLIAMS SONOMA INC
WIND RIVER SYSTEMS
WLR FOODS INC
WMS INDUSTRIES INC
WOLVERINE TUBE INC
WOLVERINE WORLD WIDE
WPS RESOURCES CORP
WYLE LABS
WYMAN GORDON CO
X-RITE INC
XTRA INC
YANKEE ENERGY SYS INC
YELLOW CORP
ZALE CORP NEW
ZEBRA TECHNOLOGIES CORP
ZEIGLER COAL HLDG CO
ZENITH ELECTRS CORP
ZENITH NATL INS CORP
ZERO CORP
ZILOG INC
ZURN INDS INC
THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE AN OFFERING BY THE
TRUST, ANY SERIES THEREOF, OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE.
B-13
<PAGE> 69
SchwabFunds(R) 1
- --------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND(TM)
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
COMMON STOCK--97.3%
AUSTRALIA--2.4%
Australia & New Zealand
Banking Group 53,322 $ 223
BTR Nylex, Ltd. 116,332 316
Broken Hill Proprietary Co.,
Ltd. 83,813 1,135
CRA 27,600 426
Coles Myer, Ltd. 51,855 179
Commonwealth Bank Group 41,124 313
National Australia Bank 63,258 542
News Corp., Ltd. 91,896 463
Western Mining Corp. 53,600 344
Westpac Banking Corp. 79,986 328
--------
4,269
--------
BELGIUM--0.6%
Electrabel 2,000 449
Electrabel, AFV1 500 114
Petrofina SA 1,100 341
Societe Generale de Belgique 3,040 230
--------
1,134
--------
CANADA--3.0%
Alcan Aluminum 10,050 322
BCE Inc. 14,279 481
Bank of Montreal 11,886 268
Bank of Nova Scotia 8,524 184
Barrick Gold Corp. 16,500 385
Canadian Imperial Bank of
Commerce 9,595 260
Canadian Pacific Ltd. 16,700 266
Imperial Oil Ltd. 8,919 327
Newbridge Networks Corp.* 3,300 101
Northern Telecom Ltd. 12,000 433
Nova Corp. 19,200 149
PanCanadian Petroleum Ltd. 5,000 168
Placer Dome Inc. 21,200 467
Royal Bank of Canada 15,200 342
Seagram Co. Ltd. 17,400 633
Thomson Corp. 27,100 367
Toronto-Dominion Bank 14,000 248
--------
5,401
--------
DENMARK--0.4%
D/S 1912 Series B 10 196
D/S Svendborg Series B 5 140
Tele Danmark AS Series B 5,910 308
--------
644
--------
FRANCE--7.2%
AXA Groupe SA 13,366 742
Alcatel Alsthom Cie Generale
d'Electricite SA 6,954 594
Alcatel Cable 1,723 100
Assurances Generales de
France 15,800 456
Banque Nationale de Paris 10,161 418
Canal Plus 819 142
Carrefour 1,200 705
Cie Financiere de Paribas
(Bearer) 5,425 298
Cie Generale des Eaux 5,221 485
Compagnie de Saint-Gobain SA 3,931 469
Danone Groupe 3,350 535
Elf Aquitaine 12,835 874
L'Air Liquide 3,073 515
L'Oreal SA 2,900 709
LVMH Moet Hennessy Louis
Vuitton 7,100 1,413
Lafarge Coppee SA 8,596 570
Lyonnaise des Eaux-Dumez 2,780 271
Michelin Class B (Reg.) 5,300 214
PSA Peugeot Citroen 2,200 287
Renault (Regie Nationale) 10,500 329
Rhone-Poulenc SA A Shares 15,400 336
Sanofi 4,510 288
Schneider SA 8,900 343
Societe Generale 3,978 456
Suez Group 7,455 281
TOTAL Class B 10,604 655
Union des Assurances de Paris 14,389 374
--------
12,859
--------
GERMANY--8.1%
BASF Group 2,653 582
Bankgesellschaft Berlin 1,206 356
Bayer AG 3,167 842
Bayerische Hypotheken &
Wechsel Bank AG 11,380 275
Bayerische Motoren Werke AG 910 488
Bayerische Vereinsbank AG 11,590 328
Commerzbank AG 1,535 355
Daimler-Benz AG 2,721 1,312
Deutsche Bank AG 21,400 968
Dresdner Bank AG 20,130 538
Hoechst AG 2,762 725
Linde AG 400 246
Lufthansa AG (Bearer) 1,600 223
Mannesmann AG 1,734 571
Muenchener Rueckversicherung 11 19
Muenchener Rueckversicherung
(Reg.) 744 1,544
Preussag AG 721 205
RWE AG 1,581 563
SAP AG 2,840 450
Schering AG 3,500 244
Siemens AG 2,610 1,368
Thyssen AG 1,411 254
VIAG AG 970 394
Veba AG 22,470 923
Vereinigte Elektrizitatswerke
Westfalen Series B 903 300
Volkswagen AG 1,246 393
--------
14,466
--------
HONG KONG--3.7%
CITIC Pacific 98,000 306
Cathay Pacific Airways 141,000 208
Cheung Kong Holdings 50,000 282
China Light & Power 94,900 506
Hang Seng Bank Ltd. 88,900 745
Henderson Land
Development Co. 76,000 455
Hongkong Electric Holdings
Ltd. 99,000 337
Hongkong Telecom
International 520,000 908
Hutchison Whampoa Ltd. 165,000 909
New World Development Co. 69,709 271
Sun Hung Kai Properties 107,500 859
Swire Pacific Ltd. Class A 75,500 566
Wharf Holdings 101,000 341
--------
6,693
--------
</TABLE>
See accompanying Notes to Financial Statements.
F-1
<PAGE> 70
SchwabFunds(R) 2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
ITALY--2.3%
Alleanza Assicurazioni 22,500 $ 192
Alleanza Assicurazioni
(Non-Convertible) 3,750 26
Assicurazioni Generali 37,200 867
Banco di Roma SpA 141,900 127
Fiat Finance SpA 113,000 368
Fiat Finance SpA
(Non-Convertible) 42,000 79
First Bank San Paolo di
Torino 27,700 153
IMI 24,800 136
INA 201,000 264
Montedison SpA 213,000 147
RAS Assicurazioni 6,310 63
RAS Assicurazioni
(Non-Convertible) 2,790 15
STET 177,000 501
STET (Non-Convertible) 66,000 144
Telecom Italia 260,000 395
Telecom Italia
(Non-Convertible) 65,000 77
Telecom Italia Mob* 260,000 436
Telecom Italia Mob di Risp* 65,000 72
--------
4,062
--------
JAPAN--30.4%
Ajinomoto Co., Inc. 14,000 138
All Nippon Airways Co., Ltd. 31,000 300
Asahi Bank 48,000 479
Asahi Breweries 8,000 87
Asahi Chemical Industry Co. 28,000 197
Asahi Glass Co., Ltd. 24,000 235
Ashikaga Bank 15,000 89
Bank of Fukuoka 11,000 81
Bank of Tokyo 58,000 845
Bank of Yokohama 24,000 170
Bridgestone Corp. 15,000 208
Canon Inc. 18,000 308
Chiba Bank 16,000 133
Chubu Electric Power Co. 16,100 375
Chugoku Electric Power
Co., Inc. 7,854 183
Cosmo Oil Co. 11,000 54
DDI Corp. 100 810
Dai Nippon Printing Co. 15,000 239
Dai-Ichi Kangyo Bank, Ltd. 97,000 1,640
Daiei Inc. 14,000 146
Daiichi Pharmaceutical Co. 5,000 70
Daiwa Bank 33,000 197
Daiwa House Industry Co. 11,000 165
Daiwa Securities Co. 29,000 340
East Japan Railway Co. 100 472
Ebara Corp. 5,000 69
Eisai Co. 5,000 85
Fanuc 5,000 217
Fuji Bank, Ltd. 93,000 1,727
Fuji Photo Film Co. 11,000 272
Fujitsu Ltd. 38,000 453
Furukawa Electric Co., Ltd. 13,000 58
Gunma Bank 10,000 102
Hachijuni Bank 13,000 145
Hankyu Corp. 17,000 88
Hanwa Co. 5,000 15
Hiroshima Bank 13,000 64
Hitachi Ltd. 96,000 985
Hitachi Zosen 19,000 93
Hokkaido Electric Power Co. 4,080 95
Hokkaido Takushoku Bank 12,000 30
Hokuriku Bank 13,000 76
Hokuriku Electric Power Co. 4,080 94
Honda Motor Co., Ltd. 20,000 348
Industrial Bank of Japan,
Ltd. 76,000 2,073
Ishikawajima-Harima Heavy
Industries 25,000 101
Isuzu Motors Ltd. 20,000 81
Ito-Yokado Co., Ltd. 9,000 492
Itochu Corp. 28,000 166
Japan Airlines Co., Ltd. 35,000 210
Japan Energy Co. 21,000 60
Japan Telecom Co. 10 222
Japan Tobacco Inc. 100 854
Joyo Bank 18,000 129
Jusco Co. 6,000 141
Kajima Corp. 20,000 185
Kandenko Co., Ltd. 5,000 62
Kansai Electric Power Co. 20,200 474
Kao Corp. 12,000 145
Kawasaki Heavy Industries 25,000 105
Kawasaki Steel Co. 72,000 239
Keio Teito Railway Co. 8,000 45
Kinden Co. 3,000 52
Kinki Nippon Railway Co. 35,000 270
Kirin Brewery Co., Ltd. 22,000 222
Kobe Steel 59,000 155
Kokusai Denki 1,500 121
Komatsu Ltd. 22,000 172
Kubota Corp. 27,000 167
Kyocera Corp. 4,000 328
Kyowa Hakko Kogyo 6,000 56
Kyushu Electric Power Co. 9,797 232
Kyushu Matsushita Electric
Co. 3,000 48
Long-Term Credit Bank of
Japan 52,000 406
Marubeni Corp. 34,000 166
Marui Co. 7,000 121
Matsushita Communication
Industrial 4,000 90
Matsushita Electric
Industrial Co., Ltd. 61,000 865
Matsushita Electric Works 15,000 148
Matsushita-Kotokuki
Electronics 3,000 61
Mazda Motor Corp. 21,000 66
Mitsubishi Bank 82,000 1,603
Mitsubishi Chemical Corp. 34,000 154
Mitsubishi Corp. 33,000 365
Mitsubishi Electric Corp. 43,000 321
Mitsubishi Estate Co. 28,000 298
Mitsubishi Heavy Industries 71,000 548
Mitsubishi Materials Co. 21,000 95
Mitsubishi Motors 17,000 142
Mitsubishi Oil Co. 8,000 64
Mitsubishi Trust & Banking
Corp. 27,000 377
Mitsui & Co. 34,000 271
Mitsui Fudosan Co. 16,000 183
Mitsui Marine & Fire
Insurance 14,000 84
Mitsui O.S.K. Lines 14,000 37
Mitsui Trust & Banking Co. 25,000 200
Mitsukoshi Ltd. 9,000 71
Murata Manufacturing Co. 5,000 175
NEC Corp. 34,000 449
NGK Insulators 5,000 46
</TABLE>
See accompanying Notes to Financial Statements.
F-2
<PAGE> 71
SchwabFunds(R) 3
- --------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND(TM)
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
NKK Corp. 67,000 $ 162
Nagoya Railroad Co. 10,000 47
New Oji Paper Co. 16,000 147
Nichii Co. 4,000 47
Nikko Securities Co. 29,000 270
Nikon Corp. 11,000 157
Nintendo Co., Ltd. 3,000 221
Nippon Credit Bank 34,000 133
Nippon Express Co. 21,000 170
Nippon Fire & Marine
Insurance Co. 7,000 38
Nippon Oil Co. 26,000 138
Nippon Paper Industries Co. 39,000 268
Nippon Steel Corp. 145,000 481
Nippon Telegraph &
Telephone Corp. 596 4,888
Nippon Yusen Kabushiki Kaisha 27,000 144
Nippondenso 17,000 311
Nissan Motor Co., Ltd. 54,000 364
Nisshin Steel Co. 20,000 74
Nomura Securities Co., Ltd. 51,000 932
Obayashi Corp. 17,000 126
Odakyu Electric Railway Co. 14,000 94
Oki Electric Industry Co.,
Ltd. 12,000 111
Omron Corp. 8,000 187
Ono Pharmaceutical Co. 3,000 119
Osaka Gas Co. 53,000 178
Pioneer Electronic Corp. 4,000 61
Ricoh Co., Ltd. 13,000 140
Rohm Co. 4,000 243
SEGA Enterprises, Ltd. 2,000 106
Sakura Bank 86,000 832
Sankyo Co. 7,000 154
Sanwa Bank 92,000 1,565
Sanyo Electric Co., Ltd. 40,000 207
Secom Co. 3,000 195
Seibu Railway Co. 11,000 484
Sekisui Chemical Co. 11,000 143
Sekisui House 14,000 161
Seven-Eleven Japan Co. 7,000 467
Sharp Corp. 22,000 305
Shikoku Electric Power Co. 6,222 145
Shimizu Corp. 17,000 158
Shin-Etsu Chemical Co. 6,000 123
Shiseido Co., Ltd. 8,000 81
Shizuoka Bank 16,000 189
Showa Shell Sekiyu 8,000 64
Sony Corp. 8,000 360
Sony Music Entertainment
(Japan) 2,100 90
Sumitomo Bank 90,000 1,592
Sumitomo Chemical Co. 35,000 163
Sumitomo Corp. 21,000 191
Sumitomo Electric Industries 15,000 173
Sumitomo Marine & Fire
Insurance Co. 13,000 93
Sumitomo Metal Industries 60,000 162
Sumitomo Metal Mining Co. 11,000 87
Sumitomo Trust & Banking Co. 25,000 288
Suzuki Motor Corp. 10,000 101
TDK 3,000 155
Taisei Corp. 19,000 113
Taisho Pharmaceutical Co. 8,000 145
Takeda Chemical Industries 17,000 239
Teijin Ltd. 19,000 87
Tobu Railway Co. 16,000 91
Tohoku Electric Power Co. 10,100 237
Tokai Bank 42,000 439
Tokio Marine & Fire
Insurance Co. 33,000 339
Tokyo Electric Power Co.,
Inc. 39,087 1,024
Tokyo Electron 3,000 130
Tokyo Gas & Electric
Industrial 57,000 201
Tokyu Corp. 23,000 146
Tonen 13,000 184
Toppan Printing Co. 15,000 198
Toray Industries 29,000 181
Toshiba Corp. 68,000 493
Tostem Corp. 5,000 153
Toto 8,000 108
Toyo Seikan 4,000 115
Toyo Trust & Banking Co. 17,000 115
Toyoda Automatic Loom 6,000 94
Toyota Motor Corp. 118,000 2,192
Yamaichi Securities Co. 25,000 131
Yamanouchi Pharmaceutical Co. 6,000 134
Yamazaki Baking Co. 5,000 88
Yasuda Fire & Marine
Insurance Co. 20,000 121
Yasuda Trust & Banking Co. 23,000 103
--------
54,676
--------
NETHERLANDS--5.1%
ABN-AMRO Holding NV 12,240 514
Aegon NV 11,115 422
Akzo Nobel NV 3,300 376
Elsevier NV 31,600 409
Heineken NV 2,250 399
Internationale Nederlanden
Groep 13,042 778
Koninklijke PTT Nederland 22,140 779
Philips Electronics NV 15,400 595
PolyGram NV 8,700 543
Royal Dutch/Shell Group
(Bearer) 25,200 3,129
Unilever NV 7,500 983
Wolters Kluwer CVA 3,139 286
--------
9,213
--------
SINGAPORE--2.2%
Development Bank Singapore 45,000 516
Hong Kong Land Holdings 233,331 420
Jardine Matheson Holdings
Ltd. 35,811 218
OCBC Bank 41,833 491
Singapore Airlines Ltd. 62,000 575
Singapore Telecom 709,000 1,445
United Overseas Bank 39,600 348
--------
4,013
--------
SPAIN--1.6%
Argentaria 5,700 201
Banco Central SA (Reg.) 5,500 114
Banco Espanol de Credito 26,000 176
Banco de Bilbao Vizcaya SA
(Reg.) 11,200 342
Banco de Santander SA (Reg.) 6,800 296
Empresa Nacional de
Electricidad 11,700 582
Iberdrola SA 39,600 298
Repsol, SA 12,800 382
Telefonica Internacional de
Espana, SA 42,300 534
--------
2,925
--------
</TABLE>
See accompanying Notes to Financial Statements.
F-3
<PAGE> 72
SchwabFunds(R) 4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
SWEDEN--2.2%
ASEA AB Series A Free shares 3,300 $ 330
ASEA AB Series B Free shares 800 79
Astra AB Series A Free shares 22,400 823
Astra AB Series B Free shares 3,400 123
Branded Consumer Products
(Compulsory Acquisition)
Series A* 5,300 75
Branded Consumer Products
(Compulsory Acquisition)
Series B* 2,800 39
Ericsson(LM) Telephone* 6,280 133
Ericsson(LM) Telephone
Series B 62,800 1,333
Pharmacia AB Series A
Free shares 5,300 184
Pharmacia AB Series B
Free shares 2,800 98
Sandvik AB Series A
Free shares 8,600 161
Volvo AB Series A Free shares 5,000 114
Volvo AB Series B Free shares 20,700 466
--------
3,958
--------
SWITZERLAND--8.0%
BBC Brown Boveri 370 429
BBC Brown Boveri (Reg.) 189 43
CS Holding (Reg.) 13,670 1,397
Ciba-Geigy Ltd. (Bearer) 170 147
Ciba-Geigy Ltd. (Reg.) 1,175 1,017
Cie Financiere Richemont
Series A (Bearer) 259 360
Holderbank Fn Glarus (Bearer) 1,000 803
Nestle Ltd. (Reg.) 1,823 1,911
Roche Group 323 2,347
Roche Group (Bearer) 75 960
SMH AG (Bearer) 156 97
SMH AG (Reg.) 682 92
Sandoz Ltd. (Bearer) 491 409
Sandoz Ltd. (Reg.) 1,673 1,381
Schweizerische
Bankgesellschaft (Bearer) 979 1,061
Schweizerische
Bankgesellschaft (Reg.) 950 218
Schweizerische Bankverein
(Bearer) 1,129 463
Schweizerische Bankverein
(Reg.) 1,251 256
Winterthur (Reg.) 500 329
Zurich Versicherun (Reg.) 2,095 600
--------
14,320
--------
UNITED KINGDOM--20.1%
Abbey National 61,900 524
Allied-Lyons 48,700 393
Argyll Group 54,708 278
BAA PLC 48,456 377
BAT Industries PLC 144,756 1,188
BOC Group 21,850 300
BTR PLC 165,615 880
Barclays PLC 75,223 883
Bass PLC 42,400 444
Boots Co. PLC 46,648 413
British Airways PLC 46,400 334
British Gas PLC 201,400 767
British Petroleum Co. PLC 259,375 1,907
British Sky Broadcast 76,400 457
British Steel 94,600 244
British Telecommunications
PLC 294,200 1,749
Cable & Wireless PLC 146,900 959
Cadbury Schweppes PLC 40,210 332
Commercial Union
Assurance Co. 31,400 304
General Accident 17,300 177
General Electric Co. PLC 125,200 622
Glaxo PLC 149,529 2,017
Grand Metropolitan PLC 98,003 679
Great Universal Stores 47,800 431
Guinness PLC 93,500 749
HSBC Holdings PLC 40,757 606
HSBC Holdings PLC
(Hong Kong) 82,896 1,217
Hanson PLC 240,444 737
Imperial Chemical
Industries PLC 32,100 393
Inchcape 22,221 110
J. Sainsbury PLC 85,028 569
Kingfisher 29,415 221
Lloyds Abbey Life 26,700 193
Lloyds Bank 59,098 727
Marks & Spencer PLC 127,500 855
National Power Development 59,600 465
National Westminster Bank PLC 75,443 753
Pearson PLC 25,137 250
Peninsular & Oriental Steam
Navigation Co. 26,291 200
Powergen PLC 37,400 336
Prudential Corp. 85,865 537
RTZ Corp. PLC (Reg.) 48,503 672
Rank Organisation PLC 40,800 272
Redland 22,248 123
Reed International PLC 26,000 395
Reuters Holdings PLC 86,500 804
Royal Bank of Scotland 36,413 295
Scot & Newcastle 20,100 186
Scottish Power 31,400 173
Shell Transport & Trading
Co. (Reg.) 157,000 1,837
SmithKline Beecham PLC
Series A 65,635 685
SmithKline Beecham PLC
(units) 62,700 642
Standard Chartered PLC 10,264 84
Sun Alliance Group 31,988 191
TSB Group PLC 76,700 452
Tesco 95,403 453
Thorn EMI PLC 19,666 458
Tomkins 47,801 189
Unilever PLC 36,900 717
Vendome (units) 34,050 301
Vodafone Group PLC 146,192 604
Waste Management
International* 16,000 75
Zeneca Group 45,200 842
--------
36,027
--------
TOTAL COMMON STOCK
(Cost $162,414) 174,660
--------
</TABLE>
See accompanying Notes to Financial Statements.
F-4
<PAGE> 73
SchwabFunds(R) 5
- --------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND(TM)
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
PREFERRED STOCK--0.7%
AUSTRALIA--0.1%
News Corp. Ltd. (Limited
Voting Shares) 39,718 $ 182
--------
GERMANY--0.6%
Henkel KGaA 629 235
RWE AG (Non Voting) 1,832 519
SAP AG Non Voting Preference 2,010 308
Volkswagen AG (Non Voting) 350 80
--------
1,142
--------
ITALY--0.0%
Fiat Finance SpA 38,800 77
--------
TOTAL PREFERRED STOCK
(Cost $1,168) 1,401
--------
WARRANTS--0.0%
UNITED KINGDOM--0.0%
BTR Nylex Ltd.
(expire 11/26/98)* 4,019 2
--------
TOTAL WARRANTS
(Cost $3) 2
--------
</TABLE>
<TABLE>
<CAPTION>
Maturity Value
(000s) (000s)
-------- ------
<S> <C> <C>
REPURCHASE AGREEMENT--1.2%
UNITED STATES--1.2%
State Street Bank & Trust
4.75%
Dated 10/31/95
Due 11/01/95
Collateralized By:
U.S. Treasury Bond
$1,440,000 Par; 12%
Due 8/15/13 $ 2,144 2,144
--------
TOTAL REPURCHASE AGREEMENT
(Cost $2,144) 2,144
--------
TOTAL INVESTMENTS--99.2%
(Cost $165,729) 178,207
--------
OTHER ASSETS AND LIABILITIES--0.8%
Other Assets 1,793
Liabilities (388)
--------
1,405
--------
NET ASSETS--100.0%
Applicable to 16,137,640
outstanding $0.00001
par value shares
(unlimited shares
authorized) $179,612
========
NET ASSET VALUE PER SHARE $11.13
=====
</TABLE>
- ------------------
*Non-Income Producing Security
See accompanying Notes to Financial Statements.
F-5
<PAGE> 74
SchwabFunds(R) 6
- --------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND(TM)
STATEMENT OF OPERATIONS (in thousands)
For the year ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of foreign tax withheld of $515) $ 3,386
Interest 161
-------
Total investment income 3,547
-------
Expenses:
Investment advisory and administration fee 1,080
Transfer agency and shareholder service fees 386
Custodian fees 206
Registration fees 45
Professional fees 50
Shareholder reports 46
Trustees' fees 43
Amortization of deferred organization costs 24
Insurance and other expenses 6
-------
1,886
Less expenses reduced (577)
-------
Total expenses incurred by Fund 1,309
-------
Net investment income 2,238
-------
Net realized gain (loss) on investments and foreign currency
transactions:
Proceeds from sales of investments 9,597
Cost of investments sold (9,437)
-------
Net realized gain on investments from changes in market
value 160
Net realized loss on investments from changes in foreign
exchange rates (137)
-------
Net realized gain on investments sold 23
Net realized gain on foreign currency transactions 170
-------
Net realized gain on investments sold and foreign
currency transactions 193
-------
Change in net unrealized gain (loss) on investments and foreign
currency translation:
Changes in market value:
Beginning of period unrealized gain 413
End of period unrealized gain 4,832
-------
Increase in net unrealized gain in market value 4,419
-------
Changes in foreign exchange rates:
Beginning of period unrealized gain 9,494
End of period unrealized gain 7,646
-------
Decrease in net unrealized gain in foreign exchange rates (1,848)
-------
Increase in net unrealized gain on investments from
changes in market value and foreign exchange rates 2,571
Decrease in net unrealized gain on translating assets
and liabilities into the reporting currency (14)
-------
Increase in net unrealized gain on investments and
foreign currency translation 2,557
-------
Net gain on investments 2,750
-------
Increase in net assets resulting from operations $ 4,988
=======
</TABLE>
See accompanying Notes to Financial Statements.
F-6
<PAGE> 75
SchwabFunds(R) 7
- --------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND(TM)
STATEMENT OF CHANGES IN NET ASSETS (in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the year ended
October 31,
1995 1994
-------- --------
<S> <C> <C>
Operations:
Net investment income $ 2,238 $ 1,412
Net realized gain (loss) on investments sold
and foreign currency transactions 193 (580)
Increase in net unrealized gain on investments
and foreign currency translation 2,557 8,889
-------- --------
Increase in net assets resulting from
operations 4,988 9,721
-------- --------
Distributions to Shareholders From:
Net investment income (1,532) (433)
Capital gains -- (188)
-------- --------
Total distributions to shareholders (1,532) (621)
-------- --------
Capital Share Transactions:
Proceeds from shares sold 73,349 61,237
Net asset value of shares issued in
reinvestment of distributions 1,372 560
Early withdrawal fees 49 129
Less payments for shares redeemed (40,969) (34,756)
-------- --------
Increase in net assets from capital share
transactions 33,801 27,170
-------- --------
Total increase in net assets 37,257 36,270
Net Assets:
Beginning of period 142,355 106,085
-------- --------
End of period (including undistributed
net investment income of $2,051 and
$1,306, respectively) $179,612 $142,355
======== ========
Number of Fund Shares:
Sold 6,778 5,947
Reinvested 134 56
Redeemed (3,840) (3,392)
-------- --------
Net increase in shares outstanding 3,072 2,611
Shares Outstanding:
Beginning of period 13,066 10,455
-------- --------
End of period 16,138 13,066
======== ========
</TABLE>
See accompanying Notes to Financial Statements.
F-7
<PAGE> 76
SchwabFunds(R) 8
- --------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND(TM)
NOTES TO FINANCIAL STATEMENTS
For the year ended October 31, 1995
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE FUND
The Schwab International Index Fund (the "Fund") is a series of Schwab Capital
Trust (the "Trust"), an open-end, management investment company organized as a
Massachusetts business trust on May 7, 1993 and registered under the Investment
Company Act of 1940, as amended.
In addition to the Fund, the Trust also offers the Schwab Small-Cap Index
Fund(R), the Schwab Asset Director(R)-High Growth Fund, the Schwab Asset
Director(R)-Conservative Growth Fund and the Schwab Asset Director(R)-Balanced
Growth Fund. The assets of each series are segregated and accounted for
separately.
The investment objective of the Fund is to attempt to track the price and
dividend performance (total return) of the Schwab International Index(R), an
index created to represent the performance of common stocks and other equity
securities issued by large, publicly traded companies from countries around the
world with major developed securities markets, excluding the United States.
2. SIGNIFICANT ACCOUNTING POLICIES
Security valuation -- Investments in securities traded on an exchange are valued
at the last quoted sale price for a given day, or if a sale is not reported for
that day, at the mean between the most recent quoted bid and asked prices.
Unlisted securities for which market quotations are readily available are valued
at the mean between the most recent bid and asked prices. Securities for which
no quotations are readily available are valued at fair value as determined in
good faith by the Fund's investment manager pursuant to Board of Trustees'
guidelines. Short-term securities with 60 days or less to maturity are stated at
amortized cost, which approximates market value.
Security transactions and investment income -- Security transactions, in the
accompanying financial statements, are accounted for on a trade date basis (date
the order to buy or sell is executed). Dividend income and distributions to
shareholders are recorded on the ex-dividend date; interest income is recorded
on the accrual basis. Realized gains and losses from security transactions are
determined on an identified cost basis.
Repurchase agreements -- Repurchase agreements are fully collateralized by U.S.
Treasury or Government agency securities. All collateral is held by the Fund's
custodian and is monitored daily to ensure that its market value at least equals
the repurchase price under the agreement.
Foreign currency translation -- The accounting records of the Fund are
maintained in U.S. dollars. Investment securities and all other assets and
liabilities of the Fund denominated in a foreign currency are translated into
U.S. dollars at the exchange rates on October 31. Purchases and sales of
securities, income receipts and expense payments are translated into U.S.
dollars at the exchange rate in effect on the dates of the respective
transactions.
The Fund separates within its statement of operations the portion of realized
and unrealized gains and losses resulting from changes in foreign exchange rates
from that arising from changes in securities' market values.
F-8
<PAGE> 77
SchwabFunds(R) 9
- --------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND(TM)
NOTES TO FINANCIAL STATEMENTS
For the year ended October 31, 1995
- --------------------------------------------------------------------------------
Forward currency contracts -- A forward currency contract ("Forward") is an
agreement between two parties to buy and sell a currency at a set price on a
future date. The value of the Forward fluctuates with changes in currency
exchange rates. The Forward is marked-to-market daily and the change in value is
recorded by the Fund as an unrealized gain or loss. When the Forward is closed,
the Fund records a realized gain or loss equal to the difference between the
value at the time the contract was opened and the value at the time the contract
was closed. The Fund engages in Forwards in connection with the purchase and
sale of portfolio securities to minimize the uncertainty of changes in future
exchange rates.
Deferred organization costs -- Costs incurred in connection with the
organization of the Fund, its initial registration with the Securities and
Exchange Commission and with various states are amortized on a straight-line
basis over a five year period from the Fund's commencement of operations.
Expenses -- Expenses arising in connection with the Fund are charged directly to
the Fund. Expenses common to all series of the Trust are 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 substantially 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 tax purposes.
At October 31, 1995, (for financial reporting and federal income tax purposes),
net unrealized gain aggregated $12,478,000, of which $22,819,000 related to
appreciated securities and $10,341,000 related to depreciated securities.
3. TRANSACTIONS WITH AFFILIATES
Investment advisory and administration agreement -- The Trust has an investment
advisory and administration agreement with Charles Schwab Investment Management,
Inc. (the "Investment Manager"). For advisory services and facilities furnished,
the Fund pays an annual fee, payable monthly, of .70% of the first $300 million
of average daily net assets and .60% of such assets over $300 million. Under
this agreement, the Fund incurred investment advisory and administration fees of
$1,080,000 during the year ended October 31, 1995, before the Investment Manager
reduced its fee (see Note 5).
Sub-advisory agreement -- Prior to June 30, 1995, the Investment Manager had a
sub-advisory agreement with Dimensional Fund Advisors Inc. ("Dimensional") under
which Dimensional performed day-to-day portfolio management for the Fund.
Dimensional did not receive compensation directly from the Fund. However, the
Investment Manager did pay Dimensional an annual fee, payable monthly, of .15%
of the first $300 million of average daily net assets and .05% of such assets
over $300 million. Effective June 30, 1995, the sub-advisory agreement for the
Fund was terminated and the Investment Manager assumed day-to-day portfolio
management responsibility for the Fund.
F-9
<PAGE> 78
SchwabFunds(R) 10
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 .05% of average daily net assets for transfer
agency services and .20% of such assets for shareholder services. For the year
ended October 31, 1995, the Fund incurred transfer agency and shareholder
service fees of $386,000, before Schwab reduced its fees (see Note 5).
Officers and trustees -- During the period, certain officers and trustees of the
Trust were also officers or directors of the Investment Manager and/or Schwab.
During the year ended October 31, 1995, the Trust made no direct payments to its
officers or trustees who were "interested persons" within the meaning of the
Investment Company Act of 1940, as amended. The Fund incurred fees of $43,000
related to the Trust's unaffiliated trustees.
4. BORROWING AGREEMENT
The Trust has an arrangement with State Street Bank and Trust Company, the
Fund's custodian, whereby the Fund may borrow up to $10,000,000, on a temporary
basis, to fund redemptions. Amounts borrowed under this arrangement bear
interest at periodically negotiated rates and may be collateralized by the
assets of the Fund. During the year ended October 31, 1995, no borrowings were
made under this arrangement.
5. EXPENSES REDUCED BY THE INVESTMENT MANAGER AND SCHWAB
The Investment Manager and Schwab reduced a portion of their fees in order to
limit the Fund's ratio of operating expenses to average net assets. For the year
ended October 31, 1995, the total of such fees reduced by the Investment Manager
was $415,000 and the total of such fees reduced by Schwab was $162,000.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, other than short-term obligations,
aggregated $43,932,000 and $9,597,000, respectively, for the year ended October
31, 1995.
7. EARLY WITHDRAWAL FEES PAID TO THE FUND
The Fund assesses a .75% early withdrawal fee on redemption proceeds
attributable to shares purchased and held less than six months. The early
withdrawal fee is retained by the Fund and is treated as a contribution to
capital. For the year ended October 31, 1995, total early withdrawal fees
retained by the Fund amounted to $49,000.
F-10
<PAGE> 79
SchwabFunds(R) 11
- --------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND(TM)
NOTES TO FINANCIAL STATEMENTS
For the year ended October 31, 1995
- --------------------------------------------------------------------------------
8. COMPOSITION OF NET ASSETS
At October 31, 1995, net assets consisted of:
<TABLE>
<S> <C>
Capital paid in $165,464,000
Accumulated undistributed net investment income 2,051,000
Accumulated net realized loss on investments sold and
foreign currency transactions (402,000)
Net unrealized gain on investments 12,478,000
Net unrealized gain on translating assets and liabilities
into the reporting currency 21,000
------------
Total $179,612,000
============
</TABLE>
The Fund follows Statement of Position 93-2 Determination, Disclosure, and
Financial Statement Presentation of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies, which will generally present
undistributed income and realized gains on a tax basis. As a result, certain
reclassifications to increase undistributed net investment income and net
realized loss on investments sold and foreign currency transactions by $39,000
and $15,000 respectively, and to decrease capital paid in by $24,000 have
occurred. These reclassifications have no impact on the net asset value of the
Fund.
At October 31, 1995, the Fund's Statement of Net Assets included liabilities of
$149,000 for Fund shares redeemed and $61,000 for investment advisory and
administration fee payable.
F-11
<PAGE> 80
SchwabFunds(R) 12
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the
period:
<TABLE>
<CAPTION>
For the period
September 9,
1993
(commencement of
For the year ended operations) to
October 31, October 31,
1995 1994 1993
-------- -------- ----------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 10.89 $ 10.15 $ 10.00
Income from Investment Operations
- -------------------------------
Net investment income .14 .11 .03
Net realized and unrealized gain on
investments and foreign currency
transactions .22 .69 .12
-------- -------- --------
Total from investment operations .36 .80 .15
Less Distributions
- ---------------
Dividends from net investment income (.12) (.04) --
Distributions from realized gain
on investments -- (.02) --
-------- -------- --------
Total distributions (.12) (.06) --
-------- -------- --------
Net asset value at end of period $ 11.13 $ 10.89 $ 10.15
======== ======== ========
Total return (%) 3.35 7.89 1.50
- --------------
Ratios/Supplemental Data
- -----------------------
Net assets, end of period (000s) $179,612 $142,355 $106,085
Ratio of expenses to
average net assets (%) .85 .90 .60*
Ratio of net investment income to
average net assets (%) 1.45 1.14 2.15*
Portfolio turnover rate (%) 0 6 2
</TABLE>
The Investment Manager and Schwab have reduced a portion of their fees and
absorbed certain expenses in order to limit the Fund's ratio of operating
expenses to average net assets. Had these fees and expenses not been reduced and
absorbed, the ratio of expenses to average net assets for the periods ended
October 31, 1995, 1994 and 1993, would have been 1.22%, 1.30% and 2.10%*,
respectively, and the ratio of net investment income to average net assets would
have been 1.08%, .74% and .65%*, respectively.
* Annualized
F-12
<PAGE> 81
SchwabFunds(R) 13
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
To the Board of Trustees
and Shareholders of the Schwab International Index Fund(TM)
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets present fairly, in all
material respects, the financial position of the Schwab International Index Fund
(one of the series constituting Schwab Capital Trust, hereafter referred to as
the "Trust") at October 31, 1995, and the results of its operations and the
changes in its net assets for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audits 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 October 31, 1995 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
San Francisco, California
November 22, 1995
F-13
<PAGE> 82
SchwabFunds(R) 1
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
COMMON STOCK--99.0%
1st Source Corp. 2,433 $ 57
20th Century Industries 12,100 201
3COM Corp. 4,134 194
3DO Co.* 5,900 64
AAR Corp. 4,000 71
ACX Technologies, Inc. 6,200 98
ADVO, Inc. 4,500 115
AG Chemical Equipment Inc. 2,700 77
AGCO Corp. 6,150 275
ALANTEC Corp.* 2,200 78
ALBANK Financial Corp. 2,600 75
AMC Entertainment Inc.* 3,700 67
AMCORE Financial, Inc. 4,100 93
AMETEK, Inc. 7,700 136
AMP Inc. 1,792 70
APS Holding Corp. Class A* 3,200 66
AST Research, Inc.* 9,754 87
Acclaim Entertainment, Inc.* 10,000 237
Acme Metals Co.* 1,000 15
Acordia, Inc. 2,900 80
Actava Group Inc.* 4,100 71
Actel Corp.* 3,700 44
Acuson Corp.* 5,600 65
Acxiom Corp. 5,700 170
Addington Resources, Inc.* 3,100 39
Adobe Systems Inc. 1,600 91
Advanced Tissue Sciences,
Inc.* 7,800 70
Affiliated Computer Services
Inc.* 1,800 59
Air Express International
Corp. 4,000 82
Airborne Freight Corp. 4,700 123
Alaska Air Group, Inc.* 3,300 49
Albany International Corp.
Class A 7,100 147
Alberto-Culver Co. Class A 300 8
Alex. Brown Inc. 3,800 186
Alfa Farmers Federation Corp. 9,600 103
Allen Group Inc. 5,100 125
Alliance Entertainment Corp.* 8,200 55
Alliance Semiconductor Corp. 8,250 253
Alliant Techsystems Inc.* 2,900 135
Allied Group, Inc. 1,900 61
Alpharma, Inc. 4,600 110
Altera Corp. 3,000 182
Alternative Resources Corp. 4,100 126
Altron Inc. 2,500 73
Amcol International Corp. 3,900 67
Amerco* 10,500 190
America Online, Inc. 1,000 80
America West Airlines, Inc.* 10,200 139
American Annuity Group, Inc. 8,250 89
American Bankers Insurance
Group, Inc. 5,100 182
American Business
Information, Inc. 7,650 136
American Business Products,
Inc. 3,300 72
American Financial
Enterprises Inc. 1,500 35
American Freightways Corp.* 7,400 93
American Heritage Life
Investment Corp. 5,200 100
American Homepatient Inc.* 1,900 46
American Maize-Products Co. 2,700 107
American Management Systems,
Inc. 6,600 192
American Medical Response,
Inc.* 6,000 173
American Mobile Satellite
Corp.* 6,300 132
American Oncology Resources
Inc.* 6,400 224
American President Companies,
Ltd. 7,100 172
Americredit Corp.* 7,100 87
Amphenol Corp. Class A* 3,100 67
Amresco Inc. 5,700 61
Amsco International, Inc.* 10,700 171
Anchor Gaming* 2,500 55
Andrew Corp. 1,275 54
Angelica Corp. 2,000 45
AnnTaylor Stores Corp.* 5,500 61
Antec Corp.* 5,600 70
Anthony Industries, Inc. 6,415 119
Apogee Enterprises, Inc. 2,300 34
Apollo Group Inc. 4,650 121
Apple South, Inc. 6,650 138
Applebee's International,
Inc. 7,600 212
Applied Innovation Inc. 3,400 32
Applied Power Inc. Class A 2,800 85
Apria Healthcare Group Inc.* 11,600 252
Aptar Group, Inc. 4,500 154
Aquila Gas Pipeline Corp. 6,800 75
Arbor Drugs, Inc. 5,900 107
Arch Communications Group
Inc.* 2,600 71
Arctco, Inc. 6,150 70
Argosy Gaming Co.* 4,700 44
Armco Inc.* 28,000 172
Armor All Products Corp. 4,600 77
Arnold Industries Inc. 6,300 104
Arrow International, Inc. 1,000 42
Arthur J. Gallagher & Co. 3,300 117
Arvin Industries, Inc. 6,300 112
Ashland Coal, Inc. 2,900 69
Aspect Telecommunications
Corp. 5,600 194
Associated Banc-Corp 3,900 148
Associated Group Inc. Class
A* 4,100 73
Astoria Financial Corp. 4,000 172
Atlantic Southeast Airlines,
Inc. 6,300 157
Atmos Energy Corp. 4,000 73
Atria Software Inc. 3,200 115
Augat Inc. 4,100 65
Auspex Systems, Inc.* 7,600 108
Authentic Fitness Corp. 5,500 113
Avatar Holdings, Inc.* 2,400 89
Avid Technology, Inc.* 4,500 196
Aztar Corp.* 7,400 60
B W/I P Inc. Class A 5,100 84
BISYS Group, Inc.* 5,600 156
BJ Services Co.* 6,900 162
BMC Industries, Inc. 3,100 120
Baldor Electric Co. 6,540 157
Baldwin & Lyons, Inc. Class B 3,300 49
Ballard Medical Products 9,900 171
Bally Entertainment Corp. 10,100 111
</TABLE>
See accompanying Notes to Financial Statements.
F-14
<PAGE> 83
SchwabFunds(R) 2
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
Bancorp South, Inc. 2,300 $ 108
Banta Corp. 5,050 220
Banyan Systems, Inc.* 2,800 22
Barnes Group Inc. 1,600 60
Barrett Resources Corp.* 6,900 160
Bassett Furniture Industries,
Inc. 3,600 73
Bay State Gas Co. 2,800 70
Bearings, Inc. 1,600 58
Belden Inc. 12,300 297
Bell Bancorp, Inc. 1,800 53
Ben Franklin Retail Stores,
Inc.* 912 3
Benton Oil & Gas Co.* 5,000 61
Berkley (W.R.) Corp. 4,000 173
Best Products Inc. (New)* 7,300 36
Big B, Inc. 4,700 69
Bio Rad Laboratories Inc.* 1,700 65
Biocraft Laboratories, Inc. 2,800 43
Birmingham Steel Corp. 7,100 108
Black Box Corp. 4,000 66
Black Hills Corp. 3,200 80
Blair Corp. 1,900 56
Blanch (E.W.) Holdings, Inc. 3,500 67
Block Drug Co., Inc. Class A 4,957 191
Blount, Inc. Class A 2,900 126
Blount, Inc. Class B 1,000 48
Blyth Industries Inc.* 3,600 182
Boise Cascade Office Products
Co.* 7,600 275
Bok Financial Corp. 5,000 108
Bolt Beranek and Newman Inc.* 4,300 133
Bombay Company, Inc.* 7,850 46
Books-A-Million, Inc. 3,500 45
Boole & Babbage, Inc. 500 18
Borg Warner Automotive Inc. 5,400 159
Borland International, Inc.* 9,300 126
Boston Scientific Corp.* 3,073 129
Boston Technology, Inc.* 8,400 117
Bowne & Co., Inc. 3,800 71
Brady (W.H.) Co. Class A 1,700 124
Breed Technologies, Inc. 8,300 155
BroadBand Technologies, Inc.* 2,600 46
Broderbund Software, Inc. 100 7
Brooklyn Bancorp Inc.* 3,200 126
Brooktree Corp.* 3,500 42
Brown (Tom), Inc.* 4,600 52
Brown Group, Inc. 3,700 51
Bruno's Inc.* 402 4
Brush Wellman Inc. 4,000 67
Buffets, Inc.* 6,900 87
Burlington Coat Factory
Warehouse Corp.* 8,800 98
Burlington Industries, Inc.* 16,400 182
Burr-Brown Corp. 3,200 102
Bush Boake Allen Inc.* 4,600 126
Business Records Corp.
Holding Co.* 1,200 45
C-COR Electronics, Inc. 2,400 56
C-Cube Microsystems, Inc.* 4,100 283
C-TEC Corp. 6,800 145
CCB Financial Corp. 3,550 175
CCH Inc. Class A 4,800 113
CCH Inc. Class B 8,700 202
CDI Corp.* 4,000 59
CDW Computer Centers, Inc. 3,500 172
CFW Communications Co. 2,400 44
CIDCO, Inc.* 3,300 97
CILCORP Inc. 3,300 129
CLARCOR Inc. 3,000 68
CMAC Investment Corp. 2,900 138
CML Group, Inc. 11,350 65
CNB Bancshares, Inc. 3,801 103
CPI Corp. 2,800 51
CSF Holdings, Inc. 2,375 93
Cabot Oil & Gas Corp. Class A 4,600 62
Cadence Design Systems, Inc. 2,700 87
CalMat Co. 9,100 154
Caldor Corp.* 3,400 17
Calgon Carbon Corp. 9,500 108
California Federal Bank 12,600 186
California Federal Bank
Goodwill Certificates* 960 4
California Microwave, Inc.* 3,500 76
Cambridge Technology
Partners, Inc.* 3,200 183
Camco International Inc. 6,000 137
Canandaigua Wine Co., Inc.
Class B* 1,000 48
Capital Re Corp. 5,400 153
Capitol American Financial
Corp. 6,500 128
Caraustar Industries, Inc. 6,600 122
Carlisle Companies Inc. 3,400 140
Carmike Cinemas, Inc.* 2,500 52
Carpenter Technology Corp. 3,600 136
Carson Pirie Scott & Co.
Illinois* 4,100 69
Carter-Wallace, Inc. 9,800 103
Casey's General Stores, Inc. 6,000 139
Casino America, Inc.* 3,350 23
Castech Aluminum Group Inc.* 2,400 34
Catalina Marketing Corp.* 2,200 111
Catellus Development Corp.* 28,300 156
Cato Corp. (New) Class A 6,200 37
Cellstar Corp.* 4,700 129
Cellular Communications, Inc.
Class A (Redeemable)* 4,500 242
Cellular Technical Services
Inc.* 2,100 35
Centex Construction Products
Inc.* 6,000 76
Central Hudson
Gas & Electric Corp. 3,700 113
Central Louisiana Electric
Co., Inc. 4,800 129
Central Maine Power Co. 7,900 110
Central Newspapers, Inc.
Class A 6,400 189
Centura Banks, Inc. 5,000 169
Century Communications Corp.
Class A* 19,100 166
Cephalon Inc.* 5,600 168
Cerner Corp. 5,400 139
Champion Enterprises, Inc. 4,200 109
Chaparral Steel Co. 6,000 59
Charming Shoppes, Inc. 26,100 74
Charter Medical Corp.* 6,100 110
Charter One Financial, Inc. 5,700 161
Chase Manhattan Corp. 1,360 78
Checkpoint Systems, Inc.* 5,700 165
Cheesecake Factory, Inc.* 2,400 51
Chemed Corp. 2,000 70
</TABLE>
See accompanying Notes to Financial Statements.
F-15
<PAGE> 84
SchwabFunds(R) 3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
Chemical Financial Corp. 1,995 $ 79
Chesapeake Corp. 6,700 205
Chesapeake Energy Corp. 2,600 76
Cheyenne Software, Inc.* 9,450 197
Chips & Technologies Inc.* 3,900 34
Chiquita Brands
International, Inc. 13,000 211
Church & Dwight Co., Inc. 4,100 84
Citicasters Inc. 3,000 94
Citizens Bancorp 3,700 122
Citizens Banking Corp. 3,600 110
Citizens Corp. 8,800 160
City National Corp. 11,200 148
Claire's Stores, Inc. 4,500 88
Clear Channel Communications,
Inc. 475 39
Cleveland-Cliffs Inc. 2,700 101
Coast Savings Financial,
Inc.* 4,600 121
Coastal Physician Group Inc.* 6,200 81
Cobra Golf, Inc. 4,300 113
Coca-Cola Bottling Co.
Consolidated 2,000 67
Coeur d'Alene Mines Corp. 3,000 51
Cognex Corp.* 3,900 234
Coherent, Inc.* 2,800 80
Cole Taylor Financial Group
Inc. 3,600 95
Collective Bancorp, Inc. 4,400 103
Collins & Aikman Corp.* 15,700 126
Colonial BancGroup, Inc. 3,400 98
Colonial Data Technologies
Corp.* 3,600 50
Comair Holdings, Inc. 7,400 209
Comdata Holdings Corp.* 4,000 98
Commerce Group Inc.
Massachusetts 8,500 173
Commercial Federal Corp. 3,800 125
Commercial Intertech Corp. 3,450 58
Commercial Metals Co. 3,233 83
Commonwealth Energy System 2,600 110
Community Health Systems,
Inc.* 4,500 143
Community Psychiatric Centers 10,100 110
Comnet Cellular, Inc.* 3,700 93
CompUSA Inc.* 5,100 195
Computer Network Technology* 5,000 33
ComputerVision Corp.* 12,400 146
Comverse Technology Inc.* 5,000 113
Concord Efs Inc.* 10,300 355
Cone Mills Corp.* 10,300 112
Conner Peripherals, Inc.* 14,100 254
Consolidated Stores Corp.* 6,100 141
Continental Airlines, Inc.
Class B* 6,400 228
Continuum Company, Inc.* 5,000 197
Coors (Adolph) Co. Class B 9,000 163
Copley Pharmaceutical, Inc.* 4,764 78
Coram Healthcare Corp.* 9,262 37
Corrections Corp. of America 3,800 207
Coventry Corp. 8,000 158
Crawford & Co. Class A 4,300 67
Crawford & Co. Class B 8,500 132
Cray Research, Inc.* 6,400 133
Creative Computers Inc.* 2,100 60
Credence Systems Corp. 6,750 253
Crompton & Knowles Corp. 13,600 172
Cross (A.T.) Co. Class A 5,800 83
Cross Timbers Oil Co. 4,900 71
Cullen/Frost Bankers, Inc. 2,700 137
Culligan Water Technologies
Inc.* 3,500 60
Curtiss-Wright Corp. 1,400 62
Cypress Semiconductor Corp. 900 32
Cyrix Corp.* 4,500 144
Cytec Industries Inc.* 3,000 164
DSP Group, Inc.* 1,500 24
Daig Corp. 5,000 113
Dallas Semiconductor Corp. 9,500 202
Dames & Moore, Inc. 4,700 64
Data General Corp.* 7,900 91
Datascope Corp.* 4,200 101
Dauphin Deposit Corp. 8,400 245
Dave & Busters Inc.* 840 13
Davidson & Associates, Inc. 8,700 312
DeVRY Inc. 7,000 158
Dekalb Genetics Corp. 1,200 51
Dell Computer Corp. 6,300 293
Delta & Pine Land Co. 2,100 81
Department 56 Inc.* 300 14
Deposit Guaranty Corp. 4,400 194
Detroit Diesel Corp.* 8,900 158
Devon Energy Corp. 4,700 102
Devon Group, Inc. (New)* 1,600 62
Dexter Corp. 5,800 138
Diagnostic Products Corp. 4,300 159
Dial Page, Inc.* 5,000 74
Dialogic Corp.* 3,400 98
Diamond Multimedia Systems
Inc.* 7,200 214
Diamond Shamrock, Inc. 7,800 201
Digi International Inc.* 3,000 81
Digital Link Corp.* 1,900 30
Dimon Inc. 8,400 123
Dionex Corp.* 1,500 80
Discount Auto Parts, Inc.* 2,900 78
Discovery Zone, Inc.* 11,900 42
Dollar Tree Stores Inc.* 4,100 109
Donaldson Co., Inc. 5,800 141
Doubletree Corp.* 4,300 94
Downey Financial Corp. 3,200 65
Dreyer's Grand Ice Cream,
Inc. 3,300 115
Duriron Co., Inc. 4,400 118
Duty Free International, Inc. 6,800 97
Dynatech Corp. 3,400 52
Eastern Enterprises 4,800 143
Eastern Utilities Assoc. 4,800 113
Eaton Vance Corp. (Non
Voting) 2,100 76
Edison Brothers Stores, Inc. 4,200 15
Egghead, Inc.* 3,000 21
Electro Scientific Industries
Inc.* 2,200 69
Electroglas Inc. 2,300 163
Electronics for Imaging, Inc. 2,800 232
Empire District Electric Co. 3,200 59
Energen Corp. 2,800 63
Enhance Financial Services
Group, Inc. 7,100 145
Envoy Corp. (New)* 2,000 26
Enzo Biochem, Inc. 5,775 92
</TABLE>
See accompanying Notes to Financial Statements.
F-16
<PAGE> 85
SchwabFunds(R) 4
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
Ethan Allen Interiors, Inc.* 3,700 $ 73
Exabyte Corp.* 4,900 63
Exar Corp. 2,000 48
Expeditors International of
Washington, Inc. 3,900 104
Express Scripts, Inc. Class A 3,400 131
F & M National Corp. 3,955 71
FHP International Corp.* 1,056 26
FMC Gold Co. 17,500 68
FSF Financial Corp. 5,100 68
FTP Software Inc.* 6,600 179
Fab Industries, Inc. 400 12
Fair, Issac & Co., Inc. 3,000 83
Farmer Bros. Co. 400 52
Fastenal Co. 1,400 49
Fedders Corp. 825 4
Federal-Mogul Corp. 8,800 157
Federated Department Stores,
Inc.* 2,700 69
Ferro Corp. 7,700 178
FileNet Corp.* 2,800 127
Financial Security Assured
Holdings Ltd. 6,400 166
Fingerhut Companies, Inc. 10,600 144
FirsTier Financial, Inc. 6,200 265
First Alert, Inc. 5,600 86
First American Financial
Corp. 3,600 84
First Bank System, Inc. 3,809 189
First Citizens BancShares,
Inc. Class A 2,600 138
First Commerce Bancshares
Inc. 3,000 54
First Commercial Corp. 5,640 169
First Commonwealth Financial
Corp. 5,300 87
First Data Corp. 501 33
First Financial Bancorp 2,800 95
First Financial Corp. 6,900 147
First Michigan Bank Corp. 4,906 132
First Midwest Bancorp, Inc. 2,900 82
First Mississippi Corp. 4,900 100
First National Bancorp 5,200 146
First Union Corp. 2,220 110
FirstFed Michigan Corp. 5,100 173
Firstbank of Illinois Co. 2,600 78
Firstmiss Gold Inc.* 7,571 138
Fisher Scientific
International, Inc. 3,600 113
Flagstar Companies, Inc.* 8,300 35
Florida East Coast
Industries, Inc. 2,400 161
Florida Rock Industries, Inc. 2,000 54
Fluke Corp. 1,600 59
Foremost Corp. of America 2,400 110
Forest City Enterprises, Inc.
Class A 2,100 78
Fort Wayne National Corp. 2,700 85
Fossil, Inc.* 2,200 23
FoxMeyer Health Corp. 5,473 125
Frame Technology Corp.* 3,800 107
Franklin Quest Co.* 5,700 136
Fremont General Corp. 4,280 124
Fresenius U.S.A. Inc.* 4,500 74
Fritz Cos., Inc. 5,200 181
Frontier Insurance Group,
Inc. 3,050 87
Fuller (H.B.) Co. 3,300 104
Fulton Financial Corp. 6,560 141
Fund American Enterprises
Holdings, Inc.* 1,909 132
Fusion Systems Corp.* 1,800 50
G&K Services, Inc. Class A 5,250 119
GC Companies Inc.* 1,680 54
Gartner Group Inc. Class A 5,800 253
Gasonics International Corp. 2,000 66
Gaylord Container Corp. Class
A* 11,400 87
GenCorp Inc. 8,100 85
General Binding Corp. 3,400 67
General DataComm Industries,
Inc.* 5,000 76
General Magic Inc.* 6,300 80
Genesis Health Ventures,
Inc.* 3,300 95
Geneva Steel Class A* 6,200 45
Gentex Corp.* 5,000 113
Geon Co. 6,300 157
Geotek Communications Inc.* 14,400 120
Gerber Scientific, Inc. 5,100 86
Giddings & Lewis, Inc. 8,800 143
Gilead Sciences, Inc.* 4,900 94
Glendale Federal
Bank, F.S.B. (New)* 9,100 146
Global Natural Resources
Inc.* 6,600 66
Global Village
Communications* 3,600 62
Goulds Pumps, Inc. 5,300 127
Graco Inc. 2,650 89
Grand Casinos, Inc. 4,600 183
Granite Construction Inc. 3,100 88
Great Financial Corp. 3,500 72
Greenfield Industries Inc. 3,500 104
Greif Brothers Corp. 5,600 141
Grey Advertising Inc. 100 19
Griffon Corp.* 7,600 64
Guaranty National Corp. (New) 3,500 50
Guilford Mills, Inc. 2,900 64
Gulf South Medical Supply
Inc. 3,000 63
Gymboree Corp. 6,000 136
HBO & Co. 2,600 184
HCC Insurance Holdings, Inc.* 2,900 101
HCIA Inc.* 1,600 43
Hadco Corp.* 2,400 67
Haemonetics Corp.* 7,700 145
Hancock Holding Co. 2,300 84
Handleman Co. 6,300 49
Hanover Direct Inc.* 26,800 45
Harland (John H.) Co. 7,600 158
Harleysville Group Inc. 4,600 129
Harman International
Industries, Inc. 3,675 170
Harnischfeger Industries
Corp. 4,369 138
Harper Group, Inc. 3,800 67
Harte Hanks Communications 5,000 151
Hawkeye Bancorporation 2,900 71
Hayes Wheels International,
Inc. 4,400 116
Health Management Systems,
Inc. 2,400 77
Heart Technology, Inc.* 4,100 116
Heartland Express, Inc.* 2,900 79
Heartland Wireless
Communications, Inc.* 3,500 91
</TABLE>
See accompanying Notes to Financial Statements.
F-17
<PAGE> 86
SchwabFunds(R) 5
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
Hechinger Co. Class A 9,100 $ 39
Hecla Mining Co.* 10,400 77
Helene Curtis Industries,
Inc. 2,400 72
Helix Technology Corp. 2,100 78
Helmerich & Payne, Inc. 5,600 145
Herbalife International, Inc. 6,400 48
Heritage Media Corp. Class A* 4,500 125
Hollywood Entertainment Corp. 7,900 210
Hollywood Park Inc. (New)* 4,100 39
Home Beneficial Corp. Class B 4,400 108
Home Financial Corp. 5,400 83
Horace Mann Educators Corp. 5,200 138
Horizon Healthcare Corp.* 11,695 237
Hudson Foods, Inc. 6,250 88
Human Genome Sciences Inc.* 3,300 64
Hunt (J.B.) Transport
Services, Inc. 9,150 141
Hunt Manufacturing Co. 3,000 53
Huntco Inc. Class A 1,200 16
Hutchinson Technology Inc.* 1,500 95
Hyperion Software Corp.* 1,800 88
I-Stat Corp.* 2,300 71
ICN Pharmaceuticals, Inc. 7,802 160
IDEX Corp. 4,350 164
IDEXX Laboratories, Inc. 6,800 275
IES Industries Inc. 8,300 221
IHOP Corp.* 2,200 48
INDRESCO Inc.* 5,000 86
INSO Corp. 3,400 121
INTERCO Inc. 10,300 76
INTERSOLV Inc.* 4,200 67
Ideon Group Inc. 5,600 50
Immunex Corp. (New)* 9,300 117
Imperial Bancorp 3,300 74
In Focus Systems, Inc.* 2,200 72
Indiana Energy, Inc. 5,500 116
Information Resources, Inc.* 6,600 72
Inphynet Medical Management
Inc.* 3,400 62
Input/Output, Inc. 4,500 168
Insignia Financial Group
Class A (New)* 2,100 57
Insilco Corp.* 2,100 71
Insurance Auto Auctions,
Inc.* 2,200 16
Integon Corp. 3,900 64
Integrated Device Technology,
Inc. 800 15
Integrated Health Services,
Inc. 5,300 121
Integrated Systems Inc.* 2,200 78
Intelligent Electronics, Inc. 8,200 64
Inter-Regional Financial
Group, Inc. 1,700 60
InterVoice, Inc.* 3,200 58
Interdigital Communications
Corp.* 9,300 68
Interface Systems, Inc. Class
A 4,400 67
Intergraph Corp.* 11,900 146
Interim Services Inc.* 2,800 83
Intermet Corp.* 9,200 110
International CableTel, Inc. 7,033 188
International Dairy Queen,
Inc. Class A* 5,400 115
International Family
Entertainment, Inc. Class B* 9,300 172
International Multifoods
Corp. 3,900 80
International Rectifier
Corp.* 5,200 235
Interneuron Pharmaceuticals,
Inc.* 7,500 113
Interpool, Inc.* 4,100 66
Interstate Bakeries Corp. 8,600 184
Interstate Power Co. 2,000 58
Intuit Inc. 1,200 87
Invacare Corp. 8,400 210
Iomega Corp. 4,300 102
Ionics, Inc. 4,200 171
Isis Pharmaceuticals, Inc.* 4,000 40
Isolyser Inc. 5,400 96
Itron, Inc.* 2,600 76
J & L Specialty Steel, Inc. 10,200 167
JSB Financial, Inc. 2,800 86
Jacobs Engineering Group
Inc.* 9,500 208
Jacor Communications, Inc.
Class A* 4,600 72
Jefferson Bankshares, Inc. 3,200 72
John Alden Financial Corp. 5,700 118
John Wiley & Sons, Inc. Class
A 5,800 173
Jones Intercable, Inc. Class
A* 7,500 94
Juno Lighting, Inc. 4,600 67
Just for Feet Inc. 3,350 80
Justin Industries, Inc. 5,800 59
K N Energy, Inc. 6,568 168
KCS Energy, Inc. 1,900 22
KLA Instruments Corp. 1,200 52
Kaiser Aluminum Corp.* 12,800 144
Kaman Corp. Class A 4,700 51
Kaufman & Broad Home Corp. 7,700 90
Kaydon Corp. 3,500 101
Keane, Inc. 4,500 122
Kelley Oil & Gas Corp.* 10,100 24
Kellwood Co. 5,000 94
Kemet Corp. 7,800 267
Kenetech Corp.* 8,900 28
Kennametal Inc. 5,400 168
Kent Electronics Corp. 3,050 149
KeyCorp, Inc. 2,200 74
Keystone Financial, Inc. 6,100 199
Keystone International, Inc. 8,700 194
Kimball International, Inc.
Class B 5,000 129
Kinder-Care Learning
Centers, Inc. (New)* 5,000 68
Kinetic Concepts, Inc. 10,300 116
Kirby Corp.* 6,000 99
Komag, Inc.* 5,100 291
Kulicke & Soffa Industries
Inc. 6,000 212
LCI International Inc. 16,200 292
LTX Corp.* 6,400 78
La Quinta Inns, Inc. 2,250 58
La-Z-Boy Chair Co. 4,000 119
Laclede Gas Co. 3,800 77
Lance, Inc. 7,200 123
Landmark Graphics Corp.* 4,000 87
Landry's Seafood Restaurants,
Inc. 4,000 56
Lands' End, Inc. 8,000 120
Landstar Systems, Inc.* 2,700 72
Lattice Semiconductor Corp.* 4,400 172
Lawson Products, Inc. 2,800 68
</TABLE>
See accompanying Notes to Financial Statements.
F-18
<PAGE> 87
SchwabFunds(R) 6
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
Lawter International, Inc. 9,500 $ 101
Leader Financial Corp. 3,500 125
Learning Co.* 1,600 95
Lechters, Inc.* 3,300 31
Legg Mason, Inc. 3,500 101
Lennar Corp. 8,800 201
Level One Communications
Inc.* 2,650 61
Libbey Inc. 3,200 66
Liberty Bancorp, Inc. 2,000 72
Liberty Corp. 4,800 161
Life Partners Group, Inc. 5,900 107
Life Re Corp. 3,300 68
Life Technologies, Inc. 3,800 95
Lillian Vernon Corp. 3,800 51
Lilly Industries, Inc. Class
A 5,350 68
Lincare Holdings, Inc.* 7,200 180
Lincoln Electric Co. 2,600 64
Lincoln Telecommunications
Co. 9,900 172
Liposome Co., Inc.* 7,200 110
Liqui-Box Corp. 300 8
Littlefuse, Inc.* 3,400 111
Living Centers of America,
Inc.* 4,700 122
Logicon, Inc. 3,400 78
Lojack Corp.* 7,200 111
Lone Star Industries, Inc. 6,300 144
Long Islands Bancorp Inc. 6,200 142
Louis Dreyfus Natural Gas
Corp.* 11,400 160
Loyola Capital Corp. 2,800 100
Luby's Cafeterias, Inc. 6,500 135
Lukens Inc. 4,150 128
Lydall, Inc. 5,800 132
M.S. Carriers, Inc.* 3,000 47
MAIC Holdings Inc.* 1,627 49
MAXXAM Inc.* 2,300 85
MDU Resources Group, Inc. 7,200 152
MESA Inc.* 12,400 53
MICROS Systems, Inc. 1,500 56
Mac Frugal's Bargains-
Close-outs, Inc.* 6,000 71
Macromedia Inc. 8,000 294
Madison Gas and Electric Co. 2,300 76
Mafco Consolidated Group
Inc.* 6,300 143
Magma Copper Co. (New) 12,000 201
Magna Group, Inc. 6,500 159
MagneTek, Inc.* 5,300 52
Manitowoc Co., Inc. 1,600 45
Marcus Corp. 3,700 128
Mariner Health Group, Inc.* 4,300 42
Mark Twain Bancshares, Inc. 4,100 143
Markel Corp.* 1,300 95
Marquette Electronics, Inc.
Class A* 9,400 172
Marshall Industries* 4,300 152
Mascotech, Inc. 16,500 169
Material Sciences Corp. 3,300 55
Maxicare Health Plans Inc.* 4,200 74
Maxim Integrated Products,
Inc. 2,100 157
Maxtor Corp.* 10,700 54
Maybelline, Inc. 2,900 69
McAfee Associates, Inc. 3,500 205
McClatchy Newspapers, Inc.
Class A 6,900 136
Measurex Corp. 3,600 111
Medic Computer Systems, Inc.* 2,900 155
Medicine Shoppe
International, Inc. 1,800 78
Medisense Inc.* 3,800 81
Medpartners Inc.* 4,700 131
Medusa Corp. 3,400 85
Men's Wearhouse, Inc. 3,200 126
Mentor Corp. 5,800 129
Mercury Interactive Corp.* 3,700 77
Meredith Corp. 6,800 243
Merisel, Inc.* 6,500 39
Mesa Airlines, Inc.* 7,900 75
Methode Electronics, Inc.
Class A 5,300 123
Meyer (Fred), Inc.* 7,200 134
Michaels Stores, Inc.* 5,600 77
Microchip Technology, Inc. 2,100 83
Microdyne Corp.* 2,700 75
Mid-Am, Inc. 3,320 55
Midamerican Energy Co. 9,261 148
Mikasa Inc.* 4,900 64
Miller (Herman), Inc. 6,300 188
Mine Safety Appliances Co. 1,200 61
Minerals Technologies, Inc. 4,900 195
Mississippi Chemical Corp. 5,800 139
Mohawk Industries, Inc.* 8,200 122
Molten Metal Technology,
Inc.* 5,100 198
Money Store Inc. 4,950 197
Morrison Knudsen Corp. 8,000 52
Movie Gallery Inc.* 3,000 115
Mueller Industries, Inc. 4,600 108
Multicare Cos., Inc.* 3,800 71
Musicland Stores Corp.* 6,800 44
Myers Industries, Inc. 5,450 78
NAC Re Corp. 4,900 172
NACCO Industries, Inc. Class
A 2,300 132
NCH Corp. 1,800 98
NL Industries, Inc.* 12,500 163
NYMAGIC, Inc. 2,000 32
Nabors Industries, Inc.* 21,100 182
National Auto Credit Inc.* 5,500 89
National Bancorp of Alaska,
Inc. 1,800 113
National Commerce Bancorp 6,200 160
National Computer Systems,
Inc. 3,400 64
National Data Corp. 5,800 154
National Instruments Corp.* 5,100 97
National Presto Industries,
Inc. 1,600 65
National RE Holdings Corp. 4,300 145
National Steel Corp. Class B* 9,600 127
Nautica Enterprises, Inc. 4,650 160
Neiman Marcus Group, Inc. 9,800 168
Nellcor Inc.* 7,296 421
Neostar Retail Group Inc.* 3,500 53
Netcom Online Communications* 2,500 145
Netmanage Inc. 10,800 221
Network Equipment
Technologies, Inc.* 4,400 144
Network General Corp.* 5,100 211
Network Peripherals Inc.* 2,400 25
New England Business Service,
Inc. 3,200 62
New Jersey Resources Corp. 3,700 93
</TABLE>
See accompanying Notes to Financial Statements.
F-19
<PAGE> 88
SchwabFunds(R) 7
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
Newfield Exploration Co.* 5,900 $ 174
Nexgen Inc.* 7,500 139
Nextel Communications, Inc.* 3,877 54
Noble Drilling Corp.* 22,975 162
Norand Corp.* 1,600 27
North American Mortgage Co. 3,800 78
North Fork Bancorp, Inc. 5,700 125
Northwest Natural Gas Co. 3,400 110
Norwest Corp. 3,680 109
NovaCare, Inc.* 14,080 88
Novellus Systems, Inc.* 600 41
Nu-Kote Holding, Inc. 4,900 101
Nuevo Energy Co.* 4,300 95
O'Reilly Automotive, Inc.* 2,100 69
OEA, Inc. 5,100 139
OM Group Inc. 2,700 79
ONBANCorp, Inc. 3,600 106
Oak Industries Inc.* 4,500 94
Oak Technology* 4,400 242
Oakwood Homes Corp. 6,200 233
Octel Communications Corp.* 5,600 191
Offshore Logistics, Inc.* 4,200 53
Olympic Financial Ltd.* 5,100 92
Omnicare, Inc. 6,600 239
One Valley Bancorp of
West Virginia, Inc. 4,700 157
Oneok Inc. 6,900 168
Opti Inc.* 2,400 24
Optical Data Systems, Inc. 3,900 117
OrNda Healthcorp* 9,760 173
Orange & Rockland Utilities,
Inc. 3,400 119
Orbital Sciences Corp.* 5,300 77
Oregon Steel Mills, Inc. 6,300 90
Orion Capital Corp. 3,200 131
Ostex International Inc.* 2,700 53
Otter Tail Power Co. 2,500 86
Outboard Marine Corp. 4,400 91
Outlet Communications Inc.* 1,800 83
Overseas Shipholding Group,
Inc. 9,200 156
Owens & Minor, Inc. 6,600 78
Oxford Health Plans, Inc. 2,200 173
PAXAR Corp. 4,687 59
PDT Inc. 2,400 91
PHH Corp. 3,900 171
PLATINUM technology, inc.* 12,300 225
Pairgain Technologies Inc.* 3,400 145
Papa John's International,
Inc.* 2,400 93
Park Electrochemical Corp. 2,600 81
Park National Corp. 1,500 68
Parker & Parsley Petroleum
Co. 8,300 154
Parker Drilling Co.* 21,100 111
Patlex Corp. (New)* 550 3
Patterson Dental Co. 3,850 95
Paxson Communications Corp. 6,500 80
Payless Cashways Inc.* 9,300 53
Penn Traffic Co.* 2,600 28
PennCorp Financial Group,
Inc. 6,900 165
People's Bank 8,600 171
People's Choice TV Corp.* 2,600 54
PeopleSoft, Inc. 600 52
Peoples Heritage Financial
Group, Inc. 3,800 73
Performance Systems
International Inc.* 7,100 126
Petrie Stores Corp. 12,300 35
Petrolite Corp. 2,400 58
Phillips-Van Heusen Corp. 5,700 58
Phoenix Resource Cos Inc. 3,200 57
Photronic, Inc. 2,950 88
Phycor, Inc. 6,900 253
Physician Reliance Network
Inc.* 5,300 176
Physician Sales & Service
Inc. 4,500 73
Physicians Corp. of America* 9,900 150
Physicians Health Services,
Inc.* 2,000 67
Picturetel Corp. 3,300 217
Piedmont Natural Gas Co.,
Inc. 9,400 207
Pier 1 Imports, Inc. 9,745 94
Pioneer Group, Inc. 6,100 160
Pioneer-Standard Electronics,
Inc. 5,025 69
Piper Jaffray Inc. 4,600 55
Pittway Corp. 800 48
Pittway Corp. Class A 3,200 192
Planar Systems, Inc.* 2,700 47
Players International Inc. 6,900 73
Playtex Products, Inc.* 12,300 86
Ply-Gem Industries, Inc. 2,800 48
Pogo Producing Co. 9,000 181
Polaris Industries Inc. 6,900 193
Policy Management Systems
Corp.* 2,000 94
Pratt & Lambert United, Inc. 2,100 44
Precision Castparts Corp. 4,800 172
Premier Bancorp, Inc. 7,900 163
Presidential Life Corp. 6,800 65
Presstek Inc. 3,350 160
Price Enterprises Inc. 5,300 78
Primadonna Resorts Inc.* 7,400 116
Primark Corp.* 4,600 105
Prime Hospitality Corp.* 6,900 68
Production Operators Corp. 2,200 65
Proffitt's, Inc.* 2,100 49
Progress Software Corp. 1,600 104
Protective Life Corp. 600 17
Protein Design Labs, Inc.* 3,300 55
Provident Bancorp, Inc. 3,700 155
Public Service Co. of
New Mexico* 10,200 171
Public Service Co. of
North Carolina, Inc. 6,000 95
Pulitzer Publishing Co. 4,025 182
Pulte Corp. 7,300 231
Quaker State Corp. 7,400 97
Quality Food Centers, Inc. 3,600 73
Quanex Corp. 2,800 55
Quantum Health Resources,
Inc.* 3,000 32
Quarterdeck Corp.* 5,200 111
Quick & Reilly Group, Inc. 5,580 133
Quintiles Transnational Corp. 2,500 159
RCSB Financial Inc. 3,600 80
Raymond James Financial, Inc. 4,400 95
Reading & Bates Corp.* 20,600 237
Regal Cinemas, Inc. 3,200 125
Regal-Beloit Corp. 4,500 81
Reinsurance Group of America,
Inc. 4,400 151
</TABLE>
See accompanying Notes to Financial Statements.
F-20
<PAGE> 89
SchwabFunds(R) 8
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
Reliance Group Holdings, Inc. 26,400 $ 195
Renaissance Commerce Corp. 6,600 148
Renal Treatment Centers Inc.* 2,200 79
Republic Waste Industries
Inc. 14,600 316
Respironics, Inc. 3,900 86
Rexel Inc.* 5,200 60
Rexene Corp.* 3,200 29
Richfood Holdings, Inc. 8,500 214
Riggs National Corp.* 11,100 145
Rio Hotel and Casino, Inc.* 4,900 62
River Forest Bancorp, Inc. 3,200 75
RoTech Medical Corp.* 3,100 72
Robert Half International
Inc. 6,900 252
Roberts Pharmaceutical Corp.* 4,600 89
Rock Tennessee Co. 6,700 111
Rogers Corp. 1,400 32
Rohr Inc.* 6,600 98
Rollins Environmental
Services, Inc.* 15,100 51
Rollins Truck Leasing Corp. 9,800 94
Roosevelt Financial Group,
Inc. 10,200 163
Roper Industries, Inc. 3,800 135
Ross Stores, Inc. 5,700 89
Rouge Steel Co. 3,500 76
Rowan Companies, Inc.* 21,100 140
Ruddick Corp. 11,200 143
Russ & Berrie Co., Inc. 8,500 118
Ryan's Family Steak Houses,
Inc.* 21,100 165
Rykoff-Sexton, Inc. 6,250 141
Ryland Group, Inc. 2,900 42
S & T Bancorp, Inc. 2,100 54
S3 Inc. 9,000 153
SCI Systems, Inc.* 7,300 257
SEI Corp. 4,200 90
STERIS Corp. 4,100 138
Safeguard Scientifics Inc. 3,300 149
Salick Health Care, Inc.* 2,600 95
Samsonite Corp. (New) 3,500 35
Sanifill, Inc.* 3,800 120
Sanmina Corp.* 1,900 103
Santa Cruz Operations, Inc.* 6,200 37
Savannah Foods & Industries,
Inc. 5,400 68
Savoy Pictures Entertainment,
Inc.* 7,200 42
Sbarro, Inc. 8,000 167
Schuler Homes, Inc.* 8,300 100
Scientific Games Holdings
Corp. 3,400 113
Scotts Co. Class A* 7,400 146
Seaboard Corp. 300 79
Seafield Capital Corp. 1,400 50
Seagull Energy Corp.* 8,600 147
Security Capital Corp. 2,300 126
Security Dynamics Tech 3,400 110
Seitel, Inc.* 2,100 54
Selective Insurance Group,
Inc. 4,400 163
Semitool Inc. 2,700 43
Sepracor Inc.* 5,200 88
Sequa Corp. Class A* 2,600 67
Sequent Computer Systems,
Inc.* 8,000 140
Service Merchandise Co.,
Inc.* 23,562 127
Shiva Corp.* 3,100 186
Shoney's, Inc.* 10,200 113
ShopKo Stores, Inc. 12,800 138
Shorewood Packaging Corp.* 4,900 81
Showboat, Inc. 3,300 79
Shurgard Storage Centers Inc. 5,800 148
Sierra Health Services, Inc.* 3,100 89
Sierra On-Line, Inc. 4,300 161
Sierra Pacific Resources 7,000 164
Silicon Valley Group, Inc.* 5,700 184
Sithe Energies Inc.* 13,700 98
SkyWest Airlines, Inc. 2,300 39
Smart & Final Inc. 5,000 94
Smith International, Inc.* 8,600 138
Smith's Food & Drug Centers,
Inc. Class B 4,200 96
Smithfield Foods, Inc.* 3,400 86
Smucker (J.M.) Co. Class A 6,900 135
Smucker (J.M.) Co. Class B 3,500 63
Snyder Oil Corp. 6,500 67
Sofamor/Danek Group, Inc.* 5,800 142
Somatogen Inc.* 4,400 70
Sonat Offshore Drilling, Inc. 6,700 213
South Jersey Industries, Inc. 2,800 57
Southdown, Inc.* 6,400 104
Southern Indiana
Gas & Electric Co. 3,966 134
Southwest Gas Corp. 4,900 74
Southwestern Energy Co. 4,900 61
Sovereign Bancorp, Inc. 10,179 102
SpaceLabs Medical Inc.* 2,800 71
Spectrian Corp.* 1,700 37
Spectrum HoloByte, Inc.* 5,100 53
Sports & Recreation, Inc. 3,600 27
Sports Authority Inc.* 4,600 100
Springs Industries, Inc. 4,900 210
St. John's Knits, Inc. 2,100 101
St. Paul Bancorp, Inc. 4,500 108
Standard Financial Inc.* 4,300 60
Standard Motor Products, Inc. 2,500 41
Standard Products Co. 3,900 60
Standard Register Co. 7,700 175
Standex International Corp. 3,000 98
Stanhome Inc. 4,700 143
State Auto Financial Corp. 3,100 69
Station Casinos Inc* 8,100 104
Stein Mart, Inc.* 4,300 48
Sterling Chemicals, Inc.* 15,200 122
Stewart Enterprises, Inc.
Class A 5,300 179
Stillwater Mining Co.* 4,800 80
Stone & Webster, Inc. 3,100 104
Stone Container Corp. 6,112 101
Stratacom Inc. 1,400 86
Stratosphere Corp.* 7,200 72
Stratus Computer, Inc.* 6,600 205
Stride Rite Corp. 12,200 137
Structural Dynamics Research
Corp.* 7,300 134
Student Loan Corp. 5,000 158
Sturm, Ruger & Co., Inc. 2,700 73
Sumitomo Bank California 4,000 94
Summit Bancorp 7,860 222
Summit Technology Inc.* 5,100 226
Sun Healthcare Group, Inc.* 12,708 151
</TABLE>
See accompanying Notes to Financial Statements.
F-21
<PAGE> 90
SchwabFunds(R) 9
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
Sunglass Hut International,
Inc. 9,600 $ 260
Sunrise Medical Inc.* 4,300 78
Sunshine Mining Co.* 43,700 71
Surgical Care Affiliates,
Inc. 10,650 316
Susquehanna Bancshares, Inc. 2,500 73
Swift Transportation Co. 5,100 85
Symantec Corp.* 7,700 187
Symmetricom, Inc.* 2,900 54
Synetic, Inc.* 4,100 96
Synopsys, Inc. 400 15
System Software Associates,
Inc. 6,600 204
Systems & Computer Technology
Corp.* 2,600 47
TBC Corp.* 4,900 35
TCA Cable TV, Inc. 5,800 173
TJ International 4,900 85
TNT Freightways Corp. 5,500 100
TSX Corp. 2,100 41
Target Therapeutics Inc.* 1,700 131
Tech Data Corp.* 9,000 110
Tecnol Inc.* 4,400 82
Tejas Gas Corp. 2,530 119
Tekelec Inc. 2,800 41
Teleflex Inc. 3,950 167
Telular Corp.* 4,800 66
Telxon Corp. 4,000 92
Tencor Instruments 5,000 214
Tennant Co. 2,100 53
Terra Industries, Inc. 14,700 186
Tesoro Petroleum Corp.* 7,800 61
Tetra Tech, Inc. (New) 3,906 85
Texas Industries, Inc. 2,600 137
Theratx Inc.* 4,500 51
Thermedics Inc.* 8,200 151
Thermo Cardiosystems Inc.* 4,700 228
Thermo Fibertek Inc. 16,050 253
Thermotrex Corp. 4,500 161
Thiokol Corp. 5,100 177
Thomas Nelson, Inc. 4,125 69
Three-Five Systems, Inc. 1,700 31
Tiffany & Co. (New) 3,900 170
Timberland Co. Class A* 2,500 48
Titan Wheel International,
Inc. 5,225 76
Toll Brothers, Inc.* 7,300 130
Topps Co., Inc. 9,500 59
Toro Co. 2,600 75
Toy Biz Inc.* 3,800 85
Toys 'R' Us, Inc.* 730 16
Transpro Inc.* 1,275 14
Trenwick Group Inc. 1,400 70
Triangle Pacific Corp.* 3,200 50
Triarc Cos., Inc. Class A* 6,400 61
Trident Microsystems Inc.* 2,300 69
Trimble Navigation Ltd.* 5,000 99
True North Communications 5,500 111
Trust Co. of New Jersey (New) 3,900 51
TrustCo Bank Corp New York 3,904 84
Trustmark Corp. 8,200 157
Tuscon Electric Power Co.* 34,100 102
Tyco Toys, Inc.* 6,800 37
U S Delivery Systems Inc.* 4,500 93
U S Trust Corp. (New) 2,000 96
U.S. Home Corp. (New)* 2,200 59
U.S. Robotics, Inc. 6,800 632
UGI Corp. 7,800 164
UMB Financial Corp. 4,816 208
UNR Industries, Inc. 12,200 101
US Filter Corp. (New) 5,700 133
USA Waste Services, Inc.* 13,907 292
USAir Group, Inc.* 17,200 234
UST Corp.* 4,400 61
Ultratech Stepper Inc. 4,700 188
UniFirst Corp. 3,900 55
Unicom Corp. 2,400 79
Union Planters Corp. 7,788 239
Uniroyal Chemical Corp.* 5,400 42
United Bankshares, Inc. 2,500 76
United Carolina Bancshares
Corp. 3,300 118
United Companies Financial
Corp. 6,440 181
United Illuminating Co. 3,400 129
United Insurance Companies,
Inc. 9,300 156
United International Holdings
Inc.* 4,900 74
United Meridian Corp.* 6,600 111
United Stationers Inc. 3,990 155
United Television, Inc. 2,400 205
United Waste Systems, Inc.* 3,500 138
United Water Resources Inc. 9,300 117
United Wisconsin Services,
Inc. 2,500 62
Unitrode Corp.* 2,300 62
Univar Corp. 4,300 58
Universal Health Services,
Inc. Class B* 3,300 124
VLSI Technology, Inc.* 7,500 176
Valassis Communications,
Inc.* 10,600 147
Valley National Bancorp 7,824 191
Valmont Industries, Inc. 3,300 80
Value City Department Stores,
Inc.* 5,900 35
Value Health, Inc.* 2,338 53
Value Line, Inc. 2,100 70
Varco International, Inc.* 9,900 90
Vencor, Inc. 11,687 324
Ventritex, Inc.* 5,000 98
VeriFone, Inc.* 5,500 149
Vertex Pharmaceuticals, Inc.* 4,300 71
Vesta Insurance Group Inc. 4,500 182
Vicor Corp. 8,600 173
Vigoro Corp. 4,100 178
Vintage Petroleum, Inc. 5,200 105
Vital Signs Inc. 2,900 53
Vitalink Pharmacy Services,
Inc.* 2,600 48
Vivra, Inc. 5,400 178
WD-40 Co. 1,700 67
WHX Corp.* 11,700 121
WICOR, Inc. 3,600 107
WLR Foods, Inc. 3,450 48
WMS Industries Inc.* 5,800 114
WPS Resources Corp. 6,000 187
Waban, Inc.* 8,100 127
Wabash National Corp. 4,900 124
Wallace Computer Services,
Inc. 4,600 259
Wang Laboratories, Inc.* 8,300 140
</TABLE>
See accompanying Notes to Financial Statements.
F-22
<PAGE> 91
SchwabFunds(R) 10
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Value
of Shares (000s)
--------- --------
<S> <C> <C>
Washington Energy Co. 5,300 $ 97
Washington National Corp. 4,900 111
Watkins-Johnson Co. 2,500 120
Watson Pharmaceuticals Inc.* 8,556 385
Watts Industries, Inc. Class
A 6,600 136
Wausau Paper Mills Co. 7,056 171
Weatherford Enterra Inc.* 12,654 305
Webb (Del) Corp. 4,200 87
Weirton Steel Corp.* 8,300 37
Wellman, Inc. 300 7
Werner Enterprises, Inc. 6,300 119
West Company, Inc. 3,400 84
WestPoint Stevens, Inc. 8,100 173
Westamerica Bancorp 2,400 95
Westcorp, Inc. 5,596 94
Westcott Communications,
Inc.* 4,000 56
Western Gas Resources, Inc. 5,400 84
Western Publishing Group
Inc.* 4,800 39
Western Waste Industries* 6,200 122
Westinghouse Air Brake
Co. (New)* 6,600 58
Westwood One, Inc.* 7,900 125
Whitney Holding Corp. 3,200 98
Williams Companies, Inc. 206 8
Williams-Sonoma, Inc. 6,200 109
Winnebago Industries, Inc. 4,100 33
Wisconsin Central
Transportation Corp. 500 30
Wolverine Tube Inc.* 3,800 135
Wolverine World Wide, Inc. 3,600 108
Wonderware Corp.* 2,600 83
Work Recovery Inc.* 13,000 17
World Acceptance Corp. 5,300 69
Wyle Laboratories 3,000 128
Wyman-Gordon Co.* 8,700 110
X-Rite, Inc. 4,500 69
Yankee Energy System, Inc. 1,900 41
Yellow Corp. 7,100 94
Zale Corp. (New)* 8,000 119
Zebra Technologies Corp.
Class A* 3,200 190
Zeigler Coal Holding Co. 6,700 79
Zenith Electronics Corp.* 11,100 93
Zenith National Insurance
Corp. 4,300 100
Zero Corp. 3,600 55
Zilog, Inc.* 4,100 146
Zions Bancorp 3,500 243
Zurn Industries, Inc. 5,000 108
--------
TOTAL COMMON STOCK
(Cost $107,206) 120,832
--------
<CAPTION>
Maturity Value
(000s) (000s)
--------- --------
<S> <C> <C>
REPURCHASE AGREEMENT--1.1%
State Street Bank & Trust 4.75%
Dated 10/31/95
Due 11/01/95 Collateralized
By:
U.S. Treasury Bond
$940,000 Par; 12%
Due 8/15/13 $1,400 $ 1,400
--------
TOTAL REPURCHASE AGREEMENT
(Cost $1,400) 1,400
--------
TOTAL INVESTMENTS -- 100.1%
(Cost $108,606) 122,232
--------
OTHER ASSETS AND
LIABILITIES -- (0.1%)
Other Assets 325
Liabilities (483)
--------
(158)
--------
NET ASSETS -- 100.0%
Applicable to 10,431,988
outstanding $0.00001
par value shares
(unlimited shares authorized) $122,074
========
NET ASSET VALUE PER SHARE $11.70
======
</TABLE>
- ------------------
*Non-Income Producing Security
See accompanying Notes to Financial Statements.
F-23
<PAGE> 92
SchwabFunds(R) 11
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
STATEMENT OF OPERATIONS (in thousands)
For the year ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends $ 1,072
Interest 133
--------
Total investment income 1,205
--------
Expenses:
Investment advisory and administration fee 447
Transfer agency and shareholder service fees 223
Custodian fees 95
Registration fees 46
Professional fees 25
Shareholder reports 35
Trustees' fees 21
Amortization of deferred organization costs 15
Insurance and other expenses 5
--------
912
Less expenses reduced (303)
--------
Total expenses incurred by Fund 609
--------
Net investment income 596
--------
Net realized gain (loss) on investments:
Proceeds from sales of investments 27,327
Cost of investments sold (27,036)
--------
Net realized gain on investments sold 291
--------
Change in net unrealized appreciation on investments:
Beginning of period 597
End of period 13,626
--------
Increase in net unrealized appreciation on investments 13,029
--------
Net gain on investments 13,320
--------
Increase in net assets resulting from operations $ 13,916
========
</TABLE>
See accompanying Notes to Financial Statements.
F-24
<PAGE> 93
SchwabFunds(R) 12
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
STATEMENT OF CHANGES IN NET ASSETS (in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the December 3, 1993
year ended (commencement of
October 31, operations) to
1995 October 31, 1994
----------- ----------------
<S> <C> <C>
Operations:
Net investment income $ 596 $ 353
Net realized gain (loss) on
investments sold 291 (528)
Increase in net unrealized appreciation
on investments 13,029 597
-------- --------
Increase in net assets resulting from
operations 13,916 422
-------- --------
Dividends to shareholders from
net investment income (408) (57)
-------- --------
Capital Share Transactions:
Proceeds from shares sold 64,687 78,646
Net asset value of shares issued in
reinvestment of dividends 364 53
Early withdrawal fees 41 27
Less payments for shares redeemed (24,654) (10,963)
-------- --------
Increase in net assets from capital
share transactions 40,438 67,763
-------- --------
Total increase in net assets 53,946 68,128
Net Assets:
Beginning of period 68,128 --
-------- --------
End of period (including undistributed
net investment income of $484 and
$296, respectively) $ 122,074 $ 68,128
======== ========
Number of Fund Shares:
Sold 5,910 7,884
Reinvested 38 5
Redeemed (2,296) (1,109)
-------- --------
Net increase in shares outstanding 3,652 6,780
Shares Outstanding:
Beginning of period 6,780 --
-------- --------
End of period 10,432 6,780
======== ========
</TABLE>
See accompanying Notes to Financial Statements.
F-25
<PAGE> 94
SchwabFunds(R) 13
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
NOTES TO FINANCIAL STATEMENTS
For the year ended October 31, 1995
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE FUND
The Schwab Small-Cap Index Fund (the "Fund") is a series of Schwab Capital Trust
(the "Trust"), an open-end, management investment company organized as a
Massachusetts business trust on May 7, 1993 and registered under the Investment
Company Act of 1940, as amended.
In addition to the Fund, the Trust also offers -- the Schwab International Index
Fund(TM), the Schwab Asset Director(R)-High Growth Fund, the Schwab Asset
Director(R)-Conservative Growth Fund and the Schwab Asset Director(R)-Balanced
Growth Fund. The assets of each series are segregated and accounted for
separately.
The investment objective of the Fund is to attempt to track the price and
dividend performance (total return) of the Schwab Small-Cap Index(TM), an index
created to represent the performance of the second 1,000 largest publicly traded
common stocks issued by United States companies.
2. SIGNIFICANT ACCOUNTING POLICIES
Security valuation -- Investments in securities traded on an exchange are valued
at the last quoted sale price for a given day, or if a sale is not reported for
that day, at the mean between the most recent quoted bid and asked prices.
Unlisted securities for which market quotations are readily available are valued
at the mean between the most recent bid and asked prices. Securities for which
no quotations are readily available are valued at fair value as determined in
good faith by the Fund's investment manager pursuant to Board of Trustees'
guidelines. Short-term securities with 60 days or less to maturity are stated at
amortized cost, which approximates market value.
Security transactions and investment income -- Security transactions, in the
accompanying financial statements, are accounted for on a trade date basis (date
the order to buy or sell is executed). Dividend income and distributions to
shareholders are recorded on the ex-dividend date; interest income is recorded
on the accrual basis. Realized gains and losses from security transactions are
determined on an identified cost basis.
Repurchase agreements -- Repurchase agreements are fully collateralized by U.S.
Treasury or Government agency securities. All collateral is held by the Fund's
custodian and is monitored daily to ensure that its market value at least equals
the repurchase price under the agreement.
Deferred organization costs -- Costs incurred in connection with the
organization of the Fund, its initial registration with the Securities and
Exchange Commission and with various states are amortized on a straight-line
basis over a five year period from the Fund's commencement of operations.
Expenses -- Expenses arising in connection with the Fund are charged directly to
the Fund. Expenses common to all series of the Trust are allocated to each
series in proportion to their relative net assets.
F-26
<PAGE> 95
SchwabFunds(R) 14
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
NOTES TO FINANCIAL STATEMENTS
For the year ended October 31, 1995
- --------------------------------------------------------------------------------
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 substantially 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 tax purposes.
At October 31, 1995, (for financial reporting and federal income tax purposes),
net unrealized appreciation aggregated $13,626,000, of which $22,090,000 related
to appreciated securities and $8,464,000 related to depreciated securities.
3. TRANSACTIONS WITH AFFILIATES
Investment advisory and administration agreement -- The Trust has an investment
advisory and administration agreement with Charles Schwab Investment Management,
Inc. (the "Investment Manager"). For advisory services and facilities furnished,
the Fund pays an annual fee, payable monthly, of .50% of the first $300 million
of average daily net assets and .45% of such assets over $300 million. Under
this agreement, the Fund incurred investment advisory and administration fees of
$447,000 during the year ended October 31, 1995, before the Investment Manager
reduced its fee (see Note 5).
Sub-advisory agreement -- Prior to May 1, 1995, the Investment Manager had a
sub-advisory agreement with Dimensional Fund Advisors Inc. ("Dimensional"),
under which Dimensional performed day-to-day portfolio management for the Fund.
Dimensional did not receive compensation directly from the Fund. However, the
Investment Manager did pay Dimensional an annual fee, payable monthly, of .10%
of the first $300 million of average daily net assets and .05% of such assets
over $300 million.
Effective May 1, 1995, the sub-advisory agreement for the Fund was terminated
and the Investment Manager assumed day-to-day portfolio management
responsibility for the Fund.
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 .05% of the average daily net assets for
transfer agency services and .20% of such assets for shareholder services. For
the year ended October 31, 1995, the Fund incurred transfer agency and
shareholder service fees of $223,000, before Schwab reduced its fees (see Note
5).
Officers and trustees -- During the period, certain officers and trustees of the
Trust were also officers or directors of the Investment Manager and/or Schwab.
During the year ended October 31, 1995, the Trust made no direct payments to its
officers or trustees who were "interested persons" within the meaning of the
Investment Company Act of 1940, as amended. The Fund incurred fees of $21,000
related to the Trust's unaffiliated trustees.
F-27
<PAGE> 96
SchwabFunds(R) 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. BORROWING AGREEMENT
The Trust has an arrangement with State Street Bank and Trust Company, the
Fund's custodian, whereby the Fund may borrow up to $10,000,000, on a temporary
basis, to fund redemptions. Amounts borrowed under this arrangement bear
interest at periodically negotiated rates and may be collateralized by the
assets of the Fund. During the year ended October 31, 1995, no borrowings were
made under this arrangement.
5. EXPENSES REDUCED BY THE INVESTMENT MANAGER AND SCHWAB
The Investment Manager and Schwab reduced a portion of their fees in order to
limit the Fund's ratio of operating expenses to average net assets. For the year
ended October 31, 1995, the total of such fees reduced by the Investment Manager
was $115,000 and the total of such fees reduced by Schwab was $188,000.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, other than short-term obligations,
aggregated $69,455,000 and $27,327,000, respectively, for the year ended October
31, 1995.
7. EARLY WITHDRAWAL FEES PAID TO THE FUND
The Fund assesses a .50% early withdrawal fee on redemption proceeds
attributable to shares purchased and held less than six months. The early
withdrawal fee is retained by the Fund and is treated as a contribution to
capital. For the year ended October 31, 1995, total early withdrawal fees
retained by the Fund amounted to $41,000.
8. COMPOSITION OF NET ASSETS
At October 31, 1995, net assets consisted of:
<TABLE>
<S> <C>
Capital paid in $108,201,000
Accumulated undistributed net investment income 484,000
Accumulated net realized loss on investments sold (237,000)
Net unrealized appreciation on investments 13,626,000
------------
Total $122,074,000
============
</TABLE>
At October 31, 1995, the Fund's Statement of Net Assets included receivable for
Fund shares sold of $194,000 in addition to liabilities of $346,000 for
securities purchased, $48,000 for Fund shares redeemed and $29,000 for
investment advisory and administration fee payable.
F-28
<PAGE> 97
SchwabFunds(R) 16
- --------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND(R)
NOTES TO FINANCIAL STATEMENTS
For the year ended October 31, 1995
- --------------------------------------------------------------------------------
9. FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the
period:
<TABLE>
<CAPTION>
For the period
December 3, 1993
For the (commencement of
year ended operations) to
October 31, 1995 October 31, 1994
---------------- ------------------
<S> <C> <C>
Net asset value at beginning of period $ 10.05 $ 10.00
Income from Investment Operations
- -----------------------------------
Net investment income .10 .06
Net realized and unrealized gain
on investments 1.61 --
-------- -------
Total from investment operations 1.71 .06
Less Distributions
- -----------------
Dividends from net investment income (.06) (.01)
Distributions from realized gain on
investments -- --
-------- -------
Total distributions (.06) (.01)
-------- -------
Net asset value at end of period $ 11.70 $ 10.05
======== =======
Total return (%) 17.11 .63
- ----------------
Ratios/Supplemental Data
- --------------------------
Net assets, end of period (000s) $122,074 $ 68,128
Ratio of expenses to average net assets
(%) .68 .67*
Ratio of net investment income to
average net assets (%) .68 .68*
Portfolio turnover rate (%) 24 16
</TABLE>
The Investment Manager and Schwab have reduced a portion of their fees and
absorbed certain expenses in order to limit the Fund's ratio of operating
expenses to average net assets. Had these fees and expenses not been reduced and
absorbed, the ratio of expenses to average net assets for the periods ended
October 31, 1995 and 1994, would have been 1.02% and 1.19%*, respectively, and
the ratio of net investment income to average net assets would have been .34%
and .16%*, respectively.
* Annualized
F-29
<PAGE> 98
SchwabFunds(R) 17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
To the Board of Trustees
and Shareholders of the Schwab Small-Cap Index Fund(R)
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets present fairly, in all
material respects, the financial position of the Schwab Small-Cap Index Fund
(one of the series constituting Schwab Capital Trust, hereafter referred to as
the "Trust") at October 31, 1995, and the results of its operations and the
changes in its net assets for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audits 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 October 31, 1995 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
San Francisco, California
November 22, 1995
1995 SPECIAL TAX INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
NOTICE TO CORPORATE SHAREHOLDERS
100% of the Fund's distributions for the fiscal year ended October 31,
1995 qualify for the corporate dividends received deduction.
- --------------------------------------------------------------------------------
F-30
<PAGE> 99
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholder
of the Schwab Asset Director(R) - High Growth Fund
In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of the Schwab Asset
Director - High Growth Fund (the "Fund"), a series of Schwab Capital Trust, at
October 31, 1995, in conformity with generally accepted accounting principles.
This financial statement is the responsibility of the Fund's management; our
responsibility is to express an opinion on this financial statement based on our
audit. We conducted our audit of this financial statement in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statement is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse
San Francisco, California
November 22, 1995
F-31
<PAGE> 100
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND
(A SERIES OF SCHWAB CAPITAL TRUST)
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<S> <C>
Cash $ 1,000
Deferred organization costs 17,810
Payable to Charles Schwab Investment Management, Inc. (17,810)
--------
Net Assets $ 1,000
========
Number of shares of beneficial interest issued and
outstanding, $0.00001 par value (unlimited shares authorized) 100
========
Net Asset Value and Offering Price Per Share at October 31, 1995 $ 10.00
========
</TABLE>
The Notes to the Statement of Assets and Liabilities are an integral part of
this financial statement.
F-32
<PAGE> 101
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND
(A SERIES OF SCHWAB CAPITAL TRUST)
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
1. ORGANIZATION
The Schwab Asset Director - High Growth Fund (the "Fund") is a series of Schwab
Capital Trust (the "Trust"), which is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end, no-load, management
investment company. The Trust was established on May 7, 1993 under the laws of
the Commonwealth of Massachusetts as a Massachusetts business trust. As of
October 31, 1995, the Fund has had no operations other than activities relating
to its organization and the registration of its shares of beneficial interest
under the Securities Act of 1933 and the sale and issuance of 100 shares to
Charles Schwab & Co., Inc. at $10.00 per share.
In addition to the Fund, the Trust also offers the Schwab International Index
Fund(TM), the Schwab Small-Cap Index Fund(R), the Schwab Asset Director-Balanced
Growth Fund and the Schwab Asset Director -Conservative Growth Fund.
2. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
The Trust has an investment advisory and administration agreement with Charles
Schwab Investment Management, Inc. (the "Investment Manager") under which the
Fund will pay a fee for investment advisory and administrative services upon
commencement of the Fund. For advisory services and facilities furnished, the
Fund will pay an annual fee, payable, monthly, of .74% of the first $1 billion
of average daily net assets, .69% of such net assets over $1 billion, and .64%
of such net assets in excess of $2 billion.
The Investment Manager has executed a sub-advisory agreement with Symphony Asset
Management, Inc. ("Symphony"), a wholly-owned subsidiary of BARRA, Inc. Under
this agreement, Symphony will be responsible for recommending the target asset
allocation mix for the tactical asset allocation component of the Fund. Symphony
does not receive compensation directly from the Fund. However, the Investment
Manager will pay Symphony an annual fee, payable monthly, of .08% of the first
$100 million of aggregate average daily net assets of the three Asset Director
Funds, .06% of such net assets of the next $150 million, .04% of such net assets
of the next $600 million and .02% of such net assets over $850 million.
The Trust has transfer agency and shareholder service agreements with Charles
Schwab & Co., Inc. ("Schwab"), under which the Fund will pay fees for transfer
agency and shareholder services. Upon commencement of operations, Schwab will
receive an annual fee, payable monthly, of .05% of average daily net assets for
transfer agency services and .20% of such net assets for shareholder services.
F-33
<PAGE> 102
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND
(A SERIES OF SCHWAB CAPITAL TRUST)
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
The Investment Manager and Schwab are, respectively, direct and indirect
wholly-owned subsidiaries of The Charles Schwab Corporation.
3. DEFERRED ORGANIZATION COSTS
Costs incurred in connection with the Fund's organization have been incurred by
the Investment Manager and are an obligation to be paid by the Fund. These costs
will be amortized over the period of benefit, but not to exceed 60 months from
the commencement of operations of the Fund.
F-34
<PAGE> 103
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholder
of the Schwab Asset Director(R) - Balanced Growth Fund
In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of the Schwab Asset
Director - Balanced Growth Fund (the "Fund"), a series of Schwab Capital Trust,
at October 31, 1995, in conformity with generally accepted accounting
principles. This financial statement is the responsibility of the Fund's
management; our responsibility is to express an opinion on this financial
statement based on our audit. We conducted our audit of this financial statement
in accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse
San Francisco, California
November 22, 1995
F-35
<PAGE> 104
SCHWAB ASSET DIRECTOR(R) - BALANCED GROWTH FUND
(A SERIES OF SCHWAB CAPITAL TRUST)
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<S> <C>
Cash $ 1,000
Deferred organization costs 17,810
Payable to Charles Schwab Investment Management, Inc. (17,810)
--------
Net Assets $ 1,000
========
Number of shares of beneficial interest issued and
outstanding, $0.00001 par value (unlimited shares authorized) 100
========
Net Asset Value and Offering Price Per Share at October 31, 1995 $ 10.00
========
</TABLE>
The Notes to the Statement of Assets and Liabilities are an integral part of
this financial statement.
F-36
<PAGE> 105
SCHWAB ASSET DIRECTOR(R) - BALANCED GROWTH FUND
(A SERIES OF SCHWAB CAPITAL TRUST)
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
1. ORGANIZATION
The Schwab Asset Director - Balanced Growth Fund (the "Fund") is a series of
Schwab Capital Trust (the "Trust"), which is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end, no-load, management
investment company. The Trust was established on May 7, 1993 under the laws of
the Commonwealth of Massachusetts as a Massachusetts business trust. As of
October 31, 1995, the Fund has had no operations other than activities relating
to its organization and the registration of its shares of beneficial interest
under the Securities Act of 1933 and the sale and issuance of 100 shares to
Charles Schwab & Co., Inc. at $10.00 per share.
In addition to the Fund, the Trust also offers the Schwab International Index
Fund(TM), the Schwab Small-Cap Index Fund(R), the Schwab Asset Director - High
Growth Fund and the Schwab Asset Director - Conservative Growth Fund.
2. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
The Trust has an investment advisory and administration agreement with Charles
Schwab Investment Management, Inc. (the "Investment Manager") under which the
Fund will pay a fee for investment advisory and administrative services upon
commencement of the Fund. For advisory services and facilities furnished, the
Fund will pay an annual fee, payable, monthly, of .74% of the first $1 billion
of average daily net assets, .69% of such net assets over $1 billion, and .64%
of such net assets in excess of $2 billion.
The Investment Manager has executed a sub-advisory agreement with Symphony Asset
Management, Inc. ("Symphony"), a wholly-owned subsidiary of BARRA, Inc. Under
this agreement, Symphony will be responsible for recommending the target asset
allocation mix for the tactical asset allocation component of the Fund. Symphony
does not receive compensation directly from the Fund. However, the Investment
Manager will pay Symphony an annual fee, payable monthly, of .08% of the first
$100 million of aggregate average daily net assets of the three Asset Director
Funds, .06% of such net assets of the next $150 million, .04% of such net assets
of the next $600 million and .02% of such net assets over $850 million.
The Trust has transfer agency and shareholder service agreements with Charles
Schwab & Co., Inc. ("Schwab"), under which the Fund will pay fees for transfer
agency and shareholder services. Upon commencement of operations, Schwab will
receive an annual fee, payable monthly, of .05% of average daily net assets for
transfer agency services and .20% of such net assets for shareholder services.
F-37
<PAGE> 106
SCHWAB ASSET DIRECTOR(R) - BALANCED GROWTH FUND
(A SERIES OF SCHWAB CAPITAL TRUST)
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
The Investment Manager and Schwab are, respectively, direct and indirect
wholly-owned subsidiaries of The Charles Schwab Corporation.
3. DEFERRED ORGANIZATION COSTS
Costs incurred in connection with the Fund's organization have been incurred by
the Investment Manager and are an obligation to be paid by the Fund. These costs
will be amortized over the period of benefit, but not to exceed 60 months from
the commencement of operations of the Fund.
F-38
<PAGE> 107
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholder
of the Schwab Asset Director(R) - Conservative Growth Fund
In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of the Schwab Asset
Director - Conservative Growth Fund (the "Fund"), a series of Schwab Capital
Trust, at October 31, 1995, in conformity with generally accepted accounting
principles. This financial statement is the responsibility of the Fund's
management; our responsibility is to express an opinion on this financial
statement based on our audit. We conducted our audit of this financial statement
in accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse
San Francisco, California
November 22, 1995
F-39
<PAGE> 108
SCHWAB ASSET DIRECTOR(R) - CONSERVATIVE GROWTH FUND
(A SERIES OF SCHWAB CAPITAL TRUST)
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<S> <C>
Cash $ 1,000
Deferred organization costs 17,810
Payable to Charles Schwab Investment Management, Inc. (17,810)
--------
Net Assets $ 1,000
========
Number of shares of beneficial interest issued and
outstanding, $0.00001 par value (unlimited shares authorized) 100
========
Net Asset Value and Offering Price Per Share at October 31, 1995 $ 10.00
========
</TABLE>
The Notes to the Statement of Assets and Liabilities are an integral part of
this financial statement.
F-40
<PAGE> 109
SCHWAB ASSET DIRECTOR(R) - CONSERVATIVE GROWTH FUND
(A SERIES OF SCHWAB CAPITAL TRUST)
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
1. ORGANIZATION
The Schwab Asset Director - Conservative Growth Fund (the "Fund") is a series of
Schwab Capital Trust (the "Trust"), which is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end, no-load, management
investment company. The Trust was established on May 7, 1993 under the laws of
the Commonwealth of Massachusetts as a Massachusetts business trust. As of
October 31, 1995, the Fund has had no operations other than activities relating
to its organization and the registration of its shares of beneficial interest
under the Securities Act of 1933 and the sale and issuance of 100 shares to
Charles Schwab & Co., Inc. at $10.00 per share.
In addition to the Fund, the Trust also offers the Schwab International Index
Fund(TM), the Schwab Small-Cap Index Fund(R), the Schwab Asset Director - High
Growth Fund and the Schwab Asset Director - Balanced Growth Fund.
2. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
The Trust has an investment advisory and administration agreement with Charles
Schwab Investment Management, Inc. (the "Investment Manager") under which the
Fund will pay a fee for investment advisory and administrative services upon
commencement of the Fund. For advisory services and facilities furnished, the
Fund will pay an annual fee, payable, monthly, of .74% of the first $1 billion
of average daily net assets, .69% of such net assets over $1 billion, and .64%
of such net assets in excess of $2 billion.
The Investment Manager has executed a sub-advisory agreement with Symphony Asset
Management, Inc. ("Symphony"), a wholly-owned subsidiary of BARRA, Inc. Under
this agreement, Symphony will be responsible for recommending the target asset
allocation mix for the tactical asset allocation component of the Fund. Symphony
does not receive compensation directly from the Fund. However, the Investment
Manager will pay Symphony an annual fee, payable monthly, of .08% of the first
$100 million of aggregate average daily net assets of the three Asset Director
Funds, .06% of such net assets of the next $150 million, .04% of such net assets
of the next $600 million and .02% of such net assets over $850 million.
The Trust has transfer agency and shareholder service agreements with Charles
Schwab & Co., Inc. ("Schwab"), under which the Fund will pay fees for transfer
agency and shareholder services. Upon commencement of operations, Schwab will
receive an annual fee, payable monthly, of .05% of average daily net assets for
transfer agency services and .20% of such net assets for shareholder services.
F-41
<PAGE> 110
SCHWAB ASSET DIRECTOR(R) - CONSERVATIVE GROWTH FUND
(A SERIES OF SCHWAB CAPITAL TRUST)
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
The Investment Manager and Schwab are, respectively, direct and indirect
wholly-owned subsidiaries of The Charles Schwab Corporation.
3. DEFERRED ORGANIZATION COSTS
Costs incurred in connection with the Fund's organization have been incurred by
the Investment Manager and are an obligation to be paid by the Fund. These costs
will be amortized over the period of benefit, but not to exceed 60 months from
the commencement of operations of the Fund.
F-42
<PAGE> 111
SchwabFunds 1
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
COMMON STOCK--74.7%
AUSTRALIA--0.4%
Amcor Ltd. 2,513 $ 16,338
Australia & New Zealand Banking Group 6,047 28,919
Broken Hill Proprietary Co., Ltd. 7,922 112,791
CRA Ltd. 2,587 38,713
Commonwealth Bank Group 3,883 30,313
National Australia Bank 5,726 51,009
News Corp., Ltd. 8,155 47,731
Western Mining Corp. 4,539 30,007
Westpac Banking Corp. 5,767 27,129
--------
382,950
--------
BELGIUM--0.1%
Electrabel 167 37,212
Electrabel, AFV1 44 9,891
Petrofina SA 95 26,742
Societe Generale de Belgique 195 15,426
Tractebel Investor International Capital 32 12,499
Tractebel Investor International Capital 32 12,341
--------
114,111
--------
CANADA--0.6%
Alcan Aluminum Ltd. 975 31,463
BCE Inc. 1,351 47,808
Bank of Montreal 1,152 26,825
Bank of Nova Scotia Halifax 999 22,530
Barrick Gold Corp. 2,344 71,343
Canadian Imperial Bank of Commerce 1,049 31,543
Canadian Pacific Ltd. 1,482 29,482
Imperial Oil Ltd. 835 32,840
Noranda Inc. 1,017 21,537
Northern Telecom Ltd. 1,099 52,290
Placer Dome Inc. 1,035 29,604
Royal Bank Canada Montreal Quebec 1,360 31,793
Seagram Co. Ltd. 1,305 42,232
Thomson Corp. 2,550 37,170
</TABLE>
F-43
See accompanying Notes to Financial Statements.
<PAGE> 112
SchwabFunds 2
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Toronto-Dominion Bank 1,305 $ 22,611
----------
531,071
----------
DENMARK--0.0%
Tele Danmark AS Series B 536 27,926
----------
FRANCE--1.2%
AXA Groupe SA 806 49,531
Alcatel Alsthom Cie Generale d'Electricite SA 652 60,444
BQE National Paris 786 30,745
Carrefour 111 81,282
Cie Financiere de Paribas (Bearer) 520 31,594
Cie Generale de Eaux 508 51,946
Compagnie de Saint-Gobain SA 361 46,878
Danone Groupe 308 47,212
Elf Aquitaine 1,176 79,740
L'Air Liquide 286 52,073
L'Oreal SA 266 83,343
LVMH Moet Hennessy Louis Vuitton 377 95,665
Lafarge Coppee SA 397 26,281
Lyonnaise des Eaux-Dumez 246 23,006
Michelin Class B (Reg.) 469 22,349
PSA Peugeot Citroen 217 33,090
Renault (Regie Nationale) 1,035 30,004
Rhone-Poulenc SA A Shares 1,413 36,444
Sanofi 420 30,522
Schneider SA 551 24,397
Societe Generale 378 42,030
Suez Group 690 26,784
TOTAL Class B 1,016 68,589
Union des Assurances de Paris 1,304 26,720
----------
1,100,669
----------
GERMANY--1.4%
BASF Group 251 67,753
Bankgesell Berlin 60 13,859
Bayer AG 259 88,228
Bayer Hypo/wech Bank 1,052 26,067
Bayer Motoren Werk 80 41,807
Bayerische Vereinsbank AG 984 30,194
Commerzbank AG 125 28,788
</TABLE>
F-44
See accompanying Notes to Financial Statements.
<PAGE> 113
SchwabFunds 3
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Daimler-Benz AG 220 $ 119,664
Deutsche Bank AG 2,048 103,114
Dresdner Bank AG 1,678 44,840
Hoechst AG 220 77,938
Linde AG 31 19,088
Lufthansa AG (Bearer) 133 21,081
Mannesmann AG 153 55,757
Muenchener Rueckversicherung (Reg.) 34 70,819
RWE AG* 2,102 84,390
Sap AG 248 34,773
Schering AG 188 14,887
Siemens AG 242 133,188
Thyssen AG 128 23,210
VIAG AG 72 29,336
Veba AG 2,051 99,681
Vereinigte Elektrizitatswerke Westfalen Series B 82 27,022
Volkswagen AG 110 38,559
----------
1,294,043
----------
HONG KONG--0.8%
CITIC Pacific 7,000 27,062
Cheung Kong Holdings 8,000 56,892
China Light & Power 11,000 49,638
Hang Seng Bank Ltd. 8,400 86,346
Henderson China 24 521
Henderson Land Development Co. 6,000 41,893
Hongkong Electric Holdings Ltd. 26,000 84,549
Hongkong Telecom International 42,800 85,500
Hutchison Whampoa Ltd. 13,000 81,691
New World Development Co. 6,138 28,730
Sun Hung Kai Properties 9,000 82,040
Swire Pacific Ltd. Class A 7,000 61,773
Wharf Holdings 7,000 26,157
----------
712,792
----------
ITALY--0.3%
Alleanza Assicurazioni 1,523 12,318
Assicurazioni Generali 2,933 65,468
Fiat Finance SpA 9,052 28,391
Fiat Finance SpA 6,565 11,476
INA 14,965 20,395
</TABLE>
F-45
See accompanying Notes to Financial Statements.
<PAGE> 114
SchwabFunds 4
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
STET 10,568 $ 29,310
STET (Non-Convertible) 5,004 9,943
Telecom Italia 18,299 28,959
Telecom Italia (Non-Convertible) 9,137 12,889
Telecom Italia Mob 18,299 33,213
Telecom Italia Mob di Risp 11,325 12,463
--------
264,825
--------
JAPAN--6.7%
Ajinomoto Co., Inc. 1,000 11,405
All Nippon Airways Co., Ltd. 3,000 31,129
Asahi Bank 6,000 71,792
Asahi Breweries 1,000 11,498
Asahi Chemical Industry Co. 3,000 22,211
Asahi Glass Co., Ltd. 3,000 34,774
Bank of Fukuoka 2,000 16,639
Bank of Tokyo 5,000 74,316
Bank of Yokohama 2,000 15,892
Bridgestone Corp. 2,000 33,466
Canon Inc. 2,000 38,140
Chiba Bank 1,000 8,600
Chubu Electric Power Co. 2,000 45,992
Chugoku Electric Power Co., Inc. 1,000 22,435
DDI Corp. 5 38,093
Dai Nippon Printing Co. 2,000 36,457
Dai-Ichi Kangyo Bank, Ltd. 8,000 156,298
Daiei Inc. 1,000 11,965
Daiwa Bank 3,000 22,043
Daiwa House Industry Co. 1,000 15,705
Daiwa Securities Co. 3,000 45,712
East Japan Railway Co. 9 46,272
Fanuc 1,000 40,570
Fuji Bank, Ltd. 8,000 174,246
Fuji Photo Film Co. 1,000 28,605
Fujitsu Ltd. 5,000 46,132
Gunma Bank 1,000 10,470
Hachijuni Bank 1,000 10,937
Hankyu Corp. 2,000 11,928
Hitachi Ltd. 8,000 77,775
Hitachi Zosen 2,000 10,769
Hokkaido Electric Power Co. 1,000 22,716
Hokuriku Electric Power Co. 1,000 22,155
</TABLE>
F-46
See accompanying Notes to Financial Statements.
<PAGE> 115
SchwabFunds 5
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Honda Motor Co., Ltd. 3,000 $ 65,342
Industrial Bank of Japan, Ltd. 6,000 165,459
Ishikawajima-Harima Heavy Industries 3,000 14,022
Ito-Yokado Co., Ltd. 1,000 59,360
Itochu Corp. 4,000 28,044
Japan Airlines Co., Ltd. 4,000 29,577
Japan Telecom Co. 1 18,416
Japan Tobacco Inc. 4 37,018
Joyo Bank 1,000 7,890
Jusco Co. 1,000 26,081
Kajima Corp. 2,000 21,500
Kansai Electric Power Co. 2,600 60,276
Kao Corp. 1,000 12,433
Kawasaki Heavy Industries 2,000 10,208
Kawasaki Steel Co. 8,000 28,642
Kinki Nippon Railway Co. 4,120 30,580
Kirin Brewery Co., Ltd. 3,000 36,177
Kobe Steel 5,000 15,471
Kokusai Denki 1,000 92,452
Komatsu Ltd. 2,000 17,817
Kubota Corp. 4,000 26,511
Kyocera Corp. 1,000 67,866
Kyushu Electric Power Co. 1,000 22,716
Long-Term Credit Bank of Japan 6,000 50,143
Marubeni Corp. 4,000 22,398
Marui Co. 1,000 21,781
Matsushita Communication Industrial 1,000 23,744
Matsushita Electric Industrial Co., Ltd. 6,000 97,593
Matsushita Electric Works 1,000 10,750
Mitsubishi Bank 8,400 177,462
Mitsubishi Chemical Corp. 5,000 26,408
Mitsubishi Corp. 4,000 52,349
Mitsubishi Electric Corp. 5,000 37,205
Mitsubishi Estate Co. 3,000 41,225
Mitsubishi Heavy Industries 8,000 69,100
Mitsubishi Materials Co. 2,000 10,750
Mitsubishi Motors 2,000 17,088
Mitsubishi Trust & Banking Corp. 3,000 47,675
Mitsui & Co. 4,000 36,233
Mitsui Fudosan Co. 2,000 25,987
Mitsui Marine & Fire Insurance 2,000 15,069
Mitsui Trust & Banking Co. 3,000 33,653
Murata Manufacturing Co. 1,000 34,401
</TABLE>
F-47
See accompanying Notes to Financial Statements.
<PAGE> 116
SchwabFunds 6
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
NEC Corp. 4,000 $ 46,366
NKK Corp. 8,000 23,108
New Oji Paper Co. 1,000 9,114
Nikko Securities Co. 4,000 50,853
Nikon Corp. 1,000 12,246
Nintendo Co., Ltd. 1,000 63,940
Nippon Credit Bank 3,000 12,452
Nippon Express Co. 2,000 19,631
Nippon Oil Co. 2,000 12,769
Nippon Paper Industries Co. 2,000 14,265
Nippon Steel Corp. 16,000 55,041
Nippon Telegraph & Telephone Corp. 40 292,405
Nippon Yusen Kabushiki Kaisha 2,000 11,386
Nippondenso 2,000 40,383
Nissan Motor Co., Ltd. 6,000 46,441
Nomura Securities Co., Ltd. 5,000 109,839
Obayashi Corp. 1,000 8,581
Odakyu Electric Railway Co. 2,060 14,289
Oki Electric Industry Co., Ltd. 1,000 7,684
Omron Corp. 1,000 22,155
Ono Pharmaceutical Co. 1,000 34,588
Osaka Gas Co. 4,000 14,471
Ricoh Co., Ltd. 1,000 10,750
Rohm Co. 1,000 57,023
Sakura Bank 9,000 102,641
Sankyo Co. 1,000 22,903
Sanwa Bank 8,000 160,785
Sanyo Electric Co., Ltd. 5,000 29,914
Secom Co. 1,000 65,342
Seibu Railway Co. 1,000 47,207
Sekisui Chemical Co. 1,000 13,087
Sekisui House 1,000 12,526
Seven-Eleven Japan Co. 1,100 70,848
Sharp Corp. 3,000 47,955
Shikoku Electric Power Co. 1,000 22,622
Shimizu Corp. 2,000 21,874
Shin-Etsu Chemical Co. 1,050 20,220
Shizuoka Bank 2,000 25,240
Sony Corp. 1,000 59,734
Sony Music Entertainment 1,000 51,414
Sumitomo Bank 8,000 161,533
Sumitomo Chemical Co. 3,000 15,424
Sumitomo Corp. 3,000 31,690
</TABLE>
F-48
See accompanying Notes to Financial Statements.
<PAGE> 117
SchwabFunds 7
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Sumitomo Electric Industries 2,000 $ 26,922
Sumitomo Marine & Fire Insurance Co. 2,000 17,163
Sumitomo Metal Industries 7,000 21,921
Sumitomo Trust & Banking Co. 3,000 41,225
Suzuki Motor Corp. 1,000 12,339
TDK 1,000 51,507
Taisei Corp. 2,000 14,209
Taisho Pharmaceutical Co. 1,000 20,566
Takeda Chemical Industries 2,000 31,222
Teijin Ltd. 2,000 11,031
Tobu Railway Co. 2,000 12,994
Tohoku Electric Power Co. 1,000 23,183
Tokai Bank 5,000 62,164
Tokio Marine & Fire Insurance Co. 4,000 51,975
Tokyo Electric Power Co., Inc. 3,600 92,208
Tokyo Electron 1,000 34,120
Tokyo Gas & Electric Industrial 7,000 25,127
Tokyu Corp. 2,000 15,237
Tonen 2,000 29,353
Toppan Printing Co. 1,000 12,994
Toray Industries 4,000 25,875
Toshiba Corp. 8,000 60,724
Tostem Corp. 1,000 31,222
Toto 1,000 14,302
Toyo Seikan 1,000 35,242
Toyo Trust & Banking Co. 1,000 9,339
Toyoda Automatic Loom 1,000 18,416
Toyota Motor Corp. 10,000 220,612
Yamaichi Securities Co. 2,000 15,424
Yamanouchi Pharmaceutical Co. 1,000 22,248
Yasuda Fire & Marine Insurance Co. 2,000 14,901
Yasuda Trust & Banking Co. 2,000 12,283
----------
6,072,796
----------
NETHERLANDS--1.1%
Abn Amro Holdings NV 1,341 66,721
Aegon NV 1,122 52,973
Akzo Nobel NV 308 34,247
Elsevier NV 2,856 43,736
Heineken NV 205 44,236
Internationale Nederlanden Groep 1,241 90,140
Koninklijke PTT Nederland 1,991 78,334
</TABLE>
F-49
See accompanying Notes to Financial Statements.
<PAGE> 118
SchwabFunds 8
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Philips Electronics NV 1,488 $ 54,130
PolyGram NV 736 44,549
Royal Dutch/Shell Group (Bearer) 2,321 328,742
Unilever NV 693 94,506
Wolters Kluwer CVA 290 31,912
--------
964,226
--------
SINGAPORE--0.5%
City Developments 3,000 26,639
Development Bank Singapore 3,000 36,869
Hong Kong Land Holdings 11,000 26,400
Jardine Matheson Holdings Ltd. 3,000 23,400
OCBC Bank 4,000 53,705
Singapore Airlines Ltd. 5,000 51,858
Singapore Telecom 62,000 152,390
United Overseas Bank 4,000 40,350
--------
411,611
--------
SPAIN--0.3%
Argentaria 513 21,700
Banco de Bilbao Vizcaya SA (Reg.) 983 36,670
Banco de Santander SA (Reg.) 692 32,951
Empresa Nacional de Electricidad 977 55,968
Iberdrola SA 4,009 36,984
Repsol, SA 1,299 48,981
Telefonica Internacional de Espana, SA 3,532 56,061
--------
289,315
--------
SWEDEN--0.3%
ASEA AB Series B Free shares 106 10,923
Asea 273 28,335
Astra AB Series A Free shares 2,072 96,047
Astra AB Series B Free shares 316 14,553
Ericsson (L.M.) Telephone Series B Free shares 3,967 87,340
Sandvik AB Series A Free shares 577 12,099
Sandvik AB Series B Free shares 929 19,479
Volvo AB Series A Free shares 518 12,180
</TABLE>
F-50
See accompanying Notes to Financial Statements.
<PAGE> 119
SchwabFunds 9
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Volvo AB Series B Free shares 1,315 $ 30,626
----------
311,582
----------
SWITZERLAND--1.3%
BBC Brown Boveri 30 36,497
BBC Brown Boveri (Reg.) 45 10,821
CS Holding (Reg.) 690 63,379
Ciba-Geigy Ltd. (Bearer) 12 14,881
Ciba-Geigy Ltd. (Reg.) 92 115,174
Cie Financiere Richemont Series A (Bearer) 20 28,922
Holderbank Fn Glarus (Bearer) 14 10,570
Holderbank Fn Glarus (Reg.) 66 10,266
Nestle Ltd. (Reg.) 150 169,245
Roche Group 28 232,588
Roche Group (Bearer) 7 95,931
Sandoz Ltd. (Bearer) 12 13,963
Sandoz Ltd. (Reg.) 143 167,719
Schweizerische Bankgesellschaft (Bearer) 86 95,443
Schweizerische Bankgesellschaft (Reg.) 61 15,386
Schweizerische Bankverein (Bearer) 90 33,067
Schweizerische Bankverein (Reg.) 76 13,930
Winterthur 24 15,820
Winterthur (Reg.) 19 12,540
Zurich Versicherun (Reg.) 170 48,882
----------
1,205,024
----------
UNITED KINGDOM--3.7%
Abbey National 5,685 48,850
Allied Domecq PLC 4,522 33,887
Argyll Group 4,959 23,236
Asda Group 12,556 20,361
Associated British Foods 3,185 19,542
BAA 4,482 36,598
BAT Industries 13,354 98,647
BOC Group 2,041 27,631
BTR 15,984 77,090
Barclays 6,981 77,673
Bass 3,799 43,139
Boots Co. 4,110 37,575
British Airways 4,192 34,230
British Gas 18,789 65,526
</TABLE>
F-51
See accompanying Notes to Financial Statements.
<PAGE> 120
SchwabFunds 10
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
British Petroleum 23,998 $209,873
British Sky Broadcast 7,421 49,496
British Steel 7,911 22,941
British Telecom 27,002 152,381
Cable & Wireless 9,552 77,705
Cadbury Schweppes 4,230 32,345
Commercial Union 2,805 24,360
General Electric Co. 11,891 66,424
Glaxo Wellcome 14,974 187,861
Granada Group 2,453 28,079
Grand Metropolitan, Inc. 9,114 58,701
Great University Stores 4,356 44,743
Guinness 8,753 63,724
HSBC Holdings 7,638 116,429
HSBC Holdings 3,691 56,531
Hanson Industries 21,593 63,111
Imperial Chemical Industries 3,079 43,422
Kingfisher 2,819 24,481
Marks & Spencer PLC 12,126 77,916
National Power 5,153 36,728
National Westminster Bancorp 7,443 72,192
P & O 2,404 19,648
Pearson, Inc. 2,182 22,246
Powergen 3,088 25,144
Prudential Corp. 8,240 53,575
RTZ Corporation PLC 4,624 66,975
Rank Organisation PLC 3,484 25,763
Reed International 2,368 40,027
Reuters Holdings PLC 7,224 78,392
Royal Bank of Scotland 3,418 25,432
Sainsbury (J) PLC 7,634 42,353
Scot & Newcastle 2,577 25,172
Shell Transport & Trading 14,354 189,503
SmithKline Beecham (Units) 5,659 56,918
SmithKline Beecham PLC 5,962 59,784
Standard Chartered PLC 4,157 38,607
TSB Group 20,046 96,069
Tesco 8,714 35,444
Thorn Emi 1,808 46,456
Unilever 3,515 65,611
Vodafone Group 12,946 47,915
</TABLE>
F-52
See accompanying Notes to Financial Statements.
<PAGE> 121
SchwabFunds 11
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Zeneca Group 4,070 $ 84,357
----------
3,298,819
----------
UNITED STATES--55.8%
1st Source Corp. 420 9,188
20th Century Industries* 1,900 31,825
360 Communications Co.* 900 21,488
3Com Corp. 1,200 47,775
3DO Co.* 600 5,363
AAR Corp. 500 10,188
ABM Industries, Inc. 300 9,938
ACX Technologies Inc. 1,100 19,938
AG Chemical Equipment Inc. 200 4,500
ALZA Corp.* 400 12,300
AMC Entertainment Inc.* 400 9,700
AMCORE Financial, Inc. 400 8,350
AMETEK, Inc. 1,300 22,913
AMP Inc. 1,400 57,925
AMR Corp.* 500 44,750
APS Holding Corp. Class A* 300 5,063
AST Research Inc.* 1,200 5,850
AT&T Corp. 10,600 649,250
Aames Financial Corp. 200 7,200
Abbott Laboratories 5,200 211,900
Abr Information Services Inc. 300 13,875
Acclaim Entertainment Inc.* 1,800 19,125
Accustaff Inc. 1,500 38,063
Acordia, Inc. 400 12,700
Actel Corp.* 400 6,175
Acuson* 600 9,450
Acxiom Corp. 1,100 26,194
Advanced Micro Devices Inc. 1,220 21,045
Advanced Technology Laboratories, Inc.* 400 10,700
Advanced Tissue Sciences Inc.* 800 11,400
Advo Inc. 1,000 9,750
Aetna Life & Casualty Co. 800 60,400
Affiliated Computer Services Inc.* 200 8,325
Ahmanson (H.F.) & Co. 600 14,550
Air Express International Corp. 500 12,813
Air Products & Chemicals Inc. 700 38,238
Airbourne Freight Corp. 1,000 25,250
Airtouch Communications Inc.* 3,600 112,050
</TABLE>
F-53
See accompanying Notes to Financial Statements.
<PAGE> 122
SchwabFunds 12
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Alaska Air Group Inc.* 300 $ 8,025
Albank Final 360 10,463
Albany International Corp. (New) Class A 1,300 26,000
Alberto Culver Co. Class B Convertible 100 3,850
Albertson's Inc. 1,600 59,400
Alcan Aluminum Ltd. 1,400 45,150
Alco Standard Corp. 900 46,913
Alex Brown Inc. 900 46,688
Alexander & Alexander Services 3,300 62,288
Alfa Corp. 1,100 15,263
Allergan Inc. 300 11,063
Alliance Entertainment Corp.* 700 6,563
Alliant Techsystems Inc.* 400 19,350
Allied Group Inc. 200 7,975
Allied Signal Inc. 1,800 106,425
Allstate Corp. 3,100 130,588
Alltel Corp. 1,200 37,200
Alpharma, Inc. Class A 600 13,950
Alternative Resources Corp. 400 13,100
Altron Inc. 300 8,738
Aluminum Company of America 1,100 68,888
Amcol International Corp. 600 7,463
Amdahl Corporation* 600 5,100
Amerada Hess Corp. 700 38,500
Amerco* 1,600 39,400
America West Airlines, Inc. Class B* 1,700 36,338
American Annuity Group, Inc. 1,400 16,625
American Bankers Insurance Group, Inc. 1,000 35,125
American Brands, Inc. 1,200 50,850
American Business Information, Inc. 500 8,188
American Business Products, Inc. 400 9,050
American Electric Power Co., Inc. 1,200 50,100
American Express Co. 3,500 172,813
American Financial Enterprises Inc. 300 7,425
American Freightways Corp.* 700 8,881
American General Corp. 1,300 44,850
American Greetings Corp. Class A 300 8,306
American Heritage Life Investment Corp. 300 6,300
American Home Products Corp. 2,200 238,425
American Homepatient Inc.* 200 7,825
American International Group, Inc. 3,300 308,963
American Management Systems, Inc. 1,200 30,750
American Medical Response, Inc.* 1,000 35,500
</TABLE>
F-54
See accompanying Notes to Financial Statements.
<PAGE> 123
SchwabFunds 13
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
American Mobile Satellite Corp.* 1,100 $ 18,975
American Oncology Resources Inc.* 1,000 42,875
American President Companies, Ltd. 800 18,400
American Stores Co. (New) 800 26,400
American Travellers Corp. 300 8,944
Americredit Corp.* 700 9,713
Ameritech Corp. (New) 3,800 207,100
Amgen Inc. 1,800 104,513
Amoco Corp. 3,400 245,650
Amresco Inc. 1,000 14,500
Amsco International, Inc.* 900 12,600
Anchor Gaming* 300 9,675
Andrew Corp. 300 11,550
Anheuser-Busch Companies, Inc. 1,600 107,800
AnnTaylor Stores Corp.* 500 9,000
Antec Corp.* 500 7,813
Anthony Industries, Inc. 400 10,600
Apogee Enterprises, Inc. 300 6,450
Apollo Group, Inc. Class A 1,500 58,313
Apple Computer, Inc. 800 19,650
Applebee's International, Inc. 900 22,500
Applied Materials, Inc. 1,700 59,181
Applied Power Inc. Class A 400 13,050
Apria Healthcare Group Inc.* 1,800 57,375
AptarGroup, Inc. 500 20,750
Aquila Gas Pipeline Corp. 700 9,713
Arbor Drugs, Inc. 1,100 22,825
Arch Communications Group, Inc.* 800 18,600
Archer-Daniels-Midland Co. 4,200 77,175
Arctco, Inc. 700 6,956
Argonaut Group, Inc. 800 25,050
Armco Inc.* 3,400 18,275
Armor All Products Corp. 500 8,031
Armstrong World Industries, Inc. 300 18,638
Arnold Industries Inc. 800 12,800
Arthur J. Gallagher & Co. 900 32,738
Arvin Industries, Inc. 1,300 26,975
Asarco Inc. 200 7,000
Ashland Coal, Inc. 300 7,013
Ashland Inc. 300 11,513
Aspect Telecommunications Corp. 1,000 45,875
Aspen Technology Inc.* 200 8,525
Associated Banc-Corp. 900 34,313
</TABLE>
F-55
See accompanying Notes to Financial Statements.
<PAGE> 124
SchwabFunds 14
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Associated Group Inc. Class A* 500 $ 9,656
Astoria Financial Corp. 300 15,300
Atlantic Richfield Co. 1,100 130,900
Atlantic Southeast Airlines Inc. 1,100 28,050
Atmos Energy Corp. 500 11,500
Atria Software, Inc. 400 21,800
Augat Inc. 600 10,500
Auspex Systems, Inc.* 700 12,556
Authentic Fitness Corp. 500 12,938
Autodesk, Inc. 700 26,688
Automatic Data Processing, Inc. 2,300 90,563
Avatar Holdings, Inc.* 200 7,900
Avery Dennison Corp. 400 21,600
Avid Technology, Inc.* 600 12,563
Avon Products, Inc. 400 34,300
Aztar Corp.* 900 7,650
BET Holdings, Inc. Class A* 300 8,363
BFGoodrich Co. 100 7,950
BIG B Inc. 400 4,050
BISYS Group, Inc.* 700 23,013
BJ Services Co.* 1,200 40,200
BMC Industries, Inc. 800 17,200
BT Office Prods International Inc.* 1,200 20,250
BWIP Holding, Inc. Class A 600 10,763
Baker Hughes Inc. 1,000 29,250
Baldor Electric Co. 1,200 24,150
Baldwin & Lyons, Inc. Class B 300 4,388
Ball Corp. 1,200 37,200
Ballard Medical Products 800 14,400
Bally Entertainment Corp. 2,000 34,500
Bally Total Fitness Holding Corp.* 375 1,523
Baltimore Gas & Electric Co. 800 22,100
Banc One Corp. 3,150 112,219
Bancorp South, Inc. 1,400 35,350
Bank of Boston Corp. 800 39,700
Bank of New York Co., Inc. 1,200 61,800
BankAmerica Corp. 2,500 193,750
Bankers Trust New York Corp. 500 35,438
Banta Corp. 500 13,563
Bard C R Inc. 200 7,125
Barnes Group Inc. 200 8,975
Barnett Banks, Inc. 600 37,350
Barrett Resources Corp.* 1,100 27,500
</TABLE>
F-56
See accompanying Notes to Financial Statements.
<PAGE> 125
SchwabFunds 15
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Barrick Gold Corp. 2,800 $ 85,050
Bassett Furniture Industries Inc. 400 10,350
Battle Mountain Gold Co. 2,800 27,300
Bausch & Lomb Inc. 300 11,100
Baxter International Inc. 2,200 99,550
Bay Networks, Inc. 1,400 43,050
Bay Saint Gas Co. 300 8,363
Bbn Corp.* 500 12,688
Bearings Inc. (New) 300 8,513
Becton Dickinson & Co. 500 40,938
Belden Inc. 1,200 35,400
Bell Atlantic Corp. 3,000 185,250
Bell Bancorp, Inc. 200 7,375
BellSouth Corp. 6,900 255,300
Bemis Co, Inc. 200 6,275
Beneficial Corp. 400 23,050
Benton Oil & Gas Co.* 600 9,413
Berkley (W.R.) Corp. 1,000 46,500
Best Buy Co., Inc.* 1,500 26,063
Best Products Inc. (New)* 700 1,706
Bethlehem Steel Corp.* 500 6,563
Beverly Enterprises, Inc.* 500 5,500
Bio Rad Laboratories Inc. Class A* 200 8,400
Biocraft Laboratories Inc. 300 5,213
Biomet Inc.* 600 8,475
Birmingham Steel Corp. 1,200 17,700
Black & Decker Corp. 600 22,725
Black Box Corp.* 500 8,625
Black Hills Corp. 400 9,700
Blair Corp. 200 5,050
Blanch E W Holdings Inc. 300 6,000
Block (H & R) Inc. 600 21,675
Block Drug Inc. Class A 1,030 42,230
Blount International Inc. Class A 1,200 36,900
Blyth Industries Inc. 800 26,600
Boatmens Bancshares Inc. 1,400 55,038
Bob Evans Farms, Inc. 1,500 24,281
Boeing Co. 2,400 207,900
Boise Cascade Corp. 200 8,400
Boise Cascade Office Products* 900 58,838
Bok Financial Corp. (New) 500 10,563
Borg Warner Automotive Inc. 1,100 36,575
Borland International Inc.* 700 12,556
</TABLE>
F-57
See accompanying Notes to Financial Statements.
<PAGE> 126
SchwabFunds 16
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Boston Scientific Corp.* 1,137 $ 52,302
Boston Technology Inc. (New)* 700 9,319
Bowne & Co. Inc. 400 7,300
Boyd Gaming Corp.* 2,100 23,363
Breed Technologies Inc. 900 16,763
Briggs & Stratton Corp. 100 4,313
Bristol Myers Squibb Co. 3,500 299,688
Brown Forman Corp. Class B 500 20,063
Brown Group Inc. 500 6,750
Brown Tom Inc. (New)* 800 11,200
Browning Ferris Industries Inc. 1,300 40,950
Brunswick Corp. 500 11,500
Brush Wellman Inc. 500 8,938
Buffets Inc.* 1,200 16,950
Burlington Coat Factory Warehouse* 1,100 12,925
Burlington Industries Inc.* 1,800 22,725
Burlington Northern Santa Fe 1,000 82,125
Burlington Resources Inc. 700 25,988
Burr Brown 400 6,150
Bush Boake Allen Inc.* 500 13,000
Business Records Corp.* 200 7,450
C-Cube Microsystems, Inc. 1,000 52,000
C-TEC Corp. 1,200 44,775
CCB Financial Corp. 900 45,563
CDI Corp.* 600 16,050
CDW Computer Ctrs Inc.* 400 20,150
CMAC Investment Corp. 300 16,950
CML Group, Inc. 1,100 3,438
CNB Bancshares Inc. 400 11,550
CNS, Inc. 500 12,500
CPC International Inc. 1,000 69,375
CSX Corp. 1,400 63,875
CUC International Inc. 1,100 32,175
Cable Design Technologies Corp. 500 18,188
Cabletron Systems Inc.* 400 26,500
Cablevision Systems Corp. Class A* 400 23,000
Cabot Oil & Gas Corp. Class A 500 7,125
Cal Federal Bancorp Inc.* 1,700 30,388
Calgon Carbon Corp. 1,100 13,338
Caliber Systems Inc. 200 8,575
California Bancshares Inc. 300 9,600
California Microwave* 400 7,450
Calmat Co. 700 12,775
</TABLE>
F-58
See accompanying Notes to Financial Statements.
<PAGE> 127
SchwabFunds 17
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Cambrex Corp. 100 $ 4,613
Cambridge Technology Partners* 400 22,850
Camco International Inc. 1,100 34,650
Campbell Soup Co. 1,600 97,400
Canandaigua Wine Co., Inc. Class A* 700 26,950
Capital Re Corp. 400 14,400
Capitol American Financial Corp. 400 9,950
Caraustar Industries Inc. 1,100 27,088
Carlisle Cos. Inc. 900 39,038
Carmike Cinemas Inc.* 300 6,825
Carolina Power & Light Co. 1,000 37,250
Carpenter Technology Corp. 900 34,650
Carson Pirie Scott & Co.* 400 9,000
Carter Wallace Inc. 1,600 26,200
Case Corp. 600 30,525
Caseys General Stores Inc. 700 16,450
Castle A M 300 8,850
Catalina Marketing Corp.* 300 23,438
Catellus Development Corp.* 2,700 20,925
Caterpillar Inc. 1,300 88,400
Cellstar Corp.* 500 7,625
Cellular Technical Services Inc.* 200 5,638
Centennial Cellular Corp.* 400 6,075
Centex Construction Prods Inc. 500 6,813
Centex Corp. 100 3,100
Central & South West Corp. 1,600 45,600
Central Hudson Gas & Electric 500 15,125
Central Louisiana Electric Co. (New) 1,100 29,563
Central ME Power Co. 900 13,050
Central Newspapers Inc. Class A 1,100 39,188
Centura Banks Inc. 1,100 40,425
Century Communications Corp.* 2,700 26,325
Ceridian Corp.* 428 18,404
Cerner Corp. 1,100 25,300
Champion Enterprises Inc. 500 14,313
Champion International Corp. 700 31,675
Chaparral Steel Co. 1,200 17,850
Charming Shoppes Inc. 3,600 18,563
Charter One Financial Inc. 1,700 57,588
Chase Manhattan Corp. 1,000 73,500
Checkfree Corp.* 1,100 19,113
Checkpoint System Inc. 800 19,900
Chemed Corp. 300 11,138
</TABLE>
F-59
See accompanying Notes to Financial Statements.
<PAGE> 128
SchwabFunds 18
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Chemical Banking Corp. 1,600 $112,800
Chemical Financial Corp. 300 12,263
Chesapeake Corp. 1,100 33,275
Chesapeake Energy Corp. 950 43,938
Chevron Corp. 4,300 241,338
Cheyenne Software Inc.* 1,500 23,625
Chicago Miniature Lamp Inc.* 300 9,600
Chiquita Brands International Inc. 2,000 31,000
Chrysler Corp. 2,400 149,400
Chubb Corp. 600 56,325
Church & Dwight Inc. 600 12,525
Cidco Inc.* 400 12,900
Cigna Corp. 500 57,125
Cilcorp Inc. 400 17,200
Cincinnati Milacron Inc. 100 2,625
Cinergy Corp. 1,100 33,000
Circle K Corp. Delaware* 900 27,563
Circuit City Stores Inc. 500 14,938
Cisco Systems Inc. 3,800 176,463
Citicasters Inc. 600 17,625
Citicorp 3,200 256,000
Citizens Bancorp Maryland 400 12,150
Citizens Banking Corp. 400 12,400
Citizens Corp. 1,400 27,300
City National Corp. 1,600 21,800
Cke Restaurants Inc. 200 3,350
Claire S Stores Inc. 750 13,594
Clarcor Inc. 400 8,700
Cleveland Cliffs Inc. 300 13,275
Clorox Co. 300 25,838
Coast Savings Financial Inc.* 500 15,625
Coastal Corp. 700 27,650
Coastal Physician Group Inc.* 700 6,213
Coca-Cola Bottling Co. 200 6,825
Coca-Cola Co. 8,200 677,525
Coeur D Alene Mines Corp. 500 10,188
Coherent Communications Syt Ccom 400 8,400
Coherent Inc.* 300 12,731
Cole Taylor Financial Group Inc. 400 11,650
Colgate-Palmolive Co. 1,000 77,875
Collective Bancorp Inc. 1,000 25,375
Collins & Aikman Corp.* 1,900 11,875
Colonial BancGroup Inc. 300 10,913
</TABLE>
F-60
See accompanying Notes to Financial Statements.
<PAGE> 129
SchwabFunds 19
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Colonial Data Technologies* 300 $ 6,638
Coltec Industries Inc.* 2,400 29,100
Columbia Gas System, Inc. 400 18,350
Columbia/HCA Healthcare Corp. 2,900 167,475
Comair Holdings Inc. 1,300 44,931
Comcast Corp. Class A 2,200 38,913
Comerica Inc. 900 37,575
Commerce Group Inc. 1,100 21,725
Commercial Federal Corp. 400 15,550
Commercial Intertech Corp. 500 9,438
Commercial Metals Co. 500 14,375
Commonwealth Energy System 300 14,025
Community Health System Inc.* 1,000 41,000
Community Psychiatric Centers 1,400 11,725
Comnet Cellular Inc.* 300 8,325
CompUSA Inc. 1,000 55,375
Compaq Computer Corp.* 2,200 84,975
Computer Assoc International Inc. 1,600 114,600
Computer Network Technology* 500 2,750
Computer Sciences Corp.* 300 21,113
Computervision Corp. (New)* 2,300 23,863
Compuware Corp.* 1,200 27,900
Comverse Technology Inc. (New)* 500 12,125
ConAgra, Inc. 2,000 81,250
Cone Mills Corp.* 600 6,975
Conrail Inc. 500 35,813
Consolidated Edison Co. 2,100 66,938
Consolidated Freightways Inc. 200 5,125
Consolidated Natural Gas Co. 500 21,750
Continental Airlines Inc. Class B* 1,200 67,650
Continuum Inc.* 1,000 41,625
Cooper Industries Inc. 600 23,400
Cooper Tire & Rubber 400 10,300
Coors Adolph Co. Class B 1,300 23,400
Copley Pharmaceutical Inc.* 600 10,125
Copytele Inc.* 700 6,869
Corestates Financial Corp. 900 38,138
Corning Inc. 1,600 56,000
Corporate Express, Inc. 480 15,810
Corrections Corp. of America 900 51,300
Coventry Corp.* 1,300 22,100
Crane Co. 100 4,038
Crawford & Co. Class A 400 6,100
</TABLE>
F-61
See accompanying Notes to Financial Statements.
<PAGE> 130
SchwabFunds 20
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Crawford & Co. Class B 1,000 $15,750
Cray Research Inc.* 800 23,300
Credence Systems Corp. 600 10,125
Crestar Financial Corp. 128 7,360
Crompton & Knowles Corp. 1,800 26,325
Cross (A.T.) Co. Class A 500 7,875
Cross Timbers Oil Co. 400 6,900
Crown Cork & Seal Inc. 900 43,875
Cullen Frost Bankers Inc. 300 14,850
Cummins Engine Inc. 200 8,075
Curtiss Wright Corp. 100 5,200
Cyprus Amax Minerals Co. 600 16,950
Cyrix Corp.* 500 11,906
Cytec Industries Inc.* 500 42,250
DSC Communications Corp.* 700 18,856
DTE Energy Co. 1,000 33,625
Daig Corp. 500 12,125
Dallas Semiconductor Corp. 700 12,863
Dames & Moore Inc. 500 5,563
Dana Corp. 500 16,688
Darden Restaurants Inc. 800 10,800
Data General Corp.* 1,500 21,938
Datascope Corp.* 400 9,250
Davidson & Associates, Inc. 1,000 23,438
Dayton Hudson Corp. 600 50,925
Dean Witter Discover & Co. 1,100 62,975
Deere & Co. 1,700 70,975
Delphi Financial Group, Inc. Class A* 300 7,275
Delta & Pine Land Co. 399 22,194
Delta Airlines Inc. 400 30,750
Deluxe Corp. 400 12,550
Department 56 Inc.* 700 15,313
Destec Energy, Inc.* 2,000 24,750
Detroit Diesel Corp.* 600 12,225
Devon Energy Corp. 600 14,100
Devry Inc. 900 30,600
Dexter Corp. 1,100 29,150
Diagnostic Products Corp. 400 16,150
Dial Corp. 1,100 30,800
Dialogic Corp.* 400 17,000
Diamond Multimedia System Inc.* 1,300 20,638
Diamond Shamrock Inc. 1,300 42,250
Digi International Inc.* 300 8,213
</TABLE>
F-62
See accompanying Notes to Financial Statements.
<PAGE> 131
SchwabFunds 21
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Digital Equipment Corp.* 800 $ 44,100
Dillard Department Stores Inc. Class A 600 20,775
Dimon Inc. 1,100 19,388
Dionex Corp. 400 14,250
Discount Auto Parts Inc.* 400 11,150
Disney (Walt) Co. 4,473 285,713
Dollar Tree Stores Inc. 400 17,750
Dominion Resources Inc. 1,100 43,588
Donaldson Inc. 1,200 33,000
Donnelley (R.R.) & Sons Co. 1,000 34,500
Doubletree Corp.* 600 16,238
Dover Corp. 800 36,600
Dow Chemical Co. 1,800 156,375
Dow Jones & Co. Inc. 700 26,950
Downey Financial Corp. 420 9,870
Dresser Industries Inc. 1,300 39,650
Dreyers Grand Ice Cream Inc. 300 10,163
Du Pont (E.I.) de Nemours & Co. 3,800 315,400
Duke Power Co. 1,300 65,650
Dun & Bradstreet Corp. 1,100 66,688
Duriron Inc. 1,100 30,113
Duty Free International Inc. 800 10,600
Dynatech Corp. Rights Callable Through 2/16/99 400 9,300
EG&G, Inc. 200 4,475
EMC Corp.* 1,500 32,813
ENSERCH Corp. 300 4,875
Earthgrains Co.* 64 1,912
Eastern Enterprises 1,100 39,050
Eastern Utilities Assoc. 1,000 21,500
Eastman Chemical Co. 500 34,563
Eastman Kodak Co. 2,100 149,100
Eaton Corp. 500 30,125
Eaton Vance Corp. (Non Voting) 200 6,450
Echlin Inc. 300 10,875
Echo Bay Mines Ltd 600 8,100
Echostar Communications Corp. Class A* 300 10,238
Ecolab Inc. 300 9,000
Edison International 2,800 47,950
Electro Scientific Industries Inc.* 300 5,456
Electroglas Inc. 600 9,113
Eli Lilly & Co. 3,800 247,000
Emerson Electric Co. 1,400 113,050
Emmis Broadcasting Corp. Class A* 200 7,663
</TABLE>
F-63
See accompanying Notes to Financial Statements.
<PAGE> 132
SchwabFunds 22
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Empire District Electric Co. 400 $ 7,300
Energen Corp. 300 6,563
Engelhard Corp. 700 16,363
Enhance Financial Services Group Inc. 900 24,863
Enron Corp. 1,600 59,000
Entergy Corp. 1,400 39,200
Enzo Biochem Inc. 500 8,500
Ethan Allen Interiors Inc.* 400 10,500
Exabyte Corp.* 500 8,156
Excalibur Technologies Corp. (New)* 300 8,250
Executive Risk Inc. 300 9,600
Expeditores International Washington Inc. 300 7,950
Express Scripts Inc. Class A* 900 41,400
Exxon Corp. 8,200 669,325
F & M National Corp. 400 6,950
FMC Corp. (New)* 200 15,025
FMC Gold Co. 1,700 11,050
FORE Systems, Inc. 300 21,431
FPL Group, Inc. 1,200 54,300
FTP Software Inc.* 700 8,663
Fabri-Centers of America, Inc. Class A 200 2,300
Fair Issac & Co. Inc. 300 9,188
Falcon Drilling Inc.* 800 18,000
Family Dollar Stores, Inc. 1,900 28,025
Farmer Brothers Co. 100 13,550
Federal Express Corp.* 400 27,950
Federal Home Loan Mortgage Corp. 1,200 102,300
Federal Mogul Corp. 1,000 18,625
Federal National Mortgage Assoc. 7,600 242,250
Federated Department Stores Inc.* 1,400 45,150
Ferro Corp. 1,200 34,050
Fifth Third Bancorp 700 40,556
Filenet Corp.* 400 23,150
Financial Security Assured Holdings Ltd. 1,200 30,450
Fingerhut Companies, Inc. 1,300 16,738
First American Financial Corp. 400 11,500
First Bank System Inc. 882 52,589
First Chicago NBD Corp. 2,405 99,808
First Citizens Bancshares Inc. 300 17,850
First Commerce Bancshares Inc. 300 6,825
First Commercial Corp. 1,177 37,076
First Commonwealth Financial Corp. 1,000 19,375
First Data Corp. 1,500 105,750
</TABLE>
F-64
See accompanying Notes to Financial Statements.
<PAGE> 133
SchwabFunds 23
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
First Financial Bancorp 800 $ 27,600
First Financial Corp. 1,300 27,544
First Interstate Bancorp 500 86,750
First Michigan Bank Corp. 500 15,000
First Midwest Bancorp Inc. 300 8,550
First Mississippi Corp. 1,000 23,875
First Union Corp. 1,975 119,488
Firstbank Illinois Co. 300 9,338
Firstmiss Gold Inc.* 500 13,688
Fisher Scientific International, Inc. 900 34,425
Fleet Financial Group Inc. 1,924 77,922
Fleetwood Enterprises, Inc. 200 4,950
Fleming Companies, Inc. 2,900 41,325
Florida East Coast Industry Inc. 300 26,213
Florida Rock Industries, Inc. 200 5,200
Flowers Industries, Inc. 2,000 27,000
Fluke Corp. 200 7,625
Fluor Corp. 600 40,950
Ford Motor Co. 7,500 257,813
Foremost Corp. of America 300 16,200
Forest City Enterprises, Inc. Class A 200 7,350
Fort Wayne National Corp. 300 9,075
Foster Wheeler Corp. 300 13,313
Foxmeyer Health Corp. 400 7,200
Franklin Quest Co.* 1,000 27,000
Freeport McMoran Copper & Gold Class B 1,400 44,275
Fremont General Corp. 1,350 31,894
Fresenius U.S.A. Inc.* 500 10,188
Frontier Insurance Group, Inc. 300 9,188
Fruit of the Loom Inc. Class A* 400 10,350
Fuller (H.B.) Co. 400 12,000
Fulton Financial Corp. 800 17,400
Fund American Enterprises Holdings, Inc. 200 15,400
Furniture Brands International Inc.* 1,200 11,100
G&K Services, Inc. Class A 500 13,250
GC Companies Inc.* 300 11,400
GRC International, Inc.* 200 6,800
GTE Corp. 6,700 293,963
Gannett Inc. 800 53,800
Gap Inc. 800 44,300
Gaylord Container Corp. Class A* 1,500 13,781
Gencorp Inc. 900 11,250
General Binding Corp. 500 10,906
</TABLE>
F-65
See accompanying Notes to Financial Statements.
<PAGE> 134
SchwabFunds 24
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
General Datacom Industries Inc.* 500 $ 5,313
General Dynamics Corp. 400 23,400
General Electric Co. 11,100 864,413
General Instrument Corp.* 800 21,900
General Magic Inc.* 700 4,025
General Mills Inc. 900 52,538
General Motors Corp. 5,000 266,250
General Public Utilities Corp. 800 26,400
General Re Corp. 600 87,450
General Signal Corp. 200 7,250
Genesis Health Ventures, Inc. 900 36,338
Gentex Corp.* 400 11,800
Genuine Parts Co. 700 31,500
Geon Co. 1,100 29,288
Georgia Pacific Corp. 500 34,688
Geotek Communications Inc.* 1,200 12,225
Gerber Scientific Inc. 700 10,500
Giant Food Inc. Class A 300 9,900
Giddings & Lewis Inc. 1,100 20,969
Gilead Sciences Inc.* 700 20,038
Gillette Co. 3,100 160,425
Glatfelter (P.H.) Co. 1,500 26,063
Glendale Federal Bank* 1,500 27,188
Global Industrial Technologies Inc.* 700 16,800
Global Natural Resources Inc.* 700 9,275
Global Village Communications* 400 6,000
Golden West Financial Corp. 300 16,088
Goodyear Tire and Rubber 1,000 51,000
Goulds Pumps Inc. 1,000 21,938
Grace (W.R.) & Co. 600 46,950
Graco Inc. 450 8,775
Grainger (W.W.), Inc. 400 26,850
GranCare, Inc.* 600 10,800
Granite Construction Inc. 300 8,869
Great Atlantic & Pacific Tea Co., Inc. 200 6,200
Great Financial Corp. 400 9,850
Great Lakes Chemical Corp. 400 26,950
Great Western Financial Corp. 700 16,888
Green Tree Financial Corp. 1,000 34,375
Greenfield Industries Inc. 400 13,775
Greif Brothers Corp. Class A 1,100 31,900
Griffon Corp.* 700 6,563
Guilford Mills, Inc. 400 9,800
</TABLE>
F-66
See accompanying Notes to Financial Statements.
<PAGE> 135
SchwabFunds 25
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Gulf South Medical Supply Inc. 300 $ 11,400
Gymboree Corp.* 1,100 28,669
HCC Insurance Holdings, Inc.* 300 16,463
HCIA Inc.* 700 32,375
Hadco Corp.* 300 9,188
Haemonetics Corp.* 700 11,550
Halliburton Co. 800 45,500
Hancock Holding Co. 200 7,225
Harcourt General Inc. 400 18,150
Harland John H Co. 1,000 22,000
Harleysville Group Inc. 400 10,900
Harman International Industries Inc. (New) 900 33,750
Harnischfeger Industries Corp. 200 7,750
Harper Group, Inc. 500 9,188
Harrahs Entertainment Inc.* 500 14,688
Harris Corp. 200 12,375
Harte Hanks Communications (New) 1,500 31,875
Hasbro Inc. 600 22,200
Hayes Wheels International Inc. 500 15,125
Health Management Systems, Inc. 450 12,713
Healthplan Services Corp.* 100 2,288
Healthsouth Rehabilitation Corp. 1,876 63,784
Heartland Express, Inc. 961 24,145
Heartland Wireless Communications, Inc.* 300 7,650
Hecla Mining Co.* 1,100 8,388
Heinz H J Co. 2,800 92,750
Helix Technology Corp. 300 8,475
Helmerich and Payne Inc. 1,200 40,500
Henry Jack & Assoc Inc. 300 7,369
Herbalife International Inc. 600 6,675
Hercules Inc. 700 43,400
Heritage Media Corp. Class A (New)* 500 17,938
Hershey Foods Corp. 500 37,250
Hewlett Packard Co. 3,500 329,000
Highlands Insurance Group Inc.* 60 1,185
Hilton Hotels Corp. 300 28,200
Hnc Software Inc. 200 13,650
Hollywood Entertainment Corp. 900 11,981
Home Beneficial Corp. Class B 500 12,813
Home Depot Inc. 3,100 148,413
Home Financial Corp. 600 8,925
Home Shopping Network, Inc.* 3,100 31,388
Homestake Mining Co. 700 13,563
</TABLE>
F-67
See accompanying Notes to Financial Statements.
<PAGE> 136
SchwabFunds 26
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Hon Industries Inc. 1,100 $24,750
Honeywell Inc. 900 49,725
Horace Mann Educators Corp. (New) 1,100 33,550
Horizon Cms Healthcare Corp.* 1,800 25,200
Houghton Mifflin Co. 500 22,063
Household International Inc. 600 40,350
Houston Industries Inc. 1,600 34,600
Hubco Inc. 400 7,825
Hudson Foods Inc. Class A 1,200 17,100
Human Genome Sciences Inc.* 900 34,313
Humana Inc.* 1,200 30,150
Hunt (J.B.) Transport Services Inc. 1,100 21,863
Hunt Manufacturing Co. 500 7,625
Hyperion Software Corp. 400 8,600
ICN Pharmaceuticals, Inc. 809 17,899
IDEX Corp. 1,000 38,875
IES Industries Inc. 1,300 36,238
IHOP Corp. (New)* 200 5,025
INSO Corp. 800 37,000
INTERSOLV Inc.* 800 9,200
ITT Corp. (New)* 800 48,000
ITT Educational Services Inc. 300 10,088
ITT Hartford Group Inc. 800 39,200
ITT Industries Inc. 800 20,400
Identix Inc.* 200 2,250
Ideon Group Inc. 600 6,675
Illinois Tool Works Inc. 800 51,700
Immunex Corp. (New)* 1,100 17,531
Imperial Bancorp 324 7,736
In Focus Systems, Inc.* 300 10,538
Inco Ltd. 1,200 37,950
Indiana Energy Inc. 600 14,400
Information Resources, Inc.* 600 8,625
Ingersoll Rand Co. 700 28,525
Inland Steel Industries, Inc. 200 4,950
Inphynet Medical Management Inc.* 800 14,300
Input/Output Inc. 2,000 62,000
Insignia Financial Group Class A (New) 600 14,625
Insilco Corp.* 300 10,519
Insituform Technologies Inc. Class A* 700 7,263
Insurance Auto Auctions Inc.* 200 1,800
Integon Corp. 500 10,188
Integrated Health Services Inc. 1,000 23,375
</TABLE>
F-68
See accompanying Notes to Financial Statements.
<PAGE> 137
SchwabFunds 27
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Integrated Process Equipment Corpcom* 400 $ 7,125
Integrated Systems Inc. 300 14,625
Intel Corp. 5,700 323,831
Inter-Regional Financial Group, Inc. 300 6,713
InterVoice, Inc.* 500 14,375
Interdigital Commerce Corp.* 1,000 8,813
Interface Inc. Class A 400 4,875
Intergraph Corp.* 2,300 37,088
Interim Services Inc.* 400 15,200
Intermet Corp.* 700 9,100
International Business Machines 3,500 388,938
International Cabletel Inc. 1,300 39,000
International Dairy Queen Inc. Class A* 700 15,313
International Family Entertainment 1,625 27,422
International Flavurs & Fragrances Inc. 800 38,300
International Multifoods Corp. 500 9,563
International Paper Co. 2,100 82,688
Interneuron Pharmaceuticals* 900 33,413
Interpool Inc. 400 7,000
Interpublic Group of Companies, Inc. 400 18,900
Interstate Bakeries Corp. (New) 1,400 34,300
Interstate Power Co. 300 9,563
Invacare Corp. 1,300 36,400
Ionics Inc. 400 16,700
Isis Pharmaceuticals* 700 8,050
Isolyser Inc. 1,100 18,150
Itron, Inc.* 300 13,463
J & L Specialty Steel Inc. 1,100 18,838
JP Foodservice, Inc.* 400 7,650
JSB Financial, Inc. 300 10,144
Jacobs Engineering Group Inc.* 1,100 31,075
Jacor Communications Inc.* 600 11,775
James River Corp. 400 10,300
Jefferson Bankshares, Inc. 500 10,844
Jefferson-Pilot Corp. 450 24,244
John Alden Financial Corp. 1,100 19,388
John Wiley & Sons, Inc. Class A 900 30,038
Johnson & Johnson 4,200 387,450
Johnson Controls, Inc. 200 14,925
Jostens, Inc. 200 4,475
Juno Lighting Inc. 400 5,525
Just for Feet Inc. 500 20,813
Justin Industries Inc. 600 6,863
</TABLE>
F-69
See accompanying Notes to Financial Statements.
<PAGE> 138
SchwabFunds 28
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
K Mart Corp. 2,400 $ 22,500
K N Energy Inc. 1,200 37,350
KCS Energy, Inc. 200 3,100
Kansas City Life Insurance Co. 200 10,850
Kaufman & Broad Home Corp. 1,000 16,000
Kaydon Corp. 900 31,500
Keane, Inc.* 800 23,900
Kellogg Co. 1,500 113,625
Kellwood Co. 500 7,750
Kennametal Inc. 900 32,513
Kent Electrs Corp. 1,600 56,600
Kerr-McGee Corp. 400 25,400
Keycorp (New) 2,000 77,250
Keystone Financial Inc. 1,100 35,750
Keystone International Inc. 1,000 22,500
Kimball International Inc. Class B 600 17,250
Kimberly Clark Corp. 1,780 132,610
Kinder Care Learning Centers Inc.* 600 7,575
Kinetic Concepts Inc. 1,200 16,200
King World Productions, Inc.* 300 12,413
Kirby Corp.* 800 13,700
Knight-Ridder, Inc. 300 20,438
Kroger Co.* 800 32,400
Kulicke & Soffa Industries Inc. 500 8,000
LSI Logic Corp. 1,000 26,750
LTX Corp.* 800 6,600
La-Z-Boy Chair Co. 500 15,563
Laclede Gas Co. 400 9,100
Laidlaw Inc. Class B (Non Voting) 1,500 15,938
Lance Inc. 900 13,950
Landmark Graphics Corp.* 400 6,600
Landry's Seafood Restaurants, Inc. 400 7,450
Lands' End, Inc.* 1,000 17,500
Landstar Systems, Inc.* 300 7,463
Lattice Semiconductor Corp.* 1,100 31,144
Lawson Products, Inc. 400 8,850
Lawter International Inc. 1,200 13,050
Leader Financial Corp. 300 13,106
Legg Mason, Inc. 400 11,650
Lennar Corp. 1,400 34,825
Libbey Inc. 400 8,750
Liberty Bancorp, Inc. 300 11,063
Liberty Corp. 1,000 33,000
</TABLE>
F-70
See accompanying Notes to Financial Statements.
<PAGE> 139
SchwabFunds 29
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Life Partners Group Inc. 800 $ 16,600
Life Re Corp. 400 10,800
Life Technologies, Inc. 400 11,350
Ligand Pharmaceuticals Inc. Class B 700 8,225
Lilly Industrial Inc. Class A 500 6,813
Limited Inc. 1,197 22,743
Lincare Holdings Inc.* 800 25,900
Lincoln Electric Co. 300 8,025
Lincoln Electric Co. 900 24,300
Lincoln National Corp. Inc. 600 30,450
Lincoln Telecommunications 1,400 26,950
Liposome Inc.* 1,200 25,125
Littlefuse, Inc.* 300 11,363
Living Centers of America* 1,000 37,250
Liz Claiborne 400 13,700
Lockheed Martin Corp. 1,400 106,225
Loews Corp. 800 60,500
Logicon, Inc. 800 25,500
Lone Star Industries, Inc. 300 9,000
Long Islands Bancorp Inc. 800 22,550
Longs Drug Stores Corp. 100 4,725
Longview Fibre Co. 1,800 30,375
Loral Corp. 1,100 53,900
Louis Dreyfus Nat Gas Corp.* 800 8,700
Louisiana Land & Exploration Co. 100 4,663
Louisiana Pacific Corp. 500 12,188
Lowes Cos Inc. 1,100 39,325
Luby's Cafeterias, Inc. 800 18,500
Lukens Inc. 400 9,950
Lydall Inc. 400 10,000
M.S. Carriers, Inc.* 300 5,625
MAIC Holdings Inc. 212 7,023
MAXXAM Inc.* 200 9,775
MBNA Corp. 1,600 47,400
MCI Communications Corp. 5,000 151,563
MDU Resources Group, Inc. 1,200 27,600
MICROS Systems, Inc. 200 5,000
Mac Frugals Bargains Close Out* 600 8,400
Madison Gas and Electric Co. 450 11,419
Mafco Consolidated Group Inc.* 700 10,850
Magellan Health Services Inc.* 1,200 27,000
Magna Group Inc. 1,200 27,525
Mallinckrodt Group Inc. 400 15,050
</TABLE>
F-71
See accompanying Notes to Financial Statements.
<PAGE> 140
SchwabFunds 30
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Manitowoc Inc. 300 $ 9,450
Manor Care, Inc. 300 11,775
Marcus Corp. 500 13,188
Mariner Health Group Inc.* 1,100 18,013
Mark Twain Bancshares Inc. 900 33,525
Markel Corp.* 200 17,150
Marriot International Inc. 900 42,750
Marsh & McLennan Companies 200 18,575
Marshall Industries* 500 15,250
Masco Corp. 1,000 29,000
Mascotech Inc. 1,500 20,063
Material Sciences Corp.* 300 4,463
Mattel Inc. 1,750 47,469
Maxicare Health Plans Inc. (New)* 900 22,500
Maxis Inc.* 300 7,463
May Department Stores Co. 1,600 77,200
Maytag Corp. 500 10,125
McAfee Associates, Inc. 500 27,500
McClatchy Newspapers Inc. Class A 1,300 31,038
McDermott International Inc. 200 3,850
McDonald's Corp. 4,600 220,800
McDonnell Douglas Corp. 500 45,813
McGraw-Hill, Inc. 300 26,025
Mead Corp. 300 16,200
Measurex Corp. 400 11,600
Media General,Inc. Class A 900 34,875
Medic Computer Systems, Inc.* 800 60,750
Medimmune Inc.* 400 6,375
Medisense Inc.* 900 40,163
Medpartners/ Mullikin Inc.* 400 11,400
Medtronic Inc. 1,500 89,438
Medusa Corp. 400 12,250
Mellon Bank Corp. 900 49,613
Melville Corp. 1,200 43,050
Men's Wearhouse, Inc. 500 15,625
Mentor Corp. Minnesota 1,100 25,506
Mercantile Bancorp Inc. 175 8,006
Mercantile Stores Co., Inc. 300 18,413
Merck & Co. Inc. 8,100 504,225
Mercury Interactive Corp.* 400 6,250
Meredith Corp. 100 4,125
Merrill Lynch & Co. Inc. 1,000 60,750
Mesa Airlines Inc.* 900 9,788
</TABLE>
F-72
See accompanying Notes to Financial Statements.
<PAGE> 141
SchwabFunds 31
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Methode Electrs Inc. Class A 1,000 $ 16,000
Metromedia Inter. Grp., Inc.* 400 5,400
Meyer (Fred) Inc.* 800 22,400
Michaels Stores Inc.* 500 7,063
Microcom Inc.* 400 12,000
Micron Technology Inc. 1,300 40,788
Microsoft Corp.* 4,100 422,556
Mid Am Inc. 400 7,350
Mikasa Inc. Class B* 500 5,938
Miller Herman Inc. 1,200 37,275
Millipore Corp. 200 7,650
Mine Safety Appliances Co. 200 9,525
Minerals Technologies Inc. 1,000 34,625
Minnesota Mining & Manufacturing Co. 2,900 188,138
Mississippi Chemical Corp. (New) 700 14,088
Mobil Corp. 2,700 312,863
Mobilemedia Corp.* 1,000 20,563
Modine Manufacturing Co. 1,000 26,250
Mohawk Industries Inc.* 1,300 19,338
Molten Metal Technology, Inc.* 1,100 36,713
Money Store Inc. 1,500 41,625
Monsanto Co. 800 122,800
Moore Corp. Ltd 500 9,750
Morgan (J.P.) & Co. Inc. 1,300 107,900
Morgan Stanley Group Inc. 1,000 51,750
Morton International Inc. 1,000 38,375
Motorola Inc. 3,900 206,700
Movie Gallery Inc.* 300 7,688
Mueller Industries Inc. 900 31,838
Multicare Cos Inc. 400 11,350
Myers Industry Inc. 500 8,438
NAC Re Corp. 500 16,313
NACCO Industries, Inc. Class A 400 22,750
NCH Corp. 200 11,325
NICOR Inc. 200 5,350
NIKE, Inc. Class B 800 65,000
NN Ball & Roller, Inc. 400 8,950
Nabors Industries Inc.* 2,800 39,900
Nalco Chemical Co. 300 9,225
National Auto Credit Inc. 600 9,075
National Bancorp of Alaska, Inc. 700 43,225
National City Corp. 1,000 35,125
National Commerce Bancorp 1,100 34,375
</TABLE>
F-73
See accompanying Notes to Financial Statements.
<PAGE> 142
SchwabFunds 32
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
National Computer Systems, Inc. 500 $ 10,125
National Data Corp. 600 20,475
National Education Corp.* 1,000 11,750
National Instrs Corp.* 500 10,688
National Media Corp.* 100 1,650
National Presto Industries, Inc. 200 8,000
National Re Corp. 900 30,375
National Semiconductor Corp.* 600 8,325
National Service Industries, Inc. 200 7,250
National Steel Corp. Class B* 1,200 16,800
NationsBank Corp. 2,200 176,275
Natures Sunshine Prods Inc. 450 11,531
Nautica Enterprises Inc. 1,000 47,625
Navistar International Corp.* 5,700 59,138
Nellcor Puritan Bennett Inc.* 1,300 83,688
Neoprobe Corp.* 500 9,531
Netcom Online Communications* 300 7,275
Network Equipment Technologies* 500 15,188
Network General Corp.* 1,100 43,725
New England Business Service, Inc. 400 6,700
New Jersey Resources Corp. 500 14,438
New York Bancorp Inc. 300 7,050
New York Times Co. Class A 500 14,500
Newell Co. 1,100 29,425
Newfield Exploration Co.* 900 27,450
Newmont Mining Corp. 600 33,975
Nexstar Pharmaceuticals Inc.* 1,000 19,875
Nextel Communications Inc.* 535 10,065
Niagara Mohawk Power Corp. 700 4,638
Nl Industries Inc. (New) 2,400 31,800
Noble Drilling Corp.* 3,100 38,363
NorAm Energy Co. 600 5,550
Norand Corp.* 100 1,625
Nordstrom Inc. 500 24,219
Norfolk Southn Corp. 900 76,500
Norrell Corp. Georgia 100 3,313
North American Mortgage Co. 400 8,200
North Fork Bancorporation 1,100 26,263
Northern States Power Co. 500 24,375
Northern Telecom Ltd 1,600 76,400
Northrop Grumman Corp. 400 25,450
Northwest Natural Gas Co. 400 12,800
Norwest Corp. 2,300 84,525
</TABLE>
F-74
See accompanying Notes to Financial Statements.
<PAGE> 143
SchwabFunds 33
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Novacare Inc.* 1,500 $ 10,500
Novell Inc.* 2,700 36,281
Nu Kote Holding Inc. Class A 500 8,938
Nucor Corp. 500 29,563
Nuevo Energy Co.* 300 8,625
Nynex Corp. 3,200 159,600
O'Reilly Automotive, Inc.* 200 7,025
OEA, Inc. 1,000 36,500
OM Group Inc. 300 11,081
ONBANCorp, Inc. 400 13,925
Oak Industries Inc.* 400 9,950
Oak Technology 2,000 42,250
Oakwood Homes Corp. 1,100 54,588
Occidental Petroleum Corp. 2,000 53,500
Octel Communications Corp. 1,100 53,075
Offshore Logistics, Inc.* 400 5,325
Ogden Corp. 200 3,900
Ohio Edison Co. 800 18,100
Old National Bancorp 800 26,700
Olympic Financial Ltd.* 500 9,688
Omnicare Inc. 1,200 64,650
One Valley Bancorp West Virginia Inc. 500 15,750
Oneok Inc. 900 21,488
Optical Data Systems, Inc. 400 8,300
Oracle Systems Corp. 2,800 131,600
Orange & Rockland Utilities, Inc. 400 14,350
Orbital Sciences Corp. Class A* 1,000 13,375
Oregon Steel Mills Inc. 400 5,650
Orion Capital Corp. 400 18,100
Oryx Energy Co.* 500 6,938
Otter Tail Power Co. 300 11,513
Outboard Marine Corp. 600 11,475
Overseas Shipholding Group 1,400 25,550
Owens & Minor Inc. (New) 700 8,400
Owens Corning* 400 16,050
P Inc. 500 9,906
P P & L Resources Inc. 1,400 34,125
PACCAR Inc. 200 9,800
PAXAR Corp. 500 7,938
PDT Inc. 300 17,963
PHH Corp. 500 27,813
PNC Bank Corp. 2,200 67,650
PPG Industries Inc. 1,300 63,538
</TABLE>
F-75
See accompanying Notes to Financial Statements.
<PAGE> 144
SchwabFunds 34
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Pacific Enterprises 400 $ 10,350
Pacific Gas & Electric Co. 2,700 61,088
Pacific Scientific Co. 300 6,338
Pacific Telesis Group 3,200 88,400
Pacificorp 1,800 37,575
Pairgain Technologies Inc.* 900 58,219
Pall Corp. 600 15,375
Panhandle Eastern Corp. 1,100 34,238
Papa John's International, Inc. 450 20,109
Park Electrochemical Corp. 300 8,925
Park National Corp. 200 9,675
Parker & Parsley Petroleum Co. 1,000 23,000
Parker Drilling Co.* 1,300 9,100
Parker Hannifin Corp. 500 18,750
Patterson Dental Co.* 500 15,250
Paxson Communications Corp. 600 9,375
Payment Services Inc. 500 12,094
Peco Energy Co. 1,700 45,263
Penn Traffic Co. (New)* 200 2,975
Penncorp Financial Group Inc. 700 22,050
Penney (J.C.) Inc. 1,400 69,650
Pennzoil Co. 200 7,950
Peoples Bank 1,400 29,925
Peoples Energy Corp. 100 3,238
Peoples Heritage Financial Group 400 8,700
Pep Boys - Manny, Moe & Jack 300 10,050
Pepsico Inc. 5,500 347,875
Perkin-Elmer Corp. 200 10,825
Petco Animal Supplies Inc. 200 8,825
Petrolite Corp. 300 8,850
Pfizer Inc. 4,400 294,800
Pharmacia & Upjohn Inc. 3,300 131,588
Phelps Dodge Corp. 400 27,450
Philip Morris Companies Inc. 5,300 465,075
Phillips Petroleum Co. 2,100 82,950
Phillips Van Heusen Corp. 600 7,050
Phoenix Resource Cos., Inc. 500 11,938
Photronic, Inc. 400 8,600
Php Healthcare Corp. 100 2,413
Physician Corp. of America* 1,100 17,531
Physician Reliance Network* 1,100 43,588
Physician Sales & Service Inc. 1,000 25,000
Physicians Health Services, Inc.* 200 6,225
</TABLE>
F-76
See accompanying Notes to Financial Statements.
<PAGE> 145
SchwabFunds 35
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Piedmont Natural Gas Inc. 1,200 $ 26,700
Pier 1 Imports Inc. 1,400 17,675
Pioneer Group Inc. 1,100 31,625
Pioneer HI Bred International Inc. 600 31,575
Pioneer Standard Electrs Inc. 500 7,594
Piper Jaffray Cos Inc. 400 5,500
Pitney Bowes Inc. 1,000 49,000
Pittston Co. (Burlington Group) 100 1,963
Pittston Services Group 200 5,350
Pittway Corp. Class A 600 29,700
Placer Dome Inc. 2,000 57,750
Plantronics, Inc. (New)* 200 7,550
Players International Inc. 700 6,694
Playtex Prods Inc.* 1,200 8,700
Pogo Producing Co. 1,300 40,625
Polaris Industries Inc. 1,200 36,900
Polaroid Corp. 200 9,000
Potlatch Corp. 100 4,275
Praxair Inc. 1,000 39,875
Precision Castparts Corp. 1,000 40,000
Premark International, Inc. 400 21,450
Presidential Life Corp. 800 7,500
Presstek Inc. 900 97,594
Price Costco Inc.* 1,900 35,744
Price Enterprises Inc. 700 11,113
Primadonna Resorts Inc.* 900 14,006
Primark Corp.* 1,100 40,700
Prime Hospitality Corp.* 700 9,538
Procter & Gamble Co. 4,300 364,425
Production Operators Corp. 300 9,375
Proffitt's, Inc.* 300 9,525
Progress Software Corp. 400 6,000
Protein Design Labs, Inc.* 500 12,313
Provident Bancorp Inc. 900 45,113
Providian Corp. 700 31,238
Psinet Inc.* 1,300 12,594
Public Service Co. of New Mexico 1,200 22,350
Public Service Co. of North Carolina Inc. 400 6,400
Public Service Enterprise Group 1,500 41,250
Pulitzer Publishing Co. 900 46,800
Pulte Corp. 100 2,688
Pyxis Corp.* 1,200 30,900
Quaker Oats Co. 900 30,038
</TABLE>
F-77
See accompanying Notes to Financial Statements.
<PAGE> 146
SchwabFunds 36
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Quaker Saint Corp. 900 $12,600
Quality Food Centers, Inc. 400 9,650
Quanex Corp. 300 6,563
Quarterdeck Corp.* 1,100 16,156
Quick & Reilly Group, Inc. 1,100 32,450
Quintiles Transnational Corp. 600 39,075
RCSB Financial Inc. 400 9,525
Ralcorp Holdings, Inc.* 1,000 25,625
Ralston Purina Co. 700 46,813
Rational Software Corp. (New)* 400 15,850
Raychem Corp. 300 19,350
Raymond James Financial Inc. 500 11,250
Raytheon Co. 1,500 76,875
Reading & Bates Corp. (New)* 2,100 41,475
Reebok International Ltd. 400 11,050
Regal Beloit Corp. 500 10,500
Regal Cinemas, Inc. 450 16,706
Regeneron Pharmaceuticals Inc.* 700 8,838
Regions Financial Corp. 760 33,393
Regis Corp. 300 9,188
Reinsurance Group America Inc. 900 32,963
Reliance Group Holdings Inc. 4,000 31,500
Renaissance Commerce Corp. 1,300 32,338
Renal Treatment Centers Inc. 600 14,250
Republic Industries Inc.* 2,100 65,756
Republic New York Corp. 300 17,850
Respironics Inc. 400 8,475
Rexel Inc.* 700 8,575
Reynolds Metals Co. 400 23,650
Richfood Holdings Inc. 1,400 39,375
Riggs National Corp.* 700 8,619
Rio Hotel & Casino Inc.* 500 7,625
Rite Aid Corp. 400 12,350
River Forest Bancorp, Inc. 500 14,625
RoTech Medical Corp.* 400 14,850
Roadway Express Inc.* 350 4,988
Robert Half International Inc.* 1,300 63,213
Roberts Pharmaceutical Corp.* 400 7,525
Robotic Vision Systems Inc.* 400 6,400
Rock Tennessee Co. Class A 900 15,300
Rockwell International Corp. 1,400 82,425
Rohm & Haas Co. 500 33,250
Rohr Industries Inc.* 400 7,200
</TABLE>
F-78
See accompanying Notes to Financial Statements.
<PAGE> 147
SchwabFunds 37
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Rollins Truck Leasing Corp. 1,100 $ 11,413
Rollins, Inc. 1,200 28,050
Roosevelt Financial Group Inc. 1,600 29,700
Roper Industries 400 18,200
Ross Stores Inc. 600 14,963
Rouge Steel Co. 300 6,638
Rowan Cos Inc.* 3,700 47,175
Royal Dutch Petroleum Co. 3,300 466,125
Rubbermaid Inc. 1,000 28,375
Ruddick Corp. 1,600 19,600
Russ Berrie & Co. Inc. 500 8,500
Russell Corp. 200 5,350
Ryans Family Steak Houses* 2,500 22,656
Ryder Sys Inc. 400 10,900
Rykoff-Sexton, Inc. 400 6,350
S & T Bancorp, Inc. 300 9,150
S3 Inc. 1,700 20,400
SEI Corp. 500 11,313
SPS Technologies, Inc. 100 5,563
SPS Transaction Services, Inc. 900 27,788
SUPERVALU Inc. 300 9,263
Safeco Corp. 800 26,850
Safeguard Scientifics Inc. 900 52,763
Safety-Kleen Corp. 300 4,313
Saint Paul Bancorp Inc. 500 12,375
Salick Health Care, Inc.* 300 11,513
Salomon Inc. 600 22,500
Sanifill Inc.* 500 19,188
Sanmina Corp. 400 11,800
Santa Fe Energy Resources, Inc.* 400 4,200
Santa Fe Pacific Gold Corp. 700 11,200
Sara Lee Corp. 3,500 114,188
Savannah Foods & Industries Inc. 600 6,525
Sbarro, Inc. 500 12,625
Sbc Communications Inc. 4,200 221,025
Schering Plough Corp. 2,300 133,688
Schlumberger Ltd 1,500 118,688
Schulman (A.), Inc. 1,100 23,444
Schweitzer Mauduit International Inc.* 100 2,750
Scientific Games Holdings Corp. 800 21,800
Scientific-Atlanta, Inc. 400 7,100
Scotts Co. Class A* 500 8,875
Seaboard Corp. 100 23,800
</TABLE>
F-79
See accompanying Notes to Financial Statements.
<PAGE> 148
SchwabFunds 38
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Seagate Technology, Inc.* 884 $ 48,399
Seagram Ltd 2,800 90,650
Seagull Energy Corp.* 1,400 31,675
Sears Roebuck & Co. 2,900 141,375
Security Capital Corp. 300 17,438
Security Dynamics Tech 1,300 68,575
Seitel, Inc.* 200 5,425
Selective Insurance Group, Inc. 400 14,300
Sepracor Inc.* 700 10,325
Sequa Corp. Class A* 300 10,238
Sequent Computer Systems, Inc.* 800 9,400
Service Corp. International 700 34,125
Service Merchandise Co. Inc.* 2,700 14,175
Shared Medical Systems Corp. 100 6,025
Sherwin Williams Co. 600 26,625
Shiva Corp.* 400 36,400
Shoneys Inc.* 1,200 10,800
Shopko Stores Inc. 900 12,600
Shorewood Packaging Corp.* 600 9,188
Showboat, Inc. 500 12,250
Shurgard Storage Ctrs Inc. Class A 700 18,375
Sierra Health Services Inc.* 500 16,313
Sierra On-Line Inc. 500 16,781
Sierra Pacific Resources 1,300 32,663
Sigcorp Inc. 900 31,388
Sigma-Aldrich Corp. 400 22,900
Silicon Graphics Inc.* 900 22,500
Silicon Valley Group Inc.* 1,000 24,250
Sithe Energies Inc.* 1,300 19,338
Smart & Final Inc. 500 12,375
Smith International Inc.* 1,100 27,775
Smith's Food & Drug Centers, Inc. Class B 300 7,200
Smithfield Foods Inc.* 900 25,988
Smucker (J.M.) Co. Class A 1,200 26,700
Smucker (J.M.) Co. Class B 300 6,188
Snap-on Tools Corp. 200 9,350
Snyder Oil Corp. 700 5,863
Sofamor/danek Group Inc.* 1,100 37,263
Softkey International Inc.* 1,200 24,150
Sola International Inc.* 800 24,900
Solvex Corp.* 800 8,450
Somatogen Inc.* 500 8,719
Sonat Inc. 400 14,400
</TABLE>
F-80
See accompanying Notes to Financial Statements.
<PAGE> 149
SchwabFunds 39
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Sotheby's Holdings, Inc. Class A 1,600 $ 23,400
South Jersey Industries Inc. 300 6,413
Southdown Inc. 400 9,450
Southern Co. 5,100 121,763
Southern Union Co. (New) 400 8,200
Southwest Airlines Co. 1,400 41,475
Southwest Gas Corp. 700 12,075
Southwestern Energy Co. 600 7,200
Sovereign Bancorp Inc. 2,205 24,255
SpaceLabs Medical Inc.* 300 7,088
Speedway Motorsports, Inc. 1,400 39,550
Spiegel, Inc. Class A 3,700 38,388
Sports Authority Inc.* 500 13,688
Springs Industries Inc. 1,100 50,600
Sprint Corp. 2,700 102,600
St. John's Knits, Inc. 200 13,475
St. Jude Medical, Inc. 400 14,925
St. Paul Companies, Inc. 600 33,300
Stac Inc.* 700 7,394
Standard Financial Inc. 400 5,850
Standard Prods Co. 500 12,188
Standard Register 1,200 28,950
Standex International Corp. 400 12,050
Stanhome Inc. 500 15,938
Stanley Works 200 11,000
State Auto Financial Corp. 400 9,200
Station Casinos Inc.* 1,000 11,750
Stein Mart Inc.* 500 7,563
Steris Corp. 500 14,938
Sterling Chems Inc.* 2,300 29,038
Stewart & Stevenson Services, Inc. 900 25,313
Stillwater Mining Co.* 600 12,600
Stone & Webster, Inc. 400 13,150
Stone Container Corp. 500 7,000
Stratosphere Corp.* 1,900 20,425
Stratus Computer Inc.* 1,100 30,525
Strawbridge & Clothier Class A 300 5,794
Stride Rite Corp. 1,400 12,775
Structural Dynamics Research Corp* 1,300 43,713
Student Loan Corp. 1,000 38,625
Sturm, Ruger & Co., Inc. 800 30,800
Sumitomo Bank 400 10,300
Summit Bancorp 1,260 46,620
</TABLE>
F-81
See accompanying Notes to Financial Statements.
<PAGE> 150
SchwabFunds 40
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Summit Technology Inc. 1,250 $ 29,766
Sun Healthcare Group Inc.* 1,300 17,225
Sun Inc. 400 11,550
Sun Microsystems Inc. 1,200 52,575
Sunrise Medical Inc.* 500 7,000
Sunshine Mining & Refining Co.* 4,500 6,750
Suntrust Bks Inc. 700 49,000
Superior Industries International, Inc. 1,000 25,000
Susquehanna Bancshares, Inc. 300 8,588
Swift Transportation Inc. 600 10,650
Synetic Inc.* 900 34,088
Sysco Corp. 1,300 42,738
Systems & Computer Technology Corp.* 300 4,463
TCA Cable TV Inc. 1,100 31,900
TJ International Inc. 400 6,200
TJX Companies, Inc. 300 7,538
TNT Freightways Corp. 600 13,725
TRINOVA Corp. 2,100 66,938
TRW Inc. 400 35,650
Tandem Computers Inc.* 600 5,325
Tandy Corp. 300 13,875
Target Therapeutics Inc. 400 24,275
Tech Data Corp.* 1,400 23,363
Tecnol Medical Products Inc.* 600 10,650
Tejas Gas Corp. 800 39,100
Tektronix, Inc. 300 9,750
Tele Communications Inc. (New) - Tci Group
Series A 5,000 92,813
Teledyne Inc. 200 5,600
Teleflex Inc. 500 22,563
Tellabs Inc. 600 29,025
Telxon Corp. 400 8,450
Temple-Inland Inc. 400 18,750
Tencor Instrs 1,100 19,869
Tenet Healthcare Corp.* 1,200 25,200
Tenneco Inc. 1,200 67,050
Texaco Inc. 1,800 154,800
Texas Industries Inc. 300 19,088
Texas Instruments Inc. 1,200 61,050
Texas Utilities Co. 1,900 78,613
Textron Inc. 600 48,000
Thermedics Inc.* 1,400 39,550
Thermo Fibertek Inc. 1,500 33,375
</TABLE>
F-82
See accompanying Notes to Financial Statements.
<PAGE> 151
SchwabFunds 41
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Thiokol Corp. 500 $ 21,938
Thomas & Betts Corp. 100 7,500
Tiffany & Co. (New) 900 51,075
Time Warner Inc. 2,900 118,538
Times Mirror Co. (New) Series A 600 23,625
Timken Co. 100 4,613
Titan Wheel International Inc. 500 8,250
Toll Brothers, Inc.* 1,300 22,425
Topps Inc. 1,100 5,981
Torchmark Corp. 500 22,500
Toro Co. 300 9,638
Toy Biz Inc. Class A* 400 7,150
Toys "R" Us, Inc.* 2,300 62,100
Transaction Systems Architects Inclusive A* 300 12,075
Transamerica Corp. 400 29,950
Transport World Airlines Inc.* 1,500 30,000
Travelers Group Inc. 2,000 132,000
Tredegar Industries Inc. 300 6,938
Trenwick Group Inc. 200 10,300
TriMas Corp. 1,300 28,600
Triangle Pacific Corp. Delaware* 300 5,156
Triarc Cos., Inc. Class A* 700 8,750
Tribune Co. (New) 400 26,350
Trident Microsystems Inc.* 300 4,331
Trimble Navigation Ltd* 500 11,375
True North Communications 700 17,500
Trust Company of New Jersey 600 8,100
Trustco Bank Corp. NY 400 8,300
Trustmark Corp. 1,500 34,125
Tuscon Electric Power Co.* 4,300 12,363
Tyco Interest Ltd 1,100 39,325
U S Filter Corp. (New) 1,100 30,800
U S Order Inc.* 400 8,100
U S WEST, Inc. (Communications Group) 3,400 110,075
U S West Inc. (Media Group)* 3,800 78,375
U.S. Bancorp 1,200 40,950
U.S. Healthcare, Inc. 1,000 46,063
U.S. Home Corp. (New)* 300 7,725
U.S.A. Waste Services Inc.* 2,100 53,550
UGI Corp. (New) 1,300 27,625
UNR Industries, Inc. 1,200 9,675
UNUM Corp. 400 23,800
USAir Group, Inc.* 3,000 54,750
</TABLE>
F-83
See accompanying Notes to Financial Statements.
<PAGE> 152
SchwabFunds 42
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
USF&G Corp. 500 $ 7,750
USLIFE Corp. 100 2,938
UST Corp. 400 5,400
UST Inc. 1,200 38,250
USX Corp. (Marathon Group) (New) 2,000 38,500
USX Corp. (U.S. Steel Group) 400 13,850
Ultratech Stepper Inc. 1,000 17,500
Umb Financial Corp. 1,050 39,244
Unicom Corp. 1,700 45,900
Unifirst Corp. 600 11,325
Unilever 1,100 149,325
Union Camp Corp. 500 24,813
Union Carbide Corp. 900 44,663
Union Electric Co. 700 28,700
Union Pacific Corp. 1,300 89,213
Uniroyal Chemical Corp.* 500 4,750
Unisys Corp.* 900 5,400
United Bankshares, Inc. 300 8,850
United Carolina Bancshares Corp. 600 14,700
United Companies Financial Corp. 1,200 38,400
United Dental Care Inc.* 200 7,825
United Healthcare Corp. 1,100 67,650
United Illuminating Co. 400 14,750
United Insurance Companies, Inc. 1,400 30,713
United International Holdings Inc. Class A* 600 9,750
United Meridian Corp.* 800 19,100
United States Surgical Corp. 300 9,825
United Stationers Inc. 400 8,700
United Technologies Corp. 800 89,800
United Television Inc. 300 26,850
United Waste Systems, Inc.* 900 44,550
United Water Resources Inc. 900 11,813
United Wisconsin Services, Inc. 300 6,488
Unitrode Corp.* 400 9,700
Universal Health Services Inc. Class B* 400 21,250
Unocal Corp. 1,700 56,738
V.F. Corp. 400 22,100
VLSI Technology, Inc.* 1,300 16,656
Valassis Communications Inc.* 1,700 28,263
Valhi, Inc. 3,900 23,888
Valley National Bancorp 1,400 38,850
Valmont Industries, Inc. 300 8,888
Value Line, Inc. 300 10,875
</TABLE>
F-84
See accompanying Notes to Financial Statements.
<PAGE> 153
SchwabFunds 43
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Vanguard Cellular Systems, Inc. Class A* 1,200 $ 24,225
Varco International Inc.* 700 8,488
Varity Corp.* 200 8,650
Ventritex Inc.* 500 7,656
Verifone Inc.* 700 29,400
Veritas Software Co. 200 6,538
Vertex Pharmaceuticals Inc.* 900 24,075
Vesta Insurance Group Inc. 1,200 39,150
Viacom Inc. Class B* 2,700 113,738
Vicor Corp. 1,500 22,500
Victoria Bankshares, Inc. 200 7,688
Videoserver Inc.* 300 7,463
Vintage Petroleum Inc. 500 10,188
Vital Signs Inc. 300 7,294
Vitalink Pharmacy Services, Inc.* 300 6,638
Vivra Inc. 1,650 47,438
WD-40 Co. 200 9,575
WLR Foods, Inc. 400 5,325
WMS Industries Inc.* 600 10,425
WMX Technologies Inc. 3,500 111,125
Waban Inc.* 1,300 34,125
Wabash National Corp. 600 11,325
Wachovia Corp. (New) 1,100 49,225
Wal-Mart Stores, Inc. 16,000 370,000
Walgreen Co. 1,700 55,463
Wang Laboratories Inc. (New)* 1,300 30,794
Warner Lambert Co. 900 92,925
Washington Energy Co. 600 12,300
Washington National Corp. 400 10,700
Watkins-Johnson Co. 200 7,150
Watts Industries Inc. Class A 1,300 25,838
Wausau Paper Mills Co. 1,625 37,781
Weatherford Enterra Inc.* 1,900 66,263
Webb Delaware Corp. 400 7,350
Wellman Inc. 1,200 28,200
Wells Fargo & Co. 300 78,300
Wendy's International, Inc. 500 9,063
Werner Enterprises Inc. 1,100 26,125
West Inc. 400 9,300
Westamerica Bancorp 300 14,138
Westcorp Inc. 1,100 20,350
Westcott Communications Inc.* 600 10,575
Western Atlas, Inc.* 400 24,000
</TABLE>
F-85
See accompanying Notes to Financial Statements.
<PAGE> 154
SchwabFunds 44
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
Western Gas Resources Inc. 600 $ 8,625
Western Waste Industries* 400 15,250
Westinghouse Air Brake Co. (New) 600 6,450
Westinghouse Electric Corp. 2,900 55,825
Westpoint Stevens Inc. Class A 1,300 25,188
Westvaco Corp. 500 14,688
Westwood One Inc.* 900 16,650
Weyerhaeuser Co. 1,300 59,963
Whirlpool Corp. 400 22,100
Whitman Corp. 500 12,125
Whitney Holding Corp. 400 12,450
Whx Corp.* 600 6,750
Wicor Inc. 900 30,375
Willamette Industries, Inc. 600 36,000
Williams Cos Inc. 700 35,263
Williams Sonoma Inc. 1,100 24,819
Winn Dixie Stores Inc. 1,100 36,988
Winnebago Industries, Inc. 500 4,313
Wm Wrigley Junior Co. 800 46,900
Wolverine Tube Inc.* 400 16,250
Wolverine World Wide Inc. 900 25,200
Woolworth Corp. 700 10,938
Worldcom Inc.* 1,300 59,881
Worthington Industries Inc. 1,100 21,931
Wps Resources Corp. 1,100 36,988
Wyle Laboratories 300 10,388
Wyman Gordon Co.* 1,000 17,000
X-Rite, Inc. 500 7,375
XTRA Corp. 600 28,050
Xerox Corp. 800 100,400
Yankee Energy System, Inc. 300 6,713
Yellow Corp. 900 11,363
Zale Corp. (New)* 1,000 17,188
Zebra Technologies Corp. Class A 1,600 42,000
Zeigler Coal Holding Co. 800 11,600
Zenith Electronics Corp.* 2,100 13,913
Zenith National Insurance Corp. 400 9,550
Zero Corp. 500 8,375
Zilog Inc.* 700 23,625
Zions Bancorp 900 63,900
Zurn Industries, Inc. 400 8,200
</TABLE>
F-86
See accompanying Notes to Financial Statements.
<PAGE> 155
SchwabFunds 45
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----
<S> <C> <C>
i-Stat Corp.* 300 $ 7,046
-----------
50,235,434
-----------
TOTAL COMMON STOCK
(Cost $62,873,642) 67,217,194
-----------
PREFERRED STOCK--0.1%
AUSTRALIA--0.0%
News Corp. (Limited Voting Shares) 3,720 18,895
-----------
GERMANY--0.1%
Henkel KGaA 55 20,490
Lufthansa AG (Non-Voting) 95 13,739
RWE AG (Non Voting)* 1,013 30,638
Sap AG (Non-Voting) 111 15,985
Volkswagen AG (Non Voting) 42 10,697
-----------
91,549
-----------
ITALY--0.0%
Fiat Finance SpA 5,589 10,215
-----------
UNITED STATES--0.0%
Teledyne, Inc. Preferred Series E 2 29
-----------
TOTAL PREFERRED STOCK
(Cost $119,182) 120,688
-----------
<CAPTION>
Par
---
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--17.3%
U.S. Treasury Bonds
7.25%, 05/15/16 $12,400,000 12,949,816
7.125%, 02/15/23 2,500,000 2,577,400
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $16,048,120) 15,527,216
-----------
</TABLE>
F-87
See accompanying Notes to Financial Statements.
<PAGE> 156
SchwabFunds 46
- --------------------------------------------------------------------------------
Schwab Asset Director-High Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
--- -----
<S> <C> <C>
SHORT-TERM INVESTMENTS--7.4%
AGENCY OBLIGATIONS--DISCOUNT NOTES--6.0%
Federal National Mortgage Assoc.
5.21%, 04/11/96 $2,200,000 $ 2,195,877
5.12%, 04/29/96 3,200,000 3,188,445
---------- -----------
5,400,000 5,384,322
---------- -----------
REPURCHASE AGREEMENT--1.4%
UNITED STATES
State Street Bank
4.75%, 04/01/96 1,288,000 1,288,000
---------- -----------
1,288,000 1,288,000
---------- -----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $6,672,210) 6,688,000 6,672,322
---------- -----------
TOTAL INVESTMENTS -- 99.5%
(Cost $85,713,154) 89,537,420
OTHER ASSETS AND LIABILITIES -- 0.5%
Other Assets 854,787
Liabilities (382,516)
-----------
472,271
-----------
NET ASSETS -- 100.0%
Applicable to 8,494,697 outstanding $0.00001 par
value shares (unlimited shares authorized) $90,009,691
===========
NET ASSET VALUE PER SHARE $10.60
======
</TABLE>
- -----------
*Non-Income Producing Security
F-88
See accompanying Notes to Financial Statements.
<PAGE> 157
SchwabFunds 1
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
COMMON STOCK--56.9%
AUSTRALIA - 0.4%
Amcor Ltd. 1,504 $ 9,778
Australia & New Zealand Banking Group 3,541 16,934
Broken Hill Proprietary Co., Ltd. 4,741 67,501
CRA Ltd. 1,537 23,000
Commonwealth Bank Group 2,324 18,142
National Australia Bank 3,427 30,529
News Corp., Ltd. 4,881 28,568
Western Mining Corp. 2,717 17,962
Westpac Banking Corp. 4,468 21,018
--------
233,432
--------
BELGIUM - 0.1%
Electrabel 109 24,288
Electrabel, AFV1 25 5,620
Petrofina SA 57 16,045
Societe Generale de Belgique 173 13,686
Tractebel Investor International Capital 15 5,859
Tractebel Investor International Capital 18 6,942
--------
72,440
--------
CANADA - 0.5%
Alcan Aluminum Ltd. 551 17,781
BCE Inc. 764 27,036
Bank of Montreal 651 15,159
Bank of Nova Scotia Halifax 565 12,742
Barrick Gold Corp. 1,453 44,224
Canadian Imperial Bank of Commerce 643 19,335
Canadian Pacific Ltd. 838 16,671
Imperial Oil Ltd. 472 18,563
Noranda Inc. 575 12,177
Northern Telecom Ltd. 621 29,547
Placer Dome Inc. 585 16,733
Royal Bank Canada Montreal Quebec 769 17,977
Seagram Co. Ltd. 738 23,883
Thomson Corp. 1,442 21,019
</TABLE>
F-89
See accompanying Notes to Financial Statements.
<PAGE> 158
SchwabFunds 2
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
CANADA (Continued)
Toronto-Dominion Bank 738 $ 12,787
--------
305,634
--------
DENMARK - 0.0%
Tele Danmark AS Series B 321 16,724
--------
FRANCE - 1.0%
AXA Groupe SA 453 27,838
Alcatel Alsthom Cie Generale d'Electricite SA 369 34,208
BQE National Paris 471 18,423
Carrefour 63 46,133
Cie Financiere de Paribas (Bearer) 294 17,863
Cie Generale de Eaux 287 29,347
Compagnie de Saint-Gobain SA 204 26,490
Danone Groupe 174 26,671
Elf Aquitaine 665 45,091
L'Air Liquide 162 29,496
L'Oreal SA 150 46,998
LVMH Moet Hennessy Louis Vuitton 213 54,049
Lafarge Coppee SA 225 14,895
Lyonnaise des Eaux-Dumez 139 12,999
Michelin Class B (Reg.) 265 12,628
PSA Peugeot Citroen 123 18,756
Renault (Regie Nationale) 585 16,959
Rhone-Poulenc SA A Shares 786 20,273
Sanofi 251 18,240
Schneider SA 312 13,815
Societe Generale 214 23,795
Suez Group 390 15,139
TOTAL Class B 575 38,817
Union des Assurances de Paris 737 15,102
--------
624,025
--------
GERMANY - 1.1%
BASF Group 149 40,220
Bankgesell Berlin 53 12,242
Bayer AG 170 57,910
Bayer Hypo/wech Bank 629 15,585
Bayer Motoren Werk 43 22,471
</TABLE>
F-90
See accompanying Notes to Financial Statements.
<PAGE> 159
SchwabFunds 3
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
GERMANY (Continued)
Bayerische Vereinsbank AG 572 $ 17,552
Commerzbank AG 73 16,812
Daimler-Benz AG 126 68,535
Deutsche Bank AG 1,161 58,455
Dresdner Bank AG 929 24,825
Hoechst AG 160 56,682
Linde AG 13 8,004
Lufthansa AG (Bearer) 87 13,790
Mannesmann AG 77 28,061
Muenchener Rueckversicherung 3 5,283
Muenchener Rueckversicherung (Reg.) 18 37,492
RWE AG 710 28,505
Sap AG 132 18,508
Schering AG 105 8,314
Siemens AG 137 75,400
Thyssen AG 77 13,963
VIAG AG 44 17,927
Veba AG 1,190 57,835
Vereinigte Elektrizitatswerke Westfalen Series B 43 14,170
Volkswagen AG 59 20,682
--------
739,223
--------
HONG KONG - 0.6%
CITIC Pacific 6,000 23,196
Cheung Kong Holdings 3,000 21,334
China Light & Power 6,000 27,075
Hang Seng Bank Ltd. 3,400 34,950
Henderson China 12 261
Henderson Land Development Co. 3,000 20,946
Hongkong Electric Holdings Ltd. 8,500 27,641
Hongkong Telecom International 22,400 44,748
Hutchison Whampoa Ltd. 6,000 37,704
New World Development Co. 5,115 23,941
Sun Hung Kai Properties 5,000 45,578
Swire Pacific Ltd. Class A 4,000 35,299
Wharf Holdings 6,000 22,420
--------
365,093
--------
</TABLE>
F-91
See accompanying Notes to Financial Statements.
<PAGE> 160
SchwabFunds 4
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
ITALY - 0.3%
Alleanza Assicurazioni 850 $ 6,875
Assicurazioni Generali 1,963 43,817
Fiat Finance SpA 8,042 25,223
Fiat Finance SpA 5,394 9,429
INA 6,149 8,380
STET 8,327 23,094
STET (Non-Convertible) 2,791 5,546
Telecom Italia 16,255 25,724
Telecom Italia (Non-Convertible) 5,096 7,188
Telecom Italia Mob 14,418 26,169
Telecom Italia Mob di Risp 5,913 6,507
--------
187,952
--------
JAPAN - 5.1%
Ajinomoto Co., Inc. 1,000 11,405
All Nippon Airways Co., Ltd. 2,000 20,753
Asahi Bank 2,000 23,931
Asahi Breweries 1,000 11,498
Asahi Chemical Industry Co. 2,000 14,807
Asahi Glass Co., Ltd. 1,000 11,591
Bank of Fukuoka 1,000 8,320
Bank of Tokyo 2,000 29,727
Bank of Yokohama 1,000 7,946
Bridgestone Corp. 1,000 16,733
Canon Inc. 1,000 19,070
Chiba Bank 1,000 8,600
Chubu Electric Power Co. 1,000 22,996
DDI Corp. 2 15,237
Dai Nippon Printing Co. 1,000 18,229
Dai-Ichi Kangyo Bank, Ltd. 5,000 97,686
Daiei Inc. 1,000 11,965
Daiwa Bank 2,000 14,695
Daiwa House Industry Co. 1,000 15,705
Daiwa Securities Co. 1,000 15,237
East Japan Railway Co. 4 20,566
Fuji Bank, Ltd. 4,000 87,123
Fuji Photo Film Co. 1,000 28,605
Fujitsu Ltd. 2,000 18,453
Gunma Bank 1,000 10,470
Hachijuni Bank 1,000 10,937
</TABLE>
F-92
See accompanying Notes to Financial Statements.
<PAGE> 161
SchwabFunds 5
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
JAPAN (Continued)
Hankyu Corp. 1,000 $ 5,964
Hitachi Ltd. 4,000 38,888
Hitachi Zosen 1,000 5,384
Hokkaido Electric Power Co. 1,000 22,716
Hokuriku Electric Power Co. 1,000 22,155
Honda Motor Co., Ltd. 1,000 21,781
Industrial Bank of Japan, Ltd. 3,000 82,730
Ishikawajima-Harima Heavy Industries 3,000 14,022
Ito-Yokado Co., Ltd. 1,000 59,360
Itochu Corp. 2,000 14,022
Japan Airlines Co., Ltd. 2,000 14,789
Japan Tobacco Inc. 2 18,509
Joyo Bank 1,000 7,890
Kajima Corp. 1,000 10,750
Kansai Electric Power Co. 1,000 23,183
Kao Corp. 1,000 12,433
Kawasaki Heavy Industries 1,000 5,104
Kawasaki Steel Co. 3,000 10,741
Kinki Nippon Railway Co. 2,060 15,290
Kirin Brewery Co., Ltd. 1,000 12,059
Kobe Steel 3,000 9,283
Kokusai Denki 1,000 92,452
Komatsu Ltd. 1,000 8,909
Kubota Corp. 2,000 13,255
Kyocera Corp. 1,000 67,866
Kyushu Electric Power Co. 2,000 45,431
Long-Term Credit Bank of Japan 3,000 25,071
Marubeni Corp. 2,000 11,199
Matsushita Communication Industrial 1,000 23,744
Matsushita Electric Industrial Co., Ltd. 3,000 48,796
Matsushita Electric Works 1,000 10,750
Mitsubishi Bank 4,200 88,731
Mitsubishi Chemical Corp. 2,000 10,563
Mitsubishi Corp. 2,000 26,174
Mitsubishi Electric Corp. 2,000 14,882
Mitsubishi Estate Co. 1,000 13,742
Mitsubishi Heavy Industries 4,000 34,550
Mitsubishi Materials Co. 1,000 5,375
Mitsubishi Motors 1,000 8,544
Mitsubishi Trust & Banking Corp. 1,000 15,892
Mitsui & Co. 2,000 18,116
</TABLE>
F-93
See accompanying Notes to Financial Statements.
<PAGE> 162
SchwabFunds 6
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
JAPAN (Continued)
Mitsui Fudosan Co. 1,000 $ 12,994
Mitsui Marine & Fire Insurance 1,000 7,534
Mitsui Trust & Banking Co. 1,000 11,218
NEC Corp. 2,000 23,183
NKK Corp. 3,000 8,666
New Oji Paper Co. 1,000 9,114
Nikko Securities Co. 2,000 25,427
Nikon Corp. 1,000 12,246
Nippon Credit Bank 2,000 8,301
Nippon Express Co. 1,000 9,815
Nippon Oil Co. 1,000 6,385
Nippon Paper Industries Co. 1,000 7,133
Nippon Steel Corp. 7,000 24,080
Nippon Telegraph & Telephone Corp. 22 160,823
Nippon Yusen Kabushiki Kaisha 1,000 5,693
Nippondenso 1,000 20,192
Nissan Motor Co., Ltd. 3,000 23,220
Nomura Securities Co., Ltd. 2,000 43,936
Obayashi Corp. 1,000 8,581
Odakyu Electric Railway Co. 1,030 7,144
Oki Electric Industry Co., Ltd. 1,000 7,684
Omron Corp. 1,000 22,155
Ono Pharmaceutical Co. 1,000 34,588
Osaka Gas Co. 2,000 7,235
Ricoh Co., Ltd. 1,000 10,750
Rohm Co. 1,000 57,023
Sakura Bank 5,000 57,023
Sankyo Co. 1,000 22,903
Sanwa Bank 4,000 80,393
Sanyo Electric Co., Ltd. 2,000 11,965
Seibu Railway Co. 1,000 47,207
Sekisui Chemical Co. 1,000 13,087
Sekisui House 1,000 12,526
Seven-Eleven Japan Co. 1,100 70,848
Sharp Corp. 1,000 15,985
Shimizu Corp. 1,000 10,937
Shizuoka Bank 1,000 12,620
Sony Corp. 1,000 59,734
Sony Music Entertainment 1,000 51,414
Sumitomo Bank 5,000 100,958
Sumitomo Chemical Co. 2,000 10,283
</TABLE>
F-94
See accompanying Notes to Financial Statements.
<PAGE> 163
SchwabFunds 7
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
JAPAN (Continued)
Sumitomo Corp. 1,000 $ 10,563
Sumitomo Electric Industries 1,000 13,461
Sumitomo Marine & Fire Insurance Co. 1,000 8,581
Sumitomo Metal Industries 3,000 9,395
Sumitomo Trust & Banking Co. 1,000 13,742
Suzuki Motor Corp. 1,000 12,339
Taisei Corp. 1,000 7,104
Taisho Pharmaceutical Co. 1,000 20,566
Takeda Chemical Industries 1,000 15,611
Teijin Ltd. 1,000 5,515
Tobu Railway Co. 1,000 6,497
Tohoku Electric Power Co. 1,000 23,183
Tokai Bank 2,000 24,866
Tokio Marine & Fire Insurance Co. 2,000 25,987
Tokyo Electric Power Co., Inc. 2,000 51,227
Tokyo Electron 1,000 34,120
Tokyo Gas & Electric Industrial 3,000 10,769
Tokyu Corp. 1,000 7,619
Tonen 1,000 14,676
Toppan Printing Co. 1,000 12,994
Toray Industries 2,000 12,938
Toshiba Corp. 4,000 30,362
Toto 1,000 14,302
Toyo Seikan 1,000 35,242
Toyo Trust & Banking Co. 1,000 9,339
Toyoda Automatic Loom 1,000 18,416
Toyota Motor Corp. 5,000 110,306
Yamaichi Securities Co. 1,000 7,712
Yasuda Fire & Marine Insurance Co. 1,000 7,450
Yasuda Trust & Banking Co. 1,000 6,142
----------
3,317,407
----------
NETHERLANDS - 0.8%
Abn Amro Holdings NV 758 37,714
Aegon NV 634 29,933
Akzo Nobel NV 174 19,347
Elsevier NV 1,615 24,732
Heineken NV 123 26,542
Internationale Nederlanden Groep 701 50,917
Koninklijke PTT Nederland 1,132 44,537
</TABLE>
F-95
See accompanying Notes to Financial Statements.
<PAGE> 164
SchwabFunds 8
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
NETHERLANDS (Continued)
Philips Electronics NV 841 $ 30,594
PolyGram NV 441 26,693
Royal Dutch/Shell Group (Bearer) 1,313 185,971
Unilever NV 392 53,458
Wolters Kluwer CVA 164 18,047
--------
548,485
--------
SINGAPORE - 0.3%
City Developments 1,000 8,880
Development Bank Singapore 1,000 12,290
Hong Kong Land Holdings 5,000 12,000
Jardine Matheson Holdings Ltd. 1,600 12,480
OCBC Bank 2,000 26,852
Singapore Airlines Ltd. 2,000 20,743
Singapore Telecom 27,000 66,364
United Overseas Bank 2,000 20,175
--------
179,784
--------
SPAIN - 0.3%
Argentaria 307 12,986
Banco de Bilbao Vizcaya SA (Reg.) 556 20,741
Banco de Santander SA (Reg.) 391 18,618
Empresa Nacional de Electricidad 637 36,491
Iberdrola SA 2,266 20,905
Repsol, SA 735 27,715
Telefonica Internacional de Espana, SA 2,300 36,506
--------
173,962
--------
SWEDEN - 0.3%
ASEA AB Series B Free shares 59 6,080
Asea 164 17,022
Astra AB Series A Free shares 1,228 56,923
Astra AB Series B Free shares 176 8,106
Ericsson (L.M.) Telephone Series B Free shares 2,340 51,519
Sandvik AB Series A Free shares 322 6,752
Sandvik AB Series B Free shares 338 7,087
Volvo AB Series A Free shares 289 6,796
</TABLE>
F-96
See accompanying Notes to Financial Statements.
<PAGE> 165
SchwabFunds 9
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
SWEDEN (Continued)
Volvo AB Series B Free shares 787 $ 18,329
--------
178,614
--------
SWITZERLAND - 1.2%
BBC Brown Boveri 20 24,332
BBC Brown Boveri (Reg.) 25 6,011
CS Holding (Reg.) 453 41,609
Ciba-Geigy Ltd. (Bearer) 7 8,681
Ciba-Geigy Ltd. (Reg.) 60 75,114
Cie Financiere Richemont Series A (Bearer) 10 14,461
Holderbank Fn Glarus (Bearer) 8 6,040
Holderbank Fn Glarus (Reg.) 37 5,755
Nestle Ltd. (Reg.) 100 112,830
Roche Group 18 149,521
Roche Group (Bearer) 4 54,818
Sandoz Ltd. (Bearer) 7 8,145
Sandoz Ltd. (Reg.) 86 100,866
Schweizerische Bankgesellschaft (Bearer) 51 56,600
Schweizerische Bankgesellschaft (Reg.) 34 8,576
Schweizerische Bankverein (Bearer) 49 18,003
Schweizerische Bankverein (Reg.) 82 15,029
Winterthur 9 5,932
Winterthur (Reg.) 11 7,260
Zurich Versicherun (Reg.) 108 31,054
--------
750,637
--------
UNITED KINGDOM - 2.9%
Abbey National 3,214 27,617
Allied Domecq PLC 2,553 19,132
Argyll Group 2,802 13,129
Asda Group 7,099 11,512
Associated British Foods 1,843 11,308
BAA 2,534 20,691
BAT Industries 7,550 55,772
BOC Group 1,173 15,880
BTR 9,037 43,585
Barclays 3,947 43,916
Bass 2,160 24,527
Boots Co. 2,323 21,237
</TABLE>
F-97
See accompanying Notes to Financial Statements.
<PAGE> 166
SchwabFunds 10
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
UNITED KINGDOM (Continued)
<S> <C> <C>
British Airways 2,370 $ 19,352
British Gas 10,622 37,044
British Petroleum 13,568 118,658
British Sky Broadcast 4,306 28,720
British Steel 4,942 14,331
British Telecom 15,266 86,151
Cable & Wireless 5,413 44,034
Cadbury Schweppes 2,412 18,443
Commercial Union 1,628 14,138
General Electric Co. 6,722 37,550
Glaxo Wellcome 8,483 106,426
Granada Group 1,424 16,300
Grand Metropolitan, Inc. 5,155 33,202
Great University Stores 2,463 25,299
Guinness 4,948 36,023
HSBC Holdings 4,332 66,035
HSBC Holdings 2,089 31,995
Hanson Industries 12,805 37,426
Imperial Chemical Industries 1,772 24,990
Kingfisher 1,636 14,208
Marks & Spencer PLC 6,856 44,053
National Power 2,904 20,699
National Westminster Bancorp 4,208 40,815
P & O 1,475 12,055
Pearson, Inc. 1,355 13,815
Powergen 1,778 14,477
Prudential Corp. 4,658 30,286
RTZ Corporation PLC 2,614 37,862
Rank Organisation PLC 2,031 15,019
Reed International 1,374 23,225
Reuters Holdings PLC 4,084 44,318
Royal Bank of Scotland 1,980 14,732
Sainsbury (J) PLC 4,430 24,577
Scot & Newcastle 1,495 14,603
Shell Transport & Trading 8,115 107,135
SmithKline Beecham (Units) 3,207 32,256
SmithKline Beecham PLC 3,387 33,963
Standard Chartered PLC 2,368 21,992
TSB Group 9,737 46,664
Tesco 5,056 20,565
Thorn Emi 1,049 26,953
</TABLE>
F-98
See accompanying Notes to Financial Statements.
<PAGE> 167
SchwabFunds 11
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED KINGDOM (Continued)
Unilever 1,987 $ 37,089
Vodafone Group 7,507 27,785
Zeneca Group 2,316 48,003
----------
1,871,572
----------
UNITED STATES - 42.2%
1st Source Corp. 210 4,594
20th Century Industries 1,000 16,750
360 Communications Co. 466 11,126
3Com Corp. 600 23,888
3DO Co. 300 2,681
AAR Corp. 200 4,075
ACX Technologies Inc. 600 10,875
AG Chemical Equipment Inc. 100 2,250
ALZA Corp. 200 6,150
AMC Entertainment Inc. 200 4,850
AMCORE Financial, Inc. 200 4,175
AMETEK, Inc. 700 12,338
AMP Inc. 700 28,963
AMR Corp. 300 26,850
APS Holding Corp. Class A 200 3,375
AST Research Inc. 600 2,925
AT&T Corp. 5,900 361,375
Abbott Laboratories 3,100 126,325
Abr Information Services Inc. 200 9,250
Access Health Inc. 150 5,850
Acclaim Entertainment Inc. 900 9,563
Accustaff Inc. 900 22,838
Acordia, Inc. 200 6,350
Actel Corp. 200 3,088
Acuson 300 4,725
Acxiom Corp. 600 14,288
Advanced Micro Devices Inc. 520 8,970
Advanced Technology Laboratories, Inc. 200 5,350
Advanced Tissue Sciences Inc. 400 5,700
Advo Inc. 300 2,925
Aetna Life & Casualty Co. 400 30,200
Affiliated Computer Services Inc. 100 4,163
Agouron Pharmaceuticals Inc. 200 7,775
Ahmanson (H.F.) & Co. 300 7,275
</TABLE>
F-99
See accompanying Notes to Financial Statements.
<PAGE> 168
SchwabFunds 12
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Air Express International Corp. 300 $ 7,688
Air Products & Chemicals Inc. 400 21,850
Airbourne Freight Corp. 300 7,575
Airtouch Communications Inc. 1,900 59,138
Alaska Air Group Inc. 200 5,350
Albank Final 240 6,975
Albany International Corp. (New) Class A 700 14,000
Alberto Culver Co. Class B Convertible 100 3,850
Albertson's Inc. 800 29,700
Alcan Aluminum Ltd. 700 22,575
Alco Standard Corp. 500 26,063
Alex Brown Inc. 500 25,938
Alexander & Alexander Services 2,400 45,300
Alfa Corp. 800 11,100
Allen Group Inc. 500 9,688
Allergan Inc. 300 11,063
Alliance Entertainment Corp. 400 3,750
Alliance Pharmaceutical Corp. 400 6,975
Alliance Semiconductor Corp. 700 6,694
Alliant Techsystems Inc. 200 9,675
Allied Group Inc. 100 3,988
Allied Signal Inc. 1,200 70,950
Allstate Corp. 1,800 75,825
Alltel Corp. 700 21,700
Alpharma, Inc. Class A 300 6,975
Alternative Resources Corp. 200 6,550
Altron Inc. 100 2,913
Aluminum Company of America 600 37,575
Amcol International Corp. 200 2,488
Amdahl Corporation 300 2,550
Amerada Hess Corp. 300 16,500
Amerco 800 19,700
America West Airlines, Inc. Class B 900 19,238
American Annuity Group, Inc. 500 5,938
American Bankers Insurance Group, Inc. 300 10,538
American Brands, Inc. 600 25,425
American Business Information, Inc. 300 4,913
American Business Products, Inc. 200 4,525
American Electric Power Co., Inc. 600 25,050
American Express Co. 1,900 93,813
American Financial Enterprises Inc. 200 4,950
</TABLE>
F-100
See accompanying Notes to Financial Statements.
<PAGE> 169
SchwabFunds 13
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
American Freightways Corp. 400 $ 5,075
American General Corp. 800 27,600
American Greetings Corp. Class A 200 5,538
American Heritage Life Investment Corp. 200 4,200
American Home Products Corp. 1,200 130,050
American Homepatient Inc. 100 3,913
American International Group, Inc. 1,800 168,525
American Management Systems, Inc. 600 15,375
American Medical Response, Inc. 300 10,650
American Mobile Satellite Corp. 600 10,350
American Oncology Resources Inc. 300 12,863
American President Companies, Ltd. 400 9,200
American Stores Co. (New) 400 13,200
Americredit Corp. 400 5,550
Ameritech Corp. (New) 2,000 109,000
Amgen Inc. 900 52,256
Amoco Corp. 2,000 144,500
Amresco Inc. 300 4,350
Amsco International, Inc. 400 5,600
Anchor Gaming 100 3,225
Andrew Corp. 150 5,775
Anheuser-Busch Companies, Inc. 1,100 74,113
AnnTaylor Stores Corp. 300 5,400
Antec Corp. 400 6,250
Anthony Industries, Inc. 200 5,300
Apogee Enterprises, Inc. 100 2,150
Apollo Group, Inc. Class A 900 34,988
Apple Computer, Inc. 400 9,825
Applebee's International, Inc. 700 17,500
Applied Magnetics Corp. 500 7,813
Applied Materials, Inc. 500 17,406
Applied Power Inc. Class A 200 6,525
Applix Inc. 200 7,050
Apria Healthcare Group Inc. 900 28,688
AptarGroup, Inc. 300 12,450
Aquila Gas Pipeline Corp. 400 5,550
Arbor Drugs, Inc. 600 12,450
Arch Communications Group, Inc. 500 11,625
Archer-Daniels-Midland Co. 2,200 40,425
Arctco, Inc. 400 3,975
Argonaut Group, Inc. 300 9,394
</TABLE>
F-101
See accompanying Notes to Financial Statements.
<PAGE> 170
SchwabFunds 14
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Armco Inc. 1,700 $ 9,138
Armor All Products Corp. 300 4,819
Armstrong World Industries, Inc. 100 6,213
Arnold Industries Inc. 600 9,600
Arthur J. Gallagher & Co. 500 18,188
Arvin Industries, Inc. 700 14,525
Asarco Inc. 100 3,500
Ashland Coal, Inc. 200 4,675
Ashland Inc. 200 7,675
Aspect Telecommunications Corp. 300 13,763
Associated Banc-Corp. 500 19,063
Associated Group Inc. Class A 200 3,863
Astoria Financial Corp. 200 10,200
Atlantic Richfield Co. 500 59,500
Atlantic Southeast Airlines Inc. 600 15,300
Atlas Air Inc. 400 14,925
Atmos Energy Corp. 200 4,600
Atria Software, Inc. 200 10,900
Augat Inc. 200 3,500
Auspex Systems, Inc. 300 5,381
Authentic Fitness Corp. 300 7,763
Autodesk, Inc. 100 3,813
Automatic Data Processing, Inc. 1,000 39,375
Avatar Holdings, Inc. 100 3,950
Avery Dennison Corp. 200 10,800
Avid Technology, Inc. 300 6,281
Avon Products, Inc. 200 17,150
Aztar Corp. 500 4,250
BET Holdings, Inc. Class A 200 5,575
BFGoodrich Co. 100 7,950
BIG B Inc. 200 2,025
BISYS Group, Inc. 600 19,725
BJ Services Co. 700 23,450
BMC Industries, Inc. 600 12,900
BT Office Prods International Inc. 600 10,125
BWIP Holding, Inc. Class A 300 5,381
Baker Hughes Inc. 400 11,700
Baldor Electric Co. 400 8,050
Baldwin & Lyons, Inc. Class B 300 4,388
Ball Corp. 1,600 49,600
Ballard Medical Products 600 10,800
</TABLE>
F-102
See accompanying Notes to Financial Statements.
<PAGE> 171
SchwabFunds 15
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Bally Entertainment Corp. 1,000 $ 17,250
Bally Total Fitness Holding Corp. 250 1,016
Baltimore Gas & Electric Co. 400 11,050
Banc One Corp. 1,988 70,823
BancTec, Inc. 400 6,900
Bancorp South, Inc. 500 12,625
Bank of Boston Corp. 300 14,888
Bank of New York Co., Inc. 800 41,200
BankAmerica Corp. 1,400 108,500
Bankers Trust New York Corp. 300 21,263
Banta Corp. 150 4,069
Bard C R Inc. 100 3,563
Barnes Group Inc. 100 4,488
Barnett Banks, Inc. 300 18,675
Barrett Resources Corp. 600 15,000
Barrick Gold Corp. 1,300 39,488
Bassett Furniture Industries Inc. 200 5,175
Battle Mountain Gold Co. 1,200 11,700
Bausch & Lomb Inc. 200 7,400
Baxter International Inc. 1,100 49,775
Bay Networks, Inc. 700 21,525
Bay Saint Gas Co. (Rights Callable Through
11/30/99) 200 5,575
Bbn Corp. 300 7,613
Bearings Inc. (New) 150 4,256
Becton Dickinson & Co. 200 16,375
Belden Inc. 400 11,800
Bell & Howell Co. New 300 9,825
Bell Atlantic Corp. 1,700 104,975
Bell Bancorp, Inc. 100 3,688
BellSouth Corp. 3,900 144,300
Bemis Co, Inc. 100 3,138
Beneficial Corp. 200 11,525
Benton Oil & Gas Co. 300 4,706
Berkley (W.R.) Corp. 300 13,950
Best Buy Co., Inc. 800 13,900
Best Products Inc. (New) 300 731
Bethlehem Steel Corp. 300 3,938
Beverly Enterprises, Inc. 200 2,200
Bio Rad Laboratories Inc. Class A 100 4,200
Biocraft Laboratories Inc. 200 3,475
</TABLE>
F-103
See accompanying Notes to Financial Statements.
<PAGE> 172
SchwabFunds 16
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Biomet Inc. 300 $ 4,238
Birmingham Steel Corp. 400 5,900
Black & Decker Corp. 200 7,575
Black Box Corp. 200 3,450
Black Hills Corp. 200 4,850
Blair Corp. 100 2,525
Blanch E W Holdings Inc. 200 4,000
Block (H & R) Inc. 300 10,838
Block Drug Inc. Class A 309 12,669
Blount International Inc. Class A 300 9,225
Blyth Industries Inc. 400 13,300
Boatmens Bancshares Inc. 600 23,588
Bob Evans Farms, Inc. 800 12,950
Boeing Co. 1,300 112,613
Boise Cascade Corp. 100 4,200
Boise Cascade Office Products 700 45,763
Bok Financial Corp. (New) 300 6,338
Borg Warner Automotive Inc. 600 19,950
Borland International Inc. 400 7,175
Boston Scientific Corp. 637 29,302
Boston Technology Inc. (New) 300 3,994
Bowne & Co. Inc. 200 3,650
Boyd Gaming Corp. 1,000 11,125
Breed Technologies Inc. 700 13,038
Briggs & Stratton Corp. 100 4,313
Bristol Myers Squibb Co. 1,800 154,125
Brown Forman Corp. Class B 300 12,038
Brown Group Inc. 300 4,050
Brown Tom Inc. (New) 300 4,200
Browning Ferris Industries Inc. 800 25,200
Brunswick Corp. 200 4,600
Brush Wellman Inc. 200 3,575
Buffets Inc. 400 5,650
Burlington Coat Factory Warehouse 500 5,875
Burlington Industries Inc. 1,100 13,888
Burlington Northern Santa Fe 500 41,063
Burlington Resources Inc. 400 14,850
Burr Brown 200 3,075
Bush Boake Allen Inc. 300 7,800
Business Records Corp. 100 3,725
C-Cube Microsystems, Inc. 600 31,200
</TABLE>
F-104
See accompanying Notes to Financial Statements.
<PAGE> 173
SchwabFunds 17
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
C-TEC Corp. 400 $14,925
CCB Financial Corp. 500 25,313
CDI Corp. 500 13,375
CDW Computer Ctrs Inc. 200 10,075
CMAC Investment Corp. 200 11,300
CML Group, Inc. 600 1,875
CNB Bancshares Inc. 200 5,775
CPC International Inc. 500 34,688
CSX Corp. 700 31,938
CUC International Inc. 500 14,625
Cable Design Technologies Corp. 300 10,913
Cabletron Systems Inc. 200 13,250
Cablevision Systems Corp. Class A 200 11,500
Cabot Oil & Gas Corp. Class A 300 4,275
Cal Federal Bancorp Inc. 1,600 28,600
Calgon Carbon Corp. 500 6,063
Caliber Systems Inc. 100 4,288
California Microwave 200 3,725
Calmat Co. 300 5,475
Cambrex Corp. 100 4,613
Cambridge Technology Partners 200 11,425
Camco International Inc. 600 18,900
Campbell Soup Co. 1,100 66,963
Canandaigua Wine Co., Inc. Class A 300 11,550
Capital Re Corp. 200 7,200
Capitol American Financial Corp. 200 4,975
Caraustar Industries Inc. 600 14,775
Carlisle Cos. Inc. 500 21,688
Carmike Cinemas Inc. 100 2,275
Carolina Power & Light Co. 700 26,075
Carpenter Technology Corp. 500 19,250
Carson Pirie Scott & Co. 200 4,500
Carter Wallace Inc. 600 9,825
Case Corp. 300 15,263
Caseys General Stores Inc. 400 9,400
Casino America Inc. 100 678
Castech Aluminum Group Inc. 100 1,438
Catalina Marketing Corp. 200 15,625
Catellus Development Corp. 900 6,975
Caterpillar Inc. 900 61,200
Cato Corp. (New) 300 3,000
</TABLE>
F-105
See accompanying Notes to Financial Statements.
<PAGE> 174
SchwabFunds 18
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Cellstar Corp. 300 $ 4,575
Cellular Technical Services Inc. 100 2,819
Centex Construction Prods Inc. 300 4,088
Centex Corp. 100 3,100
Central & South West Corp. 800 22,800
Central Hudson Gas & Electric 500 15,125
Central Louisiana Electric Co. (New) 600 16,125
Central ME Power Co. 700 10,150
Central Newspapers Inc. Class A 600 21,375
Centura Banks Inc. 600 22,050
Century Communications Corp. 1,300 12,675
Cephalon Inc. 600 15,525
Ceridian Corp. 214 9,202
Cerner Corp. 500 11,500
Champion Enterprises Inc. 200 5,725
Champion International Corp. 300 13,575
Chaparral Steel Co. 600 8,925
Charming Shoppes Inc. 1,500 7,734
Charter One Financial Inc. 900 30,488
Chase Manhattan Corp. 800 58,800
Checkfree Corp. 600 10,425
Checkpoint System Inc. 400 9,950
Chemed Corp. 200 7,425
Chemical Banking Corp. 1,100 77,550
Chemical Financial Corp. 400 16,350
Chesapeake Corp. 600 18,150
Chesapeake Energy Corp. 300 13,875
Chevron Corp. 2,500 140,313
Cheyenne Software Inc. 800 12,600
Chiquita Brands International Inc. 1,000 15,500
Chrysler Corp. 1,500 93,375
Chubb Corp. 300 28,163
Church & Dwight Inc. 300 6,263
Cidco Inc. 200 6,450
Cigna Corp. 200 22,850
Cilcorp Inc. 200 8,600
Cincinnati Milacron Inc. 100 2,625
Cinergy Corp. 400 12,000
Circle K Corp. Delaware 400 12,250
Circuit City Stores Inc. 400 11,950
Cisco Systems Inc. 2,000 92,875
</TABLE>
F-106
See accompanying Notes to Financial Statements.
<PAGE> 175
SchwabFunds 19
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Citicasters Inc. 300 $ 8,813
Citicorp 1,700 136,000
Citizens Bancorp Maryland 200 6,075
Citizens Banking Corp. 200 6,200
Citizens Corp. 800 15,600
City National Corp. 600 8,175
Claire S Stores Inc. 450 8,156
Clarcor Inc. 200 4,350
Cleveland Cliffs Inc. 200 8,850
Clorox Co. 200 17,225
Coast Savings Financial Inc. 300 9,375
Coastal Corp. 300 11,850
Coastal Physician Group Inc. 300 2,663
Coca-Cola Bottling Co. 100 3,413
Coca-Cola Co. 4,700 388,338
Coeur D Alene Mines Corp. 500 10,188
Coherent Inc. 200 8,488
Cole Taylor Financial Group Inc. 200 5,825
Colgate-Palmolive Co. 500 38,938
Collective Bancorp Inc. 300 7,613
Collins & Aikman Corp. 1,400 8,750
Colonial BancGroup Inc. 200 7,275
Colonial Data Technologies 300 6,638
Coltec Industries Inc. 1,000 12,125
Columbia Gas System, Inc. 100 4,588
Columbia/HCA Healthcare Corp. 1,800 103,950
Comair Holdings Inc. 700 24,194
Comcast Corp. Class A 700 12,381
Comerica Inc. 600 25,050
Commerce Group Inc. 800 15,800
Commercial Federal Corp. 200 7,775
Commercial Intertech Corp. 200 3,775
Commercial Metals Co. 200 5,750
Commonwealth Energy System 200 9,350
Community Health System Inc. 300 12,300
Community Psychiatric Centers 700 5,863
Comnet Cellular Inc. 200 5,550
CompUSA Inc. 300 16,613
Compaq Computer Corp. 1,100 42,488
Compdent Corp. 200 7,125
Computer Assoc International Inc. 800 57,300
</TABLE>
F-107
See accompanying Notes to Financial Statements.
<PAGE> 176
SchwabFunds 20
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Computer Horizons Corp. 300 $11,438
Computer Network Technology 200 1,100
Computer Sciences Corp. 200 14,075
Computervision Corp. (New) 900 9,338
Compuware Corp. 600 13,950
Comverse Technology Inc. (New) 300 7,275
ConAgra, Inc. 1,000 40,625
Cone Mills Corp. 300 3,488
Conrail Inc. 300 21,488
Consolidated Edison Co. 700 22,313
Consolidated Freightways Inc. 100 2,563
Consolidated Natural Gas Co. 300 13,050
Continental Airlines Inc. Class B 700 39,463
Continuum Inc. 300 12,488
Cooper Industries Inc. 300 11,700
Cooper Tire & Rubber 200 5,150
Coors Adolph Co. Class B 900 16,200
Copart Inc. 200 4,950
Copley Pharmaceutical Inc. 200 3,375
Coram Healthcare Corp. 500 2,813
Corestates Financial Corp. 400 16,950
Corning Inc. 700 24,500
Corporate Express, Inc. 240 7,905
Corrections Corp. of America 700 39,900
Coventry Corp. 700 11,900
Crane Co. 100 4,038
Crawford & Co. Class A 200 3,050
Crawford & Co. Class B 500 7,875
Cray Research Inc. 700 20,388
Credence Systems Corp. 300 5,063
Crestar Financial Corp. 64 3,680
Crompton & Knowles Corp. 900 13,163
Cross (A.T.) Co. Class A 200 3,150
Cross Timbers Oil Co. 200 3,450
Crown Cork & Seal Inc. 500 24,375
Cullen Frost Bankers Inc. 200 9,900
Cummins Engine Inc. 100 4,038
Curtiss Wright Corp. 100 5,200
Cygnus Inc. 300 6,225
Cyprus Amax Minerals Co. 200 5,650
Cyrix Corp. 300 7,144
</TABLE>
F-108
See accompanying Notes to Financial Statements.
<PAGE> 177
SchwabFunds 21
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Cytec Industries Inc. 300 $ 25,350
DSC Communications Corp. 300 8,081
DTE Energy Co. 400 13,450
Daig Corp. 200 4,850
Dallas Semiconductor Corp. 400 7,350
Dames & Moore Inc. 300 3,338
Dana Corp. 400 13,350
Darden Restaurants Inc. 400 5,400
Data Broadcasting 600 6,413
Data General Corp. 600 8,775
Datascope Corp. 200 4,625
Davidson & Associates, Inc. 500 11,719
Dayton Hudson Corp. 200 16,975
Dean Witter Discover & Co. 600 34,350
Deere & Co. 900 37,575
Delta & Pine Land Co. 533 29,648
Delta Airlines Inc. 200 15,375
Deluxe Corp. 200 6,275
Department 56 Inc. 300 6,563
Destec Energy, Inc. 1,100 13,613
Detroit Diesel Corp. 600 12,225
Devon Energy Corp. 300 7,050
Devry Inc. 500 17,000
Dexter Corp. 600 15,900
Diagnostic Products Corp. 200 8,075
Dial Corp. 200 5,600
Dialogic Corp. 200 8,500
Diamond Multimedia System Inc. 700 11,113
Diamond Shamrock Inc. 700 22,750
Digi International Inc. 200 5,475
Digital Equipment Corp. 500 27,563
Dillard Department Stores Inc. Class A 300 10,388
Dimon Inc. 500 8,813
Dionex Corp. 200 7,125
Discount Auto Parts Inc. 500 13,938
Disney (Walt) Co. 2,439 155,791
Dollar Tree Stores Inc. 500 22,188
Dominion Resources Inc. 700 27,738
Donaldson Inc. 400 11,000
Donnelley (R.R.) & Sons Co. 500 17,250
Doubletree Corp. 300 8,119
</TABLE>
F-109
See accompanying Notes to Financial Statements.
<PAGE> 178
SchwabFunds 22
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Dover Corp. 300 $ 13,725
Dow Chemical Co. 900 78,188
Dow Jones & Co. Inc. 400 15,400
Downey Financial Corp. 210 4,935
Dresser Industries Inc. 500 15,250
Dreyers Grand Ice Cream Inc. 200 6,775
Dsp Communications Inc. 400 10,100
Du Pont (E.I.) de Nemours & Co. 1,900 157,700
Duke Power Co. 900 45,450
Dun & Bradstreet Corp. 800 48,500
Duriron Inc. 600 16,425
Duty Free International Inc. 600 7,950
Dynatech Corp. Rights Callable Through 2/16/99 200 4,650
EG&G, Inc. 100 2,238
EMC Corp. 800 17,500
ENSERCH Corp. 100 1,625
Earthgrains Co. 44 1,315
Eastern Enterprises 400 14,200
Eastern Utilities Assoc. 300 6,450
Eastman Chemical Co. 300 20,738
Eastman Kodak Co. 1,400 99,400
Eaton Corp. 200 12,050
Eaton Vance Corp. (Non Voting) 100 3,225
Echlin Inc. 200 7,250
Echo Bay Mines Ltd 300 4,050
Echostar Communications Corp. Class A 200 6,825
Ecolab Inc. 300 9,000
Edison International 1,900 32,538
Electro Scientific Industries Inc. 100 1,819
Electroglas Inc. 400 6,075
Eli Lilly & Co. 2,000 130,000
Emerson Electric Co. 700 56,525
Empire District Electric Co. 200 3,650
Energen Corp. 100 2,188
Energy Ventures, Inc. 300 7,988
Engelhard Corp. 400 9,350
Enhance Financial Services Group Inc. 500 13,813
Enron Corp. 800 29,500
Entergy Corp. 700 19,600
Enzo Biochem Inc. 300 5,100
Epic Design Technology Inc. 200 6,200
</TABLE>
F-110
See accompanying Notes to Financial Statements.
<PAGE> 179
SchwabFunds 23
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Ethan Allen Interiors Inc. 200 $ 5,250
Evergreen Media 300 10,763
Exabyte Corp. 200 3,263
Executive Risk Inc. 200 6,400
Expeditores International Washington Inc. 200 5,300
Express Scripts Inc. Class A 500 23,000
Exxon Corp. 4,600 375,475
F & M National Corp. 200 3,475
FMC Corp. (New) 100 7,513
FMC Gold Co. 900 5,850
FORE Systems, Inc. 200 14,288
FPL Group, Inc. 600 27,150
FTP Software Inc. 400 4,950
Fair Issac & Co. Inc. 200 6,125
Falcon Drilling Inc. 500 11,250
Family Dollar Stores, Inc. 1,000 14,750
Farmer Brothers Co. 100 13,550
Federal Express Corp. 200 13,975
Federal Home Loan Mortgage Corp. 600 51,150
Federal Mogul Corp. 800 14,900
Federal National Mortgage Assoc. 4,000 127,500
Federated Department Stores Inc. 600 19,350
Ferro Corp. 700 19,863
Fifth Third Bancorp 400 23,175
Filenet Corp. 200 11,575
Financial Security Assured Holdings Ltd. 400 10,150
Fingerhut Companies, Inc. 600 7,725
First American Financial Corp. 200 5,750
First Bank System Inc. 664 39,591
First Chicago NBD Corp. 1,343 55,735
First Citizens Bancshares Inc. 200 11,900
First Commerce Bancshares Inc. 200 4,550
First Commercial Corp. 642 20,223
First Commonwealth Financial Corp. 300 5,813
First Data Corp. 1,000 70,500
First Financial Bancorp 200 6,900
First Financial Corp. 700 14,831
First Interstate Bancorp 300 52,050
First Michigan Bank Corp. 300 9,000
First Midwest Bancorp Inc. 200 5,700
First Mississippi Corp. 300 7,163
</TABLE>
F-111
See accompanying Notes to Financial Statements.
<PAGE> 180
SchwabFunds 24
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
First Union Corp. 1,005 $ 60,803
Firstbank Illinois Co. 100 3,113
Firstmiss Gold Inc. 500 13,688
Fisher Scientific International, Inc. 500 19,125
Fleet Financial Group Inc. 1,156 46,818
Fleetwood Enterprises, Inc. 100 2,475
Fleming Companies, Inc. 2,000 28,500
Florida East Coast Industry Inc. 200 17,475
Florida Rock Industries, Inc. 100 2,600
Flowers Industries, Inc. 800 10,800
Fluke Corp. 100 3,813
Fluor Corp. 300 20,475
Ford Motor Co. 4,100 140,938
Foremost Corp. of America 200 10,800
Forest City Enterprises, Inc. Class A 100 3,675
Fort Wayne National Corp. 200 6,050
Foster Wheeler Corp. 100 4,438
Foxmeyer Health Corp. 200 3,600
Franklin Quest Co. 300 8,100
Freeport McMoran Copper & Gold Class B 600 18,975
Fremont General Corp. 750 17,719
Fresenius U.S.A. Inc. 300 6,113
Frontier Insurance Group, Inc. 200 6,125
Fruit of the Loom Inc. Class A 200 5,175
Fuller (H.B.) Co. 200 6,000
Fulton Financial Corp. 400 8,700
Fund American Enterprises Holdings, Inc. 400 30,800
Furniture Brands International Inc. 1,600 14,800
G&K Services, Inc. Class A 300 7,950
GC Companies Inc. 100 3,800
GRC International, Inc. 200 6,800
GTE Corp. 3,500 153,563
Gannett Inc. 700 47,075
Gap Inc. 500 27,688
Gaylord Container Corp. Class A 700 6,431
Gencorp Inc. 400 5,000
General Binding Corp. 200 4,363
General Datacom Industries Inc. 300 3,188
General Dynamics Corp. 200 11,700
General Electric Co. 6,200 482,825
General Instrument Corp. 500 13,688
</TABLE>
F-112
See accompanying Notes to Financial Statements.
<PAGE> 181
SchwabFunds 25
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
General Magic Inc. 300 $ 1,725
General Mills Inc. 500 29,188
General Motors Corp. 2,700 143,775
General Public Utilities Corp. 300 9,900
General Re Corp. 300 43,725
General Signal Corp. 100 3,625
Genesis Health Ventures, Inc. 500 20,188
Gentex Corp. 200 5,900
Genuine Parts Co. 400 18,000
Geon Co. 600 15,975
Georgia Pacific Corp. 300 20,813
Geotek Communications Inc. 600 6,113
Gerber Scientific Inc. 300 4,500
Giant Food Inc. Class A 100 3,300
Giddings & Lewis Inc. 800 15,250
Gilead Sciences Inc. 600 17,175
Gillette Co. 1,800 93,150
Glatfelter (P.H.) Co. 600 10,425
Glendale Federal Bank 800 14,500
Global Industrial Technologies Inc. 300 7,200
Global Natural Resources Inc. 300 3,975
Global Village Communications 200 3,000
Golden West Financial Corp. 200 10,725
Goodyear Tire and Rubber 500 25,500
Goulds Pumps Inc. 300 6,581
Grace (W.R.) & Co. 300 23,475
Graco Inc. 300 5,850
Grainger (W.W.), Inc. 200 13,425
GranCare, Inc. 400 7,200
Granite Construction Inc. 200 5,913
Great Atlantic & Pacific Tea Co., Inc. 100 3,100
Great Financial Corp. 200 4,925
Great Lakes Chemical Corp. 200 13,475
Great Western Financial Corp. 400 9,650
Green Tree Financial Corp. 500 17,188
Greenfield Industries Inc. 500 17,219
Greif Brothers Corp. Class A 600 17,400
Griffon Corp. 400 3,750
Guilford Mills, Inc. 200 4,900
Gulf South Medical Supply Inc. 200 7,600
Gymboree Corp. 600 15,638
</TABLE>
F-113
See accompanying Notes to Financial Statements.
<PAGE> 182
SchwabFunds 26
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
HCC Insurance Holdings, Inc. 200 $ 10,975
HCIA Inc. 400 18,500
Hadco Corp. 100 3,063
Haemonetics Corp. 400 6,600
Halliburton Co. 300 17,063
Hancock Holding Co. 100 3,613
Harcourt General Inc. 200 9,075
Harland John H Co. 800 17,600
Harleysville Group Inc. 200 5,450
Harman International Industries Inc. (New) 500 18,750
Harnischfeger Industries Corp. 100 3,875
Harper Group, Inc. 200 3,675
Harrahs Entertainment Inc. 200 5,875
Harris Corp. 100 6,188
Harte Hanks Communications (New) 450 9,563
Hasbro Inc. 200 7,400
Hayes Wheels International Inc. 500 15,125
Health Management Systems, Inc. 300 8,475
Healthplan Services Corp. 200 4,575
Healthsouth Rehabilitation Corp. 938 31,892
Heartland Express, Inc. 307 7,713
Heartland Wireless Communications, Inc. 200 5,100
Hecla Mining Co. 600 4,575
Heinz H J Co. 1,400 46,375
Helix Technology Corp. 100 2,825
Helmerich and Payne Inc. 700 23,625
Herbalife International Inc. 300 3,338
Hercules Inc. 600 37,200
Heritage Media Corp. Class A (New) 500 17,938
Hershey Foods Corp. 300 22,350
Hewlett Packard Co. 1,900 178,600
Highlands Insurance Group Inc. 30 593
Hilton Hotels Corp. 200 18,800
Hnc Software Inc. 100 6,825
Hollywood Entertainment Corp. 500 6,656
Home Beneficial Corp. Class B 500 12,813
Home Depot Inc. 1,700 81,388
Home Financial Corp. 300 4,463
Home Shopping Network, Inc. 1,400 14,175
Homestake Mining Co. 300 5,813
Hon Industries Inc. 500 11,250
</TABLE>
F-114
See accompanying Notes to Financial Statements.
<PAGE> 183
SchwabFunds 27
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Honeywell Inc. 400 $22,100
Horace Mann Educators Corp. (New) 600 18,300
Horizon Cms Healthcare Corp. 1,000 14,000
Houghton Mifflin Co. 200 8,825
Household International Inc. 300 20,175
Houston Industries Inc. 800 17,300
Hudson Foods Inc. Class A 400 5,700
Human Genome Sciences Inc. 500 19,063
Humana Inc. 700 17,588
Hunt (J.B.) Transport Services Inc. 500 9,938
Hunt Manufacturing Co. 200 3,050
Hyperion Software Corp. 200 4,300
ICN Pharmaceuticals, Inc. 404 8,939
IDEX Corp. 300 11,663
IES Industries Inc. 700 19,513
IHOP Corp. (New) 100 2,513
INSO Corp. 200 9,250
INTERSOLV Inc. 200 2,300
ITT Corp. (New) 400 24,000
ITT Educational Services Inc. 200 6,725
ITT Hartford Group Inc. 400 19,600
ITT Industries Inc. 400 10,200
Ideon Group Inc. 300 3,338
Illinois Tool Works Inc. 400 25,850
Immulogic Pharmaceutical Corp. 400 5,275
Immunex Corp. (New) 800 12,750
Imperial Bancorp 216 5,157
In Focus Systems, Inc. 200 7,025
Inco Ltd. 300 9,488
Indiana Energy Inc. 600 14,400
Information Resources, Inc. 300 4,313
Ingersoll Rand Co. 300 12,225
Inland Steel Industries, Inc. 100 2,475
Inphynet Medical Management Inc. 200 3,575
Input/Output Inc. 1,200 37,200
Insignia Financial Group Class A (New) 800 19,500
Insilco Corp. 100 3,506
Integon Corp. 200 4,075
Integrated Health Services Inc. 300 7,013
Integrated Process Equipment Corpcom 300 5,344
Integrated Systems Inc. 200 9,750
</TABLE>
F-115
See accompanying Notes to Financial Statements.
<PAGE> 184
SchwabFunds 28
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Intel Corp. 3,200 $181,800
Inter-Regional Financial Group, Inc. 150 3,356
InterVoice, Inc. 200 5,750
Interdigital Commerce Corp. 500 4,406
Interface Inc. Class A 200 2,438
Intergraph Corp. 1,000 16,125
Interim Services Inc. 200 7,600
Intermet Corp. 300 3,900
International Business Machines 2,100 233,363
International Cabletel Inc. 700 21,000
International Dairy Queen Inc. Class A 300 6,563
International Family Entertainment 875 14,766
International Flavurs & Fragrances Inc. 400 19,150
International Multifoods Corp. 200 3,825
International Paper Co. 1,100 43,313
Interneuron Pharmaceuticals 700 25,988
Interpool Inc. 200 3,500
Interpublic Group of Companies, Inc. 200 9,450
Interstate Bakeries Corp. (New) 800 19,600
Interstate Power Co. 100 3,188
Invacare Corp. 700 19,600
Iomega Corp. 900 23,119
Ionics Inc. 200 8,350
Isis Pharmaceuticals 300 3,450
Isolyser Inc. 300 4,950
Itron, Inc. 200 8,975
J & L Specialty Steel Inc. 800 13,700
JSB Financial, Inc. 200 6,763
Jacobs Engineering Group Inc. 600 16,950
Jacor Communications Inc. 200 3,925
James River Corp. 200 5,150
Jefferson Bankshares, Inc. 200 4,338
Jefferson-Pilot Corp. 300 16,163
Jlg Industries Inc. 300 13,650
John Alden Financial Corp. 600 10,575
John Wiley & Sons, Inc. Class A 500 16,688
Johnson & Johnson 2,500 230,625
Johnson Controls, Inc. 100 7,463
Jostens, Inc. 100 2,238
Juno Lighting Inc. 200 2,763
Just for Feet Inc. 500 20,813
</TABLE>
F-116
See accompanying Notes to Financial Statements.
<PAGE> 185
SchwabFunds 29
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Justin Industries Inc. 300 $ 3,431
K Mart Corp. 1,300 12,188
K N Energy Inc. 700 21,788
KCS Energy, Inc. 100 1,550
Kansas City Life Insurance Co. 100 5,425
Kaufman & Broad Home Corp. 500 8,000
Kaydon Corp. 500 17,500
Keane, Inc. 200 5,975
Kellogg Co. 700 53,025
Kellwood Co. 300 4,650
Kennametal Inc. 400 14,450
Kent Electrs Corp. 400 14,150
Kerr-McGee Corp. 200 12,700
Keycorp (New) 900 34,763
Keystone Financial Inc. 600 19,500
Keystone International Inc. 800 18,000
Kimball International Inc. Class B 300 8,625
Kimberly Clark Corp. 1,190 88,655
Kinder Care Learning Centers Inc. 200 2,525
Kinetic Concepts Inc. 600 8,100
King World Productions, Inc. 100 4,138
Kirby Corp. 400 6,850
Knight-Ridder, Inc. 200 13,625
Kroger Co. 500 20,250
Kulicke & Soffa Industries Inc. 300 4,800
LSI Logic Corp. 500 13,375
LTX Corp. 400 3,300
La-Z-Boy Chair Co. 300 9,338
Laclede Gas Co. 200 4,550
Laidlaw Inc. Class B (Non Voting) 800 8,500
Lance Inc. 400 6,200
Landmark Graphics Corp. 500 8,250
Landry's Seafood Restaurants, Inc. 200 3,725
Lands' End, Inc. 700 12,250
Landstar Systems, Inc. 200 4,975
Lattice Semiconductor Corp. 600 16,988
Lawson Products, Inc. 200 4,425
Lawter International Inc. 600 6,525
Leader Financial Corp. 200 8,738
Legg Mason, Inc. 200 5,825
Lennar Corp. 800 19,900
</TABLE>
F-117
See accompanying Notes to Financial Statements.
<PAGE> 186
SchwabFunds 30
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
UNITED STATES (Continued)
<S> <C> <C>
Libbey Inc. 200 $ 4,375
Liberty Bancorp, Inc. 100 3,688
Liberty Corp. 300 9,900
Life Partners Group Inc. 600 12,450
Life Re Corp. 200 5,400
Life Technologies, Inc. 200 5,675
Lilly Industrial Inc. Class A 300 4,088
Limited Inc. 544 10,336
Lincare Holdings Inc. 400 12,950
Lincoln Electric Co. 100 2,675
Lincoln Electric Co. 400 10,800
Lincoln National Corp. Inc. 300 15,225
Lincoln Telecommunications 800 15,400
Liposome Inc. 700 14,656
Littlefuse, Inc. 400 15,150
Living Centers of America 300 11,175
Liz Claiborne 200 6,850
Lockheed Martin Corp. 900 68,288
Loews Corp. 400 30,250
Logicon, Inc. 200 6,375
Lone Star Industries, Inc. 200 6,000
Long Islands Bancorp Inc. 400 11,275
Longs Drug Stores Corp. 100 4,725
Longview Fibre Co. 700 11,813
Loral Corp. 600 29,400
Louis Dreyfus Nat Gas Corp. 300 3,263
Louisiana Land & Exploration Co. 100 4,663
Louisiana Pacific Corp. 300 7,313
Lowes Cos Inc. 500 17,875
Luby's Cafeterias, Inc. 700 16,188
Lukens Inc. 200 4,975
Lydall Inc. 200 5,000
M.S. Carriers, Inc. 200 3,750
MAIC Holdings Inc. 106 3,511
MAXXAM Inc. 100 4,888
MBNA Corp. 800 23,700
MCI Communications Corp. 2,700 81,844
MDU Resources Group, Inc. 400 9,200
MICROS Systems, Inc. 100 2,500
Mac Frugals Bargains Close Out 300 4,200
Macromedia Inc. 800 34,300
</TABLE>
F-118
See accompanying Notes to Financial Statements.
<PAGE> 187
SchwabFunds 31
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Madison Gas and Electric Co. 300 $ 7,613
Mafco Consolidated Group Inc. 300 4,650
Magellan Health Services Inc. 700 15,750
Magna Group Inc. 400 9,175
Magnetek Inc. 300 2,363
Mallinckrodt Group Inc. 200 7,525
Manor Care, Inc. 200 7,850
Marcus Corp. 300 7,913
Mariner Health Group Inc. 200 3,275
Mark Twain Bancshares Inc. 500 18,625
Markel Corp. 100 8,575
Marquette Electrs Inc. Class A 600 11,625
Marriot International Inc. 400 19,000
Marsh & McLennan Companies 300 27,863
Marshall Industries 300 9,150
Masco Corp. 500 14,500
Mascotech Inc. 1,000 13,375
Mattel Inc. 1,125 30,516
Maxicare Health Plans Inc. (New) 500 12,500
May Department Stores Co. 900 43,425
Maytag Corp. 300 6,075
McAfee Associates, Inc. 300 16,500
McClatchy Newspapers Inc. Class A 700 16,713
McDermott International Inc. 100 1,925
McDonald's Corp. 2,500 120,000
McDonnell Douglas Corp. 400 36,650
McGraw-Hill, Inc. 200 17,350
Mead Corp. 200 10,800
Measurex Corp. 200 5,800
Media General,Inc. Class A 400 15,500
Medic Computer Systems, Inc. 200 15,188
Medisense Inc. 500 22,313
Medpartners/ Mullikin Inc. 500 14,250
Medtronic Inc. 1,000 59,625
Medusa Corp. 200 6,125
Mellon Bank Corp. 500 27,563
Melville Corp. 300 10,763
Men's Wearhouse, Inc. 200 6,250
Mentor Corp. Minnesota 600 13,913
Mercantile Bancorp Inc. 117 5,353
Mercantile Stores Co., Inc. 100 6,138
</TABLE>
F-119
See accompanying Notes to Financial Statements.
<PAGE> 188
SchwabFunds 32
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Merck & Co. Inc. 4,400 $273,900
Mercury Interactive Corp. 200 3,125
Meredith Corp. 100 4,125
Merrill Lynch & Co. Inc. 600 36,450
Mesa Airlines Inc. 400 4,350
Methode Electrs Inc. Class A 500 8,000
Metromedia Inter. Grp., Inc. 700 9,450
Meyer (Fred) Inc. 400 11,200
Michaels Stores Inc. 300 4,238
Microcom Inc. 300 9,000
Micron Technology Inc. 900 28,238
Microsoft Corp. 2,000 206,125
Mid Am Inc. 200 3,675
Mikasa Inc. Class B 300 3,563
Miller Herman Inc. 400 12,425
Millipore Corp. 100 3,825
Mine Safety Appliances Co. 100 4,763
Minerals Technologies Inc. 500 17,313
Minnesota Mining & Manufacturing Co. 1,600 103,800
Mississippi Chemical Corp. (New) 600 12,075
Mobil Corp. 1,500 173,813
Mobilemedia Corp. 400 8,225
Modine Manufacturing Co. 400 10,500
Mohawk Industries Inc. 700 10,413
Molten Metal Technology, Inc. 600 20,025
Money Store Inc. 1,050 29,138
Monsanto Co. 400 61,400
Moore Corp. Ltd 200 3,900
Morgan (J.P.) & Co. Inc. 600 49,800
Morgan Stanley Group Inc. 600 31,050
Morrison Fresh Cooking Inc. 150 1,181
Morrison Health Care Inc. 200 3,350
Morton International Inc. 500 19,188
Motorola Inc. 2,300 121,900
Movie Gallery Inc. 200 5,125
Mueller Industries Inc. 500 17,688
Multicare Cos Inc. 500 14,188
Mycogen Corp. 400 6,825
Myers Industry Inc. 200 3,375
NAC Re Corp. 300 9,788
NACCO Industries, Inc. Class A 300 17,063
</TABLE>
F-120
See accompanying Notes to Financial Statements.
<PAGE> 189
SchwabFunds 33
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
NCH Corp. 400 $22,650
NICOR Inc. 100 2,675
NIKE, Inc. Class B 700 56,875
Nabors Industries Inc. 1,400 19,950
Nalco Chemical Co. 300 9,225
National Auto Credit Inc. 300 4,538
National Bancorp of Alaska, Inc. 400 24,700
National City Corp. 400 14,050
National Commerce Bancorp 600 18,750
National Computer Systems, Inc. 200 4,050
National Data Corp. 300 10,238
National Education Corp. 600 7,050
National Instrs Corp. 300 6,413
National Presto Industries, Inc. 100 4,000
National Re Corp. 500 16,875
National Semiconductor Corp. 300 4,163
National Service Industries, Inc. 100 3,625
National Steel Corp. Class B 600 8,400
NationsBank Corp. 1,200 96,150
Natures Sunshine Prods Inc. 300 7,688
Nautica Enterprises Inc. 300 14,288
Navistar International Corp. 4,300 44,613
Nellcor Puritan Bennett Inc. 700 45,063
Netcom Online Communications 200 4,850
Network Equipment Technologies 300 9,113
Network General Corp. 600 23,850
Neurogen Corp. 200 6,900
New England Business Service, Inc. 200 3,350
New Jersey Resources Corp. 500 14,438
New World Communications 400 7,825
New York Times Co. Class A 400 11,600
Newell Co. 400 10,700
Newfield Exploration Co. 500 15,250
Newmont Mining Corp. 300 16,988
Nexstar Pharmaceuticals Inc. 400 7,950
Nextel Communications Inc. 214 4,026
Niagara Mohawk Power Corp. 400 2,650
Nl Industries Inc. (New) 1,000 13,250
Noble Drilling Corp. 1,500 18,563
NorAm Energy Co. 300 2,775
Nordstrom Inc. 200 9,688
</TABLE>
F-121
See accompanying Notes to Financial Statements.
<PAGE> 190
SchwabFunds 34
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Norfolk Southn Corp. 400 $34,000
Norrell Corp. Georgia 200 6,625
North American Mortgage Co. 200 4,100
North American Vaccine Inc. 500 6,875
North Fork Bancorporation 600 14,325
Northern States Power Co. 200 9,750
Northern Telecom Ltd 1,100 52,525
Northrop Grumman Corp. 200 12,725
Northwest Natural Gas Co. 200 6,400
Norwest Corp. 1,400 51,450
Novacare Inc. 800 5,600
Novell Inc. 1,100 14,781
Nu Kote Holding Inc. Class A 300 5,363
Nucor Corp. 300 17,738
Nynex Corp. 1,600 79,800
O'Reilly Automotive, Inc. 100 3,513
OEA, Inc. 300 10,950
OM Group Inc. 200 7,388
ONBANCorp, Inc. 200 6,963
Oak Industries Inc. 200 4,975
Oak Technology 600 12,675
Oakwood Homes Corp. 600 29,775
Occidental Petroleum Corp. 1,200 32,100
Occusystems Inc. 300 6,750
Octel Communications Corp. 600 28,950
Offshore Logistics, Inc. 200 2,663
Ogden Corp. 100 1,950
Ohio Edison Co. 400 9,050
Ois Optical Imaging Sys Inc. 1,700 6,800
Old National Bancorp 315 10,513
Olympic Financial Ltd. 300 5,813
Omnicare Inc. 400 21,550
One Valley Bancorp West Virginia Inc. 500 15,750
Oneok Inc. 500 11,938
Optical Data Systems, Inc. 200 4,150
Oracle Systems Corp. 1,600 75,200
Orange & Rockland Utilities, Inc. 200 7,175
Orbital Sciences Corp. Class A 300 4,013
Oregon Steel Mills Inc. 200 2,825
Orion Capital Corp. 200 9,050
Orthodontic Ctrs America Inc. 400 12,100
</TABLE>
F-122
See accompanying Notes to Financial Statements.
<PAGE> 191
SchwabFunds 35
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Oryx Energy Co. 200 $ 2,775
Otter Tail Power Co. 200 7,675
Outboard Marine Corp. 400 7,650
Overseas Shipholding Group 800 14,600
Owen Healthcare Inc. 300 7,050
Owens & Minor Inc. (New) 400 4,800
Owens Corning 100 4,013
P P & L Resources Inc. 500 12,188
PACCAR Inc. 100 4,900
PAXAR Corp. 400 6,350
PDT Inc. 200 11,975
PHH Corp. 300 16,688
PLC Systems Inc. 300 8,513
PNC Bank Corp. 1,100 33,825
PPG Industries Inc. 700 34,213
Pacific Enterprises 200 5,175
Pacific Gas & Electric Co. 1,700 38,463
Pacific Telesis Group 1,500 41,438
Pacificorp 1,100 22,963
Pairgain Technologies Inc. 500 32,344
Pall Corp. 300 7,688
Panhandle Eastern Corp. 400 12,450
Papa John's International, Inc. 300 13,406
Park Electrochemical Corp. 200 5,950
Park National Corp. 100 4,838
Parker & Parsley Petroleum Co. 800 18,400
Parker Drilling Co. 700 4,900
Parker Hannifin Corp. 200 7,500
Patterson Dental Co. 500 15,250
Paxson Communications Corp. 300 4,688
Peco Energy Co. 900 23,963
Penn Traffic Co. (New) 100 1,488
Penncorp Financial Group Inc. 600 18,900
Penney (J.C.) Inc. 800 39,800
Pennzoil Co. 100 3,975
Peoples Bank 800 17,100
Peoples Energy Corp. 100 3,238
Peoples Heritage Financial Group 200 4,350
Pep Boys - Manny, Moe & Jack 100 3,350
Pepsico Inc. 2,800 177,100
Perkin-Elmer Corp. 100 5,413
</TABLE>
F-123
See accompanying Notes to Financial Statements.
<PAGE> 192
SchwabFunds 36
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Petrolite Corp. 200 $ 5,900
Pfizer Inc. 2,300 154,100
Pharmacia & Upjohn Inc. 1,800 71,775
Phelps Dodge Corp. 200 13,725
Philip Morris Companies Inc. 3,100 272,025
Phillips Petroleum Co. 1,000 39,500
Phillips Van Heusen Corp. 300 3,525
Phoenix Resource Cos., Inc. 200 4,775
Photronic, Inc. 200 4,300
Physician Corp. of America 800 12,750
Physician Reliance Network 600 23,775
Physician Sales & Service Inc. 300 7,500
Physicians Computer Network I 800 11,000
Physicians Health Services, Inc. 100 3,113
Piedmont Natural Gas Inc. 700 15,575
Pier 1 Imports Inc. 500 6,313
Pioneer Group Inc. 600 17,250
Pioneer HI Bred International Inc. 300 15,788
Pioneer Standard Electrs Inc. 300 4,556
Pitney Bowes Inc. 500 24,500
Pittston Co. (Burlington Group) 50 981
Pittston Services Group 100 2,675
Pittway Corp. Class A 300 14,850
Placer Dome Inc. 700 20,213
Players International Inc. 400 3,825
Playtex Prods Inc. 600 4,350
Ply-Gem Industries, Inc. 300 4,388
Pogo Producing Co. 700 21,875
Polaris Industries Inc. 700 21,525
Polaroid Corp. 100 4,500
Potlatch Corp. 100 4,275
Praxair Inc. 400 15,950
Precision Castparts Corp. 600 24,000
Premark International, Inc. 200 10,725
Presidential Life Corp. 400 3,750
Presstek Inc. 500 54,219
Price Costco Inc. 500 9,406
Price Enterprises Inc. 300 4,763
Primadonna Resorts Inc. 400 6,225
Primark Corp. 600 22,200
Prime Hospitality Corp. 400 5,450
</TABLE>
F-124
See accompanying Notes to Financial Statements.
<PAGE> 193
SchwabFunds 37
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
UNITED STATES (Continued)
<S> <C> <C>
Procter & Gamble Co. 2,400 $203,400
Production Operators Corp. 100 3,125
Proffitt's, Inc. 400 12,700
Progress Software Corp. 200 3,000
Protein Design Labs, Inc. 300 7,388
Provident Bancorp Inc. 500 25,063
Providian Corp. 300 13,388
Psinet Inc. 700 6,781
Public Service Co. of New Mexico 900 16,763
Public Service Co. of North Carolina Inc. 200 3,200
Public Service Enterprise Group 900 24,750
Pulitzer Publishing Co. 500 26,000
Pulte Corp. 500 13,438
Pyxis Corp. 500 12,875
Quaker Oats Co. 400 13,350
Quaker Saint Corp. 400 5,600
Quality Food Centers, Inc. 200 4,825
Quanex Corp. 200 4,375
Quarterdeck Corp. 600 8,813
Quick & Reilly Group, Inc. 600 17,700
Quintiles Transnational Corp. 400 26,050
RCSB Financial Inc. 200 4,763
Ralcorp Holdings, Inc. 500 12,813
Ralston Purina Co. 400 26,750
Rational Software Corp. (New) 300 11,888
Raychem Corp. 100 6,450
Raymond James Financial Inc. 300 6,750
Raytheon Co. 1,000 51,250
Reading & Bates Corp. (New) 1,100 21,725
Reebok International Ltd. 200 5,525
Regal Beloit Corp. 300 6,300
Regal Cinemas, Inc. 300 11,138
Regions Financial Corp. 228 10,018
Reinsurance Group America Inc. 500 18,313
Reliance Group Holdings Inc. 1,800 14,175
Renaissance Commerce Corp. 700 17,413
Renal Treatment Centers Inc. 400 9,500
Republic Industries Inc. 1,100 34,444
Republic New York Corp. 200 11,900
Respironics Inc. 200 4,238
Rexall Sundown, Inc. 400 12,125
</TABLE>
F-125
See accompanying Notes to Financial Statements.
<PAGE> 194
SchwabFunds 38
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Rexel Inc. 300 $ 3,675
Reynolds Metals Co. 200 11,825
Richfood Holdings Inc. 700 19,688
Riggs National Corp. 400 4,925
Rio Hotel & Casino Inc. 200 3,050
Rite Aid Corp. 200 6,175
River Forest Bancorp, Inc. 200 5,850
RoTech Medical Corp. 200 7,425
Roadway Express Inc. 50 713
Robert Half International Inc. 700 34,038
Roberts Pharmaceutical Corp. 200 3,763
Rock Tennessee Co. Class A 400 6,800
Rockwell International Corp. 1,000 58,875
Rohm & Haas Co. 200 13,300
Rohr Industries Inc. 200 3,600
Rollins Truck Leasing Corp. 600 6,225
Rollins, Inc. 500 11,688
Roosevelt Financial Group Inc. 800 14,850
Roper Industries 500 22,750
Ross Stores Inc. 600 14,963
Rouge Steel Co. 200 4,425
Rowan Cos Inc. 1,900 24,225
Royal Dutch Petroleum Co. 2,000 282,090
Rubbermaid Inc. 400 11,350
Ruby Tuesday Inc. 300 6,900
Ruddick Corp. 600 7,350
Russ Berrie & Co. Inc. 300 5,100
Russell Corp. 100 2,675
Ryans Family Steak Houses 100 906
Ryder Sys Inc. 200 5,450
Rykoff-Sexton, Inc. 200 3,175
S & T Bancorp, Inc. 200 6,100
S3 Inc. 800 9,600
SEI Corp. 300 6,788
SPS Transaction Services, Inc. 400 12,350
SUPERVALU Inc. 300 9,263
Safeco Corp. 400 13,425
Safeguard Scientifics Inc. 500 29,313
Safety-Kleen Corp. 100 1,438
Saint Paul Bancorp Inc. 300 7,425
Salick Health Care, Inc. 200 7,675
</TABLE>
F-126
See accompanying Notes to Financial Statements.
<PAGE> 195
SchwabFunds 39
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Salomon Inc. 300 $ 11,250
Sanifill Inc. 300 11,513
Sanmina Corp. 200 5,900
Santa Fe Energy Resources, Inc. 200 2,100
Santa Fe Pacific Gold Corp. 300 4,800
Sara Lee Corp. 1,900 61,988
Savannah Foods & Industries Inc. 300 3,263
Savoy Pictures Entertainment, Inc. 300 1,725
Sbarro, Inc. 300 7,575
Sbc Communications Inc. 2,200 115,775
Schering Plough Corp. 1,500 87,188
Schlumberger Ltd 800 63,300
Schulman (A.), Inc. 500 10,656
Schweitzer Mauduit International Inc. 50 1,375
Scientific Games Holdings Corp. 200 5,450
Scientific-Atlanta, Inc. 200 3,550
Scotts Co. Class A 200 3,550
Seaboard Corp. 100 23,800
Seagate Technology, Inc. 442 24,200
Seagram Ltd 1,400 45,325
Seagull Energy Corp. 800 18,100
Sears Roebuck & Co. 1,400 68,250
Security Capital Corp. 200 11,625
Security Dynamics Tech 200 10,550
Seitel, Inc. 100 2,713
Selective Insurance Group, Inc. 200 7,150
Sepracor Inc. 300 4,425
Sequa Corp. Class A 100 3,413
Sequent Computer Systems, Inc. 400 4,700
Sequus Pharmaceuticals Inc. 500 6,906
Service Corp. International 400 19,500
Service Merchandise Co. Inc. 1,300 6,825
Shared Medical Systems Corp. 100 6,025
Sherwin Williams Co. 200 8,875
Shiva Corp. 200 18,200
Shoneys Inc. 600 5,400
Shopko Stores Inc. 400 5,600
Shorewood Packaging Corp. 200 3,063
Showboat, Inc. 200 4,900
Shurgard Storage Ctrs Inc. Class A 600 15,750
Sierra Health Services Inc. 500 16,313
</TABLE>
F-127
See accompanying Notes to Financial Statements.
<PAGE> 196
SchwabFunds 40
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Sierra On-Line Inc. 500 $16,781
Sierra Pacific Resources 700 17,588
Sigcorp Inc. 500 17,438
Sigma-Aldrich Corp. 100 5,725
Silicon Graphics Inc. 500 12,500
Silicon Valley Group Inc. 400 9,700
Siliconix Inc. 200 6,600
Sithe Energies Inc. 700 10,413
Smart & Final Inc. 300 7,425
Smith (A.O.) Corp. Class B 400 9,450
Smith International Inc. 800 20,200
Smith's Food & Drug Centers, Inc. Class B 400 9,600
Smithfield Foods Inc. 500 14,438
Smucker (J.M.) Co. Class A 700 15,575
Smucker (J.M.) Co. Class B 300 6,188
Snap-on Tools Corp. 100 4,675
Snyder Oil Corp. 400 3,350
Sofamor/danek Group Inc. 600 20,325
Softkey International Inc. 600 12,075
Sola International Inc. 400 12,450
Solvex Corp. 300 3,169
Somatogen Inc. 500 8,719
Sonat Inc. 200 7,200
Sotheby's Holdings, Inc. Class A 800 11,700
South Jersey Industries Inc. 100 2,138
Southdown Inc. 200 4,725
Southern Co. 2,800 66,850
Southwest Airlines Co. 400 11,850
Southwest Gas Corp. 300 5,175
Southwestern Energy Co. 300 3,600
Sovereign Bancorp Inc. 630 6,930
SpaceLabs Medical Inc. 100 2,363
Speedway Motorsports, Inc. 600 16,950
Spiegel, Inc. Class A 1,700 17,638
Sports Authority Inc. 300 8,213
Springs Industries Inc. 700 32,200
Sprint Corp. 1,400 53,200
St. John's Knits, Inc. 100 6,738
St. Jude Medical, Inc. 300 11,194
St. Paul Companies, Inc. 300 16,650
Standard Financial Inc. 200 2,925
</TABLE>
F-128
See accompanying Notes to Financial Statements.
<PAGE> 197
SchwabFunds 41
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Standard Prods Co. 200 $ 4,875
Standard Register 400 9,650
Standex International Corp. 200 6,025
Stanhome Inc. 300 9,563
Stanley Works 100 5,500
State Auto Financial Corp. 200 4,600
Station Casinos Inc. 700 8,225
Stein Mart Inc. 400 6,050
Steris Corp. 300 8,963
Sterling Chems Inc. 700 8,838
Stewart & Stevenson Services, Inc. 500 14,063
Stillwater Mining Co. 500 10,500
Stone & Webster, Inc. 200 6,575
Stone Container Corp. 200 2,800
Stratosphere Corp. 500 5,375
Stratus Computer Inc. 600 16,650
Stride Rite Corp. 700 6,388
Structural Dynamics Research Corp 700 23,538
Student Loan Corp. 300 11,588
Sturm, Ruger & Co., Inc. 200 7,700
Sumitomo Bank 200 5,150
Summit Bancorp 450 16,650
Summit Technology Inc. 450 10,716
Sun Healthcare Group Inc. 900 11,925
Sun Inc. 200 5,775
Sun Microsystems Inc. 600 26,288
Sunrise Medical Inc. 200 2,800
Sunshine Mining & Refining Co. 2,400 3,600
Suntrust Bks Inc. 400 28,000
Superior Industries International, Inc. 400 10,000
Susquehanna Bancshares, Inc. 200 5,725
Swift Transportation Inc. 300 5,325
Synetic Inc. 500 18,938
Sysco Corp. 700 23,013
Systems & Computer Technology Corp. 200 2,975
TCA Cable TV Inc. 600 17,400
TJ International Inc. 200 3,100
TJX Companies, Inc. 200 5,025
TNT Freightways Corp. 300 6,863
TRINOVA Corp. 1,600 51,000
TRW Inc. 200 17,825
</TABLE>
F-129
See accompanying Notes to Financial Statements.
<PAGE> 198
SchwabFunds 42
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Tandem Computers Inc. 300 $ 2,663
Tandy Corp. 300 13,875
Target Therapeutics Inc. 200 12,138
Tech Data Corp. 500 8,344
Tecnol Medical Products Inc. 300 5,325
Tejas Gas Corp. 200 9,775
Tektronix, Inc. 100 3,250
Tele Communications Inc. (New) - Tci Group Series
A 2,700 50,119
Teledyne Inc. 100 2,800
Teleflex Inc. 300 13,538
Tellabs Inc. 300 14,513
Telxon Corp. 200 4,225
Temple-Inland Inc. 200 9,375
Tencor Instrs 400 7,225
Tenet Healthcare Corp. 800 16,800
Tenneco Inc. 600 33,525
Texaco Inc. 1,100 94,600
Texas Industries Inc. 200 12,725
Texas Instruments Inc. 600 30,525
Texas Utilities Co. 800 33,100
Textron Inc. 300 24,000
Thermedics Inc. 500 14,125
Thermo Fibertek Inc. 800 17,800
Thiokol Corp. 300 13,163
Thomas & Betts Corp. 100 7,500
Tiffany & Co. (New) 500 28,375
Timberland Co. Class A 100 2,138
Time Warner Inc. 1,600 65,400
Times Mirror Co. (New) Series A 300 11,813
Timken Co. 100 4,613
Titan Wheel International Inc. 300 4,950
Toll Brothers, Inc. 700 12,075
Topps Inc. 600 3,263
Torchmark Corp. 200 9,000
Toro Co. 200 6,425
Toy Biz Inc. Class A 200 3,575
Toys "R" Us, Inc. 1,000 27,000
Transaction Systems Architects Inclusive A 200 8,050
Transamerica Corp. 200 14,975
Transport World Airlines Inc. 800 16,000
</TABLE>
F-130
See accompanying Notes to Financial Statements.
<PAGE> 199
SchwabFunds 43
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Travelers Group Inc. 1,300 $85,800
Trenwick Group Inc. 100 5,150
TriMas Corp. 700 15,400
Triangle Pacific Corp. Delaware 300 5,156
Triarc Cos., Inc. Class A 400 5,000
Tribune Co. (New) 200 13,175
Trident Microsystems Inc. 200 2,888
Trimble Navigation Ltd 300 6,825
True North Communications 300 7,500
Trust Company of New Jersey 200 2,700
Trustco Bank Corp. NY 200 4,150
Trustmark Corp. 800 18,200
Tuscon Electric Power Co. 2,000 5,750
Tyco Interest Ltd 400 14,300
U S Filter Corp. (New) 600 16,800
U S Order Inc. 300 6,075
U S Trust Corp. (New) 200 10,550
U S WEST, Inc. (Communications Group) 1,700 55,038
U S West Inc. (Media Group) 2,000 41,250
U.S. Bancorp 400 13,650
U.S. Healthcare, Inc. 500 23,031
U.S. Home Corp. (New) 200 5,150
U.S.A. Waste Services Inc. 1,100 28,050
UGI Corp. (New) 700 14,875
UNR Industries, Inc. 700 5,644
UNUM Corp. 200 11,900
USAir Group, Inc. 1,200 21,900
USF&G Corp. 300 4,650
USLIFE Corp. 100 2,938
UST Corp. 200 2,700
UST Inc. 600 19,125
USX Corp. (Marathon Group) (New) 900 17,325
USX Corp. (U.S. Steel Group) 200 6,925
Ultratech Stepper Inc. 300 5,250
Umb Financial Corp. 330 12,334
Unicom Corp. 800 21,600
Unifirst Corp. 500 9,438
Unilever 600 81,450
Union Camp Corp. 200 9,925
Union Carbide Corp. 400 19,850
Union Electric Co. 300 12,300
</TABLE>
F-131
See accompanying Notes to Financial Statements.
<PAGE> 200
SchwabFunds 44
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Union Pacific Corp. 900 $61,763
Uniroyal Chemical Corp. 300 2,850
Unisys Corp. 400 2,400
United Bankshares, Inc. 200 5,900
United Carolina Bancshares Corp. 300 7,350
United Companies Financial Corp. 700 22,400
United Healthcare Corp. 800 49,200
United Illuminating Co. 200 7,375
United Insurance Companies, Inc. 800 17,550
United International Holdings Inc. Class A 200 3,250
United Meridian Corp. 400 9,550
United States Surgical Corp. 100 3,275
United Stationers Inc. 200 4,350
United Technologies Corp. 500 56,125
United Television Inc. 200 17,900
United Waste Systems, Inc. 500 24,750
United Water Resources Inc. 400 5,250
United Wisconsin Services, Inc. 200 4,325
Unitrode Corp. 200 4,850
Universal Health Services Inc. Class B 200 10,625
Unocal Corp. 700 23,363
V.F. Corp. 200 11,050
VLSI Technology, Inc. 700 8,969
Valassis Communications Inc. 600 9,975
Valhi, Inc. 1,600 9,800
Valley National Bancorp 800 22,200
Valmont Industries, Inc. 200 5,925
Value Line, Inc. 200 7,250
Vanguard Cellular Systems, Inc. Class A 600 12,113
Varco International Inc. 600 7,275
Varity Corp. 100 4,325
Ventritex Inc. 300 4,594
Verifone Inc. 600 25,200
Vertex Pharmaceuticals Inc. 500 13,375
Vesta Insurance Group Inc. 300 9,788
Viacom Inc. Class B 1,400 58,975
Vicor Corp. 600 9,000
Vintage Petroleum Inc. 300 6,113
Visx Inc. Delaware 300 10,875
Vital Signs Inc. 200 4,863
Vitalink Pharmacy Services, Inc. 200 4,425
</TABLE>
F-132
See accompanying Notes to Financial Statements.
<PAGE> 201
SchwabFunds 45
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Vivra Inc. 900 $ 25,875
Vivus 200 6,150
WD-40 Co. 100 4,788
WLR Foods, Inc. 200 2,663
WMS Industries Inc. 300 5,213
WMX Technologies Inc. 2,100 66,675
Waban Inc. 700 18,375
Wabash National Corp. 300 5,663
Wachovia Corp. (New) 600 26,850
Wal-Mart Stores, Inc. 8,300 191,938
Walgreen Co. 1,100 35,888
Wang Laboratories Inc. (New) 700 16,581
Warner Lambert Co. 400 41,300
Washington Energy Co. 300 6,150
Washington National Corp. 200 5,350
Watkins-Johnson Co. 100 3,575
Watts Industries Inc. Class A 700 13,913
Wausau Paper Mills Co. 875 20,344
Weatherford Enterra Inc. 1,000 34,875
Webb Delaware Corp. 200 3,675
Wellman Inc. 600 14,100
Wells Fargo & Co. 200 52,200
Wendy's International, Inc. 200 3,625
Werner Enterprises Inc. 600 14,250
West Inc. 200 4,650
Westamerica Bancorp 200 9,425
Westcorp Inc. 300 5,550
Westcott Communications Inc. 200 3,525
Western Atlas, Inc. 200 12,000
Western Gas Resources Inc. 300 4,313
Western Publishing Group Inc. 200 1,988
Western Waste Industries 200 7,625
Westinghouse Air Brake Co. (New) 300 3,225
Westinghouse Electric Corp. 1,500 28,875
Westpoint Stevens Inc. Class A 700 13,563
Westvaco Corp. 400 11,750
Westwood One Inc. 400 7,400
Weyerhaeuser Co. 1,000 46,125
Wfs Financial Inc. 400 7,650
Whirlpool Corp. 200 11,050
Whitman Corp. 300 7,275
</TABLE>
F-133
See accompanying Notes to Financial Statements.
<PAGE> 202
SchwabFunds 46
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
UNITED STATES (Continued)
Whitney Holding Corp. 200 $ 6,225
Whx Corp. 300 3,375
Wicor Inc. 500 16,875
Willamette Industries, Inc. 200 12,000
Williams Cos Inc. 300 15,113
Williams Sonoma Inc. 600 13,538
Winn Dixie Stores Inc. 600 20,175
Winnebago Industries, Inc. 300 2,588
Wm Wrigley Junior Co. 400 23,450
Wolverine Tube Inc. 200 8,125
Wolverine World Wide Inc. 500 14,000
Wonderware Corp. 200 4,725
Woolworth Corp. 300 4,688
Worldcom Inc. 700 32,244
Worthington Industries Inc. 200 3,988
Wps Resources Corp. 600 20,175
Wyle Laboratories 200 6,925
Wyman Gordon Co. 700 11,900
X-Rite, Inc. 300 4,425
XTRA Corp. 300 14,025
Xerox Corp. 400 50,200
Yankee Energy System, Inc. 100 2,238
Yellow Corp. 400 5,050
Zale Corp. (New) 500 8,594
Zebra Technologies Corp. Class A 400 10,500
Zeigler Coal Holding Co. 300 4,350
Zenith Electronics Corp. 1,200 7,950
Zenith National Insurance Corp. 200 4,775
Zero Corp. 200 3,350
Zilog Inc. 300 10,125
Zions Bancorp 500 35,500
Zurn Industries, Inc. 300 6,150
i-Stat Corp. 200 5,125
-----------
27,374,333
-----------
TOTAL COMMON STOCK
(Cost $34,557,103) 36,939,317
-----------
</TABLE>
F-134
See accompanying Notes to Financial Statements.
<PAGE> 203
SchwabFunds 47
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
PREFERRED STOCK--0.1%
AUSTRALIA - 0.0%
News Corp. Ltd. (Limited Voting Shares) 2,369 $ 12,033
----------
GERMANY - 0.1%
Henkel KGaA 36 13,412
Lufthansa AG (Non-Voting) 49 7,086
RWE AG (Non Voting) 290 8,771
Sap AG (Non-Voting) 99 14,257
Volkswagen AG (Non Voting) 24 6,113
----------
49,639
----------
ITALY - 0.0%
Fiat Finance SpA 3,117 5,697
----------
UNITED STATES - 0.0%
Teledyne, Inc. Preferred Series E 1 15
----------
TOTAL PREFERRED STOCK
(Cost $66,710) 67,384
----------
<CAPTION>
Par
---
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--35.4%
U.S. Treasury Bonds
10.00%, 05/15/10 $ 475,000 586,882
7.25%, 05/15/16 6,825,000 7,127,621
8.13%, 08/15/19 300,000 343,461
7.13%, 02/15/23 1,300,000 1,340,248
6.25%, 08/15/23 1,725,000 1,595,642
U.S. Treasury Notes
5.88%, 05/31/96 500,000 500,470
6.25%, 01/31/97 1,050,000 1,057,161
5.63%, 10/31/97 1,700,000 1,697,739
5.13%, 02/28/98 600,000 595,172
7.88%, 04/15/98 800,000 831,750
5.88%, 08/15/98 1,275,000 1,275,867
5.00%, 02/15/99 500,000 486,489
7.00%, 04/15/99 600,000 617,256
7.50%, 10/31/99 900,000 941,697
</TABLE>
F-135
See accompanying Notes to Financial Statements.
<PAGE> 204
SchwabFunds 48
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
--- -----
<C> <C> <C>
U.S. Treasury Notes
5.75%, 10/31/00 $1,500,000 $ 1,478,010
6.38%, 08/15/02 1,900,000 1,912,141
6.50%, 05/15/05 400,000 402,416
6.50%, 08/15/05 200,000 201,374
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $23,592,620) 22,991,396
-----------
AGENCY OBLIGATIONS--COUPON NOTES--1.0%
Federal National Mortgage Assoc.
7.25%, 06/01/05 650,000 654,875
-----------
TOTAL AGENCY OBLIGATIONS--COUPON NOTES
(Cost $657,489) 654,875
-----------
SHORT-TERM INVESTMENTS--5.8%
AGENCY OBLIGATIONS--DISCOUNT NOTES - 5.2%
Federal National Mortgage Assoc.
5.21%, 04/11/96 400,000 401,250
5.12%, 04/29/96 2,975,000 2,961,547
-----------
3,362,797
-----------
</TABLE>
F-136
See accompanying Notes to Financial Statements.
<PAGE> 205
SchwabFunds 49
- --------------------------------------------------------------------------------
Schwab Asset Director-Balanced Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
--- -----
<C> <C> <C>
REPURCHASE AGREEMENT - 0.6%
UNITED STATES
State Street Bank
4.75%, 04/01/96 $399,000 $ 399,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $3,761,692) 3,761,797
-----------
TOTAL INVESTMENTS -- 99.2%
(Cost $62,635,614) 64,414,769
OTHER ASSETS AND LIABILITIES -- 0.8%
Other Assets 795,152
Liabilities (281,546)
-----------
513,606
-----------
NET ASSETS -- 100.0%
Applicable to 6,222,846 outstanding $0.00001 par
value shares (unlimited shares authorized) $64,928,375
===========
NET ASSET VALUE PER SHARE $10.43
======
</TABLE>
- ------------
*Non-Income Producing Security
F-137
See accompanying Notes to Financial Statements.
<PAGE> 206
SchwabFunds 1
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
COMMON STOCK--37.9%
AUSTRALIA--0.2%
Amcor Ltd. 245 $ 1,593
Australia & New Zealand Banking Group 594 2,841
Broken Hill Proprietary Co., Ltd. 1,134 16,146
CRA Ltd. 368 5,507
Commonwealth Bank Group 504 3,934
National Australia Bank 820 7,305
News Corp., Ltd. 796 4,659
Western Mining Corp. 650 4,297
Westpac Banking Corp. 1,069 5,029
-------
51,311
-------
BELGIUM--0.1%
Electrabel 26 5,793
Electrabel, AFV1 6 1,349
Petrofina SA 11 3,097
Societe Generale de Belgique 24 1,899
Tractebel Investor International Capital 4 1,562
Tractebel Investor International Capital 4 1,543
-------
15,243
-------
CANADA--0.3%
Alcan Aluminum Ltd. 132 4,260
BCE Inc. 183 6,476
Bank of Montreal 156 3,633
Bank of Nova Scotia Halifax 135 3,045
Barrick Gold Corp. 286 8,705
Canadian Imperial Bank of Commerce 127 3,819
Canadian Pacific Ltd. 200 3,979
Imperial Oil Ltd. 113 4,444
Noranda Inc. 138 2,922
Northern Telecom Ltd. 149 7,089
Placer Dome Inc. 140 4,004
Royal Bank Canada Montreal Quebec 184 4,301
Seagram Co. Ltd. 176 5,696
Thomson Corp. 345 5,029
</TABLE>
F-138
See accompanying Notes to Financial Statements.
<PAGE> 207
SchwabFunds 2
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
Toronto-Dominion Bank 176 $ 3,050
--------
70,452
--------
DENMARK--0.0%
Tele Danmark AS Series B 52 2,709
--------
FRANCE--0.7%
AXA Groupe SA 106 6,514
Alcatel Alsthom Cie Generale d'Electricite SA 88 8,158
BQE National Paris 113 4,420
Carrefour 15 10,984
Cie Financiere de Paribas (Bearer) 70 4,253
Compagnie de Saint-Gobain SA 49 6,363
Danone Groupe 42 6,438
Eaux (CIE Generale) 69 7,056
Elf Aquitaine 159 10,781
L'Air Liquide 39 7,101
L'Oreal SA 36 11,279
LVMH Moet Hennessy Louis Vuitton 51 12,941
Lafarge Coppee SA 54 3,575
Lyonnaise des Eaux-Dumez 30 2,806
Michelin Class B (Reg.) 43 2,049
PSA Peugeot Citroen 29 4,422
Renault (Regie Nationale) 140 4,058
Rhone-Poulenc SA A Shares 188 4,849
Sanofi 60 4,360
Schneider SA 75 3,321
Societe Generale 51 5,671
Suez Group 93 3,610
TOTAL Class B 137 9,249
Union des Assurances de Paris 176 3,606
--------
147,864
--------
GERMANY--0.8%
BASF Group 36 9,718
Bankgesell Berlin 13 3,003
Bayer AG 41 13,967
Bayer Hypo/wech Bank 151 3,742
Bayer Motoren Werk 12 6,271
Bayerische Vereinsbank AG 154 4,725
Commerzbank AG 20 4,606
</TABLE>
F-139
See accompanying Notes to Financial Statements.
<PAGE> 208
SchwabFunds 3
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
Daimler-Benz AG 30 $ 16,318
Deutsche Bank AG 278 13,997
Dresdner Bank AG 260 6,948
Hoechst AG 34 12,045
Linde AG 5 3,079
Lufthansa AG (Bearer) 21 3,329
Mannesmann AG 21 7,653
Muenchener Rueckversicherung (Reg.) 5 10,415
RWE AG 120 4,818
Sap AG 30 4,206
Schering AG 40 3,167
Siemens AG 33 18,162
Thyssen AG 18 3,264
VIAG AG 12 4,889
Veba AG 285 13,851
Vereinigte Elektrizitatswerke Westfalen Series B 12 3,954
Volkswagen AG 14 4,908
---------
181,035
---------
HONG KONG--0.5%
CITIC Pacific 2,000 7,732
Cheung Kong Holdings 2,000 14,223
Hang Seng Bank Ltd. 2,000 20,559
Henderson China 4 87
Henderson Land Development Co. 1,000 6,982
Hongkong Electric Holdings Ltd. 2,000 6,504
Hongkong Telecom International 8,400 16,780
Hutchison Whampoa Ltd. 2,000 12,568
New World Development Co. 2,046 9,577
Sun Hung Kai Properties 1,000 9,116
Swire Pacific Ltd. Class A 1,000 8,825
Wharf Holdings 2,000 7,473
---------
120,426
---------
ITALY--0.2%
Alleanza Assicurazioni 191 1,545
Assicurazioni Generali 469 10,469
Fiat Finance SpA 1,924 6,035
Fiat Finance SpA 830 1,451
INA 1,382 1,883
STET 2,246 6,229
</TABLE>
F-140
See accompanying Notes to Financial Statements.
<PAGE> 209
SchwabFunds 4
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
STET (Non-Convertible) 627 $ 1,246
Telecom Italia 3,888 6,153
Telecom Italia (Non-Convertible) 1,145 1,615
Telecom Italia Mob 3,367 6,111
Telecom Italia Mob di Risp 1,431 1,575
-------
44,312
-------
JAPAN--3.6%
Asahi Bank 1,000 11,965
Bank of Tokyo 1,000 14,863
DDI Corp. 1 7,619
Dai-Ichi Kangyo Bank, Ltd. 1,000 19,537
East Japan Railway Co. 1 5,141
Fuji Bank, Ltd. 1,000 21,781
Fujitsu Ltd. 1,000 9,226
Hitachi Ltd. 1,000 9,722
Industrial Bank of Japan, Ltd. 1,000 27,577
Ishikawajima-Harima Heavy Industries 1,000 4,674
Ito-Yokado Co., Ltd. 1,000 59,360
Joyo Bank 1,000 7,890
Kansai Electric Power Co. 1,000 23,183
Kawasaki Heavy Industries 1,000 5,104
Kawasaki Steel Co. 1,000 3,580
Kobe Steel 1,000 3,094
Kokusai Denki 1,000 92,452
Long-Term Credit Bank of Japan 1,000 8,357
Matsushita Electric Industrial Co., Ltd. 1,000 16,265
Mitsubishi Bank 1,050 22,183
Mitsubishi Chemical Corp. 1,000 5,282
Mitsubishi Electric Corp. 1,000 7,441
Mitsubishi Heavy Industries 1,000 8,638
NKK Corp. 1,000 2,889
Nippon Paper Industries Co. 1,000 7,133
Nippon Steel Corp. 2,000 6,880
Nippon Telegraph & Telephone Corp. 4 29,240
Nissan Motor Co., Ltd. 1,000 7,740
Nomura Securities Co., Ltd. 1,000 21,968
Obayashi Corp. 1,000 8,581
Oki Electric Industry Co., Ltd. 1,000 7,684
Omron Corp. 1,000 22,155
Osaka Gas Co. 1,000 3,618
Sakura Bank 1,000 11,405
</TABLE>
F-141
See accompanying Notes to Financial Statements.
<PAGE> 210
SchwabFunds 5
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
Sanwa Bank 1,000 $ 20,098
Seven-Eleven Japan Co. 1,100 70,848
Sumitomo Bank 1,000 20,192
Sumitomo Metal Industries 1,000 3,132
Taisei Corp. 1,000 7,104
Tokai Bank 1,000 12,433
Tokyo Electric Power Co., Inc. 1,000 25,613
Tokyo Electron 1,000 34,120
Tokyo Gas & Electric Industrial 1,000 3,590
Toshiba Corp. 1,000 7,591
Toyo Seikan 1,000 35,242
Toyo Trust & Banking Co. 1,000 9,339
Toyota Motor Corp. 1,000 22,061
Yasuda Fire & Marine Insurance Co. 1,000 7,450
--------
803,040
--------
NETHERLANDS--0.6%
Abn Amro Holdings NV 181 9,006
Aegon NV 152 7,176
Akzo Nobel NV 42 4,670
Elsevier NV 386 5,911
Heineken NV 29 6,258
Internationale Nederlanden Groep 168 12,203
Koninklijke PTT Nederland 271 10,662
Philips Electronics NV 201 7,312
PolyGram NV 105 6,356
Royal Dutch/Shell Group (Bearer) 314 44,474
Unilever NV 94 12,819
Wolters Kluwer CVA 29 3,191
--------
130,038
--------
SINGAPORE--0.1%
Hong Kong Land Holdings 1,000 2,400
Singapore Airlines Ltd. 1,000 10,372
Singapore Telecom 6,000 14,747
--------
27,519
--------
SPAIN--0.2%
Argentaria 50 2,115
Banco de Bilbao Vizcaya SA (Reg.) 133 4,961
</TABLE>
F-142
See accompanying Notes to Financial Statements.
<PAGE> 211
SchwabFunds 6
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
Banco de Santander SA (Reg.) 68 $ 3,238
Empresa Nacional de Electricidad 152 8,707
Iberdrola SA 542 5,000
Repsol, SA 176 6,636
Telefonica Internacional de Espana, SA 550 8,730
--------
39,387
--------
SWEDEN--0.2%
ASEA AB Series B Free shares 13 1,340
Asea 39 4,048
Astra AB Series A Free shares 294 13,628
Astra AB Series B Free shares 40 1,842
Ericsson (L.M.) Telephone Series B Free shares 560 12,329
Sandvik AB Series A Free shares 72 1,510
Sandvik AB Series B Free shares 82 1,719
Volvo AB Series A Free shares 65 1,528
Volvo AB Series B Free shares 167 3,889
--------
41,833
--------
SWITZERLAND--0.8%
CS Holding (Reg.) 108 9,920
Ciba-Geigy Ltd. (Bearer) 1 1,240
Ciba-Geigy Ltd. (Reg.) 14 17,526
Holderbank Fn Glarus (Bearer) 2 1,510
Nestle Ltd. (Reg.) 25 28,208
Roche Group 4 33,227
Roche Group (Bearer) 1 13,704
Sandoz Ltd. (Bearer) 2 2,327
Sandoz Ltd. (Reg.) 21 24,630
Schweizerische Bankgesellschaft (Bearer) 12 13,318
Schweizerische Bankgesellschaft (Reg.) 13 3,279
Schweizerische Bankverein (Bearer) 14 5,144
Schweizerische Bankverein (Reg.) 16 2,933
Winterthur (Reg.) 4 2,640
Zurich Versicherun (Reg.) 27 7,764
--------
167,370
--------
UNITED KINGDOM--2.0%
Abbey National 769 6,608
Allied Domecq PLC 610 4,571
</TABLE>
F-143
See accompanying Notes to Financial Statements.
<PAGE> 212
SchwabFunds 7
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
Argyll Group 669 $ 3,135
Asda Group 1,158 1,878
Associated British Foods 443 2,718
BAA 605 4,940
BAT Industries 1,806 13,341
BOC Group 193 2,613
BTR 2,162 10,427
Barclays 944 10,503
Bass 517 5,871
Boots Co. 556 5,083
British Airways 567 4,630
British Gas 2,541 8,862
British Petroleum 3,245 28,379
British Sky Broadcast 1,030 6,870
British Steel 806 2,337
British Telecom 3,652 20,609
Cable & Wireless 1,294 10,527
Cadbury Schweppes 577 4,412
Commercial Union 389 3,378
General Electric Co. 1,608 8,982
Glaxo Wellcome 2,029 25,455
Granada Group 341 3,903
Grand Metropolitan, Inc. 1,233 7,941
Great University Stores 589 6,050
Guinness 1,184 8,620
HSBC Holdings 1,036 15,792
HSBC Holdings 500 7,658
Hanson Industries 2,099 6,135
Imperial Chemical Industries 424 5,979
Kingfisher 391 3,396
Marks & Spencer PLC 1,640 10,538
National Power 695 4,954
National Westminster Bancorp 1,007 9,767
P & O 353 2,885
Pearson, Inc. 309 3,150
Powergen 425 3,461
Prudential Corp. 1,114 7,243
RTZ Corp. (Bearer) 57 807
RTZ Corporation PLC 568 8,227
Rank Organisation PLC 486 3,594
Reed International 329 5,561
Reuters Holdings PLC 977 10,602
Royal Bank of Scotland 473 3,519
</TABLE>
F-144
See accompanying Notes to Financial Statements.
<PAGE> 213
SchwabFunds 8
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
Sainsbury (J) PLC 1,060 $ 5,881
Scot & Newcastle 358 3,497
Shell Transport & Trading 1,941 25,625
SmithKline Beecham (Units) 767 7,714
SmithKline Beecham PLC 810 8,122
Standard Chartered PLC 566 5,257
TSB Group 2,345 11,238
Tesco 1,209 4,918
Thorn Emi 251 6,449
Unilever 475 8,866
Vodafone Group 1,228 4,545
Zeneca Group 554 11,482
--------
439,505
--------
UNITED STATES--27.5%
20th Century Industries 200 3,350
360 Communications Co. 100 2,388
3Com Corp. 200 7,963
3DO Co. 100 894
ACX Technologies Inc. 100 1,813
ALZA Corp. 100 3,075
AMC Entertainment Inc. 100 2,425
AMCORE Financial, Inc. 100 2,088
AMETEK, Inc. 100 1,763
AMP Inc. 300 12,413
AMR Corp. 100 8,950
AST Research Inc. 100 488
AT&T Corp. 1,100 67,375
Abbott Laboratories 400 16,300
Access Health Inc. 150 5,850
Accustaff Inc. 300 7,613
Actel Corp. 100 1,544
Acuson 100 1,575
Acxiom Corp. 100 2,381
Advanced Micro Devices Inc. 180 3,105
Advanced Tissue Sciences Inc. 100 1,425
Advo Inc. 100 975
Aetna Life & Casualty Co. 100 7,550
Affiliated Computer Services Inc. 100 4,163
Agouron Pharmaceuticals Inc. 100 3,888
Ahmanson (H.F.) & Co. 100 2,425
Air Express International Corp. 100 2,563
</TABLE>
F-145
See accompanying Notes to Financial Statements.
<PAGE> 214
SchwabFunds 9
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
Air Products & Chemicals Inc. 100 $ 5,463
Airbourne Freight Corp. 100 2,525
Airtouch Communications Inc. 500 15,563
Albany International Corp. (New) Class A 100 2,000
Albertson's Inc. 200 7,425
Alcan Aluminum Ltd. 300 9,675
Alco Standard Corp. 100 5,213
Alex Brown Inc. 100 5,188
Alexander & Alexander Services 800 15,100
Alfa Corp. 100 1,388
Alliance Entertainment Corp. 100 938
Alliance Semiconductor Corp. 100 956
Alliant Techsystems Inc. 100 4,838
Allied Signal Inc. 300 17,738
Allstate Corp. 400 16,850
Alltel Corp. 100 3,100
Alpharma, Inc. Class A 100 2,325
Aluminum Company of America 200 12,525
Amcol International Corp. 100 1,244
Amerada Hess Corp. 100 5,500
Amerco 100 2,463
America West Airlines, Inc. Class B 100 2,138
American Annuity Group, Inc. 100 1,188
American Bankers Insurance Group, Inc. 100 3,513
American Brands, Inc. 100 4,238
American Business Information, Inc. 100 1,638
American Business Products, Inc. 100 2,263
American Electric Power Co., Inc. 100 4,175
American Express Co. 200 9,875
American Freightways Corp. 100 1,269
American General Corp. 200 6,900
American Greetings Corp. Class A 100 2,769
American Home Products Corp. 300 32,513
American International Group, Inc. 300 28,088
American Management Systems, Inc. 150 3,844
American Medical Response, Inc. 100 3,550
American Mobile Satellite Corp. 100 1,725
American Oncology Resources Inc. 100 4,288
American President Companies, Ltd. 100 2,300
American Stores Co. (New) 100 3,300
Americredit Corp. 100 1,388
Ameritech Corp. (New) 600 32,700
Amgen Inc. 200 11,613
</TABLE>
F-146
See accompanying Notes to Financial Statements.
<PAGE> 215
SchwabFunds 10
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
Amoco Corp. 300 $21,675
Amresco Inc. 100 1,450
Amsco International, Inc. 100 1,400
Anheuser-Busch Companies, Inc. 400 26,950
AnnTaylor Stores Corp. 100 1,800
Antec Corp. 100 1,563
Anthony Industries, Inc. 100 2,650
Apogee Enterprises, Inc. 100 2,150
Apollo Group, Inc. Class A 150 5,831
Apple Computer, Inc. 100 2,456
Applebee's International, Inc. 100 2,500
Applied Materials, Inc. 300 10,444
Apria Healthcare Group Inc. 200 6,375
AptarGroup, Inc. 100 4,150
Aquila Gas Pipeline Corp. 100 1,388
Arbor Drugs, Inc. 100 2,075
Arch Communications Group, Inc. 100 2,325
Archer-Daniels-Midland Co. 400 7,350
Arctco, Inc. 100 994
Argonaut Group, Inc. 100 3,131
Armco Inc. 300 1,613
Armor All Products Corp. 100 1,606
Arnold Industries Inc. 100 1,600
Arthur J. Gallagher & Co. 100 3,638
Arvin Industries, Inc. 500 10,375
Aspect Telecommunications Corp. 100 4,588
Associated Banc-Corp. 100 3,813
Associated Group Inc. Class A 100 1,931
Astoria Financial Corp. 100 5,100
Atlantic Richfield Co. 300 35,700
Atlantic Southeast Airlines Inc. 100 2,550
Atria Software, Inc. 100 5,450
Augat Inc. 100 1,750
Auspex Systems, Inc. 100 1,794
Authentic Fitness Corp. 100 2,588
Automatic Data Processing, Inc. 200 7,875
Avery Dennison Corp. 100 5,400
Avid Technology, Inc. 100 2,094
Avon Products, Inc. 100 8,575
Aztar Corp. 100 850
BISYS Group, Inc. 100 3,288
BJ Services Co. 100 3,350
BMC Industries, Inc. 100 2,150
</TABLE>
F-147
See accompanying Notes to Financial Statements.
<PAGE> 216
<TABLE>
<CAPTION>
SchwabFunds 11
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
BWIP Holding, Inc. Class A 100 $ 1,794
Baker Hughes Inc. 100 2,925
Baldor Electric Co. 100 2,013
Baldwin & Lyons, Inc. Class B 100 1,463
Ball Corp. 400 12,400
Ballard Medical Products 100 1,800
Bally Entertainment Corp. 100 1,725
Bally Total Fitness Holding Corp. 25 102
Baltimore Gas & Electric Co. 100 2,763
Banc One Corp. 507 18,062
Bank of Boston Corp. 100 4,963
Bank of New York Co., Inc. 200 10,300
BankAmerica Corp. 100 7,750
Bankers Trust New York Corp. 100 7,088
Banta Corp. 50 1,356
Barnett Banks, Inc. 100 6,225
Barrett Resources Corp. 100 2,500
Barrick Gold Corp. 400 12,150
Bassett Furniture Industries Inc. 100 2,588
Battle Mountain Gold Co. 300 2,925
Baxter International Inc. 200 9,050
Bay Networks, Inc. 200 6,150
Bbn Corp. 100 2,538
Becton Dickinson & Co. 100 8,188
Belden Inc. 100 2,950
Bell Atlantic Corp. 200 12,350
BellSouth Corp. 600 22,200
Beneficial Corp. 100 5,763
Benton Oil & Gas Co. 100 1,569
Berkley (W.R.) Corp. 100 4,650
Best Buy Co., Inc. 200 3,475
Best Products Inc. (New) 100 244
Bethlehem Steel Corp. 100 1,313
Biomet Inc. 100 1,413
Birmingham Steel Corp. 100 1,475
Black & Decker Corp. 100 3,788
Block (H & R) Inc. 100 3,613
Block Drug Inc. Class A 103 4,223
Blount International Inc. Class A 150 4,613
Blyth Industries Inc. 200 6,650
Boatmens Bancshares Inc. 100 3,931
Bob Evans Farms, Inc. 200 3,238
Boeing Co. 100 8,663
</TABLE>
See accompanying Notes to Financial Statements.
F-148
<PAGE> 217
<TABLE>
<CAPTION>
SchwabFunds 12
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Bok Financial Corp. (New) 100 $ 2,113
Bombay Inc. 100 813
Borg Warner Automotive Inc. 100 3,325
Borland International Inc. 100 1,794
Boston Scientific Corp. 167 7,682
Boston Technology Inc. (New) 100 1,331
Bowne & Co. Inc. 100 1,825
Breed Technologies Inc. 100 1,863
Bristol Myers Squibb Co. 400 34,250
Brooktree Corp. 100 894
Brown Forman Corp. Class B 100 4,013
Brown Group Inc. 100 1,350
Browning Ferris Industries Inc. 100 3,150
Brunswick Corp. 100 2,300
Buffets Inc. 100 1,413
Burlington Coat Factory Warehouse 100 1,175
Burlington Industries Inc. 200 2,525
Burlington Northern Santa Fe 100 8,213
Burlington Resources Inc. 100 3,713
Burr Brown 100 1,538
Bush Boake Allen Inc. 100 2,600
C-Cube Microsystems, Inc. 200 10,400
C-TEC Corp. 100 3,731
CCB Financial Corp. 100 5,063
CDI Corp. 100 2,675
CDW Computer Ctrs Inc. 100 5,038
CMAC Investment Corp. 100 5,650
CML Group, Inc. 200 625
CPC International Inc. 100 6,938
CSX Corp. 200 9,125
CUC International Inc. 100 2,925
Cable Design Technologies Corp. 100 3,638
Cabletron Systems Inc. 100 6,625
Cablevision Systems Corp. Class A 100 5,750
Cabot Oil & Gas Corp. Class A 100 1,425
Cal Federal Bancorp Inc. 200 3,575
Calgon Carbon Corp. 100 1,213
Calmat Co. 100 1,825
Cambridge Technology Partners 100 5,713
Camco International Inc. 100 3,150
Campbell Soup Co. 200 12,175
Capital Re Corp. 100 3,600
Capitol American Financial Corp. 100 2,488
</TABLE>
See accompanying Notes to Financial Statements.
F-149
<PAGE> 218
<TABLE>
<CAPTION>
SchwabFunds 13
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Caraustar Industries Inc. 100 $ 2,463
Carlisle Cos. Inc. 100 4,338
Carolina Power & Light Co. 100 3,725
Carpenter Technology Corp. 100 3,850
Carson Pirie Scott & Co. 100 2,250
Carter Wallace Inc. 100 1,638
Case Corp. 100 5,088
Caseys General Stores Inc. 100 2,350
Catalina Marketing Corp. 100 7,813
Catellus Development Corp. 200 1,550
Caterpillar Inc. 200 13,600
Cellstar Corp. 100 1,525
Cellular Technical Services Inc. 100 2,819
Centex Construction Prods Inc. 100 1,363
Central & South West Corp. 200 5,700
Central Hudson Gas & Electric 100 3,025
Central Louisiana Electric Co. (New) 100 2,688
Central ME Power Co. 100 1,450
Central Newspapers Inc. Class A 100 3,563
Centura Banks Inc. 100 3,675
Ceridian Corp. 57 2,451
Cerner Corp. 100 2,300
Champion International Corp. 100 4,525
Chaparral Steel Co. 100 1,488
Charming Shoppes Inc. 300 1,547
Charter One Financial Inc. 200 6,775
Chase Manhattan Corp. 200 14,700
Checkpoint System Inc. 400 9,950
Chemical Banking Corp. 200 14,100
Chesapeake Corp. 100 3,025
Chesapeake Energy Corp. 150 6,938
Chevron Corp. 500 28,063
Cheyenne Software Inc. 100 1,575
Chiquita Brands International Inc. 200 3,100
Chrysler Corp. 300 18,675
Chubb Corp. 100 9,388
Church & Dwight Inc. 100 2,088
Cigna Corp. 100 11,425
Cilcorp Inc. 100 4,300
Cinergy Corp. 100 3,000
Circuit City Stores Inc. 100 2,988
Cisco Systems Inc. 400 18,575
Citicasters Inc. 100 2,938
</TABLE>
See accompanying Notes to Financial Statements.
F-150
<PAGE> 219
<TABLE>
<CAPTION>
SchwabFunds 14
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Citicorp 200 $16,000
Citizens Bancorp Maryland 100 3,038
Citizens Corp. 100 1,950
City National Corp. 100 1,363
Claire S Stores Inc. 150 2,719
Cleveland Cliffs Inc. 100 4,425
Clorox Co. 100 8,613
Coast Savings Financial Inc. 100 3,125
Coastal Corp. 100 3,950
Coastal Physician Group Inc. 100 888
Coca-Cola Co. 800 66,100
Coherent Inc. 100 4,244
Colgate-Palmolive Co. 100 7,788
Collective Bancorp Inc. 100 2,538
Collins & Aikman Corp. 200 1,250
Coltec Industries Inc. 200 2,425
Columbia/HCA Healthcare Corp. 200 11,550
Comair Holdings Inc. 100 3,456
Comcast Corp. Class A 200 3,538
Comerica Inc. 100 4,175
Commerce Group Inc. 100 1,975
Commercial Federal Corp. 100 3,888
Commonwealth Energy System 100 4,675
Community Health System Inc. 100 4,100
Community Psychiatric Centers 100 838
Comnet Cellular Inc. 100 2,775
CompUSA Inc. 100 5,538
Compaq Computer Corp. 200 7,725
Computer Assoc International Inc. 200 14,325
Computer Network Technology 100 550
Computer Sciences Corp. 100 7,038
Computervision Corp. (New) 100 1,038
Compuware Corp. 200 4,650
Comverse Technology Inc. (New) 100 2,425
ConAgra, Inc. 200 8,125
Cone Mills Corp. 100 1,163
Conrail Inc. 100 7,163
Consolidated Edison Co. 200 6,375
Consolidated Natural Gas Co. 100 4,350
Continental Airlines Inc. Class B 100 5,638
Continuum Inc. 100 4,163
Cooper Industries Inc. 100 3,900
Cooper Tire & Rubber 100 2,575
</TABLE>
See accompanying Notes to Financial Statements.
F-151
<PAGE> 220
<TABLE>
<CAPTION>
SchwabFunds 15
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Coors Adolph Co. Class B 100 $ 1,800
Copley Pharmaceutical Inc. 100 1,688
Corestates Financial Corp. 100 4,238
Corning Inc. 200 7,000
Corrections Corp. of America 100 5,700
Coventry Corp. 100 1,700
Crawford & Co. Class A 100 1,525
Crawford & Co. Class B 100 1,575
Cray Research Inc. 100 2,913
Credence Systems Corp. 100 1,688
Crompton & Knowles Corp. 100 1,463
Cross (A.T.) Co. Class A 100 1,575
Cross Timbers Oil Co. 100 1,725
Crown Cork & Seal Inc. 100 4,875
Cullen Frost Bankers Inc. 100 4,950
Cygnus Inc. 100 2,075
Cyprus Amax Minerals Co. 100 2,825
Cyrix Corp. 100 2,381
Cytec Industries Inc. 100 8,450
DSC Communications Corp. 100 2,694
DTE Energy Co. 100 3,363
Dallas Semiconductor Corp. 100 1,838
Dames & Moore Inc. 100 1,113
Dana Corp. 100 3,338
Darden Restaurants Inc. 100 1,350
Data General Corp. 100 1,463
Datascope Corp. 100 2,313
Davidson & Associates, Inc. 100 2,344
Dayton Hudson Corp. 100 8,488
Dean Witter Discover & Co. 100 5,725
Deere & Co. 300 12,525
Delta & Pine Land Co. 200 11,125
Delta Airlines Inc. 100 7,688
Deluxe Corp. 100 2,834
Department 56 Inc. 100 2,188
Detroit Diesel Corp. 100 2,038
Devon Energy Corp. 100 2,350
Devry Inc. 100 3,400
Dexter Corp. 100 2,650
Diagnostic Products Corp. 100 4,038
Dial Corp. 100 2,800
Dialogic Corp. 100 4,250
Diamond Multimedia System Inc. 100 1,588
</TABLE>
See accompanying Notes to Financial Statements.
F-152
<PAGE> 221
<TABLE>
<CAPTION>
SchwabFunds 16
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Diamond Shamrock Inc. 100 $ 3,250
Digital Equipment Corp. 100 5,513
Dillard Department Stores Inc. Class A 100 3,463
Dimon Inc. 100 1,763
Discount Auto Parts Inc. 100 2,788
Disney (Walt) Co. 609 38,900
Dollar Tree Stores Inc. 100 4,438
Dominion Resources Inc. 100 3,963
Donaldson Inc. 100 2,750
Donnelley (R.R.) & Sons Co. 100 3,450
Doubletree Corp. 100 2,706
Dover Corp. 100 4,575
Dow Chemical Co. 200 17,375
Dow Jones & Co. Inc. 100 3,850
Dresser Industries Inc. 100 3,050
Du Pont (E.I.) de Nemours & Co. 300 24,900
Duke Power Co. 200 10,100
Dun & Bradstreet Corp. 200 12,125
Duriron Inc. 100 2,738
Duty Free International Inc. 100 1,325
Dynatech Corp. Rights Callable Through 2/16/99 100 2,325
EMC Corp. 200 4,375
Earthgrains Co. 16 478
Eastern Enterprises 100 3,550
Eastern Utilities Assoc. 100 2,150
Eastman Chemical Co. 100 6,913
Eastman Kodak Co. 100 7,100
Eaton Corp. 100 6,025
Eaton Vance Corp. (Non Voting) 100 3,225
Echlin Inc. 100 3,625
Edison International 300 5,138
Electroglas Inc. 200 3,038
Eletronics for Imaging Inc. 200 8,675
Eli Lilly & Co. 400 26,000
Emerson Electric Co. 200 16,150
Engelhard Corp. 100 2,338
Enhance Financial Services Group Inc. 100 2,763
Enron Corp. 200 7,375
Entergy Corp. 200 5,600
Enzo Biochem Inc. 100 1,700
Evergreen Media 100 3,588
Exabyte Corp. 100 1,631
Express Scripts Inc. Class A 100 4,600
</TABLE>
See accompanying Notes to Financial Statements.
F-153
<PAGE> 222
<TABLE>
<CAPTION>
SchwabFunds 17
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Exxon Corp. 800 $65,300
F & M National Corp. 100 1,738
FMC Corp. (New) 100 7,513
FMC Gold Co. 200 1,300
FORE Systems, Inc. 200 14,288
FPL Group, Inc. 200 9,050
FTP Software Inc. 100 1,238
Fair Issac & Co. Inc. 100 3,063
Falcon Drilling Inc. 100 2,250
Family Dollar Stores, Inc. 300 4,425
Federal Express Corp. 100 6,988
Federal Home Loan Mortgage Corp. 200 17,050
Federal Mogul Corp. 100 1,863
Federal National Mortgage Assoc. 800 25,500
Federated Department Stores Inc. 100 3,225
Ferro Corp. 100 2,838
Fifth Third Bancorp 100 5,794
Filenet Corp. 100 5,788
Financial Security Assured Holdings Ltd. 100 2,538
Fingerhut Companies, Inc. 100 1,288
First Bank System Inc. 188 11,210
First Chicago NBD Corp. 281 11,662
First Citizens Bancshares Inc. 100 5,950
First Commercial Corp. 107 3,371
First Commonwealth Financial Corp. 100 1,938
First Data Corp. 200 14,100
First Financial Bancorp 200 6,900
First Financial Corp. 100 2,119
First Interstate Bancorp 100 17,350
First Michigan Bank Corp. 100 3,000
First Mississippi Corp. 100 2,388
First Union Corp. 435 26,318
Firstmiss Gold Inc. 100 2,738
Fisher Scientific International, Inc. 100 3,825
Fleet Financial Group Inc. 189 7,655
Fleming Companies, Inc. 400 5,700
Florida East Coast Industry Inc. 100 8,738
Flowers Industries, Inc. 200 2,700
Fluor Corp. 100 6,825
Ford Motor Co. 700 24,063
Foremost Corp. of America 100 5,400
Foxmeyer Health Corp. 100 1,800
Franklin Quest Co. 100 2,700
</TABLE>
See accompanying Notes to Financial Statements.
F-154
<PAGE> 223
<TABLE>
<CAPTION>
SchwabFunds 18
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Freeport McMoran Copper & Gold Class B 100 $ 3,163
Fremont General Corp. 150 3,544
Fresenius U.S.A. Inc. 100 2,038
Fruit of the Loom Inc. Class A 100 2,588
Fuller (H.B.) Co. 200 6,000
Fulton Financial Corp. 100 2,175
Fund American Enterprises Holdings, Inc. 100 7,700
Furniture Brands International Inc. 200 1,850
G&K Services, Inc. Class A 100 2,650
GTE Corp. 600 26,325
Gannett Inc. 100 6,725
Gap Inc. 100 5,538
Gaylord Container Corp. Class A 200 1,838
Gencorp Inc. 100 1,250
General Datacom Industries Inc. 100 1,063
General Dynamics Corp. 100 5,850
General Electric Co. 1,200 93,450
General Instrument Corp. 100 2,738
General Magic Inc. 100 575
General Mills Inc. 100 5,838
General Motors Corp. 600 31,950
General Public Utilities Corp. 100 3,300
General Re Corp. 100 14,575
Genesis Health Ventures, Inc. 100 4,038
Gentex Corp. 100 2,950
Genuine Parts Co. 100 4,500
Geon Co. 100 2,663
Georgia Pacific Corp. 100 6,938
Geotek Communications Inc. 200 2,038
Gerber Scientific Inc. 100 1,500
Giddings & Lewis Inc. 100 1,906
Gilead Sciences Inc. 100 2,863
Gillette Co. 200 10,350
Glendale Federal Bank 100 1,813
Global Industrial Technologies Inc. 100 2,400
Global Natural Resources Inc. 100 1,325
Goodyear Tire and Rubber 100 5,100
Goulds Pumps Inc. 100 2,194
Grace (W.R.) & Co. 100 7,825
Grainger (W.W.), Inc. 100 6,713
Great Lakes Chemical Corp. 100 6,738
Great Western Financial Corp. 100 2,413
Green Tree Financial Corp. 100 3,438
</TABLE>
See accompanying Notes to Financial Statements.
F-155
<PAGE> 224
<TABLE>
<CAPTION>
SchwabFunds 19
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Greenfield Industries Inc. 100 $ 3,444
Greif Brothers Corp. Class A 100 2,900
Griffon Corp. 100 938
Gulf South Medical Supply Inc. 100 3,800
Gymboree Corp. 100 2,606
HCC Insurance Holdings, Inc. 200 10,975
HCIA Inc. 200 9,250
Haemonetics Corp. 100 1,650
Halliburton Co. 100 5,688
Hancock Holding Co. 100 3,613
Harcourt General Inc. 100 4,538
Harland John H Co. 100 2,200
Harleysville Group Inc. 100 2,725
Harman International Industries Inc. (New) 100 3,750
Harper Group, Inc. 200 3,675
Harrahs Entertainment Inc. 100 2,938
Harte Hanks Communications (New) 150 3,188
Hasbro Inc. 100 3,700
Hayes Wheels International Inc. 100 3,025
Health Management Systems, Inc. 150 4,238
Healthsouth Rehabilitation Corp. 117 3,978
Hecla Mining Co. 100 763
Heinz H J Co. 300 9,938
Helix Technology Corp. 100 2,825
Helmerich and Payne Inc. 200 6,750
Herbalife International Inc. 100 1,113
Hercules Inc. 100 6,200
Heritage Media Corp. Class A (New) 100 3,588
Hershey Foods Corp. 100 7,450
Hewlett Packard Co. 400 37,600
Highlands Insurance Group Inc. 10 198
Hilton Hotels Corp. 100 9,400
Hollywood Entertainment Corp. 100 1,331
Home Beneficial Corp. Class B 100 2,563
Home Depot Inc. 200 9,575
Home Financial Corp. 100 1,488
Home Shopping Network, Inc. 400 4,050
Homestake Mining Co. 100 1,938
Honeywell Inc. 100 5,525
Horace Mann Educators Corp. (New) 100 3,050
Horizon Cms Healthcare Corp. 200 2,800
Household International Inc. 100 6,725
Houston Industries Inc. 200 4,325
</TABLE>
See accompanying Notes to Financial Statements.
F-156
<PAGE> 225
<TABLE>
<CAPTION>
SchwabFunds 20
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Hudson Foods Inc. Class A 100 $ 1,425
Human Genome Sciences Inc. 100 3,813
Humana Inc. 200 5,025
Hunt (J.B.) Transport Services Inc. 100 1,988
Hyperion Software Corp. 200 4,300
ICN Pharmaceuticals, Inc. 101 2,235
IDEX Corp. 100 3,888
IES Industries Inc. 100 2,788
IHOP Corp. (New) 100 2,513
INSO Corp. 100 4,625
INTERSOLV Inc. 100 1,150
ITT Corp. (New) 100 6,000
ITT Hartford Group Inc. 100 4,900
ITT Industries Inc. 100 2,550
Ideon Group Inc. 100 1,113
Illinois Tool Works Inc. 100 6,463
Immulogic Pharmaceutical Corp. 100 1,319
Immunex Corp. (New) 100 1,594
Imperial Bancorp 108 2,579
In Focus Systems, Inc. 100 3,513
Inco Ltd 100 3,163
Indiana Energy Inc. 100 2,400
Information Resources, Inc. 100 1,438
Ingersoll Rand Co. 100 4,075
Input/Output Inc. 200 6,200
Insignia Financial Group Class A (New) 400 9,750
Insilco Corp. 100 3,506
Insurance Auto Auctions Inc. 100 900
Integrated Health Services Inc. 100 2,338
Intel Corp. 500 28,406
InterVoice, Inc. 100 2,875
Interdigital Commerce Corp. 100 881
Interface Inc. Class A 100 1,219
Intergraph Corp. 300 4,838
Interim Services Inc. 200 7,600
Intermet Corp. 100 1,300
International Business Machines 400 44,450
International Cabletel Inc. 100 3,000
International Dairy Queen Inc. Class A 100 2,188
International Family Entertainment 125 2,109
International Flavurs & Fragrances Inc. 100 4,788
International Multifoods Corp. 100 1,913
International Paper Co. 200 7,875
</TABLE>
See accompanying Notes to Financial Statements.
F-157
<PAGE> 226
<TABLE>
<CAPTION>
SchwabFunds 21
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Interneuron Pharmaceuticals 100 $ 3,713
Interpool Inc. 100 1,750
Interpublic Group of Companies, Inc. 100 4,725
Interstate Bakeries Corp. (New) 100 2,450
Invacare Corp. 100 2,800
Ionics Inc. 100 4,175
Isis Pharmaceuticals 100 1,150
Isolyser Inc. 100 1,650
J & L Specialty Steel Inc. 100 1,713
JP Foodservice, Inc. 100 1,913
Jacobs Engineering Group Inc. 100 2,825
Jacor Communications Inc. 100 1,963
James River Corp. 100 2,575
Jefferson-Pilot Corp. 300 16,163
John Alden Financial Corp. 100 1,763
John Wiley & Sons, Inc. Class A 100 3,338
Johnson & Johnson 400 36,900
Johnson Controls, Inc. 100 7,463
Juno Lighting Inc. 100 1,381
Just for Feet Inc. 100 4,163
Justin Industries Inc. 100 1,144
K Mart Corp. 300 2,813
K N Energy Inc. 100 3,113
Kansas City Life Insurance Co. 100 5,425
Kaufman & Broad Home Corp. 100 1,600
Kaydon Corp. 100 3,500
Kellogg Co. 200 15,150
Kellwood Co. 100 1,550
Kenetech Corp. 200 225
Kennametal Inc. 100 3,613
Kent Electrs Corp. 200 7,075
Kerr-McGee Corp. 100 6,350
Keycorp (New) 200 7,725
Keystone Financial Inc. 100 3,250
Keystone International Inc. 100 2,250
Kimball International Inc. Class B 100 2,875
Kimberly Clark Corp. 178 13,261
Kinder Care Learning Centers Inc. 100 1,263
Kinetic Concepts Inc. 100 1,350
Kirby Corp. 100 1,713
Knight-Ridder, Inc. 100 6,813
Kroger Co. 100 4,050
Kulicke & Soffa Industries Inc. 100 1,600
</TABLE>
See accompanying Notes to Financial Statements.
F-158
<PAGE> 227
<TABLE>
<CAPTION>
SchwabFunds 22
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
LSI Logic Corp. 100 $ 2,675
LTX Corp. 100 825
La-Z-Boy Chair Co. 100 3,113
Laclede Gas Co. 100 2,275
Laidlaw Inc. Class B Non Voting 200 2,125
Lance Inc. 100 1,550
Landmark Graphics Corp. 100 1,650
Landry's Seafood Restaurants, Inc. 100 1,863
Lands' End, Inc. 100 1,750
Lattice Semiconductor Corp. 100 2,831
Lawter International Inc. 100 1,088
Lennar Corp. 100 2,488
Liberty Corp. 100 3,300
Life Partners Group Inc. 100 2,075
Ligand Pharmaceuticals Inc. Class B 100 1,175
Lilly Industrial Inc. Class A 100 1,363
Limited Inc. 109 2,071
Lincare Holdings Inc. 100 3,238
Lincoln National Corp. Inc. 100 5,075
Lincoln Telecommunications 100 1,925
Liposome Inc. 100 2,094
Living Centers of America 100 3,725
Liz Claiborne 100 3,425
Lockheed Martin Corp. 200 15,175
Loews Corp. 200 15,125
Long Islands Bancorp Inc. 100 2,819
Longview Fibre Co. 200 3,375
Loral Corp. 100 4,900
Louis Dreyfus Nat Gas Corp. 100 1,088
Louisiana Pacific Corp. 100 2,438
Lowes Cos Inc. 100 3,575
Luby's Cafeterias, Inc. 100 2,313
Lukens Inc. 100 2,488
Lydall Inc. 100 2,500
MBNA Corp. 150 4,444
MCI Communications Corp. 500 15,156
MDU Resources Group, Inc. 100 2,300
MICROS Systems, Inc. 100 2,500
Mac Frugals Bargains Close Out 100 1,400
Mafco Consolidated Group Inc. 100 1,550
Magellan Health Services Inc. 100 2,250
Magna Group Inc. 100 2,294
Mallinckrodt Group Inc. 100 3,763
</TABLE>
See accompanying Notes to Financial Statements.
F-159
<PAGE> 228
<TABLE>
<CAPTION>
SchwabFunds 23
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Manitowoc Inc. 100 $ 3,150
Marcus Corp. 100 2,638
Mariner Health Group Inc. 100 1,638
Mark Twain Bancshares Inc. 100 3,725
Marriot International Inc. 100 4,750
Marsh & McLennan Companies 100 9,288
Marshall Industries 100 3,050
Masco Corp. 100 2,900
Mascotech Inc. 200 2,675
Mattel Inc. 250 6,781
Maxicare Health Plans Inc. (New) 100 2,500
May Department Stores Co. 200 9,650
Maytag Corp. 100 2,025
McAfee Associates, Inc. 100 5,500
McClatchy Newspapers Inc. Class A 100 2,388
McDonald's Corp. 400 19,200
McDonnell Douglas Corp. 100 9,163
McGraw-Hill, Inc. 100 8,675
Mead Corp. 100 5,400
Media General,Inc. Class A 100 3,875
Medic Computer Systems, Inc. 100 7,594
Medimmune Inc. 100 1,594
Medisense Inc. 100 4,463
Medpartners/ Mullikin Inc. 100 2,850
Medtronic Inc. 200 11,925
Mellon Bank Corp. 100 5,513
Melville Corp. 100 3,588
Men's Wearhouse, Inc. 100 3,125
Mentor Corp. Minnesota 100 2,319
Merck & Co. Inc. 800 49,800
Meredith Corp. 100 4,125
Merrill Lynch & Co. Inc. 200 12,150
Mesa Airlines Inc. 100 1,088
Methode Electrs Inc. Class A 100 1,600
Metromedia Inter. Grp., Inc. 100 1,350
Meyer (Fred) Inc. 100 2,800
Michaels Stores Inc. 100 1,413
Microcom Inc. 100 3,000
Micron Technology Inc. 200 6,275
Microsoft Corp. 400 41,225
Mid Am Inc. 100 1,838
Mikasa Inc. Class B 100 1,188
Miller Herman Inc. 100 3,106
</TABLE>
See accompanying Notes to Financial Statements.
F-160
<PAGE> 229
<TABLE>
<CAPTION>
SchwabFunds 24
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number Value
--------- -----
<S> <C> <C>
Minerals Technologies Inc. 600 $20,775
Minnesota Mining & Manufacturing Co. 200 12,975
Mississippi Chemical Corp. (New) 100 2,013
Mobil Corp. 200 23,175
Mobilemedia Corp. 100 2,056
Mohawk Industries Inc. 100 1,488
Molten Metal Technology, Inc. 100 3,338
Money Store Inc. 250 6,938
Monsanto Co. 100 15,350
Moore Corp. Ltd 100 1,950
Morgan (J.P.) & Co. Inc. 200 16,600
Morgan Stanley Group Inc. 200 10,350
Morton International Inc. 100 3,838
Motorola Inc. 400 21,200
Mueller Industries Inc. 100 3,538
Multicare Cos Inc. 100 2,838
Myers Industry Inc. 100 1,688
NAC Re Corp. 100 3,263
NACCO Industries, Inc. Class A 100 5,688
NCH Corp. 100 5,663
NIKE, Inc. Class B 100 8,125
Nabors Industries Inc. 300 4,275
National Auto Credit Inc. 100 1,513
National Bancorp of Alaska, Inc. 100 6,175
National City Corp. 100 3,513
National Commerce Bancorp 100 3,125
National Data Corp. 100 3,413
National Instrs Corp. 100 2,138
National Re Corp. 100 3,375
National Semiconductor Corp. 100 1,388
National Steel Corp. Class B 100 1,400
NationsBank Corp. 100 8,013
Nautica Enterprises Inc. 100 4,763
Navistar International Corp. 600 6,225
Nellcor Puritan Bennett Inc. 100 6,438
Netcom Online Communications 100 2,425
Network Equipment Technologies 100 3,038
Network General Corp. 100 3,975
New Jersey Resources Corp. 100 2,888
New York Times Co. Class A 100 2,900
Newell Co. 100 2,675
Newfield Exploration Co. 100 3,050
Newmont Mining Corp. 100 5,663
</TABLE>
See accompanying Notes to Financial Statements.
F-161
<PAGE> 230
<TABLE>
<CAPTION>
SchwabFunds 25
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Nextel Communications Inc. 107 $ 2,013
Niagara Mohawk Power Corp. 100 663
Nl Industries Inc. (New) 200 2,650
Noble Drilling Corp. 300 3,713
Nordstrom Inc. 100 4,844
Norfolk Southn Corp. 100 8,500
North Fork Bancorporation 100 2,388
Northern States Power Co. 100 4,875
Northern Telecom Ltd 200 9,550
Northrop Grumman Corp. 100 6,363
Northwest Natural Gas Co. 100 3,200
Norwest Corp. 300 11,025
Novacare Inc. 200 1,400
Novell Inc. 300 4,031
Nu Kote Holding Inc. Class A 100 1,788
Nucor Corp. 100 5,913
Nynex Corp. 200 9,975
OEA, Inc. 100 3,650
OM Group Inc. 200 7,388
ONBANCorp, Inc. 100 3,481
Oak Industries Inc. 100 2,488
Oak Technology 200 4,225
Oakwood Homes Corp. 100 4,963
Occidental Petroleum Corp. 200 5,350
Octel Communications Corp. 100 4,825
Offshore Logistics, Inc. 100 1,331
Ohio Edison Co. 100 2,263
Old National Bancorp 100 3,338
Olympic Financial Ltd. 100 1,938
Omnicare Inc. 100 5,388
One Valley Bancorp West Virginia Inc. 100 3,150
Oneok Inc. 100 2,388
Oracle Systems Corp. 200 9,400
Orange & Rockland Utilities, Inc. 100 3,588
Orbital Sciences Corp. Class A 100 1,338
Oregon Steel Mills Inc. 100 1,413
Orion Capital Corp. 100 4,525
Otter Tail Power Co. 200 7,675
Outboard Marine Corp. 100 1,913
Overseas Shipholding Group 100 1,825
Owens & Minor Inc. (New) 100 1,200
P P & L Resources Inc. 100 2,438
PAXAR Corp. 100 1,588
</TABLE>
See accompanying Notes to Financial Statements.
F-162
<PAGE> 231
<TABLE>
<CAPTION>
SchwabFunds 26
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number Value
--------- -----
<S> <C> <C>
PDT Inc. 100 $ 5,988
PHH Corp. 100 5,563
PNC Bank Corp. 300 9,225
PPG Industries Inc. 200 9,775
Pacific Enterprises 100 2,588
Pacific Gas & Electric Co. 300 6,788
Pacific Telesis Group 500 13,813
Pacificorp 200 4,175
Pairgain Technologies Inc. 100 6,469
Pall Corp. 100 2,563
Panhandle Eastern Corp. 100 3,113
Papa John's International, Inc. 150 6,703
Parker & Parsley Petroleum Co. 100 2,300
Parker Drilling Co. 200 1,400
Parker Hannifin Corp. 100 3,750
Patterson Dental Co. 100 3,050
Paxson Communications Corp. 100 1,563
Peco Energy Co. 200 5,325
Penn Traffic Co. (New) 100 1,488
Penncorp Financial Group Inc. 100 3,150
Penney (J.C.) Inc. 200 9,950
Peoples Bank 100 2,138
Peoples Heritage Financial Group 100 2,175
Pepsico Inc. 500 31,625
Pfizer Inc. 400 26,800
Pharmacia & Upjohn Inc. 200 7,975
Phelps Dodge Corp. 100 6,863
Philip Morris Companies Inc. 600 52,650
Phillips Petroleum Co. 200 7,900
Phillips Van Heusen Corp. 100 1,175
Physician Corp. of America 100 1,594
Physician Reliance Network 100 3,963
Physician Sales & Service Inc. 100 2,500
Physicians Computer Network I 200 2,750
Piedmont Natural Gas Inc. 100 2,225
Pier 1 Imports Inc. 100 1,263
Pioneer Group Inc. 100 2,875
Pioneer HI Bred International Inc. 100 5,263
Pioneer Standard Electrs Inc. 100 1,519
Piper Jaffray Cos Inc. 100 1,375
Pitney Bowes Inc. 100 4,900
Pittway Corp. Class A 150 7,425
Placer Dome Inc. 200 5,775
</TABLE>
See accompanying Notes to Financial Statements.
F-163
<PAGE> 232
<TABLE>
<CAPTION>
SchwabFunds 27
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Players International Inc. 100 $ 956
Playtex Prods Inc. 200 1,450
Pogo Producing Co. 100 3,125
Polaris Industries Inc. 100 3,075
Praxair Inc. 100 3,988
Precision Castparts Corp. 100 4,000
Premark International, Inc. 100 5,363
Presidential Life Corp. 100 938
Presstek Inc. 100 10,844
Price Costco Inc. 100 1,881
Price Enterprises Inc. 100 1,588
Primadonna Resorts Inc. 100 1,556
Primark Corp. 100 3,700
Prime Hospitality Corp. 100 1,363
Procter & Gamble Co. 500 42,375
Progress Software Corp. 100 1,500
Provident Bancorp Inc. 100 5,013
Providian Corp. 100 4,463
Psinet Inc. 100 969
Public Service Co. of New Mexico 100 1,863
Public Service Co. of North Carolina Inc. 100 1,600
Public Service Enterprise Group 200 5,500
Pulitzer Publishing Co. 100 5,200
Pulte Corp. 100 2,688
Pyxis Corp. 200 5,150
Quaker Oats Co. 100 3,338
Quaker Saint Corp. 100 1,400
Quarterdeck Corp. 100 1,469
Quick & Reilly Group, Inc. 100 2,950
Quintiles Transnational Corp. 200 13,025
Ralcorp Holdings, Inc. 100 2,563
Ralston Purina Co. 100 6,688
Rational Software Corp. (New) 100 3,963
Raymond James Financial Inc. 100 2,250
Raytheon Co. 200 10,250
Reading & Bates Corp. (New) 200 3,950
Reebok International Ltd. 100 2,763
Regal Beloit Corp. 100 2,100
Regal Cinemas, Inc. 150 5,569
Regions Financial Corp. 76 3,339
Reinsurance Group America Inc. 100 3,663
Reliance Group Holdings Inc. 300 2,363
Renaissance Commerce Corp. 100 2,488
</TABLE>
See accompanying Notes to Financial Statements.
F-164
<PAGE> 233
<TABLE>
<CAPTION>
SchwabFunds 28
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Renal Treatment Centers Inc. 400 $ 9,500
Republic Industries Inc. 200 6,263
Republic New York Corp. 100 5,950
Respironics Inc. 100 2,119
Rexel Inc. 100 1,225
Reynolds Metals Co. 100 5,913
Richfood Holdings Inc. 100 2,813
Riggs National Corp. 100 1,231
Rio Hotel & Casino Inc. 100 1,525
Rite Aid Corp. 100 3,088
RoTech Medical Corp. 100 3,713
Robert Half International Inc. 100 4,863
Roberts Pharmaceutical Corp. 100 1,881
Rock Tennessee Co. Class A 100 1,700
Rockwell International Corp. 200 11,775
Rohm & Haas Co. 100 6,650
Rohr Industries Inc. 100 1,800
Rollins Truck Leasing Corp. 100 1,038
Rollins, Inc. 200 4,675
Roosevelt Financial Group Inc. 200 3,713
Roper Industries 100 4,550
Ross Stores Inc. 100 2,494
Rowan Cos Inc. 300 3,825
Royal Dutch Petroleum Co. 300 42,375
Rubbermaid Inc. 100 2,838
Ruddick Corp. 100 1,225
Russ Berrie & Co. Inc. 100 1,700
Ryans Family Steak Houses 200 1,813
Ryder Sys Inc. 100 2,725
S3 Inc. 200 2,400
SEI Corp. 100 2,263
SPS Transaction Services, Inc. 100 3,088
Safeco Corp. 200 6,713
Safeguard Scientifics Inc. 100 5,863
Saint Paul Bancorp Inc. 100 2,475
Salick Health Care, Inc. 200 7,675
Salomon Inc. 100 3,750
Sanifill Inc. 100 3,838
Santa Fe Pacific Gold Corp. 100 1,600
Sara Lee Corp. 500 16,313
Savannah Foods & Industries Inc. 100 1,088
Sbarro, Inc. 100 2,525
Sbc Communications Inc. 400 21,050
</TABLE>
See accompanying Notes to Financial Statements.
F-165
<PAGE> 234
<TABLE>
<CAPTION>
SchwabFunds 29
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Schering Plough Corp. 200 $11,625
Schlumberger Ltd 100 7,913
Schulman (A.), Inc. 100 2,131
Schweitzer Mauduit International Inc. 10 275
Scientific Games Holdings Corp. 100 2,725
Scotts Co. Class A 100 1,775
Seaboard Corp. 200 47,600
Seagate Technology, Inc. 88 4,818
Seagram Ltd 300 9,713
Seagull Energy Corp. 100 2,263
Sears Roebuck & Co. 200 9,750
Security Capital Corp. 100 5,813
Security Dynamics Tech 100 5,275
Selective Insurance Group, Inc. 100 3,575
Sepracor Inc. 100 1,475
Sequent Computer Systems, Inc. 100 1,175
Service Corp. International 100 4,875
Service Merchandise Co. Inc. 300 1,575
Sherwin Williams Co. 100 4,438
Shiva Corp. 100 9,100
Shoneys Inc. 100 900
Shopko Stores Inc. 100 1,400
Shorewood Packaging Corp. 100 1,531
Shurgard Storage Ctrs Inc. Class A 100 2,625
Sierra Health Services Inc. 100 3,263
Sierra On-Line Inc. 100 3,356
Sierra Pacific Resources 100 2,513
Sigcorp Inc. 100 3,488
Silicon Graphics Inc. 100 2,500
Silicon Valley Group Inc. 100 2,425
Sithe Energies Inc. 200 2,975
Smart & Final Inc. 100 2,475
Smith International Inc. 100 2,525
Smithfield Foods Inc. 100 2,888
Smucker (J.M.) Co. Class A 100 2,225
Snyder Oil Corp. 100 838
Sofamor/danek Group Inc. 100 3,388
Softkey International Inc. 100 2,013
Somatogen Inc. 100 1,744
Sonat Inc. 100 3,600
Sotheby's Holdings, Inc. Class A 100 1,463
South Jersey Industries Inc. 100 2,138
Southdown Inc. 100 2,363
</TABLE>
See accompanying Notes to Financial Statements.
F-166
<PAGE> 235
<TABLE>
<CAPTION>
SchwabFunds 30
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Southern Co. 500 $11,938
Southwest Airlines Co. 100 2,963
Southwest Gas Corp. 100 1,725
Southwestern Energy Co. 100 1,200
Sovereign Bancorp Inc. 105 1,155
Speedway Motorsports, Inc. 200 5,650
Spiegel, Inc. Class A 400 4,150
Sports Authority Inc. 100 2,738
Springs Industries Inc. 200 9,200
Sprint Corp. 300 11,400
St. John's Knits, Inc. 200 13,475
St. Jude Medical, Inc. 100 3,731
St. Paul Companies, Inc. 100 5,550
Standard Financial Inc. 100 1,463
Standard Prods Co. 100 2,438
Standard Register 100 2,413
Standex International Corp. 100 3,013
Stanhome Inc. 100 3,188
Station Casinos Inc. 100 1,175
Stein Mart Inc. 100 1,513
Steris Corp. 100 2,988
Sterling Chems Inc. 200 2,525
Stewart & Stevenson Services, Inc. 100 2,813
Stillwater Mining Co. 100 2,100
Stone & Webster, Inc. 100 3,288
Stone Container Corp. 100 1,400
Stratosphere Corp. 100 1,075
Stratus Computer Inc. 100 2,775
Stride Rite Corp. 200 1,825
Structural Dynamics Research Corp 100 3,363
Student Loan Corp. 100 3,863
Sumitomo Bank 100 2,575
Summit Bancorp 90 3,330
Summit Technology Inc. 150 3,572
Sun Healthcare Group Inc. 100 1,325
Sun Inc. 100 2,888
Sun Microsystems Inc. 200 8,763
Sunrise Medical Inc. 100 1,400
Sunshine Mining & Refining Co. 600 900
Suntrust Bks Inc. 100 7,000
Superior Industries International, Inc. 100 2,500
Swift Transportation Inc. 100 1,775
Synetic Inc. 100 3,788
</TABLE>
See accompanying Notes to Financial Statements.
F-167
<PAGE> 236
<TABLE>
<CAPTION>
SchwabFunds 31
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Sysco Corp. 100 $ 3,288
TCA Cable TV Inc. 100 2,900
TJ International Inc. 100 1,550
TNT Freightways Corp. 100 2,288
TRINOVA Corp. 400 12,750
TRW Inc. 100 8,913
Tandem Computers Inc. 100 888
Tandy Corp. 100 4,625
Target Therapeutics Inc. 200 12,138
Tech Data Corp. 100 1,669
Tecnol Medical Products Inc. 100 1,775
Tejas Gas Corp. 100 4,888
Tele Communications Inc. (New) - Tci Group Series
A 500 9,281
Teledyne Inc. 100 2,800
Teleflex Inc. 100 4,513
Tellabs Inc. 100 4,838
Temple-Inland Inc. 100 4,688
Tencor Instrs 100 1,806
Tenet Healthcare Corp. 100 2,100
Tenneco Inc. 200 11,175
Texaco Inc. 200 17,200
Texas Industries Inc. 100 6,363
Texas Instruments Inc. 200 10,175
Texas Utilities Co. 200 8,275
Textron Inc. 100 8,000
Theratx Inc. 100 1,194
Thermedics Inc. 100 2,825
Thiokol Corp. 100 4,388
Tiffany & Co. (New) 100 5,675
Time Warner Inc. 300 12,263
Times Mirror Co. (New) Series A 100 3,938
Titan Wheel International Inc. 100 1,650
Toll Brothers, Inc. 100 1,725
Topps Inc. 100 544
Torchmark Corp. 100 4,500
Toro Co. 200 6,425
Toy Biz Inc. Class A 100 1,788
Toys "R" Us, Inc. 200 5,400
Transamerica Corp. 100 7,488
Travelers Group Inc. 200 13,200
TriMas Corp. 200 4,400
Triarc Cos., Inc. Class A 100 1,250
</TABLE>
See accompanying Notes to Financial Statements.
F-168
<PAGE> 237
<TABLE>
<CAPTION>
SchwabFunds 32
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Tribune Co. (New) 100 $ 6,588
Trident Microsystems Inc. 100 1,444
Trimble Navigation Ltd 100 2,275
True North Communications 100 2,500
Trust Company of New Jersey 100 1,350
Trustco Bank Corp. NY 100 2,075
Trustmark Corp. 100 2,275
Tuscon Electric Power Co. 500 1,438
Tyco Interest Ltd 100 3,575
U S Filter Corp. (New) 100 2,800
U S Order Inc. 100 2,025
U S WEST, Inc. (Communications Group) 400 12,950
U S West Inc. (Media Group) 300 6,188
U.S. Bancorp 100 3,413
U.S. Healthcare, Inc. 100 4,606
U.S.A. Waste Services Inc. 200 5,100
UGI Corp. (New) 100 2,125
UNR Industries, Inc. 200 1,613
UNUM Corp. 100 5,950
USAir Group, Inc. 200 3,650
USF&G Corp. 100 1,550
UST Corp. 100 1,350
UST Inc. 100 3,188
USX Corp. (Marathon Group) (New) 200 3,850
USX Corp. (U.S. Steel Group) 100 3,463
Ultratech Stepper Inc. 100 1,750
Umb Financial Corp. 110 4,111
Unicom Corp. 300 8,100
Unifirst Corp. 100 1,888
Union Camp Corp. 100 4,963
Union Carbide Corp. 100 4,963
Union Electric Co. 100 4,100
Union Pacific Corp. 200 13,725
Uniroyal Chemical Corp. 100 950
United Carolina Bancshares Corp. 150 3,675
United Companies Financial Corp. 100 3,200
United Healthcare Corp. 300 18,450
United Illuminating Co. 100 3,688
United Insurance Companies, Inc. 100 2,194
United International Holdings Inc. Class A 100 1,625
United Meridian Corp. 100 2,388
United Technologies Corp. 100 11,225
United Television Inc. 100 8,950
</TABLE>
See accompanying Notes to Financial Statements.
F-169
<PAGE> 238
<TABLE>
<CAPTION>
SchwabFunds 33
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
United Waste Systems, Inc. 100 $ 4,950
United Water Resources Inc. 100 1,313
Universal Health Services Inc. Class B 100 5,313
Unocal Corp. 200 6,675
V.F. Corp. 100 5,525
Valassis Communications Inc. 100 1,663
Valhi, Inc. 500 3,063
Valley National Bancorp 100 2,775
Vanguard Cellular Systems, Inc. Class A 200 4,038
Varco International Inc. 100 1,213
Ventritex Inc. 100 1,531
Verifone Inc. 100 4,200
Vertex Pharmaceuticals Inc. 100 2,675
Vesta Insurance Group Inc. 150 4,894
Viacom Inc. Class B 300 12,638
Vicor Corp. 200 3,000
Vintage Petroleum Inc. 100 2,038
Visx Inc. Delaware 100 3,625
Vivra Inc. 150 4,313
WLR Foods, Inc. 100 1,331
WMS Industries Inc. 100 1,738
WMX Technologies Inc. 500 15,875
Waban Inc. 100 2,625
Wabash National Corp. 100 1,888
Wachovia Corp. (New) 100 4,475
Wal-Mart Stores, Inc. 1,600 37,000
Walgreen Co. 200 6,525
Wang Laboratories Inc. (New) 100 2,369
Warner Lambert Co. 100 10,325
Washington Energy Co. 100 2,050
Watts Industries Inc. Class A 100 1,988
Wausau Paper Mills Co. 125 2,906
Weatherford Enterra Inc. 200 6,975
Webb Delaware Corp. 100 1,838
Wellman Inc. 100 2,350
Wells Fargo & Co. 100 26,100
Wendy's International, Inc. 100 1,813
Werner Enterprises Inc. 100 2,375
West Inc. 100 2,325
Westamerica Bancorp 200 9,425
Westcorp Inc. 100 1,850
Westcott Communications Inc. 100 1,763
Western Atlas, Inc. 100 6,000
</TABLE>
See accompanying Notes to Financial Statements.
F-170
<PAGE> 239
<TABLE>
<CAPTION>
SchwabFunds 34
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
Western Gas Resources Inc. 100 $ 1,438
Westinghouse Air Brake Co. (New) 100 1,075
Westinghouse Electric Corp. 300 5,775
Westpoint Stevens Inc. Class A 100 1,938
Westvaco Corp. 100 2,938
Westwood One Inc. 100 1,850
Weyerhaeuser Co. 200 9,225
Whirlpool Corp. 100 5,525
Whitman Corp. 100 2,425
Whitney Holding Corp. 100 3,113
Whx Corp. 100 1,125
Wicor Inc. 100 3,375
Willamette Industries, Inc. 100 6,000
Williams Cos Inc. 100 5,038
Williams Sonoma Inc. 100 2,256
Winn Dixie Stores Inc. 200 6,725
Wm Wrigley Junior Co. 100 5,863
Wolverine Tube Inc. 200 8,125
Wolverine World Wide Inc. 100 2,800
Woolworth Corp. 100 1,563
Worldcom Inc. 200 9,213
Worthington Industries Inc. 100 1,994
Wps Resources Corp. 100 3,363
Wyle Laboratories 100 3,463
Wyman Gordon Co. 100 1,700
X-Rite, Inc. 100 1,475
XTRA Corp. 100 4,675
Xerox Corp. 100 12,550
Yellow Corp. 100 1,263
Zale Corp. (New) 100 1,719
Zebra Technologies Corp. Class A 200 5,250
Zeigler Coal Holding Co. 100 1,450
Zenith Electronics Corp. 100 663
Zenith National Insurance Corp. 100 2,388
Zions Bancorp 100 7,100
----------
6,064,529
----------
TOTAL COMMON STOCK
(Cost $7,820,889) 8,346,573
----------
</TABLE>
See accompanying Notes to Financial Statements.
F-171
<PAGE> 240
<TABLE>
<CAPTION>
SchwabFunds 35
- --------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Number
of Shares Value
--------- -----
<S> <C> <C>
PREFERRED STOCK--0.1%
AUSTRALIA--0.0%
News Corp. (Limited Voting Shares) 386 $ 1,961
------------
GERMANY--0.1%
Henkel KGaA 9 3,353
Lufthansa AG (Non-Voting) 12 1,735
RWE AG (Non Voting) 70 2,117
Sap AG (Non-Voting) 24 3,456
Volkswagen AG (Non Voting) 6 1,528
------------
12,189
------------
ITALY--0.0%
Fiat Finance SpA 701 1,281
------------
UNITED STATES--0.0%
Teledyne, Inc. Preferred Series E 1 15
------------
TOTAL PREFERRED STOCK
(Cost $15,289) 15,446
------------
<CAPTION>
Par
---
U.S. TREASURY OBLIGATIONS--53.4%
U.S. Treasury Bonds
10.00%, 05/15/10 $ 300,000 370,662
7.25%, 05/15/16 2,620,000 2,736,171
8.13%, 08/15/19 325,000 372,083
7.13%, 02/15/23 500,000 515,480
6.25%, 08/15/23 775,000 716,883
U.S. Treasury Notes
5.88%, 05/31/96 200,000 200,188
6.25%, 01/31/97 800,000 805,456
5.63%, 10/31/97 1,100,000 1,098,537
5.13%, 02/28/98 150,000 148,292
5.88%, 08/15/98 800,000 800,544
5.00%, 02/15/99 600,000 586,188
7.00%, 04/15/99 300,000 308,628
7.50%, 10/31/99 500,000 523,165
7.13%, 02/29/00 200,000 207,232
5.75%, 10/31/00 1,050,000 1,034,607
</TABLE>
See accompanying Notes to Financial Statements.
F-172
<PAGE> 241
<TABLE>
<CAPTION>
SchwabFunds 36
- ------------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- ------------------------------------------------------------------------------------
<CAPTION>
Par Value
--- -----
<S> <C> <C>
U.S. Treasury Notes
6.38%, 08/15/02 $ 525,000 $ 528,355
6.50%, 05/15/05 150,000 150,906
6.50%, 08/15/05 650,000 654,466
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $12,069,501) 11,757,843
------------
AGENCY OBLIGATIONS--COUPON NOTES--1.8%
Federal National Mortgage Assoc.
7.250%, 06/01/05 400,000 403,000
------------
TOTAL AGENCY OBLIGATIONS--COUPON NOTES
(Cost $403,994) 403,000
------------
SHORT-TERM INVESTMENTS--6.3%
AGENCY OBLIGATIONS--DISCOUNT NOTES--4.2%
Federal National Mortgage Assoc.
5.21%, 04/11/96 250,000 249,921
5.12%, 04/29/96 675,000 672,030
------------
921,951
------------
</TABLE>
See accompanying Notes to Financial Statements.
F-173
<PAGE> 242
<TABLE>
<CAPTION>
SchwabFunds 37
- ------------------------------------------------------------------------------------
Schwab Asset Director-Conservative Growth Fund
Statement of Net Assets
March 31, 1996
(Unaudited)
- ------------------------------------------------------------------------------------
Par Value
--- -----
<S> <C> <C>
REPURCHASE AGREEMENT--2.1%
UNITED STATES
State Street Bank
4.75%, 04/01/96 $ 461,000 $ 461,000
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,382,978) 1,382,951
------------
TOTAL INVESTMENTS -- 99.5%
(Cost $21,692,651) 21,905,813
OTHER ASSETS AND LIABILITIES -- 0.5%
Other Assets 320,763
Liabilities (210,522)
------------
110,241
------------
NET ASSETS -- 100.0%
Applicable to 2,161,834 outstanding $0.00001 par
value shares (unlimited shares authorized) $ 22,016,054
============
NET ASSET VALUE PER SHARE $10.18
======
- ------------
*Non-Income Producing Security
</TABLE>
See accompanying Notes to Financial Statements.
F-174
<PAGE> 243
SchwabFunds(R)
- --------------------------------------------------------------------------------
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND,
SCHWAB ASSET DIRECTOR - BALANCED GROWTH FUND,
SCHWAB ASSET DIRECTOR - CONSERVATIVE GROWTH FUND,
STATEMENTS OF OPERATIONS
For the period November 20, 1995 (commencement of operations) to March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------Schwab Asset Director--------------
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
------------ ------------ ------------
<S> <C> <C> <C>
Investment income:
Dividends (net of foreign tax withheld of
$14,068, $7,667 and $1,770, respectively) $ 432,233 $ 227,924 $ 53,949
Interest 333,080 463,464 235,683
------------ ------------ ------------
Total investment income 765,313 691,388 289,632
------------ ------------ ------------
Expenses:
Investment advisory and administration fee 208,879 148,632 51,725
Transfer agency and shareholder service fees 70,568 50,213 17,474
Custodian fees 132,715 115,131 85,816
Registration fees 33,672 27,175 14,533
Professional fees 14,414 13,595 12,270
Shareholder reports 17,434 12,439 4,481
Trustees' fees 3,771 2,866 1,270
Amortization of deferred organization costs 1,330 1,330 1,330
Insurance and other expenses 2,403 2,224 2,044
------------ ------------ ------------
485,186 373,605 190,943
Less expenses reduced and absorbed (233,967) (194,844) (128,732)
------------ ------------ ------------
Total expenses incurred by Fund 251,219 178,761 62,211
------------ ------------ ------------
Net investment income 514,094 512,627 227,421
------------ ------------ ------------
Net realized gain (loss) on investments and foreign currency translations:
Proceeds from sales of investments 21,416,467 12,283,425 4,737,127
Cost of investments sold (21,210,972) (12,204,551) (4,685,840)
------------ ------------ ------------
Net realized gain on investments from changes in market value 205,495 78,874 51,287
Net realized gain (loss) on investments from
changes in foreign exchange rates 19 (19) (6)
------------ ------------ ------------
Net realized gain on investments sold 205,514 78,855 51,281
Net realized gain (loss) on foreign currency transactions 3,953 1,707 (100)
Net realized gain on investments sold and
foreign currency transactions 209,467 80,562 51,181
</TABLE>
(Continued on next page)
See accompanying Notes to Financial Statements.
F-175
<PAGE> 244
SchwabFunds(R)
- --------------------------------------------------------------------------------
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND,
SCHWAB ASSET DIRECTOR - BALANCED GROWTH FUND,
SCHWAB ASSET DIRECTOR - CONSERVATIVE GROWTH FUND,
STATEMENTS OF OPERATIONS (Continued)
For the period November 20, 1995 (commencement of operations) to March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------Schwab Asset Director------------
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
----------- ----------- ------------
<S> <C> <C> <C>
Change in net unrealized gain (loss) on investments and
foreign currency transactions:
Changes in market value:
Beginning of period unrealized gain $ -- $ -- $ --
End of period unrealized gain 4,283,874 2,030,694 277,619
----------- ----------- ---------
Net unrealized gain in market value 4,283,874 2,030,694 277,619
Changes in foreign exchange rates:
Beginning of period unrealized gain -- -- --
End of period unrealized loss (459,608) (251,539) (64,457)
----------- ----------- ---------
Net unrealized loss in foreign exchange rates (459,608) (251,539) (64,457)
----------- ----------- ---------
Net unrealized gain on investments from changes in
market value and foreign exchange rates 3,824,266 1,779,155 213,162
Net unrealized gain (loss) on translating assets and liabilities
into the reporting currency (262) (72) 26
----------- ----------- ---------
Net unrealized gain on investments and
foreign currency translation 3,824,004 1,779,083 213,188
Net gain on investments 4,033,471 1,859,645 264,369
----------- ----------- ---------
Increase in net assets resulting from operations $ 4,547,565 $ 2,372,272 $ 491,790
=========== =========== =========
</TABLE>
See accompanying Notes to Financial Statements.
F-176
<PAGE> 245
SchwabFunds(R)
- --------------------------------------------------------------------------------
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND,
SCHWAB ASSET DIRECTOR - BALANCED GROWTH FUND,
SCHWAB ASSET DIRECTOR - CONSERVATIVE GROWTH FUND,
STATEMENTS OF CHANGES IN NET ASSETS
For the period November 20, 1995 (commencement of operations) to March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------Schwab Asset Director---------------
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
------------ ------------ ------------
<S> <C> <C> <C>
Operations:
Net investment income $ 514,094 $ 512,627 $ 227,421
Net realized gain on investments sold and
foreign currency transactions 209,467 80,562 51,181
Net unrealized gain on investments and
foreign currency translation 3,824,004 1,779,083 213,188
------------ ------------ ------------
Increase in net assets resulting from operations 4,547,565 2,372,272 491,790
------------ ------------ ------------
Dividends to shareholders from net investment income (158,402) (150,875) (214,428)
------------ ------------ ------------
Capital share transactions:
Proceeds from shares sold 91,562,997 66,244,503 23,320,718
Net asset value of shares issued in reinvestment of dividends 152,275 138,204 193,730
Less payments for shares redeemed (6,095,744) (3,676,729) (1,776,756)
------------ ------------ ------------
Increase in net assets from capital share transactions 85,619,528 62,705,978 21,737,692
------------ ------------ ------------
Total increase in net assets 90,008,691 64,927,375 22,015,054
Net Assets:
Beginning of period 1,000 1,000 1,000
------------ ------------ ------------
End of period (including undistributed net investment
income of $355,692, $361,752 and $12,993, respectively) $ 90,009,691 $ 64,928,375 $ 22,016,054
============ ============ ============
Number of Fund shares:
Sold 9,066,655 6,565,543 2,317,327
Reinvested 14,842 13,523 19,030
Redeemed (586,900) (356,320) (174,623)
------------ ------------ ------------
Net increase in shares outstanding 8,494,597 6,222,746 2,161,734
Shares outstanding:
Beginning of period 100 100 100
------------ ------------ ------------
End of period 8,494,697 6,222,846 2,161,834
============ ============ ============
</TABLE>
See accompanying Notes to Financial Statements.
F-177
<PAGE> 246
SchwabFunds(R)
- --------------------------------------------------------------------------------
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND,
SCHWAB ASSET DIRECTOR - BALANCED GROWTH FUND &
SCHWAB ASSET DIRECTOR - CONSERVATIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
For the period November 20, 1995 (commencement of operations) to March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE FUNDS
The Schwab Asset Director - High Growth Fund, Schwab Asset Director - Balanced
Growth Fund and Schwab Asset Director Conservative Growth Fund (the "Funds") are
series of Schwab Capital Trust (the "Trust"), a no-load, open-end management
investment company organized as a Massachusetts business trust on May 7, 1993
and registered under the Investment Company Act of 1940, as amended.
In addition to the three Funds described above, the Trust also offers - the
Schwab International Index Fund(TM), Schwab Small-Cap Index Fund(R) and Schwab
S&P 500 Fund. The assets of each series are segregated and accounted for
separately.
The investment objective of the Schwab Asset Director - High Growth Fund (the
"High Growth Fund") is to provide high capital growth with less volatility than
an all-stock portfolio. The investment objective of the Schwab Asset Director
Balanced Growth Fund (the "Balanced Growth Fund") is to provide a maximum total
return including both capital growth and income. The investment objective of the
Schwab Asset Director - Conservative Growth Fund (the "Conservative Growth
Fund") is to provide income and more growth potential than an all-bond
portfolio. Each Fund invests in a diversified mix of stocks, bonds and
cash-equivalents.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in conformity with generally
accepted accounting principles for investment companies. 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 in securities traded on an exchange are valued
at the last quoted sale price for a given day, or if a sale is not reported for
that day, at the mean between the most recent quoted bid and asked prices.
Unlisted securities for which market quotations are readily available are valued
at the mean between the most recent bid and asked prices. Securities for which
no quotations are readily available are valued at fair value as determined in
good faith by the Funds' investment manager pursuant to Board of Trustees'
guidelines. Bonds and notes are generally valued at prices obtained from an
independent bond-pricing service. These securities are valued at the mean
between the representative quoted bid and asked prices, or if such prices are
not available, at prices for securities of comparable maturity, quality and
type. Short-term securities with 60 days or less to maturity are stated at
amortized cost, which approximates market value.
Security transactions and investment income - Security transactions are
accounted for on a trade date basis (date the order to buy or sell is executed).
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis 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. For callable bonds purchased at a premium, the excess of the purchase
price over the call value is amortized against interest income through the call
date. If the call provision is not exercised, any remaining premium is amortized
through the final maturity date.
F-178
<PAGE> 247
SchwabFunds(R)
- --------------------------------------------------------------------------------
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND,
SCHWAB ASSET DIRECTOR - BALANCED GROWTH FUND &
SCHWAB ASSET DIRECTOR - CONSERVATIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
For the period November 20, 1995 (commencement of operations) to March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Repurchase agreements - Repurchase agreements are fully collateralized by U.S.
Treasury or government agency securities. All collateral is held by the Funds'
custodian and is monitored daily to ensure that its market value at least equals
the repurchase price under the agreement.
Foreign currency translation - The accounting records of the Funds are
maintained in U.S. dollars. Investment securities and all other assets and
liabilities of the Funds denominated in a foreign currency are translated into
U.S. dollars at the exchange rates on March 31, 1996. Purchases and sales of
foreign securities, foreign income receipts and foreign expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Funds separate within their statement of operations the portion of realized
and unrealized gains and losses resulting from changes in foreign exchange rates
from that arising from changes in securities' market values.
Forward currency contracts - A forward currency contract ("Forward") is an
agreement between two parties to buy and sell a currency at a set price on a
future date. The value of the Forward fluctuates with changes in currency
exchange rates. The Forward is marked-to-market daily and the change in value is
recorded by the Funds as an unrealized gain or loss. When the Forward is closed,
the Funds record a realized gain or loss equal to the difference between the
value at the time the contract was opened and the value at the time the contract
was closed. The Funds engage in Forwards in connection with the purchase and
sale of portfolio securities to minimize the uncertainty of changes in future
exchange rates.
Deferred organization costs - Costs incurred in connection with the organization
of the Funds are amortized on a straight-line basis over a five-year period from
each Fund's commencement of operations.
Expenses - Expenses arising in connection with a Fund are charged directly to
that Fund. Expenses common to all series of the Trust are allocated to each
series in proportion to their relative net assets.
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 substantially 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 March 31, 1996, (for financial reporting and federal income tax purposes),
for High Growth Fund, Balanced Growth Fund and Conservative Growth Fund net
unrealized gain aggregated $3,824,266, $1,779,155 and $213,162, respectively, of
which $5,960,037, $3,268,231 and $741,299, respectively, related to appreciated
securities and $2,135,771, $1,489,076 and $528,137, respectively, related to
depreciated securities.
F-179
<PAGE> 248
SchwabFunds(R)
- --------------------------------------------------------------------------------
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND,
SCHWAB ASSET DIRECTOR - BALANCED GROWTH FUND &
SCHWAB ASSET DIRECTOR - CONSERVATIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
For the period November 20, 1995 (commencement of operations) to March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
3. TRANSACTIONS WITH AFFILIATES
Investment advisory and administration agreement - The Trust has an investment
advisory and administration agreement with Charles Schwab Investment Management,
Inc. (the "Investment Manager"). For advisory services and facilities furnished,
each Fund pays an annual fee, payable monthly, of .74% of each Fund's average
daily net assets not in excess of $1 billion, .69% of such assets over $1
billion and .64% of such assets over $2 billion. Under this agreement, the High
Growth Fund, Balanced Growth Fund and Conservative Growth Fund incurred
investment advisory and administration fees of $208,879, $148,632 and $51,725,
respectively, for the period ended March 31, 1996, before the Investment Manager
reduced its fee (see Note 4).
Sub-advisory agreement - The Investment Manager has a sub-advisory agreement
with Symphony Asset Management, Inc. ("Symphony") to serve as sub-adviser to the
Funds. Symphony does not receive compensation directly from the Funds. However,
the Investment Manager pays Symphony an annual fee, payable monthly, of .08% of
the Funds' aggregate average net assets on the first $100 million, .06% of the
next $150 million, .04% of the next $600 million and .02% of such aggregate net
assets over $850 million.
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 .05% of each Fund's average daily net assets for
transfer agency services and .20% of such assets for shareholder services. For
the period ended March 31, 1996, the High Growth Fund, Balanced Growth Fund and
Conservative Growth Fund incurred transfer agency and shareholder service fees
of $70,568, $50,213 and $17,474, respectively, before Schwab reduced its fees
(see Note 4).
Officers and trustees - Certain officers and trustees of the Trust are also
officers and/or directors of the Investment Manager and/or Schwab. During the
period ended March 31, 1996, the Trust made no direct payments to its officers
or trustees who were "interested persons" within the meaning of the Investment
Company Act of 1940, as amended. The High Growth Fund, Balanced Growth Fund and
Conservative Growth Fund incurred fees aggregating $7,907 related to the Trust's
unaffiliated trustees.
4. EXPENSES REDUCED AND ABSORBED BY THE INVESTMENT MANAGER AND SCHWAB
The Investment Manager and Schwab reduced a portion of their fees and absorbed
certain expenses in order to limit each Fund's ratio of operating expenses to
average net assets. For the period ended March 31, 1996, the total of such fees
and expenses reduced and absorbed by the Investment Manager were $164,148,
$144,631 and $111,258 for the High Growth Fund, Balanced Growth Fund and
Conservative Growth Fund, respectively, and the total of such fees reduced by
Schwab was $69,819, $50,213 and $17,474 for the High Growth Fund, Balanced
Growth Fund and Conservative Growth Fund, respectively.
F-180
<PAGE> 249
SchwabFunds(R)
- --------------------------------------------------------------------------------
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND,
SCHWAB ASSET DIRECTOR - BALANCED GROWTH FUND &
SCHWAB ASSET DIRECTOR - CONSERVATIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
For the period November 20, 1995 (commencement of operations) to March 31, 1996
(Unaudited)
- --------------------------------------------------------------------------------
5. BORROWING AGREEMENT
The Trust has an agreement with State Street Bank and Trust Company, the Fund's
custodian, whereby each Fund may borrow up to $10,000,000, on a temporary basis,
to fund redemptions. Amounts borrowed under this arrangement bear interest at
periodically negotiated rates and may be collateralized by the assets of the
Fund. During the period ended March 31, 1996, no borrowings were made under this
arrangement.
6. INVESTMENT TRANSACTIONS
Purchases, sales and maturities of investment securities, other than short-term
obligations, for the period ended March 31, 1996, were as follows (in
thousands):
<TABLE>
<CAPTION>
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
------------------ ----------------- -----------------
<S> <C> <C> <C>
Purchases $105,579,829 $74,430,188 $25,923,172
Proceeds of sales and maturities $ 21,416,468 $12,283,425 $ 4,737,127
</TABLE>
7. COMPOSITION OF NET ASSETS
At March 31, 1996, net assets for each Fund consisted of:
<TABLE>
<CAPTION>
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
------------ ------------ ------------
<S> <C> <C> <C>
Capital paid in $ 85,620,528 $ 62,706,978 $21,738,692
Accumulated undistributed net investment income 355,692 361,752 12,993
Accumulated net realized gain on investments
sold and foreign currency transactions 209,467 80,562 51,181
Net unrealized gain on investments 3,824,266 1,779,155 213,162
Net unrealized gain (loss) on translating assets
and liabilities into the reporting currency (262) (72) 26
------------ ------------ -----------
$ 90,009,691 $ 64,928,375 $22,016,054
============ ============ ===========
</TABLE>
At March 31, 1996, the High Growth Fund's Statement of Net Assets included
liabilities of $51,237 for Fund shares redeemed, $7,585 for investment advisory
and administration fee and a receivable of $252,300 for Fund shares sold. The
Balanced Growth Fund's Statement of Net Assets included a payable of $40,162 for
Fund shares redeemed and receivables of $176,572 for Fund shares sold and $474
for investment advisory fees waived. The Conservative Growth Fund's Statement of
Net Assets included a payable of $69,800 for Fund shares redeemed and
receivables of $17,700 for Fund shares sold and $18,883 for investment advisory
fees waived.
F-181
<PAGE> 250
SchwabFunds(R)
SCHWAB ASSET DIRECTOR(R) - HIGH GROWTH FUND,
SCHWAB ASSET DIRECTOR - BALANCED GROWTH FUND &
SCHWAB ASSET DIRECTOR - CONSERVATIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
For the period November 20, 1995 (commencement of operations) to March 31, 1996
(Unaudited)
9. FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the
period from November 20, 1995 (commencement of operations) to March 31, 1996:
<TABLE>
<CAPTION>
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
----------- ----------- ------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 10.00 $ 10.00 $ 10.00
Income from investment operations
Net investment income .06 .09 .12
Net realized and unrealized gain on investments and
foreign currency transactions .56 .37 .17
----------- ----------- -----------
Total from investment operations .62 .46 .29
Less distributions
Dividends from net investment income (.02) (.03) (.11)
Distributions from realized gain on investments -- -- --
----------- ----------- -----------
Total distributions (.02) (.03) (.11)
----------- ----------- -----------
Net asset value at end of period $ 10.60 $ 10.43 $ 10.18
=========== =========== ===========
Total return (%) 6.23 4.60 2.87
Ratios/Supplemental data
Net assets, end of period $90,009,691 $64,928,375 $22,016,054
Ratio of expenses to average net assets (%) .89* .89* .89*
Ratio of net investment income to
average net assets (%) 1.82* 2.55* 3.25*
Portfolio turnover rate (%) 31 24 27
Average commission rate $ .02 $ .02 $ .02
</TABLE>
The Investment Manager and Schwab have reduced a portion of their fees and
absorbed certain expenses in order to limit each Fund's ratio of operating
expenses to average net assets. Had these fees and expenses not been reduced and
absorbed, the ratio of expenses to average net assets and the ratio of net
investment income to average net assets for the High Growth Fund for the period
ended March 31, 1996, would have been 1.72%* and .99%*, respectively. With
respect to the Balanced Growth Fund, the ratio of expenses to average net assets
and the ratio of net investment income to average net assets for the period
ended March 31, 1996 would have been 1.86%* and 1.58%*, respectively. With
respect to the Conservative Growth Fund the ratio of expenses to average net
assets and the ratio of net investment income to average net assets for the
period ended March 31, 1996 would have been 2.73%* and 1.41%*, respectively.
* Annualized
F-182
