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<PAGE> 1
SchwabFunds
Schwab
Asset Director
Funds
[Graphic - The Schwab Building, San Francisco, California]
Annual Report
October 31, 1996
<PAGE> 2
Dear Shareholder,
It's been an exciting year at SchwabFunds(R). With the support of
[Photo of investors like you, the SchwabFunds Family(R) continues to rank
Charles R. among the largest and fastest-growing mutual fund complexes in
Schwab] the nation. In total, Charles Schwab Investment Management, Inc.
(CSIM), manages over $40 billion in assets for approximately 2.5
million shareholders. Today CSIM offers investors 30 funds
spanning a spectrum of financial markets and investing styles.
You'll find in-depth information on the performance of your SchwabFunds
investment in the following pages.
SMART NEW WAYS TO DIVERSIFY YOUR PORTFOLIO
Now more than ever, investors tell us they're looking for new ways to diversify
their portfolios in order to manage risk and enhance return potential. But with
literally thousands of mutual funds to choose from, analyzing and selecting
funds can be an overwhelming task. That's why we've introduced the new Schwab
OneSource Portfolios -- three "funds of funds" that span both U.S. and
international markets. Each OneSource Portfolio is actively managed by an
experienced portfolio manager who invests in a variety of mutual funds from
well-known fund families, monitors their performance and adjusts the portfolio
mix in response to changes in the markets. So you can get diversification not
only across asset classes -- stocks, bonds and cash -- but among different funds
and investing styles too.
OPENING NEW CHANNELS OF COMMUNICATION
If you're among the millions of people exploring the Internet, I encourage you
to visit our Web site at WWW.SCHWAB.COM. There you'll find a wealth of online
information about SchwabFunds as well as a wide range of investments and
resources available from Schwab. You can access the latest mutual fund
performance data, request a free fund prospectus, trade funds and more -- all
from the comfort of your home or office, 24 hours a day. It's just one more way
we're harnessing the latest technology to make investing easier and more
convenient.
Thank you for placing your trust in SchwabFunds. In the year ahead, we'll
continue working to provide you with an expanding range of investment
opportunities to meet your needs.
/s/ Charles R. Schwab
----------------------------
Charles R. Schwab
Cover: The Schwab Building, San Francisco, California
<PAGE> 3
KEEP YOUR
MONEY WORKING
HARDER!
----------------------------------
USE THIS ENVELOPE TO EASILY ADD TO
YOUR SCHWABFUNDS:
CHARLES SCHWAB
<PAGE> 4
WE'VE MADE IT EASIER FOR YOU! TAKE ADVANTAGE OF THIS OPPORTUNITY TO ADD TO YOUR
SCHWABFUNDS(R) INVESTMENT.
Now, you can add to your account by payroll check using Schwab's free
using this convenient Schwab investment Automatic Investment Plan (AIP). 1 If
envelope. It's a simple, easy way to you'd like more information on AIP,
increase your investment. You can also just check the appropriate box on the
have money transferred to your fund coupon. We'll send you everything you
directly from your bank account or need to get started.
DON'T DELAY. USE THIS CONVENIENT INVESTMENT ENVELOPE AND SEND YOUR CHECK TODAY!
1 The Automatic Investment Plan does not ensure profit or protect against loss
in declining markets.
- --------------------------------------------------------------------------------
PLEASE DETACH HERE.
SCHWABFUNDS(R) ----------------------------------------
INVESTMENT COUPON SCHWAB ACCOUNT NUMBER
- --------------------------------------
Please enclose your check and this PLEASE INDICATE TO WHICH SCHWABFUND YOUR
completed investment coupon in the INVESTMENT SHOULD GO:
attached postage-paid envelope.
[ ] Schwab S&P 500 Fund
- -------------------------------------- [ ] Schwab Analytics Fund(TM)
NAME [ ] Schwab Small-Cap Index Fund(R)
[ ] Schwab International Index Fund(R)
$ [ ] Schwab OneSource Portfolios--
- -------------------------------------- International
AMOUNT OF INVESTMENT* [ ] Schwab Asset Director(R)--High
Growth Fund
- -------------------------------------- [ ] Schwab Asset Director(R)--Balanced
SIGNATURE Growth Fund
[ ] Schwab Asset Director(R)--
[ ] Check here if you would like more Conservative Growth Fund
investment coupons for future use.
IF NO FUND IS INDICATED, YOUR
[ ] Check here if you would like more INVESTMENT WILL GO INTO THE SWEEP
information on Schwab's Automatic ACCOUNT YOU'VE DESIGNATED.
Investment Plan (AIP).
----------------------------------------
*THIS ENVELOPE MAY NOT BE USED FOR (LIFT HERE FOR MORE INFORMATION)
INITIAL INVESTMENTS. SUBSEQUENT ----------------------------------------
INVESTMENT MINIMUM IS $100.
(C)1996 Charles Schwab & Co., Inc. All
rights reserved. Member SIPC/NYSE.
Printed on recycled paper. TF4447(12/96)
CRS 12012
<PAGE> 5
CharlesSchwab
JUST FOLLOW THESE EASY STEPS TO INVEST IN YOUR SCHWABFUNDS(R) ACCOUNT:
1. Fill out the Schwab investment coupon completely,
including your name, account number, amount of
your check and signature. Please use one coupon THIS ENVELOPE IS
for each account. INTENDED FOR
SHAREHOLDERS WHO HAVE
2. Make your check payable to CHARLES SCHWAB & CO., ALREADY RECEIVED A
Inc., and enclose your check with the completed CURRENT SCHWABFUNDS
coupon in this postage-paid envelope. PROSPECTUS.
3. Then just drop your SchwabFunds investment
envelope in the mail today--and start putting
your money to work! If you have any questions,
don't hesitate to call 1-800-2 NO-LOAD.
<PAGE> 6
Attn: Dept. AIP 333-1
--------------
NO POSTAGE
NECESSARY IF
MAILED IN THE
UNITED STATES
--------------
-------------------------------------
BUSINESS REPLY MAIL
FIRST-CLASS MAIL PERMIT NO. 18125 [BAR CODE]
SAN FRANCISCO, CA
-------------------------------------
POSTAGE WILL BE PAID BY ADDRESSEE
CHARLES SCHWAB & CO INC
PO BOX 7778
SAN FRANCISCO CA 94120-9419
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<S> <C>
A WORD FROM SCHWABFUNDS .......................................... 2
PERFORMANCE ...................................................... 3
NET ASSET VALUE (NAV) AND DIVIDEND DISTRIBUTIONS IN $ PER SHARE... 3
HIGH GROWTH FUND SUMMARY ......................................... 4
BALANCED GROWTH FUND SUMMARY ..................................... 6
CONSERVATIVE GROWTH FUND SUMMARY ................................. 8
THE PORTFOLIO MANAGEMENT TEAM .................................... 10
MARKET OVERVIEW .................................................. 11
QUESTIONS AND ANSWERS ............................................ 15
FINANCIAL STATEMENTS ............................................. 19
NOTES TO FINANCIAL STATEMENTS .................................... 153
</TABLE>
1
<PAGE> 8
A WORD FROM SCHWABFUNDS
We are pleased to provide you with this annual report for the three Schwab Asset
Director(R) Funds for the fiscal period ended October 31, 1996. In this report,
you will find performance statistics and other useful information for the Schwab
Asset Director - High Growth Fund, Balanced Growth Fund and Conservative Growth
Fund.
Each of the Funds provides easy diversification among major asset categories -
stocks, bonds and cash equivalents. Through a single investment, you can utilize
asset allocation, a strategy designed to achieve an optimal balance between
return and risk. Research shows that asset allocation has had a much larger
impact on a portfolio's investment return than individual stock selection or
market timing.1 We offer three Funds, each with a different proportion invested
in stocks, to help investors with a variety of goals and levels of risk
tolerance.
Since the Funds commenced operations on November 20, 1995, we have seen steady
growth in assets and the number of shareholder accounts. The Funds' combined
assets have grown from $115 million to $209 million. The number of accounts has
grown from approximately 19,000 to nearly 25,000.
Each of the Funds paid dividend distributions in the past year. The High Growth
Fund paid a dividend of $0.02 per share; the Balanced Growth Fund paid a
dividend of $0.03 per share; and the Conservative Growth Fund paid four
dividends totaling $0.30 per share. None of the Funds has paid any capital gain
distributions to date.
1 Financial Analysts Journal; Brinson, Singer, Beebower; May-June 1991.
2
<PAGE> 9
PERFORMANCE
================================================================================
<TABLE>
<CAPTION>
Cumulative Total Return
11/20/95 (Inception) - 10/31/96
<S> <C>
High Growth Fund 13.24%
- --------------------------------------------------------------------------------
Balanced Growth Fund 10.82%
- --------------------------------------------------------------------------------
Conservative Growth Fund 8.18%
- --------------------------------------------------------------------------------
S&P 500(R) Index 20.08%
- --------------------------------------------------------------------------------
Lehman Brothers Mutual Fund General
- --------------------------------------------------------------------------------
U.S. Government Index 4.31%
- --------------------------------------------------------------------------------
Average Asset Allocation Fund 2 11.34%
================================================================================
</TABLE>
As of September 30, 1996, the cumulative total returns since inception for the
High Growth Fund, the Balanced Growth Fund and the Conservative Growth Fund were
11.74%, 9.12% and 6.43%, respectively.
TOTAL RETURN ASSUMES REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS, IF ANY. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. The
Investment Manager and Schwab waived a portion of their fees during the
reporting period and have guaranteed that each Fund's total operating expenses
will not exceed 0.89% through at least February 28, 1997. Without this fee
waiver and guarantee, the cumulative total returns since inception for the
period ended October 31, 1996, for the High Growth Fund, the Balanced Growth
Fund and the Conservative Growth Fund would have been 12.61%, 10.11% and 6.99%,
respectively. For the period ended September 30, 1996, the cumulative total
returns since inception without the fee waiver and guarantee for the High Growth
Fund, the Balanced Growth Fund and the Conservative Growth Fund would have been
11.24%, 8.42% and 5.30%, respectively. Indices are unmanaged, and unlike funds,
do not reflect payment of advisory fees and other expenses associated with an
investment in funds. Investors cannot, however, directly invest in an index.
NET ASSET VALUE (NAV) AND DIVIDEND DISTRIBUTIONS IN $ PER SHARE
================================================================================
<TABLE>
<CAPTION>
High Growth Balanced Growth Conservative Growth
Fund Fund Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
11/20/95 10.00 10.00 10.00
(Opening NAV)
- --------------------------------------------------------------------------------
10/31/96 11.30 11.05 10.51
- --------------------------------------------------------------------------------
Change 1.30 1.05 0.51
- --------------------------------------------------------------------------------
Dividend
Distributions 0.02 0.03 0.30
================================================================================
</TABLE>
2 Source: Morningstar, Inc. Average for 189 asset allocation funds for the
period from 11/1/95 through 10/31/96.
3
<PAGE> 10
HIGH GROWTH FUND SUMMARY 3
(AS OF OCTOBER 31, 1996)
The High Growth Fund seeks to provide high capital growth with less volatility
than an all-stock portfolio. Of the three Asset Director(R) Funds, this Fund
offers the greatest exposure to stocks and the greatest potential for return and
risk.
ASSET MIX
[Pie Chart]
<TABLE>
<S> <C>
Cash Equivalents 9.8%
Bonds 16.9%
International Stocks 19.1%
Large Company U.S. Stocks 35.9%
Small Company U.S. Stocks 18.3%
</TABLE>
================================================================================
<TABLE>
<CAPTION>
Asset mix as of Asset mix as of Target asset mix in
October 31, 1996: April 30, 1996: neutral markets:
================================================================================
<S> <C> <C> <C>
Large Company
U.S. Stocks 35.9% 37.0% 40.0%
- --------------------------------------------------------------------------------
Small Company
U.S. Stocks 18.3% 20.6% 20.0%
- --------------------------------------------------------------------------------
International Stocks 19.1% 19.8% 20.0%
- --------------------------------------------------------------------------------
Bonds 16.9% 17.5% 15.0%
- --------------------------------------------------------------------------------
Cash Equivalents 9.8% 5.1% 5.0%
================================================================================
</TABLE>
3 This information is not indicative of the Fund's asset mix or holdings after
October 31, 1996. A complete listing of the Fund's holdings as of October 31,
1996, can be found in the Statement of Net Assets section of this report. Unlike
in the Statement of Net Assets, information is shown here as a percentage of the
Fund's investments, not as a percentage of the Fund's net assets.
4
<PAGE> 11
TOP FIVE STOCK HOLDINGS
================================================================================
<TABLE>
<CAPTION>
COMPANY COUNTRY % OF FUND INVESTMENTS
<S> <C> <C>
General Electric Co. United States 1.07
- --------------------------------------------------------------------------------
Coca Cola Co. United States 0.85
- --------------------------------------------------------------------------------
Exxon Corp. United States 0.80
- --------------------------------------------------------------------------------
Merck & Co., Inc. United States 0.66
- --------------------------------------------------------------------------------
Royal Dutch Petroleum, Inc. Netherlands 0.63
================================================================================
TOTAL 4.01
</TABLE>
TOP BOND HOLDINGS
================================================================================
<TABLE>
<CAPTION>
NAME OF SECURITY % OF FUND INVESTMENTS
- --------------------------------------------------------------------------------
<S> <C>
U.S. Treasury Bond
(7.25%, Maturity 05/15/16) 9.27
- --------------------------------------------------------------------------------
U.S. Treasury Bond
(8.125%, Maturity 08/15/19) 5.36
- --------------------------------------------------------------------------------
U.S. Treasury Bond
(7.25%, Maturity 08/15/22) 1.83
- --------------------------------------------------------------------------------
U.S. Treasury Bond
(7.50%, Maturity 11/15/16) 0.49
================================================================================
TOTAL 16.95
</TABLE>
5
<PAGE> 12
BALANCED GROWTH FUND SUMMARY 4
(AS OF OCTOBER 31, 1996)
The Balanced Growth Fund seeks to provide maximum total return, including both
capital growth and income. This Fund invests in a more balanced mix of stocks
and bonds.
ASSET MIX
[Pie Chart]
<TABLE>
<S> <C>
Cash Equivalents 10.4%
Bonds 34.7%
Large Company U.S. Stocks 26.5%
Small Company U.S. Stocks 14.2%
International Stocks 14.2%
</TABLE>
================================================================================
<TABLE>
<CAPTION>
Asset mix as of Asset mix as of Target asset mix in
October 31, 1996: April 30, 1996: neutral markets:
================================================================================
<S> <C> <C> <C>
Large Company
U.S. Stocks 26.5% 28.0% 30.0%
- --------------------------------------------------------------------------------
Small Company
U.S. Stocks 14.2% 15.1% 15.0%
- --------------------------------------------------------------------------------
International Stocks 14.2% 14.7% 15.0%
- --------------------------------------------------------------------------------
Bonds 34.7% 36.0% 35.0%
- --------------------------------------------------------------------------------
Cash Equivalents 10.4% 6.2% 5.0%
================================================================================
</TABLE>
4 This information is not indicative of the Fund's asset mix or holdings after
October 31, 1996. A complete listing of the Fund's holdings as of October 31,
1996, can be found in the Statement of Net Assets section of this report. Unlike
in the Statement of Net Assets, information is shown here as a percentage of the
Fund's investments, not as a percentage of the Fund's net assets.
6
<PAGE> 13
TOP FIVE STOCK HOLDINGS
================================================================================
<TABLE>
<CAPTION>
COMPANY COUNTRY % OF FUND INVESTMENTS
- --------------------------------------------------------------------------------
<S> <C> <C>
General Electric Co. United States 0.79
- --------------------------------------------------------------------------------
Coca Cola Co. United States 0.62
- --------------------------------------------------------------------------------
Exxon Corp. United States 0.60
- --------------------------------------------------------------------------------
Intel Corp. United States 0.51
- --------------------------------------------------------------------------------
Merck & Co., Inc. United States 0.49
================================================================================
TOTAL 3.01
</TABLE>
TOP FIVE BOND HOLDINGS
================================================================================
<TABLE>
<CAPTION>
NAME OF SECURITY % OF FUND INVESTMENTS
- --------------------------------------------------------------------------------
<S> <C>
U.S. Treasury Bond
(7.25%, Maturity 05/15/16) 6.27
- --------------------------------------------------------------------------------
U.S. Treasury Bond
(8.13%, Maturity 08/15/19) 5.38
- --------------------------------------------------------------------------------
U.S. Treasury Note
(6.13%, Maturity 08/31/98) 3.81
- --------------------------------------------------------------------------------
U.S. Treasury Note
(7.50%, Maturity 10/31/99) 2.34
- --------------------------------------------------------------------------------
U.S. Treasury Note
(5.88%, Maturity 08/15/98) 2.11
================================================================================
TOTAL 19.91
</TABLE>
7
<PAGE> 14
CONSERVATIVE GROWTH FUND SUMMARY 5
(AS OF OCTOBER 31, 1996)
The Conservative Growth Fund seeks to provide income and more growth potential
than an all-bond portfolio. This Fund normally keeps the majority of its assets
invested in bonds. Its stock component is designed to help offset inflation.
ASSET MIX
[Pie Chart]
<TABLE>
<S> <C>
Cash Equivalents 7.2%
Bonds 55.4%
Large Company U.S. Stocks 17.1%
Small Company U.S. Stocks 10.5%
International Stocks 9.8%
</TABLE>
================================================================================
<TABLE>
<CAPTION>
Asset mix as of Asset mix as of Target asset mix in
October 31, 1996: April 30, 1996: neutral markets:
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Large Company
U.S. Stocks 17.1% 18.4% 20.0%
- --------------------------------------------------------------------------------
Small Company
U.S. Stocks 10.5% 11.3% 10.0%
- --------------------------------------------------------------------------------
International Stocks 9.8% 10.8% 10.0%
- --------------------------------------------------------------------------------
Bonds 55.4% 56.1% 55.0%
- --------------------------------------------------------------------------------
Cash Equivalents 7.2% 3.4% 5.0%
</TABLE>
5 This information is not indicative of the Fund's asset mix or holdings after
October 31, 1996. A complete listing of the Fund's holdings as of October 31,
1996, can be found in the Statement of Net Assets section of this report. Unlike
in the Statement of Net Assets, information is shown here as a percentage of the
Fund's investments, not as a percentage of the Fund's net assets.
8
<PAGE> 15
TOP FIVE STOCK HOLDINGS
================================================================================
<TABLE>
<CAPTION>
COMPANY COUNTRY % OF FUND INVESTMENTS
- --------------------------------------------------------------------------------
<S> <C> <C>
General Electric Co. United States 0.51
- --------------------------------------------------------------------------------
Coca Cola Co. United States 0.40
- --------------------------------------------------------------------------------
Kokusai Denki (KDD) Japan 0.38
- --------------------------------------------------------------------------------
Exxon Corp. United States 0.31
- --------------------------------------------------------------------------------
Merck & Co., Inc. United States 0.26
================================================================================
TOTAL 1.86
</TABLE>
TOP FIVE BOND HOLDINGS
================================================================================
<TABLE>
<CAPTION>
NAME OF SECURITY % OF FUND INVESTMENTS
- --------------------------------------------------------------------------------
<S> <C>
U.S. Treasury Bond
(8.13%, Maturity 08/15/19) 8.61
- --------------------------------------------------------------------------------
U.S. Treasury Bond
(7.25%, Maturity 05/15/16) 7.73
- --------------------------------------------------------------------------------
U.S. Treasury Note
(6.13%, Maturity 08/31/98) 5.72
- --------------------------------------------------------------------------------
U.S. Treasury Note
(5.88%, Maturity 08/15/98) 5.70
- --------------------------------------------------------------------------------
U.S. Treasury Note
(5.75%, Maturity 10/31/00) 4.55
================================================================================
TOTAL 32.31
</TABLE>
9
<PAGE> 16
THE PORTFOLIO MANAGEMENT TEAM
STEPHEN B. WARD, Senior Vice President and Chief Investment Officer, has overall
responsibility for the management of each Fund's portfolio. Steve joined Charles
Schwab Investment Management (CSIM) as Vice President and Portfolio Manager in
April 1991, and was promoted to his current position in August 1993. Prior to
joining CSIM, Steve was Vice President and Portfolio Manager at Federated
Investors. He holds an M.B.A. from the Wharton School and a B.A. in economics
from Virginia Tech, and has been a chartered financial analyst since 1985.
GERI HOM, Portfolio Manager, has primary responsibility for the day-to-day
management of the equities in each Fund's portfolio. Geri joined CSIM in March
1995 as Portfolio Manager and currently manages approximately $3 billion in
assets. Prior to joining CSIM, Geri was a Principal for Wells Fargo Nikko
Investment Advisors and Vice President and Manager for its Domestic Equity
Portfolio Management Group. She holds a B.A. in business education from San
Francisco State University.
ANDREA REGAN, Portfolio Manager, has primary responsibility for the day-to-day
management of the bonds and cash equivalents in each Fund's portfolio. Andrea
joined CSIM in January 1991 and currently manages approximately $3 billion in
assets. Prior to joining CSIM, Andrea was Vice President and Manager of Trading
for Merus Capital Management, the investment management division of the Bank of
California. She holds a B.S. in accounting from San Jose State University.
The following market overview and answers to questions are provided by the
portfolio management team.
10
<PAGE> 17
MARKET OVERVIEW
REAL GDP GROWTH RATE
(QUARTERLY % CHANGE, ANNUAL RATE)
-----------------------------------------
Q4-95 0.3%
Q1-96 2.0%
Q2-96 4.7%
Q3-96 2.0%
As shown on the graph above, the start of the fiscal year November 1, 1995 was
ushered in with a weak fourth quarter 1995 real GDP growth rate of 0.3%, which
caused some concern over the possibility of an economic recession. However, as
time progressed, the economic climate improved significantly. By the third
quarter of 1996, sentiment was focused on the apparent strength of the economy
and its potential impact on future inflation. The financial markets were
particularly concerned that the combined impact of strong economic growth and
the strength of the labor market would force the Federal Reserve ("the Fed") to
raise the federal funds rate in an effort to prevent a resurgence of inflation.
At the close of the Fund's fiscal year, job creation appears to be maintaining a
healthy pace and the national unemployment rate of 5.2% is near its low for the
decade. Although the pace of economic growth has slowed somewhat to a rate of
2.0% in the third quarter of 1996, there remain signs of potential inflationary
pressures in the economy. Although both price and wage inflation appear to be
well contained, the Fed has indicated it will maintain a posture of "heightened
surveillance" and remain diligent in its effort to prevent increases in
inflation.
11
<PAGE> 18
(TOTAL RETURN PERFORMANCE
GROWTH OF A DOLLAR INVESTED)
<TABLE>
<CAPTION>
Schwab Schwab Lehman MF
Small Cap International General US
S&P 500 Index Index Govt. Index
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10/95 $1.000 $1.000 $1.000 $1.000
11/95 $1.044 $1.017 $1.028 $1.016
12/95 $1.064 $1.073 $1.068 $1.030
1/96 $1.100 $1.070 $1.071 $1.036
2/96 $1.110 $1.113 $1.073 $1.015
3/96 $1.121 $1.133 $1.093 $1.007
4/96 $1.137 $1.193 $1.119 $1.000
5/96 $1.167 $1.234 $1.106 $0.999
6/96 $1.171 $1.194 $1.113 $1.011
7/96 $1.119 $1.098 $1.084 $1.014
8/96 $1.143 $1.167 $1.094 $1.012
9/96 $1.207 $1.210 $1.126 $1.029
10/96 $1.241 $1.190 $1.122 $1.051
</TABLE>
<TABLE>
<S> <C>
Schwab Small Cap Index(R) 18.97%
Schwab International Index(R) 12.24%
S&P 500(R) Index 24.06%
Lehman MF General
US Govt. Index 5.12%
</TABLE>
TOTAL RETURN ASSUMES REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The indices
are representative returns of specific market sectors from 11/1/95 through
10/31/96 and do not reflect a fund's performance. Indices are unmanaged and,
unlike a fund, do not reflect the payment of advisory fees and other expenses
associated with an investment in a fund. Investors cannot invest in an index
directly.
DOMESTIC EQUITY MARKET HIGHLIGHTS
As shown on the graph above, domestic equities achieved strong returns during
the fiscal year, outpacing both international equities and domestic bonds. 6
During the fiscal year, the total return for the S&P 500(R) Index was 24.06% and
the total return for the Schwab Small-Cap Index(R) was 18.97%. 7 Both returns
were in excess of their longer-term (20-year) averages of 14.47% for the S&P 500
Index and 16.83% for
6 The domestic equities market is represented by the S&P 500 Index and the
Schwab Small-Cap Index. The Schwab Small-Cap Index is comprised of the common
stocks of the second 1,000 largest publicly traded companies ranked by market
capitalization, excluding investment companies.
7 Morningstar, Inc., for the period November 1, 1995 to October 31, 1996.
12
<PAGE> 19
small cap stocks. 8 Both of these indices reached new highs in the second
quarter, experienced significant declines in June and July, and went on to
recover (the S&P 500(R) Index reached a new high) by the close of the fiscal
period.
Using most traditional measures, such as price-to-book value and dividend yield,
many major market indices remain valued near their historic highs. The primary
exception is the price-to-earnings ratio which, at 20 times earnings for the S&P
500 Index, is well above its historical average, but below its 1991 and 1987
highs of 26 and 22, respectively.
Although there are many contributing factors, most market observers attribute
the market's strong performance to three key developments: the second straight
year of impressive corporate earnings; a continuation of relatively moderate
short- and long-term interest rates; and continued high levels of cash flowing
into equity mutual funds.
INTERNATIONAL EQUITY MARKET HIGHLIGHTS
International equity returns were more modest and were heavily influenced by the
strengthening dollar. In local currency terms, the total return of the Schwab
International Index(R)9 for the 12 months ended October 31, 1996 was 17.82%.
Because the U.S. dollar increased in value against most other currencies, the
total return measured in U.S.
dollars was 12.24%.
(8) Morningstar, Inc., for the period November 1, 1976 to October 31, 1996.
(9) The Schwab International Index is representative of the international equity
market. This Index is comprised of the stocks of the 350 largest non-U.S.
companies located in countries with developed securities markets and excludes
investment companies.
13
<PAGE> 20
30-YEAR AND 5-YEAR TREASURY BOND YIELDS
<TABLE>
<CAPTION>
30 YEAR 5 YEAR
TREASURY BOND TREASURY BOND
YIELD YIELD
------------- -------------
<S> <C> <C>
11/3/95 6.28% 5.70%
11/10/95 6.34% 5.76%
11/17/95 6.23% 5.65%
11/24/95 6.25% 5.69%
12/1/95 6.09% 5.49%
12/8/95 6.05% 5.55%
12/15/95 6.10% 5.57%
12/22/95 6.06% 5.50%
12/29/95 5.95% 5.38%
1/5/96 6.05% 5.41%
1/12/96 6.15% 5.43%
1/19/96 5.97% 5.27%
1/26/96 6.05% 5.33%
2/2/96 6.16% 5.26%
2/9/96 6.10% 5.23%
2/16/96 6.24% 5.30%
2/23/96 6.41% 5.51%
3/1/96 6.37% 5.58%
3/8/96 6.71% 6.06%
3/15/96 6.74% 6.18%
3/22/96 6.66% 6.06%
3/29/96 6.67% 6.09%
4/5/96 6.82% 6.38%
4/12/96 6.80% 6.29%
4/19/96 6.79% 6.32%
4/26/96 6.79% 6.28%
5/3/96 7.12% 6.60%
5/10/96 6.93% 6.47%
5/17/96 6.83% 6.41%
5/24/96 6.83% 6.41%
5/31/96 6.99% 6.63%
6/7/96 7.03% 6.70%
6/14/96 7.09% 6.70%
6/21/96 7.10% 6.72%
6/28/96 6.87% 6.46%
7/5/96 7.19% 6.82%
7/12/96 7.03% 6.65%
7/19/96 6.97% 6.57%
7/26/96 7.01% 6.63%
8/2/96 6.74% 6.27%
8/9/96 6.69% 6.22%
8/16/96 6.77% 6.30%
8/23/96 6.96% 6.51%
8/30/96 7.12% 6.72%
9/6/96 7.11% 6.70%
9/13/96 6.95% 6.47%
9/20/96 7.04% 6.62%
9/27/96 6.91% 6.44%
10/4/96 6.74% 6.21%
10/11/96 6.85% 6.28%
10/18/96 6.80% 6.25%
10/25/96 6.82% 6.26%
</TABLE>
BOND MARKET HIGHLIGHTS
As shown on the chart above, during the first three months of the reporting
period, both intermediate and long-term Treasury Bond yields declined, causing a
corresponding increase in the value of bonds. This decline in rates was a result
of concerns over a potential recession, an anticipated decline in demand for
borrowing, and reduced inflationary expectations. The bond market experienced a
dramatic reversal in sentiment during February, which marked the beginning of a
sharp increase in Treasury Bond yields and a corresponding decrease in the value
of bonds. The increase in rates was a result of strong economic data and
concerns that the economy could be growing too fast, which could result in
higher inflation levels. The last half of the reporting period was characterized
by some degree of volatility and no discernible trend, with trading ranges of
6.7% to 7.2% for the 30-year Treasury Bond and 6.2% to 6.8% for the 5-year
Treasury Bond.
14
<PAGE> 21
QUESTIONS AND ANSWERS
Q. How did the performance of the three Asset Director(R) Funds compare?
A.
ASSET DIRECTOR FUNDS
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
HIGH BALANCED CONSERVATIVE S&P 500(R) LEHMAN MF GOVT.
GROWTH FUND GROWTH FUND GROWTH FUND INDEX GEN. U.S. BOND INDEX
----------- ----------- ----------- ------- --------------------
<S> <C> <C> <C> <C> <C>
11/20/95 $10,000 $10,000 $10,000 $10,000 $10,000
11/30/95 10,080 10,080 10,080 10,104 10,078
12/31/95 10,292 10,270 10,237 10,299 10,221
1/31/96 10,442 10,390 10,337 10,649 10,283
2/29/96 10,533 10,410 10,297 10,748 10,074
3/31/96 10,623 10,460 10,287 10,851 9,990
4/30/96 10,803 10,581 10,337 11,011 9,926
5/31/96 10,954 10,691 10,378 11,294 9,909
6/30/96 10,934 10,711 10,439 11,336 10,037
7/31/96 10,523 10,410 10,256 10,835 10,062
8/31/96 10,733 10,551 10,337 11,064 10,040
9/30/96 11,184 10,912 10,643 11,686 10,207
10/31/96 11,324 11,082 10,818 12,008 10,431
</TABLE>
Cumulative Total Return * Inception Date
Since Inception
(11/20/95* - 10/31/96)
High Growth Fund 13.24%
Balanced Growth Fund 10.82%
Conservative Growth Fund 8.18%
TOTAL RETURN ASSUMES REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS, IF ANY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. The
Investment Manager and Schwab waived a portion of their fees and have guaranteed
that total operating expenses will not exceed 0.89% through at least February
28, 1997. Without this fee waiver and guarantee, the Fund's total returns would
have been lower. The performance graph compares a hypothetical $10,000
investment in each of the Asset Director Funds since inception on November 20,
1995. This chart is for hypothetical illustration purposes only.
15
<PAGE> 22
As shown on the graph on the previous page, all three of the Asset Director(R)
Funds earned positive total returns for the reporting period. Since all three of
the equity classes (U.S. large company, U.S. small company, and international)
outperformed both bonds and cash, the funds with the highest allocations to
equities had the best performance. Keep in mind that the target equity
allocations for the Asset Director Funds are 80% for the High Growth Fund, 60%
for the Balanced Growth Fund, and 40% for the Conservative Growth Fund.
The relative performance of the three Funds remains consistent with our
long-term expectations. However, we anticipate there will be periods in the
future where the short-term results are reversed because bonds may outperform
equities. Additionally, it is our expectation over the long term that the total
return performance of the Conservative Growth Fund will exhibit less volatility
than that of the Balanced Growth Fund, which will in turn exhibit less
volatility than that of the High Growth Fund. This is because bonds have
traditionally exhibited less volatility than equities. Therefore, as the
proportion of the portfolio allocated to bonds increases, volatility should
decrease. As a result, all three Asset Director Funds should exhibit less
volatility than an all stock fund such as an S&P 500(R) Index fund.
Q. HOW DID THE FUNDS' ASSET CLASS ALLOCATIONS DIFFER FROM THEIR NEUTRAL TARGET
MIXES THROUGHOUT THE FISCAL YEAR?
A. As the following charts show, the Funds were under-weighted in bonds during
the first several months of the reporting period. With low long-term bond rates
in place during November and December of 1995, the tactical asset allocation
model indicated that the expected return on bonds relative to cash and stocks
was not sufficient to justify allocating the full target allocation to bonds. As
a result, the Funds had a relative over-weighting in cash and stocks during
these first several months of the reporting period. Then in February, as
long-term bond yields and equity values continued to rise, the tactical asset
allocation model began to indicate a series of asset allocation shifts out of
cash and stocks up to the point where in March, the Funds had a slight
over-weighting in bonds and under-weighting in equities relative to their
neutral targets. With the exception of a one-month period beginning
16
<PAGE> 23
in August when the Funds maintained a neutral equity/bond weighting, the Funds
remained in this position throughout the end of the reporting period.
[GRAPH]
<TABLE>
<CAPTION>
ASSET DIRECTOR Conservative Balanced High
Target Mix Growth Fund Growth Fund Growth Fund
- -------------- ------------ ----------- -----------
<S> <C> <C> <C>
Cash 5% 5% 5%
Bonds 55% 35% 15%
International 10% 15% 20%
Small-Cap 10% 15% 20%
Large-Cap 20% 30% 40%
</TABLE>
<TABLE>
<CAPTION>
Actual Mix
------------------------------------------------------------
High Growth Fund
------------------------------------------------------------
Large-Cap Small-Cap International
Equity Equity Equity Bonds Cash
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11/20/95 43 20 20 0 17
11/30/95 43 20 20 0 17
12/15/95 43 20 20 0 17
12/29/95 46 20 20 0 14
1/15/96 46 20 20 0 14
1/31/96 43 20 20 6 11
2/15/96 40 20 20 12 8
2/29/96 40 20 20 12 8
3/15/96 37 20 20 18 5
3/29/96 37 20 20 18 5
4/15/96 37 20 20 18 5
4/30/96 37 20 20 18 5
5/15/96 37 20 20 18 5
5/31/96 37 20 20 18 5
6/14/96 37 20 20 18 5
6/28/96 37 20 20 18 5
7/15/96 37 20 20 18 5
7/31/96 37 20 20 18 5
8/15/96 40 20 20 15 5
8/30/96 40 20 20 15 5
9/16/96 37 20 20 18 5
9/30/96 37 20 20 18 5
10/15/96 37 20 20 18 5
10/31/96 37 20 20 18 5
</TABLE>
<TABLE>
<CAPTION>
Actual Mix
------------------------------------------------------------
Balanced Growth Fund
------------------------------------------------------------
Large-Cap Small-Cap International
Equity Equity Equity Bonds Cash
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11/20/95 32 15 15 25 13
11/30/95 32 15 15 25 13
12/15/95 32 15 15 25 13
12/29/95 34 15 15 25 11
1/15/96 34 15 15 25 11
1/31/96 32 15 15 29 9
2/15/96 30 15 15 33 7
2/29/96 30 15 15 33 7
3/15/96 28 15 15 37 5
3/29/96 28 15 15 37 5
4/15/96 28 15 15 37 5
4/30/96 28 15 15 37 5
5/15/96 28 15 15 37 5
5/31/96 28 15 15 37 5
6/14/96 28 15 15 37 5
6/28/96 28 15 15 37 5
7/15/96 28 15 15 37 6
7/31/96 28 15 15 37 5
8/15/96 30 15 15 35 5
8/30/96 30 15 15 35 5
9/16/96 28 15 15 37 5
9/30/96 28 15 15 37 5
10/15/96 28 15 15 37 5
10/31/96 28 15 15 37 5
</TABLE>
<TABLE>
<CAPTION>
Actual Mix
------------------------------------------------------------
Conservative Growth Fund
------------------------------------------------------------
Large-Cap Small-Cap International
Equity Equity Equity Bonds Cash
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11/20/95* 22 10 10 45 13
11/30/95 22 10 10 45 13
12/15/95 22 10 10 45 13
12/29/95 24 10 10 45 11
1/15/96 24 10 10 45 11
1/31/96 22 10 10 49 9
2/15/96 20 10 10 53 7
2/29/96 20 10 10 53 7
3/15/96 18 10 10 57 5
3/29/96 18 10 10 57 5
4/15/96 18 10 10 57 5
4/30/96 18 10 10 57 5
5/15/96 18 10 10 57 5
5/31/96 18 10 10 57 5
6/14/96 18 10 10 57 5
6/28/96 18 10 10 57 5
7/15/96 18 10 10 57 5
7/31/96 18 10 10 57 5
8/15/96 20 10 10 55 5
8/30/96 20 10 10 55 5
9/16/96 18 10 10 57 5
9/30/96 18 10 10 57 5
10/15/96 18 10 10 57 5
10/31/96 18 10 10 57 5
</TABLE>
*Inception Date
17
<PAGE> 24
Q. WHAT SECURITY SELECTION STRATEGIES ARE USED BY THE PORTFOLIO MANAGEMENT TEAM
AS THEY SEEK TO ACHIEVE THE APPROPRIATE ASSET MIX FOR EACH FUND?
A. One of the founding principles of the Asset Director(R) Funds, as well as one
of the basic tenets of asset allocation, is that the asset mix is a much more
significant determinant of portfolio returns than security selection. A study of
the performance of pension fund returns indicated that over 90% of the
performance was determined by asset mix.10 During the development stage of the
Asset Director Funds, we analyzed many different asset allocation combinations
prior to selecting the three current Fund target mixes. We feel that the ones we
chose represent a strong selection of reward/risk profiles for investors. For
each asset class, the portfolio management team has implemented an indexing
approach to investment selection. We feel that using an indexing approach is an
effective method of helping each Fund achieve the desired market representation
for each asset class. This approach also helps to ensure that the Funds maintain
the return and risk characteristics we were seeking when we developed them.
The asset classes included in each of the Asset Director Funds and the indexes
each asset class will seek to track are as follows:
- - Large Company Stock S&P 500(R) Index
- - Small Company Stock Schwab Small-Cap Index(R)
- - International Stock Schwab International Index(R)
- - Bonds Lehman General Government
Bond Index & Lehman 20+
Treasury Index
10 Financial Analysts Journal; Brinson, Singer, Beebower; May-June 1991.
18
<PAGE> 25
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
Statement of Net Assets
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
COMMON STOCK--76.3%
DOMESTIC--56.4%
AEROSPACE/DEFENSE--1.1%
AAR Corp. 500 $ 14,250
Alliant Techsystems Inc.* 900 43,988
BFGoodrich Co. 300 12,713
Boeing Co. 2,700 257,513
Curtiss-Wright Corp. 100 5,413
Gencorp Inc. 900 14,850
General Dynamics Corp. 400 27,450
Lockheed Martin Corp. 1,900 170,288
McDonnell Douglas Corp. 1,600 87,200
Northrop Grumman Corp. 400 32,300
OEA, Inc. 1,000 37,750
Orbital Sciences Corp. Class A* 1,000 21,125
Raytheon Co. 1,700 83,725
Rockwell International Corp. 1,500 82,500
Rohr Industries Inc.* 400 7,400
Textron Inc. 1,100 97,625
Thiokol Corp. 500 20,938
Trimble Navigation Ltd.* 500 7,094
United Technologies Corp. 900 115,875
---------
1,139,997
---------
AIR TRANSPORTATION--0.3%
AMR Corp.* 800 67,200
Alaska Air Group Inc.* 300 6,600
Atlantic Southeast Airlines Inc. 1,100 23,100
Delta Airlines Inc. 700 49,613
Mesa Air Group Inc.* 2,000 18,750
Offshore Logistics, Inc.* 400 6,725
Southwest Airlines Co. 800 18,000
Trans World Airlines Inc. (New)* 1,500 12,000
USAir Group, Inc.* 3,000 52,125
Valujet Inc. 1,900 18,644
---------
272,757
---------
ALCOHOLIC BEVERAGES--0.3%
Adolph Coors Co. Class B 1,800 34,988
Anheuser-Busch Companies, Inc. 3,600 138,600
Brown Forman Corp. Class B 500 21,625
Canandaigua Wine Co., Inc. Class A* 700 16,013
Seagram Company Ltd. 2,200 83,325
---------
294,551
---------
</TABLE>
19
<PAGE> 26
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
APPAREL--0.4%
Brown Group Inc. 500 $ 10,313
Burlington Industries Inc.* 1,800 20,475
Cone Mills Corp.* 600 4,725
Donnkenny Inc. 500 6,250
Fabri-Centers of America, Inc. Class A 200 2,600
Guilford Mills, Inc. 400 9,500
Justin Industries Inc. 600 6,150
Kellwood Co. 500 9,000
Liz Claiborne Inc. 400 16,900
Men's Wearhouse, Inc. 500 10,281
NIKE, Inc. Class B 1,800 105,975
Nautica Enterprises Inc. 2,000 61,250
Phillips-Van Heusen Corp. 600 6,600
Reebok International Ltd. 400 14,300
Russell Corp. 200 5,675
St. John's Knits, Inc. 600 27,450
Stride Rite Corp. 2,300 18,975
Unitog Co. 400 10,950
V.F. Corp. 400 26,150
Wolverine World Wide Inc. 1,350 33,413
-------
406,932
-------
AUTOMOTIVE PRODUCTS--0.1%
APS Holding Corp. Class A* 300 6,225
Armor-All Products Corp. 500 8,313
Carlisle Cos. Inc. 900 51,188
Cooper Tire & Rubber 400 7,850
Discount Auto Parts Inc.* 400 8,700
Goodyear Tire & Rubber 1,000 45,875
O'Reilly Automotive, Inc.* 200 7,050
-------
135,201
-------
BANKS--4.4%
ALBANK Financial Corp. 360 10,035
Associated Banc-Corp. 900 35,888
Banc One Corp. 2,850 120,769
Bancorp South, Inc. 1,400 35,263
Bank of Boston Corp. 1,300 83,200
Bank of New York Co., Inc. 2,600 86,125
BankAmerica Corp. 2,900 265,350
Bankers Trust New York Corp. 1,000 84,500
Barnett Banks, Inc. 1,200 45,750
Boatmens Bancshares Inc. 1,400 85,138
CCB Financial Corp. 900 51,300
CNB Bancshares Inc. 420 12,495
Centura Banks Inc. 1,100 42,763
</TABLE>
20
<PAGE> 27
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Chase Manhattan Corp. (New) 3,440 $294,980
Chemical Financial Corp. 300 11,213
Citicorp 4,200 415,800
Citizens Bancorp 400 20,400
Citizens Banking Corp. 400 11,600
City National Corp. 1,600 28,000
Cole Taylor Financial Group Inc. 400 12,050
Colonial BancGroup Inc. 300 11,363
Comerica Inc. 900 47,813
Corestates Financial Corp. 1,600 77,800
Corus Bankshares Inc. 500 15,563
Cullen/Frost Bankers Inc. 600 18,113
Dauphin Deposit Bank & Trust Co. 1,100 35,888
Deposit Guaranty Corp. 700 35,088
F & M National Corp. 400 7,400
Fifth Third Bancorp 700 43,925
First Bank System Inc. 982 64,812
First Chicago NBD Corp. 1,805 92,055
First Citizens BancShares Inc. 300 20,175
First Commercial Bancshares Inc. 300 8,363
First Commercial Corp. 1,236 41,864
First Commonwealth Financial Corp. 1,000 18,000
First Financial Bancorp 880 27,390
First Hawaiian, Inc. 1,100 34,100
First Michigan Bank Corp. 700 17,500
First Midwest Bancorp Inc. 300 9,563
First Union Corp. 2,275 165,506
Firstbank Illinois Co. 300 9,769
Fleet Financial Group Inc. (New) 1,924 95,960
Fort Wayne National Corp. 300 10,388
Fulton Financial Corp. 880 17,490
HUBCO, Inc. 412 8,884
Hancock Holding Co. 700 27,913
Imperial Bancorp 486 9,325
J.P. Morgan & Co. Inc. 1,600 138,200
Jefferson Bankshares, Inc. 500 13,781
Keycorp (New) 1,400 65,275
Keystone Financial Inc. 1,650 42,694
Liberty Bancorp, Inc. 300 11,513
Long Island Bancorp Inc. 800 23,850
MBNA Corp. 1,600 60,400
Magna Group Inc. 1,200 33,450
Mark Twain Bancshares Inc. 900 41,288
Mellon Bank Corp. 900 58,613
Mid-Am, Inc. 440 7,755
National Bancorp of Alaska, Inc. 700 45,325
</TABLE>
21
<PAGE> 28
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
National City Corp. 1,200 $ 52,050
National Commerce Bancorp 1,100 38,775
NationsBank Corp. 2,700 254,475
New York Bancorp Inc. 300 10,163
North Fork Bancorporation 1,100 34,788
Norwest Corp. 2,210 96,964
ONBANCorp, Inc. 400 14,575
Old National Bancorp 800 29,100
One Valley Bancorp of West Virginia Inc. 625 20,195
PNC Bank Corp. 2,500 90,625
Park National Corp. 200 9,650
People's Bank Bridgeport Conn. 1,400 35,875
Provident Bancorp Inc. 1,350 59,822
Provident Bankshares Corp. 300 10,763
Queens County Bancorp, Inc. 266 11,538
Republic New York Corp. 300 22,875
Riggs National Corp. Washington D.C. 700 11,900
S & T Bancorp, Inc. 300 9,413
Security Capital Corp. 300 19,875
Sumitomo Bank 400 10,150
Suntrust Banks, Inc. 1,600 74,600
Susquehanna Bancshares, Inc. 300 8,813
Toronto-Dominion Bank 1,464 34,221
Toronto-Dominion Bank (Ontario)* 245 5,727
TrustCo Bank Corp. NY 460 10,063
Trustmark Corp. 1,500 37,125
U S Trust Corp. (New) 300 18,750
U.S. Bancorp 885 35,345
UMB Financial Corp. 1,050 41,081
Union Planters Corp. 1,220 42,395
United Bankshares, Inc. 300 9,000
United Carolina Bancshares Corp. 600 15,450
Wachovia Corp. (New) 1,100 59,125
Wells Fargo & Co. 533 142,378
Westamerica Bancorp 300 15,263
Whitney Holding Corp. 400 12,750
---------
4,672,430
---------
BUSINESS MACHINES & SOFTWARE--4.2%
3COM Corp. 1,200 81,225
AST Research Inc.* 1,200 5,475
Amati Communications Corp.* 700 12,206
Amdahl Corporation* 600 6,150
Analogic Corp. 500 13,625
Apple Computer, Inc. 800 18,500
Applied Magnetics Corp.* 900 19,238
Auspex Systems, Inc.* 700 7,131
</TABLE>
22
<PAGE> 29
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Autodesk, Inc. 100 $ 2,288
BBN Corp.* 500 10,688
BancTec, Inc.* 700 14,263
Bay Networks, Inc. 800 16,200
Black Box Corp.* 500 17,000
Borland International Inc.* 700 3,566
Broderbund Software Inc.* 700 19,600
Cabletron Systems Inc.* 1,000 62,375
Ceridian Corp.* 428 21,240
Cheyenne Software Inc.* 1,300 39,488
Cisco Systems Inc. 5,300 327,606
Compaq Computer Corp.* 2,200 153,175
Computer Assoc. International Inc. 3,050 180,331
Computer Horizons Corp. 600 18,675
Computer Products, Inc.* 800 15,750
Computer Sciences Corp.* 1,190 88,358
Compuware Corp.* 1,200 63,600
Comshare, Inc. 300 4,181
Comverse Technology Inc. (New)* 800 27,900
Control Data Systems, Inc.* 500 11,719
Data General Corp.* 1,500 22,313
Dell Computer Corp. 800 65,200
Digi International Inc.* 300 4,406
Digital Equipment Corp.* 1,100 32,450
EMC Corp.* 1,500 39,375
Exabyte Corp.* 500 6,531
FileNet Corp.* 400 11,300
Geoworks* 500 10,094
HCIA Inc.* 700 19,600
HNC Software Inc. 400 12,550
Hewlett Packard Co. 7,700 339,763
Honeywell Inc. 900 55,913
INSO Corp. 800 39,300
Intergraph Corp.* 2,300 21,706
International Business Machines 3,900 503,100
JTS Corp.* 2,200 8,250
Learning Co. Inc.* 1,200 25,611
Legato Systems Inc. 600 21,375
McAfee Associates, Inc. 1,575 71,761
Metatools Inc.* 500 9,688
Microchip Technology Inc.* 1,200 43,350
Microsoft Corp.* 4,400 604,175
Mylex Corp.* 800 10,150
National Computer Systems, Inc. 500 10,688
National Instruments Corp.* 500 14,500
Novell Inc.* 2,100 19,556
</TABLE>
23
<PAGE> 30
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Novellus Systems, Inc.* 600 $ 24,750
Oak Technology 2,000 20,000
Optical Data Systems, Inc. 400 5,800
Oracle Systems Corp. 4,350 184,059
Pitney Bowes Inc. 1,000 55,875
Platinum Technology Inc.* 1,900 27,550
Project Software & Development Inc. 400 13,350
Pure Atria Corp.* 617 16,775
Quantum Corp.* 1,800 36,338
Rational Software Corp. (New) 1,800 68,738
Read-Rite Corp.* 1,600 28,200
Safeguard Scientifics Inc. 1,800 71,550
Santa Cruz Operations, Inc.* 1,500 10,406
Seagate Technology, Inc. 684 45,657
Security Dynamics Technology 1,300 104,975
Sequent Computer Systems, Inc.* 800 11,850
Shiva Corp. 800 32,950
Silicon Graphics Inc.* 1,276 23,606
Stac Inc.* 700 5,119
Stratus Computer Inc.* 1,100 24,613
Structural Dynamics Research Corp.* 1,300 22,994
Sun Microsystems Inc. 1,500 91,406
System Software Associates, Inc. 1,500 17,531
Tandem Computers Inc.* 600 7,575
Tech Data Corp.* 1,400 35,963
Transaction Systems Architects Inc. Class A 900 36,900
Unisys Corp.* 900 5,625
Veritas Software Co. 500 25,375
Videoserver Inc.* 300 14,119
Wang Laboratories Inc. (New)* 1,300 30,306
Wind River Systems Inc. 450 18,956
Xerox Corp. 2,400 111,300
Xircom, Inc.* 700 14,219
---------
4,528,688
---------
BUSINESS SERVICES--2.7%
ABM Industries, Inc. 600 10,575
ABR Information Services Inc. 800 55,100
Access Health Inc. 900 29,475
Ackerley Inc. 1,200 14,700
Addington Resources, Inc.* 600 16,650
Affiliated Computer Services Inc. Class A 600 32,550
Allegiance Corp.* 320 6,000
Alternative Resources Corp. 400 7,975
American Business Information, Inc. 500 9,500
American Business Products, Inc. 400 8,900
American Homepatient Inc. 800 18,900
</TABLE>
24
<PAGE> 31
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
American Medical Response, Inc.* 1,000 $ 30,000
Amresco Inc. 1,000 20,938
Analysts International Corp. 600 14,700
Apollo Group, Inc. Class A 2,250 61,313
Applix Inc. 300 7,200
Aspen Technology Inc.* 200 13,400
Automatic Data Processing, Inc. 1,700 70,763
BISYS Group, Inc.* 700 26,119
Bell & Howell Co. (New)* 700 18,725
Billing Information Concepts Corp.* 500 12,938
Bowne & Co. Inc. 400 9,350
Browning Ferris Industries Inc. 1,300 34,125
CDI Corp.* 600 16,500
Cambridge Technology Partners 1,200 39,450
Camco International Inc. 1,100 42,625
Catalina Marketing Corp. 1,100 55,963
Cellular Technical Services Inc. 400 6,475
Cerner Corp. 1,100 13,131
Checkfree Corp.* 1,100 19,938
Clintrials Research Inc. 300 11,194
Compucom Systems Inc.* 1,500 14,719
Computer Task Group Inc. 400 15,100
Computervision Corp. (New)* 2,200 19,800
Continental Waste Industries Inc.* 600 14,925
Coventry Corp.* 1,300 13,000
Culligan Water Technologies Inc.* 700 26,250
Dames & Moore Inc. 500 6,688
Data Broadcasting* 1,100 8,044
DeVRY Inc. 900 44,888
Deluxe Corp. 100 3,263
Dionex Corp. 400 15,500
Dun & Bradstreet Corp. 1,400 81,025
Dynatech Corp.* 700 34,694
Ecolab Inc. 300 10,950
Electro Rental 400 9,400
Employee Solutions Inc. 1,200 26,400
Envoy Corp. (New)* 400 14,800
Epic Design Technology Inc. 500 12,375
Express Scripts Inc. Class A* 900 25,313
Fair Issac & Co. Inc. 300 11,288
First Data Corp. 1,800 143,550
Franklin Quest Co.* 1,000 20,250
G&K Services, Inc. Class A 500 14,500
GRC International, Inc.* 200 2,825
H & R Block Inc. 600 14,850
HA-LO Industries Inc. 400 12,600
</TABLE>
25
<PAGE> 32
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Health Management Systems, Inc. 450 $10,519
Healthplan Services Corp.* 600 10,875
Heritage Media Corp. Class A (New) 1,000 15,250
Hon Industries Inc. 1,100 38,913
Horizon Healthcare Corp.* 1,800 18,675
ITT Educational Services Inc. 450 16,369
Information Resources, Inc.* 600 7,613
Inphynet Medical Management Inc.* 800 12,700
Integrated Health Services Inc. 1,000 24,625
Integrated Systems Consulting Group 150 2,438
Integrated Systems Inc. Class A 600 15,975
Intelligent Electronics Inc. 1,400 12,250
Interim Services Inc.* 400 16,000
Interpublic Group of Companies, Inc. 500 24,250
Jack Henry & Associates Inc. 300 12,188
Jacobs Engineering Group Inc.* 1,100 24,338
Jenny Craig, Inc.* 800 7,200
John H. Harland Co. 1,500 46,688
Keane, Inc. 800 37,100
Kinder Care Learning Centers Inc.* 600 11,888
Kirby Corp.* 800 15,600
Kronos, Inc. 300 8,738
Laidlaw Inc. Class B (Non Voting) 1,500 17,625
Mariner Health Group Inc.* 1,100 9,213
Maxicare Health Plans Inc. (New)* 900 16,819
Metromedia International Group, Inc.* 2,600 25,675
Micro Warehouse, Inc.* 1,200 27,750
Molten Metal Technology, Inc.* 1,100 14,713
Moore Corp. Ltd. 500 10,125
National Data Corp. 900 37,013
National Education Corp.* 1,000 16,250
National Media Corp.* 100 1,200
National Service Industries, Inc. 200 6,900
Netcom Online Communications* 300 4,538
Netmanage Inc.* 1,400 9,581
Network Equipment Technologies* 500 6,688
New England Business Service, Inc. 400 7,200
Norrell Corp. Georgia 800 20,000
Occusystems Inc.* 600 16,538
Oceaneering International, Inc.* 800 14,400
Ogden Corp. 4,000 72,500
Orthodontic Centers of America Inc. 1,600 22,800
PAXAR Corp. 625 10,078
PSINet Inc.* 1,300 12,431
Payment Services Inc. 750 15,000
Pharmaceutical Product Development Inc.* 405 7,796
</TABLE>
26
<PAGE> 33
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Physician Corp. of America* 1,100 $ 12,238
Physicians Computer Network* 1,500 13,406
Pre-Paid Legal Services, Inc.* 800 9,400
Quarterdeck Corp.* 1,100 5,672
R.R. Donnelley & Sons Co. 1,000 30,375
Rollins, Inc. 1,200 22,950
Rykoff-Sexton, Inc. 400 5,700
SEI Corp. 500 10,063
SPS Transaction Services, Inc.* 900 14,400
SUPERVALU Inc. 300 8,925
Safety-Kleen Corp. 300 4,688
Scientific Games Holdings Corp.* 800 18,100
Seacor Holdings Inc.* 300 16,200
Service Corp. International 1,600 45,600
Shared Medical Systems Corp. 100 4,813
Sitel Corp. 1,200 23,625
Standard Register Co. 1,200 31,200
Sun Healthcare Group Inc.* 1,300 16,575
Symantec Corp.* 1,800 19,463
Synetic Inc.* 900 33,131
TCSI Corp. 700 5,513
Technology Solutions Co. 600 23,250
True North Communications 700 16,625
United Waste Systems, Inc. 1,800 61,650
Universal Health Services Inc. Class B 1,300 32,500
Valassis Communications Inc.* 1,700 30,600
Viad Corp. 1,100 15,950
Viasoft Inc. 600 29,700
Volt Information Sciences Inc. 300 11,775
WMX Technologies Inc. 3,500 120,313
Zebra Technologies Corp. Class A 1,600 46,000
---------
2,885,594
---------
CHEMICAL--1.8%
Air Products & Chemicals Inc. 1,000 60,000
Arcadian Corp. 1,100 27,088
Calgon Carbon Corp. 1,100 11,000
Cambrex Corp. 600 18,750
Chemed Corp. 300 11,700
Crompton & Knowles Corp. 2,278 41,004
Cytec Industries Inc. 1,500 53,625
Dexter Corp. 1,100 34,100
Dow Chemical Co. 2,300 178,825
E.I. Du Pont de Nemours & Co. 4,700 435,925
Eastman Chemical Co. 500 26,375
Ferro Corp. 1,200 32,400
First Mississippi Corp. 1,000 29,000
</TABLE>
27
<PAGE> 34
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Geon Co. 1,100 $ 21,588
Great Lakes Chemical Corp. 400 20,850
H.B. Fuller Co. 400 16,650
Hercules Inc. 700 33,338
Lawter International Inc. 1,200 14,100
Lilly Industrial Inc. Class A 500 9,000
Millennium Chemicals Inc.* 380 7,695
Minnesota Mining & Manufacturing Co. 3,200 245,200
Monsanto Co. 3,800 150,575
Morton International Inc. 1,000 39,375
NCH Corp. 200 11,150
NL Industries Inc. (New) 2,400 20,400
Nalco Chemical Co. 300 10,913
OM Group Inc. 300 12,150
PPG Industries Inc. 1,300 74,100
Petrolite Corp. 300 9,675
Praxair Inc. 1,000 44,250
Rohm & Haas Co. 500 35,688
Scotts Co. Class A* 500 9,313
Sequa Corp. Class A* 300 12,525
Sigma-Aldrich Corp. 400 23,450
Techne Corp.* 400 9,600
Tredegar Industries Inc. 300 11,475
Union Carbide Corp. 900 38,363
W R Grace & Co. (Delaware)* 700 37,100
WD-40 Co. 200 10,025
Wellman Inc. 1,200 21,300
---------
1,909,640
---------
CONSTRUCTION--0.5%
Amre Inc. 700 6,475
Apogee Enterprises, Inc. 300 11,513
Armstrong World Industries, Inc. 300 20,025
Blount International Inc. Class A 1,200 43,200
Calmat Co. 700 13,038
Centex Construction Products Inc. 500 7,813
Centex Corp. 1,400 42,175
Crane Co. 100 4,650
D.R. Horton Inc. 1,100 10,038
Del Webb Corp. 400 6,400
Fluor Corp. 600 39,300
Global Industries Inc. 1,400 24,850
Granite Construction Inc. 450 8,831
Kaufman & Broad Home Corp. 1,000 12,000
Lone Star Industries, Inc. (New) 300 11,025
Mafco Consolidated Group Inc.* 700 19,513
Mastec Inc.* 600 29,138
</TABLE>
28
<PAGE> 35
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Medusa Corp. 400 $ 13,150
Morrison Knudsen Corp. (New)* 1,600 14,400
Owens Corning 400 15,500
Pulte Corp. 1,300 34,450
Regal Beloit Corp. 500 8,875
Sherwin Williams Co. 600 30,075
Southdown Inc. 400 10,950
Stanley Works 600 16,950
Stone & Webster, Inc. 400 13,200
TJ International Inc. 400 7,750
Toll Brothers, Inc.* 1,300 22,263
Triangle Pacific Corp. Delaware* 300 6,319
U.S. Home Corp. (New)* 300 6,488
-------
510,354
-------
CONSUMER-DURABLE--0.4%
Bassett Furniture Industries Inc. 400 8,950
Black & Decker Corp. 600 22,425
Champion Enterprises Inc. 1,620 31,995
Chicago Miniature Lamp Inc. 450 13,556
Ethan Allen Interiors Inc. 400 14,300
Furniture Brands International Inc.* 2,400 32,100
Harman International Industries Inc. (New) 900 46,238
Interface Inc. Class A 400 6,700
Kimball International Inc. Class B 600 21,600
La-Z-Boy Chair Co. 500 15,563
Masco Corp. 1,000 31,375
Maytag Corp. 500 9,938
National Presto Industries, Inc. 200 7,500
Newell Co. 1,100 31,213
Snap-on Tools Corp. 300 9,638
Sturm, Ruger & Co., Inc. 1,600 30,000
Toro Co. 300 9,413
Whirlpool Corp. 600 28,350
Zenith Electronics Corp.* 2,100 27,563
-------
398,417
-------
CONSUMER-NONDURABLE--0.8%
3DO Co.* 600 3,413
A.T. Cross Co. Class A 500 5,688
Acclaim Entertainment Inc.* 1,800 8,888
American Greetings Corp. Class A 500 14,656
Buffets Inc.* 1,200 13,275
CKE Restaurants Inc. 700 20,825
Corning Inc. 1,600 62,000
Darden Restaurants Inc. 800 6,700
Department 56 Inc.* 700 15,400
</TABLE>
29
<PAGE> 36
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Foodmaker, Inc.* 1,300 $ 12,675
Galoob Lewis Toys Inc.* 500 13,438
Hasbro Inc. 600 23,325
International Dairy Queen Inc. Class A* 700 13,475
Jostens, Inc. 1,800 38,700
Landry's Seafood Restaurants, Inc. 900 18,113
Luby's Cafeterias, Inc. 800 16,800
Mattel Inc. 1,750 50,531
McDonald's Corp. 5,000 221,875
Mohawk Industries Inc.* 1,300 31,363
Premark International, Inc. 400 8,350
Rexall Sundown, Inc. 1,300 35,181
Rubbermaid Inc. 1,000 23,250
Ruby Tuesday Inc. 600 9,750
Russ Berrie & Co. Inc. 500 9,000
Ryan's Family Steak Houses Inc.* 2,800 20,300
Samsonite Corp. (New) 600 20,250
Sbarro, Inc. 500 13,188
Shoney's Inc.* 2,800 20,650
Showbiz Pizza Time Inc. (New) 700 12,950
Sonic Corp. 400 9,000
Toy Biz Inc. Class A* 400 7,100
Wendy's International, Inc. 800 16,500
Williams-Sonoma Inc.* 1,100 30,388
-------
826,997
-------
CONTAINERS--0.1%
ACX Technologies Inc. 1,100 19,525
Ball Corp. 1,200 28,950
Bemis Co., Inc. 200 7,000
Crown Cork & Seal Inc. 900 43,200
Gaylord Container Corp. Class A* 1,500 11,250
Greif Brothers Corp. Class A 1,100 30,938
Stone Container Corp. 500 7,625
-------
148,488
-------
ELECTRONICS--2.2%
ADAC Laboratories 600 12,225
AMETEK, Inc. 1,300 25,838
AMP Inc. 1,100 37,263
Actel Corp.* 400 7,075
Advanced Micro Devices Inc. 620 11,005
Allen Group Inc. 1,000 15,875
Alliance Semiconductor Corp. 1,400 8,750
Altron Inc. 450 6,750
Ampex Corp. (Delaware) Class A* 1,200 8,100
Anixter International Inc. 1,800 26,775
</TABLE>
30
<PAGE> 37
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Applied Materials, Inc. 1,100 $ 29,081
Augat Inc. 600 16,500
Belden Inc. 1,200 34,500
Broadband Technologies Inc.* 500 8,938
Burr Brown 400 8,600
Cable Design Technologies Corp. 500 12,875
Checkpoint Systems Inc. 800 17,900
CopyTele Inc. 1,400 10,063
Cyrix Corp.* 500 8,813
DSP Communications Inc. 600 22,875
Dallas Semiconductor Corp. 700 14,000
EG&G, Inc. 200 3,525
Echostar Communications Corp. Class A* 300 8,906
Exide Corp. 700 18,200
FORE Systems, Inc. 600 23,813
FSI International Inc. 700 7,306
Fluke Corp. 200 8,000
General Instrument Corp.* 800 16,100
General Signal Corp. 200 8,150
Genrad Inc.* 700 14,175
Gerber Scientific Inc. 700 9,450
Harris Corp. 200 12,525
ITI Technologies Inc.* 300 8,550
Identix Inc.* 200 1,625
Imation Corp.* 290 7,939
Input/Output Inc. 2,000 59,500
Integrated Device Technology Inc. 2,600 21,288
Integrated Process Equipment Corp.* 400 4,400
Intel Corp. 6,100 669,856
International Rectifier Corp. 1,700 21,038
Itron, Inc.* 300 4,894
Kemet Corp. 1,300 24,944
Kent Electronics Corp. 1,600 36,600
Kulicke & Soffa Industries Inc. 500 6,594
LSI Logic Corp. 400 10,600
Lam Research Corp.* 1,100 26,744
Lattice Semiconductor Corp.* 1,100 37,538
Littlefuse, Inc.* 300 12,413
Logicon, Inc. 800 33,100
Lucent Technologies, Inc. 5,048 237,256
Macromedia Inc. 1,200 20,025
Marshall Industries* 500 15,063
Methode Electronics Inc. Class A 1,000 19,375
Micron Technology Inc. 1,300 32,988
Motorola Inc. 4,300 197,800
National Semiconductor Corp.* 600 11,550
</TABLE>
31
<PAGE> 38
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Osmonics, Inc.* 500 $ 10,625
Palomar Medical Technologies* 800 5,750
Perkin-Elmer Corp. 200 10,725
Pioneer Standard Electronics Inc. 500 5,375
Rexel Inc.* 700 10,150
S3 Inc. 1,700 31,875
Sanmina Corp. 400 18,450
Scientific-Atlanta, Inc. 400 5,800
Sierra Semiconductor Corp. 1,100 14,300
Silicon Valley Group Inc.* 1,000 16,688
Stanford Telecommunications* 300 8,663
Technitrol Inc. 300 9,938
Tektronix, Inc. 300 11,738
Texas Instruments Inc. 1,300 62,563
Thomas & Betts Corp. 200 8,475
VLSI Technology, Inc.* 1,300 22,425
VeriFone, Inc.* 700 23,538
Vicor Corp. 1,500 27,188
Vitesse Semiconductor Corp.* 600 19,050
Wyle Electronics 300 8,963
Zilog Inc.* 700 13,825
---------
2,341,735
---------
ENERGY-DEVELOPMENT--1.3%
Amcol International Corp. 600 9,038
Ashland Coal, Inc. 300 7,088
Atwood Oceanics Inc.* 300 16,575
Baker Hughes Inc. 1,000 35,625
Barrett Resources Corp.* 1,100 42,213
Benton Oil & Gas Co.* 600 14,663
Burlington Resources Inc. 800 40,300
Cabot Oil & Gas Corp. Class A 500 7,750
Chesapeake Energy Corp. 1,425 83,006
Devon Energy Corp. 600 20,925
Dresser Industries Inc. 1,300 42,738
Energy Ventures, Inc.* 700 30,800
Forest Oil Corp. (New)* 900 13,444
Halliburton Co. 1,029 58,267
Helmerich & Payne Inc. 1,200 64,950
Louis Dreyfus Natural Gas Corp.* 800 13,500
Louisiana Land & Exploration Co. 200 11,375
MAXXAM Inc.* 200 8,400
Marine Drilling Company, Inc.* 1,500 20,625
McDermott International Inc. 200 3,550
Nabors Industries Inc.* 2,800 46,550
Newfield Exploration Co.* 900 42,525
Newpark Resources, Inc. 400 15,000
</TABLE>
32
<PAGE> 39
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Noble Drilling Corp.* 3,100 $ 57,738
Nuevo Energy Co.* 600 29,925
Occidental Petroleum Corp. 2,200 53,900
Parker Drilling Co.* 1,300 11,050
Pride Petroleum Services Inc.* 900 15,694
Production Operators Corp. 300 11,850
Reading & Bates Corp. (New)* 2,100 60,375
Rochester & Pittsburgh Coal Co. 600 19,500
Rowan Cos. Inc.* 3,100 69,363
Schlumberger Ltd. 2,000 198,250
Solv-Ex Corp.* 800 10,350
Tom Brown Inc. (New)* 800 15,150
Tremont Corp.* 300 10,275
Tuboscope Vetco International Corp.* 1,200 18,150
Union Pacific Resources Group 1,939 53,323
United Meridian Corp.* 800 37,700
Varco International Inc.* 700 13,825
Vintage Petroleum Inc. 900 26,550
Zeigler Coal Holding Co. 800 14,500
---------
1,376,375
---------
FOOD-AGRICULTURE--2.9%
Archer-Daniels-Midland Co. 3,810 82,868
Bob Evans Farms, Inc. 1,500 18,938
CPC International Inc. 1,000 78,875
Campbell Soup Co. 2,000 160,000
Chiquita Brands International Inc. 2,000 25,000
Coca-Cola Bottling Co. 200 8,050
Coca-Cola Co. 18,500 934,250
ConAgra, Inc. 1,400 69,825
Dekalb Genetics Corp. Class B 600 23,625
Delta & Pine Land Co. 598 21,528
Dimon Inc. 1,100 20,900
Dreyers Grand Ice Cream Inc. 300 7,650
Earthgrains Co. 464 24,592
Fleming Companies, Inc. 2,900 50,388
General Mills Inc. 1,400 79,975
H.J. Heinz Co. 2,200 78,100
Hershey Foods Corp. 1,100 53,213
Hudson Foods Inc. Class A 1,200 19,950
International Multifoods Corp. 500 7,625
Interstate Bakeries Corp. (New) 1,400 59,325
J.M. Smucker Co. Class A 1,200 19,800
J.M. Smucker Co. Class B (Non Voting) 300 4,613
JP Foodservice, Inc.* 400 9,000
Kellogg Co. 2,000 127,000
Lance Inc. 900 15,919
</TABLE>
33
<PAGE> 40
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Mississippi Chemical Corp. (New) 700 $ 17,588
Mycogen Corp.* 1,100 17,325
Pepsico Inc. 11,100 328,838
Pioneer Hi-Bred International Inc. 600 40,275
Quaker Oats Co. 900 31,950
Ralcorp Holdings, Inc.* 1,000 21,000
Ralston Purina Co. 700 46,288
Richfood Holdings Inc. 2,100 51,056
Sara Lee Corp. 3,500 124,250
Savannah Foods & Industries Inc. 600 9,600
Seaboard Corp. 100 21,125
Smithfield Foods Inc.* 900 25,875
Sysco Corp. 1,300 44,200
Tootsie Roll Industries, Inc. 800 29,400
Unilever 1,400 214,025
Whitman Corp. 700 16,975
Wm Wrigley Junior Co. 800 48,200
---------
3,088,979
---------
GOLD--0.3%
Amax Gold Inc.* 3,300 18,150
Barrick Gold Corp. 2,200 57,475
Battle Mountain Gold Co. 10,400 79,300
Getchell Gold Corp.* 1,500 66,750
Homestake Mining Co. 500 7,125
Meridian Gold Inc.* 1,700 7,438
Newmont Mining Corp. 600 27,750
Placer Dome, Inc. 1,400 33,600
Santa Fe Pacific Gold Corp. 700 8,313
---------
305,901
---------
HEALTHCARE--5.5%
ALZA Corp.* 400 10,350
Abbott Laboratories 5,400 273,375
Acuson* 600 12,675
Advanced Technology Laboratories, Inc.* 400 12,150
Advanced Tissue Sciences Inc.* 1,500 24,375
Agouron Pharmaceuticals Inc.* 400 22,850
Allergan Inc. 300 9,150
Alliance Pharmaceutical Corp.* 900 12,488
Alpharma, Inc. Class A 600 7,500
American Home Products Corp. 5,300 324,625
Amgen Inc. 2,100 128,756
Amylin Pharmaceuticals Inc.* 1,100 12,238
Arrow International Inc. 800 22,800
Ballard Medical Products 800 14,100
Barr Laboratories, Inc. 500 13,813
</TABLE>
34
<PAGE> 41
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Bausch & Lomb Inc. 300 $ 10,125
Baxter International Inc. 1,600 66,600
Becton Dickinson & Co. 400 17,400
Beverly Enterprises, Inc.* 500 6,188
Bio Rad Laboratories Inc. Class A 300 7,275
Bio Technology General Corp.* 1,500 12,234
Biomet Inc. 600 9,675
Block Drug Inc. Class A 1,030 46,608
Boston Scientific Corp.* 1,437 78,137
Bristol Myers Squibb Co. 4,300 454,725
C.R. Bard Inc. 400 11,300
CNS, Inc. 500 8,438
Carter Wallace Inc. 1,600 24,800
Cephalon Inc.* 800 17,850
Cognex Corp. 1,400 17,850
Columbia Laboratories Inc. 1,000 12,000
Columbia/HCA Healthcare Corp. 5,100 182,325
Community Psychiatric Centers* 1,400 12,425
Conmed Corp. 400 6,950
Cygnus Therapeutic Systems, Inc.* 700 10,063
Cytogen Corp.* 1,600 8,500
Datascope Corp.* 400 6,750
Diagnostic Products Corp. 400 11,900
Eli Lilly & Co. 4,200 296,100
Enzo Biochem Inc. 525 9,581
Fresenius Medical Care AG
(Sponsored American Depository Receipts)* 1,290 38,378
Gilead Sciences Inc.* 700 16,231
GranCare, Inc.* 600 10,800
Gulf South Medical Supply Inc. 300 6,525
Haemonetics Corp.* 700 12,513
HealthSouth Rehabilitation Corp.* 1,876 70,350
Herbalife International Inc. 600 12,000
Hologic Inc. 400 9,175
Human Genome Sciences Inc.* 900 32,625
Humana Inc.* 1,200 21,900
ICN Pharmaceuticals, Inc. 809 15,371
Icos Corp.* 1,300 9,669
Idec Pharmaceuticals Corp.* 600 12,938
Imatron Inc.* 2,300 9,236
Immunex Corp. (New)* 1,100 14,919
Immunomedics Inc.* 1,200 8,475
Incyte Pharmaceuticals Inc.* 400 16,150
Invacare Corp. 1,300 36,075
Isis Pharmaceuticals* 700 11,244
Isolyser Inc. 1,100 7,700
</TABLE>
35
<PAGE> 42
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Johnson & Johnson 9,800 $482,650
Jones Medical Industries Inc. 900 38,925
Kinetic Concepts Inc. 1,200 15,750
Life Technologies, Inc. (New) 600 13,650
Ligand Pharmaceuticals Inc. Class B 700 8,750
Lincare Holdings Inc.* 800 29,800
Liposome Inc.* 1,200 20,475
Living Centers of America* 1,000 23,375
Lunar Corp. 300 9,281
Magellan Health Services Inc.* 1,200 22,050
Mallinckrodt Inc. 400 17,400
Manor Care, Inc. 300 11,775
Marquette Medical System Inc.* 1,500 23,438
Martek Biosciences Corp.* 500 10,688
Matrix Pharmaceuticals* 700 5,250
Medimmune Inc.* 400 6,225
Medtronic Inc. 1,900 122,313
Mentor Corp. 1,100 24,338
Merck & Co. Inc. 9,800 726,425
Mid Atlantic Medical Services Inc.* 1,600 17,200
Multicare Cos. Inc. 600 10,800
Nabi Inc.* 1,200 11,100
Natures Sunshine Products Inc. 450 9,900
Neopath Inc.* 500 8,156
Neoprobe Corp.* 500 7,125
Neurex Corp.* 800 12,450
Neurogen Corp.* 500 10,688
Nexstar Pharmaceuticals Inc.* 1,000 15,563
North American Vaccine Inc.* 1,100 24,475
Novacare Inc.* 2,600 21,450
Noven Pharmaceuticals, Inc.* 700 9,625
Organogenesis Inc. 500 8,938
Owens & Minor Inc. (New) 700 6,563
PDT Inc. 300 7,388
PHP Healthcare Corp. 100 2,288
PLC Systems Inc.* 600 13,425
Patterson Dental Co.* 500 14,063
Perrigo Co.* 2,600 24,375
Pfizer Inc. 5,300 438,575
Pharmacia & Upjohn Inc. 3,300 118,800
Physician Sales & Service Inc. 1,000 21,125
Protein Design Labs, Inc.* 500 12,063
Quintiles Transnational Corp. 600 39,375
Regeneron Pharmaceuticals Inc.* 700 13,256
Renal Treatment Centers Inc. 600 16,050
Respironics Inc.* 400 6,025
</TABLE>
36
<PAGE> 43
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
RoTech Medical Corp. 800 $ 12,650
Roberts Pharmaceutical Corp.* 400 6,150
Salick Health Care, Inc.* 300 11,888
Schering Plough Corp. 2,800 179,200
Sepracor Inc.* 700 11,288
Sequus Pharmaceuticals Inc.* 900 12,600
Sofamor/Danek Group Inc.* 1,100 30,250
Sola International Inc.* 800 28,900
Somatogen Inc.* 500 5,375
St. Jude Medical, Inc. 125 4,930
Summit Technology Inc. 1,100 6,119
Sunrise Medical Inc.* 500 7,438
Target Therapeutics Inc. 400 14,775
Tecnol Medical Products Inc.* 600 7,575
Tenet Healthcare Corp.* 1,100 22,963
Thermedics Inc.* 1,400 29,050
U.S. Bioscience Inc.* 900 10,350
United Healthcare Corp. 1,200 45,450
United States Surgical Corp. 300 12,563
Ventritex Inc.* 500 11,406
Vertex Pharmaceuticals Inc.* 900 29,869
Vivus* 500 16,625
Warner Lambert Co. 2,000 127,250
West Company Inc. 400 10,750
---------
5,788,131
---------
HOUSEHOLD PRODUCTS--1.1%
Alberto Culver Co. Class B 100 4,575
Avon Products, Inc. 1,000 54,250
Bush Boake Allen Inc.* 500 12,875
Church & Dwight Inc. 600 12,900
Clorox Co. 600 65,475
Colgate-Palmolive Co. 1,300 119,600
Dial Corp. (New) 1,100 15,125
Gillette Co. 3,400 254,150
International Flavors & Fragrances Inc. 800 33,100
Libbey Inc. 400 9,600
Playtex Products Inc.* 1,200 10,200
Procter & Gamble Co. 5,700 564,300
Tupperware Corp. 400 20,550
---------
1,176,700
---------
IMAGING & PHOTO--0.3%
Avid Technology, Inc.* 600 8,213
BMC Industries, Inc. 800 23,700
Chyron Corp.* 3,200 16,400
Eastman Kodak Co. 2,700 215,325
</TABLE>
37
<PAGE> 44
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Optical Imaging Systems Inc.* 3,500 $ 9,844
Photronic, Inc.* 400 10,750
Polaroid Corp. 200 8,125
Robotic Vision Systems Inc.* 400 4,050
Ultratech Stepper Inc. 1,000 16,875
-------
313,282
-------
INSURANCE--2.6%
20th Century Industries* 1,800 28,800
Acordia, Inc. 400 11,400
Aetna Inc. 1,524 101,918
Alexander & Alexander Services 3,300 50,325
Alfa Corp. 1,100 12,238
Allied Group Inc. 500 20,938
Allstate Corp. 3,400 190,825
American Annuity Group, Inc. 1,400 19,075
American Bankers Insurance Group, Inc. 1,000 47,875
American General Corp. 1,000 37,250
American Heritage Life Investment Corp. 300 6,638
American International Group, Inc. 3,400 369,325
American Travellers Corp. 450 15,441
Aon Corp. 900 51,975
Argonaut Group, Inc. 800 23,200
Arthur J. Gallagher & Co. 900 26,438
CMAC Investment Corp. 300 20,738
Capital Re Corp. 400 15,500
Capitol American Financial Corp. 400 14,500
Capsure Holdings Corp. 600 5,400
Chubb Corp. 1,200 60,000
Cigna Corp. 800 104,400
Citizens Corp. 1,400 28,175
Commerce Group Inc. 1,100 26,400
Compdent Corp.* 400 13,675
Conseco, Inc. 466 24,931
Crawford & Co. Class A 400 7,950
Crawford & Co. Class B 1,000 19,750
Delphi Financial Group, Inc. Class A 360 10,125
Enhance Financial Services Group Inc. 900 30,038
Executive Risk Inc. 300 12,375
Financial Security Assured Holdings Ltd. 1,200 33,600
Foremost Corp. of America 300 16,538
Fremont General Corp. 1,350 39,656
Frontier Insurance Group, Inc. 330 13,118
General Re Corp. 935 137,679
HCC Insurance Holdings, Inc. 750 19,125
Harleysville Group Inc. 400 11,100
Home Beneficial Corp. Class B 500 12,594
</TABLE>
38
<PAGE> 45
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Horace Mann Educators Corp. (New) 1,100 $ 37,675
ITT Hartford Group Inc. 800 50,400
Integon Corp. 500 9,438
Jefferson-Pilot Corp. 450 25,594
John Alden Financial Corp. 1,100 20,488
Kansas City Life Insurance Co. 200 10,950
Liberty Corp. 1,000 34,500
Life Re Corp. 400 14,650
Lincoln National Corp. Inc. 700 33,950
MAIC Holdings Inc. 212 6,890
MGIC Investment Corp. 400 27,450
MMI Companies, Inc. 400 11,500
Markel Corp.* 200 17,400
Marsh & McLennan Companies 1,000 104,125
NAC Re Corp. 500 17,563
Orion Capital Corp. 900 48,938
Penncorp Financial Group Inc. 1,100 38,088
Presidential Life Corp. 800 9,100
Providian Corp. 700 32,900
Reinsurance Group of America Inc. 900 40,838
Reliance Group Holdings Inc. 3,900 32,175
Safeco Corp. 800 30,300
Selective Insurance Group, Inc. 400 13,600
Sierra Health Services Inc.* 500 14,313
St. Paul Companies, Inc. 600 32,625
State Auto Financial Corp. 600 8,175
Torchmark Corp. 500 24,188
Transamerica Corp. 1,000 75,875
Trenwick Group Inc. 200 9,888
UNUM Corp. 1,000 62,875
USF&G Corp. 500 9,500
USLIFE Corp. 100 3,125
United Dental Care Inc.* 200 6,050
United Fire & Casualty Co. 400 13,000
United Wisconsin Services, Inc. 300 7,763
Vesta Insurance Group Inc. 1,200 30,750
W.R. Berkley Corp. 1,200 61,950
Washington National Corp. 400 11,450
Zenith National Insurance Corp. 400 10,900
Zurich Reinsurance Centre Holdings, Inc. 900 27,000
---------
2,768,967
---------
MEDIA--1.2%
AMC Entertainment Inc.* 400 6,900
BET Holdings, Inc. Class A* 300 8,775
Banta Corp. 1,100 23,169
Cablevision Systems Corp. Class A* 400 12,450
</TABLE>
39
<PAGE> 46
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Carmike Cinemas Inc.* 300 $ 7,125
Central Newspapers Inc. Class A 1,100 44,275
Century Communications Corp. Class A* 2,700 18,225
Comcast Corp. Class A 1,600 23,500
Dow Jones & Co. Inc. 700 23,100
Evergreen Media 900 24,188
GC Companies Inc.* 300 10,163
Gannett Inc. 1,000 75,875
Heartland Wireless Communications, Inc.* 300 6,450
Hollinger International Inc. 2,500 31,250
Houghton Mifflin Co. 1,000 49,625
International Family Entertainment Inc.
Class B 1,625 29,047
John Wiley & Son, Inc. Class A 900 27,563
Jones Intercable Inc. Class A* 1,100 12,100
King World Productions, Inc.* 300 10,800
Knight-Ridder, Inc. 600 22,425
McClatchy Newspapers Inc. Class A 1,300 36,238
McGraw-Hill, Inc. 600 28,125
Meredith Corp. 100 5,025
New World Communications Class A* 1,000 24,688
New York Times Co. Class A 700 25,288
Oak Industries Inc.* 400 10,150
Paxson Communications Corp.* 600 5,325
Regal Cinemas, Inc. 675 17,423
SBC Communications Inc. 4,600 223,675
Spelling Entertainment Group, Inc.* 3,100 22,475
TCA Cable TV Inc. 1,100 29,288
TSX Corp. 600 6,225
Tele Communications Inc. (New) -- TCI Group
Series A 4,400 54,725
Time Warner Inc. 2,900 108,025
Times Mirror Co. (New) Series A 800 37,000
Tribune Co. (New) 900 73,575
United International Holdings Inc. Class A* 600 7,500
Viacom Inc. Class B* 2,100 68,513
Westwood One Inc.* 900 13,950
---------
1,264,218
---------
MISCELLANEOUS FINANCE--2.1%
1st Source Corp. 420 9,634
AMCORE Financial, Inc. 400 8,375
Aames Financial Corp. 800 35,700
Alex Brown Inc. 900 51,075
American Express Co. 3,400 159,800
Americredit Corp.* 700 13,300
Astoria Financial Corp. 600 21,263
Beneficial Corp. 400 23,400
</TABLE>
40
<PAGE> 47
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Bok Financial Corp. (New) 500 $ 13,250
Cal-Federal Bancorp Inc.* 1,700 39,525
Charter One Financial Inc. 1,785 77,536
Coast Savings Financial Inc.* 500 16,438
Collective Bancorp Inc. 1,000 30,125
Commercial Federal Corp. 400 16,750
Dean Witter Discover & Co. 1,400 82,425
Downey Financial Corp. 420 10,920
Eaton Vance Corp. (Non Voting) 200 8,750
Federal Home Loan Mortgage Corp. 1,400 141,400
Federal National Mortgage Assoc. 7,600 297,350
First American Financial Corp. 400 15,050
First Financial Corp. 1,300 35,425
Fund American Enterprises Holdings, Inc. 200 17,925
Glendale Federal Bank (FSB) (New)* 1,500 27,563
Golden West Financial Corp. 500 32,438
Great Financial Corp. 400 11,650
Great Western Financial Corp. 1,000 28,000
Green Tree Financial Corp. 1,000 39,625
H.F. Ahmanson & Co. 600 18,825
Home Financial Corp. 600 9,713
Household International Inc. 1,200 106,200
Inter-Regional Financial Group, Inc. 300 9,713
Interpool Inc. 400 8,700
JSB Financial, Inc. 300 10,988
Jefferies Group, Inc. 400 14,300
John Nuveen Co. Class A 1,300 36,075
Legg Mason, Inc. 400 12,900
Merrill Lynch & Co. Inc. 1,200 84,300
Morgan Keegan, Inc. 700 10,238
Morgan Stanley Group Inc. 1,000 50,250
Olympic Financial Ltd.* 1,100 17,463
Peoples Heritage Financial Group, Inc. 900 20,700
Phoenix Duff & Phelp Corp. 1,500 9,188
Pioneer Group Inc. 1,100 26,125
Quick & Reilly Group, Inc. 1,100 29,013
RCSB Financial Inc. 400 11,625
Raymond James Financial Inc. 500 12,188
Roosevelt Financial Group Inc. 1,600 27,700
Salomon Inc. 800 36,100
Sovereign Bancorp Inc. 2,205 26,047
St. Paul Bancorp Inc. 500 13,250
Standard Financial Inc. 400 7,150
Student Loan Corp. 1,000 34,000
Travelers Inc. 3,600 195,300
Value Line, Inc. 300 11,363
</TABLE>
41
<PAGE> 48
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
WFS Financial Inc. 880 $ 18,370
Washington Federal, Inc. 1,500 36,094
Westcorp Inc. 1,155 27,431
White River Corp.* 300 18,000
---------
2,214,001
---------
MOTOR VEHICLE--1.2%
A.O. Smith Corp. Class B 800 21,000
Arctic Cat Inc. 700 6,606
Arvin Industries, Inc. 1,300 29,738
Borg Warner Automotive Inc. 1,100 42,213
Breed Technologies Inc. 900 20,700
Chrysler Corp. 5,000 168,125
Cummins Engine Inc. 200 8,325
Dana Corp. 700 20,738
Detroit Diesel Corp.* 600 11,100
Eaton Corp. 500 29,875
Echlin Inc. 300 9,788
Federal Mogul Corp. 1,000 22,375
Fleetwood Enterprises, Inc. 200 6,750
Ford Motor Co. 8,200 256,250
General Motors Corp. 5,400 290,925
Gentex Corp. 1,400 32,900
Genuine Parts Co. 800 35,000
Hays Wheels International Inc.* 50 1,675
Lucasvarity PLC (Sponsored American
Depository Receipts)* 276 11,109
Mascotech Inc. 1,500 23,625
Modine Manufacturing Co. 1,000 25,000
Navistar International Corp.* 5,100 47,175
PACCAR Inc. 200 11,150
Standard Products Co. 500 12,125
Superior Industries International, Inc. 1,000 24,375
TRW Inc. 700 63,350
Titan Wheel International Inc. 500 6,375
---------
1,238,367
---------
NON-FERROUS--0.5%
A.M. Castle & Co. 375 6,938
Alcan Aluminum Ltd. 1,600 52,600
Aluminum Company of America 1,600 93,800
Asarco Inc. 200 5,250
Brush Wellman Inc. 500 9,438
Coeur d'Alene Mines Corp. 500 7,313
Commercial Metals Co. 500 15,500
Cyprus Amax Minerals Co. 600 13,575
Echo Bay Mines Ltd 600 4,688
</TABLE>
42
<PAGE> 49
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Engelhard Corp. 1,000 $ 18,250
Freeport-McMoRan Copper & Gold Inc. Class B 1,400 42,525
Hecla Mining Co.* 1,100 6,188
Inco Ltd. 1,200 38,100
Kaiser Aluminum Corp.* 2,400 26,700
Minerals Technologies Inc. 1,000 39,250
Mueller Industries Inc. 900 36,225
Oregon Metallurgical Corp. 400 12,500
Phelps Dodge Corp. 1,000 62,875
RMI Titanium Co.* 700 16,888
Reliance Steel & Aluminum Co. 400 14,650
Reynolds Metals Co. 400 22,500
Stillwater Mining Co.* 600 10,125
Wolverine Tube Inc.* 400 15,950
-------
571,828
-------
OIL-DOMESTIC--0.7%
Amerada Hess Corp. 700 38,763
Ashland Inc. 400 17,000
Atlantic Richfield Co. 1,400 185,500
Cross Timbers Oil Co. 400 9,450
Diamond Shamrock Inc. 1,300 38,188
KCS Energy, Inc. 200 8,625
Kerr-McGee Corp. 400 25,100
Oryx Energy Co.* 500 9,625
Pennzoil Co. 200 10,200
Phillips Petroleum Co. 1,500 61,500
Pogo Producing Co. 1,300 57,688
Quaker State Corp. 900 15,075
Santa Fe Energy Resources, Inc.* 400 5,700
Smith International Inc.* 1,100 41,800
Snyder Oil Corp. 700 10,675
Sun Inc. 400 8,950
Tesoro Petroleum Corp.* 900 13,275
Total Petroleum (North America) Ltd. 1,300 12,513
TransTexas Gas Corp.* 2,500 34,375
USX Corp. (Marathon Group) (New) 2,000 43,750
Unocal Corp. 1,700 62,263
-------
710,015
-------
OIL-INTERNATIONAL--2.7%
Amoco Corp. 3,900 295,425
Chevron Corp. 5,300 348,475
Exxon Corp. 9,900 877,388
Mobil Corp. 3,100 361,925
Royal Dutch Petroleum Co. 4,200 694,575
</TABLE>
43
<PAGE> 50
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Texaco, Inc. 2,100 $ 213,413
Western Atlas, Inc.* 400 27,750
---------
2,818,951
---------
PAPER--0.8%
Alco Standard Corp. 900 41,738
Boise Cascade Corp. 300 9,300
Buckeye Cellulose Corp.* 800 20,900
Caraustar Industries Inc. 1,100 31,969
Champion International Corp. 700 30,450
Chesapeake Corp. 1,100 31,075
Georgia Pacific Corp. 1,100 82,500
International Paper Co. 2,100 89,775
James River Corp. 400 12,600
Kimberly Clark Corp. 2,280 212,610
Longview Fibre Co. 1,800 31,275
Louisiana Pacific Corp. 700 14,613
Mead Corp. 300 17,025
Mosinee Paper Corp. 400 11,350
P.H. Glatfelter Co. 1,500 28,500
Potlatch Corp. 100 4,275
Rock Tennessee Co. Class A 990 18,068
Shorewood Packaging Corp.* 600 11,400
Temple-Inland Inc. 400 20,500
Union Camp Corp. 500 24,375
Wausau Paper Mills Co. 1,625 31,078
Westvaco Corp. 700 19,950
Weyerhaeuser Co. 1,000 45,875
Willamette Industries, Inc. 600 40,350
---------
881,551
---------
PRODUCER GOODS-MANUFACTURING--3.3%
Albany International Corp. Class A (New) 1,300 29,250
Allied Signal Inc. 2,300 150,650
American Financial Enterprises Inc. 300 7,800
Applied Power Inc. Class A 400 14,400
AptarGroup, Inc. 500 16,125
Avery Dennison Corp. 400 26,350
BT Office Products International Inc.* 1,200 9,900
BW/IP Holding, Inc. Class A 600 8,100
Baldor Electric Co. 1,200 24,150
Barnes Group Inc. 200 11,250
Bearings Inc. (New) 300 7,800
Blyth Industries Inc. 800 31,100
Briggs & Stratton Corp. 100 4,000
Case Corp. 600 27,900
Caterpillar Inc. 1,500 102,938
</TABLE>
44
<PAGE> 51
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Cincinnati Milacron Inc. 100 $ 1,913
Clarcor Inc. 400 8,700
Collins & Aikman Corp.* 1,900 11,400
Commercial Intertech Corp. 500 5,563
Cooper Industries Inc. 800 32,200
Credence Systems Corp. 600 8,213
Cuno Inc.* 500 7,938
Deere & Co. 1,900 79,325
Donaldson Inc. 1,200 35,100
Dover Corp. 800 41,100
Duriron Inc. 1,100 29,563
Emerson Electric Co. 2,100 186,900
FMC Corp. (New)* 200 14,725
Fedders USA Inc. 1,400 8,225
Figgie International Holdings Inc. Class A* 700 7,438
Fisher Scientific International, Inc. 900 40,388
Foster Wheeler Corp. 300 12,300
General Binding Corp. 500 12,375
General Electric Co. 12,200 1,180,350
Giddings & Lewis Inc. 1,100 12,788
Goulds Pumps Inc. 1,000 23,063
Graco Inc. 450 10,294
Greenfield Industries Inc. 400 10,450
Harnischfeger Industries Corp. 200 8,000
Helix Technology Corp. 300 8,006
Herman Miller, Inc. 1,200 52,050
Hexcel Corp. (New)* 1,300 23,725
Hughes Supply Inc. 400 15,200
IDEX Corp. 1,000 37,625
ITT Industries Inc. 800 18,600
Illinois Tool Works Inc. 800 56,200
Ingersoll Rand Co. 700 29,138
Insilco Corp.* 300 11,850
Ionics Inc.* 400 18,400
Johnson Controls, Inc. 300 21,900
Juno Lighting Inc. 400 6,225
Kaydon Corp. 900 36,675
Kennametal Inc. 900 30,600
Keystone International Inc. 1,000 18,000
Lawson Products, Inc. 400 8,600
Lincoln Electric Co. 300 8,438
Lincoln Electric Co. Class A (Non Voting) 900 25,088
Lydall Inc. 400 8,850
Manitowoc Inc. 450 15,075
Measurex Corp. 400 10,300
Millipore Corp. 200 7,000
</TABLE>
45
<PAGE> 52
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Myers Industry Inc. 500 $ 7,750
NN Ball & Roller, Inc. 400 5,400
Nu-Kote Holding Inc. Class A 500 4,781
Pall Corp. 600 15,375
Parker Hannifin Corp. 500 18,938
Precision Castparts Corp. 1,000 46,750
Quanex Corp. 300 8,550
Raychem Corp. 800 62,500
Roper Industries 400 17,025
SPS Technologies, Inc.* 100 6,000
SPX Corp. 500 14,188
Standex International Corp. 400 12,300
Stewart & Stevenson Services, Inc. 900 19,069
Teleflex Inc. 500 24,063
Tencor Instruments 1,100 20,900
Tenneco, Inc. 1,200 59,400
Texas Industries Inc. 300 17,025
Thermo Ecotek Corp. 900 13,613
Timken Co. 100 4,463
TriMas Corp. 1,300 29,900
Tyco Labs Inc. 1,100 54,588
U.S. Filter Corp. (New) 1,650 56,925
UNR Industries, Inc. 1,200 8,025
Valhi, Inc. (New) 3,900 22,913
Valmont Industries, Inc. 300 10,275
Visx Inc. (Delaware)* 500 12,500
W.H. Brady Co. Class A 800 18,700
W.W. Grainger, Inc. 400 29,650
WMS Industries Inc.* 600 14,700
Watts Industries Inc. Class A 1,300 27,138
Westinghouse Electric Corp. 2,900 49,663
Westpoint Stevens Inc. Class A 1,300 34,613
Wyman Gordon Co.* 1,000 21,875
X-Rite, Inc. 500 9,281
---------
3,506,405
---------
RAILROAD--0.5%
Burlington Northern Santa Fe 1,300 107,088
CSX Corp. 1,700 73,313
Conrail Inc. 1,000 95,125
Florida East Coast Industry Inc. 300 26,213
Norfolk Southern Corp. 1,400 124,775
Overseas Shipholding Group 1,400 23,800
Union Pacific Corp. 1,700 95,413
Westinghouse Air Brake Co. (New) 600 6,525
---------
552,252
---------
</TABLE>
46
<PAGE> 53
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
REAL PROPERTY--0.2%
Avatar Holdings, Inc.* 200 $ 6,100
Castle & Cooke, Inc.* 700 10,763
Catellus Development Corp.* 2,700 26,663
Doubletree Corp.* 600 24,375
Forest City Enterprises, Inc. Class A 200 9,900
HFS, Inc. 900 65,925
Insignia Financial Group Class A (New) 1,100 23,788
Lennar Corp. 1,400 31,150
Price Enterprises Inc. 700 11,725
-------
210,389
-------
RETAIL--2.7%
Albertson's, Inc. 1,800 61,875
American Stores Co. (New) 1,000 41,375
AnnTaylor Stores Corp.* 500 9,063
Arbor Drugs, Inc. 1,100 25,025
Authentic Fitness Corp. 500 5,563
Burlington Coat Factory Warehouse* 1,100 13,475
CDW Computer Centers Inc. 600 37,650
CUC International Inc. 2,644 64,772
Carson Pirie Scott & Co.* 400 9,950
Casey's General Stores Inc. 700 12,556
Charming Shoppes Inc. 3,600 16,538
Circuit City Stores Inc. 700 22,925
Claire's Stores Inc. 1,725 29,325
CompUSA Inc. 2,000 92,500
Dayton Hudson Corp. 1,200 41,550
Dillard Department Stores Inc. Class A 800 25,400
Dollar Tree Stores Inc. 1,000 38,000
Duty Free International Inc. 800 12,800
Eagle Hardware & Garden, Inc.* 800 22,750
Federated Department Stores Inc.* 1,400 46,200
Fingerhut Companies, Inc. 1,300 19,338
Footstar Inc.* 172 3,784
Fred Meyer Inc.* 1,200 42,150
Fruit of the Loom Inc. Class A* 400 14,550
Gap Inc. 2,000 58,000
Giant Food Inc. Class A 300 10,125
Great Atlantic & Pacific Tea Co., Inc. 200 6,000
Gymboree Corp.* 1,100 34,513
Harcourt General Inc. 600 29,850
Hollywood Entertainment Corp. 900 18,619
Home Depot Inc. 3,600 197,100
J.C. Penney Inc. 1,600 84,000
Just for Feet Inc. 750 19,547
K Mart Corp. 3,100 30,225
</TABLE>
47
<PAGE> 54
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Kroger Co.* 800 $ 35,700
Lands' End, Inc.* 1,000 21,500
Limited Inc. 1,997 36,695
Longs Drug Stores Corp. 1,000 44,875
Lowes Cos Inc. 1,100 44,413
MacFrugals Bargains-Close-Outs, Inc.* 600 14,625
May Department Stores Co. 1,700 80,538
Melville Corp. 600 22,350
Mercantile Stores Co., Inc. 300 14,888
Michaels Stores Inc.* 500 5,000
Nordstrom Inc. 500 18,031
Payless Shoesource Inc.* 272 9,214
Pep Boys -- Manny, Moe & Jack 300 10,500
Petco Animal Supplies Inc. 300 7,013
Pier 1 Imports Inc. 1,400 19,600
Price Costco Inc.* 1,300 25,756
Proffitt's, Inc.* 1,200 48,300
Quality Food Centers, Inc. 400 14,700
Regis Corp. 450 10,913
Rite Aid Corp. 600 20,400
Ross Stores Inc. 1,000 41,438
Ruddick Corp. 1,600 20,800
Sears Roebuck & Co. 2,900 140,288
Service Merchandise Co. Inc.* 2,700 15,863
Shopko Stores Inc. 900 14,513
Smart & Final Inc. 500 11,750
Smith's Food & Drug Centers, Inc. Class B 668 17,452
Sotheby's Holdings, Inc. Class A 1,600 27,200
Stanhome Inc. 500 13,250
Stein Mart Inc.* 500 8,938
TJX Companies, Inc. 600 24,000
Tandy Corp. 400 15,050
Tiffany & Co. (New) 1,800 66,600
Toys "R" Us, Inc.* 1,700 57,588
Unifirst Corp. 600 12,075
United Stationers Inc. 400 8,850
Urban Outfitters Inc. 600 9,300
Value City Department Stores Inc.* 1,100 14,025
Vitalink Pharmacy Services, Inc.* 300 6,900
Waban Inc.* 1,300 33,963
Wal-Mart Stores, Inc. 16,600 441,975
Walgreen Co. 1,700 64,175
Wet Seal Inc.* 500 15,656
Whole Foods Market, Inc.* 500 12,844
Winn Dixie Stores Inc. 1,100 36,713
</TABLE>
48
<PAGE> 55
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Woolworth Corp.* 700 $ 14,700
Zale Corp. (New)* 1,000 19,375
---------
2,867,385
---------
STEEL--0.2%
Allegheny Teldyne Inc. 770 16,459
Armco Inc.* 2,800 10,500
Bethlehem Steel Corp.* 500 4,063
Birmingham Steel Corp. 1,200 19,200
Carpenter Technology Corp. 900 29,363
Chaparral Steel Co. 1,200 15,900
Cleveland Cliffs Inc. 300 12,300
Inland Steel Industries, Inc. 200 3,225
Intermet Corp. 700 8,181
J & L Specialty Steel Inc. 1,100 12,925
Lukens Inc. 400 5,500
National Steel Corp. Class B* 1,200 10,350
Nucor Corp. 600 28,425
Oregon Steel Mills Inc. 400 6,350
Rouge Steel Co. Class A 300 6,113
USX Corp. (U.S. Steel Group) 500 13,625
Worthington Industries Inc. 500 10,344
---------
212,823
---------
TELEPHONE--2.9%
ACC Corp. 600 25,200
AT&T Corp. 12,800 446,400
Airtouch Communications Inc.* 3,600 94,050
Aliant Communications Inc. 1,400 22,400
Alltel Corp. 1,200 36,600
American Mobile Satellite Corp.* 1,100 11,550
Ameritech Corp. (New) 4,300 235,425
Andrew Corp. 500 24,375
Antec Corp.* 500 5,344
Arch Communications Group, Inc.* 800 9,250
Associated Group Inc. Class A* 500 14,375
Bell Atlantic Corp. 3,800 228,950
BellSouth Corp. 6,900 281,175
Boston Technology Inc. (New)* 700 11,594
C-TEC Corp.* 1,200 29,025
CFW Communications Co. 500 11,000
Cellular Communications International* 400 12,600
Centennial Cellular Corp. Class A* 400 5,150
Cidco Inc.* 400 7,650
Coherent Communications Systems Corp. 400 7,825
Coherent Inc.* 300 11,738
Comnet Cellular Inc.* 300 8,325
</TABLE>
49
<PAGE> 56
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
DSC Communications Corp.* 700 $ 9,756
Emmis Broadcasting Corp. Class A* 200 7,213
GTE Corp. 6,700 282,238
General Datacom Industries Inc.* 500 4,813
Geotek Communications Inc.* 1,200 8,850
InterVoice, Inc.* 500 6,469
Interdigital Commerce Corp.* 1,000 6,438
Intermedia Communications Inc.* 500 15,875
Intermediate Telephone Inc.* 500 7,625
International Cabletel Inc. 1,300 30,713
Jacor Communications Inc.* 1,300 35,994
MCI Communications Corp. 5,000 125,313
Mobile Telecommunications Technologies
Corp.* 1,900 25,056
Mobilemedia Corp. Class A* 1,000 1,984
Northern Telecom Ltd 2,200 143,275
Nynex Corp. 3,200 142,400
Octel Communications Corp. 2,200 35,063
P-Com Inc. 500 11,000
Pacific Telesis Group 2,600 88,400
Pairgain Technologies Inc. 1,800 123,750
Plantronics, Inc. (New)* 200 7,525
Renaissance Communications Corp. 1,300 45,988
Roseville Communications Co. 500 11,688
Sprint Corp. 2,600 102,050
Tellabs Inc. 600 51,075
U S Long Distance Corp. 500 4,219
U S WEST, Inc. (Communications Group) 3,400 103,275
U S WEST, Inc. (Media Group)* 3,200 50,000
Vanguard Cellular Systems, Inc. Class A* 1,200 19,875
Winstar Communications Inc.* 900 18,844
Worldcom, Inc. 2,300 56,206
---------
3,122,971
---------
TOBACCO--0.8%
American Brands, Inc. 1,200 57,300
Loew's Corp. 1,300 107,413
Philip Morris Companies, Inc. 6,700 620,588
Schweitzer Mauduit International Inc. 700 21,525
UST Inc. 1,000 28,875
---------
835,701
---------
TRANSPORTATION-MISCELLANEOUS--0.4%
APL Ltd. 800 17,600
Air Express International Corp. 500 15,063
Airbourne Freight Corp. 1,000 19,875
American Freightways Corp.* 700 6,781
Arnold Industries Inc. 800 12,600
</TABLE>
50
<PAGE> 57
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Caliber Systems Inc. 200 $ 3,375
Consolidated Freightways Inc. 200 4,800
Expeditores International of Washington Inc. 300 12,600
Federal Express Corp. 400 32,200
Harper Group, Inc. 500 11,938
Heartland Express, Inc. 1,441 31,522
J.B. Hunt Transport Services Inc. 1,100 16,294
Landstar Systems, Inc.* 300 7,125
NACCO Industries, Inc. Class A 400 18,500
Pittston Co. (Burlington Group) 800 14,900
Pittston Brinks Group 200 5,700
Roadway Express Inc. 1,050 16,800
Rollins Truck Leasing Corp. 1,100 12,513
Ryder System, Inc. 400 11,900
Swift Transportation Inc.* 600 13,575
U.S. Freightways Corp. 600 13,163
Wabash National Corp. 600 9,675
Werner Enterprises Inc. 1,650 28,669
XTRA Corp. 600 24,900
Yellow Corp. 900 11,756
-------
373,824
-------
TRAVEL & RECREATION--0.8%
Acxiom Corp. 1,100 43,038
Anchor Gaming* 800 39,800
Aztar Corp.* 900 7,313
Bally Entertainment Corp. 2,000 60,250
Boyd Gaming Corp.* 2,100 15,488
Brunswick Corp. 500 11,750
Central Parking Corp. 600 20,775
Harrahs Entertainment Inc.* 700 11,725
Hilton Hotels Corp. 3,200 97,200
ITT Corp. (New)* 800 33,600
K2 Inc. 400 9,200
Marcus Corp. 500 11,125
Marriott International Inc. 900 51,188
National Auto Credit Inc. 660 7,095
Players International Inc. 700 4,791
Primadonna Resorts Inc.* 900 14,456
Prime Hospitality Corp.* 1,500 22,875
Rio Hotel & Casino Inc.* 500 7,250
Showboat, Inc. 500 9,500
Sodak Gaming, Inc. 800 14,400
Sports Authority Inc. 750 18,188
Station Casinos Inc.* 1,000 11,125
</TABLE>
51
<PAGE> 58
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Stratosphere Corp.* 1,900 $ 2,702
Walt Disney Co. 5,473 360,534
-------
885,368
-------
UTILITIES--2.1%
American Electric Power Co., Inc. 900 37,350
Aquila Gas Pipeline Corp. 700 10,150
Atmos Energy Corp. 500 11,875
Baltimore Gas & Electric Co. 500 13,625
Bay State Gas Co. 300 8,475
Black Hills Corp. 400 10,200
Carolina Power & Light Co. 1,000 36,125
Central & South West Corp. 1,000 26,500
Central Hudson Gas & Electric Corp. 500 15,000
Central Louisiana Electric Co. (New) 1,100 29,838
Central Maine Power Co. 900 10,575
Cilcorp Inc. 900 32,850
Cinergy Corp. 1,100 36,438
Coastal Corp. 700 30,100
Columbia Gas System, Inc. 400 24,300
Commonwealth Energy System
(Shares of Beneficial Interest) 600 14,400
Consolidated Edison Co. 1,500 43,875
Consolidated Natural Gas Co. 600 31,875
DTE Energy Co. 1,000 30,125
Destec Energy, Inc.* 2,000 30,000
Dominion Resources Inc. 800 30,200
Duke Power Co. 1,400 68,425
ENSERCH Corp. 300 6,450
Eastern Enterprises 1,100 42,350
Eastern Utilities Association 1,000 16,125
Edison International 2,800 55,300
Empire District Electric Co. 400 7,500
Enron Corp. 1,800 83,700
Entergy Corp. 1,200 33,600
FPL Group, Inc. 900 41,400
GPU Inc. 800 26,300
Global Industrial Technologies Inc.* 700 13,038
Houston Industries Inc. 1,400 32,025
IES Industries Inc. 1,300 39,975
Indiana Energy Inc. 600 14,700
Interstate Power Co. 300 9,113
Laclede Gas Co. 400 9,350
MDU Resources Group, Inc. 1,200 26,850
Madison Gas & Electric Co. 450 9,281
Minnesota Power & Light Co. 1,100 31,075
NICOR Inc. 200 6,975
</TABLE>
52
<PAGE> 59
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
New Jersey Resources Corp. 500 $13,813
Niagara Mohawk Power Corp. 700 5,950
NorAm Energy Co. 600 9,225
Northern States Power Co. 500 23,500
Northwest Natural Gas Co. 600 15,113
Ohio Edison Co. 600 12,525
Oneok Inc. 900 24,188
Orange & Rockland Utilities, Inc. 400 14,050
Otter Tail Power Co. 300 9,713
P P & L Resources Inc. 800 18,700
Pacific Enterprises 400 12,300
Pacific Gas & Electric Co. 2,600 61,100
Pacificorp 1,600 33,800
Panhandle Eastern Corp. 1,100 42,350
Peco Energy Co. 1,100 27,775
Peoples Energy Corp. 100 3,525
Philadelphia Suburban Corp. 600 10,200
Piedmont Natural Gas Inc. 1,200 29,400
Primark Corp.* 1,100 27,363
Public Service Co. of New Mexico 1,200 22,500
Public Service Co. of North Carolina Inc. 400 7,200
Public Service Enterprise Group 1,800 48,375
Rochester Gas & Electric Corp. 1,300 24,213
Seagull Energy Corp.* 2,016 43,596
Sierra Pacific Resources 1,300 36,238
SIGCORP, Inc. 900 30,600
Sonat Inc. 600 29,550
Southern Co. 4,500 99,563
Southern Union Co. (New) 400 9,950
Southwest Gas Corp. 700 13,388
Southwestern Energy Co. 600 8,925
Tejas Gas Corp. 1,200 48,750
Texas Utilities Co. 1,300 52,650
TNP Enterprises Inc. 400 10,350
Triarc Cos., Inc. Class A* 700 8,225
Tucson Electric Power Co.* 860 16,985
UGI Corp. (New) 1,300 30,713
Unicom Corp. 1,100 28,600
Union Electric Co. 700 27,038
United Illuminating Co. 400 13,300
United Water Resources Inc. 900 14,063
WPS Resources Corp. 1,100 32,725
Washington Energy Co. 600 11,550
Western Gas Resources Inc. 600 9,525
</TABLE>
53
<PAGE> 60
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Wicor Inc. 900 $ 32,063
Williams Cos. Inc. 700 36,575
----------
2,229,208
----------
59,785,373
----------
INTERNATIONAL--19.9%
AUSTRALIA--0.5%
Australia & New Zealand Banking Group 7,295 42,616
Broken Hill Proprietary Co., Ltd. 9,593 127,364
Coca Cola Amatil 2,473 34,010
Commonwealth Bank Group 4,999 46,955
Commonwealth Bank Group
(Installment Receipts) 1,007 6,074
National Australia Bank 7,275 79,866
News Corp., Ltd. 9,738 55,421
Western Mining Corp. 5,402 33,955
Westpac Banking Corp. 9,225 52,647
----------
478,908
----------
BELGIUM--0.2%
Electrabel 261 60,585
Electrabel, VVPR Strip 44 45
Fortis AG 180 25,277
Generale de Banque 65 22,716
Petrofina SA 95 29,210
Societe Generale de Belgique 322 24,055
Tractebel 32 15
Tractebel Investor International 88 41,898
----------
203,801
----------
CANADA--0.6%
Alcan Aluminum Ltd. 1,166 38,281
BCE Inc. 1,527 70,129
Bank of Montreal 1,274 38,547
Bank of Nova Scotia, Halifax 1,134 35,750
Barrick Gold Corp. 2,344 61,390
Canadian Imperial Bank of Commerce 1,049 43,597
Canadian Pacific Ltd 1,663 42,065
Imperial Oil Ltd. (New) 914 40,271
Noranda Inc. 1,178 25,974
Northern Telecom Ltd. 1,235 80,447
Placer Dome Inc. 1,161 27,851
Royal Bank of Canada, Montreal Quebec 1,525 50,409
Seagram Co. Ltd. 1,818 68,504
Thomson Corp. 2,880 57,914
----------
681,129
----------
</TABLE>
54
<PAGE> 61
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
DENMARK--0.1%
D/S 1912 Class B 1 $ 25,119
D/S Svendborg Class B 1 35,958
Novo Nordisk A/S Series B 182 30,311
Tele Danmark A/S Series B 636 32,061
---------
123,449
---------
FRANCE--1.3%
AXA Groupe SA 936 58,146
Alcatel Alsthom CGE SA 760 64,814
Banque Nationale de Paris 975 36,483
Canal Plus 117 28,950
Carrefour 187 103,769
Compagnie Financiere de Paribas (Bearer) 584 37,582
Compagnie Generale de Eaux 586 70,033
Compagnie de Saint-Gobain SA 414 55,875
Danone Groupe 352 48,196
Elf Aquitaine 1,319 105,468
L'Air Liquide 354 54,632
L'Oreal SA 327 110,716
LVMH Moet Hennessy Louis Vuitton 424 97,199
Lafarge Coppee SA 459 27,544
Lyonnaise des Eaux-Dumez 287 25,374
Michelin (CGDE) Class B (Reg.) 564 27,193
PSA Peugeot Citroen 243 25,334
Pinault Printemps Redoute SA 109 41,106
Renault (Reg.) 1,184 25,243
Rhone-Poulenc SA A Shares 1,591 47,147
Roussel Uclaf 132 34,933
Sanofi 505 45,744
Schneider SA 656 32,078
Societe Generale 434 46,774
Suez Group 802 34,527
TOTAL Class B 1,165 91,126
Union des Assurances de Paris 1,593 33,091
---------
1,409,077
---------
GERMANY--1.5%
BASF AG 2,960 94,601
Bayer AG 3,315 125,254
Bayerische Hypotheken & Wechsel Bank AG 1,052 30,808
Bayerische Motoren Werk AG 80 46,804
Bayerische Vereinsbank AG 984 37,004
Commerzbank AG 1,680 37,640
Daimler Benz AG 2,490 146,171
Deutsche Bank AG 2,271 105,182
Dresdner Bank AG 2,153 57,578
</TABLE>
55
<PAGE> 62
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Hoechst AG 2,560 $ 96,270
Linde AG 31 19,191
Lufthansa AG 2,280 29,810
Mannesmann AG 153 59,406
Metro AG 426 34,937
Muenchener Rueckversicherung (Reg.) 34 81,273
RWE AG 3,571 147,000
RWE AG (Non Voting) 1,501 50,945
Sap AG 248 33,571
Siemens AG 2,718 140,441
Thyssen AG 128 22,905
Veba AG 2,360 125,870
Vereinigte Elektrizitatswerke Westfalen
Series B 82 27,290
Viag AG 99 36,609
Viag AG* 20 7,277
Volkswagen AG 110 43,309
---------
1,637,146
---------
HONG KONG--0.8%
CITIC Pacific 11,000 53,491
Cathay Pacific Airways 13,000 20,343
Cheung Kong Holdings 8,000 64,147
China Light & Power 11,000 51,072
Hang Seng Bank Ltd. 8,400 99,674
Henderson China 24 54
Henderson Land Development Co. 6,000 53,348
Hong Kong Electric Holdings Ltd. 26,000 83,223
Hong Kong Telecommunications Ltd. 43,966 77,615
Hutchison Whampoa Ltd. 13,000 90,789
New World Development Co. 10,190 59,304
Sun Hung Kai Properties 9,000 102,429
Swire Pacific Ltd. Class A 7,000 61,787
Wharf Holdings 12,000 49,507
---------
866,783
---------
ITALY--0.4%
Assicurazioni Generali 4,018 77,605
Fiat SpA 14,966 40,005
Fiat SpA, di Risp (Non-Convertible) 6,565 9,521
INA 14,965 20,667
Istituto Bancario San Paolo di Torino 3,834 22,746
STET 17,472 60,352
STET di Risp (Non-Convertible) 5,004 13,326
Telecom Italia 30,252 67,404
Telecom Italia di Risp (Non-Convertible) 9,137 17,407
</TABLE>
56
<PAGE> 63
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Telecom Italia Mob 30,252 $ 62,518
Telecom Italia Mob di Risp 11,325 12,915
-------
404,466
-------
JAPAN--6.4%
Ajinomoto Co., Inc. 2,000 21,255
All Nippon Airways Co., Ltd. 4,000 33,341
Asahi Bank 7,000 71,934
Asahi Chemical Industry Co. 4,000 24,944
Asahi Glass Co., Ltd. 4,000 42,159
Bank of Tokyo-Mitsubishi, Ltd. 15,400 313,803
Bank of Yokohama 3,000 22,239
Bridgestone Corp. 3,000 50,591
Canon Inc. 3,000 57,441
Chiba Bank 2,000 15,037
Chubu Electric Power Co. 3,000 61,921
Chugoku Electric Power Co., Inc. 1,000 20,113
DDI Corp. 6 45,057
Dai Nippon Printing Co. 2,000 33,727
Dai-Ichi Kangyo Bank, Ltd. 10,000 162,487
Daiei Inc. 2,000 17,742
Daiwa Bank 4,000 22,660
Daiwa House Industries Co. 1,000 13,877
Daiwa Securities Co. 4,000 43,213
Denso Corp. 3,000 62,184
East Japan Railway Co. 12 55,123
Fanuc 1,000 32,058
Fuji Bank, Ltd. 10,000 180,054
Fuji Photo Film Co. 2,000 57,441
Fujitsu Ltd. 6,000 52,699
Gunma Bank 1,000 8,871
Hachijuni Bank 3,000 30,038
Hitachi Ltd. 11,000 97,580
Honda Motor Co., Ltd. 3,000 71,670
Industrial Bank of Japan, Ltd. 9,560 190,604
Ishikawajima-Harima Heavy Industries 3,000 13,833
Isuzu Motors Ltd. 4,000 19,780
Ito-Yokado Co., Ltd. 1,000 49,888
Itochu Corp. 4,000 24,136
Japan Air Lines Co., Ltd. 6,000 34,254
Japan Telecom Co. 1 24,066
Japan Tobacco Inc. 6 42,370
Joyo Bank 3,000 19,815
Joyo Bank (Rights expire 11/20/96)* 100 309
Jusco Co. 1,000 29,687
Kajima Corp. 3,000 25,796
Kansai Electric Power Co. 3,600 75,570
</TABLE>
57
<PAGE> 64
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Kao Corp. 2,000 $ 23,539
Kawasaki Heavy Industries 4,000 18,304
Kawasaki Steel Co. 8,000 24,663
Kinki Nippon Railway Co. 4,120 27,321
Kirin Brewery Co., Ltd. 3,000 30,829
Kobe Steel 9,000 21,343
Kokusai Denki 1,000 86,514
Komatsu Ltd. 3,000 24,558
Kubota Corp. 4,000 22,625
Kyocera Corp. 1,000 65,961
Kyushu Electric Power Co. 2,000 40,929
Long-Term Credit Bank of Japan 7,000 46,419
Marubeni Corp. 4,000 18,515
Marui Co. 1,000 18,532
Matsushita Electric Industrial Co., Ltd. 7,000 111,897
Matsushita Electric Works 2,000 19,323
Mazda Motor Corp. 5,000 22,177
Mitsubishi Chemical Corp. 5,000 20,421
Mitsubishi Corp. 5,000 55,773
Mitsubishi Electric Corp. 7,000 40,516
Mitsubishi Estate Co. 4,000 49,888
Mitsubishi Heavy Industries 11,000 84,537
Mitsubishi Materials Co. 7,000 31,110
Mitsubishi Motors 2,000 16,547
Mitsubishi Trust & Banking Corp. 4,000 59,022
Mitsui & Co. 5,000 40,402
Mitsui Fudosan Co. 2,000 24,768
Mitsui Trust & Banking Co. 4,000 38,646
Murata Manufacturing Co. 1,000 32,146
NEC Corp. 5,000 54,455
NKK Corp. 8,000 20,096
NTT Data Corp. 1 29,599
Nikko Securities Co. 4,000 38,294
Nintendo Co., Ltd. 1,000 63,941
Nippon Credit Bank 9,000 27,113
Nippon Express Co. 3,000 24,373
Nippon Oil Co. 3,000 17,127
Nippon Paper Industries Co. 2,000 11,278
Nippon Steel Corp. 23,000 67,068
Nippon Telegraph & Telephone Corp. 54 377,059
Nippon Yusen Kabushiki Kaisha 6,000 30,038
Nissan Motor Co., Ltd. 8,000 60,498
Nomura Securities Co., Ltd. 7,000 115,586
Obayashi Corp. 2,000 15,423
Odakyu Electric Railway Co. 60 370
Oji Paper Co. (New)* 1,000 7,308
</TABLE>
58
<PAGE> 65
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Osaka Gas Co. 7,000 $ 21,642
Ricoh Co., Ltd. 2,000 19,850
Rohm Co. 1,000 59,286
Sakura Bank 12,000 113,829
Sankyo Co. 2,000 49,537
Sanwa Bank 10,000 170,392
Sanyo Electric Co., Ltd. 5,000 24,241
Secom Co. 1,000 59,549
Seibu Railway Co. 2,000 95,736
Sekisui Chemical Co. 1,000 11,155
Sekisui House 2,000 21,079
Seven-Eleven Japan Co. 1,100 63,959
Sharp Corp. 4,000 60,779
Shikoku Electric Power Co. 1,000 20,201
Shimizu Corp. 2,000 18,093
Shin-Etsu Chemical Co. 1,050 17,983
Shizuoka Bank 2,000 22,836
Sony Corp. 1,000 59,989
Sumitomo Bank 11,000 193,228
Sumitomo Chemical Co. 6,000 25,612
Sumitomo Corp. 3,000 24,215
Sumitomo Electric Industries 2,000 26,349
Sumitomo Marine & Fire Insurance Co. 2,000 14,334
Sumitomo Metal Industries 7,000 19,244
Sumitomo Trust & Banking Co. 4,000 44,267
Suzuki Motor Corp. 1,000 10,188
TDK 1,000 58,671
Taisei Corp. 2,000 12,296
Taisho Pharmaceutical Co. 1,000 19,850
Takeda Chemical Industries 3,000 51,381
Tobu Railway Co. 2,000 11,260
Tohoku Electric Power Co. 1,500 30,433
Tokai Bank 7,000 81,156
Tokio Marine & Fire Insurance Co. 5,000 54,894
Tokyo Electric Power Co., Inc. 4,600 105,450
Tokyo Gas Co. 7,000 21,826
Tokyu Corp. 3,000 20,157
Tonen Corp. 2,000 25,647
Toppan Printing Co. 2,000 24,417
Toray Industries Inc. 4,000 24,136
Toshiba Corp. 10,000 62,536
Tostem Corp. 1,000 28,721
Toyo Seikan Kaisha 1,000 31,619
Toyo Trust & Banking Co. 2,000 17,074
Toyoda Automatic Loom 1,000 18,532
Toyota Motor Corp. 13,000 307,145
</TABLE>
59
<PAGE> 66
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Yamaichi Securities Co. 3,000 $ 16,705
Yamanouchi Pharmaceutical Co. 1,000 20,289
Yasuda Fire & Marine Insurance Co. 2,000 12,700
Yasuda Trust & Banking Co. 6,000 29,248
---------
6,701,934
---------
NETHERLANDS--1.2%
ABN-Amro Holdings NV 1,584 89,530
Aegon NV 1,298 66,021
Akzo Nobel NV 345 43,473
Dordtsche Petrol 173 30,079
Elsevier NV 3,213 53,402
Fortis Amev NV, CVA 249 7,441
Heineken NV 244 46,091
ING Groep NV 3,643 113,582
Koninklijke Ahold NV 788 45,979
Koninklijke PTT Nederland 2,341 84,716
Philips Electronics NV 1,675 59,035
PolyGram NV 874 41,055
Royal Dutch Petroleum Co. (Bearer) 2,603 429,870
SGS-Thomson Microelectronics NV* 391 20,718
Unilever NV, CVA 777 118,151
Wolters Kluwer NV, CVA 328 42,162
---------
1,291,305
---------
SINGAPORE--0.3%
City Developments 3,000 23,642
Hong Kong Land Holdings 11,396 25,413
Jardine Matheson Holdings Ltd. 265 1,497
Overseas Chinese Bank (alien market) 4,418 50,500
Singapore Airlines Ltd. (alien market) 5,000 44,018
Singapore Telecommunications 66,000 153,695
United Overseas Bank (alien market) 4,000 38,907
---------
337,672
---------
SPAIN--0.4%
Argentaria Corp. 609 23,865
Banco Bilbao-Vizcaya SA (Reg.) 1,091 53,013
Banco de Santander SA (Reg.) 775 39,784
Empresa Nacional de Electricidad 1,262 77,246
Gas Natural SDG SA 181 31,662
Iberdrola SA 4,508 47,873
Repsol, SA 1,457 47,560
Telefonica Internacional de Espana, SA 4,561 91,510
---------
412,513
---------
</TABLE>
60
<PAGE> 67
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
SWEDEN--0.4%
ABB Series A 273 $ 30,930
ABB Series B 106 11,816
Astra AB Series A 2,285 104,942
Astra AB Series B 557 25,412
L.M. Ericsson Telephone Series B 4,649 125,845
Sandvik AB Series A 1,016 23,949
Sandvik AB Series B 929 21,898
Swedish Match Company* 1,833 5,464
Volvo AB Series A 518 10,713
Volvo AB Series B 1,315 27,297
---------
388,266
---------
SWITZERLAND--1.3%
ABB AG (Bearer) 39 48,195
ABB AG (Reg.) 45 10,965
CS Holding (Reg.) 805 80,404
Ciba-Geigy Ltd. (Bearer) 12 14,715
Ciba-Geigy Ltd. (Reg.) 123 151,512
Cie Financiere Richemont Series A (Bearer) 28 42,642
Nestle Ltd. (Reg.) 190 206,384
Roche Group Holding AG 34 257,152
Roche Group Holding AG (Bearer) 7 85,839
Sandoz Ltd. (Bearer) 12 13,899
Sandoz Ltd. (Reg.) 170 196,495
Schweizerische Bankgesellschaft (Bearer) 97 92,396
Schweizerische Bankgesellschaft (Reg.) 61 11,775
Schweizerischer Bankverein (Reg.) 554 106,724
Winterthur (Reg.) 43 25,616
Zurich Versicherung (Reg.) 207 56,663
---------
1,401,376
---------
UNITED KINGDOM--4.5%
Abbey National PLC 6,411 66,573
Allied Domecq PLC 5,111 39,431
Associated British Foods PLC 5,339 36,671
BAA PLC 5,080 40,928
BAT Industries 14,986 103,907
BOC Group 2,336 32,356
BTR PLC 19,375 81,202
Barclays PLC 7,892 123,891
Bass PLC 4,265 54,701
Boots Co. 4,622 46,867
British Aerospace PLC 2,038 38,710
British Airways PLC 4,777 42,996
British Gas 21,063 65,479
British Petroleum Co. 27,586 296,446
</TABLE>
61
<PAGE> 68
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
British Sky Broadcast 8,327 $ 78,201
British Steel 8,787 24,420
British Telecom 30,272 185,997
Cable & Wireless 10,862 86,274
Cadbury Schweppes 4,878 40,650
Commercial Union Assurance Co. 3,334 35,272
GKN 3,000 56,396
General Electric Co. 13,345 82,537
Glaxo Wellcome 16,832 264,370
Granada Group 2,853 41,095
Grand Metropolitan, Inc. 10,356 78,125
Great University Stores 4,883 48,798
Guinness 9,327 66,795
HSBC Holdings 4,285 90,038
HSBC Holdings (Hong Kong) 8,905 182,477
Hanson Industries 26,627 34,887
Imperial Chemical Industries 3,515 45,139
Imperial Tobacco* 2,662 15,598
J. Sainsbury PLC 8,966 53,119
Kingfisher 3,303 35,213
Legal & General Group 5,345 28,187
Lloyds Abbey Life 3,041 31,058
Lloyds TSB Group 36,634 232,242
Marks & Spencer PLC 13,601 114,227
National Power Development 5,482 36,136
National Westminster Bancorp 8,793 100,395
Pearson, Inc. 2,688 33,163
Powergen 3,259 27,052
Prudential Corp. 9,445 71,483
RTZ Corp. PLC 5,226 83,613
Rank Group 11,442 76,075
Reed International 2,744 51,093
Rentokil Group 4,749 31,884
Reuters Holdings PLC 8,143 101,390
Royal Bank of Scotland 3,944 32,289
Safeway PLC 5,641 33,466
Scot & Newcastle 2,969 30,855
Scottish Power 10,000 51,107
Shell Transport & Trading Co. 16,092 263,747
Siebe 2,102 32,981
SmithKline Beecham PLC (New) 12,072 149,132
Standard Chartered PLC 4,782 51,603
Tesco 10,239 55,495
Thorn EMI 2,127 41,785
Unilever 3,941 82,810
Vendome Lux Group SA (units) 3,387 31,974
</TABLE>
62
<PAGE> 69
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Vodafone Group 14,919 $ 57,670
Whitbread 2,092 24,516
Zeneca Group 4,593 123,824
----------
4,696,811
----------
21,034,636
----------
TOTAL COMMON STOCK
(Cost $71,823,293) 80,820,009
----------
PREFERRED STOCK--0.1%
AUSTRALIA--0.0%
News Corp. (Limited Voting Shares) 5,399 23,751
----------
GERMANY--0.0%
Sap AG (Non-Voting) 175 23,551
Volkswagen AG (Non-Voting) 42 12,744
----------
36,295
----------
ITALY--0.0%
Fiat SpA 5,589 7,921
----------
UNITED STATES--0.0%
Aetna Inc. 6.25% Class C (Voting) 74 5,189
Fresenius National Medical Care Inc. Class D
(Special Dividend)* 700 91
----------
5,280
----------
TOTAL PREFERRED STOCK (Cost $74,132) 73,247
----------
WARRANTS--0.0%
SWITZERLAND--0.0%
Schweizerischer Bankverein (expire 6/30/00)* 30 77
----------
UNITED STATES--0.0%
Jacor Communications Inc. (expire 09/18/01)* 600 1,256
----------
TOTAL WARRANTS
(Cost $13,512) 1,333
----------
</TABLE>
63
<PAGE> 70
SCHWAB ASSET DIRECTOR--HIGH GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Par Value
---------- ------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--17.6%(a)
U.S. Treasury Bonds
7.25%, 05/15/16 $9,650,000 $ 10,223,114
7.50%, 11/15/16 500,000 542,575
8.13%, 08/15/19 5,100,000 5,909,166
7.25%, 08/15/22 1,900,000 2,015,045
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost
$17,908,627) 18,689,900
-----------
CASH EQUIVALENTS--10.1%
Federal Home Loan Bank
Consolidated Discount Notes(b)
5.30%, 01/30/97 4,950,000 4,886,243
Federal Home Loan Mortgage Corp. Discount
Notes(b)
5.30%, 11/01/96 3,140,000 3,140,000
<CAPTION>
Shares
----------
<S> <C> <C>
Seven Seas Money Market Fund(c)
5.04%, 11/07/96 2,722,089 2,722,089
-----------
TOTAL CASH EQUIVALENTS
(Cost $10,747,615) 10,748,332
-----------
TOTAL INVESTMENTS--104.1%
(Cost $100,567,179) 110,332,821
-----------
OTHER ASSETS AND LIABILITIES--(4.1%)
Other Assets 859,882
Liabilities (5,238,765)
-----------
(4,378,883)
-----------
NET ASSETS--100.0% (Note 7)
Applicable to 9,375,074 outstanding
shares,
$0.00001 par value (unlimited shares
authorized) $105,953,938
============
NET ASSET VALUE PER SHARE $11.30
======
</TABLE>
See accompanying Notes to Statements of Net Assets.
64
<PAGE> 71
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
COMMON STOCK--57.1%
DOMESTIC--42.4%
AEROSPACE/DEFENSE--0.9%
AAR Corp. 200 $ 5,700
Alliant Techsystems Inc.* 500 24,483
BFGoodrich Co. 200 8,475
Boeing Co. 1,900 181,213
Coltec Industries Inc.* 1,000 17,250
Curtiss-Wright Corp. 100 5,413
Gencorp Inc. 400 6,600
General Dynamics Corp. 200 13,725
Lockheed Martin Corp. 900 80,663
McDonnell Douglas Corp. 1,000 54,500
Northrop Grumman Corp. 200 16,150
OEA, Inc. 300 11,325
Orbital Sciences Corp. Class A* 300 6,338
Raytheon Co. 1,000 49,250
Rockwell International Corp. 1,000 55,000
Rohr Industries Inc.* 500 9,250
Textron Inc. 700 62,125
Thiokol Corp. 300 12,563
Trimble Navigation Ltd.* 300 4,256
United Technologies Corp. 500 64,375
-------
688,654
-------
AIR TRANSPORTATION--0.2%
AMR Corp.* 500 42,000
Alaska Air Group Inc.* 200 4,400
Atlantic Southeast Airlines Inc. 600 12,600
Continental Airlines Inc. Class B 700 17,588
Delta Airlines Inc. 400 28,350
Mesa Air Group Inc.* 400 3,750
Offshore Logistics, Inc.* 200 3,363
Southwest Airlines Co. 600 13,500
Trans World Airlines Inc. (New)* 800 6,400
USAir Group, Inc.* 1,800 31,275
Valujet Inc. 1,100 10,794
-------
174,020
-------
ALCOHOLIC BEVERAGES -- 0.2%
Adolph Coors Co. Class B 900 17,494
Anheuser-Busch Companies, Inc. 2,000 77,000
Brown Forman Corp. Class B 300 12,975
Canandaigua Wine Co., Inc. Class A* 300 6,863
Seagram Company Ltd. 1,200 45,450
-------
159,782
-------
</TABLE>
65
<PAGE> 72
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
APPAREL--0.3%
Brown Group Inc. 300 $ 6,188
Burlington Industries Inc.* 1,100 12,513
Cone Mills Corp.* 300 2,363
Donnkenny Inc. 300 3,750
Fabri-Centers of America, Inc. Class A 400 5,200
Guilford Mills, Inc. 200 4,750
Justin Industries Inc. 300 3,075
Kellwood Co. 300 5,400
Liz Claiborne Inc. 200 8,450
Men's Wearhouse, Inc. 400 8,225
NIKE, Inc. Class B 1,400 82,425
Nautica Enterprises Inc. 600 18,375
Phillips-Van Heusen Corp. 300 3,300
Reebok International Ltd. 200 7,150
Russell Corp. 100 2,838
Springs Industries Inc. 700 31,588
St. John's Knits, Inc. 400 18,300
Stride Rite Corp. 700 5,775
Unitog Co. 200 5,475
V.F. Corp. 200 13,075
Wolverine World Wide Inc. 750 18,563
-------
266,778
-------
AUTOMOTIVE PRODUCTS--0.1%
APS Holding Corp. Class A* 200 4,150
Armor-All Products Corp. 300 4,988
Carlisle Cos. Inc. 500 28,438
Cooper Tire & Rubber 200 3,925
Discount Auto Parts Inc.* 500 10,875
Goodyear Tire & Rubber 600 27,525
O'Reilly Automotive, Inc.* 100 3,525
-------
83,426
-------
BANKS--3.3%
ALBANK Financial Corp. 240 6,690
Associated Banc-Corp. 500 19,938
Banc One Corp. 1,588 67,292
Bancorp South, Inc. 500 12,594
Bank of Boston Corp. 500 32,000
Bank of New York Co., Inc. 1,600 53,000
BankAmerica Corp. 2,000 183,000
Bankers Trust New York Corp. 300 25,350
Barnett Banks, Inc. 600 22,875
Boatmens Bancshares Inc. 600 36,488
CCB Financial Corp. 500 28,500
CNB Bancshares Inc. 210 6,248
</TABLE>
66
<PAGE> 73
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Centura Banks Inc. 600 $ 23,325
Chase Manhattan Corp. (New) 1,932 165,669
Chemical Financial Corp. 400 14,950
Citicorp 2,500 247,500
Citizens Bancorp 200 10,200
Citizens Banking Corp. 200 5,800
City National Corp. 600 10,500
Cole Taylor Financial Group Inc. 200 6,025
Colonial BancGroup Inc. 200 7,575
Comerica Inc. 600 31,875
Corestates Financial Corp. 900 43,763
Corus Bankshares Inc. 200 6,225
Cullen/Frost Bankers Inc. 400 12,075
Dauphin Deposit Bank & Trust Co. 600 19,575
Deposit Guaranty Corp. 700 35,088
F & M National Corp. 200 3,700
Fifth Third Bancorp 400 25,100
First Bank System Inc. 764 50,424
First Chicago NBD Corp. 1,343 68,493
First Citizens BancShares Inc. 200 13,450
First Commercial Bancshares Inc. 200 5,575
First Commercial Corp. 674 22,835
First Commonwealth Financial Corp. 300 5,400
First Financial Bancorp 220 6,848
First Hawaiian, Inc. 600 18,600
First Michigan Bank Corp. 420 10,500
First Midwest Bancorp Inc. 200 6,375
First Union Corp. 1,305 94,939
Firstbank Illinois Co. 100 3,256
Fleet Financial Group Inc. (New) 756 37,706
Fort Wayne National Corp. 200 6,925
Fulton Financial Corp. 440 8,745
HUBCO, Inc. 309 6,663
Hancock Holding Co. 400 15,950
Imperial Bancorp 324 6,217
J.P. Morgan & Co. Inc. 900 77,738
Jefferson Bankshares, Inc. 200 5,513
Keycorp (New) 900 41,963
Keystone Financial Inc. 900 23,288
Liberty Bancorp, Inc. 100 3,838
Long Island Bancorp Inc. 400 11,925
MBNA Corp. 800 30,200
Magna Group Inc. 400 11,150
Mark Twain Bancshares Inc. 500 22,938
Mellon Bank Corp. 500 32,563
Mid-Am, Inc. 220 3,878
</TABLE>
67
<PAGE> 74
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
National Bancorp of Alaska, Inc. 400 $ 25,900
National City Corp. 600 26,025
National Commerce Bancorp 600 21,150
NationsBank Corp. 1,600 150,800
New York Bancorp Inc. 200 6,775
North Fork Bancorporation 600 18,975
Norwest Corp. 1,210 53,089
ONBANCorp, Inc. 200 7,288
Old National Bancorp 515 18,733
One Valley Bancorp of West Virginia Inc. 625 20,195
PNC Bank Corp. 1,400 50,750
Park National Corp. 100 4,825
People's Bank Bridgeport Conn. 800 20,500
Provident Bancorp Inc. 750 33,234
Provident Bankshares Corp. 200 7,175
Queens County Bancorp, Inc. 266 11,538
Republic New York Corp. 200 15,250
Riggs National Corp. Washington D.C. 400 6,800
S & T Bancorp, Inc. 200 6,275
Security Capital Corp. 200 13,250
Sumitomo Bank 200 5,075
Suntrust Banks, Inc. 600 27,975
Susquehanna Bancshares, Inc. 200 5,875
Toronto-Dominion Bank 738 17,251
Toronto-Dominion Bank (Ontario)* 184 4,301
Trust Company of New Jersey 200 2,763
TrustCo Bank Corp. NY 230 5,031
Trustmark Corp. 800 19,800
U S Trust Corp. (New) 200 12,500
U.S. Bancorp 290 11,582
UMB Financial Corp. 330 12,911
UST Corp. 200 3,575
Union Planters Corp. 305 10,599
United Bankshares, Inc. 200 6,000
United Carolina Bancshares Corp. 300 7,725
Valley National Bancorp 840 20,790
Wachovia Corp. (New) 600 32,250
Wells Fargo & Co. 300 80,138
Westamerica Bancorp 200 10,175
Whitney Holding Corp. 200 6,375
---------
2,638,033
---------
BUSINESS MACHINES & SOFTWARE--3.2%
3COM Corp. 600 40,613
AST Research Inc.* 600 2,738
Amati Communications Corp.* 400 6,975
Amdahl Corporation* 300 3,075
</TABLE>
68
<PAGE> 75
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Analogic Corp. 300 $ 8,175
Apple Computer, Inc. 400 9,250
Applied Magnetics Corp.* 500 10,688
Auspex Systems, Inc.* 300 3,056
Autodesk, Inc. 100 2,288
BBN Corp.* 300 6,413
BancTec, Inc.* 400 8,150
Bay Networks, Inc. 700 14,175
Black Box Corp.* 200 6,800
Borland International Inc.* 400 2,038
Broderbund Software Inc.* 700 19,600
Cabletron Systems Inc.* 300 18,713
Ceridian Corp.* 214 10,620
Cheyenne Software Inc.* 800 24,300
Cisco Systems Inc. 3,100 191,619
Compaq Computer Corp.* 1,100 76,588
Computer Assoc. International Inc. 1,550 91,644
Computer Horizons Corp. 300 9,338
Computer Products, Inc.* 400 7,875
Computer Sciences Corp.* 595 44,179
Compuware Corp.* 800 42,400
Comshare, Inc. 200 2,788
Comverse Technology Inc. (New)* 300 10,463
Control Data Systems, Inc.* 300 7,031
Data General Corp.* 1,000 14,875
Dell Computer Corp. 500 40,750
Digi International Inc.* 200 2,938
Digital Equipment Corp.* 600 17,700
EMC Corp.* 800 21,000
Exabyte Corp.* 200 2,613
FileNet Corp.* 300 8,475
Geoworks* 300 6,056
HCIA Inc.* 400 11,200
HNC Software Inc. 200 6,275
Hewlett Packard Co. 4,300 189,738
Honeywell Inc. 500 31,063
INSO Corp. 200 9,825
Intergraph Corp.* 1,000 9,438
International Business Machines 2,200 283,800
Iomega Corp. 1,800 38,813
JTS Corp.* 1,300 4,875
Learning Co. Inc.* 600 12,413
Legato Systems Inc. 400 14,250
McAfee Associates, Inc. 900 41,006
Microchip Technology Inc.* 700 25,288
Microsoft Corp.* 2,500 343,281
</TABLE>
69
<PAGE> 76
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Mylex Corp.* 400 $ 5,075
National Computer Systems, Inc. 200 4,275
National Instruments Corp.* 300 8,700
Network General Corp. 1,200 28,725
Novell Inc.* 1,200 11,175
Novellus Systems, Inc.* 400 16,500
Oak Technology 600 6,000
Optical Data Systems, Inc. 200 2,900
Oracle Systems Corp. 2,400 101,550
Pitney Bowes Inc. 700 39,113
Platinum Technology Inc.* 1,100 15,950
Project Software & Development Inc. 200 6,675
Pure Atria Corp.* 308 8,374
Quantum Corp.* 1,000 20,188
Rational Software Corp. (New) 1,200 45,825
Read-Rite Corp.* 900 15,863
Safeguard Scientifics Inc. 1,000 39,750
Santa Cruz Operations, Inc.* 800 5,550
Seagate Technology, Inc. 842 56,204
Security Dynamics Technology 200 16,150
Sequent Computer Systems, Inc.* 400 5,925
Shiva Corp. 400 16,475
Silicon Graphics Inc.* 654 12,099
Stac Inc.* 500 3,656
Stratus Computer Inc.* 600 13,425
Structural Dynamics Research Corp.* 700 12,381
Sun Microsystems Inc. 700 42,656
System Software Associates, Inc. 800 9,350
Tandem Computers Inc.* 300 3,788
Tech Data Corp.* 800 20,550
Transaction Systems Architects Inc. Class A 400 16,400
Unisys Corp.* 400 2,500
Veritas Software Co. 300 15,225
Videoserver Inc.* 200 9,413
Wang Laboratories Inc. (New)* 700 16,319
Wind River Systems Inc. 300 12,638
Xerox Corp. 1,400 64,925
Xircom, Inc.* 400 8,125
---------
2,557,656
---------
BUSINESS SERVICES--2.3%
ABM Industries, Inc. 400 7,050
ABR Information Services Inc. 500 34,438
Access Health Inc. 450 14,738
Ackerley Inc. 600 7,350
Addington Resources, Inc.* 300 8,325
Affiliated Computer Services Inc. Class A 600 32,550
</TABLE>
70
<PAGE> 77
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Allegiance Corp.* 220 $ 4,125
Alternative Resources Corp. 200 3,988
American Business Information, Inc. 300 5,700
American Business Products, Inc. 200 4,450
American Homepatient Inc. 150 3,544
American Management Systems, Inc. 600 19,050
American Medical Response, Inc.* 300 9,000
Amresco Inc. 300 6,281
Analysts International Corp. 400 9,800
Apollo Group, Inc. Class A 1,350 36,788
Applix Inc. 200 4,800
Apria Healthcare Group Inc.* 900 17,213
Aspen Technology Inc.* 200 13,400
Automatic Data Processing, Inc. 1,100 45,788
BISYS Group, Inc.* 600 22,388
Bell & Howell Co. (New)* 300 8,025
Billing Information Concepts Corp.* 300 7,763
Bowne & Co. Inc. 200 4,675
Browning Ferris Industries Inc. 800 21,000
CDI Corp.* 500 13,750
Cambridge Technology Partners 600 19,725
Camco International Inc. 600 23,250
Catalina Marketing Corp. 700 35,613
Cellular Technical Services Inc. 200 3,238
Cerner Corp. 500 5,969
Checkfree Corp.* 600 10,875
Clintrials Research Inc. 200 7,463
Compucom Systems Inc.* 900 8,831
Computer Task Group Inc. 200 7,550
Computervision Corp. (New)* 1,200 10,800
Continental Waste Industries Inc.* 300 7,463
Corrections Corp. of America 1,400 36,400
Coventry Corp.* 700 7,000
Culligan Water Technologies Inc.* 400 15,000
Dames & Moore Inc. 300 4,013
Data Broadcasting* 600 4,388
DeVRY Inc. 500 24,938
Deluxe Corp. 400 13,050
Dionex Corp. 200 7,750
Dun & Bradstreet Corp. 800 46,300
Dynatech Corp.* 400 19,825
Ecolab Inc. 300 10,950
Electro Rental 200 4,700
Employee Solutions Inc. 600 13,200
Envoy Corp. (New)* 300 11,100
Epic Design Technology Inc. 200 4,950
</TABLE>
71
<PAGE> 78
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Express Scripts Inc. Class A* 500 $14,063
Fair Issac & Co. Inc. 500 18,813
First Data Corp. 1,000 79,750
Franklin Quest Co.* 300 6,075
G&K Services, Inc. Class A 300 8,700
GRC International, Inc.* 200 2,825
H & R Block Inc. 300 7,425
HA-LO Industries Inc. 200 6,300
Health Management Systems, Inc. 300 7,013
Healthplan Services Corp.* 200 3,625
Heritage Media Corp. Class A (New) 1,000 15,250
Hon Industries Inc. 500 17,688
Horizon Healthcare Corp.* 1,000 10,375
ITT Educational Services Inc. 300 10,913
Information Resources, Inc.* 300 3,806
Inphynet Medical Management Inc.* 200 3,175
Integrated Health Services Inc. 300 7,388
Integrated Systems Inc. Class A 700 18,638
Interim Services Inc.* 200 8,000
Interpublic Group of Companies, Inc. 300 14,550
Jack Henry & Associates Inc. 200 8,125
Jacobs Engineering Group Inc.* 600 13,275
Jenny Craig, Inc.* 500 4,500
John H. Harland Co. 800 24,900
Keane, Inc. 200 9,275
Kinder Care Learning Centers Inc.* 200 3,963
Kirby Corp.* 400 7,800
Kronos, Inc. 200 5,825
Laidlaw Inc. Class B (Non Voting) 800 9,400
Mariner Health Group Inc.* 600 5,025
Maxicare Health Plans Inc. (New)* 500 9,344
Metromedia International Group, Inc.* 700 6,913
Micro Warehouse, Inc.* 700 16,188
Molten Metal Technology, Inc.* 600 8,025
Moore Corp. Ltd. 200 4,050
Morrison Health Care Inc. 200 2,425
National Data Corp. 800 32,900
National Education Corp.* 600 9,750
National Media Corp.* 400 4,800
National Service Industries, Inc. 100 3,450
Netcom Online Communications* 200 3,025
Netmanage Inc.* 800 5,475
Network Equipment Technologies* 300 4,013
New England Business Service, Inc. 200 3,600
Norrell Corp. Georgia 400 10,000
Occusystems Inc.* 300 8,269
</TABLE>
72
<PAGE> 79
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Oceaneering International, Inc.* 500 $ 9,000
Ogden Corp. 2,300 41,688
Orthodontic Centers of America Inc. 800 11,400
PAXAR Corp. 500 8,063
PHH Corp. 600 17,850
PSINet Inc.* 700 6,694
Payment Services Inc. 450 9,000
Pharmaceutical Product Development Inc.* 243 4,678
Physician Corp. of America* 800 8,900
Physician Reliance Network 1,200 7,013
Physicians Computer Network* 800 7,150
Pre-Paid Legal Services, Inc.* 400 4,700
Quarterdeck Corp.* 600 3,094
R.R. Donnelley & Sons Co. 500 15,188
Republic Industries Inc. 2,200 68,338
Rollins, Inc. 500 9,563
Rykoff-Sexton, Inc. 600 8,550
SEI Corp. 300 6,038
SPS Transaction Services, Inc.* 400 6,400
SUPERVALU Inc. 300 8,925
Safety-Kleen Corp. 100 1,563
Scientific Games Holdings Corp.* 200 4,525
Seacor Holdings Inc.* 200 10,800
Service Corp. International 800 22,800
Shared Medical Systems Corp. 100 4,813
Sitel Corp. 800 15,750
Standard Register Co. 400 10,400
Steris Corp. 484 18,211
Sun Healthcare Group Inc.* 900 11,475
Symantec Corp.* 1,100 11,894
Synetic Inc.* 500 18,406
TCSI Corp. 400 3,150
Technology Solutions Co. 300 11,625
True North Communications 300 7,125
U.S.A. Waste Services Inc.* 1,910 61,120
United Waste Systems, Inc. 1,000 34,250
Universal Health Services Inc. Class B 400 10,000
Valassis Communications Inc.* 600 10,800
Viad Corp. 400 5,800
Viasoft Inc. 400 19,800
Volt Information Sciences Inc. 200 7,850
WMX Technologies Inc. 1,700 58,438
Zebra Technologies Corp. Class A 400 11,500
---------
1,853,334
---------
</TABLE>
73
<PAGE> 80
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
CHEMICAL--1.3%
Air Products & Chemicals Inc. 400 $ 24,000
Arcadian Corp. 700 17,238
Calgon Carbon Corp. 500 5,000
Cambrex Corp. 150 4,688
Chemed Corp. 200 7,800
Crompton & Knowles Corp. 1,187 21,366
Dexter Corp. 600 18,600
Dow Chemical Co. 1,400 108,850
E.I. Du Pont de Nemours & Co. 2,800 259,700
Eastman Chemical Co. 300 15,825
Ferro Corp. 700 18,900
First Mississippi Corp. 300 8,700
Geon Co. 600 11,775
Great Lakes Chemical Corp. 200 10,425
H.B. Fuller Co. 200 8,325
Hercules Inc. 600 28,575
Lawter International Inc. 600 7,050
Lilly Industrial Inc. Class A 300 5,400
Millennium Chemicals Inc.* 198 4,010
Minnesota Mining & Manufacturing Co. 1,800 137,925
Monsanto Co. 2,100 83,213
Morton International Inc. 500 19,688
NCH Corp. 400 22,300
NL Industries Inc. (New) 1,000 8,500
Nalco Chemical Co. 300 10,913
OM Group Inc. 200 8,100
PPG Industries Inc. 700 39,900
Petrolite Corp. 500 16,125
Praxair Inc. 600 26,550
Rohm & Haas Co. 200 14,275
Scotts Co. Class A* 200 3,725
Sequa Corp. Class A* 100 4,175
Sigma-Aldrich Corp. 200 11,725
Techne Corp.* 200 4,800
Tredegar Industries Inc. 300 11,475
Union Carbide Corp. 500 21,313
W R Grace & Co. (Delaware)* 400 21,200
WD-40 Co. 100 5,013
Wellman Inc. 600 10,650
---------
1,067,792
---------
CONSTRUCTION--0.3%
Amre Inc. 400 3,700
Apogee Enterprises, Inc. 300 11,513
Armstrong World Industries, Inc. 100 6,675
Blount International Inc. Class A 300 10,800
</TABLE>
74
<PAGE> 81
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Calmat Co. 300 $ 5,588
Centex Construction Products Inc. 300 4,688
Centex Corp. 800 24,100
Crane Co. 100 4,650
D.R. Horton Inc. 700 6,388
Del Webb Corp. 200 3,200
Fluor Corp. 300 19,650
Global Industries Inc. 800 14,200
Granite Construction Inc. 300 5,888
Kaufman & Broad Home Corp. 500 6,000
Lone Star Industries, Inc. (New) 200 7,350
Mafco Consolidated Group Inc.* 300 8,363
Mastec Inc.* 400 19,425
Medusa Corp. 200 6,575
Morrison Knudsen Corp. (New)* 600 5,400
Owens Corning 300 11,625
Pulte Corp. 800 21,200
Regal Beloit Corp. 300 5,325
Sherwin Williams Co. 300 15,038
Southdown Inc. 200 5,475
Stanley Works 400 11,300
Stone & Webster, Inc. 200 6,600
TJ International Inc. 200 3,875
Toll Brothers, Inc.* 700 11,988
Triangle Pacific Corp. Delaware* 300 6,319
U.S. Home Corp. (New)* 200 4,325
-------
277,223
-------
CONSUMER-DURABLE--0.3%
Bassett Furniture Industries Inc. 200 4,475
Black & Decker Corp. 300 11,213
Champion Enterprises Inc. 772 15,247
Chicago Miniature Lamp Inc. 300 9,038
Ethan Allen Interiors Inc. 200 7,150
Furniture Brands International Inc.* 1,600 21,400
Harman International Industries Inc. (New) 500 25,688
Interface Inc. Class A 200 3,350
Kimball International Inc. Class B 300 10,800
La-Z-Boy Chair Co. 300 9,338
Masco Corp. 300 9,413
Maytag Corp. 300 5,963
National Presto Industries, Inc. 100 3,750
Newell Co. 600 17,025
Snap-on Tools Corp. 150 4,819
Sturm, Ruger & Co., Inc. 1,000 18,750
Toro Co. 200 6,275
</TABLE>
75
<PAGE> 82
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Whirlpool Corp. 300 $ 14,175
Zenith Electronics Corp.* 1,200 15,750
-------
213,619
-------
CONSUMER-NONDURABLE--0.6%
3DO Co.* 300 1,706
A.T. Cross Co. Class A 200 2,275
Acclaim Entertainment Inc.* 900 4,444
American Greetings Corp. Class A 200 5,863
Applebee's International, Inc. 700 17,019
Buffets Inc.* 400 4,425
CKE Restaurants Inc. 400 11,900
Corning Inc. 600 23,250
Darden Restaurants Inc. 400 3,350
Department 56 Inc.* 300 6,600
Foodmaker, Inc.* 800 7,800
Galoob Lewis Toys Inc.* 300 8,063
Hasbro Inc. 300 11,663
IHOP Corp. (New)* 100 2,231
International Dairy Queen Inc. Class A* 300 5,775
Jostens, Inc. 1,000 21,500
Landry's Seafood Restaurants, Inc. 200 4,025
Luby's Cafeterias, Inc. 700 14,700
Mattel Inc. 1,125 32,484
McDonald's Corp. 2,800 124,250
Mohawk Industries Inc.* 700 16,888
Morrison Fresh Cooking Inc. 150 788
Papa John's International, Inc. 300 14,981
Premark International, Inc. 200 4,175
Rexall Sundown, Inc. 600 16,238
Rubbermaid Inc. 600 13,950
Ruby Tuesday Inc. 300 4,875
Russ Berrie & Co. Inc. 300 5,400
Ryan's Family Steak Houses Inc.* 1,700 12,325
Samsonite Corp. (New) 300 10,125
Sbarro, Inc. 300 7,913
Shoney's Inc.* 1,700 12,538
Showbiz Pizza Time Inc. (New) 400 7,400
Sonic Corp. 300 6,750
Toy Biz Inc. Class A* 200 3,550
Wendy's International, Inc. 300 6,188
Williams-Sonoma Inc.* 600 16,575
-------
473,982
-------
CONTAINERS--0.1%
ACX Technologies Inc. 600 10,650
Ball Corp. 1,600 38,600
</TABLE>
76
<PAGE> 83
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Bemis Co., Inc. 100 $ 3,500
Crown Cork & Seal Inc. 500 24,000
Gaylord Container Corp. Class A* 700 5,250
Greif Brothers Corp. Class A 600 16,875
Stone Container Corp. 200 3,050
-------
101,925
-------
ELECTRONICS--1.6%
ADAC Laboratories 400 8,150
AMETEK, Inc. 700 13,913
AMP Inc. 600 20,325
Actel Corp.* 400 7,075
Advanced Micro Devices Inc. 520 9,230
Allen Group Inc. 500 7,938
Alliance Semiconductor Corp. 700 4,375
Altron Inc. 150 2,250
Ampex Corp. (Delaware) Class A* 700 4,725
Anixter International Inc. 1,000 14,875
Applied Materials, Inc. 600 15,863
Augat Inc. 200 5,500
Belden Inc. 400 11,500
Broadband Technologies Inc.* 300 5,363
Burr Brown 200 4,300
Cable Design Technologies Corp. 300 7,725
Checkpoint Systems Inc. 400 8,950
CopyTele Inc. 1,100 7,906
Cyrix Corp.* 300 5,288
DSP Communications Inc. 400 15,250
Dallas Semiconductor Corp. 400 8,000
EG&G, Inc. 100 1,763
Echostar Communications Corp. Class A* 200 5,938
Exide Corp. 400 10,400
FSI International Inc. 500 5,219
Fluke Corp. 100 4,000
General Instrument Corp.* 500 10,063
General Signal Corp. 100 4,075
Genrad Inc.* 400 8,100
Gerber Scientific Inc. 300 4,050
Harris Corp. 100 6,263
ITI Technologies Inc.* 200 5,700
Identix Inc.* 500 4,063
Imation Corp.* 160 4,380
Integrated Device Technology Inc. 1,500 12,281
Integrated Process Equipment Corp.* 300 3,300
Intel Corp. 3,900 428,269
International Rectifier Corp. 1,000 12,375
Itron, Inc.* 200 3,263
</TABLE>
77
<PAGE> 84
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Kemet Corp. 800 $ 15,350
Kent Electronics Corp. 400 9,150
Kulicke & Soffa Industries Inc. 300 3,956
LSI Logic Corp. 500 13,250
Lam Research Corp.* 600 14,588
Lattice Semiconductor Corp.* 600 20,475
Littlefuse, Inc.* 400 16,550
Logicon, Inc. 200 8,275
Lucent Technologies, Inc. 2,865 134,655
Macromedia Inc. 700 11,681
Marshall Industries* 300 9,038
Methode Electronics Inc. Class A 500 9,688
Micron Technology Inc. 500 12,688
Motorola Inc. 2,500 115,000
National Semiconductor Corp.* 300 5,775
Ortel Corp.* 300 6,281
Osmonics, Inc.* 300 6,375
Palomar Medical Technologies* 500 3,594
Perkin-Elmer Corp. 100 5,363
Pioneer Standard Electronics Inc. 300 3,225
Pittway Corp. Class A 300 14,625
Rexel Inc.* 300 4,350
S3 Inc. 800 15,000
Sanmina Corp. 200 9,225
Scientific-Atlanta, Inc. 200 2,900
Sierra Semiconductor Corp. 600 7,800
Silicon Valley Group Inc.* 400 6,675
Stanford Telecommunications* 200 5,775
Technitrol Inc. 200 6,625
Tektronix, Inc. 100 3,913
Texas Instruments Inc. 900 43,313
Thomas & Betts Corp. 200 8,475
VLSI Technology, Inc.* 700 12,075
VeriFone, Inc.* 600 20,175
Vitesse Semiconductor Corp.* 400 12,700
Wyle Electronics 200 5,975
Zilog Inc.* 300 5,925
---------
1,332,486
---------
ENERGY-DEVELOPMENT--1.0%
Amcol International Corp. 200 3,013
Ashland Coal, Inc. 200 4,725
Atwood Oceanics Inc.* 200 11,050
Baker Hughes Inc. 500 17,813
Barrett Resources Corp.* 600 23,025
Benton Oil & Gas Co.* 500 12,219
Burlington Resources Inc. 200 10,075
</TABLE>
78
<PAGE> 85
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Cabot Oil & Gas Corp. Class A 300 $ 4,650
Chesapeake Energy Corp. 450 26,213
Devon Energy Corp. 300 10,463
Dresser Industries Inc. 700 23,013
Energy Ventures, Inc.* 300 13,200
Forest Oil Corp. (New)* 500 7,469
Halliburton Co. 787 44,564
Helmerich & Payne Inc. 600 32,475
Louis Dreyfus Natural Gas Corp.* 300 5,063
Louisiana Land & Exploration Co. 100 5,688
MAXXAM Inc.* 100 4,200
Marine Drilling Company, Inc.* 900 12,375
McDermott International Inc. 100 1,775
Nabors Industries Inc.* 1,400 23,275
Newfield Exploration Co.* 500 23,625
Newpark Resources, Inc. 300 11,250
Noble Drilling Corp.* 1,500 27,938
Nuevo Energy Co.* 400 19,950
Occidental Petroleum Corp. 1,200 29,400
Parker & Parsley Petroleum Co. 800 23,000
Parker Drilling Co.* 700 5,950
Pride Petroleum Services Inc.* 500 8,719
Production Operators Corp. 100 3,950
Reading & Bates Corp. (New)* 1,100 31,625
Rochester & Pittsburgh Coal Co. 400 13,000
Rowan Cos. Inc.* 1,900 42,513
Schlumberger Ltd. 1,100 109,038
Seitel, Inc. (New)* 100 3,975
Solv-Ex Corp.* 300 3,881
Tom Brown Inc. (New)* 300 5,681
Tremont Corp.* 200 6,850
Tuboscope Vetco International Corp.* 700 10,588
Union Pacific Resources Group 1,062 29,205
United Meridian Corp.* 400 18,850
Varco International Inc.* 600 11,850
Vintage Petroleum Inc. 300 8,850
Weatherford Enterra Inc.* 1,000 29,000
Zeigler Coal Holding Co. 300 5,438
-------
780,469
-------
FOOD-AGRICULTURE--2.2%
Archer-Daniels-Midland Co. 1,910 41,543
Bob Evans Farms, Inc. 800 10,100
CPC International Inc. 700 55,213
Campbell Soup Co. 1,100 88,000
Chiquita Brands International Inc. 1,000 12,500
Coca-Cola Bottling Co. 100 4,025
</TABLE>
79
<PAGE> 86
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Coca-Cola Co. 10,400 $ 525,200
ConAgra, Inc. 1,000 49,875
Dekalb Genetics Corp. Class B 400 15,750
Delta & Pine Land Co. 799 28,764
Dimon Inc. 800 15,200
Dreyers Grand Ice Cream Inc. 200 5,100
Earthgrains Co. 244 12,932
Farmer Brothers Co. 100 15,150
Fleming Companies, Inc. 2,000 34,750
General Mills Inc. 600 34,275
H.J. Heinz Co. 1,400 49,700
Hershey Foods Corp. 600 29,025
Hudson Foods Inc. Class A 400 6,650
International Multifoods Corp. 200 3,050
Interstate Bakeries Corp. (New) 800 33,900
J.M. Smucker Co. Class A 700 11,550
J.M. Smucker Co. Class B (Non Voting) 300 4,613
JP Foodservice, Inc.* 300 6,750
Kellogg Co. 900 57,150
Lance Inc. 400 7,075
Mississippi Chemical Corp. (New) 600 15,075
Mycogen Corp.* 400 6,300
Pepsico Inc. 6,500 192,563
Pioneer Hi-Bred International Inc. 300 20,138
Quaker Oats Co. 200 7,100
Ralcorp Holdings, Inc.* 500 10,500
Ralston Purina Co. 400 26,450
Richfood Holdings Inc. 1,050 25,528
Sara Lee Corp. 1,900 67,450
Savannah Foods & Industries Inc. 300 4,800
Seaboard Corp. 100 21,125
Smithfield Foods Inc.* 500 14,375
Sysco Corp. 700 23,800
Tootsie Roll Industries, Inc. 500 18,375
Unilever 800 122,300
Whitman Corp. 300 7,275
Wm Wrigley Junior Co. 400 24,100
---------
1,765,094
---------
GOLD--0.2%
Amax Gold Inc.* 1,900 10,450
Barrick Gold Corp. 1,500 39,188
Battle Mountain Gold Co. 6,000 45,750
Getchell Gold Corp.* 500 22,250
Homestake Mining Co. 600 8,550
Meridian Gold Inc.* 900 3,938
Newmont Mining Corp. 500 23,125
</TABLE>
80
<PAGE> 87
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Placer Dome, Inc. 1,000 $ 24,000
Santa Fe Pacific Gold Corp. 300 3,563
-------
180,814
-------
HEALTHCARE--4.0%
ALZA Corp.* 200 5,175
Abbott Laboratories 3,300 167,063
Acuson* 300 6,338
Advanced Technology Laboratories, Inc.* 200 6,075
Advanced Tissue Sciences Inc.* 400 6,500
Agouron Pharmaceuticals Inc.* 200 11,425
Allergan Inc. 300 9,150
Alliance Pharmaceutical Corp.* 400 5,550
Alpharma, Inc. Class A 300 3,750
American Home Products Corp. 2,700 165,375
Amgen Inc. 1,200 73,575
Amylin Pharmaceuticals Inc.* 600 6,675
Arrow International Inc. 500 14,250
Ballard Medical Products 600 10,575
Barr Laboratories, Inc. 300 8,288
Bausch & Lomb Inc. 200 6,750
Baxter International Inc. 1,100 45,788
Becton Dickinson & Co. 400 17,400
Beverly Enterprises, Inc.* 200 2,475
Bio Rad Laboratories Inc. Class A 150 3,638
Bio Technology General Corp.* 900 7,341
Biomet Inc. 300 4,838
Block Drug Inc. Class A 609 27,557
Boston Scientific Corp.* 637 34,637
Bristol Myers Squibb Co. 2,500 264,375
C.R. Bard Inc. 200 5,650
CNS, Inc. 300 5,063
Carter Wallace Inc. 900 13,950
Cephalon Inc.* 500 11,156
Cognex Corp. 800 10,200
Columbia Laboratories Inc. 600 7,200
Columbia/HCA Healthcare Corp. 3,300 117,975
Community Psychiatric Centers* 700 6,213
Conmed Corp. 200 3,475
Cygnus Therapeutic Systems, Inc.* 300 4,313
Cytogen Corp.* 900 4,781
Datascope Corp.* 200 3,375
Diagnostic Products Corp. 200 5,950
Eli Lilly & Co. 2,700 190,350
Enzo Biochem Inc. 315 5,749
Fresenius Medical Care AG (Sponsored
American Depository Receipts)* 752 22,372
</TABLE>
81
<PAGE> 88
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Gilead Sciences Inc.* 600 $ 13,913
GranCare, Inc.* 400 7,200
Gulf South Medical Supply Inc. 200 4,350
Haemonetics Corp.* 400 7,150
HealthSouth Rehabilitation Corp.* 938 35,175
Herbalife International Inc. 300 6,000
Hologic Inc. 300 6,881
Human Genome Sciences Inc.* 500 18,125
Humana Inc.* 300 5,475
ICN Pharmaceuticals, Inc. 604 11,476
Icos Corp.* 800 5,950
Idec Pharmaceuticals Corp.* 300 6,469
Imatron Inc.* 1,300 5,220
Immunex Corp. (New)* 800 10,850
Immunomedics Inc.* 700 4,944
Incyte Pharmaceuticals Inc.* 200 8,075
Interneuron Pharmaceuticals* 700 17,150
Invacare Corp. 700 19,425
Isis Pharmaceuticals* 300 4,819
Isolyser Inc. 600 4,200
Johnson & Johnson 5,600 275,800
Jones Medical Industries Inc. 500 21,625
Kinetic Concepts Inc. 600 7,875
Life Technologies, Inc. (New) 300 6,825
Ligand Pharmaceuticals Inc. Class B 500 6,250
Lincare Holdings Inc.* 400 14,900
Liposome Inc.* 700 11,944
Living Centers of America* 300 7,013
Lunar Corp. 200 6,188
Magellan Health Services Inc.* 700 12,863
Mallinckrodt Inc. 200 8,700
Manor Care, Inc. 200 7,850
Marquette Medical System Inc.* 800 12,500
Martek Biosciences Corp.* 300 6,413
Matrix Pharmaceuticals* 400 3,000
Medimmune Inc.* 400 6,225
Medtronic Inc. 1,000 64,375
Mentor Corp. 600 13,275
Merck & Co. Inc. 5,600 415,100
Mid Atlantic Medical Services Inc.* 900 9,675
Multicare Cos. Inc. 750 13,500
Nabi Inc.* 700 6,475
Natures Sunshine Products Inc. 300 6,600
Neopath Inc.* 300 4,894
Neoprobe Corp.* 300 4,275
Neurex Corp.* 400 6,225
</TABLE>
82
<PAGE> 89
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Neurogen Corp.* 200 $ 4,275
Nexstar Pharmaceuticals Inc.* 400 6,225
North American Vaccine Inc.* 500 11,125
Novacare Inc.* 800 6,600
Noven Pharmaceuticals, Inc.* 400 5,500
Organogenesis Inc. 300 5,363
Owens & Minor Inc. (New) 400 3,750
PDT Inc. 200 4,925
PHP Healthcare Corp. 200 4,575
PLC Systems Inc.* 300 6,713
Patterson Dental Co.* 500 14,063
Perrigo Co.* 1,500 14,063
Pfizer Inc. 3,100 256,525
Pharmacia & Upjohn Inc. 1,800 64,800
Physician Sales & Service Inc. 700 14,788
Protein Design Labs, Inc.* 300 7,238
Quintiles Transnational Corp. 400 26,250
Regeneron Pharmaceuticals Inc.* 400 7,575
Renal Treatment Centers Inc. 400 10,700
Respironics Inc.* 200 3,013
RoTech Medical Corp. 400 6,325
Roberts Pharmaceutical Corp.* 200 3,075
Salick Health Care, Inc.* 200 7,925
Schering Plough Corp. 1,500 96,000
Sepracor Inc.* 300 4,838
Sequus Pharmaceuticals Inc.* 500 7,000
Sofamor/Danek Group Inc.* 600 16,500
Sola International Inc.* 400 14,450
Somatogen Inc.* 500 5,375
St. Jude Medical, Inc. 30 1,183
Summit Technology Inc. 600 3,338
Sunrise Medical Inc.* 200 2,975
Target Therapeutics Inc. 200 7,388
Tecnol Medical Products Inc.* 300 3,788
Tenet Healthcare Corp.* 800 16,700
Thermedics Inc.* 900 18,675
U.S. Bioscience Inc.* 500 5,750
United Healthcare Corp. 400 15,150
United States Surgical Corp. 100 4,188
Ventritex Inc.* 300 6,844
Vertex Pharmaceuticals Inc.* 500 16,594
Vivra Inc. 900 28,688
Vivus* 200 6,650
Warner Lambert Co. 1,200 76,350
West Company Inc. 200 5,375
---------
3,354,737
---------
</TABLE>
83
<PAGE> 90
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
HOUSEHOLD PRODUCTS--0.9%
Alberto Culver Co. Class B 100 $ 4,575
Avon Products, Inc. 600 32,550
Bush Boake Allen Inc.* 300 7,725
Church & Dwight Inc. 300 6,450
Clorox Co. 200 21,825
Colgate-Palmolive Co. 1,000 92,000
Dial Corp. (New) 400 5,500
Gillette Co. 2,200 164,450
International Flavors & Fragrances Inc. 400 16,550
Libbey Inc. 200 4,800
Playtex Products Inc.* 600 5,100
Procter & Gamble Co. 3,300 326,700
Tupperware Corp. 200 10,275
-------
698,500
-------
IMAGING & PHOTO--0.2%
Avid Technology, Inc.* 300 4,106
BMC Industries, Inc. 600 17,775
Chyron Corp.* 1,800 9,225
Eastman Kodak Co. 1,800 143,550
Optical Imaging Systems Inc.* 1,700 4,781
Photronic, Inc.* 200 5,375
Polaroid Corp. 100 4,063
Robotic Vision Systems Inc.* 300 3,038
Ultratech Stepper Inc. 300 5,063
-------
196,976
-------
INSURANCE--2.0%
20th Century Industries* 1,000 16,000
Acordia, Inc. 200 5,700
Aetna Inc. 734 49,086
Alexander & Alexander Services 2,400 36,600
Alfa Corp. 800 8,900
Allied Group Inc. 600 25,125
Allstate Corp. 1,800 101,025
American Annuity Group, Inc. 500 6,813
American Bankers Insurance Group, Inc. 600 28,725
American General Corp. 800 29,800
American Heritage Life Investment Corp. 200 4,425
American International Group, Inc. 2,400 260,700
American Travellers Corp. 300 10,294
Aon Corp. 500 28,875
Argonaut Group, Inc. 500 14,500
Arthur J. Gallagher & Co. 500 14,688
CMAC Investment Corp. 500 34,563
Capital Re Corp. 200 7,750
</TABLE>
84
<PAGE> 91
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Capitol American Financial Corp. 200 $ 7,250
Capsure Holdings Corp. 300 2,700
Chubb Corp. 800 40,000
Cigna Corp. 300 39,150
Citizens Corp. 800 16,100
Commerce Group Inc. 800 19,200
Compdent Corp.* 500 17,094
Conseco, Inc. 349 18,672
Crawford & Co. Class A 200 3,975
Crawford & Co. Class B 500 9,875
Delphi Financial Group, Inc. Class A 240 6,750
Enhance Financial Services Group Inc. 500 16,688
Executive Risk Inc. 200 8,250
Financial Security Assured Holdings Ltd. 600 16,800
Foremost Corp. of America 200 11,025
Fremont General Corp. 750 22,031
Frontier Insurance Group, Inc. 220 8,745
General Re Corp. 685 100,866
HCC Insurance Holdings, Inc. 500 12,750
Harleysville Group Inc. 200 5,550
Home Beneficial Corp. Class B 500 12,594
Horace Mann Educators Corp. (New) 600 20,550
ITT Hartford Group Inc. 400 25,200
Integon Corp. 200 3,775
Jefferson-Pilot Corp. 300 17,063
John Alden Financial Corp. 600 11,175
Kansas City Life Insurance Co. 100 5,475
Liberty Corp. 300 10,350
Life Re Corp. 200 7,325
Lincoln National Corp. Inc. 400 19,400
MAIC Holdings Inc. 106 3,445
MGIC Investment Corp. 200 13,725
MMI Companies, Inc. 200 5,750
Markel Corp.* 100 8,700
Marsh & McLennan Companies 300 31,238
NAC Re Corp. 300 10,538
Orion Capital Corp. 500 27,188
Penncorp Financial Group Inc. 600 20,775
Presidential Life Corp. 400 4,550
Providian Corp. 300 14,100
Reinsurance Group of America Inc. 500 22,688
Reliance Group Holdings Inc. 2,200 18,150
Safeco Corp. 400 15,150
Selective Insurance Group, Inc. 200 6,800
Sierra Health Services Inc.* 500 14,313
St. Paul Companies, Inc. 300 16,313
</TABLE>
85
<PAGE> 92
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
State Auto Financial Corp. 300 $ 4,088
Torchmark Corp. 200 9,675
Transamerica Corp. 300 22,763
Trenwick Group Inc. 400 19,775
UNUM Corp. 300 18,863
USF&G Corp. 300 5,700
USLIFE Corp. 100 3,125
United Companies Financial Corp. 700 20,913
United Dental Care Inc.* 100 3,025
United Fire & Casualty Co. 300 9,750
United Insurance Companies, Inc.* 800 20,250
United Wisconsin Services, Inc. 200 5,175
Vesta Insurance Group Inc. 300 7,688
W.R. Berkley Corp. 600 30,975
Washington National Corp. 200 5,725
Zenith National Insurance Corp. 200 5,450
Zurich Reinsurance Centre Holdings, Inc. 500 15,000
---------
1,641,310
---------
MEDIA--1.0%
AMC Entertainment Inc.* 200 3,450
BET Holdings, Inc. Class A* 200 5,850
Banta Corp. 600 12,638
Cablevision Systems Corp. Class A* 500 15,563
Carmike Cinemas Inc.* 100 2,375
Central Newspapers Inc. Class A 600 24,150
Century Communications Corp. Class A* 1,300 8,775
Comcast Corp. Class A 700 10,281
Dow Jones & Co. Inc. 400 13,200
Evergreen Media 900 24,188
GC Companies Inc.* 100 3,388
Gannett Inc. 700 53,113
Harte Hanks Communications (New) 450 11,644
Heartland Wireless Communications, Inc.* 200 4,300
Hollinger International Inc. 1,400 17,500
Houghton Mifflin Co. 500 24,813
International Family Entertainment Inc.
Class B 875 15,641
John Wiley & Son, Inc. Class A 500 15,313
Jones Intercable Inc. Class A* 600 6,600
King World Productions, Inc.* 100 3,600
Knight-Ridder, Inc. 400 14,950
McClatchy Newspapers Inc. Class A 700 19,513
McGraw-Hill, Inc. 400 18,750
Media General, Inc. Class A 400 11,900
Meredith Corp. 100 5,025
New World Communications Class A* 400 9,875
New York Times Co. Class A 400 14,450
</TABLE>
86
<PAGE> 93
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Oak Industries Inc.* 200 $ 5,075
Paxson Communications Corp.* 300 2,663
Pulitzer Publishing Co. 500 31,750
Regal Cinemas, Inc. 450 11,616
SBC Communications Inc. 2,500 121,563
Spelling Entertainment Group, Inc.* 1,800 13,050
TCA Cable TV Inc. 600 15,975
TSX Corp. 300 3,113
Tele Communications Inc. (New)--TCI Group
Series A 2,700 33,581
Time Warner Inc. 1,600 59,600
Times Mirror Co. (New) Series A 400 18,500
Tribune Co. (New) 600 49,050
United International Holdings Inc. Class A* 200 2,500
Viacom Inc. Class B* 1,400 45,675
Westwood One Inc.* 400 6,200
-------
790,756
-------
MISCELLANEOUS FINANCE--1.5%
1st Source Corp. 210 4,817
AMCORE Financial, Inc. 200 4,188
Aames Financial Corp. 300 13,388
Alex Brown Inc. 500 28,375
American Express Co. 1,900 89,300
Americredit Corp.* 400 7,600
Astoria Financial Corp. 400 14,175
Beneficial Corp. 200 11,700
Bok Financial Corp. (New) 300 7,950
Cal-Federal Bancorp Inc.* 1,600 37,200
Coast Savings Financial Inc.* 300 9,863
Collective Bancorp Inc. 300 9,038
Commercial Federal Corp. 200 8,375
Dean Witter Discover & Co. 800 47,100
Downey Financial Corp. 210 5,460
Eaton Vance Corp. (Non Voting) 100 4,375
Federal Home Loan Mortgage Corp. 1,100 111,100
Federal National Mortgage Assoc. 4,200 164,325
First American Financial Corp. 200 7,525
First Financial Corp. 700 19,075
Fund American Enterprises Holdings, Inc. 400 35,850
Glendale Federal Bank (FSB) (New)* 800 14,700
Golden West Financial Corp. 200 12,975
Great Financial Corp. 200 5,825
Great Western Financial Corp. 400 11,200
Green Tree Financial Corp. 500 19,813
H.F. Ahmanson & Co. 300 9,413
Home Financial Corp. 300 4,856
</TABLE>
87
<PAGE> 94
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Household International Inc. 400 $ 35,400
Inter-Regional Financial Group, Inc. 150 4,856
Interpool Inc. 200 4,350
JSB Financial, Inc. 200 7,325
Jefferies Group, Inc. 300 10,725
John Nuveen Co. Class A 700 19,425
Legg Mason, Inc. 200 6,450
Merrill Lynch & Co. Inc. 700 49,175
Morgan Keegan, Inc. 400 5,850
Morgan Stanley Group Inc. 600 30,150
Olympic Financial Ltd.* 600 9,525
Peoples Heritage Financial Group, Inc. 500 11,500
Phoenix Duff & Phelp Corp. 900 5,513
Pioneer Group Inc. 600 14,250
Quick & Reilly Group, Inc. 600 15,825
RCSB Financial Inc. 200 5,813
Raymond James Financial Inc. 300 7,313
Roosevelt Financial Group Inc. 800 13,850
Salomon Inc. 400 18,050
Sovereign Bancorp Inc. 630 7,442
St. Paul Bancorp Inc. 300 7,950
Standard Financial Inc. 200 3,575
Student Loan Corp. 600 20,400
Travelers Inc. 1,950 105,788
Value Line, Inc. 200 7,575
WFS Financial Inc. 440 9,185
Washington Federal, Inc. 900 21,656
Westcorp Inc. 315 7,481
White River Corp.* 200 12,000
---------
1,197,958
---------
MOTOR VEHICLE--0.9%
A.O. Smith Corp. Class B 400 10,500
Arctic Cat Inc. 400 3,775
Arvin Industries, Inc. 700 16,013
Borg Warner Automotive Inc. 600 23,025
Breed Technologies Inc. 700 16,100
Chrysler Corp. 3,000 100,875
Cummins Engine Inc. 100 4,163
Dana Corp. 400 11,850
Detroit Diesel Corp.* 600 11,100
Eaton Corp. 300 17,925
Echlin Inc. 200 6,525
Federal Mogul Corp. 800 17,900
Fleetwood Enterprises, Inc. 100 3,375
Ford Motor Co. 4,900 153,125
General Motors Corp. 3,200 172,400
</TABLE>
88
<PAGE> 95
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Gentex Corp. 700 $ 16,450
Genuine Parts Co. 400 17,500
Hays Wheels International Inc.* 50 1,675
Lucasvarity PLC (Sponsored American
Depository Receipts)* 138 5,555
Mascotech Inc. 1,000 15,750
Modine Manufacturing Co. 600 15,000
Navistar International Corp.* 4,300 39,775
PACCAR Inc. 100 5,575
Standard Products Co. 200 4,850
Superior Industries International, Inc. 400 9,750
TRW Inc. 300 27,150
Titan Wheel International Inc. 300 3,825
-------
731,506
-------
NON-FERROUS--0.4%
A.M. Castle & Co. 250 4,625
Alcan Aluminum Ltd. 900 29,588
Aluminum Company of America 1,100 64,488
Asarco Inc. 100 2,625
Brush Wellman Inc. 200 3,775
Coeur d'Alene Mines Corp. 500 7,313
Commercial Metals Co. 200 6,200
Cyprus Amax Minerals Co. 400 9,050
Echo Bay Mines Ltd 300 2,344
Engelhard Corp. 400 7,300
Freeport-McMoRan Copper & Gold Inc. Class B 500 15,188
Hecla Mining Co.* 600 3,375
Inco Ltd. 500 15,875
Kaiser Aluminum Corp.* 1,400 15,575
Minerals Technologies Inc. 500 19,625
Mueller Industries Inc. 500 20,125
Oregon Metallurgical Corp. 300 9,375
Phelps Dodge Corp. 300 18,863
RMI Titanium Co.* 400 9,650
Reliance Steel & Aluminum Co. 200 7,325
Reynolds Metals Co. 200 11,250
Stillwater Mining Co.* 500 8,438
Wolverine Tube Inc.* 200 7,975
-------
299,947
-------
OIL-DOMESTIC--0.5%
Amerada Hess Corp. 300 16,613
Ashland Inc. 200 8,500
Atlantic Richfield Co. 800 106,000
Cross Timbers Oil Co. 200 4,725
Diamond Shamrock Inc. 700 20,563
</TABLE>
89
<PAGE> 96
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
KCS Energy, Inc. 300 $ 12,938
Kerr-McGee Corp. 200 12,550
Oryx Energy Co.* 200 3,850
Pennzoil Co. 100 5,100
Phillips Petroleum Co. 1,000 41,000
Pogo Producing Co. 700 31,063
Quaker State Corp. 400 6,700
Santa Fe Energy Resources, Inc.* 200 2,850
Smith International Inc.* 800 30,400
Snyder Oil Corp. 400 6,100
Sun Inc. 200 4,475
Tesoro Petroleum Corp.* 500 7,375
Total Petroleum (North America) Ltd. 800 7,700
TransTexas Gas Corp.* 1,400 19,250
USX Corp. (Marathon Group) (New) 1,100 24,063
Unocal Corp. 1,000 36,625
---------
408,440
---------
OIL-INTERNATIONAL--1.9%
Amoco Corp. 2,400 181,800
Chevron Corp. 2,800 184,100
Exxon Corp. 5,700 505,163
Mobil Corp. 1,600 186,800
Royal Dutch Petroleum Co. 2,100 347,288
Texaco, Inc. 1,500 152,438
Western Atlas, Inc.* 200 13,875
---------
1,571,464
---------
PAPER--0.6%
Alco Standard Corp. 500 23,188
Boise Cascade Corp. 100 3,100
Buckeye Cellulose Corp.* 500 13,063
Caraustar Industries Inc. 600 17,438
Champion International Corp. 300 13,050
Chesapeake Corp. 600 16,950
Georgia Pacific Corp. 500 37,500
International Paper Co. 1,300 55,575
James River Corp. 200 6,300
Kimberly Clark Corp. 1,590 148,268
Longview Fibre Co. 1,000 17,375
Louisiana Pacific Corp. 300 6,263
Mead Corp. 200 11,350
Mosinee Paper Corp. 200 5,675
P.H. Glatfelter Co. 600 11,400
Potlatch Corp. 100 4,275
Rock Tennessee Co. Class A 440 8,030
Shorewood Packaging Corp.* 200 3,800
</TABLE>
90
<PAGE> 97
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Temple-Inland Inc. 200 $ 10,250
Union Camp Corp. 200 9,750
Wausau Paper Mills Co. 875 16,734
Westvaco Corp. 400 11,400
Weyerhaeuser Co. 600 27,525
Willamette Industries, Inc. 200 13,450
-------
491,709
-------
PRODUCER GOODS-MANUFACTURING--2.6%
Albany International Corp. Class A (New) 700 15,750
Allied Signal Inc. 1,600 104,800
American Financial Enterprises Inc. 200 5,200
Applied Power Inc. Class A 200 7,200
AptarGroup, Inc. 300 9,675
Avery Dennison Corp. 200 13,175
BT Office Products International Inc.* 600 4,950
BW/IP Holding, Inc. Class A 300 4,050
Baldor Electric Co. 400 8,050
Barnes Group Inc. 400 22,500
Bearings Inc. (New) 150 3,900
Blyth Industries Inc. 400 15,550
Boise Cascade Office Products Corp. 1,400 26,600
Briggs & Stratton Corp. 100 4,000
Case Corp. 300 13,950
Caterpillar Inc. 900 61,763
Cincinnati Milacron Inc. 100 1,913
Clarcor Inc. 200 4,350
Collins & Aikman Corp.* 1,400 8,400
Commercial Intertech Corp. 200 2,225
Cooper Industries Inc. 400 16,100
Credence Systems Corp. 300 4,106
Cuno Inc.* 200 3,175
Deere & Co. 1,000 41,750
Donaldson Inc. 400 11,700
Dover Corp. 400 20,550
Duriron Inc. 600 16,125
Emerson Electric Co. 1,300 115,700
FMC Corp. (New)* 100 7,363
Fedders USA Inc. 800 4,700
Figgie International Holdings Inc. Class A* 400 4,250
Fisher Scientific International, Inc. 500 22,438
Foster Wheeler Corp. 100 4,100
General Binding Corp. 200 4,950
General Electric Co. 6,900 667,575
Giddings & Lewis Inc. 800 9,300
Goulds Pumps Inc. 300 6,919
Graco Inc. 300 6,863
</TABLE>
91
<PAGE> 98
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Greenfield Industries Inc. 500 $13,063
Harnischfeger Industries Corp. 100 4,000
Helix Technology Corp. 100 2,669
Herman Miller, Inc. 400 17,350
Hexcel Corp. (New)* 700 12,775
Hughes Supply Inc. 200 7,600
IDEX Corp. 600 22,575
ITT Industries Inc. 400 9,300
Illinois Tool Works Inc. 600 42,150
Ingersoll Rand Co. 400 16,650
Insilco Corp.* 100 3,950
Ionics Inc.* 500 23,000
Johnson Controls, Inc. 200 14,600
Juno Lighting Inc. 200 3,113
Kaydon Corp. 500 20,375
Kennametal Inc. 400 13,600
Keystone International Inc. 800 14,400
Lawson Products, Inc. 200 4,300
Lincoln Electric Co. 100 2,813
Lincoln Electric Co. Class A (Non Voting) 400 11,150
Lydall Inc. 200 4,425
Manitowoc Inc. 300 10,050
Measurex Corp. 200 5,150
Millipore Corp. 100 3,500
Myers Industry Inc. 200 3,100
NN Ball & Roller, Inc. 300 4,050
Nu-Kote Holding Inc. Class A 300 2,869
Pall Corp. 300 7,688
Parker Hannifin Corp. 200 7,575
Precision Castparts Corp. 600 28,050
Quanex Corp. 200 5,700
Raychem Corp. 200 15,625
Roper Industries 500 21,281
SPS Technologies, Inc.* 100 6,000
SPX Corp. 300 8,513
Standex International Corp. 200 6,150
Stewart & Stevenson Services, Inc. 500 10,594
TRINOVA Corp. 1,600 52,600
Teleflex Inc. 600 28,875
Tencor Instruments 400 7,600
Tenneco, Inc. 800 39,600
Texas Industries Inc. 200 11,350
Thermo Ecotek Corp. 450 6,806
Timken Co. 100 4,463
TriMas Corp. 700 16,100
Tyco Labs Inc. 600 29,775
</TABLE>
92
<PAGE> 99
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
U.S. Filter Corp. (New) 900 $ 31,050
UNR Industries, Inc. 700 4,681
Valhi, Inc. (New) 1,600 9,400
Valmont Industries, Inc. 200 6,850
Visx Inc. (Delaware)* 300 7,500
W.H. Brady Co. Class A 500 11,688
W.W. Grainger, Inc. 200 14,825
WMS Industries Inc.* 300 7,350
Watts Industries Inc. Class A 700 14,613
Westinghouse Electric Corp. 1,500 25,688
Westpoint Stevens Inc. Class A 700 18,638
Wyman Gordon Co.* 700 15,313
X-Rite, Inc. 300 5,569
Zero Corp. 200 3,675
---------
2,089,427
---------
RAILROAD--0.4%
Burlington Northern Santa Fe 700 57,663
CSX Corp. 800 34,500
Conrail Inc. 700 66,588
Florida East Coast Industry Inc. 200 17,475
Norfolk Southern Corp. 900 80,213
Overseas Shipholding Group 800 13,600
Union Pacific Corp. 900 50,513
Westinghouse Air Brake Co. (New) 800 8,700
---------
329,252
---------
REAL PROPERTY--0.2%
Avatar Holdings, Inc.* 100 3,050
Castle & Cooke, Inc.* 400 6,150
Catellus Development Corp.* 1,500 14,813
Doubletree Corp.* 600 24,375
Forest City Enterprises, Inc. Class A 100 4,950
HFS, Inc. 500 36,625
Insignia Financial Group Class A (New) 800 17,300
Lennar Corp. 800 17,800
Price Enterprises Inc. 300 5,025
---------
130,088
---------
RETAIL--1.9%
Albertson's, Inc. 700 24,063
American Stores Co. (New) 600 24,825
AnnTaylor Stores Corp.* 300 5,438
Arbor Drugs, Inc. 600 13,650
Authentic Fitness Corp. 300 3,338
Burlington Coat Factory Warehouse* 500 6,125
CDW Computer Centers Inc. 300 18,825
</TABLE>
93
<PAGE> 100
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
CUC International Inc. 1,433 $ 35,096
Carson Pirie Scott & Co.* 200 4,975
Casey's General Stores Inc. 400 7,175
Cato Corp. (New) 300 1,444
Charming Shoppes Inc. 1,500 6,891
Circuit City Stores Inc. 400 13,100
Claire's Stores Inc. 1,125 19,125
CompUSA Inc. 800 37,000
Dayton Hudson Corp. 900 31,163
Dillard Department Stores Inc. Class A 400 12,700
Dollar Tree Stores Inc. 750 28,500
Duty Free International Inc. 600 9,600
Eagle Hardware & Garden, Inc.* 500 14,219
Federated Department Stores Inc.* 500 16,500
Fingerhut Companies, Inc. 600 8,925
Footstar Inc.* 115 2,530
Fred Meyer Inc.* 400 14,050
Fruit of the Loom Inc. Class A* 200 7,275
Gap Inc. 1,200 34,800
Giant Food Inc. Class A 300 10,125
Great Atlantic & Pacific Tea Co., Inc. 100 3,000
Gymboree Corp.* 600 18,825
Harcourt General Inc. 200 9,950
Hollywood Entertainment Corp. 500 10,344
Home Depot Inc. 2,000 109,500
J.C. Penney Inc. 1,000 52,500
Just for Feet Inc. 750 19,547
K Mart Corp. 1,800 17,550
Kroger Co.* 500 22,313
Lands' End, Inc.* 700 15,050
Limited Inc. 744 13,671
Longs Drug Stores Corp. 600 26,925
Lowes Cos Inc. 700 28,263
MacFrugals Bargains-Close-Outs, Inc.* 300 7,313
May Department Stores Co. 1,100 52,113
Melville Corp. 400 14,900
Mercantile Stores Co., Inc. 100 4,963
Michaels Stores Inc.* 300 3,000
Nordstrom Inc. 400 14,425
Payless Shoesource Inc.* 144 4,878
Pep Boys--Manny, Moe & Jack 200 7,000
Petco Animal Supplies Inc. 300 7,013
Pier 1 Imports Inc. 900 12,600
Price Costco Inc.* 700 13,869
Proffitt's, Inc.* 700 28,175
Quality Food Centers, Inc. 200 7,350
</TABLE>
94
<PAGE> 101
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Regis Corp. 300 $ 7,275
Rite Aid Corp. 200 6,800
Ross Stores Inc. 600 24,863
Ruddick Corp. 600 7,800
Sears Roebuck & Co. 1,700 82,238
Service Merchandise Co. Inc.* 1,300 7,638
Shopko Stores Inc. 400 6,450
Smart & Final Inc. 300 7,050
Smith's Food & Drug Centers, Inc. Class B 597 15,597
Sotheby's Holdings, Inc. Class A 800 13,600
Stanhome Inc. 300 7,950
Stein Mart Inc.* 400 7,150
TJX Companies, Inc. 200 8,000
Tandy Corp. 300 11,288
Toys "R" Us, Inc.* 1,000 33,875
Unifirst Corp. 500 10,063
United Stationers Inc. 200 4,425
Urban Outfitters Inc. 400 6,200
Value City Department Stores Inc.* 600 7,650
Vitalink Pharmacy Services, Inc.* 200 4,600
Waban Inc.* 700 18,288
Wal-Mart Stores, Inc. 9,600 255,600
Walgreen Co. 700 26,425
Wet Seal Inc.* 300 9,394
Whole Foods Market, Inc.* 300 7,706
Winn Dixie Stores Inc. 600 20,025
Woolworth Corp.* 200 4,200
Zale Corp. (New)* 500 9,688
---------
1,568,332
---------
STEEL--0.1%
Allegheny Teldyne Inc. 385 8,229
Armco Inc.* 1,700 6,375
Bethlehem Steel Corp.* 300 2,438
Birmingham Steel Corp. 400 6,400
Carpenter Technology Corp. 500 16,313
Chaparral Steel Co. 600 7,950
Cleveland Cliffs Inc. 200 8,200
Inland Steel Industries, Inc. 100 1,613
Intermet Corp. 300 3,506
J & L Specialty Steel Inc. 800 9,400
Lukens Inc. 200 2,750
National Steel Corp. Class B* 600 5,175
Nucor Corp. 300 14,213
Oregon Steel Mills Inc. 200 3,175
Rouge Steel Co. Class A 200 4,075
</TABLE>
95
<PAGE> 102
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
USX Corp. (U.S. Steel Group) 200 $ 5,450
Worthington Industries Inc. 200 4,138
-------
109,400
-------
TELEPHONE--2.1%
ACC Corp. 300 12,600
AT&T Corp. 7,300 254,588
Airtouch Communications Inc.* 1,900 49,638
Aliant Communications Inc. 800 12,800
Alltel Corp. 700 21,350
American Mobile Satellite Corp.* 600 6,300
Ameritech Corp. (New) 2,300 125,925
Andrew Corp. 150 7,313
Antec Corp.* 400 4,275
Arch Communications Group, Inc.* 500 5,781
Aspect Telecommunications Corp. 300 17,775
Associated Group Inc. Class A* 200 5,750
Bell Atlantic Corp. 1,800 108,450
BellSouth Corp. 3,700 150,775
Boston Technology Inc. (New)* 300 4,969
C-TEC Corp.* 400 9,675
CFW Communications Co. 300 6,600
Cellular Communications International* 200 6,300
Centennial Cellular Corp. Class A* 400 5,150
Cidco Inc.* 200 3,825
Coherent Communications Systems Corp. 600 11,738
Coherent Inc.* 200 7,825
Comnet Cellular Inc.* 200 5,550
DSC Communications Corp.* 100 1,394
Emmis Broadcasting Corp. Class A* 200 7,213
GTE Corp. 3,700 155,863
General Datacom Industries Inc.* 300 2,888
Geotek Communications Inc.* 1,100 8,113
InterVoice, Inc.* 200 2,588
Interdigital Commerce Corp.* 500 3,219
Intermedia Communications Inc.* 300 9,525
Intermediate Telephone Inc.* 300 4,575
International Cabletel Inc. 700 16,538
Jacor Communications Inc.* 700 19,381
MCI Communications Corp. 2,700 67,669
Mobile Telecommunications Technologies
Corp.* 1,100 14,506
Mobilemedia Corp. Class A* 900 1,786
Northern Telecom Ltd 1,100 71,638
Nynex Corp. 1,400 62,300
P-Com Inc. 300 6,600
Pacific Telesis Group 1,800 61,200
Pairgain Technologies Inc. 1,000 68,750
</TABLE>
96
<PAGE> 103
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Plantronics, Inc. (New)* 200 $ 7,525
Renaissance Communications Corp. 700 24,763
Roseville Communications Co. 300 7,013
Sprint Corp. 1,500 58,875
Tellabs Inc. 300 25,538
U S Long Distance Corp. 300 2,531
U S WEST, Inc. (Communications Group) 2,000 60,750
U S WEST, Inc. (Media Group)* 1,600 25,000
Vanguard Cellular Systems, Inc. Class A* 800 13,250
Winstar Communications Inc.* 500 10,469
Worldcom, Inc. 1,300 31,769
---------
1,698,181
---------
TOBACCO--0.6%
American Brands, Inc. 400 19,100
Loew's Corp. 600 49,575
Philip Morris Companies, Inc. 3,800 351,975
Schweitzer Mauduit International Inc. 450 13,838
UST Inc. 700 20,213
---------
454,701
---------
TRANSPORTATION-MISCELLANEOUS--0.3%
APL Ltd. 400 8,800
Air Express International Corp. 300 9,038
Airbourne Freight Corp. 300 5,963
Amerco Inc.* 800 28,300
American Freightways Corp.* 400 3,875
Arnold Industries Inc. 600 9,450
Caliber Systems Inc. 100 1,688
Consolidated Freightways Inc. 100 2,400
Expeditores International of Washington Inc. 200 8,400
Federal Express Corp. 600 48,300
Harper Group, Inc. 200 4,775
Heartland Express, Inc. 460 10,063
J.B. Hunt Transport Services Inc. 800 11,850
Landstar Systems, Inc.* 200 4,750
M.S. Carriers, Inc.* 200 3,800
NACCO Industries, Inc. Class A 300 13,875
Pittston Brinks Group 100 2,850
Pittston Co. (Burlington Group) 450 8,381
Roadway Express Inc. 450 7,200
Rollins Truck Leasing Corp. 600 6,825
Ryder System, Inc. 200 5,950
Swift Transportation Inc.* 300 6,788
U.S. Freightways Corp. 300 6,581
Wabash National Corp. 300 4,838
Werner Enterprises Inc. 900 15,638
</TABLE>
97
<PAGE> 104
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
XTRA Corp. 600 $ 24,900
Yellow Corp. 400 5,225
-------
270,503
-------
TRAVEL & RECREATION--0.6%
Acxiom Corp. 600 23,475
Anchor Gaming* 300 14,925
Aztar Corp.* 500 4,063
Bally Entertainment Corp. 1,200 36,150
Boyd Gaming Corp.* 1,000 7,375
Brunswick Corp. 200 4,700
Casino America Inc. 25 119
Central Parking Corp. 400 13,850
Harrahs Entertainment Inc.* 400 6,700
Hilton Hotels Corp. 800 24,300
ITT Corp. (New)* 200 8,400
K2 Inc. 200 4,600
Marcus Corp. 300 6,675
Marriott International Inc. 600 34,125
National Auto Credit Inc. 330 3,548
Players International Inc. 400 2,738
Polaris Industries Inc. 700 13,738
Primadonna Resorts Inc.* 400 6,425
Prime Hospitality Corp.* 900 13,725
Rio Hotel & Casino Inc.* 200 2,900
Showboat, Inc. 200 3,800
Sodak Gaming, Inc. 600 10,800
Sports Authority Inc. 450 10,913
Station Casinos Inc.* 700 7,788
Stratosphere Corp.* 1,100 1,564
Walt Disney Co. 3,239 213,369
-------
480,765
-------
UTILITIES--1.6%
American Electric Power Co., Inc. 700 29,050
Aquila Gas Pipeline Corp. 400 5,800
Atmos Energy Corp. 200 4,750
Baltimore Gas & Electric Co. 300 8,175
Bay Saint Gas Co. (Rights Callable
Through 11/30/99) 200 5,650
Black Hills Corp. 200 5,100
Carolina Power & Light Co. 300 10,838
Central & South West Corp. 800 21,200
Central Hudson Gas & Electric Corp. 500 15,000
Central Louisiana Electric Co. (New) 600 16,275
Central Maine Power Co. 700 8,225
Cilcorp Inc. 500 18,250
</TABLE>
98
<PAGE> 105
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Cinergy Corp. 600 $19,875
Coastal Corp. 100 4,300
Columbia Gas System, Inc. 300 18,225
Commonwealth Energy System
(Shares of Beneficial Interest) 400 9,600
Consolidated Edison Co. 600 17,550
Consolidated Natural Gas Co. 300 15,938
DTE Energy Co. 600 18,075
Destec Energy, Inc.* 1,100 16,500
Dominion Resources Inc. 700 26,425
Duke Power Co. 900 43,988
ENSERCH Corp. 100 2,150
Eastern Enterprises 400 15,400
Eastern Utilities Association 300 4,838
Edison International 1,500 29,625
Empire District Electric Co. 200 3,750
Enron Corp. 700 32,550
Entergy Corp. 900 25,200
FPL Group, Inc. 700 32,200
GPU Inc. 500 16,438
Global Industrial Technologies Inc.* 300 5,588
Houston Industries Inc. 1,000 22,875
IES Industries Inc. 700 21,525
Indiana Energy Inc. 600 14,700
Interstate Power Co. 100 3,038
K N Energy Inc. 700 26,163
Laclede Gas Co. 200 4,675
MDU Resources Group, Inc. 400 8,950
Madison Gas & Electric Co. 300 6,188
Minnesota Power & Light Co. 600 16,950
NICOR Inc. 100 3,488
New Jersey Resources Corp. 500 13,813
Niagara Mohawk Power Corp. 400 3,400
NorAm Energy Co. 300 4,613
Northern States Power Co. 200 9,400
Northwest Natural Gas Co. 300 7,556
Ohio Edison Co. 300 6,263
Oneok Inc. 500 13,438
Orange & Rockland Utilities, Inc. 200 7,025
Otter Tail Power Co. 200 6,475
P P & L Resources Inc. 500 11,688
Pacific Enterprises 200 6,150
Pacific Gas & Electric Co. 1,700 39,950
Pacificorp 1,100 23,238
Panhandle Eastern Corp. 600 23,100
Peco Energy Co. 900 22,725
</TABLE>
99
<PAGE> 106
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Peoples Energy Corp. 100 $ 3,525
Philadelphia Suburban Corp. 300 5,100
Piedmont Natural Gas Inc. 700 17,150
Primark Corp.* 600 14,925
Public Service Co. of New Mexico 900 16,875
Public Service Co. of North Carolina Inc. 200 3,600
Public Service Enterprise Group 900 24,188
Rochester Gas & Electric Corp. 800 14,900
Seagull Energy Corp.* 1,328 28,718
Sierra Pacific Resources 700 19,513
SIGCORP, Inc. 500 17,000
Sonat Inc. 300 14,775
South Jersey Industries Inc. 100 2,350
Southern Co. 2,800 61,950
Southern Union Co. (New) 300 7,463
Southwest Gas Corp. 300 5,738
Southwestern Energy Co. 300 4,463
Tejas Gas Corp. 300 12,188
Texas Utilities Co. 600 24,300
TNP Enterprises Inc. 300 7,763
Triarc Cos., Inc. Class A* 400 4,700
Tucson Electric Power Co.* 400 7,900
UGI Corp. (New) 700 16,538
Unicom Corp. 800 20,800
Union Electric Co. 100 3,863
United Illuminating Co. 200 6,650
United Water Resources Inc. 400 6,250
WPS Resources Corp. 600 17,850
Washington Energy Co. 300 5,775
Western Gas Resources Inc. 300 4,763
Wicor Inc. 500 17,813
Williams Cos. Inc. 400 20,900
----------
1,274,200
----------
34,363,616
----------
INTERNATIONAL -- 14.7%
AUSTRALIA -- 0.3%
Australia & New Zealand Banking Group 3,979 23,244
Broken Hill Proprietary Co., Ltd. 5,127 68,070
Coca Cola Amatil 1,466 20,161
Commonwealth Bank Group 2,675 25,126
National Australia Bank 3,902 42,837
News Corp., Ltd. 5,204 29,617
Western Mining Corp. 2,887 18,147
Westpac Banking Corp. 4,930 28,136
----------
255,338
----------
</TABLE>
100
<PAGE> 107
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
BELGIUM--0.2%
Electrabel 186 $ 43,175
Electrabel, VVPR Strip 25 26
Fortis AG 104 14,605
Generale de Banque 68 23,764
Petrofina SA 57 17,526
Societe Generale de Belgique 173 12,924
Tractebel 15 7
Tractebel Investor International 33 15,712
-------
127,739
-------
CANADA--0.5%
Alcan Aluminum Ltd. 551 18,090
BCE Inc. 816 37,476
Bank of Montreal 651 19,697
Bank of Nova Scotia, Halifax 565 17,812
Barrick Gold Corp. 1,453 38,054
Canadian Imperial Bank of Commerce 643 26,724
Canadian Pacific Ltd 866 21,905
Imperial Oil Ltd. (New) 472 20,797
Inco Ltd 450 14,220
Noranda Inc. 686 15,126
Northern Telecom Ltd. 660 42,992
Placer Dome Inc. 585 14,034
Royal Bank of Canada, Montreal Quebec 769 25,419
Seagram Co. Ltd. 972 36,626
Thomson Corp. 1,539 30,948
-------
379,920
-------
DENMARK--0.1%
D/S 1912 Class B 1 25,119
Novo Nordisk A/S Series B 97 16,155
Tele Danmark A/S Series B 340 17,140
-------
58,414
-------
FRANCE--0.9%
AXA Groupe SA 500 31,061
Alcatel Alsthom CGE SA 397 33,857
Banque Nationale de Paris 508 19,008
Canal Plus 67 16,578
Carrefour 99 54,937
Compagnie Financiere de Paribas (Bearer) 312 20,078
Compagnie Generale de Eaux 313 37,407
Compagnie de Saint-Gobain SA 221 29,827
Danone Groupe 188 25,741
Elf Aquitaine 705 56,372
L'Air Liquide 189 29,168
</TABLE>
101
<PAGE> 108
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
L'Oreal SA 174 $ 58,913
LVMH Moet Hennessy Louis Vuitton 226 51,809
Lafarge Coppee SA 245 14,702
Lyonnaise des Eaux-Dumez 154 13,615
Michelin (CGDE) Class B (Reg.) 302 14,561
PSA Peugeot Citroen 130 13,553
Pinault Printemps Redoute SA 58 21,873
Renault (Reg.) 633 13,496
Rhone-Poulenc SA A Shares 850 25,188
Roussel Uclaf 71 18,790
Sanofi 270 24,457
Schneider SA 350 17,115
Societe Generale 232 25,004
Suez Group 429 18,469
TOTAL Class B 622 48,653
Union des Assurances de Paris 821 17,054
-------
751,286
-------
GERMANY--1.1%
BASF AG 1,490 47,620
Bayer AG 1,964 74,208
Bayerische Hypotheken & Wechsel Bank AG 629 18,421
Bayerische Motoren Werk AG 61 35,688
Bayerische Vereinsbank AG 572 21,510
Commerzbank AG 1,000 22,405
Daimler Benz AG 1,442 84,650
Deutsche Bank AG 1,293 59,886
Dresdner Bank AG 1,151 30,782
Hoechst AG 1,600 60,169
Linde AG 22 13,619
Lufthansa AG 1,360 17,781
Mannesmann AG 92 35,721
Metro AG 245 20,093
Muenchener Rueckversicherung 10 19,480
Muenchener Rueckversicherung (Reg.) 23 54,979
RWE AG 846 34,825
RWE AG (Non Voting) 500 16,970
Sap AG 132 17,868
Siemens AG 1,560 80,606
Thyssen AG 77 13,779
Veba AG 1,378 73,495
Vereinigte Elektrizitatswerke Westfalen
Series B 43 14,311
Viag AG 71 26,255
Viag AG* 12 4,366
Volkswagen AG 86 33,860
-------
933,347
-------
</TABLE>
102
<PAGE> 109
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
HONG KONG--0.7%
CITIC Pacific 9,000 $ 43,765
Cathay Pacific Airways 7,000 10,954
Cheung Kong Holdings 5,000 40,092
China Light & Power 9,000 41,786
Hang Seng Bank Ltd. 3,400 40,344
Henderson China 12 27
Henderson Land Development Co. 5,000 44,457
Hong Kong Electric Holdings Ltd. 12,500 40,011
Hong Kong Telecommunications Ltd. 23,010 40,621
Hutchison Whampoa Ltd. 8,000 55,870
New World Development Co. 7,158 41,658
Sun Hung Kai Properties 5,000 56,905
Swire Pacific Ltd. Class A 6,000 52,960
Wharf Holdings 9,000 37,130
-------
546,580
-------
ITALY--0.3%
Assicurazioni Generali 2,159 41,700
Fiat SpA 8,042 21,497
Fiat SpA, di Risp (Non-Convertible) 5,394 7,823
INA 10,028 13,849
Istituto Bancario San Paolo di Torino 2,207 13,094
STET 9,950 34,369
STET di Risp (Non-Convertible) 2,791 7,433
Telecom Italia 16,255 36,217
Telecom Italia di Risp (Non-Convertible) 5,096 9,708
Telecom Italia Mob 17,228 35,603
Telecom Italia Mob di Risp 16,046 18,299
-------
239,592
-------
JAPAN--4.8%
Ajinomoto Co., Inc. 1,000 10,628
All Nippon Airways Co., Ltd. 2,000 16,670
Asahi Bank 5,000 51,381
Asahi Chemical Industry Co. 2,000 12,472
Asahi Glass Co., Ltd. 2,000 21,079
Bank of Tokyo-Mitsubishi, Ltd. 8,800 179,316
Bank of Yokohama 2,000 14,826
Bridgestone Corp. 2,000 33,727
Canon Inc. 2,000 38,294
Chiba Bank 1,000 7,518
Chubu Electric Power Co. 1,000 20,640
Chugoku Electric Power Co., Inc. 1,000 20,113
DDI Corp. 2 15,019
Dai Nippon Printing Co. 1,000 16,864
Dai-Ichi Kangyo Bank, Ltd. 6,000 97,492
</TABLE>
103
<PAGE> 110
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Daiei Inc. 1,000 $ 8,871
Daiwa Bank 4,000 22,660
Daiwa House Industries Co. 1,000 13,877
Daiwa Securities Co. 3,000 32,410
Denso Corp. 2,000 41,456
East Japan Railway Co. 4 18,374
Fuji Bank, Ltd. 6,000 108,032
Fuji Photo Film Co. 1,000 28,721
Fujitsu Ltd. 3,000 26,349
Gunma Bank 1,000 8,871
Hachijuni Bank 1,000 10,013
Hitachi Ltd. 7,000 62,097
Honda Motor Co., Ltd. 2,000 47,780
Industrial Bank of Japan, Ltd. 5,320 106,068
Ishikawajima-Harima Heavy Industries 3,000 13,833
Isuzu Motors Ltd. 2,000 9,890
Ito-Yokado Co., Ltd. 1,000 49,888
Itochu Corp. 2,000 12,068
Japan Air Lines Co., Ltd. 3,000 17,127
Japan Tobacco Inc. 2 14,123
Joyo Bank 1,000 6,605
Joyo Bank (Rights expire 11/20/96)* 100 309
Jusco Co. 1,000 29,687
Kajima Corp. 2,000 17,197
Kansai Electric Power Co. 2,000 41,983
Kao Corp. 1,000 11,769
Kawasaki Heavy Industries 2,000 9,152
Kawasaki Steel Co. 5,000 15,414
Kinki Nippon Railway Co. 4,060 26,923
Kirin Brewery Co., Ltd. 2,000 20,552
Kobe Steel 7,000 16,600
Kokusai Denki 1,000 86,514
Komatsu Ltd. 2,000 16,372
Kubota Corp. 2,000 11,313
Kyocera Corp. 1,000 65,961
Kyushu Electric Power Co. 2,000 40,929
Long-Term Credit Bank of Japan 4,000 26,525
Marubeni Corp. 2,000 9,257
Marui Co. 1,000 18,532
Matsushita Electric Industrial Co., Ltd. 4,000 63,941
Matsushita Electric Works 1,000 9,661
Mazda Motor Corp. 3,000 13,306
Mitsubishi Chemical Corp. 4,000 16,337
Mitsubishi Corp. 3,000 33,464
Mitsubishi Electric Corp. 5,000 28,940
Mitsubishi Estate Co. 3,000 37,416
</TABLE>
104
<PAGE> 111
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Mitsubishi Heavy Industries 7,000 $ 53,796
Mitsubishi Materials Co. 4,000 17,777
Mitsubishi Motors 1,000 8,274
Mitsubishi Trust & Banking Corp. 3,000 44,267
Mitsui & Co. 4,000 32,322
Mitsui Fudosan Co. 2,000 24,768
Mitsui Trust & Banking Co. 2,000 19,323
NEC Corp. 3,000 32,673
NKK Corp. 6,000 15,072
Nikko Securities Co. 3,000 28,721
Nippon Credit Bank 2,000 6,025
Nippon Express Co. 2,000 16,249
Nippon Oil Co. 2,000 11,418
Nippon Paper Industries Co. 3,000 16,916
Nippon Steel Corp. 15,000 43,740
Nippon Telegraph & Telephone Corp. 22 153,616
Nippon Yusen Kabushiki Kaisha 2,000 10,013
Nissan Motor Co., Ltd. 4,000 30,249
Nomura Securities Co., Ltd. 4,000 66,049
Obayashi Corp. 1,000 7,712
Odakyu Electric Railway Co. 30 185
Oji Paper Co. (New)* 1,000 7,308
Osaka Gas Co. 4,000 12,367
Ricoh Co., Ltd. 1,000 9,925
Rohm Co. 1,000 59,286
Sakura Bank 6,000 56,914
Sankyo Co. 1,000 24,768
Sanwa Bank 6,000 102,235
Sanyo Electric Co., Ltd. 3,000 14,545
Seibu Railway Co. 1,000 47,868
Sekisui Chemical Co. 1,000 11,155
Sekisui House 1,000 10,540
Seven-Eleven Japan Co. 1,100 63,959
Sharp Corp. 2,000 30,390
Shikoku Electric Power Co. 1,000 20,201
Shimizu Corp. 1,000 9,047
Shin-Etsu Chemical Co. 1,000 17,127
Shizuoka Bank 2,000 22,836
Sony Corp. 1,000 59,989
Sumitomo Bank 6,000 105,397
Sumitomo Chemical Co. 2,000 8,537
Sumitomo Corp. 2,000 16,143
Sumitomo Electric Industries 1,000 13,175
Sumitomo Marine & Fire Insurance Co. 1,000 7,167
Sumitomo Metal Industries 5,000 13,746
Sumitomo Trust & Banking Co. 2,000 22,133
</TABLE>
105
<PAGE> 112
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Suzuki Motor Corp. 1,000 $ 10,188
Taisei Corp. 1,000 6,148
Taisho Pharmaceutical Co. 1,000 19,850
Takeda Chemical Industries 2,000 34,254
Tobu Railway Co. 3,000 16,890
Tohoku Electric Power Co. 1,000 20,289
Tokai Bank 4,000 46,375
Tokio Marine & Fire Insurance Co. 3,000 32,937
Tokyo Electric Power Co., Inc. 3,000 68,772
Tokyo Gas Co. 5,000 15,590
Tokyu Corp. 2,000 13,438
Tonen Corp. 1,000 12,823
Toppan Printing Co. 1,000 12,209
Toray Industries Inc. 2,000 12,068
Toshiba Corp. 7,000 43,775
Toyo Seikan Kaisha 1,000 31,619
Toyo Trust & Banking Co. 1,000 8,537
Toyoda Automatic Loom 1,000 18,532
Toyota Motor Corp. 7,000 165,386
Yamaichi Securities Co. 2,000 11,137
Yamanouchi Pharmaceutical Co. 1,000 20,289
Yasuda Fire & Marine Insurance Co. 1,000 6,350
Yasuda Trust & Banking Co. 4,000 19,498
---------
3,936,083
---------
NETHERLANDS--0.9%
ABN-Amro Holdings NV 846 47,817
Aegon NV 693 35,248
Akzo Nobel NV 184 23,186
Dordtsche Petrol 92 15,996
Elsevier NV 1,717 28,537
Fortis Amev NV, CVA 490 14,642
Heineken NV 130 24,556
ING Groep NV 1,976 61,608
Koninklijke Ahold NV 504 29,408
Koninklijke PTT Nederland 1,249 45,199
Philips Electronics NV 895 31,544
PolyGram NV 467 21,937
Royal Dutch Petroleum Co. (Bearer) 1,453 239,954
SGS-Thomson Microelectronics NV* 374 19,817
Unilever NV, CVA 415 63,105
Wolters Kluwer NV, CVA 175 22,495
---------
725,049
---------
SINGAPORE--0.2%
City Developments 2,000 15,761
Hong Kong Land Holdings 7,180 16,011
</TABLE>
106
<PAGE> 113
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Jardine Matheson Holdings Ltd. 35 $ 198
Overseas Chinese Bank (alien market) 2,209 25,250
Singapore Airlines Ltd. (alien market) 3,000 26,411
Singapore Telecommunications 40,000 93,149
United Overseas Bank (alien market) 2,000 19,453
-------
196,233
-------
SPAIN--0.3%
Argentaria Corp. 326 12,775
Banco Bilbao-Vizcaya SA (Reg.) 583 28,329
Banco de Santander SA (Reg.) 414 21,252
Empresa Nacional de Electricidad 675 41,316
Gas Natural SDG SA 97 16,968
Iberdrola SA 2,409 25,582
Repsol, SA 778 25,396
Telefonica Internacional de Espana, SA 2,438 48,915
-------
220,533
-------
SWEDEN--0.3%
ABB AB Series A 164 18,581
ABB Series B 59 6,577
Astra AB Series A 1,228 56,398
Astra AB Series B 298 13,596
L.M. Ericsson Telephone Series B 2,720 73,629
Sandvik AB Series A 813 19,164
Sandvik AB Series B 338 7,967
Volvo AB Series A 858 17,745
Volvo AB Series B 787 16,337
-------
229,994
-------
SWITZERLAND--1.0%
ABB AG (Bearer) 20 24,715
ABB AG (Reg.) 25 6,092
CS Holding (Reg.) 453 45,246
Ciba-Geigy Ltd. (Bearer) 7 8,584
Ciba-Geigy Ltd. (Reg.) 66 81,299
Cie Financiere Richemont Series A (Bearer) 15 22,844
Holderbank Financiere Glaris (Bearer) 17 11,768
Holderbank Financiere Glaris (Regd) 82 11,466
Nestle Ltd. (Reg.) 109 118,400
Roche Group Holding AG 20 151,266
Roche Group Holding AG (Bearer) 4 49,051
Sandoz Ltd. (Bearer) 7 8,108
Sandoz Ltd. (Reg.) 95 109,806
Schweizerische Bankgesellschaft (Bearer) 62 59,057
Schweizerische Bankgesellschaft (Reg.) 34 6,563
Schweizerischer Bankverein (Reg.) 298 57,407
</TABLE>
107
<PAGE> 114
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Winterthur (Reg.) 20 $ 11,915
Zurich Versicherung (Reg.) 108 29,563
-------
813,150
-------
UNITED KINGDOM--3.1%
Abbey National 4,273 44,371
Allied Domecq PLC 2,602 20,074
Asda Group 7,862 14,972
Associated British Foods 2,656 18,243
BAA 2,573 20,730
BAT Industries 8,009 55,531
BOC Group 1,201 16,635
BTR 10,369 43,457
Barclays 4,223 66,294
Bass 2,160 27,703
Boots Co. 2,323 23,555
British Aerospace 1,067 20,267
British Airways 2,412 21,710
British Gas 11,258 34,998
British Petroleum Co. 15,677 168,469
British Sky Broadcast 4,306 40,439
British Steel 4,942 13,734
British Telecom 16,179 99,407
Cable & Wireless 5,805 46,107
Cadbury Schweppes 2,464 20,533
Commercial Union Assurance Co. 1,687 17,847
GKN 946 17,784
General Electric Co. 7,132 44,111
Glaxo Wellcome 9,642 151,441
Granada Group 2,300 33,130
Grand Metropolitan, Inc. 5,535 41,756
Great University Stores 2,463 24,614
Guinness 4,948 35,435
HSBC Holdings 2,164 45,471
HSBC Holdings (Hong Kong) 4,765 97,642
Hanson Industries 23,040 30,187
Imperial Chemical Industries 1,772 22,756
Imperial Tobacco* 1,387 8,127
J. Sainsbury PLC 4,531 26,844
Kingfisher 1,668 17,782
Legal & General Group 3,077 16,226
Lloyds Abbey Life 1,751 17,883
Lloyds TSB Group 13,782 87,371
Marks & Spencer PLC 7,269 61,048
National Power Development 2,904 19,143
National Westminster Bancorp 4,374 49,941
Pearson, Inc. 1,355 16,717
</TABLE>
108
<PAGE> 115
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Powergen 1,831 $ 15,199
Prudential Corp. 4,770 36,101
RTZ Corp. PLC 2,634 42,142
Rank Group 4,283 28,477
Reed International 1,374 25,584
Rentokil Group 3,980 26,721
Reuters Holdings PLC 4,937 61,471
Royal Bank of Scotland 2,000 16,374
Safeway PLC 2,871 17,033
Scot & Newcastle 1,495 15,536
Scottish Power 3,124 15,966
Shell Transport & Trading Co. 9,223 151,165
Siebe 1,085 17,024
SmithKline Beecham PLC (New) 7,540 93,146
Standard Chartered PLC 2,413 26,039
Tesco 5,173 28,037
Thorn EMI 1,070 21,020
Unilever 1,987 41,752
United News & Media PLC 1,280 14,042
Vendome Lux Group SA (units) 1,749 16,511
Vodafone Group 7,977 30,836
Whitbread 1,204 14,109
Zeneca Group 2,455 66,889
----------
2,521,659
----------
11,974,540
----------
TOTAL COMMON STOCK
(Cost $41,293,555) 46,338,156
----------
PREFERRED STOCK--0.1%
AUSTRALIA--0.0%
News Corp. Ltd. (Limited Voting Shares) 2,555 11,240
----------
GERMANY--0.0%
Metro AG (Non-Voting)* 186 11,238
Sap AG (Non-Voting) 99 13,323
Volkswagen AG (Non-Voting) 24 7,282
----------
20,605
----------
ITALY--0.0%
Fiat SpA 11,680 16,554
----------
</TABLE>
109
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SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
UNITED STATES--0.0%
Aetna Inc. 6.25% Class C (Voting) 44 $ 3,086
Fresenius National Medical Care Inc. Class D
(Special Dividend)* 400 52
Teledyne, Inc. Series E 1 16
------
3,154
------
TOTAL PREFERRED STOCK
(Cost $64,327) 62,791
------
WARRANTS--0.0%
SWITZERLAND--0.0%
Schweizerische Bankverein (expire 6/30/00)* 20 51
------
UNITED STATES--0.0%
Jacor Communications Inc. (expire 09/18/01)* 300 628
------
TOTAL WARRANTS
(Cost $6,756) 679
------
</TABLE>
110
<PAGE> 117
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--34.1%(a)
U.S. Treasury Bonds
10.00%, 05/15/10 $ 475,000 $ 585,072
10.38%, 11/15/12 500,000 648,610
7.25%, 05/15/16 5,000,000 5,296,950
7.50%, 11/15/16 500,000 542,575
8.13%, 08/15/19 3,925,000 4,547,741
7.25%, 08/15/22 750,000 795,413
7.13%, 02/15/23 1,200,000 1,256,364
6.25%, 08/15/23 725,000 681,123
U.S. Treasury Notes
5.88%, 08/15/98 1,775,000 1,779,722
6.13%, 08/31/98 3,200,000 3,222,496
5.00%, 02/15/99 500,000 491,600
7.00%, 04/15/99 600,000 616,098
7.50%, 10/31/99 1,900,000 1,980,351
5.75%, 10/31/00 1,500,000 1,485,780
6.25%, 04/30/01 500,000 503,685
6.38%, 08/15/02 900,000 910,935
5.88%, 02/15/04 1,150,000 1,124,930
6.50%, 05/15/05 400,000 404,416
6.50%, 08/15/05 200,000 202,240
6.88%, 05/15/06 500,000 518,185
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost
$27,154,668) 27,594,286
-----------
AGENCY OBLIGATIONS-COUPON NOTES--2.2%(a)
Federal National Mortgage Assoc.
8.50%, 02/01/05 1,050,000 1,110,774
7.25%, 06/01/05 650,000 656,032
-----------
TOTAL AGENCY OBLIGATIONS--COUPON NOTES
(Cost $1,757,834) 1,766,806
-----------
CASH EQUIVALENTS--10.8%
Federal Home Loan Bank Consolidated
Discount Notes(b)
5.30%, 01/30/97 3,950,000 3,899,123
</TABLE>
111
<PAGE> 118
SCHWAB ASSET DIRECTOR--BALANCED GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
Federal Home Loan Mortgage Corp. Discount
Notes(b)
5.30%, 11/01/96 $3,240,000 $ 3,240,000
Shares
----------
Seven Seas Money Market Fund(c)
5.04%, 11/07/96 1,594,120 1,594,120
----------
TOTAL CASH EQUIVALENTS
(Cost $8,732,671) 8,733,243
----------
TOTAL INVESTMENTS--104.3%
(Cost $79,009,811) 84,495,961
----------
OTHER ASSETS AND LIABILITIES--(4.3%)
Other Assets 871,473
Liabilities (4,386,970)
----------
(3,515,497)
----------
NET ASSETS--100% (Note 7)
Applicable to 7,331,569 outstanding shares,
$0.00001 par value (unlimited shares
authorized) $80,980,464
===========
NET ASSET VALUE PER SHARE $11.05
======
</TABLE>
See accompanying Notes to Statements of Net Assets.
112
<PAGE> 119
SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
COMMON STOCK--38.1%
DOMESTIC--28.1%
AEROSPACE/DEFENSE--0.5%
Alliant Techsystems Inc.* 100 $ 4,632
BFGoodrich Co. 100 4,238
Boeing Co. 100 9,538
Coltec Industries Inc.* 200 3,450
Gencorp Inc. 100 1,650
General Dynamics Corp. 100 6,863
Lockheed Martin Corp. 200 17,925
McDonnell Douglas Corp. 200 10,900
Northrop Grumman Corp. 100 8,075
OEA, Inc. 100 3,775
Orbital Sciences Corp. Class A* 100 2,113
Raytheon Co. 200 9,850
Rockwell International Corp. 200 11,000
Rohr Industries Inc.* 100 1,850
Textron Inc. 100 8,875
Thiokol Corp. 100 4,188
Trimble Navigation Ltd.* 100 1,419
United Technologies Corp. 100 12,875
-------
123,216
-------
AIR TRANSPORTATION--0.2%
AMR Corp.* 100 8,400
America West Airlines, Inc. Class B* 100 1,150
Atlantic Southeast Airlines Inc. 100 2,100
Atlas Air Inc.* 100 3,688
Comair Holdings Inc. 150 3,000
Delta Airlines Inc. 100 7,088
Mesa Air Group Inc.* 100 938
Offshore Logistics, Inc.* 100 1,681
Southwest Airlines Co. 100 2,250
Trans World Airlines Inc. (New)* 200 1,600
USAir Group, Inc.* 600 10,425
-------
42,320
-------
ALCOHOLIC BEVERAGES--0.2%
Adolph Coors Co. Class B 500 9,719
Anheuser-Busch Companies, Inc. 200 7,700
Brown Forman Corp. Class B 100 4,325
Canandaigua Wine Co., Inc. Class A* 100 2,288
Seagram Ltd 300 11,363
-------
35,395
-------
</TABLE>
113
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SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
APPAREL--0.3%
Brown Group Inc. 100 $ 2,063
Burlington Industries Inc.* 300 3,413
Cone Mills Corp.* 100 788
Justin Industries Inc. 100 1,025
Kellwood Co. 100 1,800
Liz Claiborne Inc. 100 4,225
Men's Wearhouse, Inc. 100 2,056
NIKE, Inc. Class B 200 11,775
Phillips-Van Heusen Corp. 100 1,100
Reebok International Ltd. 100 3,575
Springs Industries Inc. 200 9,025
St. John's Knits, Inc. 200 9,150
Stride Rite Corp. 200 1,650
V.F. Corp. 100 6,538
Wolverine World Wide Inc. 150 3,713
------
61,896
------
AUTOMOTIVE PRODUCTS--0.1%
Armor-All Products Corp. 100 1,663
Carlisle Cos. Inc. 100 5,688
Cooper Tire & Rubber 100 1,963
Discount Auto Parts Inc.* 100 2,175
Goodyear Tire & Rubber 100 4,588
------
16,077
------
BANKS--2.1%
Associated Banc-Corp. 100 3,988
Banc One Corp. 307 13,009
Bancorp South, Inc. 100 2,519
Bank of Boston Corp. 100 6,400
Bank of New York Co., Inc. 200 6,625
BankAmerica Corp. 100 9,150
Bankers Trust New York Corp. 100 8,450
Barnett Banks, Inc. 200 7,625
Boatmens Bancshares Inc. 100 6,081
CCB Financial Corp. 100 5,700
Centura Banks Inc. 100 3,888
Chase Manhattan Corp. (New) 308 26,411
Chemical Financial Corp. 100 3,738
Citicorp 200 19,800
Citizens Bancorp 100 5,100
City National Corp. 100 1,750
Comerica Inc. 100 5,313
Corestates Financial Corp. 100 4,863
Cullen/Frost Bankers Inc. 200 6,038
Dauphin Deposit Bank & Trust Co. 200 6,525
</TABLE>
114
<PAGE> 121
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Deposit Guaranty Corp. 100 $ 5,013
F & M National Corp. 100 1,850
Fifth Third Bancorp 100 6,275
First Bank System Inc. 188 12,408
First Chicago NBD Corp. 81 4,131
First Citizens Bancshares Inc. 100 6,725
First Commercial Corp. 112 3,806
First Commonwealth Financial Corp. 100 1,800
First Financial Bancorp 220 6,848
First Hawaiian, Inc. 200 6,200
First Michigan Bank Corp. 140 3,500
First Union Corp. 135 9,821
Fleet Financial Group Inc. (New) 189 9,426
Fulton Financial Corp. 110 2,186
Hancock Holding Co. 100 3,988
Imperial Bancorp 162 3,108
J.P. Morgan & Co. Inc. 200 17,275
Keycorp (New) 200 9,325
Keystone Financial Inc. 150 3,881
Long Island Bancorp Inc. 100 2,981
MBNA Corp. 150 5,663
Magna Group Inc. 100 2,788
Mark Twain Bancshares Inc. 100 4,588
Mellon Bank Corp. 100 6,513
Mid-Am, Inc. 110 1,939
National Bancorp of Alaska, Inc. 100 6,475
National City Corp. 100 4,338
National Commerce Bancorp 100 3,525
NationsBank Corp. 200 18,850
North Fork Bancorporation 100 3,163
Norwest Corp. 300 13,163
ONBANCorp, Inc. 100 3,644
Old National Bancorp 100 3,638
One Valley Bancorp of West Virginia Inc. 125 4,039
PNC Bank Corp. 100 3,625
People's Bank Bridgeport Conn. 100 2,563
Provident Bancorp Inc. 150 6,647
Regions Financial Corp. 76 3,791
Republic New York Corp. 100 7,625
Riggs National Corp. Washington D.C. 100 1,700
Security Capital Corp. 100 6,625
Sumitomo Bank 100 2,538
Summit Bancorp 90 3,679
Suntrust Banks, Inc. 200 9,325
Toronto-Dominion Bank 176 4,114
TrustCo Bank Corp. NY 115 2,516
</TABLE>
115
<PAGE> 122
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- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Trustmark Corp. 100 $ 2,475
U S Trust Corp. (New) 100 6,250
U.S. Bancorp 100 3,994
UMB Financial Corp. 110 4,304
UST Corp. 100 1,788
United Carolina Bancshares Corp. 150 3,863
Wachovia Corp. (New) 100 5,375
Wells Fargo & Co. 66 17,630
Westamerica Bancorp 100 5,088
Whitney Holding Corp. 100 3,188
-------
464,549
-------
BUSINESS MACHINES & SOFTWARE--2.2%
3COM Corp. 200 13,538
AST Research Inc.* 100 456
Apple Computer, Inc. 100 2,313
Auspex Systems, Inc.* 100 1,019
Bay Networks, Inc. 200 4,050
Borland International Inc.* 100 509
Broderbund Software Inc.* 100 2,800
Cabletron Systems Inc.* 100 6,238
Ceridian Corp.* 57 2,829
Cheyenne Software Inc.* 200 6,075
Cisco Systems Inc. 400 24,725
Compaq Computer Corp.* 200 13,925
Computer Assoc. International Inc. 300 17,738
Computer Horizons Corp. 100 3,113
Computer Sciences Corp.* 179 13,291
Compuware Corp.* 200 10,600
Comverse Technology Inc. (New)* 100 3,488
Data General Corp.* 300 4,463
Dell Computer Corp. 100 8,150
Dialogic Corp.* 100 3,388
Digital Equipment Corp.* 100 2,950
EMC Corp.* 200 5,250
Exabyte Corp.* 100 1,306
HCIA Inc.* 100 2,800
HNC Software Inc. 100 3,138
Hewlett Packard Co. 600 26,475
Honeywell Inc. 100 6,213
INSO Corp. 100 4,913
Intergraph Corp.* 500 4,719
International Business Machines 400 51,600
Learning Co. Inc.* 100 2,092
McAfee Associates, Inc. 225 10,252
Medic Computer Systems, Inc. 200 5,600
Microchip Technology Inc.* 200 7,225
</TABLE>
116
<PAGE> 123
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Microsoft Corp.* 400 $ 54,925
National Instruments Corp.* 100 2,900
Network General Corp. 200 4,788
Novell Inc.* 300 2,794
Novellus Systems, Inc.* 100 4,125
Oak Technology 200 2,000
Oracle Systems Corp. 300 12,694
Pitney Bowes Inc. 100 5,588
Platinum Technology Inc.* 300 4,350
Pure Atria Corp.* 154 4,187
Quantum Corp.* 300 6,056
Rational Software Corp. (New) 200 7,638
Read-Rite Corp.* 200 3,525
Safeguard Scientifics Inc. 200 7,950
Seagate Technology, Inc. 188 12,549
Security Dynamics Technology 100 8,075
Sequent Computer Systems, Inc.* 100 1,481
Silicon Graphics Inc.* 122 2,257
Stratus Computer Inc.* 100 2,238
Structural Dynamics Research Corp.* 200 3,538
Sun Microsystems Inc. 200 12,188
System Software Associates, Inc. 200 2,338
Tandem Computers Inc.* 100 1,263
Tech Data Corp.* 200 5,138
Transaction Systems Architects Inc. Class A 200 8,200
Unisys Corp.* 200 1,250
Wang Laboratories Inc. (New)* 100 2,331
Xerox Corp. 100 4,638
-------
468,245
-------
BUSINESS SERVICES--1.6%
Access Health Inc. 50 1,638
Accustaff Inc. 300 7,988
Affiliated Computer Services Inc. Class A 100 5,425
Allegiance Corp.* 40 750
Alternative Resources Corp. 100 1,994
American Business Information, Inc. 100 1,900
American Business Products, Inc. 100 2,225
American Management Systems, Inc. 150 4,763
American Medical Response, Inc.* 100 3,000
Amresco Inc. 100 2,094
Analysts International Corp. 200 4,900
Apollo Group, Inc. Class A 225 6,131
Automatic Data Processing, Inc. 200 8,325
BISYS Group, Inc.* 100 3,731
Bbn Corp.* 100 2,138
Bell & Howell Co. (New)* 100 2,675
</TABLE>
117
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SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Bowne & Co. Inc. 100 $ 2,338
Browning Ferris Industries Inc. 100 2,625
CDI Corp.* 100 2,750
Cambridge Technology Partners 300 9,863
Camco International Inc. 100 3,875
Catalina Marketing Corp. 200 10,175
Cerner Corp. 100 1,194
Checkfree Corp.* 200 3,625
Coventry Corp.* 100 1,000
Culligan Water Technologies Inc.* 100 3,750
Dames & Moore Inc. 100 1,338
DeVRY Inc. 100 4,988
Deluxe Corp. 100 3,263
Dionex Corp. 100 3,875
Dun & Bradstreet Corp. 200 11,575
Dynatech Corp.* 100 4,956
Employee Solutions Inc. 200 4,400
Express Scripts Inc. Class A* 100 2,813
Fair Issac & Co. Inc. 100 3,763
Filenet Corp.* 100 2,825
First Data Corp. 200 15,950
Franklin Quest Co.* 100 2,025
G&K Services, Inc. Class A 100 2,900
H & R Block Inc. 100 2,475
Health Management Systems, Inc. 150 3,506
Heritage Media Corp. Class A (New) 200 3,050
Hon Industries Inc. 100 3,538
Horizon Healthcare Corp.* 200 2,075
Information Resources, Inc.* 100 1,269
Integrated Health Services Inc. 100 2,463
Integrated Systems Inc. Class A 100 2,663
Interim Services Inc.* 100 4,000
Interpublic Group of Companies, Inc. 100 4,850
Jacobs Engineering Group Inc.* 100 2,213
John H. Harland Co. 300 9,338
Keane, Inc. 100 4,638
Kinder Care Learning Centers Inc.* 100 1,981
Kirby Corp.* 100 1,950
Laidlaw Inc. Class B (Non-Voting) 200 2,350
Mariner Health Group Inc.* 100 838
Maxicare Health Plans Inc. (New)* 100 1,869
Micro Warehouse, Inc.* 200 4,625
Molten Metal Technology, Inc.* 100 1,338
Moore Corp. Ltd 100 2,025
National Data Corp. 200 8,225
National Education Corp.* 200 3,250
</TABLE>
118
<PAGE> 125
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Netcom Online Communications* 100 $ 1,513
Network Equipment Technologies* 100 1,338
Norrell Corp. Georgia 100 2,500
Ogden Corp. 500 9,063
Orthodontic Centers of America Inc. 200 2,850
PAXAR Corp. 125 2,016
PHH Corp. 200 5,950
Payment Services Inc. 200 4,000
Physician Corp. of America* 100 1,113
Physician Reliance Network 200 1,169
Physicians Computer Network* 200 1,788
Psinet Inc.* 100 956
Quarterdeck Corp.* 100 516
R.R. Donnelley & Sons Co. 100 3,038
Rollins, Inc. 200 3,825
SEI Corp. 100 2,013
SPS Transaction Services, Inc.* 100 1,600
Scientific Games Holdings Corp.* 100 2,263
Service Corp. International 200 5,700
Standard Register Co. 100 2,600
Sun Healthcare Group Inc.* 100 1,275
Synetic Inc.* 100 3,681
True North Communications 100 2,375
U.S.A. Waste Services Inc.* 320 10,240
United Waste Systems, Inc. 200 6,850
Universal Health Services Inc. Class B 200 5,000
Valassis Communications Inc.* 100 1,800
Viad Corp. 100 1,450
WMX Technologies Inc. 300 10,313
Zebra Technologies Corp. Class A 200 5,750
-------
344,617
-------
CHEMICAL--0.8%
A. Schulman Inc. 100 2,094
Air Products & Chemicals Inc. 100 6,000
Arcadian Corp. 200 4,925
Calgon Carbon Corp. 100 1,000
Chemed Corp. 100 3,900
Crompton & Knowles Corp. 100 1,800
Dexter Corp. 100 3,100
Dow Chemical Co. 200 15,550
E.I. Du Pont de Nemours & Co. 300 27,825
Eastman Chemical Co. 100 5,275
Ferro Corp. 100 2,700
First Mississippi Corp. 100 2,900
Geon Co. 100 1,963
Great Lakes Chemical Corp. 100 5,213
</TABLE>
119
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SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
H.B. Fuller Co. 200 $ 8,325
Hercules Inc. 100 4,763
Lawter International Inc. 100 1,175
Lilly Industrial Inc. Class A 100 1,800
Millennium Chemicals Inc.* 30 608
Minnesota Mining & Manufacturing Co. 200 15,325
Monsanto Co. 300 11,888
Morton International Inc. 100 3,938
NCH Corp. 100 5,575
NL Industries Inc. (New) 200 1,700
OM Group Inc. 100 4,050
PPG Industries Inc. 200 11,400
Praxair Inc. 100 4,425
Rohm & Haas Co. 100 7,138
Scotts Co. Class A* 100 1,863
Union Carbide Corp. 100 4,263
W R Grace & Co. (Delaware)* 100 5,300
Wellman Inc. 100 1,775
-------
179,556
-------
CONSTRUCTION--0.3%
Blount International Inc. Class A 150 5,400
Calmat Co. 100 1,863
Centex Construction Products Inc. 100 1,563
Centex Corp. 400 12,050
Del Webb Corp. 100 1,600
Fluor Corp. 100 6,550
Global Industries Inc. 200 3,550
Kaufman & Broad Home Corp. 100 1,200
Mafco Consolidated Group Inc.* 100 2,788
Pulte Corp. 500 13,250
Regal Beloit Corp. 100 1,775
Sherwin Williams Co. 100 5,013
Southdown Inc. 100 2,738
Stone & Webster, Inc. 100 3,300
TJ International Inc. 100 1,938
Toll Brothers, Inc.* 100 1,713
-------
66,291
-------
CONSUMER-DURABLE--0.2%
Bassett Furniture Industries Inc. 100 2,238
Black & Decker Corp. 100 3,738
Champion Enterprises Inc. 200 3,950
Furniture Brands International Inc.* 200 2,675
Harman International Industries Inc. (New) 100 5,138
Interface Inc. Class A 100 1,675
Kimball International Inc. Class B 100 3,600
</TABLE>
120
<PAGE> 127
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
La-Z-Boy Chair Co. 100 $ 3,113
Masco Corp. 100 3,138
Maytag Corp. 100 1,988
National Presto Industries, Inc. 100 3,750
Newell Co. 100 2,838
Sturm, Ruger & Co., Inc. 200 3,750
Toro Co. 200 6,275
Whirlpool Corp. 100 4,725
Zenith Electronics Corp. 100 1,313
-------
53,904
-------
CONSUMER-NONDURABLE--0.5%
3DO Co.* 100 569
A.T. Cross Co. Class A 100 1,138
Acclaim Entertainment Inc.* 200 988
American Greetings Corp. Class A 100 2,931
Applebee's International, Inc. 100 2,431
Buffets Inc.* 100 1,106
Corning Inc. 200 7,750
Darden Restaurants Inc. 100 838
Department 56 Inc.* 100 2,200
Harcourt General Inc. 100 4,975
Hasbro Inc. 100 3,888
IHOP Corp. (New)* 100 2,231
International Dairy Queen Inc. Class A* 100 1,925
Jostens, Inc. 400 8,600
Landry's Seafood Restaurants, Inc. 100 2,013
Luby's Cafeterias, Inc. 400 8,400
Mattel Inc. 250 7,219
McDonald's Corp. 400 17,750
Mohawk Industries Inc.* 100 2,413
Papa John's International, Inc. 150 7,491
Premark International, Inc. 100 2,088
Rexall Sundown, Inc. 200 5,413
Rubbermaid Inc. 100 2,325
Russ Berrie & Co. Inc. 100 1,800
Ryan's Family Steak Houses Inc.* 200 1,450
Sbarro, Inc. 100 2,638
Shoney's Inc.* 100 738
Toy Biz Inc. Class A* 100 1,775
Wendy's International, Inc. 100 2,063
Williams-Sonoma Inc.* 100 2,763
-------
109,909
-------
CONTAINERS--0.1%
ACX Technologies Inc. 100 1,775
Ball Corp. 200 4,825
</TABLE>
121
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SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Crown Cork & Seal Inc. 100 $ 4,800
Gaylord Container Corp. Class A* 200 1,500
Greif Brothers Corp. Class A 100 2,813
Stone Container Corp. 100 1,525
------
17,238
------
ELECTRONICS--1.1%
AMETEK, Inc. 100 1,988
AMP Inc. 100 3,388
Advanced Micro Devices Inc. 180 3,195
Allen Group Inc. 100 1,588
Alliance Semiconductor Corp. 100 625
Anixter International Inc. 200 2,975
Applied Materials, Inc. 100 2,644
Augat Inc. 100 2,750
Belden Inc. 100 2,875
Burr Brown 100 2,150
Cable Design Technologies Corp. 100 2,575
Checkpoint Systems Inc. 100 2,238
Cyrix Corp.* 100 1,763
Dallas Semiconductor Corp. 100 2,000
FORE Systems, Inc. 400 15,875
General Instrument Corp.* 100 2,013
Gerber Scientific Inc. 100 1,350
Harris Corp. 100 6,263
Imation Corp.* 20 548
Integrated Device Technology Inc. 300 2,456
Intel Corp. 500 54,906
International Rectifier Corp. 200 2,475
Itron, Inc.* 100 1,631
Kemet Corp. 200 3,838
Kent Electronics Corp. 200 4,575
Kulicke & Soffa Industries Inc. 100 1,319
LSI Logic Corp. 100 2,650
Lam Research Corp.* 200 4,863
Lattice Semiconductor Corp.* 100 3,413
Lucent Technologies, Inc. 556 26,132
Macromedia Inc. 200 3,338
Marshall Industries* 100 3,013
Methode Electronics Inc. Class A 100 1,938
Micron Technology Inc. 200 5,075
Motorola Inc. 400 18,400
National Semiconductor Corp.* 100 1,925
Northern Telecom Ltd 200 13,025
Pioneer Standard Electronics Inc. 100 1,075
Rexel Inc.* 100 1,450
S3 Inc. 200 3,750
</TABLE>
122
<PAGE> 129
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Silicon Valley Group Inc.* 100 $ 1,669
Texas Instruments Inc. 200 9,625
VLSI Technology, Inc.* 200 3,450
VeriFone, Inc.* 100 3,363
Vicor Corp. 200 3,625
Wyle Electronics 100 2,988
Zilog Inc.* 100 1,975
-------
246,745
-------
ENERGY-DEVELOPMENT--0.6%
Amcol International Corp. 100 1,506
Atwood Oceanics Inc.* 100 5,525
BJ Services Co.* 100 4,488
Baker Hughes Inc. 100 3,563
Barrett Resources Corp.* 100 3,838
Benton Oil & Gas Co.* 100 2,444
Burlington Resources Inc. 100 5,038
Cabot Oil & Gas Corp. Class A 100 1,550
Chesapeake Energy Corp. 225 13,106
Devon Energy Corp. 100 3,488
Dresser Industries Inc. 100 3,288
Energy Ventures, Inc.* 100 4,400
Falcon Drilling Inc.* 100 3,550
Halliburton Co. 157 8,890
Helmerich & Payne Inc. 200 10,825
Louis Dreyfus Natural Gas Corp.* 100 1,688
Newfield Exploration Co.* 100 4,725
Nuevo Energy Co.* 100 4,988
Occidental Petroleum Corp. 200 4,900
Parker & Parsley Petroleum Co. 100 2,875
Parker Drilling Co.* 200 1,700
Rowan Cos. Inc.* 500 11,188
Schlumberger Ltd 100 9,913
Union Pacific Resources Group 269 7,398
United Meridian Corp.* 100 4,713
Varco International Inc.* 100 1,975
Vintage Petroleum Inc. 100 2,950
Zeigler Coal Holding Co. 100 1,813
-------
136,325
-------
FOOD-AGRICULTURE--1.5%
Archer-Daniels-Midland Co. 420 9,135
Bob Evans Farms, Inc. 200 2,525
CPC International Inc. 100 7,888
Campbell Soup Co. 200 16,000
Chiquita Brands International Inc. 200 2,500
Coca-Cola Co. 1,800 90,900
</TABLE>
123
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SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
ConAgra, Inc. 200 $ 9,975
Delta & Pine Land Co. 100 3,600
Dimon Inc. 100 1,900
Earthgrains Co. 16 848
Fleming Companies, Inc. 400 6,950
Flowers Industries, Inc. 200 4,675
General Mills Inc. 100 5,713
H.J. Heinz Co. 300 10,650
Hershey Foods Corp. 200 9,675
Hudson Foods Inc. Class A 100 1,663
International Multifoods Corp. 100 1,525
Interstate Bakeries Corp. (New) 100 4,238
J.M. Smucker Co. Class A 100 1,650
JP Foodservice, Inc.* 100 2,250
Kellogg Co. 200 12,700
Lance Inc. 100 1,769
Mississippi Chemical Corp. (New) 100 2,513
Pepsico Inc. 1,100 32,588
Pioneer Hi-Bred International Inc. 100 6,713
Quaker Oats Co. 100 3,550
Ralcorp Holdings, Inc.* 100 2,100
Ralston Purina Co. 100 6,613
Richfood Holdings Inc. 150 3,647
Sara Lee Corp. 300 10,650
Savannah Foods & Industries Inc. 100 1,600
Seaboard Corp. 100 21,125
Smithfield Foods Inc.* 100 2,875
Sysco Corp. 100 3,400
Tootsie Roll Industries, Inc. 100 3,675
Unilever 100 15,288
Whitman Corp. 100 2,425
Wm Wrigley Junior Co. 100 6,025
-------
333,516
-------
GOLD--0.1%
Barrick Gold Corp. 200 5,225
Battle Mountain Gold Co. 1,200 9,150
Getchell Gold Corp.* 100 4,450
Homestake Mining Co. 100 1,425
Meridian Gold Inc.* 200 875
Newmont Mining Corp. 100 4,625
Placer Dome Inc. 200 4,800
Santa Fe Pacific Gold Corp. 100 1,188
-------
31,738
-------
</TABLE>
124
<PAGE> 131
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
HEALTHCARE--2.2%
ALZA Corp.* 100 $ 2,588
Abbott Laboratories 500 25,313
Acuson* 100 2,113
Advanced Tissue Sciences Inc.* 100 1,625
Agouron Pharmaceuticals Inc.* 100 5,713
Alpharma, Inc. Class A 100 1,250
American Home Products Corp. 400 24,500
Amgen Inc. 200 12,263
Arrow International Inc. 100 2,850
Ballard Medical Products 100 1,763
Baxter International Inc. 200 8,325
Becton Dickinson & Co. 200 8,700
Biomet Inc. 100 1,613
Block Drug Inc. Class A 103 4,661
Boston Scientific Corp.* 167 9,081
Bristol Myers Squibb Co. 200 21,150
Cardinal Health Inc. 81 6,359
Carter Wallace Inc. 100 1,550
Cognex Corp. 200 2,550
Columbia/HCA Healthcare Corp. 300 10,725
Community Psychiatric Centers* 100 888
Cygnus Therapeutic Systems, Inc.* 100 1,438
Datascope Corp.* 100 1,688
Diagnostic Products Corp. 100 2,975
Eli Lilly & Co. 400 28,200
Enzo Biochem Inc. 105 1,916
Fresenius Medical Care AG
(Sponsored American Depository Receipts)* 215 6,396
Genesis Health Ventures, Inc. 150 3,431
Gilead Sciences Inc.* 100 2,319
Gulf South Medical Supply Inc. 100 2,175
Haemonetics Corp.* 100 1,788
HealthSouth Rehabilitation Corp.* 117 4,388
Herbalife International Inc. 100 2,000
Hologic Inc. 100 2,294
Human Genome Sciences Inc.* 100 3,625
Humana Inc.* 200 3,650
ICN Pharmaceuticals, Inc. 101 1,919
Immunex Corp. (New)* 100 1,356
Interneuron Pharmaceuticals* 100 2,450
Invacare Corp. 100 2,775
Isis Pharmaceuticals* 100 1,606
Isolyser Inc. 100 700
Johnson & Johnson 900 44,325
Jones Medical Industries Inc. 200 8,650
</TABLE>
125
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SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Kinetic Concepts Inc. 100 $ 1,313
Ligand Pharmaceuticals Inc. Class B 100 1,250
Lincare Holdings Inc.* 100 3,725
Liposome Inc.* 100 1,706
Living Centers of America* 100 2,338
Magellan Health Services Inc.* 100 1,838
Mallinckrodt Inc. 100 4,350
Marquette Medical System Inc.* 200 3,125
Medimmune Inc.* 100 1,556
Medtronic Inc. 200 12,875
Mentor Corp. 100 2,213
Merck & Co. Inc. 800 59,300
Mid Atlantic Medical Services Inc.* 200 2,150
Multicare Cos. Inc. 150 2,700
Nexstar Pharmaceuticals Inc.* 100 1,556
North American Vaccine Inc.* 200 4,450
Novacare Inc.* 200 1,650
Owens & Minor Inc. (New) 100 938
PDT Inc. 100 2,463
Patterson Dental Co.* 100 2,813
Perrigo Co.* 300 2,813
Pfizer Inc. 400 33,100
Pharmacia & Upjohn Inc. 200 7,200
Physician Sales & Service Inc. 200 4,225
Renal Treatment Centers Inc. 100 2,675
Respironics Inc.* 100 1,506
RoTech Medical Corp. 200 3,163
Roberts Pharmaceutical Corp.* 100 1,538
Salick Health Care, Inc.* 100 3,963
Schering Plough Corp. 200 12,800
Sepracor Inc.* 100 1,613
Sofamor/Danek Group Inc.* 100 2,750
Sola International Inc.* 100 3,613
Somatogen Inc.* 100 1,075
St. Jude Medical, Inc. 100 3,944
Sunrise Medical Inc.* 100 1,488
Target Therapeutics Inc. 100 3,694
Tecnol Medical Products Inc.* 100 1,263
Tenet Healthcare Corp.* 100 2,088
Thermedics Inc.* 200 4,150
United Healthcare Corp. 100 3,788
Ventritex Inc.* 100 2,281
Vertex Pharmaceuticals Inc.* 100 3,319
Warner Lambert Co. 200 12,725
West Company Inc. 100 2,688
-------
525,415
-------
</TABLE>
126
<PAGE> 133
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
HOUSEHOLD PRODUCTS--0.5%
Avon Products, Inc. 200 $ 10,850
Bush Boake Allen Inc.* 100 2,575
Church & Dwight Inc. 100 2,150
Clorox Co. 100 10,913
Colgate-Palmolive Co. 100 9,200
Dial Corp. (New) 100 1,375
Gillette Co. 300 22,425
International Flavors & Fragrances Inc. 100 4,138
Playtex Products Inc.* 200 1,700
Procter & Gamble Co. 500 49,500
Tupperware Corp. 100 5,138
-------
119,964
-------
IMAGING & PHOTO--0.1%
Avid Technology, Inc.* 100 1,369
BMC Industries, Inc. 100 2,963
Chyron Corp.* 400 2,050
Eastman Kodak Co. 100 7,975
Ultratech Stepper Inc. 100 1,688
-------
16,045
-------
INSURANCE--1.4%
20th Century Industries* 200 3,200
Aetna Inc. 122 8,159
Alexander & Alexander Services 300 4,575
Alfa Corp. 100 1,113
Allstate Corp. 200 11,225
American Annuity Group, Inc. 100 1,363
American Bankers Insurance Group, Inc. 100 4,788
American General Corp. 200 7,450
American International Group, Inc. 300 32,588
Aon Corp. 100 5,775
Argonaut Group, Inc. 100 2,900
Arthur J. Gallagher & Co. 100 2,938
CMAC Investment Corp. 100 6,913
Capital Re Corp. 100 3,875
Capitol American Financial Corp. 100 3,625
Chubb Corp. 200 10,000
Cigna Corp. 100 13,050
Citizens Corp. 100 2,013
Commerce Group Inc. 100 2,400
Conseco, Inc. 58 3,103
Crawford & Co. Class A 100 1,988
Crawford & Co. Class B 100 1,975
Enhance Financial Services Group Inc. 100 3,338
Financial Security Assured Holdings Ltd. 100 2,800
</TABLE>
127
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SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Foremost Corp. of America 100 $ 5,513
Fremont General Corp. 150 4,406
Frontier Insurance Group, Inc. 100 3,975
General Re Corp. 137 20,173
HCC Insurance Holdings, Inc. 250 6,375
Harleysville Group Inc. 100 2,775
Highlands Insurance Group Inc.* 10 198
Home Beneficial Corp. Class B 100 2,519
Horace Mann Educators Corp. (New) 100 3,425
ITT Hartford Group Inc. 100 6,300
Jefferson-Pilot Corp. 100 5,688
John Alden Financial Corp. 100 1,863
Kansas City Life Insurance Co. 100 5,475
Liberty Corp. 100 3,450
Lincoln National Corp. Inc. 100 4,850
MGIC Investment Corp. 100 6,863
Marsh & McLennan Companies 100 10,413
NAC Re Corp. 100 3,513
Orion Capital Corp. 100 5,438
Penncorp Financial Group Inc. 100 3,463
Presidential Life Corp. 100 1,138
Providian Corp. 100 4,700
Reinsurance Group of America Inc. 100 4,538
Reliance Group Holdings Inc. 500 4,125
Safeco Corp. 200 7,575
Selective Insurance Group, Inc. 100 3,400
Sierra Health Services Inc.* 100 2,863
St. Paul Companies, Inc. 100 5,438
Torchmark Corp. 100 4,838
Transamerica Corp. 100 7,588
UNUM Corp. 100 6,288
USF&G Corp. 100 1,900
United Companies Financial Corp. 100 2,988
United Insurance Companies, Inc.* 100 2,531
Vesta Insurance Group Inc. 150 3,844
W.R. Berkley Corp. 100 5,163
Zenith National Insurance Corp. 100 2,725
Zurich Reinsurance Centre Holdings, Inc. 100 3,000
-------
322,471
-------
MEDIA--0.7%
AMC Entertainment Inc.* 100 1,725
Banta Corp. 200 4,213
Cablevision Systems Corp. Class A* 100 3,113
Central Newspapers Inc. Class A 100 4,025
Century Communications Corp. Class A* 300 2,025
Comcast Corp. Class A 200 2,938
</TABLE>
128
<PAGE> 135
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Dow Jones & Co. Inc. 100 $ 3,300
Evergreen Media 150 4,031
Gannett Inc. 100 7,588
Harte Hanks Communications (New) 150 3,881
Hollinger International Inc. 300 3,750
Houghton Mifflin Co. 100 4,963
International Family Entertainment Inc. Class
B 125 2,234
John Wiley & Son, Inc. Class A 100 3,063
Knight-Ridder, Inc. 200 7,475
McClatchy Newspapers Inc. Class A 100 2,788
McGraw-Hill, Inc. 100 4,688
Meredith Corp. 100 5,025
Metromedia International Group, Inc.* 100 988
New World Communications Class A* 100 2,469
New York Times Co. Class A 100 3,613
Oak Industries Inc.* 100 2,538
Paxson Communications Corp.* 100 888
Pulitzer Publishing Co. 100 6,350
Regal Cinemas, Inc. 225 5,808
SBC Communications Inc. 400 19,450
Spelling Entertainment Group, Inc.* 400 2,900
TCA Cable TV Inc. 100 2,663
Tele Communications Inc. (New)--TCI Group
Series A 500 6,219
Time Warner Inc. 300 11,175
Times Mirror Co. (New) Series A 100 4,625
Tribune Co. (New) 100 8,175
United International Holdings Inc. Class A* 100 1,250
Viacom Inc. Class B* 300 9,788
Westwood One Inc.* 100 1,550
-------
161,274
-------
MISCELLANEOUS FINANCE--1.0%
AMCORE Financial, Inc. 100 2,094
Alex Brown Inc. 100 5,675
American Express Co. 200 9,400
Americredit Corp.* 100 1,900
Astoria Financial Corp. 200 7,088
Beneficial Corp. 100 5,850
Bok Financial Corp. (New) 100 2,650
Cal-Federal Bancorp Inc.* 200 4,650
Coast Savings Financial Inc.* 100 3,288
Collective Bancorp Inc. 100 3,013
Commercial Federal Corp. 100 4,188
Dean Witter Discover & Co. 100 5,888
Eaton Vance Corp. (Non Voting) 100 4,375
Federal Home Loan Mortgage Corp. 200 20,200
</TABLE>
129
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SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Federal National Mortgage Assoc. 800 $ 31,300
First Financial Corp. 100 2,725
Fund American Enterprises Holdings, Inc. 100 8,963
Glendale Federal Bank (FSB) (New)* 100 1,838
Great Western Financial Corp. 100 2,800
Green Tree Financial Corp. 100 3,963
H.F. Ahmanson & Co. 100 3,138
Home Financial Corp. 100 1,619
Household International Inc. 100 8,850
Interpool Inc. 100 2,175
John Nuveen Co. Class A 200 5,550
Merrill Lynch & Co. Inc. 200 14,050
Money Store Inc. 250 6,500
Morgan Stanley Group Inc. 200 10,050
Olympic Financial Ltd.* 100 1,588
Peoples Heritage Financial Group, Inc. 100 2,300
Pioneer Group Inc. 100 2,375
Quick & Reilly Group, Inc. 100 2,638
Raymond James Financial Inc. 100 2,438
Roosevelt Financial Group Inc. 200 3,463
Salomon Inc. 100 4,513
Sovereign Bancorp Inc. 105 1,240
St. Paul Bancorp Inc. 100 2,650
Standard Financial Inc. 100 1,788
Student Loan Corp. 100 3,400
Travelers Inc. 300 16,275
Washington Federal, Inc. 200 4,813
Westcorp Inc. 105 2,494
-------
235,755
-------
MOTOR VEHICLE--0.5%
Arctic Cat Inc. 100 944
Arvin Industries, Inc. 100 2,288
Borg Warner Automotive Inc. 100 3,838
Breed Technologies Inc. 100 2,300
Chrysler Corp. 400 13,450
Dana Corp. 100 2,963
Detroit Diesel Corp.* 100 1,850
Eaton Corp. 100 5,975
Echlin Inc. 100 3,263
Federal Mogul Corp. 100 2,238
Ford Motor Co. 800 25,000
General Motors Corp. 400 21,550
Gentex Corp. 200 4,700
Genuine Parts Co. 100 4,375
Hays Wheels International Inc.* 10 335
Mascotech Inc. 200 3,150
</TABLE>
130
<PAGE> 137
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Modine Manufacturing Co. 100 $ 2,500
Navistar International Corp.* 300 2,775
Standard Products Co. 100 2,425
Superior Industries International, Inc. 100 2,438
TRW Inc. 100 9,050
Titan Wheel International Inc. 100 1,275
-------
118,682
-------
NON-FERROUS--0.3%
Alcan Aluminum Ltd. 100 3,288
Aluminum Company of America 200 11,725
Cyprus Amax Minerals Co. 100 2,263
Echo Bay Mines Ltd 200 1,563
Engelhard Corp. 100 1,825
Freeport-McMoRan Copper & Gold Inc. Class B 100 3,038
Hecla Mining Co.* 100 563
Inco Ltd 100 3,175
Kaiser Aluminum Corp.* 300 3,338
Minerals Technologies Inc. 200 7,850
Mueller Industries Inc. 100 4,025
Phelps Dodge Corp. 100 6,288
Reynolds Metals Co. 100 5,625
Stillwater Mining Co.* 100 1,688
Wolverine Tube Inc.* 200 7,975
-------
64,229
-------
OIL-DOMESTIC--0.3%
Amerada Hess Corp. 100 5,538
Atlantic Richfield Co. 100 13,250
Cross Timbers Oil Co. 100 2,363
Diamond Shamrock Inc. 100 2,938
Kerr-McGee Corp. 100 6,275
Phillips Petroleum Co. 200 8,200
Quaker State Corp. 100 1,675
Snyder Oil Corp. 100 1,525
Sun Inc. 100 2,238
Tosco Corp. 61 3,424
TransTexas Gas Corp.* 300 4,125
USX Corp. (Marathon Group) (New) 200 4,375
Unocal Corp. 200 7,325
-------
63,251
-------
OIL-INTERNATIONAL--1.1%
Amoco Corp. 300 22,725
Chevron Corp. 500 32,875
Exxon Corp. 800 70,900
Mobil Corp. 300 35,025
</TABLE>
131
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SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Royal Dutch Petroleum Co. 300 $ 49,613
Texaco, Inc. 200 20,325
Western Atlas, Inc.* 100 6,938
-------
238,401
-------
PAPER--0.4%
Alco Standard Corp. 100 4,638
Caraustar Industries Inc. 100 2,906
Champion International Corp. 100 4,350
Chesapeake Corp. 100 2,825
Georgia Pacific Corp. 100 7,500
International Paper Co. 200 8,550
James River Corp. 100 3,150
Kimberly Clark Corp. 178 16,599
Longview Fibre Co. 200 3,475
Louisiana Pacific Corp. 100 2,088
Mead Corp. 100 5,675
P.H. Glatfelter Co. 200 3,800
Rock Tennessee Co. Class A 110 2,008
Shorewood Packaging Corp.* 100 1,900
Temple-Inland Inc. 100 5,125
Union Camp Corp. 100 4,875
Wausau Paper Mills Co. 125 2,391
Westvaco Corp. 100 2,850
Weyerhaeuser Co. 200 9,175
Willamette Industries, Inc. 100 6,725
-------
100,605
-------
PRODUCER GOODS-MANUFACTURING--1.7%
Albany International Corp. Class A (New) 100 2,250
Allied Signal Inc. 100 6,550
AptarGroup, Inc. 100 3,225
Avery Dennison Corp. 100 6,588
BT Office Products International Inc.* 100 825
BW/IP Holding, Inc. Class A 100 1,350
Baldor Electric Co. 100 2,013
Case Corp. 100 4,650
Caterpillar Inc. 200 13,725
Collins & Aikman Corp.* 200 1,200
Cooper Industries Inc. 100 4,025
Credence Systems Corp. 100 1,369
Deere & Co. 100 4,175
Donaldson Inc. 100 2,925
Dover Corp. 100 5,138
Duriron Inc. 100 2,688
Emerson Electric Co. 200 17,800
FMC Corp. (New)* 100 7,363
</TABLE>
132
<PAGE> 139
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Fisher Scientific International, Inc. 100 $ 4,488
General Electric Co. 1,200 116,100
Giddings & Lewis Inc. 200 2,325
Goulds Pumps Inc. 100 2,306
Greenfield Industries Inc. 100 2,613
Helix Technology Corp. 100 2,669
Herman Miller, Inc. 100 4,338
Hexcel Corp. (New)* 200 3,650
IDEX Corp. 100 3,763
ITT Industries Inc. 100 2,325
Illinois Tool Works Inc. 100 7,025
Ingersoll Rand Co. 100 4,163
Insilco Corp.* 100 3,950
Ionics Inc.* 100 4,600
Johnson Controls, Inc. 100 7,300
Juno Lighting Inc. 100 1,556
Kaydon Corp. 100 4,075
Kennametal Inc. 100 3,400
Keystone International Inc. 100 1,800
Lincoln Electric Co. Class A (Non Voting) 100 2,788
Lydall Inc. 100 2,213
Myers Industry Inc. 100 1,550
Nu-Kote Holding Inc. Class A 100 956
Pall Corp. 100 2,563
Parker Hannifin Corp. 100 3,788
Precision Castparts Corp. 100 4,675
Raychem Corp. 100 7,813
Roper Industries 100 4,256
Standex International Corp. 100 3,075
Stewart & Stevenson Services, Inc. 100 2,119
TRINOVA Corp. 200 6,575
Teleflex Inc. 100 4,813
Tencor Instruments 100 1,900
Tenneco, Inc. 200 9,900
Texas Industries Inc. 100 5,675
TriMas Corp. 200 4,600
Tyco Labs Inc. 100 4,963
U.S. Filter Corp. (New) 150 5,175
UNR Industries, Inc. 200 1,338
Valhi, Inc. (New) 500 2,938
Visx Inc. (Delaware)* 100 2,500
W.W. Grainger, Inc. 100 7,413
WMS Industries Inc.* 100 2,450
Watts Industries Inc. Class A 100 2,088
Westinghouse Electric Corp. 300 5,138
Westpoint Stevens Inc. Class A 100 2,663
</TABLE>
133
<PAGE> 140
SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Wyman Gordon Co.* 100 $ 2,188
X-Rite, Inc. 100 1,856
-------
380,274
-------
RAILROAD--0.3%
Burlington Northern Santa Fe 100 8,238
CSX Corp. 200 8,625
Conrail Inc. 100 9,513
Florida East Coast Industry Inc. 100 8,738
Norfolk Southern Corp. 100 8,913
Overseas Shipholding Group 100 1,700
Union Pacific Corp. 200 11,225
Westinghouse Air Brake Co. (New) 100 1,088
-------
58,040
-------
REAL PROPERTY--0.1%
Catellus Development Corp.* 200 1,975
Doubletree Corp.* 100 4,063
Forest City Enterprises, Inc. Class A 100 4,950
HFS, Inc. 100 7,325
Insignia Financial Group Class A (New) 100 2,163
Lennar Corp. 200 4,450
Price Enterprises Inc. 100 1,675
-------
26,601
-------
RETAIL--1.3%
Albertson's, Inc. 200 6,875
American Stores Co. (New) 100 4,138
Arbor Drugs, Inc. 100 2,275
Authentic Fitness Corp. 100 1,113
Best Buy Co., Inc.* 200 3,275
Burlington Coat Factory Warehouse* 100 1,225
CDW Computer Centers Inc. 150 9,413
CUC International Inc. 219 5,366
Carson Pirie Scott & Co.* 100 2,488
Casey's General Stores Inc. 100 1,794
Charming Shoppes Inc. 300 1,378
Circuit City Stores Inc. 100 3,275
Claire's Stores Inc. 225 3,825
CompUSA Inc. 200 9,250
Dayton Hudson Corp. 100 3,463
Dillard Department Stores Inc. Class A 100 3,175
Dollar Tree Stores Inc. 150 5,700
Duty Free International Inc. 100 1,600
Family Dollar Stores, Inc. 300 5,100
Federated Department Stores Inc.* 100 3,300
Fingerhut Companies, Inc. 100 1,488
</TABLE>
134
<PAGE> 141
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Footstar Inc.* 28 $ 616
Fred Meyer Inc.* 100 3,513
Fruit of the Loom Inc. Class A* 100 3,638
Gap Inc. 200 5,800
Gymboree Corp.* 100 3,138
Hollywood Entertainment Corp. 100 2,069
Home Depot Inc. 300 16,425
Home Shopping Network, Inc.* 400 4,050
J.C. Penney Inc. 200 10,500
Just for Feet Inc. 150 3,909
K Mart Corp. 300 2,925
Kroger Co.* 100 4,463
Lands' End, Inc.* 100 2,150
Limited Inc. 109 2,003
Longs Drug Stores Corp. 100 4,488
Lowes Cos Inc. 100 4,038
MacFrugals Bargains-Close-Outs, Inc.* 100 2,438
May Department Stores Co. 200 9,475
Melville Corp. 100 3,725
Michaels Stores Inc.* 100 1,000
Nordstrom Inc. 100 3,606
Payless Shoesource Inc.* 32 1,084
Pier 1 Imports Inc. 100 1,400
Price Costco Inc.* 100 1,981
Proffitt's, Inc.* 100 4,025
Rite Aid Corp. 100 3,400
Ross Stores Inc. 100 4,144
Ruddick Corp. 100 1,300
Sears Roebuck & Co. 200 9,675
Service Merchandise Co. Inc.* 300 1,763
Shopko Stores Inc. 100 1,613
Smart & Final Inc. 100 2,350
Smith's Food & Drug Centers, Inc. Class B 74 1,933
Sotheby's Holdings, Inc. Class A 100 1,700
Spiegel, Inc. Class A (Non Voting) 400 2,725
Stanhome Inc. 100 2,650
Stein Mart Inc.* 100 1,788
Tandy Corp. 100 3,763
Tiffany & Co. (New) 200 7,400
Toys "R" Us, Inc.* 200 6,775
Unifirst Corp. 100 2,013
Waban Inc.* 100 2,613
Wal-Mart Stores, Inc. 1,600 42,600
Walgreen Co. 200 7,550
Winn Dixie Stores Inc. 200 6,675
</TABLE>
135
<PAGE> 142
SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Woolworth Corp.* 100 $ 2,100
Zale Corp. (New)* 100 1,938
-------
300,443
-------
STEEL--0.1%
Allegheny Teldyne Inc. 192 4,104
Armco Inc.* 300 1,125
Bethlehem Steel Corp.* 100 813
Birmingham Steel Corp. 100 1,600
Carpenter Technology Corp. 100 3,263
Chaparral Steel Co. 100 1,325
Cleveland Cliffs Inc. 100 4,100
Intermet Corp. 100 1,169
J & L Specialty Steel Inc. 100 1,175
Lukens Inc. 100 1,375
National Steel Corp. Class B* 100 863
Nucor Corp. 100 4,738
Oregon Steel Mills Inc. 100 1,588
USX Corp. (U.S. Steel Group) 100 2,725
Worthington Industries Inc. 100 2,069
-------
32,032
-------
TELEPHONE--1.3%
360 Communications Co.* 100 2,263
ACC Corp. 100 4,200
AT&T Corp. 1,100 38,363
Airtouch Communications Inc.* 300 7,838
Aliant Communications Inc. 100 1,600
Alltel Corp. 100 3,050
American Mobile Satellite Corp.* 100 1,050
Ameritech Corp. (New) 400 21,900
Antec Corp.* 100 1,069
Arch Communications Group, Inc.* 100 1,156
Aspect Telecommunications Corp. 100 5,925
Associated Group Inc. Class A* 100 2,875
Bell Atlantic Corp. 200 12,050
BellSouth Corp. 600 24,450
Boston Technology Inc. (New)* 100 1,656
C-TEC Corp.* 200 4,838
Coherent Inc.* 100 3,913
Comnet Cellular Inc.* 100 2,775
DSC Communications Corp.* 100 1,394
GTE Corp. 600 25,275
General Datacom Industries Inc.* 100 963
Geotek Communications Inc.* 200 1,475
InterVoice, Inc.* 100 1,294
Interdigital Commerce Corp.* 100 644
</TABLE>
136
<PAGE> 143
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
International Cabletel Inc. 100 $ 2,363
Jacor Communications Inc.* 100 2,769
Loral Space & Communications* 100 1,588
MCI Communications Corp. 500 12,531
Mobile Telecommunications Technologies Corp.* 300 3,956
Mobilemedia Corp. Class A* 100 198
Nextel Communications Inc.* 107 1,719
Nynex Corp. 200 8,900
Octel Communications Corp. 200 3,188
Pacific Telesis Group 300 10,200
Pairgain Technologies Inc. 200 13,750
Renaissance Communications Corp. 100 3,538
Sprint Corp. 300 11,775
Tellabs Inc. 100 8,513
U S WEST, Inc. (Communications Group) 400 12,150
U S WEST, Inc. (Media Group)* 300 4,688
Vanguard Cellular Systems, Inc. Class A* 200 3,313
Winstar Communications Inc.* 200 4,188
Worldcom, Inc. 200 4,888
-------
286,231
-------
TOBACCO--0.3%
American Brands, Inc. 100 4,775
Loew's Corp. 100 8,263
Philip Morris Companies, Inc. 600 55,575
Schweitzer Mauduit International Inc. 110 3,383
UST Inc. 100 2,888
-------
74,884
-------
TRANSPORTATION-MISCELLANEOUS--0.3%
APL Ltd. 100 2,200
Air Express International Corp. 100 3,013
Airbourne Freight Corp. 100 1,988
Amerco Inc.* 100 3,538
American Freightways Corp.* 100 969
Arnold Industries Inc. 100 1,575
Federal Express Corp. 100 8,050
Harper Group, Inc. 200 4,775
Heartland Express, Inc. 150 3,281
J.B. Hunt Transport Services Inc. 100 1,481
NACCO Industries, Inc. Class A 200 9,250
Rollins Truck Leasing Corp. 100 1,138
Ryder System, Inc. 100 2,975
Swift Transportation Inc.* 100 2,263
U.S. Freightways Corp. 100 2,194
Wabash National Corp. 100 1,613
Werner Enterprises Inc. 150 2,606
</TABLE>
137
<PAGE> 144
SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
XTRA Corp. 100 $ 4,150
Yellow Corp. 100 1,306
-------
58,365
-------
TRAVEL & RECREATION--0.5%
Aexiom Corp. 200 7,825
Anchor Gaming* 100 4,975
Aztar Corp.* 100 813
Bally Entertainment Corp. 500 15,063
Bally Total Fitness Holding Corp.* 25 126
Boyd Gaming Corp.* 200 1,475
Brunswick Corp. 100 2,350
Harrahs Entertainment Inc.* 100 1,675
Hilton Hotels Corp. 400 12,150
ITT Corp. (New)* 100 4,200
K2 Inc. 100 2,300
Marcus Corp. 100 2,225
Marriott International Inc. 100 5,688
National Auto Credit Inc. 110 1,183
Players International Inc. 100 684
Polaris Industries Inc. 100 1,963
Primadonna Resorts Inc.* 100 1,606
Prime Hospitality Corp.* 100 1,525
Rio Hotel & Casino Inc.* 100 1,450
Speedway Motorsports, Inc. 200 4,575
Sports Authority Inc. 150 3,638
Station Casinos Inc.* 100 1,113
Stratosphere Corp.* 100 142
Walt Disney Co. 509 33,530
-------
112,274
-------
UTILITIES--1.3%
American Electric Power Co., Inc. 100 4,150
Aquila Gas Pipeline Corp. 100 1,450
Baltimore Gas & Electric Co. 100 2,725
Carolina Power & Light Co. 100 3,613
Central & South West Corp. 200 5,300
Central Hudson Gas & Electric Corp. 100 3,000
Central Louisiana Electric Co. (New) 100 2,713
Central Maine Power Co. 100 1,175
Cilcorp Inc. 100 3,650
Cinergy Corp. 100 3,313
Coastal Corp. 100 4,300
Commonwealth Energy System
(Shares of Beneficial Interest) 200 4,800
Consolidated Edison Co. 200 5,850
Consolidated Natural Gas Co. 100 5,313
</TABLE>
138
<PAGE> 145
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
DTE Energy Co. 100 $ 3,013
Destec Energy, Inc.* 300 4,500
Dominion Resources Inc. 100 3,775
Duke Power Co. 200 9,775
Eastern Enterprises 100 3,850
Eastern Utilities Association 100 1,613
Edison International 300 5,925
Enron Corp. 200 9,300
Entergy Corp. 200 5,600
FPL Group, Inc. 200 9,200
GPU Inc. 100 3,288
Global Industrial Technologies Inc.* 100 1,863
Houston Industries Inc. 200 4,575
IES Industries Inc. 100 3,075
Indiana Energy Inc. 100 2,450
K N Energy Inc. 100 3,738
Laclede Gas Co. 100 2,338
MDU Resources Group, Inc. 100 2,238
Minnesota Power & Light Co. 200 5,650
New Jersey Resources Corp. 100 2,763
Niagara Mohawk Power Corp. 100 850
NorAm Energy Co. 200 3,075
Northern States Power Co. 100 4,700
Northwest Natural Gas Co. 150 3,778
Ohio Edison Co. 100 2,088
Oneok Inc. 200 5,375
Orange & Rockland Utilities, Inc. 100 3,513
Otter Tail Power Co. 200 6,475
P P & L Resources Inc. 100 2,338
Pacific Enterprises 100 3,075
Pacific Gas & Electric Co. 300 7,050
Pacificorp 200 4,225
Panhandle Eastern Corp. 100 3,850
Peco Energy Co. 200 5,050
Piedmont Natural Gas Inc. 100 2,450
Primark Corp.* 100 2,488
Public Service Co. of New Mexico 200 3,750
Public Service Co. of North Carolina Inc. 100 1,800
Public Service Enterprise Group 200 5,375
Rochester Gas & Electric Corp. 200 3,725
Seagull Energy Corp.* 188 4,066
Sierra Pacific Resources 100 2,788
SIGCORP, Inc. 100 3,400
Sonat Inc. 100 4,925
South Jersey Industries Inc. 100 2,350
Southern Co. 500 11,063
</TABLE>
139
<PAGE> 146
SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Southwest Gas Corp. 100 $ 1,913
Southwestern Energy Co. 100 1,488
Tejas Gas Corp. 150 6,094
Texas Utilities Co. 200 8,100
Triarc Cos., Inc. Class A* 100 1,175
Tucson Electric Power Co.* 100 1,975
UGI Corp. (New) 200 4,725
Unicom Corp. 100 2,600
Union Electric Co. 100 3,863
United Illuminating Co. 100 3,325
United Water Resources Inc. 100 1,563
WPS Resources Corp. 100 2,975
Washington Energy Co. 100 1,925
Western Gas Resources Inc. 100 1,588
Wicor Inc. 100 3,563
Williams Cos. Inc. 100 5,225
---------
295,600
---------
6,322,373
---------
INTERNATIONAL--10.0%
AUSTRALIA--0.2%
Australia & New Zealand Banking Group 613 3,581
Broken Hill Proprietary Co., Ltd. 1,150 15,268
Commonwealth Bank Group 554 5,204
National Australia Bank 851 9,342
News Corp., Ltd. 798 4,542
Western Mining Corp. 650 4,086
Westpac Banking Corp. 1,069 6,101
---------
48,124
---------
BELGIUM--0.1%
Electrabel 32 7,428
Electrabel, VVPR Strip 6 6
Petrofina SA 11 3,382
Societe Generale de Belgique 24 1,793
Tractebel 4 2
Tractebel Investor International 8 3,809
---------
16,420
---------
CANADA--0.3%
Alcan Aluminum Ltd. 132 4,334
BCE Inc. 183 8,404
Bank of Montreal 156 4,720
Bank of Nova Scotia, Halifax 135 4,256
Barrick Gold Corp. 286 7,490
Canadian Imperial Bank of Commerce 127 5,278
Canadian Pacific Ltd 200 5,059
</TABLE>
140
<PAGE> 147
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Imperial Oil Ltd. (New) 113 $ 4,979
Northern Telecom Ltd. 149 9,706
Placer Dome Inc. 140 3,358
Royal Bank of Canada, Montreal Quebec 184 6,082
Seagram Co. Ltd. 176 6,632
Thomson Corp. 345 6,938
-------
77,236
-------
DENMARK--0.0%
Tele Danmark A/S Series B 52 2,621
-------
FRANCE--0.7%
AXA Groupe SA 108 6,709
Alcatel Alsthom CGE SA 89 7,590
Banque Nationale Paris 114 4,266
Carrefour 22 12,208
Compagnie Financiere de Paribas (Bearer) 70 4,505
Compagnie de Saint-Gobain SA 50 6,748
Danone Groupe 42 5,751
Eaux (CIE Generale) 70 8,366
Elf Aquitaine 159 12,714
L'Air Liquide 42 6,482
L'Oreal SA 39 13,205
LVMH Moet Hennessy Louis Vuitton 51 11,691
Lafarge Coppee SA 55 3,301
Lyonnaise des Eaux-Dumez 30 2,652
Michelin (CGDE) Class B (Reg.) 43 2,073
PSA Peugeot Citroen 29 3,023
Renault (Reg.) 143 3,049
Rhone-Poulenc SA A Shares 192 5,690
Sanofi 60 5,435
Schneider SA 76 3,716
Societe Generale 52 5,604
Suez Group 96 4,133
TOTAL Class B 140 10,951
Union des Assurances de Paris 180 3,739
-------
153,601
-------
GERMANY--0.8%
BASF AG 360 11,506
Bayer AG 410 15,491
Bayer Motoren Werk 12 7,021
Bayerische Hypotheken & Wechsel Bank AG 151 4,422
Bayerische Vereinsbank AG 154 5,791
Commerzbank AG 200 4,481
Daimler Benz AG 300 17,611
</TABLE>
141
<PAGE> 148
SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Deutsche Bank AG 278 $ 12,876
Dresdner Bank AG 260 6,953
Hoechst AG 340 12,786
Linde AG 5 3,095
Lufthansa AG 330 4,315
Mannesmann AG 21 8,154
Muenchener Rueckversicherung (Reg.) 5 11,952
RWE AG 120 4,940
RWE AG (Non Voting) 70 2,376
Sap AG 30 4,061
Siemens AG 330 17,051
Thyssen AG 18 3,221
Veba AG 285 15,200
Vereinigte Elektrizitatswerke Westfalen
Series B 12 3,994
Viag AG 12 4,437
Viag AG* 3 1,092
Volkswagen AG 14 5,512
-------
188,338
-------
HONG KONG--0.6%
CITIC Pacific 2,000 9,726
Cheung Kong Holdings 2,000 16,037
Hang Seng Bank Ltd. 2,000 23,732
Henderson China 4 9
Henderson Land Development Co. 1,000 8,891
Hong Kong Electric Holdings Ltd. 2,000 6,402
Hong Kong Telecommunications Ltd. 8,628 15,231
Hutchison Whampoa Ltd. 2,000 13,968
New World Development Co. 2,063 12,006
Sun Hung Kai Properties 1,000 11,381
Swire Pacific Ltd. Class A 1,000 8,827
Wharf Holdings 2,000 8,251
-------
134,461
-------
ITALY--0.2%
Assicurazioni Generali 515 9,947
Fiat SpA 1,924 5,143
Fiat SpA, di Risp (Non-Convertible) 830 1,204
INA 1,382 1,909
STET 2,246 7,758
STET di Risp (Non-Convertible) 627 1,670
Telecom Italia 3,888 8,663
Telecom Italia di Risp (Non-Convertible) 1,145 2,181
Telecom Italia Mob 3,367 6,958
Telecom Italia Mob di Risp 1,431 1,632
-------
47,065
-------
</TABLE>
142
<PAGE> 149
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
JAPAN--3.0%
Asahi Bank 1,000 $10,276
Bank of Tokyo-Mitsubishi, Ltd. 1,850 37,697
DDI Corp. 1 7,510
Dai-Ichi Kangyo Bank, Ltd. 1,000 16,249
East Japan Railway Co. 1 4,594
Fuji Bank, Ltd. 1,000 18,005
Fujitsu Ltd. 1,000 8,783
Hitachi Ltd. 1,000 8,871
Industrial Bank of Japan, Ltd. 1,080 21,533
Ishikawajima-Harima Heavy Industries 1,000 4,611
Ito-Yokado Co., Ltd. 1,000 49,888
Joyo Bank 1,000 6,605
Joyo Bank (Rights expire 11/20/96)* 100 309
Kansai Electric Power Co. 1,000 20,992
Kawasaki Heavy Industries 1,000 4,576
Kawasaki Steel Co. 1,000 3,083
Kobe Steel 1,000 2,371
Kokusai Denki 1,000 86,514
Long-Term Credit Bank of Japan 1,000 6,631
Matsushita Electric Industrial Co., Ltd. 1,000 15,985
Mitsubishi Chemical Corp. 1,000 4,084
Mitsubishi Electric Corp. 1,000 5,788
Mitsubishi Heavy Industries 1,000 7,685
NKK Corp. 1,000 2,512
Nippon Paper Industries Co. 1,000 5,639
Nippon Steel Corp. 2,000 5,832
Nippon Telegraph & Telephone Corp. 4 27,930
Nissan Motor Co., Ltd. 1,000 7,562
Nomura Securities Co., Ltd. 1,000 16,512
Obayashi Corp. 1,000 7,712
Osaka Gas Co. 1,000 3,092
Sakura Bank 1,000 9,486
Sanwa Bank 1,000 17,039
Seven-Eleven Japan Co. 1,100 63,959
Sumitomo Bank 1,000 17,566
Sumitomo Metal Industries 1,000 2,749
Taisei Corp. 1,000 6,148
Tokai Bank 1,000 11,594
Tokyo Electric Power Co., Inc. 1,000 22,924
Tokyo Gas Co. 1,000 3,118
Toshiba Corp. 1,000 6,254
Toyo Seikan Kaisha 1,000 31,619
Toyo Trust & Banking Co. 1,000 8,537
</TABLE>
143
<PAGE> 150
SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
Toyota Motor Corp. 1,000 $ 23,627
Yasuda Fire & Marine Insurance Co. 1,000 6,350
-------
660,401
-------
NETHERLANDS--0.6%
ABN-Amro Holdings NV 187 10,570
Aegon NV 154 7,833
Akzo Nobel NV 42 5,292
Elsevier NV 386 6,416
Heineken NV 29 5,478
ING Groep NV 433 13,500
Koninklijke PTT Nederland 282 10,205
Philips Electronics NV 201 7,084
PolyGram NV 105 4,932
Royal Dutch Petroleum Co. (Bearer) 314 51,855
Unilever NV, CVA 94 14,294
Wolters Kluwer NV, CVA 29 3,728
-------
141,187
-------
SINGAPORE--0.1%
Hong Kong Land Holdings 1,036 2,310
Singapore Airlines Ltd. (alien market) 1,000 8,804
Singapore Telecommunications 6,000 13,972
-------
25,086
-------
SPAIN--0.2%
Argentaria Corp. 50 1,959
Banco Bilbao-Vizcaya SA (Reg.) 133 6,463
Banco de Santander SA (Reg.) 68 3,491
Empresa Nacional de Electricidad 152 9,304
Iberdrola SA 542 5,756
Repsol, SA 176 5,745
Telefonica Internacional de Espana, SA 550 11,035
-------
43,753
-------
SWEDEN--0.2%
ASEA AB Series B 13 1,449
Asea 39 4,419
Astra AB Series A 294 13,502
Astra AB Series B 40 1,825
L.M. Ericsson Telephone Series B 560 15,159
Sandvik AB Series A 72 1,697
Sandvik AB Series B 82 1,933
Volvo AB Series A 65 1,344
Volvo AB Series B 167 3,467
-------
44,795
-------
</TABLE>
144
<PAGE> 151
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
SWITZERLAND--0.7%
CS Holding (Reg.) 108 $ 10,787
Ciba-Geigy Ltd. (Bearer) 1 1,226
Ciba-Geigy Ltd. (Reg.) 14 17,245
Nestle Ltd. (Reg.) 25 27,156
Roche Group Holding AG 4 30,253
Roche Group Holding AG (Bearer) 1 12,263
Sandoz Ltd. (Bearer) 2 2,316
Sandoz Ltd. (Reg.) 21 24,273
Schweizerische Bankgesellschaft (Bearer) 12 11,430
Schweizerische Bankgesellschaft (Reg.) 13 2,509
Schweizerischer Bankverein (Reg.) 45 8,669
Winterthur (Reg.) 4 2,383
Zurich Versicherung (Reg.) 27 7,391
-------
157,901
-------
UNITED KINGDOM--2.3%
Abbey National 769 7,985
Allied Domecq PLC 621 4,791
Associated British Foods 443 3,043
BAA 615 4,955
BAT Industries 1,806 12,522
BOC Group 195 2,701
BTR 2,223 9,317
Barclays 976 15,321
Bass 517 6,631
Boots Co. 556 5,638
British Airways 577 5,193
British Gas 2,541 7,899
British Petroleum Co. 3,294 35,398
British Sky Broadcast 1,030 9,673
British Steel 806 2,240
British Telecom 3,652 22,439
Cable & Wireless 1,315 10,445
Cadbury Schweppes 589 4,908
Commercial Union Assurance Co. 403 4,264
General Electric Co. 1,608 9,945
Glaxo Wellcome 2,029 31,868
Granada Group 345 4,969
Grand Metropolitan, Inc. 1,266 9,551
Great University Stores 589 5,886
Guinness 1,184 8,479
HSBC Holdings 518 10,884
HSBC Holdings (Hong Kong) 1,073 21,987
Hanson Industries 2,167 2,839
Imperial Chemical Industries 424 5,445
Imperial Tobacco* 216 1,266
</TABLE>
145
<PAGE> 152
SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
J. Sainsbury PLC 1,084 $ 6,422
Kingfisher 398 4,243
Lloyds TSB Group 2,430 15,405
Marks & Spencer PLC 1,640 13,773
National Power Development 695 4,581
National Westminster Bancorp 1,046 11,943
Pearson, Inc. 309 3,812
Powergen 437 3,627
Prudential Corp. 1,141 8,636
RTZ Corp. PLC 628 10,048
Rank Group 486 3,231
Reed International 329 6,126
Reuters Holdings PLC 977 12,165
Royal Bank of Scotland 478 3,913
Safeway PLC 685 4,064
Scot & Newcastle 358 3,720
Shell Transport & Trading Co. 1,941 31,813
SmithKline Beecham PLC (New) 1,610 19,889
Standard Chartered PLC 576 6,216
Tesco 1,237 6,704
Thorn EMI 261 5,127
Unilever 475 9,981
Vodafone Group 1,238 4,786
Zeneca Group 554 15,094
---------
503,801
---------
2,244,790
---------
TOTAL COMMON STOCK
(Cost $7,622,564) 8,567,163
---------
PREFERRED STOCK--0.0%
AUSTRALIA--0.0%
News Corp. (Limited Voting Shares) 390 1,716
---------
GERMANY--0.0%
Sap AG (Non-Voting) 24 3,230
Volkswagen AG (Non-Voting) 6 1,821
---------
5,051
---------
</TABLE>
146
<PAGE> 153
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<S> <C> <C>
ITALY--0.0%
Fiat SpA 701 $ 994
-----
UNITED STATES--0.0%
Aetna Inc. 6.25% Class C (Voting) 7 491
Fresenius National Medical Care Inc. Class D
(Special Dividend)* 100 13
-----
7,761
-----
504
-----
TOTAL PREFERRED STOCK
(Cost $8,500) 8,265
-----
WARRANTS--0.0%
SWITZERLAND--0.0%
Schweizerische Bankverein (expire 6/30/00)* 5 13
-----
UNITED STATES--0.0%
Jacor Communications Inc. (expire 09/18/01)* 100 209
-----
TOTAL WARRANTS
(Cost $2,229) 222
-----
</TABLE>
147
<PAGE> 154
SCHWAB ASSET DIRECTOR--CONSERVATIVE GROWTH FUND(R)
- ------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
October 31, 1996
<TABLE>
<CAPTION>
Par Value
---------- -----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--54.6%(a)
U.S. Treasury Bonds
10.00%, 05/15/10 $ 300,000 $ 369,519
7.25%, 05/15/16 1,670,000 1,769,181
8.13%, 08/15/19 1,700,000 1,969,722
7.13%, 02/15/23 800,000 837,576
U.S. Treasury Notes
5.88%, 08/15/98 1,300,000 1,303,458
6.13%, 08/31/98 1,300,000 1,309,139
5.00%, 02/15/99 600,000 589,920
7.00%, 04/15/99 300,000 308,049
7.50%, 10/31/99 600,000 625,374
7.13%, 02/29/00 200,000 206,976
5.75%, 10/31/00 1,050,000 1,040,046
6.38%, 08/15/02 525,000 531,379
5.88%, 02/15/04 500,000 489,100
6.50%, 05/15/05 400,000 404,416
6.50%, 08/15/05 500,000 505,600
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $12,147,593) 12,259,455
----------
AGENCY OBLIGATIONS--COUPON NOTES--1.8%(a)
Federal National Mortgage Assoc.
7.25%, 06/01/05 400,000 403,712
----------
TOTAL AGENCY OBLIGATIONS--COUPON NOTES
(Cost $403,739) 403,712
----------
CASH EQUIVALENTS -- 7.3%
Federal Home Loan Bank Consolidated Discount Notes(b)
5.30%, 01/30/97 600,000 592,272
Federal Home Loan Mortgage Corp. Discount Notes(b)
5.30%, 11/01/96 605,000 605,000
<CAPTION>
Shares
----------
<S> <C> <C>
Seven Seas Money Market Fund(c)
5.04%, 11/07/96 437,614 437,614
----------
TOTAL CASH EQUIVALENTS
(Cost $1,634,799) 1,634,886
----------
TOTAL INVESTMENTS--101.8%
(Cost $21,819,424) 22,873,703
----------
</TABLE>
148
<PAGE> 155
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
-----------
<S> <C> <C>
OTHER ASSETS AND LIABILITIES--(1.8%)
Other Assets $ 310,266
Liabilities (725,344)
----------
(415,078)
----------
NET ASSETS--100.0% (Note 7)
Applicable to 2,136,503 outstanding shares,
$0.00001 par value (unlimited shares authorized) $22,458,625
===========
NET ASSET VALUE PER SHARE $10.51
======
</TABLE>
- ---------------
NOTES TO STATEMENTS OF NET ASSETS
(a) Interest rates represent stated coupon rate of security.
(b) Interest rates represent effective yield at time of purchase.
(c) Interest rates represent the yield on October 31, 1996.
*Non-Income Producing Security
See accompanying Notes to Financial Statements.
149
<PAGE> 156
- ------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
Period from November 20, 1995 (commencement of operations) to
October 31, 1996
<TABLE>
<CAPTION>
--------Schwab Asset Director(R)--------
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
----------- ----------- ------------
<S> <C> <C> <C>
Investment income:
Dividends (net of foreign tax
withheld of $61,271, $34,666 and
$7,507, respectively) $1,315,014 $ 711,698 $ 154,124
Interest 1,199,705 1,595,716 710,068
---------- ---------- ---------
Total investment income 2,514,719 2,307,414 864,192
---------- ---------- ---------
Expenses:
Investment advisory and
administration fee 633,316 461,072 144,523
Transfer agency and shareholder
service fees 215,222 157,039 49,377
Custodian fees 221,569 193,803 119,929
Registration fees 91,046 77,059 38,676
Professional fees 35,136 31,566 25,559
Shareholder reports 75,596 47,105 16,047
Trustees' fees 9,403 7,646 4,768
Amortization of deferred
organization costs 3,470 3,470 3,470
Insurance and other expenses 4,060 3,021 2,044
---------- ---------- ---------
1,288,818 981,781 404,393
Less expenses reduced and absorbed
(Note 4) (525,320) (425,212) (229,691)
---------- ---------- ---------
Total expenses incurred by Fund 763,498 556,569 174,702
---------- ---------- ---------
Net investment income 1,751,221 1,750,845 689,490
---------- ---------- ---------
Net realized loss on investments and
foreign currency transactions:
Net realized loss from changes in
market value (548,396) (540,402) (140,784)
Net realized loss from changes in
foreign exchange rates (10,052) (19,754) (6,703)
---------- ---------- ---------
Net realized loss on investments
sold (558,448) (560,156) (147,487)
Net realized loss on foreign
currency transactions (758) (160) (66)
---------- ---------- ---------
Net realized loss on investments
sold and foreign currency
transactions (559,206) (560,316) (147,553)
</TABLE>
(Continued on next page)
150
<PAGE> 157
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------Schwab Asset Director(R)--------
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
----------- ----------- ------------
<S> <C> <C> <C>
Net unrealized gain (loss) on
investments and foreign currency
translations:
Net unrealized gain from changes
in market value $10,424,004 $5,862,801 $1,141,978
Net unrealized loss from changes
in foreign exchange rates (658,362) (376,651) (87,699)
----------- ----------- ----------
Net unrealized gain on investments 9,765,642 5,486,150 1,054,279
Net unrealized gain on translating
assets and liabilities into the
reporting currency 1,898 1,249 499
----------- ---------- ----------
Net unrealized gain on investments
and foreign currency translation 9,767,540 5,487,399 1,054,778
----------- ---------- ----------
Net gain on investments 9,208,334 4,927,083 907,225
----------- ---------- ----------
Increase in net assets resulting
from operations $10,959,555 $6,677,928 $1,596,715
=========== ========== ==========
</TABLE>
See accompanying Notes to Financial Statements.
151
<PAGE> 158
- ------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Period from November 20, 1995 (commencement of operations) to
October 31, 1996
<TABLE>
<CAPTION>
----------Schwab Asset Director(R)---------
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
------------ ----------- ------------
<S> <C> <C> <C>
Operations:
Net investment income $ 1,751,221 $ 1,750,845 $ 689,490
Net realized loss on investments
sold and foreign currency
transactions (559,206) (560,316) (147,553)
Net unrealized gain on investments
and foreign currency translation 9,767,540 5,487,399 1,054,778
------------ ----------- -----------
Increase in net assets resulting
from operations 10,959,555 6,677,928 1,596,715
------------ ----------- -----------
Dividends to shareholders from net
investment income (158,402) (150,875) (616,233)
------------ ----------- -----------
Capital share transactions:
Proceeds from shares sold 117,537,418 89,829,083 29,366,693
Net asset value of shares issued
in reinvestment of dividends 152,276 138,204 551,598
Less payments for shares redeemed (22,537,909) (15,514,876) (8,441,148)
------------ ----------- -----------
Increase in net assets from
capital share transactions 95,151,785 74,452,411 21,477,143
------------ ----------- -----------
Total increase in net assets 105,952,938 80,979,464 22,457,625
Net assets:
Beginning of period 1,000 1,000 1,000
------------ ----------- -----------
End of period (including
undistributed net investment
income of $1,592,819, $1,599,970
and $73,257, respectively) $105,953,938 $80,980,464 $22,458,625
============ =========== ===========
Number of Fund shares:
Sold 11,466,890 8,788,481 2,908,857
Reinvested 14,842 13,523 53,963
Redeemed (2,106,758) (1,470,535) (826,417)
------------ ----------- -----------
Net increase in shares outstanding 9,374,974 7,331,469 2,136,403
Shares outstanding:
Beginning of period 100 100 100
------------ ----------- -----------
End of period 9,375,074 7,331,569 2,136,503
============ =========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
152
<PAGE> 159
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Period from November 20, 1995 (commencement of operations) to
October 31, 1996
1. DESCRIPTION OF THE FUNDS
The Schwab Asset Director(R) - 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 investment management 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(R), Schwab Small-Cap Index Fund(R), Schwab S&P
500 Fund, Schwab Analytics Fund(TM), Schwab OneSource
Portfolios - International, Schwab OneSource Portfolios - Growth Allocation and
Schwab OneSource Portfolios - Balanced Allocation. The assets of each series are
segregated and accounted for separately.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in conformity with generally
accepted accounting principles 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 and
investments in money market funds 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 by the Funds' investment manager pursuant
to guidelines adopted in good faith by the Board of Trustees. 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
153
<PAGE> 160
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Period from November 20, 1995 (commencement of operations) to
October 31, 1996
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.
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 October 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.
154
<PAGE> 161
- ------------------------------------------------------------------------------
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. The Funds could be exposed to
risk if counterparties to the contracts are unable to meet the terms of the
contracts or if the value of the foreign currency changes unfavorably.
Deferred organization costs -- Costs incurred in connection with the
organization of the Funds and their initial registration with the Securities and
Exchange Commission 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 generally 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 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 October 31, 1996, (for financial reporting and federal income tax purposes),
net unrealized gain for the High Growth Fund, Balanced Growth Fund and
Conservative Growth Fund aggregated $9,765,642, $5,486,150 and $1,054,279,
respectively, of which $12,947,581, $7,384,650 and $1,494,797, respectively,
related to appreciated securities and $3,181,939, $1,898,500 and $440,518,
respectively, 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,
each Fund pays an annual fee, payable
155
<PAGE> 162
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Period from November 20, 1995 (commencement of operations) to
October 31, 1996
monthly, of 0.74% of each Fund's average daily net assets not in excess of $1
billion, 0.69% of such assets over $1 billion and 0.64% 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
$633,316, $461,072 and $144,523, respectively, for the period ended October 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 0.08% of
the Funds' aggregate average net assets on the first $100 million, 0.06% of the
next $150 million, 0.04% of the next $600 million and 0.02% of such 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 0.05% of each Fund's average daily net assets
for transfer agency services and 0.20% of such assets for shareholder services.
For the period ended October 31, 1996, the High Growth Fund, Balanced Growth
Fund and Conservative Growth Fund incurred transfer agency and shareholder
service fees of $215,222, $157,039 and $49,377, 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 October 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 Funds incurred fees aggregating $21,817
related to the Trust's unaffiliated trustees.
156
<PAGE> 163
- ------------------------------------------------------------------------------
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 October 31, 1996, the total of such
fees and expenses reduced and absorbed by the Investment Manager were $321,597,
$271,535 and $180,314 for the High Growth Fund, Balanced Growth Fund and
Conservative Growth Fund, respectively, and the total of such fees reduced by
Schwab was $203,723, $153,677 and $49,377 for the High Growth Fund, Balanced
Growth Fund and Conservative Growth Fund, respectively (See Note 8).
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 October 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 October 31, 1996, were as follows (in
thousands):
<TABLE>
<CAPTION>
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
------------ ----------- -----------
<S> <C> <C> <C>
Purchases $130,861,596 $99,791,667 $33,172,236
Proceeds of sales and
maturities $ 40,474,842 $28,878,116 $12,799,753
</TABLE>
157
<PAGE> 164
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Period from November 20, 1995 (commencement of operations) to
October 31, 1996
7. COMPOSITION OF NET ASSETS
At October 31, 1996, net assets for each Fund consisted of:
<TABLE>
<CAPTION>
High Balanced Conservative
Growth Fund Growth Fund Growth Fund
------------ ----------- -----------
<S> <C> <C> <C>
Paid in capital $95,152,785 $74,453,411 $21,478,143
Accumulated undistributed net
investment income 1,592,819 1,599,970 73,257
Accumulated net realized loss on
investments sold and
foreign currency transactions (559,206) (560,316) (147,553)
Net unrealized gain on investments 9,765,642 5,486,150 1,054,279
Net unrealized loss on translating
assets and liabilities into the
reporting currency 1,898 1,249 499
------------ ----------- -----------
$105,953,938 $80,980,464 $22,458,625
============ =========== ===========
</TABLE>
At October 31, 1996, the High Growth Fund's Statement of Net Assets included:
$4,897,479 payable for investments purchased, $70,257 payable for Fund shares
redeemed, $19,729 payable for investment advisory and administration fee, $2,776
payable for transfer agency fees and $67,640 receivable for Fund shares sold.
The Balanced Growth Fund's Statement of Net Assets included: $3,898,551 payable
for investments purchased, $275,334 payable for Fund shares redeemed, $10,697
payable for investment advisory and administration fee, $3,362 payable for
transfer agency fees and $129,240 receivable for Fund shares sold. The
Conservative Growth Fund's Statement of Net Assets included: $593,038 payable
for investment purchased, $23,354 payable for Fund shares redeemed, $2,650
receivable from advisor and $9,476 receivable for Fund shares sold.
158
<PAGE> 165
- ------------------------------------------------------------------------------
8. FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period from November 20, 1995
(commencement of operations) to October 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 0.19 0.25 0.33
Net realized and unrealized gain on
investments and foreign
currency transactions 1.13 0.83 0.48
----------- ---------- ----------
Total from investment operations 1.32 1.08 0.81
Less distributions
- ------------------
Dividends from net investment income (0.02) (0.03) (0.30)
Distributions from realized gain
on investments -- -- --
----------- ---------- ----------
Total distributions (0.02) (0.03) (0.30)
----------- ---------- ----------
Net asset value at end of period $ 11.30 $ 11.05 $ 10.51
=========== ========== ==========
Total return (not annualized) 13.24% 10.82% 8.18%
- ------------
Ratios/Supplemental data
- ------------------------
Net assets, end of period $105,953,938 $80,980,464 $22,458,625
Ratio of expenses to average net
assets+ 0.89%* 0.89%* 0.89%*
Ratio of net investment income to
average net assets+ 2.03%* 2.79%* 3.49%*
Portfolio turnover rate 46% 44% 64%
Average commission rate $ 0.03 $ 0.02 $ 0.02
</TABLE>
- ---------------
+ The information contained in the above table is based on actual expenses for
the period, after giving effect to the portion of fees reduced and expenses
absorbed by the Investment Manager and Schwab. Had these fees and expenses not
been reduced and absorbed, the Funds' expense and net investment income ratios
would have been:
<TABLE>
<S> <C> <C> <C>
Ratio of expenses to average net
assets 1.50%* 1.56%* 2.05%*
Ratio of net investment income to
average net assets 1.42%* 2.12%* 2.33%*
</TABLE>
* Annualized
159
<PAGE> 166
- ------------------------------------------------------------------------------
To the Trustees and Shareholders of
the Schwab Asset Director(R) - High Growth Fund,
Schwab Asset Director - Balanced Growth Fund and
Schwab Asset Director - Conservative Growth Fund
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Schwab Asset Director - High Growth Fund, Schwab Asset Director - Balanced
Growth Fund and Schwab Asset Director - Conservative Growth Fund (three of the
series constituting Schwab Capital Trust, hereafter referred to as the "Trust")
at October 31, 1996, and the results of each of their operations, the changes in
each of their net assets and the financial highlights for the period November
20, 1995 (commencement of operations) through October 31, 1996, in conformity
with generally accepted accounting principles. These financial statements and
the financial highlights (hereafter referred to as "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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1996 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
San Francisco, California
November 27, 1996
160
<PAGE> 167
SCHWABFUNDS FAMILY(R)
The SchwabFunds Family includes a variety of funds to help meet your investment
needs. You can diversify your portfolio in a single step with our asset
allocation funds. Or you can customize your portfolio with a combination of our
stock funds as well as our taxable and tax-advantaged bond and money funds.
SCHWAB ASSET ALLOCATION FUNDS
Schwab Asset Director(R) -- High Growth Fund
Schwab Asset Director -- Balanced Growth Fund
Schwab Asset Director -- Conservative Growth Fund
Schwab OneSource Portfolios -- Growth Allocation
Schwab OneSource Portfolios -- Balanced Allocation
SCHWAB STOCK FUNDS
Schwab 1000 Fund(R)
Schwab S&P 500 Fund
Schwab Analytics Fund(TM)
Schwab Small-Cap Index Fund(R)
Schwab International Index Fund(R)
Schwab OneSource Portfolios -- International
SCHWAB BOND FUNDS
Schwab Government Bond Funds -- Long-Term
and Short/Intermediate
Schwab Tax-Free Bond Funds -- Long-Term and Short/Intermediate
Schwab California Tax-Free Bond Funds -- Long-Term
and Short/Intermediate
SCHWAB MONEY MARKET FUNDS
Schwab offers an array of money market funds* that seek high current income with
safety and liquidity. Choose from taxable or tax-advantaged alternatives. Many
can be linked to your Schwab account to "sweep" cash balances automatically when
you're between investments. Or, for your larger cash reserves, choose one of our
Value Advantage Investments(TM).
Please call 1-800-2 NO-LOAD for a free prospectus and brochure for any of the
SchwabFunds(R).
Each prospectus provides more complete information, including charges and
expenses. Please read it carefully before investing.
This report must be preceded or accompanied by a current prospectus.
* Investments in money market funds are neither insured nor guaranteed by the
U.S. government, and there is no assurance that the funds will be able to
maintain a stable share price of $1.
<PAGE> 168
==============
SCHWAB FUNDS BULK RATE
FAMILY(R) [LOGO] U.S. POSTAGE
101 Montgomery Street PAID
San Francisco, California 94104 CHARLES SCHWAB
==============
INVESTMENT ADVISOR
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
DISTRIBUTOR
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
(C)1996 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
TF4442R(12/96) CRS 12012 Printed on recycled paper.
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