<PAGE> 1
Supplement
to the Prospectus, dated October 28, 1998
for
Institutional Select(TM) S&P 500 Fund
Institutional Select(TM) Large-Cap Value Index Fund
Institutional Select(TM) Small-Cap Value Index Fund
Charles Schwab Investment Management, Inc. (the Investment Advisor) and Charles
Schwab & Co. Inc. (Schwab) have voluntarily guaranteed that, through at least
December 31, 2005, total operating expenses (excluding interest, taxes,
brokerage commissions and extraordinary expenses) of the S&P 500 Fund, Large-Cap
Value Fund and Small-Cap Value Fund, will not exceed 0.15%, 0.25% and 0.32%,
respectively of each Fund's average daily net assets, as stated in the last
paragraph on page 3 of the prospectus, under "Annual Operating Expenses."
In addition to guaranteeing that total operating expenses would not exceed the
limits stated above, the Investment Advisor and Schwab guarantee, at least
through February 26, 1999, that total operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) of the Institutional
Select S&P 500 Fund, Institutional Select Large-Cap Value Fund and the
Institutional Select Small-Cap Value Fund will not exceed 0.00% with respect to
each Fund.
The first paragraph stated on page 12 of this prospectus, under "Initial Minimum
Investments" has been modified to state that:
Each Fund in its sole discretion has agreed to waive the initial minimum
investment for Investment Managers through February 26, 1999. Thereafter, the
initial minimum investment for the S&P 500, Large-Cap Value Fund and Small-Cap
Value Fund will be $250,000, $100,000 and $100,000, respectively.
TF6232(2/17/99)
