<PAGE> 1
SCHWAB
MarketManager
Portfolios(TM)
PROSPECTUS
February 29, 2000
As amended
July 1, 2000
GROWTH PORTFOLIO
BALANCED PORTFOLIO
SMALL CAP PORTFOLIO
INTERNATIONAL PORTFOLIO
As with all mutual funds, the Securities and Exchange Commission SEC) has not
approved these securities or passed on whether the information in this
prospectus is adequate and accurate. Anyone who indicates otherwise is
committing a federal crime.
[Charles Schwab Logo]
<PAGE> 2
SCHWAB
MARKETMANAGER
PORTFOLIOS(TM)
ABOUT THE PORTFOLIOS
4 Growth Portfolio
8 Balanced Portfolio
12 Small Cap Portfolio
16 International Portfolio
20 Portfolio Management
INVESTING IN THE PORTFOLIOS
22 Buying Shares
23 Selling/Exchanging Shares
24 Transaction Policies
25 Distributions and Taxes
<PAGE> 3
ABOUT THE PORTFOLIOS
The portfolios in this prospectus share a "MULTI-FUND" investment strategy. Each
portfolio invests primarily in a COMBINATION of other actively managed funds.
Each portfolio's mix of underlying funds is strategically chosen with a SPECIFIC
GOAL in mind.
By using a multi-fund strategy, the portfolios can provide exposure to a VARIETY
OF MUTUAL FUNDS in a single investment. This strategy may help to produce a high
level of DIVERSIFICATION among securities and industries. As a result, the
portfolios may reduce the risks associated with INVESTING in a single fund, fund
company or investment style.
The portfolio managers ANALYZE ECONOMIC CONDITIONS to identify promising areas
for investment. They review funds according to their investment objectives and
policies, and use quantitative techniques to measure their past performance,
volatility and expenses. The managers then choose each underlying fund by
ANALYZING its investment style and gaining FIRSTHAND KNOWLEDGE of its manager.
The portfolios are designed for LONG-TERM INVESTORS. Their performance will
fluctuate over time and, as with all investments, future performance may differ
from past performance.
<PAGE> 4
SCHWAB
MARKETMANAGER
GROWTH PORTFOLIO
TICKER SYMBOL
SWOGX
THE PORTFOLIO SEEKS CAPITAL GROWTH.
STRATEGY
TO PURSUE ITS GOAL, THE PORTFOLIO INVESTS AT LEAST 65% OF ITS TOTAL ASSETS IN
OTHER MUTUAL FUNDS, including those available through Schwab's Mutual Fund
OneSource(R) service. Typically, the actual percentage is considerably higher.
The portfolio invests in stock, bond and money market funds, which the managers
choose within the framework of an asset allocation strategy. Based on analysis
of economic outlooks and market conditions, the managers determine whether and
how much to adjust the portfolio's allocation.
Within the stock fund allocation, the portfolio managers may allocate their
investment among large-cap, small-cap and international stock funds. Within the
bond fund allocation, the managers allocate investments among bond funds
primarily based on the maturities and credit quality of their holdings.
In choosing the underlying funds, the portfolio managers seek clearly defined
investment strategies, strong performance histories and stable management, among
other criteria. As of 10/31/99, the portfolio included 40 underlying funds.
ASSET ALLOCATION AMONG FUNDS
Asset allocation is a strategy of investing specific percentages of a portfolio
in various asset classes.
The Growth Portfolio's allocation is designed to provide the growth
opportunities of stock investing while tempering volatility with bond and money
market funds. Over the long term, the portfolio will generally reflect its
target allocation, as shown below.
The table also shows the highest and lowest allocations the portfolio could
assign for each type of fund. The portfolio has the flexibility to adjust its
allocations of large-cap, small-cap and international stock funds as well.
<TABLE>
<CAPTION>
TARGET ALLOCATION
ALLOCATION FLEXIBILITY
---------- -----------
<S> <C> <C>
STOCK FUNDS 80% 65 - 95%
large-cap 35%
small-cap 20%
international 25%
BOND FUNDS 15% 0 - 30%
MONEY MARKET FUNDS 5% 0 - 35%
</TABLE>
4
Growth Portfolio
<PAGE> 5
When you are investing for the long term, a portfolio that emphasizes stock
investments in its asset allocation may make sense for you.
MAIN RISKS
THE STOCK AND BOND MARKETS RISE AND FALL DAILY. As with any investment whose
performance is tied to these markets, the value of your investment in the
portfolio will fluctuate, which means that you could lose money.
THE PORTFOLIO'S PARTICULAR ASSET ALLOCATION CAN HAVE AN EFFECT ON PERFORMANCE.
The portfolio's neutral allocation is designed with long-term performance in
mind, and does not ensure any particular type of performance over the short
term. Because the risks and returns of different asset classes can vary widely
over both the long term and the short term, the portfolio's performance could
suffer if a particular asset class does not perform as expected.
MANY OF THE RISKS OF THIS PORTFOLIO ARE THOSE ASSOCIATED WITH STOCK FUNDS. The
same factors that affect stock market performance generally affect stock funds.
Political and economic news can influence marketwide trends; the outcome may be
positive or negative, short term or long term. Any type of stock can temporarily
fall out of favor with the market. The values of certain types of stocks, such
as small-cap stocks and international stocks, may fluctuate more widely than
others.
TO THE EXTENT THAT THE PORTFOLIO INVESTS IN BOND FUNDS, A MAJOR RISK IS THAT
BOND PRICES GENERALLY FALL WHEN INTEREST RATES RISE. Underlying funds that focus
on bonds with longer maturities tend to be more sensitive to this risk.
Portfolio performance also could be affected if bonds held by the underlying
funds go into default. To minimize this risk, the portfolio intends to invest in
bond funds that invest primarily in investment-grade quality debt securities.
Another risk is that certain bonds may be paid off, or "called," substantially
earlier or later than expected.
OTHER RISK FACTORS
Because the portfolio managers have no control over the management of the
underlying funds, decisions made by the underlying funds' managers could change
the portfolio's effective asset allocation or hurt its performance.
For example, if managers of underlying funds tended to favor cash, the
portfolio's exposure to the stock market would be lowered. Similarly, if
underlying funds make investments that don't perform as expected, the
portfolio's performance could be affected.
Additionally, the portfolio may actively buy and sell underlying fund shares,
which will increase its portfolio turnover rate, and increase the likelihood of
capital gain distributions.
5
Growth Portfolio
<PAGE> 6
PERFORMANCE
Below are a chart and a table showing the portfolio's performance, as well as
data on two unmanaged market indices. These figures assume that all
distributions were reinvested. Keep in mind that future performance may differ
from past performance, and that indices do not include any costs of investment.
ANNUAL TOTAL RETURNS (%) AS OF 12/31
[Bar Chart]
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C>
18.36 15.15 35.65
</TABLE>
BEST QUARTER: 25.72% Q4 1999
WORST QUARTER: -11.73% Q3 1998
AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 12/31/99
<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
------ ---------
<S> <C> <C>
Portfolio 35.65 22.07(1)
S&P 500(R) Index 21.04 26.65(2)
Lehman Brothers
Aggregate Bond Index -0.82 5.43(2)
</TABLE>
(1) Inception: 11/18/96.
(2) From 11/18/96.
PORTFOLIO FEES AND EXPENSES
The following table describes what you could expect to pay as a portfolio
investor. "Shareholder fees" are one-time expenses charged to you directly by
the portfolio. "Annual operating expenses" are paid out of portfolio assets, so
their effect is included in total return. Fees of the underlying funds are
reflected in those funds' performance, and thus indirectly in portfolio
performance.
FEE TABLE (%)
SHAREHOLDER FEES
-----------------------------------------------------------
<TABLE>
<CAPTION>
None
ANNUAL OPERATING EXPENSES (% of average net assets)
-----------------------------------------------------------
<S> <C>
Management fees 0.54
Distribution (12b-1) fees None
Other expenses 0.39
-----
Total annual operating expenses 0.93
EXPENSE REDUCTION (0.43)
-----
NET OPERATING EXPENSES* 0.50
-----
</TABLE>
* Guaranteed by Schwab and the investment adviser through 2/28/01
(excluding interest, taxes and certain non-routine expenses).
EXPENSES ON A $10,000 INVESTMENT
Designed to help you compare expenses, this example uses the same assumptions as
all mutual fund prospectuses: a $10,000 investment and 5% return each year.
One-year figures are based on net operating expenses. The expenses would be the
same whether you stayed in the portfolio or sold your shares at the end of each
period. Your actual costs may be higher or lower.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C>
$51 $253 $473 $1,104
</TABLE>
The PERFORMANCE information above shows you how performance has
varied from YEAR TO YEAR and how it averages out OVER TIME.
6
Growth Portfolio
<PAGE> 7
FINANCIAL HIGHLIGHTS
This section provides further details about the portfolio's financial history.
"Total return" shows the percentage that an investor in the portfolio would have
earned or lost during a given period, assuming all distributions were
reinvested. The portfolio's independent accountants, PricewaterhouseCoopers LLP,
audited these figures. Their full report is included in the portfolio's annual
report (see back cover).
<TABLE>
<CAPTION>
11/1/98- 11/1/97- 11/18/96-
10/31/99 10/31/98 10/31/97
PER-SHARE DATA ($)
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period 11.43 11.60 10.00
-----------------------------
Income from investment operations:
Net investment income 0.16 0.32 0.08
Net realized and unrealized gain on investments 2.91 0.11 1.66
-----------------------------
Total income from investment operations 3.07 0.43 1.74
Less distributions:
Dividends from net investment income (0.16) (0.29) (0.14)
Dividends in excess of net investment income (0.05) -- --
Distributions from capital gains (0.23) (0.31) --
-----------------------------
Total distributions (0.44) (0.60) (0.14)
-----------------------------
NET ASSET VALUE AT END OF PERIOD 14.06 11.43 11.60
=============================
Total return (%) 27.38 3.87 17.60(1)
RATIOS/SUPPLEMENTAL DATA (%)
---------------------------------------------------------------------------------------
Ratio of actual operating expenses to
average net assets 0.50 0.50 0.50(2)
Expense reductions reflected in above ratio 0.43 0.67 0.77(2)
Ratio of net investment income to average net assets 1.23 2.66 2.07(2)
Portfolio turnover rate 284 384 192
Net assets, end of period ($ x 1,000,000) 181 152 124
</TABLE>
(1) Not annualized.
(2) Annualized.
7
Growth Portfolio
<PAGE> 8
SCHWAB
MARKETMANAGER
BALANCED PORTFOLIO
TICKER SYMBOL
SWOBX
THE PORTFOLIO SEEKS CAPITAL GROWTH AND INCOME.
STRATEGY
TO PURSUE ITS GOAL, THE PORTFOLIO INVESTS AT LEAST 65% OF ITS TOTAL ASSETS IN
OTHER MUTUAL FUNDS, including those available through Schwab's Mutual Fund
OneSource(R) service. Typically, the actual percentage is considerably higher.
The portfolio invests in stock, bond and money market funds, which the managers
choose within the framework of an asset allocation strategy. Based on analysis
of economic outlooks and market conditions, the managers determine whether and
how much to adjust the portfolio's allocation.
Within the stock fund allocation, the portfolio managers may allocate their
investment among large-cap, small-cap and international stock funds. Within the
bond fund allocation, the managers allocate investments among bond funds
primarily based on the maturities and credit quality of their holdings.
In choosing the underlying funds, the portfolio managers seek clearly defined
investment strategies, strong performance histories and stable management, among
other criteria. As of 10/31/99, the portfolio included 37 underlying funds.
ASSET ALLOCATION AMONG FUNDS
Asset allocation is a strategy of investing specific percentages of a portfolio
in various asset classes.
The Balanced Portfolio's allocation is designed to provide a mix of the growth
opportunities of stock investing with the income opportunities of bond and money
market funds. Over the long term, the portfolio will generally reflect its
target allocation, as shown below.
The table also shows the highest and lowest allocations the portfolio could
assign for each type of fund. The portfolio has the flexibility to adjust its
allocations of large-cap, small-cap and international stock funds as well.
<TABLE>
<CAPTION>
TARGET ALLOCATION
ALLOCATION FLEXIBILITY
---------- -----------
<S> <C> <C>
STOCK FUNDS 60% 50 - 70%
large-cap 30%
small-cap 15%
international 15%
BOND FUNDS 35% 25 - 45%
MONEY MARKET FUNDS 5% 0 - 25%
</TABLE>
8
Balanced Portfolio
<PAGE> 9
Long-term investors seeking a blend of growth and income investments may
want to consider this portfolio.
MAIN RISKS
STOCK AND BOND MARKETS RISE AND FALL DAILY. As with any investment whose
performance is tied to these markets, the value of your investment in the
portfolio will fluctuate, which means that you could lose money.
THE PORTFOLIO'S PARTICULAR ASSET ALLOCATION CAN HAVE A SIGNIFICANT EFFECT ON
PERFORMANCE. The portfolio's neutral allocation is designed with long-term
performance in mind, and does not ensure any particular type of performance over
the short term. Because the risks and returns of different asset classes can
vary widely over both the long term and the short term, the portfolio's
performance could suffer if a particular asset class does not perform as
expected.
TO THE EXTENT THAT THE PORTFOLIO HAS EXPOSURE TO A GIVEN TYPE OF MUTUAL FUND, IT
TAKES ON THE ASSOCIATED RISKS. The same factors that affect stock market
performance generally affect stock funds. Political and economic news can
influence marketwide trends; the outcome may be positive or negative, short term
or long term. The values of certain types of stocks, such as small-cap stocks or
international stocks, may fluctuate more widely in price than others.
WITH BOND FUNDS, ONE MAJOR RISK IS THAT BOND PRICES GENERALLY FALL WHEN INTEREST
RATES RISE. Underlying funds that focus on bonds with longer maturities tend to
be more sensitive to this risk. Portfolio performance also could be affected if
bonds held by its underlying funds go into default. Economic conditions can
cause bond markets to fall in anticipation of greater risk of default, in which
case funds that emphasize lower-quality bonds could suffer disproportionate
losses. To minimize this risk, the portfolio intends to invest primarily in bond
funds that invest primarily in investment-grade quality debt securities. Another
risk is that certain bonds may be paid off, or "called," substantially earlier
or later than expected.
OTHER RISK FACTORS
Because the portfolio managers have no control over the management of the
underlying funds, decisions made by the underlying funds' managers could change
the portfolio's effective asset allocation or hurt its performance.
For example, if managers of underlying funds tended to favor cash, the
portfolio's exposure to the stock market would be lowered. Similarly, if
underlying funds make investments that don't perform as expected, the
portfolio's performance could be affected.
Additionally, the portfolio may actively buy and sell underlying fund shares,
which will increase its portfolio turnover rate, and increase the likelihood of
capital gain distributions.
9
Balanced Portfolio
<PAGE> 10
PERFORMANCE
Below are a chart and a table showing the portfolio's performance, as well as
data on two unmanaged market indices. These figures assume that all
distributions were reinvested. Keep in mind that future performance may differ
from past performance, and that indices do not include any costs of investment.
[Bar Chart]
ANNUAL TOTAL RETURNS (%) AS OF 12/31
<TABLE>
<S> <C>
97 16.51
98 13.59
99 25.77
</TABLE>
BEST QUARTER: 18.58% Q4 1999
WORST QUARTER: -8.16% Q3 1998
AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/99
<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
------------------------------------------------------
<S> <C> <C>
Portfolio 25.77 17.96(1)
S&P 500(R) Index 21.04 26.65(2)
Lehman Brothers
Aggregate Bond Index -0.82 5.43(2)
</TABLE>
(1) Inception: 11/18/96.
(2) From 11/18/96.
PORTFOLIO FEES AND EXPENSES
The following table describes what you could expect to pay as a portfolio
investor. "Shareholder fees" are one-time expenses charged to you directly by
the portfolio. "Annual operating expenses" are paid out of portfolio assets, so
their effect is included in total return. Fees of the underlying funds are
reflected in those funds' performance, and thus indirectly in portfolio
performance.
FEE TABLE (%)
<TABLE>
<CAPTION>
SHAREHOLDER FEES
---------------------------------------------------
None
ANNUAL OPERATING EXPENSES (% of average net assets)
---------------------------------------------------
<S> <C>
MANAGEMENT FEES 0.54
DISTRIBUTION (12B-1) FEES NONE
OTHER EXPENSES 0.41
Total annual operating expenses 0.95
Expense reduction (0.45)
Net operating expenses* 0.50
</TABLE>
* Guaranteed by Schwab and the investment adviser through 2/28/01 (excluding
interest, taxes and certain non-routine expenses).
EXPENSES ON A $10,000 INVESTMENT
Designed to help you compare expenses, this example uses the same assumptions as
all mutual fund prospectuses: a $10,000 investment and 5% return each year.
One-year figures are based on net operating expenses. The expenses would be the
same whether you stayed in the portfolio or sold your shares at the end of each
period. Your actual costs may be higher or lower.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------------------------------------
<S> <C> <C> <C>
$51 $258 $482 $1,125
</TABLE>
The PERFORMANCE information above shows you how performance has varied from YEAR
TO YEAR and how it averages out OVER TIME.
BALANCED PORTFOLIO 10
--
<PAGE> 11
FINANCIAL HIGHLIGHTS
This section provides further details about the portfolio's financial history.
"Total return" shows the percentage that an investor in the portfolio would have
earned or lost during a given period, assuming all distributions were
reinvested. The portfolio's independent accountants, PricewaterhouseCoopers LLP,
audited these figures. Their full report is included in the portfolio's annual
report (see back cover).
<TABLE>
<CAPTION>
11/1/98 - 11/1/97 - 11/18/96 -
10/31/99 10/31/98 10/31/97
PER-SHARE DATA ($)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period 11.36 11.38 10.00
--------------------------------
Income from investment operations:
Net investment income 0.27 0.36 0.17
Net realized and unrealized gain on investments 2.11 0.18 1.34
--------------------------------
Total income from investment operations 2.38 0.54 1.51
Less distributions:
Dividends from net investment income (0.28) (0.34) (0.13)
Dividends in excess of net investment income (0.02) -- --
Distributions from capital gains -- (0.22) --
--------------------------------
Total distributions 0.30 (0.56) (0.13)
--------------------------------
NET ASSET VALUE AT END OF PERIOD 13.44 11.36 11.38
================================
Total return (%) 21.28 4.89 15.27(1)
</TABLE>
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA (%)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ratio of actual operating expenses to
average net assets 0.50 0.50 0.50(2)
Expense reductions reflected in above ratio 0.45 0.69 0.95(2)
Ratio of net investment income to average net assets 2.20 3.21 3.03(2)
Portfolio turnover rate 244 353 171
Net assets, end of period ($ x 1,000,000) 122 93 61
</TABLE>
(1) Not annualized.
(2) Annualized.
11
BALANCED PORTFOLIO
<PAGE> 12
SCHWAB
MARKETMANAGER
SMALL CAP PORTFOLIO TICKER SYMBOL
SWOSX
THE PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION.
STRATEGY
TO PURSUE ITS GOAL, THE PORTFOLIO INVESTS AT LEAST 65% OF ITS TOTAL ASSETS IN
OTHER MUTUAL FUNDS, including those available through Schwab's Mutual Fund
OneSource(R) service. The fund also has a policy of investing at least 65% of
total assets in small-cap stock funds. Typically, the actual percentages for
both policies are considerably higher.
The portfolio managers regularly review the small-cap segment of the market to
identify sectors or industries that offer the greatest potential for growth. The
managers then screen the universe of small-cap funds based on a combination of
quantitative measures-past performance, volatility, expenses-and qualitative
evaluations of their investment objectives, management teams and current
holdings.
The portfolio managers meet frequently with the management teams of those
small-cap funds that satisfy the screening criteria in order to gain a more
complete understanding of their investment styles and strategies. In choosing
the underlying funds, the portfolio managers seek clearly defined investment
strategies, strong performance histories and stable management, among other
criteria. As of 10/31/99, the portfolio included 24 underlying funds.
Because the small-cap market can be volatile, the portfolio managers monitor and
adjust the portfolio as necessary. In so doing, they seek to anticipate upcoming
markets as well as respond to current conditions.
SMALL-CAP STOCKS AND CAPITAL GROWTH
Small-cap companies are those whose market capitalization places them at the
smaller end of the spectrum of publicly traded companies.
There are thousands of small-cap companies, which historically have made up
approximately 20% of the total U.S. market capitalization. These companies are
found in every industry, although they tend to be concentrated in high-growth
sectors such as technology.
Over the past 70 years, stocks of these companies have offered high long-term
growth rates. At the same time, they have often been more volatile than
large-cap stocks, sometimes suffering deep slumps and at other times enjoying
high market enthusiasm.
12
SMALL CAP PORTFOLIO
<PAGE> 13
For the long-term investor, a SMALL-CAP STOCK INVESTMENT can be important
because of the exposure it provides to a different segment of the stock
market.
MAIN RISKS
STOCK MARKETS RISE AND FALL DAILY. As with any investment whose performance is
tied to these markets, the value of your investment in the portfolio will
fluctuate, which means that you could lose money.
THE MAIN RISKS OF THIS PORTFOLIO ARE THOSE ASSOCIATED WITH SMALL-CAP STOCK
FUNDS. The same factors that affect stock market performance generally affect
all stock funds. Political and economic news can influence marketwide trends;
the outcome may be positive or negative, short term or long term. Other factors
may be ignored by the market as a whole but may affect stock prices in one or
more industries (for example, rising oil prices may lead to a decline in airline
stocks).
HISTORICALLY, SMALL-CAP STOCK FUNDS HAVE BEEN RISKIER THAN FUNDS THAT FOCUS ON
LARGE- AND MID-CAP STOCKS. Stock prices of smaller companies may be based in
substantial part on future expectations rather than current achievements and may
move sharply, especially during market upturns and downturns. In addition,
during any period when small-cap stock funds perform less well than funds that
focus on other types of stock or other types of investments -- bonds, for
instance -- the portfolio's performance also will lag these investments.
OTHER RISK FACTORS
Because the portfolio managers have no control over the management of the
underlying funds, decisions made by the underlying funds' managers could change
the portfolio's investment profile or hurt its performance.
For example, if managers of underlying funds tended to favor cash, the
portfolio's exposure to the stock market would be lowered. Similarly, if
underlying funds make investments that don't perform as expected, the
portfolio's performance could be affected.
Additionally, the portfolio may actively buy and sell underlying fund shares,
which will increase its portfolio turnover rate, and increase the likelihood of
capital gain distributions.
13
Small Cap Portfolio
<PAGE> 14
PERFORMANCE
Below are a chart and a table showing the portfolio's performance, as well as
data on an unmanaged market index. These figures assume that all distributions
were reinvested. Keep in mind that future performance may differ from past
performance, and the index does not include any costs of investment.
[Bar Chart]
<TABLE>
ANNUAL TOTAL RETURNS (%) AS OF 12/31
<S> <C>
98 0.61
99 37.88
</TABLE>
Best quarter: 24.78% Q4 1999
Worst quarter: -18.97% Q3 1998
AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/99
<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
--------------------------------------------------
<S> <C> <C>
Portfolio 37.88 14.77(1)
Russell 2000 Index 21.26 6.88(2)
</TABLE>
(1) Inception: 9/16/97.
(2) From 9/16/97.
PORTFOLIO FEES AND EXPENSES
The following table describes what you could expect to pay as a portfolio
investor. "Shareholder fees" are one-time expenses charged to you directly by
the portfolio. "Annual operating expenses" are paid out of portfolio assets, so
their effect is included in total return. Fees of the underlying funds are
reflected in those funds' performance, and thus indirectly in portfolio
performance.
FEE TABLE (%)
<TABLE>
<CAPTION>
SHAREHOLDER FEES
-------------------------------------------------------------
NONE
ANNUAL OPERATING EXPENSES (% OF AVERAGE NET ASSETS)
-------------------------------------------------------------
<S> <C>
Management fees 0.54
Distribution (12b-1) fees None
Other expenses 0.47
----
Total annual operating expenses 1.01
EXPENSE REDUCTION (0.51)
-----
NET OPERATING EXPENSES* 0.50
----
</TABLE>
* Guaranteed by Schwab and the investment adviser through 2/28/01 (excluding
interest, taxes and certain non-routine expenses).
EXPENSES ON A $10,000 INVESTMENT
Designed to help you compare expenses, this example uses the same assumptions as
all mutual fund prospectuses: a $10,000 investment and 5% return each year.
One-year figures are based on net operating expenses. The expenses would be the
same whether you stayed in the portfolio or sold your shares at the end of each
period. Your actual costs may be higher or lower.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C>
$51 $271 $508 $1,190
</TABLE>
The PERFORMANCE information above shows you how the fund's performance compares
to that of an index, which varies OVER TIME.
14
Small Cap Portfolio
<PAGE> 15
FINANCIAL HIGHLIGHTS
This section provides further details about the portfolio's financial history.
"Total return" shows the percentage that an investor in the portfolio would have
earned or lost during a given period, assuming all distributions were
reinvested. The portfolio's independent accountants, PricewaterhouseCoopers LLP,
audited these figures. Their full report is included in the portfolio's annual
report (see back cover).
<TABLE>
<CAPTION>
11/1/98 - 11/1/97 - 9/16/97 -
10/31/99 10/31/98 10/31/97
PER-SHARE DATA ($)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period 8.51 9.93 10.00
-------------------------------------
Income from investment operations:
Net investment income 0.24 0.21 0.02
Net realized and unrealized gain (loss)
on investments 2.34 (1.36) (0.09)
-------------------------------------
Total income (loss) from investment operations 2.58 (1.15) (0.07)
Less distributions:
Dividends from net investment income (0.05) (0.21) --
Dividends in excess of net investment income -- (0.03) --
Distributions from capital gains -- (0.03) --
-------------------------------------
Total distributions (0.05) (0.27) --
-------------------------------------
NET ASSET VALUE AT END OF PERIOD 11.04 8.51 9.93
=====================================
Total return (%) 30.38 (11.84) (0.70)(1)
</TABLE>
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA (%)
----------------------------------------------------------------------------------------------
Ratio of actual operating expenses to
<S> <C> <C> <C>
average net assets 0.50 0.50 0.50(2)
Expense reductions reflected in above ratio 0.51 0.69 0.75(2)
Ratio of net investment income to average net assets 2.23 2.65 1.29(2)
Portfolio turnover rate 145 166 10
Net assets, end of period ($ x 1,000,000) 123 129 207
</TABLE>
(1) Not annualized.
(2) Annualized.
15
Small Cap Portfolio
<PAGE> 16
SCHWAB
MARKETMANAGER
INTERNATIONAL PORTFOLIO TICKER SYMBOL
SWOIX
THE PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION.
STRATEGY
TO PURSUE ITS GOAL, THE PORTFOLIO INVESTS AT LEAST 65% OF ITS TOTAL ASSETS IN
OTHER MUTUAL FUNDS, including those available through Schwab's Mutual Fund
OneSource(R) service. The fund also has a policy of investing at least 65% of
total assets in international stock funds. Typically, the actual percentages for
both policies are considerably higher.
The portfolio managers analyze global economic trends to target regions and
countries that offer the greatest potential for growth. Based on their findings,
they develop a country-by-country allocation that focuses typically on developed
markets but also may include emerging markets. The managers then screen the
universe of international stock funds based on a combination of quantitative
measures-past performance, volatility, expenses-and qualitative evaluations of
their investment objectives, country weightings, sector diversification,
management teams and current holdings.
The portfolio managers meet frequently with the management teams of those
international stock funds that satisfy the screening criteria in order to gain a
more complete understanding of their investment styles and strategies. In
choosing the underlying funds, the portfolio managers seek clearly defined
investment strategies, strong performance histories and stable management, among
other criteria. As of 10/31/99, the portfolio included 23 underlying funds.
Because international markets can be volatile, the portfolio managers monitor
and adjust the portfolio as necessary. In so doing, they seek to anticipate
upcoming markets as well as respond to current conditions.
INTERNATIONAL
STOCK FUNDS
Approximately two-thirds of the world's market opportunities lie outside the
United States. These include developed countries whose securities markets are
established and whose economies are industrialized, as well as emerging markets,
where industrialization and securities markets are in the process of developing.
With so many opportunities available, it is difficult for any one mutual fund to
maintain expertise in all industries and regions. The multi-fund approach offers
a potential solution by allowing portfolio managers to assemble a combination of
underlying funds whose strengths lie in different areas.
16
INTERNATIONAL PORTFOLIO
<PAGE> 17
International stock funds offer ACCESS to many FOREIGN MARKETS that can be
difficult for individual investors to reach.
MAIN RISKS
STOCK MARKETS RISE AND FALL DAILY. As with any investment whose performance is
tied to these markets, the value of your investment in the portfolio will
fluctuate, which means that you could lose money.
THE MAIN RISKS OF THIS PORTFOLIO ARE THOSE ASSOCIATED WITH INTERNATIONAL STOCK
FUNDS. The same factors that affect stock market performance generally affect
all stock funds. Political and economic news can influence marketwide trends;
the outcome may be positive or negative, short term or long term. Other factors
may be ignored by the market as a whole but may affect stock prices in one or
more industries (for example, rising oil prices may lead to a decline in airline
stocks).
INTERNATIONAL STOCK FUNDS CARRY ADDITIONAL RISKS. Changes in currency exchange
rates can erode market gains or widen market losses for the underlying funds.
International markets-even those that are well established-are often more
volatile than those of the United States, for reasons ranging from a lack of
reliable company information to the risk of political upheaval. These risks are
more significant in emerging markets, where governments may be less stable,
markets less liquid and economies less highly industrialized. In addition,
during any period when international stock funds perform less well than funds
that focus on other types of stocks or other types of investments -- bonds, for
instance -- the portfolio's performance also will lag these investments.
OTHER RISK FACTORS
Because the portfolio managers have no control over the management of the
underlying funds, decisions made by the underlying funds' managers could change
the portfolio's investment profile or hurt its performance.
For example, if managers of underlying funds tended to favor cash, the
portfolio's exposure to the stock market would be lowered. Similarly, if
underlying funds make investments that don't perform as expected, such as
certain foreign currency transactions, the portfolio's performance could be
affected.
Additionally, the portfolio may actively buy and sell underlying fund shares,
which will increase its portfolio turnover rate, and increase the likelihood of
capital gain distributions.
17
INTERNATIONAL PORTFOLIO
<PAGE> 18
PERFORMANCE
Below are a chart and a table showing the portfolio's performance, as well as
data on an unmanaged market index. These figures assume that all distributions
were reinvested. Keep in mind that future performance may differ from past
performance, and the index does not include any costs of investment.
[Bar Graph]
ANNUAL TOTAL RETURNS (%) AS OF 12/31
<TABLE>
<S> <C>
97 6.81
98 13.29
99 74.82
</TABLE>
BEST QUARTER: 41.67% Q4 1999
WORST QUARTER: -16.35% Q3 1998
AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/99
<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
<S> <C> <C>
Portfolio 74.82 27.50(1)
MSCI EAFE Index 26.96 14.86(2)
</TABLE>
(1) Inception: 10/16/96.
(2) From 10/16/96.
PORTFOLIO FEES AND EXPENSES
The following table describes what you could expect to pay as a portfolio
investor. "Shareholder fees" are one-time expenses charged to you directly by
the portfolio. "Annual operating expenses" are paid out of portfolio assets, so
their effect is included in total return. Fees of the underlying funds are
reflected in those funds' performance, and thus indirectly in portfolio
performance.
FEE TABLE (%)
<TABLE>
<CAPTION>
SHAREHOLDER FEES
---------------------------------------------------
<S> <C>
Redemption fee, charged only
on shares you sell within 180
days of buying them and paid
directly to the fund.* 1.50
</TABLE>
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES (% OF AVERAGE NET ASSETS)
---------------------------------------------------
<S> <C>
Management fees 0.54
Distribution (12b-1) fees None
Other expenses 0.43
----
Total annual operating expenses 0.97
Expense reduction (0.47)
-----
Net operating expenses** 0.50
-----
</TABLE>
* This fee does not apply to shares purchased before 5/1/00.
** Guaranteed by Schwab and the investment adviser through 2/28/01 (excluding
interest, taxes and certain non-routine expenses).
EXPENSES ON A $10,000 INVESTMENT
Designed to help you compare expenses, this example uses the same assumptions as
all mutual fund prospectuses: a $10,000 investment and 5% return each year.
One-year figures are based on net operating expenses. The expenses would be the
same whether you stayed in the portfolio or sold your shares at the end of each
period. Your actual costs may be higher or lower.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------------------------------------
<S> <C> <C> <C>
$51 $262 $490 $1,147
</TABLE>
The PERFORMANCE information above shows you how performance has varied from YEAR
TO YEAR and how it averages out OVER TIME.
18
INTERNATIONAL PORTFOLIO
<PAGE> 19
FINANCIAL HIGHLIGHTS
This section provides further details about the portfolio's financial history.
"Total return" shows the percentage that an investor in the portfolio would have
earned or lost during a given period, assuming all distributions were
reinvested. The portfolio's independent accountants, PricewaterhouseCoopers LLP,
audited these figures. Their full report is included in the portfolio's annual
report (see back cover).
<TABLE>
<CAPTION>
11/1/98 - 11/1/97 - 11/1/96 - 10/16/96 -
10/31/99 10/31/98 10/31/97 10/31/96
PER-SHARE DATA ($)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period 10.58 10.86 9.91 10.00
--------------------------------------------
Income from investment operations:
Net investment income 0.11 0.34 0.17 --
Net realized and unrealized gain (loss)
on investments 4.28 0.02 0.95 (0.09)
--------------------------------------------
Total income (loss) from investment operations 4.39 0.36 1.12 (0.09)
Less distributions:
Dividends from net investment income (0.11) (0.33) (0.17) --
Dividends in excess of net investment income (0.02) (0.01) -- --
Distributions from capital gains -- (0.30) -- --
--------------------------------------------
Total distributions (0.13) (0.64) (0.17) --
--------------------------------------------
NET ASSET VALUE AT END OF PERIOD 14.84 10.58 10.86 9.91
============================================
Total return (%) 41.92 3.55 11.47 (0.90)(1)
</TABLE>
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA (%)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratio of actual operating expenses to
average net assets 0.50 0.50 0.50 0.50(2)
Expense reductions reflected in above ratio 0.47 0.70 0.80 2.91(2)
Ratio of net investment income to average net assets 0.94 2.96 1.40 0.52(2)
Portfolio turnover rate 249 236 179 --
Net assets, end of period ($ x 1,000,000) 104 74 81 59
</TABLE>
(1) Not annualized.
(2) Annualized.
19
International Portfolio
<PAGE> 20
PORTFOLIO MANAGEMENT
The fund's investment adviser, Charles Schwab Investment Management, Inc., has
more than $100 billion under management.
The investment adviser for the Schwab MarketManager Portfolios(TM) is Charles
Schwab Investment Management, Inc., 101 Montgomery Street, San Francisco, CA
94104. Founded in 1989, the firm today serves as investment adviser for all of
the SchwabFunds.(R) The firm manages assets for more than 4 million shareholder
accounts. (All figures on this page are as of 10/31/99.) As the investment
adviser, the firm oversees the asset management and administration of the Schwab
MarketManager Portfolios. As compensation for these services, the firm receives
a management fee from each portfolio. For the 12 months ended 10/31/99, these
fees were 0.43% for the Growth Portfolio, 0.41% for the Balanced Portfolio,
0.35% for the Small Cap Portfolio and 0.38% for the International Portfolio.
These figures, which are expressed as a percentage of each portfolio's average
daily net assets, represent the actual amounts paid, including the effects of
reductions.
The MarketManager Portfolios may invest in the Excelsior Funds without
limitation, just as the MarketManager Portfolios can invest without limitation
in affiliated SchwabFunds. The advisers to the Excelsior Funds are United States
Trust Company of New York, U.S. Trust Company (Connecticut) and/or other
subsidiaries of U.S. Trust Corporation (U.S. Trust). U.S. Trust and Charles
Schwab Investment Management, Inc. are under the common control of The Charles
Schwab Corporation.
Jeffrey Mortimer, CFA, a vice president of the investment adviser, is
responsible for the overall management of the Schwab Market Manager Portfolios.
Prior to joining the firm in October 1997, he worked for more than eight years
in asset allocation and manager selection.
20
PORTFOLIO MANAGEMENT
<PAGE> 21
INVESTING IN THE PORTFOLIOS
As a SchwabFunds(R) investor, you have a number of WAYS TO DO BUSINESS with us.
On the following pages, you will find information on BUYING, SELLING AND
EXCHANGING shares using the method that is most CONVENIENT FOR YOU. You also
will see how to choose a distribution option for your investment. Helpful
information on TAXES is included as well.
21
INVESTING IN THE PORTFOLIOS
<PAGE> 22
BUYING SHARES
Shares of the portfolios may be purchased through a Schwab brokerage account or
through certain third-party investment providers, such as other financial
institutions, investment professionals and workplace retirement plans.
The information on these pages outlines how Schwab brokerage account investors
can place "good orders" to buy, sell and exchange shares of the funds. If you
are investing through a third-party investment provider, some of the
instructions, minimums and policies may be different. Some investment providers
may charge transaction or other fees. Contact your investment provider for more
information.
STEP 1
CHOOSE A PORTFOLIO, then decide how much you want to invest.
<TABLE>
<CAPTION>
MINIMUM INITIAL MINIMUM ADDITIONAL
PORTFOLIO INVESTMENT INVESTMENT MINIMUM BALANCE
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Portfolio $1,000 ($500 for $500 ($100 for $500 ($250 for
Balanced Portfolio retirement and Automatic Invest- retirement and
custodial accounts) ment Plan) custodial accounts)
--------------------------------------------------------------------------------------
Small Cap Portfolio $2,500 ($1,000 for $500 ($100 for $500 ($250 for
International Portfolio retirement and Automatic retirement and
custodial accounts) Investment Plans) custodial accounts)
</TABLE>
STEP 2
CHOOSE AN OPTION FOR FUND DISTRIBUTIONS. The three options are described below.
If you don't indicate a choice, you will receive the first option.
<TABLE>
<CAPTION>
OPTION FEATURES
-------------------------------------------------------------------------------------------
<S> <C>
Reinvestment All dividends and capital gain distributions are invested automatically
in shares of your portfolio.
-------------------------------------------------------------------------------------------
Cash/reinvestment You receive payment for dividends, while any capital gain
mix distributions are invested in shares of your portfolio.
-------------------------------------------------------------------------------------------
Cash You receive payment for all dividends and capital gain distributions.
</TABLE>
STEP 3
PLACE YOUR ORDER. Use any of the methods described at right. Make checks payable
to Charles Schwab & Co., Inc.
SCHWAB ACCOUNTS
Different types of Schwab brokerage accounts are available, with varying account
opening and balance requirements. Some Schwab brokerage account features can
work in tandem with features offered by the portfolio.
For example, when you sell shares in a portfolio, the proceeds are automatically
paid to your Schwab brokerage account. From your account, you can use features
such as MoneyLink, which lets you move money between your brokerage accounts and
bank accounts, and Automatic Investment Plan (AIP), which lets you set up
periodic investments.
For more information on Schwab brokerage accounts, call 800-435-4000 or visit
the Schwab web site at www.schwab.com.
Investing in the Portfolios
22
INVESTING IN THE PORTFOLIOS
<PAGE> 23
SELLING/EXCHANGING SHARES
Use any of the methods described below to sell shares of a portfolio.
When selling or exchanging shares, please be aware of the following policies:
- A fund may take up to seven days to pay sale proceeds.
- If you are selling shares that were recently purchased by check, the
proceeds may be delayed until the check for purchase clears; this may take
up to 15 days from the date of purchase.
- As indicated in its fee table, International Portfolio charges a redemption
fee, payable to the portfolio, on the sale or exchange of any of its shares
that have been held for less than 180 days; in attempting to minimize this
fee, the portfolio will first sell any shares in your account that aren't
subject to the fee (including shares acquired through reinvestment or
exchange).
- The portfolios reserve the right to honor redemptions in portfolio
securities instead of cash when your redemptions over a 90-day period exceed
$250,000 or 1% of a fund's assets, whichever is less.
- Exchange orders must meet the minimum investment and other requirements for
the fund and, if applicable, the share class into which you are exchanging.
- You must obtain and read the prospectus for the fund into which you are
exchanging prior to placing your order.
METHODS FOR PLACING DIRECT ORDERS
PHONE
Call 800-435-4000, day or night (for TDD service, call 800-345-2550).
INTERNET
www.schwab.com/schwabfunds
SCHWABLINK
Investment professionals should follow the transaction instructions in the
SchwabLink manual; for technical assistance, call 800-367-5198.
MAIL
Write to SchwabFunds(R) at:
P.O. Box 7575
San Francisco, CA 94120-7575
When selling or exchanging shares, be sure to include the signature of at least
one of the persons whose name is on the account.
IN PERSON
Visit the nearest Charles Schwab branch office.
WHEN PLACING ORDERS
With every order to buy, sell or exchange shares, you will need to include the
following information:
- Your name
- Your account number (for SchwabLink transactions, include the master account
and subaccount numbers)
- The name of the portfolio whose shares you want to buy or sell
- The dollar amount or number of shares you would like to buy, sell or
exchange
- For exchanges, the name of the fund into which you want to exchange and the
distribution option you prefer
- When selling shares, how you would like to receive the proceeds
Please note that orders to buy, sell or exchange become irrevocable at the
time you mail them.
23
INVESTING IN THE PORTFOLIOS
<PAGE> 24
TRANSACTION POLICIES
The portfolios are open for business each day that the New York Stock Exchange
(NYSE) is open. The portfolios calculate their share prices each business day,
after the close of the NYSE (generally 4 p.m. Eastern time). A portfolio's share
price is its net asset value per share, or NAV, which is the portfolio's net
assets divided by the number of its shares outstanding. Orders to buy, sell or
exchange shares that are received in good order prior to the close of the
portfolio will be executed at the next share price calculated that day.
In valuing underlying fund investments, the portfolios use the NAVs reported by
their underlying funds. In valuing other portfolio securities, the portfolios
use market quotes if they are readily available. In cases where quotes are not
readily available, a portfolio may value securities based on fair values
developed using methods approved by the portfolio's Board of Trustees.
Shareholders of the portfolios should be aware that because foreign markets are
often open on weekends and other days when the portfolios are closed, the value
of some of a portfolio's securities may change on days when it is not possible
to buy or sell shares of the portfolio.
The portfolios and Schwab reserve certain rights, including the following:
- To automatically redeem your shares if the account they are held in is
closed for any reason or your balance falls below the minimum for the
portfolio as a result of selling or exchanging your shares
- To modify or terminate the exchange privilege upon 60 days' written notice
to shareholders
- To refuse any purchase or exchange order, including large purchase orders
that may negatively impact its operations, and orders that appear to be
associated with short-term trading activities
- To change or waive a portfolio's investment minimums
- To suspend the right to sell shares back to the portfolio, and delay sending
proceeds, during times when trading on the NYSE is restricted or halted, or
otherwise as permitted by the SEC
- To withdraw or suspend any part of the offering made by this prospectus
- To revise the redemption fee criteria
DAILY NAV REPORTING
Each day, reporting services, such as newspapers, may publish the share prices
of mutual funds from the close of business on the previous day. For multi-fund
portfolios, these prices are generally reported one day behind other mutual
funds. This is because a multi-fund portfolio uses the share prices of its
underlying funds to calculate its NAV, and this information is typically
received and calculated after the publishing deadlines of reporting services.
Each portfolio still calculates its share price daily, and this is the price at
which you may buy and sell shares each business day.
24
INVESTING IN THE PORTFOLIOS
<PAGE> 25
DISTRIBUTIONS AND TAXES
ANY INVESTMENT IN THE PORTFOLIOS TYPICALLY INVOLVES SEVERAL TAX CONSIDERATIONS.
The information below is meant as a general summary for U.S. citizens and
residents. Because each person's tax situation is different, you should consult
your tax advisor about the tax implications of your investment in a portfolio.
You also can visit the Internal Revenue Service (IRS) web site at www.irs.gov.
AS A SHAREHOLDER, YOU ARE ENTITLED TO YOUR SHARE OF THE DIVIDENDS AND GAINS YOUR
PORTFOLIO EARNS. Every year, each portfolio distributes to its shareholders
substantially all of its net investment income and net capital gains, if any.
These distributions typically are paid in December to all shareholders of
record.
UNLESS YOU ARE INVESTING THROUGH A TAX-DEFERRED OR ROTH RETIREMENT ACCOUNT, YOUR
PORTFOLIO DISTRIBUTIONS GENERALLY HAVE TAX CONSEQUENCES. Each portfolio's net
investment income and short-term capital gains are distributed as dividends and
are taxable as ordinary income. Other capital gain distributions are taxable as
long-term capital gains, regardless of how long you have held your shares in the
portfolio. Distributions generally are taxable in the tax year in which they are
declared, whether you reinvest them or take them in cash.
GENERALLY, ANY SALE OF YOUR SHARES IS A TAXABLE EVENT. A sale may result in a
capital gain or loss for you. The gain or loss generally will be treated as
short term if you held the shares for 12 months or less; long term if you held
the shares longer. For tax purposes, an exchange between funds is considered a
sale.
AT THE BEGINNING OF EVERY YEAR, THE PORTFOLIOS PROVIDE SHAREHOLDERS WITH
INFORMATION DETAILING THE TAX STATUS OF ANY DISTRIBUTIONS the portfolio paid
during the previous calendar year. Schwab brokerage account customers also
receive information on distributions and transactions in their monthly account
statements.
SCHWAB BROKERAGE ACCOUNT CUSTOMERS WHO SELL PORTFOLIO SHARES typically will
receive a report that calculates their gain or loss using the "average cost"
single-category method. This information is not reported to the IRS, and you
still have the option of calculating gains or losses using any other methods
permitted by the IRS.
MORE ON DISTRIBUTIONS
If you are investing through a taxable account and purchase shares of a fund
just before it declares a distribution, you may receive a portion of your
investment back as a taxable distribution. This is because when a fund makes a
distribution, the share price is reduced by the amount of the distribution.
You can avoid "buying a dividend," as it is often called, by finding out if a
distribution is imminent and waiting until afterwards to invest. Of course, you
may decide that the opportunity to gain a few days of investment performance
outweighs the tax consequences of buying a dividend.
25
INVESTING IN THE PORTFOLIOS
<PAGE> 26
NOTES
<PAGE> 27
NOTES
<PAGE> 28
TO LEARN MORE
This prospectus contains important information on the portfolios and should be
read and kept for reference. You also can obtain more information from the
following sources.
SHAREHOLDER REPORTS, which are mailed to current portfolio investors, discuss
recent performance and portfolio holdings.
The STATEMENT OF ADDITIONAL INFORMATION (SAI) includes a more detailed
discussion of investment policies and the risks associated with various
investments. The SAI is incorporated by reference into the prospectus, making it
legally part of the prospectus.
You can obtain copies of these documents by
contacting SchwabFunds(R) or the SEC. All materials from SchwabFunds are free;
the SEC charges a duplicating fee. You can also review these materials in person
at the SEC's Public Reference Room or by computer using the SEC's EDGAR database
at WWW.SEC.GOV.
SEC FILE NUMBER
Schwab MarketManager Portfolios 811-7704
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-0102
800-SEC-0330 (Public Reference Section)
202-942-8090
www.sec.gov
[email protected]
SCHWABFUNDS
P.O. Box 7575
San Francisco, CA 94120-7575
800-435-4000
www.schwab.com/schwabfunds
MKT3756FLT-2
SCHWAB
MARKETMANAGER
PORTFOLIOS(TM)
PROSPECTUS
February 29, 2000
As amended July 1, 2000
[CharlesSchwab Logo]
