SCHWABFUNDS-Registered Trademark-
SCHWAB EQUITY
INDEX FUNDS
ANNUAL REPORT
AND
AN IMPORTANT NOTICE REGARDING
DELIVERY OF SHAREHOLDER
DOCUMENTS
October 31, 1999
<PAGE>
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission has adopted a rule permitting mutual
funds to deliver only one copy of shareholder documents, including prospectuses
and shareholder reports to fund investors with multiple accounts at the same
residential or post office box address. This practice is commonly called
"householding" and is intended to eliminate duplicate mailings of shareholder
documents.
Schwab may begin indefinitely householding prospectuses and shareholder reports
for SchwabFunds-Registered Trademark- effective February 29, 2000.
ADDITIONAL COPIES OF SHAREHOLDER DOCUMENTS
ALL SCHWABFUNDS PROSPECTUSES and shareholder reports ARE AVAILABLE FREE OF
CHARGE, AND MAY BE REQUESTED AT ANY TIME BY CALLING SCHWAB AS INDICATED BELOW.
SchwabFunds prospectuses are also available on our Web site at www.schwab.com.
If you would otherwise fall under our householding policy, but for any reason
prefer to receive multiple SchwabFunds prospectuses and shareholder reports,
please contact:
- - SCHWAB SIGNATURE SERVICES-TM- CLIENTS: Schwab Signature Services.
- - INVESTMENT MANAGER CLIENTS: Schwab at 1-800-515-2157, or your investment
manager.
- - ALL OTHER CLIENTS: Schwab at 1-800-435-4000.
Your instructions that householding not apply to your accounts holding
SchwabFunds will be effective within 30 days of receipt by Schwab.
<PAGE>
SCHWABFUNDS-Registered Trademark-
SCHWAB EQUITY
INDEX FUNDS
- SCHWAB S&P 500 FUND
- SCHWAB 1000 FUND-Registered Trademark-
- SCHWAB TOTAL STOCK
MARKET INDEX FUND-TM-
- SCHWAB SMALL-CAP
INDEX FUND-Registered Trademark-
- SCHWAB INTERNATIONAL
INDEX FUND-Registered Trademark-
Annual Report
October 31, 1999
<PAGE>
SCHWAB EQUITY INDEX FUNDS
We are pleased to bring you this annual report for the Schwab Equity Index Funds
(the funds) for the one-year period ended October 31, 1999. This report includes
the following five funds and all classes--Investor Shares, e.Shares-TM- and
Select Shares:-TM-
- Schwab S&P 500 Fund
- Schwab 1000 Fund-Registered Trademark-
- Schwab Total Stock Market Index Fund-TM-
- Schwab Small-Cap Index Fund-Registered Trademark-
- Schwab International Index Fund-Registered Trademark-
As covered in their respective sections of this report, all the funds achieved
their primary objectives of tracking or matching the price and
dividend-performance of their benchmark indices during the reporting period. In
addition, the funds also succeeded in maintaining the tax efficiencies and low
costs designed to help maximize long-term performance results.
FUND LISTINGS
The Funds are listed in THE WALL STREET JOURNAL, USA TODAY, INVESTOR'S BUSINESS
DAILY and most local newspapers as follows under the heading
SCHWABFUNDS:-Registered Trademark-
<TABLE>
<CAPTION>
NEWSPAPER LISTING SYMBOL
<S> <C>
S&P e SWPEX
S&P Inv SWPIX
S&P Sel SWPPX
1000 Inv r SNXFX
1000 Sel SNXSX
SmCp Inv SWSMX
Sm Cp Sel SWSSX
Intl Inv r SWINX
Intl Sel SWISX
TSM Inv SWTIX
TSM Sel SWTSX
</TABLE>
CONTENTS
<TABLE>
<S> <C>
- ---------------------------------------------
A Message from the Chairman 1
- ---------------------------------------------
What Every Investor Should Know 2
- ---------------------------------------------
Market Overview 4
- ---------------------------------------------
Schwab S&P 500 Fund
FUND PERFORMANCE 8
PORTFOLIO SNAPSHOT 13
- ---------------------------------------------
Schwab 1000 Fund
FUND PERFORMANCE 15
PORTFOLIO SNAPSHOT 19
- ---------------------------------------------
Schwab Total Stock Market Index Fund
FUND PERFORMANCE 21
PORTFOLIO SNAPSHOT 24
- ---------------------------------------------
Schwab Small-Cap Index Fund
FUND PERFORMANCE 26
PORTFOLIO SNAPSHOT 30
- ---------------------------------------------
Schwab International Index Fund
FUND PERFORMANCE 32
PORTFOLIO SNAPSHOT 36
- ---------------------------------------------
The Portfolio Management Team 38
- ---------------------------------------------
Fund Discussion 39
- ---------------------------------------------
Glossary 46
- ---------------------------------------------
Financial Statements and Notes 48
- ---------------------------------------------
</TABLE>
S&P 500-REGISTERED TRADEMARK- IS A TRADEMARK OF THE MCGRAW-HILL COMPANIES, INC.
AND HAS BEEN LICENSED FOR USE BY THE SCHWAB CAPITAL TRUST. THE SCHWAB S&P 500
FUND IS NOT SPONSORED, SOLD OR PROMOTED BY
STANDARD & POOR'S,-REGISTERED TRADEMARK- AND THEY MAKE NO REPRESENTATION
REGARDING THE ADVISABILITY OF INVESTING IN THE FUND.
<PAGE>
A MESSAGE FROM THE CHAIRMAN
[PHOTO]
Dear Shareholder,
As 1999 draws to a close, I'd like to take this opportunity to reflect on the
year and the changes and milestones that have taken place at Charles Schwab
Investment Management, Inc. (CSIM), the investment adviser for the
SchwabFunds-Registered Trademark- Family.
First of all, we reached a significant milestone in September, when SchwabFunds
assets topped the $100 billion mark. With the support of investors like you,
SchwabFunds continue to be among the largest and fastest growing fund families
in the nation.
Secondly, we added two new products to our SchwabFunds offering:
- - SCHWAB TOTAL STOCK MARKET INDEX FUND-TM- seeks to track the total return of
the entire U.S. stock market, as measured by the Wilshire 5000 Total Market
Index, the broadest measure of U.S. stock market performance. In one single,
low-cost investment, fund investors can benefit from exposure to U.S.
companies of all types and sizes.
- - SCHWAB YIELDPLUS FUND-TM- The fund seeks high current income with minimal
changes in share price. It is designed to provide the potential for higher
yields than a money fund and lower risk than a longer-term bond fund through a
management strategy designed to minimize price fluctuation. Intended for your
long-term (over one-year) cash needs, the fund seeks to increase the overall
yield potential of the cash portion of your portfolio.
For more information on either of these funds, please call 1-800-435-4000 and
request a free prospectus. The prospectus contains more information on fund fees
and expenses. Please read it carefully before investing.
I encourage you to take a moment to read this annual report as it is designed to
provide timely information about your SchwabFunds investments. You will find
information on each fund's total returns and performance, as well as commentary
on market conditions provided by the portfolio management team. In the section
"What Every Investor Should Know", we've also provided guidelines that can help
you reach your goals by establishing--or maintaining--an ongoing investment
program.
As a leader in online brokerage, we recognize the value of the web as a means of
communicating timely, relevant information to investors. Regular updates on all
of the SchwabFunds, including performance data, are available on our Web site at
WWW.SCHWAB.COM/SCHWABFUNDS. We encourage you to take advantage of this valuable
resource which can help you keep track your funds' performance.
At Schwab our philosophy has always been that a combination of regular investing
and diversification is the best strategy over the long term. By investing in
SchwabFunds, you've already taken an important step in building a portfolio that
can help you meet your future goals. Thank you for your investment in
SchwabFunds.
Sincerely,
/s/ Charles R. Schwab
Charles R. Schwab
October 31, 1999
THE YEAR 2000
One issue with the potential to disrupt portfolio operations and affect
performance is the inability of some computers to recognize the year 2000.
The Investment Adviser will continue to take steps to enable its systems to
handle the year 2000 problem. The Investment Adviser is also seeking
assurances that its service providers and business partners are taking
similar steps as well. It is impossible to know in advance however, exactly
how this issue will affect portfolio administration, portfolio performance or
securities markets in general.
1
<PAGE>
WHAT EVERY INVESTOR SHOULD KNOW
WHY ASSET ALLOCATION MATTERS
As most investors know, one of the most compelling reasons to invest in a mutual
fund is diversification. By allocating your assets across many different
securities, a fund can help reduce the risk that you might otherwise encounter
by owning just a few stocks or bonds.
But remember that diversification ACROSS asset classes can be just as important
as diversification WITHIN one of the mutual funds you own. As you probably know,
stocks historically have offered much higher returns over the long term than
bonds, cash or other asset classes, but those returns have come at the price of
higher volatility. To help mitigate some of that risk, many investors often
include at least some bonds and cash in their portfolios. They also diversify
their exposure across different stock market segments--such as large-cap and
small-cap U.S. stocks and international stocks, which have tended to move with
less-than-perfect correlation over time. In short, allocating assets across
market segments may help reduce your overall portfolio risk.
REGULAR INVESTING STRATEGIES
Another way to help dampen the effects of short-term market volatility is to
invest the same amount of money on a regular basis. With this investment
strategy, known as DOLLAR-COST AVERAGING, you automatically buy more shares when
stock or bond prices are low and fewer when they're high.*
A hypothetical example can help illustrate this concept. Let's say you invest
$400 on a monthly basis in a single mutual fund, as shown below. Because of
fluctuating prices, your per-share purchase price varies monthly. A simple
average of your five purchase prices would yield $8.20 per share; however, your
AVERAGE COST BASIS (your total investment divided by the number of shares
actually purchased) would be significantly lower--by more than $0.50 per share.
The net result in this example is that your average cost per share is reduced
and you'd have purchased more shares than you would have had you paid the
average share price over the five-month period.
<TABLE>
<CAPTION>
No. of
Fixed Share Shares
Investment Price Purchased
<S> <C> <C> <C>
- --------------------------------------------------------
Month 1 $400 $10 40
- --------------------------------------------------------
Month 2 $400 $8 50
- --------------------------------------------------------
Month 3 $400 $5 80
- --------------------------------------------------------
Month 4 $400 $8 50
- --------------------------------------------------------
Month 5 $400 $10 40
- --------------------------------------------------------
Totals $2,000 -- 260
- --------------------------------------------------------
AVERAGE SHARE PRICE ($41 DIVIDED BY 5
periods): $8.20
YOUR AVERAGE COST BASIS
($2,000 DIVIDED BY 260 shares): $7.69
PER-SHARE ADVANTAGE: $0.51
</TABLE>
This example is for illustrative purposes only and is not intended to predict or
guarantee the performance of any particular fund available through Schwab.
(Of course, in this example, hindsight shows you that your best move would have
been to invest your entire $2,000 in Month 3, when the share price was at a low
of $5--but it's unlikely that you would have been able to predict that.)
* Regular investing strategies such as dollar-cost averaging do not assure a
profit or protect against a loss in declining markets. Since such a strategy
involves continuous investment, investors should consider their ability to
continue purchases through periods of low price levels.
2
<PAGE>
SCHWAB'S 10 INVESTING PRINCIPLES
1. START WITH THE BASICS FOR LONG-TERM INVESTING.
2. GET STARTED NOW!
3. KNOW YOURSELF.
4. INVEST IN THE STOCK MARKET FOR GROWTH.
5. TAKE A LONG-TERM VIEW.
6. BUILD A DIVERSIFIED PORTFOLIO.
7. CONSIDER BONDS AND CASH FOR DIVERSIFICATION AND INCOME.
8. MINIMIZE YOUR EXPENSES.
9. STAY ON TRACK.
10. BECOME A LIFELONG INVESTOR.
In addition to reducing your per-share costs over time, dollar-cost averaging
provides another benefit: the discipline of investing regularly. You're more
likely to maintain a regular investment plan if it's automatic: You don't have
to think about it, and you minimize any propensity to skip an investment in
favor of some other expenditure. To encourage this discipline, Schwab offers you
two convenient, no-cost ways to begin or maintain a program of regular
investing:
Schwab's AUTOMATIC INVESTMENT PLAN (AIP) allows you to automatically
purchase--on a regular basis--additional shares in mutual funds that you already
own. For amounts as little as $100 per month, you can use the cash or sweep
shares of your existing Schwab Money Fund,(1) or you can enroll in
MONEYLINK,-Registered Trademark- Schwab's electronic transfer service, to
automatically transfer money to your Schwab account.
With MoneyLink, you can arrange to regularly and automatically transfer money
between your bank account and your Schwab account. It's a convenient way to
build your investment over time.
Please be aware that these programs--and dollar-cost averaging in general--do
not ensure a profit or protect against a loss, and investors should know that
markets fall as well as rise. Because dollar-cost averaging involves continuous
investment in securities regardless of fluctuating prices, you should consider
your financial ability to purchase in both up and down markets. Over the long
term, however, dollar-cost averaging may help to smooth out volatility caused by
shortterm market trends. For more information, please call us
at 1-800-435-4000.
WE MAKE IT EASY TO INVEST
We try to make it easy and convenient for you to invest in our
SchwabFunds.-Registered Trademark- In addition to our automated methods that
allow you to invest or transfer money to your Schwab account on a regular basis,
you can also invest through our Web site at WWW.SCHWAB.COM/SCHWABFUNDS; through
our automated touch-tone telephone service, TeleBroker,-Registered Trademark- by
calling 1-800-272-4922; or in person at any of our nationwide branches.
KEEPING YOU INFORMED
You can find a wealth of information about our investment philosophy and
funds, as well as updated fund performance data at our Web site:
WWW.SCHWAB.COM/SCHWABFUNDS.
(1) Includes uninvested cash and margin cash available. If sufficient cash is
not available, your automatic purchases will not be made.
3
<PAGE>
MARKET OVERVIEW
U.S. ECONOMIC GROWTH
The U.S. economy, as measured by gross domestic product (GDP), continued its
lengthy expansion with a strong real growth rate of 4.3% for the year ended
September 1999--a rate considered to be in excess of the long-term maximum
sustainable non-inflationary growth rate. High levels of consumer confidence and
spending, low interest rates, rising real wages and strong gains in stock prices
have been the principal factors responsible for this lengthy expansion.
In a major revision of the GDP benchmark data going back four decades, the
Commerce Department reported that, during the 1990s, growth was stronger,
personal savings higher, and inflation lower than previously calculated.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REAL GDP GROWTH RATE
QUARTERLY PERCENTAGE CHANGE
(ANNUALIZED RATE)
<S> <C>
Q1 1990 5.0%
Q2 1990 1.0%
Q3 1990 -0.6%
Q4 1990 -3.0%
Q1 1991 -1.7%
Q2 1991 2.6%
Q3 1991 1.3%
Q4 1991 2.5%
Q1 1992 4.3%
Q2 1992 4.0%
Q3 1992 3.1%
Q4 1992 5.2%
Q1 1993 -0.7%
Q2 1993 2.1%
Q3 1993 1.5%
Q4 1993 6.0%
Q1 1994 3.6%
Q2 1994 5.7%
Q3 1994 2.2%
Q4 1994 5.1%
Q1 1995 1.5%
Q2 1995 0.8%
Q3 1995 3.2%
Q4 1995 3.3%
Q1 1996 2.9%
Q2 1996 6.9%
Q3 1996 2.2%
Q4 1996 4.9%
Q1 1997 4.9%
Q2 1997 5.1%
Q3 1997 4.0%
Q4 1997 3.1%
Q1 1998 6.7%
Q2 1998 2.1%
Q3 1998 3.8%
Q4 1998 5.9%
Q1 1999 3.7%
Q2 1999 1.9%
Q3 1999 5.5%
Source: BLOOMBERG L.P.
</TABLE>
Despite some recent slowing in the housing sector and a moderate decline in
consumer confidence, personal consumption and business fixed investment remain
strong. The consensus of most economists is that the U.S. economy appears poised
for continued growth, but at a more moderate pace than experienced so far in
1999.
Last year's concerns over the impact of international economic problems have
been displaced by concerns over imbalances in the domestic economy, namely the
surging current account (trade) deficit, record high stock valuations, and the
low savings rate. Looking ahead, the behavior of domestic consumers in response
to continued stock market volatility may also be a key determinant of whether
the economy continues on its current course or softens throughout 2000.
UNEMPLOYMENT
October's unemployment rate of 4.1% was a 29-year low. Labor markets continue to
be extremely tight in many areas of the country. Growth in the labor force has
slowed, and there continues to be concern that wage and benefits increases may
begin to put more pressure on labor costs (refer to Employment Cost Index on the
next page).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
U.S. UNEMPLOYMENT RATE
<S> <C>
Jan-90 5.4%
Feb-90 5.3%
Mar-90 5.2%
Apr-90 5.4%
May-90 5.4%
Jun-90 5.2%
Jul-90 5.5%
Aug-90 5.7%
Sep-90 5.9%
Oct-90 5.9%
Nov-90 6.2%
Dec-90 6.3%
Jan-91 6.4%
Feb-91 6.6%
Mar-91 6.8%
Apr-91 6.7%
May-91 6.9%
Jun-91 6.9%
Jul-91 6.8%
Aug-91 6.9%
Sep-91 6.9%
Oct-91 7.0%
Nov-91 7.0%
Dec-91 7.3%
Jan-92 7.3%
Feb-92 7.4%
Mar-92 7.4%
Apr-92 7.4%
May-92 7.6%
Jun-92 7.8%
Jul-92 7.7%
Aug-92 7.6%
Sep-92 7.6%
Oct-92 7.3%
Nov-92 7.4%
Dec-92 7.4%
Jan-93 7.3%
Feb-93 7.1%
Mar-93 7.0%
Apr-93 7.1%
May-93 7.1%
Jun-93 7.0%
Jul-93 6.9%
Aug-93 6.8%
Sep-93 6.7%
Oct-93 6.8%
Nov-93 6.6%
Dec-93 6.5%
Jan-94 6.8%
Feb-94 6.6%
Mar-94 6.5%
Apr-94 6.4%
May-94 6.1%
Jun-94 6.1%
Jul-94 6.3%
Aug-94 6.0%
Sep-94 5.8%
Oct-94 5.8%
Nov-94 5.6%
Dec-94 5.5%
Jan-95 5.6%
Feb-95 5.4%
Mar-95 5.3%
Apr-95 5.8%
May-95 5.8%
Jun-95 5.6%
Jul-95 5.6%
Aug-95 5.7%
Sep-95 5.6%
Oct-95 5.5%
Nov-95 5.7%
Dec-95 5.6%
Jan-96 5.6%
Feb-96 5.5%
Mar-96 5.6%
Apr-96 5.5%
May-96 5.6%
Jun-96 5.3%
Jul-96 5.5%
Aug-96 5.1%
Sep-96 5.2%
Oct-96 5.2%
Nov-96 5.3%
Dec-96 5.4%
Jan-97 5.3%
Feb-97 5.3%
Mar-97 5.1%
Apr-97 5.0%
May-97 4.7%
Jun-97 5.0%
Jul-97 4.7%
Aug-97 4.9%
Sep-97 4.7%
Oct-97 4.7%
Nov-97 4.6%
Dec-97 4.7%
Jan-98 4.5%
Feb-98 4.6%
Mar-98 4.6%
Apr-98 4.3%
May-98 4.3%
Jun-98 4.5%
Jul-98 4.5%
Aug-98 4.5%
Sep-98 4.5%
Oct-98 4.5%
Nov-98 4.4%
Dec-98 4.3%
Jan-99 4.3%
Feb-99 4.4%
Mar-99 4.2%
Apr-99 4.3%
May-99 4.2%
Jun-99 4.3%
Jul-99 4.3%
Aug-99 4.2%
Sep-99 4.2%
Oct-99 4.1%
Source: BLOOMBERG L.P.
</TABLE>
INFLATION
Price inflation continued to remain well contained. The Consumer Price Index
(CPI) rose just 2.6% for the year ended October 1999. Its core rate (which
4
<PAGE>
excludes the more volatile food and energy components) rose just 2.1%. The GDP
price deflator, the broadest measure of inflation, indicated prices rising at an
annual rate of 1.3% for the year ended September 1999.
The Employment Cost Index, which measures inflation in wages, salaries and
benefits was also well contained, increasing 3.1% for the year ended September
1999.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MEASURES OF INFLATION
QUARTERLY EMPLOYMENT COST INDEX MONTHLY CONSUMER PRICE INDEX
<S> <C> <C>
Jan-90 5.5% 5.2%
Feb-90 5.5% 5.3%
Mar-90 5.5% 5.2%
Apr-90 5.4% 4.7%
May-90 5.4% 4.4%
Jun-90 5.4% 4.7%
Jul-90 5.2% 4.8%
Aug-90 5.2% 5.6%
Sep-90 5.2% 6.2%
Oct-90 4.9% 6.3%
Nov-90 4.9% 6.3%
Dec-90 4.9% 6.1%
Jan-91 4.6% 5.7%
Feb-91 4.6% 5.3%
Mar-91 4.6% 4.9%
Apr-91 4.6% 4.9%
May-91 4.6% 5.0%
Jun-91 4.6% 4.7%
Jul-91 4.3% 4.4%
Aug-91 4.3% 3.8%
Sep-91 4.3% 3.4%
Oct-91 4.3% 2.9%
Nov-91 4.3% 3.0%
Dec-91 4.3% 3.1%
Jan-92 4.0% 2.6%
Feb-92 4.0% 2.8%
Mar-92 4.0% 3.2%
Apr-92 3.6% 3.2%
May-92 3.6% 3.0%
Jun-92 3.6% 3.1%
Jul-92 3.5% 3.2%
Aug-92 3.5% 3.1%
Sep-92 3.5% 3.0%
Oct-92 3.5% 3.2%
Nov-92 3.5% 3.0%
Dec-92 3.5% 2.9%
Jan-93 3.5% 3.3%
Feb-93 3.5% 3.2%
Mar-93 3.5% 3.1%
Apr-93 3.6% 3.2%
May-93 3.6% 3.2%
Jun-93 3.6% 3.0%
Jul-93 3.6% 2.8%
Aug-93 3.6% 2.8%
Sep-93 3.6% 2.7%
Oct-93 3.5% 2.8%
Nov-93 3.5% 2.7%
Dec-93 3.5% 2.7%
Jan-94 3.2% 2.5%
Feb-94 3.2% 2.5%
Mar-94 3.2% 2.5%
Apr-94 3.2% 2.4%
May-94 3.2% 2.3%
Jun-94 3.2% 2.5%
Jul-94 3.2% 2.8%
Aug-94 3.2% 2.9%
Sep-94 3.2% 3.0%
Oct-94 3.0% 2.6%
Nov-94 3.0% 2.7%
Dec-94 3.0% 2.7%
Jan-95 2.9% 2.8%
Feb-95 2.9% 2.9%
Mar-95 2.9% 2.9%
Apr-95 2.9% 3.1%
May-95 2.9% 3.2%
Jun-95 2.9% 3.0%
Jul-95 2.7% 2.8%
Aug-95 2.7% 2.6%
Sep-95 2.7% 2.5%
Oct-95 2.7% 2.8%
Nov-95 2.7% 2.6%
Dec-95 2.7% 2.5%
Jan-96 2.8% 2.7%
Feb-96 2.8% 2.7%
Mar-96 2.8% 2.8%
Apr-96 2.9% 2.9%
May-96 2.9% 2.9%
Jun-96 2.9% 2.8%
Jul-96 2.8% 3.0%
Aug-96 2.8% 2.9%
Sep-96 2.8% 3.0%
Oct-96 2.9% 3.0%
Nov-96 2.9% 3.3%
Dec-96 2.9% 3.3%
Jan-97 2.9% 3.0%
Feb-97 2.9% 3.0%
Mar-97 2.9% 2.8%
Apr-97 2.8% 2.5%
May-97 2.8% 2.2%
Jun-97 2.8% 2.3%
Jul-97 3.0% 2.2%
Aug-97 3.0% 2.2%
Sep-97 3.0% 2.2%
Oct-97 3.3% 2.1%
Nov-97 3.3% 1.8%
Dec-97 3.3% 1.7%
Jan-98 3.3% 1.6%
Feb-98 3.3% 1.4%
Mar-98 3.3% 1.4%
Apr-98 3.5% 1.4%
May-98 3.5% 1.7%
Jun-98 3.5% 1.7%
Jul-98 3.7% 1.7%
Aug-98 3.7% 1.6%
Sep-98 3.7% 1.5%
Oct-98 3.4% 1.5%
Nov-98 3.4% 1.5%
Dec-98 3.4% 1.6%
Jan-99 3.0% 1.7%
Feb-99 3.0% 1.6%
Mar-99 3.0% 1.7%
Apr-99 3.2% 2.3%
May-99 3.2% 2.1%
Jun-99 3.2% 2.0%
Jul-99 3.1% 2.1%
Aug-99 3.1% 2.3%
Sep-99 3.1% 2.6%
Oct-99 2.6%
Source: BLOOMBERG L.P.
</TABLE>
Although there is little evidence of accelerating core inflation, the U.S.
Federal Reserve Board has expressed concern that should labor markets continue
to tighten, increases in wages may outpace productivity growth. In that
environment, productivity growth becomes particularly critical, as it enables
companies to pay higher wages without raising prices. Non-farm productivity grew
2.8% in 1998 and at a 2.7% annualized rate in the first three quarters of 1999,
continuing a healthy trend that began in 1996.
ASSET CLASS PERFORMANCE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURN PERFORMANCE
GROWTH OF A HYPOTHETICAL $1 INVESTMENT
MSCI-EAFE S&P 500 RUSSELL 2000 LEHMAN
-REGISTERED TRADEMARK- INDEX SMALL-CAP AGGREGATE
INDEX INDEX BOND INDEX
<S> <C> <C> <C> <C>
Oct-98 $1.00 $1.00 $1.00 $1.00
Nov-98 $1.05 $1.06 $1.05 $1.01
Dec-98 $1.09 $1.12 $1.12 $1.01
Jan-99 $1.09 $1.17 $1.13 $1.02
Feb-99 $1.06 $1.13 $1.04 $1.00
Mar-99 $1.11 $1.18 $1.06 $1.00
Apr-99 $1.15 $1.22 $1.15 $1.01
May-99 $1.09 $1.19 $1.17 $1.00
Jun-99 $1.14 $1.26 $1.22 $0.99
Jul-99 $1.17 $1.22 $1.19 $0.99
Aug-99 $1.17 $1.22 $1.14 $0.99
Sep-99 $1.18 $1.18 $1.14 $1.00
Oct-99 $1.23 $1.26 $1.15 $1.01
</TABLE>
COMPILED BY CHARLES SCHWAB & CO., INC.
Large-cap domestic stocks, as represented by the S&P 500-Registered Trademark-
Index, continued to be the strongest performing asset class, achieving a total
return of 25.7% for the year ended October 1999. Within the S&P 500, growth
stocks continued to be the strongest performing style for the period. Small-cap
stocks as represented by the Russell 2000-Registered Trademark- Index also
experienced a positive return of 14.9%.
Assisted by the rebound in Asian markets, international stock returns, as
represented by the MSCI-EAFE Index, experienced a positive total return of
23.0% for the one-year reporting period ended October 31, 1999.
Reflecting the rise in intermediate and long-term interest rates, fixed income
returns were generally weak for the period. Bond returns, as represented by the
Lehman Brothers Aggregate Bond Index,-Registered Trademark- were 0.5% for the
one-year reporting period.
5
<PAGE>
MARKET OVERVIEW (continued)
U.S. EQUITY VALUATION
The price/earnings (P/E) ratio for the S&P 500-Registered Trademark- Index
reached record highs during the reporting period and ended the period at a lofty
29.9 times earnings, approximately twice its long-term average. The P/E ratio,
also known as a multiple, is the price of a stock divided by its earnings per
share, and generally indicates how much investors are willing to pay for a
company's earning potential. Based on other traditional market valuation
measures such as the price-to-book value ratio or dividend yield, the U.S. stock
market continues to remain at record high valuation levels.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 PRICE/EARNINGS RATIO
<S> <C>
Jan-90 14.37
Feb-90 14.21
Mar-90 14.77
Apr-90 14.82
May-90 15.84
Jun-90 16.66
Jul-90 16.65
Aug-90 15.57
Sep-90 14.9
Oct-90 14.36
Nov-90 14.59
Dec-90 15.19
Jan-91 14.95
Feb-91 16.82
Mar-91 17.48
Apr-91 17.85
May-91 17.92
Jun-91 17.96
Jul-91 18.07
Aug-91 19.72
Sep-91 19.88
Oct-91 19.92
Nov-91 21.02
Dec-91 21.85
Jan-92 23.35
Feb-92 23.83
Mar-92 25.45
Apr-92 25.51
May-92 25.71
Jun-92 25.08
Jul-92 25.61
Aug-92 25.5
Sep-92 24.37
Oct-92 23.94
Nov-92 24.08
Dec-92 24.01
Jan-93 24.2
Feb-93 24.25
Mar-93 24.22
Apr-93 23.2
May-93 23.21
Jun-93 22.58
Jul-93 22.52
Aug-93 23.02
Sep-93 23.74
Oct-93 23.97
Nov-93 22.55
Dec-93 23.55
Jan-94 22.98
Feb-94 21.17
Mar-94 20.34
Apr-94 20.1
May-94 20.16
Jun-94 19.76
Jul-94 18.64
Aug-94 18.9
Sep-94 18.26
Oct-94 17.55
Nov-94 16.58
Dec-94 16.98
Jan-95 16.23
Feb-95 16.2
Mar-95 16.5
Apr-95 16.02
May-95 16.43
Jun-95 16.82
Jul-95 16.55
Aug-95 16.18
Sep-95 16.86
Oct-95 16.18
Nov-95 17.14
Dec-95 17.41
Jan-96 18.11
Feb-96 18.56
Mar-96 18.94
Apr-96 19.16
May-96 19.48
Jun-96 19.3
Jul-96 18.31
Aug-96 18.62
Sep-96 19.75
Oct-96 19.6
Nov-96 21.05
Dec-96 20.7
Jan-97 20.55
Feb-97 20.98
Mar-97 19.87
Apr-97 20.24
May-97 21.43
Jun-97 22.45
Jul-97 23.92
Aug-97 22.64
Sep-97 24
Oct-97 22.84
Nov-97 24.02
Dec-97 24.51
Jan-98 24.99
Feb-98 26.44
Mar-98 27.76
Apr-98 26.51
May-98 26.12
Jun-98 27.09
Jul-98 26.78
Aug-98 22.77
Sep-98 24.23
Oct-98 27.58
Nov-98 30.14
Dec-98 31.97
Jan-99 33.29
Feb-99 32.65
Mar-99 33.78
Apr-99 33.9
May-99 32.74
Jun-99 34.7
Jul-99 31.62
Aug-99 31.21
Sep-99 29.9
Oct-99 29.92
30-Year Average 15.5
Source: BLOOMBERG L.P.
</TABLE>
TREASURY BOND YIELDS
Continuing a trend which began in October 1998, both long-term and intermediate
term rates continued to climb upward during the reporting period. Scaled back
concerns about the impact of international economic problems and the continued
growth of the domestic economy were the primary drivers of this upward trend in
yields.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
30-YEAR AND FIVE-YEAR TREASURY BOND YIELDS
30-YEAR TREASURY FIVE-YEAR TREASURY
BOND YIELD NOTE YIELD
<S> <C> <C>
10/2/1998 4.84% 4.08%
10/9/1998 5.12% 4.46%
10/16/1998 4.98% 4.04%
10/23/1998 5.18% 4.30%
10/30/1998 5.16% 4.23%
11/6/1998 5.39% 4.59%
11/13/1998 5.25% 4.50%
11/20/1998 5.22% 4.60%
11/27/1998 5.16% 4.59%
12/4/1998 5.04% 4.39%
12/11/1998 5.02% 4.39%
12/18/1998 5.00% 4.36%
12/25/1998 5.22% 4.71%
1/1/1999 5.10% 4.54%
1/8/1999 5.27% 4.73%
1/15/1999 5.11% 4.55%
1/22/1999 5.08% 4.52%
1/29/1999 5.09% 4.55%
2/5/1999 5.35% 4.86%
2/12/1999 5.42% 4.96%
2/19/1999 5.39% 4.99%
2/26/1999 5.58% 5.22%
3/5/1999 5.60% 5.22%
3/12/1999 5.53% 5.06%
3/19/1999 5.56% 5.08%
3/26/1999 5.59% 5.08%
4/2/1999 5.46% 4.96%
4/9/1999 5.46% 4.96%
4/16/1999 5.57% 5.11%
4/23/1999 5.60% 5.14%
4/30/1999 5.66% 5.21%
5/7/1999 5.81% 5.37%
5/14/1999 5.92% 5.50%
5/21/1999 5.75% 5.43%
5/28/1999 5.83% 5.58%
6/4/1999 5.96% 5.73%
6/11/1999 6.16% 5.91%
6/18/1999 5.97% 5.73%
6/25/1999 6.15% 5.89%
7/2/1999 6.00% 5.69%
7/9/1999 6.00% 5.69%
7/16/1999 5.88% 5.55%
7/23/1999 6.03% 5.69%
7/30/1999 6.10% 5.79%
8/6/1999 6.18% 5.91%
8/13/1999 6.10% 5.86%
8/20/1999 5.99% 5.77%
8/27/1999 5.98% 5.77%
9/3/1999 6.02% 5.77%
9/10/1999 6.04% 5.78%
9/17/1999 6.06% 5.75%
9/24/1999 5.97% 5.66%
10/1/1999 6.13% 5.86%
10/8/1999 6.20% 5.95%
10/15/1999 6.26% 5.97%
10/22/1999 6.35% 6.10%
10/29/1999 6.16% 5.95%
Source: BLOOMBERG L.P.
</TABLE>
INTERNATIONAL PERFORMANCE
The MSCI-EAFE-Registered Trademark- Index gained 23.0% in U.S. dollar terms
(excluding reinvested dividends) during the one-year reporting period. In local
currency terms, it gained 26.90%, reflecting the relative weakness of most
foreign currencies (compared to the dollar) during the period.
With the exception of Austria, Belgium, Ireland, Switzerland and Spain, all of
the MSCI-EAFE component countries had positive returns for the period. In
particular, many of the Asian countries reversed their severe declines of the
prior period to post strong returns. The strongest-performing countries for the
period were Finland, Singapore and Japan.
6
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MSCI-EAFE COUNTRY RETURNS
ONE YEAR ENDED 10/31/99
<S> <C> <C>
Finland 100.43%
Singapore 87.76%
Japan 57.38%
Sweden 46.01%
Hong Kong 23.22%
France 23.03%
Netherlands 10.52%
United Kingdom 10.50%
Australia 9.14%
Germany 6.27%
Denmark 6.00%
New Zealand 4.46%
Norway 1.32%
Italy 0.34%
Spain -0.40%
Switzerland -1.44%
Ireland -2.74%
Belgium -6.67%
Austria -15.16%
Source: DATASTREAM
</TABLE>
This market overview has been provided by the portfolio management team.
7
<PAGE>
SCHWAB S&P 500 FUND-INVESTOR SHARES AND E.SHARES-TM-
FUND PERFORMANCE
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR (5/1/96)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
SCHWAB S&P 500 FUND-INVESTOR SHARES(1) 25.20% 24.76%
- -------------------------------------------------------------------------------------------------------
SCHWAB S&P 500 FUND-E.SHARES(1) 25.28% 24.90%
- -------------------------------------------------------------------------------------------------------
S&P 500-Registered Trademark- Index 25.67% 25.38%
- -------------------------------------------------------------------------------------------------------
Index Tracking Differential-Investor Shares (0.47)% (0.62)%
- -------------------------------------------------------------------------------------------------------
Index Tracking Differential-e.Shares (0.39)% (0.48)%
- -------------------------------------------------------------------------------------------------------
</TABLE>
National Association of Securities Dealers (NASD) regulations require that we
report performance data as of the most recent calendar quarter--in this case,
the quarter ended 9/30/99. As of 9/30/99, the fund's one-year and
since-inception average annual total returns were 27.21% and 23.23%,
respectively, for the Investor Shares and 27.31% and 23.36%, respectively, for
the e.Shares. Without fee waivers and guarantees, the one-year and since-
inception average annual total returns would have been 26.83% and 22.78%,
respectively, for the Investor Shares and 26.99% and 22.78%, respectively, for
the e.Shares as of 9/30/99.
Also shown is the difference between the total returns of the S&P 500 Index and
the Schwab S&P 500 Fund, which is often referred to as the "tracking
differential." The tracking differential arises due to several factors. For
example, unlike the index, the fund has operating expenses and incurs trading
costs when it buys or sells securities. The fund also may hold non-index
securities that can produce either higher or lower returns than their index
counterparts. Furthermore, unlike the index, the fund holds a portion of its
assets in cash.
8
<PAGE>
TAX-SMART INVESTMENT STRATEGY
The Schwab S&P 500 Fund seeks to maximize its after-tax performance by using a
strategy that helps reduce capital gains distributions. This strategy is
designed to help investors keep more of what their money earns. The chart below
illustrates the effects of this strategy on the one-year performance of the
Schwab S&P 500 Fund-Investor Shares.
AVERAGE ANNUAL RETURNS: PRE TAX AND AFTER-TAX
<TABLE>
<CAPTION>
PERIODS ENDED OCTOBER 31, 1999
ONE YEAR
-----------------------------------------------
PRE TAX AFTER TAX(2) % LOST TO TAXES
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Schwab S&P 500 Fund-Investor Shares(1) 25.20% 24.79% (1.63)%
- -------------------------------------------------------------------------------------------------------------
Average Large-Cap Fund(3) 24.85% 22.97% (7.56)%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A portion of the fund's expenses was reduced during the reporting period.
Without such reductions, as of 10/31/99, the fund's one-year and
since-inception average annual returns would have been 24.84% and 24.31% for
Investor Shares and 25.00% and 24.32% for e.Shares, respectively.
(2) After-tax returns assume the maximum federal income tax rate of 39.6% on
dividends and 20% on capital gains distributions. Tax rates vary and may be
higher or lower than those shown. State and local taxes have not been
considered. After-tax return information is not applicable to shareholders
in tax-deferred accounts such as IRAs or 401ks. Past after-tax information
is not a prediction of future tax efficiency. After-tax return information
does not reflect the tax effect of your own investment activities, such as a
decision to sell some or all of your fund shares, which may cause you to
incur additional capital gain taxes.
(3) Source: Morningstar, Inc. The large-cap fund category contains 1,006 funds
with one-year track records as of 10/31/99. These funds may or may not
follow a tax-efficient strategy similar to that followed by the Schwab S&P
500 Fund.
9
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB S&P 500 FUND-INVESTOR SHARES S&P 500 INDEX SCHWAB S&P 500 FUND-E. SHARES
<S> <C> <C> <C>
May-96 $10,000 $10,000 $10,000
May-96 $10,250 $10,257 $10,250
Jun-96 $10,290 $10,296 $10,290
Jul-96 $9,840 $9,841 $9,840
Aug-96 $10,040 $10,049 $10,050
Sep-96 $10,600 $10,613 $10,600
Oct-96 $10,880 $10,906 $10,890
Nov-96 $11,690 $11,731 $11,710
Dec-96 $11,462 $11,498 $11,473
Jan-97 $12,157 $12,216 $12,179
Feb-97 $12,248 $12,312 $12,270
Mar-97 $11,744 $11,808 $11,766
Apr-97 $12,430 $12,511 $12,452
May-97 $13,186 $13,272 $13,209
Jun-97 $13,760 $13,867 $13,794
Jul-97 $14,849 $14,969 $14,873
Aug-97 $14,012 $14,131 $14,036
Sep-97 $14,778 $14,904 $14,803
Oct-97 $14,284 $14,406 $14,318
Nov-97 $14,930 $15,073 $14,964
Dec-97 $15,184 $15,332 $15,227
Jan-98 $15,357 $15,502 $15,390
Feb-98 $16,455 $16,620 $16,490
Mar-98 $17,289 $17,471 $17,336
Apr-98 $17,452 $17,647 $17,499
May-98 $17,147 $17,344 $17,193
Jun-98 $17,838 $18,048 $17,886
Jul-98 $17,645 $17,857 $17,692
Aug-98 $15,092 $15,278 $15,136
Sep-98 $16,058 $16,257 $16,103
Oct-98 $17,340 $17,579 $17,397
Nov-98 $18,387 $18,645 $18,446
Dec-98 $19,443 $19,718 $19,504
Jan-99 $20,253 $20,543 $20,316
Feb-99 $19,617 $19,904 $19,679
Mar-99 $20,397 $20,700 $20,459
Apr-99 $21,176 $21,501 $21,240
May-99 $20,663 $20,994 $20,737
Jun-99 $21,812 $22,159 $21,878
Jul-99 $21,125 $21,467 $21,199
Aug-99 $21,012 $21,360 $21,086
Sep-99 $20,428 $20,775 $20,501
Oct-99 $21,709 $22,090 $21,795
</TABLE>
The above graph compares the growth of a hypothetical $10,000 investment in the
Schwab S&P 500 Fund-Investor Shares and e.Shares,-TM- made at their inception,
with a similar investment in the S&P 500-Registered Trademark- Index.
THE INFORMATION PRESENTED IS HISTORICAL AND DOES NOT REPRESENT FUTURE RESULTS.
TOTAL RETURNS ASSUME REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS. PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE, SO AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. Indices are unmanaged and do not reflect advisory fees and other expenses
associated with an investment in the fund. Investors cannot invest in an index
directly.
ASSETS
<TABLE>
<S> <C>
- ------------------------------------------------------------------------
Total net assets as of 10/31/98 (000s) $2,216,222
- ------------------------------------------------------------------------
Total net assets as of 10/31/99 (000s) $3,617,323
- ------------------------------------------------------------------------
Percentage growth over reporting period 63%
- ------------------------------------------------------------------------
</TABLE>
10
<PAGE>
SCHWAB S&P 500 FUND-SELECT SHARES-TM-
FUND PERFORMANCE
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR (5/19/97)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
SCHWAB S&P 500 FUND-SELECT SHARES(1),(2) 25.42% 23.70%
- -------------------------------------------------------------------------------------------------------
S&P 500-Registered Trademark- Index 25.67% 24.02%
- -------------------------------------------------------------------------------------------------------
Index Tracking Differential-Select Shares (0.25)% (0.32)%
- -------------------------------------------------------------------------------------------------------
</TABLE>
National Association of Securities Dealers (NASD) regulations require that we
report performance data as of the most recent calendar quarter--in this case,
the quarter ended 9/30/99. As of 9/30/99, the fund's one-year and
since-inception average annual total returns for the Select Shares were 27.45%
and 21.47%, respectively. Without fee waivers and guarantees, the one-year and
since-inception average annual total returns would have been 26.97% and 20.11%,
respectively, for the Select Shares as of 9/30/99.
Also shown is the difference between the total returns of the S&P 500 Index and
the Schwab S&P 500 Fund, often referred to as the "tracking differential." (See
page 8 for a more detailed discussion).
(1) A portion of the fund's expenses was reduced during the reporting period.
Without such reductions, as of 10/31/99, the fund's one-year and
since-inception average annual returns would have been 25.09% and 22.36%,
respectively.
(2) The required minimum initial investment in the Select Shares is $50,000.
11
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $50,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB S&P 500 FUND - SELECT SHARES S&P 500 INDEX
<S> <C> <C>
5/97 $50,000 $50,000
5/97 $50,935 $50,930
6/97 $53,190 $53,212
7/97 $57,395 $57,442
8/97 $54,165 $54,225
9/97 $57,120 $57,191
10/97 $55,215 $55,281
11/97 $57,745 $57,841
12/97 $58,745 $58,836
1/98 $59,375 $59,489
2/98 $63,660 $63,778
3/98 $66,880 $67,043
4/98 $67,550 $67,720
5/98 $66,370 $66,556
6/98 $69,040 $69,258
7/98 $68,295 $68,524
8/98 $58,435 $58,629
9/98 $62,165 $62,387
10/98 $67,155 $67,459
11/98 $71,245 $71,547
12/98 $75,340 $75,668
1/99 $78,475 $78,831
2/99 $76,015 $76,379
3/99 $79,030 $79,434
4/99 $82,085 $82,509
5/99 $80,140 $80,561
6/99 $84,545 $85,033
7/99 $81,885 $82,380
8/99 $81,490 $81,968
9/99 $79,230 $79,721
10/99 $84,230 $84,767
</TABLE>
The above graph compares the growth of a hypothetical $50,000 investment in the
Schwab S&P 500 Fund-Select Shares, made at its inception, with a similar
investment in the S&P 500-Registered Trademark- Index.
THE INFORMATION PRESENTED IS HISTORICAL AND DOES NOT REPRESENT FUTURE RESULTS.
TOTAL RETURNS ASSUME REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS. PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE, SO AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. Indices are unmanaged and do not reflect advisory fees and other expenses
associated with an investment in the fund. Investors cannot invest in an index
directly.
ASSETS
<TABLE>
<S> <C>
- ------------------------------------------------------------------------
Total net assets as of 10/31/98 (000s) $1,548,052
- ------------------------------------------------------------------------
Total net assets as of 10/31/99 (000s) $3,750,052
- ------------------------------------------------------------------------
Percentage growth over reporting period 142%
- ------------------------------------------------------------------------
</TABLE>
12
<PAGE>
SCHWAB S&P 500 FUND
PORTFOLIO SNAPSHOT
The Schwab S&P 500 Fund (the fund) invests primarily in common stocks of the S&P
500-Registered Trademark- Index, a widely recognized, unmanaged index of 500
large-cap stocks selected by Standard & Poor's.-Registered Trademark- As of
October 31, 1999, the aggregate market capitalization of the S&P 500 Index
represented approximately 81.1% of the total value of the U.S. stock market.*
Common stocks of the 50 largest companies in the S&P 500 Index accounted for
approximately 57.4% of the index. The information below and on the following
page provides a snapshot of the fund's characteristics as of 10/31/99, and is
not indicative of its composition after that date. The terms used below are
defined beginning on page 46. A complete list of the securities in the fund's
portfolio as of 10/31/99 is provided in the Schedule of Investments later in
this report.
FUND FACTS
<TABLE>
<CAPTION>
SCHWAB S&P 500 FUND- PEER GROUP
INVESTOR SHARES AVERAGE+
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Number of Issues 505 131
- ----------------------------------------------------------------------------------------------------------------------
Median Market Cap ($ Mil) $67,789+ $45,601
- ----------------------------------------------------------------------------------------------------------------------
Price/Earnings (P/E) Ratio 34.3+ 33.6
- ----------------------------------------------------------------------------------------------------------------------
Price/Book (P/B) Ratio 8.5+ 8.0
- ----------------------------------------------------------------------------------------------------------------------
12-Month Yield 0.72%+ 0.47%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 3% 75%
- ----------------------------------------------------------------------------------------------------------------------
Three-Year Beta 1.0+ 0.95
- ----------------------------------------------------------------------------------------------------------------------
Expense Ratio 0.35%** 1.34%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Source: Wilshire Associates. The U.S. stock market as represented by the
Wilshire 5000 Index.
** Reflects a reduction by the Investment Adviser and Schwab, which is
guaranteed through at least 2/29/00.
+ Source: Morningstar. This information is as of 10/31/99, and is for
illustrative purposes only. It is not intended to show, predict or guarantee
future composition of the fund. The peer group average is based on 2,173
large-cap funds as tracked by Morningstar.
13
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 10/31/99
<TABLE>
<S> <C>
Healthcare/Drugs and Medicine 10.9%
Business Machines and Software 13.0%
Telephone 9.2%
Electronics 8.1%
Banks 6.7%
Retail 6.3%
Miscellaneous Finance 5.6%
Producer Goods and Manufacturing 5.4%
Oil-International 4.2%
Food and Agriculture 3.9%
Other 26.7%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
EQUITY INVESTMENT STYLE BOX(++)
AS OF 10/31/99
<TABLE>
<S> <C> <C> <C>
- --Style--
Value Blend Growth --Market Cap--
X Large
Medium
Small
</TABLE>
TOP 10 HOLDINGS
AS A PERCENTAGE OF FUND INVESTMENTS
<TABLE>
<S> <C>
- ---------------------------------------------
Microsoft Corp. 4.19%
- ---------------------------------------------
General Electric Co. 3.94%
- ---------------------------------------------
Intel Corp. 2.27%
- ---------------------------------------------
Wal-Mart Stores, Inc. 2.24%
- ---------------------------------------------
Cisco Systems, Inc. 2.13%
- ---------------------------------------------
- ---------------------------------------------
Lucent Technologies, Inc. 1.75%
- ---------------------------------------------
Merck & Co., Inc. 1.65%
- ---------------------------------------------
Citigroup, Inc. 1.62%
- ---------------------------------------------
Exxon Corp. 1.59%
- ---------------------------------------------
International Business Machines Corp. 1.58%
- ---------------------------------------------
</TABLE>
++ Source: Morningstar, Inc. The style box illustrates the composition of the
fund's portfolio as of 10/31/99. It is not indicative of its holdings after
that date, nor does it represent an exact assessment of risk or future
assessment or any type of future performance. Placement is based on the
fund's P/E and P/B ratios relative to the S&P 500-Registered Trademark-
Index, as well as the size of the companies in which it invests, or median
market capitalization.
14
<PAGE>
SCHWAB 1000 FUND-REGISTERED TRADEMARK--INVESTOR SHARES
FUND PERFORMANCE
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR FIVE YEARS (4/2/91)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
SCHWAB 1000 FUND-INVESTOR SHARES(1) 25.12% 24.66% 18.17%
- ------------------------------------------------------------------------------------------------------
Schwab 1000 Index-Registered Trademark- 25.42% 25.22% 18.65%
- ------------------------------------------------------------------------------------------------------
Index Tracking Differential-Investor Shares (0.30)% (0.56)% (0.48)%
- ------------------------------------------------------------------------------------------------------
S&P 500-Registered Trademark- Index 25.67% 26.00% 18.81%
- ------------------------------------------------------------------------------------------------------
</TABLE>
National Association of Securities Dealers (NASD) regulations require that we
report performance data as of the most recent calendar quarter--in this case,
the quarter ended 9/30/99. As of 9/30/99, the fund's one-year, five-year and
since inception average annual total returns were 26.69%, 23.55% and 17.48%,
respectively. Without fee waivers and guarantees, the one-year, five-year and
since-inception average annual total returns would have been 26.57%, 23.39% and
17.25%, respectively, for the Investor Shares as of 9/30/99.
Also shown is the difference between the total returns of the Schwab 1000 Index
and the Schwab 1000 Fund, which is often referred to as the "tracking
differential." (See page 8 for a more detailed discussion).
TAX-SMART INVESTMENT STRATEGY
The Schwab 1000 Fund seeks to maximize its after-tax performance by using a
strategy that helps reduce capital gains distributions. This strategy is
designed to help investors keep more of what their money earns. The chart below
illustrates the effects of this strategy on the one-year and five-year
performance of the Schwab 1000 Fund-Investor Shares.
AVERAGE ANNUAL RETURNS: PRE TAX AND AFTER-TAX
<TABLE>
<CAPTION>
PERIODS ENDED OCTOBER 31, 1999
ONE YEAR FIVE YEARS
------------------------------------------------ ------------------------------------------------
PRE TAX AFTER TAX(2) % LOST TO TAXES PRE TAX AFTER TAX(2) % LOST TO TAXES
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Schwab 1000
Fund-Investor
Shares(1) 25.12% 24.74% (1.51)% 24.66% 24.12% (2.19)%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Large-Cap
Fund(3) 24.85% 22.97% (7.56)% 21.37% 18.71% (12.44)%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A portion of the fund's expenses was reduced during the reporting period.
Without such reductions, as of 10/31/99, the fund's one-year, five-year and
the since-inception average annual returns would have been 25.01%, 24.50%
and 17.94%, respectively.
(2) After-tax returns assume the maximum federal income tax rate of 39.6% on
dividends and 20% on capital gains distributions. Tax rates vary and may be
higher or lower than those shown. State and local taxes have not been
considered. After-tax return information is not applicable to shareholders
in tax-deferred accounts such as IRAs or 401ks. Past after-tax information
is not a prediction of future tax efficiency. After-tax return information
does not reflect the tax effect of your own investment activities, such as a
decision to sell some or all of your fund shares, which may cause you to
incur additional capital gain taxes.
(3) Source: Morningstar, Inc. The large-cap fund category contains 1,006 funds
with one-year track records and 601 funds with five-year track records as of
10/31/99. These funds may or may not follow a tax-efficient strategy similar
to that followed by the Schwab 1000 Fund.
15
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB 1000 FUND - INVESTOR SHARES S&P 500 INDEX SCHWAB 1000 INDEX
<S> <C> <C> <C>
4/91 $10,000 $10,000 $10,000
4/91 $9,910 $9,908 $9,898
5/91 $10,320 $10,335 $10,311
6/91 $9,850 $9,861 $9,840
7/91 $10,320 $10,321 $10,310
8/91 $10,600 $10,566 $10,591
9/91 $10,460 $10,389 $10,455
10/91 $10,630 $10,528 $10,625
11/91 $10,240 $10,104 $10,225
12/91 $11,425 $11,260 $11,412
1/92 $11,283 $11,050 $11,272
2/92 $11,425 $11,193 $11,415
3/92 $11,171 $10,975 $11,163
4/92 $11,404 $11,298 $11,392
5/92 $11,404 $11,353 $11,457
6/92 $11,465 $11,184 $11,257
7/92 $11,726 $11,641 $11,728
8/92 $11,480 $11,403 $11,486
9/92 $11,623 $11,537 $11,646
10/92 $11,746 $11,577 $11,763
11/92 $12,208 $11,971 $12,233
12/92 $12,398 $12,119 $12,428
1/93 $12,502 $12,220 $12,539
2/93 $12,595 $12,387 $12,632
3/93 $12,896 $12,648 $12,948
4/93 $12,533 $12,342 $12,583
5/93 $12,896 $12,673 $12,957
6/93 $12,958 $12,710 $13,024
7/93 $12,905 $12,659 $12,989
8/93 $13,397 $13,139 $13,492
9/93 $13,355 $13,038 $13,454
10/93 $13,544 $13,308 $13,654
11/93 $13,355 $13,181 $13,462
12/93 $13,592 $13,341 $13,700
1/94 $14,005 $13,794 $14,136
2/94 $13,645 $13,420 $13,781
3/94 $13,042 $12,837 $13,169
4/94 $13,190 $13,001 $13,326
5/94 $13,349 $13,213 $13,488
6/94 $12,988 $12,889 $13,127
7/94 $13,405 $13,312 $13,558
8/94 $13,971 $13,856 $14,147
9/94 $13,651 $13,518 $13,825
10/94 $13,918 $13,821 $14,095
12/94 $13,416 $13,318 $13,590
12/94 $13,577 $13,514 $13,767
1/95 $13,923 $13,864 $14,121
2/95 $14,474 $14,404 $14,700
3/95 $14,852 $14,829 $15,094
4/95 $15,219 $15,264 $15,476
5/95 $15,770 $15,874 $16,048
6/95 $16,191 $16,242 $16,490
7/95 $16,807 $16,779 $17,111
8/95 $16,936 $16,821 $17,245
9/95 $17,606 $17,531 $17,949
10/95 $17,520 $17,468 $17,859
11/95 $18,276 $18,233 $18,646
12/95 $18,547 $18,585 $18,924
1/96 $19,095 $19,217 $19,499
2/96 $19,379 $19,396 $19,789
3/96 $19,554 $19,582 $19,980
4/96 $19,883 $19,870 $20,321
5/96 $20,354 $20,380 $20,812
6/96 $20,299 $20,458 $20,779
7/96 $19,335 $19,554 $19,794
8/96 $19,861 $19,966 $20,327
9/96 $20,967 $21,088 $21,465
10/96 $21,394 $21,670 $21,899
11/96 $22,938 $23,308 $23,485
12/96 $22,549 $22,847 $23,103
1/97 $23,846 $24,272 $24,442
2/97 $23,935 $24,464 $24,528
3/97 $22,870 $23,461 $23,457
4/97 $24,101 $24,859 $24,696
5/97 $25,631 $26,371 $26,291
6/97 $26,695 $27,552 $27,402
7/97 $28,857 $29,743 $29,615
8/97 $27,471 $28,077 $28,216
9/97 $28,946 $29,613 $29,732
10/97 $27,992 $28,624 $28,756
11/97 $29,167 $29,949 $29,983
12/97 $29,747 $30,464 $30,582
1/98 $29,960 $30,802 $30,818
2/98 $32,166 $33,023 $33,116
3/98 $33,801 $34,714 $34,830
4/98 $34,149 $35,065 $35,211
5/98 $33,398 $34,462 $34,441
6/98 $34,742 $35,861 $35,824
7/98 $34,260 $35,481 $35,324
8/98 $29,142 $30,357 $30,049
9/98 $31,023 $32,303 $32,014
10/98 $33,487 $34,929 $34,602
11/98 $35,570 $37,046 $36,762
12/98 $37,826 $39,180 $39,090
1/99 $39,259 $40,818 $40,575
2/99 $37,939 $39,548 $39,256
3/99 $39,462 $41,130 $40,820
4/99 $41,065 $42,722 $42,505
5/99 $40,117 $41,714 $41,535
6/99 $42,115 $44,029 $43,637
7/99 $40,772 $42,655 $42,247
9/03 $40,377 $42,442 $41,900
8/99 $39,304 $41,279 $40,655
10/99 $41,901 $43,891 $43,397
</TABLE>
The above graph compares the growth of a hypothetical $10,000 investment in the
Schwab 1000 Fund-Investor Shares, made at its inception, with similar
investments in the Schwab 1000 Index-Registered Trademark- and the S&P
500-Registered Trademark- Index.
THE INFORMATION PRESENTED IS HISTORICAL AND DOES NOT REPRESENT FUTURE RESULTS.
TOTAL RETURNS ASSUME REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS. PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE, SO AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. Indices are unmanaged and do not reflect advisory fees and other expenses
associated with an investment in the fund. Investors cannot invest in an index
directly.
ASSETS
<TABLE>
<S> <C>
- ------------------------------------------------------------------------
Total net assets as of 10/31/98 (000s) $3,657,122
- ------------------------------------------------------------------------
Total net assets as of 10/31/99 (000s) $4,924,606
- ------------------------------------------------------------------------
Percentage growth over reporting period 35%
- ------------------------------------------------------------------------
</TABLE>
16
<PAGE>
SCHWAB 1000 FUND-SELECT SHARES-TM-
FUND PERFORMANCE
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR (5/19/97)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
SCHWAB 1000 FUND-SELECT SHARES(1),(2) 25.29% 23.40%
- -------------------------------------------------------------------------------------------------------
Schwab 1000 Index-Registered Trademark- 25.42% 23.74%
- -------------------------------------------------------------------------------------------------------
Index Tracking Differential-Select Shares (0.13)% (0.34)%
- -------------------------------------------------------------------------------------------------------
S&P 500-Registered Trademark- Index 25.67% 24.02%
- -------------------------------------------------------------------------------------------------------
</TABLE>
National Association of Securities Dealers (NASD) regulations require that we
report performance data as of the most recent calendar quarter--in this case,
the quarter ended 9/30/99. As of 9/30/99, the fund's one-year and
since-inception average annual total returns were 26.86% and 21.02%,
respectively for Select Shares. Without fee waivers and guarantees, the
one-year, and since-inception average annual total returns would have been
26.73% and 20.59%, respectively, for the Select Shares as of 9/30/99.
Also shown is the difference between the total returns of the Schwab 1000 Index
and the Schwab 1000 Fund, often referred to as the "tracking differential." (See
page 8 for a more detailed discussion).
(1) A portion of the fund's expenses was reduced during the reporting period.
Without such reductions, as of 10/31/99, the fund's one-year and
since-inception average annual returns would have been 25.21% and 22.98%.
(2) The required minimum initial investment in the Select Shares is $50,000.
17
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $50,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB 1000 FUND - SELECT SHARES S&P 500 INDEX SCHWAB 1000 INDEX
<S> <C> <C> <C>
5/97 $50,000 $50,000 $50,000
5/97 $51,040 $50,930 $51,064
6/97 $53,180 $53,212 $53,222
7/97 $57,490 $57,442 $57,518
8/97 $54,750 $54,225 $54,801
9/97 $57,685 $57,191 $57,746
10/97 $55,785 $55,281 $55,851
11/97 $58,150 $57,841 $58,233
12/97 $59,325 $58,836 $59,398
1/98 $59,725 $59,489 $59,855
2/98 $64,145 $63,778 $64,318
3/98 $67,405 $67,043 $67,648
4/98 $68,100 $67,720 $68,387
5/98 $66,625 $66,556 $66,893
6/98 $69,305 $69,258 $69,578
7/98 $68,345 $68,524 $68,606
8/98 $58,140 $58,629 $58,362
9/98 $61,915 $62,387 $62,179
10/98 $66,825 $67,459 $67,206
11/98 $71,000 $71,547 $71,400
12/98 $75,505 $75,668 $75,922
1/99 $78,385 $78,831 $78,805
2/99 $75,750 $76,379 $76,244
3/99 $78,795 $79,434 $79,282
4/99 $82,015 $82,509 $82,553
5/99 $80,120 $80,561 $80,671
6/99 $84,110 $85,033 $84,753
7/99 $81,450 $82,380 $82,052
8/99 $80,665 $81,968 $81,380
9/99 $78,545 $79,721 $78,960
10/99 $83,725 $84,767 $84,287
</TABLE>
The above graph compares the growth of a hypothetical $50,000 investment in the
Schwab 1000 Fund-Select Shares,-TM- made at its inception, with a similar
investment in the Schwab 1000 Index-Registered Trademark- and the S&P
500-Registered Trademark- Index.
THE INFORMATION PRESENTED IS HISTORICAL AND DOES NOT REPRESENT FUTURE RESULTS.
TOTAL RETURNS ASSUME REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS. PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE, SO AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. Indices are unmanaged and do not reflect advisory fees and other expenses
associated with an investment in the fund. Investors cannot invest in an index
directly.
ASSETS
<TABLE>
<S> <C>
- ------------------------------------------------------------------------
Total net assets as of 10/31/98 (000s) $1,040,551
- ------------------------------------------------------------------------
Total net assets as of 10/31/99 (000s) $2,213,585
- ------------------------------------------------------------------------
Percentage growth over reporting period 113%
- ------------------------------------------------------------------------
</TABLE>
18
<PAGE>
SCHWAB 1000 FUND-REGISTERED TRADEMARK-
PORTFOLIO SNAPSHOT
The Schwab 1000 Fund (the fund) invests primarily in common stocks of the Schwab
1000 Index,-Registered Trademark- an index created to represent the performance
of publicly traded common stocks of the 1,000 largest U.S. companies (excluding
investment companies). As of October 31, 1999, the aggregate market
capitalization of the Schwab 1000 Index represented approximately 87.3% of the
total value of the U.S. stock market, as represented by the Wilshire 5000
Index.* The information below and on the following page provides a snapshot of
the fund's characteristics as of 10/31/99, and is not indicative of its
composition after that date. The terms used below are defined beginning on page
46. A complete list of the securities in the fund's portfolio as of 10/31/99 is
provided in the Schedule of Investments later in this report.
FUND FACTS
<TABLE>
<CAPTION>
SCHWAB 1000 FUND- PEER GROUP
INVESTOR SHARES AVERAGE+
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Number of Issues 972 131
- ----------------------------------------------------------------------------------------------------------------------------
Median Market Cap ($ Mil) $53,745+ $45,601
- ----------------------------------------------------------------------------------------------------------------------------
Price/Earnings (P/E) Ratio 33.9+ 33.6
- ----------------------------------------------------------------------------------------------------------------------------
Price/Book (P/B) Ratio 8.5+ 8.0
- ----------------------------------------------------------------------------------------------------------------------------
12-Month Yield 0.68%+ 0.47%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 3% 75%
- ----------------------------------------------------------------------------------------------------------------------------
Three-Year Beta 1.0+ 0.95
- ----------------------------------------------------------------------------------------------------------------------------
Expense Ratio 0.46%** 1.34%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Source: Wilshire Associates.
** Reflects a voluntary reduction by the Investment Adviser and Schwab, which is
guaranteed through at least 2/29/00.
+ Source: Morningstar. This information is as of 10/31/99, and is for
illustrative purposes only. It is not intended to show, predict or guarantee
future composition of the fund. The peer group average is based on 2,173
large-cap funds as tracked by Morningstar.
19
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 10/31/99
<TABLE>
<S> <C>
Healthcare/Drugs and Medicine 10.5%
Business Machines and Software 12.4%
Telephone 8.9%
Electronics 8.5%
Banks 6.9%
Retail 6.4%
Miscellaneous Finance 6.4%
Producer Goods and Manufacturing 5.2%
Business Services 4.1%
Media 4.0%
Other 26.7%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
EQUITY INVESTMENT STYLE BOX(++)
AS OF 10/31/99
<TABLE>
<S> <C> <C> <C>
- --Style--
Value Blend Growth --Market Cap--
X Large
Medium
Small
</TABLE>
TOP 10 HOLDINGS
AS A PERCENTAGE OF FUND INVESTMENTS
<TABLE>
<S> <C>
- ---------------------------------------------
Microsoft Corp. 3.82%
- ---------------------------------------------
General Electric Co. 3.60%
- ---------------------------------------------
Intel Corp. 2.09%
- ---------------------------------------------
Wal-Mart Stores, Inc. 2.04%
- ---------------------------------------------
Cisco Systems, Inc. 1.94%
- ---------------------------------------------
- ---------------------------------------------
Lucent Technologies, Inc. 1.61%
- ---------------------------------------------
Merck & Co., Inc. 1.51%
- ---------------------------------------------
Citigroup, Inc. 1.48%
- ---------------------------------------------
Exxon Corp. 1.45%
- ---------------------------------------------
International Business Machines Corp. 1.44%
- ---------------------------------------------
</TABLE>
++ Source: Morningstar, Inc. The style box illustrates the composition of the
fund's portfolio as of 10/31/99. It is not indicative of its holdings after
that date, nor does it represent an exact assessment of risk or future
assessment or any type of future performance. Placement is based on the
fund's P/E and P/B ratios relative to the S&P 500-Registered Trademark-
Index, as well as the size of the companies in which it invests, or median
market capitalization.
20
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND-TM-
FUND PERFORMANCE
CUMULATIVE TOTAL RETURNS FOR THE PERIOD ENDED 10/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
(5/28/99)
<S> <C>
- -----------------------------------------------------------------
SCHWAB TOTAL STOCK MARKET INDEX FUND-INVESTOR
SHARES(1) 4.35%
- -----------------------------------------------------------------
Schwab Total Stock Market Index Fund-Select
Shares(1,2) 4.45%
- -----------------------------------------------------------------
Wilshire 5000 Index 4.47%
- -----------------------------------------------------------------
Index Tracking Differential-Investor Shares (0.12)%
- -----------------------------------------------------------------
Index Tracking Differential-Select Shares (0.02)%
- -----------------------------------------------------------------
</TABLE>
National Association of Securities Dealers (NASD) regulations require that we
additionally report performance data as of the most recent calendar quarter--in
this case, the quarter ended 9/30/99. As of 9/30/99, the cumulative total
returns since inception for the Investor Shares and Select Shares were (1.80)%
and (1.75)%, respectively.(1)
The index-tracking differential represents the difference between the total
returns of the Wilshire 5000 Total Market Index(3) and the Schwab Total Stock
Market Index Fund. The tracking differential arises due to several factors. For
example, unlike the index, the fund has operating expenses and incurs trading
costs when it buys or sells securities. The fund also may hold non-index
securities, including cash that can produce either higher or lower returns than
their index counterparts.
(1) A portion of the fund's expenses was reduced during the reporting period.
Without such reductions, as of 10/31/99, the cumulative total returns since
inception would have been 4.11% and 4.21%, respectively, for the Investor
Shares and the Select Shares. As of 9/30/99, the cumulative total returns
for the Investor Shares and Select Shares would have been (2.05)% and
(2.00)%, respectively.
(2) The required minimum initial investment in the Select Shares is $50,000
(3) Wilshire and Wilshire 5000 are registered service marks of Wilshire
Associates, Inc. The fund is not sponsored, endorsed, sold or promoted by
Wilshire Associates, and Wilshire Associates is not in any way affiliated
with the fund. Wilshire Associates makes no representation about the
advisability of investing in the fund or in any stock included in the
Wilshire 5000.
21
<PAGE>
TAX-SMART INVESTMENT STRATEGY
One of the most attractive features of the Schwab Total Stock Market Index Fund
is that it uses a strategy designed to maximize after-tax return potential. Like
other index funds, the fund generally will have lower portfolio turnover than
actively managed funds, because it won't have to actively trade stocks unless a
company joins or exits the index. In addition, the fund's managers attempt to
offset capital gains with losses whenever possible.
The Schwab Total Stock Market Index Fund has the potential to be even more tax
efficient than funds that track other indices. That's because the fund seeks to
track the Wilshire 5000 Index. And because that index essentially represents all
stocks in the U.S. market, the fund won't be forced to trade stocks that leave
the index due to fluctuations in their market capitalizations.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB TOTAL STOCK WILSHIRE 5000 INDEX
MARKET INDEX FUND--INVESTOR SHARES
<S> <C> <C>
06/01/99 $10,000 $10,000
06/30/99 $10,515 $10,518
07/31/99 $10,165 $10,180
08/31/99 $10,070 $10,086
09/30/99 $9,820 $9,822
10/31/99 $10,435 $10,447
</TABLE>
The above graph compares the growth of a hypothetical $10,000 investment in the
Schwab Total Stock Market Index Fund-Investor Shares, made at its inception,
with a similar investment in the Wilshire 5000 Index.
22
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $50,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB TOTAL STOCK WILSHIRE 5000 INDEX
MARKET INDEX FUND--SELECT SHARES
<S> <C> <C>
06/01/99 $50,000 $50,000
06/30/99 $52,600 $52,590
07/31/99 $50,850 $50,902
08/31/99 $50,350 $50,428
09/30/99 $49,125 $49,112
10/31/99 $52,225 $52,236
</TABLE>
The above graph compares the growth of a hypothetical $50,000 investment in the
Schwab Total Stock Market Index Fund-Select Shares, made at its inception, with
a similar investment in the Wilshire 5000 Index.
THE INFORMATION PRESENTED IS HISTORICAL AND DOES NOT REPRESENT FUTURE RESULTS.
TOTAL RETURNS ASSUME REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS. PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE, SO AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. Indices are unmanaged and do not reflect advisory fees and other expenses
associated with an investment in the fund. Investors cannot invest in an index
directly.
ASSETS
<TABLE>
<S> <C> <C>
SELECT
INVESTOR SHARES SHARES-REGISTERED TRADEMARK-
- -------------------------------------------------------------------------------------------------
Total net assets as of 10/31/99 (000s) $135,719 $149,131
- -------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND-TM-
PORTFOLIO SNAPSHOT
Schwab Total Stock Market Index Fund (the fund) invests in stocks that are
included in the Wilshire 5000 Index. The fund uses a "sampling" strategy, which
means it purchases a representative sample of stocks in the index, instead of
trying to add them all. The Wilshire 5000 Index, which was created in 1974, and
was initially composed of 5,000 stocks, now measures the performance of more
than 7,200 U.S.-headquartered companies that have readily available pricing
data.* The information below and on the following page provides a snapshot of
the fund's characteristics as of 10/31/99, and is not indicative of its
composition after that date. The terms used below are defined beginning on
page 46. A complete list of the securities in the fund's portfolio as of
10/31/99 is provided in the Schedule of Investments later in this report.
FUND FACTS
<TABLE>
<CAPTION>
SCHWAB TOTAL STOCK
MARKET INDEX FUND PEER GROUP
INVESTOR SHARES AVERAGE+
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Number of Issues 2,960 131
- ---------------------------------------------------------------------------------------------------------------
Median Market Cap ($ Mil) $ 731 $45,601
- ---------------------------------------------------------------------------------------------------------------
Price/Earnings (P/E) Ratio 31 33.6
- ---------------------------------------------------------------------------------------------------------------
Price/Book (P/B) Ratio 14.5 8.0
- ---------------------------------------------------------------------------------------------------------------
12-Month Yield N/A 0.47%
- ---------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 75%
- ---------------------------------------------------------------------------------------------------------------
Expense Ratio 0.40%** 1.34%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Source: Wilshire Associates.
** Reflects a reduction by the Investment Adviser and Schwab, which is
guaranteed through at least 2/28/01.
+ Source: Morningstar. This information is as of 10/31/99, and is for
illustrative purposes only. It is not intended to show, predict or guarantee
future composition of the fund. The peer group average is based on 2,173
large-cap funds as tracked by Morningstar.
24
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 10/31/99
<TABLE>
<S> <C>
Business Machines & Software 11.9%
Healthcare/Drugs and Medicine 9.7%
Electronics 8.1%
Telephone 7.8%
Banks 6.7%
Retail 6.2%
Miscellaneous Finance 6.0%
Business Services 5.8%
Producer Goods & Manufacturing 5.3%
Media 3.5%
Other 29.0%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
EQUITY INVESTMENT STYLE BOX(++)
AS OF 10/31/99
<TABLE>
<S> <C> <C> <C>
- --Style--
Value Blend Growth --Market Cap--
X Large
Medium
Small
</TABLE>
TOP 10 HOLDINGS
AS A PERCENTAGE OF FUND INVESTMENTS
<TABLE>
<S> <C>
- ---------------------------------------------
Microsoft Corp. 3.34%
- ---------------------------------------------
General Electric Co. 3.14%
- ---------------------------------------------
Intel Corp. 1.81%
- ---------------------------------------------
Wal-Mart Stores, Inc. 1.79%
- ---------------------------------------------
Cisco Systems Inc. 1.70%
- ---------------------------------------------
- ---------------------------------------------
Lucent Technologies, Inc. 1.40%
- ---------------------------------------------
Merck & Co., Inc. 1.32%
- ---------------------------------------------
Citigroup, Inc. 1.29%
- ---------------------------------------------
Exxon Corp. 1.27%
- ---------------------------------------------
International Business Machines Corp. 1.26%
- ---------------------------------------------
</TABLE>
++ Source: Morningstar, Inc. The style box illustrates the composition of the
fund's portfolio as of 10/31/99. It is not indicative of its holdings after
that date, nor does it represent an exact assessment of risk or future
assessment or any type of future performance. Placement is based on the
fund's P/E and P/B ratios relative to the S&P 500-Registered Trademark-
Index, as well as the size of the companies in which it invests, or median
market capitalization.
25
<PAGE>
SCHWAB SMALL-CAP INDEX FUND-REGISTERED TRADEMARK--INVESTOR SHARES
FUND PERFORMANCE
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR FIVE YEARS (12/3/93)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND-INVESTOR SHARES(1) 19.96% 13.36% 11.31%
- -----------------------------------------------------------------------------------------------------
Schwab Small-Cap Index-Registered Trademark- 22.91% 15.14% 12.95%
- -----------------------------------------------------------------------------------------------------
Index Tracking Differential-Investor Shares (2.95)% (1.78)% (1.64)%
- -----------------------------------------------------------------------------------------------------
Russell 2000-Registered Trademark- Index 14.87% 12.57% 10.81%
- -----------------------------------------------------------------------------------------------------
</TABLE>
National Association of Securities Dealers (NASD) regulations require that we
report performance data as of the most recent calendar quarter--in this case,
the quarter ended 9/30/99. As of 9/30/99, the fund's one-year, five-year and
since-inception average annual total returns were 23.36%, 12.87% and 11.13%,
respectively. Without fee waivers and guarantees, the one-year, five-year and
since-inception average annual total returns would have been, 22.96%, 12.46% and
10.68%, for the Investor Shares as of 9/30/99.
Also shown is the difference between the total returns of the Schwab Small-Cap
Index and the Schwab Small-Cap Index Fund, which is often referred to as the
"tracking differential." (See page 8 for a more detailed discussion).
TAX-SMART INVESTMENT STRATEGY
The Schwab Small-Cap Index Fund seeks to maximize its after-tax performance by
using a strategy that helps reduce capital gains distributions. This strategy is
designed to help investors keep more of what their money earns. The chart below
illustrates the effects of this strategy on the one-year and five-year
performance of the Schwab Small-Cap Index Fund-Investor Shares.
AVERAGE ANNUAL RETURNS: PRE TAX AND AFTER-TAX
<TABLE>
<CAPTION>
PERIODS ENDED OCTOBER 31, 1999
ONE YEAR FIVE YEARS
-------------------------------------- --------------------------------------
PRE TAX AFTER TAX(2) % LOST TO TAXES PRE TAX AFTER TAX(2) % LOST TO TAXES
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Schwab Small-Cap Index Fund-Investor
Shares(1) 19.96% 18.51% (7.26)% 13.36% 12.92% (3.29)%
- -----------------------------------------------------------------------------------------------------------------------------
Average Small-Cap Fund(3) 27.74% 26.61% (4.07)% 13.93% 11.60% (16.69)%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A portion of the fund's expenses was reduced during the reporting period.
Without such reductions, as of 10/31/99, the fund's one-year, five-year and
the since-inception average annual returns would have been 19.55%, 12.95%
and 10.86%, respectively.
(2) After-tax returns assume the maximum federal income tax rate of 39.60% on
dividends and 20% on capital gains distributions. Tax rates vary and may be
higher or lower than those shown. State and local taxes have not been
considered. After-tax return information is not applicable to shareholders
in tax-deferred accounts such as IRAs and 401ks. Past after-tax information
is not prediction of future tax efficiency. After-tax return information
does not reflect the tax effect of your own investment activities, such as a
decision to sell some or all of your fund shares, which may cause you to
incur additional capital gain taxes.
(3) Source: Morningstar, Inc. The small-cap fund category contains 819 funds
with one-year track records and 280 funds with five-year track records as of
10/31/99. These funds may or may not follow a tax-efficient strategy similar
to that followed by the Schwab Small-Cap Index Fund.
26
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB SMALL-CAP INDEX FUND - INVESTOR SHARES SCHWAB SMALL-CAP INDEX RUSSELL 2000 INDEX
<S> <C> <C> <C>
12/93 $10,000 $10,000 $10,000
12/93 $10,154 $10,234 $10,186
1/94 $10,394 $10,469 $10,505
2/94 $10,334 $10,430 $10,467
3/94 $9,783 $9,871 $9,915
4/94 $9,753 $9,847 $9,974
5/94 $9,613 $9,692 $9,861
6/94 $9,333 $9,419 $9,529
7/94 $9,493 $9,614 $9,685
8/94 $10,134 $10,249 $10,225
9/94 $10,094 $10,191 $10,190
10/94 $10,064 $10,149 $10,149
11/94 $9,663 $9,767 $9,739
12/94 $9,841 $10,000 $10,000
1/95 $9,730 $9,838 $9,874
2/95 $10,082 $10,229 $10,285
3/95 $10,334 $10,442 $10,461
4/95 $10,566 $10,671 $10,693
5/95 $10,717 $10,809 $10,877
6/95 $11,211 $11,356 $11,441
7/95 $11,866 $12,021 $12,100
8/95 $12,077 $12,270 $12,351
9/95 $12,309 $12,510 $12,572
10/95 $11,785 $11,910 $12,010
11/95 $12,329 $12,492 $12,514
12/95 $12,562 $12,782 $12,845
1/96 $12,491 $12,749 $12,831
2/96 $12,967 $13,261 $13,231
3/96 $13,170 $13,492 $13,505
4/96 $13,899 $14,206 $14,227
5/96 $14,384 $14,692 $14,788
6/96 $13,848 $14,222 $14,180
7/96 $12,643 $13,075 $12,942
8/96 $13,413 $13,904 $13,694
9/96 $14,010 $14,416 $14,230
10/96 $13,757 $14,169 $14,010
11/96 $14,344 $14,733 $14,588
12/96 $14,508 $15,007 $14,970
1/97 $14,895 $15,361 $15,269
2/97 $14,376 $14,986 $14,900
3/97 $13,654 $14,257 $14,196
4/97 $13,756 $14,299 $14,236
5/97 $15,383 $16,050 $15,821
6/97 $16,125 $16,880 $16,499
7/97 $17,213 $17,842 $17,267
8/97 $17,538 $18,243 $17,662
9/97 $18,850 $19,675 $18,955
10/97 $18,026 $18,816 $18,123
11/97 $17,843 $18,645 $18,005
12/97 $18,236 $19,035 $18,320
1/98 $17,787 $18,736 $18,031
2/98 $19,195 $20,285 $19,361
3/98 $20,042 $21,199 $20,159
4/98 $20,144 $21,344 $20,270
5/98 $18,930 $20,090 $19,177
6/98 $18,960 $20,146 $19,218
7/98 $17,471 $18,597 $17,661
8/98 $14,062 $15,011 $14,231
9/98 $14,991 $15,953 $15,345
10/98 $15,705 $16,709 $15,972
11/98 $16,532 $17,576 $16,809
12/98 $17,584 $18,719 $17,849
1/99 $17,617 $18,800 $18,086
2/99 $16,145 $17,229 $16,621
3/99 $16,372 $17,559 $16,881
4/99 $17,660 $19,165 $18,393
5/99 $17,974 $19,500 $18,662
6/99 $18,969 $20,778 $19,505
7/99 $18,872 $20,615 $18,971
8/99 $18,309 $20,033 $18,269
9/99 $18,493 $20,204 $18,272
10/99 $18,839 $20,537 $18,347
</TABLE>
The above graph compares the growth of a hypothetical $10,000 investment in the
Schwab Small-Cap Index Fund-Investor Shares, made at its inception, with similar
investments in the Schwab Small-Cap Index-Registered Trademark- and the Russell
2000-Registered Trademark- Index.
THE INFORMATION PRESENTED IS HISTORICAL AND DOES NOT REPRESENT FUTURE RESULTS.
TOTAL RETURNS ASSUME REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS. PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE, SO AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. Indices are unmanaged and do not reflect advisory fees and other expenses
associated with an investment in the fund. Investors cannot invest in an index
directly.
ASSETS
<TABLE>
<S> <C>
- ----------------------------------------------------------------------
Total net assets as of 10/31/98 (000s) $479,500
- ----------------------------------------------------------------------
Total net assets as of 10/31/99 (000s) $452,099
- ----------------------------------------------------------------------
Percentage change over reporting period (5.70)%
- ----------------------------------------------------------------------
</TABLE>
27
<PAGE>
SCHWAB SMALL-CAP INDEX FUND-REGISTERED TRADEMARK--SELECT SHARES-TM-
FUND PERFORMANCE
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR (5/19/97)
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
SCHWAB SMALL-CAP INDEX FUND-SELECT SHARES(1),(2) 20.14% 10.67%
- ----------------------------------------------------------------------------------------------------------
Schwab Small-Cap Index-Registered Trademark- 22.91% 12.57%
- ----------------------------------------------------------------------------------------------------------
Index Tracking Differential-Select Shares (2.77)% (1.90)%
- ----------------------------------------------------------------------------------------------------------
Russell 2000-Registered Trademark- Index 14.87% 7.91%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
National Association of Securities Dealers (NASD) regulations require that we
report performance data as of the most recent calendar quarter--in this case,
the quarter ended 9/30/99. As of 9/30/99, the fund's one-year and
since-inception average annual total returns were 23.55% and 10.21%,
respectively. Without fee waivers and guarantees, the one-year, and
since-inception average annual total returns would have been 23.17% and 9.71%,
respectively, for the Select Shares as of 9/30/99.
Also shown is the difference between the total returns of the Schwab Small-Cap
Index and the Schwab Small-Cap Index Fund, often referred to as the "tracking
differential." (See page 8 for a more detailed discussion).
(1) A portion of the fund's expenses was reduced during the reporting period.
Without such reductions, as of 10/31/99, the fund's one-year and
since-inception average annual returns would have been 19.74% and 10.18%,
respectively.
(2) The required minimum initial investment in the Select Shares is $50,000.
28
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $50,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB SMALL-CAP INDEX FUND - SELECT SHARES SCHWAB SMALL-CAP INDEX RUSSELL 2000 INDEX
<S> <C> <C> <C>
5/19/97 $50,000 $50,000 $50,000
5/31/97 $52,170 $52,242 $51,960
6/30/97 $54,690 $54,942 $54,189
7/31/97 $58,415 $58,075 $56,709
8/31/97 $59,485 $59,380 $58,008
9/30/97 $63,965 $64,039 $62,254
10/31/97 $61,205 $61,244 $59,521
11/30/97 $60,550 $60,687 $59,134
12/31/97 $61,920 $61,958 $60,169
1/31/98 $60,400 $60,983 $59,218
2/28/98 $65,175 $66,026 $63,588
3/31/98 $68,050 $69,002 $66,208
4/30/98 $68,430 $69,473 $66,572
5/31/98 $64,310 $65,391 $62,984
6/30/98 $64,415 $65,575 $63,116
7/31/98 $59,360 $60,531 $58,004
8/31/98 $47,790 $48,861 $46,740
9/30/98 $50,945 $51,924 $50,399
10/31/98 $53,365 $54,386 $52,456
11/30/98 $56,170 $57,207 $55,204
12/31/98 $59,775 $60,929 $58,621
1/31/99 $59,925 $61,193 $59,401
2/28/99 $54,925 $56,079 $54,590
3/31/99 $55,660 $57,152 $55,441
4/30/99 $60,070 $62,380 $60,409
5/31/99 $61,140 $63,470 $61,291
6/30/99 $64,555 $67,629 $64,061
7/31/99 $64,225 $67,099 $62,306
8/31/99 $62,315 $65,206 $60,000
9/30/99 $62,940 $65,762 $60,012
10/31/99 $64,115 $66,846 $60,258
</TABLE>
The above graph compares the growth of a hypothetical $50,000 investment in the
Schwab Small-Cap Index Fund-Select Shares, made at its inception, with a similar
investment in the Schwab Small-Cap Index-Registered Trademark- and the Russell
2000-Registered Trademark- Index.
THE INFORMATION PRESENTED IS HISTORICAL AND DOES NOT REPRESENT FUTURE RESULTS.
TOTAL RETURNS ASSUME REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS. PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE, SO AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. Indices are unmanaged and do not reflect advisory fees and other expenses
associated with an investment in the fund. Investors cannot invest in an index
directly.
ASSETS
<TABLE>
<S> <C>
- ----------------------------------------------------------------------
Total net assets as of 10/31/98 (000s) $149,756
- ----------------------------------------------------------------------
Total net assets as of 10/31/99 (000s) $446,918
- ----------------------------------------------------------------------
Percentage growth over reporting period 198%
- ----------------------------------------------------------------------
</TABLE>
29
<PAGE>
SCHWAB SMALL-CAP INDEX FUND-REGISTERED TRADEMARK-
PORTFOLIO SNAPSHOT
The Schwab Small-Cap Index Fund (the fund) invests primarily in common stocks of
the Schwab Small-Cap Index,-Registered Trademark- an index created to represent
the performance of common stocks of the second 1,000 largest U.S. companies,
ranked by market capitalization. As of October 31, 1999, the aggregate market
capitalization of stocks included in the index represented approximately 4.6% of
the total market value of all publicly traded U.S. companies, as represented by
the Wilshire 5000 Index.* The information below and on the following page
provides a snapshot of the fund's characteristics as of 10/31/99, and is not
indicative of its composition after that date. The terms used below are defined
beginning on page 46. A complete list of the securities in the fund's portfolio
as of 10/31/99 is provided in the Schedule of Investments later in this report.
FUND FACTS
<TABLE>
<CAPTION>
SCHWAB SMALL-CAP INDEX FUND- PEER GROUP
INVESTOR SHARES AVERAGE+
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Number of Issues 973 161
- ------------------------------------------------------------------------------------------------------------------------------
Median Market Cap ($ Mil) $758+ $822
- ------------------------------------------------------------------------------------------------------------------------------
Price/Earnings (P/E) Ratio 22.5+ 26.6
- ------------------------------------------------------------------------------------------------------------------------------
Price/Book (P/B) Ratio 3.9+ 5.2
- ------------------------------------------------------------------------------------------------------------------------------
12-Month Yield 0.30%+ 0.17%
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 41% 94%
- ------------------------------------------------------------------------------------------------------------------------------
Three-Year Beta 0.95+ 0.94
- ------------------------------------------------------------------------------------------------------------------------------
Expense Ratio 0.49%** 1.58%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Source: Wilshire Associates.
** Reflects a reduction by the Investment Adviser and Schwab, which is
guaranteed through at least 2/29/00.
+ Source: Morningstar. This information is as of 10/31/99, and is for
illustrative purposes only. It is not intended to show, predict or guarantee
future composition of the fund. The peer group average is based on 852
small-cap funds as tracked by Morningstar.
30
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 10/31/99
<TABLE>
<S> <C>
Other 32.0%
Business Services 12.9%
Electronics 9.1%
Business Machines & Software 8.0%
Healthcare/Drugs and Medicine 7.8%
Producer Goods & Manufacturing 7.1%
Banks 6.5%
Media 4.4%
Utitlities - Energy & Gas 4.3%
Telephone 4.0%
Miscellaneous Finance 3.9%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
EQUITY INVESTMENT STYLE BOX(++)
AS OF 10/31/99
<TABLE>
<S> <C> <C> <C>
- --Style--
Value Blend Growth -Market Cap-
Large
Medium
X Small
</TABLE>
TOP 10 HOLDINGS
AS A PERCENTAGE OF FUND INVESTMENTS
<TABLE>
<S> <C>
- ---------------------------------------------
RealNetworks, Inc. 1.11%
- ---------------------------------------------
BroadVision, Inc. 0.78%
- ---------------------------------------------
Medimmune, Inc. 0.71%
- ---------------------------------------------
PMC Sierra, Inc. 0.68%
- ---------------------------------------------
Omnipoint Corp. 0.62%
- ---------------------------------------------
- ---------------------------------------------
Nextlink Communications 0.61%
- ---------------------------------------------
Lycos, Inc. 0.58%
- ---------------------------------------------
Applied Micro Circuits Corp. 0.58%
- ---------------------------------------------
Network Solutions, Inc. 0.57%
- ---------------------------------------------
TV Guide, Inc. 0.57%
- ---------------------------------------------
</TABLE>
++ Source: Morningstar, Inc. The style box illustrates the composition of the
fund's portfolio as of 10/31/99. It is not indicative of its holdings after
that date, nor does it represent an exact assessment of risk or future
assessment or any type of future performance. Placement is based on the
fund's P/E and P/B ratios relative to the S&P 500-Registered Trademark-
Index, as well as the size of the companies in which it invests, or median
market capitalization.
31
<PAGE>
SCHWAB INTERNATIONAL INDEX FUND-REGISTERED TRADEMARK--INVESTOR SHARES
FUND PERFORMANCE
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR FIVE YEARS (9/9/93)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND-INVESTOR SHARES(1) 27.31% 11.74% 11.08%
- -----------------------------------------------------------------------------------------------------
Schwab International Index-Registered Trademark- 28.61% 12.33% 11.69%
- -----------------------------------------------------------------------------------------------------
Index Tracking Differential-Investor Shares (1.30)% (0.59)% (0.61)%
- -----------------------------------------------------------------------------------------------------
MSCI-EAFE-Registered Trademark- Index 23.03% 9.21% 9.15%
- -----------------------------------------------------------------------------------------------------
</TABLE>
National Association of Securities Dealers (NASD) regulations require that we
report performance data as of the most recent calendar quarter--in this case,
the quarter ended 9/30/99. As of 9/30/99, the fund's one-year, five-year and
since-inception average annual total returns were 32.82%, 11.39% and 10.29%,
respectively. Without fee waivers and guarantees, the one-year, five-year and
since-inception average annual total returns would have been 32.26%, 10.85% and
9.74%, respectively, for the Investor Shares as of 9/30/99.
Also shown is the difference between the total returns of the Schwab
International Index and the Schwab International Index Fund, which is often
referred to as the "tracking differential." (See page 8 for a more detailed
discussion).
TAX-SMART INVESTMENT STRATEGY
The Schwab International Index Fund seeks to maximize its after-tax performance
by using a strategy that helps reduce capital gains distributions. This strategy
is designed to help investors keep more of what their money earns. The chart
below illustrates the effects of this strategy on the one-year and five-year
performance of the Schwab International Index Fund-Investor Shares.
AVERAGE ANNUAL RETURNS: PRE TAX AND AFTER-TAX
<TABLE>
<CAPTION>
PERIODS ENDED OCTOBER 31, 1999
ONE YEAR FIVE YEARS
----------------------------------------------- -----------------------------------------------
PRE TAX AFTER TAX(2) % LOST TO TAXES PRE TAX AFTER TAX(2) % LOST TO TAXES
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Schwab International Index
Fund-Investor Shares(1) 27.31% 26.87% (1.61)% 11.74% 11.24% (4.26)%
- ---------------------------------------------------------------------------------------------------------------------------------
Average Foreign Fund(3) 27.55% 26.31% (4.50)% 10.00% 8.51% (14.92)%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A portion of the fund's expenses was reduced during the reporting period.
Without such reductions, as of 10/31/99, the fund's one-year, five-year and
the since-inception average annual returns would have been 26.77%, 11.19%
and 10.52%.
(2) After-tax returns assume the maximum federal income tax rate of 39.6% on
dividends and 20% on capital gains distributions. Tax rates vary and may be
higher or lower than shown. State and local taxes have not been considered.
After-tax return information is not applicable to shareholders in
tax-deferred accounts such as IRAs or 401ks. Past after-tax information is
not a prediction of future tax efficiency. After-tax return information does
not reflect the tax effect of your own investment activities, such as a
decision to sell some or all of your fund shares, which may cause you to
incur additional capital gain taxes.
(3) Source: Morningstar, Inc. The foreign fund category contains 632 funds with
one-year track record and 160 funds with five-year track records as of
10/31/99. These funds may or may not follow a tax-efficient strategy similar
to that followed by the Schwab International Index Fund.
32
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB INTERNATIONAL INDEX FUND - INVESTOR SHARES SCHWAB INTERNATIONAL INDEX MSCI - EAFE-REGISTERED TRADEMARK- INDEX
<S> <C> <C> <C>
9/93 $10,000 $10,000 $10,000
9/93 $9,770 $9,786 $9,749
10/93 $10,150 $10,167 $10,049
11/93 $9,420 $9,454 $9,171
12/93 $10,096 $10,137 $9,833
1/94 $10,769 $10,823 $10,664
2/94 $10,558 $10,623 $10,634
3/94 $10,156 $10,172 $10,176
4/94 $10,458 $10,544 $10,607
5/94 $10,407 $10,448 $10,547
6/94 $10,488 $10,508 $10,696
7/94 $10,649 $10,692 $10,798
8/94 $10,941 $10,999 $11,054
9/94 $10,559 $10,621 $10,706
10/94 $10,950 $11,026 $11,062
11/94 $10,428 $10,478 $10,530
12/94 $10,484 $10,564 $10,597
1/95 $10,108 $10,254 $10,190
2/95 $10,189 $10,282 $10,160
3/95 $10,759 $10,964 $10,794
4/95 $11,145 $11,346 $11,200
5/95 $11,176 $11,303 $11,067
6/95 $11,064 $11,168 $10,873
7/95 $11,623 $11,826 $11,550
8/95 $11,237 $11,384 $11,110
9/95 $11,470 $11,661 $11,327
10/95 $11,318 $11,461 $11,022
11/95 $11,562 $11,782 $11,329
12/95 $11,975 $12,238 $11,785
1/96 $12,006 $12,277 $11,834
2/96 $12,026 $12,300 $11,874
3/96 $12,232 $12,529 $12,126
4/96 $12,530 $12,826 $12,478
5/96 $12,396 $12,674 $12,249
6/96 $12,489 $12,761 $12,317
7/96 $12,139 $12,430 $11,958
8/96 $12,253 $12,538 $11,984
9/96 $12,592 $12,907 $12,303
10/96 $12,571 $12,863 $12,177
11/96 $13,136 $13,460 $12,662
12/96 $13,067 $13,341 $12,499
1/97 $12,640 $12,898 $12,061
2/97 $12,827 $13,114 $12,259
3/97 $12,932 $13,202 $12,303
4/97 $13,025 $13,344 $12,368
5/97 $13,984 $14,324 $13,174
6/97 $14,766 $15,160 $13,899
7/97 $15,214 $15,570 $14,125
8/97 $14,109 $14,447 $13,070
9/97 $15,078 $15,354 $13,801
10/97 $13,869 $14,110 $12,740
11/97 $13,859 $14,055 $12,610
12/97 $14,022 $14,254 $12,720
1/98 $14,538 $14,830 $13,301
2/98 $15,382 $15,727 $14,155
3/98 $15,782 $16,139 $14,591
4/98 $15,888 $16,248 $14,706
5/98 $15,888 $16,209 $14,634
6/98 $16,025 $16,315 $14,745
7/98 $16,067 $16,419 $14,894
8/98 $14,085 $14,350 $13,049
9/98 $13,632 $13,880 $12,648
10/98 $14,981 $15,335 $13,966
11/98 $15,751 $16,198 $14,681
12/98 $16,244 $16,729 $15,261
1/99 $16,190 $16,640 $15,216
2/99 $15,829 $16,311 $14,853
3/99 $16,541 $17,060 $15,473
4/99 $17,212 $17,794 $16,099
5/99 $16,371 $16,897 $15,270
6/99 $16,999 $17,586 $15,866
7/99 $17,616 $18,240 $16,337
8/99 $17,775 $18,410 $16,345
9/99 $18,105 $18,724 $16,510
10/99 $19,073 $19,722 $17,129
</TABLE>
The above graph compares the growth of a hypothetical $10,000 investment in the
Schwab International Index Fund-Investor Shares, made at its inception, with
similar investments in the Schwab International Index-Registered Trademark- and
the MSCI-EAFE-Registered Trademark- Index.
THE INFORMATION PRESENTED IS HISTORICAL AND DOES NOT REPRESENT FUTURE RESULTS.
TOTAL RETURNS ASSUME REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS. PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE, SO AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. Indices are unmanaged and do not reflect advisory fees and other expenses
associated with an investment in the fund. Investors cannot invest in an index
directly.
ASSETS
<TABLE>
<S> <C>
- ----------------------------------------------------------------------
Total net assets as of 10/31/98 (000s) $428,462
- ----------------------------------------------------------------------
Total net assets as of 10/31/99 (000s) $446,625
- ----------------------------------------------------------------------
Percentage change over reporting period 4.24%
- ----------------------------------------------------------------------
</TABLE>
33
<PAGE>
SCHWAB INTERNATIONAL INDEX FUND-REGISTERED TRADEMARK--SELECT SHARES-TM-
FUND PERFORMANCE
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR (5/19/97)
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
SCHWAB INTERNATIONAL INDEX FUND-SELECT SHARES(1),(2) 27.49% 13.07%
- ------------------------------------------------------------------------------------------------------
Schwab International Index-Registered Trademark- 28.61% 13.26%
- ------------------------------------------------------------------------------------------------------
Index Tracking Differential-Select Shares (1.12)% (0.19)%
- ------------------------------------------------------------------------------------------------------
MSCI-EAFE-Registered Trademark- Index 23.03% 10.62%
- ------------------------------------------------------------------------------------------------------
</TABLE>
National Association of Securities Dealers (NASD) regulations require that we
report performance data as of the most recent calendar quarter--in this case,
the quarter ended 9/30/99. As of 9/30/99, the fund's one-year and
since-inception average annual total returns were 32.91%, and 11.08%,
respectively. Without fee waivers and guarantees, the one-year and
since-inception average annual total returns would have been 32.37% and 10.27%,
respectively, for the Select Shares as of 9/30/99.
Also shown is the difference between the total returns of the Schwab
International Index and the Schwab International Index Fund, often referred to
as the "tracking differential." (See page 8 for a more detailed discussion).
(1) A portion of the fund's expenses was reduced during the reporting period.
Without such reductions, as of 10/31/99, the fund's one-year and
since-inception average annual returns would have been 26.96% and 12.26%.
(2) The required minimum initial investment in the Select Shares is $50,000.
34
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF A HYPOTHETICAL $50,000 INVESTMENT
<TABLE>
<CAPTION>
SCHWAB INTERNATIONAL INDEX FUND - SELECT SHARES SCHWAB INTERNATIONAL INDEX MSCI - EAFE-REGISTERED TRADEMARK- INDEX
<S> <C> <C> <C>
5/19/97 $50,000 $50,000 $50,000
5/31/97 $49,375 $49,283 $49,248
6/30/97 $52,170 $52,161 $51,961
7/31/97 $53,755 $53,571 $52,803
8/31/97 $49,815 $49,706 $48,859
9/30/97 $53,240 $52,827 $51,595
10/31/97 $49,005 $48,550 $47,627
11/30/97 $48,970 $48,360 $47,141
12/31/97 $49,580 $49,042 $47,551
1/31/98 $51,405 $51,027 $49,725
2/28/98 $54,385 $54,111 $52,917
3/31/98 $55,800 $55,529 $54,547
4/30/98 $56,175 $55,905 $54,978
5/31/98 $56,175 $55,770 $54,708
6/30/98 $56,655 $56,133 $55,124
7/31/98 $56,845 $56,493 $55,681
8/31/98 $49,840 $49,376 $48,782
9/30/98 $48,240 $47,757 $47,284
10/31/98 $53,005 $52,763 $52,211
11/30/98 $55,725 $55,732 $54,885
12/31/98 $57,490 $57,561 $57,053
1/31/99 $57,305 $57,252 $56,881
2/28/99 $56,025 $56,122 $55,528
3/31/99 $58,585 $58,699 $57,843
4/30/99 $60,955 $61,225 $60,186
5/31/99 $57,980 $58,137 $57,086
6/30/99 $60,200 $60,507 $59,313
7/31/99 $62,385 $62,757 $61,074
8/31/99 $62,950 $63,342 $61,105
9/30/99 $64,115 $64,425 $61,722
10/31/99 $67,575 $67,857 $64,036
</TABLE>
The above graph compares the growth of a hypothetical $50,000 investment in the
Schwab International Index Fund-Select Shares, made at its inception, with a
similar investment in the Schwab International Index-Registered Trademark- and
the MSCI-EAFE-Registered Trademark- Index.
THE INFORMATION PRESENTED IS HISTORICAL AND DOES NOT REPRESENT FUTURE RESULTS.
TOTAL RETURNS ASSUME REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS. PRINCIPAL VALUE AND INVESTMENT RETURNS WILL FLUCTUATE, SO AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. Indices are unmanaged and do not reflect advisory fees and other expenses
associated with an investment in the fund. Investors cannot invest in an index
directly.
ASSETS
<TABLE>
<S> <C>
- ----------------------------------------------------------------------
Total net assets as of 10/31/98 (000s) $ 93,560
- ----------------------------------------------------------------------
Total net assets as of 10/31/99 (000s) $448,880
- ----------------------------------------------------------------------
Percentage growth over reporting period 380%
- ----------------------------------------------------------------------
</TABLE>
35
<PAGE>
SCHWAB INTERNATIONAL INDEX FUND-REGISTERED TRADEMARK-
PORTFOLIO SNAPSHOT
The Schwab International Index Fund (the fund) invests primarily in common
stocks of the Schwab International Index,-Registered Trademark- an index created
to represent the performance of common stocks and other equity securities issued
by large, publicly traded companies from countries around the world with major
developed securities markets, excluding the United States. As of October 31,
1999, the aggregate market capitalization of stocks included in the index
represented approximately 43.6% of the total market value of all publicly traded
non-U.S. companies.* The information below and on the following page provides a
snapshot of the fund's characteristics as of 10/31/99, and is not indicative of
its composition after that date. The terms used below are defined beginning on
page 46. A complete list of the securities in the fund's portfolio as of
10/31/99 is provided in the Schedule of Investments later in this report.
FUND FACTS
<TABLE>
<CAPTION>
SCHWAB INTERNATIONAL INDEX FUND- PEER GROUP
INVESTOR SHARES AVERAGE++
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Number of Issues 374 163
- ---------------------------------------------------------------------------------------------------------------------------------
Median Market Cap ($ Mil) $33,399++ $16,886
- ---------------------------------------------------------------------------------------------------------------------------------
Price/Earnings (P/E) Ratio) 34.4++ 32.1
- ---------------------------------------------------------------------------------------------------------------------------------
Price/Book (P/B) Ratio 5.2++ 5.0
- ---------------------------------------------------------------------------------------------------------------------------------
12-Month Yield 0.75%++ 0.67%
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 5% 77%
- ---------------------------------------------------------------------------------------------------------------------------------
Three-Year Beta 0.66++ 0.68
- ---------------------------------------------------------------------------------------------------------------------------------
Expense Ratio 0.58%+ 1.71%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Source: Wilshire Associates.
+ Reflects a reduction by the Investment Adviser and Schwab, which is
guaranteed through at least 2/29/00.
++ Source: Morningstar. This information is as of 10/31/99, and is for
illustrative purposes only. It is not intended to show, predict or guarantee
future composition of the fund. The peer group average is based on 657
foreign stock funds as tracked by Morningstar.
36
<PAGE>
EQUITY HOLDINGS BY COUNTRY
AS OF 10/31/99
<TABLE>
<S> <C>
- -------------------------------------------
Japan 31.43%
- -------------------------------------------
United Kingdom 22.25%
- -------------------------------------------
France 8.42%
- -------------------------------------------
Germany 7.96%
- -------------------------------------------
Switzerland 6.09%
- -------------------------------------------
Netherlands 5.89%
- -------------------------------------------
Canada 3.51%
- -------------------------------------------
Italy 3.43%
- -------------------------------------------
Spain 2.53%
- -------------------------------------------
Sweden 2.39%
- -------------------------------------------
Hong Kong 1.74%
- -------------------------------------------
Australia 1.58%
- -------------------------------------------
United States 1.30%
- -------------------------------------------
Belgium 0.92%
- -------------------------------------------
Denmark 0.55%
- -------------------------------------------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
EQUITY INVESTMENT STYLE BOX(++)
AS OF 10/31/99
<TABLE>
<S> <C> <C> <C>
- --Style--
Value Blend Growth -Market Cap-
X Large
Medium
Small
</TABLE>
++ Source: Morningstar, Inc. The style box illustrates the composition of the
fund's portfolio as of 10/31/99. It is not indicative of its holdings after
that date, nor does it represent an exact assessment of risk or future
assessment or any type of future performance. Placement is based on the
fund's P/E and P/B ratios relative to the S&P 500-Registered Trademark-
Index, as well as the size of the companies in which it invests, or median
market capitalization.
TOP 10 HOLDINGS
AS A PERCENTAGE OF FUND INVESTMENTS
<TABLE>
<S> <C>
- ---------------------------------------------
NTT Mobile Communications Network,
Inc. 3.97%
- ---------------------------------------------
Nippon Telegraph & Telephone Corp. 2.45%
- ---------------------------------------------
BP Amoco PLC 2.36%
- ---------------------------------------------
Vodafone Group PLC 1.64%
- ---------------------------------------------
Toyota Motor Corp. 1.61%
- ---------------------------------------------
- ---------------------------------------------
Royal Dutch Petroleum Co. 1.61%
- ---------------------------------------------
British Telecommunications 1.46%
- ---------------------------------------------
Glaxo Wellcome PLC 1.34%
- ---------------------------------------------
HSBC Holdings PLC 1.29%
- ---------------------------------------------
Novartis AG 1.26%
- ---------------------------------------------
</TABLE>
37
<PAGE>
PORTFOLIO MANAGEMENT
THE PORTFOLIO MANAGEMENT TEAM
GERI HOM--vice president and senior portfolio manager, has primary
responsibility for the day-to-day management of the fund's portfolios. Geri
joined CSIM in March 1995 as portfolio manager and was promoted to her current
position in December 1996. She currently manages approximately $17 billion in
indexed equity mutual fund assets. Prior to joining CSIM, Geri was a principal
for Wells Fargo Nikko Investment Advisors and vice president and manager of the
Domestic Equity Portfolio Management Group for Wells Fargo Nikko.
LARRY MANO--portfolio manager, has day-to-day portfolio management
responsibilities for the Total Stock Market Index Fund. Prior to joining CSIM in
1998, he spent 20 years at Wilshire Associates, where he directed the
development of equity index investment products.
38
<PAGE>
FUND DISCUSSION
QUESTIONS TO THE
PORTFOLIO MANAGEMENT TEAM
SCHWAB S&P 500 FUND
Q. HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD?
A. As discussed in the MARKET OVERVIEW section of this report, large-cap
domestic equities, such as those in the S&P 500 Index, continued to be the
strongest performing major asset class. As the table below indicates, the fund
achieved strong total returns for the one year reporting period. All classes of
shares closely tracked the fund's benchmark, the S&P 500 Index, which achieved a
total return of 25.67% for the period. As the table below reveals, the fund also
out-performed the average U.S. large-cap fund on both a one-year and three-year
basis. The fund's out-performance was even greater on an after-tax basis, a
direct result of the fund's tax-efficient investment strategy.
<TABLE>
<CAPTION>
ONE YEAR RETURNS: THREE YEAR RETURNS:
-------------------------------------------------------------
BEFORE TAX AFTER TAX(2) BEFORE TAX AFTER TAX(2)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Investor Shares 25.20% 24.79% 25.89% 25.48%
- ------------------------------------------------------------------------------------------------------------------------
e.Shares 25.28% 24.85% 26.02% 25.57%
- ------------------------------------------------------------------------------------------------------------------------
Select Shares 25.42% 24.95% -- --
- ------------------------------------------------------------------------------------------------------------------------
Average Large-Cap Fund(1) 24.85% 22.97% 20.82% 18.18%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Q. WHAT STRATEGIES DOES THE FUND USE TO HELP INVESTORS ACHIEVE HIGHER AFTER-TAX
RETURNS?
A. Pre-tax total return is the most common measure used to compare mutual fund
performance. Because of different tax management policies, however, two funds
with identical pre-tax total returns may actually have significant differences
in their after-tax returns. Over the long-term, these after-tax return
differences can have a major impact on investors' fund balances held outside
retirement accounts.
As shown in the first question above, the Schwab S&P 500 Fund has been more "tax
efficient" than the average large-cap fund. Index funds can be tax efficient
because they are designed to have lower portfolio turnover rates, and hence,
lower realization of capital gains than most actively managed funds.
Q. HOW HAVE THE INDUSTRY SECTORS IN THE S&P 500 INDEX CHANGED OVER THE LAST FIVE
YEARS?
A. The graph below shows the top ten industry sectors of the S&P 500 Index as of
10/31/99 as well as the historical weightings of these sectors since 10/31/95.
Since 1995, the Index has become moderately more concentrated, with the top ten
sectors currently representing approximately 73% of the total versus
approximately 62% in 1995. The sectors with the largest gains during the period
were Business Machines (from 5.7% to 13.4%) and Electronics (from 5.1% to 8.0%).
The sectors with the largest declines during the period
(1) Source: Morningstar, Inc. Large-Cap Fund Category contains 1,006 funds with
one year track records and 1,342 funds with three year track records, both
as of 10/31/99. These funds may or may not follow a tax-efficiency strategy
similar to that followed by the Schwab S&P 500 Fund.
(2) After-tax returns assume the maximum federal income tax rate of 39.6% on
dividends and 20% on capital gains distributions. Tax rates vary and may be
higher or lower than shown. State and local taxes have not been considered.
After-tax accounts return information is not applicable to shareholders in
tax-deferred accounts such as IRAs or 401ks. Past after-tax information is
not a prediction of future tax efficiency. After-tax return information does
not reflect the tax effect of your own investment activities, such as a
decision to sell some or all of your fund shares, which may cause you to
incur additional capital gain taxes.
39
<PAGE>
FUND DISCUSSION (continued)
were Food and Agriculture (from 6.5% to 3.8%) and International Oil (from 6.6%
to 4.2%).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 -REGISTERED TRADEMARK- INDEX REPORT % OF TOTAL INDEX
BUSINESS DRUGS AND TELEPHONE ELECTRONICS BANKS RETAIL MISCELLANEOUS PRODUCER INTERNATIONAL FOOD AND
MACHINES MEDICINE FINANCE GOODS OIL AGRICULTURE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10-95 5.68 10.02 8.85 5.10 6.24 4.58 2.98 5.16 6.56 6.50
10-96 6.40 10.40 6.29 5.20 7.86 4.84 3.36 5.73 6.65 6.49
10-97 7.59 10.98 6.37 5.90 8.15 4.92 4.15 5.26 6.37 5.88
10-98 9.15 12.43 7.80 6.17 7.09 5.88 5.22 4.95 5.40 5.46
10-99 13.35 10.89 8.28 7.98 6.46 6.41 5.80 5.41 4.24 3.80
Source: Wilshire Associates
</TABLE>
SCHWAB 1000 FUND
Q. HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD?
A. As discussed in the MARKET OVERVIEW section of this report, large-cap
domestic equities, such as those in the Schwab 1000 Fund, continued to be the
strongest performing major asset class. As the table to the right indicates, the
fund achieved strong total returns for the one-year reporting period. Both
classes of shares closely tracked the fund's benchmark, the Schwab 1000 Index,
which achieved a total return of 25.42% for the period. As the table below
reveals, the fund also out-performed the average U.S. large-cap fund on both a
one-year and five-year basis. The fund's out-performance was even greater on an
after-tax basis, a direct result of the fund's tax-efficient investment
strategy.
<TABLE>
<CAPTION>
ONE YEAR RETURNS: FIVE YEAR RETURNS:
-------------------------------------------------------------
BEFORE TAX AFTER TAX(2) BEFORE TAX AFTER TAX(2)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Investor Shares 25.12% 24.74% 24.66% 24.12%
- ------------------------------------------------------------------------------------------------------------------------
Select Shares 25.29% 24.84% -- --
- ------------------------------------------------------------------------------------------------------------------------
Average Large-Cap Fund(3) 24.85% 22.97% 21.37% 18.71%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Q. HOW DID THE PERFORMANCE OF THE SCHWAB 1000 INDEX COMPARE TO THE S&P 500
INDEX?
A. As shown in the table below, the Schwab 1000 Index return was slightly less
than the S&P 500 Index return for the one year reporting period. On an
inception-to-date basis, the performances of the two indices are almost
identical. As we have discussed in previous reports, these two indices are
constructed differently, and although not currently the case, the performance
will differ from time to time--primarily because of the Schwab 1000 Index's
mid-cap exposure.
<TABLE>
<CAPTION>
INCEPTION
(4/2/91) TO
DATE AVERAGE
ONE YEAR ANNUAL RETURN
<S> <C> <C>
- ---------------------------------------------------------------------------------------
Schwab 1000 Index 25.42% 18.65%
- ---------------------------------------------------------------------------------------
S&P 500 Index 25.67% 18.81%
- ---------------------------------------------------------------------------------------
</TABLE>
Q. WHAT STRATEGIES DOES THE FUND USE TO HELP INVESTORS ACHIEVE HIGHER AFTER-TAX
RETURNS?
A. Pre-tax total return is the most common measure used to compare mutual fund
performance. Because of different tax management policies, however, two funds
with identical pre-tax total returns may actually have significant differences
in their after-tax returns.
(3) Source: Morningstar, Inc. Large-Cap Fund Category contains 1,006 funds with
one year track records and 601 funds with five year track records, both as
of 10/31/99. These funds may or may not follow a tax-efficiency strategy
similar to that followed by the Schwab 1000 Fund.
40
<PAGE>
Over the long-term, these after-tax return differences can have a major impact
on investors' fund balances held outside of retirement accounts.
As shown in the first question above, the Schwab 1000 Fund has been more "tax
efficient" than the average large-cap fund. Since its inception in 1991, the
fund has not paid a capital gains distribution. Although no assurance can be
provided that this record will be maintained in the future, it is indicative of
the fund's tax-efficient management strategy. Index funds can be tax efficient
because they are designed to have lower portfolio turnover rates, and hence,
lower realization of capital gains than most actively-managed funds.
Furthermore, when the fund's Investment Adviser does trade stocks, an attempt is
made to offset capital gains with capital losses to minimize the potential for
capital gain distributions to shareholders.
Q. HOW HAVE THE INDUSTRY SECTORS IN THE SCHWAB 1000 INDEX CHANGED OVER THE LAST
FOUR YEARS?
A. The graph below shows the top ten industry sectors of the Schwab1000 Index as
of 10/31/99 as well as the historical weightings of these sectors since
10/31/96. Since 1996, the Index has become more concentrated, with the top ten
sectors currently representing approximately 73% of the total versus
approximately 57% in 1996. The sectors with the largest gains during the period
were Business Machines (from 6.1% to 12.6%) and Electronics (from 5.5% to 8.0%).
The sectors with the largest declines during the period were Food and
Agriculture (from 5.8% to 3.4%) and Energy and Utilities (from 5.0% to 3.2%).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SCHWAB 1000 INDEX REPORT % OF TOTAL INDEX
BUSINESS DRUGS AND TELEPHONE ELECTRONICS BANKS MISCELLANEOUS RETAIL PRODUCER BUSINESS MEDIA
MACHINES MEDICINE FINANCE GOODS SERVICES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10-96 6.14 10.19 6.06 5.50 8.16 4.44 5.09 5.39 3.19 2.94
10-97 7.31 10.36 5.85 6.31 8.79 5.21 5.15 5.04 3.16 3.23
10-98 8.75 12.08 7.30 6.15 7.68 6.05 6.08 4.74 3.03 3.76
10-99 12.55 10.46 8.44 8.04 6.70 6.64 6.43 5.19 4.73 4.07
Source: Wilshire Associates
</TABLE>
TOTAL STOCK MARKET INDEX FUND
Q. HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD?
A. Typically, you will receive semiannual reports for the six months ended April
30 and annual reports for the year ended October 31 of each year. Because the
Total Stock Market Index Fund had its inception date on June 1, 1999, this
report addresses only the five-month period ended October 31, 1999.
Additionally, because the advisers seek to manage the fund with an emphasis on
tax efficiency, we plan to report the fund's return as well as the category
average return on both a pre-tax and after-tax basis. Given the
shorter-than-normal reporting period, the after-tax return comparison cannot be
calculated and would have little value at this point.
As discussed in the MARKET OVERVIEW section of this report, large-cap domestic
equities, which make up a majority of the Wilshire 5000 Index, continued to be
the strongest performing major asset class. As the table below indicates, the
fund achieved favorable total
41
<PAGE>
FUND DISCUSSION (continued)
returns for the five-month period since its inception. Both classes of shares
closely tracked the fund's benchmark, the Wilshire 5000 Index, which achieved a
total return of 4.47% for the five-month period ended October 31, 1999. As the
table below reveals, the fund also out-performed the average U.S. Large-Cap Fund
for the same period
<TABLE>
<CAPTION>
INCEPTION
(6/1/99) TO
INCEPTION THROUGH DATE FOR PERIOD
9/30/99 ENDED 10/31/99
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
Investor Shares (1.80)% 4.35%
- ------------------------------------------------------------------------------------------------
Select Shares (1.75)% 4.45%
- ------------------------------------------------------------------------------------------------
Average Large-Cap Fund(4) (1.43)% 3.94%
- ------------------------------------------------------------------------------------------------
</TABLE>
Q. WHAT STRATEGIES DOES THE FUND USE TO HELP INVESTORS ACHIEVE HIGHER AFTER-TAX
RETURNS?
A. Pre-tax total return is the most common measure used to compare mutual fund
performance. Because of different tax management policies, however, two funds
with identical pre-tax total returns may actually have significant differences
in their after-tax returns. Over the long-term, these after-tax return
differences can have a major impact on investors' fund balances held outside
retirement accounts.
Index funds can be tax efficient because they are designed to have lower
portfolio turnover rates, and hence, lower realization of capital gains than
most actively managed funds. Furthermore, when the fund's Investment Adviser
does trade stocks, an attempt is made to offset capital gains with capital
losses to minimize the potential for capital gain distributions to shareholders.
Q. HOW HAVE THE INDUSTRY SECTORS IN THE WILSHIRE 5000 INDEX CHANGED OVER THE
LAST FIVE YEARS?
A. The graph below shows the top ten industry sectors of the Wilshire 5000 Index
as of 10/31/99 as well as the historical weightings of these sectors since
10/31/95. Since 1995, the Index has become more concentrated, with the top ten
sectors currently representing approximately 72% of the total versus
approximately 58% in 1995. The sectors with the largest gains during the period
were Business Machines (from 5.5% to 11.4%) and Business Services (from 3.9% to
6.9%). The sectors with the largest declines during the period were Food and
Agriculture (from 5.3% to 3.2%) and Chemicals (from 3.1% to 1.8%).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WILSHIRE 5000 INDEX INDUSTRY SECTORS % OF TOTAL INDEX
BUSINESS DRUGS AND ELECTRONICS TELEPHONE MISCELLANEOUS BUSINESS BANKS RETAIL PRODUCER MEDIA
MACHINES MEDICINE FINANCE SERVICES GOODS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10-95 5.53 9.78 6.51 7.21 5.15 3.89 7.00 4.44 4.91 3.48
10-96 5.65 9.85 6.32 5.33 5.56 4.70 7.90 4.75 5.30 2.78
10-97 6.56 10.03 6.58 5.25 6.44 4.40 8.46 4.79 5.00 3.12
10-98 7.96 11.43 6.28 6.82 6.96 4.52 7.48 5.65 4.69 3.58
10-99 11.37 9.81 8.19 7.64 7.03 6.89 6.43 5.95 5.02 3.95
Source: Wilshire Associates
</TABLE>
(4) Source: Morningstar, Inc. Large Cap Fund Category contains 2,173 funds.
These funds may or may not follow a tax-efficiency strategy similar to that
followed by the Schwab Total Market Index Fund.
42
<PAGE>
SCHWAB SMALL-CAP INDEX FUND-REGISTERED TRADEMARK-
Q. HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD?
A. Although domestic small-cap equities did not achieve returns as strong as the
large-caps, as discussed in the MARKET OVERVIEW section of this report,
small-cap domestic equities experienced a strong rebound from their negative
performance in the previous annual reporting period. Both classes of shares
tracked the fund's benchmark, the Schwab Small-Cap Index, which realized a
22.91% total return for the one-year period. As the table below reveals, the
fund underperformed the average small-cap fund for the year ended October 31,
1999. For the five-year period, the fund underperformed on a pre-tax basis and
outperformed on an after-tax basis as compared to the average small-cap fund.
<TABLE>
<CAPTION>
ONE YEAR RETURNS: FIVE YEAR RETURNS:
-------------------------------------------------------------
BEFORE TAX AFTER TAX(2) BEFORE TAX AFTER TAX(2)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Investor Shares 19.96% 18.51% 13.36% 12.92%
- ------------------------------------------------------------------------------------------------------------------------
Select Shares 20.14% 18.64% -- --
- ------------------------------------------------------------------------------------------------------------------------
Average Small-Cap Fund(5) 27.74% 26.61% 13.93% 11.60%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Q. HOW DID THE PERFORMANCE OF THE SCHWAB SMALL-CAP INDEX COMPARE TO THE RUSSELL
2000 INDEX?
A. As shown in the table below, the Schwab Small-Cap Index outperformed the
Russell 2000 Index for the one year reporting period. On an inception-to-date
basis, the Schwab Small-Cap Index has marginally outperformed the Russell 2000
Index. As we have discussed in previous reports, these two indices are
constructed differently, and it is not unusual that the performance should
differ somewhat during various time periods.
<TABLE>
<CAPTION>
INCEPTION
(12/3/93) TO
DATE AVERAGE
ONE YEAR ANNUAL RETURN
<S> <C> <C>
- ---------------------------------------------------------------------------------------
Schwab Small-Cap Index 22.91% 12.95%
- ---------------------------------------------------------------------------------------
Russell 2000 Index 14.87% 10.81%
- ---------------------------------------------------------------------------------------
</TABLE>
Q. WHAT STRATEGIES DOES THE FUND USE TO HELP INVESTORS ACHIEVE HIGHER AFTER-TAX
RETURNS?
A. Pre-tax total return is the most common measure used to compare mutual fund
performance. However, because of different tax management policies, two funds
with identical pre-tax total returns may actually have significant differences
in their after-tax returns. Over the long-term, these after-tax return
differences can have a major impact on investors' fund balances held outside
retirement accounts.
As shown in the first question above, the Schwab Small-Cap Index Fund has been
more "tax efficient" than the average small-cap fund. Index funds can be tax
efficient because they are designed to have lower portfolio turnover rates, and
hence, lower realization of capital gains than most actively managed funds.
Q. HOW HAVE THE INDUSTRY SECTORS IN THE SCHWAB SMALL-CAP INDEX CHANGED OVER THE
LAST FOUR YEARS?
A. The graph below shows the top ten industry sectors of the Schwab Small-Cap
Index as of 10/31/99 as well as the historical weightings of these sectors since
10/31/96. Since 1996, the concentration of the top ten sectors has increased
moderately, however there have been some significant shifts in the components.
The
(5) Source: Morningstar, Inc. Small-Cap Fund Category contains 819 funds with
one year track records and 280 funds with five-year track records, both as
of 10/31/99. These funds may or may not follow a tax-efficiency strategy
similar to that followed by the Schwab S&P 500 Fund.
43
<PAGE>
FUND DISCUSSION (continued)
sectors with the largest gains during the period were Business Services (from
9.7% to 16.6%) and Electronics (from 7.3% to 12.1%). The sectors with the
largest declines during the period were Drugs and Medicine (from 9.6% to 6.6%)
and Business Machines (from 4.1% to 1.7%). Keep in mind, that a sector decline
in a small-cap index does not necessarily mean that the sector is declining in
terms of its role in the entire economy--it could be (and in this case was) the
case that the companies in these sectors are actually growing to the point where
they move to a large-cap index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SCHWAB SMALL-CAP INDEX REPORT % OF TOTAL INDEX
BUSINESS ELECTRONICS PRODUCER DRUGS AND MISCELLANEOUS BANKS ENERGY AND INSURANCE MEDIA TELEPHONE
SERVICES GOODS MEDICINE FINANCE UTILITIES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10-96 9.70 7.26 6.96 9.59 6.31 7.31 4.16 5.67 2.62 1.85
10-97 10.66 6.84 6.06 9.39 5.42 7.31 4.18 5.38 3.49 1.86
10-98 14.29 7.89 6.49 8.67 4.26 5.25 4.75 4.86 3.96 2.16
10-99 16.61 12.10 7.53 6.64 5.90 5.80 4.30 3.53 3.18 2.92
Source: Wilshire Associates
</TABLE>
SCHWAB INTERNATIONAL INDEX FUND
Q. HOW DID THE FUND PERFORM DURING THE
REPORTING PERIOD?
A. International equities in general, and the Schwab International Index Fund in
particular, achieved strong returns during the one-year reporting period. Both
classes of shares closely tracked the fund's benchmark, the Schwab International
Index, which realized a 28.61% total return for the period. As the table below
reveals, the fund's performance was slightly less than the average foreign stock
fund for the year ended October 31, 1999. The fund's after-tax performance was
slightly better than the average foreign stock fund. On a five-year basis, the
fund out-performed the average foreign stock fund by 1.74%. The fund's
out-performance was even greater on an after-tax basis, a direct result of the
Fund's tax-efficient investment strategy.
The strong US Dollar had a moderately negative impact on Index returns during
the one-year reporting period. Expressed in local currency terms, the one-year
performance of the Schwab International Index was 31.51%, approximately 2.90%
greater than the dollar-denominated return, reflecting the relative weakness of
foreign currencies during the reporting period.
<TABLE>
<CAPTION>
ONE YEAR RETURNS: FIVE YEAR RETURNS:
-------------------------------------------------------------
BEFORE TAX AFTER TAX(2) BEFORE TAX AFTER TAX(2)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Investor Shares 27.31% 26.87% 11.74% 11.24%
- ------------------------------------------------------------------------------------------------------------------------
Select Shares 27.49% 26.98% -- --
- ------------------------------------------------------------------------------------------------------------------------
Average Foreign Stock Fund(6) 27.55% 26.31% 10.00% 8.51%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Q. HOW DID THE PERFORMANCE OF THE SCHWAB INTERNATIONAL INDEX COMPARE TO THE
MSCI-EAFE-REGISTERED TRADEMARK- INDEX?
A. As shown in the table below, the Schwab International Index significantly
out-performed the MSCI-EAFE Index for the one-year reporting period. The
principle reason for the differential was related to market capitalization, or
average company size, particularly in Japan. The Schwab International Index has
a higher average market capitalization than the MSCI-EAFE Index. Like domestic
equities over the
(6) Source: Morningstar, Inc. Foreign Stock Fund Category contains 632 funds
with one year track records and 160 funds with five year track records, both
as of 10/31/99. These funds may or may not follow a tax-efficiency strategy
similar to that followed by the Schwab International Index Fund.
44
<PAGE>
reporting period, international large-cap stocks significantly outperformed
international small-cap stocks, and the Schwab International Index benefitted
from this outperformance. On an inception-to-date basis, the Schwab
International Index continues to outperform the MSCI-EAFE Index. As we have
discussed in previous reports, these two indices are constructed differently,
and it is not unusual that the performance should differ somewhat during various
time periods.
<TABLE>
<CAPTION>
INCEPTION (9/3/93)
TO DATE AVERAGE
ONE YEAR ANNUAL RETURN
<S> <C> <C>
- -------------------------------------------------------------------------------------------
Schwab International Index 28.61% 11.69%
- -------------------------------------------------------------------------------------------
MSCI-EAFE Index 23.03% 9.15%
- -------------------------------------------------------------------------------------------
</TABLE>
Q. WHAT STRATEGIES DOES THE FUND USE TO HELP INVESTORS ACHIEVE HIGHER AFTER-TAX
RETURNS?
A. Pre-tax total return is the most common measure used to compare mutual fund
performance. However, because of different tax management policies, two funds
with identical pre-tax total returns may actually have significant differences
in their after-tax returns. Over the long-term, these after-tax return
differences can have a major impact on investors' fund balances held outside
retirement accounts.
As shown in the first question above, the Schwab International Index Fund has
been more "tax efficient" than the average foreign fund. Index funds can be tax
efficient because they seek to have lower portfolio turnover rates, and hence,
lower realization of capital gains than most actively managed funds.
Furthermore, when the fund's Investment Adviser does trade stocks, an attempt is
made to offset capital gains with capital losses to minimize the potential for
capital gain distributions to shareholders.
Q. HOW HAVE THE COUNTRY WEIGHTINGS IN THE SCHWAB INTERNATIONAL INDEX CHANGED
OVER THE LAST FOUR YEARS?
A. The graph below shows the top seven countries by their percent weighting in
the Schwab International Index as of 10/31/99 as well as the historical
weightings of these countries since 10/31/96. Compared to 1996, the changes have
been fairly minor. However there were significant shifts within the period,
particularly in the Japan weighting, which had dropped significantly at the
beginning of the period and rebounded by the end of the period. The United
Kingdom and France experienced moderate increases over the four-year period.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SCHWAB INTERNATIONAL INDEX FUND REPORT % OF TOTAL INDEX
JAPAN UNITED KINGDOM FRANCE GERMANY SWITZERLAND NETHERLANDS CANADA ALL OTHERS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10-96 32.79 21.50 6.79 7.86 6.73 6.00 3.35 14.98
10-97 29.90 23.33 6.37 7.87 7.49 6.66 3.65 14.73
10-98 20.66 25.81 8.66 9.68 9.05 6.99 2.87 16.28
10-99 31.90 22.55 8.41 7.82 6.12 6.11 3.62 13.48
Source: Wilshire Associates
</TABLE>
45
<PAGE>
GLOSSARY
ASSET ALLOCATION--The division of holdings among different types of assets, such
as domestic stocks, international stocks, bonds and cashequivalent securities.
BETA--A measure of a stock's volatility relative to the overall stock market.
The beta of the S&P 500-Registered Trademark- Index is 1. Any investment that is
more volatile than the market as a whole has a beta value higher than 1. If the
beta is less than 1, the investment is considered to be less volatile than the
market.
CAPITAL GAIN (LOSS)--When a stock is sold for a profit, the difference between
the net sales price and its net purchase price, or cost basis, is a capital
gain. If a stock is sold below cost, the difference is a capital loss.
EARNINGS GROWTH RATE--The average annual rate of growth in earnings over the
past five years for the stocks in a fund's portfolio.
EARNINGS PER SHARE (EPS)--The net income (or earnings) of a company for the past
12 months divided by the current number of shares outstanding.
EXPENSE RATIO--Amount, expressed as a percentage of total investment, that
shareholders pay annually for mutual fund operating expenses and management
fees.
MARKET CAPITALIZATION--The dollar value of a company or the amount someone would
pay to buy the company today. It is calculated by multiplying the total number
of outstanding shares by the current price per share. Median market cap is the
midpoint of a fund's total market capitalization, weighted by the portion of
assets invested in each holding. As a result, half of the fund's holdings will
have market caps above the median, and the rest below it.
NET ASSET VALUE (NAV)--The market value of a fund share.
PRICE/BOOK (P/B) RATIO--Compares a stock's market value with the value of total
assets minus intangible assets and total liabilities (the book value). It is
determined by dividing the current price of the stock by common stockholder
equity per share. In evaluating stocks, comparing P/B ratios often works well in
situations where price/earnings ratios do not, because the P/B ratio is stable
over time and is always a positive number. P/B ratios are best used for
comparisons within an industry rather than between industries, as certain
industries will usually contain stocks that have all high or all low P/B ratios.
For mutual funds the P/B ratio is the weighted average of all the stocks' P/B
ratios in the portfolio.
PRICE/EARNINGS (P/E) RATIO--The ratio of a company's stock price to its earnings
per share over the past year. For mutual funds the P/E ratio is the weighted
average of all the stocks' P/E ratios in the mutual fund's portfolio. The P/E is
an indicator of market expectations about a company's prospects. Typically, the
higher the P/E, the greater the expectations for a company's future growth.
Because earnings are volatile and sometimes "negative," however, the P/E has its
limitations and may fail as a measure for a significant number of stocks at any
given time.
RETURN ON EQUITY--The average annual rate of return generated by the companies a
fund holds during the past five years for each dollar of shareholders' equity
(net income divided by shareholders' equity).
STOCK--A share of ownership, or equity, in a corporation.
46
<PAGE>
TOTAL RETURN--The sum of dividends, plus capital gains (or losses).
TURNOVER RATE--An indication of a fund's trading activity. Funds with higher
turnover rates typically incur higher transaction costs and are more likely to
distribute capital gains, which are taxable to investors.
YIELD--The income generated by an investment, expressed as a percentage of its
price.
47
<PAGE>
SCHWAB S&P 500 FUND
SCHEDULE OF INVESTMENTS
October 31, 1999
NUMBER VALUE
OF SHARES (000S)
--------- -------
- ------------------------------------------------------------
COMMON STOCK -- 100.0%
- ------------------------------------------------------------
AEROSPACE / DEFENSE -- 1.1%
- ------------------------------------------------------------
Boeing Co. 633,054 $ 29,160
General Dynamics Corp. 130,362 7,227
Lockheed Martin Corp. 253,510 5,070
Northrop Grumman Corp. 47,339 2,598
Raytheon Co., Class B 220,194 6,413
Rockwell International Corp. 124,436 6,027
Textron, Inc. 96,245 7,429
United Technologies Corp. 316,884 19,171
---------
83,095
---------
- ------------------------------------------------------------
AIR TRANSPORTATION -- 0.4%
- ------------------------------------------------------------
AMR Corp.+ 96,084 6,101
Delta Air Lines, Inc. 89,106 4,851
FDX Corp.+ 191,988 8,267
Southwest Airlines Co. 323,518 5,439
U.S. Airways Group, Inc.+ 49,690 1,391
---------
26,049
---------
- ------------------------------------------------------------
ALCOHOLIC BEVERAGES -- 0.6%
- ------------------------------------------------------------
Adolph Coors Co., Class B 23,077 1,281
Anheuser-Busch Cos., Inc. 306,827 22,034
Brown-Forman Corp., Class B 42,444 2,865
Seagram Co. Ltd. 287,575 14,199
---------
40,379
---------
- ------------------------------------------------------------
APPAREL -- 0.2%
- ------------------------------------------------------------
Liz Claiborne, Inc. 40,646 1,626
Nike, Inc., Class B 181,403 10,238
Reebok International Ltd.+ 35,818 351
Russell Corp. 16,476 250
VF Corp. 75,762 2,278
---------
14,743
---------
- ------------------------------------------------------------
AUTOMOTIVE PRODUCTS / MOTOR VEHICLES-- 1.5%
- ------------------------------------------------------------
B.F. Goodrich Co. 68,613 1,625
Cooper Tire & Rubber Co. 44,764 753
Cummins Engine Co., Inc. 29,880 1,515
Dana Corp. 107,996 3,193
Danaher Corp. 90,300 4,363
Delphi Automotive Systems
Corp. 359,480 5,909
Eaton Corp. 47,961 3,609
Fleetwood Enterprises, Inc. 23,175 505
Ford Motor Co. 791,695 43,444
General Motors Corp. 422,423 29,675
Genuine Parts Co. 111,876 2,916
Number Value
of Shares (000s)
--------- ---------
Goodyear Tire & Rubber Co. 101,026 $ 4,174
Navistar International Corp.+ 46,753 1,949
TRW, Inc. 80,457 3,450
---------
107,080
---------
- ------------------------------------------------------------
BANKS -- 6.7%
- ------------------------------------------------------------
AmSouth Bancorp. 251,250 6,470
Bank of America Corp. 1,129,499 72,711
Bank of New York Co., Inc. 476,586 19,957
Bank One Corp. 768,624 28,871
BB&T Corp. 203,972 7,419
Chase Manhattan Corp. 545,370 47,652
Comerica, Inc. 101,830 6,053
Fifth Third Bancorp. 199,183 14,702
First Union Corp. 630,621 26,920
Firstar Corp. 638,591 18,759
Fleet Boston Corp. 601,520 26,241
Golden West Financial Corp. 37,019 4,137
Huntington Bancshares, Inc. 151,710 4,494
J.P. Morgan & Co., Inc. 117,074 15,322
KeyCorp, Inc. 287,508 8,032
Mellon Financial Corp. 333,252 12,309
National City Corp. 402,100 11,862
Northern Trust Corp. 71,500 6,904
PNC Bank Corp. 197,741 11,790
Regions Financial Corp. 144,500 4,344
Republic New York Corp. 69,630 4,400
SouthTrust Corp. 109,700 4,388
State Street Corp. 106,035 8,072
Summit Bancorp. 116,300 4,027
SunTrust Banks, Inc. 209,147 15,307
Synovus Financial Corp. 182,047 3,903
U.S. Bancorp. 481,481 17,845
Union Planters Corp. 97,100 4,321
Wachovia Corp. 132,726 11,448
Washington Mutual, Inc. 379,256 13,630
Wells Fargo & Co. 1,078,806 51,648
---------
493,938
---------
- ------------------------------------------------------------
BUSINESS MACHINES & SOFTWARE-- 13.1%
- ------------------------------------------------------------
3Com Corp.+ 237,520 6,888
Adaptec, Inc.+ 66,100 2,974
Adobe Systems, Inc. 88,104 6,162
Apple Computer, Inc.+ 103,866 8,322
Autodesk, Inc. 43,000 806
BMC Software, Inc.+ 158,400 10,167
Cabletron Systems, Inc.+ 114,329 1,894
Ceridian Corp.+ 88,320 1,938
48
<PAGE>
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Cisco Systems, Inc.+ 2,126,890 $ 157,390
Compaq Computer Corp. 1,104,594 20,987
Computer Associates
International, Inc. 348,390 19,684
Compuware Corp.+ 234,800 6,530
Comverse Technology, Inc.+ 46,000 5,221
Dell Computer Corp.+ 1,656,628 66,472
Gateway, Inc.+ 203,200 13,424
Hewlett-Packard Co. 659,773 48,864
Honeywell, Inc. 86,166 9,085
International Business
Machines Corp. 1,183,404 116,417
Lexmark International Group,
Inc., Class A+ 84,100 6,565
Microsoft Corp.+ 3,335,512 308,743
Network Appliance, Inc.+ 52,000 3,848
Novell, Inc.+ 220,829 4,430
Oracle Systems Corp.+ 938,895 44,656
Parametric Technology Corp.+ 175,832 3,352
PeopleSoft, Inc.+ 162,300 2,434
Pitney Bowes, Inc. 174,502 7,951
Seagate Technology, Inc.+ 150,811 4,439
Silicon Graphics, Inc.+ 115,870 898
Sun Microsystems, Inc.+ 508,142 53,768
Unisys Corp.+ 201,315 4,882
Xerox Corp. 429,674 12,031
----------
961,222
----------
- ------------------------------------------------------------
BUSINESS SERVICES -- 3.1%
- ------------------------------------------------------------
Allied Waste Industries,
Inc.+ 117,900 1,238
America Online, Inc.+ 722,500 93,699
Automatic Data Processing,
Inc. 400,424 19,295
Cendant Corp.+ 464,495 7,664
Computer Sciences Corp.+ 111,822 7,681
Deluxe Corp. 52,372 1,480
Ecolab, Inc. 87,470 2,958
Equifax, Inc. 93,115 2,514
First Data Corp. 276,527 12,634
H&R Block, Inc. 63,617 2,708
Interpublic Group of
Companies, Inc. 182,520 7,415
Laidlaw, Inc. 202,287 1,239
National Service Industries,
Inc. 30,694 990
Omnicom Group, Inc. 118,600 10,437
Paychex, Inc. 163,150 6,424
R.R. Donnelley & Sons Co. 82,206 1,993
Tyco International Ltd. 1,092,560 43,634
Waste Management, Inc. 397,526 7,305
----------
231,308
----------
NUMBER VALUE
OF SHARES (000S)
--------- --------
- ------------------------------------------------------------
CHEMICAL -- 1.7%
- ------------------------------------------------------------
Air Products & Chemicals,
Inc. 152,358 $ 4,190
Dow Chemical Co. 142,576 16,860
E. I. du Pont de Nemours
& Co. 713,254 45,960
Eastman Chemical Co. 53,764 2,073
Great Lakes Chemical Corp. 42,225 1,499
Hercules, Inc. 72,157 1,736
Minnesota Mining &
Manufacturing Co. 261,768 24,884
PPG Industries, Inc. 112,775 6,837
Praxair, Inc. 105,430 4,929
Rohm & Haas Co. 140,550 5,376
Sigma-Aldrich Corp. 66,709 1,901
Union Carbide Corp. 87,060 5,311
W.R. Grace & Co.+ 44,752 668
----------
122,224
----------
- ------------------------------------------------------------
CONSTRUCTION -- 0.3%
- ------------------------------------------------------------
Armstrong World Industries,
Inc. 29,685 1,109
Centex Corp. 38,922 1,044
Crane Co. 39,069 798
Fluor Corp. 53,275 2,124
Kaufman & Broad Home Corp. 27,481 551
Masco Corp. 285,190 8,698
Owens Corning 41,211 845
Pulte Corp. 30,488 614
Sherwin-Williams Co. 106,861 2,391
The Stanley Works 58,386 1,620
Vulcan Materials Co. 63,300 2,615
----------
22,409
----------
- ------------------------------------------------------------
CONSUMER - DURABLE -- 0.3%
- ------------------------------------------------------------
Black & Decker Corp. 53,697 2,309
Fortune Brands, Inc. 112,758 3,996
Leggett & Platt, Inc. 127,500 2,829
Maytag Corp. 59,956 2,402
Newell Rubbermaid, Inc. 184,833 6,400
Whirlpool Corp. 51,556 3,593
----------
21,529
----------
- ------------------------------------------------------------
CONSUMER - NONDURABLE -- 0.7%
- ------------------------------------------------------------
American Greetings Corp.,
Class A 41,157 1,065
Darden Restaurants, Inc. 81,120 1,546
Hasbro, Inc. 119,997 2,475
Jostens, Inc. 18,082 382
Mattel, Inc. 277,207 3,708
McDonald's Corp. 887,974 36,629
49
<PAGE>
SCHWAB S&P 500 FUND
SCHEDULE OF INVESTMENTS (continued)
OCTOBER 31, 1999
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Tricon Global Restaurants,
Inc.+ 100,050 $ 4,021
Wendy's International, Inc. 83,575 1,995
----------
51,821
----------
- ------------------------------------------------------------
CONTAINERS -- 0.1%
- ------------------------------------------------------------
Ball Corp. 19,263 777
Bemis Co., Inc. 30,311 1,059
Crown Cork & Seal Co., Inc. 76,268 1,826
Owens-Illinois, Inc.+ 94,993 2,274
Sealed Air Corp.+ 54,226 3,003
----------
8,939
----------
- ------------------------------------------------------------
ELECTRONICS -- 8.1%
- ------------------------------------------------------------
ADC Telecommunications, Inc.+ 96,900 4,621
Advanced Micro Devices, Inc.+ 88,294 1,749
Analog Devices, Inc.+ 111,400 5,918
Andrew Corp.+ 46,788 602
Applied Materials, Inc.+ 242,962 21,821
Electronic Data Systems Corp. 320,100 18,726
EMC Corp.+ 666,637 48,664
Emerson Electric Co. 285,226 17,131
General Instrument Corp.+ 112,908 6,076
Harris Corp. 49,166 1,103
Intel Corp. 2,163,724 167,553
KLA-Tencor Corp.+ 57,775 4,575
LSI Logic Corp.+ 97,497 5,186
Lucent Technologies, Inc. 2,005,635 128,862
Micron Technology, Inc.+ 162,440 11,584
Motorola, Inc. 396,844 38,667
National Semiconductor Corp.+ 112,737 3,375
Niagara Mohawk Holdings,
Inc.+ 124,602 1,978
PE Corp-PE Biosystems Group 64,782 4,203
PerkinElmer, Inc. 35,296 1,441
QUALCOMM, Inc.+ 105,300 23,456
Scientific-Atlanta, Inc. 49,262 2,820
Solectron Corp.+ 178,900 13,462
Tektronix, Inc. 36,305 1,225
Tellabs, Inc.+ 259,456 16,411
Texas Instruments, Inc. 511,502 45,907
Thermo Electron Corp.+ 103,614 1,399
Thomas & Betts Corp. 39,315 1,764
----------
600,279
----------
- ------------------------------------------------------------
ENERGY - RAW MATERIALS -- 0.9%
- ------------------------------------------------------------
Anadarko Petroleum Corp. 79,850 2,460
Apache Corp. 74,789 2,917
Baker Hughes, Inc. 211,008 5,895
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Burlington Resources, Inc. 113,155 $ 3,946
Constellation Energy Group 96,308 2,955
Halliburton Co. 285,929 10,776
Helmerich & Payne, Inc. 33,504 798
McDermott International, Inc. 40,216 729
Occidental Petroleum Corp. 225,892 5,153
ONEOK, Inc. 22,365 653
Rowan Companies, Inc.+ 47,281 736
Schlumberger Ltd. 354,934 21,496
Sempra Energy 159,111 3,252
Sunoco, Inc. 61,352 1,480
Union Pacific Resources
Group, Inc. 164,762 2,389
----------
65,635
----------
- ------------------------------------------------------------
FOOD & AGRICULTURE -- 4.0%
- ------------------------------------------------------------
Archer-Daniels Midland Co. 396,242 4,879
Bestfoods, Inc. 181,400 10,657
Campbell Soup Co. 286,827 12,907
Coca-Cola Co. 1,615,682 95,325
Coca-Cola Enterprises, Inc. 274,600 7,019
ConAgra, Inc. 319,988 8,340
General Mills, Inc. 102,334 8,922
H.J. Heinz Co. 230,638 11,013
Hershey Foods Corp. 92,398 4,666
Kellogg Co. 260,762 10,382
Monsanto Co. 411,265 15,834
PepsiCo, Inc. 953,397 33,071
Quaker Oats Co. 87,687 6,138
Ralston-Ralston Purina Group 209,069 6,573
Sara Lee Corp. 585,538 15,846
SYSCO Corp. 218,428 8,396
Unilever NV 374,532 24,977
Wm. Wrigley Jr. Co. 76,443 6,111
----------
291,056
----------
- ------------------------------------------------------------
GOLD -- 0.1%
- ------------------------------------------------------------
Barrick Gold Corp. 248,979 4,559
Homestake Mining Co. 158,807 1,330
Newmont Mining Corp. 106,969 2,347
Placer Dome, Inc. 213,700 2,591
----------
10,827
----------
- ------------------------------------------------------------
HEALTHCARE / DRUGS & MEDICINE-- 10.9%
- ------------------------------------------------------------
Abbott Laboratories 995,914 40,210
Allergan, Inc. 44,085 4,734
ALZA Corp.+ 65,078 2,786
American Home Products Corp. 856,810 44,768
50
<PAGE>
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Amgen, Inc.+ 333,508 $ 26,597
Bausch & Lomb, Inc. 35,816 1,934
Baxter International, Inc. 189,284 12,280
Becton, Dickinson & Co. 160,210 4,065
Biomet, Inc. 70,832 2,134
Boston Scientific Corp.+ 269,512 5,424
Bristol-Myers Squibb Co. 1,295,064 99,477
C.R. Bard, Inc. 31,120 1,679
Cardinal Health, Inc. 176,690 7,620
Columbia / HCA Healthcare
Corp. 375,216 9,052
Eli Lilly & Co. 713,224 49,123
Guidant Corp. 195,620 9,659
HealthSouth Corp.+ 255,609 1,470
Humana, Inc.+ 95,742 658
IMS Health, Inc. 203,786 5,910
Johnson & Johnson 876,280 91,790
Mallinckrodt, Inc. 50,553 1,716
Manor Care, Inc.+ 77,433 1,220
McKesson HBOC, Inc. 183,420 3,680
Medtronic, Inc. 770,554 26,680
Merck & Co., Inc. 1,530,046 121,734
Pfizer, Inc. 2,531,200 99,982
Pharmacia & Upjohn, Inc. 327,961 17,689
Schering-Plough Corp. 959,562 47,498
Service Corp. International 168,926 1,615
Shared Medical Systems Corp. 17,152 647
St. Jude Medical, Inc.+ 56,392 1,544
Tenet Healthcare Corp.+ 201,433 3,915
United Healthcare Corp. 116,392 6,016
Warner-Lambert Co. 558,901 44,607
Watson Pharmaceuticals, Inc.+ 64,300 2,042
Wellpoint Health Networks,
Inc.+ 45,400 2,633
----------
804,588
----------
- ------------------------------------------------------------
HOUSEHOLD PRODUCTS -- 2.1%
- ------------------------------------------------------------
Alberto-Culver Co., Class B 32,017 754
Avon Products, Inc. 170,154 5,487
Clorox Co. 156,032 6,388
Colgate-Palmolive Co. 378,036 22,871
Gillette Co. 712,638 25,789
International Flavors &
Fragrances, Inc. 68,628 2,625
Procter & Gamble Co. 870,922 91,338
Tupperware Corp. 36,678 727
----------
155,979
----------
Number Value
of Shares (000s)
--------- ---------
- ------------------------------------------------------------
INSURANCE -- 3.2%
- ------------------------------------------------------------
Aetna, Inc. 96,758 $ 4,862
AFLAC, Inc. 173,400 8,865
Allstate Corp. 517,418 14,876
American General Corp. 163,622 12,139
American International
Group, Inc. 1,014,310 104,411
Aon Corp. 169,048 6,001
Chubb Corp. 114,460 6,281
CIGNA Corp. 130,465 9,752
Cincinnati Financial Corp. 104,145 3,730
Conseco, Inc. 212,302 5,162
Hartford Financial Services
Group, Inc. 147,392 7,637
Jefferson-Pilot Corp. 69,922 5,249
Lincoln National Corp. 126,826 5,850
Marsh & McLennan
Companies, Inc. 171,178 13,534
MBIA, Inc. 69,186 3,948
MGIC Investment Corp. 74,438 4,448
Progressive Corp. 50,151 4,642
SAFECO Corp. 85,791 2,359
St. Paul Companies, Inc. 144,316 4,618
Torchmark Corp. 85,789 2,676
UnumProvident Corp. 155,828 5,133
----------
236,173
----------
- ------------------------------------------------------------
MEDIA -- 3.0%
- ------------------------------------------------------------
CBS Corp.+ 464,375 22,667
Clear Channel
Communications, Inc.+ 221,610 17,812
Comcast Corp., Class A 485,758 20,463
Dow Jones & Co., Inc. 57,250 3,521
Gannett Co., Inc. 184,092 14,198
Harcourt General, Inc. 50,048 1,927
King World Productions, Inc.+ 51,354 1,990
Knight-Ridder, Inc. 51,883 3,295
McGraw-Hill Companies, Inc. 128,064 7,636
Mediaone Group+ 395,367 28,096
Meredith Corp. 37,112 1,324
New York Times Co., Class A 112,100 4,512
Time Warner, Inc. 845,340 58,910
Times Mirror Co., Series A 45,800 3,303
Tribune Co. 156,312 9,379
Viacom, Inc., Class B+ 451,474 20,203
----------
219,236
----------
51
<PAGE>
SCHWAB S&P 500 FUND
SCHEDULE OF INVESTMENTS (continued)
OCTOBER 31, 1999
Number Value
of Shares (000s)
--------- ----------
- ------------------------------------------------------------
MISCELLANEOUS FINANCE -- 5.6%
- ------------------------------------------------------------
American Express Co. 293,179 $ 45,150
Associates First Capital Corp. 477,802 17,440
Bear Stearns Companies, Inc. 75,525 3,219
Capital One Financial Corp. 134,350 7,121
Charles Schwab Corp. 538,558 20,970
Citigroup, Inc. 2,208,656 119,544
Countrywide Credit
Industries, Inc. 71,424 2,424
Dun & Bradstreet Corp. 107,156 3,148
Fannie Mae 666,817 47,177
Franklin Resources, Inc. 161,000 5,635
Freddie Mac 453,152 24,499
Household International, Inc. 318,208 14,200
Lehman Brothers Holdings,
Inc. 79,700 5,873
MBNA Corp. 519,620 14,354
Merrill Lynch & Co., Inc. 239,492 18,800
Morgan Stanley Dean Witter
Discover & Co. 371,136 40,941
Paine Webber Group, Inc. 98,000 3,993
Providian Financial Corp. 93,094 10,147
SLM Holding Corp. 109,400 5,354
T. Rowe Price Associates, Inc. 78,900 2,801
----------
412,790
----------
- ------------------------------------------------------------
NON-FERROUS METALS -- 0.4%
- ------------------------------------------------------------
Alcan Aluminum Ltd. 150,174 4,946
Alcoa, Inc. 240,626 14,618
Asarco, Inc. 29,188 861
Engelhard Corp. 86,701 1,528
Freeport-McMoRan Copper &
Gold, Inc., Class B 112,215 1,873
Inco Ltd. 127,949 2,591
Phelps Dodge Corp. 59,154 3,335
Reynolds Metals Co. 44,554 2,693
----------
32,445
----------
- ------------------------------------------------------------
OIL - DOMESTIC -- 0.8%
- ------------------------------------------------------------
Amerada Hess Corp. 61,492 3,528
Ashland, Inc. 51,856 1,711
Atlantic Richfield Co. 213,370 19,883
Conoco Inc., Class B 407,400 11,051
Kerr-McGee Corp. 55,073 2,960
Phillips Petroleum Co. 162,650 7,563
Tosco Corp. 98,100 2,483
Unocal Corp. 163,916 5,655
USX-Marathon Group 199,302 5,805
----------
60,639
----------
NUMBER VALUE
OF SHARES (000S)
--------- ----------
- ------------------------------------------------------------
OIL - INTERNATIONAL -- 4.2%
- ------------------------------------------------------------
Chevron Corp. 430,168 $ 39,280
Exxon Corp. 1,586,969 117,535
Mobil Corp. 509,942 49,209
Royal Dutch Petroleum Co. -
Sponsored ADR 1,402,480 84,061
Texaco, Inc. 360,154 22,104
----------
312,189
----------
- ------------------------------------------------------------
OPTICAL & PHOTO -- 0.2%
- ------------------------------------------------------------
Eastman Kodak Co. 208,381 14,365
Polaroid Corp. 27,095 605
----------
14,970
----------
- ------------------------------------------------------------
PAPER & FOREST PRODUCTS-- 0.9%
- ------------------------------------------------------------
Boise Cascade Corp. 42,316 1,508
Champion International Corp. 63,800 3,688
Fort James Corp. 143,695 3,781
Georgia-Pacific Group 110,782 4,397
International Paper Co. 268,081 14,108
Kimberly-Clark Corp. 345,013 21,779
Louisiana-Pacific Corp. 67,328 854
Mead Corp. 65,719 2,366
Potlatch Corp. 18,560 783
Temple Inland, Inc. 34,119 1,983
Westvaco Corp. 65,813 1,954
Weyerhaeuser Co. 129,117 7,707
Willamette Industries, Inc. 75,732 3,148
----------
68,056
----------
- ------------------------------------------------------------
PRODUCER GOODS & MANUFACTURING-- 5.4%
- ------------------------------------------------------------
AlliedSignal, Inc. 356,082 20,274
Avery Dennison Corp. 78,815 4,926
Briggs & Stratton Corp. 15,153 886
Case Corp. 51,156 2,711
Caterpillar, Inc. 230,486 12,734
Cooper Industries, Inc. 66,255 2,853
Corning, Inc. 158,282 12,445
Deere & Co. 152,927 5,544
Dover Corp. 136,565 5,813
FMC Corp.+ 20,778 845
Foster Wheeler Corp. 16,285 183
General Electric Co. (b) 2,142,740 290,475
Illinois Tool Works, Inc. 161,621 11,839
Ingersoll-Rand Co. 105,897 5,533
ITT Industries, Inc. 57,647 1,971
Johnson Controls, Inc. 57,375 3,486
Milacron, Inc. 31,183 513
52
<PAGE>
NUMBER VALUE
OF SHARES (000S)
--------- ---------
Millipore Corp. 28,991 $ 924
NACCO Industries, Inc.,
Class A 6,117 284
Pall Corp. 76,566 1,680
Parker-Hannifin Corp. 69,133 3,167
Snap-On, Inc. 45,178 1,372
Springs Industries, Inc. 7,642 304
Tenneco, Inc.+ 109,956 1,759
The Timken Co. 43,032 772
W.W. Grainger, Inc. 60,508 2,564
----------
395,857
----------
- ------------------------------------------------------------
RAILROAD & SHIPPING -- 0.5%
- ------------------------------------------------------------
Burlington Northern
Santa Fe Corp. 300,075 9,565
CSX Corp. 141,755 5,812
Kansas City Southern
Industries, Inc. 68,800 3,264
Norfolk Southern Corp. 249,988 6,109
Union Pacific Corp. 161,516 9,005
----------
33,755
----------
- ------------------------------------------------------------
RETAIL -- 6.3%
- ------------------------------------------------------------
Albertson's, Inc. 272,637 9,900
AutoZone, Inc.+ 95,715 2,542
Bed, Bath & Beyond, Inc.+ 89,300 2,975
Best Buy Co., Inc.+ 132,800 7,379
Circuit City Stores, Inc. 129,612 5,533
Consolidated Stores Corp.+ 73,000 1,337
Costco Wholesale Corp.+ 149,144 11,978
CVS Corp. 259,518 11,273
Dayton Hudson Corp. 286,510 18,516
Dillards, Inc., Class A 66,633 1,258
Dollar General Corp. 148,406 3,914
Federated Department
Stores, Inc.+ 141,437 6,038
Gap, Inc. 563,802 20,931
Great Atlantic & Pacific
Tea Co., Inc. 20,280 579
Home Depot, Inc. 967,150 73,020
IKON Office Solutions 87,577 602
J.C. Penney Co., Inc. 170,920 4,337
Kmart Corp.+ 315,217 3,172
Kohl's Corp.+ 104,100 7,788
Kroger Co.+ 537,562 11,188
Limited, Inc. 138,467 5,694
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Longs Drug Stores, Inc. 25,282 $ 689
Lowe's Companies, Inc. 250,026 13,751
May Department Stores Co. 222,279 7,710
Nordstrom, Inc. 87,122 2,173
Office Depot, Inc.+ 246,300 3,063
Pep Boys-Manny, Moe, & Jack 33,632 420
Rite Aid Corp. 162,814 1,425
Safeway, Inc.+ 337,600 11,922
Sears, Roebuck & Co. 244,618 6,895
Staples, Inc.+ 301,250 6,684
SUPERVALU, Inc. 94,054 1,975
Tandy Corp. 123,642 7,782
TJX Companies, Inc. 203,982 5,533
Toys 'R' Us, Inc.+ 167,696 2,369
Wal-Mart Stores, Inc. 2,911,862 165,066
Walgreen Co. 657,556 16,562
Winn-Dixie Stores, Inc. 96,411 2,609
----------
466,582
----------
- ------------------------------------------------------------
STEEL -- 0.1%
- ------------------------------------------------------------
Allegheny Teledyne, Inc. 117,503 1,785
Bethlehem Steel Corp.+ 68,935 478
Nucor Corp. 59,384 3,081
USX-U.S. Steel Group, Inc. 61,779 1,579
Worthington Industries, Inc. 57,402 954
----------
7,877
----------
- ------------------------------------------------------------
TELEPHONE -- 9.3%
- ------------------------------------------------------------
Alltel Corp. 197,890 16,474
AT&T Corp. 2,090,993 97,754
Bell Atlantic Corp. 1,014,296 65,866
BellSouth Corp. 1,231,892 55,435
CenturyTel, Inc. 96,450 3,900
Global Crossing Ltd.+ 502,355 17,394
GTE Corp. 640,048 48,004
MCI WorldCom, Inc.+ 1,224,936 105,115
Nextel Communications, Inc.,
Class A+ 218,250 18,810
Nortel Networks Corp. 865,140 53,585
SBC Communications, Inc. 2,232,628 113,724
Sprint Corp. (FON Group) 566,098 42,068
Sprint Corp. (PCS Group)+ 285,449 23,674
US WEST, Inc. 327,412 19,993
----------
681,796
----------
53
<PAGE>
SCHWAB S&P 500 FUND
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
NUMBER VALUE
OF SHARES (000S)
--------- ----------
- ------------------------------------------------------------
TOBACCO -- 0.7%
- ------------------------------------------------------------
Loew's Corp. 68,040 $ 4,822
Nabisco Group Holdings Corp. 213,300 2,733
Philip Morris Companies,
Inc. 1,558,762 39,261
UST, Inc. 114,684 3,175
----------
49,991
----------
- ------------------------------------------------------------
TRAVEL & RECREATION -- 0.9%
- ------------------------------------------------------------
Brunswick Corp. 61,407 1,389
Carnival Corp. 399,200 17,764
Harrah's Entertainment, Inc.+ 86,711 2,509
Hilton Hotels Corp. 168,072 1,555
Marriott International, Inc.,
Class A 162,632 5,479
Mirage Resorts, Inc.+ 132,374 1,928
Walt Disney Co.+ 1,341,530 35,383
----------
66,007
----------
- ------------------------------------------------------------
TRUCKING & FREIGHT -- 0.0%
- ------------------------------------------------------------
PACCAR, Inc. 48,963 2,307
Ryder Systems, Inc. 44,062 942
----------
3,249
----------
- ------------------------------------------------------------
UTILITIES-ELECTRIC & GAS -- 2.6%
- ------------------------------------------------------------
AES Corp.+ 138,600 7,822
Ameren Corp. 92,013 3,479
American Electric Power Co.,
Inc. 127,895 4,412
Carolina Power & Light Co. 105,216 3,630
Central & South West Corp. 139,943 3,105
Cinergy Corp. 106,129 2,998
CMS Energy Corp. 80,100 2,954
Coastal Corp. 137,842 5,807
Columbia Energy Group 52,774 3,430
Consolidated Edison, Inc. 143,591 5,483
Consolidated Natural Gas Co. 62,499 4,000
Dominion Resources, Inc. 125,388 6,034
DTE Energy Co. 93,703 3,110
Duke Energy Corp. 237,115 13,397
Eastern Enterprises 17,843 912
Edison International 228,129 6,758
El Paso Energy Corp. 148,779 6,100
Enron Corp. 461,678 18,438
Entergy Corp. 165,204 4,946
First Energy Corp. 156,581 4,081
Florida Progress Corp. 64,800 2,969
FPL Group, Inc. 117,980 5,936
GPU, Inc. 80,852 2,744
New Century Energies, Inc. 80,300 2,615
NICOR, Inc. 28,201 1,093
NUMBER VALUE
OF SHARES (000S)
--------- ---------
Northern States Power Co. 105,108 $ 2,260
PacifiCorp. 194,619 4,014
PECO Energy Co. 119,165 4,551
Peoples Energy Corp. 22,173 843
PG&E Corp. 251,516 5,769
Pinnacle West Capital Corp. 54,200 1,999
PP&L Resources, Inc. 104,145 2,818
Public Service Enterprise
Group, Inc. 144,485 5,716
Reliant Energy, Inc. 191,286 5,213
Southern Co. 442,331 11,749
Texas Utilities Co. 185,887 7,203
Unicom Corp. 138,452 5,304
Williams Cos., Inc. 281,464 10,555
----------
194,247
----------
TOTAL COMMON STOCK
(Cost $5,767,040) 7,368,959
----------
Par
(000s)
---------
- ------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 0.1%
- ------------------------------------------------------------
U.S. Treasury Bills (a)(b)
4.36%-4.65%, 12/16/99 $3,800 3,778
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $3,778) 3,778
----------
NUMBER
OF SHARES
---------
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 0.0%
- ------------------------------------------------------------
Provident Institutional
TempCash, 5.01%* 1,864,286 1,864
----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,864) 1,864
----------
TOTAL INVESTMENTS -- 100.1%
(COST $5,772,682) 7,374,601
----------
OTHER ASSETS AND LIABILITIES , NET -- (0.1%)
Other assets 1,155,018
Liabilities (1,162,244)
----------
(7,226)
----------
TOTAL NET ASSETS-- 100.0% $7,367,375
==========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO
FINANCIAL STATEMENTS.
54
<PAGE>
SCHWAB 1000 FUND(R)
SCHEDULE OF INVESTMENTS
October 31, 1999
NUMBER VALUE
OF SHARES (000S)
--------- ----------
- ------------------------------------------------------------
COMMON STOCK -- 99.8%
- ------------------------------------------------------------
AEROSPACE / DEFENSE -- 1.1%
- ------------------------------------------------------------
Boeing Co. 559,052 $ 25,751
Cordant Technologies, Inc. 24,200 755
General Dynamics Corp. 113,600 6,298
Litton Industries, Inc.+ 30,500 1,432
Lockheed Martin Corp. 232,184 4,644
Northrop Grumman Corp. 31,900 1,751
Orbital Sciences Corp.+ 10,000 147
Raytheon Co., Class A 52,000 1,427
Raytheon Co., Class B 181,400 5,283
Rockwell International Corp. 109,600 5,309
Textron, Inc. 85,400 6,592
United Technologies Corp. 280,106 16,946
--------
76,335
--------
- ------------------------------------------------------------
AIR TRANSPORTATION -- 0.4%
- ------------------------------------------------------------
Airborne Freight Corp. 19,200 413
Alaska Airgroup, Inc.+ 19,500 775
AMR Corp.+ 104,200 6,617
Comair Holdings, Inc. 57,000 1,315
Continental Airlines, Inc.,
Class B+ 14,400 583
Delta Air Lines, Inc. 80,400 4,377
FDX Corp.+ 161,360 6,949
Northwest Airlines Corp.,
Class A+ 42,000 1,063
Southwest Airlines Co. 295,350 4,966
U.S. Airways Group, Inc.+ 36,900 1,033
UAL Corp.+ 32,700 2,226
--------
30,317
--------
- ------------------------------------------------------------
ALCOHOLIC BEVERAGES -- 0.3%
- ------------------------------------------------------------
Adolph Coors Co., Class B 28,000 1,554
Anheuser-Busch Companies, Inc. 278,800 20,021
Brown-Forman Corp., Class B 36,700 2,477
--------
24,052
--------
- ------------------------------------------------------------
APPAREL -- 0.2%
- ------------------------------------------------------------
Jones Apparel Group, Inc.+ 72,200 2,283
Liz Claiborne, Inc. 20,000 800
Nike, Inc., Class B 162,600 9,177
Unifi, Inc.+ 21,925 263
VF Corp. 48,100 1,446
Warnaco Group, Inc., Class A 28,600 408
--------
14,377
--------
NUMBER VALUE
OF SHARES (000S)
--------- ----------
- ------------------------------------------------------------
AUTOMOTIVE PRODUCTS / MOTOR VEHICLES-- 1.5%
- ------------------------------------------------------------
Autonation, Inc.+ 253,900 $ 2,555
B.F. Goodrich Co. 56,792 1,345
Borg-Warner Automotive, Inc. 21,200 837
Carlisle Companies, Inc. 16,000 532
Cooper Tire & Rubber Co. 39,500 664
Cummins Engine Co., Inc. 24,800 1,257
Dana Corp. 76,689 2,267
Danaher Corp. 80,800 3,904
Eaton Corp. 42,100 3,168
Federal-Mogul Corp. 33,000 829
Fleetwood Enterprises, Inc. 22,000 480
Ford Motor Co. 700,500 38,440
General Motors Corp. 368,400 25,880
General Motors Corp., Class H+ 69,282 5,045
Gentex Corp.+ 45,000 773
Genuine Parts Co. 95,575 2,491
Goodyear Tire & Rubber Co. 94,300 3,896
Harley-Davidson, Inc. 91,400 5,421
Lear Corp.+ 36,000 1,215
Meritor Automotive, Inc. 40,000 677
Navistar International Corp.+ 36,000 1,501
TRW, Inc. 70,700 3,031
--------
106,208
--------
- ------------------------------------------------------------
BANKS -- 6.9%
- ------------------------------------------------------------
AmSouth Bancorp. 223,475 5,754
Associated Bancorp. 39,625 1,524
Astoria Financial Corp. 29,750 1,071
BancWest Corp. 25,000 1,045
Bank of America Corp. 990,291 63,750
Bank of New York Co., Inc. 418,600 17,529
Bank One Corp. 669,493 25,148
BB&T Corp. 185,500 6,748
CCB Financial Corp. 21,000 966
Centura Banks, Inc. 22,000 1,159
Chase Manhattan Corp. 487,460 42,592
City National Corp. 25,000 969
CNB Bancshares, Inc. 20,000 1,297
Colonial BancGroup, Inc. 65,000 776
Comerica, Inc. 91,296 5,426
Commerce Bancorp, Inc. 20,000 896
Commerce Bancshares, Inc. 30,441 1,180
Compass Bancshares, Inc. 69,412 1,852
Cullen/Frost Bankers, Inc. 42,200 1,219
Fifth Third Bancorp. 175,743 12,972
First Security Corp. 112,627 2,886
56
<PAGE>
SCHWAB 1000 FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
NUMBER VALUE
OF SHARES (000S)
--------- ----------
First Tennessee National Corp. 72,600 $ 2,468
First Union Corp. 540,822 23,086
First Virginia Banks, Inc. 24,625 1,179
Firstar Corp. 538,535 15,819
Firstmerit Corp. 46,800 1,237
Fleet Boston Corp. 527,239 23,001
Fulton Finanacial Corp. 45,375 890
Golden West Financial Corp. 29,900 3,341
GreenPoint Financial Corp. 62,800 1,790
Hibernia Corp., Class A 80,000 1,135
Hudson United Bancorp 22,000 692
Huntington Bancshares, Inc. 129,578 3,839
J.P. Morgan & Co., Inc. 103,000 13,480
KeyCorp, Inc. 256,846 7,176
Keystone Financial, Inc. 30,000 752
M&T Bank Corp. 4,600 2,279
Marshall & Ilsley Corp. 57,185 3,839
Mellon Financial Corp. 298,488 11,025
Mercantile Bankshares Corp. 40,675 1,464
National City Corp. 354,600 10,461
National Commerce Bancorp. 60,000 1,500
North Fork Bancorporation,
Inc. 67,000 1,386
Northern Trust Corp. 61,900 5,977
Old Kent Financial Corp. 70,636 2,878
Old National Bancorp. 28,152 846
Pacific Century Financial
Corp. 40,350 920
Peoples Bank-Bridgeport 38,000 962
Peoples Heritage Financial
Group, Inc. 62,000 1,178
PNC Bank Corp. 172,630 10,293
Regions Financial Corp. 126,765 3,811
Republic New York Corp. 57,800 3,652
SouthTrust Corp. 92,787 3,711
State Street Corp. 92,000 7,003
Summit Bancorp. 106,850 3,700
SunTrust Banks, Inc. 184,456 13,500
Synovus Financial Corp. 157,962 3,386
Trustmark Corp. 44,000 1,006
U.S. Bancorp. 420,798 15,596
Union Planters Corp. 83,900 3,734
UnionBanCal Corp. 102,600 4,457
Valley National Bancorp. 36,750 981
Wachovia Corp. 118,749 10,242
Washington Mutual, Inc. 346,447 12,450
Wells Fargo & Co. 956,776 45,806
Westamerica Bancorp. 16,800 579
Wilmington Trust Co. 24,200 1,313
Zions Bancorp. 46,600 2,746
--------
489,325
--------
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
BUSINESS MACHINES & SOFTWARE-- 12.4%
- ------------------------------------------------------------
3Com Corp.+ 207,450 $ 6,016
Adaptec, Inc.+ 60,400 2,718
Adobe Systems, Inc. 74,200 5,189
Apple Computer, Inc.+ 90,700 7,267
Autodesk, Inc. 27,200 510
BMC Software, Inc.+ 140,400 9,012
Cabletron Systems, Inc.+ 97,000 1,607
Ceridian Corp.+ 85,400 1,873
Cisco Systems, Inc.+ 1,871,450 138,487
Comdisco, Inc. 91,066 1,838
Compaq Computer Corp. 970,768 18,445
Computer Associates
International, Inc. 305,662 17,270
Compuware Corp.+ 209,600 5,829
Comverse Technology, Inc.+ 45,000 5,107
Concord EFS, Inc.+ 108,412 2,934
Dell Computer Corp.+ 1,459,200 58,550
Diebold, Inc. 35,818 940
Electronics for Imaging,
Inc.+ 35,000 1,411
Gateway, Inc.+ 182,000 12,023
Hewlett-Packard Co. 586,500 43,438
Honeywell, Inc. 75,100 7,918
Informix Corp.+ 95,000 724
International Business
Machines Corp. 1,046,700 102,969
Iomega Corp.+ 118,000 361
J. D. Edwards & Co.+ 65,000 1,556
Legato Systems, Inc.+ 85,000 4,569
Lexmark International Group,
Inc., Class A+ 75,000 5,855
Microchip Technology, Inc.+ 30,000 1,999
Micron Electronics, Inc.+ 48,000 492
Microsoft Corp.+ 2,943,100 272,421
MindSpring Enterprises, Inc.+ 40,000 1,027
National Computer Systems,
Inc. 15,000 567
NCR Corporation+ 44,451 1,472
Network Appliance, Inc.+ 44,000 3,256
New Era of Networks, Inc.+ 20,000 649
Novell, Inc.+ 195,800 3,928
Novellus Systems, Inc.+ 20,000 1,550
Oracle Systems Corp.+ 827,843 39,374
Parametic Technology Corp.+ 142,400 2,714
PeopleSoft, Inc.+ 139,600 2,094
Pitney Bowes, Inc. 156,600 7,135
Pixar, Inc.+ 22,000 837
Quantum Corp. - DLT &
Storage Systems+ 95,400 1,473
56
<PAGE>
NUMBER VALUE
OF SHARES (000S)
--------- ---------
Quantum Corp. - Hard Disk
Drive+ 47,700 $ 292
Rambus, Inc.+ 10,000 676
Rational Software Corp.+ 55,000 2,351
Seagate Technology, Inc.+ 132,060 3,888
Silicon Graphics, Inc.+ 98,700 765
Sterling Commerce, Inc.+ 47,000 1,102
Sterling Software, Inc.+ 47,600 1,044
Storage Technology Corp.+ 60,800 958
Sun Microsystems, Inc.+ 450,000 47,616
Technology Data Corp.+ 13,000 245
Total System Services, Inc. 102,700 1,894
Transaction Systems Architects,
Inc.+ 17,500 538
Unisys Corp.+ 176,150 4,272
Wind River Systems, Inc.+ 15,000 306
Xerox Corp. 374,750 10,493
--------
881,844
--------
- ------------------------------------------------------------
BUSINESS SERVICES -- 4.1%
- ------------------------------------------------------------
ACNielsen Corp.+ 35,000 770
Affiliated Computer Services,
Inc.+ 30,000 1,140
Allied Waste Industries, Inc.+ 91,365 959
America Online, Inc.+ 637,908 82,729
American Management Systems,
Inc.+ 22,000 569
Apollo Group, Inc.+ 42,500 1,118
Aspect Development, Inc.+ 15,000 531
At Home Corp., Class A+ 199,596 7,460
Automatic Data Processing,
Inc. 357,800 17,241
BISYS Group, Inc.+ 17,000 867
Cambridge Technology Partners,
Inc.+ 24,000 265
Catalina Marketing Corp.+ 15,000 1,404
CDW Computer Centers, Inc.+ 30,000 1,852
Cendant Corp.+ 409,552 6,758
CheckFree Holdings Corp.+ 31,000 1,159
Ciber, Inc.+ 36,400 594
Cintas Corp. 67,200 4,049
Circle.com + 6,250 91
Citrix Systems, Inc.+ 52,100 3,341
CMGI, Inc.+ 54,000 5,910
Complete Business Solutions,
Inc.+ 15,000 217
Computer Sciences Corp.+ 94,196 6,470
CSG Systems International,
Inc.+ 24,900 854
Deluxe Corp. 46,000 1,299
DeVry, Inc.+ 35,000 737
DST Systems, Inc.+ 40,000 2,547
Earthlink Network, Inc.+ 10,000 421
Number Value
of Shares (000s)
--------- -----------
Ecolab, Inc. 72,800 $ 2,462
Equifax, Inc. 74,000 1,998
Express Scripts, Inc., Class A+ 22,000 1,081
First Data Corp. 244,302 11,162
Fiserv, Inc.+ 70,693 2,262
Galileo International, Inc. 50,000 1,503
H&R Block, Inc. 53,700 2,286
Hertz Corp. 27,000 1,171
I2 Technologies+ 39,800 3,142
IDX Systems Corp.+ 10,000 182
Infoseek Corp.+ 33,000 1,046
Interpublic Group of Companies,
Inc. 169,700 6,894
Intuit, Inc.+ 107,400 3,128
Keane, Inc.+ 45,000 1,057
Lamar Advertising Company+ 25,000 1,350
Lhs, Inc.+ 35,000 997
Lycos, Inc.+ 52,000 2,775
Manpower, Inc. 44,400 1,560
Mastech Corp.+ 20,000 342
MedQuist, Inc.+ 15,000 480
Micro Warehouse, Inc.+ 10,000 121
Modis Professional Services,
Inc.+ 50,000 559
National Data Corp. 15,000 360
National Service Industries,
Inc. 16,700 539
Navigant Consulting Co.+ 30,000 857
Network Associates, Inc.+ 85,050 1,557
NOVA Corp.+ 36,000 936
Ogden Corp. 10,000 91
Omnicom Group, Inc. 103,200 9,082
Paychex, Inc. 139,695 5,500
Pittston Brink's Group 29,900 574
Policy Management Systems
Corp.+ 14,200 272
R.R. Donnelley & Sons Co. 66,500 1,613
Reynolds & Reynolds Co.,
Class A 45,400 826
Robert Half International,
Inc.+ 34,650 938
Safety-Kleen, Corp.+ 44,000 503
Sapient Corp.+ 20,000 2,557
SEI Investments Co. 9,000 877
The Service Master Co. 170,000 2,221
Siebel Systems, Inc.+ 51,800 5,688
Sodexho Marriott Services,
Inc.+ 30,000 564
Sungard Data Systems, Inc.+ 66,600 1,628
Sykes Enterprises, Inc.+ 30,000 926
Sylvan Learning Systems, Inc.+ 24,000 310
Symantec Corp.+ 30,000 1,432
Synopsys, Inc.+ 38,800 2,418
57
<PAGE>
SCHWAB 1000 FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
NUMBER VALUE
OF SHARES (000S)
--------- ----------
True North Communications,
Inc. 23,000 $ 927
United Rentals, Inc.+ 45,000 838
USWeb Corp.+ 45,000 1,744
VERITAS Software Corp.+ 97,000 10,464
Viad Corp. 53,100 1,304
Vitesse Semiconductor Corp.+ 90,000 4,129
Waste Management, Inc. 355,275 6,528
WestPoint Stevens, Inc. 34,000 644
Whittman-Hart, Inc.+ 35,000 1,345
Yahoo!, Inc.+ 150,800 27,003
--------
296,105
--------
- ------------------------------------------------------------
CHEMICAL -- 1.7%
- ------------------------------------------------------------
Air Products & Chemicals,
Inc. 127,200 3,498
Cabot Corp. 37,800 704
CK Witco Corp. 62,000 581
Dow Chemical Co. 128,000 15,136
E. I. du Pont de Nemours & Co. 658,379 42,424
Eastman Kodak Co. 45,725 1,763
Great Lakes Chemical Corp. 31,700 1,125
Hercules, Inc. 54,850 1,320
Lubrizol Corp. 31,700 812
Lyondell Petrochemical Corp. 61,300 743
Millennium Chemicals, Inc. 24,000 444
Minnesota Mining &
Manufacturing Co. 236,400 22,473
Nalco Chemical Co. 41,800 2,208
Olin Corp. 20,000 276
PPG Industries, Inc. 104,700 6,347
Praxair, Inc. 92,100 4,306
Rohm & Haas Co. 130,214 4,981
RPM, Inc. 44,843 535
Sigma-Aldrich Corp. 60,000 1,710
Solutia, Inc. 55,000 945
Union Carbide Corp. 79,000 4,819
Valspar Corp. 21,600 652
W.R. Grace & Co.+ 35,000 523
--------
118,325
--------
- ------------------------------------------------------------
CONSTRUCTION -- 0.4%
- ------------------------------------------------------------
Armstrong World Industries,
Inc. 25,700 961
Centex Corp. 33,000 885
Clayton Homes, Inc. 64,182 650
Crane Co. 32,850 671
D.R. Horton, Inc. 28,000 331
Fluor Corp. 39,000 1,555
Johns Manville Corp. 84,300 922
--------- --------
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Lafarge Corp. 46,100 $ 1,369
Martin Marietta Materials,
Inc. 21,400 833
Masco Corp. 252,800 7,710
Owens Corning 38,300 785
Pulte Corp. 32,000 644
Sherwin-Williams Co. 97,000 2,170
Southdown, Inc. 24,200 1,169
The Stanley Works 56,800 1,576
USG Corp. 28,700 1,422
Vulcan Materials, Inc. 44,400 1,834
--------
25,487
--------
- ------------------------------------------------------------
CONSUMER - DURABLE -- 0.3%
- ------------------------------------------------------------
Black & Decker Corp. 55,900 2,404
Champion Enterprises, Inc.+ 24,000 219
Fortune Brands, Inc. 101,300 3,590
Furniture Brands International,
Inc.+ 26,000 504
Hillenbrand Industries, Inc. 37,000 1,226
Knoll, Inc.+ 15,000 414
Leggett & Platt, Inc. 111,600 2,476
Linens 'N Things, Inc.+ 20,000 795
Maytag Corp. 43,250 1,733
Newell Rubbermaid, Inc. 142,009 4,917
Shaw Industries, Inc. 80,100 1,237
Whirlpool Corp. 46,100 3,213
--------
22,728
- ------------------------------------------------------------
CONSUMER - NONDURABLE -- 0.9%
- ------------------------------------------------------------
American Greetings Corp.,
Class A 39,200 1,014
Brinker International, Inc.+ 35,000 816
Cbrl Group, Inc. 20,900 280
CKE Restaurants, Inc. 29,700 200
Darden Restaurants, Inc. 78,600 1,498
Electronic Arts, Inc.+ 40,400 3,265
Fastenal Co. 29,700 1,077
Hasbro, Inc. 117,087 2,415
International Game Technology 58,600 1,091
Lancaster Colony Corp. 24,450 854
Mattel, Inc. 235,820 3,154
McDonald's Corp. 781,400 32,233
Mohawk Industries, Inc.+ 25,000 573
Outback Steakhouse, Inc.+ 46,875 1,078
Papa John's International,
Inc.+ 15,000 561
Premark International, Inc. 37,300 2,042
Starbucks Corp.+ 101,000 2,746
Stewart Enterprises, Inc.,
Class A 26,100 124
58
<PAGE>
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Tricon Global Restaurants,
Inc.+ 84,760 $ 3,406
Wendy's International, Inc. 63,500 1,516
Williams-Sonoma, Inc.+ 28,000 1,505
--------
61,448
--------
- ------------------------------------------------------------
CONTAINERS -- 0.2%
- ------------------------------------------------------------
Ball Corp. 17,500 705
Bemis Co., Inc. 36,400 1,272
Crown Cork & Seal Co., Inc. 70,300 1,683
Owens-Illinois, Inc.+ 70,900 1,697
Sealed Air Corp.+ 44,199 2,448
Smurfit-Stone Container Corp.+ 126,900 2,744
Sonoco Products 62,141 1,491
--------
12,040
--------
- ------------------------------------------------------------
ELECTRONICS -- 8.4%
- ------------------------------------------------------------
ADC Telecommunications, Inc.+ 85,400 4,073
Advanced Micro Devices, Inc.+ 74,300 1,472
Altera Corp.+ 114,400 5,563
American Power Conversion
Corp.+ 103,000 2,311
Analog Devices, Inc.+ 103,400 5,493
Andrew Corp.+ 48,612 626
Applied Materials, Inc.+ 213,200 19,148
Arrow Electronics, Inc.+ 53,800 1,174
Atmel Corp.+ 55,200 2,132
Avnet, Inc. 17,100 929
AVX Corp. 66,000 2,640
Cadence Design Systems, Inc.+ 139,350 2,116
Dallas Semiconductor Corp. 15,000 883
Electronic Data Systems Corp. 285,800 16,719
EMC Corp.+ 583,600 42,603
Emerson Electric Co. 250,400 15,040
General Instrument Corp.+ 101,500 5,462
Harris Corp. 46,600 1,046
Intel Corp. 1,923,600 148,959
JDS Uniphase Corp.+ 48,000 8,010
KLA-Tencor Corp.+ 47,400 3,753
Linear Technology Corp. 89,800 6,280
Loral Space & Communications
Corp.+ 145,000 2,184
LSI Logic Corp.+ 80,100 4,260
Lucent Technologies, Inc. 1,790,697 115,052
Macromedia, Inc.+ 30,000 1,933
Maxim Integrated Products,
Inc.+ 79,200 6,252
Micron Technology, Inc.+ 141,100 10,062
Molex Incorporated, Class A 40,000 1,320
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Molex, Inc. 90,257 $ 3,294
Motorola, Inc. 348,400 33,947
National Semiconductor Corp.+ 94,300 2,823
Niagara Mohawk Holdings, Inc.+ 100,200 1,591
Pe Corp-PE Biosystems Group 61,000 3,957
PerkinElmer, Inc. 22,000 898
Pittway Corp., Class A 18,300 604
Qualcomm, Inc.+ 95,000 21,161
SCI Systems, Inc.+ 38,000 1,876
Scientific-Atlanta, Inc. 44,700 2,559
Smart Modular Technologies,
Inc.+ 25,000 928
Snyder Communications, Inc.+ 25,000 319
Solectron Corp.+ 156,000 11,739
Symbol Technologies, Inc. 55,987 2,225
Tektronix, Inc. 26,400 891
Tellabs, Inc.+ 222,000 14,041
Teradyne, Inc.+ 105,800 4,073
Texas Instruments, Inc. 455,100 40,845
Thermo Electron Corp.+ 91,737 1,238
Thomas & Betts Corp. 44,400 1,992
Univision Communications,
Inc.+ 57,000 4,849
VISX, Inc.+ 40,000 2,502
Western Digital Corp.+ 17,600 56
Xilinx, Inc.+ 91,800 7,218
--------
603,121
--------
- ------------------------------------------------------------
ENERGY - RAW MATERIALS -- 0.8%
- ------------------------------------------------------------
Anadarko Petroleum Corp. 66,200 2,040
Apache Corp. 70,100 2,734
Baker Hughes, Inc. 175,020 4,890
Burlington Resources, Inc. 98,467 3,434
Constellation Energy Group 79,650 2,444
Cooper Cameron Corp.+ 35,000 1,354
Dynegy, Inc. 86,000 1,967
ENSCO International, Inc. 77,800 1,507
EOG Resources, Inc. 82,800 1,723
Global Marine, Inc.+ 94,500 1,435
Halliburton Co. 250,460 9,439
McDermott International, Inc. 31,000 562
Nabors Industries, Inc.+ 66,100 1,500
Noble Affiliates, Inc. 27,400 694
Noble Drilling Corp.+ 75,000 1,664
Occidental Petroleum Corp. 194,900 4,446
Santa Fe International Corp. 65,000 1,369
Sempra Energy 132,024 2,698
Smith International+ 32,000 1,106
Sunoco, Inc. 51,900 1,252
59
<PAGE>
SCHWAB 1000 FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
NUMBER VALUE
OF SHARES (000S)
--------- ---------
Tidewater, Inc. 27,000 $ 810
Union Pacific Resources
Group, Inc. 142,588 2,068
Valero Energy Corp. 24,600 452
Vastar Resources, Inc. 59,800 3,532
Weatherford International,
Inc.+ 62,930 2,132
--------
57,252
--------
- ------------------------------------------------------------
FOOD & AGRICULTURE -- 3.5%
- ------------------------------------------------------------
Archer-Daniels Midland Co. 336,270 4,140
Bestfoods, Inc. 157,400 9,247
Campbell Soup Co. 250,400 11,268
Coca-Cola Co. 1,419,600 83,756
Coca-Cola Enterprises, Inc. 239,600 6,125
ConAgra, Inc. 285,848 7,450
Dean Foods Co. 21,150 978
Delta & Pine Land Co. 15,000 439
Dole Food Co., Inc. 23,100 414
Earthgrains Co. 30,000 684
Flowers Industries, Inc. 47,500 802
General Mills, Inc. 91,100 7,943
H.J. Heinz Co. 201,600 9,626
Hershey Foods Corp. 83,100 4,197
Hormel Foods Corp. 41,400 1,785
IBP, Inc. 45,100 1,080
IMC Global, Inc. 62,360 795
International Home Foods,
Inc.+ 45,000 861
Interstate Bakeries Corp. 37,200 753
Kellogg Co. 228,800 9,109
McCormick & Co., Inc. 38,400 1,205
Monsanto Co. 365,500 14,072
Nabisco Holdings Corp.,
Class A 26,000 972
PepsiCo, Inc. 845,600 29,332
Quaker Oats Co. 78,600 5,502
Ralston-Ralston Purina Co. 183,300 5,762
Sara Lee Corp. 525,200 14,213
Smithfield Foods, Inc.+ 23,000 523
Suiza Foods Corp.+ 21,300 768
SYSCO Corp. 186,800 7,180
Tootsie Roll Industries, Inc. 18,540 587
Tyson Foods, Inc. 129,300 1,972
Universal Foods Corp. 35,000 669
US Foodservice+ 60,000 1,151
Whitman Corp. 72,800 946
Whole Foods Market, Inc.+ 14,000 476
Wm. Wrigley Jr. Co. 64,000 5,116
--------
251,898
--------
NUMBER VALUE
OF SHARES (000S)
--------- ----------
- ------------------------------------------------------------
GOLD -- 0.0%
- ------------------------------------------------------------
Homestake Mining Co. 142,800 $ 1,196
Newmont Mining Corp. 99,037 2,173
--------
3,369
--------
- ------------------------------------------------------------
HEALTHCARE / DRUG & MEDICINE-- 10.5%
- ------------------------------------------------------------
Abbott Laboratories 879,200 35,498
Allergan, Inc. 36,050 3,871
ALZA Corp.+ 62,600 2,680
American Home Products Corp. 752,600 39,323
Amerisource Health Corp.+ 20,000 300
Amgen, Inc.+ 296,400 23,638
Bausch & Lomb, Inc. 35,800 1,933
Baxter International, Inc. 166,000 10,769
Becton, Dickinson & Co. 137,200 3,481
Bergen Brunswig Corp. 46,207 329
Biogen, Inc.+ 84,600 6,271
Biomet, Inc. 58,900 1,774
Boston Scientific Corp.+ 201,942 4,064
Bristol-Myers Squibb Co. 1,153,800 88,626
C.R. Bard, Inc. 33,600 1,812
Cardinal Health, Inc. 141,920 6,120
Chiron Corp.+ 104,612 2,988
Columbia / HCA Healthcare
Corp. 323,258 7,799
Covance, Inc.+ 15,000 145
Eli Lilly & Co. 632,168 43,541
Forest Laboratories, Inc.+ 53,200 2,441
Foundation Health Systems,
Inc.+ 70,760 469
Genzyme Corp.+ 43,800 1,675
Gilead Sciences, Inc.+ 26,000 1,643
Guidant Corp. 174,272 8,605
Health Management Associates,
Inc., Class A+ 118,128 1,048
HealthSouth Corp.+ 219,200 1,260
Henry Schein, Inc.+ 24,000 312
Humana, Inc.+ 88,500 608
ICN Pharmaceuticals, Inc. 45,174 1,039
Icos Corp.+ 15,000 430
Immunex Corp.+ 101,600 6,401
IMS Health, Inc. 178,200 5,168
IVAX Corp.+ 65,000 1,142
Johnson & Johnson 803,438 84,160
Lincare Holdings, Inc.+ 37,000 1,041
Mallinckrodt, Inc. 50,600 1,717
Manor Care, Inc.+ 68,600 1,080
McKesson HBOC, Inc. 159,828 3,207
60
<PAGE>
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Medimmune, Inc.+ 35,000 $ 3,920
Medtronic, Inc. 687,296 23,798
Merck & Co., Inc. 1,355,108 107,816
Minimed, Inc.+ 20,000 1,516
Mylan Laboratories, Inc. 64,950 1,165
Omnicare, Inc. 37,900 351
Oxford Health Plans, Inc.+ 49,900 589
PacifiCare Health Systems,
Inc.+ 21,164 835
Patterson Dental Co.+ 25,000 1,127
Pfizer, Inc. 2,236,400 88,338
PSS World Medical, Inc.+ 20,000 155
Quintiles Transnational
Corp.+ 53,660 996
Renal Care Group, Inc.+ 30,100 561
Safeskin Corp.+ 20,400 171
Schering-Plough Corp. 846,600 41,907
Sepracor, Inc.+ 22,000 1,830
Service Corp. International 156,400 1,496
Shared Medical Systems Corp. 19,700 744
St. Jude Medical, Inc.+ 46,450 1,272
Steris Corp.+ 46,400 618
Stryker Corp. 61,600 3,804
Sybron International Corp.+ 59,600 1,419
Tenet Healthcare Corp.+ 177,373 3,448
Total Renal Care Holdings,
Inc.+ 35,000 256
Trigon Healthcare, Inc.+ 20,000 567
United Healthcare Corp. 101,400 5,241
Universal Health Services,
Class B+ 10,000 294
Warner-Lambert Co. 496,401 39,619
Watson Pharmaceuticals, Inc.+ 57,000 1,810
Wellpoint Health Networks,
Inc.+ 41,925 2,432
--------
746,503
--------
- ------------------------------------------------------------
HOUSEHOLD PRODUCTS -- 2.0%
- ------------------------------------------------------------
Alberto-Culver Co., Class B 33,700 794
Avon Products, Inc. 134,400 4,334
Clorox Co. 133,800 5,477
Colgate-Palmolive Co. 334,200 20,219
Dial Corp. 65,100 1,522
Estee Lauder Companies, Inc.,
Class A 72,000 3,357
Gillette Co. 628,410 22,741
International Flavors &
Fragrances, Inc. 58,500 2,238
Procter & Gamble Co. 767,200 80,460
--------
141,142
--------
NUMBER VALUE
OF SHARES (000S)
--------- ---------
- ------------------------------------------------------------
INSURANCE -- 3.5%
- ------------------------------------------------------------
20th Century Industries 55,000 $ 1,097
Aetna, Inc. 81,365 4,089
AFLAC, Inc. 153,850 7,866
Alleghany Corp.+ 3,012 578
Allmerica Financial Corp. 40,216 2,300
Allstate Corp. 457,448 13,152
AMBAC Financial Group, Inc. 44,800 2,677
American Financial Group, Inc. 44,100 1,306
American General Corp. 145,493 10,794
American International Group,
Inc. 896,725 92,307
American National
Insurance Co. 20,300 1,391
Aon Corp. 148,012 5,254
AXA Financial, Inc. 236,200 7,573
Chubb Corp. 105,700 5,800
CIGNA Corp. 122,200 9,134
Cincinnati Financial Corp. 88,614 3,173
CNA Financial Corp.+ 105,700 3,937
Commerce Group, Inc. 10,000 254
Conseco, Inc. 184,296 4,481
Erie Indemnity Co., Class A 40,000 1,275
Fremont General Corp. 25,600 221
Hartford Financial Services
Group, Inc. 138,200 7,160
Hartford Life, Inc., Class A 17,000 888
HomeFed Corp.+ 19,200 17
Horace Mann Educators Corp. 30,000 846
HSB Group, Inc. 15,000 574
Jefferson-Pilot Corp. 63,725 4,783
Lincoln National Corp. 113,800 5,249
Marsh & McLennan
Companies, Inc. 151,700 11,994
MBIA, Inc. 62,000 3,538
Mercury General Corp. 31,400 885
MGIC Investment Corp. 67,400 4,027
Nationwide Financial Services,
Inc., Class A 10,000 379
Ohio Casualty Corp. 34,600 577
Old Republic International
Corp. 61,275 839
PMI Group, Inc. 33,900 1,759
Progressive Corp. 43,900 4,063
Protective Life Corp. 32,600 1,180
Provident Bancorp, Inc. 19,200 824
Reinsurance Group of America,
Inc. 15,000 499
Reliance Group Holdings, Inc. 64,000 228
61
<PAGE>
SCHWAB 1000 FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
NUMBER VALUE
OF SHARES (000S)
--------- ----------
Reliastar Financial Corp. 52,000 $ 2,233
SAFECO Corp. 79,600 2,189
St. Paul Companies, Inc. 135,754 4,344
Torchmark Corp. 79,700 2,486
Transatlantic Holdings, Inc. 20,000 1,507
Travelers Property Casualty
Corp., Class A 35,000 1,260
Unitrin, Inc. 49,000 1,834
UnumProvident Corp. 130,671 4,304
Wesco Financial Corp. 3,800 1,046
--------
250,171
--------
- ------------------------------------------------------------
MEDIA -- 4.0%
- ------------------------------------------------------------
A.H. Belo Corp., Class A 72,000 1,467
Adelphia Communications Corp.,
Class A+ 53,706 2,934
AMFM, Inc.+ 116,000 8,120
AT&T Corp.-Liberty Media
Group, Class A+ 669,386 26,566
BHC Communications, Inc.,
Class A+ 11,700 1,872
Cablevision Systems Corp.,
Class A+ 61,600 4,162
CBS Corp.+ 409,807 20,004
Central Newspapers, Inc.,
Class A 17,000 730
Chris-Craft Industries, Inc.+ 24,932 1,739
Clear Channel Communications,
Inc.+ 192,754 15,493
Comcast Corp., Class A 428,376 18,045
Comcast Corp., Class H 17,000 646
Cox Communications, Inc.+ 343,120 15,591
Dow Jones & Co., Inc. 56,450 3,472
The E.W. Scripps Company,
Class A 51,675 2,387
Gannett Co., Inc. 161,600 12,463
Gartner Group, Inc., Class A+ 30,200 294
Harcourt General, Inc. 40,200 1,548
Harte-Hanks Communications,
Inc. 38,200 757
Hispanic Broadcasting Corp.+ 29,000 2,349
Hollinger International, Inc. 60,000 622
Houghton Mifflin Co. 20,000 847
IXC Communications, Inc.+ 20,000 864
John Wiley & Sons, Inc.,
Class A 36,000 608
Jones Intercable, Inc.,
Class A+ 22,000 1,202
King World Productions, Inc.+ 38,000 1,473
Knight-Ridder, Inc. 51,500 3,270
Lee Enterprises, Inc. 22,000 649
McClatchy Newspapers, Inc.,
Class A 22,000 864
NUMBER VALUE
OF SHARES (000S)
--------- ----------
McGraw-Hill Companies, Inc. 111,350 $ 6,639
Media General, Inc., Class A 19,500 1,065
Mediaone Group+ 352,700 25,064
Meredith Group 36,000 1,285
Metro Goldwyn Mayer, Inc.+ 90,000 1,654
New York Times Co., Class A 104,026 4,187
Outdoor Systems, Inc.+ 105,500 4,471
Primedia, Inc.+ 83,000 929
Pulitzer, Inc. 13,066 560
Reader's Digest Association,
Inc., Class A 57,800 1,864
Time Warner, Inc. 744,810 51,904
Times Mirror Co., Series A 49,000 3,534
Tribune Co. 138,800 8,328
USA Networks, Inc.+ 73,200 3,299
Valassis Communications, Inc.+ 37,500 1,613
Viacom, Inc., Class B+ 402,052 17,992
Washington Post Co. 6,300 3,352
--------
288,778
--------
- ------------------------------------------------------------
MISCELLANEOUS FINANCE -- 6.4%
- ------------------------------------------------------------
American Express Co. 260,400 40,102
Associates First Capital Corp. 421,202 15,374
Bear Stearns Companies, Inc. 66,844 2,849
Berkshire Hathaway, Inc.,
Class A.+ 862 55,082
Berkshire Hathaway, Inc.,
Class B+ 2,921 6,105
Capital One Financial Corp. 114,950 6,092
Charles Schwab Corp. 469,750 18,291
Charter One Financial, Inc. 115,376 2,834
CIT Group, Inc. 85,000 2,029
Citigroup, Inc. 1,948,324 105,453
Commercial Federal Corp. 30,000 589
Countrywide Credit
Industries, Inc. 60,985 2,070
Dime Bancorp., Inc. 69,926 1,250
Donaldson, Lufkin, &
Jenrette, Inc. 71,600 3,705
Dun & Bradstreet Corp. 104,600 3,073
Edwards, Inc. 52,843 1,589
E*Trade Group, Inc.+ 136,000 3,239
Everest Reinsurance Holdings,
Inc. 31,000 798
Fannie Mae 589,000 41,672
Financial Security Assurance
Holdings Ltd. 18,000 1,015
Finova Group, Inc. 36,700 1,617
First American Financial Corp. 30,000 444
Franklin Resources, Inc. 123,200 4,312
Freddie Mac 397,800 21,506
Golden State Bancorp, Inc.+ 74,000 1,545
Household International, Inc. 269,598 12,031
62
<PAGE>
NUMBER VALUE
OF SHARES (000S)
--------- ---------
Investment Technology Group,
Inc. 15,955 $ 421
John Nuveen Co., Class A 15,000 536
Legg Mason, Inc. 32,000 1,164
Lehman Brothers Holdings, Inc. 67,880 5,002
Leucadia National Corp. 30,000 703
Liberty Financial Companies,
Inc. 10,500 253
MBNA Corp. 465,787 12,867
Merrill Lynch & Co., Inc. 214,400 16,830
Morgan Stanley Dean Witter
Discover & Co. 333,405 36,779
Paine Webber Group, Inc. 83,687 3,410
Providian Financial Corp. 87,750 9,565
SLM Holding Corp. 90,350 4,422
Sovereign Bancorp, Inc. 88,000 776
T. Rowe Price Associates, Inc. 73,400 2,606
TCF Financial Corp. 50,600 1,493
U.S. Trust Corp. 17,500 1,420
United Asset Management Co. 38,400 797
Washington Federal, Inc. 38,940 888
--------
454,598
--------
- ------------------------------------------------------------
NON-FERROUS METALS -- 0.3%
- ------------------------------------------------------------
Alcoa, Inc. 213,370 12,962
Engelhard Corp. 69,687 1,228
Freeport-McMoRan Copper &
Gold, Inc., Class B 88,894 1,483
Phelps Dodge Corp. 44,700 2,520
Reynolds Metals Co. 38,800 2,345
--------
20,538
--------
- ------------------------------------------------------------
OIL - DOMESTIC -- 0.7%
- ------------------------------------------------------------
Amerada Hess Corp. 52,100 2,989
Ashland, Inc. 41,000 1,353
Atlantic Richfield Co. 186,200 17,352
Diamond Offshore Drilling,
Inc. 76,800 2,438
Kerr-McGee Corp. 48,002 2,580
Murphy Oil Corp. 22,370 1,254
Phillips Petroleum Co. 143,700 6,682
R&B Falcon Corp.+ 105,000 1,306
Tosco Corp. 85,600 2,167
Transocean Offshore, Inc. 51,000 1,387
Ultramar Diamond Shamrock
Corp. 50,700 1,242
Unocal Corp. 135,534 4,676
USX-Marathon Group 176,000 5,126
--------
50,552
--------
Number Value
of Shares (000s)
--------- ----------
- ------------------------------------------------------------
OIL - INTERNATIONAL -- 2.8%
- ------------------------------------------------------------
Chevron Corp. 379,400 $ 34,644
Exxon Corp. 1,400,600 103,732
Mobil Corp. 450,500 43,473
Texaco, Inc. 315,509 19,364
--------
201,213
--------
- ------------------------------------------------------------
OPTICAL & PHOTO -- 0.2%
- ------------------------------------------------------------
Dentsply International, Inc. 33,000 765
Eastman Kodak Co. 184,700 12,733
Ingram Micro, Inc., Class A+ 30,000 334
--------
13,832
--------
- ------------------------------------------------------------
PAPER & FOREST PRODUCTS -- 0.9%
- ------------------------------------------------------------
Boise Cascade Corp. 33,000 1,176
Bowater, Inc. 35,700 1,874
Champion International Corp. 58,500 3,382
Consolidated Papers, Inc. 54,800 1,716
Fort James Corp. 113,100 2,976
Georgia-Pacific Corp. 50,000 1,194
Georgia-Pacific Group 101,600 4,032
International Paper Co. 235,329 12,384
Kimberly-Clark Corp. 306,360 19,339
Louisiana-Pacific Corp. 66,500 844
Mead Corp. 61,800 2,225
Pentair, Inc. 31,200 1,174
Rayonier, Inc. 13,875 569
St. Joe Co. 43,300 1,034
Temple Inland, Inc. 31,900 1,854
Westvaco Corp. 63,300 1,879
Weyerhaeuser Co. 112,000 6,685
Willamette Industries, Inc. 67,000 2,785
--------
67,122
--------
- ------------------------------------------------------------
PRODUCER GOODS & MANUFACTURING -- 5.2%
- ------------------------------------------------------------
AlliedSignal, Inc. 315,800 17,981
American Standard Corp.+ 35,500 1,356
Applied Power, Inc., Class A 30,000 872
Avery Dennison Corp. 61,800 3,863
Beckman Coulter, Inc. 17,500 805
Blyth Industries, Inc.+ 30,000 752
Briggs & Stratton Corp. 16,300 953
Case Corp. 43,900 2,327
Caterpillar, Inc. 200,600 11,083
CIENA Corp.+ 75,000 2,644
Cooper Industries, Inc. 60,700 2,614
Corning, Inc. 142,800 11,228
<PAGE>
SCHWAB 1000 FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
NUMBER VALUE
OF SHARES (000S)
--------- ---------
Deere & Co. 137,200 $ 4,974
Dover Corp. 124,200 5,286
Federal Signal Corp. 15,000 282
FMC Corp.+ 14,200 578
General Electric Co. (b) 1,893,400 256,674
Harsco Corp. 14,800 436
Herman Miller, Inc. 35,600 772
Hon Industries, Inc. 38,800 761
Howmet International, Inc.+ 60,000 885
Hubbell, Inc., Class B 36,938 1,023
Illinois Tool Works, Inc. 148,200 10,856
Ingersoll-Rand Co. 95,550 4,992
ITT Industries, Inc. 50,600 1,730
Jabil Circuit, Inc.+ 46,000 2,404
Johnson Controls, Inc. 50,600 3,074
Kaydon Corp. 15,000 372
Millipore Corp. 32,400 1,033
Pall Corp. 70,233 1,541
Parker-Hannifin Corp. 64,375 2,949
Sanmina Corp.+ 35,800 3,224
Snap-On, Inc. 37,150 1,128
SPX Corp.+ 20,000 1,695
Teleflex, Inc. 25,000 852
Tenneco, Inc.+ 85,500 1,368
Thermo Instrument Systems,
Inc.+ 52,171 496
The Timken Co. 38,600 692
Trinity Industries, Inc. 27,950 833
U.S. Industries, Inc. 47,500 704
Valhi, Inc. 60,000 649
W.W. Grainger, Inc. 53,600 2,271
Waters Corp.+ 39,200 2,083
York International Corp. 23,400 551
--------
373,646
--------
- ------------------------------------------------------------
RAILROAD & SHIPPING -- 0.4%
- ------------------------------------------------------------
Burlington Northern
Santa Fe Corp. 269,753 8,598
CSX Corp. 119,700 4,908
Florida East Coast Industry,
Inc. 15,000 559
GATX Corp. 24,000 797
Kansas City Southern
Industries, Inc. 64,100 3,041
Newport News Shipbuilding,
Inc. 15,000 456
Norfolk Southern Corp. 216,100 5,281
Union Pacific Corp. 144,761 8,070
--------
31,710
--------
Number Value
of Shares (000s)
--------- ---------
- ------------------------------------------------------------
REAL PROPERTY -- 0.0%
- ------------------------------------------------------------
Catellus Development Corp.+ 45,000 $ 529
Lennar Corp. 29,000 477
Premier Parks, Inc.+ 38,000 1,100
--------
2,106
--------
- ------------------------------------------------------------
RETAIL -- 6.4%
- ------------------------------------------------------------
99 Cents Only Stores+ 13,000 388
Abercrombie & Fitch Co.+ 65,000 1,771
Albertson's, Inc. 227,842 8,274
Amazon.com, Inc.+ 198,400 14,012
American Eagle Outfitters,
Inc.+ 26,000 1,113
AutoZone, Inc.+ 87,000 2,311
Barnes & Noble, Inc.+ 40,000 833
Bed, Bath & Beyond, Inc.+ 79,600 2,652
Best Buy Co., Inc.+ 113,600 6,312
BJ's Wholesale Club, Inc.+ 35,000 1,078
Borders Group, Inc.+ 52,000 676
Circuit City Stores, Inc. 117,600 5,020
CompUSA, Inc.+ 36,000 205
Consolidated Stores Corp.+ 65,312 1,196
Costco Wholesale Corp.+ 125,704 10,096
CVS Corp. 222,914 9,683
Dayton Hudson Corp. 254,000 16,415
Dillards, Inc., Class A 62,200 1,174
Dollar General Corp. 129,016 3,403
Dollar Tree Stores, Inc.+ 35,000 1,525
Family Dollar Stores, Inc. 139,500 2,877
Federated Department
Stores, Inc.+ 115,200 4,918
Gap, Inc. 487,000 18,080
Hannaford Bros. Co., Inc. 28,300 1,983
Home Depot, Inc. 851,898 64,318
IKON Office Solutions 86,400 594
Intimate Brands, Inc. 147,000 6,027
J.C. Penney Co., Inc. 150,800 3,827
Kmart Corp.+ 264,600 2,663
Kohl's Corp.+ 95,800 7,167
Kroger Co.+ 468,080 9,742
Limited, Inc. 139,819 5,750
Longs Drug Stores, Inc. 28,000 763
Lowe's Companies, Inc. 218,200 12,001
May Department Stores Co. 199,350 6,915
Metromedia Fiber Network,
Inc., Class A+ 70,000 2,314
The Neiman Marcus Group, Inc.,
Class A+ 30,000 718
64
<PAGE>
Number Value
of Shares (000s)
--------- -------
Nordstrom, Inc. 73,800 $ 1,840
Office Depot, Inc.+ 206,750 2,571
OfficeMax, Inc.+ 56,100 284
Payless Shoesource, Inc.+ 19,600 898
PetSmart, Inc.+ 38,000 147
Rite Aid Corp. 136,300 1,193
Ross Stores, Inc. 62,000 1,279
Safeway, Inc.+ 292,080 10,314
Saks, Inc.+ 83,340 1,432
Sears, Roebuck & Co. 224,400 6,325
Sotheby's Holdings, Inc.,
Class A 30,000 861
Staples, Inc.+ 259,360 5,755
SUPERVALU, Inc. 71,600 1,504
Tandy Corp. 123,232 7,756
Tiffany & Co., Inc 40,000 2,380
TJX Companies, Inc. 184,400 5,002
Toys 'R' Us, Inc.+ 135,480 1,914
Wal-Mart Stores, Inc. 2,561,600 145,211
Walgreen Co. 569,800 14,352
Weis Markets, Inc. 23,900 793
Winn-Dixie Stores, Inc. 82,300 2,227
Zale Corp.+ 15,000 628
--------
453,460
--------
- ------------------------------------------------------------
STEEL -- 0.1%
- ------------------------------------------------------------
AK Steel Holding Corp. 55,000 952
Allegheny Teledyne, Inc. 108,280 1,645
Nucor Corp. 49,100 2,547
USX-U.S. Steel Group, Inc. 46,660 1,193
--------
6,337
--------
- ------------------------------------------------------------
TELEPHONE -- 8.9%
- ------------------------------------------------------------
Alltel Corp. 180,767 15,049
American Tower Corp., Class A+ 75,000 1,430
Associated Group, Inc.,
Class A+ 15,000 1,028
AT&T Corp. 1,837,967 85,925
Bell Atlantic Corp. 894,486 58,086
BellSouth Corp. 1,098,250 49,421
CenturyTel, Inc. 79,687 3,222
Cincinnati Bell, Inc.+ 76,800 1,598
COMSAT Corp. 34,436 644
Excel Switching Corp.+ 15,000 533
Global Crossing Ltd.+ 201,515 6,977
GTE Corp. 568,150 42,611
Level 3 Communications, Inc.+ 191,500 13,094
Number Value
of Shares (000s)
--------- ----------
MCI WorldCom, Inc.+ 1,079,550 $ 92,639
McLeodUSA, Inc., Class A+ 82,300 3,673
Nextel Communications Inc.,
Class A+ 192,550 16,595
NTL, Inc.+ 56,250 4,240
Plantronics, Inc.+ 8,000 469
Qwest Communications
International, Inc.+ 414,954 14,938
SBC Communications, Inc. 1,962,487 99,964
Sprint Corp. (FON Group) 498,668 37,057
Sprint Corp. (PCS Group)+ 252,667 20,956
Teleglobe, Inc. 53,100 1,258
Telephone & Data Systems, Inc. 35,100 4,045
U.S. Cellular Corp+ 53,800 4,761
US West, Inc. 294,215 17,966
Vodafone Airtouch PLC 803,000 38,494
Winstar Communications, Inc.+ 32,000 1,242
--------
637,915
--------
- ------------------------------------------------------------
TOBACCO -- 0.6%
- ------------------------------------------------------------
Loew's Corp. 62,000 4,394
Nabisco Group Holdings Corp. 171,736 2,200
Philip Morris Companies,
Inc. 1,380,700 34,776
Universal Corp. 19,500 458
UST, Inc. 100,200 2,774
--------
44,602
--------
- ------------------------------------------------------------
TRAVEL & RECREATION -- 0.7%
- ------------------------------------------------------------
Acxiom Corp.+ 40,000 660
Brunswick Corp. 48,900 1,106
Harrah's Entertainment, Inc.+ 72,100 2,086
Hilton Hotels Corp. 122,450 1,133
Marriott International, Inc.,
Class A 138,600 4,669
MGM Grand, Inc.+ 37,000 1,887
Mirage Resorts, Inc.+ 114,100 1,662
Promus Hotel Corp.+ 50,060 1,715
Speedway Motorsports, Inc.+ 20,000 873
Walt Disney Co.+ 1,180,021 31,123
--------
46,914
--------
- ------------------------------------------------------------
TRUCKING & FREIGHT -- 0.1%
- ------------------------------------------------------------
CNF Transportation, Inc. 35,000 1,157
PACCAR, Inc. 42,120 1,985
Ryder Systems, Inc. 33,800 722
Swift Transportation Co.,
Inc.+ 27,500 480
--------
4,344
--------
65
<PAGE>
SCHWAB 1000 FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ----------
- ------------------------------------------------------------
UTILITIES-ELECTRIC & GAS -- 3.0%
- ------------------------------------------------------------
AES Corp.+ 120,318 $ 6,790
AGL Resources, Inc. 20,000 349
Allegheny Energy, Inc. 62,100 1,976
Alliant Energy Corp. 45,000 1,223
Ameren Corp. 77,130 2,916
American Electric Power Co.,
Inc. 108,200 3,733
American Water Works Co.,
Inc. 54,600 1,594
Carolina Power & Light Co. 90,500 3,122
Central & South West Corp. 116,800 2,592
Cinergy Corp. 87,565 2,474
Citizens Utilities Co.,
Class B+ 129,718 1,500
CMS Energy Corp. 62,900 2,319
Coastal Corp. 126,600 5,333
Columbia Energy Group 44,100 2,867
Conectiv, Inc. 60,700 1,184
Consolidated Edison, Inc. 128,700 4,915
Consolidated Natural Gas Co. 55,400 3,546
Dominion Resources, Inc. 110,650 5,325
DPL, Inc. 83,275 1,686
DQE, Inc. 44,050 1,759
DTE Energy Co. 87,100 2,891
Duke Energy Corp. 209,931 11,861
Edison International 205,600 6,091
El Paso Energy Corp. 129,768 5,320
Energy East Corp. 66,800 1,678
Enron Corp. 407,138 16,260
Entergy Corp. 137,421 4,114
First Energy Corp. 129,515 3,375
Florida Progress Corp. 60,400 2,767
FPL Group, Inc. 106,200 5,343
GPU, Inc. 73,600 2,498
Hawaiian Electric Industries,
Inc. 22,900 773
IDACORP, Inc. 21,400 646
Illinova Corp. 41,300 1,314
Ipalco Enterprises, Inc. 49,000 1,001
Kansas City Power & Light Co. 35,900 880
KeySpan Corp. 77,934 2,192
Kinder Morgan, Inc. 65,800 1,324
LG&E Energy Corp. 70,155 1,543
MCN Corp. 50,600 1,237
Number Value
of Shares (000s)
--------- --------
MDU Resources Group, Inc. 26,000 $ 608
MidAmerican Energy Holdings Co. 45,000 1,513
Minnesota Power & Light Co. 44,000 814
Montana Power Co. 65,800 1,871
National Fuel Gas Co. 26,600 1,300
New Century Energies, Inc. 67,700 2,204
New England Electric Co. 38,800 2,020
NICOR, Inc. 25,300 980
Nisource, Inc. 61,800 1,267
Northeast Utilities+ 66,000 1,374
Northern States Power Co. 87,600 1,883
OGE Energy Corp. 51,200 1,162
PacifiCorp. 159,500 3,290
PECO Energy Co. 112,300 4,288
Peoples Energy Corp. 19,500 741
PG&E Corp. 215,458 4,942
Pinnacle West Capital Co. 47,300 1,744
Potomac Electric Power Co. 69,400 1,904
PP&L Resources, Inc. 84,720 2,293
Public Service Enterprise
Group, Inc. 122,300 4,838
Puget Sound Power & Light Co. 48,200 1,066
Questar Corp. 35,800 644
Reliant Energy, Inc. 169,117 4,608
RGS Energy Group, Inc. 21,000 524
Scana Corp. 65,800 1,637
Sierra Pacific Resources 46,600 1,049
Southern Co. 393,700 10,458
TECO Energy, Inc. 72,200 1,593
Texas Utilities Co. 165,812 6,425
Unicom Corp. 128,500 4,923
UtiliCorp United, Inc. 43,350 937
Washington Gas Light Co. 30,000 816
Western Resources, Inc. 47,231 1,089
Williams Cos., Inc. 244,461 9,167
Wisconsin Energy Corp. 59,600 1,334
--------
217,617
--------
TOTAL COMMON STOCK
(Cost $4,259,453) 7,127,331
---------
66
<PAGE>
Number Value
of Shares (000s)
--------- ---------
- ------------------------------------------------------------
RIGHTS -- 0.0%
- ------------------------------------------------------------
Metro-Goldwyn-Mayer, Inc.+ 29,520 $ 118
-----
TOTAL RIGHTS
(Cost $0) 118
-----
Par
(000s)
-------
- ------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 0.0%
- ------------------------------------------------------------
U.S. Treasury Bills (a)(b)
4.55%-4.64%, 12/16/99 $1,175 1,168
------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,168) 1,168
------
Number
of Shares
---------
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 0.1%
- ------------------------------------------------------------
Provident Institutional
TempCash, 5.01%* 2,989,065 2,989
Provident Institutional
TempFund, 5.14%* 2,989,065 2,989
---------
TOTAL SHORT-TERM INVESTMENTS
(Cost $5,978) 5,978
---------
TOTAL INVESTMENTS -- 99.9%
(COST $4,266,599) 7,134,595
---------
OTHER ASSETS AND LIABILITIES, NET -- 0.1%
Other assets 1,266,607
Liabilities (1,263,011)
----------
3,596
-----------
TOTAL NET ASSETS -- 100.0% $ 7,138,191
===========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO FINANCIAL
STATEMENTS.
67
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
- ------------------------------------------------------------
COMMON STOCK -- 99.1%
- ------------------------------------------------------------
AEROSPACE / DEFENSE -- 1.0%
- ------------------------------------------------------------
AAR Corp. 300 $ 5
Alliant Techsystems, Inc.+ 200 12
BE Aerospace, Inc.+ 700 7
Boeing Co. 19,300 889
Cordant Technologies, Inc. 700 22
Curtiss-Wright Corp. 200 7
The Fairchild Corp., Class A+ 1,000 8
GenCorp., Inc. 600 7
General Dynamics Corp. 4,300 238
HEICO Corp., Class A 500 8
Kaman Corp., Class A 1,000 11
Kellstrom Industries, Inc.+ 200 2
Litton Industries, Inc.+ 900 42
Lockheed Martin Corp. 8,000 160
Northrop Grumman Corp. 1,400 77
Orbital Sciences Corp.+ 700 10
Primex Technologies, Inc. 500 11
Raytheon Co., Class B 6,800 198
Rockwell International Corp. 3,900 189
Stanford Telecommunications,
Inc.+ 200 6
Textron, Inc. 3,100 239
The Titan Corp.+ 800 13
Trimble Navigation Ltd.+ 1,000 16
United Technologies Corp. 9,634 583
-------
2,760
-------
- ------------------------------------------------------------
AIR TRANSPORTATION -- 0.4%
- ------------------------------------------------------------
Airborne Freight Corp. 900 19
AirTran Holdings, Inc.+ 1,000 5
Alaska Airgroup, Inc.+ 600 24
America West Holdings Corp.,
Class B+ 800 17
AMR Corp.+ 3,000 190
Amtran, Inc.+ 400 8
Atlantic Coast Airlines Holdings,
Inc.+ 800 19
Atlas Air, Inc.+ 700 19
Comair Holdings, Inc. 2,000 46
Continental Airlines, Inc.,
Class B+ 1,400 57
Delta Air Lines, Inc. 2,800 152
FDX Corp.+ 5,900 254
Frontier Airlines, Inc.+ 300 3
Kitty Hawk, Inc.+ 200 2
Mesa Air Group, Inc.+ 1,300 7
Mesaba Holdings, Inc.+ 800 9
Midwest Express Holdings, Inc.+ 500 15
Number Value
of Shares (000s)
--------- ---------
Northwest Airlines Corp.,
Class A+ 1,700 $ 43
Offshore Logistics, Inc.+ 200 2
SkyWest, Inc. 500 12
Southwest Airlines Co. 10,050 169
U.S. Airways Group, Inc.+ 1,500 42
UAL Corp.+ 1,000 68
-------
1,182
-------
- ------------------------------------------------------------
ALCOHOLIC BEVERAGES -- 0.3%
- ------------------------------------------------------------
Adolph Coors Co., Class B 600 33
Anheuser-Busch Companies,
Inc. 9,500 682
Beringer Wine Estates Holdings,
Inc.+ 300 12
Boston Beer Co., Inc.+ 300 2
Brown-Forman Corp., Class B 1,400 94
Canandaigua Brands, Inc.,
Class A+ 300 18
Central European Distribution
Corp.+ 400 2
The Chalone Wine Group, Ltd.+ 200 2
Geerlings & Wade, Inc.+ 400 4
Genesee Corp., Class B 200 4
Golden State Vintners, Inc.+ 400 2
National Beverage Corp.+ 1,200 10
The Robert Mondavi Corp.,
Class A+ 400 14
-------
879
-------
- ------------------------------------------------------------
APPAREL -- 0.3%
- ------------------------------------------------------------
Buckle, Inc.+ 500 8
Burlington Industries, Inc.+ 1,700 6
Columbia Sportswear Co.+ 600 12
Footstar, Inc.+ 400 14
Fossil, Inc.+ 650 18
Fruit of the Loom, Inc.,
Class A+ 700 2
Global Sports. Inc.+ 200 4
Guess?, Inc.+ 800 10
Haggar Corp. 600 7
Hartmarx Corp.+ 1,300 6
Jones Apparel Group, Inc.+ 2,400 76
K-Swiss, Inc., Class A 400 5
Kellwood Co. 500 9
Kenneth Cole Productions, Inc.+ 400 16
Liz Claiborne, Inc. 1,200 48
MediaBay, Inc.+ 900 12
Men's Wearhouse, Inc.+ 800 18
Nautica Enterprises, Inc.+ 900 14
Nike, Inc., Class B 5,700 322
OshKosh B'Gosh, Inc., Class A 700 14
Pacific Sunwear of California+ 600 18
Polo Ralph Lauren Corp.+ 700 13
68
<PAGE>
Number Value
of Shares (000s)
-------- ---------
Polymer Group, Inc.+ 600 $ 12
Quiksilver, Inc.+ 700 10
Reebok International Ltd.+ 1,000 10
Russell Corp. 800 12
Saucony, Inc.+ 700 12
Stride Rite Corp. 1,500 10
Superior Uniform Group, Inc. 600 6
Talbots, Inc. 700 33
Tarrant Apparel Group+ 800 10
Timberland Co., Class A+ 600 30
Tropical Sportswear Int'l Corp.+ 500 10
Unifi, Inc.+ 1,200 14
Urban Outfitters, Inc.+ 500 11
VF Corp. 2,400 72
Warnaco Group, Inc., Class A 1,000 14
Wolverine World Wide, Inc. 900 9
-----
927
-----
- ------------------------------------------------------------
AUTOMOTIVE PRODUCTS / MOTOR VEHICLES -- 1.5%
- ------------------------------------------------------------
A.O. Smith Corp., Class B 500 12
A.S.V., Inc.+ 500 8
American Axle & Manufacturing
Holdings, Inc.+ 1,100 15
Arvin Industries, Inc. 400 11
Autonation, Inc.+ 9,400 95
Avis Rent A Car, Inc.+ 600 11
B.F. Goodrich Co. 2,204 52
Bandag, Inc. 500 12
Borg-Warner Automotive, Inc. 600 24
Carlisle Companies, Inc. 500 17
Cooper Tire & Rubber Co. 1,600 27
Copart, Inc.+ 500 11
Cummins Engine Co., Inc. 800 41
Dana Corp. 3,300 98
Danaher Corp. 2,800 135
Delphi Automotive Systems Corp. 11,300 186
Detroit Diesel Corp. 500 9
Dura Automotive Systems, Inc.+ 400 7
Eaton Corp. 1,400 105
Federal-Mogul Corp. 1,500 38
Fleetwood Enterprises, Inc. 700 15
Ford Motor Co. 24,400 1,339
General Motors Corp. 12,900 906
General Motors Corp., Class H+ 2,300 167
Gentex Corp.+ 1,500 26
Genuine Parts Co. 3,700 96
Goodyear Tire & Rubber Co. 3,200 132
Number Value
of Shares (000s)
--------- ----------
Group 1 Automotive, Inc.+ 500 $ 8
Harley-Davidson, Inc. 3,000 178
Hayes Lemmerz International, Inc.+ 500 11
Lear Corp.+ 1,400 47
MascoTech, Inc. 800 12
Meritor Automotive, Inc. 1,400 24
Midas, Inc. 500 12
Modine Manufacturing Co. 600 15
Monaco Coach Corp.+ 500 12
Myers Industries, Inc. 400 6
Navistar International Corp.+ 1,400 58
O'Reilly Automotive, Inc.+ 600 26
Simpson Industries, Inc. 700 7
Standard Motor Products, Inc. 500 8
Superior Industries International,
Inc. 500 13
TBC Corp.+ 1,500 10
Thor Industries, Inc. 500 13
Titan International, Inc. 800 6
Tower Automotive, Inc.+ 900 15
TRW, Inc. 2,400 103
Winnebago Industries, Inc. 700 12
Wynns International, Inc. 800 12
-------
4,203
-------
- ------------------------------------------------------------
AUTOMOTIVE SYSTEMS -- 0.0%
- ------------------------------------------------------------
CSK Auto Corp.+ 500 9
Delco Remy International, Inc.+ 800 7
Jason, Inc.+ 1,200 9
Oshkosh Truck Corp. 450 14
Pennzoil-Quaker State Co. 1,500 18
Sterile Recoveries, Inc.+ 300 2
Strattec Security Corp.+ 300 10
-------
69
-------
- ------------------------------------------------------------
BANKS -- 6.7%
- ------------------------------------------------------------
ABC Bancorp. 1,000 13
Albama National Bancorp. 200 5
AMCORE Financial, Inc. 500 12
American Bank of Connecticut 600 13
AmSouth Bancorp. 7,903 203
ANB Corp. 300 11
Anchor Bancorp Wisconsin, Inc. 800 13
Area Bancshares Corp. 500 13
Associated Bancorp. 1,200 46
Astoria Financial Corp. 1,100 40
Bancfirst Corp. 300 10
BancFirst Ohio Corp. 500 11
69
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
Banco Santander Puerto Rico 1,000 $ 18
Bancorpsouth, Inc. 1,000 17
BancWest Corp. 700 29
Bank of Granite Corp. 200 4
Bank of America Corp. 34,900 2,247
Bank of New York Co., Inc. 14,900 624
Bank One Corp. 23,700 890
Bank Plus Corp.+ 2,100 8
Bank United Corp., Class A 600 23
BankFirst Corp.+ 1,500 13
Banknorth Group, Inc. 500 17
Bay View Capital Corp. 700 10
BB&T Corp. 6,502 237
Berkshire Bancorp, Inc. 300 10
BOK Financial Corp.+ 927 20
Brenton Banks, Inc. 200 3
Brookline Bancorp, Inc. 1,000 10
BSB Bancorp, Inc. 200 4
BT Financial Corp. 500 11
Capital City Bank Group, Inc. 500 12
Capitol Bancorp Ltd. 700 10
Carolina First Corp. 500 10
Carrier Access Corp.+ 600 30
Cascade Bancorp. 880 12
Cathay Bancorp., Inc. 400 15
CCB Financial Corp. 800 37
CENIT Bancorp., Inc. 500 9
Centennial Bancorp.+ 825 9
Central Coast Bancorp.+ 800 14
Centura Banks, Inc. 600 32
Century South Banks, Inc. 200 5
Chase Manhattan Corp. 16,800 1,468
Chemical Financial Corp. 400 13
Chittenden Corp. 600 19
Citizens Banking Corp. 600 17
City National Corp. 900 35
CNB Bancshares, Inc. 700 45
Coast Bancorp 500 9
Coastal Bancorp, Inc. 800 15
Coastal Financial Corp. 800 11
Cohoes Bancorp. 600 7
Colonial BancGroup, Inc. 2,200 26
Columbia Banking System, Inc.+ 800 10
Comerica, Inc. 3,200 190
Commerce Bancorp, Inc. 600 27
Commerce Bancshares, Inc. 1,100 43
Community Bank System, Inc. 500 13
Number Value
of Shares (000s)
---------- ---------
CFB Bancorp., Inc. 900 $ 17
Community Trust Bancorp. 200 4
Compass Bancshares, Inc. 2,100 56
CORUS Bankshares, Inc. 500 14
Cullen/Frost Bankers, Inc. 1,000 29
CVB Financial Corp. 500 13
Dime Community Bancshares 500 10
Downey Financial Corp. 500 11
Drovers Bancshares Corp. 600 12
Eagle Bancshares, Inc. 700 13
F&M Bancorp./Frederick MD 200 5
F&M Bancorp., Inc. 300 11
F&M National Corp. 412 12
F.N.B Corp. 500 13
Farmers Capital Bank Corp. 200 7
Fidelity Bancshares, Inc. 800 13
Fifth Third Bancorp. 5,500 406
First Bancorp./Puerto Rico 700 16
First Banking Co. of
Southeast Georgia 500 10
First Busey Corp., Class A 200 5
First Charter Corp. 500 9
First Citizens Bancshares 200 15
First Commerce Bancshares, Inc. 500 11
First Commonwealth Financial Corp. 500 14
First Fed Capital Corp. 400 6
First Federal Financial Corp.
of Kentucky 600 14
First Financial Bancorp. 900 22
First Financial Bancshares, Inc. 400 14
First Liberty Financial Corp. 400 12
First Merchants Corp. 200 5
First Midwest Bancorp., Inc. 600 25
First Northern Capital Corp. 1,300 13
First Republic Bank+ 200 5
First Security Corp. 3,900 100
First Source Corp. 400 11
First Tennessee National Corp. 2,600 88
First Union Corp. 19,362 827
First United Bancshares, Inc. 600 10
First Virginia Banks, Inc. 1,000 48
Firstar Corp. 19,954 586
FIRSTFED AMERICA
BANCORP., INC. 1,000 13
Firstfed Financial Corp.+ 400 6
Firstmerit Corp. 1,700 45
Flagstar Bancorp., Inc. 500 8
70
<PAGE>
Number Value
of Shares (000s)
--------- ---------
Fleet Boston Corp. 18,514 $ 808
Frontier Financial Corp. 400 10
Fulton Financial Corp. 1,400 27
GA Financial, Inc. 800 11
GBC Bancorp. 200 4
Golden West Financial Corp. 1,100 123
Grand Premier Financial, Inc. 400 6
Great Southern Bancorp. 500 11
Greater Bay Bancorp. 500 18
GreenPoint Financial Corp. 2,000 57
Hancosk Holding Co. 300 12
Harbor Florida Bancshares, Inc. 800 10
Harleysville National Corp. 200 7
Hibernia Corp., Class A 3,000 43
Horizon Financial Corp. 1,100 12
Hudson City Bancorp., Inc.+ 1,200 16
Hudson River Bancorp. 1,200 13
Hudson United Bancorp. 800 25
Huntington Bancshares, Inc. 4,600 136
Imperial Bancorp.+ 800 20
Independence Community Bank 1,300 16
Industrial Bancorp., Inc. 500 9
International Bancshares Corp. 250 11
InterWest Bancorp., Inc. 500 9
Irwin Financial Corp. 500 10
JeffBanks, Inc. 200 6
J.P. Morgan & Co., Inc. 3,500 458
KeyCorp, Inc. 9,100 254
Keystone Financial, Inc. 1,000 25
Lakeland Financial Corp. 800 14
LSB Bancshares, Inc. 500 9
M&T Bank Corp. 100 50
MAF Bancorp, Inc. 500 11
Marshall & Ilsley Corp. 2,000 134
MECH Financial, Inc. 300 10
Mellon Financial Corp. 10,400 384
Mercantile Bankshares Corp. 1,300 47
Merchants Bancorp., Inc. New York 800 14
Merchants Bancshares, Inc. 500 12
Mid-America Bancorp. 200 6
Mid-State Bancshares 500 17
Mississippi Valley Bancshares 300 10
National Bancorp of Alaska, Inc. 500 13
National City Bancorp.+ 700 13
National City Bancshares, Inc. 500 14
National City Corp. 12,500 369
National Commerce Bancorp. 2,000 50
Number Value
of Shares (000s)
--------- ---------
National Penn Bancshares, Inc. 400 $ 11
Net.B@nk Inc.+ 600 13
Niagara Bancorp. Inc. 1,200 13
North Fork Bancorporation, Inc. 2,700 56
Northern Trust Corp. 2,300 222
OceanFirst Financial Corp. 200 4
Old Kent Financial Corp. 2,465 100
Old National Bancorp. 900 27
Omega Financial Corp. 300 10
One Valley Bancorp Inc. 700 26
Oriental Financial Group 500 11
Pacific Capital Bancorp. 500 17
Pacific Century Financial Corp. 1,500 34
Park National Corp. 100 10
PBOC Holdings, Inc.+ 1,500 13
Peoples Bank Corp. of
Indianapolis 300 24
Peoples Bank-Bridgeport 1,300 33
Peoples Heritage Financial
Group, Inc. 1,900 36
The Peoples Holding Co. 300 10
PFF Bancorp., Inc. 200 4
Pilgrim Capital Corp.+ 300 10
PNC Bank Corp. 6,200 370
Popular, Inc. 2,800 84
Premier Bancshares, Inc. 600 11
Premier National Bancorp, Inc. 200 4
Prime Bancshares, Inc. 700 19
Provident Bankshares Corp. 500 11
Quaker City Bancorp., Inc.+ 500 8
Queens County Bancorp., Inc. 400 13
Regions Financial, Corp. 4,500 135
Reliance Bancorp., Inc. 400 16
Republic Bancorp. 900 12
Republic Bancorp., Inc., Class A 1,200 11
Republic New York Corp. 2,000 126
Republic Security Financial
Corp. 1,500 13
Riggs National Corp. 700 11
Rock Financial Corp. 200 4
Roslyn Bancorp., Inc. 1,600 31
S & T Bancorp., Inc. 500 12
Sandy Spring Bancorp., Inc. 200 6
Seacoast Banking Corp. 400 11
Second Bancorp., Inc. 200 5
Silicon Valley Bancshares+ 400 13
Sky Financial Group, Inc. 1,210 29
South Alabama Bancorp. 400 5
71
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
Southside Bancshares Corp. 500 $ 5
SouthTrust Corp. 3,400 136
Southwest Bancorp, Inc. 400 9
Southwest Bancorp. of Texas, Inc.+ 700 12
State Street Corp. 3,300 251
Staten Island Bancorp., Inc. 800 15
Sterling Bancorp. 800 15
Sterling Bancshares 1,000 12
Summit Bancorp. 3,537 122
SunTrust Banks, Inc. 6,400 468
Susquehanna Bancshares, Inc. 700 12
Synovus Financial Corp. 5,400 116
Texas Regional Bancshares, Inc. 400 11
Triangle Bancorp., Inc. 600 14
The Trust Co. of New Jersey 500 12
TrustCo Bank Corp. 500 15
Trustmark Corp. 1,500 34
USB Holding Co., Inc. 200 3
U.S. Bancorp. 14,820 549
UMB Financial Corp. 300 12
Union Planters Corp. 2,800 125
UnionBanCal Corp. 3,400 148
United Bankshares, Inc. 800 20
United Community Financial Corp. 700 7
United National Bancorp. 530 12
UST Corp. 800 25
Valley National Bancorp. 1,078 29
VIB Corp.+ 1,500 13
Vista Bancorp., Inc. 800 14
Wachovia Corp. 4,100 354
Washington Mutual, Inc. 11,777 423
Washington Trust Bancorp. 700 13
Wells Fargo & Co. 33,300 1,594
Wesbanco, Inc. 500 13
Westamerica Bancorp. 800 28
Westcorp, Inc. 600 9
Western Bancorp. 500 23
Westernbank Puerto Rico 1,000 14
Whitney Holding Corp. 500 18
Wilmington Trust Co. 700 38
WSFS Financial Corp. 1,000 14
Zions Bancorp. 1,500 88
-------
19,145
-------
- ------------------------------------------------------------
BUSINESS MACHINES & SOFTWARE -- 11.9%
- ------------------------------------------------------------
3Com Corp.+ 7,300 212
3Dfx Interactive, Inc.+ 1,000 10
Number Value
of Shares (000s)
--------- --------
Activision, Inc.+ 1,000 $ 14
Adaptec, Inc.+ 2,000 90
Adobe Systems, Inc. 2,600 182
Advanced Communication
Systems, Inc.+ 1,200 14
Advanced Digital Information+ 500 19
Advantage Learning Systems, Inc.+ 800 22
Advent Software, Inc.+ 450 27
Allaire Corp.+ 200 15
Analogic Corp. 500 13
Analytical Surveys, Inc.+ 500 7
Andersen Group, Inc.+ 400 2
Ansoft Corp+ 1,800 12
Apple Computer, Inc.+ 3,200 256
Ardent Software, Inc.+ 700 15
Auspex Systems, Inc. 1,000 6
Autodesk, Inc. 1,200 22
Avant Corp.+ 800 10
AVT Corp.+ 300 10
AXENT Technologies, Inc.+ 1,000 15
Barra, Inc.+ 500 11
BEA Systems, Inc.+ 1,500 68
Best Software, Inc.+ 1,100 22
BindView Development Corp+ 500 15
Black Box Corp.+ 300 15
BMC Software, Inc.+ 4,800 308
Brio Technology, Inc.+ 900 22
BroadVision, Inc.+ 1,800 133
Cabletron Systems, Inc.+ 3,400 56
Caci International, Inc.+ 400 9
CAM Data Systems, Inc+ 500 5
Ceridian Corp.+ 2,900 64
Cirrus Logic, Inc.+ 1,000 10
Cisco Systems, Inc.+ 65,508 4,848
Cognitronics Corp.+ 400 5
Com21, Inc.+ 800 11
Comdisco, Inc. 3,100 63
Compaq Computer Corp. 34,300 652
Comptek Research, Inc.+ 500 5
Computer Associates
International, Inc. 10,800 610
Computer Horizons Corp.+ 700 8
Computer Network Technology
Corp.+ 700 11
Compuware Corp.+ 7,200 200
Comverse Technology, Inc.+ 1,500 170
Concentric Network Corp.+ 900 23
72
<PAGE>
Number Value
of Shares (000s)
--------- -------
Concord Communications, Inc.+ 300 $ 16
Concord EFS, Inc.+ 4,100 111
Concur Technologies, Inc.+ 500 6
Concurrent Computer Corp.+ 1,200 14
Conexant Systems, Inc.+ 2,000 187
Covad Communications Group,
Inc.+ 1,500 72
Cybex Computer Products Corp.+ 400 16
Datum, Inc.+ 500 4
Dell Computer Corp.+ 51,300 2,058
Deltek Systems, Inc.+ 900 10
Dendrite International, Inc.+ 900 28
Diebold, Inc. 1,400 37
Digital River, Inc.+ 500 11
Drexler Technology Corp.+ 600 4
Edify Corp.+ 1,300 17
eFax.com, Inc.+ 1,000 9
Electronics for Imaging, Inc.+ 1,100 44
Equitex, Inc.+ 500 5
Excalibur Technologies Corp.+ 1,200 11
Exodus Communications, Inc.+ 1,600 138
Extreme Networks, Inc+ 1,000 80
FileNet Corp.+ 1,300 21
FVC.COM, Inc.+ 1,200 16
Gateway, Inc.+ 6,400 423
Genesys Telecommunications
Laboratories, Inc.+ 500 25
Great Plains Software, Inc.+ 300 17
Harbinger Corp.+ 1,200 19
Hewlett-Packard Co. 20,500 1,518
HNC Software, Inc.+ 600 24
Honeywell, Inc. 2,500 264
Hypercom Corp.+ 1,300 10
Hyperion Solutions Corp.+ 800 19
IMRglobal Corp.+ 800 8
Infocure Corp.+ 600 9
Information Resource Engineering,
Inc.+ 500 9
Informix Corp.+ 3,600 27
Inktomi Corp.+ 1,100 112
Input/Output, Inc.+ 1,800 9
Intergraph Corp.+ 1,000 4
International Business Machines
Corp. 36,500 3,591
InterVoice, Inc.+ 1,678 21
ISS Group, Inc.+ 700 27
J. D. Edwards & Co.+ 2,100 50
Javelin Systems, Inc.+ 1,000 8
Juniper Networks, Inc.+ 1,000 276
Landmark Systems Corp.+ 1,500 13
Number Value
of Shares (000s)
--------- ---------
Latitude Communications, Inc.+ 400 $ 13
Legato Systems, Inc.+ 1,600 86
Lexmark International Group, Inc.,
Class A+ 2,600 203
Mapinfo Corp.+ 500 9
Maxtor Corp.+ 1,900 10
Maxwell Technologies, Inc.+ 700 7
Metro Information Services, Inc.+ 700 10
Microchip Technology, Inc.+ 1,000 67
Micromuse, Inc.+ 300 32
Micron Electronics, Inc.+ 1,900 19
MICROS Systems, Inc.+ 500 23
Microsoft Corp.+ 103,000 9,534
MicroStrategy, Inc.+ 500 48
MindSpring Enterprises, Inc.+ 1,300 33
MMC Networks, Inc.+ 600 19
MTI Technology Corp.+ 700 12
National Computer Systems, Inc. 600 23
National Instruments+ 950 29
NCR Corp.+ 1,900 63
NeoMagic Corp.+ 1,000 8
Neon Systems, Inc.+ 400 7
Netopia, Inc.+ 600 32
Network Appliance, Inc.+ 1,500 111
New Era of Networks, Inc.+ 800 26
Novell, Inc.+ 6,800 136
Novellus Systems, Inc.+ 800 62
Nvidia Corp.+ 700 15
Onyx Software Corp+ 700 16
Open Market, Inc.+ 1,000 18
Oracle Systems Corp.+ 29,000 1,379
Parametric Technology Corp.+ 5,400 103
Peerless Systems Corp.+ 1,600 15
PeopleSoft, Inc.+ 4,900 73
Peregrine Systems, Inc.+ 1,000 44
Phoenix Technologies Ltd.+ 800 9
PictureTel Corp.+ 1,600 6
Pinnacle Systems, Inc.+ 400 11
Pitney Bowes, Inc. 5,300 241
Pixar, Inc.+ 1,000 38
Premiere Technologies, Inc.+ 1,500 8
Prodigy Communications Corp.+ 1,300 33
Progress Software Corp.+ 500 17
Proxicom, Inc.+ 600 46
Quantum Corp. - DLT &
Storage Systems+ 3,200 49
Quantum Corp. - Hard Disk Drive+ 1,900 12
73
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
Rambus, Inc.+ 400 $ 27
Rational Software Corp.+ 1,700 73
Read-Rite+ 1,900 7
RealNetworks, Inc.+ 1,500 165
Remedy Corp.+ 700 30
RF Micro Devices, Inc.+ 1,600 83
Rhythms Netconnections, Inc.+ 1,500 44
Sagent Technology, Inc.+ 1,100 15
Sanchez Computer Associates,
Inc.+ 600 13
SCM Microsystems, Inc.+ 200 9
Seagate Technology, Inc.+ 4,400 130
Sigma Designs, Inc.+ 1,500 9
Silicon Graphics, Inc.+ 3,600 28
Spyglass, Inc.+ 800 13
Sterling Commerce, Inc.+ 1,800 42
Sterling Software, Inc.+ 1,600 35
Storage Technology Corp.+ 2,000 31
Sun Microsystems, Inc.+ 15,520 1,642
SVI Holdings, Inc.+ 1,000 8
Sybase+ 1,600 22
Systems & Computer Technology
Corp.+ 1,100 12
Technology Data Corp.+ 1,000 19
Terayon Communication
Systems, Inc.+ 300 13
Total System Services, Inc. 3,900 72
Transaction Systems Architects,
Inc.+ 700 22
Unisys Corp.+ 6,200 150
Usinternetworking, Inc.+ 800 27
Verio, Inc.+ 1,600 60
Veritas DGC, Inc.+ 400 6
Vignette Corp.+ 600 95
Visio Corp.+ 600 24
Visual Networks, Inc.+ 500 21
Wall Data, Inc.+ 1,400 11
Wave Systems Corp.+ 900 9
Web Trends Corp.+ 300 19
Wind River Systems, Inc.+ 1,000 20
WorldGate Communications, Inc.+ 500 11
X-Rite, Inc. 2,000 12
Xerox Corp. 13,400 375
Xircom, Inc.+ 500 25
-------
33,899
-------
- ------------------------------------------------------------
BUSINESS SERVICES -- 5.8%
- ------------------------------------------------------------
24/7 Media, Inc.+ 500 22
4Front Technologies, Inc.+ 1,400 19
Number Value
of Shares (000s)
--------- ---------
Abacus Direct Corp.+ 200 $ 29
ABM Industries, Inc. 500 12
About.com, Inc.+ 500 24
Accrue Software, Inc.+ 400 21
ACNielsen Corp.+ 1,200 26
ACT Networks, Inc.+ 900 6
Actel Corp.+ 1,100 21
Active Software, Inc.+ 400 14
Actuate Corp.+ 400 14
adam.com, Inc.+ 700 6
Advance Paradigm, Inc.+ 200 9
Advanced Radio Telecom Corp.+ 700 8
Advo, Inc.+ 700 12
Affiliated Computer Services,
Inc.+ 900 34
Affymetrix, Inc.+ 800 70
Agile Software Corp.+ 300 29
AHL Services, Inc.+ 500 9
Alliance Semiconductor Corp.+ 800 9
Allied Waste Industries, Inc.+ 3,600 38
America Online, Inc.+ 22,400 2,905
American Management Systems,
Inc.+ 800 21
American Mobile Satellite Corp.+ 1,000 11
Analysts International Corp. 800 9
AnswerThink Consulting Group,
Inc.+ 600 10
Apex, Inc.+ 700 12
Apollo Group, Inc.+ 1,500 39
Appnet, Inc.+ 600 26
Apria Healthcare Group, Inc.+ 1,000 16
Ariba, Inc.+ 1,000 155
ARIS Corp.+ 1,400 9
Art Technology Group Inc.+ 700 38
Ask Jeeves, Inc.+ 600 46
Aspect Development, Inc.+ 1,000 35
At Home Corp., Class A+ 7,000 262
ATG, Inc.+ 1,100 6
autobytel.com, Inc.+ 800 11
Automatic Data Processing, Inc. 12,500 602
Autoweb.com, Inc.+ 1,100 9
Aviation Sales Co.+ 300 5
Bell & Howell Co.+ 500 14
Billing Information Concepts+ 1,600 8
BISYS Group, Inc.+ 600 31
Bowne & Co., Inc. 900 10
Brightpoint, Inc.+ 500 4
Broadbase Software, Inc.+ 300 14
Brocade Communications Systems,
Inc.+ 600 161
Building One Services, Corp.+ 900 10
74
<PAGE>
Number Value
of Shares (000s)
--------- ---------
Cadmus Communications Corp. 1,000 $ 9
Cambridge Technology Partners,
Inc.+ 1,200 13
CareInsite, Inc.+ 1,500 66
Carey International, Inc.+ 500 11
Catalina Marketing Corp.+ 300 28
Catalytica, Inc.+ 1,100 14
CDI Corp.+ 500 13
CDW Computer Centers, Inc.+ 800 49
CellStar Corp.+ 1,200 8
Cendant Corp.+ 14,500 239
Century Business Services, Inc.+ 1,700 17
Cerner Corp.+ 800 12
CheckFree Holdings Corp.+ 1,100 41
Chemed Corp. 500 15
Choicepoint, Inc.+ 200 12
Ciber, Inc.+ 1,200 20
Cintas Corp. 2,300 139
Circle International Group, Inc. 800 18
Circle.com 375 5
Citrix Systems, Inc.+ 1,700 109
Clarent Corp.+ 600 57
Clarify, Inc.+ 600 46
CMGI, Inc.+ 1,900 208
Coinstar, Inc.+ 800 6
Complete Business Solutions, Inc.+ 800 12
Computer Sciences Corp.+ 3,300 227
Computer Task Group, Inc. 700 9
Consolidated Graphics, Inc.+ 400 8
Convergys Corp.+ 3,000 59
Cornell Corrections, Inc.+ 800 10
Corporate Executives Board Co.+ 400 15
Correctional Services Corp.+ 1,200 7
CORT Business Services Corp.+ 500 10
CorVel Corp.+ 400 9
CoStar Group, Inc.+ 400 10
CPI Corp. 400 10
Crawford & Co., Class B 900 13
Critical Path, Inc.+ 800 37
Crown Castle International
Group+ 2,700 52
CSG Systems International,
Inc.+ 1,100 38
CyberSource Corp.+ 400 25
Cyrk International, Inc.+ 1,100 7
Cytec Industries, Inc.+ 800 21
DBT Online, Inc.+ 500 12
Deluxe Corp. 1,600 45
DeVry, Inc.+ 1,300 27
Digital Courier Technologies,
Inc.+ 1,700 8
Number Value
of Shares (000s)
--------- ---------
Dollar Thrifty Automotive Group,
Inc.+ 500 $ 8
DoubleClick, Inc.+ 1,024 143
DST Systems, Inc.+ 1,200 76
Earthlink Network, Inc.+ 700 29
Earthweb, Inc.+ 500 16
EchoStar Communications Corp.,
Class A+ 1,200 74
Eclipsys Corp.+ 900 14
Ecolab, Inc. 2,600 88
Educational Management Corp.+ 700 7
Egain Communications Corp.+ 500 15
Electro Rent Corp.+ 1,100 13
Engage Technologies, Inc.+ 1,000 35
Entrust Technologies, Inc.+ 800 20
Equifax, Inc. 2,800 76
Express Scripts, Inc., Class A+ 800 39
F.Y.I., Inc.+ 400 13
F5 Networks, Inc.+ 300 42
FactSet Research Systems, Inc.+ 300 20
Fair, Isaac & Co., Inc. 300 12
Fidelity Holdings Inc.+ 800 11
First Data Corp. 8,600 393
Fiserv, Inc.+ 2,500 80
Flycast Communications+ 300 15
G & K Services, Inc., Class A 500 19
Galileo International, Inc. 2,000 60
Gerald Stevens, Inc.+ 800 11
Getty Images, Inc.+ 1,000 31
Global Telesystems Group, Inc.+ 3,400 81
Go2net, Inc.+ 600 42
GoTo.com, Inc.+ 900 51
GP Strategies Corp.+ 1,500 18
Greg Manning Auctions, Inc.+ 800 9
Grey Advertising, Inc. 200 72
Group Maintenance America Corp.+ 1,000 10
GTECH Holdings, Corp.+ 700 14
H&R Block, Inc. 1,900 81
HA-LO Industries, Inc.+ 1,500 7
Hanover Compressor Co.+ 600 22
HCIA, Inc.+ 900 10
Healtheon Corp.+ 1,500 49
Healthworld Corp.+ 800 13
Henry Jack & Associates, Inc. 500 18
Hertz Corp. 800 35
High Speed Access Corp.+ 1,000 26
Hooper Holmes, Inc. 500 13
HotJobs.com Ltd.+ 500 12
75
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
I2 Technologies+ 1,600 $ 126
IDX Systems Corp.+ 700 13
Inacom Corp.+ 1,100 5
Infoseek Corp.+ 1,300 41
InfoSpace.com, Inc.+ 900 50
Inspire Insurance Solutions,
Inc.+ 900 6
InsWeb Corp.+ 600 11
Integrated Electrical Services,
Inc.+ 800 9
Interactive Pictures Corp.+ 400 9
Interim Services, Inc.+ 1,530 25
Interliant, Inc.+ 900 11
Intermet Corp. 800 8
International Integration, Inc.+ 700 45
internet.com Corp.+ 400 8
Interpublic Group of Companies,
Inc. 5,600 227
InterVu, Inc.+ 300 16
Intraware, Inc.+ 800 15
Intuit, Inc.+ 3,800 111
Invitrogen Corp.+ 400 10
IPC Communications, Inc.+ 300 16
Iron Mountain, Inc.+ 700 21
IT Group, Inc.+ 700 7
ITT Educational Services, Inc.+ 500 10
iVillage, Inc.+ 400 10
Jacobs Engineering Group, Inc.+ 600 21
John H. Harland Co. 700 13
Juno Online Services, Inc.+ 600 9
Kana Communications, Inc.+ 500 42
Keane, Inc.+ 1,500 35
Kelly Services, Inc. Class A 700 21
Kirby Corp.+ 800 14
Korn/Ferry International+ 900 20
Kroll-O'Gara Co.+ 400 6
Kronos, Inc.+ 300 13
Labor Ready, Inc.+ 1,100 11
Lamar Advertising Co.+ 900 49
Lason, Inc.+ 300 11
Lhs, Inc.+ 800 23
Liberate Technologies+ 900 61
Looksmart Ltd.+ 1,600 43
Luminant Worldwide Corp.+ 500 20
Lycos, Inc.+ 1,800 96
Manpower, Inc. 1,600 56
MapQuest.com, Inc.+ 600 9
Marimba, Inc.+ 500 14
Marketing Services Group, Inc.+ 800 9
Marketwatch.com, Inc.+ 300 16
Number Value
of Shares (000s)
--------- ---------
Mastech Corp.+ 900 $ 15
MAXIMUS, Inc.+ 500 12
Mede America Corp.+ 600 13
Medical Manager Corp.+ 687 34
MedQuist, Inc.+ 700 22
MemberWorks, Inc.+ 500 13
Mentor Graphics Corp.+ 1,300 10
Mercury Interactive Corp.+ 800 65
MessageMedia, Inc.+ 1,400 17
META Group, Inc.+ 1,100 16
Metamor Worldwide, Inc.+ 800 15
Metricom, Inc.+ 500 22
Metris Companies, Inc. 800 28
Metromedia International Group,
Inc.+ 1,600 6
Micro Warehouse, Inc.+ 200 12
Mobile Mini, Inc.+ 400 9
Modis Professional Services,
Inc.+ 1,800 20
Multex.com, Inc.+ 500 8
National Data Corp. 700 17
National Processing, Inc.+ 1,100 10
National Service Industries,
Inc. 800 26
NationsRent, Inc.+ 1,600 10
Navigant Consulting Co.+ 800 23
Neff Corp.+ 800 9
Net Perceptions, Inc.+ 400 6
NETIQ Corp.+ 500 23
Netscout Systems, Inc.+ 500 10
Network Associates, Inc.+ 2,700 49
Network Solutions, Inc.+ 600 71
Neurocrine Biosciences, Inc.+ 1,400 10
New England Business Service, Inc. 200 5
NFO Worldwide, Inc.+ 1,000 11
NOVA Corp.+ 1,400 36
Oceaneering International, Inc.+ 800 11
Ogden Corp. 900 8
Olsten Corp. 1,600 16
Omnicom Group, Inc. 3,500 308
On Assignment, Inc.+ 500 14
OneMain.com, Inc.+ 200 3
OnHealth Network Co.+ 1,600 10
OrthAlliance, Inc.+ 1,000 6
Orthodontic Centers of America,
Inc.+ 1,000 14
Packeteer, Inc.+ 500 17
PAXAR Corp.+ 1,800 17
Paychex, Inc. 5,000 197
Peapod, Inc.+ 1,400 14
76
<PAGE>
Number Value
of Shares (000s)
--------- ---------
Pediatrix Medical Group, Inc.+ 500 $ 4
Pegasus Systems, Inc.+ 400 17
Penwest Pharmaceuticals Co.+ 900 8
Periphonics Corp.+ 400 15
Perot Systems Corp.+ 1,700 30
Persistence Software, Inc.+ 400 3
Pervasive Software, Inc.+ 400 4
Pierce Leahy Corp.+ 500 15
Pinnacle Holdings, Inc.+ 900 22
Pittston Brink's Group 800 15
Plexus Corp.+ 500 13
Policy Management Systems Corp.+ 700 13
Portal Software, Inc.+ 1,500 98
Pre-Paid Legal Services, Inc.+ 500 12
ProBusiness Services, Inc.+ 500 13
Project Software & Development,
Inc.+ 200 10
Protection One, Inc.+ 2,100 4
Proxim, Inc.+ 400 19
PSINet, Inc.+ 1,400 50
PurchasePro.com, Inc.+ 300 12
QRS Corp.+ 350 19
Quanta Services, Inc.+ 600 17
Quest Education Corp.+ 1,000 8
Quest Software, Inc.+ 700 52
R. H. Donnelley Corp. 700 13
R.R. Donnelley & Sons Co. 2,600 63
RadiSys Corp.+ 200 11
Ramp Networks, Inc.+ 400 4
Razorfish, Inc.+ 500 37
Red Hat, Inc.+ 1,400 124
Redback Networks, Inc.+ 800 92
RemedyTemp, Inc.+ 600 6
Rent-A-Center, Inc.+ 500 9
Rent-Way, Inc.+ 700 12
Republic Services, Inc.+ 3,500 43
Reynolds & Reynolds Co., Class A 1,500 27
Ritchie Bros. Auctioneers, Inc.+ 300 11
Robert Half International, Inc.+ 1,900 51
Rollins, Inc. 800 13
Romac International, Inc.+ 1,200 8
RSA Security, Inc.+ 700 25
Rural/Metro Corp.+ 1,100 7
S3, Inc.+ 1,400 14
Safety-Kleen, Corp.+ 1,700 19
SAGA Systems, Inc.+ 800 12
Sandisk Corp.+ 600 36
Sapient Corp.+ 600 77
Number Value
of Shares (000s)
--------- ---------
Scient Corp.+ 700 $ 87
SDL, Inc.+ 700 86
SEACOR SMIT, Inc.+ 200 9
Security Capital Group, Inc.+ 1,000 14
Security First Technologies Corp.+ 600 24
SEI Investments Co. 300 29
Serena Software, Inc.+ 400 7
The Service Master Co. 6,200 81
Siebel Systems, Inc.+ 1,800 198
Silknet Software, Inc.+ 400 32
Silverstream Software, Inc.+ 300 16
Sitel Corp.+ 800 6
Sodexho Marriott Services, Inc.+ 1,300 24
SoftNet Systems, Inc.+ 400 9
Software.com, Inc.+ 800 54
SOFTWORKS, Inc.+ 1,900 6
The Source Information
Management Co.+ 1,000 12
Spartech Corp. 500 14
Splitrock Services, Inc.+ 1,200 26
SportsLine USA, Inc.+ 600 22
StaffMark, Inc.+ 1,200 9
Standard Register Co. 600 13
StarMedia Network, Inc.+ 1,100 32
StarTek, Inc.+ 400 18
Stericycle, Inc.+ 1,100 17
Strayer Education, Inc. 500 9
Structural Dynamics Research
Corp.+ 700 7
Sungard Data Systems, Inc.+ 2,500 61
Sykes Enterprises, Inc.+ 900 28
Sylvan Learning Systems, Inc.+ 1,100 14
Symantec Corp.+ 1,200 57
Synopsys, Inc.+ 1,500 93
Syntel, Inc.+ 1,100 9
Syntroleum Corp.+ 1,100 7
Tanning Technology Corp.+ 400 14
Technology Solutions Co.+ 800 16
TeleSpectrum Worldwide, Inc.+ 1,500 6
Teletech Holdings, Inc.+ 1,200 17
TenFold Corp.+ 700 16
Tetra Technology, Inc.+ 825 13
Thermo TerraTech, Inc.+ 1,500 10
TheStreet.com, Inc.+ 600 12
TIBCO Software, Inc.+ 1,200 47
TMP Worldwide, Inc.+ 700 44
Transaction Network Services,
Inc.+ 500 20
True North Communications, Inc. 1,000 40
77
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
TSI International Software Ltd.+ 600 $ 14
U.S. Office Products Co.+ 1,400 4
United Rentals, Inc.+ 1,400 26
URS Corp.+ 200 4
USWeb Corp.+ 1,500 58
Ventiv Health, Inc.+ 433 3
VeriSign, Inc.+ 1,000 123
VERITAS Software Corp.+ 3,500 378
Verity, Inc.+ 200 14
VerticalNet, Inc.+ 600 34
Viad Corp. 1,900 47
Viant Corp.+ 500 50
VideoServer, Inc.+ 1,200 6
VISTA Information Solutions,
Inc.+ 1,500 6
Vitesse Semiconductor Corp.+ 3,200 147
The Wackenhut Corp. 500 9
Wackenhut Corrections Corp.+ 800 10
Wallace Computer Services, Inc. 800 18
Walter Industries, Inc.+ 900 11
Waste Connections, Inc.+ 500 8
Waste Management, Inc. 12,500 230
Westaff, Inc.+ 1,400 12
WestPoint Stevens, Inc.+ 1,200 23
Whittman-Hart, Inc.+ 1,100 42
Xceed, Inc.+ 500 11
Xoom.com, Inc.+ 400 25
Yahoo!, Inc.+ 5,166 925
Young & Rubicam, Inc. 1,500 69
Zebra Technologies Corp.,
Class A+ 700 38
Ziff-Davis, Inc.+ 2,100 31
Zixit Corp.+ 400 16
Zomax, Inc.+ 1,000 28
-------
16,393
-------
- ------------------------------------------------------------
CHEMICAL -- 1.6%
- ------------------------------------------------------------
A. Schulman 700 11
Aceto Corp. 200 2
Advanced Technical Products, Inc.+ 200 3
AEP Industries, Inc.+ 200 6
Air Products & Chemicals, Inc. 4,700 129
Albemarle Corp. 900 16
Arch Chemicals, Inc. 500 7
Bio-Rad Laboratories, Inc.,
Class A+ 300 7
Cabot Corp. 1,300 24
Cambrex Corp. 500 15
Carbide/Graphite Group, Inc.+ 1,100 8
Celgene Corp.+ 400 12
Number Value
of Shares (000s)
--------- -----------
Chemdex Corp.+ 600 $ 23
Chemfab Corp.+ 500 8
Chemfirst, Inc. 500 13
CK Witco Corp. 2,224 21
Dexter Corp. 500 18
Dow Chemical Co. 4,400 520
E. I. du Pont de Nemours & Co. 21,295 1,372
Eastman Chemical Co. 1,600 62
Ferro Corp. 700 14
Fuller 200 11
Geon Co. 400 10
Georgia Gulf Corp. 600 13
Great Lakes Chemical Corp. 1,100 39
Gum Tech International, Inc.+ 200 3
Hawkins Chemical, Inc. 900 7
Hercules, Inc. 2,100 51
International Specialty Products,
Inc.+ 1,400 11
Lilly Industries, Inc., Class A 800 11
Liqui-Box Corp. 200 11
Lubrizol Corp. 1,200 31
Lyondell Petrochemical Corp. 2,300 28
M. A. Hanna Co. 900 10
Macdermid, Inc. 600 20
Mastec, Inc.+ 500 16
McWhorter Technologies, Inc.+ 200 3
Millennium Chemicals, Inc. 1,500 28
Minnesota Mining & Manufacturing
Co. 8,200 780
NCH Corp. 300 14
NL Industries, Inc. 1,500 17
Oil-Dri Corp. of America 200 2
Olin Corp. 900 12
OM Group, Inc. 500 19
Omnova Solutions, Inc.+ 600 4
Penford Corp. 1,200 16
PPG Industries, Inc. 3,500 212
Praxair, Inc. 3,200 150
Quaker Chemical Corp. 200 3
Regal Beloit 500 11
Rogers Corp.+ 200 7
Rohm & Haas Co. 4,353 166
RPM, Inc. 2,200 26
Scotts Co., Class A+ 300 12
Sequa Corp., Class A+ 300 15
Sigma-Aldrich Corp. 2,100 60
Solutia, Inc. 2,300 40
SurModics, Inc.+ 200 4
Techne Corp.+ 500 20
78
<PAGE>
Number Value
of Shares (000s)
--------- ---------
Terra Nitrogen Co., L.P.+ 1,000 $ 4
Tredegar Industries, Inc. 800 18
Tuscarora Plastics, Inc. 200 2
Twinlab Corp.+ 900 7
U.S. Plastic Lumber Corp.+ 1,700 24
Union Carbide Corp. 2,600 159
Valspar Corp. 900 27
W.R. Grace & Co.+ 1,400 21
WD-40 Co. 200 5
Wellman, Inc. 600 9
Zoltek Companies, Inc.+ 300 2
------
4,462
------
- ------------------------------------------------------------
CONSTRUCTION -- 0.4%
- ------------------------------------------------------------
Apogee Enterprises, Inc. 1,000 6
Armstrong World Industries, Inc. 800 30
Blount International, Inc.+ 1,200 18
Carbo Ceramics, Inc. 500 13
Centex Construction Products, Inc. 300 11
Centex Corp. 1,300 35
Clayton Homes, Inc. 2,900 29
CMI Corp. 1,100 8
Crane Co. 1,400 29
Crossmann Communities, Inc.+ 500 8
D.R. Horton, Inc. 1,300 15
DAL-Tile International, Inc.+ 1,300 12
Florida Rock Industries, Inc. 300 10
Fluor Corp. 1,500 60
Granite Construction, Inc. 500 10
Johns Manville Corp. 3,000 33
Justin Industries, Inc. 900 13
Kaufman & Broad Home Corp. 900 18
Lafarge Corp. 1,300 39
M.D.C. Holdings, Inc. 700 11
Martin Marietta Materials, Inc. 900 35
Masco Corp. 9,000 274
Morrison Knudsen Corp.+ 1,500 14
NVR, Inc.+ 200 8
Owens Corning 1,000 20
Palm Harbor Homes, Inc.+ 500 8
Pitt-Des Moines, Inc. 500 11
Pulte Corp. 800 16
Robertson-Ceco Corp.+ 1,000 7
Sawtek, Inc.+ 800 33
Sherwin-Williams Co. 3,400 76
Simpson Manufacturing, Inc.+ 300 12
Southdown, Inc. 800 39
Number Value
of Shares (000s)
--------- ---------
The Stanley Works 1,700 $ 47
Stone & Webster, Inc. 500 8
T J International, Inc. 400 12
Toll Brothers, Inc.+ 700 12
U.S. Home Corp.+ 500 14
United Dominion Industries,
Ltd. 1,000 21
USG Corp. 1,000 50
Vulcan Materials Co. 2,000 83
Webb Del Corp.+ 400 9
Wesco International, Inc.+ 800 6
West Teleservices, Corp.+ 1,200 17
Westell Technologies, Inc.+ 1,100 8
Yankee Candle Co., Inc.+ 1,100 17
------
1,265
------
- ------------------------------------------------------------
CONSUMER - DURABLE -- 0.4%
- ------------------------------------------------------------
Black & Decker Corp. 1,700 73
Boyds Collection Ltd.+ 1,200 10
Champion Enterprises, Inc.+ 1,100 10
Chromcraft Revington, Inc.+ 800 9
Coachmen Industries, Inc. 700 10
Comfort Systems USA, Inc.+ 700 5
Craftmade International, Inc. 700 5
Ethan Allen Interiors, Inc. 800 28
Falcon Products, Inc. 1,100 10
The First Years, Inc. 1,100 9
Flexsteel Industries, Inc. 600 8
Fortune Brands, Inc. 3,300 117
Furniture Brands International,
Inc.+ 1,100 21
Genlyte Group, Inc.+ 200 4
Harman International Industries,
Inc. 400 16
Haverty Furniture Companies, Inc. 800 11
Helen of Troy Ltd.+ 800 7
Hillenbrand Industries, Inc. 1,300 43
IDG Books Worldwide, Inc.+ 800 14
Information Holdings, Inc.+ 700 13
Interface, Inc. 1,200 5
Kimball International, Inc.,
Class B 800 13
Knoll, Inc.+ 900 25
La-Z-Boy Chair Co. 1,100 20
Leggett & Platt, Inc. 3,900 87
Linens 'N Things, Inc.+ 700 28
Mac-Gray Corp.+ 900 4
Marvel Enterprises, Inc.+ 1,500 8
Maytag Corp. 1,800 72
Media Arts Group, Inc.+ 900 4
Mestek, Inc.+ 700 14
79
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
Mikasa, Inc. 700 $ 8
National Presto Industries,
Inc. 200 7
Newell Rubbermaid, Inc. 5,700 197
Nortek, Inc.+ 500 15
Playboy Enterprises, Inc.+ 500 13
Racing Champions Corp.+ 1,200 6
RARE Hospitality International
Inc.+ 500 10
Select Comfort Corp.+ 1,100 6
Shaw Industries, Inc. 2,800 43
Sturm, Ruger & Co., Inc. 1,100 10
Sunbeam Corp.+ 1,900 9
The Topps Company, Inc.+ 1,200 12
Toro Co. 200 7
Virco Mfg. Corp. 880 13
Whirlpool Corp. 1,600 111
Windmere Durable Holdings, Inc.+ 200 3
------
1,173
------
- ------------------------------------------------------------
CONSUMER - NONDURABLE -- 1.0%
- ------------------------------------------------------------
The 3DO Co.+ 600 4
A.T. Cross Co., Class A 1,000 5
Acclaim Entertainment, Inc.+ 1,500 11
Action Performance Companies,
Inc.+ 500 10
American Greetings Corp.,
Class A 1,400 36
AMF Bowling, Inc.+ 1,617 7
Applebee's International, Inc. 500 14
Ascent Entertainment Group, Inc.+ 700 12
barnesandnoble.com, inc.+ 600 11
Brinker International, Inc.+ 1,400 33
Buca, Inc.+ 800 10
Buffets, Inc.+ 1,200 11
Cbrl Group, Inc. 1,200 16
CEC Entertainment, Inc.+ 450 14
Cheesecake Factory+ 500 15
CKE Restaurants, Inc. 1,200 8
Consolidated Products, Inc.+ 800 9
Cytyc Corp.+ 800 32
Darden Restaurants, Inc. 2,700 51
Dave and Buster's, Inc.+ 700 7
Del Monte Foods Co.+ 900 13
Department 56, Inc.+ 500 9
Electronic Arts, Inc.+ 1,300 105
Enesco Group 700 9
Factory 2-U Stores, Inc.+ 400 10
Fastenal Co. 700 25
Fresh Del Monte Produce, Inc.+ 900 8
Garden Fresh Restaurant Corp.+ 600 9
Number Value
of Shares (000s)
--------- ---------
Hasbro, Inc. 3,900 $ 80
IHOP Corp.+ 500 9
International Game Technology 1,700 32
Jack in the Box, Inc.+ 700 17
JAKKS Pacific, Inc.+ 400 16
Jostens, Inc. 600 13
Keebler Foods Co.+ 1,600 51
Lancaster Colony Corp. 800 28
Landry's Seafood Restaurants,
Inc.+ 1,300 10
Lone Star Steakhouse & Saloon,
Inc.+ 600 5
Luby's Cafeterias, Inc. 400 5
Mattel, Inc. 8,400 112
McDonald's Corp. 27,400 1,130
Midway Games, Inc.+ 700 14
Mohawk Industries, Inc.+ 1,300 30
MP3.com, Inc.+ 1,300 63
NPC International, Inc.+ 800 10
Oakley, Inc.+ 1,600 10
Oneida Ltd. 500 12
Outback Steakhouse, Inc.+ 1,500 34
Papa John's International, Inc.+ 700 26
The Pepsi Bottling Group, Inc. 3,200 58
Performance Food Group Co.+ 500 14
Premark International, Inc. 1,300 71
Regis Corp. 700 13
Riviana Foods, Inc. 600 11
Ruby Tuesday, Inc. 700 13
Russ Berrie & Co., Inc. 500 10
Ryan's Family Steak Houses,
Inc.+ 1,100 12
SCP Pool Corp.+ 400 9
Sonic Corp.+ 500 14
Starbucks Corp.+ 3,700 101
Student Advantage, Inc.+ 800 12
Taco Cabana, Inc., Class A+ 1,000 9
Trans World Entertainment
Corp.+ 1,500 16
Trex Medical Corp.+ 1,100 3
Tricon Global Restaurants,
Inc.+ 3,000 121
Vlasic Foods International,
Inc.+ 1,400 11
Wendy's International, Inc. 2,500 60
Williams-Sonoma, Inc.+ 1,200 64
-------
2,833
-------
- ------------------------------------------------------------
CONTAINERS -- 0.2%
- ------------------------------------------------------------
ACX Technologies, Inc.+ 1,000 8
Alltrista Corp.+ 200 5
Ball Corp. 500 20
Bemis Co., Inc. 1,100 38
80
<PAGE>
Number Value
of Shares (000s)
--------- -----------
Crown Cork & Seal Co., Inc. 2,400 $ 57
EarthShell Corp.+ 1,500 5
Gaylord Container Corp.+ 700 4
Greif Brothers Corp., Class A+ 500 14
Owens-Illinois, Inc.+ 3,100 74
Sealed Air Corp.+ 1,700 94
Silgan Holdings, Inc.+ 600 9
Smurfit-Stone Container Corp.+ 4,300 93
Sonoco Products 2,100 50
U.S. Can Corp.+ 400 8
------
479
------
- ------------------------------------------------------------
ELECTRONICS -- 8.1%
- ------------------------------------------------------------
Aavid Thermal Technologies, Inc.+ 700 16
ADC Telecommunications, Inc.+ 3,100 148
Adelphia Business Solutions, Inc.+ 400 11
Advanced Fibre Communications,
Inc.+ 1,600 35
Advanced Micro Devices, Inc.+ 3,000 59
AFC Cable Systems, Inc.+ 200 8
Allen Telecom, Inc.+ 1,500 14
Alpha Industries, Inc.+ 300 17
Altera Corp.+ 4,000 194
American Power Conversion Corp.+ 3,800 85
American Superconductor Corp.+ 700 12
Amkor Technology, Inc.+ 2,300 46
Amphenol Corp.+ 400 24
Anadigics, Inc.+ 300 12
Analog Devices, Inc.+ 3,500 186
Ancor Communications, Inc.+ 600 19
Andrew Corp.+ 1,600 21
Anixter International, Inc.+ 700 15
Applied Materials, Inc.+ 7,500 674
Applied Micro Circuits Corp.+ 1,000 78
Arguss Holdings, Inc.+ 800 12
Arrow Electronics, Inc.+ 2,000 44
Artisan Components, Inc.+ 1,100 10
Asyst Technologies, Inc.+ 200 8
Atmel Corp.+ 2,000 77
Atmi, Inc.+ 500 13
Avnet, Inc. 1,146 62
AVX Corp. 1,800 72
Aware, Inc.+ 500 16
Bel Fuse, Inc., Class A+ 500 20
Belden, Inc. 500 9
Bell Industries, Inc. 600 3
Benchmark Electronics, Inc.+ 400 6
Broadcom Corp., Class A+ 1,000 128
Number Value
of Shares (000s)
--------- ----------
Burr Brown Corp.+ 700 $ 28
C-Cor Electronics, Inc. 400 16
Cable Design Technologies Corp.+ 600 12
Cadence Design Systems, Inc.+ 4,900 74
CCC Information Services Group,
Inc.+ 1,100 12
Coherent, Inc.+ 800 16
Cohu, Inc. 400 8
CommScope, Inc.+ 1,000 40
Cree Research, Inc.+ 600 26
CTS Corp. 600 34
Cypress Semiconductor Corp.+ 2,100 54
Dallas Semiconductor Corp. 600 35
Data Broadcasting Corp.+ 1,100 13
Digital Microwave Corp.+ 1,200 18
Dionex+ 500 22
DSP Communications, Inc.+ 900 32
DSP Group, Inc.+ 200 10
Dupont Photomasks, Inc.+ 300 15
e.spire Communications, Inc.+ 1,100 8
Electro Scientific Industries,
Inc.+ 300 16
Electroglas, Inc.+ 200 6
Electronic Data Systems Corp. 9,900 579
EMC Corp.+ 20,412 1,490
Emerson Electric Co. 8,700 523
ESS Technology, Inc.+ 1,000 13
Exide Corp. 900 8
FSI International, Inc.+ 1,000 8
Gadzoox Networks, Inc. 400 19
General Cable Corp. 800 6
General Instrument Corp.+ 3,400 183
General Semiconductor, Inc.+ 200 2
Genrad, Inc.+ 700 13
Gerber Scientific, Inc. 500 9
Globespan, Inc.+ 300 22
Hadco Corp.+ 200 7
Harris Corp. 1,600 36
HI/Fn, Inc.+ 300 11
Hollywood Entertainment Corp.+ 900 13
Hutchinson Technology, Inc.+ 500 13
Imation Corp.+ 800 25
Integrated Device Technology,
Inc.+ 1,700 35
Intel Corp. 66,816 5,174
International Rectifier Corp.+ 1,100 21
JDS Uniphase Corp.+ 1,600 267
Kemet Corp.+ 700 22
Kent Electronics Corp.+ 600 12
KLA-Tencor Corp.+ 1,700 135
81
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- --------
Kopin Corp.+ 200 $ 8
Kulicke & Soffa Industries, Inc.+ 500 15
L-3 Communications Holdings, Inc.+ 700 30
Lam Research Corp.+ 800 68
Lattice Semiconductor Corp.+ 1,000 35
Linear Technology Corp. 3,100 217
Littelfuse, Inc.+ 200 4
Loral Space & Communications
Corp.+ 4,800 72
LSI Logic Corp.+ 2,900 154
LTX Corp.+ 1,400 22
Lucent Technologies, Inc. 61,952 3,980
Macromedia, Inc.+ 800 52
Maker Communications, Inc.+ 300 8
Mattson Technology, Inc.+ 1,100 14
Maxim Integrated Products,
Inc.+ 2,800 221
MEMC Electronic Materials,
Inc.+ 1,400 20
Methode Electronics, Inc.,
Class A 700 11
Micron Technology, Inc.+ 5,000 357
Microsemi Corp.+ 1,500 12
MIPS Technology, Inc.+ 800 23
MKS Instruments, Inc.+ 600 13
Molex, Inc. 3,100 113
Motorola, Inc. 12,200 1,189
MRV Communications, Inc.+ 1,100 24
National Semiconductor Corp.+ 3,300 99
Netro Corp.+ 800 18
Network Event Theater, Inc.+ 200 5
Niagara Mohawk Holdings, Inc.+ 3,900 62
Nichols Research Corp.+ 800 23
Omnipoint Corp.+ 1,000 83
Optical Cable Corp.+ 1,200 15
Optical Coating Laboratory, Inc. 200 21
PE Corp-Celera Genomics Group+ 600 23
PE Corp-Biosystems Group 2,000 130
PerkinElmer, Inc. 1,000 41
Pioneer - Standard Electronics,
Inc. 200 3
Pittway Corp., Class A 900 30
PLX Technology, Inc.+ 500 8
Power Intergrations, Inc.+ 200 20
Power-One, Inc.+ 400 8
Qlogic Corp.+ 800 83
QUALCOMM, Inc.+ 3,200 713
Remec, Inc.+ 1,000 10
SCI Systems, Inc.+ 1,400 69
Scientific-Atlanta, Inc. 1,600 92
Semtech Corp.+ 600 23
Sensormatic Electronics Corp.+ 1,500 23
Number Value
of Shares (000s)
--------- ---------
Service Experts, Inc.+ 800 $ 5
Silicon Storage Technology,
Inc.+ 200 3
Silicon Valley Group, Inc.+ 1,000 12
Siliconix, Inc.+ 200 12
Smart Modular Technologies,
Inc.+ 1,000 37
Snyder Communications, Inc.+ 1,500 19
Solectron Corp.+ 5,400 406
Stoneridge, Inc.+ 600 9
Superior Telecommunications, Inc. 500 8
Symbol Technologies, Inc. 1,750 70
SymmetriCom, Inc.+ 1,100 8
Technitrol, Inc. 500 18
Tekelec, Inc.+ 1,200 15
Tektronix, Inc. 900 30
Tellabs, Inc.+ 7,800 493
Teradyne, Inc.+ 3,400 131
Texas Instruments, Inc. 15,951 1,432
Thermo Electron Corp.+ 3,100 42
Thomas & Betts Corp. 1,200 54
THQ, Inc.+ 200 8
TranSwitch Corp.+ 600 28
Triquint Semiconductor, Inc.+ 450 36
Universal Electronics, Inc.+ 500 12
Univision Communications, Inc.+ 2,100 179
Varian Medical Systems, Inc. 500 11
Varian Semiconductor Equipment+ 600 14
Varian, Inc.+ 1,300 25
Veeco Instruments, Inc.+ 200 7
Vicor Corp.+ 900 25
Vishay Intertechnology, Inc.+ 1,700 42
VISX, Inc.+ 1,300 81
Wink Communications, Inc.+ 600 21
Xilinx, Inc.+ 3,100 244
-------
23,096
-------
- ------------------------------------------------------------
ENERGY - RAW MATERIALS -- 1.1%
- ------------------------------------------------------------
Amcol International Corp. 400 5
Anadarko Petroleum Corp. 2,600 80
Apache Corp. 2,300 90
Arch Coal, Inc. 900 10
Atwood Oceanics, Inc.+ 500 15
Baker Hughes, Inc. 6,600 184
Barrett Resources Corp.+ 700 23
Basin Exploration, Inc.+ 400 7
Benton Oil & Gas Co.+ 400 1
BJ Services Co.+ 1,400 48
Buckeye Partners+ 500 13
82
<PAGE>
Number Value
of Shares (000s)
--------- ---------
Burlington Resources, Inc. 3,500 $ 122
C&D Technologies, Inc. 500 16
Cabot Oil & Gas Corp., Class A 700 11
CAL Dive International, Inc.+ 500 17
Callon Petroleum Co. 600 8
Constellation Energy Group 3,000 92
Cooper Cameron Corp.+ 1,000 39
Dynegy, Inc. 3,100 71
ENSCO International, Inc. 2,800 54
Enterprise Products Partners LP 1,100 21
EOG Resources, Inc. 3,000 62
Evergreen Resources, Inc.+ 400 9
Forest Oil Corp.+ 1,000 13
Friede Goldman Halter, Inc.+ 700 6
Global Marine, Inc.+ 3,400 52
Halliburton Co. 8,900 335
Helmerich & Payne, Inc. 900 21
IRI International Corp.+ 500 2
Key Energy Group, Inc.+ 500 2
KEY Production Co., Inc.+ 800 7
Louis Dreyfus Natural Gas Corp.+ 700 14
Marine Drilling Company, Inc.+ 1,200 19
McDermott International, Inc. 1,100 20
Metals USA, Inc.+ 500 4
Mitchell Energy & Development Corp.,
Class A 900 21
Nabors Industries, Inc.+ 2,400 54
Newfield Exploration Co.+ 800 24
Newpark Resources, Inc.+ 1,600 10
Noble Affiliates, Inc. 1,200 30
Noble Drilling Corp.+ 2,600 58
Nuevo Energy Co.+ 800 11
Occidental Petroleum Corp. 7,100 162
ONEOK, Inc. 600 18
Parker Drilling Co.+ 500 2
Penn Virginia Corp. 400 8
Plains All American Pipeline LP 700 13
Plains Resources, Inc.+ 700 12
Prima Energy Corp.+ 700 15
Remington Oil & Gas Corp.+ 400 2
Rowan Companies, Inc.+ 1,700 26
Santa Fe International Corp. 2,300 48
Schlumberger Ltd. 11,000 666
Sempra Energy 4,800 98
Smith International+ 1,000 35
Southwestern Energy Co. 300 2
Stone Energy Corp.+ 300 15
Number Value
of Shares (000s)
--------- ---------
Sunoco, Inc. 1,900 $ 46
Swift Energy Co.+ 200 2
Teppco Partners LP 700 13
Tidewater, Inc. 1,200 36
Titan Exploration, Inc.+ 400 2
Tom Brown, Inc.+ 700 10
Trico Marine Services, Inc.+ 300 2
Tuboscope Vetco International
Corp.+ 900 10
Union Pacific Resources Group,
Inc. 5,000 72
Unit Corp.+ 300 2
UTI Energy Corp.+ 400 8
Valero Energy Corp. 1,200 22
Varco International, Inc.+ 1,300 14
Vastar Resources, Inc. 1,900 112
Vintage Petroleum, Inc. 1,100 12
Weatherford International,
Inc.+ 2,200 75
York Research Corp.+ 1,100 4
------
3,265
------
- ------------------------------------------------------------
FOOD & AGRICULTURE -- 3.2%
- ------------------------------------------------------------
7-Eleven, Inc.+ 7,700 15
Agribrands International, Inc.+ 200 9
American Italian Pasta Co.,
Class A+ 500 13
Aquarion Co. 400 15
Archer-Daniels Midland Co. 12,315 152
Aurora Foods, Inc.+ 1,300 17
Bestfoods, Inc. 5,700 335
Bob Evans Farms, Inc. 700 10
Cadiz, Inc.+ 1,200 10
California Water Service Group 500 14
Campbell Soup Co. 8,800 396
Chiquita Brands International,
Inc. 1,600 8
Coca-Cola Bottling Co. 200 11
Coca-Cola Co. 49,800 2,938
Coca-Cola Enterprises, Inc. 8,600 220
ConAgra, Inc. 9,900 258
Consolidated-Tomoka Land Co. 600 7
Corn Products International, Inc. 700 23
Dean Foods Co. 700 32
Delta & Pine Land Co. 900 26
Dole Food Co., Inc. 1,200 22
Dreyer's Grand Ice Cream, Inc. 600 10
E'Town Corp. 300 14
Earthgrains Co. 800 18
Fleming Companies, Inc. 900 11
Flowers Industries, Inc. 2,200 37
General Mills, Inc. 3,100 270
83
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
H.J. Heinz Co. 7,300 $ 349
Hershey Foods Corp. 2,800 141
Hormel Foods Corp. 1,500 65
IBP, Inc. 1,800 43
IMC Global, Inc. 2,200 28
International Home Foods, Inc.+ 1,400 27
Interstate Bakeries Corp. 1,400 28
J & J Snack Foods Corp.+ 500 10
J.M. Smucker Co., Class A 500 10
Kellogg Co. 8,200 326
Lance, Inc. 900 11
Maui Land & Pineapple Co. 400 8
McCormick & Co., Inc. 1,500 47
Michael Foods, Inc. 500 13
Midwest Grain Products, Inc.+ 700 6
Monsanto Co. 12,800 493
Nabisco Holdings Corp., Class A 1,000 37
Nash - Finch Co. 900 6
Northland Cranberries 1,200 7
PepsiCo, Inc. 29,400 1,020
Pilgrim's Pride Corp. 1,200 11
Pilgrim's Pride Corp., Class A 300 2
Quaker Oats Co. 2,700 189
Ralcorp Holdings, Inc.+ 700 14
Ralston-Ralston Purina Group 6,500 204
Rexall Sundown, Inc.+ 1,300 14
Sanderson Farms, Inc.+ 1,000 10
Sara Lee Corp. 18,300 495
Smithfield Foods, Inc.+ 800 18
Suiza Foods Corp.+ 700 25
SYSCO Corp. 6,600 254
Tasty Baking Co. 600 6
Tejon Ranch Co. 600 16
Tootsie Roll Industries, Inc. 700 22
Tyson Foods, Inc. 4,500 69
Ultrak, Inc.+ 1,500 8
United Natural Foods, Inc.+ 1,000 9
Universal Foods Corp. 1,000 19
US Foodservice+ 2,000 38
Whitman Corp. 2,700 35
Whole Foods Market, Inc.+ 600 20
Wm. Wrigley Jr. Co. 2,400 192
Worthington Foods, Inc. 700 17
Zapata Corp.+ 1,600 8
------
9,261
------
Number Value
of Shares (000s)
--------- ---------
- ------------------------------------------------------------
GOLD -- 0.1%
- ------------------------------------------------------------
Battle Mountain Gold Co.+ 4,300 $ 12
Comstock Resources, Inc.+ 1,800 7
Golden Cycle Gold Corp.+ 600 4
Homestake Mining Co. 5,200 44
Meridian Gold, Inc.+ 1,300 9
Newmont Mining Corp. 3,400 75
------
151
------
- ------------------------------------------------------------
HEALTHCARE / DRUGS & MEDICINE -- 9.8%
- ------------------------------------------------------------
Abbott Laboratories 30,600 1,235
Abgenix, Inc.+ 200 9
Acuson Corp.+ 800 8
Alkermes, Inc.+ 500 18
Allergan, Inc. 1,400 150
Alpharma, Inc., Class A 600 21
Alterra Healthcare Corp.+ 1,200 7
ALZA Corp.+ 2,100 90
American Home Products Corp. 26,400 1,379
American Retirement Corp.+ 700 3
Ameripath, Inc.+ 1,000 7
Amerisource Health Corp.+ 900 13
Amgen, Inc.+ 10,200 813
Andrx Corp.+ 700 33
Arrow International, Inc. 500 14
Atrix Labs, Inc.+ 1,000 5
Aviron+ 500 12
Barr Laboratories, Inc.+ 500 15
Bausch & Lomb, Inc. 1,100 59
Baxter International, Inc. 5,900 383
Becton, Dickinson & Co. 5,000 127
Bergen Brunswig Corp. 2,600 19
Beverly Enterprises, Inc.+ 1,300 5
Bindley Western Industries, Inc. 533 7
Bio-Technology General Corp.+ 300 3
Biocryst Pharmaceuticals, Inc.+ 200 5
Biogen, Inc.+ 3,000 222
Biomatrix, Inc.+ 500 11
Biomet, Inc. 2,300 69
Block Drug Co. 500 17
Bone Care International, Inc.+ 800 9
Boston Scientific Corp.+ 8,400 169
Bristol-Myers Squibb Co. 40,000 3,072
Brookdale Living Communities+ 500 6
C.R. Bard, Inc. 1,000 54
Cardinal Health, Inc. 5,400 233
84
<PAGE>
Number Value
of Shares (000s)
--------- ---------
Caremark Rx, Inc.+ 4,000 $ 19
Carter-Wallace, Inc. 900 16
Cephalon, Inc.+ 500 8
ChiRex, Inc. 500 14
Chiron Corp.+ 3,600 103
CLOSURE Medical Corp.+ 600 8
Cognex Corp.+ 800 24
Columbia / HCA Healthcare Corp. 11,400 275
Conmed Corp.+ 500 12
Cooper Companies, Inc. 600 15
COR Therapeutics, Inc.+ 1,100 22
Corixa Corp.+ 1,100 14
Coulter Pharmaceutical, Inc.+ 500 8
Covance, Inc.+ 1,000 10
Coventry Health Care, Inc.+ 900 5
Datascope Corp.+ 500 18
Diagnostic Products Corp. 600 14
Digene Corp.+ 600 8
drkoop.com, Inc.+ 600 7
Dura Pharmaceuticals, Inc.+ 1,200 15
Duramed Pharmaceuticals, Inc.+ 1,000 8
Eclipse Surgical Technologies,
Inc.+ 200 2
Eli Lilly & Co. 22,000 1,515
Entremed, Inc.+ 500 12
Enzo Biochem, Inc.+ 400 9
Enzon, Inc.+ 1,000 29
First Health Group Corp.+ 1,100 26
Focal, Inc.+ 1,900 10
Forest Laboratories, Inc.+ 1,700 78
Foundation Health Systems,
Inc.+ 2,200 15
GelTex Pharmaceuticals, Inc.+ 500 6
Genentech, Inc.+ 2,100 306
Genzyme Corp.+ 1,700 65
Genzyme Surgical Products+ 496 3
Gilead Sciences, Inc.+ 865 55
Guidant Corp. 6,100 301
Haemonetics Corp.+ 700 13
Hanger Orthopedic Group, Inc.+ 800 10
Health Management Associates, Inc.,
Class A+ 5,100 45
Health Management Systems, Inc.+ 1,400 6
HealthSouth Corp.+ 8,000 46
Henry Schein, Inc.+ 800 10
Hologic, Inc.+ 1,000 3
Human Genome Sciences, Inc.+ 500 44
Humana, Inc.+ 3,300 23
ICN Pharmaceuticals, Inc. 1,500 34
Number Value
of Shares (000s)
--------- ---------
Icos Corp.+ 900 $ 26
IDEC Pharmaceuticals Corp.+ 500 58
Idexx Laboratories, Inc.+ 800 12
ImClone Systems+ 500 14
Immucore, Inc.+ 600 7
Immunex Corp.+ 3,400 214
IMS Health, Inc. 6,400 186
Incyte Pharmaceuticals, Inc.+ 700 13
Inhale Therapeutic Systems+ 500 14
Invacare Corp. 600 13
IVAX Corp.+ 2,200 39
Johnson & Johnson 27,030 2,831
Jones Medical Industries, Inc. 800 25
King Pharmaceuticals, Inc. 700 21
LifePoint Hospitals, Inc.+ 1,100 13
Ligand Pharmaceuticals, Inc.+ 1,300 11
Lincare Holdings, Inc.+ 1,200 34
The Liposome Co., Inc.+ 700 6
Mallinckrodt, Inc. 1,400 48
Manor Care, Inc.+ 2,100 33
Maxicare Health Plans, Inc.+ 1,400 6
Maxim Pharmaceuticals, Inc.+ 900 8
McKesson HBOC, Inc. 5,700 114
Medicis Pharmaceutical Corp.,
Class A+ 700 21
Medimmune, Inc.+ 1,100 123
Medtronic, Inc. 23,700 821
Mentor Corp. 700 16
Merck & Co., Inc. 47,400 3,771
Mid Atlantic Medical Services,
Inc.+ 1,200 7
Millennium Pharmaceuticals+ 700 49
Minimed, Inc.+ 600 45
Minntech Corp. 1,000 10
Mylan Laboratories, Inc. 2,600 47
Myriad Genetics, Inc.+ 700 13
NBTY, Inc.+ 1,300 10
Neurogen Corp.+ 600 10
North American Vaccine, Inc.+ 1,300 7
Northfield Laboratories, Inc.+ 600 8
NPS Pharmacuticals, Inc.+ 1,000 4
OEC Medical Systems, Inc.+ 200 7
Omnicare, Inc. 1,700 16
Onyx Pharmaceuticals, Inc.+ 900 8
Organogenesis, Inc.+ 1,100 8
Osteotech, Inc.+ 700 9
Owens & Minor Holding, Inc.
Holding Co. 800 7
85
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ----------
Oxford Health Plans, Inc.+ 1,700 $ 20
Oxigene, Inc.+ 900 14
PacifiCare Health Systems, Inc.+ 900 35
Parexel International Corp.+ 1,000 10
Patterson Dental Co.+ 700 32
Perclose, Inc.+ 300 15
Perrigo Co.+ 1,500 11
Pfizer, Inc. 78,200 3,089
Pharmaceutical Product
Development, Inc.+ 700 7
Pharmacia & Upjohn, Inc. 182 10
Pharmacopeia, Inc.+ 800 12
Pharmacyclics, Inc.+ 200 7
Pharmaprint, Inc.+ 1,000 3
Priority Healthcare Corp.,
Class B+ 400 8
Protein Design Labs, Inc.+ 800 32
Province Healthcare Co.+ 500 8
PSS World Medical, Inc.+ 1,200 9
Quest Diagnostic, Inc.+ 700 20
Quintiles Transnational Corp.+ 2,100 39
Quorum Health Group, Inc.+ 1,500 12
Renal Care Group, Inc.+ 800 15
ResMed, Inc.+ 500 17
Respironics, Inc.+ 1,000 8
Roberts Pharmaceutical Corp.+ 700 23
SafeScience, Inc.+ 600 11
Safeskin Corp.+ 1,400 12
Schein Pharmaceutical, Inc.+ 1,100 9
Schering-Plough Corp. 29,700 1,470
Sepracor, Inc.+ 700 58
Serologicals Corp.+ 1,000 4
Service Corp. International 5,400 52
Shared Medical Systems Corp. 600 23
Sola International, Inc.+ 700 10
St. Jude Medical, Inc.+ 1,700 47
Steris Corp.+ 1,400 19
Stryker Corp. 1,900 117
Summit Technology, Inc.+ 900 14
Sunrise Assisted Living, Inc.+ 300 3
Sunrise Medical, Inc.+ 1,200 7
SuperGen, Inc.+ 700 20
Sybron International Corp.+ 2,100 50
Syncor International Corp.+ 400 15
Tenet Healthcare Corp.+ 6,300 122
Thermedics, Inc.+ 1,300 7
Total Renal Care Holdings, Inc.+ 1,800 13
Transkaryotic Therapies, Inc.+ 500 23
Number Value
of Shares (000s)
--------- ---------
Triad Hospitals, Inc.+ 1,100 $ 11
Triangle Pharmaceuticals, Inc.+ 700 11
Trigon Healthcare, Inc.+ 800 23
United Healthcare Corp. 3,500 181
United Payors & United Providers,
Inc.+ 700 12
Universal Health Services,
Class B+ 600 18
US Oncology, Inc.+ 2,516 11
Vertex Pharmaceuticals, Inc.+ 600 17
Veterinary Centers of America,
Inc.+ 800 9
Vical, Inc.+ 700 10
Viropharma, Inc.+ 1,000 21
Warner-Lambert Co. 17,300 1,381
Watson Pharmaceuticals, Inc.+ 2,000 63
Wellpoint Health Networks, Inc.+ 1,300 75
West Pharmaceutical Services, Inc. 200 7
Xomed Surgical Products, Inc.+ 300 18
-------
27,784
-------
- ------------------------------------------------------------
HOUSEHOLD PRODUCTS -- 1.8%
- ------------------------------------------------------------
Alberto-Culver Co., Class B 1,200 28
Avon Products, Inc. 5,200 168
Bush Boake Allen, Inc.+ 500 12
Chattem, Inc.+ 300 5
Church & Dwight Co., Inc. 800 21
Clorox Co. 4,800 196
Colgate-Palmolive Co. 11,700 708
Dial Corp. 2,100 49
Estee Lauder Companies, Inc.,
Class A 2,500 117
French Fragrances, Inc.+ 700 5
Gillette Co. 21,900 793
Guest Supply, Inc.+ 600 8
International Flavors &
Fragrances, Inc. 2,200 84
Libbey, Inc. 500 13
Nu Skin Asia Pacific, Inc.+ 700 8
Playtex Products, Inc.+ 1,200 14
Procter & Gamble Co. 26,800 2,811
Revlon, Inc.+ 800 8
Tupperware Corp. 1,200 24
USA Detergents, Inc.+ 1,400 7
-------
5,079
-------
- ------------------------------------------------------------
INSURANCE -- 3.3%
- ------------------------------------------------------------
20th Century Industries 1,700 34
Aetna, Inc. 2,900 146
AFLAC, Inc.. 5,300 271
Alfa Farmers Federation Corp. 800 14
Alleghany Corp.+ 100 19
86
<PAGE>
Number Value
of Shares (000s)
--------- ---------
Allmerica Financial Corp. 1,100 $ 63
Allstate Corp. 16,100 463
AMBAC Financial Group, Inc. 1,500 90
American Annuity Group, Inc. 800 14
American Financial Group, Inc. 1,300 39
American General Corp. 5,000 371
American Heritage Life
Investment Corp. 500 19
American International Group,
Inc. 31,325 3,225
American National Insurance Co. 600 41
AmerUs Life Holdings, Inc.,
Class A 500 12
Aon Corp. 5,200 185
Argonaut Group, Inc. 500 12
Arthur J. Gallegher & Co. 300 16
AXA Financial, Inc. 9,000 289
Baldwin & Lyons, Inc., Class B 600 12
Brown & Brown 300 10
Capital Re Corp. 800 11
Chicago Title Corp. 500 22
Chubb Corp. 3,547 195
CIGNA Corp. 4,100 306
Cincinnati Financial Corp. 3,300 118
CNA Financial Corp.+ 3,700 138
CNA Surety Corp. 900 10
Commerce Group, Inc. 700 18
Conseco, Inc. 6,600 160
Delphi Financial Group, Inc.,
Class A+ 500 16
E.W. Blanch Holdings 200 13
Enhance Financial Services Group,
Inc. 800 15
Erie Indemnity Co., Class A 1,400 45
Farm Family Holdings, Inc.+ 400 16
FBL Financial Group, Inc., Class A 700 13
First United Corp. 900 13
Foremost Corp. of America 500 14
FPIC Insurance Group, Inc.+ 500 8
Fremont General Corp. 1,300 11
Frontier Insurance Group, Inc. 1,100 10
Guarantee Life Companies, Inc. 300 9
Harleysville Group, Inc. 800 14
Hartford Financial Services
Group, Inc. 4,500 233
Hartford Life, Inc., Class A 600 31
HCC Insurance Holdings, Inc. 900 10
Hilb, Rogal & Hamilton Co. 400 10
Horace Mann Educators Corp. 800 23
HSB Group, Inc. 600 23
Jefferson-Pilot Corp. 2,200 165
Kansas City Life Insurance Co. 400 16
Number Value
of Shares (000s)
--------- ---------
LandAmerica Financial Group, Inc. 500 $ 9
Liberty Corp. 300 14
Lincoln National Corp. 4,100 189
Markel Corp.+ 100 17
Marsh & McLennan Companies, Inc. 5,400 427
MBIA, Inc. 2,000 114
Medical Assurance, Inc.+ 500 12
Mercury General Corp. 1,000 28
MGIC Investment Corp. 2,100 125
MIIX Group, Inc. 400 6
MMI Companies, Inc. 800 7
Mony Group, Inc. 900 28
National Western Life Insurance Co.,
Class A+ 100 9
Nationwide Financial Services, Inc.,
Class A 500 19
Ohio Casualty Corp. 1,200 20
Old Republic International Corp. 2,600 36
Orion Capital Corp. 400 20
Penn Treaty American Corp.+ 500 9
Penn-America Group, Inc. 900 7
Pico Holdings, Inc.+ 400 7
Presidential Life Corp. 700 13
PMI Group, Inc. 950 49
Proffessionals Group, Inc.+ 200 5
Progressive Corp. 1,500 139
Protective Life Corp. 1,200 43
Provident Bancorp, Inc. 800 34
Reinsurance Group of America, Inc. 700 23
Reliastar Financial Corp. 1,700 73
Risk Capital Holdings, Inc.+ 200 3
RLI Corp. 500 17
SAFECO Corp. 2,700 74
SCPIE Holdings, Inc. 500 18
Selective Insurance Group, Inc. 700 13
Sierra Health Services, Inc.+ 800 6
St. Paul Companies, Inc. 4,600 147
Stancorp Financial Group 800 20
State Auto Financial Corp. 1,000 11
Sterling Financial Corp. 400 15
Superior National Insurance Group+ 800 10
Torchmark Corp. 2,600 81
Transatlantic Holdings, Inc. 700 53
Travelers Property Casualty Corp.,
Class A 1,200 43
Trenwick Group, Inc. 500 10
Triad Guaranty, Inc.+ 200 4
87
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ----------
UICI+ 900 $ 24
Unitrin, Inc. 1,500 56
UnumProvident Corp. 4,814 159
Vesta Insurance Group, Inc. 2,300 9
W. R. Berkley Corp. 500 11
Wesco Financial Corp. 100 28
Xl Capital Ltd., Class A+ 183 10
Zenith National Insurance Corp. 400 9
------
9,344
------
- ------------------------------------------------------------
MEDIA -- 3.5%
- ------------------------------------------------------------
4 Kids Entertainment, Inc.+ 400 29
A.H. Belo Corp., Class A 2,300 47
Ackerly Group, Inc. 800 13
Actv, Inc.+ 1,100 17
Adelphia Communications Corp.,
Class A+ 1,901 104
Amc Entertainment, Inc.+ 700 9
AMFM, Inc.+ 3,898 273
Applied Graphics Technologies+ 1,100 8
Banta Corp. 500 11
BHC Communications, Inc., Class A+ 500 80
Big Flower Holdings, Inc.+ 400 12
Cablevision Systems Corp.,
Class A+ 2,100 142
CBS Corp.+ 14,100 688
CD Radio, Inc.+ 500 13
Central Newspapers, Inc., Class A 700 30
Chris-Craft Industries, Inc.+ 700 49
Citadel Communications Corp.+ 600 29
City Holding Co. 500 8
Clear Channel Communications,
Inc.+ 6,700 539
CNET, Inc.+ 1,400 66
Comcast Corp., Class A 15,100 636
Cox Communications, Inc.+ 10,635 483
Cox Radio, Inc., Class A+ 300 21
Cumulus Media, Inc.+ 500 18
Cymer, Inc.+ 700 26
Dick Clark Productions, Inc.+ 900 11
Dow Jones & Co., Inc. 1,800 111
The E.W. Scripps Company,
Class A 1,600 74
Efficient Networks, Inc.+ 800 34
Emusic.com, Inc.+ 600 8
Entercom Communications Corp.+ 600 30
Fox Entertainment Group, Inc.+ 2,500 54
Gannett Co., Inc. 5,700 440
Gartner Group, Inc., Class B+ 1,951 18
Gaylord Entertainment Co. 600 20
Number Value
of Shares (000s)
--------- ----------
GC Cos., Inc.+ 300 $ 9
Gray Communication Systems, Inc. 700 13
Gray Communication Systems, Inc.,
Class B 200 3
Harcourt General, Inc. 1,500 58
Harte-Hanks Communications, Inc. 1,400 28
Hearst-Argyle Television, Inc.+ 1,100 22
Hispanic Broadcasting Corp.+ 1,000 81
Hollinger International, Inc. 2,200 23
Houghton Mifflin Co. 700 30
Infinity Broadcasting Corp.+ 3,100 107
Insight Communications+ 1,000 24
IXC Communications, Inc.+ 700 30
John Wiley & Sons, Inc., Class A 1,200 20
Jones Intercable, Inc., Class A+ 800 44
Journal Register Co.+ 900 13
King World Productions, Inc.+ 1,200 47
Knight-Ridder, Inc. 1,600 102
Lee Enterprises, Inc. 800 24
Liberty Digital, Inc., Class A+ 700 22
Loews Cineplex Entertainment
Corp.+ 1,400 10
Macrovision Corp.+ 600 34
McClatchy Newspapers, Inc.,
Class A 800 31
McGraw-Hill Companies, Inc. 4,000 239
Media General, Inc., Class A 600 33
Mediaone Group+ 12,100 860
Meredith Corp. 1,100 39
Metro Goldwyn Mayer, Inc.+ 3,100 57
New York Times Co., Class A 3,400 137
Oak Industries, Inc.+ 300 12
On Command Corp.+ 600 10
Outdoor Systems, Inc.+ 3,700 157
PanAmSat Corp.+ 400 16
Parkervision, Inc.+ 400 9
Paxson Communications Corp.+ 1,000 12
Pegasus Communications Corp.+ 200 9
Penton Media, Inc. 700 13
Primedia, Inc.+ 2,800 31
Reader's Digest Association, Inc.,
Class A 2,200 71
Salem Communications Corp.+ 400 10
Scholastic Corp.+ 400 19
SFX Entertainment, Inc.,
Class A+ 1,150 40
Sinclair Broadcast Group, Inc.+ 1,200 12
Time Warner, Inc. 25,900 1,805
Times Mirror Co., Series A 1,300 94
Tribune Co. 4,800 288
88
<PAGE>
Number Value
of Shares (000s)
--------- ---------
TV Guide, Inc.+ 1,500 $ 79
United Television, Inc. 100 13
USA Networks, Inc.+ 2,800 126
Valassis Communications, Inc.+ 1,200 52
Valuevision International, Inc.+ 700 23
Viacom, Inc., Class B+ 13,900 622
Washington Post Co. 300 160
Westwood One, Inc.+ 1,600 74
Young Broadcasting, Inc.+ 300 14
-------
10,062
-------
- ------------------------------------------------------------
MISCELLANEOUS -- 0.4%
- ------------------------------------------------------------
1-800-flowers+ 600 8
Alteon Websystems, Inc.+ 700 50
Amercan National Can Group, Inc. 1,000 13
Be, Inc.+ 1,400 8
BioMarin Pharmaceuticals, Inc.+ 600 9
Bluestone Software, Inc.+ 300 11
Braun Consulting+ 600 16
Capitol Federal Financial 1,600 16
CIRCOR International, Inc.+ 350 3
Commerce One, Inc.+ 400 69
Corinthian Colleges, Inc.+ 400 8
Cuno, Inc.+ 200 4
Digital Island+ 800 54
Ditech Communications Corp.+ 200 18
E-loan, Inc.+ 800 16
Epiphany, Inc.+ 500 43
Fairchild Semiconductor
International, Inc., Class A+ 1,200 30
Informatica Corp.+ 200 14
Intercept Group, Inc.+ 500 7
Interdent, Inc.+ 1,400 12
InterWorld Corp.+ 500 21
IXL Enterprises, Inc.+ 1,400 59
Keynote Systems, Inc.+ 400 18
Liquid Audio+ 400 14
Mail.com, Inc.+ 900 13
Media Metrix+ 400 19
Mortgage.com, Inc.+ 900 8
National Information Consortium,
Inc.+ 1,100 36
Network Access Solutions Corp.+ 900 12
Netzero, Inc.+ 2,000 41
ON2.COM, Inc.+ 1,400 16
Paradyne Networks Corp.+ 500 15
Phone.com, Inc.+ 700 144
Radio One, Inc.+ 400 20
Number Value
of Shares (000s)
--------- ---------
Reckson Service Industries, Inc.+ 600 $ 12
Too, Inc+ 742 12
Tumbleweed Communications Corp.+ 400 10
U.S. Interactive, Inc.+ 600 22
United Therapeutics Corp.+ 500 15
UnitedGlobalCom Inc.,Class A+ 700 61
Virginia Capital Bancshares, Inc. 400 6
Vitria Technology, Inc.+ 600 40
Wit Capital Group, Inc.+ 400 7
------
1,030
------
- ------------------------------------------------------------
MISCELLANEOUS FINANCE -- 6.0%
- ------------------------------------------------------------
Advanta Corp., Class A 700 12
Advest Group, Inc. 400 8
Affiliated Managers Group, Inc.+ 500 13
Alliance Capital Management LP+ 3,500 96
Allied Capital Corp. 1,200 24
American Express Co. 9,100 1,401
AmeriCredit Corp.+ 1,400 24
Ameritrade Holding Corp.,
Class A+ 3,300 54
AMRESCO, Inc.+ 2,400 7
Actrade International Ltd.+ 1,000 18
Associates First Capital Corp. 14,700 537
Bear Stearns Companies, Inc. 2,400 102
Bedford Property Investors 600 11
Berkshire Hathaway, Inc.,
Class A.+ 30 1,917
Boca Resorts, Inc., Class A+ 1,000 10
Cabot Industrial Trust 700 14
Capital One Financial Corp. 4,000 212
Cash America International, Inc. 1,300 12
Charles Schwab Corp. 16,500 642
Charter One Financial, Inc. 4,749 117
CIT Group, Inc. 3,200 76
Citigroup, Inc. 68,200 3,691
Commercial Federal Corp. 1,300 26
CompuCredit Corp.+ 800 20
Cornerstone Realty Income Trust 900 9
Countrywide Credit Industries,
Inc. 2,300 78
Duff & Phelps Credit Rating, Inc. 200 15
Dain Rauscher Corp. 400 21
Delta Financial Corp.+ 1,500 6
Dime Bancorp., Inc. 2,200 39
Donaldson, Lufkin, & Jenrette,
Inc. 2,600 135
Doral Financial Corp. 800 10
Dun & Bradstreet Corp. 3,200 94
Eaton Vance Corp. 700 24
89
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ----------
Edwards, Inc. 1,800 $ 54
E*Trade Group, Inc.+ 4,700 112
Everest Reinsurance Holdings,
Inc. 900 23
Fannie Mae 20,700 1,465
Federated Investors 1,700 29
Fidelity National Financial, Inc. 700 11
Financial Federal Corp+ 500 11
Financial Security Assurance
Holdings Ltd. 700 39
Finova Group, Inc. 1,300 57
First American Financial Corp. 1,200 18
First Sentinel Bancorp, Inc. 1,500 12
Franklin Resources, Inc. 5,000 175
Freddie Mac 14,000 757
Freedom Securities Corp. 700 10
Gabelli Asset Management, Inc.+ 700 10
Golden State Bancorp, Inc.+ 2,700 56
Goldman Sachs Group, Inc. 1,400 99
Hambrecht and Quist Group, Inc.+ 600 30
Healthcare Services Group+ 900 7
Heller Financial, Inc. 859 20
Household International, Inc. 9,700 433
Imperial Credit Industries+ 1,900 10
Investment Technology Group, Inc.+ 600 16
Investors Financial Services Corp. 400 15
Jefferies Group, Inc 500 11
John Nuveen Co., Class A 700 25
Jones Lang LaSalle, Inc.+ 800 10
JSB Financial, Inc. 200 12
JWGenesis Financial Corp.+ 900 13
Knight/Trimark Group, Inc.,
Class A+ 2,100 55
LabOne, Inc. 1,050 9
LaBranche & Co., Inc.+ 900 12
Legg Mason, Inc. 1,200 44
Lehman Brothers Holdings, Inc. 2,500 184
Leucadia National Corp. 1,200 28
Liberty Financial Companies, Inc. 900 22
LNR Property Corp. 700 14
Mail Well Holdings, Inc.+ 900 12
MBNA Corp. 16,200 448
Merrill Lynch & Co., Inc. 7,500 589
MicroFinancial, Inc. 1,000 11
Morgan Keegan, Inc. 700 13
Morgan Stanley Dean Witter
Discover & Co. 11,500 1,269
National Discount Broker Group,
Inc.+ 400 10
NCO Group, Inc.+ 761 32
New Century Financial Corp.+ 600 8
Number Value
of Shares (000s)
--------- ----------
NextCard, Inc.+ 1,000 $ 31
Northwest Bancorp, Inc. 1,500 12
NVEST LP 800 16
Ocwen Financial Corp.+ 2,920 20
Paine Webber Group, Inc. 3,000 122
PEC Israel Economic Corp.+ 400 14
Phoenix Investment Partners, Ltd.1,200 10
Pimco Advisors Holdings LP 900 31
Pioneer Group, Inc.+ 800 10
Price Enterprises, Inc.+ 1,000 8
Profit Recovery Group
International, Inc.+ 900 37
Providian Financial Corp. 2,900 316
Radian Group Inc. 759 40
Raymond James Financial, Inc. 1,100 22
Resource America, Inc. 1,200 9
Richmond County Financial Corp. 600 11
Sabre Group Holdings, Inc.+ 500 22
Siebert Financial Corp. 800 11
SLM Holding Corp. 3,300 161
Southwest Securities Group 330 8
Sovereign Bancorp, Inc. 2,960 26
Starwood Financial, Inc.+ 800 20
Student Loan Corp. 500 24
T. Rowe Price Associates, Inc. 2,400 85
TCF Financial Corp. 1,600 47
TeleBanc Financial Corp.+ 700 17
U.S. Trust Corp. 300 24
UniCapital Corp. 1,300 2
United Asset Management Co. 1,100 23
Waddell & Reed Financial, Inc.,
Class A 1,300 31
Washington Federal, Inc. 1,200 27
Webster Financial Corp. 700 20
WFS Financial, Inc.+ 600 12
White Mountain Insurance Group,
Inc.+ 100 13
World Acceptance Corp.+ 1,400 7
Wyndham International, Inc.+ 3,200 9
-------
17,073
-------
- ------------------------------------------------------------
NON-FERROUS METALS -- 0.3%
- ------------------------------------------------------------
Alcoa, Inc. 7,400 450
Asarco, Inc. 700 21
Commercial Metals Co. 500 16
Commonwealth Industries, Inc. 1,300 13
Cyprus Amax Minerals Co. 700 14
90
<PAGE>
Number Value
of Shares (000s)
--------- ----------
Engelhard Corp. 2,500 $ 44
Freeport-McMoRan Copper &
Gold, Inc., Class B 3,300 55
Kaiser Aluminum Corp.+ 1,300 8
MAXXAM, Inc.+ 200 9
Minerals Technologies, Inc. 400 17
Mueller Industries, Inc.+ 700 22
Phelps Dodge Corp. 2,165 122
Reliance Steel & Aluminum Co. 650 14
Reynolds Metals Co. 1,200 73
Salton, Inc.+ 400 11
Southern Peru Copper Corp. 1,000 16
Stillwater Mining Co.+ 700 14
Titanium Metals Corp. 1,400 8
USEC, Inc. 1,900 17
Wolverine Tube, Inc.+ 700 10
-----
954
-----
- ------------------------------------------------------------
OIL - DOMESTIC -- 0.8%
- ------------------------------------------------------------
Amerada Hess Corp. 1,800 103
Ashland, Inc. 1,700 56
Atlantic Richfield Co. 6,500 606
Belco Oil & Gas Corp.+ 900 6
Berry Petroleum, Class A+ 1,000 13
Conoco Inc., Class B 7,200 195
Consol Energy, Inc. 1,500 17
Cross Timbers Oil Co. 800 9
Crystal Gas Storage, Inc.+ 100 5
Devon Energy Corp. 1,602 62
Diamond Offshore Drilling, Inc. 2,800 89
Frontier Oil Corp.+ 900 5
Geoscience Corp., Class A+ 200 1
Global Industries, Ltd.+ 1,800 14
Gulf Island Fabrication, Inc.+ 600 6
Houston Exploration Co.+ 500 10
HS Resources, Inc.+ 600 9
Kerr-McGee Corp. 1,800 97
Meridian Resource Corp. 1,600 7
Midcoast Energy Resources+ 100 2
Murphy Oil Corp. 900 50
National-Oilwell, Inc.+ 1,100 15
Patina Oil & Gas Corp. 800 7
Patterson Energy, Inc.+ 900 12
Phillips Petroleum Co. 5,100 237
Pioneer Natural Resources Co.+ 2,000 19
Pogo Producing Co. 800 16
Pool Energy Services Co.+ 700 15
Number Value
of Shares (000s)
--------- ---------
Pride International, Inc.+ 1,500 $ 21
R&B Falcon Corp.+ 3,900 49
Santa Fe Snyder Corp.+ 3,400 29
St. Mary Land & Exploration Co. 400 10
Superior Energy Services+ 900 6
Tesoro Petroleum Corp.+ 600 7
Tosco Corp. 3,100 78
Trans Montaigne Oil, Inc.+ 900 10
Transocean Offshore, Inc. 2,100 57
Ultramar Diamond Shamrock Corp. 1,800 44
Unocal Corp. 4,900 169
UNOVA, Inc.+ 1,000 13
USX-Marathon Group 6,300 183
------
2,359
------
- ------------------------------------------------------------
OIL - INTERNATIONAL -- 2.5%
- ------------------------------------------------------------
Chevron Corp. 13,200 1,205
Conoco, Class A 3,200 88
EEX Corp. 1,200 4
Exxon Corp. 49,000 3,629
Mobil Corp. 15,800 1,525
Texaco, Inc. 11,200 687
------
7,138
------
- ------------------------------------------------------------
OPTICAL & PHOTO -- 0.2%
- ------------------------------------------------------------
Anacomp, Inc.+ 200 3
Avid Technology, Inc.+ 200 2
BMC Industries, Inc. 700 4
C-Cube Microsystems, Inc.+ 800 36
Dentsply International, Inc. 1,100 26
Eastman Kodak Co. 6,400 441
Ingram Micro, Inc., Class A+ 1,400 16
Ocular Sciences, Inc.+ 500 9
Photronics, Inc.+ 600 13
Polaroid Corp. 900 20
Ultratech Stepper, Inc.+ 200 3
Wesley Jessen VisionCare, Inc.+ 500 13
-----
586
-----
- ------------------------------------------------------------
PAPER & FOREST PRODUCTS -- 0.9%
- ------------------------------------------------------------
Boise Cascade Corp. 1,200 43
Bowater, Inc. 1,000 53
Buckeye Technology, Inc.+ 800 12
Caraustar Industries, Inc. 500 12
Champion International Corp. 1,900 110
Chesapeake Corp. 500 15
Consolidated Papers, Inc. 1,900 59
91
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
CSS Industries, Inc.+ 400 $ 9
Fort James Corp. 4,400 116
Georgia-Pacific Corp. 1,600 38
Georgia-Pacific Group 3,400 135
International Paper Co. 8,300 437
Kimberly-Clark Corp. 10,766 680
Longview Fibre Co. 1,200 14
Louisiana-Pacific Corp. 2,000 25
Mead Corp. 2,100 76
Pentair, Inc. 1,000 38
PH Glatfelter Co. 1,000 15
Potlatch Corp. 600 25
Rayonier, Inc. 600 25
Rock Tennessee Co., Class A 1,000 15
Schweitzer-Mauduit International,
Inc. 900 11
Shorewood Packaging 700 9
St. Joe Co. 1,700 41
Temple Inland, Inc. 1,100 64
Thermo Fibertek, Inc.+ 1,100 8
Wausau Mosinee Paper Corp. 900 11
Westvaco Corp. 2,100 62
Weyerhaeuser Co. 4,100 245
Willamette Industries, Inc. 2,300 96
------
2,499
------
- ------------------------------------------------------------
PRODUCER GOODS & MANUFACTURING -- 5.3%
- ------------------------------------------------------------
Advanced Energy Industries, Inc.+ 500 21
Ag-Chem Equipment, Inc.+ 700 8
AGCO Corp. 1,200 13
Airgas, Inc.+ 1,300 12
Albany International Corp.,
Class A+ 900 14
Allied Signal, Inc. 11,100 632
American Standard Corp.+ 1,500 57
AMETEK, Inc. 600 12
Andersons, Inc. 600 5
Applied Industrial Technologies,
Inc. 400 6
Applied Power, Inc., Class A 900 26
AptarGroup, Inc. 700 19
Artesyn Technologies+ 800 16
Arthrocare Corp.+ 300 22
Astec Industries, Inc.+ 500 12
Atchison Casting Corp.+ 900 9
Aurora Biosciences Corp.+ 1,200 15
Avery Dennison Corp. 2,300 144
Bacou USA, Inc.+ 500 8
Baldor Electric, Co. 800 16
Ballantyne of Omaha, Inc.+ 900 5
Number Value
of Shares (000s)
--------- ---------
Barnes Group, Inc. 500 $ 10
Beckman Coulter, Inc. 600 28
Blyth Industries, Inc.+ 900 23
Boise Cascade Office Products
Corp.+ 1,300 13
Boston Acoustics, Inc. 800 9
Brady Corp., Class A 500 15
Briggs & Stratton Corp. 500 29
C3, Inc.+ 700 7
CardioThoracic Systems, Inc.+ 600 10
Case Corp. 1,500 80
Caterpillar, Inc. 7,100 392
Chromatics Color Sciences+ 800 5
ChromaVision Medical Systems,
Inc.+ 800 13
CIENA Corp.+ 2,800 99
CLARCOR, Inc. 700 12
Collins & Aikman Corp. 1,300 8
Columbus Mckinnon Corp. 500 6
Compx International, Inc.+ 800 15
Cooper Industries, Inc. 1,900 82
Corning, Inc. 5,000 393
Credence Systems Corp.+ 500 23
CTB International Corp.+ 1,100 7
Cyberonics, Inc.+ 1,200 17
Dayton Superior Corp. Class A+ 800 13
Deere & Co. 4,800 174
Diamond Technology Partners,
Inc.+ 200 13
Digital Lightwave, Inc.+ 1,300 22
DII Group, Inc.+ 600 22
The Dixie Group, Inc.+ 1,100 7
Donaldson Co., Inc. 900 21
Dover Corp. 4,200 179
Dril-Quip, Inc.+ 500 12
DT Industries, Inc. 1,200 6
Dycom Industries, Inc.+ 600 20
E-tek Dynamics, Inc.+ 1,400 93
Elcor Corp. 450 11
Emulex Corp. 400 62
Farr Co.+ 900 7
Federal Signal Corp. 1,000 19
Fisher Scientific International+ 800 20
Flowserve Corp. 800 14
FMC Corp.+ 700 28
Foster Wheeler Corp. 900 10
Franklin Electric Corp. 200 14
Gasonics International Corp.+ 1,100 18
General Electric Co. (b) 66,100 8,961
Gleason Corp. 800 14
92
<PAGE>
Number Value
of Shares (000s)
--------- ----------
Graco, Inc. 500 $ 17
Hardinge, Inc. 800 12
Harsco Corp. 800 24
Hawk Corp. 1,200 5
Helix Technology Corp. 400 16
Herman Miller, Inc. 1,600 35
Hexcel Corp.+ 300 2
Hon Industries, Inc. 1,300 26
Howmet International, Inc.+ 1,900 28
Hubbell, Inc., Class B 1,400 39
Hughes Supply, Inc. 500 11
Husmann International, Inc. 900 14
IDEX Corp. 600 15
IGEN International, Inc.+ 600 15
Illinois Tool Works, Inc. 5,000 366
IMCO Recycling, Inc. 600 9
Ingersoll-Rand Co. 3,400 178
Intermagnetics General Corp.+ 1,300 8
Ionics, Inc.+ 400 12
ITT Industries, Inc. 1,800 62
Jabil Circuit, Inc.+ 1,800 94
JLG Industries, Inc. 900 12
Johnson Controls, Inc. 1,800 109
Kaydon Corp. 600 15
Kennametal, Inc. 600 17
Laser Vision Centers, Inc.+ 600 5
LCA-vision, Inc.+ 1,400 6
Lennox International, Inc. 1,100 11
Lincoln Electric Co., Class A 1,000 22
Lindsay Manufacturing Co. 800 16
Lydall, Inc+ 600 4
Magnatek, Inc.+ 1,500 10
Manitowoc Co., Inc. 600 18
Mark IV Industries, Inc. 1,100 21
Matthews International Corp.,
Class A 400 10
Maverick Tube Corp.+ 1,000 19
Meade Instruments Corp.+ 400 10
Mechanical Technology, Inc.+ 600 13
Micrel, Inc.+ 800 44
Milacron, Inc. 800 13
Millipore Corp. 1,000 32
Mine Safety Appliances Co. 300 20
MSC Industrial Direct, Inc.+ 1,000 10
NACCO Industries, Inc., Class A 300 14
Network Peripherals, Inc.+ 600 17
Nordson Corp. 300 13
Novoste Corp.+ 600 10
Number Value
of Shares (000s)
--------- ---------
Onix Systems, Inc.+ 2,500 $ 14
Pall Corp. 2,500 55
Park Ohio Holdings Corp.+ 800 8
Parker-Hannifin Corp. 2,200 101
Penn Engineering & Manufacturing
Corp. 500 12
Performance Technologies, Inc.+ 600 13
Polycom, Inc.+ 700 35
Powell Industries, Inc.+ 1,500 11
Powerwave Technologies, Inc.+ 500 33
Precision Castparts Corp. 600 18
PRI Automation, Inc.+ 500 20
Printronix, Inc.+ 600 12
Puerto Rican Cement Co., Inc. 400 14
Quanex Corp. 400 9
Quixote Corp. 800 12
Rare Medium Group, Inc.+ 800 12
Rayovac Corp.+ 500 12
Research Frontiers, Inc.+ 800 8
Rofin-Sinar Technologies, Inc.+ 1,000 7
Roper Industries, Inc. 600 19
Safeguard Scientifics, Inc.+ 700 59
Sanmina Corp.+ 1,100 99
Satcon Technology Corp.+ 1,000 10
Sauer, Inc. 200 3
Scott Technologies, Inc.+ 700 13
Shaw Group, Inc.+ 200 5
SLI, Inc.+ 600 6
Snap-On, Inc. 1,400 43
SonoSite, Inc.+ 400 12
Specialty Equipment Companies,
Inc.+ 500 10
SpeedFam-IPEC, Inc.+ 600 7
Springs Industries, Inc. 400 16
SPS Technologies, Inc.+ 300 9
SPX Corp.+ 700 59
Standex International Corp. 500 10
Steelcase, Inc. 200 3
Stewart & Stevenson Services 700 9
Sunrise Technologies
International+ 900 6
Tecumseh Products Co., Class A 500 24
Teleflex, Inc. 700 24
Tennant Co. 300 10
Tenneco, Inc.+ 3,400 54
Terex Corp.+ 500 13
Texas Industries, Inc. 500 18
Thermo Bioanalysis Corp.+ 900 15
Thermo Ecotek Corp.+ 300 2
Thermo Instrument Systems, Inc.+ 2,300 22
93
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- ---------
Thermo Optek Corp.+ 1,600 $ 14
Thermoquest Corp.+ 1,000 11
Thomas Industries Inc. 500 9
Thoratec Labs Corp.+ 1,100 8
Three-Five Systems, Inc.+ 1,100 37
The Timken Co. 1,200 22
Trex Co., Inc.+ 500 12
Trinity Industries, Inc. 800 24
TriPath Imaging, Inc.+ 700 3
Tut Systems, Inc.+ 300 10
U.S. Industries, Inc. 1,800 27
UCAR International, Inc.+ 900 18
Universal Forest Products, Inc. 400 6
Valhi, Inc. 2,400 26
Valmont Industries, Inc. 600 10
W.W. Grainger, Inc. 1,900 81
Waters Corp.+ 1,300 69
Watsco, Inc. 700 7
Watts Industries, Inc., Class A 700 10
WMS Industries, Inc.+ 700 9
Woodward Governor Co. 200 5
Wyman Gordon Co.+ 400 8
York International Corp. 800 19
Young Innovations, Inc.+ 600 9
-------
15,047
-------
- ------------------------------------------------------------
RAILROAD & SHIPPING -- 0.4%
- ------------------------------------------------------------
Alexander & Baldwin, Inc. 800 19
Burlington Northern Santa Fe
Corp. 9,400 300
C.H. Robinson Worldwide, Inc. 800 27
CSX Corp. 4,300 176
Florida East Coast Industry, Inc. 700 26
GATX Corp. 900 30
Greenbrier Co., Inc. 200 2
Halter Marine Group, Inc.+ 1,500 8
Kansas City Southern Industries,
Inc. 2,300 109
MotivePower Industries, Inc.+ 800 10
Newport News Shipbuilding, Inc. 700 21
Norfolk Southern Corp. 7,600 186
Overseas Shipholding Group, Inc. 1,000 13
RailTex, Inc.+ 200 3
Transportation Technologies
Industries, Inc.+ 600 9
Union Pacific Corp. 5,000 279
Westinghouse Air Brake Co. 600 11
Wisconsin Central Transportation
Corp.+ 900 12
-------
1,241
-------
Number Value
of Shares (000s)
--------- -------
- ------------------------------------------------------------
REAL PROPERTY -- 1.0%
- ------------------------------------------------------------
Alexandria Real Estate Equities,
Inc. 500 $ 14
AMB Property Corp. 1,800 36
American Health Properties 800 16
American Real Estate Partners
LP+ 1,300 10
American Realty Trust, Inc. 700 12
Amresco Capital Trust, Inc. 1,300 11
Apartment Investment &
Management Co. 1,400 53
Archstone Communities Trust 2,800 56
Arden Realty, Inc. 1,300 26
AvalonBay Communities, Inc. 1,300 42
Avatar Holdings, Inc.+ 500 9
Boston Properties, Inc. 1,300 39
Bradley Real Estate, Inc. 700 12
Brandywine Realty Trust 700 12
BRE Properties, Class A 1,000 23
Burnham Pacific Property, Inc. 1,500 15
Camden Property Trust 800 22
Capstead Mortgage Corp. 1,700 7
Carey Diversified LLC 700 12
Carramerica Realty Corp. 1,400 31
Catellus Development Corp.+ 2,000 24
CB Richard Ellis Services+ 600 7
CBL & Associates Properties 500 11
Center Trust, Inc 1,000 10
Centerpoint Properties Corp. 500 16
Chateau Communities, Inc. 600 15
Chelsea GCA Realty, Inc. 300 9
Colonial Properties Trust 500 13
Cornerstone Properties 2,400 35
Correctional Properties Trust 600 8
Cousins Properties, Inc. 700 22
Crescent Real Estate Equity Co. 2,300 38
Crestline Capital Corp.+ 800 18
CV Real Estate Investment Trust,
Inc. 1,000 12
Developers Diversified Realty 1,200 17
Duke-Weeks Realty Corp. 2,290 45
Dynex Capital, Inc.+ 1,200 8
Eastgroup Properties 500 9
Equity Inns, Inc. 1,400 11
Equity Office Properties Trust 5,100 113
Equity One, Inc. 800 8
Equity Residential Properties
Trust 2,600 109
Essex Property Trust, Inc. 400 13
Fairfield Communities, Inc.+ 1,000 12
Federal Realty Investment Trust 700 13
94
<PAGE>
Number Value
of Shares (000s)
--------- ---------
FelCor Lodging Trust, Inc 1,300 $ 22
First Industrial Realty Trust 700 17
First Washington Realty Trust 600 12
Forest City Enterprises, Inc. 600 15
Franchise Finance Corp. 1,000 22
Gables Residential Trust 500 12
General Growth Properties 1,100 32
Getty Realty Corp. 1,000 12
Glenborough Realty Trust, Inc. 700 9
Glimcher Realty Trust 600 9
Golf Trust of America LP 500 9
Grove Property Trust 1,000 12
Health Care Real Estate Investment
Trust, Inc. 700 13
Health Care Property Investors,
Inc. 600 16
Healthcare Realty Trust, Inc. 700 13
Highwoods Properties, Inc. 1,300 31
Home Properties of NY, Inc. 500 13
Homestore.com, Inc.+ 1,400 66
Hospitality Properties Trust 1,100 23
Host Marriott Corp. 4,400 40
HRPT Properties Trust 2,500 23
Hugoton Royalty Trust 1,000 10
IndyMac Mortgage Holdings, Inc. 1,600 22
Innkeepers USA Trust 1,100 9
IRT Property Co. 1,200 10
JDN Realty Corp. 600 11
JP Realty, Inc. 500 9
Keystone Property Trust 400 6
Kilroy Realty Corp. 500 10
Kimco Realty Corp. 1,300 44
Koger Equity, Inc. 700 11
Lennar Corp. 1,100 18
Liberty Property Trust 1,300 30
LTC Propertys, Inc. 1,000 11
Macerich Co. 700 14
Mack-Cali Realty Corp. 1,200 31
Manufactured Home Communities 500 12
Meditrust Corp. 2,900 23
Meristar Hospitality Corp. 900 14
Mid-America Apartment Communities 500 11
Mills Corp. 500 9
National Golf Properties, Inc. 500 11
National Health Investors 700 11
Nationwide Health Properties,
Inc. 1,100 18
New Plan Excel Realty Trust 1,800 31
Number Value
of Shares (000s)
--------- ---------
Newhall Land & Farming Co. 600 $ 15
Omega Healthcare Investors 500 10
Pacific Gulf Properties, Inc. 500 10
PAN Pacific Retail Properties,
Inc. 600 11
Parkway Properties, Inc./MD 300 9
PMC Commercial Trust 700 8
Post Properties, Inc. 800 31
Premier Parks, Inc.+ 1,500 43
Prentiss Properties Trust 800 17
Prison Realty Trust, Inc. 2,300 23
Prologis Trust 3,300 64
Ps Business Parks, Inc./CA 500 11
Public Storage, Inc. 2,600 63
Realty Income Corp. 500 11
Reckson Associates Realty 700 13
Regency Realty Corp. 1,200 24
RFS Hotel Investors, Inc. 900 11
Rouse Co. 1,400 31
Senior Housing Properties Trust 250 3
Shurgard Storage Centers, Inc. 600 14
Simon Property Group, Inc. 3,400 78
SL Green Realty Corp. 500 9
Smith Residential 400 14
Sovran Self Storage, Inc. 500 11
Spieker Properties, Inc. 1,200 42
Storage USA, Inc. 600 17
Summit Properties, Inc. 600 11
Sun Communities, Inc. 300 10
Sunstone Hotel Investors, Inc. 1,200 11
Tanger Factory Outlet Centers 500 11
Taragon Realty Investors, Inc. 1,300 19
Taubman Centers, Inc. 900 10
Trammell Crow Co.+ 900 13
Trinet Corporate Realty Trust 500 12
United Dominion Realty Trust 1,900 21
United Park City Mines+ 200 6
Universal Health Realty Income 500 8
Urban Shopping Centers, Inc. 400 10
Vornado Realty Trust 1,700 54
Walden Residential Properties,
Inc. 700 15
Washington Real Estate
Investment Trust 700 11
Weingarten Realty Investment 600 23
Westfield America, Inc. 1,400 19
------
2,718
------
95
<PAGE>
Number Value
of Shares (000s)
--------- ---------
- ------------------------------------------------------------
RETAIL -- 6.2%
- ------------------------------------------------------------
99 Cents Only Stores+ 600 $ 18
Abercrombie & Fitch Co.+ 2,000 55
Albertson's, Inc. 8,468 307
Amazon.com, Inc.+ 6,800 480
American Eagle Outfitters, Inc.+ 900 39
Ames Department Stores, Inc.+ 600 19
AnnTaylor Stores Corp.+ 600 26
Ashford.com, Inc.+ 300 3
Authentic Fitness Corp. 1,000 19
AutoZone, Inc.+ 3,000 80
Aviall, Inc. 800 7
Barnes & Noble, Inc.+ 1,400 29
Bebe Stores, Inc. 500 13
Bed, Bath & Beyond, Inc.+ 2,900 97
Best Buy Co., Inc.+ 4,100 228
Beyond.com Corp.+ 700 6
Big Entertainment, Inc.+ 800 14
BJ's Wholesale Club, Inc.+ 1,500 46
The Bombay Co., Inc.+ 1,700 7
Borders Group, Inc.+ 1,400 18
Brown Shoe Company, Inc. 600 11
Burlington Coat Factory
Warehouse Corp. 900 15
Cameron Ashley Building
Products+ 1,000 9
Casey's General Stores, Inc. 900 12
The Cato Corp., Class A 900 10
Cdnow, Inc.+ 700 9
Central Garden & Pet Co.+ 1,300 9
Charming Shoppes, Inc.+ 2,000 10
Cheap Tickets, Inc.+ 500 8
The Children's Place Retail
Stores, Inc.+ 600 16
Circuit City Stores, Inc. 4,000 171
Claire's Stores, Inc. 1,000 18
Coldwater Creek, Inc.+ 700 17
CompUSA, Inc.+ 1,600 9
Consolidated Stores Corp.+ 2,200 40
Cost Plus, Inc.+ 500 18
Costco Wholesale Corp.+ 4,400 353
Creative Computers, Inc.+ 1,400 9
CVS Corp. 8,000 348
D&K Healthcare Resources, Inc.+ 400 6
Dayton Hudson Corp. 8,900 575
DEB Shops, Inc. 500 11
Delhaize America, Inc. 3,266 61
Dillards, Inc., Class A 2,200 42
Dollar General Corp. 4,500 119
Number Value
of Shares (000s)
--------- ---------
Dollar Tree Stores, Inc.+ 1,300 $ 57
The Dress Barn, Inc.+ 200 4
Drugstore.Com+ 800 29
Duane Reade, Inc.+ 500 13
eBay, Inc.+ 2,500 338
Egghead.com, Inc.+ 1,600 15
Electronics Boutique Holdings
Corp.+ 800 16
Etec Systems, Inc.+ 500 19
Etoys, Inc.+ 2,300 137
Family Dollar Stores, Inc. 3,400 70
Federated Department Stores,
Inc.+ 4,200 179
Gap, Inc. 17,200 639
Genesco, Inc.+ 1,000 13
Global Imaging Systems, Inc.+ 800 11
Goody's Family Clothing, Inc.+ 1,300 13
Gottschalks Inc.+ 1,000 9
Great Atlantic & Pacific Tea Co.,
Inc. 800 23
Guitar Center, Inc.+ 1,100 10
Handleman Co.+ 1,000 16
Hannaford Bros. Co., Inc. 800 56
Harmonic, Inc.+ 600 36
Heilig-Meyers Co. 1,800 8
Home Depot, Inc. 29,900 2,257
Homebase, Inc.+ 1,200 5
IKON Office Solutions 2,800 19
Insight Enterprises, Inc.+ 500 19
Intertan, Inc.+ 500 11
Intimate Brands, Inc. 4,970 204
J. Baker Inc. 1,100 6
J.C. Penney Co., Inc. 5,400 137
Jo-Ann Stores, Inc., Class A+ 700 10
Kmart Corp.+ 9,800 99
Kohl's Corp.+ 3,300 247
Kroger Co.+ 16,800 350
Lands' End, Inc. 600 46
Limited, Inc. 4,400 181
Longs Drug Stores, Inc. 800 22
Lowe's Companies, Inc. 7,600 418
Marsh Supermarkets, Inc. 1,000 11
May Department Stores Co. 6,700 232
Metromedia Fiber Network, Inc.,
Class A+ 3,805 126
Michaels Stores, Inc.+ 600 20
Movado Group, Inc. 500 11
Multiple Zones International,
Inc.+ 1,600 9
Musicland Stores Corp.+ 1,200 9
The Neiman-Marcus Group, Inc.,
Class A+ 900 22
96
<PAGE>
Number Value
of Shares (000s)
--------- ----------
The Neiman Marcus Group, Inc.,
Class B+ 451 $ 10
Nordstrom, Inc. 2,900 72
Office Depot, Inc.+ 7,500 93
OfficeMax, Inc.+ 1,900 10
Onsale Inc+ 700 12
Payless Shoesource, Inc.+ 700 32
Pep Boys-Manny, Moe, & Jack 900 11
Petco Animal Supplies, Inc.+ 800 9
Pier 1 Imports, Inc. 1,600 10
Pomeroy Computer Resources,
Inc.+ 1,100 11
Priceline.com, Inc.+ 3,000 181
Restoration Hardware, Inc.+ 1,000 10
Rite Aid Corp. 5,200 46
Ross Stores, Inc. 1,800 37
Ruddick Corp. 900 15
Rush Enterprises, Inc.+ 500 7
Safeway, Inc.+ 10,200 360
Saks, Inc.+ 2,800 48
School Specialty, Inc.+ 800 12
Schultz SAV O Stores, Inc. 800 12
Sears, Roebuck & Co. 7,600 214
Shop At Home, Inc. 200 2
ShopKo Stores, Inc.+ 600 15
Skymall, Inc.+ 1,300 11
Sotheby's Holdings, Inc.,
Class A 1,100 32
Spiegel, Inc., Class A+ 2,500 36
Stamps.com, Inc.+ 800 46
Staples, Inc.+ 9,300 206
Stein Mart, Inc.+ 1,700 11
Sunglass HUT International,
Inc.+ 1,100 13
SUPERVALU, Inc. 2,708 57
Systemax Inc.+ 1,300 11
Tandy Corp. 3,800 239
Tiffany & Co., Inc. 1,400 83
TJX Companies, Inc. 6,500 176
Toys "R" Us, Inc.+ 5,000 71
Tractor Supply Co.+ 500 10
Tuesday Morning Corp.+ 800 18
Ubid, Inc.+ 640 23
Unifirst Corp. 900 11
United Stationers, Inc.+ 700 18
Value America, Inc.+ 800 10
Value City Department Stores,
Inc.+ 700 11
Venator Group, Inc.+ 2,500 18
Wal-Mart Stores, Inc. 89,800 5,091
Walgreen Co. 20,300 511
Number Value
of Shares (000s)
--------- ---------
Weis Markets, Inc. 800 $ 27
West Marine, Inc.+ 1,000 9
Whitehall Jewellers, Inc.+ 400 10
Wild Oats Markets, Inc.+ 300 11
Winn-Dixie Stores, Inc. 3,000 81
Zale Corp.+ 700 29
-------
17,708
-------
- ------------------------------------------------------------
STEEL -- 0.1%
- ------------------------------------------------------------
AK Steel Holding Corp. 2,627 45
Allegheny Teledyne, Inc. 3,700 56
Bethlehem Steel Corp.+ 2,300 16
Carpenter Technology Corp. 500 12
Citation Corp.+ 200 3
Cleveland-Cliffs, Inc. 300 9
Gibraltar Steel Corp.+ 200 5
Lone Star Technologies, Inc.+ 1,000 21
LTV Corp. 1,700 6
Material Sciences Corp.+ 800 10
National Steel Corp., Class B 1,200 7
NS Group, Inc.+ 900 9
Nucor Corp. 1,700 88
Roanoke Electric Steel Corp. 800 13
Ryerson Tull, Inc. 500 10
Steel Dynamics, Inc.+ 900 12
Steel Technologies, Inc. 700 8
USX-U.S. Steel Group, Inc. 1,800 46
Worthington Industries, Inc. 1,900 32
-------
408
-------
- ------------------------------------------------------------
TELEPHONE -- 7.8%
- ------------------------------------------------------------
Adaptive Broadband Corp.+ 500 18
Adtran, Inc.+ 800 30
Advanced Communications
Group, Inc.+ 300 2
Aerial Communications, Inc.+ 1,200 51
Allegiance Telecom, Inc.+ 1,300 90
Alltel Corp. 6,235 519
American Tower Corp., Class A+ 2,900 55
ANTEC Corp.+ 700 34
Arch Communications Group+ 500 3
Aspect Telecommunications Corp.+ 1,500 38
Associated Group, Inc., Class A+ 500 34
AT&T Corp. 64,400 3,011
Bell Atlantic Corp. 31,300 2,033
BellSouth Corp. 38,000 1,710
Boston Communications Group+ 1,300 7
97
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
---------- ----------
Caprock Communications Corp.+ 700 $ 20
Centennial Cellular Corp.+ 700 39
CenturyTel, Inc. 2,900 117
CFW Communication Co. 500 11
Cidco, Inc.+ 200 3
Cincinnati Bell, Inc.+ 2,700 56
Commnet Cellular, Inc.+ 500 16
Commonwealth Telephone
Enterprises, Inc.+ 500 27
COMSAT Corp. 452 8
Conestoga Enterprise, Inc. 200 4
Convergent Communications, Inc.+ 200 2
Copper Mountain Networks+ 500 37
CT Communications, Inc. 200 10
D & E Communications, Inc. 400 8
Destia Communications, Inc.+ 200 3
Emmis Communications Corp.,
Class A+ 300 22
Excel Switching Corp.+ 700 25
FirstCom Corp.+ 300 3
Focal Communications Corp.+ 1,200 25
General Communication, Inc.+ 500 2
Global Crossing Ltd.+ 6,560 227
Globix Corp.+ 200 7
GST Telecommunications, Inc.+ 1,300 9
GTE Corp. 19,700 1,478
Hickory Tech Corp. 200 3
ICG Communications, Inc.+ 800 13
IDT Corp.+ 500 11
Inet Technologies, Inc.+ 800 31
Inter Tel, Inc. 600 10
Interdigital Communications Corp.+ 500 3
Intermedia Communications, Inc.+ 1,000 26
International Telecommunication
Data Systems, Inc.+ 300 3
ITC DeltaCom, Inc.+ 1,100 26
IXNET, Inc.+ 900 13
JFAX.COM, Inc.+ 400 2
Leap Wireless International,
Inc.+ 800 31
Level 3 Communications, Inc.+ 6,800 465
MCI WorldCom, Inc.+ 37,833 3,247
McLeodUSA, Inc., Class A+ 3,100 138
MGC Communications, Inc.+ 500 14
Net2Phone, Inc.+ 200 11
Network Plus Corp.+ 1,000 12
Nextel Communications, Inc.,
Class A+ 6,700 577
Number Value
of Shares (000s)
---------- ---------
NEXTLINK Communications, Inc.,
Class A+ 1,400 $ 84
North Pittsburgh Systems, Inc. 200 3
Northeast Optic Network, Inc.+ 300 11
Northpoint Communications+ 2,300 62
NTL, Inc.+ 2,075 156
P-Com, Inc.+ 400 2
Pacific Gateway Exchange, Inc.+ 500 11
Pagemart Wireless, Inc.+ 400 2
PairGain Technologies, Inc.+ 1,400 17
Plantronics, Inc.+ 300 18
Powertel, Inc.+ 700 41
Price Communications Corp.+ 1,155 25
Primus Telecommunications
Group, Inc.+ 700 15
Qwest Communications
International, Inc.+ 14,100 508
RCN Corp.+ 1,500 72
SBC Communications, Inc. 68,962 3,513
Sprint Corp. (FON Group) 17,400 1,293
Sprint Corp. (PCS Group)+ 8,900 738
STAR Telecommunications, Inc.+ 1,400 11
TALK.com, Inc.+ 1,200 19
Telephone & Data Systems, Inc. 1,300 150
Teligent, Inc.+ 200 9
Tessco Technologies, Inc.+ 400 7
Time Warner Telecom, Inc.,
Class A+ 500 13
U.S. Cellular Corp.+ 1,800 159
US LEC Corp.+ 200 6
US WEST, Inc. 10,100 617
Viatel, Inc.+ 700 23
Voicestream Wireless Corp.+ 2,000 198
Western Wireless Corp., Class A+ 900 48
Winstar Communications, Inc.+ 1,100 43
World Access, Inc.+ 1,200 15
-------
22,319
-------
- ------------------------------------------------------------
TOBACCO -- 0.5%
- ------------------------------------------------------------
800-Jr Cigar, Inc.+ 200 2
Brooke Ltd. 725 11
Loew's Corp. 2,100 149
Nabisco Group Holdings Corp. 6,500 83
Philip Morris Companies, Inc. 48,300 1,217
R.J. Reynolds Tobacco Holdings,
Inc. 2,066 45
Universal Corp. 600 14
UST, Inc. 3,500 97
------
1,618
------
98
<PAGE>
Number Value
of Shares (000s)
--------- ---------
- ------------------------------------------------------------
TRAVEL & RECREATION -- 1.1%
- ------------------------------------------------------------
Acxiom Corp.+ 1,800 $ 30
American Classic Voyager+ 400 10
Anchor Gaming, Inc.+ 300 18
Argosy Gaming Co.+ 800 10
Audiovox Corp., Class A+ 600 12
Aztar Corp.+ 1,000 10
Bally Total Fitness Holding
Corp.+ 500 12
Boyd Gaming Corp.+ 2,800 18
Brunswick Corp. 1,900 43
Budget Group, Inc.+ 1,600 11
Callaway Golf Co. 1,500 20
Carnival Corp. 12,400 552
Cedar Fair LP 1,100 22
Central Parking Corp. 700 19
Championship Auto Racing
Teams, Inc.+ 500 11
Choice Hotels International,
Inc.+ 1,000 15
Coleman Co., Inc.+ 1,200 11
Dover Downs Entertainment, Inc. 700 11
Extended Stay Amererica, Inc.+ 1,800 15
Harrah's Entertainment, Inc.+ 2,600 75
Hilton Hotels Corp. 5,100 47
Hollywood Park Inc.+ 700 12
International Speedway Corp.,
Class A 345 18
Interstate Hotels Corp.+ 90
Isle of Capris Casinos, Inc.+ 1,100 13
Mandalay Resort Group+ 1,800 34
The Marcus Corp. 800 11
Marriott International, Inc.,
Class A 5,000 168
MGM Grand, Inc.+ 1,300 66
Mirage Resorts, Inc.+ 4,000 58
Navigant International, Inc. 1,100 9
Park Place Entertainment Corp. 6,100 80
Players International Inc.+ 900 7
Polaris Industries, Inc. 600 21
Prime Hospitality Corp.+ 1,300 10
Promus Hotel Corp.+ 1,500 51
ResourtQuest International, Inc.+ 600 5
Royal Caribbean Cruises Ltd. 3,400 180
Speedway Motorsports, Inc.+ 800 35
Starwood Hotels & Resorts
Worldwide, Inc. 3,780 87
Station Casinos, Inc.+ 900 22
Suburban Lodges of America+ 1,300 7
Sunburst Hospitality Corp.+ 1,400 8
Number Value
of Shares (000s)
--------- ---------
Sunterra+ 1,100 $ 11
Travel Services International,
Inc.+ 400 4
Trendwest Resorts, Inc.+ 500 11
Vail Resorts, Inc.+ 800 18
Walt Disney Co.+ 41,500 1,095
------
3,013
------
- ------------------------------------------------------------
TRUCKING & FREIGHT -- 0.2%
- ------------------------------------------------------------
Air Express International Corp. 600 16
AMERCO+ 500 15
American Freightways Corp.+ 700 14
Arkansas Best Corp.+ 800 11
CNF Transportation, Inc. 900 30
Consolidated Freightways Corp.+ 1,000 8
Eagle USA Airfreight, Inc.+ 650 19
Expeditores International of
Washington, Inc. 1,100 41
Forward Air Corp+ 400 12
Fritz Companies, Inc.+ 300 3
Heartland Express, Inc.+ 700 9
HUB Group, Inc.+ 400 8
J.B. Hunt Transport Services, Inc. 700 9
Knight Transportation, Inc.+ 800 11
Landstar Systems, Inc.+ 400 16
M.S. Carriers, Inc.+ 200 6
OLD Dominion Freight Line+ 500 6
PACCAR, Inc. 1,600 75
Roadway Express, Inc. 200 4
Rollins Truck Leasing Corp. 1,100 11
Ryder Systems, Inc. 1,400 30
Swift Transportation Co., Inc.+ 1,300 23
Transport Corp. of America+ 1,100 14
US Freightways Corp. 600 27
Wabash National Corp. 800 13
Werner Enterprises, Inc. 900 14
XTRA Corp.+ 300 12
Yellow Corp.+ 700 12
------
469
------
- ------------------------------------------------------------
UTILITIES-ELECTRIC & GAS -- 3.0%
- ------------------------------------------------------------
AES Corp.+ 4,200 237
AGL Resources, Inc. 1,200 21
Allegheny Energy, Inc. 2,300 73
Alliant Energy Corp. 1,500 41
Ameren Corp. 2,700 102
American Electric Power Co.,
Inc. 3,900 135
American Water Works Co., Inc. 2,000 58
99
<PAGE>
SCHWAB TOTAL STOCK MARKET INDEX FUND(TM)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
----------- ---------
Atmos Energy Corp. 700 $ 16
Avista Corp. 700 13
Azurix Corp.+ 2,300 32
Bangor Hydro-Electric Co. 400 7
Black Hills Corp. 500 11
Calpine Corp.+ 1,200 69
Carolina Power & Light Co. 3,261 113
Central & South West Corp. 4,300 95
Central Hudson Gas & Electric
Corp. 400 15
Cinergy Corp. 3,200 90
Citizens Utilities Co., Class B+ 5,200 60
Cleco Corp. 400 13
CMP Group, Inc. 600 16
CMS Energy Corp. 2,400 89
Coastal Corp. 4,400 185
Columbia Energy Group 1,700 111
Conectiv, Inc. 1,800 35
Connecticut Energy Corp. 200 8
Connecticut Water SVC, Inc. 500 15
Consolidated Edison, Inc. 4,500 172
Consolidated Natural Gas Co. 1,900 122
Dominion Resources, Inc. 3,900 188
DPL, Inc. 3,100 63
DQE, Inc. 1,500 60
DTE Energy Co. 3,000 100
Duke Energy Corp. 7,400 418
Eastern Enterprises 500 26
Eastern Utilities Associates 500 15
Edison International 7,000 207
El Paso Electric Co.+ 1,600 15
El Paso Energy Corp. 4,600 189
Empire District Electric Co. 500 12
Energen Corp. 700 13
Energy East Corp. 2,300 58
EnergySouth, Inc. 300 6
Enron Corp. 14,400 575
Entergy Corp. 5,000 150
Equitable Resources, Inc. 700 26
First Energy Corp. 4,700 122
Florida Progress Corp. 1,900 87
FPL Group, Inc. 3,600 181
GPU, Inc. 2,500 85
Hawaiian Electric Industries,
Inc. 700 24
IDACORP, Inc. 800 24
Illinova Corp. 1,400 45
Indiana Energy, Inc. 500 10
Insituform Technologies, Inc.,
Class A+ 800 19
Number Value
of Shares (000s)
--------- ----------
Ipalco Enterprises, Inc. 1,800 $ 37
Kansas City Power & Light Co. 1,300 32
KeySpan Corp. 2,900 82
Kinder Morgan, Inc. 1,400 28
Laclede Gas Co. 400 9
LG&E Energy Corp. 2,600 57
Madison Gas & Electric Co. 400 8
MCN Corp. 1,700 42
MDU Resources Group, Inc. 1,100 26
MidAmerican Energy Holdings Co. 1,300 44
Minnesota Power & Light Co. 1,400 26
Montana Power Co. 2,200 63
National Fuel Gas Co. 800 39
New Century Energies, Inc. 2,300 75
New England Electric Co. 1,200 62
New Jersey Resources Corp. 400 16
NICOR, Inc. 1,000 39
Nisource, Inc. 2,500 51
Northeast Utilities+ 2,600 54
Northern States Power Co. 3,200 69
Northwest Natural Gas Co. 500 13
Northwestern Public Services Co. 500 11
NSTAR 1,267 48
Ocean Energy, Inc.+ 3,200 29
OGE Energy Corp. 1,500 34
Otter Tail Power Co. 300 13
PacifiCorp. 5,900 122
PECO Energy Co. 3,700 141
Peoples Energy Corp. 700 27
PG&E Corp. 7,800 179
Philadelphia Suburban Corp. 800 18
Piedmont Natural Gas Co., Inc. 600 19
Pinnacle West Capital Corp. 1,700 63
Potomac Electric Power Co. 2,400 66
PP&L Resources, Inc. 3,100 84
Primark Corp.+ 500 13
Public Service Co. of New Mexico 800 14
Public Service Co. of
North Carolina, Inc. 500 16
Public Service Enterprise Group,
Inc. 4,500 178
Puget Sound Power & Light Co. 1,700 38
Questar Corp. 1,700 31
Reliant Energy, Inc. 6,000 164
RGS Energy Group, Inc. 700 17
Scana Corp. 2,000 50
Sierra Pacific Resources 1,476 33
SIGCORP, Inc. 500 13
100
<PAGE>
Number Value
of Shares (000s)
--------- ----------
SJW Corp. 100 $ 12
South Jersey Industries 500 13
Southern Co. 13,700 364
Southern Union Co.+ 525 11
Southwest Gas Corp. 700 16
TECO Energy, Inc. 2,600 57
Texas Utilities Co. 5,500 213
TNP Enterprises, Inc. 300 12
Triarc Companies, Inc.+ 700 14
UGI Corp. 700 17
Unicom Corp. 4,400 169
Unisource Energy Corp.+ 700 8
United Illuminating Co. 300 16
United Water Resources, Inc. 700 24
Unitil Corp. 600 16
UtiliCorp United, Inc. 1,800 39
Washington Gas Light Co. 900 24
Western Gas Resources, Inc. 800 13
Western Resources, Inc. 1,300 30
WICOR, Inc. 800 24
Williams Cos., Inc. 8,800 330
Wisconsin Energy Corp. 2,300 51
WPS Resources Corp. 500 14
Yankee Energy Systems, Inc. 400 17
--------
8,469
--------
TOTAL COMMON STOCK
(Cost $273,878) 282,360
--------
- ------------------------------------------------------------
RIGHTS -- 0.0%
Metro-Goldwyn Mayer, Inc.+ 1,017 4
--------
TOTAL RIGHTS
(Cost $0) 4
--------
Par Value
(000s) (000s)
--------- ---------
- ------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 0.1%
U.S. Treasury Bills (a)(b)
4.55%-4.65%, 12/16/99 $215 $ 214
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $214) 214
--------
Number
of Shares
---------
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 0.9%
Provident Institutional
TempCash, 5.01%* 1,273,393 1,273
Provident Institutional
TempFund, 5.14%* 1,273,393 1,273
--------
TOTAL SHORT-TERM INVESTMENTS
(Cost $2,546) 2,546
--------
TOTAL INVESTMENTS -- 100.1%
(COST $276,638) 285,124
--------
OTHER ASSETS AND LIABILITIES, NET -- (0.1%)
Other assets 51,882
Liabilities (52,156)
--------
(274)
--------
TOTAL NET ASSETS -- 100.0% $284,850
========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO
FINANCIAL STATEMENTS.
101
<PAGE>
SCHWAB SMALL-CAP INDEX FUND(R)
SCHEDULE OF INVESTMENTS
October 31, 1999
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
COMMON STOCK -- 99.5%
- ------------------------------------------------------------
AEROSPACE / DEFENSE -- 0.3%
AAR Corp. 32,300 $ 539
Alliant Techsystems, Inc.+ 12,300 756
BE Aerospace, Inc.+ 30,400 306
Curtiss-Wright Corp. 15,000 544
GenCorp., Inc. 56,900 647
Kellstrom Industries, Inc.+ 12,000 99
--------
2,891
--------
- ------------------------------------------------------------
AIR TRANSPORTATION -- 0.5%
- ------------------------------------------------------------
America West Holdings Corp.,
Class B+ 46,000 952
Atlantic Coast Airlines
Holdings, Inc.+ 26,600 618
Atlas Air, Inc.+ 44,350 1,197
Mesaba Holdings, Inc.+ 29,700 342
Midwest Express Holdings, Inc.+ 19,500 572
SkyWest, Inc. 32,200 799
--------
4,480
--------
- ------------------------------------------------------------
ALCOHOLIC BEVERAGES -- 0.3%
- ------------------------------------------------------------
Beringer Wine Estates Holdings,
Inc.+ 24,500 974
Canandaigua Brands, Inc.,
Class A+ 22,300 1,349
--------
2,323
--------
- ------------------------------------------------------------
APPAREL -- 1.5%
- ------------------------------------------------------------
Buckle, Inc.+ 29,650 489
Burlington Industries, Inc.+ 62,400 230
Footstar, Inc.+ 27,200 952
Fossil, Inc.+ 41,800 1,155
Fruit of the Loom, Inc.,
Class A+ 85,900 231
Guilford Mills 28,200 249
Kellwood Co. 35,900 635
Men's Wearhouse, Inc.+ 51,350 1,126
Nautica Enterprises, Inc.+ 43,400 654
OshKosh B'Gosh, Inc., Class A 22,000 451
Pacific Sunwear of California+ 38,025 1,148
Quiksilver, Inc.+ 16,250 230
Reebok International Ltd.+ 71,600 703
Russell Corp. 40,900 621
Stride Rite Corp. 57,400 377
Talbots, Inc. 38,300 1,802
Tarrant Apparel Group+ 17,760 214
Timberland Co., Class A+ 27,400 1,353
Wolverine World Wide, Inc. 51,500 528
--------
13,148
--------
Number Value
of Shares (000s)
--------- -------
- ------------------------------------------------------------
AUTOMOTIVE PRODUCTS / MOTOR VEHICLES -- 1.7%
- ------------------------------------------------------------
A.O. Smith Corp., Class B 31,400 $ 761
Arvin Industries, Inc. 32,600 929
Avis Rent A Car, Inc.+ 37,700 674
Bandag, Inc. 28,100 702
Bandag, Inc., Class A 15,000 311
Copart, Inc.+ 33,500 770
Detroit Diesel Corp. 29,900 544
Discount Auto Parts, Inc.+ 20,000 285
General Motors Corp., Class H+ 32,117 2,339
Gentex Corp.+ 76,300 1,311
Group 1 Automotive, Inc.+ 19,500 327
Hayes Lemmerz International,
Inc.+ 37,200 804
MascoTech, Inc. 54,500 794
Midas, Inc. 22,400 526
Modine Manufacturing Co. 36,500 908
Myers Industries, Inc. 27,170 382
O'Reilly Automotive, Inc.+ 32,200 1,405
Superior Industries
International, Inc. 33,200 886
Winnebago Industries, Inc. 28,300 492
Wynns International, Inc. 25,500 397
--------
15,547
--------
- ------------------------------------------------------------
BANKS -- 6.5%
- ------------------------------------------------------------
AMCORE Financial, Inc. 37,150 878
Anchor Bancorp Wisconsin, Inc. 33,500 536
Area Bancshares Corp. 21,500 559
Bancfirst Corp. 10,000 322
Bancorpsouth, Inc. 73,200 1,272
Bank United Corp., Class A 40,500 1,579
Banknorth Group, Inc. 30,500 1,030
Bay View Capital Corp. 22,800 316
BOK Financial Corp.+ 60,667 1,282
BT Financial Corp. 20,500 454
Carolina First Corp. 34,600 716
Cathay Bancorp., Inc. 12,500 480
Chemical Financial Corp. 15,735 513
Chittenden Corp. 39,500 1,220
Citizens Banking Corp. 34,650 962
Community First Bankshares,
Inc. 64,700 1,231
CORUS Bankshares, Inc. 16,900 464
CVB Financial Corp. 21,000 541
Downey Financial Corp. 37,171 822
F&M Bancorp., Inc. 21,500 778
F&M National Corp. 29,321 880
F.N.B Corp. 24,803 636
First Bancorp./Puerto Rico 35,300 790
102
<PAGE>
Number Value
of Shares (000s)
--------- --------
First Citizens Bancshares 14,500 $ 1,102
First Commonwealth Financial
Corp. 39,300 1,115
First Financial Bancorp. 54,230 1,315
First Financial Bancshares,
Inc. 13,800 469
First Midwest Bancorp., Inc. 35,000 1,431
First Source Corp. 22,542 623
First Union Corp. 35,795 1,528
First United Bancshares, Inc. 33,500 538
Firstfed Financial Corp.+ 24,800 397
Flagstar Bancorp., Inc. 19,000 293
Frontier Financial Corp. 23,000 552
GBC Bancorp. 16,000 327
Hancosk Holding Co. 13,645 539
Harbor Florida Bancshares, Inc. 37,000 465
Harris Financial, Inc. 47,500 505
Imperial Bancorp.+ 52,692 1,307
International Bancshares Corp. 23,250 1,055
InterWest Bancorp., Inc. 20,100 372
Irwin Financial Corp. 28,300 580
MAF Bancorp., Inc. 29,725 641
Merchants Bancorp., Inc.
New York 22,000 385
National Bancorp. of Alaska,
Inc. 38,300 996
National City Bancshares, Inc. 22,655 634
National Penn Bancshares, Inc. 21,200 558
Pacific Capital Bancorp. 31,000 1,027
Park National Corp. 11,400 1,129
Premier Bancshares, Inc. 34,000 599
Provident Bancshares Corp. 32,339 696
Queens County Bancorp., Inc. 27,330 859
Republic Security Financial
Corp. 66,300 559
Riggs National Corp. 34,500 522
Roslyn Bancorp., Inc. 96,100 1,862
S & T Bancorp., Inc. 34,700 807
Sky Financial Group, Inc. 82,335 1,976
Southwest Bancorp. of Texas,
Inc.+ 36,000 625
Staten Island Bancorp., Inc. 52,800 1,023
Susquehanna Bancshares, Inc. 45,275 753
Texas Regional Bancshares, Inc. 17,300 483
Triangle Bancorp., Inc. 33,300 766
The Trust Co. of New Jersey 25,100 580
TrustCo Bank Corp. 33,912 1,003
UMB Financial Corp. 25,562 1,038
United Bancshares, Inc. 53,900 1,327
UST Corp. 52,300 1,621
Wesbanco, Inc. 26,600 698
Western Bancorp. 26,300 1,233
Whitney Holding Corp. 29,400 1,088
--------
58,262
--------
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
BUSINESS MACHINES & SOFTWARE -- 8.1%
- ------------------------------------------------------------
Advantage Learning Systems,
Inc.+ 40,500 $ 1,119
Advent Software, Inc.+ 17,500 1,052
Analogic Corp. 17,000 446
Ardent Software, Inc.+ 23,500 518
Avant Corp.+ 38,100 491
AVT Corp.+ 17,500 586
AXENT Technologies, Inc.+ 38,400 569
BEA Systems, Inc.+ 83,600 3,814
Black Box Corp.+ 22,100 1,122
BroadVision, Inc.+ 96,000 7,068
Cirrus Logic, Inc.+ 72,900 724
Cisco Systems, Inc.+ 30,416 2,251
Computer Horizons Corp.+ 37,500 417
Concentric Network Corp.+ 51,800 1,327
Concord Communications, Inc.+ 17,400 904
Cybex Computer Products Corp.+ 19,500 762
Dendrite International, Inc.+ 48,450 1,520
Digital River, Inc.+ 25,000 567
Electronics for Imaging, Inc.+ 56,300 2,270
Engineering Animation, Inc.+ 11,600 104
Epicor Software Corp.+ 48,000 231
Esterline Technologies Corp.+ 24,500 337
FileNet Corp.+ 38,200 631
Genesys Telecommunications
Laboratories, Inc.+ 29,100 1,430
Great Plains Software, Inc.+ 18,800 1,043
GT Interactive Software Corp.+ 53,300 147
HMT Technology Corp.+ 50,500 158
HNC Software, Inc.+ 29,900 1,194
Hyperion Solutions Corp.+ 40,645 991
IMRglobal Corp.+ 49,650 509
Input/Output, Inc.+ 60,000 315
InterVoice, Inc.+ 39,000 483
Komag, Inc.+ 61,200 101
MAPICS, Inc.+ 20,000 170
Maxwell Technologies, Inc.+ 8,000 85
Metro Information Services,
Inc.+ 17,500 238
MICROS Systems, Inc.+ 20,600 953
MMC Networks, Inc.+ 39,500 1,259
National Instruments+ 61,175 1,839
NeoMagic Corp.+ 32,500 259
Open Market, Inc.+ 43,800 777
Peregrine Systems, Inc.+ 63,600 2,790
Pinnacle Systems, Inc.+ 28,000 777
Premiere Technologies, Inc.+ 56,400 310
Progress Software Corp.+ 21,500 720
QuadraMed Corp.+ 28,600 161
103
<PAGE>
SCHWAB SMALL-CAP INDEX FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- --------
Rational Software Corp.+ 91,900 $ 3,929
Read-Rite+ 53,500 211
RealNetworks, Inc.+ 91,300 10,014
Remedy Corp.+ 36,100 1,552
RF Micro Devices, Inc.+ 98,200 5,070
Sanchez Computer Associates,
Inc.+ 24,000 528
SCM Microsystems, Inc.+ 18,100 855
Sybase+ 103,700 1,400
System Software Associates,
Inc.+ 6,250 12
Systems & Computer
Technology Corp.+ 37,400 402
Visio Corp.+ 37,700 1,493
Xircom, Inc.+ 31,100 1,569
--------
72,574
--------
- ------------------------------------------------------------
BUSINESS SERVICES -- 12.9%
- ------------------------------------------------------------
Abacus Direct Corp.+ 12,500 1,831
ABM Industries, Inc. 30,500 728
Actel Corp.+ 27,000 510
Administaff, Inc.+ 18,500 277
Advance Paradigm, Inc.+ 10,200 435
Advo, Inc.+ 24,700 437
Affymetrix, Inc.+ 30,300 2,670
AHL Services, Inc.+ 17,100 325
Analysts International Corp. 25,550 299
Apex, Inc.+ 19,650 334
Apria Healthcare Group, Inc.+ 66,500 1,052
Aspen Technology, Inc.+ 27,900 345
At Home Corp., Class A+ 22,920 857
Aviation Sales Co.+ 18,700 325
Bell & Howell Co.+ 24,500 689
Billing Information Concepts+ 48,600 243
BISYS Group, Inc.+ 29,100 1,484
Boron, LePore & Associates,
Inc.+ 15,000 97
Bowne & Co., Inc. 43,200 481
Brightpoint, Inc.+ 65,750 516
Building One Services, Corp.+ 30,659 341
Burns International Services
Corp.+ 25,300 255
Casella Waste Systems, Inc.,
Class A+ 17,500 235
Catalina Marketing Corp.+ 20,700 1,938
Catalytica, Inc.+ 36,600 460
CDI Corp.+ 23,100 612
CDW Computer Centers, Inc.+ 47,600 2,939
CellStar Corp.+ 76,000 537
Century Business Services,
Inc.+ 107,400 1,067
Cerner Corp.+ 43,100 644
Choicepoint, Inc.+ 18,300 1,131
Number Value
of Shares (000s)
--------- --------
Circle International Group,
Inc. 22,500 $ 495
Clarify, Inc.+ 29,300 2,263
Computer Task Group, Inc. 28,000 353
Consolidated Graphics, Inc.+ 19,500 390
Credit Acceptance Corp.+ 60,000 337
Curative Technologies, Inc.+ 13,600 65
Cytec Industries, Inc.+ 54,600 1,409
DBT Online, Inc.+ 23,900 559
DeVry, Inc.+ 76,600 1,613
Documentum, Inc.+ 24,000 681
Educational Management Corp.+ 34,800 331
Electro Rent Corp.+ 33,400 401
Express Scripts, Inc., Class A+ 36,200 1,778
F.Y.I., Inc.+ 18,100 597
FactSet Research Systems, Inc.+ 19,800 1,315
Fair, Isaac & Co., Inc. 18,700 722
Forrester Research, Inc.+ 12,000 571
Franklin Covey Co.+ 25,500 206
G & K Services, Inc., Class A 26,150 982
Grey Advertising, Inc. 1,600 578
Group Maintenance America
Corp.+ 50,500 486
GTECH Holdings, Corp.+ 45,200 910
HA-LO Industries, Inc.+ 56,775 277
Hanover Compressor Co.+ 35,000 1,295
Henry Jack & Associates, Inc. 24,600 895
Hooper Holmes, Inc. 35,000 941
Inso Corp.+ 17,500 236
Inspire Insurance Solutions,
Inc.+ 22,000 140
Integrated Health Services,
Inc.+ 61,200 17
Integrated Systems, Inc.+ 29,000 488
Interim Services, Inc.+ 81,980 1,348
Intermet Corp. 29,800 302
Iron Mountain, Inc.+ 45,050 1,363
ITT Educational Services, Inc.+ 30,350 599
Jacobs Engineering Group, Inc.+ 33,100 1,175
John H. Harland Co. 36,800 699
Kirby Corp.+ 32,700 593
Kroll-O'Gara Co.+ 21,300 338
Kronos, Inc.+ 15,250 684
Labor Ready, Inc.+ 50,250 512
Lason, Inc.+ 14,000 520
Lycos, Inc.+ 98,400 5,252
MAXIMUS, Inc.+ 25,500 591
Medical Manager Corp.+ 42,562 2,133
MemberWorks, Inc.+ 20,100 535
Mentor Graphics Corp.+ 81,800 660
Mercury Interactive Corp.+ 47,200 3,829
Metamor Worldwide, Inc.+ 43,100 814
104
<PAGE>
Number Value
of Shares (000s)
--------- --------
Metris Companies, Inc. 48,056 $ 1,655
Metromedia International Group,
Inc.+ 77,800 287
Network Solutions, Inc.+ 43,680 5,176
New England Business Service,
Inc. 16,800 437
Oceaneering International,
Inc.+ 26,400 358
Olsten Corp. 99,300 999
On Assignment, Inc.+ 15,000 431
Orthodontic Centers of America,
Inc.+ 59,000 811
PAXAR Corp.+ 63,435 591
Pediatrix Medical Group, Inc.+ 20,900 185
Pegasus Systems, Inc.+ 16,300 697
Personal Group of America,
Inc.+ 38,400 257
Pierce Leahy Corp.+ 22,000 648
Plexus Corp.+ 21,300 564
Pre-Paid Legal Services, Inc.+ 24,200 587
ProBusiness Services, Inc.+ 19,900 500
Project Software & Development,
Inc.+ 15,000 722
Protection One, Inc.+ 154,700 319
QRS Corp.+ 18,750 1,043
R. H. Donnelley Corp. 43,000 812
Renaissance Worldwide, Inc.+ 63,220 217
Rent-A-Center, Inc.+ 29,100 533
Rent-Way, Inc.+ 25,200 419
Rollins, Inc. 38,500 604
Romac International, Inc.+ 55,000 371
RSA Security Inc.+ 49,400 1,754
S3, Inc.+ 87,500 875
SAGA Systems. Inc.+ 35,000 507
Sandisk Corp.+ 33,800 2,049
SDL, Inc.+ 38,800 4,785
SEACOR SMIT, Inc.+ 14,700 673
Security First Technologies
Corp.+ 34,000 1,366
SEI Investments Co. 19,800 1,930
Spartech Corp. 35,700 1,022
StaffMark, Inc.+ 37,900 272
Standard Register Co. 36,100 790
Strayer Education, Inc. 21,100 371
Structural Dynamics Research
Corp.+ 46,000 454
Superior Consultant Holdings
Corp.+ 13,000 138
Syntel, Inc.+ 48,000 396
Technology Solutions Co.+ 54,600 1,119
Teletech Holdings, Inc.+ 76,300 1,083
Tetra Technology, Inc.+ 46,375 736
TMP Worldwide, Inc.+ 43,700 2,729
TSI International Software
Ltd.+ 31,700 761
URS Corp.+ 20,500 369
Volt Information Sciences,
Inc.+ 18,000 355
Number Value
of Shares (000s)
--------- -------
The Wackenhut Corp. 27,500 $ 517
Wackenhut Corrections Corp.+ 25,900 332
Wallace Computer Services, Inc. 53,600 1,186
Walter Industries, Inc.+ 60,800 714
Zebra Technologies Corp.,
Class A+ 40,100 2,180
--------
116,058
--------
- ------------------------------------------------------------
CHEMICAL -- 2.3%
- ------------------------------------------------------------
A. Schulman 38,900 605
Albemarle Corp. 58,000 1,029
Cambrex Corp. 32,200 974
Chemfirst, Inc. 21,900 589
CK Witco Corp. 146,340 1,372
Dexter Corp. 28,600 1,003
Ethyl Corp. 97,700 403
Ferro Corp. 46,600 949
Fuller 17,600 964
Geon Co. 30,300 795
Georgia Gulf Corp. 40,700 878
International Specialty
Products, Inc.+ 84,900 642
Lilly Industries, Inc.,
Class A 28,350 381
M. A. Hanna Co. 63,300 677
Macdermid, Inc. 31,100 1,054
Mastec, Inc.+ 35,550 1,164
NL Industries, Inc. 66,400 768
OM Group, Inc. 31,100 1,166
Omnova Solutions Inc.+ 56,900 398
Regal Beloit 24,900 542
Scotts Co., Class A+ 23,200 931
Sequa Corp., Class A+ 12,600 621
Techne Corp.+ 25,000 984
Tredegar Industries, Inc. 48,300 1,060
Twinlab Corp.+ 43,600 354
WD-40 Co. 20,800 484
--------
20,787
--------
- ------------------------------------------------------------
CONSTRUCTION -- 1.7%
- ------------------------------------------------------------
Blount International, Inc.+ 83,600 1,228
Centex Construction Products,
Inc. 23,200 825
DAL-Tile International, Inc.+ 67,800 631
Florida Rock Industries, Inc. 25,400 857
Granite Construction, Inc. 33,250 688
Justin Industries, Inc. 32,500 455
M.D.C. Holdings, Inc. 28,000 437
Morrison Knudsen Corp.+ 65,500 598
NVR, Inc.+ 13,000 533
Oakwood Homes Corp. 52,700 155
105
<PAGE>
SCHWAB SMALL-CAP INDEX FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- --------
Palm Harbor Homes, Inc.+ 29,187 $ 493
The Ryland Group, Inc. 18,000 371
Sawtek, Inc.+ 52,800 2,165
Simpson Manufacturing, Inc.+ 15,700 637
Standard Pacific Corp. 38,200 411
Stone & Webster, Inc. 15,000 232
T J International, Inc. 19,200 595
Toll Brothers, Inc.+ 45,600 798
U.S. Home Corp.+ 18,100 507
United Dominion Industries,
Ltd., ADR 50,000 1,059
Webb Del Corp.+ 21,900 483
West Teleservices Corp.+ 79,200 1,104
--------
15,262
--------
- ------------------------------------------------------------
CONSUMER - DURABLE -- 0.8%
- ------------------------------------------------------------
American Business Products,
Inc. 17,500 229
Coachmen Industries, Inc. 22,000 323
Comfort Systems USA, Inc.+ 36,900 268
Ethan Allen Interiors, Inc. 51,750 1,840
Harman International
Industries, Inc. 22,200 907
Helen of Troy Ltd.+ 32,200 288
Interface, Inc. 60,500 246
Kimball International, Inc.,
Class B 41,600 666
La-Z-Boy Chair Co. 63,600 1,161
Pillowtex Corp. 17,500 59
Sunbeam Corp.+ 122,200 580
Toro Co. 17,800 639
--------
7,206
--------
- ------------------------------------------------------------
CONSUMER - NONDURABLE -- 1.9%
- ------------------------------------------------------------
Acclaim Entertainment, Inc.+ 70,100 499
Action Performance Companies,
Inc.+ 20,700 421
Applebee's International, Inc. 34,700 1,000
Buffets, Inc.+ 49,500 461
CEC Entertainment, Inc.+ 33,800 1,084
Cheesecake Factory+ 26,300 805
Consolidated Products, Inc.+ 36,500 420
Cytyc Corp.+ 22,200 882
Department 56, Inc.+ 16,100 306
Enesco Group 18,200 230
Fresh Del Monte Produce, Inc.+ 55,400 467
Hanover Direct, Inc.+ 257,000 691
IHOP Corp.+ 26,000 470
Jack in the Box Inc.+ 50,200 1,208
Jostens, Inc. 44,300 936
Lone Star Steakhouse & Saloon,
Inc.+ 46,200 370
Luby's Cafeterias, Inc. 26,400 313
Number Value
of Shares (000s)
--------- --------
Midway Games, Inc.+ 48,466 $ 966
Oakley, Inc.+ 89,600 582
Performance Food Group Co.+ 16,000 434
Regis Corp. 48,350 897
Riviana Foods, Inc. 17,500 328
Ruby Tuesday, Inc. 38,774 739
Russ Berrie & Co., Inc. 26,400 508
Ryan's Family Steak Houses,
Inc.+ 47,000 492
Sonic Corp.+ 24,100 675
Trans World Entertainment
Corp.+ 69,750 724
Vlasic Foods International,
Inc.+ 55,700 428
--------
17,336
--------
- ------------------------------------------------------------
CONTAINERS -- 0.2%
- ------------------------------------------------------------
ACX Technologies, Inc.+ 34,000 266
Greif Brothers Corp., Class A+ 28,300 807
Ivex Packaging Corp.+ 26,200 247
Silgan Holdings, Inc.+ 20,000 307
--------
1,627
--------
- ------------------------------------------------------------
ELECTRONICS -- 9.1%
- ------------------------------------------------------------
Advanced Fibre Communications,
Inc.+ 97,200 2,126
AFC Cable Systems, Inc.+ 16,000 602
Alpha Industries, Inc.+ 26,000 1,436
Amphenol Corp.+ 24,400 1,443
Anixter International, Inc.+ 45,500 950
Applied Micro Circuits Corp.+ 67,400 5,245
Atmi, Inc.+ 33,200 894
Avnet, Inc. 6,632 360
Aware, Inc.+ 27,000 859
Belden, Inc. 28,700 527
Benchmark Electronics, Inc.+ 14,000 224
Burr Brown Corp.+ 47,650 1,873
Cable Design Technologies
Corp.+ 33,250 644
CCC Information Services Group,
Inc.+ 27,800 306
Checkpoint Systems, Inc.+ 37,200 279
CommScope, Inc.+ 62,500 2,492
Cree Research, Inc.+ 36,600 1,562
CTS Corp. 35,000 1,980
Cypress Semiconductor Corp.+ 131,300 3,356
Data Broadcasting Corp.+ 44,500 526
Digital Microwave Corp.+ 79,000 1,175
Dionex+ 28,800 1,280
DSP Communications, Inc.+ 52,900 1,861
Dupont Photomasks, Inc.+ 19,400 960
Electro Scientific Industries,
Inc.+ 17,000 918
EMC Corp.+ 19,906 1,453
106
<PAGE>
Number Value
of Shares (000s)
--------- --------
Exide Corp. 22,800 $ 202
General Cable Corp. 40,700 300
Genrad, Inc.+ 37,900 725
Gerber Scientific, Inc. 29,700 561
Hadco Corp.+ 17,200 632
Hutchinson Technology, Inc.+ 31,400 801
Imation Corp.+ 46,800 1,436
Integrated Device Technology,
Inc.+ 110,200 2,266
Intel Corp. 32,938 2,551
International Rectifier Corp.+ 63,600 1,236
Kemet Corp.+ 49,400 1,579
Kent Electronics Corp.+ 35,900 698
Kulicke & Soffa Industries,
Inc.+ 28,800 848
Lam Research Corp.+ 48,200 4,070
Lattice Semiconductor Corp.+ 60,200 2,130
Littelfuse, Inc.+ 23,600 525
Lucent Technologies, Inc. 44,991 2,891
MEMC Electronic Materials,
Inc.+ 85,304 1,216
Methode Electronics, Inc.,
Class A 42,750 684
Omnipoint Corp.+ 67,300 5,561
Optical Cable Corp.+ 48,000 594
Remec, Inc.+ 33,700 352
Semtech Corp.+ 38,400 1,471
Sensormatic Electronics Corp.+ 93,500 1,414
Service Experts, Inc.+ 14,500 87
Silicon Valley Group, Inc.+ 38,600 482
Sipex Corp.+ 23,300 268
Stoneridge, Inc.+ 30,500 473
Superior Telecommunications,
Inc. 23,343 363
Technitrol, Inc. 21,700 789
Tekelec, Inc.+ 68,300 867
Texas Instruments, Inc. 19,891 1,785
TranSwitch Corp.+ 34,000 1,600
Varian Medical Systems, Inc. 37,200 784
Veeco Instruments, Inc.+ 14,870 505
Vicor Corp.+ 51,800 1,437
Vishay Intertechnology, Inc.+ 106,875 2,612
--------
82,126
--------
- ------------------------------------------------------------
ENERGY - RAW MATERIALS -- 2.3%
- ------------------------------------------------------------
Arch Coal, Inc. 48,000 537
Barrett Resources Corp.+ 43,600 1,463
BJ Services Co.+ 90,100 3,092
C&D Technologies, Inc. 16,000 514
Cabot Oil & Gas Corp., Class A 32,300 521
Forest Oil Corp.+ 67,400 901
Helmerich & Payne, Inc. 63,000 1,500
Number Value
of Shares (000s)
--------- --------
Louis Dreyfus Natural Gas
Corp.+ 49,800 $ 996
Marine Drilling Company, Inc.+ 72,400 1,172
Metals USA, Inc.+ 28,000 208
Mitchell Energy & Development
Corp., Class A 60,900 1,454
Newfield Exploration Co.+ 52,900 1,557
Newpark Resources, Inc.+ 85,100 548
ONEOK, Inc. 39,800 1,162
Rowan Companies, Inc.+ 104,600 1,628
Stone Energy Corp.+ 23,100 1,123
Tuboscope Vetco International
Corp.+ 54,900 611
Varco International, Inc.+ 82,300 869
Vintage Petroleum, Inc. 67,600 735
--------
20,591
--------
- ------------------------------------------------------------
FOOD & AGRICULTURE -- 1.4%
- ------------------------------------------------------------
7-Eleven, Inc.+ 496,200 992
AgriBioTech, Inc.+ 58,600 187
American Italian Pasta Co.,
Class A+ 23,500 590
Bob Evans Farms, Inc. 41,400 569
California Water Service Group 19,500 565
Chiquita Brands International,
Inc. 82,100 390
Coca-Cola Bottling Co. 11,800 621
Corn Products International,
Inc. 45,800 1,491
Dreyer's Grand Ice Cream, Inc. 35,600 607
E'Town Corp. 10,600 488
Fleming Companies, Inc. 45,700 546
The Hain Food Group, Inc.+ 17,000 426
International Multifoods Corp. 22,500 475
J.M. Smucker Co., Class A 36,400 723
Lance, Inc. 40,800 492
Michael Foods, Inc. 25,100 640
Mississippi Chemical Corp. 31,540 175
Pilgrim's Pride Corp. 32,550 293
Pilgrim's Pride Corp., Class A 14,550 101
Ralcorp Holdings, Inc.+ 39,466 770
Rexall Sundown, Inc.+ 77,800 822
Seaboard Corp. 1,700 382
Terra Industries, Inc. 79,000 94
United Natural Foods, Inc.+ 13,600 120
--------
12,559
--------
- ------------------------------------------------------------
GOLD -- 0.1%
- ------------------------------------------------------------
Battle Mountain Gold Co.+ 275,000 739
--------
107
<PAGE>
SCHWAB SMALL-CAP INDEX FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
HEALTHCARE / DRUGS & MEDICINE -- 7.8%
- ------------------------------------------------------------
Acuson Corp.+ 30,600 $ 317
ALARIS Medical, Inc.+ 60,000 109
Algos Pharmaceuticals Corp.+ 12,500 123
Alkermes, Inc.+ 31,900 1,126
Alpharma, Inc., Class A 34,067 1,199
Alterra Healthcare Corp.+ 24,600 145
Andrx Corp.+ 40,400 1,929
Arrow International, Inc. 30,000 814
Aviron+ 22,600 549
Barr Laboratories, Inc.+ 28,100 852
Beverly Enterprises, Inc.+ 123,600 487
Bindley Western Industries,
Inc. 43,398 545
Bio-Technology General Corp.+ 66,600 649
Biomatrix, Inc.+ 29,800 676
Caremark Rx, Inc.+ 246,900 1,204
Carematrix Corp.+ 21,000 42
Carter-Wallace, Inc. 57,500 1,039
Cell Pathways, Inc.+ 33,400 311
CLOSURE Medical Corp.+ 15,960 209
Cognex Corp.+ 52,000 1,557
Conmed Corp.+ 19,500 486
Coulter Pharmaceutical, Inc.+ 23,000 391
Coventry Health Care, Inc.+ 66,400 382
Datascope Corp.+ 20,600 742
Diagnostic Products Corp. 17,000 395
Dura Pharmaceuticals, Inc.+ 55,100 704
Enzon, Inc.+ 46,200 1,354
First Health Group Corp.+ 61,600 1,432
GelTex Pharmaceuticals, Inc.+ 22,400 276
Haemonetics Corp.+ 33,400 624
Hanger Orthopedic Group, Inc.+ 23,000 283
Human Genome Sciences, Inc.+ 28,800 2,516
Icos Corp.+ 42,200 1,211
IDEC Pharmaceuticals Corp.+ 26,100 3,032
Idexx Laboratories, Inc.+ 50,900 770
Incyte Pharmaceuticals, Inc.+ 34,900 672
Inhale Therapeutic Systems+ 21,500 593
Invacare Corp. 38,300 800
Isis Pharmaceuticals, Inc.+ 38,000 439
IVAX Corp.+ 130,200 2,287
Jones Medical Industries, Inc. 55,750 1,728
The Liposome Company, Inc.+ 36,900 291
Maxxim Medical, Inc.+ 17,000 408
Medicis Pharmaceutical Corp.,
Class A+ 35,800 1,092
Medimmune, Inc.+ 57,000 6,384
Number Value
of Shares (000s)
--------- --------
Mentor Corp. 31,600 $ 745
Mid Atlantic Medical Services,
Inc.+ 44,800 244
Millennium Pharmaceuticals+ 45,200 3,170
NBTY, Inc.+ 87,600 706
NCS HealthCare, Inc., Class A+ 16,500 49
OEC Medical Systems, Inc.+ 16,000 570
Osteotech, Inc.+ 16,500 216
Owens & Minor, Inc.
Holding Co. 45,200 424
Parexel International Corp.+ 28,500 273
Pathogenesis Corp.+ 22,200 333
Perclose, Inc.+ 13,800 674
Perrigo Co.+ 94,000 711
Pharmaceutical Product
Development, Inc.+ 23,900 240
PhyCor, Inc.+ 50,750 127
Priority Healthcare Corp.,
Class B+ 26,327 528
Protein Design Labs, Inc.+ 23,400 937
Quest Diagnostic, Inc.+ 37,500 1,050
Quorum Health Group, Inc.+ 91,000 728
Res-Care, Inc.+ 25,200 367
ResMed, Inc.+ 18,400 637
Respironics, Inc.+ 36,700 310
Roberts Pharmaceutical Corp.+ 38,800 1,251
Sangstat Medical Corp.+ 19,600 424
Scios, Inc.+ 50,300 198
Sepracor, Inc.+ 30,700 2,554
Serologicals Corp.+ 26,100 101
SICOR, Inc.+ 105,000 499
Sola International, Inc.+ 32,300 452
Sunrise Assisted Living, Inc.+ 25,900 285
Theragenics Corp.+ 35,900 381
Thermedics, Inc.+ 50,800 270
Thermo Cardiosystems, Inc.+ 44,600 282
ThermoLase Corp.+ 3,182 55
Transkaryotic Therapies, Inc.+ 24,200 1,125
United Payors & United
Providers, Inc.+ 24,500 412
US Oncology, Inc.+ 102,172 457
Vertex Pharmaceuticals, Inc.+ 32,800 939
Veterinary Centers of America,
Inc.+ 25,000 294
Warner Lambert Co. 30,643 2,446
West Pharmaceutical Services,
Inc. 18,400 636
Xomed Surgical Products, Inc.+ 15,000 912
Zila, Inc.+ 40,000 127
--------
70,313
--------
108
<PAGE>
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
HOUSEHOLD PRODUCTS -- 0.6%
- ------------------------------------------------------------
Bush Boake Allen, Inc.+ 22,600 $ 528
Chattem, Inc.+ 15,400 271
Church & Dwight Co., Inc. 48,400 1,261
Libbey, Inc. 20,600 546
Playtex Products, Inc.+ 74,600 895
Tupperware Corp. 73,700 1,460
--------
4,961
--------
- ------------------------------------------------------------
INSURANCE -- 3.1%
- ------------------------------------------------------------
Alfa Farmers Federation Corp. 51,000 912
American Annuity Group, Inc. 52,050 934
American Heritage Life
Investment Corp. 34,200 1,325
AmerUs Life Holdings, Inc.,
Class A 31,800 767
Argonaut Group, Inc. 28,200 679
Arthur J. Gallegher & Co. 22,100 1,144
Brown & Brown 17,000 574
Capital Re Corp. 47,300 668
Chicago Title Corp. 28,000 1,234
CNA Surety Corp. 52,500 604
Delphi Financial Group, Inc.,
Class A+ 25,168 805
E.W. Blanch Holdings 16,100 1,042
Enhance Financial Services
Group, Inc. 46,000 839
FBL Financial Group, Inc.,
Class A 40,400 740
Foremost Corp. of America 32,600 921
FPIC Insurance Group, Inc.+ 14,000 222
Frontier Insurance Group, Inc. 40,385 358
Harleysville Group, Inc. 38,600 659
HCC Insurance Holdings, Inc. 60,950 686
Kansas City Life Insurance Co. 16,400 638
LandAmerica Financial Group,
Inc. 19,100 355
Liberty Corp. 24,400 1,173
Markel Corp.+ 7,000 1,211
Medical Assurance, Inc.+ 28,311 662
National Western Life Insurance
Co., Class A+ 4,500 384
Orion Capital Corp. 33,800 1,652
Presidential Life Corp. 37,600 691
Risk Capital Holdings, Inc.+ 23,000 300
RLI Corp. 13,375 446
SCPIE Holdings, Inc. 16,000 562
Selective Insurance Group, Inc. 36,400 680
Number Value
of Shares (000s)
--------- --------
Sierra Health Services, Inc.+ 32,450 $ 237
State Auto Financial Corp. 49,700 572
Stewart Information Services
Corp. 16,000 238
Trenwick Group, Inc. 14,550 296
UICI+ 59,300 1,571
United Fire & Casualty Co. 11,200 250
W. R. Berkley Corp. 34,200 784
Zenith National Insurance Corp. 21,000 469
--------
28,284
--------
- ------------------------------------------------------------
MEDIA -- 4.4%
- ------------------------------------------------------------
Ackerly Group, Inc. 31,000 517
Amc Entertainment, Inc.+ 26,500 328
Applied Graphics Technologies+ 28,900 206
Banta Corp. 35,200 796
Big Flower Holdings, Inc.+ 24,300 734
CD Radio, Inc.+ 28,200 719
CNET, Inc.+ 93,000 4,388
Cox Communications, Inc.+ 83,675 3,802
Cox Radio, Inc., Class A+ 12,000 840
Cymer, Inc.+ 34,900 1,289
Gaylord Entertainment Co. 40,700 1,325
Hearst-Argyle Television, Inc.+ 67,000 1,361
Houghton Mifflin Co. 32,900 1,394
John Wiley & Sons, Inc.,
Class A 70,400 1,188
Jones Intercable, Inc.,
Class A+ 44,700 2,442
Journal Register Co.+ 57,300 813
Loews Cineplex Entertainment
Corp.+ 76,500 521
Macrovision Corp.+ 41,400 2,344
Oak Industries, Inc.+ 23,300 955
PanAmSat Corp.+ 24,000 948
Paxson Communications Corp.+ 66,000 775
Penton Media, Inc. 40,600 751
Sinclair Broadcast Group, Inc.+ 61,000 610
TV Guide, Inc.+ 97,400 5,126
United Television, Inc. 12,200 1,552
Westwood One, Inc.+ 67,100 3,095
Young Broadcasting, Inc.+ 14,400 668
--------
39,487
--------
- ------------------------------------------------------------
MISCELLANEOUS -- 0.4%
- ------------------------------------------------------------
CIRCOR International, Inc.+ 15,100 143
UnitedGlobalCom, Inc., Class A+ 39,900 3,471
--------
3,614
--------
109
<PAGE>
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
MISCELLANEOUS FINANCE -- 3.9%
- ------------------------------------------------------------
Advanta Corp., Class A 35,209 $ 627
Affiliated Managers Group,
Inc.+ 29,900 800
Allied Capital Corp. 78,800 1,581
AmeriCredit Corp.+ 92,000 1,598
Ameritrade Holding Corp.,
Class A+ 210,600 3,422
AMRESCO, Inc.+ 54,100 159
Cash America International,
Inc. 37,500 354
Charter One Financial, Inc. 45,382 1,115
Dain Rauscher Corp. 16,100 864
Eaton Vance Corp. 44,600 1,525
Fidelity National Financial,
Inc. 40,210 631
Financial Federal Corp.+ 17,500 376
First Financial Corp. 10,300 362
First Sentinel Bancorp., Inc. 53,262 436
Hambrecht and Quist Group,
Inc.+ 31,700 1,565
Interpool, Inc. 31,400 239
Investors Financial Services
Corp. 19,000 703
Jefferies Group, Inc. 30,200 644
JSB Financial, Inc. 11,600 697
LNR Property Corp. 32,900 637
Mail Well Holdings, Inc.+ 62,300 833
Morgan Keegan, Inc. 39,050 698
NCO Group, Inc.+ 31,500 1,335
Northwest Bancorp, Inc. 60,700 497
Ocwen Financial Corp.+ 73,600 492
Phoenix Investment Partners
Ltd. 55,000 464
Pioneer Group, Inc.+ 31,300 389
Profit Recovery Group
International, Inc.+ 58,900 2,426
Radian Group, Inc. 46,465 2,454
Raymond James Financial, Inc. 58,300 1,181
Resource Bancshares Mortgage
Group, Inc. 30,000 169
Sabre Group Holdings, Inc.+ 27,000 1,200
Student Loan Corp. 25,100 1,227
TeleBanc Financial Corp.+ 41,000 984
Value Line, Inc. 14,100 492
Webster Financial Corp. 46,900 1,343
White Mountain Insurance
Group, Inc.+ 6,409 811
--------
35,330
--------
- ------------------------------------------------------------
NON-FERROUS METALS -- 1.1%
- ------------------------------------------------------------
Asarco, Inc. 48,700 1,437
Commercial Metals Co. 19,233 627
Number Value
of Shares (000s)
--------- --------
Kaiser Aluminum Corp.+ 97,100 $ 625
MAXXAM, Inc.+ 9,000 408
Minerals Technologies, Inc. 26,700 1,151
Mueller Industries, Inc.+ 46,400 1,482
Phelps Dodge Corp. 38,885 2,192
Reliance Steel & Aluminum Co. 35,275 741
Stillwater Mining Co.+ 45,900 924
--------
9,587
- ------------------------------------------------------------
OIL - DOMESTIC -- 1.6%
- ------------------------------------------------------------
Cross Timbers Oil Co. 48,725 542
Devon Energy Corp. 101,630 3,951
Global Industries Ltd.+ 118,300 946
Houston Exploration Co.+ 31,300 612
National-Oilwell, Inc.+ 74,100 1,005
Pioneer Natural Resources Co.+ 128,600 1,206
Pogo Producing Co. 52,800 1,059
Pride International, Inc.+ 69,000 949
Santa Fe Snyder Corp.+ 231,375 1,996
Tesoro Petroleum Corp.+ 43,000 521
Trans Montaigne Oil, Inc.+ 36,300 422
UNOVA, Inc.+ 76,000 1,012
--------
14,221
--------
- ------------------------------------------------------------
OPTICAL & PHOTO -- 0.6%
- ------------------------------------------------------------
Avid Technology, Inc.+ 29,000 321
C-Cube Microsystems, Inc.+ 49,300 2,194
Ocular Sciences, Inc.+ 29,700 546
Photronics, Inc.+ 28,100 588
Polaroid Corp. 54,100 1,207
Ultratech Stepper, Inc.+ 25,300 402
Wesley Jessen VisionCare, Inc.+ 23,000 618
--------
5,876
--------
- ------------------------------------------------------------
PAPER & FOREST PRODUCTS-- 0.9%
- ------------------------------------------------------------
Buckeye Technology, Inc.+ 44,400 672
Caraustar Industries, Inc. 31,200 753
Chesapeake Corp. 26,100 783
Kimberly-Clark Corp. 16,690 1,054
Longview Fibre Co. 62,800 714
PH Glatfelter Co. 53,100 777
Potlatch Corp. 36,600 1,544
Rock Tennessee Co., Class A 30,330 463
Shorewood Packaging 35,450 450
Thermo Fibertek, Inc.+ 72,100 509
Wausau Mosinee Paper Corp. 64,325 812
--------
8,531
--------
110
<PAGE>
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
PRODUCER GOODS & MANUFACTURING -- 7.1%
- ------------------------------------------------------------
Advanced Energy Industries,
Inc.+ 33,400 $ 1,374
AGCO Corp. 77,400 832
Airgas, Inc.+ 90,600 861
Albany International Corp.,
Class A+ 38,317 582
AMETEK, Inc. 38,900 768
AptarGroup, Inc. 45,200 1,215
Artesyn Technologies+ 47,600 940
Astec Industries, Inc.+ 21,200 497
Baldor Electric, Co. 44,020 856
Barnes Group, Inc. 23,300 473
Boise Cascade Office Products
Corp.+ 81,400 834
Brady Corp., Class A 28,600 829
CLARCOR, Inc. 29,050 496
Credence Systems Corp.+ 28,950 1,321
DII Group, Inc.+ 38,300 1,379
Donaldson Co., Inc. 56,900 1,323
Dycom Industries, Inc.+ 28,400 925
Elcor Corp. 25,250 622
Flowserve Corp. 47,634 804
Foster Wheeler Corp. 50,500 568
Franklin Electric Corp. 7,400 534
General Binding Corp. 15,500 229
Graco, Inc. 25,437 852
Hughes Supply, Inc. 29,950 650
Husmann International, Inc. 62,600 1,002
IDEX Corp. 40,425 995
IGEN International, Inc.+ 20,800 512
Ionics, Inc.+ 18,700 552
JLG Industries, Inc. 30,500 391
Kennametal, Inc. 38,300 1,101
Lincoln Electric Co., Class A 55,800 1,249
Magnatek, Inc.+ 36,500 251
Manitowoc Co., Inc. 31,462 940
Mark IV Industries, Inc. 61,800 1,190
Matthews International Corp.,
Class A 17,500 440
Micrel, Inc.+ 52,800 2,871
Milacron Inc. 46,900 771
Mine Safety Appliances Co. 6,500 431
MSC Industrial Direct, Inc.+ 48,000 459
NACCO Industries, Inc., Class A 8,950 415
NCI Building Systems, Inc.+ 24,400 386
Nordson Corp. 18,400 815
PMC Sierra, Inc.+ 65,400 6,164
Polycom, Inc.+ 41,600 2,080
Precision Castparts Corp. 34,300 1,012
PRI Automation, Inc.+ 27,900 1,119
Number Value
of Shares (000s)
--------- --------
Rayovac Corp.+ 35,100 $ 873
Roper Industries, Inc. 37,400 1,155
Safeguard Scientifics, Inc.+ 43,200 3,634
SLI, Inc.+ 45,150 485
Specialty Equipment Companies,
Inc.+ 23,800 497
Springs Industries, Inc. 23,300 928
SPS Technologies, Inc.+ 17,100 530
SPX Corp.+ 24,567 2,082
Standex International Corp. 14,900 308
Tecumseh Products Co., Class A 24,900 1,194
Tennant Co. 13,000 429
Terex Corp.+ 34,100 902
Texas Industries, Inc. 26,800 960
Thermo Ecotek Corp.+ 43,250 330
Thermo Optek Corp.+ 63,000 535
Thermoquest Corp.+ 64,500 677
UCAR International, Inc.+ 57,100 1,117
Universal Forest Products, Inc. 26,000 377
Valmont Industries, Inc. 32,600 566
Watsco, Inc. 36,000 364
Watts Industries, Inc., Class A 35,200 482
Wyman Gordon Co.+ 45,500 896
--------
64,231
--------
- ------------------------------------------------------------
RAILROAD & SHIPPING -- 0.6%
- ------------------------------------------------------------
Alexander & Baldwin, Inc. 53,900 1,294
C.H. Robinson Worldwide, Inc. 50,700 1,714
MotivePower Industries, Inc.+ 33,150 396
Overseas Shipholding Group,
Inc. 45,500 586
Westinghouse Air Brake Co. 42,600 783
Wisconsin Central Transportation
Corp.+ 63,800 885
--------
5,658
--------
- ------------------------------------------------------------
REAL PROPERTY -- 0.3%
- ------------------------------------------------------------
CB Richard Ellis Services+ 24,800 305
Fairfield Communities, Inc.+ 56,800 696
Forest City Enterprises, Inc. 38,300 958
Trammell Crow Co.+ 45,300 657
--------
2,616
--------
- ------------------------------------------------------------
RETAIL -- 3.6%
- ------------------------------------------------------------
Ames Department Stores, Inc.+ 36,500 1,157
AnnTaylor Stores Corp.+ 41,500 1,766
Authentic Fitness Corp. 29,900 581
BJ's Wholesale Club, Inc.+ 83,800 2,582
Burlington Coat Factory
Warehouse Corp. 59,840 1,025
111
<PAGE>
SCHWAB SMALL-CAP INDEX FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- --------
Casey's General Stores, Inc. 67,800 $ 873
Central Garden & Pet Co.+ 26,800 194
Charming Shoppes, Inc.+ 120,500 599
The Children's Place Retail
Stores, Inc.+ 30,700 800
CHS Electronics, Inc.+ 31,900 28
Claire's Stores, Inc. 65,275 1,150
The Dress Barn, Inc.+ 28,000 498
Egghead.com, Inc.+ 35,200 328
Etec Systems, Inc.+ 26,900 1,027
Guitar Center, Inc.+ 28,400 259
Handleman Co.+ 42,000 677
Heilig-Meyers Co. 66,600 291
Insight Enterprises, Inc.+ 32,800 1,226
Just for Feet, Inc.+ 37,575 52
Keystone Automotive Industries,
Inc.+ 23,000 197
Lands' End, Inc. 37,300 2,870
Maxim Group, Inc.+ 24,600 129
Michaels Stores, Inc.+ 37,300 1,252
Movado Group, Inc. 18,000 396
Musicland Stores Corp.+ 45,000 352
Onsale, Inc+ 24,600 412
Pep Boys-Manny, Moe, & Jack 66,300 829
Pier 1 Imports, Inc. 123,900 736
Ruddick Corp. 57,700 985
ShopKo Stores, Inc.+ 37,700 945
Spiegel, Inc., Class A+ 163,400 2,369
SUPERVALU, Inc. 485 10
Systemax, Inc.+ 43,000 352
United Stationers, Inc.+ 41,900 1,068
Value City Department Stores,
Inc.+ 42,600 655
Venator Group, Inc.+ 173,300 1,213
Wet Seal, Inc., Class A+ 16,000 224
Wild Oats Markets, Inc.+ 17,000 599
Zale Corp.+ 38,100 1,595
--------
32,301
--------
- ------------------------------------------------------------
STEEL -- 0.4%
- ------------------------------------------------------------
AK Steel Holding Corp. 49,700 860
Carpenter Technology Corp. 27,400 668
Cleveland-Cliffs, Inc. 13,300 397
LTV Corp. 108,100 392
Ryerson Tull, Inc. 32,300 662
Steel Dynamics, Inc.+ 61,000 835
--------
3,814
--------
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
TELEPHONE -- 4.0%
- ------------------------------------------------------------
Adtran, Inc.+ 49,300 $ 1,830
Alltel Corp. 25,192 2,097
ANTEC Corp.+ 45,800 2,221
Aspect Telecommunications
Corp.+ 59,200 1,491
Associated Group, Inc.,
Class A+ 40,000 2,740
Commonwealth Telephone
Enterprises, Inc.+ 28,266 1,512
Emmis Communications Corp.,
Class A+ 17,000 1,226
ICG Communications, Inc.+ 59,900 981
IDT Corp.+ 28,200 645
Inter Tel, Inc. 33,000 524
Intermedia Communications,
Inc.+ 53,000 1,378
ITC DeltaCom, Inc.+ 74,900 1,798
NEXTLINK Communications, Inc.,
Class A+ 92,800 5,551
Pacific Gateway Exchange, Inc.+ 24,900 566
Paging Network, Inc.+ 109,300 102
PairGain Technologies, Inc.+ 86,700 1,062
Powertel, Inc.+ 34,600 2,037
Primus Telecommunications
Group, Inc.+ 36,000 797
STAR Telecommunications, Inc.+ 75,700 577
TALK.com, Inc.+ 76,700 1,222
Viatel, Inc.+ 40,400 1,348
Western Wireless Corp.,
Class A+ 62,800 3,321
World Access, Inc.+ 57,300 734
--------
35,760
--------
- ------------------------------------------------------------
TOBACCO -- 0.1%
- ------------------------------------------------------------
Brooke Ltd. 29,610 453
--------
- ------------------------------------------------------------
TRAVEL & RECREATION -- 1.5%
- ------------------------------------------------------------
Anchor Gaming, Inc.+ 15,200 927
Bally Total Fitness Holding
Corp.+ 29,200 703
Budget Group, Inc.+ 49,100 344
Callaway Golf Co. 95,700 1,286
Central Parking Corp. 48,100 1,290
Choice Hotels International,
Inc.+ 67,900 1,019
Coleman Co., Inc.+ 66,600 604
Extended Stay Amererica, Inc.+ 117,700 978
Family Golf Centers, Inc.+ 14,350 23
International Speedway Corp.,
Class A 21,711 1,121
The Marcus Corp. 37,225 523
Polaris Industries, Inc. 30,200 1,055
Prime Hospitality Corp.+ 61,000 477
112
<PAGE>
Number Value
of Shares (000s)
--------- --------
Speedway Motorsports, Inc.+ 41,500 $ 1,810
Sunterra+ 42,100 421
Travel Services International,
Inc.+ 15,000 131
Vail Resorts, Inc.+ 36,100 803
--------
13,515
--------
- ------------------------------------------------------------
TRUCKING & FREIGHT -- 1.6%
- ------------------------------------------------------------
Air Express International Corp. 42,050 1,120
AMERCO+ 20,200 595
American Freightways Corp.+ 40,000 825
Arnold Industries, Inc. 30,300 304
Consolidated Freightways Corp.+ 33,000 260
Eagle USA Airfreight, Inc.+ 36,500 1,077
Expeditores International of
Washington, Inc. 62,000 2,317
Fritz Companies, Inc.+ 46,000 515
Heartland Express, Inc.+ 39,047 530
J.B. Hunt Transport Services,
Inc. 44,050 567
Knight Transportation, Inc.+ 17,500 236
Landstar Systems, Inc.+ 13,100 531
M.S. Carriers, Inc.+ 16,000 452
Rollins Truck Leasing Corp. 73,450 707
US Freightways Corp. 32,700 1,482
Wabash National Corp. 28,000 445
Werner Enterprises, Inc. 60,062 957
XTRA Corp.+ 16,100 669
Yellow Corp.+ 31,600 537
--------
14,126
--------
- ------------------------------------------------------------
UTILITIES-ELECTRIC & GAS -- 4.3%
- ------------------------------------------------------------
Atmos Energy Corp. 41,700 946
Avista Corp. 52,000 936
Black Hills Corp. 27,100 610
Calpine Corp.+ 69,000 3,976
Central Hudson Gas & Electric
Corp. 22,300 835
Cleco Corp. 28,000 928
CMP Group, Inc. 39,500 1,052
Eastern Enterprises 34,500 1,764
Eastern Utilities Associates 25,600 774
El Paso Electric Co.+ 80,000 730
Empire District Electric Co. 22,200 547
Energen Corp. 37,800 699
Equitable Resources, Inc. 42,000 1,533
Indiana Energy, Inc. 37,933 766
Insituform Technologies, Inc.,
Class A+ 30,400 728
Laclede Gas Co. 25,800 550
Number Value
of Shares (000s)
--------- --------
Madison Gas & Electric Co. 18,600 $ 388
New Jersey Resources Corp. 24,100 981
Northwest Natural Gas Co. 32,400 838
Northwestern Public
Services Co. 29,000 662
NSTAR 16,595 632
NUI Corp. 15,000 372
Ocean Energy, Inc.+ 209,816 1,928
Otter Tail Power Co. 15,200 638
Philadelphia Suburban Corp. 51,100 1,175
Piedmont Natural Gas Co., Inc. 40,100 1,283
Primark Corp.+ 25,900 657
Public Service Co. of
New Mexico 50,800 908
Public Service Co. of North
Carolina, Inc. 26,600 836
SIGCORP, Inc. 29,749 773
Southern Union Co.+ 40,750 825
Southwest Gas Corp. 38,000 884
TNP Enterprises, Inc. 17,000 678
Triarc Companies, Inc.+ 35,300 702
UGI Corp. 40,800 979
Unisource Energy Corp.+ 41,680 479
United Illuminating Co. 17,500 906
United Water Resources, Inc. 50,300 1,698
WICOR, Inc. 48,400 1,440
WPS Resources Corp. 35,500 1,025
--------
39,061
--------
TOTAL COMMON STOCK
(Cost $785,507) 895,255
--------
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.0%
- ------------------------------------------------------------
First National Bank of Chicago
Time Deposit
4.750%*,11/01/99 8,678,891 8,679
--------
TOTAL SHORT-TERM INVESTMENTS
(Cost $8,679) 8,679
--------
TOTAL INVESTMENTS -- 100.5%
(COST $794,186) 903,934
--------
OTHER ASSETS AND LIABILITIES, NET -- (0.5%)
Other assets 4,963
Liabilities (9,880)
--------
(4,917)
--------
TOTAL NET ASSETS -- 100.0% 899,017
========
SEE ACCOMPANYING NOTES TO SCHEDULES OF INVESTMENTS AND NOTES TO
FINANCIAL STATEMENTS.
113
<PAGE>
SCHWAB INTERNATIONAL INDEX FUND(R)
SCHEDULE OF INVESTMENTS
October 31, 1999
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
COMMON STOCKS -- 97.9%
- ------------------------------------------------------------
AUSTRALIA -- 1.4%
- ------------------------------------------------------------
AMP Ltd. 103,858 $ 1,054
Australia & New Zealand
Banking Group 149,729 986
Brambles Industries Ltd. 21,618 607
Broken Hill Proprietary Co.
Ltd. 190,033 1,960
Cable and Wireless Optus Ltd.+ 371,819 850
Coca-Cola Beverage+ 33,834 64
Coles Myer Ltd. 110,972 551
Commonwealth Bank of Australia 90,055 1,473
National Australia Bank 166,171 2,560
News Corporation Ltd. 206,160 1,488
Westpac Banking Corp. 178,064 1,140
--------
12,733
--------
- ------------------------------------------------------------
BELGIUM -- 0.9%
- ------------------------------------------------------------
Almanij 18,715 992
Electrabel 5,247 1,729
Fortis (B) 74,605 2,516
Suez Lyonnaise Des Eaux 6,090 985
Tractebel Investors
International Capital 8,635 1,508
UCB 13,165 490
--------
8,220
--------
- ------------------------------------------------------------
CANADA -- 3.5%
- ------------------------------------------------------------
Alcan Aluminum Ltd. 21,666 711
Bank of Montreal 28,377 1,093
Bank of Nova Scotia 47,494 1,085
Barrick Gold Corp. 37,891 697
BCE, Inc. 71,932 4,335
BCT.Telus Communications, Inc. 26,400 543
Bombardier, Inc. Class B 65,600 1,158
Canadian Imperial
Bank of Commerce 38,845 838
Canadian National Railway Co. 18,400 559
Canadian Pacific Ltd. 32,124 752
Imasco Ltd. 46,200 1,241
Imperial Oil Ltd. 41,022 952
Loblaw Co. Ltd. 25,300 590
Nortel Networks Corp. 149,492 9,208
Royal Bank of Canada 30,186 1,303
Seagram Co. Ltd. 44,690 2,218
Thomson Corp. 69,032 2,019
Number Value
of Shares (000s)
--------- --------
Toronto-Dominion Bank Ontario 67,156 $ 1,542
Transcanada Pipelines Ltd. 41,600 502
--------
31,346
--------
- ------------------------------------------------------------
DENMARK -- 0.6%
- ------------------------------------------------------------
D/S 1912, Series B 109 1,102
D/S Svendborg, Series B 70 1,014
Den Danske Bank 4,463 508
Novo-Nordisk A/S, Series B 7,609 912
Tele Danmark A/S, Series B 22,588 1,370
--------
4,906
--------
- ------------------------------------------------------------
FRANCE -- 8.4%
- ------------------------------------------------------------
Accor 3,389 762
Air Liquide 10,179 1,567
Alcatel Alsthom SA 20,878 3,258
Alstom 30,523 924
Axa UAP 39,519 5,568
Banque Nationale de Paris 21,047 1,847
Bouygues SA 2,534 881
Canal Plus 11,772 816
Cap Gemini 8,643 1,308
Carrefour SA 26,218 4,848
Casino Guichard-Perrachon SA 7,216 819
Castorama Dubois 3,674 1,099
Cie de Saint-Gobain SA 8,703 1,509
Credit Commerical de France 7,012 807
Credit Lyonnais+ 26,866 812
Danone Groupe 7,193 1,833
L'Oreal SA 7,510 5,007
Lafarge SA 10,491 1,009
LVMH 10,532 3,176
Michelin, Series B 21,163 921
Paribas 16,070 1,672
PSAPeugeot Citroen 4,828 926
Pinault Printemps Redoute SA 11,313 2,155
Promodes 1,995 2,138
Rhone-Poulenc SA, Series A 35,850 2,004
Sanofi-Synthelabo SA+ 76,761 3,383
Schneider SA 15,109 1,040
Societe Generale 10,396 2,261
STMicroelectronics 28,890 2,535
Suez Lyonnaise des Eaux 15,300 2,468
Total Fina SA, Series B 80,744 10,902
Valeo SA 7,947 570
Vivendi 57,514 4,354
--------
75,179
--------
114
<PAGE>
Number Value
of Shares (000s)
--------- --------
- ------------------------------------------------------------
GERMANY -- 7.6%
- ------------------------------------------------------------
BASF AG 63,479 $ 2,818
Bayer AG 74,563 3,033
Bayerische Motoren Werke
(BMW) AG 69,914 2,239
Bayerische Vereinsbank AG 39,411 2,560
Celanese AG+ 5,961 94
Commerzbank AG 50,589 1,932
DaimlerChrysler AG 102,933 7,983
Degussa-Huels AG+ 15,400 583
Deutsche Bank AG 112,865 8,062
Dresdner Bank AG 52,448 2,697
ERGO Versicherungs 6,400 723
Hoechst AG 59,611 2,630
Lufthansa AG 35,068 737
Mannesmann AG 39,820 6,272
Metro AG 24,848 1,318
Muenchener Rueckversicherungs-
Gesellschaft 28,456 6,479
Preussag 17,000 920
RWE AG 48,301 1,934
SAP AG 5,697 2,114
Schering AG 6,082 728
Siemens AG 58,595 5,267
Thyssen Krupp AG+ 48,470 1,146
Veba AG 51,301 2,775
Viag AG 66,482 1,219
Volkswagen AG 31,520 1,855
--------
68,118
--------
- ------------------------------------------------------------
HONG KONG / CHINA -- 1.7%
- ------------------------------------------------------------
Cheung Kong Holdings 257,000 2,332
CLP Holdings Ltd. 232,900 1,067
Hang Seng Bank Ltd. 207,700 2,259
Henderson Land Development Co. 166,000 756
Hong Kong & China Gas Co. Ltd. 454,590 603
Hong Kong Electric Holdings
Ltd. 194,500 595
Hutchison Whampoa Ltd. 434,000 4,357
Sun Hung Kai Properties 268,694 2,170
Swire Pacific Ltd., Class A 149,500 741
Wharf Holdings Ltd. 219,000 633
--------
15,513
--------
- ------------------------------------------------------------
ITALY -- 3.4%
- ------------------------------------------------------------
Assicurazioni Generali 115,401 3,698
Autostrade 113,958 858
Number Value
of Shares (000s)
--------- --------
Banca Di Roma 525,000 $ 706
Banca Intesa SPA 236,332 1,008
Banca Commerciale Italiana 169,174 1,017
Banca Intesa SPA-RNC 60,500 116
Credito Italiano 546,400 2,555
Edison SPA 62,665 519
ENI SPA 863,700 5,046
Fiat SPA 35,391 1,119
Fiat SPA-RNC 6,026 94
Istituto Nazionale delle
Assicurazioni 385,525 1,169
Mediaset SPA 113,522 1,132
Olivetti SPA+ 382,654 744
Telecom Italia SPA 486,774 4,199
Telecom Italia SPA - RNC 179,792 882
TIM SPA 746,838 4,661
TIM SPA - RNC 223,802 776
--------
30,299
--------
- ------------------------------------------------------------
JAPAN -- 31.3%
- ------------------------------------------------------------
Advantest Corp. 9,700 1,459
Ajinomoto Co., Inc. 61,000 683
Asahi Bank 307,000 2,723
Asahi Breweries 48,000 682
Asahi Chemical Industry Co.
Ltd 139,000 839
Asahi Glass Co. Ltd. 111,000 881
Bank of Tokyo-Mitsubishi Ltd. 523,500 8,665
Bridgestone Corp. 92,000 2,529
Canon, Inc. 98,000 2,769
Central Japan Railway 248 1,675
Chubu Electric Power Co. 70,100 1,194
The Chugoku Electric Power Co.,
Inc. 82,000 1,218
Dai Nippon Printing Co. 87,000 1,584
Dai-Ichi Kangyo Bank Ltd. 351,000 4,808
Daiwa House Industry Co. Ltd. 120,000 1,097
Daiwa Securities Group Inc. 128,000 1,365
DDI Corp. 249 2,719
Denso 95,000 2,029
East Japan Railway Co. 375 2,295
Fanuc 27,100 2,103
Fuji Bank Ltd. 387,000 5,301
Fuji Photo Film Co. 57,000 1,829
Fujitsu Ltd. 210,000 6,316
Hitachi Ltd. 375,000 4,048
Honda Motor Co. Ltd. 110,000 4,636
Hoya Corp. 11,000 790
Industrial Bank of Japan Ltd. 297,000 4,011
115
<PAGE>
SCHWAB INTERNATIONAL INDEX FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- --------
Ito Yokado Co. Ltd. 47,000 $ 3,755
Japan Telecom Co. Ltd. 43 1,475
Japan Tobacco, Inc. 209 2,302
Jusco Co. 30,000 698
Kansai Electric Power Co. 108,300 2,022
Kao Corp. 68,000 2,071
Kawasaki Steel Corp.+ 330,000 746
Keyence Corp. 4,000 1,071
Kinki Nippon Railway Co. 152,830 707
Kirin Brewery Co. Ltd. 97,000 1,109
Komatsu Ltd. 212,000 1,231
Kyocera Corp. 22,000 2,107
Kyushu Electric Power Co. 44,700 662
Matsushita Communications
Industrial Co. Ltd. 20,000 3,356
Matsushita Electric Industrial
Co. Ltd. 232,000 4,878
Matsushita Electric Works 67,000 648
Mazda Motor Corp. 118,000 641
Mitsubishi Chemical Corp. 200,000 906
Mitsubishi Corp. 148,000 1,063
Mitsubishi Electric Corp. 212,000 1,172
Mitsubishi Estate Co. 151,000 1,511
Mitsubishi Heavy Industries
Ltd. 386,000 1,512
Mitsubishi Trust & Banking
Corp. 146,000 1,962
Mitsui & Co. 149,000 1,100
Murata Manufacturing Co. 25,000 3,209
NEC Corp. 183,000 3,699
The Nikko Securities Co. Ltd. 156,000 1,464
Nintendo Co. Ltd. 14,600 2,314
Nippon Express Co. 99,000 700
Nippon Mitsubishi Oil Corp. 142,000 626
Nippon Steel Corp. 712,000 1,807
Nippon Telegraph & Telephone
Corp. 1,426 21,854
Nissan Motor Co. Ltd.+ 282,000 1,688
Nomura Securities Co. Ltd. 221,000 3,643
NTT Mobile Communications
Network, Inc. 1,337 35,474
Osaka Gas Co. 238,000 796
Ricoh Co. Ltd. 65,000 1,059
Rohm Co. 13,000 2,914
Sakura Bank 459,000 3,939
Sankyo Co. 52,000 1,479
Sanwa Bank 326,000 4,843
Sanyo Electric Co. Ltd. 177,000 848
Secom Co. 24,000 2,570
Secom Co. Ltd.+ 12,000 1,276
Number Value
of Shares (000s)
--------- --------
Seibu Railway Co. 41,000 $ 539
Sekisui House 67,000 725
Seven-Eleven Japan Co. 93,000 8,507
Sharp Co. 118,000 1,876
Shin-Etsu Chemical Co. 45,700 1,882
Shiseido Co. Ltd. 92,000 1,401
Shizuoka Bank 75,000 848
SMC Corp. 6,000 1,011
Sony Corp. 45,700 7,118
Sumitomo Bank 353,000 5,674
Sumitomo Chemical Co. Ltd. 156,000 1,000
Sumitomo Corp. 98,000 715
Sumitomo Electric Industries 68,000 913
Sumitomo Trust & Banking Co. 134,000 1,368
Suzuki Motor Corp. 47,000 713
Taisho Pharmaceuticals Co. 33,000 1,372
Takeda Chemical Industries 100,000 5,738
TDK Corp. 13,000 1,271
Tohoku Electric Power Co. 47,600 742
Tokai Bank 253,000 2,205
Tokio Marine & Fire
Insurance Co. 173,000 2,262
Tokyo Electric Power Co. Inc. 152,700 3,408
Tokyo Electronics 17,000 1,410
Tokyo Gas Co. 265,000 627
Toppan Printing Co. 71,000 870
Toray Industries, Inc. 132,000 727
Toshiba Corp. 335,000 2,105
Toyota Motor Corp. 422,000 14,592
West Japan Railway 175 729
Yamanouchi Pharmaceutical Co. 40,000 1,812
Yamato Transport Co. Ltd. 42,000 1,207
--------
280,522
--------
- ------------------------------------------------------------
NETHERLANDS -- 5.9%
- ------------------------------------------------------------
ABN-AMRO Holdings NV 163,279 3,944
Aegon NV 74,613 6,879
Ahold NV 67,631 2,075
Akzo Nobel NV 30,366 1,306
Asm Lithography+ 15,569 1,098
Dordtsche Petroleum 18,778 955
Elsevier NV 62,558 594
Fortis NV 46,628 1,603
ING Groep NV 106,433 6,271
Koninklijke (Royal) Philips
Electronics NV 37,996 3,892
Koninklijke KPN NV 53,399 2,737
Royal Dutch Petroleum Co. 240,285 14,348
TNT Post Group NV 50,000 1,271
116
<PAGE>
Number Value
of Shares (000s)
--------- --------
Unilever NV 64,049 $ 4,240
NU NV 15,978 540
Wolters Kluwer CVA 25,860 863
--------
52,616
--------
- ------------------------------------------------------------
SPAIN -- 2.5%
- ------------------------------------------------------------
Argentaria Corp. 51,666 1,145
Banco Popular Espanol 10,581 712
Banco Santander Central
Hispano, SA 411,004 4,262
BCO Bilbao Vizcaya 233,033 3,129
Endesa, SA 115,790 2,315
Iberdrola, SA 91,842 1,337
Repsol 133,124 2,742
SDG, SA 48,071 1,051
Telefonica, SA+ 358,455 5,890
--------
22,583
--------
- ------------------------------------------------------------
SWEDEN -- 2.4%
- ------------------------------------------------------------
ABB AB, Series A+ 59,869 844
ABB AB, Series B 27,898 393
AstraZeneca Group 78,641 3,546
Electrolux AB, Series B 33,539 668
Foreningssparbaken, Series A 49,830 792
Hennes & Mauritz AB, Series B 86,650 2,298
L.M. Ericsson Telephone,
Series B 196,631 8,162
Nordbanken Holding 109,987 641
Skandinaviska Enskilda Banken,
Series A 55,158 566
Skandia Forsakrings 47,987 1,066
Svenska Handelsbanken AB,
Series B 33,169 419
Svenska Handlesbanken AB,
Series A 58,464 809
Volvo AB, Series A 14,094 367
Volvo AB, Series B 28,295 730
--------
21,301
--------
- ------------------------------------------------------------
SWITZERLAND -- 6.1%
- ------------------------------------------------------------
ABB Ltd.+ 12,815 1,290
Adecco SA 1,525 924
Alusuisse Lonza HD, Registered 516 315
Cie Financiere Richemont,
Series A 484 924
Clariant, Registered 6,020 2,633
Credit Suisse Group,
Registered 29,857 5,736
Holderbank Financiere Glaris,
Registered 988 326
Holderbank Financiere Glaris,
Bearer 489 602
Nestle SA, Registered 4,409 8,499
Novartis AG, Registered 7,552 11,289
Roche Group Holding, Bearer 179 3,122
Roche Holding Genusscheine,
Genus 787 9,443
Number Value
of Shares (000s)
--------- --------
UBS AG, Registered 22,574 $ 6,564
Zurich Allied 4,786 2,708
--------
54,375
--------
- ------------------------------------------------------------
UNITED KINGDOM -- 22.2%
- ------------------------------------------------------------
Abbey National 143,437 2,800
Alliance & Leicester 56,286 819
Allied Domecq PLC 100,696 564
Amvescap PLC 62,833 561
Associated British Foods PLC 74,233 463
Astra Zeneca 188,348 8,503
BAA PLC 101,975 747
Bank of Scotland PLC 119,449 1,487
Barclays PLC 159,021 4,860
BASS PLC 84,090 922
BG 402,975 2,233
Billiton PLC 214,158 924
BOC Group PLC 47,105 1,007
Boots Co. 87,940 902
BP Amoco PLC 2,175,919 21,077
British Aerospace 170,095 992
British Airways 101,419 527
British American Tobacco PLC 217,224 1,436
British Energy PLC 62,115 421
British Energy PLC, Class A+ 69,338 61
British Sky Broadcast 186,172 1,996
British Telecommunications 719,005 13,015
Cable & Wireless Communications
PLC+ 169,765 1,777
Cable & Wireless PLC 241,495 2,817
Cadbury Schweppes PLC 235,246 1,539
Centrica PLC 374,373 1,085
CGU PLC 135,034 1,964
Compass Group 63,486 679
Diageo PLC 367,334 3,706
Dixons Group PLC 43,071 762
General Electric Co. PLC 275,372 2,988
GKN PLC 68,570 1,096
Glaxo Wellcome PLC 406,627 11,980
Granada Group PLC 184,593 1,457
Great Universal Stores 96,886 734
Halifax Group PLC 237,013 3,023
Hanson PLC 66,048 517
Hays PLC 80,562 920
Hilton Group PLC 143,333 436
HSBC Holdings PLC 935,299 11,499
Imperial Chemical Industries 70,083 696
Imperial Tobacco Group PLC 50,174 531
117
<PAGE>
SCHWAB INTERNATIONAL INDEX FUND(R)
SCHEDULE OF INVESTMENTS (continued)
October 31, 1999
Number Value
of Shares (000s)
--------- --------
Invensys PLC 393,424 $ 1,930
Kingfisher 130,998 1,428
Legal & General Group 584,581 1,621
Lloyds TSB Group PLC 573,765 7,920
Marks & Spencer PLC 308,203 1,416
National Grid Group PLC 142,040 1,059
National Power Development 116,098 783
National Westminster Bancorp. 180,366 4,065
Norwich Union 200,386 1,534
Pearson, Inc. 58,718 1,317
Peninsular & Oriental Steam
Navigation 61,918 885
Powergen 62,373 546
Prudential Corp. 197,361 3,090
Railtrack Group 54,390 1,099
Reed International 109,855 640
Rentokil Initial 301,426 1,003
Reuters Holdings Group PLC 140,900 1,307
Rio Tinto 113,199 1,933
Rolls Royce PLC 145,560 516
Royal & Sun Alliance Insurance
Group PLC 149,862 1,018
Royal Bank of Scotland 95,756 2,202
Sainsbury, J 183,737 1,101
Schroders 28,387 567
Scottish & Newcastle 58,153 540
Scottish & Southern Energy PLC 84,405 795
ScottishPower PLC 127,330 1,179
Shell Transport & Trading
Co. 1,045,470 8,001
Smithkline Beecham 593,757 7,636
Standard Chartered PLC 120,932 1,693
Telewest Communications PLC+ 230,171 983
Tesco PLC 734,455 2,181
Unilever PLC 294,429 2,726
United Utilities PLC 51,412 508
Vodafone Airtouch 3,153,720 14,641
Whitbread 47,616 518
Woolwich 147,508 869
WPP Group PLC 76,775 832
--------
198,605
--------
TOTAL COMMON STOCK
(Cost $629,366) 876,316
--------
Number Value
of Shares (000s)
--------- -------
- ------------------------------------------------------------
PREFERRED STOCKS -- 0.5%
- ------------------------------------------------------------
AUSTRALIA -- 0.2%
- ------------------------------------------------------------
News Corporation Ltd. 207,812 $ 1,404
--------
- ------------------------------------------------------------
GERMANY -- 0.3%
- ------------------------------------------------------------
Metro AG 3,260 96
RWE 18,788 596
SAP AG 4,437 1,958
Volkswagen AG 7,870 279
--------
2,929
--------
- ------------------------------------------------------------
ITALY -- 0.0%
- ------------------------------------------------------------
Fiat SPA 19,047 292
--------
292
--------
TOTAL PREFERRED STOCKS
(Cost $3,414) 4,625
--------
- ------------------------------------------------------------
RIGHTS -- 0.0%
- ------------------------------------------------------------
UNITED KINGDOM -- 0.0%
- ------------------------------------------------------------
Telewest Communications 20,924 16
--------
TOTAL RIGHTS
(Cost $0) 16
--------
- ------------------------------------------------------------
WARRANTS -- 0.0%
- ------------------------------------------------------------
FRANCE -- 0.0%
- ------------------------------------------------------------
Vivendi 8,094 18
--------
TOTAL WARRANTS
(Cost $5) 18
--------
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.3%
- ------------------------------------------------------------
First National Bank of Chicago
Time Deposit
4.750%*, 11/01/99 11,602,324 11,602
--------
TOTAL SHORT-TERM INVESTMENTS
(Cost $11,602) 11,602
--------
TOTAL INVESTMENTS -- 99.7%
(COST $644,387) 892,577
--------
OTHER ASSETS AND LIABILITIES, NET -- 0.3%
Other assets 3,835
Liabilities (907)
--------
2,928
--------
TOTAL NET ASSETS -- 100.0% 895,505
========
118
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
October 31, 1999
+ Non-income producing security.
* Interest rate represents the yield on report date.
ADR -- American Depository Receipt
Ltd. -- Limited
LP -- Limited Partnership
PLC -- Public Limited Company
(a) Yields shown are effective yields at time of purchase.
(b) These securities, or portion thereof, are being used to collaterize open
futures contracts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
119
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (in thousands)
October 31, 1999
<TABLE>
<CAPTION>
Schwab Schwab Schwab Total Schwab Schwab
S&P 500 1000 Stock Market Small-Cap International
Fund Fund(R) Index Fund(TM) Index Fund(R) Index Fund(R)
--------- -------- -------------- ------------ -------------
ASSETS
<S> <C> <C> <C> <C> <C>
Investments, at value (Cost: $5,772,682, $4,266,599,
$276,638, $794,186 and $644,387, respectively) $7,374,601 $7,134,595 $285,124 $903,934 $892,577
Cash -- -- -- 736 --
Amounts on deposit with brokers 4,010 2,544 360 -- --
Cash held as collateral for securities on loan
(see Note 6) 1,132,053 1,251,896 50,384 -- --
Receivables:
Investments sold -- -- 21 2,368 --
Fund shares sold 12,291 5,955 617 1,541 1,779
Interest 88 55 19 21 5
Dividends 6,085 5,685 214 265 1,258
Securities lending income 111 118 8 -- --
Variation margin 197 260 52 -- --
Dividend tax reclaim -- -- -- -- 774
Advisory reimbursement to Fund -- -- 207 -- --
Prepaid expenses 183 94 -- 32 19
---------- ---------- -------- -------- --------
Total assets 8,529,619 8,401,202 337,006 908,897 896,412
---------- ---------- -------- -------- --------
LIABILITIES
Collateral held for securities on loan (see Note 6) 1,132,053 1,251,896 50,384 -- --
Payables:
Investments purchased 9,109 1,423 1,120 9,112 --
Fund shares redeemed 19,806 8,069 281 544 623
Interest expense 35 16 -- -- --
Investment advisory and administration fees 309 494 160 50 33
Transfer agency and shareholder service fees 164 331 29 37 37
Overdraft from custodian -- -- -- -- 47
Withholding taxes -- -- -- -- 26
Accrued expenses 768 782 182 137 141
---------- ---------- -------- -------- --------
Total liabilities 1,162,244 1,263,011 52,156 9,880 907
---------- ---------- -------- -------- --------
Net assets applicable to outstanding shares $7,367,375 $7,138,191 $284,850 $899,017 $895,505
========== ========== ======== ======== ========
NET ASSETS CONSIST OF:
Paid-in capital $5,697,465 $4,247,588 $275,455 $793,117 $654,970
Undistributed net investment income 56,216 42,250 940 2,205 8,898
Accumulated net realized gain (loss) on investments
sold, futures contracts and foreign currency
transactions 11,596 (20,318) (129) (6,053) (16,553)
Net unrealized appreciation on investments
and futures contracts 1,602,098 2,868,671 8,584 109,748 248,190
---------- ---------- -------- -------- --------
$7,367,375 $7,138,191 $284,850 $899,017 $895,505
========== ========== ======== ======== ========
PRICING OF SHARES
Netasset value, offering and redemption price
per share, applicable to outstanding shares,
$0.00001 par value (unlimited shares authorized)
Investor Shares ($3,182,724/150,316,
$4,924,606/132,655, $135,719/6,502,
$452,099/25,968, $446,625/24,907, respectively) $21.17 $37.12 $20.87 $17.41 $17.93
Select Shares ($3,750,052/176,626,
$2,213,585/59,563, $149,131/7,140,
$446,918/25,625, $448,880/24,994, respectively) $21.23 $37.16 $20.89 $17.44 $17.96
e. Shares ($434,599/20,492) $21.21 NA NA NA NA
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
120
<PAGE>
STATEMENTS OF OPERATIONS (in thousands)
For the period ended October 31, 1999
<TABLE>
<CAPTION>
Schwab Schwab Schwab Total Schwab Schwab
S&P 500 1000 Stock Market Small-Cap International
Fund Fund(R) Index Fund(TM) Index Fund(R) Index Fund(R)
--------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends (net of foreign taxes withheld of
$824, $5, $0, $2 and $1,191, respectively) $ 78,129 $ 76,592 $1,099 $ 5,932 $ 12,254
Interest 2,669 829 124 234 692
Securities lending 718 1,154 32 99 --
---------- ---------- ------ -------- --------
Total investment income 81,516 78,575 1,255 6,265 12,946
---------- ---------- ------ -------- --------
Expenses:
Investment advisory and administration fees1 9,330 14,342 284 3,601 4,380
Transfer agency and shareholder service fees
Investor Shares 6,785 11,341 115 1,183 1,063
Select Shares 2,902 1,801 48 294 255
e.Shares 394 -- -- -- --
Custodian fees 178 200 136 50 323
Portfolio accounting fees 925 960 20 128 115
Professional fees 86 77 13 40 39
Registration fees 908 651 105 205 119
Shareholder reports 543 534 35 101 63
Trustees' fees 37 52 1 9 8
Interest expense 31 16 -- -- --
Other expenses 243 79 24 30 31
---------- ---------- ------ -------- --------
32,362 30,053 781 5,641 6,396
Less:expenses reduced (see Note 4) (16,216) (2,866) (466) (2,206) (2,732)
---------- ---------- ------ -------- --------
Net expenses incurred by fund 16,146 27,187 315 3,435 3,664
---------- ---------- ------ -------- --------
Net investment income 65,370 51,388 940 2,830 9,282
---------- ---------- ------ -------- --------
Netrealized gain (loss) on investments, futures
contracts and foreign currency transactions:
Net realized gain (loss) on investments sold 19,693 (15,388) (24) (5,689) 7
Net realized gain (loss) on futures contracts 2,939 1,693 (105) -- --
Net realized loss on foreign currency transactions -- -- -- -- (443)
---------- ---------- ------ -------- --------
Net realized gain (loss) on investments,
futures contracts and foreign currency
transactions 22,632 (13,695) (129) (5,689) (436)
---------- ---------- ------ -------- --------
Change in net unrealized appreciation (depreciation)
on investments, futures contracts and foreign
currency translation:
Net unrealized appreciation on investments 1,063,815 1,243,992 8,486 135,451 159,624
Net unrealized appreciation (depreciation) on
futures contracts (542) 256 98 -- --
Net unrealized depreciation on foreign currency
translation -- -- -- -- (36)
---------- ---------- ------ -------- --------
Net unrealized appreciation on investments,
futures contracts and foreign currency
translation 1,063,273 1,244,248 8,584 135,451 159,588
---------- ---------- ------ -------- --------
Net gain on investments 1,085,905 1,230,553 8,455 129,762 159,152
---------- ---------- ------ -------- --------
Increase in net assets resulting from operations $1,151,275 $1,281,941 $9,395 $132,592 $168,434
========== ========== ====== ======== ========
<FN>
+For the period from June 1, 1999 (commencement of operations) to October 31, 1999.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
121
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
For the periods ended October 31,
<TABLE>
<CAPTION>
Schwab Total
Schwab S&P 500 Schwab 1000 Stock Market
Fund Fund(R) Index Fund(TM)+
-------------------- ------------------- ----------------
1999 1998 1999 1998 1999
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 65,370 $ 35,310 $ 51,388 $ 41,143 $ 940
Net realized gain (loss) on investments and futures
contracts 22,632 (8,303) (13,695) (1,169) (129)
Change in net unrealized appreciation on investments
and futures contracts 1,063,273 371,823 1,244,248 586,248 8,584
---------- ---------- ---------- --------- --------
Increase in net assets resulting from operations 1,151,275 398,830 1,281,941 626,222 9,395
---------- ---------- ---------- --------- --------
Dividends to shareholders from net investment income
Investor Shares (18,212) (8,697) (31,297) (27,684) --
Select Shares (19,016) (5,313) (11,925) (5,010) --
e. Shares (2,807) (1,504) -- -- --
---------- ---------- ---------- --------- --------
Total dividends to shareholders (40,035) (15,514) (43,222) (32,694) --
---------- ---------- ---------- --------- --------
Capital share transactions:
Proceeds from shares sold 5,031,249 3,118,974 2,713,020 2,003,202 295,297
Net asset value of shares issued in reinvestment of
dividends 37,624 14,660 39,869 29,584 --
Early withdrawal fees (see Note 8) -- -- 1,032 834 79
Payments for shares redeemed (2,577,012)(1,293,119) 1,552,122) (966,474) (19,921)
---------- ---------- ---------- ---------- --------
Increase in net assets from capital share
transactions 2,491,861 1,840,515 1,201,799 1,067,146 275,455
---------- ---------- ---------- ---------- --------
Total increase in net assets 3,603,101 2,223,831 2,440,518 1,660,674 284,850
Net Assets:
Beginning of period 3,764,274 1,540,443 4,697,673 3,036,999 --
---------- ---------- ---------- ---------- --------
End of period (including undistributed
net investment income of $56,216, $30,878, $42,250,
$34,084, and $940, respectively) $7,367,375 $3,764,274 7,138,191 $4,697,673 $284,850
========== ========== ========== ========== ========
Number of fund shares:
Sold 253,908 190,511 78,398 69,393 14,629
Reinvested 2,052 1,017 1,241 1,155 --
Redeemed (129,013) (79,685) (44,491) (33,764) (987)
--------- ---------- --------- -------- ------
Net increase in shares outstanding 126,947 111,843 35,148 36,784 13,642
Shares outstanding:
Beginning of period 220,487 108,644 157,070 120,286 --
--------- ---------- --------- -------- ------
End of period 347,434 220,487 192,218 157,070 13,642
========== ========== ========== ========== ========
<FN>
+For the period from June 1, 1999 (commencement of operations) to October 31, 1999.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
122
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
For the years ended October 31,
<TABLE>
<CAPTION>
Schwab Schwab
Small-Cap International
Index Fund(R) Index Fund(R)
---------------------- ----------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Operations:
Net investment income $ 2,830 $ 2,248 $ 9,282 $ 6,328
Net realized gain (loss) on investments and foreign
currency transactions (5,689) 50,081 (436) (13,292)
Change in net unrealized appreciation (depreciation) on investments
and foreign currency translation 135,451 (145,100) 159,588 31,926
-------- -------- -------- --------
Increase (decrease) in net assets resulting from operations 132,592 (92,771) 168,434 24,962
-------- -------- -------- --------
Dividends to shareholders from net investment income
Investor Shares (1,755) (1,517) (4,066) (3,700)
Select Shares (752) (379) (1,055) (654)
Distibutions to shareholders from net capital gains
Investor Shares (27,699) -- -- --
Select Shares (8,884) -- -- --
-------- -------- -------- --------
Total dividends and distributions to shareholders (39,090) (1,896) (5,121) (4,354)
-------- -------- -------- --------
Capital share transactions:
Proceeds from shares sold 608,419 417,865 520,176 233,250
Net asset value of shares issued in reinvestment of dividends 36,340 1,744 4,702 3,935
Early withdrawal fees (see Note 8) 408 212 115 127
Payments for shares redeemed (468,908) (187,542) (314,823) (103,260)
-------- -------- -------- --------
Increase in net assets from capital share transactions 176,259 232,279 210,170 134,052
-------- -------- -------- --------
Total increase in net assets 269,761 137,612 373,483 154,660
Net Assets:
Beginning of year 629,256 491,644 522,022 367,362
-------- -------- -------- --------
End of year (including undistributed net investment income
of $2,205, $1,866, $8,898, and $5,810, respectively) $899,017 $629,256 $895,505 $522,022
======== ======== ======== ========
Number of fund shares:
Sold 37,207 23,894 32,399 16,160
Reinvested 2,378 102 316 302
Redeemed (28,855) (10,855) (19,551) (7,328)
-------- -------- -------- --------
Net increase in shares outstanding 10,730 13,141 13,164 9,134
Shares outstanding:
Beginning of year 40,863 27,722 36,737 27,603
-------- -------- -------- --------
End of year 51,593 40,863 49,901 36,737
======== ======== ======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
123
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
SCHWAB S&P 500 FUND 11/1/98- 11/1/97- 11/1/96- 5/1/96-
INVESTOR SHARES 10/31/99 10/31/98 10/31/97 10/31/96
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER-SHARE DATA ($)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset valueat beginning of period 17.05 14.17 10.88 10.00
------------------------------------------------------------------
Income from investment operations:
Net investment income 0.17 0.16 0.14 0.08
------------------------------------------------------------------
Total income from investment operations 4.27 3.01 3.38 0.88
Less distributions:
Dividends from net investment income (0.15) (0.13) (0.09) --
------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 21.17 17.05 14.17 10.88
------------------------------------------------------------------
Total return (%) 25.20 21.39 31.29 8.80(1)
RATIOS/SUPPLEMENTAL DATA (%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.35 0.35 0.38 0.49(2)
Expense reductions reflected in above ratio 0.27 0.28 0.32 0.40(2)
Ratio of net investment income to average net assets 1.01 1.25 1.49 1.89(2)
Portfolio turnover rate 3 1 3 1
Net assets, end of period ($ x 1,000) 3,182,724 1,935,398 923,148 243,772
- ---------------------------------------------------------------------------------------------------------------------------
11/1/98- 11/1/97- 5/1/96-
SELECT SHARES(R) 10/31/99 10/31/98 10/31/96
- ---------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset valueat beginning of period 17.09 14.19 12.85
------------------------------------------------------------------
Income from investment operations:
Net investment income 0.20 0.26 0.05
Net realized and unrealized gain on investments 4.12 2.78 1.29
------------------------------------------------------------------
Total income from investment operations 4.32 3.04 1.34
Less distributions:
Dividends from net investment income (0.18) (0.14) --
------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 21.23 17.09 14.19
------------------------------------------------------------------
Total return (%) 25.42 21.63 10.43(1)
RATIOS/SUPPLEMENTAL DATA (%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.19 0.19 0.19(2)
Expense reductions reflected in above ratio 0.28 0.28 0.34(2)
Ratio of net investment income to average net assets 1.17 1.40 1.46(2)
Portfolio turnover rate 3 1 3
Net assets, end of period ($ x 1,000) 3,750,052 1,548,052 485,604
</TABLE>
(1) Not annualized.
(2) Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
124
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
11/1/98- 11/1/97- 11/1/96- 5/1/96-
E.SHARES(R) 10/31/99 10/31/98 10/31/97 10/31/96
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER-SHARE DATA ($)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset valueat beginning of period 17.08 14.19 10.89 10.00
------------------------------------------------------------------
Income from investment operations:
Net investment income 0.20 0.15 0.21 0.04
Net realized and unrealized gain on investments 4.09 2.88 3.19 0.85
------------------------------------------------------------------
Total income from investment operations 4.29 3.03 3.40 0.89
Less distributions:
Dividends from net investment income (0.16) (0.14) (0.10) --
------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 21.21 17.08 14.19 10.89
------------------------------------------------------------------
Total return (%) 25.28 21.50 31.48 8.90(1)
RATIOS/SUPPLEMENTAL DATA (%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.28 0.28 0.28 0.28(2)
Expense reductions reflected in above ratio 0.20 0.24 0.33 0.91(2)
Ratio of net investment income to average net assets 1.08 1.32 1.61 1.82(2)
Portfolio turnover rate 3 1 3 1
Net assets, end of period ($ x 1,000) 434,599 280,824 131,691 36,331
</TABLE>
(1) Not annualized.
(2) Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
125
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
SCHWAB 1000 FUND(R) 11/1/98- 11/1/97- 9/1/97- 9/1/96- 9/1/95- 9/1/94-
INVESTOR SHARES 10/31/99 10/31/98 10/31/97 8/31/97 8/31/96 8/31/95
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset valueat beginning of period 29.90 25.25 24.78 18.14 15.68 13.08
--------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.26 0.27 0.04 0.28 0.24 0.26
Net realized and unrealized gain on investments 7.21 4.64 0.43 6.62 2.45 2.48
--------------------------------------------------------------------------
Total from investment operations 7.47 4.91 0.47 6.90 2.69 2.74
Less distributions:
Dividends from net investment income (0.25) (0.26) -- (0.26) (0.23) (0.14)
--------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 37.12 29.90 25.25 24.78 18.14 15.68
--------------------------------------------------------------------------
Total return (%) 25.12 19.63 1.90(1) 38.32 17.27 21.23
RATIOS/SUPPLEMENTAL DATA (%)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.46 0.46 0.46(2) 0.47 0.49 0.54
Expense reductions reflected in above ratio 0.05 0.05 0.04(2) 0.06 0.08 0.09
Ratio of net investment income to average net assets 0.78 1.02 1.00(2) 1.33 1.66 2.03
Portfolio turnover rate 3 2 -- 2 2 2
Net assets, end of period ($ x 1,000) 4,924,606 3,657,122 2,610,607 2,498,891 1,560,059 826,714
--------------------------------------------------------------------------
11/1/98- 11/1/97- 9/1/97- 5/19/97-
SELECT SHARES(R) 10/31/99 10/31/98 10/31/97 8/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset valueat beginning of period 29.93 25.26 24.79 22.64
--------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.30 0.32 0.04 0.05
Net realized and unrealized gain on investments 7.22 4.63 0.43 2.10
--------------------------------------------------------------------------
Total income from investment operations 7.52 4.95 0.47 2.15
Less distributions:
Dividends from net investment income (0.29) (0.28) -- --
--------------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 37.16 29.93 25.26 24.79
--------------------------------------------------------------------------
Total return (%) 25.29 19.79 1.90(1) 9.50(1)
RATIOS/SUPPLEMENTAL DATA (%)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.35 0.35 0.35(2) 0.35(2)
Expense reductions reflected in above ratio 0.02 0.04 0.06(2) 0.33(2)
Ratio of net investment income to average net assets 0.89 1.11 1.11(2) 1.26(2)
Portfolio turnover rate 3 2 -- 2
Net assets, end of period ($ x 1,000) 2,213,585 1,040,551 426,392 347,244
</TABLE>
(1) Not annualized.
(2) Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
126
<PAGE>
<TABLE>
<CAPTION>
SCHWAB TOTAL STOCK MARKET INDEX FUND(R) 6/1/99-
INVESTOR SHARES 10/31/99
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
PER-SHARE DATA ($)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset valueat beginning of period 20.00
------------------------------------------------------------------
Income from investment operations:
Net investment income 0.07
Net realized and unrealized gains
on investments 0.80
------------------------------------------------------------------
Total income from investment operations 0.87
NET ASSET VALUE AT END OF PERIOD 20.87
------------------------------------------------------------------
Total return (%) 4.35(1)
RATIOS/SUPPLEMENTAL DATA (%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.40(2)
Expense reductions reflected in above ratio 0.51(2)
Ratio of net investment income to average net assets 0.92(2)
Portfolio turnover rate 1
Net assets, end of period ($ x 1,000) 135,719
- ---------------------------------------------------------------------------------------------------------------------------
6/1/99-
SELECT SHARES(R) 10/31/99
- ---------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period 20.00
- ---------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.07
Net realized and unrealized gains
on investments 0.82
------------------------------------------------------------------
Total income from investment operations 0.89
NET ASSET VALUE AT END OF PERIOD 20.89
------------------------------------------------------------------
Total return (%) 4.45(1)
RATIOS/SUPPLEMENTAL DATA (%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.27(2)
Expense reductions reflected in above ratio 0.47(2)
Ratio of net investment income to average net assets 1.05(2)
Portfolio turnover rate 1
Net assets, end of period ($ x 1,000) 149,131
</TABLE>
(1) Not annualized.
(2) Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
127
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
SCHWAB SMALL-CAP INDEX FUND(R) 11/1/98- 11/1/97- 11/1/96- 11/1/95- 11/1/94-
INVESTOR SHARES 10/31/99 10/31/98 10/31/97 10/31/96 10/31/95
PER-SHARE DATA ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period 15.39 17.73 13.59 11.70 10.05
------------------------------------------------------------------
Income from investment operations:
Net investment income 0.06 0.05 0.06 0.07 0.10
Net realized and unrealized gains
(losses) on investments 2.89 (2.33) 4.14 1.88 1.61
------------------------------------------------------------------
Total income (loss) from investment operations 2.95 (2.28) 4.20 1.95 1.71
Less distributions:
Dividends from net investment income (0.06) (0.06) (0.06) (0.06) (0.06)
Distributions from realized gains on investments (0.87) -- -- -- --
------------------------------------------------------------------
Total distributions (0.93) (0.06) (0.06) (0.06) (0.06)
------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 17.41 15.39 17.73 13.59 11.70
------------------------------------------------------------------
Total return (%) 19.96 (12.88) 31.03 16.73 17.11
RATIOS/SUPPLEMENTAL DATA (%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.49 0.49 0.52 0.59 0.68
Expense reductions reflected in above ratio 0.30 0.32 0.37 0.35 0.34
Ratio of net investment income to average net assets 0.33 0.35 0.53 0.56 0.68
Portfolio turnover rate 41 40 23 23 24
Net assets, end of period ($ x 1,000) 452,099 479,500 410,470 209,125 122,074
</TABLE>
<TABLE>
<CAPTION>
11/1/98- 11/1/97- 5/19/97-
SELECT SHARES(R) 10/31/99 10/31/98 10/31/97
PER-SHARE DATA ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period 15.41 17.75 14.50
------------------------------------------------------------------
Income from investment operations:
Net investment income 0.07 0.08 0.02
Net realized and unrealized gains
(losses) on investments 2.90 (2.35) 3.23
------------------------------------------------------------------
Total income (loss) from investment operations 2.97 (2.27) 3.25
Less distributions:
Dividends from net investment income (0.07) (0.07) --
Distributions from realized gains on investments (0.87) -- --
------------------------------------------------------------------
Total distributions (0.94) (0.07) --
------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 17.44 15.41 17.75
------------------------------------------------------------------
Total return (%) 20.14 (12.81) 22.41(1)
RATIOS/SUPPLEMENTAL DATA (%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.38 0.38 0.38(2)
Expense reductions reflected in above ratio 0.27 0.33 0.52(2)
Ratio of net investment income to average net assets 0.44 0.46 0.56(2)
Portfolio turnover rate 41 40 23
Net assets, end of period ($ x 1,000) 446,918 149,756 81,174
</TABLE>
(1) Not annualized.
(2) Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
128
<PAGE>
<TABLE>
<CAPTION>
SCHWAB INTERNATIONAL INDEX FUND(R) 11/1/98- 11/1/97- 11/1/96- 11/1/95- 11/1/94-
INVESTOR SHARES 10/31/99 10/31/98 10/31/97 10/31/96 10/31/95
PER-SHARE DATA ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period 14.21 13.31 12.23 11.13 10.89
------------------------------------------------------------------
Income from investment operations:
Net investment income 0.19 0.17 0.17 0.16 0.14
Net realized and unrealized gains
on investments 3.66 0.88 1.08 1.07 0.22
------------------------------------------------------------------
Total income from investment operations 3.85 1.05 1.25 1.23 0.36
Less distributions:
Dividends from net investment income (0.13) (0.15) (0.17) (0.13) (0.12)
------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 17.93 14.21 13.31 12.23 11.13
------------------------------------------------------------------
Total return (%) 27.31 8.02 10.33 11.07 3.35
RATIOS/SUPPLEMENTAL DATA (%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.58 0.58 0.61 0.69 0.85
Expense reductions reflected in above ratio 0.41 0.46 0.52 0.48 0.37
Ratio of net investment income to average net assets 1.24 1.35 1.36 1.50 1.45
Portfolio turnover rate 5 6 13 6 --
Net assets, end of period ($ x 1,000) 446,625 428,462 317,833 246,778 179,612
</TABLE>
<TABLE>
<CAPTION>
11/1/98- 11/1/97- 5/19/97-
SELECT SHARES(R) 10/31/99 10/31/98 10/31/97
PER-SHARE DATA ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period 14.23 13.32 13.59
------------------------------------------------------------------
Income from investment operations:
Net investment income 0.18 0.22 0.04
Net realized and unrealized gain
on investments 3.70 0.85 (0.31)
------------------------------------------------------------------
Total income (loss) from investment operations 3.88 1.07 (0.27)
Less distributions:
Dividends from net investment income (0.15) (0.16) --
------------------------------------------------------------------
NET ASSET VALUE AT END OF PERIOD 17.96 14.23 13.32
------------------------------------------------------------------
Total return (%) 27.49 8.16 (1.99)(1)
RATIOS/SUPPLEMENTAL DATA (%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net operating expenses to average net assets 0.47 0.47 0.47(2)
Expense reductions reflected in above ratio 0.39 0.48 0.80(2)
Ratio of net investment income to average net assets 1.57 1.49 0.17(2)
Portfolio turnover rate 5 6 13
Net assets, end of period ($ x 1,000) 448,880 93,560 49,529
</TABLE>
(1) Not annualized.
(2) Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
129
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1999
(All currency amounts are in thousands unless otherwise noted.)
1. DESCRIPTION OF THE FUNDS
The Schwab S&P 500 Fund, Schwab Total Stock Market Index Fund(TM), Schwab
Small-Cap Index Fund(R) and Schwab International Index Fund(R) are series of the
Schwab Capital Trust (the "Capital trust") and the Schwab 1000 Fund(R) is a
series of Schwab Investments (the "Investment trust"), each a no-load, open-end
management investment company organized as Massachusetts business trusts on May
7, 1993 and October 26, 1990, respectively, and registered under the Investment
Company Act of 1940 ("the Act"), as amended (Schwab Total Stock Market Index
Fund was effective on April 15, 1999 and commenced operations on June 1, 1999).
Each series in this report is hereafter referred to as a "fund".
The Schwab S&P 500 Fund, Schwab 1000 Fund, Schwab Total Stock Market Index Fund,
Schwab Small-Cap Index Fund, and Schwab International Index Fund each offer two
classes of shares -- Investor Shares and Select Shares(R). Both classes
represent interests in the same portfolio of investments of each fund and are
substantially the same in all respects except that the classes are subject to
different transfer agency and shareholder service fees (see Note 3), investment
minimums and certain other expenses. In addition, the Schwab S&P 500 Fund offers
a third class of shares --the e.Shares(R). This class offers the same concept as
the Investor Shares and the Select Shares, but the e.Shares are available only
to clients of Schwab Institutional, Charles Schwab Trust Company and to certain
tax-advantaged retirement plans that can execute their trading and information
requests through SchwabLink(TM).
In addition to the Schwab S&P 500 Fund, Schwab Total Stock Market Index Fund,
Schwab Small-Cap Index Fund and Schwab International Index Fund, the Capital
trust also offers the Schwab MarketTrack Growth Portfolio, Schwab MarketTrack
Balanced Portfolio, Schwab MarketTrack Conservative Portfolio, Schwab
MarketTrack All Equity Portfolio, Schwab Analytics Fund(R), Schwab MarketManager
Growth Portfolio, Schwab MarketManager Balanced Portfolio, Schwab MarketManager
Small Cap Portfolio, Schwab MarketManager International Portfolio, Institutional
Select(TM) S&P 500 Fund, Institutional Select(TM) Large-Cap Value Index Fund and
Institutional Select(TM) Small-Cap Value Index Fund. The assets of each series
are segregated and accounted for separately.
In addition to the Schwab 1000 Fund, the Investment trust also offers the Schwab
Short-Term Bond Market Index Fund, Schwab Total Bond Market Index Fund, Schwab
California Short/Intermediate Tax-Free Bond Fund, Schwab California Long-Term
Tax-Free Bond Fund, Schwab Short/Intermediate Tax-Free Bond Fund, Schwab
Long-Term Tax-Free Bond Fund and Schwab YieldPlus Fund(TM). 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. 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.
130
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
SECURITY VALUATION -- Investments in securities traded on an exchange or in the
over-the-counter market 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. Securities for which no quotations are
readily available are valued at fair value as determined by the fund's
investment adviser pursuant to guidelines adopted in good faith by the Board of
Trustees. Futures contracts, which are traded on exchanges, are valued at their
settlement prices as of the close of such exchanges. Short-term securities with
60 days or less to maturity are stated at amortized cost, which approximates
market value.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND REALIZED GAINS (LOSSES) -- 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, except that certain dividends from foreign
securities are recorded as soon as the funds are informed of the ex-dividend
date; interest income (including accretion of discounts) is recorded on the
accrual basis. Realized gains and losses from security transactions are
determined on an identified cost basis.
FUTURES CONTRACTS -- The Schwab S&P 500 Fund, Schwab 1000 Fund(R), and Schwab
Total Stock Market Index Fund(TM) may invest in futures contracts. The funds are
required to deposit with the broker an amount of cash equivalents equal to a
certain percentage of the contract amount. This is known as the "initial
margin." The "variation margin" represents the daily fluctuation in the value of
the contract. When the contract is closed, the funds record a realized gain or
loss equal to the difference between the value of the contract at the time it
was opened and the time it was closed.
The funds will invest in these instruments to participate in the return of an
index. The use of futures contracts involves certain risks, which include (1)
imperfect correlation between the price movement of the contracts and the
underlying securities, or (2) inability to close out positions due to different
trading hours, or the temporary absence of a liquid market, for either the
contract or underlying securities. These risks may involve amounts exceeding the
amount recognized in each fund's statement of operations at any given time.
As of October 31, 1999, the Schwab S&P 500 Fund, the Schwab 1000 Fund, and the
Schwab Total Stock Market Index Fund had the following open S&P 500 Index
futures contracts:
<TABLE>
<CAPTION>
Number of Contract Unrealized
Fund Contracts Value Expiration Appreciation
---------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Schwab S&P 500 Fund 6 $ 2,064 12/17/99 $179
Schwab 1000 Fund 38 13,074 12/17/99 675
Schwab Total Stock Market Index Fund 8 2,752 12/17/99 98
</TABLE>
The cash and eligible securities on deposit with brokers available to cover
margin requirements for open futures positions at October 31, 1999 were $4,010
and $3,778 for the Schwab S&P 500 Fund, $2,544 and $1,168 for the Schwab 1000
Fund, and $360 and $214 for the Total Stock Market Index Fund, respectively. The
funds have segregated short-term investments and other securities for the
remaining portion of the contract value.
131
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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 Schwab
International Index Fund(R) are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the fund denominated in
foreign currencies are translated into U.S. dollars at the exchange rates on
October 31, 1999. Purchases and sales of securities, income receipts and expense
payments are translated into U.S. dollars at the exchange rate in effect on the
dates of the respective transactions.
The Schwab International Index Fund separates within its statement of operations
the portion of realized and unrealized gains and losses resulting from changes
in foreign currency exchange rates from the fluctuations in market prices of
investments held.
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 Schwab International Index Fund as an unrealized gain or loss.
When the Forward is closed, the Schwab International Index Fund records a
realized gain or loss equal to the difference between the value at the time the
contract was entered into and the value at the time the contract was closed. The
Schwab International Index Fund engages in Forwards in connection with the
purchase and sale of portfolio securities to minimize the uncertainty of changes
in future exchange rates. The Schwab International Index Fund 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. There
were no Forwards outstanding as of October 31, 1999.
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 substantially all net investment income and realized net capital
gains, if any, to shareholders. Therefore, no federal income tax provision is
required. Each fund is considered a separate entity for tax purposes.
132
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
The aggregate gross unrealized appreciation and depreciation for securities held
by the funds at October 31, 1999 (for financial reporting and federal income tax
purposes) is as follows:
<TABLE>
<CAPTION>
Net Unrealized Appreciated Depreciated
Fund Appreciation Securities Securities
------------ -------------- ------------- ------------
<S> <C> <C> <C>
Schwab S&P 500 Fund $1,602,098 $1,993,943 $ (391,845)
Schwab 1000 Fund(R) 2,868,671 3,155,292 (286,621)
Schwab Total Stock Market Index Fund(TM) 8,584 27,134 (18,550)
Schwab Small-Cap Index Fund(R) 109,748 232,814 (123,066)
Schwab International Index Fund(R) 248,190 265,721 (17,531)
</TABLE>
At October 31, 1999 the unused capital loss carryforwards, for federal income
tax purposes with expiration dates, were as follows:
<TABLE>
<CAPTION>
Schwab Total Schwab Small Schwab
Schwab 1000 Stock Market Cap Index International
Capital Loss Expirations: Fund Index Fund Fund Index Fund
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
10/31/00 $ 354 $-- $ -- $ --
10/31/01 -- -- -- --
10/31/02 935 -- -- 140
10/31/03 -- -- -- --
10/31/04 844 -- -- 1,743
10/31/05 2,606 -- -- 1,837
10/31/06 650 -- -- 11,905
10/31/07 11,853 18 4,126 7
------- --- ------ -------
$17,242 $18 $4,126 $15,632
======= === ====== =======
</TABLE>
RECLASSIFICATIONS -- Generally accepted accounting principles require that
certain components of net assets be reclassified between financial and tax
reporting. These reclassifications have no effect on net assets or net asset
values per share.
On the statements of assets and liabilities the following reclassifications were
made:
<TABLE>
<CAPTION>
Accumulated Undistributed
Net Realized Net Investment
Fund Gain (Loss) Income Paid-In Capital
------------ ------------ -------------- ---------------
<S> <C> <C> <C>
Schwab S&P 500 Fund $ -- $ 3 $ (3)
Schwab Small-Cap Index Fund -- 16 (16)
Schwab International Index Fund 1,098 (1,073) (25)
</TABLE>
133
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT -- The Capital trust and the
Investment trust have investment advisory and administration agreements with
Charles Schwab Investment Management, Inc. (the "investment adviser"). For
advisory services and facilities furnished, the Schwab S&P 500 Fund pays an
annual fee, payable monthly, of 0.36% of the first $1 billion of average daily
net assets, 0.33% of the next $1 BILLION OF SUCH NET ASSETS, AND 0.31% OF SUCH
NET ASSETS IN EXCESS OF $2 BILLION. The Schwab 1000 Fund(R) and Total Stock
Market Index Fund(TM) pay an annual fee, payable monthly, of 0.30% of the first
$500 million of average daily net assets and 0.22% of such net assets over $500
million. The Schwab Small-Cap Index Fund(R) pays an annual fee, payable monthly,
of 0.50% of the first $300 million of average daily net assets and 0.45% of such
net assets over $300 million. The Schwab International Index Fund(R) pays an
annual fee, payable monthly, of 0.70% of the first $300 million of average daily
net assets and 0.60% of such net assets over $300 million. The investment
adviser has reduced a portion of its fee for the period ended October 31, 1999
(See Note 4).
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS -- The Capital trust and
Investment trust have 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. For shareholder
services provided, Schwab will receive from the Investor Shares, Select
Shares(R) and e.Shares(R) an annual fee of 0.20%, 0.05% and 0.05%, respectively,
of the average daily net assets of that class of shares. Schwab has reduced a
portion of its fees for the period ended October 31, 1999 (See Note 4).
OFFICERS AND TRUSTEES -- Certain officers and trustees of the Capital trust and
the Investment trust are also officers and/or directors of the investment
adviser and/or Schwab. During the period ended October 31, 1999, the Capital
trust and the Investment trust made no direct payments to its officers or
trustees who are "interested persons" within the meaning of the the "Act", as
amended. The Schwab S&P 500 Fund, Schwab 1000 Fund, Schwab Total Stock Market
Index Fund, Schwab Small-Cap Index Fund and Schwab International Index Fund
incurred fees of $37, $52, $1, $9 and $8 respectively, related to the trusts'
unaffiliated trustees.
OTHER AFFILIATED PARTIES AND TRANSACTIONS -- As of October 31, 1999, Schwab S&P
500 Fund, Schwab Small-Cap Index Fund, and Schwab International Index Fund, had
outstanding shares of .8%, .7%, .2% and 1.2%; 10%, 7%, 2%, and 6%; and 10%, 7%,
2% and 7%, respectively, owned by Schwab MarketTrack Growth Portfolio, Schwab
MarketTrack Balanced Portfolio, Schwab MarketTrack Conservative Portfolio and
Schwab MarketTrack All Equity Portfolio, respectively. The Schwab S&P 500 Fund
and the Schwab 1000 Fund placed a portion of their respective portfolio
transactions with Charles Schwab & Co., Inc., an affiliated broker. For the
period ended October 31, 1999, the commissions paid were $13 and $5,
respectively.
As of October 31, 1999, the Schwab S&P 500 Fund, Schwab 1000 Fund, and Schwab
Total Stock Market Index Fund held common stock of The Charles Schwab Corp., an
affiliated issuer, with a current value of $20,970, $18,291, and $642,
respectively.
134
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
INTERFUND TRANSACTIONS -- For the period ended October 31, 1999, the Schwab S&P
500 Fund, Schwab 1000 Fund(R), Schwab Total Stock Market Index Fund(TM), and
Schwab Small-Cap Index Fund(R) engaged in purchase and sale transactions with
funds that have a common investment adviser, common trustees, and common
officers. These purchases and sale transactions, made at current market value
pursuant to Rule 17a-7 under the Act, were $4,106, $1,248, $245, and $4,352,
respectively.
4. EXPENSES REDUCED AND ABSORBED BY THE INVESTMENT ADVISER AND SCHWAB
The investment adviser and Schwab guarantee that, through at least February 29,
2000, total operating expenses of each class of shares will not exceed the
percentages of the average daily net assets of that class of shares, after
waivers and reimbursements, as shown below. For the purpose of this guarantee,
operating expenses do not include interest expenses, extraordinary expenses,
taxes, foreign taxes and capital items.
<TABLE>
<CAPTION>
Investor Shares Select Shares e.Shares
--------------- ------------- ------------
<S> <C> <C> <C>
Schwab S&P 500 Fund 0.35% 0.19% 0.28%
Schwab 1000 Fund 0.46% 0.35% N/A
Schwab Total Stock Market Index Fund 0.40% 0.27% N/A
Schwab Small-Cap Index Fund 0.49% 0.38% N/A
Schwab International Index Fund(R) 0.58% 0.47% N/A
</TABLE>
For the period ended October 31, 1999, the total of such fees and expenses
reduced by the investment adviser were $11,794, $1,336, $284, $2,099 and $2,625
for the Schwab S&P 500 Fund, Schwab 1000 Fund, Schwab Total Stock Market Index
Fund, Schwab Small-Cap Index Fund and Schwab International Index Fund,
respectively. In addition, the total expenses reimbursed by the investment
adviser was $67 for the Schwab Total Stock Market Index Fund. The total of such
fees reduced by Schwab were $4,422, $1,530, $115, $107 and $107 for the Schwab
S&P 500 Fund, Schwab 1000 Fund, Schwab Total Stock Market Index Fund, Schwab
Small-Cap Index Fund and Schwab International Index Fund, respectively.
5. BORROWING AGREEMENTS
The trusts have lines of credit arrangements with PNC Bank N.A., Bank of America
NT & SA, and The Bank of New York whereby the trusts may borrow on behalf of the
funds, on a temporary basis, to fund shareholder redemptions. The trusts may
borrow in an aggregate amount of up to $100 million from PNC Bank N.A., $100
million from Bank of America NT & SA and $250 million from The Bank of New York.
Amounts borrowed under these arrangements bear interest at periodically
negotiated rates and may be collateralized by the assets of the funds. The funds
borrowed against the lines of credit arrangements during the period, but as of
October 31, 1999, there were no outstanding borrowings under this arrangements
on behalf of the funds.
135
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
6. SECURITIES LENDING
The Schwab S&P 500 Fund, Schwab 1000 Fund(R), and Schwab Total Stock Market
Index Fund(TM) loaned securities to certain brokers, dealers and other financial
institutions who paid the funds negotiated lenders' fees. The funds received
cash collateral, letters of credit, or U.S. Government securities against the
loaned securities in an amount equal to 102% of the market value of the loaned
securities at the inception of each loan. The loans were and at all times will
be collateralized in an amount equal to at least 100% of the market value of the
securities loaned.
<TABLE>
<CAPTION>
Market Value of Market Value of
Fund Securities Loaned Collateral
---- ----------------- ---------------
<S> <C> <C>
Schwab S&P 500 Fund $1,123,356 $1,132,053
Schwab 1000 Fund 1,242,632 1,251,896
Schwab Total Stock Market Index Fund 49,515 50,384
</TABLE>
7. INVESTMENT TRANSACTIONS
Aggregate purchases and sales of investment securities, other than short-term
obligations and U.S. Government securities, for the period ended October 31,
1999, were as follows:
<TABLE>
<CAPTION>
Proceeds of Sales
Fund Purchases and Maturities
---- ---------- -----------------
<S> <C> <C>
Schwab S&P 500 Fund $2,735,296 $199,908
Schwab 1000 Fund 1,413,232 201,088
Schwab Total Stock Market Index Fund 276,568 2,665
Schwab Small-Cap Index Fund(R) 454,815 316,507
Schwab International Index Fund(R) 235,135 32,905
</TABLE>
8. EARLY WITHDRAWAL FEES
The early withdrawal fees are retained by the funds and are treated as a
contribution to capital.
<TABLE>
<CAPTION>
Early withdrawal fees on Early withdrawal fees
Fund redemption proceeds* as of 10/31/99
---- ------------------------ ---------------------
<S> <C> <C>
Schwab 1000 Fund 0.50% $1,032
Schwab Total Stock Market Index Fund 0.50% 79
Schwab Small-Cap Index Fund 0.50% 408
Schwab International Index Fund 0.75% 115
</TABLE>
*Attributable to shares purchased and held less than 180 days.
136
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
9. CAPITAL SHARE TRANSACTIONS
The funds offer two classes of shares: Investor Shares and Select Shares(R),
with the exception of Schwab S&P 500 Fund which offers a third class of shares:
e.Shares(R). Shares of each class represent interests in the same portfolio of
investments of the funds. Transactions in capital shares for the period ended
October 31, 1999 were as follows:
Schwab S&P 500 Fund
-------------------------------------------------
Year ended Year ended
October 31, 1999 October 31, 1998
----------------------- -----------------------
Shares Dollars Shares Dollars
-------- ---------- -------- ----------
Investor Shares:
Sold 94,157 $1,863,484 84,045 $1,377,701
Reinvested 962 17,632 583 8,407
Redeemed (58,283) (1,163,104) (36,297) (589,636)
-------- ---------- -------- ----------
Net Increase 36,836 $ 718,012 48,331 $ 796,472
-------- ---------- -------- ----------
Select Shares:
Sold 141,228 $2,801,786 89,528 $1,468,401
Reinvested 950 17,420 338 4,872
Redeemed (56,115) (1,125,070) (33,515) (545,494)
-------- ---------- ------- ----------
Net Increase 86,063 $1,694,136 56,351 $ 927,779
-------- ---------- ------- ----------
e.Shares:
Sold 18,523 $ 365,979 16,938 $ 272,872
Reinvested 140 2,572 96 1,381
Redeemed (14,615) (288,838) (9,873) (157,989)
-------- ---------- ------- ----------
Net Increase 4,048 $ 79,713 7,161 $ 116,264
-------- ---------- ------- ----------
Total increase from
capital share transactions 126,947 $2,491,861 111,843 $1,840,515
======== ========== ======= ==========
Schwab 1000 Fund(R)
-------------------------------------------------
Year ended Year ended
October 31, 1999 October 31, 1998
----------------------- -----------------------
Shares Dollars Shares Dollars
-------- ---------- -------- ----------
Investor Shares:
Sold 43,791 $1,518,286 46,456 $1,340,936
Reinvested 913 29,333 985 25,237
Redeemed (34,357) (1,194,295) (28,539) (817,355)
-------- ---------- -------- ----------
Net Increase 10,347 $ 353,324 18,902 $ 548,818
-------- ---------- -------- ----------
Select Shares:
Sold 34,607 $1,194,734 22,937 $ 662,266
Reinvested 328 10,536 170 4,347
Redeemed (10,134) (356,795) (5,225) (148,285)
-------- ---------- -------- ----------
Net Increase 24,801 $ 848,475 17,882 $ 518,328
-------- ---------- -------- ----------
Total increase from
capital share transactions 35,148 $1,201,799 36,784 $1,067,146
======== ========== ======= ==========
137
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Schwab Total Stock Market Index Fund(TM)
-------------------------------------------------
June 1, 1999 to
October 31, 1999
----------------------
Shares Dollars
---------- ----------
Investor Shares:
Sold 7,071 $142,518
Redeemed (569) (11,468)
------- --------
Net Increase 6,502 $131,050
------- --------
Select Shares:
Sold 7,558 $152,779
Redeemed (418) (8,374)
------- --------
Net Increase 7,140 $144,405
------- --------
Total increase from capital
share transactions 13,642 $275,455
======= ========
Schwab Small-Cap Index Fund(R)
-------------------------------------------------
Year ended Year ended
October 31, 1999 October 31, 1998
----------------------- -----------------------
Shares Dollars Shares Dollars
-------- ---------- -------- ----------
Investor Shares:
Sold 15,020 $244,144 15,575 $272,822
Reinvested 1,826 27,893 82 1,410
Redeemed (22,026) (358,017) (7,657) (133,456)
------- -------- ------ --------
Net Increase (Decrease) (5,180) $(85,980) 8,000 $140,776
------- -------- ------ --------
Select Shares:
Sold 22,187 $364,275 8,319 $145,043
Reinvested 552 8,447 20 334
Redeemed (6,829) (110,483) (3,198) (53,874)
------- -------- ------ --------
Net Increase 15,910 $262,239 5,141 $ 91,503
------- -------- ------ --------
Total increase from capital
share transactions 10,730 $176,259 13,141 $232,279
======= ======== ====== ========
138
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Schwab International Index Fund(R)
-------------------------------------------------
Year ended Year ended
October 31, 1999 October 31, 1998
----------------------- -----------------------
Shares Dollars Shares Dollars
-------- ---------- -------- ----------
Investor Shares:
Sold 11,715 $186,131 11,876 $ 172,076
Reinvested 255 3,798 261 3,395
Redeemed (17,223) (277,601) (5,861) (82,444)
------- -------- ------ ----------
Net Increase (Decrease) (5,253) $(87,672) 6,276 $ 93,027
------- -------- ------ ----------
Select Shares:
Sold 20,684 $334,045 4,284 $ 61,174
Reinvested 61 904 41 540
Redeemed (2,328) (37,107) (1,467) (20,689)
------- -------- ------ ----------
Net Increase 18,417 $297,842 2,858 $ 41,025
------- -------- ------ ----------
Total increase from
capital share
transactions 13,164 $210,170 9,134 $ 134,052
====== ======== ====== ==========
139
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of:
Schwab S&P 500 Fund, Schwab 1000 Fund(R)
Schwab Total Stock Market Index Fund(TM)
Schwab Small-Cap Index Fund(R), and
Schwab International Index Fund(R)
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, 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 Schwab S&P 500 Fund, Schwab Total
Stock Index Fund, Schwab Small-Cap Index Fund, and Schwab International Index
Fund (four of the portfolios constituting Schwab Capital Trust) and Schwab 1000
Fund (one of the portfolios constituting Schwab Investments) (hereafter
collectively referred to as the "Funds") at October 31, 1999, and the results of
each of their operations for the period then ended, the changes in each of their
net assets and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' 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, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
San Francisco, CA
December 9, 1999
140
<PAGE>
TAX DESIGNATIONS (UNAUDITED)
Pursuant to Section 854 (b) (2) of the Internal Revenue Code, the Schwab S&P 500
Fund(R), Schwab 1000 Fund(R), and Schwab Small-Cap Index Fund(R) hereby
designates 100% of the ordinary dividends as qualifying for the dividends
received deduction for the fiscal year ended October 31, 1999.
141
<PAGE>
THIS SPACE RESERVED FOR YOUR COMMENTS AND QUESTIONS.
A SCHWAB REPRESENTATIVE WILL BE HAPPY TO ASSIST YOU.
<PAGE>
THE SCHWABFUNDS FAMILY-REGISTERED TRADEMARK-
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 market
funds.
Please call 800-435-4000 for a free prospectus and brochure for any of these
SchwabFunds.-Registered Trademark-
This report must be preceded or accompanied by a current prospectus.
METHODS FOR PLACING ORDERS
The information below outlines how Schwab brokerage account investors can place
orders. If you are investing through a third-party investment provider, methods
for placing orders may be different.
PHONE
Call 800-435-4000, day or night (for TDD service, call 800-345-2550).
INTERNET
www.schwab.com/schwabfunds
MAIL
Write to SchwabFunds at:
P. O. Box 7575, San Francisco, CA 94120-7575
When selling or exchanging shares, be sure to include the signatures of at least
one of the persons whose name is on the account.
IN PERSON
Visit the nearest Charles Schwab office.
SCHWAB ASSET ALLOCATION FUNDS
Schwab MarketTrack All Equity Portfolio
Schwab MarketTrack Growth Portfolio
Schwab MarketTrack Balanced Portfolio
Schwab MarketTrack Conservative Portfolio
Schwab MarketManager Growth Portfolio
Schwab MarketManager Balanced Portfolio
SCHWAB STOCK FUNDS
Schwab S&P 500-Registered Trademark- Fund
Schwab 1000 Fund-Registered Trademark-
Schwab Total Stock Market Index Fund-TM-
Schwab Analytics Fund-Registered Trademark-
Schwab Small-Cap Index Fund-Registered Trademark-
Schwab MarketManager Small Cap Portfolio
Schwab International Index Fund-Registered Trademark-
Schwab MarketManager International Portfolio
SCHWAB BOND FUNDS
Schwab YieldPlus Fund-TM-
Schwab Total Bond Market Index Fund
Schwab Short-Term Bond Market Index Fund
Schwab Long-Term Tax-Free Bond Fund
Schwab Short/Intermediate Tax-Free Bond Fund
Schwab California Long-Term Tax-Free Bond Fund
Schwab California Short/Intermediate
Tax-Free Bond Fund
SCHWAB MONEY MARKET FUNDS
Schwab offers an array of money market funds that seek high current income
consistent with safety and liquidity.(1) 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.-Registered Trademark-
(1) Investments in money market funds are neither insured nor guaranteed by the
Federal Deposit Insurance Corporation (FDIC) or any other government agency
and, although they seek to preserve the value of your investment at $1 per
share, it is possible to lose money.
<PAGE>
[LOGO]
INVESTMENT ADVISER
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- 1999 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC/NYSE.
Printed on recycled paper. MKT3810-2 (12/99)
<PAGE>
