<PAGE> 1
Supplement to the
Schwab Equity Index Funds Prospectus dated February 29, 2000
Schwab S&P 500 Fund
The Board of Trustees of Schwab Capital Trust previously approved the adoption
of a 0.75% redemption fee on shares of the Schwab S&P 500 Fund sold 180 days or
less after purchase. This fee is referred to as the Redemption Fee and is
payable to the fund in order to compensate it for the portfolio management and
other related costs associated with frequent purchase and sale activity of fund
shares.
The Redemption Fee program will be operative as of February 28, 2001.
Accordingly, and notwithstanding earlier communications to the effect that the
Redemption Fee program would begin September 15, 2000, the Redemption Fee will
be payable only with regard to redemptions of shares held for 180 days or less
where the shares were purchased on or after February 28, 2001.
Thus, the following information has been added to the fee table under the
heading "Fund Fees and Expenses:"
Fee Table (%)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
INVESTOR SELECT
SHARES SHARES(R) e.SHARES(R)
--------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Redemption fee, charged only on shares you sell 180 0.75 0.75 0.75
days or less after buying them, and paid directly to
the fund.+
</TABLE>
+ This fee applies only to shares purchased on or after 02/28/01.
The following information has been modified in the "Selling/Exchanging Shares"
section:
- As indicated in each fund's fee table, each fund charges a
redemption fee, payable to the fund, on the sale or exchange of any
shares that occurs 180 days or less after purchasing them; in
attempting to minimize this fee, a fund will first sell any shares
in your account that aren't subject to the fee (including shares
acquired through reinvestment or exchange).
Please retain this supplement for future reference.
TF8685 (12/8/00)
