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SIGNATURE TAI-CHIN TUNG
TITLE CONTROLLER
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<ACCUMULATED-NET-GAINS> 1112
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1577
<NET-ASSETS> 14354
<DIVIDEND-INCOME> 205
<INTEREST-INCOME> 72
<OTHER-INCOME> 0
<EXPENSES-NET> (71)
<NET-INVESTMENT-INCOME> 206
<REALIZED-GAINS-CURRENT> 1115
<APPREC-INCREASE-CURRENT> 175
<NET-CHANGE-FROM-OPS> 1496
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (148)
<DISTRIBUTIONS-OF-GAINS> (242)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 292
<NUMBER-OF-SHARES-REDEEMED> (110)
<SHARES-REINVESTED> 28
<NET-CHANGE-IN-ASSETS> 4021
<ACCUMULATED-NII-PRIOR> 150
<ACCUMULATED-GAINS-PRIOR> 237
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 93
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 161
<AVERAGE-NET-ASSETS> 12511
<PER-SHARE-NAV-BEGIN> 12.95
<PER-SHARE-NII> .17
<PER-SHARE-GAIN-APPREC> 1.52
<PER-SHARE-DIVIDEND> (.15)
<PER-SHARE-DISTRIBUTIONS> (.25)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.24
<EXPENSE-RATIO> .57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000918266
<NAME> SCHWAB ANNUITY FUNDS
<SERIES>
<NUMBER> 030
<NAME> S&P 500 PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 66022
<INVESTMENTS-AT-VALUE> 83922
<RECEIVABLES> 964
<ASSETS-OTHER> 14
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84900
<PAYABLE-FOR-SECURITIES> 969
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62
<TOTAL-LIABILITIES> 1031
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 65183
<SHARES-COMMON-STOCK> 4718
<SHARES-COMMON-PRIOR> 2658
<ACCUMULATED-NII-CURRENT> 869
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (154)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17971
<NET-ASSETS> 83869
<DIVIDEND-INCOME> 967
<INTEREST-INCOME> 64
<OTHER-INCOME> 0
<EXPENSES-NET> (163)
<NET-INVESTMENT-INCOME> 868
<REALIZED-GAINS-CURRENT> (133)
<APPREC-INCREASE-CURRENT> 13386
<NET-CHANGE-FROM-OPS> 14121
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (303)
<DISTRIBUTIONS-OF-GAINS> (33)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2979
<NUMBER-OF-SHARES-REDEEMED> (937)
<SHARES-REINVESTED> 19
<NET-CHANGE-IN-ASSETS> 46813
<ACCUMULATED-NII-PRIOR> 302
<ACCUMULATED-GAINS-PRIOR> 12
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 206
<INTEREST-EXPENSE> 3
<GROSS-EXPENSE> 315
<AVERAGE-NET-ASSETS> 57244
<PER-SHARE-NAV-BEGIN> 13.94
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 3.78
<PER-SHARE-DIVIDEND> (.06)
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.78
<EXPENSE-RATIO> .28
<AVG-DEBT-OUTSTANDING> 0
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</TABLE>
To the Board of Trustees of
Schwab Annuity Portfolios
In planning and performing our audits of the
financial statements of Schwab Money Market
Portfolio, Schwab S&P 500 Portfolio, and Schwab
MarketTrack Growth Portfolio II (three portfolios of
Schwab Annuity Portfolios) (collectively, the "Portfolios")
for the period ended December 31, 1998, we considered
their internal control, including control activities for
safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing
our opinions on the financial statements and to comply
with the requirements of Form N-SAR, not to provide
assurance on internal control.
The management of the Portfolios is responsible for
establishing and maintaining internal control.
In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected
benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external
purposes that are fairly presented in conformity with
generally accepted accounting principles. Those
controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control,
errors or fraud may occur and not be detected. Also,
projection of any evaluation of internal control to future
periods is subject to the risk that it may become
inadequate because of changes in conditions or that the
effectiveness of the design and operation may
deteriorate.
Our consideration of internal control would not
necessarily disclose all matters in internal control
that might be material weaknesses under standards
established by the American Institute of Certified
Public Accountants. A material weakness is a condition
in which the design or operation of one or more of the
internal control components does not reduce to a
relatively low level the risk that misstatements caused
by error or fraud in amounts that would be material in
relation to the financial statements being audited may
occur and not be detected within a timely period by
employees in the normal course of performing their
assigned functions. However, we noted no matters
involving internal control and its operation, including
controls for safeguarding securities, that we consider
to be material weaknesses as defined above as of
December 31, 1998.
This report is intended solely for the information and
use of management and the Board of Trustees of Schwab
Annuity Portfolios and the Securities and Exchange
Commission.
PricewaterhouseCoopers LLP
San Francisco, California
January 29, 1999
