<PAGE> 1
Supplement to the
Schwab MarketTrack Growth Portfolio II Prospectus dated April 30, 2000
THE INFORMATION UNDER THE HEADING "PORTFOLIO FEES AND EXPENSES" ON PAGE 6 HAS
BEEN DELETED AND REPLACED WITH THE FOLLOWING:
PORTFOLIO FEES AND EXPENSES
The following table describes what you could expect to pay as portfolio
investor. "Shareholder fees" are one time expenses charged to you directly by
the portfolio. "Annual operating expenses" are paid out of portfolio assets, so
their effect is included in total return. Fees of the underlying funds are
reflected in those funds' performance, and thus indirectly in portfolio
performance. These fees are approximately 0.27% of the portfolio's average net
assets based on current investments and may fluctuate.
Fee Table
-------------------------------------------------
SHAREHOLDER FEES
-------------------------------------------------
None
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES (% of average net assets)
---------------------------------------------------
<S> <C>
Management fees* 0.44
Distribution (12b-1) fees None
Other expenses 0.59
------
TOTAL ANNUAL OPERATING EXPENSES 1.03
EXPENSE REDUCTION (0.53)
------
NET OPERATING EXPENSES** 0.50
</TABLE>
* Reflects current fees
** Guaranteed by Schwab and the investment advisor through 04/30/2001
(excluding interest, taxes and certain non-routine expenses).
EXPENSES ON $10,000 INVESTMENT
Designed to help you compare expenses, this example uses the same assumptions as
all mutual fund prospectuses: a $10,000 investment, a 5% return each year.
One-year figures are based on net operating expenses. The expenses would be the
same whether you stayed in the portfolio or sold your shares at the end of each
period. Your actual costs may be higher or lower.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C>
$51 $275 $517 $1,211
</TABLE>
Please retain this supplement for future reference.
(6/30/00)
