Diversification and asset allocation strategies do not ensure a profit and do not protect against losses in declining markets.

Proprietary Strategies are strategies where CSIM assumes the day-to-day investment management responsibilities, including funds from the Schwab Funds family. Sub-Advised Strategies are strategies where CSIM has delegated day-to-day investment management responsibilities to sub-advisors, including funds from the Schwab Funds family. Third-Party Strategies are unaffiliated funds or strategies that the Schwab Target Funds invest in directly.

The yields of certain Treasury Inflation Protected Securities (TIPS) Funds are adjusted based on changes in the rate of inflation and these changes can cause the yield to vary substantially over time. Exceptionally high and low yields reported by such funds can often be attributed to the rise and fall in inflation rate and might not be repeated.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed-income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors.

Tax-exempt bonds are not necessarily a suitable investment for all persons. Information related to a security's tax-exempt status (federal and in-state) is obtained from third-parties and Schwab does not guarantee its accuracy. Tax-exempt income may be subject to the Alternative Minimum Tax (AMT). Capital appreciation and income from bond funds and discounted bonds may be subject to state or local taxes. Capital gains are not exempt from federal income tax.

Schwab's short-term redemption fee of $49.95 will be charged on redemption of funds purchased through Schwab's Mutual Fund OneSource® service (and certain other funds with no transaction fee) and held for 90 days or less. Schwab reserves the right to exempt certain funds from this fee, including Schwab Funds®, which may charge a separate redemption fee, and funds that accommodate short-term trading. For each of these trade orders placed through a broker, a $25 service charge applies. Funds are also subject to management fees and expenses.

Trades in no-load mutual funds available through Mutual Funds OneSource service (including SchwabFunds) as well as certain other funds, are available without transaction fees.

Charles Schwab & Co., Inc. (member SIPC) receives remuneration from fund companies in the Mutual Fund OneSource® service for recordkeeping and shareholder services, and other administrative services. Schwab also may receive remuneration from transaction fee fund companies for certain administrative services. The aggregate fees Schwab or its affiliates receive from Schwab Affiliate Funds (see fund prospectuses for more details) are greater than the remuneration received from the other funds available through Schwab's Mutual Fund OneSource service.

Trades in no-load mutual funds available through Mutual Funds OneSource service (including SchwabFunds) as well as certain other funds, are available without transaction fees. For each of these trade orders placed through a broker, a $25 service charge applies. Schwab reserves the right to change the funds we make available without transaction fees and to reinstate fees on any funds. Funds are also subject to management fees and expenses.

Charles Schwab & Co., Inc., member of SIPC, receives remuneration from fund companies for record keeping, shareholder services, and other administrative services for shares purchased through its Mutual Fund OneSource service. Schwab also may receive remuneration from transaction fee fund companies for certain administrative services.

A fund's actual annual payout may vary from one year to the next and over time due to several factors, including, without limitation, the interest rate environment, the performance of the financial markets in which the fund invests, the allocation of fund assets across different asset classes and investments, and the amount and timing of prior distributions by the fund. Although a fund has its own distinct asset allocation strategy that is designed to accommodate the fund's targeted annual payout percentage while taking into account the fund's specific risk tolerances and desired level of capital appreciation, the fund's actual annual payout could be higher or lower.

Frank Russell Company (Russell) and Research Affiliates LLC (RA) have entered into a strategic alliance with respect to the Russell Fundamental Index Series. Subject to RA's intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Index Series. Russell and RA jointly own all trademark and service mark rights in and to the Russell Fundamental Index Series. Schwab is not affiliated with Russell or RA. Schwab Fundamental Index Funds are not sponsored, endorsed, sold or promoted by Russell or RA, and Russell and RA do not make any representation regarding the advisability of investing in shares of the fund. Russell and RA are not responsible for and have not reviewed the Schwab Fundamental Index funds nor any associated literature or publications, and Frank Russell Company and Research Affiliates make no representation or warranties, express or implied, as to their accuracy, or completeness, or otherwise. Research Affiliates is the owner of certain intellectual property (see all applicable rights disclosures and notices at http://www.researchaffiliates.com/Pages/legal.aspx#d which are fully incorporated herein.)

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Morningstar Ratings do not take into account sales loads that may apply to certain third party funds. The Overall Morningstar Ratings are derived from a weighted average of the risk adjusted performance figures associated with a Fund's 3-, 5-, and 10-year (if applicable) Morningstar Rating™ metrics.

Leveraged mutual funds seek to provide a multiple of the investment returns of a given index or benchmark on a daily or monthly basis. Inverse mutual funds seek to provide the opposite of the investment returns, also daily or monthly, of a given index or benchmark, either in whole or by multiples. Due to the effects of compounding, aggressive techniques, and possible correlation errors, leveraged and inverse funds may experience greater losses than one would ordinarily expect. Compounding can also cause a widening differential between the performances of a fund and its underlying index or benchmark, so that returns over periods longer than the stated reset period can differ in amount and direction from the target return of the same period. Consequently, these funds may experience losses even in situations where the underlying index or benchmark has performed as hoped. Aggressive investment techniques such as futures, forward contracts, swap agreements, derivatives, options, can increase fund volatility and decrease performance. Investors holding these funds should therefore monitor their positions as frequently as daily. To find out more about trading these funds, please read: Leveraged and Inverse Products: What you need to know

Except as noted below, all data provided by Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., and may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. Morningstar, Inc., shall not be responsible for investment decisions, damages, or other losses resulting from use of the information. Morningstar, Inc., has not granted consent for it to be considered or deemed an "expert" under the Securities Act of 1933. Charles Schwab Investment Management, Inc. and Charles Schwab & Co., Inc. are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.

Market data for Daily Fund (NAVs) and charts provided by Markit on Demand.

The investment adviser and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of the fund as detailed in the prospectus for so long as the investment adviser serves as the adviser to the fund. This agreement may only be amended or terminated with the approval of the fund's Board of Trustees. The agreement to limit the total annual fund operating expenses is limited to the fund's direct operating expenses and, therefore, does not apply to AFFE (Acquired Fund Fees and Expenses), which are indirect expenses incurred by the fund through its investments in the underlying funds.

Charles Schwab Investment Management, Inc. (CSIM) is the investment advisor for Schwab Funds. Charles Schwab & Co., Inc. (Schwab), Member SIPC, is the distributor for Schwab Funds. CSIM and Schwab are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.

Individual holdings are shown for informational purposes only and are not considered an offer to sell or a solicitation of an offer to buy a specific security.

Environmental, social and governance (ESG) strategies implemented by mutual funds, exchange-traded funds (ETFs), and separately managed accounts are currently subject to inconsistent industry definitions and standards for the measurement and evaluation of ESG factors; therefore, such factors may differ significantly across strategies. As a result, it may be difficult to compare ESG investment products. Further, some issuers may present their investment products as employing an ESG strategy, but may overstate or inconsistently apply ESG factors. An investment product's ESG strategy may significantly influence its performance. Because securities may be included or excluded based on ESG factors rather than other investment methodologies, the product's performance may differ (either higher or lower) from the overall market or comparable products that do not have ESG strategies. Environmental ("E") factors can include climate change, pollution, waste, and how an issuer protects and/or conserves natural resources. Social ("S") factors can include how an issuer manages its relationships with individuals, such as its employees, shareholders, and customers as well as its community. Governance ("G") factors can include how an issuer operates, such as its leadership composition, pay and incentive structures, internal controls, and the rights of equity and debt holders. Carefully review an investment product's prospectus or disclosure brochure to learn more about how it incorporates ESG factors into its investment strategy.