Schwab Portfolios are designed to help you achieve diversification across multiple funds in a variety of asset classes.

If you would prefer to invest in a single fund that offers broad diversification or if you have less than the suggested minimums, consider the Schwab Target Funds, five funds designed to help you manage your retirement needs, or choose a balanced fund from Schwab's Mutual Fund OneSource Select List®, any of which can provide broad diversification in a single fund. The Mutual Fund OneSource Select List can also provide you with an array of quality mutual fund investment options in other asset categories.

You can choose a Schwab Portfolio for your 401(k) rollover even before your assets are received at Schwab. Contact a Schwab Rollover Consultant to learn more.

Schwab Portfolios™ are designed to help investors diversify their portfolios using Schwab's asset allocation models, which range from conservative to aggressive. These models were designed to help investors determine their appropriate allocation of assets across various types of investments, based on their financial goals, risk tolerance and time horizon.

Within Schwab Portfolios, clients may choose to invest in a version that consists of a combination of Schwab affiliated funds and unaffiliated, third-party funds ("SP Blend"), or clients may choose to invest in a portfolio that consists entirely of third-party, unaffiliated funds ("SP Third-Party").

SP Blend Portfolio
The domestic equity mutual funds in SP Blend are composed of Schwab affiliated funds, primarily those that employ Schwab Equity Ratings in the selection of the stocks in the funds. Schwab Equity Ratings is Schwab's proprietary equity rating approach, which objectively evaluates stocks on the basis of a wide variety of investment metrics from four broad categories: fundamentals, valuation, momentum, and risk. Historically, these investment criteria have been found by Schwab to indicate stock price performance. Schwab Equity Ratings are designed to identify stocks that will outperform, or underperform, the market as a whole over the next 12 months.

The international equities and fixed-income portions are comprised of unaffiliated third-party funds from the Mutual Fund One Source Select List™. The funds on the Select List are chosen through a disciplined evaluation process incorporating both quantitative and qualitative criteria, including, among other factors, historical performance, risk, and expenses. For more information on how Schwab chooses funds for the OneSource Select List, click here.

SP Third-Party Portfolio
All of the funds in SP Third-Party are unaffiliated, third-party funds chosen from the OneSource Select List.

When choosing which funds to include in either the SP Blend or SP Third-Party portfolios, Schwab will generally select the most favorably evaluated Schwab affiliated or third-party fund within each asset category, as applicable. However, Schwab may select a less favorably evaluated fund if it believes that the fund's investment style better compliments the investment styles of the other funds selected for the particular portfolio.

Schwab and its affiliates receive fees from the affiliated Schwab funds for investment advisory, administrative and transfer agency services as well as shareholder and other fund services. Schwab also receives remuneration from fund companies and/or their affiliates participating in Schwab's Mutual Fund OneSource® service for the recordkeeping, shareholder services and other administrative services Schwab provides to Schwab customers who are shareholders of the funds. The aggregate fees Schwab or its affiliates receive from Schwab SER Funds and other affiliated Schwab Funds (see fund prospectuses for more details) is greater than the remuneration Schwab receives from fund companies participating in Schwab's Mutual Fund OneSource service.

Schwab Portfolios are intended to achieve adequate risk-adjusted returns relative to each portfolio's investment profile. They are not designed to include only the highest performing funds or to maximize investment return. Schwab will periodically review each Schwab Portfolio and, consequently, may change the composition of suggested funds within a given portfolio over time.

No mention of particular funds within a Schwab Portfolio should be construed as a recommendation or considered an offer to buy or sell, a solicitation of an offer to buy, or a recommendation of any securities. Schwab Portfolios are intended as an investment resource and are provided only for general information purposes. This information should not be considered an individualized recommendation or personalized investment advice. The securities listed may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation.

The following minimum initial investments are suggested to ensure adequate diversification and to enhance the effectiveness of the Schwab Portfolios™:

• Retirement accounts: $10,000
• Non-retirement accounts: $12,500