Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-05547
Laudus Trust
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
Marie Chandoha
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 636-7000
Date of fiscal year end: March 31
Date of reporting period: September 30, 2017
Item 1: Report(s) to Shareholders.
Table of Contents
Total Return for the 6 Months Ended September 30, 2017 | |
Laudus Mondrian International Equity Fund1,2 (Ticker Symbol: LIEIX) | 8.99% |
MSCI EAFE Index® (Net)3 | 11.86% |
MSCI EAFE® Value Index (Net)3 | 10.93% |
Performance Details | pages 6-7 |
Laudus Mondrian Emerging Markets Fund1,2 (Ticker Symbol: LEMNX) | 7.91% |
MSCI Emerging Markets Index (Net)3 | 14.66% |
Performance Details | pages 8-9 |
Laudus Mondrian International Government Fixed Income Fund (Ticker Symbol: LIFNX) | 6.44% |
Citigroup Non-U.S. Dollar World Government Bond Index | 6.48% |
Performance Details | pages 10-11 |
Minimum Initial Investment4 | $ 100 |
1 | The fund’s performance relative to the indices may be affected by fair-value pricing, see financial note 2 for more information. |
2 | On July 25, 2017, the Investor Share class, Select Share class and Institutional Share class of the fund were combined into a single class of shares of the fund. The performance and financial history of the fund is that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. |
3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
4 | Please see prospectus for further detail and eligibility requirements. There is no minimum initial investment for Laudus Mondrian International Equity Fund and Laudus Mondrian Emerging Markets Fund. |
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.
1 | As of August 2017, Organization for Economic Cooperation and Development. |
Fund and Inception Date | 6 Months | 1 Year | 5 Years | Since Inception |
Laudus Mondrian International Equity Fund (6/16/08) | 8.99% | 15.26% | 8.17% | 1.81% |
MSCI EAFE Index® (Net)3 | 11.86% | 19.10% | 8.38% | 2.55% |
MSCI EAFE® Value Index (Net)3 | 10.93% | 22.55% | 7.80% | 2.05% |
Fund Expense Ratios4: Net 0.90%; Gross 0.96% |
Fund Characteristics | |
Number of Companies5 | 37 |
Weighted Average Market Cap (millions) | $78,749 |
Price/Earnings Ratio (P/E) | 17.13 |
Price/Book Ratio (P/B) | 1.50 |
Portfolio Turnover (One year trailing) | 23% |
Fund Overview | |
Fund | |
Inception Date | 6/16/2008 |
Ticker Symbol | LIEIX |
Cusip | 51855Q580 |
NAV | $6.67 |
1 | Fund expenses may have been partially absorbed by CSIM. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
2 | On July 25, 2017, the Investor Share class, Select Share class and Institutional Share class of the fund were combined into a single class of shares of the fund. The performance and financial history of the fund is that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. |
3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
4 | As stated in the prospectus. Net Expenses: The adviser has agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of the fund to 0.90% until at least July 30, 2019. Gross Expenses: Reflects the total annual fund operating expenses without the effect of contractual fee waivers. For actual rates during the period, refer to the Financial Highlights section of the Financial Statements. |
5 | Short-term investments are not included. |
1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
2 | This list is not a recommendation of any security by the investment adviser or subadviser. |
Fund and Inception Date | 6 Months | 1 Year | 5 Years | Since Inception |
Laudus Mondrian Emerging Markets Fund (11/2/07) | 7.91% | 13.87% | -0.11% | -0.06% |
MSCI Emerging Markets Index (Net)3 | 14.66% | 22.46% | 3.99% | 0.46% |
Fund Expense Ratios4: Net 1.20%; Gross 1.22% |
Fund Characteristics | |
Number of Companies5 | 56 |
Weighted Average Market Cap (millions) | $52,821 |
Price/Earnings Ratio (P/E) | 10.98 |
Price/Book Ratio (P/B) | 1.28 |
Portfolio Turnover (One year trailing) | 35% |
Fund Overview | |
Fund | |
Inception Date | 11/2/2007 |
Ticker Symbol | LEMNX |
Cusip | 51855Q622 |
NAV | $8.32 |
1 | Fund expenses may have been partially absorbed by CSIM. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
2 | On July 25, 2017, the Investor Share class, Select Share class and Institutional Share class of the fund were combined into a single class of shares of the fund. The performance and financial history of the fund is that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. |
3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
4 | As stated in the prospectus. Net Expenses: The adviser has agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of the fund to 1.20% until at least July 30, 2019. Gross Expenses: Reflects the total annual fund operating expenses without the effect of contractual fee waivers. For actual rates during the period, refer to the Financial Highlights section of the Financial Statements. |
5 | Short-term investments are not included. |
1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
2 | This list is not a recommendation of any security by the investment adviser or subadviser. |
Fund and Inception Date | 6 Months | 1 Year | 5 Years | Since Inception |
Laudus Mondrian International Government Fixed Income Fund (11/2/07) | 6.44% | -2.63% | -2.24% | 2.35% |
Citigroup Non-U.S. Dollar World Government Bond Index | 6.48% | -3.14% | -1.07% | 2.45% |
Fund Expense Ratios3: Net 0.75%; Gross 0.79% |
Fund Characteristics4 | |
Number of Issues5 | 48 |
Weighted Average Maturity6 | 9.3 Yrs |
Weighted Average Duration6 | 8.1 Yrs |
Portfolio Turnover (One year trailing) | 71% |
Fund Overview | |
Fund | |
Inception Date | 11/2/2007 |
Ticker Symbol | LIFNX |
Cusip | 51855Q655 |
NAV | $9.92 |
1 | Fund expenses may have been partially absorbed by CSIM. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
2 | On July 27, 2009, the Investor Share class, Select Share class and Institutional Share class of the fund were combined into a single class of shares of the fund. The performance and financial history of the fund is that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. |
3 | As stated in the prospectus. Net Expenses: The adviser has agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of the fund to 0.75% until at least July 30, 2019. Gross Expenses: Reflects the total annual fund operating expenses without the effect of contractual fee waivers. For actual rates during the period, refer to the Financial Highlights section of the Financial Statements. |
4 | Excludes derivatives. |
5 | Short-term investments are not included. |
6 | See Glossary for definitions of maturity and duration. |
1 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
2 | Country weights may include issues via Samurai bonds issued in Japanese yen by non-Japanese entities and/or Yankee bonds issued in U.S. dollars by non-U.S. entities. |
3 | Supranational bonds represent the debt of international organizations or institutions such as the World Bank, the International Monetary Fund, regional multilateral development banks and others. Bonds are issued and held in Japanese yen and euro. |
4 | Includes forward foreign currency exchange contracts exposure, which may results in negative exposure to a particular currency. |
5 | Amount is less than 0.05% |
6 | Excludes derivatives. |
7 | This list is not a recommendation of any security by the investment adviser or subadviser. |
Expense Ratio (Annualized)1 | Beginning Account Value at 4/1/17 | Ending Account Value (Net of Expenses) at 9/30/17 | Expenses Paid During Period 4/1/17-9/30/172 | |
Laudus Mondrian International Equity Fund3 | ||||
Actual Return | 0.90% | $1,000.00 | $1,089.90 | $4.72 |
Hypothetical 5% Return | 0.90% | $1,000.00 | $1,020.59 | $4.56 |
Laudus Mondrian Emerging Markets Fund | ||||
Actual Return | 1.21% | $1,000.00 | $1,079.10 | $6.31 |
Hypothetical 5% Return | 1.21% | $1,000.00 | $1,019.03 | $6.12 |
Laudus Mondrian International Government Fixed Income Fund | ||||
Actual Return | 0.75% | $1,000.00 | $1,064.40 | $3.88 |
Hypothetical 5% Return | 0.75% | $1,000.00 | $1,021.34 | $3.80 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. This ratio does not include certain non-routine expenses, such as custody out-of-pocket fee reimbursement. |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 183 days of the period, and divided by the 365 days of the fiscal year. |
3 | Effective July 25, 2017, the Investor Share class, the Select Share class, and the Institutional share class were combined into a single class of shares of the fund. The actual return and hypothetical 5% return shown is that of the former Institutional share class (see financial note 1). |
4/1/17– 9/30/17*,1 | 4/1/16– 3/31/17 | 4/1/15– 3/31/16 | 4/1/14– 3/31/15 | 4/1/13– 3/31/14 | 4/1/12– 3/31/13 | |
Per-Share Data | ||||||
Net asset value at beginning of period | $6.12 | $5.68 | $6.50 | $8.81 | $7.46 | $7.22 |
Income (loss) from investment operations: | ||||||
Net investment income (loss)2 | 0.13 | 0.18 | 0.16 | 0.27 | 0.35 | 0.23 |
Net realized and unrealized gains (losses) | 0.42 | 0.42 | (0.61) | (0.41) | 1.22 | 0.27 |
Total from investment operations | 0.55 | 0.60 | (0.45) | (0.14) | 1.57 | 0.50 |
Less distributions: | ||||||
Distributions from net investment income | — | (0.16) | (0.15) | (0.89) | (0.22) | (0.25) |
Distributions from net realized gains | — | — | (0.22) | (1.28) | — | (0.01) |
Total distributions | — | (0.16) | (0.37) | (2.17) | (0.22) | (0.26) |
Net asset value at end of period | $6.67 | $6.12 | $5.68 | $6.50 | $8.81 | $7.46 |
Total return | 8.99% 3 | 10.78% | (6.88%) | 0.11% | 21.31% | 7.10% |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.89% 4,5 | 0.90% | 0.91% 6 | 1.01% 7 | 1.05% | 1.05% |
Gross operating expenses | 0.99% 4,5 | 0.96% | 1.06% | 1.07% | 1.07% | 1.11% |
Net investment income (loss) | 3.92% 4,5 | 3.10% | 2.53% | 3.28% | 4.24% | 3.22% |
Portfolio turnover rate | 11% 3 | 34% | 29% | 36% 8 | 25% | 29% |
Net assets, end of period (x 1,000) | $115,064 | $92,312 | $110,873 | $91,981 | $162,366 | $127,709 |
* | Unaudited. |
Security | Number of Shares | Value ($) |
Common Stock 98.9% of net assets | ||
Australia 1.8% | ||
QBE Insurance Group Ltd. | 263,454 | 2,076,956 |
China 2.6% | ||
China Mobile Ltd. | 290,500 | 2,949,142 |
France 6.5% | ||
Compagnie de Saint-Gobain | 54,578 | 3,251,759 |
Sanofi | 42,862 | 4,266,768 |
7,518,527 | ||
Germany 11.3% | ||
Allianz SE | 13,630 | 3,061,119 |
Daimler AG | 48,033 | 3,834,236 |
Deutsche Telekom AG | 120,904 | 2,257,797 |
SAP SE | 34,545 | 3,787,694 |
12,940,846 | ||
Hong Kong 2.0% | ||
CK Hutchison Holdings Ltd. | 130,000 | 1,665,077 |
WH Group Ltd. | 566,000 | 602,791 |
2,267,868 | ||
Italy 6.7% | ||
Enel S.p.A. | 640,507 | 3,858,613 |
Eni S.p.A. | 232,001 | 3,842,330 |
7,700,943 | ||
Japan 15.3% | ||
Canon, Inc. | 83,400 | 2,854,028 |
Honda Motor Co., Ltd. | 144,200 | 4,259,742 |
Isuzu Motors, Ltd. | 51,800 | 686,809 |
Mitsubishi Electric Corp. | 145,100 | 2,269,850 |
Takeda Pharmaceutical Co., Ltd. | 79,200 | 4,379,436 |
Tokio Marine Holdings, Inc. | 81,800 | 3,201,440 |
17,651,305 | ||
Netherlands 2.8% | ||
Koninklijke Ahold Delhaize N.V. | 169,579 | 3,168,521 |
Singapore 5.1% | ||
Singapore Telecommunications Ltd. | 862,000 | 2,343,282 |
United Overseas Bank Ltd. | 205,522 | 3,569,043 |
5,912,325 | ||
Security | Number of Shares | Value ($) |
Spain 6.9% | ||
Banco Santander S.A. | 236,467 | 1,654,050 |
Iberdrola S.A. | 462,854 | 3,598,981 |
Telefonica S.A. | 247,990 | 2,694,925 |
7,947,956 | ||
Sweden 3.5% | ||
Telia Co. AB | 858,461 | 4,048,019 |
Switzerland 9.5% | ||
ABB Ltd. | 138,649 | 3,428,509 |
Nestle S.A. | 9,957 | 835,803 |
Novartis AG | 37,274 | 3,197,175 |
Zurich Insurance Group AG | 11,462 | 3,502,551 |
10,964,038 | ||
Taiwan 3.4% | ||
Taiwan Semiconductor Manufacturing Co., Ltd. | 537,154 | 3,847,342 |
United Kingdom 21.5% | ||
BP plc | 597,708 | 3,828,912 |
GlaxoSmithKline plc | 168,086 | 3,360,142 |
Kingfisher plc | 838,448 | 3,356,878 |
Lloyds Banking Group plc | 4,562,650 | 4,146,339 |
National Grid plc | 165,475 | 2,049,498 |
Royal Dutch Shell plc, A Shares (a) | 7,085 | 214,587 |
Royal Dutch Shell plc, A Shares (a) | 7,942 | 240,022 |
Royal Dutch Shell plc, B Shares | 119,267 | 3,671,766 |
Tesco plc * | 1,558,990 | 3,909,557 |
24,777,701 | ||
Total Common Stock | ||
(Cost $91,102,727) | 113,771,489 | |
Other Investment Company 0.4% of net assets | ||
United States 0.4% | ||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.92% (b) | 482,916 | 482,916 |
Total Other Investment Company | ||
(Cost $482,916) | 482,916 |
* | Non-income producing security. |
(a) | Securities are traded on separate exchanges for the same entity. |
(b) | The rate shown is the 7-day yield. |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |
Assets | |||||
Common Stock1 | $— | $113,771,489 | $— | $113,771,489 | |
Other Investment Company1 | 482,916 | — | — | 482,916 | |
Total | $482,916 | $113,771,489 | $— | $114,254,405 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in unaffiliated issuers, at value (cost $91,585,643) | $114,254,405 | |
Foreign currency, at value (cost $314,457) | 314,217 | |
Receivables: | ||
Foreign tax reclaims | 277,275 | |
Dividends | 197,090 | |
Fund shares sold | 112,507 | |
Prepaid expenses | + | 30,137 |
Total assets | 115,185,631 | |
Liabilities | ||
Payables: | ||
Investment adviser fees | 62,434 | |
Fund shares redeemed | 1,242 | |
Accrued expenses | + | 58,255 |
Total liabilities | 121,931 | |
Net Assets | ||
Total assets | 115,185,631 | |
Total liabilities | – | 121,931 |
Net assets | $115,063,700 | |
Net Assets by Source | ||
Capital received from investors | 91,748,588 | |
Net investment income not yet distributed | 2,831,472 | |
Net realized capital losses | (2,189,908) | |
Net unrealized capital appreciation | 22,673,548 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$115,063,700 | 17,247,370 | $6.67 | ||
Investment Income | ||
Dividends (net of foreign withholding tax of $260,860) | $2,705,952 | |
Expenses | ||
Investment adviser fees | 416,278 | |
Custodian fees | 34,806 | |
Registration fees | 27,207 | |
Transfer agent fees | 23,063 | |
Professional fees | 21,105 | |
Accounting and administration fees | 14,299 | |
Independent trustees’ fees | 6,972 | |
Distribution and shareholder services fees (Investor Shares)1 | 5,441 | |
Interest expense | 4,008 | |
Shareholder reports | 3,223 | |
Sub-accounting and sub-transfer agent fees: | ||
Investor Shares1 | 2,395 | |
Select Shares1 | 2,460 | |
Custody out-of-pocket fee reimbursement | (13,207)* | |
Other expenses | + | 5,212 |
Total expenses | 553,262 | |
Expense reduction by adviser | – | 53,008 |
Net expenses | – | 500,254 |
Net investment income | 2,205,698 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on investments | 3,209,546 | |
Net realized losses on foreign currency transactions | + | (6,481) |
Net realized gains | 3,203,065 | |
Net change in unrealized appreciation (depreciation) on investments | 4,117,090 | |
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 24,115 |
Net change in unrealized appreciation (depreciation) | + | 4,141,205 |
Net realized and unrealized gains | 7,344,270 | |
Increase in net assets resulting from operations | $9,549,968 |
* | See financial note 12 for additional information. |
1 | Effective July 25, 2017, all outstanding Investor Shares and Select Shares combined with Institutional Shares, resulting in a single class of shares of the fund (see financial note 1). |
Operations | ||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||
Net investment income | $2,205,698 | $4,214,846 | ||
Net realized gains (losses) | 3,203,065 | (1,314,651) | ||
Net change in unrealized appreciation (depreciation) | + | 4,141,205 | 10,791,204 | |
Increase in net assets from operations | 9,549,968 | 13,691,399 | ||
Distributions to Shareholders1 | ||||
Distributions from net investment income | ||||
Investor Shares | — | (174,166) | ||
Select Shares | — | (168,191) | ||
Institutional Shares | + | — | (3,635,958) | |
Total distributions from net investment income | — | (3,978,315) |
Transactions in Fund Shares1 | ||||||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||||||
SHARES | VALUE | SHARES | VALUE | |||||
Shares Sold | ||||||||
Investor Shares | 62,863 | $392,981 | 754,099 | $4,346,911 | ||||
Select Shares | 111,157 | 699,654 | 894,507 | 5,229,138 | ||||
Institutional Shares | + | 4,122,159 | 26,567,354 | 7,135,778 | 41,577,906 | |||
Total shares sold | 4,296,179 | $27,659,989 | 8,784,384 | $51,153,955 | ||||
Shares Reinvested | ||||||||
Investor Shares | — | $— | 26,886 | $151,100 | ||||
Select Shares | — | — | 24,300 | 137,291 | ||||
Institutional Shares | + | — | — | 325,293 | 1,844,411 | |||
Total shares reinvested | — | $— | 376,479 | $2,132,802 | ||||
Shares Redeemed | ||||||||
Investor Shares | (1,259,304) | ($8,016,406) | (505,190) | ($2,904,993) | ||||
Select Shares | (1,110,179) | (7,119,869) | (707,653) | (4,070,851) | ||||
Institutional Shares | + | (1,964,520) | (12,664,273) | (11,874,216) | (70,894,657) | |||
Total shares redeemed | (4,334,003) | ($27,800,548) | (13,087,059) | ($77,870,501) | ||||
Net transactions in fund shares | (37,824) | ($140,559) | (3,926,196) | ($24,583,744) | ||||
Shares Outstanding and Net Assets | ||||||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
Beginning of period | 17,285,194 | $105,654,291 | 21,211,390 | $120,524,951 | ||||
Total increase or decrease | + | (37,824) | 9,409,409 | (3,926,196) | (14,870,660) | |||
End of period | 17,247,370 | $115,063,700 | 17,285,194 | $105,654,291 | ||||
Net investment income not yet distributed | $2,831,472 | $625,774 |
1 | Effective July 25, 2017, all outstanding Investor Shares (758,820 shares valued at $4,844,685) and Select Shares (993,528 shares valued at $6,386,298) combined with Institutional Shares, resulting in a single class of shares of the fund (see financial note 1). |
4/1/17– 9/30/17*,1 | 4/1/16– 3/31/17 | 4/1/15– 3/31/16 | 4/1/14– 3/31/15 | 4/1/13– 3/31/14 | 4/1/12– 3/31/13 | |
Per-Share Data | ||||||
Net asset value at beginning of period | $7.71 | $7.03 | $8.18 | $8.69 | $9.85 | $9.49 |
Income (loss) from investment operations: | ||||||
Net investment income (loss)2 | 0.15 | 0.14 | 0.14 | 0.12 | 0.14 | 0.16 |
Net realized and unrealized gains (losses) | 0.46 | 0.72 | (1.20) | (0.39) | (1.19) | 0.42 |
Total from investment operations | 0.61 | 0.86 | (1.06) | (0.27) | (1.05) | 0.58 |
Less distributions: | ||||||
Distributions from net investment income | — | (0.18) | (0.09) | (0.24) | (0.11) | (0.22) |
Distributions from net realized gains | — | — | — | — | (0.00) 3 | — |
Total distributions | — | (0.18) | (0.09) | (0.24) | (0.11) | (0.22) |
Net asset value at end of period | $8.32 | $7.71 | $7.03 | $8.18 | $8.69 | $9.85 |
Total return | 7.91% 4 | 12.57% | (12.87%) | (3.03%) | (10.62%) | 6.21% |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 1.20% 5,6 | 1.20% | 1.20% | 1.29% 7 | 1.45% | 1.45% |
Gross operating expenses | 1.24% 5,6 | 1.22% | 1.21% | 1.31% | 1.52% | 1.49% |
Net investment income (loss) | 3.59% 5,6 | 1.92% | 1.87% | 1.42% | 1.55% | 1.70% |
Portfolio turnover rate | 19% 4 | 32% | 28% | 30% 8 | 69% | 59% |
Net assets, end of period (x 1,000) | $305,974 | $336,896 | $406,462 | $559,347 | $121,795 | $141,536 |
* | Unaudited. |
Security | Number of Shares | Value ($) |
Common Stock 94.7% of net assets | ||
Brazil 8.5% | ||
Ambev S.A. ADR | 490,057 | 3,229,476 |
CCR S.A. | 1,055,881 | 5,904,252 |
Cielo S.A. | 837,136 | 5,809,718 |
Embraer S.A. ADR | 215,920 | 4,881,951 |
Itau Unibanco Holding S.A. ADR | 459,300 | 6,292,410 |
26,117,807 | ||
China 15.6% | ||
China Construction Bank Corp., Class H | 12,120,000 | 10,125,675 |
China Mobile Ltd. | 971,500 | 9,862,622 |
China Resources Power Holdings Co., Ltd. | 4,247,291 | 7,692,552 |
CSPC Pharmaceutical Group Ltd. | 1,314,000 | 2,208,306 |
Dongfeng Motor Group Co., Ltd., Class H | 5,644,000 | 7,489,597 |
WH Group Ltd. | 9,811,000 | 10,448,738 |
47,827,490 | ||
Hong Kong 2.5% | ||
Sands China Ltd. | 1,454,400 | 7,606,657 |
India 13.0% | ||
Bajaj Auto Ltd. | 177,473 | 8,452,252 |
HCL Technologies Ltd. | 432,949 | 5,802,022 |
Housing Development Finance Corp., Ltd. | 215,345 | 5,748,211 |
Infosys Ltd. | 172,474 | 2,381,294 |
Infosys Ltd. ADR | 130,624 | 1,905,804 |
Larsen & Toubro Ltd. | 201,285 | 3,524,605 |
Reliance Industries Ltd. | 243,167 | 2,910,981 |
Vedanta Ltd. | 1,884,664 | 9,095,776 |
39,820,945 | ||
Indonesia 1.6% | ||
PT Bank Rakyat Indonesia (Persero) Tbk | 4,310,700 | 4,894,017 |
Kazakhstan 0.9% | ||
KazMunaiGas Exploration Production JSC GDR | 265,082 | 2,624,312 |
Malaysia 4.9% | ||
AMMB Holdings Berhad | 6,037,900 | 6,242,445 |
Genting Malaysia Berhad | 3,892,500 | 4,961,179 |
Tenaga Nasional Berhad | 1,103,600 | 3,744,879 |
14,948,503 | ||
Mexico 3.8% | ||
Fibra Uno Administracion S.A. de C.V. | 5,403,338 | 9,115,351 |
Grupo Financiero Santander Mexico S.A.B. de C.V., Class B ADR | 253,717 | 2,560,005 |
11,675,356 | ||
Security | Number of Shares | Value ($) |
Peru 1.3% | ||
Credicorp Ltd. | 19,547 | 4,007,526 |
Philippines 1.3% | ||
PLDT, Inc. ADR | 127,091 | 4,056,745 |
Qatar 1.4% | ||
Qatar National Bank SAQ | 124,463 | 4,171,157 |
Republic of Korea 12.5% | ||
Hyundai Mobis Co., Ltd. | 11,525 | 2,419,764 |
Korea Electric Power Corp. | 127,035 | 4,316,053 |
Korea Zinc Co., Ltd. | 3,879 | 1,680,689 |
Samsung Electronics Co., Ltd. | 6,003 | 13,508,083 |
Samsung SDI Co., Ltd. | 20,087 | 3,494,924 |
Shinhan Financial Group Co., Ltd. | 158,575 | 7,008,739 |
SK Telecom Co., Ltd. | 26,760 | 5,970,925 |
38,399,177 | ||
Russia 4.0% | ||
Gazprom PJSC ADR | 2,083,568 | 8,730,150 |
Lukoil PJSC ADR | 63,998 | 3,393,814 |
12,123,964 | ||
South Africa 5.8% | ||
Barclays Africa Group Ltd. | 393,744 | 4,041,369 |
Growthpoint Properties Ltd. | 1,735,154 | 3,116,244 |
Sasol Ltd. | 152,385 | 4,169,979 |
Woolworths Holdings Ltd. | 1,466,213 | 6,492,204 |
17,819,796 | ||
Taiwan 10.6% | ||
Asustek Computer, Inc. | 613,000 | 5,051,614 |
MediaTek, Inc. | 272,000 | 2,559,490 |
Mega Financial Holding Co., Ltd. | 9,028,153 | 7,066,733 |
Taiwan Mobile Co., Ltd. | 994,000 | 3,542,779 |
Taiwan Semiconductor Manufacturing Co., Ltd. | 1,979,719 | 14,179,650 |
32,400,266 | ||
Thailand 1.9% | ||
Kasikornbank PCL NVDR | 926,000 | 5,758,748 |
Turkey 3.7% | ||
Eregli Demir ve Celik Fabrikalari TAS | 1,606,247 | 3,485,506 |
Turk Telekomunikasyon A/S * | 892,209 | 1,701,610 |
Turkiye Garanti Bankasi A/S | 1,313,468 | 3,568,745 |
Turkiye Halk Bankasi A/S | 746,411 | 2,538,583 |
11,294,444 | ||
Security | Number of Shares | Value ($) |
United Arab Emirates 1.4% | ||
Emaar Malls PJSC | 6,652,693 | 4,220,654 |
Total Common Stock | ||
(Cost $258,254,140) | 289,767,564 | |
Preferred Stock 2.8% of net assets | ||
Brazil 2.3% | ||
Suzano Papel e Celulose S.A. | 1,238,700 | 7,161,200 |
India 0.5% | ||
Vedanta Ltd. * | 8,985,240 | 1,409,962 |
Total Preferred Stock | ||
(Cost $5,259,272) | 8,571,162 | |
Other Investment Company 1.9% of net assets | ||
United States 1.9% | ||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.92% (a) | 5,666,455 | 5,666,455 |
Total Other Investment Company | ||
(Cost $5,666,455) | 5,666,455 |
* | Non-income producing security. |
(a) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt |
GDR — | Global Depositary Receipt |
NVDR — | Non-Voting Depositary Receipt |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |
Assets | |||||
Common Stock1 | $— | $185,120,255 | $— | $185,120,255 | |
Brazil | 26,117,807 | — | — | 26,117,807 | |
India | 1,905,804 | 37,915,141 | — | 39,820,945 | |
Kazakhstan | 2,624,312 | — | — | 2,624,312 | |
Mexico | 11,675,356 | — | — | 11,675,356 | |
Peru | 4,007,526 | — | — | 4,007,526 | |
Philippines | 4,056,745 | — | — | 4,056,745 | |
Russia | 12,123,964 | — | — | 12,123,964 | |
United Arab Emirates | 4,220,654 | — | — | 4,220,654 | |
Preferred Stock1 | 8,571,162 | — | — | 8,571,162 | |
Other Investment Company1 | 5,666,455 | — | — | 5,666,455 | |
Total | $80,969,785 | $223,035,396 | $— | $304,005,181 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in unaffiliated issuers, at value (cost $269,179,867) | $304,005,181 | |
Foreign currency, at value (cost $1,180,293) | 1,179,330 | |
Receivables: | ||
Investments sold | 895,133 | |
Fund shares sold | 555,451 | |
Dividends | 200,132 | |
Foreign tax reclaims | 36,354 | |
Prepaid expenses | + | 28,172 |
Total assets | 306,899,753 | |
Liabilities | ||
Payables: | ||
Investments bought | 80,391 | |
Foreign capital gains tax | 424,125 | |
Investment adviser fees | 243,086 | |
Accrued expenses | + | 178,357 |
Total liabilities | 925,959 | |
Net Assets | ||
Total assets | 306,899,753 | |
Total liabilities | – | 925,959 |
Net assets | $305,973,794 | |
Net Assets by Source | ||
Capital received from investors | 389,578,195 | |
Net investment income not yet distributed | 4,755,879 | |
Net realized capital losses | (122,761,814) | |
Net unrealized capital appreciation | 34,401,534 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$305,973,794 | 36,770,264 | $8.32 | ||
Investment Income | ||
Dividends (net of foreign withholding tax of $870,022) | $7,938,774 | |
Expenses | ||
Investment adviser fees | 1,657,896 | |
Custodian fees | 277,251 | |
Accounting and administration fees | 31,915 | |
Registration fees | 25,971 | |
Professional fees | 23,149 | |
Transfer agent fees | 19,252 | |
Independent trustees’ fees | 9,627 | |
Interest expense | 9,332 | |
Shareholder reports | 3,158 | |
Distribution and shareholder services fees (Investor Shares)1 | 2,311 | |
Sub-accounting and sub-transfer agent fees: | ||
Investor Shares1 | 1,403 | |
Select Shares1 | 1,389 | |
Custody out-of-pocket fee reimbursement | (29,611)* | |
Other expenses | + | 14,063 |
Total expenses | 2,047,106 | |
Expense reduction by adviser | – | 73,028 |
Net expenses | – | 1,974,078 |
Net investment income | 5,964,696 | |
Realized and Unrealized Gains (Losses) | ||
Net realized losses on investments | (1,494,706) | |
Net realized losses on foreign currency transactions | (107,232) | |
Net realized gains on forward foreign currency exchange contracts | + | 43,735 |
Net realized losses | (1,558,203) | |
Net change in unrealized appreciation (depreciation) on investments (net of change in foreign capital gains tax of $363,812) | 21,557,274 | |
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (24,523) |
Net change in unrealized appreciation (depreciation) | + | 21,532,751 |
Net realized and unrealized gains | 19,974,548 | |
Increase in net assets resulting from operations | $25,939,244 |
* | See financial note 12 for additional information. |
1 | Effective July 25, 2017, all outstanding Investor Shares and Select Shares combined with Institutional Shares, resulting in a single class of shares of the fund (see financial note 1). |
Operations | ||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||
Net investment income | $5,964,696 | $7,459,147 | ||
Net realized losses | (1,558,203) | (27,940,771) | ||
Net change in unrealized appreciation (depreciation) | + | 21,532,751 | 62,217,878 | |
Increase in net assets from operations | 25,939,244 | 41,736,254 | ||
Distributions to Shareholders1 | ||||
Distributions from net investment income | ||||
Investor Shares | — | (66,046) | ||
Select Shares | — | (112,696) | ||
Institutional Shares | + | — | (9,365,136) | |
Total distributions from net investment income | $— | ($9,543,878) |
Transactions in Fund Shares1 | ||||||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||||||
SHARES | VALUE | SHARES | VALUE | |||||
Shares Sold | ||||||||
Investor Shares | 20,821 | $165,883 | 46,601 | $338,038 | ||||
Select Shares | 6,912 | 55,245 | 36,751 | 267,197 | ||||
Institutional Shares | + | 3,538,894 | 28,930,333 | 6,004,591 | 43,359,379 | |||
Total shares sold | 3,566,627 | $29,151,461 | 6,087,943 | $43,964,614 | ||||
Shares Reinvested | ||||||||
Investor Shares | — | $— | 9,047 | $62,870 | ||||
Select Shares | — | — | 15,230 | 105,697 | ||||
Institutional Shares | + | — | — | 1,291,515 | 8,950,205 | |||
Total shares reinvested | — | $— | 1,315,792 | $9,118,772 | ||||
Shares Redeemed | ||||||||
Investor Shares | (394,224) | ($3,271,281) | (150,769) | ($1,086,698) | ||||
Select Shares | (608,480) | (5,038,003) | (286,761) | (2,091,380) | ||||
Institutional Shares | + | (10,471,403) | (85,232,037) | (21,407,200) | (153,322,505) | |||
Total shares redeemed | (11,474,107) | ($93,541,321) | (21,844,730) | ($156,500,583) | ||||
Net transactions in fund shares | (7,907,480) | ($64,389,860) | (14,440,995) | ($103,417,197) | ||||
Shares Outstanding and Net Assets | ||||||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
Beginning of period | 44,677,744 | $344,424,410 | 59,118,739 | $415,649,231 | ||||
Total decrease | + | (7,907,480) | (38,450,616) | (14,440,995) | (71,224,821) | |||
End of period | 36,770,264 | $305,973,794 | 44,677,744 | $344,424,410 | ||||
Net investment income not yet distributed/Distributions in excess of net investment income | $4,755,879 | ($1,208,817) |
1 | Effective July 25, 2017, all outstanding Investor Shares (350,481 shares valued at $2,921,115) and Select Shares (490,116 shares valued at $4,088,249) combined with Institutional Shares, resulting in a single class of shares of the fund (see financial note 1). |
4/1/17– 9/30/17* | 4/1/16– 3/31/17 | 4/1/15– 3/31/16 | 4/1/14– 3/31/15 | 4/1/13– 3/31/14 | 4/1/12– 3/31/13 | |
Per-Share Data | ||||||
Net asset value at beginning of period | $9.32 | $9.93 | $9.45 | $10.89 | $11.01 | $11.61 |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.04 1 | 0.09 1 | 0.11 1 | 0.15 1 | 0.16 1 | 0.15 |
Net realized and unrealized gains (losses) | 0.56 | (0.64) | 0.56 | (1.14) | (0.21) | (0.53) |
Total from investment operations | 0.60 | (0.55) | 0.67 | (0.99) | (0.05) | (0.38) |
Less distributions: | ||||||
Distributions from net investment income | — | (0.00) 2 | — | — | — | (0.15) |
Distributions from net realized gains | — | (0.06) | (0.19) | (0.45) | (0.07) | (0.07) |
Total distributions | — | (0.06) | (0.19) | (0.45) | (0.07) | (0.22) |
Net asset value at end of period | $9.92 | $9.32 | $9.93 | $9.45 | $10.89 | $11.01 |
Total return | 6.44% 3 | (5.48%) | 7.27% | (9.37%) | (0.49%) | (3.41%) |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.74% 4,5 | 0.75% | 0.75% | 0.74% | 0.69% | 0.69% |
Gross operating expenses | 0.80% 4,5 | 0.79% | 0.81% | 0.76% | 0.69% | 0.69% |
Net investment income (loss) | 0.87% 4,5 | 0.87% | 1.21% | 1.39% | 1.48% | 1.27% |
Portfolio turnover rate | 38% 3 | 98% | 31% | 50% | 52% | 44% |
Net assets, end of period (x 1,000) | $88,761 | $95,565 | $119,938 | $187,388 | $652,647 | $741,235 |
* | Unaudited. |
Security Rate, Maturity Date | Face Amount (local currency) | Value ($) |
Government Bonds 88.6% of net assets | ||
Australia 5.8% | ||
Australia Government Bond | ||
5.75%, 05/15/21 (AUD) | 610,000 | 537,284 |
3.25%, 04/21/25 (AUD) | 1,386,000 | 1,129,604 |
4.75%, 04/21/27 (AUD) | 3,800,000 | 3,468,285 |
5,135,173 | ||
Austria 4.6% | ||
Austria Government Bond | ||
6.25%, 07/15/27 (EUR) | 2,248,000 | 4,116,760 |
Belgium 4.8% | ||
Kingdom of Belgium Government Bond | ||
1.00%, 06/22/26 (EUR) | 3,450,000 | 4,233,425 |
Canada 3.0% | ||
Canadian Government Bond | ||
0.75%, 09/01/21 (CAD) | 1,500,000 | 1,160,882 |
1.50%, 06/01/26 (CAD) | 1,400,000 | 1,070,721 |
5.00%, 06/01/37 (CAD) | 350,000 | 392,000 |
2,623,603 | ||
Finland 4.5% | ||
Finland Government Bond | ||
1.63%, 09/15/22 (EUR) | 2,000,000 | 2,573,874 |
0.50%, 09/15/27 (EUR) | 1,200,000 | 1,401,877 |
3,975,751 | ||
France 7.7% | ||
France Government Bond OAT | ||
0.00%, 05/25/20 (EUR) (a) | 1,745,000 | 2,088,473 |
0.50%, 05/25/25 (EUR) | 1,000,000 | 1,193,221 |
5.75%, 10/25/32 (EUR) | 775,000 | 1,497,047 |
1.25%, 05/25/36 (EUR) | 850,000 | 971,221 |
3.25%, 05/25/45 (EUR) | 710,000 | 1,118,519 |
6,868,481 | ||
Germany 7.9% | ||
Bundesobligation | ||
0.00%, 10/08/21 (EUR) (a) | 1,000,000 | 1,203,321 |
Bundesrepublik Deutschland | ||
0.00%, 08/15/26 (EUR) (a) | 1,500,000 | 1,725,838 |
0.50%, 08/15/27 (EUR) | 500,000 | 593,062 |
Bundesschatzanweisungen | ||
0.00%, 06/14/19 (EUR) (a) | 934,000 | 1,117,934 |
Security Rate, Maturity Date | Face Amount (local currency) | Value ($) |
Kreditanstalt fuer Wiederaufbau | ||
2.05%, 02/16/26 (JPY) | 230,000,000 | 2,416,436 |
7,056,591 | ||
Japan 19.3% | ||
Japan Government Five Year Bond | ||
0.10%, 09/20/19 (JPY) | 100,000,000 | 892,716 |
0.10%, 06/20/21 (JPY) | 150,000,000 | 1,342,657 |
Japan Government Ten Year Bond | ||
0.60%, 03/20/24 (JPY) | 306,000,000 | 2,834,021 |
0.10%, 06/20/26 (JPY) | 212,000,000 | 1,897,604 |
Japan Government Thirty Year Bond | ||
2.40%, 12/20/34 (JPY) | 275,000,000 | 3,235,723 |
Japan Government Twenty Year Bond | ||
1.60%, 06/20/30 (JPY) | 274,000,000 | 2,865,832 |
0.20%, 06/20/36 (JPY) | 483,700,000 | 4,058,326 |
17,126,879 | ||
Malaysia 3.0% | ||
Malaysia Government Bond | ||
4.05%, 09/30/21 (MYR) | 2,420,000 | 583,150 |
4.18%, 07/15/24 (MYR) | 7,850,000 | 1,892,208 |
4.25%, 05/31/35 (MYR) | 670,000 | 155,096 |
2,630,454 | ||
Mexico 3.9% | ||
Mexico Government Bond | ||
6.50%, 06/10/21 (MXN) | 26,000,000 | 1,420,348 |
7.50%, 06/03/27 (MXN) | 9,600,000 | 550,664 |
7.75%, 11/23/34 (MXN) | 26,280,000 | 1,532,985 |
3,503,997 | ||
Netherlands 4.8% | ||
Netherlands Government Bond | ||
0.00%, 01/15/22 (EUR) (a) | 388,000 | 464,854 |
5.50%, 01/15/28 (EUR) | 2,138,490 | 3,785,997 |
4,250,851 | ||
New Zealand 4.5% | ||
New Zealand Government Bond | ||
5.00%, 03/15/19 (NZD) | 200,000 | 150,801 |
5.50%, 04/15/23 (NZD) | 1,605,000 | 1,335,684 |
4.50%, 04/15/27 (NZD) | 3,039,000 | 2,473,067 |
3,959,552 | ||
Security Rate, Maturity Date | Face Amount (local currency) | Value ($) |
Poland 2.9% | ||
Poland Government Bond | ||
2.50%, 07/25/26 (PLN) | 3,750,000 | 967,303 |
5.75%, 04/25/29 (PLN) | 4,850,000 | 1,648,242 |
2,615,545 | ||
Singapore 4.6% | ||
Singapore Government Bond | ||
2.00%, 07/01/20 (SGD) | 2,010,000 | 1,504,481 |
2.38%, 06/01/25 (SGD) | 2,350,000 | 1,776,641 |
2.88%, 09/01/30 (SGD) | 1,000,000 | 782,558 |
4,063,680 | ||
Spain 7.3% | ||
Spain Government Bond | ||
1.40%, 01/31/20 (EUR) | 2,200,000 | 2,696,981 |
1.60%, 04/30/25 (EUR) | 2,050,000 | 2,521,660 |
4.20%, 01/31/37 (EUR) | 813,000 | 1,227,915 |
6,446,556 | ||
Total Government Bonds | ||
(Cost $74,722,551) | 78,607,298 | |
Supranational* 9.2% of net assets | ||
Asian Development Bank | ||
2.35%, 06/21/27 (JPY) | 380,000,000 | 4,127,187 |
European Investment Bank | ||
2.15%, 01/18/27 (JPY) | 375,000,000 | 4,012,905 |
Total Supranational | ||
(Cost $8,323,187) | 8,140,092 |
Security | Number of Shares | Value ($) |
Other Investment Company 1.0% of net assets | ||
United States 1.0% | ||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.92% (b) | 904,570 | 904,570 |
Total Other Investment Company | ||
(Cost $904,570) | 904,570 |
* | Supranational bonds represent the debt of international organizations or institutions such as the World Bank, the International Monetary Fund, regional multilateral development banks and others. |
(a) | Zero Coupon Bond. |
(b) | The rate shown is the 7-day yield. |
AUD — | Australian dollar |
CAD — | Canadian dollar |
EUR — | euro currency |
GBP — | Great British pound |
JPY — | Japanese yen |
MXN — | Mexican peso |
MYR — | Malaysian ringgit |
NZD — | New Zealand dollar |
PLN — | Polish zloty |
SEK — | Swedish Krona |
SGD — | Singapore dollar |
USD — | U.S. dollar |
Expiration Date | Counterparty | Currency to be Received | Amount of Currency to be Received | Currency to be Delivered | Amount of Currency to be Delivered | Unrealized Appreciation (Depreciation) ($) | ||||||
Forward Foreign Currency Exchange Contracts | ||||||||||||
10/26/2017 | State Street Bank & Trust Co. | AUD | 69,500 | USD | 54,506 | (4) | ||||||
10/26/2017 | State Street Bank & Trust Co. | AUD | 215,000 | USD | 169,952 | (1,350) | ||||||
10/26/2017 | State Street Bank & Trust Co. | GBP | 144,000 | USD | 186,050 | 7,054 | ||||||
10/26/2017 | State Street Bank & Trust Co. | GBP | 872,000 | USD | 1,140,886 | 28,471 | ||||||
10/26/2017 | State Street Bank & Trust Co. | GBP | 9,831,500 | USD | 12,868,598 | 315,501 | ||||||
10/26/2017 | State Street Bank & Trust Co. | NZD | 62,500 | USD | 45,644 | (522) | ||||||
10/26/2017 | State Street Bank & Trust Co. | NZD | 64,000 | USD | 46,553 | (347) | ||||||
10/26/2017 | State Street Bank & Trust Co. | SEK | 13,221,500 | USD | 1,616,814 | 8,535 | ||||||
10/26/2017 | State Street Bank & Trust Co. | SGD | 27,500 | USD | 20,236 | 43 | ||||||
10/26/2017 | State Street Bank & Trust Co. | SGD | 29,000 | USD | 21,601 | (216) | ||||||
10/26/2017 | State Street Bank & Trust Co. | SGD | 160,500 | USD | 117,805 | 551 | ||||||
10/26/2017 | State Street Bank & Trust Co. | USD | 5,426,421 | AUD | 6,868,000 | 40,565 | ||||||
10/26/2017 | State Street Bank & Trust Co. | USD | 248,913 | GBP | 183,500 | 2,838 | ||||||
10/26/2017 | State Street Bank & Trust Co. | USD | 329,159 | GBP | 242,000 | 4,636 | ||||||
10/26/2017 | State Street Bank & Trust Co. | USD | 348,075 | GBP | 262,000 | (3,269) | ||||||
10/26/2017 | State Street Bank & Trust Co. | USD | 219,792 | GBP | 170,500 | (8,850) | ||||||
10/26/2017 | State Street Bank & Trust Co. | USD | 4,169,314 | NZD | 5,623,000 | 109,695 | ||||||
10/26/2017 | State Street Bank & Trust Co. | USD | 1,628,765 | SEK | 13,221,500 | 3,416 | ||||||
10/26/2017 | State Street Bank & Trust Co. | USD | 22,321 | SGD | 30,000 | 199 | ||||||
10/26/2017 | State Street Bank & Trust Co. | USD | 4,184,344 | SGD | 5,690,000 | (11,574) | ||||||
Net Unrealized Appreciation on Forward Foreign Currency Exchange Contracts | 495,372 |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |
Assets | |||||
Government Bonds1 | $— | $78,607,298 | $— | $78,607,298 | |
Supranational | — | 8,140,092 | — | 8,140,092 | |
Other Investment Company1 | 904,570 | — | — | 904,570 | |
Forward Foreign Currency Exchange Contracts2 | — | 521,504 | — | 521,504 | |
Liabilities | |||||
Forward Foreign Currency Exchange Contracts2 | — | (26,132) | — | (26,132) | |
Total | $904,570 | $87,242,762 | $— | $88,147,332 |
1 | As categorized in Portfolio Holdings. |
2 | Forward foreign currency exchange contracts are valued at unrealized appreciation or depreciation. |
Assets | ||
Investments in unaffiliated issuers, at value (cost $83,950,308) | $87,651,960 | |
Receivables: | ||
Interest | 694,932 | |
Fund shares sold | 21,501 | |
Dividends | 608 | |
Unrealized appreciation on forward foreign currency exchange contracts | 521,504 | |
Prepaid expenses | + | 15,787 |
Total assets | 88,906,292 | |
Liabilities | ||
Payables: | ||
Investment adviser fees | 42,590 | |
Fund shares redeemed | 3,287 | |
Unrealized depreciation on forward foreign currency exchange contracts | 26,132 | |
Accrued expenses | + | 73,190 |
Total liabilities | 145,199 | |
Net Assets | ||
Total assets | 88,906,292 | |
Total liabilities | – | 145,199 |
Net assets | $88,761,093 | |
Net Assets by Source | ||
Capital received from investors | 90,895,700 | |
Net investment loss | (4,421,056) | |
Net realized capital losses | (1,924,131) | |
Net unrealized capital appreciation | 4,210,580 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$88,761,093 | 8,948,223 | $9.92 | ||
Investment Income | ||
Dividends | $4,320 | |
Interest | + | 752,488 |
Total investment income | 756,808 | |
Expenses | ||
Investment adviser fees | 282,480 | |
Professional fees | 26,060 | |
Custodian fees | 22,203 | |
Transfer agent fees | 16,092 | |
Accounting and administration fees | 10,967 | |
Registration fees | 10,152 | |
Shareholder reports | 6,715 | |
Independent trustees’ fees | 6,688 | |
Interest expense | 462 | |
Custody out-of-pocket fee reimbursement | (11,487)* | |
Other expenses | + | 2,523 |
Total expenses | 372,855 | |
Expense reduction by adviser | – | 30,780 |
Net expenses | – | 342,075 |
Net investment income | 414,733 | |
Realized and Unrealized Gains (Losses) | ||
Net realized losses on investments | (1,678,261) | |
Net realized losses on foreign currency transactions | (93,825) | |
Net realized gains on forward foreign currency exchange contracts | + | 252,889 |
Net realized losses | (1,519,197) | |
Net change in unrealized appreciation (depreciation) on investments | 6,615,725 | |
Net change in unrealized appreciation (depreciation) on foreign currency translations | 4,989 | |
Net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts | + | 363,137 |
Net change in unrealized appreciation (depreciation) | + | 6,983,851 |
Net realized and unrealized gains | 5,464,654 | |
Increase in net assets resulting from operations | $5,879,387 |
* | See financial note 12 for additional information. |
Operations | ||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||
Net investment income | $414,733 | $1,129,081 | ||
Net realized losses | (1,519,197) | (4,813,012) | ||
Net change in unrealized appreciation (depreciation) | + | 6,983,851 | (3,925,465) | |
Increase (decrease) in net assets from operations | 5,879,387 | (7,609,396) | ||
Distributions to Shareholders | ||||
Distributions from net investment income | — | (14,676) | ||
Distributions from net realized gains | + | — | (761,942) | |
Total distributions | $— | ($776,618) |
Transactions in Fund Shares | ||||||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||||||
SHARES | VALUE | SHARES | VALUE | |||||
Shares sold | 346,004 | $3,359,649 | 8,151,717 | $81,286,242 | ||||
Shares reinvested | — | — | 56,636 | 506,323 | ||||
Shares redeemed | + | (1,646,274) | (16,043,367) | (10,038,045) | (97,779,218) | |||
Net transactions in fund shares | (1,300,270) | ($12,683,718) | (1,829,692) | ($15,986,653) | ||||
Shares Outstanding and Net Assets | ||||||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
Beginning of period | 10,248,493 | $95,565,424 | 12,078,185 | $119,938,091 | ||||
Total decrease | + | (1,300,270) | (6,804,331) | (1,829,692) | (24,372,667) | |||
End of period | 8,948,223 | $88,761,093 | 10,248,493 | $95,565,424 | ||||
Net investment loss | ($4,421,056) | ($4,835,789) |
LAUDUS TRUST (ORGANIZED APRIL 1, 1988) | |
Laudus Mondrian International Equity Fund | |
Laudus Mondrian Emerging Markets Fund | |
Laudus Mondrian International Government Fixed Income Fund | |
Laudus U.S. Large Cap Growth Fund |
2. Significant Accounting Policies:
3. Risk Factors:
4. Affiliates and Affiliated Transactions:
Laudus Mondrian International Equity Fund | 0.75% |
Laudus Mondrian Emerging Markets Fund | 1.00% |
Laudus Mondrian International Government Fixed Income Fund | 0.60% |
Laudus Mondrian International Equity Fund | 0.90% |
Laudus Mondrian Emerging Markets Fund | 1.20% |
Laudus Mondrian International Government Fixed Income Fund | 0.75% |
Laudus Mondrian International Equity Fund | Laudus Mondrian Emerging Markets Fund | |
Investor Shares | 1.30% | 1.60% |
Select Shares | 1.05% | 1.35% |
Institutional Shares | 0.90% | 1.20% |
Expiration Date | Laudus Mondrian International Equity Fund | Laudus Mondrian Emerging Markets Fund | Laudus Mondrian International Government Fixed Income Fund | ||
March 31, 2018 | $146,935 | $52,987 | $78,310 | ||
March 31, 2019 | 70,113 | 72,219 | 52,325 | ||
March 31, 2020 | 48,646 | 72,064 | 30,780 | ||
Total | $265,694 | $197,270 | $161,415 |
Underlying Funds | ||
Laudus Mondrian Mondrian Emerging Markets Fund | Laudus Mondrian International Government Fixed Income Fund | |
Schwab Target 2010 Fund | —% | 0.5% |
Schwab Target 2015 Fund | —% | 0.9% |
Schwab Target 2020 Fund | 0.5% | 8.0% |
Schwab Target 2025 Fund | 1.4% | 7.0% |
Schwab Target 2030 Fund | 4.2% | 12.1% |
Schwab Target 2035 Fund | 2.8% | 4.6% |
Schwab Target 2040 Fund | 8.1% | 6.0% |
Schwab Target 2045 Fund | 1.1% | 0.6% |
Schwab Target 2050 Fund | 1.1% | 0.5% |
Schwab Target 2055 Fund | 0.7% | 0.1% |
Schwab Target 2060 Fund | 0.1% | 0.0%* |
* | Less than 0.05% |
5. Distribution and Shareholder Services:
6. Board of Trustees:
7. Borrowing from Banks:
8. Purchases and Sales/Maturities of Investment Securities:
Purchases of Securities | Sales/Maturities of Securities | |
Laudus Mondrian International Equity Fund | $13,935,731 | $11,917,659 |
Laudus Mondrian Emerging Markets Fund | 60,649,973 | 118,522,713 |
Laudus Mondrian International Government Fixed Income Fund | 34,749,564 | 50,997,502 |
Forward Foreign Currency Exchange Contract Notional Amount | Net Unrealized Appreciation (Depreciation) | |
Laudus Mondrian International Equity Fund | $— | $— |
Laudus Mondrian Emerging Markets Fund | 171,075 | 87 |
Laudus Mondrian International Government Fixed Income Fund | 28,720,480 | 91,915 |
Laudus Mondrian International Equity Fund | Laudus Mondrian Emerging Markets Fund | Laudus Mondrian International Government Fixed Income Fund | ||||
Asset Derivatives | Fair Value | |||||
Forward Foreign Currency Exchange Contracts1 | $— | $— | $521,504 | |||
Liability Derivatives | Fair Value | |||||
Forward Foreign Currency Exchange Contracts2 | $— | $— | ($26,132) |
1 | Statement of Assets and Liabilities location: Unrealized appreciation on forward foreign currency exchange contracts. |
2 | Statement of Assets and Liabilities location: Unrealized depreciation on forward foreign currency exchange contracts. |
Forward Foreign Currency Exchange Contracts | ||||
Laudus Mondrian International Equity Fund | Laudus Mondrian Emerging Markets Fund | Laudus Mondrian International Government Fixed Income Fund | ||
Realized Gains (Losses) | $— | $43,735 | $252,889 | |
Change in Unrealized Appreciation (Depreciation) | — | — | 363,137 |
Gross Amounts Not Offset in the Statement of Assets & Liabilities | |||||||
Counterparty | Net Amounts of Assets Presented in the Statement of Assets and Liabilities | Financial Instruments | Cash Collateral Received | Net Amounts(a) | |||
State Street Bank & Trust Co. | $521,504 | ($26,132) | $— | $495,372 | |||
Total | $521,504 | ($26,132) | $— | $495,372 | |||
Counterparty | Net Amounts of Liabilities Presented in the Statement of Assets and Liabilities | Financial Instruments | Cash Collateral Pledged | Net Amounts(b) | |||
State Street Bank & Trust Co. | ($26,132) | $26,132 | $— | $— | |||
Total | ($26,132) | $26,132 | $— | $— |
a | Represents the net amount due from the counterparty in the event of default. |
b | Represents the net amount due to the counterparty in the event of default. |
10. Redemption Fee:
Prior Period (4/1/16-3/31/17) | |
Laudus Mondrian International Equity Fund | $5,510 |
Laudus Mondrian Emerging Markets Fund | 262 |
Laudus Mondrian International Government Fixed Income Fund | 6,652 |
11. Federal Income Taxes:
Laudus Mondrian International Equity Fund | Laudus Mondrian Emerging Markets Fund | Laudus Mondrian International Government Fixed Income Fund | |||
Tax cost | $94,663,210 | $282,682,102 | $85,029,344 | ||
Gross unrealized appreciation | $20,079,093 | $39,511,713 | $3,826,718 | ||
Gross unrealized depreciation | (487,898) | (18,188,634) | (708,730) | ||
Net unrealized appreciation (depreciation) | $19,591,195 | $21,323,079 | $3,117,988 |
Expiration Date | Laudus Mondrian International Equity Fund | Laudus Mondrian Emerging Markets Fund | Laudus Mondrian International Government Fixed Income Fund |
No expiration | $2,240,408 | $105,528,240 | $— |
12. Custody Out-of-Pocket Fee Reimbursement:
13. Subsequent Events:
1. | the nature, extent and quality of the services provided to the Funds under the Agreements, including the resources of CSIM and its affiliates, and Mondrian, dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates, as well as the profitability of Mondrian; and |
5. | the extent to which economies of scale would be realized as the Funds grow, and whether fee levels in the Agreements reflect those economies of scale for the benefit of Fund investors. |
Independent Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 105 | Director, PS Business Parks, Inc. (2005 – 2012) |
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Fellow, The Hoover Institution at Stanford University (public policy think tank) (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015). | 105 | Director, Gilead Sciences, Inc. (2005 – present) |
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant, LLC (wealth management) (Jan. 2008 – Apr. 2012). | 105 | None |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 105 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 105 | Director, KLA-Tencor Corporation (2008 – present) |
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Consultant, Patmore Management Consulting (management consulting) (2008 – present). | 105 | None |
Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2015) | Co-Chief Executive Officer, Kudu Investment Management, LLC (financial services) (Jan. 2015 – present); Partner, Kudu Advisors, LLC (financial services) (June 2008 – Jan. 2015); Advisor, Asset International, Inc. (publisher of financial services information) (Aug. 2008 – Jan. 2015). | 105 | None |
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 105 | Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 105 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present) Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Walter W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation (Oct. 2008 – present); President and Chief Executive Officer (Oct. 2008 – present), Director (May 2008 – present), Charles Schwab & Co., Inc.; Director, Charles Schwab Bank (Apr. 2006 – present); Director, Schwab Holdings, Inc. (May 2008 – present); and Director, Charles Schwab Investment Management, Inc. (July 2016 – present). | 105 | Director, The Charles Schwab Corporation (2008 – present) |
Marie A. Chandoha2 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm) (Mar. 2007 – Aug. 2010). | 105 | None |
Joseph R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Senior Executive Vice President (July 2015 – present), Chief Financial Officer (July 2015 – May 2017), Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – May 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 105 | None |
Officers of the Trust | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
Marie A. Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm) (Mar. 2007 – Aug. 2010). |
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds (Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial Service Investment Management (May 2005 – Mar. 2011). |
Officers of the Trust (continued) | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Apr. 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (investment management firm) (May 2009 – Apr. 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (investment management firm) (Apr. 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, and is a director of the investment adviser for the trusts in the Fund Complex. Ms. Chandoha is an Interested Trustee because she owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
The Laudus Funds®
00200341
Table of Contents
Total Return for the 6 Months Ended September 30, 2017 | |
Laudus U.S. Large Cap Growth Fund (Ticker Symbol: LGILX) | 12.86% |
Russell 1000® Growth Index | 10.84% |
Performance Details | page 5 |
Minimum Initial Investment1 | $ 100 |
1 | Please see prospectus for further detail and eligibility requirements. |
President and CEO of
Charles Schwab Investment
Management, Inc. and the
fund covered in this report.
1 | Morningstar, “9 Partners for the Next Decade.” Laura Pavlenko Lutton and Greggory Warren, CFA: April 27, 2017. Morningstar looked collectively across four traits (differentiation, low costs, repeatable investment processes, and adaptable business models) to identify firms that they believe are representative of these trends. |
1 | The Conference Board is a global, independent business membership and research association working in the public interest. The Consumer Confidence Index® is based on the Consumer Confidence Survey® which reflects prevailing business conditions and likely developments for the months ahead. This monthly report details consumer attitudes and buying intentions, with data available by age, income, and region. |
Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
Laudus U.S. Large Cap Growth Fund (10/14/97)1 | 12.86% | 20.97% | 14.61% | 9.77% |
Russell 1000® Growth Index | 10.84% | 21.94% | 15.26% | 9.08% |
Fund Expense Ratio2: 0.76% |
Fund Characteristics | |
Number of Securities3 | 54 |
Weighted Average Market Cap (millions) | $226,816 |
Price/Earnings Ratio (P/E) | 35.12 |
Price/Book Ratio (P/B) | 5.45 |
Portfolio Turnover (One year trailing) | 64% |
Fund Overview | |
Fund | |
Inception Date | 10/14/1997 * |
Ticker Symbol | LGILX |
Cusip | 51855Q549 |
NAV | $20.45 |
* | Inception date is that of the fund’s predecessor fund, the Y Class of the UBS U.S. Large Cap Growth Fund. |
1 | The Laudus U.S. Large Cap Growth Fund was launched on 7/13/09. The fund was formerly known as UBS U.S. Large Cap Growth Fund. The performance and returns prior to 7/13/09 reflect the returns of UBS U.S. Large Cap Growth Fund, Class Y Shares. |
2 | As stated in the prospectus. Please see the prospectus for more information. For actual rates during the period, refer to the Financial Highlights section of the Financial Statements. |
3 | Short-term investments are not included. |
4 | This list is not a recommendation of any security by the investment adviser or subadviser. |
Expense Ratio (Annualized)1 | Beginning Account Value at 4/1/17 | Ending Account Value (Net of Expenses) at 9/30/17 | Expenses Paid During Period 4/1/17-9/30/172 | |
Laudus U.S. Large Cap Growth Fund | ||||
Actual Return | 0.77% | $1,000.00 | $1,128.60 | $4.11 |
Hypothetical 5% Return | 0.77% | $1,000.00 | $1,021.24 | $3.90 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. This ratio does not include certain non-routine expenses, such as custody out-of-pocket fee reimbursement. |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 183 days of the period, and divided by the 365 days of the fiscal year. |
4/1/17– 9/30/17* | 4/1/16– 3/31/17 | 4/1/15– 3/31/16 | 4/1/14– 3/31/15 | 4/1/13– 3/31/14 | 4/1/12– 3/31/13 | |
Per-Share Data | ||||||
Net asset value at beginning of period | $18.12 | $15.76 | $17.22 | $18.19 | $15.58 | $14.83 |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.01 | 0.00 2 | (0.01) | (0.01) | (0.02) | 0.02 |
Net realized and unrealized gains (losses) | 2.32 | 2.63 | (0.37) | 2.44 | 3.85 | 1.01 |
Total from investment operations | 2.33 | 2.63 | (0.38) | 2.43 | 3.83 | 1.03 |
Less distributions: | ||||||
Distributions from net investment income | — | — | — | — | — | (0.02) |
Distributions from net realized gains | — | (0.27) | (1.08) | (3.40) | (1.22) | (0.26) |
Total distributions | — | (0.27) | (1.08) | (3.40) | (1.22) | (0.28) |
Net asset value at end of period | $20.45 | $18.12 | $15.76 | $17.22 | $18.19 | $15.58 |
Total return | 12.86% 3 | 16.85% | (2.50%) | 14.99% | 24.81% | 7.09% |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.76% 4,5 | 0.76% | 0.75% | 0.77% | 0.78% 6 | 0.78% |
Gross operating expenses | 0.76% 4,5 | 0.76% | 0.75% | 0.77% | 0.78% | 0.82% |
Net investment income (loss) | 0.09% 4,5 | 0.03% | (0.04%) | (0.06%) | (0.12%) | 0.13% |
Portfolio turnover rate | 23% 3 | 73% | 82% | 102% | 124% | 76% |
Net assets, end of period (x 1,000) | $1,741,711 | $1,667,059 | $1,969,169 | $2,171,783 | $2,122,365 | $1,695,291 |
* | Unaudited. |
Security | Number of Shares | Value ($) |
Common Stock 98.4% of net assets | ||
Banks 5.0% | ||
Bank of America Corp. | 1,861,882 | 47,180,090 |
First Republic Bank | 278,031 | 29,043,118 |
Wells Fargo & Co. | 198,460 | 10,945,069 |
87,168,277 | ||
Capital Goods 3.6% | ||
Acuity Brands, Inc. | 154,091 | 26,392,707 |
Roper Technologies, Inc. | 72,391 | 17,619,969 |
TransDigm Group, Inc. | 71,215 | 18,206,115 |
62,218,791 | ||
Commercial & Professional Services 1.6% | ||
Equifax, Inc. | 267,096 | 28,309,505 |
Consumer Durables & Apparel 1.3% | ||
NIKE, Inc., Class B | 429,575 | 22,273,464 |
Consumer Services 1.4% | ||
Domino’s Pizza, Inc. | 124,460 | 24,711,533 |
Diversified Financials 2.1% | ||
Berkshire Hathaway, Inc., Class B * | 134,115 | 24,585,962 |
S&P Global, Inc. | 79,215 | 12,382,096 |
36,968,058 | ||
Energy 1.8% | ||
Halliburton Co. | 454,489 | 20,920,128 |
Pioneer Natural Resources Co. | 71,457 | 10,542,766 |
31,462,894 | ||
Food, Beverage & Tobacco 3.4% | ||
Constellation Brands, Inc., Class A | 241,596 | 48,186,322 |
Dr Pepper Snapple Group, Inc. | 133,775 | 11,835,074 |
60,021,396 | ||
Health Care Equipment & Services 7.8% | ||
Becton, Dickinson & Co. | 142,717 | 27,965,396 |
Boston Scientific Corp. * | 965,527 | 28,164,422 |
UnitedHealth Group, Inc. | 408,195 | 79,944,991 |
136,074,809 | ||
Materials 2.7% | ||
Monsanto Co. | 134,718 | 16,141,911 |
The Sherwin-Williams Co. | 63,550 | 22,753,442 |
Vulcan Materials Co. | 72,001 | 8,611,319 |
47,506,672 | ||
Security | Number of Shares | Value ($) |
Pharmaceuticals, Biotechnology & Life Sciences 8.8% | ||
Alexion Pharmaceuticals, Inc. * | 382,371 | 53,642,828 |
Biogen, Inc. * | 65,717 | 20,577,307 |
Celgene Corp. * | 150,552 | 21,953,493 |
Illumina, Inc. * | 110,006 | 21,913,195 |
Vertex Pharmaceuticals, Inc. * | 127,797 | 19,430,256 |
Zoetis, Inc. | 237,670 | 15,153,839 |
152,670,918 | ||
Real Estate 1.5% | ||
Equinix, Inc. | 39,450 | 17,606,535 |
SBA Communications Corp. * | 59,652 | 8,592,871 |
26,199,406 | ||
Retailing 16.5% | ||
Amazon.com, Inc. * | 128,338 | 123,377,737 |
Netflix, Inc. * | 241,249 | 43,750,506 |
The Home Depot, Inc. | 221,088 | 36,161,153 |
The Priceline Group, Inc. * | 30,488 | 55,818,040 |
Ulta Salon, Cosmetics & Fragrance, Inc. * | 126,731 | 28,648,810 |
287,756,246 | ||
Semiconductors & Semiconductor Equipment 5.2% | ||
ASML Holding N.V. | 159,176 | 27,250,931 |
Broadcom Ltd. | 117,231 | 28,433,207 |
NVIDIA Corp. | 126,363 | 22,589,913 |
Teradyne, Inc. | 319,230 | 11,904,087 |
90,178,138 | ||
Software & Services 33.6% | ||
Activision Blizzard, Inc. | 283,984 | 18,319,808 |
Adobe Systems, Inc. * | 224,099 | 33,431,089 |
Alibaba Group Holding Ltd. ADR * | 80,594 | 13,919,390 |
Alphabet, Inc., Class A * | 118,745 | 115,624,381 |
Autodesk, Inc. * | 331,529 | 37,217,446 |
Electronic Arts, Inc. * | 73,306 | 8,654,506 |
Facebook, Inc., Class A * | 379,490 | 64,843,456 |
Global Payments, Inc. | 174,978 | 16,628,159 |
MercadoLibre, Inc. | 52,934 | 13,706,201 |
Microsoft Corp. | 1,490,688 | 111,041,349 |
PayPal Holdings, Inc. * | 269,455 | 17,253,204 |
Tencent Holdings Ltd. | 1,354,100 | 59,202,167 |
Visa, Inc., Class A | 624,533 | 65,725,853 |
Zendesk, Inc. * | 343,704 | 10,005,224 |
585,572,233 | ||
Technology Hardware & Equipment 1.6% | ||
Apple, Inc. | 179,182 | 27,615,530 |
Security | Number of Shares | Value ($) |
Telecommunication Services 0.5% | ||
Zayo Group Holdings, Inc. * | 235,924 | 8,120,504 |
Total Common Stock | ||
(Cost $1,217,868,155) | 1,714,828,374 | |
Other Investment Company 2.5% of net assets | ||
Money Market Fund 2.5% | ||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.92% (a) | 43,339,226 | 43,339,226 |
Total Other Investment Company | ||
(Cost $43,339,226) | 43,339,226 |
* | Non-income producing security. |
(a) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |
Assets | |||||
Common Stock1 | $1,129,256,141 | $— | $— | $1,129,256,141 | |
Software & Services | 526,370,066 | 59,202,167 | — | 585,572,233 | |
Other Investment Company1 | 43,339,226 | — | — | 43,339,226 | |
Total | $1,698,965,433 | $59,202,167 | $— | $1,758,167,600 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in unaffiliated issuers, at value (cost $1,261,207,381) | $1,758,167,600 | |
Foreign currency, at value (cost $62) | 62 | |
Receivables: | ||
Fund shares sold | 3,612,823 | |
Dividends | 179,871 | |
Prepaid expenses | + | 42,337 |
Total assets | 1,762,002,693 | |
Liabilities | ||
Payables: | ||
Investments bought | 17,849,519 | |
Fund shares redeemed | 1,219,341 | |
Investment adviser fees | 912,586 | |
Accrued expenses | + | 310,446 |
Total liabilities | 20,291,892 | |
Net Assets | ||
Total assets | 1,762,002,693 | |
Total liabilities | – | 20,291,892 |
Net assets | $1,741,710,801 | |
Net Assets by Source | ||
Capital received from investors | 1,024,193,076 | |
Net investment income not yet distributed | 826,731 | |
Net realized capital gains | 219,730,775 | |
Net unrealized capital appreciation | 496,960,219 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$1,741,710,801 | 85,175,254 | $20.45 | ||
Investment Income | ||
Dividends (net of foreign withholding tax of $46,038) | $7,330,522 | |
Expenses | ||
Investment adviser fees | 5,525,613 | |
Sub-accounting and sub-transfer agent fees | 735,352 | |
Transfer agent fees | 154,188 | |
Accounting and administration fees | 38,202 | |
Registration fees | 35,039 | |
Shareholder reports | 31,330 | |
Custodian fees | 30,456 | |
Professional fees | 26,918 | |
Independent trustees’ fees | 25,824 | |
Interest expense | 369 | |
Custody out-of-pocket fee reimbursement | (126,477)* | |
Other expenses | + | 15,503 |
Total expenses | – | 6,492,317 |
Net investment income | 838,205 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on investments | 90,638,159 | |
Net realized losses on foreign currency transactions | + | (917) |
Net realized gains | 90,637,242 | |
Net change in unrealized appreciation (depreciation) on investments | + | 114,429,558 |
Net realized and unrealized gains | 205,066,800 | |
Increase in net assets resulting from operations | $205,905,005 |
* | See financial note 11 for additional information. |
Operations | ||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||
Net investment income | $838,205 | $535,085 | ||
Net realized gains | 90,637,242 | 167,376,920 | ||
Net change in unrealized appreciation (depreciation) | + | 114,429,558 | 108,507,795 | |
Increase in net assets from operations | 205,905,005 | 276,419,800 | ||
Distributions to Shareholders | ||||
Distributions from net realized gains | $— | ($28,536,521) |
Transactions in Fund Shares | ||||||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||||||
SHARES | VALUE | SHARES | VALUE | |||||
Shares sold | 7,420,083 | $145,530,764 | 12,060,635 | $201,863,903 | ||||
Shares reinvested | — | — | 1,481,964 | 24,659,880 | ||||
Shares redeemed | + | (14,256,806) | (276,784,304) | (46,461,188) | (776,516,242) | |||
Net transactions in fund shares | (6,836,723) | ($131,253,540) | (32,918,589) | ($549,992,459) | ||||
Shares Outstanding and Net Assets | ||||||||
4/1/17-9/30/17 | 4/1/16-3/31/17 | |||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
Beginning of period | 92,011,977 | $1,667,059,336 | 124,930,566 | $1,969,168,516 | ||||
Total increase or decrease | + | (6,836,723) | 74,651,465 | (32,918,589) | (302,109,180) | |||
End of period | 85,175,254 | $1,741,710,801 | 92,011,977 | $1,667,059,336 | ||||
Net investment income not yet distributed/Net investment loss | $826,731 | ($11,474) |
LAUDUS TRUST (ORGANIZED APRIL 1, 1988) | |
Laudus U.S. Large Cap Growth Fund | |
Laudus Mondrian International Equity Fund | |
Laudus Mondrian Emerging Markets Fund | |
Laudus Mondrian International Government Fixed Income Fund |
2. Significant Accounting Policies:
3. Risk Factors:
4. Affiliates and Affiliated Transactions:
Average daily net assets | |
First $500 million | 0.700% |
$500 million to $1 billion | 0.650% |
$1 billion to $1.5 billion | 0.600% |
$1.5 billion to $2 billion | 0.575% |
Over $2 billion | 0.550% |
Schwab Target 2020 Fund | 0.2% |
Schwab Target 2025 Fund | 0.5% |
Schwab Target 2030 Fund | 1.7% |
Schwab Target 2035 Fund | 1.1% |
Schwab Target 2040 Fund | 3.3% |
Schwab Target 2045 Fund | 0.5% |
Schwab Target 2050 Fund | 0.4% |
Schwab Target 2055 Fund | 0.3% |
Schwab Target 2060 Fund | 0.0%* |
Schwab Balanced Fund | 3.2% |
* | Less than 0.05% |
5. Shareholders Services:
6. Board of Trustees:
7. Borrowing from Banks:
8. Purchases and Sales/Maturities of Investment Securities:
Purchases of Securities | Sales/Maturities of Securities |
$385,639,770 | $537,257,398 |
10. Federal Income Taxes:
Tax cost | $1,264,676,236 |
Gross unrealized appreciation | $505,799,830 |
Gross unrealized depreciation | (12,308,466) |
Net unrealized appreciation (depreciation) | $493,491,364 |
11. Custody Out-of-Pocket Fee Reimbursement:
12. Subsequent Events:
1. | the nature, extent and quality of the services provided to the Fund under the Agreements, including the resources of CSIM and its affiliates, and BlackRock, dedicated to the Fund; |
2. | the Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | the Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to the Fund, including both direct and indirect benefits accruing to CSIM and its affiliates, as well as the profitability of BlackRock; and |
5. | the extent to which economies of scale would be realized as the Fund grows, and whether fee levels in the Agreements reflect those economies of scale for the benefit of Fund investors. |
Independent Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 105 | Director, PS Business Parks, Inc. (2005 – 2012) |
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Fellow, The Hoover Institution at Stanford University (public policy think tank) (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015). | 105 | Director, Gilead Sciences, Inc. (2005 – present) |
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant, LLC (wealth management) (Jan. 2008 – Apr. 2012). | 105 | None |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 105 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 105 | Director, KLA-Tencor Corporation (2008 – present) |
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Consultant, Patmore Management Consulting (management consulting) (2008 – present). | 105 | None |
Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2015) | Co-Chief Executive Officer, Kudu Investment Management, LLC (financial services) (Jan. 2015 – present); Partner, Kudu Advisors, LLC (financial services) (June 2008 – Jan. 2015); Advisor, Asset International, Inc. (publisher of financial services information) (Aug. 2008 – Jan. 2015). | 105 | None |
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 105 | Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 105 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present) Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Walter W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation (Oct. 2008 – present); President and Chief Executive Officer (Oct. 2008 – present), Director (May 2008 – present), Charles Schwab & Co., Inc.; Director, Charles Schwab Bank (Apr. 2006 – present); Director, Schwab Holdings, Inc. (May 2008 – present); and Director, Charles Schwab Investment Management, Inc. (July 2016 – present). | 105 | Director, The Charles Schwab Corporation (2008 – present) |
Marie A. Chandoha2 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm) (Mar. 2007 – Aug. 2010). | 105 | None |
Joseph R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Senior Executive Vice President (July 2015 – present), Chief Financial Officer (July 2015 – May 2017), Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – May 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 105 | None |
Officers of the Trust | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
Marie A. Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 �� present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm) (Mar. 2007 – Aug. 2010). |
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds (Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial Service Investment Management (May 2005 – Mar. 2011). |
Officers of the Trust (continued) | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Apr. 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (investment management firm) (May 2009 – Apr. 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (investment management firm) (Apr. 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, and is a director of the investment adviser for the trusts in the Fund Complex. Ms. Chandoha is an Interested Trustee because she owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
The Laudus Funds®
00200339
Table of Contents
Item 2: Code of Ethics.
Not applicable to this semi-annual report.
Item 3: Audit Committee Financial Expert.
Not applicable to this semi-annual report.
Item 4: Principal Accountant Fees and Services.
Not applicable to this semi-annual report.
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
The schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11: Controls and Procedures.
(a) | Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Chief Executive Officer, Marie Chandoha and Registrant’s Chief Financial Officer, Mark Fischer, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. |
Table of Contents
(b) | During the second fiscal quarter of the period covered by this report, there have been no changes in Registrant’s internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrant’s internal control over financial reporting. |
Item 12: Exhibits.
(a) | (1) | Code of ethics – not applicable to this semi-annual report. | ||
(2) | Separate certifications for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached. | |||
(3) | Not applicable. |
(b) | A certification for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSRS with the Commission. |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Laudus Trust
By: | /s/ Marie Chandoha | |
Marie Chandoha | ||
Chief Executive Officer | ||
Date: | November 15, 2017 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Marie Chandoha | |
Marie Chandoha | ||
Chief Executive Officer | ||
Date: | November 15, 2017 | |
By: | /s/ Mark Fischer | |
Mark Fischer | ||
Chief Financial Officer | ||
Date: | November 15, 2017 |