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: 811-8314
Schwab Annuity Portfolios
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
Marie Chandoha
Schwab Annuity Portfolios
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: December 31
Date of reporting period: June 30, 2015
Item 1: Report(s) to Shareholders.
Schwab MarketTrack Growth Portfolio II™ |
Semiannual report dated June 30, 2015 |
Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the portfolio. She was appointed portfolio manager of the portfolio in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Portfolio and inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
Portfolio: Schwab MarketTrack Growth Portfolio II (11/01/96) | 2.50% | 3.19% | 12.44% | 6.47% |
Growth Composite Index II3 | 2.65% | 3.87% | 12.90% | 6.95% |
S&P 500® Index | 1.23% | 7.42% | 17.34% | 7.89% |
Barclays U.S. Aggregate Bond Index | -0.10% | 1.86% | 3.35% | 4.44% |
Fund Category: Morningstar Aggressive Allocation | 1.95% | 1.69% | 11.75% | 6.00% |
Statistics | |
Number of Holdings | 10 |
Portfolio Turnover Rate5 | 2% |
Asset Class Weightings % of Investments6 | |
Equity Funds – Large-Cap | 39.8% |
Equity Funds – Small-Cap | 20.6% |
Equity Funds – International | 20.0% |
Fixed-Income Funds – Intermediate-Term Bond | 14.7% |
Short-Term Investments | 3.2% |
Money Market Funds | 1.7% |
Total | 100.0% |
Top Holdings % of Net Assets7,8 | |
Schwab S&P 500 Index Fund | 29.9% |
Schwab Small-Cap Index Fund | 20.6% |
Schwab International Index Fund | 20.0% |
Schwab Total Bond Market Fund | 14.6% |
Schwab 1000 Index Fund | 10.0% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1.7% |
Total | 96.8% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | Prior to April 30, 2015, the Growth Composite Index II was known as the Growth Composite Index. |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.18%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 4/29/17. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
5 | Not annualized. |
6 | The portfolio invests mainly in other Schwab Funds and/or Laudus Funds. |
7 | This list is not a recommendation of any security by the investment adviser. |
8 | The holdings listed exclude any temporary liquidity investments. |
The portfolio incurs ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/15 | Ending Account Value (Net of Expenses) at 6/30/15 | Expenses Paid During Period2 1/1/15–6/30/15 | ||
Schwab MarketTrack Growth Portfolio II | |||||
Actual Return | 0.50% | $1,000.00 | $1,025.00 | $2.51 | |
Hypothetical 5% Return | 0.50% | $1,000.00 | $1,022.32 | $2.51 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15– 6/30/15* | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 1/1/12– 12/31/12 | 1/1/11– 12/31/11 | 1/1/10– 12/31/10 | |
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 19.43 | 19.30 | 16.04 | 14.50 | 14.89 | 13.40 |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | (0.02) | 0.28 | 0.23 | 0.29 | 0.27 | 0.20 |
Net realized and unrealized gains (losses) | 0.51 | 0.77 | 3.48 | 1.64 | (0.40) | 1.62 |
Total from investment operations | 0.49 | 1.05 | 3.71 | 1.93 | (0.13) | 1.82 |
Less distributions: | ||||||
Distributions from net investment income | (0.31) | (0.26) | (0.30) | (0.39) | (0.26) | (0.33) |
Distributions from net realized gains | (0.49) | (0.66) | (0.15) | — | — | — |
Total distributions | (0.80) | (0.92) | (0.45) | (0.39) | (0.26) | (0.33) |
Net asset value at end of period | 19.12 | 19.43 | 19.30 | 16.04 | 14.50 | 14.89 |
Total return (%) | 2.50 2 | 5.46 | 23.56 | 13.46 | (1.01) | 13.62 |
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.50 3 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 |
Gross operating expenses | 0.73 3 | 0.72 | 0.80 | 0.83 | 0.80 | 0.77 |
Net investment income (loss) | (0.18) 3 | 1.45 | 1.28 | 1.85 | 1.78 | 1.41 |
Portfolio turnover rate | 2 2 | 14 | 13 | 8 | 20 | 22 |
Net assets, end of period ($ x 1,000,000) | 32 | 33 | 32 | 28 | 28 | 29 |
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
96.8% | Other Investment Companies | 19,596,498 | 30,681,368 |
3.3% | Short-Term Investments | 1,022,796 | 1,022,796 |
100.1% | Total Investments | 20,619,294 | 31,704,164 |
(0.1%) | Other Assets and Liabilities, Net | (15,887) | |
100.0% | Net Assets | 31,688,277 |
Security | Number of Shares | Value ($) |
Other Investment Companies 96.8% of net assets | ||
Equity Funds 80.5% | ||
International 20.0% | ||
Schwab International Index Fund (a) | 329,746 | 6,347,612 |
Large-Cap 39.9% | ||
Schwab 1000 Index Fund (a) | 59,241 | 3,157,531 |
Schwab S&P 500 Index Fund (a) | 291,049 | 9,470,739 |
12,628,270 | ||
Small-Cap 20.6% | ||
Schwab Small-Cap Index Fund (a) | 230,912 | 6,525,579 |
25,501,461 |
Security | Number of Shares | Value ($) |
Fixed-Income Fund 14.6% | ||
Intermediate-Term Bond 14.6% | ||
Schwab Total Bond Market Fund (a) | 490,904 | 4,643,949 |
Money Market Fund 1.7% | ||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.06% (a)(b) | 535,958 | 535,958 |
Total Other Investment Companies | ||
(Cost $19,596,498) | 30,681,368 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 3.3% of net assets | ||
Time Deposits 3.3% | ||
BNP Paribas | ||
0.03%, 07/01/15 | 316,386 | 316,386 |
DNB | ||
0.03%, 07/01/15 | 316,386 | 316,386 |
JPMorgan Chase Bank | ||
0.03%, 07/01/15 | 316,386 | 316,386 |
Sumitomo Mitsui Banking Corp. | ||
0.03%, 07/01/15 | 73,638 | 73,638 |
Total Short-Term Investments | ||
(Cost $1,022,796) | 1,022,796 |
(a) | Issuer is affiliated with the fund's adviser. |
(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 | |||||
Other Investment Companies1 | $30,681,368 | $— | $— | $30,681,368 | |||||
Short-Term Investments1 | — | 1,022,796 | — | 1,022,796 | |||||
Total | $30,681,368 | $1,022,796 | $— | $31,704,164 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $19,596,498) | $30,681,368 | |
Investments in unaffiliated issuers, (cost $1,022,796) | + | 1,022,796 |
Total investments, at value (cost $20,619,294) | 31,704,164 | |
Receivables: | ||
Dividends | 8,512 | |
Fund shares sold | + | 6,210 |
Total assets | 31,718,886 | |
Liabilities | ||
Payables: | ||
Investments bought | 8,494 | |
Investment adviser and administrator fees | 1,625 | |
Fund shares redeemed | 2,010 | |
Accrued expenses | + | 18,480 |
Total liabilities | 30,609 | |
Net Assets | ||
Total assets | 31,718,886 | |
Total liabilities | – | 30,609 |
Net assets | $31,688,277 | |
Net Assets by Source | ||
Capital received from investors | 21,158,652 | |
Distributions in excess of net investment income | (29,175) | |
Net realized capital losses | (526,070) | |
Net unrealized capital appreciation | 11,084,870 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$31,688,277 | 1,657,479 | $19.12 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $50,536 | |
Interest | + | 154 |
Total investment income | 50,690 | |
Expenses | ||
Investment adviser and administrator fees | 70,254 | |
Professional fees | 15,531 | |
Transfer agent fees | 10,439 | |
Shareholder reports | 10,277 | |
Independent trustees' fees | 4,717 | |
Portfolio accounting fees | 3,534 | |
Custodian fees | 1,480 | |
Other expenses | + | 408 |
Total expenses | 116,640 | |
Expense reduction by CSIM | – | 36,806 |
Net expenses | – | 79,834 |
Net investment loss | (29,144) | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 218,558 | |
Net realized gains on unaffiliated investments | + | 328 |
Net realized gains | 218,886 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | 592,235 |
Net realized and unrealized gains | 811,121 | |
Increase in net assets resulting from operations | $781,977 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income (loss) | ($29,144) | $459,869 | |
Net realized gains | 218,886 | 797,691 | |
Net change in unrealized appreciation (depreciation) | + | 592,235 | 447,536 |
Increase in net assets from operations | 781,977 | 1,705,096 | |
Distributions to Shareholders | |||
Distributions from net investment income | (487,490) | (416,505) | |
Distributions from net realized gains | + | (779,283) | (1,060,180) |
Total distributions | ($1,266,773) | ($1,476,685) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 29,911 | $587,879 | 192,517 | $3,699,470 | |
Shares reinvested | 66,254 | 1,266,773 | 76,512 | 1,476,685 | |
Shares redeemed | + | (115,300) | (2,264,500) | (226,925) | (4,364,176) |
Net transactions in fund shares | (19,135) | ($409,848) | 42,104 | $811,979 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 1,676,614 | $32,582,921 | 1,634,510 | $31,542,531 | |
Total increase or decrease | + | (19,135) | (894,644) | 42,104 | 1,040,390 |
End of period | 1,657,479 | $31,688,277 | 1,676,614 | $32,582,921 | |
Distributions in excess of net investment income/Net investment income not yet distributed | ($29,175) | $487,459 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Average Daily Net Assets | |
First $500 million | 0.44% |
Over $500 million | 0.39% |
Schwab International Index Fund | 0.2% |
Schwab 1000 Index Fund | 0.0%* |
Schwab S&P 500 Index Fund | 0.0%* |
Schwab Small-Cap Index Fund | 0.2% |
Schwab Total Bond Market Fund | 0.4% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.0%* |
* | Less than 0.05% |
Underlying Funds | Balance of Shares Held at 12/31/14 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/15 | Market Value at 06/30/15 | Realized Gains (Losses) 01/01/15 to 06/30/15 | Distributions Received* 01/01/15 to 06/30/15 | |||||||
Schwab International Index Fund | 349,591 | 6,273 | (26,118) | 329,746 | $6,347,612 | ($17,476) | $— | |||||||
Schwab 1000 Index Fund | 63,213 | 801 | (4,773) | 59,241 | 3,157,531 | $27,486 | — | |||||||
Schwab S&P 500 Index Fund | 308,110 | 4,052 | (21,113) | 291,049 | 9,470,739 | $180,713 | — | |||||||
Schwab Small-Cap Index Fund | 245,414 | 3,506 | (18,008) | 230,912 | 6,525,579 | $17,368 | — | |||||||
Schwab Total Bond Market Fund | 502,667 | 39,259 | (51,022) | 490,904 | 4,643,949 | 10,467 | 50,434 | |||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 535,869 | 89 | — | 535,958 | 535,958 | — | 102 | |||||||
Total | $30,681,368 | $218,558 | $50,536 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$761,525 | $2,417,000 |
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
1. | the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates 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; and |
5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement 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 |
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 and Laudus Institutional Trust since 2010) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director, Gilead Sciences, Inc. (2005 – present) |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Private Investor. | 74 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | 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) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
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, Laudus Trust and Laudus Institutional Trust since 2015) | Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
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 |
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 and Laudus Institutional Trust since 2010) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | 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 and Laudus Institutional Trust since 2010) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) | Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter W. Bettinger II2 1960 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 and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
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 Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; 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 (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 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. (May 2009 – April 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, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 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 (April 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (March 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 (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 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 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, Laudus Trust and Laudus Institutional Trust since 2005) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 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 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
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 Boards. |
Schwab Money Market Portfolio™ |
Semiannual report dated June 30, 2015 |
Lynn Paschen, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day management of the portfolio. Prior to joining CSIM in 2011, Ms. Paschen held a number of positions at American Century Investments. She most recently was a portfolio manager, and from 2000 to 2003 worked as a fixed income trader. She has managed money market funds since 2003. |
Portfolio Composition By Maturity2 | |
% of investments | |
1-7 Days | 42.9% |
8-30 Days | 19.7% |
31-60 Days | 14.5% |
61-90 Days | 6.3% |
91-180 Days | 15.1% |
More than 180 Days | 1.5% |
Total | 100.0% |
Statistics | |
Weighted Average Maturity3 | 39 Days |
Credit Quality Of Holdings4 % of portfolio | 100% Tier 1 |
Portfolio Composition by Security Type | |
% of investments | |
Government Agency Debt | 52.1% |
Repurchase Agreement | |
Treasury | 42.8% |
Treasury Debt | 5.0% |
Other Investment Company | 0.1% |
Total | 100.0% |
1 | The investment adviser and its affiliates may recapture expenses or fees they waived under a voluntary yield waiver until the third anniversary of the end of the fiscal year in which such waiver occurs, subject to certain limitations. For more information on the potential impact of such recapture on future yields, see financial note 4. |
2 | As shown in the Portfolio Holdings section of the shareholder report. |
3 | Money funds must maintain a dollar-weighted average maturity of no longer than 60 days and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months). |
4 | Tier 1 securities are rated in one of the two highest rating categories by two nationally recognized statistical rating organizations (“NRSROs”), or by one if only one NRSRO has rated the securities, or, if unrated, determined to be of comparable quality by CSIM pursuant to guidelines adopted by the Board of Trustees. Money market fund shares and U.S. government securities are also Tier 1 securities. The portfolio uses NRSRO credit ratings from Standard & Poor’s Corp., Moody’s Investors Service, Fitch Ratings, and/or DBRS. The portfolio may use different ratings provided by other rating agencies for purposes of determining compliance with the portfolio’s investment policies. The portfolio itself has not been rated by an independent credit rating agency. |
Schwab Money Market Portfolio | |
Seven-Day Yield | 0.01% |
Seven-Day Effective Yield | 0.01% |
1 | Portfolio yields do not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the yields would be less than those shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
2 | The investment adviser and its affiliates have voluntarily waived expenses to maintain a positive net yield for the portfolio (voluntary yield waiver). Without the voluntary yield waiver, the portfolio’s yield would have been lower. The voluntary yield waiver added 0.39% to the seven-day yield. Please see financial note 4 for additional details. |
The portfolio incurs ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/15 | Ending Account Value (Net of Expenses) at 6/30/15 | Expenses Paid During Period2 1/1/15–6/30/15 | |
Schwab Money Market Portfolio | ||||
Actual Return | 0.09% | $1,000.00 | $1,000.10 | $0.45 |
Hypothetical 5% Return | 0.09% | $1,000.00 | $1,024.35 | $0.45 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15– 6/30/15* | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 1/1/12– 12/31/12 | 1/1/11– 12/31/11 | 1/1/10– 12/31/10 | |
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.00 1,2 | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 |
Net realized and unrealized gains (losses) | 0.00 2 | 0.00 2 | 0.00 2,3 | 0.00 2 | (0.00) 2 | (0.00) 2 |
Total from investment operations | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 |
Less distributions: | ||||||
Distributions from net investment income | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 |
Distributions from net realized gains | — | — | — | — | — | (0.00) 2 |
Total distributions | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 | (0.00) 2 |
Net asset value at end of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Total return (%) | 0.01 4 | 0.01 | 0.01 | 0.01 | 0.01 | 0.05 |
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.09 5,6 | 0.07 6 | 0.08 6 | 0.12 6 | 0.10 6 | 0.18 6 |
Gross operating expenses | 0.51 5 | 0.49 | 0.52 | 0.49 | 0.45 | 0.46 |
Net investment income (loss) | 0.01 5 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 |
Net assets, end of period ($ x 1,000,000) | 100 | 117 | 106 | 116 | 144 | 149 |
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
52.5% | Fixed-Rate Obligations | 52,446,661 | 52,446,661 |
4.7% | Variable-Rate Obligations | 4,702,122 | 4,702,122 |
0.0% | Other Investment Company | 45,600 | 45,600 |
42.9% | Repurchase Agreements | 42,830,254 | 42,830,254 |
100.1% | Total Investments | 100,024,637 | 100,024,637 |
(0.1%) | Other Assets and Liabilities, Net | (130,934) | |
100.0% | Net Assets | 99,893,703 |
Issuer | Footnotes | Rate | Effective Maturity | Maturity Date | Face Amount ($) | Value ($) | ||||||||
Fixed-Rate Obligations 52.5% of net assets | ||||||||||||||
Government Agency Debt 47.5% | ||||||||||||||
Fannie Mae | 0.50% | 09/28/15 | 3,000,000 | 3,002,444 | ||||||||||
Farm Credit System | 4.88% | 12/16/15 | 1,500,000 | 1,531,942 | ||||||||||
3.68% | 01/12/16 | 1,525,000 | 1,552,788 | |||||||||||
Federal Home Loan Bank | 0.09% | 07/17/15 | 10,000,000 | 9,999,622 | ||||||||||
0.14% | 08/21/15 | 8,500,000 | 8,498,326 | |||||||||||
0.09% | 08/25/15 | 6,000,000 | 5,999,894 | |||||||||||
0.20% | 09/29/15 | 3,800,000 | 3,800,823 | |||||||||||
0.12% | 10/21/15 | 5,000,000 | 4,998,133 | |||||||||||
0.24% | 12/18/15 | 4,800,000 | 4,801,278 | |||||||||||
Freddie Mac | 1.75% | 09/10/15 | 3,251,000 | 3,261,203 | ||||||||||
47,446,453 | ||||||||||||||
Treasury Debt 5.0% | ||||||||||||||
United States Treasury Department | 0.25% | 07/15/15 | 5,000,000 | 5,000,208 | ||||||||||
Total Fixed-Rate Obligations | ||||||||||||||
(Cost $52,446,661) | 52,446,661 | |||||||||||||
Variable-Rate Obligations 4.7% of net assets | ||||||||||||||
Government Agency Debt 4.7% | ||||||||||||||
Fannie Mae | 0.20% | 07/16/15 | 08/12/16 | 2,100,000 | 2,100,942 | |||||||||
0.21% | 07/15/15 | 08/15/16 | 2,600,000 | 2,601,180 | ||||||||||
Total Variable-Rate Obligations | ||||||||||||||
(Cost $4,702,122) | 4,702,122 |
Security | Footnotes | Rate | Number of Shares | Value ($) | ||||||||||
Other Investment Company 0.0% of net assets | ||||||||||||||
Money Market Fund 0.0% | ||||||||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | (a) | 0.00% | n/a | n/a | 45,600 | 45,600 | ||||||||
Total Other Investment Company | ||||||||||||||
(Cost $45,600) | 45,600 | |||||||||||||
Issuer | Footnotes | Rate | Effective Maturity | Maturity Date | Maturity Amount ($) | Value ($) | ||||||||
Repurchase Agreements 42.9% of net assets | ||||||||||||||
Treasury Repurchase Agreements 42.9% | ||||||||||||||
Barclays Capital, Inc | ||||||||||||||
Issued 06/30/15, repurchase date 07/01/15 (Collateralized by U.S. Treasury Securities valued at $15,300,071, 0.50% - 8.75%, due 02/15/16 - 08/15/44) | 0.10% | 07/01/15 | 15,000,042 | 15,000,000 | ||||||||||
BNP Paribas Securities Corp | ||||||||||||||
Issued 06/30/15, repurchase date 07/01/15 (Collateralized by U.S. Treasury Securities valued at $10,200,020, 0.00% - 2.50%, due 07/23/15 - 02/15/45) | 0.09% | 07/01/15 | 10,000,025 | 10,000,000 | ||||||||||
JP Morgan Securities, LLC | ||||||||||||||
Issued 06/30/15, repurchase date 07/01/15 (Collateralized by U.S. Treasury Securities valued at $18,186,875, 2.00% - 2.63%, due 07/31/20 - 11/15/20) | 0.12% | 07/01/15 | 17,830,313 | 17,830,254 | ||||||||||
Total Repurchase Agreements | ||||||||||||||
(Cost $42,830,254) | 42,830,254 |
(a) | 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 | |||||
Fixed-Rate Obligations1 | $— | $52,446,661 | $— | $52,446,661 | |||||
Variable-Rate Obligations1 | — | 4,702,122 | — | 4,702,122 | |||||
Other Investment Companies1 | 45,600 | — | — | 45,600 | |||||
Repurchase Agreements1 | — | 42,830,254 | — | 42,830,254 | |||||
Total | $45,600 | $99,979,037 | $— | $100,024,637 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments, at cost and value | $57,194,383 | |
Repurchase agreements, at cost and value | + | 42,830,254 |
Total investments, at cost and value (Note 2a) | 100,024,637 | |
Receivables: | ||
Fund shares sold | 1,004,408 | |
Interest | 64,153 | |
Receivable from investment adviser | + | 1,206 |
Total assets | 101,094,404 | |
Liabilities | ||
Payables: | ||
Fund shares redeemed | 1,179,187 | |
Distributions to shareholders | 404 | |
Accrued expenses | + | 21,110 |
Total liabilities | 1,200,701 | |
Net Assets | ||
Total assets | 101,094,404 | |
Total liabilities | – | 1,200,701 |
Net assets | $99,893,703 | |
Net Assets by Source | ||
Capital received from investors | 99,847,453 | |
Net realized capital gains | 46,250 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$99,893,703 | 99,894,278 | $1.00 | ||
Investment Income | ||
Interest | $51,477 | |
Expenses | ||
Investment adviser and administrator fees | 172,995 | |
Portfolio accounting fees | 21,878 | |
Professional fees | 19,160 | |
Shareholder reports | 15,291 | |
Transfer agent fees | 10,992 | |
Independent trustees' fees | 7,420 | |
Custodian fees | 5,046 | |
Other expenses | + | 1,028 |
Total expenses | 253,810 | |
Expense reduction by CSIM and its affiliates | – | 207,276 |
Net expenses | – | 46,534 |
Net investment income | 4,943 | |
Realized Gains (Losses) | ||
Net realized gains on investments | 70 | |
Increase in net assets resulting from operations | $5,013 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $4,943 | $11,324 | |
Net realized gains | + | 70 | 579 |
Increase in net assets from operations | 5,013 | 11,903 | |
Distributions to Shareholders | |||
Distributions from net investment income | ($4,943) | ($11,324) | |
Transactions in Fund Shares* | |||
Shares sold | 41,935,211 | 158,550,893 | |
Shares reinvested | 4,538 | 11,321 | |
Shares redeemed | + | (58,730,549) | (147,670,781) |
Net transactions in fund shares | (16,790,800) | 10,891,433 | |
Net Assets | |||
Beginning of period | 116,684,433 | 105,792,421 | |
Total increase or decrease | + | (16,790,730) | 10,892,012 |
End of period | $99,893,703 | $116,684,433 |
* | Transactions took place at $1.00 per share; figures for share quantities are the same as for dollars. |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Average Daily Net Assets | |
First $1 billion | 0.35% |
More than $1 billion but not exceeding $10 billion | 0.32% |
More than $10 billion but not exceeding $20 billion | 0.30% |
More than $20 billion but not exceeding $40 billion | 0.27% |
Over $40 billion | 0.25% |
Expiration Date | ||||||||
December 31, 2015 | December 31, 2016 | December 31, 2017 | December 31, 2018 | Total | ||||
$464,329 | $472,070 | $450,302 | $195,342 | $1,582,043 |
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
1. | the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates 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; and |
5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement 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 |
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 and Laudus Institutional Trust since 2010) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director, Gilead Sciences, Inc. (2005 – present) |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Private Investor. | 74 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | 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) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
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, Laudus Trust and Laudus Institutional Trust since 2015) | Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
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 |
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 and Laudus Institutional Trust since 2010) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | 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 and Laudus Institutional Trust since 2010) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) | Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter W. Bettinger II2 1960 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 and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
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 Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; 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 (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 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. (May 2009 – April 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, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 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 (April 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (March 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 (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 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 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, Laudus Trust and Laudus Institutional Trust since 2005) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 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 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
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 Boards. |
Schwab S&P 500 Index Portfolio |
Semiannual report dated June 30, 2015 |
Agnes Hong, CFA, Vice President and Head of Passive Equity Strategies, leads the portfolio management teams of Schwab’s index mutual funds and equity ETFs. She also has overall responsibility for all aspects of the management of the portfolio. Prior to joining CSIM in 2009, Ms. Hong spent five years as a portfolio manager at Barclays Global Investors (subsequently acquired by BlackRock), where she managed institutional index funds and quantitative active funds. Prior to that, Ms. Hong worked in management consulting and product management, servicing global financial services clients. |
Ferian Juwono, CFA, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of the portfolio. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent over three years as a portfolio manager, managing equity index funds for institutional clients, and nearly two years as a senior business analyst. Prior to that, Mr. Juwono worked for over four years as a senior financial analyst with Union Bank of California. |
David Rios, Portfolio Manager, is responsible for the day-to-day co-management of the portfolio. He joined CSIM in 2008 and became a Portfolio Manager in September 2014. Prior to this role, Mr. Rios served as an Associate Portfolio Manager on the Schwab Equity Index Strategies team for four years. His first role with CSIM was as a trade operation specialist. He also previously worked as a senior fund accountant at Investors Bank & Trust (subsequently acquired by State Street Corporation). |
Portfolio and inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
Portfolio: Schwab S&P 500 Index Portfolio (11/01/96) | 1.14% | 7.20% | 17.05% | 7.74% |
S&P 500® Index | 1.23% | 7.42% | 17.34% | 7.89% |
Fund Category: Morningstar Large-Cap Blend | 1.08% | 5.49% | 15.84% | 7.26% |
Statistics | |
Number of Holdings | 504 |
Weighted Average Market Cap ($ x 1,000,000) | $134,659 |
Price/Earnings Ratio (P/E) | 20.8 |
Price/Book Ratio (P/B) | 2.6 |
Portfolio Turnover Rate4 | 2% |
Sector Weightings % of Investments | |
Information Technology | 19.5% |
Financials | 16.5% |
Health Care | 15.3% |
Consumer Discretionary | 12.7% |
Industrials | 10.1% |
Consumer Staples | 9.3% |
Energy | 7.8% |
Materials | 3.1% |
Utilities | 2.8% |
Telecommunication Services | 2.3% |
Other | 0.6% |
Total | 100.0% |
Top Equity Holdings % of Net Assets5 | |
Apple, Inc. | 3.9% |
Microsoft Corp. | 1.9% |
Exxon Mobil Corp. | 1.9% |
Johnson & Johnson | 1.5% |
General Electric Co. | 1.5% |
Wells Fargo & Co. | 1.4% |
JPMorgan Chase & Co. | 1.4% |
Berkshire Hathaway, Inc., Class B | 1.4% |
The Procter & Gamble Co. | 1.2% |
Pfizer, Inc. | 1.1% |
Total | 17.2% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | As stated in the prospectus. Reflects the total annual operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
4 | Not annualized. |
5 | This list is not a recommendation of any security by the investment adviser. |
The portfolio incurs ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/15 | Ending Account Value (Net of Expenses) at 6/30/15 | Expenses Paid During Period2 1/1/15–6/30/15 | |
Schwab S&P 500 Index Portfolio | ||||
Actual Return | 0.23% | $1,000.00 | $1,011.40 | $1.15 |
Hypothetical 5% Return | 0.23% | $1,000.00 | $1,023.66 | $1.15 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15– 6/30/15* | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 1/1/12– 12/31/12 | 1/1/11– 12/31/11 | 1/1/10– 12/31/10 | |
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 30.21 | 27.03 | 20.82 | 18.30 | 18.27 | 16.24 |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.31 1 | 0.48 | 0.42 | 0.41 | 0.34 | 0.38 |
Net realized and unrealized gains (losses) | 0.03 | 3.12 | 6.19 | 2.45 | 0.02 2 | 2.00 |
Total from investment operations | 0.34 | 3.60 | 6.61 | 2.86 | 0.36 | 2.38 |
Less distributions: | ||||||
Distributions from net investment income | (0.47) | (0.42) | (0.40) | (0.34) | (0.33) | (0.35) |
Net asset value at end of period | 30.08 | 30.21 | 27.03 | 20.82 | 18.30 | 18.27 |
Total return (%) | 1.14 3 | 13.41 | 32.06 | 15.74 | 1.89 | 14.68 |
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.23 4 | 0.22 | 0.24 | 0.28 | 0.27 | 0.28 |
Gross operating expenses | 0.24 4 | 0.23 | 0.26 | 0.29 | 0.28 | 0.30 |
Net investment income (loss) | 2.02 4 | 1.79 | 1.84 | 2.03 | 1.82 | 1.79 |
Portfolio turnover rate | 2 3 | 2 | 2 | 4 | 4 | 3 |
Net assets, end of period ($ x 1,000,000) | 237 | 229 | 193 | 139 | 122 | 123 |
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
99.6% | Common Stock | 118,837,380 | 236,171,633 |
0.1% | Other Investment Companies | 221,118 | 221,118 |
0.4% | Short-Term Investments | 1,084,747 | 1,084,747 |
100.1% | Total Investments | 120,143,245 | 237,477,498 |
(0.1%) | Other Assets and Liabilities, Net | (267,466) | |
100.0% | Net Assets | 237,210,032 |
Security | Number of Shares | Value ($) |
Common Stock 99.6% of net assets | ||
Automobiles & Components 1.1% | ||
BorgWarner, Inc. | 2,800 | 159,152 |
Delphi Automotive plc | 3,858 | 328,277 |
Ford Motor Co. | 51,702 | 776,047 |
General Motors Co. | 17,695 | 589,774 |
Harley-Davidson, Inc. | 2,702 | 152,258 |
Johnson Controls, Inc. | 8,594 | 425,661 |
The Goodyear Tire & Rubber Co. | 3,262 | 98,349 |
2,529,518 | ||
Banks 6.2% | ||
Bank of America Corp. | 137,164 | 2,334,531 |
BB&T Corp. | 9,192 | 370,529 |
Citigroup, Inc. | 39,376 | 2,175,130 |
Comerica, Inc. | 2,130 | 109,312 |
Fifth Third Bancorp | 10,405 | 216,632 |
Hudson City Bancorp, Inc. | 6,250 | 61,750 |
Huntington Bancshares, Inc. | 10,456 | 118,257 |
JPMorgan Chase & Co. | 48,058 | 3,256,410 |
KeyCorp | 11,200 | 168,224 |
M&T Bank Corp. | 1,871 | 233,744 |
People's United Financial, Inc. | 3,700 | 59,977 |
Regions Financial Corp. | 17,127 | 177,436 |
SunTrust Banks, Inc. | 6,600 | 283,932 |
The PNC Financial Services Group, Inc. | 6,620 | 633,203 |
U.S. Bancorp | 22,954 | 996,204 |
Wells Fargo & Co. | 60,515 | 3,403,364 |
Zions Bancorp | 2,408 | 76,418 |
14,675,053 |
Security | Number of Shares | Value ($) |
Capital Goods 7.4% | ||
3M Co. | 8,351 | 1,288,559 |
Allegion plc | 1,233 | 74,153 |
AMETEK, Inc. | 3,009 | 164,833 |
Caterpillar, Inc. | 7,931 | 672,707 |
Cummins, Inc. | 2,179 | 285,863 |
Danaher Corp. | 7,907 | 676,760 |
Deere & Co. | 4,357 | 422,847 |
Dover Corp. | 2,100 | 147,378 |
Eaton Corp. plc | 6,134 | 413,984 |
Emerson Electric Co. | 9,011 | 499,480 |
Fastenal Co. | 3,452 | 145,605 |
Flowserve Corp. | 1,700 | 89,522 |
Fluor Corp. | 2,000 | 106,020 |
General Dynamics Corp. | 4,045 | 573,136 |
General Electric Co. | 130,529 | 3,468,156 |
Honeywell International, Inc. | 9,969 | 1,016,539 |
Illinois Tool Works, Inc. | 4,173 | 383,040 |
Ingersoll-Rand plc | 3,300 | 222,486 |
Jacobs Engineering Group, Inc. * | 1,583 | 64,301 |
Joy Global, Inc. | 1,300 | 47,060 |
L-3 Communications Holdings, Inc. | 1,100 | 124,718 |
Lockheed Martin Corp. | 3,430 | 637,637 |
Masco Corp. | 3,821 | 101,906 |
Northrop Grumman Corp. | 2,554 | 405,141 |
PACCAR, Inc. | 4,630 | 295,440 |
Pall Corp. | 1,325 | 164,896 |
Parker-Hannifin Corp. | 1,835 | 213,466 |
Pentair plc | 2,399 | 164,931 |
Precision Castparts Corp. | 1,791 | 357,967 |
Quanta Services, Inc. * | 2,597 | 74,846 |
Raytheon Co. | 4,013 | 383,964 |
Rockwell Automation, Inc. | 1,785 | 222,482 |
Rockwell Collins, Inc. | 1,600 | 147,760 |
Roper Technologies, Inc. | 1,279 | 220,576 |
Snap-on, Inc. | 788 | 125,489 |
Stanley Black & Decker, Inc. | 2,023 | 212,900 |
Textron, Inc. | 3,674 | 163,971 |
The Boeing Co. | 8,319 | 1,154,012 |
United Rentals, Inc. * | 1,200 | 105,144 |
United Technologies Corp. | 10,754 | 1,192,941 |
W.W. Grainger, Inc. | 842 | 199,259 |
Xylem, Inc. | 2,295 | 85,076 |
17,516,951 | ||
Commercial & Professional Supplies 0.6% | ||
Cintas Corp. | 1,357 | 114,789 |
Equifax, Inc. | 1,542 | 149,713 |
Nielsen N.V. | 4,983 | 223,089 |
Pitney Bowes, Inc. | 2,900 | 60,349 |
Republic Services, Inc. | 3,136 | 122,837 |
Robert Half International, Inc. | 1,750 | 97,125 |
Stericycle, Inc. * | 1,100 | 147,301 |
The ADT Corp. | 2,300 | 77,211 |
The Dun & Bradstreet Corp. | 500 | 61,000 |
Tyco International plc | 5,313 | 204,444 |
Waste Management, Inc. | 5,655 | 262,109 |
1,519,967 |
Security | Number of Shares | Value ($) |
Consumer Durables & Apparel 1.4% | ||
Coach, Inc. | 3,394 | 117,466 |
D.R. Horton, Inc. | 4,522 | 123,722 |
Fossil Group, Inc. * | 600 | 41,616 |
Garmin Ltd. | 1,500 | 65,895 |
Hanesbrands, Inc. | 5,646 | 188,125 |
Harman International Industries, Inc. | 900 | 107,046 |
Hasbro, Inc. | 1,475 | 110,315 |
Leggett & Platt, Inc. | 1,900 | 92,492 |
Lennar Corp., Class A | 2,300 | 117,392 |
Mattel, Inc. | 4,300 | 110,467 |
Michael Kors Holdings Ltd. * | 2,700 | 113,643 |
Mohawk Industries, Inc. * | 800 | 152,720 |
Newell Rubbermaid, Inc. | 3,424 | 140,761 |
NIKE, Inc., Class B | 8,957 | 967,535 |
PulteGroup, Inc. | 4,442 | 89,506 |
PVH Corp. | 1,086 | 125,107 |
Ralph Lauren Corp. | 742 | 98,211 |
Under Armour, Inc., Class A * | 2,252 | 187,907 |
VF Corp. | 4,440 | 309,646 |
Whirlpool Corp. | 1,033 | 178,761 |
3,438,333 | ||
Consumer Services 1.8% | ||
Carnival Corp. | 5,922 | 292,488 |
Chipotle Mexican Grill, Inc. * | 409 | 247,441 |
Darden Restaurants, Inc. | 1,591 | 113,088 |
H&R Block, Inc. | 3,338 | 98,972 |
Marriott International, Inc., Class A | 2,657 | 197,654 |
McDonald's Corp. | 12,482 | 1,186,664 |
Royal Caribbean Cruises Ltd. | 2,100 | 165,249 |
Starbucks Corp. | 19,088 | 1,023,403 |
Starwood Hotels & Resorts Worldwide, Inc. | 2,161 | 175,235 |
Wyndham Worldwide Corp. | 1,580 | 129,418 |
Wynn Resorts Ltd. | 1,057 | 104,294 |
Yum! Brands, Inc. | 5,500 | 495,440 |
4,229,346 | ||
Diversified Financials 5.1% | ||
Affiliated Managers Group, Inc. * | 700 | 153,020 |
American Express Co. | 11,372 | 883,832 |
Ameriprise Financial, Inc. | 2,363 | 295,209 |
Berkshire Hathaway, Inc., Class B * | 23,516 | 3,200,763 |
BlackRock, Inc. | 1,650 | 570,867 |
Capital One Financial Corp. | 7,080 | 622,828 |
CME Group, Inc. | 4,131 | 384,431 |
Discover Financial Services | 5,890 | 339,382 |
E*TRADE Financial Corp. * | 3,576 | 107,101 |
Franklin Resources, Inc. | 4,900 | 240,247 |
Intercontinental Exchange, Inc. | 1,459 | 326,247 |
Invesco Ltd. | 5,704 | 213,843 |
Legg Mason, Inc. | 1,300 | 66,989 |
Leucadia National Corp. | 3,939 | 95,639 |
McGraw Hill Financial, Inc. | 3,530 | 354,588 |
Moody's Corp. | 2,423 | 261,587 |
Morgan Stanley | 20,099 | 779,640 |
Navient Corp. | 5,000 | 91,050 |
Northern Trust Corp. | 2,831 | 216,458 |
Security | Number of Shares | Value ($) |
State Street Corp. | 5,400 | 415,800 |
T. Rowe Price Group, Inc. | 3,523 | 273,843 |
The Bank of New York Mellon Corp. | 14,278 | 599,248 |
The Charles Schwab Corp. (a) | 14,949 | 488,085 |
The Goldman Sachs Group, Inc. | 5,170 | 1,079,444 |
The NASDAQ OMX Group, Inc. | 1,400 | 68,334 |
12,128,475 | ||
Energy 7.8% | ||
Anadarko Petroleum Corp. | 6,483 | 506,063 |
Apache Corp. | 4,808 | 277,085 |
Baker Hughes, Inc. | 5,563 | 343,237 |
Cabot Oil & Gas Corp. | 5,120 | 161,485 |
Cameron International Corp. * | 2,413 | 126,369 |
Chesapeake Energy Corp. (b) | 6,356 | 70,996 |
Chevron Corp. | 24,416 | 2,355,411 |
Cimarex Energy Co. | 1,151 | 126,967 |
ConocoPhillips | 16,205 | 995,149 |
CONSOL Energy, Inc. | 3,119 | 67,807 |
Devon Energy Corp. | 5,032 | 299,354 |
Diamond Offshore Drilling, Inc. (b) | 800 | 20,648 |
Ensco plc, Class A | 3,000 | 66,810 |
EOG Resources, Inc. | 7,075 | 619,416 |
EQT Corp. | 1,900 | 154,546 |
Exxon Mobil Corp. | 54,192 | 4,508,774 |
FMC Technologies, Inc. * | 3,246 | 134,677 |
Halliburton Co. | 10,795 | 464,941 |
Helmerich & Payne, Inc. | 1,300 | 91,546 |
Hess Corp. | 3,233 | 216,223 |
Kinder Morgan, Inc. | 22,200 | 852,258 |
Marathon Oil Corp. | 8,768 | 232,703 |
Marathon Petroleum Corp. | 7,064 | 369,518 |
Murphy Oil Corp. | 2,032 | 84,470 |
National Oilwell Varco, Inc. | 5,001 | 241,448 |
Newfield Exploration Co. * | 2,141 | 77,333 |
Noble Corp., plc | 2,900 | 44,631 |
Noble Energy, Inc. | 5,212 | 222,448 |
Occidental Petroleum Corp. | 9,897 | 769,690 |
ONEOK, Inc. | 2,600 | 102,648 |
Phillips 66 | 7,158 | 576,648 |
Pioneer Natural Resources Co. | 1,885 | 261,431 |
Range Resources Corp. | 2,214 | 109,327 |
Schlumberger Ltd. | 16,424 | 1,415,585 |
Southwestern Energy Co. * | 4,973 | 113,036 |
Spectra Energy Corp. | 8,748 | 285,185 |
Tesoro Corp. | 1,600 | 135,056 |
The Williams Cos., Inc. | 8,890 | 510,197 |
Transocean Ltd. (b) | 4,624 | 74,539 |
Valero Energy Corp. | 6,665 | 417,229 |
18,502,884 | ||
Food & Staples Retailing 2.4% | ||
Costco Wholesale Corp. | 5,775 | 779,972 |
CVS Health Corp. | 14,519 | 1,522,753 |
Sysco Corp. | 7,764 | 280,280 |
The Kroger Co. | 6,455 | 468,052 |
Wal-Mart Stores, Inc. | 20,582 | 1,459,881 |
Security | Number of Shares | Value ($) |
Walgreens Boots Alliance, Inc. | 11,121 | 939,057 |
Whole Foods Market, Inc. | 4,500 | 177,480 |
5,627,475 | ||
Food, Beverage & Tobacco 5.1% | ||
Altria Group, Inc. | 25,206 | 1,232,826 |
Archer-Daniels-Midland Co. | 8,235 | 397,092 |
Brown-Forman Corp., Class B | 2,127 | 213,083 |
Campbell Soup Co. | 2,245 | 106,974 |
Coca-Cola Enterprises, Inc. | 2,700 | 117,288 |
ConAgra Foods, Inc. | 5,778 | 252,614 |
Constellation Brands, Inc., Class A | 2,220 | 257,564 |
Dr Pepper Snapple Group, Inc. | 2,500 | 182,250 |
General Mills, Inc. | 7,758 | 432,276 |
Hormel Foods Corp. | 1,704 | 96,055 |
Kellogg Co. | 3,200 | 200,640 |
Keurig Green Mountain, Inc. | 1,600 | 122,608 |
Kraft Foods Group, Inc. | 7,536 | 641,615 |
McCormick & Co., Inc. - Non Voting Shares | 1,600 | 129,520 |
Mead Johnson Nutrition Co. | 2,600 | 234,572 |
Molson Coors Brewing Co., Class B | 1,978 | 138,084 |
Mondelez International, Inc., Class A | 21,496 | 884,345 |
Monster Beverage Corp. * | 1,900 | 254,638 |
PepsiCo, Inc. | 19,092 | 1,782,047 |
Philip Morris International, Inc. | 20,071 | 1,609,092 |
Reynolds American, Inc. | 5,247 | 391,741 |
The Coca-Cola Co. | 50,645 | 1,986,803 |
The Hershey Co. | 1,844 | 163,803 |
The JM Smucker Co. | 1,246 | 135,079 |
Tyson Foods, Inc., Class A | 3,808 | 162,335 |
12,124,944 | ||
Health Care Equipment & Services 5.2% | ||
Abbott Laboratories | 19,707 | 967,220 |
Aetna, Inc. | 4,582 | 584,022 |
AmerisourceBergen Corp. | 2,660 | 282,864 |
Anthem, Inc. | 3,436 | 563,985 |
Baxter International, Inc. | 6,927 | 484,405 |
Becton, Dickinson & Co. | 2,687 | 380,614 |
Boston Scientific Corp. * | 16,977 | 300,493 |
C.R. Bard, Inc. | 920 | 157,044 |
Cardinal Health, Inc. | 4,274 | 357,520 |
Cerner Corp. * | 4,000 | 276,240 |
Cigna Corp. | 3,391 | 549,342 |
DaVita HealthCare Partners, Inc. * | 2,230 | 177,218 |
DENTSPLY International, Inc. | 1,800 | 92,790 |
Edwards Lifesciences Corp. * | 1,403 | 199,829 |
Express Scripts Holding Co. * | 9,437 | 839,327 |
HCA Holdings, Inc. * | 3,800 | 344,736 |
Henry Schein, Inc. * | 1,100 | 156,332 |
Humana, Inc. | 1,980 | 378,734 |
Intuitive Surgical, Inc. * | 441 | 213,665 |
Laboratory Corp. of America Holdings * | 1,404 | 170,193 |
McKesson Corp. | 2,968 | 667,236 |
Medtronic plc | 18,505 | 1,371,221 |
Patterson Cos., Inc. | 980 | 47,677 |
Security | Number of Shares | Value ($) |
Quest Diagnostics, Inc. | 1,960 | 142,139 |
St. Jude Medical, Inc. | 3,678 | 268,751 |
Stryker Corp. | 3,707 | 354,278 |
Tenet Healthcare Corp. * | 1,125 | 65,115 |
UnitedHealth Group, Inc. | 12,381 | 1,510,482 |
Universal Health Services, Inc., Class B | 1,200 | 170,520 |
Varian Medical Systems, Inc. * | 1,300 | 109,629 |
Zimmer Biomet Holdings, Inc. | 2,183 | 238,449 |
12,422,070 | ||
Household & Personal Products 1.9% | ||
Colgate-Palmolive Co. | 11,178 | 731,153 |
Kimberly-Clark Corp. | 4,813 | 510,034 |
The Clorox Co. | 1,600 | 166,432 |
The Estee Lauder Cos., Inc., Class A | 2,900 | 251,314 |
The Procter & Gamble Co. | 35,110 | 2,747,006 |
4,405,939 | ||
Insurance 2.7% | ||
ACE Ltd. | 4,297 | 436,919 |
Aflac, Inc. | 5,663 | 352,239 |
American International Group, Inc. | 17,095 | 1,056,813 |
Aon plc | 3,610 | 359,845 |
Assurant, Inc. | 800 | 53,600 |
Cincinnati Financial Corp. | 1,699 | 85,256 |
Genworth Financial, Inc., Class A * | 6,400 | 48,448 |
Lincoln National Corp. | 3,262 | 193,176 |
Loews Corp. | 3,891 | 149,842 |
Marsh & McLennan Cos., Inc. | 6,998 | 396,787 |
MetLife, Inc. | 14,462 | 809,727 |
Principal Financial Group, Inc. | 3,663 | 187,875 |
Prudential Financial, Inc. | 5,814 | 508,841 |
The Allstate Corp. | 5,421 | 351,660 |
The Chubb Corp. | 2,980 | 283,517 |
The Hartford Financial Services Group, Inc. | 5,615 | 233,415 |
The Progressive Corp. | 7,273 | 202,408 |
The Travelers Cos., Inc. | 4,239 | 409,742 |
Torchmark Corp. | 1,900 | 110,618 |
Unum Group | 2,953 | 105,570 |
XL Group plc | 4,100 | 152,520 |
6,488,818 | ||
Materials 3.1% | ||
Air Products & Chemicals, Inc. | 2,509 | 343,306 |
Airgas, Inc. | 734 | 77,642 |
Alcoa, Inc. | 15,255 | 170,093 |
Allegheny Technologies, Inc. | 1,315 | 39,713 |
Avery Dennison Corp. | 1,100 | 67,034 |
Ball Corp. | 1,800 | 126,270 |
CF Industries Holdings, Inc. | 3,075 | 197,661 |
E.I. du Pont de Nemours & Co. | 11,800 | 754,610 |
Eastman Chemical Co. | 2,000 | 163,640 |
Ecolab, Inc. | 3,497 | 395,406 |
FMC Corp. | 1,700 | 89,335 |
Freeport-McMoRan, Inc. | 13,377 | 249,080 |
International Flavors & Fragrances, Inc. | 1,000 | 109,290 |
Security | Number of Shares | Value ($) |
International Paper Co. | 5,598 | 266,409 |
LyondellBasell Industries N.V., Class A | 5,063 | 524,122 |
Martin Marietta Materials, Inc. | 800 | 113,208 |
MeadWestvaco Corp. | 2,118 | 99,948 |
Monsanto Co. | 6,262 | 667,466 |
Newmont Mining Corp. | 6,452 | 150,719 |
Nucor Corp. | 3,999 | 176,236 |
Owens-Illinois, Inc. * | 2,000 | 45,880 |
PPG Industries, Inc. | 3,508 | 402,438 |
Praxair, Inc. | 3,662 | 437,792 |
Rock-Tenn Co., Class A | 1,676 | 100,895 |
Sealed Air Corp. | 2,828 | 145,303 |
Sigma-Aldrich Corp. | 1,582 | 220,452 |
The Dow Chemical Co. | 14,205 | 726,870 |
The Mosaic Co. | 3,900 | 182,715 |
The Sherwin-Williams Co. | 993 | 273,095 |
Vulcan Materials Co. | 1,755 | 147,297 |
7,463,925 | ||
Media 3.7% | ||
Cablevision Systems Corp., Class A | 3,000 | 71,820 |
CBS Corp., Class B - Non Voting Shares | 6,080 | 337,440 |
Comcast Corp., Class A | 32,792 | 1,972,111 |
DIRECTV * | 6,480 | 601,279 |
Discovery Communications, Inc., Class A * | 1,700 | 56,542 |
Discovery Communications, Inc., Class C * | 3,500 | 108,780 |
Gannett Co., Inc. * | 1,480 | 20,705 |
News Corp., Class A * | 6,148 | 89,699 |
Omnicom Group, Inc. | 3,340 | 232,097 |
Scripps Networks Interactive, Inc., Class A | 1,200 | 78,444 |
TEGNA, Inc. | 2,960 | 94,927 |
The Interpublic Group of Cos., Inc. | 4,997 | 96,292 |
The Walt Disney Co. | 20,158 | 2,300,834 |
Time Warner Cable, Inc. | 3,627 | 646,223 |
Time Warner, Inc. | 10,627 | 928,906 |
Twenty-First Century Fox, Inc., Class A | 23,058 | 750,423 |
Viacom, Inc., Class B | 4,816 | 311,306 |
8,697,828 | ||
Pharmaceuticals, Biotechnology & Life Sciences 10.1% | ||
AbbVie, Inc. | 22,009 | 1,478,785 |
Agilent Technologies, Inc. | 4,301 | 165,933 |
Alexion Pharmaceuticals, Inc. * | 2,939 | 531,283 |
Allergan plc * | 5,047 | 1,531,563 |
Amgen, Inc. | 9,903 | 1,520,309 |
Biogen, Inc. * | 3,036 | 1,226,362 |
Bristol-Myers Squibb Co. | 21,573 | 1,435,467 |
Celgene Corp. * | 10,375 | 1,200,751 |
Eli Lilly & Co. | 12,705 | 1,060,740 |
Endo International plc * | 2,400 | 191,160 |
Gilead Sciences, Inc. | 19,161 | 2,243,370 |
Hospira, Inc. * | 2,187 | 194,009 |
Johnson & Johnson | 36,110 | 3,519,281 |
Security | Number of Shares | Value ($) |
Mallinckrodt plc * | 1,500 | 176,580 |
Merck & Co., Inc. | 36,327 | 2,068,096 |
Mylan N.V. * | 5,291 | 359,047 |
PerkinElmer, Inc. | 1,500 | 78,960 |
Perrigo Co., plc | 1,934 | 357,461 |
Pfizer, Inc. | 79,576 | 2,668,183 |
Regeneron Pharmaceuticals, Inc. * | 987 | 503,498 |
Thermo Fisher Scientific, Inc. | 5,150 | 668,264 |
Vertex Pharmaceuticals, Inc. * | 3,101 | 382,911 |
Waters Corp. * | 1,100 | 141,218 |
Zoetis, Inc. | 6,522 | 314,491 |
24,017,722 | ||
Real Estate 2.5% | ||
American Tower Corp. | 5,548 | 517,573 |
Apartment Investment & Management Co., Class A | 1,877 | 69,318 |
AvalonBay Communities, Inc. | 1,708 | 273,058 |
Boston Properties, Inc. | 2,109 | 255,273 |
CBRE Group, Inc., Class A * | 3,600 | 133,200 |
Crown Castle International Corp. | 4,303 | 345,531 |
Equinix, Inc. | 700 | 177,800 |
Equity Residential | 4,700 | 329,799 |
Essex Property Trust, Inc. | 900 | 191,250 |
General Growth Properties, Inc. | 8,400 | 215,544 |
HCP, Inc. | 6,016 | 219,403 |
Health Care REIT, Inc. | 4,562 | 299,404 |
Host Hotels & Resorts, Inc. | 9,560 | 189,575 |
Iron Mountain, Inc. | 2,287 | 70,897 |
Kimco Realty Corp. | 5,420 | 122,167 |
Plum Creek Timber Co., Inc. | 2,268 | 92,013 |
Prologis, Inc. | 6,410 | 237,811 |
Public Storage | 1,852 | 341,453 |
Realty Income Corp. | 2,800 | 124,292 |
Simon Property Group, Inc. | 4,001 | 692,253 |
SL Green Realty Corp. | 1,300 | 142,857 |
The Macerich Co. | 1,807 | 134,802 |
Ventas, Inc. | 4,019 | 249,540 |
Vornado Realty Trust | 2,360 | 224,035 |
Weyerhaeuser Co. | 6,966 | 219,429 |
5,868,277 | ||
Retailing 4.8% | ||
Amazon.com, Inc. * | 4,904 | 2,128,777 |
AutoNation, Inc. * | 900 | 56,682 |
AutoZone, Inc. * | 400 | 266,760 |
Bed Bath & Beyond, Inc. * | 2,316 | 159,758 |
Best Buy Co., Inc. | 3,721 | 121,342 |
CarMax, Inc. * | 2,726 | 180,488 |
Dollar General Corp. | 3,985 | 309,794 |
Dollar Tree, Inc. * | 2,600 | 205,374 |
Expedia, Inc. | 1,350 | 147,622 |
Family Dollar Stores, Inc. | 1,348 | 106,236 |
GameStop Corp., Class A (b) | 1,454 | 62,464 |
Genuine Parts Co. | 1,900 | 170,107 |
Kohl's Corp. | 2,682 | 167,920 |
L Brands, Inc. | 3,164 | 271,250 |
Lowe's Cos., Inc. | 12,273 | 821,923 |
Macy's, Inc. | 4,322 | 291,605 |
Netflix, Inc. * | 791 | 519,640 |
Security | Number of Shares | Value ($) |
Nordstrom, Inc. | 1,750 | 130,375 |
O'Reilly Automotive, Inc. * | 1,309 | 295,808 |
Ross Stores, Inc. | 5,278 | 256,564 |
Staples, Inc. | 8,250 | 126,307 |
Target Corp. | 8,176 | 667,407 |
The Gap, Inc. | 3,476 | 132,679 |
The Home Depot, Inc. | 16,874 | 1,875,208 |
The Priceline Group, Inc. * | 669 | 770,266 |
The TJX Cos., Inc. | 8,820 | 583,619 |
Tiffany & Co. | 1,426 | 130,907 |
Tractor Supply Co. | 1,700 | 152,898 |
TripAdvisor, Inc. * | 1,500 | 130,710 |
Urban Outfitters, Inc. * | 1,200 | 42,000 |
11,282,490 | ||
Semiconductors & Semiconductor Equipment 2.4% | ||
Altera Corp. | 3,977 | 203,622 |
Analog Devices, Inc. | 4,130 | 265,084 |
Applied Materials, Inc. | 15,655 | 300,889 |
Avago Technologies Ltd. | 3,257 | 432,953 |
Broadcom Corp., Class A | 6,914 | 356,002 |
First Solar, Inc. * | 900 | 42,282 |
Intel Corp. | 61,584 | 1,873,077 |
KLA-Tencor Corp. | 2,000 | 112,420 |
Lam Research Corp. | 2,112 | 171,811 |
Linear Technology Corp. | 3,030 | 134,017 |
Microchip Technology, Inc. | 2,600 | 123,305 |
Micron Technology, Inc. * | 13,657 | 257,298 |
NVIDIA Corp. | 6,368 | 128,061 |
Qorvo, Inc. * | 1,750 | 140,473 |
Skyworks Solutions, Inc. | 2,600 | 270,660 |
Texas Instruments, Inc. | 13,468 | 693,737 |
Xilinx, Inc. | 3,513 | 155,134 |
5,660,825 | ||
Software & Services 10.4% | ||
Accenture plc, Class A | 8,134 | 787,209 |
Adobe Systems, Inc. * | 6,235 | 505,097 |
Akamai Technologies, Inc. * | 2,175 | 151,858 |
Alliance Data Systems Corp. * | 816 | 238,223 |
Autodesk, Inc. * | 2,820 | 141,212 |
Automatic Data Processing, Inc. | 6,115 | 490,606 |
CA, Inc. | 4,044 | 118,449 |
Citrix Systems, Inc. * | 2,060 | 144,530 |
Cognizant Technology Solutions Corp., Class A * | 7,840 | 478,946 |
Computer Sciences Corp. | 1,900 | 124,716 |
eBay, Inc. * | 13,997 | 843,179 |
Electronic Arts, Inc. * | 4,052 | 269,458 |
Facebook, Inc., Class A * | 27,353 | 2,345,930 |
Fidelity National Information Services, Inc. | 3,800 | 234,840 |
Fiserv, Inc. * | 3,120 | 258,430 |
Google, Inc., Class A * | 3,675 | 1,984,647 |
Google, Inc., Class C * | 3,740 | 1,946,707 |
International Business Machines Corp. | 11,978 | 1,948,341 |
Intuit, Inc. | 3,696 | 372,446 |
MasterCard, Inc., Class A | 12,486 | 1,167,191 |
Microsoft Corp. | 104,812 | 4,627,450 |
Security | Number of Shares | Value ($) |
Oracle Corp. | 41,562 | 1,674,949 |
Paychex, Inc. | 4,046 | 189,676 |
Red Hat, Inc. * | 2,274 | 172,665 |
salesforce.com, Inc. * | 7,869 | 547,918 |
Symantec Corp. | 9,187 | 213,598 |
Teradata Corp. * | 1,780 | 65,860 |
The Western Union Co. | 6,559 | 133,344 |
Total System Services, Inc. | 2,100 | 87,717 |
VeriSign, Inc. * | 1,425 | 87,951 |
Visa, Inc., Class A | 24,984 | 1,677,676 |
Xerox Corp. | 14,267 | 151,801 |
Yahoo! Inc. * | 11,294 | 443,741 |
24,626,361 | ||
Technology Hardware & Equipment 6.7% | ||
Amphenol Corp., Class A | 4,100 | 237,677 |
Apple, Inc. | 74,621 | 9,359,339 |
Cisco Systems, Inc. | 66,361 | 1,822,273 |
Corning, Inc. | 16,665 | 328,800 |
EMC Corp. | 25,146 | 663,603 |
F5 Networks, Inc. | 895 | 107,713 |
FLIR Systems, Inc. | 1,834 | 56,524 |
Harris Corp. | 1,400 | 107,674 |
Hewlett-Packard Co. | 23,169 | 695,302 |
Juniper Networks, Inc. | 4,700 | 122,059 |
Motorola Solutions, Inc. | 2,249 | 128,958 |
NetApp, Inc. | 3,900 | 123,084 |
QUALCOMM, Inc. | 21,150 | 1,324,624 |
SanDisk Corp. | 2,771 | 161,328 |
Seagate Technology plc | 4,279 | 203,252 |
TE Connectivity Ltd. | 5,232 | 336,418 |
Western Digital Corp. | 2,800 | 219,576 |
15,998,204 | ||
Telecommunication Services 2.3% | ||
AT&T, Inc. | 67,568 | 2,400,016 |
CenturyLink, Inc. | 7,485 | 219,909 |
Frontier Communications Corp. | 12,705 | 62,890 |
Level 3 Communications, Inc. * | 3,667 | 193,141 |
Verizon Communications, Inc. | 52,938 | 2,467,440 |
5,343,396 | ||
Transportation 2.1% | ||
American Airlines Group, Inc. | 9,281 | 370,637 |
C.H. Robinson Worldwide, Inc. | 1,900 | 118,541 |
CSX Corp. | 12,901 | 421,218 |
Delta Air Lines, Inc. | 10,622 | 436,352 |
Expeditors International of Washington, Inc. | 2,600 | 119,873 |
FedEx Corp. | 3,385 | 576,804 |
JB Hunt Transport Services, Inc. | 1,192 | 97,851 |
Kansas City Southern | 1,400 | 127,680 |
Norfolk Southern Corp. | 4,000 | 349,440 |
Ryder System, Inc. | 662 | 57,839 |
Southwest Airlines Co. | 8,873 | 293,607 |
Union Pacific Corp. | 11,506 | 1,097,327 |
United Parcel Service, Inc., Class B | 8,958 | 868,120 |
4,935,289 |
Security | Number of Shares | Value ($) |
Utilities 2.8% | ||
AES Corp. | 9,089 | 120,520 |
AGL Resources, Inc. | 1,643 | 76,498 |
Ameren Corp. | 3,100 | 116,808 |
American Electric Power Co., Inc. | 6,269 | 332,069 |
CenterPoint Energy, Inc. | 5,250 | 99,908 |
CMS Energy Corp. | 3,196 | 101,761 |
Consolidated Edison, Inc. | 3,735 | 216,182 |
Dominion Resources, Inc. | 7,726 | 516,638 |
DTE Energy Co. | 2,138 | 159,580 |
Duke Energy Corp. | 9,137 | 645,255 |
Edison International | 4,080 | 226,766 |
Entergy Corp. | 2,527 | 178,153 |
Eversource Energy | 3,836 | 174,193 |
Exelon Corp. | 11,260 | 353,789 |
FirstEnergy Corp. | 5,381 | 175,152 |
NextEra Energy, Inc. | 5,832 | 571,711 |
NiSource, Inc. | 4,092 | 186,554 |
NRG Energy, Inc. | 4,386 | 100,352 |
Pepco Holdings, Inc. | 3,150 | 84,861 |
PG&E Corp. | 6,014 | 295,287 |
Pinnacle West Capital Corp. | 1,550 | 88,180 |
PPL Corp. | 8,667 | 255,416 |
Public Service Enterprise Group, Inc. | 6,714 | 263,726 |
SCANA Corp. | 1,800 | 91,170 |
Sempra Energy | 3,031 | 299,887 |
TECO Energy, Inc. | 2,740 | 48,388 |
The Southern Co. | 11,629 | 487,255 |
Wec Energy Group, Inc. | 4,396 | 197,688 |
Xcel Energy, Inc. | 6,333 | 203,796 |
6,667,543 | ||
Total Common Stock | ||
(Cost $118,837,380) | 236,171,633 | |
Other Investment Companies 0.1% of net assets | ||
Securities Lending Collateral 0.1% | ||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (c) | 221,118 | 221,118 |
Total Other Investment Company | ||
(Cost $221,118) | 221,118 |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 0.4% of net assets | ||
Time Deposit 0.4% | ||
JPMorgan Chase Bank | ||
0.03%, 07/01/15 | 1,084,747 | 1,084,747 |
Total Short-Term Investment | ||
(Cost $1,084,747) | 1,084,747 |
* | Non-income producing security. |
(a) | Issuer is affiliated with the fund's adviser. |
(b) | All or a portion of this security is on loan. Securities on loan were valued at $217,187. |
(c) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
Number of Contracts | Contract Value ($) | Unrealized Depreciation ($) | ||||
Futures Contracts | ||||||
S&P 500 Index, e-mini, Long expires 09/18/15 | 10 | 1,027,200 | (18,211) |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||
Common Stock1 | $236,171,633 | $— | $— | $236,171,633 | |||||
Other Investment Companies1 | 221,118 | — | — | 221,118 | |||||
Short-Term Investments1 | — | 1,084,747 | — | 1,084,747 | |||||
Total | $236,392,751 | $1,084,747 | $— | $237,477,498 | |||||
Liabilities Valuation Input | |||||||||
Other Financial Instruments | |||||||||
Futures Contracts2 | ($18,211) | $— | $— | ($18,211) |
1 | As categorized in Portfolio Holdings. |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings and are valued at unrealized appreciation or depreciation. |
Assets | ||
Investments in affiliated issuers, at value (cost $188,927) | $488,085 | |
Investments in unaffiliated issuers, at value (cost $119,733,200) including securities on loan of $217,187 | 236,768,295 | |
Collateral invested for securities on loan, at value (cost $221,118) | + | 221,118 |
Total investments, at value (cost $120,143,245) | 237,477,498 | |
Deposit with broker for futures contracts | 216,200 | |
Receivables: | ||
Investments sold | 35,223 | |
Dividends | 270,892 | |
Fund shares sold | 103,912 | |
Variation margin on futures contracts | 2,753 | |
Income from securities on loan | + | 709 |
Total assets | 238,107,187 | |
Liabilities | ||
Collateral held for securities on loan | 221,118 | |
Payables: | ||
Investments bought | 198,775 | |
Investment adviser and administrator fees | 6,964 | |
Fund shares redeemed | 439,271 | |
Accrued expenses | + | 31,027 |
Total liabilities | 897,155 | |
Net Assets | ||
Total assets | 238,107,187 | |
Total liabilities | – | 897,155 |
Net assets | $237,210,032 | |
Net Assets by Source | ||
Capital received from investors | 124,371,017 | |
Net investment income not yet distributed | 2,424,516 | |
Net realized capital losses | (6,901,543) | |
Net unrealized capital appreciation | 117,316,042 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$237,210,032 | 7,886,133 | $30.08 | ||
Investment Income | ||
Dividends received from affiliated issuer | $1,740 | |
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $366) | 2,644,233 | |
Interest | 328 | |
Securities on loan | + | 6,528 |
Total investment income | 2,652,829 | |
Expenses | ||
Investment adviser and administrator fees | 177,153 | |
Portfolio accounting fees | 22,928 | |
Professional fees | 21,491 | |
Shareholder reports | 16,104 | |
Independent trustees' fees | 11,471 | |
Transfer agent fees | 10,655 | |
Index fee | 9,667 | |
Custodian fees | 6,902 | |
Interest expense | 11 | |
Other expenses | + | 1,782 |
Total expenses | 278,164 | |
Expense reduction by CSIM | – | 10,655 |
Net expenses | – | 267,509 |
Net investment income | 2,385,320 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on unaffiliated investments | 1,552,889 | |
Net realized gains on futures contracts | + | 180,807 |
Net realized gains | 1,733,696 | |
Net change in unrealized appreciation (depreciation) on affiliated issuer | 37,791 | |
Net change in unrealized appreciation (depreciation) on unaffiliated investments | (1,419,698) | |
Net change in unrealized appreciation (depreciation) on futures contracts | + | (35,287) |
Net change in unrealized appreciation (depreciation) | + | (1,417,194) |
Net realized and unrealized gains | 316,502 | |
Increase in net assets resulting from operations | $2,701,822 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $2,385,320 | $3,702,816 | |
Net realized gains | 1,733,696 | 1,355,469 | |
Net change in unrealized appreciation (depreciation) | + | (1,417,194) | 21,264,063 |
Increase in net assets from operations | 2,701,822 | 26,322,348 | |
Distributions to Shareholders | |||
Distributions from net investment income | ($3,678,538) | ($3,029,534) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 785,221 | $24,029,484 | 1,454,662 | $41,236,683 | |
Shares reinvested | 122,292 | 3,678,538 | 106,299 | 3,029,534 | |
Shares redeemed | + | (616,743) | (18,993,788) | (1,125,214) | (31,585,512) |
Net transactions in fund shares | 290,770 | $8,714,234 | 435,747 | $12,680,705 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 7,595,363 | $229,472,514 | 7,159,616 | $193,498,995 | |
Total increase | + | 290,770 | 7,737,518 | 435,747 | 35,973,519 |
End of period | 7,886,133 | $237,210,032 | 7,595,363 | $229,472,514 | |
Net investment income not yet distributed | $2,424,516 | $3,717,734 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Average Daily Net Assets | |
First $500 million | 0.15% |
More than $500 million but not exceeding $5 billion | 0.09% |
More than $5 billion but not exceeding $10 billion | 0.08% |
Over $10 billion | 0.07% |
Balance of Shares Held at 12/31/14 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/15 | Market Value at 06/30/15 | Realized Gains (Losses) 01/01/15 to 06/30/15 | Dividends Received 01/01/15 to 06/30/15 | ||||||
14,049 | 900 | — | 14,949 | $488,085 | $— | $1,740 |
Purchases of Securities | Sales/Maturities of Securities | |
$14,242,998 | $4,473,501 |
Expiration Date | |
December 31, 2016 | $2,623,397 |
December 31, 2017 | 1,365,160 |
December 31, 2018 | 257,470 |
Total | $4,246,027 |
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
1. | the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates 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; and |
5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement 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 |
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 and Laudus Institutional Trust since 2010) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director, Gilead Sciences, Inc. (2005 – present) |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Private Investor. | 74 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | 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) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
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, Laudus Trust and Laudus Institutional Trust since 2015) | Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
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 |
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 and Laudus Institutional Trust since 2010) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | 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 and Laudus Institutional Trust since 2010) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) | Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter W. Bettinger II2 1960 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 and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
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 Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; 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 (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 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. (May 2009 – April 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, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 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 (April 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (March 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 (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 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 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, Laudus Trust and Laudus Institutional Trust since 2005) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 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 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
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 Boards. |
Schwab VIT Balanced Portfolio |
Semiannual report dated June 30, 2015 |
Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the portfolio. She was appointed portfolio manager of the portfolio in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Portfolio and inception Date | 6 Months | 1 Year | Since Inception |
Portfolio: Schwab VIT Balanced Portfolio (07/25/12) | 0.61% | 0.01% | 5.68% |
VIT Balanced Composite Index | 1.10% | 0.74% | 6.43% |
S&P 500® Index | 1.23% | 7.42% | 18.38% |
Barclays U.S. Aggregate Bond Index | -0.10% | 1.86% | 1.36% |
Fund Category: Morningstar Conservative Allocation | 0.60% | -0.20% | 6.62% |
Statistics | |
Number of Holdings | 19 |
Portfolio Turnover Rate4 | 5% |
Asset Class Weightings % of Investments5 | |
Fixed Income | 37.9% |
Stocks – U.S. | 20.2% |
Stocks – International | 18.5% |
Money Market Fund | 12.7% |
Real Assets | 8.6% |
Short-Term Investments | 2.1% |
Total | 100.0% |
Top Holdings % of Net Assets6,7 | |
Schwab U.S. Large-Cap ETF | 15.0% |
iShares MBS ETF | 12.8% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 12.6% |
Schwab Intermediate-Term U.S. Treasury ETF | 11.6% |
Schwab International Equity ETF | 11.3% |
iShares Core U.S. Credit Bond ETF | 6.6% |
Schwab U.S. REIT ETF | 5.8% |
Schwab Emerging Markets Equity ETF | 5.2% |
Schwab U.S. Small-Cap ETF | 4.2% |
Credit Suisse Commodity Return Strategy Fund, Class I | 2.8% |
Total | 87.9% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.17%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the portfolio. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
4 | Not annualized. |
5 | The portfolio intends to primarily invest in affiliated Schwab exchange traded funds (ETFs) and unaffiliated third-party ETFs. The portfolio may also invest in affiliated Schwab and Laudus Funds and unaffiliated third party mutual funds (all such ETFs and mutual funds referred to as “underlying funds”). The portfolio may also invest directly in equity or fixed income securities, and money market investments to achieve its investment objectives. |
6 | This list is not a recommendation of any security by the investment adviser. |
7 | The holdings listed exclude any temporary liquidity investments. |
The portfolio incurs ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/15 | Ending Account Value (Net of Expenses) at 6/30/15 | Expenses Paid During Period2 1/1/15–6/30/15 | ||
Schwab VIT Balanced Portfolio | |||||
Actual Return | 0.58% | $1,000.00 | $1,006.10 | $2.88 | |
Hypothetical 5% Return | 0.58% | $1,000.00 | $ 1,021.92 | $ 2.91 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15– 6/30/15* | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 7/25/12 1– 12/31/12 | |||
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 11.61 | 11.21 | 10.50 | 10.00 | ||
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.03 2 | 0.15 2 | 0.17 2 | 0.08 | ||
Net realized and unrealized gains (losses) | 0.04 | 0.31 | 0.55 | 0.42 | ||
Total from investment operations | 0.07 | 0.46 | 0.72 | 0.50 | ||
Less distributions: | ||||||
Distributions from net investment income | (0.12) | (0.06) | (0.01) | — | ||
Distributions from net realized gains | (0.01) | (0.00) 3 | — | — | ||
Total distributions | (0.13) | (0.06) | (0.01) | — | ||
Net asset value at end of period | 11.55 | 11.61 | 11.21 | 10.50 | ||
Total return (%) | 0.61 4 | 4.15 | 6.89 | 5.00 4 | ||
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses5 | 0.58 6 | 0.57 | 0.58 | 0.58 6 | ||
Gross operating expenses5 | 0.64 6 | 0.70 | 1.07 | 10.58 6 | ||
Net investment income (loss) | 0.46 6 | 1.29 | 1.55 | 3.94 6 | ||
Portfolio turnover rate | 5 4 | 14 | 18 | 1 4 | ||
Net assets, end of period ($ x 1,000,000) | 48 | 44 | 28 | 2 | ||
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
97.7% | Other Investment Companies | 44,984,951 | 46,913,768 |
2.1% | Short-Term Investments | 993,211 | 993,211 |
99.8% | Total Investments | 45,978,162 | 47,906,979 |
0.2% | Other Assets and Liabilities, Net | 89,266 | |
100.0% | Net Assets | 47,996,245 |
Security | Number of Shares | Value ($) |
Other Investment Companies 97.7% of net assets | ||
U.S. Stocks 20.2% | ||
Large-Cap 15.0% | ||
Schwab U.S. Large-Cap ETF (a) | 146,071 | 7,202,761 |
Micro-Cap 1.0% | ||
iShares Micro-Cap ETF | 6,144 | 500,921 |
Small-Cap 4.2% | ||
Schwab U.S. Small-Cap ETF (a) | 34,718 | 1,994,549 |
9,698,231 | ||
International Stocks 18.5% | ||
Developed-Market Large-Cap 11.3% | ||
Schwab International Equity ETF (a) | 177,886 | 5,420,187 |
Developed-Market Small-Cap 2.0% | ||
Schwab International Small-Cap Equity ETF (a) | 30,862 | 966,289 |
Emerging-Market 5.2% | ||
Schwab Emerging Markets Equity ETF (a) | 100,950 | 2,481,351 |
8,867,827 | ||
Real Assets 8.6% | ||
Commodity 2.8% | ||
Credit Suisse Commodity Return Strategy Fund, Class I * | 228,219 | 1,341,925 |
Real Estate 5.8% | ||
Schwab U.S. REIT ETF (a) | 76,455 | 2,776,846 |
4,118,771 |
Security | Number of Shares | Value ($) |
Fixed Income 37.8% | ||
Agency Bond 2.0% | ||
iShares Agency Bond ETF | 8,553 | 968,028 |
Corporate Bond 6.6% | ||
iShares Core U.S. Credit Bond ETF | 29,142 | 3,163,947 |
High Yield Bond 1.1% | ||
SPDR Barclays High Yield Bond ETF | 14,149 | 543,746 |
Inflation-Protected Bond 1.7% | ||
Schwab U.S. TIPS ETF (a) | 15,043 | 815,481 |
International Developed-Market Bond 2.0% | ||
SPDR Barclays International Treasury Bond ETF | 18,292 | 951,550 |
Mortgage-Backed Bond 12.8% | ||
iShares MBS ETF | 56,693 | 6,157,994 |
Treasury Bond 11.6% | ||
Schwab Intermediate-Term U.S. Treasury ETF (a) | 103,428 | 5,544,774 |
18,145,520 | ||
Money Market Fund 12.6% | ||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.06% (a)(b) | 6,083,419 | 6,083,419 |
Total Other Investment Companies | ||
(Cost $44,984,951) | 46,913,768 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 2.1% of net assets | ||
Time Deposits 2.1% | ||
BNP Paribas | ||
0.03%, 07/01/15 | 31,227 | 31,227 |
DNB | ||
0.03%, 07/01/15 | 480,992 | 480,992 |
JPMorgan Chase Bank | ||
0.03%, 07/01/15 | 480,992 | 480,992 |
Total Short-Term Investments | ||
(Cost $993,211) | 993,211 |
* | Non-income producing security. |
(a) | Issuer is affiliated with the fund's adviser. |
(b) | The rate shown is the 7-day yield. |
ETF — | Exchange Traded Fund |
MBS — | Mortgage-Backed Security |
REIT — | Real Estate Investment Trust |
SPDR — | Standard & Poor's Depositary Receipts |
TIPS — | Treasury Inflation Protected Securities |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||
Other Investment Companies1 | $46,913,768 | $— | $— | $46,913,768 | |||||
Short-Term Investments1 | — | 993,211 | — | 993,211 | |||||
Total | $46,913,768 | $993,211 | $— | $47,906,979 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $31,120,946) | $33,285,657 | |
Investments in unaffiliated issuers, at value (cost $14,857,216) | + | 14,621,322 |
Total investments, at value (cost $45,978,162) | 47,906,979 | |
Receivables: | ||
Investments sold | 115,889 | |
Dividends | + | 150 |
Total assets | 48,023,018 | |
Liabilities | ||
Payables: | ||
Investment adviser and administrator fees | 3,979 | |
Fund shares redeemed | 2,475 | |
Accrued expenses | + | 20,319 |
Total liabilities | 26,773 | |
Net Assets | ||
Total assets | 48,023,018 | |
Total liabilities | – | 26,773 |
Net assets | $47,996,245 | |
Net Assets by Source | ||
Capital received from investors | 46,148,817 | |
Net investment income not yet distributed | 109,122 | |
Net realized capital losses | (190,511) | |
Net unrealized capital appreciation | 1,928,817 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$47,996,245 | 4,155,354 | $11.55 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $149,317 | |
Dividends received from unaffiliated underlying funds | 96,898 | |
Interest | + | 235 |
Total investment income | 246,450 | |
Expenses | ||
Investment adviser and administrator fees | 106,284 | |
Professional fees | 15,606 | |
Transfer agent fees | 10,693 | |
Shareholder reports | 7,934 | |
Independent trustees' fees | 5,113 | |
Portfolio accounting fees | 3,716 | |
Custodian fees | 2,276 | |
Other expenses | + | 427 |
Total expenses | 152,049 | |
Expense reduction by CSIM | – | 15,060 |
Net expenses | – | 136,989 |
Net investment income | 109,461 | |
Realized and Unrealized Gains (Losses) | ||
Net realized losses on sales of affiliated underlying funds | (17,305) | |
Net realized losses on sales of unaffiliated underlying funds | + | (18,498) |
Net realized losses | (35,803) | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 379,226 | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (172,830) |
Net change in unrealized appreciation (depreciation) | + | 206,396 |
Net realized and unrealized gains | 170,593 | |
Increase in net assets resulting from operations | $280,054 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $109,461 | $487,882 | |
Net realized losses | (35,803) | (61,034) | |
Net change in unrealized appreciation (depreciation) | + | 206,396 | 918,908 |
Increase in net assets from operations | 280,054 | 1,345,756 | |
Distributions to Shareholders | |||
Distributions from net investment income | (488,556) | (222,767) | |
Distributions from net realized gains | + | (49,718) | (3,104) |
Total distributions | ($538,274) | ($225,871) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 429,770 | $5,046,276 | 1,672,538 | $19,220,062 | |
Shares reinvested | 46,604 | 538,274 | 19,338 | 225,870 | |
Shares redeemed | + | (147,303) | (1,736,939) | (387,370) | (4,422,237) |
Net transactions in fund shares | 329,071 | $3,847,611 | 1,304,506 | $15,023,695 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 3,826,283 | $44,406,854 | 2,521,777 | $28,263,274 | |
Total increase | + | 329,071 | 3,589,391 | 1,304,506 | 16,143,580 |
End of period | 4,155,354 | $47,996,245 | 3,826,283 | $44,406,854 | |
Net investment income not yet distributed | $109,122 | $488,217 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Schwab U.S. Large-Cap ETF | 0.2% |
Schwab U.S. Small-Cap ETF | 0.1% |
Schwab International Equity ETF | 0.1% |
Schwab International Small-Cap Equity ETF | 0.2% |
Schwab Emerging Markets Equity ETF | 0.2% |
Schwab U.S. REIT ETF | 0.2% |
Schwab U.S. TIPS ETF | 0.1% |
Schwab Intermediate-Term U.S. Treasury ETF | 1.6% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.1% |
Underlying Funds | Balance of Shares Held at 12/31/14 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/15 | Market Value at 06/30/15 | Realized Gains (Losses) 01/01/15 to 06/30/15 | Distributions Received* 01/01/15 to 06/30/15 | |||||||
Schwab U.S. Large-Cap ETF | 141,801 | 13,524 | (9,254) | 146,071 | $7,202,761 | $8,898 | $71,317 | |||||||
Schwab U.S. Small-Cap ETF | 31,894 | 4,080 | (1,256) | 34,718 | 1,994,549 | 1,358 | 12,300 | |||||||
Schwab International Equity ETF | 159,264 | 29,471 | (10,849) | 177,886 | 5,420,187 | (21,205) | — | |||||||
Schwab International Small-Cap Equity ETF | 30,897 | 2,491 | (2,526) | 30,862 | 966,289 | (6,491) | — | |||||||
Schwab Emerging Markets Equity ETF | 96,332 | 12,120 | (7,502) | 100,950 | 2,481,351 | (8,447) | — | |||||||
Schwab U.S. REIT ETF | 70,944 | 11,307 | (5,796) | 76,455 | 2,776,846 | 9,985 | 29,787 | |||||||
Schwab U.S. TIPS ETF | 13,958 | 1,675 | (590) | 15,043 | 815,481 | (1,552) | — | |||||||
Schwab Intermediate-Term U.S. Treasury ETF | 95,231 | 13,717 | (5,520) | 103,428 | 5,544,774 | 149 | 34,831 | |||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 5,182,485 | 900,934 | — | 6,083,419 | 6,083,419 | — | 1,082 | |||||||
Total | $33,285,657 | ($17,305) | $149,317 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$6,056,152 | $2,196,308 |
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
1. | the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates 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; and |
5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement 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 |
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 and Laudus Institutional Trust since 2010) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director, Gilead Sciences, Inc. (2005 – present) |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Private Investor. | 74 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | 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) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
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, Laudus Trust and Laudus Institutional Trust since 2015) | Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
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 |
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 and Laudus Institutional Trust since 2010) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | 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 and Laudus Institutional Trust since 2010) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) | Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter W. Bettinger II2 1960 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 and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
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 Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; 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 (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 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. (May 2009 – April 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, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 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 (April 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (March 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 (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 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 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, Laudus Trust and Laudus Institutional Trust since 2005) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 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 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
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 Boards. |
Schwab VIT Balanced with Growth Portfolio |
Semiannual report dated June 30, 2015 |
Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the portfolio. She was appointed portfolio manager of the portfolio in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Portfolio and inception Date | 6 Months | 1 Year | Since Inception |
Portfolio: Schwab VIT Balanced with Growth Portfolio (07/25/12) | 1.41% | 0.02% | 8.00% |
VIT Balanced with Growth Composite Index | 1.73% | 0.71% | 8.91% |
S&P 500® Index | 1.23% | 7.42% | 18.38% |
Barclays U.S. Aggregate Bond Index | -0.10% | 1.86% | 1.36% |
Fund Category: Morningstar Moderate Allocation | 1.22% | 2.06% | 10.92% |
Statistics | |
Number of Holdings | 19 |
Portfolio Turnover Rate4 | 4% |
Asset Class Weightings % of Investments5 | |
Fixed Income | 29.7% |
Stocks – U.S. | 29.2% |
Stocks – International | 26.4% |
Real Assets | 9.6% |
Short-Term Investments | 2.6% |
Money Market Fund | 2.5% |
Total | 100.0% |
Top Holdings % of Net Assets6,7 | |
Schwab U.S. Large-Cap ETF | 22.0% |
Schwab International Equity ETF | 17.3% |
iShares MBS ETF | 10.8% |
Schwab Intermediate-Term U.S. Treasury ETF | 8.5% |
Schwab U.S. Small-Cap ETF | 6.1% |
Schwab Emerging Markets Equity ETF | 6.1% |
Schwab U.S. REIT ETF | 5.8% |
iShares Core U.S. Credit Bond ETF | 4.6% |
Credit Suisse Commodity Return Strategy Fund, Class I | 3.9% |
Schwab International Small-Cap Equity ETF | 3.0% |
Total | 88.1% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.16%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the portfolio. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
4 | Not annualized. |
5 | The portfolio intends to primarily invest in affiliated Schwab exchange traded funds (ETFs) and unaffiliated third-party ETFs. The portfolio may also invest in affiliated Schwab and Laudus Funds and unaffiliated third party mutual funds (all such ETFs and mutual funds referred to as “underlying funds”). The portfolio may also invest directly in equity or fixed income securities, and money market investments to achieve its investment objectives. |
6 | This list is not a recommendation of any security by the investment adviser. |
7 | The holdings listed exclude any temporary liquidity investments. |
The portfolio incurs ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/15 | Ending Account Value (Net of Expenses) at 6/30/15 | Expenses Paid During Period2 1/1/15–6/30/15 | ||
Schwab VIT Balanced with Growth Portfolio | |||||
Actual Return | 0.53% | $1,000.00 | $1,014.10 | $ 2.65 | |
Hypothetical 5% Return | 0.53% | $1,000.00 | $1,022.17 | $2.66 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15– 6/30/15* | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 7/25/12 1– 12/31/12 | |||
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 12.26 | 11.86 | 10.71 | 10.00 | ||
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.04 2 | 0.19 2 | 0.23 2 | 0.09 | ||
Net realized and unrealized gains (losses) | 0.13 | 0.30 | 0.93 | 0.62 | ||
Total from investment operations | 0.17 | 0.49 | 1.16 | 0.71 | ||
Less distributions: | ||||||
Distributions from net investment income | (0.15) | (0.09) | (0.01) | — | ||
Distributions from net realized gains | (0.01) | (0.00) 3 | — | — | ||
Total distributions | (0.16) | (0.09) | (0.01) | — | ||
Net asset value at end of period | 12.27 | 12.26 | 11.86 | 10.71 | ||
Total return (%) | 1.41 4 | 4.15 | 10.79 | 7.10 4 | ||
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses5 | 0.53 6 | 0.55 | 0.58 | 0.58 6 | ||
Gross operating expenses5 | 0.55 6 | 0.57 | 0.75 | 16.10 6 | ||
Net investment income (loss) | 0.57 6 | 1.53 | 2.07 | 4.80 6 | ||
Portfolio turnover rate | 4 4 | 8 | 14 | 1 4 | ||
Net assets, end of period ($ x 1,000,000) | 110 | 99 | 70 | 2 | ||
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
97.6% | Other Investment Companies | 101,600,916 | 107,477,689 |
2.6% | Short-Term Investments | 2,905,304 | 2,905,304 |
100.2% | Total Investments | 104,506,220 | 110,382,993 |
(0.2%) | Other Assets and Liabilities, Net | (233,687) | |
100.0% | Net Assets | 110,149,306 |
Security | Number of Shares | Value ($) |
Other Investment Companies 97.6% of net assets | ||
U.S. Stocks 29.2% | ||
Large-Cap 22.0% | ||
Schwab U.S. Large-Cap ETF (a) | 490,830 | 24,202,827 |
Micro-Cap 1.1% | ||
iShares Micro-Cap ETF | 14,427 | 1,176,233 |
Small-Cap 6.1% | ||
Schwab U.S. Small-Cap ETF (a) | 118,253 | 6,793,635 |
32,172,695 | ||
International Stocks 26.4% | ||
Developed-Market Large-Cap 17.3% | ||
Schwab International Equity ETF (a) | 624,475 | 19,027,753 |
Developed-Market Small-Cap 3.0% | ||
Schwab International Small-Cap Equity ETF (a) | 106,397 | 3,331,290 |
Emerging-Market 6.1% | ||
Schwab Emerging Markets Equity ETF (a) | 274,970 | 6,758,763 |
29,117,806 | ||
Real Assets 9.7% | ||
Commodity 3.9% | ||
Credit Suisse Commodity Return Strategy Fund, Class I * | 720,749 | 4,238,004 |
Real Estate 5.8% | ||
Schwab U.S. REIT ETF (a) | 176,139 | 6,397,368 |
10,635,372 |
Security | Number of Shares | Value ($) |
Fixed Income 29.8% | ||
Agency Bond 2.0% | ||
iShares Agency Bond ETF | 19,826 | 2,243,907 |
Corporate Bond 4.6% | ||
iShares Core U.S. Credit Bond ETF | 46,500 | 5,048,505 |
High Yield Bond 1.2% | ||
SPDR Barclays High Yield Bond ETF | 32,855 | 1,262,618 |
Inflation-Protected Bond 1.7% | ||
Schwab U.S. TIPS ETF (a) | 34,744 | 1,883,472 |
International Developed-Market Bond 1.0% | ||
SPDR Barclays International Treasury Bond ETF | 20,346 | 1,058,399 |
Mortgage-Backed Bond 10.8% | ||
iShares MBS ETF | 109,621 | 11,907,033 |
Treasury Bond 8.5% | ||
Schwab Intermediate-Term U.S. Treasury ETF (a) | 174,840 | 9,373,172 |
32,777,106 | ||
Money Market Fund 2.5% | ||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.06% (a)(b) | 2,774,710 | 2,774,710 |
Total Other Investment Companies | ||
(Cost $101,600,916) | 107,477,689 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 2.6% of net assets | ||
Time Deposits 2.6% | ||
Australia & New Zealand Banking Group Ltd. | ||
0.03%, 07/01/15 | 1,102,510 | 1,102,510 |
JPMorgan Chase Bank | ||
0.03%, 07/01/15 | 1,102,510 | 1,102,510 |
Nordea Bank | ||
0.03%, 07/01/15 | 700,284 | 700,284 |
Total Short-Term Investments | ||
(Cost $2,905,304) | 2,905,304 |
* | Non-income producing security. |
(a) | Issuer is affiliated with the fund's adviser. |
(b) | The rate shown is the 7-day yield. |
ETF — | Exchange Traded Fund |
MBS — | Mortgage-Backed Security |
REIT — | Real Estate Investment Trust |
SPDR — | Standard & Poor's Depositary Receipts |
TIPS — | Treasury Inflation Protected Securities |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||
Other Investment Companies1 | $107,477,689 | $— | $— | $107,477,689 | |||||
Short-Term Investments1 | — | 2,905,304 | — | 2,905,304 | |||||
Total | $107,477,689 | $2,905,304 | $— | $110,382,993 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $74,028,095) | $80,542,990 | |
Investments in unaffiliated issuers, at value (cost $30,478,125) | + | 29,840,003 |
Total investments, at value (cost $104,506,220) | 110,382,993 | |
Receivables: | ||
Dividends | + | 71 |
Total assets | 110,383,064 | |
Liabilities | ||
Payables: | ||
Investments bought | 182,144 | |
Investment adviser and administrator fees | 9,631 | |
Fund shares redeemed | 21,172 | |
Accrued expenses | + | 20,811 |
Total liabilities | 233,758 | |
Net Assets | ||
Total assets | 110,383,064 | |
Total liabilities | – | 233,758 |
Net assets | $110,149,306 | |
Net Assets by Source | ||
Capital received from investors | 104,170,403 | |
Net investment income not yet distributed | 294,611 | |
Net realized capital losses | (192,481) | |
Net unrealized capital appreciation | 5,876,773 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$110,149,306 | 8,978,308 | $12.27 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $395,360 | |
Dividends received from unaffiliated underlying funds | 174,249 | |
Interest | + | 405 |
Total investment income | 570,014 | |
Expenses | ||
Investment adviser and administrator fees | 234,977 | |
Professional fees | 17,356 | |
Transfer agent fees | 10,718 | |
Shareholder reports | 7,936 | |
Independent trustees' fees | 7,008 | |
Portfolio accounting fees | 4,211 | |
Custodian fees | 2,419 | |
Other expenses | + | 817 |
Total expenses | 285,442 | |
Expense reduction by CSIM | – | 10,718 |
Net expenses | – | 274,724 |
Net investment income | 295,290 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 51,482 | |
Net realized losses on sales of unaffiliated underlying funds | + | (20,072) |
Net realized gains | 31,410 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 1,209,117 | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (282,153) |
Net change in unrealized appreciation (depreciation) | + | 926,964 |
Net realized and unrealized gains | 958,374 | |
Increase in net assets resulting from operations | $1,253,664 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $295,290 | $1,355,907 | |
Net realized gains (losses) | 31,410 | (30,819) | |
Net change in unrealized appreciation (depreciation) | + | 926,964 | 1,972,105 |
Increase in net assets from operations | 1,253,664 | 3,297,193 | |
Distributions to Shareholders | |||
Distributions from net investment income | (1,356,819) | (672,772) | |
Distributions from net realized gains | + | (87,737) | (12,459) |
Total distributions | ($1,444,556) | ($685,231) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 1,010,229 | $12,740,699 | 2,491,882 | $30,247,487 | |
Shares reinvested | 117,730 | 1,444,556 | 55,127 | 685,231 | |
Shares redeemed | + | (248,313) | (3,121,661) | (325,359) | (3,961,691) |
Net transactions in fund shares | 879,646 | $11,063,594 | 2,221,650 | $26,971,027 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 8,098,662 | $99,276,604 | 5,877,012 | $69,693,615 | |
Total increase | + | 879,646 | 10,872,702 | 2,221,650 | 29,582,989 |
End of period | 8,978,308 | $110,149,306 | 8,098,662 | $99,276,604 | |
Net investment income not yet distributed | $294,611 | $1,356,140 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Schwab U.S. Large-Cap ETF | 0.5% |
Schwab U.S. Small-Cap ETF | 0.2% |
Schwab International Equity ETF | 0.5% |
Schwab International Small-Cap Equity ETF | 0.5% |
Schwab Emerging Markets Equity ETF | 0.5% |
Schwab U.S. REIT ETF | 0.4% |
Schwab U.S. TIPS ETF | 0.3% |
Schwab Intermediate-Term U.S. Treasury ETF | 2.8% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.0%* |
* | Less than 0.05% |
Underlying Funds | Balance of Shares Held at 12/31/14 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/15 | Market Value at 06/30/15 | Realized Gains (Losses) 01/01/15 to 06/30/15 | Distributions Received* 01/01/15 to 06/30/15 | |||||||
Schwab U.S. Large-Cap ETF | 458,286 | 55,312 | (22,768) | 490,830 | $24,202,827 | $75,534 | $231,784 | |||||||
Schwab U.S. Small-Cap ETF | 107,162 | 12,517 | (1,426) | 118,253 | 6,793,635 | 2,659 | 40,386 | |||||||
Schwab International Equity ETF | 562,561 | 86,432 | (24,518) | 624,475 | 19,027,753 | (57,166) | — | |||||||
Schwab International Small-Cap Equity ETF | 103,790 | 10,032 | (7,425) | 106,397 | 3,331,290 | (19,923) | — | |||||||
Schwab Emerging Markets Equity ETF | 258,260 | 26,806 | (10,096) | 274,970 | 6,758,763 | (12,432) | — | |||||||
Schwab U.S. REIT ETF | 158,515 | 28,694 | (11,070) | 176,139 | 6,397,368 | 63,833 | 66,165 | |||||||
Schwab U.S. TIPS ETF | 31,344 | 4,724 | (1,324) | 34,744 | 1,883,472 | (3,184) | — | |||||||
Schwab Intermediate-Term U.S. Treasury ETF | 156,770 | 25,474 | (7,404) | 174,840 | 9,373,172 | 2,161 | 56,497 | |||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 2,774,250 | 460 | — | 2,774,710 | 2,774,710 | — | 528 | |||||||
Total | $80,542,990 | $51,482 | $395,360 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$13,625,749 | $4,084,803 |
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
1. | the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates 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; and |
5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement 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 |
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 and Laudus Institutional Trust since 2010) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director, Gilead Sciences, Inc. (2005 – present) |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Private Investor. | 74 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | 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) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
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, Laudus Trust and Laudus Institutional Trust since 2015) | Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
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 |
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 and Laudus Institutional Trust since 2010) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | 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 and Laudus Institutional Trust since 2010) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) | Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter W. Bettinger II2 1960 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 and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
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 Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; 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 (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 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. (May 2009 – April 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, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 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 (April 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (March 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 (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 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 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, Laudus Trust and Laudus Institutional Trust since 2005) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 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 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
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 Boards. |
Schwab VIT Growth Portfolio |
Semiannual report dated June 30, 2015 |
Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the portfolio. She was appointed portfolio manager of the portfolio in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Portfolio and inception Date | 6 Months | 1 Year | Since Inception |
Portfolio: Schwab VIT Growth Portfolio (07/25/12) | 2.05% | 0.13% | 10.56% |
VIT Growth Composite Index | 2.33% | 0.86% | 11.33% |
S&P 500® Index | 1.23% | 7.42% | 18.38% |
Barclays U.S. Aggregate Bond Index | -0.10% | 1.86% | 1.36% |
Fund Category: Morningstar Aggressive Allocation | 1.95% | 1.69% | 12.78% |
Statistics | |
Number of Holdings | 17 |
Portfolio Turnover Rate4 | 4% |
Asset Class Weightings % of Investments5 | |
Stocks – U.S. | 38.0% |
Stocks – International | 34.2% |
Fixed Income | 12.6% |
Real Assets | 9.6% |
Short-Term Investments | 3.1% |
Money Market Fund | 2.5% |
Total | 100.0% |
Top Holdings % of Net Assets6,7 | |
Schwab U.S. Large-Cap ETF | 29.1% |
Schwab International Equity ETF | 21.3% |
Schwab Emerging Markets Equity ETF | 8.2% |
Schwab U.S. Small-Cap ETF | 7.2% |
Schwab U.S. REIT ETF | 5.8% |
Schwab International Small-Cap Equity ETF | 5.0% |
iShares MBS ETF | 4.8% |
Schwab Intermediate-Term U.S. Treasury ETF | 4.5% |
Credit Suisse Commodity Return Strategy Fund, Class I | 3.9% |
iShares Core U.S. Credit Bond ETF | 2.7% |
Total | 92.5% |
1 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
2 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. Portfolio performance does not reflect the additional fees and expenses imposed by the insurance company under the variable insurance product contract. If those contract fees and expenses were included, the performance would be less than that shown. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.14%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the portfolio. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
4 | Not annualized. |
5 | The portfolio intends to primarily invest in affiliated Schwab exchange traded funds (ETFs) and unaffiliated third-party ETFs. The portfolio may also invest in affiliated Schwab and Laudus Funds and unaffiliated third party mutual funds (all such ETFs and mutual funds referred to as “underlying funds”). The portfolio may also invest directly in equity or fixed income securities, and money market investments to achieve its investment objectives. |
6 | This list is not a recommendation of any security by the investment adviser. |
7 | The holdings listed exclude any temporary liquidity investments. |
The portfolio incurs ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/15 | Ending Account Value (Net of Expenses) at 6/30/15 | Expenses Paid During Period2 1/1/15–6/30/15 | ||
Schwab VIT Growth Portfolio | |||||
Actual Return | 0.52% | $1,000.00 | $1,020.50 | $2.61 | |
Hypothetical 5% Return | 0.52% | $1,000.00 | $1,022.22 | $2.61 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
1/1/15– 6/30/15* | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 7/25/12 1– 12/31/12 | |||
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 13.05 | 12.65 | 10.95 | 10.00 | ||
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.03 2 | 0.20 2 | 0.33 2 | 0.13 | ||
Net realized and unrealized gains (losses) | 0.24 | 0.30 | 1.37 | 0.82 | ||
Total from investment operations | 0.27 | 0.50 | 1.70 | 0.95 | ||
Less distributions: | ||||||
Distributions from net investment income | (0.17) | (0.10) | (0.00) 3 | — | ||
Distributions from net realized gains | (0.02) | (0.00) 3 | — | — | ||
Total distributions | (0.19) | (0.10) | (0.00) 3 | — | ||
Net asset value at end of period | 13.13 | 13.05 | 12.65 | 10.95 | ||
Total return (%) | 2.05 4 | 3.97 | 15.56 | 9.50 4 | ||
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses5 | 0.52 6 | 0.54 | 0.58 | 0.59 6,7 | ||
Gross operating expenses5 | 0.54 6 | 0.56 | 0.77 | 26.08 6 | ||
Net investment income (loss) | 0.49 6 | 1.56 | 2.72 | 3.96 6 | ||
Portfolio turnover rate | 4 4 | 9 | 9 | 29 4 | ||
Net assets, end of period ($ x 1,000,000) | 120 | 107 | 77 | 1 | ||
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
97.9% | Other Investment Companies | 109,899,374 | 117,640,073 |
3.1% | Short-Term Investments | 3,805,292 | 3,805,292 |
101.0% | Total Investments | 113,704,666 | 121,445,365 |
(1.0%) | Other Assets and Liabilities, Net | (1,249,157) | |
100.0% | Net Assets | 120,196,208 |
Security | Number of Shares | Value ($) |
Other Investment Companies 97.9% of net assets | ||
U.S. Stocks 38.4% | ||
Large-Cap 29.1% | ||
Schwab U.S. Large-Cap ETF (a) | 709,309 | 34,976,027 |
Micro-Cap 2.1% | ||
iShares Micro-Cap ETF | 31,222 | 2,545,529 |
Small-Cap 7.2% | ||
Schwab U.S. Small-Cap ETF (a) | 150,835 | 8,665,471 |
46,187,027 | ||
International Stocks 34.5% | ||
Developed-Market Large-Cap 21.3% | ||
Schwab International Equity ETF (a) | 842,473 | 25,670,152 |
Developed-Market Small-Cap 5.0% | ||
Schwab International Small-Cap Equity ETF (a) | 191,927 | 6,009,234 |
Emerging-Market 8.2% | ||
Schwab Emerging Markets Equity ETF (a) | 399,163 | 9,811,427 |
41,490,813 | ||
Real Assets 9.7% | ||
Commodity 3.9% | ||
Credit Suisse Commodity Return Strategy Fund, Class I * | 788,492 | 4,636,333 |
Real Estate 5.8% | ||
Schwab U.S. REIT ETF (a) | 192,913 | 7,006,600 |
11,642,933 |
Security | Number of Shares | Value ($) |
Fixed Income 12.7% | ||
Corporate Bond 2.7% | ||
iShares Core U.S. Credit Bond ETF | 29,968 | 3,253,626 |
Inflation-Protected Bond 0.7% | ||
Schwab U.S. TIPS ETF (a) | 15,492 | 839,821 |
Mortgage-Backed Bond 4.8% | ||
iShares MBS ETF | 52,816 | 5,736,874 |
Treasury Bond 4.5% | ||
Schwab Intermediate-Term U.S. Treasury ETF (a) | 100,918 | 5,410,214 |
15,240,535 | ||
Money Market Fund 2.6% | ||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.06% (a)(b) | 3,078,765 | 3,078,765 |
Total Other Investment Companies | ||
(Cost $109,899,374) | 117,640,073 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 3.1% of net assets | ||
Time Deposits 3.1% | ||
Australia & New Zealand Banking Group Ltd. | ||
0.03%, 07/01/15 | 1,202,883 | 1,202,883 |
DNB | ||
0.03%, 07/01/15 | 196,643 | 196,643 |
JPMorgan Chase Bank | ||
0.03%, 07/01/15 | 1,202,883 | 1,202,883 |
Nordea Bank | ||
0.03%, 07/01/15 | 1,202,883 | 1,202,883 |
Total Short-Term Investments | ||
(Cost $3,805,292) | 3,805,292 |
* | Non-income producing security. |
(a) | Issuer is affiliated with the fund's adviser. |
(b) | The rate shown is the 7-day yield. |
ETF — | Exchange Traded Fund |
MBS — | Mortgage-Backed Security |
REIT — | Real Estate Investment Trust |
TIPS — | Treasury Inflation Protected Securities |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||
Other Investment Companies1 | $117,640,073 | $— | $— | $117,640,073 | |||||
Short-Term Investments1 | — | 3,805,292 | — | 3,805,292 | |||||
Total | $117,640,073 | $3,805,292 | $— | $121,445,365 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $93,376,501) | $101,467,711 | |
Investments in unaffiliated issuers, at value (cost $20,328,165) | + | 19,977,654 |
Total investments, at value (cost $113,704,666) | 121,445,365 | |
Receivables: | ||
Dividends | + | 78 |
Total assets | 121,445,443 | |
Liabilities | ||
Payables: | ||
Investments bought | 872,836 | |
Investment adviser and administrator fees | 10,537 | |
Fund shares redeemed | 345,275 | |
Accrued expenses | + | 20,587 |
Total liabilities | 1,249,235 | |
Net Assets | ||
Total assets | 121,445,443 | |
Total liabilities | – | 1,249,235 |
Net assets | $120,196,208 | |
Net Assets by Source | ||
Capital received from investors | 112,441,576 | |
Net investment income not yet distributed | 277,248 | |
Net realized capital losses | (263,315) | |
Net unrealized capital appreciation | 7,740,699 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$120,196,208 | 9,152,096 | $13.13 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $492,438 | |
Dividends received from unaffiliated underlying funds | 79,680 | |
Interest | + | 420 |
Total investment income | 572,538 | |
Expenses | ||
Investment adviser and administrator fees | 254,768 | |
Professional fees | 17,707 | |
Transfer agent fees | 10,693 | |
Shareholder reports | 7,721 | |
Independent trustees' fees | 7,263 | |
Portfolio accounting fees | 4,269 | |
Custodian fees | 2,493 | |
Other expenses | + | 898 |
Total expenses | 305,812 | |
Expense reduction by CSIM | – | 10,693 |
Net expenses | – | 295,119 |
Net investment income | 277,419 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 37,125 | |
Net realized losses on sales of unaffiliated underlying funds | + | (46,918) |
Net realized losses | (9,793) | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 1,759,146 | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (28,369) |
Net change in unrealized appreciation (depreciation) | + | 1,730,777 |
Net realized and unrealized gains | 1,720,984 | |
Increase in net assets resulting from operations | $1,998,403 |
Operations | |||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||
Net investment income | $277,419 | $1,520,782 | |
Net realized losses | (9,793) | (3,129) | |
Net change in unrealized appreciation (depreciation) | + | 1,730,777 | 2,093,968 |
Increase in net assets from operations | 1,998,403 | 3,611,621 | |
Distributions to Shareholders | |||
Distributions from net investment income | (1,520,306) | (780,922) | |
Distributions from net realized gains | + | (172,844) | (5,297) |
Total distributions | ($1,693,150) | ($786,219) |
Transactions in Fund Shares | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 1,178,922 | $15,920,619 | 2,461,736 | $31,697,774 | |
Shares reinvested | 128,953 | 1,693,150 | 59,114 | 786,219 | |
Shares redeemed | + | (326,143) | (4,343,104) | (398,632) | (5,197,010) |
Net transactions in fund shares | 981,732 | $13,270,665 | 2,122,218 | $27,286,983 | |
Shares Outstanding and Net Assets | |||||
1/1/15-6/30/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 8,170,364 | $106,620,290 | 6,048,146 | $76,507,905 | |
Total increase | + | 981,732 | 13,575,918 | 2,122,218 | 30,112,385 |
End of period | 9,152,096 | $120,196,208 | 8,170,364 | $106,620,290 | |
Net investment income not yet distributed | $277,248 | $1,520,135 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Money Market Portfolio |
Schwab MarketTrack Growth Portfolio II |
Schwab S&P 500 Index Portfolio |
Schwab VIT Balanced Portfolio |
Schwab VIT Balanced with Growth Portfolio |
Schwab VIT Growth Portfolio |
Schwab U.S. Large-Cap ETF | 0.8% |
Schwab U.S. Small-Cap ETF | 0.3% |
Schwab International Equity ETF | 0.6% |
Schwab International Small-Cap Equity ETF | 1.0% |
Schwab Emerging Markets Equity ETF | 0.7% |
Schwab U.S. REIT ETF | 0.5% |
Schwab U.S. TIPS ETF | 0.1% |
Schwab Intermediate-Term U.S. Treasury ETF | 1.6% |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.0%* |
* | Less than 0.05% |
Underlying Funds | Balance of Shares Held at 12/31/14 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/2015 | Market Value at 06/30/2015 | Realized Gains (Losses) 01/01/15 to 06/30/2015 | Distributions Received* 01/01/15 to 06/30/2015 | |||||||
Schwab U.S. Large-Cap ETF | 642,848 | 79,750 | (13,289) | 709,309 | $34,976,027 | $27,122 | $335,613 | |||||||
Schwab U.S. Small-Cap ETF | 134,191 | 21,090 | (4,446) | 150,835 | 8,665,471 | 4,593 | 51,700 | |||||||
Schwab International Equity ETF | 750,998 | 116,160 | (24,685) | 842,473 | 25,670,152 | (67,474) | — | |||||||
Schwab International Small-Cap Equity ETF | 185,661 | 18,677 | (12,411) | 191,927 | 6,009,234 | (30,020) | — | |||||||
Schwab Emerging Markets Equity ETF | 366,374 | 56,436 | (23,647) | 399,163 | 9,811,427 | (21,168) | — | |||||||
Schwab U.S. REIT ETF | 170,419 | 39,702 | (17,208) | 192,913 | 7,006,600 | 120,584 | 72,643 | |||||||
Schwab U.S. TIPS ETF | 13,459 | 2,260 | (227) | 15,492 | 839,821 | (765) | — | |||||||
Schwab Intermediate-Term U.S. Treasury ETF | 88,127 | 18,994 | (6,203) | 100,918 | 5,410,214 | 4,253 | 31,897 | |||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3,078,254 | 511 | — | 3,078,765 | 3,078,765 | — | 585 | |||||||
Total | $101,467,711 | $37,125 | $492,438 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$16,386,173 | $4,506,578 |
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
1. | the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates 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; and |
5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement 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 |
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 and Laudus Institutional Trust since 2010) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – present). | 74 | Director, Gilead Sciences, Inc. (2005 – present) |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Private Investor. | 74 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | 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) | 74 | Director, KLA-Tencor Corporation (2008 – present) |
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, Laudus Trust and Laudus Institutional Trust since 2015) | Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 – present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 – Nov. 2014). | 95 | None. |
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 |
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 and Laudus Institutional Trust since 2010) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | 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 and Laudus Institutional Trust since 2010) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust; (Terms of office, and length of Time Served) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) | Chairman and Director, The Charles Schwab Corporation (1986 – present); Chairman and Director of Charles Schwab & Co., Inc. (1971 – present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 – present); Chairman and Director of Charles Schwab Bank (2003 – present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 – present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 – present). | 74 | Chairman and Director, The Charles Schwab Corporation (1986 – present) Director, Yahoo! Inc. (2014 – present) |
Walter W. Bettinger II2 1960 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 and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 – present); Director, Charles Schwab Bank (2006 – present); and Director, Schwab Holdings, Inc. (2008 – present). | 95 | Director, The Charles Schwab Corporation (2008 – present) |
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 Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; 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 (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). |
George Pereira 1964 Treasurer and Principal Financial Officer, Schwab Funds Treasurer and Chief Financial Officer, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 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. (May 2009 – April 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, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 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 (April 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (March 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 (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 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 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, Laudus Trust and Laudus Institutional Trust since 2005) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 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 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab and Laudus Funds’ retirement policy requires that independent trustees retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of Schwab Funds or Laudus Funds to retire from all Boards upon their required retirement date from either Board. |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
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 Boards. |
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 Principal Financial Officer, George Pereira, 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. |
(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) Schwab Annuity Portfolios
By: | /s/ Marie Chandoha | |
Marie Chandoha | ||
Chief Executive Officer | ||
Date: | August 11, 2015 |
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: | August 11, 2015 | |
By: | /s/ George Pereira | |
George Pereira | ||
Principal Financial Officer | ||
Date: | August 11, 2015 |