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, 2016
Item 1: Report(s) to Shareholders.
Schwab Government Money Market Portfolio™ |
Semiannual report dated June 30, 2016 |
Linda Klingman, Vice President and Head of Taxable Money Market Strategies, leads the portfolio management team of Schwab’s prime and government taxable money funds. Ms. Klingman also has overall responsibility for all aspects of the management of the fund. Prior to joining CSIM in 1990, Ms. Klingman was a senior money market trader with AIM Management. She has managed money market funds since 1988. |
Lynn Paschen, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day management of the fund. 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 Maturity1 | |
% of investments | |
1-7 Days | 35.5% |
8-30 Days | 19.9% |
31-60 Days | 11.3% |
61-90 Days | 21.0% |
91-180 Days | 12.3% |
Total | 100.0% |
Statistics | |
Weighted Average Maturity2 | 38 Days |
Credit Quality Of Holdings3 % of portfolio | 100% Tier 1 |
Portfolio Composition by Security Type | |
% of investments | |
U.S. Government Agency Debt | 60.1% |
U.S. Treasury Repurchase Agreements | 35.4% |
U.S. Treasury Debt | 4.4% |
Other Investment Company | 0.1% |
Total | 100.0% |
1 | As shown in the Portfolio Holdings section of the shareholder report. |
2 | 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). |
3 | 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 Financial Services LLC., Moody’s Investors Service, Fitch, Inc., 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 Government Money Market Portfolio | |
Seven-Day Yield | 0.01% |
Seven-Day Effective Yield | 0.01% |
1 | Yield temporarily increased on 11/12/15 as a result of a change in estimated legal expenses for the period. |
2 | Fund 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. |
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/16 | Ending Account Value (Net of Expenses) at 6/30/16 | Expenses Paid During Period2 1/1/16–6/30/16 | |
Schwab Government Money Market Portfolio | ||||
Actual Return | 0.35% | $1,000.00 | $1,000.10 | $ 1.74 |
Hypothetical 5% Return | 0.35% | $1,000.00 | $1,023.16 | $1.76 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. This ratio does not include certain non-routine expenses. |
2 | Expenses for the portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days of the period, and divided by 366 days of the fiscal year. |
1/1/16– 6/30/16* | 1/1/15– 12/31/15 | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 1/1/12– 12/31/12 | 1/1/11– 12/31/11 | |
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 1,2 | 0.00 2 | 0.00 2 | 0.00 2 | 0.00 2 |
Net realized and unrealized gains (losses) | 0.00 2 | (0.00) 2,3 | 0.00 2 | 0.00 2,4 | 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 |
Net asset value at end of period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
Total return | 0.01% 5 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.35% 6,7 | 0.12% 7 | 0.07% 7 | 0.08% 7 | 0.12% 7 | 0.10% 7 |
Gross operating expenses | 0.50% 6 | 0.54% | 0.49% | 0.52% | 0.49% | 0.45% |
Net investment income (loss) | 0.01% 6 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
Net assets, end of period (x 1,000,000) | $113 | $116 | $117 | $106 | $116 | $144 |
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
49.8% | Fixed-Rate Obligations | 56,372,888 | 56,372,888 |
14.8% | Variable-Rate Obligations | 16,700,540 | 16,700,540 |
0.0% | Other Investment Company | 45,600 | 45,600 |
35.5% | Repurchase Agreements | 40,094,165 | 40,094,165 |
100.1% | Total Investments | 113,213,193 | 113,213,193 |
(0.1%) | Other Assets and Liabilities, Net | (83,587) | |
100.0% | Net Assets | 113,129,606 |
Issuer | Footnotes | Rate | Effective Maturity | Maturity Date | Face Amount ($) | Value ($) | ||||||||
Fixed-Rate Obligations 49.8% of net assets | ||||||||||||||
U.S. Government Agency Debt 45.4% | ||||||||||||||
FEDERAL HOME LOAN BANKS | 0.43% | 07/13/16 | 1,700,000 | 1,699,756 | ||||||||||
0.35% | 07/25/16 | 1,000,000 | 999,767 | |||||||||||
0.33% | 07/27/16 | 1,100,000 | 1,099,738 | |||||||||||
0.33% | 08/03/16 | 2,000,000 | 1,999,399 | |||||||||||
0.33% | 08/10/16 | 2,000,000 | 1,999,269 | |||||||||||
0.36% | 08/15/16 | 1,000,000 | 999,544 | |||||||||||
0.46% | 08/18/16 | 2,000,000 | 1,999,947 | |||||||||||
0.43% | 08/19/16 | 3,850,000 | 3,847,751 | |||||||||||
0.47% | 08/31/16 | 4,000,000 | 3,996,841 | |||||||||||
0.39% | 09/06/16 | 5,000,000 | 4,996,371 | |||||||||||
0.38% | 09/22/16 | 750,000 | 749,343 | |||||||||||
0.40% | 09/28/16 | 1,003,000 | 1,002,008 | |||||||||||
0.40% | 10/03/16 | 1,000,000 | 998,955 | |||||||||||
FEDERAL HOME LOAN MORTGAGE CORPORATION | 0.41% | 09/01/16 | 10,000,000 | 9,992,939 | ||||||||||
0.40% | 10/17/16 | 5,000,000 | 4,994,015 | |||||||||||
0.45% | 11/16/16 | 1,000,000 | 998,275 | |||||||||||
0.45% | 12/09/16 | 3,000,000 | 2,994,029 | |||||||||||
FEDERAL NATIONAL MORTGAGE ASSOCIATION | 0.40% | 07/18/16 | 1,000,000 | 999,811 | ||||||||||
0.40% | 07/19/16 | 1,000,000 | 999,800 | |||||||||||
0.43% | 10/05/16 | 3,000,000 | 2,996,560 | |||||||||||
1.38% | 11/15/16 | 1,000,000 | 1,002,974 | |||||||||||
51,367,092 |
Issuer | Footnotes | Rate | Effective Maturity | Maturity Date | Face Amount ($) | Value ($) | ||||||||
U.S. Treasury Debt 4.4% | ||||||||||||||
UNITED STATES TREASURY | 3.25% | 07/31/16 | 1,000,000 | 1,002,313 | ||||||||||
0.50% | 07/31/16 | 1,000,000 | 1,000,045 | |||||||||||
1.00% | 08/31/16 | 3,000,000 | 3,003,438 | |||||||||||
5,005,796 | ||||||||||||||
Total Fixed-Rate Obligations | ||||||||||||||
(Cost $56,372,888) | 56,372,888 | |||||||||||||
Variable-Rate Obligations 14.8% of net assets | ||||||||||||||
U.S. Government Agency Debt 14.8% | ||||||||||||||
FEDERAL HOME LOAN BANKS | 0.41% | 07/26/16 | 08/26/16 | 5,000,000 | 5,000,314 | |||||||||
0.47% | 07/23/16 | 01/23/17 | 5,000,000 | 5,000,000 | ||||||||||
0.46% | 07/15/16 | 03/15/17 | 1,000,000 | 1,000,000 | ||||||||||
FEDERAL HOME LOAN MORTGAGE CORPORATION | 0.49% | 07/13/16 | 11/13/17 | 1,000,000 | 1,000,000 | |||||||||
FEDERAL NATIONAL MORTGAGE ASSOCIATION | 0.46% | 07/16/16 | 08/12/16 | 2,100,000 | 2,100,097 | |||||||||
0.46% | 07/15/16 | 08/15/16 | 2,600,000 | 2,600,129 | ||||||||||
Total Variable-Rate Obligations | ||||||||||||||
(Cost $16,700,540) | 16,700,540 | |||||||||||||
Security | Footnotes | Rate | Number of Shares | Value ($) | ||||||||||
Other Investment Company 0.0% of net assets | ||||||||||||||
Money Market Fund 0.0% | ||||||||||||||
STATE STREET INSTITUTIONAL US GOVERNMENT MONEY MARKET FUND, PREMIER CLASS | (a) | 0.25% | 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 35.5% of net assets | ||||||||||||||
U.S. Treasury Repurchase Agreements 35.5% | ||||||||||||||
BARCLAYS CAPITAL INC | ||||||||||||||
Issued 06/30/16, repurchase date 07/01/16 (Collateralized by U.S. Treasury Securities valued at $3,156,141, 0.88%, due 09/15/16) | 0.40% | 07/01/16 | 3,094,200 | 3,094,165 | ||||||||||
BNP PARIBAS SA | ||||||||||||||
Issued 06/30/16, repurchase date 07/01/16 (Collateralized by U.S. Treasury Securities valued at $11,220,168, 2.00%, due 05/31/21) | 0.40% | 07/01/16 | 11,000,125 | 11,000,000 | ||||||||||
DEUTSCHE BANK SECURITIES INC | ||||||||||||||
Issued 06/30/16, repurchase date 07/01/16 (Collateralized by U.S. Treasury Securities valued at $11,220,083, 3.63%, due 02/15/44) | 0.42% | 07/01/16 | 11,000,132 | 11,000,000 |
Issuer | Footnotes | Rate | Effective Maturity | Maturity Date | Maturity Amount ($) | Value ($) | ||||
JP MORGAN SECURITIES LLC | ||||||||||
Issued 06/30/16, repurchase date 07/01/16 (Collateralized by U.S. Treasury Securities valued at $10,200,066, 2.00% - 2.50%, due 07/31/20 - 11/15/24) | 0.43% | 07/01/16 | 10,000,122 | 10,000,000 | ||||||
WELLS FARGO BANK NA | ||||||||||
Issued 06/30/16, repurchase date 07/01/16 (Collateralized by U.S. Treasury Securities valued at $5,100,122, 1.38% due 02/29/20) | 0.43% | 07/01/16 | 5,000,061 | 5,000,000 | ||||||
Total Repurchase Agreements | ||||||||||
(Cost $40,094,165) | 40,094,165 |
(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 | $— | $56,372,888 | $— | $56,372,888 | |||||
Variable-Rate Obligations1 | — | 16,700,540 | — | 16,700,540 | |||||
Other Investment Company1 | 45,600 | — | — | 45,600 | |||||
Repurchase Agreements1 | — | 40,094,165 | — | 40,094,165 | |||||
Total | $45,600 | $113,167,593 | $— | $113,213,193 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments, at cost and value | $73,119,028 | |
Repurchase agreements, at cost and value | + | 40,094,165 |
Total investments, at cost and value (Note 2a) | 113,213,193 | |
Receivables: | ||
Fund shares sold | 223,904 | |
Interest | + | 33,502 |
Total assets | 113,470,599 | |
Liabilities | ||
Payables: | ||
Investment adviser and administrator fees | 6,061 | |
Fund shares redeemed | 280,651 | |
Distributions to shareholders | 455 | |
Accrued expenses | + | 53,826 |
Total liabilities | 340,993 | |
Net Assets | ||
Total assets | 113,470,599 | |
Total liabilities | – | 340,993 |
Net assets | $113,129,606 | |
Net Assets by Source | ||
Capital received from investors | 113,083,708 | |
Net realized capital gains | 45,898 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$113,129,606 | 113,130,490 | $1.00 | ||
Investment Income | ||
Interest | $205,995 | |
Expenses | ||
Investment adviser and administrator fees | 203,661 | |
Portfolio accounting fees | 21,310 | |
Shareholder reports | 20,227 | |
Professional fees | 19,514 | |
Transfer agent fees | 10,333 | |
Independent trustees' fees | 8,961 | |
Custodian fees | 6,894 | |
Registration fees | 369 | |
Other expenses | + | 932 |
Total expenses | 292,201 | |
Expense reduction by CSIM and its affiliates | – | 91,391 |
Net expenses | – | 200,810 |
Net investment income | 5,185 | |
Realized Gains (Losses) | ||
Net realized gains on investments | 340 | |
Increase in net assets resulting from operations | $5,525 |
Operations | |||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||
Net investment income | $5,185 | $11,444 | |
Net realized gains | + | 340 | 71 |
Increase in net assets from operations | 5,525 | 11,515 | |
Distributions to Shareholders | |||
Distributions from net investment income | ($5,835) | ($11,444) | |
Transactions in Fund Shares* | |||
Shares sold | 46,159,839 | 101,290,851 | |
Shares reinvested | 5,374 | 11,445 | |
Shares redeemed | + | (49,002,821) | (102,019,276) |
Net transactions in fund shares | (2,837,608) | (716,980) | |
Net Assets | |||
Beginning of period | 115,967,524 | 116,684,433 | |
Total decrease | + | (2,837,918) | (716,909) |
End of period | $113,129,606 | $115,967,524 | |
Net investment income not yet distributed | $— | $650 |
* | 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 Government Money Market Portfolio |
(formerly 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% |
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 |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) and President, PIMCO Funds. | 108 | Director, PS Business Parks, Inc. (2005 – 2012) |
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015). | 108 | Director, Gilead Sciences, Inc. (2005 – present) |
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant, LLC (wealth management) (Jan. 2008 – Apr. 2012). | 108 | None |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 108 | 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 and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 108 | Director, KLA-Tencor Corporation (2008 – present) |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Consultant, Patmore Management Consulting (management consulting) (2008 – present). | 108 | None |
Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2015) | Co-Chief Executive Officer, Kudu Investment Management, LLC (financial services) (Jan. 2015 – present); Partner, Kudu Advisors, LLC (financial services) (June 2008 – Jan. 2015); Advisor, Asset International, Inc. (publisher of financial services information) (Aug. 2008 – Jan. 2015). | 108 | None |
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 108 | Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 108 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present) Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Walter W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation (Oct. 2008 – present); President and Chief Executive Officer (Oct. 2008 – present), Director (May 2008 – present), Charles Schwab & Co., Inc.; Director, Charles Schwab Bank (Apr. 2006 – present); and Director, Schwab Holdings, Inc. (May 2008 – present). | 108 | Director, The Charles Schwab Corporation (2008 – present) |
Interested 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 |
Marie A. Chandoha2 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). | 108 | None |
Joseph R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Senior Executive Vice President and Chief Financial Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (July 2015 – present); Executive Vice President and Chief Financial Officer of The Charles Schwab Corporation and Charles Schwab & Co., Inc. (May 2007 – July 2015); Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director, Executive Vice President and Chief Financial Officer, Schwab Holdings, Inc. (May 2007 – present). | 108 | None |
Officers of the Trust | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
Marie A. Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). |
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds (Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial Service Investment Management (May 2005 – Mar. 2011). |
Officers of the Trust (continued) | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Apr. 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – Apr. 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (Apr. 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha, and Mr. Martinetto are Interested Trustees 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 Board. |
Schwab MarketTrack Growth Portfolio II™ |
Semiannual report dated June 30, 2016 |
Zifan Tang, Ph.D., 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 fund. She was appointed portfolio manager of the fund 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 |
Fund: Schwab MarketTrack Growth Portfolio II (11/01/96) | 1.84% | -1.57% | 6.99% | 5.22% |
Growth Composite Index II3 | 1.93% | -0.93% | 7.62% | 5.73% |
S&P 500® Index | 3.84% | 3.99% | 12.10% | 7.42% |
Barclays U.S. Aggregate Bond Index | 5.31% | 6.00% | 3.76% | 5.13% |
Fund Category: Morningstar Allocation – 70% to 85% Equity | 1.87% | -2.11% | 6.49% | 5.33% |
Statistics | |
Number of Holdings | 8 |
Portfolio Turnover Rate5 | 7% |
Asset Class Weightings % of Investments6 | |
Equity Funds – Large-Cap | 40.4% |
Equity Funds – Small-Cap | 20.3% |
Equity Funds – International | 19.5% |
Fixed-Income Funds – Intermediate-Term Bond | 14.9% |
Money Market Funds | 3.0% |
Short-Term Investments | 1.9% |
Total | 100.0% |
Top Holdings % of Net Assets7,8 | |
Schwab S&P 500 Index Fund | 30.4% |
Schwab Small-Cap Index Fund | 20.3% |
Schwab International Index Fund | 19.5% |
Schwab Total Bond Market Fund | 15.0% |
Schwab 1000 Index Fund | 10.1% |
Schwab Variable Share Price Money Fund, Ultra Shares | 3.0% |
Total | 98.3% |
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 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund's returns would have been lower. Fund 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 fund 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 through at least 4/29/18. 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 fund invests mainly in other Schwab Funds. |
7 | This list is not a recommendation of any security by the investment adviser. |
8 | The holdings listed exclude any temporary liquidity investments. |
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/16 | Ending Account Value (Net of Expenses) at 6/30/16 | Expenses Paid During Period2 1/1/16–6/30/16 | |
Schwab MarketTrack Growth Portfolio II | ||||
Actual Return | 0.50% | $1,000.00 | $1,018.40 | $2.51 |
Hypothetical 5% Return | 0.50% | $1,000.00 | $ 1,022.41 | $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 fund invests are not included in this ratio. |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days of the period, and divided by 366 days of the fiscal year. |
1/1/16– 6/30/16* | 1/1/15– 12/31/15 | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 1/1/12– 12/31/12 | 1/1/11– 12/31/11 | |
Per-Share Data | ||||||
Net asset value at beginning of period | $18.48 | $19.43 | $19.30 | $16.04 | $14.50 | $14.89 |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | (0.01) | 0.27 | 0.28 | 0.23 | 0.29 | 0.27 |
Net realized and unrealized gains (losses) | 0.35 | (0.42) | 0.77 | 3.48 | 1.64 | (0.40) |
Total from investment operations | 0.34 | (0.15) | 1.05 | 3.71 | 1.93 | (0.13) |
Less distributions: | ||||||
Distributions from net investment income | (0.31) | (0.31) | (0.26) | (0.30) | (0.39) | (0.26) |
Distributions from net realized gains | (0.58) | (0.49) | (0.66) | (0.15) | — | — |
Total distributions | (0.89) | (0.80) | (0.92) | (0.45) | (0.39) | (0.26) |
Net asset value at end of period | $17.93 | $18.48 | $19.43 | $19.30 | $16.04 | $14.50 |
Total return | 1.84% 2 | (0.93%) | 5.46% | 23.56% | 13.46% | (1.01%) |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.50% 3 | 0.51% 4 | 0.50% | 0.50% | 0.50% | 0.50% |
Gross operating expenses | 0.73% 3 | 0.75% | 0.72% | 0.80% | 0.83% | 0.80% |
Net investment income (loss) | (0.15%) 3 | 1.38% | 1.45% | 1.28% | 1.85% | 1.78% |
Portfolio turnover rate | 7% 2 | 9% | 14% | 13% | 8% | 20% |
Net assets, end of period (x 1,000,000) | $27 | $30 | $33 | $32 | $28 | $28 |
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
98.3% | Other Investment Companies | 17,902,603 | 26,947,242 |
1.9% | Short-Term Investments | 513,044 | 513,044 |
100.2% | Total Investments | 18,415,647 | 27,460,286 |
(0.2%) | Other Assets and Liabilities, Net | (43,151) | |
100.0% | Net Assets | 27,417,135 |
Security | Number of Shares | Value ($) |
Other Investment Companies 98.3% of net assets | ||
Equity Funds 80.3% | ||
International 19.5% | ||
Schwab International Index Fund (a) | 315,953 | 5,342,773 |
Large-Cap 40.5% | ||
Schwab 1000 Index Fund (a) | 53,790 | 2,764,814 |
Schwab S&P 500 Index Fund (a) | 254,363 | 8,330,403 |
11,095,217 | ||
Small-Cap 20.3% | ||
Schwab Small-Cap Index Fund (a) | 225,891 | 5,565,951 |
22,003,941 |
Security | Number of Shares | Value ($) |
Fixed-Income Fund 15.0% | ||
Intermediate-Term Bond 15.0% | ||
Schwab Total Bond Market Fund (a) | 420,249 | 4,105,832 |
Money Market Fund 3.0% | ||
Schwab Variable Share Price Money Fund, Ultra Shares 0.38% (a)(b) | 837,385 | 837,469 |
Total Other Investment Companies | ||
(Cost $17,902,603) | 26,947,242 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 1.9% of net assets | ||
Time Deposits 1.9% | ||
JPMorgan Chase Bank | ||
0.13%, 07/01/16 (c) | 271,051 | 271,051 |
Wells Fargo | ||
0.13%, 07/01/16 (c) | 241,993 | 241,993 |
Total Short-Term Investments | ||
(Cost $513,044) | 513,044 |
(a) | Issuer is affiliated with the fund's adviser. |
(b) | The rate shown is the 7-day yield. |
(c) | The rate shown is the current daily overnight rate. |
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 | $26,947,242 | $— | $— | $26,947,242 | |||||
Short-Term Investments1 | — | 513,044 | — | 513,044 | |||||
Total | $26,947,242 | $513,044 | $— | $27,460,286 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $17,902,603) | $26,947,242 | |
Investments in unaffiliated issuers, (cost $513,044) | + | 513,044 |
Total investments, at value (cost $18,415,647) | 27,460,286 | |
Receivables: | ||
Dividends | 7,590 | |
Fund shares sold | + | 125 |
Total assets | 27,468,001 | |
Liabilities | ||
Payables: | ||
Investments bought | 7,455 | |
Investment adviser and administrator fees | 1,327 | |
Fund shares redeemed | 12,280 | |
Accrued expenses | + | 29,804 |
Total liabilities | 50,866 | |
Net Assets | ||
Total assets | 27,468,001 | |
Total liabilities | – | 50,866 |
Net assets | $27,417,135 | |
Net Assets by Source | ||
Capital received from investors | 18,780,365 | |
Distributions in excess of net investment income | (20,755) | |
Net realized capital losses | (387,114) | |
Net unrealized capital appreciation | 9,044,639 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$27,417,135 | 1,528,809 | $17.93 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $48,315 | |
Interest | + | 400 |
Total investment income | 48,715 | |
Expenses | ||
Investment adviser and administrator fees | 61,112 | |
Professional fees | 13,919 | |
Transfer agent fees | 9,889 | |
Shareholder reports | 6,543 | |
Independent trustees' fees | 5,534 | |
Portfolio accounting fees | 2,384 | |
Custodian fees | 1,283 | |
Other expenses | + | 343 |
Total expenses | 101,007 | |
Expense reduction by CSIM | – | 31,561 |
Net expenses | – | 69,446 |
Net investment loss | (20,731) | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 384,695 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | 114,539 |
Net realized and unrealized gains | 499,234 | |
Increase in net assets resulting from operations | $478,503 |
Operations | |||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||
Net investment income (loss) | ($20,731) | $434,196 | |
Net realized gains | 384,695 | 835,550 | |
Net change in unrealized appreciation (depreciation) | + | 114,539 | (1,562,535) |
Increase (decrease) in net assets from operations | 478,503 | (292,789) | |
Distributions to Shareholders | |||
Distributions from net investment income | (455,658) | (487,490) | |
Distributions from net realized gains | + | (840,934) | (779,283) |
Total distributions | ($1,296,592) | ($1,266,773) |
Transactions in Fund Shares | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 60,444 | $1,117,042 | 86,074 | $1,646,192 | |
Shares reinvested | 72,314 | 1,296,592 | 66,254 | 1,266,773 | |
Shares redeemed | + | (207,271) | (3,805,267) | (225,620) | (4,309,467) |
Net transactions in fund shares | (74,513) | ($1,391,633) | (73,292) | ($1,396,502) | |
Shares Outstanding and Net Assets | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 1,603,322 | $29,626,857 | 1,676,614 | $32,582,921 | |
Total decrease | + | (74,513) | (2,209,722) | (73,292) | (2,956,064) |
End of period | 1,528,809 | $27,417,135 | 1,603,322 | $29,626,857 | |
Distributions in excess of net investment income/Net investment income not yet distributed | ($20,755) | $455,634 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Government Money Market Portfolio™ |
(formerly 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 | 0.3% |
Schwab Variable Share Price Money Fund, Ultra Shares | 0.9% |
* | Less than 0.05% |
Underlying Funds | Balance of Shares Held at 12/31/15 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/16 | Market Value at 06/30/16 | Realized Gains (Losses) 01/01/16 to 06/30/16 | Distributions Received* 01/01/16 to 06/30/16 | |||||||
Schwab International Index Fund | 340,402 | 4,816 | (29,265) | 315,953 | $5,342,773 | ($19,568) | $— | |||||||
Schwab 1000 Index Fund | 60,017 | 530 | (6,757) | 53,790 | 2,764,814 | 51,533 | — | |||||||
Schwab S&P 500 Index Fund | 285,453 | 5,399 | (36,489) | 254,363 | 8,330,403 | 346,561 | — | |||||||
Schwab Small-Cap Index Fund | 240,355 | 10,278 | (24,742) | 225,891 | 5,565,951 | (3,974) | — | |||||||
Schwab Total Bond Market Fund | 472,937 | 14,658 | (67,346) | 420,249 | 4,105,832 | 10,143 | 47,004 | |||||||
Schwab Variable Share Price Money Fund, Ultra Shares | — | 837,385 | — | 837,385 | 837,469 | — | 942 | |||||||
Schwab Value Advantage Money Fund, Ultra Shares (formerly named Institutional Prime Shares) | 536,267 | 300,304 | (836,571) | — | — | — | 369 | |||||||
Total | $26,947,242 | $384,695 | $48,315 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$1,798,888 | $4,062,572 |
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 |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) and President, PIMCO Funds. | 108 | Director, PS Business Parks, Inc. (2005 – 2012) |
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015). | 108 | Director, Gilead Sciences, Inc. (2005 – present) |
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant, LLC (wealth management) (Jan. 2008 – Apr. 2012). | 108 | None |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 108 | 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 and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 108 | Director, KLA-Tencor Corporation (2008 – present) |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Consultant, Patmore Management Consulting (management consulting) (2008 – present). | 108 | None |
Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2015) | Co-Chief Executive Officer, Kudu Investment Management, LLC (financial services) (Jan. 2015 – present); Partner, Kudu Advisors, LLC (financial services) (June 2008 – Jan. 2015); Advisor, Asset International, Inc. (publisher of financial services information) (Aug. 2008 – Jan. 2015). | 108 | None |
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 108 | Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 108 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present) Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Walter W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation (Oct. 2008 – present); President and Chief Executive Officer (Oct. 2008 – present), Director (May 2008 – present), Charles Schwab & Co., Inc.; Director, Charles Schwab Bank (Apr. 2006 – present); and Director, Schwab Holdings, Inc. (May 2008 – present). | 108 | Director, The Charles Schwab Corporation (2008 – present) |
Interested 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 |
Marie A. Chandoha2 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). | 108 | None |
Joseph R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Senior Executive Vice President and Chief Financial Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (July 2015 – present); Executive Vice President and Chief Financial Officer of The Charles Schwab Corporation and Charles Schwab & Co., Inc. (May 2007 – July 2015); Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director, Executive Vice President and Chief Financial Officer, Schwab Holdings, Inc. (May 2007 – present). | 108 | None |
Officers of the Trust | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
Marie A. Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). |
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds (Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial Service Investment Management (May 2005 – Mar. 2011). |
Officers of the Trust (continued) | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Apr. 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – Apr. 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (Apr. 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha, and Mr. Martinetto are Interested Trustees 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 Board. |
Schwab S&P 500 Index Portfolio |
Semiannual report dated June 30, 2016 |
Agnes Hong, CFA, Vice President and Head of Passive Equity Strategies, leads the portfolio management teams of Schwab's passive equity funds and ETFs, which comprise the Schwab Equity Index Funds, the Schwab Fundamental Index Funds, and the Schwab Equity ETFs. She also has overall responsibility for all aspects of the management of the fund. 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 fund. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent more than 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 fund. 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 |
Fund: Schwab S&P 500 Index Portfolio (11/01/96) | 3.69% | 3.73% | 11.85% | 7.27% |
S&P 500® Index | 3.84% | 3.99% | 12.10% | 7.42% |
Fund Category: Morningstar Large-Cap Blend | 2.75% | 1.14% | 10.67% | 6.55% |
Statistics | |
Number of Holdings | 507 |
Weighted Average Market Cap ($ x 1,000,000) | $137,337 |
Price/Earnings Ratio (P/E) | 23.9 |
Price/Book Ratio (P/B) | 2.7 |
Portfolio Turnover Rate4 | 1% |
Sector Weightings % of Investments | |
Information Technology | 19.6% |
Financials | 15.6% |
Health Care | 14.6% |
Consumer Discretionary | 12.2% |
Consumer Staples | 10.5% |
Industrials | 10.1% |
Energy | 7.3% |
Utilities | 3.6% |
Telecommunication Services | 2.9% |
Materials | 2.9% |
Other | 0.7% |
Total | 100.0% |
Top Equity Holdings % of Net Assets5 | |
Apple, Inc. | 2.9% |
Microsoft Corp. | 2.2% |
Exxon Mobil Corp. | 2.1% |
Johnson & Johnson | 1.8% |
General Electric Co. | 1.6% |
Amazon.com, Inc. | 1.5% |
Berkshire Hathaway, Inc., Class B | 1.5% |
AT&T, Inc. | 1.5% |
Facebook, Inc., Class A | 1.4% |
Verizon Communications, Inc. | 1.2% |
Total | 17.7% |
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 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund's returns would have been lower. Fund 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. |
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/16 | Ending Account Value (Net of Expenses) at 6/30/16 | Expenses Paid During Period2 1/1/16–6/30/16 | |
Schwab S&P 500 Index Portfolio | ||||
Actual Return | 0.22% | $1,000.00 | $1,036.90 | $1.11 |
Hypothetical 5% Return | 0.22% | $1,000.00 | $ 1,023.81 | $1.11 |
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 fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days of the period, and divided by 366 days of the fiscal year. |
1/1/16– 6/30/16* | 1/1/15– 12/31/15 | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 1/1/12– 12/31/12 | 1/1/11– 12/31/11 | |
Per-Share Data | ||||||
Net asset value at beginning of period | $30.09 | $30.21 | $27.03 | $20.82 | $18.30 | $18.27 |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.31 1 | 0.59 1 | 0.48 | 0.42 | 0.41 | 0.34 |
Net realized and unrealized gains (losses) | 0.80 | (0.24) | 3.12 | 6.19 | 2.45 | 0.02 2 |
Total from investment operations | 1.11 | 0.35 | 3.60 | 6.61 | 2.86 | 0.36 |
Less distributions: | ||||||
Distributions from net investment income | (0.55) | (0.47) | (0.42) | (0.40) | (0.34) | (0.33) |
Net asset value at end of period | $30.65 | $30.09 | $30.21 | $27.03 | $20.82 | $18.30 |
Total return | 3.69% 3 | 1.17% | 13.41% | 32.06% | 15.74% | 1.89% |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.22% 4 | 0.24% | 0.22% | 0.24% | 0.28% | 0.27% |
Gross operating expenses | 0.23% 4 | 0.24% | 0.23% | 0.26% | 0.29% | 0.28% |
Net investment income (loss) | 2.07% 4 | 1.94% | 1.79% | 1.84% | 2.03% | 1.82% |
Portfolio turnover rate | 1% 3 | 3% | 2% | 2% | 4% | 4% |
Net assets, end of period (x 1,000,000) | $260 | $245 | $229 | $193 | $139 | $122 |
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
99.1% | Common Stock | 137,552,251 | 257,410,874 |
0.0% | Other Investment Companies | 93,575 | 93,575 |
0.7% | Short-Term Investments | 1,724,663 | 1,724,663 |
99.8% | Total Investments | 139,370,489 | 259,229,112 |
0.2% | Other Assets and Liabilities, Net | 417,986 | |
100.0% | Net Assets | 259,647,098 |
Security | Number of Shares | Value ($) |
Common Stock 99.1% of net assets | ||
Automobiles & Components 0.8% | ||
BorgWarner, Inc. | 3,100 | 91,512 |
Delphi Automotive plc | 3,858 | 241,511 |
Ford Motor Co. | 55,502 | 697,660 |
General Motors Co. | 19,795 | 560,198 |
Harley-Davidson, Inc. | 2,702 | 122,401 |
Johnson Controls, Inc. | 9,094 | 402,500 |
The Goodyear Tire & Rubber Co. | 3,662 | 93,967 |
2,209,749 | ||
Banks 5.2% | ||
Bank of America Corp. | 144,664 | 1,919,691 |
BB&T Corp. | 11,692 | 416,352 |
Citigroup, Inc. | 41,376 | 1,753,928 |
Citizens Financial Group, Inc. | 7,192 | 143,696 |
Comerica, Inc. | 2,430 | 99,946 |
Fifth Third Bancorp | 12,105 | 212,927 |
Huntington Bancshares, Inc. | 10,456 | 93,477 |
JPMorgan Chase & Co. | 51,758 | 3,216,242 |
KeyCorp | 11,200 | 123,760 |
M&T Bank Corp. | 2,171 | 256,677 |
People's United Financial, Inc. | 5,100 | 74,766 |
Regions Financial Corp. | 17,127 | 145,751 |
SunTrust Banks, Inc. | 7,200 | 295,776 |
The PNC Financial Services Group, Inc. | 7,120 | 579,497 |
U.S. Bancorp | 22,754 | 917,669 |
Wells Fargo & Co. | 65,215 | 3,086,626 |
Zions Bancorp | 2,908 | 73,078 |
13,409,859 |
Security | Number of Shares | Value ($) |
Capital Goods 7.4% | ||
3M Co. | 8,451 | 1,479,939 |
Acuity Brands, Inc. | 600 | 148,776 |
Allegion plc | 1,233 | 85,607 |
AMETEK, Inc. | 3,409 | 157,598 |
Caterpillar, Inc. | 8,231 | 623,992 |
Cummins, Inc. | 2,379 | 267,495 |
Danaher Corp. | 8,307 | 839,007 |
Deere & Co. | 4,257 | 344,987 |
Dover Corp. | 2,100 | 145,572 |
Eaton Corp. plc | 6,734 | 402,222 |
Emerson Electric Co. | 8,911 | 464,798 |
Fastenal Co. | 3,952 | 175,429 |
Flowserve Corp. | 1,700 | 76,789 |
Fluor Corp. | 2,000 | 98,560 |
Fortune Brands Home & Security, Inc. | 2,200 | 127,534 |
General Dynamics Corp. | 4,045 | 563,226 |
General Electric Co. | 131,576 | 4,142,012 |
Honeywell International, Inc. | 10,869 | 1,264,282 |
Illinois Tool Works, Inc. | 4,673 | 486,740 |
Ingersoll-Rand plc | 3,600 | 229,248 |
Jacobs Engineering Group, Inc. * | 1,583 | 78,849 |
L-3 Communications Holdings, Inc. | 1,100 | 161,359 |
Lockheed Martin Corp. | 3,730 | 925,674 |
Masco Corp. | 4,821 | 149,162 |
Northrop Grumman Corp. | 2,554 | 567,703 |
PACCAR, Inc. | 5,130 | 266,093 |
Parker-Hannifin Corp. | 1,835 | 198,272 |
Pentair plc | 2,399 | 139,838 |
Quanta Services, Inc. * | 2,497 | 57,731 |
Raytheon Co. | 4,213 | 572,757 |
Rockwell Automation, Inc. | 1,785 | 204,954 |
Rockwell Collins, Inc. | 1,900 | 161,766 |
Roper Technologies, Inc. | 1,379 | 235,202 |
Snap-on, Inc. | 788 | 124,362 |
Stanley Black & Decker, Inc. | 2,223 | 247,242 |
Textron, Inc. | 3,674 | 134,321 |
The Boeing Co. | 8,619 | 1,119,350 |
TransDigm Group, Inc. * | 750 | 197,767 |
United Rentals, Inc. * | 1,200 | 80,520 |
United Technologies Corp. | 10,854 | 1,113,078 |
W.W. Grainger, Inc. | 842 | 191,345 |
Xylem, Inc. | 2,695 | 120,332 |
19,171,490 | ||
Commercial & Professional Supplies 0.7% | ||
Cintas Corp. | 1,157 | 113,536 |
Equifax, Inc. | 1,742 | 223,673 |
Nielsen Holdings plc | 4,983 | 258,967 |
Pitney Bowes, Inc. | 2,900 | 51,620 |
Republic Services, Inc. | 3,136 | 160,908 |
Robert Half International, Inc. | 1,750 | 66,780 |
Stericycle, Inc. * | 1,300 | 135,356 |
The Dun & Bradstreet Corp. | 500 | 60,920 |
Tyco International plc | 5,813 | 247,634 |
Verisk Analytics, Inc. * | 2,100 | 170,268 |
Waste Management, Inc. | 5,655 | 374,757 |
1,864,419 |
Security | Number of Shares | Value ($) |
Consumer Durables & Apparel 1.4% | ||
Coach, Inc. | 3,894 | 158,641 |
D.R. Horton, Inc. | 4,522 | 142,352 |
Garmin Ltd. | 1,500 | 63,630 |
Hanesbrands, Inc. | 5,646 | 141,884 |
Harman International Industries, Inc. | 1,200 | 86,184 |
Hasbro, Inc. | 1,675 | 140,683 |
Leggett & Platt, Inc. | 1,900 | 97,109 |
Lennar Corp., Class A | 2,300 | 106,030 |
Mattel, Inc. | 4,800 | 150,192 |
Michael Kors Holdings Ltd. * | 2,700 | 133,596 |
Mohawk Industries, Inc. * | 900 | 170,784 |
Newell Brands, Inc. | 6,324 | 307,157 |
NIKE, Inc., Class B | 18,914 | 1,044,053 |
PulteGroup, Inc. | 4,442 | 86,575 |
PVH Corp. | 1,086 | 102,334 |
Ralph Lauren Corp. | 742 | 66,498 |
Under Armour, Inc., Class A *(b) | 2,452 | 98,399 |
Under Armour, Inc., Class C * | 2,469 | 89,886 |
VF Corp. | 4,940 | 303,761 |
Whirlpool Corp. | 1,133 | 188,803 |
3,678,551 | ||
Consumer Services 1.7% | ||
Carnival Corp. | 6,322 | 279,432 |
Chipotle Mexican Grill, Inc. * | 409 | 164,729 |
Darden Restaurants, Inc. | 1,591 | 100,774 |
H&R Block, Inc. | 3,738 | 85,974 |
Marriott International, Inc., Class A | 2,657 | 176,584 |
McDonald's Corp. | 12,382 | 1,490,050 |
Royal Caribbean Cruises Ltd. | 2,400 | 161,160 |
Starbucks Corp. | 20,788 | 1,187,411 |
Starwood Hotels & Resorts Worldwide, Inc. | 2,361 | 174,596 |
Wyndham Worldwide Corp. | 1,580 | 112,543 |
Wynn Resorts Ltd. | 1,057 | 95,807 |
Yum! Brands, Inc. | 5,900 | 489,228 |
4,518,288 | ||
Diversified Financials 4.6% | ||
Affiliated Managers Group, Inc. * | 700 | 98,539 |
American Express Co. | 11,672 | 709,191 |
Ameriprise Financial, Inc. | 2,363 | 212,316 |
Berkshire Hathaway, Inc., Class B * | 26,416 | 3,824,773 |
BlackRock, Inc. | 1,750 | 599,427 |
Capital One Financial Corp. | 7,380 | 468,704 |
CME Group, Inc. | 4,831 | 470,539 |
Discover Financial Services | 5,890 | 315,645 |
E*TRADE Financial Corp. * | 4,176 | 98,094 |
Franklin Resources, Inc. | 5,600 | 186,872 |
Intercontinental Exchange, Inc. | 1,659 | 424,638 |
Invesco Ltd. | 5,704 | 145,680 |
Legg Mason, Inc. | 1,300 | 38,337 |
Leucadia National Corp. | 4,639 | 80,394 |
Moody's Corp. | 2,423 | 227,059 |
Morgan Stanley | 21,599 | 561,142 |
Nasdaq, Inc. | 1,600 | 103,472 |
Navient Corp. | 5,000 | 59,750 |
Northern Trust Corp. | 3,131 | 207,460 |
Security | Number of Shares | Value ($) |
S&P Global, Inc. | 3,730 | 400,080 |
State Street Corp. | 5,700 | 307,344 |
Synchrony Financial * | 11,692 | 295,574 |
T. Rowe Price Group, Inc. | 3,523 | 257,073 |
The Bank of New York Mellon Corp. | 15,078 | 585,780 |
The Charles Schwab Corp. (a) | 16,949 | 428,979 |
The Goldman Sachs Group, Inc. | 5,670 | 842,449 |
11,949,311 | ||
Energy 7.3% | ||
Anadarko Petroleum Corp. | 7,083 | 377,170 |
Apache Corp. | 5,208 | 289,929 |
Baker Hughes, Inc. | 6,263 | 282,649 |
Cabot Oil & Gas Corp. | 6,820 | 175,547 |
Chesapeake Energy Corp. * | 9,356 | 40,044 |
Chevron Corp. | 26,816 | 2,811,121 |
Cimarex Energy Co. | 1,351 | 161,201 |
Columbia Pipeline Group, Inc. | 5,892 | 150,187 |
Concho Resources, Inc. * | 1,900 | 226,613 |
ConocoPhillips | 17,105 | 745,778 |
Devon Energy Corp. | 7,032 | 254,910 |
Diamond Offshore Drilling, Inc. | 800 | 19,464 |
EOG Resources, Inc. | 7,875 | 656,933 |
EQT Corp. | 2,600 | 201,318 |
Exxon Mobil Corp. | 58,792 | 5,511,162 |
FMC Technologies, Inc. * | 3,246 | 86,571 |
Halliburton Co. | 11,895 | 538,725 |
Helmerich & Payne, Inc. | 1,500 | 100,695 |
Hess Corp. | 3,933 | 236,373 |
Kinder Morgan, Inc. | 25,300 | 473,616 |
Marathon Oil Corp. | 12,768 | 191,648 |
Marathon Petroleum Corp. | 7,364 | 279,537 |
Murphy Oil Corp. | 2,032 | 64,516 |
National Oilwell Varco, Inc. | 5,001 | 168,284 |
Newfield Exploration Co. * | 3,141 | 138,769 |
Noble Energy, Inc. | 5,712 | 204,889 |
Occidental Petroleum Corp. | 10,897 | 823,377 |
ONEOK, Inc. | 3,300 | 156,585 |
Phillips 66 | 6,608 | 524,279 |
Pioneer Natural Resources Co. | 2,385 | 360,636 |
Range Resources Corp. | 2,214 | 95,512 |
Schlumberger Ltd. | 19,594 | 1,549,494 |
Southwestern Energy Co. * | 6,973 | 87,720 |
Spectra Energy Corp. | 9,548 | 349,743 |
Tesoro Corp. | 1,600 | 119,872 |
The Williams Cos., Inc. | 9,190 | 198,780 |
Transocean Ltd. | 4,624 | 54,979 |
Valero Energy Corp. | 6,665 | 339,915 |
19,048,541 | ||
Food & Staples Retailing 2.3% | ||
Costco Wholesale Corp. | 6,275 | 985,426 |
CVS Health Corp. | 15,019 | 1,437,919 |
Sysco Corp. | 7,464 | 378,723 |
The Kroger Co. | 13,910 | 511,749 |
Wal-Mart Stores, Inc. | 21,382 | 1,561,314 |
Walgreens Boots Alliance, Inc. | 11,921 | 992,662 |
Whole Foods Market, Inc. | 5,000 | 160,100 |
6,027,893 |
Security | Number of Shares | Value ($) |
Food, Beverage & Tobacco 6.0% | ||
Altria Group, Inc. | 27,606 | 1,903,710 |
Archer-Daniels-Midland Co. | 8,235 | 353,199 |
Brown-Forman Corp., Class B | 1,427 | 142,358 |
Campbell Soup Co. | 2,545 | 169,319 |
ConAgra Foods, Inc. | 6,278 | 300,151 |
Constellation Brands, Inc., Class A | 2,520 | 416,808 |
Dr Pepper Snapple Group, Inc. | 2,500 | 241,575 |
General Mills, Inc. | 8,158 | 581,829 |
Hormel Foods Corp. | 3,808 | 139,373 |
Kellogg Co. | 3,400 | 277,610 |
McCormick & Co., Inc. — Non Voting Shares | 1,600 | 170,672 |
Mead Johnson Nutrition Co. | 2,800 | 254,100 |
Molson Coors Brewing Co., Class B | 2,624 | 265,365 |
Mondelez International, Inc., Class A | 22,096 | 1,005,589 |
Monster Beverage Corp. * | 2,100 | 337,491 |
PepsiCo, Inc. | 20,292 | 2,149,734 |
Philip Morris International, Inc. | 22,071 | 2,245,062 |
Reynolds American, Inc. | 11,894 | 641,443 |
The Coca-Cola Co. | 55,145 | 2,499,723 |
The Hershey Co. | 2,044 | 231,974 |
The JM Smucker Co. | 1,646 | 250,867 |
The Kraft Heinz Co. | 8,336 | 737,569 |
Tyson Foods, Inc., Class A | 4,108 | 274,373 |
15,589,894 | ||
Health Care Equipment & Services 5.3% | ||
Abbott Laboratories | 21,007 | 825,785 |
Aetna, Inc. | 4,882 | 596,239 |
AmerisourceBergen Corp. | 2,760 | 218,923 |
Anthem, Inc. | 3,636 | 477,552 |
Baxter International, Inc. | 7,527 | 340,371 |
Becton, Dickinson & Co. | 3,087 | 523,524 |
Boston Scientific Corp. * | 18,577 | 434,145 |
C.R. Bard, Inc. | 1,020 | 239,863 |
Cardinal Health, Inc. | 4,624 | 360,718 |
Centene Corp. * | 2,400 | 171,288 |
Cerner Corp. * | 4,200 | 246,120 |
Cigna Corp. | 3,591 | 459,612 |
DaVita HealthCare Partners, Inc. * | 2,230 | 172,424 |
DENTSPLY SIRONA, Inc. | 3,300 | 204,732 |
Edwards Lifesciences Corp. * | 3,006 | 299,788 |
Express Scripts Holding Co. * | 9,237 | 700,165 |
HCA Holdings, Inc. * | 4,200 | 323,442 |
Henry Schein, Inc. * | 1,200 | 212,160 |
Hologic, Inc. * | 3,400 | 117,640 |
Humana, Inc. | 2,080 | 374,150 |
Intuitive Surgical, Inc. * | 551 | 364,437 |
Laboratory Corp. of America Holdings * | 1,404 | 182,899 |
McKesson Corp. | 3,168 | 591,307 |
Medtronic plc | 19,805 | 1,718,480 |
Patterson Cos., Inc. | 1,280 | 61,299 |
Quest Diagnostics, Inc. | 1,960 | 159,564 |
St. Jude Medical, Inc. | 3,978 | 310,284 |
Stryker Corp. | 4,507 | 540,074 |
UnitedHealth Group, Inc. | 13,381 | 1,889,397 |
Security | Number of Shares | Value ($) |
Universal Health Services, Inc., Class B | 1,300 | 174,330 |
Varian Medical Systems, Inc. * | 1,300 | 106,899 |
Zimmer Biomet Holdings, Inc. | 2,583 | 310,942 |
13,708,553 | ||
Household & Personal Products 2.1% | ||
Church & Dwight Co., Inc. | 1,700 | 174,913 |
Colgate-Palmolive Co. | 12,478 | 913,390 |
Kimberly-Clark Corp. | 5,113 | 702,935 |
The Clorox Co. | 1,800 | 249,102 |
The Estee Lauder Cos., Inc., Class A | 3,200 | 291,264 |
The Procter & Gamble Co. | 37,410 | 3,167,505 |
5,499,109 | ||
Insurance 2.7% | ||
Aflac, Inc. | 5,963 | 430,290 |
American International Group, Inc. | 16,295 | 861,842 |
Aon plc | 3,810 | 416,166 |
Arthur J. Gallagher & Co. | 2,500 | 119,000 |
Assurant, Inc. | 800 | 69,048 |
Chubb Ltd. | 6,490 | 848,308 |
Cincinnati Financial Corp. | 2,199 | 164,683 |
Lincoln National Corp. | 3,262 | 126,468 |
Loews Corp. | 3,891 | 159,881 |
Marsh & McLennan Cos., Inc. | 7,298 | 499,621 |
MetLife, Inc. | 15,362 | 611,868 |
Principal Financial Group, Inc. | 3,663 | 150,586 |
Prudential Financial, Inc. | 6,214 | 443,307 |
The Allstate Corp. | 5,421 | 379,199 |
The Hartford Financial Services Group, Inc. | 5,615 | 249,194 |
The Progressive Corp. | 7,973 | 267,095 |
The Travelers Cos., Inc. | 4,239 | 504,611 |
Torchmark Corp. | 1,600 | 98,912 |
Unum Group | 3,453 | 109,771 |
Willis Towers Watson plc | 1,941 | 241,286 |
XL Group plc | 4,100 | 136,571 |
6,887,707 | ||
Materials 2.8% | ||
Air Products & Chemicals, Inc. | 2,709 | 384,786 |
Albemarle Corp. | 1,588 | 125,944 |
Alcoa, Inc. | 17,755 | 164,589 |
Avery Dennison Corp. | 1,300 | 97,175 |
Ball Corp. | 2,459 | 177,761 |
CF Industries Holdings, Inc. | 3,075 | 74,108 |
E.I. du Pont de Nemours & Co. | 12,200 | 790,560 |
Eastman Chemical Co. | 2,000 | 135,800 |
Ecolab, Inc. | 3,897 | 462,184 |
FMC Corp. | 1,700 | 78,727 |
Freeport-McMoRan, Inc. | 18,077 | 201,378 |
International Flavors & Fragrances, Inc. | 1,100 | 138,677 |
International Paper Co. | 5,598 | 237,243 |
LyondellBasell Industries N.V., Class A | 4,863 | 361,905 |
Martin Marietta Materials, Inc. | 900 | 172,800 |
Monsanto Co. | 6,262 | 647,554 |
Security | Number of Shares | Value ($) |
Newmont Mining Corp. | 7,552 | 295,434 |
Nucor Corp. | 4,399 | 217,355 |
Owens-Illinois, Inc. * | 2,000 | 36,020 |
PPG Industries, Inc. | 3,708 | 386,188 |
Praxair, Inc. | 4,062 | 456,528 |
Sealed Air Corp. | 2,828 | 130,003 |
The Dow Chemical Co. | 15,805 | 785,667 |
The Mosaic Co. | 5,400 | 141,372 |
The Sherwin-Williams Co. | 1,093 | 320,981 |
Vulcan Materials Co. | 1,955 | 235,304 |
WestRock Co. | 3,628 | 141,020 |
7,397,063 | ||
Media 2.7% | ||
CBS Corp., Class B — Non Voting Shares | 5,780 | 314,663 |
Comcast Corp., Class A | 34,292 | 2,235,495 |
Discovery Communications, Inc., Class A * | 1,700 | 42,891 |
Discovery Communications, Inc., Class C * | 3,900 | 93,015 |
News Corp., Class A | 6,448 | 73,185 |
News Corp., Class B | 1,100 | 12,837 |
Omnicom Group, Inc. | 3,340 | 272,177 |
Scripps Networks Interactive, Inc., Class A | 1,500 | 93,405 |
TEGNA, Inc. | 2,960 | 68,583 |
The Interpublic Group of Cos., Inc. | 5,697 | 131,601 |
The Walt Disney Co. | 21,058 | 2,059,894 |
Time Warner, Inc. | 11,027 | 810,926 |
Twenty-First Century Fox, Inc., Class A | 15,958 | 431,664 |
Twenty-First Century Fox, Inc., Class B | 6,100 | 166,225 |
Viacom, Inc., Class B | 4,816 | 199,719 |
7,006,280 | ||
Pharmaceuticals, Biotechnology & Life Sciences 9.3% | ||
AbbVie, Inc. | 22,709 | 1,405,914 |
Agilent Technologies, Inc. | 4,601 | 204,100 |
Alexion Pharmaceuticals, Inc. * | 3,139 | 366,510 |
Allergan plc * | 5,547 | 1,281,856 |
Amgen, Inc. | 10,603 | 1,613,246 |
Biogen, Inc. * | 3,086 | 746,257 |
Bristol-Myers Squibb Co. | 23,473 | 1,726,439 |
Celgene Corp. * | 10,975 | 1,082,464 |
Eli Lilly & Co. | 13,605 | 1,071,394 |
Endo International plc * | 2,900 | 45,211 |
Gilead Sciences, Inc. | 19,161 | 1,598,411 |
Illumina, Inc. * | 2,100 | 294,798 |
Johnson & Johnson | 38,810 | 4,707,653 |
Mallinckrodt plc * | 1,500 | 91,170 |
Merck & Co., Inc. | 39,127 | 2,254,106 |
Mylan N.V. * | 5,891 | 254,727 |
PerkinElmer, Inc. | 1,500 | 78,630 |
Perrigo Co., plc | 2,034 | 184,423 |
Pfizer, Inc. | 86,176 | 3,034,257 |
Regeneron Pharmaceuticals, Inc. * | 1,137 | 397,075 |
Thermo Fisher Scientific, Inc. | 5,550 | 820,068 |
Vertex Pharmaceuticals, Inc. * | 3,601 | 309,758 |
Security | Number of Shares | Value ($) |
Waters Corp. * | 1,100 | 154,715 |
Zoetis, Inc. | 6,422 | 304,788 |
24,027,970 | ||
Real Estate 3.2% | ||
American Tower Corp. | 6,048 | 687,113 |
Apartment Investment & Management Co., Class A | 2,677 | 118,216 |
AvalonBay Communities, Inc. | 1,908 | 344,184 |
Boston Properties, Inc. | 2,109 | 278,177 |
CBRE Group, Inc., Class A * | 4,000 | 105,920 |
Crown Castle International Corp. | 4,703 | 477,025 |
Digital Realty Trust, Inc. | 2,200 | 239,778 |
Equinix, Inc. | 1,018 | 394,709 |
Equity Residential | 5,100 | 351,288 |
Essex Property Trust, Inc. | 900 | 205,281 |
Extra Space Storage, Inc. | 1,700 | 157,318 |
Federal Realty Investment Trust | 946 | 156,610 |
General Growth Properties, Inc. | 7,900 | 235,578 |
HCP, Inc. | 7,116 | 251,764 |
Host Hotels & Resorts, Inc. | 10,460 | 169,557 |
Iron Mountain, Inc. | 2,787 | 111,006 |
Kimco Realty Corp. | 5,420 | 170,080 |
Prologis, Inc. | 7,710 | 378,098 |
Public Storage | 2,052 | 524,471 |
Realty Income Corp. | 3,500 | 242,760 |
Simon Property Group, Inc. | 4,401 | 954,577 |
SL Green Realty Corp. | 1,300 | 138,411 |
The Macerich Co. | 1,807 | 154,300 |
UDR, Inc. | 3,600 | 132,912 |
Ventas, Inc. | 4,819 | 350,920 |
Vornado Realty Trust | 2,360 | 236,283 |
Welltower, Inc. | 5,262 | 400,807 |
Weyerhaeuser Co. | 11,194 | 333,245 |
8,300,388 | ||
Retailing 5.5% | ||
Advance Auto Parts, Inc. | 1,000 | 161,630 |
Amazon.com, Inc. * | 5,450 | 3,900,129 |
AutoNation, Inc. * | 900 | 42,282 |
AutoZone, Inc. * | 400 | 317,536 |
Bed Bath & Beyond, Inc. | 2,316 | 100,097 |
Best Buy Co., Inc. | 4,221 | 129,163 |
CarMax, Inc. * | 2,726 | 133,656 |
Dollar General Corp. | 3,985 | 374,590 |
Dollar Tree, Inc. * | 3,334 | 314,196 |
Expedia, Inc. | 1,650 | 175,395 |
Foot Locker, Inc. | 1,900 | 104,234 |
Genuine Parts Co. | 2,100 | 212,625 |
Kohl's Corp. | 2,682 | 101,701 |
L Brands, Inc. | 3,564 | 239,251 |
LKQ Corp. * | 4,500 | 142,650 |
Lowe's Cos., Inc. | 12,373 | 979,570 |
Macy's, Inc. | 4,322 | 145,262 |
Netflix, Inc. * | 6,037 | 552,265 |
Nordstrom, Inc. | 1,750 | 66,587 |
O'Reilly Automotive, Inc. * | 1,409 | 381,980 |
Ross Stores, Inc. | 5,678 | 321,886 |
Signet Jewelers Ltd. | 1,100 | 90,651 |
Staples, Inc. | 8,250 | 71,115 |
Security | Number of Shares | Value ($) |
Target Corp. | 8,376 | 584,812 |
The Gap, Inc. | 3,476 | 73,761 |
The Home Depot, Inc. | 17,774 | 2,269,562 |
The Priceline Group, Inc. * | 709 | 885,123 |
The TJX Cos., Inc. | 9,420 | 727,507 |
Tiffany & Co. | 1,726 | 104,665 |
Tractor Supply Co. | 1,900 | 173,242 |
TripAdvisor, Inc. * | 1,500 | 96,450 |
Ulta Salon, Cosmetics & Fragrance, Inc. * | 890 | 216,840 |
Urban Outfitters, Inc. * | 1,200 | 33,000 |
14,223,413 | ||
Semiconductors & Semiconductor Equipment 2.8% | ||
Analog Devices, Inc. | 4,430 | 250,915 |
Applied Materials, Inc. | 15,655 | 375,250 |
Broadcom Ltd. | 5,204 | 808,702 |
First Solar, Inc. * | 1,100 | 53,328 |
Intel Corp. | 66,684 | 2,187,235 |
KLA-Tencor Corp. | 2,200 | 161,150 |
Lam Research Corp. | 2,312 | 194,347 |
Linear Technology Corp. | 3,430 | 159,598 |
Microchip Technology, Inc. | 3,000 | 152,280 |
Micron Technology, Inc. * | 15,057 | 207,184 |
NVIDIA Corp. | 7,068 | 332,267 |
Qorvo, Inc. * | 1,950 | 107,757 |
QUALCOMM, Inc. | 20,950 | 1,122,291 |
Skyworks Solutions, Inc. | 2,600 | 164,528 |
Texas Instruments, Inc. | 14,268 | 893,890 |
Xilinx, Inc. | 3,513 | 162,055 |
7,332,777 | ||
Software & Services 11.9% | ||
Accenture plc, Class A | 8,934 | 1,012,133 |
Activision Blizzard, Inc. | 7,200 | 285,336 |
Adobe Systems, Inc. * | 7,035 | 673,883 |
Akamai Technologies, Inc. * | 2,375 | 132,834 |
Alliance Data Systems Corp. * | 816 | 159,871 |
Alphabet, Inc., Class A * | 4,123 | 2,900,654 |
Alphabet, Inc., Class C * | 4,195 | 2,903,359 |
Autodesk, Inc. * | 3,020 | 163,503 |
Automatic Data Processing, Inc. | 6,615 | 607,720 |
CA, Inc. | 4,044 | 132,764 |
Citrix Systems, Inc. * | 2,060 | 164,985 |
Cognizant Technology Solutions Corp., Class A * | 8,440 | 483,106 |
CSRA, Inc. | 1,900 | 44,517 |
eBay, Inc. * | 14,997 | 351,080 |
Electronic Arts, Inc. * | 4,252 | 322,131 |
Facebook, Inc., Class A * | 32,653 | 3,731,585 |
Fidelity National Information Services, Inc. | 3,800 | 279,984 |
Fiserv, Inc. * | 3,120 | 339,238 |
Global Payments, Inc. | 2,100 | 149,898 |
International Business Machines Corp. | 12,378 | 1,878,733 |
Intuit, Inc. | 3,696 | 412,511 |
MasterCard, Inc., Class A | 13,886 | 1,222,801 |
Microsoft Corp. | 111,412 | 5,700,952 |
Oracle Corp. | 44,562 | 1,823,923 |
Security | Number of Shares | Value ($) |
Paychex, Inc. | 4,446 | 264,537 |
PayPal Holdings, Inc. * | 15,697 | 573,097 |
Red Hat, Inc. * | 2,474 | 179,612 |
salesforce.com, Inc. * | 8,869 | 704,287 |
Symantec Corp. | 9,187 | 188,701 |
Teradata Corp. * | 1,780 | 44,625 |
The Western Union Co. | 6,559 | 125,802 |
Total System Services, Inc. | 2,400 | 127,464 |
VeriSign, Inc. * | 1,425 | 123,205 |
Visa, Inc., Class A | 27,084 | 2,008,820 |
Xerox Corp. | 14,267 | 135,394 |
Yahoo! Inc. * | 12,294 | 461,763 |
30,814,808 | ||
Technology Hardware & Equipment 4.9% | ||
Amphenol Corp., Class A | 4,400 | 252,252 |
Apple, Inc. | 77,921 | 7,449,248 |
Cisco Systems, Inc. | 70,561 | 2,024,395 |
Corning, Inc. | 16,065 | 329,011 |
EMC Corp. | 27,146 | 737,557 |
F5 Networks, Inc. * | 895 | 101,887 |
FLIR Systems, Inc. | 1,834 | 56,762 |
Harris Corp. | 1,800 | 150,192 |
Hewlett Packard Enterprise Co. | 24,669 | 450,703 |
HP, Inc. | 24,769 | 310,851 |
Juniper Networks, Inc. | 4,700 | 105,703 |
Motorola Solutions, Inc. | 2,149 | 141,770 |
NetApp, Inc. | 3,900 | 95,901 |
Seagate Technology plc | 4,279 | 104,236 |
TE Connectivity Ltd. | 5,232 | 298,799 |
Western Digital Corp. | 3,861 | 182,471 |
12,791,738 | ||
Telecommunication Services 2.9% | ||
AT&T, Inc. | 86,928 | 3,756,159 |
CenturyLink, Inc. | 7,485 | 217,140 |
Frontier Communications Corp. | 15,605 | 77,088 |
Level 3 Communications, Inc. * | 3,967 | 204,261 |
Verizon Communications, Inc. | 57,638 | 3,218,506 |
7,473,154 | ||
Transportation 2.0% | ||
Alaska Air Group, Inc. | 1,800 | 104,922 |
American Airlines Group, Inc. | 8,781 | 248,590 |
C.H. Robinson Worldwide, Inc. | 2,200 | 163,350 |
CSX Corp. | 13,501 | 352,106 |
Delta Air Lines, Inc. | 10,922 | 397,888 |
Expeditors International of Washington, Inc. | 2,600 | 127,504 |
FedEx Corp. | 3,585 | 544,131 |
JB Hunt Transport Services, Inc. | 1,192 | 96,469 |
Kansas City Southern | 1,600 | 144,144 |
Norfolk Southern Corp. | 4,200 | 357,546 |
Ryder System, Inc. | 662 | 40,475 |
Southwest Airlines Co. | 8,873 | 347,910 |
Union Pacific Corp. | 11,856 | 1,034,436 |
United Continental Holdings, Inc. * | 5,000 | 205,200 |
United Parcel Service, Inc., Class B | 9,558 | 1,029,588 |
5,194,259 |
Security | Number of Shares | Value ($) |
Utilities 3.6% | ||
AES Corp. | 9,089 | 113,431 |
Alliant Energy Corp. | 3,211 | 127,477 |
Ameren Corp. | 4,000 | 214,320 |
American Electric Power Co., Inc. | 7,369 | 516,493 |
American Water Works Co., Inc. | 3,000 | 253,530 |
CenterPoint Energy, Inc. | 6,450 | 154,800 |
CMS Energy Corp. | 4,096 | 187,843 |
Consolidated Edison, Inc. | 4,535 | 364,795 |
Dominion Resources, Inc. | 8,526 | 664,431 |
DTE Energy Co. | 2,438 | 241,654 |
Duke Energy Corp. | 9,537 | 818,179 |
Edison International | 4,480 | 347,962 |
Entergy Corp. | 2,527 | 205,571 |
Eversource Energy | 4,336 | 259,726 |
Exelon Corp. | 12,760 | 463,954 |
FirstEnergy Corp. | 5,981 | 208,797 |
NextEra Energy, Inc. | 6,632 | 864,813 |
NiSource, Inc. | 4,092 | 108,520 |
NRG Energy, Inc. | 4,386 | 65,746 |
PG&E Corp. | 7,114 | 454,727 |
Pinnacle West Capital Corp. | 1,550 | 125,643 |
PPL Corp. | 9,867 | 372,479 |
Public Service Enterprise Group, Inc. | 6,714 | 312,939 |
SCANA Corp. | 2,200 | 166,452 |
Sempra Energy | 3,431 | 391,203 |
The Southern Co. | 12,729 | 682,656 |
WEC Energy Group, Inc. | 4,396 | 287,059 |
Xcel Energy, Inc. | 6,933 | 310,460 |
9,285,660 | ||
Total Common Stock | ||
(Cost $137,552,251) | 257,410,874 | |
Other Investment Companies 0.0% of net assets | ||
Securities Lending Collateral 0.0% | ||
Wells Fargo Government Money Market Fund, Select Class 0.31% (c) | 93,575 | 93,575 |
Total Other Investment Company | ||
(Cost $93,575) | 93,575 |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 0.7% of net assets | ||
Time Deposit 0.7% | ||
Skandinaviska Enskilda Banken | ||
0.13%, 07/01/16 (d) | 1,724,663 | 1,724,663 |
Total Short-Term Investment | ||
(Cost $1,724,663) | 1,724,663 |
* | Non-income producing security. |
(a) | Issuer is affiliated with the fund's investment adviser. |
(b) | All or a portion of this security is on loan. Securities on loan were valued at $92,299. |
(c) | The rate shown is the 7-day yield. |
(d) | The rate shown is the current daily overnight rate. |
Number of Contracts | Contract Value ($) | Unrealized Appreciation ($) | ||||
Futures Contracts | ||||||
S&P 500 Index, e-mini, Long, expires 09/16/16 | 17 | 1,776,670 | 9,950 |
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 | $257,410,874 | $— | $— | $257,410,874 | |||||
Other Investment Companies1 | 93,575 | — | — | 93,575 | |||||
Short-Term Investments1 | — | 1,724,663 | — | 1,724,663 | |||||
Total | $257,504,449 | $1,724,663 | $— | $259,229,112 | |||||
Other Financial Instruments | |||||||||
Futures Contracts2 | $9,950 | $— | $— | $9,950 |
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 | ||
Investment in affiliated issuer, at value (cost $248,723) | $428,979 | |
Investments in unaffiliated issuers, at value (cost $139,028,191) including securities on loan of $92,299 | 258,706,558 | |
Collateral invested for securities on loan, at value (cost $93,575) | + | 93,575 |
Total investments, at value (cost $139,370,489) | 259,229,112 | |
Deposit with broker for futures contracts | 126,000 | |
Receivables: | ||
Investments sold | 197,938 | |
Dividends | 290,122 | |
Fund shares sold | 252,289 | |
Variation margin on futures contracts | 24,934 | |
Foreign tax reclaims | 896 | |
Income from securities on loan | + | 96 |
Total assets | 260,121,387 | |
Liabilities | ||
Collateral held for securities on loan | 93,575 | |
Payables: | ||
Investments bought | 311,780 | |
Investment adviser and administrator fees | 7,351 | |
Fund shares redeemed | 4,975 | |
Accrued expenses | + | 56,608 |
Total liabilities | 474,289 | |
Net Assets | ||
Total assets | 260,121,387 | |
Total liabilities | – | 474,289 |
Net assets | $259,647,098 | |
Net Assets by Source | ||
Capital received from investors | 141,334,581 | |
Net investment income not yet distributed | 2,610,820 | |
Net realized capital losses | (4,166,876) | |
Net unrealized capital appreciation | 119,868,573 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$259,647,098 | 8,471,363 | $30.65 | ||
Investment Income | ||
Dividends received from affiliated issuer | $2,173 | |
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $672) | 2,799,606 | |
Interest | 1,307 | |
Securities on loan | + | 3,517 |
Total investment income | 2,806,603 | |
Expenses | ||
Investment adviser and administrator fees | 183,367 | |
Portfolio accounting fees | 21,083 | |
Professional fees | 20,725 | |
Independent trustees' fees | 13,812 | |
Shareholder reports | 13,159 | |
Index fees | 11,885 | |
Transfer agent fees | 10,125 | |
Custodian fees | 4,137 | |
Registration fees | 261 | |
Other expenses | + | 2,054 |
Total expenses | 280,608 | |
Expense reduction by CSIM | – | 6,582 |
Net expenses | – | 274,026 |
Net investment income | 2,532,577 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on investments | 1,197,031 | |
Net realized gains on futures contracts | + | 74,398 |
Net realized gains | 1,271,429 | |
Net change in unrealized appreciation (depreciation) on affiliated issuer | (126,666) | |
Net change in unrealized appreciation (depreciation) on unaffiliated issuers | 5,541,751 | |
Net change in unrealized appreciation (depreciation) on futures contracts | + | 31,035 |
Net change in unrealized appreciation (depreciation) | + | 5,446,120 |
Net realized and unrealized gains | 6,717,549 | |
Increase in net assets resulting from operations | $9,250,126 |
Operations | |||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||
Net investment income | $2,532,577 | $4,631,910 | |
Net realized gains | 1,271,429 | 2,309,824 | |
Net change in unrealized appreciation (depreciation) | + | 5,446,120 | (4,310,783) |
Increase in net assets from operations | 9,250,126 | 2,630,951 | |
Distributions to Shareholders | |||
Distributions from net investment income | ($4,586,677) | ($3,678,538) |
Transactions in Fund Shares | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 798,366 | $23,889,726 | 1,566,582 | $47,451,969 | |
Shares reinvested | 149,647 | 4,586,677 | 122,292 | 3,678,538 | |
Shares redeemed | + | (620,183) | (18,497,997) | (1,140,704) | (34,550,191) |
Net transactions in fund shares | 327,830 | $9,978,406 | 548,170 | $16,580,316 | |
Shares Outstanding and Net Assets | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 8,143,533 | $245,005,243 | 7,595,363 | $229,472,514 | |
Total increase | + | 327,830 | 14,641,855 | 548,170 | 15,532,729 |
End of period | 8,471,363 | $259,647,098 | 8,143,533 | $245,005,243 | |
Net investment income not yet distributed | $2,610,820 | $4,664,920 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Government Money Market Portfolio™ |
(formerly 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 12/31/15 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/16 | Market Value at 06/30/16 | Realized Gains (Losses) 01/01/16 to 06/30/16 | Dividends Received 01/01/16 to 06/30/16 | ||||||
15,749 | 1,200 | — | 16,949 | $428,979 | $— | $2,173 |
Purchases of Securities | Sales/Maturities of Securities | |
$15,217,807 | $2,545,205 |
Expiration Date | |
December 31, 2016 | $694,605 |
December 31, 2017 | 1,365,160 |
December 31, 2018 | 257,470 |
Total | $2,317,235 |
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 |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) and President, PIMCO Funds. | 108 | Director, PS Business Parks, Inc. (2005 – 2012) |
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015). | 108 | Director, Gilead Sciences, Inc. (2005 – present) |
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant, LLC (wealth management) (Jan. 2008 – Apr. 2012). | 108 | None |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 108 | 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 and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 108 | Director, KLA-Tencor Corporation (2008 – present) |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Consultant, Patmore Management Consulting (management consulting) (2008 – present). | 108 | None |
Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2015) | Co-Chief Executive Officer, Kudu Investment Management, LLC (financial services) (Jan. 2015 – present); Partner, Kudu Advisors, LLC (financial services) (June 2008 – Jan. 2015); Advisor, Asset International, Inc. (publisher of financial services information) (Aug. 2008 – Jan. 2015). | 108 | None |
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 108 | Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 108 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present) Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Walter W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation (Oct. 2008 – present); President and Chief Executive Officer (Oct. 2008 – present), Director (May 2008 – present), Charles Schwab & Co., Inc.; Director, Charles Schwab Bank (Apr. 2006 – present); and Director, Schwab Holdings, Inc. (May 2008 – present). | 108 | Director, The Charles Schwab Corporation (2008 – present) |
Interested 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 |
Marie A. Chandoha2 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). | 108 | None |
Joseph R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Senior Executive Vice President and Chief Financial Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (July 2015 – present); Executive Vice President and Chief Financial Officer of The Charles Schwab Corporation and Charles Schwab & Co., Inc. (May 2007 – July 2015); Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director, Executive Vice President and Chief Financial Officer, Schwab Holdings, Inc. (May 2007 – present). | 108 | None |
Officers of the Trust | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
Marie A. Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). |
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds (Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial Service Investment Management (May 2005 – Mar. 2011). |
Officers of the Trust (continued) | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Apr. 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – Apr. 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (Apr. 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha, and Mr. Martinetto are Interested Trustees 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 Board. |
Schwab VIT Balanced Portfolio |
Semiannual report dated June 30, 2016 |
Zifan Tang, Ph.D., 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 fund. She was appointed portfolio manager of the fund 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 | 3 Years | Since Inception |
Fund: Schwab VIT Balanced Portfolio (07/25/12) | 3.70% | 1.01% | 3.89% | 4.47% |
VIT Balanced Composite Index | 3.98% | 1.64% | 4.53% | 5.19% |
S&P 500 Index | 3.84% | 3.99% | 11.66% | 14.54% |
Barclays U.S. Aggregate Bond Index | 5.31% | 6.00% | 4.06% | 2.52% |
Fund Category: Morningstar Allocation – 30% to 50% Equity | 3.34% | 1.02% | 4.64% | 5.31% |
Statistics | |
Number of Holdings | 16 |
Portfolio Turnover Rate4 | 53% |
Asset Class Weightings % of Investments5 | |
Fixed Income | 37.7% |
Stocks – U.S. | 20.1% |
Stocks – International | 17.5% |
Money Market Fund | 11.9% |
Real Assets | 9.4% |
Short-Term Investments | 3.4% |
Total | 100.0% |
Top Holdings % of Net Assets6,7 | |
Schwab U.S. Aggregate Bond ETF | 34.1% |
Schwab U.S. Large-Cap ETF | 15.0% |
Schwab Variable Share Price Money Fund, Ultra Shares | 12.0% |
Schwab International Equity ETF | 10.8% |
Schwab U.S. REIT ETF | 6.5% |
Schwab Emerging Markets Equity ETF | 4.8% |
Schwab U.S. Small-Cap ETF | 4.2% |
Credit Suisse Commodity Return Strategy Fund, Class I | 2.9% |
SPDR Barclays International Treasury Bond ETF | 2.0% |
Schwab International Small-Cap Equity ETF | 2.0% |
Total | 94.3% |
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 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund's returns would have been lower. Fund 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 fund 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 fund. 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 fund intends to primarily invest in affiliated Schwab ETFs and unaffiliated third-party ETFs. The fund may also invest in affiliated Schwab and Laudus Funds mutual funds and unaffiliated third party mutual funds (all such ETFs and mutual funds referred to as “underlying funds”). The fund 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. |
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/16 | Ending Account Value (Net of Expenses) at 6/30/16 | Expenses Paid During Period2 1/1/16–6/30/16 | |
Schwab VIT Balanced Portfolio | ||||
Actual Return | 0.57% | $1,000.00 | $ 1,037.00 | $2.89 |
Hypothetical 5% Return | 0.57% | $1,000.00 | $1,022.07 | $ 2.87 |
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 fund invests are not included in this ratio. |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days of the period, and divided by 366 days of the fiscal year. |
1/1/16– 6/30/16* | 1/1/15– 12/31/15 | 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 | $11.25 | $11.61 | $11.21 | $10.50 | $10.00 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.03 2 | 0.13 2 | 0.15 2 | 0.17 2 | 0.08 | |
Net realized and unrealized gains (losses) | 0.38 | (0.36) | 0.31 | 0.55 | 0.42 | |
Total from investment operations | 0.41 | (0.23) | 0.46 | 0.72 | 0.50 | |
Less distributions: | ||||||
Distributions from net investment income | (0.12) | (0.12) | (0.06) | (0.01) | — | |
Distributions from net realized gains | (0.00) 3 | (0.01) | (0.00) 3 | — | — | |
Total distributions | (0.12) | (0.13) | (0.06) | (0.01) | — | |
Net asset value at end of period | $11.54 | $11.25 | $11.61 | $11.21 | $10.50 | |
Total return | 3.70% 4 | (2.00%) | 4.15% | 6.89% | 5.00% 4 | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses5 | 0.57% 6 | 0.58% | 0.57% | 0.58% | 0.58% 6 | |
Gross operating expenses5 | 0.60% 6 | 0.65% | 0.70% | 1.07% | 10.58% 6 | |
Net investment income (loss) | 0.61% 6 | 1.15% | 1.29% | 1.55% | 3.94% 6 | |
Portfolio turnover rate | 53% 4,7 | 9% | 14% | 18% | 1% 4 | |
Net assets, end of period (x 1,000,000) | $55 | $50 | $44 | $28 | $2 | |
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
97.1% | Other Investment Companies | 51,637,885 | 53,464,575 |
3.4% | Short-Term Investments | 1,870,613 | 1,870,613 |
100.5% | Total Investments | 53,508,498 | 55,335,188 |
(0.5%) | Other Assets and Liabilities, Net | (267,290) | |
100.0% | Net Assets | 55,067,898 |
Security | Number of Shares | Value ($) |
Other Investment Companies 97.1% of net assets | ||
U.S. Stocks 20.2% | ||
Large-Cap 15.0% | ||
Schwab U.S. Large-Cap ETF (a) | 165,521 | 8,237,980 |
Micro-Cap 1.0% | ||
iShares Micro-Cap ETF | 7,689 | 543,766 |
Small-Cap 4.2% | ||
Schwab U.S. Small-Cap ETF (a) | 43,310 | 2,340,039 |
11,121,785 | ||
International Stocks 17.6% | ||
Developed-Market Large-Cap 10.8% | ||
Schwab International Equity ETF (a) | 219,736 | 5,957,043 |
Developed-Market Small-Cap 2.0% | ||
Schwab International Small-Cap Equity ETF (a) | 38,169 | 1,099,076 |
Emerging-Market 4.8% | ||
Schwab Emerging Markets Equity ETF (a) | 123,593 | 2,631,295 |
9,687,414 | ||
Real Assets 9.4% | ||
Commodity 2.9% | ||
Credit Suisse Commodity Return Strategy Fund, Class I * | 309,844 | 1,586,400 |
Real Estate 6.5% | ||
Schwab U.S. REIT ETF (a) | 82,952 | 3,603,435 |
5,189,835 |
Security | Number of Shares | Value ($) |
Fixed Income 37.9% | ||
Corporate Bond 34.1% | ||
Schwab U.S. Aggregate Bond ETF (a) | 349,665 | 18,784,004 |
Inflation-Protected Bond 1.8% | ||
Schwab U.S. TIPS ETF (a) | 17,044 | 962,645 |
International Developed-Market Bond 2.0% | ||
SPDR Barclays International Treasury Bond ETF * | 19,638 | 1,122,507 |
20,869,156 | ||
Money Market Fund 12.0% | ||
Schwab Variable Share Price Money Fund, Ultra Shares 0.38% (a)(b) | 6,595,725 | 6,596,385 |
Total Other Investment Companies | ||
(Cost $51,637,885) | 53,464,575 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 3.4% of net assets | ||
Time Deposits 3.4% | ||
Bank of Montreal | ||
0.13%, 07/01/16 (c) | 547,262 | 547,262 |
JPMorgan Chase Bank | ||
0.13%, 07/01/16 (c) | 547,262 | 547,262 |
Skandinaviska Enskilda Banken | ||
0.13%, 07/01/16 (c) | 228,827 | 228,827 |
Wells Fargo | ||
0.13%, 07/01/16 (c) | 547,262 | 547,262 |
Total Short-Term Investments | ||
(Cost $1,870,613) | 1,870,613 |
* | Non-income producing security. |
(a) | Issuer is affiliated with the fund's investment adviser. |
(b) | The rate shown is the 7-day yield. |
(c) | The rate shown is the current daily overnight rate. |
ETF — | Exchange-traded fund |
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 | $53,464,575 | $— | $— | $53,464,575 | |||||
Short-Term Investments1 | — | 1,870,613 | — | 1,870,613 | |||||
Total | $53,464,575 | $1,870,613 | $— | $55,335,188 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $48,065,529) | $50,211,902 | |
Investments in unaffiliated issuers, at value (cost $5,442,969) | + | 5,123,286 |
Total investments, at value (cost $53,508,498) | 55,335,188 | |
Receivables: | ||
Investments sold | 80,952 | |
Dividends | + | 1,016 |
Total assets | 55,417,156 | |
Liabilities | ||
Payables: | ||
Investments bought | 315,224 | |
Investment adviser and administrator fees | 4,686 | |
Fund shares redeemed | 3,005 | |
Accrued expenses | + | 26,343 |
Total liabilities | 349,258 | |
Net Assets | ||
Total assets | 55,417,156 | |
Total liabilities | – | 349,258 |
Net assets | $55,067,898 | |
Net Assets by Source | ||
Capital received from investors | 53,006,228 | |
Net investment income not yet distributed | 157,901 | |
Net realized capital gains | 77,079 | |
Net unrealized capital appreciation | 1,826,690 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$55,067,898 | 4,771,282 | $11.54 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $183,478 | |
Dividends received from unaffiliated underlying funds | 123,188 | |
Interest | + | 1,090 |
Total investment income | 307,756 | |
Expenses | ||
Investment adviser and administrator fees | 117,151 | |
Professional fees | 14,471 | |
Transfer agent fees | 10,011 | |
Independent trustees' fees | 6,326 | |
Shareholder reports | 3,029 | |
Portfolio accounting fees | 2,588 | |
Custodian fees | 1,825 | |
Registration fees | 228 | |
Other expenses | + | 490 |
Total expenses | 156,119 | |
Expense reduction by CSIM | – | 6,497 |
Net expenses | – | 149,622 |
Net investment income | 158,134 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 193,725 | |
Net realized gains on sales of unaffiliated underlying funds | + | 157,465 |
Net realized gains | 351,190 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 1,089,610 | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 437,419 |
Net change in unrealized appreciation (depreciation) | + | 1,527,029 |
Net realized and unrealized gains | 1,878,219 | |
Increase in net assets resulting from operations | $2,036,353 |
Operations | |||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||
Net investment income | $158,134 | $548,408 | |
Net realized gains (losses) | 351,190 | (71,117) | |
Net change in unrealized appreciation (depreciation) | + | 1,527,029 | (1,422,760) |
Increase (decrease) in net assets from operations | 2,036,353 | (945,469) | |
Distributions to Shareholders | |||
Distributions from net investment income | (580,069) | (488,556) | |
Distributions from net realized gains | + | (16,519) | (49,718) |
Total distributions | ($596,588) | ($538,274) |
Transactions in Fund Shares | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 605,116 | $6,778,934 | 940,604 | $10,818,577 | |
Shares reinvested | 51,697 | 596,588 | 46,604 | 538,274 | |
Shares redeemed | + | (293,188) | (3,345,954) | (405,834) | (4,681,397) |
Net transactions in fund shares | 363,625 | $4,029,568 | 581,374 | $6,675,454 | |
Shares Outstanding and Net Assets | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 4,407,657 | $49,598,565 | 3,826,283 | $44,406,854 | |
Total increase | + | 363,625 | 5,469,333 | 581,374 | 5,191,711 |
End of period | 4,771,282 | $55,067,898 | 4,407,657 | $49,598,565 | |
Net investment income not yet distributed | $157,901 | $579,836 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Government Money Market Portfolio™ |
(formerly 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 | 0.1% |
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 | 0.1% |
Schwab U.S. REIT ETF | 0.1% |
Schwab U.S. TIPS ETF | 0.1% |
Schwab U.S. Aggregate Bond ETF | 0.6% |
Schwab Variable Share Price Money Fund, Ultra Shares | 7.5% |
Underlying Funds | Balance of Shares Held at 12/31/15 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/16 | Market Value at 06/30/16 | Realized Gains (Losses) 01/01/16 to 06/30/16 | Distributions Received* 01/01/16 to 06/30/16 | |||||||
Schwab U.S. Large-Cap ETF | 156,809 | 17,300 | (8,588) | 165,521 | $8,237,980 | ($2,777) | $80,920 | |||||||
Schwab U.S. Small-Cap ETF | 37,649 | 7,473 | (1,812) | 43,310 | 2,340,039 | (2,626) | 16,252 | |||||||
Schwab International Equity ETF | 199,918 | 28,722 | (8,904) | 219,736 | 5,957,043 | (30,272) | — | |||||||
Schwab International Small-Cap Equity ETF | 33,850 | 6,230 | (1,911) | 38,169 | 1,099,076 | (5,595) | — | |||||||
Schwab Emerging Markets Equity ETF | 114,515 | 15,323 | (6,245) | 123,593 | 2,631,295 | (27,295) | — | |||||||
Schwab U.S. REIT ETF | 80,742 | 10,891 | (8,681) | 82,952 | 3,603,435 | 28,267 | 36,255 | |||||||
Schwab U.S. Aggregate Bond ETF | — | 353,180 | (3,515) | 349,665 | 18,784,004 | 906 | — | |||||||
Schwab U.S. TIPS ETF | 15,987 | 2,354 | (1,297) | 17,044 | 962,645 | (3,003) | — | |||||||
Schwab Intermediate-Term U.S. Treasury ETF | 111,841 | 11,038 | (122,879) | — | — | 236,120 | 39,767 | |||||||
Schwab Value Advantage Money Fund, Ultra Shares (formerly named Institutional Prime Shares) | 6,086,933 | 2,403 | (6,089,336) | — | — | — | 2,885 | |||||||
Schwab Variable Share Price Money Fund, Ultra Shares | — | 6,595,725 | — | 6,595,725 | 6,596,385 | — | 7,399 | |||||||
Total | $50,211,902 | $193,725 | $183,478 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$30,503,339 | $27,121,350 |
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 |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) and President, PIMCO Funds. | 108 | Director, PS Business Parks, Inc. (2005 – 2012) |
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015). | 108 | Director, Gilead Sciences, Inc. (2005 – present) |
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant, LLC (wealth management) (Jan. 2008 – Apr. 2012). | 108 | None |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 108 | 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 and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 108 | Director, KLA-Tencor Corporation (2008 – present) |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Consultant, Patmore Management Consulting (management consulting) (2008 – present). | 108 | None |
Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2015) | Co-Chief Executive Officer, Kudu Investment Management, LLC (financial services) (Jan. 2015 – present); Partner, Kudu Advisors, LLC (financial services) (June 2008 – Jan. 2015); Advisor, Asset International, Inc. (publisher of financial services information) (Aug. 2008 – Jan. 2015). | 108 | None |
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 108 | Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 108 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present) Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Walter W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation (Oct. 2008 – present); President and Chief Executive Officer (Oct. 2008 – present), Director (May 2008 – present), Charles Schwab & Co., Inc.; Director, Charles Schwab Bank (Apr. 2006 – present); and Director, Schwab Holdings, Inc. (May 2008 – present). | 108 | Director, The Charles Schwab Corporation (2008 – present) |
Interested 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 |
Marie A. Chandoha2 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). | 108 | None |
Joseph R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Senior Executive Vice President and Chief Financial Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (July 2015 – present); Executive Vice President and Chief Financial Officer of The Charles Schwab Corporation and Charles Schwab & Co., Inc. (May 2007 – July 2015); Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director, Executive Vice President and Chief Financial Officer, Schwab Holdings, Inc. (May 2007 – present). | 108 | None |
Officers of the Trust | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
Marie A. Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). |
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds (Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial Service Investment Management (May 2005 – Mar. 2011). |
Officers of the Trust (continued) | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Apr. 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – Apr. 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (Apr. 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha, and Mr. Martinetto are Interested Trustees 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 Board. |
Schwab VIT Balanced with Growth Portfolio |
Semiannual report dated June 30, 2016 |
Zifan Tang, Ph.D., 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 fund. She was appointed portfolio manager of the fund 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 | 3 Years | Since Inception |
Fund: Schwab VIT Balanced with Growth Portfolio (07/25/12) | 3.71% | -0.26% | 4.62% | 5.83% |
VIT Balanced with Growth Composite Index | 3.85% | 0.32% | 5.25% | 6.66% |
S&P 500 Index | 3.84% | 3.99% | 11.66% | 14.54% |
Barclays U.S. Aggregate Bond Index | 5.31% | 6.00% | 4.06% | 2.52% |
Fund Category: Morningstar Allocation – 50% to 70% Equity | 2.66% | 0.17% | 6.20% | 8.02% |
Statistics | |
Number of Holdings | 16 |
Portfolio Turnover Rate4 | 33% |
Asset Class Weightings % of Investments5 | |
Fixed Income | 29.7% |
Stocks – U.S. | 29.0% |
Stocks – International | 25.4% |
Real Assets | 10.4% |
Short-Term Investments | 3.3% |
Money Market Fund | 2.2% |
Total | 100.0% |
Top Holdings % of Net Assets6,7 | |
Schwab U.S. Aggregate Bond ETF | 27.1% |
Schwab U.S. Large-Cap ETF | 22.0% |
Schwab International Equity ETF | 16.7% |
Schwab U.S. REIT ETF | 6.6% |
Schwab U.S. Small-Cap ETF | 6.2% |
Schwab Emerging Markets Equity ETF | 5.8% |
Credit Suisse Commodity Return Strategy Fund, Class I | 3.9% |
Schwab International Small-Cap Equity ETF | 3.0% |
Schwab Variable Share Price Money Fund, Ultra Shares | 2.2% |
Schwab U.S. TIPS ETF | 1.8% |
Total | 95.3% |
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 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund's returns would have been lower. Fund 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 fund 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 fund. 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 fund intends to primarily invest in affiliated Schwab ETFs and unaffiliated third-party ETFs. The fund may also invest in affiliated Schwab and Laudus Funds mutual funds and unaffiliated third party mutual funds (all such ETFs and mutual funds referred to as “underlying funds”). The fund 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. |
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/16 | Ending Account Value (Net of Expenses) at 6/30/16 | Expenses Paid During Period2 1/1/16–6/30/16 | |
Schwab VIT Balanced with Growth Portfolio | ||||
Actual Return | 0.52% | $1,000.00 | $ 1,037.10 | $2.63 |
Hypothetical 5% Return | 0.52% | $1,000.00 | $1,022.31 | $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 fund invests are not included in this ratio. |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days of the period, and divided by 366 days of the fiscal year. |
1/1/16– 6/30/16* | 1/1/15– 12/31/15 | 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 | $11.80 | $12.26 | $11.86 | $10.71 | $10.00 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.04 2 | 0.17 2 | 0.19 2 | 0.23 2 | 0.09 | |
Net realized and unrealized gains (losses) | 0.40 | (0.47) | 0.30 | 0.93 | 0.62 | |
Total from investment operations | 0.44 | (0.30) | 0.49 | 1.16 | 0.71 | |
Less distributions: | ||||||
Distributions from net investment income | (0.16) | (0.15) | (0.09) | (0.01) | — | |
Distributions from net realized gains | (0.01) | (0.01) | (0.00) 3 | — | — | |
Total distributions | (0.17) | (0.16) | (0.09) | (0.01) | — | |
Net asset value at end of period | $12.07 | $11.80 | $12.26 | $11.86 | $10.71 | |
Total return | 3.71% 4 | (2.47%) | 4.15% | 10.79% | 7.10% 4 | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses5 | 0.52% 6 | 0.53% | 0.55% | 0.58% | 0.58% 6 | |
Gross operating expenses5 | 0.53% 6 | 0.55% | 0.57% | 0.75% | 16.10% 6 | |
Net investment income (loss) | 0.68% 6 | 1.41% | 1.53% | 2.07% | 4.80% 6 | |
Portfolio turnover rate | 33% 4,7 | 7% | 8% | 14% | 1% 4 | |
Net assets, end of period (x 1,000,000) | $124 | $116 | $99 | $70 | $2 | |
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
97.3% | Other Investment Companies | 117,061,928 | 120,900,937 |
3.3% | Short-Term Investments | 4,096,997 | 4,096,997 |
100.6% | Total Investments | 121,158,925 | 124,997,934 |
(0.6%) | Other Assets and Liabilities, Net | (760,577) | |
100.0% | Net Assets | 124,237,357 |
Security | Number of Shares | Value ($) |
Other Investment Companies 97.3% of net assets | ||
U.S. Stocks 29.2% | ||
Large-Cap 22.0% | ||
Schwab U.S. Large-Cap ETF (a) | 549,018 | 27,324,626 |
Micro-Cap 1.0% | ||
iShares Micro-Cap ETF | 17,968 | 1,270,697 |
Small-Cap 6.2% | ||
Schwab U.S. Small-Cap ETF (a) | 141,833 | 7,663,237 |
36,258,560 | ||
International Stocks 25.5% | ||
Developed-Market Large-Cap 16.7% | ||
Schwab International Equity ETF (a) | 767,237 | 20,799,795 |
Developed-Market Small-Cap 3.0% | ||
Schwab International Small-Cap Equity ETF (a) | 127,334 | 3,666,583 |
Emerging-Market 5.8% | ||
Schwab Emerging Markets Equity ETF (a) | 339,538 | 7,228,764 |
31,695,142 | ||
Real Assets 10.5% | ||
Commodity 3.9% | ||
Credit Suisse Commodity Return Strategy Fund, Class I * | 950,305 | 4,865,561 |
Real Estate 6.6% | ||
Schwab U.S. REIT ETF (a) | 188,277 | 8,178,753 |
13,044,314 |
Security | Number of Shares | Value ($) |
Fixed Income 29.9% | ||
Corporate Bond 27.1% | ||
Schwab U.S. Aggregate Bond ETF (a) | 626,289 | 33,644,245 |
Inflation-Protected Bond 1.8% | ||
Schwab U.S. TIPS ETF (a) | 39,274 | 2,218,196 |
International Developed-Market Bond 1.0% | ||
SPDR Barclays International Treasury Bond ETF * | 22,045 | 1,260,092 |
37,122,533 | ||
Money Market Fund 2.2% | ||
Schwab Variable Share Price Money Fund, Ultra Shares 0.38% (a)(b) | 2,780,111 | 2,780,388 |
Total Other Investment Companies | ||
(Cost $117,061,928) | 120,900,937 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 3.3% of net assets | ||
Time Deposits 3.3% | ||
Bank of Montreal | ||
0.13%, 07/01/16 (c) | 1,232,205 | 1,232,205 |
JPMorgan Chase Bank | ||
0.13%, 07/01/16 (c) | 1,232,205 | 1,232,205 |
Skandinaviska Enskilda Banken | ||
0.13%, 07/01/16 (c) | 400,382 | 400,382 |
Wells Fargo | ||
0.13%, 07/01/16 (c) | 1,232,205 | 1,232,205 |
Total Short-Term Investments | ||
(Cost $4,096,997) | 4,096,997 |
* | Non-income producing security. |
(a) | Issuer is affiliated with the fund's investment adviser. |
(b) | The rate shown is the 7-day yield. |
(c) | The rate shown is the current daily overnight rate. |
ETF — | Exchange-traded fund |
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 | $120,900,937 | $— | $— | $120,900,937 | |||||
Short-Term Investments1 | — | 4,096,997 | — | 4,096,997 | |||||
Total | $120,900,937 | $4,096,997 | $— | $124,997,934 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $108,451,650) | $113,504,587 | |
Investments in unaffiliated issuers, at value (cost $12,707,275) | + | 11,493,347 |
Total investments, at value (cost $121,158,925) | 124,997,934 | |
Receivables: | ||
Investments sold | 101,190 | |
Dividends | 424 | |
Interest | + | 17 |
Total assets | 125,099,565 | |
Liabilities | ||
Payables: | ||
Investments bought | 803,103 | |
Investment adviser and administrator fees | 10,577 | |
Fund shares redeemed | 18,557 | |
Accrued expenses | + | 29,971 |
Total liabilities | 862,208 | |
Net Assets | ||
Total assets | 125,099,565 | |
Total liabilities | – | 862,208 |
Net assets | $124,237,357 | |
Net Assets by Source | ||
Capital received from investors | 119,823,336 | |
Net investment income not yet distributed | 397,526 | |
Net realized capital gains | 177,486 | |
Net unrealized capital appreciation | 3,839,009 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$124,237,357 | 10,291,683 | $12.07 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $472,900 | |
Dividends received from unaffiliated underlying funds | 224,218 | |
Interest | + | 2,379 |
Total investment income | 699,497 | |
Expenses | ||
Investment adviser and administrator fees | 263,192 | |
Professional fees | 16,154 | |
Transfer agent fees | 10,054 | |
Independent trustees' fees | 8,827 | |
Portfolio accounting fees | 3,077 | |
Shareholder reports | 3,027 | |
Custodian fees | 2,619 | |
Registration fees | 498 | |
Other expenses | + | 1,004 |
Total expenses | 308,452 | |
Expense reduction by CSIM | – | 6,526 |
Net expenses | – | 301,926 |
Net investment income | 397,571 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 301,961 | |
Net realized gains on sales of unaffiliated underlying funds | + | 335,662 |
Net realized gains | 637,623 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 2,535,538 | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 879,029 |
Net change in unrealized appreciation (depreciation) | + | 3,414,567 |
Net realized and unrealized gains | 4,052,190 | |
Increase in net assets resulting from operations | $4,449,761 |
Operations | |||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||
Net investment income | $397,571 | $1,535,976 | |
Net realized gains (losses) | 637,623 | (66,066) | |
Net change in unrealized appreciation (depreciation) | + | 3,414,567 | (4,525,367) |
Increase (decrease) in net assets from operations | 4,449,761 | (3,055,457) | |
Distributions to Shareholders | |||
Distributions from net investment income | (1,597,912) | (1,356,819) | |
Distributions from net realized gains | + | (107,610) | (87,737) |
Total distributions | ($1,705,522) | ($1,444,556) |
Transactions in Fund Shares | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 674,699 | $7,952,196 | 2,055,682 | $25,269,529 | |
Shares reinvested | 141,302 | 1,705,522 | 117,730 | 1,444,556 | |
Shares redeemed | + | (315,780) | (3,739,666) | (480,612) | (5,915,610) |
Net transactions in fund shares | 500,221 | $5,918,052 | 1,692,800 | $20,798,475 | |
Shares Outstanding and Net Assets | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 9,791,462 | $115,575,066 | 8,098,662 | $99,276,604 | |
Total increase | + | 500,221 | 8,662,291 | 1,692,800 | 16,298,462 |
End of period | 10,291,683 | $124,237,357 | 9,791,462 | $115,575,066 | |
Net investment income not yet distributed | $397,526 | $1,597,867 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Government Money Market Portfolio™ |
(formerly 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 | 0.4% |
Schwab International Small-Cap Equity ETF | 0.5% |
Schwab Emerging Markets Equity ETF | 0.4% |
Schwab U.S. REIT ETF | 0.3% |
Schwab U.S. TIPS ETF | 0.2% |
Schwab U.S. Aggregate Bond ETF | 1.1% |
Schwab Variable Share Price Money Fund, Ultra Shares | 3.2% |
Underlying Funds | Balance of Shares Held at 12/31/15 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/16 | Market Value at 06/30/16 | Realized Gains (Losses) 01/01/16 to 06/30/16 | Distributions Received* 01/01/16 to 06/30/16 | |||||||
Schwab U.S. Large-Cap ETF | 531,657 | 20,740 | (3,379) | 549,018 | $27,324,626 | ($15,441) | $266,417 | |||||||
Schwab U.S. Small-Cap ETF | 131,399 | 14,328 | (3,894) | 141,833 | 7,663,237 | (26,617) | 53,767 | |||||||
Schwab International Equity ETF | 717,109 | 54,316 | (4,188) | 767,237 | 20,799,795 | (19,267) | — | |||||||
Schwab International Small-Cap Equity ETF | 120,170 | 8,680 | (1,516) | 127,334 | 3,666,583 | (5,017) | — | |||||||
Schwab Emerging Markets Equity ETF | 326,853 | 18,973 | (6,288) | 339,538 | 7,228,764 | (38,557) | — | |||||||
Schwab U.S. REIT ETF | 188,568 | 8,761 | (9,052) | 188,277 | 8,178,753 | 15,368 | 81,303 | |||||||
Schwab U.S. Aggregate Bond ETF | — | 626,289 | — | 626,289 | 33,644,245 | — | — | |||||||
Schwab U.S. TIPS ETF | 37,266 | 2,008 | — | 39,274 | 2,218,196 | — | — | |||||||
Schwab Variable Share Price Money Fund, Ultra Shares | — | 2,780,111 | — | 2,780,111 | 2,780,388 | — | 3,128 | |||||||
Schwab Intermediate-Term U.S. Treasury ETF | 195,906 | 8,249 | (204,155) | — | — | 391,492 | 66,969 | |||||||
Schwab Value Advantage Money Fund, Ultra Shares | 2,776,312 | 1,096 | (2,777,408) | — | — | — | 1,316 | |||||||
Total | $113,504,587 | $301,961 | $472,900 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$42,256,358 | $37,897,324 |
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 |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) and President, PIMCO Funds. | 108 | Director, PS Business Parks, Inc. (2005 – 2012) |
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015). | 108 | Director, Gilead Sciences, Inc. (2005 – present) |
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant, LLC (wealth management) (Jan. 2008 – Apr. 2012). | 108 | None |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 108 | 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 and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 108 | Director, KLA-Tencor Corporation (2008 – present) |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Consultant, Patmore Management Consulting (management consulting) (2008 – present). | 108 | None |
Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2015) | Co-Chief Executive Officer, Kudu Investment Management, LLC (financial services) (Jan. 2015 – present); Partner, Kudu Advisors, LLC (financial services) (June 2008 – Jan. 2015); Advisor, Asset International, Inc. (publisher of financial services information) (Aug. 2008 – Jan. 2015). | 108 | None |
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 108 | Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 108 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present) Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Walter W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation (Oct. 2008 – present); President and Chief Executive Officer (Oct. 2008 – present), Director (May 2008 – present), Charles Schwab & Co., Inc.; Director, Charles Schwab Bank (Apr. 2006 – present); and Director, Schwab Holdings, Inc. (May 2008 – present). | 108 | Director, The Charles Schwab Corporation (2008 – present) |
Interested 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 |
Marie A. Chandoha2 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). | 108 | None |
Joseph R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Senior Executive Vice President and Chief Financial Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (July 2015 – present); Executive Vice President and Chief Financial Officer of The Charles Schwab Corporation and Charles Schwab & Co., Inc. (May 2007 – July 2015); Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director, Executive Vice President and Chief Financial Officer, Schwab Holdings, Inc. (May 2007 – present). | 108 | None |
Officers of the Trust | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
Marie A. Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). |
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds (Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial Service Investment Management (May 2005 – Mar. 2011). |
Officers of the Trust (continued) | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Apr. 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – Apr. 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (Apr. 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha, and Mr. Martinetto are Interested Trustees 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 Board. |
Schwab VIT Growth Portfolio |
Semiannual report dated June 30, 2016 |
Zifan Tang, Ph.D., 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 fund. She was appointed portfolio manager of the fund 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 | 3 Years | Since Inception |
Fund: Schwab VIT Growth Portfolio (07/25/12) | 3.20% | -1.75% | 5.13% | 7.29% |
VIT Growth Composite Index | 3.20% | -1.36% | 5.70% | 7.96% |
S&P 500 Index | 3.84% | 3.99% | 11.66% | 14.54% |
Barclays U.S. Aggregate Bond Index | 5.31% | 6.00% | 4.06% | 2.52% |
Fund Category: Morningstar Allocation – 70% to 85% Equity | 1.87% | -2.11% | 6.25% | 8.80% |
Statistics | |
Number of Holdings | 14 |
Portfolio Turnover Rate4 | 19% |
Asset Class Weightings % of Investments5 | |
Stocks – U.S. | 38.2% |
Stocks – International | 33.4% |
Fixed Income | 12.9% |
Real Assets | 10.5% |
Short-Term Investments | 2.5% |
Money Market Fund | 2.5% |
Total | 100.0% |
Top Holdings % of Net Assets6,7 | |
Schwab U.S. Large-Cap ETF | 29.0% |
Schwab International Equity ETF | 20.6% |
Schwab U.S. Aggregate Bond ETF | 12.1% |
Schwab Emerging Markets Equity ETF | 7.9% |
Schwab U.S. Small-Cap ETF | 7.2% |
Schwab U.S. REIT ETF | 6.5% |
Schwab International Small-Cap Equity ETF | 4.9% |
Credit Suisse Commodity Return Strategy Fund, Class I | 4.0% |
Schwab Variable Share Price Money Fund, Ultra Shares | 2.5% |
iShares Micro-Cap ETF | 2.0% |
Total | 96.7% |
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 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund's returns would have been lower. Fund 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 fund invests. The annualized weighted average expense ratio of the underlying funds was 0.12%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. 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 fund intends to primarily invest in affiliated Schwab ETFs and unaffiliated third-party ETFs. The fund may also invest in affiliated Schwab and Laudus Funds mutual funds and unaffiliated third party mutual funds (all such ETFs and mutual funds referred to as “underlying funds”). The fund 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. |
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 1/1/16 | Ending Account Value (Net of Expenses) at 6/30/16 | Expenses Paid During Period2 1/1/16–6/30/16 | |
Schwab VIT Growth Portfolio | ||||
Actual Return | 0.52% | $1,000.00 | $1,032.00 | $2.63 |
Hypothetical 5% Return | 0.52% | $1,000.00 | $1,022.31 | $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 fund invests are not included in this ratio. |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days of the period, and divided by 366 days of the fiscal year. |
1/1/16– 6/30/16* | 1/1/15– 12/31/15 | 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 | $12.50 | $13.05 | $12.65 | $10.95 | $10.00 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.03 2 | 0.19 2 | 0.20 2 | 0.33 2 | 0.13 | |
Net realized and unrealized gains (losses) | 0.37 | (0.55) | 0.30 | 1.37 | 0.82 | |
Total from investment operations | 0.40 | (0.36) | 0.50 | 1.70 | 0.95 | |
Less distributions: | ||||||
Distributions from net investment income | (0.17) | (0.17) | (0.10) | (0.00) 3 | — | |
Distributions from net realized gains | (0.02) | (0.02) | (0.00) 3 | — | — | |
Total distributions | (0.19) | (0.19) | (0.10) | (0.00) 3 | — | |
Net asset value at end of period | $12.71 | $12.50 | $13.05 | $12.65 | $10.95 | |
Total return | 3.20% 4 | (2.85%) | 3.97% | 15.56% | 9.50% 4 | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses5 | 0.52% 6 | 0.52% | 0.54% | 0.58% | 0.59% 6,7 | |
Gross operating expenses5 | 0.53% 6 | 0.54% | 0.56% | 0.77% | 26.08% 6 | |
Net investment income (loss) | 0.56% 6 | 1.42% | 1.56% | 2.72% | 3.96% 6 | |
Portfolio turnover rate | 19% 4,8 | 7% | 9% | 9% | 29% 4 | |
Net assets, end of period (x 1,000,000) | $125 | $121 | $107 | $77 | $1 | |
* | Unaudited. |
Holdings by Category | Cost ($) | Value ($) | |
97.5% | Other Investment Companies | 117,536,503 | 121,705,591 |
2.5% | Short-Term Investments | 3,086,998 | 3,086,998 |
100.0% | Total Investments | 120,623,501 | 124,792,589 |
(0.0%) | Other Assets and Liabilities, Net | (50,336) | |
100.0% | Net Assets | 124,742,253 |
Security | Number of Shares | Value ($) |
Other Investment Companies 97.5% of net assets | ||
U.S. Stocks 38.2% | ||
Large-Cap 29.0% | ||
Schwab U.S. Large-Cap ETF (a) | 726,322 | 36,149,046 |
Micro-Cap 2.0% | ||
iShares Micro-Cap ETF | 35,815 | 2,532,837 |
Small-Cap 7.2% | ||
Schwab U.S. Small-Cap ETF (a) | 166,520 | 8,997,075 |
47,678,958 | ||
International Stocks 33.4% | ||
Developed-Market Large-Cap 20.6% | ||
Schwab International Equity ETF (a) | 946,979 | 25,672,601 |
Developed-Market Small-Cap 4.9% | ||
Schwab International Small-Cap Equity ETF (a) | 212,649 | 6,123,228 |
Emerging-Market 7.9% | ||
Schwab Emerging Markets Equity ETF (a) | 467,473 | 9,952,500 |
41,748,329 | ||
Real Assets 10.5% | ||
Commodity 4.0% | ||
Credit Suisse Commodity Return Strategy Fund, Class I * | 962,986 | 4,930,489 |
Security | Number of Shares | Value ($) |
Real Estate 6.5% | ||
Schwab U.S. REIT ETF (a) | 187,874 | 8,161,247 |
13,091,736 | ||
Fixed Income 12.9% | ||
Corporate Bond 12.1% | ||
Schwab U.S. Aggregate Bond ETF (a) | 281,249 | 15,108,696 |
Inflation-Protected Bond 0.8% | ||
Schwab U.S. TIPS ETF (a) | 17,578 | 992,806 |
16,101,502 | ||
Money Market Fund 2.5% | ||
Schwab Variable Share Price Money Fund, Ultra Shares 0.38% (a)(b) | 3,084,758 | 3,085,066 |
Total Other Investment Companies | ||
(Cost $117,536,503) | 121,705,591 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments 2.5% of net assets | ||
Time Deposits 2.5% | ||
Australia & New Zealand Banking Group Ltd. | ||
0.13%, 07/01/16 (c) | 617,562 | 617,562 |
DNB | ||
0.13%, 07/01/16 (c) | 1,234,718 | 1,234,718 |
National Australia Bank | ||
0.13%, 07/01/16 (c) | 1,234,718 | 1,234,718 |
Total Short-Term Investments | ||
(Cost $3,086,998) | 3,086,998 |
* | Non-income producing security. |
(a) | Issuer is affiliated with the fund's investment adviser. |
(b) | The rate shown is the 7-day yield. |
(c) | The rate shown is the current daily overnight rate. |
ETF — | Exchange-traded fund |
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 | $121,705,591 | $— | $— | $121,705,591 | |||||
Short-Term Investments1 | — | 3,086,998 | — | 3,086,998 | |||||
Total | $121,705,591 | $3,086,998 | $— | $124,792,589 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $108,942,042) | $114,242,265 | |
Investments in unaffiliated issuers, at value (cost $11,681,459) | + | 10,550,324 |
Total investments, at value (cost $120,623,501) | 124,792,589 | |
Receivables: | ||
Investments sold | 192,260 | |
Dividends | 472 | |
Interest | + | 13 |
Total assets | 124,985,334 | |
Liabilities | ||
Payables: | ||
Investments bought | 190,043 | |
Investment adviser and administrator fees | 10,654 | |
Fund shares redeemed | 12,865 | |
Accrued expenses | + | 29,519 |
Total liabilities | 243,081 | |
Net Assets | ||
Total assets | 124,985,334 | |
Total liabilities | – | 243,081 |
Net assets | $124,742,253 | |
Net Assets by Source | ||
Capital received from investors | 120,794,720 | |
Net investment income not yet distributed | 331,658 | |
Net realized capital losses | (553,213) | |
Net unrealized capital appreciation | 4,169,088 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$124,742,253 | 9,813,841 | $12.71 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $545,788 | |
Dividends received from unaffiliated underlying funds | 92,554 | |
Interest | + | 2,152 |
Total investment income | 640,494 | |
Expenses | ||
Investment adviser and administrator fees | 269,252 | |
Professional fees | 16,336 | |
Transfer agent fees | 9,959 | |
Independent trustees' fees | 9,022 | |
Shareholder reports | 3,146 | |
Portfolio accounting fees | 3,105 | |
Custodian fees | 2,301 | |
Registration fees | 497 | |
Other expenses | + | 1,072 |
Total expenses | 314,690 | |
Expense reduction by CSIM | – | 6,460 |
Net expenses | – | 308,230 |
Net investment income | 332,264 | |
Realized and Unrealized Gains (Losses) | ||
Net realized losses on sales of affiliated underlying funds | (52,661) | |
Net realized gains on sales of unaffiliated underlying funds | + | 138,520 |
Net realized gains | 85,859 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 2,866,088 | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 639,336 |
Net change in unrealized appreciation (depreciation) | + | 3,505,424 |
Net realized and unrealized gains | 3,591,283 | |
Increase in net assets resulting from operations | $3,923,547 |
Operations | |||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||
Net investment income | $332,264 | $1,660,256 | |
Net realized gains (losses) | 85,859 | (208,886) | |
Net change in unrealized appreciation (depreciation) | + | 3,505,424 | (5,346,258) |
Increase (decrease) in net assets from operations | 3,923,547 | (3,894,888) | |
Distributions to Shareholders | |||
Distributions from net investment income | (1,689,400) | (1,520,306) | |
Distributions from net realized gains | + | (147,955) | (172,844) |
Total distributions | ($1,837,355) | ($1,693,150) |
Transactions in Fund Shares | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 501,380 | $6,141,176 | 1,970,916 | $25,958,054 | |
Shares reinvested | 144,560 | 1,837,356 | 128,953 | 1,693,150 | |
Shares redeemed | + | (501,694) | (6,198,984) | (600,638) | (7,806,943) |
Net transactions in fund shares | 144,246 | $1,779,548 | 1,499,231 | $19,844,261 | |
Shares Outstanding and Net Assets | |||||
1/1/16-6/30/16 | 1/1/15-12/31/15 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 9,669,595 | $120,876,513 | 8,170,364 | $106,620,290 | |
Total increase | + | 144,246 | 3,865,740 | 1,499,231 | 14,256,223 |
End of period | 9,813,841 | $124,742,253 | 9,669,595 | $120,876,513 | |
Net investment income not yet distributed | $331,658 | $1,688,794 |
Schwab Annuity Portfolios (organized January 21, 1994) |
Schwab Government Money Market Portfolio™ |
(formerly 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 | 0.6% |
Schwab U.S. Small-Cap ETF | 0.3% |
Schwab International Equity ETF | 0.5% |
Schwab International Small-Cap Equity ETF | 0.8% |
Schwab Emerging Markets Equity ETF | 0.6% |
Schwab U.S. REIT ETF | 0.3% |
Schwab U.S. TIPS ETF | 0.1% |
Schwab U.S. Aggregate Bond ETF | 0.5% |
Schwab Variable Share Price Money Fund, Ultra Shares | 3.5% |
Underlying Funds | Balance of Shares Held at 12/31/15 | Gross Purchases | Gross Sales | Balance of Shares Held at 06/30/2016 | Market Value at 06/30/2016 | Realized Gains (Losses) 01/01/16 to 06/30/2016 | Distributions Received* 01/01/16 to 06/30/2016 | |||||||
Schwab U.S. Large-Cap ETF | 729,210 | 17,524 | (20,412) | 726,322 | $36,149,046 | ($70,351) | $355,810 | |||||||
Schwab U.S. Small-Cap ETF | 160,400 | 12,362 | (6,242) | 166,520 | 8,997,075 | (42,126) | 63,639 | |||||||
Schwab International Equity ETF | 924,637 | 40,691 | (18,349) | 946,979 | 25,672,601 | (91,462) | — | |||||||
Schwab International Small-Cap Equity ETF | 209,490 | 8,782 | (5,623) | 212,649 | 6,123,228 | (21,958) | — | |||||||
Schwab Emerging Markets Equity ETF | 466,231 | 18,298 | (17,056) | 467,473 | 9,952,500 | (98,106) | — | |||||||
Schwab U.S. REIT ETF | 197,248 | 4,140 | (13,514) | 187,874 | 8,161,247 | 32,135 | 82,750 | |||||||
Schwab U.S. Aggregate Bond ETF | — | 282,628 | (1,379) | 281,249 | 15,108,696 | 522 | — | |||||||
Schwab U.S. TIPS ETF | 16,084 | 1,861 | (367) | 17,578 | 992,806 | (554) | — | |||||||
Schwab Intermediate-Term U.S. Treasury ETF | 110,435 | 5,119 | (115,554) | — | — | 239,239 | 38,658 | |||||||
Schwab Value Advantage Money Fund, Ultra Shares (formerly named Institutional Prime Shares) | 3,080,543 | 1,216 | (3,081,759) | — | — | — | 1,460 | |||||||
Schwab Variable Share Price Money Fund, Ultra Shares | — | 3,084,758 | — | 3,084,758 | 3,085,066 | — | 3,471 | |||||||
Total | $114,242,265 | ($52,661) | $545,788 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | |
$22,482,121 | $21,966,222 |
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 |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) and President, PIMCO Funds. | 108 | Director, PS Business Parks, Inc. (2005 – 2012) |
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015). | 108 | Director, Gilead Sciences, Inc. (2005 – present) |
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant, LLC (wealth management) (Jan. 2008 – Apr. 2012). | 108 | None |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 108 | 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 and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 108 | Director, KLA-Tencor Corporation (2008 – present) |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Consultant, Patmore Management Consulting (management consulting) (2008 – present). | 108 | None |
Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2015) | Co-Chief Executive Officer, Kudu Investment Management, LLC (financial services) (Jan. 2015 – present); Partner, Kudu Advisors, LLC (financial services) (June 2008 – Jan. 2015); Advisor, Asset International, Inc. (publisher of financial services information) (Aug. 2008 – Jan. 2015). | 108 | None |
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 108 | Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 108 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present) Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Walter W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation (Oct. 2008 – present); President and Chief Executive Officer (Oct. 2008 – present), Director (May 2008 – present), Charles Schwab & Co., Inc.; Director, Charles Schwab Bank (Apr. 2006 – present); and Director, Schwab Holdings, Inc. (May 2008 – present). | 108 | Director, The Charles Schwab Corporation (2008 – present) |
Interested 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 |
Marie A. Chandoha2 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). | 108 | None |
Joseph R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016) | Senior Executive Vice President and Chief Financial Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (July 2015 – present); Executive Vice President and Chief Financial Officer of The Charles Schwab Corporation and Charles Schwab & Co., Inc. (May 2007 – July 2015); Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director, Executive Vice President and Chief Financial Officer, Schwab Holdings, Inc. (May 2007 – present). | 108 | None |
Officers of the Trust | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
Marie A. Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010). |
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds (Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial Service Investment Management (May 2005 – Mar. 2011). |
Officers of the Trust (continued) | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Apr. 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – Apr. 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (Apr. 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha, and Mr. Martinetto are Interested Trustees 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 Board. |
Item 2: Code of Ethics.
Not applicable to this semi-annual report.
Item 3: Audit Committee Financial Expert.
Not applicable to this semi-annual report.
Item 4: Principal Accountant Fees and Services.
Not applicable to this semi-annual report.
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
The schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11: Controls and Procedures.
(a) | Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Chief Executive Officer, Marie Chandoha and Registrant’s Chief Financial Officer, Mark Fischer, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated |
to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. |
(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 10, 2016 |
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 10, 2016 | |
By: | /s/ Mark Fischer | |
Mark Fischer | ||
Chief Financial Officer | ||
Date: | August 10, 2016 |