UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMN-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number:811-08314
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: December 31, 2018
Item 1: | Report(s) to Shareholders. |
Linda Klingman, Vice President and Head of Money Market Strategies, leads the portfolio management team of Schwab’s money market 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, Senior Portfolio Manager, is responsible for the day-to-day co-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. |
Nicole Perret-Gentil, Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to joining CSIM in 2016, Ms. Perret-Gentil worked at Freddie Mac for 15 years, most recently as a Senior Portfolio Manager where she managed and executed trades for a fixed income strategy. Prior to that role, she served as a Portfolio Manager performing fixed income analysis, a Senior Research Analyst for investor and dealer relations, a Senior Securities Operations Analyst in loan and securities operations, and a Lead Mortgage Securities Operations Specialist. She also worked at Merrill Lynch for a year as a Senior Specialist in fixed income global banking and investments. |
Weighted Average Maturity2 | 13 |
1 | Maturity shown is the date the interest rate on those securities is reset, or the date those securities can be redeemed through demand. |
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 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
4 | Less than 0.05% |
Schwab Government Money Market Portfolio | |
Ticker Symbol | SWPXX |
Seven-Day Yield (with waivers)2 | 2.17% |
Seven-Day Yield (without waivers)2 | 2.08% |
Seven-Day Effective Yield (with waivers)2 | 2.19% |
1 | 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. |
2 | The Seven-Day Yield (with waivers) is the average income paid out over the previous seven days assuming interest income is not reinvested and it reflects the effect of any applicable waivers. Absent such waivers, the fund’s yield would have been lower. The Seven-Day Yield (without waivers) is the yield without the effect of any applicable waivers. The Seven-Day Effective Yield is the yield with waivers assuming that all interest income is reinvested in additional shares of the fund. For additional details, see financial note 4. |
Expense Ratio (Annualized)1 | Beginning Account Value at 7/1/18 | Ending Account Value (Net of Expenses) at 12/31/18 | Expenses Paid During Period 7/1/18-12/31/182 | |
Schwab Government Money Market Portfolio | ||||
Actual Return | 0.35% | $1,000.00 | $1,008.90 | $1.77 |
Hypothetical 5% Return | 0.35% | $1,000.00 | $1,023.44 | $1.79 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by the 365 days of the fiscal year. |
1/1/18– 12/31/18 | 1/1/17– 12/31/17 | 1/1/16– 12/31/16 | 1/1/15– 12/31/15 | 1/1/14– 12/31/14 | ||
Per-Share Data | ||||||
Net asset value at beginning of period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.021 | 0.001,2 | 0.001,2 | 0.001,2 | 0.002 | |
Net realized and unrealized gains (losses) | (0.00)2 | 0.002 | 0.002 | (0.00)2,3 | 0.002 | |
Total from investment operations | 0.02 | 0.002 | 0.002 | 0.002 | 0.002 | |
Less distributions: | ||||||
Distributions from net investment income | (0.02) | (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 | |
Total return | 1.52% | 0.45% | 0.01% | 0.01% | 0.01% | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses | 0.35% | 0.46%4 | 0.37%5 | 0.12%5 | 0.07%5 | |
Gross operating expenses | 0.48% | 0.50% | 0.49% | 0.54% | 0.49% | |
Net investment income (loss) | 1.55% | 0.44% | 0.01% | 0.01% | 0.01% | |
Net assets, end of period (x 1,000,000) | $138 | $95 | $106 | $116 | $117 | |
Issuer | Footnotes | Rate | Effective Maturity | Maturity Date | Face Amount ($) | Value ($) | ||||||||
Fixed-Rate Obligations25.6% of net assets | ||||||||||||||
U.S. Government Agency Debt 24.5% | ||||||||||||||
FEDERAL FARM CREDIT BANKS FUNDING CORP | 1.03% | 02/12/19 | 3,000,000 | 2,995,173 | ||||||||||
2.42% | 03/08/19 | 100,000 | 99,566 | |||||||||||
FEDERAL HOME LOAN BANKS | 2.23% | 01/02/19 | 1,000,000 | 1,000,000 | ||||||||||
2.23% | 01/04/19 | 1,000,000 | 999,877 | |||||||||||
2.26% | 01/09/19 | 2,000,000 | 1,999,128 | |||||||||||
2.30% | 01/09/19 | 3,000,000 | 2,998,663 | |||||||||||
2.33% | 01/09/19 | 100,000 | 99,955 | |||||||||||
2.26% | 01/11/19 | 1,700,000 | 1,699,044 | |||||||||||
2.40% | 01/14/19 | 200,000 | 199,840 | |||||||||||
1.25% | 01/16/19 | 900,000 | 899,624 | |||||||||||
2.33% | 01/16/19 | 700,000 | 699,369 | |||||||||||
2.30% | 01/18/19 | 1,000,000 | 998,985 | |||||||||||
2.31% | 01/23/19 | 1,500,000 | 1,497,988 | |||||||||||
2.30% | 01/24/19 | 1,000,000 | 998,604 | |||||||||||
2.40% | 01/25/19 | 200,000 | 199,695 | |||||||||||
2.41% | 01/30/19 | 255,000 | 254,524 | |||||||||||
2.40% | 02/06/19 | 800,000 | 798,141 | |||||||||||
2.41% | 02/06/19 | 825,000 | 823,079 | |||||||||||
2.45% | 02/12/19 | 200,000 | 199,444 | |||||||||||
2.38% | 02/13/19 | 700,000 | 698,067 | |||||||||||
2.40% | 02/13/19 | 3,000,000 | 2,991,635 | |||||||||||
2.39% | 02/20/19 | 1,800,000 | 1,794,184 | |||||||||||
2.40% | 02/25/19 | 100,000 | 99,642 | |||||||||||
2.43% | 03/01/19 | 100,000 | 99,610 | |||||||||||
2.46% | 03/01/19 | 200,000 | 199,210 | |||||||||||
2.42% | 03/13/19 | 5,300,000 | 5,275,218 | |||||||||||
2.42% | 03/15/19 | 2,000,000 | 1,990,388 | |||||||||||
1.38% | 03/18/19 | 1,000,000 | 997,761 | |||||||||||
2.46% | 03/28/19 | 100,000 | 99,424 | |||||||||||
FEDERAL HOME LOAN MORTGAGE CORPORATION | 1.13% | 04/15/19 | 228,000 | 227,103 | ||||||||||
33,932,941 |
Issuer | Footnotes | Rate | Effective Maturity | Maturity Date | Face Amount ($) | Value ($) | ||||||||
U.S. Treasury Debt 1.1% | ||||||||||||||
UNITED STATES TREASURY | 0.75% | 02/15/19 | 1,000,000 | 998,008 | ||||||||||
1.38% | 02/28/19 | 500,000 | 499,215 | |||||||||||
1,497,223 | ||||||||||||||
Total Fixed-Rate Obligations | ||||||||||||||
(Cost $35,430,164) | 35,430,164 | |||||||||||||
Variable-Rate Obligations15.9% of net assets | ||||||||||||||
U.S. Government Agency Debt 15.9% | ||||||||||||||
FEDERAL HOME LOAN BANKS | ||||||||||||||
(1 mo. USD-LIBOR - 0.05%) | 2.46% | 01/24/19 | 500,000 | 500,026 | ||||||||||
(1 mo. USD-LIBOR - 0.07%) | 2.33% | 01/11/19 | 02/11/19 | 500,000 | 500,000 | |||||||||
(1 mo. USD-LIBOR - 0.13%) | 2.30% | 01/12/19 | 02/12/19 | 1,000,000 | 1,000,000 | |||||||||
(1 mo. USD-LIBOR - 0.07%) | 2.44% | 01/25/19 | 02/25/19 | 900,000 | 900,000 | |||||||||
(3 mo. USD-LIBOR - 0.32%) | 2.09% | 01/09/19 | 04/09/19 | 10,000,000 | 9,995,915 | |||||||||
(3 mo. USD-LIBOR - 0.32%) | 2.11% | 01/12/19 | 04/12/19 | 5,000,000 | 5,000,000 | |||||||||
(1 mo. USD-LIBOR - 0.14%) | 2.25% | 01/09/19 | 05/09/19 | 600,000 | 599,945 | |||||||||
(SOFR + 0.04%) | 2.50% | 01/02/19 | 06/21/19 | 500,000 | 500,000 | |||||||||
(1 mo. USD-LIBOR - 0.03%) | 2.45% | 01/20/19 | 04/20/20 | 2,000,000 | 2,000,000 | |||||||||
FEDERAL HOME LOAN MORTGAGE CORPORATION | ||||||||||||||
(SOFR + 0.03%) | 2.49% | 01/02/19 | 06/19/19 | 1,000,000 | 1,000,000 | |||||||||
Total Variable-Rate Obligations | ||||||||||||||
(Cost $21,995,886) | 21,995,886 | |||||||||||||
Security | Footnotes | Rate | Number of Shares | Value ($) | ||||||||||
Other Investment Company0.0% of net assets | ||||||||||||||
Money Market Fund 0.0% | ||||||||||||||
State Street Institutional U.S. Government Money Market Fund | (a) | 2.27% | 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 Agreements58.6% of net assets | ||||||||||||||
U.S. Government Agency Repurchase Agreements* 36.9% | ||||||||||||||
BNP PARIBAS SA | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Government Agency Securities valued at $1,050,175, 2.61% - 3.00%, due 02/16/38 - 10/20/48) | 3.00% | 01/02/19 | 1,000,167 | 1,000,000 | ||||||||||
JP MORGAN SECURITIES LLC | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Government Agency Securities valued at $8,240,002, 3.50% - 4.00%, due 05/01/33 - 09/20/48) | 3.00% | 01/02/19 | 8,001,333 | 8,000,000 |
Issuer | Footnotes | Rate | Effective Maturity | Maturity Date | Maturity Amount ($) | Value ($) | ||||||||
MERRILL LYNCH PIERCE FENNER & SMITH INC | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Government Agency Securities valued at $19,570,001, 4.50%, due 11/01/48) | 3.00% | 01/02/19 | 19,003,167 | 19,000,000 | ||||||||||
MIZUHO SECURITIES USA LLC | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Treasury Securities valued at $13,260,040, 2.63%, due 12/31/23) | 2.98% | 01/02/19 | 13,002,152 | 13,000,000 | ||||||||||
RBC DOMINION SECURITIES INC | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Treasury and U.S. Government Agency Securities valued at $2,057,445, 1.25% - 5.50%, due 07/15/19 - 10/20/48) | 2.97% | 01/02/19 | 2,000,330 | 2,000,000 | ||||||||||
ROYAL BANK OF CANADA | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Government Agency Securities valued at $4,120,687, 2.62% - 5.00%, due 02/01/33 - 06/01/51) | 3.00% | 01/02/19 | 4,000,667 | 4,000,000 | ||||||||||
WELLS FARGO SECURITIES LLC | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Government Agency Securities valued at $4,160,694, 2.00% - 4.50%, due 04/01/19 - 12/01/48) | 3.00% | 01/02/19 | 4,000,667 | 4,000,000 | ||||||||||
51,000,000 | ||||||||||||||
U.S. Treasury Repurchase Agreements 21.7% | ||||||||||||||
BANK OF NOVA SCOTIA | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Treasury Securities valued at $3,060,517, 2.75%, due 11/15/23) | 2.90% | 01/02/19 | 3,000,483 | 3,000,000 | ||||||||||
BARCLAYS BANK PLC | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Treasury Securities valued at $13,239,551, 0.00% - 2.88%, due 01/17/19 - 11/15/46) | 2.95% | 01/02/19 | 12,979,944 | 12,977,817 | ||||||||||
BNP PARIBAS SA | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Treasury Securities valued at $12,242,015, 2.13%, due 02/29/24) | 2.95% | 01/02/19 | 12,001,967 | 12,000,000 | ||||||||||
WELLS FARGO SECURITIES LLC | ||||||||||||||
Issued 12/31/18, repurchase date 01/02/19 (Collateralized by U.S. Treasury Securities valued at $2,040,337, 0.00% - 6.25%, due 01/31/19 - 08/15/24) | 2.95% | 01/02/19 | 2,000,328 | 2,000,000 | ||||||||||
29,977,817 | ||||||||||||||
Total Repurchase Agreements | ||||||||||||||
(Cost $80,977,817) | 80,977,817 |
(a) | The rate shown is the 7-day yield. |
* | Collateralized via U.S. Government Agency Securities or less frequently by higher rated U.S. Treasury Securities. |
LIBOR — | London Interbank Offered Rate is the interest rate banks charge each other for short-term loans. |
SOFR — | Secured Overnight Financing Rate is published daily by the Federal Reserve Bank of New York and is based on the cost of borrowing cash overnight collateralized by U.S. Treasury securities. |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |
Assets | |||||
Fixed-Rate Obligations1 | $— | $35,430,164 | $— | $35,430,164 | |
Variable-Rate Obligations1 | — | 21,995,886 | — | 21,995,886 | |
Other Investment Company1 | 45,600 | — | — | 45,600 | |
Repurchase Agreements1 | — | 80,977,817 | — | 80,977,817 | |
Total | $45,600 | $138,403,867 | $— | $138,449,467 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in unaffiliated issuers, at cost and value (Note 2a) | $57,471,650 | |
Repurchase agreements, at cost and value (Note 2a) | 80,977,817 | |
Receivables: | ||
Fund shares sold | 372,045 | |
Interest | 120,612 | |
Dividends | 88 | |
Prepaid expenses | + | 362 |
Total assets | 138,942,574 | |
Liabilities | ||
Payables: | ||
Investment adviser and administrator fees | 29,296 | |
Independent trustees’ fees | 48 | |
Fund shares redeemed | 563,060 | |
Accrued expenses | + | 74,792 |
Total liabilities | 667,196 | |
Net Assets | ||
Total assets | 138,942,574 | |
Total liabilities | – | 667,196 |
Net assets | $138,275,378 | |
Net Assets by Source | ||
Capital received from investors | 138,227,228 | |
Total distributable earnings1 | 48,150 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$138,275,378 | 138,274,053 | $1.00 | ||
1 | The SEC eliminated the requirement to disclose total distributable earnings by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 7 for additional information). |
Investment Income | ||
Interest | $2,071,181 | |
Dividends | + | 796 |
Total investment income | 2,071,977 | |
Expenses | ||
Investment adviser and administrator fees | 383,385 | |
Portfolio accounting fees | 49,633 | |
Professional fees | 37,431 | |
Custodian fees | 25,426 | |
Independent trustees’ fees | 16,379 | |
Shareholder reports | 9,442 | |
Transfer agent fees | 1,919 | |
Other expenses | + | 3,850 |
Total expenses | 527,465 | |
Expense reduction by CSIM and its affiliates | – | 144,080 |
Net expenses | – | 383,385 |
Net investment income | 1,688,592 | |
Realized Gains (Losses) | ||
Net realized losses on investments | (14) | |
Increase in net assets resulting from operations | $1,688,578 |
Operations | ||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||
Net investment income | $1,688,592 | $449,466 | ||
Net realized gains (losses) | + | (14) | 2,223 | |
Increase in net assets from operations | 1,688,578 | 451,689 | ||
Distributions to Shareholders1 | ||||
Total distributions | ($1,688,592) | ($450,116) | ||
Transactions in Fund Shares* | ||||
Shares sold | 143,509,438 | 67,235,376 | ||
Shares reinvested | 1,688,592 | 450,116 | ||
Shares redeemed | + | (101,985,123) | (78,281,164) | |
Net transactions in fund shares | 43,212,907 | (10,595,672) | ||
Net Assets | ||||
Beginning of period | 95,062,485 | 105,656,584 | ||
Total increase or decrease | + | 43,212,893 | (10,594,099) | |
End of period2 | $138,275,378 | $95,062,485 |
* | Transactions took place at $1.00 per share; figures for share quantities are the same as for dollars. |
1 | For the period ended December 31, 2017, the fund distributed to shareholders $450,116 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 7 for additional information). |
2 | End of period - Net assets include net investment income not yet distributed of $2,564 at December 31, 2017. The SEC eliminated the requirement to disclose undistributed net investment income in 2018. |
SCHWAB ANNUITY PORTFOLIOS (ORGANIZED JANUARY 21, 1994) | |
Schwab Government Money Market Portfolio | |
Schwab S&P 500 Index Portfolio | |
Schwab VIT Balanced Portfolio | |
Schwab VIT Balanced with Growth Portfolio | |
Schwab VIT Growth Portfolio |
2. Significant Accounting Policies:
3. Risk Factors:
4. Affiliates and Affiliated Transactions:
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% |
5. Board of Trustees:
6. Borrowing from Banks:
7. Federal Income Taxes:
Undistributed ordinary income | $2,564 |
Net unrealized appreciation (depreciation) on investments | 45,600 |
Total | $48,164 |
Current period distributions | |
Ordinary income | $1,688,592 |
Long-term capital gains | — |
Prior period distributions | |
Ordinary income | $449,060 |
Long-term capital gains | 1,056 |
8. Subsequent Events:
San Francisco, California
February 19, 2019
Independent Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 99 | None |
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 (Oct. 1979 – present), The Hoover Institution at Stanford University (public policy think tank); Senior Fellow (2000 – present), Stanford Institute for Economic Policy Research; Professor of Public Policy (1994 – 2015), Stanford University. | 99 | Director (2005 – present), Gilead Sciences, Inc. |
Nancy F. Heller 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 2018) | President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services). | 99 | None |
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 (May 2012 – present), Kochis Global (wealth management consulting). | 99 | None |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
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. | 99 | Director (2003 – present), Symantec Corporation Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc. |
Jane P. Moncreiff 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 2019) | Chief Investment Officer (2009-2017), CareGroup Healthcare System, Inc. (healthcare). | 99 | None |
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 (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses). | 99 | Director (2008 – present), KLA-Tencor Corporation |
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 (2008 – present), Patmore Management Consulting (management consulting). | 99 | 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 (Mar. 1990 – present), Smith Graham & Co. (investment advisors). | 99 | Director (2012 – present), Eaton |
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 (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (July 2016 – present), Charles Schwab Investment Management, Inc. | 99 | Director (2008 – present), The Charles Schwab Corporation |
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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). | 99 | 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) | Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 99 | 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 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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). |
Jonathan de St. Paer 1973 President (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018) | President (Oct. 2018 – present), Charles Schwab Investment Management, Inc.; Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – present) and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.; President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs. |
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 (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011 – Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005 – Mar. 2011), Massachusetts Financial Service Investment Management. |
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) and Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Treasurer and Chief Financial Officer (June 2006 – Dec. 2015), Laudus Funds; Treasurer and Principal Financial Officer (Nov. 2004 – Dec. 2015), Schwab Funds; Treasurer and Principal Financial Officer (Oct. 2009 – Dec. 2015), Schwab ETFs; Director (Apr. 2005 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited. |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009 – Apr. 2011), Financial Engines, Inc. (investment management firm); Head of Quantitative Equity (July 2004 – Jan. 2009), ING Investment Management. |
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 (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Fixed Income (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Managing Director, Global Head of Active Fixed-Income Strategies (Jan. 2008 – Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006 – Jan. 2008), Loomis, Sayles & Company (investment management firm). |
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) and Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present) and 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 (Apr. 2011 – present), Laudus Funds; Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
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 |
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 (July 2005 – present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005 – present) and 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 (Oct. 2009 – present), Schwab ETFs. |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, and is a director of CSIM. Ms. Chandoha is an Interested Trustee because she owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
* | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
1 | The Cboe Volatility Index® (or VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. |
Christopher Bliss, CFA, Vice President and Head of the Passive Equity Team, leads the portfolio management team for Schwab’s passive equity mutual funds and ETFs. He also has overall responsibility for all aspects of the management of the fund. Prior to joining CSIM in 2016, Mr. Bliss spent 12 years at BlackRock (formerly Barclays Global Investors) managing and leading institutional index teams, most recently as a Managing Director and Head of Americas Institutional Index team. Prior to BlackRock, he worked as an equity analyst and portfolio manager for Harris Bretall and before that, as a research analyst for JP Morgan. |
Ferian Juwono, CFA, 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 more than four years as a senior financial analyst with Union Bank of California. |
Sabya Sinha, Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to joining CSIM in 2015, Mr. Sinha spent a year at F-Squared Investments on the product development and analytics team. Prior to F-Squared, he worked at IndexIQ Advisors as a senior index portfolio manager for three years and for Bank of America’s Columbia Management subsidiary as a portfolio manager for three years. |
Fund and Inception Date | 1 Year | 5 Years | 10 Years |
Fund: Schwab S&P 500 Index Portfolio (11/01/96) | -4.40% | 8.32% | 12.88% |
S&P 500® Index | -4.38% | 8.49% | 13.12% |
Fund Category: Morningstar Large-Cap Blend2 | -5.91% | 7.26% | 12.46% |
Fund Expense Ratio3: 0.03% |
1 | 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. |
2 | 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. |
3 | As stated in the prospectus. |
Number of Holdings | 507 |
Weighted Average Market Cap ($ x 1,000,000) | $200,637 |
Price/Earnings Ratio (P/E) | 17.4 |
Price/Book Ratio (P/B) | 2.8 |
Portfolio Turnover Rate | 5% |
1 | Excludes derivatives. |
2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
3 | This list is not a recommendation of any security by the investment adviser. |
Expense Ratio (Annualized)1 | Beginning Account Value at 7/1/18 | Ending Account Value (Net of Expenses) at 12/31/18 | Expenses Paid During Period 7/1/18-12/31/182 | |
Schwab S&P 500 Index Portfolio | ||||
Actual Return | 0.03% | $1,000.00 | $931.20 | $0.15 |
Hypothetical 5% Return | 0.03% | $1,000.00 | $1,025.05 | $0.15 |
1 | Based on the most recent six-month expense ratio. |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by the 365 days of the fiscal year. |
1/1/18– 12/31/18 | 1/1/17– 12/31/17 | 1/1/16– 12/31/16 | 1/1/15– 12/31/15 | 1/1/14– 12/31/14 | ||
Per-Share Data | ||||||
Net asset value at beginning of period | $39.51 | $33.01 | $30.09 | $30.21 | $27.03 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.821 | 0.711 | 0.621 | 0.591 | 0.48 | |
Net realized and unrealized gains (losses) | (2.51) | 6.39 | 2.85 | (0.24) | 3.12 | |
Total from investment operations | (1.69) | 7.10 | 3.47 | 0.35 | 3.60 | |
Less distributions: | ||||||
Distributions from net investment income | (0.68) | (0.59) | (0.55) | (0.47) | (0.42) | |
Distributions from net realized gains | (0.04) | (0.01) | — | — | — | |
Total distributions | (0.72) | (0.60) | (0.55) | (0.47) | (0.42) | |
Net asset value at end of period | $37.10 | $39.51 | $33.01 | $30.09 | $30.21 | |
Total return | (4.40%) | 21.72% | 11.68% | 1.17% | 13.41% | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Total expenses | 0.03% | 0.06%2 | 0.22% | 0.24% | 0.23% | |
Net operating expenses | N/A3 | 0.06%2 | 0.22% | 0.24% | 0.22% | |
Net investment income (loss) | 2.03% | 1.97% | 2.00% | 1.94% | 1.79% | |
Portfolio turnover rate | 5% | 3% | 2% | 3% | 2% | |
Net assets, end of period (x 1,000,000) | $340 | $346 | $282 | $245 | $229 | |
Security | Number of Shares | Value ($) |
Common Stock99.6% of net assets | ||
Automobiles & Components 0.5% | ||
Aptiv plc | 4,246 | 261,426 |
BorgWarner, Inc. | 3,310 | 114,989 |
Ford Motor Co. | 62,711 | 479,739 |
General Motors Co. | 21,120 | 706,464 |
Goodyear Tire & Rubber Co. | 3,833 | 78,232 |
Harley-Davidson, Inc. | 2,656 | 90,623 |
1,731,473 | ||
Banks 5.6% | ||
Bank of America Corp. | 146,920 | 3,620,109 |
BB&T Corp. | 12,423 | 538,164 |
Citigroup, Inc. | 39,309 | 2,046,427 |
Citizens Financial Group, Inc. | 7,592 | 225,710 |
Comerica, Inc. | 2,574 | 176,808 |
Fifth Third Bancorp | 10,611 | 249,677 |
First Republic Bank | 2,635 | 228,981 |
Huntington Bancshares, Inc. | 17,048 | 203,212 |
JPMorgan Chase & Co. | 53,532 | 5,225,794 |
KeyCorp | 16,623 | 245,688 |
M&T Bank Corp. | 2,258 | 323,188 |
People’s United Financial, Inc. | 6,058 | 87,417 |
Regions Financial Corp. | 16,447 | 220,061 |
SunTrust Banks, Inc. | 7,225 | 364,429 |
SVB Financial Group * | 860 | 163,331 |
The PNC Financial Services Group, Inc. | 7,439 | 869,693 |
U.S. Bancorp | 24,453 | 1,117,502 |
Wells Fargo & Co. | 68,196 | 3,142,472 |
Zions Bancorp NA | 3,108 | 126,620 |
19,175,283 | ||
Capital Goods 6.4% | ||
3M Co. | 9,376 | 1,786,503 |
A.O. Smith Corp. | 2,278 | 97,271 |
Allegion plc | 1,528 | 121,797 |
AMETEK, Inc. | 3,726 | 252,250 |
Arconic, Inc. | 6,827 | 115,103 |
Caterpillar, Inc. | 9,490 | 1,205,894 |
Cummins, Inc. | 2,375 | 317,395 |
Deere & Co. | 5,179 | 772,552 |
Dover Corp. | 2,337 | 165,810 |
Eaton Corp. plc | 6,979 | 479,178 |
Emerson Electric Co. | 10,072 | 601,802 |
Fastenal Co. | 4,623 | 241,737 |
Flowserve Corp. | 2,115 | 80,412 |
Fluor Corp. | 2,298 | 73,996 |
Fortive Corp. | 4,737 | 320,505 |
Fortune Brands Home & Security, Inc. | 2,300 | 87,377 |
General Dynamics Corp. | 4,487 | 705,401 |
General Electric Co. | 140,020 | 1,059,951 |
Harris Corp. | 1,899 | 255,700 |
Honeywell International, Inc. | 11,924 | 1,575,399 |
Huntington Ingalls Industries, Inc. | 694 | 132,075 |
Illinois Tool Works, Inc. | 4,915 | 622,681 |
Ingersoll-Rand plc | 3,957 | 360,997 |
Security | Number of Shares | Value ($) |
Jacobs Engineering Group, Inc. | 1,937 | 113,237 |
Johnson Controls International plc | 14,881 | 441,222 |
L3 Technologies, Inc. | 1,259 | 218,638 |
Lockheed Martin Corp. | 3,988 | 1,044,218 |
Masco Corp. | 4,941 | 144,475 |
Northrop Grumman Corp. | 2,788 | 682,781 |
PACCAR, Inc. | 5,629 | 321,641 |
Parker-Hannifin Corp. | 2,133 | 318,116 |
Pentair plc | 2,602 | 98,304 |
Quanta Services, Inc. | 2,302 | 69,290 |
Raytheon Co. | 4,569 | 700,656 |
Rockwell Automation, Inc. | 1,945 | 292,684 |
Roper Technologies, Inc. | 1,666 | 444,022 |
Snap-on, Inc. | 888 | 129,018 |
Stanley Black & Decker, Inc. | 2,446 | 292,884 |
Textron, Inc. | 3,893 | 179,039 |
The Boeing Co. | 8,504 | 2,742,540 |
TransDigm Group, Inc. * | 776 | 263,887 |
United Rentals, Inc. * | 1,310 | 134,314 |
United Technologies Corp. | 13,075 | 1,392,226 |
W.W. Grainger, Inc. | 730 | 206,123 |
Xylem, Inc. | 2,867 | 191,286 |
21,852,387 | ||
Commercial & Professional Services 0.7% | ||
Cintas Corp. | 1,399 | 235,018 |
Copart, Inc. * | 3,346 | 159,872 |
Equifax, Inc. | 1,955 | 182,069 |
IHS Markit Ltd. * | 5,782 | 277,362 |
Nielsen Holdings plc | 5,729 | 133,658 |
Republic Services, Inc. | 3,486 | 251,306 |
Robert Half International, Inc. | 1,950 | 111,540 |
Rollins, Inc. | 2,413 | 87,109 |
Verisk Analytics, Inc. * | 2,642 | 288,084 |
Waste Management, Inc. | 6,312 | 561,705 |
2,287,723 | ||
Consumer Durables & Apparel 1.1% | ||
D.R. Horton, Inc. | 5,479 | 189,902 |
Garmin Ltd. | 1,956 | 123,854 |
Hanesbrands, Inc. | 5,888 | 73,777 |
Hasbro, Inc. | 1,873 | 152,181 |
Leggett & Platt, Inc. | 2,100 | 75,264 |
Lennar Corp., Class A | 4,752 | 186,041 |
Mattel, Inc. * | 5,568 | 55,624 |
Michael Kors Holdings Ltd. * | 2,424 | 91,918 |
Mohawk Industries, Inc. * | 1,013 | 118,480 |
Newell Brands, Inc. | 6,857 | 127,472 |
NIKE, Inc., Class B | 20,494 | 1,519,425 |
PulteGroup, Inc. | 4,142 | 107,651 |
PVH Corp. | 1,214 | 112,841 |
Ralph Lauren Corp. | 872 | 90,217 |
Tapestry, Inc. | 4,672 | 157,680 |
Under Armour, Inc., Class A * | 2,906 | 51,349 |
Under Armour, Inc., Class C * | 3,188 | 51,550 |
Security | Number of Shares | Value ($) |
VF Corp. | 5,237 | 373,608 |
Whirlpool Corp. | 1,043 | 111,465 |
3,770,299 | ||
Consumer Services 1.9% | ||
Carnival Corp. | 6,422 | 316,605 |
Chipotle Mexican Grill, Inc. * | 394 | 170,125 |
Darden Restaurants, Inc. | 2,002 | 199,920 |
H&R Block, Inc. | 3,338 | 84,685 |
Hilton Worldwide Holdings, Inc. | 4,778 | 343,060 |
Marriott International, Inc., Class A | 4,558 | 494,816 |
McDonald’s Corp. | 12,413 | 2,204,176 |
MGM Resorts International | 8,057 | 195,463 |
Norwegian Cruise Line Holdings Ltd. * | 3,571 | 151,375 |
Royal Caribbean Cruises Ltd. | 2,753 | 269,216 |
Starbucks Corp. | 19,971 | 1,286,132 |
Wynn Resorts Ltd. | 1,570 | 155,289 |
Yum! Brands, Inc. | 5,030 | 462,358 |
6,333,220 | ||
Diversified Financials 5.3% | ||
Affiliated Managers Group, Inc. | 860 | 83,798 |
American Express Co. | 11,275 | 1,074,733 |
Ameriprise Financial, Inc. | 2,240 | 233,789 |
Berkshire Hathaway, Inc., Class B * | 31,317 | 6,394,305 |
BlackRock, Inc. | 1,955 | 767,963 |
Capital One Financial Corp. | 7,623 | 576,223 |
Cboe Global Markets, Inc. | 1,788 | 174,920 |
CME Group, Inc. | 5,761 | 1,083,759 |
Discover Financial Services | 5,408 | 318,964 |
E*TRADE Financial Corp. | 4,096 | 179,733 |
Franklin Resources, Inc. | 4,840 | 143,554 |
Intercontinental Exchange, Inc. | 9,182 | 691,680 |
Invesco Ltd. | 6,510 | 108,977 |
Jefferies Financial Group, Inc. | 4,612 | 80,064 |
Moody’s Corp. | 2,692 | 376,988 |
Morgan Stanley | 21,047 | 834,514 |
MSCI, Inc. | 1,411 | 208,024 |
Nasdaq, Inc. | 1,837 | 149,844 |
Northern Trust Corp. | 3,572 | 298,584 |
Raymond James Financial, Inc. | 2,076 | 154,475 |
S&P Global, Inc. | 4,028 | 684,518 |
State Street Corp. | 6,114 | 385,610 |
Synchrony Financial | 10,639 | 249,591 |
T. Rowe Price Group, Inc. | 3,887 | 358,848 |
The Bank of New York Mellon Corp. | 14,648 | 689,481 |
The Charles Schwab Corp.(a) | 19,266 | 800,117 |
The Goldman Sachs Group, Inc. | 5,569 | 930,301 |
18,033,357 | ||
Energy 5.3% | ||
Anadarko Petroleum Corp. | 8,124 | 356,156 |
Apache Corp. | 6,125 | 160,781 |
Baker Hughes, a GE Co. | 8,256 | 177,504 |
Cabot Oil & Gas Corp. | 6,946 | 155,243 |
Chevron Corp. | 30,763 | 3,346,707 |
Cimarex Energy Co. | 1,528 | 94,201 |
Concho Resources, Inc. * | 3,213 | 330,264 |
ConocoPhillips | 18,547 | 1,156,405 |
Devon Energy Corp. | 7,594 | 171,169 |
Diamondback Energy, Inc. | 2,483 | 230,174 |
EOG Resources, Inc. | 9,338 | 814,367 |
Exxon Mobil Corp. | 68,160 | 4,647,830 |
Halliburton Co. | 14,050 | 373,449 |
Helmerich & Payne, Inc. | 1,758 | 84,279 |
Security | Number of Shares | Value ($) |
Hess Corp. | 3,987 | 161,474 |
HollyFrontier Corp. | 2,570 | 131,378 |
Kinder Morgan, Inc. | 30,468 | 468,598 |
Marathon Oil Corp. | 13,390 | 192,013 |
Marathon Petroleum Corp. | 11,122 | 656,309 |
National-Oilwell Varco, Inc. | 6,199 | 159,314 |
Newfield Exploration Co. * | 3,141 | 46,047 |
Noble Energy, Inc. | 7,687 | 144,208 |
Occidental Petroleum Corp. | 12,162 | 746,504 |
ONEOK, Inc. | 6,629 | 357,635 |
Phillips 66 | 6,840 | 589,266 |
Pioneer Natural Resources Co. | 2,746 | 361,154 |
Schlumberger Ltd. | 22,284 | 804,007 |
TechnipFMC plc | 6,914 | 135,376 |
Valero Energy Corp. | 6,809 | 510,471 |
Williams Cos., Inc. | 19,490 | 429,754 |
17,992,037 | ||
Food & Staples Retailing 1.6% | ||
Costco Wholesale Corp. | 7,055 | 1,437,174 |
Kroger Co. | 12,845 | 353,238 |
Sysco Corp. | 7,686 | 481,605 |
Walgreens Boots Alliance, Inc. | 12,943 | 884,395 |
Walmart, Inc. | 22,920 | 2,134,998 |
5,291,410 | ||
Food, Beverage & Tobacco 4.0% | ||
Altria Group, Inc. | 30,250 | 1,494,048 |
Archer-Daniels-Midland Co. | 9,028 | 369,877 |
Brown-Forman Corp., Class B | 2,687 | 127,847 |
Campbell Soup Co. | 3,082 | 101,675 |
Conagra Brands, Inc. | 7,818 | 166,992 |
Constellation Brands, Inc., Class A | 2,674 | 430,033 |
General Mills, Inc. | 9,606 | 374,058 |
Hormel Foods Corp. | 4,388 | 187,280 |
Kellogg Co. | 4,049 | 230,833 |
Lamb Weston Holdings, Inc. | 2,369 | 174,264 |
McCormick & Co., Inc. | 1,969 | 274,164 |
Molson Coors Brewing Co., Class B | 3,024 | 169,828 |
Mondelez International, Inc., Class A | 23,418 | 937,423 |
Monster Beverage Corp. * | 6,438 | 316,878 |
PepsiCo, Inc. | 22,721 | 2,510,216 |
Philip Morris International, Inc. | 25,024 | 1,670,602 |
The Coca-Cola Co. | 61,662 | 2,919,696 |
The Hershey Co. | 2,271 | 243,406 |
The JM Smucker Co. | 1,816 | 169,778 |
The Kraft Heinz Co. | 10,007 | 430,701 |
Tyson Foods, Inc., Class A | 4,721 | 252,101 |
13,551,700 | ||
Health Care Equipment & Services 6.6% | ||
Abbott Laboratories | 28,283 | 2,045,709 |
ABIOMED, Inc. * | 721 | 234,354 |
Align Technology, Inc. * | 1,178 | 246,709 |
AmerisourceBergen Corp. | 2,508 | 186,595 |
Anthem, Inc. | 4,162 | 1,093,066 |
Baxter International, Inc. | 7,983 | 525,441 |
Becton, Dickinson & Co. | 4,321 | 973,608 |
Boston Scientific Corp. * | 22,286 | 787,587 |
Cardinal Health, Inc. | 4,793 | 213,768 |
Centene Corp. * | 3,305 | 381,067 |
Cerner Corp. * | 5,314 | 278,666 |
Cigna Corp. * | 6,129 | 1,164,020 |
CVS Health Corp. | 20,815 | 1,363,799 |
Danaher Corp. | 9,934 | 1,024,394 |
Security | Number of Shares | Value ($) |
DaVita, Inc. * | 2,030 | 104,464 |
Dentsply Sirona, Inc. | 3,544 | 131,872 |
Edwards Lifesciences Corp. * | 3,355 | 513,885 |
HCA Healthcare, Inc. | 4,323 | 537,997 |
Henry Schein, Inc. * | 2,453 | 192,610 |
Hologic, Inc. * | 4,341 | 178,415 |
Humana, Inc. | 2,206 | 631,975 |
IDEXX Laboratories, Inc. * | 1,379 | 256,522 |
Intuitive Surgical, Inc. * | 1,839 | 880,734 |
Laboratory Corp. of America Holdings * | 1,626 | 205,461 |
McKesson Corp. | 3,144 | 347,318 |
Medtronic plc | 21,619 | 1,966,464 |
Quest Diagnostics, Inc. | 2,207 | 183,777 |
ResMed, Inc. | 2,282 | 259,851 |
Stryker Corp. | 5,002 | 784,063 |
The Cooper Cos., Inc. | 788 | 200,546 |
UnitedHealth Group, Inc. | 15,486 | 3,857,872 |
Universal Health Services, Inc., Class B | 1,388 | 161,785 |
Varian Medical Systems, Inc. * | 1,464 | 165,886 |
WellCare Health Plans, Inc. * | 806 | 190,289 |
Zimmer Biomet Holdings, Inc. | 3,284 | 340,616 |
22,611,185 | ||
Household & Personal Products 1.8% | ||
Church & Dwight Co., Inc. | 3,969 | 261,001 |
Clorox Co. | 2,050 | 315,987 |
Colgate-Palmolive Co. | 13,965 | 831,197 |
Coty, Inc., Class A | 7,300 | 47,888 |
Kimberly-Clark Corp. | 5,565 | 634,076 |
Procter & Gamble Co. | 40,113 | 3,687,187 |
The Estee Lauder Cos., Inc., Class A | 3,541 | 460,684 |
6,238,020 | ||
Insurance 2.4% | ||
AFLAC, Inc. | 12,257 | 558,429 |
American International Group, Inc. | 14,268 | 562,302 |
Aon plc | 3,888 | 565,160 |
Arthur J. Gallagher & Co. | 2,955 | 217,783 |
Assurant, Inc. | 858 | 76,739 |
Brighthouse Financial, Inc. * | 1,954 | 59,558 |
Chubb Ltd. | 7,422 | 958,774 |
Cincinnati Financial Corp. | 2,421 | 187,434 |
Everest Re Group Ltd. | 657 | 143,068 |
Lincoln National Corp. | 3,429 | 175,942 |
Loews Corp. | 4,411 | 200,789 |
Marsh & McLennan Cos., Inc. | 8,084 | 644,699 |
MetLife, Inc. | 15,857 | 651,088 |
Principal Financial Group, Inc. | 4,240 | 187,281 |
Prudential Financial, Inc. | 6,640 | 541,492 |
The Allstate Corp. | 5,555 | 459,010 |
The Hartford Financial Services Group, Inc. | 5,760 | 256,032 |
The Progressive Corp. | 9,395 | 566,800 |
The Travelers Cos., Inc. | 4,261 | 510,255 |
Torchmark Corp. | 1,657 | 123,496 |
Unum Group | 3,571 | 104,916 |
Willis Towers Watson plc | 2,088 | 317,084 |
8,068,131 | ||
Materials 2.7% | ||
Air Products & Chemicals, Inc. | 3,537 | 566,097 |
Albemarle Corp. | 1,726 | 133,023 |
Avery Dennison Corp. | 1,406 | 126,301 |
Ball Corp. | 5,431 | 249,717 |
Celanese Corp. | 2,150 | 193,436 |
CF Industries Holdings, Inc. | 3,696 | 160,813 |
Security | Number of Shares | Value ($) |
DowDuPont, Inc. | 36,956 | 1,976,407 |
Eastman Chemical Co. | 2,265 | 165,594 |
Ecolab, Inc. | 4,095 | 603,398 |
FMC Corp. | 2,144 | 158,570 |
Freeport-McMoRan, Inc. | 23,458 | 241,852 |
International Flavors & Fragrances, Inc. | 1,628 | 218,592 |
International Paper Co. | 6,483 | 261,654 |
Linde plc | 8,871 | 1,384,231 |
LyondellBasell Industries N.V., Class A | 5,061 | 420,873 |
Martin Marietta Materials, Inc. | 1,000 | 171,870 |
Newmont Mining Corp. | 8,580 | 297,297 |
Nucor Corp. | 5,058 | 262,055 |
Packaging Corp. of America | 1,531 | 127,777 |
PPG Industries, Inc. | 3,863 | 394,915 |
Sealed Air Corp. | 2,499 | 87,065 |
The Mosaic Co. | 5,702 | 166,555 |
The Sherwin-Williams Co. | 1,326 | 521,728 |
Vulcan Materials Co. | 2,139 | 211,333 |
WestRock Co. | 4,107 | 155,080 |
9,256,233 | ||
Media & Entertainment 7.9% | ||
Activision Blizzard, Inc. | 12,282 | 571,973 |
Alphabet, Inc., Class A * | 4,813 | 5,029,392 |
Alphabet, Inc., Class C * | 4,953 | 5,129,376 |
CBS Corp., Class B — Non Voting Shares | 5,451 | 238,318 |
Charter Communications, Inc., Class A * | 2,837 | 808,460 |
Comcast Corp., Class A | 73,083 | 2,488,476 |
Discovery, Inc., Class A * | 2,552 | 63,136 |
Discovery, Inc., Class C * | 5,819 | 134,303 |
DISH Network Corp., Class A * | 3,650 | 91,141 |
Electronic Arts, Inc. * | 4,865 | 383,897 |
Facebook, Inc., Class A * | 38,673 | 5,069,644 |
Netflix, Inc. * | 7,020 | 1,878,973 |
News Corp., Class A | 6,215 | 70,540 |
News Corp., Class B | 2,000 | 23,100 |
Omnicom Group, Inc. | 3,590 | 262,932 |
Take-Two Interactive Software, Inc. * | 1,834 | 188,792 |
The Interpublic Group of Cos., Inc. | 6,206 | 128,030 |
TripAdvisor, Inc. * | 1,620 | 87,383 |
Twenty-First Century Fox, Inc., Class A | 17,017 | 818,858 |
Twenty-First Century Fox, Inc., Class B | 7,845 | 374,834 |
Twitter, Inc. * | 11,665 | 335,252 |
Viacom, Inc., Class B | 5,639 | 144,922 |
Walt Disney Co. | 23,962 | 2,627,433 |
26,949,165 | ||
Pharmaceuticals, Biotechnology & Life Sciences 8.8% | ||
AbbVie, Inc. | 24,208 | 2,231,735 |
Agilent Technologies, Inc. | 5,102 | 344,181 |
Alexion Pharmaceuticals, Inc. * | 3,590 | 349,522 |
Allergan plc | 5,110 | 683,003 |
Amgen, Inc. | 10,258 | 1,996,925 |
Biogen, Inc. * | 3,243 | 975,884 |
Bristol-Myers Squibb Co. | 26,271 | 1,365,567 |
Celgene Corp. * | 11,270 | 722,294 |
Eli Lilly & Co. | 15,178 | 1,756,398 |
Gilead Sciences, Inc. | 20,822 | 1,302,416 |
Illumina, Inc. * | 2,367 | 709,934 |
Incyte Corp. * | 2,854 | 181,486 |
IQVIA Holdings, Inc. * | 2,553 | 296,582 |
Johnson & Johnson | 43,172 | 5,571,347 |
Merck & Co., Inc. | 41,862 | 3,198,675 |
Mettler-Toledo International, Inc. * | 406 | 229,625 |
Mylan N.V. * | 8,335 | 228,379 |
Nektar Therapeutics * | 2,819 | 92,661 |
Security | Number of Shares | Value ($) |
PerkinElmer, Inc. | 1,771 | 139,112 |
Perrigo Co., plc | 2,012 | 77,965 |
Pfizer, Inc. | 93,053 | 4,061,763 |
Regeneron Pharmaceuticals, Inc. * | 1,249 | 466,501 |
Thermo Fisher Scientific, Inc. | 6,483 | 1,450,831 |
Vertex Pharmaceuticals, Inc. * | 4,115 | 681,897 |
Waters Corp. * | 1,218 | 229,776 |
Zoetis, Inc. | 7,718 | 660,198 |
30,004,657 | ||
Real Estate 3.0% | ||
Alexandria Real Estate Equities, Inc. | 1,729 | 199,250 |
American Tower Corp. | 7,093 | 1,122,042 |
Apartment Investment & Management Co., Class A | 2,477 | 108,691 |
AvalonBay Communities, Inc. | 2,228 | 387,783 |
Boston Properties, Inc. | 2,478 | 278,899 |
CBRE Group, Inc., Class A * | 5,121 | 205,045 |
Crown Castle International Corp. | 6,679 | 725,540 |
Digital Realty Trust, Inc. | 3,329 | 354,705 |
Duke Realty Corp. | 5,783 | 149,780 |
Equinix, Inc. | 1,294 | 456,213 |
Equity Residential | 5,933 | 391,637 |
Essex Property Trust, Inc. | 1,060 | 259,923 |
Extra Space Storage, Inc. | 2,016 | 182,408 |
Federal Realty Investment Trust | 1,192 | 140,704 |
HCP, Inc. | 7,686 | 214,670 |
Host Hotels & Resorts, Inc. | 11,877 | 197,989 |
Iron Mountain, Inc. | 4,612 | 149,475 |
Kimco Realty Corp. | 6,820 | 99,913 |
Mid-America Apartment Communities, Inc. | 1,835 | 175,609 |
Prologis, Inc. | 10,136 | 595,186 |
Public Storage | 2,419 | 489,630 |
Realty Income Corp. | 4,754 | 299,692 |
Regency Centers Corp. | 2,749 | 161,311 |
SBA Communications Corp. * | 1,826 | 295,611 |
Simon Property Group, Inc. | 4,980 | 836,590 |
SL Green Realty Corp. | 1,400 | 110,712 |
The Macerich Co. | 1,707 | 73,879 |
UDR, Inc. | 4,437 | 175,794 |
Ventas, Inc. | 5,711 | 334,607 |
Vornado Realty Trust | 2,760 | 171,203 |
Welltower, Inc. | 6,048 | 419,792 |
Weyerhaeuser Co. | 12,097 | 264,440 |
10,028,723 | ||
Retailing 6.4% | ||
Advance Auto Parts, Inc. | 1,166 | 183,598 |
Amazon.com, Inc. * | 6,612 | 9,931,026 |
AutoZone, Inc. * | 406 | 340,366 |
Best Buy Co., Inc. | 3,769 | 199,606 |
Booking Holdings, Inc. * | 746 | 1,284,925 |
CarMax, Inc. * | 2,799 | 175,581 |
Dollar General Corp. | 4,229 | 457,070 |
Dollar Tree, Inc. * | 3,819 | 344,932 |
eBay, Inc. * | 14,572 | 409,036 |
Expedia Group, Inc. | 1,900 | 214,035 |
Foot Locker, Inc. | 1,829 | 97,303 |
Genuine Parts Co. | 2,375 | 228,047 |
Kohl’s Corp. | 2,687 | 178,256 |
L Brands, Inc. | 3,677 | 94,389 |
LKQ Corp. * | 5,093 | 120,857 |
Lowe’s Cos., Inc. | 12,928 | 1,194,030 |
Macy’s, Inc. | 5,001 | 148,930 |
Nordstrom, Inc. | 1,850 | 86,228 |
O'Reilly Automotive, Inc. * | 1,290 | 444,186 |
Security | Number of Shares | Value ($) |
Ross Stores, Inc. | 6,001 | 499,283 |
Target Corp. | 8,392 | 554,627 |
The Gap, Inc. | 3,379 | 87,043 |
The Home Depot, Inc. | 18,185 | 3,124,547 |
The TJX Cos., Inc. | 19,931 | 891,713 |
Tiffany & Co. | 1,737 | 139,846 |
Tractor Supply Co. | 1,983 | 165,462 |
Ulta Salon, Cosmetics & Fragrance, Inc. * | 905 | 221,580 |
21,816,502 | ||
Semiconductors & Semiconductor Equipment 3.7% | ||
Advanced Micro Devices, Inc. * | 14,157 | 261,338 |
Analog Devices, Inc. | 5,964 | 511,890 |
Applied Materials, Inc. | 15,815 | 517,783 |
Broadcom, Inc. | 6,656 | 1,692,488 |
Intel Corp. | 73,472 | 3,448,041 |
KLA-Tencor Corp. | 2,484 | 222,293 |
Lam Research Corp. | 2,497 | 340,016 |
Maxim Integrated Products, Inc. | 4,430 | 225,266 |
Microchip Technology, Inc. | 3,792 | 272,721 |
Micron Technology, Inc. * | 18,026 | 571,965 |
NVIDIA Corp. | 9,819 | 1,310,837 |
Qorvo, Inc. * | 2,034 | 123,525 |
Qualcomm, Inc. | 19,512 | 1,110,428 |
Skyworks Solutions, Inc. | 2,842 | 190,471 |
Texas Instruments, Inc. | 15,463 | 1,461,253 |
Xilinx, Inc. | 4,077 | 347,238 |
12,607,553 | ||
Software & Services 10.9% | ||
Accenture plc, Class A | 10,260 | 1,446,763 |
Adobe, Inc. * | 7,857 | 1,777,568 |
Akamai Technologies, Inc. * | 2,621 | 160,091 |
Alliance Data Systems Corp. | 756 | 113,460 |
ANSYS, Inc. * | 1,352 | 193,255 |
Autodesk, Inc. * | 3,524 | 453,222 |
Automatic Data Processing, Inc. | 7,046 | 923,871 |
Broadridge Financial Solutions, Inc. | 1,880 | 180,950 |
Cadence Design Systems, Inc. * | 4,568 | 198,617 |
Citrix Systems, Inc. | 2,073 | 212,400 |
Cognizant Technology Solutions Corp., Class A | 9,309 | 590,935 |
DXC Technology Co. | 4,530 | 240,860 |
Fidelity National Information Services, Inc. | 5,275 | 540,951 |
Fiserv, Inc. * | 6,419 | 471,732 |
FleetCor Technologies, Inc. * | 1,428 | 265,208 |
Fortinet, Inc. * | 2,323 | 163,609 |
Gartner, Inc. * | 1,450 | 185,368 |
Global Payments, Inc. | 2,556 | 263,600 |
International Business Machines Corp. | 14,615 | 1,661,287 |
Intuit, Inc. | 4,176 | 822,046 |
Jack Henry & Associates, Inc. | 1,255 | 158,783 |
Mastercard, Inc., Class A | 14,627 | 2,759,383 |
Microsoft Corp. | 124,418 | 12,637,136 |
Oracle Corp. | 41,102 | 1,855,755 |
Paychex, Inc. | 5,120 | 333,568 |
PayPal Holdings, Inc. * | 18,952 | 1,593,674 |
Red Hat, Inc. * | 2,851 | 500,750 |
Salesforce Com, Inc. * | 12,314 | 1,686,649 |
Symantec Corp. | 10,276 | 194,165 |
Synopsys, Inc. * | 2,400 | 202,176 |
The Western Union Co. | 7,154 | 122,047 |
Total System Services, Inc. | 2,699 | 219,402 |
Security | Number of Shares | Value ($) |
VeriSign, Inc. * | 1,718 | 254,762 |
Visa, Inc., Class A | 28,293 | 3,732,978 |
37,117,021 | ||
Technology Hardware & Equipment 5.4% | ||
Amphenol Corp., Class A | 4,860 | 393,757 |
Apple, Inc. | 72,570 | 11,447,192 |
Arista Networks, Inc. * | 832 | 175,303 |
Cisco Systems, Inc. | 72,385 | 3,136,442 |
Corning, Inc. | 12,915 | 390,162 |
F5 Networks, Inc. * | 975 | 157,979 |
FLIR Systems, Inc. | 2,198 | 95,701 |
Hewlett Packard Enterprise Co. | 22,872 | 302,139 |
HP, Inc. | 25,521 | 522,160 |
IPG Photonics Corp. * | 570 | 64,575 |
Juniper Networks, Inc. | 5,586 | 150,319 |
Keysight Technologies, Inc. * | 3,025 | 187,792 |
Motorola Solutions, Inc. | 2,634 | 303,015 |
NetApp, Inc. | 4,051 | 241,723 |
Seagate Technology plc | 4,210 | 162,464 |
TE Connectivity Ltd. | 5,519 | 417,402 |
Western Digital Corp. | 4,678 | 172,946 |
Xerox Corp. | 3,299 | 65,188 |
18,386,259 | ||
Telecommunication Services 2.2% | ||
AT&T, Inc. | 117,134 | 3,343,004 |
CenturyLink, Inc. | 15,392 | 233,189 |
Verizon Communications, Inc. | 66,508 | 3,739,080 |
7,315,273 | ||
Transportation 2.1% | ||
Alaska Air Group, Inc. | 1,967 | 119,692 |
American Airlines Group, Inc. | 6,567 | 210,866 |
C.H. Robinson Worldwide, Inc. | 2,220 | 186,680 |
CSX Corp. | 12,917 | 802,533 |
Delta Air Lines, Inc. | 10,077 | 502,842 |
Expeditors International of Washington, Inc. | 2,780 | 189,290 |
FedEx Corp. | 3,896 | 628,542 |
J.B. Hunt Transport Services, Inc. | 1,416 | 131,745 |
Kansas City Southern | 1,637 | 156,252 |
Norfolk Southern Corp. | 4,385 | 655,733 |
Southwest Airlines Co. | 8,144 | 378,533 |
Union Pacific Corp. | 11,862 | 1,639,684 |
United Continental Holdings, Inc. * | 3,690 | 308,964 |
United Parcel Service, Inc., Class B | 11,189 | 1,091,263 |
7,002,619 | ||
Utilities 3.3% | ||
Alliant Energy Corp. | 3,798 | 160,465 |
Ameren Corp. | 3,907 | 254,854 |
American Electric Power Co., Inc. | 7,945 | 593,809 |
Security | Number of Shares | Value ($) |
American Water Works Co., Inc. | 2,913 | 264,413 |
CenterPoint Energy, Inc. | 8,077 | 228,014 |
CMS Energy Corp. | 4,544 | 225,610 |
Consolidated Edison, Inc. | 5,025 | 384,211 |
Dominion Energy, Inc. | 10,578 | 755,904 |
DTE Energy Co. | 2,913 | 321,304 |
Duke Energy Corp. | 11,481 | 990,810 |
Edison International | 5,235 | 297,191 |
Entergy Corp. | 2,922 | 251,496 |
Evergy, Inc. | 4,255 | 241,556 |
Eversource Energy | 5,087 | 330,858 |
Exelon Corp. | 15,577 | 702,523 |
FirstEnergy Corp. | 7,818 | 293,566 |
NextEra Energy, Inc. | 7,698 | 1,338,066 |
NiSource, Inc. | 5,822 | 147,588 |
NRG Energy, Inc. | 4,677 | 185,209 |
PG&E Corp. * | 8,371 | 198,811 |
Pinnacle West Capital Corp. | 1,819 | 154,979 |
PPL Corp. | 11,590 | 328,345 |
Public Service Enterprise Group, Inc. | 8,149 | 424,155 |
SCANA Corp. | 2,302 | 109,990 |
Sempra Energy | 4,393 | 475,279 |
The AES Corp. | 10,636 | 153,797 |
The Southern Co. | 16,564 | 727,491 |
WEC Energy Group, Inc. | 5,053 | 349,971 |
Xcel Energy, Inc. | 8,284 | 408,153 |
11,298,418 | ||
Total Common Stock | ||
(Cost $175,157,675) | 338,718,648 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investment0.1% of net assets | ||
Time Deposit 0.1% | ||
Bank of Montreal | ||
1.77%, 01/02/19(b) | 444,892 | 444,892 |
Total Short-Term Investment | ||
(Cost $444,892) | 444,892 |
Number of Contracts | Notional Amount ($) | Current Value/ Unrealized Depreciation ($) | ||
Futures Contracts | ||||
Long | ||||
S&P 500 Index, e-mini, expires 03/15/19 | 8 | 1,002,080 | (27,823) |
* | Non-income producing security. |
(a) | Issuers are affiliated with the fund’s investment adviser. |
(b) | The rate shown is the current daily overnight rate. |
Balance of Shares Held at 12/31/17 | Gross Purchases | Gross Sales | Balance of Shares Held at 12/31/18 | Net Change in Unrealized Appreciation (depreciation) | Realized Gains (Losses) | Dividends Received | |
The Charles Schwab Corp. | 17,599 | 2,196 | (529) | 19,266 | ($191,560) | $864 | $8,458 |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |
Assets | |||||
Common Stock1 | $338,718,648 | $— | $— | $338,718,648 | |
Short-Term Investment1 | — | 444,892 | — | 444,892 | |
Liabilities | |||||
Futures Contracts2 | (27,823) | — | — | (27,823) | |
Total | $338,690,825 | $444,892 | $— | $339,135,717 |
1 | As categorized in Portfolio Holdings. |
2 | Futures contracts are valued at unrealized appreciation or depreciation. |
Assets | ||
Investment in affiliated issuer, at value (cost $361,798) | $800,117 | |
Investments in unaffiliated issuers, at value (cost $175,240,769) | 338,363,423 | |
Deposit with broker for futures contracts | 150,000 | |
Receivables: | ||
Investments sold | 173,307 | |
Fund shares sold | 466,667 | |
Dividends | 392,213 | |
Variation margin on futures contracts | + | 9,284 |
Total assets | 340,355,011 | |
Liabilities | ||
Payables: | ||
Investments bought | 228,982 | |
Investment adviser fees | 8,621 | |
Fund shares redeemed | + | 9,444 |
Total liabilities | 247,047 | |
Net Assets | ||
Total assets | 340,355,011 | |
Total liabilities | – | 247,047 |
Net assets | $340,107,964 | |
Net Assets by Source | ||
Capital received from investors | 168,264,925 | |
Total distributable earnings1 | 171,843,039 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$340,107,964 | 9,166,918 | $37.10 | ||
1 | The SEC eliminated the requirement to disclose total distributable earnings by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 9 for additional information). |
Investment Income | ||
Dividends received from affiliated issuer | $8,458 | |
Dividends received from unaffiliated issuers | 7,438,854 | |
Interest | 14,131 | |
Securities on loan, net | + | 1,627 |
Total investment income | 7,463,070 | |
Expenses | ||
Investment adviser fees | 109,024 | |
Total expenses | – | 109,024 |
Net investment income | 7,354,046 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on affiliated issuer | 864 | |
Net realized gains on unaffiliated issuers | 3,246,403 | |
Net realized losses on futures contracts | + | (182,731) |
Net realized gains | 3,064,536 | |
Net change in unrealized appreciation (depreciation) on affiliated issuer | (191,560) | |
Net change in unrealized appreciation (depreciation) on unaffiliated issuers | (26,360,306) | |
Net change in unrealized appreciation (depreciation) on futures contracts | + | (23,537) |
Net change in unrealized appreciation (depreciation) | + | (26,575,403) |
Net realized and unrealized losses | (23,510,867) | |
Decrease in net assets resulting from operations | ($16,156,821) |
Operations | ||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||
Net investment income | $7,354,046 | $6,143,617 | ||
Net realized gains | 3,064,536 | 713,178 | ||
Net change in unrealized appreciation (depreciation) | + | (26,575,403) | 54,450,860 | |
Increase (decrease) in net assets from operations | (16,156,821) | 61,307,655 | ||
Distributions to Shareholders1 | ||||
Total distributions | ($6,399,171) | ($5,163,452) |
Transactions in Fund Shares | ||||||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||||||
SHARES | VALUE | SHARES | VALUE | |||||
Shares sold | 1,649,011 | $66,928,090 | 1,291,647 | $46,928,355 | ||||
Shares reinvested | 160,622 | 6,399,171 | 145,572 | 5,163,452 | ||||
Shares redeemed | + | (1,387,798) | (56,222,136) | (1,225,137) | (44,350,627) | |||
Net transactions in fund shares | 421,835 | $17,105,125 | 212,082 | $7,741,180 | ||||
Shares Outstanding and Net Assets | ||||||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
Beginning of period | 8,745,083 | $345,558,831 | 8,533,001 | $281,673,448 | ||||
Total increase or decrease | + | 421,835 | (5,450,867) | 212,082 | 63,885,383 | |||
End of period2 | 9,166,918 | $340,107,964 | 8,745,083 | $345,558,831 |
1 | For the period ended December 31, 2017, the fund distributed to shareholders $5,086,309 from net investment income and $77,143 from net realized gains. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 9 for additional information). |
2 | End of period — Net assets include net investment income not yet distributed of $6,269,216 at December 31, 2017. The SEC eliminated the requirement to disclose undistributed net investment income in 2018. |
SCHWAB ANNUITY PORTFOLIOS (ORGANIZED JANUARY 21, 1994) | |
Schwab Government Money Market Portfolio | |
Schwab S&P 500 Index Portfolio | |
Schwab VIT Balanced Portfolio | |
Schwab VIT Balanced with Growth Portfolio | |
Schwab VIT Growth Portfolio |
2. Significant Accounting Policies:
3. Risk Factors:
4. Affiliates and Affiliated Transactions:
5. Board of Trustees:
7. Purchases and Sales/Maturities of Investment Securities:
Purchases of Securities | Sales of Securities |
$40,985,300 | $18,801,560 |
8. Derivatives:
Notional Amounts | Number of Contracts | |
Schwab S&P 500 Index Portfolio | $1,804,320 | 13 |
9. Federal Income Taxes:
Tax cost | $178,238,257 |
Gross unrealized appreciation | $169,775,127 |
Gross unrealized depreciation | (8,877,667) |
Net unrealized appreciation (depreciation) | $160,897,460 |
Undistributed ordinary income | $7,299,651 |
Undistributed long-term capital gains | 3,645,928 |
Net unrealized appreciation (depreciation) on investments | 160,897,460 |
Total | $171,843,039 |
Current period distributions | |
Ordinary income | $6,206,253 |
Long-term capital gains | 192,918 |
Prior period distributions | |
Ordinary income | $5,086,309 |
Long-term capital gains | 77,143 |
10. Subsequent Events:
San Francisco, California
February 19, 2019
Independent Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 99 | None |
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 (Oct. 1979 – present), The Hoover Institution at Stanford University (public policy think tank); Senior Fellow (2000 – present), Stanford Institute for Economic Policy Research; Professor of Public Policy (1994 – 2015), Stanford University. | 99 | Director (2005 – present), Gilead Sciences, Inc. |
Nancy F. Heller 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 2018) | President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services). | 99 | None |
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 (May 2012 – present), Kochis Global (wealth management consulting). | 99 | None |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
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. | 99 | Director (2003 – present), Symantec Corporation Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc. |
Jane P. Moncreiff 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 2019) | Chief Investment Officer (2009-2017), CareGroup Healthcare System, Inc. (healthcare). | 99 | None |
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 (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses). | 99 | Director (2008 – present), KLA-Tencor Corporation |
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 (2008 – present), Patmore Management Consulting (management consulting). | 99 | 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 (Mar. 1990 – present), Smith Graham & Co. (investment advisors). | 99 | Director (2012 – present), Eaton |
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 (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (July 2016 – present), Charles Schwab Investment Management, Inc. | 99 | Director (2008 – present), The Charles Schwab Corporation |
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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). | 99 | 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) | Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 99 | 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 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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). |
Jonathan de St. Paer 1973 President (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018) | President (Oct. 2018 – present), Charles Schwab Investment Management, Inc.; Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – present) and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.; President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs. |
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 (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011 – Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005 – Mar. 2011), Massachusetts Financial Service Investment Management. |
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) and Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Treasurer and Chief Financial Officer (June 2006 – Dec. 2015), Laudus Funds; Treasurer and Principal Financial Officer (Nov. 2004 – Dec. 2015), Schwab Funds; Treasurer and Principal Financial Officer (Oct. 2009 – Dec. 2015), Schwab ETFs; Director (Apr. 2005 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited. |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009 – Apr. 2011), Financial Engines, Inc. (investment management firm); Head of Quantitative Equity (July 2004 – Jan. 2009), ING Investment Management. |
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 (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Fixed Income (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Managing Director, Global Head of Active Fixed-Income Strategies (Jan. 2008 – Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006 – Jan. 2008), Loomis, Sayles & Company (investment management firm). |
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) and Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present) and 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 (Apr. 2011 – present), Laudus Funds; Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
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 |
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 (July 2005 – present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005 – present) and 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 (Oct. 2009 – present), Schwab ETFs. |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, and is a director of CSIM. Ms. Chandoha is an Interested Trustee because she owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
* | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Zifan Tang, Ph.D., CFA, Senior Portfolio Manager, is responsible for the management of the fund. She has served as portfolio manager of the fund since July 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. |
Fund and Inception Date | 1 Year | 5 Years | Since Inception |
Fund: Schwab VIT Balanced Portfolio (07/25/12) | -4.63% | 2.33% | 3.64% |
VIT Balanced Composite Index | -4.14% | 3.03% | 4.34% |
S&P 500® Index | -4.38% | 8.49% | 12.58% |
Bloomberg Barclays US Aggregate Bond Index | 0.01% | 2.52% | 1.68% |
Fund Category: Morningstar Allocation – 30% to 50% Equity2 | -4.27% | 3.11% | N/A |
Fund Expense Ratio3: 0.66% |
1 | Fund expenses may 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. |
2 | 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. |
3 | As stated in the prospectus. Includes 0.11% of acquired fund fees and expenses, which are based on estimated amounts for the current fiscal year and are indirect expenses incurred by the fund through its investments in the underlying funds. 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. |
Number of Holdings | 13 |
Portfolio Turnover Rate | 9% |
1 | 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 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. |
2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
3 | This list is not a recommendation of any security by the investment adviser. |
4 | The holdings listed exclude any temporary liquidity investments. |
Expense Ratio (Annualized)1,2 | Effective Expense Ratio (Annualized)3,4 | Beginning Account Value at 7/1/18 | Ending Account Value (Net of Expenses) at 12/31/182 | Expenses Paid During Period 7/1/18-12/31/182,5 | Effective Expenses Paid During Period 7/1/18-12/31/184,5 | |
Schwab VIT Balanced Portfolio | ||||||
Actual Return | 0.55% | 0.66% | $1,000.00 | $958.60 | $2.72 | $3.26 |
Hypothetical 5% Return | 0.55% | 0.66% | $1,000.00 | $1,022.43 | $2.80 | $3.36 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. |
2 | Excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
3 | Based on the most recent six-month acquired fund fees and expense ratio; may differ from the acquired fund fees and expense ratio in the prospectus, which are based on estimated amounts for the current fiscal year. |
4 | Includes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
5 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by the 365 days of the fiscal year. |
1/1/18– 12/31/18 | 1/1/17– 12/31/17 | 1/1/16– 12/31/16 | 1/1/15– 12/31/15 | 1/1/14– 12/31/14 | ||
Per-Share Data | ||||||
Net asset value at beginning of period | $12.58 | $11.66 | $11.25 | $11.61 | $11.21 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.23 | 0.18 | 0.15 | 0.13 | 0.15 | |
Net realized and unrealized gains (losses) | (0.80) | 0.98 | 0.38 | (0.36) | 0.31 | |
Total from investment operations | (0.57) | 1.16 | 0.53 | (0.23) | 0.46 | |
Less distributions: | ||||||
Distributions from net investment income | (0.17) | (0.15) | (0.12) | (0.12) | (0.06) | |
Distributions from net realized gains | (0.02) | (0.09) | (0.00)2 | (0.01) | (0.00)2 | |
Total distributions | (0.19) | (0.24) | (0.12) | (0.13) | (0.06) | |
Net asset value at end of period | $11.82 | $12.58 | $11.66 | $11.25 | $11.61 | |
Total return | (4.63%) | 10.00% | 4.78% | (2.00%) | 4.15% | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses3 | 0.55% | 0.55% | 0.57% | 0.58% | 0.57% | |
Gross operating expenses3 | 0.55% | 0.55% | 0.57% | 0.65% | 0.70% | |
Net investment income (loss) | 1.87% | 1.50% | 1.28% | 1.15% | 1.29% | |
Portfolio turnover rate | 9% | 9% | 54%4 | 9% | 14% | |
Net assets, end of period (x 1,000,000) | $66 | $64 | $56 | $50 | $44 | |
Security | Number of Shares | Value ($) |
Affiliated Underlying Funds92.8% of net assets | ||
U.S. Stocks 18.9% | ||
Large-Cap 15.0% | ||
Schwab U.S. Large-Cap ETF | 167,784 | 10,016,705 |
Small-Cap 3.9% | ||
Schwab U.S. Small-Cap ETF | 42,520 | 2,580,114 |
12,596,819 | ||
International Stocks 17.8% | ||
Developed-Market Large-Cap 11.0% | ||
Schwab International Equity ETF | 256,556 | 7,273,362 |
Developed-Market Small-Cap 1.9% | ||
Schwab International Small-Cap Equity ETF | 43,589 | 1,268,440 |
Emerging-Market 4.9% | ||
Schwab Emerging Markets Equity ETF | 138,571 | 3,260,576 |
11,802,378 | ||
Real Assets 5.9% | ||
Real Estate 5.9% | ||
Schwab U.S. REIT ETF | 102,371 | 3,942,307 |
Fixed Income 36.5% | ||
Inflation-Protected Bond 2.1% | ||
Schwab U.S. TIPS ETF | 25,926 | 1,380,559 |
Intermediate-Term Bond 34.4% | ||
Schwab U.S. Aggregate Bond ETF | 452,198 | 22,876,697 |
24,257,256 | ||
Money Market Fund 13.7% | ||
Schwab Variable Share Price Money Fund, Ultra Shares 2.45%(a) | 9,084,945 | 9,086,762 |
Total Affiliated Underlying Funds | ||
(Cost $59,253,939) | 61,685,522 |
Security | Number of Shares | Value ($) |
Unaffiliated Underlying Funds5.9% of net assets | ||
U.S. Stock 1.0% | ||
Micro-Cap 1.0% | ||
iShares Micro-Cap ETF | 8,038 | 662,733 |
Real Assets 2.9% | ||
Commodity 2.9% | ||
Credit Suisse Commodity Return Strategy Fund, Class I | 435,250 | 1,910,746 |
Fixed Income 2.0% | ||
International Developed-Market Bond 2.0% | ||
SPDR Bloomberg Barclays International Treasury Bond ETF | 49,736 | 1,373,211 |
Total Unaffiliated Underlying Funds | ||
(Cost $4,412,601) | 3,946,690 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investment0.7% of net assets | ||
Time Deposit 0.7% | ||
BNP Paribas | ||
1.77%, 01/02/19(b) | 475,238 | 475,238 |
Total Short-Term Investment | ||
(Cost $475,238) | 475,238 |
(a) | The rate shown is the 7-day yield. |
(b) | 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 |
Affiliated Underlying Funds | Balance of Shares Held at 12/31/17 | Gross Purchases | Gross Sales | Balance of Shares Held at 12/31/18 | Net Change in Unrealized Appreciation (depreciation) | Realized Gains (Losses) | Distributions Received* |
Schwab Emerging Markets Equity ETF | 120,049 | 32,322 | (13,800) | 138,571 | ($595,876) | $52,158 | $87,715 |
Schwab International Equity ETF | 209,047 | 64,437 | (16,928) | 256,556 | (1,343,586) | 6,204 | 222,639 |
Schwab International Small-Cap Equity ETF | 35,275 | 8,314 | — | 43,589 | (303,608) | — | 31,820 |
Schwab U.S. Aggregate Bond ETF | 420,607 | 73,184 | (41,593) | 452,198 | (549,261) | (84,855) | 636,696 |
Schwab U.S. Large-Cap ETF | 150,311 | 36,192 | (18,719) | 167,784 | (704,619) | 97,544 | 199,128 |
Schwab U.S. REIT ETF | 92,785 | 19,821 | (10,235) | 102,371 | (256,412) | (3,429) | 140,895 |
Schwab U.S. Small-Cap ETF | 37,492 | 6,627 | (1,599) | 42,520 | (365,448) | 25,774 | 37,387 |
Schwab U.S. TIPS ETF | 23,539 | 2,387 | — | 25,926 | (54,269) | — | 34,166 |
Schwab Variable Share Price Money Fund, Ultra Shares | 7,589,228 | 2,465,513 | (969,796) | 9,084,945 | 691 | (88) | 176,488 |
Total | ($4,172,388) | $93,308 | $1,566,934 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |
Assets | |||||
Affiliated Underlying Funds1 | $61,685,522 | $— | $— | $61,685,522 | |
Unaffiliated Underlying Funds1 | 3,946,690 | — | — | 3,946,690 | |
Short-Term Investment1 | — | 475,238 | — | 475,238 | |
Total | $65,632,212 | $475,238 | $— | $66,107,450 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $59,253,939) | $61,685,522 | |
Investments in unaffiliated issuers, at value (cost $4,887,839) | 4,421,928 | |
Receivables: | ||
Investments sold | 660,486 | |
Fund shares sold | 48,010 | |
Dividends | 46,715 | |
Interest | 46 | |
Prepaid expenses | + | 217 |
Total assets | 66,862,924 | |
Liabilities | ||
Payables: | ||
Investments bought | 329,635 | |
Investment adviser and administrator fees | 24,810 | |
Independent trustees’ fees | 41 | |
Fund shares redeemed | 10,016 | |
Accrued expenses | + | 23,295 |
Total liabilities | 387,797 | |
Net Assets | ||
Total assets | 66,862,924 | |
Total liabilities | – | 387,797 |
Net assets | $66,475,127 | |
Net Assets by Source | ||
Capital received from investors | 63,534,706 | |
Total distributable earnings1 | 2,940,421 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$66,475,127 | 5,623,127 | $11.82 | ||
1 | The SEC eliminated the requirement to disclose total distributable earnings by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 8 for additional information). |
Investment Income | ||
Dividends received from affiliated underlying funds | $1,566,934 | |
Dividends received from unaffiliated underlying funds | 40,310 | |
Interest | + | 9,903 |
Total investment income | 1,617,147 | |
Expenses | ||
Investment adviser and administrator fees | 302,009 | |
Professional fees | 29,256 | |
Independent trustees’ fees | 13,890 | |
Shareholder reports | 12,476 | |
Portfolio accounting fees | 5,284 | |
Custodian fees | 1,906 | |
Transfer agent fees | 1,310 | |
Other expenses | + | 2,323 |
Total expenses | – | 368,454 |
Net investment income | 1,248,693 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 93,308 | |
Net realized losses on sales of unaffiliated underlying funds | + | (2,980) |
Net realized gains | 90,328 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | (4,172,388) | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (389,373) |
Net change in unrealized appreciation (depreciation) | + | (4,561,761) |
Net realized and unrealized losses | (4,471,433) | |
Decrease in net assets resulting from operations | ($3,222,740) |
Operations | ||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||
Net investment income | $1,248,693 | $885,937 | ||
Net realized gains | 90,328 | 77,578 | ||
Net change in unrealized appreciation (depreciation) | + | (4,561,761) | 4,652,940 | |
Increase (decrease) in net assets from operations | (3,222,740) | 5,616,455 | ||
Distributions to Shareholders1 | ||||
Total distributions | ($980,751) | ($1,115,442) |
Transactions in Fund Shares | ||||||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||||||
SHARES | VALUE | SHARES | VALUE | |||||
Shares sold | 1,053,283 | $13,090,901 | 888,371 | $10,855,370 | ||||
Shares reinvested | 79,542 | 980,751 | 92,953 | 1,115,442 | ||||
Shares redeemed | + | (634,773) | (7,864,189) | (694,125) | (8,414,857) | |||
Net transactions in fund shares | 498,052 | $6,207,463 | 287,199 | $3,555,955 | ||||
Shares Outstanding and Net Assets | ||||||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
Beginning of period | 5,125,075 | $64,471,155 | 4,837,876 | $56,414,187 | ||||
Total increase | + | 498,052 | 2,003,972 | 287,199 | 8,056,968 | |||
End of period2 | 5,623,127 | $66,475,127 | 5,125,075 | $64,471,155 |
1 | For the period ended December 31, 2017, the fund distributed to shareholders $698,694 from net investment income and $416,748 from net realized gains. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 8 for additional information). |
2 | End of period — Net assets include net investment income not yet distributed of $885,777 at December 31, 2017. The SEC eliminated the requirement to disclose undistributed net investment income in 2018. |
SCHWAB ANNUITY PORTFOLIOS (ORGANIZED JANUARY 21, 1994) | |
Schwab Government Money Market Portfolio | |
Schwab S&P 500 Index Portfolio | |
Schwab VIT Balanced Portfolio | |
Schwab VIT Balanced with Growth Portfolio | |
Schwab VIT Growth Portfolio |
2. Significant Accounting Policies:
3. Risk Factors:
4. Affiliates and Affiliated Transactions:
Schwab Emerging Markets Equity ETF | 0.1% |
Schwab International Equity ETF | 0.0%* |
Schwab International Small-Cap Equity ETF | 0.1% |
Schwab U.S. Aggregate Bond ETF | 0.4% |
Schwab U.S. Large-Cap ETF | 0.1% |
Schwab U.S. REIT ETF | 0.1% |
Schwab U.S. Small-Cap ETF | 0.0%* |
Schwab U.S. TIPS ETF | 0.0%* |
Schwab Variable Share Price Money Fund, Ultra Shares | 0.2% |
* | Less than 0.05% |
6. Borrowing from Banks:
7. Purchases and Sales/Maturities of Investment Securities:
Purchases of Securities | Sales of Securities |
$13,453,126 | $5,904,356 |
8. Federal Income Taxes:
Tax cost | $64,535,124 |
Gross unrealized appreciation | $3,366,427 |
Gross unrealized depreciation | (1,794,101) |
Net unrealized appreciation (depreciation) | $1,572,326 |
Undistributed ordinary income | $1,257,413 |
Undistributed long-term capital gains | 110,682 |
Net unrealized appreciation (depreciation) on investments | 1,572,326 |
Total | $2,940,421 |
Current period distributions | |
Ordinary income | $894,683 |
Long-term capital gains | 86,068 |
Prior period distributions | |
Ordinary income | $738,090 |
Long-term capital gains | 377,352 |
9. Subsequent Events:
San Francisco, California
February 19, 2019
Independent Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 99 | None |
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 (Oct. 1979 – present), The Hoover Institution at Stanford University (public policy think tank); Senior Fellow (2000 – present), Stanford Institute for Economic Policy Research; Professor of Public Policy (1994 – 2015), Stanford University. | 99 | Director (2005 – present), Gilead Sciences, Inc. |
Nancy F. Heller 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 2018) | President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services). | 99 | None |
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 (May 2012 – present), Kochis Global (wealth management consulting). | 99 | None |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
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. | 99 | Director (2003 – present), Symantec Corporation Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc. |
Jane P. Moncreiff 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 2019) | Chief Investment Officer (2009-2017), CareGroup Healthcare System, Inc. (healthcare). | 99 | None |
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 (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses). | 99 | Director (2008 – present), KLA-Tencor Corporation |
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 (2008 – present), Patmore Management Consulting (management consulting). | 99 | 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 (Mar. 1990 – present), Smith Graham & Co. (investment advisors). | 99 | Director (2012 – present), Eaton |
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 (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (July 2016 – present), Charles Schwab Investment Management, Inc. | 99 | Director (2008 – present), The Charles Schwab Corporation |
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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). | 99 | 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) | Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 99 | 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 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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). |
Jonathan de St. Paer 1973 President (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018) | President (Oct. 2018 – present), Charles Schwab Investment Management, Inc.; Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – present) and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.; President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs. |
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 (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011 – Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005 – Mar. 2011), Massachusetts Financial Service Investment Management. |
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) and Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Treasurer and Chief Financial Officer (June 2006 – Dec. 2015), Laudus Funds; Treasurer and Principal Financial Officer (Nov. 2004 – Dec. 2015), Schwab Funds; Treasurer and Principal Financial Officer (Oct. 2009 – Dec. 2015), Schwab ETFs; Director (Apr. 2005 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited. |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009 – Apr. 2011), Financial Engines, Inc. (investment management firm); Head of Quantitative Equity (July 2004 – Jan. 2009), ING Investment Management. |
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 (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Fixed Income (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Managing Director, Global Head of Active Fixed-Income Strategies (Jan. 2008 – Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006 – Jan. 2008), Loomis, Sayles & Company (investment management firm). |
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) and Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present) and 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 (Apr. 2011 – present), Laudus Funds; Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
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 |
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 (July 2005 – present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005 – present) and 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 (Oct. 2009 – present), Schwab ETFs. |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, and is a director of CSIM. Ms. Chandoha is an Interested Trustee because she owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
* | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Zifan Tang, Ph.D., CFA, Senior Portfolio Manager, is responsible for the management of the fund. She has served as portfolio manager of the fund since July 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. |
Fund and Inception Date | 1 Year | 5 Years | Since Inception |
Fund: Schwab VIT Balanced with Growth Portfolio (07/25/12) | -6.70% | 2.77% | 4.89% |
VIT Balanced with Growth Composite Index | -6.15% | 3.44% | 5.65% |
S&P 500® Index | -4.38% | 8.49% | 12.58% |
Bloomberg Barclays US Aggregate Bond Index | 0.01% | 2.52% | 1.68% |
Fund Category: Morningstar Allocation – 50% to 70% Equity2 | -5.30% | 3.95% | N/A |
Fund Expense Ratio3: 0.61% |
1 | Fund expenses may 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. |
2 | 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. |
3 | As stated in the prospectus. Includes 0.10% of acquired fund fees and expenses, which are based on estimated amounts for the current fiscal year and are indirect expenses incurred by the fund through its investments in the underlying funds. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the Financial Highlights section of the financial statements. |
Number of Holdings | 14 |
Portfolio Turnover Rate | 8% |
1 | 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 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. |
2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
3 | This list is not a recommendation of any security by the investment adviser. |
4 | The holdings listed exclude any temporary liquidity investments. |
Expense Ratio (Annualized)1,2 | Effective Expense Ratio (Annualized)3,4 | Beginning Account Value at 7/1/18 | Ending Account Value (Net of Expenses) at 12/31/182 | Expenses Paid During Period 7/1/18-12/31/182,5 | Effective Expenses Paid During Period 7/1/18-12/31/184,5 | |
Schwab VIT Balanced with Growth Portfolio | ||||||
Actual Return | 0.50% | 0.60% | $1,000.00 | $936.40 | $2.44 | $2.93 |
Hypothetical 5% Return | 0.50% | 0.60% | $1,000.00 | $1,022.68 | $2.55 | $3.06 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. |
2 | Excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
3 | Based on the most recent six-month acquired fund fees and expense ratio; may differ from the acquired fund fees and expenses ratios in the prospectus, which are based on estimated amounts for the current fiscal year. |
4 | Includes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
5 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by the 365 days of the fiscal year. |
1/1/18– 12/31/18 | 1/1/17– 12/31/17 | 1/1/16– 12/31/16 | 1/1/15– 12/31/15 | 1/1/14– 12/31/14 | ||
Per-Share Data | ||||||
Net asset value at beginning of period | $13.80 | $12.38 | $11.80 | $12.26 | $11.86 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.25 | 0.22 | 0.19 | 0.17 | 0.19 | |
Net realized and unrealized gains (losses) | (1.16) | 1.46 | 0.56 | (0.47) | 0.30 | |
Total from investment operations | (0.91) | 1.68 | 0.75 | (0.30) | 0.49 | |
Less distributions: | ||||||
Distributions from net investment income | (0.21) | (0.18) | (0.16) | (0.15) | (0.09) | |
Distributions from net realized gains | (0.02) | (0.08) | (0.01) | (0.01) | (0.00)2 | |
Total distributions | (0.23) | (0.26) | (0.17) | (0.16) | (0.09) | |
Net asset value at end of period | $12.66 | $13.80 | $12.38 | $11.80 | $12.26 | |
Total return | (6.70%) | 13.70% | 6.38% | (2.47%) | 4.15% | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses3 | 0.50% | 0.51% | 0.51% | 0.53% | 0.55% | |
Gross operating expenses3 | 0.50% | 0.51% | 0.51% | 0.55% | 0.57% | |
Net investment income (loss) | 1.87% | 1.65% | 1.55% | 1.41% | 1.53% | |
Portfolio turnover rate | 8% | 6% | 33%4 | 7% | 8% | |
Net assets, end of period (x 1,000,000) | $140 | $150 | $133 | $116 | $99 | |
Security | Number of Shares | Value ($) |
Affiliated Underlying Funds93.3% of net assets | ||
U.S. Stocks 27.8% | ||
Large-Cap 21.9% | ||
Schwab U.S. Large-Cap ETF | 512,113 | 30,573,146 |
Small-Cap 5.9% | ||
Schwab U.S. Small-Cap ETF | 136,283 | 8,269,653 |
38,842,799 | ||
International Stocks 25.9% | ||
Developed-Market Large-Cap 17.0% | ||
Schwab International Equity ETF | 837,614 | 23,746,357 |
Developed-Market Small-Cap 2.8% | ||
Schwab International Small-Cap Equity ETF | 133,922 | 3,897,130 |
Emerging-Market 6.1% | ||
Schwab Emerging Markets Equity ETF | 362,875 | 8,538,449 |
36,181,936 | ||
Real Assets 6.0% | ||
Real Estate 6.0% | ||
Schwab U.S. REIT ETF | 216,209 | 8,326,209 |
Fixed Income 29.6% | ||
Inflation-Protected Bond 2.2% | ||
Schwab U.S. TIPS ETF | 56,516 | 3,009,477 |
Intermediate-Term Bond 27.4% | ||
Schwab U.S. Aggregate Bond ETF | 756,250 | 38,258,687 |
41,268,164 | ||
Money Market Fund 4.0% | ||
Schwab Variable Share Price Money Fund, Ultra Shares 2.45%(a) | 5,639,649 | 5,640,776 |
Total Affiliated Underlying Funds | ||
(Cost $121,232,825) | 130,259,884 | |
Unaffiliated Underlying Funds5.8% of net assets | ||
U.S. Stock 1.0% | ||
Micro-Cap 1.0% | ||
iShares Micro-Cap ETF | 15,995 | 1,318,788 |
Security | Number of Shares | Value ($) |
Real Assets 3.8% | ||
Commodity 3.8% | ||
Credit Suisse Commodity Return Strategy Fund, Class I | 1,220,244 | 5,356,870 |
Fixed Income 1.0% | ||
International Developed-Market Bond 1.0% | ||
SPDR Bloomberg Barclays International Treasury Bond ETF | 49,471 | 1,365,894 |
Total Unaffiliated Underlying Funds | ||
(Cost $9,895,607) | 8,041,552 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments1.0% of net assets | ||
Time Deposits 1.0% | ||
Australia & New Zealand Banking Group Ltd. | ||
1.77%, 01/02/19(b) | 52,040 | 52,040 |
BNP Paribas | ||
1.77%, 01/02/19(b) | 1,391,242 | 1,391,242 |
Total Short-Term Investments | ||
(Cost $1,443,282) | 1,443,282 |
(a) | The rate shown is the 7-day yield. |
(b) | 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 |
Affiliated Underlying Funds | Balance of Shares Held at 12/31/17 | Gross Purchases | Gross Sales | Balance of Shares Held at 12/31/18 | Net Change in Unrealized Appreciation (depreciation) | Realized Gains (Losses) | Distributions Received* |
Schwab Emerging Markets Equity ETF | 328,150 | 44,582 | (9,857) | 362,875 | ($1,546,178) | $51,371 | $229,700 |
Schwab International Equity ETF | 761,091 | 104,681 | (28,158) | 837,614 | (4,576,296) | 34,407 | 726,881 |
Schwab International Small-Cap Equity ETF | 121,830 | 12,092 | — | 133,922 | (967,853) | — | 97,763 |
Schwab U.S. Aggregate Bond ETF | 775,775 | 65,248 | (84,773) | 756,250 | (956,858) | (217,230) | 1,134,697 |
Schwab U.S. Large-Cap ETF | 522,539 | 39,492 | (49,918) | 512,113 | (2,596,882) | 765,900 | 649,194 |
Schwab U.S. REIT ETF | 208,862 | 30,378 | (23,031) | 216,209 | (587,027) | 18,280 | 314,726 |
Schwab U.S. Small-Cap ETF | 131,945 | 14,529 | (10,191) | 136,283 | (1,293,017) | 177,784 | 124,340 |
Schwab U.S. TIPS ETF | 50,552 | 5,964 | — | 56,516 | (117,584) | — | 75,493 |
Schwab Variable Share Price Money Fund, Ultra Shares | 4,330,348 | 2,309,101 | (999,800) | 5,639,649 | 308 | (100) | 110,061 |
Total | ($12,641,387) | $830,412 | $3,462,855 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |
Assets | |||||
Affiliated Underlying Funds1 | $130,259,884 | $— | $— | $130,259,884 | |
Unaffiliated Underlying Funds1 | 8,041,552 | — | — | 8,041,552 | |
Short-Term Investments1 | — | 1,443,282 | — | 1,443,282 | |
Total | $138,301,436 | $1,443,282 | $— | $139,744,718 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $121,232,825) | $130,259,884 | |
Investments in unaffiliated issuers, at value (cost $11,338,889) | 9,484,834 | |
Receivables: | ||
Investments sold | 1,301,825 | |
Dividends | 70,862 | |
Fund shares sold | 1,378 | |
Interest | 140 | |
Prepaid expenses | + | 482 |
Total assets | 141,119,405 | |
Liabilities | ||
Payables: | ||
Investments bought | 1,464,291 | |
Investment adviser and administrator fees | 52,529 | |
Independent trustees’ fees | 56 | |
Fund shares redeemed | 27,164 | |
Accrued expenses | + | 24,060 |
Total liabilities | 1,568,100 | |
Net Assets | ||
Total assets | 141,119,405 | |
Total liabilities | – | 1,568,100 |
Net assets | $139,551,305 | |
Net Assets by Source | ||
Capital received from investors | 129,304,266 | |
Total distributable earnings1 | 10,247,039 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$139,551,305 | 11,020,505 | $12.66 | ||
1 | The SEC eliminated the requirement to disclose total distributable earnings by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 8 for additional information). |
Investment Income | ||
Dividends received from affiliated underlying funds | $3,462,855 | |
Dividends received from unaffiliated underlying funds | 86,842 | |
Interest | + | 19,373 |
Total investment income | 3,569,070 | |
Expenses | ||
Investment adviser and administrator fees | 677,283 | |
Professional fees | 33,599 | |
Independent trustees’ fees | 19,588 | |
Shareholder reports | 11,394 | |
Portfolio accounting fees | 6,325 | |
Custodian fees | 3,142 | |
Transfer agent fees | 2,183 | |
Other expenses | + | 1,754 |
Total expenses | – | 755,268 |
Net investment income | 2,813,802 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 830,412 | |
Net realized gains on sales of unaffiliated underlying funds | + | 72 |
Net realized gains | 830,484 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | (12,641,387) | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (1,009,449) |
Net change in unrealized appreciation (depreciation) | + | (13,650,836) |
Net realized and unrealized losses | (12,820,352) | |
Decrease in net assets resulting from operations | ($10,006,550) |
Operations | ||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||
Net investment income | $2,813,802 | $2,307,028 | ||
Net realized gains | 830,484 | 142,683 | ||
Net change in unrealized appreciation (depreciation) | + | (13,650,836) | 15,417,209 | |
Increase (decrease) in net assets from operations | (10,006,550) | 17,866,920 | ||
Distributions to Shareholders1 | ||||
Total distributions | ($2,514,896) | ($2,722,902) |
Transactions in Fund Shares | ||||||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||||||
SHARES | VALUE | SHARES | VALUE | |||||
Shares sold | 980,329 | $13,386,440 | 1,008,516 | $13,272,372 | ||||
Shares reinvested | 186,013 | 2,514,896 | 210,426 | 2,722,902 | ||||
Shares redeemed | + | (1,034,231) | (14,051,066) | (1,076,056) | (13,935,461) | |||
Net transactions in fund shares | 132,111 | $1,850,270 | 142,886 | $2,059,813 | ||||
Shares Outstanding and Net Assets | ||||||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
Beginning of period | 10,888,394 | $150,222,481 | 10,745,508 | $133,018,650 | ||||
Total increase or decrease | + | 132,111 | (10,671,176) | 142,886 | 17,203,831 | |||
End of period2 | 11,020,505 | $139,551,305 | 10,888,394 | $150,222,481 |
1 | For the period ended December 31, 2017, the fund distributed to shareholders $1,921,305 from net investment income and $801,597 from net realized gains. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 8 for additional information). |
2 | End of period — Net assets include net investment income not yet distributed of $2,306,503 at December 31, 2017. The SEC eliminated the requirement to disclose undistributed net investment income in 2018. |
SCHWAB ANNUITY PORTFOLIOS (ORGANIZED JANUARY 21, 1994) | |
Schwab Government Money Market Portfolio | |
Schwab S&P 500 Index Portfolio | |
Schwab VIT Balanced Portfolio | |
Schwab VIT Balanced with Growth Portfolio | |
Schwab VIT Growth Portfolio |
2. Significant Accounting Policies:
3. Risk Factors:
4. Affiliates and Affiliated Transactions:
Schwab Emerging Markets Equity ETF | 0.2% |
Schwab International Equity ETF | 0.2% |
Schwab International Small-Cap Equity ETF | 0.2% |
Schwab U.S. Aggregate Bond ETF | 0.7% |
Schwab U.S. Large-Cap ETF | 0.2% |
Schwab U.S. REIT ETF | 0.2% |
Schwab U.S. Small-Cap ETF | 0.1% |
Schwab U.S. TIPS ETF | 0.1% |
Schwab Variable Share Price Money Fund, Ultra Shares | 0.1% |
6. Borrowing from Banks:
7. Purchases and Sales/Maturities of Investment Securities:
Purchases of Securities | Sales of Securities |
$15,653,115 | $11,661,563 |
8. Federal Income Taxes:
Tax cost | $133,154,194 |
Gross unrealized appreciation | $11,370,890 |
Gross unrealized depreciation | (4,780,366) |
Net unrealized appreciation (depreciation) | $6,590,524 |
Undistributed ordinary income | $2,816,926 |
Undistributed long-term capital gains | 839,589 |
Net unrealized appreciation (depreciation) on investments | 6,590,524 |
Total | $10,247,039 |
Current period distributions | |
Ordinary income | $2,353,951 |
Long-term capital gains | 160,945 |
Prior period distributions | |
Ordinary income | $1,961,332 |
Long-term capital gains | 761,570 |
9. Subsequent Events:
San Francisco, California
February 19, 2019
Independent Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 99 | None |
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 (Oct. 1979 – present), The Hoover Institution at Stanford University (public policy think tank); Senior Fellow (2000 – present), Stanford Institute for Economic Policy Research; Professor of Public Policy (1994 – 2015), Stanford University. | 99 | Director (2005 – present), Gilead Sciences, Inc. |
Nancy F. Heller 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 2018) | President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services). | 99 | None |
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 (May 2012 – present), Kochis Global (wealth management consulting). | 99 | None |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
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. | 99 | Director (2003 – present), Symantec Corporation Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc. |
Jane P. Moncreiff 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 2019) | Chief Investment Officer (2009-2017), CareGroup Healthcare System, Inc. (healthcare). | 99 | None |
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 (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses). | 99 | Director (2008 – present), KLA-Tencor Corporation |
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 (2008 – present), Patmore Management Consulting (management consulting). | 99 | 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 (Mar. 1990 – present), Smith Graham & Co. (investment advisors). | 99 | Director (2012 – present), Eaton |
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 (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (July 2016 – present), Charles Schwab Investment Management, Inc. | 99 | Director (2008 – present), The Charles Schwab Corporation |
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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). | 99 | 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) | Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 99 | 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 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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). |
Jonathan de St. Paer 1973 President (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018) | President (Oct. 2018 – present), Charles Schwab Investment Management, Inc.; Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – present) and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.; President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs. |
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 (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011 – Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005 – Mar. 2011), Massachusetts Financial Service Investment Management. |
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) and Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Treasurer and Chief Financial Officer (June 2006 – Dec. 2015), Laudus Funds; Treasurer and Principal Financial Officer (Nov. 2004 – Dec. 2015), Schwab Funds; Treasurer and Principal Financial Officer (Oct. 2009 – Dec. 2015), Schwab ETFs; Director (Apr. 2005 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited. |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009 – Apr. 2011), Financial Engines, Inc. (investment management firm); Head of Quantitative Equity (July 2004 – Jan. 2009), ING Investment Management. |
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 (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Fixed Income (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Managing Director, Global Head of Active Fixed-Income Strategies (Jan. 2008 – Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006 – Jan. 2008), Loomis, Sayles & Company (investment management firm). |
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) and Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present) and 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 (Apr. 2011 – present), Laudus Funds; Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
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 |
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 (July 2005 – present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005 – present) and 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 (Oct. 2009 – present), Schwab ETFs. |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, and is a director of CSIM. Ms. Chandoha is an Interested Trustee because she owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
* | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Zifan Tang, Ph.D., CFA, Senior Portfolio Manager, is responsible for the management of the fund. She has served as portfolio manager of the fund since July 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. |
Fund and Inception Date | 1 Year | 5 Years | Since Inception |
Fund: Schwab VIT Growth Portfolio (07/25/12) | -8.35% | 3.14% | 6.25% |
VIT Growth Composite Index | -7.94% | 3.79% | 6.92% |
S&P 500® Index | -4.38% | 8.49% | 12.58% |
Bloomberg Barclays US Aggregate Bond Index | 0.01% | 2.52% | 1.68% |
Fund Category: Morningstar Allocation – 70% to 85% Equity2 | -7.01% | 4.04% | N/A |
Fund Expense Ratio3: 0.60% |
1 | Fund expenses may 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. |
2 | 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. |
3 | As stated in the prospectus. Includes 0.10% of acquired fund fees and expenses, which are based on estimated amounts for the current fiscal year and are indirect expenses incurred by the fund through its investments in the underlying funds. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the Financial Highlights section of the financial statements. |
Number of Holdings | 13 |
Portfolio Turnover Rate | 9% |
1 | 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 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. |
2 | The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets. |
3 | This list is not a recommendation of any security by the investment adviser. |
4 | The holdings listed exclude any temporary liquidity investments. |
Expense Ratio (Annualized)1,2 | Effective Expense Ratio (Annualized)3,4 | Beginning Account Value at 7/1/18 | Ending Account Value (Net of Expenses) at 12/31/182 | Expenses Paid During Period 7/1/18-12/31/182,5 | Effective Expenses Paid During Period 7/1/18-12/31/184,5 | |
Schwab VIT Growth Portfolio | ||||||
Actual Return | 0.51% | 0.61% | $1,000.00 | $917.30 | $2.46 | $2.95 |
Hypothetical 5% Return | 0.51% | 0.61% | $1,000.00 | $1,022.63 | $2.60 | $3.11 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. |
2 | Excludes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
3 | Based on the most recent six-month acquired fund fees and expense ratio; may differ from the acquired fund fees and expense ratio in the prospectus, which are based on estimated amounts for the current fiscal year. |
4 | Includes acquired fund fees and expenses, which are indirect expenses incurred by the fund through its investments in underlying funds. |
5 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by the 365 days of the fiscal year. |
1/1/18– 12/31/18 | 1/1/17– 12/31/17 | 1/1/16– 12/31/16 | 1/1/15– 12/31/15 | 1/1/14– 12/31/14 | ||
Per-Share Data | ||||||
Net asset value at beginning of period | $15.28 | $13.26 | $12.50 | $13.05 | $12.65 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.27 | 0.23 | 0.20 | 0.19 | 0.20 | |
Net realized and unrealized gains (losses) | (1.53) | 2.02 | 0.75 | (0.55) | 0.30 | |
Total from investment operations | (1.26) | 2.25 | 0.95 | (0.36) | 0.50 | |
Less distributions: | ||||||
Distributions from net investment income | (0.22) | (0.19) | (0.17) | (0.17) | (0.10) | |
Distributions from net realized gains | (0.05) | (0.04) | (0.02) | (0.02) | (0.00)2 | |
Total distributions | (0.27) | (0.23) | (0.19) | (0.19) | (0.10) | |
Net asset value at end of period | $13.75 | $15.28 | $13.26 | $12.50 | $13.05 | |
Total return | (8.35%) | 17.14% | 7.67% | (2.85%) | 3.97% | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses3 | 0.50% | 0.50% | 0.51% | 0.52% | 0.54% | |
Gross operating expenses3 | 0.50% | 0.50% | 0.51% | 0.54% | 0.56% | |
Net investment income (loss) | 1.78% | 1.61% | 1.54% | 1.42% | 1.56% | |
Portfolio turnover rate | 9% | 6% | 21%4 | 7% | 9% | |
Net assets, end of period (x 1,000,000) | $140 | $150 | $131 | $121 | $107 | |
Security | Number of Shares | Value ($) |
Affiliated Underlying Funds92.7% of net assets | ||
U.S. Stocks 35.7% | ||
Large-Cap 28.8% | ||
Schwab U.S. Large-Cap ETF | 675,853 | 40,348,424 |
Small-Cap 6.9% | ||
Schwab U.S. Small-Cap ETF | 158,457 | 9,615,171 |
49,963,595 | ||
International Stocks 34.0% | ||
Developed-Market Large-Cap 21.0% | ||
Schwab International Equity ETF | 1,034,476 | 29,327,395 |
Developed-Market Small-Cap 4.9% | ||
Schwab International Small-Cap Equity ETF | 236,213 | 6,873,798 |
Emerging-Market 8.1% | ||
Schwab Emerging Markets Equity ETF | 481,287 | 11,324,683 |
47,525,876 | ||
Real Assets 5.9% | ||
Real Estate 5.9% | ||
Schwab U.S. REIT ETF | 213,607 | 8,226,006 |
Fixed Income 13.5% | ||
Inflation-Protected Bond 1.1% | ||
Schwab U.S. TIPS ETF | 28,508 | 1,518,051 |
Intermediate-Term Bond 12.4% | ||
Schwab U.S. Aggregate Bond ETF | 343,577 | 17,381,560 |
18,899,611 | ||
Money Market Fund 3.6% | ||
Schwab Variable Share Price Money Fund, Ultra Shares 2.45%(a) | 5,040,838 | 5,041,846 |
Total Affiliated Underlying Funds | ||
(Cost $116,886,753) | 129,656,934 |
Security | Number of Shares | Value ($) |
Unaffiliated Underlying Funds5.9% of net assets | ||
U.S. Stock 2.0% | ||
Micro-Cap 2.0% | ||
iShares Micro-Cap ETF | 34,678 | 2,859,201 |
Real Assets 3.9% | ||
Commodity 3.9% | ||
Credit Suisse Commodity Return Strategy Fund, Class I | 1,243,272 | 5,457,962 |
Total Unaffiliated Underlying Funds | ||
(Cost $9,758,248) | 8,317,163 | |
Issuer Rate, Maturity Date | Face Amount ($) | Value ($) |
Short-Term Investments1.4% of net assets | ||
Time Deposits 1.4% | ||
Bank of Montreal | ||
1.77%, 01/02/19(b) | 1,393,238 | 1,393,238 |
Citibank | ||
1.77%, 01/02/19(b) | 511,918 | 511,918 |
Total Short-Term Investments | ||
(Cost $1,905,156) | 1,905,156 |
(a) | The rate shown is the 7-day yield. |
(b) | The rate shown is the current daily overnight rate. |
ETF — | Exchange-traded fund |
REIT — | Real Estate Investment Trust |
TIPS — | Treasury Inflation Protected Securities |
Affiliated Underlying Funds | Balance of Shares Held at 12/31/17 | Gross Purchases | Gross Sales | Balance of Shares Held at 12/31/18 | Net Change in Unrealized Appreciation (depreciation) | Realized Gains (Losses) | Distributions Received* |
Schwab Emerging Markets Equity ETF | 435,414 | 66,235 | (20,362) | 481,287 | ($2,025,819) | $23,835 | $304,655 |
Schwab International Equity ETF | 932,149 | 158,886 | (56,559) | 1,034,476 | (5,636,189) | (23,653) | 897,718 |
Schwab International Small-Cap Equity ETF | 203,025 | 33,188 | — | 236,213 | (1,655,450) | — | 172,436 |
Schwab U.S. Aggregate Bond ETF | 345,878 | 39,486 | (41,787) | 343,577 | (435,410) | (91,199) | 511,084 |
Schwab U.S. Large-Cap ETF | 685,860 | 56,784 | (66,791) | 675,853 | (3,286,013) | 804,358 | 862,209 |
Schwab U.S. REIT ETF | 204,659 | 42,611 | (33,663) | 213,607 | (577,040) | (1,495) | 316,975 |
Schwab U.S. Small-Cap ETF | 150,257 | 23,602 | (15,402) | 158,457 | (1,465,812) | 190,982 | 146,418 |
Schwab U.S. TIPS ETF | 25,769 | 2,739 | — | 28,508 | (59,347) | — | 38,241 |
Schwab Variable Share Price Money Fund, Ultra Shares | 4,130,332 | 2,910,106 | (1,999,600) | 5,040,838 | 328 | (200) | 111,285 |
Total | ($15,140,752) | $902,628 | $3,361,021 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |
Assets | |||||
Affiliated Underlying Funds1 | $129,656,934 | $— | $— | $129,656,934 | |
Unaffiliated Underlying Funds1 | 8,317,163 | — | — | 8,317,163 | |
Short-Term Investments1 | — | 1,905,156 | — | 1,905,156 | |
Total | $137,974,097 | $1,905,156 | $— | $139,879,253 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $116,886,753) | $129,656,934 | |
Investments in unaffiliated issuers, at value (cost $11,663,404) | 10,222,319 | |
Receivables: | ||
Investments sold | 701,014 | |
Dividends | 86,872 | |
Interest | 185 | |
Prepaid expenses | + | 498 |
Total assets | 140,667,822 | |
Liabilities | ||
Payables: | ||
Investments bought | 720,617 | |
Investment adviser and administrator fees | 52,436 | |
Independent trustees’ fees | 57 | |
Fund shares redeemed | 26,750 | |
Accrued expenses | + | 24,195 |
Total liabilities | 824,055 | |
Net Assets | ||
Total assets | 140,667,822 | |
Total liabilities | – | 824,055 |
Net assets | $139,843,767 | |
Net Assets by Source | ||
Capital received from investors | 125,943,718 | |
Total distributable earnings1 | 13,900,049 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$139,843,767 | 10,173,528 | $13.75 | ||
1 | The SEC eliminated the requirement to disclose total distributable earnings by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 8 for additional information). |
Investment Income | ||
Dividends received from affiliated underlying funds | $3,361,021 | |
Dividends received from unaffiliated underlying funds | 86,933 | |
Interest | + | 19,650 |
Total investment income | 3,467,604 | |
Expenses | ||
Investment adviser and administrator fees | 683,835 | |
Professional fees | 33,664 | |
Independent trustees’ fees | 19,659 | |
Shareholder reports | 12,477 | |
Portfolio accounting fees | 6,333 | |
Custodian fees | 3,601 | |
Transfer agent fees | 2,011 | |
Other expenses | + | 1,945 |
Total expenses | – | 763,525 |
Net investment income | 2,704,079 | |
Realized and Unrealized Gains (Losses) | ||
Net realized gains on sales of affiliated underlying funds | 902,628 | |
Net realized losses on sales of unaffiliated underlying funds | + | (113,026) |
Net realized gains | 789,602 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | (15,140,752) | |
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (1,063,775) |
Net change in unrealized appreciation (depreciation) | + | (16,204,527) |
Net realized and unrealized losses | (15,414,925) | |
Decrease in net assets resulting from operations | ($12,710,846) |
Operations | ||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||
Net investment income | $2,704,079 | $2,279,776 | ||
Net realized gains | 789,602 | 537,136 | ||
Net change in unrealized appreciation (depreciation) | + | (16,204,527) | 19,517,099 | |
Increase (decrease) in net assets from operations | (12,710,846) | 22,334,011 | ||
Distributions to Shareholders1 | ||||
Total distributions | ($2,807,920) | ($2,313,134) |
Transactions in Fund Shares | ||||||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||||||
SHARES | VALUE | SHARES | VALUE | |||||
Shares sold | 1,301,268 | $19,642,228 | 717,261 | $10,163,698 | ||||
Shares reinvested | 187,320 | 2,807,920 | 164,052 | 2,313,134 | ||||
Shares redeemed | + | (1,136,972) | (17,178,171) | (939,498) | (13,440,040) | |||
Net transactions in fund shares | 351,616 | $5,271,977 | (58,185) | ($963,208) | ||||
Shares Outstanding and Net Assets | ||||||||
1/1/18-12/31/18 | 1/1/17-12/31/17 | |||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
Beginning of period | 9,821,912 | $150,090,556 | 9,880,097 | $131,032,887 | ||||
Total increase or decrease | + | 351,616 | (10,246,789) | (58,185) | 19,057,669 | |||
End of period2 | 10,173,528 | $139,843,767 | 9,821,912 | $150,090,556 |
1 | For the period ended December 31, 2017, the fund distributed to shareholders $1,910,073 from net investment income and $403,061 from net realized gains. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 8 for additional information). |
2 | End of period — Net assets include net investment income not yet distributed of $2,279,108 at December 31, 2017. The SEC eliminated the requirement to disclose undistributed net investment income in 2018. |
SCHWAB ANNUITY PORTFOLIOS (ORGANIZED JANUARY 21, 1994) | |
Schwab Government Money Market Portfolio | |
Schwab S&P 500 Index Portfolio | |
Schwab VIT Balanced Portfolio | |
Schwab VIT Balanced with Growth Portfolio | |
Schwab VIT Growth Portfolio |
2. Significant Accounting Policies:
3. Risk Factors:
4. Affiliates and Affiliated Transactions:
Schwab Emerging Markets Equity ETF | 0.2% |
Schwab International Equity ETF | 0.2% |
Schwab International Small-Cap Equity ETF | 0.3% |
Schwab U.S. Aggregate Bond ETF | 0.3% |
Schwab U.S. Large-Cap ETF | 0.3% |
Schwab U.S. REIT ETF | 0.2% |
Schwab U.S. Small-Cap ETF | 0.1% |
Schwab U.S. TIPS ETF | 0.0%* |
Schwab Variable Share Price Money Fund, Ultra Shares | 0.1% |
* | Less than 0.05%. |
6. Borrowing from Banks:
7. Purchases and Sales/Maturities of Investment Securities:
Purchases of Securities | Sales of Securities |
$20,778,670 | $14,015,200 |
8. Federal Income Taxes:
Tax cost | $129,487,864 |
Gross unrealized appreciation | $14,627,337 |
Gross unrealized depreciation | (4,235,948) |
Net unrealized appreciation (depreciation) | $10,391,389 |
Undistributed ordinary income | $2,715,370 |
Undistributed long-term capital gains | 793,290 |
Net unrealized appreciation (depreciation) on investments | 10,391,389 |
Total | $13,900,049 |
Current period distributions | |
Ordinary income | $2,310,134 |
Long-term capital gains | 497,786 |
Prior period distributions | |
Ordinary income | $1,910,073 |
Long-term capital gains | 403,061 |
9. Subsequent Events:
San Francisco, California
February 19, 2019
Independent Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds. | 99 | None |
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 (Oct. 1979 – present), The Hoover Institution at Stanford University (public policy think tank); Senior Fellow (2000 – present), Stanford Institute for Economic Policy Research; Professor of Public Policy (1994 – 2015), Stanford University. | 99 | Director (2005 – present), Gilead Sciences, Inc. |
Nancy F. Heller 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 2018) | President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services). | 99 | None |
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 (May 2012 – present), Kochis Global (wealth management consulting). | 99 | None |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
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. | 99 | Director (2003 – present), Symantec Corporation Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc. |
Jane P. Moncreiff 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 2019) | Chief Investment Officer (2009-2017), CareGroup Healthcare System, Inc. (healthcare). | 99 | None |
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 (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses). | 99 | Director (2008 – present), KLA-Tencor Corporation |
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 (2008 – present), Patmore Management Consulting (management consulting). | 99 | 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 (Mar. 1990 – present), Smith Graham & Co. (investment advisors). | 99 | Director (2012 – present), Eaton |
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 (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (July 2016 – present), Charles Schwab Investment Management, Inc. | 99 | Director (2008 – present), The Charles Schwab Corporation |
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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). | 99 | 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) | Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 99 | 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 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 and Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), Chief Executive Officer (Dec. 2010 – present), President (Dec. 2010 – Oct. 2018), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Feb. 2011 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Global Head of Fixed Income Business Division (Mar. 2007 – Aug. 2010), BlackRock, Inc. (formerly Barclays Global Investors) (investment management firm). |
Jonathan de St. Paer 1973 President (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018) | President (Oct. 2018 – present), Charles Schwab Investment Management, Inc.; Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – present) and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.; President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs. |
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 (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011 – Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005 – Mar. 2011), Massachusetts Financial Service Investment Management. |
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) and Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Treasurer and Chief Financial Officer (June 2006 – Dec. 2015), Laudus Funds; Treasurer and Principal Financial Officer (Nov. 2004 – Dec. 2015), Schwab Funds; Treasurer and Principal Financial Officer (Oct. 2009 – Dec. 2015), Schwab ETFs; Director (Apr. 2005 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited. |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009 – Apr. 2011), Financial Engines, Inc. (investment management firm); Head of Quantitative Equity (July 2004 – Jan. 2009), ING Investment Management. |
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 (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Fixed Income (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Managing Director, Global Head of Active Fixed-Income Strategies (Jan. 2008 – Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006 – Jan. 2008), Loomis, Sayles & Company (investment management firm). |
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) and Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present) and 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 (Apr. 2011 – present), Laudus Funds; Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
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 |
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 (July 2005 – present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005 – present) and 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 (Oct. 2009 – present), Schwab ETFs. |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, and is a director of CSIM. Ms. Chandoha is an Interested Trustee because she owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
Item 2: | Code of Ethics. |
(a) | Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, and any other persons who perform a similar function, regardless of whether these individuals are employed by Registrant or a third party. |
(c) | During the period covered by the report, no amendments were made to the provisions of this code of ethics. |
(d) | During the period covered by the report, Registrant did not grant any waivers, including implicit waivers, from the provisions of this code of ethics. |
(f)(1) | Registrant has filed this code of ethics as an exhibit pursuant to Item 12(a)(1) of FormN-CSR. |
Item 3: | Audit Committee Financial Expert. |
Registrant’s Board of Trustees has determined that Kiran M. Patel and Kimberly S. Patmore, each currently serving on its audit, compliance and valuation committee, are each an “audit committee financial expert,” as such term is defined in Item 3 of FormN-CSR. Each member of Registrant’s audit, compliance and valuation committee is “independent” under the standards set forth in Item 3 of FormN-CSR.
The designation of each of Mr. Patel and Ms. Patmore as an “audit committee financial expert” pursuant to Item 3 of FormN-CSR does not (i) impose upon such individual any duties, obligations, or liability that are greater than the duties, obligations and liability imposed upon such individual as a member of Registrant’s audit, compliance and valuation committee or Board of Trustees in the absence of such designation; and (ii) affect the duties, obligations or liability of any other member of Registrant’s audit, compliance and valuation committee or Board of Trustees.
Item 4: | Principal Accountant Fees and Services. |
(a) Below are the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
The following table presents fees billed by the principal accountant in each of the last two fiscal years for the services rendered to the Funds:
(a) Audit Fees | (b) Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees3 | |||||||||||||||||||||||||||
Fiscal Year 2018 | Fiscal Year 2017 | Fiscal Year 2018 | Fiscal Year 2017 | Fiscal Year 2018 | Fiscal Year 2017 | Fiscal Year 2018 | Fiscal Year 2017 | |||||||||||||||||||||||
$ | 129,398 | $ | 150,743 | $ | 12,120 | $ | 12,000 | $ | 14,771 | $ | 14,626 | $ | 0 | $ | 0 |
1 | The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees. |
2 | The nature of the services includes tax compliance, tax advice and tax planning. |
3 | The nature of the services include agreed upon procedures relating to Charles Schwab Investment Management., Inc.’s, (“CSIM”) expenses for purposes of Section 15(c) of the Investment Company Act of 1940. |
(e) (1) | Registrant’s audit, compliance and valuation committee does not havepre-approval policies and procedures as described in paragraph (c)(7) of Rule2-01 of RegulationS-X. |
(2) There were no services described in each of paragraphs (b) through (d) above (including services required to be approved by Registrant’s audit, compliance and valuation committee pursuant to paragraph (c)(7)(ii) of Rule2-01 of RegulationS-X) that were approved by Registrant’s audit, compliance and valuation committee pursuant to paragraph (c)(7)(i)(C) of Rule2-01 of RegulationS-X.
(f) Not applicable.
(g)Below are the aggregatenon-audit fees billed in each of the last two fiscal years by Registrant’s principal accountant for services rendered to Registrant, to Registrant’s investment adviser, and to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant.
2018: $26,891 | 2017: $ | 26,626 |
(h)During the past fiscal year, allnon-audit services provided by Registrant’s principal accountant to either Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant werepre-approved. Included in the audit, compliance and valuation committee’spre-approval was the review and consideration as to whether the provision of thesenon-audit services is compatible with maintaining the principal accountant’s independence.
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 forClosed-End Management Investment Companies. |
Not applicable.
Item 8: | Portfolio Managers ofClosed-End Management Investment Companies. |
Not applicable.
Item 9: | Purchases of Equity Securities byClosed-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) | Registrant’s code of ethics (that is the subject of the disclosure required by Item 2(a)) is attached. | |
(2) | Separate certifications for Registrant’s principal executive officer and principal financial officer, as requiredby 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 Rule30a-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 FormN-CSR 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: | 2/19/19 |
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: | 2/19/19 |
By: | /s/ Mark Fischer | |
Mark Fischer Chief Financial Officer | ||
Date: | 2/19/19 |