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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 6/26/20 Schwab Strategic Trust 485BPOS 6/26/20 5:2.8M Donnelley … Solutions/FA → Schwab Fundamental Emerging Markets Large Co. Index ETF ⇒ FNDE → Schwab Fundamental International Large Co. Index ETF ⇒ FNDF → Schwab Fundamental International Small Co. Index ETF ⇒ FNDC → Schwab Fundamental U.S. Broad Market Index ETF ⇒ FNDB → Schwab Fundamental U.S. Large Co. Index ETF ⇒ FNDX → Schwab Fundamental U.S. Small Co. Index ETF ⇒ FNDA → Schwab U.S. REIT ETF ⇒ SCHH |
Document/Exhibit Description Pages Size 1: 485BPOS Post-Effective Amendment of a Form N-1 or N-1A HTML 1.41M Registration 2: EX-99.(I) Miscellaneous Exhibit HTML 8K 3: EX-99.(J)(1) Miscellaneous Exhibit HTML 5K 4: EX-99.(J)(15) Miscellaneous Exhibit HTML 7K 5: EX-99.(P)(1) Miscellaneous Exhibit HTML 69K
485BPOS |
Post-Effective Amendment No. 124 | ☒ |
Amendment No. 126 | ☒ |
Douglas
P. Dick, Esq. Dechert LLP 1900 K Street, N.W. Washington, DC 20006 |
John M.
Loder, Esq. Ropes & Gray LLP 800 Boylston Street Boston, MA 02199-3600 |
Schwab ® Fundamental U.S. Broad Market Index ETF | FNDB |
Schwab ® Fundamental U.S. Large Company Index ETF | FNDX |
Schwab ® Fundamental U.S. Small Company Index ETF | FNDA |
Schwab ® Fundamental International Large Company Index ETF | FNDF |
Schwab ® Fundamental International Small Company Index ETF | FNDC |
Schwab ® Fundamental Emerging Markets Large Company Index ETF | FNDE |
• | If you invest through Charles Schwab & Co, Inc. (broker-dealer), by calling 1-866-345-5954 and using the unique identifier attached to this mailing; or |
• | If you invest through another financial intermediary (such as a bank or broker-dealer) by contacting them directly. |
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC. |
Fund Summaries | |
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Ticker Symbol: | FNDB |
Shareholder Fees (fees paid directly from your investment) | |
None | |
Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) | |
Management fees | 0.25 |
Other expenses | None |
Total annual fund operating expenses | 0.25 |
Expenses on a $10,000 Investment | |||
1 Year | 3 Years | 5 Years | 10 Years |
$26 | $80 | $141 | $318 |
Average Annual Total Returns as of 12/31/19 | |||
1 Year | 5 Years | Since
Inception (8/15/13) | |
Before taxes | 28.54% | 9.44% | 10.91% |
After taxes on distributions | 27.81% | 8.87% | 10.37% |
After taxes on distributions and sale of shares | 17.34% | 7.37% | 8.69% |
Comparative Index (reflects no deduction for expenses or taxes) | |||
Russell RAFI US Index | 28.84% | 9.72% | 11.22% |
Ticker Symbol: | FNDX |
Shareholder Fees (fees paid directly from your investment) | |
None | |
Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) | |
Management fees | 0.25 |
Other expenses | None |
Total annual fund operating expenses | 0.25 |
Expenses on a $10,000 Investment | |||
1 Year | 3 Years | 5 Years | 10 Years |
$26 | $80 | $141 | $318 |
Average Annual Total Returns as of 12/31/19 | |||
1 Year | 5 Years | Since
Inception (8/15/13) | |
Before taxes | 28.87% | 9.59% | 11.05% |
After taxes on distributions | 28.14% | 9.03% | 10.52% |
After taxes on distributions and sale of shares | 17.54% | 7.49% | 8.80% |
Comparative Index (reflects no deduction for expenses or taxes) | |||
Russell RAFI US Large Company Index | 29.17% | 9.87% | 11.36% |
Ticker Symbol: | FNDA |
Shareholder Fees (fees paid directly from your investment) | |
None | |
Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) | |
Management fees | 0.25 |
Other expenses | None |
Total annual fund operating expenses | 0.25 |
Expenses on a $10,000 Investment | |||
1 Year | 3 Years | 5 Years | 10 Years |
$26 | $80 | $141 | $318 |
Average Annual Total Returns as of 12/31/19 | |||
1 Year | 5 Years | Since
Inception (8/15/13) | |
Before taxes | 24.45% | 7.68% | 9.25% |
After taxes on distributions | 23.95% | 7.26% | 8.85% |
After taxes on distributions and sale of shares | 14.67% | 5.92% | 7.29% |
Comparative Index (reflects no deduction for expenses or taxes) | |||
Russell RAFI US Small Company Index | 24.76% | 7.91% | 9.53% |
Ticker Symbol: | FNDF |
Shareholder Fees (fees paid directly from your investment) | |
None | |
Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) | |
Management fees | 0.25 |
Other expenses | None |
Total annual fund operating expenses | 0.25 |
Expenses on a $10,000 Investment | |||
1 Year | 3 Years | 5 Years | 10 Years |
$26 | $80 | $141 | $318 |
Average Annual Total Returns as of 12/31/19 | |||
1 Year | 5 Years | Since
Inception (8/15/13) | |
Before taxes | 18.41% | 5.15% | 4.75% |
After taxes on distributions | 17.76% | 4.66% | 4.31% |
After taxes on distributions and sale of shares | 11.76% | 4.12% | 3.82% |
Comparative Index (reflects no deduction for expenses or taxes) | |||
Russell RAFI Developed ex US Large Company Index (Net)1 | 18.35% | 5.22% | 4.89% |
1 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Ticker Symbol: | FNDC |
Shareholder Fees (fees paid directly from your investment) | |
None | |
Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) | |
Management fees | 0.39 |
Other expenses | None |
Total annual fund operating expenses | 0.39 |
Expenses on a $10,000 Investment | |||
1 Year | 3 Years | 5 Years | 10 Years |
$40 | $125 | $219 | $493 |
Average Annual Total Returns as of 12/31/19 | |||
1 Year | 5 Years | Since
Inception (8/15/13) | |
Before taxes | 20.02% | 7.56% | 6.56% |
After taxes on distributions | 19.34% | 7.10% | 6.12% |
After taxes on distributions and sale of shares | 12.48% | 5.97% | 5.19% |
Comparative Index (reflects no deduction for expenses or taxes) | |||
Russell RAFI Developed ex US Small Company Index (Net)1 | 20.27% | 7.85% | 6.96% |
1 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Ticker Symbol: | FNDE |
Shareholder Fees (fees paid directly from your investment) | |
None | |
Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) | |
Management fees | 0.39 |
Other expenses | None |
Total annual fund operating expenses | 0.39 |
Expenses on a $10,000 Investment | |||
1 Year | 3 Years | 5 Years | 10 Years |
$40 | $125 | $219 | $493 |
Average Annual Total Returns as of 12/31/19 | |||
1 Year | 5 Years | Since
Inception (8/15/13) | |
Before taxes | 19.10% | 7.68% | 4.99% |
After taxes on distributions | 18.34% | 7.25% | 4.60% |
After taxes on distributions and sale of shares | 12.20% | 6.15% | 3.98% |
Comparative Index (reflects no deduction for expenses or taxes) | |||
Russell RAFI Emerging Markets Large Company Index (Net)1 | 19.68% | 8.30% | 5.60% |
1 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Schwab Fundamental U.S. Broad Market Index ETF | FNDB |
Schwab Fundamental U.S. Large Company Index ETF | FNDX |
Schwab Fundamental U.S. Small Company Index ETF | FNDA |
Schwab Fundamental International Large Company Index ETF | FNDF |
Schwab Fundamental International Small Company Index ETF | FNDC |
Schwab Fundamental Emerging Markets Large Company Index ETF | FNDE |
3/1/19–
2/29/20 |
3/1/18–
2/28/19 |
3/1/17–
2/28/18 |
3/1/16–
2/28/17 |
3/1/15–
2/29/16 |
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Per-Share Data | ||||||
Net asset value at beginning of period | $ 37.60 | $ 36.95 | $ 33.82 | $ 27.37 | $ 30.54 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.94 | 0.84 | 0.75 | 0.67 | 0.65 | |
Net realized and unrealized gains (losses) | (0.43) | 0.62 | 3.09 | 6.45 | (3.18) | |
Total from investment operations | 0.51 | 1.46 | 3.84 | 7.12 | (2.53) | |
Less distributions: | ||||||
Distributions from net investment income | (0.94) | (0.81) | (0.71) | (0.67) | (0.64) | |
Net asset value at end of period | $ 37.17 | $ 37.60 | $ 36.95 | $ 33.82 | $ 27.37 | |
Total return | 1.25% | 3.98% | 11.51% | 26.32% | (8.34%) | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Total expenses | 0.25% | 0.25% | 0.25% | 0.32% | 0.32% | |
Net investment income (loss) | 2.38% | 2.26% | 2.14% | 2.17% | 2.23% | |
Portfolio turnover rate2 | 13% | 11% | 10% | 10% | 12% | |
Net assets, end of period (x 1,000) | $262,018 | $276,382 | $260,469 | $263,785 | $166,985 |
3/1/19–
2/29/20 |
3/1/18–
2/28/19 |
3/1/17–
2/28/18 |
3/1/16–
2/28/17 |
3/1/15–
2/29/16 |
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Per-Share Data | ||||||
Net asset value at beginning of period | $ 37.83 | $ 37.20 | $ 33.91 | $ 27.57 | $ 30.55 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.99 | 0.87 | 0.78 | 0.70 | 0.69 | |
Net realized and unrealized gains (losses) | (0.20) | 0.57 | 3.21 | 6.29 | (3.10) | |
Total from investment operations | 0.79 | 1.44 | 3.99 | 6.99 | (2.41) | |
Less distributions: | ||||||
Distributions from net investment income | (0.95) | (0.81) | (0.70) | (0.65) | (0.57) | |
Net asset value at end of period | $ 37.67 | $ 37.83 | $ 37.20 | $ 33.91 | $ 27.57 | |
Total return | 1.98% | 3.92% | 11.91% | 25.66% | (7.92%) | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Total expenses | 0.25% | 0.25% | 0.25% | 0.32% | 0.32% | |
Net investment income (loss) | 2.47% | 2.33% | 2.22% | 2.26% | 2.39% | |
Portfolio turnover rate2 | 12% | 11% | 9% | 10% | 11% | |
Net assets, end of period (x 1,000) | $5,557,983 | $4,596,260 | $4,016,040 | $2,197,623 | $893,389 |
3/1/19–
2/29/20 |
3/1/18–
2/28/19 |
3/1/17–
2/28/18 |
3/1/16–
2/28/17 |
3/1/15–
2/29/16 |
||
Per-Share Data | ||||||
Net asset value at beginning of period | $ 38.08 | $ 36.90 | $ 34.89 | $ 26.47 | $ 30.68 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.55 | 0.59 | 0.52 | 0.45 | 0.41 | |
Net realized and unrealized gains (losses) | (3.34) | 1.14 | 1.98 | 8.37 | (4.25) | |
Total from investment operations | (2.79) | 1.73 | 2.50 | 8.82 | (3.84) | |
Less distributions: | ||||||
Distributions from net investment income | (0.56) | (0.55) | (0.49) | (0.40) | (0.37) | |
Net asset value at end of period | $ 34.73 | $ 38.08 | $ 36.90 | $ 34.89 | $ 26.47 | |
Total return | (7.46%) | 4.69% | 7.22% | 33.56% | (12.60%) | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Total expenses | 0.25% | 0.25% | 0.25% | 0.32% | 0.32% | |
Net investment income (loss) | 1.43% | 1.53% | 1.45% | 1.43% | 1.43% | |
Portfolio turnover rate2 | 26% | 23% | 21% | 23% | 23% | |
Net assets, end of period (x 1,000) | $3,424,710 | $3,402,783 | $2,782,002 | $1,568,402 | $608,865 |
3/1/19–
2/29/20 |
3/1/18–
2/28/19 |
3/1/17–
2/28/18 |
3/1/16–
2/28/17 |
3/1/15–
2/29/16 |
||
Per-Share Data | ||||||
Net asset value at beginning of period | $ 27.54 | $ 30.28 | $ 26.00 | $ 22.08 | $ 27.17 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.91 | 0.94 | 0.80 | 0.74 | 0.70 | |
Net realized and unrealized gains (losses) | (2.29) | (2.81) | 4.19 | 3.79 | (5.30) | |
Total from investment operations | (1.38) | (1.87) | 4.99 | 4.53 | (4.60) | |
Less distributions: | ||||||
Distributions from net investment income | (0.92) | (0.87) | (0.71) | (0.61) | (0.49) | |
Net asset value at end of period | $ 25.24 | $ 27.54 | $ 30.28 | $ 26.00 | $ 22.08 | |
Total return | (5.32%) | (6.00%) | 19.19% | 20.62% | (17.02%) | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Total expenses | 0.25% | 0.25% | 0.25% | 0.32% | 0.32% | |
Net investment income (loss) | 3.27% | 3.29% | 2.76% | 2.98% | 2.80% | |
Portfolio turnover rate2 | 20% | 14% | 10% | 11% | 12% | |
Net assets, end of period (x 1,000) | $4,416,696 | $4,083,580 | $3,630,569 | $1,928,861 | $885,348 |
3/1/19–
2/29/20 |
3/1/18–
2/28/19 |
3/1/17–
2/28/18 |
3/1/16–
2/28/17 |
3/1/15–
2/29/16 |
||
Per-Share Data | ||||||
Net asset value at beginning of period | $ 31.23 | $ 36.02 | $ 29.99 | $ 24.81 | $ 27.22 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 0.80 | 0.79 | 0.62 | 0.55 | 0.43 | |
Net realized and unrealized gains (losses) | (2.60) | (4.82) | 6.11 | 5.18 | (2.49) | |
Total from investment operations | (1.80) | (4.03) | 6.73 | 5.73 | (2.06) | |
Less distributions: | ||||||
Distributions from net investment income | (0.90) | (0.76) | (0.70) | (0.55) | (0.35) | |
Net asset value at end of period | $ 28.53 | $ 31.23 | $ 36.02 | $ 29.99 | $ 24.81 | |
Total return | (6.06%) | (11.06%) | 22.47% | 23.26% | (7.64%) | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Total expenses | 0.39% | 0.39% | 0.39% | 0.46% | 0.46% | |
Net investment income (loss) | 2.54% | 2.38% | 1.83% | 1.94% | 1.65% | |
Portfolio turnover rate2 | 31% | 25% | 18% | 25% | 22% | |
Net assets, end of period (x 1,000) | $1,900,303 | $1,842,568 | $1,811,898 | $866,749 | $379,667 |
3/1/19–
2/29/20 |
3/1/18–
2/28/19 |
3/1/17–
2/28/18 |
3/1/16–
2/28/17 |
3/1/15–
2/29/16 |
||
Per-Share Data | ||||||
Net asset value at beginning of period | $ 28.08 | $ 31.22 | $ 26.06 | $ 17.78 | $ 24.16 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 1.02 | 0.85 | 0.71 | 0.49 | 0.57 | |
Net realized and unrealized gains (losses) | (2.53) | (3.20) | 5.06 | 8.18 | (6.58) | |
Total from investment operations | (1.51) | (2.35) | 5.77 | 8.67 | (6.01) | |
Less distributions: | ||||||
Distributions from net investment income | (1.03) | (0.79) | (0.61) | (0.39) | (0.37) | |
Net asset value at end of period | $ 25.54 | $ 28.08 | $ 31.22 | $ 26.06 | $ 17.78 | |
Total return | (5.74%) | (7.36%) | 22.32% | 49.03% | (24.92%) | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Total expenses | 0.39% | 0.39% | 0.39% | 0.46% | 0.46% | |
Net investment income (loss) | 3.61% | 2.99% | 2.48% | 2.14% | 2.80% | |
Portfolio turnover rate2 | 32% | 33% | 14% | 14% | 20% | |
Net assets, end of period (x 1,000) | $2,574,297 | $2,341,576 | $2,200,763 | $1,011,273 | $359,092 |
Schwab Fundamental U.S. Broad Market Index ETF | FNDB |
Schwab Fundamental U.S. Large Company Index ETF | FNDX |
Schwab Fundamental U.S. Small Company Index ETF | FNDA |
Schwab Fundamental International Large Company Index ETF | FNDF |
Schwab Fundamental International Small Company Index ETF | FNDC |
Schwab Fundamental Emerging Markets Large Company Index ETF | FNDE |
Fund | Approximate
Value of One Creation Unit |
Standard
Creation/Redemption Transaction Fee |
Maximum
Additional Creation Transaction Fee* |
Maximum
Additional Redemption Transaction Fee* |
Schwab Fundamental U.S. Broad Market Index ETF | $1,801,820 | $ 1,000 | 3.0% | 2.0% |
Schwab Fundamental U.S. Large Company Index ETF | $1,837,815 | $ 500 | 3.0% | 2.0% |
Schwab Fundamental U.S. Small Company Index ETF | $1,560,750 | $ 500 | 3.0% | 2.0% |
Schwab Fundamental International Large Company Index ETF | $2,312,450 | $10,000 | 3.0% | 2.0% |
Schwab Fundamental International Small Company Index ETF | $2,737,930 | $10,000 | 3.0% | 2.0% |
Schwab Fundamental Emerging Markets Large Company Index ETF | $2,254,700 | $ 2,000 | 3.0% | 2.0% |
* | As a percentage of total amount invested or redeemed. |
Schwab Strategic Trust | 811-22311 |
• | If you invest through Charles Schwab & Co, Inc. (broker-dealer), by calling 1-866-345-5954 and using the unique identifier attached to this mailing; or |
• | If you invest through another financial intermediary (such as a bank or broker-dealer) by contacting them directly. |
Ticker Symbol: | SCHH |
Shareholder Fees (fees paid directly from your investment) | |
None | |
Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) | |
Management fees | 0.07 |
Other expenses | None |
Total annual fund operating expenses | 0.07 |
Expenses on a $10,000 Investment | |||
1 Year | 3 Years | 5 Years | 10 Years |
$7 | $23 | $40 | $90 |
Average Annual Total Returns as of 12/31/19 | |||
1 Year | 5 Years | Since
Inception (1/13/11) | |
Before taxes | 23.01% | 6.29% | 9.82% |
After taxes on distributions | 21.80% | 5.10% | 8.66% |
After taxes on distributions and sale of shares | 13.83% | 4.34% | 7.40% |
Comparative Indices (reflect no deduction for expenses or taxes) | |||
Dow Jones Equity All REIT Capped Index1 | - | - | - |
Dow Jones U.S. Select REIT Index | 23.10% | 6.40% | 9.94% |
1 | Effective upon the commencement of operations on June 22, 2020, the fund changed its primary comparative index from the Dow Jones U.S. Select REIT Index to the Dow Jones Equity All REIT Capped Index (index) in connection with a change to the fund’s investment objective and investment strategies to invest its assets in accordance with the index. The index has not been in operation for a full calendar year, and therefore has no performance data to present. |
Schwab U.S. REIT ETF | SCHH |
3/1/19–
2/29/20 |
3/1/18–
2/28/19 |
3/1/17–
2/28/18 |
3/1/16–
2/28/17 |
3/1/15–
2/29/16 |
||
Per-Share Data | ||||||
Net asset value at beginning of period | $ 43.29 | $ 37.08 | $ 42.08 | $ 37.71 | $ 40.04 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss)1 | 1.32 | 1.29 | 1.20 | 1.04 | 1.03 | |
Net realized and unrealized gains (losses) | (1.00) | 6.33 | (5.28) | 4.48 | (2.38) | |
Total from investment operations | 0.32 | 7.62 | (4.08) | 5.52 | (1.35) | |
Less distributions: | ||||||
Distributions from net investment income | (1.32) | (1.41) | (0.92) | (1.15) | (0.98) | |
Net asset value at end of period | $ 42.29 | $ 43.29 | $ 37.08 | $ 42.08 | $ 37.71 | |
Total return | 0.59% | 20.85% | (9.91%) | 14.74% | (3.41%) | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Total expenses | 0.07% | 0.07% | 0.07% | 0.07% | 0.07% | |
Net investment income (loss) | 2.88% | 3.17% | 2.93% | 2.50% | 2.70% | |
Portfolio turnover rate2 | 6% | 7% | 8% | 14% | 12% | |
Net assets, end of period (x 1,000) | $5,717,395 | $5,127,268 | $3,691,377 | $3,037,968 | $1,823,208 |
Schwab U.S. REIT ETF | SCHH |
Fund | Approximate
Value of One Creation Unit |
Standard
Creation/Redemption Transaction Fee |
Maximum
Additional Creation Transaction Fee* |
Maximum
Additional Redemption Transaction Fee* |
Schwab U.S. REIT ETF | $1,755,945 | $250 | 3.0% | 2.0% |
* | As a percentage of total amount invested or redeemed. |
Schwab Strategic Trust | 811-22311 |
Schwab ® Fundamental U.S. Broad Market Index ETF | FNDB |
Schwab ® Fundamental U.S. Large Company Index ETF | FNDX |
Schwab ® Fundamental U.S. Small Company Index ETF | FNDA |
Schwab ® Fundamental International Large Company Index ETF | FNDF |
Schwab ® Fundamental International Small Company Index ETF | FNDC |
Schwab ® Fundamental Emerging Markets Large Company Index ETF | FNDE |
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Appendix – non-u.s. market Holiday schedules | |
appendix – proxy voting policy |
(1) | Purchase securities of an issuer, except as consistent with the maintenance of its status as an open-end diversified company under the 1940 Act, the rules or regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
(2) | Concentrate investments in a particular industry or group of industries, as concentration is defined under the 1940 Act, the rules or regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time, except that each fund will concentrate to approximately the same extent that its benchmark index concentrates in the securities of such particular industry or group of industries. |
(3) | Purchase or sell commodities, commodities contracts or real estate, lend or borrow money, issue senior securities, underwrite securities issued by others, or pledge, mortgage or hypothecate any of its assets, except as permitted by (or not prohibited by) the 1940 Act or the rules or regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
(1) | Sell securities short unless it owns the security or the right to obtain the security or equivalent securities, or unless it covers such short sale as required by current SEC rules and interpretations (transactions in futures contracts, options and other derivative instruments are not considered selling securities short). |
(2) | Purchase securities on margin, except such short term credits as may be necessary for the clearance of purchases and sales of securities and provided that margin deposits in connection with futures contracts, options on futures or other derivative instruments shall not constitute purchasing securities on margin. |
(3) | Borrow money except that each fund may (i) borrow money from banks or through an interfund lending facility, if any, and engage in reverse repurchase agreements with any party provided that such borrowings and reverse repurchase agreements in combination do not exceed 33 1/3% of its total assets, including the amount borrowed (but not including temporary or emergency borrowings not exceeding 5%); and (ii) may borrow an additional amount up to 5% of its assets for temporary or emergency purposes. |
(4) | Lend any security or make any other loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties (this restriction does not apply to purchases of debt securities or repurchase agreements). |
(5) | Purchase securities (other than securities issued or guaranteed by the U.S. government, its agencies or instrumentalities) if, as a result of such purchase, 25% or more of the value of its total assets would be invested in any industry or group of industries. |
(6) | Purchase or sell commodities, commodity contracts or real estate, including interests in real estate limited partnerships, provided that the fund may (i) purchase securities of companies that deal in real estate or interests therein (including REITs); (ii) purchase securities of companies that deal in precious metals or interests therein; and (iii) purchase, sell and enter into futures contracts (including futures contracts on indices of securities, interest rates and currencies), options on futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts or other derivative instruments. |
Name,
Year of Birth, and Position(s) with the Trust (Term 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 During the Past Five Years |
INDEPENDENT TRUSTEES | |||
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 |
Name,
Year of Birth, and Position(s) with the Trust (Term 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 During the Past Five Years |
INDEPENDENT TRUSTEES | |||
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) |
Retired. 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 |
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
(2004-present), Corcept Therapeutics Incorporated Director (2009-present), Adamas Pharmaceuticals, Inc. Director (2003-2019), Symantec Corporation |
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) |
Consultant (2018-present), Fulham Advisers LLC (management consulting); 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 Corporation plc |
Name,
Year of Birth, and Position(s) with the Trust (Term 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 During the Past Five Years |
INTERESTED TRUSTEES | |||
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, SSB; Director (Nov. 2017-present), Charles Schwab Premier Bank, SSB; Director (July 2019-present), Charles Schwab Trust 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 |
Jonathan
de St. Paer2 1973 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) |
Director (Apr. 2019-present), President (Oct. 2018-present), and Chief Executive Officer (Apr. 2019-Nov. 2019), Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019-present) and President (Nov. 2018-present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019-present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019-present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014-Mar. 2019), and Vice President (Jan. 2009-Dec. 2013), Charles Schwab & Co., Inc. | 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, SSB; Director (Nov. 2017-present), Charles Schwab Premier Bank, SSB; 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 |
Name,
Year of Birth, and Position(s) with the Trust (Term of Office and Length of Time Served3) |
Principal Occupations During the Past Five Years |
OFFICERS | |
Jonathan
de St. Paer 1973 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018) |
Director (Apr. 2019-present), President (Oct. 2018-present), and Chief Executive Officer (Apr. 2019-Nov. 2019), Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019-present) and President (Nov. 2018-present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019-present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019-present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014-Mar. 2019), and Vice President (Jan. 2009-Dec. 2013), Charles Schwab & Co., Inc. |
Name,
Year of Birth, and Position(s) with the Trust (Term of Office and Length of Time Served3) |
Principal Occupations During the Past Five Years |
OFFICERS | |
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; Chief Financial Officer (Mar. 2020-present) and 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. |
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 (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 (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 and 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. |
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, Mr. de St. Paer and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of CSC, the parent company of CSIM, the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc., the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust, and is a director of CSIM. Mr. de St. Paer is an Interested Trustee because he 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 Schwab. |
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 Audit, Compliance and Valuation Committee reviews the integrity of the Trust’s financial reporting processes and compliance policies, procedures and processes, and the Trust’s overall system of internal controls. The Audit, Compliance and Valuation Committee also reviews and evaluates the qualifications, independence and performance of the Trust’s independent auditors, and the implementation and operation of the Trust’s valuation policy and procedures. This Committee is comprised of at least three independent trustees and currently has the following members: Kiran M. Patel (Chair), John F. Cogan, Nancy F. Heller and Kimberly S. Patmore. The Committee met four times during the most recent fiscal year. |
• | The Governance Committee reviews and makes recommendations to the Board regarding Trust governance-related matters, including but not limited to Board compensation practices, retirement policies and term limits, Board self-evaluations, the effectiveness and allocation of assignments and functions by the Board, the composition of Committees of the Board, and the training of trustees. The Governance Committee is responsible for selecting and nominating candidates to serve as trustees. The Governance Committee does not have a written policy with respect to consideration of candidates for trustee submitted by shareholders. However, if the Governance Committee determined that it would be in the best interests of the Trust to fill a vacancy on the Board, and a shareholder submitted a candidate for consideration by the Board to fill the vacancy, the Governance Committee would evaluate that candidate in the same manner as it evaluates nominees identified by the Governance Committee. Nominee recommendations may be submitted to the Secretary of the Trust at the Trust’s principal business address. This Committee is comprised of at least three independent trustees and currently has the following members: John F. Cogan (Chair), Stephen Timothy Kochis, David L. Mahoney and Kimberly S. Patmore. The Committee met four times during the most recent fiscal year. |
• | The Investment Oversight Committee reviews the investment activities of the Trust and the performance of the funds’ investment adviser. This Committee is comprised of at least three trustees (at least two-thirds of whom shall be independent trustees) and currently has the following members: Gerald B. Smith (Chair), Robert W. Burns, Stephen Timothy Kochis, David L. Mahoney and Jane P. Moncreiff. The Committee met five times during the most recent fiscal year. |
Name of Trustee | Aggregate
Compensation from the Funds in this SAI |
Pension
or Retirement Benefits Accrued as Part of Fund Expenses |
Total
Compensation from the Funds and Fund Complex Paid to Trustees |
Interested Trustees | |||
Walter W. Bettinger II | None | N/A | None |
Marie A. Chandoha1 | None | N/A | None |
Jonathan de St. Paer2 | None | N/A | None |
Joseph R. Martinetto | None | N/A | None |
Independent Trustees | |||
Robert W. Burns | $17,433 | N/A | $312,500 |
John F. Cogan | $18,549 | N/A | $332,500 |
Nancy F. Heller | $17,433 | N/A | $312,500 |
Stephen Timothy Kochis | $17,433 | N/A | $312,500 |
David L. Mahoney | $17,433 | N/A | $312,500 |
Jane P. Moncreiff | $17,433 | N/A | $312,500 |
Kiran M. Patel | $18,549 | N/A | $332,500 |
Kimberly S. Patmore | $17,433 | N/A | $312,500 |
Gerald B. Smith | $18,549 | N/A | $332,500 |
1 | Ms. Chandoha retired from the Board effective March 31, 2019. |
2 | Mr. de St. Paer joined the Board effective April 1, 2019. |
Name of Trustee | Dollar Range of Trustee Ownership of the Funds Included in the SAI | Aggregate
Dollar Range of Trustee Ownership in the Family of Investment Companies | |
Interested Trustees | |||
Walter W. Bettinger II | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | $10,001-$50,000 | ||
Schwab Fundamental U.S. Small Company Index ETF | Over $100,000 | ||
Schwab Fundamental International Large Company Index ETF | $10,001-$50,000 | ||
Schwab Fundamental International Small Company Index ETF | $1-$10,000 | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | Over $100,000 | ||
Jonathan de St. Paer1 | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | None | ||
Schwab Fundamental U.S. Small Company Index ETF | None | ||
Schwab Fundamental International Large Company Index ETF | None | ||
Schwab Fundamental International Small Company Index ETF | None | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | None | ||
Joseph R. Martinetto | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | $1-$10,000 | ||
Schwab Fundamental U.S. Small Company Index ETF | $1-$10,000 | ||
Schwab Fundamental International Large Company Index ETF | $1-$10,000 | ||
Schwab Fundamental International Small Company Index ETF | $1-$10,000 | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | $1-$10,000 | ||
Independent Trustees | |||
Robert W. Burns | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | Over $100,000 | ||
Schwab Fundamental U.S. Small Company Index ETF | Over $100,000 | ||
Schwab Fundamental International Large Company Index ETF | Over $100,000 | ||
Schwab Fundamental International Small Company Index ETF | Over $100,000 | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | Over $100,000 | ||
John F. Cogan | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | None | ||
Schwab Fundamental U.S. Small Company Index ETF | None | ||
Schwab Fundamental International Large Company Index ETF | None | ||
Schwab Fundamental International Small Company Index ETF | None | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | None |
Name of Trustee | Dollar Range of Trustee Ownership of the Funds Included in the SAI | Aggregate
Dollar Range of Trustee Ownership in the Family of Investment Companies | |
Independent Trustees | |||
Nancy F. Heller | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | $10,001-$50,000 | ||
Schwab Fundamental U.S. Large Company Index ETF | None | ||
Schwab Fundamental U.S. Small Company Index ETF | None | ||
Schwab Fundamental International Large Company Index ETF | None | ||
Schwab Fundamental International Small Company Index ETF | None | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | None | ||
Stephen Timothy Kochis | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | None | ||
Schwab Fundamental U.S. Small Company Index ETF | None | ||
Schwab Fundamental International Large Company Index ETF | None | ||
Schwab Fundamental International Small Company Index ETF | None | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | Over $100,000 | ||
David L. Mahoney | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | None | ||
Schwab Fundamental U.S. Small Company Index ETF | None | ||
Schwab Fundamental International Large Company Index ETF | None | ||
Schwab Fundamental International Small Company Index ETF | None | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | None | ||
Jane P. Moncreiff | None | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | None | ||
Schwab Fundamental U.S. Small Company Index ETF | None | ||
Schwab Fundamental International Large Company Index ETF | None | ||
Schwab Fundamental International Small Company Index ETF | None | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | None | ||
Kiran M. Patel | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | None | ||
Schwab Fundamental U.S. Small Company Index ETF | None | ||
Schwab Fundamental International Large Company Index ETF | None | ||
Schwab Fundamental International Small Company Index ETF | None | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | None | ||
Kimberly S. Patmore | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | Over $100,000 | ||
Schwab Fundamental U.S. Small Company Index ETF | None | ||
Schwab Fundamental International Large Company Index ETF | None | ||
Schwab Fundamental International Small Company Index ETF | $10,001-$50,000 | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | None |
Name of Trustee | Dollar Range of Trustee Ownership of the Funds Included in the SAI | Aggregate
Dollar Range of Trustee Ownership in the Family of Investment Companies | |
Independent Trustees | |||
Gerald B. Smith | Over $100,000 | ||
Schwab Fundamental U.S. Broad Market Index ETF | None | ||
Schwab Fundamental U.S. Large Company Index ETF | None | ||
Schwab Fundamental U.S. Small Company Index ETF | None | ||
Schwab Fundamental International Large Company Index ETF | Over $100,000 | ||
Schwab Fundamental International Small Company Index ETF | Over $100,000 | ||
Schwab Fundamental Emerging Markets Large Company Index ETF | Over $100,000 |
1 | Mr. de St. Paer joined the Board effective April 1, 2019. |
Fund | Name and Address | Percentage of Ownership |
Schwab Fundamental U.S. Broad Market Index ETF | Charles
Schwab & Co., Inc. 211 Main Street San Francisco, CA 94105-1905 |
80.81% |
National
Financial Services LLC 1000 Plaza 5 10th Floor Jersey City, NJ 07311 |
6.69% | |
Schwab Fundamental U.S. Large Company Index ETF | Charles Schwab & Co., Inc. | 93.42% |
Schwab Fundamental U.S. Small Company Index ETF | Charles Schwab & Co., Inc. | 95.15% |
Schwab Fundamental International Large Company Index ETF | Charles Schwab & Co., Inc. | 82.12% |
Schwab Fundamental International Small Company Index ETF | Charles Schwab & Co., Inc. | 87.27% |
Schwab Fundamental Emerging Markets Large Company Index ETF | Charles Schwab & Co., Inc. | 72.49% |
Fund | Fee |
Schwab Fundamental U.S. Broad Market Index ETF | 0.25% |
Schwab Fundamental U.S. Large Company Index ETF | 0.25% |
Schwab Fundamental U.S. Small Company Index ETF | 0.25% |
Schwab Fundamental International Large Company Index ETF | 0.25% |
Schwab Fundamental International Small Company Index ETF | 0.39% |
Schwab Fundamental Emerging Markets Large Company Index ETF | 0.39% |
Fund | 2020 | 2019 | 2018 |
Schwab Fundamental U.S. Broad Market Index ETF | $ 716,999 | $ 656,712 | $ 678,959 |
Schwab Fundamental U.S. Large Company Index ETF | $13,602,458 | $10,981,603 | $7,720,460 |
Schwab Fundamental U.S. Small Company Index ETF | $ 8,814,731 | $ 8,006,376 | $5,388,679 |
Schwab Fundamental International Large Company Index ETF | $11,148,890 | $ 9,701,613 | $7,153,725 |
Schwab Fundamental International Small Company Index ETF | $ 7,763,296 | $ 7,258,683 | $5,334,709 |
Schwab Fundamental Emerging Markets Large Company Index ETF | $10,047,803 | $ 8,541,303 | $5,980,991 |
Schwab
Fundamental U.S. Broad Market Index ETF |
Schwab
Fundamental U.S. Large Company Index ETF |
Schwab
Fundamental U.S. Small Company Index ETF | |||
Gross income from securities lending activities | $54,716 | $1,157,779 | $1,395,696 | ||
Fees and/or compensation paid for securities lending activities and related services: | |||||
Fees paid to securities lending agent from a revenue split | $ 4,312 | $ 90,776 | $ 107,189 | ||
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in a revenue split | $ 803 | $ 16,787 | $ 39,504 | ||
Administrative fees not included in revenue split | - | - | - | ||
Indemnification fees not included in revenue split | - | - | - | ||
Rebates (paid to borrower) | $ 1,943 | $ 41,870 | $ 96,401 | ||
Other fees not included in revenue split | - | - | - | ||
Aggregate fees/compensation paid for securities lending activities | $ 7,058 | $ 149,433 | $ 243,094 | ||
Net income from securities lending activities* | $47,658 | $1,008,346 | $1,152,602 |
Schwab
Fundamental International Large Company Index ETF |
Schwab
Fundamental International Small Company Index ETF |
Schwab
Fundamental Emerging Markets Large Company Index ETF | |||
Gross income from securities lending activities | $2,264,187 | $2,670,926 | $10,793 | ||
Fees and/or compensation paid for securities lending activities and related services: | |||||
Fees paid to securities lending agent from a revenue split | $ 169,099 | $ 199,539 | $ 557 | ||
Fees
paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in a revenue split |
$ 30,813 | $ 48,730 | $ 682 | ||
Administrative fees not included in revenue split | - | - | - | ||
Indemnification fees not included in revenue split | - | - | - | ||
Rebates (paid to borrower) | $ 87,946 | $ 118,761 | $ 3,614 | ||
Other fees not included in revenue split | - | - | - | ||
Aggregate fees/compensation paid for securities lending activities | $ 287,858 | $ 367,030 | $ 4,853 | ||
Net income from securities lending activities* | $1,976,329 | $2,303,896 | $ 5,940 |
* | “Net income from securities lending activities” may not match the fund’s current financial statements, which may reflect certain accrual adjustments. |
Registered
Investment Companies (this amount does not include the funds in this SAI) |
Other Pooled Investment Vehicles | Other Accounts | ||||
Name | Number of Accounts | Total Assets | Number of Accounts | Total Assets | Number of Accounts | Total Assets |
Christopher Bliss | 27 | $186,957,118,690 | 0 | $0 | 0 | $0 |
Jeremy Brown | 19 | $151,538,619,393 | 0 | $0 | 0 | $0 |
Chuck Craig | 8 | $ 35,418,499,297 | 0 | $0 | 0 | $0 |
Paul Holmquist1 | 0 | $ 0 | 0 | $0 | 0 | $0 |
Ferian Juwono | 19 | $151,538,619,393 | 0 | $0 | 0 | $0 |
Jane Qin | 8 | $ 35,418,499,297 | 0 | $0 | 0 | $0 |
David Rios | 8 | $ 35,418,499,297 | 0 | $0 | 0 | $0 |
Sabya Sinha | 19 | $151,538,619,393 | 0 | $0 | 0 | $0 |
1 | Paul Holmquist became responsible for the day-to-day co-management of certain funds as of the date of this SAI. Information is reflected as of May 29, 2020. |
• | 75% of the funding is based on equal weighting of Investment Fund Performance and Risk Management and Mitigation |
• | 25% of the funding is based on Corporate results |
• | Balancing safety of fund principal with appropriate limits that provide investment flexibility given existing market conditions |
• | Making timely sell recommendations to avoid significant deterioration of value resulting from the weakening condition of the issuer |
• | Escalating operating events and errors for prompt resolution |
• | Identifying largest risks and actively discussing with management |
• | Accurately validating fund information disseminated to the public (e.g., Annual and Semiannual reports, fund fact sheets, fund prospectus) |
• | Executing transactions timely and without material trade errors that result in losses to the funds |
• | Ensuring ongoing compliance with prospectus and investment policy guidelines |
• | Minimizing fund compliance exceptions |
• | Actively following up and resolving compliance exceptions |
• | Fund performance relative to performance measure |
• | Risk management and mitigation |
• | Individual performance against key objectives |
• | Contribution to overall group results |
• | Functioning as an active contributor to the firm’s success |
• | Team work |
• | Collaboration between Analysts and Portfolio Managers |
• | Regulatory/Compliance management |
Portfolio Manager | Fund | Dollar Range of Fund Shares Owned |
Christopher Bliss | Schwab Fundamental U.S. Broad Market Index ETF | None |
Schwab Fundamental U.S. Large Company Index ETF | None | |
Schwab Fundamental U.S. Small Company Index ETF | None | |
Schwab Fundamental International Large Company Index ETF | None | |
Schwab Fundamental International Small Company Index ETF | None | |
Schwab Fundamental Emerging Markets Large Company Index ETF | None | |
Jeremy Brown | Schwab Fundamental U.S. Broad Market Index ETF | None |
Schwab Fundamental U.S. Large Company Index ETF | None | |
Schwab Fundamental U.S. Small Company Index ETF | None | |
Chuck Craig | Schwab Fundamental International Large Company Index ETF | $50,001-$100,000 |
Schwab Fundamental International Small Company Index ETF | $10,001-$50,000 | |
Schwab Fundamental Emerging Markets Large Company Index ETF | $10,001-$50,000 | |
Paul Holmquist1 | Schwab Fundamental International Large Company Index ETF | None |
Schwab Fundamental International Small Company Index ETF | None | |
Schwab Fundamental Emerging Markets Large Company Index ETF | None |
Portfolio Manager | Fund | Dollar Range of Fund Shares Owned |
Ferian Juwono | Schwab Fundamental U.S. Broad Market Index ETF | None |
Schwab Fundamental U.S. Large Company Index ETF | None | |
Schwab Fundamental U.S. Small Company Index ETF | None | |
Jane Qin | Schwab Fundamental International Large Company Index ETF | None |
Schwab Fundamental International Small Company Index ETF | None | |
Schwab Fundamental Emerging Markets Large Company Index ETF | None | |
David Rios | Schwab Fundamental International Large Company Index ETF | None |
Schwab Fundamental International Small Company Index ETF | None | |
Schwab Fundamental Emerging Markets Large Company Index ETF | None | |
Sabya Sinha | Schwab Fundamental U.S. Broad Market Index ETF | None |
Schwab Fundamental U.S. Large Company Index ETF | None | |
Schwab Fundamental U.S. Small Company Index ETF | None |
1 | Paul Holmquist became responsible for the day-to-day co-management of certain funds as of the date of this SAI. Information is reflected as of May 29, 2020. |
Fund | 2020 | 2019 |
Schwab Fundamental U.S. Broad Market Index ETF | 13% | 11% |
Schwab Fundamental U.S. Large Company Index ETF | 12% | 11% |
Schwab Fundamental U.S. Small Company Index ETF | 26% | 23% |
Schwab Fundamental International Large Company Index ETF | 20% | 14% |
Schwab Fundamental International Small Company Index ETF | 31% | 25% |
Schwab Fundamental Emerging Markets Large Company Index ETF | 32% | 33% |
Fund | 2020 | 2019 | 2018 |
Schwab Fundamental U.S. Broad Market Index ETF | $ 10,524 | $ 7,768 | $ 8,291 |
Schwab Fundamental U.S. Large Company Index ETF | $140,299 | $ 97,046 | $ 59,766 |
Schwab Fundamental U.S. Small Company Index ETF | $654,668 | $316,667 | $243,478 |
Schwab Fundamental International Large Company Index ETF | $398,839 | $241,584 | $ 65,644 |
Schwab Fundamental International Small Company Index ETF | $294,098 | $197,430 | $ 78,944 |
Fund | 2020 | 2019 | 2018 |
Schwab Fundamental Emerging Markets Large Company Index ETF | $963,146 | $736,787 | $656,838 |
Fund | Regular Broker-Dealer | Value of Holdings* |
Schwab Fundamental U.S. Broad Market Index ETF | J.P. Morgan Securities, LLC | $ 3,545,070 |
Wells Fargo Securities, LLC | $ 2,577,390 | |
BofA Securities, Inc. | $ 1,866,750 | |
Goldman Sachs & Co. LLC | $ 1,192,172 | |
Morgan Stanley & Co. LLC | $ 563,505 | |
The Charles Schwab Corp. | $ 159,373 | |
Schwab Fundamental U.S. Large Company Index ETF | J.P. Morgan Securities, LLC | $81,361,412 |
Wells Fargo Securities, LLC | $59,148,798 | |
BofA Securities, Inc. | $42,837,153 | |
Goldman Sachs & Co. LLC | $27,377,399 | |
Morgan Stanley & Co. LLC | $12,935,048 | |
The Charles Schwab Corp. | $ 3,669,008 | |
Jefferies LLC | $ 2,008,961 | |
Schwab Fundamental U.S. Small Company Index ETF | None | N/A |
Schwab Fundamental International Large Company Index ETF | HSBC Securities (USA) Inc. | $37,558,195 |
UBS Securities LLC | $ 9,547,282 | |
Credit Suisse Securities (USA) LLC | $ 5,011,610 | |
Schwab Fundamental International Small Company Index ETF | None | N/A |
Schwab Fundamental Emerging Markets Large Company Index ETF | None | N/A |
* | Includes securities issued by regular broker-dealer’s parent and affiliates, if any. |
Fund | Approximate
Value of One Creation Unit |
Standard
Creation/Redemption Transaction Fee |
Maximum
Additional Creation Transaction Fee* |
Maximum
Additional Redemption Transaction Fee* |
Schwab Fundamental U.S. Broad Market Index ETF | $1,801,820 | $ 1,000 | 3.0% | 2.0% |
Schwab Fundamental U.S. Large Company Index ETF | $1,837,815 | $ 500 | 3.0% | 2.0% |
Schwab Fundamental U.S. Small Company Index ETF | $1,560,750 | $ 500 | 3.0% | 2.0% |
Schwab Fundamental International Large Company Index ETF | $2,312,450 | $10,000 | 3.0% | 2.0% |
Schwab Fundamental International Small Company Index ETF | $2,737,930 | $10,000 | 3.0% | 2.0% |
Fund | Approximate
Value of One Creation Unit |
Standard
Creation/Redemption Transaction Fee |
Maximum
Additional Creation Transaction Fee* |
Maximum
Additional Redemption Transaction Fee* |
Schwab Fundamental Emerging Markets Large Company Index ETF | $2,254,700 | $ 2,000 | 3.0% | 2.0% |
* | As a percentage of the total amount invested or redeemed. |
Argentina | ||||
January
1 February 24 February 25 March 23 |
March
24 April 2 April 9 April 10 |
May
1 May 25 June 17 June 20 |
June
20 July 9 July 10 August 17 |
October
12 November 20 December 7 December 8 December 25 |
Australia | ||||
January
1 January 27 |
April
10 April 13 |
June
8 December 25 |
December 28 | |
Austria | ||||
January
1 April 10 |
April
13 May 1 |
June
1 October 26 |
December
24 December 25 |
December 31 |
Belgium | ||||
January 1 | April 10 | April 13 | May 1 | December 25 |
Brazil | ||||
January
1 February 24 February 25 |
February
26 April 10 April 21 |
May
1 June 11 July 9 |
September
7 October 12 November 2 |
November
20 December 24 December 25 December 31 |
Canada | ||||
January
1 February 17 |
April
10 May 18 |
July
1 August 3 |
September
7 October 12 |
December
25 December 28 |
Chile | ||||
January
1 April 10 |
May
1 May 21 |
June
29 July 19 |
September
18 October 12 |
December
8 December 25 |
China | ||||
January
1 January 24 January 27 |
January
28 January 29 January 30 |
April
6 May 1 June 25 |
October
1 October 2 October 5 |
October
6 October 7 |
Colombia | ||||
January
1 January 6 March 23 April 9 |
April
10 May 1 May 25 June 15 |
June
22 June 29 July 20 August 7 |
August
17 October 12 November 2 November 16 |
December
8 December 25 |
The Czech Republic | ||||
January
1 April 10 April 13 |
May
1 May 8 July 6 |
September
28 October 28 November 17 |
December
24 December 25 December 31 |
|
Denmark | ||||
January
1 April 9 April 10 |
April
13 May 8 May 21 |
May
22 June 1 June 5 |
December
24 December 25 December 31 |
Egypt
The Egyptian Exchange is open Sunday through Thursday. | ||||
January
1 January 7 January 23 April 19 |
April
20 April 25 May 1 May 24 |
May
25 May 26 July 1 July 23 |
August
2 August 3 August 20 October 6 |
October
29 |
Finland | ||||
January
1 January 6 |
April
10 April 13 |
May
1 May 21 |
June
19 December 24 |
December
25 December 31 |
France | ||||
January 1 | April 10 | April 13 | May 1 | December 25 |
Germany | ||||
January
1 April 10 |
April
13 May 1 |
December
24 December 25 |
December 31 | |
Greece | ||||
January
1 January 6 March 2 |
March
25 April 10 April 13 |
April
17 April 20 May 1 |
June
8 October 28 December 24 |
December 25 |
Hong Kong | ||||
January
1 January 27 January 28 |
April
10 April 13 April 30 |
May
1 June 25 July 1 |
October
1 October 2 October 26 |
December 25 |
Hungary | ||||
January
1 March 15 April 10 |
April
13 May 1 June 1 |
August
20 August 21 October 23 |
November
1 December 24 December 25 |
December
26 December 31 |
India | ||||
February
21 March 9 April 2 |
April
6 April 10 April 14 |
May
1 July 31 August 20 |
August
28 October 2 November 16 |
November
30 December 25 |
Indonesia | ||||
January
1 March 25 April 10 May 1 |
May
7 May 21 May 22 May 25 |
May
26 May 27 June 1 July 31 |
August
17 August 20 October 29 December 24 |
December
25 December 31 |
Ireland | ||||
January 1 | April 10 | April 13 | May 1 | December 25 |
Israel
The Tel-Aviv Stock Exchange is open Sunday through Thursday. | ||||
March
10 April 8 April 9 |
April
14 April 15 April 28 |
April
29 May 28 May 29 |
July
30 September 20 September 27 |
September 28 |
Italy | ||||
January 1 | April 10 | April 13 | May 1 | December 25 |
Japan | ||||
January
1 January 2 January 3 January 13 |
February
11 February 24 March 20 April 29 |
May
4 May 5 May 6 July 23 |
July
24 August 10 September 21 September 22 |
November
3 November 23 December 31 |
Luxembourg | ||||
January 1 | April 10 | April 13 | May 1 | December 25 |
Malaysia | ||||
January
1 January 27 February 1 |
February
8 May 1 May 7 |
May
11 May 25 June 6 |
July
31 August 20 August 31 |
September
16 October 29 November 14 December 25 |
Mexico | ||||
January
1 February 3 |
February
5 March 16 |
April
9 April 10 |
May
1 September 16 |
November
16 November 20 December 25 |
Netherlands | ||||
January 1 | April 10 | April 13 | May 1 | December 25 |
New Zealand | ||||
January
1 January 2 |
February
6 April 10 |
April
13 April 27 |
June
1 October 26 |
December
25 December 28 |
Norway | ||||
January
1 April 9 |
April
10 April 13 |
May
1 May 21 |
June
1 December 24 |
December
25 December 31 |
Philippines | ||||
January
1 January 25 February 25 April 9 |
April
10 April 11 May 1 June 12 |
August
21 August 31 November 1 November 2 |
November
30 December 8 December 24 December 25 |
December
30 December 31 |
Poland | ||||
January
1 January 6 |
April
10 April 13 |
May
1 June 11 |
December
24 December 25 |
December 31 |
Portugal | ||||
January 1 | April 10 | April 13 | May 1 | December 25 |
Russia | ||||
January
1 January 2 |
January
7 February 24 |
March
9 May 1 |
May
11 June 12 |
November
4 December 31 |
Singapore | ||||
January
1 January 27 |
April
10 May 1 |
May
7 May 25 |
July
31 August 10 |
November
14 December 25 |
South Africa | ||||
January
1 March 21 April 10 |
April
13 April 27 May 1 |
June
16 August 9 September 24 |
December
16 December 25 December 26 |
|
South Korea | ||||
January
1 January 24 January 27 |
April
30 May 1 May 5 |
September
30 October 1 October 2 |
October
9 December 25 December 31 |
|
Spain | ||||
January 1 | April 10 | April 13 | May 1 | December 25 |
Sweden | ||||
January
1 April 10 |
April
13 May 1 |
May
21 June 19 |
December
24 December 25 |
December 26 |
Switzerland | ||||
January
1 January 2 |
April
10 April 13 |
May
1 May 21 |
June
1 December 24 |
December
25 December 31 |
Taiwan | ||||
January
1 January 24 January 27 |
January
28 January 29 February 28 |
April
3 April 4 May 1 |
June
25 October 1 October 9 |
October 10 |
Thailand | ||||
January
1 February 10 April 6 April 13 |
April
14 April 15 May 1 May 4 |
May
6 June 3 July 6 July 28 |
August
12 October 13 October 23 December 7 |
December
10 December 31 |
Turkey | ||||
January
1 April 23 May 1 |
May
16 May 24 May 25 |
May
26 July 15 July 31 |
August
1 August 2 August 3 |
October 29 |
United Kingdom | ||||
January
1 April 10 |
April
13 May 8 |
May
25 August 31 |
December 25 |
I. | INTRODUCTION |
II. | PHILOSOPHY |
III. | PROXY VOTING PRINCIPLES |
A. | DIRECTORS AND AUDITORS |
i. | Directors |
• | The board is not majority independent |
• | The board does not have any female directors and has not provided a reasonable explanation for its lack of gender diversity |
• | Non-independent directors serve on the nominating, compensation or audit committees |
• | Director recently failed to attend at least 75% of meetings or serves on an excessive number of publically traded company boards |
• | Directors approved executive compensation schemes that appear misaligned with shareholders’ interests |
• | Director recently acted in a manner inconsistent with these Proxy Policies or failed to be responsive to concerns of shareholders |
ii. | Auditors |
• | Audit-related fees are less than half of the total fees paid by the company to the audit firm |
• | A recent material restatement of annual financial statements |
• | A pattern of inaccurate audits or other behavior that may call into question an auditor’s effectiveness |
B. | BOARD MATTERS |
i. | Classified Boards |
• | The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings |
• | The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting |
• | The company had material financial statement restatements |
• | The company’s board adopted a Shareholder Rights Plan (a defensive tactic used by a company’s board to fight a hostile takeover, commonly referred to as a Poison Pill) during the past year and did not submit it to shareholders for approval |
ii. | Majority Voting |
iii. | Cumulative Voting |
iv. | Proxy Access |
• | The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings |
• | The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting |
• | The company had material financial statement restatements |
• | The company’s board adopted a Shareholder Rights Plan during the past year and did not submit it to shareholders for approval |
v. | Independent Chair |
• | The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings |
• | The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting |
• | The company had material financial statement restatements |
• | The company’s board adopted a Shareholder Rights Plan during the past year and did not submit it to shareholders for approval |
C. | COMPENSATION |
i. | Advisory Vote on Executive Compensation and Frequency |
• | Executive compensation is out of line with industry peers considering the company’s performance over time |
• | Executive compensation plan includes significant guaranteed bonuses or has a low amount of compensation at risk |
• | Executive compensation plan offers excessive perquisites, tax-gross up provisions, or golden parachutes |
ii. | Equity Compensation Plans |
• | Plan’s total potential dilution appears excessive |
• | Plan’s burn rate appears excessive compared to industry peers |
• | Plan allows for the re-pricing of options without shareholder approval |
• | Plan has an evergreen feature |
iii. | Employee Stock Purchase Plans |
iv. | Re-price/Exchange Option Plans |
D. | ANTI-TAKEOVER |
i. | Shareholder Rights Plans |
• | Plan does not expire in a relatively short time horizon |
• | Plan does not have a well-crafted permitted bid or qualified offer feature that mandates shareholder votes in certain situations |
• | Plan automatically renews without shareholder approval |
• | Company’s corporate governance profile |
ii. | Right to Call Special Meeting |
iii. | Right to Act by Written Consent |
iv. | Supermajority Voting |
E. | CAPITAL STRUCTURE, MERGERS AND ACQUISITIONS |
i. | Increase in Authorized Common Shares |
ii. | Preferred Shares |
iii. | Mergers and Acquisitions |
F. | ENVIRONMENTAL AND SOCIAL PROPOSALS |
Environmental and social shareholder proposals typically request companies to either change their business practices or enhance their disclosures. CSIM believes that, in most instances, the board is best positioned to determine a company’s strategy and manage its operations, and generally does not support shareholder proposals seeking a change in business practices. CSIM generally evaluates shareholder proposals seeking additional disclosures on relevant environmental and social issues based on a company’s current level of reporting, peer disclosures and the existence of controversies or litigation related to the issue. |
i. | Political Contribution Proposals |
IV. | ADMINISTRATION |
A. | CONFLICTS OF INTERESTS |
CSIM maintains the following practices that seek to prevent undue influence on its proxy voting activity. Such influence might arise from any relationship between the company holding the proxy (or any shareholder or board member of the company) and CSIM, CSIM’s affiliates, a Fund or a Fund affiliate, or a CSIM employee. | |
With respect to proxies of an underlying affiliated Fund, the Proxy Committee will vote such proxies in the same proportion as the vote of all other shareholders of such Fund (i.e., “echo vote”), unless otherwise required by law. When required by law or applicable exemptive order, the Proxy Committee will also “echo vote” proxies of an unaffiliated mutual fund or exchange traded fund. For example, certain exemptive orders issued to the Funds by the Securities and Exchange Commission and Section 12(d)(1)(F) of the Investment Company Act of 1940, as amended, require the Funds, under certain circumstances, to “echo vote” proxies of registered investment companies that serve as underlying investments of the Funds. |
In addition, with respect to holdings of The Charles Schwab Corporation (“CSC”) (ticker symbol: SCHW), the Proxy Committee will vote such proxies in the same proportion as the vote of all other shareholders of CSC (i.e., “echo vote”), unless otherwise required by law. |
Where the Proxy Committee has delegated an item to the Investment Stewardship Team or a portfolio manager of a fundamentally managed separate account, CSIM has taken certain steps to mitigate perceived or potential conflicts of interest, including, but not limited to, the following: |
• | maintaining a reporting structure that separates employees with voting authority from those with sales or business relationship authority; |
• | reporting of potential conflicts to the Proxy Committee to review the conflict and provide final vote determination; |
• | defaulting to the standard CSIM Proxy Voting Guidelines. |
B. | FOREIGN SECURITIES/SHAREBLOCKING |
• | proxy statements and ballots written in a foreign language; |
• | untimely and/or inadequate notice of shareholder meetings; |
• | restrictions of foreigner’s ability to exercise votes; |
• | requirements to vote proxies in person; |
• | requirements to provide local agents with power of attorney to facilitate CSIM’s voting instructions. |
C. | SECURITIES LENDING |
D. | SUB-ADVISORY RELATIONSHIPS |
E. | REPORTING AND RECORD RETENTION |
Schwab ® U.S. REIT ETF | SCHH |
(1) | Concentrate investments in a particular industry or group of industries, as concentration is defined under the 1940 Act, the rules or regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time, except that the fund may concentrate its investments to approximately the same extent that the index the fund is designed to track concentrates in the securities of such particular industry or group of industries and the fund may invest without limitation in (a) securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, and (b) tax-exempt obligations of state or municipal governments and their political subdivisions. |
(2) | Purchase or sell commodities, commodities contracts or real estate, lend or borrow money, issue senior securities, underwrite securities issued by others, or pledge, mortgage or hypothecate any of its assets, except as permitted by (or not prohibited by) the 1940 Act or the rules or regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
(1) | Sell securities short unless it owns the security or the right to obtain the security or equivalent securities, or unless it covers such short sale as required by current SEC rules and interpretations (transactions in futures contracts, options and other derivative instruments are not considered selling securities short). |
(2) | Purchase securities on margin, except such short term credits as may be necessary for the clearance of purchases and sales of securities and provided that margin deposits in connection with futures contracts, options on futures or other derivative instruments shall not constitute purchasing securities on margin. |
(3) | Borrow money except that the fund may (i) borrow money from banks or through an interfund lending facility, if any, and engage in reverse repurchase agreements with any party provided that such borrowings and reverse repurchase agreements in combination do not exceed 33 1/3% of its total assets, including the amount borrowed (but not including temporary or emergency borrowings not exceeding 5%); and (ii) may borrow an additional amount up to 5% of its assets for temporary or emergency purposes. |
(4) | Lend any security or make any other loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties (this restriction does not apply to purchases of debt securities or repurchase agreements). |
(5) | Purchase securities (other than securities issued or guaranteed by the U.S. government, its agencies or instrumentalities) if, as a result of such purchase, 25% or more of the value of its total assets would be invested in any industry or group of industries (except that the fund may purchase securities to the extent that the index the fund is designed to track is also so concentrated). |
(6) | Purchase or sell physical commodities or commodity contracts based on physical commodities or invest in unmarketable interests in real estate limited partnerships or invest directly in real estate. For the avoidance of doubt, the foregoing policy does not prevent the fund from, among other things, (i) purchasing marketable securities of companies that deal in real estate or interests therein (including REITs); (ii) purchasing marketable securities of companies that deal in physical commodities or interests therein; and (iii) purchasing, selling and entering into futures contracts (including futures contracts on indices of securities, interest rates and currencies), options on futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts or other derivative instruments. |
Name,
Year of Birth, and Position(s) with the Trust (Term 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 During the Past Five Years |
INDEPENDENT TRUSTEES | |||
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) |
Retired. 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 |
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
(2004-present), Corcept Therapeutics Incorporated Director (2009-present), Adamas Pharmaceuticals, Inc. Director (2003-2019), Symantec Corporation |
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) |
Consultant (2018-present), Fulham Advisers LLC (management consulting); 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 |
Name,
Year of Birth, and Position(s) with the Trust (Term 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 During the Past Five Years |
INDEPENDENT TRUSTEES | |||
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 Corporation plc |
INTERESTED TRUSTEES | |||
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, SSB; Director (Nov. 2017-present), Charles Schwab Premier Bank, SSB; Director (July 2019-present), Charles Schwab Trust 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 |
Jonathan
de St. Paer2 1973 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) |
Director (Apr. 2019-present), President (Oct. 2018-present), and Chief Executive Officer (Apr. 2019-Nov. 2019), Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019-present) and President (Nov. 2018-present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019-present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019-present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014-Mar. 2019), and Vice President (Jan. 2009-Dec. 2013), Charles Schwab & Co., Inc. | 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, SSB; Director (Nov. 2017-present), Charles Schwab Premier Bank, SSB; 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 |
Name,
Year of Birth, and Position(s) with the Trust (Term of Office and Length of Time Served3) |
Principal Occupations During the Past Five Years |
OFFICERS | |
Jonathan
de St. Paer 1973 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018) |
Director (Apr. 2019-present), President (Oct. 2018-present), and Chief Executive Officer (Apr. 2019-Nov. 2019), Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019-present) and President (Nov. 2018-present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019-present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019-present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014-Mar. 2019), and Vice President (Jan. 2009-Dec. 2013), Charles Schwab & Co., Inc. |
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; Chief Financial Officer (Mar. 2020-present) and 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. |
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 (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 (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 and 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. |
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, Mr. de St. Paer and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of CSC, the parent company of CSIM, the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc., the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust, and is a director of CSIM. Mr. de St. Paer is an Interested Trustee because he 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 Schwab. |
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 Audit, Compliance and Valuation Committee reviews the integrity of the Trust’s financial reporting processes and compliance policies, procedures and processes, and the Trust’s overall system of internal controls. The Audit, Compliance and Valuation Committee also reviews and evaluates the qualifications, independence and performance of the Trust’s independent auditors, and the implementation and operation of the Trust’s valuation policy and procedures. This Committee is comprised of at least three independent trustees and currently has the following members: Kiran M. Patel (Chair), John F. Cogan, Nancy F. Heller and Kimberly S. Patmore. The Committee met four times during the most recent fiscal year. |
• | The Governance Committee reviews and makes recommendations to the Board regarding Trust governance-related matters, including but not limited to Board compensation practices, retirement policies and term limits, Board self-evaluations, the effectiveness and allocation of assignments and functions by the Board, the composition of Committees of the Board, and the training of trustees. The Governance Committee is responsible for selecting and nominating candidates to serve as trustees. The Governance Committee does not have a written policy with respect to consideration of candidates for trustee submitted by shareholders. However, if the Governance Committee determined that it would be in the best interests of the Trust to fill a vacancy on the Board, and a shareholder submitted a candidate for consideration by the Board to fill the vacancy, the Governance Committee would evaluate that candidate in the same manner as it evaluates nominees identified by the Governance Committee. Nominee recommendations may be submitted to the Secretary of the Trust at the Trust’s principal business address. This Committee is comprised of at least three independent trustees and currently has the following members: John F. Cogan (Chair), Stephen Timothy Kochis, David L. Mahoney and Kimberly S. Patmore. The Committee met four times during the most recent fiscal year. |
• | The Investment Oversight Committee reviews the investment activities of the Trust and the performance of the fund’s investment adviser. This Committee is comprised of at least three trustees (at least two-thirds of whom shall be independent trustees) and currently has the following members: Gerald B. Smith (Chair), Robert W. Burns, Stephen Timothy Kochis, David L. Mahoney and Jane P. Moncreiff. The Committee met five times during the most recent fiscal year. |
Name of Trustee | Aggregate
Compensation from the Fund in this SAI |
Pension
or Retirement Benefits Accrued as Part of Fund Expenses |
Total
Compensation from the Fund and Fund Complex Paid to Trustees |
Interested Trustees | |||
Walter W. Bettinger II | None | N/A | None |
Marie A. Chandoha1 | None | N/A | None |
Jonathan de St. Paer2 | None | N/A | None |
Joseph R. Martinetto | None | N/A | None |
Independent Trustees | |||
Robert W. Burns | $3,755 | N/A | $312,500 |
John F. Cogan | $3,995 | N/A | $332,500 |
Nancy F. Heller | $3,755 | N/A | $312,500 |
Name of Trustee | Aggregate
Compensation from the Fund in this SAI |
Pension
or Retirement Benefits Accrued as Part of Fund Expenses |
Total
Compensation from the Fund and Fund Complex Paid to Trustees |
Independent Trustees | |||
Stephen Timothy Kochis | $3,755 | N/A | $312,500 |
David L. Mahoney | $3,755 | N/A | $312,500 |
Jane P. Moncreiff | $3,755 | N/A | $312,500 |
Kiran M. Patel | $3,995 | N/A | $332,500 |
Kimberly S. Patmore | $3,755 | N/A | $312,500 |
Gerald B. Smith | $3,995 | N/A | $332,500 |
1 | Ms. Chandoha retired from the Board effective March 31, 2019. |
2 | Mr. de St. Paer joined the Board effective April 1, 2019. |
Name of Trustee | Dollar Range of Trustee Ownership of the Fund Included in the SAI | Aggregate
Dollar Range of Trustee Ownership in the Family of Investment Companies | |
Interested Trustees | |||
Walter W. Bettinger II | Schwab U.S. REIT ETF | $1-$10,000 | Over $100,000 |
Jonathan de St. Paer1 | Schwab U.S. REIT ETF | None | Over $100,000 |
Joseph R. Martinetto | Schwab U.S. REIT ETF | $1-$10,000 | Over $100,000 |
Independent Trustees | |||
Robert W. Burns | Schwab U.S. REIT ETF | Over $100,000 | Over $100,000 |
John F. Cogan | Schwab U.S. REIT ETF | None | Over $100,000 |
Nancy F. Heller | Schwab U.S. REIT ETF | None | Over $100,000 |
Stephen Timothy Kochis | Schwab U.S. REIT ETF | None | Over $100,000 |
David L. Mahoney | Schwab U.S. REIT ETF | None | Over $100,000 |
Jane P. Moncreiff | Schwab U.S. REIT ETF | None | None |
Kiran M. Patel | Schwab U.S. REIT ETF | None | Over $100,000 |
Kimberly S. Patmore | Schwab U.S. REIT ETF | None | Over $100,000 |
Gerald B. Smith | Schwab U.S. REIT ETF | Over $100,000 | Over $100,000 |
Fund | Name and Address | Percent of Ownership |
Schwab U.S. REIT ETF | Charles
Schwab & Co., Inc. 211 Main St. San Francisco, CA 94105 |
59.44% |
Ameritrade,
Inc. 1005 N. Ameritrade Pl. Bellevue, NE 68005 |
12.41% |
Fund | 2020 | 2019 | 2018 |
Schwab U.S. REIT ETF | $4,052,048 | $3,146,929 | $2,489,776 |
Schwab U.S. REIT ETF | |
Gross income from securities lending activities | $455,366 |
Fees and/or compensation paid for securities lending activities and related services: | |
Fees paid to securities lending agent from a revenue split | $ 33,431 |
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in a revenue split | $ 18,935 |
Administrative fees not included in revenue split | - |
Indemnification fees not included in revenue split | - |
Rebates (paid to borrower) | $ 57,893 |
Other fees not included in revenue split | - |
Aggregate fees/compensation paid for securities lending activities | $110,259 |
Net income from securities lending activities* | $345,107 |
* | “Net income from securities lending activities” may not match the fund’s current financial statements, which may reflect certain accrual adjustments. |
Registered
Investment Companies (this amount does not include the fund in this SAI) |
Other Pooled Investment Vehicles | Other Accounts | ||||
Name | Number of Accounts | Total Assets | Number of Accounts | Total Assets | Number of Accounts | Total Assets |
Christopher Bliss | 32 | $199,355,201,545 | 0 | $0 | 0 | $0 |
Jeremy Brown | 21 | $155,045,466,675 | 0 | $0 | 0 | $0 |
Ferian Juwono | 21 | $155,045,466,675 | 0 | $0 | 0 | $0 |
Sabya Sinha | 21 | $155,045,466,675 | 0 | $0 | 0 | $0 |
• | 75% of the funding is based on equal weighting of Investment Fund Performance and Risk Management and Mitigation |
• | 25% of the funding is based on Corporate results |
• | Balancing safety of fund principal with appropriate limits that provide investment flexibility given existing market conditions |
• | Making timely sell recommendations to avoid significant deterioration of value resulting from the weakening condition of the issuer |
• | Escalating operating events and errors for prompt resolution |
• | Identifying largest risks and actively discussing with management |
• | Accurately validating fund information disseminated to the public (e.g., Annual and Semiannual reports, fund fact sheets, fund prospectus) |
• | Executing transactions timely and without material trade errors that result in losses to the fund |
• | Ensuring ongoing compliance with prospectus and investment policy guidelines |
• | Minimizing fund compliance exceptions |
• | Actively following up and resolving compliance exceptions |
• | Fund performance relative to performance measure |
• | Risk management and mitigation |
• | Individual performance against key objectives |
• | Contribution to overall group results |
• | Functioning as an active contributor to the firm’s success |
• | Team work |
• | Collaboration between Analysts and Portfolio Managers |
• | Regulatory/Compliance management |
Portfolio Manager | Dollar Range of Fund Shares Owned |
Christopher Bliss | None |
Jeremy Brown | None |
Ferian Juwono | $50,001-$100,000 |
Sabya Sinha | None |
Fund | 2020 | 2019 |
Schwab U.S. REIT ETF | 6% | 7% |
Fund | 2020 | 2019 | 2018 |
Schwab U.S. REIT ETF | $128,100 | $111,794 | $135,779 |
Fund | Regular Broker-Dealer | Value of Holdings |
Schwab U.S. REIT ETF | None | N/A |
Fund | Approximate
Value of One Creation Unit |
Standard
Creation/Redemption Transaction Fee |
Maximum
Additional Creation Transaction Fee* |
Maximum
Additional Redemption Transaction Fee* |
Schwab U.S. REIT ETF | $1,755,945 | $250 | 3.0% | 2.0% |
* | As a percentage of the total amount invested or redeemed. |
I. | INTRODUCTION |
II. | PHILOSOPHY |
III. | PROXY VOTING PRINCIPLES |
A. | DIRECTORS AND AUDITORS |
i. | Directors |
• | The board is not majority independent |
• | The board does not have any female directors and has not provided a reasonable explanation for its lack of gender diversity |
• | Non-independent directors serve on the nominating, compensation or audit committees |
• | Director recently failed to attend at least 75% of meetings or serves on an excessive number of publically traded company boards |
• | Directors approved executive compensation schemes that appear misaligned with shareholders’ interests |
• | Director recently acted in a manner inconsistent with these Proxy Policies or failed to be responsive to concerns of shareholders |
ii. | Auditors |
• | Audit-related fees are less than half of the total fees paid by the company to the audit firm |
• | A recent material restatement of annual financial statements |
• | A pattern of inaccurate audits or other behavior that may call into question an auditor’s effectiveness |
B. | BOARD MATTERS |
i. | Classified Boards |
• | The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings |
• | The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting |
• | The company had material financial statement restatements |
• | The company’s board adopted a Shareholder Rights Plan (a defensive tactic used by a company’s board to fight a hostile takeover, commonly referred to as a Poison Pill) during the past year and did not submit it to shareholders for approval |
ii. | Majority Voting |
iii. | Cumulative Voting |
iv. | Proxy Access |
• | The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings |
• | The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting |
• | The company had material financial statement restatements |
• | The company’s board adopted a Shareholder Rights Plan during the past year and did not submit it to shareholders for approval |
v. | Independent Chair |
• | The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings |
• | The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting |
• | The company had material financial statement restatements |
• | The company’s board adopted a Shareholder Rights Plan during the past year and did not submit it to shareholders for approval |
C. | COMPENSATION |
i. | Advisory Vote on Executive Compensation and Frequency |
• | Executive compensation is out of line with industry peers considering the company’s performance over time |
• | Executive compensation plan includes significant guaranteed bonuses or has a low amount of compensation at risk |
• | Executive compensation plan offers excessive perquisites, tax-gross up provisions, or golden parachutes |
ii. | Equity Compensation Plans |
• | Plan’s total potential dilution appears excessive |
• | Plan’s burn rate appears excessive compared to industry peers |
• | Plan allows for the re-pricing of options without shareholder approval |
• | Plan has an evergreen feature |
iii. | Employee Stock Purchase Plans |
iv. | Re-price/Exchange Option Plans |
D. | ANTI-TAKEOVER |
i. | Shareholder Rights Plans |
• | Plan does not expire in a relatively short time horizon |
• | Plan does not have a well-crafted permitted bid or qualified offer feature that mandates shareholder votes in certain situations |
• | Plan automatically renews without shareholder approval |
• | Company’s corporate governance profile |
ii. | Right to Call Special Meeting |
iii. | Right to Act by Written Consent |
iv. | Supermajority Voting |
E. | CAPITAL STRUCTURE, MERGERS AND ACQUISITIONS |
i. | Increase in Authorized Common Shares |
ii. | Preferred Shares |
iii. | Mergers and Acquisitions |
F. | ENVIRONMENTAL AND SOCIAL PROPOSALS |
Environmental and social shareholder proposals typically request companies to either change their business practices or enhance their disclosures. CSIM believes that, in most instances, the board is best positioned to determine a company’s strategy and manage its operations, and generally does not support shareholder proposals seeking a change in business practices. CSIM generally evaluates shareholder proposals seeking additional disclosures on relevant environmental and social issues based on a company’s current level of reporting, peer disclosures and the existence of controversies or litigation related to the issue. |
i. | Political Contribution Proposals |
IV. | ADMINISTRATION |
A. | CONFLICTS OF INTERESTS |
CSIM maintains the following practices that seek to prevent undue influence on its proxy voting activity. Such influence might arise from any relationship between the company holding the proxy (or any shareholder or board member of the company) and CSIM, CSIM’s affiliates, a Fund or a Fund affiliate, or a CSIM employee. | |
With respect to proxies of an underlying affiliated Fund, the Proxy Committee will vote such proxies in the same proportion as the vote of all other shareholders of such Fund (i.e., “echo vote”), unless otherwise required by law. When required by law or applicable exemptive order, the Proxy Committee will also “echo vote” proxies of an unaffiliated mutual fund or exchange traded fund. For example, certain exemptive orders issued to the Funds by the Securities and Exchange Commission and Section 12(d)(1)(F) of the Investment Company Act of 1940, as amended, require the Funds, under certain circumstances, to “echo vote” proxies of registered investment companies that serve as underlying investments of the Funds. | |
In addition, with respect to holdings of The Charles Schwab Corporation (“CSC”) (ticker symbol: SCHW), the Proxy Committee will vote such proxies in the same proportion as the vote of all other shareholders of CSC (i.e., “echo vote”), unless otherwise required by law. | |
Where the Proxy Committee has delegated an item to the Investment Stewardship Team or a portfolio manager of a fundamentally managed separate account, CSIM has taken certain steps to mitigate perceived or potential conflicts of interest, including, but not limited to, the following: |
• | maintaining a reporting structure that separates employees with voting authority from those with sales or business relationship authority; |
• | reporting of potential conflicts to the Proxy Committee to review the conflict and provide final vote determination; |
• | defaulting to the standard CSIM Proxy Voting Guidelines. |
B. | FOREIGN SECURITIES/SHAREBLOCKING |
• | proxy statements and ballots written in a foreign language; |
• | untimely and/or inadequate notice of shareholder meetings; |
• | restrictions of foreigner’s ability to exercise votes; |
• | requirements to vote proxies in person; |
• | requirements to provide local agents with power of attorney to facilitate CSIM’s voting instructions. |
C. | SECURITIES LENDING |
D. | SUB-ADVISORY RELATIONSHIPS |
E. | REPORTING AND RECORD RETENTION |
Item 29. | Persons Controlled By Or Under Common Control With The Registrant. |
Item 30. | Indemnification. |
Item 31. | Business And Other Connections Of Investment Adviser. |
Name and Position with Adviser | Name of Other Company | Capacity |
Walter W. Bettinger, II, Director | The Charles Schwab Corporation | Director, President and Chief Executive Officer |
Charles Schwab & Co., Inc. | Director, President and Chief Executive Officer | |
Americano Acquisition Corp. | Director, President and Chief Executive Officer | |
Schwab Holdings, Inc. | Director, President and Chief Executive Officer | |
Schwab International Holdings, Inc. | President and Chief Executive Officer | |
Charles Schwab Bank, SSB | Director | |
Charles Schwab Premier Bank, SSB | Director | |
Charles Schwab Trust Bank | Director | |
Schwab (SIS) Holdings, Inc. I | President and Chief Executive Officer | |
Schwab Funds | Chairman and Trustee | |
Laudus Funds | Chairman and Trustee | |
Schwab ETFs | Chairman and Trustee | |
Peter B. Crawford, Director | The Charles Schwab Corporation | Executive Vice President and Chief Financial Officer |
Charles Schwab & Co., Inc. | Director, Executive Vice President and Chief Financial Officer | |
Americano Acquisition Corp. | Director, Executive Vice President and Chief Financial Officer | |
Schwab Holdings, Inc. | Director, Executive Vice President and Chief Financial Officer | |
Charles Schwab Global Holdings, Inc. | Executive Vice President and Chief Financial Officer | |
Schwab International Holdings, Inc. | Executive Vice President and Chief Financial Officer | |
Performance Technologies, Inc. | Executive Vice President and Chief Financial Officer | |
Schwab (SIS) Holdings, Inc. I | Executive Vice President and Chief Financial Officer | |
Schwab Technology Holdings, Inc. | Executive Vice President and Chief Financial Officer | |
Richard A. Wurster, Chief Executive Officer | The Charles Schwab Corporation | Executive Vice President – Schwab Asset Management Solutions |
Charles Schwab & Co., Inc. | Executive Vice President – Schwab Asset Management Solutions | |
Charles Schwab Investment Advisory, Inc. | Director, Chief Executive Officer and President | |
Jonathan de St. Paer, Director and President | Charles Schwab & Co., Inc. | Senior Vice President |
Schwab Funds | Trustee, President and Chief Executive Officer | |
Laudus Funds | Trustee, President and Chief Executive Officer | |
Schwab ETFs | Trustee, President and Chief Executive Officer | |
Charles Schwab Worldwide Funds, plc | Director | |
Charles Schwab Asset Management (Ireland) Limited | Director |
Name and Position with Adviser | Name of Other Company | Capacity |
Omar Aguilar, Senior Vice President and Chief Investment Officer | Schwab Funds | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies |
Laudus Funds | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies | |
Schwab ETFs | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies | |
Brett Wander, Senior Vice President and Chief Investment Officer | Schwab Funds | Senior Vice President and Chief Investment Officer – Fixed Income |
Laudus Funds | Senior Vice President and Chief Investment Officer – Fixed Income | |
Schwab ETFs | Senior Vice President and Chief Investment Officer – Fixed Income | |
William P. McMahon, Jr., Senior Vice President and Chief Investment Officer | None | None |
David Lekich, Senior Vice President and Chief Counsel | Charles Schwab & Co., Inc. | Senior Vice President |
Schwab Funds | Secretary and Chief Legal Officer | |
Laudus Funds | Vice President and Assistant Clerk | |
Schwab ETFs | Secretary and Chief Legal Officer | |
Michael Hogan, Senior Vice President and Chief Compliance Officer | Schwab Funds | Chief Compliance Officer |
Schwab ETFs | Chief Compliance Officer | |
Laudus Funds | Chief Compliance Officer | |
Charles Schwab & Co., Inc. | Senior Vice President and Chief Compliance Officer – IIMS Compliance | |
Bryan L. Olson, Senior Vice President and Chief Operating Officer | Charles Schwab Investment Advisory, Inc. | Senior Vice President and Chief Operating Officer |
Mark D. Fischer, Vice President and Chief Financial Officer | Schwab Funds | Treasurer and Chief Financial Officer |
Laudus Funds | Treasurer and Chief Financial Officer | |
Schwab ETFs | Treasurer and Chief Financial Officer |
Item 32. | Principal Underwriter: |
Name | Position and Office with Underwriter | Positions and Offices with Registrant |
William M. Doran | Director | None |
Paul F. Klauder | Director | None |
Wayne M. Withrow | Director | None |
Kevin Barr | Director, President & Chief Executive Officer | None |
Maxine Chou | Chief Financial Officer, Chief Operations Officer, & Treasurer | None |
Jennifer H. Campisi | Chief Compliance Officer, Anti-Money Laundering Officer & Assistant Secretary | None |
John C. Munch | General Counsel & Secretary | None |
Name | Position and Office with Underwriter | Positions and Offices with Registrant |
Mark J. Held | Senior Vice President | None |
Lori L. White | Vice President & Assistant Secretary | None |
John P. Coary | Vice President & Assistant Secretary | None |
Robert Silvestri | Vice President | None |
Judith A. Hirx | Vice President | None |
Jason McGhin | Vice President | None |
Gary Michael Reese | Vice President | None |
Item 33. | Location Of Accounts And Records. |
Item 34. | Management Services. |
Item 35. | Undertakings. |
SCHWAB STRATEGIC TRUST |
Registrant |
Jonathan de St. Paer* |
Jonathan de St. Paer, President and Chief Executive Officer |
Signature | Title | |
Walter
W. Bettinger II* Walter W. Bettinger II |
Chairman and Trustee | |
Jonathan
de St. Paer* Jonathan de St. Paer |
Trustee, President and Chief Executive Officer | |
Joseph
R. Martinetto* Joseph R. Martinetto |
Trustee | |
Robert
W. Burns* Robert W. Burns |
Trustee | |
John
F. Cogan* John F. Cogan |
Trustee | |
Nancy
F. Heller* Nancy F. Heller |
Trustee | |
Stephen
Timothy Kochis* Stephen Timothy Kochis |
Trustee | |
David
L. Mahoney* David L. Mahoney |
Trustee | |
Jane
P. Moncreiff* Jane P. Moncreiff |
Trustee | |
Kiran
M. Patel* Kiran M. Patel |
Trustee | |
Kimberly
S. Patmore* Kimberly S. Patmore |
Trustee | |
Gerald
B. Smith* Gerald B. Smith |
Trustee | |
Mark
D. Fischer* Mark D. Fischer |
Treasurer and Chief Financial Officer |
*By: | /s/
Douglas P. Dick Douglas P. Dick, Attorney-in-Fact Pursuant to Power of Attorney |
This ‘485BPOS’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/1/21 | ||||
12/31/20 | ||||
Filed as of / Effective on: | 6/26/20 | 497K | ||
Filed on: | 6/25/20 | 497K | ||
6/22/20 | 497K | |||
6/9/20 | ||||
6/8/20 | ||||
5/31/20 | ||||
5/29/20 | ||||
2/29/20 | 24F-2NT, N-CEN, N-CSR, N-CSRS, NPORT-P | |||
1/31/20 | ||||
12/31/19 | 24F-2NT, N-CEN, N-CSR, NPORT-P | |||
8/31/19 | 24F-2NT, N-CEN, N-CSR, N-CSRS | |||
4/1/19 | 497 | |||
3/31/19 | NPORT-EX | |||
3/1/19 | ||||
12/22/10 | ||||
10/27/09 | 8-A12B, N-1A/A | |||
7/15/09 | N-1A, N-8A | |||
1/27/09 | ||||
List all Filings |