Small-Cap Company Risk.
Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.
Sampling Index Tracking Risk.
The fund may not fully replicate the index and may hold securities not included in the index. As a result, the fund is subject to the risk that the investment adviser’s investment management strategy, the
implementation of which is subject to a number of constraints, may not produce the intended results. Because the fund utilizes a sampling approach it may not track the return of the index as well as it would if the fund purchased all of the
securities in the index.
Tracking Error Risk. As an index fund, the fund seeks to track the performance of the index, although it may not be successful in doing so. The divergence between the performance of the fund and the index, positive or
negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.
Derivatives Risk. The
fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. The fund’s use of derivatives could reduce the
fund’s performance, increase the fund’s volatility, and could cause the fund to lose more than the initial amount invested. In addition, investments in derivatives may involve leverage, which means a small percentage of assets
invested in derivatives can have a disproportionately large impact on the fund.
Liquidity Risk. The fund
may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.
Securities Lending Risk.
Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Concentration Risk. To the
extent that the fund’s or the index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the fund may be adversely affected by the performance of those
securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Market Trading Risk. Although
fund shares are listed on national securities exchanges, there can be no assurance that an active trading market for fund shares will develop or be maintained. If an active market is not maintained, investors may find it difficult to buy or sell
fund shares.
Shares of the Fund May Trade at Prices
Other Than NAV. Fund shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of the shares of the fund will approximate the fund’s net asset value
(NAV), there may be times when the market price and the NAV vary significantly. An investor may pay more than NAV when buying shares of the fund
in the secondary market, and an investor may receive less than NAV when
selling those shares in the secondary market. The market price of fund shares may deviate, sometimes significantly, from NAV during periods of market volatility or market disruption.
For more information on the risks of investing in the fund,
please see the “Fund Details” section in the prospectus.
Performance
The bar chart below shows how the fund’s investment
results have varied from year to year, and the following table shows how the fund’s average annual total returns for various periods compared to that of an index. This information provides some indication of the risks of investing in the fund.
All figures assume distributions were reinvested. Keep in mind that future performance (both before and after taxes) may differ from past performance. For current performance information, please see
www.schwabfunds.com/schwabetfs_prospectus.
Annual Total Returns (%) as of
12/31
Best Quarter: 12.78% Q1 2012
Worst Quarter: (15.03%) Q3 2011
Year-to-date performance (before taxes) as of 9/30/19: 20.11%
Average
Annual Total Returns as of 12/31/18
|
|
1
Year
|
5
Years
|
Since
Inception
(11/03/09)
|
Before
taxes
|
(5.25%)
|
7.90%
|
12.35%
|
After
taxes on distributions
|
(5.70%)
|
7.40%
|
11.90%
|
After
taxes on distributions and sale of shares
|
(2.77%)
|
6.16%
|
10.20%
|
Comparative
Index (reflects no deduction for expenses or taxes)
|
|
|
|
Dow
Jones U.S. Broad Stock Market Index
|
(5.26%)
|
7.90%
|
12.37%
|
The after-tax figures reflect the
highest individual federal income tax rates in effect during the period and do not reflect the impact of state and local taxes. Your actual after-tax returns depend on your individual tax situation. In addition, after-tax returns are not relevant if
you hold your fund shares through a tax-deferred arrangement, such as a 401(k) plan, an individual retirement account (IRA) or other tax-advantaged account. In some cases, the return after taxes on distributions and sale of shares may exceed
the fund’s other returns due to an assumed benefit from any losses on a sale of shares at the end of the measurement period.
Investment Adviser
Charles Schwab Investment Management, Inc.