Aug. 31, 2024
The fund seeks high current income that is exempt from federal income tax, consistent with capital preservation.
This table describes the fees and expenses you may pay if you buy, hold and sell shares of the fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.
| 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 | | | 0.22 | |
| Distribution (12b-1) fees | | | None | |
| Other expenses | | | 0.19 | |
| Total annual fund operating expenses | | | 0.41 | |
| Less expense reduction | | | (0.03) | |
| Total annual fund operating expenses after expense reduction(1) | | | 0.38 | |
(1)
The investment adviser and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of the fund to 0.38% for so long as the investment adviser serves as the adviser to the fund. This agreement may only be amended or terminated with the approval of the fund’s Board of Trustees.
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those time periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. The figures are based on total annual fund operating expenses after any expense reduction. Your actual costs may be higher or lower.
| | Expenses on a $10,000 Investment | | |||||||||||||||||||||
| | 1 Year | | | 3 Years | | | 5 Years | | | 10 Years | | ||||||||||||
| | | $ | 39 | | | | | $ | 122 | | | | | $ | 213 | | | | | $ | 480 | | |
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating
expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 127% of the average value of its portfolio.
To pursue its goal, the fund primarily invests in investment-grade municipal securities – those in the four highest credit rating categories (rated AAA to BBB- or the unrated equivalent as determined by the investment adviser). The fund normally invests at least 80% of its net assets (including, for this purpose, any borrowings for investment purposes) in municipal securities the interest from which is exempt from federal income tax, including the federal alternative minimum tax (AMT).
The fund may invest in fixed-, variable- or floating-rate securities from municipal issuers around the country and in U.S. territories and possessions. These may include general obligation issues, which typically are backed by the issuer’s ability to levy taxes, and revenue issues, which typically are backed by a stream of revenue from a given source, such as an electric utility or a public water system. The fund may invest more than 25% of its total assets in municipal securities financing similar projects, such as those relating to education, health care, transportation and utilities and may also invest in municipal notes. The fund’s securities may carry credit enhancements (such as bond insurance) or liquidity enhancements (such as a letter of credit), which are designed to provide incremental levels of creditworthiness or liquidity.
In choosing securities, the fund’s investment adviser seeks to maximize current income within the limits of the fund’s credit and maturity standards. The investment adviser’s credit research department analyzes and monitors the securities that the fund owns or is considering buying. The fund may invest up to 15% of its assets in below investment grade bonds (sometimes called junk bonds) that are rated, at the time of investment, at least B by at least one nationally recognized statistical rating organization or are the unrated equivalent as determined by the investment adviser. If a bond is downgraded below B or the unrated equivalent, the fund may continue to hold it unless the investment adviser determines the risk of holding the bond is unacceptable when compared to the bond’s total return potential. The investment adviser may adjust the fund’s holdings based on actual or anticipated changes in interest rates or credit quality.
The fund may also invest in derivative instruments, principally futures contracts. The fund typically uses futures as a substitute for taking a position in the underlying asset or as a part of a strategy designed to reduce exposure to other risks. During unusual market conditions, the fund may invest entirely in taxable securities and municipal securities whose interest is subject to federal income tax and the AMT as a temporary defensive measure. When the fund
engages in such activities, the fund would not be pursuing its investment strategy and, as a result, it may not achieve its investment objective.
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 one or more indices. The Bloomberg Municipal Bond Index serves as the fund’s regulatory index and provides a broad measure of market performance. The Bloomberg Municipal 3-15 Year Blend Index is the fund’s additional index and is more representative of the fund’s investment universe than the regulatory 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.schwabassetmanagement.com/prospectus.
www.schwabassetmanagement.com/prospectus.
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Best Quarter: 6.21% Q4 2023
Worst Quarter: (5.88%) Q1 2022
Year-to-date performance (before taxes) as of 9/30/24: 2.85%
| Average Annual Total Returns as of 12/31/23 | | ||||||||||||||||||
| | | | 1 Year | | | 5 Years | | | 10 Years | | |||||||||
| Before taxes | | | | | 5.67% | | | | | | 1.77% | | | | | | 2.28% | | |
| After taxes on distributions | | | | | 5.67% | | | | | | 1.71% | | | | | | 2.17% | | |
| After taxes on distributions and sale of shares | | | | | 4.66% | | | | | | 1.89% | | | | | | 2.27% | | |
| Comparative Indices (reflect no deduction for fees, expenses, or taxes) | | | | | | | | | | | | | | | | | | | |
| Bloomberg Municipal Bond Index | | | | | 6.40% | | | | | | 2.25% | | | | | | 3.03% | | |
| Bloomberg Municipal 3-15 Year Blend Index | | | | | 5.45% | | | | | | 2.28% | | | | | | 2.77% | | |
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.