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Annual Report | December 31, 2016
Schwab Advisor Cash Reserves®
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In This Report
From the President
The Investment Environment
Fund Management
Performance and Fund Facts
Fund Expenses
Financial Statements and Portfolio Holdings
Financial Notes
Report of Independent Registered Public Accounting Firm
Trustees and Officers
Glossary
2
3
4
5
7
8
24
32
33
37
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Schwab Advisor Cash Reserves | Annual Report
1
Schwab Advisor Cash Reserves
From the President
Dear Shareholder,
At this time of the year, many of us set personal intentions and make resolutions for the New
Year. Along those same lines, at Charles Schwab Investment Management, we also look to the
year ahead and at ways we can continue to help you achieve your financial goals. In 2017, we
intend to keep making your investing experience with us as positive and transparent as we can,
continuing to put you, our investors, first.
The 12-months ended December 31, 2016, brought some notable changes to most money
market funds. Final implementation of Money Market Fund Reform went into effect in October,
causing uncertainty in much of the industry. Then, in December, the Federal Reserve raised
interest rates for the first time in a year, resulting in rising yields for many money market funds.
Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
fund covered in this report.
“Money market funds
remain in the
spotlight amid
expectations for
further rate increases
in the coming year.”
Money market funds remain in the spotlight amid expectations for further rate increases in the
coming year. Generally, the search for places to put savings—either temporarily or as part of a
permanent cash allocation—has led investors to opt for the highest-yielding option. But we
believe it’s important to remember that yield is only one facet of owning such investments.
Schwab Advisor Cash Reserves (the fund) is designed to offer investors stability of capital and
liquidity, along with yield. Our investment risk team regularly conducts tests to evaluate the
impact of various factors on fund holdings, including increases and decreases in short-term
rates, widening of credit spreads, downgrades and defaults of issuers, fund cash flow, and
shareholder activity. The fund’s portfolio managers may adjust the investment holdings as a
result of these findings, for example, by shortening or lengthening the average maturity of the
assets in the fund’s portfolio.
We also work hard to give you the best online investor experience we can, providing access to
industry insights, fund performance, and much more. Earlier this year, we further bolstered our
online resources for the Schwab Money Funds. Our website includes information on the daily
and weekly liquid assets, net inflows and outflows for the funds, and the current NAV and
market-based NAV per share. These reporting and disclosure changes are intended to provide
additional information and transparency, so that you can better track your investments.
Within the Schwab Money Funds lineup, there are several different options for investors to
choose from, including Schwab Purchased Money Funds. The Schwab Purchased Money Funds
are designed to offer a number of notable benefits, including capital preservation for existing or
upcoming obligations or to reduce the risk of an investor’s portfolio, and investment options for
both retail and institutional accounts. If an investor is able to meet fund minimums and is
willing to buy and sell positions to manage his/her cash investments, the Schwab Purchased
Money Funds could be a great option for an investor’s portfolio.
Thank you for investing with Charles Schwab Investment Management, and for trusting us to
help you achieve your financial goals. For more information about the fund, please continue
reading this report. In addition, you can find further details about this fund by visiting our
website at www.csimfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
2
Schwab Advisor Cash Reserves | Annual Report
Schwab Advisor Cash Reserves
The Investment Environment
Over the reporting period ended December 31, 2016, yields on taxable money market funds generally
remained low as the Federal Reserve (Fed) left the federal funds rate unchanged for most of 2016. Slowing
global growth and inconsistent U.S. economic data contributed to the Fed’s decision to hold short-term
interest rates steady through November, as did spikes in volatility tied to the United Kingdom’s decision in
June to leave the European Union (Brexit) and the U.S. presidential election. However, as the U.S. economy
began to pick up and show signs of lasting stability, the Fed unanimously voted to raise rates at its last
meeting of the year in December. Yields on short-term securities rose soon after, including the yields on
many taxable money market funds.
Outside the U.S., many countries continued to face weak economic growth and inflation below targeted
levels. In response, central banks in both Asia and Europe took steps to stimulate their respective
economies, and maintained or increased accommodative monetary policy measures. Early in the reporting
period, the European Central Bank (ECB) expanded its quantitative easing program and launched a program
that provides cheap funding to European banks, while also maintaining a negative overnight deposit facility
rate. At the end of the year, the ECB announced that it would cut the amount of bonds it was purchasing,
but would extend the bond buying program through December of 2017. In Asia, the Bank of Japan launched
negative interest rates in February to encourage lending, and later in the reporting period introduced yield
curve management as a policy tool, targeting interest rates on government bonds to achieve its inflation
goal. Facing slowing growth, the People’s Bank of China (PBOC) lowered the reserve requirement for banks
which increased the funds available for banks to make loans. The PBOC also flooded the economy with
credit during the reporting period, hoping to further encourage financial institutions to increase lending.
Overall, yields on U.S. Treasuries remained low for much of 2016 and did not increase until the end of the
reporting period. Short-term rates, which are directly influenced by Fed policy, rose as expectations for a
December Fed rate hike increased. Longer-term yields, which are generally driven by growth and inflation
expectations, rose in the second half of 2016 and climbed further following the unexpected outcome of the
U.S. presidential election. The yields on many international government-backed securities also remained
lower than those in the U.S., with some in negative territory, further increasing the appeal of U.S. Treasuries.
Index figures assume dividends and distributions were reinvested, and do not include trading and management costs, which would lower performance. Indices are unmanaged, do
not incur management fees, costs or expenses, and you cannot invest in them directly. For index definitions, please see the Glossary.
Management views may have changed since the report date.
Past performance cannot guarantee future results
Schwab Advisor Cash Reserves | Annual Report
3
Schwab Advisor Cash Reserves
Fund Management
Linda Klingman, Vice President and Head of Taxable Money Market Strategies, leads the portfolio
management team of Schwab’s prime and government taxable money funds. Ms. Klingman also
has overall responsibility for all aspects of the management of the fund. Prior to joining CSIM in
1990, Ms. Klingman was a senior money market trader with AIM Management. She has managed
money market funds since 1988.
Michael Lin, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day
co-management of the fund. Mr. Lin has been a portfolio manager with CSIM since 2006, and also
worked in CSIM’s Fund Administration group for nearly four years, where he focused on security
pricing and valuation of Schwab Funds. Prior to joining CSIM, he spent three years at American
Century Investments, most recently as a senior trader of the taxable money market funds.
Jonathan Roman, Portfolio Manager, is responsible for the day-to-day co-management of the
fund. Mr. Roman has been a portfolio manager with CSIM since 2010, and has held a number of
positions at the firm since beginning his tenure in 2005. In 2009, he joined the Portfolio
Management group as a Trader, and prior to that he worked in the Portfolio Operations and
Analytics group providing trading support to the taxable money market desk.
Jonathan Feske, CFA, Portfolio Manager, is responsible for the day-to-day co-management of the
fund. He previously was responsible for credit and investment research for global banks for
CSIM’s taxable bond and money funds. Prior to joining CSIM in 2011, Mr. Feske was a high-yield
bond analyst for more than two years at Miller Tabak Roberts Securities, a boutique corporate
bond broker-dealer, which is now part of GMP Capital. He covered both U.S. and emerging market
credits, focusing on distressed situations in various industrial sectors. Previously, Mr. Feske was
employed in the securities industry as an equity trader for three years.
4
Schwab Advisor Cash Reserves | Annual Report
Schwab Advisor Cash Reserves
Performance and Fund Facts as of 12/31/16
Schwab Advisor Cash Reserves (the fund) seeks the highest current income consistent with stability of capital and liquidity. To pursue its goal, the
fund invests in high-quality, short-term money market investments issued by U.S. and foreign issuers. Examples of these securities include
commercial paper, certificates of deposit, repurchase agreements, variable- and floating-rate debt securities, and obligations issued by the U.S.
government, its agencies, or instrumentalities. For more information concerning the fund’s investment objective, strategy, and risks, please see the
fund’s prospectus.
As yields on money market securities remained historically low, the fund’s investment adviser and its affiliates voluntarily waived certain fees or
expenses during the 12-month reporting period ended December 31, 2016, to help the fund maintain a positive net yield. For more information
about the fund’s yield and other important characteristics, please review the charts and footnotes that follow this discussion.
Market Highlights. For the 12-month reporting period ended December 31, 2016, many global markets experienced bouts of heightened volatility.
Early in the year, concerns surrounding China’s decelerating economy and sharp fluctuations in the price of oil contributed to market uncertainty,
while the United Kingdom’s vote to leave the European Union (Brexit) and the U.S. presidential election added to volatility later in the reporting
period. Throughout the year, speculation around the timing of another short-term interest rate increase by the Federal Reserve (Fed) caused investor
uncertainty and played a role in market movements. The Fed left the federal funds rate unchanged for most of 2016, only raising it at the Fed’s last
meeting of the year in December. The increase in short-term interest rates was expected, and most markets remained orderly as a result.
The implementation of Money Market Fund Reform played a key role in the steepness of the prime money market yield curve over the reporting
period, as well as in the large outflows and inflows that the money market fund industry experienced in the months prior to final implementation.
During the 12-month reporting period, the industry saw an approximate $1 trillion shift in assets from prime money market funds to government
money market funds, most of which took place in June through October. The shift in assets went very smoothly, in large part due to the Fed’s
Reverse Repurchase Facility providing much needed supply for the government money market funds.
As investors shifted assets from prime money market funds to government money market funds, spreads widened between these two types of
securities. Due to this shift in investor demand, yields on prime securities rose while yields on government securities declined.
Performance, Positioning, and Strategies. Throughout the reporting period, the fund’s investment adviser remained focused on ensuring liquidity
and stability of capital as market conditions evolved. Rates on short-term securities fluctuated during the period, largely driven by the impact of
Money Market Fund Reform implementation as well as the uncertainty surrounding future Fed interest rate hikes. In this environment, the weighted
average maturity (WAM) of the fund started the reporting period at 36 days and ended at 47 days.
PORTFOLIO COMPOSITION BY MATURITY % OF INVESTMENTS1
38.9%
10.3%
15.9%
16.2%
17.5%
1.2%
PORTFOLIO COMPOSITION BY SECURITY TYPE % OF INVESTMENTS
1-7 Days
8-30 Days
31-60 Days
61-90 Days
91-180 Days
More than 180 Days
21.5% Commercial Paper
Asset-Backed 14.3%
Financial Company 4.4%
Non-Financial Company 2.8%
44.8% Certificate Of Deposit
4.7% Non-Negotiable Time Deposits
1.2% U.S. Treasury Debt
1.4% Other Instruments
2.8% Variable Rate Demand Note
23.6% Repurchase Agreement
U.S. Government Agency 2.5%
U.S. Treasury 14.8%
Other 6.3%
STATISTICS
Weighted Average Maturity2
47 Days
Management views and portfolio holdings may have changed since the report date.
1
As shown in the Portfolio Holdings section of the shareholder report.
2
Money funds must maintain a dollar-weighted average maturity of no longer than 60 days and cannot invest in any security whose effective maturity is longer than 397 days
(approximately 13 months).
Schwab Advisor Cash Reserves | Annual Report
5
Schwab Advisor Cash Reserves
Performance and Fund Facts as of 12/31/16 (continued)
The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be
lower or higher than performance data quoted. To obtain more current performance information, please visit
www.csimfunds.com/schwabfunds_prospectus.
SEVEN-DAY AVERAGE YIELD TREND FOR PREVIOUS 12 MONTHS
0.5%
0.4%
0.3%
Sweep Shares
Premier Sweep Shares
0.2%
0.1%
0.0%
12/31/15
2/25
4/28
6/30
8/25
10/27
12/31/16
SEVEN-DAY YIELDS
The seven-day yield is the income generated by the fund’s portfolio holdings minus the fund’s operating expenses. The seven-day yields are
calculated using standard SEC formulas. The effective yield includes the effect of reinvesting daily dividends. Please remember that money market
fund yields fluctuate.
SCHWAB ADVISOR CASH RESERVES
TICKER SYMBOL
MINIMUM INITIAL INVESTMENT
1
SWEEP
SHARES
PREMIER SWEEP
SHARES
SWQXX
SWZXX
*
*
Seven-Day Yield (with waivers)
0.35%
0.42%
Seven-Day Yield (without waivers)1
0.25%
0.25%
Seven-Day Effective Yield (with waivers)1
0.35%
0.42%
You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The
fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund's liquidity falls below required minimums because of
market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at
any time.
*
Subject to the eligibility terms and conditions of your Schwab account agreement.
1
The Seven-Day Yield (with waivers) is the average income paid out over the previous seven days assuming interest income is not reinvested and it reflects the effect of any
applicable waivers. Absent such waivers, the fund’s yield would have been lower. The Seven-Day Yield (without waivers) is the yield without the effect of any applicable
waivers. The Seven-Day Effective Yield is the yield with waivers assuming that all interest income is reinvested in additional shares of the fund. For additional details, see
financial note 4.
6
Schwab Advisor Cash Reserves | Annual Report
Schwab Advisor Cash Reserves
Fund Expenses (Unaudited)
EXAMPLES FOR A $1,000 INVESTMENT
As a fund shareholder, you may incur two types of
costs: (1) transaction costs, such as redemption fees; and
(2) ongoing costs, including management fees, transfer agent and
shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand
your ongoing cost (in dollars) of investing in the fund and to
compare this cost with the ongoing cost of investing in other
mutual funds. These examples are based on an investment of
$1,000 invested for six months beginning July 1, 2016 and held
through December 31, 2016.
Actual Return lines in the table below provide information about
actual account values and actual expenses. You may use this
information, together with the amount you invested, to estimate
the expenses that you paid over the period. To do so, simply divide
your account value by $1,000 (for example, an $8,600 account
value ÷ $1,000 = 8.6), then multiply the result by the number given
for your fund or share class under the heading entitled “Expenses
Paid During Period.”
Hypothetical Return lines in the table below provide information
about hypothetical account values and hypothetical expenses
based on a fund’s or share class’ actual expense ratio and an
assumed return of 5% per year before expenses. Because the
return used is not an actual return, it may not be used to estimate
the actual ending account value or expenses you paid for the
period.
You may use this information to compare the ongoing costs of
investing in the fund and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to
highlight your ongoing costs only, and do not reflect any
transactional costs, such as redemption fees. Therefore, the
hypothetical return lines of the table are useful in comparing
ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been
higher.
EXPENSE RATIO
(ANNUALIZED)
BEGINNING
ACCOUNT VALUE
AT 7/1/16
ENDING
ACCOUNT VALUE
(NET OF EXPENSES)
AT 12/31/16
EXPENSES PAID
DURING PERIOD2
7/1/16–12/31/16
0.62%
0.62%
$1,000.00
$1,000.00
$1,000.80
$1,021.98
$3.12
$3.15
0.55%
0.55%
$1,000.00
$1,000.00
$1,001.20
$1,022.33
$2.77
$2.80
1
Schwab Advisor Cash Reserves
Sweep Shares
Actual Return
Hypothetical 5% Return
Premier Sweep Shares
Actual Return
Hypothetical 5% Return
1
2
Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. This ratio does
not include certain non-routine expenses.
Expenses for each share class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and
divided by 366 days of the fiscal year.
Schwab Advisor Cash Reserves | Annual Report
7
Schwab Advisor Cash Reserves
Financial Statements
FINANCIAL HIGHLIGHTS
Sweep Shares
Per-Share Data
Net asset value at beginning of period
Income (loss) from investment operations:
Net investment income (loss)
Net realized and unrealized gains (losses)
Total from investment operations
Less distributions:
Distributions from net investment income
Distributions from net realized gains
Total distributions
Net asset value at end of period
Total return
Ratios/Supplemental Data
Ratios to average net assets:
Net operating expenses
Gross operating expenses
Net investment income (loss)
Net assets, end of period (x 1,000,000)
Premier Sweep Shares
Per-Share Data
Net asset value at beginning of period
Income from investment operations:
Net investment income (loss)
Net realized and unrealized gains (losses)
Total from investment operations
Less distributions:
Distributions from net investment income
Distributions from net realized gains
Total distributions
Net asset value at end of period
Total Return
Ratios/Supplemental Data
Ratios to average net assets:
Net operating expenses
Gross operating expenses
Net investment income (loss)
Net assets, end of period (x 1,000,000)
1
2
3
4
1/1/16–
12/31/16
1/1/15–
12/31/15
1/1/14–
12/31/14
1/1/13–
12/31/13
1/1/12–
12/31/12
$1.00
$1.00
$1.00
$1.00
$1.00
0.001,2
0.002
0.002
0.001,2
(0.00)2
0.002
0.002
0.002
0.002
0.002
0.002
0.002
0.002
0.002
0.002
(0.00)2
(0.00)2
(0.00)2
$1.00
0.09%
(0.00)2
—
(0.00)2
$1.00
0.01%
(0.00)2
—
(0.00)2
$1.00
0.01%
(0.00)2
—
(0.00)2
$1.00
0.01%
(0.00)2
—
(0.00)2
$1.00
0.01%
0.59%3
0.72%
0.08%
$4,484
0.28%3
0.72%
0.01%
$5,206
0.21%3
0.72%
0.01%
$6,027
0.25%3
0.72%
0.01%
$6,134
0.28%3,4
0.72%4
0.01%
$6,207
1/1/16–
12/31/16
1/1/15–
12/31/15
1/1/14–
12/31/14
1/1/13–
12/31/13
1/1/12–
12/31/12
$1.00
$1.00
$1.00
$1.00
$1.00
0.001,2
0.002
0.002
0.001,2
(0.00)2
0.002
0.002
0.002
0.002
0.002
0.002
0.002
0.002
0.002
0.002
(0.00)2
(0.00)2
(0.00)2
$1.00
0.13%
(0.00)2
—
(0.00)2
$1.00
0.01%
(0.00)2
—
(0.00)2
$1.00
0.01%
(0.00)2
—
(0.00)2
$1.00
0.01%
(0.00)2
—
(0.00)2
$1.00
0.01%
0.55%3
0.72%
0.11%
$12,338
0.28%3
0.72%
0.01%
$18,223
0.21%3
0.72%
0.01%
$17,952
0.25%3
0.72%
0.01%
$17,525
0.28%3,4
0.72%4
0.01%
$17,575
Calculated based on the average shares outstanding during the period.
Per-share amount was less than $0.005.
Reflects the effect of a voluntary yield waiver in excess of the contractual expense limitation. (See financial note 4)
The ratio of gross operating expenses would have been 0.73%, if the State filing fee reimbursement had not been included. There was no impact on the ratio of net
operating expenses.
8
Schwab Advisor Cash Reserves | Annual Report
See financial notes
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarter of each fiscal year on Form N-Q.
The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference
Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also files
a complete schedule of portfolio holdings with the SEC monthly on Form N-MFP which is available immediately upon filing. The fund
also makes available its complete schedule of portfolio holdings 5 business days after month end on the fund's website at
www.csimfunds.com/schwabfunds_prospectus along with a link to the fund's Form N-MFP filings on the SEC's website.
For fixed-rate obligations and repurchase agreements, the rate shown is the coupon rate (the rate established when the obligation
was issued) and if the coupon rate is not available, the effective yield at the time of purchase is shown. For variable-rate obligations,
the rate shown is the interest rate as of the report date. The date shown in the maturity date column below is either the date on
which the principal amount must be paid or the date payment must be made pursuant to a demand feature. If the security's
structure includes one of a number of maturity-shortening provisions set forth in Rule 2a-7, such as an interest rate reset, demand
feature or put feature, the effective maturity date is also disclosed. If the effective maturity and maturity date are the same, the date
will only appear in the maturity date column.
HOLDINGS BY CATEGORY
COST ($)
VALUE ($)
62.1%
14.3%
23.5%
Fixed-Rate Obligations
Variable-Rate Obligations
Repurchase Agreements
10,452,160,069
2,399,831,118
3,957,005,893
10,452,160,069
2,399,831,118
3,957,005,893
99.9%
0.1%
Total Investments
Other Assets and Liabilities, Net
16,808,997,080
16,808,997,080
13,428,886
100.0%
Net Assets
ISSUER
16,822,425,966
EFFECTIVE
MATURITY
MATURITY
DATE
FACE
AMOUNT ($)
FOOTNOTES
RATE
VALUE ($)
ATLANTIC ASSET SECURITIZATION LLC
a,b
1.06%
03/09/17
28,000,000
27,944,762
BARTON CAPITAL SA
a,b
a,b
0.75%
1.05%
01/09/17
03/06/17
4,500,000
47,000,000
4,499,250
46,912,267
BEDFORD ROW FUNDING CORP
a,b
a,b
1.26%
1.16%
03/20/17
04/05/17
5,000,000
31,000,000
4,986,458
30,906,914
BENNINGTON STARK CAPITAL COMPANY LLC
a,b
a,b
0.85%
1.10%
01/03/17
01/09/17
16,000,000
66,000,000
15,999,244
65,983,867
CAFCO LLC
a,b
a,b
a,b
0.95%
1.00%
1.21%
03/15/17
03/28/17
06/07/17
2,000,000
30,000,000
60,000,000
1,996,147
29,928,333
59,686,000
CHARTA LLC
a,b
a,b
a,b
a,b
0.95%
1.06%
1.21%
1.26%
03/14/17
03/21/17
06/07/17
06/12/17
85,000,000
27,000,000
50,000,000
6,000,000
84,838,500
26,937,195
49,738,333
5,966,250
COLLATERALIZED COMMERCIAL PAPER CO LLC
a
a
1.26%
1.22%
04/12/17
04/26/17
123,000,000
1,000,000
122,568,646
996,135
COLLATERALIZED COMMERCIAL PAPER II CO LLC
a,b
a,b
a,b
a,b
1.00%
1.21%
1.24%
1.31%
03/13/17
04/19/17
04/25/17
06/22/17
100,000,000
4,000,000
59,000,000
5,000,000
99,802,778
3,985,600
58,770,195
4,968,944
CRC FUNDING LLC
a,b
a,b
0.95%
0.95%
03/10/17
03/14/17
5,000,000
30,000,000
4,991,028
29,943,000
FIXED-RATE OBLIGATIONS 62.1% OF NET ASSETS
ASSET-BACKED COMMERCIAL PAPER 13.9%
See financial notes
Schwab Advisor Cash Reserves | Annual Report
9
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
EFFECTIVE
MATURITY
MATURITY
DATE
FACE
AMOUNT ($)
ISSUER
FOOTNOTES
RATE
VALUE ($)
GOTHAM FUNDING CORP
a,b
a,b
0.80%
0.80%
01/06/17
01/09/17
99,085,000
35,000,000
99,073,991
34,993,778
KELLS FUNDING LLC
a,b
a,b
a,b
a,b
a,b
1.04%
1.04%
0.98%
0.98%
1.04%
01/20/17
01/23/17
03/21/17
03/24/17
04/13/17
123,000,000
40,000,000
110,000,000
67,000,000
83,000,000
122,943,147
39,980,356
109,778,411
66,855,913
82,762,620
LMA AMERICAS LLC
a,b
a,b
a,b
1.04%
0.90%
1.08%
02/02/17
02/17/17
03/09/17
122,000,000
39,000,000
3,000,000
121,887,218
38,954,175
2,993,970
MANHATTAN ASSET FUNDING CO LLC
a,b
0.90%
03/01/17
40,000,000
39,941,000
METLIFE SHORT TERM FUNDING LLC
a,b
a,b
a,b
a,b
0.92%
0.97%
0.94%
1.02%
01/03/17
01/24/17
02/13/17
03/20/17
29,000,000
69,000,000
20,000,000
44,000,000
28,998,518
68,957,239
19,977,544
43,902,760
NIEUW AMSTERDAM RECEIVABLES CORP
a,b
a,b
a,b
1.16%
1.23%
0.99%
02/13/17
02/17/17
03/07/17
6,000,000
55,000,000
5,000,000
5,991,758
54,912,397
4,991,062
OLD LINE FUNDING LLC
a,b
0.85%
02/14/17
30,000,000
29,968,833
RIDGEFIELD FUNDING COMPANY LLC
a,b
a,b
1.05%
1.05%
01/03/17
03/06/17
79,000,000
2,000,000
78,995,392
1,996,267
SHEFFIELD RECEIVABLES COMPANY LLC
a,b
a,b
a,b
a,b
a,b
1.07%
0.95%
0.97%
1.05%
1.03%
01/17/17
02/15/17
02/21/17
03/08/17
03/13/17
44,000,000
1,000,000
12,000,000
173,000,000
16,000,000
43,979,076
998,812
11,983,510
172,666,975
15,967,498
THUNDER BAY FUNDING LLC
a,b
0.97%
03/10/17
101,000,000
100,814,946
VERSAILLES COMMERCIAL PAPER LLC
a,b
0.90%
01/17/17
9,000,000
8,996,400
VICTORY RECEIVABLES CORP
a,b
a,b
0.75%
1.00%
01/04/17
01/05/17
20,000,000
79,000,000
19,998,750
78,991,222
2,335,603,384
FINANCIAL COMPANY COMMERCIAL PAPER 4.1%
BPCE SA
b
b
0.88%
0.90%
02/03/17
02/14/17
83,000,000
2,000,000
82,933,047
1,997,800
DNB BANK ASA
b
0.59%
01/10/17
90,000,000
89,986,837
HSBC USA INC
b
b
b
1.24%
1.14%
1.16%
04/06/17
05/01/17
05/15/17
5,000,000
74,000,000
35,000,000
4,983,705
73,721,267
34,850,181
ING US FUNDING LLC
a
1.22%
03/01/17
7,000,000
6,986,119
MACQUARIE BANK LTD
b
1.15%
03/17/17
2,000,000
1,995,208
NATIONWIDE BUILDING SOCIETY
b
b
b
b
0.90%
0.91%
0.93%
0.99%
02/02/17
02/21/17
03/01/17
03/06/17
11,000,000
38,000,000
66,000,000
48,000,000
10,991,200
37,951,012
65,899,405
47,915,520
10
Schwab Advisor Cash Reserves | Annual Report
See financial notes
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
EFFECTIVE
MATURITY
MATURITY
DATE
FACE
AMOUNT ($)
ISSUER
FOOTNOTES
RATE
VALUE ($)
OVERSEA-CHINESE BANKING CORPORATION LTD
b
1.10%
05/15/17
20,000,000
19,918,855
UNITED OVERSEAS BANK LTD
b
b
b
b
0.99%
1.06%
1.22%
1.21%
02/17/17
04/03/17
04/06/17
04/13/17
1,000,000
48,000,000
59,000,000
38,000,000
998,707
47,869,973
58,811,610
37,870,800
WESTPAC BANKING CORP
b
1.06%
04/28/17
58,000,000
57,800,190
683,481,436
CERTIFICATES OF DEPOSIT 36.1%
ABBEY NATIONAL TREASURY SERVICES PLC (STAMFORD BRANCH) a
a
1.00%
0.66%
01/03/17
01/05/17
97,000,000
71,000,000
97,000,000
71,000,000
AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD (LONDON
BRANCH)
1.15%
04/25/17
39,000,000
39,000,000
BANK OF MONTREAL (CHICAGO BRANCH)
0.93%
0.92%
0.90%
1.06%
1.08%
1.11%
02/01/17
02/03/17
02/16/17
03/20/17
03/20/17
04/17/17
53,000,000
48,000,000
58,000,000
31,000,000
9,000,000
66,000,000
53,000,000
48,000,000
58,000,000
31,000,000
9,000,000
66,000,000
BANK OF NOVA SCOTIA (HOUSTON BRANCH)
1.25%
1.24%
03/08/17
07/03/17
120,000,000
50,000,000
120,000,000
50,000,000
BANK OF THE WEST
0.71%
01/05/17
13,000,000
13,000,000
BANK OF TOKYO-MITSUBISHI UFJ LTD (NEW YORK BRANCH)
1.23%
1.22%
1.30%
1.24%
1.27%
1.26%
02/24/17
02/27/17
04/24/17
05/22/17
05/26/17
06/05/17
47,000,000
119,000,000
82,000,000
1,000,000
42,000,000
3,000,000
47,000,000
119,000,000
82,000,000
1,000,000
42,000,000
3,000,000
BARCLAYS BANK PLC (NEW YORK BRANCH)
1.05%
03/16/17
97,000,000
97,000,000
BNP PARIBAS FORTIS SA/NV (NEW YORK BRANCH)
0.96%
0.95%
02/01/17
03/08/17
99,000,000
15,000,000
99,000,000
15,000,000
BNP PARIBAS SA (SAN FRANCISCO BRANCH)
1.23%
1.27%
1.27%
1.27%
02/21/17
03/02/17
03/15/17
03/16/17
8,000,000
63,000,000
15,000,000
60,000,000
8,000,000
63,000,000
15,000,000
60,000,000
CANADIAN IMPERIAL BANK OF COMMERCE (NEW YORK BRANCH)
1.23%
1.07%
02/21/17
05/16/17
170,000,000
113,000,000
170,000,000
113,000,000
CITIBANK NA (NEW YORK BRANCH)
0.90%
1.07%
1.06%
1.12%
1.22%
1.18%
02/21/17
03/22/17
04/12/17
04/28/17
06/05/17
06/06/17
20,000,000
69,000,000
79,000,000
120,000,000
49,000,000
167,000,000
20,000,000
69,000,000
79,000,000
120,000,000
49,000,000
167,000,000
COMMONWEALTH BANK OF AUSTRALIA (LONDON BRANCH)
0.96%
1.16%
01/09/17
03/29/17
180,000,000
65,000,000
180,000,000
65,000,000
See financial notes
Schwab Advisor Cash Reserves | Annual Report
11
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
MATURITY
DATE
FACE
AMOUNT ($)
VALUE ($)
1.16%
1.19%
04/03/17
04/19/17
100,000,000
16,000,000
100,001,270
16,000,238
1.17%
1.18%
02/10/17
02/21/17
154,000,000
184,000,000
154,000,000
184,000,000
0.90%
0.92%
02/17/17
02/21/17
20,000,000
66,000,000
20,000,000
66,000,000
CREDIT SUISSE AG (NEW YORK BRANCH)
1.36%
1.43%
1.51%
05/08/17
05/22/17
06/16/17
15,000,000
30,000,000
93,000,000
15,000,000
30,000,000
93,000,000
DANSKE BANK A/S (LONDON BRANCH)
0.94%
0.96%
03/07/17
03/17/17
91,000,000
73,000,000
91,000,820
73,000,758
0.95%
01/03/17
66,000,000
66,000,000
ING BANK NV (AMSTERDAM BRANCH)
1.24%
1.22%
1.27%
04/04/17
04/05/17
06/14/17
50,000,000
91,000,000
66,000,000
50,000,000
91,000,000
66,000,000
LANDESBANK BADEN-WURTTEMBERG (NEW YORK BRANCH)
0.62%
01/06/17
84,000,000
84,000,000
0.68%
0.93%
01/03/17
01/30/17
78,000,000
58,000,000
78,000,000
58,000,000
0.90%
1.23%
1.12%
1.25%
02/22/17
02/27/17
04/03/17
04/17/17
46,000,000
1,000,000
115,000,000
93,000,000
46,000,000
1,000,000
115,000,000
93,000,000
0.70%
0.90%
0.95%
01/03/17
02/15/17
03/07/17
69,000,000
40,000,000
13,000,000
69,000,000
40,000,000
13,000,000
ROYAL BANK OF CANADA (NEW YORK BRANCH)
1.26%
07/05/17
130,000,000
130,000,000
SUMITOMO MITSUI BANKING CORP (NEW YORK BRANCH)
1.25%
1.25%
02/03/17
04/03/17
180,000,000
24,000,000
180,000,000
24,000,000
SUMITOMO MITSUI TRUST BANK LTD (NEW YORK BRANCH)
0.69%
0.90%
0.90%
0.90%
01/04/17
02/07/17
02/17/17
02/27/17
175,000,000
38,000,000
7,000,000
33,000,000
175,000,000
38,000,000
7,000,000
33,000,000
SWEDBANK AB (NEW YORK BRANCH)
0.55%
01/06/17
252,000,000
252,000,000
TORONTO DOMINION BANK (LONDON BRANCH)
1.16%
1.19%
02/13/17
02/23/17
100,000,000
240,500,000
100,000,594
240,501,759
TORONTO-DOMINION BANK (NEW YORK BRANCH)
1.01%
0.93%
0.95%
0.97%
1.08%
02/13/17
03/01/17
03/13/17
03/17/17
04/07/17
41,000,000
44,000,000
8,000,000
75,000,000
10,000,000
41,000,000
44,000,000
8,000,000
75,000,000
10,000,000
ISSUER
FOOTNOTES
COOPERATIEVE RABOBANK UA (NEW YORK BRANCH)
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK (NEW
YORK BRANCH)
DZ BANK AG DEUTSCHE ZENTRAL GENOSSENSCHAFTSBANK
(NEW YORK BRANCH)
MITSUBISHI UFJ TRUST AND BANKING CORP (NEW YORK
BRANCH)
MIZUHO BANK LTD (NEW YORK BRANCH)
OVERSEA CHINESE BANKING CORPORATION LTD (NEW YORK
BRANCH)
12
Schwab Advisor Cash Reserves | Annual Report
RATE
EFFECTIVE
MATURITY
See financial notes
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
ISSUER
FOOTNOTES
RATE
EFFECTIVE
MATURITY
MATURITY
DATE
FACE
AMOUNT ($)
VALUE ($)
UBS AG (STAMFORD BRANCH)
1.19%
1.27%
02/02/17
03/09/17
172,000,000
80,000,000
172,000,000
80,000,000
WELLS FARGO BANK NA
1.10%
1.09%
05/01/17
05/12/17
246,000,000
117,000,000
246,000,000
117,000,000
WESTPAC BANKING CORP (NEW YORK BRANCH)
1.05%
04/20/17
50,000,000
50,000,000
6,072,505,439
NON-FINANCIAL COMPANY COMMERCIAL PAPER 2.7%
CAISSE DES DEPOTS ET CONSIGNATIONS
b
0.96%
03/02/17
80,000,000
79,872,000
DANAHER CORPORATION
b
0.72%
01/03/17
8,000,000
7,999,680
0.57%
01/09/17
20,000,000
19,997,467
0.64%
0.60%
01/03/17
01/06/17
51,000,000
26,000,000
50,998,187
25,997,833
GENERAL ELECTRIC CO
0.60%
01/04/17
112,000,000
111,994,400
TOYOTA MOTOR CREDIT CORP
1.11%
1.26%
05/31/17
07/10/17
150,000,000
15,500,000
149,312,500
15,397,743
EXXON MOBIL CORP
GE CAPITAL TREASURY SERVICES (US) LLC
a
a
461,569,810
NON-NEGOTIABLE TIME DEPOSITS 4.7%
AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD (CAYMAN
ISLANDS BRANCH)
0.61%
01/06/17
153,000,000
153,000,000
AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD (LONDON
BRANCH)
0.70%
01/04/17
123,000,000
123,000,000
DZ BANK AG DEUTSCHE ZENTRAL GENOSSENSCHAFTSBANK
(NEW YORK BRANCH)
0.51%
01/03/17
100,000,000
100,000,000
NATIONAL AUSTRALIA BANK LTD (CAYMAN ISLANDS BRANCH)
0.51%
01/03/17
211,000,000
211,000,000
NATIONAL BANK OF CANADA (MONTREAL BRANCH)
0.67%
01/03/17
23,000,000
23,000,000
SKANDINAVISKA ENSKILDA BANKEN AB (GRAND CAYMAN
BRANCH)
0.51%
01/03/17
99,000,000
99,000,000
SUNTRUST BANK (CAYMAN ISLANDS BRANCH)
0.53%
01/03/17
84,000,000
84,000,000
793,000,000
OTHER INSTRUMENTS 0.6%
BANK OF AMERICA NA
1.14%
1.08%
04/17/17
05/11/17
41,000,000
65,000,000
41,000,000
65,000,000
106,000,000
TOTAL FIXED-RATE OBLIGATIONS
(COST $10,452,160,069)
See financial notes
10,452,160,069
Schwab Advisor Cash Reserves | Annual Report
13
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
FOOTNOTES
RATE
EFFECTIVE
MATURITY
MATURITY
DATE
BEDFORD ROW FUNDING CORP
a,b
1.12%
01/09/17
04/07/17
25,000,000
25,000,000
OLD LINE FUNDING LLC
a,b
1.22%
01/09/17
02/08/17
50,000,000
50,000,000
ISSUER
FACE
AMOUNT ($)
VALUE ($)
VARIABLE-RATE OBLIGATIONS 14.3% OF NET ASSETS
ASSET-BACKED COMMERCIAL PAPER 0.5%
75,000,000
FINANCIAL COMPANY COMMERCIAL PAPER 0.3%
CANADIAN IMPERIAL BANK OF COMMERCE
b
1.21%
01/27/17
07/27/17
24,000,000
24,000,000
COMMONWEALTH BANK OF AUSTRALIA
b
1.27%
01/10/17
03/10/17
32,000,000
32,000,000
56,000,000
CERTIFICATES OF DEPOSIT 8.6%
BANK OF MONTREAL (CHICAGO BRANCH)
0.96%
01/03/17
06/01/17
146,000,000
146,000,000
BANK OF NOVA SCOTIA (HOUSTON BRANCH)
1.22%
01/10/17
02/10/17
132,000,000
132,000,000
COMMONWEALTH BANK OF AUSTRALIA (LONDON BRANCH)
0.97%
01/03/17
06/01/17
16,000,000
16,000,000
MITSUBISHI UFJ TRUST AND BANKING CORP (NEW YORK
BRANCH)
1.27%
01/09/17
06/08/17
10,000,000
10,000,000
MIZUHO BANK LTD (NEW YORK BRANCH)
1.58%
1.35%
02/17/17
01/23/17
05/17/17
05/22/17
57,000,000
15,000,000
57,056,148
15,000,000
SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK BRANCH)
1.04%
01/04/17
05/04/17
82,000,000
82,000,000
STATE STREET BANK AND TRUST COMPANY
1.31%
01/25/17
198,000,000
198,000,000
SUMITOMO MITSUI BANKING CORP (NEW YORK BRANCH)
1.44%
1.20%
1.34%
01/17/17
01/03/17
01/19/17
02/17/17
05/02/17
06/19/17
6,000,000
39,000,000
143,000,000
6,000,000
39,000,000
143,000,000
TORONTO-DOMINION BANK (NEW YORK BRANCH)
1.17%
01/03/17
02/01/17
82,000,000
82,000,000
WELLS FARGO BANK NA
1.07%
1.30%
01/09/17
01/17/17
05/09/17
10/16/17
15,000,000
210,000,000
15,000,000
210,000,000
WESTPAC BANKING CORP (NEW YORK BRANCH)
1.04%
1.43%
03/06/17
03/27/17
06/05/17
09/27/17
91,000,000
210,000,000
91,000,000
210,000,000
1,452,056,148
U.S. TREASURY DEBT 1.2%
UNITED STATES TREASURY
0.64%
0.72%
01/03/17
01/03/17
01/31/17
10/31/17
85,000,000
120,000,000
84,999,971
119,999,999
204,999,970
VARIABLE RATE DEMAND NOTES 2.9%
BRECKENRIDGE TERRACE, LLC
CO HOUSING FACILITIES REVENUE NOTES SERIES 1999B
(LOC: BANK OF AMERICA NA)
0.86%
01/06/17
1,000,000
1,000,000
CALIFORNIA HEALTH FACILITIES FINANCING AUTH
RB (KAISER PERMANENTE) SERIES 2006C
0.69%
01/06/17
15,000,000
15,000,000
14
Schwab Advisor Cash Reserves | Annual Report
See financial notes
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
ISSUER
FOOTNOTES
RATE
EFFECTIVE
MATURITY
MATURITY
DATE
FACE
AMOUNT ($)
VALUE ($)
CALIFORNIA MUNICIPAL FINANCE AUTH
REFUNDING RB (EXXONMOBIL) SERIES 2007
0.65%
01/03/17
5,105,000
5,105,000
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTH
RB (KAISER PERMANENTE) SERIES 2002B
RB (KAISER PERMANENTE) SERIES 2002E
RB SERIES 2003D
RB SERIES 2008B
0.69%
0.69%
0.68%
0.69%
01/06/17
01/06/17
01/06/17
01/06/17
12,000,000
19,000,000
8,000,000
28,000,000
12,000,000
19,000,000
8,000,000
28,000,000
EAGLE CNTY
RB (TARNES AT BC) SERIES 1999B (LOC: WELLS FARGO BANK
NA)
0.86%
01/06/17
2,410,000
2,410,000
GFRE HOLDINGS, LLC
VARIABLE RATE DEMAND NOTES SERIES 2009A (LOC: FEDERAL
HOME LOAN BANK OF CHICAGO)
0.76%
01/06/17
1,900,000
1,900,000
HOWARD UNIVERSITY
TAXABLE BONDS SERIES 2016 (LOC: BARCLAYS BANK PLC)
0.83%
01/06/17
43,000,000
43,000,000
LINCOLN CNTY
POLLUTION CTRL REFUNDING RB (EXXONMOBIL) SERIES 2014
0.67%
01/03/17
11,000,000
11,000,000
MAINE STATE HOUSING AUTH
TAXABLE RB SERIES 2013G (LIQ: BARCLAYS BANK PLC)
0.83%
01/06/17
10,000,000
10,000,000
NEW YORK CITY
GO BONDS FISCAL 2010 SERIES G4 (LIQ: BARCLAYS BANK PLC)
GO BONDS FISCAL 2014 SERIES D4 (LOC: TD BANK NA)
0.75%
0.73%
01/06/17
01/03/17
18,000,000
18,400,000
18,000,000
18,400,000
NEW YORK STATE HFA
RB (625 W 57TH ST) SERIES 2016A (LOC: BANK OF NEW YORK
MELLON/THE)
0.74%
01/06/17
6,000,000
6,000,000
0.72%
01/06/17
10,000,000
10,000,000
0.72%
01/06/17
10,000,000
10,000,000
b
0.84%
01/06/17
25,000,000
25,000,000
b
0.84%
01/06/17
3,000,000
3,000,000
b
0.86%
01/06/17
7,000,000
7,000,000
b
0.87%
01/06/17
5,200,000
5,200,000
b
0.88%
01/06/17
11,000,000
11,000,000
b
0.87%
01/06/17
18,400,000
18,400,000
b
0.87%
01/06/17
14,000,000
14,000,000
NEW YORK STATE URBAN DEVELOPMENT CORP
STATE PERSONAL INCOME TAX RB SERIES 2004A3C
(LIQ: JPMORGAN CHASE BANK NA)
STATE PERSONAL INCOME TAX RB SERIES 2004A3D
(LIQ: JPMORGAN CHASE BANK NA)
NUVEEN AMT-FREE QUALITY MUNICIPAL INCOME FUND
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 4
(LOC: BARCLAYS BANK PLC)
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 4
(LOC: ROYAL BANK OF CANADA)
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 6
(LOC: CITIBANK NA)
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 8
(LOC: BARCLAYS BANK PLC)
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 1
(LOC: BARCLAYS BANK PLC)
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 1
(LOC: JPMORGAN CHASE BANK NA)
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 2
(LOC: JPMORGAN CHASE BANK NA)
See financial notes
Schwab Advisor Cash Reserves | Annual Report
15
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
EFFECTIVE
MATURITY
MATURITY
DATE
FACE
AMOUNT ($)
ISSUER
FOOTNOTES
RATE
VALUE ($)
NUVEEN ENHANCED AMT-FREE MUNICIPAL CREDIT
OPPORTUNITIES FUND
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 2
(LOC: JPMORGAN CHASE BANK NA)
b
0.82%
01/06/17
36,000,000
36,000,000
NUVEEN QUALITY INCOME MUNICIPAL FUND
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 3
(LOC: BARCLAYS BANK PLC)
b
0.88%
01/06/17
5,000,000
5,000,000
NUVEEN SELECT QUALITY MUNICIPAL FUND
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 2
(LOC: BARCLAYS BANK PLC)
b
0.88%
01/06/17
15,000,000
15,000,000
TENDERFOOT SEASONAL HOUSING, LLC
TAXABLE NOTES SERIES 2000B (LOC: WELLS FARGO BANK NA)
0.86%
01/06/17
2,885,000
2,885,000
TEXAS
GO BONDS SERIES 2016 (LIQ: LANDESBANK HESSEN
THUERINGEN GIROZENTRALE)
0.76%
01/06/17
24,475,000
24,475,000
UNIV HOSPITAL HEALTH SYSTEMS
TAXABLE HOSPITAL RB SERIES 2013C (LOC: BARCLAYS BANK
PLC)
0.75%
01/06/17
30,000,000
30,000,000
UNIV OF TEXAS
FINANCING SYSTEM RB SERIES 2016G1
FINANCING SYSTEM RB SERIES 2016G2
0.68%
0.68%
01/06/17
01/06/17
20,000,000
5,000,000
20,000,000
5,000,000
WESTERN ASSET INTERMEDIATE MUNI FUND
VARIABLE RATE DEMAND PREFERRED STOCK SERIES 1
(LOC: CITIBANK NA)
b
0.86%
01/06/17
6,000,000
6,000,000
WESTERN ASSET MANAGED MUNICIPALS FUND
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 1
(LOC: CITIBANK NA)
b
0.86%
01/06/17
26,000,000
26,000,000
WESTERN ASSET MUNICIPAL PARTNERS FUND
VARIABLE RATE DEMAND PREFERRED SHARES SERIES 1
(LOC: CITIBANK NA)
b
0.86%
01/06/17
4,000,000
4,000,000
476,775,000
OTHER INSTRUMENT 0.8%
BANK OF AMERICA NA
1.06%
01/09/17
05/08/17
135,000,000
TOTAL VARIABLE-RATE OBLIGATIONS
(COST $2,399,831,118)
ISSUER
135,000,000
2,399,831,118
FOOTNOTES
RATE
EFFECTIVE
MATURITY
MATURITY
DATE
MATURITY
AMOUNT ($)
VALUE ($)
REPURCHASE AGREEMENTS 23.5% OF NET ASSETS
U.S. GOVERNMENT AGENCY REPURCHASE AGREEMENTS* 2.5%
BANK OF NOVA SCOTIA
Issued 12/30/16, repurchase date 01/03/17
(Collateralized by U.S. Government Agency Securities
valued at $40,172,232, 2.50% - 4.50%, due 07/01/28 12/01/46)
16
Schwab Advisor Cash Reserves | Annual Report
0.50%
01/03/17
39,002,167
39,000,000
See financial notes
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
MATURITY
DATE
MATURITY
AMOUNT ($)
VALUE ($)
0.50%
01/03/17
145,008,056
145,000,000
DEUTSCHE BANK SECURITIES INC
Issued 12/30/16, repurchase date 01/03/17
(Collateralized by U.S. Treasury Securities valued at
$71,400,035, 1.13%, due 07/31/21)
0.51%
01/03/17
70,003,967
70,000,000
MERRILL LYNCH PIERCE FENNER & SMITH INC
Issued 12/30/16, repurchase date 01/03/17
(Collateralized by U.S. Government Agency Securities
valued at $24,720,000, 3.00%, due 12/15/39 - 11/15/40)
0.50%
01/03/17
24,001,333
24,000,000
0.50%
01/03/17
42,002,333
42,000,000
0.50%
01/03/17
96,005,333
96,000,000
ISSUER
FOOTNOTES
BNP PARIBAS SA
Issued 12/30/16, repurchase date 01/03/17
(Collateralized by U.S. Treasury and U.S. Government
Agency Securities valued at $149,021,107, 0.00% - 8.00%,
due 01/05/17 - 06/01/46)
MIZUHO SECURITIES USA INC
Issued 12/30/16, repurchase date 01/03/17
(Collateralized by U.S. Government Agency Securities
valued at $43,260,001, 3.00% - 3.50%, due 12/01/26 09/01/46)
WELLS FARGO SECURITIES LLC
Issued 12/30/16, repurchase date 01/03/17
(Collateralized by U.S. Government Agency Securities
valued at $99,845,547, 3.00% - 6.50%, due 05/01/18 12/01/45)
RATE
EFFECTIVE
MATURITY
416,000,000
U.S. TREASURY REPURCHASE AGREEMENTS 14.8%
BARCLAYS CAPITAL INC
Issued 12/30/16, repurchase date 01/03/17
(Collateralized by U.S. Treasury Securities valued at
$5,106,097, 0.00% - 1.25%, due 01/05/17 - 10/31/19)
0.50%
01/03/17
5,006,171
5,005,893
FEDERAL RESERVE BANK OF NEW YORK
Issued 12/30/16, repurchase date 01/03/17
(Collateralized by U.S. Treasury Securities valued at
$2,483,137,977, 3.13%, due 05/15/21 - 11/15/41)
0.50%
01/03/17
2,483,137,944
2,483,000,000
2,488,005,893
OTHER REPURCHASE AGREEMENTS** 6.2%
BNP PARIBAS SA
Issued 12/28/16, repurchase date 01/04/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $173,677,688, 2.61% - 7.44%, due 10/17/24 12/24/33)
CREDIT SUISSE SECURITIES (USA) LLC
Issued 12/28/16, repurchase date 01/04/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $49,454,522, 0.15% - 9.68%, due 07/02/26 09/15/40)
See financial notes
a
0.82%
01/04/17
151,024,076
151,000,000
0.86%
01/04/17
43,007,191
43,000,000
Schwab Advisor Cash Reserves | Annual Report
17
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
ISSUER
Issued 09/07/16, repurchase date 03/07/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $372,602,220, 0.16% - 7.42%, due 03/11/21 03/15/59)
JP MORGAN SECURITIES LLC
Issued 11/30/16, repurchase date 05/30/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $74,837,250, 0.00% - 6.50%, due 06/04/17 12/10/49)
Issued 12/20/16, repurchase date 06/19/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $154,162,925, 0.00% - 6.65%, due 08/15/17 12/10/49)
MERRILL LYNCH PIERCE FENNER & SMITH INC
Issued 12/09/16, repurchase date 03/09/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $119,600,000, 0.00%, due 08/03/20 - 11/01/21)
WELLS FARGO SECURITIES LLC
Issued 12/30/16, repurchase date 01/03/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $13,801,242, 3.96% - 17.93%, due 07/26/35 12/25/52)
Issued 12/27/16, repurchase date 01/03/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $97,765,586, 2.70% - 6.13%, due 03/20/22 04/26/55)
Issued 12/28/16, repurchase date 01/04/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $48,307,702, 2.97% - 6.00%, due 09/26/35 09/17/57)
Issued 12/29/16, repurchase date 01/05/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $49,457,885, 3.85% - 5.74%, due 10/20/25 01/17/59)
18
Schwab Advisor Cash Reserves | Annual Report
MATURITY
DATE
MATURITY
AMOUNT ($)
VALUE ($)
1.46%
03/07/17
326,378,340
324,000,000
c
1.40%
03/30/17
65,303,333
65,000,000
c
1.47%
03/30/17
134,547,167
134,000,000
c
1.19%
02/03/17
104,192,516
104,000,000
0.81%
01/03/17
12,001,080
12,000,000
0.82%
01/03/17
85,013,553
85,000,000
0.82%
01/04/17
42,006,697
42,000,000
0.82%
01/05/17
43,006,856
43,000,000
FOOTNOTES
RATE
a,c
EFFECTIVE
MATURITY
See financial notes
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
ISSUER
Issued 11/01/16, repurchase date 05/01/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $5,790,764, 3.60% - 6.49%, due 09/15/23 04/26/55)
Issued 11/22/16, repurchase date 05/22/17
(Collateralized by commons stocks, ETFs, corporate bonds,
ABS, or non-agency collateralized mortgage obligations
valued at $52,127,272, 3.72% - 5.24%, due 12/21/20 01/17/59)
EFFECTIVE
MATURITY
MATURITY
DATE
MATURITY
AMOUNT ($)
FOOTNOTES
RATE
VALUE ($)
c
1.41%
04/04/17
5,030,158
5,000,000
c
1.45%
04/04/17
45,241,063
45,000,000
1,053,000,000
TOTAL REPURCHASE AGREEMENTS
(COST $3,957,005,893)
3,957,005,893
End of Investments.
At 12/31/16, the tax basis cost of the fund's investments was $16,808,997,080.
a Credit-enhanced or liquidity-enhanced.
b Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations,
normally to qualified institutional buyers. At the period end, the value of these amounted to $3,283,005,600 or 19.5% of net assets.
c Illiquid security. At the period end, the value of these amounted to $677,000,000 or 4.0% of net assets.
* Collateralized via U.S. Government Agency Securities or less frequently by higher rated U.S. Treasury Securities.
** Collateralized via common stocks, ETFs, corporate bonds, ABS, or non-agency collateralized mortgage obligations or less frequently by higher rated U.S. Government
Agency Securities and/ or U.S. Treasury Securities.
ABS — Asset-backed securities
AUTH — Authority
BAN — Bond anticipation note
CCD — Community college district
CNTY — County
COP — Certificate of participation
CP — Commercial paper
CSD — Central school district
ETF — Exchange-traded fund
GO — General obligation
GTY — Guaranty agreement
HFA — Housing finance agency/authority
HSD — High school district
IDA — Industrial development agency/authority
IDB — Industrial development bond
IDC — Industrial development corporation
IDRB — Industrial development revenue bond
IRB — Industrial revenue bond
ISD — Independent school district
LIQ — Liquidity agreement
LOC — Letter of credit
LT — Limited tax
M/F — Multi-family
PFC — Passenger facility charge
RAN — Revenue anticipation note
RB — Revenue bond
SD — School district
S/F — Single-family
TAN — Tax anticipation note
TRAN — Tax and revenue anticipation note
UFSD — Union free school district
ULT — Unlimited tax
USD — Unified school district
See financial notes
Schwab Advisor Cash Reserves | Annual Report
19
Schwab Advisor Cash Reserves
Portfolio Holdings as of December 31, 2016 (continued)
At December 31, 2016, all of the fund's investment securities were classified as Level 2. The fund's policy is to recognize transfers
between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and
Level 3 for the period ended December 31, 2016. The breakdown of the fund's investments into major categories is disclosed on the
Portfolio Holdings. (See financial note 2(a) for additional information)
20
Schwab Advisor Cash Reserves | Annual Report
See financial notes
Schwab Advisor Cash Reserves
Statement of Assets and Liabilities
As of December 31, 2016
ASSETS
Investments, at cost and value
Repurchase agreements, at cost and value
Total investments, at cost and value (Note 2a)
Receivables:
Interest
Prepaid expenses
Total assets
+
$12,851,991,187
3,957,005,893
16,808,997,080
+
19,299,559
291,767
16,828,588,406
LIABILITIES
Payables:
Investment adviser and administrator fees
Shareholder service fees
Distributions to shareholders
Accrued expenses
Total liabilities
+
4,434,285
1,026,432
106,479
595,244
6,162,440
NET ASSETS
Total assets
Total liabilities
Net assets
–
Net Assets by Source
Capital received from investors
16,828,588,406
6,162,440
$16,822,425,966
16,822,425,966
Net Asset Value (NAV) by Shares Class
Share Class
Sweep Shares
Premier Sweep Shares
See financial notes
Net Assets
$4,484,483,380
$12,337,942,586
÷
Shares
Outstanding
4,484,140,141
12,336,747,000
=
NAV
$1.00
$1.00
Schwab Advisor Cash Reserves | Annual Report
21
Schwab Advisor Cash Reserves
Statement of Operations
For the period January 1, 2016 through December 31, 2016
INVESTMENT INCOME
Interest
$131,015,300
EXPENSES
Investment adviser and administrator fees
Shareholder service fees:
Sweep Shares
Premier Sweep Shares
Custodian fees
Portfolio accounting fees
Registration fees
Shareholder reports
Professional fees
Transfer agent fees
Independent trustees' fees
Other expenses
Total expenses
Expense reduction by CSIM and its affiliates
Net expenses
Net investment income
61,329,603
+
–
–
18,972,780
60,278,193
525,841
340,602
289,008
143,253
137,392
117,596
104,080
309,222
142,547,570
32,112,174
110,435,396
20,579,904
REALIZED GAINS (LOSSES)
Net realized gains on investments
Increase in net assets resulting from operations
22
Schwab Advisor Cash Reserves | Annual Report
1,669,294
$22,249,198
See financial notes
Schwab Advisor Cash Reserves
Statement of Changes in Net Assets
For the current and prior report periods
OPERATIONS
Net investment income
Net realized gains (losses)
Increase in net assets from operations
1/1/16-12/31/16
$20,579,904
+
1,669,294
22,249,198
1/1/15-12/31/15
$2,186,948
(102,935)
2,084,013
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income
Sweep Shares
Premier Sweep Shares
Total distributions from net investment income
+
(3,759,761)
(16,820,143)
(20,579,904)
(538,737)
(1,648,211)
(2,186,948)
Distributions from net realized gains
Sweep Shares
Premier Sweep Shares
Total distributions from net realized gains
+
(22,279)
(61,288)
(83,567)
—
—
—
(20,663,471)
(2,186,948)
Total distributions
TRANSACTIONS IN FUND SHARES*
Shares Sold
Sweep Shares
Premier Sweep Shares
Total shares sold
+
13,081,303,244
48,870,327,549
61,951,630,793
17,223,019,813
62,893,508,743
80,116,528,556
Shares Reinvested
Sweep Shares
Premier Sweep Shares
Total shares reinvested
+
3,715,910
16,570,953
20,286,863
469,437
1,570,469
2,039,906
Shares Redeemed
Sweep Shares
Premier Sweep Shares
Total shares redeemed
+
(13,806,526,765)
(54,772,836,710)
(68,579,363,475)
(18,044,718,047)
(62,624,204,045)
(80,668,922,092)
(6,607,445,819)
(550,353,630)
23,428,286,058
(6,605,860,092)
$16,822,425,966
23,978,742,623
(550,456,565)
$23,428,286,058
Net transactions in fund shares
NET ASSETS
Beginning of period
Total decrease
End of period
+
* Transactions took place at $1.00 per share; figures for share quantities are the same as for dollars.
See financial notes
Schwab Advisor Cash Reserves | Annual Report
23
Schwab Advisor Cash Reserves
Financial Notes
1. Business Structure of the Fund:
Schwab Advisor Cash Reserves is a series of The Charles Schwab Family of Funds (the trust), a no-load, open-end management
investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the fund
discussed in this report, which is highlighted:
THE CHARLES SCHWAB FAMILY OF FUNDS (ORGANIZED OCTOBER 20, 1989)
Schwab Money Market Fund™
Schwab Government Money Fund™
Schwab U.S. Treasury Money Fund™
Schwab Treasury Obligations Money Fund™
Schwab Value Advantage Money Fund®
Schwab Advisor Cash Reserves
Schwab Cash Reserves™
Schwab Retirement Advantage Money Fund®
Schwab Investor Money Fund®
Schwab Variable Share Price Money Fund™
Schwab Retirement Government Money Fund™
Schwab Municipal Money Fund™
Schwab AMT Tax-Free Money Fund™
Schwab California Municipal Money Fund™
Schwab New York Municipal Money Fund™
Schwab New Jersey Municipal Money Fund™
Schwab Pennsylvania Municipal Money Fund™
Schwab Massachusetts Municipal Money Fund™
Schwab Advisor Cash Reserves offers two share classes: Sweep Shares and Premier Sweep Shares. Shares of each class represent
interest in the same portfolio, but each class has different expenses and investment minimums.
Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of the fund.
Each share has a par value of 1/1,000 of a cent, and the fund's Board of Trustees (the Board) may authorize the issuance of as
many shares as necessary.
The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax
purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the fund uses in its preparation of financial statements. The fund
follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting
Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with
accounting principles generally accepted in the United States of America (GAAP).
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and
valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties
reasonably reflect fair market value. Among other things, these procedures allow the fund to utilize independent pricing services,
quotations from securities and financial instrument dealers and other market sources to determine fair value.
Securities in the fund are valued at amortized cost (which approximates market value) as permitted in accordance with Rule 2a-7 of
the 1940 Act. In the event that security valuations do not approximate market value, securities may be fair valued as determined in
accordance with procedures adopted by the Board. The Pricing Committee considers a number of factors, including unobservable
market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or
comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional
back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and
assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance
that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis
to review fair value determinations made by the fund pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair
value of its investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value.
The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the
valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the
24
Schwab Advisor Cash Reserves | Annual Report
Schwab Advisor Cash Reserves
Financial Notes (continued)
2. Significant Accounting Policies (continued):
categorization is based on the lowest level input that is significant to the valuation. If the fund determines that either the volume
and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price
quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be
required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market
prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities.
• Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds,
credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on
quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs
are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency
securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and
provincial obligations. Securities held by stable NAV money funds operating under Rule 2a-7 of the 1940 Act are valued at
amortized cost which approximates current market value and are considered to be valued using Level 2 inputs.
• Level 3 — significant unobservable inputs (including the fund's own assumptions in determining the fair value of
investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may
trade infrequently or not at all. When observable prices are not available for these securities, the fund uses one or more
valuation techniques for which sufficient and reliable data is available. The inputs used by the fund in estimating the value of
Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets,
completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial
ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of
such discount estimated by the fund in the absence of market information. Assumptions used by the fund due to the lack of
observable inputs may significantly impact the resulting fair value and therefore the fund's results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those
securities.
(b) Accounting Policies for certain Portfolio Investments (if held):
Repurchase Agreements: In a repurchase agreement, a fund buys a security from another party (the counterparty), usually a
financial institution, with the agreement that it be sold back in the future. Repurchase agreements subject a fund to counterparty
risk, meaning that the fund could lose money if the other party fails to perform under the terms of the agreement. The fund
mitigates this risk by ensuring that a fund's repurchase agreements are collateralized by cash and/or U.S. government securities,
fixed income securities, equity securities or other types of securities. These risks are magnified to the extent that a repurchase
agreement is secured by collateral other than cash and U.S. government securities, such as debt securities, equity securities and
high yield securities that are rated below investment grade. All collateral is held by the fund's custodian (or, with multi-party
agreements, the agent's bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under
the agreement. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed or limited and
the value of the collateral may decline. Investments in repurchase agreements are also based on a review of the credit quality of the
repurchase agreement counterparty.
As of December 31, 2016, the fund had investments in repurchase agreements with a gross value of $3,957,005,893 as disclosed in
the Portfolio Holdings and the Statement of Assets and Liabilities. The value of the related collateral disclosed in the Portfolio
Holdings exceeded the value of the repurchase agreements at period end.
Delayed-Delivery Transactions: The fund may buy securities at a predetermined price or yield, with payment and delivery taking
place after the customary settlement period for that type of security. The fund will assume the rights and risks of ownership at the
time of purchase, including the risk of price and yield fluctuations. Typically, no interest will accrue to the fund until the security is
delivered. The fund will earmark or segregate appropriate liquid assets to cover its delayed-delivery purchase obligations, if any.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from
security transactions are based on the identified costs of the securities involved.
Schwab Advisor Cash Reserves | Annual Report
25
Schwab Advisor Cash Reserves
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(d) Investment Income:
Interest income is recorded as it accrues. If the fund buys a debt security at a discount (less than face value) or a premium (more
than face value), it amortizes premiums and accretes discounts from the purchase settlement date up to maturity. The fund then
increases (in the case of discounts) or reduces (in the case of premiums) the income it records from the security. If the security is
callable (meaning that the issuer has the option to pay it off before its maturity date), then the fund amortizes the premium and
accretes discounts to the security’s call date and price, rather than the maturity date and price.
(e) Expenses:
Expenses that are specific to the fund are charged directly to the fund. Expenses that are common to all funds within the trust
generally are allocated among the funds in proportion to their average daily net assets.
For funds offering multiple share classes, the net investment income, other than class specific expenses, and the realized and
unrealized gains or losses, are allocated daily to each class in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The fund declares distributions from net investment income, if any, every day it is open for business. These distributions, which are
substantially equal to the fund's net investment income for that day, are paid out to shareholders once a month. The fund makes
distributions from net realized capital gains, if any, once a year.
(g) Custody Credit:
The fund has an arrangement with its custodian bank, State Street Bank and Trust Company (State Street), under which the fund
may receive a credit for its uninvested cash balance to offset its custody fees and accounting fees. The credit amounts, if any, are
disclosed in the Statement of Operations as a reduction to the fund’s operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in
order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in
the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and
these differences may be material.
(i) Federal Income Taxes:
The fund intends to meet federal income and excise tax requirements for regulated investment companies under subchapter M of
the Internal Revenue Code, as amended. Accordingly, the fund distributes substantially all of its net investment income and net
realized capital gains, if any, to its respective shareholders each year. As long as the fund meets the tax requirements, it is not
required to pay federal income tax.
(j) Indemnification:
Under the fund’s organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the
performance of their duties to the fund. In addition, in the normal course of business the fund enters into contracts with its vendors
and others that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown as this
would involve future claims that may be made against the fund. However, based on experience, the fund expects the risk of loss
attributable to these arrangements to be remote.
3. Risk Factors:
Investment Risk. You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at
$1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon the sale of your shares or may temporarily
suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other
factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect
that the sponsor will provide financial support to the fund at any time.
26
Schwab Advisor Cash Reserves | Annual Report
Schwab Advisor Cash Reserves
Financial Notes (continued)
3. Risk Factors (continued):
Retail Money Market Fund Risk. The fund qualifies as a “retail money market fund,” as such term is defined or interpreted under
the rules governing money market funds. A “retail money market fund” is a money market fund that has policies and procedures
reasonably designed to limit all beneficial owners of the fund to natural persons. Prior to and upon conversion to a “retail money
market fund,” the fund may involuntarily redeem any investor who is not a natural person. The fund will provide advance notice of its
intent to make any such involuntary redemption. Neither the fund nor the investment adviser will be responsible for any loss or tax
liability in an investor’s account resulting from such involuntary redemption. As a “retail money market fund,” the fund will be
permitted to continue to value its securities using the amortized cost method to seek to maintain a stable $1.00 share price. The
fund may be subject to liquidity fees and/or redemption gates on fund redemptions if the fund’s liquidity falls below required
minimums because of market conditions or other factors.
Interest Rate Risk. Interest rates rise and fall over time. As with any investment whose yield reflects current interest rates, the
fund’s yield will change over time. During periods when interest rates are low, the fund’s yield (and total return) also will be low or
may even be negative, which may make it difficult for the fund to pay expenses out of fund assets or maintain a stable $1.00 share
price. Because interest rates in the United States are near historically low levels, a change in a central bank’s monetary policy or
improving economic conditions may result in an increase in interest rates. A sudden or unpredictable rise in interest rates may
cause volatility in the market and may decrease liquidity in the money market securities markets, making it more difficult for the
fund to sell its money market investments at a time when the investment adviser might wish to sell such investments. Decreased
market liquidity also may make it more difficult to value some or all of the fund’s money market securities holdings.
Stable Net Asset Value Risk. If the fund or another money market fund fails to maintain a stable net asset value (or such perception
exists in the market place), the fund could experience increased redemptions, which may adversely impact the fund’s share price.
The fund is permitted, among other things, to reduce or withhold any income and/or gains generated from its portfolio to maintain a
stable $1.00 share price.
Repurchase Agreements Risk. When the fund enters into a repurchase agreement, the fund is exposed to the risk that the other
party (i.e., the counterparty) will not fulfill its contractual obligation. In a repurchase agreement, there exists the risk that, when the
fund buys a security from a counterparty that agrees to repurchase the security at an agreed upon price (usually higher) and time,
the counterparty will not repurchase the security. These risks are magnified to the extent that a repurchase agreement is secured by
collateral other than cash and government securities, such as debt securities, equity securities and high-yield securities that are
rated below investment grade (Alternative Collateral). High-yield securities that are used as Alternative Collateral are subject to
greater levels of credit and liquidity risk, and are considered primarily speculative with respect to the issuer’s continuing ability to
make principal and interest payments. Alternative Collateral may be subject to greater price volatility and may be more volatile or
less liquid than other types of collateral, increasing the risk that the fund will be unable to recover fully in the event of a
counterparty’s default.
Credit Risk. The fund is subject to the risk that a decline in the credit quality of a portfolio investment could cause the fund to lose
money or underperform. The fund could lose money if the issuer of a portfolio investment fails to make timely principal or interest
payments or if a guarantor, liquidity provider or counterparty of a portfolio investment fails to honor its obligations. Even though the
fund's investments in repurchase agreements are collateralized at all times, there is some risk to the fund if the other party should
default on its obligations and the fund is delayed or prevented from recovering or disposing of the collateral. Negative perceptions of
the ability of an issuer, guarantor, liquidity provider or counterparty to make payments or otherwise honor its obligations, as
applicable, could also cause the price of that investment to decline. The credit quality of the fund's portfolio holdings can change
rapidly in certain market environments and any downgrade or default on the part of a single portfolio investment could cause the
fund's share price or yield to fall.
Many of the U.S. government securities that the fund invests in are not backed by the full faith and credit of the U.S. government,
which means they are neither issued nor guaranteed by the U.S. Treasury. Although maintained in conservatorship by the Federal
Housing Finance Agency since September 2008, the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan
Mortgage Corporation (Freddie Mac) maintain only lines of credit with the U.S. Treasury. The Federal Home Loan Banks maintain
limited access to credit lines from the U.S. Treasury. Other securities, such as obligations issued by the Federal Farm Credit Banks
Funding Corporation, are supported solely by the credit of the issuer. There can be no assurance that the U.S. government will
provide financial support to securities of its agencies and instrumentalities if it is not obligated to do so under law. Also, any
government guarantees on securities the fund owns do not extend to the shares of the fund itself.
Credit and Liquidity Enhancements Risk. The fund may invest in securities with credit or liquidity enhancements provided by a
bank or other financial institution, and the existence and nature of such enhancements may be a significant factor in the investment
adviser’s decision-making process. Generally, these enhancements are employed by the issuers of the securities to reduce credit
risk and provide enhanced or back-up liquidity for the purchaser, such as the fund. Adverse developments affecting these banks and
Schwab Advisor Cash Reserves | Annual Report
27
Schwab Advisor Cash Reserves
Financial Notes (continued)
3. Risk Factors (continued):
financial institutions could therefore have a negative effect on the value of the fund’s holdings. For example, a rating agency
downgrade of a credit or liquidity enhancement provider may adversely affect the value of securities held by the fund. Any decline in
the value of the securities held by the fund could cause the fund’s share price or yield to fall. To the extent that a portion of the
fund’s underlying investments are enhanced by the same bank or financial institution, these risks may be increased.
Foreign Investment Risk. Although the fund may invest only in U.S. dollar denominated securities, the fund’s investments in
securities of foreign issuers or securities with credit or liquidity enhancements provided by foreign entities may involve certain risks
that are greater than those associated with investments in securities of U.S. issuers or securities with credit or liquidity
enhancements provided by U.S. entities. These include risks of adverse changes in foreign economic, political, regulatory and other
conditions; the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting
and legal standards and practices; differing securities market structures; and higher transaction costs. In addition, sovereign risk, or
the risk that a government may become unwilling or unable to meet its loan obligations or guarantees, could increase the credit risk
of financial institutions connected to that particular country.
Management Risk. Any actively managed mutual fund is subject to the risk that its investment adviser will select investments or
allocate assets in a manner that could cause the fund to underperform or otherwise not meet its objective. The fund’s investment
adviser applies its own investment techniques and risk analyses in making investment decisions for the fund, but there can be no
guarantee that they will produce the desired results. The investment adviser’s maturity decisions will also affect the fund’s yield, and
could affect its share price. To the extent that the investment adviser anticipates interest rate trends imprecisely, the fund’s yield at
times could lag the yields of other money market funds.
Liquidity Risk. Liquidity risk exists when particular investments are difficult to purchase, sell or value, especially during stressed
market conditions. The market for certain investments may become illiquid due to specific adverse changes in the conditions of a
particular issuer or under adverse market or economic conditions independent of the issuer. In addition, dealer inventories of certain
securities — an indication of the ability of dealers to engage in “market making” — are at, or near, historic lows in relation to market
size, which could potentially lead to decreased liquidity. In such cases, the fund, due to limitations on investments in illiquid
securities and the difficulty in readily purchasing and selling such securities at favorable times or prices, may decline in value,
experience lower returns and/or be unable to achieve its desired level of exposure to a certain issuer or sector. Further, transactions
in illiquid securities may entail transaction costs that are higher than those for transactions in liquid securities.
Redemption Risk. The fund may experience periods of heavy redemptions that could cause the fund to liquidate its assets at
inopportune times or at a loss or depressed value, particularly during periods of declining or illiquid markets. Redemptions by a few
large investors in the fund may have a significant adverse effect on the fund’s ability to maintain a stable $1.00 share price. In the
event any money market fund fails to maintain a stable net asset value, other money market funds, including the fund, could face a
market-wide risk of increased redemption pressures, potentially jeopardizing the stability of their $1.00 share prices.
Money Market Fund Risk. The fund is not designed to offer capital appreciation. In exchange for their emphasis on stability and
liquidity, money market investments may offer lower long-term performance than stock or bond investments.
Please refer to the fund’s prospectus for a more complete description of the principal risks of investing in the fund.
4. Affiliates and Affiliated Transactions:
Charles Schwab Investment Management, Inc. (CSIM or the investment adviser), a wholly owned subsidiary of The Charles Schwab
Corporation, serves as the fund's investment adviser and administrator pursuant to an Investment Advisory and Administration
Agreement between CSIM and the trust.
For its advisory and administrative services to the fund, CSIM is entitled to receive an annual fee, payable monthly, based on a
percentage of the fund’s average daily net assets as follows:
AVERAGE DAILY NET ASSETS
First $1 billion
More than $1 billion but not exceeding $10 billion
More than $10 billion but not exceeding $20 billion
More than $20 billion but not exceeding $40 billion
Over $40 billion
28
Schwab Advisor Cash Reserves | Annual Report
0.35%
0.32%
0.30%
0.27%
0.25%
Schwab Advisor Cash Reserves
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
For the period ended December 31, 2016, the aggregate advisory fee paid to CSIM by the fund was 0.31%, as a percentage of the
fund's average daily net assets.
The Board has adopted a Shareholder Servicing and Sweep Administration Plan (the Plan) on behalf of the fund. The Plan enables
the fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (a broker-dealer
affiliate of CSIM, Schwab) (together, service providers), of certain account maintenance, customer liaison and shareholder services
to the current shareholders of the fund. The Plan also enables the fund to pay Schwab for certain sweep administration services,
such as processing of automatic purchases and redemptions it provides to fund shareholders invested in the fund.
Pursuant to the Plan, the fund’s shares are subject to an annual shareholder servicing fee of up to 0.25%. The shareholder servicing
fee paid to a particular service provider is made pursuant to its written agreement with Schwab as distributor of the fund (or, in the
case of payments made to Schwab acting as a service provider, pursuant to Schwab's written agreement with the fund), and the
fund will pay no more than 0.25% of the average annual daily net asset value of the fund shares owned by shareholders holding
shares through such service providers. Pursuant to the Plan, the fund’s shares are subject to an annual sweep administration fee of
up to 0.15%. The sweep administration fee paid to Schwab is based on the average daily net asset value of the fund's shares owned
by shareholders holding shares through Schwab. Payments under the Plan are made as described above without regard to whether
the fee is more or less than the service provider's actual cost of providing the services, and if more, such excess may be retained as
profit by the service provider.
Contractual Expense Limitation
CSIM and its affiliates have made an additional agreement with the fund, for so long as CSIM serves as the investment adviser to the
fund, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses
charged, excluding interest, taxes and certain non-routine expenses (expense limitation), as follows:
Sweep Shares
Premier Sweep Shares
0.66%
0.59%
In addition, effective January 1, 2016 through December 31, 2016, CSIM and its affiliates agreed to waive an additional amount of
the fund's expenses equal to 0.035% of the fund's average daily net assets.
During the period ended December 31, 2016, the fund waived $32,112,174 in expenses of which $29,266,414 was waived in
accordance with the contractual expense limitation agreement noted above.
Voluntary Yield Waiver/Reimbursement
CSIM and its affiliates also may waive and/or reimburse expenses to the extent necessary to maintain a positive net yield for each
share class of the fund.
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (SEC), the fund may enter into interfund
borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All
loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase
agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and
equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the
Board. The fund had no interfund borrowing or lending activity during the period.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage
of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout
the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested
persons (independent trustees), as noted on the fund’s Statement of Operations. For information regarding the trustees, please
refer to the Trustees and Officers table at the end of this report.
Schwab Advisor Cash Reserves | Annual Report
29
Schwab Advisor Cash Reserves
Financial Notes (continued)
6. Borrowing from Banks:
During the period, the fund was a participant with other U.S. registered investment companies managed by CSIM in a joint,
syndicated, committed $530 million line of credit (the Credit Facility), which matured on October 6, 2016. Under the terms of the
Credit Facility, in addition to the interest charged on any borrowings by a fund, the fund paid a commitment fee of 0.125% per
annum on its proportionate share of the unused portion of the Credit Facility. On October 6, 2016, the Credit Facility was amended
to run for a new 364 day period with an increased line of $555 million and a commitment fee of 0.15% per annum. There were no
borrowings from the line of credit during the period.
The fund also has access to custodian overdraft facilities. The fund may have utilized the overdraft facility and incurred an interest
expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated
rate above the current Federal Funds Rate.
7. Federal Income Taxes:
As of December 31, 2016, the fund had no undistributed earnings on a tax basis.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of December 31,
2016, the fund had no capital loss carryforwards.
For tax purposes, net realized capital losses and late-year ordinary losses incurred after October 31 may be deferred and treated as
occurring on the first day of the following fiscal year. For the year ended December 31, 2016, the fund had no capital losses deferred
and had $1,457,155 capital loss carryforwards utilized.
The tax-basis components of distributions paid during the current and prior fiscal years were as follows:
Current period distributions
Ordinary income
Prior period distributions
Ordinary income
$20,663,471
$2,186,948
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may
differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing
character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in
reclassification among certain capital accounts on the financial statements. The fund may also designate a portion of the amount
paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The
adjustments will have no impact on net assets or the results of operations. As of December 31, 2016, the fund made the following
reclassifications:
Capital shares
Net realized capital gains and losses
$128,572
(128,572)
As of December 31, 2016, management has reviewed the tax positions for open periods (for federal purposes, three years from the
date of filing and for state purposes, four years from the date of filing) as applicable to the fund, and has determined that no
provision for income tax is required in the fund’s financial statements. The fund recognizes interest and penalties, if any, related to
unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended December 31, 2016, the
fund did not incur any interest or penalties.
8. Recent Regulatory Development:
In October 2016, the SEC adopted new rules and amended existing rules (together, final rules) intended to modernize the reporting
and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require
standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments.
The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that
the adoption of the amendments to Regulation S-X will have on the fund's financial statements and related disclosures.
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Schwab Advisor Cash Reserves | Annual Report
Schwab Advisor Cash Reserves
Financial Notes (continued)
9. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued
that would have materially impacted the financial statements as presented.
Schwab Advisor Cash Reserves | Annual Report
31
Schwab Advisor Cash Reserves
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Advisor Cash Reserves
In our opinion, the accompanying statement of assets and liabilities, including the portfolio
holdings, and the related statements of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the financial position of Schwab
Advisor Cash Reserves (one of the funds constituting The Charles Schwab Family of Funds,
hereafter referred to as the “Fund”) at December 31, 2016, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the period then
ended and the financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States of America.
These financial statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our audits of
these financial statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of securities at
December 31, 2016 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
February 16, 2017
32
Schwab Advisor Cash Reserves | Annual Report
Schwab Advisor Cash Reserves
Trustees and Officers
The tables below give information about the trustees and officers of The Charles Schwab Family of Funds, which includes the fund
covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab
Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 110 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the
trustees and officers in the fund's Statement of Additional Information, which is available free by calling 1-877-824-5615.
INDEPENDENT TRUSTEES
NAME, YEAR OF BIRTH, AND
POSITION(S) WITH THE TRUST
(TERMS OF OFFICE, AND
LENGTH OF TIME SERVED1)
PRINCIPAL OCCUPATIONS
DURING THE PAST FIVE YEARS
Retired/Private Investor (Jan. 2009 – present). Formerly,
Robert W. Burns
Managing Director, Pacific Investment Management
1959
Company, LLC (PIMCO) and President, PIMCO Funds.
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)
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
OVERSEEN BY
THE TRUSTEE
OTHER DIRECTORSHIPS
110
Director, PS Business Parks, Inc.
(2005 – 2012)
John F. Cogan
1947
Trustee
(Trustee of The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust and
Schwab Annuity Portfolios
since 2008; Laudus Trust
since 2010; Schwab
Strategic Trust since 2016)
Senior Fellow, The Hoover Institution at Stanford University
(Oct. 1979 – present); Senior Fellow, Stanford Institute for
Economic Policy Research (2000 – present); Professor of
Public Policy, Stanford University (1994 – 2015).
110
Director, Gilead Sciences, Inc.
(2005 – present)
Stephen Timothy Kochis
1946
Trustee
(Trustee of Schwab Strategic
Trust since 2012; The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust,
Schwab Annuity Portfolios
and Laudus Trust since 2016)
CEO and Owner, Kochis Global (wealth management
consulting) (May 2012 – present); Chairman and CEO,
Aspiriant, LLC (wealth management)
(Jan. 2008 – Apr. 2012).
110
None
110
Director, Symantec Corporation
(2003 – present)
Director, Corcept Therapeutics Incorporated
(2004 – present)
Director, Adamas Pharmaceuticals, Inc.
(2009 – present)
Private Investor.
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)
Schwab Advisor Cash Reserves | Annual Report
33
Schwab Advisor Cash Reserves
INDEPENDENT TRUSTEES (CONTINUED)
NAME, YEAR OF BIRTH, AND
POSITION(S) WITH THE TRUST
(TERMS OF OFFICE, AND
LENGTH OF TIME SERVED1)
PRINCIPAL OCCUPATIONS
DURING THE PAST FIVE YEARS
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
OVERSEEN BY
THE TRUSTEE
OTHER DIRECTORSHIPS
Kiran M. Patel
1948
Trustee
(Trustee of The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust,
Schwab Annuity Portfolios
and Laudus Trust since 2011;
Schwab Strategic Trust since
2016)
Retired. Executive Vice President and General Manager of
Small Business Group, Intuit, Inc. (financial software and
services firm for consumers and small businesses)
(Dec. 2008 – Sept. 2013).
110
Director, KLA-Tencor Corporation
(2008 – present)
Kimberly S. Patmore
1956
Trustee
(Trustee of The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust,
Schwab Annuity Portfolios,
Schwab Strategic Trust and
Laudus Trust since 2016)
Consultant, Patmore Management Consulting (management
consulting) (2008 – present).
110
None
Charles A. Ruffel
1956
Trustee
(Trustee of Schwab Strategic
Trust since 2009; The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust,
Schwab Annuity Portfolios
and Laudus Trust since 2015)
Co-Chief Executive Officer, Kudu Investment Management,
LLC (financial services) (Jan. 2015 – present); Partner, Kudu
Advisors, LLC (financial services) (June 2008 – Jan. 2015);
Advisor, Asset International, Inc. (publisher of financial
services information) (Aug. 2008 – Jan. 2015).
110
None
Gerald B. Smith
1950
Trustee
(Trustee of The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust and
Schwab Annuity Portfolios
since 2000; Laudus Trust
since 2010; Schwab
Strategic Trust since 2016)
Chairman, Chief Executive Officer and Founder of Smith
Graham & Co. (investment advisors) (Mar. 1990 – present).
110
Director, Eaton (2012 – present)
Director and Chairman of the Audit
Committee, Oneok Partners LP
(2003 – 2013)
Director, Oneok, Inc. (2009 – 2013)
Lead Independent Director, Board of Cooper
Industries (2002 – 2012)
Joseph H. Wender
1944
Trustee
(Trustee of The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust and
Schwab Annuity Portfolios
since 2008; Laudus Trust
since 2010; Schwab
Strategic Trust since 2016)
Senior Consultant, Goldman Sachs & Co., Inc. (investment
banking and securities firm) (Jan. 2008 – present); Partner,
Colgin Partners, LLC (vineyards) (Feb. 1998 – present).
110
Board Member and Chairman of the Audit
Committee, Ionis Pharmaceuticals
(1994 – present)
Lead Independent Director and Chair of
Audit Committee, OUTFRONT Media Inc.
(2014 – present)
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Schwab Advisor Cash Reserves | Annual Report
Schwab Advisor Cash Reserves
INTERESTED TRUSTEES
NAME, YEAR OF BIRTH, AND
POSITION(S) WITH THE TRUST
(TERMS OF OFFICE, AND
LENGTH OF TIME SERVED1)
2
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
OVERSEEN BY
THE TRUSTEE
PRINCIPAL OCCUPATIONS
DURING THE PAST FIVE YEARS
OTHER DIRECTORSHIPS
Walter W. Bettinger II
1960
Chairman and Trustee
(Trustee of The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust and
Schwab Annuity Portfolios
since 2008; Schwab
Strategic Trust since 2009;
Laudus Trust since 2010)
Director, President and Chief Executive Officer, The Charles
Schwab Corporation (Oct. 2008 – present); President and
Chief Executive Officer (Oct. 2008 – present), Director
(May 2008 – present), Charles Schwab & Co., Inc.; Director,
Charles Schwab Bank (Apr. 2006 – present); Director,
Schwab Holdings, Inc. (May 2008 – present); and Director,
Charles Schwab Investment Management, Inc.
(July 2016 – present).
110
Director, The Charles Schwab Corporation
(2008 – present)
Marie A. Chandoha2
1961
Trustee
(Trustee of The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust,
Schwab Annuity Portfolios,
Schwab Strategic Trust and
Laudus Trust since 2016)
Director, President and Chief Executive Officer
(Dec. 2010 – present), Chief Investment Officer
(Sept. 2010 – Oct. 2011), Charles Schwab Investment
Management, Inc.; Trustee (Jan. 2016 – present), President,
Chief Executive Officer (Dec. 2010 – present), and Chief
Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds,
Laudus Funds and Schwab ETFs; Director, Charles Schwab
Worldwide Funds plc and Charles Schwab Asset
Management (Ireland) Limited (Jan. 2011 – present); Global
Head of Fixed Income Business Division, BlackRock, Inc.
(formerly Barclays Global Investors)
(Mar. 2007 – Aug. 2010).
110
None
Joseph R. Martinetto2
1962
Trustee
(Trustee of The Charles
Schwab Family of Funds,
Schwab Investments,
Schwab Capital Trust,
Schwab Annuity Portfolios,
Schwab Strategic Trust and
Laudus Trust since 2016)
Senior Executive Vice President and Chief Financial Officer,
The Charles Schwab Corporation and Charles Schwab &
Co., Inc. (July 2015 – present); Executive Vice President and
Chief Financial Officer of The Charles Schwab Corporation
and Charles Schwab & Co., Inc. (May 2007 – July 2015);
Director, Charles Schwab & Co., Inc. (May 2007 – present);
Director (Apr. 2010 – present) and Chief Executive Officer
(July 2013 – Apr. 2015), Charles Schwab Bank; Director,
Executive Vice President and Chief Financial Officer
(May 2007 – present), Senior Executive Vice President
(Feb. 2016 – present), and Executive Vice President (May
2007 - Feb. 2016), Schwab Holdings, Inc.
110
None
OFFICERS OF THE TRUST
NAME, YEAR OF BIRTH, AND POSITION(S) WITH THE TRUST
(TERMS OF OFFICE, AND LENGTH OF TIME SERVED3)
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS
Marie A. Chandoha
1961
President and Chief Executive Officer
(Officer of The Charles Schwab Family of Funds, Schwab
Investments, Schwab Capital Trust, Schwab Annuity
Portfolios, Schwab Strategic Trust and Laudus Trust since
2010)
Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment
Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee
(Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief
Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs;
Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management
(Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division,
BlackRock, Inc. (formerly Barclays Global Investors) (Mar. 2007 – Aug. 2010).
Mark Fischer
1970
Treasurer and Chief Financial Officer
(Officer of The Charles Schwab Family of Funds, Schwab
Investments, Schwab Capital Trust, Schwab Annuity
Portfolios, Schwab Strategic Trust and Laudus Trust since
2013)
Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs
(Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds
(Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles
Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan
Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial
Service Investment Management (May 2005 – Mar. 2011).
Schwab Advisor Cash Reserves | Annual Report
35
Schwab Advisor Cash Reserves
OFFICERS OF THE TRUST (CONTINUED)
NAME, YEAR OF BIRTH, AND POSITION(S) WITH THE TRUST
(TERMS OF OFFICE, AND LENGTH OF TIME SERVED3)
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS
George Pereira
1964
Senior Vice President and Chief Operating Officer
(Officer of The Charles Schwab Family of Funds, Schwab
Investments, Schwab Capital Trust and Schwab Annuity
Portfolios since 2004; Laudus Trust since 2006; Schwab
Strategic Trust since 2009)
Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating
Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice
President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial
Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer,
Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director,
Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland)
Limited (Apr. 2005 – present).
Omar Aguilar
1970
Senior Vice President and Chief Investment Officer – Equities
and Multi-Asset Strategies
(Officer of The Charles Schwab Family of Funds, Schwab
Investments, Schwab Capital Trust, Schwab Annuity
Portfolios, Schwab Strategic Trust and Laudus Trust since
2011)
Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies,
Charles Schwab Investment Management, Inc. (Apr. 2011 – present); Senior Vice President
and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs
(June 2011 – present); Head of the Portfolio Management Group and Vice President of
Portfolio Management, Financial Engines, Inc. (May 2009 – Apr. 2011); Head of Quantitative
Equity, ING Investment Management (July 2004 – Jan. 2009).
Brett Wander
1961
Senior Vice President and Chief Investment Officer – Fixed
Income
(Officer of The Charles Schwab Family of Funds, Schwab
Investments, Schwab Capital Trust, Schwab Annuity
Portfolios, Schwab Strategic Trust and Laudus Trust since
2011)
Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab
Investment Management, Inc. (Apr. 2011 – present); Senior Vice President and Chief
Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs
(June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income
Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies
Loomis, Sayles & Company (Apr. 2006 – Jan. 2008).
David Lekich
1964
Chief Legal Officer and Secretary, Schwab Funds and
Schwab ETFs
Vice President and Assistant Clerk, Laudus Funds
(Officer of The Charles Schwab Family of Funds, Schwab
Investments, Schwab Capital Trust, Schwab Annuity
Portfolios, Schwab Strategic Trust and Laudus Trust since
2011)
Senior Vice President (Sept. 2011 – present), Vice President (Mar. 2004 – Sept. 2011),
Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present),
Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.;
Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds;
Vice President and Assistant Clerk, Laudus Funds (Apr. 2011 – present); Secretary
(May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs.
Catherine MacGregor
1964
Vice President and Assistant Secretary, Schwab Funds and
Schwab ETFs
Chief Legal Officer, Vice President and Clerk, Laudus Funds
(Officer of The Charles Schwab Family of Funds, Schwab
Investments, Schwab Capital Trust, Schwab Annuity
Portfolios and Laudus Trust since 2005; Schwab Strategic
Trust since 2009)
Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc.
(July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk
(Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant
Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary,
Schwab ETFs (Oct. 2009 – present).
1
2
3
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.
Mr. Bettinger, Ms. Chandoha, and Mr. Martinetto are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment
adviser.
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.
36
Schwab Advisor Cash Reserves | Annual Report
Schwab Advisor Cash Reserves
Glossary
144A securities These securities may be sold only to qualified
institutional buyers under Securities Act Rule 144A.
agency discount notes Notes issued by federal agencies—known as
Government Sponsored Enterprises, or GSEs—at a discount to their
value at maturity. An agency discount note is a short-term investment
offering a high degree of credit quality.
asset-backed commercial paper A short-term investment that is
typically issued by a bank or other financial institution. The notes
represent an interest in financial assets such as trade receivables,
credit card receivables, auto receivables, etc. and are generally used for
the short-term financing needs of companies.
capital gain, capital loss The difference between the amount paid for
an investment and its value at a later time. If the investment has been
sold, the capital gain or loss is considered a realized gain or loss. If the
investment is still held, the gain or loss is still “on paper” and is
considered unrealized.
collateralized mortgage obligation (CMO) A type of security that is
collateralized by pools of mortgages backed by government agencies or
private issuers (non-agency). The streams of principal and interest
payments on the mortgages are distributed to the different classes of
CMO interests, known as tranches. Each tranche may have different
principal balances, coupon rates, prepayment risks, and maturity dates.
commercial paper Promissory notes issued by banks, corporations
and other entities to finance short-term credit needs. These securities
generally are structured on a discounted basis but sometimes may be
interest-bearing notes. Commercial paper, which may be unsecured, is
subject to credit risk.
corporate note An unsecured debt security issued by a corporation
that is subject to the credit risk of the issuer.
credit-enhanced securities Securities that are backed by the credit of
an entity other than the issuer (such as a financial institution). Credit
enhancements, which can equal up to 100% of the security’s value, are
designed to help lower the risk of default on a security and may also
make the security more liquid.
credit quality The capacity of an issuer to make its interest and
principal payments. Federal regulations strictly regulate the credit
quality of the securities a money market fund can buy.
credit ratings Debt issuers, including corporations, states and
municipalities, may arrange with a recognized independent rating
organization, such as Standard & Poor’s, Fitch, Inc., Moody’s Investor
Service, and DBRS, to rate their creditworthiness and/or the
creditworthiness of their debt issues. For example, an issuer may
obtain a long-term rating within the investment grade rating category,
which is, from high to low, AAA, AA, A and BBB for Standard & Poor’s,
Fitch, and DBRS; and Aaa, Aa, A and Baa for Moody’s.
credit risk The risk that a debt issuer may be unable to pay interest or
repay principal to its debt holders.
dollar-weighted average maturity See weighted average maturity.
effective yield A measurement of a fund’s yield that assumes that all
interest income is reinvested in additional shares of the fund.
exchange-traded fund (ETF) An investment fund that tracks an index,
a commodity or a basket of assets, and trades on an exchange.
expense ratio The amount that is taken from a mutual fund’s assets
each year to cover the fund’s operating expenses. An expense ratio of
0.50% means that a fund’s expenses amount to half of one percent of
its average net assets a year.
face value The value of a bond, note, mortgage or other security as
given on the certificate or instrument. Face value is also referred to as
par value or nominal value.
illiquid securities Securities are generally considered illiquid if they
cannot be disposed of promptly (typically within seven days) and in the
ordinary course of business at approximately the amount at which a
fund has valued the instruments.
interest Payments to holders of debt securities as compensation for
loaning a security’s principal to the issuer.
liquidity-enhanced security The security’s structure includes a
liquidity arrangement that requires an entity other than the issuer (such
as a large financial institution) to provide funds to pay a tender under
most circumstances. Liquidity enhancements are often used on
variable-rate securities where the portfolio manager has an option to
tender the securities for repayment within a specified time period
(usually one day or one week) at any time prior to their final maturity.
maturity The date a debt security is scheduled to be “retired” and its
principal amount repaid. The Maturity of an investment will generally
reflect the security’s final maturity date unless the security’s structure
includes a maturity-shortening provision such as an interest rate reset,
demand feature or put feature (the “Effective Maturity Date”). For those
securities with a maturity-shortening provision, including variable-rate
demand securities, the Maturity is determined by using the Effective
Maturity Date, as permitted by Rule 2a-7.
municipal securities Debt securities issued by a state, its counties,
municipalities, authorities and other subdivisions, or the territories and
possessions of the United States and the District of Columbia, including
their subdivisions, agencies and instrumentalities and corporations.
These securities may be issued to obtain money for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, public utilities, schools, streets, and water and sewer
works.
net asset value per share (NAV) The value of one share of a mutual
fund. NAV is calculated by taking the fund’s total assets, subtracting
liabilities, and dividing by the number of shares outstanding. Certain
money funds seek to maintain a steady NAV of $1.00.
outstanding shares, shares outstanding When speaking of a company
or mutual fund, indicates all shares currently held by investors.
repurchase agreement (also known as a “repo”) The sale of a security
combined with a simultaneous agreement to repurchase it at a
predetermined date and price.
restricted securities Securities that are subject to contractual
restrictions on resale. These securities are often purchased in private
placement transactions.
total return The percentage that an investor would have earned or lost
on an investment in the fund assuming dividends and distributions
were reinvested.
Schwab Advisor Cash Reserves | Annual Report
37
Schwab Advisor Cash Reserves
variable rate demand obligations (VRDOs) Securities that have long
maturities but which, because of their structure, require them to repay
principal plus accrued interest within a specified timeframe (usually one
or seven days) upon the demand of the bond holder. Depending on
their structure, the repayment may be made by the bond issuer or by a
financial institution, such as a highly rated bank.
weighted average life (WAL) For money market mutual funds as per
rule 2a-7, the weighted average life calculation takes into account
either the final maturity date for each security held in the portfolio or,
when relevant, the date of the next demand feature (when the fund is
scheduled to receive payment of principal and interest after a demand).
Money funds are required to maintain a weighted average life of no
more than 120 days. Weighted average life for all Schwab money
market funds is available in each fund’s monthly schedule of portfolio
holdings at www.schwabfunds.com/prospectus and also available in
each fund’s Form N-MFP on the SEC’s website at www.sec.gov
immediately upon filing.
38
Schwab Advisor Cash Reserves | Annual Report
weighted average maturity (WAM) For money market mutual funds as
per rule 2a-7, the maturity date or Effective Maturity Date (see
definition of maturity) of all the debt securities in its portfolio, or the
date the interest rate on those securities is reset, or the date those
securities can be redeemed through demand, calculated as a weighted
average. As a rule, the longer a fund’s weighted average maturity, the
greater its interest rate risk. Money funds are required to maintain a
weighted average maturity of no more than 60 days.
yield The income paid out by an investment, expressed as a
percentage of the investment’s market value.
Schwab Advisor Cash Reserves
PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to
anyone, for any reason.
We are committed to protecting the privacy of information we
maintain about you. Below are details about our commitment,
including the types of information we collect and how we use
and share that information. This Privacy Notice applies to you
only if you are an individual who invests directly in the funds by
placing orders through the funds’ transfer agent. If you place
orders through your brokerage account at Charles Schwab &
Co., Inc. or an account with another broker-dealer, investment
advisor, 401(k) plan, employee benefit plan, administrator, bank
or other financial intermediary, you are covered by the privacy
policies of that financial institution and should consult those
policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• APPLICATION AND REGISTRATION
INFORMATION.
We collect personal information from you when you open an
account or utilize one of our services. We may also collect
information about you from third parties such as consumer
reporting agencies to verify your identity. The information we
collect may include personal information, including your Social
Security number, as well as details about your interests,
investments and investment experience.
• TRANSACTION AND EXPERIENCE
INFORMATION.
Once your account has been opened, we collect and maintain
personal information about your account activity, including your
transactions, balances, positions and history. This information
allows us to administer your account and provide the services
you have requested.
• WEBSITE USAGE.
When you visit our websites, we may use devices known as
“cookies,” graphic interchange format files (GIFs), or other
similar web tools to enhance your web experience. These tools
help us to recognize you, maintain your web session, and
provide a more personalized experience. To learn more, please
go to www.schwab.com/privacy.
How We Share and Use Your Information
We provide access to information about you to our affiliated
companies, outside companies and other third parties in
certain limited circumstances, including:
• to help us process transactions for your account;
• when we use other companies to provide services for us,
such as printing and mailing your account statements;
• when we believe that disclosure is required or permitted
under law (for example, to cooperate with regulators or law
enforcement, resolve consumer disputes, perform
credit/authentication checks, or for risk control).
State Laws
We will comply with state laws that apply to the disclosure or
use of information about you.
Safeguarding Your Information — Security Is a Partnership
We take precautions to ensure the information we collect about
you is protected and is accessed only by authorized individuals
or organizations.
Companies we use to provide support services are not allowed
to use information about our shareholders for their own
purposes and are contractually obligated to maintain strict
confidentiality. We limit their use of information to the
performance of the specific services we have requested.
We restrict access to personal information by our employees
and agents. Our employees are trained about privacy and are
required to safeguard personal information.
We maintain physical, electronic and procedural safeguards
that comply with federal standards to guard your nonpublic
personal information.
Contact Us
To provide us with updated information, report suspected fraud
or identity theft, or for any other questions, please call the
number below.
Schwab Funds® direct investors: 1-800-407-0256
© 2016 Schwab Funds. All rights reserved.
Schwab Advisor Cash Reserves | Annual Report
39
Schwab Advisor Cash Reserves
Our straightforward approach sets us apart.
As one of the nation’s largest asset managers, our goal is to provide investors with a diverse selection of foundational products that aim to
deliver consistent performance at a competitive cost. The list below shows all currently available Schwab Funds.
An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or
sending money. This and other important information can be found in the fund’s prospectus, or if available, the summary
prospectus. Please call 1-877-824-5615 for a prospectus and brochure for any Schwab Fund. Please read the
prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without
charge, upon request, by visiting the Schwab Funds’ website at www.csimfunds.com/schwabfunds_prospectus, the SEC’s website at
www.sec.gov, or by contacting Schwab Funds at 1-877-824-5615.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is
available, without charge, by visiting the fund’s website at www.csimfunds.com/schwabfunds_prospectus or the SEC’s website at
www.sec.gov.
The Schwab Funds Family®
Stock Funds
Bond Funds
Schwab Core Equity Fund™
Schwab Dividend Equity Fund™
Schwab Large-Cap Growth Fund™
Schwab Small-Cap Equity Fund™
Schwab Hedged Equity Fund™
Schwab Health Care Fund™
Schwab® International Core Equity Fund
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small Company Index Fund
Schwab Fundamental Emerging Markets Large Company
Index Fund
Schwab Fundamental Global Real Estate Index Fund
Schwab Global Real Estate Fund™
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Schwab Short-Term Bond Market Fund™
Schwab Intermediate-Term Bond Fund™
Schwab Total Bond Market Fund™
Schwab GNMA Fund™
Schwab® Treasury Inflation Protected Securities Index Fund
Schwab Tax-Free Bond Fund™
Schwab California Tax-Free Bond Fund™
Schwab® U.S. Aggregate Bond Index Fund
Schwab® Short-Term Bond Index Fund
Asset Allocation Funds
Schwab Balanced Fund™
Schwab MarketTrack All Equity Portfolio™
Schwab MarketTrack Growth Portfolio™
Schwab MarketTrack Balanced Portfolio™
Schwab MarketTrack Conservative Portfolio™
Schwab Target Funds
Schwab Target Index Funds
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
1
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from
taxable or tax-advantaged alternatives. Some are linked to your
eligible Schwab account to “sweep” cash balances
automatically, subject to availability, when you’re between
investments. Or, for your larger cash reserves, choose one of our
Value Advantage Investments®.
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
1-877-824-5615
© 2017 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
You could lose money by investing in a money market fund. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve
the value of your investment at $1.00 per share, but cannot guarantee they will do so. All Schwab Money Funds with the exception of Schwab Government Money Fund,
Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market
Portfolio may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums
because of market conditions or other factors. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. The money market fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor
will provide financial support to the fund at any time.
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MFR31382-12
00189426