Mutual Funds

The mutual funds listed below may be used in making your asset allocation to mutual funds. You can invest in these funds in proportion to the asset allocation discussed in the Asset Allocations section of this book.

You may invest in these funds directly by contacting the mutual fund company (click on the links below for each index fund to contact the mutual fund company); or you may invest in them through your broker or financial adviser. Be sure to read the mutual fund prospectus, which describes the risks and other investment considerations of investing in these funds, before you invest. The mutual fund prospectus is available from the mutual fund company.

The mutual funds listed below are a category of investment known as Index Funds. According to the Wall Street Journal (Zweig, J., Thursday, September 1, 2016, Happy Birthday to the Index Fund, C1, New York: The Wall Street Journal), “Index Funds, which own essentially all the stocks or bonds in a benchmark like the S&P 500 or the Barclays U.S. Aggregate Bond average, seek only to match the market rather than beat it. They cost almost nothing to run and outperform most of the highly paid active managers who try to do better.” Because index funds are tied so closely to the performance of the markets, they will fluctuate closely in lock-step with the markets; and those fluctuations can be quite extreme. You should be prepared for this before investing.

You should read the risks and investment considerations pertaining to Index Funds in the mutual fund prospectus for each index fund before you invest.

Index Fund Listing and Asset Allocation Targets:

                    Investor Profile
Asset Class Mutual Fund Conservative Moderate Aggressive
Large Cap U.S. Stocks Schwab S&P 500 (SWPPX) 20% 30% 40%
Small-Cap U.S. Stocks Schwab Small Cap Index (SWSSX) 5% 10% 15%
International Stocks Schwab International Index (SWISX) 5% 10% 20%
Real Estate Investment Trusts (REITs) Schwab Fundamental Global Real Estate Index Fund (SFREX) 10% 10% 10%
Fixed Income (Bonds, etc.) Schwab Total Bd Mkt (SWLBX) 60% 40% 15%
  Total 100% 100% 100%