Fund Description

The fund generally invests in a diversified group of affiliated Schwab mutual funds, and may also invest in affiliated Schwab ETFs and unaffiliated third-party ETFs and mutual funds (underlying funds), in accordance with its target portfolio allocation, which is intended to allocate investments among various asset classes such as equity, fixed income and cash and cash equivalents (including money market funds). Normally, the fund invests 55-65% of its assets in equity securities (including stocks and equity funds) and 35-45% in fixed-income securities (including bonds and fixed-income funds), and cash and cash equivalents (including money market funds), while investing at least 25% in each. It allocates across large-cap, small-cap, and international equity, including some emerging markets exposure, and selects bond funds based on total return potential, maturities, and credit quality. It may invest directly in securities to maintain allocations; underlying funds may use derivatives, principally futures. For defensive or liquidity purposes, it may invest up to 100% in cash and short-term instruments and may not achieve its objective.