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 may be low.
Changes in interest rates also may affect the fund’s share price: a rise in interest rates generally causes the fund’s share price to fall. The longer the fund’s portfolio duration, the more sensitive to interest rate movements its
share price is likely to be. Also, a change in a central bank’s monetary policy or economic conditions, among other things, may result in a change in interest rates, which could have sudden and unpredictable effects on the markets and
significantly impact the value of fixed-income securities in which the fund invests.
Credit Risk. A decline in the
credit quality of an issuer, guarantor or liquidity provider of a portfolio investment or a counterparty could cause the fund to lose money or underperform. The fund could lose money if, due to a decline in credit quality, the issuer, guarantor or
liquidity provider of a portfolio investment or a counterparty fails to make, or is perceived as being unable or unwilling to make, timely principal or interest payments or otherwise honor its obligations.
Inflation-Protected Security Risk. The value of inflation-protected securities, including TIPS, generally will fluctuate in response to changes in “real” interest rates, generally decreasing when real interest rates rise and increasing when
real interest rates fall. Real interest rates represent nominal (or stated) interest rates reduced by the expected impact of inflation. In addition, interest payments on inflation-indexed securities will generally vary up or down along with the rate
of inflation.
Sampling Index Tracking Risk. To the extent the fund uses sampling techniques, the fund will not fully replicate the index and may hold securities not included in the index. As a result, the fund will be subject to the risk that the investment
adviser’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. If the fund uses a sampling approach it may not track the return of the index as well as it
would if the fund purchased all of the securities in the index.
Tracking Error Risk. As an
index fund, the fund seeks to track the performance of the index, although it may not be successful in doing so. The divergence between the performance of the fund and the index, positive or negative, is called “tracking
error.” Tracking error can be caused by many factors and it may be significant.
Liquidity Risk. The fund may
be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.
Securities Lending Risk.
Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Market Trading Risk. Although
fund shares are listed on national securities exchanges, there can be no assurance that an active trading market for fund shares will develop or be maintained. If an
active market is not maintained, investors may find it difficult to buy or
sell fund shares.
Shares of the Fund May Trade at Prices
Other Than NAV. Fund shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of the shares of the fund will approximate the fund’s net asset value
(NAV), there may be times when the market price and the NAV vary significantly. An investor may pay more than NAV when buying shares of the fund in the secondary market, and an investor may receive less than NAV when selling those shares
in the secondary market. The market price of fund shares may deviate, sometimes significantly, from NAV during periods of market volatility or market disruption.
For more information on the risks of investing in the fund,
please see the “Fund Details” section in the prospectus.
Performance
The bar chart below shows how the fund’s investment
results have varied from year to year, and the following table shows how the fund’s average annual total returns for various periods compared to that of an index. This information provides some indication of the risks of investing in the fund.
All figures assume distributions were reinvested. Keep in mind that future performance (both before and after taxes) may differ from past performance. For current performance information, please see
www.schwabfunds.com/schwabetfs_prospectus.
Annual Total Returns (%) as of
12/31
Best Quarter: 4.49% Q3 2011
Worst Quarter: (7.02%) Q2 2013
Average
Annual Total Returns as of 12/31/19
|
|
1
Year
|
5
Years
|
Since
Inception
(8/5/10)
|
Before
taxes
|
8.36%
|
2.55%
|
2.98%
|
After
taxes on distributions
|
7.47%
|
1.85%
|
2.33%
|
After
taxes on distributions and sale of shares
|
4.94%
|
1.65%
|
2.04%
|
Comparative
Index (reflects no deduction for expenses or taxes)
|
|
|
|
Bloomberg
Barclays US Treasury Inflation-Linked Bond Index (Series-L)
|
8.43%
|
2.62%
|
3.07%
|
The after-tax figures reflect the
highest individual federal income tax rates in effect during the period and do not reflect the impact of state and local taxes. Your actual after-tax returns depend on your individual tax situation. In addition, after-tax returns are not relevant if
you hold your fund shares through a tax-deferred