Morningstar Advisor - Spring 2007 - (Page 10)

Introducing Schwab Fund The next generation of index funds. Schwab Funds® introduces a lineup of innovative mutual funds that leverage fundamental indexing, the advanced approach to capturing market performance originated by Rob Arnott. Based on Arnott’s groundbreaking research, FTSE™ RAFI™ indexes use fundamental measures of company scale and success—sales, cash ﬂow, book value and dividends—to weight and select a company’s market value. The result? A suite of mutual funds designed to offer improved performance potential with lower volatility. Fundamental Index Funds. Created for investment professionals. And available exclusively through Schwab Funds. Schwab Fundamental Index Funds—Institutional Shares* Schwab Fundamental U.S. Large Company Index Fund™ Schwab Fundamental U.S. Small–Mid Company Index Fund™ Schwab Fundamental International Large Company Index Fund™ SFLNX SFSNX SFNNX Download Rob Arnott’s paper on fundamental indexing. Visit www.schwabfunds.com/fundamental/ or call 1-866-215-0356 to learn more. Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 1-866-215-0356. Please read the prospectus carefully before investing. The fund does not yet have performance. The FTSE RAFI US 1000 Index is designed to track the performance of the largest U.S. equities, selected based on the following four fundamental measures of ﬁrm size: book value, income, sales and dividends. The 1,000 equities with the highest fundamental strength are weighted by their fundamental scale. The fundamentally weighted portfolio is rebalanced and reconstituted annually. Performance includes the reinvestment of dividends. The S&P 500 Index is a capitalization-weighted index of the 500 largest companies from leading industries, and it treats dividends as reinvested. The Russell 1000 is a market-capitalization weighted index made up of the 1,000 highest-ranking U.S. stocks in the Russell 3000® . http://www.schwabfunds.com/fundamental/

Table of Contents Feed for the Digital Edition of Morningstar Advisor - Spring 2007

Morningstar Advisor Spring 2007 Features Departments Letter from Joe Mansueto Get to Know Morningstar’s Fund Managers of the Year Is Your Client a Stock or a Bond? Less Alpha, More Beta Than Meets the Eye Your Mileage May Vary A Clear-Eyed Look at Hedge Funds Lower Risk, Higher Returns, What’s Not to Like? Without Cash and Clout, Advisors and Clients Get Short End of Stick Get the Strategy Minus the Headaches Analyzing Funds of Hedge Funds Not All Hedge Funds Are Created Equal A Fund with a (Long) View Laying Low and Prospering A Menu of Ideas to Fill Five Market Baskets Oil and Gas Gushing with Values Mutual Fund Analyst Picks Undervalued Stocks Most Popular Variable Annuities What’s New at Morningstar and on the Web You Can’t Always Get What You Want

Morningstar Advisor - Spring 2007

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