Morningstar Advisor - Spring 2007 - (Page 11)

amental Index Funds. Compare the Fundamental Index with traditional cap-weighted indexes. $35,000 $31,533 Growth of $10,000 $25,000 $22,047 ™ $21,449 $15,000 $5,000 97 98 99 00 01 02 S&P 500® 03 04 05 06 07 FTSE RAFI US 1000 Russell 1000® Performance data quoted represents past performance and does not indicate future results. Investment return and principal value of an investment will ﬂuctuate; therefore, redemption of shares may result in loss of principal. The inception date of the index was 9/30/05. Therefore, performance measurements for the index prior to the inception date represent what the index might have achieved, but do not reﬂect the actual performance of the index. Index ﬁgures do not include trading and management costs, which would lower performance. Indexes are unmanaged, and you cannot invest in them directly. Although the funds seek to duplicate the methodology and performance of the FTSE RAFI indexes, expenses, taxes, trading costs and any adjustment to the index methodology will cause the funds to have different performance results. The funds are not in any way sponsored, endorsed, sold or promoted by FTSE International Limited (“FTSE”) or by the London Stock Exchange Plc (“Exchange”) or by the Financial Times Limited (“FT”) or by Research Afﬁliates LLC (“RA”), and neither FTSE nor Exchange nor FT nor RA makes any warranty or representation whatsoever, expressly or implicitly, as to the results to be obtained from the use of the FTSE RAFI US 1000 Index (“Index”) and/or the ﬁgure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTSE in conjunction with RA; however, neither FTSE nor Exchange nor FT nor RA shall be liable (whether in negligence or otherwise) to any person for any error in the Index, and neither FTSE nor the Exchange nor FT nor RA shall be under any obligation to advise any person of any error therein. The Fundamental Index and RAFI tradenames and patent-pending concept are the exclusive property of Research Afﬂiates, LLC and are used by Charles Schwab & Co., Inc. under license through FTSE. FTSE, Rob Arnott and Research Afﬁliates, LLC are not afﬁliated with Charles Schwab & Co., Inc. * Aggregate $500,000 minimum for Institutional Shares. Each Fund offers Select and Investor share classes with lower investment minimums. ©2007 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. CSA 02912 (0407-5493) ADP37143MA (03/07) 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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