23
Morningstar FundInvestor
June 2
013
Morningstar Analyst Rating
02-25-13
´
Morningstar Pillars
Process
Performance
People
Parent
Price
¶
§
¶
Positive
Positive
Neutral
Negative
Neutral
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
12.62
9.44
9.64
8.18
5.82
10.05
. . . . . .
Total Return %
17.50
16.30
-0.21
19.71
42.14
-40.07
. . . . . .
+/-S&P 500
2.13
0.30
-2.32
4.65
15.68
-3.07
. . . . . .
+/-Russ 1000 Vl
0.57
-1.21
-0.60
4.20
22.45
-3.22
. . . . . .
Income Return %
0.00
2.51
1.82
1.81
1.56
2.01
. . . . . .
Capital Return %
17.50
13.79
-2.03
17.90
40.58
-42.08
. . . . . .
Total Rtn % Rank Cat
23
31
44
4
5
74
. . . . . .
Income $
0.00
0.18
0.15
0.09
0.20
0.09
. . . . . .
Capital Gains $
0.00
0.00
0.00
0.00
0.00
0.01
. . . . . .
Expense Ratio %
.
0.32
0.35
0.35
0.35
0.35
0.35
. . . . .
Income Ratio %
.
2.13
2.06
1.77
1.88
2.19
1.66
. . . . .
Turnover Rate %
.
32
11
27
28
26
2
. . . . .
Net Assets $mil
2,614
1,965
1,560
1,133
728
264
361
. . . . .
Performance
05-31-13
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
-13.57 27.44 26.21 2.26 42.14
8.80 -11.35 11.03 11.79 19.71
6.12 -0.49 -15.82 12.24 -0.21
11.33 -3.33
6.30 1.65 16.30
12.76
. . . .
Trailing
Total
+/-
+/- Russ %Rank Growth of
Return% S&P 500 1000 Vl
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
8.79 0.57
0.55
42 10,879
19.45 3.02
0.10
26 11,945
32.72 5.44
0.01
23 13,272
16.75 -0.12
0.16
19 15,914
8.07 2.64
3.34
2 14,741
. . . . .
. . . . .
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
16.13
15
0.53
56
7.38
1
0.63
60
. . . .
Potential Capital Gain Exposure: 21% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
32.72
3 Yr
16.75
+Avg
Avg
5 Yr
8.07
High
+Avg
10 Yr
. . . .
Incept
5.70
Other Measures
Standard Index
Best Fit Index
S&P 500
Russ 1000 Vl
Alpha
-0.8
0.0
Beta
1.05
1.01
R-Squared
98
99
Standard Deviation
14.85
Mean
16.75
Sharpe Ratio
1.12
Morningstar’s Take
by Alex Bryan 02-25-13
Schwab Fundamental U.S. Large Company
Index SFLNX offers active returns with passive
discipline.
Unlike most index funds, this fund weights its
holdings based on fundamental measures of size,
including retained operating cash flow (reinvested
profits), sales, and capital distributions (dividends and
buybacks), rather than market capitalization.
Proponents of fundamental indexing argue that these
metrics better reflect each firm’s intrinsic value than
market capitalization. According to this line of
reasoning, market-cap weighting tends to overweight
expensive stocks and underweight cheaper names.
Efficient-market advocates and other critics dismiss
fundamental indexing as a repackaged value strategy.
Most fundamental indexes exhibit a value tilt. But a
50-country study by Christian Walkshausl and
Sebastian Lobe covering 1982-2008 found fundamental
indexing added significant excess returns globally,
even after controlling for value and other risk
exposures. Fundamental indexes’ contrarian bent may
contribute to this superior performance. The fund
pares back exposure to stocks whose valuations
expand relative to peers and increases exposure to
those whose valuations compress. These bets against
the market have made the fund slightly more volatile
than the Russell 1000 Index over the past five years.
This is a suitable core holding for long-term
investors who can stomach a little extra volatility to
capitalize on potential market mispricing. This strategy
can add value by reducing exposure to expensive
growth stocks. Over the long-run, betting on value has
paid off handsomely in nearly every market. Research
suggests that investors tend to extrapolate recent
growth too far into the future, which can cause prices
to diverge from fundamental value. This fund counters
this bias by anchoring its weights in each company’s
proven capacity to create value. Given its small-cap
and value tilts, it will likely underperform during
market downturns and outperform during bull markets.
It can offer some protection against growth-oriented
market bubbles.
Address:
Schwab Capital Trust
San Francisco, CA 94104
800-435-4000
Web Address:
Inception:
04-02-07
Advisor:
Charles Schwab Investment Management Inc
Subadvisor:
None
NTF Plans:
Schwab OneSource
Minimum Purchase:
$100
Add: $0 IRA: $0
Min Auto Inv Plan:
$0
Add:
.
Sales Fees:
No-load, 2.00%R
Management Fee:
0.30% mx./0.18% mn.
Actual Fees:
Mgt:0.24% Dist:
.
Expense Projections:
3Yr:$113
5Yr:$197 10Yr:$443
Income Distribution:
Annually
Data through May 31, 2013
Schwab Fdmtl US Lg Co Idx
Ticker
Status Yield Total Assets
Mstar Category
SFLNX Open
1.9% $2,614 mil
Large Value
100% 100% 99% 99% 99% 99% 98%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 05-13
Historical Profile
Return
Risk
Rating
High
Above Avg
Above Avg
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
S&P 500
Performance Quartile
(within Category)
History
10.0
4.0
6.0
12.0
Portfolio Analysis
01-31-13
Share change since 10-12 Total Stocks:614 Sector
PE Tot Ret% % Assets
Exxon Mobil Corporation
Energy
9.2 5.92 4.90
Chevron Corp
Energy
9.2 15.27 2.48
S+p 500 E Mini Index Fut
. . .
1.94
AT&T Inc
Comm Svs 27.1 6.47 1.90
Ssc Goverment Mm Gvxx
. . .
1.86
Bank of America Corporat
Finan Svs 42.2 17.74 1.82
Procter & Gamble Co
Cnsmr Def 19.3 14.78 1.61
General Electric Co
Industrl
16.3 12.01 1.59
ConocoPhillips
Energy
10.5 8.05 1.59
Microsoft Corporation
Technology 18.1 32.39 1.43
Wal-Mart Stores Inc
Cnsmr Cyc 14.9 11.07 1.38
Pfizer Inc
Hlth care 19.2 10.49 1.33
JPMorgan Chase & Co
Finan Svs
9.8 25.52 1.32
Johnson & Johnson
Hlth care 22.8 21.90 1.29
Verizon Communications I
Comm Svs 122.0 14.42 1.28
International Business M Technology 14.4 9.54 1.24
Citigroup Inc
Finan Svs 18.2 31.47 1.23
Hewlett-Packard Co
Technology
.
72.29 0.91
Time Warner Inc
Cnsmr Cyc 17.9 23.24 0.89
Valero Energy Corporatio
Energy
7.1 31.59 0.86
Current Investment Style
Market Cap %
Giant
45.2
Large
35.3
Mid
17.3
Small
1.9
Micro
0.3
Avg $mil:
43,442
Value Blnd Growth
Large Mid Small
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
12.72
1.71
0.75
6.63
2.33
0.98
1.01
0.65
1.10
0.84
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
9.83
3.56
4.35
1.83
3.41
1.13
0.68
2.54
0.34
0.88
Profitability
% Rel Category
Return on Equity
Return on Assets
Net Margin
17.06
6.46
9.68
1.03
1.06
0.81
Sector
Weightings
% of
Stocks
Rel
S&P 500 High
3 Year
Low
Cyclical 29.98 1.04
BasicMat 3.34 1.09 4 3
CnsmrCyc11.77 1.37 12 9
FinanSvs 14.14 0.90 20 14
Real Est 0.73 0.50 2 1
Sensitive 44.22 1.01
CommSrvs 5.53 1.38 7 6
Energy 15.77 1.48 16 11
Industrl 11.64 1.02 13 12
Technlgy 11.28 0.64 11 9
Defensive25.79 0.93
CnsmrDef10.81 0.89 12 10
Hlthcare 10.81 0.91 11 9
Utilities 4.17 1.16 6 4
h
r
t
y
u
j
i
o
p
a
k
s
d
f
Composition - Net
(% of Stock)
Cash
0.1
Stocks 98.0
Bonds 1.9
Other
0.0
Foreign 2.9
©
2013Morningstar, Inc.All rights reserved. The information herein isnot represented orwarranted to be accurate, correct, complete or
timely. Pastperformance isnoguarantee of future results.Access updated reports at
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