The fund seeks capital appreciation in the long term by investing in companies in the United States.

The investment process is designed to highlight companies in the benchmark index that are engaged in the health care sector.

The process focuses on health care companies, such as pharmaceuticals and biotechnology companies, health care facilities operations, and medical product manufacturers and suppliers, and medical provid More

The fund seeks capital appreciation in the long term by investing in companies in the United States.

The investment process is designed to highlight companies in the benchmark index that are engaged in the health care sector.

The process focuses on health care companies, such as pharmaceuticals and biotechnology companies, health care facilities operations, and medical product manufacturers and suppliers, and medical providers and medical services firms.

Then the investment team relies on quantitative techniques to evaluate securities based on three components such as fundamentals, valuation, and momentum.

Next, the research team selects portfolio securities utilizing the Schwab Equity Ratings, a model that assigns ratings to approximately 3,000 of the largest traded stocks.

In addition, the research team utilizes investment data and other analytics to assess a company.

Then the manager constructs a portfolio of stocks that are highly rated by Schwab Equity Ratings. Additionally, the manager purchases lower-rated stocks for purposes of diversification, or for managing the fund’s liquidity, turnover, or volatility relative to the Index.

Also, the portfolio optimization process provides the optimal balance between risk and expected return subject to factors such as the number of stocks desired in the portfolio, the level of portfolio turnover, industry and sector diversification, and volatility considerations.

The fund may invest in derivatives, principally futures contracts primarily to seek returns on the fund’s otherwise uninvested cash assets.

The fund also may lend portfolio securities to earn additional income.

The fund may invest up to 100% of its assets in cash, money market instruments, repurchase agreements and other short-term obligations for temporary defensive purposes during unusual economic or market conditions or for liquidity purposes.

The fund may invest up to 25% of its net assets in non-U.S. companies located in developed market countries; however, it may also invest in companies located in emerging markets.