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Summary Prospectus
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February 28, 2014
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Schwab Global Real Estate Fund
Ticker
Symbol: SWASX
Before you invest, you may want to review the funds prospectus, which contains more information about the fund and its risks. You can find the
funds prospectus, Statement of Additional Information (SAI) and other information about the fund online at
www.schwabfunds.com/prospectus.
You can also obtain this information at no cost by calling
1-866-414-6349
or by sending an email request to
orders@mysummaryprospectus.com.
If you purchase or hold fund shares through a financial intermediary, the
funds prospectus, SAI, and other information about the fund are available from your financial intermediary.
The funds prospectus
dated June 28, 2013, and SAI dated June 28, 2013, as supplemented February 28, 2014, include a more detailed discussion of fund investment policies and the risks associated with various fund investments. The prospectus and SAI are
incorporated by reference into the summary prospectus, making them legally a part of the summary prospectus.
Investment objective
The fund seeks capital growth and income consistent with prudent investment management.
Fund
fees and expenses
This table describes the fees and expenses you may pay if you buy and hold shares of the fund.
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Shareholder fees
(fees paid directly from
your investment)
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Redemption fee (as a % of the amount sold or exchanged within 30 days of purchase)
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2.00
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Annual fund operating expenses
(expenses that you pay each year
as a % of the value of your investment)
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Management fees
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0.77
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Distribution
(12b-1)
fees
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None
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Other expenses
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0.39
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Total annual fund operating expenses
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1.16
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Less expense reduction
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(0.11
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Total annual fund operating expenses after expense reduction
1
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1.05
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1
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The investment adviser and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine
expenses) of the fund to 1.05% for so long as the investment adviser serves as the adviser to the fund. This agreement may only be amended or terminated with the approval of the funds Board of Trustees.
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This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time
periods indicated and then redeem all of your shares at the end of those time periods. The example also assumes that your investment has a 5% return each year and that the funds operating expenses remain the same. The figures are based on
total annual fund operating expenses after expense reduction. The expenses would be the same whether you stayed in the fund or sold your shares at the end of each period. Your actual costs may be higher or lower.
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Expenses on a $10,000 investment
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1 year
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3 years
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5 years
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10 years
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$107
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$334
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$579
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$1,283
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The fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover may indicate higher transaction costs and may
result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the example, affect the funds performance. During the most recent fiscal year, the
funds portfolio turnover rate was 128% of the average value of its portfolio.
Principal investment strategies
Under normal circumstances, the fund invests at least 80% of its net assets in securities of real estate companies and companies related to the real
estate industry. The fund will provide shareholders with at least 60 days notice before changing this policy. Real estate companies include U.S. and
non-U.S. issuers
that, in the opinion of the
adviser, derive at least 50% of their revenues or profits from the ownership, construction, development, financing, management, servicing, sale or leasing of commercial, industrial or residential real estate or have 50% of their total assets in real
estate. Companies related to the real estate industry include companies whose products and services pertain to the real estate industry, such as mortgage lenders and mortgage servicing companies. The fund does not invest directly in real estate.
The fund invests a significant portion of its total assets in real estate investment trusts (REITs) and other similar REIT-like structures.
REITs are U.S. real estate companies that own and commonly operate income producing real estate, or that use their assets to finance real estate. REITs are not subject to U.S. corporate income tax provided they comply with a number of tax
requirements, including the distribution to shareholders of at least 90% of their net income. A number of other countries have adopted REIT-like structures that are not subject to local corporate income tax provided they distribute a significant
portion of their net income to shareholders and meet certain other requirements. The fund also invests in real estate operating companies (REOCs). REOCs are real estate companies that engage in the ownership, development, management or financing of
real estate. They may also provide services such as property management, property development, facilities management and real estate financing. REOCs are publicly-traded corporations that have not elected to be taxed as REITs. The three primary
reasons for such an election are the (a) availability of tax-loss carry-forwards, (b) operation in non-REIT-qualifying lines of business, and (c) ability to retain earnings.
The fund invests in equity securities, primarily common stocks. The fund may also invest in other types of equity securities, including preferred stocks, convertible securities, rights or warrants to
purchase stocks, and exchange traded funds. The fund may also
invest in debt securities, including high yield securities (junk bonds), issued by or guaranteed by real estate companies or companies related to the real estate industry, such as fixed, floating
or variable rate corporate bonds, collateralized debt obligations, fixed-rate capital securities, mortgage pass through certificates, real estate mortgage investment conduit certificates and collateralized mortgage obligations.
The fund selects investments based on the investment advisers analysis of each issuer. In making this determination, the investment adviser may take
into account a variety of factors that it determines to be relevant from time to time, such as the issuers financial condition, industry position, earnings estimates, management and local and global economic and market conditions. The
investment adviser uses a proprietary database and investment model to help choose and allocate the funds investments.
The fund may
invest in derivative securities, such as swaps, options, futures and options on futures, which are principally tied to the real estate industry, for hedging purposes and to seek returns on the funds otherwise uninvested cash. The derivative
securities may relate to a specific investment, a group of investments, or the funds portfolio as a whole. Derivatives are financial contracts whose values depend upon or are derived from the values of underlying assets, reference rates or
indexes. The fund may use investment techniques such as short sales and reverse repurchase agreements. Please see the Principal risks section for a description of these investments. The fund may lend its securities to certain financial
institutions to earn additional income.
Under normal market conditions, the fund seeks to invest its assets across
different countries and regions. The funds investments in a single country or a limited number of countries may represent a higher percentage of the funds assets from time to time. The fund invests primarily in developed market
countries, but may invest up to 15% of its total assets in emerging market countries. Emerging market countries include, but are not limited to, countries included in the MSCI Emerging Markets Index
SM
. In allocating the funds investments, the investment adviser
considers the size and condition of the real estate market in each country and region and the global real estate market as a whole. Except as provided above, the fund is not required to invest or restricted from investing any minimum or maximum
percentage of its assets in any one country or region.
The fund sells securities when the investment adviser believes it is appropriate to do
so, regardless of how long the securities have been held. Such sales may cause the fund to experience high portfolio turnover and correspondingly increased transaction costs. The sales may also result in capital gain or loss, including
short-term
capital gain or loss. High portfolio turnover may adversely impact the funds performance.
The fund may hold up to 100% of its assets in cash, cash equivalents and other short-term investments for temporary or defensive purposes. The fund may
utilize such tactics when the investment adviser believes that market or economic interests are unfavorable for investors. Under such circumstances, the fund may not achieve its investment objective.
Principal risks
The fund is subject to
risks, any of which could cause an investor to lose money. The funds principal risks include:
Market Risk.
Stock and bond
markets and the values of securities held by the fund rise and fall daily. As with any investment whose performance is tied to these markets, the value of your investment in the fund will fluctuate, which means that you could lose money.
Equity Risk.
The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual
companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Small- and Mid-Cap Risk.
Larger REITs and other real estate companies may be small- to medium-sized companies in relation to the
equity markets as a whole. Historically, mid- and small-cap stocks have been riskier than large-cap stocks. Mid- and small-cap companies themselves may be more vulnerable to adverse business or economic events than larger, more established
companies. Stock prices of smaller companies may be based in substantial part on future expectations rather than current achievements and may move sharply, especially during market upturns and downturns. During a period when mid- and small-cap
stocks fall behind other types of investments bonds or large-cap stocks, for instance the funds small- and mid-cap holdings could reduce performance.
Real Estate Investment Risk.
The fund has a policy of concentrating its investments in real estate companies and companies related to the real estate industry. As such, the fund is subject to
risks associated with the direct ownership of real estate securities and an investment in the fund will be closely linked to the performance of the real estate markets. These risks include, among others, declines in the value of real estate; risks
related to general and local economic conditions; possible lack of availability of mortgage funds or other limits to accessing the credit or capital markets; defaults by borrowers or tenants, particularly during an economic downturn; and changes in
interest rates.
REITs Risk.
In addition to the risks associated with investing in securities of real estate companies and real
estate related companies, REITs are subject to certain additional risks. Equity REITs may be affected by changes in the value of the underlying properties owned by the trusts, and mortgage REITs may be affected by the quality of any credit extended.
Further, REITs are dependent upon specialized management skills and may have their investments in relatively few properties, or in a small geographic area or a single property type. Failure of a company to qualify as a REIT under federal tax law may
have adverse consequences to the fund. In addition, REITs have their own expenses, and the fund will bear a proportionate share of those expenses.
Debt Securities Risk.
Interest rates rise and fall over time, which will affect the funds yield and share price. The credit quality of a portfolio investment could also cause the
funds share price to fall. The fund could lose money if the issuer or guarantor of a portfolio investment or the counterparty to a derivatives contract fails to make timely principal or interest payments or otherwise honor its obligations.
Debt securities may be paid off earlier or later than expected. Either situation could cause the fund to hold securities paying lower than market rates of interest, which could hurt the funds yield or share price. Below investment-grade bonds
(junk bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturns than investment-grade securities.
Foreign Investment Risk.
The funds investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S.
issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges);
differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets.
Emerging Markets Risk.
Emerging market countries may be more likely to experience political turmoil or rapid changes in market or
economic conditions than more developed countries. Such
countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers
(including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with the funds investments in emerging market countries
and, at times, it may be difficult to value such investments.
Geographic Risk.
To the extent the funds investments in a single
country or a limited number of countries represent a higher percentage of the funds assets, the fund assumes the risk that economic, political and social conditions in those countries will have a significant impact on its investment
performance and it may be subject to increased price volatility.
Convertible Securities Risk.
The value of a convertible security
is influenced by changes in interest rates, with investment value declining as interest rates increase and increasing as interest rates decline, and the credit standing of the issuer. The price of a convertible security will also normally vary in
some proportion to changes in the price of the underlying common stock because of the conversion or exercise feature.
Derivatives
Risk.
The funds use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments and could cause the fund to lose more
than the principal amount invested. In addition, investments in derivatives may involve leverage, which means a small percentage of assets invested in derivatives can have a disproportionately large impact. However, these risks are less severe when
the fund uses derivatives for hedging rather than to enhance the funds returns or as a substitute for a position or security.
Leverage Risk.
Certain fund transactions, such as derivatives, short sales and reverse repurchase agreements, may give rise to a form of
leverage and may expose the fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of the funds portfolio securities, which means even a small amount of leverage can have a disproportionately large
impact on the fund. The use of leverage may cause the fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy its obligations.
Short Sales Risk.
The fund will incur a loss if the price of the security sold short increases between the time of the short sale and the time the fund replaces the borrowed security.
Management Risk.
As an actively managed mutual fund, the fund is subject to the risk that its investment adviser will make poor
security selections. The funds investment adviser applies its own investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that they will produce the desired results.
Exchange-Traded Funds (ETFs) Risk.
When the fund invests in an ETF, it will bear a proportionate share of the ETFs expenses. In
addition, lack of liquidity in an ETF can result in its value being more volatile than the underlying portfolio of securities.
Securities
Lending Risk.
Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent.
Liquidity Risk.
A particular investment may be difficult to purchase or sell. The fund may be unable to sell illiquid securities at an
advantageous time or price.
Your investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
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 funds investment results have varied from year to year, and the following table shows how the funds 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/prospectus
. On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund, and the fund no
longer offers multiple classes of shares. The performance history of the fund prior to September 28, 2009 is that of the funds former Select Shares.
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Annual total returns
(%) as of 12/31
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Best quarter: 36.54% Q2 2009
Worst quarter: (31.24%) Q4 2008
Year-to-date performance (before taxes) as of
3/31/13: 4.15%
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Average annual total returns
(%) as of
12/31/12
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1 year
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5 years
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Since
Inception
(5/31/07)
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Before taxes
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25.57
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%
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1.04
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(1.93
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%)
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After taxes on distributions
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23.19
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%
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(0.59
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(3.49
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After taxes on distributions and sale of shares
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16.78
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%
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(0.06
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%)
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(2.51
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%)
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Comparative Index (reflects no deductions for expenses or taxes)
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FTSE EPRA/NAREIT Global Index (Net)
1
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28.98
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%
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N/A
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2
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N/A
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2
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FTSE EPRA/NAREIT Global Index (Gross)
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29.85
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%
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0.66
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%
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(1.45
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%)
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1
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Effective June 28, 2013, the fund changed its comparative index, for purposes of performance calculation, from FTSE EPRA/NAREIT Global Index (Gross) to FTSE
EPRA/NAREIT Global Index (Net). The Net version of the index more accurately reflects how dividends paid to the fund on its foreign securities are treated for tax purposes, and provides a better basis for comparing the funds performance. The
net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes.
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2
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Index inception date: 10/31/2008.
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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 arrangement, such as a 401(k) plan, an individual retirement account
(IRA) or other tax-advantaged account. In some cases, the return after taxes may exceed the return before taxes due to an assumed benefit from any losses on a sale of shares at the end of the measurement period.
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REG56047-09 00112468
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Schwab Global Real Estate Fund
TM
; Ticker Symbol: SWASX
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Investment adviser
Charles Schwab Investment Management, Inc.
Portfolio managers
Jonas Svallin, CFA,
Managing Director and Head of Disciplined Active Equity Strategies, is responsible for the day-to-day co-management of the
fund. He has co-managed the fund since June 2012.
Wei Li, Ph.D., CFA,
Portfolio Manager, is responsible for the day-to-day
co-management of the fund. She has co-managed the fund since March 2013.
Purchase and sale of fund shares
The fund is open for business each day that the New York Stock Exchange (NYSE) is open. When you place orders to purchase, exchange or redeem fund shares
through an account at Charles Schwab & Co., Inc. (Schwab) or another financial intermediary, you must follow Schwabs or the other financial intermediarys transaction procedures.
Eligible Investors (as determined by the fund and which generally are limited to institutional investors) may invest directly in the fund by placing
purchase, exchange and redemption orders through the funds transfer agent. Eligible Investors must contact the transfer agent by phone or in writing to obtain an account application. Eligible Investors may contact the transfer agent:
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by telephone at
1-800-407-0256; or
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by mail in writing to Boston Financial Data Services, Attn: Schwab Funds, P.O. Box 8283, Boston, MA
02266-8323.
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The minimum initial investment for the fund is $100. The minimum may be waived for certain investors or in
the funds sole discretion.
Tax information
Dividends and capital gains distributions received from the fund will generally be taxable as ordinary income or capital gains, unless you are investing through an IRA, 401(k) or other tax-advantaged
account.
Payments to financial intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and
related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial
intermediarys website for more information.
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