Important Notes and Disclosures

General

Portfolio Management for the Windhaven Strategies is provided by Windhaven Investment Management (“Windhaven”), a division of Charles Schwab Investment Advisory, Inc. (“CSIA”). CSIA is a registered investment adviser and an affiliate of Charles Schwab & Co, Inc. (“Schwab”). Both CSIA and Schwab are separate entities and subsidiaries of The Charles Schwab Corporation.

Information provided herein is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed and CSIA expressly disclaims any liability, including incidental or consequential damages, arising from errors or omissions in this publication.

Asset classes and the proportional weightings in the strategies may change at any time without notice subject to the discretion of the Windhaven Portfolio Management Team.

Charles Schwab Investment Advisory, Inc. (“CSIA”) is registered as an investment adviser with the Securities and Exchange Commission (“SEC”). However, the SEC has neither approved nor endorsed CSIA, its strategies or any of its marketing materials. Any representation to the contrary is a criminal offense.

Risks

Windhaven’s risk management process includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk or the ability to control risk.

Diversification strategies do not ensure a profit and do not protect against losses in declining markets. Investments in managed accounts should be considered in view of a larger, more diversified investment portfolio.

There are risks associated with any investment approach, and Windhaven strategies have their own set of risks to be aware of. First, there are the risks associated with the long-term strategic holdings for each of the strategies. The more aggressive the Windhaven strategy selected, the more likely the strategy will contain larger weights in riskier asset classes, such as equities. Second, there are distinct risks associated with Windhaven strategies’ short-term tactical allocations, which can result in more concentration toward a certain asset class or classes. This introduces the risk that Windhaven could be on the wrong side of a tactical overweight, thus resulting in a drag on overall performance or loss of principal.

Risk-Adjusted Return

1‘Risk-adjusted return: a concept that refines an investment’s return by measuring how much risk is involved in producing that return, which is generally expressed as a number or rating. Risk-adjusted returns are applied to individual securities, investment funds, and portfolios. There are several important risk measures, and each measure is unique in how it measures risk. Windhaven’s approach is a proprietary combination balancing compound annualized return, standard deviation (as measured by the Sharpe ratio), and maximum drawdown collectively at the strategy level. When comparing two or more potential investments, an investor should compare the same risk measures to each investment in order to get a relative performance perspective.

Entities

Portfolio Management for the Windhaven Strategies is provided by Windhaven Investment Management (“Windhaven”), a division of Charles Schwab Investment Advisory, Inc. (“CSIA”). CSIA is a registered investment adviser and an affiliate of Charles Schwab & Co, Inc. (“Schwab”). Both CSIA and Schwab are separate entitites and subsidiaries of The Charles Schwab Corporation.
Please refer to the Windhaven Strategies Disclosure Brochure for additional information.

Privacy Notice

To read more about Schwab’s privacy policy, go to schwab.com/privacy.