Fund Description: Schwab 1-5 Year Corporate Bond ETF is an exchange-traded index fund or Index ETF which is a separate investment portfolio of Schwab Strategic Trust, an open-end investment management company. <p> INVESTMENT OBJECTIVE: The Schwab 1-5 Year Corporate Bond ETF seeks to track, as closely as possible before fees and expenses, the total return of the Bloomberg US 1-5 Year Corporate Bond Index. <p> INDEX DESCRIPTION: The Bloomberg US 1-5 Year Corporate Bond Index measures the performance of U.S. investment grade, taxable corporate bonds with maturities greater than or equal to one year and less than five years that have $300 million or more of outstanding face value. The securities in the index must be denominated in U.S. dollars and must be fixed-rate. <p> FUND STRATEGY: To pursue its goal, the fund generally invests in stocks that are included in the index. Under normal circumstances it will invest at least 90% of its net assets in these stocks. Under normal circumstances, the fund may invest up to 10% of its net assets in securities not included in its index. The principal types of these investments include those which the Adviser believes will help the fund track the index, such as investments in (a) securities that are not represented in the index but the Adviser anticipates will be added to the index. The fund may sell securities that are represented in the index in anticipation of their removal from the index. The fund may also invest in cash and cash equivalents, and may lend its securities to minimize the difference in performance that naturally exists between an index fund and its corresponding index. Because it may not be possible or practicable to purchase all of the stocks in the index, the Adviser seek to track the total return of the index by using statistical sampling techniques. These techniques involve investing in a limited number of index securities which, when taken together, are expected to perform similarly to the index as a whole. The fund generally expects that its portfolio will hold less than the total number of securities in the index. The Adviser seeks to achieve, over time, a correlation between the fund’s performance and that of its index, before fees and expenses, of 95% or better. However, there can be no guarantee that the fund will achieve a high degree of correlation with the index. <p> FUND MANAGEMENT: The investment adviser for the fund is Charles Schwab Investment Management, Inc., dba Schwab Asset Management